Business Context and Reporting Period
Company: SOLESENCE, INC. (SLSN)
Filing Type: Form 8-K (Current Report)
Date of Report: August 21, 2026 (Earliest event reported: August 17, 2026)
Context: The Company is notifying the market of a material accounting error regarding inventory costing that necessitates a restatement of historical financial statements.
Key Financial Metrics
This filing does not provide specific numerical values for revenue, profit, cash flow, margins, debt, or liquidity. Instead, it discloses that previously reported figures for the following metrics were misstated due to inventory errors:
- Inventories (Overstated)
- Cost of Revenue (Misstated)
- Gross Profit
- Operating Income (Loss)
- Income (Loss) Before Income Taxes
- Net Income (Loss)
- Basic and Diluted Earnings (Loss) Per Share
- Accumulated Deficit
- Total Stockholders' Equity
Material Changes and Error Details
The Company identified errors in its historical accounting for labor and overhead included in inventories. The specific deficiencies in the historical process included:
- Use of budget-based percentages and allocation bases that were not sufficiently supported.
- Failure to consistently limit capitalized costs to eligible acquisition and production costs.
- Failure to allocate variable overhead based on actual activity.
- Failure to allocate fixed overhead based on normal capacity.
- Failure to adjust standard or budgeted amounts to approximate actual cost.
Consequently, the Company concluded its historical process did not comply with ASC 330 (Inventory). This resulted in overstated inventories and misstated cost of revenue.
Guidance, Outlook, and Management Commentary
Restatement Scope: On August 17, 2026, the Audit Committee, Board of Directors, and Executive Officers concluded that previously issued consolidated financial statements for the following periods should no longer be relied upon and must be restated:
- Annual Periods: Years ended December 31, 2023, 2024, and 2025.
- Quarterly Periods: Quarters ended March 31, 2024; June 30, 2024; September 30, 2024; March 31, 2025; June 30, 2025; September 30, 2025; and March 31, 2026.
Next Steps: The Company expects to file amendments to its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q in the coming weeks. The Audit Committee has discussed these matters with the Company's independent accountant.
Investor Verification Checklist
- Verify the specific quantitative impact of the restatement on net income and EPS once the amended 10-K and 10-Q filings are released.
- Confirm the timeline for the filing of amended reports for the years 2023, 2024, and 2025.
- Review the Company's updated internal controls over financial reporting to ensure the inventory costing methodology now complies with ASC 330.
- Monitor for any additional disclosures regarding the independent accountant's review of the error correction.