Note 12 - Restatement

9 Months Ended

Sep. 30, 2022

Notes to Financial Statements

Error Correction [Text Block]

12. Restatement

During the preparation of its Form 10-K for the year ended December 31, 2022, management of the Company identified misstatements with respect to recognition of sales revenue and related cost of sales during each of the three month periods ended March 31, 2022, June 30, 2022 and September 30, 2022. Management identified vehicle sales transactions where sales revenue and related cost of sales were incorrectly recognized upon approval of customer purchase incentives by certain government-sponsored electric vehicle incentive programs. Management determined that such approval did not coincide with a transfer of control under ASC Topic 606, Revenue from Contracts with Customers, and that revenue should have been recognized upon delivery of the vehicles to the customer.

In addition, in an unrelated transaction, the Company reclassed $387,000 from Accrued liabilities to Notes payable, net. This reclassification had no impact on total current liabilities.

The Company has restated its Consolidated Balance Sheet as of September 30, 2022, and the related Consolidated Statement of Operations, Consolidated Statement of Stockholders’ Equity and Consolidated Statement of Cash Flows for the three month and nine month periods ended September 30, 2022 to correct the misstatements described above.

The following table summarizes the effects of the restatement as of September 30, 2022 and for the three month and nine month periods ended September 30, 2022. Corresponding changes were made in the Consolidated Statement of Stockholders’ Equity and Consolidated Statement of Cash Flows. The restatement had no net effect on the cash flows of the Company.

	September 30, 2022
Consolidated Balance Sheet Information:	As Previously Reported			As Restated
Accounts receivable	$	7,804,369		$	3,384,936
Inventory, net		3,603,852			5,954,375
Inventory deposits		4,812,439			4,855,049
Total current assets		21,589,819			19,563,519
Total assets		73,749,477			71,723,177
Accrued liabilities		1,154,026			767,026
Notes payable, net		27,444			414,444
Accumulated deficit		(11,535,272	)		(13,561,572	)
Total stockholders’ equity		72,388,228			70,361,928
Total liabilities and stockholders’ equity		73,749,477			71,723,177

	Three Months Ended September 30, 2022					Nine Months Ended September 30, 2022
Consolidated Statement of Operations Information:	As Previously Reported		As Restated			As Previously Reported			As Restated
Sales	$	3,882,670	$	1,029,280		$	7,078,870		$	2,625,090
Cost of sales		2,046,491		677,855			3,998,533			1,599,290
Gross profit		1,836,179		351,425			3,080,337			1,025,800
General and administrative expenses		1,619,210		1,584,973			6,142,194			6,113,957
Income (loss) from operations		97,782		(1,352,735	)		(3,438,774	)		(5,465,074	)
Income (loss) before income taxes		126,749		(1,323,768	)		(3,410,912	)		(5,437,212	)
Net income (loss)	$	126,749	$	(1,323,768	)	$	(3,410,912	)	$	(5,437,212	)
Net income (loss) per share – basic and diluted	$	0.01	$	(0.09	)	$	(0.23	)	$	(0.36	)