8-K: Phio Pharmaceuticals Changes Independent Auditor from BDO to Grant Thornton

Phio Pharmaceuticals has dismissed BDO USA, P.C. and engaged Grant Thornton LLP as its independent registered public accounting firm, effective April 17, 2025.

Summary

• Phio Pharmaceuticals Corp. has changed its independent registered public accounting firm.
• The Audit Committee approved the dismissal of BDO USA, P.C. on April 17, 2025.
• Grant Thornton LLP was engaged as the new independent registered public accounting firm, also effective April 17, 2025.
• The Board of Directors ratified the Audit Committee's decisions.
• BDO's reports for the fiscal years ended December 31, 2024 and December 31, 2023, included an explanatory paragraph regarding substantial doubt about the company's ability to continue as a going concern.
• There were no disagreements with BDO on accounting principles, financial statement disclosure, or auditing scope.
• Phio Pharmaceuticals did not consult Grant Thornton regarding any matters outlined in Item 304(a)(2)(i) or (ii) of Regulation S-K during the specified periods.
• BDO has provided a letter agreeing with the statements made by Phio Pharmaceuticals regarding their firm.

Sentiment

Score: 5

Explanation: Neutral sentiment as it is a routine change of auditors, but the previous 'going concern' warning tempers any positive outlook.

Positives

• The transition to a new auditor was conducted smoothly with no reported disagreements.
• BDO agreed with the statements made by Phio Pharmaceuticals regarding their firm.

Negatives

• BDO's reports for the fiscal years ended December 31, 2024 and December 31, 2023, included an explanatory paragraph regarding substantial doubt about the company's ability to continue as a going concern.

Risks

• The change in auditors could potentially raise concerns among investors if not properly communicated.
• The previous auditor's concern about the company's ability to continue as a going concern remains a risk factor.

Industry Context

Changes in auditors are not uncommon, but they can sometimes signal underlying issues or a desire for a fresh perspective on financial reporting. It's important to monitor whether the new auditor identifies any material weaknesses or makes significant changes to accounting practices.

Comparison to Industry Standards

• Auditor changes are a normal part of corporate governance, but the reasons behind the change are always scrutinized.
• Companies like Amgen, Biogen, and Gilead Sciences also use large audit firms, but a change in auditors can sometimes be viewed negatively if not properly explained.
• The inclusion of a 'going concern' paragraph in previous audit reports is a red flag that requires careful monitoring.

Stakeholder Impact

• Shareholders may be concerned about the change in auditors, especially given the previous 'going concern' warning.
• Employees may experience uncertainty if the change in auditors leads to changes in financial reporting practices.

Key Dates

Keywords

auditor, Grant Thornton, BDO USA, accounting firm, financial statements, Phio Pharmaceuticals