Restatement of Previously Issued Financial Statements

12 Months Ended

Dec. 31, 2024

Accounting Changes and Error Corrections [Abstract]

Restatement of Previously Issued Financial Statements

Note 2 – Restatement of Previously Issued Financial Statements

Management, in concurrence with the Company’s Audit Committee, concluded that the Company’s previously issued financial statements included in the Company’s previously issued audited year end financial information included in the Company’s Annual Report on Form 10-K for the annual period ended December 31, 2024 (“the Affected Financial Statements”) should no longer be relied upon. Details of the restated consolidated financial statements as of and for the period ended December 31, 2024 are provided below (“Restatement Items”). The Company evaluated the materiality of these errors both qualitatively and quantitatively in accordance with Staff Accounting Bulletin (“SAB”) No. 99, Materiality and SAB No. 108, Considering the Effects of Prior Year Misstatements in Current Year Financial Statements, and determined the effect of these corrections were material to the Affected Financial Statements. As a result of the material misstatements, the Company has restated our Affected Financial Statements, in accordance with ASC 250, Accounting Changes and Error Corrections.

The Restatement Items primarily reflect adjustments to correct errors with respect to the accounting for its preferred dividends and earnings per share.

The Company has also updated all accompanying footnotes and disclosures affected by the Restatement Items, within Note 9. Shareholders’ Equity (Deficit).

Summary Impact of Restatement Items

The following table presents the effect of the Restatement Items on the Company’s consolidated balance sheet for the period indicated:

	As Previously Reported			Restatement Adjustment			As Restated
	As of December 31, 2024
	As Previously Reported			Restatement Adjustment			As Restated
ASSETS
Current assets:
Cash	$	504,189		$	-		$	504,189
Accounts receivable, net		28,030			-			28,030
Prepaid expenses and other current assets		152,122			-			152,122
Note receivable, net		-			-			-
Assets of discontinued operations		-			-			-
Total current assets		684,341			-			684,341

Property and equipment, net		904,680			-			904,680

Total assets	$	1,589,021		$	-		$	1,589,021

LIABILITIES AND STOCKHOLDERS’ (DEFICIT)

Current liabilities:
Accounts payable and accrued expenses	$	2,714,102		$	3		$	2,714,105
Dividends payable		1,250,979			(755,458	)		495,521
Liabilities of discontinued operations		4,017,920			-			4,017,920
Total current liabilities		7,983,001			(755,455	)		7,227,546

Commitment and Contingencies - Note 12		-			-			-

Stockholders’ deficit:
Preferred stock - $0.001 par value, 5,000,000 authorized, Preferred stock at September 30, 2024 and 4,550 at December 31, 2023 issued and outstanding.		51			-			51
Common stock - $0.001 par value, 60,000,000 authorized; 2,013,199 at September 30, 2024 and 1,148,321 at December 31, 2023 issued and outstanding.		1,168			-			1,168
Additional paid-in capital		58,588,953			755,455			59,344,408
Accumulated deficit		(64,984,152	)		-			(64,984,152	)
Total stockholders’ deficit		(6,393,980	)		755,455			(5,638,525	)

Total liabilities and stockholders’ deficit	$	1,589,021		$	-		$	1,589,021

The following table presents the effect of the Restatement Items on the Company’s consolidated statement of operations for the year indicated:

	As Previously Reported			Restatement Adjustment			As Restated
	Year Ended December 31, 2024
	As Previously Reported			Restatement Adjustment			As Restated
Revenues, net		72,050			-			72,050
Cost of revenues		305,248			-			305,248
Gross profit		(233,198	)		-			(233,198	)

Operating expenses:

General and administrative		5,390,069			-			5,390,069
Total operating expenses		5,390,069			-			5,390,069

Operating loss		(5,623,267	)		-			(5,623,267	)

Other income (expense):
Interest income		3,470			-			3,470
Interest expense		(677,981	)		-			(677,981	)
Total other income (expenses)		(674,511	)		-			(674,511	)

Net loss before income taxes		(6,297,778	)		-			(6,297,778	)

Income taxes		-			-			-

Net loss from continuing operations		(6,297,778	)		-			(6,297,778	)

Net income (loss) from discontinued operations		(2,748,049	)		-			(2,748,049	)

Net loss		(9,045,827	)		-			(9,045,827	)

Preferred dividends		(1,250,979	)		(1,881,671	)		(3,132,650	)

Net loss available to common stockholders	$	(10,296,806	)	$	(1,881,671	)	$	(12,178,477	)

Net loss per share from continuing operations - Basic and diluted	$	(4.01	)	$	(2.00	)	$	(6.01	)

Income (Loss) per share from discontinued operations - Basic and diluted	$	(1.75	)	$	-		$	(1.75	)

Net loss per share - Basic and diluted	$	(5.76	)	$	(2.00	)	$	(7.76	)

Weighted average common shares outstanding
Basic and diluted		1,569,627			-			1,569,627

The following table presents the effect of the Restatement Items on the Company’s consolidated statement of stockholders’ equity:

	Number of Shares		Par		Number of Shares		Par		Additional Paid-In-Capital		Accumulated Deficit			Total
BALANCE - December 31, 2024		50,502	$	51		2,029,832	$	1,168	$	58,588,953	$	(64,984,152	)	$	(6,393,980	)
Cumulative adjustments		-		-		-		-		755,455		-			755,455
BALANCE - December 31, 2024 (As Restated)		50,502	$	51		2,029,832	$	1,168	$	59,344,408	$	(64,984,152	)	$	(5,638,525	)

The following table presents the effect of the Restatement Items on the Company’s consolidated statement of cash flows:

	As Previously Reported			Restatement Adjustment			As Restated
	Year Ended December 31, 2024
	As Previously Reported			Restatement Adjustment			As Restated
Cash flows from operating activities:
Net loss	$	(9,045,827	)	$	-		$	(9,045,827	)
Net income (loss) from discontinued operations		(2,748,049	)		-			(2,748,049	)
Net loss from continuing operations		(6,297,778	)		-			(6,297,778	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		139,182			-			139,182
Interest expense - OID		640,000			-			640,000
Share based compensation, net		35,415			-			35,415
Changes in operating assets and liabilities:
Accounts receivable		(28,030	)		-			(28,030	)
Prepaid expenses and other current assets		33,360			-			33,360
Accounts payable and accrued expenses		5,063,810			-			5,063,810
Net cash provided (used) in operating activities from continuing operations		(414,041	)		-			(414,041	)
Net cash provided (used) in operating activities from discontinued operations		(2,748,049	)		-			(2,748,049	)
Net cash used in operating activities		(3,162,090	)		-			(3,162,090	)

Cash flows from investing activities:
Note receivable		(375,000	)		-			(375,000	)
Net cash used in investing activities		(375,000	)		-			(375,000	)

Cash flows from financing activities:
Proceeds from issuance of preferred stock, net of offering costs		2,221,492			-			2,221,492
Proceeds from notes payable		1,600,000			-			1,600,000
Payments on finance lease obligation		(1,724	)		-			(1,724	)
Net cash provided in financing activities		3,819,768			-			3,819,768

Net increase (decrease) in cash		282,678			-			282,678

Cash, beginning of period		221,511			-			221,511

Cash, end of period	$	504,189		$	-		$	504,189

Supplemental cash flow information:
Interest paid	$	-		$	-		$	-
Income tax	$	-		$	-		$	-

Non-cash investing and financial activities:
Preferred stock conversion	$	2		$	-		$	2
Converted accrued C1 dividends	$	-		$	29,000		$	29,000
Accrued dividends	$	1,251,000		$	(1,251,000	)	$	-
Preferred dividends accrued – C-1 & C-2	$	-		$	306,000		$	306,000
Preferred dividends accrued – B-1	$	-		$	88,000		$	88,000
Preferred dividends accrued converted into C-1	$	-		$	(218,000	)	$	(218,000	)
Capitalized dividends – D, E, F & G	$	-		$	2,738,000		$	2,738,000
Settlement of notes receivable in connection with asset purchase agreement	$	1,044,000		$	-		$	1,044,000