Item 4.01. Change in Registrant's Certifying Accountant.
(a) Dismissal of Independent Registered Accounting Firm
Prior to the Merger, Millendo Therapeutics, Inc.'s consolidated financial
statements were audited by Ernst & Young LLP ("EY"). For accounting purposes,
the Merger is treated as a reverse recapitalization and, as such, the historical
financial statements of the accounting acquirer, Tempest, which have been
audited by Deloitte & Touche LLP ("Deloitte"), will become the historical
consolidated financial statements of the Company. In a reverse recapitalization,
a change of accountants is presumed to have occurred unless the same accountant
audited the pre-transaction financial statements of both the legal acquirer and
the accounting acquirer.
On July 1, 2021, the Audit Committee of the board of directors (the "Board") of
the Company Board dismissed Deloitte as the Company's independent registered
public accounting firm.
The reports of Deloitte on the Company's financial statements for the years
ended December 31, 2020 and 2019 did not contain an adverse opinion or
disclaimer of opinion, nor were they qualified or modified as to uncertainty,
audit scope, or accounting principles, except that, the report on the Company's
financial statements for the year ended December 31, 2020 expressed an
unqualified opinion and included an explanatory paragraph relating to
substantial doubt about the Company's ability to continue as a going concern.
During the fiscal years ended December 31, 2020 and 2019, and the subsequent
interim period through July 1, 2021, there were no disagreements (as defined in
Item 304(a)(1)(iv) of Regulation S-K and the related instructions) with Deloitte
on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedures, which disagreements if not resolved
to the satisfaction of Deloitte would have caused Deloitte to make reference
thereto in its reports on the financial statements for such years.
For the fiscal years ended December 31, 2020 and 2019, there were no reportable
events (as described in Item 304(a)(1)(v) of Regulation S-K), except that the
Company reported material weaknesses in its internal control over financial
reporting during such period. In connection with the Company's evaluation of the
effectiveness of its internal control over financial reporting (as defined in
Rule 13a-15(f) under the Securities Exchange Act of 1934) as of December 31,
2020, the Company concluded that its internal control over financial reporting
was not effective as of December 31, 2020 because the Company (i) did not have
sufficient resources with appropriate knowledge and expertise to design,
implement, document and operate effective internal controls over financial
reporting and (ii) did not design and implement controls surrounding review of
clinical trial expenses, including the evaluation of the terms of its clinical
trial contracts-specifically, the Company failed to properly review and evaluate
the progress of expenses incurred in its clinical trial contracts that resulted
in the inaccurate accrual of clinical trial expenses. The material weaknesses
did not result in any identified material misstatements to the Company's
financial statements. The Company is actively recruiting additional accounting
personnel with appropriate experience, certification, education and training as
a component of its plans to remediate the material weaknesses. The Company also
plans to design and implement controls related to review of clinical trial
expenses to properly evaluate progress of expense incurred in clinical trial
contracts.
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The Company requested that Deloitte furnish a letter addressed to the Securities
and Exchange Commission ("SEC") stating whether or not it agrees with the above
statements. Deloitte responded with a letter dated July 1, 2021, a copy of which
is filed as Exhibit 16.1 to this Form 8-K/A,stating that Deloitte is in
agreement with the statements made in this Item 4.01(a).
(b) Engagement of New Independent Registered Accounting Firm
On July 1, 2021, the Audit Committee of the Company Board elected to continue to
engage EY, an independent registered accounting firm, as the Company's
independent registered public accounting firm.
During the fiscal years ended December 31, 2020 and December 31, 2019, and the
subsequent interim period through July 1, 2021, neither the Company, nor anyone
acting on its behalf, consulted with EY regarding (i) the application of
accounting principles to a specified transaction, either completed or proposed,
or the type of audit opinion that may be rendered on the Company's financial
statements, and EY did not provide either a written report or oral advice to the
Company that was an important factor considered by the Company in reaching a
decision as to the accounting, auditing or financial reporting issue, or
(ii) any matter that was either the subject of a disagreement (as defined in
Item 304(a)(1)(iv) of Regulation S-K and the related instructions) or a
reportable event (as described in Item 304(a)(1)(v) of Regulation S-K).
Item 9.01. Financial Statements and Exhibits.
(a) Financial Statements
The audited financial statements of Tempest as of December 31, 2020 and 2019 and
for the years then ended required by Item 9.01(a) were previously filed with the
SEC as part of the Company's Registration Statement on Form S-4, as amended
(File No. 333-255198) and are incorporated herein by reference.
The unaudited condensed interim financial statements of Tempest as of March 31,
2021 and for the three months ended March 31, 2021 and 2020 are attached as
Exhibit 99.1 and are incorporated herein by reference.
(b) Pro Forma Financial Information
The unaudited pro forma condensed combined financial information of the Company
as of March 31, 2021 and for the three months ended March 31, 2021 are attached
as Exhibit 99.2 and are incorporated herein by reference
(d) Exhibits.
Exhibit
Number Exhibit Description
16.1 Letter dated July 1, 2021 from Deloitte & Touche LLP to the
Securities and Exchange Commission.
99.1 Unaudited condensed interim financial statements of Tempest as of
March 31, 2021 and for the three months ended March 31, 2021 and 2020
99.2 Unaudited pro forma condensed combined financial information of the
Company as of March 31, 2021 and for the three months ended March 31,
2021
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