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Item 4.01
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Changes in Registrant's Certifying Accountant
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(a) On March 1, 2021, the Audit Committee of the Board of Directors of Nautilus, Inc. and subsidiaries (the “Company”) dismissed KPMG LLP (“KPMG”) as the Company’s independent registered public accounting firm, effective as of that date, and appointed Grant Thornton LLP (“Grant Thornton”) to serve as the Company’s independent registered public accounting firm as of and for the fiscal year ending March 31, 2022 and for the transition period from January 1, 2021 to March 31, 2021.
The audit reports of KPMG on the Company’s consolidated financial statements as of and for the years ended December 31, 2020 and 2019 did not contain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope, or accounting principles, except as follows: KPMG's audit reports on the consolidated financial statements of Nautilus, Inc. and subsidiaries as of and for the years ended December 31, 2020 and 2019, contained a separate paragraph stating that "As discussed in Note 10 to the consolidated financial statements, the Company has changed its method of accounting for Leases as of January 1, 2019 due to the adoption of Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2016-02, Leases (Topic 842)."
During the Company’s two most recent fiscal years and the subsequent interim period through March 1, 2021, there were no disagreements (as described in Item 304(a)(1)(iv) of Regulation S-K and the related instructions) with KPMG on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreement (if not resolved to the satisfaction of KPMG) would have caused KPMG to make reference to the subject matter of the disagreement in connection with its report.
During the Company’s two most recent fiscal years and the subsequent interim period through March 1, 2021, there were no reportable events of the type described in Item 304(a)(1)(v) of Regulation S-K.
The Company provided KPMG with a copy of this Form 8-K prior to its filing with the U.S. Securities and Exchange Commission (the “SEC”) and requested KPMG to furnish the Company with a letter addressed to the SEC stating whether KPMG agrees with the statements made by the Company in response to Item 304(a) of Regulation S-K and, if not, stating the respects in which it does not agree. A copy of KPMG’s letter, dated March 2, 2021, is attached as Exhibit 16.1 to this Form 8-K.
(b) On March 1, 2021, the Audit Committee of the Board of Directors appointed Grant Thornton to serve as the Company’s independent registered public accounting firm as of and for the fiscal year ending March 31, 2022 and for the transition period from January 1, 2021 to March 31, 2021.
During the Company’s two most recent fiscal years and the subsequent interim period preceding Grant Thornton’s engagement, neither the Company nor anyone on its behalf consulted Grant Thornton regarding (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 no written report or oral advice was provided by Grant Thornton to the Company that Grant Thornton 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 (as described in Item 304(a)(1)(iv) of Regulation S-K and the related instructions) or a reportable event (as described in Item 304(a)(1)(v) of Regulation S-K).