Item 4.01. Changes in Registrant's Certifying Accountant.
On June 4, 2020, the Audit Committee of the Board of Directors (the "Audit
Committee") of Natural Gas Services Group, Inc. (the "Company") approved the
dismissal of BDO USA, LLP ("BDO") as the Company's independent registered public
accounting firm. The reports of BDO on the Company's consolidated financial
statements for the fiscal years ended December 31, 2019 and 2018 did not contain
an adverse opinion or a disclaimer of opinion, and were not qualified or
modified as to uncertainty, audit scope or accounting principles.
During the fiscal years ended December 31, 2019 and 2018, and during the
subsequent interim period through June 4, 2020, there have been no
"disagreements" (as defined in Item 304(a)(1)(iv) of Regulation S-K and related
instructions) with BDO 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 BDO would have caused BDO
to make reference thereto in its reports on the consolidated financial
statements for such periods.
Except for the two events immediately noted below, during the fiscal years ended
December 31, 2019 and 2018, and during the subsequent interim period through
June 4, 2020, there have been no other "reportable events" (as defined in Item
304(a)(1)(v) of Regulation S-K).
BDO's report on the effectiveness of internal control over financial reporting,
dated March 18, 2019, expressed an adverse opinion on the effectiveness of the
Company's internal control over financial reporting as of December 31, 2018 as a
result of a material weakness regarding management's failure to design and
maintain controls over accounting for income taxes that resulted in an
immaterial misstatement in the provision for income taxes in prior periods.
BDO's report on the effectiveness of internal control over financial reporting,
dated March 31, 2020, expressed an adverse opinion on the effectiveness of the
Company's internal control over financial reporting as of December 31, 2019 as a
result of material weaknesses regarding management's failure to design and
maintain controls over the following: 1) accounting for income taxes as
discussed above; and 2) accounting and reporting of compressor "make-ready"
jobs, as well as various other compressor maintenance jobs, that were
incorrectly capitalized, resulting in immaterial increases to the Company's
operating costs and expenses in prior periods.
The Company provided BDO with a copy of the disclosure it is making herein in
response to Item 304(a) of Regulation S-K, and requested that BDO furnish the
Company with a copy of its letter addressed to the Securities and Exchange
Commission (the "SEC"), pursuant to Item 304(a)(3) of Regulation S-K, stating
whether or not BDO agrees with the statements related to them made by the
Company in this report. A copy of BDO's letter to the SEC dated June 10, 2020 is
attached as Exhibit 16.1 to this report.
On June 10, 2020, the Audit Committee approved the appointment of Moss Adams LLP
("Moss Adams") as the Company's new independent registered public accounting
firm, effective immediately, to perform independent audit services for the
fiscal year ending December 31, 2020. During the fiscal years ended December 31,
2019 and 2018, and during the subsequent interim period through June 10, 2020,
neither the Company, nor anyone on its behalf, consulted Moss Adams 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 with respect to the consolidated financial statements of the Company,
and no written report or oral advice was provided to the Company by Moss Adams
that was an important factor considered by the Company in reaching a decision as
to any accounting, auditing or financial reporting issue; or (ii) any matter
that was the subject of a "disagreement" (as defined in Item 304(a)(1)(iv) of
Regulation S-K and the related instructions) or a "reportable event" (as that
term is defined in Item 304(a)(1)(v) of Regulation S-K).
Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On June 10, 2020, Charles G. Curtis retired and resigned from his position as a
member of the Board of Directors ("Board") and his related Board Committee
memberships (Audit, Governance and Nominating Committees) of the Company. Mr.
Curtis' decision to retire and resign from the Board was not the result of any
disagreement with the Company or the Board. The Company would like to thank Mr.
Curtis for his distinguished service on our Board. His leadership, insight and
dedication will be missed.
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Pursuant to the Company's Bylaws, on June 10, 2020, the Board appointed Leslie
Shockley Beyer to fill the vacancy on the Board created by Mr. Curtis'
retirement. In addition, Ms. Beyer was appointed to the following committees of
the Board: Audit, Compensation and Nominating (Chairperson) committees.
Ms. Beyer is President of the Petroleum Equipment & Services Association and has
been since 2014, where she leads the development of PESA's programs and serves
as the organization's primary advocate in support of the oilfield services and
equipment sector. Her responsibilities also encompass the budgeting, forecasting
and financial performance of the organization. Prior to joining PESA, Ms. Beyer
served as Director, Member and Board Relations for the National Association of
Manufacturers from 2012 to 2014. Previously, Ms. Beyer served in leadership
roles at Burson-Marsteller Public Affairs and at a boutique public relations
firm for more than six years. Prior to her time in public affairs, Ms. Beyer
served in media relations capacities in The White House, Executive Office of the
President and on the Bush 2000 Presidential Campaign. She began her career in
legislative policy roles in the US Senate, US Department of State and US
Department of Housing. Ms. Beyer holds a Bachelor of Arts in Latin American
Studies and Spanish from the University of Texas at Austin.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
The Exhibit listed below is furnished as an Exhibit to this Current Report on
Form 8-K.
Exhibit No. Description
Letter from BDO USA LLP, dated June 10, 2020, regarding the change in
16.1 certifying accountant.
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