Item 4.01 Change in Registrant's Certifying Accountant.
(a) Dismissal of Independent Registered Public Accountant
The Audit Committee of the Board of Directors (the "Audit Committee") of Yunhong
CTI Ltd. (the "Company"), directed the Company's Chief Executive Officer, to
call RBSM LLP ("RBSM"), the Company's independent registered public accounting
firm, on April 19, 2022. During this call, the Company informed RBSM that the
Audit Committee has decided to terminate its engagement of RBSM as the Company's
independent registered public accounting firm. The Company explained that the
timing of this change is influenced by the need to provide proxy materials to
shareholders for the upcoming annual meeting of shareholders.
The audit reports of RBSM on the Company's consolidated financial statements as
of and for the years ended December 31, 2021 and December 31, 2020 did not
contain any adverse opinion or disclaimer of opinion, nor were such reports
qualified or modified as to uncertainty, audit scope or accounting principles,
except that the audit report on the Company's financial statements for the years
ended December 31, 2021 and December 31, 2020 contained a paragraph indicating
that there was substantial doubt about the ability of the Company to continue as
a going concern.
During the Company's two most recent fiscal years and the subsequent interim
period through April 19, 2022, there were (i) no disagreements under Item
304(a)(1)(iv) of Regulation S-K between the Company and RBSM on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure, which, if not resolved to RBSM's satisfaction, would have
caused RBSM to make reference to the subject matter of such disagreement in
connection with its reports and (ii) no events of the types listed in paragraphs
(A) through (D) of Item 304(a)(1)(v) of Regulation S-K.
As disclosed in Item 9A of the Company's Annual Reports on Form 10-K for the
years ended December 31, 2021 and December 31, 2020, management determined a
material weakness in internal control over financial reporting related to the
Company's capabilities, processes, and controls related to limited staffing and
over-reliance on certain personnel, as well as related employee turnover. A
material weakness is a deficiency, or combination of deficiencies, in internal
control over financial reporting, such that there is a reasonable possibility
that a material misstatement of our annual or interim financial statements will
not be prevented or detected on a timely basis. Management determined that these
deficiencies constitute a material weakness that was not identified and
remediated as of December 31, 2021 and December 31, 2020, respectively. Based on
this material weakness, management concluded that at December 31, 2021 and
December 31, 2020, internal control over financial reporting was not effective.
During the years ended December 31, 2021 and December 31, 2020 and the
subsequent interim period ending April 18, 2022, there were no "reportable
events" (as that term is defined in Item 304(a)(1)(v) of Regulation S-K), except
as discussed above.
The Company has authorized RBSM to respond fully to any inquiries of the
successor independent registered public accounting firm.
The Company provided RBSM with a copy of the disclosures the Company is making
in this Current Report on Form 8-K and requested that RBSM furnish the Company
with a letter addressed to the Securities and Exchange Commission stating
whether RBSM agrees with the statements made by the Company regarding RBSM and,
if not, stating the respects in which it does not agree. The Company will file a
copy RBSM's letter when received from RBSM, as an exhibit to an amendment to
this Current Report on Form 8-K.
4854-1413-8140.7
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(b) Newly Appointed Independent Registered Public Accountant
On April 20, 2022, the Audit Committee approved the appointment of LJ Soldinger
Associates, LLC (LJSA) to serve as the Company's independent registered public
accounting firm for the fiscal year ending December 31, 2022. The effective date
of LJSA's appointment as the Company's independent registered public accounting
firm for the fiscal year ending is December 31, 2022. During the fiscal years
ended December 31, 2021 and December 31, 2022, and the subsequent interim period
through April 20, 2022, neither the Company, nor anyone acting on the Company's
behalf, has consulted with LJSA 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
consolidated financial statements, in any case where either a written report or
oral advice was provided to the Company by LJSA that LJSA concluded was an
important factor considered by the Company in reaching a decision as to any
accounting, auditing or financial reporting issue; or (ii) any matter that was
either the subject of a "disagreement" (within the meaning of Item 304(a)(1)(iv)
of Regulation S-K and the related instructions) or a "reportable event" (as that
term is defined in Item 304(a)(1)(v) of Regulation S-K).
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