Business Context and Reporting Period
TriSalus Life Sciences, Inc. filed this Form 8-K on April 12, 2024, under Item 4.01 to report a change in its independent registered public accounting firm. The filing covers the fiscal years ended December 31, 2023 and 2022, and the subsequent interim period through April 12, 2024.
Key Financial and Reporting Matters
- KPMG LLP’s audit reports on the Company’s 2023 and 2022 consolidated financial statements contained an explanatory paragraph regarding substantial doubt about the Company’s ability to continue as a going concern.
- The going-concern uncertainty was attributed to recurring operating losses and the need to raise additional equity or debt to fund operations.
- The filing does not provide current revenue, profit, cash flow, margin, debt, cash balance, or liquidity amounts.
- KPMG’s audit opinions were not adverse or disclaimed and were not qualified or modified for audit scope, accounting principles, or uncertainty, other than the going-concern explanatory paragraph.
Material Changes Versus the Prior Comparable Period
- On April 12, 2024, the Audit Committee dismissed KPMG as independent registered public accounting firm.
- On the same date, the Audit Committee appointed Grant Thornton LLP as independent registered public accounting firm for the fiscal year ending December 31, 2024.
- The Company reported no disagreements with KPMG regarding accounting principles, financial statement disclosure, or audit scope or procedure during the covered periods.
- The Company also reported no reportable events other than the material weaknesses disclosed in its 2023 Form 10-K.
Guidance, Outlook, Risks, and Unusual Items
- The filing contains no financial guidance or operating outlook.
- The principal disclosed risk is substantial doubt regarding the Company’s ability to continue as a going concern absent additional equity or debt financing.
- Material weaknesses in internal control over financial reporting involved insufficient trained resources; accounting for the Standby Equity Purchase Agreement with YA II PN, Ltd.; patent costs; certain research and development accruals; the 2022 business combination; valuation of warrants, tranche rights, and Series B-2 preferred stock financing obligations; and migration of equity-management data and fair-value assumptions for stock compensation.
- The Company stated that neither it nor anyone acting on its behalf consulted Grant Thornton regarding specified accounting transactions, potential audit opinions, disagreements, or reportable events before the appointment.
- KPMG was requested to provide a letter to the SEC regarding the Company’s disclosures. Exhibit 16.1 is identified as KPMG’s letter dated April 15, 2024, while the Form 8-K is dated April 12, 2024 and signed April 15, 2024.
Facts Investors Should Verify
- Review the 2023 Form 10-K for the Company’s actual cash position, recurring losses, financing needs, debt and equity arrangements, and management’s going-concern plans.
- Assess whether the disclosed material weaknesses have been remediated and whether they could affect the reliability or timing of future financial reporting.
- Read Exhibit 16.1 to determine whether KPMG agrees with the Company’s statements regarding the auditor change.
- Monitor the transition to Grant Thornton and any impact on the filing of future financial statements.
- Verify the status and terms of the Standby Equity Purchase Agreement and other potential financing sources.