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RESTATEMENT AND REVISION OF PRIOR PERIOD FINANCIAL STATEMENTS | 3 Months Ended
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Sep. 30, 2019
Accounting Changes and Error Corrections [Abstract] |
Restatement and Revision of Prior Period Financial Statements | RESTATEMENT AND REVISION OF PRIOR PERIOD FINANCIAL STATEMENTS Overview This Amendment No. 1 on Form 10-Q/A amends our Quarterly Report on Form 10-Q for the three months ended September 30, 2019 and includes restatement of the following previously filed condensed consolidated unaudited financial statements and data (and related disclosures): the condensed consolidated balance sheet as of September 30, 2019 and the condensed consolidated statements of operations, shareholders' equity and cash flows for the three months ended September 30, 2019. On February 14, 2020, the Board of Directors (the “Board”) of USA Technologies, Inc. (the “Company”), upon the recommendation of the Audit Committee of the Board (the “Audit Committee”), and following discussions with management, determined that the Company’s unaudited consolidated financial statements for the three months ended September 30, 2019 should no longer be relied upon. Background During the course of preparing its financial statements for the three months ended December 31, 2019, the Company identified certain adjustments that are required to be made to its previously filed historical financial statements. These adjustments primarily consist of the following: (i) incorrect allocation of transaction price between equipment revenues and license and transaction fees in connection with a customer contract which resulted in the inappropriate deferral of equipment revenues on hardware devices shipped during the three months ended June 30, 2019 and the three months ended September 30, 2019; and (ii) inaccurate accounting treatment of the leasing/rental contracts of its wholly-owned subsidiary, Cantaloupe Systems, Inc., relating primarily to the fiscal year ended June 30, 2019 and the three months ended September 30, 2019, which affected cost of sales, inventory and property, plant and equipment. These adjustments do not relate to the Audit Committee’s internal investigation which was substantially completed in January 2019. In addition, the Company identified other miscellaneous immaterial adjustments relating to the inaccurate accounting for: a customer rebate; certain accrued expenses; timing of hardware revenue recognition for a specific contract; timing of recognition for activation revenue; and timing of recognition for certain license and transaction fees. Restatement The financial statement adjustments are material to, and therefore require restatement of, the Company's previously reported financial statements as of and for the three months ended September 30, 2019. The tables below present the effect of the financial statement adjustments of the Company's previously reported financial statements as of and for the three months ended September 30, 2019. The effect of the restatement on the previously filed condensed consolidated balance sheet as of September 30, 2019 is as follows:
| As of September 30, 2019
($ in thousands) | As Previously Reported |  | Adjustments |  | As Restated
Assets |  |  |  |  |
Current assets: |  |  |  |  |
Cash and cash equivalents | $ | 25,540 |  |  | $ | — |  |  | $ | 25,540 |
Accounts receivable, less allowance of $4,972 | 17,120 |  |  | 1,608 |  |  | 18,728 |
Finance receivables, net | 7,216 |  |  | 229 |  |  | 7,445 |
Inventory, net | 9,344 |  |  | 125 |  |  | 9,469 |
Prepaid expenses and other current assets | 1,808 |  |  | — |  |  | 1,808 |
Total current assets | 61,028 |  |  | 1,962 |  |  | 62,990 |
Non-current assets: |  |  |  |  |
Finance receivables due after one year, net | 12,710 |  |  | (331 | ) |  | 12,379 |
Other assets | 1,811 |  |  | 204 |  |  | 2,015 |
Property and equipment, net | 7,697 |  |  | 1,425 |  |  | 9,122 |
Operating lease right-of-use assets | 6,514 |  |  | — |  |  | 6,514 |
Intangibles, net | 25,387 |  |  | — |  |  | 25,387 |
Goodwill | 64,149 |  |  | (204 | ) |  | 63,945 |
Total non-current assets | 118,268 |  |  | 1,094 |  |  | 119,362 |
Total assets | $ | 179,296 |  |  | $ | 3,056 |  |  | $ | 182,352 |
Liabilities, convertible preferred stock and shareholders’ equity |  |  |  |  |
Current liabilities: |  |  |  |  |
Accounts payable | $ | 27,453 |  |  | 1,102 |  |  | $ | 28,555 |
Accrued expenses | 29,245 |  |  | (105 | ) |  | 29,140 |
Capital lease obligations and current obligations under long-term debt | 10,826 |  |  | — |  |  | 10,826 |
Income taxes payable | 252 |  |  | — |  |  | 252 |
Deferred revenue | 2,949 |  |  | (1,300 | ) |  | 1,649 |
Total current liabilities | 70,725 |  |  | (303 | ) |  | 70,422 |
Long-term liabilities: |  |  |  |  |
Deferred income taxes | 76 |  |  | — |  |  | 76 |
Capital lease obligations and long-term debt, less current portion | 184 |  |  | — |  |  | 184 |
Operating lease liabilities, non-current | 5,327 |  |  | — |  |  | 5,327 |
Total long-term liabilities | 5,587 |  |  | — |  |  | 5,587 |
Total liabilities | $ | 76,312 |  |  | $ | (303 | ) |  | $ | 76,009 |
Commitments and contingencies |  |  |  |  |
Convertible preferred stock: |  |  |  |  |
Series A convertible preferred stock, 900,000 shares authorized, 445,063 issued and outstanding, with liquidation preference of $20,444 | 3,138 |  |  | — |  |  | 3,138 |
Shareholders’ equity: |  |  |  |  |
Preferred stock, no par value, 1,800,000 shares authorized, no shares issued | — |  |  | — |  |  | — |
Common stock, no par value, 640,000,000 shares authorized, 60,008,481 shares issued and outstanding | 377,143 |  |  | — |  |  | 377,143 |
Accumulated deficit | (277,297 | ) |  | 3,359 |  |  | (273,938 | )
Total shareholders’ equity | 99,846 |  |  | 3,359 |  |  | 103,205 |
Total liabilities, convertible preferred stock and shareholders’ equity | $ | 179,296 |  |  | $ | 3,056 |  |  | $ | 182,352 |
The effect of the restatement on the previously filed condensed consolidated statement of operations for the three months ended September 30, 2019 is as follows:
| Three months ended September 30, 2019
($ in thousands, except per share data) | As Previously Reported |  | Adjustments |  | As Restated
Revenue: |  |  |  |  |
License and transaction fees | $ | 33,833 |  |  | $ | 776 |  |  | $ | 34,609 |
Equipment sales | 8,313 |  |  | 437 |  |  | 8,750 |
Total revenue | 42,146 |  |  | 1,213 |  |  | 43,359 |
Costs of sales: |  |  |  |  |
Cost of services | 21,646 |  |  | 443 |  |  | 22,089 |
Cost of equipment | 10,448 |  |  | (594 | ) |  | 9,854 |
Total costs of sales | 32,094 |  |  | (151 | ) |  | 31,943 |
Gross profit | 10,052 |  |  | 1,364 |  |  | 11,416 |
Operating expenses: |  |  |  |  |
Selling, general and administrative | 18,171 |  |  | (64 | ) |  | 18,107 |
Investigation and restatement expenses | 3,699 |  |  | (134 | ) |  | 3,565 |
Depreciation and amortization | 1,022 |  |  | — |  |  | 1,022 |
Total operating expenses | 22,892 |  |  | (198 | ) |  | 22,694 |
Operating income (loss) | (12,840 | ) |  | 1,562 |  |  | (11,278 | )
Other income (expense): |  |  |  |  |
Interest income | 467 |  |  | (173 | ) |  | 294 |
Interest expense | (465 | ) |  | — |  |  | (465 | )
Total other income (expense), net | 2 |  |  | (173 | ) |  | (171 | )
Loss before income taxes | (12,838 | ) |  | 1,389 |  |  | (11,449 | )
Provision for income taxes | (59 | ) |  | — |  |  | (59 | )
Net loss | (12,897 | ) |  | 1,389 |  |  | (11,508 | )
Preferred dividends | (334 | ) |  | — |  |  | (334 | )
Net loss applicable to common shares | $ | (13,231 | ) |  | $ | 1,389 |  |  | $ | (11,842 | )
Net loss per common share |  |  |  |  |
Basic | $ | (0.22 | ) |  | $ | 0.02 |  |  | $ | (0.20 | )
Diluted | $ | (0.22 | ) |  | $ | 0.02 |  |  | $ | (0.20 | )
Weighted average number of common shares outstanding |  |  |  |  |
Basic | 60,096,852 |  |  | — |  |  | 60,096,852 |
Diluted | 60,096,852 |  |  | — |  |  | 60,096,852 |
The effect of the restatement on the previously filed condensed consolidated statement of cash flows for the three months ended September 30, 2019 is as follows:
| Three months ended September 30, 2019
($ in thousands) | As Previously Reported |  | Adjustments |  | As Restated
OPERATING ACTIVITIES: |  |  |  |  |
Net loss | $ | (12,897 | ) |  | $ | 1,389 |  |  | $ | (11,508 | )
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: |  |  |  |  |
Non-cash stock based compensation | 290 |  |  | — |  |  | 290 |
Gain on disposal of property and equipment | (15 | ) |  | — |  |  | (15 | )
Non-cash interest and amortization of debt discount | 338 |  |  | — |  |  | 338 |
Bad debt expense | (110 | ) |  | — |  |  | (110 | )
Provision for inventory reserve | 574 |  |  | — |  |  | 574 |
Depreciation and amortization | 1,213 |  |  | 443 |  |  | 1,656 |
Non-cash lease expense | 491 |  |  | — |  |  | 491 |
Deferred income taxes | 5 |  |  | — |  |  | 5 |
Changes in operating assets and liabilities: |  |  |  |  |
Accounts receivable | 4,677 |  |  | (1,391 | ) |  | 3,286 |
Finance receivables, net | (384 | ) |  | (70 | ) |  | (454 | )
Inventory, net | 992 |  |  | 240 |  |  | 1,232 |
Prepaid expenses and other current assets | (412 | ) |  | — |  |  | (412 | )
Accounts payable and accrued expenses | 4,459 |  |  | 831 |  |  | 5,290 |
Operating lease liabilities | (399 | ) |  | — |  |  | (399 | )
Deferred revenue | 1,409 |  |  | (1,442 | ) |  | (33 | )
Income taxes payable | (2 | ) |  | — |  |  | (2 | )
Net cash provided by operating activities | 229 |  |  | — |  |  | 229 |
INVESTING ACTIVITIES: |  |  |  |  |
Purchase of property and equipment, including rentals | (420 | ) |  | — |  |  | (420 | )
Proceeds from sale of property and equipment, including rentals | 30 |  |  | — |  |  | 30 |
Net cash used in investing activities | (390 | ) |  | — |  |  | (390 | )
FINANCING ACTIVITIES: |  |  |  |  |
Repayment of capital lease obligations and long-term debt | (1,763 | ) |  | — |  |  | (1,763 | )
Net cash used in financing activities | (1,763 | ) |  | — |  |  | (1,763 | )
Net decrease in cash and cash equivalents | (1,924 | ) |  | — |  |  | (1,924 | )
Cash and cash equivalents at beginning of year | 27,464 |  |  | — |  |  | 27,464 |
Cash and cash equivalents at end of period | $ | 25,540 |  |  | $ | — |  |  | $ | 25,540 |
Revision In addition, the Company analyzed the impact of the aforementioned adjustments on the financial statements for the interim and annual periods prior to fiscal year 2020 and concluded a correction of the errors would not be material to any individual period prior to fiscal year 2020, taking into account the requirements of ASC Topic 250, Accounting Changes and Error Corrections, ASC Topic 270 Interim Financial Reporting, ASC Topic 250-S99-1, Assessing Materiality, and ASC Topic 250-S99-2, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements. In accordance with the authoritative guidance, management evaluated the materiality of the adjustments from a quantitative and qualitative perspective. Based on such evaluation, the Company concluded that the effects of these adjustments and other accumulated misstatements were not material individually or in the aggregate to any interim or annual period prior to fiscal year 2020. However, correcting the cumulative impact of the misstatements would be material to our results of operations for the three months ended December 31, 2019 and fiscal year 2020. Accordingly, in this filing, the Company has revised the prior period interim and annual financial information for fiscal year 2019 to reflect the correction of these adjustments and other accumulated misstatements. The effect of the revision on the previously filed consolidated balance sheet as of June 30, 2019 is as follows:
| As of June 30, 2019
($ in thousands) | As Previously Reported |  | Adjustments |  | As Revised
Assets |  |  |  |  |
Current assets: |  |  |  |  |
Cash and cash equivalents | $ | 27,464 |  |  | $ | — |  |  | $ | 27,464 |
Accounts receivable, less allowance of $4,866 | 21,712 |  |  | 194 |  |  | 21,906 |
Finance receivables, net | 6,260 |  |  | 467 |  |  | 6,727 |
Inventory, net | 10,908 |  |  | 365 |  |  | 11,273 |
Prepaid expenses and other current assets | 1,558 |  |  | — |  |  | 1,558 |
Total current assets | 67,902 |  |  | 1,026 |  |  | 68,928 |
Non-current assets: |  |  |  |  |
Finance receivables due after one year, net | 11,596 |  |  | 1,046 |  |  | 12,642 |
Other assets | 2,099 |  |  | — |  |  | 2,099 |
Property and equipment, net | 9,180 |  |  | 410 |  |  | 9,590 |
Intangibles, net | 26,171 |  |  | — |  |  | 26,171 |
Goodwill | 64,149 |  |  | (204 | ) |  | 63,945 |
Total non-current assets | 113,195 |  |  | 1,252 |  |  | 114,447 |
Total assets | $ | 181,097 |  |  | $ | 2,278 |  |  | $ | 183,375 |
Liabilities, convertible preferred stock and shareholders’ equity |  |  |  |  |
Current liabilities: |  |  |  |  |
Accounts payable | $ | 27,511 |  |  | 73 |  |  | $ | 27,584 |
Accrued expenses | 23,258 |  |  | 93 |  |  | 23,351 |
Capital lease obligations and current obligations under long-term debt | 12,497 |  |  | — |  |  | 12,497 |
Income taxes payable | 254 |  |  | — |  |  | 254 |
Deferred revenue | 1,539 |  |  | 142 |  |  | 1,681 |
Total current liabilities | 65,059 |  |  | 308 |  |  | 65,367 |
Long-term liabilities: |  |  |  |  |
Deferred income taxes | 71 |  |  | — |  |  | 71 |
Capital lease obligations and long-term debt, less current portion | 276 |  |  | — |  |  | 276 |
Accrued expenses, less current portion | 100 |  |  | — |  |  | 100 |
Total long-term liabilities | 447 |  |  | — |  |  | 447 |
Total liabilities | $ | 65,506 |  |  | $ | 308 |  |  | $ | 65,814 |
Commitments and contingencies |  |  |  |  |
Convertible preferred stock: |  |  |  |  |
Series A convertible preferred stock, 900,000 shares authorized, 445,063 issued and outstanding, with liquidation preference of $20,111 | 3,138 |  |  | — |  |  | 3,138 |
Shareholders’ equity: |  |  |  |  |
Preferred stock, no par value, 1,800,000 shares authorized, no shares issued | — |  |  | — |  |  | — |
Common stock, no par value, 640,000,000 shares authorized, 60,008,481 shares issued and outstanding | 376,853 |  |  | — |  |  | 376,853 |
Accumulated deficit | (264,400 | ) |  | 1,970 |  |  | (262,430 | )
Total shareholders’ equity | 112,453 |  |  | 1,970 |  |  | 114,423 |
Total liabilities, convertible preferred stock and shareholders’ equity | $ | 181,097 |  |  | $ | 2,278 |  |  | $ | 183,375 |
The effect of the revision on the previously filed consolidated statements of operations for the three and twelve months ended June 30, 2019 is as follows:
| Three months ended June 30, 2019 |  | Year ended June 30, 2019
($ in thousands, except per share data) | As Previously Reported |  | Adjustments |  | As Revised |  | As Previously Reported |  | Adjustments |  | As Revised
Revenue: |  |  |  |  |  |  |  |  |  |  |
License and transaction fees | $ | 33,116 |  |  | $ | (127 | ) |  | $ | 32,989 |  |  | $ | 123,554 |  |  | $ | (646 | ) |  | $ | 122,908 |
Equipment sales | 5,109 |  |  | 410 |  |  | 5,519 |  |  | 20,245 |  |  | 1,313 |  |  | 21,558 |
Total revenue | 38,225 |  |  | 283 |  |  | 38,508 |  |  | 143,799 |  |  | 667 |  |  | 144,466 |
Costs of sales: |  |  |  |  |  |  |  |  |  |  |
Cost of services | 21,943 |  |  | (104 | ) |  | 21,839 |  |  | 80,485 |  |  | (505 | ) |  | 79,980 |
Cost of equipment | 7,295 |  |  | (365 | ) |  | 6,930 |  |  | 25,195 |  |  | (894 | ) |  | 24,301 |
Total costs of sales | 29,238 |  |  | (469 | ) |  | 28,769 |  |  | 105,680 |  |  | (1,399 | ) |  | 104,281 |
Gross profit | 8,987 |  |  | 752 |  |  | 9,739 |  |  | 38,119 |  |  | 2,066 |  |  | 40,185 |
Operating expenses: |  |  |  |  |  |  |  |  |  |  |
Selling, general and administrative | 15,531 |  |  | (41 | ) |  | 15,490 |  |  | 47,068 |  |  | (41 | ) |  | 47,027 |
Investigation and restatement expenses | 2,317 |  |  | 134 |  |  | 2,451 |  |  | 15,439 |  |  | 134 |  |  | 15,573 |
Integration and acquisition costs | 211 |  |  | — |  |  | 211 |  |  | 1,338 |  |  | — |  |  | 1,338 |
Depreciation and amortization | 1,071 |  |  | — |  |  | 1,071 |  |  | 4,430 |  |  | — |  |  | 4,430 |
Total operating expenses | 19,130 |  |  | 93 |  |  | 19,223 |  |  | 68,275 |  |  | 93 |  |  | 68,368 |
Operating loss | (10,143 | ) |  | 659 |  |  | (9,484 | ) |  | (30,156 | ) |  | 1,973 |  |  | (28,183 | )
Other income (expense): |  |  |  |  |  |  |  |  |  |  |
Interest income | 278 |  |  | 32 |  |  | 310 |  |  | 1,382 |  |  | 173 |  |  | 1,555 |
Interest expense | (474 | ) |  | — |  |  | (474 | ) |  | (2,992 | ) |  | — |  |  | (2,992 | )
Total other expense, net | (196 | ) |  | 32 |  |  | (164 | ) |  | (1,610 | ) |  | 173 |  |  | (1,437 | )
Loss before income taxes | (10,339 | ) |  | 691 |  |  | (9,648 | ) |  | (31,766 | ) |  | 2,146 |  |  | (29,620 | )
Provision for income taxes | (202 | ) |  | — |  |  | (202 | ) |  | (262 | ) |  | — |  |  | (262 | )
Net loss | (10,541 | ) |  | 691 |  |  | (9,850 | ) |  | (32,028 | ) |  | 2,146 |  |  | (29,882 | )
Preferred dividends | — |  |  | — |  |  | — |  |  | (668 | ) |  | — |  |  | (668 | )
Net loss applicable to common shares | $ | (10,541 | ) |  | $ | 691 |  |  | $ | (9,850 | ) |  | $ | (32,696 | ) |  | $ | 2,146 |  |  | $ | (30,550 | )
Net loss per common share |  |  |  |  |  |  |  |  |  |  |
Basic | $ | (0.18 | ) |  | $ | 0.02 |  |  | $ | (0.16 | ) |  | $ | (0.54 | ) |  | $ | 0.03 |  |  | $ | (0.51 | )
Diluted | $ | (0.18 | ) |  | $ | 0.02 |  |  | $ | (0.16 | ) |  | $ | (0.54 | ) |  | $ | 0.03 |  |  | $ | (0.51 | )
Weighted average number of common shares outstanding |  |  |  |  |  |  |  |  |  |  |
Basic | 60,065,978 |  |  | — |  |  | 60,065,978 |  |  | 60,061,243 |  |  | — |  |  | 60,061,243 |
Diluted | 60,065,978 |  |  | — |  |  | 60,065,978 |  |  | 60,061,243 |  |  | — |  |  | 60,061,243 |
The effect of the revision on the previously filed consolidated statement of cash flows for the year ended June 30, 2019 is as follows:
| Year ended June 30, 2019
($ in thousands) | As Previously Reported |  | Adjustments |  | As Revised
OPERATING ACTIVITIES: |  |  |  |  |
Net loss | $ | (32,028 | ) |  | $ | 2,146 |  |  | $ | (29,882 | )
Adjustments to reconcile net loss to net cash used in operating activities: |  |  |  |  |
Non-cash stock based compensation | 1,750 |  |  | — |  |  | 1,750 |
Loss on disposal of property and equipment | 672 |  |  | — |  |  | 672 |
Non-cash interest and amortization of debt discount | 301 |  |  | — |  |  | 301 |
Bad debt expense | 2,534 |  |  | — |  |  | 2,534 |
Provision for inventory reserve | 3,172 |  |  | — |  |  | 3,172 |
Depreciation and amortization | 8,009 |  |  | (505 | ) |  | 7,504 |
Deferred income taxes | (7 | ) |  | — |  |  | (7 | )
Changes in operating assets and liabilities: |  |  |  |  |
Accounts receivable | (8,488 | ) |  | (218 | ) |  | (8,706 | )
Finance receivables, net | (8 | ) |  | (661 | ) |  | (669 | )
Inventory, net | (5,242 | ) |  | (365 | ) |  | (5,607 | )
Prepaid expenses and other current assets | (395 | ) |  | — |  |  | (395 | )
Accounts payable and accrued expenses | 873 |  |  | 166 |  |  | 1,039 |
Deferred revenue | (98 | ) |  | (34 | ) |  | (132 | )
Income taxes payable | 254 |  |  | — |  |  | 254 |
Net cash used in operating activities | (28,701 | ) |  | 529 |  |  | (28,172 | )
INVESTING ACTIVITIES: |  |  |  |  |
Purchase of property and equipment, including rentals | (4,346 | ) |  | (529 | ) |  | (4,875 | )
Proceeds from sale of property and equipment, including rentals | 116 |  |  | — |  |  | 116 |
Net cash used in investing activities | (4,230 | ) |  | (529 | ) |  | (4,759 | )
FINANCING ACTIVITIES: |  |  |  |  |
Proceeds from exercise of common stock options | 42 |  |  | — |  |  | 42 |
Cash used for repurchase of common stock awards | (120 | ) |  | — |  |  | (120 | )
Cash used in retirement of common stock | (81 | ) |  | — |  |  | (81 | )
Payment of debt issuance costs | (156 | ) |  | — |  |  | (156 | )
Repayment of capital lease obligations and long-term debt | (23,254 | ) |  | — |  |  | (23,254 | )
Net cash used in financing activities | (23,569 | ) |  | — |  |  | (23,569 | )
Net decrease in cash and cash equivalents | (56,500 | ) |  | — |  |  | (56,500 | )
Cash and cash equivalents at beginning of year | 83,964 |  |  | — |  |  | 83,964 |
Cash and cash equivalents at end of year | $ | 27,464 |  |  | $ | — |  |  | $ | 27,464 |
The effect of the revision on the previously filed condensed consolidated balance sheet as of March 31, 2019 is as follows:
| As of March 31, 2019
($ in thousands) | As Previously Reported |  | Adjustments |  | As Revised
Assets |  |  |  |  |
Current assets: |  |  |  |  |
Cash and cash equivalents | $ | 32,788 |  |  | $ | — |  |  | $ | 32,788 |
Accounts receivable, less allowance of $3,714 | 20,492 |  |  | (19 | ) |  | 20,473 |
Finance receivables, net | 6,119 |  |  | 422 |  |  | 6,541 |
Inventory, net | 11,488 |  |  | — |  |  | 11,488 |
Prepaid expenses and other current assets | 2,878 |  |  | — |  |  | 2,878 |
Total current assets | 73,765 |  |  | 403 |  |  | 74,168 |
Non-current assets: |  |  |  |  |
Finance receivables due after one year, net | 11,362 |  |  | 980 |  |  | 12,342 |
Other assets | 1,922 |  |  | — |  |  | 1,922 |
Property and equipment, net | 9,116 |  |  | 306 |  |  | 9,422 |
Intangibles, net | 26,956 |  |  | — |  |  | 26,956 |
Goodwill | 64,149 |  |  | (204 | ) |  | 63,945 |
Total non-current assets | 113,505 |  |  | 1,082 |  |  | 114,587 |
Total assets | $ | 187,270 |  |  | $ | 1,485 |  |  | $ | 188,755 |
Liabilities, convertible preferred stock and shareholders’ equity |  |  |  |  |
Current liabilities: |  |  |  |  |
Accounts payable | $ | 26,058 |  |  | 30 |  |  | $ | 26,088 |
Accrued expenses | 19,974 |  |  | — |  |  | 19,974 |
Capital lease obligations and current obligations under long-term debt | 13,202 |  |  | — |  |  | 13,202 |
Income taxes payable | 42 |  |  | — |  |  | 42 |
Deferred revenue | 1,322 |  |  | 176 |  |  | 1,498 |
Total current liabilities | 60,598 |  |  | 206 |  |  | 60,804 |
Long-term liabilities: |  |  |  |  |
Deferred income taxes | 81 |  |  | — |  |  | 81 |
Capital lease obligations and long-term debt, less current portion | 512 |  |  | — |  |  | 512 |
Accrued expenses, less current portion | 100 |  |  | — |  |  | 100 |
Total long-term liabilities | 693 |  |  | — |  |  | 693 |
Total liabilities | $ | 61,291 |  |  | $ | 206 |  |  | $ | 61,497 |
Commitments and contingencies |  |  |  |  |
Convertible preferred stock: |  |  |  |  |
Series A convertible preferred stock, 900,000 shares authorized, 445,063 issued and outstanding, with liquidation preference of $20,111 | 3,138 |  |  | — |  |  | 3,138 |
Shareholders’ equity: |  |  |  |  |
Preferred stock, no par value, 1,800,000 shares authorized, no shares issued | — |  |  | — |  |  | — |
Common stock, no par value, 640,000,000 shares authorized, 60,019,438 shares issued and outstanding | 376,700 |  |  | — |  |  | 376,700 |
Accumulated deficit | (253,859 | ) |  | 1,279 |  |  | (252,580 | )
Total shareholders’ equity | 122,841 |  |  | 1,279 |  |  | 124,120 |
Total liabilities, convertible preferred stock and shareholders’ equity | $ | 187,270 |  |  | $ | 1,485 |  |  | $ | 188,755 |
The effect of the revision on the previously filed condensed consolidated statements of operations for the three and nine months ended March 31, 2019 is as follows:
| Three months ended March 31, 2019 |  | Nine months ended March 31, 2019
($ in thousands, except per share data) | As Previously Reported |  | Adjustments |  | As Revised |  | As Previously Reported |  | Adjustments |  | As Revised
Revenue: |  |  |  |  |  |  |  |  |  |  |
License and transaction fees | $ | 31,630 |  |  | $ | (115 | ) |  | $ | 31,515 |  |  | $ | 90,438 |  |  | $ | (519 | ) |  | $ | 89,919 |
Equipment sales | 6,016 |  |  | 173 |  |  | 6,189 |  |  | 15,136 |  |  | 903 |  |  | 16,039 |
Total revenue | 37,646 |  |  | 58 |  |  | 37,704 |  |  | 105,574 |  |  | 384 |  |  | 105,958 |
Costs of sales: |  |  |  |  |  |  |  |  |  |  |
Cost of services | 20,423 |  |  | (116 | ) |  | 20,307 |  |  | 58,542 |  |  | (401 | ) |  | 58,141 |
Cost of equipment | 7,444 |  |  | — |  |  | 7,444 |  |  | 17,900 |  |  | (529 | ) |  | 17,371 |
Total costs of sales | 27,867 |  |  | (116 | ) |  | 27,751 |  |  | 76,442 |  |  | (930 | ) |  | 75,512 |
Gross profit | 9,779 |  |  | 174 |  |  | 9,953 |  |  | 29,132 |  |  | 1,314 |  |  | 30,446 |
Operating expenses: |  |  |  |  |  |  |  |  |  |  |
Selling, general and administrative | 11,156 |  |  | — |  |  | 11,156 |  |  | 31,537 |  |  | — |  |  | 31,537 |
Investigation and restatement expenses | 1,408 |  |  | — |  |  | 1,408 |  |  | 13,122 |  |  | — |  |  | 13,122 |
Integration and acquisition costs | 24 |  |  | — |  |  | 24 |  |  | 1,127 |  |  | — |  |  | 1,127 |
Depreciation and amortization | 1,083 |  |  | — |  |  | 1,083 |  |  | 3,359 |  |  | — |  |  | 3,359 |
Total operating expenses | 13,671 |  |  | — |  |  | 13,671 |  |  | 49,145 |  |  | — |  |  | 49,145 |
Operating loss | (3,892 | ) |  | 174 |  |  | (3,718 | ) |  | (20,013 | ) |  | 1,314 |  |  | (18,699 | )
Other income (expense): |  |  |  |  |  |  |  |  |  |  |
Interest income | 318 |  |  | 30 |  |  | 348 |  |  | 1,104 |  |  | 141 |  |  | 1,245 |
Interest expense | (913 | ) |  | — |  |  | (913 | ) |  | (2,518 | ) |  | — |  |  | (2,518 | )
Total other expense, net | (595 | ) |  | 30 |  |  | (565 | ) |  | (1,414 | ) |  | 141 |  |  | (1,273 | )
Loss before income taxes | (4,487 | ) |  | 204 |  |  | (4,283 | ) |  | (21,427 | ) |  | 1,455 |  |  | (19,972 | )
(Provision) benefit for income taxes | (23 | ) |  | — |  |  | (23 | ) |  | (60 | ) |  | — |  |  | (60 | )
Net loss | (4,510 | ) |  | 204 |  |  | (4,306 | ) |  | (21,487 | ) |  | 1,455 |  |  | (20,032 | )
Preferred dividends | (334 | ) |  | — |  |  | (334 | ) |  | (668 | ) |  | — |  |  | (668 | )
Net loss applicable to common shares | $ | (4,844 | ) |  | $ | 204 |  |  | $ | (4,640 | ) |  | $ | (22,155 | ) |  | $ | 1,455 |  |  | $ | (20,700 | )
Net loss per common share |  |  |  |  |  |  |  |  |  |  |
Basic | $ | (0.08 | ) |  | $ | — |  |  | $ | (0.08 | ) |  | $ | (0.37 | ) |  | $ | 0.03 |  |  | $ | (0.34 | )
Diluted | $ | (0.08 | ) |  | $ | — |  |  | $ | (0.08 | ) |  | $ | (0.37 | ) |  | $ | 0.03 |  |  | $ | (0.34 | )
Weighted average number of common shares outstanding |  |  |  |  |  |  |  |  |  |  |
Basic | 60,065,053 |  |  | — |  |  | 60,065,053 |  |  | 60,059,594 |  |  | — |  |  | 60,059,594 |
Diluted | 60,065,053 |  |  | — |  |  | 60,065,053 |  |  | 60,059,594 |  |  | — |  |  | 60,059,594 |
The effect of the revision on the previously filed condensed consolidated statement of cash flows for the nine months ended March 31, 2019 is as follows:
| Nine months ended March 31, 2019
($ in thousands) | As Previously Reported |  | Adjustments |  | As Revised
OPERATING ACTIVITIES: |  |  |  |  |
Net loss | $ | (21,487 | ) |  | $ | 1,455 |  |  | $ | (20,032 | )
Adjustments to reconcile net loss to net cash used in operating activities: |  |  |  |  |
Non-cash stock based compensation | 1,393 |  |  | — |  |  | 1,393 |
Gain on disposal of property and equipment | (39 | ) |  | — |  |  | (39 | )
Non-cash interest and amortization of debt discount | 286 |  |  | — |  |  | 286 |
Bad debt expense | 1,537 |  |  | — |  |  | 1,537 |
Provision for inventory reserve | 2,699 |  |  | — |  |  | 2,699 |
Depreciation and amortization | 6,300 |  |  | (401 | ) |  | 5,899 |
Deferred income taxes | 14 |  |  | — |  |  | 14 |
Changes in operating assets and liabilities: |  |  |  |  |
Accounts receivable | (6,283 | ) |  | (5 | ) |  | (6,288 | )
Finance receivables, net | 368 |  |  | (550 | ) |  | (182 | )
Inventory, net | (5,349 | ) |  | — |  |  | (5,349 | )
Prepaid expenses and other current assets | (1,545 | ) |  | — |  |  | (1,545 | )
Accounts payable and accrued expenses | (3,866 | ) |  | 30 |  |  | (3,836 | )
Deferred revenue | (316 | ) |  | — |  |  | (316 | )
Income taxes payable | 42 |  |  | — |  |  | 42 |
Net cash used in operating activities | (26,246 | ) |  | 529 |  |  | (25,717 | )
INVESTING ACTIVITIES: |  |  |  |  |
Purchase of property and equipment, including rentals | (2,627 | ) |  | (529 | ) |  | (3,156 | )
Proceeds from sale of property and equipment, including rentals | 103 |  |  | — |  |  | 103 |
Net cash used in investing activities | (2,524 | ) |  | (529 | ) |  | (3,053 | )
FINANCING ACTIVITIES: |  |  |  |  |
Proceeds from exercise of common stock options | 42 |  |  | — |  |  | 42 |
Payment of debt issuance costs | (135 | ) |  | — |  |  | (135 | )
Repayment of capital lease obligations and long-term debt | (22,313 | ) |  | — |  |  | (22,313 | )
Net cash used in financing activities | (22,406 | ) |  | — |  |  | (22,406 | )
Net decrease in cash and cash equivalents | (51,176 | ) |  | — |  |  | (51,176 | )
Cash and cash equivalents at beginning of year | 83,964 |  |  | — |  |  | 83,964 |
Cash and cash equivalents at end of period | $ | 32,788 |  |  | $ | — |  |  | $ | 32,788 |
The effect of the revision on the previously filed condensed consolidated balance sheet as of December 31, 2018 is as follows:
| As of December 31, 2018
($ in thousands) | As Previously Reported |  | Adjustments |  | As Revised
Assets |  |  |  |  |
Current assets: |  |  |  |  |
Cash and cash equivalents | $ | 63,193 |  |  | $ | — |  |  | $ | 63,193 |
Accounts receivable, less allowance of $3,385 | 10,132 |  |  | (44 | ) |  | 10,088 |
Finance receivables, net | 5,591 |  |  | 381 |  |  | 5,972 |
Inventory, net | 7,343 |  |  | — |  |  | 7,343 |
Prepaid expenses and other current assets | 2,871 |  |  | — |  |  | 2,871 |
Total current assets | 89,130 |  |  | 337 |  |  | 89,467 |
Non-current assets: |  |  |  |  |
Finance receivables due after one year, net | 11,910 |  |  | 928 |  |  | 12,838 |
Other assets | 1,903 |  |  | — |  |  | 1,903 |
Property and equipment, net | 9,546 |  |  | 190 |  |  | 9,736 |
Intangibles, net | 27,740 |  |  | — |  |  | 27,740 |
Goodwill | 64,149 |  |  | (204 | ) |  | 63,945 |
Total non-current assets | 115,248 |  |  | 914 |  |  | 116,162 |
Total assets | $ | 204,378 |  |  | $ | 1,251 |  |  | $ | 205,629 |
Liabilities, convertible preferred stock and shareholders’ equity |  |  |  |  |
Current liabilities: |  |  |  |  |
Accounts payable | $ | 17,570 |  |  | — |  |  | $ | 17,570 |
Accrued expenses | 21,150 |  |  | — |  |  | 21,150 |
Capital lease obligations and current obligations under long-term debt | 33,235 |  |  | — |  |  | 33,235 |
Income taxes payable | 25 |  |  | — |  |  | 25 |
Deferred revenue | 1,437 |  |  | 176 |  |  | 1,613 |
Total current liabilities | 73,417 |  |  | 176 |  |  | 73,593 |
Long-term liabilities: |  |  |  |  |
Deferred income taxes | 76 |  |  | — |  |  | 76 |
Capital lease obligations and long-term debt, less current portion | 632 |  |  | — |  |  | 632 |
Accrued expenses, less current portion | 101 |  |  | — |  |  | 101 |
Total long-term liabilities | 809 |  |  | — |  |  | 809 |
Total liabilities | $ | 74,226 |  |  | $ | 176 |  |  | $ | 74,402 |
Commitments and contingencies |  |  |  |  |
Convertible preferred stock: |  |  |  |  |
Series A convertible preferred stock, 900,000 shares authorized, 445,063 issued and outstanding, with liquidation preference of $19,777 | 3,138 |  |  | — |  |  | 3,138 |
Shareholders’ equity: |  |  |  |  |
Preferred stock, no par value, 1,800,000 shares authorized, no shares issued | — |  |  | — |  |  | — |
Common stock, no par value, 640,000,000 shares authorized, 60,013,718 shares issued and outstanding | 376,363 |  |  | — |  |  | 376,363 |
Accumulated deficit | (249,349 | ) |  | 1,075 |  |  | (248,274 | )
Total shareholders’ equity | 127,014 |  |  | 1,075 |  |  | 128,089 |
Total liabilities, convertible preferred stock and shareholders’ equity | $ | 204,378 |  |  | $ | 1,251 |  |  | $ | 205,629 |
The effect of the revision on the previously filed condensed consolidated statements of operations for the three and six months ended December 31, 2018 is as follows:
| Three months ended December 31, 2018 |  | Six months ended December 31, 2018
($ in thousands, except per share data) | As Previously Reported |  | Adjustments |  | As Revised |  | As Previously Reported |  | Adjustments |  | As Revised
Revenue: |  |  |  |  |  |  |  |  |  |  |
License and transaction fees | $ | 29,837 |  |  | $ | (104 | ) |  | $ | 29,733 |  |  | $ | 58,808 |  |  | $ | (404 | ) |  | $ | 58,404 |
Equipment sales | 4,569 |  |  | 184 |  |  | 4,753 |  |  | 9,120 |  |  | 730 |  |  | 9,850 |
Total revenue | 34,406 |  |  | 80 |  |  | 34,486 |  |  | 67,928 |  |  | 326 |  |  | 68,254 |
Costs of sales: |  |  |  |  |  |  |  |  |  |  |
Cost of services | 19,575 |  |  | (113 | ) |  | 19,462 |  |  | 38,119 |  |  | (285 | ) |  | 37,834 |
Cost of equipment | 5,588 |  |  | 1 |  |  | 5,589 |  |  | 10,456 |  |  | (529 | ) |  | 9,927 |
Total costs of sales | 25,163 |  |  | (112 | ) |  | 25,051 |  |  | 48,575 |  |  | (814 | ) |  | 47,761 |
Gross profit | 9,243 |  |  | 192 |  |  | 9,435 |  |  | 19,353 |  |  | 1,140 |  |  | 20,493 |
Operating expenses: |  |  |  |  |  |  |  |  |  |  |
Selling, general and administrative | 10,931 |  |  | — |  |  | 10,931 |  |  | 20,381 |  |  | — |  |  | 20,381 |
Investigation and restatement expenses | 7,188 |  |  | — |  |  | 7,188 |  |  | 11,714 |  |  | — |  |  | 11,714 |
Integration and acquisition costs | 181 |  |  | — |  |  | 181 |  |  | 1,103 |  |  | — |  |  | 1,103 |
Depreciation and amortization | 1,143 |  |  | — |  |  | 1,143 |  |  | 2,276 |  |  | — |  |  | 2,276 |
Total operating expenses | 19,443 |  |  | — |  |  | 19,443 |  |  | 35,474 |  |  | — |  |  | 35,474 |
Operating loss | (10,200 | ) |  | 192 |  |  | (10,008 | ) |  | (16,121 | ) |  | 1,140 |  |  | (14,981 | )
Other income (expense): |  |  |  |  |  |  |  |  |  |  |
Interest income | 381 |  |  | 27 |  |  | 408 |  |  | 786 |  |  | 111 |  |  | 897 |
Interest expense | (819 | ) |  | — |  |  | (819 | ) |  | (1,605 | ) |  | — |  |  | (1,605 | )
Total other expense, net | (438 | ) |  | 27 |  |  | (411 | ) |  | (819 | ) |  | 111 |  |  | (708 | )
Loss before income taxes | (10,638 | ) |  | 219 |  |  | (10,419 | ) |  | (16,940 | ) |  | 1,251 |  |  | (15,689 | )
(Provision) benefit for income taxes | (19 | ) |  | — |  |  | (19 | ) |  | (37 | ) |  | — |  |  | (37 | )
Net loss | (10,657 | ) |  | 219 |  |  | (10,438 | ) |  | (16,977 | ) |  | 1,251 |  |  | (15,726 | )
Preferred dividends | — |  |  | — |  |  | — |  |  | (334 | ) |  | — |  |  | (334 | )
Net loss applicable to common shares | $ | (10,657 | ) |  | $ | 219 |  |  | $ | (10,438 | ) |  | $ | (17,311 | ) |  | $ | 1,251 |  |  | $ | (16,060 | )
Net loss per common share |  |  |  |  |  |  |  |  |  |  |
Basic | $ | (0.18 | ) |  | $ | 0.01 |  |  | $ | (0.17 | ) |  | $ | (0.29 | ) |  | $ | 0.02 |  |  | $ | (0.27 | )
Diluted | $ | (0.18 | ) |  | $ | 0.01 |  |  | $ | (0.17 | ) |  | $ | (0.29 | ) |  | $ | 0.02 |  |  | $ | (0.27 | )
Weighted average number of common shares outstanding |  |  |  |  |  |  |  |  |  |  |
Basic | 60,059,936 |  |  | — |  |  | 60,059,936 |  |  | 60,056,924 |  |  | — |  |  | 60,056,924 |
Diluted | 60,059,936 |  |  | — |  |  | 60,059,936 |  |  | 60,056,924 |  |  | — |  |  | 60,056,924 |
The effect of the revision on the previously filed condensed consolidated statement of cash flows for the six months ended December 31, 2018 is as follows:
| Six months ended December 31, 2018
($ in thousands) | As Previously Reported |  | Adjustments |  | As Revised
OPERATING ACTIVITIES: |  |  |  |  |
Net loss | $ | (16,977 | ) |  | $ | 1,251 |  |  | $ | (15,726 | )
Adjustments to reconcile net loss to net cash used in operating activities: |  |  |  |  |
Non-cash stock based compensation | 972 |  |  | — |  |  | 972 |
Gain on disposal of property and equipment | (29 | ) |  | — |  |  | (29 | )
Non-cash interest and amortization of debt discount | 45 |  |  | — |  |  | 45 |
Bad debt expense | 1,308 |  |  | — |  |  | 1,308 |
Provision for inventory reserve | 1,211 |  |  | — |  |  | 1,211 |
Depreciation and amortization | 4,257 |  |  | (285 | ) |  | 3,972 |
Deferred income taxes | 9 |  |  | — |  |  | 9 |
Changes in operating assets and liabilities: |  |  |  |  |
Accounts receivable | 4,312 |  |  | 20 |  |  | 4,332 |
Finance receivables, net | 348 |  |  | (457 | ) |  | (109 | )
Inventory, net | 284 |  |  | — |  |  | 284 |
Prepaid expenses and other current assets | (1,588 | ) |  | — |  |  | (1,588 | )
Accounts payable and accrued expenses | (11,095 | ) |  | — |  |  | (11,095 | )
Deferred revenue | (201 | ) |  | — |  |  | (201 | )
Income taxes payable | 25 |  |  | — |  |  | 25 |
Net cash used in operating activities | (17,119 | ) |  | 529 |  |  | (16,590 | )
INVESTING ACTIVITIES: |  |  |  |  |
Purchase of property and equipment, including rentals | (1,795 | ) |  | (529 | ) |  | (2,324 | )
Proceeds from sale of property and equipment, including rentals | 82 |  |  | — |  |  | 82 |
Net cash used in investing activities | (1,713 | ) |  | (529 | ) |  | (2,242 | )
FINANCING ACTIVITIES: |  |  |  |  |
Proceeds from exercise of common stock options | 42 |  |  | — |  |  | 42 |
Payment of debt issuance costs | (53 | ) |  | — |  |  | (53 | )
Repayment of capital lease obligations and long-term debt | (1,928 | ) |  | — |  |  | (1,928 | )
Net cash used in financing activities | (1,939 | ) |  | — |  |  | (1,939 | )
Net decrease in cash and cash equivalents | (20,771 | ) |  | — |  |  | (20,771 | )
Cash and cash equivalents at beginning of year | 83,964 |  |  | — |  |  | 83,964 |
Cash and cash equivalents at end of period | $ | 63,193 |  |  | $ | — |  |  | $ | 63,193 |
The effect of the revision on the previously filed condensed consolidated balance sheet as of September 30, 2018 is as follows:
| As of September 30, 2018
($ in thousands) | As Previously Reported |  | Adjustments |  | As Revised
Assets |  |  |  |  |
Current assets: |  |  |  |  |
Cash and cash equivalents | $ | 68,262 |  |  | $ | — |  |  | $ | 68,262 |
Accounts receivable, less allowance of $3,125 | 18,921 |  |  | (39 | ) |  | 18,882 |
Finance receivables, net | 5,141 |  |  | 339 |  |  | 5,480 |
Inventory, net | 6,915 |  |  | — |  |  | 6,915 |
Prepaid expenses and other current assets | 1,463 |  |  | — |  |  | 1,463 |
Total current assets | 100,702 |  |  | 300 |  |  | 101,002 |
Non-current assets: |  |  |  |  |
Finance receivables due after one year, net | 12,770 |  |  | 859 |  |  | 13,629 |
Other assets | 1,900 |  |  | — |  |  | 1,900 |
Property and equipment, net | 9,778 |  |  | 77 |  |  | 9,855 |
Intangibles, net | 28,533 |  |  | — |  |  | 28,533 |
Goodwill | 64,149 |  |  | (204 | ) |  | 63,945 |
Total non-current assets | 117,130 |  |  | 732 |  |  | 117,862 |
Total assets | $ | 217,832 |  |  | $ | 1,032 |  |  | $ | 218,864 |
Liabilities, convertible preferred stock and shareholders’ equity |  |  |  |  |
Current liabilities: |  |  |  |  |
Accounts payable | $ | 19,335 |  |  | — |  |  | $ | 19,335 |
Accrued expenses | 21,848 |  |  | — |  |  | 21,848 |
Capital lease obligations and current obligations under long-term debt | 33,889 |  |  | — |  |  | 33,889 |
Income taxes payable | 11 |  |  | — |  |  | 11 |
Deferred revenue | 1,428 |  |  | 176 |  |  | 1,604 |
Total current liabilities | 76,511 |  |  | 176 |  |  | 76,687 |
Long-term liabilities: |  |  |  |  |
Deferred income taxes | 71 |  |  | — |  |  | 71 |
Capital lease obligations and long-term debt, less current portion | 932 |  |  | — |  |  | 932 |
Accrued expenses, less current portion | 66 |  |  | — |  |  | 66 |
Total long-term liabilities | 1,069 |  |  | — |  |  | 1,069 |
Total liabilities | $ | 77,580 |  |  | $ | 176 |  |  | $ | 77,756 |
Commitments and contingencies |  |  |  |  |
Convertible preferred stock: |  |  |  |  |
Series A convertible preferred stock, 900,000 shares authorized, 445,063 issued and outstanding, with liquidation preference of $19,777 | 3,138 |  |  | — |  |  | 3,138 |
Shareholders’ equity: |  |  |  |  |
Preferred stock, no par value, 1,800,000 shares authorized, no shares issued | — |  |  | — |  |  | — |
Common stock, no par value, 640,000,000 shares authorized, 60,012,155 shares issued and outstanding | 375,806 |  |  | — |  |  | 375,806 |
Accumulated deficit | (238,692 | ) |  | 856 |  |  | (237,836 | )
Total shareholders’ equity | 137,114 |  |  | 856 |  |  | 137,970 |
Total liabilities, convertible preferred stock and shareholders’ equity | $ | 217,832 |  |  | $ | 1,032 |  |  | $ | 218,864 |
The effect of the revision on the previously filed condensed consolidated statement of operations for the three months ended September 30, 2018 is as follows:
| Three months ended September 30, 2018
($ in thousands, except per share data) | As Previously Reported |  | Adjustments |  | As Revised
Revenue: |  |  |  |  |
License and transaction fees | $ | 28,971 |  |  | $ | (300 | ) |  | $ | 28,671 |
Equipment sales | 4,551 |  |  | 546 |  |  | 5,097 |
Total revenue | 33,522 |  |  | 246 |  |  | 33,768 |
Costs of sales: |  |  |  |  |
Cost of services | 18,544 |  |  | (172 | ) |  | 18,372 |
Cost of equipment | 4,868 |  |  | (530 | ) |  | 4,338 |
Total costs of sales | 23,412 |  |  | (702 | ) |  | 22,710 |
Gross profit | 10,110 |  |  | 948 |  |  | 11,058 |
Operating expenses: |  |  |  |  |
Selling, general and administrative | 9,450 |  |  | — |  |  | 9,450 |
Investigation and restatement expenses | 4,526 |  |  | — |  |  | 4,526 |
Integration and acquisition costs | 922 |  |  | — |  |  | 922 |
Depreciation and amortization | 1,133 |  |  | — |  |  | 1,133 |
Total operating expenses | 16,031 |  |  | — |  |  | 16,031 |
Operating income (loss) | (5,921 | ) |  | 948 |  |  | (4,973 | )
Other income (expense): |  |  |  |  |
Interest income | 405 |  |  | 84 |  |  | 489 |
Interest expense | (786 | ) |  | — |  |  | (786 | )
Total other income (expense), net | (381 | ) |  | 84 |  |  | (297 | )
Loss before income taxes | (6,302 | ) |  | 1,032 |  |  | (5,270 | )
Provision for income taxes | (18 | ) |  | — |  |  | (18 | )
Net loss | (6,320 | ) |  | 1,032 |  |  | (5,288 | )
Preferred dividends | (334 | ) |  | — |  |  | (334 | )
Net loss applicable to common shares | $ | (6,654 | ) |  | $ | 1,032 |  |  | $ | (5,622 | )
Net loss per common share |  |  |  |  |
Basic | $ | (0.11 | ) |  | $ | 0.02 |  |  | $ | (0.09 | )
Diluted | $ | (0.11 | ) |  | $ | 0.02 |  |  | $ | (0.09 | )
Weighted average number of common shares outstanding |  |  |  |  |
Basic | 60,053,912 |  |  | — |  |  | 60,053,912 |
Diluted | 60,053,912 |  |  | — |  |  | 60,053,912 |
The effect of the revision on the previously filed condensed consolidated statement of cash flows for the three months ended September 30, 2018 is as follows:
| Three months ended September 30, 2018
($ in thousands) | As Previously Reported |  | Adjustments |  | As Revised
OPERATING ACTIVITIES: |  |  |  |  |
Net loss | $ | (6,320 | ) |  | $ | 1,032 |  |  | $ | (5,288 | )
Adjustments to reconcile net loss to net cash used in operating activities: |  |  |  |  |
Non-cash stock based compensation | 415 |  |  | — |  |  | 415 |
Loss on disposal of property and equipment | 7 |  |  | — |  |  | 7 |
Non-cash interest and amortization of debt discount | 22 |  |  | — |  |  | 22 |
Bad debt expense | 509 |  |  | — |  |  | 509 |
Provision for inventory reserve | 212 |  |  | — |  |  | 212 |
Depreciation and amortization | 2,147 |  |  | (172 | ) |  | 1,975 |
Deferred income taxes | 4 |  |  | — |  |  | 4 |
Changes in operating assets and liabilities: |  |  |  |  |
Accounts receivable | (3,678 | ) |  | 15 |  |  | (3,663 | )
Finance receivables, net | (63 | ) |  | (346 | ) |  | (409 | )
Inventory, net | 1,707 |  |  | — |  |  | 1,707 |
Prepaid expenses and other current assets | (220 | ) |  | — |  |  | (220 | )
Accounts payable and accrued expenses | (8,665 | ) |  | — |  |  | (8,665 | )
Deferred revenue | (210 | ) |  | — |  |  | (210 | )
Income taxes payable | 11 |  |  | — |  |  | 11 |
Net cash used in operating activities | (14,122 | ) |  | 529 |  |  | (13,593 | )
INVESTING ACTIVITIES: |  |  |  |  |
Purchase of property and equipment, including rentals | (693 | ) |  | (529 | ) |  | (1,222 | )
Proceeds from sale of property and equipment, including rentals | 30 |  |  | — |  |  | 30 |
Net cash used in investing activities | (663 | ) |  | (529 | ) |  | (1,192 | )
FINANCING ACTIVITIES: |  |  |  |  |
Proceeds from exercise of common stock options | 42 |  |  | — |  |  | 42 |
Repayment of capital lease obligations and long-term debt | (959 | ) |  | — |  |  | (959 | )
Net cash used in financing activities | (917 | ) |  | — |  |  | (917 | )
Net decrease in cash and cash equivalents | (15,702 | ) |  | — |  |  | (15,702 | )
Cash and cash equivalents at beginning of year | 83,964 |  |  | — |  |  | 83,964 |
Cash and cash equivalents at end of period | $ | 68,262 |  |  | $ | — |  |  | $ | 68,262 |

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- References No definition available. + Details
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- Definition The entire disclosure for reporting accounting changes and error corrections. It includes the conveyance of information necessary for a user of the Company's financial information to understand all aspects and required disclosure information concerning all changes and error corrections reported in the Company's financial statements for the period. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 250 -URI http://asc.fasb.org/topic&trid=2122394 + Details
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