Item 4.01. Changes in Registrant's Certifying Accountant.
(a) Dismissal of Independent Registered Public Accounting Firm
On January 6, 2022, the Board of Directors of Fuse Group Holding Inc. (the
"Company") approved the dismissal of Prager Metis CPAs, LLP ("Prager Metis") as
the Company's independent registered public accounting firm, effective
immediately.
Prager Metis's audit reports on the Company's consolidated financial statements
as of and for the fiscal years ended September 30, 2020 and 2019 did not contain
an adverse opinion or a disclaimer of opinion and were not qualified or modified
as to uncertainty, audit scope or accounting principles, except that the audit
reports on the consolidated financial statements of the Company for the fiscal
years ended September 30, 2020 and 2019 contained an uncertainty about the
Company's ability to continue as a going concern.
During the fiscal years ended September 30, 2020 and 2019, and in the subsequent
interim period through January 5, 2022, there were (i) no disagreements between
the Company and Prager Metis 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 Prager Metis, would have
caused Prager Metis to make reference to the subject matter of the disagreement
in their reports on the financial statements for such years, and (ii) no
"reportable events" as that term is defined in Item 304(a)(1)(v) of Regulation
S-K, except as noted in the following paragraph:
During the fiscal years ended September 30, 2020 and 2019, and through the
interim period ended January 5, 2022, there were the following "reportable
events" (as such term is defined in Item 304 of Regulation S-K). As disclosed in
Part I, Item 4 of the Company's Form 10-Q for the quarter ended June 30, 2021,
the Company's management determined that the Company's internal controls over
financial reporting were not effective as of the end of such period due to the
existence of material weaknesses related to the following:
1. We do not have an Audit Committee. While we are not legally obligated to
have an audit committee, it is the management's view that such a committee,
including a financial expert member, is of the utmost importance for
entity-level control over the Company's financial statements. Currently, the
Board of Directors acts in the capacity of an audit committee.
2. We did not implement appropriate information technology controls. As of June
30, 2021, the Company was retaining copies of all financial data and material
agreements; however there is no formal procedure or evidence of normal backup of
the Company's data or off-site storage of the data in the event of theft,
misplacement, or loss due to unmitigated factors.
3. We currently lack sufficient accounting personnel with the appropriate level
of knowledge, experience and training in U.S. GAAP and SEC reporting
requirements. We have one employee assigned to a position that involves
processing financial information, resulting in a lack of segregation of duties
so that all journal entries and account reconciliations are reviewed by someone
other than the preparer, heightening the risk of error or fraud.
These material weaknesses have not been remediated as of the date of this
Current Report on Form 8-K.
The Company provided Prager Metis with a copy of the disclosures it is making in
this Current Report on Form 8-K (the "Report") prior to the time the Report was
filed with the Securities and Exchange Commission (the "SEC"). The Company
requested that Prager Metis furnish a letter addressed to the SEC stating
whether or not it agrees with the statements made herein. A copy of Prager
Metis's letter dated January 11, 2022, is attached as Exhibit 16.1 hereto.
(b) Engagement of New Independent Registered Public Accounting Firm
On January 6, 2022, the Company's Board of Directors approved the engagement of
Paris, Kreit & Chiu CPA LLP ("Paris Kreit") , as the Company's independent
registered public accounting firm, effective as of January 6, 2022. The Board
of Directors also approved Paris Kreit to act as the Company's independent
registered public accounting firm for the fiscal year ending September 30, 2021.
During the Company's two most recent fiscal years and through January 5, 2022,
neither the Company nor anyone on its behalf consulted Paris Kreit regarding (i)
the application of accounting principles to a specified transaction, either
completed or proposed, or the type of audit opinion that might be rendered on
the consolidated financial statements of the Company; or (ii) any matter that
was either the subject of a disagreement or a reportable event as described
above; and there was neither a written report nor was oral advice provided to
the Company by Paris Kreit that was an important factor considered by the
Company in reaching a decision as to an accounting, auditing or financial
reporting issue.
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Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Exhibit Title or Description
16.1 Letter from Prager Metis CPAs, LLP to the SEC, dated January 11, 2022.
104 Cover Page Interactive Data File (formatted as Inline XBRL)
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