other material
confidence high
sentiment negative
materiality 0.85
Feel the World (XERO Shoes) to restate 2024-2025 financials after preferred stock misclassification
Feel The World, Inc.
- Audit committee concluded on Sept 22, 2026 that audited FY2025 and FY2024 statements and interim Q1 2026/2025 statements should be restated and no longer be relied upon.
- Series A Preferred Stock was misclassified since its Dec 2, 2020 issuance, carried at $368 par instead of accreted redemption value of $20,798,604 at March 31, 2026.
- Senior Preferred Stock issued March 21, 2025 was carried at $50 par rather than net proceeds of $4,859,967; both instruments now reported in temporary equity.
- Management identified a material weakness in internal control over complex equity instruments; restatement had no effect on total assets, revenue, net loss, cash flows or EPS.
- Q1 2026 revenue was $15,983,170 with net income of $472,603, versus a Q1 2025 net loss of $1,712,095; cash fell to $5,598,365 from $10,134,276.