2. Restatement of Previously Issued Condensed Financial Statements

In connection with the preparation and review of the Company's condensed financial statements, management identified an error in the Company's historical financial statements. As a result, the Company concluded that its previously issued unaudited condensed financial statements for the quarter ended June 30, 2018, needed to be restated. Within this report, the Company has included restated unaudited interim condensed financial statements as of and for the three and six months ended June 30, 2018. This Note 2 to the unaudited interim condensed financial statements discloses the nature of the restatement matter and adjustment and shows the impact of the restatement for the three and six months ended June 30, 2018.

The restatement corrects an error related to the scrapping of inventory in the third quarter of 2018 which should have been recognized at June 30, 2018 and in the three and six-month periods ended June 30, 2018, resulting in an overstatement of work-in-process inventory and an understatement of cost of sales in the second quarter.

The following table summarizes the impact of the restatement on select unaudited condensed balance sheet line items (in thousands):


	As
	previously
June 30, 2018	reported		Adjustment		(As restated)
Assets
Current assets:
Inventory	$	9,621	$	(770)	$	8,851
Total current assets		48,668		(770)		47,898
Total assets	$	52,334	$	(770)	$	51,564
Accumulated deficit		(124,115)		(770)		(124,885)
Total stockholders’ equity		31,753		(770)		30,983
Total liabilities and stockholders’ equity	$	52,334	$	(770)	$	51,564

The following table summarizes the impact of the restatement on select unaudited condensed statement of operations line items (in thousands, except per share data):


	As
	previously
Three Months Ended June 30, 2018	reported		Adjustment		(As restated)
Cost of sales	$	5,459	$	770	$	6,229
Gross profit		5,306		(770)		4,536
Loss from operations		(6,509)		(770)		(7,279)
Net loss and comprehensive loss	$	(6,599)	$	(770)	$	(7,369)
Net loss per common share, basic and diluted	$	(0.40)	$	(0.04)	$	(0.44)


	As
	previously
Six Months Ended June 30, 2018	reported		Adjustment		(As restated)
Cost of sales	$	10,357	$	770	$	11,127
Gross profit		15,261		(770)		14,491
Loss from operations		(7,619)		(770)		(8,389)
Net loss and comprehensive loss	$	(7,876)	$	(770)	$	(8,646)
Net loss per common share, basic and diluted	$	(0.50)	$	(0.05)	$	(0.55)

The following table summarizes the impact of the restatement on select unaudited condensed statement of cash flows line items (in thousands):


	As
	previously
Six Months Ended June 30, 2018	reported		Adjustment		(As restated)
Cash flows from operating activities
Net loss	$	(7,876)	$	(770)	$	(8,646)
Inventory		170		770		940

The changes above also affect certain of the other Notes to the unaudited condensed financial statements. Conforming changes have been made to Notes 3, 5 and 11.