SDR Drone, Inc. Restates 2024–2025 Financials; Prior Reports Not Reliable

What Happened
SDR Drone, Inc. (SDCO) filed an 8-K on Sept. 9, 2026, reporting that management and its auditor concluded previously issued financial statements for the years ended Dec. 31, 2024 and Dec. 31, 2025 should no longer be relied upon. The company originally filed its 2025 Form 10‑K on April 28, 2026 (auditor Integritat CPA, report dated April 27, 2026) and then discovered additional issues in May 2026. SDR Drone filed Amendment No. 1 to the 2025 Form 10‑K (10‑K/A) on May 28, 2026 with restated consolidated financial statements and a dual‑dated auditor’s report.

Key Details

• Restatement impact 2025: Net loss increased by $1,569,224; accumulated deficit at Dec. 31, 2025 rose from $3,745,941 to $5,315,165. Major causes: convertible note accounting, accrued interest adjustments, reclassification of a derivative fair‑value adjustment to additional paid‑in capital, and redetermination of derivative liabilities.
• Restatement impact 2024: Net loss increased by $826,206; accumulated deficit at Dec. 31, 2024 increased from $3,096,015 to $3,922,221; restated basic and diluted net loss per share for 2024 is $(0.56). Major corrections included $555,195 revenue overstatement, a $105,326 note receivable write‑off, misclassified cash of $52,355, and several period‑end accrual corrections.
• Interim filings affected: The company said unaudited Q1, Q2, and Q3 2025 Form 10‑Q financials should not be relied upon to the extent they presented a Dec. 31, 2024 balance sheet or comparative 2024 amounts.
• Documents to use: Investors should refer to the restated 10‑K filed Apr. 28, 2026 (comparative 2024 amounts) and the 10‑K/A filed May 28, 2026 for the corrected 2025 and 2024 statements; updated 10‑Qs have also been filed for interim periods.

Why It Matters
Restatements change reported net losses, equity balances and certain balance sheet items, which can affect investor assessments of company performance, valuation and compliance with any debt covenants or financing terms tied to financial metrics. Retail investors should stop relying on the originally issued 2024 and 2025 financials and the specified interim reports and instead review the restated 10‑K/A and subsequent 10‑Qs for accurate financial information.