1. Description of Business and Basis of Presentation

9 Months Ended

Sep. 30, 2012

Business Description and Basis of Presentation [Text Block]

1.Description of Business and Basis of Presentation

Sutron Corporation (the “Company”) was incorporated on December 30, 1975, under the General Laws of the Commonwealth of Virginia.  The Company operates from its headquarters located in Sterling, Virginia.  The Company has several branch offices located throughout the United States, a branch office in India and a wholly owned subsidiary in India. The Company is a leading provider of real-time data collection and control products, systems software and professional services in the hydrological, meteorological, oceanic and aviation monitoring markets.  The Company’s principal products include data loggers, satellite transmitters/loggers, water level and meteorological sensors, tides systems and system and application software.  Customers consist of a diversified base of Federal, state, local and foreign government agencies, commercial entities, universities, engineering firms and hydropower companies.

The financial statements included herein have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and disclosures included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted pursuant to such rules and regulations. These consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2011. The consolidated balance sheet as of December 31, 2011 was derived from the audited financial statements for the year then ended.

In the opinion of the Company, all adjustments necessary to present fairly the financial position of the Company and the results of its operations and its cash flows have been included in the accompanying financial statements. The results of operations for interim periods are not necessarily indicative of the expected results for the full year.

We recommend that you read the unaudited consolidated financial statements included herein in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2011, filed with the SEC on March 28, 2012.

Restatement of Financial Statements

Our consolidated statement of operations and comprehensive income for the quarter ended September 30, 2012 have been restated to correct for an error in the computation of contract revenue. The error was in the calculation of estimated costs to complete the contract resulting in estimated costs at completion being understated and revenue being overstated.  The consolidated statement of operations and comprehensive income for the quarter ended September 30, 2012 included in this Form 10-Q/A have been restated to decrease revenue in the amount of  $236,943 and decrease net income by $134,943. This adjustment affects previously reported total retained earnings and operating cash flows and the consolidated balance sheets and consolidated statements of cash flows have been restated accordingly.The following table summarizes the effects of our restatement resulting from the correction of this error.

	Three Months Ended September 30, 2012
	Previously
	Reported		Adjustment			Restated
CONSOLIDATED STATEMENTS OF OPERATIONS:
Net sales and revenues	$	7,278,999	$	(236,943	)	$	7,042,056
Operating income		922,167		(236,943	)		685,224
Income tax expense		314,000		(102,000	)		212,000
Net income		625,395		(134,943	)		490,452
Basic income per share	$	.13		.03		$	.10
Diluted income per share	$	.12		.02		$	.10
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME:
Net income		625,395		(134,943	)		490,452
Comprehensive income		631,264		(134,943	)		496,321

	Nine Months Ended September 30, 2012
	Previously
	Reported		Adjustment			Restated
CONSOLIDATED BALANCE SHEETS:
Accounts receivable, net	$	7,004,346	$	(236,943	)	$	6,767,403
Income taxes receivable		310,816		77,000			387,816
Other accrued expenses		1,641,508		(25,000	)		1,616,508
Retained earnings		17,031,507		(134,943	)		16,896,564
CONSOLIDATED STATEMENTS OF OPERATIONS:
Net sales and revenues		17,820,348		(236,943	)		17,583,405
Operating income		1,591,999		(236,943	)		1,355,056
Income tax expense		535,000		(102,000	)		433,000
Net income		1,100,956		(134,943	)		966,013
Basic income per share	$	.23		.03		$	.20
Diluted income per share	$	.22		.03		$	.19
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME:
Net income		1,100,956		(134,943	)		966,013
Comprehensive income		1,095,044		(134,943	)		960,101
CONSOLIDATED STATEMENTS OF CASH FLOWS:
Net income		1,100,956		(134,943	)		966,013