Business Context and Reporting Period
This Form 8-K is a current report filed by Savara Inc. (formerly Mast Therapeutics, Inc.) on May 25, 2017. The filing addresses a change in the company's independent registered public accounting firm. The report covers events occurring between May 25, 2017, and May 30, 2017.
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 Auditor: On May 26, 2017, the company dismissed Mayer Hoffman McCann P.C. (MHM) as its independent registered public accounting firm.
- Engagement of New Auditor: On May 25, 2017, the Audit Committee approved the engagement of PricewaterhouseCoopers LLP (PwC) as the new independent registered public accounting firm for the fiscal year ending December 31, 2017.
- Audit History: PwC previously served as the company's principal accountant from June 28, 2011, to March 30, 2016, and audited financial statements for the years 2011 through 2015. PwC also served as the auditor for Aravas Inc. prior to the company's business combination with Aravas.
Management Commentary, Risks, and Contingencies
Going Concern Uncertainty: The report notes that MHM's audit report for the year ended December 31, 2016, included an explanatory paragraph regarding the uncertainty of the company's ability to continue as a going concern. However, the report did not contain an adverse opinion, disclaimer, or qualification regarding accounting principles or audit scope.
No Disagreements: Management confirmed there were no disagreements with MHM on accounting principles, practices, or auditing scope during the 2016 fiscal year or the interim period through May 26, 2017. Similarly, there were no reportable events.
Consultation with New Auditor: The company confirmed that no consultations occurred with PwC regarding accounting principles or audit opinions during the 2015 and 2016 fiscal years or the interim period leading up to the engagement.
Important Facts for Investor Verification
- Verify the reasons for the dismissal of Mayer Hoffman McCann P.C., as the filing cites no disagreements but notes a prior "going concern" qualification.
- Confirm the status of the company's liquidity and ability to continue as a going concern, given the explanatory paragraph in the 2016 audit report.
- Review the letter from Mayer Hoffman McCann P.C. (Exhibit 16.1) to ensure the former auditor agrees with the company's statements regarding the dismissal.
- Monitor the transition of audit responsibilities to PricewaterhouseCoopers LLP for the 2017 fiscal year.