Keeping It Steady During a Company-Defining Moment

CRCFO
26 minutes ago
3 min read

CASE STUDY: How Charles River CFO Supported a Biotech Firm Through a Reverse Split, a Financing Round, and a CFO Transition

by Kevin Sarney Life Sciences Practice Leader

Background

For a small, R&D-focused pharmaceutical company, the past few years were anything but quiet. Charles River CFO’s (CRCFO) client was navigating a 1-for-10 reverse stock split, closing a $100M+ private placement, managing a permanent CFO transition, and meeting new SEC and FASB reporting requirements, all at the same time.

With a lean team focused almost entirely on clinical development, the company did not have the internal bandwidth to handle this level of financial complexity. That is where CRCFO came in.

The Challenge

The firm needed more than interim coverage. It needed experienced financial leadership that could step in without a ramp-up period, maintain institutional-grade books, and deliver auditors and investors exactly what they needed, even as the company's structure and leadership were changing beneath it.

When our client appointed its new permanent CFO, CRCFO had already been in the seat, handling day-to-day financial operations and SEC reporting. The transition was clean.

CRCFO's work gave the incoming CFO a strong foundation to build on. The books were up to date, the processes were documented, and the team was stable. There was no scramble, no reporting gaps, and no surprises for investors or the board.

CRCFO maintained close continuity through the transition, including consistent team members, a well-documented close process, and uninterrupted SEC reporting.

A 1-for-10 reverse stock split and a $100M+ private placement are not routine events. Both require precise technical execution and disclosure in SEC filings, and both happened on a compressed timeline.

CRCFO's team brought the kind of technical depth that typically lives inside a Big 4 audit firm. There was no learning curve. The filings were handled correctly, on time, and in full compliance with regulatory requirements. The CRCFO team has this experience because it is comprised of CPAs and folks with direct life science experience, with multiple years of audit and review experience.

Key reporting events handled by CRCFO during this period:

1-for-10 reverse stock split reflected accurately across all filings
$100M+ private placement disclosed correctly in 10-Q and 10-K reports
Full regulatory compliance maintained throughout the engagement, including monthly/quarterly closings

In 2024, FASB ASU 2023-07 was required to be implemented; this new segment expense disclosure requirement caught many companies off guard. For our client, with growing life science R&D spend and increasing operational complexity, this was a meaningful new obligation.

The CRCFO team guided the company through this new reporting requirement, providing the knowledge and expertise that its internal department lacked. This is the fractional CFO model working as intended: the company accessed exactly the expertise it needed, exactly when it needed it, without adding a full-time hire.

One of the biggest pain points for biotech CFOs is audit season. Disorganized close processes, reconciliation gaps, and poor auditor communication can turn a standard audit into a months-long ordeal.

CRCFO built and maintained a structured closing binder that became the single source of truth for both internal reporting and external audits. Every balance sheet account was reconciled. Every major expense area was documented. Tables were linked directly to trial balances and tied to the related financial statement disclosures.

Benefits seen during the audit process:

More efficient external auditor audits and reviews due to proven organized reconciliation workpapers, processes and experiences from the CRCFO team
Reduced back-and-forth between management and external auditors
A consistent, repeatable close process that new team members could follow

This experience results in reduced audit/review expenses and reduced overhead costs for the client, as they are only paying for the “actual” time individuals are involved.

For a late-stage clinical company, every dollar and every hour of leadership attention matters. CRCFO's role was to take the entire financial reporting function off the leadership team's plate so they could stay focused on clinical progress and the next valuation inflection point.

THE BOTTOM LINE

Outsourcing the financial reporting function preserved cash for R&D and allowed a

small organization to operate as a fully public company, without building out a full-time finance and accounting department.

Charles River CFO provides fractional CFO, interim CFO, and controller services to life sciences companies at every stage. Our team brings Big 4 pedigree and deep SEC reporting expertise to complex, high-stakes engagements, without the cost or commitment of a full-time hire.

Interested in learning more? Reach out to discuss how we can support your next critical milestone.