Klotho Neurosciences, Inc. (NASDAQ:KLTO), a biotechnology company, has disclosed the termination of its relationship with its former accounting firm, Yusufali & Associates, LLC. As stated in a recent SEC filing, the decision, effective October 26, 2024, was influenced by Yusufali & Associates being disqualified by the Public Company Accounting Oversight Board.
The previous reports from Yusufali & Associates on Klotho's financials for the years ending December 31, 2023, and 2022, did not contain any adverse opinions or disclaimers. However, they did include a statement expressing substantial doubt about the company's ability to continue as a going concern.
Klotho Neurosciences confirmed that there were no disagreements with Yusufali & Associates on any accounting principles, practices, disclosures, or auditing procedures that would require mention in their financial statements for the years mentioned. Moreover, no reportable events were noted that would necessitate disclosure under SEC regulations.
Following the dismissal, Klotho's board of directors appointed BCRG Group as the new independent registered public accounting firm on October 28, 2024. Prior to this engagement, Klotho had not consulted with BCRG on any accounting principles or transactions, nor had BCRG provided any reports or advice that influenced the company's decision-making regarding accounting or financial reporting issues.
The change in Klotho's certifying accountant is detailed in their latest Form 8-K filed with the SEC on October 31, 2024. The company is expected to file an amendment to this form, including a letter from Yusufali & Associates regarding their agreement or disagreement with the disclosures made.
Klotho Neurosciences, previously known as ANEW Medical, Inc., and before that as Redwoods Acquisition Corp., is headquartered in Omaha, Nebraska, and specializes in biological products. The company is listed as an emerging growth company and has common stock and warrants traded on The Nasdaq Stock Market under the tickers KLTO and KLTOW, respectively.
In other recent news, Klotho Neurosciences, formerly known as ANEW Medical, Inc., has seen several significant developments. The company has reported a substantial change in its share composition, with 15,130,393 issued and outstanding shares of common stock following a merger with a subsidiary of 03 Life Sciences. This transformation has resulted in considerable changes to the company's corporate structure.
Additionally, the company has entered into a new three-year contract with its CEO, Dr. Joseph Sinkule, who will receive an annual base salary of $360,000 and an equity award of 1,000,000 stock options under the company’s 2023 Incentive Plan.
On the executive front, Klotho Neurosciences has welcomed Jeffrey LeBlanc as the new Chief Financial Officer and Peter Moriarty as the new Chief Operating Officer, both entering into three-year employment agreements.
However, the company is facing potential delisting from the Nasdaq Stock Market due to non-compliance with the minimum bid price requirement, and it has until April 14, 2025, to meet the Nasdaq's mandate.
InvestingPro Insights
Recent InvestingPro data paints a challenging picture for Klotho Neurosciences (NASDAQ:KLTO). The company's market capitalization stands at a modest $10.84 million, reflecting its status as a small-cap biotechnology firm. This valuation aligns with the company's current developmental stage and the recent accounting firm changes.
InvestingPro Tips highlight that KLTO is not profitable over the last twelve months, which is consistent with the going concern statement mentioned in the previous audit reports. The stock's performance has been particularly weak, with a significant price drop of 95.23% over the past year. This decline may be attributed to various factors, including the company's financial position and the broader market's perception of its prospects.
The company's P/E ratio (Adjusted) for the last twelve months as of Q2 2024 stands at -7.47, indicating negative earnings, which is not uncommon for early-stage biotech companies investing heavily in research and development. Additionally, KLTO's Return on Assets is -49.97%, further underscoring the financial challenges it faces.
These insights provide context to the company's decision to change its accounting firm and highlight the financial hurdles Klotho Neurosciences must overcome. Investors considering KLTO should be aware that InvestingPro offers 7 additional tips that could provide further clarity on the company's situation and prospects.
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