Business Context and Reporting Period
This Form 8-K is filed by Amedica Corporation (not Sintx Technologies, Inc.) on September 20, 2017. The report discloses a change in the company's independent registered public accounting firm.
Key Financial Metrics
The filing does not provide specific revenue, profit, cash flow, margin, debt, or liquidity figures. However, it notes that the prior auditor's report for the fiscal year ended December 31, 2016, included a "substantial doubt" qualification regarding the company's ability to continue as a going concern.
Material Changes
- Accountant Dismissal: BDO USA, LLP was dismissed as the independent registered public accounting firm on September 20, 2017.
- New Auditor Engagement: Tanner LLC was engaged as the new independent registered public accounting firm for the fiscal year ending December 31, 2017.
- Internal Control Weaknesses: BDO identified material weaknesses in internal controls over financial reporting for the 2016 fiscal year, including:
- Control Environment: Lack of effective structure, risk assessment, and qualified personnel (specifically following the dismissal of the CFO).
- Control Activities: Ineffective management review controls and lack of procedures to review complex debt, equity, and impairment transactions.
- Monitoring Activities: Failure to effectively monitor changes in internal controls related to personnel and organizational structure.
Guidance, Risks, and Contingencies
The filing highlights significant risks related to the reliability of financial reporting due to the identified material weaknesses. There were no disagreements between the company and BDO regarding accounting principles or audit scope. The Audit Committee has authorized BDO to respond to inquiries from the new auditor, Tanner LLC, regarding these weaknesses.
Investor Verification Checklist
- Verify the company's current ability to continue as a going concern given the prior auditor's qualification.
- Review the remediation plan for the material weaknesses in internal controls over financial reporting.
- Confirm the status of the CFO position and the qualifications of current financial personnel.
- Examine the letter from BDO (Exhibit 16.1) for any additional context on the dismissal or disagreements.