Restatement of Previously Issued Financial Statements

3 Months Ended

Mar. 31, 2025

Accounting Changes and Error Corrections [Abstract]

Restatement of Previously Issued Financial Statements

As previously disclosed in Note 2 to the Company’s consolidated financial statements as of and for the year ended December 31, 2024, management identified a material error in the previously reported financial statements related to its convertible notes issued in December 2021 and due in December 2026 (“2026 Notes”). The conversion option embedded within the 2026 Notes was incorrectly deemed to be eligible for a scope exception from the bifurcation requirements of ASC 815-15 and therefore required bifurcation as a derivative (“2026 Notes Conversion Option”). The 2026 Notes include certain adjustments to the conversion rate that violate the “fixed-for-fixed” criteria described in Accounting Standards Codification (“ASC”) 815-40. As a result, the prior period consolidated financial statements have been restated to reflect the issuance of the 2026 Notes Conversion Option at fair value as of December 7, 2021 and the subsequent remeasurement to fair value at each reporting date. Changes in the fair value of the 2026 Notes Conversion Option are recorded in the consolidated statements of operations. Bifurcation of the 2026 Notes Conversion Option from its host results in a discount to the 2026 Notes par value. The amortization of the discount to the par of the 2026 Notes is recorded in the consolidated statements of operations as non-cash interest expense using the effective interest rate method.

The effect of the correction noted above on the Company’s consolidated statement of operations for the quarter ended March 31, 2024 was as follows:


	Three Months Ended March 31, 2024
Unaudited consolidated statements of operations	As reported		Adjustment		Restated
Revenues	$	33,121	$	—	$	33,121
Cost of revenues	26,135		—		26,135
Gross margin	6,986		—		6,986
Operating expenses:
Selling, general and administrative	16,948		—		16,948
Research and development	1,144		—		1,144
Restructuring charges	860		—		860
Transaction expenses	1,103		—		1,103
Goodwill impairment	85,000		—		85,000
Operating loss	(98,069)		—		(98,069)
Net increase in fair value of derivatives	23,992		(185)		23,807

Interest expense	3,555		2,830		6,385
Other income	(455)		—		(455)
Loss before taxes:	(125,161)		(2,645)		(127,806)
Income tax benefit	(14)		—		(14)
Net loss	$	(125,147)	$	(2,645)	$	(127,792)

The effect of the correction noted above on the Company’s consolidated statement of cash flows for the quarter ended March 31, 2024 was as follows:


	Three Months Ended March 31, 2024
Unaudited consolidated statement of cash flows	As reported		Adjustment		Restated
Net loss	$	(125,147)	$	(2,645)	$	(127,792)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense	2,439		—		2,439
Amortization of debt issuance costs and discount	506		2,830		3,336
Equity-based compensation expense	5,157		—		5,157
Goodwill impairment	85,000		—		85,000
Impairment of right-of-use assets	—		—		—
Non-cash lease expense	94		—		94
Provision for doubtful accounts	171		—		171
Deferred income tax benefit	(23)		—		(23)

Net increase in fair value of derivatives	23,992		(185)		23,807

Changes in assets and liabilities:
Increase in accounts receivable	(8,957)		—		(8,957)
Decrease in contract assets	2,443		—		2,443
Decrease in prepaid expenses and other assets	950		—		950
Decrease in accounts payable	(5,960)		—		(5,960)
Increase in accrued liabilities	2,599		—		2,599
Increase in contract liabilities	1,826		—		1,826
Increase (decrease) in derivative liabilities	—		—		—
Increase in other liabilities	551		—		551
Net cash used in operating activities	(14,359)		—		(14,359)
Cash flows from investing activities:
Acquisition of businesses, net of cash acquired	13,935		—		13,935
Purchases of property and equipment	(38)		—		(38)

Capitalized software development costs	(1,643)		—		(1,643)
Net cash provided by investing activities	12,254		—		12,254
Cash flows from financing activities:



Proceeds from issuance of shares for exercised RDO and PIPE warrants	53,809		—		53,809





Repayment of short-term borrowings	(403)		—		(403)


Proceeds from exercise of options	86		—		86
Payments of tax withholding from the issuance of common stock	(2,532)		—		(2,532)





Net cash provided by financing activities	50,960		—		50,960

Net increase in cash and cash equivalents	48,855		—		48,855
Cash and cash equivalents at beginning of year	32,557		—		32,557
Cash and cash equivalents at end of year	$	81,412	$	—	$	81,412