Business Context and Reporting Period
This Form 8-K filing by ONE Group Hospitality, Inc. (STKS) covers events occurring on March 24, 2021, with the report dated March 30, 2021. The filing primarily addresses a change in the company's independent certifying accountant and related internal control matters.
Key Financial Metrics
The filing text does not provide specific values for revenue, profit, cash flow, margins, debt, or liquidity. This report focuses on corporate governance and audit matters rather than financial performance data.
Material Changes
- Change in Auditor: The Audit Committee received notice on March 24, 2021, that Plante & Moran, PLLC will not stand for reappointment for the 2021 audit engagement. The Board accepted this notice on March 30, 2021.
- Internal Control Deficiencies: Plante & Moran reported significant deficiencies on March 9, 2021, and a material weakness on March 17, 2021, regarding the timeliness of reviewing and assessing significant accounting transactions.
- Management Reassessment: Despite the auditor's findings, management reassessed internal controls as of December 31, 2020, and determined them to be effective.
Outlook, Risks, and Contingencies
- Audit Continuity: Plante & Moran has agreed to conduct the review of financials for the Form 10-Q ending March 31, 2021.
- Future Auditor Selection: The Audit Committee will conduct a competitive selection process to appoint a new independent registered public accounting firm for the fiscal year ending December 31, 2021.
- Disagreements: The filing states there were no disagreements with Plante & Moran regarding accounting principles, practices, or auditing scope.
- Opinion History: No prior reports from Plante & Moran contained adverse opinions, disclaimers, or qualifications.
Investor Verification Checklist
- Verify the identity and qualifications of the newly appointed independent auditor.
- Review the upcoming Form 10-Q for the quarter ended March 31, 2021, to assess the impact of the reported material weakness on financial reporting.
- Monitor the company's remediation plan for the internal control deficiencies related to the timeliness of transaction reviews.
- Confirm the timeline for the competitive selection process for the new audit firm.