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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549
___________________

FORM 10-Q/A
(Amendment No. 1)

    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 2021
OR

    TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
to .

Commission File Number: 001-34269
_______________________

SHARPS COMPLIANCE CORP.
(Exact name of registrant as specified in its charter)
Delaware74-2657168
(State or other jurisdiction of(I.R.S. Employer Identification No.)
incorporation or organization)

9220 Kirby Drive, Suite 500, Houston, Texas
77054
(Address of principal executive offices)(Zip Code)
    
(713) 432-0300
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading SymbolName of Each Exchange on Which Registered
Common Shares, $0.01 Par ValueSMEDThe NASDAQ Capital Market
Indicate by check mark if the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes   No 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Securities Exchange Act of 1934.
Large accelerated filer ☐
Accelerated filer ☐
Non-accelerated filer
Smaller reporting company 
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12(b)-2 of the Exchange Act). Yes  No 

As of January 31, 2022, there were 19,247,243 outstanding shares of the Registrant's common stock, par value $0.01 per share.






SHARPS COMPLIANCE CORP. AND SUBSIDIARIES
PAGE

3


EXPLANATORY NOTE

On May 11, 2022, Sharps Compliance Corp. (“Sharps” or the “Company”) filed a Current Report on Form 8-K disclosing that the Audit Committee of the Board of Directors of the Company concluded that the unaudited consolidated financial statements included in the Company’s Quarterly Reports on Form 10-Q for the quarterly periods ended September 30, 2021 and December 31, 2021, filed with the Securities and Exchange Commission on November 3, 2021 and February 2, 2022, respectively (the “Initial Filings”), should not be relied upon because the Company had under reported freight costs associated with immunization related mailbacks returned for treatment. This occurred primarily as a result of a misunderstanding with the applicable carrier regarding certain charges for services rendered during these periods.

For the convenience of the reader, we have included all items in this Amendment which supersedes in its entirety the Original Form 10-Q. Prior to the filing of this Amendment No. 1, we have filed the amended Quarterly Report on Form 10-Q/A for the period ended September 30, 2021.

The following sections in the Original From 10-Q have been revised in this Amendment No. 1 to reflect the restatement:
Part I, Item 1, "Financial Statements
Part I, Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations"
Part I, Item 4, "Controls and Procedures"
Part II, Item 1A, "Risk Factors"
the Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer certifications in Exhibits 31.1, 31.2, 31.3, and 32

This amendment does not reflect adjustments for events occurring after the filing of the Original Form 10-Q except to the extent that they are otherwise required to be included and discussed herein and did not substantively modify or update the disclosures herein other than as required to reflect the adjustments described above. See Note 2 to the accompanying condensed consolidated financial statements, set forth in Item 1 of this Quarterly Report on Form 10-Q/A, for details of the restatement and its impact on the condensed consolidated financial statements.

See "Item 4 — Controls and Procedures" that discloses a material weakness in the Company's internal controls associated with the restatements.


4


PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS

SHARPS COMPLIANCE CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except share and par value amounts)
 December 31,June 30,
 20212021
(As restated)
ASSETS  
CURRENT ASSETS  
Cash$36,001 $27,767 
Accounts receivable, net 13,047 9,738 
Inventory6,821 6,114 
Contract asset18 20 
Prepaid and other current assets1,895 1,459 
TOTAL CURRENT ASSETS57,782 45,098 
PROPERTY, PLANT AND EQUIPMENT, net11,155 10,843 
OPERATING LEASE RIGHT OF USE ASSET9,073 8,353 
FINANCING LEASE RIGHT OF USE ASSET, net980 907 
INVENTORY, net of current portion957 989 
OTHER ASSETS154 110 
GOODWILL7,996 6,735 
INTANGIBLE ASSETS, net2,772 2,239 
DEFERRED TAX ASSET, net403 157 
TOTAL ASSETS$91,272 $75,431 
LIABILITIES AND STOCKHOLDERS' EQUITY  
CURRENT LIABILITIES  
Accounts payable$3,592 $2,922 
Accrued liabilities5,108 3,940 
Operating lease liability2,457 2,368 
Financing lease liability189 160 
Current maturities of long-term debt480 735 
Contract liability5,062 7,028 
TOTAL CURRENT LIABILITIES16,888 17,153 
CONTRACT LIABILITY, net of current portion408 1,461 
OPERATING LEASE LIABILITY, net of current portion6,752 6,118 
FINANCING LEASE LIABILITY, net of current portion804 741 
OTHER LIABILITIES23 45 
LONG-TERM DEBT, net of current portion3,172 3,329 
TOTAL LIABILITIES28,047 28,847 
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY  
Common stock, $0.01 par value per share; 40,000,000 shares authorized; 19,542,858 and 17,454,859 shares issued, respectively and 19,247,243 and 17,159,244 shares outstanding, respectively
197 176 
Treasury stock, at cost, 295,615 shares repurchased
(1,554)(1,554)
Additional paid-in capital51,712 34,333 
Retained earnings12,870 13,629 
TOTAL STOCKHOLDERS' EQUITY63,225 46,584 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$91,272 $75,431 
The accompanying notes are an integral part of these condensed consolidated financial statements.
5


SHARPS COMPLIANCE CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per-share data)
 Three-Months Ended
December 31,
 20212020
(As restated)
REVENUES$18,878 $17,011 
Cost of revenues13,449 11,374 
GROSS PROFIT5,429 5,637 
Selling, general and administrative4,388 3,756 
Depreciation and amortization236 205 
OPERATING INCOME805 1,676 
OTHER INCOME (EXPENSE)  
Interest income14  
Interest expense(58)(47)
Income associated with derivative instrument27 10 
TOTAL OTHER EXPENSE(17)(37)
INCOME BEFORE INCOME TAXES788 1,639 
INCOME TAX EXPENSE
Current25 64 
Deferred181 347 
TOTAL INCOME TAX EXPENSE206 411 
NET INCOME$582 $1,228 
NET INCOME PER COMMON SHARE - Basic and Diluted$0.03 $0.07 
WEIGHTED AVERAGE SHARES USED IN COMPUTING
   NET INCOME PER COMMON SHARE:
Basic19,245 16,497 
Diluted19,400 16,929 

The accompanying notes are an integral part of these condensed consolidated financial statements.

6


SHARPS COMPLIANCE CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per-share data)
 Six-Months Ended
December 31,
 20212020
(As restated)
REVENUES$32,793 $30,162 
Cost of revenues24,665 20,902 
GROSS PROFIT8,128 9,260 
Selling, general and administrative8,588 7,544 
Depreciation and amortization454 409 
OPERATING INCOME (LOSS)(914)1,307 
OTHER INCOME (EXPENSE)  
Interest income14  
Interest expense(114)(79)
Income associated with derivative instrument34 15 
TOTAL OTHER EXPENSE(66)(64)
INCOME (LOSS) BEFORE INCOME TAXES(980)1,243 
INCOME TAX EXPENSE (BENEFIT)
Current25 64 
Deferred(246)244 
TOTAL INCOME TAX EXPENSE (BENEFIT)(221)308 
NET INCOME (LOSS)$(759)$935 
NET INCOME (LOSS) PER COMMON SHARE - Basic and Diluted$(0.04)$0.06 
WEIGHTED AVERAGE SHARES USED IN COMPUTING
    NET INCOME (LOSS) PER COMMON SHARE:
Basic 18,562 16,444 
Diluted18,562 16,875 
 
The accompanying notes are an integral part of these condensed consolidated financial statements.

7


SHARPS COMPLIANCE CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)
(In thousands, except share data)
 Common StockTreasury StockAdditional
Paid-in
Capital
 Retained EarningsTotal
Stockholders'
Equity
Shares AmountSharesAmount
Balances, September 30, 2021, as restated19,524,859 $197 (295,615)$(1,554)$51,363 $12,288 $62,294 
Stock-based compensation— — — — 349 — 349 
Issuance of restricted stock17,999 — — — — — — 
Net income, as restated— — — — — 582 582 
Balances, December 31, 2021, as restated19,542,858 $197 (295,615)$(1,554)$51,712 $12,870 $63,225 
 Common StockTreasury StockAdditional
Paid-in
Capital
 Retained Earnings Total
Stockholders'
Equity
SharesAmountSharesAmount
Balances, September 30, 202016,718,103 $169 (295,615)$(1,554)$30,589 $468 $29,578 
Exercise of stock options18,000 — — — 86 — 86 
Stock-based compensation— — — — 140 — 140 
Issuance of restricted stock63,599 1 — — (1)—  
Net income— — — — — 1,228 1,228 
Balances, December 31, 202016,799,702 $170 (295,615)$(1,554)$30,814 $1,696 $31,126 
 Common StockTreasury StockAdditional
Paid-in
Capital
Retained EarningsTotal
Stockholders'
Equity
SharesAmountSharesAmount
Balances, June 30, 202117,454,859 $176 (295,615)$(1,554)$34,333 $13,629 $46,584 
Issuance of common stock pursuant to secondary offering, net2,070,000 21 — — 16,750 — 16,771 
Stock-based compensation— — — — 629 — 629 
Issuance of restricted stock17,999 — — — — — — 
Net loss, as restated— — — — — (759)(759)
Balances, December 31, 2021, as restated19,542,858 $197 (295,615)$(1,554)$51,712 $12,870 $63,225 
 Common StockTreasury StockAdditional
Paid-in
Capital
Retained EarningsTotal
Stockholders'
Equity
Shares AmountSharesAmount
Balances, June 30, 202016,667,572 $168 (295,615)$(1,554)$30,203 $761 $29,578 
Exercise of stock options68,531 1 — — 310 — 311 
Stock-based compensation— — — — 302 — 302 
Issuance of restricted stock63,599 1 — — (1)—  
Net income— — — — — 935 935 
Balances, December 31, 202016,799,702 $170 (295,615)$(1,554)$30,814 $1,696 $31,126 

The accompanying notes are an integral part of these condensed consolidated financial statements.
8


SHARPS COMPLIANCE CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)

 Six-Months Ended
December 31,
 20212020
(As restated)
CASH FLOWS FROM OPERATING ACTIVITIES  
Net income (loss)$(759)$935 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization1,166 923 
Bad debt expense44 100 
Inventory write-off1 24 
Loss on disposal of property, plant and equipment 1 
Stock-based compensation expense629 302 
Income associated with derivative instrument(34)(15)
Deferred tax expense (benefit)(246)244 
Changes in operating assets and liabilities:
Accounts receivable(3,288)(1,597)
Inventory(676)355 
Prepaid and other assets(480)488 
Accounts payable and accrued liabilities1,649 160 
Contract asset and contract liability(3,017)1,050 
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES(5,011)2,970 
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment(761)(2,023)
Payments for business acquisition, net of cash acquired(2,181) 
Additions to intangible assets(74)(62)
NET CASH USED IN INVESTING ACTIVITIES(3,016)(2,085)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from exercise of stock options 311 
Proceeds from issuance of common stock, net 16,771 
Proceeds from long-term debt 961 
Repayments of long-term debt(412)(347)
Payments on financing lease liabilities(98) 
NET CASH PROVIDED BY FINANCING ACTIVITIES16,261 925 
NET INCREASE IN CASH8,234 1,810 
CASH, beginning of period27,767 5,416 
CASH, end of period$36,001 $7,226 
SUPPLEMENTAL CASH FLOW DISCLOSURES:
Income taxes paid, net of refunds$177 $(261)
Interest paid on long-term debt$116 $80 
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Property, plant and equipment financed through accounts payable$(143)$(263)

The accompanying notes are an integral part of these condensed consolidated financial statements.
9

SHARPS COMPLIANCE CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)


NOTE 1 - ORGANIZATION AND BACKGROUND

Organization: The accompanying unaudited condensed consolidated financial statements include the financial transactions and accounts of Sharps Compliance Corp. and its wholly owned subsidiaries, Sharps Compliance, Inc. of Texas (dba Sharps Compliance, Inc.), Sharps e-Tools.com Inc. (“Sharps e-Tools”), Sharps Manufacturing, Inc., Sharps Environmental Services, Inc. (dba Sharps Environmental Services of Texas, Inc.), Sharps Safety, Inc., Alpha Bio/Med Services LLC, Bio-Team Mobile LLC, Citiwaste, LLC, Sharps Properties, LLC and Affordable Medical Waste LLC (collectively, “Sharps” or the “Company”). All significant intercompany accounts and transactions have been eliminated upon consolidation.

Business: Sharps is a full-service national provider of comprehensive waste management services including medical, pharmaceutical and hazardous for small and medium quantity generators. The Company’s solutions include Sharps Recovery System™ (formerly Sharps Disposal by Mail System®), TakeAway Recovery System, TakeAway Medication Recovery System™, MedSafe®, TakeAway Recycle System™, ComplianceTRACSM, SharpsTracer®, Sharps Secure® Needle Disposal System, Complete Needle™ Collection & Disposal System, TakeAway Environmental Return System™, Pitch-It IV™ Poles, Asset Return System and Spill Kit Recovery System. The Company also offers its route-based pick-up services in a thirty-seven (37) state region of the South, Southeast, Southwest, Midwest and Northeast portions of the United States.


NOTE 2 - BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information and with instructions to Form 10-Q and, accordingly, do not include all information and footnotes required under generally accepted accounting principles in the United States of America ("GAAP") for complete financial statements. Additionally, the preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts. In the opinion of management, these interim condensed consolidated financial statements contain all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the consolidated financial position of the Company as of December 31, 2021, the results of its operations for the three and six months ended December 31, 2021 and 2020, cash flows for the six months ended December 31, 2021 and 2020, and stockholders’ equity for the three and six months ended December 31, 2021 and 2020. The results of operations for the three and six months ended December 31, 2021 are not necessarily indicative of the results to be expected for the entire fiscal year ending June 30, 2022. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended June 30, 2021.

Restatement of Previously Reported Condensed Consolidated Financial Statements

Subsequent to the issuance of the condensed consolidated financial statements as of and for the period ended December 31, 2021, the Company identified errors in the accounting for freight costs associated with immunization related mailbacks returned for treatment. The Company's management and the Audit Committee of the Company's Board of Directors concluded that it is appropriate to restate the unaudited condensed consolidated financial statements for the quarterly periods ended September 30, 2021 and December 31, 2021.


10


The following tables reflect the restatement adjustments recorded in connection with the Company's restatement of its condensed consolidated financial statements.

Condensed Consolidated Balance Sheet as of December 31, 2021

As Previously ReportedRestatement AdjustmentAs Restated
ASSETS  
CURRENT ASSETS  
Cash$36,001 $ $36,001 
Accounts receivable, net 13,047  13,047 
Inventory6,821  6,821 
Contract asset18  18 
Prepaid and other current assets1,857 38 1,895 
TOTAL CURRENT ASSETS57,744 38 57,782 
PROPERTY, PLANT AND EQUIPMENT, net11,155  11,155 
OPERATING LEASE RIGHT OF USE ASSET9,073  9,073 
FINANCING LEASE RIGHT OF USE ASSET, net980  980 
INVENTORY, net of current portion957  957 
OTHER ASSETS154  154 
GOODWILL7,996  7,996 
INTANGIBLE ASSETS, net2,772  2,772 
DEFERRED TAX ASSET, net 403 403 
TOTAL ASSETS$90,831 $441 $91,272 
LIABILITIES AND STOCKHOLDERS' EQUITY 
CURRENT LIABILITIES 
Accounts payable$3,592 $ $3,592 
Accrued liabilities3,208 1,900 5,108 
Operating lease liability2,457  2,457 
Financing lease liability189  189 
Current maturities of long-term debt480  480 
Contract liability5,062  5,062 
TOTAL CURRENT LIABILITIES14,988 1,900 16,888 
CONTRACT LIABILITY, net of current portion408  408 
OPERATING LEASE LIABILITY, net of current portion6,752  6,752 
FINANCING LEASE LIABILITY, net of current portion804  804 
OTHER LIABILITIES23  23 
DEFERRED TAX LIABILITY, net53 (53) 
LONG-TERM DEBT, net of current portion3,172  3,172 
TOTAL LIABILITIES26,200 1,847 28,047 
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY 
Common Stock, $0.01 par value
197  197 
Treasury stock, at cost, 295,615 shares repurchased
(1,554) (1,554)
Additional paid-in capital51,712  51,712 
Retained earnings14,276 (1,406)12,870 
TOTAL STOCKHOLDERS' EQUITY64,631 (1,406)63,225 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$90,831 $441 $91,272 
11


Condensed Consolidated Statements of Operations for Three Months Ended December 31, 2021

As Previously ReportedRestatement Adjustments As Restated
REVENUES$18,878 $ $18,878 
Cost of revenues12,271 1,178 13,449 
GROSS PROFIT6,607 (1,178)5,429 
Selling, general and administrative4,388  4,388 
Depreciation and amortization236  236 
OPERATING INCOME (LOSS)1,983 (1,178)805 
OTHER INCOME (EXPENSE)
Interest income14  14 
Interest expense(58) (58)
Income associated with derivative instrument27  27 
TOTAL OTHER EXPENSE(17) (17)
INCOME (LOSS) BEFORE INCOME TAXES1,966 (1,178)788 
INCOME TAX EXPENSE (BENEFIT)
Current63 (38)25 
Deferred466 (285)181 
TOTAL INCOME TAX EXPENSE (BENEFIT)529 (323)206 
NET INCOME (LOSS)$1,437 $(855)$582 
NET INCOME (LOSS) PER COMMON SHARE - Basic and Diluted$0.07 $(0.04)$0.03 
WEIGHTED AVERAGE SHARES USED IN COMPUTING
   NET INCOME PER COMMON SHARE:
Basic19,245  19,245 
Diluted19,400  19,400 


12


Condensed Consolidated Statements of Operations for Six Months Ended December 31, 2021

As Previously ReportedRestatement AdjustmentsAs Restated
REVENUES$32,793 $ $32,793 
Cost of revenues22,765 1,900 24,665 
GROSS PROFIT10,028 (1,900)8,128 
Selling, general and administrative8,588  8,588 
Depreciation and amortization454  454 
OPERATING INCOME (LOSS)986 (1,900)(914)
OTHER INCOME (EXPENSE) 
Interest income14  14 
Interest expense(114) (114)
Income associated with derivative instrument34  34 
TOTAL OTHER EXPENSE(66) (66)
INCOME (LOSS) BEFORE INCOME TAXES920 (1,900)(980)
INCOME TAX EXPENSE (BENEFIT)
Current63 (38)25 
Deferred210 (456)(246)
TOTAL INCOME TAX EXPENSE (BENEFIT)273 (494)(221)
NET INCOME (LOSS)$647 $(1,406)$(759)
NET INCOME (LOSS) PER COMMON SHARE - Basic and Diluted$0.03 $(0.07)$(0.04)
WEIGHTED AVERAGE SHARES USED IN COMPUTING
    NET INCOME (LOSS) PER COMMON SHARE:
Basic 18,562  18,562 
Diluted18,656 (94)18,562 


13


Condensed Consolidated Statement of Cash Flows for the Six Months Ended December 31, 2021

As Previously
Reported
Restatement AdjustmentsAs Restated
CASH FLOWS FROM OPERATING ACTIVITIES  
Net income (loss)$647 $(1,406)$(759)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization1,166  1,166 
Bad debt expense44  44 
Inventory write-off1  1 
Loss on disposal of property, plant and equipment   
Stock-based compensation expense629  629 
Income associated with derivative instrument(34) (34)
Deferred tax expense (benefit)210 (456)(246)
Changes in operating assets and liabilities:— 
Accounts receivable(3,288) (3,288)
Inventory(676) (676)
Prepaid and other assets(442)(38)(480)
Accounts payable and accrued liabilities(251)1,900 1,649 
Contract asset and contract liability(3,017) (3,017)
NET CASH USED IN OPERATING ACTIVITIES(5,011) (5,011)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment(761) (761)
Payments for business acquisition, net of cash acquired(2,181) (2,181)
Additions to intangible assets(74) (74)
NET CASH USED IN INVESTING ACTIVITIES(3,016) (3,016)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from exercise of stock options   
Proceeds from issuance of common stock, net 16,771 16,771 
Proceeds from long-term debt   
Repayments of long-term debt(412) (412)
Payments on financing lease liabilities(98) (98)
NET CASH PROVIDED BY FINANCING ACTIVITIES16,261  16,261 
NET INCREASE IN CASH8,234  8,234 
CASH, beginning of period27,767  27,767 
CASH, end of period$36,001  $36,001 
SUPPLEMENTAL CASH FLOW DISCLOSURES:
Income taxes paid, net of refunds$177  $177 
Interest paid on long-term debt$116  $116 
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Property, plant and equipment financed through accounts payable$(143) $(143)

Previously reported amounts for revenue, total cash flows from operating activities, and net changes in cash and cash equivalents are not affected by the adjustments described above. In addition, the condensed consolidated statements of stockholders' equity for the three-months and six-months ended December 31, 2021 and impacted disclosures have been restated to give effect to the correction.
14


Effects of COVID-19

A novel strain of coronavirus ("COVID-19") was first identified in December 2019, and subsequently declared a global pandemic by the World Health Organization on March 11, 2020. As a result of the outbreak, many companies have experienced disruptions in their operations and in servicing customers. The Company has implemented some and may take additional precautionary measures intended to help ensure the well-being of its employees, facilitate continued uninterrupted servicing of customers and minimize business disruptions. The full extent of the future impacts of COVID-19 on the Company's operations is uncertain. A prolonged outbreak could have a material adverse impact on the financial results and business operations of the Company. To date, the Company has not identified any material adverse impact of COVID-19 on its financial position and results of operations.

NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES

Revenue Recognition: The components of revenues by solution which reflect a disaggregation of revenue by contract type are as follows (in thousands):
 Three-Months Ended December 31,
 2021% Total2020% Total
REVENUES BY SOLUTION:    
Mailbacks$12,070 63.9 %$10,452 61.4 %
Route-based pickup services3,551 18.8 %3,491 20.5 %
Unused medications1,865 9.9 %1,713 10.1 %
Third party treatment services54 0.3 %179 1.1 %
Other (1)
1,338 7.1 %1,176 6.9 %
Total revenues$18,878 100.0 %$17,011 100.0 %
 Six-Months Ended December 31,
 2021% Total2020% Total
REVENUES BY SOLUTION:    
Mailbacks$18,818 57.3 %$16,614 55.2 %
Route-based pickup services6,750 20.6 %6,647 22.0 %
Unused medications4,494 13.7 %4,074 13.5 %
Third party treatment services85 0.3 %314 1.0 %
Other (1)
2,646 8.1 %