RESTATEMENT OF CONSOLIDATED FINANCIAL STATEMENTS

Overview

This Annual Report on Form 10-K for the fiscal year ended June 30, 2019 contains our audited consolidated financial statements for the fiscal years ended June 30, 2019 and 2018, which have not previously been filed, as well as restatements of the following previously filed consolidated financial statements: (i) our audited consolidated financial statements for the fiscal year ended June 30, 2017; (ii) our selected financial data as of and for the fiscal years ended June 30, 2017, 2016 and 2015 contained in Item 6 of this Form 10-K; and (iii) our unaudited consolidated financial statements for the fiscal quarters ended September 30, 2017 and 2016, December 31, 2017 and 2016, March 31, 2018 and 2017, and June 30, 2017 in Note 20, “Unaudited Quarterly Data” of the Notes to Consolidated Financial Statements.

We have not filed and do not intend to file amendments to any of our previously filed Annual Reports on Form 10-K or Quarterly Reports on Form 10-Q for the periods affected by the restatements of our consolidated financial statements. In addition, we have not filed and do not intend to file a separate Annual Report on Form 10-K for the fiscal year ended June 30, 2018. Concurrent with this filing, we are filing our Quarterly Reports on Form 10-Q for each of the fiscal quarters ended September 30, 2018, December 31, 2018, and March 31, 2019 (the “Fiscal Year 2019 Form 10-Qs”). We have not timely filed our Annual Report on Form 10-K for the fiscal year ended June 30, 2018 and the Fiscal Year 2019 Form 10-Qs as a result of the internal investigation of the Audit Committee of the Company’s Board of Directors (the “Audit Committee”) and the subsequent restatement of certain of our prior period financial statements as more fully described below.

Background

On September 11, 2018, the Company announced that the Audit Committee with the assistance of independent legal and forensic accounting advisors, was in the process of conducting an internal investigation of current and prior period matters relating to certain of the Company’s contractual arrangements, including the accounting treatment, financial reporting and internal controls related to such arrangements. The Audit Committee’s investigation focused principally on certain customer transactions entered into by the Company during fiscal years 2017 and 2018.

On January 14, 2019, the Company reported that the Audit Committee’s internal investigation relating to accounting and reporting matters was substantially completed, the principal findings of the internal investigation, and the remedial actions to be implemented by the Company as a result of the internal investigation. The Audit Committee found that, for certain of the customer transactions under review, the Company had prematurely recognized revenue. The Audit Committee proposed certain adjustments to previously reported revenues related to fiscal quarters occurring during the 2017 and 2018 fiscal years of the Company. In most cases, revenues that had been recognized prematurely were, or were expected to be, recognized in subsequent quarters, including quarters subsequent to the quarters impacted by the investigative findings. The investigation further found that certain items that had been recorded as expenses, such as the payment of marketing or servicing fees, were more appropriately treated as contra-revenue items in earlier fiscal quarters.

On February 4, 2019, the Board of Directors of the Company, upon the recommendation of the Audit Committee, and based upon the adjustments to previously reported revenues proposed by the Audit Committee, determined that the following financial statements previously issued by the Company should no longer be relied upon: (1) the audited consolidated financial statements for the fiscal year ended June 30, 2017; and (2) the quarterly and year-to-date unaudited consolidated financial statements for September 30, 2017, December 31, 2017, and March 31, 2018.

In addition to the Audit Committee investigation matter described above, the Company also corrected for (i) out of period adjustments and errors related to the Company's acquisition and financial integration of Cantaloupe and (ii) out of period adjustments and errors identified during management's review of significant accounts and transactions.

The acquisition and financial integration-related adjustments referred to in (i) above were made in the restatement and relate to errors in the purchase accounting for our acquisition of Cantaloupe and errors in periods subsequent to the acquisition resulting from an ineffective integration of the financial systems and processes of the acquired entity with those of the Company.

The significant account and transaction review adjustments referred to in (ii) above were made in the restatement and relate to revenue recognition, deferred income tax accounting, sales-tax reserves, reserves for bad debts, inventory reserves, sale-leaseback accounting, balance sheet classification of preferred stock, and various other matters.

On October 7, 2019, the Board of Directors of the Company, upon the recommendation of the Audit Committee, determined that the following financial statements previously issued by the Company should no longer be relied upon: (1) the audited consolidated financial statements for the fiscal year ended June 30, 2015; (2) the audited consolidated financial statements for the fiscal year ended June 30, 2016; and (3) the quarterly and year-to-date unaudited consolidated financial statements for September 30, 2016, December 31, 2016, and March 31, 2017.

Effect of Restatement on Previously Filed June 30, 2017 Form 10-K

A summary of the impact of these matters on income (loss) before taxes is presented below:



($ in thousands)	Increase / (Decrease) Restatement Impact
	Year ended June 30, 2017
Audit Committee Investigation-related Adjustments:
Revenue	$	(2,568	)
Costs of sales	$	(1,163	)
Gross profit	$	(1,405	)
Operating income (loss)	$	(1,405	)
Loss before income taxes	$	(1,405	)

Significant Account and Transaction Review and Other:
Revenue	$	(89	)
Costs of sales	$	91
Gross profit	$	(180	)
Operating income (loss)	$	(2,864	)
Loss before income taxes	$	(4,200	)

A summary of the impact of these matters on the 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 June 30, 2017
Audit Committee Investigation-related Adjustments:
Accounts receivable	$	(284	)
Finance receivables, net	$	(1,267	)
Inventory, net	$	1,106
Prepaid expenses and other current assets	$	25
Other assets	$	88
Accounts payable	$	270
Accrued expenses	$	803

Significant Account and Transaction Review and Other:
Accounts receivable	$	(75	)
Inventory, net	$	(500	)
Prepaid expenses and other current assets	$	(114	)
Other assets	$	(456	)
Property and equipment, net	$	(1,000	)
Accounts payable	$	21
Accrued expenses	$	7,235
Capital lease obligation and current obligations under long-term debt	$	(32	)
Deferred revenue	$	(27	)
Deferred gain from sale-leaseback transactions	$	(239	)
Deferred gain from sale-leaseback transactions, less current portion	$	(100	)

The restatement adjustments related to fiscal years 2016 and 2015 are reflected in the beginning accumulated deficit and deferred income taxes balances in the consolidated financial statements for fiscal year 2017. The cumulative impact of these adjustments increased accumulated deficit and decreased deferred income taxes by approximately $32.6 million and $27.8 million, respectively, at the beginning of fiscal year 2017. The restatement adjustments were tax effected and any tax adjustments reflected in the consolidated financial statements for fiscal year 2017 relate entirely to the tax effect on the restatement adjustments.

The tables below present the effect of the financial statement adjustments related to the restatement discussed above of the Company's previously reported financial statements as of and for the year ended June 30, 2017.

The effect of the restatement on the previously filed consolidated balance sheet as of June 30, 2017 is as follows:



	As of June 30, 2017
($ in thousands, except per share data)	As Previously Reported			Adjustments			As Restated

Assets
Current assets:
Cash and cash equivalents	$	12,745		$	—		$	12,745
Accounts receivable	7,193			(359		)	6,834
Finance receivables, net	11,010			(1,267		)	9,743
Inventory, net	4,586			606			5,192
Prepaid expenses and other current assets	968			(89		)	879
Total current assets	36,502			(1,109		)	35,393

Non-current assets:
Finance receivables due after one year	8,607			—			8,607
Other assets	687			(368		)	319
Property and equipment, net	12,111			(1,000		)	11,111
Deferred income taxes	27,670			(27,670		)	—
Intangibles, net	622			—			622
Goodwill	11,492			—			11,492
Total non-current assets	61,189			(29,038		)	32,151

Total assets	$	97,691		$	(30,147	)	$	67,544

Liabilities, convertible preferred stock and shareholders’ equity
Current liabilities:
Accounts payable	$	16,054		$	291		$	16,345
Accrued expenses	4,130			7,743			11,873
Line of credit, net	7,036			—			7,036
Capital lease obligations and current obligations under long-term debt	3,230			(32		)	3,198
Income taxes payable	10			—			10
Deferred revenue	—			268			268
Deferred gain from sale-leaseback transactions	239			(239		)	—
Total current liabilities	30,699			8,031			38,730

Long-term liabilities:
Deferred income taxes	—			94			94
Capital lease obligations and long-term debt, less current portion	1,061			—			1,061
Accrued expenses, less current portion	53			—			53
Deferred gain from sale-leaseback transactions, less current portion	100			(100		)	—
Total long-term liabilities	1,214			(6		)	1,208

Total liabilities	$	31,913		$	8,025		$	39,938
Commitments and contingencies
Convertible preferred stock:
Series A convertible preferred stock, 900,000 shares authorized, 445,063 issued and outstanding, with liquidation preference of $18,775 at June 30, 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 $18,775 at June 30, 2017	3,138			(3,138		)	—
Common stock, no par value, 640,000,000 shares authorized, 40,331,645 shares issued and outstanding at June 30, 2017	245,999			—			245,999
Accumulated deficit	(183,359		)	(38,172		)	(221,531		)
Total shareholders’ equity	65,778			(41,310		)	24,468
Total liabilities, convertible preferred stock and shareholders’ equity	$	97,691		$	(30,147	)	$	67,544

The effect of the restatement on the previously filed consolidated statement of operations for the year ended June 30, 2017 is as follows:



	Year ended June 30, 2017
($ in thousands, except per share data)	As Previously Reported			Adjustments			As Restated

Revenue:
License and transaction fees	$	69,142		$	(8	)	$	69,134
Equipment sales	34,951			(2,649		)	32,302
Total revenue	104,093			(2,657		)	101,436

Costs of sales:
Cost of services	47,053			(533		)	46,520
Cost of equipment	30,394			(539		)	29,855
Total costs of sales	77,447			(1,072		)	76,375
Gross profit	26,646			(1,585		)	25,061

Operating expenses:
Selling, general and administrative	25,493			2,684			28,177
Depreciation and amortization	1,018			—			1,018
Total operating expenses	26,511			2,684			29,195
Operating income (loss)	135			(4,269		)	(4,134		)

Other income (expense):
Interest income	482			—			482
Interest expense	(892		)	(1,336		)	(2,228		)
Change in fair value of warrant liabilities	(1,490		)	—			(1,490		)
Total other expense, net	(1,900		)	(1,336		)	(3,236		)

Loss before income taxes	(1,765		)	(5,605		)	(7,370		)
Provision for income taxes	(87		)	(8		)	(95		)

Net loss	(1,852		)	(5,613		)	(7,465		)
Preferred dividends	(668		)	—			(668		)
Net loss applicable to common shares	$	(2,520	)	$	(5,613	)	$	(8,133	)
Net loss per common share
Basic	$	(0.06	)	$	(0.14	)	$	(0.20	)
Diluted	$	(0.06	)	$	(0.14	)	$	(0.20	)
Weighted average number of common shares outstanding
Basic	39,860,335			—			39,860,335
Diluted	39,860,335			—			39,860,335

The effect of the restatement on the previously filed consolidated statement of cash flows for the year ended June 30, 2017 is as follows:



	Year ended June 30, 2017
($ in thousands)	As Previously Reported			Adjustments			As Restated

OPERATING ACTIVITIES:
Net loss	$	(1,852	)	$	(5,613	)	$	(7,465	)
Adjustments to reconcile net loss to net cash used in operating activities:
Non-cash stock-based compensation	1,214			—			1,214
(Gain) loss on disposal of property and equipment	(177		)	—			(177		)
Non-cash interest and amortization of debt discount	113			—			113
Bad debt expense	764			(207		)	557
Provision for inventory reserve	—			877			877
Depreciation and amortization	5,591			365			5,956
Change in fair value of warrant liabilities	1,490			—			1,490
Deferred income taxes, net	54			8			62
Recognition of deferred gain from sale-leaseback transactions	(560		)	560			—
Changes in operating assets and liabilities:
Accounts receivable	(2,988		)	450			(2,538		)
Finance receivables, net	(12,119		)	1,287			(10,832		)
Inventory, net	(2,399		)	(2,064		)	(4,463		)
Prepaid expenses and other current assets	(304		)	457			153
Accounts payable and accrued expenses	4,410			4,464			8,874
Deferred revenue	—			115			115
Income taxes payable	(8		)	—			(8		)
Net cash used in operating activities	(6,771		)	699			(6,072		)

INVESTING ACTIVITIES:
Purchase of property and equipment, including rentals	(4,041		)	254			(3,787		)
Proceeds from sale of property and equipment	348			—			348
Net cash used in investing activities	(3,693		)	254			(3,439		)

FINANCING ACTIVITIES:
Cash used in retirement of common stock	(31		)	—			(31		)
Proceeds from exercise of common stock warrants	6,193			—			6,193
Payment of debt issuance costs	(90		)	—			(90		)
Repayment of line of credit	(106		)	—			(106		)
Repayment of capital lease obligations and long-term debt	(2,029		)	(953		)	(2,982		)
Net cash provided by financing activities	3,937			(953		)	2,984

Net decrease in cash and cash equivalents	(6,527		)	—			(6,527		)
Cash and cash equivalents at beginning of year	19,272			—			19,272
Cash and cash equivalents at end of year	$	12,745		$	—		$	12,745

The effect of the restatement on the previously filed consolidated balance sheet as of September 30, 2017 is as follows:



	As of September 30, 2017
($ in thousands, except per share data)	As Previously Reported			Adjustments			As Restated

Assets
Current assets:
Cash and cash equivalents	$	51,870		$	—		$	51,870
Accounts receivable	10,288			(473		)	9,815
Finance receivables, net	3,082			(1,641		)	1,441
Inventory, net	8,240			636			8,876
Prepaid expenses and other current assets	1,122			(66		)	1,056
Total current assets	74,602			(1,544		)	73,058

Non-current assets:
Finance receivables due after one year	7,742			—			7,742
Other assets	750			(461		)	289
Property and equipment, net	11,850			(1,149		)	10,701
Deferred income taxes	28,205			(28,205		)	—
Intangibles, net	578			—			578
Goodwill	11,492			—			11,492
Total non-current assets	60,617			(29,815		)	30,802

Total assets	$	135,219		$	(31,359	)	$	103,860

Liabilities, convertible preferred stock and shareholders’ equity
Current liabilities:
Accounts payable	$	14,211		$	295		$	14,506
Accrued expenses	3,795			8,422			12,217
Line of credit, net	7,051			—			7,051
Capital lease obligations and current obligations under long-term debt	2,649			(21		)	2,628
Income taxes payable	10			(10		)	—
Deferred revenue	—			439			439
Deferred gain from sale-leaseback transactions	197			(197		)	—
Total current liabilities	27,913			8,928			36,841

Long-term liabilities:
Deferred income taxes	—			109			109
Capital lease obligations and long-term debt, less current portion	1,049			—			1,049
Accrued expenses, less current portion	62			—			62
Deferred gain from sale-leaseback transactions, less current portion	99			(99		)	—
Total long-term liabilities	1,210			10			1,220

Total liabilities	$	29,123		$	8,938		$	38,061
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 September 30, 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 September 30, 2017	3,138			(3,138		)	—
Common stock, no par value, 640,000,000 shares authorized, 50,194,731 shares issued and outstanding at September 30, 2017	286,463			(167		)	286,296
Accumulated deficit	(183,505		)	(40,130		)	(223,635		)
Total shareholders’ equity	106,096			(43,435		)	62,661
Total liabilities, convertible preferred stock and shareholders’ equity	$	135,219		$	(31,359	)	$	103,860

The effect of the restatement on the previously filed consolidated statement of operations for the three months ended September 30, 2017 is as follows:



	Three months ended September 30, 2017
($ in thousands, except per share data)	As Previously Reported			Adjustments			As Restated

Revenue:
License and transaction fees	$	19,944		$	(547	)	$	19,397
Equipment sales	5,673			189			5,862
Total revenue	25,617			(358		)	25,259

Costs of sales:
Cost of services	13,326			(79		)	13,247
Cost of equipment	5,090			741			5,831
Total costs of sales	18,416			662			19,078
Gross profit	7,201			(1,020		)	6,181

Operating expenses:
Selling, general and administrative	6,746			178			6,924
Integration and acquisition costs	762			—			762
Depreciation and amortization	245			—			245
Total operating expenses	7,753			178			7,931
Operating loss	(552		)	(1,198		)	(1,750		)

Other income (expense):
Interest income	80			—			80
Interest expense	(209		)	(264		)	(473		)
Total other expense, net	(129		)	(264		)	(393		)

Loss before income taxes	(681		)	(1,462		)	(2,143		)
Benefit (provision) for income taxes	468			(496		)	(28		)

Net loss	(213		)	(1,958		)	(2,171		)
Preferred dividends	(334		)	—			(334		)
Net loss applicable to common shares	$	(547	)	$	(1,958	)	$	(2,505	)
Net loss per common share
Basic	$	(0.01	)	$	(0.04	)	$	(0.05	)
Diluted	$	(0.01	)	$	(0.04	)	$	(0.05	)
Weighted average number of common shares outstanding
Basic	47,573,364			—			47,573,364
Diluted	47,573,364			—			47,573,364

The effect of the restatement on the previously filed consolidated statement of cash flows for the three months ended September 30, 2017 is as follows:



	Three months ended September 30, 2017
($ in thousands)	As Previously Reported			Adjustments			As Restated

OPERATING ACTIVITIES:
Net loss	$	(213	)	$	(1,958	)	$	(2,171	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Non-cash stock-based compensation	576			(167		)	409
(Gain) loss on disposal of property and equipment	(18		)	—			(18		)
Non-cash interest and amortization of debt discount	15			2			17
Bad debt expense	118			50			168
Provision for inventory reserve	—			221			221
Depreciation and amortization	1,492			(122		)	1,370
Excess tax benefits	67			—			67
Deferred income taxes, net	(535		)	551			16
Recognition of deferred gain from sale-leaseback transactions	(43		)	43			—
Changes in operating assets and liabilities:
Accounts receivable	(3,192		)	43			(3,149		)
Finance receivables, net	8,771			397			9,168
Inventory, net	(3,648		)	(252		)	(3,900		)
Prepaid expenses and other current assets	(217		)	114			(103		)
Accounts payable and accrued expenses	(2,168		)	678			(1,490		)
Deferred revenue	—			171			171
Income taxes payable	—			(55		)	(55		)
Net cash provided by operating activities	1,005			(284		)	721

INVESTING ACTIVITIES:
Purchase of property and equipment, including rentals	(992		)	272			(720		)
Proceeds from sale of property and equipment	45			—			45
Net cash used in investing activities	(947		)	272			(675		)

FINANCING ACTIVITIES:
Issuance of common stock in public offering, net	39,888			—			39,888
Repayment of capital lease obligations and long-term debt	(821		)	12			(809		)
Net cash provided by financing activities	39,067			12			39,079

Net increase in cash and cash equivalents	39,125			—			39,125
Cash and cash equivalents at beginning of year	12,745			—			12,745
Cash and cash equivalents at end of period	$	51,870		$	—		$	51,870

The effect of the restatement on the previously filed consolidated balance sheet as of December 31, 2017 is as follows:



	As of December 31, 2017
($ in thousands, except per share data)	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	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 consolidated statement of operations for the three and six months ended December 31, 2017 is as follows:



	Three months ended December 31, 2017									Six months ended December 31, 2017
($ in thousands, except per share data)	As Previously Reported			Adjustments			As Restated			As Previously Reported			Adjustments			As Restated

Revenue:
License and transaction fees	$	22,853		$	661		$	23,514		$	42,797		$	114		$	42,911
Equipment sales	9,653			(1,635		)	8,018			15,326			(1,446		)	13,880
Total revenue	32,506			(974		)	31,532			58,123			(1,332		)	56,791

Costs of sales:
Cost of services	14,362			(6		)	14,356			27,688			(85		)	27,603
Cost of equipment	8,943			(939		)	8,004			14,033			(198		)	13,835
Total costs of sales	23,305			(945		)	22,360			41,721			(283		)	41,438
Gross profit	9,201			(29		)	9,172			16,402			(1,049		)	15,353

Operating expenses:
Selling, general and administrative	8,329			676			9,005			15,075			854			15,929
Integration and acquisition costs	3,335			—			3,335			4,097			—			4,097
Depreciation and amortization	737			—			737			982			—			982
Total operating expenses	12,401			676			13,077			20,154			854			21,008
Operating loss	(3,200		)	(705		)	(3,905		)	(3,752		)	(1,903		)	(5,655		)

Other income (expense):
Interest income	251			73			324			331			73			404
Interest expense	(494		)	(276		)	(770		)	(703		)	(540		)	(1,243		)
Total other expense, net	(243		)	(203		)	(446		)	(372		)	(467		)	(839		)

Loss before income taxes	(3,443		)	(908		)	(4,351		)	(4,124		)	(2,370		)	(6,494		)
(Provision) benefit for income taxes	(9,073		)	9,230			157			(8,605		)	8,734			129

Net loss	(12,516		)	8,322			(4,194		)	(12,729		)	6,364			(6,365		)
Preferred dividends	—			—			—			(334		)	—			(334		)
Net loss applicable to common shares	$	(12,516	)	$	8,322		$	(4,194	)	$	(13,063	)	$	6,364		$	(6,699	)
Net loss per common share
Basic	$	(0.24	)	$	0.16		$	(0.08	)	$	(0.26	)	$	0.13		$	(0.13	)
Diluted	$	(0.24	)	$	0.16		$	(0.08	)	$	(0.26	)	$	0.13		$	(0.13	)
Weighted average number of common shares outstanding
Basic	52,150,106			—			52,150,106			49,861,735			—			49,861,735
Diluted	52,150,106			—			52,150,106			49,861,735			—			49,861,735

The effect of the restatement on the previously filed 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, net	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	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 collateralized borrowing from the 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	(2,138		)	1,095			(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

The effect of the restatement on the previously filed consolidated balance sheet as of March 31, 2018 is as follows:



	As of March 31, 2018
($ in thousands, except per share data)	As Previously Reported			Adjustments			As Restated

Assets
Current assets:
Cash and cash equivalents	$	17,107		$	(52	)	$	17,055
Accounts receivable	23,166			(3,723		)	19,443
Finance receivables, net	3,904			(1,670		)	2,234
Inventory, net	11,030			893			11,923
Prepaid expenses and other current assets	1,869			(591		)	1,278
Total current assets	57,076			(5,143		)	51,933

Non-current assets:
Finance receivables due after one year	9,679			191			9,870
Other assets	1,214			(800		)	414
Property and equipment, net	12,198			45			12,243
Deferred income taxes	16,911			(16,911		)	—
Intangibles, net	30,119			—			30,119
Goodwill	64,196			(47		)	64,149
Total non-current assets	134,317			(17,522		)	116,795

Total assets	$	191,393		$	(22,665	)	$	168,728

Liabilities, convertible preferred stock and shareholders’ equity
Current liabilities:
Accounts payable	$	29,446		$	128		$	29,574
Accrued expenses	7,961			10,547			18,508
Capital lease obligations and current obligations under long-term debt	4,475			(5		)	4,470
Deferred revenue	441			70			511
Deferred gain from sale-leaseback transactions	198			(198		)	—
Total current liabilities	42,521			10,542			53,063

Long-term liabilities:
Revolving credit facility	10,000			—			10,000
Deferred income taxes	—			96			96
Capital lease obligations and long-term debt, less current portion	22,895			—			22,895
Accrued expenses, less current portion	66			—			66
Total long-term liabilities	32,961			96			33,057

Total liabilities	$	75,482		$	10,638		$	86,120
Commitments and contingencies
Convertible preferred stock:
Series A convertible preferred stock, 900,000 shares authorized, 445,063 issued and outstanding, with liquidation preference of $19,443 at March 31, 2018	—			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 $19,443 at March 31, 2018	3,138			(3,138		)	—
Common stock, no par value, 640,000,000 shares authorized, 53,666,718 shares issued and outstanding at March 31, 2018	307,634			2,888			310,522
Accumulated deficit	(194,861		)	(36,191		)	(231,052		)
Total shareholders’ equity	115,911			(36,441		)	79,470
Total liabilities, convertible preferred stock and shareholders’ equity	$	191,393		$	(22,665	)	$	168,728

The effect of the restatement on the previously filed consolidated statement of operations for the three and nine months ended March 31, 2018 is as follows:



	Three months ended March 31, 2018									Nine months ended March 31, 2018
($ in thousands, except per share data)	As Previously Reported			Adjustments			As Restated			As Previously Reported			Adjustments			As Restated

Revenue:
License and transaction fees	$	27,020		$	(1,639	)	$	25,381		$	69,817		$	(1,525	)	$	68,292
Equipment sales	8,812			(601		)	8,211			24,138			(2,047		)	22,091
Total revenue	35,832			(2,240		)	33,592			93,955			(3,572		)	90,383

Costs of sales:
Cost of services	16,012			25			16,037			43,700			(60		)	43,640
Cost of equipment	7,876			(166		)	7,710			21,909			(364		)	21,545
Total costs of sales	23,888			(141		)	23,747			65,609			(424		)	65,185
Gross profit	11,944			(2,099		)	9,845			28,346			(3,148		)	25,198

Operating expenses:
Selling, general and administrative	9,572			57			9,629			24,647			911			25,558
Integration and acquisition costs	1,747			(70		)	1,677			5,844			(70		)	5,774
Depreciation and amortization	1,125			(20		)	1,105			2,107			(20		)	2,087
Total operating expenses	12,444			(33		)	12,411			32,598			821			33,419
Operating loss	(500		)	(2,066		)	(2,566		)	(4,252		)	(3,969		)	(8,221		)

Other income (expense):
Interest income	134			92			226			465			165			630
Interest expense	(612		)	(251		)	(863		)	(1,315		)	(791		)	(2,106		)
Total other expense, net	(478		)	(159		)	(637		)	(850		)	(626		)	(1,476		)

Loss before income taxes	(978		)	(2,225		)	(3,203		)	(5,102		)	(4,595		)	(9,697		)
Benefit (provision) for income taxes	2,138			(2,158		)	(20		)	(6,467		)	6,576			109

Net income (loss)	1,160			(4,383		)	(3,223		)	(11,569		)	1,981			(9,588		)
Preferred dividends	(334		)	—			(334		)	(668		)	—			(668		)
Net income (loss) applicable to common shares	$	826		$	(4,383	)	$	(3,557	)	$	(12,237	)	$	1,981		$	(10,256	)
Net income (loss) per common share
Basic	$	0.02		$	(0.09	)	$	(0.07	)	$	(0.24	)	$	0.04		$	(0.20	)
Diluted	$	0.02		$	(0.09	)	$	(0.07	)	$	(0.24	)	$	0.04		$	(0.20	)
Weighted average number of common shares outstanding
Basic	53,637,085			—			53,637,085			51,101,813			—			51,101,813
Diluted	54,234,566			(597,481		)	53,637,085			51,101,813			—			51,101,813

The effect of the restatement on the previously filed consolidated statement of cash flows for the nine months ended March 31, 2018 is as follows:



	Nine months ended March 31, 2018
($ in thousands)	As Previously Reported			Adjustments			As Restated

OPERATING ACTIVITIES:
Net loss	$	(11,569	)	$	1,981		$	(9,588	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Non-cash stock-based compensation	2,005			(581		)	1,424
(Gain) loss on disposal of property and equipment	(112		)	13			(99		)
Non-cash interest and amortization of debt discount	100			18			118
Bad debt expense	506			4			510
Provision for inventory reserve	—			1,361			1,361
Depreciation and amortization	5,858			(272		)	5,586
Excess tax benefits	67			—			67
Deferred income taxes, net	6,400			(6,554		)	(154		)
Recognition of deferred gain from sale-leaseback transactions	(143		)	143			—
Changes in operating assets and liabilities:
Accounts receivable	(12,972		)	3,008			(9,964		)
Finance receivables, net	11,114			(2,912		)	8,202
Sale of finance receivables	—			2,051			2,051
Inventory, net	(5,624		)	(2,153		)	(7,777		)
Prepaid expenses and other current assets	(564		)	919			355
Accounts payable and accrued expenses	13,808			1,447			15,255
Deferred revenue	(185		)	536			351
Income taxes payable	—			(30		)	(30		)
Net cash provided by operating activities	8,689			(1,021		)	7,668

INVESTING ACTIVITIES:
Purchase of property and equipment, including rentals	(3,005		)	(133		)	(3,138		)
Proceeds from sale of property and equipment	252			—			252
Cash paid for acquisitions, net of cash acquired	(65,181		)	—			(65,181		)
Net cash used in investing activities	(67,934		)	(133		)	(68,067		)

FINANCING ACTIVITIES:
Proceeds from collateralized borrowing from the transfer of finance receivables	—			1,075			1,075
Cash used in retirement of common stock	(156		)	—			(156		)
Proceeds from exercise of common stock options	109			—			109
Payment of debt issuance costs	(445		)	—			(445		)
Proceeds from issuance of long-term debt	25,100			—			25,100
Proceeds from revolving credit facility	12,500			—			12,500
Repayment of revolving credit facility	(2,500		)	—			(2,500		)
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	(3,778		)	27			(3,751		)
Net cash provided by financing activities	63,607			1,102			64,709

Net increase in cash and cash equivalents	4,362			(52		)	4,310
Cash and cash equivalents at beginning of year	12,745			—			12,745
Cash and cash equivalents at end of period	$	17,107		$	(52	)	$	17,055

The effect of the restatement on the previously filed consolidated balance sheet as of September 30, 2016 is as follows:



	As of September 30, 2016
($ in thousands, except per share data)	As Previously Reported			Adjustments			As Restated

Assets
Current assets:
Cash and cash equivalents	$	18,198		$	—		$	18,198
Accounts receivable	5,840			(233		)	5,607
Finance receivables, net	3,349			—			3,349
Inventory, net	4,264			(338		)	3,926
Prepaid expenses and other current assets	1,439			(87		)	1,352
Deferred income taxes	2,271			(2,271		)	—
Total current assets	35,361			(2,929		)	32,432

Non-current assets:
Finance receivables due after one year	3,962			—			3,962
Other assets	163			—			163
Property and equipment, net	9,570			2,866			12,436
Deferred income taxes	25,568			(25,568		)	—
Intangibles, net	754			—			754
Goodwill	11,703			—			11,703
Total non-current assets	51,720			(22,702		)	29,018

Total assets	$	87,081		$	(25,631	)	$	61,450

Liabilities, convertible preferred stock and shareholders’ equity
Current liabilities:
Accounts payable	$	8,693		$	17		$	8,710
Accrued expenses	3,912			4,223			8,135
Line of credit, net	7,258			13			7,271
Capital lease obligations and current obligations under long-term debt	834			4,118			4,952
Income taxes payable	8			7			15
Deferred revenue	—			94			94
Deferred gain from sale-leaseback transactions	685			(685		)	—
Total current liabilities	21,390			7,787			29,177

Long-term liabilities:
Deferred income tax	—			47			47
Capital lease obligations and long-term debt, less current portion	1,517			—			1,517
Accrued expenses, less current portion	11			—			11
Total long-term liabilities	1,528			47			1,575

Total liabilities	$	22,918		$	7,834		$	30,752
Commitments and contingencies
Convertible preferred stock:
Series A convertible preferred stock, 900,000 shares authorized, 445,063 issued and outstanding, with liquidation preference of $18,442 at September 30, 2016	—			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 $18,442 at September 30, 2016	3,138			(3,138		)	—
Common stock, no par value, 640,000,000 shares authorized, 40,295,425 shares issued and outstanding at September 30, 2016	244,996			—			244,996
Accumulated deficit	(183,971		)	(33,465		)	(217,436		)
Total shareholders’ equity	64,163			(36,603		)	27,560
Total liabilities, convertible preferred stock and shareholders’ equity	$	87,081		$	(25,631	)	$	61,450

The effect of the restatement on the previously filed consolidated statement of operations for the three months ended September 30, 2016 is as follows:



	Three months ended September 30, 2016
($ in thousands, except per share data)	As Previously Reported			Adjustments			As Restated

Revenue:
License and transaction fees	$	16,365		$	(2	)	$	16,363
Equipment sales	5,223			(17		)	5,206
Total revenue	21,588			(19		)	21,569

Costs of sales:
Cost of services	11,243			(144		)	11,099
Cost of equipment	4,178			(5		)	4,173
Total costs of sales	15,421			(149		)	15,272
Gross profit	6,167			130			6,297

Operating expenses:
Selling, general and administrative	6,909			563			7,472
Depreciation and amortization	208			—			208
Total operating expenses	7,117			563			7,680
Operating loss	(950		)	(433		)	(1,383		)

Other income (expense):
Interest income	73			—			73
Interest expense	(212		)	(335		)	(547		)
Change in fair value of warrant liabilities	(1,490		)	—			(1,490		)
Total other expense, net	(1,629		)	(335		)	(1,964		)

Loss before income taxes	(2,579		)	(768		)	(3,347		)
Benefit (provision) for income taxes	115			(138		)	(23		)

Net loss	(2,464		)	(906		)	(3,370		)
Preferred dividends	(334		)	—			(334		)
Net loss applicable to common shares	$	(2,798	)	$	(906	)	$	(3,704	)
Net loss per common share
Basic	$	(0.07	)	$	(0.03	)	$	(0.10	)
Diluted	$	(0.07	)	$	(0.03	)	$	(0.10	)
Weighted average number of common shares outstanding
Basic	38,488,005			—			38,488,005
Diluted	38,488,005			—			38,488,005

The effect of the restatement on the previously filed consolidated statement of cash flows for the three months ended September 30, 2016 is as follows:



	Three months ended September 30, 2016
($ in thousands)	As Previously Reported			Adjustments			As Restated

OPERATING ACTIVITIES:
Net loss	$	(2,464	)	$	(906	)	$	(3,370	)
Adjustments to reconcile net loss to net cash used in operating activities:
Non-cash stock-based compensation	211			—			211
Non-cash interest and amortization of debt discount	105			34			139
Bad debt expense	97			102			199
Provision for inventory reserve	—			248			248
Depreciation and amortization	1,301			302			1,603
Change in fair value of warrant liabilities	1,490			—			1,490
Deferred income taxes, net	(115		)	130			15
Recognition of deferred gain from sale-leaseback transactions	(215		)	215			—
Changes in operating assets and liabilities:
Accounts receivable	(1,038		)	35			(1,003		)
Finance receivables, net	(5		)	—			(5		)
Inventory, net	(2,223		)	(490		)	(2,713		)
Prepaid expenses and other current assets	(224		)	100			(124		)
Accounts payable and accrued expenses	(3,175		)	632			(2,543		)
Deferred revenue	—			(59		)	(59		)
Income taxes payable	(10		)	7			(3		)
Net cash used in operating activities	(6,265		)	350			(5,915		)

INVESTING ACTIVITIES:
Purchase of property and equipment, including rentals	(810		)	187			(623		)
Net cash used in investing activities	(810		)	187			(623		)

FINANCING ACTIVITIES:
Cash used in retirement of common stock	(31		)	—			(31		)
Proceeds from exercise of common stock warrants	6,193			—			6,193
Repayment of capital lease obligations and long-term debt	(161		)	(537		)	(698		)
Net cash provided by financing activities	6,001			(537		)	5,464

Net decrease in cash and cash equivalents	(1,074		)	—			(1,074		)
Cash and cash equivalents at beginning of year	19,272			—			19,272
Cash and cash equivalents at end of period	$	18,198		$	—		$	18,198

The effect of the restatement on the previously filed consolidated balance sheet as of December 31, 2016 is as follows:



	As of December 31, 2016
($ in thousands, except per share data)	As Previously Reported			Adjustments			As Restated

Assets
Current assets:
Cash and cash equivalents	$	18,034		$	—		$	18,034
Accounts receivable	6,796			96			6,892
Finance receivables, net	1,442			—			1,442
Inventory, net	4,786			(348		)	4,438
Prepaid expenses and other current assets	1,764			(87		)	1,677
Deferred income taxes	2,271			(2,271		)	—
Total current assets	35,093			(2,610		)	32,483

Non-current assets:
Finance receivables due after one year	3,956			—			3,956
Other assets	145			(1		)	144
Property and equipment, net	9,433			2,561			11,994
Deferred income taxes	25,568			(25,568		)	—
Intangibles, net	711			—			711
Goodwill	11,492			—			11,492
Total non-current assets	51,305			(23,008		)	28,297

Total assets	$	86,398		$	(25,618	)	$	60,780

Liabilities, convertible preferred stock and shareholders’ equity
Current liabilities:
Accounts payable	$	9,090		$	19		$	9,109
Accrued expenses	2,912			4,629			7,541
Line of credit, net	7,078			13			7,091
Capital lease obligations and current obligations under long-term debt	766			3,565			4,331
Income taxes payable	6			15			21
Deferred revenue	—			478			478
Deferred gain from sale-leaseback transactions	470			(470		)	—
Total current liabilities	20,322			8,249			28,571

Long-term liabilities:
Deferred income taxes	—			63			63
Capital lease obligations and long-term debt, less current portion	1,394			—			1,394
Accrued expenses, less current portion	52			—			52
Total long-term liabilities	1,446			63			1,509

Total liabilities	$	21,768		$	8,312		$	30,080
Commitments and contingencies
Convertible preferred stock:
Series A convertible preferred stock, 900,000 shares authorized, 445,063 issued and outstanding, with liquidation preference of $18,442 at December 31, 2016	—			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 $18,442 at December 31, 2016	3,138			(3,138		)	—
Common stock, no par value, 640,000,000 shares authorized, 40,321,941 shares issued and outstanding at December 31, 2016	245,230			—			245,230
Accumulated deficit	(183,738		)	(33,930		)	(217,668		)
Total shareholders’ equity	64,630			(37,068		)	27,562
Total liabilities, convertible preferred stock and shareholders’ equity	$	86,398		$	(25,618	)	$	60,780

The effect of the restatement on the previously filed consolidated statement of operations for the three and six months ended December 31, 2016 is as follows:



	Three months ended December 31, 2016									Six months ended December 31, 2016
($ in thousands, except per share data)	As Previously Reported			Adjustments			As Restated			As Previously Reported			Adjustments			As Restated

Revenue:
License and transaction fees	$	16,639		$	(2	)	$	16,637		$	33,004		$	(4	)	$	33,000
Equipment sales	5,117			33			5,150			10,340			16			10,356
Total revenue	21,756			31			21,787			43,344			12			43,356

Costs of sales:
Cost of services	11,389			(143		)	11,246			22,632			(287		)	22,345
Cost of equipment	4,033			63			4,096			8,211			58			8,269
Total costs of sales	15,422			(80		)	15,342			30,843			(229		)	30,614
Gross profit	6,334			111			6,445			12,501			241			12,742

Operating expenses:
Selling, general and administrative	5,793			236			6,029			12,702			799			13,501
Depreciation and amortization	307			—			307			515			—			515
Total operating expenses	6,100			236			6,336			13,217			799			14,016
Operating income (loss)	234			(125		)	109			(716		)	(558		)	(1,274		)

Other income (expense):
Interest income	200			—			200			273			—			273
Interest expense	(201		)	(317		)	(518		)	(413		)	(652		)	(1,065		)
Change in fair value of warrant liabilities	—			—			—			(1,490		)	—			(1,490		)
Total other expense, net	(1		)	(317		)	(318		)	(1,630		)	(652		)	(2,282		)

Income (loss) before income taxes	233			(442		)	(209		)	(2,346		)	(1,210		)	(3,556		)
(Provision) benefit for income taxes	—			(23		)	(23		)	115			(161		)	(46		)

Net income (loss)	233			(465		)	(232		)	(2,231		)	(1,371		)	(3,602		)
Preferred dividends	—			—			—			(334		)	—			(334		)
Net income (loss) applicable to common shares	$	233		$	(465	)	$	(232	)	$	(2,565	)	$	(1,371	)	$	(3,936	)
Net income (loss) per common share
Basic	$	0.01		$	(0.02	)	$	(0.01	)	$	(0.07	)	$	(0.03	)	$	(0.10	)
Diluted	$	0.01		$	(0.02	)	$	(0.01	)	$	(0.07	)	$	(0.03	)	$	(0.10	)
Weighted average number of common shares outstanding
Basic	40,308,934			—			40,308,934			39,398,469			—			39,398,469
Diluted	40,730,712			(421,778		)	40,308,934			39,398,469			—			39,398,469

The effect of the restatement on the previously filed consolidated statement of cash flows for the six months ended December 31, 2016 is as follows:



	Six months ended December 31, 2016
($ in thousands)	As Previously Reported			Adjustments			As Restated

OPERATING ACTIVITIES:
Net loss	$	(2,231	)	$	(1,371	)	$	(3,602	)
Adjustments to reconcile net loss to net cash used in operating activities:
Non-cash stock-based compensation	445			—			445
(Gain) loss on disposal of property and equipment	(31		)	(3		)	(34		)
Non-cash interest and amortization of debt discount	26			39			65
Bad debt expense	450			(119		)	331
Provision for inventory reserve	—			480			480
Depreciation and amortization	2,564			600			3,164
Change in fair value of warrant liabilities	1,490			—			1,490
Deferred income taxes, net	(115		)	145			30
Recognition of deferred gain from sale-leaseback transactions	(430		)	430			—
Changes in operating assets and liabilities:
Accounts receivable	(2,347		)	(71		)	(2,418		)
Finance receivables, net	2,119			—			2,119
Inventory, net	(2,689		)	(714		)	(3,403		)
Prepaid expenses and other current assets	(542		)	100			(442		)
Accounts payable and accrued expenses	(3,840		)	1,140			(2,700		)
Deferred revenue	—			326			326
Income taxes payable	(12		)	15			3
Net cash used in operating activities	(5,143		)	997			(4,146		)

INVESTING ACTIVITIES:
Purchase of property and equipment, including rentals	(1,944		)	192			(1,752		)
Proceeds from sale of property and equipment	61			—			61
Net cash used in investing activities	(1,883		)	192			(1,691		)

FINANCING ACTIVITIES:
Cash used in retirement of common stock	(31		)	—			(31		)
Proceeds from exercise of common stock warrants	6,193			—			6,193
Repayment of line of credit	—			(106		)	(106		)
Repayment of capital lease obligations and long-term debt	(374		)	(1,083		)	(1,457		)
Net cash provided by financing activities	5,788			(1,189		)	4,599

Net decrease in cash and cash equivalents	(1,238		)	—			(1,238		)
Cash and cash equivalents at beginning of year	19,272			—			19,272
Cash and cash equivalents at end of period	$	18,034		$	—		$	18,034

The effect of the restatement on the previously filed consolidated balance sheet as of March 31, 2017 is as follows:



	As of March 31, 2017
($ in thousands, except per share data)	As Previously Reported			Adjustments			As Restated

Assets
Current assets:
Cash and cash equivalents	$	17,780		$	—		$	17,780
Accounts receivable	6,734			(72		)	6,662
Finance receivables, net	2,057			92			2,149
Inventory, net	4,147			(470		)	3,677
Prepaid expenses and other current assets	1,628			(34		)	1,594
Deferred income taxes	2,271			(2,271		)	—
Total current assets	34,617			(2,755		)	31,862

Non-current assets:
Finance receivables due after one year	7,548			—			7,548
Other assets	137			94			231
Property and equipment, net	9,173			2,168			11,341
Deferred income taxes	25,359			(25,359		)	—
Intangibles, net	666			—			666
Goodwill	11,492			—			11,492
Total non-current assets	54,375			(23,097		)	31,278

Total assets	$	88,992		$	(25,852	)	$	63,140

Liabilities, convertible preferred stock and shareholders’ equity
Current liabilities:
Accounts payable	$	11,529		$	290		$	11,819
Accrued expenses	3,111			5,681			8,792
Line of credit, net	7,021			13			7,034
Capital lease obligations and current obligations under long-term debt	786			2,999			3,785
Income taxes payable	—			23			23
Deferred revenue	—			310			310
Deferred gain from sale-leaseback transactions	255			(255		)	—
Total current liabilities	22,702			9,061			31,763

Long-term liabilities:
Deferred income taxes	—			78			78
Capital lease obligations and long-term debt, less current portion	1,239			—			1,239
Accrued expenses, less current portion	52			—			52
Total long-term liabilities	1,291			78			1,369

Total liabilities	$	23,993		$	9,139		$	33,132
Commitments and contingencies
Convertible preferred stock:
Series A convertible preferred stock, 900,000 shares authorized, 445,063 issued and outstanding, with liquidation preference of $18,775 at March 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 $18,775 at March 31, 2017	3,138			(3,138		)	—
Common stock, no par value, 640,000,000 shares authorized, 40,327,675 shares issued and outstanding at March 31, 2017	245,463			—			245,463
Accumulated deficit	(183,602		)	(34,991		)	(218,593		)
Total shareholders’ equity	64,999			(38,129		)	26,870
Total liabilities, convertible preferred stock and shareholders’ equity	$	88,992		$	(25,852	)	$	63,140

The effect of the restatement on the previously filed consolidated statement of operations for the three and nine months ended March 31, 2017 is as follows:



	Three months ended March 31, 2017									Nine months ended March 31, 2017
($ in thousands, except per share data)	As Previously Reported			Adjustments			As Restated			As Previously Reported			Adjustments			As Restated

Revenue:
License and transaction fees	$	17,459		$	(1	)	$	17,458		$	50,463		$	(5	)	$	50,458
Equipment sales	9,001			(158		)	8,843			19,341			(142		)	19,199
Total revenue	26,460			(159		)	26,301			69,804			(147		)	69,657

Costs of sales:
Cost of services	11,876			(143		)	11,733			34,508			(430		)	34,078
Cost of equipment	7,959			267			8,226			16,170			325			16,495
Total costs of sales	19,835			124			19,959			50,678			(105		)	50,573
Gross profit	6,625			(283		)	6,342			19,126			(42		)	19,084

Operating expenses:
Selling, general and administrative	5,947			595			6,542			18,649			1,394			20,043
Depreciation and amortization	259			—			259			774			—			774
Total operating expenses	6,206			595			6,801			19,423			1,394			20,817
Operating income (loss)	419			(878		)	(459		)	(297		)	(1,436		)	(1,733		)

Other income (expense):
Interest income	114			—			114			387			—			387
Interest expense	(188		)	(369		)	(557		)	(601		)	(1,021		)	(1,622		)
Change in fair value of warrant liabilities	—			—			—			(1,490		)	—			(1,490		)
Total other expense, net	(74		)	(369		)	(443		)	(1,704		)	(1,021		)	(2,725		)

Income (loss) before income taxes	345			(1,247		)	(902		)	(2,001		)	(2,457		)	(4,458		)
(Provision) benefit for income taxes	(209		)	186			(23		)	(94		)	25			(69		)

Net income (loss)	136			(1,061		)	(925		)	(2,095		)	(2,432		)	(4,527		)
Preferred dividends	(334		)	—			(334		)	(668		)	—			(668		)
Net loss applicable to common shares	$	(198	)	$	(1,061	)	$	(1,259	)	$	(2,763	)	$	(2,432	)	$	(5,195	)
Net loss per common share
Basic	$	—		$	(0.03	)	$	(0.03	)	$	(0.07	)	$	(0.06	)	$	(0.13	)
Diluted	$	—		$	(0.03	)	$	(0.03	)	$	(0.07	)	$	(0.06	)	$	(0.13	)
Weighted average number of common shares outstanding
Basic	40,327,697			—			40,327,697			39,703,690			—			39,703,690
Diluted	40,327,697			—			40,327,697			39,703,690			—			39,703,690

The effect of the restatement on the previously filed consolidated statement of cash flows for the nine months ended March 31, 2017 is as follows:



	Nine months ended March 31, 2017
($ in thousands)	As Previously Reported			Adjustments			As Restated

OPERATING ACTIVITIES:
Net loss	$	(2,095	)	$	(2,432	)	$	(4,527	)
Adjustments to reconcile net loss to net cash used in operating activities:
Non-cash stock-based compensation	678			—			678
(Gain) loss on disposal of property and equipment	(59		)	—			(59		)
Non-cash interest and amortization of debt discount	98			—			98
Bad debt expense	577			(117		)	460
Provision for inventory reserve	—			804			804
Depreciation and amortization	3,774			905			4,679
Change in fair value of warrant liabilities	1,490			—			1,490
Deferred income taxes, net	94			(48		)	46
Recognition of deferred gain from sale-leaseback transactions	(646		)	646			—
Changes in operating assets and liabilities:
Accounts receivable	(2,388		)	72			(2,316		)
Finance receivables, net	(2,113		)	(67		)	(2,180		)
Inventory, net	(2,042		)	(915		)	(2,957		)
Prepaid expenses and other current assets	(406		)	(48		)	(454		)
Accounts payable and accrued expenses	(1,239		)	2,501			1,262
Deferred revenue	—			157			157
Income taxes payable	(18		)	22			4
Net cash used in operating activities	(4,295		)	1,480			(2,815		)

INVESTING ACTIVITIES:
Purchase of property and equipment, including rentals	(2,818		)	282			(2,536		)
Proceeds from sale of property and equipment	105			—			105
Net cash used in investing activities	(2,713		)	282			(2,431		)

FINANCING ACTIVITIES:
Cash used in retirement of common stock	(31		)	—			(31		)
Proceeds from exercise of common stock warrants	6,193			—			6,193
Payment of debt issuance costs	(90		)	—			(90		)
Repayment of line of credit	—			(106		)	(106		)
Repayment of capital lease obligations and long-term debt	(556		)	(1,656		)	(2,212		)
Net cash provided by financing activities	5,516			(1,762		)	3,754

Net decrease in cash and cash equivalents	(1,492		)	—			(1,492		)
Cash and cash equivalents at beginning of year	19,272			—			19,272
Cash and cash equivalents at end of period	$	17,780		$	—		$	17,780

The effect of the restatement on the previously filed consolidated statement of operations for the three months ended June 30, 2017 is as follows:



	Three months ended June 30, 2017
($ in thousands, except per share data)	As Previously Reported			Adjustments			As Restated

Revenue:
License and transaction fees	$	18,679		$	(3	)	$	18,676
Equipment sales	15,610			(2,507		)	13,103
Total revenue	34,289			(2,510		)	31,779

Costs of sales:
Cost of services	12,545			(103		)	12,442
Cost of equipment	14,224			(864		)	13,360
Total costs of sales	26,769			(967		)	25,802
Gross profit	7,520			(1,543		)	5,977

Operating expenses:
Selling, general and administrative	6,844			1,290			8,134
Depreciation and amortization	244			—			244
Total operating expenses	7,088			1,290			8,378
Operating income (loss)	432			(2,833		)	(2,401		)

Other income (expense):
Interest income	95			—			95
Interest expense	(291		)	(315		)	(606		)
Total other expense, net	(196		)	(315		)	(511		)

Income (loss) before income taxes	236			(3,148		)	(2,912		)
Benefit (provision) for income taxes	7			(33		)	(26		)

Net income (loss)	243			(3,181		)	(2,938		)
Preferred dividends	—			—			—
Net income (loss) applicable to common shares	$	243		$	(3,181	)	$	(2,938	)
Net income (loss) per common share
Basic	$	0.01		$	(0.08	)	$	(0.07	)
Diluted	$	0.01		$	(0.08	)	$	(0.07	)
Weighted average number of common shares outstanding
Basic	40,331,993			—			40,331,993
Diluted	40,772,482			(440,489		)	40,331,993