| Schedule of Restatement of the Consolidated Annual Financial Statements |
he effects of the restatement on the Company's previously filed consolidated balance sheet for the year ended December 31, 2023 are as follows:
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|
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|
CAMBIUM NETWORKS CORPORATION |
|
CONSOLIDATED BALANCE SHEET |
|
(In thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2023 |
|
|
|
As Reported |
|
|
Adjustment |
|
|
As Restated |
|
|
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
|
Cash |
|
$ |
18,710 |
|
|
$ |
— |
|
|
$ |
18,710 |
|
Receivables, net of allowance for credit losses of $2,551 (iii) (b) (c) |
|
|
64,103 |
|
|
|
(7,850 |
) |
|
|
56,253 |
|
Inventories, net (ii) (iv) (b) |
|
|
66,878 |
|
|
|
1,200 |
|
|
|
68,078 |
|
Income taxes receivable |
|
|
222 |
|
|
|
— |
|
|
|
222 |
|
Prepaid expenses (viii) |
|
|
6,589 |
|
|
|
(2,128 |
) |
|
|
4,461 |
|
Other current assets (ii) (b) |
|
|
6,069 |
|
|
|
1,613 |
|
|
|
7,682 |
|
Total current assets |
|
|
162,571 |
|
|
|
(7,165 |
) |
|
|
155,406 |
|
Noncurrent assets |
|
|
|
|
|
|
|
|
|
Property and equipment, net |
|
|
12,879 |
|
|
|
— |
|
|
|
12,879 |
|
Software, net |
|
|
11,985 |
|
|
|
— |
|
|
|
11,985 |
|
Operating lease right-of-use assets |
|
|
7,894 |
|
|
|
— |
|
|
|
7,894 |
|
Intangible assets, net |
|
|
7,675 |
|
|
|
— |
|
|
|
7,675 |
|
Goodwill |
|
|
9,842 |
|
|
|
— |
|
|
|
9,842 |
|
Deferred tax assets, net (vii) |
|
|
3,694 |
|
|
|
(3,694 |
) |
|
|
— |
|
Other noncurrent assets (viii) |
|
|
1,335 |
|
|
|
2,128 |
|
|
|
3,463 |
|
TOTAL ASSETS |
|
$ |
217,875 |
|
|
$ |
(8,731 |
) |
|
$ |
209,144 |
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
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Current liabilities |
|
|
|
|
|
|
|
|
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Accounts payable |
|
$ |
19,120 |
|
|
$ |
— |
|
|
$ |
19,120 |
|
Accrued liabilities (i) (b) (c) |
|
|
47,069 |
|
|
|
(7,481 |
) |
|
|
39,588 |
|
Employee compensation (b) |
|
|
5,071 |
|
|
|
(83 |
) |
|
|
4,988 |
|
Current portion of long-term debt, net |
|
|
3,186 |
|
|
|
— |
|
|
|
3,186 |
|
Deferred revenues |
|
|
8,765 |
|
|
|
— |
|
|
|
8,765 |
|
Other current liabilities (ii) (viii) (b) |
|
|
13,117 |
|
|
|
6,721 |
|
|
|
19,838 |
|
Total current liabilities |
|
|
96,328 |
|
|
|
(843 |
) |
|
|
95,485 |
|
Noncurrent liabilities |
|
|
|
|
|
|
|
|
|
Long-term debt, net |
|
|
21,926 |
|
|
|
— |
|
|
|
21,926 |
|
Deferred revenues |
|
|
10,473 |
|
|
|
— |
|
|
|
10,473 |
|
Noncurrent operating lease liabilities |
|
|
6,595 |
|
|
|
— |
|
|
|
6,595 |
|
Other noncurrent liabilities (viii) (b) |
|
|
1,619 |
|
|
|
11,917 |
|
|
|
13,536 |
|
Total liabilities |
|
|
136,941 |
|
|
|
11,074 |
|
|
|
148,015 |
|
Commitments and contingencies (Note 14) |
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Shareholders' equity |
|
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|
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|
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|
Share capital; $0.0001 par value; 500,000,000 shares authorized; 28,095,144 shares issued and 27,834,908 outstanding |
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3 |
|
|
|
— |
|
|
|
3 |
|
Additional paid in capital |
|
|
152,768 |
|
|
|
— |
|
|
|
152,768 |
|
Treasury shares, at cost, 260,236 shares |
|
|
(5,624 |
) |
|
|
— |
|
|
|
(5,624 |
) |
Accumulated deficit (i) (ii) (iii) (iv) (v) (vii) (b) |
|
|
(64,598 |
) |
|
|
(19,805 |
) |
|
|
(84,403 |
) |
Accumulated other comprehensive loss |
|
|
(1,615 |
) |
|
|
— |
|
|
|
(1,615 |
) |
Total shareholders' equity |
|
|
80,934 |
|
|
|
(19,805 |
) |
|
|
61,129 |
|
TOTAL LIABILITIES AND EQUITY |
|
$ |
217,875 |
|
|
$ |
(8,731 |
) |
|
$ |
209,144 |
|
The effects of the adjustments made to the Company's previously filed consolidated statements of operations for the year ended December 31, 2023 as a result of these matters are shown in the table below.
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CAMBIUM NETWORKS CORPORATION |
|
CONSOLIDATED STATEMENT OF OPERATIONS AND OTHER COMPREHENSIVE LOSS |
|
(In thousands, except share and per share amounts) |
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|
Year ended December 31, 2023 |
|
|
|
As Reported |
|
|
Adjustment |
|
|
As Restated |
|
|
|
|
|
|
|
|
|
|
|
Revenues (i) (ii) (iii) (v) (b) |
|
|
|
|
|
|
|
|
|
Product |
|
$ |
201,567 |
|
|
$ |
6,572 |
|
|
$ |
208,139 |
|
Subscriptions and services |
|
|
18,628 |
|
|
|
— |
|
|
|
18,628 |
|
Total revenues |
|
|
220,195 |
|
|
|
6,572 |
|
|
|
226,767 |
|
Cost of revenues (i) (ii) (iv) |
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|
|
|
|
|
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Product |
|
|
142,751 |
|
|
|
(1,436 |
) |
|
|
141,315 |
|
Subscriptions and services |
|
|
8,613 |
|
|
|
— |
|
|
|
8,613 |
|
Total cost of revenues |
|
|
151,364 |
|
|
|
(1,436 |
) |
|
|
149,928 |
|
Gross profit: |
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|
|
|
|
|
|
|
Product |
|
|
58,816 |
|
|
|
8,008 |
|
|
|
66,824 |
|
Subscriptions and services |
|
|
10,015 |
|
|
|
— |
|
|
|
10,015 |
|
Total Gross profit |
|
|
68,831 |
|
|
|
8,008 |
|
|
|
76,839 |
|
Operating expenses |
|
|
|
|
|
|
|
|
|
Research and development |
|
|
53,478 |
|
|
|
— |
|
|
|
53,478 |
|
Sales and marketing (b) |
|
|
42,599 |
|
|
|
307 |
|
|
|
42,906 |
|
General and administrative (iii) (b) |
|
|
27,398 |
|
|
|
667 |
|
|
|
28,065 |
|
Depreciation and amortization |
|
|
6,210 |
|
|
|
— |
|
|
|
6,210 |
|
Impairment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total operating expenses |
|
|
129,685 |
|
|
|
974 |
|
|
|
130,659 |
|
Operating loss |
|
|
(60,854 |
) |
|
|
7,034 |
|
|
|
(53,820 |
) |
Interest expense, net |
|
|
2,521 |
|
|
|
— |
|
|
|
2,521 |
|
Other expense, net |
|
|
271 |
|
|
|
— |
|
|
|
271 |
|
Loss before income taxes |
|
|
(63,646 |
) |
|
|
7,034 |
|
|
|
(56,612 |
) |
Provision for income taxes (vii) |
|
|
13,774 |
|
|
|
3,694 |
|
|
|
17,468 |
|
Net loss (i) (ii) (iii) (iv) (v) (vii) (b) |
|
$ |
(77,420 |
) |
|
$ |
3,340 |
|
|
$ |
(74,080 |
) |
|
|
|
|
|
|
|
|
|
|
Loss per share |
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(2.81 |
) |
|
$ |
0.12 |
|
|
$ |
(2.69 |
) |
Diluted |
|
$ |
(2.81 |
) |
|
$ |
0.12 |
|
|
$ |
(2.69 |
) |
Weighted-average number of shares outstanding to compute net loss per share |
|
|
|
|
|
|
|
|
|
Basic |
|
|
27,519,476 |
|
|
|
— |
|
|
|
27,519,476 |
|
Diluted |
|
|
27,519,476 |
|
|
|
— |
|
|
|
27,519,476 |
|
Comprehensive income (loss) |
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(77,420 |
) |
|
$ |
3,340 |
|
|
$ |
(74,080 |
) |
Foreign currency translation adjustment |
|
|
(88 |
) |
|
|
— |
|
|
|
(88 |
) |
Comprehensive income (loss) |
|
$ |
(77,508 |
) |
|
$ |
3,340 |
|
|
$ |
(74,168 |
) |
|
|
|
|
|
|
|
|
|
|
The effects of the restatements on the Company's consolidated statement of shareholders' equity for the year ended December 31, 2023 were only to the amounts recorded for accumulated equity (deficit) due to the change in net loss for the period and is noted in the consolidated statement of operations and consolidated balance sheet shown above. The effects of the restatements on the Company's consolidated statement of cash flows for the year ended December 31, 2023 is as follows:
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|
CAMBIUM NETWORKS CORPORATION |
|
CONSOLIDATED STATEMENT OF CASH FLOWS |
|
(In thousands) |
|
|
|
|
|
Year ended December 31, 2023 |
|
|
|
As Reported |
|
|
Adjustment |
|
|
As Restated |
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
Net loss (i) (ii) (iii) (iv) (v) (vii) (b) |
|
$ |
(77,420 |
) |
|
$ |
3,340 |
|
|
$ |
(74,080 |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
|
|
|
Depreciation |
|
|
4,341 |
|
|
|
— |
|
|
|
4,341 |
|
Amortization of software and intangible assets |
|
|
4,684 |
|
|
|
— |
|
|
|
4,684 |
|
Amortization of deferred debt issuance costs |
|
|
334 |
|
|
|
— |
|
|
|
334 |
|
Share-based compensation |
|
|
11,593 |
|
|
|
— |
|
|
|
11,593 |
|
Deferred income taxes (vi) |
|
|
9,088 |
|
|
|
3,694 |
|
|
|
12,782 |
|
Provision for inventory excess and obsolescence (iv) (b) |
|
|
16,595 |
|
|
|
(2,525 |
) |
|
|
14,070 |
|
Provision for estimated credit losses (iii) |
|
|
(294 |
) |
|
|
750 |
|
|
|
456 |
|
Other |
|
|
(144 |
) |
|
|
— |
|
|
|
(144 |
) |
Change in assets and liabilities: |
|
|
|
|
|
|
|
|
|
Receivables (i) (iii) (v) |
|
|
32,048 |
|
|
|
5,369 |
|
|
|
37,417 |
|
Inventories (ii) |
|
|
(26,405 |
) |
|
|
(1,427 |
) |
|
|
(27,832 |
) |
Prepaid expenses (viii) |
|
|
5,255 |
|
|
|
(3,205 |
) |
|
|
2,050 |
|
Income taxes receivable |
|
|
(97 |
) |
|
|
— |
|
|
|
(97 |
) |
Accounts payable (b) (d) |
|
|
(13,637 |
) |
|
|
671 |
|
|
|
(12,966 |
) |
Accrued employee compensation (b) |
|
|
(2,187 |
) |
|
|
217 |
|
|
|
(1,970 |
) |
Accrued liabilities (i) (vii) (b) |
|
|
12,509 |
|
|
|
(13,064 |
) |
|
|
(555 |
) |
Other assets and liabilities (iv) (v) (viii) |
|
|
6,785 |
|
|
|
6,436 |
|
|
|
13,221 |
|
Net cash used in operating activities |
|
|
(16,952 |
) |
|
|
256 |
|
|
|
(16,696 |
) |
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
Purchases of property and equipment (d) |
|
|
(4,589 |
) |
|
|
(256 |
) |
|
|
(4,845 |
) |
Purchases of software |
|
|
(6,636 |
) |
|
|
— |
|
|
|
(6,636 |
) |
Net cash used in investing activities |
|
|
(11,225 |
) |
|
|
(256 |
) |
|
|
(11,481 |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
Repayment of term loan |
|
|
(2,625 |
) |
|
|
— |
|
|
|
(2,625 |
) |
Payment of debt issuance costs |
|
|
(122 |
) |
|
|
— |
|
|
|
(122 |
) |
Issuance of ordinary shares under ESPP |
|
|
1,680 |
|
|
|
— |
|
|
|
1,680 |
|
Taxes paid from shares withheld |
|
|
(700 |
) |
|
|
— |
|
|
|
(700 |
) |
Proceeds from share option exercises |
|
|
498 |
|
|
|
— |
|
|
|
498 |
|
Net cash used in financing activities |
|
|
(1,269 |
) |
|
|
— |
|
|
|
(1,269 |
) |
Effect of exchange rate on cash |
|
|
(6 |
) |
|
|
— |
|
|
|
(6 |
) |
Net decrease in cash |
|
|
(29,452 |
) |
|
|
— |
|
|
|
(29,452 |
) |
Cash, beginning of period |
|
|
48,162 |
|
|
|
— |
|
|
|
48,162 |
|
Cash, end of period |
|
$ |
18,710 |
|
|
$ |
— |
|
|
$ |
18,710 |
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
|
|
|
Income taxes paid, net of refunds received |
|
$ |
4,923 |
|
|
$ |
— |
|
|
$ |
4,923 |
|
Interest paid |
|
$ |
1,840 |
|
|
$ |
— |
|
|
$ |
1,840 |
|
|
|
|
|
|
|
|
|
|
|
Non-cash investing and financing activities: |
|
|
|
|
|
|
|
|
|
Increase in property, equipment and software unpaid or accrued in liabilities (d) |
|
$ |
1,466 |
|
|
$ |
(256 |
) |
|
$ |
1,210 |
|
Operating lease right-of-use assets obtained in exchange for operating lease liabilities |
|
$ |
6,027 |
|
|
$ |
— |
|
|
$ |
6,027 |
|
The following table sets forth the effects of the restatement adjustments on revenues, (loss) income before income taxes and net (loss) income in the consolidated statements of operations for the year ended December 31, 2023.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the year ended December 31, 2023 |
|
(in thousands) |
Identifier in statement |
|
Revenues |
|
|
Loss before income taxes |
|
|
Net Loss |
|
Previously reported |
|
|
$ |
220,195 |
|
|
$ |
(63,646 |
) |
|
$ |
(77,420 |
) |
Restatement adjustments: |
|
|
|
|
|
|
|
|
|
|
Revenue adjustment - customer incentives |
(i) |
|
|
289 |
|
|
|
289 |
|
|
|
289 |
|
Revenue adjustment - sales returns |
(ii) |
|
|
10,444 |
|
|
|
8,218 |
|
|
|
8,218 |
|
Estimate for allowance for credit losses |
(iii) |
|
|
(102 |
) |
|
|
(852 |
) |
|
|
(852 |
) |
Estimate for excess and obsolete inventory |
(iv) |
|
|
— |
|
|
|
2,556 |
|
|
|
2,556 |
|
Revenue adjustment - non-standard contract |
(v) |
|
|
(3,792 |
) |
|
|
(2,395 |
) |
|
|
(2,395 |
) |
Deferred tax adjustments |
(vii) |
|
|
— |
|
|
|
— |
|
|
|
(3,694 |
) |
Prior period uncorrected misstatements and out of period adjustments |
(b) |
|
|
(267 |
) |
|
|
(782 |
) |
|
|
(782 |
) |
Net restatement adjustments |
|
|
|
6,572 |
|
|
|
7,034 |
|
|
|
3,340 |
|
Restated |
|
|
$ |
226,767 |
|
|
$ |
(56,612 |
) |
|
$ |
(74,080 |
) |
|
|
|
|
|
|
|
|
|
|
|
|