Annual report pursuant to Section 13 and 15(d)

Restatement of Consolidated Financial Statements (Tables)

v3.20.1
Restatement of Consolidated Financial Statements (Tables)
 12 Months Ended
Dec. 31, 2018
Accounting Changes and Error Corrections [Abstract]  
Schedule of Effect of Restatement on Financial Information

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  
(dollars in thousands, except per share data)   As Previously Reported     Adjustments     As Restated  
    (Unaudited)     (Unaudited)        
ASSETS                        
Current Assets:                        
Cash and cash equivalents   $ 15,642     $ —     $ 15,642  
Accounts receivable, net     62,199       (500 )     61,699  
Costs and estimated earnings in excess of billings on uncompleted contract     11,226       (5,940 )     5,286  
Other current assets     7,256       (973 )     6,283  
Total current assets     96,323       (7,413 )     88,910  
                         
Property and equipment, net     7,955       (873 )     7,082  
Intangible assets, net     27,696       —       27,696  
Goodwill     35,672       9,335       45,007  
Total assets   $ 167,646     $ 1,049     $ 168,695  
                         
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)                        
Current Liabilities:                        
Accounts payable   $ 35,134     $ 8,760     $ 43,894  
Billings in excess of costs and estimated earnings on uncompleted contracts     30,304       7,227       37,531  
Accrued expenses and other current liabilities     9,973       215       10,188  
Convertible notes payable, net of original issue discount and deferred financing cost     —       2,391       2,391  
Merchant credit agreements     —       4,239       4,239  
Notes payable, current portion, net of original issue discount and deferred financing costs     10,488       (6,819 )     3,669  
Notes payable, related parties, current portion     8,526       50       8,576  
Debt derivative liabilities     —       48,195       48,195  
Warrant derivative liabilities     —       16,492       16,492  
Total current liabilities     94,425       80,750       175,175  
                         
Notes payable, non-current portion     1,955       (125 )     1,830  
Notes payable, related parties, non-current, net of debt discount     38,530       —       38,530  
Senior note payable, non-current portion, net of original issue discount and deferred financing costs     24,143       (738 )     23,405  
Deferred tax liability     560       —       560  
Total liabilities     159,613       79,887       239,500  
                         
Commitments and contingencies (Note 18)                        
                         
Stockholders’ Equity (Deficit):                        
Preferred stock; $0.01 par value, 5,000,000 shares authorized:     —       —       —  
Series A convertible preferred stock, $1,000 stated value, 4,500 shares designated and 500 shares issued and outstanding at December 31, 2017     —       —       —  
Series A-1 convertible preferred stock, $1,000 stated value, 1,000 shares designated and 295 shares issued and outstanding at December 31, 2017     —       —       —  
Series G convertible preferred stock, $0.001 stated value, 1,780 shares designated and 1,780 shares issued and outstanding at December 31, 2017     —       —       —  
Common stock, $0.001 par value, 100,000,000 shares authorized and 5,620,281 shares issued and outstanding at December 31, 2017     6       —       6  
Additional paid-in capital     49,381       7,598       56,979  
Shares to be issued     625       (375 )     250  
Subscriptions receivable     (3,675 )     3,675       —  
Accumulated deficit     (38,304 )     (89,736 )     (128,040 )
Total stockholders’ equity (deficit)     8,033       (78,838 )     (70,805 )
Total liabilities and stockholders’ equity (deficit)   $ 167,646     $ 1,049     $ 168,695  

 

The effect of the restatement on the previously filed consolidated statement of operations for the year ended December 31, 2017 is as follows:

 

     Year ended December 31, 2017  
(dollars in thousands, except per share data)    As Previously Reported       Adjustments     As Restated  
    (Unaudited)     (Unaudited)        
Revenues, net of discounts   $ 243,409     $ (27,900 )   $ 215,509  
Cost of revenues     206,394       (21,242 )     185,152  
Gross profit     37,015       (6,658 )     30,357  
                         
Operating expenses                        
Compensation expense     19,413       4,560       23,973  
Selling, general and administrative expenses     14,934       (1,416 )     13,518  
Amortization of intangible assets     2,597       —       2,597  
Loss on sale of asset     31       —       31  
Transaction expenses     1,666       (965 )     701  
Total operating expenses     38,641       2,179       40,820  
Operating loss     (1,626 )     (8,837 )     (10,463 )
                         
Other expenses                        
Interest expense     (5,819 )     (490 )     (6,309 )
Amortization of deferred financing costs and debt discount     (6,349 )     (8,730 )     (15,079 )
Loss on conversion derivative liability     —       (35,012 )     (35,012 )
Loss on warrant derivative liability     —       (357 )     (357 )
Other expense, net     (123 )     (584 )     (707 )
Loss on issuance of notes     —       (24,262 )     (24,262 )
Extinguishment gain     —       666       666  
Financing costs     (5,552 )     5,552       —  
Total other expenses, net     (17,843 )     (63,217 )     (81,060 )
Loss before provision for income taxes     (19,469 )     (72,054 )     (91,523 )
Provision for income taxes     560       —       560  
Net loss     (20,029 )     (72,054 )     (92,083 )
Preferred stock dividends     (80 )     —       (80 )
Net loss attributable to common shareholders   $ (20,109 )   $ (72,054 )   $ (92,163 )
                         
Loss per common share:                        
Basic and diluted   $ (4.23 )   $ (15.15 )   $ (19.38 )
                         
Weighted average number of common shares outstanding                        
Basic and diluted     4,748,563       4,756,049       4,756,049  

 

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

 

    Year ended December 31, 2017  
(dollars in thousands)   As Previously Reported     Adjustments     As Restated  
    (Unaudited)     (Unaudited)        
Cash flows from operating activities:                        
Net loss   $ (20,029 )   $ (72,054 )   $ (92,083 )
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:                        
Depreciation     870       (110 )     760  
Amortization of intangible assets     8,976       —       8,976  
Amortization of debt discount and deferred financing costs     8,010       4,904       12,914  
Provision for bad debts     551       —       551  
Loss (gain) on sale of asset     31       (62 )     (31 )
Late fee on senior debt     541       —       541  
Payment in kind interest-debt on notes payable     934       661       1,595  
Payment in kind interest on related party notes payable     1,310       —       1,310  
Share-based compensation     1,681       2,662       4,343  
Common shares issued for convertible notes modifications, amendments, redemption agreements and settlements     —       103       103  
Convertible note issued for consulting expenses     —       400       400  
Loss on issuance of convertible debt     —       24,262       24,262  
Gain on extinguishment of debt     —       (666 )     (666 )
Loss on warrant derivative liabilities     —       357       357  
Loss on convertible derivative liabilities     —       35,012       35,012  
Debt financing expense     531       (531 )     —  
Accrued dividends, preferred stock     —       (80 )     (80 )
Benefit from deferred income taxes     (599 )     1,159       560  
Changes in operating assets and liabilities:                        
Accounts receivable     (41,106 )     (5,302 )     (46,408 )
Cost and estimated earnings in excess of billings on uncompleted contracts     19,078       1,982       21,060  
Other current assets     5,888       (6,356 )     (468 )
Accounts payable and accrued liabilities     17,463       13,598       31,061  
Due to related party     —       (109 )     (109 )
Net cash provided by (used in) operating activities     4,130       (170 )     3,960  
                         
Cash flows from investing activities :                        
Net cash paid for Benchmark Builders, Inc. acquisition     (14,834 )     —       (14,834 )
Purchase of property and equipment     (5,208 )     1,472       (3,736 )
Net cash (used in) provided by investing activities     (20,042 )     1,472       (18,570 )
                         
Cash flows from financing activities :                        
Proceeds from issuance of convertible notes     —       4,095       4,095  
Payments on convertible notes     —       (1,426 )     (1,426 )
Proceeds from issuance of merchant credit agreements     —       5,718       5,718  
Payments on merchant credit agreements     —       (2,624 )     (2,624 )
Proceeds from issuance of notes payable, net     12,158       (10,758 )     1,400  
Payments on notes payable     (5,342 )     4,007       (1,335 )
Proceeds from issuance of senior note payable, net     13,210       (515 )     12,695  
Proceeds from issuance of Series C notes     7,500       —       7,500  
Payments on notes payable – related parties     (112 )     112       —  
Proceeds from sale of common stock     3,338       —       3,338  
Payment of deferred financing costs     (610 )     89       (521 )
Net cash provided by (used in) financing activities     30,142       (1,302 )     28,840  
                         
Net change in cash     14,230       —       14,230  
Cash, beginning of period     1,412       —       1,412  
Cash, end of period   $ 15,642     $ —     $ 15,642