Business Context and Reporting Period
This Form 8-K is a current report filed by Dolphin Digital Media, Inc. (also referenced as Dolphin Entertainment, Inc.) on June 20, 2011. The filing addresses a change in the Company's independent registered public accounting firm.
Key Financial Metrics
The filing does not provide specific revenue, profit, cash flow, margin, debt, or liquidity figures for the current period. However, it references the prior fiscal year ended December 31, 2010, noting that the previous auditor's report included an explanatory paragraph regarding "substantial doubt as to the Company's ability to continue as a going concern." This doubt was attributed to a deficit in capital and working capital, as well as significant losses incurred.
Material Changes
- Dismissal of Prior Auditor: On June 20, 2011, the Board of Directors dismissed RBSM LLP, which had been engaged on February 24, 2011, for the fiscal year ended December 31, 2010.
- Engagement of New Auditor: On June 20, 2011, the Board engaged Crowe Horwath LLP as the new independent registered public accounting firm for the fiscal year ending December 31, 2011.
- Audit Disagreements: The Company reported no disagreements with RBSM regarding accounting principles, practices, financial statement disclosures, or auditing scope/procedures during the most recent fiscal year or the interim period preceding dismissal.
- Reportable Events: No reportable events as defined in Item 304(a)(1)(v) of Regulation S-K occurred during the relevant periods.
Guidance, Outlook, and Risks
The filing contains no forward-looking guidance, revenue outlook, or management commentary regarding future operations. The primary risk highlighted is the previously disclosed "substantial doubt" regarding the Company's ability to continue as a going concern due to capital deficits and significant losses. The Board concluded that the new auditor, Crowe Horwath LLP, would maintain independence despite any prior services provided.
Investor Verification Checklist
- Verify the specific financial details of the "deficit in capital and working capital" and "significant losses" mentioned in the prior year's audit report.
- Confirm the status of the Company's going concern assessment in subsequent filings.
- Review the attached letter from RBSM LLP (Exhibit 16.1) to ensure no undisclosed disagreements exist.
- Monitor future filings for the initial audit opinion from Crowe Horwath LLP for the fiscal year ending December 31, 2011.