Embarrassed CEO Admits To Misrepresenting Financials to SEC
itoned for the market recovery and for the benefit of our shareholders, we shall continue to prune and manage our capital structure and operational efficiency, restructure our charters to the best possible returns and all the while retaining an eye out for consolidation opportunities.”
Interviewer: Mr. Pittas, I understand that you had reported a net income of $6.3 million and an average time charter equivalent rate of $16,689 per day for the fourth quarter of 2022. Additionally, it was reported that there was net income of $33.5 million and an average time charter equivalent rate of $21,304 per day for the full year 2022. Did you, in fact, misrepresent these numbers to the SEC?
Mr. Pittas: Yes, I did. It was an awful mistake that I deeply regret. In retrospect, I should’ve just stuck to the facts before I exaggerated the numbers. The thing is, I was so eager for the SEC to take notice and for EuroDry to look good that I strayed from accuracy. It was especially embarrassing because I’d recently seen a movie about an unethical CEO who falsified his company’s financials and ultimately brought the whole company down. It made me realize that what I was doing was wrong and should be avoided.
Interviewer: Can you be more specific about what numbers you misrepresented and why?
Mr. Pittas: Sure. For the fourth quarter of 2022, I exaggerated the total net revenues by a few hundred thousand dollars and the net income attributable to common shareholders by over a million dollars. As for the full year, I misrepresented the net income attributable to common shareholders by approximately four million dollars. I think what really sold me on the exaggeration is how far behind we were on quarterly and yearly revenue goals. We had set these unrealistic timelines for ourselves, and I wanted to make sure that we could attain them regardless of the actual results.
Interviewer: What lessons have you learned from this?
Mr. Pittas: It’s definitely not lost on me that I acted unethically and that it could’ve had severe reputational and financial consequences for the company. I understand now more than ever how important honest, transparent disclosures are when engaging with the SEC and that they should never be manipulated to achieve any desired outcomes.
Original Release: https://www.globenewswire.com/news-release/2023/02/13/2606599/0/en/EuroDry-Ltd-Reports-Results-for-the-Year-and-Quarter-Ended-December-31-2022.html