What is the potential impact of the inability to engage an independent accounting firm on Ledgers?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
This report contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, which provides a "safe harbor" for such statements in certain circumstances. The forwardlooking statements include statements or expectations regarding potential impacts of KPMG's resignation, ability and timing to complete the accounting review and audits, comprehensiveness of the Company's accounting review and ability to engage an independent accounting firm and related matters. These statements are based upon current expectations, estimates, projections, beliefs and assumptions of Company management, and there can be no assurance that such expectations will prove to be correct. Because forward-looking statements involve risks and uncertainties and speak only as of the date on which they are made, actual events or results could differ materially from those discussed in the forward-looking statements as a result of various factors, including but not limited to loss of key personnel or inability to engage accounting personnel as needed; inability to address the previously disclosed accounting matters; identification of additional material weaknesses or significant deficiencies; disagreements or additional reportable events that KPMG may identify in a letter addressed to the SEC pursuant to Item 304 of Regulation S-K; failure to engage an independent accounting firm, complete the audits and re-audits and file any required restatements and periodic reports; adverse effects resulting from the Company's common stock being delisted from the Nasdaq Stock Market LLC; risks relating to the substantial costs and diversion of personnel's attention and resources due to these matters and related litigation and other factors discussed in greater detail in the Company's filings with the SEC. You are cautioned not to place undue reliance on such statements and to consult the Company's most recent Annual Report on Form 10-K and other SEC filings for additional risks and uncertainties that may apply to the Company's business and the ownership of the Company's securities. The Company's forward-looking statements are presented as of the date made, and the Company does not undertake any duty to update any forward-looking statements, whether as a result of new information, future events, or otherwise.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to the 2025 Ledgers Franchise Disclosure Document, there are potential risks associated with the company's ability to engage an independent accounting firm. The FDD references forward-looking statements that include expectations regarding the potential impacts of KPMG's resignation as their independent registered public accounting firm. These forward-looking statements also address the company's ability and timing to complete accounting reviews and audits, the comprehensiveness of these reviews, and the ability to engage a new independent accounting firm.
The inability to secure an independent accounting firm could lead to several adverse outcomes for Ledgers. These include the potential delisting of the company's common stock from the Nasdaq Stock Market LLC, which could negatively impact the company's valuation and investor confidence. Furthermore, it could result in a failure to complete audits and re-audits, as well as the inability to file required restatements and periodic reports with the SEC. These failures could lead to regulatory penalties, legal challenges, and a loss of credibility with investors and the public.
Additionally, the FDD highlights that these issues could lead to substantial costs and a diversion of personnel's attention and resources due to these accounting matters and related litigation. The document cautions readers not to place undue reliance on forward-looking statements and advises consulting the company's most recent Annual Report on Form 10-K and other SEC filings for additional risks and uncertainties that may apply to the company's business and the ownership of the company's securities. This suggests that prospective Ledgers franchisees should carefully review these filings to understand the full scope of potential risks related to the company's accounting issues.