Item 4.02(a) Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.
In
Because the Warrants included a cash settlement feature that could arise in certain events, the Company is now of the view that the Warrants should have been accounted for as a liability, recorded at fair value at the date of issuance, and marked to market at the end of each reporting period. All changes in fair value should have been recorded in earnings.
To reflect this change in accounting for the Warrants, the Company will be
filing amended financial information and restatements of the periods beginning
with the first quarter of 2018 through the third quarter of 2019 (the "Restated
Periods") in the Company's annual report on Form 10-K for the year ended
The reclassification of the Warrants will have no impact on the Company's liquidity, cash flows, revenues or costs of operating the Company's business. The final dollar amount of the reclassification and associated non-cash income statement effects has not yet been determined.
After consultation with the Company's management and following extensive
discussions with
As indicated elsewhere herein, the audit committee and management have discussed
the matters disclosed in this Current Report on Form 8-K with BDO, the Company's
current independent registered public accounting firm, and PS, the Company's
independent registered public accounting firm for the Affected Periods. The
Company is working to complete the restatement of the Restated Periods and
expects to file the 2019 10-K, including financial statements for the Restated
Periods, no later than
The Company's management is also in the process of assessing the effectiveness
of the Company's internal control over financial reporting and its disclosure
controls and procedures. Although the assessment is not yet complete, the
Company expects to report a material weakness in the Company's internal control
over financial reporting, and to therefore conclude that, due to the
reclassification of Warrants, the Company's internal control over financial
reporting as of
Caution Regarding Forward-Looking Statements
Certain statements included in this Current Report on Form 8-K, which are not
historical facts, are forward-looking statements, including statements about the
approximate effect of the restatements on the Company's previously issued
financial statements and the filing of amended periodic reports to reflect the
restatement. Such forward-looking statements are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995 and
speak only as of the date of this Current Report. These forward-looking
statements represent the Company's expectations or beliefs and involve certain
risks and uncertainties, including those described in its public filings with
the
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