UNITED STATES
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FORM
CURRENT REPORT
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SECURITIES EXCHANGE ACT OF 1934
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Item 4.02. Non-Reliance on Previously Issued Financial Statement or Related Audit Report or Completed Interim Review.
The Company’s management re-evaluated the Company’s accounting for convertible debt and determined that the Company may not have appropriately accounted for convertible debt in the Company’s financial statements as of and for the years ended December 31, 2022 and 2021 (“Affected Periods”), as presented in the Form 10-K filed with the Securities and Exchange Commission on April 17, 2023.
In consultation with the Company’s advisors, management ultimately determined that the conversion features in the Company’s convertible debt constituted embedded derivatives that the Company should have presented as a material derivative liability on the balance sheets, together with corresponding activities in the statements of operations and statements of cash flows during the Affected Periods.
During the course of the accounting and audit preparation process, management and its advisors identified other material errors and omissions impacting the Affected Periods, including but not limited to the areas of:
| ● | Incorrectly derecognized convertible debt | |
| ● | Accounting for warrants issued with convertible debt | |
| ● | Presentation and disclosure | |
| ● | General accounting | |
| ● | Undisclosed changes to historical comparative information presented in the filings |
As a result of the foregoing, the Company’s management and board of directors concluded that the Company’s previously issued financial statements as of and for the years ended December 31, 2022 and 2021, as presented in the Form 10-K filed with the Securities and Exchange Commission on April 17, 2023, should no longer be relied upon and plans to file an amended Form 10-K with restated financial statements for the Affected Periods.
The Company’s management has concluded that in light of the pervasive errors and omissions described above, a material weakness exists in the Company’s internal control over financial reporting and that the Company’s disclosure controls and procedures were not effective.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Date: April 25, 2024 | GEX Management, Inc | |
| By: | /s/ Sri Vanamali | |
| Sri Vanamali | ||
| Chief Executive Officer | ||