RASNA THERAPEUTICS, INC. (OTCMKTS:RASP) Files An 8-K Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review
Item 4.02
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Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review. |
(a) On March 10, 2017, the board of directors of Rasna
Therapeutics, Inc. (the Board), in consultation with management
concluded that: (i)the previously issued unaudited financial
statements for Rasna Therapeutics, Inc. for the period ending
June 30, 2016 (the Unaudited Financial Statements) included in
the Companys Quarterly Report on Form 8-K/A filed with the SEC on
November 17, 2016 (8-K/A Amendment No 1) and (ii)the previously
issued unaudited financial statements for Rasna Therapeutics,
Inc. for the period ending September 30, 2016 (the Unaudited
Financial Statements) included in the Companys Quarterly Report
on Form 10-Q filed with the SEC on November 21, 2016 (Original
10-Q) should no longer be relied upon due to errors identified
therein. As a result, the errors related to the Unaudited
Financial Statements are required to be restated to: (i) reflect
certain expenses which were not appropriately accrued during the
reporting period due to the timing of receipt of invoices and
(ii) reflect the accounting for certain warrants that were issued
in February 2017 which have been deemed to have an associated
liability recordable from the service date of April 2016 and
(iii) to apply the correct methodology to record transactions in
the Companys USD bank account and (iv) reflect the adjustment in
assumptions for the valuation of options recorded in the three
month period ended September 30, 2016.
The errors were identified in the course of preparing the
Companys quarterly report on Form10-Q for the quarterly period
ended December 31, 2016, and were as follows
| 1. |
Subsequent to Rasna Therapeutic Incs Form 10-Q filing for the quarterly period ended September 30, 2016, it was determined that certain expenses were not accrued due to the timing of receipt of invoices. The issue was identified upon receipt of a small group of invoices, which were ultimately forwarded to, and received by, the Company sometime after the September 30, 2016 Form 10-Q was filed. Due to the unrecorded expenses, the Company understated Net loss by $111,408 in the quarter ended June 30, 2016 and by $336,783 in the quarter ended September 30, 2016. |
| 2. |
In February 2017, the Company issued certain warrants for a placement fee in connection with common stock that was issued in April 2016. Managementhas determined that there was an obligation due to the placement agents for services performed in the amount of $484,009 in April 2016. The Company remeasured its obligation at each reporting period and adjusted the amount to $482,115 and $2,056,831 for the quarter ended June 30, 2016 and September 30, 2016 respectively, with the changes to additional paid-in capital as offering costs. |
| 3. |
The Company reviewed the valuations performed for certain stock based compensation granted in September 2016. It was subsequently determined that certain assumptions were not reflected in the valuation; specifically, no assessment had been made for non employees; the volatility assumption had been adjusted to reflect more appropriate comparable companies; and the expected life of certain options were adjusted in the calculation of fair value using the simple approach. This led to an understatement of stock based compensation expense recorded in the quarter ended September 30, 2016 of $174,393. |
| 4. |
Subsequent to Rasna Therapeutic Incs Form 10-Q filing for the quarterly period ended September 30, 2016, it was determined that the Company had not applied the correct translation methodology to convert some banking transactions into USD. This led to an overstatement of cash and an understatement of accounts payable by $4,716 for the quarter ended June 30, 2016 and by $67,448 for the quarter ended September 30, 2016. |
The Company has restated its Unaudited Financial Statements to
address these matters and will file (i) Amendment No. 2 to its
Form 8-K/A (8-K/A Amendment No 1) which was filed on November 17,
2016, which will contain restated Unaudited Financial Statements
and (ii) Amendment No. 1 to its Form 10-Q (Amended 10-Q) for the
quarterly period ended September 30, 2016 which was filed on
November 21, 2016, which will contain restated Unaudited
Financial Statements. Investors, analysts and other persons
should consult the Amended 8-K/A and Amended 10-Q and should not
rely on the unaudited Financial Statements in the Companys
Original Form 8-K/A or the Unaudited Financial Statements in the
Original Form 10-Q or any press releases, presentations or other
communications relating thereto.
The Board, the audit committee of the Board and management have
discussed the matters disclosed in this Item 4.02(a) of this
Current Report on Form 8-K with the Companys independent
registered accounting firm.
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About RASNA THERAPEUTICS, INC. (OTCMKTS:RASP)
Rasna Therapeutics, Inc., formerly Active With Me Inc., creates online resources that offer travelers information on activity-based travel. The Company’s Website focuses on offering third-party content and information to visitors in their activity of choice. The Company’s Website also focuses on offering links to clubs and organizations. The Company is in development-stage. Rasna DE is the subsidiary of the Company. Rasna DE is engaged in modulating the molecular targets nucleophosmin gene (NPM1) and lysine (K)-specific demethylase 1A (LSD1), which are implicated in the disease progression of leukemia and lymphoma. The Company focuses on performing preclinical research on NPM1 and LSD1. As of June 30, 2016, the Company had not generated any revenues. RASNA THERAPEUTICS, INC. (OTCMKTS:RASP) Recent Trading Information
RASNA THERAPEUTICS, INC. (OTCMKTS:RASP) closed its last trading session up +0.01 at 2.11 with shares trading hands.