Westport, CT, April 24, 2006--IWT Tesoro Corp. has been delayed filing its Annual Report on Form 10-K with the Securities and Exchange Commission for the fiscal year ended December 31, 2005.
Tesoro expects to file its Annual Report as soon as practicable.
The delay is due to addressing the appropriate accounting for a $5.0 million convertible note issued in August 2005. The note was initially convertible at a fixed conversion price and subject to certain modifications of the conversion price upon issuing Tesoro shares at a price less than $2.74 per share. On March 31, 2006, the terms of the note were modified to eliminate certain modifications of the conversion price upon issuing shares at less than $2.74 per share. After further review of the transaction, Tesoro has determined that the most appropriate accounting for the transaction is as a derivative security and not as convertible debt. As a result, Tesoro will be restating is Form 10-Q for the quarter ended September 30, 2005. Its Form 10-K will further reflect this accounting.
Henry J. Boucher, Tesoro's CEO, said, "Amending these convertible notes has been highly favorable for Tesoro, and going forward, the accounting of these notes will be fairly straightforward."
IWT Tesoro Corporation is one of a few publicly traded tile distributors that is wholesale-driven.
