Section 4 – Matters Related to Accountants and Financial Statements
Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.
On November 13, 2014, the Board of Directors (the “Board”) of Capstone Financial Group, Inc. (the “Company”) concluded that the previously issued audited consolidated financial statements and other financial information contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013 failed to properly account for certain financial information. Consequently, the Board has concluded that for comparative purposes the previously issued unaudited financial statements and certain other financial information contained in the Company’s Quarterly Reports on Form 10-Q for the fiscal periods ended March 31, 2014 and June 30, 2014, and the Company’s earnings releases and other financial communications subsequent to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013 (collectively, the “Prior Financial Information”), should no longer be relied upon.
The Board found through a thorough review that its Prior Financial Information did not properly reflect approximately $2.6 million in loans by a related party and approximately $3.2 million in Company expenses in 2013. The Company has engaged a new accountant and new auditor to revise and amend the Prior Financial Information.
The Board has discussed the matters disclosed in this Form 8-K pursuant to this Item 4.02 with the Company's current independent registered public accounting firm, Squar Milner, and its former independent registered public accounting firm, Seale & Beers, CPAs.
As a result of this, Management is reassessing its internal accounting process and control procedures and will report its conclusions in the 2014 Form 10-K.
The Company intends to file an amended Form 10-K with restated financial statements for the fiscal year ended December 31, 2013 and amended Form 10-Q with restated financial statements for the fiscal quarters ended March 31, 2014 and June 30, 2014 (collectively, the “Amended Reports”) as soon as practicable to correct the errors. The Amended Reports may also correct certain other immaterial errors in connection with the restatement.
Caution Regarding Forward-Looking Statements
This Current Report on Form 8-K contains "forward-looking” statements, as that term is defined under the federal securities laws, relating to the Company's future plans, expectations, beliefs, intentions, and prospects. Forward-looking statements include, among others, statements about our plans to restate our consolidated financial statements and amend prior SEC filings, the timing of such restatement, and the restatement’s effect on our prior consolidated financial statements. These statements are often, but not always, made through the use of words or phrases such as "may", "will", "future", "anticipate", "estimate", "plan", "project", "continuing", "ongoing", "expect", "look forward to", "believe", "intend", "predict", "potential", "opportunity", and similar expressions or any other statements that are not historical facts. These forward-looking statements are subject to substantial risks, estimates, assumptions, uncertainties, and changes in circumstances that may cause our actual results, performance, or achievements to differ materially from those expressed or implied in any forward-looking statement. All information set forth in this Report is current as of November 13, 2014. The Company disclaims any intention or obligation to update or revise any forward-looking statements to reflect subsequent events and circumstances, except to the extent required by applicable law.
