Quarterly report pursuant to Section 13 or 15(d)

Restatements and Reclassifications

v3.23.1
Restatements and Reclassifications
 6 Months Ended
Jul. 02, 2022
Prior Period Adjustment [Abstract]  
Restatements

Note 3: Restatements and Reclassifications

On April 17, 2023, the Company’s management and the Audit Committee of the Company’s Board of Directors (the “Audit Committee”) reached a determination that the Company’s previously issued unaudited consolidated financial statements and related disclosures for each of the quarterly periods ended July 2, 2022 and October 1, 2022, should no longer be relied upon because of a material misstatement contained in those two quarterly unaudited condensed consolidated financial statements. In connection with the Company’s preparation of its unaudited condensed consolidated financial statements and related disclosures for each of the two referenced periods, the Company’s management and Audit Committee relied upon the report issued by a third-party valuation firm to determine the carrying value of the promissory note the Company had received from SPYR Technologies, Inc. (the “SPYR Note”), in connection with the Company’s sale of the assets of its GeoTraq, Inc. subsidiary to SPYR Technologies, Inc. in the second quarter of the Company’s 2022 fiscal year. At December 31, 2022, the Company reviewed the original valuation of the Promissory Note to determine if the original 10.5% used to discount the Note was appropriate. In connection with this review, the Company determined that the discount rate should be revised to 14.5%.

The Company’s management and the Audit Committee discussed the matters with Frazier & Deeter, LLC, the Company’s independent registered public accounting firm for the 2022 fiscal year, and with WSRP, LLC, the Company’s independent registered public accounting firm during the second and third quarters in the 2022 fiscal year and prior fiscal periods since 2019, and determined to restate the Company’s unaudited condensed consolidated financial statements for the second and third fiscal quarters ended July 2, 2022, and October 1, 2022. Further, the gain associated with the GeoTraq disposition (Technology segment) has been restated and presented as discontinued operations for the periods ending July 2, 2022. As such, the results of the Technology segment have been reclassified and presented as discontinued operations for the periods ending July 3, 2021. The Company will also file an amended Quarterly Report on Form 10-Q for its third fiscal quarter ended October 1, 2022.

 

 

 

July 2,
2022

 

 

 

(Unaudited)

 

 

 

(Unaudited)

 

 

 

Previously Reported

 

Effect of Restatement

 

(As restated)

 

Consolidated balance sheets as of July 2, 2022

 

 

 

 

 

 

 

Note receivable, net

 

 

11,277

 

 

(1,813

)

 

9,464

 

Total assets

 

$

27,519

 

$

(1,813

)

$

25,706

 

Total liabilities

 

 

24,301

 

 

—

 

 

24,301

 

Accumulated deficit

 

 

(41,914

)

 

(1,813

)

 

(43,727

)

Total stockholders' equity (deficit)

 

 

3,218

 

 

(1,813

)

 

1,405

 

Total liabilities and stockholders' equity (deficit)

 

$

27,519

 

$

(1,813

)

$

25,706

 

 

 

 

For the Thirteen Weeks Ended

 

 

For the Twenty Six Weeks Ended

 

 

 

July 2,
2022

 

 

July 2,
2022

 

 

 

Previously Reported

 

Effect of Restatement

 

(As restated)

 

 

Previously Reported

 

Effect of Restatement

 

(As restated)

 

Selling, general and administrative expenses

 

 

2,908

 

 

(2

)

 

2,906

 

 

 

5,853

 

 

(6

)

 

5,847

 

Gain on sale of GeoTraq

 

 

(12,091

)

 

12,091

 

 

—

 

 

 

(12,091

)

 

12,091

 

 

—

 

Operating income (loss)

 

 

10,832

 

 

(12,089

)

 

(1,257

)

 

 

9,740

 

 

(12,085

)

 

(2,345

)

Interest expense, net

 

 

(98

)

 

37

 

 

(61

)

 

 

(290

)

 

37

 

 

(253

)

Total other income (expense), net

 

 

(141

)

 

37

 

 

(104

)

 

 

2,165

 

 

37

 

 

2,202

 

Income (loss) from operations before provision for income taxes

 

 

10,691

 

 

(12,052

)

 

(1,361

)

 

 

11,905

 

 

(12,048

)

 

(143

)

Net income (loss) from continuing operations

 

 

10,687

 

 

(12,052

)

 

(1,365

)

 

 

11,898

 

 

(12,048

)

 

(150

)

Net income from discontinued operations, net of tax

 

 

—

 

$

10,239

 

$

10,239

 

 

 

—

 

 

10,235

 

 

10,235

 

Net income (loss)

 

$

10,687

 

$

(1,813

)

$

8,874

 

 

$

11,898

 

$

(1,813

)

$

10,085

 

Net income (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted income (loss) per share from continuing operations

 

$

3.39

 

$

(3.83

)

$

(0.43

)

 

$

3.78

 

$

(3.82

)

$

(0.05

)

Basic income per share from discontinued operations

 

$

—

 

$

3.25

 

$

3.25

 

 

$

—

 

$

3.25

 

$

3.25

 

Diluted income per share from discontinued operations

 

$

—

 

$

2.93

 

$

2.93

 

 

$

—

 

$

2.93

 

$

2.93

 

Basic income (loss) per share

 

$

3.39

 

$

(0.58

)

$

2.82

 

 

$

3.78

 

$

(0.58

)

$

3.20

 

Diluted income (loss) per share

 

$

3.06

 

$

(0.52

)

$

2.54

 

 

$

3.40

 

$

(0.52

)

$

2.88

 

 

 

 

For the Twenty Six Weeks Ended

 

 

 

July 2, 2022

 

 

 

Previously Reported

 

Effect of Restatement

 

(As restated)

 

OPERATING ACTIVITIES:

 

 

 

 

 

 

 

Net income (loss)

 

$

11,898

 

$

(1,813

)

$

10,085

 

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating
   activities:

 

 

 

 

 

 

 

Accretion of note receivable discount

 

 

(27

)

 

(37

)

 

(64

)

Gain on sale of GeoTraq

 

 

(12,091

)

 

1,850

 

 

(10,241

)

Net cash provided by (used in) operating activities

 

 

1,489

 

 

—

 

 

1,489