Item
4.01 Changes in Registrant’s Certifying Accountant.
A.
Dismissal of Independent Registered Public Accounting Firm
.
On
November 28, 2017, the Audit Committee (the “Audit Committee”) of the Board of Directors of Surna Inc. (the “Company”)
dismissed RBSM LLC (“RBSM”) as the Company’s independent registered public accounting firm.
RBSM’s
audit reports on the Company’s consolidated financial statements as of and for the fiscal years ended December 31, 2015
and 2016 did not contain an adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit
scope or accounting principles, except that each such report included an explanatory paragraph raising substantial doubt about
the Company’s ability to continue as a going concern and stated that the Company’s consolidated financial statements
for the fiscal years ended December 31, 2015 and December 31, 2016, respectively, were prepared assuming that the Company would
continue as a going concern.
During
the Company’s two most recent fiscal years and the subsequent interim period from January 1, 2017 through November 28, 2017,
(i) there were no “disagreements” (as that term is defined in Item 304(a)(1)(iv) of Regulation S-K and the related
instructions) between the Company and RBSM on any matters of accounting principles or practices, financial statement disclosure
or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of RBSM, would have caused RBSM to make
reference to the subject matter of the disagreement in its report on the Company’s financial statements, and (ii) there
were no “reportable events” (as that term is defined in Item 304(a)(1)(v) of Regulation S-K), except for the material
weaknesses in internal controls as described in Item 9A of Form 10-K for the fiscal years ended December 31, 2015 and 2016, as
follows:
“The
Company did not maintain effective controls over certain aspects of the financial reporting process because we lacked a sufficient
complement of personnel with a level of accounting expertise and an adequate supervisory review structure that is commensurate
with our financial reporting requirements. In addition, there was inadequate segregation of duties due to the limitation on the
number of our accounting personnel.”
These
material weaknesses have not been remediated as of the date of this Current Report on Form 8-K.
The
Company has provided RBSM with a copy of the foregoing statements in this Current Report on Form 8-K and has requested and received
from RBSM a copy of the letter addressed to the Securities and Exchange Commission stating that RBSM agrees with the above statements.
A copy of the letter from RBSM is attached as Exhibit 16.1 to this Current Report on Form 8-K.
B.
Appointment
of New Independent Registered Public Accounting Firm
.
On
November 28, 2017, the Audit Committee approved the appointment of Anton Collins Mitchell LLP (“ACM”) as the Company’s
new independent registered public accounting firm to perform independent audit services commencing for the fiscal year ending
December 31, 2017.
During
the Company’s two most recent fiscal years and the subsequent interim period from January 1, 2017 through November 28, 2017,
neither the Company, nor anyone acting on behalf of the Company, consulted ACM 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, and neither a written report nor oral advice was provided to the Company that
ACM 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” or a “reportable event.”