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Crypto Company (CRCW) to re-audit 2024 results after $1.32M error

Filing Impact
(Moderate)
Filing Sentiment
(Neutral)
Form Type
8-K

Rhea-AI Filing Summary

The Crypto Company announced that investors should no longer rely on its audited financial statements for the year ended December 31, 2024. The audit committee, management, and auditor Beckles & Co. determined the company inadvertently failed to record a $1,319,366 derivative liability related to certain convertible debt.

Beckles recommended a re-audit of the 2024 financial statements, and the company plans to file an amended Form 10-K to correct the error. The company also notes risks related to maintaining effective internal control over financial reporting and cautions that the ultimate impact of the adjustments may differ from current expectations.

Positive

  • None.

Negative

  • Material misstatement of 2024 accounts: The company and its auditor concluded prior audited financial statements for the year ended December 31, 2024 should not be relied upon due to an unrecorded $1,319,366 derivative liability related to convertible debt, requiring a re-audit and amended Form 10-K.

Insights

Material 2024 error triggers re-audit and amended 10-K.

The Crypto Company disclosed that its 2024 audited accounts omitted a $1,319,366 derivative liability tied to convertible debt. The auditor, Beckles & Co., has recommended a re-audit, and the company will amend its Form 10-K for the year ended December 31, 2024.

This type of non-reliance notice is significant because it signals weaknesses in internal controls over financial reporting. The company itself highlights the risk around maintaining effective controls, and the final impact on reported results will depend on the re-audit and amended filing.

Investors will need the amended 10-K to see how balance sheet items, earnings, or covenants are affected by recognizing the derivative liability and any related accounting adjustments across the 2024 period.

Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related Audit Report Governance
Previously issued financial statements should no longer be relied upon due to errors or restatements.
Unrecorded derivative liability $1,319,366 Related to certain convertible debt for year ended December 31, 2024
Affected period Year ended December 31, 2024 Previously audited annual financial statements to be re-audited
Original 10-K filing date June 13, 2025 Date of original Form 10-K that will be amended
Non-reliance decision date June 24, 2026 Audit Committee concluded prior 2024 statements should not be relied upon
derivative liability financial
"had inadvertently failed to record a derivative liability of $1,319,366 related to certain convertible debt"
A derivative liability is an obligation a company owes because of a derivatives contract—such as an option, future, swap, or forward—that has moved against it and now has negative value. Think of it like a settled bet that turned into a bill: if market moves go the other way, the company may have to pay cash or deliver assets. Investors care because these liabilities can create sudden losses, add leverage or counterparty risk, and change a company’s true financial exposure beyond its everyday operations.
convertible debt financial
"derivative liability of $1,319,366 related to certain convertible debt"
A convertible debt is a loan a company takes that gives the lender the option to swap the owed money for a set number of the company’s shares instead of getting cash back. It matters to investors because it can change who owns the company and how much their shares are worth: if lenders convert, existing shareholders can be diluted, but conversion can also signal confidence and reduce a company’s cash pressure — like getting a coupon that can be redeemed for store ownership rather than a refund.
internal control over financial reporting financial
"the Company’s ability to maintain an effective system of internal control over financial reporting"
Internal control over financial reporting is a company’s system of procedures and checks designed to make sure its financial statements are accurate and complete, like a set of guardrails and verification steps that catch mistakes or fraud before numbers are published. Investors care because strong controls make reported results more trustworthy, lower the risk of surprise restatements or regulatory problems, and give greater confidence when valuing the company or comparing it to peers.
forward-looking statements regulatory
"contains forward-looking statements which include, but are not limited to, the expected adjustments and impacts"
Forward-looking statements are predictions or plans that companies share about what they expect to happen in the future, like estimating sales or profits. They matter because they help investors understand a company's outlook, but since they are based on guesses and assumptions, they can sometimes be wrong.
emerging growth company regulatory
"Emerging growth company"
An emerging growth company is a recently public or smaller public firm that qualifies for temporary, lighter regulatory and disclosure rules to reduce the cost and effort of being public. For investors, it means the company may provide less historical financial detail and face fewer reporting requirements than larger firms, so it can grow more quickly but also carries higher uncertainty—like buying a promising early-stage product with fewer user reviews.

FAQ

What did The Crypto Company (CRCW) disclose about its 2024 financial statements?
The Crypto Company disclosed that its audited financial statements for the year ended December 31, 2024 should no longer be relied upon. The issue relates to an unrecorded derivative liability and will require a re-audit and amended Form 10-K.

How large is the error The Crypto Company (CRCW) identified in its 2024 results?
The company’s auditor determined the 2024 accounts inadvertently omitted a derivative liability of $1,319,366 tied to certain convertible debt. Recognizing this liability could change key 2024 figures once the re-audit and amended Form 10-K are completed.

What corrective actions will The Crypto Company (CRCW) take after finding the 2024 error?
Following auditor Beckles & Co.’s recommendation, The Crypto Company plans to conduct a re-audit of its 2024 financial statements. It intends to correct the error by filing an amendment to its original Form 10-K for the year ended December 31, 2024.

Why is The Crypto Company’s 2024 derivative liability issue important for CRCW investors?
The missing $1,319,366 derivative liability indicates a material misstatement in previously audited 2024 results. This raises concerns about internal controls over financial reporting and means past figures may change once the amended 10-K is filed.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 OR 15(d) of the

Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): June 24, 2026

 

The Crypto Company

(Exact name of registrant as specified in its charter)

 

Nevada   000-55726   46-4212105

(State or other jurisdiction

of incorporation)

  

(Commission

File Number)

  

(IRS Employer

Identification No.)

 

23823 Malibu Road, #50477, Malibu, CA   90265
(Address of principal executive offices)   (Zip Code)

 

(424) 228-9955

(Registrant’s telephone number, including area code)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
   
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
   
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
None   N/A   N/A

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

 

 

 

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

 

On June 24, 2026, the Audit Committee of the Board of Directors (the “Board”) of The Crypto Company, Inc. (the “Company”), in consultation with the Board, management, and the Company’s independent registered public accounting firm, Beckles & Co. (“Beckles”), concluded that the Company’s previously issued audited financial statements for the fiscal year ended December 31, 2024, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on June 13, 2025 (the “Original Filing”), should no longer be relied upon.

 

Beckles determined that, for the year ended December 31, 2024, the Company had inadvertently failed to record a derivative liability of $1,319,366 related to certain convertible debt. Based on this determination, Beckles recommended that the Company undertake a re-audit of its financial statements for such period.

 

The Company intends to correct this error by filing an amendment to the Original Filing.

 

The Audit Committee, the Board, and management have discussed the matters disclosed in this Item 4.02 with Beckles.

 

Cautionary Statement Regarding Forward-Looking Statements

 

This Current Report on Form 8-K contains forward-looking statements which include, but are not limited to, the expected adjustments and impacts to the Company’s financial statements as a result of the determination described under Item 4.02 above. These forward-looking statements are subject to the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. The Company’s expectations and beliefs regarding these matters may not materialize. Actual outcomes and results may differ materially from those contemplated by these forward-looking statements as a result of uncertainties, risks, and changes in circumstances, including but not limited to risks and uncertainties related to: the Company’s ability to maintain an effective system of internal control over financial reporting. Additional risks and uncertainties that could cause actual outcomes and results to differ materially from those contemplated by the forward-looking statements are included under the caption “Risk Factors” in the Company’s reports on Form 10-K, Form 10-Q or Form 8-K filed with the SEC from time to time. The forward-looking statements included in this Current Report on Form 8-K are made only as of the date hereof. The Company assumes no obligation and does not intend to update these forward-looking statements, except as required by law.

 

 

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Dated: June 24, 2026    
     
  THE CRYPTO COMPANY
     
  By: /s/ Ron Levy
  Name: Ron Levy
  Title: Chief Executive Officer, Interim CFO and Secretary

 

 

 

Source: View Original Filing on SEC EDGAR

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