Note 12 - Revision of Prior Period Financial Statements

9 Months Ended

Sep. 30, 2021

Notes to Financial Statements

Error Correction [Text Block]

12. Revision of Prior Period Financial Statements

We revised certain prior period financial statements due to a $77,000 error related to the recognition of certain revenues in our Edge to Cloud segment. The error occurred in the third quarter of 2019 and had a rollforward effect on consolidated equity and deferred revenue in all quarterly and annual periods through the first quarter of 2021. See Note 1 - Description of Business and Summary of Significant Accounting Policies. A summary of the revisions to our previously reported financial statements is presented below (in thousands).

Revised Consolidated Balance Sheets

	As of December 31, 2019
	As reported			Adjustment			As revised
Deferred revenue, current portion	$	1,559		$	(77	)	$	1,482
Total current liabilities		11,200			(77	)		11,123
Accumulated deficit		(128,194	)		77			(128,117	)
Total shareholders' equity		9,696			77			9,773

	As of December 31, 2020
	As reported			Adjustment			As revised
Deferred revenue, current portion	$	2,165		$	(77	)	$	2,088
Total current liabilities		11,339			(77	)		11,262
Accumulated deficit		(130,083	)		77			(130,006	)
Total shareholders' equity		8,651			77			8,728

Revised Consolidated Statement of Shareholders’ Equity

	Year Ended
	December 31, 2019
	As reported			Adjustment		As revised
Net loss	$	(9,181	)	$	77	$	(9,104	)
Accumulated deficit		(128,194	)		77		(128,117	)

	Three Months Ended
	September 30, 2019
	As reported			Adjustment		As revised
Net loss	$	(1,107	)	$	77	$	(1,030	)
Accumulated deficit		(126,834	)		77		(126,757	)

	Nine Months Ended
	September 30, 2019
	As reported			Adjustment		As revised
Net loss	$	(7,821	)	$	77	$	(7,744	)
Accumulated deficit		(126,834	)		77		(126,757	)

	Year Ended
	December 31, 2020
	As reported			Adjustment		As revised
Accumulated deficit	$	(130,083	)	$	77	$	(130,006	)

Revised Condensed Consolidated Statements of Operations and Comprehensive Loss

	Year Ended
	As of December 31, 2019
	As reported			Adjustment		As revised
Edge to Cloud revenue	$	8,655		$	77	$	8,732
Total revenue		59,283			77		59,360
Gross profit		10,096			77		10,173
Loss from operations		(9,314	)		77		(9,237	)
Loss before income taxes		(9,165	)		77		(9,088	)
Net loss		(9,181	)		77		(9,104	)
Basic loss per share		(0.71	)		—		(0.71	)
Diluted loss per share		(0.71	)		—		(0.71	)
Comprehensive loss		(9,242	)		77		(9,165	)

	Three Months Ended
	September 30, 2019
	As reported			Adjustment		As revised
Edge to Cloud revenue	$	2,085		$	77	$	2,162
Total revenue		14,641			77		14,718
Gross profit		2,632			77		2,709
Loss from operations		(1,129	)		77		(1,052	)
Loss before income taxes		(1,107	)		77		(1,030	)
Net loss		(1,107	)		77		(1,030	)
Basic loss per share		(0.09	)		0.01		(0.08	)
Diluted loss per share		(0.09	)		0.01		(0.08	)
Comprehensive loss		(1,111	)		77		(1,034	)

	Nine Months Ended
	September 30, 2019
	As reported			Adjustment		As revised
Edge to Cloud revenue	$	6,576		$	77	$	6,653
Total revenue		43,917			77		43,994
Gross profit		7,446			77		7,523
Loss from operations		(7,937	)		77		(7,860	)
Loss before income taxes		(7,821	)		77		(7,744	)
Net loss		(7,821	)		77		(7,744	)
Basic loss per share		(0.60	)		—		(0.60	)
Diluted loss per share		(0.60	)		—		(0.60	)
Comprehensive loss		(7,899	)		77		(7,822	)

Revised Condensed Consolidated Statements of Cash Flows

We revised our condensed consolidated statements of cash flows for the year ended December 31, 2019 and the nine months ended  September 31, 2019 for this correction, which had no impact to net cash used by operating activities in each such period.

	Year Ended
	December 31, 2019
	As reported			Adjustment			As revised
Cash flows from operating activities:
Net loss	$	(9,181	)	$	77		$	(9,104	)
Deferred revenue		(227	)		(77	)		(304	)
Net cash used by operating activities		(5,995	)		—			(5,995	)

	Nine Months Ended
	September 30, 2019
	As reported			Adjustment			As revised
Cash flows from operating activities:
Net loss	$	(7,821	)	$	77		$	(7,744	)
Deferred revenue		(48	)		(77	)		(125	)
Net cash used in operating activities		(4,994	)		—			(4,994	)

Revised Segment Information

Edge to Cloud revenue and gross profit were impacted for each of the applicable prior periods by the same amount as consolidated revenue and gross profit for the respective periods.