Item 4.01 Changes in Registrants Certifying Accountant.
(a) Resignation of Independent
Registered Public Accounting Firm
On October 17, 2019, Security Devices International Inc. (the Company)
received notice from McGovern Hurley LLP (McGovern Hurley), the Companys
independent registered public accounting firm, stating that it will no longer be
performing audit services for public entities registered with the U.S.
Securities and Exchange Commission (the Commission) and resigning with
immediate effect. The Company has appointed Mayer Hoffman McCann CPAs, the New
York Practice of Mayer Hoffman McCann P.C., as the Companys independent
registered public accounting firm, effective as of October 28, 2019.
The reports of McGovern Hurley on the financial
statements of the Company as of and for the fiscal years ended November 30, 2018
and 2017 contained no adverse opinion or disclaimer of opinion and were not
qualified or modified as to uncertainty, audit scope, or accounting principles,
except that (i) the audit reports on the financial statements of the Company as
of and for the fiscal years ended November 30, 2018 and 2017 indicated that
there was substantial doubt about the Companys ability to continue as a going
concern, and (ii) McGovern Hurley expressed no opinion on the effectiveness of
the Companys internal control over financial reporting, as the Company was not
required to have, nor did the Company engage McGovern Hurley to perform, an
audit of the Companys internal control over financial reporting.
During the Companys fiscal years ended November
30, 2018 and 2017 and the subsequent interim period from December 1, 2018 to the
date of this report, and in connection with the audit of the Companys financial
statements for such periods, there were no disagreements between the Company and
McGovern Hurley 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 McGovern Hurley, would have caused McGovern
Hurley to make reference to the subject matter of such disagreements in
connection with its audit reports on the Companys financial statements.
During the Companys fiscal years ended November
30, 2018 and 2017 and the subsequent interim period from December 1, 2018 to the
date of this report, there were no reportable events within the meaning of Item
304(a)(1)(v) of Regulation S-K, except that management concluded that, as of
November 30, 2017, the Companys internal controls over financial reporting were
not effective due to a material weakness, which was identified and disclosed in
Item 9A (Managements Report on Internal Control over Financial Reporting) of
the Companys Annual Report on Form 10-K for the fiscal year ended November 30,
2017. In addition, management concluded that, as of November 30, 2018, February
28, 2019, May 31, 2019 and August 31, 2019, the Companys disclosure controls
and procedures were not effective due to a significant deficiency, which was
identified and disclosed in Item 9A (Managements Report on Internal Control
over Financial Reporting) of the Companys Annual Report on Form 10-K for the
fiscal year ended November 30, 2018 and Item 4 (Controls and Procedures) of the
Companys Quarterly Reports on Form 10-Q for the fiscal quarters ended February
28, 2019, May 31, 2019 and August 31, 2019, respectively.
During the Companys fiscal years ended November
30, 2018 and 2017 and the subsequent interim period from December 1, 2018 to the
date of this report, the Company did not consult with McGovern Hurley regarding
any of the matters set forth in Items 304(a)(2) of Regulation S-K.
The Company has provided McGovern Hurley with a
copy of the disclosures in this report and has requested that McGovern Hurley
furnish it with a letter addressed to the Commission stating whether or not
McGovern Hurley agrees with the statements in this Item 4.01. A copy of this
letter is filed as Exhibit 16.1 to this report.
(b) Appointment of New Independent
Registered Public Accounting Firm
On October 28, 2019, the Company engaged Mayer
Hoffman McCann CPAs, the New York Practice of Mayer Hoffman McCann P.C. (MHM)
as the Companys new independent registered public accounting firm to perform
independent audited services for the Company for the fiscal year ending
November 30, 2019, effective as of October 28, 2019. During the Companys fiscal
years ended November 30, 2018 and 2017 and the subsequent interim period from
December 1, 2018 to the date of this report, neither the Company nor anyone on the
Companys behalf has consulted with MHM regarding any of the matters
described in Items 304(a)(2) of Regulation S-K.