Business Context and Reporting Period
This Form 8-K is a current report filed by Orient Paper, Inc. (Note: Metadata lists "IT TECH PACKAGING, INC." but the filing text identifies the registrant as "Orient Paper, Inc.") on March 23, 2018. The report details a change in the company's principal independent accountants.
Key Financial Metrics
The filing does not provide specific revenue, profit, cash flow, or margin figures for the current period. However, it references historical financial conditions:
- Going Concern: The previous auditor, BDO China Shu Lun Pan Certified Public Accountants LLP ("BDO"), issued reports for fiscal years 2015 and 2016 containing a modification raising substantial doubt about the Company's ability to continue as a going concern.
- Cause: This modification was based on the Company's working capital deficit.
- Debt/Liquidity: No specific debt or liquidity values are provided in this text.
Material Changes
The primary material change reported is the dismissal of the principal independent accountant and the engagement of a new firm:
- Dismissal: On March 23, 2018, the Company dismissed BDO effective immediately. The Audit Committee approved this decision.
- Engagement: On March 26, 2018, the Company engaged WWC, P.C. Certified Accountants ("WWC") as its new principal independent accountant, effective immediately.
- Disagreements: The Company states there were no disagreements with BDO regarding accounting principles, financial statement disclosure, or auditing scope/procedures during the two most recent fiscal years or the subsequent period up to dismissal.
Guidance, Outlook, and Risks
Management Commentary: The filing confirms that no reportable events under Item 304(a)(1)(v)(A)-(D) of Regulation S-K occurred during the relevant periods. The Company provided BDO with a copy of the disclosure prior to filing, and BDO submitted a response letter (Exhibit 16.1).
Risks and Contingencies: The historical "substantial doubt" regarding the Company's ability to continue as a going concern due to a working capital deficit is noted as a significant historical risk factor, though the filing does not explicitly state the current status of this deficit.
Investor Verification Checklist
- Verify the reason for the auditor change, specifically whether the "no disagreement" statement aligns with the historical going concern issues.
- Review the attached letter from BDO (Exhibit 16.1) for any clarifications or disagreements not detailed in the main text.
- Confirm the current status of the working capital deficit that previously triggered the going concern modification.
- Check subsequent filings to see if WWC, P.C. has issued a new audit opinion or if the going concern qualification persists.