Air T Inc., a holding company, will have to restate its financial statements for the past two years, according to a filing with the Securities and Exchange Commission.
The company filed a non-reliance on previously issued financial statements or a related audit report or completed interim review on Thursday.
In 2015, Air T closed on a financing agreement with Delphax Technologies Inc., a provider of high-speed digital printing equipment, specifying that Air T would support the commercial rollout and manufacturing costs of the Delphax elan 500 digital color print system.
Under the agreement, Delphax issued 43,000 shares of series B stock for $1.05 million in cash and issued a stock purchase warrant to Air T to acquire another 95,600 shares of Delphax series B stock at $33.47 a share.
Delphax’s Canadian subsidiary, Delphax Technologies Canada Ltd., issued a $2.5 million five-year subordinated promissory note.
On Oct. 5, the Audit Committee of Air T concluded the company could not base the attribution of Delphax’s net income or loss to non-controlling interests solely on the company’s ownership of series B stock.
Instead, the board said the attribution should be based on consideration of all of Air T’s investments in Delphax and Delphax Canada.
The Air T audit committee concluded the financial statements for periods after Nov. 24, 2015 may no longer be relied on, and Air T plans to restate these statements as quickly as possible.
Air T provides overnight air freight services to the delivery industry, manufactures and sells special purpose industrial equipment and provides facilities maintenance to airlines.
Delphax is a global company specializing in the design, manufacture and delivery of advanced digital print production systems.
Air T stock closed Friday at $19, down 25 cents. Nasdasq has warned the company that it faces delisting but has given the company an extension to regain compliance.
Delphax stock is at 1 cent in Friday afternoon trading.