- Reclassification of three financing related transactions increases reported operating cash flow without impact to Income Statement or Balance Sheet - MD&A amended to incorporate restatement, and to voluntarily enhance disclosure for SEC
OTTAWA, March 10 /CNW Telbec/ - Allen-Vanguard Corporation (the "Company" or "Allen-Vanguard") (TSX: VRS) of Ottawa, Canada announced today the restatement of its September 30, 2008 Consolidated Statement of Cash Flows and the re-filing of its September 30, 2008 MD&A. All figures are in Canadian dollars and reported in thousands.
The restatement was required to correct the classification of three transactions which, while related to financing activities, are technically required to be classified instead as cash flows from operating activities rather than cash flows from financing activities. The requirement to restate was discovered while the Company was assisting Tailwind Financial Inc. to respond to questions relating to the previously announced merger between the companies. Allen-Vanguard has also voluntarily added further disclosure in its MD&A, unrelated to the reasons for restatement, to assist Tailwind with its disclosure to the SEC and shareholders.
The restatement affects only the Company's September 30, 2008 Consolidated Statement of Cash Flows and has no impact on prior periods, nor is there any impact to the company's Consolidated Balance Sheets and Consolidated Statements of Operations.
The restatement of the September 30, 2008 Consolidated Statement of Cash Flows results in cash flows from operating activities totaling $40,792, an increase of $14,819 over the previously reported $25,973.
Three transactions, totaling $14,819, were identified as needing reclassification, all of which were related to financing activities. Deleted from previously reported cash flows from financing activities and reclassified as cash flows from operating activities were:
- Issuance of warrants in connection with issuance of senior debt facility: - Issuance of common stock for payment of senior debt: $5,559 - Issuance of common stock for payment of compensation related to vendor notes settlement: $3,794
Reclassifying these three transactions to cash flows from operating activities resulted in an increase in cash flows used in financing activities to ($78,185) from the previously reported ($63,366).
The Company added that this restatement reflects a technical reporting correction resulting from interpretation of Generally Accepted Accounting Principles, and that management in consultation with the Company's auditors, KPMG, recommended the restatement to Allen-Vanguard's audit committee. The Company noted that this technical correction has no impact on the operation of its business.
In order to incorporate the restatement of its Consolidated Statement of Cash Flows the Company has refiled the MD&A previously issued on December 29th, 2008. Most of the amendments were made by Allen-Vanguard on a purely voluntarily basis to avoid potential confusion among its shareholders who may also be analyzing the filings of Tailwind. The additional information was suggested by the US Securities and Exchange Commission as helpful to the Tailwind shareholder base. The Company has also updated the subsequent events section of the MD&A to include up-to-date information.
Forward looking statements
This press release may contain forward-looking statements, which reflect Allen-Vanguard and Tailwind Financial Inc's current expectations regarding future events, strategy, expected performance and condition. Forward-looking statements include statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as "expects," "anticipates," "plans," "believes," "estimates" or negative versions thereof and similar expressions including the completion of the transaction, the expected benefits of the transaction and the completion of the Rights Offering. In addition, any statement that may be made concerning future performance, strategies or prospects, and possible future acquisitions or dispositions, is also a forward-looking statement. Forward-looking statements are based on current expectations and projections about future events and are inherently subject to, among other things, risks, uncertainties and assumptions about the parties and economic factors. Forward-looking statements are not promises or guarantees of future performance, and actual events and results could differ materially from those expressed or implied in any forward-looking statements made about Allen-Vanguard or Tailwind. Any number of important factors could contribute to these digressions, including, but not limited to, general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, technological change, changes in government regulations, unexpected judicial or regulatory proceedings, and catastrophic events. We stress that the above-mentioned list of important factors is not exhaustive. We encourage you to consider these and other factors carefully before making any investment decision and we urge you to avoid placing undue reliance on forward-looking statements. Further, you should be aware that Allen-Vanguard and Tailwind disclaim any obligation to publicly update or revise any such forward-looking statements whether as a result of new information, future events or otherwise, prior to the release of the next Management Discussion and Analysis to be released by each of Allen-Vanguard and Tailwind or except as required by law .
Any statements contained in this press release that do not describe historical facts may constitute forward-looking statements as that term is defined by the United States Private Securities Litigation Reform Act of 1995. Any such forward-looking statements contained herein are based on current expectations, but are subject to a number of risks and uncertainties that may cause actual results to differ materially from expectations such as material adverse events affecting Allen-Vanguard and/or Tailwind, the ability of Tailwind to satisfy the conditions to completion of the business combination and those other risks and uncertainties detailed in Tailwind's filings with the Securities and Exchange Commission.
About Allen-Vanguard
Allen-Vanguard Corporation supports the mission of military and homeland security forces around the world with leading proprietary solutions for protection and counter-measures against hazardous devices of all kinds, whether chemical, biological, radiological or explosive (CBRNE), including improvised explosive devices (IEDs) and remotely controlled IEDs (RCIEDs). Allen-Vanguard equipment is in service in more than 120 countries. Products include Electronic Counter-Measures ("ECM") equipment for jamming remote detonation of terrorist devices, specialty security equipment for Explosive Ordnance Disposal ("EOD"), remote intervention robots for hazardous applications, and personal protective wear for use in dealing with explosive and bio-chemical agents. Allen-Vanguard is the developer and/or sole, worldwide licensee of proprietary technologies such as the Med-Eng bomb suit, the Defender(TM) and Vanguard(TM) Mk2 bomb disposal robots, and the Universal Containment System and CASCAD Foam system for blast mitigation and decontamination of bio-chemical warfare agents. Professional services encompass counter-IED intelligence, training and advisory services, including the Triton(TM) Report on terrorist incidents around the world. The Company operates globally through its wholly-owned subsidiaries under the names "Allen-Vanguard", "Med-Eng" and "Hazard Management Solutions". Head office operations are located in Ottawa, Ontario, Canada, with manufacturing operations in Stoney Creek and Pembroke, Ontario; Ogdensburg, New York; Tewkesbury, U.K.; and Cork, Ireland; The Company has professional services operations in Shrivenham, UK, Canada and in the U.S. in Arlington, Virginia, plus sales offices in Canada, the U.S., the U.K. and Asia. Allen-Vanguard's shares are listed on The Toronto Stock Exchange (TSX) under the symbol "VRS".
To learn more about Allen-Vanguard Corporation (TSX: VRS), visit www.allenvanguard.com.
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