Business Context and Reporting Period
This Form 8-K is a current report filed by Digital Ally, Inc. (not Kustom Entertainment, Inc.) on June 21, 2019, regarding events occurring on June 19, 2019. The company is a Nevada corporation trading on the NASDAQ Capital Market under the symbol DGLY.
Key Financial Metrics
This filing does not contain specific financial performance data such as revenue, profit, cash flow, margins, debt, or liquidity figures. The document focuses exclusively on a change in the company's independent registered public accounting firm.
Material Changes
- Change in Certifying Accountant: The Audit Committee approved the engagement of RBSM, LLP as the independent registered public accounting firm for the fiscal year ended December 31, 2019, effective immediately.
- Dismissal of Prior Accountant: RSM US LLP was dismissed as the independent registered public accounting firm.
- Audit History: RSM's audit reports for fiscal years 2017 and 2018 did not contain adverse opinions or disclaimers but included an emphasis of matter regarding the Company's ability to continue as a going concern.
- Disagreements: The Company reported no disagreements with RSM on accounting principles, practices, or auditing scope during the relevant periods.
Guidance, Outlook, and Risks
The filing does not provide forward-looking guidance, management commentary on future operations, or specific risk factors beyond the historical "going concern" emphasis noted in prior audit reports. The transition of auditors is presented as a standard governance action without indication of underlying financial distress in the current period.
Investor Verification Checklist
- Verify the reasons for the auditor change, specifically whether the "going concern" emphasis in prior years has been resolved.
- Review the letter from RSM US LLP (Exhibit 16.1) to confirm their agreement with the Company's statements regarding the dismissal.
- Check subsequent filings (e.g., 10-Q or 10-K) to see if RBSM, LLP has issued a new opinion on the Company's financial health.
- Confirm the Company's current liquidity status given the historical going concern warnings.