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CannaPharmaRX auditor resignation announced

EditorLina Guerrero
Published 11/21/2024, 02:15 PM
CPMD
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CannaPharmaRX, Inc. (OTC Markets:CPMD), a pharmaceutical preparations company, disclosed the resignation of its independent registered public accounting firm, GreenGrowth CPAs. The resignation took effect on Thursday, November 14, 2024, as reported in a Form 8-K filed with the Securities and Exchange Commission (SEC).

GreenGrowth, which had been auditing CannaPharmaRX since 2023, did not express any disagreements with the company on accounting principles or practices, financial statement disclosures, or auditing scope or procedures that, if unresolved, would have required them to make reference to the matter in their audit report. Furthermore, there were no reportable events as defined in Item 304(a)(1)(v) of Regulation S-K.

The auditor's report for the fiscal year ending December 31, 2023, did not contain an adverse opinion or a disclaimer of opinion and was not qualified or modified as to uncertainty, audit scope, or accounting principle. However, the report did include an explanatory paragraph regarding CannaPharmaRX's ability to continue as a going concern due to recurring losses from operations, significant accumulated deficit, and consistent negative cash flows.

CannaPharmaRX has provided GreenGrowth with the disclosures made in the current report and has received a letter from GreenGrowth dated November 14, 2024, stating their agreement with the statements made in the report. This letter is attached as Exhibit 9.01 to the Form 8-K.

The company is in the process of obtaining quotes for the engagement of a new auditor and will make a subsequent announcement through a Form 8-K filing once a new auditor has been engaged. The information provided is based on a press release statement.

In other recent news, CannaPharmaRX, a key player in the pharmaceutical preparations industry, announced the departure of CEO Dean Medwid. The company made the announcement in a filing with the Securities and Exchange Commission, stating that Medwid's decision to step down was driven by personal reasons and not due to any operational, policy, or practice disagreements. This significant leadership transition may steer the company's strategic direction moving forward.

The Board of Directors is currently in the process of finding a suitable replacement for the CEO position. During this interim period, the board and the company's staff are working together to manage daily operations, aiming for a seamless transition and minimal disruption. The company expressed its appreciation for Medwid's dedication and contributions during his tenure.

InvestingPro Insights

CannaPharmaRX's financial health appears to be in a precarious state, aligning with the auditor's concerns about the company's ability to continue as a going concern. According to InvestingPro data, the company's market capitalization stands at a mere $6.56 million, with a negative gross profit margin of -387.45% for the last twelve months as of Q3 2024. This severe unprofitability is further emphasized by an operating income margin of -408.17% for the same period.

InvestingPro Tips highlight that CannaPharmaRX is "quickly burning through cash" and "operates with a significant debt burden." These factors likely contribute to the auditor's concerns about the company's financial stability. Additionally, the tip that "short term obligations exceed liquid assets" underscores the immediate financial pressures facing the company.

The stock's performance has been volatile, with InvestingPro data showing a 35.29% decline in the past week and a 43.88% drop over the last month. This recent downtrend may reflect market reaction to the company's ongoing financial challenges and the recent auditor resignation.

Investors considering CannaPharmaRX should note that InvestingPro offers 13 additional tips for this stock, providing a more comprehensive analysis of the company's financial situation and market performance.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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