Non Reliance of Financial Report Form 8 K

Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review

Overview

"On May 3, 2024, the Commission entered an order instituting settled administrative and cease-and-desist proceedings against BF Borgers CPA PC and its sole audit partner Benjamin F. Borgers CPA (individually and together, "BF Borgers")".

"BF Borgers has been denied the privilege of appearing or practicing before the Commission, issuers that have engaged BF Borgers to audit or review financial information to be included in any Exchange Act filings to be made on or after the date of the Order will need to engage a new qualified, independent, PCAOB-registered public accountant. For example:

	●	Form 10-K filings on or after the date of the Order may not include audit reports from BF Borgers. Each fiscal year presented must be audited by a qualified, independent, PCAOB-registered public accountant that is permitted to appear or practice before the Commission.
	●	Form 10-Q filings on or after the date of the Order may not present financial information that has been reviewed by BF Borgers. Each quarterly period presented must be reviewed by a qualified, independent, PCAOB-registered public accountant that is permitted to appear or practice before the Commission.
	●	Form 20-F filings on or after the date of the Order may not include audit reports from BF Borgers. Each fiscal year presented must be audited by a qualified, independent, PCAOB-registered public accountant that is permitted to appear or practice before the Commission.

Exchange Act reports that were filed before the date of the Order do not necessarily need to be amended solely because of the Commission's entry of the Order. However, issuers should consider whether their filings may need to be amended to address any reporting deficiencies arising from the BF Borgers engagement."

For more details please consult:

https://www.sec.gov/newsroom/speeches-statements/staff-statement-borgers-05032024

As a result of this finding, the Company engaged Fruci & Associates II, PLLC ("Fruci"), PCAOB ID # 05525,as their successor auditor in order to re-audit the Financial Statements for the years ended December 31, 2023 and 2022. Fruci's restated Financial Statements were disclosed in the Company's Form 10-K/A on January 13, 2025, wherein the restatement findings are presented under "Note 2 - Restatement of Previously Issued Financial Statements" and read as follows:

During the re-auditing process, the Company concluded that for shares issued pursuant to the Exchange Exemption in Rule 3(a)(9), the company historically valued these shares at the same price as an ongoing capital raise pursuant to Section 4(a)(2) of the Securities Act and/or Rule 506 of Regulation D promulgated under the Securities Act. In retrospect this approximation of Fair value based on the recommendations with ASC 820 - Fair Value Measurement, was not concluded to be precise enough, and that we would need to define a more precise value based on market price at the time of issuance. In accordance with the guidance of ASC 820 concerning for Lack of Registration Premium, shares that are restricted for six months under SEC Rule 144 generally see a 20%-30% discount on market price. The Company has opted for a 25% discount to the market price at the date of issuance based on the Company's elevated volatility, and to the illiquidity of the high number of shares issued in these transactions.

The Company also concluded that for shares issued pursuant to the Exchange Exemption in Rule 701, the company historically valued these shares at the weighted average market price for the period the benefit was earned. In retrospect this approximation of Fair value based on the recommendations with ASC 820 - Fair Value Measurement, was not concluded to be precise enough, and that we would need to define a more precise value based on market price at the time of issuance. In accordance with the guidance of ASC 820 the shares will be valued at the market price of the day closest to the date of awarded grant.

Finally, the Company discovered some timing issues, where the accruals had not been sufficiently allocated, or had been allocated to the incorrect accounting period.

Therefore, the Company, in consultation with its Audit Committee, concluded that its previously issued Financial Statements for the years ended December 31, 2023, and 2022 (the "Affected Periods") should be restated because of a misapplication in the guidance around the valuation for certain of our outstanding shares of Common Stock (the "Shares") and should no longer be relied upon.

Impact of the Restatement

The impact of the restatement on the balance sheets, statements of operations and statements of cash flows for the Affected Periods is presented below. The restatement had no net impact on net cash flows from operating, investing or financing activities.

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