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Non-Recurring Cash Flows Complicate Hesco Valuation

August 2014 | Issue 75 NON-RECURRING CASH FLOWS COMPLICATE HESCO VALUATION Patricia Laidler  (Petitioner) was a 10% shareholder of Hesco Bastion USA, Inc. (“Hesco”).  The remaining  90% interest in Hesco was owned by Hesco Bastion Environmental, Inc. (“Environmental”).  On January 26, 2012, Hesco was merged into Environmental. Pursuant to the terms of the merger, Petitioner [...] More...

Judge Stands By His Deal Price Valuation

June 2014 | Issue 74 Introduction In a recent Delaware dissenting shareholder case, Vice Chancellor Glasscock was called upon to perform an appraisal in order to determine the fair value of the stock of a company involved in a merger.  Instead of using the methods normally employed to perform such an appraisal, such as an [...] More...

Preferred Shareholders Prevail in Trados Transaction

April 2014 | Issue 73 Trados, Inc. was sold to another company for $60 million in July of 2005.  The sale proceeds were distributed as follows; Trados management received $7.8 million, preferred shareholders received $52.2 million and common stockholders received nothing. Certain common stockholders sued.  The story is told in a Delaware Chancery matter called [...] More...

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Financial Reporting Valuations

Hempstead & Co. provides fair value advice related to the preparation of financial statements.

Financial officers and auditors turn to us for advice and assistance in carrying out goodwill impairment studies and purchase price allocation studies required in the preparation of financial statements which conform to generally accepted accounting principles (GAAP).  Goodwill impairment and valuation studies are used in the implementation of ASC 805, Business Combinations, ASC 350, Goodwill and Other Intangible Assets, and ASC 360, Accounting for the Impairment or Disposal of Long-lived Assets.

Accountants and financial officers also rely on us for assistance in valuing stock options issued as employee compensation, or for other purposes. ASC 718, Compensation-Stock Compensation, requires that the fair value of stock options be determined for use in preparation of financial statements. Hempstead & Co. is experienced in all of the methodologies used in option valuation, including Black-Scholes, binomial and Monte Carlo.

Officers of Hempstead & Co. serve on the Appraisal Issues Task Force, AITF, a national organization which provides input to the SEC and the Financial Accounting Standards Board, FASB, on accounting-related valuation issues.