Business Context and Reporting Period
This Form 8-K is filed by VRINGO, Inc. (the legal acquirer) on September 7, 2012. The report addresses the completion of a reverse acquisition merger with Innovate/Protect, Inc. on July 19, 2012. For accounting purposes, Innovate/Protect is treated as the accounting acquirer, meaning its historical financial statements will be reflected as the company's historical statements for periods ending after June 30, 2012.
Key Financial Metrics
This filing is a current report regarding a change in certifying accountants and does not contain specific financial performance data such as revenue, profit, cash flow, margins, debt, or liquidity figures for the reporting period. The filing references prior filings (Form 10-Q and a previous Form 8-K) that contained the unaudited consolidated financial statements for the legal and accounting acquirers on a stand-alone basis.
Material Changes
- Change in Certifying Accountant: The Audit Committee terminated its relationship with Grant Thornton LLP, the independent registered public accounting firm for Innovate/Protect (the accounting acquirer), effective September 7, 2012.
- Continuation of Engagement: The company reaffirmed its engagement of Somech Chaikin (a member firm of KPMG International) as its independent registered public accounting firm.
- Audit History: Grant Thornton audited Innovate/Protect's financial statements for the period from inception (June 8, 2011) through December 31, 2011. The audit report included an explanatory paragraph regarding substantial doubt about Innovate/Protect's ability to continue as a going concern but contained no adverse, qualified, or modified opinions regarding accounting principles or scope.
Guidance, Outlook, and Risks
The filing does not provide forward-looking guidance, management commentary on future operations, or specific risk factors beyond the historical context of the merger. The primary disclosure relates to the procedural change in audit firms following the reverse acquisition structure. There were no disagreements between the company and Grant Thornton regarding accounting principles, financial statement disclosure, or auditing scope prior to the dismissal.
Investor Verification Checklist
- Verify the details of the reverse acquisition accounting treatment and how it impacts the comparability of historical financial data.
- Review the unaudited consolidated financial statements filed in the Form 10-Q (August 14, 2012) and the prior Form 8-K (August 14, 2012) for the pre-merger financial positions of both entities.
- Examine the letter from Grant Thornton LLP (Exhibit 16.1) to confirm their stance on the dismissal and the absence of disagreements.
- Assess the implications of the "substantial doubt regarding going concern" note previously issued by Grant Thornton for Innovate/Protect.