| Restatement of Condensed Consolidated Balance Sheet and Related Statements of Operations and Comprehensive Loss and Cash Flows |
12. Restatement of Condensed Consolidated
Balance Sheet, Statement of Operations and Comprehensive Loss and Cash Flows
The requirement to restate the Company’s
condensed consolidated balance sheet as of September 30, 2016, and the related statements of operations and comprehensive loss
and cash flows for the period ended September 30, 2016, is due to the following:
| |
● |
Failure to record a on-time, non-cash $3.8 million charge
attributable to the deemed dividend related to the accretion of a discount on Series A convertible preferred stock upon
conversion into the Company’s common stock, which occurred in July 2016 and was included in the restated condensed
consolidated financial statements issued on April 19, 2017 (referred to as “Restatement #1 – Accretion of a
Discount” in the table below). |
| |
● |
Failure to record a derivative liability from the issuance of 1,054,167 common stock warrants during July 2016 that were previously recorded as equity (referred to as “Restatement #2 – Warrant Liability” in the table below) |
The impact of this change as of and for the
three and nine months periods ended September 30, 2016 is as follows (in thousands, except share and per share data):
| |
|
Three months ended September 30, 2016 |
|
| |
|
As
Previously Reported
|
|
|
Restatement #1 - Accretion of a Discount |
|
|
As Restated After Restatement #1 |
|
|
Restatement #2 - Warrant Liability |
|
|
As Restated After Restatement #1 and #2 |
|
| Total other expense, net |
|
$ |
(1,131 |
) |
|
$ |
- |
|
|
$ |
(1,131 |
) |
|
$ |
(849 |
) |
|
$ |
(1,980 |
) |
| Total net loss/comprehensive loss |
|
|
(4,338 |
) |
|
|
- |
|
|
|
(4,338 |
) |
|
|
(849 |
) |
|
|
(5,187 |
) |
| Deemed dividend related to beneficial conversion feature and accretion of a discount a Series A Preferred Stock |
|
|
(2,499 |
) |
|
|
(3,779 |
) |
|
|
(6,278 |
) |
|
|
- |
|
|
|
(6,278 |
) |
| Net loss attributable to common stockholders |
|
$ |
(6,837 |
) |
|
$ |
(3,779 |
) |
|
$ |
(10,616 |
) |
|
$ |
(849 |
) |
|
$ |
(11,465 |
) |
| Net loss per share attributable to common stockholders: Basic and diluted |
|
$ |
(3.56 |
) |
|
$ |
(1.97 |
) |
|
$ |
(5.53 |
) |
|
$ |
(0.44 |
) |
|
$ |
(5.97 |
) |
| Weighted average common shares outstanding: Basic and diluted |
|
|
1,920,745 |
|
|
|
- |
|
|
|
1,920,745 |
|
|
|
- |
|
|
|
1,920,745 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Common stock, $0.01 par value |
|
$ |
22 |
|
|
$ |
- |
|
|
$ |
22 |
|
|
|
|
|
|
$ |
22 |
|
| Additional paid-in capital |
|
|
226,630 |
|
|
|
- |
|
|
|
226,630 |
|
|
|
(4,973 |
) |
|
|
221,657 |
|
| Accumulated deficit |
|
|
(209,327 |
) |
|
|
- |
|
|
|
(209,327 |
) |
|
|
(849 |
) |
|
|
(210,176 |
) |
| Total stockholders’ equity |
|
$ |
17,325 |
|
|
$ |
- |
|
|
$ |
17,325 |
|
|
$ |
(5,822 |
) |
|
$ |
11,503 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Derivative Liabilities, current portion |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
5,822 |
|
|
$ |
5,822 |
|
| |
|
Nine months ended September 30, 2016 |
|
| |
|
As
Previously Reported
|
|
|
Restatement #1 – Accretion of a Discount |
|
|
As Restated After Restatement #1 |
|
|
Restatement #2 - Warrant Liability |
|
|
As Restated After Restatement #1 and #2 |
|
| Total other expense, net |
|
$ |
(4,598 |
) |
|
|
|
|
|
$ |
(4,598 |
) |
|
$ |
(849 |
) |
|
$ |
(5,447 |
) |
| Total net loss/comprehensive loss |
|
|
(12,790 |
) |
|
|
|
|
|
|
(12,790 |
) |
|
|
(849 |
) |
|
|
(13,639 |
) |
| Deemed dividend related to beneficial conversion feature and accretion of a discount a Series A Preferred Stock |
|
|
(2,499 |
) |
|
|
(3,779 |
) |
|
|
(6,278 |
) |
|
|
- |
|
|
|
(6,278 |
) |
| Net loss attributable to common stockholders |
|
$ |
(15,289 |
) |
|
$ |
(3,779 |
) |
|
$ |
(19,068 |
) |
|
$ |
(849 |
) |
|
$ |
(19,917 |
) |
| Net loss per share attributable to common stockholders: Basic and diluted |
|
$ |
(11.68 |
) |
|
$ |
(2.88 |
) |
|
$ |
(14.56 |
) |
|
$ |
(0.65 |
) |
|
$ |
(15.21 |
) |
| Weighted average common shares outstanding: Basic and diluted |
|
|
1,309,286 |
|
|
|
|
|
|
|
1,309,286 |
|
|
|
|
|
|
|
1,309,286 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Common stock, $0.01 par value |
|
$ |
22 |
|
|
$ |
- |
|
|
$ |
22 |
|
|
|
|
|
|
$ |
22 |
|
| Additional paid-in capital |
|
|
226,630 |
|
|
|
- |
|
|
|
226,630 |
|
|
|
(4,973 |
) |
|
|
221,657 |
|
| Accumulated deficit |
|
|
(209,327 |
) |
|
|
- |
|
|
|
(209,327 |
) |
|
|
(849 |
) |
|
|
(210,176 |
) |
| Total stockholders’ equity |
|
$ |
17,325 |
|
|
$ |
- |
|
|
$ |
17,325 |
|
|
$ |
(5,822 |
) |
|
$ |
11,503 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Derivative Liabilities, current portion |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
5,822 |
|
|
$ |
5,822 |
|
For the nine months ended September 30, 2016,
the condensed consolidated statement of cash flows changed from that which was previously reported as follows: A $571,000 positive
addback for offering costs was recorded to offset a $571,000 increase to net loss, with no net cash impact on cash flows from
operating activities. In addition, the allocation of proceeds among common stock, preferred stock and derivative liability changed,
with no net cash flow impact on cash flows from financing activities.
|