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 AND EXCHANGE ACT OF 1934
December 26, 2006
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(Date of of earliest event reported)
GREATER ATLANTIC FINANCIAL CORP.
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(Exact name of registrant as specified in its charter)
DELAWARE
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(State or other jurisdiction of incorporation)
0-26467 54-1873112
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(Commission File Number) (IRS Employer
Identification Number)
10700 Parkridge Boulevard, Suite P50 Reston, Virginia 20191
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(Address of Principal Executive Offices) (Zip Code)
(703) 391-1300
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(Registrant's telephone number, including area code)
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:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
ITEM 4.02 NON-RELIANCE ON PREVIOUSLY ISSUED FINANCIAL STATEMENTS OR A RELATED
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AUDIT REPORT OF COMPLETED INTERIM REVIEW
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(a) On December 26, 2006, the Audit Committee of Greater Atlantic
Financial Corp. (the "Company") concluded that, as a result of losses
aggregating approximately $1.4 million discovered in the Company's previously
reported investigation into an unreconciled inter-company account at Greater
Atlantic Mortgage Corporation, the Company's consolidated financial statements
for the quarterly periods ended December 31, 2005 and March 31, 2006 and for the
years ended September 30, 2004 and 2005 should be restated and should no longer
be relied upon.
The Company discovered the unreconciled inter-company account during
its review of the closing entries to the accounts of Greater Atlantic Mortgage
Corporation in conjunction with preparing the Company's consolidated financial
statements for the quarterly period ended June 30, 2006. The investigation
resulted in a determination that the warehouse account maintained by Greater
Atlantic Mortgage Corporation with Greater Atlantic Bank had not been properly
reconciled. Greater Atlantic Bank terminated the operations of Greater Atlantic
Mortgage Corporation, its wholly-owned mortgage banking subsidiary, effective
March 31, 2006.
In reaching the conclusion to restate the financial statements
identified above, the Audit Committee noted that, while the investigation
disclosed that the losses were sustained in Greater Atlantic Mortgage
Corporation's warehouse account over a period of five years, the loss in any
given year did not reach a material amount such as to require restatement.
However, the Audit Committee determined to restate the above-referenced
financial statements because of the cumulative amount of the loss. The Audit
Committee concluded that previously issued statements for the periods identified
above should not be relied upon.
The Audit Committee has discussed the matters disclosed in this
filing with BDO Seidman, LLP, the Company's independent registered public
accounting firm, in reaching the conclusion to restate the financial statements
for the above-referenced periods.
To facilitate the financial statement restatements, the Company will
amend its previously filed Form 10Q's for the periods ended December 31, 2005
and March 31, 2006, and reflect the as-adjusted amounts for the years ended
September 30, 2004 and 2005 in the Company's Form 10K for the year ended
September 30, 2006, expected to be filed in January, 2007.
(b) and (c) Not Applicable.
ITEM 8.01 OTHER EVENTS
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On December 29, 2006, the Company issued a news release announcing
that the Nasdaq Listing Qualifications Panel had determined to grant the request
of the Company for continued listing on The Nasdaq Stock Market, subject to the
condition that on or before January 15, 2007, the Company file its Form 10-Q for
the quarter ended June 30, 2006, and any required restatements.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
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Exhibit 99.1 Greater Atlantic Financial Corp. Press Release,
dated December 29, 2006.
SIGNATURE
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.
GREATER ATLANTIC FINANCIAL CORP.
Date: December 29, 2006 By: /s/ Carroll E. Amos
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Carroll E. Amos, President and Chief
Executive Officer