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RESTATEMENT OF CONSOLIDATED FINANCIAL STATEMENTS (Tables)
 6 Months Ended
Dec. 31, 2018
Accounting Changes and Error Corrections [Abstract]  
RESTATEMENT OF CONSOLIDATED FINANCIAL STATEMENTS
A summary of the impact of these matters on income (loss) before taxes is presented below:
($ in thousands)
Increase / (Decrease) Restatement Impact
 
Three months ended December 31, 2017
Audit Committee Investigation-related Adjustments:
 
Revenue
$
(866
)
Costs of sales
$
(1,225
)
Gross profit
$
359

Operating loss
$
359

Loss before income taxes
$
357

 
 
Acquisition and Financial Integration-related Adjustments:
 
Revenue
$
(60
)
Costs of sales
$
(33
)
Gross profit
$
(27
)
Operating loss
$
(288
)
Loss before income taxes
$
(223
)
 
 
Significant Account and Transaction Review and Other:
 
Revenue
$
(47
)
Costs of sales
$
313

Gross profit
$
(360
)
Operating loss
$
(775
)
Loss before income taxes
$
(1,041
)
($ in thousands)
Increase / (Decrease) Restatement Impact
 
Six months ended December 31, 2017
Audit Committee Investigation-related Adjustments:
 
Revenue
$
(1,277
)
Costs of sales
$
(1,060
)
Gross profit
$
(217
)
Operating loss
$
(217
)
Loss before income taxes
$
(219
)
 
 
Acquisition and Financial Integration-related Adjustments:
 
Revenue
$
(60
)
Costs of sales
$
(33
)
Gross profit
$
(27
)
Operating loss
$
(288
)
Loss before income taxes
$
(223
)
 
 
Significant Account and Transaction Review and Other:
 
Revenue
$
6

Costs of sales
$
810

Gross profit
$
(804
)
Operating loss
$
(1,397
)
Loss before income taxes
$
(1,927
)
A summary of the impact of these matters on the condensed consolidated balance sheet is presented below, excluding any tax effect from the restatement adjustments in the aggregate:
($ in thousands)
Increase / (Decrease) Restatement Impact
 
As of December 31, 2017
Audit Committee Investigation-related Adjustments:
 
Accounts receivable
$
(1,774
)
Finance receivables, net
$
(1,269
)
Inventory, net
$
2,166

Prepaid expenses and other current assets
$
25

Other assets
$
76

Property and equipment, net
$
(162
)
Accounts payable
$
106

Accrued expenses
$
580

 
 
Acquisition and Financial Integration-related Adjustments:
 
Cash and cash equivalents
$
(26
)
Accounts receivable
$
1,133

Finance receivables, net
$
(1,324
)
Inventory, net
$
(500
)
Prepaid expenses and other current assets
$
(35
)
Finance receivables due after one year, net
$
(191
)
Other assets
$
(139
)
Property and equipment, net
$
721

Goodwill
$
4,121

Accrued expenses
$
785

Deferred revenue
$
(153
)
Common stock
$
3,469

 
 
Significant Account and Transaction Review and Other:
 
Accounts receivable
$
(8
)
Finance receivables, net
$
371

Inventory, net
$
(861
)
Prepaid expenses and other current assets
$
(150
)
Other assets
$
(600
)
Finance receivables due after one year, net
$
703

Property and equipment, net
$
(737
)
Accounts payable
$
27

Accrued expenses
$
9,087

Capital lease obligation and current obligations under long-term debt
$
367

Capital lease obligation and long-term debt, less current portion
$
697

Deferred revenue
$
(27
)
Deferred gain from sale-leaseback transactions
$
(198
)
Deferred gain from sale-leaseback transactions, less current portion
$
(49
)
Common stock
$
(372
)
The effect of the restatement on the previously filed condensed consolidated balance sheet as of December 31, 2017 is as follows:
 
As of December 31, 2017
($ in thousands)
As Previously Reported
 
Adjustments
 
As Restated
 
 
 
 
 
 
Assets
 
 
 
 
 
Current assets:
 
 
 
 
 
Cash and cash equivalents
$
15,386

 
$
(26
)
 
$
15,360

Accounts receivable
15,472

 
(765
)
 
14,707

Finance receivables, net
5,517

 
(2,221
)
 
3,296

Inventory, net
11,215

 
804

 
12,019

Prepaid expenses and other current assets
1,971

 
(361
)
 
1,610

Total current assets
49,561

 
(2,569
)
 
46,992

 
 
 
 
 
 
Non-current assets:
 
 
 
 
 
Finance receivables due after one year, net
11,215

 
513

 
11,728

Other assets
1,120

 
(662
)
 
458

Property and equipment, net
12,622

 
(179
)
 
12,443

Deferred income taxes
14,774

 
(14,774
)
 
—

Intangibles, net
30,910

 
—

 
30,910

Goodwill
64,449

 
(46
)
 
64,403

Total non-current assets
135,090

 
(15,148
)
 
119,942

 
 
 
 
 
 
Total assets
$
184,651

 
$
(17,717
)
 
$
166,934

 
 
 
 
 
 
Liabilities, convertible preferred stock and shareholders’ equity
 
 
 
 
 
Current liabilities:
 
 
 
 
 
Accounts payable
$
23,775

 
$
133

 
$
23,908

Accrued expenses
6,798

 
9,825

 
16,623

Capital lease obligations, current obligations under long-term debt, and collateralized borrowings
5,121

 
367

 
5,488

Income taxes payable
6

 
(6
)
 
—

Deferred revenue
595

 
135

 
730

Deferred gain from sale-leaseback transactions
198

 
(198
)
 
—

Total current liabilities
36,493

 
10,256

 
46,749

 
 
 
 
 
 
Long-term liabilities:
 
 
 
 
 
Revolving credit facility
10,000

 
—

 
10,000

Deferred income taxes
—

 
91

 
91

Capital lease obligations, long-term debt, and collateralized borrowings, less current portion
23,874

 
696

 
24,570

Accrued expenses, less current portion
65

 
—

 
65

Deferred gain from sale-leaseback transactions, less current portion
49

 
(49
)
 
—

Total long-term liabilities
33,988

 
738

 
34,726

 
 
 
 
 
 
Total liabilities
$
70,481

 
$
10,994

 
$
81,475

Commitments and contingencies


 


 


Convertible preferred stock:
 
 
 
 
 
Series A convertible preferred stock, 900,000 shares authorized, 445,063 issued and outstanding, with liquidation preference of $19,109 at December 31, 2017
—

 
3,138

 
3,138

Shareholders’ equity:
 
 
 
 
 
Preferred stock, no par value, 1,800,000 shares authorized, no shares issued
—

 
—

 
—

Series A convertible preferred stock, 900,000 shares authorized, 445,063 issued and outstanding, with liquidation preference of $19,109 at December 31, 2017
3,138

 
(3,138
)
 
—

Common stock, no par value, 640,000,000 shares authorized, 53,619,898 shares issued and outstanding at December 31, 2017
307,053

 
3,097

 
310,150

Accumulated deficit
(196,021
)
 
(31,808
)
 
(227,829
)
Total shareholders’ equity
114,170

 
(31,849
)
 
82,321

Total liabilities, convertible preferred stock and shareholders’ equity
$
184,651

 
$
(17,717
)
 
$
166,934

The effect of the restatement on the previously filed condensed consolidated statement of operations for the three and six months ended December 31, 2017 is as follows:
 
Three months ended December 31, 2017
($ in thousands, except per share data)
As Previously Reported
 
Adjustments
 
As Restated
 
 
 
 
 
 
Revenue:
 
 
 
 
 
License and transaction fees
$
22,853

 
$
661

 
$
23,514

Equipment sales
9,653

 
(1,635
)
 
8,018

Total revenue
32,506

 
(974
)
 
31,532

 
 
 
 
 
 
Costs of sales:
 
 
 
 
 
Cost of services
14,362

 
(6
)
 
14,356

Cost of equipment
8,943

 
(939
)
 
8,004

Total costs of sales
23,305

 
(945
)
 
22,360

Gross profit
9,201

 
(29
)
 
9,172

 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
Selling, general and administrative
8,329

 
676

 
9,005

Integration and acquisition costs
3,335

 
—

 
3,335

Depreciation and amortization
737

 
—

 
737

Total operating expenses
12,401

 
676

 
13,077

Operating loss
(3,200
)
 
(705
)
 
(3,905
)
 
 
 
 
 
 
Other income (expense):
 
 
 
 
 
Interest income
251

 
73

 
324

Interest expense
(494
)
 
(276
)
 
(770
)
Total other expense, net
(243
)
 
(203
)
 
(446
)
 
 
 
 
 
 
Loss before income taxes
(3,443
)
 
(908
)
 
(4,351
)
(Provision) benefit for income taxes
(9,073
)
 
9,230

 
157

 
 
 
 
 
 
Net loss
(12,516
)
 
8,322

 
(4,194
)
Preferred dividends
—

 
—

 
—

Net loss applicable to common shares
$
(12,516
)
 
$
8,322

 
$
(4,194
)
Net loss per common share
 
 
 
 
 
Basic
$
(0.24
)
 
$
0.16

 
$
(0.08
)
Diluted
$
(0.24
)
 
$
0.16

 
$
(0.08
)
Weighted average number of common shares outstanding
 
 
 
 
 
Basic
52,150,106

 
—

 
52,150,106

Diluted
52,150,106

 
—

 
52,150,106

 
Six months ended December 31, 2017
($ in thousands, except per share data)
As Previously Reported
 
Adjustments
 
As Restated
 
 
 
 
 
 
Revenue:
 
 
 
 
 
License and transaction fees
$
42,797

 
$
114

 
$
42,911

Equipment sales
15,326

 
(1,446
)
 
13,880

Total revenue
58,123

 
(1,332
)
 
56,791

 
 
 
 
 
 
Costs of sales:
 
 
 
 
 
Cost of services
27,688

 
(85
)
 
27,603

Cost of equipment
14,033

 
(198
)
 
13,835

Total costs of sales
41,721

 
(283
)
 
41,438

Gross profit
16,402

 
(1,049
)
 
15,353

 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
Selling, general and administrative
15,075

 
854

 
15,929

Integration and acquisition costs
4,097

 
—

 
4,097

Depreciation and amortization
982

 
—

 
982

Total operating expenses
20,154

 
854

 
21,008

Operating loss
(3,752
)
 
(1,903
)
 
(5,655
)
 
 
 
 
 
 
Other income (expense):
 
 
 
 
 
Interest income
331

 
73

 
404

Interest expense
(703
)
 
(540
)
 
(1,243
)
Total other expense, net
(372
)
 
(467
)
 
(839
)
 
 
 
 
 
 
Loss before income taxes
(4,124
)
 
(2,370
)
 
(6,494
)
(Provision) benefit for income taxes
(8,605
)
 
8,734

 
129

 
 
 
 
 
 
Net loss
(12,729
)
 
6,364

 
(6,365
)
Preferred dividends
(334
)
 
—

 
(334
)
Net loss applicable to common shares
$
(13,063
)
 
$
6,364

 
$
(6,699
)
Net loss per common share
 
 
 
 
 
Basic
$
(0.26
)
 
$
0.13

 
$
(0.13
)
Diluted
$
(0.26
)
 
$
0.13

 
$
(0.13
)
Weighted average number of common shares outstanding
 
 
 
 
 
Basic
49,861,735

 
—

 
49,861,735

Diluted
49,861,735

 
—

 
49,861,735


The effect of the restatement on the previously filed condensed consolidated statement of cash flows for the six months ended December 31, 2017 is as follows:
 
Six months ended December 31, 2017
($ in thousands)
As Previously Reported
 
Adjustments
 
As Restated
 
 
 
 
 
 
OPERATING ACTIVITIES:
 
 
 
 
 
Net loss
$
(12,729
)
 
$
6,364

 
$
(6,365
)
Adjustments to reconcile net loss to net cash provided by operating activities:
 
 
 
 
 
Non-cash stock-based compensation
1,356

 
(372
)
 
984

(Gain) loss on disposal of property and equipment
(83
)
 
3

 
(80
)
Non-cash interest and amortization of debt discount
86

 
8

 
94

Bad debt expense
291

 
91

 
382

Provision for inventory reserve
—

 
1,091

 
1,091

Depreciation and amortization
3,476

 
(198
)
 
3,278

Excess tax benefits
67

 
—

 
67

Deferred income taxes
8,537

 
(8,696
)
 
(159
)
Recognition of deferred gain from sale-leaseback transactions
(93
)
 
93

 
—

Changes in operating assets and liabilities:
 
 
 
 
 
Accounts receivable
(5,290
)
 
(42
)
 
(5,332
)
Finance receivables, net
7,958

 
(626
)
 
7,332

Inventory, net
(5,822
)
 
(1,793
)
 
(7,615
)
Prepaid expenses and other current assets
(606
)
 
604

 
(2
)
Accounts payable and accrued expenses
6,950

 
754

 
7,704

Deferred revenue
—

 
570

 
570

Income taxes payable
40

 
(80
)
 
(40
)
Net cash provided by operating activities
4,138

 
(2,229
)
 
1,909

 
 
 
 
 
 
INVESTING ACTIVITIES:
 
 
 
 
 
Purchase of property and equipment, including rentals
(1,767
)
 
33

 
(1,734
)
Proceeds from sale of property and equipment, including rentals
157

 
—

 
157

Cash paid for acquisitions, net of cash acquired
(65,181
)
 
—

 
(65,181
)
Net cash used in investing activities
(66,791
)
 
33

 
(66,758
)
 
 
 
 
 
 
FINANCING ACTIVITIES:
 
 
 
 
 
Proceeds from transfer of finance receivables
—

 
1,075

 
1,075

Payment of debt issuance costs
(445
)
 
—

 
(445
)
Proceeds from issuance of long-term debt
25,100

 
—

 
25,100

Proceeds from revolving credit facility
10,000

 
—

 
10,000

Issuance of common stock in public offering, net
39,888

 
—

 
39,888

Repayment of line of credit
—

 
(7,111
)
 
(7,111
)
Repayment of capital lease obligations and long-term debt
(9,249
)
 
8,206

 
(1,043
)
Net cash provided by financing activities
65,294

 
2,170

 
67,464

 
 
 
 
 
 
Net increase in cash and cash equivalents
2,641

 
(26
)
 
2,615

Cash and cash equivalents at beginning of year
12,745

 
—

 
12,745

Cash and cash equivalents at end of period
$
15,386

 
$
(26
)
 
$
15,360