STGC Startengine Crowdfunding Inc (PK)

Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.

During preparation for financial reporting related to the quarter ended March 31, 2022, and based on comments received from the Securities and Exchange Commission, the Company discovered certain classification errors (specifically for subscriptions receivable, allocated noncontrolling interest loss, and marketable securities) as well as an error in using aggregation of the fair value of the Warrants instead of segregating those amounts) in its previously reported financial statements for the year ended December 31, 2021. The Company’s management conducted an investigation with independent third-party consultants and the Company’s independent auditors. As a result of this investigation, the Company determined on August 3, 2022, that several accounts required reclassification to be in accordance with US GAAP. In addition, certain footnotes to such financial statements were required as a result of such changes. Accordingly, the Company made certain corrections to previously reported financial statements for the year ended December 31, 2021. The restatement also includes corrections for other errors identified as immaterial, individually and in the aggregate, to our consolidated financial statements.

The restated financial statements, including new notes to the audited financial statements and disclosure regarding the restatement in Note 1 to the audited financial statements for the periods ending December 31, 2021 and 2020, have been filed as Amendment No. 2 to the Company’s Form 10 on August 4, 2022.

The Company’s management has concluded that, in light of the classification errors and aggregation error described above, the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were not effective. To address this material weakness, management has devoted, and plans to continue to devote, significant effort and resources to the remediation and improvement of the Company’s internal control over financial reporting. While the Company has processes to identify and appropriately apply applicable accounting requirements, management has enhanced these processes in the past year by hiring an additional employee with a public accounting background specifically for the preparation of financial statements, and has begun working with an external consultant.

The Company’s management and board of directors have discussed the matters disclosed in this Current Report on Form 8-K pursuant to this Item 4.02 with BF Borgers CPA PC.

Forward-Looking Statements

This Current Report on Form 8-K includes “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Certain of these forward-looking statements can be identified by the use of words such as “believes,” “expects,” “intends,” “plans,” “estimates,” “assumes,” “may,” “should,” “will,” “seeks,” or other similar expressions. Such statements may include, but are not limited to, statements regarding the impact of the Company’s restatement of certain historical financial statements, the Company’s cash position and cash held in the Trust Account and any proposed remediation measures with respect to identified material weaknesses. These statements are based on current expectations on the date of this Current Report on Form 8-Kand involve a number of risks and uncertainties that may cause actual results to differ significantly. The Company does not assume any obligation to update or revise any such forward-looking statements, whether as the result of new developments or otherwise. Readers are cautioned not to put undue reliance on forward-looking statements.