Restatement of Previously Issued Consolidated Financial Statements

12 Months Ended

Dec. 31, 2024

Accounting Changes and Error Corrections [Abstract]

Restatement of Previously Issued Consolidated Financial Statements

Note 12. Restatement of Previously Issued Consolidated Financial Statements

In the course of preparing the Company’s Condensed Consolidated Financial Statements as of and for the three and six months ended June 30, 2025, the Company reassessed the rights and preferences of its Preferred Stock, and concluded

that, because they are substantially identical to those of its common stock, $0.001 par value, the Preferred Stock should be treated as a separate class of common stock for purposes of calculating earnings per share in accordance with ASC 260-10, “Earnings Per Share.” As a result, the Company determined that it should have presented earnings per share under the two-class method in prior reporting periods.

Additionally, in connection with this reassessment, the Company concluded that it had incorrectly classified the Preferred Stock as permanent equity in the consolidated balance sheets. The Preferred Stock includes a provision that, upon the occurrence of a fundamental transaction (which includes a third-party tender or exchange offer) in which more than 50 percent of the common stockholders receive cash or other assets, entitles holders of Preferred Stock, upon any subsequent conversion, are entitled to receive the same form of consideration, even if they did not participate in the original transaction. Because this feature may result in settlement in cash or other non-equity consideration upon an event outside the Company’s control, the Preferred Stock does not meet the criteria for permanent equity classification and is instead classified as temporary equity under ASC 480-10-S99-3A. Although a tender offer is not considered probable as of the current reporting date and redemption is not deemed probable, the existence of this provision requires classification as temporary equity. The Preferred Stock is not subsequently remeasured to its redemption value because redemption is not considered probable.

As a result of these conclusions, the Company determined that a correction was necessary with respect to the classification of Preferred Stock as temporary equity and the presentation of earnings per share under the two-class method.

Accordingly, the accompanying financial statements as of and for the year ended December 31, 2024 and December 31, 2023, and related notes hereto, have been restated to correct the classification of the Preferred Stock as temporary equity and to include EPS calculations under the two-class method.

The impact of the correction of the misstatements is summarized below (in thousands):


	As of December 31, 2023
	As Previously Reported		Restatement Impact			As Restated

LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

Convertible preferred stock, 5,000,000 shares authorized at December 31, 2023 and 2022:
Series X1 non-voting convertible preferred stock, $0.001 par value, 515,000 shares designated; 110,086 and 117,970 shares issued and outstanding at December 31, 2023 and 2022, respectively	$	—	$	53,543		$	53,543
Series X non-voting convertible preferred stock, $0.001 par value, 10,000 shares designated; 4,422 and 6,204 shares issued and outstanding at December 31, 2023 and 2022		—		2,151			2,151

Stockholders’ equity (deficit):
Convertible preferred stock, 5,000,000 shares authorized at December 31, 2023 and 2022:
Series X1 non-voting convertible preferred stock, $0.001 par value, 515,000 shares designated; 110,086 and 117,970 shares issued and outstanding at December 31, 2023 and 2022, respectively		—		—			—
Series X non-voting convertible preferred stock, $0.001 par value, 10,000 shares designated; 4,422 and 6,204 shares issued and outstanding at December 31, 2023 and 2022		—		—			—
Additional paid-in capital		326,586		(55,694	)		270,892
Total stockholders’ equity (deficit)	$	7,208	$	(55,694	)	$	(48,486	)


	As of December 31, 2024
	As Previously Reported		Restatement Impact			As Restated

LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY

Convertible preferred stock, 5,000,000 shares authorized at December 31, 2024 and 2023:
Series X1 non-voting convertible preferred stock, $0.001 par value, 515,000 shares designated; 110,086 shares issued and outstanding at December 31, 2024 and 2023	$	—	$	53,543		$	53,543
Series X non-voting convertible preferred stock, $0.001 par value, 10,000 shares designated; 4,422 shares issued and outstanding at December 31, 2024 and 2023		—		2,151			2,151

Stockholders’ equity:
Convertible preferred stock, 5,000,000 shares authorized at December 31, 2024 and 2023:
Series X1 non-voting convertible preferred stock, $0.001 par value, 515,000 shares designated; 110,086 shares issued and outstanding at December 31, 2024 and 2023		—		—			—
Series X non-voting convertible preferred stock, $0.001 par value, 10,000 shares designated; 4,422 shares issued and outstanding at December 31, 2024 and 2023		—		—			—
Additional paid-in capital		473,640		(55,694	)		417,946
Total stockholders’ equity	$	118,140	$	(55,694	)	$	62,446


	For the Fiscal Year Ended December 31, 2023
	As Previously Reported			As Restated

Basic and diluted earnings per share of common stock	$	(4.73	)	$	(3.74	)
Basic and diluted earnings per share of Series X and Series X1 non-voting convertible preferred stock	$	—		$	(207.58	)
Weighted-average shares outstanding of Series X and Series X1 non-voting convertible preferred stock, basic and diluted		—			118,268

	For the Fiscal Year Ended December 31, 2024
	As Previously Reported			As Restated

Basic and diluted earnings per share of common stock	$	(0.75	)	$	(0.66	)
Basic and diluted earnings per share of Series X and Series X1 non-voting convertible preferred stock	$	—		$	(36.61	)
Weighted-average shares outstanding of Series X and Series X1 non-voting convertible preferred stock, basic and diluted		—			114,508

Restatement of Interim Financial Information

The misstatements described above were also material to the Company's unaudited condensed consolidated financial statements as of and for the three months ended March 31, 2024, as of and for the three and six months ended June 30, 2024 and as of and for the three and nine months ended September 30, 2024. The Company has restated its unaudited Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Operations and Comprehensive Loss, and Condensed

Consolidated Statements of Convertible Preferred Stock and Stockholders' Equity (Deficit) for the quarterly and year to date periods ended March 31, 2024, June 30, 2024 and September 30, 2024.

The restated impact of the correction of the misstatements is summarized below (in thousands):


	As of March 31, 2024
	As Previously Reported			Restatement Impact			As Restated

LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

Convertible preferred stock, 5,000,000 shares authorized at March 31, 2024 and December 31, 2023:
Series X1 non-voting convertible preferred stock, $0.001 par value, 515,000 shares designated; 110,086 shares issued and outstanding at March 31, 2024 and December 31, 2023	$	—		$	53,543		$	53,543
Series X non-voting convertible preferred stock, $0.001 par value, 10,000 shares designated; 4,422 shares issued and outstanding at March 31, 2024 and December 31, 2023		—			2,151			2,151

Stockholders’ equity (deficit):
Convertible preferred stock, 5,000,000 shares authorized at March 31, 2024 and December 31, 2023:
Series X1 non-voting convertible preferred stock, $0.001 par value, 515,000 shares designated; 110,086 shares issued and outstanding at March 31, 2024 and December 31, 2023		—			—			—
Series X non-voting convertible preferred stock, $0.001 par value, 10,000 shares designated; 4,422 shares issued and outstanding at March 31, 2024 and December 31, 2023		—			—			—
Additional paid-in capital		328,280			(55,694	)		272,586
Total stockholders’ equity (deficit)	$	(14,728	)	$	(55,694	)	$	(70,422	)


	For the Three Months Ended March 31, 2024
	As Previously Reported			As Restated

Basic and diluted earnings per share of common stock	$	(0.79	)	$	(0.65	)
Basic and diluted earnings per share of Series X and Series X1 non-voting convertible preferred stock	$	—		$	(36.12	)
Weighted-average shares outstanding of Series X and Series X1 non-voting convertible preferred stock, basic and diluted		—			114,508


	As of June 30, 2024
	As Previously Reported			Restatement Impact			As Restated

LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

Convertible preferred stock, 5,000,000 shares authorized at June 30, 2024 and December 31, 2023:
Series X1 non-voting convertible preferred stock, $0.001 par value, 515,000 shares designated; 110,086 shares issued and outstanding at June 30, 2024 and December 31, 2023	$	—		$	53,543		$	53,543
Series X non-voting convertible preferred stock, $0.001 par value, 10,000 shares designated; 4,422 shares issued and outstanding at June 30, 2024 and December 31, 2023		—			2,151			2,151

Stockholders’ equity (deficit):
Convertible preferred stock, 5,000,000 shares authorized at June 30, 2024 and December 31, 2023:
Series X1 non-voting convertible preferred stock, $0.001 par value, 515,000 shares designated; 110,086 shares issued and outstanding at June 30, 2024 and December 31, 2023		—			—			—
Series X non-voting convertible preferred stock, $0.001 par value, 10,000 shares designated; 4,422 shares issued and outstanding at June 30, 2024 and December 31, 2023		—			—			—
Additional paid-in capital		379,400			(55,694	)		323,706
Total stockholders’ equity (deficit)	$	(8,501	)	$	(55,694	)	$	(64,195	)


	For the Three Months Ended June 30, 2024						For the Six Months Ended June 30, 2024
	As Previously Reported			As Restated			As Previously Reported			As Restated

Basic and diluted earnings per share of common stock	$	(1.06	)	$	(0.92	)	$	(1.90	)	$	(1.61	)
Basic and diluted earnings per share of Series X and Series X1 non-voting convertible preferred stock	$	—		$	(51.29	)	$	—		$	(89.60	)
Weighted-average shares outstanding of Series X and Series X1 non-voting convertible preferred stock, basic and diluted		—			114,508			—			114,508


	As of September 30, 2024
	As Previously Reported		Restatement Impact			As Restated

LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY

Convertible preferred stock, 5,000,000 shares authorized at September 30, 2024 and December 31, 2023:
Series X1 non-voting convertible preferred stock, $0.001 par value, 515,000 shares designated; 110,086 shares issued and outstanding at September 30, 2024 and December 31, 2023	$	—	$	53,543		$	53,543
Series X non-voting convertible preferred stock, $0.001 par value, 10,000 shares designated; 4,422 shares issued and outstanding at September 30, 2024 and December 31, 2023		—		2,151			2,151

Stockholders’ equity:
Convertible preferred stock, 5,000,000 shares authorized at September 30, 2024 and December 31, 2023:
Series X1 non-voting convertible preferred stock, $0.001 par value, 515,000 shares designated; 110,086 shares issued and outstanding at September 30, 2024 and December 31, 2023		—		—			—
Series X non-voting convertible preferred stock, $0.001 par value, 10,000 shares designated; 4,422 shares issued and outstanding at September 30, 2024 and December 31, 2023		—		—			—
Additional paid-in capital		386,884		(55,694	)		331,190
Total stockholders’ equity	$	76,058	$	(55,694	)	$	20,364


	For the Three Months Ended September 30, 2024						For the Nine Months Ended September 30, 2024
(In thousands, except share and per share data)	As Previously Reported			As Restated			As Previously Reported			As Restated

Net loss attributable to common shares - diluted	$	(17,504	)	$	(15,703	)	$	(61,086	)	$	(53,230	)
Diluted earnings per share of common stock	$	(0.32	)	$	(0.28	)	$	(1.42	)	$	(1.23	)

Net income attributable to Series X and Series X1 non-voting convertible preferred stocks - basic	$	—		$	6,666		$	—		$	852
Basic earnings per share of Series X and Series X1 non-voting convertible preferred stock	$	—		$	58.21		$	—		$	7.44
Weighted-average shares outstanding of Series X and Series X1 non-voting convertible preferred stock, basic		—			114,508			—			114,508

Net loss attributable to Series X and Series X1 non-voting convertible preferred stocks - diluted	$	—		$	(1,801	)	$	—		$	(7,856	)
Diluted earnings per share of Series X and Series X1 non-voting convertible preferred stock	$	—		$	(15.73	)	$	—		$	(68.60	)
Weighted-average shares outstanding of Series X and Series X1 non-voting convertible preferred stock, diluted		—			114,508			—			114,508