LOL...Check the below. MHM walked out on VRUS because they believe their financial statements we garbage. Soon after they walked out, VRUS General Counsel also jumped ship.
Check the below and the 8-K online. It stinks!!!
https://www.sec.gov/Archives/edgar/data/1430523/000149315220002887/form8-k.htm
On February 18, 2020 (the “Effective Date”), Mayer Hoffman McCann P.C. (“MHM”) notified the board of directors of Verus International, Inc. (the “Company”) that it had resigned as the Company’s independent registered public accounting firm. Since MHM’s engagement on January 14, 2020 (the “Engagement Date”), MHM did not issue any audit report on the Company’s financial statements.
From the Engagement Date through the Effective Date, except as discussed in the following paragraph, there were no disagreements between the Company and MHM on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of MHM, would have caused MHM to make reference to the subject matter of the disagreement in connection with any report MHM would have provided to the Company. Furthermore from the Engagement Date through the Effective Date, there were no reportable events (as described under Item 304(a)(1)(v)(A)-(D) of Regulation S-K) for the Company.
The Company and MHM had certain unresolved discussions on whether, and how, to correct prior period financial statements for the following errors:
a. Unrecorded stock-based compensation, and
b. Classification of equity instruments (including conversion features, warrants, and stock compensation warrants) subsequent to the Company having an insufficient number of authorized shares to settle certain equity classified instruments.
Although MHM did not complete its audit prior to the Effective Date, MHM believes the errors are material to the prior period financial statements, including the annual and interim periods affected, and therefore, should be corrected by restating the financial statements previously filed (e.g., via a Form 10-K/A and Form 10-Q/A). Additionally, the Company and MHM had certain unresolved discussions on the sufficiency of documentation necessary to support amounts recorded in the current period financial statements.
https://www.sec.gov/Archives/edgar/data/1430523/000149315220003151/form8-k.htm
On February 24, 2020, the Board of Directors (the “Board”) of Verus International, Inc. (the “Company”) approved the appointment of Assurance Dimensions, Inc. (“Assurance Dimensions”) as the Company’s independent registered public account firm effective as of February 24, 2020. Assurance Dimensions replaces Mayer Hoffman McCann P.C. (“MHM”) who resigned as the Company’s independent registered public accounting firm effective as of February 18, 2020.
Assurance Dimensions reported on the Company’s financial statements for the fiscal years ended October 31, 2018 and October 31, 2017. During the two most recent fiscal years and the subsequent period through the appointment of Assurance Dimensions, the Company did not consult with Assurance Dimensions regarding the matters set forth in Item 304(a)(2)(i) of Regulation S-K; however, the Company consulted with Assurance Dimensions regarding the matters set forth in Item 304(a)(2)(ii) of Regulation S-K. Specifically, the Company and MHM, the Company’s prior independent registered public accounting firm, had certain unresolved discussions on whether, and how, to correct prior period financial statements for the following errors:
? Unrecorded stock-based compensation, and
? Classification of equity instruments (including conversion features, warrants, and stock compensation warrants) subsequent to the Company having an insufficient number of authorized shares to settle certain equity classified instruments.
Furthermore, although MHM did not complete its audit prior to the date upon which it resigned as the Company’s independent registered public accounting firm, MHM believed the errors to be material to the Company’s prior period financial statements, including the annual and interim periods affected, and indicated to the Company that such errors should be corrected by restating the financial statements previously filed (e.g., via a Form 10-K/A and Form 10-Q/A).
The Company discussed the foregoing matters with Assurance Dimensions; however, Assurance Dimensions was unable to comment on the foregoing matters without completing its audit for the fiscal year ended October 31, 2019.
The Company has provided a copy of the foregoing disclosures to Assurance Dimensions.
Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.
On February 14, 2020, MHM advised the Company that it believed there were certain errors in the Company’s prior period financial statements, including the Company’s annual and interim periods which should be corrected by restating the financial statements previously filed by the Company. Specifically, MHM advised the Company that it believed such errors should be corrected by a restatement of the financial statements set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2018 and the Quarterly Reports on Form 10-Q for the quarters ended January 31, 2019, April 30, 2019 and July 31, 2019 (collectively, the “SEC Reports”).
Although MHM was engaged to conduct an audit for the Company’s fiscal year ended October 31, 2019, MHM did not previously issue an audit report nor did it complete an interim review with respect to the Company’s previously issued financial statements.
The Board of Directors of the Company and Assurance Dimensions have not yet made an assessment as to whether the financial statements in the SEC Reports need to be restated at this time and will supplement this Current Report on Form 8-K if, upon the completion of Assurance Dimension’s audit, the Company’s Board of Directors and Assurance Dimensions believe that the financial statements in the SEC Reports should not be relied upon.
The Company has provided a copy of the disclosures set forth in this Item 4.02 to MHM and requested MHM to provide the Company with a letter indicating whether or not MHM agrees with such disclosures. A copy of the letter, dated February 28, 2020 is attached hereto as Exhibit 7.1.