Business Context and Reporting Period
This Form 8-K filing by Conduit Pharmaceuticals Inc. (CDT) reports a change in the registrant's certifying accountant. The report date is April 24, 2025, covering events occurring on April 24 and April 25, 2025. The company is an emerging growth company incorporated in Delaware.
Key Financial Metrics
The filing does not provide specific revenue, profit, cash flow, margin, debt, or liquidity figures for the current period. However, it references the independent audit reports for the fiscal years ended December 31, 2024, and 2023, which contained an explanatory paragraph stating there was substantial doubt about the Company's ability to continue as a going concern.
Material Changes
The primary material change is the resignation of Marcum LLP as the independent registered public accounting firm, effective April 24, 2025. This resignation follows the acquisition of Marcum's attest business by CBIZ CPAs P.C. on November 1, 2024. Consequently, CBIZ CPAs was engaged as the new independent registered public accounting firm on April 25, 2025, with the approval of the Audit Committee.
Outlook, Risks, and Contingencies
Internal Control Weaknesses: The filing discloses material weaknesses in internal control over financial reporting identified during the audits for 2023 and 2024, including:
- Limited segregation of duties with heavy reliance on interim personnel and third-party consultants.
- Lack of a formal process for the contemporaneous review and approval of significant transactions, leading to recurring errors.
- Inadequate design of internal controls under an appropriate framework.
- Failure to appropriately review accounting implications of material transactions, resulting in a restatement of previous periods.
- Inconsistent review controls around related party transactions.
Going Concern Risk: The prior auditor's reports included a substantial doubt qualification regarding the company's ability to continue as a going concern.
Disagreements: The Company states there were no disagreements with Marcum LLP on accounting principles, practices, or auditing scope during the relevant periods.
Investor Verification Checklist
- Verify the status of the "substantial doubt" regarding the company's ability to continue as a going concern as of the current date.
- Review the specific details of the restatement of previous periods mentioned in the internal control weaknesses.
- Confirm the timeline and scope of the transition from Marcum LLP to CBIZ CPAs P.C.
- Examine the company's plan to remediate the disclosed material weaknesses in internal controls.
- Check for any subsequent filings regarding liquidity or capital raising efforts to address the going concern risk.