JONES SODA CO. Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.
On
As part of preparing the Company's consolidated financial statements as at and
for the year ended
As a result of the identification of this error, the Company's Audit Committee
concluded that the previously issued consolidated financial statements as at and
for the year ended
This error did not have any impact on the Company's consolidated statement of operations, consolidated statements of comprehensive loss, or consolidated statement of shareholders' equity.
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The impacts of this correction to fiscal year 2021 is as follows:
As of
December 31, 2021
(In thousands)
(Unaudited)
Consolidated Balance Restatement
Sheet: As Reported Adjustments As Restated
Current assets:
Cash and cash $ $ $
equivalents 4,667 - 4,667
Accounts receivable,
net of allowance of
$114 2,662 - 2,662
Inventory 1,923 - 1,923
Prefunded insurance
premiums from
financing - 903 903
Prepaid expenses and
other current assets 358 - 358
Total current assets $ 9,610 $ 903 $ 10,513
Current liabilities:
Accounts payable 1,239 - 1,239
Accrued expenses 1,544 - 1,544
Insurance Premium
Financing - 903 903
Lease liability, 109 109
current portion -
Taxes payable 8 - 8
Current portion of
convertible
subordinated notes
payable, net 92 - 92
Current portion of
accrued interest
expense 55 - 55
2022 Financing
Proceeds Received,
Net of Closing Costs 538 - 538
Total current $ $ $
liabilities 3,585 903 4,488
Year Ended
December 31, 2021
(In thousands)
(Unaudited)
Consolidated
Statement of Cash As Reported Restatement As Restated
flows: Adjustments
OPERATING
ACTIVITIES:
Net loss $ (1,811) $ - $ (1,811)
Adjustments to
reconcile net loss
to net cash flows
from
operating
activities:
Depreciation and 166 - 166
amortization
Stock-based 144 - 144
compensation
Change in allowance
for doubtful 21 - 21
accounts
Forgiveness of PPP (335) - (335)
SBA loan
Loss (gain) on sale 5 - 5
of fixed asset
Changes in operating
assets and
liabilities:
Accounts receivable (1,129) - (1,129)
Inventory (66) - (66)
Prefunded insurance
premiums from - (903) (903)
financing
Prepaid expenses and
other current (164) - (164)
assets
Accounts payable (147) - (147)
Accrued expenses 783 - 783
Taxes payable 1 - 1
Other liabilities 4 - 4
Net cash used in (2,528) (903) (3,431)
operating activities $ $ $
FINANCING
ACTIVITIES:
Proceeds from
exercise of stock $ 296 $ - $ 296
options
Proceeds from
issuance of 1,778 - 1,778
convertible notes,
net
Proceeds from 2022
convertible notes 538 - 538
prior to close, net
Additional financing
for insurance - 903 903
premiums, net of
repayments
Net cash provided by $ 2,612 $ 903 $ 3,515
financing activities
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The impacts of this correction as at and for the three months ended
As of
March 31, 2022
(In thousands)
(Unaudited)
Condensed
Consolidated Balance As Reported Restatement As Restated
Sheet: Adjustments
Current assets:
Cash and cash $ $ $
equivalents 11,856 - 11,856
Accounts receivable,
net of allowance of
$111 3,216 - 3,216
Inventory 2,907 - 2,907
Prefunded insurance
premiums from
financing - 597 597
Prepaid expenses and
other current assets 477 - 477
Total current assets $ 18,456 $ 597 $ 19,053
Current liabilities:
Accounts payable 1,735 - 1,735
Accrued expenses 1,526 - 1,526
Insurance Premium
Financing - 597 597
Lease liability, 111 111
current portion -
Taxes payable 9 - 9
Current portion of
convertible
subordinated notes
payable, net 2,893 - 2,893
Total current $ $ $
liabilities 6,274 597 6,871
Quarter Ended
March 31, 2022
(In thousands)
(Unaudited)
Condensed
Consolidated As Reported As Restated
Statement of Cash Restatement
flows: Adjustments
OPERATING ACTIVITIES:
Net loss $ (1,664) $ - $ (1,664)
Adjustments to
reconcile net loss to
net cash flows from
operating activities:
Depreciation and 247 - 247
amortization
Stock-based 268 - 268
compensation
Change in allowance
for doubtful (3) - (3)
accounts
Changes in operating
assets and
liabilities:
Accounts receivable (545) - (545)
Inventory (982) - (982)
Prefunded insurance
premiums from - 306 306
financing
Prepaid expenses and (119) - (119)
other current assets
Other assets 25 - 25
Accounts payable 496 - 496
Accrued expenses (66) - (66)
Taxes payable 1 - 1
Other liabilities 1 - 1
Net cash used in $ (2,341) $ 306 $ (2,035)
operating activities
FINANCING ACTIVITIES:
Proceeds from
issuance of $ 2,354 $ - $ 2,354
convertible notes,
net
Repayments on
Insurance financing, - (306) (306)
net of additional
financing
Proceeds from
issuance of common 7,152 - 7,152
stock and warrants,
net
Net cash provided by $ 9,506 $ (306) $ 9,200
financing activities
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The impacts of this correction as at and for the six months ended
As of
June 30, 2022
(In thousands)
(Unaudited)
Condensed
Consolidated Balance As Reported Restatement As Restated
Sheet: Adjustments
Current assets:
Cash and cash $ $ $
equivalents 9,285 - 9,285
Accounts receivable,
net of allowance of
$119 4,071 - 4,071
Inventory 2,833 - 2,833
Prefunded insurance
premiums from
financing - 289 289
Prepaid expenses and
other current assets 944 - 944
Total current assets $ 17,133 $ 289 $ 17,422
Current liabilities:
Accounts payable 1,619 - 1,619
Accrued expenses 1,529 - 1,529
Insurance Premium
Financing - 289 289
Lease liability, 114 114
current portion -
Taxes payable 14 - 14
Total current $ $ $
liabilities 3,276 289 3,565
Six months Ended
June 30, 2022
(In thousands)
(Unaudited)
Condensed
Consolidated As Reported As Restated
Statement of Cash Restatement
flows: Adjustments
OPERATING ACTIVITIES:
Net loss $ (3,099) $ - $ (3,099)
Adjustments to
reconcile net loss to
net cash flows from
operating activities:
Depreciation and 382 - 382
amortization
Stock-based 386 - 386
compensation
Change in allowance
for doubtful 5 - 5
accounts
Changes in operating
assets and
liabilities:
Accounts receivable (1,428) - (1,428)
Inventory (916) - (916)
Prefunded insurance
premiums from - 614 614
financing
Prepaid expenses and (585) - (585)
other current assets
Other assets 25 - 25
Accounts payable 383 - 383
Accrued expenses (43) - (43)
Taxes payable 6 - 6
Other liabilities 1 - 1
Net cash used in $ (4,883) $ 614 $ (4,269)
operating activities
FINANCING ACTIVITIES:
Proceeds from
issuance of $ 2,354 $ - $ 2,354
convertible notes,
net
Repayments on
Insurance financing, - (614) (614)
net of additional
financing
Proceeds from
issuance of common 7,152 - 7,152
stock and warrants,
net
Net cash provided by $ 9,506 $ (614) $ 8,892
financing activities
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The Company intends to include restated consolidated financial statements as of
and for the year ended
The Company's management and Audit Committee have discussed the matters
disclosed in this Item 4.02 with the Company's independent registered public
accounting firm,
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