Business Context and Reporting Period
This Form 8-K Current Report was filed by Byrna Technologies Inc. on June 15, 2020. The filing primarily 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 fiscal year ended November 30, 2019, noting that the previous auditor's report included a paragraph expressing substantial doubt about the Company's ability to continue as a going concern.
Material Changes
- Resignation of Previous Auditor: Mayer Hoffman McCann CPAs (MHM) voluntarily resigned as the independent registered public accounting firm, effective June 8, 2020.
- Engagement of New Auditor: The Board of Directors appointed EisnerAmper LLP as the new independent registered public accounting firm, effective June 15, 2020.
- Internal Control Weaknesses: The Company disclosed reportable events related to material weaknesses in internal control over financial reporting for the fiscal year ended November 30, 2019, and the interim period through February 29, 2020.
Management Commentary, Risks, and Contingencies
The filing details the causes of the material weaknesses in internal controls, citing:
- A small accounting department where segregation of duties cannot be fully accomplished.
- Employee turnover and the processing of financial information by new personnel.
- Inadequate personnel to evaluate accounting for complex, non-routine transactions, which resulted in an error regarding the accounting for 2018 convertible notes.
There were no disagreements between the Company and MHM regarding accounting principles, practices, or audit scope. The Company confirmed no prior consultations with EisnerAmper regarding accounting principles or audit opinions prior to their engagement.
Investor Verification Checklist
- Verify the status of the "substantial doubt" regarding the Company's ability to continue as a going concern as noted in the 2019 audit report.
- Review the specific details of the accounting error related to the 2018 convertible notes.
- Assess the Company's plan to remediate the identified material weaknesses in internal controls over financial reporting.
- Confirm the timeline for the transition of audit responsibilities from MHM to EisnerAmper LLP.