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UNAUDITED QUARTERLY DATA | 12 Months Ended
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Jun. 30, 2019
Quarterly Financial Information Disclosure [Abstract] |
UNAUDITED QUARTERLY DATA | NAUDITED QUARTERLY DATA
|  | Three months ended
($ in thousands, except per share data) |  | September 30, 2018 |  | December 31, 2018 |  | March 31, 2019 |  | June 30, 2019
|  | (unaudited) |  | (unaudited) |  | (unaudited) |  | (unaudited)
Revenue |  | $ | 33,522 |  |  | $ | 34,406 |  |  | $ | 37,646 |  |  | $ | 38,225 |
Gross profit |  | $ | 10,110 |  |  | $ | 9,243 |  |  | $ | 9,779 |  |  | $ | 8,987 |
Operating loss |  | $ | (5,921 | ) |  | $ | (10,200 | ) |  | $ | (3,892 | ) |  | $ | (10,143 | )
Net loss |  | $ | (6,320 | ) |  | $ | (10,657 | ) |  | $ | (4,510 | ) |  | $ | (10,541 | )
Cumulative preferred dividends |  | $ | (334 | ) |  | $ | — |  |  | $ | (334 | ) |  | $ | — |
Net loss applicable to common shares |  | $ | (6,654 | ) |  | $ | (10,657 | ) |  | $ | (4,844 | ) |  | $ | (10,541 | )
Net loss per common share - basic |  | $ | (0.11 | ) |  | $ | (0.18 | ) |  | $ | (0.08 | ) |  | $ | (0.18 | )
Net loss per common share - diluted |  | $ | (0.11 | ) |  | $ | (0.18 | ) |  | $ | (0.08 | ) |  | $ | (0.18 | )
Weighted average number of common shares outstanding - basic |  | 60,053,912 |  |  | 60,059,936 |  |  | 60,065,053 |  |  | 60,065,978 |
Weighted average number of common shares outstanding - diluted |  | 60,053,912 |  |  | 60,059,936 |  |  | 60,065,053 |  |  | 60,065,978 |
|  | Three months ended
($ in thousands, except per share data) |  | September 30, 2017 (As Restated) |  | December 31, 2017 (As Restated) |  | March 31, 2018 (As Restated) |  | June 30, 2018
|  | (unaudited) |  | (unaudited) |  | (unaudited) |  | (unaudited)
Revenue |  | $ | 25,259 |  |  | $ | 31,532 |  |  | $ | 33,592 |  |  | $ | 42,125 |
Gross profit |  | $ | 6,181 |  |  | $ | 9,172 |  |  | $ | 9,845 |  |  | $ | 10,478 |
Operating loss |  | $ | (1,750 | ) |  | $ | (3,905 | ) |  | $ | (2,566 | ) |  | $ | (1,002 | )
Net loss |  | $ | (2,171 | ) |  | $ | (4,194 | ) |  | $ | (3,223 | ) |  | $ | (1,696 | )
Cumulative preferred dividends |  | $ | (334 | ) |  | $ | — |  |  | $ | (334 | ) |  | $ | — |
Net loss applicable to common shares |  | $ | (2,505 | ) |  | $ | (4,194 | ) |  | $ | (3,557 | ) |  | $ | (1,696 | )
Net loss per common share - basic |  | $ | (0.05 | ) |  | $ | (0.08 | ) |  | $ | (0.07 | ) |  | $ | (0.03 | )
Net loss per common share - diluted |  | $ | (0.05 | ) |  | $ | (0.08 | ) |  | $ | (0.07 | ) |  | $ | (0.03 | )
Weighted average number of common shares outstanding - basic |  | 47,573,364 |  |  | 52,150,106 |  |  | 53,637,085 |  |  | 54,064,750 |
Weighted average number of common shares outstanding - diluted |  | 47,573,364 |  |  | 52,150,106 |  |  | 53,637,085 |  |  | 54,064,750 |
|  | Three months ended
($ in thousands, except per share data) |  | September 30, 2016 (As Restated) |  | December 31, 2016 (As Restated) |  | March 31, 2017 (As Restated) |  | June 30, 2017 (As Restated)
|  | (unaudited) |  | (unaudited) |  | (unaudited) |  | (unaudited)
Revenue |  | $ | 21,569 |  |  | $ | 21,787 |  |  | $ | 26,301 |  |  | $ | 31,779 |
Gross profit |  | $ | 6,297 |  |  | $ | 6,445 |  |  | $ | 6,342 |  |  | $ | 5,977 |
Operating loss |  | $ | (1,383 | ) |  | $ | 109 |  |  | $ | (459 | ) |  | $ | (2,401 | )
Net loss |  | $ | (3,370 | ) |  | $ | (232 | ) |  | $ | (925 | ) |  | $ | (2,938 | )
Cumulative preferred dividends |  | $ | (334 | ) |  | $ | — |  |  | $ | (334 | ) |  | $ | — |
Net loss applicable to common shares |  | $ | (3,704 | ) |  | $ | (232 | ) |  | $ | (1,259 | ) |  | $ | (2,938 | )
Net loss per common share - basic |  | $ | (0.10 | ) |  | $ | (0.01 | ) |  | $ | (0.03 | ) |  | $ | (0.07 | )
Net loss per common share - diluted |  | $ | (0.10 | ) |  | $ | (0.01 | ) |  | $ | (0.03 | ) |  | $ | (0.07 | )
Weighted average number of common shares outstanding - basic |  | 38,488,005 |  |  | 40,308,934 |  |  | 40,327,697 |  |  | 40,331,993 |
Weighted average number of common shares outstanding - diluted |  | 38,488,005 |  |  | 40,308,934 |  |  | 40,327,697 |  |  | 40,331,993 |
Explanatory Note: Th e Company is providing restated quarterly and year-to-date unaudited consolidated financial information for interim periods occurring within fiscal years ended June 30, 2017 and 2018 in order to comply with SEC requirements. Refer to Note 2 — "Restatement of Consolidated Financial Statements" for further background concerning the events preceding the restatement of financial information in this Form 10-K/A. As discussed in Note 2, the Audit Committee and the Company identified certain errors that are corrected through adjustments made as part of the restatement. These adjustments include corrections related to the investigation of customer transactions that was conducted, as well as (i) corrections related to the Company's acquisition and financial integration of Cantaloupe and (ii) corrections resulting from management's review of significant accounts and transactions. A summary of the impact of these matters on income (loss) before taxes is presented below:
($ in thousands) | Increase / (Decrease) Restatement Impact
| Three months ended September 30, 2017 |  | Three months ended December 31, 2017 |  | Six months ended December 31, 2017 |  | Three months ended March 31, 2018 |  | Nine months ended March 31, 2018
Audit Committee Investigation-related Adjustments: |  |  |  |  |  |  |  |  |
Revenue | $ | (411 | ) |  | $ | (866 | ) |  | $ | (1,277 | ) |  | $ | (768 | ) |  | $ | (2,045 | )
Costs of sales | $ | 165 |  |  | $ | (1,225 | ) |  | $ | (1,060 | ) |  | $ | (293 | ) |  | $ | (1,353 | )
Gross profit | $ | (576 | ) |  | $ | 359 |  |  | $ | (217 | ) |  | $ | (475 | ) |  | $ | (692 | )
Operating income (loss) | $ | (576 | ) |  | $ | 359 |  |  | $ | (217 | ) |  | $ | (9 | ) |  | $ | (226 | )
Income (loss) before income taxes | $ | (576 | ) |  | $ | 357 |  |  | $ | (219 | ) |  | $ | (29 | ) |  | $ | (248 | )
Acquisition and Financial Integration-related Adjustments: |  |  |  |  |  |  |  |  |
Revenue | $ | — |  |  | $ | (60 | ) |  | $ | (60 | ) |  | $ | (1,546 | ) |  | $ | (1,606 | )
Costs of sales | $ | — |  |  | $ | (33 | ) |  | $ | (33 | ) |  | $ | (79 | ) |  | $ | (112 | )
Gross profit | $ | — |  |  | $ | (27 | ) |  | $ | (27 | ) |  | $ | (1,467 | ) |  | $ | (1,494 | )
Operating income (loss) | $ | — |  |  | $ | (288 | ) |  | $ | (288 | ) |  | $ | (1,594 | ) |  | $ | (1,882 | )
Income (loss) before income taxes | $ | — |  |  | $ | (223 | ) |  | $ | (223 | ) |  | $ | (1,499 | ) |  | $ | (1,722 | )
Significant Account and Transaction Review and Other: |  |  |  |  |  |  |  |  |
Revenue | $ | 53 |  |  | $ | (47 | ) |  | $ | 6 |  |  | $ | 75 |  |  | $ | 81 |
Costs of sales | $ | 497 |  |  | $ | 313 |  |  | $ | 810 |  |  | $ | 231 |  |  | $ | 1,041 |
Gross profit | $ | (444 | ) |  | $ | (360 | ) |  | $ | (804 | ) |  | $ | (156 | ) |  | $ | (960 | )
Operating income (loss) | $ | (622 | ) |  | $ | (775 | ) |  | $ | (1,397 | ) |  | $ | (461 | ) |  | $ | (1,858 | )
Income (loss) before income taxes | $ | (886 | ) |  | $ | (1,041 | ) |  | $ | (1,927 | ) |  | $ | (696 | ) |  | $ | (2,623 | )
($ in thousands) | Increase / (Decrease) Restatement Impact |  |
| Three months ended September 30, 2016 |  | Three months ended December 31, 2016 |  | Six months ended December 31, 2016 |  | Three months ended March 31, 2017 |  | Nine months ended March 31, 2017 |  | Three months ended June 30, 2017
Audit Committee Investigation-related Adjustments: |  |  |  |  |  |  |  |  |  |  |
Revenue | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | (111 | ) |  | $ | (111 | ) |  | $ | (2,457 | )
Costs of sales | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | (24 | ) |  | $ | (24 | ) |  | $ | (1,139 | )
Gross profit | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | (87 | ) |  | $ | (87 | ) |  | $ | (1,318 | )
Operating income (loss) | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | (87 | ) |  | $ | (87 | ) |  | $ | (1,318 | )
Income (loss) before income taxes | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | (87 | ) |  | $ | (87 | ) |  | $ | (1,318 | )
Significant Account and Transaction Review and Other: |  |  |  |  |  |  |  |  |  |  |
Revenue | $ | (18 | ) |  | $ | 31 |  |  | $ | 13 |  |  | $ | (49 | ) |  | $ | (36 | ) |  | $ | (53 | )
Costs of sales | $ | (148 | ) |  | $ | (81 | ) |  | $ | (229 | ) |  | $ | 147 |  |  | $ | (82 | ) |  | $ | 173 |
Gross profit | $ | 130 |  |  | $ | 112 |  |  | $ | 242 |  |  | $ | (196 | ) |  | $ | 46 |  |  | $ | (226 | )
Operating income (loss) | $ | (434 | ) |  | $ | (124 | ) |  | $ | (558 | ) |  | $ | (790 | ) |  | $ | (1,348 | ) |  | $ | (1,516 | )
Income (loss) before income taxes | $ | (769 | ) |  | $ | (441 | ) |  | $ | (1,210 | ) |  | $ | (1,159 | ) |  | $ | (2,369 | ) |  | $ | (1,831 | )
A summary of the impact of these matters on the consolidated balance sheet is presented below, excluding any tax effect from the restatement adjustments in the aggregate:
($ in thousands) | Increase / (Decrease) Restatement Impact
| As of September 30, 2016 |  | As of December 31, 2016 |  | As of March 31, 2017 |  | As of September 30, 2017 |  | As of December 31, 2017 |  | As of March 31, 2018
Audit Committee Investigation-related Adjustments: |  |  |  |  |  |  |  |  |  |  |
Accounts receivables | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | (315 | ) |  | $ | (1,774 | ) |  | $ | (1,954 | )
Finance receivables, net | $ | — |  |  | $ | — |  |  | $ | 92 |  |  | $ | (1,640 | ) |  | $ | (1,269 | ) |  | $ | (1,666 | )
Inventory, net | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 941 |  |  | $ | 2,166 |  |  | $ | 2,459 |
Prepaid expenses and other current assets | $ | — |  |  | $ | — |  |  | $ | 30 |  |  | $ | 25 |  |  | $ | 25 |  |  | $ | 25 |
Other assets | $ | — |  |  | $ | — |  |  | $ | 95 |  |  | $ | 82 |  |  | $ | 76 |  |  | $ | 69 |
Property and equipment, net | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | (162 | ) |  | $ | (146 | )
Accounts payable | $ | — |  |  | $ | — |  |  | $ | 270 |  |  | $ | 270 |  |  | $ | 106 |  |  | $ | 99 |
Accrued expenses | $ | — |  |  | $ | — |  |  | $ | 34 |  |  | $ | 803 |  |  | $ | 580 |  |  | $ | 341 |
Acquisition and Financial Integration-related Adjustments: |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | (26 | ) |  | $ | (52 | )
Accounts receivables | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 1,133 |  |  | $ | (1,974 | )
Finance receivables, net | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | (1,515 | ) |  | $ | 158 |
Inventory, net | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | (500 | ) |  | $ | (500 | )
Prepaid expenses and other current assets | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | (35 | ) |  | $ | (44 | )
Property and equipment, net | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 721 |  |  | $ | 826 |
Other assets | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | (139 | ) |  | $ | (175 | )
Goodwill | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 4,121 |  |  | $ | 4,121 |
Accrued expenses | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 785 |  |  | $ | 883 |
Deferred revenue | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | (153 | ) |  | $ | (153 | )
Common stock | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 3,469 |  |  | $ | 3,469 |
Significant Account and Transaction Review and Other: |  |  |  |  |  |  |  |  |  |  |
Accounts receivables | $ | (143 | ) |  | $ | 110 |  |  | $ | 61 |  |  | $ | 77 |  |  | $ | (8 | ) |  | $ | 127 |
Finance receivables, net | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 1,074 |  |  | $ | 28 |
Inventory, net | $ | (338 | ) |  | $ | (348 | ) |  | $ | (470 | ) |  | $ | (305 | ) |  | $ | (861 | ) |  | $ | (1,067 | )
Prepaid expenses and other current assets | $ | 13 |  |  | $ | 13 |  |  | $ | 13 |  |  | $ | (136 | ) |  | $ | (150 | ) |  | $ | (173 | )
Other assets | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | (543 | ) |  | $ | (600 | ) |  | $ | (693 | )
Property and equipment, net | $ | 2,865 |  |  | $ | 2,561 |  |  | $ | 2,168 |  |  | $ | (1,149 | ) |  | $ | (737 | ) |  | $ | (635 | )
Accounts payable | $ | 17 |  |  | $ | 19 |  |  | $ | 21 |  |  | $ | 25 |  |  | $ | 27 |  |  | $ | 29 |
Accrued expenses | $ | 4,506 |  |  | $ | 5,222 |  |  | $ | 6,166 |  |  | $ | 8,319 |  |  | $ | 9,087 |  |  | $ | 9,877 |
Line of credit, net | $ | 13 |  |  | $ | 13 |  |  | $ | 13 |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Capital lease obligation and current obligations under long-term debt | $ | 4,117 |  |  | $ | 3,566 |  |  | $ | 2,998 |  |  | $ | (21 | ) |  | $ | 367 |  |  | $ | (5 | )
Deferred revenue | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | (27 | ) |  | $ | (27 | ) |  | $ | (27 | )
Deferred gain from sale-leaseback transactions | $ | (685 | ) |  | $ | (470 | ) |  | $ | (255 | ) |  | $ | (198 | ) |  | $ | (198 | ) |  | $ | (198 | )
Deferred gain from sale-leaseback transactions, less current portion | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | (99 | ) |  | $ | (49 | ) |  | $ | — |
Capital lease obligation and long-term debt, less current portion | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 697 |  |  | $ | — |
Common stock | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | (166 | ) |  | $ | (372 | ) |  | $ | (867 | )
The effect of the restatement on the previously filed consolidated balance sheet as of September 30, 2017 is as follows:
| As of September 30, 2017
($ in thousands, except per share data) | As Previously Reported |  | Adjustments |  | As Restated
Assets |  |  |  |  |
Current assets: |  |  |  |  |
Cash and cash equivalents | $ | 51,870 |  |  | $ | — |  |  | $ | 51,870 |
Accounts receivable | 10,288 |  |  | (473 | ) |  | 9,815 |
Finance receivables, net | 3,082 |  |  | (1,641 | ) |  | 1,441 |
Inventory, net | 8,240 |  |  | 636 |  |  | 8,876 |
Prepaid expenses and other current assets | 1,122 |  |  | (66 | ) |  | 1,056 |
Total current assets | 74,602 |  |  | (1,544 | ) |  | 73,058 |
Non-current assets: |  |  |  |  |
Finance receivables due after one year | 7,742 |  |  | — |  |  | 7,742 |
Other assets | 750 |  |  | (461 | ) |  | 289 |
Property and equipment, net | 11,850 |  |  | (1,149 | ) |  | 10,701 |
Deferred income taxes | 28,205 |  |  | (28,205 | ) |  | — |
Intangibles, net | 578 |  |  | — |  |  | 578 |
Goodwill | 11,492 |  |  | — |  |  | 11,492 |
Total non-current assets | 60,617 |  |  | (29,815 | ) |  | 30,802 |
Total assets | $ | 135,219 |  |  | $ | (31,359 | ) |  | $ | 103,860 |
Liabilities, convertible preferred stock and shareholders’ equity |  |  |  |  |
Current liabilities: |  |  |  |  |
Accounts payable | $ | 14,211 |  |  | $ | 295 |  |  | $ | 14,506 |
Accrued expenses | 3,795 |  |  | 8,422 |  |  | 12,217 |
Line of credit, net | 7,051 |  |  | — |  |  | 7,051 |
Capital lease obligations and current obligations under long-term debt | 2,649 |  |  | (21 | ) |  | 2,628 |
Income taxes payable | 10 |  |  | (10 | ) |  | — |
Deferred revenue | — |  |  | 439 |  |  | 439 |
Deferred gain from sale-leaseback transactions | 197 |  |  | (197 | ) |  | — |
Total current liabilities | 27,913 |  |  | 8,928 |  |  | 36,841 |
Long-term liabilities: |  |  |  |  |
Deferred income taxes | — |  |  | 109 |  |  | 109 |
Capital lease obligations and long-term debt, less current portion | 1,049 |  |  | — |  |  | 1,049 |
Accrued expenses, less current portion | 62 |  |  | — |  |  | 62 |
Deferred gain from sale-leaseback transactions, less current portion | 99 |  |  | (99 | ) |  | — |
Total long-term liabilities | 1,210 |  |  | 10 |  |  | 1,220 |
Total liabilities | $ | 29,123 |  |  | $ | 8,938 |  |  | $ | 38,061 |
Commitments and contingencies |  |  |  |  |  |  |  |
Convertible preferred stock: |  |  |  |  |
Series A convertible preferred stock, 900,000 shares authorized, 445,063 issued and outstanding, with liquidation preference of $19,109 at September 30, 2017 | — |  |  | 3,138 |  |  | 3,138 |
Shareholders’ equity: |  |  |  |  |
Preferred stock, no par value, 1,800,000 shares authorized, no shares issued | — |  |  | — |  |  | — |
Series A convertible preferred stock, 900,000 shares authorized, 445,063 issued and outstanding, with liquidation preference of $19,109 at September 30, 2017 | 3,138 |  |  | (3,138 | ) |  | — |
Common stock, no par value, 640,000,000 shares authorized, 50,194,731 shares issued and outstanding at September 30, 2017 | 286,463 |  |  | (167 | ) |  | 286,296 |
Accumulated deficit | (183,505 | ) |  | (40,130 | ) |  | (223,635 | )
Total shareholders’ equity | 106,096 |  |  | (43,435 | ) |  | 62,661 |
Total liabilities, convertible preferred stock and shareholders’ equity | $ | 135,219 |  |  | $ | (31,359 | ) |  | $ | 103,860 |
The effect of the restatement on the previously filed consolidated statement of operations for the three months ended September 30, 2017 is as follows:
| Three months ended September 30, 2017
($ in thousands, except per share data) | As Previously Reported |  | Adjustments |  | As Restated
Revenue: |  |  |  |  |
License and transaction fees | $ | 19,944 |  |  | $ | (547 | ) |  | $ | 19,397 |
Equipment sales | 5,673 |  |  | 189 |  |  | 5,862 |
Total revenue | 25,617 |  |  | (358 | ) |  | 25,259 |
Costs of sales: |  |  |  |  |
Cost of services | 13,326 |  |  | (79 | ) |  | 13,247 |
Cost of equipment | 5,090 |  |  | 741 |  |  | 5,831 |
Total costs of sales | 18,416 |  |  | 662 |  |  | 19,078 |
Gross profit | 7,201 |  |  | (1,020 | ) |  | 6,181 |
Operating expenses: |  |  |  |  |
Selling, general and administrative | 6,746 |  |  | 178 |  |  | 6,924 |
Integration and acquisition costs | 762 |  |  | — |  |  | 762 |
Depreciation and amortization | 245 |  |  | — |  |  | 245 |
Total operating expenses | 7,753 |  |  | 178 |  |  | 7,931 |
Operating loss | (552 | ) |  | (1,198 | ) |  | (1,750 | )
Other income (expense): |  |  |  |  |
Interest income | 80 |  |  | — |  |  | 80 |
Interest expense | (209 | ) |  | (264 | ) |  | (473 | )
Total other expense, net | (129 | ) |  | (264 | ) |  | (393 | )
Loss before income taxes | (681 | ) |  | (1,462 | ) |  | (2,143 | )
Benefit (provision) for income taxes | 468 |  |  | (496 | ) |  | (28 | )
Net loss | (213 | ) |  | (1,958 | ) |  | (2,171 | )
Preferred dividends | (334 | ) |  | — |  |  | (334 | )
Net loss applicable to common shares | $ | (547 | ) |  | $ | (1,958 | ) |  | $ | (2,505 | )
Net loss per common share |  |  |  |  |
Basic | $ | (0.01 | ) |  | $ | (0.04 | ) |  | $ | (0.05 | )
Diluted | $ | (0.01 | ) |  | $ | (0.04 | ) |  | $ | (0.05 | )
Weighted average number of common shares outstanding |  |  |  |  |
Basic | 47,573,364 |  |  | — |  |  | 47,573,364 |
Diluted | 47,573,364 |  |  | — |  |  | 47,573,364 |
The effect of the restatement on the previously filed consolidated statement of cash flows for the three months ended September 30, 2017 is as follows:
| Three months ended September 30, 2017
($ in thousands) | As Previously Reported |  | Adjustments |  | As Restated
OPERATING ACTIVITIES: |  |  |  |  |
Net loss | $ | (213 | ) |  | $ | (1,958 | ) |  | $ | (2,171 | )
Adjustments to reconcile net loss to net cash provided by operating activities: |  |  |  |  |
Non-cash stock-based compensation | 576 |  |  | (167 | ) |  | 409 |
(Gain) loss on disposal of property and equipment | (18 | ) |  | — |  |  | (18 | )
Non-cash interest and amortization of debt discount | 15 |  |  | 2 |  |  | 17 |
Bad debt expense | 118 |  |  | 50 |  |  | 168 |
Provision for inventory reserve | — |  |  | 221 |  |  | 221 |
Depreciation and amortization | 1,492 |  |  | (122 | ) |  | 1,370 |
Excess tax benefits | 67 |  |  | — |  |  | 67 |
Deferred income taxes, net | (535 | ) |  | 551 |  |  | 16 |
Recognition of deferred gain from sale-leaseback transactions | (43 | ) |  | 43 |  |  | — |
Changes in operating assets and liabilities: |  |  |  |  |
Accounts receivable | (3,192 | ) |  | 43 |  |  | (3,149 | )
Finance receivables, net | 8,771 |  |  | 397 |  |  | 9,168 |
Inventory, net | (3,648 | ) |  | (252 | ) |  | (3,900 | )
Prepaid expenses and other current assets | (217 | ) |  | 114 |  |  | (103 | )
Accounts payable and accrued expenses | (2,168 | ) |  | 678 |  |  | (1,490 | )
Deferred revenue | — |  |  | 171 |  |  | 171 |
Income taxes payable | — |  |  | (55 | ) |  | (55 | )
Net cash provided by operating activities | 1,005 |  |  | (284 | ) |  | 721 |
INVESTING ACTIVITIES: |  |  |  |  |
Purchase of property and equipment, including rentals | (992 | ) |  | 272 |  |  | (720 | )
Proceeds from sale of property and equipment | 45 |  |  | — |  |  | 45 |
Net cash used in investing activities | (947 | ) |  | 272 |  |  | (675 | )
FINANCING ACTIVITIES: |  |  |  |  |
Issuance of common stock in public offering, net | 39,888 |  |  | — |  |  | 39,888 |
Repayment of capital lease obligations and long-term debt | (821 | ) |  | 12 |  |  | (809 | )
Net cash provided by financing activities | 39,067 |  |  | 12 |  |  | 39,079 |
Net increase in cash and cash equivalents | 39,125 |  |  | — |  |  | 39,125 |
Cash and cash equivalents at beginning of year | 12,745 |  |  | — |  |  | 12,745 |
Cash and cash equivalents at end of period | $ | 51,870 |  |  | $ | — |  |  | $ | 51,870 |
The effect of the restatement on the previously filed consolidated balance sheet as of December 31, 2017 is as follows:
| As of December 31, 2017
($ in thousands, except per share data) | As Previously Reported |  | Adjustments |  | As Restated
Assets |  |  |  |  |
Current assets: |  |  |  |  |
Cash and cash equivalents | $ | 15,386 |  |  | $ | (26 | ) |  | $ | 15,360 |
Accounts receivable | 15,472 |  |  | (765 | ) |  | 14,707 |
Finance receivables, net | 5,517 |  |  | (2,221 | ) |  | 3,296 |
Inventory, net | 11,215 |  |  | 804 |  |  | 12,019 |
Prepaid expenses and other current assets | 1,971 |  |  | (361 | ) |  | 1,610 |
Total current assets | 49,561 |  |  | (2,569 | ) |  | 46,992 |
Non-current assets: |  |  |  |  |
Finance receivables due after one year | 11,215 |  |  | 513 |  |  | 11,728 |
Other assets | 1,120 |  |  | (662 | ) |  | 458 |
Property and equipment, net | 12,622 |  |  | (179 | ) |  | 12,443 |
Deferred income taxes | 14,774 |  |  | (14,774 | ) |  | — |
Intangibles, net | 30,910 |  |  | — |  |  | 30,910 |
Goodwill | 64,449 |  |  | (46 | ) |  | 64,403 |
Total non-current assets | 135,090 |  |  | (15,148 | ) |  | 119,942 |
Total assets | $ | 184,651 |  |  | $ | (17,717 | ) |  | $ | 166,934 |
Liabilities, convertible preferred stock and shareholders’ equity |  |  |  |  |
Current liabilities: |  |  |  |  |
Accounts payable | $ | 23,775 |  |  | $ | 133 |  |  | $ | 23,908 |
Accrued expenses | 6,798 |  |  | 9,825 |  |  | 16,623 |
Capital lease obligations, current obligations under long-term debt, and collateralized borrowings | 5,121 |  |  | 367 |  |  | 5,488 |
Income taxes payable | 6 |  |  | (6 | ) |  | — |
Deferred revenue | 595 |  |  | 135 |  |  | 730 |
Deferred gain from sale-leaseback transactions | 198 |  |  | (198 | ) |  | — |
Total current liabilities | 36,493 |  |  | 10,256 |  |  | 46,749 |
Long-term liabilities: |  |  |  |  |
Revolving credit facility | 10,000 |  |  | — |  |  | 10,000 |
Deferred income taxes | — |  |  | 91 |  |  | 91 |
Capital lease obligations, long-term debt, and collateralized borrowings, less current portion | 23,874 |  |  | 696 |  |  | 24,570 |
Accrued expenses, less current portion | 65 |  |  | — |  |  | 65 |
Deferred gain from sale-leaseback transactions, less current portion | 49 |  |  | (49 | ) |  | — |
Total long-term liabilities | 33,988 |  |  | 738 |  |  | 34,726 |
Total liabilities | $ | 70,481 |  |  | $ | 10,994 |  |  | $ | 81,475 |
Commitments and contingencies |  |  |  |  |  |  |  |
Convertible preferred stock: |  |  |  |  |
Series A convertible preferred stock, 900,000 shares authorized, 445,063 issued and outstanding, with liquidation preference of $19,109 at December 31, 2017 | — |  |  | 3,138 |  |  | 3,138 |
Shareholders’ equity: |  |  |  |  |
Preferred stock, no par value, 1,800,000 shares authorized, no shares issued | — |  |  | — |  |  | — |
Series A convertible preferred stock, 900,000 shares authorized, 445,063 issued and outstanding, with liquidation preference of $19,109 at December 31, 2017 | 3,138 |  |  | (3,138 | ) |  | — |
Common stock, no par value, 640,000,000 shares authorized, 53,619,898 shares issued and outstanding at December 31, 2017 | 307,053 |  |  | 3,097 |  |  | 310,150 |
Accumulated deficit | (196,021 | ) |  | (31,808 | ) |  | (227,829 | )
Total shareholders’ equity | 114,170 |  |  | (31,849 | ) |  | 82,321 |
Total liabilities, convertible preferred stock and shareholders’ equity | $ | 184,651 |  |  | $ | (17,717 | ) |  | $ | 166,934 |
The effect of the restatement on the previously filed consolidated statement of operations for the three and six months ended December 31, 2017 is as follows:
| Three months ended December 31, 2017 |  | Six months ended December 31, 2017
($ in thousands, except per share data) | As Previously Reported |  | Adjustments |  | As Restated |  | As Previously Reported |  | Adjustments |  | As Restated
Revenue: |  |  |  |  |  |  |  |  |  |  |
License and transaction fees | $ | 22,853 |  |  | $ | 661 |  |  | $ | 23,514 |  |  | $ | 42,797 |  |  | $ | 114 |  |  | $ | 42,911 |
Equipment sales | 9,653 |  |  | (1,635 | ) |  | 8,018 |  |  | 15,326 |  |  | (1,446 | ) |  | 13,880 |
Total revenue | 32,506 |  |  | (974 | ) |  | 31,532 |  |  | 58,123 |  |  | (1,332 | ) |  | 56,791 |
Costs of sales: |  |  |  |  |  |  |  |  |  |  |
Cost of services | 14,362 |  |  | (6 | ) |  | 14,356 |  |  | 27,688 |  |  | (85 | ) |  | 27,603 |
Cost of equipment | 8,943 |  |  | (939 | ) |  | 8,004 |  |  | 14,033 |  |  | (198 | ) |  | 13,835 |
Total costs of sales | 23,305 |  |  | (945 | ) |  | 22,360 |  |  | 41,721 |  |  | (283 | ) |  | 41,438 |
Gross profit | 9,201 |  |  | (29 | ) |  | 9,172 |  |  | 16,402 |  |  | (1,049 | ) |  | 15,353 |
Operating expenses: |  |  |  |  |  |  |  |  |  |  |
Selling, general and administrative | 8,329 |  |  | 676 |  |  | 9,005 |  |  | 15,075 |  |  | 854 |  |  | 15,929 |
Integration and acquisition costs | 3,335 |  |  | — |  |  | 3,335 |  |  | 4,097 |  |  | — |  |  | 4,097 |
Depreciation and amortization | 737 |  |  | — |  |  | 737 |  |  | 982 |  |  | — |  |  | 982 |
Total operating expenses | 12,401 |  |  | 676 |  |  | 13,077 |  |  | 20,154 |  |  | 854 |  |  | 21,008 |
Operating loss | (3,200 | ) |  | (705 | ) |  | (3,905 | ) |  | (3,752 | ) |  | (1,903 | ) |  | (5,655 | )
Other income (expense): |  |  |  |  |  |  |  |  |  |  |
Interest income | 251 |  |  | 73 |  |  | 324 |  |  | 331 |  |  | 73 |  |  | 404 |
Interest expense | (494 | ) |  | (276 | ) |  | (770 | ) |  | (703 | ) |  | (540 | ) |  | (1,243 | )
Total other expense, net | (243 | ) |  | (203 | ) |  | (446 | ) |  | (372 | ) |  | (467 | ) |  | (839 | )
Loss before income taxes | (3,443 | ) |  | (908 | ) |  | (4,351 | ) |  | (4,124 | ) |  | (2,370 | ) |  | (6,494 | )
(Provision) benefit for income taxes | (9,073 | ) |  | 9,230 |  |  | 157 |  |  | (8,605 | ) |  | 8,734 |  |  | 129 |
Net loss | (12,516 | ) |  | 8,322 |  |  | (4,194 | ) |  | (12,729 | ) |  | 6,364 |  |  | (6,365 | )
Preferred dividends | — |  |  | — |  |  | — |  |  | (334 | ) |  | — |  |  | (334 | )
Net loss applicable to common shares | $ | (12,516 | ) |  | $ | 8,322 |  |  | $ | (4,194 | ) |  | $ | (13,063 | ) |  | $ | 6,364 |  |  | $ | (6,699 | )
Net loss per common share |  |  |  |  |  |  |  |  |  |  |
Basic | $ | (0.24 | ) |  | $ | 0.16 |  |  | $ | (0.08 | ) |  | $ | (0.26 | ) |  | $ | 0.13 |  |  | $ | (0.13 | )
Diluted | $ | (0.24 | ) |  | $ | 0.16 |  |  | $ | (0.08 | ) |  | $ | (0.26 | ) |  | $ | 0.13 |  |  | $ | (0.13 | )
Weighted average number of common shares outstanding |  |  |  |  |  |  |  |  |  |  |
Basic | 52,150,106 |  |  | — |  |  | 52,150,106 |  |  | 49,861,735 |  |  | — |  |  | 49,861,735 |
Diluted | 52,150,106 |  |  | — |  |  | 52,150,106 |  |  | 49,861,735 |  |  | — |  |  | 49,861,735 |
The effect of the restatement on the previously filed consolidated statement of cash flows for the six months ended December 31, 2017 is as follows:
| Six months ended December 31, 2017
($ in thousands) | As Previously Reported |  | Adjustments |  | As Restated
OPERATING ACTIVITIES: |  |  |  |  |
Net loss | $ | (12,729 | ) |  | $ | 6,364 |  |  | $ | (6,365 | )
Adjustments to reconcile net loss to net cash provided by operating activities: |  |  |  |  |
Non-cash stock-based compensation | 1,356 |  |  | (372 | ) |  | 984 |
(Gain) loss on disposal of property and equipment | (83 | ) |  | 3 |  |  | (80 | )
Non-cash interest and amortization of debt discount | 86 |  |  | 8 |  |  | 94 |
Bad debt expense | 291 |  |  | 91 |  |  | 382 |
Provision for inventory reserve | — |  |  | 1,091 |  |  | 1,091 |
Depreciation and amortization | 3,476 |  |  | (198 | ) |  | 3,278 |
Excess tax benefits | 67 |  |  | — |  |  | 67 |
Deferred income taxes, net | 8,537 |  |  | (8,696 | ) |  | (159 | )
Recognition of deferred gain from sale-leaseback transactions | (93 | ) |  | 93 |  |  | — |
Changes in operating assets and liabilities: |  |  |  |  |
Accounts receivable | (5,290 | ) |  | (42 | ) |  | (5,332 | )
Finance receivables, net | 7,958 |  |  | (626 | ) |  | 7,332 |
Inventory, net | (5,822 | ) |  | (1,793 | ) |  | (7,615 | )
Prepaid expenses and other current assets | (606 | ) |  | 604 |  |  | (2 | )
Accounts payable and accrued expenses | 6,950 |  |  | 754 |  |  | 7,704 |
Deferred revenue | — |  |  | 570 |  |  | 570 |
Income taxes payable | 40 |  |  | (80 | ) |  | (40 | )
Net cash provided by operating activities | 4,138 |  |  | (2,229 | ) |  | 1,909 |
INVESTING ACTIVITIES: |  |  |  |  |
Purchase of property and equipment, including rentals | (1,767 | ) |  | 33 |  |  | (1,734 | )
Proceeds from sale of property and equipment | 157 |  |  | — |  |  | 157 |
Cash paid for acquisitions, net of cash acquired | (65,181 | ) |  | — |  |  | (65,181 | )
Net cash used in investing activities | (66,791 | ) |  | 33 |  |  | (66,758 | )
FINANCING ACTIVITIES: |  |  |  |  |
Proceeds from collateralized borrowing from the transfer of finance receivables | — |  |  | 1,075 |  |  | 1,075 |
Payment of debt issuance costs | (445 | ) |  | — |  |  | (445 | )
Proceeds from issuance of long-term debt | 25,100 |  |  | — |  |  | 25,100 |
Proceeds from revolving credit facility | 10,000 |  |  | — |  |  | 10,000 |
Issuance of common stock in public offering, net | 39,888 |  |  | — |  |  | 39,888 |
Repayment of line of credit | (7,111 | ) |  | — |  |  | (7,111 | )
Repayment of capital lease obligations and long-term debt | (2,138 | ) |  | 1,095 |  |  | (1,043 | )
Net cash provided by financing activities | 65,294 |  |  | 2,170 |  |  | 67,464 |
Net increase in cash and cash equivalents | 2,641 |  |  | (26 | ) |  | 2,615 |
Cash and cash equivalents at beginning of year | 12,745 |  |  | — |  |  | 12,745 |
Cash and cash equivalents at end of period | $ | 15,386 |  |  | $ | (26 | ) |  | $ | 15,360 |
The effect of the restatement on the previously filed consolidated balance sheet as of March 31, 2018 is as follows:
| As of March 31, 2018
($ in thousands, except per share data) | As Previously Reported |  | Adjustments |  | As Restated
Assets |  |  |  |  |
Current assets: |  |  |  |  |
Cash and cash equivalents | $ | 17,107 |  |  | $ | (52 | ) |  | $ | 17,055 |
Accounts receivable | 23,166 |  |  | (3,723 | ) |  | 19,443 |
Finance receivables, net | 3,904 |  |  | (1,670 | ) |  | 2,234 |
Inventory, net | 11,030 |  |  | 893 |  |  | 11,923 |
Prepaid expenses and other current assets | 1,869 |  |  | (591 | ) |  | 1,278 |
Total current assets | 57,076 |  |  | (5,143 | ) |  | 51,933 |
Non-current assets: |  |  |  |  |
Finance receivables due after one year | 9,679 |  |  | 191 |  |  | 9,870 |
Other assets | 1,214 |  |  | (800 | ) |  | 414 |
Property and equipment, net | 12,198 |  |  | 45 |  |  | 12,243 |
Deferred income taxes | 16,911 |  |  | (16,911 | ) |  | — |
Intangibles, net | 30,119 |  |  | — |  |  | 30,119 |
Goodwill | 64,196 |  |  | (47 | ) |  | 64,149 |
Total non-current assets | 134,317 |  |  | (17,522 | ) |  | 116,795 |
Total assets | $ | 191,393 |  |  | $ | (22,665 | ) |  | $ | 168,728 |
Liabilities, convertible preferred stock and shareholders’ equity |  |  |  |  |
Current liabilities: |  |  |  |  |
Accounts payable | $ | 29,446 |  |  | $ | 128 |  |  | $ | 29,574 |
Accrued expenses | 7,961 |  |  | 10,547 |  |  | 18,508 |
Capital lease obligations and current obligations under long-term debt | 4,475 |  |  | (5 | ) |  | 4,470 |
Deferred revenue | 441 |  |  | 70 |  |  | 511 |
Deferred gain from sale-leaseback transactions | 198 |  |  | (198 | ) |  | — |
Total current liabilities | 42,521 |  |  | 10,542 |  |  | 53,063 |
Long-term liabilities: |  |  |  |  |
Revolving credit facility | 10,000 |  |  | — |  |  | 10,000 |
Deferred income taxes | — |  |  | 96 |  |  | 96 |
Capital lease obligations and long-term debt, less current portion | 22,895 |  |  | — |  |  | 22,895 |
Accrued expenses, less current portion | 66 |  |  | — |  |  | 66 |
Total long-term liabilities | 32,961 |  |  | 96 |  |  | 33,057 |
Total liabilities | $ | 75,482 |  |  | $ | 10,638 |  |  | $ | 86,120 |
Commitments and contingencies |  |  |  |  |  |  |  |
Convertible preferred stock: |  |  |  |  |
Series A convertible preferred stock, 900,000 shares authorized, 445,063 issued and outstanding, with liquidation preference of $19,443 at March 31, 2018 | — |  |  | 3,138 |  |  | 3,138 |
Shareholders’ equity: |  |  |  |  |
Preferred stock, no par value, 1,800,000 shares authorized, no shares issued | — |  |  | — |  |  | — |
Series A convertible preferred stock, 900,000 shares authorized, 445,063 issued and outstanding, with liquidation preference of $19,443 at March 31, 2018 | 3,138 |  |  | (3,138 | ) |  | — |
Common stock, no par value, 640,000,000 shares authorized, 53,666,718 shares issued and outstanding at March 31, 2018 | 307,634 |  |  | 2,888 |  |  | 310,522 |
Accumulated deficit | (194,861 | ) |  | (36,191 | ) |  | (231,052 | )
Total shareholders’ equity | 115,911 |  |  | (36,441 | ) |  | 79,470 |
Total liabilities, convertible preferred stock and shareholders’ equity | $ | 191,393 |  |  | $ | (22,665 | ) |  | $ | 168,728 |
The effect of the restatement on the previously filed consolidated statement of operations for the three and nine months ended March 31, 2018 is as follows:
| Three months ended March 31, 2018 |  | Nine months ended March 31, 2018
($ in thousands, except per share data) | As Previously Reported |  | Adjustments |  | As Restated |  | As Previously Reported |  | Adjustments |  | As Restated
Revenue: |  |  |  |  |  |  |  |  |  |  |
License and transaction fees | $ | 27,020 |  |  | $ | (1,639 | ) |  | $ | 25,381 |  |  | $ | 69,817 |  |  | $ | (1,525 | ) |  | $ | 68,292 |
Equipment sales | 8,812 |  |  | (601 | ) |  | 8,211 |  |  | 24,138 |  |  | (2,047 | ) |  | 22,091 |
Total revenue | 35,832 |  |  | (2,240 | ) |  | 33,592 |  |  | 93,955 |  |  | (3,572 | ) |  | 90,383 |
Costs of sales: |  |  |  |  |  |  |  |  |  |  |
Cost of services | 16,012 |  |  | 25 |  |  | 16,037 |  |  | 43,700 |  |  | (60 | ) |  | 43,640 |
Cost of equipment | 7,876 |  |  | (166 | ) |  | 7,710 |  |  | 21,909 |  |  | (364 | ) |  | 21,545 |
Total costs of sales | 23,888 |  |  | (141 | ) |  | 23,747 |  |  | 65,609 |  |  | (424 | ) |  | 65,185 |
Gross profit | 11,944 |  |  | (2,099 | ) |  | 9,845 |  |  | 28,346 |  |  | (3,148 | ) |  | 25,198 |
Operating expenses: |  |  |  |  |  |  |  |  |  |  |
Selling, general and administrative | 9,572 |  |  | 57 |  |  | 9,629 |  |  | 24,647 |  |  | 911 |  |  | 25,558 |
Integration and acquisition costs | 1,747 |  |  | (70 | ) |  | 1,677 |  |  | 5,844 |  |  | (70 | ) |  | 5,774 |
Depreciation and amortization | 1,125 |  |  | (20 | ) |  | 1,105 |  |  | 2,107 |  |  | (20 | ) |  | 2,087 |
Total operating expenses | 12,444 |  |  | (33 | ) |  | 12,411 |  |  | 32,598 |  |  | 821 |  |  | 33,419 |
Operating loss | (500 | ) |  | (2,066 | ) |  | (2,566 | ) |  | (4,252 | ) |  | (3,969 | ) |  | (8,221 | )
Other income (expense): |  |  |  |  |  |  |  |  |  |  |
Interest income | 134 |  |  | 92 |  |  | 226 |  |  | 465 |  |  | 165 |  |  | 630 |
Interest expense | (612 | ) |  | (251 | ) |  | (863 | ) |  | (1,315 | ) |  | (791 | ) |  | (2,106 | )
Total other expense, net | (478 | ) |  | (159 | ) |  | (637 | ) |  | (850 | ) |  | (626 | ) |  | (1,476 | )
Loss before income taxes | (978 | ) |  | (2,225 | ) |  | (3,203 | ) |  | (5,102 | ) |  | (4,595 | ) |  | (9,697 | )
Benefit (provision) for income taxes | 2,138 |  |  | (2,158 | ) |  | (20 | ) |  | (6,467 | ) |  | 6,576 |  |  | 109 |
Net income (loss) | 1,160 |  |  | (4,383 | ) |  | (3,223 | ) |  | (11,569 | ) |  | 1,981 |  |  | (9,588 | )
Preferred dividends | (334 | ) |  | — |  |  | (334 | ) |  | (668 | ) |  | — |  |  | (668 | )
Net income (loss) applicable to common shares | $ | 826 |  |  | $ | (4,383 | ) |  | $ | (3,557 | ) |  | $ | (12,237 | ) |  | $ | 1,981 |  |  | $ | (10,256 | )
Net income (loss) per common share |  |  |  |  |  |  |  |  |  |  |
Basic | $ | 0.02 |  |  | $ | (0.09 | ) |  | $ | (0.07 | ) |  | $ | (0.24 | ) |  | $ | 0.04 |  |  | $ | (0.20 | )
Diluted | $ | 0.02 |  |  | $ | (0.09 | ) |  | $ | (0.07 | ) |  | $ | (0.24 | ) |  | $ | 0.04 |  |  | $ | (0.20 | )
Weighted average number of common shares outstanding |  |  |  |  |  |  |  |  |  |  |
Basic | 53,637,085 |  |  | — |  |  | 53,637,085 |  |  | 51,101,813 |  |  | — |  |  | 51,101,813 |
Diluted | 54,234,566 |  |  | (597,481 | ) |  | 53,637,085 |  |  | 51,101,813 |  |  | — |  |  | 51,101,813 |
The effect of the restatement on the previously filed consolidated statement of cash flows for the nine months ended March 31, 2018 is as follows:
| Nine months ended March 31, 2018
($ in thousands) | As Previously Reported |  | Adjustments |  | As Restated
OPERATING ACTIVITIES: |  |  |  |  |
Net loss | $ | (11,569 | ) |  | $ | 1,981 |  |  | $ | (9,588 | )
Adjustments to reconcile net loss to net cash provided by operating activities: |  |  |  |  |
Non-cash stock-based compensation | 2,005 |  |  | (581 | ) |  | 1,424 |
(Gain) loss on disposal of property and equipment | (112 | ) |  | 13 |  |  | (99 | )
Non-cash interest and amortization of debt discount | 100 |  |  | 18 |  |  | 118 |
Bad debt expense | 506 |  |  | 4 |  |  | 510 |
Provision for inventory reserve | — |  |  | 1,361 |  |  | 1,361 |
Depreciation and amortization | 5,858 |  |  | (272 | ) |  | 5,586 |
Excess tax benefits | 67 |  |  | — |  |  | 67 |
Deferred income taxes, net | 6,400 |  |  | (6,554 | ) |  | (154 | )
Recognition of deferred gain from sale-leaseback transactions | (143 | ) |  | 143 |  |  | — |
Changes in operating assets and liabilities: |  |  |  |  |
Accounts receivable | (12,972 | ) |  | 3,008 |  |  | (9,964 | )
Finance receivables, net | 11,114 |  |  | (2,912 | ) |  | 8,202 |
Sale of finance receivables | — |  |  | 2,051 |  |  | 2,051 |
Inventory, net | (5,624 | ) |  | (2,153 | ) |  | (7,777 | )
Prepaid expenses and other current assets | (564 | ) |  | 919 |  |  | 355 |
Accounts payable and accrued expenses | 13,808 |  |  | 1,447 |  |  | 15,255 |
Deferred revenue | (185 | ) |  | 536 |  |  | 351 |
Income taxes payable | — |  |  | (30 | ) |  | (30 | )
Net cash provided by operating activities | 8,689 |  |  | (1,021 | ) |  | 7,668 |
INVESTING ACTIVITIES: |  |  |  |  |
Purchase of property and equipment, including rentals | (3,005 | ) |  | (133 | ) |  | (3,138 | )
Proceeds from sale of property and equipment | 252 |  |  | — |  |  | 252 |
Cash paid for acquisitions, net of cash acquired | (65,181 | ) |  | — |  |  | (65,181 | )
Net cash used in investing activities | (67,934 | ) |  | (133 | ) |  | (68,067 | )
FINANCING ACTIVITIES: |  |  |  |  |
Proceeds from collateralized borrowing from the transfer of finance receivables | — |  |  | 1,075 |  |  | 1,075 |
Cash used in retirement of common stock | (156 | ) |  | — |  |  | (156 | )
Proceeds from exercise of common stock options | 109 |  |  | — |  |  | 109 |
Payment of debt issuance costs | (445 | ) |  | — |  |  | (445 | )
Proceeds from issuance of long-term debt | 25,100 |  |  | — |  |  | 25,100 |
Proceeds from revolving credit facility | 12,500 |  |  | — |  |  | 12,500 |
Repayment of revolving credit facility | (2,500 | ) |  | — |  |  | (2,500 | )
Issuance of common stock in public offering, net | 39,888 |  |  | — |  |  | 39,888 |
Repayment of line of credit | (7,111 | ) |  | — |  |  | (7,111 | )
Repayment of capital lease obligations and long-term debt | (3,778 | ) |  | 27 |  |  | (3,751 | )
Net cash provided by financing activities | 63,607 |  |  | 1,102 |  |  | 64,709 |
Net increase in cash and cash equivalents | 4,362 |  |  | (52 | ) |  | 4,310 |
Cash and cash equivalents at beginning of year | 12,745 |  |  | — |  |  | 12,745 |
Cash and cash equivalents at end of period | $ | 17,107 |  |  | $ | (52 | ) |  | $ | 17,055 |
The effect of the restatement on the previously filed consolidated balance sheet as of September 30, 2016 is as follows:
| As of September 30, 2016
($ in thousands, except per share data) | As Previously Reported |  | Adjustments |  | As Restated
Assets |  |  |  |  |
Current assets: |  |  |  |  |
Cash and cash equivalents | $ | 18,198 |  |  | $ | — |  |  | $ | 18,198 |
Accounts receivable | 5,840 |  |  | (233 | ) |  | 5,607 |
Finance receivables, net | 3,349 |  |  | — |  |  | 3,349 |
Inventory, net | 4,264 |  |  | (338 | ) |  | 3,926 |
Prepaid expenses and other current assets | 1,439 |  |  | (87 | ) |  | 1,352 |
Deferred income taxes | 2,271 |  |  | (2,271 | ) |  | — |
Total current assets | 35,361 |  |  | (2,929 | ) |  | 32,432 |
Non-current assets: |  |  |  |  |
Finance receivables due after one year | 3,962 |  |  | — |  |  | 3,962 |
Other assets | 163 |  |  | — |  |  | 163 |
Property and equipment, net | 9,570 |  |  | 2,866 |  |  | 12,436 |
Deferred income taxes | 25,568 |  |  | (25,568 | ) |  | — |
Intangibles, net | 754 |  |  | — |  |  | 754 |
Goodwill | 11,703 |  |  | — |  |  | 11,703 |
Total non-current assets | 51,720 |  |  | (22,702 | ) |  | 29,018 |
Total assets | $ | 87,081 |  |  | $ | (25,631 | ) |  | $ | 61,450 |
Liabilities, convertible preferred stock and shareholders’ equity |  |  |  |  |
Current liabilities: |  |  |  |  |
Accounts payable | $ | 8,693 |  |  | $ | 17 |  |  | $ | 8,710 |
Accrued expenses | 3,912 |  |  | 4,223 |  |  | 8,135 |
Line of credit, net | 7,258 |  |  | 13 |  |  | 7,271 |
Capital lease obligations and current obligations under long-term debt | 834 |  |  | 4,118 |  |  | 4,952 |
Income taxes payable | 8 |  |  | 7 |  |  | 15 |
Deferred revenue | — |  |  | 94 |  |  | 94 |
Deferred gain from sale-leaseback transactions | 685 |  |  | (685 | ) |  | — |
Total current liabilities | 21,390 |  |  | 7,787 |  |  | 29,177 |
Long-term liabilities: |  |  |  |  |
Deferred income tax | — |  |  | 47 |  |  | 47 |
Capital lease obligations and long-term debt, less current portion | 1,517 |  |  | — |  |  | 1,517 |
Accrued expenses, less current portion | 11 |  |  | — |  |  | 11 |
Total long-term liabilities | 1,528 |  |  | 47 |  |  | 1,575 |
Total liabilities | $ | 22,918 |  |  | $ | 7,834 |  |  | $ | 30,752 |
Commitments and contingencies |  |  |  |  |  |  |  |
Convertible preferred stock: |  |  |  |  |
Series A convertible preferred stock, 900,000 shares authorized, 445,063 issued and outstanding, with liquidation preference of $18,442 at September 30, 2016 | — |  |  | 3,138 |  |  | 3,138 |
Shareholders’ equity: |  |  |  |  |
Preferred stock, no par value, 1,800,000 shares authorized, no shares issued | — |  |  | — |  |  | — |
Series A convertible preferred stock, 900,000 shares authorized, 445,063 issued and outstanding, with liquidation preference of $18,442 at September 30, 2016 | 3,138 |  |  | (3,138 | ) |  | — |
Common stock, no par value, 640,000,000 shares authorized, 40,295,425 shares issued and outstanding at September 30, 2016 | 244,996 |  |  | — |  |  | 244,996 |
Accumulated deficit | (183,971 | ) |  | (33,465 | ) |  | (217,436 | )
Total shareholders’ equity | 64,163 |  |  | (36,603 | ) |  | 27,560 |
Total liabilities, convertible preferred stock and shareholders’ equity | $ | 87,081 |  |  | $ | (25,631 | ) |  | $ | 61,450 |
The effect of the restatement on the previously filed consolidated statement of operations for the three months ended September 30, 2016 is as follows:
| Three months ended September 30, 2016
($ in thousands, except per share data) | As Previously Reported |  | Adjustments |  | As Restated
Revenue: |  |  |  |  |
License and transaction fees | $ | 16,365 |  |  | $ | (2 | ) |  | $ | 16,363 |
Equipment sales | 5,223 |  |  | (17 | ) |  | 5,206 |
Total revenue | 21,588 |  |  | (19 | ) |  | 21,569 |
Costs of sales: |  |  |  |  |
Cost of services | 11,243 |  |  | (144 | ) |  | 11,099 |
Cost of equipment | 4,178 |  |  | (5 | ) |  | 4,173 |
Total costs of sales | 15,421 |  |  | (149 | ) |  | 15,272 |
Gross profit | 6,167 |  |  | 130 |  |  | 6,297 |
Operating expenses: |  |  |  |  |
Selling, general and administrative | 6,909 |  |  | 563 |  |  | 7,472 |
Depreciation and amortization | 208 |  |  | — |  |  | 208 |
Total operating expenses | 7,117 |  |  | 563 |  |  | 7,680 |
Operating loss | (950 | ) |  | (433 | ) |  | (1,383 | )
Other income (expense): |  |  |  |  |
Interest income | 73 |  |  | — |  |  | 73 |
Interest expense | (212 | ) |  | (335 | ) |  | (547 | )
Change in fair value of warrant liabilities | (1,490 | ) |  | — |  |  | (1,490 | )
Total other expense, net | (1,629 | ) |  | (335 | ) |  | (1,964 | )
Loss before income taxes | (2,579 | ) |  | (768 | ) |  | (3,347 | )
Benefit (provision) for income taxes | 115 |  |  | (138 | ) |  | (23 | )
Net loss | (2,464 | ) |  | (906 | ) |  | (3,370 | )
Preferred dividends | (334 | ) |  | — |  |  | (334 | )
Net loss applicable to common shares | $ | (2,798 | ) |  | $ | (906 | ) |  | $ | (3,704 | )
Net loss per common share |  |  |  |  |
Basic | $ | (0.07 | ) |  | $ | (0.03 | ) |  | $ | (0.10 | )
Diluted | $ | (0.07 | ) |  | $ | (0.03 | ) |  | $ | (0.10 | )
Weighted average number of common shares outstanding |  |  |  |  |
Basic | 38,488,005 |  |  | — |  |  | 38,488,005 |
Diluted | 38,488,005 |  |  | — |  |  | 38,488,005 |
The effect of the restatement on the previously filed consolidated statement of cash flows for the three months ended September 30, 2016 is as follows:
| Three months ended September 30, 2016
($ in thousands) | As Previously Reported |  | Adjustments |  | As Restated
OPERATING ACTIVITIES: |  |  |  |  |
Net loss | $ | (2,464 | ) |  | $ | (906 | ) |  | $ | (3,370 | )
Adjustments to reconcile net loss to net cash used in operating activities: |  |  |  |  |
Non-cash stock-based compensation | 211 |  |  | — |  |  | 211 |
Non-cash interest and amortization of debt discount | 105 |  |  | 34 |  |  | 139 |
Bad debt expense | 97 |  |  | 102 |  |  | 199 |
Provision for inventory reserve | — |  |  | 248 |  |  | 248 |
Depreciation and amortization | 1,301 |  |  | 302 |  |  | 1,603 |
Change in fair value of warrant liabilities | 1,490 |  |  | — |  |  | 1,490 |
Deferred income taxes, net | (115 | ) |  | 130 |  |  | 15 |
Recognition of deferred gain from sale-leaseback transactions | (215 | ) |  | 215 |  |  | — |
Changes in operating assets and liabilities: |  |  |  |  |
Accounts receivable | (1,038 | ) |  | 35 |  |  | (1,003 | )
Finance receivables, net | (5 | ) |  | — |  |  | (5 | )
Inventory, net | (2,223 | ) |  | (490 | ) |  | (2,713 | )
Prepaid expenses and other current assets | (224 | ) |  | 100 |  |  | (124 | )
Accounts payable and accrued expenses | (3,175 | ) |  | 632 |  |  | (2,543 | )
Deferred revenue | — |  |  | (59 | ) |  | (59 | )
Income taxes payable | (10 | ) |  | 7 |  |  | (3 | )
Net cash used in operating activities | (6,265 | ) |  | 350 |  |  | (5,915 | )
INVESTING ACTIVITIES: |  |  |  |  |
Purchase of property and equipment, including rentals | (810 | ) |  | 187 |  |  | (623 | )
Net cash used in investing activities | (810 | ) |  | 187 |  |  | (623 | )
FINANCING ACTIVITIES: |  |  |  |  |
Cash used in retirement of common stock | (31 | ) |  | — |  |  | (31 | )
Proceeds from exercise of common stock warrants | 6,193 |  |  | — |  |  | 6,193 |
Repayment of capital lease obligations and long-term debt | (161 | ) |  | (537 | ) |  | (698 | )
Net cash provided by financing activities | 6,001 |  |  | (537 | ) |  | 5,464 |
Net decrease in cash and cash equivalents | (1,074 | ) |  | — |  |  | (1,074 | )
Cash and cash equivalents at beginning of year | 19,272 |  |  | — |  |  | 19,272 |
Cash and cash equivalents at end of period | $ | 18,198 |  |  | $ | — |  |  | $ | 18,198 |
The effect of the restatement on the previously filed consolidated balance sheet as of December 31, 2016 is as follows:
| As of December 31, 2016
($ in thousands, except per share data) | As Previously Reported |  | Adjustments |  | As Restated
Assets |  |  |  |  |
Current assets: |  |  |  |  |
Cash and cash equivalents | $ | 18,034 |  |  | $ | — |  |  | $ | 18,034 |
Accounts receivable | 6,796 |  |  | 96 |  |  | 6,892 |
Finance receivables, net | 1,442 |  |  | — |  |  | 1,442 |
Inventory, net | 4,786 |  |  | (348 | ) |  | 4,438 |
Prepaid expenses and other current assets | 1,764 |  |  | (87 | ) |  | 1,677 |
Deferred income taxes | 2,271 |  |  | (2,271 | ) |  | — |
Total current assets | 35,093 |  |  | (2,610 | ) |  | 32,483 |
Non-current assets: |  |  |  |  |
Finance receivables due after one year | 3,956 |  |  | — |  |  | 3,956 |
Other assets | 145 |  |  | (1 | ) |  | 144 |
Property and equipment, net | 9,433 |  |  | 2,561 |  |  | 11,994 |
Deferred income taxes | 25,568 |  |  | (25,568 | ) |  | — |
Intangibles, net | 711 |  |  | — |  |  | 711 |
Goodwill | 11,492 |  |  | — |  |  | 11,492 |
Total non-current assets | 51,305 |  |  | (23,008 | ) |  | 28,297 |
Total assets | $ | 86,398 |  |  | $ | (25,618 | ) |  | $ | 60,780 |
Liabilities, convertible preferred stock and shareholders’ equity |  |  |  |  |
Current liabilities: |  |  |  |  |
Accounts payable | $ | 9,090 |  |  | $ | 19 |  |  | $ | 9,109 |
Accrued expenses | 2,912 |  |  | 4,629 |  |  | 7,541 |
Line of credit, net | 7,078 |  |  | 13 |  |  | 7,091 |
Capital lease obligations and current obligations under long-term debt | 766 |  |  | 3,565 |  |  | 4,331 |
Income taxes payable | 6 |  |  | 15 |  |  | 21 |
Deferred revenue | — |  |  | 478 |  |  | 478 |
Deferred gain from sale-leaseback transactions | 470 |  |  | (470 | ) |  | — |
Total current liabilities | 20,322 |  |  | 8,249 |  |  | 28,571 |
Long-term liabilities: |  |  |  |  |
Deferred income taxes | — |  |  | 63 |  |  | 63 |
Capital lease obligations and long-term debt, less current portion | 1,394 |  |  | — |  |  | 1,394 |
Accrued expenses, less current portion | 52 |  |  | — |  |  | 52 |
Total long-term liabilities | 1,446 |  |  | 63 |  |  | 1,509 |
Total liabilities | $ | 21,768 |  |  | $ | 8,312 |  |  | $ | 30,080 |
Commitments and contingencies |  |  |  |  |  |  |  |
Convertible preferred stock: |  |  |  |  |
Series A convertible preferred stock, 900,000 shares authorized, 445,063 issued and outstanding, with liquidation preference of $18,442 at December 31, 2016 | — |  |  | 3,138 |  |  | 3,138 |
Shareholders’ equity: |  |  |  |  |
Preferred stock, no par value, 1,800,000 shares authorized, no shares issued | — |  |  | — |  |  | — |
Series A convertible preferred stock, 900,000 shares authorized, 445,063 issued and outstanding, with liquidation preference of $18,442 at December 31, 2016 | 3,138 |  |  | (3,138 | ) |  | — |
Common stock, no par value, 640,000,000 shares authorized, 40,321,941 shares issued and outstanding at December 31, 2016 | 245,230 |  |  | — |  |  | 245,230 |
Accumulated deficit | (183,738 | ) |  | (33,930 | ) |  | (217,668 | )
Total shareholders’ equity | 64,630 |  |  | (37,068 | ) |  | 27,562 |
Total liabilities, convertible preferred stock and shareholders’ equity | $ | 86,398 |  |  | $ | (25,618 | ) |  | $ | 60,780 |
The effect of the restatement on the previously filed consolidated statement of operations for the three and six months ended December 31, 2016 is as follows:
| Three months ended December 31, 2016 |  | Six months ended December 31, 2016
($ in thousands, except per share data) | As Previously Reported |  | Adjustments |  | As Restated |  | As Previously Reported |  | Adjustments |  | As Restated
Revenue: |  |  |  |  |  |  |  |  |  |  |
License and transaction fees | $ | 16,639 |  |  | $ | (2 | ) |  | $ | 16,637 |  |  | $ | 33,004 |  |  | $ | (4 | ) |  | $ | 33,000 |
Equipment sales | 5,117 |  |  | 33 |  |  | 5,150 |  |  | 10,340 |  |  | 16 |  |  | 10,356 |
Total revenue | 21,756 |  |  | 31 |  |  | 21,787 |  |  | 43,344 |  |  | 12 |  |  | 43,356 |
Costs of sales: |  |  |  |  |  |  |  |  |  |  |
Cost of services | 11,389 |  |  | (143 | ) |  | 11,246 |  |  | 22,632 |  |  | (287 | ) |  | 22,345 |
Cost of equipment | 4,033 |  |  | 63 |  |  | 4,096 |  |  | 8,211 |  |  | 58 |  |  | 8,269 |
Total costs of sales | 15,422 |  |  | (80 | ) |  | 15,342 |  |  | 30,843 |  |  | (229 | ) |  | 30,614 |
Gross profit | 6,334 |  |  | 111 |  |  | 6,445 |  |  | 12,501 |  |  | 241 |  |  | 12,742 |
Operating expenses: |  |  |  |  |  |  |  |  |  |  |
Selling, general and administrative | 5,793 |  |  | 236 |  |  | 6,029 |  |  | 12,702 |  |  | 799 |  |  | 13,501 |
Depreciation and amortization | 307 |  |  | — |  |  | 307 |  |  | 515 |  |  | — |  |  | 515 |
Total operating expenses | 6,100 |  |  | 236 |  |  | 6,336 |  |  | 13,217 |  |  | 799 |  |  | 14,016 |
Operating income (loss) | 234 |  |  | (125 | ) |  | 109 |  |  | (716 | ) |  | (558 | ) |  | (1,274 | )
Other income (expense): |  |  |  |  |  |  |  |  |  |  |
Interest income | 200 |  |  | — |  |  | 200 |  |  | 273 |  |  | — |  |  | 273 |
Interest expense | (201 | ) |  | (317 | ) |  | (518 | ) |  | (413 | ) |  | (652 | ) |  | (1,065 | )
Change in fair value of warrant liabilities | — |  |  | — |  |  | — |  |  | (1,490 | ) |  | — |  |  | (1,490 | )
Total other expense, net | (1 | ) |  | (317 | ) |  | (318 | ) |  | (1,630 | ) |  | (652 | ) |  | (2,282 | )
Income (loss) before income taxes | 233 |  |  | (442 | ) |  | (209 | ) |  | (2,346 | ) |  | (1,210 | ) |  | (3,556 | )
(Provision) benefit for income taxes | — |  |  | (23 | ) |  | (23 | ) |  | 115 |  |  | (161 | ) |  | (46 | )
Net income (loss) | 233 |  |  | (465 | ) |  | (232 | ) |  | (2,231 | ) |  | (1,371 | ) |  | (3,602 | )
Preferred dividends | — |  |  | — |  |  | — |  |  | (334 | ) |  | — |  |  | (334 | )
Net income (loss) applicable to common shares | $ | 233 |  |  | $ | (465 | ) |  | $ | (232 | ) |  | $ | (2,565 | ) |  | $ | (1,371 | ) |  | $ | (3,936 | )
Net income (loss) per common share |  |  |  |  |  |  |  |  |  |  |
Basic | $ | 0.01 |  |  | $ | (0.02 | ) |  | $ | (0.01 | ) |  | $ | (0.07 | ) |  | $ | (0.03 | ) |  | $ | (0.10 | )
Diluted | $ | 0.01 |  |  | $ | (0.02 | ) |  | $ | (0.01 | ) |  | $ | (0.07 | ) |  | $ | (0.03 | ) |  | $ | (0.10 | )
Weighted average number of common shares outstanding |  |  |  |  |  |  |  |  |  |  |
Basic | 40,308,934 |  |  | — |  |  | 40,308,934 |  |  | 39,398,469 |  |  | — |  |  | 39,398,469 |
Diluted | 40,730,712 |  |  | (421,778 | ) |  | 40,308,934 |  |  | 39,398,469 |  |  | — |  |  | 39,398,469 |
The effect of the restatement on the previously filed consolidated statement of cash flows for the six months ended December 31, 2016 is as follows:
| Six months ended December 31, 2016
($ in thousands) | As Previously Reported |  | Adjustments |  | As Restated
OPERATING ACTIVITIES: |  |  |  |  |
Net loss | $ | (2,231 | ) |  | $ | (1,371 | ) |  | $ | (3,602 | )
Adjustments to reconcile net loss to net cash used in operating activities: |  |  |  |  |
Non-cash stock-based compensation | 445 |  |  | — |  |  | 445 |
(Gain) loss on disposal of property and equipment | (31 | ) |  | (3 | ) |  | (34 | )
Non-cash interest and amortization of debt discount | 26 |  |  | 39 |  |  | 65 |
Bad debt expense | 450 |  |  | (119 | ) |  | 331 |
Provision for inventory reserve | — |  |  | 480 |  |  | 480 |
Depreciation and amortization | 2,564 |  |  | 600 |  |  | 3,164 |
Change in fair value of warrant liabilities | 1,490 |  |  | — |  |  | 1,490 |
Deferred income taxes, net | (115 | ) |  | 145 |  |  | 30 |
Recognition of deferred gain from sale-leaseback transactions | (430 | ) |  | 430 |  |  | — |
Changes in operating assets and liabilities: |  |  |  |  |
Accounts receivable | (2,347 | ) |  | (71 | ) |  | (2,418 | )
Finance receivables, net | 2,119 |  |  | — |  |  | 2,119 |
Inventory, net | (2,689 | ) |  | (714 | ) |  | (3,403 | )
Prepaid expenses and other current assets | (542 | ) |  | 100 |  |  | (442 | )
Accounts payable and accrued expenses | (3,840 | ) |  | 1,140 |  |  | (2,700 | )
Deferred revenue | — |  |  | 326 |  |  | 326 |
Income taxes payable | (12 | ) |  | 15 |  |  | 3 |
Net cash used in operating activities | (5,143 | ) |  | 997 |  |  | (4,146 | )
INVESTING ACTIVITIES: |  |  |  |  |
Purchase of property and equipment, including rentals | (1,944 | ) |  | 192 |  |  | (1,752 | )
Proceeds from sale of property and equipment | 61 |  |  | — |  |  | 61 |
Net cash used in investing activities | (1,883 | ) |  | 192 |  |  | (1,691 | )
FINANCING ACTIVITIES: |  |  |  |  |
Cash used in retirement of common stock | (31 | ) |  | — |  |  | (31 | )
Proceeds from exercise of common stock warrants | 6,193 |  |  | — |  |  | 6,193 |
Repayment of line of credit | — |  |  | (106 | ) |  | (106 | )
Repayment of capital lease obligations and long-term debt | (374 | ) |  | (1,083 | ) |  | (1,457 | )
Net cash provided by financing activities | 5,788 |  |  | (1,189 | ) |  | 4,599 |
Net decrease in cash and cash equivalents | (1,238 | ) |  | — |  |  | (1,238 | )
Cash and cash equivalents at beginning of year | 19,272 |  |  | — |  |  | 19,272 |
Cash and cash equivalents at end of period | $ | 18,034 |  |  | $ | — |  |  | $ | 18,034 |
The effect of the restatement on the previously filed consolidated balance sheet as of March 31, 2017 is as follows:
| As of March 31, 2017
($ in thousands, except per share data) | As Previously Reported |  | Adjustments |  | As Restated
Assets |  |  |  |  |
Current assets: |  |  |  |  |
Cash and cash equivalents | $ | 17,780 |  |  | $ | — |  |  | $ | 17,780 |
Accounts receivable | 6,734 |  |  | (72 | ) |  | 6,662 |
Finance receivables, net | 2,057 |  |  | 92 |  |  | 2,149 |
Inventory, net | 4,147 |  |  | (470 | ) |  | 3,677 |
Prepaid expenses and other current assets | 1,628 |  |  | (34 | ) |  | 1,594 |
Deferred income taxes | 2,271 |  |  | (2,271 | ) |  | — |
Total current assets | 34,617 |  |  | (2,755 | ) |  | 31,862 |
Non-current assets: |  |  |  |  |
Finance receivables due after one year | 7,548 |  |  | — |  |  | 7,548 |
Other assets | 137 |  |  | 94 |  |  | 231 |
Property and equipment, net | 9,173 |  |  | 2,168 |  |  | 11,341 |
Deferred income taxes | 25,359 |  |  | (25,359 | ) |  | — |
Intangibles, net | 666 |  |  | — |  |  | 666 |
Goodwill | 11,492 |  |  | — |  |  | 11,492 |
Total non-current assets | 54,375 |  |  | (23,097 | ) |  | 31,278 |
Total assets | $ | 88,992 |  |  | $ | (25,852 | ) |  | $ | 63,140 |
Liabilities, convertible preferred stock and shareholders’ equity |  |  |  |  |
Current liabilities: |  |  |  |  |
Accounts payable | $ | 11,529 |  |  | $ | 290 |  |  | $ | 11,819 |
Accrued expenses | 3,111 |  |  | 5,681 |  |  | 8,792 |
Line of credit, net | 7,021 |  |  | 13 |  |  | 7,034 |
Capital lease obligations and current obligations under long-term debt | 786 |  |  | 2,999 |  |  | 3,785 |
Income taxes payable | — |  |  | 23 |  |  | 23 |
Deferred revenue | — |  |  | 310 |  |  | 310 |
Deferred gain from sale-leaseback transactions | 255 |  |  | (255 | ) |  | — |
Total current liabilities | 22,702 |  |  | 9,061 |  |  | 31,763 |
Long-term liabilities: |  |  |  |  |
Deferred income taxes | — |  |  | 78 |  |  | 78 |
Capital lease obligations and long-term debt, less current portion | 1,239 |  |  | — |  |  | 1,239 |
Accrued expenses, less current portion | 52 |  |  | — |  |  | 52 |
Total long-term liabilities | 1,291 |  |  | 78 |  |  | 1,369 |
Total liabilities | $ | 23,993 |  |  | $ | 9,139 |  |  | $ | 33,132 |
Commitments and contingencies |  |  |  |  |  |  |  |
Convertible preferred stock: |  |  |  |  |
Series A convertible preferred stock, 900,000 shares authorized, 445,063 issued and outstanding, with liquidation preference of $18,775 at March 31, 2017 | — |  |  | 3,138 |  |  | 3,138 |
Shareholders’ equity: |  |  |  |  |
Preferred stock, no par value, 1,800,000 shares authorized, no shares issued | — |  |  | — |  |  | — |
Series A convertible preferred stock, 900,000 shares authorized, 445,063 issued and outstanding, with liquidation preference of $18,775 at March 31, 2017 | 3,138 |  |  | (3,138 | ) |  | — |
Common stock, no par value, 640,000,000 shares authorized, 40,327,675 shares issued and outstanding at March 31, 2017 | 245,463 |  |  | — |  |  | 245,463 |
Accumulated deficit | (183,602 | ) |  | (34,991 | ) |  | (218,593 | )
Total shareholders’ equity | 64,999 |  |  | (38,129 | ) |  | 26,870 |
Total liabilities, convertible preferred stock and shareholders’ equity | $ | 88,992 |  |  | $ | (25,852 | ) |  | $ | 63,140 |
The effect of the restatement on the previously filed consolidated statement of operations for the three and nine months ended March 31, 2017 is as follows:
| Three months ended March 31, 2017 |  | Nine months ended March 31, 2017
($ in thousands, except per share data) | As Previously Reported |  | Adjustments |  | As Restated |  | As Previously Reported |  | Adjustments |  | As Restated
Revenue: |  |  |  |  |  |  |  |  |  |  |
License and transaction fees | $ | 17,459 |  |  | $ | (1 | ) |  | $ | 17,458 |  |  | $ | 50,463 |  |  | $ | (5 | ) |  | $ | 50,458 |
Equipment sales | 9,001 |  |  | (158 | ) |  | 8,843 |  |  | 19,341 |  |  | (142 | ) |  | 19,199 |
Total revenue | 26,460 |  |  | (159 | ) |  | 26,301 |  |  | 69,804 |  |  | (147 | ) |  | 69,657 |
Costs of sales: |  |  |  |  |  |  |  |  |  |  |
Cost of services | 11,876 |  |  | (143 | ) |  | 11,733 |  |  | 34,508 |  |  | (430 | ) |  | 34,078 |
Cost of equipment | 7,959 |  |  | 267 |  |  | 8,226 |  |  | 16,170 |  |  | 325 |  |  | 16,495 |
Total costs of sales | 19,835 |  |  | 124 |  |  | 19,959 |  |  | 50,678 |  |  | (105 | ) |  | 50,573 |
Gross profit | 6,625 |  |  | (283 | ) |  | 6,342 |  |  | 19,126 |  |  | (42 | ) |  | 19,084 |
Operating expenses: |  |  |  |  |  |  |  |  |  |  |
Selling, general and administrative | 5,947 |  |  | 595 |  |  | 6,542 |  |  | 18,649 |  |  | 1,394 |  |  | 20,043 |
Depreciation and amortization | 259 |  |  | — |  |  | 259 |  |  | 774 |  |  | — |  |  | 774 |
Total operating expenses | 6,206 |  |  | 595 |  |  | 6,801 |  |  | 19,423 |  |  | 1,394 |  |  | 20,817 |
Operating income (loss) | 419 |  |  | (878 | ) |  | (459 | ) |  | (297 | ) |  | (1,436 | ) |  | (1,733 | )
Other income (expense): |  |  |  |  |  |  |  |  |  |  |
Interest income | 114 |  |  | — |  |  | 114 |  |  | 387 |  |  | — |  |  | 387 |
Interest expense | (188 | ) |  | (369 | ) |  | (557 | ) |  | (601 | ) |  | (1,021 | ) |  | (1,622 | )
Change in fair value of warrant liabilities | — |  |  | — |  |  | — |  |  | (1,490 | ) |  | — |  |  | (1,490 | )
Total other expense, net | (74 | ) |  | (369 | ) |  | (443 | ) |  | (1,704 | ) |  | (1,021 | ) |  | (2,725 | )
Income (loss) before income taxes | 345 |  |  | (1,247 | ) |  | (902 | ) |  | (2,001 | ) |  | (2,457 | ) |  | (4,458 | )
(Provision) benefit for income taxes | (209 | ) |  | 186 |  |  | (23 | ) |  | (94 | ) |  | 25 |  |  | (69 | )
Net income (loss) | 136 |  |  | (1,061 | ) |  | (925 | ) |  | (2,095 | ) |  | (2,432 | ) |  | (4,527 | )
Preferred dividends | (334 | ) |  | — |  |  | (334 | ) |  | (668 | ) |  | — |  |  | (668 | )
Net loss applicable to common shares | $ | (198 | ) |  | $ | (1,061 | ) |  | $ | (1,259 | ) |  | $ | (2,763 | ) |  | $ | (2,432 | ) |  | $ | (5,195 | )
Net loss per common share |  |  |  |  |  |  |  |  |  |  |
Basic | $ | — |  |  | $ | (0.03 | ) |  | $ | (0.03 | ) |  | $ | (0.07 | ) |  | $ | (0.06 | ) |  | $ | (0.13 | )
Diluted | $ | — |  |  | $ | (0.03 | ) |  | $ | (0.03 | ) |  | $ | (0.07 | ) |  | $ | (0.06 | ) |  | $ | (0.13 | )
Weighted average number of common shares outstanding |  |  |  |  |  |  |  |  |  |  |
Basic | 40,327,697 |  |  | — |  |  | 40,327,697 |  |  | 39,703,690 |  |  | — |  |  | 39,703,690 |
Diluted | 40,327,697 |  |  | — |  |  | 40,327,697 |  |  | 39,703,690 |  |  | — |  |  | 39,703,690 |
The effect of the restatement on the previously filed consolidated statement of cash flows for the nine months ended March 31, 2017 is as follows:
| Nine months ended March 31, 2017
($ in thousands) | As Previously Reported |  | Adjustments |  | As Restated
OPERATING ACTIVITIES: |  |  |  |  |
Net loss | $ | (2,095 | ) |  | $ | (2,432 | ) |  | $ | (4,527 | )
Adjustments to reconcile net loss to net cash used in operating activities: |  |  |  |  |
Non-cash stock-based compensation | 678 |  |  | — |  |  | 678 |
(Gain) loss on disposal of property and equipment | (59 | ) |  | — |  |  | (59 | )
Non-cash interest and amortization of debt discount | 98 |  |  | — |  |  | 98 |
Bad debt expense | 577 |  |  | (117 | ) |  | 460 |
Provision for inventory reserve | — |  |  | 804 |  |  | 804 |
Depreciation and amortization | 3,774 |  |  | 905 |  |  | 4,679 |
Change in fair value of warrant liabilities | 1,490 |  |  | — |  |  | 1,490 |
Deferred income taxes, net | 94 |  |  | (48 | ) |  | 46 |
Recognition of deferred gain from sale-leaseback transactions | (646 | ) |  | 646 |  |  | — |
Changes in operating assets and liabilities: |  |  |  |  |
Accounts receivable | (2,388 | ) |  | 72 |  |  | (2,316 | )
Finance receivables, net | (2,113 | ) |  | (67 | ) |  | (2,180 | )
Inventory, net | (2,042 | ) |  | (915 | ) |  | (2,957 | )
Prepaid expenses and other current assets | (406 | ) |  | (48 | ) |  | (454 | )
Accounts payable and accrued expenses | (1,239 | ) |  | 2,501 |  |  | 1,262 |
Deferred revenue | — |  |  | 157 |  |  | 157 |
Income taxes payable | (18 | ) |  | 22 |  |  | 4 |
Net cash used in operating activities | (4,295 | ) |  | 1,480 |  |  | (2,815 | )
INVESTING ACTIVITIES: |  |  |  |  |
Purchase of property and equipment, including rentals | (2,818 | ) |  | 282 |  |  | (2,536 | )
Proceeds from sale of property and equipment | 105 |  |  | — |  |  | 105 |
Net cash used in investing activities | (2,713 | ) |  | 282 |  |  | (2,431 | )
FINANCING ACTIVITIES: |  |  |  |  |
Cash used in retirement of common stock | (31 | ) |  | — |  |  | (31 | )
Proceeds from exercise of common stock warrants | 6,193 |  |  | — |  |  | 6,193 |
Payment of debt issuance costs | (90 | ) |  | — |  |  | (90 | )
Repayment of line of credit | — |  |  | (106 | ) |  | (106 | )
Repayment of capital lease obligations and long-term debt | (556 | ) |  | (1,656 | ) |  | (2,212 | )
Net cash provided by financing activities | 5,516 |  |  | (1,762 | ) |  | 3,754 |
Net decrease in cash and cash equivalents | (1,492 | ) |  | — |  |  | (1,492 | )
Cash and cash equivalents at beginning of year | 19,272 |  |  | — |  |  | 19,272 |
Cash and cash equivalents at end of period | $ | 17,780 |  |  | $ | — |  |  | $ | 17,780 |
The effect of the restatement on the previously filed consolidated statement of operations for the three months ended June 30, 2017 is as follows:
| Three months ended June 30, 2017
($ in thousands, except per share data) | As Previously Reported |  | Adjustments |  | As Restated
Revenue: |  |  |  |  |
License and transaction fees | $ | 18,679 |  |  | $ | (3 | ) |  | $ | 18,676 |
Equipment sales | 15,610 |  |  | (2,507 | ) |  | 13,103 |
Total revenue | 34,289 |  |  | (2,510 | ) |  | 31,779 |
Costs of sales: |  |  |  |  |
Cost of services | 12,545 |  |  | (103 | ) |  | 12,442 |
Cost of equipment | 14,224 |  |  | (864 | ) |  | 13,360 |
Total costs of sales | 26,769 |  |  | (967 | ) |  | 25,802 |
Gross profit | 7,520 |  |  | (1,543 | ) |  | 5,977 |
Operating expenses: |  |  |  |  |
Selling, general and administrative | 6,844 |  |  | 1,290 |  |  | 8,134 |
Depreciation and amortization | 244 |  |  | — |  |  | 244 |
Total operating expenses | 7,088 |  |  | 1,290 |  |  | 8,378 |
Operating income (loss) | 432 |  |  | (2,833 | ) |  | (2,401 | )
Other income (expense): |  |  |  |  |
Interest income | 95 |  |  | — |  |  | 95 |
Interest expense | (291 | ) |  | (315 | ) |  | (606 | )
Total other expense, net | (196 | ) |  | (315 | ) |  | (511 | )
Income (loss) before income taxes | 236 |  |  | (3,148 | ) |  | (2,912 | )
Benefit (provision) for income taxes | 7 |  |  | (33 | ) |  | (26 | )
Net income (loss) | 243 |  |  | (3,181 | ) |  | (2,938 | )
Preferred dividends | — |  |  | — |  |  | — |
Net income (loss) applicable to common shares | $ | 243 |  |  | $ | (3,181 | ) |  | $ | (2,938 | )
Net income (loss) per common share |  |  |  |  |
Basic | $ | 0.01 |  |  | $ | (0.08 | ) |  | $ | (0.07 | )
Diluted | $ | 0.01 |  |  | $ | (0.08 | ) |  | $ | (0.07 | )
Weighted average number of common shares outstanding |  |  |  |  |
Basic | 40,331,993 |  |  | — |  |  | 40,331,993 |
Diluted | 40,772,482 |  |  | (440,489 | ) |  | 40,331,993 |

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- Definition The entire disclosure for quarterly financial data. Includes, but is not limited to, tabular presentation of financial information for fiscal quarters, effect of year-end adjustments, and an explanation of matters or transactions that affect comparability of the information. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 270 -URI http://asc.fasb.org/topic&trid=2126967 + Details
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