Panamera Holdings Says Four Years of Financials Can't Be Relied On

What happened

Panamera Holdings Corporation, a Nevada-incorporated company that files under the management consulting services category and lists an Edmond, Oklahoma, P.O. box as its principal office, disclosed on October 26, 2026 that its Audit Committee concluded previously issued financial statements should no longer be relied upon.

The filing covers the audited consolidated financial statements for the fiscal years ended July 31, 2025, 2024, 2023 and 2022, and the unaudited condensed consolidated financial statements for quarterly periods ended April 30, 2022 through April 30, 2026. The company said related earnings releases, reports and communications describing those statements should also no longer be relied upon.

The company attributed the conclusion to its determination that it did not record or disclose obligations under an employment agreement dated February 18, 2022 with a former Vice President. The agreement, signed on the company's behalf by its then Chairman, provided an annual base salary of $250,000 for a three-year term. The company made no salary payments under it.

The former Vice President resigned effective February 9, 2024, and on March 1, 2024 filed a breach of contract suit against the company in the 80th Judicial District Court of Harris County, Texas. According to the filing, neither the employment agreement nor the lawsuit was disclosed to the Board of Directors, and neither was reflected in the financial statements for the periods in question. The lawsuit was also not disclosed under Legal Proceedings in the Form 10-K for the fiscal year ended July 31, 2024.

On August 17, 2026, the company entered into a settlement agreement, without admission of liability, under which it will pay $650,000 in installments through August 2027.

The expected corrections

Panamera said it expects the correction to increase accrued liabilities by approximately $112,000 at July 31, 2022, $362,000 at July 31, 2023, $506,000 at July 31, 2024 and $509,000 at July 31, 2025.

It expects operating expenses to increase by approximately $112,000 in fiscal 2022, $250,000 in fiscal 2023, $144,000 in fiscal 2024 and $3,000 in fiscal 2025.

The company described these amounts as preliminary and said they exclude payroll taxes, legal fees and other items still under evaluation.

Panamera said it will restate the affected periods in an amendment to a previously filed periodic report and in its Annual Report on Form 10-K for the fiscal year ended July 31, 2025, and will file them as soon as practicable. The Audit Committee discussed the matter with the company's independent registered public accounting firm, according to the filing.

What this means

A Form 8-K is the current report a U.S. public company must file with the SEC to announce material events between its regular quarterly and annual filings. Item 4.02 is the specific item reserved for telling investors that previously issued financial statements — or the audit report or interim review covering them — can no longer be trusted. Filing under this item is an obligation, not a choice: once a company's audit committee reaches that conclusion, it must disclose it promptly.

In practice, Item 4.02 is the starting gun for a restatement. The old numbers stay in the public record until amended filings replace them, which is why the company also says related earnings releases and communications should no longer be relied upon — those documents repeated figures that are now known to be incomplete.

What went wrong here is an accrual problem. Under U.S. accounting rules, a company generally must record the cost of an employment contract over the period the employee serves, whether or not cash has actually been paid. Panamera says it never paid the $250,000 annual salary, but the obligation to pay it, and later the settlement, still belonged on the balance sheet as a liability and in the income statement as an expense. Because it was omitted, accrued liabilities were too low and operating expenses were too low in each affected year.

The numbers show how the omission compounds. The liability grows each year as unpaid salary accumulates — from about $112,000 at July 2022 to about $509,000 at July 2025 — while the annual expense increase reflects only the portion earned in that particular year. The 2025 expense figure of $3,000 is small because the executive resigned in February 2024, so little or no salary was earned in that fiscal year; the liability line, however, still carries the accumulated total.

The settlement adds a further wrinkle. Panamera agreed to pay $650,000 through August 2027 without admitting liability, which is a common settlement structure that avoids a court finding of fault. The filing does not say how the settlement amount relates to the accrued salary figures, and the company notes its estimates are preliminary and exclude payroll taxes and legal fees.

The next step, as the filing describes it, is amended periodic reports and the fiscal 2025 Form 10-K. Until those are filed, investors have no corrected set of financial statements to work from. The filing does not address the company's listing status, any regulatory inquiry, or the cause of the disclosure failure beyond stating that the agreement and lawsuit were not disclosed to the Board.

The company's stock closed at $2.11 on the event date, unchanged from the prior close, according to the price data provided.