Item 4.01 Changes in Registrant's Certifying Accountant
On August 15, 2013, the Board of Directors
of CoroWare, Inc. (the “Company”) dismissed its independent registered public accounting firm,
Lake & Associates
CPAs LLC (
“Lake”). Effective August 13, 2013, the Public Company Accounting Oversight Board
(“PCAOB”) revoked its registration of Lake & Associates CPA’s LLC with PCOAB because Lake violated certain
PCAOB rules and standards. This revocation of the PCAOB registration will make it necessary for the Company to re-audit
its
financial statements for the years 2011 and 2012 which had been previously audited by Lake and included in our annual report on
Form10-K for 2012. The Company intends to file an amended report on Form10-K/A for the year 2012 to include a re-audit of our financial
statements by
Sadler, Gibb & Associates, LLC
for the years 2011 and 2012
.
During the period
of our engagement of Lake from November 9, 2011 through August 15, 2013, (a) there were no disagreements with Lake 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 the Lake, would have caused it to make reference thereto in its reports on the financial statements
for such years and (b) there were no “reportable events” as described in Item 304(a)(1)(v) of Regulation S-K
that the Company was aware of as of the date of dismissal.
The principal accountant's report on the financial
statements issued by Lake in connection with the financial statements dated December 31, 2012, and filed with our Form 10-K on
April 16, 2013, contained a “going concern” qualification. It stated:
“The Company has incurred losses for the years ended December
31, 2012and 2010 of $76,157,283 and $2,028,596 respectively. Because of these losses and the Company’s working capital deficit,
the Company will require additional working capital to develop its business operations.”
The Company intends to raise additional working capital through
the use of private placements, public offerings and/or bank financing.
There are no assurances that the Company will be able to either
(1) achieve a level of revenues adequate to generate sufficient cash flow from operations; or (2) obtain additional financing through
either private placements, public offerings and/or bank financing necessary to support he Company’s working capital requirements.
To the extent that funds generated from operations, any private placements, public offerings and/or bank financing are insufficient,
the Company will have to raise additional working capital. No assurance can be given that additional financing will be available,
or if available, will be on terms acceptable to the Company.
These conditions raise substantial doubt about the Company’s
ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability
and classification of asset carrying amounts or the amount and classification of liabilities that might be necessary should the
company be unable to continue as a going concern.”
New Independent Registered
Public Accounting Firm
Sadler, Gibb & Associates, LLC (“Sadler”) was appointed
by the Company’s Board of Directors as its new independent registered public accounting firm on August 15, 2013 to audit
and review the Company’s financial statements. During the Company’s two most recent fiscal years and through
August 15, 2013, the Company did not consult Sadler regarding:
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(i)
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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 financial statements, and neither a written
report was provided to the Company or oral advice was provided that the new accountant concluded was an important factor considered
by the Company in reaching a decision as to the accounting, auditing or financial reporting issue; or
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(ii)
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any matter that was either the subject of a disagreement as defined in paragraph 304(a)(1)(iv)
of Regulation S-K or a reportable event as described in paragraph 304(a)(1)(v) of Regulation S-K.
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Item 9.01.