Paging Network Inc. told the Securities and Exchange Commission it must delay filing its 10-K Annual Report and fourth quarter results for 1999 until April 14, past the March 30 due date.
Officially, the company said its ongoing merger with Arch Communications Group Inc. has proved a drain on its finance and accounting organizations and management, requiring significant attention at the expense of other duties like quarterly reports.
More specifically, sources close to the situation say PageNet’s auditors had an issue with how the company was recognizing revenues and asked PageNet to redo its numbers.
PageNet said a preliminary analysis of operations show an expected net loss of about 315,000 domestic units in service and operating results substantially lower for the fourth quarter than reported in the third. Answering continued liquidity concerns, PageNet said it had about $28 million in cash at the end of last year.
Sources blamed some of the reduced subscriber base on “phantom subscribers,” or nonexistent subscribers incorrectly listed as active units, which were discovered once PageNet transferred its billing system to the new Centers of Excellence infrastructure.
The delay is not expected to have any impact on PageNet’s ongoing merger with Arch, according to PageNet and other sources.
