8-K: TNF Pharmaceuticals Changes Auditors as Morison Cogen Exits Public Company Audits

TNF Pharmaceuticals has replaced its auditor, Morison Cogen LLP, with Stephano Slack LLC, following Morison Cogen's decision to cease providing audit services to publicly traded companies.

Summary

• TNF Pharmaceuticals has changed its independent registered public accounting firm.
• Morison Cogen LLP resigned on September 30, 2024, due to their exit from providing audit services to publicly traded companies.
• Morison Cogen's reports on the company's 2022 and 2023 financial statements did not contain any adverse opinions or disclaimers, but included a going concern paragraph due to net losses and negative cash flows.
• There were no disagreements between TNF Pharmaceuticals and Morison Cogen on accounting principles or practices.
• Stephano Slack LLC was engaged as the new independent auditor on October 3, 2024, effective immediately.
• TNF Pharmaceuticals did not consult with Stephano Slack on accounting principles or audit opinions prior to their appointment.

Sentiment

Score: 5

Explanation: The change in auditors is neutral, but the going concern paragraph in previous reports is a concern. The quick appointment of a new auditor is a positive.

Positives

• The transition to a new auditor was completed quickly, with Stephano Slack appointed the day after Morison Cogen's resignation.
• Morison Cogen confirmed there were no disagreements on accounting principles or practices during their tenure.

Negatives

• Morison Cogen's audit reports for 2022 and 2023 included a going concern paragraph, indicating financial challenges for TNF Pharmaceuticals.
• The change in auditors may cause some uncertainty for investors.

Risks

• The going concern paragraph in the previous auditor's reports highlights the company's financial instability.
• The change in auditors could lead to increased scrutiny of the company's financial statements.

Management Comments

• Management's plans regarding the going concern issue are described in Note 3 of the financial statements.

Industry Context

Changes in auditors are not uncommon, but the reason for the change, Morison Cogen's exit from public company audits, is unusual. This may reflect broader trends in the accounting industry.

Comparison to Industry Standards

• The resignation of an auditor due to a firm's exit from public company audits is not a typical event.
• Most auditor changes are due to disagreements or performance issues, not a firm's strategic decision to exit a market segment.
• The inclusion of a going concern paragraph is a standard practice when there are significant doubts about a company's ability to continue operating, and is not unique to TNF Pharmaceuticals.

Stakeholder Impact

• Shareholders may be concerned about the going concern paragraph in the previous auditor's reports.
• The change in auditors could lead to increased scrutiny of the company's financial statements by investors.

Key Dates

Keywords

auditor, accounting, financial statements, Morison Cogen, Stephano Slack, going concern, audit, public company