Business Context and Reporting Period
This Form 8-K Current Report from electroCore, Inc. (ECOR) is dated June 29, 2020. The filing addresses a change in the Company's independent registered public accounting firm. The Company is incorporated in Delaware and its common stock trades on the NASDAQ Global Select Stock Market.
Key Financial Metrics
The filing does not provide specific revenue, profit, cash flow, or debt figures for the current period. However, it references prior audit reports which noted that the Company has suffered recurring losses from operations and has a net capital deficiency. These factors raised substantial doubt about the Company's ability to continue as a going concern in the fiscal years ended December 31, 2019 and 2018.
Material Changes
- Dismissal of Previous Accountant: On June 29, 2020, the Audit Committee dismissed KPMG LLP as the independent registered public accounting firm. KPMG served the Company for fiscal years 2018 and 2019 and the interim period through June 29, 2020.
- Appointment of New Accountant: Effective June 29, 2020, Marcum LLP was appointed as the new independent registered public accounting firm for the fiscal year ending December 31, 2020.
- Reason for Change: The decision resulted from a competitive process and the Company's focus on reducing general and administrative expenses.
- Audit History: There were no disagreements with KPMG regarding accounting principles, practices, or audit scope. No "reportable events" occurred during the two most recent fiscal years or the interim period.
Guidance, Outlook, and Risks
The filing does not contain forward-looking guidance, revenue outlook, or management commentary on future operations. The primary risk disclosed is the historical "going concern" uncertainty noted in prior KPMG reports due to recurring losses and net capital deficiency. The Company stated that the consolidated financial statements did not include adjustments that might result from the outcome of this uncertainty.
Investor Verification Checklist
- Verify the specific reasons for the change in auditors beyond the stated goal of reducing general and administrative expenses.
- Review the attached Exhibit 16.1 (Letter from KPMG) to confirm the auditor's agreement with the Company's disclosures.
- Examine the most recent 10-K or 10-Q filings to assess the current status of the "going concern" warning and net capital deficiency.
- Confirm if the change in auditors impacts the timing or scope of the upcoming fiscal year 2020 audit.