Business Context and Reporting Period
This Form 8-K is a current report filed by Bioflamex Corporation (noted as Cann American Corp. in metadata) on October 16, 2012. The registrant is incorporated in Nevada with principal executive offices in Charlottenlund, Denmark. The filing primarily addresses a change in the company's certifying accountant.
Key Financial Metrics
The filing text does not provide specific values for revenue, profit, cash flow, margins, debt, or liquidity. However, it references prior audit reports for fiscal years ended February 29, 2012, and February 28, 2011, which contained an uncertainty regarding the Company's ability to continue as a going concern.
Material Changes
- Accountant Change: On October 16, 2012, the company dismissed Weaver Martin & Samyn, LLC as its former accountant.
- New Engagement: The company engaged Silberstein Ungar, PLLC Associates as its new principal accountants, effective October 11, 2012.
- Board Approval: The decision to change accountants was approved by the Board of Directors.
Management Commentary, Risks, and Contingencies
Internal Control Weaknesses: Management disclosed that internal controls over financial reporting were not effective as of the end of the fiscal years ended February 29, 2012, and February 28, 2011, and through the interim period ended October 16, 2012. Material weaknesses included:
- Inadequate segregation of duties and effective risk assessment.
- Insufficient written policies and procedures for accounting and financial reporting regarding US GAAP and SEC guidelines.
Disagreements and Reportable Events: There were no disagreements with the former accountant on accounting principles or practices. The only reportable events were the aforementioned internal control weaknesses.
Former Accountant Response: The former accountant indicated they could not respond to the company's request for a letter to the SEC until at least October 22, 2012. The company plans to file an amended Form 8-K to include this response.
Investor Verification Checklist
- Verify the reasons for the dismissal of Weaver Martin & Samyn, LLC beyond the stated lack of disagreements.
- Confirm the status of the "going concern" uncertainty mentioned in prior audit reports.
- Review the amended Form 8-K for the former accountant's official response letter.
- Assess the progress made in remediating the material weaknesses in internal controls over financial reporting.