Adapti restates quarters ended September 30 and December 31, 2025 due to reverse-merger accounting error
Adapti's board concluded on July 14, 2026 that the company's unaudited condensed consolidated financial statements for the quarters ended September 30, 2025 and December 31, 2025 should no longer be relied upon. The error stems from the July 14, 2025 acquisition of Ballengee Group, LLC, which was originally accounted for with Adapti as the accounting acquiror but should have been treated as a reverse recapitalization with Ballengee Group as the accounting acquiror. The company intends to restate the affected financial statements in preparation for its fiscal year ended March 31, 2026.
Key facts
- Ballengee Group, although the legal acquiree, should have been identified as the accounting acquiror in the Transaction
- The Transaction should be accounted for as a reverse recapitalization of Ballengee Group
- Unaudited condensed consolidated financial statements for quarters ended September 30, 2025 and December 31, 2025 filed on November 19, 2025 and February 17, 2026 should no longer be relied upon
- James Ballengee received 6,500,000 shares of common stock representing approximately 81.0% of the Company's issued and outstanding shares upon closing on July 14, 2025
- Material errors relating to the accounting treatment of the Transaction
Why it matters
The restatement affects the first two quarters following Adapti's acquisition by Ballengee Group's founder, who gained control with an 81% stake; the reverse-recapitalization classification materially changes how the business combination's assets, liabilities, and equity are presented to shareholders and regulators.
Share
Derived from 8-K filed 2026-07-20. Not investment advice. View the source filing on SEC.gov →