8-K: Silvaco Group Appoints Baker Tilly as New Auditor Following Moss Adams Merger

Silvaco Group, Inc. announced the appointment of Baker Tilly US, LLP as its new independent registered public accounting firm, succeeding Moss Adams LLP, following the merger of Moss Adams with Baker Tilly.

Summary

• Moss Adams LLP, Silvaco Group, Inc.'s independent registered public accounting firm, merged with Baker Tilly US, LLP on June 3, 2025, with combined audit practices now operating as Baker Tilly.
• Moss Adams resigned as auditors, and the Audit Committee of Silvaco Group, Inc.'s Board of Directors approved the appointment of Baker Tilly as the successor on July 8, 2025.
• Prior to and shortly after the Combination, Baker Tilly Advisory Group, LP (BTAG), an affiliate of Baker Tilly, provided non-attest services to Silvaco Group, Inc. that would generally be prohibited under auditor independence standards.
• These prohibited services included tax provision calculations for the year ended December 31, 2024, and the quarter ended March 31, 2025, and third-party software license subscription and helpdesk support.
• Prohibited services were promptly terminated prior to or shortly after the Combination.
• The Audit Committee determined Baker Tilly is sufficiently objective and impartial to serve as the independent registered public accounting firm for the fiscal year ended December 31, 2025, based on Baker Tilly's representations regarding minimal interaction between audit and non-attest teams and future separation.
• Moss Adams' audit reports for the years ended December 31, 2024, and 2023, did not contain an adverse opinion or a disclaimer of opinion, nor were they qualified or modified.
• No disagreements with Moss Adams were reported, except for a previously disclosed material weakness in internal control over financial reporting related to a lack of formalized accounting processes and insufficient personnel.

Sentiment

Score: 6

Explanation: The change in auditor is due to a merger, which is a neutral event. The company proactively addressed potential independence issues by terminating prohibited services and establishing clear separation protocols. However, the existing material weakness in internal controls is a negative factor, preventing a higher score.

Positives

• The Audit Committee, after detailed evaluation and consultation, determined Baker Tilly is sufficiently objective and impartial to serve as the independent registered public accounting firm.
• Baker Tilly has committed to maintaining a clear separation between legacy Moss Adams audit engagement team members and legacy Baker Tilly non-attest engagement team members for the December 31, 2025 audit.
• Prohibited non-attest services provided by Baker Tilly's affiliate were promptly terminated.
• Moss Adams' audit reports for 2023 and 2024 did not contain adverse opinions, disclaimers, or qualifications regarding uncertainty, audit scope, or accounting principles.

Negatives

• Baker Tilly's affiliate, BTAG, provided non-attest services to Silvaco Group, Inc. that would generally be prohibited under auditor independence standards if Baker Tilly concurrently served as the auditor.
• A material weakness in internal control over financial reporting was previously disclosed, related to a lack of formalized accounting processes and an insufficient complement of personnel with technical accounting and financial reporting knowledge.

Risks

• Potential for perceived or actual impairment of auditor independence due to prior provision of prohibited non-attest services by Baker Tilly's affiliate, despite termination and mitigation efforts.
• Ongoing material weakness in internal control over financial reporting, which could impact the reliability of financial statements.

Future Outlook

The Audit Committee was informed that legacy Baker Tilly personnel will not have access to the technology platform used for the Company's audit engagement for the fiscal year ended December 31, 2025, and there will be a clear separation of audit and non-attest engagement team members.

Management Comments

• The Current Report on Form 8-K was signed by Dr. Babak A. Taheri, Chief Executive Officer of Silvaco Group, Inc.

Industry Context

This event reflects a common occurrence in the accounting industry where mergers between large firms necessitate changes in client relationships to maintain auditor independence, particularly when one firm's affiliate has provided non-attest services to a client of the other.

Corporate Governance

Stakeholder Impact

• Shareholders: The change in auditor and the disclosure of the material weakness in internal controls are relevant for shareholders assessing the company's financial reporting integrity and risk profile. The proactive steps taken to ensure auditor independence aim to maintain investor confidence.

Next Steps

• Completion of the audit of the Company's December 31, 2025 financial statements by Baker Tilly.

Key Dates

Recommendation

Keywords

SEC filing, Form 8-K, auditor change, independent registered public accounting firm, Moss Adams, Baker Tilly, audit committee, auditor independence, material weakness, internal control over financial reporting, corporate governance, financial reporting, Silvaco Group