| Restatement of Prior Period Financial Statements |
Note 20 — Restatement of Prior Period Financial Statements
Subsequent to the issuance of the Company’s previously issued financial statements, the Company identified errors related to the accounting presentation of certain advances made to David Wilcox, the Company’s sole managing and voting member prior to the Business Combination and majority shareholder following the Business Combination, which were used to fund EMT Asia Co., Ltd., a related-party entity wholly owned by Mr. Wilcox. Management determined that such advances were incorrectly presented as Note receivable — related party and should have been presented as contra-equity within additional paid-in capital. Management also determined that certain expenses incurred by EMT Asia on behalf of the Company should have been recognized as expenses of the Company. The Company had previously recorded an allowance for credit losses in connection with the collection uncertainty concerning the Note receivable — related party, thereby recognizing expense in the periods of issuance. The following tables reflect the effects of the corrections on all affected line items of the Company’s previously reported financial amounts presented in the these Condensed consolidated financial statements. The correction did not impact cash and cash equivalents, total liabilities, or total net cash used in operating activities for the periods presented.
Audited Condensed Consolidated Balance Sheet
|
in thousands
|
|
December 31,
2025
Previously
Reported
|
|
Adjustments
|
|
December 31,
2025
As Corrected
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prepaid expenses and other current assets
|
|
$
|
59 |
|
|
$
|
(11 |
)
|
|
$
|
48 |
|
|
Note receivable – related party
|
|
|
4,167 |
|
|
|
(4,167 |
)
|
|
|
—
|
|
|
Total current assets
|
|
|
17,404 |
|
|
|
(4,179 |
)
|
|
|
13,226 |
|
|
Total assets
|
|
$
|
26,670 |
|
|
$
|
(4,179 |
)
|
|
$
|
22,491 |
|
|
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional paid-in capital
|
|
$
|
—
|
|
|
$
|
(2,329 |
)
|
|
$
|
(2,329 |
)
|
|
Accumulated deficit
|
|
|
(676,957 |
)
|
|
|
(1,850 |
)
|
|
|
(678,807 |
)
|
|
Total members’ deficit
|
|
|
(650,689 |
)
|
|
|
(4,179 |
)
|
|
|
(654,868 |
)
|
|
Total liabilities and members’ deficit
|
|
$
|
26,670 |
|
|
$
|
(4,179 |
)
|
|
$
|
22,491 |
|
Unaudited Condensed Consolidated Statements of Operations
|
in thousands
|
|
March 31,
2025
Previously
Reported
|
|
Adjustments
|
|
March 31,
2025
As Corrected
|
|
General and administrative expenses(1)
|
|
$
|
1,851 |
|
|
$
|
827 |
|
|
$
|
2,678 |
|
|
Loss from operations
|
|
|
(1,975 |
)
|
|
|
(827 |
)
|
|
|
(2,802 |
)
|
|
Provision for credit losses
|
|
|
(1,310 |
)
|
|
|
840 |
|
|
|
(470 |
)
|
|
Total other expense, net
|
|
|
(16,035 |
)
|
|
|
840 |
|
|
|
(15,195 |
)
|
|
Loss before income taxes
|
|
|
(18,010 |
)
|
|
|
13 |
|
|
|
(17,996 |
)
|
|
Net loss
|
|
$
|
(18,010 |
)
|
|
$
|
13 |
|
|
$
|
(17,996 |
)
|
Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Deficit
|
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Deficit
|
|
Total
Stockholders’
Deficit
|
|
As Previously Reported
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2024
|
|
$
|
—
|
|
|
$
|
(58,962 |
)
|
|
$
|
(49,374 |
)
|
|
Net loss
|
|
$
|
—
|
|
|
$
|
(18,009 |
)
|
|
$
|
(18,009 |
)
|
|
Balance March 31, 2025
|
|
$
|
—
|
|
|
$
|
(76,971 |
)
|
|
$
|
(66,134 |
)
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2024
|
|
$
|
261 |
|
|
$
|
(1,931 |
)
|
|
$
|
(1,625 |
)
|
|
Investor loan advances and deemed contributions
|
|
$
|
(853 |
)
|
|
$
|
—
|
|
|
$
|
(853 |
)
|
|
Net loss
|
|
$
|
—
|
|
|
$
|
13 |
|
|
$
|
13 |
|
|
Balance March 31, 2025
|
|
$
|
(592 |
)
|
|
$
|
(1,918 |
)
|
|
$
|
(2,465 |
)
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
As Corrected
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2024
|
|
$
|
261 |
|
|
$
|
(60,893 |
)
|
|
$
|
(51,000 |
)
|
|
Investor loan advances and deemed contributions
|
|
|
(853 |
)
|
|
|
—
|
|
|
|
(853 |
)
|
|
Net loss
|
|
|
—
|
|
|
|
(17,996 |
)
|
|
|
(17,996 |
)
|
|
Balance March 31, 2025
|
|
$
|
(592 |
)
|
|
$
|
(78,889 |
)
|
|
$
|
(68,599 |
)
|
Unaudited Condensed Consolidated Statement of Cash Flows
|
in thousands
|
|
March 31,
2025
Previously
Reported
|
|
Adjustments
|
|
March 31,
2025
As Corrected
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(18,010 |
)
|
|
$
|
13 |
|
|
$
|
(17,996 |
)
|
|
Allowance for credit losses
|
|
|
1,310 |
|
|
|
(840 |
)
|
|
|
470 |
|
|
Investor expenses incurred on behalf of Company
|
|
|
—
|
|
|
|
827 |
|
|
|
827 |
|
|
Net cash used in operating activities
|
|
|
(2,063 |
)
|
|
|
—
|
|
|
|
(2,063 |
)
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advance – note receivable related parties
|
|
|
(1,680 |
)
|
|
|
1,680 |
|
|
|
—
|
|
|
Net cash used in investing activities
|
|
|
(2,154 |
)
|
|
|
1,680 |
|
|
|
(474 |
)
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Constructive disbursements to related party
|
|
|
—
|
|
|
|
(1,680 |
)
|
|
|
(1,680 |
)
|
|
Net cash provided by financing activities
|
|
|
5,335 |
|
|
|
(1,680 |
)
|
|
|
3,655 |
|
|