| Restatement of Previously Issued Financial Statements |
Restatement of Previously Issued Financial Statements In connection with the Company's audit of the condensed consolidated financial statements, the Company's management identified the following misstatements in the Company's previously reported interim financial statements included in the Company's original report:
•Correction of an error in accounting for a debt transaction that occurred in Q1 2024. The transaction was incorrectly treated like an amendment rather than an extinguishment.
Impact of the Restatement
The following tables reflect the impact of the restatement to the specific line items presented in the Company’s previously reported unaudited condensed consolidated financial statements as of and for the three months and six months ended June 30, 2024.
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As Previously Reported (Unaudited) |
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Adjustments |
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As Restated |
| Condensed Consolidated Balance Sheets: |
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| As of June 30, 2024 |
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| Accrued liabilities |
$ |
5,212,935 |
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$ |
(741,909) |
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$ |
4,471,026 |
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| Total Current Liabilities |
$ |
11,685,987 |
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$ |
(741,909) |
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$ |
10,944,078 |
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| Notes payable - long-term, fair value option (related party) |
$ |
- |
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$ |
83,797,224 |
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$ |
83,797,224 |
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| Notes payable - long-term, net of discount (related party) |
$ |
46,644,908 |
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$ |
(33,597,864) |
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$ |
13,047,044 |
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| Notes payable - long-term, net of discount |
$ |
- |
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$ |
12,632,556 |
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$ |
12,632,556 |
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| Total Liabilities |
$ |
60,559,301 |
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$ |
62,090,007 |
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$ |
122,649,308 |
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| Additional paid-in capital (As adjusted, see Note 12) |
$ |
94,390,920 |
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$ |
1,248,246 |
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$ |
95,639,166 |
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| Accumulated deficit |
$ |
(123,751,411) |
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$ |
(63,338,253) |
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$ |
(187,089,664) |
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| Total Stockholders’ Deficit |
$ |
(29,360,078) |
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$ |
(62,090,007) |
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$ |
(91,450,085) |
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| Condensed Consolidated Statements of Operations: |
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| Three months ended June 30, 2024 |
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| Change in fair value of new convertible debentures |
$ |
- |
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$ |
(7,410,303) |
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$ |
(7,410,303) |
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| Interest expense, net |
$ |
3,669,423 |
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$ |
(2,503,992) |
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$ |
1,165,431 |
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| Total other (income) expense, net |
$ |
(639,240) |
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$ |
(9,914,295) |
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$ |
(10,553,535) |
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| Net income (loss) |
$ |
(5,373,320) |
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$ |
9,914,295 |
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$ |
4,540,975 |
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| Basic earnings (loss) per share |
$ |
(2.75) |
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$ |
5.08 |
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$ |
2.33 |
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| Diluted earnings (loss) per share |
$ |
(2.75) |
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$ |
1.63 |
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$ |
(1.12) |
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| Diluted weighted average shares outstanding |
1,950,563 |
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3,413,832 |
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5,364,395 |
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| Six months ended June 30, 2024 |
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| Loss on extinguishment of debt |
$ |
- |
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$ |
78,734,949 |
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$ |
78,734,949 |
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| Change in fair value of new convertible debentures |
$ |
- |
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$ |
(11,914,729) |
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$ |
(11,914,729) |
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| Interest expense, net |
$ |
6,122,795 |
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$ |
(3,481,967) |
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$ |
2,640,828 |
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| Total other (income) expense, net |
$ |
(6,602,182) |
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$ |
63,338,253 |
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$ |
56,736,071 |
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| Net income (loss) |
$ |
(4,959,708) |
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$ |
(63,338,253) |
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$ |
(68,297,961) |
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| Basic loss per share |
$ |
(2.97) |
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$ |
(38.00) |
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$ |
(40.97) |
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| Diluted loss per share |
$ |
(2.97) |
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$ |
(38.00) |
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$ |
(40.97) |
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| Condensed Consolidated Statements of Changes of Stockholders' Equity (Deficit): |
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| Three months ended June 30, 2024 |
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| Accumulated Deficit Balance at March 31, 2024 |
$ |
(118,378,091) |
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$ |
(73,252,548) |
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$ |
(191,630,639) |
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| Total Stockholders' Deficit at March 31, 2024 |
$ |
(39,502,929) |
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$ |
(73,252,548) |
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$ |
(112,755,477) |
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| Conversion of convertible secured debentures, as restated (APIC) |
$ |
2,237,335 |
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$ |
1,248,247 |
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$ |
3,485,582 |
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| Conversion of convertible secured debentures, as restated (Total) |
$ |
2,237,398 |
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$ |
1,248,247 |
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$ |
3,485,645 |
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| Additional Paid-In Capital |
$ |
94,390,920 |
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$ |
1,248,246 |
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$ |
95,639,166 |
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| Accumulated deficit |
$ |
(123,751,411) |
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$ |
(63,338,253) |
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$ |
(187,089,664) |
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| Net income (loss) |
$ |
(5,373,320) |
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$ |
9,914,295 |
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$ |
4,540,975 |
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| Total Stockholders' Deficit at June 30, 2024 |
$ |
(29,360,078) |
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$ |
(62,090,007) |
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$ |
(91,450,085) |
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| Six months ended June 30, 2024 |
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| Conversion of convertible secured debentures, as restated (APIC) |
$ |
2,237,335 |
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$ |
1,248,247 |
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$ |
3,485,582 |
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| Conversion of convertible secured debentures, as restated (Total) |
$ |
2,237,398 |
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$ |
1,248,247 |
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$ |
3,485,645 |
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| Additional Paid-In Capital |
$ |
94,390,920 |
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$ |
1,248,246 |
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$ |
95,639,166 |
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| Accumulated deficit |
$ |
(123,751,411) |
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$ |
(63,338,253) |
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$ |
(187,089,664) |
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| Net loss |
$ |
(4,959,708) |
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$ |
(63,338,253) |
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$ |
(68,297,961) |
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| Total Stockholders' Deficit at June 30, 2024 |
$ |
(29,360,078) |
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$ |
(62,090,007) |
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$ |
(91,450,085) |
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| Condensed Consolidated Statements of Cash Flows: |
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| Six months ended June 30, 2024 |
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| Net income (loss) |
$ |
(4,959,708) |
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$ |
(63,338,253) |
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$ |
(68,297,961) |
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| Amortization of debt discount |
$ |
3,242,443 |
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$ |
(2,849,832) |
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$ |
392,611 |
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| Loss on extinguishment of debt |
$ |
- |
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$ |
78,734,949 |
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$ |
78,734,949 |
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| Change in fair value of new convertible debentures |
$ |
- |
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$ |
(11,914,729) |
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$ |
(11,914,729) |
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| Changes in accounts payable and accrued liabilities |
$ |
(1,715,646) |
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$ |
(632,135) |
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$ |
(2,347,781) |
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| Non-cash investing and financing activities: |
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| Fair value of conversion of convertible secured debentures to common stock |
$ |
2,237,398 |
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$ |
1,248,247 |
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$ |
3,485,645 |
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