.UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of
The
Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported) March 31, 2010
MEDIFAST,
INC.
(Exact
name of registrant as specified in its charter)
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Delaware
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000-23016
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13-3714405
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(State
or other jurisdiction
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(Commission
File Number)
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(IRS
Employer
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||
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of
incorporation or organization)
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Ident.
No.)
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11445 Cronhill Drive, Owing Mills,
Maryland
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21117.
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant's
telephone number, including area code (410)-581-8042
Check the appropriate box below if the
Form 8-K filing is intended to simultaneously satisfy the filing obligation of
the registrant under any of the following provisions:
o Written
communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
Section 4
– Matters Related to Accountants and Financial Statements
Item
4.0.2 Non Reliance on Previously Issued Financial Statements or a Related Audit
Report or Completed Interim Review
The Item
4.02 disclosure below relates to the restatement of errors in deferred tax
accounts as restated on Form 10-K and filed with the Securities and
Exchange Commission on March 31, 2010. The Registrant filed restated
financial statements within four business days of determining the need to
restate the consolidated financial statements for the years ended December 31,
2006, 2007, and 2008. As a result of the errors in the deferred tax
accounts, the Company determined that the Company’s consolidated financial
statements for the years ended December 31 2006, 2007 and 2008 should no longer
be relied upon. The Item 4.02 disclosure is as follows:
(a)During the audit of the
Company’s financial statement for the year-ended December 31, 2009, Management
of Medifast, Inc. was first advised by Friedman, LLP, the Company’s independent
registered public accounting firm, that a potential error existed in its
deferred tax account balances due to timing differences resulting between
depreciation expense for tax purposes versus financial statement
purposes.
Management
performed a detailed reconciliation of deferred tax accounts and the related
provision for income taxes for all tax years beginning in 2001 in order to
quantify the potential balance adjustments. The Company’s Management upon being
advised by its Independent Auditor of the SFAS No. 109 calculation issue, as
part of its Sarbanes Oxley policy regarding internal controls regarding
financial reporting, immediately reported this issue to the Audit Committee
which promptly initiated and conducted its review. That review on March 16,
2010 concluded i) that Bagell, Josephs, Levine & Company, LLP (“BJL”) had
merged with Friedman, LLP effective January 1, 2010. ii) that neither Management
nor the Audit Committee had been previously notified of
this audit concern by its auditors BJL either during those audits
nor while preparing the quarterly reports and tax returns with BJL Tax
Accountant Services for the pertinent years iii.) that Company management is
responsible for the internal controls over the preparation and review process
for the calculation of the income tax provision which was inadequate, and led to
errors in the computation of deferred tax assets, deferred tax liabilities, and
related income tax provision.
On March 29, 2010 management and the
Audit Committee reviewed management’s findings as well as the finding of
Friedman, LLP and the Audit Committee concluded that restating the consolidated
financial statements for the years ended December 31, 2006, 2007, and 2008 is
required. The Company announces that its consolidated financial
statements for the years ended December 31, 2006, 2007 and 2008 issued prior to
the filing of its Annual Report on Form 10-K on March 31, 2010, should not be
relied upon henceforward.
The
Company is restating for errors identified in its deferred tax accounts
pertaining to (i) differences between the income tax basis and the financial
reporting basis of long-lived assets that were not reconciled to the deferred
tax balances (ii) to properly apply a net operating loss to our deferred tax and
provision for income taxes for the years ended December 31, 2001, 2002, 2003,
2004, and 2005. The effects of these restatements are included
in the Annual Report on Form 10-K for the fiscal year ended December 31, 2009
filed on March 31, 2010 with the Securities and Exchange
Commission. The Annual Report on Form 10-K filed on March 31, 2010
also includes management’s conclusion that a material weakness existed in our
internal control over financial reporting as of December 31, 2009. The
preparation and review process for the calculation of the tax provision was
inadequate, which led to errors in the computation of deferred tax assets,
deferred tax liabilities, and related income tax provision.
The
correction of the errors noted in (i) above reduced 2008, 2007, and 2006 net
income by $601,000 (.04 per diluted share), $411,000 ($.03 per diluted share),
and $583,000 (.04 per diluted share), respectively. The corrections
noted in number (ii) above increased beginning of 2006 accumulated deficit by
$1,358,000.
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SIGNATURES
Pursuant to the requirements of the
Securities Exchange Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned hereunto duly
authorized.
| MEDIFAST, INC. | |||
| Dated: September 3, 2010 | |||
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/s/ Brendan N. Connors | |
| Brendan N. Connors | |||
| Chief Financial Officer | |||
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