EZTrader Dismisses Auditors
EZTrader woes continue as the company dismisses Ziv Haft, the Certified Public Accountants based in Israel, and a BDO member firm.
EZTrader dismisses auditors is the latest announcement filed with the US Securities and Exchange Commission smacks of a wounded animal impotently lashing out in its death throes. The thrust of the release follows.
Changes in Registrant’s Certifying Accountant.
(a) On September 29, 2016 (the “Dismissal Date”), the Board of Directors of EZTD Inc. (the “Company”) dismissed Ziv Haft, Certified Public Accountants (Isr.), a BDO Member Firm (“BDO”) as the Company’s independent registered public accounting firm, effective immediately. The reports of BDO on the Company’s consolidated financial statements as of and for the years ended December 31, 2015 and 2014 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 report contained an explanatory paragraph stating that there was substantial doubt about the Company’s ability to continue as a going concern.
During the years ended December 31, 2015 and 2014 and through the Dismissal Date, there were:
- no disagreements between the Company and BDO on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreement, if not resolved to the satisfaction of BDO, would have caused BDO to make reference thereto in their reports on the consolidated financial statements for such years, and
- no “reportable events” as that term is defined in Item 304(a)(1)(v) of Regulation S-K.
The Company provided BDO with a copy of this Form 8-K and requested that BDO furnish it with a letter addressed to the Securities and Exchange Commission stating whether or not BDO agrees with the above statements. A copy of such letter, dated October 6, 2016, is attached as Exhibit 16.1.
(b) Contemporaneous with the dismissal of BDO, the Board of Directors of the Company engaged Brightman Almagor Zohar & Co., a member firm of Deloitte Touche Tohmatsu (“Deloitte”) to serve as the Company’s independent registered public accounting firm for the year ending December 31, 2016, effective as of the Dismissal Date. During the years ended December 31, 2015 and 2014 and through the Dismissal Date, the Company has not consulted with Deloitte regarding either:
- 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 Company’s consolidated financial statements, and neither a written report nor oral advice was provided to the Company that Deloitte concluded was an important factor considered by the Company in reaching a decision as to the accounting, auditing or financial reporting issue; or
- any of the matters or events set forth in Item 304(a)(2) of Regulation S-K.
In response Ziv Haft replied:
“We have been furnished with a copy of the response to Item 4.01 of Form 8-K for the event that occurred on September 29, 2016 to be filed by our former client, the EZTD INC. We agree with the statements made in response to that Item insofar as they relate to our Firm.”
Paragraphs a(i) and a(ii) above are an irrelevance. Ziv Haft qualified EZTDs accounts for both the years 2014 and 2015 stating their belief that there was substantial doubt that EZTD could continue to raise the necessary cash to fund their operations, most notably a ludicrously high marketing budget which is now double their market capitalisation.
What is relevant is that b(i) states that Deloitte Touche Tohmatsu, the Deloitte member taking over from Ziv Haft, has basically gone in without any pre-briefing as to the situation. It is doubtful that, whatever the situation, a name like Deloitte is going to allow themselves to be seen as a soft touch (in comparison to BDO) and unless EZTD can pull a massive rabbit out of the hat with respect to immediate funding, that they too will be heading for the EZTD door.
The suggestion that EZTrader is already trading insolvently, a criminal offence usually, was made here a few weeks back. Since then the share price has nose-dived 23% to $2.50 although the current market is $2.00 bid, offered at $2.30 (100 x 650). The next two bids are $1.15 (100) and $0.0001(!) which indicates the company would have a huge uphill battle to raise any money at all and suggests the market knows that.
EZTD is due to provide the SEC with their third quarter report any time soon so it is likely that the next filing with the SEC will be a FORM NT 10-Q (Notification that Quarterly Report will be submitted late).
The question is: Are EZTD now using client funds to finance their operations?
CySEC where are you when you should be getting your hands dirty?