| Restatement of Previously Issued Condensed Consolidated Financial Statements |
Note
16 - Restatement of Previously Issued Condensed Consolidated Financial Statements
For
the three months ended March 31, 2026, the Company determined that it had not appropriately presented its condensed consolidated balance
sheets, statement of operations, statement of shareholders’ equity (deficit), and statement of cash flows due to the errors related
to revenue, cost of goods sold and deferred revenue.
Based
on an analysis of FASB ASC 250, Accounting Changes and Error Corrections, Staff Accounting Bulletin (“SAB”) No. 99, Materiality,
and SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements,
the Company concluded that these errors were material to the previously issued interim condensed consolidated financial statements and
therefore required a restatement.
The
restatement impacts to the Company’s condensed consolidated balance sheet were as shown below (amount in thousands):
SCHEDULE
OF RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS
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As of March 31, 2026 |
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As Previously |
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Reported |
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Adjustments |
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As Restated |
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| ASSETS |
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| Current assets |
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| Prepaid expenses and other current assets |
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$ |
1,469 |
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$ |
(263 |
) |
|
$ |
1,206 |
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| Total current assets |
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|
3,113 |
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|
(263 |
) |
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|
2,850 |
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| TOTAL ASSETS |
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$ |
58,730 |
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|
$ |
(263 |
) |
|
$ |
58,467 |
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| LIABILITIES AND STOCKHOLDERS’ EQUITY |
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| Current liabilities |
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| Accounts payable |
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14,169 |
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|
385 |
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14,554 |
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| Deferred revenue |
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1,840 |
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(827 |
) |
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1,013 |
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| Total current liabilities |
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56,108 |
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(442 |
) |
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55,666 |
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| Total liabilities |
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59,344 |
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(442 |
) |
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58,902 |
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| Stockholders’ equity (deficit) |
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| Accumulated deficit |
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(78,490 |
) |
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179 |
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(78,311 |
) |
| Total stockholders’ equity (deficit) |
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(614 |
) |
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179 |
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(435 |
) |
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
$ |
58,730 |
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|
$ |
(263 |
) |
|
$ |
58,467 |
|
The
restatement impacts to the Company’s condensed consolidated statements of operations were as shown below (amount in thousands,
except per share amounts):
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For the three months ended |
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March 31, 2026 |
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As Previously |
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Reported |
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Adjustments |
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As Restated |
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| Revenues, net |
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$ |
478 |
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$ |
691 |
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$ |
1,169 |
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| Cost of revenues |
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|
311 |
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|
563 |
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|
874 |
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| Gross profit |
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|
167 |
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|
128 |
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|
295 |
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| Operating expenses: |
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| General and administration |
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2,772 |
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(51 |
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2,721 |
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| Loss from operations |
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(2,605 |
) |
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|
179 |
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(2,426 |
) |
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| Loss from continuing operations after income taxes |
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(5,354 |
) |
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|
179 |
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(5,175 |
) |
| Net loss |
|
$ |
(5,354 |
) |
|
$ |
179 |
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|
$ |
(5,175 |
) |
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| Net earnings (loss) per share: |
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| Loss from continuing operations, basic and diluted |
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$ |
(0.43 |
) |
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$ |
0.01 |
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$ |
(0.42 |
) |
| Net loss (earnings) per share, basic and diluted |
|
$ |
(0.43 |
) |
|
$ |
0.01 |
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$ |
(0.42 |
) |
The
restatement impacts to the Company’s condensed consolidated statements of changes in stockholders’ equity were as shown below
(amount in thousands):
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|
Accumulated Deficit |
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Total
Stockholders’ Deficit
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For the three months ended |
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March 31, 2026 |
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Accumulated Deficit |
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Total
Stockholders’ Deficit
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| As Previously Reported |
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| Net loss |
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$ |
(5,354 |
) |
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$ |
(5,354 |
) |
| Balance at March 31, 2026 |
|
$ |
(78,490 |
) |
|
$ |
(614 |
) |
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| Adjustments |
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$ |
179 |
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$ |
179 |
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| As Restated |
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| Net loss |
|
$ |
(5,175 |
) |
|
$ |
(5,175 |
) |
| Balance at March 31, 2026 |
|
$ |
(78,311 |
) |
|
$ |
(435 |
) |
The
restatement impacts to the Company’s condensed consolidated statement of cash flows were as shown below (amount in thousands):
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For the three months ended |
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March 31, 2026 |
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As Previously |
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Reported |
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|
Adjustments |
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As Restated |
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| Cash flows from operating activities: |
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| Net loss from continuing operations |
|
$ |
(5,354 |
) |
|
$ |
179 |
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|
$ |
(5,175 |
) |
| Changes in operating assets and liabilities: |
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| Prepaid expenses and other current assets |
|
|
(104 |
) |
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|
263 |
|
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|
159 |
|
| Accounts payable and accrued expenses |
|
|
1,180 |
|
|
|
385 |
|
|
|
1,565 |
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| Deferred revenue |
|
|
484 |
|
|
|
(827 |
) |
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|
(343 |
) |
| Net cash used in operating activities - continuing operations |
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(748 |
) |
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- |
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(748 |
) |
| Net cash used in operating activities |
|
$ |
(748 |
) |
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$ |
- |
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$ |
(748 |
) |
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