Item 4.01 Changes in Registrant’s Certifying
Accountant.
On
January 11, 2017, Grant Thornton LLP (“Grant Thornton”)
informed Versar, Inc. (the “Company”) of its
resignation as the Company’s independent registered public
accounting firm, effective immediately, which was accepted by the
Audit Committee of Versar’s Board of Directors on January 12,
2017.
The
reports of Grant Thornton on the Company’s consolidated
financial statements for the years ended June 26, 2015 and June 27,
2014 contain no adverse opinion or disclaimer of opinion, and such
reports were not qualified or modified as to uncertainty, audit
scope or accounting principles. Grant Thornton had not completed
its audit of the Company’s financial statements for the
fiscal year ended July 1, 2016 as of the date of its
resignation.
Except
to the extent described below, in connection with Grant
Thornton’s resignation, during the Company’s two most
recent fiscal years and the subsequent interim period through
January 11, 2017, there were (i) no disagreements under Item
304(a)(1)(iv) of Regulation S-K between the Company and Grant
Thornton on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure,
which, if not resolved to Grant Thornton’s satisfaction,
would have caused Grant Thornton to make reference to the subject
matter of such disagreement in connection with its report and (ii)
no events of the types listed in paragraphs (A) through (D) of Item
304(a)(1)(v) of Regulation S-K.
Disagreements under Item 304(a)(1)(iv)
In
connection with its resignation, Grant Thornton indicated that
recent communications from the Company and the Chairman of its
Audit Committee appeared to restrict Grant Thornton’s audit
scope or audit procedures in a manner that was not acceptable to
Grant Thornton. Although the Company and the Audit Committee
Chairman accepted Grant Thornton’s resignation, they do not
agree with Grant Thornton that they were restricting Grant
Thornton’s audit scope or audit procedures. As a result of
Grant Thornton’s resignation, the Company, its Audit
Committee, and Grant Thornton did not resolve their disagreement
over these issues.
The
Company has authorized Grant Thornton to fully respond to the
inquiries of any successor accountant concerning the subject matter
of any disagreements.
Other Reportable Events under Item 304(a)(1)(v)
As
disclosed in the Company’s quarterly report on Form 10-Q for
the quarter ended April 1, 2016, in connection with preparation of
the financial statements for such quarter management of the Company
concluded, after consultation with Grant Thornton, that a material
weakness in internal control over financial reporting existed. The
material weakness was disclosed and a remediation plan developed,
which was outlined in the Company’s Form 10-Q for the quarter
ended April 1, 2016.
In
accordance with Item 304(a)(3) of Regulation S-K, the Company
provided Grant Thornton with a copy of this disclosure on January
13, 2017, requesting Grant Thornton to furnish the Company with a
letter addressed to the Securities and Exchange Commission stating
whether it agrees with the statements contained herein. A letter
from Grant Thornton dated January 18, 2017 is attached as Exhibit
16.1 to this current report.
Engagement of New Accounting Firm
On
January 17, 2017, the Audit Committee of the Company’s Board
of Directors retained Urish Popeck & Co., LLC (“Urish
Popeck”) as its new independent registered public accounting
firm. The appointment received the required approval from
Company’s lender, Bank of America, N.A.
During
the Company’s two most recent fiscal years and the subsequent
interim period through January 17, 2017, neither the Company nor
anyone on its behalf consulted with Urish Popeck with respect to
either (i) 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 consolidated
financial statements, and no written report or oral advice was
provided by Urish Popeck to the Company that Urish Popeck concluded
was an important factor considered by the Company in reaching a
decision as to the accounting, auditing or financial reporting
issue, or (ii) any matter that was either the subject of a
disagreement (as defined in Item 304(a)(1)(iv) of Regulation S-K
and the related instructions to that Item) or a reportable event
(as described in Item 304(a)(1)(v) of Regulation S-K).
The
Company and Urish Popeck expect to work diligently towards
satisfying all of the Company’s filing requirements with the
Securities and Exchange Commission within the next seventy-five
days.