Grand Cayman, British West Indies- Wednesday, September 22, 2004--Xcelera Inc. (AMEX: XLA), a European technology
company, today commented on its Annual Report on Form
20-F for the fiscal year ended January 31, 2004 and
its receipt of a notice from the American Stock
Exchange that its common stock is subject to being
delisted from the Exchange.On February 3, 2004, Xcelera received a letter from
the Division of Corporation Finance of the Securities
and Exchange Commission containing accounting and
legal comments of the staff of the SEC with respect
to the Company’s Annual Report on Form 20-F for the
fiscal year ended January 31, 2003. On April 15,
2004, Xcelera submitted a letter to the SEC
containing supplemental information and responses to
the SEC comments. Because the Company had not
received a response from the SEC to its April 15,
2004 letter, the Company filed a notification of late
filing on Form 12b-25 with the SEC on August 3, 2004
relating to its 2004 Form 20-F.
The Company received a response on August 16, 2004
from the SEC to the April 15, 2004 letter containing
further comments and clarifications relating to the
2003 Form 20-F. In that letter, the SEC requested
that the Company provide analysis to support the
Company’s position that it is not an investment
company under the Investment Company Act of 1940.
The Company believes that it is not an investment
company. If the Company were to inadvertently become
an investment company, it would become subject to
regulation under the Investment Company Act of 1940.
Additionally, the SEC requested clarification
regarding the Company’s accounting treatment of the
settlement during the fiscal year ended January 31,
2003 of a convertible note issued by the Company to
Hewlett-Packard Company. The Company accounted for
the settlement of the note as an extinguishment of
debt. If the SEC were to require alternate
accounting treatment for the settlement, the
Company’s net income for the fiscal year ended
January 31, 2003 could be reduced by approximately
$43.8 million, but the Company’s cash balance and
other financial information would not be affected.
The Company believes that it has properly accounted
for the settlement.
The Company expects to submit a letter with
supplemental information and responses to the SEC
comments shortly. Xcelera intends to file an amended
2003 Form 20-F to incorporate the SEC comments as
soon as practicable after the SEC has reviewed and
approved the Company’s proposed amendments to its
2003 Form 20-F. The Company currently expects to
file its amended 2003 Form 20-F by November 15, 2004.
The Company is currently delinquent in its filing
requirements with the SEC relating to its 2004 Form
20-F. As a result of this delinquency, the Company
received notice on September 20, 2004 from the
American Stock Exchange that the Company no longer
complies with the Exchange’s continued listing
standards, as set forth in Section 1101 of the
American Stock Exchange Company Guide, and that its
common stock is subject to being delisted from the
Exchange. The Company plans to appeal the Exchange’s
determination. The Company also expects to file its
2004 Form 20-F by November 15, 2004.
The Company anticipates that the financial statements
to be contained in its 2004 Form 20-F will reflect
for the fiscal year ended January 31, 2004, revenues
of approximately $4 million, loss from operations of
approximately $23 million, other expenses, net,
attributable to losses in the Company’s securities
portfolio, of approximately $54 million and net loss
of approximately $77 million. The Company also
anticipates that the financial statements to be
contained in its 2004 Form 20-F will reflect that at
January 31, 2004, the Company had cash, cash
equivalents and marketable securities of
approximately $73 million, no material debt and total
assets of approximately $77 million. The inclusion
of the financial information for the fiscal year
ended January 31, 2004 and as of January 31, 2004 in
the Company’s 2004 Form 20-F is subject to completion
of an audit of the Company’s financial statements by
its independent auditors and resolution of the
outstanding comments from the SEC with respect to the
Company’s 2003 Form 20-F.
The Company also anticipates that the 2004 Form 20-F
will reflect that the Company had approximately $62
million in cash, cash equivalents and marketable
securities and no material debt at August 31, 2004.
About Xcelera Inc.
Xcelera Inc. is a European technology company focused
on founding, developing, operating and financing
technology companies. For more information, visit
Xcelera on the Web at www.xcelera.com.
This press release may contain “forward-looking
statements” within the meaning of the securities
laws. The Company believes that its expectations are
reasonable and are based on reasonable assumptions.
However, risks and uncertainties relating to future
events that could cause actual results to differ
materially from our expectations include the factors
discussed in the Company’s Annual Report on Form 20-F
for the Fiscal Year Ended January 31, 2003 filed with
the Securities and Exchange Commission. The Company
does not intend, and assumes no obligation, to update
any forward-looking statements.
