{"id":5443,"date":"2025-08-29T15:54:16","date_gmt":"2025-08-29T19:54:16","guid":{"rendered":"https:\/\/www.mgocpa.com\/?post_type=perspective&p=5443"},"modified":"2025-09-10T15:55:09","modified_gmt":"2025-09-10T19:55:09","slug":"mgo-stories-from-cannabis-capital-to-complex-biotech-audits","status":"publish","type":"perspective","link":"https:\/\/www.mgocpa.com\/perspective\/mgo-stories-from-cannabis-capital-to-complex-biotech-audits\/","title":{"rendered":"MGO Stories: From Cannabis Capital to Complex Biotech Audits"},"content":{"rendered":"\n

Cesar Reynoso<\/a>, Assurance Partner at MGO, sat down with Chief Revenue Officer Bill Penczak<\/a> to talk resilience, cannabis industry complexities, and how persistence pays off in high-stakes biotech audits.<\/em>\u00a0<\/p>\n\n\n\n

Bill:<\/strong> You once told me that persistence and resilience are themes for you. How have these themes carried over into your professional life, in the work that you do with your clients? <\/p>\n\n\n\n

Cesar:<\/strong> I\u2019ve always believed that if you\u2019re resilient and persistent, you achieve better fruits in the future. That applies directly to our professional role. Audit engagements, especially with public company clients, can be very difficult to get comfortable with from another perspective. But if we stay persistent, we can deliver results, meet deadlines, and get to the finish line. <\/p>\n\n\n\n

Bill:<\/strong> Let\u2019s talk about how that relates to cannabis. When resilient companies in that space try to raise capital, what are some of the challenges you see? <\/p>\n\n\n\n

Cesar:<\/strong> Investors are cautious. When cannabis companies issue debt, investors often want more than just a high interest rate \u2014 they want warrants on top of that. But warrants come with complications. If holders have anti-dilution rights, then when the company raises more capital, those warrants can\u2019t be diluted. That creates liabilities. We understand the derivative activity that results from these structures and how to address them from an accounting standpoint.  <\/p>\n\n\n\n

Bill:<\/strong> Beyond financing, many cannabis companies are also growing quickly through acquisitions. They obviously have to be persistent, but what issues come up there?  <\/p>\n\n\n\n

Cesar:<\/strong> Smaller operators often start with one or two dispensaries or a single greenhouse and then expand rapidly to 20 or more locations. That triggers business acquisitions. The question is\u2026how do you account for those transactions? Do you observe inventory on day one? Some firms skip that, and it becomes a finding. We focus on doing things right every step of the way. <\/p>\n\n\n\n

Bill:<\/strong> You\u2019ve also worked on some very complex biotech audits, including situations where larger firms struggled. Can you share one of those experiences? <\/p>\n\n\n\n

Cesar:<\/strong> Sure. We were referred to a situation with a larger biotech company that had been audited by a Big Four firm. The Big Four couldn\u2019t trust management on certain foreign transactions. Every question went up to their national office, and it dragged on for weeks. Quarterly reviews stalled, the prior year audit wasn\u2019t completed, and the current year audit was at risk. <\/p>\n\n\n\n

We came in and approached things differently. Instead of sending information up the chain, we sat down with management \u2014 CEO, CFO \u2014and made phone calls in front of them, validated the information directly, and often resolved issues the same day. We pulled in legal, transactions, and accounting teams, connected the dots, and identified where the real issue was. <\/p>\n\n\n\n

Over three to four months, thousands of hours, we caught up on quarterly reviews, delivered the prior year audit, and positioned the company for the current year audit. We presented our findings to the audit committee, including material weaknesses and deficiencies, but we got to the finish line. And we did it without shying away from tough conversations. All while still keeping the audit on track. <\/p>\n\n\n\n

Bill:<\/strong> That\u2019s exactly what stands out, Cesar. Whether it\u2019s cannabis companies navigating capital raises and acquisitions, or biotech firms dealing with high-stakes audits, you and your team get results. <\/p>\n\n\n\n

In cannabis<\/a> and biotech<\/a> alike, persistence, technical depth, and a hands-on approach make the difference between stalled progress and a successful outcome. At MGO, we combine resilience with practical execution to help clients navigate complexity and move forward with confidence. Contact us<\/a> to learn more.  <\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Cesar Reynoso, Assurance Partner at MGO, sat down with Chief Revenue Officer Bill Penczak to talk resilience, cannabis industry complexities, and how persistence pays off in high-stakes biotech audits.\u00a0 Bill: You once told me that persistence and resilience are themes for you. How have these themes carried over into your professional life, in the work […]<\/p>\n","protected":false},"featured_media":5506,"template":"","meta":{"_acf_changed":true,"content-type":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0},"perspective_topic":[61,59,116,317],"perspective-type":[42],"class_list":["post-5443","perspective","type-perspective","status-publish","has-post-thumbnail","hentry","perspective_topic-audit","perspective_topic-biotechnology","perspective_topic-cannabis","perspective_topic-mgo-stories","perspective-type-articles"],"acf":[],"yoast_head":"\nMGO Stories: From Cannabis Capital to Complex Biotech Audits - MGO CPA | Tax, Audit, and Consulting Services<\/title>\n<meta name=\"description\" content=\"Cannabis companies face hurdles in raising capital, navigating derivative liabilities, and accounting for rapid acquisitions. 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