8-K/A: Spectral Capital Corporation Reaffirms Reliability of Past Financial Statements, Correcting Prior Non-Reliance Disclosure

Spectral Capital Corporation has filed an amendment to its previous 8-K report, withdrawing its statement of non-reliance on financial statements for fiscal years 2022, 2023, and interim periods, affirming their continued reliability.

Summary

• Spectral Capital Corporation (the 'Company') filed Amendment No. 1 to its Current Report on Form 8-K, originally filed on May 6, 2025.
• The amendment specifically corrects and revises the disclosure in Item 4.02 of the Original Report, which had indicated non-reliance on previously issued financial statements or audit reports.
• The Company had initially stated, based on discussions with its former independent auditor, Michael Gillespie & Associates, PLLC (MG&A), that financial statements for fiscal years ended December 31, 2023 and 2022, and interim periods within 2023 and 2024 (the 'Affected Periods'), should no longer be relied upon.
• Following an internal review and thorough re-evaluation of accounting records, supporting documentation, and underlying transactions, the Company determined that the prior disclosure of non-reliance was made in error.
• Spectral Capital Corporation concluded that there are no material errors in the financial statements for the Affected Periods and that they continue to present fairly the Company's financial position, results of operations, and cash flows in accordance with U.S. GAAP.
• The Company has formally withdrawn its prior conclusion regarding non-reliance and affirms that the financial statements for the Affected Periods remain reliable and will not be restated.

Sentiment

Score: 7

Explanation: The sentiment is positive because the Company corrected a significant negative disclosure (non-reliance on financial statements), affirming their reliability and avoiding a restatement. However, the initial error and associated risks (litigation, reputational damage, auditor issues) temper the overall positive score.

Positives

• The Company has affirmed the reliability of its previously issued financial statements for fiscal years ended December 31, 2023 and 2022, and interim periods within 2023 and 2024.
• No restatement of the affected financial statements will be required, indicating that the Company's internal review found no material errors.
• The correction clarifies the Company's financial reporting status, potentially reducing uncertainty for investors and stakeholders.

Negatives

• The initial erroneous disclosure of non-reliance on financial statements could have caused confusion and concern among investors.
• The Company's former independent auditor, Michael Gillespie & Associates, PLLC (MG&A), was involved in the initial discussions that led to the erroneous non-reliance statement, potentially indicating past issues with auditor relations or communication.
• The incident may lead to reputational damage for the Company.

Risks

• Potential impacts stemming from the dismissal of Michael Gillespie & Associates, PLLC (MG&A) as the Company's former independent auditor.
• Risk of litigation or regulatory action arising from these matters or from the failure to timely file the Company's Annual Report on Form 10-K for the year ended December 31, 2024.
• Uncertainty regarding the timing of the review by, and the conclusions of, RBSM (implied new auditor) regarding these matters and its potential impact on the financial statements.
• Potential reputational damage that the Company may suffer as a result of these matters or the dismissal of MG&A.
• The impact of these matters and the dismissal of MG&A on the value of the Company's stock.
• Risk that the filing of the Annual Report on Form 10-K will take longer than anticipated.

Future Outlook

The Company's forward-looking statements indicate that actual results could differ materially due to factors such as the potential impacts of MG&A's dismissal, risks of litigation or regulatory action, the timing and conclusions of RBSM's review, potential reputational damage, impact on stock value, and the timing of the Annual Report on Form 10-K filing. The Company does not undertake to release publicly any revisions to these forward-looking statements unless required by law.

Management Comments

• "Following our internal review of the affected financial statements, the Company has determined that the prior disclosure was made in error."
• "Upon a thorough re-evaluation of the relevant accounting records, supporting documentation, and underlying transactions, the Company concluded that there are no material errors in the financial statements for the Affected Periods and that such financial statements continue to present fairly, in all material respects, the financial position, results of operations, and cash flows of the Company for those periods in accordance with U.S. generally accepted accounting principles."
• "Accordingly, the Company hereby withdraws its prior conclusion that the financial statements for the Affected Periods should no longer be relied upon. The Company will not restate those financial statements and affirms that they remain reliable."

Industry Context

This filing primarily addresses a technical correction related to financial reporting reliability, rather than broader industry trends. It highlights the critical importance of accurate and reliable financial disclosures within the regulatory framework of the U.S. Securities and Exchange Commission.

Legal Proceedings

• Risk of litigation or regulatory action arising from these matters or from the failure to timely file the Company's Annual Report on Form 10-K for the year ended December 31, 2024.

Stakeholder Impact

• Shareholders: The affirmation of financial statement reliability should reduce uncertainty and potentially stabilize or positively impact stock value, which was likely negatively affected by the initial non-reliance statement.
• Regulatory Authorities (SEC): The Company is fulfilling its disclosure obligations by correcting prior information, which is crucial for regulatory compliance.
• Auditors (RBSM): The new auditor will be responsible for reviewing these matters and their impact, which could influence their ongoing relationship and audit opinions.
• Former Auditor (MG&A): The dismissal and the context of the initial erroneous disclosure may reflect negatively on the former auditor.

Next Steps

• The Company needs to ensure the timely filing of its Annual Report on Form 10-K for the year ended December 31, 2024.
• The review by RBSM regarding these matters and its impact on the financial statements is ongoing or anticipated.

Key Dates

Recommendation

Keywords

SEC filing, 8-K/A, Financial statements, Audit report, Non-reliance, Restatement, Corporate governance, Risk management, Spectral Capital Corporation, Michael Gillespie & Associates, RBSM