Business Context and Reporting Period
This Form 8-K is a current report filed by Bowlero Corp. (not Lucky Strike Entertainment Corp.) on October 21, 2022. The registrant is an emerging growth company incorporated in Delaware, with its principal executive offices in Mechanicsville, Virginia. The report primarily addresses a change in the company's independent registered public accounting firm.
Key Financial Metrics
This filing does not contain financial performance data such as revenue, profit, cash flow, margins, debt, or liquidity. The document focuses exclusively on corporate governance regarding the audit firm.
Material Changes
- Dismissal of Former Accountant: The Audit Committee dismissed KPMG LLP as the independent registered public accounting firm, effective upon the completion of their review of the quarter ended October 2, 2022. KPMG had served the company since December 21, 2021.
- Appointment of New Accountant: The Audit Committee selected Deloitte & Touche LLP as the new independent registered public accounting firm for the fiscal year ending July 2, 2023, and related interim periods.
- Audit History: KPMG's reports for fiscal years ended July 3, 2022, and June 27, 2021, contained no adverse opinions, disclaimers, or qualifications.
- Disagreements: There were no disagreements with KPMG regarding accounting principles, practices, or auditing scope during the relevant periods.
Outlook, Risks, and Contingencies
Internal Control Weaknesses: The filing notes that while there were no reportable events other than previously disclosed issues, the company had material weaknesses in internal control over financial reporting as of July 3, 2022. These related to financial reporting processes. Additionally, material weaknesses existed as of June 27, 2021, related to insufficient technical resources and ineffective information/communication affecting controls over leases, income taxes, stock-based compensation, and business combinations.
Consultation with New Firm: The company confirmed that neither it nor anyone on its behalf consulted Deloitte regarding any matters set forth in Item 304(a)(2)(i) or (ii) of Regulation S-K during the two most recent fiscal years or the subsequent interim period.
Investor Verification Checklist
- Verify the effective date of the transition from KPMG to Deloitte & Touche LLP.
- Review the Annual Report on Form 10-K for the year ended July 3, 2022, to understand the specific details of the material weaknesses in internal controls over financial reporting.
- Confirm the execution of the engagement letter with Deloitte & Touche LLP to finalize the appointment.
- Examine Exhibit 16.1 (KPMG's letter) to ensure the former auditor agrees with the company's disclosures regarding the dismissal.