Item 4.01. Changes in Registrant's Certifying Accountant.
BDO was previously the independent registered public accounting firm for the
Company since September 24, 2021. On July 21, 2022, the Company dismissed BDO.
The dismissal of BDO was approved by the Audit Committee of the board of
directors of the Company (the "Audit Committee"). BDO did not issue an audit
report on the Company's financial statements for the fiscal year ended December
31, 2021. The Company's new auditor Grassi & Co., CPAs, P.C. ("Grassi") is
currently conducting an audit of the financial statements and internal control
over financial reporting as of and for the year ended December 31, 2021.
The Company was advised by BDO of certain events reportable in accordance with
Item 304(a)(1)(v) of Regulation S-K in BDO's letter dated August 4, 2022 ("BDO's
Letter"). A copy of BDO's Letter is filed as Exhibit 16.1 hereto.
Numbered paragraph "1." of BDO's Letter states that at the time of its dismissal
BDO had not yet finalized its assessment of the effectiveness of internal
controls over financial reporting as of December 31, 2021. BDO's Letter goes on
to list certain material weaknesses that BDO had communicated to the Audit
Committee prior to BDO's dismissal. The Company is working diligently with
Grassi to complete the Company's Form 10-K for the fiscal year ended December
31, 2021, including completing Grassi's assessment of the Company's
effectiveness of internal controls over financial reporting. Additionally, the
Company has been and continues to devote resources to enhancing its internal
controls over financial reporting. The Company does not believe that any of the
items listed in BDO's Letter will prevent Grassi, from completing the Company's
Numbered paragraph "2." of BDO's Letter also states that at the time of BDO's
dismissal it had not yet completed its evaluation of the materiality of certain
audit adjustments pursuant to Staff Accounting Bulletin ("SAB") No. 99 and that
had a complete evaluation been performed, a conclusion may have been reached
that previously filed financial statements may have contained a material error
and could no longer be relied upon. The Company is working diligently with
Grassi and is not aware of any material error related to previously filed
financial statements or any reason that previously filed financial statements
can no longer be relied upon.
Numbered paragraph "3." of BDO's Letter acknowledges that at the time of BDO's
dismissal, BDO had not yet finalized its procedures related to the Company's
investigation under Section 10A of the Securities Exchange Act relating to the
Company's China operations. Further, the same paragraph states that at the time
of BDO's termination, BDO had outstanding requests with the third-party law firm
engaged by the Audit Committee to lead the investigation, had not completed its
evaluation of the information that had been provided to BDO, and had not
determined whether the investigation and the information provided therefrom was
satisfactory to BDO. The Audit Committee engaged an Am Law 100 law firm and a
nationally recognized forensics accounting firm to conduct a complete and
thorough investigation and such investigation was completed by such parties to
the Audit Committee's satisfaction prior to the dismissal of BDO. The
investigation concluded with no findings of improper or fraudulent actions or
practices by the Company or any of its officers or employees with respect to any
matters, including those raised by BDO.
The Company does not believe that any of the items listed in BDO's Letter with
respect to material weaknesses will prevent Grassi from completing the Company's
2021. The Company currently anticipates filing its Form 10-K for the fiscal year
ended December 31, 2021 and its Form 10-Q for each of the fiscal quarters ended
March 31, 2022 and June 30, 2022 by September 12, 2022.
The Company provided BDO with a copy of the disclosures in the Original Filing.
The Company requested that BDO furnish the Company with a letter addressed to
the Commission stating whether or not BDO agrees with the Company's statements
included in this Item 4.01 as set forth in the Original Filing. The Company
further requested that BDO furnish the Company with an updated letter addressed
to the Commission stating whether or not BDO agrees with the Company's
statements included in this Item 4.01 as set forth in this Amendment No. 1.
(b) Newly Engaged Independent Registered Public Accounting Firm
On July 27, 2022, the Company engaged Grassi as the Company's new independent
registered public accounting firm, effective immediately, to perform independent
audit services for the fiscal year ended December 31, 2021. The decision to
appoint Grassi was approved by the Audit Committee. During the fiscal years
ended December 31, 2021 and 2020 and through July 27, 2022, neither the Company,
nor anyone on its behalf, consulted Grassi regarding either (i) the application
of accounting principles to a specified transaction, either completed or
proposed, or the type of audit opinion that might be rendered with respect to
the consolidated financial statements of the Company, and no written report or
oral advice was provided to the Company by Grassi that was an important factor
considered by the Company in reaching a decision as to any accounting, auditing
or financial reporting issue; or (ii) any matter that was the subject of a
"disagreement" (as defined in Item 304(a)(1)(iv) of Regulation S-K and the
related instructions) or a "reportable event" (as that term is defined in Item
304(a)(1)(v) of Regulation S-K).
Item 9.01 Financial Statements and Exhibits.
16.1 Letter of BDO, dated August 4, 2022.
104 Cover page Interactive Data File (embedded within the Inline XBRL document).
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