COEP.NASDAQCoeptis Therapeutics Holdings, INC
10-Q/A: Coeptis Therapeutics Restates Q1 2023 Financials Due to Accounting Errors
Sentiment:
Quarterly Report Amendment
Coeptis Therapeutics Holdings, Inc. has filed an amended quarterly report to restate its financials for the first quarter of 2023 due to errors in accounting for a convertible note and a research agreement.
Capital raiseThe company's ability to continue as a going concern is dependent on obtaining additional financing.Management plans to raise additional capital through sales of equity or debt securities.The company may need to finance operations through equity offerings, debt financing, collaborations, strategic alliances, or other licensing arrangements.
Worse than expectedThe company's financials were restated due to accounting errors, resulting in a higher net loss and a lower cash balance than previously reported.The company's accumulated deficit is significant, indicating a history of losses and raising concerns about its financial stability.The company's disclosure controls and procedures were deemed ineffective, suggesting potential internal control weaknesses.
Summary
- Coeptis Therapeutics Holdings, Inc. has restated its financial statements for the three months ended March 31, 2023.
- The restatement was necessary due to errors in accounting for a $350,000 convertible promissory note issued for legal services and a $716,714 corporate research agreement with the University of Pittsburgh.
- The errors impacted the balance sheet, specifically accrued expenses, notes payable, and accumulated deficit, as well as research and development expenses on the income statement.
- The company's net loss for the quarter was restated to $7,957,833, or $0.40 per share.
- The company had cash of $2,106,832 as of March 31, 2023, compared to $3,791,302 at the end of 2022.
Sentiment
Score: 3
Explanation: The document reveals significant financial weaknesses, accounting errors, and ineffective internal controls, which are major concerns for investors. While there are some positive aspects related to the company's technology and partnerships, the overall sentiment is negative due to the financial instability and operational challenges.
Positives
- The company is actively exploring partnership opportunities for novel therapies.
- Coeptis is focused on developing innovative products and technologies in auto-immune disease and oncology.
- The company has a 50% profit share agreement for its CD38 assets, subject to certain adjustments.
Negatives
- The company has a significant accumulated deficit of $74,047,556.
- The company's cash balance decreased significantly during the quarter.
- The company's previously marketed products have been abandoned due to poor sales.
- The company's convertible note with Purple BioTech is currently in default.
- The company's disclosure controls and procedures were deemed ineffective as of March 31, 2023.
Risks
- The company has a history of losses and may not achieve profitability.
- The company's ability to continue as a going concern is dependent on obtaining additional financing.
- The company's disclosure controls and procedures are not effective, indicating potential internal control weaknesses.
- The company faces risks related to the development and commercialization of its products and technologies.
- The company's strategic agreements may not result in successful product development or revenue generation.
Future Outlook
The company expects to generate revenue from product sales and technology licensing, but the timing is uncertain. They will likely need additional funding to support operations and growth.
Management Comments
- Management believes that additional financing will result in improved operations and cash flow.
- Management is focused on identifying and investing in innovative products and technologies.
- Management is working to overcome operational challenges related to the COVID-19 pandemic.
Industry Context
The company is operating in the competitive pharmaceutical and biotechnology industries, focusing on innovative therapies in oncology and auto-immune diseases. The company is pursuing strategic partnerships to develop and commercialize its products.
Comparison to Industry Standards
- The company's financial performance is weak compared to industry standards, with significant losses and a large accumulated deficit.
- The company's cash position is low, raising concerns about its ability to fund operations and development activities.
- The company's reliance on external funding is a risk, as it may not be able to secure sufficient capital.
- The company's focus on innovative therapies aligns with industry trends, but its ability to compete with larger, more established companies is uncertain.
- The company's CD38 assets and CAR-T technology are in line with current industry interest in cell therapies, but the company's ability to successfully develop and commercialize these technologies remains to be seen.
Stakeholder Impact
- Shareholders are negatively impacted by the restatement and the company's financial instability.
- Employees may be concerned about the company's ability to continue operations.
- Customers and suppliers may be hesitant to engage with the company due to its financial challenges.
- Creditors may be concerned about the company's ability to repay its debts.
Next Steps
- The company needs to remediate the material weaknesses in its internal control over financial reporting.
- The company needs to secure additional financing to support its operations and development activities.
- The company needs to continue to pursue strategic partnerships to develop and commercialize its products.
- The company needs to focus on the development of its CD38 assets and CAR-T technology.
Key Dates
| Date | Description |
|---|---|
| 2017-07-12 | Coeptis Pharmaceuticals, LLC was formed. |
| 2018-11-27 | Bull Horn Holdings Corp. was originally incorporated. |
| 2020-01-31 | Date of initial Senior Secured Note agreements. |
| 2020-05-06 | Company received PPP loan proceeds. |
| 2020-07-08 | Company received EIDL loan. |
| 2020-11-23 | Coeptis Therapeutics, Inc. issued warrants to Coral Investment Partners, LP. |
| 2021-02-12 | Vinings Holdings, Inc. merged with Coeptis Pharmaceuticals, Inc. |
| 2021-05-28 | Coeptis Therapeutics, Inc. issued a warrant to Warrant Holder 1. |
| 2021-07-30 | Coeptis Therapeutics, Inc. issued a warrant to Warrant Holder 2. |
| 2021-09-22 | Coeptis Therapeutics, Inc. issued a warrant to Purple BioTech. |
| 2021-12-20 | Coeptis Therapeutics, Inc. issued a warrant to Warrant Holder 3. |
| 2022-01-28 | Coeptis Therapeutics, Inc. issued warrants to Warrant Holders 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, and 17. |
| 2022-03-02 | Warrants exercised by Warrant Holders 2, 10, and 13. |
| 2022-03-30 | Coeptis Therapeutics, Inc. issued warrants to Warrant Holders 18 and 19. |
| 2022-04-14 | Debt modification agreement and additional warrant issued to Warrant Holder 11. |
| 2022-06-27 | Warrants exercised by Warrant Holders 2 and 16. |
| 2022-07-13 | Warrant Holder 3 transferred warrants to Warrant Holders 4 and 5. |
| 2022-07-28 | Warrants exercised by Warrant Holder 1. |
| 2022-08-19 | Warrants exercised by Warrant Holders 3, 4, 10, 12, and 14. |
| 2022-08-31 | Coeptis entered into an exclusive license agreement with the University of Pittsburgh for CAR-T technology. |
| 2022-09-06 | Warrant Holder 9 transferred warrants to Warrant Holder 5. |
| 2022-09-13 | Warrants expired for Warrant Holders 2 and 3. |
| 2022-09-14 | Warrants exercised by Warrant Holders 8, 10, 12, 13, 15, 16, 17, and 19. |
| 2022-10-27 | Bull Horn Holdings Corp. domesticated from the British Virgin Islands to Delaware. |
| 2022-10-28 | Merger closed, and company name changed to Coeptis Therapeutics Holdings, Inc. |
| 2023-01-03 | Coeptis Therapeutics, Inc. issued warrants to Warrant Holders 20 and 21. |
| 2023-01-25 | Coeptis entered into a corporate research agreement with the University of Pittsburgh. |
| 2023-03-31 | End of the restated financial reporting period. |
| 2023-05-12 | Date of share count for the report. |
| 2023-05-15 | Original Form 10-Q filed with the SEC. |
| 2024-03-19 | Management concluded its evaluation of accounting errors. |
| 2024-03-25 | Date of the amended report. |
Keywords
restatement, financials, accounting errors, convertible note, research agreement, CD38 assets, warrants, biotechnology, pharmaceutical, CAR-T, oncology, auto-immune
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