Certara, Inc. current report, 24 March 2022

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Certara, Inc. Form 8-K Summary

Business Context and Reporting Period

Certara, Inc. filed a Form 8-K under Item 4.01 regarding a change in its independent registered public accounting firm. The reported event occurred on March 24, 2022; the filing was signed March 30, 2022. Certara is incorporated in Delaware and its common stock trades on Nasdaq under the symbol CERT.

Key Financial Metrics and Liquidity

This filing does not provide revenue, profit, cash flow, margins, debt, liquidity, or other operating and financial metrics.

Material Changes Versus the Prior Comparable Period

  • The Audit Committee and Board approved the dismissal of CohnReznick LLP as independent registered public accounting firm upon filing the Form 10-Q for the quarter ending March 31, 2022.
  • The Company approved the engagement of RSM US LLP as independent registered public accounting firm for the fiscal year ending December 31, 2022, contingent on RSM completing its acceptance procedures.
  • CohnReznick’s audit reports for the years ended December 31, 2021 and 2020 contained no adverse or disclaimer opinion and were not qualified or modified, other than an explanatory paragraph concerning adoption of ASC Topic 842, Leases, effective January 1, 2021.
  • There were no reported disagreements with CohnReznick regarding accounting principles, financial statement disclosure, or audit scope and procedures.

Guidance, Outlook, Risks, Contingencies, and Unusual Items

  • CohnReznick issued an adverse opinion on Certara’s internal control over financial reporting as of December 31, 2021 because of a material weakness in information technology general controls over a cloud-based software system supporting project setup and customer-service time submissions.
  • The filing does not provide a remediation timetable or describe whether the material weakness has been remediated.
  • RSM’s engagement was contingent on acceptance procedures. If RSM does not accept the engagement, Certara stated that it will amend the report.
  • Neither Certara nor anyone acting on its behalf consulted RSM during the relevant two-year period and subsequent interim period regarding accounting principles, audit opinions, disagreements, or reportable events.

Facts Investors Should Verify

  • Whether RSM completed its acceptance procedures and formally became Certara’s independent registered public accounting firm.
  • The details, remediation status, and potential financial reporting implications of the information technology general-control material weakness.
  • Any subsequent disclosures regarding internal control over financial reporting in Certara’s March 31, 2022 Form 10-Q and later filings.
  • The CohnReznick letter filed as Exhibit 16.1 and whether it agrees with Certara’s disclosures.