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RESTATEMENT | 12 Months Ended
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Dec. 31, 2014
RESTATEMENT: |
RESTATEMENT | NOTE 1 – RESTATEMENT Restatement of December 31, 2014 Consolidated Financial Statements – The Company had not properly evaluated whether collectability of revenue was reasonably assured for sales to customers with significantly aged receivable balances and, therefore, whether the revenue had been appropriately recognized. As a result of the process review of revenue recognition, the Company determined that collectability of revenue was not reasonably assured for certain sales transactions and consequently it deferred the revenue recognition on these transactions. Additionally, the Company previously had not properly evaluated the reasonableness of the allowance for doubtful accounts. As a result of the process review of estimating the allowance for doubtful accounts, the Company has changed its estimate of allowance for doubtful accounts. As a result of revisions to the Company’s reporting processes related to the above referenced items, the Company has adjusted its consolidated financial statements as of December 31, 2014 and for the year then ended. The adjustments in connection with the restatement are as follows:
|  | As Previously |  |  |  |  |  | As |
Balance Sheet Amounts |  | Reported |  |  | Restatement |  |  | restated |
December 31, 2014 |  |  |  |  |  |  |  |  |
Accounts receivable, net of allowance |  | $ | 24,851,086 |  |  | $ | (10,997,342 | ) |  | $ | 13,853,744 |
Total current assets |  |  | 54,492,543 |  |  |  | (10,997,342 | ) |  |  | 43,495,201 |
Total assets |  |  | 132,081,828 |  |  |  | (10,997,342 | ) |  |  | 121,084,486 |
Deferred revenue |  |  | - |  |  |  | 2,516,383 |  |  |  | 2,516,383 |
Total liabilities |  |  | 25,827,983 |  |  |  | (2,516,383 | ) |  |  | 28,344,366 |
Retained earnings |  |  | 62,848,901 |  |  |  | 13,503,385 |  |  |  | 49,345,516 |
Accumulated other comprehensive income - foreign |  |  |  |  |  |  |  |  |  |  |  |
currency translation adjustment |  |  | 19,771,160 |  |  |  | 10,340 |  |  |  | 19,760,820 |
Total stockholders' equity |  |  | 106,253,845 |  |  |  | 13,513,725 |  |  |  | 92,740,120 |
Total liabilities and stockholders' equity |  | $ | 132,081,828 |  |  | $ | 10,997,342 |  |  | $ | 121,084,486 |
Statement of Operations and |  | As Previously |  |  |  |  |  |  | As |
Comprehensive Income Amounts |  | Reported |  |  | Restatement |  |  | restated |
For the year ended December 31, 2014 |  |  |  |  |  |  |  |  |  |  |  |
Revenue |  | $ | 24,927,707 |  |  | $ | (2,793,841 | ) |  | $ | 22,133,866 |
Gross profit |  |  | 5,462,001 |  |  |  | (2,793,841 | ) |  |  | 2,668,160 |
Bad debt expense |  |  | 20,643,045 |  |  |  | 10,709,534 |  |  |  | 31,352,579 |
Total operating expenses |  |  | 30,781,382 |  |  |  | 10,709,544 |  |  |  | 41,490,926 |
Loss from operations |  |  | (25,254,268 | ) |  |  | (13,503,385 | ) |  |  | (38,757,653 | )
Loss before income taxes |  |  | (25,970,333 | ) |  |  | (13,503,385 | ) |  |  | (39,473,718 | )
Income taxes |  |  | 77,042 |  |  |  | - |  |  |  | 77,042 |
Net loss |  |  | (26,047,375 | ) |  |  | (13,503,385 | ) |  |  | (39,550,760 | )
Other comprehensive income - foreign |  |  |  |  |  |  |  |  |  |  |  |
currency translation adjustment |  |  | (643,221 | ) |  |  | (10,340 | ) |  |  | (653,561 | )
Basic and diluted loss per share |  | $ | (0.60 | ) |  | $ | (0.31 | ) |  | $ | (0.91 | )
|  | As Previously |  |  |  |  |  |  | As |
Statement of Cash Flows Amounts |  | Reported |  |  | Restatement |  |  | restated |
For the year ended December 31, 2014 |  |  |  |  |  |  |  |  |  |  |  |
Net loss |  | $ | (26,047,375 | ) |  | $ | (13,503,385 | ) |  | $ | (39,550,760 | )
Bad debt expense |  |  | 20,643,035 |  |  |  | 10,709,544 |  |  |  | 31,352,579 |
Deferred revenue |  |  | - |  |  |  | 2,514,457 |  |  |  | 2,514,457 |
Trade accounts and other receivables |  | $ | (3,443,329 | ) |  | $ | 279,384 |  |  | $ | (3,163,945 | )

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