GlobalTech Says 2025 and 2026 Financials Can't Be Relied On

What happened

GlobalTech Corporation's audit committee concluded on September 29, 2026, that three sets of previously issued financial statements contain material errors and should no longer be relied upon, according to a Form 8-K filed with the SEC on October 2, 2026. The statements affected are the audited consolidated financials for the year ended December 31, 2025, included in the annual report on Form 10-K filed March 31, 2026; the unaudited condensed consolidated financials for the three months ended March 31, 2026, filed May 15, 2026; and the unaudited condensed consolidated financials for the three and six months ended June 30, 2026, filed August 13, 2026.

The filing attributes the problem to how the company accounted for whether its deferred tax assets were realizable as of December 31, 2025. The company states that the error requires an additional valuation allowance of approximately $8.40 million, and that its earlier accounting did not appropriately weigh objectively verifiable negative evidence at that date and placed undue reliance on subjective projections of future taxable income.

The company also said management identified additional material weaknesses in internal control over financial reporting as of December 31, 2025, and concluded that disclosure controls and procedures were not effective as of that date. It said it is still evaluating the effect of the error on controls as of March 31 and June 30, 2026, and is developing a remediation plan.

Shares closed at $4.79 on the event date, down 3.82% from the prior close of $4.98, according to the price data provided.

The numbers being restated

The filing lists the expected effects in the year-end 2025 statements. On the balance sheet, deferred tax asset would be reduced to zero, and a deferred tax liability of $5.76 million previously offset against deferred tax assets would instead be presented as a non-current liability. Total assets would fall from $103.15 million to $100.50 million, while total liabilities would rise from $63.31 million to $69.07 million.

Shareholders' equity would decline from $39.83 million to $31.43 million, reflecting an increase in accumulated deficit from $39.82 million to $44.46 million and a decrease in non-controlling interest from $60.12 million to $56.35 million.

On the 2025 statement of operations, tax expense would increase from $0.29 million to $8.69 million, widening loss after taxation from $3.15 million to $11.55 million. Comprehensive loss would grow from $2.11 million to $10.51 million. Basic and diluted loss per share would change from $(0.01) to $(0.04). The total valuation allowance as of December 31, 2025 would increase to $11.77 million.

The company said the error did not affect its cash position, cash flows, revenues or liquidity, and that the figures are preliminary and may change. It said the March 31, 2026 and June 30, 2026 quarterly filings will restate comparative information to reflect the correction.

What this means

A Form 8-K is the current-report form public companies file with the SEC to disclose material events between their regular quarterly and annual reports. Item 4.02, cited here, is the specific item reserved for telling investors that previously issued financial statements should no longer be relied upon. Triggering an Item 4.02 is a decision made by the company's audit committee, the board committee responsible for overseeing the outside auditor and financial reporting, after discussion with management and the independent accounting firm. In this case that firm is Zahid Jamil & Co, which the filing says discussed the matter with the audit committee before the 8-K was filed.

The accounting issue is about deferred tax assets. A deferred tax asset is a balance-sheet item representing taxes the company expects to recover or offset in the future, usually because it has recorded losses or temporary differences that should reduce taxes later. Because that benefit depends on the company earning taxable income in the future, accounting rules require a company to judge whether the asset is more likely than not to be realized. If not, it records a valuation allowance, which is an offset that reduces the deferred tax asset. Here, the company concluded a roughly $8.40 million allowance should have been recorded as of December 31, 2025. The valuation allowance is an accounting entry, which is why the filing says cash, cash flows, revenues and liquidity were not affected.

The company references ASC 740, the accounting standard governing income taxes, and ASC 250, the standard governing accounting changes and error corrections. ASC 250 is what makes this a restatement rather than simply a new estimate: it applies when previously issued statements contained an error, and the remedy is to reissue corrected statements.

The filing does not say what caused the misjudgment beyond describing an over-reliance on projections. It does not identify any external event, transaction or third party. The company's plan, as stated in the filing, is to file an amended annual report on Form 10-K/A and amended quarterly reports on Form 10-Q/A as soon as practicable, with restated financial statements, revised management's discussion and analysis, and updated disclosures on internal controls. The filing says the estimates remain preliminary and could change.

About the company

GlobalTech Corporation is incorporated in Nevada and listed in the filing under the industry classification Telephone Communications (No Radiotelephone). Its principal offices are at 3550 Barron Way, Suite 13a, Reno, Nevada. The filing states that the company has no securities registered under Section 12(b) of the Exchange Act, which means its stock is not listed on a national exchange such as the NYSE or Nasdaq. The filing is signed by chief executive officer Dana Green.