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Thursday, August 03, 2006, 07:25 pm PT (10:25 pm ET)

Apple may need to restate historical financial statements

Apple Computer has discovered additional evidence of irregularities relating to past stock option grants and will likely need to restate its historical financial statements as a result, the company said on Thursday.

In late June, Apple proactively announced that an internal investigation discovered irregularities related to the issuance of certain stock option grants made between 1997 and 2001.

The company notified the SEC of the irregularities and a special committee of its outside directors immediately hired independent counsel to perform an internal investigation.

"Although the investigation is ongoing, the Company has discovered additional evidence of irregularities," Apple said in an updated statement on Thursday. "In light of this, management has concluded, and the audit committee of the board of directors agrees, that the Company will likely need to restate its historical financial statements to record non-cash charges for compensation expense relating to past stock option grants."

Apple said it has not determined the amount of such charges, the resulting tax and accounting impact, or which periods may require restatement. Accordingly, the company on Thursday filed a Form 8-K with the SEC, stating that its financial statements and all earnings and press releases and similar communications relating to periods commencing on September 29, 2002 should therefore not be relied upon.

As a result of the ongoing investigation, Apple said it will also delay the filing of its Form 10-Q for the quarter ended July 1, 2006.

"[Apple] is focused on resolving these issues as quickly as possible and plans to file its Form 10-Q and any required restated financial statements following completion of the investigation," the company added.

Last month, investors on behalf of the company filed two separate lawsuits in California courts charging current and former company executives and directors with colluding to backdate stock options in order to maximize their profits.