| Restatement of Previously Issued Unaudited Financial Statements |
Note
2. Restatement of Previously Issued Unaudited Financial Statements
In
the course of preparing our December 31, 2024 financial statements, the Company determined that it had incorrectly applied the
provisions of ASC 606 in revenues recorded pursuant to our service agreement with Afritex Texas and also incorrectly accounted
certain inventory transactions and expenses related to such agreement. Specifically, the Company determined that not all of the
criteria under ASC 606-10-25-1 was met to support the recognition of revenues amounting to approximately $1.2 million for the three
months ended March 31, 2024, approximately $1.1 million and $2.3 million for the three and six months ended June 30, 2024 and
approximately $0.6 million and $3.0 million for the three and nine months ended September 30, 2024. The above also resulted to
errors in the accounting of the Company’s inventory and other related transactions with Afritex. These errors resulted to
misstatements that required restatement of our previously issued unaudited interim financial statements for 2024.
The
following tables present the impact of the restatements, to the applicable line items in the unaudited consolidated balance sheets, unaudited
consolidated statements of operations, and unaudited consolidated statements of cash flow to the Company’s previously issued unaudited
consolidated financial statements for the three months ended March 31, 2024, the three and six months ended June
30, 2024 and the three and nine months ended September 30, 2024. The restatements did not impact the reported amounts of net cash used
in operating, investing and financing activities for the above-mentioned periods.:
Consolidated
Balance Sheet (unaudited) as of,
Schedule
of Previously Reported Consolidated Financial Statements
| | |
As
Previously Reported | | |
Adjustments | | |
As
Restated | | |
As
Previously Reported | | |
Adjustments | | |
As
Restated | | |
As
Previously Reported | | |
Adjustments | | |
As
Restated | |
| | |
March
31, 2024 | | |
June
30, 2024 | | |
September
30, 2024 | |
| | |
As
Previously Reported | | |
Adjustments | | |
As
Restated | | |
As
Previously Reported | | |
Adjustments | | |
As
Restated | | |
As
Previously Reported | | |
Adjustments | | |
As
Restated | |
| Accounts receivable, net
| |
$ | 910,815 | | |
$ | (490,750 | ) | |
$ | 420,065 | | |
$ | 600,478 | | |
$ | (400,833 | ) | |
$ | 199,645 | | |
$ | 1,316,093 | | |
$ | (994,740 | ) | |
$ | 321,353 | |
| Inventory, net | |
| 2,280,480 | | |
| (526,329 | ) | |
| 1,754,151 | | |
| 2,638,108 | | |
| (993,816 | ) | |
| 1,644,292 | | |
| 2,366,056 | | |
| (815,304 | ) | |
| 1,550,752 | |
| Other current
assets | |
| 1,326,011 | | |
| 343,599 | | |
| 1,669,610 | | |
| 2,455,069 | | |
| 724,095 | | |
| 3,179,164 | | |
| 1,697,407 | | |
| (501,381 | ) | |
| 1,196,026 | |
| Total current assets | |
| 4,539,604 | | |
| (673,480 | ) | |
| 3,866,124 | | |
| 5,766,765 | | |
| (670,554 | ) | |
| 5,096,211 | | |
| 5,452,253 | | |
| (2,311,425 | ) | |
| 3,140,828 | |
| Total assets | |
| 6,858,362 | | |
| (673,480 | ) | |
| 6,184,882 | | |
| 8,104,796 | | |
| (670,554 | ) | |
| 7,434,242 | | |
| 7,837,292 | | |
| (2,311,425 | ) | |
| 5,525,867 | |
| Accounts payable and accruals | |
| 1,061,169 | | |
| (487,124 | ) | |
| 574,045 | | |
| 839,494 | | |
| (292,407 | ) | |
| 547,087 | | |
| 836,849 | | |
| (210,867 | ) | |
| 625,982 | |
| Total current liabilities | |
| 3,669,807 | | |
| (487,124 | ) | |
| 3,182,683 | | |
| 3,232,506 | | |
| (292,407 | ) | |
| 2,940,099 | | |
| 2,924,403 | | |
| (210,867 | ) | |
| 2,713,536 | |
| Total liabilities | |
| 4,282,022 | | |
| (487,124 | ) | |
| 3,794,898 | | |
| 3,489,951 | | |
| (292,407 | ) | |
| 3,197,544 | | |
| 3,111,973 | | |
| (210,867 | ) | |
| 2,901,106 | |
| Accumulated deficit | |
| (34,903,827 | ) | |
| (186,356 | ) | |
| (35,090,183 | ) | |
| (36,745,793 | ) | |
| (378,147 | ) | |
| (37,123,940 | ) | |
| (38,070,941 | ) | |
| (2,100,558 | ) | |
| (40,171,499 | ) |
| Total stockholders’ equity | |
| 2,576,340 | | |
| (186,356 | ) | |
| 2,389,984 | | |
| 4,614,845 | | |
| (378,147 | ) | |
| 4,236,698 | | |
| 4,725,319 | | |
| (2,100,558 | ) | |
| 2,624,761 | |
| Total liabilities and stock holders’ equity | |
| 6,858,362 | | |
| (673,480 | ) | |
| 6,184,882 | | |
| 8,104,796 | | |
| (670,554 | ) | |
| 7,434,242 | | |
| 7,837,292 | | |
| (2,311,425 | ) | |
| 5,525,867 | |
Consolidated
Statements of Operations and Comprehensive loss (unaudited) as of,
| | |
As Previously Reported | | |
Adjustments | | |
As Restated | |
| | |
Three Months Ended March 31 | |
| | |
As Previously Reported | | |
Adjustments | | |
As Restated | |
| Revenue, net | |
$ | 2,260,329 | | |
$ | (1,200,974 | ) | |
$ | 1,059,355 | |
| Cost of revenue | |
| 2,089,567 | | |
| (990,578 | ) | |
| 1,098,989 | |
| Gross profit | |
| 170,762 | | |
| (210,396 | ) | |
| (39,634 | ) |
| Other Operating Expenses | |
| 705,651 | | |
| (24,040 | ) | |
| 681,611 | |
| Loss from operations | |
| (842,199 | ) | |
| (186,356 | ) | |
| (1,028,555 | ) |
| Net loss | |
| (1,093,095 | ) | |
| (186,356 | ) | |
| (1,279,451 | ) |
| Net loss attributable to common stockholders | |
| (1,093,095 | ) | |
| (186,356 | ) | |
| (1,279,451 | ) |
| Comprehensive loss | |
| (1,015,062 | ) | |
| (186,356 | ) | |
| (1,201,418 | ) |
| Net loss per common share - basic and diluted | |
| (2.07 | ) | |
| (0.35 | ) | |
| (2.42 | ) |
Consolidated
Statements of Operations and Comprehensive loss (unaudited) as of,
| | |
As Previously Reported | | |
Adjustments | | |
As Restated | | |
As Previously Reported | | |
Adjustments | | |
As Restated | |
| | |
Three months ended June 30, 2024 | | |
Six months ended June 30, 2024 | |
| | |
As Previously Reported | | |
Adjustments | | |
As Restated | | |
As Previously Reported | | |
Adjustments | | |
As Restated | |
| Revenue, net | |
$ | 1,776,558 | | |
$ | (1,141,540 | ) | |
$ | 635,018 | | |
$ | 4,036,887 | | |
$ | (2,342,514 | ) | |
$ | 1,694,373 | |
| Cost of revenue | |
| 1,482,041 | | |
| (894,525 | ) | |
| 587,516 | | |
| 3,571,608 | | |
| (1,885,103 | ) | |
| 1,686,505 | |
| Gross profit | |
| 294,517 | | |
| (247,015 | ) | |
| 47,502 | | |
| 465,279 | | |
| (457,411 | ) | |
| 7,868 | |
| Other operating expenses | |
| 689,414 | | |
| (55,224 | ) | |
| 634,190 | | |
| 1,395,065 | | |
| (79,264 | ) | |
| 1,315,801 | |
| Loss from operations | |
| (691,723 | ) | |
| (191,790 | ) | |
| (883,513 | ) | |
| (1,533,922 | ) | |
| (378,147 | ) | |
| (1,912,069 | ) |
| Net loss | |
| (1,841,967 | ) | |
| (191,790 | ) | |
| (2,033,757 | ) | |
| (2,935,062 | ) | |
| (378,147 | ) | |
| (3,313,209 | ) |
| Net loss attributable to common shareholders | |
| (1,841,967 | ) | |
| (191,790 | ) | |
| (2,033,757 | ) | |
| (2,935,062 | ) | |
| (378,147 | ) | |
| (3,313,209 | ) |
| Comprehensive loss | |
| (1,823,178 | ) | |
| (191,790 | ) | |
| (2,014,968 | ) | |
| (2,838,240 | ) | |
| (378,147 | ) | |
| (3,216,387 | ) |
| Net loss per common share - basic and diluted | |
| (1.52 | ) | |
| (0.16 | ) | |
| (1.68 | ) | |
| (3.39 | ) | |
| (0.44 | ) | |
| (3.82 | ) |
Consolidated
Statements of Operations and Comprehensive loss (unaudited) as of,
| | |
As Previously Reported | | |
Adjustments | | |
As Restated | | |
As Previously Reported | | |
Adjustments | | |
As Restated | |
| | |
Three months ended September 30, 2024 | | |
Nine months ended September 30, 2024 | |
| | |
As Previously Reported | | |
Adjustments | | |
As Restated | | |
As Previously Reported | | |
Adjustments | | |
As Restated | |
| Revenue, net | |
$ | 884,283 | | |
$ | (624,504 | ) | |
$ | 259,779 | | |
$ | 4,921,170 | | |
$ | (2,967,018 | ) | |
$ | 1,954,152 | |
| Cost of revenue | |
| 887,850 | | |
| (336,734 | ) | |
| 551,116 | | |
| 4,459,458 | | |
| (2,221,838 | ) | |
| 2,237,620 | |
| Gross profit (loss) | |
| (3,567 | ) | |
| (287,770 | ) | |
| (291,337 | ) | |
| 461,712 | | |
| (745,180 | ) | |
| (283,468 | ) |
| Commissions | |
| 11,429 | | |
| (11,429 | ) | |
| - | | |
| 15,650 | | |
| (11,429 | ) | |
| 4,221 | |
| Other operating expenses | |
| 631,722 | | |
| 1,446,071 | | |
| 2,077,793 | | |
| 2,026,787 | | |
| 1,366,807 | | |
| 3,393,594 | |
| Loss from operations | |
| (919,795 | ) | |
| (1,722,412 | ) | |
| (2,642,207 | ) | |
| (2,453,717 | ) | |
| (2,100,558 | ) | |
| (4,554,275 | ) |
| Net loss | |
| (1,325,147 | ) | |
| (1,722,412 | ) | |
| (3,047,559 | ) | |
| (4,260,209 | ) | |
| (2,100,558 | ) | |
| (6,360,767 | ) |
| Net loss attributable to common shareholders | |
| (1,325,147 | ) | |
| (1,722,412 | ) | |
| (3,047,559 | ) | |
| (4,260,209 | ) | |
| (2,100,558 | ) | |
| (6,360,767 | ) |
| Comprehensive loss | |
| (1,343,145 | ) | |
| (1,722,412 | ) | |
| (3,065,557 | ) | |
| (4,181,385 | ) | |
| (2,100,558 | ) | |
| (6,281,943 | ) |
| Net loss per common share - basis and diluted | |
| (0.48 | ) | |
| (0.63 | ) | |
| (1.11 | ) | |
| (2.84 | ) | |
| (1.40 | ) | |
| (4.24 | ) |
Consolidated
Statements of Cash Flows (unaudited) as of,
| | |
As Previously
Reported | | |
Adjustments | | |
As Restated | | |
As Previously
Reported | | |
Adjustments | | |
As Restated | | |
As Previously
Reported | | |
Adjustments | | |
As Restated | |
| | |
Three
Months Ended March 31, 2024 | | |
Six Months
Ended June 30, 2024 | | |
Nine Months Ended September 30, 2024 | |
| | |
As Previously
Reported | | |
Adjustments | | |
As Restated | | |
As Previously
Reported | | |
Adjustments | | |
As Restated | | |
As Previously
Reported | | |
Adjustments | | |
As Restated | |
| Net Loss | |
$ | (1,093,095 | ) | |
$ | (186,356 | ) | |
$ | (1,279,451 | ) | |
$ | (2,935,062 | ) | |
$ | (378,147 | ) | |
$ | (3,313,209 | ) | |
$ | (4,260,209 | ) | |
$ | (2,100,558 | ) | |
$ | (6,360,767 | ) |
| Credit loss expense | |
| 4,051 | | |
| 4,051 | | |
| - | | |
| - | | |
| | | |
| - | | |
| 35,096 | | |
| 35,096 | | |
| - | |
| Accounts receivables | |
| (380,671 | ) | |
| (494,801 | ) | |
| 114,130 | | |
| (66,283 | ) | |
| (400,833 | ) | |
| 334,550 | | |
| (816,994 | ) | |
| (1,029,836 | ) | |
| 212,842 | |
| Inventories | |
| 167,992 | | |
| (526,329 | ) | |
| 694,321 | | |
| (400,510 | ) | |
| (993,816 | ) | |
| 593,306 | | |
| (472,435 | ) | |
| (815,304 | ) | |
| 342,869 | |
| Other current assets | |
| (102,539 | ) | |
| 343,599 | | |
| (446,138 | ) | |
| (799,947 | ) | |
| 724,095 | | |
| (1,524,042 | ) | |
| (863,936 | ) | |
| (501,381 | ) | |
| (362,556 | ) |
| Accounts payable and accruals | |
| 388,691 | | |
| 487,124 | | |
| (98,433 | ) | |
| 130,298 | | |
| 292,407 | | |
| (162,109 | ) | |
| 127,653 | | |
| 210,867 | | |
| (83,214 | ) |
|