8-K: Loop Media Changes Auditors, Appoints Grassi & Co. Following Marcum LLP Dismissal

Loop Media, Inc. has dismissed Marcum LLP as its independent auditor and appointed Grassi & Co., CPAs, P.C. effective December 30, 2024.

Summary

• Loop Media, Inc. terminated Marcum LLP as their independent registered public accounting firm on December 30, 2024.
• Marcum's audit report for the fiscal years ending September 30, 2024, and 2023, did not contain any adverse opinions or disclaimers, but the 2024 report included an explanatory paragraph about the company's ability to continue as a going concern.
• There were no disagreements between Loop Media and Marcum regarding accounting principles, financial statement disclosures, or auditing procedures.
• Loop Media's Board of Directors approved the engagement of Grassi & Co., CPAs, P.C. as the new independent auditor, effective immediately on December 30, 2024.
• Loop Media did not consult with Grassi regarding accounting principles or audit opinions prior to their appointment.

Sentiment

Score: 3

Explanation: The change in auditors coupled with the going concern qualification in the previous audit report suggests significant financial challenges and uncertainty for the company.

Positives

• The transition to a new auditor was completed without any reported disagreements on accounting or auditing matters with the previous auditor.
• Marcum's report did not contain an adverse opinion or disclaimer, indicating no fundamental issues with the financial statements themselves.

Negatives

• Marcum's 2024 audit report included an explanatory paragraph regarding substantial doubt about Loop Media's ability to continue as a going concern, which is a significant concern.
• The change in auditors could indicate underlying issues or a desire for a fresh perspective on the company's financials.

Risks

• The going concern qualification in Marcum's report raises concerns about Loop Media's financial stability and future viability.
• The change in auditors could lead to increased scrutiny of the company's financial statements and accounting practices.
• The lack of prior consultation with Grassi could lead to unexpected challenges or delays in the audit process.

Future Outlook

The document does not provide any specific forward-looking statements or guidance.

Management Comments

• The company's board of directors approved the engagement of Grassi & Co. as the new independent auditor.

Industry Context

Changes in auditors are not uncommon, but the going concern qualification in the previous auditor's report is a significant concern that could impact investor confidence. This change may be part of a broader effort to address financial concerns.

Comparison to Industry Standards

• The change of auditors is not unusual, but the circumstances surrounding the change, particularly the going concern qualification, are not typical.
• Companies in similar situations, such as those with financial difficulties, may also change auditors to seek a fresh perspective or to address concerns raised by the previous auditor.
• The lack of prior consultation with the new auditor is not standard practice and could indicate a rushed decision.

Stakeholder Impact

• Shareholders may be concerned about the company's financial stability due to the going concern qualification.
• Employees may be worried about the company's future and job security.
• Creditors may be more cautious about extending credit to the company.

Next Steps

• Grassi & Co. will begin their audit of Loop Media's financial statements for the fiscal year ending September 30, 2025.

Key Dates

Keywords

auditor, accounting, financial statements, Marcum LLP, Grassi & Co., going concern, audit, public accounting firm