Correction of Immaterial Error

6 Months Ended

Jun. 30, 2023

Correction Of Immaterial Error

Correction of Immaterial Error

11. Correction of Immaterial Error

During the year ending December 31, 2022, management identified and corrected certain immaterial errors in the Company’s historical financial statements associated with the cost of revenues provided by a subcontractor. The errors understated the cost of revenue and overstated the sales and marketing operating expenses by equal amounts in the Condensed Consolidated Statements of Operations. The error had no impact on operating losses, net losses, and net loss per share nor any other financial statement amount. Further these errors had no impact on the consolidated balance sheets, statements of changes in stockholders’ equity (deficit), and statement of cash flows. These corrections do not affect any of the metrics used to calculate and evaluate management’s compensation and had no impact on bonuses, commissions, stock-based compensation, or any other employee renumeration. Historical amounts have been corrected and are presented on a comparable basis.

The below tables present (in thousands) the effect of the correction for the following periods: 

	Three Months Ended June 30, 2022
	As Reported			Adjustments			As Corrected
Revenue	$	2,058		$	–		$	2,058
Cost of revenue		667			249			916
Gross profit		1,391			(249	)		1,142
Operating expenses
Sales and marketing		1,817			(249	)		1,568
Research and development		1,486			–			1,486
General and administrative		2,049			–			2,049
Operating loss	$	(3,961	)	$	–		$	(3,961	)

	Six Months Ended June 30, 2022
	As Reported			Adjustments			As Corrected
Revenue	$	3,893		$	–		$	3,893
Cost of revenue		1,321			498			1,819
Gross profit		2,572			(498	)		2,074
Operating expenses
Sales and marketing		3,272			(498	)		2,774
Research and development		3,136			–			3,136
General and administrative		4,109			–			4,109
Operating loss	$	(7,945	)	$	–		$	(7,945	)