SEC Comment Letter 0000000000-24-003962 to Avenir Wellness Solutions, Inc. (CIK 0001643301)
Avenir Wellness Solutions, Inc. (CIK 0001643301)
Date: April 11, 2024 · CIK: 0001643301 · Accession: 0000000000-24-003962
AI Filing Summary & Sentiment
Letter
United States securities and exchange commission logo April 11, 2024 Joel Bennett Chief Financial Officer Avenir Wellness Solutions, Inc. 5805 Sepulveda Blvd Suite 801 Sherman Oaks, CA 91411 Re:Avenir Wellness Solutions, Inc. Form 10-K for the Year Ended December 31, 2022 Form 10-Q for the Period Ended September 30, 2023 Dear Joel Bennett: We have reviewed your March 29, 2024 response to our comment letter and have the following comment(s). Please respond to this letter within ten business days by providing the requested information or advise us as soon as possible when you will respond. If you do not believe a comment applies to your facts and circumstances, please tell us why in your response. After reviewing your response to this letter, we may have additional comments. Unless we note otherwise, any references to prior comments are to comments in our March 29, 2024 letter. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures Changes in and Disagreements with Accountants on Accounting and Financial Disclosures, page 1.Please address the following regarding your response to prior comment two: •From your response it is unclear whether your response to the first two bullets is only supplemental or proposed disclosure changes. Please confirm that you will revise your disclosures consistent with the information provided in your response to the first two bullets. •With regards to your response to bullet three, revise your disclosures to clearly link your response to bullets two and three such that the most sensitive risk is that the transactions conducted through a related party, third-party account, by the Company's employees, are also recorded and reported within the Company's accounting records
FirstName LastNameJoel Bennett Comapany NameAvenir Wellness Solutions, Inc. April 11, 2024 Page 2 FirstName LastName Joel Bennett Avenir Wellness Solutions, Inc. April 11, 2024 Page 2 even though these actions are not specifically prescribed in the Distribution Services Agreement and was based on authorization granted extemporaneously by the chief executive office of the Company. Note 2. Summary of Significant Accounting Policies Correction of an Error, page F-25 2.We have considered your response to prior comment 6. Given the quantitative significance of the error to net loss per share, and the fact that we do not agree that the factors cited in your qualitative assessment overcomes such significance, we disagree with the Company’s conclusion that the error was immaterial. As a result, we believe the Company’s consolidated financial statements are materially misstated and therefore, should be restated. Please amend the applicable filings to present restated financial statements reflecting the correction of the error in accordance with ASC 250 and file an Item 4.02 Form 8-K. Additionally, please update the disclosure in Item 9A regarding any new material weaknesses identified in connection with this error.
3.We have considered your response to prior comment 6 and do not agree with your conclusion that neither the predecessor auditor nor the successor auditor is required to take responsibility for the auditing of the correction of the error in the audit report. As discussed in paragraph 57 of AS 3105, if the predecessor auditor revises the audit report or if the financial statements are adjusted, he or she should dual-date the audit report. To the extent the successor auditor audited the adjustments necessary to the December 31,2021 financial statements for the error correction, please provide a revised audit report from the successor auditor to make that clear. Furthermore, we do not agree with your conclusion that the predecessor audit report does not need to be adjusted to add an explanatory paragraph in the reissued audit report for the adjustments made to the 2021 financial statements related to discontinued operations, and for the adjustments related to the correction of the error, if applicable. Please refer to Question 9 in the PCAOB Staff Questions and Answers related to Adjustments to Financial Statements Audited by a Predecessor Auditor available on the PCAOB’s website at: Microsoft Word - Staff QA Adjustments to FS Audited by Predecessor Auditor … (pcaobus.org) Please contact Christine Torney at 202-551-3652 or Kevin Vaughn at 202-551-3494 if you have questions regarding comments on the financial statements and related matters. Sincerely, Division of Corporation Finance Office of Life Sciences
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United States securities and exchange commission logo
April 11, 2024
Joel Bennett
Chief Financial Officer
Avenir Wellness Solutions, Inc.
5805 Sepulveda Blvd
Suite 801
Sherman Oaks, CA 91411
Re:Avenir Wellness Solutions, Inc.
Form 10-K for the Year Ended December 31, 2022
Form 10-Q for the Period Ended September 30, 2023
Dear Joel Bennett:
We have reviewed your March 29, 2024 response to our comment letter and have the
following comment(s).
Please respond to this letter within ten business days by providing the requested
information or advise us as soon as possible when you will respond. If you do not believe a
comment applies to your facts and circumstances, please tell us why in your response.
After reviewing your response to this letter, we may have additional comments. Unless
we note otherwise, any references to prior comments are to comments in our March 29,
2024 letter.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial
Disclosures
Changes in and Disagreements with Accountants on Accounting and Financial Disclosures, page
41
1.Please address the following regarding your response to prior comment two:
•From your response it is unclear whether your response to the first two bullets is only
supplemental or proposed disclosure changes. Please confirm that you will revise
your disclosures consistent with the information provided in your response to the first
two bullets.
•With regards to your response to bullet three, revise your disclosures to clearly link
your response to bullets two and three such that the most sensitive risk is that the
transactions conducted through a related party, third-party account, by the Company's
employees, are also recorded and reported within the Company's accounting records
FirstName LastNameJoel Bennett
Comapany NameAvenir Wellness Solutions, Inc.
April 11, 2024 Page 2
FirstName LastName
Joel Bennett
Avenir Wellness Solutions, Inc.
April 11, 2024
Page 2
even though these actions are not specifically prescribed in the Distribution Services
Agreement and was based on authorization granted extemporaneously by the chief
executive office of the Company.
Note 2. Summary of Significant Accounting Policies
Correction of an Error, page F-25
2.We have considered your response to prior comment 6. Given the quantitative
significance of the error to net loss per share, and the fact that we do not agree that the
factors cited in your qualitative assessment overcomes such significance, we disagree with
the Company’s conclusion that the error was immaterial. As a result, we believe the
Company’s consolidated financial statements are materially misstated and therefore,
should be restated. Please amend the applicable filings to present restated financial
statements reflecting the correction of the error in accordance with ASC 250 and file an
Item 4.02 Form 8-K. Additionally, please update the disclosure in Item 9A regarding any
new material weaknesses identified in connection with this error.
3.We have considered your response to prior comment 6 and do not agree with your
conclusion that neither the predecessor auditor nor the successor auditor is required to take
responsibility for the auditing of the correction of the error in the audit report. As
discussed in paragraph 57 of AS 3105, if the predecessor auditor revises the audit report
or if the financial statements are adjusted, he or she should dual-date the audit report. To
the extent the successor auditor audited the adjustments necessary to the December
31,2021 financial statements for the error correction, please provide a revised audit report
from the successor auditor to make that clear. Furthermore, we do not agree with your
conclusion that the predecessor audit report does not need to be adjusted to add an
explanatory paragraph in the reissued audit report for the adjustments made to the 2021
financial statements related to discontinued operations, and for the adjustments related to
the correction of the error, if applicable. Please refer to Question 9 in the PCAOB Staff
Questions and Answers related to Adjustments to Financial Statements Audited by a
Predecessor Auditor available on the PCAOB’s website at: Microsoft Word - Staff QA
Adjustments to FS Audited by Predecessor Auditor … (pcaobus.org)
Please contact Christine Torney at 202-551-3652 or Kevin Vaughn at 202-551-3494 if
you have questions regarding comments on the financial statements and related matters.
Sincerely,
Division of Corporation Finance
Office of Life Sciences