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v3.20.2

Revision | 9 Months Ended
--- | ---
Jun. 30, 2020
Prior Period Adjustment [Abstract] |
Revision | 17. Revision Prior to the issuance of the Company’s consolidated financial statements for the third quarter ended June 30, 2020, the Company concluded that its previously issued consolidated financial statements for the first quarter ended December 31, 2019 and second quarter ended March 31, 2020 contained accounting errors with respect to the application of ASC 842 (Leases) and the reserve against an operating lease receivable. In the first quarter ended December 31, 2019, the Company determined the collection of future operating lease revenue from a customer was less than probable and ceased recognizing additional rental revenue while the existing operating lease receivable was deemed by the Company to be collectible. In the second quarter ended March 31, 2020, the Company recorded a reserve against the operating lease receivable to bad debt expense due to a subsequent determination that collection of the receivable had become less than probable. In accordance with the guidance of ASC 842, when collectability of the rental payments is not deemed probable then lease revenue is limited to cash received with an off-setting adjustment through rental revenue for any existing operating lease receivables and recording a reserve against operating lease receivables as an increase to bad debt expense is not permitted. As such, the outstanding operating lease receivable should have been reversed against rental revenue in the first quarter ended December 31, 2019 rather than recognized as bad debt expense in the second quarter ended March 31, 2020. The Company has revised its unaudited consolidated balance sheet at December 31, 2019, its unaudited statements of operations for the three months ended December 31, 2019, and its unaudited statements of operations for the three and six months ended March 31, 2020 to correct the identified errors. The Company concluded that these financial statements should be revised because of the accounting errors with respect to its application of ASC 842. The revision had no net impact on cash flows from operating activities for the three months ended December 31, 2019 and for the three and six months ended March 31, 2020. The impact of the correction of the errors on our unaudited consolidated balance sheet at December 31, 2019 was as follows (in thousands):
|  | As of December 31, 2019 |
|  | As Reported |  |  | Adjustment |  |  | Revised |
Current assets: |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 10,141 |  |  | $ | — |  |  | $ | 10,141 |
Trade accounts and financing receivables, net |  |  | 35,198 |  |  |  | (7,993 | ) |  |  | 27,205 |
Inventories |  |  | 23,907 |  |  |  | — |  |  |  | 23,907 |
Property held for sale |  |  | 691 |  |  |  | — |  |  |  | 691 |
Prepaid expenses and other current assets |  |  | 1,971 |  |  |  | — |  |  |  | 1,971 |
Total current assets |  |  | 71,908 |  |  |  | (7,993 | ) |  |  | 63,915 |
Non-current inventories |  |  | 19,223 |  |  |  | — |  |  |  | 19,223 |
Rental equipment, net |  |  | 66,985 |  |  |  | — |  |  |  | 66,985 |
Property, plant and equipment, net |  |  | 31,615 |  |  |  | — |  |  |  | 31,615 |
Goodwill |  |  | 5,008 |  |  |  | — |  |  |  | 5,008 |
Other intangible assets, net |  |  | 9,630 |  |  |  | — |  |  |  | 9,630 |
Deferred cost of revenue and other assets |  |  | 807 |  |  |  | — |  |  |  | 807 |
Total assets |  | $ | 205,176 |  |  |  | (7,993 | ) |  | $ | 197,183 |
Total liabilities |  | $ | 26,461 |  |  | $ | — |  |  | $ | 26,461 |
Stockholders’ equity: |  |  |  |  |  |  |  |  |  |  |  |
Preferred stock |  |  | — |  |  |  | — |  |  |  | — |
Common stock |  |  | 137 |  |  |  | — |  |  |  | 137 |
Additional paid-in capital |  |  | 89,250 |  |  |  | — |  |  |  | 89,250 |
Retained earnings |  |  | 104,519 |  |  |  | (7,993 | ) |  |  | 96,526 |
Accumulated other comprehensive loss |  |  | (15,191 | ) |  |  | — |  |  |  | (15,191 | )
Total stockholders’ equity |  |  | 178,715 |  |  |  | (7,993 | ) |  |  | 170,722 |
Total liabilities and stockholders’ equity |  | $ | 205,176 |  |  | $ | (7,993 | ) |  | $ | 197,183 |
The impact of the correction of the error on our unaudited consolidated statement of operations for the three months ended December 31, 2019 was as follows (in thousands):
|  | Three Months Ended December 31, 2019 |
|  | As Reported |  |  | Adjustment |  |  | Revised |
Revenue: |  |  |  |  |  |  |  |  |  |  |  |
Products |  | $ | 9,083 |  |  | $ | — |  |  | $ | 9,083 |
Rental |  |  | 16,615 |  |  |  | (7,993 | ) |  |  | 8,622 |
Total revenue |  |  | 25,698 |  |  |  | (7,993 | ) |  |  | 17,705 |
Cost of revenue |  |  | 15,208 |  |  |  | — |  |  |  | 15,208 |
Gross profit |  |  | 10,490 |  |  |  | (7,993 | ) |  |  | 2,497 |
Total operating expenses |  |  | 10,320 |  |  |  | — |  |  |  | 10,320 |
Income (loss) from operations |  |  | 170 |  |  |  | (7,993 | ) |  |  | (7,823 | )
Other income (expense), net |  |  | (39 | ) |  |  | — |  |  |  | (39 | )
Income (loss) before income taxes |  |  | 131 |  |  |  | (7,993 | ) |  |  | (7,862 | )
Income tax expense |  |  | 1,420 |  |  |  | — |  |  |  | 1,420 |
Net loss |  | $ | (1,289 | ) |  | $ | (7,993 | ) |  | $ | (9,282 | )
Loss per common share: |  |  |  |  |  |  |  |  |  |  |  |
Basic |  | $ | (0.10 | ) |  | $ | (0.59 | ) |  | $ | (0.69 | )
Diluted |  | $ | (0.10 | ) |  | $ | (0.59 | ) |  | $ | (0.69 | )
The impact of the correction of the error on our unaudited consolidated statements of operations for the three and six months ended March 31, 2020 was as follows (in thousands):
|  | Three Months Ended March 31, 2020 |  |  | Six Months Ended March 31, 2020 |
|  | As Reported |  |  | Adjustment |  |  | Revised |  |  | As Reported |  |  | Adjustment |  |  | Revised |
Revenue: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Products |  | $ | 9,517 |  |  | $ | — |  |  | $ | 9,517 |  |  | $ | 18,600 |  |  | $ | — |  |  | $ | 18,600 |
Rental |  |  | 16,390 |  |  |  | — |  |  |  | 16,390 |  |  |  | 33,005 |  |  |  | (7,993 | ) |  |  | 25,012 |
Total revenue |  |  | 25,907 |  |  |  | — |  |  |  | 25,907 |  |  |  | 51,605 |  |  |  | (7,993 | ) |  |  | 43,612 |
Cost of revenue |  |  | 18,002 |  |  |  | — |  |  |  | 18,002 |  |  |  | 33,210 |  |  |  | — |  |  |  | 33,210 |
Gross profit |  |  | 7,905 |  |  |  | — |  |  |  | 7,905 |  |  |  | 18,395 |  |  |  | (7,993 | ) |  |  | 10,402 |
Operating expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Selling, general and administrative |  |  | 6,066 |  |  |  | — |  |  |  | 6,066 |  |  |  | 12,063 |  |  |  | — |  |  |  | 12,063 |
Research and development |  |  | 4,225 |  |  |  | — |  |  |  | 4,225 |  |  |  | 8,521 |  |  |  | — |  |  |  | 8,521 |
Change in estimated fair value of contingent consideration |  |  | 972 |  |  |  | — |  |  |  | 972 |  |  |  | 972 |  |  |  | — |  |  |  | 972 |
Bad debt expense |  |  | 8,124 |  |  |  | (7,993 | ) |  |  | 131 |  |  |  | 8,151 |  |  |  | (7,993 | ) |  |  | 158 |
Total operating expenses |  |  | 19,387 |  |  |  | (7,993 | ) |  |  | 11,394 |  |  |  | 29,707 |  |  |  | (7,993 | ) |  |  | 21,714 |
Loss from operations |  |  | (11,482 | ) |  |  | 7,993 |  |  |  | (3,489 | ) |  |  | (11,312 | ) |  |  | — |  |  |  | (11,312 | )
Other income, net |  |  | 285 |  |  |  | — |  |  |  | 285 |  |  |  | 246 |  |  |  | — |  |  |  | 246 |
Loss before income taxes |  |  | (11,197 | ) |  |  | 7,993 |  |  |  | (3,204 | ) |  |  | (11,066 | ) |  |  | — |  |  |  | (11,066 | )
Income tax expense |  |  | 607 |  |  |  | — |  |  |  | 607 |  |  |  | 2,027 |  |  |  | — |  |  |  | 2,027 |
Net loss |  | $ | (11,804 | ) |  | $ | 7,993 |  |  | $ | (3,811 | ) |  | $ | (13,093 | ) |  | $ | — |  |  | $ | (13,093 | )
Loss per common share: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic |  | $ | (0.87 | ) |  | $ | 0.59 |  |  | $ | (0.28 | ) |  | $ | (0.97 | ) |  | $ | — |  |  | $ | (0.97 | )
Diluted |  | $ | (0.87 | ) |  | $ | 0.59 |  |  | $ | (0.28 | ) |  | $ | (0.97 | ) |  | $ | — |  |  | $ | (0.97 | )

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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://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 250 -SubTopic 10 -Section 50 -Paragraph 7 -URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22644-107794 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 250 -URI http://asc.fasb.org/topic&trid=2122394 + Details
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