Restatement of Previously Issued Consolidated Financial Statements

12 Months Ended

Dec. 31, 2024

Accounting Changes and Error Corrections [Abstract]

Restatement of Previously Issued Consolidated Financial Statements

(3)

Restatement of Previously Issued Consolidated Financial Statements

The Company has restated its previously issued consolidated financial statements as of December 31, 2024 and 2023 and for the years then ended to correct errors in the determination and application of overhead burden rates used in inventory costing. The errors resulted in overstated raw materials and finished goods inventories, on a net basis after considering the overstatement of reserves for excess and obsolete inventories and understated cost of revenue. The correction decreased inventories, total assets and stockholders’ equity and increased accumulated deficit. The restatement has changed the Consolidated Financial Statements and Notes 1, 2, 5, 9 and 14.

The correction reduced net inventories by approximately $4.651 million and $1.515 million at December 31, 2024 and 2023, respectively. Net inventories as restated include reserves for excess and obsolete inventory of $1.657 million and $0.639 million, respectively. Cost of revenue increased by approximately $3.136 million and $0.547 million for the years ended December 31, 2024 and 2023, respectively.

The 2023 correction includes approximately $0.968 million of inventory overstatement that existed at December 31, 2022. The cumulative $0.968 million correction is reflected in beginning inventory and accumulated deficit for 2023, and the remaining $0.547 million correction was reflected in 2023 cost of revenue.

The restatement adjustments presented below do not impact previously reported provisions for income taxes of $227 and $6 for 2024 and 2023, however, components of deferred taxes and the related valuation allowance have been corrected in Note 9. Weighted-average basic and diluted common shares outstanding were unchanged.

The restatement did not affect actual cash receipts or payments. With respect to the consolidated statement of cash flows, the changes to net income (loss) and the year-over-year change in inventory balance offset each other, resulting in no change to net cash provided by (used in) operating activities. Net cash flows from investing and financing activities and beginning and ending cash balances were also unchanged.

Consolidated Balance Sheet
December 31, 2024

The following tables summarize the effects of the restatement. Amounts are in thousands, except per-share amounts.

	As Previously Reported			Restatement Adjustment			As Restated
Inventories, net	$	20,267		$	(4,651	)	$	15,616
Total current assets		29,348			(4,651	)		24,697
Total assets		50,002			(4,651	)		45,351
Accumulated deficit		(100,428	)		(4,651	)		(105,079	)
Total stockholders’ equity		14,946			(4,651	)		10,295
Total liabilities and stockholders’ equity		50,002			(4,651	)		45,351

Consolidated Statement of Operations
Year Ended December 31, 2024

	As Previously Reported		Restatement Adjustment			As Restated
Cost of revenue	$	36,159	$	3,136		$	39,295
Gross profit		16,188		(3,136	)		13,052
Income from operations		5,132		(3,136	)		1,996
Income before income taxes		4,462		(3,136	)		1,326
Net income		4,235		(3,136	)		1,099

Net Income (Loss) Per Common Share
Year Ended December 31, 2024

As Previously
Reported

Restatement

Adjustment

As Restated

Basic

0.07

(0.05

)

0.02

Diluted

0.07

(0.05

)

0.02

Consolidated Statement of Stockholders’ Equity
Year Ended December 31, 2024

	As Previously Reported			Restatement Adjustment			As Restated
Accumulated deficit at December 31, 2023	$	(104,663	)	$	(1,515	)	$	(106,178	)
Net income		4,235			(3,136	)		1,099
Accumulated deficit at December 31, 2024		(100,428	)		(4,651	)		(105,079	)
Total stockholders’ equity at December 31, 2024		14,946			(4,651	)		10,295

Consolidated Statement of Cash Flows
Year Ended December 31, 2024

	As Previously Reported			Restatement Adjustment			As Restated
Net income	$	4,235		$	(3,136	)	$	1,099
Change in inventories		(10,236	)		3,136			(7,100	)
Net cash provided by operating activities		1,971			—			1,971

Consolidated Balance Sheet
December 31, 2023

	As Previously Reported			Restatement Adjustment			As Restated
Inventories, net	$	10,031		$	(1,515	)	$	8,516
Total current assets		16,302			(1,515	)		14,787
Total assets		32,881			(1,515	)		31,366
Accumulated deficit		(104,663	)		(1,515	)		(106,178	)
Total stockholders’ equity		1,902			(1,515	)		387
Total liabilities and stockholders’ equity		32,881			(1,515	)		31,366

Consolidated Statement of Operations
Year Ended December 31, 2023

	As Previously Reported			Restatement Adjustment			As Restated
Cost of revenue	$	29,472		$	547		$	30,019
Gross profit		7,825			(547	)		7,278
Loss from operations		(3,546	)		(547	)		(4,093	)
Loss before income taxes		(4,384	)		(547	)		(4,931	)
Net loss		(4,390	)		(547	)		(4,937	)

Net Income (Loss) Per Common Share
Year Ended December 31, 2023

As Previously
Reported

Restatement

Adjustment

As Restated

Basic

(0.09

)

(0.01

)

(0.10

)

Diluted

(0.09

)

(0.01

)

(0.10

)

Consolidated Statement of Stockholders’ Equity
Year Ended December 31, 2023

	As Previously Reported			Restatement Adjustment			As Restated
Accumulated deficit at December 31, 2022, after adoption of the expected-credit-loss standard	$	(100,273	)	$	(968	)	$	(101,241	)
Net loss		(4,390	)		(547	)		(4,937	)
Accumulated deficit at December 31, 2023		(104,663	)		(1,515	)		(106,178	)
Total stockholders’ equity at December 31, 2023		1,902			(1,515	)		387

Consolidated Statement of Cash Flows
Year Ended December 31, 2023

	As Previously Reported			Restatement Adjustment			As Restated
Net loss	$	(4,390	)	$	(547	)	$	(4,937	)
Change in inventories		(1,192	)		547			(645	)
Net cash used in operating activities		(2,006	)		—			(2,006	)