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IBill Parent Says It Needs to Restate Earnings for 4 Quarters

IBill Parent Says It Needs to Restate Earnings for 4 Quarters
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Apr 3, 2006 11:16 AM PDT    Text size: 
DEERFIELD BEACH, Fla. — Interactive Brand Development reported in a filing to the Securities and Exchange Commission that it needs to restate its financial statements for the last four quarters.

With the filing, the company also said a recent audit by a third-party accounting firm found that previous accounting numbers could sink the value of its investments in Penthouse Media Group and Interactive Television Network Inc., which markets XTV.

IBD, which owns third-party credit card processor iBill, has a 35 percent stake in Penthouse and an approximate 18 percent share in ITVN.

“It appears at this time that … historical results of operations, financial position, balance sheet and certain disclosures may be impacted by the issues raised [in the quarterly filings to the SEC],” IBD said in another SEC filing.

“During the review, it was determined that the value of the [Penthouse] investment, which was acquired through the issuance of the convertible notes and series E, F and G stocks needed to be reduced by approximately $21 million to approximately $22 million,” the company said.

Penthouse Marc Bell and ITVN Charles Prast both told XBiz that IBD's announcement won't have impact on either of their companies' performances.

Calls to IBD President Gary Spaniak and other company officials were not immediately returned Monday to XBIZ.

In August, Spaniak signaled a continued deficit after the company delayed that quarterly SEC filing.

“We’re still running at a loss, but we’ve elected to go forward,” Spaniak told XBIZ at the time. “We could have claimed bankruptcy, but we didn’t.”

Through the past few years iBill, which operates from offices in Deerfield Beach, Fla., has been connected to a number of scandals and numerous webmaster complaints over nonpayments.

But as late as last Wednesday, Spaniak told XBIZ that the company is “still working” to pay online adult companies that settled with the company last year.

“We don’t know yet [the resolution],” Spaniak said at the time. “But so far we’ve paid companies $22 million. We’re still working on the notes.”

IBill last year negotiated deals with some companies after the third-party processor had problems paying clients when credit card processor First Data withheld funds and dropped its account.

In another twist in its sordid history, IBD last month denied allegations that iBill leaked credit card information that may have eventually made its way onto the Internet and into the hands of fraud artists and spammers. Wired News reported that 17 million customers of the third-party processor have had their personal information released over the Internet.

And just last week, iBill agreed to outsource its online payment processing to Etelegate.com, an unrelated third-party processor that converts credit cards, checks, Web 900 and dialer transactions.

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