8-K: Cell Source, Inc. Announces Auditor Change Following Acquisition, Prior Audit Reports Highlight Going Concern Doubt

Cell Source, Inc. has appointed CBIZ CPAs P.C. as its new independent registered public accounting firm for the fiscal year ended December 31, 2024, following the resignation of Marcum LLP due to an acquisition, with previous audit reports from Marcum including an explanatory paragraph regarding substantial doubt about the company's ability to continue as a going concern.

Summary

• Cell Source, Inc. (the "Company") announced a change in its independent registered public accounting firm.
• Marcum LLP ("Marcum") resigned as the Company's auditor on June 26, 2025.
• CBIZ CPAs P.C. ("CBIZ CPAs") was engaged as the new independent registered public accounting firm for the fiscal year ended December 31, 2024, effective June 26, 2025.
• The change was a result of CBIZ CPAs acquiring the attest business of Marcum LLP, effective November 1, 2024.
• The Audit Committee of the Company's Board of Directors approved the engagement of CBIZ CPAs.
• Marcum's audit reports for the fiscal years ended December 31, 2023, and 2022, included an explanatory paragraph relating to substantial doubt about the Company's ability to continue as a going concern.
• Marcum did not provide an audit report on the Company's consolidated financial statements for the year ended December 31, 2024.
• There were no disagreements or reportable events with Marcum during the fiscal years ended December 31, 2024, 2023, 2022, and the subsequent interim period through June 26, 2025.
• Neither the Company nor anyone on its behalf consulted with CBIZ CPAs regarding accounting principles or audit opinions prior to their engagement.

Sentiment

Score: 4

Explanation: The sentiment is slightly negative due to the explicit mention of 'substantial doubt about the Company's ability to continue as a going concern' in previous audit reports, which is a significant red flag for investors. While the auditor change itself is neutral and due to an acquisition, the context provided by the previous audit qualifications weighs down the overall sentiment.

Positives

• The transition to the new auditor, CBIZ CPAs, was a result of an acquisition of Marcum's attest business, indicating a standard business transaction rather than a dispute.
• There were no disagreements or reportable events with the former auditor, Marcum LLP, concerning accounting principles, financial statement disclosure, or auditing scope/procedure.

Negatives

• Marcum LLP's audit reports for the fiscal years ended December 31, 2023, and 2022, included an explanatory paragraph indicating substantial doubt about the Company's ability to continue as a going concern.
• Marcum LLP did not provide an audit report for the fiscal year ended December 31, 2024, meaning the 2024 financials have not yet been audited by the outgoing firm.

Risks

• The Company faces a significant risk related to its ability to continue as a going concern, as highlighted by the explanatory paragraph in Marcum's previous audit reports for 2023 and 2022.
• Uncertainty regarding the Company's financial viability could impact investor confidence and access to future capital.

Future Outlook

The document primarily addresses a change in the Company's independent registered public accounting firm. CBIZ CPAs P.C. has been engaged to audit the Company's financial statements for the fiscal year ended December 31, 2024. No other forward-looking statements regarding the Company's operational or financial performance are provided.

Management Comments

• Itamar Shimrat, President and Chief Executive Officer, signed the Form 8-K on behalf of Cell Source, Inc.

Industry Context

The change in auditor is a direct result of consolidation within the accounting industry, where CBIZ CPAs acquired a significant portion of Marcum LLP's attest business. This type of transition is common following mergers and acquisitions among professional services firms and does not necessarily reflect issues specific to the client company, Cell Source, Inc., beyond the standard administrative process.

Corporate Governance

Stakeholder Impact

• Shareholders: The reiteration of the 'going concern' doubt could negatively impact shareholder confidence and the Company's stock valuation.
• Creditors: Potential concerns for creditors regarding the Company's long-term financial stability.

Next Steps

• CBIZ CPAs P.C. will proceed with auditing Cell Source, Inc.'s consolidated financial statements for the fiscal year ended December 31, 2024.

Key Dates

Recommendation

Keywords

Auditor Change, SEC Filing, Form 8-K, Cell Source Inc., Marcum LLP, CBIZ CPAs P.C., Independent Registered Public Accounting Firm, Going Concern, Financial Reporting, Corporate Governance, Audit Committee