Edgewater is performing a forensic investigation of Fullscope's records to determine the extent of the embezzlement.In documents filed with the SEC, Edgewater said a preliminary review showed the activity did not have a material impact on the financial statements for the period ended March 31.

However, it was determined that the embezzlement impacted Fullscope's pre-acquisition audited financial statements for the years ended Dec. 31, 2007 and Dec. 31 2008. Those statement of then privately owned Fullscope were used as exhibits in an Edgewater SEC filing on March 19. Until the impact of the embezzlement on Fullscope's statements can be determine, Edgewater is advising that Fullscope's financial statements cannot be relied upon.

Those statements show that Fullscope lost $350,037 in fiscal 2008, compared to net income of            $945,036 for 2007. Revenue for fiscal 2008 was just under $21 million,  down just under 10 percent from $23.3 million for fiscal 2007. It also had a $28 million accumulated loss and a $3.9 million shareholder's deficit on Dec. 31, 2008.

However, Fullscope had a significant improvement for the first three quarters of 2009 when it recorded $25.2 million in sales, compared to just under $17 million in the similar period of 2008. Net income for the first nine months last year was $3.5 million, compared to $97,000 a year earlier.