8-K: Kairos Pharma Changes Auditors, Appointing Weinberg and Company to Replace Marcum LLP

Kairos Pharma, Ltd. has replaced Marcum LLP with Weinberg and Company, P.A. as its independent registered public accounting firm, effective April 23, 2025.

Summary

• Kairos Pharma, Ltd. announced the selection of Weinberg and Company, P.A. as their new independent registered public accounting firm on April 23, 2025.
• This decision led to the dismissal of Marcum LLP, the previous auditor, also effective April 23, 2025.
• Marcum's audit report for the years ended December 31, 2024 and 2023 contained no adverse opinion or disclaimer of opinion, nor was it qualified or modified as to uncertainty, audit scope or accounting principles, except that the audit report on the financial statements of the Company for the year ended December 31, 2023 was modified as to contain uncertainty about the Company's ability to continue as a going concern.
• The company reported no disagreements with Marcum on accounting principles, practices, financial statement disclosure, or auditing scope or procedures.
• Material weaknesses in internal control over financial reporting were disclosed in the company's Annual Report on Form 10-K for the years ended December 31, 2024 and 2023.
• Kairos Pharma did not consult with Weinberg regarding accounting principles or audit opinions prior to their appointment.
• Marcum has reviewed the company's statements regarding their dismissal and agrees with the statements concerning their firm.

Sentiment

Score: 5

Explanation: The change in auditors is a neutral event, but the prior 'going concern' opinion and material weaknesses in internal control are concerning.

Positives

• Marcum LLP agreed with the statements made by Kairos Pharma, Ltd. regarding their dismissal.

Negatives

• Marcum's audit report for the year ended December 31, 2023, included a 'going concern' opinion, indicating uncertainty about the company's ability to continue operating.
• The company disclosed material weaknesses in internal control over financial reporting for the fiscal years ended December 31, 2024 and 2023.

Risks

• The material weaknesses in internal control over financial reporting could indicate potential issues with the reliability of the company's financial statements.
• The 'going concern' opinion in Marcum's audit report for 2023 raises concerns about the company's financial stability.

Future Outlook

The company will have Weinberg and Company, P.A. review its Quarterly Reports on Form 10-Q and Annual Report on Form 10-K for the fiscal year ending December 31, 2025.

Industry Context

Changes in auditors are not uncommon, but they can sometimes signal underlying issues with a company's financial reporting or internal controls. Investors often scrutinize these changes to understand the reasons behind them and assess any potential risks.

Comparison to Industry Standards

• Auditor changes are a regular occurrence in the pharmaceutical industry, often driven by factors such as audit fees, expertise in specific areas (e.g., clinical trials, regulatory compliance), or the desire for a fresh perspective.
• Companies like Pfizer, Johnson & Johnson, and Merck, for example, periodically review their audit arrangements to ensure they align with their evolving needs.
• The presence of a 'going concern' opinion, however, is a more serious matter and warrants careful consideration, as it suggests the auditor has substantial doubt about the company's ability to continue as a viable business.

Stakeholder Impact

• Shareholders may be concerned about the change in auditors and the previously reported 'going concern' opinion and material weaknesses in internal control.
• Employees may experience uncertainty due to the company's financial challenges.
• Creditors may reassess their risk exposure to the company.

Key Dates

Keywords

auditor, Weinberg and Company, Marcum LLP, independent registered public accounting firm, financial reporting, Kairos Pharma