| RESTATEMENT OF PREVIOUSLY FILED QUARTERLY FORM 10-QS |
NOTE 12: RESTATEMENT OF PREVIOUSLY FILED QUARTERLY
FORM 10-QS
The Company’s management determined that
the Company’s financial statements which were included in Quarterly Reports on Form 10-Q for the quarters ended March 31, 2023,
June 30, 2023, and September 30, 2023 should no longer be relied upon due to errors relating to the recording and reporting of transactions
in operating assts and liabilities accounts on the Consolidated Balance Sheets and Consolidated Statements of Operations. The errors occurred
primarily due to an incorrect interface and mapping of the Company’s chart of accounts during the implementation of a new financial
reporting application and due to ineffective controls relating to information technology, particularly in reviewing system implementations,
user provisioning, user rights, and service organization control reports. The Company’s management identified the errors during
its year end of audit of its fiscal year 2023.
As a result of the restatement included herein,
we reported net loss for the quarter ended March 31, 2023 of $8,228,431, which was $46,731 less than the net loss previously reported
in the March 31, 2023 Original Form 10-Q, net loss for the quarter ended June 30, 2023 of $6,974,485, which was $1,249,115 more than the
net loss reported in the previously reported, in the June 30, 2023 Original Form 10-Q, and net loss for the quarter ended September 30,
2023 of $14,516,988, which was $268,414 more than the net loss reported in the September 30, 2023 Original Forms 10-Q.
Unaudited Condensed Consolidated Balance Sheets as of March 31,
2023 - Restated
| |
|
March 31, 2023 |
|
| |
|
As
Previously
Reported |
|
|
Restatement
Impact
Increase
(Decrease) |
|
|
As
Restated |
|
| Current Assets |
|
|
|
|
|
|
|
|
|
| Cash |
|
$ |
2,357,204 |
|
|
$ |
(329,783 |
) |
|
$ |
2,027,421 |
|
| Accounts receivables, net |
|
|
12,473,777 |
|
|
|
1,963,189 |
|
|
|
14,436,966 |
|
| Inventory, net |
|
|
32,664,029 |
|
|
|
2,753,362 |
|
|
|
35,417,391 |
|
| Prepaid and other current assets |
|
|
921,178 |
|
|
|
(41,376 |
) |
|
|
879,802 |
|
| Total Current Assets |
|
|
48,416,188 |
|
|
|
4,345,392 |
|
|
|
52,761,580 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Property & equipment |
|
|
18,556,882 |
|
|
|
4,115 |
|
|
|
18,560,997 |
|
| Right of use assets |
|
|
4,150,863 |
|
|
|
- |
|
|
|
4,150,863 |
|
| Other assets |
|
|
2,786,236 |
|
|
|
(792,418 |
) |
|
|
1,993,818 |
|
| Total Assets |
|
$ |
73,910,169 |
|
|
$ |
3,557,089 |
|
|
$ |
77,467,258 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Current Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
| Accounts payable |
|
$ |
34,975,111 |
|
|
$ |
(3,118 |
) |
|
$ |
34,971,993 |
|
| Accrued expenses |
|
|
3,310,663 |
|
|
|
3,507,398 |
|
|
|
6,818,061 |
|
| Lease liability, current maturities |
|
|
979,143 |
|
|
|
- |
|
|
|
979,143 |
|
| Short term loan payable |
|
|
1,241,248 |
|
|
|
- |
|
|
|
1,241,248 |
|
| Warrant and preferred investment option liability |
|
|
8,631,313 |
|
|
|
- |
|
|
|
8,631,313 |
|
| Total Current Liabilities |
|
|
49,137,478 |
|
|
|
3,504,280 |
|
|
|
52,641,758 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Lease liability, net of current maturities |
|
|
3,224,770 |
|
|
|
- |
|
|
|
3,224,770 |
|
| Total Liabilities |
|
|
52,362,248 |
|
|
|
3,504,280 |
|
|
|
55,866,528 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Stockholders’ Equity |
|
|
|
|
|
|
|
|
|
|
|
|
| Common stock |
|
|
1,495 |
|
|
|
(1,472 |
) |
|
|
23 |
|
| Additional paid-in capital |
|
|
174,774,641 |
|
|
|
1,472 |
|
|
|
174,776,113 |
|
| Accumulated other comprehensive income |
|
|
- |
|
|
|
6,078 |
|
|
|
6,078 |
|
| Accumulated deficit |
|
|
(153,228,215 |
) |
|
|
46,731 |
|
|
|
(153,181,484 |
) |
| Total Stockholders’ Equity |
|
|
21,547,921 |
|
|
|
52,809 |
|
|
|
21,600,730 |
|
| Total Liabilities and Stockholders’ Equity |
|
$ |
73,910,169 |
|
|
$ |
3,557,089 |
|
|
$ |
77,467,258 |
|
Unaudited Condensed Statements of Operations - Restated
| |
|
Three Months Ended
March 31, 2023 |
|
| |
|
As
Previously
Reported |
|
|
Restatement
Impact
Increase
(Decrease) |
|
|
As
Restated |
|
| Revenues, Net of Allowances |
|
|
|
|
|
|
|
|
|
| Metal goods |
|
$ |
8,449,294 |
|
|
$ |
(1,495,144 |
) |
|
$ |
6,954,150 |
|
| Soft goods |
|
|
9,807,138 |
|
|
|
268,008 |
|
|
|
10,075,146 |
|
| Electronic goods |
|
|
1,956,279 |
|
|
|
(124,041 |
) |
|
|
1,832,238 |
|
| Total Revenues, Net of Allowances |
|
|
20,212,711 |
|
|
|
(1,351,177 |
) |
|
|
18,861,534 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Cost of Goods Sold |
|
|
|
|
|
|
|
|
|
|
|
|
| Metal goods |
|
|
6,965,287 |
|
|
|
(1,160,407 |
) |
|
|
5,804,880 |
|
| Soft goods |
|
|
7,712,538 |
|
|
|
641,397 |
|
|
|
8,353,935 |
|
| Electronic goods |
|
|
1,977,614 |
|
|
|
(73,405 |
) |
|
|
1,904,209 |
|
| Total Cost of Goods Sold |
|
|
16,655,439 |
|
|
|
(592,415 |
) |
|
|
16,063,024 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Gross Profit |
|
|
3,557,272 |
|
|
|
(758,762 |
) |
|
|
2,798,510 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
| Selling, general and administrative |
|
|
15,090,116 |
|
|
|
(805,493 |
) |
|
|
14,284,623 |
|
| Research and development |
|
|
3,527,521 |
|
|
|
- |
|
|
|
3,527,521 |
|
| Total Operating Expenses |
|
|
18,617,637 |
|
|
|
(805,493 |
) |
|
|
17,812,144 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Income (Loss) from Operations |
|
|
(15,060,365 |
) |
|
|
(46,731 |
) |
|
|
(15,013,634 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Other Income (Expense) |
|
|
|
|
|
|
|
|
|
|
|
|
| Change in the fair value of warrant and preferred investment option liabilities |
|
|
7,484,960 |
|
|
|
- |
|
|
|
7,484,960 |
|
| Interest expense |
|
|
(699,757 |
) |
|
|
- |
|
|
|
(699,757 |
) |
| Total Other Income (Expense) |
|
|
6,785,203 |
|
|
|
- |
|
|
|
6,785,203 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Net Income (Loss) Before Income Tax Provision |
|
|
(8,275,162 |
) |
|
|
(46,731 |
) |
|
|
(8,228,431 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Income tax |
|
|
- |
|
|
|
- |
|
|
|
- |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Net Income (Loss) |
|
$ |
(8,275,162 |
) |
|
$ |
(46,731 |
) |
|
$ |
(8,228,431 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Redemption of Series D Preferred Stock deemed dividend |
|
|
- |
|
|
|
- |
|
|
|
- |
|
| Common Stock deemed dividend |
|
|
- |
|
|
|
- |
|
|
|
- |
|
| Net Income (Loss) attributable to common stockholders |
|
$ |
(8,275,162 |
) |
|
$ |
(46,731 |
) |
|
$ |
(8,228,431 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Basic and diluted net loss per share attributable to common stockholders |
|
$ |
(36.54 |
) |
|
$ |
(0.21 |
) |
|
$ |
(36.33 |
) |
| Basic and diluted weighted average common shares outstanding |
|
|
226,466 |
|
|
|
|
|
|
|
226,466 |
|
Unaudited Condensed Consolidated Statements of Cash Flows - Restated
| |
|
March 31, 2023 |
|
| |
|
As
Previously
Reported |
|
|
Restatement
Impact
Increase
(Decrease) |
|
|
As
Restated |
|
| Net loss |
|
$ |
(8,275,162 |
) |
|
$ |
46,731 |
|
|
$ |
(8,228,431 |
) |
| Adjustments to reconcile from net loss to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
| Depreciation |
|
|
1,152,353 |
|
|
|
- |
|
|
|
1,152,353 |
|
| Amortization or right of use |
|
|
264,996 |
|
|
|
- |
|
|
|
264,996 |
|
| Change in fair value of warrant and preferred investment option liability |
|
|
(7,484,960 |
) |
|
|
- |
|
|
|
(7,484,960 |
) |
| Stock-based compensation expense |
|
|
115,139 |
|
|
|
- |
|
|
|
115,139 |
|
| Changes in operating assets and liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
| Accounts receivable, net |
|
|
4,336,882 |
|
|
|
(1,963,189 |
) |
|
|
2,373,693 |
|
| Inventory |
|
|
7,701,257 |
|
|
|
(2,753,362 |
) |
|
|
4,947,895 |
|
| Prepaid assets |
|
|
(551,386 |
) |
|
|
41,376 |
|
|
|
(510,010 |
) |
| Other assets |
|
|
(895,456 |
) |
|
|
792,418 |
|
|
|
(103,038 |
) |
| Accounts payable |
|
|
4,352,612 |
|
|
|
(3,118 |
) |
|
|
4,349,494 |
|
| Accrued expenses |
|
|
299,749 |
|
|
|
3,503,283 |
|
|
|
3,803,032 |
|
| Lease liability |
|
|
(233,097 |
) |
|
|
- |
|
|
|
(233,097 |
) |
| Net cash provided by operating activities |
|
|
782,927 |
|
|
|
(335,861 |
) |
|
|
447,066 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
| Purchases of property and equipment |
|
|
(1,257,625 |
) |
|
|
- |
|
|
|
(1,257,625 |
) |
| Net cash used in investing activities |
|
|
(1,257,625 |
) |
|
|
- |
|
|
|
(1,257,625 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
| Proceeds from loan payable |
|
|
412,589 |
|
|
|
- |
|
|
|
412,589 |
|
| Repayments of loan payable |
|
|
(144,924 |
) |
|
|
- |
|
|
|
(144,924 |
) |
| Net cash provided by financing activities |
|
|
267,665 |
|
|
|
- |
|
|
|
267,665 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Effect of exchange rate on cash |
|
|
- |
|
|
|
6,078 |
|
|
|
6,078 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Net decrease in cash |
|
|
(207,033 |
) |
|
|
(329,783 |
) |
|
|
(536,816 |
) |
| Cash, beginning of period |
|
|
2,564,237 |
|
|
|
- |
|
|
|
2,564,237 |
|
| Cash, end of period |
|
$ |
2,357,204 |
|
|
$ |
(329,783 |
) |
|
$ |
2,027,421 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
|
|
|
|
|
|
| Cash paid during the period for: |
|
|
|
|
|
|
|
|
|
|
|
|
| Interest |
|
$ |
699,757 |
|
|
|
|
|
|
$ |
699,757 |
|
| Income taxes |
|
$ |
- |
|
|
|
|
|
|
$ |
- |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Supplemental disclosure of non-cash investing and financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
| Purchase of property and equipment in accounts payable |
|
$ |
951,227 |
|
|
|
|
|
|
$ |
951,227 |
|
| Repayment of short-term loan payable in exchange of new short-term loan payable |
|
$ |
714,411 |
|
|
|
|
|
|
$ |
714,411 |
|
Unaudited Condensed Consolidated Balance Sheets - Restated
| |
|
June 30, 2023 |
|
| |
|
As
Previously
Reported |
|
|
Restatement
Impact
Increase
(Decrease) |
|
|
As
Restated |
|
| Current Assets |
|
|
|
|
|
|
|
|
|
| Cash |
|
$ |
2,206,565 |
|
|
$ |
(361,654 |
) |
|
$ |
1,844,911 |
|
| Accounts Receivables, net |
|
|
7,820,611 |
|
|
|
1,913,128 |
|
|
|
9,733,739 |
|
| Inventory, net |
|
|
31,411,395 |
|
|
|
5,796,491 |
|
|
|
37,207,886 |
|
| Prepaid and other current assets |
|
|
48,164 |
|
|
|
343,280 |
|
|
|
391,444 |
|
| Total Current Assets |
|
|
41,486,735 |
|
|
|
7,691,245 |
|
|
|
49,177,980 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Property & equipment |
|
|
19,618,726 |
|
|
|
- |
|
|
|
19,618,726 |
|
| Right of use assets |
|
|
4,386,414 |
|
|
|
- |
|
|
|
4,386,414 |
|
| Other assets |
|
|
2,059,288 |
|
|
|
2,597 |
|
|
|
2,061,885 |
|
| Total Assets |
|
$ |
67,551,163 |
|
|
$ |
7,693,842 |
|
|
$ |
75,245,005 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Current Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
| Accounts payable |
|
$ |
36,864,439 |
|
|
$ |
(771,360 |
) |
|
$ |
36,093,079 |
|
| Accrued expenses |
|
|
3,433,090 |
|
|
|
9,620,070 |
|
|
|
13,053,160 |
|
| Lease liability, current maturities |
|
|
1,182,351 |
|
|
|
- |
|
|
|
1,182,351 |
|
| Short term loan payable |
|
|
1,214,028 |
|
|
|
- |
|
|
|
1,214,028 |
|
| Warrant and preferred investment option liability |
|
|
4,985,387 |
|
|
|
- |
|
|
|
4,985,387 |
|
| Total Current Liabilities |
|
|
47,679,295 |
|
|
|
8,848,710 |
|
|
|
56,528,005 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Lease liability, net of current maturities |
|
|
3,383,967 |
|
|
|
- |
|
|
|
3,383,967 |
|
| Total Liabilities |
|
|
51,063,262 |
|
|
|
8,848,710 |
|
|
|
59,911,972 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Stockholders’ Equity |
|
|
|
|
|
|
|
|
|
|
|
|
| Common stock |
|
|
40 |
|
|
|
- |
|
|
|
40 |
|
| Additional paid in capital |
|
|
175,441,446 |
|
|
|
(185 |
) |
|
|
175,441,261 |
|
| Accumulated other comprehensive income |
|
|
- |
|
|
|
47,702 |
|
|
|
47,702 |
|
| Accumulated deficit |
|
|
(158,953,585 |
) |
|
|
(1,202,385 |
) |
|
|
(160,155,970 |
) |
| Total Stockholders’ Equity |
|
|
16,487,901 |
|
|
|
(1,154,868 |
) |
|
|
15,333,033 |
|
| Total Liabilities and Stockholders’ Equity |
|
$ |
67,551,163 |
|
|
$ |
7,693,842 |
|
|
$ |
75,245,005 |
|
Unaudited Condensed Consolidated Statements of Operations -
Restated
| |
|
For the Three Months Ended
June 30, 2023 |
|
|
For the Six Months Ended
June 30, 2023 |
|
| |
|
As
Previously
Reported |
|
|
Restatement
Impact
Increase
(Decrease) |
|
|
As
Restated |
|
|
As
Previously
Reported |
|
|
Restatement
Impact
Increase
(Decrease) |
|
|
As
Restated |
|
| Revenues, Net of Allowances |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Metal goods |
|
$ |
8,012,855 |
|
|
$ |
(619,314 |
) |
|
$ |
7,393,541 |
|
|
$ |
17,280,949 |
|
|
$ |
(2,933,258 |
) |
|
$ |
14,347,691 |
|
| Soft goods |
|
|
9,913,780 |
|
|
|
(1,167,195 |
) |
|
|
8,746,585 |
|
|
|
18,897,537 |
|
|
|
(75,806 |
) |
|
|
18,821,731 |
|
| Electronic goods |
|
|
952,934 |
|
|
|
(116,704 |
) |
|
|
836,230 |
|
|
|
2,913,793 |
|
|
|
(245,325 |
) |
|
|
2,668,468 |
|
| Total Revenues, Net of Allowances |
|
|
18,879,569 |
|
|
|
(1,903,213 |
) |
|
|
16,976,356 |
|
|
|
39,092,279 |
|
|
|
(3,254,389 |
) |
|
|
35,837,890 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cost of Goods Sold |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Metal goods |
|
|
5,453,794 |
|
|
|
49,214 |
|
|
|
5,503,008 |
|
|
|
12,576,597 |
|
|
|
(1,268,709 |
) |
|
|
11,307,888 |
|
| Soft goods |
|
|
6,726,078 |
|
|
|
(893,541 |
) |
|
|
5,832,537 |
|
|
|
14,613,702 |
|
|
|
(427,230 |
) |
|
|
14,186,472 |
|
| Electronic goods |
|
|
858,724 |
|
|
|
(45,314 |
) |
|
|
813,410 |
|
|
|
2,503,737 |
|
|
|
213,882 |
|
|
|
2,717,619 |
|
| Total Cost of Goods Sold |
|
|
13,038,596 |
|
|
|
(889,641 |
) |
|
|
12,148,955 |
|
|
|
29,694,036 |
|
|
|
(1,482,057 |
) |
|
|
28,211,979 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Gross Profit |
|
|
5,840,973 |
|
|
|
(1,013,572 |
) |
|
|
4,827,401 |
|
|
|
9,398,243 |
|
|
|
(1,772,332 |
) |
|
|
7,625,911 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Selling, general and administrative |
|
|
14,967,257 |
|
|
|
384,580 |
|
|
|
15,351,837 |
|
|
|
30,046,444 |
|
|
|
(409,984 |
) |
|
|
29,636,460 |
|
| Research and development |
|
|
2,913,403 |
|
|
|
(119,587 |
) |
|
|
2,793,816 |
|
|
|
6,440,924 |
|
|
|
(119,587 |
) |
|
|
6,321,337 |
|
| Total Operating Expenses |
|
|
17,880,660 |
|
|
|
264,993 |
|
|
|
18,145,653 |
|
|
|
36,487,368 |
|
|
|
(529,571 |
) |
|
|
35,957,797 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income (Loss) from Operations |
|
|
(12,039,687 |
) |
|
|
1,278,565 |
|
|
|
(13,318,252 |
) |
|
|
(27,089,125 |
) |
|
|
1,242,761 |
|
|
|
(28,331,886 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other Income (Expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Warrant issuance cost |
|
|
(351,768 |
) |
|
|
- |
|
|
|
(351,768 |
) |
|
|
(351,768 |
) |
|
|
- |
|
|
|
(351,768 |
) |
| Change in the fair value of warrant and preferred investment option liabilities |
|
|
7,242,510 |
|
|
|
- |
|
|
|
7,242,510 |
|
|
|
14,727,470 |
|
|
|
- |
|
|
|
14,727,470 |
|
| Interest expense |
|
|
(576,425 |
) |
|
|
(29,450 |
) |
|
|
(546,975 |
) |
|
|
(1,287,109 |
) |
|
|
(40,377 |
) |
|
|
(1,246,732 |
) |
| Total Other Income (Expense) |
|
|
6,314,317 |
|
|
|
(29,450 |
) |
|
|
6,343,767 |
|
|
|
13,088,593 |
|
|
|
(40,377 |
) |
|
|
13,128,970 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net Income (Loss) Before Income Tax Provision |
|
|
(5,725,370 |
) |
|
|
1,249,115 |
|
|
|
(6,974,485 |
) |
|
|
(14,000,532 |
) |
|
|
1,202,384 |
|
|
|
(15,202,916 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income tax |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net Income (Loss) |
|
$ |
(5,725,370 |
) |
|
$ |
1,249,115 |
|
|
$ |
(6,974,485 |
) |
|
$ |
(14,000,532 |
) |
|
$ |
1,202,384 |
|
|
$ |
(15,202,916 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Redemption of Series D Preferred Stock deemed dividend |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
| Common Stock deemed dividend |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
| Net Income (Loss) attributable to common stockholders |
|
$ |
(5,725,370 |
) |
|
$ |
1,249,115 |
|
|
$ |
(6,974,485 |
) |
|
$ |
(14,000,532 |
) |
|
$ |
1,202,384 |
|
|
$ |
(15,202,916 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic and diluted net loss per share attributable to common stockholders |
|
$ |
(23.57 |
) |
|
$ |
5.14 |
|
|
$ |
(28.71 |
) |
|
$ |
(59.64 |
) |
|
$ |
5.12 |
|
|
$ |
(64.76 |
) |
| Basic and diluted weighted average common shares outstanding |
|
|
242,934 |
|
|
|
|
|
|
|
242,934 |
|
|
|
234,745 |
|
|
|
|
|
|
|
234,745 |
|
Unaudited Condensed Consolidated Statements of Cash
Flows - Restated
| |
|
June 30, 2023 |
|
| |
|
As
Previously
Reported |
|
|
Restatement
Impact
Increase
(Decrease) |
|
|
As
Restated |
|
| |
|
|
|
|
|
|
|
|
|
| Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
| Net loss |
|
$ |
(14,000,532 |
) |
|
$ |
(1,202,384 |
) |
|
$ |
(15,202,916 |
) |
| Adjustments to reconcile from net loss to net cash used in operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
| Depreciation |
|
|
2,608,776 |
|
|
|
- |
|
|
|
2,608,776 |
|
| Provision for credit losses |
|
|
1,300,000 |
|
|
|
- |
|
|
|
1,300,000 |
|
| Amortization or right of use assets |
|
|
734,405 |
|
|
|
- |
|
|
|
734,405 |
|
| Warrant issuance cost |
|
|
351,768 |
|
|
|
- |
|
|
|
351,768 |
|
| Loss on sale of property and equipment |
|
|
- |
|
|
|
16,652 |
|
|
|
16,652 |
|
| Change in fair value of warrant and preferred investment option liability |
|
|
(14,727,470 |
) |
|
|
- |
|
|
|
(14,727,470 |
) |
| Stock-based compensation expense |
|
|
228,656 |
|
|
|
- |
|
|
|
228,656 |
|
| Changes in operating assets and liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
| Accounts receivable, net |
|
|
7,690,048 |
|
|
|
(1,913,128 |
) |
|
|
5,776,920 |
|
| Inventory |
|
|
8,953,891 |
|
|
|
(5,796,491 |
) |
|
|
3,157,400 |
|
| Prepaid assets |
|
|
321,628 |
|
|
|
(343,280 |
) |
|
|
(21,652 |
) |
| Other assets |
|
|
(168,508 |
) |
|
|
(2,597 |
) |
|
|
(171,105 |
) |
| Accounts payable |
|
|
4,715,352 |
|
|
|
(771,361 |
) |
|
|
3,943,991 |
|
| Accrued expenses |
|
|
422,177 |
|
|
|
9,603,417 |
|
|
|
10,025,594 |
|
| Lease liability |
|
|
(575,652 |
) |
|
|
- |
|
|
|
(575,652 |
) |
| Net cash used in operating activities |
|
|
(2,145,461 |
) |
|
|
(409,172 |
) |
|
|
(2,554,633 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
| Purchases of property and equipment |
|
|
(2,249,304 |
) |
|
|
- |
|
|
|
(2,249,304 |
) |
| Net cash used in investing activities |
|
|
(2,249,304 |
) |
|
|
- |
|
|
|
(2,249,304 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
| Proceeds from short term loan payable |
|
|
412,589 |
|
|
|
- |
|
|
|
412,589 |
|
| Repayments of short-term loan payable |
|
|
(172,144 |
) |
|
|
- |
|
|
|
(172,144 |
) |
| Proceeds from issuance of common stock, net of costs |
|
|
3,796,648 |
|
|
|
(184 |
) |
|
|
3,796,464 |
|
| Net cash provided by financing activities |
|
|
4,037,093 |
|
|
|
(184 |
) |
|
|
4,036,909 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Effect of exchange rate on cash |
|
|
- |
|
|
|
47,702 |
|
|
|
47,702 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Net decrease in cash |
|
|
(357,672 |
) |
|
|
(361,654 |
) |
|
|
(719,326 |
) |
| Cash, beginning of period |
|
|
2,564,237 |
|
|
|
- |
|
|
|
2,564,237 |
|
| Cash, end of period |
|
$ |
2,206,565 |
|
|
$ |
(361,654 |
) |
|
$ |
1,844,911 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Supplemental disclosures of cash flow information: |
|
|
|
|
|
|
|
|
|
|
|
|
| Cash paid during the period for: |
|
|
|
|
|
|
|
|
|
|
|
|
| Interest |
|
$ |
1,261,457 |
|
|
|
|
|
|
$ |
1,261,457 |
|
| Income taxes |
|
$ |
- |
|
|
|
|
|
|
$ |
- |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Supplemental disclosures of non-cash investing and financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
| Initial fair value of warrants and preferred investment options |
|
$ |
3,596,484 |
|
|
|
|
|
|
$ |
3,596,584 |
|
| Initial value of lease liability |
|
$ |
704,960 |
|
|
|
|
|
|
$ |
704,960 |
|
| Purchase of property and equipment in accounts payable |
|
$ |
2,477,816 |
|
|
|
|
|
|
$ |
2,477,816 |
|
| Repayment of short-term loan payable in exchange of new short-term loan payable |
|
$ |
714,411 |
|
|
|
|
|
|
$ |
714,411 |
|
Unaudited Condensed Consolidated Balance Sheets - Restated
| |
|
September 30, 2023 |
|
| |
|
As
Previously
Reported |
|
|
Restatement
Impact
Increase
(Decrease) |
|
|
As
Restated |
|
| Current Assets |
|
|
|
|
|
|
|
|
|
| Cash |
|
$ |
1,834,305 |
|
|
$ |
107,659 |
|
|
$ |
1,941,964 |
|
| Accounts receivables, net |
|
|
8,992,889 |
|
|
|
3,194,315 |
|
|
|
12,187,204 |
|
| Inventory, net |
|
|
28,070,889 |
|
|
|
4,861,332 |
|
|
|
32,932,221 |
|
| Prepaid and other current assets |
|
|
543,343 |
|
|
|
(123,040 |
) |
|
|
420,303 |
|
| Total Current Assets |
|
|
39,441,426 |
|
|
|
8,040,266 |
|
|
|
47,481,692 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Property & equipment |
|
|
18,904,135 |
|
|
|
- |
|
|
|
18,904,135 |
|
| Right of use assets |
|
|
4,021,988 |
|
|
|
- |
|
|
|
4,021,988 |
|
| Other assets |
|
|
2,165,301 |
|
|
|
1,482 |
|
|
|
2,166,783 |
|
| Total Assets |
|
|
64,532,850 |
|
|
|
8,041,748 |
|
|
|
72,574,598 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Current Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
| Accounts payable |
|
|
41,091,115 |
|
|
|
5,933,524 |
|
|
|
47,024,639 |
|
| Accrued expenses |
|
|
4,461,713 |
|
|
|
3,549,633 |
|
|
|
8,011,346 |
|
| Lease Liability, current maturities |
|
|
1,247,062 |
|
|
|
- |
|
|
|
1,247,062 |
|
| Short term loan payable |
|
|
707,625 |
|
|
|
5,606 |
|
|
|
713,231 |
|
| Warrant and preferred investment option liability |
|
|
5,740,899 |
|
|
|
- |
|
|
|
5,740,899 |
|
| Total Current Liabilities |
|
|
53,248,414 |
|
|
|
9,488,763 |
|
|
|
62,737,177 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Lease liability, net of current maturities |
|
|
3,013,214 |
|
|
|
- |
|
|
|
3,013,214 |
|
| Total Liabilities |
|
|
56,261,628 |
|
|
|
9,488,763 |
|
|
|
65,750,391 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Stockholders’ Equity |
|
|
|
|
|
|
|
|
|
|
|
|
| Common stock |
|
|
57 |
|
|
|
|
|
|
|
57 |
|
| Additional paid in capital |
|
|
181,473,324 |
|
|
|
- |
|
|
|
181,473,324 |
|
| Accumulated other comprehensive income |
|
|
- |
|
|
|
23,783 |
|
|
|
23,783 |
|
| Accumulated deficit |
|
|
(173,202,159 |
) |
|
|
(1,470,798 |
) |
|
|
(174,672,957 |
) |
| Total Stockholders’ Equity (Deficit) |
|
|
8,271,222 |
|
|
|
(1,447,015 |
) |
|
|
6,824,207 |
|
| Total Liabilities and Stockholders’ Equity |
|
$ |
64,532,850 |
|
|
$ |
8,041,748 |
|
|
$ |
72,574,598 |
|
Unaudited Condensed Consolidated Statements of Operations - Restated
| |
|
For the Three Months Ended
September 30, 2023 |
|
|
For the Nine Months Ended
September 30, 2023 |
|
| |
|
As
Previously
Reported |
|
|
Restatement
Impact
Increase
(Decrease) |
|
|
As
Restated |
|
|
As
Previously
Reported |
|
|
Restatement
Impact
Increase
(Decrease) |
|
|
As
Restated |
|
| Revenues, Net of Allowances |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Metal goods |
|
$ |
12,754,504 |
|
|
$ |
(4,288,179 |
) |
|
$ |
8,466,325 |
|
|
$ |
30,475,518 |
|
|
$ |
(7,661,502 |
) |
|
$ |
22,814,016 |
|
| Soft goods |
|
|
6,035,706 |
|
|
|
4,145,891 |
|
|
|
10,181,597 |
|
|
|
25,938,923 |
|
|
|
3,064,405 |
|
|
|
29,003,328 |
|
| Electronic goods |
|
|
1,839,997 |
|
|
|
(784,742 |
) |
|
|
1,055,255 |
|
|
|
3,308,045 |
|
|
|
415,678 |
|
|
|
3,723,723 |
|
| Total Revenues, Net of Allowances |
|
|
20,630,207 |
|
|
|
(927,030 |
) |
|
|
19,703,177 |
|
|
|
59,722,486 |
|
|
|
(4,181,419 |
) |
|
|
55,541,067 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cost of Goods Sold |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Metal goods |
|
|
10,351,690 |
|
|
|
(4,040,275 |
) |
|
|
6,311,415 |
|
|
|
25,732,707 |
|
|
|
(8,113,404 |
) |
|
|
17,619,303 |
|
| Soft goods |
|
|
3,646,862 |
|
|
|
4,220,740 |
|
|
|
7,867,602 |
|
|
|
16,528,326 |
|
|
|
5,525,748 |
|
|
|
22,054,074 |
|
| Electronic goods |
|
|
1,718,681 |
|
|
|
(521,874 |
) |
|
|
1,196,807 |
|
|
|
3,150,236 |
|
|
|
764,190 |
|
|
|
3,914,426 |
|
| Total Cost of Goods Sold |
|
|
15,717,233 |
|
|
|
(341,409 |
) |
|
|
15,375,824 |
|
|
|
45,411,269 |
|
|
|
(1,823,466 |
) |
|
|
43,587,803 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Gross Profit |
|
|
4,912,974 |
|
|
|
(585,621 |
) |
|
|
4,327,353 |
|
|
|
14,311,217 |
|
|
|
(2,357,953 |
) |
|
|
11,953,264 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Selling, general and administrative |
|
|
12,572,066 |
|
|
|
2,286,759 |
|
|
|
14,858,825 |
|
|
|
42,618,510 |
|
|
|
1,876,775 |
|
|
|
44,495,285 |
|
| Research and development |
|
|
2,916,349 |
|
|
|
(2,587,157 |
) |
|
|
329,192 |
|
|
|
9,357,273 |
|
|
|
(2,706,744 |
) |
|
|
6,650,529 |
|
| Total Operating Expenses |
|
|
15,488,415 |
|
|
|
(300,398 |
) |
|
|
15,188,017 |
|
|
|
51,975,783 |
|
|
|
(829,969 |
) |
|
|
51,145,814 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income (Loss) from Operations |
|
|
(10,575,441 |
) |
|
|
285,223 |
|
|
|
(10,860,664 |
) |
|
|
(37,664,566 |
) |
|
|
1,527,984 |
|
|
|
(39,192,550 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other Income (Expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Warrant issuance cost |
|
|
(186,450 |
) |
|
|
- |
|
|
|
(186,450 |
) |
|
|
(538,218 |
) |
|
|
- |
|
|
|
(538,218 |
) |
| Change in the fair value of warrant and preferred investment option liabilities |
|
|
3,033,537 |
|
|
|
- |
|
|
|
3,033,537 |
|
|
|
17,761,007 |
|
|
|
- |
|
|
|
17,761,007 |
|
| Inducement expense |
|
|
(6,373,353 |
) |
|
|
- |
|
|
|
(6,373,353 |
) |
|
|
(6,373,353 |
) |
|
|
- |
|
|
|
(6,373,353 |
) |
| Interest expense |
|
|
(146,867 |
) |
|
|
(16,809 |
) |
|
|
(130,058 |
) |
|
|
(1,433,975 |
) |
|
|
(57,185 |
) |
|
|
(1,376,790 |
) |
| Total Other Income (Expense) |
|
|
(3,673,133 |
) |
|
|
(16,809 |
) |
|
|
(3,656,324 |
) |
|
|
9,415,461 |
|
|
|
(57,185 |
) |
|
|
9,472,646 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net Income (Loss) Before Income Tax Provision |
|
|
(14,248,574 |
) |
|
|
268,414 |
|
|
|
(14,516,988 |
) |
|
|
(28,249,105 |
) |
|
|
1,470,799 |
|
|
|
(29,719,904 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income tax |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net Income (Loss) |
|
$ |
(14,248,574 |
) |
|
$ |
268,414 |
|
|
$ |
(14,516,988 |
) |
|
$ |
(28,249,105 |
) |
|
$ |
1,470,799 |
|
|
$ |
(29,719,904 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Redemption of Series D Preferred Stock deemed dividend |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
| Common Stock deemed dividend |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
| Net Income (Loss) attributable to common stockholders |
|
$ |
(14,248,574 |
) |
|
$ |
268,414 |
|
|
$ |
(14,516,988 |
) |
|
$ |
(28,249,105 |
) |
|
$ |
1,470,799 |
|
|
$ |
(29,719,904 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic and diluted net loss per share attributable to common stockholders |
|
$ |
(29.59 |
) |
|
$ |
0.55 |
|
|
$ |
(30.15 |
) |
|
$ |
(88.86 |
) |
|
$ |
4.63 |
|
|
$ |
(93.49 |
) |
| Basic and diluted weighted average common shares outstanding |
|
|
481,508 |
|
|
|
|
|
|
|
481,508 |
|
|
|
317,904 |
|
|
|
|
|
|
|
317,904 |
|
Unaudited Condensed Consolidated Statements of Cash Flows - Restated
| |
|
For the Nine Months Ended
September 30, 2023 |
|
| |
|
As
Previously
Reported |
|
|
Restatement
Impact
Increase
(Decrease) |
|
|
As Restated |
|
| Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
| Net loss |
|
$ |
(28,249,105 |
) |
|
$ |
(1,470,799 |
) |
|
$ |
(29,719,904 |
) |
| Adjustments to reconcile from net loss to net cash used in operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
| Depreciation |
|
|
4,088,358 |
|
|
|
- |
|
|
|
4,088,358 |
|
| Provision for credit losses |
|
|
2,943,671 |
|
|
|
662,687 |
|
|
|
3,606,358 |
|
| Loss on sale of property and equipment |
|
|
- |
|
|
|
16,652 |
|
|
|
16,652 |
|
| Inducement expense |
|
|
6,373,353 |
|
|
|
- |
|
|
|
6,373,353 |
|
| Amortization of right of use assets |
|
|
1,098,831 |
|
|
|
- |
|
|
|
1,098,831 |
|
| Change in fair value of warrant and preferred investment option liability |
|
|
(17,761,007 |
) |
|
|
- |
|
|
|
(17,761,007 |
) |
| Warrant issuance cost |
|
|
538,218 |
|
|
|
- |
|
|
|
538,218 |
|
| Stock-based compensation expense |
|
|
328,127 |
|
|
|
- |
|
|
|
328,127 |
|
| Changes in operating assets and liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
| Accounts receivable, net |
|
|
4,874,099 |
|
|
|
(3,857,002 |
) |
|
|
1,017,097 |
|
| Inventory |
|
|
12,294,396 |
|
|
|
(4,861,331 |
) |
|
|
7,433,065 |
|
| Prepaid assets |
|
|
(173,551 |
) |
|
|
123,040 |
|
|
|
(50,511 |
) |
| Other assets |
|
|
(274,520 |
) |
|
|
(1,483 |
) |
|
|
(276,003 |
) |
| Accounts payable |
|
|
9,240,985 |
|
|
|
5,933,524 |
|
|
|
15,174,509 |
|
| Accrued expenses |
|
|
1,450,799 |
|
|
|
3,532,981 |
|
|
|
4,983,780 |
|
| Lease liability |
|
|
(881,694 |
) |
|
|
- |
|
|
|
(881,694 |
) |
| Net cash used in operating activities |
|
|
(4,109,040 |
) |
|
|
78,270 |
|
|
|
(4,030,770 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
| Purchases of property and equipment |
|
|
(3,313,252 |
) |
|
|
- |
|
|
|
(3,313,252 |
) |
| Net cash used in investing activities |
|
|
(3,313,252 |
) |
|
|
|
|
|
|
(3,313,252 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
| Proceeds from issuance of stock, net of costs |
|
|
6,958,318 |
|
|
|
- |
|
|
|
6,958,318 |
|
| Proceeds from short term loan payable |
|
|
779,795 |
|
|
|
- |
|
|
|
779,795 |
|
| Repayments of short-term loan payable |
|
|
(1,045,753 |
) |
|
|
5,606 |
|
|
|
(1,040,147 |
) |
| Net cash provided by financing activities |
|
|
6,692,360 |
|
|
|
5,606 |
|
|
|
6,697,966 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Effect of currency fluctuation on cash |
|
|
- |
|
|
|
23,783 |
|
|
|
23,783 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Net (decrease) in cash |
|
|
(729,932 |
) |
|
|
107,660 |
|
|
|
(622,273 |
) |
| Cash, beginning of period |
|
|
2,564,237 |
|
|
|
- |
|
|
|
2,564,237 |
|
| Cash, end of period |
|
|
1,834,305 |
|
|
|
107,660 |
|
|
|
1,941,964 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Supplemental disclosures of cash flow information: |
|
|
|
|
|
|
|
|
|
|
|
|
| Cash paid during the period for: |
|
|
|
|
|
|
|
|
|
|
|
|
| Interest |
|
$ |
1,433,976 |
|
|
$ |
(42,461 |
) |
|
$ |
1,391,515 |
|
| Income taxes |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Supplemental disclosures of non-cash investing and financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
| Initial fair value of warrant and preferred investment option liability |
|
$ |
9,916,393 |
|
|
$ |
- |
|
|
$ |
9,916,393 |
|
| Initial value of lease liability |
|
$ |
704,960 |
|
|
$ |
- |
|
|
$ |
704,960 |
|
| Repayment of short-term loan payable in exchange for new short-term loan payable |
|
$ |
1,601,205 |
|
|
$ |
(1,254,000 |
) |
|
$ |
347,205 |
|
| Purchase of property and equipment in accounts payable |
|
$ |
2,178,858 |
|
|
$ |
- |
|
|
$ |
2,178,858 |
|
|