12. RESTATEMENT OF QUARTERLY INFORMATION (UNAUDITED)

12 Months Ended

Dec. 31, 2015

Quarterly Financial Information Disclosure [Abstract]

RESTATEMENT OF QUARTERLY INFORMATION (UNAUDITED)

In December 2014, at the request of a customer, we delivered a carousel to the customer on a lease or purchase arrangement. We honored this request in order to support its requirement for a critical umbilical project. At the completion of our customer’s requirement, we were advised by the customer it was not going to purchase the carousel, so we picked up the carousel and returned it to our facility. We then invoiced the customer on a rental basis.

The customer has declined to pay the invoices. We are pursuing collection through arbitration.

Under SEC Staff Accounting Bulletin No. 101 – Revenue Recognition in Financial Statements (SAB 101), “revenue should not be recognized until it is realized or realizable and earned.” Also according to SAB 101, revenue generally is realized or realizable and earned when all of the following criteria are met: persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the seller's price to the buyer is fixed or determinable, and collectability is reasonably assured.

Based on the facts above and the guidelines of SAB 101, we determined that the revenue in relation to this situation should not have been recognized in the quarters ended March 31, 2015 and June 30, 2015. As a result, we have reversed the misstated revenue and related receivable from our unaudited consolidated financial statements.

The following table summarizes the impact of the revenue reversal on our unaudited consolidated financial statements each quarter:

Consolidated Statements of Operations impact:     

	Three Months Ended									Three Months Ended								Six Months Ended									Nine Months Ended
	March 31, 2015									June 30, 2015								June 30, 2015									September 30, 2015
	Revenue									Revenue								Revenue									Revenue
	As Reported			Adjustment			As Restated			As Reported		Adjustment			As Restated			As Reported			Adjustment			As Restated			As Reported			Adjustment			As Restated
Revenues		6,839			(1,005	)		5,834			6,771		(235	)		6,536			13,609			(1,240	)		12,369			19,756			(1,240	)		18,516
Gross profit		2,235			(1,005	)		1,230			2,242		(235	)		2,007			4,476			(1,240	)		3,236			6,392			(1,240	)		5,152
Operating (loss) income		(230	)		(1,005	)		(1,235	)		172		(235	)		(63	)		(58	)		(1,240	)		(1,298	)		(634	)		(1,240	)		(1,874	)
Income (loss) before income taxes		(291	)		(1,005	)		(1,296	)		214		(235	)		(21	)		(77	)		(1,240	)		(1,317	)		(719	)		(1,240	)		(1,959	)
Net income (loss)		(297	)		(1,005	)		(1,302	)		206		(235	)		(29	)		(91	)		(1,240	)		(1,331	)		(730	)		(1,240	)		(1,970	)
Net income (loss) per share:
Basic earnings (loss) per common share		(0.02	)		(0.07	)		(0.09	)		0.01		(0.02	)		(0.01	)		(0.01	)		(0.08	)		(0.09	)		(0.05	)		(0.08	)		(0.13	)
Diluted earnings (loss) per common share		(0.02	)		(0.07	)		(0.09	)		0.01		(0.02	)		(0.01	)		(0.01	)		(0.08	)		(0.09	)		(0.05	)		(0.08	)		(0.13	)

Consolidated Balance Sheets impact:
	As of									As of									As of
	March 31, 2015									June 30, 2015									September 30, 2015
	As Reported			Revenue Adjustment			As Restated			As Reported			Revenue Adjustment			As Restated			As Reported			Revenue Adjustment			As Restated
Accounts receivable		8,065			(1,005	)		7,060			11,153			(1,240	)		9,913			10,160			(1,240	)		8,920
Total assets		35,574			(1,005	)		34,569			35,885			(1,240	)		34,645			31,855			(1,240	)		30,615
Accumulated deficit		(47,878	)		(1,005	)		(48,883	)		(47,672	)		(1,240	)		(48,912	)		(48,311	)		(1,240	)		(49,551	)
Total Equity		35,574			(1,005	)		34,569			35,885			(1,240	)		34,645			31,855			(1,240	)		30,615