GSIC postponed the release of its 2005 third quarter results because the company’s internal auditor and controller in August 2005 found potential discrepancies amounting to approximately $283,000 that were recorded as part of the company's Q4 2004 results. Also, during the third quarter of fiscal 2005, a systemic control used by the company to reconcile its accounts payable balance failed, causing the company to estimate that it may need to record a charge of as much as $300,000, or a gain of as much as $1.2 million.

Net revenues for Q3 are expected to be approximately $84 million to $85 million, compared to previously issued guidance of $79 million to $84 million. Management expects net loss to be approximately $4.2 million to $4.5 million, or a loss of approximately 10 cents per share compared to the company's guidance of a net loss of $2.5 million to $3.0 million, noting that the decrease in net income guidance is the result of the cost of partner launches in the second half of fiscal 2005 being greater than anticipated, and to a lesser extent, because of delays in actual launch dates.

As a result of these factors, which the company also expects to impact its fourth quarter results, GSIC now estimates net income for fiscal 2005 to be approximately $5.5 million to $6.5 million compared the company's guidance issued on July 27 of $9.5 million to $10.5 million.