8-K: Limitless X Holdings Inc. Changes Accounting Firms Following SEC Order Against Previous Auditor

Limitless X Holdings Inc. has replaced its independent auditor, BF Borgers CPA PC, with M&K CPAS, PLLC, effective May 9, 2024, following an SEC order against BF Borgers.

Summary

• Limitless X Holdings Inc. dismissed BF Borgers CPA PC as their independent registered public accounting firm on May 9, 2024.
• The company engaged M&K CPAS, PLLC as the new independent registered public accounting firm on the same day.
• The decision to change auditors was made with the recommendation and approval of the Board of Directors.
• BF Borgers' audit reports for the fiscal years ended December 31, 2023 and 2022 did not contain any adverse opinions, disclaimers, qualifications, or modifications.
• There were no disagreements between the company and BF Borgers on accounting principles, financial statement disclosure, or auditing scope during the fiscal years ended December 31, 2023 and 2022, and the subsequent interim period.
• There were no reportable events as defined by Item 304(a)(1)(v) of Regulation S-K during the same periods.
• BF Borgers is not permitted to practice before the SEC due to an SEC order issued on May 3, 2024.

Sentiment

Score: 5

Explanation: The change in auditors is a negative event due to the SEC order, but the company acted quickly and the previous audits were clean. This results in a neutral sentiment.

Positives

• The company acted swiftly to replace their auditor after the SEC order against BF Borgers.
• The previous audit reports from BF Borgers were clean, indicating no prior issues with the company's financials.
• The transition to a new auditor was approved by the Board of Directors.

Negatives

• The change of auditors was necessitated by an SEC order against the previous auditor, BF Borgers, which is a negative event for the previous auditor.
• The company is unable to obtain a letter from BF Borgers confirming their agreement with the statements in the report due to the SEC order.

Risks

• The SEC order against BF Borgers could raise concerns about the reliability of past audits performed by the firm, although the reports were clean.
• The transition to a new auditor could introduce some short-term uncertainty and additional costs.

Management Comments

• The decision to change independent registered public accounting firms was made with the recommendation and approval of the Board of Directors of the Company.

Industry Context

The change in auditors is a direct result of regulatory action against BF Borgers, which is not uncommon in the accounting industry. Companies must ensure their auditors are in good standing with regulatory bodies to maintain investor confidence.

Comparison to Industry Standards

• The situation is unusual as it is not typical for a company to change auditors due to an SEC order against the auditor.
• Most companies change auditors due to disagreements or strategic reasons, not because the auditor is barred from practicing before the SEC.
• The fact that the previous audits were clean is a positive sign, but the SEC order against BF Borgers is a significant concern.

Legal Proceedings

• BF Borgers is not currently permitted to appear or practice before the SEC for reasons described in the U.S. Securities and Exchange Commissions (the SEC) Order Instituting Public Administrative and Cease-and-Desist Proceedings.

Stakeholder Impact

• Shareholders may have concerns about the reliability of past audits performed by BF Borgers, despite the clean reports.
• The company will need to ensure a smooth transition to the new auditor to maintain investor confidence.

Key Dates

Keywords

auditor, accounting firm, BF Borgers, M&K CPAS, SEC, financial statements, audit, public accounting