Analyst Summary
- CBIZ CPAs P.C. was dismissed as the independent registered public accounting firm.
- Marcum Asia CPAs LLP was appointed as the new independent registered public accounting firm for the fiscal year ending June 30, 2025.
- The dismissal and appointment were effective immediately on February 18, 2025.
- No disagreements or reportable events occurred during the interim period between CBIZ CPAs’ appointment and dismissal, except for previously reported material weaknesses in internal control over financial reporting.
- Material weaknesses in the Company’s internal control over financial reporting reported by the Company on its Quarterly Report on Form 10-Q for the period ended December 31, 2024 related to (i) the lack of controls to enable the Company to record assets acquired from a controlling stockholder in accordance with GAAP, (ii) the lack of controls to enable the Company to evaluate significant estimates, including (x) the sufficiency of inventory reserve for slow-moving inventories and (y) the credit loss history and use it to evaluate the sufficiency of credit loss reserve for accounts receivable under Accounting Standards Update 2016-13 “Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments,” (iii) the lack of comprehensive accounting policies and procedures manual in accordance with U.S. GAAP and U.S. Securities and Exchange Commission (“SEC”) reporting, including IT general controls, and a financial risk assessment to evaluate controls, and (iv) the lack of a sufficient complement of personnel with appropriate technical expertise to evaluate complex accounting matters.