| Restatement of Quarterly Financial Information |
Note 16 – Restatement of Quarterly Financial Information (Unaudited) As described in Note 2—Restatement of Previously Issued Financial Statements, for the period ended December 31, 2024, management identified an error in the previously reported financial statements related to the recognition of revenue during the year ended December 31, 2022. The Company entered into a license agreement for which it should have recognized the entire proceeds receivable pursuant to the agreement as revenue during the year ended December 31, 2022. The Company should also have recognized the financing component of the licensing agreement during the fiscal years ended December 31, 2023 and 2024. As a result, the consolidated financial statements reflect the recognition of this additional revenue during the year ended December 31, 2022, removes the revenue recognized and records the financing component of the arrangement during annual and interim periods in the fiscal year ending December 31, 2023 and the interim periods in the fiscal year ending December 31, 2024. The following tables present the effect of the restatement on the Company’s previously reported: | ● | unaudited condensed consolidated balance sheets as of March 31, 2023, June 30, 2023, and September 30, 2023; |
| ● | unaudited condensed consolidated balance sheets as of March 31, 2024, June 30, 2024, and September 30, 2024; |
| ● | unaudited condensed consolidated statements of operations for the three months ended March 31, 2023, the three months and six months ended June 30, 2023, and the three months and nine months ended September 30, 2023; |
| ● | unaudited condensed consolidated statements of operations for the three months ended March 31, 2024, the three months and six months ended June 30, 2024, and the three months and nine months ended September 30, 2024; |
| ● | unaudited condensed consolidated statements of cash flows for the three months ended March 31, 2023, the six months ended June 30, 2023, and the nine months ended September 30, 2023; and |
| ● | unaudited condensed consolidated statements of cash flows for the three months ended March 31, 2024, the six months ended June 30, 2024, and the nine months ended September 30, 2024. |
The values as previously reported were derived from the previously filed Quarterly Reports on Form 10-Q for the periods ended March 31, 2023, June 30, 2023, September 30, 2023, March 31, 2024, June 30, 2024, and September 30, 2024. These restatements do not result in a reclassification between cash flows from operating activities, cash flows from investing activities, or cash flows from financing activities in the unaudited condensed consolidated statements of cash flows for the periods presented. The restatements only impact net loss in the unaudited condensed consolidated statements of changes in stockholders’ equity (deficit) in the periods presented. The following table presents the impact of the financial statement adjustments on the Company’s previous reported consolidated Balance Sheet as of March 31, 2023: CONSOLIDATED BALANCE SHEETS | | | | | | | | | | | | MARCH 31, 2023 | | | As | | | | | | | | | previously | | | | | | | | | reported | | Adjustment | | As restated | ASSETS AND STOCKHOLDERS’ EQUITY (DEFICIT) | | | | | | | | | | | | | | | | | | | | Accounts receivable | | $ | 696,933 | | $ | 788,408 | | $ | 1,485,341 | Total current assets | | | 4,313,535 | | | 788,408 | | | 5,101,943 | Total assets | | | 8,051,939 | | | 788,408 | | | 8,840,347 | | | | | | | | | | | Stockholders’ equity (deficit) | | | | | | | | | | Accumulated deficit | | | (70,145,373) | | | 788,408 | | | (69,356,965) | | | | | | | | | | | Total stockholders’ equity (deficit) | | | (8,504,314) | | | 788,408 | | | (7,715,906) | | | | | | | | | | | Total liabilities and stockholders’ equity (deficit) | | $ | 8,051,939 | | $ | 788,408 | | $ | 8,840,347 |
The following table presents the impact of the financial statement adjustments on the Company’s previously reported Consolidated Statement of Operations for the three months ended March 31, 2023: CONSOLIDATED STATEMENT OF OPERATIONS | | | | | | | | | | | | FOR THE THREE MONTHS ENDED | | | MARCH 31, 2023 | | | As | | | | | | | | | previously | | | | | | | | | reported | | Adjustment | | As restated | Revenue | | $ | 3,012,749 | | $ | (315,000) | | $ | 2,697,749 | Interest income | | | — | | | 24,458 | | | 24,458 | Total costs and expenses | | | 4,439,945 | | | (24,458) | | | 4,415,487 | | | | | | | | | | | Loss before provision for income taxes | | | (1,427,196) | | | (290,542) | | | (1,717,738) | | | | | | | | | | | Net loss | | $ | (1,446,984) | | $ | (290,542) | | $ | (1,737,526) | | | | | | | | | | | Net loss per common share - basic and diluted: | | $ | (0.08) | | $ | (0.01) | | $ | (0.09) |
The following table presents the impact of the financial statement adjustments on the Company’s previously reported Consolidated Statement of Cash Flows for the three months ended March 31, 2023: CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | | | | | | | | | | | | FOR THE THREE MONTHS ENDED | | | MARCH 31, 2023 | | | As | | | | | | | | | previously | | | | | | | | | reported | | Adjustment | | As restated | Cash flows from operating activities | | | | | | | | | | Net income (loss) | | $ | (1,446,984) | | $ | (290,542) | | $ | (1,737,526) | | | | | | | | | | | Adjustments to reconcile net loss to net cash | | | | | | | | | | Non-cash interest income | | | — | | | (24,458) | | | (24,458) | Changes in operating assets and liabilities | | | | | | | | | | Accounts receivable | | | 2,080,674 | | | 315,000 | | | 2,395,674 | Net cash provided by operating activities | | $ | 777,564 | | $ | — | | $ | 777,564 |
The following table presents the impact of the financial statement adjustments on the Company’s previous reported consolidated Balance Sheet as of June 30, 2023: CONSOLIDATED BALANCE SHEETS | | | | | | | | | | | | JUNE 30, 2023 | | | As | | | | | | | | | previously | | | | | | | | | reported | | Adjustment | | As restated | ASSETS AND STOCKHOLDERS’ EQUITY (DEFICIT) | | | | | | | | | | | | | | | | | | | | Accounts receivable | | $ | 2,043,328 | | $ | 806,281 | | $ | 2,849,609 | Total current assets | | | 4,968,663 | | | 806,281 | | | 5,774,944 | Total assets | | | 8,645,146 | | | 806,281 | | | 9,451,427 | | | | | | | | | | | Stockholders’ equity (deficit) | | | | | | | | | | Accumulated deficit | | | (70,909,843) | | | 806,281 | | | (70,103,562) | | | | | | | | | | | Total stockholders’ equity (deficit) | | | (9,131,190) | | | 806,281 | | | (8,324,909) | | | | | | | | | | | Total liabilities and stockholders’ equity (deficit) | | $ | 8,645,146 | | $ | 806,281 | | $ | 9,451,427 |
The following table presents the impact of the financial statement adjustments on the Company’s previously reported Consolidated Statement of Operations for the three and six months ended June 30, 2023: CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | | | | | | | | | | | | | | | | | | | | | FOR THE THREE MONTHS | | FOR THE SIX MONTHS | | | ENDED JUNE 30, 2023 | | ENDED JUNE 30, 2023 | | | As | | | | | | | | As | | | | | | | | | previously | | | | | | | | previously | | | | | | | | | reported | | Adjustment | | As restated | | reported | | Adjustment | | As restated | Revenues | | $ | 4,111,721 | | $ | — | | $ | 4,111,721 | | $ | 7,124,469 | | $ | (315,000) | | $ | 6,809,469 | Interest income | | | — | | | 17,873 | | | 17,873 | | | — | | | 42,331 | | | 42,331 | Total costs and expenses | | | 4,875,876 | | | (17,873) | | | 4,858,003 | | | 9,315,819 | | | (42,331) | | | 9,273,488 | | | | | | | | | | | | | | | | | | | | Net loss before provision for income taxes | | | (764,155) | | | 17,873 | | | (746,282) | | | (2,191,350) | | | (272,669) | | | (2,464,019) | | | | | | | | | | | | | | | | | | | | Net loss | | $ | (764,470) | | $ | 17,873 | | $ | (746,597) | | $ | (2,211,454) | | $ | (272,669) | | $ | (2,484,123) | Net loss per common share - basic and diluted: | | $ | (0.04) | | $ | — | | $ | (0.04) | | $ | (0.12) | | $ | (0.01) | | $ | (0.13) |
The following table presents the impact of the financial statement adjustments on the Company’s previously reported Consolidated Statement of Cash Flows for the six months ended June 30, 2023: CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | | | | | | | | | | | | FOR THE SIX MONTHS ENDED | | | JUNE 30, 2023 | | | As | | | | | | | | | previously | | | | | | | | | reported | | Adjustment | | As restated | Cash flows from operating activities | | | | | | | | | | Net income (loss) | | $ | (2,211,454) | | $ | (272,669) | | $ | (2,484,123) | | | | | | | | | | | Adjustments to reconcile net loss to net cash | | | | | | | | | | Non-cash interest income | | | — | | | (42,331) | | | (42,331) | Changes in operating assets and liabilities | | | | | | | | | | Accounts receivable | | | 734,279 | | | 315,000 | | | 1,049,279 | Net cash provided by operating activities | | $ | 232,492 | | $ | — | | $ | 232,492 |
The following table presents the impact of the financial statement adjustments on the Company’s previous reported consolidated Balance Sheet as of September 30, 2023: CONSOLIDATED BALANCE SHEETS | | | | | | | | | | | | SEPTEMBER 30, 2023 | | | As | | | | | | | | | previously | | | | | | | | | reported | | Adjustment | | As restated | ASSETS AND STOCKHOLDERS’ EQUITY (DEFICIT) | | | | | | | | | | | | | | | | | | | | Accounts receivable | | $ | 2,549,022 | | $ | 824,559 | | $ | 3,373,581 | Total current assets | | | 6,074,162 | | | 824,559 | | | 6,898,721 | Total assets | | | 9,681,503 | | | 824,559 | | | 10,506,062 | | | | | | | | | | | Stockholders’ equity (deficit) | | | | | | | | | | Accumulated deficit | | | (71,737,345) | | | 824,559 | | | (70,912,786) | | | | | | | | | | | Total stockholders’ equity (deficit) | | | (9,856,227) | | | 824,559 | | | (9,031,668) | | | | | | | | | | | Total liabilities and stockholders’ equity (deficit) | | $ | 9,681,503 | | $ | 824,559 | | $ | 10,506,062 |
The following table presents the impact of the financial statement adjustments on the Company’s previously reported Consolidated Statement of Operations for the three and nine months ended September 30, 2023: CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | | | | | | | | | | | | | | | | | | | | | FOR THE THREE MONTHS | | FOR THE NINE MONTHS | | | ENDED SEPTEMBER 30, 2023 | | ENDED SEPTEMBER 30, 2023 | | | As | | | | | | | | As | | | | | | | | | previously | | | | | | | | previously | | | | | | | | | reported | | Adjustment | | As restated | | reported | | Adjustment | | As restated | Revenues | | $ | 6,747,256 | | $ | — | | $ | 6,747,256 | | $ | 13,871,725 | | $ | (315,000) | | $ | 13,556,725 | Interest income | | | — | | | 18,278 | | | 18,278 | | | — | | | 60,609 | | | 60,609 | Total costs and expenses | | | 7,574,758 | | | (18,278) | | | 7,556,480 | | | 16,910,681 | | | (60,609) | | | 16,850,072 | | | | | | | | | | | | | | | | | | | | Net loss before provision for income taxes | | | (827,502) | | | 18,278 | | | (809,224) | | | (3,038,956) | | | (254,391) | | | (3,293,347) | | | | | | | | | | | | | | | | | | | | Net loss | | $ | (827,502) | | $ | 18,278 | | $ | (809,224) | | $ | (3,038,956) | | $ | (254,391) | | $ | (3,293,347) | Net loss per common share - basic and diluted: | | $ | (0.04) | | $ | — | | $ | (0.04) | | $ | (0.16) | | $ | (0.01) | | $ | (0.17) |
The following table presents the impact of the financial statement adjustments on the Company’s previously reported Consolidated Statement of Cash Flows for the nine months ended September 30, 2023: CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | | | | | | | | | | | | FOR THE NINE MONTHS ENDED | | | SEPTEMBER 30, 2023 | | | As | | | | | | | | | previously | | | | | | | | | reported | | Adjustment | | As restated | Cash flows from operating activities | | | | | | | | | | Net income (loss) | | $ | (3,038,956) | | $ | (254,391) | | $ | (3,293,347) | | | | | | | | | | | Adjustments to reconcile net loss to net cash | | | | | | | | | | Non-cash interest income | | | — | | | (60,609) | | | (60,609) | Changes in operating assets and liabilities | | | | | | | | | | Accounts receivable | | | 228,585 | | | 315,000 | | | 543,585 | Net cash provided by operating activities | | $ | 786,144 | | $ | — | | $ | 786,144 |
The following table presents the impact of the financial statement adjustments on the Company’s previous reported consolidated Balance Sheet as of March 31, 2024: CONSOLIDATED BALANCE SHEETS | | | | | | | | | | | | MARCH 31, 2024 | | | As | | | | | | | | | previously | | | | | | | | | reported | | Adjustment | | As restated | ASSETS AND STOCKHOLDERS’ EQUITY (DEFICIT) | | | | | | | | | | | | | | | | | | | | Accounts receivable | | $ | 1,667,856 | | $ | 547,367 | | $ | 2,215,223 | Total current assets | | | 13,670,201 | | | 547,367 | | | 14,217,568 | Total assets | | | 17,083,765 | | | 547,367 | | | 17,631,132 | | | | | | | | | | | Stockholders’ equity (deficit) | | | | | | | | | | Accumulated deficit | | | (65,353,367) | | | 547,367 | | | (64,806,000) | | | | | | | | | | | Total stockholders’ equity (deficit) | | | 8,255,523 | | | 547,367 | | | 8,802,890 | | | | | | | | | | | Total liabilities and stockholders’ equity (deficit) | | $ | 17,083,765 | | $ | 547,367 | | $ | 17,631,132 |
The following table presents the impact of the financial statement adjustments on the Company’s previously reported Consolidated Statement of Operations for the three months ended March 31, 2024: CONSOLIDATED STATEMENT OF OPERATIONS | | | | | | | | | | | | FOR THE THREE MONTHS ENDED | | | MARCH 31, 2024 | | | As | | | | | | | | | previously | | | | | | | | | reported | | Adjustment | | As restated | Revenue | | $ | 3,556,766 | | $ | (315,000) | | $ | 3,241,766 | Gross profit | | | 1,443,284 | | | (315,000) | | | 1,128,284 | Operating loss | | | (2,083,492) | | | (315,000) | | | (2,398,492) | Other income | | | 35,516 | | | 19,116 | | | 54,632 | Total other income (expense) | | | (475,499) | | | 19,116 | | | (456,383) | | | | | | | | | | | Loss before provision for income taxes | | | (2,558,991) | | | (295,884) | | | (2,854,875) | | | | | | | | | | | Net loss | | $ | (2,558,991) | | $ | (295,884) | | | (2,854,875) | | | | | | | | | | | Net loss per common share - basic and diluted: | | $ | (0.14) | | $ | (0.01) | | $ | (0.15) |
The following table presents the impact of the financial statement adjustments on the Company’s previously reported Consolidated Statement of Cash Flows for the three months ended March 31, 2024: CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | | | | | | | | | | | | FOR THE THREE MONTHS ENDED | | | MARCH 31, 2024 | | | As | | | | | | | | | previously | | | | | | | | | reported | | Adjustment | | As restated | Cash flows from operating activities | | | | | | | | | | Net income (loss) | | $ | (2,558,991) | | $ | (295,884) | | $ | (2,854,875) | | | | | | | | | | | Adjustments to reconcile net loss to net cash | | | | | | | | | | Non-cash interest income | | | — | | | (19,116) | | | (19,116) | Changes in operating assets and liabilities | | | | | | | | | | Accounts receivable | | | 565,355 | | | 315,000 | | | 880,355 | Net cash provided by operating activities | | $ | (439,220) | | $ | — | | $ | (439,220) |
The following table presents the impact of the financial statement adjustments on the Company’s previous reported consolidated Balance Sheet as of June 30, 2024: CONSOLIDATED BALANCE SHEETS | | | | | | | | | | | | JUNE 30, 2024 | | | As | | | | | | | | | previously | | | | | | | | | reported | | Adjustment | | As restated | ASSETS AND STOCKHOLDERS’ EQUITY (DEFICIT) | | | | | | | | | | | | | | | | | | | | Accounts receivable | | $ | 1,784,437 | | $ | 559,775 | | $ | 2,344,212 | Total current assets | | | 11,327,736 | | | 559,775 | | | 11,887,511 | Total assets | | | 14,749,740 | | | 559,775 | | | 15,309,515 | | | | | | | | | | | Stockholders’ equity (deficit) | | | | | | | | | | Accumulated deficit | | | (71,512,689) | | | 559,775 | | | (70,952,914) | | | | | | | | | | | Total stockholders’ equity (deficit) | | | 2,232,979 | | | 559,775 | | | 2,792,754 | | | | | | | | | | | Total liabilities and stockholders’ equity (deficit) | | $ | 14,749,740 | | $ | 559,775 | | $ | 15,309,515 |
The following table presents the impact of the financial statement adjustments on the Company’s previously reported Consolidated Statement of Operations for the three and six months ended June 30, 2024: CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | | | | | | | | | | | | | | | | | | | | | FOR THE THREE MONTHS | | FOR THE SIX MONTHS | | | ENDED JUNE 30, 2024 | | ENDED JUNE 30, 2024 | | | As | | | | | | | | As | | | | | | | | | previously | | | | | | | | previously | | | | | | | | | reported | | Adjustment | | As restated | | reported | | Adjustment | | As restated | Revenues | | $ | 3,361,433 | | $ | — | | $ | 3,361,433 | | $ | 6,918,199 | | $ | (315,000) | | $ | 6,603,199 | Gross profit | | | 1,060,600 | | | — | | | 1,060,600 | | | 2,503,884 | | | (315,000) | | | 2,188,884 | Operating loss | | | (3,573,510) | | | — | | | (3,573,510) | | | (5,657,002) | | | (315,000) | | | (5,972,002) | Interest income | | | 109,787 | | | 12,408 | | | 122,195 | | | 145,303 | | | 31,524 | | | 176,827 | Total other income (expense) | | | (2,585,466) | | | 12,408 | | | (2,573,058) | | | (3,060,965) | | | 31,524 | | | (3,029,441) | | | | | | | | | | | | | | | | | | | | Net loss before provision for income taxes | | | (6,158,976) | | | 12,408 | | | (6,146,568) | | | (8,717,967) | | | (283,476) | | | (9,001,443) | | | | | | | | | | | | | | | | | | | | Net loss | | $ | (6,159,322) | | $ | 12,408 | | $ | (6,146,914) | | $ | (8,718,313) | | $ | (283,476) | | $ | (9,001,789) | Net loss per common share - basic and diluted: | | $ | (0.33) | | $ | — | | $ | (0.33) | | $ | (0.46) | | $ | (0.02) | | $ | (0.48) |
The following table presents the impact of the financial statement adjustments on the Company’s previously reported Consolidated Statement of Cash Flows for the six months ended June 30, 2024: CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | | | | | | | | | | | | FOR THE SIX MONTHS ENDED | | | JUNE 30, 2024 | | | As | | | | | | | | | previously | | | | | | | | | reported | | Adjustment | | As restated | Cash flows from operating activities | | | | | | | | | | Net income (loss) | | $ | (8,718,313) | | $ | (283,476) | | $ | (9,001,789) | | | | | | | | | | | Adjustments to reconcile net loss to net cash | | | | | | | | | | Non-cash interest income | | | — | | | (31,524) | | | (31,524) | Changes in operating assets and liabilities | | | | | | | | | | Accounts receivable | | | 448,774 | | | 315,000 | | | 763,774 | Net cash provided by operating activities | | $ | (3,122,619) | | $ | — | | $ | (3,122,619) |
The following table presents the impact of the financial statement adjustments on the Company’s previous reported consolidated Balance Sheet as of September 30, 2024: CONSOLIDATED BALANCE SHEETS | | | | | | | | | | | | SEPTEMBER 30, 2024 | | | As | | | | | | | | | previously | | | | | | | | | reported | | Adjustment | | As restated | ASSETS AND STOCKHOLDERS’ EQUITY (DEFICIT) | | | | | | | | | | | | | | | | | | | | Accounts receivable | | $ | 1,930,396 | | $ | 572,465 | | $ | 2,502,861 | Total current assets | | | 7,590,707 | | | 572,465 | | | 8,163,172 | Total assets | | | 11,654,860 | | | 572,465 | | | 12,227,325 | | | | | | | | | | | Stockholders’ equity (deficit) | | | | | | | | | | Accumulated deficit | | | (71,982,925) | | | 572,465 | | | (71,410,460) | | | | | | | | | | | Total stockholders’ equity (deficit) | | | 1,913,874 | | | 572,465 | | | 2,486,339 | | | | | | | | | | | Total liabilities and stockholders’ equity (deficit) | | $ | 11,654,860 | | $ | 572,465 | | $ | 12,227,325 |
The following table presents the impact of the financial statement adjustments on the Company’s previously reported Consolidated Statement of Operations for the three and nine months ended September 30, 2024: CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | | | | | | | | | | | | | | | | | | | | | FOR THE THREE MONTHS | | FOR THE NINE MONTHS | | | ENDED SEPTEMBER 30, 2024 | | ENDED SEPTEMBER 30, 2024 | | | As | | | | | | | | As | | | | | | | | | previously | | | | | | | | previously | | | | | | | | | reported | | Adjustment | | As restated | | reported | | Adjustment | | As restated | Revenues | | $ | 5,236,990 | | $ | — | | $ | 5,236,990 | | $ | 12,155,189 | | $ | (315,000) | | $ | 11,840,189 | Gross profit | | | 1,594,919 | | | — | | | 1,594,919 | | | 4,098,803 | | | (315,000) | | | 3,783,803 | Operating loss | | | (1,107,431) | | | — | | | (1,107,431) | | | (6,764,433) | | | (315,000) | | | (7,079,433) | Interest income | | | 67,966 | | | 12,690 | | | 80,656 | | | 213,269 | | | 44,214 | | | 257,483 | Total other income (expense) | | | 342,992 | | | 12,690 | | | 355,682 | | | (2,717,973) | | | 44,214 | | | (2,673,759) | | | | | | | | | | | | | | | | | | | | Net loss before provision for income taxes | | | (764,439) | | | 12,690 | | | (751,749) | | | (9,482,406) | | | (270,786) | | | (9,753,192) | | | | | | | | | | | | | | | | | | | | Net loss | | $ | (470,236) | | $ | 12,690 | | $ | (457,546) | | $ | (9,188,549) | | $ | (270,786) | | $ | (9,459,335) | Net loss per common share - basic and diluted: | | $ | (0.02) | | $ | — | | $ | (0.02) | | $ | (0.48) | | $ | (0.02) | | $ | (0.50) |
The following table presents the impact of the financial statement adjustments on the Company’s previously reported Consolidated Statement of Cash Flows for the nine months ended September 30, 2024: CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | | | | | | | | | | | | FOR THE NINE MONTHS ENDED | | | SEPTEMBER 30, 2024 | | | As | | | | | | | | | previously | | | | | | | | | reported | | Adjustment | | As restated | Cash flows from operating activities | | | | | | | | | | Net income (loss) | | $ | (9,188,549) | | $ | (270,786) | | $ | (9,459,335) | | | | | | | | | | | Adjustments to reconcile net loss to net cash | | | | | | | | | | Non-cash interest income | | | — | | | (44,214) | | | (44,214) | Changes in operating assets and liabilities | | | | | | | | | | Accounts receivable | | | 302,815 | | | 315,000 | | | 617,815 | Net cash provided by operating activities | | $ | (3,274,785) | | $ | — | | $ | (3,274,785) |
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