Cyclacel Pharmaceuticals , Inc. (NASDAQ:CYCC), a biopharmaceutical company focused on the development of cancer treatments, has announced a change in its independent registered public accounting firm.
On Monday, the company's Audit Committee approved the dismissal of Crowe LLP and immediately engaged Bush & Associates CPA LLP for the fiscal year ending December 31, 2024.
The decision to change auditors came after Cyclacel and Crowe LLP did not reach an agreement on the classification of certain warrant provisions. These provisions, related to warrants issued in April 2024 and possibly earlier, could potentially affect the equity classification of the warrants and, consequently, the financial statements' fairness. However, further investigation into this matter was not conducted due to the dismissal of Crowe LLP.
Crowe LLP had been engaged as Cyclacel's auditor since August 19, 2024, and had not provided any audit reports to the company during their tenure. The company reported no disagreements with Crowe LLP on accounting principles or practices, financial statement disclosure, or auditing scope or procedure during their engagement.
Cyclacel has provided Crowe LLP with a copy of the Current Report on Form 8-K filed with the Securities and Exchange Commission (SEC) and has included Crowe LLP's letter dated November 7, 2024, as part of the filing.
The appointment of Bush & Associates CPA LLP comes without any prior consultation regarding accounting principles or disagreements as defined by SEC regulations. This transition marks a critical step for Cyclacel as it prepares its financial statements for the current fiscal year.
The information disclosed is based on Cyclacel Pharmaceuticals' recent SEC filing and represents a significant change in the company's financial reporting processes.
In other recent news, Cyclacel Pharmaceuticals announced a suspension of the upcoming quarterly cash dividend for its 6% Convertible Exchangeable Preferred Stock.
This decision, revealed through an 8-K filing with the Securities and Exchange Commission, affects Cyclacel's preferred stock listed under the ticker CYCCP on the Nasdaq Capital Market.
The company also faces potential delisting from the Nasdaq due to non-compliance with the minimum stockholders' equity requirement, despite raising $6.3 million in net proceeds from an equity raise.
Cyclacel also reported a significant change in its financial reporting process by dismissing RSM US LLP and appointing Crowe LLP as its new certifying accountant. The company reported a net loss of $3.3 million for the recent quarter, but its cash resources are expected to fund planned programs until the end of the year.
On the product development front, Cyclacel reported advancements in its precision medicine strategy, specifically the progress of its fadraciclib (Fadra) study.
The Phase 2 proof-of-concept study for Fadra is proceeding well, with initial clinical activity data expected to be reported by the end of the year. These are the recent developments in the company's operations.
InvestingPro Insights
Cyclacel Pharmaceuticals' recent auditor change comes amid challenging financial circumstances, as revealed by InvestingPro data. The company's market capitalization stands at a mere $0.82 million, reflecting investor concerns about its financial health. This is further underscored by InvestingPro Tips, which indicate that Cyclacel is "quickly burning through cash" and "not profitable over the last twelve months."
The company's revenue for the last twelve months as of Q2 2024 was just $0.08 million, with a staggering revenue decline of 78.55% over the same period. This aligns with another InvestingPro Tip suggesting that "analysts anticipate sales decline in the current year." The operating income margin of -25,255% further highlights the company's financial struggles.
These financial challenges are reflected in Cyclacel's stock performance. InvestingPro data shows that the stock has experienced a 94.95% price decline over the past year, with a 70.14% drop in the last three months alone. This poor performance is consistent with the InvestingPro Tip noting that the "stock has fared poorly over the last month."
For investors seeking a more comprehensive analysis, InvestingPro offers 14 additional tips for Cyclacel Pharmaceuticals, providing deeper insights into the company's financial situation and market position.
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