Business Context and Reporting Period
This Form 8-K is a current report filed by Ocean Power Technologies, Inc. (OPTT) on September 18, 2020. The filing addresses a change in the company's independent registered public accounting firm.
Key Financial Metrics
The filing does not provide current revenue, profit, cash flow, or margin data for the period ending September 18, 2020. However, it references historical financial conditions noted in prior audit reports:
- Going Concern: Audit reports for fiscal years ended April 30, 2020, and April 30, 2019, included substantial doubt about the company's ability to continue as a going concern due to recurring losses and an accumulated deficit.
- Cash Position (Historical): As of April 30, 2019, the company reported cash and cash equivalents of $16.7 million.
- Accounting Changes: The company adopted ASU No. 2016-02 (Leases) effective May 1, 2019, and ASU 2014-09 (Revenue from Contracts with Customers) effective May 1, 2018.
Material Changes
The primary material change reported is the dismissal of KPMG LLP as the independent registered public accounting firm, effective September 16, 2020. The Audit Committee stated the decision was made to reduce ongoing costs related to annual auditor services. No disagreements or reportable events occurred between the company and KPMG during the two most recent fiscal years or the subsequent interim period.
Guidance, Outlook, and Risks
Management Commentary: The company appointed EisnerAmper LLP as the new independent registered public accounting firm, effective September 18, 2020, for the fiscal year ending April 30, 2021. No consultations regarding accounting principles or audit opinions occurred with EisnerAmper prior to this appointment.
Risks and Contingencies: The filing reiterates the historical "substantial doubt" regarding the company's ability to continue as a going concern, citing recurring operational losses and an accumulated deficit. The filing does not provide new forward-looking guidance or specific risk updates beyond the context of the auditor change.
Investor Verification Checklist
- Verify the rationale for dismissing KPMG LLP to ensure no undisclosed accounting disputes exist.
- Review the company's most recent 10-K or 10-Q to assess current liquidity and the status of the "going concern" warning.
- Confirm the transition timeline and scope of work for the new auditor, EisnerAmper LLP.
- Examine the letter from KPMG LLP (Exhibit 16.1) to confirm their agreement with the company's statements regarding the dismissal.