Annual report pursuant to Section 13 and 15(d)

Unaudited Quarterly Data (Tables)

Unaudited Quarterly Data (Tables)

12 Months Ended

Dec. 31, 2018

Quarterly Financial Information Disclosure [Abstract]

Schedule of Quarterly Data on Financial Information

	Three months ended
($ in thousands, except per share data)	March 31, 2018 (As Restated)			June 30, 2018 (As Restated)			September 30, 2018 (As Restated)			December 31, 2018
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Revenue	$	90,453		$	83,525		$	88,837		$	121,940
Gross profit	$	12,230		$	13,076		$	18,696		$	8,885
Operating loss	$	(149	)	$	(2,358	)	$	(12,264	)	$	(23,522	)
Net (loss) income	$	(1,087	)	$	7,501		$	(12,987	)	$	(40,019	)
Cumulative preferred dividends	$	(20	)	$	(20	)	$	(20	)	$	(20	)
Net (loss) income applicable to common shares	$	(1,107	)	$	7,481		$	(13,007	)	$	(40,039	)
Net (loss) income per common share – basic	$	(0.19	)	$	1.13		$	(1.68	)	$	(3.79	)
Net (loss) income per common share – diluted	$	(0.19	)	$	0.50		$	(1.68	)	$	(3.79	)
Weighted average number of common shares outstanding – basic		5,851,288			6,601,685			7,745,537			10,577,376
Weighted average number of common shares outstanding – diluted		5,851,288			14,996,607			7,745,537			10,577,376

	Three months ended
($ in thousands, except per share data)	March 31, 2017 (As Restated)			June 30, 2017 (As Restated)			September 30, 2017 (As Restated)			December 31, 2017 (As Restated)
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Revenue	$	5,443		$	42,581		$	96,827		$	70,658
Gross profit (loss)	$	2,750		$	9,255		$	23,776		$	(5,424	)
Operating (loss) income	$	(2,658	)	$	220		$	14,161		$	(22,185	)
Net loss	$	(12,351	)	$	(34,524	)	$	(1,748	)	$	(43,460	)
Cumulative preferred dividends	$	(20	)	$	(20	)	$	(20	)	$	(20	)
Net loss applicable to common shares	$	(12,371	)	$	(34,544	)	$	(1,768	)	$	(43,480	)
Net loss per common share – basic and diluted	$	(3.73	)	$	(7.22	)	$	(0.33	)	$	(7.83	)
Weighted average number of common shares outstanding – basic and diluted		3,312,373			4,787,556			5,367,966			5,552,429

Explanatory Note:

The Company is providing restated quarterly and year-to-date unaudited consolidated financial information for interim periods occurring within years ended December 31, 2018 and 2017 in order to comply with SEC requirements. See Note 2 for further background concerning the events preceding the restatement of financial information in this Form 10-K.

As discussed in Note 2, the Audit Committee and the Company identified certain errors that are corrected through adjustments made as part of the restatement. These adjustments include corrections related to the investigation of convertible notes that was conducted, as well as (i) corrections related to the Company’s convertible notes and (ii) corrections resulting from management’s review of significant accounts and transactions.

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

	As of March 31, 2018
($ in thousands, except per share data)	As Previously Reported			Adjustments			As Restated
	(unaudited)			(unaudited)			(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	9,638		$	24		$	9,662
Accounts receivable, net		78,251			(17,166	)		61,085
Costs and estimated earnings in excess of billings on uncompleted contracts		4,552			(1,107	)		3,445
Other current assets		9,782			(273	)		9,509
Total current assets		102,223			(18,522	)		83,701

Property and equipment, net		8,121			(1,466	)		6,655
Intangible assets, net		25,443			—			25,443
Goodwill		35,672			9,335			45,007
Total assets		171,459			(10,653	)		160,806

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current Liabilities:
Accounts payable		46,095			(366	)		45,729
Billings in excess of costs and estimated earnings on uncompleted contracts		18,516			8,588			27,104
Due to related party		28			—			28
Accrued expenses and other current liabilities		7,259			282			7,541
Senior notes payable, current portion net of original discount and deferred financing costs		—			25,807			25,807
Convertible notes payable, net of original issue discount and deferred financing cost		—			3,548			3,548
Merchant credit agreements, net of original issue discount and deferred financing cost		—			2,369			2,369
Notes payable, current portion, net of original issue discount and deferred financing costs		10,182			(6,910	)		3,272
Notes payable, related parties, current portion		7,603			—			7,603
Debt derivative liability		—			22,077			22,077
Warrant liability		—			29,897			29,897
Total current liabilities		89,683			85,292			174,975

Notes payable, non-current portion		1,934			(125	)		1,809
Notes payable, related parties, non-current net of debt discount		39,523			—			39,523
Senior note payable, non-current portion, net of original issue discount and deferred financing costs		26,408			(26,408	)		—
Deferred tax liability		1,122			(39	)		1,083
Total liabilities		158,670			58,720			217,390

Commitments and contingencies

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 March 31, 2018		—			—			—
Series A-1 convertible preferred stock, $1,000 stated value, 1,000 shares designated and 295 shares issued and outstanding at March 31, 2018		—			—			—
Series G convertible preferred stock, $0.001 stated value, 1,780 shares designated and 1,780 shares issued and outstanding at March 31, 2018		—			—			—
Common stock, $0.001 par value, 100,000,000 shares authorized 6,136,059 shares issued and outstanding at March 31, 2018, respectively		6			—			6
Additional paid-in capital		57,792			8,436			66,228
Shares to be issued		6,681			(375	)		6,306
Subscriptions receivable		(3,222	)		3,222			—
Accumulated deficit		(48,468	)		(80,656	)		(129,124	)
Total stockholders’ deficit		12,789			(69,373	)		(56,584	)
Total liabilities and stockholders’ deficit		171,459			(10,653	)		160,806

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

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

Revenues, net of discounts	$	85,145		$	5,308		$	90,453
Cost of revenues		73,654			4,569			78,223
Gross profit		11,491			739			12,230

Operating expenses
Compensation expense		5,638			224			5,862
Selling, general and administrative expenses		4,639			907			5,546
Amortization expense		938			—			938
Loss on sale of asset		33			—			33
Transaction expenses		93			(93	)		—
Total operating expenses		11,341			1,038			12,379
Operating income (loss)		150			(299	)		(149	)

Other (expenses) income
Interest expense		(913	)		(122	)		(1,035	)
Amortization of deferred financing costs and debt discount		(5,912	)		(2,215	)		(8,127	)
Gain on debt derivative liability		—			11,759			11,759
Loss on warrant liability		—			(13,821	)		(13,821	)
Other (expense) income, net		(597	)		(190	)		(787	)
Extinguishment loss		(322	)		14,823			14,501
Loss on issuance of notes		—			(2,860	)		(2,860	)
Financing costs		(2,002	)		2,002			—
Total other expenses, net		(9,746	)		9,376			(370	)
Loss before provision for income taxes		(9,596	)		9,077			(519	)
Provision for income taxes		568			—			568

Net loss		(10,164	)		9,077			(1,087	)
Preferred stock dividends		(20	)		—			(20	)
Net loss attributable to common shareholders	$	(10,184	)	$	9,077		$	(1,107	)

Loss per common share:
Basic and diluted	$	(2.09	)	$	1.55		$	(0.19	)

Weighted average number of common shares outstanding
Basic and diluted		4,876,131			5,851,288			5,851,288

The effect of the restatement on the previously filed consolidated balance sheet for the period ended June 30, 2018 is as follows:

	As of June 30, 2018
($ in thousands, except per share data)	As Previously Reported			Adjustments			As Restated
	(unaudited)			(unaudited)			(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	12,884		$	2		$	12,886
Accounts receivable, net		72,693			(12,779	)		59,914
Costs and estimated earnings in excess of billings on uncompleted contract		2,206			1,023			3,229
Other current assets		8,814			(1,796	)		7,018
Total current assets		96,597			(13,550	)		83,047

Property and equipment, net		9,165			(2,367	)		6,798
Intangible assets, net		23,190			—			23,190
Goodwill		35,672			9,335			45,007
Total assets		164,624			(6,582	)		158,042

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current Liabilities:
Accounts payable		40,175			(477	)		39,698
Billings in excess of costs and estimated earnings on uncompleted contracts		21,754			10,498			32,252
Due to related parties		89			—			89
Accrued expenses and other current liabilities		7,141			1,651			8,792
Convertible notes payable, net of original issue discount and deferred financing cost		—			4,591			4,591
Merchant credit agreements, net of original issue discount and deferred financing cost		—			2,668			2,668
Senior notes payable, current portion, net of original issue discount and deferred financing costs		28,661			(451	)		28,210
Notes payable and capital leases, current portion, net of original issue discount and deferred financing costs		14,343			(11,466	)		2,877
Notes payable, related party		19,173			(850	)		18,323
Debt derivative liability		—			8,416			8,416
Warrant liability		—			26,793			26,793
Total current liabilities		131,336			41,373			172,709

Notes payable, non-current portion		1,617			—			1,617
Notes payable, non-current portion, related parties net of debt discount		27,775			—			27,775
Deferred tax liability		1,007			—			1,007
Total liabilities		161,735			41,373			203,108

Commitments and contingencies

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 June 30, 2018		—			—			—
Series A-1 convertible preferred stock, $1,000 stated value, 1,000 shares designated and 295 shares issued and outstanding at June 30, 2018		—			—			—
Series G convertible preferred stock, $0.001 stated value, 1,780 shares designated and 1,780 shares issued and outstanding at June 30, 2018		—			—			—
Common stock, $0.001 par value, 100,000,000 shares authorized and 7,225,158 shares issued and outstanding at June 30, 2018		7			—			7
Additional paid-in capital		67,677			8,876			76,553
Subscriptions receivable		(2,769	)		2,769			—
Accumulated deficit		(62,026	)		(59,600	)		(121,626	)
Total stockholders’ (deficit) equity		2,889			(47,955	)		(45,066	)
Total liabilities and stockholders’ (deficit) equity	$	164,624		$	(6,582	)	$	158,042

The effect of the restatement on the previously filed consolidated statement of operations for the three months ended June 30, 2018 is as follows:

	Three Months ended June 30, 2018
($ in thousands, except per share data)	As Previously Reported			Adjustments			As Restated
	(unaudited)			(unaudited)			(unaudited)
Revenues, net of discounts	$	86,367		$	(2,842	)	$	83,525
Cost of revenues		72,415			(1,966	)		70,449
Gross profit		13,952			(876	)		13,076

Operating expenses
Compensation expense		6,856			757			7,613
Selling, general and administrative expenses		5,855			1,075			6,930
Amortization of intangible assets		938			—			938
Loss on sale of asset		(47	)		—			(47	)
Transaction expenses		33			(33	)		—
Total operating expenses		13,635			1,799			15,434
Operating income (loss)		317			(2,675	)		(2,358	)

Other (expenses) income
Interest expense		(2,889	)		(71	)		(2,960	)
Amortization of deferred financing costs and debt discount		(3,458	)		(3,685	)		(7,143	)
Gain on debt derivative liability		—			6,313			6,313
Gain on warrant liability		—			2,748			2,748
Other income, net		(1,421	)		2,191			770
Loss on issuance of notes		—			(1,591	)		(1,591	)
Gain on extinguishment of debt		—			11,607			11,607
Financing costs		(6,214	)		6,214			—
Total other (expenses) income, net		(13,982	)		23,726			9,744
(Loss) income before provision for income taxes		(13,665	)		21,051			7,386
(Benefit) for income taxes		(107	)		(8	)		(115	)

Net (loss) income		(13,558	)		21,059			7,501
Preferred stock dividends		(20	)		—			(20	)
Net (loss) income attributable to common shareholders	$	(13,578	)	$	21,059		$	7,481

(Loss) income per common share:
Basic	$	(2.26	)	$	3.19		$	1.13
Diluted	$	(2.26	)	$	1.40		$	0.50

Weighted average number of common shares outstanding
Basic		5,997,856			6,601,685			6,601,685
Diluted		5,997,856			14,996,607			14,996,607

The effect of the restatement on the previously filed consolidated statement of operations for the six months ended June 30, 2018 is as follows:

	Six Months ended June 30, 2018
($ in thousands, except per share data)	As Previously Reported			Adjustments			As Restated
	(unaudited)			(unaudited)			(unaudited)
Revenues, net of discounts	$	171,511		$	2,467		$	173,978
Cost of revenues		146,069			2,603			148,672
Gross profit		25,442			(136	)		25,306

Operating expenses
Compensation expense		12,494			981			13,475
Selling, general and administrative expenses		10,494			1,982			12,476
Amortization of intangible assets		1,876			—			1,876
Loss on sale of asset		(13	)		(1	)		(14	)
Transaction expenses		125			(125	)		—
Total operating expenses		24,976			2,837			27,813
Operating loss		466			(2,973	)		(2,507	)

Other (expenses) income
Interest expense		(3,802	)		(193	)		(3,995	)
Amortization of deferred financing costs and debt discount		(9,370	)		(5,900	)		(15,270	)
Gain on conversion derivative liability		—			18,072			18,072
Loss on warrant derivative liability		—			(11,073	)		(11,073	)
Other expense, net		(1,744	)		1,727			(17	)
Loss on issuance of debt		—			(4,451	)		(4,451	)
Extinguishment gain		—			26,108			26,108
Financing costs		(8,812	)		8,812			—
Total other expenses, net		(23,728	)		33,102			9,374
Loss before provision for income taxes		(23,262	)		30,129			6,867
Provision for income taxes		460			(7	)		453

Net loss		(23,722	)		30,136			6,414
Preferred stock dividends		(40	)		—			(40	)
Net loss attributable to common shareholders	$	(23,762	)	$	30,136		$	6,374

Loss per common share:
Basic	$	(4.53	)	$	4.84		$	1.02
Diluted	$	(4.53	)	$	2.06		$	0.44

Weighted average number of common shares outstanding
Basic		5,249,808			6,228,559			6,228,559
Diluted		5,249,808			14,632,985			14,632,985

The effect of the restatement on the previously filed consolidated balance sheet for the period ended September 30, 2018 is as follows:

	As of September 30, 2018
($ in thousands, except per share data)	As Previously Reported			Adjustments			As Restated
	(unaudited)			(unaudited)			(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	5,722		$	2		$	5,724
Accounts receivable, net		75,812			(10,179	)		65,633
Costs and estimated earnings in excess of billings on uncompleted contract		4,362			(1,434	)		2,928
Other current assets		6,416			(173	)		6,243
Total current assets		92,312			(11,784	)		80,528

Property and equipment, net		9,956			(3,353	)		6,603
Intangible assets, net		20,937			—			20,937
Goodwill		35,672			9,335			45,007
Total assets		158,877			(5,802	)		153,075

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable		29,307			(389	)		28,918
Billings in excess of costs and estimated earnings on uncompleted contracts		27,984			7,881			35,865
Due to related parties		56			—			56
Accrued expenses and other current liabilities		9,160			778			9,938
Senior notes payable, current, net of original issue discount and deferred financing costs		31,122			(264	)		30,858
Convertible notes payable, net of original issue discount and deferred financing cost		—			8,186			8,186
Merchant credit agreements, net of original issue discount and deferred financing cost		—			4,821			4,821
Notes payable and capital leases, current portion, net of original issue discount and deferred financing costs		17,474			(14,347	)		3,127
Notes payable, current portion, related parties		18,334			—			18,334
Debt derivative liability		—			11,885			11,885
Warrant liability		—			11,522			11,522
Total current liabilities		133,437			30,073			163,510

Notes payable, non-current portion		1,414			—			1,414
Notes payable, non-current portion, related parties net of debt discount		28,463			—			28,463
Deferred tax liability		1,128			513			1,641
Total liabilities		164,442			30,586			195,028

Commitments and contingencies

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 September 30, 2018		—			—			—
Series A-1 convertible preferred stock, $1,000 stated value, 1,000 shares designated and 295 shares issued and outstanding at September 30, 2018		—			—			—
Common stock, $0.001 par value, 100,000,000 shares authorized and 8,605,021 shares issued and outstanding at September 30, 2018		8			—			8
Additional paid-in capital		71,421			21,231			92,652
Shares to be issued		—			—			—
Subscriptions receivable		(2,941	)		2,941			—
Accumulated deficit		(74,053	)		(60,560	)		(134,613	)
Total stockholders’ (deficit) equity		(5,565	)		(36,388	)		(41,953	)
Total liabilities and stockholders’ (deficit) equity	$	158,877		$	(5,802	)	$	153,075

The effect of the restatement on the previously filed consolidated statement of operations for the three months ended September 30, 2018 is as follows:

	Three Months ended September 30, 2018
($ in thousands, except per share data)	As Previously Reported			Adjustments			As Restated
	(unaudited)			(unaudited)			(unaudited)
Revenues, net of discounts	$	92,224		$	(3,387	)	$	88,837
Cost of revenues		76,311			(6,170	)		70,141
Gross profit		15,913			2,783			18,696

Operating expenses
Compensation expense		9,283			11,038			20,321
Selling, general and administrative expenses		9,045			656			9,701
Amortization of intangible assets		938			—			938
Transaction expenses		—			—			—
Total operating expenses		19,266			11,694			30,960
Operating loss		(3,353	)		(8,911	)		(12,264	)

Other (expenses) income
Interest expense		(2,140	)		(74	)		(2,214	)
Amortization of deferred financing costs and debt discount		(4,318	)		(4,059	)		(8,377	)
(Loss) on debt derivative liability		—			(2,627	)		(2,627	)
Gain on warrant liability		—			14,787			14,787
Other (expense) income, net		(572	)		602			30
Loss on issuance of notes		—			(203	)		(203	)
Extinguishment loss		—			(1,485	)		(1,485	)
Financing costs		(1,374	)		1,374			—
Total other (expenses) income, net		(8,404	)		8,315			(89	)
Loss before provision for income taxes		(11,757	)		(596	)		(12,353	)
Provision for income taxes		268			366			634

Net loss		(12,025	)		(962	)		(12,987	)
Preferred stock dividends		(20	)		—			(20	)
Net loss attributable to common shareholders	$	(12,045	)	$	(962	)	$	(13,007	)

Income per common share:
Basic and diluted	$	(1.89	)	$	(0.12	)	$	(1.68	)

Weighted average number of common shares outstanding
Basic and diluted		6,372,775			7,745,537			7,745,537

The effect of the restatement on the previously filed consolidated statement of operations for the nine months ended September 30, 2018 is as follows:

	Nine Months ended September 30, 2018
($ in thousands, except per share data)	As Previously Reported			Adjustments			As Restated
	(unaudited)			(unaudited)			(unaudited)
Revenues, net of discounts	$	263,735		$	(920	)	$	262,815
Cost of revenues		222,380			(3,567	)		218,813
Gross profit		41,355			2,647			44,002

Operating expenses
Compensation expense -selling general and administrative		21,777			12,019			33,796
Selling, general and administrative expenses		19,653			2,524			22,177
Amortization of intangible assets		2,813			1			2,814
Loss on sale of asset		—			(14	)		(14	)
Transaction expenses		—			—			—
Total operating expenses		44,243			14,530			58,773
Operating loss		(2,888	)		(11,883	)		(14,771	)

Other expenses
Interest expense		(5,942	)		(267	)		(6,209	)
Amortization of deferred financing costs and debt discount		(13,688	)		(9,959	)		(23,647	)
Gain on debt derivative liability		—			15,445			15,445
Gain on warrant liability		—			3,714			3,714
Other (expense) income, net		(2,316	)		2,329			13
Loss on issuance of notes		—			(4,654	)		(4,654	)
Extinguishment gain		—			24,623			24,623
Financing costs		(10,187	)		10,187			—
Total other expenses, net		(32,133	)		41,418			9,285
Loss before provision for income taxes		(35,021	)		29,535			(5,486	)
Provision for income taxes		728			359			1,087

Net loss		(35,749	)		29,176			(6,573	)
Preferred stock dividends		(60	)		—			(60	)
Net loss attributable to common shareholders	$	(35,809	)	$	29,176		$	(6,633	)

Loss per common share:
Basic and diluted	$	(6.36	)	$	4.33		$	(0.98	)

Weighted average number of common shares outstanding
Basic and diluted		5,630,556			6,739,775			6,739,775

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

	As of March 31, 2017
($ in thousands, except per share data)	As Previously Reported			Adjustments			As Restated
	(unaudited)			(unaudited)			(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	2		$	—		$	2
Accounts receivable, net		9,985			(5,446	)		4,539
Other current assets		3,649			(1,443	)		2,206
Total current assets		13,636			(6,889	)		6,747

Property and equipment, net		4,300			(25	)		4,275
Total assets		17,936			(6,914	)		11,022

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current Liabilities:
Accounts payable		2,332			(148	)		2,184
Due to related party		190			(35	)		155
Accrued expenses and other current liabilities		3,508			784			4,292
Convertible notes payable, net of original issue discount and deferred financing cost		—			175			175
Merchant credit agreements, net of original issue discount and deferred financing cost		—			36			36
Notes payable, current portion, net of original issue discount and deferred financing costs		5,431			3,754			9,185
Notes payable, related parties, current portion		791			35			826
Debt derivative liability		—			2,773			2,773
Warrant liability		3,357			5,060			8,417
Total current liabilities		15,609			12,434			28,043

Notes payable, non-current portion		7,300			(5,171	)		2,129
Senior note payable, non-current portion, net of original issue discount and deferred financing costs		5,082			(1,113	)		3,969
Total liabilities		27,991			6,150			34,141

Commitments and contingencies

Temporary equity:
Common stock; $0.001 par value, subject to put provision, 100,000,000 shares authorized and 444,275 shares issued and outstanding at March 31, 2017		437			—			437
Total temporary equity		437			—			437

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 March 31, 2017		—			—			—
Series A-1 convertible preferred stock, $1,000 stated value, 1,000 shares designated and 295 shares issued and outstanding at March 31, 2017		—			—			—
Common stock, $0.001 par value, 100,000,000 shares authorized 3,536,096 shares issued and outstanding at March 31, 2017		88			(85	)		3
Additional paid-in capital		17,484			6,648			24,132
Shares to be issued		615			—			615
Subscriptions receivable		(5,658	)		5,658			—
Accumulated deficit		(23,021	)		(25,285	)		(48,306	)
Total stockholders’ deficit		(10,492	)		(13,064	)		(23,556	)
Total liabilities and stockholders’ deficit	$	17,936		$	(6,914	)	$	11,022

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

	Three Months ended March 31, 2017
($ in thousands, except per share data)	As Previously Reported			Adjustments			As Restated
	(unaudited)			(unaudited)			(unaudited)
Revenues, net of discounts	$	5,086		$	357		$	5,443
Cost of revenues		2,678			15			2,693
Gross profit		2,408			342			2,750

Operating expenses
Compensation expense		1,187			3,040			4,227
Selling, general and administrative expenses		1,187			(198	)		989
Loss on sale of asset		—			(8	)		(8	)
Transaction expenses		11			189			200
Total operating expenses		2,385			3,023			5,408
Operating income (loss)		23			(2,681	)		(2,658	)

Other (expenses) income
Interest expense		(734	)		(123	)		(857	)
Amortization of deferred financing costs and debt discount		(397	)		(857	)		(1,254	)
Gain on debt derivative liability		—			97			97
Loss on warrant liability		(2,200	)		(2,450	)		(4,650	)
Other (expense) income, net		(100	)		156			56
Loss on issuance of notes		—			(3,085	)		(3,085	)
Financing costs		(563	)		563			—
Total other expenses, net		(3,994	)		(5,699	)		(9,693	)
Loss before provision for income taxes		(3,971	)		(8,380	)		(12,351	)
Provision for income taxes		—			—			—

Net loss		(3,971	)		(8,380	)		(12,351	)
Preferred stock dividends		(20	)		—			(20	)
Net loss attributable to common shareholders	$	(3,991	)	$	(8,380	)	$	(12,371	)

Loss per common share:					.
Basic and diluted	$	(1.09	)	$	(2.53	)	$	(3.73	)

Weighted average number of common shares outstanding
Basic and diluted		3,677,614			3,312,373			3,312,373

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

	As of June 30, 2017
($ in thousands, except per share data)	As Previously Reported			Adjustments			As Restated
	(unaudited)			(unaudited)			(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	7,835		$	—		$	7,835
Accounts receivable, net		36,707			(1,705	)		35,002
Costs and estimated earnings in excess of billings on uncompleted contract		5,966			(1,313	)		4,653
Other current assets		6,736			(1,224	)		5,512
Total current assets		57,244			(4,242	)		53,002

Property and equipment, net		5,556			(106	)		5,450
Intangible assets, net		29,320			—			29,320
Goodwill		46,922			9,790			56,712
Total assets		139,042			5,442			144,484

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current Liabilities:
Accounts payable		22,255			4,005			26,260
Billings in excess of costs and estimated earnings on uncompleted contracts		15,380			7,209			22,589
Due to related parties		154			(43	)		111
Accrued expenses and other current liabilities		6,609			750			7,359
Convertible notes payable, net of original issue discount and deferred financing cost		—			813			813
Merchant credit agreement, net of original issue discount and deferred financing cost		—			57			57
Notes payable and capital leases, current portion, net of original issue discount and deferred financing costs		12,012			(7,753	)		4,259
Notes payable, current portion, related party		791			7,293			8,084
Debt derivative liability		—			13,467			13,467
Warrant liability		2,336			24,874			27,210
Total current liabilities		59,537			50,672			110,209

Notes payable, non-current portion		46,981			(44,959	)		2,022
Notes payable, non-current portion, related party		—			42,500			42,500
Senior note payable, non-current portion, net of original issue discount and deferred financing costs		19,951			(238	)		19,713
Total liabilities		126,469			47,975			174,444

Commitments and contingencies

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 June 30, 2017		—			—			—
Series A-1 convertible preferred stock, $1,000 stated value, 1,000 shares designated and 295 shares issued and outstanding at June 30, 2017		—			—			—
Common stock, $0.001 par value, 100,000,000 shares authorized and 5,208,185 shares issued and outstanding at June 30, 2017		130			(115	)		15
Additional paid-in capital		43,011			7,104			50,115
Shares to be issued		2,201			550			2,751
Subscriptions receivable		(4,656	)		4,656			—
Accumulated deficit		(28,113	)		(54,728	)		(82,841	)
Total stockholders’ (deficit) equity		12,573			(42,533	)		(29,960	)
Total liabilities and stockholders’ (deficit) equity	$	139,042		$	5,442		$	144,484

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
	(unaudited)			(unaudited)			(unaudited)
Revenues, net of discounts	$	50,697		$	(8,116	)	$	42,581
Cost of revenues		42,377			(9,051	)		33,326
Gross profit		8,320			935			9,255

Operating expenses
Compensation expense		4,169			380			4,549
Selling, general and administrative expenses		4,000			14			4,014
Amortization of intangible assets		589			—			589
Loss on sale of asset		429			(801	)		(372	)
Transaction expenses		1,409			(1,154	)		255
Total operating expenses		10,596			(1,561	)		9,035
Operating (loss) income		(2,276	)		2,496			220

Other (expenses) income
Interest expense		(1,793	)		(131	)		(1,924	)
Amortization of deferred financing costs and debt discount		(1,934	)		(1,743	)		(3,677	)
Gain on debt derivative liability		—			498			498
Gain (loss) on warrant liability		1,021			(8,684	)		(7,663	)
Other income, net		10			(1,390	)		(1,380	)
Loss on issuance of notes		—			(23,350	)		(23,350	)
Extinguishment gain		—			2,873			2,873
Total other expenses, net		(2,696	)		(31,927	)		(34,623	)
Loss before provision for income taxes		(4,972	)		(29,431	)		(34,403	)
Provision for income taxes		121			—			121

Net loss		(5,093	)		(29,431	)		(34,524	)
Preferred stock dividends		(20	)		—			(20	)
Net loss attributable to common shareholders	$	(5,113	)	$	(29,431	)	$	(34,544	)

Loss per common share:					.
Basic and diluted	$	(1.02	)	$	(6.15	)	$	(7.22	)

Weighted average number of common shares outstanding
Basic and diluted		4,989,451			4,787,556			4,787,556

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

	Six Months ended June 30, 2017
($ in thousands, except per share data)	As Previously Reported			Adjustments			As Restated
	(unaudited)			(unaudited)			(unaudited)
Revenues, net of discounts	$	55,783		$	(7,759	)	$	48,024
Cost of revenues		45,055			(9,036	)		36,019
Gross profit		10,728			1,277			12,005

Operating expenses
Compensation expense		5,356			3,420			8,776
Selling, general and administrative expenses		5,188			(185	)		5,003
Amortization of intangible assets		589			—			589
Loss on sale of asset		472			(852	)		(380	)
Transaction expenses		1,419			(964	)		455
Total operating expenses		13,024			1,419			14,443
Operating loss		(2,296	)		(142	)		(2,438	)

Other (expenses) income
Interest expense		(2,527	)		(254	)		(2,781	)
Amortization of deferred financing costs and debt discount		(2,331	)		(2,600	)		(4,931	)
Gain on conversion derivative liability		—			595			595
Loss on warrant derivative liability		(1,179	)		(11,134	)		(12,313	)
Other expense, net		(46	)		(1,278	)		(1,324	)
Loss on issuance of notes		—			(23,350	)		(23,350	)
Extinguishment loss		—			(212	)		(212	)
Financing costs		(563	)		563			—
Total other expenses, net		(6,646	)		(37,670	)		(44,316	)
Loss before provision for income taxes		(8,942	)		(37,812	)		(46,754	)
Provision for income taxes		121			—			121

Net loss		(9,063	)		(38,812	)		(46,875	)
Preferred stock dividends		(40	)		—			(40	)
Net loss attributable to common shareholders	$	(9,103	)	$	(38,812	)	$	(46,915	)

Loss per common share:
Basic and diluted	$	(2.11	)	$	(9.33	)	$	(11.57	)

Weighted average number of common shares outstanding
Basic and diluted		4,305,814			4,054,039			4,054,039

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

	As of September 30, 2017
($ in thousands, except per share data)	As Previously Reported			Adjustments			As Restated
	(unaudited)			(unaudited)			(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	3,154		$	—		$	3,154
Accounts receivable, net		51,791			212			52,003
Costs and estimated earnings in excess of billings on uncompleted contract		6,773			1,035			7,808
Other current assets		7,727			(1,270	)		6,457
Total current assets		69,445			(23	)		69,422

Property and equipment, net		7,101			(130	)		6,971
Intangible assets, net		26,306			—			26,306
Goodwill		46,922			9,790			56,712
Total assets		149,774			9,637			159,411

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable		33,531			6,103			39,634
Billings in excess of costs and estimated earnings on uncompleted contracts		7,378			512			7,890
Due to related parties		343			(254	)		89
Accrued expenses and other current liabilities		9,931			704			10,635
Convertible notes payable, net of original issue discount and deferred financing cost		—			1,818			1,818
Merchant credit agreement, net of original issue discount and deferred financing cost		—			482			482
Notes payable and capital leases, current portion, net of original issue discount and deferred financing costs		14,022			(9,713	)		4,309
Notes payable, current portion, related parties		791			5,087			5,878
Debt derivative liability		—			36,482			36,482
Warrant liability		303			14,543			14,846
Total current liabilities		66,299			55,764			122,063

Notes payable, non-current portion		46,899			(45,013	)		1,886
Notes payable, non-current portion, related party		—			42,500			42,500
Senior note payable, non-current portion, net of original issue discount and deferred financing costs		20,022			3,539			23,561
Total liabilities		133,220			56,790			190,010

Commitments and contingencies

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 September 30, 2017		—			—			—
Series A-1 convertible preferred stock, $1,000 stated value, 1,000 shares designated and 295 shares issued and outstanding at September 30, 2017		—			—			—
Common stock, $0.001 par value, 100,000,000 shares authorized and 5,435,083 shares issued and outstanding at September 30, 2017		5			—			5
Additional paid-in capital		45,625			8,101			53,726
Shares to be issued		75			175			250
Subscriptions receivable		(3,588	)		3,588			—
Accumulated deficit		(25,563	)		(59,017	)		(84,580	)
Total stockholders’ (deficit) equity		16,554			(47,153	)		(30,599	)
Total liabilities and stockholders’ (deficit) equity	$	149,774		$	9,637		$	159,411

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
	(unaudited)			(unaudited)			(unaudited)
Revenues, net of discounts	$	79,083		$	17,744		$	96,827
Cost of revenues		63,553			9,498			73,051
Gross profit		15,530			8,246			23,776

Operating expenses
Compensation expense		5,312			716			6,028
Selling, general and administrative expenses		4,414			(1,605	)		2,809
Amortization of intangible assets		768			—			768
Gain on sale of assets		—			(236	)		(236	)
Transaction expenses		246			—			246
Total operating expenses		10,740			(1,125	)		9,615
Operating income		4,790			9,371			14,161

Other (expenses) income
Interest expense		(1,824	)		(82	)		(1,906	)
Amortization of deferred financing costs and debt discount		(1,332	)		(1,569	)		(2,901	)
Loss on debt derivative liability		—			(22,133	)		(22,133	)
Gain on warrant liability		2,033			10,398			12,431
Other (expense) income, net		(7	)		301			294
Loss on issuance of notes		—			(911	)		(911	)
Extinguishment gain		—			190			190
Financing costs		(139	)		139			—
Total other expenses, net		(1,269	)		(13,667	)		(14,936	)
Loss before provision for income taxes		3,521			(4,296	)		(775	)
Provision for income taxes		972			1			973

Net loss		2,549			(4,297	)		(1,748	)
Preferred stock dividends		(20	)		—			(20	)
Net loss attributable to common shareholders	$	2,529		$	(4,297	)	$	(1,768	)

Loss per common share:
Basic and diluted	$	0.47		$	(0.80	)	$	(0.33	)

Weighted average number of common shares outstanding
Basic and diluted		5,367,208			5,367,966			5,367,966

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

	Nine Months ended September 30, 2017
($ in thousands, except per share data)	As Previously Reported			Adjustments			As Restated
	(unaudited)			(unaudited)			(unaudited)
Revenues, net of discounts	$	134,866		$	9,985		$	144,851
Cost of revenues		108,608			462			109,070
Gross profit		26,258			9,523			35,781

Operating expenses
Compensation expense -selling general and administrative		10,668			4,136			14,804
Selling, general and administrative expenses		9,696			(1,884	)		7,812
Amortization of intangible assets		1,358			—			1,358
Loss on sale of asset		376			(992	)		(616	)
Transaction expenses		1,666			(965	)		701
Total operating expenses		23,764			295			24,059
Operating loss		2,494			9,228			11,722

Other expenses
Interest expense		(4,351	)		(335	)		(4,686	)
Amortization of deferred financing costs and debt discount		(3,663	)		(4,169	)		(7,832	)
Loss on debt derivative liability		—			(21,539	)		(21,539	)
Gain (loss) on warrant liability		854			(736	)		118
Other (expense) income, net		(52	)		(977	)		(1,029	)
Loss on issuance of notes		—			(24,262	)		(24,262	)
Extinguishment loss		—			(21	)		(21	)
Financing costs		(702	)		702			—
Total other expenses, net		(7,914	)		(51,337	)		(59,251	)
Loss before provision for income taxes		(5,420	)		(42,109	)		(47,529	)
Provision for income taxes		1,093			1			1,094

Net loss		(6,513	)		(42,110	)		(48,623	)
Preferred stock dividends		(60	)		—			(60	)
Net loss attributable to common shareholders	$	(6,573	)	$	(42,110	)	$	(48,683	)

Loss per common share:
Basic and diluted	$	(1.40	)	$	(9.36	)	$	(10.83	)

Weighted average number of common shares outstanding
Basic and diluted		4,699,369			4,496,828			4,496,828