FORT LAUDERDALE, FL, May 19, 2022 (GLOBE NEWSWIRE) — LMP Automotive Holdings, Inc. (LMPX) (“LMP” or the “Company”), a United States-based e-commerce and automotive retailer, announced today intends to restate previously issued financial statements as of and for each of the first three quarters of 2021 to correct certain accounting items.
On May 16, 2022, management of LMP Automotive Holdings, Inc. and the Audit Committee of the Company’s Board of Directors concluded that the Company’s previously released condensed consolidated financial statements as of and for the three months ended March 31 2021, June 30, 2021, and September 30, 2021 should be restated and should no longer be relied upon primarily due to the following errors: (i) incorrect identification and elimination of intercompany transactions, (ii) incorrect estimates of reserves chargebacks for finance and insurance products, and (iii) certain financial statement misclassifications affecting various financial statement line items of the balance sheet and income statement during the relevant periods.
The aggregate effects are currently estimated as follows:
- An approximate decrease in total revenue and total cost of sales as follows:
- Gross profit and net profit for the Relevant Periods are not expected to be materially impacted.
- Certain balance sheet headings for certain of the Relevant Periods, including accounts payable, other non-current liabilities and other current assets, are expected to be materially affected.
- Total assets and total liabilities for the Relevant Periods should not be materially impacted.
The expected changes do not affect compliance with financial covenants contained in the Company’s outstanding debt instruments or compliance with any other agreement of the Company or its subsidiaries.
As such, the Company will restate its financial statements for the relevant periods in its Annual Report on Form 10-K for the year ended December 31, 2021 (the “2021 10-K”). The Company’s management has concluded that, in light of the misstatements described above, material weaknesses exist in the Company’s internal control over financial reporting and that the Company’s disclosure controls and procedures Company information were not effective. The corrective actions planned by the Company regarding these material weaknesses will be described in more detail in the 10-K 2021.
Company management and the Audit Committee have discussed the matters disclosed in this current report on Form 8-K with its independent registered public accounting firm.
The Company will hold a conference call to discuss these financial results when it determines a final filing date.
ABOUT LMP AUTOMOTIVE HOLDINGS, INC.
LMP Automotive Holdings, Inc. (LMPX) is a growing company with a long-term plan to profitably consolidate and partner with automotive dealer groups in the United States. We offer a wide range of products and services covering the entire life cycle of a vehicle, including new and used vehicles, financing and insurance products, as well as repair and automotive maintenance.
Our proprietary e-commerce technology and strategy is designed to disrupt the industry by leveraging our experienced teams, growing selection of owned inventory and physical logistics network. We seek to provide customers with a seamless experience both online and in person. Our physical logistics network allows us to provide convenient free drop-off points for customers and provide services throughout the property lifecycle. We use digital technologies to reduce our customer acquisition costs, realize operational efficiencies and generate additional revenue. Our unique growth model generates significant cash flow, which funds our innovation and expansion into new geographic markets, as well as the strategic building of dealer networks, creating personal transportation solutions that consumers seek.
LMP Automotive Holdings, Inc.
500 East Broward Boulevard, Suite 1900
Fort Lauderdale, Florida 33394
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