Filing Overview
Moving iMage Technologies, Inc. filed a Form 8-K under Item 4.01 on April 12, 2022, reporting a change in its independent registered public accounting firm. The filing was signed April 18, 2022.
Business Context and Reporting Period
The company is a Delaware corporation headquartered in Fountain Valley, California, and its common stock trades on the NYSE American under the symbol MITQ. The filing discusses the fiscal years ended June 30, 2021 and 2020 and the subsequent interim period through April 12, 2022.
Accounting Firm Change
- CohnReznick LLP resigned as the company’s independent registered public accounting firm, effective immediately on April 12, 2022.
- CohnReznick’s audit reports on the company’s fiscal 2021 and 2020 financial statements did not contain an adverse opinion, disclaimer, or qualification relating to uncertainty, audit scope, or accounting principles.
- The company reported no disagreements with CohnReznick regarding accounting principles, financial statement disclosure, or audit scope or procedures during the relevant periods.
- The Audit Committee is taking action to engage a successor independent registered public accounting firm.
Financial Metrics and Material Changes
The filing does not provide revenue, profit, cash flow, margins, debt, liquidity, or other operating and financial metrics.
The material change disclosed is the resignation of CohnReznick and the planned appointment of a successor auditor.
Internal Control Matters and Restatement
- CohnReznick reported material weaknesses in internal control over financial reporting.
- The weaknesses related to the design and operation of the closing and financial reporting process, the absence of formal or documented accounting policies and procedures, inadequate segregation of duties, and the absence of formal journal-entry review processes.
- The company attributed the weaknesses in part to its historically limited accounting personnel and resources before its initial public offering in July 2021.
- On February 28, 2022, the company disclosed that its previously issued unaudited condensed consolidated financial statements for the quarters ended September 30, 2021 and 2020 required restatement because of a material misstatement identified by its independent auditor.
- CohnReznick provided an April 18, 2022 letter to the SEC agreeing with the company’s disclosures regarding the auditor change and reportable event.
Outlook, Risks, and Unusual Items
No financial guidance or operating outlook is provided. Key risks include the unresolved material weaknesses in internal control, the need to complete the restatement of comparative interim financial statements, and the potential effects of transitioning to a successor auditor.
Important Facts to Verify
- Whether and when the Audit Committee engaged a successor independent registered public accounting firm.
- The status and final impact of the restatement for the quarters ended September 30, 2021 and 2020.
- Whether the material weaknesses in internal control have been remediated and independently evaluated.
- Whether subsequent filings disclose additional accounting issues, audit delays, or changes in reported financial results.