8-K: Kisses From Italy Inc. Dismisses Auditor and Receives Extension to Regain OTCQB Compliance

Kisses From Italy Inc. has dismissed its auditor, BF Borgers CPA P.C., and received an extension from OTC Markets to regain compliance with listing standards.

Summary

• Kisses From Italy Inc. dismissed BF Borgers CPA P.C. as its independent auditor effective May 3, 2024.
• The decision to change auditors was approved by the company's board of directors.
• BF Borgers had been the company's auditor since 2018.
• The company's previous audit reports did not contain any adverse opinions, disclaimers, or modifications, except for explanatory paragraphs regarding the company's ability to continue as a going concern.
• There were no disagreements between the company and BF Borgers on accounting or auditing matters.
• The SEC has advised that BF Borgers is not currently permitted to practice before the SEC.
• The company is searching for a new auditor and will announce the appointment in a future 8-K filing.
• The company received a notice from OTC Markets on February 9, 2024, that it no longer meets the OTCQB listing standards due to its share price closing below $0.01 for more than 30 consecutive days.
• OTC Markets initially granted the company until May 9, 2024, to regain compliance.
• On May 6, 2024, OTC Markets granted the company an extension until July 12, 2024, to regain compliance with the minimum bid price requirement.
• The company also received an extension until July 12, 2024, to file its annual report for 2023 and quarterly report for the period ended March 31, 2024.
• The company intends to regain compliance with the OTCQB standards by July 12, 2024.

Sentiment

Score: 3

Explanation: The document contains several negative developments, including the dismissal of the auditor and the risk of delisting, which significantly outweigh any positive aspects. The sentiment is therefore negative.

Positives

• The company has been granted an extension to regain compliance with OTCQB listing standards, providing more time to address the share price issue.
• The company is actively searching for a new independent auditor.

Negatives

• The company's share price has fallen below the minimum bid price of $0.01 for more than 30 consecutive days, leading to a notice of non-compliance from OTC Markets.
• The company has dismissed its auditor, BF Borgers, which is not permitted to practice before the SEC.

Risks

• The company may not be able to regain compliance with the OTCQB listing standards by July 12, 2024, which could result in delisting.
• The company may face challenges in finding a new auditor in a timely manner.
• The company's financial statements may be delayed due to the change in auditors.

Future Outlook

The company intends to regain compliance with the OTCQB standards by July 12, 2024, and is actively searching for a new independent auditor.

Management Comments

• The decision to change independent registered public accounting firms was made with the recommendation and approval of the Company's board of directors.
• The Company intends to regain compliance with these OTCQB Standards by July 12, 2024.

Industry Context

The dismissal of an auditor and the potential delisting from an exchange are significant events that can negatively impact investor confidence. The company's situation highlights the challenges faced by smaller companies in maintaining compliance with listing requirements.

Comparison to Industry Standards

• The dismissal of an auditor is not a common occurrence and can raise concerns about a company's financial reporting practices.
• Companies listed on the OTCQB market are generally smaller and may face more challenges in maintaining compliance with listing standards compared to companies listed on major exchanges like the NYSE or NASDAQ.
• The extension granted by OTC Markets is not unusual for companies facing compliance issues, but it does not guarantee that the company will be able to regain compliance.

Stakeholder Impact

• Shareholders may be concerned about the company's ability to regain compliance with listing standards and the potential for delisting.
• The change in auditors may raise concerns about the reliability of the company's financial statements.
• Employees may be affected by the uncertainty surrounding the company's future.

Next Steps

• The company will appoint a new independent registered public accounting firm.
• The company will file a current report on Form 8-K disclosing the appointment of the new auditor.
• The company will work to regain compliance with the OTCQB listing standards by July 12, 2024.
• The company will file its annual report for 2023 and quarterly report for the period ended March 31, 2024 by July 12, 2024.

Key Dates

Keywords

auditor, OTCQB, compliance, BF Borgers, SEC, listing standards, minimum bid price, financial statements, delisting