8-K: Dermata Therapeutics Changes Auditors Amid Going Concern Warning

Dermata Therapeutics, Inc. announced a change in its independent registered public accounting firm, dismissing Baker Tilly US, LLP and appointing CBIZ CPAs P.C., following audit reports that included a 'going concern' explanatory paragraph.

Summary

• Dermata Therapeutics, Inc. (DRMA) notified Baker Tilly US, LLP of their dismissal as the independent registered public accounting firm, effective January 31, 2026.
• The Company's Audit Committee approved the decision to dismiss Baker Tilly.
• Baker Tilly's audit reports for the fiscal years ended December 31, 2024 and 2023 included an explanatory paragraph relating to substantial doubt about the Company's ability to continue as a going concern.
• No disagreements on accounting principles or practices, financial statement disclosure, or auditing scope or procedures were reported with Baker Tilly during the two most recent fiscal years or through January 31, 2026.
• No reportable events, as defined in Item 304(a)(1)(v) of Regulation S-K, occurred with Baker Tilly.
• On February 2, 2026, the Audit Committee approved the appointment of CBIZ CPAs P.C. as the new independent registered public accounting firm.
• CBIZ CPAs P.C. previously served as the Company's independent registered public accounting firm from 2016 to 2023.
• No consultations on accounting principles or audit opinions occurred with CBIZ CPAs P.C. during the fiscal years ended December 31, 2024 and 2023 and the subsequent interim period through January 31, 2026, outside of their prior engagement.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this as a negative development primarily due to the explicit mention of 'substantial doubt about the Company's ability to continue as a going concern' in the previous audit reports, which overshadows the routine nature of an auditor change.

Positives

• No disagreements on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures were reported with the outgoing auditor, Baker Tilly US, LLP.
• No reportable events, as defined by Regulation S-K, occurred with Baker Tilly US, LLP during the specified periods.
• The newly appointed auditor, CBIZ CPAs P.C., has prior experience with Dermata Therapeutics, Inc., having served as their auditor from 2016 to 2023, which may facilitate a smoother transition.

Negatives

• Baker Tilly US, LLP's audit reports for the fiscal years ended December 31, 2024 and 2023 included an explanatory paragraph relating to substantial doubt about the Company's ability to continue as a going concern, indicating significant financial uncertainty.

Risks

• Substantial doubt about the Company's ability to continue as a going concern, as explicitly noted in Baker Tilly US, LLP's audit reports for the fiscal years ended December 31, 2024 and 2023.

Future Outlook

The filing does not contain specific forward-looking statements or guidance related to the company's operational or financial performance, beyond the change in auditors.

Management Comments

• Gerald T. Proehl, President, Chairman and Chief Executive Officer, signed the report on behalf of Dermata Therapeutics, Inc.

Industry Context

StockSavvy.ai notes that changes in independent auditors are not uncommon, especially for smaller or emerging growth companies. However, the explicit mention of a 'going concern' explanatory paragraph in the previous auditor's reports is a critical point that warrants close attention from investors, as it signals significant financial uncertainty. The re-engagement of a former auditor (CBIZ CPAs P.C.) could suggest a preference for a familiar relationship or cost considerations, but the underlying financial health remains the primary concern.

Comparison to Industry Standards

• StockSavvy.ai observes that the inclusion of a 'going concern' explanatory paragraph by an auditor is a serious indicator of financial distress, often leading to increased scrutiny from investors and lenders. While not unique to Dermata Therapeutics, Inc., it places the company in a category of higher risk compared to industry peers with stable financial footing.
• For instance, a company like Johnson & Johnson or Pfizer would rarely, if ever, have such a qualification, reflecting their robust financial health. Even smaller biotech firms typically strive to avoid such qualifications, often through capital raises or strategic partnerships, to maintain investor confidence.
• The absence of disagreements with the outgoing auditor is a positive, but it does not mitigate the 'going concern' issue itself, which is a more fundamental concern for the company's viability.

Corporate Governance

Stakeholder Impact

• Shareholders: May face increased uncertainty regarding the company's long-term viability due to the 'going concern' warning, potentially impacting share price and investment decisions.
• Investors: Will likely scrutinize future financial statements and disclosures more closely for signs of improved financial health or further distress, and may demand clearer strategies to address the going concern issue.
• Management: Must prioritize addressing the underlying financial issues that led to the 'going concern' qualification and demonstrate a clear path to sustainable operations.

Next Steps

• The new independent registered public accounting firm, CBIZ CPAs P.C., will commence its duties.
• The Company will need to address the underlying financial issues contributing to the 'going concern' doubt to ensure long-term viability.

Key Dates

Recommendation

The explicit 'going concern' warning from the previous auditor, despite the absence of disagreements, indicates severe financial distress and significant risk to the company's future operations. While the auditor change itself is procedural, the underlying financial health issue makes the stock a high-risk investment, warranting a sell recommendation for risk-averse investors.

Keywords

Dermata Therapeutics, DRMA, Auditor Change, SEC Filing, 8-K, Baker Tilly, CBIZ CPAs, Going Concern, Financial Reporting, Public Accounting Firm, Nasdaq Capital Market