RESTATEMENT OF PREVIOUSLY FILED FINANCIAL STATEMENTS

12 Months Ended

Dec. 31, 2023

Accounting Changes and Error Corrections [Abstract]

RESTATEMENT OF PREVIOUSLY FILED FINANCIAL STATEMENTS

RESTATEMENT OF PREVIOUSLY FILED FINANCIAL STATEMENTS

Restatement of Previously Filed Financial Statements

As detailed in the Explanatory Note, the Company has restated its consolidated financial statements for the years ended December 31, 2023 and 2022 in the following tables and the unaudited quarterly condensed consolidated financial information for each of the interim periods in the years ended December 31, 2023 and 2022 in Note 20. The accompanying applicable Notes have been updated to reflect the effects of the restatement.

The following tables present the effect of the restatement on the Company's previously reported Consolidated Balance Sheets as of the years ended December 31, 2023 and December 31, 2022. The amounts in the "As Reported" columns are amounts derived from the Company's previously filed financial statements in its Annual Report on Form 10-K for the year ended December 31, 2023, originally filed with the Securities and Exchange Commission on March 28, 2024 (the “Original Form 10-K”). The amounts in the "Restatement Adjustments" columns present the impact of the adjustments arising from the re-audit of the Company’s 2023 financial statements. The amounts in the "As Restated" columns are the updated amounts including the impact from the Restatement Adjustments. At the bottom of the tables listed in this section are notes addressing the cause of the restatement adjustments as indicated by the respective lettering.

	As of December 31, 2023
	As		Restatement			As
ASSETS	Reported		Adjustments		Note	Restated
Current assets:
Cash	$	1,112,504	$	(37,662)	(G)	$	1,074,842
Accounts receivable, net	26,991,739		(5,342,838)		(J)	21,648,901
Contract receivables	10,071,951		(1,635,384)		(C)	8,436,567
Prepaid expenses and other current assets	2,775,682		(1,024,118)		(D) (F)	1,751,564
Total current assets	40,951,876		(8,040,002)			32,911,874
Non-current assets:
Property and equipment, net	1,419,393		—			1,419,393
Operating lease right of use assets, net	2,041,217		—			2,041,217
Investments	—		—			—
Goodwill	15,572,050		(5,883,075)		(A) (I) (K)	9,688,975
Intangible assets, net	4,394,507		(942,899)		(I)	3,451,608
Total non-current assets	23,427,167		(6,825,974)			16,601,193
Total assets	$	64,379,043	$	(14,865,976)		$	49,513,067
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	25,411,243	$	(1,207,474)	(C)	$	24,203,769
Contract liabilities	8,063,325		(4,113,192)		(C)	3,950,133
Accrued expenses	4,071,231		1,213,047		(B) (C)	5,284,278
Customer deposits	603,046		—			603,046
Contingent consideration	49,830		—			49,830
Notes payable and line of credit	3,204,840		—			3,204,840
Operating lease liabilities	707,141		—			707,141
Total current liabilities	42,110,656		(4,107,619)			38,003,037
Non-current liabilities:
Operating lease liabilities	1,380,362		—			1,380,362
Deferred tax liability	817,419		(773,106)		(A)	44,313
Total non-current liabilities	2,197,781		(773,106)			1,424,675
Total liabilities	$	44,308,437	$	(4,880,725)		$	39,427,712
Commitments and contingencies (note 12)
Shareholders’ equity:
Preferred stock	—		—			—
Common stock	13,523		—			13,523
Additional paid-in capital	88,901,583		(511,827)		(F)	88,389,756
Treasury shares	(12,045,542)		—			(12,045,542)
Accumulated deficit	(56,798,958)		(9,473,424)		(H)	(66,272,382)
Total shareholders’ equity	20,070,606		(9,985,251)			10,085,355
Total liabilities and shareholders’ equity	$	64,379,043	$	(14,865,976)		$	49,513,067

	As of December 31, 2022
	As		Restatement			As
ASSETS	Reported		Adjustments		Note	Restated
Current assets:
Cash	$	12,008,003	$	(253,654)	(G)	$	11,754,349
Accounts receivable, net	15,380,292		(247,726)		(G)	15,132,566
Contract receivables	3,004,282		—			3,004,282
Prepaid expenses and other current assets	4,164,960		(717,306)		(D)	3,447,654
Total current assets	34,557,537		(1,218,686)			33,338,851
Non-current assets:
Property and equipment, net	1,307,146		—			1,307,146
Operating lease right of use assets, net	2,618,825		—			2,618,825
Investments	2,559,307		—			2,559,307
Goodwill	15,572,050		(552,379)		(A) (K)	15,019,671
Intangible assets, net	5,450,687		—			5,450,687
Total non-current assets	27,508,015		(552,379)			26,955,636
Total assets	$	62,065,552	$	(1,771,065)		$	60,294,487
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	9,960,364	$	(89,719)	(G)	$	9,870,645
Contract liabilities	1,294,452		742,154		(C)	2,036,606
Accrued expenses	3,196,961		2,019,553		(B) (C)	5,216,514
Customer deposits	2,571,161		—			2,571,161
Contingent consideration	2,799,287		—			2,799,287
Notes payable	3,832,682		—			3,832,682
Operating lease liabilities	600,816		—			600,816
Total current liabilities	24,255,723		2,671,988			26,927,711
Non-current liabilities:
Operating lease liabilities	2,044,782		—			2,044,782
Deferred tax liability	1,033,283		(1,033,283)		(A)	—
Total non-current liabilities	3,078,065		(1,033,283)			2,044,782
Total liabilities	$	27,333,788	$	1,638,705		$	28,972,493
Commitments and contingencies (note 12)
Shareholders’ equity:
Preferred stock	—		—			—
Common stock	12,221		71		(G)	12,292
Additional paid-in capital	84,882,982		(693,017)		(K)	84,189,965
Treasury shares	(12,045,542)		—			(12,045,542)
Accumulated deficit	(38,117,897)		(2,716,824)		(H)	(40,834,721)
Total shareholders’ equity	34,731,764		(3,409,770)			31,321,994
Total liabilities and shareholders’ equity	$	62,065,552	$	(1,771,065)		$	60,294,487

The following tables presents the effect of the restatement on the Company's previously reported Consolidated Statements of Comprehensive Income for the years ended December 31, 2023, and December 31, 2022. The values as previously reported were derived from the Company’s Original Form 10-K:

	For the Year Ended December 31, 2023
	As		Restatement			As
	Reported		Adjustments		Note	Restated
Revenues:
Equipment systems	$	12,675,645	$	45,228	(G)	$	12,720,873
Services	11,923,920		(4,000)		(G)	11,919,920
Construction design-build	46,254,967		(1,693,184)		(C)	44,561,783
Other	688,241		29,231		(G)	717,472
Total revenues	71,542,773		(1,622,725)			69,920,048
Cost of revenues:
Equipment systems	11,085,306		(3,770)		(G)	11,081,536
Services	7,222,968		(4)		(G)	7,222,964
Construction design-build	42,442,858		(1,247,964)		(C)	41,194,894
Other	500,079		17,909		(G)	517,988
Total cost of revenues	61,251,211		(1,233,829)			60,017,382
Gross profit	10,291,562		(388,896)			9,902,666
Operating expenses:
General and administrative	25,332,332		(54,454)		(G)	25,277,878
Depreciation and amortization	1,636,667		—			1,636,667
Impairment of goodwill and intangibles	—		6,273,595		(I)	6,273,595
Total operating expenses	26,968,999		6,219,141			33,188,140
Loss from operations	(16,677,437)		(6,608,037)			(23,285,474)
Non-operating income (expenses):
Interest expense	(271,686)		—			(271,686)
Interest income	173,895		—			173,895
Change in fair value of contingent consideration	(160,232)		—			(160,232)
Write-down of investment	(258,492)		—			(258,492)
Loss on legal settlement	(1,500,000)		—			(1,500,000)
Other income (expense)	(202,973)		161,510		(G)	(41,463)
Total non-operating income (expenses)	(2,219,488)		161,510			(2,057,978)
Loss before income taxes	(18,896,925)		(6,446,527)			(25,343,452)
Income tax benefit	215,864		(310,073)		(A)	(94,209)
Net loss	$	(18,681,061)	$	(6,756,600)		$	(25,437,661)
Comprehensive loss	$	(18,681,061)	$	(6,756,600)		$	(25,437,661)

Loss per share – basic and diluted	$	(1.72)	$	(0.62)	$	(2.34)
Weighted average shares – basic and diluted	10,881,675		10,881,675		10,881,675

	For the Year Ended December 31, 2022
	As		Restatement			As
	Reported		Adjustments		Notes	Restated
Revenues:
Equipment systems	$	33,333,574	$	(214,094)	(G)	$	33,119,480
Services	12,862,308		222,335		(G)	13,084,643
Construction design-build	19,822,901		(742,155)		(C)	19,080,746
Other	1,011,151		(1,321)		(G)	1,009,830
Total revenues	67,029,934		(735,235)			66,294,699
Cost of revenues:
Equipment systems	27,963,258		812,765		(B)	28,776,023
Services	6,225,634		13,379		(G)	6,239,013
Construction design-build	17,905,172		486,904		(C)	18,392,076
Other	730,151		1,914		(G)	732,065
Total cost of revenues	52,824,215		1,314,962			54,139,177
Gross profit	14,205,719		(2,050,197)			12,155,522
Operating expenses:
General and administrative	22,059,775		245,321		(G)	22,305,096
Depreciation and amortization	1,483,065		—			1,483,065
Business development	3,299,864		—			3,299,864
Total operating expenses	26,842,704		245,321			27,088,025
Loss from operations	(12,636,985)		(2,295,518)			(14,932,503)
Non-operating income (expenses):
Interest expense	(54,579)		2		(G)	(54,577)
Interest income	329,012		—			329,012
Contingent consideration	(436,905)		—			(436,905)
Write-down of investment	(1,710,358)		1,710,358		(E)	—
Loss on settlement	(950,575)		—			(950,575)
Other income (expense)	(139,611)		(52,832)		(G)	(192,443)
Total non-operating income (expenses)	(2,963,016)		1,657,528			(1,305,488)
Loss before income taxes	(15,600,001)		(637,990)			(16,237,991)
Income tax benefit	322,092		661,223		(A)	983,315
Net loss	$	(15,277,909)	$	23,233		$	(15,254,676)

Comprehensive loss	$	(15,277,909)	$	23,233	$	(15,254,676)
Loss per share – basic and diluted	$	(1.42)	$	—	$	(1.41)
Weighted average shares – basic and diluted	10,786,967		10,786,967		10,786,967

The following tables presents the effect of the restatement on the Company's previously reported Consolidated Statements of Shareholders' Equity for the years ended December 31, 2023, and December 31, 2022. The values as previously reported were derived from the Company’s Original Form 10-K:

	Common Stock			Additional Paid in Capital		Accumulated Deficit		Treasury Stock		Total Shareholders’ Equity
	Shares	Amount
Balance, December 31, 2023, as originally stated	13,522,669	$	13,523	$	88,901,583	$	(56,798,958)	$	(12,045,542)	$	20,070,606
Adjustments to goodwill due to using incorrect share price at acquisition date for equity portion of acquisition price				(692,946)						(692,946)
Warrants issued to Bancroft in connection with the Promissory Note which were not originally recorded on the balance sheet				181,119						181,119
Various income statement adjustments on or prior to December 31, 2023						(9,473,424)				(9,473,424)
Balance, December 31, 2023, as restated	13,522,669	$	13,523	$	88,389,756	$	(66,272,382)	$	(12,045,542)	$	10,085,355
	Common Stock			Additional Paid in Capital		Accumulated Deficit		Treasury Stock		Total Shareholders’ Equity
	Shares	Amount
Balance, December 31, 2022, as originally stated	12,220,593	$	12,221	$	84,882,982	$	(38,117,897)	$	(12,045,542)	$	34,731,764
Adjustments to goodwill due to using incorrect share price at acquisition date for equity portion of acquisition price				(692,946)						(692,946)
Management instructed transfer agent to issue shares related to vested RSUs after the issuance of the December 31, 2022 10-K with issuance effective dates prior to December 31, 2022	71,511	71		(71)						—
Various income statement adjustments on or prior to December 31, 2022						(2,716,824)				(2,716,824)
Balance, December 31, 2022, as restated	12,292,104	$	12,292	$	84,189,965	$	(40,834,721)	$	(12,045,542)	$	31,321,994

The following tables presents the effect of the restatement on the Company's previously reported Cash Flow Statements for the years ended December 31, 2023 and December 31, 2022. The values as previously reported were derived from the Company’s Original Form 10-K:

	For the Year Ended December 31, 2023
	As		Restatement			As
	Reported		Adjustments		Notes	Restated
Cash flows from operating activities:
Net loss	$	(18,681,061)	$	(6,756,600)	(H)	$	(25,437,661)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	1,636,667		—			1,636,667
Amortization of right-of-use asset	—		460,347		(A)	460,347
Stock-based compensation expense	2,199,046		—			2,199,046
Loss on settlement	—		308,229		(G)	308,229
Loss on legal settlement	1,500,000		—			1,500,000
Write-down of investment	258,492		—			258,492
Impairment of goodwill and intangibles	—		6,273,595		(I)	6,273,595
Change in fair value of contingent consideration	160,232		—			160,232
Change in contingent consideration from indemnification	(917,699)		—			(917,699)
Interest income on investments	735,760		(857,627)		(G)	(121,867)
Changes in operating assets and liabilities (net of acquired amounts):			—
Accounts receivable and contract receivables	(19,245,685)		7,297,065		(C)	(11,948,620)
Prepaid expenses and other assets and property and equipment	2,161,898		363,311		(D)	2,525,209
Accounts payable, contract liabilities, customer deposits, and accrued expenses	19,905,912		(6,925,943)		(C) (D)	12,979,969
Operating lease liability	(690,404)		254,084		(G)	(436,320)
Deferred tax liability	(215,864)		260,177		(A)	44,313
Net cash used in operating activities	(11,192,706)		676,638			(10,516,068)
Cash flows from investing activities:
Sale of investments	2,326,472		96,210		(G)	2,422,682
Purchases of property and equipment	(615,170)		74,676		(G)	(540,494)
Business combinations, net of cash acquired	—		—			—
Net cash provided by (used in) investing activities	1,711,302		170,886			1,882,188
Cash flows from financing activities:
Proceeds from issuance of common stock, net of offering costs	—		—			—
Repurchase of common stock	—		—			—
Additions to notes payable	3,018,400		(518,400)		(G)	2,500,000
Repayment of finance lease liability	(176,572)		19,818		(G)	(156,754)
Payments to settle contingent consideration	(479,362)		—			(479,362)
Repayments of notes payable	(3,776,561)		(132,950)		(G)	(3,909,511)
Net cash used in financing activities	(1,414,095)		(631,532)			(2,045,627)
Net change in cash	(10,895,499)		215,992			(10,679,507)
Cash at beginning of period	12,008,003		(253,654)			11,754,349
Cash at end of period	$	1,112,504	$	(37,662)		$	1,074,842

	For the Year Ended December 31, 2022
	As		Restatement			As
	Reported		Adjustments		Notes	Restated
Cash flows from operating activities:
Net loss	$	(15,277,909)	$	23,233	(H)	$	(15,254,676)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	1,483,065		—			1,483,065
Amortization of right-of-use asset	—		192,955		(A)	192,955
Stock-based compensation expense	2,571,785		—			2,571,785
Loss on settlement	950,575		—			950,575
Write-down of investment	1,710,358		(1,710,358)		(E)	—
Change in fair value of contingent consideration	436,905		—			436,905
Change in contingent consideration from indemnification	—		—			—
Interest income on investments	54,858		(336,545)		(G)	(281,687)
Changes in operating assets and liabilities (net of acquired amounts):			—
Accounts receivable and contract receivables	(2,517,745)		(654,496)		(G)	(3,172,241)
Prepaid expenses and other assets and property and equipment	8,397,707		(471,377)		(D)	7,926,330
Accounts payable, contract liabilities, customer deposits, and accrued expenses	(9,686,483)		3,230,132		(G)	(6,456,351)
Operating lease liability	(413,770)		162,037		(G)	(251,733)
Deferred tax liability	(322,092)		(592,658)		(A)	(914,750)
Customer deposits	—		—			—
Net cash used in operating activities	(12,612,746)		(157,077)			(12,769,823)
Cash flows from investing activities:
Sale of investments	—		222,380		(G)	222,380
Purchases of property and equipment	(580,347)		(94,930)		(G)	(675,277)
Business combinations, net of cash acquired	(3,871,452)		—			(3,871,452)
Net cash provided by (used in) investing activities	(4,451,799)		127,450			(4,324,349)
Cash flows from financing activities:
Proceeds from issuance of common stock, net of offering costs	28,796		1		(G)	28,797
Repurchase of common stock	(4,362,052)		—			(4,362,052)
Additions to notes payable	—		—			—
Repayment of finance lease liability	(146,000)		11,203		(G)	(134,797)
Payments to settle contingent consideration	(1,040,386)		—			(1,040,386)
Repayments of notes payable	—		—			—
Net cash used in financing activities	(5,519,642)		11,204			(5,508,438)
Net change in cash	(22,584,187)		(18,423)			(22,602,610)
Cash at beginning of period	34,592,190		(235,231)			34,356,959
Cash at end of period	$	12,008,003	$	(253,654)		$	11,754,349

See below for a description of the underlying root cause of each material adjustment made in the restatement, which corresponds with the respective lettering in the each of the tables above in this section:

A.The Company adjusted its deferred tax liability entry booked at the time of the Emerald and DVO acquisitions to accurately record the deferred tax liability generated by the acquisitions and then adjusted to release the Company's valuation allowance against the deferred tax liability balance generated through acquisitions.

B.The Company made adjustments to accrue for sales tax payable to various jurisdictions generated from historical invoices where sales tax was not charged to the customer and should have been charged.

C.The Company established accruals for construction projects with negative margins at the time the project was or should have been known to be a negative margin project.

D.The Company adjusted the prepaid balance to expense for instances where the good or service associated with the prepaid balance either had been fully utilized or was no longer available for use by the Company.

E.The Company originally recorded an impairment of its Edyza investment in the third quarter of 2022, however the Company determined the triggering event for the impairment was known prior to fiscal year 2022 and recorded the impairment in the fourth quarter of 2021.

F.The Company recorded an adjustment to record the fair value of the warrants issued to Bancroft in connection with the Promissory Note (see Note 10 for further discussion).

G.These adjustments are comprised of various immaterial adjustments and reclassifications made to correct the Company's accounting records.

H.The adjustment to accumulated deficit and net loss is the result of the cumulative list of restatement adjustments recorded to the income statements in all periods prior to the respective balance sheet date.

I.As a result of the Company’s annual goodwill impairment testing, goodwill and intangible assets were restated to recognize an impairment expense

J.The Company netted accounts receivable and contract liabilities to correct accounting for invoicing prior to year-end that was dependent on future services to be performed

K.The Company adjusted goodwill downward to correctly use the share price as of the date of the Impact, 2WR, and Emerald acquisitions to value the equity portion of the acquisition consideration