ITEM 4.01 CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
(a) Dismissal of Independent Registered Public Accounting Firm
On July 14, 2020, the Audit Committee (the "Audit Committee") of the Board of
Directors of Global Eagle Entertainment Inc. (the "Company") approved the
dismissal of KPMG LLP ("KPMG") as the Company's independent registered public
accounting firm, effective immediately.
The audit reports of KPMG on the consolidated financial statements of the
Company and subsidiaries as of and for the years ended December 31, 2019 and
2018 did not contain any adverse opinion or a disclaimer of opinion and were not
qualified or modified as to uncertainty, audit scope, or accounting principles,
except that (i) KPMG's report dated May 14, 2020 on the Company's consolidated
financial statements as of and for the years ended December 31, 2019 and 2018,
which report was included in the Company's Annual Report on Form 10-K for the
year ended December 31, 2019 filed with the SEC on May 15, 2020 (the "2019
Annual Report") contained (a) a separate paragraph stating that (1) the
Company's recurring losses from operations, insufficient cash flows generated
from operations, potential violations of financial covenants and ability to
timely service debt, and uncertainty arising from the COVID-19 outbreak raise
substantial doubt about its ability to continue as a going concern, and (2) that
the consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty; and (b) a separate paragraph
stating that as discussed in Notes 2, 3 and 4 of the consolidated financial
statements (1) the Company changed its method for accounting for Leases due to
the adoption of Accounting Standard Update (ASU) No. 2016-02, Leases (Topic
842), and all related amendments effective January 1, 2019; and (2) the Company
changed its method for accounting for Revenue due to the adoption of Accounting
Standard Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic
606), and all related amendments effective January 1, 2018; and (ii) KPMG's
report dated March 18, 2019 on the Company's consolidated financial statements
as of and for the years ended December 31, 2018 and 2017, which report was
included in the Company's Annual Report on Form 10-K for the year ended
December 31, 2018 filed with the SEC on March 18, 2019 (the "2018 Annual
Report"), included a paragraph stating that KPMG, in its report dated March 18,
2019, expressed an adverse opinion on the effectiveness of the Company's
internal control over financial reporting.
During the fiscal years ended December 31, 2019 and December 31, 2018 and the
subsequent interim periods through July 14, 2020, there were (i) no
disagreements (as that term is defined in Item 304(a)(1)(iv) of Regulation S-K
and the related instructions) between the Company and KPMG 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
KPMG, would have caused KPMG to make reference in connection with their opinion,
and (ii) no "reportable events" (as that term is defined in Item 304(a)(1)(v) of
Regulation S-K), except for the material weaknesses (the "Reportable Event")
identified in the Company's internal control over financial reporting related to
its control environment, risk assessment, information and communication, and
control activities, as previously disclosed under Part II, Item 9A of the
Company's 2018 Annual Report and 2019 Annual Report. The Audit Committee
discussed the Reportable Event with KPMG, and the Company authorized KPMG to
respond fully to inquiries of the successor accountant (described below)
concerning the Reportable Event.
The Company provided KPMG with a copy of this Form 8-K and requested that KPMG
provide the Company with a letter addressed to the SEC stating whether KPMG
agrees with the above disclosures. A copy of KPMG's letter, dated July 17, 2020,
is attached as Exhibit 16.1 to this Form 8-K.
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(b) Newly Engaged Independent Registered Public Accounting Firm
On July 14, 2020, the Audit Committee approved the appointment of Marcum LLP
("Marcum") as the Company's independent registered public accounting firm,
effective immediately.
During the fiscal year ended December 31, 2019 and December 31, 2018 and through
the subsequent interim periods, neither the Company, nor any party on behalf of
the Company, consulted with Marcum with respect to either (i) the application of
accounting principles to a specified transaction, either completed or proposed,
or the type of the audit opinion that might be rendered with respect to the
Company's consolidated financial statements, and no written report or oral
advice was provided to the Company by Marcum that was an important factor
considered by the Company in reaching a decision as to any accounting, auditing
or financial reporting issue, or (ii) any matter that was subject to any
disagreement (as that term is defined in Item 304(a)(1)(iv) of Regulation S-K
and the related instructions) or a reportable event (as that term is defined in
Item 304(a)(1)(v) of Regulation S-K).
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
16.1 Letter from KPMG to the Securities and Exchange Commission,
dated July 17, 2020.
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