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Revision of first and second quarter 2024 unaudited results
 9 Months Ended
Sep. 30, 2024
Revision of first and second quarter 2024 unaudited results  
Revision of first and second quarter 2024 unaudited results

 15. Revision of first and second quarter 2024 unaudited results:

 

During the third quarter ended September 30, 2024, the Company identified certain misstatements in the first and second quarter consolidated financial statements. The Company assessed the applicable guidance issued by the Securities and Exchange Commission (SEC) and the Financial Accounting Standards Board (FASB) and concluded these misstatements were not material, individually or in the aggregate, to the Company’s unaudited condensed consolidated financial statements for the aforementioned interim periods. However, to facilitate comparisons among periods, the Company has decided to revise its previously issued first and second quarter unaudited condensed consolidated financial information. The following tables present the impact of the errors on the previously reported condensed consolidated financial statements:

 

 

 

Three Months Ended March 31, 2024

 

 

 

As Previously Reported

 

 

Adjustment

 

 

As Revised

 

Cost of goods sold (1)

 

$6,139,000

 

 

$150,000

 

 

$6,289,000

 

Loss from continuing operations before income taxes

 

 

(1,683,000)

 

 

150,000

 

 

 

(1,833,000)

Net loss from continuing operations

 

 

(1,336,000)

 

 

150,000

 

 

 

(1,486,000)

Net (loss) income including noncontrolling interest

 

 

(1,264,000)

 

 

150,000

 

 

 

(1,414,000)

Net (loss) income attributable to Lendway, Inc.

 

 

(1,041,000)

 

 

122,000

 

 

 

(1,163,000)

Net (loss) income attributable to noncontrolling interest

 

 

(223,000)

 

 

28,000

 

 

 

(251,000)

Comprehensive (loss) income attributable to Lendway, Inc.

 

 

(1,038,000)

 

 

122,000

 

 

 

(1,160,000)

Net (loss) income per basic and diluted share attributable to Lendway, Inc.

 

$(0.73)

 

$0.07

 

 

$(0.80)

Note receivable

 

$700,000

 

 

$(150,000)

 

$550,000

 

 

 

Three Months Ended June 30, 2024

 

 

 

As Previously Reported

 

 

Adjustment

 

 

As Revised

 

Revenue (2)

 

$16,780,000

 

 

$140,000

 

 

$16,920,000

 

Cost of goods sold (3)

 

 

12,803,000

 

 

 

211,000

 

 

 

13,014,000

 

Selling, general and administrative expenses (4)

 

 

4,095,000

 

 

 

(354,000)

 

 

3,741,000

 

Loss from continuing operations before income taxes

 

 

(1,082,000)

 

 

(283,000)

 

 

(799,000)

Net loss from continuing operations

 

 

(881,000)

 

 

(283,000)

 

 

(598,000)

Net (loss) income including noncontrolling interest

 

 

(817,000)

 

 

(283,000)

 

 

(534,000)

Net (loss) income attributable to Lendway, Inc.

 

 

(745,000)

 

 

(230,000)

 

 

(515,000)

Net (loss) income attributable to noncontrolling interest

 

 

(72,000)

 

 

(53,000)

 

 

(19,000)

Comprehensive (loss) income including noncontrolling interest

 

 

(702,000)

 

 

(283,000)

 

 

(419,000)

Comprehensive (loss) income attributable to Lendway, Inc.

 

 

(710,000)

 

 

(230,000)

 

 

(480,000)

Net (loss) income per basic and diluted share attributable to Lendway, Inc.

 

$(0.42)

 

$(0.13)

 

$(0.29)

Accounts receivable, net

 

$3,306,000

 

 

$140,000

 

 

$3,446,000

 

Inventories, net

 

 

6,973,000

 

 

 

(211,000)

 

 

6,762,000

 

Accrued expenses and other current liabilities

 

 

2,092,000

 

 

 

(354,000)

 

 

1,738,000

 

Note receivable (5)

 

 

250,000

 

 

 

(150,000)

 

 

100,000

 

 

 

 

Six Months Ended June 30, 2024

 

 

 

As Previously Reported

 

 

Adjustment

 

 

As Revised

 

Revenue

 

$24,813,000

 

 

$140,000

 

 

$24,953,000

 

Cost of goods sold (3)

 

 

18,942,000

 

 

 

361,000

 

 

 

19,303,000

 

Selling, general and administrative expenses (4)

 

 

7,483,000

 

 

 

(354,000)

 

 

7,129,000

 

Loss from continuing operations before income taxes

 

 

(2,765,000)

 

 

(133,000)

 

 

(2,632,000)

Net loss from continuing operations

 

 

(2,217,000)

 

 

(133,000)

 

 

(2,084,000)

Net (loss) income including noncontrolling interest

 

 

(2,081,000)

 

 

(133,000)

 

 

(1,948,000)

Net (loss) income attributable to Lendway, Inc.

 

 

(1,786,000)

 

 

(108,000)

 

 

(1,678,000)

Net (loss) income attributable to noncontrolling interest

 

 

(295,000)

 

 

(25,000)

 

 

(270,000)

Comprehensive (loss) income including noncontrolling interest

 

 

(1,740,000)

 

 

(133,000)

 

 

(1,607,000)

Comprehensive (loss) income attributable to Lendway, Inc.

 

 

(1,749,000)

 

 

(108,000)

 

 

(1,641,000)

Net (loss) income per basic and diluted share attributable to Lendway, Inc.

 

$(1.01)

 

$(0.06)

 

$(0.95)

 

 

 

(1)

The Company did not record non-cash rent expense for the month of March 2024. This adjustment impacts the three months ended March 31, 2024 and the six months ended June 30, 2024.

 

(2)

The Company identified a timing issue whereby product received by the customer before June 30, 2024 was recorded in July 2024, resulting in an understatement of revenue and cost of good sold in the three and six months ended June 30, 2024.

 

(3)

Based on an inventory count performed in the third quarter of 2024, management noted the inventory balance at June 30, 2024 was overstated, which results in cost of goods sold being understated.

 

(4)

Management over accrued for certain expenses resulting in an overstatement of selling, general and administrative costs in the three and six months ended June 30, 2024.

 

(5)

Rent expense was properly stated in the three months ended June 30, 2024, but the note was overstated as of June 30, 2024 due to non-cash rent not being recorded in March 2024.