Filing Analysis
SecureTech Innovations, Inc. filed an amendment to its June 2025 8-K to include a reissued audit report for an acquired entity, Zhejiang Jizhu Technology Co., Ltd. The amendment was prompted by SEC staff comments to ensure compliance with Rule 3-05 of Regulation S-X regarding the audit of acquired businesses.
🚩 Red Flags
- SEC staff comment/inquiry regarding financial statement disclosures (though resolved in this filing).
📋 Key Facts
- The filing is an amendment (8-K/A) to an original report filed on June 24, 2025.
- The company previously reported the acquisition of Aiultraprod Group Limited, which holds a 90% interest in Zhejiang Jizhu Technology Co., Ltd.
- The amendment includes a reissued audit report from Gary Cheng CPA Limited covering fiscal years ended December 31, 2024, and December 31, 2023.
- The SEC staff requested the revision to ensure the audit report covered both years of the financial statements provided, as required by Regulation S-X.
- The company explicitly states that no financial amounts were restated, revised, or reclassified, and the auditor's opinion remains unqualified.
SecureTech Innovations has elected to forgo a previously planned spin-off of its subsidiary, AI UltraProd, electing instead to retain it as a permanent wholly owned subsidiary. This decision triggers the issuance of 357 additional shares of Series A Preferred Stock to the shareholder as contingent consideration.
🚩 Red Flags
- Significant potential dilution: Each of the 357 new preferred shares converts into 10,000 common shares, representing a massive potential increase in common share count (3,570,000 shares).
- Complexity of ownership: Involvement of entities in Hong Kong and the British Virgin Islands, and a minority interest in a Chinese company (Zhejiang Jizhu).
📋 Key Facts
- On August 13, 2026, the Company entered into a Permanent Subsidiary and Earnout Election Agreement.
- The Company will forgo the spin-off of AI UltraProd, Aiultraprod Group, and Zhejiang Jizhu to retain them as permanent subsidiaries.
- Issuance of 357 additional shares of Series A Preferred Stock to the Shareholder (AIUP Holding Limited) to satisfy the 'No Spin-Off Earnout'.
- The Additional Acquisition Shares were valued at a contractual price of $46,300 per share.
- Each share of Series A Preferred Stock is convertible into 10,000 shares of common stock.
- The issuance of shares was made without cash proceeds and is accounted for within equity.
SecureTech Innovations is dismissing its auditor (GCCPA) and engaging Marcum Asia CPAs LLP following the discovery that previous financial statements must be restated. The company identified material weaknesses in internal controls and errors regarding equity classification and asset liquidity.
🚩 Red Flags
- Auditor change combined with restatement (High Escalator)
- Going concern language in previous audit reports due to recurring net losses and accumulated deficit
- Material weakness in internal control over financial reporting regarding complex equity instruments and asset classifications
- Non-reliance on previously issued financial statements for multiple periods
- Lack of independent oversight/Audit Committee (remediating but historically present since 2017)
📋 Key Facts
- Dismissal of Gary Cheng CPA Limited (GCCPA) on July 31, 2026.
- Engagement of Marcum Asia CPAs LLP as the new independent auditor for upcoming quarterly and annual reviews/audits.
- Restatement required for fiscal year ended Dec 31, 2025, and interim periods ending June 30, 2025; Sept 30, 2025; and March 31, 2026.
- Errors identified include misclassification of redeemable non-controlling interest (permanent to mezzanine equity) and accounts receivable (current to non-current assets).
- Material weaknesses exist due to lack of an Audit Committee and lack of independent Board oversight.
SecureTech Innovations entered into share exchange agreements to cancel 4 million common shares in exchange for Series A Preferred Stock as part of a Share Reduction Plan. Additionally, the company issued 56,413 common shares to consultants valued at approximately $224,048.
🚩 Red Flags
- Ongoing 'Share Reduction Plan' suggests potential capital restructuring or distress management.
- Issuance of equity to consultants is a common method for compensation in micro-cap companies which can lead to dilution.
📋 Key Facts
- Entered into Share Exchange Agreements on November 5, 2025.
- Exchanged 4,000,000 common shares for 400 shares of Series A Preferred Stock.
- Common stock exchanged was canceled as part of an 'ongoing Share Reduction Plan'.
- Issued 56,413 common shares to two independent consultants at a valuation of $3.97 per share (totaling $224,048.75).
- Total common stock outstanding as of Nov 10, 2025: 31,370,414 shares.
- Total Series A Preferred Stock outstanding as of Nov 10, 2025: 18,095 shares.
SecureTech Innovations entered into a $150,000 convertible promissory note agreement with CFI Capital LLC. The note features a significant Original Issue Discount (OID) and a highly dilutive conversion mechanism.
🚩 Red Flags
- Highly dilutive 'death spiral' conversion feature (conversion at a 40% discount to market price)
- Significant Original Issue Discount (OID) indicates high cost of capital
- Potential for rapid share dilution that could depress stock price further
📋 Key Facts
- Principal amount of the Note: $150,000
- Original Issue Discount (OID): $15,000 (10% of principal)
- Maturity Date: September 18, 2026
- Conversion Price: 60% of the lowest trading price during the 15 trading days prior to conversion notice
- Conversion Window: Any time after the 6th monthly anniversary of the Note
SecureTech Innovations, Inc. announced the dismissal of its previous auditor, M&K CPAS, PLLC, and the appointment of Gary Cheng CPA Limited as its new independent registered public accounting firm on July 14, 2025.
🚩 Red Flags
- Auditor change in a micro-cap company often warrants scrutiny for potential underlying disagreements not explicitly disclosed (though none are claimed here).
- The company lacks an Audit Committee, which is common in smaller entities but reduces internal oversight capabilities.
📋 Key Facts
- Dismissal of M&K CPAS, PLLC effective July 14, 2025.
- Appointment of Gary Cheng CPA Limited (GCCPA) to audit fiscal year ending December 31, 2025, and subsequent interim periods.
- The company stated there were no disagreements with the previous auditor regarding accounting principles, financial statement disclosure, or auditing scope for the years 2023, 2024, or 2025 YTD.
- No adverse opinions or disclaimers of opinion were issued by M&K in recent audit reports.
SecureTech Innovations entered into an amendment to its Incubation Operating Agreement to restructure how equity interests are safeguarded. The change was necessitated by the inability to issue physical stock certificates as originally planned under the June 23, 2025 agreement.
🚩 Red Flags
- Operational friction: The inability to issue physical stock certificates suggests potential administrative or legal hurdles in the company's recent acquisition/stock purchase structure.
- Rapid succession of amendments: An amendment was filed only three weeks after the original agreement (June 23 to July 14), indicating instability in deal terms.
📋 Key Facts
- Amendment No. 1 to the Incubation Operating Agreement was executed on July 14, 2025.
- The amendment replaces Section 5 of the original agreement dated June 23, 2025.
- The change removes the requirement for a third-party escrow agent to safeguard equity interests.
- The restructuring is due to the fact that physical stock certificates could not be issued as originally contemplated.
SecureTech Innovations acquired 100% of Aiultraprod Group Limited via its subsidiary AI UltraProd, Inc. for $8.56 million in Series A Preferred Stock. The acquisition includes a Chinese subsidiary (Zhejiang Jizhu Technology Co., Ltd.) and an incubation agreement aimed at a future NASDAQ spin-off.
🚩 Red Flags
- Significant dilution risk: The issuance of Series A Preferred Stock to the seller is a large non-cash transaction.
- Complex offshore structure involving Wyoming (US), British Virgin Islands, Hong Kong, and China.
- High valuation per share ($46,300) for preferred stock in an unregistered private placement.
- The target company's primary assets are located in China, posing jurisdictional and regulatory risks.
📋 Key Facts
- Acquisition completed on June 23, 2025.
- Consideration: 185 unregistered shares of Series A Preferred Stock valued at $8,565,500 ($46,300 per share).
- Target company (Aiultraprod Group Limited) owns a 90% interest in Zhejiang Jizhu Technology Co., Ltd. (China).
- The target holds 24 patents with one pending and 20 more in development.
- Incubation Agreement established to support the target for a potential NASDAQ spin-off.
- As of June 24, 2025, SecureTech has 35,311,829 shares of common stock outstanding.
SecureTech Innovations entered into share exchange agreements with five shareholders to cancel 43.1 million common shares in exchange for Series A Preferred Stock as part of a 'Share Reduction Plan.' Additionally, the company announced the immediate resignation of its Vice President.
🚩 Red Flags
- Massive share cancellation/exchange involving five shareholders suggests significant restructuring or potential dilution/recapitalization activity.
- Immediate departure of a Vice President (Item 5.02).
- The scale of common stock being canceled (43.1M) relative to the current outstanding shares (35.3M) indicates highly aggressive capital restructuring.
📋 Key Facts
- On February 14, 2025, SecureTech entered into Share Exchange Agreements with five shareholders.
- The transaction involved exchanging 43,100,000 shares of common stock for 4,310 shares of Series A Preferred Stock.
- Common stock shares were canceled as part of a 'Share Reduction Plan'.
- As of February 19, 2025, common stock outstanding is 35,309,329 shares; Series A Preferred Stock outstanding is 17,710 shares.
- Vice President Abdikarim Farah resigned effective February 14, 2025.
- The company stated there were no disagreements with the departing officer.
SecureTech Innovations announced a major leadership transition involving the resignation of CEO Kao Lee and the appointment of J. Scott Sitra as new President and CEO. Additionally, the company issued common stock to settle outstanding payroll and commission debts.
🚩 Red Flags
- Liquidity strain indicated by using equity to settle payroll and commissions instead of cash.
- CEO/Founder departure (Kao Lee) from multiple roles simultaneously.
- New CEO has a history of SEC litigation (1998), though settled without admission of wrongdoing.
- Potential related-party conflict: The new CEO's consulting firm (Taurus Financial Partners, LLC) has been the company's regulatory consultant since inception.
📋 Key Facts
- Kao Lee resigned as President, CEO, PEO, and Director on January 14, 2025.
- J. Scott Sitra appointed as new President, CEO, and PEO; also joins the Board of Directors.
- 322,448 shares of common stock issued at $1.00 per share to settle outstanding accrued payroll and commissions.
- As of Jan 15, 2025, all accrued payroll has been settled.
- Total shares outstanding: 78,409,329.
- New CEO J. Scott Sitra is the owner of Taurus Financial Partners, LLC, which previously provided regulatory consulting to SecureTech.
SecureTech Innovations converted $50,000 in past-due accounts payable to a related party into a convertible note, which was immediately converted into 100 million common shares and subsequently exchanged for Series A Preferred Stock. This sequence of events resulted in massive dilution and significant restructuring of the company's equity cap table.
🚩 Red Flags
- Related-party transaction involving the conversion of past-due debt into equity.
- Extreme dilution: The issuance of 100 million shares significantly exceeds the existing common stock outstanding (78M), suggesting a massive restructuring or potential reverse split/recapitalization context.
- Conversion of debt to equity is often used by micro-cap companies to avoid immediate cash outflows, indicating liquidity constraints.
📋 Key Facts
- On Oct 23, 2024, $50,000 in past-due accounts payable to a related party was converted into a non-interest bearing convertible promissory note.
- On Oct 24, 2024, the note holder converted the $50,000 note into 100,000,000 shares of common stock.
- On Oct 25, 2024, a Share Exchange Agreement was signed to exchange 100,000,000 common shares for 10,000 shares of Series A Preferred Stock.
- As of Oct 28, 2024, total common stock outstanding is 78,076,881 shares and 13,400 shares of Series A Preferred Stock.
SecureTech Innovations is reporting significant delays in finalizing its fiscal year 2023 audit due to missing third-party verifications and a required valuation report. The company expects auditor signoff during the week of April 22, 2024.
🚩 Red Flags
- Delayed financial reporting/audit completion creates uncertainty regarding the accuracy of historical financials.
- Requirement for a 'valuation report' often indicates complex assets or potential impairment issues that auditors are scrutinizing.
- The inability to obtain third-party verifications can be a sign of poor internal controls or disputes with vendors/customers.
📋 Key Facts
- Fiscal year ending December 31, 2023 audit is currently incomplete.
- Delays are caused by missing third-party verifications and a necessary valuation report.
- Auditor: M&K CPSA, PLLC (PCAOB registered).
- Anticipated auditor signoff: Week of April 22, 2024.
- Company is an 'Emerging Growth Company'.
SecureTech Innovations, Inc. announced the cancellation of 100,000 shares of common stock as part of an ongoing 'Share Reduction Plan.' This action reduces the total number of outstanding shares to 77,966,881 as of February 5, 2024.
🚩 Red Flags
- Ongoing 'Share Reduction Plan' suggests a pattern of reducing share count to manage equity structure or potentially meet listing requirements/price thresholds.
- Trading on the OTC Pink Tier is often associated with lower liquidity and less stringent reporting requirements compared to major exchanges.
📋 Key Facts
- Date of event: February 1, 2024
- Action: Cancellation of 100,000 shares of common stock held by one shareholder
- Reason for action: Ongoing 'Share Reduction Plan'
- Total shares outstanding as of Feb 5, 2024: 77,966,881
- Ticker: SCTH (OTC Pink Tier)
SecureTech Innovations, Inc. has canceled 1,795,774 shares of outstanding common stock as part of an ongoing Share Reduction Plan. This action reduces the total number of issued and outstanding shares to 78,066,881.
🚩 Red Flags
- Share reduction activity often indicates an attempt to increase share price or manage capital structure in distressed scenarios.
- Company is trading on the OTC Pink Tier, which typically implies lower listing requirements and higher volatility/risk.
📋 Key Facts
- Date of event: January 16, 2024
- Shares canceled: 1,795,774 common stock shares ($0.001 par value)
- Reason for cancellation: Ongoing Share Reduction Plan
- Total shares outstanding as of Jan 18, 2024: 78,066,881
- Ticker/Exchange: SCTH (OTC Pink Tier)