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Restatement of Previously Issued Condensed Consolidated Financial Statements | 6 Months Ended
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Jun. 30, 2025
Restatement of Previously Issued Condensed Consolidated Financial Statements |
Restatement of Previously Issued Condensed Consolidated Financial Statements | NOTE 4 — Restatement of Previously Issued Condensed Consolidated Financial Statements ​ For the three months and six months ended June 30, 2025, the Company determined that it had not appropriately presented its condensed consolidated balance sheets, statement of operations, statement of shareholders’ deficit, and statement of cash flows due to multiple errors that resulted in the condensed consolidated financial statements not being presented fairly. Based on an analysis of FASB ASC 250, Accounting Changes and Error Corrections, Staff Accounting Bulletin (“SAB”) No. 99, Materiality, and SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements, the Company concluded that these errors were material to the previously issued interim condensed consolidated financial statements and therefore required a restatement. The Company has restated its condensed consolidated financial statements for the three and six months ended June 30, 2025 to correct errors identified in the condensed consolidated statement of operations, balance sheets, statement of stockholders’ deficit, and statement of cash flows. The restatement includes the recognition of compensation expense related to shares to be issued to non-redemption shareholders; the reclassification of the fair value of shares previously issued to non-redemption shareholders from de-SPAC transaction expenses to general and administrative expenses; the reversal of legal expenses that had been over accrued; reductions to previously recorded tax penalty and interest accruals; and adjustments to revenue and cost of goods sold. The Company also corrected the presentation of shares pledged to a creditor, which are now properly reflected on the balance sheet and measured at fair value the time the shares were pledged. In connection with this correction, the related interest payable to related parties liability, previously reduced by the value of the pledged shares, has been restated to its original gross amount. In addition, prepaid inventory has been reclassified from prepaid expenses, and accrued advisory fees have been separately presented from accrued expenses and other current liabilities. The Company also recorded a loss on extinguishment of debt related to conversion of Seaport bridge, OPCO and Purchase order loans with the fair value included in shares to be issued. Gain on settlement of forward purchase agreement received in cash was also adjusted. Corresponding revisions have been made to the condensed consolidated statement of cash flows and related footnote disclosures. The restatement also includes the elimination of the previously recorded change in fair value of the pledged security, which has been corrected through the proper presentation of shares pledged to a creditor. These pledged shares are now reflected on the condensed consolidated balance sheets and measured at fair value at the time they were pledged. In connection with this correction, the related interest payable liability, previously reduced by the value of the pledged shares, has been restored to its original gross amount. In addition, the Company reversed transaction costs that should have been expensed in Q1 2025 as stock compensation issued to non-redemption shareholders, adjusted the previously recorded loss on extinguishment of debt, and corrected other items within total other expense. These adjustments, taken together, reduced the Company’s previously reported net loss for the period. The effect of the adjustment within the Company’s balance sheet as of June 30, 2025 is as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | June 30, 2025
​ | ​ | As previously reported |  | Restatement |  | As restated
Prepaid expenses | ​ | $ | 1,767,355 | ​ | $ | (1,344,016) | ​ | $ | 423,339
Prepaid inventory | ​ |  | — | ​ |  | 90,857 | ​ |  | 90,857
Inventory | ​ |  | 1,254,433 | ​ |  | 567,330 | ​ |  | 1,821,763
Security pledged to creditors | ​ |  | 879,894 | ​ |  | 1,185,528 | ​ |  | 2,065,422
Total current assets | ​ |  | 4,042,560 | ​ |  | 499,699 | ​ |  | 4,542,259
Total assets | ​ | $ | 4,129,107 | ​ | $ | 499,699 | ​ | $ | 4,628,806
Accounts payable | ​ |  | 4,361,099 | ​ |  | 299,999 | ​ |  | 4,661,098
Accrued advisory fees | ​ |  | — | ​ |  | 7,625,000 | ​ |  | 7,625,000
Accrued expenses and other current liabilities | ​ |  | 8,973,798 | ​ |  | (8,683,527) | ​ |  | 290,271
Interest payable related parties | ​ | ​ | 661,565 | ​ | ​ | (18,705) | ​ | ​ | 642,860
Accrued issuable equity | ​ | ​ | 250,000 | ​ | ​ | (250,000) | ​ | ​ | —
Total current liabilities | ​ |  | 28,398,257 | ​ |  | (1,027,233) | ​ |  | 27,371,024
Total liabilities | ​ | $ | 46,112,708 | ​ | $ | (1,027,233) | ​ | $ | 45,085,475
Shares to be issued | ​ | ​ | — | ​ | ​ | 250,000 | ​ | ​ | 250,000
Additional paid-in capital | ​ |  | 166,300,822 | ​ |  | 2,311,112 | ​ |  | 168,611,934
Accumulated deficit | ​ |  | (208,289,249) | ​ |  | (1,034,180) | ​ |  | (209,323,429)
Total shareholders’ deficit | ​ |  | (41,983,601) | ​ |  | 1,526,932 | ​ |  | (40,456,669)
Total liabilities and shareholders’ deficit | ​ | $ | 4,129,107 | ​ | $ | 499,699 | ​ | $ | 4,628,806
​ The effect of the adjustment within the Company’s statement of operations for the three months ended June 30, 2025 is as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | For the three months ended June 30, 2025
​ | ​ | As previously reported |  | Adjustment |  | As restated
Revenue | ​ | $ | 864,053 | ​ | $ | 19,921 | ​ | $ | 883,974
Cost of goods sold | ​ |  | 622,499 | ​ |  | 134,916 | ​ |  | 757,415
Gross margin | ​ |  | 241,554 | ​ |  | (114,995) | ​ |  | 126,559
General and administrative expenses | ​ |  | 1,984,659 | ​ |  | 713,161 | ​ |  | 2,697,820
Research and development expenses | ​ |  | 1,297,968 | ​ |  | 11,988 | ​ |  | 1,309,956
Total operating expenses | ​ |  | 3,291,525 | ​ |  | 725,149 | ​ |  | 4,016,674
Loss from operations | ​ |  | (3,049,971) | ​ |  | (840,144) | ​ |  | (3,890,115)
Change in fair value of pledged security | ​ |  | (1,185,528) | ​ |  | 1,185,528 | ​ |  | —
Transaction costs expensed | ​ |  | (8,502,003) | ​ |  | 8,502,003 | ​ |  | —
Interest expenses | ​ | ​ | (631,591) | ​ | ​ | 18,705 | ​ | ​ | (612,886)
Gains (loss) on extinguishment of debt | ​ |  | (7,771,709) | ​ |  | 5,317,531 | ​ |  | (2,454,178)
Total other expense: | ​ |  | (18,073,831) | ​ |  | 15,023,767 | ​ |  | (3,050,064)
Loss before income taxes | ​ |  | (21,123,802) | ​ |  | 14,183,623 | ​ |  | (6,940,179)
Net loss | ​ | $ | (21,123,802) | ​ | $ | 14,183,623 | ​ | $ | (6,940,179)
Net loss per share, basic and diluted | ​ | $ | (0.49) | ​ | $ | 0.33 | ​ | $ | (0.16)
​ The effect of the adjustment within the Company’s statement of operations for the six months ended June 30, 2025 is as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For the six months ended June 30, 2025
​ |  | As previously reported |  | Adjustment |  | As restated
Revenue | ​ | $ | 1,229,524 | ​ | $ | 500 | ​ | $ | 1,230,024
Cost of goods sold | ​ |  | 861,091 | ​ |  | 140,553 | ​ |  | 1,001,644
Gross margin | ​ |  | 368,433 | ​ |  | (140,053) | ​ |  | 228,380
General and administrative expenses | ​ |  | 6,748,375 | ​ |  | 10,610,553 | ​ |  | 17,358,928
Research and development expenses | ​ |  | 2,316,320 | ​ |  | 11,988 | ​ |  | 2,328,308
Total operating expenses | ​ |  | 9,081,808 | ​ |  | 10,622,541 | ​ |  | 19,704,349
Loss from operations | ​ |  | (8,713,375) | ​ |  | (10,762,594) | ​ |  | (19,475,969)
Change in fair value of pledged security | ​ |  | (1,185,528) | ​ |  | 1,185,528 | ​ |  | —
Interest expense | ​ | ​ | (1,355,058) | ​ | ​ | 18,705 | ​ | ​ | (1,336,353)
Transaction costs expensed | ​ |  | (18,167,007) | ​ |  | 9,403,092 | ​ |  | (8,763,915)
Gains (loss) on extinguishment of debt | ​ |  | 4,820,343 | ​ |  | (878,911) | ​ |  | 3,941,432
Total other expense: | ​ |  | (15,097,864) | ​ |  | 9,728,414 | ​ |  | (5,369,450)
Loss before income taxes | ​ |  | (23,811,239) | ​ |  | (1,034,180) | ​ |  | (24,845,419)
Net loss | ​ | $ | (23,811,239) | ​ | $ | (1,034,180) | ​ | $ | (24,845,419)
Net loss per share, basic and diluted | ​ | $ | (0.72) | ​ | $ | 0.02 | ​ | $ | (0.74)
​ The effect of the adjustment within the Company’s statement of shareholders’ deficit for the three months ended June 30, 2025 is as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | For the three months ended June 30, 2025
​ | ​ | As previously reported |  | Adjustment |  | As restated
Net loss | ​ | $ | (21,123,802) | ​ | $ | 14,183,623 | ​ | $ | (6,940,179)
Accumulated deficit | ​ | $ | (208,289,249) | ​ | $ | (1,034,180) | ​ | $ | (209,323,429)
Total shareholders’ deficit | ​ | $ | (41,983,601) | ​ | $ | 1,526,932 | ​ | $ | (40,456,669)
​ The effect of the adjustment within the Company’s statement of shareholders’ deficit for the six months ended June 30, 2025 is as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | For the six months ended June 30, 2025
​ | ​ | As previously reported |  | Adjustment |  | As restated
Net loss | ​ | $ | (23,811,239) | ​ | $ | (1,034,180) | ​ | $ | (24,845,419)
Accumulated deficit | ​ | $ | (208,289,249) | ​ | $ | (1,034,180) | ​ | $ | (209,323,429)
Total shareholders’ deficit | ​ | $ | (41,983,601) | ​ | $ | 1,526,932 | ​ | $ | (40,456,669)
​ The effect of the adjustment within the Company’s condensed consolidated statement of cash flows for the six months ended June 30, 2025 is as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | For the six months ended June 30, 2025
​ | ​ | As previously reported |  | Adjustment |  | As restated
Net loss | ​ | $ | (23,811,239) | ​ | $ | (1,034,180) | ​ | $ | (24,845,419)
Fair value of shares issued as non-redemption compensation | ​ |  | — | ​ |  | 10,835,293 | ​ |  | 10,835,293
Gain on extinguishment of debt, net | ​ |  | (4,820,343) | ​ |  | 733,634 | ​ |  | (4,086,709)
Change in fair value of security pledged to creditors | ​ |  | 1,185,528 | ​ |  | (1,185,528) | ​ |  | —
Transaction costs expensed | ​ |  | 18,167,007 | ​ |  | (9,403,092) | ​ |  | 8,763,915
Gain on settlement of forward purchase agreement | ​ |  | (1,406,669) | ​ |  | 1,406,669 | ​ |  | —
Payment of advisory and insurance expense | ​ |  | — | ​ |  | 715,000 | ​ |  | 715,000
Reverse recapitalization transaction | ​ |  | 844,676 | ​ |  | (715,000) | ​ |  | 129,676
Prepaid and other current assets | ​ |  | (1,654,164) | ​ |  | 1,242,081 | ​ |  | (412,083)
Inventory | ​ |  | 171,707 | ​ |  | (567,330) | ​ |  | (395,623)
Accounts payable | ​ |  | 3,117,203 | ​ |  | 299,999 | ​ |  | 3,417,202
Accrued liabilities | ​ |  | 1,137,562 | ​ |  | (1,029,375) | ​ |  | 108,187
Accrued issuable equity | ​ | ​ | 250,000 | ​ | ​ | (250,000) | ​ | ​ | —
Net cash provided by (used in) operating activities | ​ |  | (4,766,318) | ​ |  | 1,156,669 | ​ |  | (3,609,649)
Proceeds from issuance of common stock | ​ | ​ | — | ​ | ​ | 250,000 | ​ | ​ | 250,000
Proceeds from settlement of forward purchase agreement | ​ |  | 1,406,669 | ​ |  | (1,406,669) | ​ |  | —
Net cash provided by (used in) financing activities | ​ |  | 4,801,064 | ​ |  | (1,156,669) | ​ |  | 3,644,395
​

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