RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS OUR INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING
JUNE 30, 2024
Ratification of Appointment of the Independent Registered Public Accounting Firm
Our Board and the audit committee are asking our stockholders to ratify the appointment by the audit committee of Deloitte & Touche LLP (“Deloitte”), as the independent public accounting firm to conduct the audit of our financial statements for the fiscal year ending June 30, 2024. Stockholder ratification of such selection is not required by our Amended and Restated Bylaws or any other applicable legal requirement. However, our Board is submitting the selection of Deloitte to our stockholders for ratification as a matter of good corporate governance.
Ratification of the appointment of Deloitte requires the vote of a majority of the shares of our Common Stock and Preferred Stock, voting together as a single class, cast affirmatively or negatively on the matter. In the event our stockholders fail to ratify the selection, the audit committee will reconsider whether or not to continue to retain Deloitte for the fiscal year ending June 30, 2024. Even if the selection is ratified, the audit committee in its discretion may direct the appointment of a different independent registered public accounting firm at any time during the year if the audit committee believes that such a change should be made.
Changes in Independent Registered Public Accounting Firm in 2021 and 2022
On December 21, 2021, the audit committee of our Board dismissed Marcum LLP (“Marcum”), Isos’s independent registered public accounting firm prior to the Business Combination, as the Company’s independent registered public accounting firm effective following the filing of the Company’s Quarterly Report on Form 10-Q for the three months and nine months ended September 30, 2021, which consists only of the accounts of the pre-Business Combination special purpose acquisition company, Isos. On December 21, 2021, the audit committee of our Board approved the engagement of KPMG LLP (“KPMG”) as the Company’s independent registered public accounting firm to audit the Company’s consolidated financial statements as of and for the fiscal year ended July 3, 2022. KPMG served as independent registered public accounting firm of Old Bowlero prior to the Business Combination.
As previously reported on our Current Report on Form 8-K, dated October 27, 2022, the audit committee (i) approved the dismissal of KPMG, effective upon the completion of KPMG’s review of the Company’s consolidated financial statements as of and for the quarter ended October 2, 2022, and (ii) engaged Deloitte as our independent registered public accounting firm for the fiscal year ending July 2, 2023 and related interim periods ending January 1, 2023 and April 2, 2023. The reports of KPMG on our consolidated financial statements for the years ended July 3, 2022 and June 27, 2021 did not contain an adverse opinion or disclaimer of opinion, nor were such reports qualified or modified as to uncertainty, audit scope or accounting principles.
During the years ended July 3, 2022 and June 27, 2021, and in the subsequent interim period through October 31, 2022, there were no disagreements with KPMG 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 KPMG, would have caused them to make a reference thereto in their reports.
During the years ended July 3, 2022 and June 27, 2021, and in the subsequent interim period through October 31, 2022, there were no disagreements or “reportable events” requiring the disclosure pursuant to paragraph (a)(1)(v) of Item 304 of Regulation S-K, other than the material weaknesses in internal control over financial reporting related to certain financial reporting processes as of July 3, 2022, as reported in Item 9A in our Annual Report on Form 10-K for the year ended July 3, 2022 and material weaknesses as of June 27, 2021 related to insufficient technical resources and ineffective information and communication that resulted in ineffective process level controls over leases, income taxes, stock-based compensation and business combinations.
The audit committee commenced an audit tender in 2022, with a thorough and competitive process to select our independent registered public accounting firm for the year ending July 2, 2023. The audit committee invited several audit firms to participate in the process, and the firms that submitted responses to the request for proposal undertook an extensive process of reviewing information about us and our businesses. The tender process also included a variety of meetings with members of the audit committee and our management as part of the evaluation of each firm’s capabilities, audit quality, industry knowledge and expertise, independence, proposed engagement team, approach to audit innovation and technology, and other factors.