CARDIFF INTERNATIONAL, INC. (OTCMKTS:CDIF) Files An 8-K Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Reviewitem 4.02, in the previous 8-K filed July 27, 2017; 8-K filed August 22, 2017 ; and the 8-K filed August 30, 2017.
Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review
On July 24, 2017 the Board of Directors (the “Board”) of Cardiff International, Inc. (the “Company”) concluded that the unaudited financial statements for the 1st Quarter 2017 (the “Relevant Period”), as previously filed as part of the Company’s previously issued unaudited consolidated financial statement as of and for the quarter ended March 31, 2017 should no longer be relied upon. The Company will restate its unaudited consolidated financial statements for the Restated Period to reflect adjustments in the fair market value.
The Company, discussed with Malone Bailey its independent auditors and have concluded to restate its financial statements for the Relevant Period to correct the identified accounting and disclosure errors due to unwinding the Acquisition Agreement with Consulting Services Support Corporation (CSSC Corp) and its subsidiaries Decision Technology Corporation and CSSC Services and Solutions, Incorporation (collectively referred to as “CSSC Group”), which was entered into on March 10, 2017. Upon rescission of the contract, CSSC Corp shall keep their finance business and the Company does not have to issue the stock. The contract between CSSC Corp and the Company is rendered a nullity.
In addition the Company identified errors related to understatement of derivative liabilities as of March 31, 2017, and change in the fair value of the derivative liability for the three months ended March 31, 2017. The facts underlying the Company’s original conclusion is that there were no derivative liabilities incurred when the convertible promissory notes in total amount of $61,500 were entitled to be converted at the conversion price of $0.03 per share, which was considered as a floor. In fact the variable conversion price of such convertible promissory notes triggered derivative liabilities of the Company and tainted the convertible notes with fixed conversion price.
On August 23, 2017 the Board of Directors (the “Board”) of Cardiff International, Inc. (the “Company”) concluded that the unaudited financial statements for the 2nd Quarter 2017 (the “Relevant Period”), as previously filed as part of the Company’s previously issued unaudited consolidated financial statement as of and for the quarter ended June 30th, 2017 should no longer be relied upon.
The Company, discussed this matter with Malone Bailey its independent auditors have concluded to restate its financial statements for the Relevant Period to correct the identified accounting and disclosure errors due to unwinding the Acquisition Agreement with American Cycle Finance Incorporation (collectively referred to as “ACF”), which was entered into on March 29, 2017. Upon rescission of the contract, ACF shall keep their finance business and the Company does not have to issue the stock. The contract between ACF and the Company is rendered a nullity.
Accordingly, all the financial statements as of March 31, 2017 and June 30th, 2017 or the first and second quarter have been restated via the filing of the amended Form 10-Q for the quarters of March and June 2017.
About CARDIFF INTERNATIONAL, INC. (OTCMKTS:CDIF)
Cardiff International, Inc. is a holding company with holdings of various companies. The Company is focused on the acquisition of undervalued companies with high growth potential, income-producing commercial real estate properties, and high return investments. Its segments include Mobile home lease (We Three), and Company-owned Pizza Restaurants (Romeo’s NY Pizza). The mobile home lease segment establishes mobile home business as an option for a homeowner wishing to avoid down payments, maintenance costs, monthly mortgage payments and high property taxes. The Company-owned Pizza Restaurant segment includes sales and operating results for all Company-owned restaurants. The Company, through Mission Tuition, offers a merchant shopping network in America consisting of merchants offering in-store savings and coupon savings with local, regional and national merchants throughout America. With each purchase, members earn rebates, which go directly into their educational savings account.
