Business Context and Reporting Period
This Form 8-K Current Report was filed by Aptevo Therapeutics Inc. on August 25, 2020. The filing addresses a change in the Company's independent registered public accounting firm. Aptevo is a Delaware corporation with principal executive offices in Seattle, Washington, and its common stock trades on The Nasdaq Stock Market under the symbol "APVO."
Key Financial Metrics
This filing does not contain specific revenue, profit, cash flow, or debt figures for the current period. However, it references the Company's financial condition as described in prior audit reports:
- Going Concern: The Company has suffered recurring losses from operations and has a working capital deficiency.
- Substantial Doubt: Prior audit reports stated that substantial doubt exists about the Company's ability to continue as a going concern.
- Accounting Changes: The Company changed its method of accounting for leases in 2019 due to the adoption of ASU Topic 842.
Material Changes
The primary material change reported is the dismissal of the previous independent registered public accounting firm and the appointment of a new one:
- Dismissal: On August 25, 2020, the Audit Committee dismissed Ernst & Young LLP, effective immediately. The stated reason for this decision was to reduce ongoing costs related to the Company's annual audit.
- Appointment: On August 26, 2020, the Audit Committee appointed Moss Adams LLP as the new independent registered public accounting firm for the fiscal year ended December 31, 2020.
- Audit History: There were no disagreements with Ernst & Young regarding accounting principles, practices, or auditing scope during the two most recent fiscal years or the subsequent interim period. No "reportable events" occurred.
Guidance, Outlook, and Risks
This filing does not provide forward-looking guidance, revenue outlook, or management commentary on future business strategy. The primary risk highlighted is the existing "substantial doubt" regarding the Company's ability to continue as a going concern, as noted in the 2019 financial statements. The filing confirms that the change in auditors was not due to any disagreement or reportable event.
Investor Verification Checklist
- Verify the rationale for switching from a Big Four firm (Ernst & Young) to a smaller firm (Moss Adams) beyond the stated cost reduction.
- Review the most recent 10-K or 10-Q filings to assess the current status of the "going concern" warning and working capital deficiency.
- Confirm the terms of engagement with Moss Adams LLP and any potential impact on the timing of future financial reporting.
- Examine the letter from Ernst & Young (Exhibit 16.1) to ensure they concur with the Company's statements regarding the dismissal.