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Restatement of Previously Issued Financial Statements (Tables)
 3 Months Ended
Mar. 31, 2021
Prior Period Adjustment [Abstract]  
Impact of misstatements

A summary of the impact of the misstatements is as follows:

 

    March 31, 2021         March 31, 2020      

Three Months Ended

   As previously reported     Restated     As previously reported     Restated  
Net Sales   $ 5,419,000     $ 5,386,000     $ 4,682,000     $ 4,646,000  
Operating Loss     (1,708,000 )     (1,759,000 )     (1,109,000 )     (1,156,000 )
Net Loss     (659,000 )     (737,000 )     (863,000 )     (925,000 )

 

    March 31, 2021         December 31, 2020  

As of

   As previously reported     Restated     As previously reported     Restated  
Shareholder's equity   $ 7,117,000     $ 6,013,000     $ 7,694,000     $ 6,668,000  

 

The following table sets forth the corrections in each of the individual line items affected in the statements of operations:

 

    March 31,     March 31,  

Three Months Ended

   2021     2020  
Reduction of net sales   $ 33,000     $ 36,000  
Increase in general and administrative expense for penalities     18,000       11,000  
Decrease in other income (expense) for interest expense     27,000       15,000  
Total effect of restatement items   $ 78,000     $ 62,000  

 

    March 31, 2021         March 31, 2020      

Three Months Ended

   As previously reported     Restated     As previously reported     Restated  
Services revenues   $ 5,419,000     $ 5,386,000     $ 4,436,000     $ 4,400,000  
Products revenues     —       —       246,000       246,000  
Total Net Sales     5,419,000       5,386,000       4,682,000       4,646,000  
                                 
Cost of services     4,457,000       4,457,000       3,382,000       3,382,000  
Cost of goods sold     —       —       172,000       172,000  
Impairment loss     —       —       159,000       159,000  
Total Cost of Sales     4,457,000       4,457,000       3,713,000       3,713,000  
Gross Profit     962,000       929,000       969,000       933,000  
                                 
Operating Expenses:                                
Selling     516,000       516,000       720,000       720,000  
Marketing     235,000       235,000       365,000       365,000  
General and administrative     1,919,000       1,937,000       993,000       1,004,000  
Total Operating Expenses     2,670,000       2,688,000       2,078,000       2,089,000  
Operating Loss     (1,708,000 )     (1,759,000 )     (1,109,000 )     (1,156,000 )
                                 
Gain on forgiveness of debt and accrued interest     1,062,000       1,062,000       —       —  
Other income (expense)     —       (27,000 )     24,000       9,000  
Loss Before Taxes     (646,000 )     (724,000 )     (1,085,000 )     (1,147,000 )
                                 
Income tax expense (benefit)     13,000       13,000       (222,000 )     (222,000 )
Net Loss   $ (659,000 )   $ (737,000 )   $ (863,000 )   $ (925,000 )
                                 
Net loss per share:                                
Basic   $ (0.38 )   $ (0.42 )   $ (0.51 )   $ (0.54 )
Diluted   $ (0.38 )   $ (0.42 )   $ (0.51 )   $ (0.54 )
                                 
Shares used in calculation of net loss per share:                                
Basic     1,751,000       1,751,000       1,724,000       1,724,000  
Diluted     1,751,000       1,751,000       1,724,000       1,724,000  

 

The following table sets forth the corrections in each of the individual line items affected in the balance sheet:

 

    March 31, 2021           December 31, 2020      
    As previously reported     Error correction     Restated     As previously reported     Error correction     Restated  
Accounts receivable, net   $ 4,726,000     $ 349,000     $ 5,075,000     $ 5,628,000     $ 229,000     $ 5,857,000  
Accrued liabilities - sales tax   $ -     $ 1,163,000     $ 1,163,000     $ -     $ 1,011,000     $ 1,011,000  
Accrued liabilities - other   $ 1,280,000     $ 290,000     $ 1,570,000     $ 827,000     $ 244,000     $ 1,071,000  
Accumulated deficit   $ 9,220,000     $ 1,104,000     $ 10,324,000     $ 8,561,000     $ 1,026,000     $ 9,587,000