8-K: Groovy Company Replaces Auditor Amid SEC Suspension

Groovy Company, Inc. has dismissed its independent auditor, Olayinka Oyebola & Co., following the firm's suspension by the SEC, and has appointed Boladale Lawal & Co. as its new auditor.

Summary

• Groovy Company, Inc. (the Company) has dismissed its independent registered public accounting firm, Olayinka Oyebola & Co. (the Former Accountant), effective August 13, 2025.
• This dismissal follows an order by the Securities and Exchange Commission (SEC) on August 12, 2025, suspending the Former Accountant and its managing partner from practicing before the SEC.
• The SEC's action was related to final consent judgments entered against the Former Accountant and its managing partner for alleged violations of securities laws, including permanent injunctions and civil penalties.
• The Company acknowledges that the disclosure of the dismissal was delinquent.
• The Former Accountant's audit reports for fiscal years ended December 31, 2023, and December 31, 2024, included an explanatory paragraph expressing substantial doubt about the Company's ability to continue as a going concern.
• There were no disagreements on accounting principles or practices between the Company and the Former Accountant.
• The Company engaged Boladale Lawal & Co. (BLC) as its new independent registered public accounting firm on May 10, 2026.
• BLC's engagement includes a re-audit of the consolidated financial statements for the fiscal year ended December 31, 2024, with an audit fee of $30,000 per fiscal year.
• Effective May 1, 2026, Berj Abajian departed as Chief Executive Officer and Director, and Jeffrey D. Turner departed as Chief Legal Officer. John Morgan also departed as Vice President, Issuer Services.
• Franjose Yglesias was appointed Interim Chief Executive Officer on May 1, 2026, in addition to his role as Chief Technology Officer.
• The Company reduced its authorized common stock from twenty billion to one hundred million shares and restructured its authorized preferred stock on April 14, 2026.
• The Company also relocated its principal executive offices from Fairfield, New Jersey, to Atlanta, Georgia, effective May 1, 2026.

Sentiment

Score: 2

Explanation: StockSavvy.ai views this filing negatively due to the auditor's SEC suspension, going concern doubts, and multiple executive departures, despite the appointment of a new auditor and interim CEO.

Positives

• Appointment of a new, presumably PCAOB-compliant, independent auditor (Boladale Lawal & Co.) to ensure financial reporting integrity.
• The engagement of a new auditor includes a re-audit of the fiscal year 2024 financial statements, which may provide greater assurance.
• The departure of officers was not due to disagreements with the Company on any matters relating to operations, policies, or practices.
• Franjose Yglesias, the new Interim CEO, is a co-founder with extensive technical experience, including blockchain development.
• The restructuring of authorized capital stock may simplify the company's capital structure.
• The relocation of principal executive offices to Atlanta could potentially offer strategic advantages or cost efficiencies.

Negatives

• The company's previous auditor was suspended by the SEC and faced permanent injunctions and civil penalties, raising concerns about past financial oversight.
• The previous auditor's reports included an explanatory paragraph expressing substantial doubt about the Company's ability to continue as a going concern for fiscal years 2023 and 2024.
• The company acknowledges delinquent filings for the dismissal of its previous auditor and the departure of officers.
• The company has been without an engaged auditor for a significant interim period (August 13, 2025, to May 10, 2026), during which financial reports were unaudited.
• The departure of the CEO and other key officers simultaneously raises questions about leadership stability and operational continuity.
• The significant reduction in authorized common stock (from 20 billion to 100 million shares) could indicate a prior over-issuance or a strategic shift that may impact future equity financing.
• The company is still evaluating compensation for the Interim CEO, indicating potential uncertainty in executive compensation structures.

Risks

• The suspension of the former auditor by the SEC and related legal actions could cast a shadow over the reliability of past financial statements.
• The substantial doubt about the company's ability to continue as a going concern, as noted by the former auditor, remains a significant risk.
• The company's reliance on unaudited financial statements during the interim period without an engaged auditor increases the risk of undetected errors or misstatements.
• The simultaneous departure of the CEO and other officers could lead to a disruption in strategic direction and operational execution.
• The company's ability to attract and retain qualified personnel, especially in light of past auditor issues and leadership changes, could be a challenge.
• The restructuring of authorized capital stock, while potentially simplifying the structure, may also reflect underlying financial challenges or a need for future capital raises.
• The company's disclosure of delinquent filings suggests potential internal control weaknesses or compliance issues.

Future Outlook

The company has appointed a new auditor and an interim CEO, and has restructured its capital stock. The company is evaluating compensation for the interim CEO and will disclose any arrangements by amendment. The engagement of the new auditor includes a re-audit of the 2024 financial statements.

Management Comments

• The Company acknowledges that the disclosure required by Item 4.01(a) of Form 8-K with respect to the dismissal of the Former Accountant should have been made within four business days of August 13, 2025 in accordance with General Instruction B.1 of Form 8-K, and the filing of this disclosure is delinquent in that respect.
• The Company acknowledges that the disclosure required by Item 5.02 of Form 8-K with respect to the events described in this Item 5.02 should have been made within four business days of May 1, 2026 in accordance with General Instruction B.1 of Form 8-K, and the filing of this disclosure is delinquent in that respect.
• To the extent the effective date of the Articles of Amendment described above preceded this Current Report on Form 8-K by more than four business days, the Company acknowledges that the disclosure required by Item 5.03 of Form 8-K with respect to the Articles of Amendment should have been made within four business days of such effective date in accordance with General Instruction B.1 of Form 8-K, and the filing of this disclosure is delinquent in that respect.
• The Company is making this Item 8.01 disclosure for the benefit of investors and other persons relying upon publicly available Company information; the change of principal office address is not, in itself, a matter requiring disclosure under any other item of Form 8-K.

Industry Context

StockSavvy.ai notes that the dismissal of an auditor due to SEC action is a significant event that can impact investor confidence and scrutiny. The appointment of a new auditor, especially one that will conduct a re-audit, is a necessary step to restore credibility, but the underlying issues that led to the former auditor's suspension and the going concern opinion will remain critical areas of focus for investors.

Management Changes

Corporate Governance

Legal Proceedings

• Securities and Exchange Commission v. Olayinka Temitope Oyebola and Olayinka Oyebola & Co. (Chartered Accountants), No. 24-cv-7376 (S.D.N.Y.): resulted in permanent injunctions and civil monetary penalties for Mr. Oyebola and the Former Accountant.
• SEC Rule 102(e) order suspending Olayinka Oyebola & Co. and its managing partner from appearing and practicing before the Commission as accountants.

Related Party Transactions

• JDT Legal, the firm of former Chief Legal Officer Jeffrey D. Turner, continues to provide legal services to the Company on an outside-counsel basis.

Stakeholder Impact

• Shareholders: Potential concerns regarding past financial reporting integrity due to the former auditor's suspension and going concern opinion. The capital stock restructuring may affect future dilution and equity value.
• Employees: Potential uncertainty due to leadership changes, particularly the departure of the CEO. The company's financial health (going concern) may also impact job security.
• Creditors: The going concern opinion raises concerns about the company's ability to meet its financial obligations.
• Investors: Increased scrutiny due to auditor issues, delinquent filings, and leadership changes. The re-audit and new auditor engagement are positive steps, but the underlying financial health remains a key concern.

Next Steps

• Boladale Lawal & Co. will audit the Company's consolidated financial statements for the fiscal years ended December 31, 2024, and December 31, 2025.
• The Company is evaluating compensation for the Interim CEO and will disclose any arrangements by amendment.
• The Company intends to provide Item 404(a) information regarding Franjose Yglesias in an amendment to this Current Report on Form 8-K.

Key Dates

Recommendation

The company has made significant changes, including a new auditor and interim CEO, and has restructured its capital. However, the prior auditor's SEC suspension, the going concern opinion, and multiple executive departures create substantial uncertainty. While the re-audit and new auditor are positive steps towards restoring confidence, the fundamental financial health and operational stability need to be demonstrated before a more positive recommendation can be made. A 'hold' allows investors to monitor these developments.

Keywords

Auditor Change, SEC Suspension, Going Concern, Form 8-K, Financial Reporting, Corporate Governance, Leadership Change, Capital Stock Restructuring