Auditor Contradicts Company, Citing "Multiple Errors" and Unreliable Financials Leading to Dismissal

summarizeSummary

An amended 8-K reveals the dismissed auditor, Sadler Gibb & Associates, identified multiple errors in prior financial statements and warned they "may not be reliable" before the company ceased communications and terminated their engagement.

check_boxKey Events

• Auditor Contradiction

  Sadler Gibb & Associates stated the termination was a "reportable event" under Regulation S-K, indicating disagreements, which was not fully disclosed in the initial 8-K.

• Financial Reliability Concerns

  The dismissed auditor warned management that previously issued financial statements for Q3 2025 and FY 2025 "may not be reliable" due to identified errors.

• Cessation of Communication

  The company ceased communications and terminated the auditor before their review of potential errors in financial statements was complete.

• SEC Involvement

  PreAxia is in communication with the SEC Office of Chief Accountant to resolve questions for their new accounting firm, M&K CPAs.

auto_awesomeAnalysis

This amended filing significantly escalates the severity of the previously reported auditor dismissal. The letter from Sadler Gibb & Associates explicitly states that the termination constitutes a "reportable event" due to disagreements, directly contradicting the company's initial disclosure. The auditor identified "multiple errors" in the August 31, 2025, financial statements and was examining potential errors in the May 31, 2025, annual statements, concluding that these financials "may not be reliable." The fact that the company ceased communications and terminated the auditor before the review was complete raises serious concerns about transparency and the integrity of past financial reporting. Investors should anticipate potential restatements and increased scrutiny from regulators.