Business Context and Reporting Period
Katapult Holdings, Inc. filed this Form 8-K on March 20, 2023, under Item 4.01 to report a change in its independent registered public accounting firm. The filing concerns the fiscal year ending December 31, 2023, and prior fiscal years ended December 31, 2022 and 2021.
Key Financial Information
This filing does not provide revenue, earnings, cash flow, margins, debt, liquidity, or other operating financial metrics.
Material Changes
- Effective March 15, 2023, the Audit Committee dismissed Deloitte & Touche LLP.
- Effective immediately on March 15, 2023, the Audit Committee engaged Grant Thornton LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2023.
- Deloitte’s audit reports for the years ended December 31, 2022 and 2021 contained no adverse opinion, disclaimer, or qualification relating to uncertainty, audit scope, or accounting principles.
- The company reported no accounting disagreements with Deloitte during the two fiscal years and subsequent interim period through March 15, 2023.
Management Commentary, Risks, and Unusual Items
- The company disclosed continuing material weaknesses in internal control over financial reporting, previously reported in its 2022 Form 10-K.
- The weaknesses relate to insufficient personnel with appropriate U.S. GAAP expertise and inadequate controls over journal-entry review, reconciliation to supporting documentation, and compliance with U.S. GAAP before manual posting.
- Management is implementing remediation efforts. The weaknesses will not be considered remediated until the controls are fully implemented, operate for a sufficient period, and are determined through testing to be effective.
- The filing states that neither the company nor anyone acting on its behalf consulted Grant Thornton about specified accounting transactions, audit opinions, disagreements, or reportable events during the relevant periods.
- Deloitte provided a letter dated March 20, 2023, filed as Exhibit 16.1, addressing the company’s disclosures.
Important Facts to Verify
- Confirm the scope and status of the material weakness remediation in subsequent Form 10-K or Form 10-Q filings.
- Review Deloitte’s Exhibit 16.1 letter for any additional comments regarding the auditor change.
- Verify Grant Thornton’s continued engagement and any subsequent changes in auditor or audit conclusions.
- Assess whether future filings identify control deficiencies, restatements, or effects on reported financial information.