Business Context and Reporting Period
Company: SANUWAVE Health, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: July 18, 2011
Reporting Period: The filing reports on events occurring on July 18, 2011, regarding a change in the company's certifying accountant.
Key Financial Metrics
This filing does not contain specific financial statements, revenue, profit, cash flow, or debt figures for the current period. However, it references historical financial conditions:
- Going Concern Qualification: The previous auditor, HLB Gross Collins, P.C., issued reports for fiscal years ended December 31, 2010, and December 31, 2009, containing a "going concern" qualification.
- Reason for Qualification: Substantial doubt regarding the Company's ability to continue as a going concern due to substantial operating losses, working capital deficiencies, and dependence on future capital contributions or financing.
Material Changes
The primary material change reported is the replacement of the independent registered public accounting firm:
- Dismissal: HLB Gross Collins, P.C. was dismissed as the principal independent registered public accounting firm on July 18, 2011.
- Engagement: BDO USA, LLP was engaged on July 18, 2011, to audit financial statements for the fiscal year ending December 31, 2011.
- Disagreements: The Company reported no disagreements with the former auditor regarding accounting principles, practices, or auditing scope during the past two fiscal years or through the date of the report.
- Reportable Events: No "reportable events" were reported by the former auditor during the same period.
Guidance, Outlook, and Risks
Management Commentary: The decision to change auditors was approved by the Board of Directors. The former auditor was provided a copy of this report prior to filing and submitted a response letter (Exhibit 16.1).
Risks and Contingencies: The filing reiterates the historical risk factors that led to the going concern qualification: substantial operating losses, working capital deficiencies, and a reliance on future financing to fund ongoing operations. No new guidance or outlook was provided in this specific filing.
Investor Verification Checklist
- Verify the content of the letter from HLB Gross Collins, P.C. (Exhibit 16.1) to confirm they agree with the statements regarding the dismissal.
- Review the most recent 10-K or 10-Q filings to assess the current status of the "going concern" qualification and working capital deficiencies.
- Confirm the Company's progress in securing the future capital contributions or financing mentioned as necessary for ongoing operations.
- Monitor future filings for the engagement letter or initial audit findings from the new auditor, BDO USA, LLP.