Business Context and Reporting Period
Pulse Biosciences, Inc. (Nevada) filed this Form 8-K on April 11, 2018, reporting events occurring on April 6, 2018. The Company is an emerging growth company.
Key Financial Metrics
This filing does not contain revenue, profit, cash flow, margin, debt, or liquidity metrics. It focuses exclusively on corporate governance and accounting firm changes.
Material Changes
- Dismissal of Auditor: The Audit Committee terminated the engagement of Gumbiner Savett Inc. effective April 6, 2018.
- Appointment of New Auditor: Deloitte & Touche LLP was appointed as the new independent registered public accounting firm effective April 6, 2018.
- Historical Audit Issues: Gumbiner's reports for fiscal years 2016 and 2017 contained no adverse opinions, disclaimers, or qualifications. No disagreements regarding accounting principles or auditing scope occurred during the two most recent fiscal years or the interim period through April 6, 2018.
Management Commentary, Risks, and Contingencies
Remediation of Material Weakness: The Company disclosed a material weakness in internal controls over financial reporting identified during the 2016 audit. This weakness involved a lack of effective controls to restrict access and segregate duties, specifically allowing personnel to prepare and post journal entries without independent review due to limited staffing.
Remediation Status: The Company executed a remediation plan in 2017, which included documenting controls, implementing independent review of journal entries, increasing accounting staff to segregate duties, and training personnel. The Company believes this material weakness was remediated as of December 31, 2017.
Consultations: The Company did not consult with Deloitte regarding any matters described in Items 304(a)(2)(i) and (ii) of Regulation S-K during the two most recent fiscal years or the interim period.
Investor Verification Checklist
- Verify the content of the letter from Gumbiner Savett Inc. (Exhibit 16.01) to confirm they agree with the Company's statements regarding the dismissal and lack of disagreements.
- Confirm the effective date of Deloitte & Touche LLP's engagement and any transition arrangements.
- Review subsequent filings to ensure the remediation of the 2016 material weakness remains effective under the new auditor's review.