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Item 4.02
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Non-Reliance on Previously Issued Financial Statements of a Related Audit Report of Completed Interim Review.
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On January 24, 2018, the Audit Committee of the Board of Directors (the “Audit Committee”) of El Capitan Precious Metals, Inc. (the “Company”) concluded, after discussions with Company management and MaloneBailey, LLP, the Company’s independent registered public accounting firm, that the interim financial statements contained in the Company’s Quarterly Reports on Form 10-Q for the quarters ended December 31, 2016, March 31, 2017 and June 30, 2017 (the “Affected Periods”) should no longer be relied upon for the reasons summarized below.
For each of the Affected Periods, the Company previously classified certain costs related to the development and operation of a pilot plant in Phoenix, Arizona as current assets (advances to vendor) on the Company’s balance sheet. The Company will be reclassifying such costs as operating expenses incurred during each of the Affected Periods. The amounts being reclassified for the quarters ended December 31, 2016, March 31, 2017 and June 30, 2017 are approximately $336,000, $435,000 and $503,000, respectively. Such reclassification will increase the Company’s net loss from operations and net loss for each Affected Period by the amount of costs being reclassified, resulting in the restatement of our financial statements for each of the Affected Periods. As soon as practicable, we intend to amend our Quarterly Reports on Form 10-Q for the Affected Periods to reflect the restatement of our financial statements for such Affected Periods.
The Audit Committee, and Company management have discussed the matters disclosed on this Current Report on Form 8-K with the Company’s independent registered public accounting firm, MaloneBailey, LLP.
This Current Report on Form 8-K contains “forward-looking” statements as such term is defined by the Securities and Exchange Commission in its rules, regulations and releases, which represent the registrant’s expectations or beliefs, including but not limited to, statements concerning the registrant’s operations, economic performance, financial condition, growth and acquisition strategies, investments, and future operational plans. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the generality of the foregoing, words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “estimate,” “might,” “plan,” “predict” or “continue” or the negative or other variations thereof or comparable terminology are intended to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainties, certain of which are beyond the registrant’s control, and actual results may differ materially depending on a variety of important factors, including uncertainty related to acquisitions, governmental regulation, managing and maintaining growth, the operations of the Company and its subsidiaries, volatility of stock price, commercial viability of any mineral deposits and any other factors identified in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2016, filed with the U.S. Securities and Exchange Commission on January 13, 2017, or discussed herein or in the Company’s other filings with the Securities and Exchange Commission. The Company does not intend or undertake to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. .