8-K: Gryphon Digital Mining Changes Accounting Firms, Appoints RBSM LLP

Gryphon Digital Mining has dismissed Marcum LLP as its independent auditor and engaged RBSM LLP, effective April 26, 2024.

Summary

• Gryphon Digital Mining, Inc. has changed its independent registered public accounting firm from Marcum LLP to RBSM LLP.
• The dismissal of Marcum LLP was approved by the Audit Committee and the Board of Directors on April 26, 2024.
• The change was not due to any disagreements with Marcum regarding accounting principles, financial statement disclosures, or auditing scope.
• Marcum's audit reports for 2022 and 2023 did not contain any adverse opinions or disclaimers, but included an explanatory paragraph about the company's ability to continue as a going concern.
• RBSM LLP was engaged on April 26, 2024, to audit the company's consolidated financial statements for the fiscal year ending December 31, 2024, and to review the quarterly statements for the quarters ending March 31, 2024, June 30, 2024, and September 30, 2024.
• RBSM previously served as the independent auditor for Ivy Crypto, Inc. before its merger with Gryphon Digital Mining.

Sentiment

Score: 4

Explanation: The change in auditors is not inherently negative, but the going concern note from the previous auditor and the material weaknesses in internal control are concerning. The appointment of RBSM is a positive, but the overall sentiment is cautious.

Positives

• The change in auditors was not due to any disagreements on accounting or auditing matters.
• RBSM's prior experience with Ivy Crypto, Inc. could provide a smooth transition.

Negatives

• Marcum's audit reports included an explanatory paragraph about the company's ability to continue as a going concern, indicating potential financial instability.
• Material weaknesses in internal control over financial reporting were identified in the company's 2022 and 2023 annual reports.

Risks

• The company's ability to continue as a going concern is a risk factor that was highlighted by the previous auditor.
• Material weaknesses in internal control over financial reporting could lead to future issues.

Future Outlook

The company has engaged RBSM LLP to audit the 2024 fiscal year and review the quarterly statements for the first three quarters of 2024.

Management Comments

• The dismissal of Marcum was approved by the Audit Committee and the Board of Directors.
• The change in auditors was not due to any disagreements with Marcum.

Industry Context

Changes in auditors are not uncommon, but the circumstances surrounding the change, such as the going concern note, can be significant for investors. The appointment of RBSM, who previously audited Ivy Crypto, suggests a desire for continuity post-merger.

Comparison to Industry Standards

• The change of auditors is not unusual, but the reason for the change is important.
• The going concern note from Marcum is a red flag and is not typical for a company of this size.
• The appointment of RBSM, who previously audited Ivy Crypto, is a common practice after a merger.

Stakeholder Impact

• Shareholders may be concerned about the going concern note and material weaknesses in internal control.
• The change in auditors could impact investor confidence.

Next Steps

• RBSM will audit the company's consolidated financial statements for the fiscal year ending December 31, 2024.
• RBSM will review the company's quarterly consolidated financial statements for each of the quarters ending March 31, 2024, June 30, 2024, and September 30, 2024.

Key Dates

Keywords

auditor, accounting, Marcum LLP, RBSM LLP, financial statements, audit, going concern, internal control, Gryphon Digital Mining