UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 24,
2020
IOTA COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
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Delaware
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000-27587
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22-3586087
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(State or other jurisdiction
of incorporation)
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(Commission
File Number)
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(IRS Employer
Identification No.)
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600 Hamilton Street, Suite 1010
Allentown, PA 18101
(Address of principal executive offices)
Registrant’s telephone number, including area code: (855)
743-6478
N/A
(Former name or former address, if changed since last
report)
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (see General Instruction A.2.
below):
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☐
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Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
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☐
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
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☐
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Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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Securities
registered pursuant to Section 12(b) of the Act: None
Indicate
by check mark whether the registrant is an emerging growth company
as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of
1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by
check mark if the registrant has elected not to use the extended
transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the
Exchange Act. ☐
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ITEM 4.02
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Non-Reliance on Previously Issued Financial Statements or a Related
Audit Report or Completed Interim Review.
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As
reported on a Current Report on Form 8-K filed by Iota
Communications, Inc. (the “Company”) on March 6, 2020,
on March 4, 2020, the Board of Directors of the Company, after
discussion with management of the Company and the Company’s
independent registered public accounting firm, Friedman LLP,
concluded that the Company’s previously issued unaudited
condensed consolidated interim financial statements as of and for
the three and six months ended November 30, 2019, included in the
Company’s Quarterly Report on Form 10-Q and Form 10-Q/A for
such period (the “Previously Issued Financial
Statements”) filed with the Securities and Exchange
Commission (the “SEC”) on January 22, 2020, should be
restated because of certain material errors in the financial
statements (the “Restatement”) and should no longer be
relied upon. Similarly, management concluded that its reports on
the effectiveness of internal controls over financial reporting,
earnings releases, and investor communications describing the
financial statements for this period should no longer be relied
upon.
The
material errors identified in the Previously Issued Financial
Statements primarily relate to the extinguishment of revenue-based
note liabilities in connection with the Company’s Solutions
Pool Program. The Company failed to disclose and properly record
the extinguishment in the amount of $6.3 million, net of
unamortized deferred financing costs, in exchange for future cash
consideration of approximately $3.4 million and shares of its
common stock valued at approximately $7.0 million as of the date of
exchange for a loss on extinguishment and exchange of approximately
$4.1 million.
In
connection with the Restatement, management has identified
additional errors in the Previously Issued Financial Statements.
The Company is currently assessing these additional errors for
materiality and required correction. Management has discussed these
additional errors with the Board of Directors of the Company and
Friedman LLP. The Company expects that it may continue to identify,
assess for materiality, and correct additional errors in connection
with the Restatement, some of which may be material and adverse.
The Company also expects to make reclassifications to correct the
presentation of certain items in the Previously Issued Financial
Statements, as appropriate.
The
Company will restate its previously issued unaudited condensed
consolidated interim financial statements as of and for the three
and six months ended November 30, 2019 through the filing of an
amended Quarterly Report on Form 10-Q. This amended Form 10-Q/A2 is
expected to be filed with the SEC no later than May 29, 2020. The
Restatement does not impact the Company’s previously issued
audited consolidated financial statements as of and for the year
ended May 31, 2019 or any other prior period.
Caution Regarding Forward-Looking Statements
Certain
statements included in this Form 8-K are “forward-looking
statements” within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements include statements
regarding the effects of the Restatement and the expected timing
for filing Company’s amended Quarterly Report on Form 10-Q
including the Restatement. Forward-looking statements may involve
known and unknown risks, uncertainties, and other factors that may
cause actual results, performance, or achievements of the Company
to be materially different from historical results or from any
future results or projections expressed or implied by such
forward-looking statements. Accordingly, readers should not place
undue reliance on any forward-looking statements. In addition to
statements that explicitly describe such risks and uncertainties,
readers are urged to consider statements in the conditional or
future tenses or that include terms such as “believes,”
“belief,” “expects,”
“estimates,” “intends,”
“anticipates,” or “plans” to be uncertain
and forward-looking. Factors that may cause actual results to
differ materially from current expectations include, among other
things, the review of the Company’s accounting, accounting
policies, and internal control over financial reporting; the
preparation and review of the Restatement; and the subsequent
discovery of additional required adjustments to the Company’s
Previously Issued Financial Statements. Additional factors include
those listed under Part I, Item 1A. “Risk Factors” in
the Company’s Annual Report on Form 10-K for the fiscal year
ended May 31, 2019 and the Company’s other filings with the
SEC. Except as required by law, the Company assumes no obligation
to update or revise these forward-looking statements for any
reason, even if new information becomes available in the
future.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
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IOTA
COMMUNICATIONS, INC.
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Date: April 24,
2020
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By:
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/s/ Terrence
DeFranco
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Name:
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Terrence
DeFranco
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Title:
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Chief Executive
Officer
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