XML 31 R21.htm IDEA: XBRL DOCUMENT
v3.20.2

RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS | 3 Months Ended
--- | ---
Mar. 31, 2019
Accounting Changes and Error Corrections [Abstract] |
RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS | 15. RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS On February 14, 2020, the Company filed a Form 8-K disclosing that the Audit & Finance Committee of the Company’s Board of Directors determined, based on the recommendation of management, that the Company’s consolidated financial statements which were included in its annual report on Form 10-K for the year ended December 31, 2018, quarterly reports on Forms 10-Q for the quarters ended March 31, 2018, June 30, 2018, and September 30, 2018 and quarterly reports on Forms 10-Q for the quarters ended March 31, 2019, June 30, 2019, and September 30, 2019 and related financial information should no longer be relied upon, and determined that the consolidated financial statements will be restated. The errors were uncovered as part of the preparation of the Company’s consolidated financial statements for the fiscal year ended December 31, 2019. As a result, the Company restated the 2018 consolidated financial statements, which is referred to as the “Restatement.” The Restatement corrects errors which are discussed in detail within this footnote. The errors primarily related to the timing of recognition of revenue from contracts with customers. Restatement The following is a discussion of the restatement adjustments that were made to the Company’s previously issued March 31, 2019 and March 31, 2018 consolidated financial statements. (a) Revenue recognition The Company recognizes revenues and profits for contracts with customers using the cost-to-cost percentage of completion method of accounting. Historically, for long-term programs, the Company applied the cost-to-cost percentage of completion method at the program level, that is, for the entire duration of expected production activity on a particular program. The Company estimated its revenue recognition utilizing the life of the program to both measure progress and estimate profit margin. Under this approach, the Company estimated the total expected customer purchases over the life of the program, which included unexercised and non-binding customer purchase options, which resulted in the recognition of $103.8 million and $100.9 million of misstated contract assets, contract liabilities and loss reserves for the three months ended March 31, 2019 and year ended December 31, 2018, respectively. The Company has now concluded that its life of the program accounting was not an appropriate application of ASC Topic 606. Under ASC Topic 606, the performance obligation is the appropriate unit of accounting. The Company identifies performance obligations to customers once a contract is established in accordance with ASC Topic 606. For the Company, the contract under ASC Topic 606 is typically established upon execution of a purchase order either in accordance with a long-term customer agreement or on a standalone basis. The transaction price is also determined at the contract level and excludes amounts related to unexercised customer options. Similarly, the Company’s cost-to-cost input method to measure progress must consider only the costs incurred relative to the total expected costs of satisfying the performance obligations identified in the contract, exclusive of unexercised customer options. To correct these errors, the related revenue was reversed in the period in which the accounting errors took place and recognized in subsequent periods as control of the goods or services in the contract passed to the customer over time based on a cost-to-cost input method measure of progress. Additionally, certain adjustments to contract assets and contract liabilities were made to the consolidated balance sheet at the end of the period in which the accounting errors occurred. (b) Other The Company corrected other immaterial misstatements relating to previously unrecorded audit adjustments. (c) Income taxes The Company has recorded tax adjustments related to the impact of the Restatement. Impact on Consolidated Statements of Operations The effect of the Restatement described above on the accompanying consolidated statements of operations for the three months ended March 31, 2019 and 2018 is as follows:
|  | Three Months Ended March 31, 2018 |
|  | As Previously |  |  | Revenue |  |  |  |  |  | Income |  |  | As |
|  | Reported |  |  | Recognition |  |  | Other |  |  | Taxes |  |  | Restated |
Revenue |  | $ | 18,191,623 |  |  | $ | (3,201,672 | ) |  | $ | — |  |  | $ | — |  |  | $ | 14,989,951 |
Cost of sales |  |  | 14,141,755 |  |  |  | 27,862 |  |  |  | (280,143 | ) |  |  | — |  |  |  | 13,889,474 |
Gross profit |  |  | 4,049,868 |  |  |  | (3,229,534 | ) |  |  | 280,143 |  |  |  | — |  |  |  | 1,100,477 |
Selling, general and administrative expenses |  |  | 2,049,840 |  |  |  | — |  |  |  | 45,086 |  |  |  | — |  |  |  | 2,094,926 |
Income (loss) from operations |  |  | 2,000,028 |  |  |  | (3,229,534 | ) |  |  | 235,057 |  |  |  | — |  |  |  | (994,449 | )
Interest expense |  |  | 447,263 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 447,263 |
Income (loss) before provision for (benefit from) income taxes |  |  | 1,552,765 |  |  |  | (3,229,534 | ) |  |  | 235,057 |  |  |  | — |  |  |  | (1,441,712 | )
Provision for (benefit from) income taxes |  |  | 296,000 |  |  |  | — |  |  |  | — |  |  |  | (294,805 | ) |  |  | 1,195 |
Net income (loss) |  |  | 1,256,765 |  |  |  | (3,229,534 | ) |  |  | 235,057 |  |  |  | 294,805 |  |  |  | (1,442,907 | )
Other comprehensive loss net of tax–Change in unrealized loss interest rate swap on int on interest rate swap |  |  | (5,800 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (5,800 | )
Comprehensive income (loss) |  | $ | 1,250,965 |  |  | $ | (3,229,534 | ) |  | $ | 235,057 |  |  | $ | 294,805 |  |  | $ | (1,448,707 | )
Income (loss) per common share – basic |  | $ | 0.14 |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | (0.16 | )
Income (loss) per common share – diluted |  | $ | 0.14 |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | (0.16 | )
Shares used in computing earnings (loss) per common share: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic |  |  | 8,888,179 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 8,888,179 |
Diluted |  |  | 8,940,385 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 8,888,179 |
|  | Three Months Ended March 31, 2019 |
|  | As Previously Reported |  |  | Revenue Recognition |  |  | Other |  |  | Income Taxes |  |  | As Restated |
Revenue |  | $ | 25,583,531 |  |  | $ | (3,595,147 | ) |  | $ | — |  |  | $ | — |  |  | $ | 21,988,384 |
Cost of sales |  |  | 20,167,721 |  |  |  | (662,753 | ) |  |  | — |  |  |  | — |  |  |  | 19,504,968 |
Gross profit |  |  | 5,415,810 |  |  |  | (2,932,394 | ) |  |  | — |  |  |  | — |  |  |  | 2,483,416 |
Selling, general and administrative expenses |  |  | 2,806,443 |  |  |  | — |  |  |  | 99,243 |  |  |  | — |  |  |  | 2,905,686 |
Income (loss) from operations |  |  | 2,609,367 |  |  |  | (2,932,394 | ) |  |  | (99,243 | ) |  |  | — |  |  |  | (422,270 | )
Interest expense |  |  | 510,769 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 510,769 |
Income (loss) before provision for (benefit from) income taxes |  |  | 2,098,598 |  |  |  | (2,932,394 | ) |  |  | (99,243 | ) |  |  | — |  |  |  | (933,039 | )
Provision for (benefit from) income taxes |  |  | 440,000 |  |  |  | — |  |  |  | — |  |  |  | (438,323 | ) |  |  | 1,677 |
Net income (loss) |  | $ | 1,658,598 |  |  | $ | (2,932,394 | ) |  | $ | (99,243 | ) |  | $ | 438,323 |  |  | $ | (934,716 | )
Income per common share – basic |  | $ | 0.14 |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | (0.08 | )
Income per common share – diluted |  | $ | 0.14 |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | (0.08 | )
Shares used in computing earnings per common share: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic |  |  | 11,736,305 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 11,736,305 |
Diluted |  |  | 11,792,818 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 11,736,305 |
Impact on Consolidated Balance Sheets The effect of the Restatement described above on the accompanying consolidated balance sheets as of March 31, 2019 and December 31, 2018 is as follows:
|  | As of March 31, 2019 |
|  | As Previously Reported |  |  | Revenue Recognition |  |  | Other |  |  | Income Taxes |  |  | As Restated |
ASSETS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash |  | $ | 617,161 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 617,161 |
Restricted cash |  |  | 2,000,000 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2,000,000 |
Accounts receivable, net |  |  | 6,583,155 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 6,583,155 |
Contract assets |  |  | 120,749,918 |  |  |  | (100,971,165 | ) |  |  | — |  |  |  | — |  |  |  | 19,778,753 |
Inventory |  |  | 11,090,995 |  |  |  | — |  |  |  | (350,386 | ) |  |  | — |  |  |  | 10,740,609 |
Refundable income taxes |  |  | 435,000 |  |  |  | — |  |  |  | — |  |  |  | (97 | ) |  |  | 434,903 |
Prepaid expenses and other current assets |  |  | 1,205,297 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,205,297 |
Total Current Assets |  |  | 142,681,526 |  |  |  | (100,971,165 | ) |  |  | (350,386 | ) |  |  | (97 | ) |  |  | 41,359,878 |
Operating lease right-of-use assets |  |  | 4,927,810 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 4,927,810 |
Property and equipment, net |  |  | 3,533,038 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 3,533,038 |
Refundable income taxes |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 434,903 |  |  |  | 434,903 |
Deferred income taxes |  |  | 486,664 |  |  |  | — |  |  |  | — |  |  |  | (486,664 | ) |  |  | — |
Other assets |  |  | 229,552 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 229,552 |
Total Assets |  | $ | 151,858,590 |  |  | $ | (100,971,165 | ) |  | $ | (350,386 | ) |  | $ | (51,858 | ) |  | $ | 50,485,181 |
Liabilities and Shareholders' Equity (Deficit) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Accounts payable |  | $ | 12,364,039 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 12,364,039 |
Accrued expenses |  |  | 1,089,803 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,089,803 |
Contract liabilities |  |  | 3,279,843 |  |  |  | (3,190 | ) |  |  | — |  |  |  | — |  |  |  | 3,276,653 |
Loss reserve |  |  | 216,606 |  |  |  | 2,820,076 |  |  |  | — |  |  |  | — |  |  |  | 3,036,682 |
Current portion of long-term debt |  |  | 2,506,099 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2,506,099 |
Operating lease liabilities |  |  | 1,593,243 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,593,243 |
Income taxes payable |  |  | 253,798 |  |  |  | — |  |  |  | — |  |  |  | (211,677 | ) |  |  | 42,121 |
Total Current Liabilities |  |  | 21,303,431 |  |  |  | 2,816,886 |  |  |  | — |  |  |  | (211,677 | ) |  |  | 23,908,640 |
Line of credit |  |  | 23,738,685 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 23,738,685 |
Long-term operating lease liabilities |  |  | 3,837,678 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 3,837,678 |
Long-term debt, net of current portion |  |  | 3,601,883 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 3,601,883 |
Deferred income taxes |  |  | 4,028,553 |  |  |  | — |  |  |  | — |  |  |  | (4,028,553 | ) |  |  | — |
Total Liabilities |  |  | 56,510,230 |  |  |  | 2,816,886 |  |  |  | — |  |  |  | (4,240,230 | ) |  |  | 55,086,886 |
Shareholders' Equity (Deficit): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Common stock |  |  | 11,736 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 11,736 |
Additional paid-in capital |  |  | 70,917,811 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 70,917,811 |
Retained earnings (accumulated deficit) |  |  | 24,418,813 |  |  |  | (103,788,051 | ) |  |  | (350,386 | ) |  |  | 4,188,372 |  |  |  | (75,531,252 | )
Total Shareholders’ Equity (Deficit) |  |  | 95,348,360 |  |  |  | (103,788,051 | ) |  |  | (350,386 | ) |  |  | 4,188,372 |  |  |  | (4,601,705 | )
Total Liabilities and Shareholders’ Equity (Deficit) |  | $ | 151,858,590 |  |  | $ | (100,971,165 | ) |  | $ | (350,386 | ) |  | $ | (51,858 | ) |  | $ | 50,485,181 |
|  | As of December 31, 2018 |
|  | As Previously Reported |  |  | Revenue Recognition |  |  | Other |  |  | Income Taxes |  |  | As Restated |
ASSETS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash |  | $ | 4,128,142 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 4,128,142 |
Restricted cash |  |  | 2,000,000 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2,000,000 |
Accounts receivable, net |  |  | 8,623,329 |  |  |  | — |  |  |  | 99,242 |  |  |  | — |  |  |  | 8,722,571 |
Contract assets |  |  | 113,333,491 |  |  |  | (95,744,625 | ) |  |  | — |  |  |  | — |  |  |  | 17,588,866 |
Inventory |  |  | 9,711,997 |  |  |  | — |  |  |  | (350,386 | ) |  |  | — |  |  |  | 9,361,611 |
Refundable income taxes |  |  | 435,000 |  |  |  | — |  |  |  | — |  |  |  | (97 | ) |  |  | 434,903 |
Prepaid expenses and other current assets |  |  | 1,972,630 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,972,630 |
Total Current Assets |  |  | 140,204,589 |  |  |  | (95,744,625 | ) |  |  | (251,144 | ) |  |  | (97 | ) |  |  | 44,208,723 |
Property and equipment, net |  |  | 2,545,192 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2,545,192 |
Refundable income taxes |  |  | 435,000 |  |  |  | — |  |  |  | — |  |  |  | (97 | ) |  |  | 434,903 |
Deferred income taxes |  |  | 279,318 |  |  |  | — |  |  |  | — |  |  |  | (279,318 | ) |  |  | — |
Other assets |  |  | 249,575 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 249,575 |
Total Assets |  | $ | 143,713,674 |  |  | $ | (95,744,625 | ) |  | $ | (251,144 | ) |  | $ | (279,512 | ) |  | $ | 47,438,393 |
Liabilities and Shareholders' Equity (Deficit) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Accounts payable |  | $ | 9,902,481 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 9,902,481 |
Accrued expenses |  |  | 1,558,160 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,558,160 |
Contract liabilities |  |  | 3,588,500 |  |  |  | 1,664,079 |  |  |  | — |  |  |  | — |  |  |  | 5,252,579 |
Loss reserve |  |  | 216,606 |  |  |  | 3,446,952 |  |  |  | — |  |  |  | — |  |  |  | 3,663,558 |
Current portion of long-term debt |  |  | 2,434,981 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2,434,981 |
Income taxes payable |  |  | 115,000 |  |  |  | — |  |  |  | — |  |  |  | (1,008 | ) |  |  | 113,992 |
Total Current Liabilities |  |  | 17,815,728 |  |  |  | 5,111,031 |  |  |  | — |  |  |  | (1,008 | ) |  |  | 22,925,751 |
Line of credit |  |  | 24,038,685 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 24,038,685 |
Long-term debt, net of current portion |  |  | 3,876,238 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 3,876,238 |
Deferred income taxes |  |  | 4,028,553 |  |  |  | — |  |  |  | — |  |  |  | (4,028,553 | ) |  |  | — |
Other liabilities |  |  | 531,124 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 531,124 |
Total Liabilities |  |  | 50,290,328 |  |  |  | 5,111,031 |  |  |  | — |  |  |  | (4,029,561 | ) |  |  | 51,371,798 |
Shareholders’ Equity (Deficit): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Common stock |  |  | 11,718 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 11,718 |
Additional paid-in capital |  |  | 70,651,413 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 70,651,413 |
Retained earnings (accumulated deficit) |  |  | 22,760,215 |  |  |  | (100,855,656 | ) |  |  | (251,144 | ) |  |  | 3,750,049 |  |  |  | (74,596,536 | )
Total Shareholders’ Equity (Deficit) |  |  | 93,423,346 |  |  |  | (100,855,656 | ) |  |  | (251,144 | ) |  |  | 3,750,049 |  |  |  | (3,933,405 | )
Total Liabilities and Shareholders' Equity(Deficit) |  | $ | 143,713,674 |  |  | $ | (95,744,625 | ) |  | $ | (251,144 | ) |  | $ | (279,512 | ) |  | $ | 47,438,393 |
Cumulative Effect of Prior Period Adjustments The following table presents the impact of the Restatement on the Company’s shareholders’ equity (deficit) as of January 1, 2018:
|  | Common Stock |  |  | Additional Paid-in Capital |  |  | Retained Earnings (Accumulated Deficit) |  |  | Accumulated Other Comprehensive Loss |  |  | Total Shareholders’ Equity (Deficit) |
Balance, January 1, 2018 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(As previously reported) |  | $ | 8,864 |  |  | $ | 53,770,617 |  |  | $ | 20,548,652 |  |  | $ | (14,800 | ) |  | $ | 74,313,333 |
Adjustments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Revenue recognition |  |  | — |  |  |  | — |  |  |  | (86,621,280 | ) |  |  | — |  |  |  | (86,621,280 | )
Other |  |  | — |  |  |  | — |  |  |  | (280,143 | ) |  |  | — |  |  |  | (280,143 | )
Income taxes |  |  | — |  |  |  | — |  |  |  | (697,012 | ) |  |  | — |  |  |  | (697,012 | )
Cumulative restatement adjustments |  |  | — |  |  |  | — |  |  |  | (87,598,435 | ) |  |  | — |  |  |  | (87,598,435 | )
Balance, January 1, 2018 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(As Restated) |  | $ | 8,864 |  |  | $ | 53,770,617 |  |  | $ | (67,049,783 | ) |  | $ | (14,800 | ) |  | $ | (13,285,102 | )
Impact on Consolidated Statement of Cash Flows The effect of the Restatement described above on the accompanying consolidated statement of cash flows for the three months ended March 31, 2019 is as follows:
|  | Three Months Ended March 31, 2019 |
|  | As Previously Reported |  |  | Restatement Adjustments |  |  | As Restated |
Cash flows from operating activities: |  |  |  |  |  |  |  |  |  |  |  |
Net income (loss) |  | $ | 1,658,598 |  |  | $ | (2,593,314 | ) |  | $ | (934,716 | )
Adjustments to reconcile net income (loss) to net cash used in operating activities: |  |  |  |  |  |  |  |  |  |  |  |
Depreciation and amortization |  |  | 209,261 |  |  |  | — |  |  |  | 209,261 |
Amortization of debt issuance cost |  |  | 20,024 |  |  |  | 16,929 |  |  |  | 36,953 |
Cash expended in excess of rent expense |  |  | (28,012 | ) |  |  | — |  |  |  | (28,012 | )
Stock-based compensation |  |  | 330,787 |  |  |  | — |  |  |  | 330,787 |
Deferred income taxes |  |  | (207,346 | ) |  |  | 207,346 |  |  |  | — |
Changes in operating assets and liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Decrease in accounts receivable |  |  | 2,040,174 |  |  |  | 99,243 |  |  |  | 2,139,417 |
Increase in contract assets |  |  | (7,416,427 | ) |  |  | 5,226,539 |  |  |  | (2,189,888 | )
Increase in inventory |  |  | (1,378,998 | ) |  |  | — |  |  |  | (1,378,998 | )
Decrease in refundable income taxes |  |  | 435,000 |  |  |  | (435,000 | ) |  |  | — |
Decrease in prepaid expenses and other current assets |  |  | 558,845 |  |  |  | (17,054 | ) |  |  | 541,791 |
Increase in accounts payable and accrued expenses |  |  | 1,993,200 |  |  |  | — |  |  |  | 1,993,200 |
Decrease in contract liabilities |  |  | (686,782 | ) |  |  | (1,667,144 | ) |  |  | (2,353,926 | )
Decrease in loss reserve |  |  | — |  |  |  | (626,876 | ) |  |  | (626,876 | )
Increase (decrease) in income taxes payable |  |  | 138,798 |  |  |  | (210,669 | ) |  |  | (71,871 | )
Net cash used in operating activities |  |  | (2,332,878 | ) |  |  | — |  |  |  | (2,332,878 | )
Cash flows from investing activities: |  |  |  |  |  |  |  |  |  |  |  |
Purchase of property and equipment |  |  | (210,695 | ) |  |  | — |  |  |  | (210,695 | )
Net cash used in investing activities |  |  | (210,695 | ) |  |  | — |  |  |  | (210,695 | )
Cash flows from financing activities: |  |  |  |  |  |  |  |  |  |  |  |
Payments of long-term debt |  |  | (603,037 | ) |  |  | — |  |  |  | (603,037 | )
Payments of line of credit |  |  | (300,000 | ) |  |  | — |  |  |  | (300,000 | )
Stock offering costs paid |  |  | (64,371 | ) |  |  | — |  |  |  | (64,371 | )
Net cash used in financing activities |  |  | (967,408 | ) |  |  | — |  |  |  | (967,408 | )
Net decrease in cash and restricted cash |  |  | (3,510,981 | ) |  |  | — |  |  |  | (3,510,981 | )
Cash and restricted cash at beginning of period |  |  | 6,128,142 |  |  |  | — |  |  |  | 6,128,142 |
Cash and restricted cash at end of period |  | $ | 2,617,161 |  |  | $ | — |  |  | $ | 2,617,161 |
Supplemental disclosures of cash flow information: |  |  |  |  |  |  |  |  |  |  |  |
Cash paid during the period for interest |  | $ | 551,635 |  |  | $ | — |  |  | $ | 551,635 |
Cash paid during the period for income taxes |  | $ | 90,202 |  |  | $ | — |  |  | $ | 90,202 |
Supplemental schedule of noncash investing and financing activities: |  |  |  |  |  |  |  |  |  |  |  |
Equipment acquired under financing lease |  | $ | 399,800 |  |  | $ | — |  |  | $ | 399,800 |
Impact on Consolidated Statement of Cash Flows The effect of the Restatement described above on the accompanying consolidated statement of cash flows for the three months ended March 31, 2018 is as follows:
|  | Three Months Ended March 31, 2018 |
|  | As Previously Reported |  |  | Restatement Adjustments |  |  | As Restated |
Cash flows from operating activities: |  |  |  |  |  |  |  |  |  |  |  |
Net income (loss) |  | $ | 1,256,765 |  |  | $ | (2,699,672 | ) |  | $ | (1,442,907 | )
Adjustments to reconcile net income (loss) to net cash used in operating activities: |  |  |  |  |  |  |  |  |  |  |  |
Depreciation and amortization |  |  | 153,297 |  |  |  | — |  |  |  | 153,297 |
Amortization of debt issuance cost |  |  | 21,392 |  |  |  | — |  |  |  | 21,392 |
Cash expended in excess of rent expense |  |  | (17,692 | ) |  |  | — |  |  |  | (17,692 | )
Stock-based compensation |  |  | 303,940 |  |  |  | (93,912 | ) |  |  | 210,028 |
Bad debt expense |  |  | — |  |  |  | 150,000 |  |  |  | 150,000 |
Common stock issued as employee compensation |  |  | 45,913 |  |  |  | — |  |  |  | 45,913 |
Deferred income taxes |  |  | 405,000 |  |  |  | (405,000 | ) |  |  | — |
Changes in operating assets and liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Decrease in accounts receivable |  |  | 1,395,407 |  |  |  | (150,000 | ) |  |  | 1,245,407 |
(Increase) decrease in contract assets |  |  | (2,865,025 | ) |  |  | 3,260,082 |  |  |  | 395,057 |
Increase in inventory |  |  | (49,100 | ) |  |  | — |  |  |  | (49,100 | )
Decrease in prepaid expenses and other current assets |  |  | 98,683 |  |  |  | — |  |  |  | 98,683 |
Decrease in accounts payable and accrued expenses |  |  | (3,247,776 | ) |  |  | (141,146 | ) |  |  | (3,388,922 | )
Increase in contract liabilities |  |  | 35,198 |  |  |  | (3,091 | ) |  |  | 32,107 |
Decrease in loss reserve |  |  | — |  |  |  | (27,456 | ) |  |  | (27,456 | )
Increase (decrease) in income taxes payable |  |  | (109,327 | ) |  |  | 110,195 |  |  |  | 868 |
Net cash used in operating activities |  |  | (2,573,325 | ) |  |  | — |  |  |  | (2,573,325 | )
Cash flows from investing activities: |  |  |  |  |  |  |  |  |  |  |  |
Purchase of property and equipment |  |  | (156,006 | ) |  |  | — |  |  |  | (156,006 | )
Net cash used in investing activities |  |  | (156,006 | ) |  |  | — |  |  |  | (156,006 | )
Cash flows from financing activities: |  |  |  |  |  |  |  |  |  |  |  |
Payments of long-term debt |  |  | (418,306 | ) |  |  | — |  |  |  | (418,306 | )
Proceeds from line of credit |  |  | 2,000,000 |  |  |  | — |  |  |  | 2,000,000 |
Net cash used in financing activities |  |  | 1,581,694 |  |  |  | — |  |  |  | 1,581,694 |
Net decrease in cash and restricted cash |  |  | (1,147,637 | ) |  |  | — |  |  |  | (1,147,637 | )
Cash and restricted cash at beginning of period |  |  | 1,430,877 |  |  |  | — |  |  |  | 1,430,877 |
Cash and restricted cash at end of period |  | $ | 283,240 |  |  | $ | — |  |  | $ | 283,240 |
Supplemental disclosures of cash flow information: |  |  |  |  |  |  |  |  |  |  |  |
Cash paid during the period for interest |  | $ | 429,614 |  |  | $ | — |  |  | $ | 429,614 |

X
- References No definition available. + Details
Name: | us-gaap_AccountingChangesAndErrorCorrectionsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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
Name: | us-gaap_AccountingChangesAndErrorCorrectionsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration