| Restatement of Previously Issued Financial Statements |
Note
14 - Restatement of Previously Issued Financial Statements
The Company identified certain errors related to recognition of accretion of the Company’s Series B convertible
preferred stock (the “Preferred Stock”) to its redemption value in accordance with ASC 480-10-S99-3A during the three months
ended July 31, 2023, which resulted in the following misstatements in the financial statements as of and for the three months ended July
31, 2023:
|
· |
Understatement of the carrying value of the Preferred Stock on the condensed consolidated balance sheet
as of July 31, 2023. |
|
· |
Omission of the Preferred Stock accretion in the calculation of net income attributable to common stockholders
as presented on the condensed consolidated statements of operations for the three months ended July 31, 2023, and a resulting error in
the calculation of basic and diluted earnings per share. |
|
· |
Omission of accretion of the discount on the Preferred Stock to its redemption value on the condensed
consolidated statements of convertible preferred stock and stockholders’ equity for the three months ended July 31, 2023. |
|
· |
Reclassify the Preferred Stock dividends which were incorrectly recorded in accumulated deficit to additional
paid-in capital. |
|
· |
Omission of certain required disclosures related to the Preferred Stock accretion in the footnotes to
the financial statements as of and for the three months ended July 31, 2023. |
|
· |
Understatement of the repurchase amount of treasury stock on the condensed consolidated statements of
convertible preferred stock and stockholders’ equity for the three months ended July 31, 2023 as it related to the excise tax on
the transaction. |
The Company’s prior
accounting for the Preferred Stock accretion did not have any effect on the Company’s previously reported cash flows or cash.
The following tables
summarize the effect of the restatement on each financial statement line item as of the dates, and for the period, indicated:
Restatement
tables
| CONDENSED CONSOLIDATED BALANCE SHEETS |
|
July 31, 2023
As Reported |
|
|
Adjustment |
|
|
July 31, 2023
As Restated |
|
Convertible Preferred Stock:
Series B convertible preferred stock: authorized 35,000 shares, $0.0001 par value and $1,000 face value, 35,000 and 0 shares issued and outstanding as of July 31, 2023 and April 30, 2023, respectively. Liquidation Preference of $35,000,000 plus dividends accrued at 4% per annum of $319,849 and $0, as of July 31, 2023 and April 30, 2023, respectively. |
|
$ |
16,753,075 |
|
|
$ |
3,272,033 |
|
|
$ |
20,025,108 |
|
| Additional paid-in capital |
|
|
202,230,646 |
|
|
|
(3,591,882 |
) |
|
|
198,638,764 |
|
| Accumulated deficit |
|
|
(119,461,919 |
) |
|
|
319,849 |
|
|
|
(119,142,070 |
) |
| Treasury stock |
|
|
(40,017,947 |
) |
|
|
(264,573 |
) |
|
|
(40,282,520 |
) |
| Total stockholders' equity |
|
|
42,730,395 |
|
|
|
(3,536,606 |
) |
|
|
39,193,789 |
|
| Total Liabilities, Convertible Preferred Stock and Stockholders' Equity |
|
|
79,880,485 |
|
|
|
– |
|
|
|
79,880,485 |
|
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
|
July 31, 2023
As Reported |
|
|
Adjustment |
|
|
July 31, 2023
As Restated |
|
| Preferred stock accretion |
|
$ |
– |
|
|
$ |
(3,272,033 |
) |
|
$ |
(3,272,033 |
) |
| Net income (loss) attributable to common stockholders |
|
|
(3,503,146 |
) |
|
|
(3,272,033 |
) |
|
|
(6,775,179 |
) |
| Net loss per share, basic and diluted |
|
$ |
(0.28 |
) |
|
$ |
(0.26 |
) |
|
$ |
(0.54 |
) |
| CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY |
|
July 31, 2023
As Reported |
|
|
Adjustment |
|
|
July 31, 2023
As Restated |
|
| Preferred Stock (Amount) |
|
$ |
16,753,075 |
|
|
$ |
3,272,033 |
|
|
$ |
20,025,108 |
|
| Additional paid-in capital |
|
|
202,230,646 |
|
|
|
(3,591,882 |
) |
|
|
198,638,764 |
|
| Accumulated deficit |
|
|
(119,461,919 |
) |
|
|
319,849 |
|
|
|
(119,142,070 |
) |
| Treasury stock |
|
|
(40,017,947 |
) |
|
|
(264,573 |
) |
|
|
(40,282,520 |
) |
| Total Stockholders' Equity Balance, July 31, 2023 |
|
|
42,730,395 |
|
|
|
(3,536,606 |
) |
|
|
39,193,789 |
|
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
|
July 31, 2023
As Reported |
|
|
Adjustment |
|
|
July 31, 2023
As Restated |
|
| Supplemental disclosure of cash flows information |
|
|
|
|
|
|
|
|
|
|
|
|
| Accretion of discounts to redemption value of Series B Preferred Stock |
|
$ |
– |
|
|
$ |
3,272,033 |
|
|
$ |
3,272,033 |
|
|