May 29, 2020 8-K Current report
Item 4.01 Changes in Registrant’s Certifying Accountant
On May 26, 2020, Surna Inc., a Nevada corporation (the “Company”), notified ACM LLP, 2015 Clubhouse Drive, #203, Greeley, CO 80634 (“ACM”), that
the Company had dismissed ACM as its independent registered public accounting firm. The dismissal of ACM was approved by the Board of Directors of the
Company (the “Board”).
Pursuant to applicable rules, the Company makes the following additional disclosures:
1. ACM has served as the Company’s independent registered public accounting firm since 2017.
2. ACM’s reports on the consolidated financial statements of the Company as of and for the fiscal years ended December 31, 2019 and 2018, did not
contain any adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles, except that such
reports contained explanatory paragraphs in respect to uncertainty as to the Company’s ability to continue as a going concern and the change in its method of
accounting for leases due to the adoption of the Accounting Standards Codification Topic 842, Leases, which was discussed in Footnote 4 to the consolidated
financial statements for the year ended December 31, 2019. During the fiscal years ended December 31, 2019 and 2018, and through May 26, 2020, there
were no disagreements with ACM on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which if not
resolved to ACM’s satisfaction would have caused it to make reference thereto in connection with its reports on the financial statements for such years.
3. During the fiscal years ended December 31, 2019 and 2018 and through May 26, 2020, there were no events of the type described in Item 304(a)(1)
(v) of Regulation S-K, other than certain material weaknesses in respect of effectiveness of internal controls over certain aspects of the financial reporting
process because: (i) the Company lacks a sufficient complement of personnel with a level of accounting expertise and an adequate supervisory review structure
that is commensurate with the financial reporting requirements of the Company, (ii) there is inadequate segregation of duties due to the limited number of
accounting personnel, and (iii) the Company has insufficient controls and processes in place to adequately verify the accuracy and completeness of
spreadsheets that we use for a variety of purposes including revenue, taxes, stock-based compensation and other areas, and place significant reliance on, for
our financial reporting.
4. On May 28, 2020, the Company engaged Sadler, Gibb & Associates, L.L.C. (“SGA”), located at 2455 East Parleys Way, Suite 320, Salt Lake City, UT
84109, as its new independent registered public accounting firm. The engagement of SGA was approved by the Board.
5. During the fiscal years ended December 31, 2019 and 2018 and thereafter through May 28, 2020, the Company did not consult with SGA with
respect to any matter whatsoever including without limitation with respect to any of (i) the application of accounting principles to a specified transaction, either
completed or proposed; (ii) the type of audit opinion that might be rendered on the Company’s financial statements; or (iii) any matter that was either the subject
of a disagreement (as defined in Item 304(a)(1)(iv) of Regulation S-K) or an event of the type described in Item 304(a)(1)(v) of Regulation S-K.
The Company has provided ACM with a copy of the foregoing disclosure and requested that it furnish the Company with a letter addressed to the
Securities and Exchange Commission stating whether it agrees with the statements made therein. A copy of such letter, dated May 28, 2020, is filed as Exhibit
16.1 to this Report.
