DASAN ZHONE SOLUTIONS, INC. (NASDAQ:DZSI) Files An 8-K Changes in Registrant’s Certifying Accountant
Item 4.01 Change in Registrant’s Certifying Accountant.
On June 7, 2019, following an evaluation of audit fees and costs and at the direction of the Audit Committee (the “Audit Committee”) of the Board of Directors of Dasan Zhone Solutions, Inc. (the “Company”), PricewaterhouseCoopers LLP (“PwC”) was dismissed as the Company’s independent registered public accounting firm. The Company notified PwC on June 10, 2019 that it would be dismissed as the Company’s independent registered public accounting firm, effective immediately. The decision to change independent registered public accounting firms was approved by the Audit Committee.
PwC’s reports on the Company’s financial statements for the years ended December 31, 2018 and 2017 did not contain an adverse opinion or a disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope, or accounting principles.
During the Company’s two most recent fiscal years ended December 31, 2018 and 2017, and the subsequent interim period through June 10, 2019, there were no disagreements, within the meaning of Item 304(a)(1)(iv) of Regulation S-K promulgated under the Exchange Act and the related instructions thereto (“ Regulation S-K ”), with PwC 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 PwC, would have caused it to make reference to the subject matter of the disagreements in connection with its reports.
Also during this same period, there were no reportable events within the meaning of Item 304(a)(1)(v) of Regulation S-K and the related instructions thereto, except for the material weaknesses in the Company’s internal control over financial reporting relating to the matters for the three and nine months ended September 30, 2016, which have not been fully remediated at December 31, 2018, as previously reported in Item 9A of the Company’s Annual Report on Form 10-K for the fiscal years ended December 31, 2018 and December 31, 2017 (“Forms 10-K”) relating to: an insufficient complement of personnel with appropriate accounting knowledge, experience and competence, resulting in incorrect application of generally accepted accounting principles, ineffective controls over the financial close process, and lack of design and maintenance of effective controls over the review of supporting information to determine the completeness and accuracy of the accounting for complex transactions. As previously reported in Item 9A of the Forms 10-K, as part of the Company’s remediation plan, management is re-assessing the design of its internal control over financial reporting, including modifying processes related to the accounting for significant and unusual transactions, as well as enhancing monitoring and oversight controls in the application of accounting guidance related to such transactions, and in connection therewith, the Company has hired and anticipates that it will hire additional accounting personnel with relevant skills, training and experience, and conduct further training of its accounting and finance personnel.
The Company has provided PwC with the disclosures under this Item 4.01(a), and has requested PwC to furnish the Company with a letter addressed to the Securities and Exchange Commission stating whether or not it agrees with the statements made by the Company in this Item 4.01(a). PwC’s letter is filed as Exhibit 16.1 to this Current Report on Form 8-K.
On June 7, 2019, the Audit Committee approved the appointment of Grant Thornton LLP (“Grant Thornton”) as the Company’s new independent registered public accounting firm, effective upon the dismissal of PwC on June 10, 2019. During the Company’s two most recent fiscal years ended December 31, 2018 and 2017, and the subsequent interim period through June 10, 2019, neither the Company nor anyone acting on its behalf consulted with Grant Thornton regarding any of the matters described in Items 304(a)(2)(i) and (ii) of Regulation S-K.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
DASAN ZHONE SOLUTIONS INC Exhibit
EX-16.1 2 dzsi-ex161_6.htm EX-16.1 dzsi-ex161_6.htm Exhibit 16.1 June 14,…
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About DASAN ZHONE SOLUTIONS, INC. (NASDAQ:DZSI)
DASAN Zhone Solutions, Inc., formerly Zhone Technologies, Inc., designs, develops and manufactures communications network equipment for telecommunications operators and enterprises across the world. The Company’s products provide enterprise solutions that enable both network service providers and enterprises to deliver high speed fiber access, while transporting voice, video and data to the end user. In addition to its product offerings in its core business, it offers FiberLAN Passive Optical local area network (LAN), which provides an alternative to switched copper-based LANs. The customers of its FiberLAN business include hospitality, government, education, manufacturing and business enterprises. Its products span two categories: SLMS Products, and Legacy, Service and Other Products. Its SLMS Products include Broadband Aggregation and Service, Customer Premise Equipment (CPE), Zhone Management System and FiberLAN Passive Optical LAN.
