Smart for Life, Inc. (OTC Pink:SMFL), a Nevada-based company in the medicinal chemicals and botanical products sector, has announced significant changes to its financial oversight structure. On Monday, the company disclosed the dismissal of its previous independent registered public accounting firm, RBSM LLP, and the appointment of TAAD LLP as its new auditor.
The change in certifying accountant, which occurred on October 10, was approved by the audit committee of the company's board of directors. The audit report from RBSM for the fiscal year ending December 31, 2023, did not contain any adverse opinion or disclaimer of opinion, nor was it modified as to uncertainty, audit scope, or accounting principles. However, the report included an explanatory paragraph that expressed substantial doubt about Smart for Life's ability to continue as a going concern.
Smart for Life's relationship with RBSM began on October 27, 2023, and during the time RBSM served as the company's auditor, there were no disagreements on accounting principles or practices, financial statement disclosure, or auditing scope or procedure that would have required mention in their reports. Furthermore, there were no reportable events as defined by SEC regulations.
Following the dismissal of RBSM, Smart for Life engaged TAAD LLP as its new independent registered public accounting firm for the year ending December 31, 2024. Prior to their appointment, Smart for Life had not consulted TAAD on any accounting principles or transactions, nor had there been any disagreements or reportable events between the two parties.
This transition comes after the Nasdaq Stock Market LLC notified Smart for Life on September 17, 2024, of its decision to delist the company's common stock from The Nasdaq Capital Market. The company's common stock was suspended from trading on Nasdaq starting September 19, 2024, and is now quoted on the OTC Pink Market.
Smart for Life has provided RBSM with the disclosures related to their dismissal and has filed a copy of RBSM's letter to the Securities and Exchange Commission, dated October 15, 2024, as required. This letter and other relevant documents have been included as exhibits in the company's recent SEC filing, which serves as the source of this information.
In other recent news, Smart for Life, a medicinal chemicals and botanical products firm, has been delisted from The Nasdaq Capital Market due to noncompliance with several listing requirements. This decision came into effect after a hearing panel's deliberation. The company fell short of the required stockholders' equity of $2.5 million, reporting only $951,836 for the period that ended in September 2023.
Adding to the company's compliance issues, Smart for Life failed to conduct an annual shareholders' meeting in 2023 and was late in filing its annual and quarterly reports for the same year and the first half of 2024. These factors significantly influenced the panel's decision.
In the wake of these events, Smart for Life's common stock has started trading on the OTC Markets. Despite this transition, it's noteworthy that the company remains operational and continues to serve its customers.
InvestingPro Insights
Smart for Life's recent financial and operational challenges are reflected in the latest data from InvestingPro. The company's market capitalization has dwindled to just $0.35 million, with its stock price at a mere $0.05, representing only 0.13% of its 52-week high. This steep decline is evident in the company's price performance, with a staggering 99.68% drop over the past year.
Despite these setbacks, InvestingPro Tips highlight some potential areas of interest for investors. The company maintains impressive gross profit margins, which stood at 37.57% for the last twelve months as of Q4 2023. This suggests that Smart for Life still retains some operational efficiency in its core business. Additionally, the company operates with a moderate level of debt, which could provide some financial flexibility as it navigates its current challenges.
It's worth noting that InvestingPro offers 13 additional tips for Smart for Life, providing a more comprehensive analysis for investors considering the company's future prospects. These insights could be particularly valuable given the company's recent delisting from Nasdaq and the appointment of a new auditor, as discussed in the article.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.