On October 14, 2019, SingerLewak LLP (“SingerLewak”)
informed us that it resigned as our independent registered public accounting firm. On October 15, 2019, the Audit Committee
of our Board of Directors approved the appointment of, and then we engaged, WSRP, LLC as our new independent registered public
accounting firm, effective immediately. We are enclosing herewith Amendment No. 1 to our
Definitive Proxy Statement that amends Proposal No. 3 to reflect the appointment of WSRP and our submission for ratification of
the appointment of WSRP by our stockholders. We are also enclosing a new proxy card.
If you have already voted on Proposal No.
3, you may revoke your original proxy and submit a new proxy by telephone by calling (866) 436-6852 and following the instructions
or via the Internet by going to www.proxydocs.com/JAN and following the instructions. You may also revoke your proxy by
submitting the enclosed proxy card with a date after which your original proxy card or vote was dated.
If you are a stockholder in “street”
or “nominee” name, you may revoke your voting instructions and submit new voting instructions by informing the bank,
broker or other nominee in accordance with that entity’s procedures for revoking your voting instructions and issuing new
instructions. For additional information regarding revoking your proxy, please refer to page 3 of the Definitive Proxy Statement.
If you have not yet submitted your proxy,
please follow the instructions on the enclosed proxy card to submit your vote.
Your vote is important to us. We appreciate
your attention to this matter.
AMENDMENT NO. 1 TO PROXY STATEMENT FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON NOVEMBER 4, 2019
EXPLANATORY NOTE
On October 14, 2019, SingerLewak LLP (“SingerLewak”)
informed JanOne Inc. (the “Company”) that it resigned as the Company’s independent registered public accounting
firm. On October 15, 2019, the Audit Committee of the Company’s Board of Directors approved the engagement of, and the
Company engaged, WSRP, LLC as the Company’s new independent registered public accounting firm, effective immediately. Accordingly,
the Company is hereby amending its Definitive Proxy Statement filed October 2, 2019 to reflect the amendments to reflect the change
in the Company’s independent registered public accounting firm and to include a revised proxy card.
CHANGES TO DEFINITIVE PROXY STATEMENT
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1.
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All references to SingerLewak LLP in the “Notice of Annual Meeting of Stockholders” and “Questions and Answers About the Annual Meeting” sections of the Definitive Proxy Statement are amended to read “WSRP, LLC” or “WSRP” as appropriate or unless otherwise noted.
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2.
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Proposal No. 3 in the Definitive Proxy Statement is amended in its entirety to read as follows:
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RATIFICATION
OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
(Proposal
No. 3)
The Audit Committee has selected WSRP as
the Company’s independent registered public accounting firm for fiscal year 2019. The Company is submitting its selection
of WSRP for ratification by the stockholders at the Annual Meeting. A representative of WSRP is expected to be present at the Annual
Meeting via teleconference and will be available to respond to appropriate questions.
The Company’s Bylaws do not require
that stockholders ratify the selection of the Company’s independent registered public accounting firm. However, the Company
is submitting the selection of WSRP to stockholders for ratification as a matter of good corporate practice. If stockholders do
not ratify the selection, the Audit Committee will reconsider whether to retain WSRP. Even if the selection is ratified, the Audit
Committee at its discretion may change the appointment at any time during the year if it determines that such a change would be
in the best interests of the Company and its stockholders.
Anton & Chia, LLP previously served
as the independent auditors for the Company. On March 5, 2018, the Audit Committee determined to dismiss Anton & Chia, LLP
effective immediately. The audit reports of Anton & Chia, LLP on the Company’s financial statements for the fiscal year
ended December 31, 2016, the only year for which Anton & Chia, LLP audited the Company’s financial statements, contained
no adverse opinion or disclaimer of opinion and was not qualified or modified as to uncertainty, audit scope or accounting principles.
During the Company’s fiscal year ended December 31, 2016, the only year for which Anton & Chia, LLP audited the Company’s
financial statements, and for the subsequent interim period through March 5, 2018, the Company had no “disagreements”,
as described in Item 304(a)(1)(iv) of Regulation S-K, with Anton & Chia, LLP 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 Anton
& Chia, LLP, would have caused it to make reference in connection with its opinion to the subject matter of the disagreements.
During the Company’s fiscal year ended December 31, 2016, the only year for which Anton & Chia, LLP audited the
Company’s financial statements, and for the subsequent interim period through March 5, 2018, there was no “reportable
event” within the meaning of Item 304(a)(1)(v) of Regulation S-K.
On March 5, 2018, the Audit Committee approved
the engagement of Weinberg & Company, P.A. as the Company’s independent registered public accounting firm for fiscal
year ending December 30, 2017. During the Company’s fiscal years ended December 30, 2017 and December 31, 2016 and for the
subsequent interim period through March 28, 2018, neither the Company, nor anyone on behalf of the Company consulted with Weinberg
& Company, P.A. regarding 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 financial statements or (ii) any matter
that was either the subject of a “disagreement” as described in Item 304(a)(1)(iv) of Regulation S-K or a reportable
event within the meaning of Item 304(a)(1)(v) of Regulation S-K. On March 22, 2018, the Audit Committee determined to
dismiss Weinberg & Company, P.A. effective immediately. Weinberg & Company, P.A. did not audit nor provide an opinion on
any of the Company’s financial statements. During the Company’s fiscal years ended December 30, 2017 and December 31,
2016, and for the subsequent interim period through March 22, 2018, the Company had no “disagreements” (as described
in Item 304 (a)(1)(iv) of Regulation S-K) with Weinberg & Company, P.A. 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 Weinberg
& Company, P.A., would have caused it to make reference in connection with an opinion to the subject matter of the disagreements.
During the Company’s fiscal years ended December 30, 2017 and December 31, 2016, and for the subsequent interim period through
March 22, 2018, there was no “reportable event” within the meaning of Item 304(a)(1)(v) of Regulation S-K.
On March 23, 2018, the Audit Committee approved
the appointment of SingerLewak LLP (“SingerLewak”) as the Company’s new independent registered public accounting
firm, effective upon the execution of an engagement letter between the Company and SingerLewak. During the Company’s fiscal
years ended December 30, 2017 and December 31, 2016 and for the subsequent interim period through March 28, 2018, neither the Company,
nor anyone on behalf of the Company consulted with SingerLewak regarding 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
financial statements, or (ii) any matter that was either the subject of a disagreement as described in Item 304(a)(1)(iv) of Regulation
S-K or a reportable event within the meaning of Item 304(a)(1)(v) of Regulation S-K.
On October 14, 2019, SingerLewak informed
the Company that it resigned as the Company’s independent registered public accounting firm. The audit report of SingerLewak
on the Company’s financial statements for the fiscal years ended December 29, 2018 and December 30, 2017 contained no adverse
opinion or disclaimer of opinion and was not qualified or modified as to uncertainty, audit scope, or accounting principles. During
the Company’s two most recent fiscal years ended December 29, 2018 and December 30, 2017, and for the subsequent interim
period through October 18, 2019, the Company had no “disagreements” (as described in Item 304 (a)(1)(iv) of Regulation
S-K) with SingerLewak 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 SingerLewak, would have caused it to make reference in connection
with its opinion to the subject matter of the disagreements. During the Company’s two most recent fiscal years ended December
29, 2018 and December 30, 2017, and for the subsequent interim period through October 18, 2019, there was no “reportable
event” within the meaning of Item 304(a)(1)(v) of Regulation S-K other than the following material weaknesses (A) reported
in the Company’s Annual Report on Form 10-K for the fiscal year ended December 29, 2018: (i) insufficient information technology
general controls (“ITGCs”) and segregation of duties. Several employees of the Company have been provided access to
Company systems when their duties do not appear to require access, or which results in a lack of segregation of duties. No authorization
or lack of sufficient approval was noted on some journal entry transactions; and (ii) inadequate control design or lack of sufficient
controls over significant accounting processes. Inventory and purchase controls are not sufficient. The financial close process
needs additional formal procedures and closing checklists and reconciliations. Revenue recognition controls regarding transactions
with sales tax elements need additional process checks and controls, and (B) reported in the Company’s Quarterly Report on
Form 10-Q for the quarterly period ended June 29, 2019: (1) insufficient ITGCs and segregation of duties. It was noted that people
who were negotiating a contract, were also involved in approving invoices without proper oversight. Additional controls and procedures
are necessary and are being implemented to have check and balance on significant transactions and governance with those charged
with governance authority; (2) inadequate control design or lack of sufficient controls over significant accounting processes.
The cutoff and reconciliation procedures were not effective with certain accrued and deferred expenses; (3) insufficient assessment
of the impact of potentially significant transactions; and (4) insufficient processes and procedures related to proper recordkeeping
of agreements and contracts. In addition, contract to invoice reconciliation was not effective with a certain transportation service
provider.
On October 15, 2019, the Audit Committee
of the Board of Directors of the Company approved the engagement of, and the Company engaged, WSRP as the Company’s new independent
registered public accounting firm, effective immediately. During the Company’s two most recent fiscal years ended December
29, 2018 and December 30, 2017 and for the subsequent interim period through October 18, 2019, neither the Company, nor anyone
on behalf of the Company consulted with WSRP regarding 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 financial statements,
or (ii) any matter that was either the subject of a disagreement as described in Item 304(a)(1)(iv) of Regulation S-K or a reportable
event within the meaning of Item 304(a)(1)(v) of Regulation S-K.
Fees Paid to Auditors by the Company During Most Recent
Fiscal Years
Anton & Chia, LLP served as the independent
auditor for the Company for fiscal year 2016 and reviewed three quarters of fiscal year 2017. Weinberg & Company, P.A. was
retained briefly and then subsequently dismissed as the Company’s independent auditor of fiscal year 2017. Weinberg &
Company, P.A. did not audit or provide an opinion on any of the Company’s financial statements. SingerLewak LLP served as
Company auditor since fiscal year 2017. The Company paid fees to Anton & Chia, LLP, for the fiscal year ended December 30,
2017, Weinberg & Company, P.A. for fiscal year ended December 30, 2017, and SingerLewak LLP for fiscal years ended December
29, 2018 and December 30, 2017 for the following professional services:
Description
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December 29, 2018
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December 30, 2017
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Audit fees, SingerLewak LLP
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$210,000
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$150,000
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Audit fees, other
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$46,200
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$79,000
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Audit fees consist of fees for professional
services rendered in connection with the audit of the Company’s year-end financial statements, quarterly reviews of financial
statements included in the Company’s quarterly reports, services rendered relative to regulatory filings, and attendance
at Audit Committee meetings.
The Audit Committee of the Board of Directors
has considered whether the provision of the services described above was and is compatible with maintaining the independence of
Anton & Chia, LLP, Weinberg & Company, P.A., SingerLewak LLP and WSRP, LLC.
The Audit Committee pre-approves all audit
and permissible non-audit services provided by the independent auditors. All the fees and services for fiscal 2018 and fiscal 2017
were approved by the Audit Committee.
The Board recommends a vote FOR ratification
of the Audit Committee’s appointment of WSRP as our independent registered public accounting firm for fiscal 2019.
IF YOU HAVE ALREADY VOTED YOUR SHARES,
REGARDLESS OF HOW YOU HOLD YOUR SHARES, YOU WILL BE REQUIRED TO RESUBMIT A PROXY IN ORDER TO VOTE ON PROPOSAL NO. 3.
STOCKHOLDERS ARE URGED TO IMMEDIATELY
MARK, DATE, SIGN AND RETURN THE ENCLOSED PROXY VIA FACSIMILE TO THE ATTENTION OF CORPORATE SECRETARY, JANONE INC., AT (702) 997-5968
OR IN THE ENCLOSED POSTAGE-PAID ENVELOPE. YOUR VOTE IS IMPORTANT.