| Restatement of Condensed Consolidated Balance Sheet and Related Statements of Operations and Cash Flows |
11. Restatement of Condensed Consolidated
Balance Sheet and Related Statements of Operations and Cash Flows
The requirement to restate the Company’s
condensed consolidated balance sheet as of September 30, 2017 and the related statements of operations and cash flows for the three
and nine month periods ended September 30, 2017 is due to the failure to record a derivative liability from the issuance of
1,054,167 common stock warrants during July 2016 and the issuance of 333,750 common stock warrants during January 2017 that were
previously recorded as equity. The impact of this change for the three and nine month periods ended September 30,
2017 is as follows (in thousands, except share and per share data):
| |
|
Three months ended September 30, 2017 |
|
| |
|
As Previously
Reported
|
|
|
As Restated |
|
| Total other income (expense), net |
|
$ |
(259 |
) |
|
$ |
487 |
|
| Total net loss |
|
|
(2,815 |
) |
|
|
(2,069 |
) |
| Deemed dividend related to beneficial conversion feature and accretion of a discount on Series A Preferred Stock |
|
|
- |
|
|
|
- |
|
| Net loss attributable to common stockholders |
|
$ |
(2,815 |
) |
|
$ |
(2,069 |
) |
Net loss per share attributable to common stockholders:
Basic and diluted
|
|
$ |
(0.93 |
) |
|
$ |
(0.68 |
) |
Weighted average common shares outstanding:
Basic and diluted
|
|
|
3,022,073 |
|
|
|
3,022,073 |
|
| Common stock, $0.01 par value |
|
$ |
30 |
|
|
$ |
30 |
|
| Additional paid-in capital |
|
|
231,647 |
|
|
|
225,733 |
|
| Accumulated deficit |
|
|
(220,206 |
) |
|
|
(215,323 |
) |
| Total stockholders’ equity |
|
$ |
11,471 |
|
|
$ |
10,440 |
|
| Derivative liabilities, current portion |
|
$ |
- |
|
|
$ |
1,031 |
|
| |
|
Nine months ended September 30, 2017 |
|
| |
|
As Previously
Reported
|
|
|
As Restated |
|
| Total other expense, net |
|
$ |
(989 |
) |
|
$ |
1,797 |
|
| Total net loss |
|
|
(7,070 |
) |
|
|
(4,284 |
) |
| Deemed dividend related to beneficial conversion feature and accretion of a discount on Series A Preferred Stock |
|
|
- |
|
|
|
- |
|
| Net loss attributable to common stockholders |
|
$ |
(7,070 |
) |
|
$ |
(4,284 |
) |
Net loss per share attributable to common stockholders:
Basic and diluted
|
|
$ |
(2,42 |
) |
|
$ |
(1.47 |
) |
Weighted average common shares outstanding:
Basic and diluted
|
|
|
2,918,240 |
|
|
|
2,918,240 |
|
| Common stock, $0.01 par value |
|
$ |
30 |
|
|
$ |
30 |
|
| Additional paid-in capital |
|
|
231,647 |
|
|
|
225,733 |
|
| Accumulated deficit |
|
|
(220,206 |
) |
|
|
(215,323 |
) |
| Total stockholders’ equity |
|
$ |
11,471 |
|
|
$ |
10,440 |
|
| Derivative liabilities, current portion |
|
$ |
- |
|
|
$ |
1,031 |
|
For the nine months ended September
30, 2017, the condensed consolidated statement of cash flows changed from that which was previously reported as follows: An approximate
$131,000 positive addback for offering costs was recorded to offset an approximate $131,000 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.
|
13. Restatement to Previously Issued
Consolidated Balance Sheet and Related Statements of Operations, Stockholders’ Equity and Cash Flows
The requirement to restate the Company’s
condensed consolidated balance sheet as of September 30, 2016, and related statements of operations and comprehensive loss and
cash flows for the periods ended September 30, 2016, and the consolidated balance sheet as of December 31, 2016, and related statements
of operations and cash flows for the year ended December 31, 2016 is due to the following:
| |
● |
Failure to record a one-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 |
|
The impact of this change as of and
for the year ended December 31, 2016 is as follows (in thousands, except share and per share data):
| |
|
Year ended December 31, 2016 |
|
| |
|
As Previously Reported |
|
|
Restatement #2 - Warrant Liability |
|
|
As Restated After Restatement #1 and #2 |
|
| Total other expense, net |
|
$ |
(5,063 |
) |
|
$ |
1,835 |
|
|
$ |
(3,228 |
) |
| Total net loss/comprehensive loss |
|
|
(16,598 |
) |
|
|
1,835 |
|
|
|
(14,763 |
) |
| Deemed dividend related to beneficial conversion feature and accretion of a discount a Series A Preferred Stock |
|
|
(6,278 |
) |
|
|
- |
|
|
|
(6,278 |
) |
| Net loss attributable to common stockholders |
|
$ |
(22,876 |
) |
|
$ |
1,835 |
|
|
$ |
(21,041 |
) |
| Net loss per share attributable to common stockholders: Basic and diluted |
|
$ |
(14.82 |
) |
|
$ |
1.19 |
|
|
$ |
(13.63 |
) |
| Weighted average common shares outstanding: Basic and diluted |
|
|
1,543,735 |
|
|
|
- |
|
|
|
1,543,735 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Common stock, $0.01 par value |
|
$ |
22 |
|
|
|
|
|
|
$ |
22 |
|
| Additional paid-in capital |
|
|
227,486 |
|
|
|
(4,973 |
) |
|
|
222,513 |
|
| Accumulated deficit |
|
|
(213,135 |
) |
|
|
1,835 |
|
|
|
(211,300 |
) |
| Total stockholders' equity |
|
$ |
14,373 |
|
|
$ |
(3,138 |
) |
|
$ |
11,235 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Derivative liabilities, current portion |
|
$ |
- |
|
|
$ |
3,137 |
|
|
$ |
3,137 |
|
For the nine months ended September 30,
2016, and for the twelve months ended December 31, 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.
|