Business Context and Reporting Period
Company: Air Industries Group, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: April 13, 2009
Subject: Non-reliance on previously issued financial statements for the year ended December 31, 2007.
Key Financial Metrics
The filing does not provide specific numerical values for revenue, profit, cash flow, margins, debt, or liquidity. The report indicates that the magnitude of the required financial adjustment is currently unknown.
Material Changes and Restatement Details
- Accounting Error: During the preparation of December 31, 2008 financial statements, the Company discovered that certain expenses properly classified as Cost of Goods Sold (COGS) were incorrectly recorded as a reduction of accounts payable and accrued expenses.
- Impact on 2007 Statements: Both COGS and accounts payable/accrued expenses for the year ended December 31, 2007, were understated by an equal amount.
- Financial Consequence: The restatement will reduce the reported net income for the year ended December 31, 2007, and reduce stockholders' equity as of that date.
- Next Steps: The Company will file an amendment to its 2007 Form 10-K to restate the financial statements as soon as practicable.
Management Commentary and Risks
The Audit Committee, based on management's recommendation, concluded that investors should no longer rely on the consolidated financial statements included in the 2007 Form 10-K. Management and the Audit Committee have discussed these findings with the Company's independent registered public accounting firm, Rotenberg Meril Solomon Bertiger & Guttilla, P.C.
Investor Verification Checklist
- Verify the specific dollar amount of the adjustment once the amended 2007 Form 10-K is filed.
- Confirm the revised net income and stockholders' equity figures for the 2007 fiscal year.
- Monitor for any additional restatements related to the 2008 period where the error was discovered.
- Review the communication with the independent auditor regarding the nature of the internal control failure.