Business Context and Reporting Period
This Form 8-K was filed by Iveda Corporation (also referred to as Iveda Solutions, Inc.) on November 2, 2009, reporting events occurring on October 27, 2009. The filing addresses a change in the company's independent registered public accounting firm following the acquisition of IntelaSight, Inc. as a wholly owned operating subsidiary. This acquisition resulted in the relocation of the company's principal executive offices from Canada to Mesa, Arizona.
Key Financial Metrics
The filing does not provide specific numerical values for revenue, profit, cash flow, margins, debt, or liquidity for the current period. However, it references historical audit reports for the fiscal years ended January 31, 2009, and 2008. These reports noted that the company had incurred significant net losses since inception, which raised substantial doubt about its ability to continue as a going concern. The financial statements for those years did not include adjustments that might result from the outcome of these uncertainties.
Material Changes
- Accountant Dismissal: Manning Elliott LLP ("ME"), the previous independent auditor based in Canada, was dismissed effective October 27, 2009.
- Accountant Engagement: Farber Hass Hurley LLP ("FHH"), a U.S.-based firm, was engaged to serve as the independent auditor for the fiscal year ending December 31, 2009.
- Operational Shift: The change in auditors was driven by the relocation of principal offices to Arizona following the IntelaSight acquisition.
- Audit History: There were no disagreements with the former auditor regarding accounting principles, practices, or auditing scope during their tenure.
Outlook, Risks, and Management Commentary
Management determined that engaging a U.S.-based auditor was in the best interest of the company given the new operational headquarters in Arizona. The filing explicitly states that prior to the engagement of FHH, the company did not consult them on any accounting principles, proposed transactions, or matters that could be considered disagreements or reportable events. The primary risk highlighted in the context of the filing is the historical "going concern" uncertainty noted in prior audit reports due to significant net losses.
Investor Verification Checklist
- Verify the status of the "going concern" warning noted in the 2008 and 2009 fiscal year audits.
- Confirm the receipt of the letter from Manning Elliott LLP regarding their agreement with the statements in this filing.
- Review the financial impact of the IntelaSight, Inc. acquisition on the company's liquidity and operational costs.
- Monitor future filings for the appointment of the new auditor's initial audit opinion.