8-K: Plus Therapeutics Changes Auditor Amidst Going Concern Warning and Control Weakness

Plus Therapeutics, Inc. has dismissed BDO USA, P.C. as its independent registered public accounting firm and engaged CBIZ CPAs P.C., following BDO's reports that included a going concern explanatory paragraph and a previously disclosed material weakness in internal controls.

Summary

• Plus Therapeutics, Inc. dismissed BDO USA, P.C. as its independent registered public accounting firm on July 16, 2025.
• The company engaged CBIZ CPAs P.C. as its new independent registered public accounting firm, effective immediately on July 16, 2025, to audit consolidated financial statements for the year ending December 31, 2025.
• BDO's audit reports for fiscal years ended December 31, 2024, and December 31, 2023, did not contain adverse opinions or disclaimers, nor were they qualified or modified, except for 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/procedure.
• A material weakness in internal control over financial reporting as of December 31, 2023, was previously disclosed, stemming from ineffective disclosure controls and procedures related to the application of appropriate accounting principles to significant and unusual grant revenue transactions.
• The Audit Committee discussed this material weakness with BDO.
• The company did not consult CBIZ on specific accounting principles or audit opinions prior to engagement that were important factors in company decisions, nor were there any disagreements or reportable events with CBIZ.
• BDO USA, P.C. confirmed in a letter dated July 18, 2025, that it agrees with the statements made by the company in the Form 8-K.

Sentiment

Score: 3

Explanation: The dismissal of an auditor coupled with a 'going concern' explanatory paragraph and a material weakness in internal controls indicates significant financial and operational challenges, leading to a negative sentiment. The smooth transition to a new auditor and BDO's agreement with the statements offer minor positive counterpoints but do not outweigh the core concerns.

Positives

• The company has promptly engaged a new independent auditor, CBIZ CPAs P.C., ensuring continuity in financial oversight.
• BDO confirmed agreement with the company's statements in the 8-K, indicating a smooth transition without public disagreement.
• No new disagreements or reportable events were identified with BDO leading up to their dismissal.

Negatives

• BDO's audit reports included an explanatory paragraph regarding "substantial doubt about the Company's ability to continue as a going concern" for fiscal years ended December 31, 2024, and December 31, 2023.
• A material weakness in internal control over financial reporting as of December 31, 2023, was previously disclosed, specifically related to the application of appropriate accounting principles to significant and unusual grant revenue transactions.

Risks

• Substantial doubt about the company's ability to continue as a going concern, as noted by the former auditor.
• Material weakness in internal control over financial reporting, particularly concerning the application of accounting principles to significant and unusual grant revenue transactions, which could impact financial reporting reliability.

Future Outlook

NA

Management Comments

• The Audit Committee discussed this matter with BDO, and the Company has authorized BDO to respond fully to any inquiries of CBIZ CPAs P.C. with respect to this matter.
• Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: July 18, 2025 PLUS THERAPEUTICS, INC. By: /s/ Marc H. Hedrick, M.D. Marc H. Hedrick, M.D. President and Chief Executive Officer

Industry Context

Changes in independent auditors are common, but the context of a "going concern" explanatory paragraph and a "material weakness" in internal controls suggests heightened scrutiny on financial reporting and operational viability, which is a critical area for biotech/pharma companies often reliant on grant revenue and external funding.

Comparison to Industry Standards

• The inclusion of a "going concern" explanatory paragraph by an auditor is a significant red flag, indicating that the auditor has substantial doubt about the company's ability to continue operating for at least one year. This is a serious concern that differentiates Plus Therapeutics from financially stable peers in the biotech sector.
• The disclosed "material weakness in internal control over financial reporting" related to "significant and unusual grant revenue transactions" suggests a deficiency in financial controls that is more severe than typical control deficiencies found in well-governed companies. Leading biotech companies typically maintain robust internal controls to ensure accurate revenue recognition, especially from complex grant structures.
• While auditor changes occur, a change following such audit qualifications often signals underlying financial or operational challenges that are not typical for companies demonstrating strong financial health and governance, unlike established pharmaceutical companies or well-funded clinical-stage biotechs.

Corporate Governance

Stakeholder Impact

• Shareholders: May face increased uncertainty due to the "going concern" explanatory paragraph and the material weakness in internal controls, potentially impacting share price and investor confidence.
• Creditors: The "going concern" note could make it more difficult or expensive for the company to secure new financing or maintain existing credit lines.
• Management/Employees: The material weakness in internal controls highlights areas needing improvement within the company's financial operations, potentially increasing workload or scrutiny for relevant departments.

Next Steps

• CBIZ CPAs P.C. will audit the company's consolidated financial statements for the year ending December 31, 2025.
• BDO USA, P.C. is authorized to respond fully to any inquiries from CBIZ CPAs P.C. regarding the material weakness.

Key Dates

Recommendation

Keywords

Plus Therapeutics, PSTV, SEC Filing, 8-K, Auditor Change, Independent Registered Public Accounting Firm, BDO USA, CBIZ CPAs, Going Concern, Material Weakness, Internal Control, Financial Reporting, Corporate Governance, Audit Committee, Grant Revenue