Restated 2008 and 2009 financial results released by The Center for Wound Healing

Sep 11 2009

The Center for Wound Healing, Inc. (OTCBB:CFWH), a leading operator of comprehensive wound care treatment centers that offer hyperbaric oxygen therapy as well as other advanced wound care treatment modalities, today announced that the Company’s consolidated financial statements for the quarter ended March 31, 2008 and for the year ended June 30, 2008 need to be restated as described below, and that investors should no longer rely upon those consolidated financial statements. The Company will file an amendment to the 2008 Form 10-QSB and 2008 Form 10-KSB to restate the 2008 Financial Statements as soon as practicable.

The Company also announced that consolidated financial statements for the quarterly periods ended September 30, 2008, December 31, 2008 and March 31, 2009 need to be restated as described below and that investors should also no longer rely upon the 2009 Financial Statements. The need to restate the aforementioned financial statements was determined in consultation with the Company’s independent auditors as they were preparing the Form 10-KSB for the year ended June 30, 2009, the first periodic financial statement since their engagement. The Company’s former auditors also have been consulted, and concur with the restatement.

The aggregate effect of the restatements will be to decrease the Company’s consolidated net loss by $460,000 for the year ended June 30, 2008, and by $800,000 for the nine months ended March 31, 2009; and to increase the Company’s consolidated stockholders' equity by $4.0 million at June 30, 2008, and $4.8 million at March 31, 2009.

The restatements result from a correction to previous accounting used in the $17.5 million financing the Company consummated on March 31, 2008 with Bison Capital Equity Partners. In particular, a modification needed to be made to the Black Scholes model related to the pricing of warrants issued to Bison Capital Equity Partners to purchase shares of the Company’s common stock, the amortization of costs associated with such financing, and the issuance of appropriate number of warrants. Specifically, it was determined that noncash interest expense was overstated, shareholders’ equity was understated, and long-term liabilities and other assets were overstated.

Source: The Center for Wound Healing, Inc.