Goldenwell Biotech, Inc. Issues Non-Reliance Notification on Prior Financial Statements
Goldenwell Biotech, Inc. (the “Company”), a Nevada-based biotech company, has announced a significant update that investors and shareholders should take note of. On May 26, 2026, the company filed a Form 8-K with the Securities and Exchange Commission (SEC), disclosing material issues regarding the reliability of its previously issued financial statements.
Key Points from the 8-K Filing
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Non-Reliance on Previous Financials: Goldenwell Biotech has determined that investors should no longer rely on its financial statements for the following reporting periods:
- Quarter ended March 31, 2025 (Form 10-Q filed May 27, 2025)
- Quarter ended June 30, 2025 (Form 10-Q filed September 12, 2025)
- Quarter ended September 30, 2025 (Form 10-Q filed December 8, 2025)
- Reason for Non-Reliance: The issue centers around the misapplication of US Generally Accepted Accounting Principles (GAAP) regarding the recognition of legal expenses. An invoice from the company’s legal counsel, dated September 23, 2025, for \$9,840 (covering legal services from May 21, 2024, to September 23, 2025), was incorrectly recorded in a single quarter instead of being allocated across the quarters in which the services were performed.
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Restatement Plan: The Company plans to restate its financial statements by approximately June 30, 2026, as follows:
- Amend March 31, 2025 Form 10-Q to recognize \$2,280 of legal fees.
- Amend June 30, 2025 Form 10-Q to recognize \$2,200 of legal fees.
- Amend September 30, 2025 Form 10-Q to recognize \$2,080 of legal fees.
- Additional Corrections: The Company also identified errors in the timing of revenue recognition related to a service contract, as well as the misclassification of prepaid fees to OTC Markets Group, Inc. These amounts should have been deferred and amortized over the contract term rather than recognized immediately.
- Auditor Confirmation: The Company’s independent registered public accounting firm, Michael Gillespie & Associates, PLLC, notified the Company of these issues and agreed with the disclosure under Item 4.02 of the Form 8-K.
Potential Implications for Shareholders
- This is a material restatement event. When a company announces that previously reported financial statements can no longer be relied upon, it is often considered a significant red flag by investors and analysts.
- Potential Impact on Share Price: Such restatements can create uncertainty regarding the company’s financial controls, the accuracy of reported earnings, and the overall reliability of management’s reporting. Shareholders should expect heightened volatility and potentially negative sentiment until restated financials are issued and the root causes are fully addressed.
- Regulatory and Legal Risks: The nature of the accounting errors—both expense and revenue recognition—may draw additional regulatory scrutiny and could expose the Company to legal or reputational risk.
- Emerging Growth Company: The company is classified as an “emerging growth company” and has elected not to use the extended transition period for complying with new or revised accounting standards, which may accelerate the adoption of future standards.
Next Steps & Timeline
- The company anticipates completing the restatement process by approximately June 30, 2026.
- Until the restatements are filed, the affected financial statements should not be relied upon for investment decisions.
- An official letter confirming the auditor’s agreement with the company’s disclosures is included as Exhibit 16.1 in the filing.
Conclusion
This announcement is highly material for investors in Goldenwell Biotech, Inc. The acknowledgment of accounting errors, the need for restated financial statements, and the auditor’s involvement collectively signal a period of increased risk and uncertainty for shareholders. Investors are advised to monitor further disclosures from the Company closely, particularly the release of restated financials and any additional commentary from management or regulators.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence and consult with a financial advisor before making any investment decisions. The information presented is based on publicly available filings as of the date stated and may be subject to change.
