Item 8.01 Other Events
On November 17, 2020, Grow Capital, Inc. ("we," "us," "our," "Grow" or the
"Company") filed a Notification of Late Filing with the Securities and Exchange
Commission ("SEC') on Form 12b-25 pertaining to its Quarterly Report on Form
10-Q for the fiscal quarter ended September 30, 2020 (the "10-Q"). Due to the
complexity of the accounting issues arising out of businesses recently acquired,
the Company is unable to timely file the 10-Q within the 5-day extension period
afforded to the Company by filing the Form 12b-25.
Our first quarter 10-Q is a complex filing because our recent acquisitions
require us to analyze the Company's variable interests, including equity
investments, to determine if the Company has any variable interests in variable
interest entities. Generally accepted accounting principles ("GAAP") require a
reporting entity to consolidate a variable interest entity when the reporting
entity has a variable interest that provides it with a controlling interest in
the variable interest entity. The entity that consolidates a variable interest
entity is referred to as the primary beneficiary of that variable interest
entity. The Company and its auditors have determined, due to the recent
acquisitions, that certain additional related entities are variable interest
entities of which Grow is the primary beneficiary, and therefore GAAP requires
the consolidation of the variable interest entities with the financial
statements of Grow. Because of the extensive process necessary to compile this
information for SEC reporting, we are delaying our 10-Q filing.
Due to the delayed filing, the company expects the OTCQB to display a
notification that the Company is delinquent in its SEC periodic reporting
requirements. The Company anticipates filing its first quarter 10-Q prior to the
45 day cure period granted under OTCQB rules. During this cure period, the
Company may continue to be traded on the OTCQB market.
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