Virgin Galactic Holdings, Inc. - Form 8-K Summary
Business Context and Reporting Period
This Current Report on Form 8-K was filed by Virgin Galactic Holdings, Inc. on November 11, 2019. The Company is an emerging growth company incorporated in Delaware, with principal executive offices in Las Cruces, New Mexico. Its securities trade on the New York Stock Exchange under the symbols SPCE (common stock), SPCE.U (units), and SPCE.WS (warrants).
Key Financial Metrics
The filing text does not provide specific values for revenue, profit, cash flow, margins, debt, or liquidity. This report focuses exclusively on corporate governance changes regarding the independent registered public accounting firm.
Material Changes
- Dismissal of Auditor: On November 11, 2019, the Company dismissed Marcum LLP as its independent registered public accounting firm. Marcum had served the Company since its inception on May 5, 2017.
- Engagement of New Auditor: Effective November 12, 2019, KPMG LLP was engaged as the new independent registered public accounting firm.
- Rationale: The Audit Committee selected KPMG because the Company's historical financial statements represent a continuation of the financial statements of the Virgin Galactic Business, for which KPMG previously served as the auditor prior to the business combination consummated in October 2019.
Management Commentary and Risks
The Company confirmed that Marcum's reports for the year ended December 31, 2018, and the period from inception through December 31, 2017, did not contain adverse opinions, disclaimers, or qualifications. There were no disagreements with Marcum regarding accounting principles, practices, or auditing scope during their engagement. Additionally, no "reportable events" occurred during Marcum's tenure or the interim period preceding their dismissal. The Company also stated that no consultations were held with KPMG regarding accounting principles or audit opinions prior to their engagement.
Investor Verification Checklist
- Verify the transition timeline between Marcum LLP and KPMG LLP to ensure no gap in audit coverage.
- Review the attached letter from Marcum LLP (Exhibit 16.1) to confirm their agreement with the Company's disclosures regarding the dismissal.
- Confirm that the change in auditors aligns with the accounting treatment of the business combination completed in October 2019.
- Monitor future filings for the first financial statements audited by KPMG to assess any changes in accounting policies or disclosures.