8-K: Freedom Holdings Appoints New Auditor After SEC Action Against Previous Firm

Freedom Holdings has replaced its auditor, BF Borgers, with Olayinka Oyebola & Co. after the SEC barred Borgers from practicing before the Commission.

Summary

• Freedom Holdings, Inc. has dismissed BF Borgers as their independent auditor, effective May 14, 2024.
• This decision was made after the SEC took action against Borgers, preventing them from appearing before the Commission.
• Olayinka Oyebola & Co. (OOC) has been appointed as the new auditor, also effective May 14, 2024.
• OOC will re-audit the company's financial statements for the fiscal year ended September 30, 2023, and subsequent interim periods.
• OOC previously served as the company's auditor before Borgers' appointment in December 2022.
• The company has also announced that FINRA has processed a Form 211 relating to the initiation of priced quotations for FHLD.
• Freedom Holdings is working with OTC Markets to gain a QB status.
• The company is actively pursuing its business plan, including potential mergers in the cannabis industry and purchasing a facility for cannabis product development.

Sentiment

Score: 4

Explanation: The document contains both positive and negative elements. The change of auditor due to SEC action is a significant negative, but the company's plans for growth and the FINRA approval are positive. Overall, the negative aspects outweigh the positives.

Positives

• The appointment of a new auditor, Olayinka Oyebola & Co., addresses the issue of the previous auditor being barred by the SEC.
• The processing of Form 211 by FINRA allows for priced quotations of FHLD stock.
• The company is actively pursuing its business plan, including potential mergers and facility purchases.
• The company is working towards gaining a QB status on the OTC Markets board.

Negatives

• The dismissal of BF Borgers as auditor was due to an SEC action, indicating a potential issue with the previous audit firm.
• The need to re-audit the 2023 financial statements may cause delays and additional costs.

Risks

• The SEC action against the previous auditor could raise concerns about the reliability of past financial statements.
• The re-audit of the 2023 financials could uncover further issues.
• The company's plans for mergers and acquisitions in the cannabis industry are subject to market conditions and regulatory approvals.
• The company's ability to achieve QB status on the OTC Markets board is not guaranteed.

Future Outlook

The company plans to aggressively pursue its business plan, including potential mergers in the cannabis industry and purchasing a facility for cannabis product development. They are also working towards gaining a QB status on the OTC Markets board.

Management Comments

• Mr. Vivian, Freedom Holding CEO stated, 'I want to thank Glendale Securities for all the assistance and confidence as we worked through the 15c211 application process.'
• Mr. Vivian also stated, 'We have been working diligently with FINRA requested information and documentation to complete the 15c211 review and with the completion of the review, the Company plans to aggressively pursue the business plan including but not limited to purchasing a facility to Extract Manufacture, Grow and Test cannabis products.'

Industry Context

The cannabis industry is experiencing significant growth and consolidation, making mergers and acquisitions a common strategy. The company's focus on this sector aligns with current industry trends.

Comparison to Industry Standards

• The change of auditors due to SEC action is not a typical event and may raise concerns compared to industry standards.
• The company's pursuit of a QB status on the OTC Markets board is a common step for companies seeking to increase visibility and liquidity.
• The company's plans to acquire a facility for cannabis product development is similar to other companies in the sector that are vertically integrating their operations.
• The company's stated intention to pursue mergers and acquisitions is a common strategy in the cannabis industry, with companies like Curaleaf, Trulieve, and Green Thumb Industries being active acquirers.

Stakeholder Impact

• Shareholders may be concerned about the change of auditors and the potential implications for the company's financial statements.
• Employees may be affected by the company's plans for mergers and acquisitions.
• Customers may be impacted by the company's plans to develop cannabis products.
• Suppliers may be affected by the company's plans to purchase a facility.

Next Steps

• Olayinka Oyebola & Co. will re-audit the financial statements for the fiscal year ended September 30, 2023, and subsequent interim periods.
• The company will work with OTC Markets to gain a QB status.
• The company will continue negotiations with companies in the cannabis industry for potential mergers.
• The company plans to purchase a facility for cannabis product development.

Key Dates

Keywords

auditor, SEC, financial statements, Olayinka Oyebola & Co., BF Borgers, FINRA, Form 211, cannabis, merger, OTC Markets, QB status