Schedule of Restatement of Previously Issued Financial Statement |
The
following table presents the effect of the Restatement Items on the Company’s consolidated balance sheet for the period
indicated:
Schedule
of Restatement of Previously Issued Financial Statement
| |
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 | ) |
| |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | |
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 | |
|