| FINANCIAL STATEMENT RESTATEMENT |
NOTE 2 –FINANCIAL STATEMENT RESTATEMENT
In connection with the Company’s re-audit
of its financial statements for the year ended October 31, 2023, the Company’s management, in consultation with its independent
registered public accounting firm, identified corrections to the valuation of service stock issued during the year ended October 31, 2023,
and the termination of the patent agreement entered into on January 24, 2023. The corrections made that impact the condensed financial
statements for the quarter ended April 30, 2024, are summarized as follows:
- Stock Price Valuation Adjustment: The valuation of the stock
price was adjusted from $0.001 to $0.23 and there was an increase in share-based compensation reflecting the revised valuation of stock.
- Equity Adjustments: There was a corresponding increase in additional
paid-in capital and an adjustment in the accumulated deficit to reflect the revised stock valuation and related share-based compensation.
- Termination of Patent Purchase Agreement: On March 13, 2025,
the Company and Donald Owens mutually agreed to terminate the Patent Purchase Agreement as of January 24, 2023. As part of the termination,
the patents were returned to Mr. Owens, and the 5,000,000 shares of Series A Preferred Stock were canceled. The $82,500 value previously
reported in intangible assets and additional paid-in capital was reversed, resulting in a reduction in intangible assets. Additionally,
the related amortization expense of $3,176 and the issuance of Series A Preferred Stock were removed from the financial statements.
- Reclassification of Expenses: Expenses incurred during the fiscal
year ended October 31, 2023, and paid subsequently, have been reclassified to accounts payable as of October 31, 2023. This adjustment
ensures that financial obligations are accurately reported in the period in which they were incurred.
- The restatement includes the initial recognition of right-of-use
assets and corresponding lease liabilities on the balance sheet to properly reflect lease accounting in accordance with ASC 842.
These adjustments have been reflected in the restated financial
statements for the quarter ended April 30, 2024.
Impact of the Restatement
The impact of the restatement on the financial statements for
the affected period is presented below. In addition to the below, the related notes to the financial statements have also been adjusted
as appropriate to reflect the impact of the restatement.
The impact of the restatement on the line items within the previously reported
Condensed Unaudited Statement of Operations for the three and six months ended April 30, 2024, previously filed is as follows:
| Schedule of statement of operations |
|
|
|
|
|
|
|
|
|
|
|
|
| Statement of Operations for the three months ended April 30, 2024 |
|
As Previously Reported |
|
Adjustment |
|
As Restated |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Revenue |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
| Cost of goods sold |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
| Gross Profit |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
| General and administrative expenses |
|
$ |
526,635 |
|
|
$ |
— |
|
|
$ |
526,635 |
|
| Depreciation and amortization |
|
$ |
36,809 |
|
|
$ |
5,822 |
|
|
$ |
42,631 |
|
| Total Operating Expenses |
|
$ |
563,444 |
|
|
$ |
5,822 |
|
|
$ |
569,266 |
|
| Other Income (Expenses) |
|
|
|
|
|
|
|
|
|
|
|
|
| Interest income |
|
$ |
5,192 |
|
|
$ |
— |
|
|
$ |
5,192 |
|
| Interest expense |
|
$ |
(6,781 |
) |
|
$ |
— |
|
|
$ |
(6,781 |
) |
| Total Other (Expenses) |
|
$ |
(1,589 |
) |
|
$ |
— |
|
|
$ |
(1,589 |
) |
| Loss from Operations |
|
$ |
(565,033 |
) |
|
$ |
(5,822 |
) |
|
$ |
(570,855 |
) |
| Net Loss |
|
$ |
(565,033 |
) |
|
$ |
(5,822 |
) |
|
$ |
(570,855 |
) |
| PER SHARE AMOUNTS |
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net loss
per share |
|
$ |
(0.00 |
) |
|
$ |
— |
|
|
$ |
(0.00 |
) |
| Weighted average number of common shares outstanding - basic and diluted |
|
|
419,491,234 |
|
|
|
— |
|
|
|
419,491,234 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
Statement of Operations for the six months ended
April 30, 2024 |
|
|
As Previously Reported |
|
|
|
Adjustment |
|
|
|
As Restated |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Revenue |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
| Cost of goods sold |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
| Gross Profit |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
| General and administrative expenses |
|
$ |
1,009,505 |
|
|
$ |
(18,864 |
) |
|
$ |
990,641 |
|
| Depreciation and amortization |
|
$ |
70,092 |
|
|
$ |
8,975 |
|
|
$ |
79,067 |
|
| Total Operating Expenses |
|
$ |
1,079,597 |
|
|
$ |
(9,889 |
) |
|
$ |
1,069,708 |
|
| Other Income (Expenses) |
|
|
|
|
|
|
|
|
|
|
|
|
| Interest income |
|
$ |
5,492 |
|
|
$ |
— |
|
|
$ |
5,492 |
|
| Interest expense |
|
$ |
(13,712 |
) |
|
$ |
— |
|
|
$ |
(13,712 |
) |
| Total Other (Expenses) |
|
$ |
(8,220 |
) |
|
$ |
— |
|
|
$ |
(8,220 |
) |
| Loss from Operations |
|
$ |
(1,087,817 |
) |
|
$ |
9,889 |
|
|
$ |
(1,077,928 |
) |
| Net Loss |
|
$ |
(1,087,817 |
) |
|
$ |
9,889 |
|
|
$ |
(1,077,928 |
) |
| PER SHARE AMOUNTS |
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net loss
per share |
|
$ |
(0.00 |
) |
|
$ |
— |
|
|
$ |
(0.00 |
) |
| Weighted average number of common shares outstanding - basic and diluted |
|
|
419,439,854 |
|
|
|
— |
|
|
|
419,439,854 |
|
The impact of the restatement on the line items within the previously reported
Condensed Unaudited Statement of Changes in Stockholders’ Deficit for the three and six months ended April 30, 2024, previously
filed is as follows:
| Schedule of statement of changes in stockholders’ deficit |
|
|
|
|
|
|
|
|
|
|
|
|
| Changes in Statement of Stockholders' Deficit for the three months ended April 30, 2024 |
|
As Previously Reported |
|
Adjustment |
|
As Restated |
| Beginning Additional Paid-in Capital - Balance at January 31, 2024 |
|
$ |
41,171,311 |
|
|
$ |
390,275 |
|
|
$ |
41,561,586 |
|
| Beginning Accumulated Deficit - Balance at January 31, 2024 |
|
$ |
(42,132,662 |
) |
|
$ |
(470,515 |
) |
|
$ |
(42,603,177 |
) |
| Beginning Total Stockholders’ Deficit - Balance at January 31, 2024 |
|
$ |
(489,418 |
) |
|
$ |
(85,240 |
) |
|
$ |
(574,658 |
) |
| Series A preferred issued pursuant to patent agreement, shares |
|
|
10,000,000 |
|
|
|
(5,000,000 |
) |
|
|
5,000,000 |
|
| Series A preferred issued pursuant to patent agreement, amount |
|
$ |
10,000 |
|
|
$ |
(5,000 |
) |
|
$ |
5,000 |
|
| Net loss for the three months ended April 30, 2024 |
|
$ |
565,033 |
|
|
$ |
5,822 |
|
|
$ |
570,855 |
|
| Ending Additional paid in capital - Balance at April 30, 2024 |
|
$ |
41,291,591 |
|
|
$ |
390,275 |
|
|
$ |
41,681,866 |
|
| Ending Accumulated Deficit - Balance at April 30, 2024 |
|
$ |
(42,697,762 |
) |
|
$ |
(476,270 |
) |
|
$ |
(43,174,032 |
) |
| Ending Total Stockholders’ Deficit - Balance at April 30, 2024 |
|
$ |
(920,868 |
) |
|
$ |
(90,995 |
) |
|
$ |
(1,011,863 |
) |
| Changes in Statement of Stockholders' Deficit for the six months ended April 30, 2024 |
|
As Previously Reported |
|
Adjustment |
|
As Restated |
| Beginning Additional Paid-in Capital - Balance at October 31, 2023 |
|
$ |
41,079,902 |
|
|
$ |
390,275 |
|
|
$ |
41,470,177 |
|
| Beginning Accumulated Deficit - Balance at October 31, 2023 |
|
$ |
(41,609,945 |
) |
|
$ |
(486,159 |
) |
|
$ |
(42,096,104 |
) |
| Beginning Total Stockholders’ Deficit - Balance at October 31, 2023 |
|
$ |
(92,201 |
) |
|
|
(100,884 |
) |
|
|
(193,085 |
) |
| Series A preferred issued pursuant to patent agreement, shares |
|
|
10,000,000 |
|
|
|
(5,000,000 |
) |
|
|
5,000,000 |
|
| Series A preferred issued pursuant to patent agreement, amount |
|
$ |
10,000 |
|
|
$ |
(5,000 |
) |
|
$ |
5,000 |
|
| Net loss for the six months ended April 30, 2024 |
|
$ |
1,087,817 |
|
|
$ |
(9,889 |
) |
|
$ |
1,077,928 |
|
| Ending Additional paid in capital - Balance at April 30, 2024 |
|
$ |
41,291,591 |
|
|
$ |
390,275 |
|
|
$ |
41,681,866 |
|
| Ending Accumulated Deficit - Balance at April 30, 2024 |
|
$ |
(42,697,762 |
) |
|
$ |
(476,270 |
) |
|
$ |
(43,174,032 |
) |
| Ending Total Stockholders’ Deficit - Balance at April 30, 2024 |
|
$ |
(920,868 |
) |
|
$ |
(90,995 |
) |
|
$ |
(1,011,863 |
) |
The impact of the restatement on the line items within the previously
reported Condensed Unaudited Statement of Cash Flows for the six months ended April 30, 2024, previously filed is as follows:
| Schedule of statement of cash flows |
|
|
|
|
|
|
|
|
|
|
|
|
Statement of Cash Flows for the six months ended
April 30, 2024 |
|
As Previously Reported |
|
Adjustment |
|
As Restated |
| Cash Flow from Operating Activities |
|
|
|
|
|
|
|
|
|
|
|
|
| Net loss |
|
$ |
(1,087,817 |
) |
|
$ |
9,889 |
|
|
$ |
(1,077,928 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
| Depreciation and amortization |
|
$ |
70,092 |
|
|
$ |
8,975 |
|
|
$ |
79,067 |
|
| Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
| Decrease in due from related party |
|
$ |
56,392 |
|
|
$ |
— |
|
|
$ |
56,392 |
|
| Increase in accrued interest receivable |
|
$ |
(5,185 |
) |
|
$ |
— |
|
|
$ |
(5,185 |
) |
| Increase/(Decrease) in accounts payable |
|
$ |
15,813 |
|
|
$ |
(22,058 |
) |
|
$ |
(6,245 |
) |
| Increase/(Decrease) in accrued interest payable |
|
$ |
13,712 |
|
|
$ |
— |
|
|
$ |
13,712 |
|
| Increase in lease vendor payable |
|
$ |
— |
|
|
$ |
498 |
|
|
$ |
498 |
|
| Operating lease ROU assets and lease liabilities, net |
|
$ |
422 |
|
|
$ |
146 |
|
|
$ |
568 |
|
| Increase (Decrease) in payroll taxes |
|
$ |
(14,802 |
) |
|
$ |
— |
|
|
$ |
(14,802 |
) |
| Net Cash Used in Operating Activities |
|
$ |
(951,373 |
) |
|
$ |
(2,550 |
) |
|
$ |
(953,923 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Cash Flows from Financing Activities |
|
|
|
|
|
|
|
|
|
|
|
|
| Proceeds from related party advances |
|
$ |
710,585 |
|
|
$ |
— |
|
|
$ |
710,585 |
|
| Proceeds from security deposits |
|
$ |
100,000 |
|
|
$ |
— |
|
|
$ |
100,000 |
|
| Proceeds from sale of common stock subscription payable |
|
$ |
47,249 |
|
|
$ |
— |
|
|
$ |
47,249 |
|
| Proceeds from sale of common stock |
|
$ |
211,901 |
|
|
$ |
— |
|
|
$ |
211,901 |
|
| Net Cash Provided by Financing Activities |
|
$ |
1,069,735 |
|
|
$ |
— |
|
|
$ |
1,069,735 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Cash Flows from Investing Activities |
|
|
|
|
|
|
|
|
|
|
|
|
| Purchase of property and equipment |
|
$ |
(186,777 |
) |
|
$ |
2,550 |
|
|
$ |
(184,227 |
) |
| Purchase of long term asset |
|
$ |
(89,285 |
) |
|
$ |
— |
|
|
$ |
(89,285 |
) |
| Net Cash Used in Investing Activities |
|
$ |
(276,062 |
) |
|
$ |
2,550 |
|
|
$ |
(273,512 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Net increase (decrease) in cash |
|
$ |
(157,700 |
) |
|
$ |
— |
|
|
$ |
(157,700 |
) |
| Cash at beginning of period |
|
$ |
235,159 |
|
|
$ |
— |
|
|
$ |
235,159 |
|
| Cash at end of period |
|
$ |
77,459 |
|
|
$ |
— |
|
|
$ |
77,459 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Supplemental Disclosure for Non-Cash Investing and Financing Activities: |
|
|
|
|
|
|
|
|
|
|
|
|
| Record right-to-use asset and lease liability per ASC 842 |
|
$ |
(149,662 |
) |
|
$ |
(18,087 |
) |
|
$ |
(167,749 |
) |
|