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ScanTech AI Systems Inc. (NASDAQ:STAI) announced Monday that its unaudited interim consolidated financial statements for the quarters ended March 31, 2025, and June 30, 2025, should no longer be relied upon and will be restated. The company disclosed this decision following a review by management and the Audit Committee of its Board of Directors, according to a statement filed with the Securities and Exchange Commission. This announcement comes as STAI’s stock has plummeted nearly 30% in the past week and 71% over the last six months, according to InvestingPro data.
The restatement is due to an error related to the accounting for compensation expense concerning the issuance of 4,314,800 additional shares of common stock to certain insiders. These shares, referred to as "Subject Shares," were issued as part of an agreement following the company’s business combination, and compensation for holding the shares should have been recognized over a 90-day period after the transaction’s closing. Instead, the full compensation expense was recorded in the quarter ended June 30, 2025.
As a result, the company will amend its Quarterly Reports on Form 10-Q for both the first and second quarters of 2025 to properly reflect the timing of the compensation expense. The restatement process may include additional immaterial adjustments as part of the revised filings.
ScanTech AI Systems stated that the restatement is not anticipated to have a material impact on its future business or operations, though its internal review is ongoing and further changes or control findings may be identified. With a current market capitalization of just $32.47 million and a stock price of $0.46, the company is already facing significant financial challenges, including a net loss of $23.89 million over the last twelve months.
Management also determined that a material weakness existed in the company’s internal control over financial reporting related to these matters. Details of the company’s remediation plan will be included in the amended filings.
The company’s management and Audit Committee have discussed the restatement with its independent accountants, Berkowitz Pollack Brant Advisors + CPAs.
This information is based on a statement made in a filing with the Securities and Exchange Commission.
In other recent news, ScanTech AI Systems Inc. has secured a $50 million equity line of credit from ARC Group International Ltd., along with an initial $500,000 PIPE equity investment, contingent upon SEC registration of shares. The company has also received default notices from Southern Point Capital Corporation related to a Securities Purchase Agreement, which ScanTech may dispute. Additionally, ScanTech announced the appointment of Berkowitz Pollack Brant Advisors + CPAs as its new independent registered public accounting firm for the fiscal year ending December 31, 2025, following the resignation of its previous auditor, UHY LLP. UHY LLP resigned after ScanTech filed its Quarterly Report on Form 10-Q for the period ended June 30, 2025, before UHY completed its review. ScanTech has amended its corporate bylaws and is working toward Nasdaq re-compliance. The company is reviewing the default notice from Southern Point Capital Corporation, which claims a violation of covenants due to a separate purchase agreement with ARC Group. These developments reflect ongoing changes in ScanTech’s financial and operational strategies.
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