Summary
This 8-K filing from TASER International, Inc. (now Axon Enterprise, Inc.) on November 15, 2005, announces that previously issued financial statements for the periods ending March 31, 2005, and June 30, 2005, should no longer be relied upon. The company identified an error related to the incorrect accrual of legal and other professional fees. This error stemmed from a lack of effective internal controls, leading to invoices being recorded in the wrong accounting periods due to delays in receipt by the accounting department.
Key Highlights
- 1TASER International (AXON) will restate financial statements for Q1 and Q2 2005 due to accounting errors.
- 2The errors involve incorrect accrual of legal and other professional fees.
- 3Internal control deficiencies related to invoice processing and timely recording of expenses are cited as the cause.
- 4The restatement will shift expenses between Q1 and Q2 2005, impacting net income for those periods.
- 5Q3 2005 sales, general, and administration (SG&A) expenses are expected to decrease slightly from previously reported figures.
- 6Q3 2005 net income is expected to increase by approximately $60,000 to $0.3 million.
- 7The company has filed an extension for its Q3 2005 10-Q filing to incorporate these restatements.
Frequently Asked Questions
The company's financial statements for the periods ending March 31, 2005, and June 30, 2005, should not be relied upon due to an error in the accrual of legal and other professional fees. Invoices were recorded in the incorrect accounting periods due to issues with internal controls and delays in invoice receipt and processing.
The restatement will reallocate expenses between the first and second quarters of 2005, leading to adjustments in net income for those periods. For the third quarter of 2005, reported sales, general, and administration expenses are expected to decrease slightly, and net income is projected to increase by approximately $60,000 to $0.3 million. There is no impact on revenues.
The company is in the process of completing its analysis and will file amended Forms 10-Q for the quarters ended March 31, 2005, and June 30, 2005, to reflect the restatement. An extension has been filed for the Form 10-Q for the quarter ended September 30, 2005, to include the impact of these adjustments.
The company identified that its internal controls over the recording of legal and professional fees were not operating effectively. This was exacerbated by delays in receiving invoices from third parties, which prevented the accounting department from recording them in the correct period when the company closed its books.