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Restatement of Previously Issued Financial Statements (Tables)

6 Months Ended

Jun. 30, 2021

Restatement of Previously Issued Financial Statements

Summary of effect of restatement items

		June 30, 2020
		Three months				Six months
Reduction of net sales		$	41,000			$	77,000
Increase in general and administrative expense for penalties			12,000				23,000
Increase in interest expense			18,000				33,000
Total effect of restatement items		$	71,000			$	133,000

Summary of restatement of operation

		June 30, 2020
		Three months								Six months
Six Months Ended		As previously reported				Restated				As previously reported				Restated
Services revenues		$	3,174,000			$	3,133,000			$	7,610,000			$	7,533,000
Products revenues			214,000				214,000				460,000				460,000
Total Net Sales			3,388,000				3,347,000				8,070,000				7,993,000

Cost of services			2,807,000				2,807,000				6,189,000				6,189,000
Cost of goods sold			208,000				208,000				380,000				380,000
Impairment loss			-				-				159,000				159,000
Total Cost of Sales			3,015,000				3,015,000				6,728,000				6,728,000
Gross Profit			373,000				332,000				1,342,000				1,265,000

Operating Expenses:
Selling			927,000				927,000				1,647,000				1,647,000
Marketing			243,000				243,000				608,000				608,000
General and administrative			980,000				992,000				1,973,000				1,996,000
Total Operating Expenses			2,150,000				2,162,000				4,228,000				4,251,000
Operating Loss			(1,777,000	)			(1,830,000	)			(2,886,000	)			(2,986,000	)

Other income (expense):
Interest expense			-				(18,000	)			-				(33,000	)
Miscellaneous			16,000				16,000				40,000				40,000
Loss Before Taxes			(1,761,000	)			(1,832,000	)			(2,846,000	)			(2,979,000	)

Income tax benefit			11,000				11,000				(211,000	)			(211,000	)
Net Loss		$	(1,772,000	)		$	(1,843,000	)		$	(2,635,000	)		$	(2,768,000	)

Net loss per share:
Basic		$	(1.03	)		$	(1.07	)		$	(1.53	)		$	(1.60	)
Diluted		$	(1.03	)		$	(1.07	)		$	(1.53	)		$	(1.60	)

Shares used in calculation of net loss per share:
Basic			1,725,000				1,725,000				1,725,000				1,725,000
Diluted			1,725,000				1,725,000				1,725,000				1,725,000

Summary of sets forth the corrections in each line items affected in the balance sheet

		June 30, 2020
		As previously reported				Error correction				Restated
Accounts receivable, net		$	5,319,000			$	102,000			$	5,421,000
Accrued liabilities - sales tax		$	-			$	773,000			$	773,000
Accrued liabilities - other		$	597,000			$	172,000			$	769,000
Accumulated deficit		$	6,896,000			$	844,000			$	7,740,000

Summary of shareholders' equity

SHAREHOLDERS' EQUITY

		Accumulated Deficit				Total Shareholders' Equity
June 30, 2020
As reported		$	(6,896,000	)		$	9,287,000
Adjustment due to cumulative error correction			(844,000	)			(844,000	)
As restated		$	(7,740,000	)		$	8,443,000

Summary of the impact of the misstatements

		June 30, 2020
		Three months								Six months
Three Months Ended		As previously reported				Restated				As previously reported				Restated
Total Net Sales		$	3,388,000			$	3,347,000			$	8,070,000			$	7,993,000
Operating Loss			(1,777,000	)			(1,830,000	)			(2,886,000	)			(2,986,000	)
Net Loss			(1,772,000	)			(1,843,000	)			(2,635,000	)			(2,768,000	)

June 30, 2020

As of

As previously

reported

Restated

Shareholders' equity

$

9,287,000

$

8,444,000