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RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS | 12 Months Ended
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Dec. 31, 2023
Accounting Changes and Error Corrections [Abstract] |
RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS | 2. RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS In connection with the preparation of our consolidated financial statements for the years ended December 31, 2023 and 2022, the Company identified errors related to revenue and cost recognition in its previously issued (i) consolidated financial statements as of and for the year ended December 31, 2022 included in its Annual Report on Form 10-K for the year ended December 31, 2022 (the “Annual Period”) and (ii) unaudited condensed consolidated financial statements for the quarters ended March 31, 2022 through September 30, 2023 included in its Quarterly Reports on Form 10-Q for the periods ended March 31, 2022, June 30, 2022, September 30, 2022, March 31, 2023, June 30, 2023 and September 30, 2023 (the “Interim Periods”, which, together with the Annual Period, the “Affected Periods”). During 2022 and 2023, the Company recognized revenues associated with customer contracts with performance obligations satisfied over time (“Over Time Contracts”) using labor hours as the measure of progress. The Company’s underlying estimates of total labor hours required to complete Over Time Contracts were materially different from the actual labor hours required, which was determined to represent an error since the information underlying the estimate was known or knowable as of the balance sheet date and, as a result, the percentage of completion used to recognize revenue in the Affected Periods is materially different from the percentage of completion using actual labor hours incurred. As a result, the Company has restated revenues during the Affected Periods to adjust the percentage of completion based upon the actual labor hours incurred to complete each Over Time Contract (the “Revenues Adjustment”). Additionally, the Company has determined that costs from Over Time Contracts should be recognized as incurred and, as a result, the Company has recorded an adjustment to its consolidated financial statements during the Affected Periods (together with the Revenues Adjustment, the “Restatement Adjustments”), as the Company was previously incorrectly deferring costs incurred to a future period. The Company evaluated the materiality of these misstatements both qualitatively and quantitatively in accordance with Staff Accounting Bulletin (“SAB”) No. 99, Materiality, and SAB No. 108, Considering the Effects of Prior Year Misstatements in Current Year Financial Statements, and determined the effect of correcting these misstatements was material to the Affected Periods. As a result of the material misstatements, the Company has restated its consolidated financial statements for the Affected Periods in accordance with ASC 250, Accounting Changes and Error Corrections (the “Restated Consolidated Financial Statements”). A reconciliation from the amounts previously reported for the Affected Periods to the restated amounts in the Restated Consolidated Financial Statements is provided for the impacted financial statement line items below for: (i) the consolidated balance sheet as of December 31, 2022; (ii) the consolidated statement of operations for the year ended December 31, 2022; (iii) the consolidated statement of changes in stockholders’ equity for the year ended December 31, 2022; and (iv) the consolidated statement of cash flows for the year ended December 31, 2022. The amounts labeled “Restatement Adjustments” represent the effects of the Restatement Adjustments. SCHEDULE OF RESTATEMENT ADJUSTMENTS The following table presents the effects of the Restatement Adjustments on the Company’s consolidated balance sheet as of December 31, 2022:
|  | Stated |  |  | Adjustments |  |  | Restated |
|  | December 31, 2022 |
|  | As Previously |  |  | Restatement |  |  | As |
|  | Stated |  |  | Adjustments |  |  | Restated |
ASSETS |  |  |  |  |  |  |  |  |
Current assets |  |  |  |  |  |  |  |  |  |  |  |
Accounts receivable, net |  | $ | 11,139 |  |  | $ | (1,129 | ) |  | $ | 10,010 |
Inventories, net |  | $ | 8,748 |  |  | $ | (658 | ) |  | $ | 8,090 |
Total current assets |  | $ | 33,036 |  |  | $ | (1,787 | ) |  | $ | 31,249 |
Total assets |  | $ | 37,175 |  |  | $ | (1,787 | ) |  | $ | 35,388 |
LIABILITIES AND STOCKHOLDERS’ EQUITY |  |  |  |  |  |  |  |  |  |  |  |
Current liabilities |  |  |  |  |  |  |  |  |  |  |  |
Deferred revenue |  | $ | 10,665 |  |  | $ | (6 | ) |  | $ | 10,659 |
Total current liabilities |  | $ | 18,962 |  |  | $ | (6 | ) |  | $ | 18,956 |
Total liabilities |  | $ | 20,242 |  |  | $ | (6 | ) |  | $ | 20,236 |
Stockholders’ equity |  |  |  |  |  |  |  |  |  |  |  |
Accumulated deficit |  | $ | (15,950 | ) |  | $ | (1,781 | ) |  | $ | (17,731 | )
Total stockholders’ equity |  | $ | 16,933 |  |  | $ | (1,781 | ) |  | $ | 15,152 |
Total liabilities and stockholders’ equity |  | $ | 37,175 |  |  | $ | (1,787 | ) |  | $ | 35,388 |
The following table presents the effects of the Restatement Adjustments on the Company’s consolidated statement of operations for the year ended December 31, 2022:
|  | Stated |  |  | Adjustments |  |  | Restated |
|  | For the Year Ended |
|  | December 31, 2022 |
|  | As Previously |  |  | Restatement |  |  | As |
|  | Stated |  |  | Adjustments |  |  | Restated |
Revenues |  | $ | 27,000 |  |  | $ | (1,122 | ) |  | $ | 25,878 |
Cost of goods sold |  | $ | 22,393 |  |  | $ | 659 |  |  | $ | 23,052 |
Gross profit |  | $ | 4,607 |  |  | $ | (1,781 | ) |  | $ | 2,826 |
Loss from operations |  | $ | (4,029 | ) |  | $ | (1,781 | ) |  | $ | (5,810 | )
Loss before taxes |  | $ | (3,631 | ) |  | $ | (1,781 | ) |  | $ | (5,412 | )
Net loss |  | $ | (3,638 | ) |  | $ | (1,781 | ) |  | $ | (5,419 | )
Loss per share - basic and diluted |  | $ | (0.37 | ) |  | $ | (0.19 | ) |  | $ | (0.56 | )
The following table presents the effects of the Restatement Adjustments on the Company’s consolidated statement of changes in stockholders’ equity for the year ended December 31, 2022:
|  | As Previously |  |  | Restatement |  |  | As |
|  | Stated |  |  | Adjustments |  |  | Restated |
|  |  | (unaudited) |  |  |  | (unaudited) |  |  |  | (unaudited) |
Balance - January 1, 2022 |  | $ | 19,552 |  |  | $ | - |  |  | $ | 19,552 |
Net loss |  | $ | (3,638 | ) |  | $ | (1,781 | ) |  | $ | (5,419 | )
Balance - December 31, 2022 |  | $ | 16,933 |  |  | $ | (1,781 | ) |  | $ | 15,152 |
The following table presents the effects of the Restatement Adjustments on the Company’s consolidated statement of cash flows for the year ended December 31, 2022:
|  | Stated |  |  | Adjustments |  |  | Restated |
|  | December 31, 2022 |
|  | As Previously |  |  | Restatement |  |  | As |
|  | Stated |  |  | Adjustments |  |  | Restated |
Cash flows from operating activities: |  |  |  |  |  |  |  |  |  |  |  |
Net loss |  | $ | (3,638 | ) |  | $ | (1,781 | ) |  | $ | (5,419 | )
Changes in operating assets and liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Accounts receivable |  | $ | (8,570 | ) |  | $ | 1,129 |  |  | $ | (7,441 | )
Inventories |  | $ | (4,589 | ) |  | $ | 658 |  |  | $ | (3,931 | )
Deferred revenue |  | $ | 8,243 |  |  | $ | (6 | ) |  | $ | 8,237 |
Net cash used in operating activities |  | $ | (5,772 | ) |  | $ | - |  |  | $ | (5,772 | )
The remainder of the notes to the Company’s consolidated financial statements have been updated and restated, as applicable, to reflect the impact of the Restatement Adjustments described above. See Note 4 - Restatement of Previously Issued Unaudited Interim Condensed Consolidated Financial Statements for details of the effect of the Restatement Adjustments on the Interim Periods.

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- Definition The entire disclosure for reporting error correction. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 250 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 7 -Publisher FASB -URI https://asc.fasb.org//1943274/2147483443/250-10-50-7 + Details
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