| Restatements |
Note
12 – Restatements
Per
ASC 250-10, Accounting Changes and Error Corrections, the Company’s condensed consolidated financial statements were restated
to include changes and corrections made to reflect accounting principles in accordance with U.S. GAAP. The restated financial statements
include the following:
| • | Balance
Sheet as of September 30, 2024 |
| • | Statements
of Operations for the Three and Nine Months Ended September 30, 2024 |
| • | Statements
of Stockholders’ Deficit for the Three and Nine Months Ended September 30, 2024 |
| • | Statements
of Cash Flows for the Three and Nine Months Ended September 30, 2024 |
| • | Notes
to Condensed Consolidated Financial Statements |
Restatements
to Condensed Consolidated Balance Sheet
The
Condensed Consolidated Balance Sheet as of September 30, 2024 was restated. The Consolidated Balance Sheet as of December 31, 2023 was
previously audited, and no changes have been made. The table on the following page shows the effects of the restatements made to the
Condensed Consolidated Balance Sheet as of September 30, 2024. The restatements include the following significant items:
| • | Intangible
Assets, Net increased by $22,500 to report $48,500 due to capitalizing $25,000 in website
development costs and the associated amortization. |
| • | Accounts
Payable was decreased by $68,901 to report $43,514. The changes included various corrections
to accruals for professional fees and other expenses, reclassification of amounts to related-party
payables, and reclassification of $2,301 to a separate line item for other current liabilities
to conform with presentation in both prior and future periods. |
| • | Related-Party
Payables was increased by $96,064 to report $97,264. This includes corrections to the inclusion
of interest accrued on related-party notes payable as well as reclassification of amounts
owed to entities that became related parties subsequent to the issuance of the previous financial
statements. |
| • | Current
Portion of Notes Payable was decreased by $752,901 to report $16,244. Subsequent to the issuance
of the previous financial statements, the parties to various promissory notes mutually agreed
to extend the maturity dates and the holders of the notes became related parties. Thus, amounts
have been reclassified to the current portion and long-term portion of related-party notes
payable for the balance sheet as of September 30, 2024 (see explanation below on changes
to Related-Party Notes Payable). |
| • | Related-Party
Notes Payable, Net of Current Portion were increased by $410,644 to report $410,644 as a
result of these changes. Subsequent to the issuance of the previous financial statements,
the parties to various promissory notes issued by the Company mutually agreed to extend the
various maturity dates of these notes to August 15, 2025, December 31, 2025, and January
31, 2026 (see Note 7 for more information). Also, the holders of various promissory notes
became related parties with respect to the Company. Thus, the appropriate amounts have been
reclassified from Current Liabilities to Long-Term Liabilities and from Notes Payable to
Related-Party Notes Payable for the balance sheet as of September 30, 2024. |
| • | Additional
Paid-in Capital was decreased by $18,179 to report $36,622,837 as a result of the corrections
to stock-based compensation detailed in the restatements for the statement of operations
as well as the corrections to accumulated deficit and treasury stock detailed below. |
| • | Accumulated
Deficit was increased by $17,818 to report $(37,916,097) as a result of the changes detailed
in the restatements for the statement of operations and statement of stockholders’
deficit. |
| • | Less:
Treasury Stock was decreased by $3,336 to report $0. The treasury stock was reissued as explained
in Note 9. |
The
following table summarizes the changes made to the Condensed Consolidated Balance Sheet as of September 30, 2024:
| Schedule of restatements of condensed consolidated balance sheet | |
| | | |
| | | |
| | |
| | |
As of September 30, 2024 |
| | |
As Previously | |
Effect of | |
As |
| ASSETS | |
Issued | |
Restatement | |
Restated |
| Cash and Cash Equivalents | |
$ | 9,257 | | |
$ | 1,437 | | |
$ | 10,694 | |
| Other Current Assets | |
| 100 | | |
| — | | |
| 100 | |
| Property and Equipment, Net | |
| 143,243 | | |
| 1 | | |
| 143,244 | |
| Intangible Assets, Net | |
| 26,000 | | |
| 22,500 | | |
| 48,500 | |
| Total Assets | |
$ | 178,600 | | |
$ | 23,938 | | |
$ | 202,538 | |
| | |
| | | |
| | | |
| | |
| LIABILITIES AND STOCKHOLDERS' DEFICIT | |
| | | |
| | | |
| | |
| Accounts Payable | |
$ | 112,415 | | |
$ | (68,901 | ) | |
$ | 43,514 | |
| Deferred Revenue | |
| — | | |
| — | | |
| — | |
| Other Current Liabilities | |
| — | | |
| 2,301 | | |
| 2,301 | |
| Related-Party Payables (Note 8) | |
| 1,200 | | |
| 96,064 | | |
| 97,264 | |
| Current Portion of Notes Payable (Note 7) | |
| 769,145 | | |
| (752,901 | ) | |
| 16,244 | |
| Current Portion of Related-Party Notes Payable | |
| 350,000 | | |
| 350,000 | | |
| 700,000 | |
| Notes Payable, Net of Current Portion | |
| 134,228 | | |
| (16,244 | ) | |
| 117,984 | |
| Related-Party Notes Payable, Net of Current Portion | |
| — | | |
| 410,644 | | |
| 410,644 | |
| Total Liabilities | |
| 1,366,988 | | |
| 20,963 | | |
| 1,387,951 | |
| Common Stock | |
| 107,847 | | |
| — | | |
| 107,847 | |
| Additional Paid-in Capital | |
| 36,641,016 | | |
| (18,179 | ) | |
| 36,622,837 | |
| Accumulated Deficit | |
| (37,933,915 | ) | |
| 17,818 | | |
| (37,916,097 | ) |
| Less: Treasury Stock | |
| (3,336 | ) | |
| 3,336 | | |
| — | |
| Total Stockholders' Deficit | |
| (1,188,388 | ) | |
| 2,975 | | |
| (1,185,413 | ) |
| Total Liabilities and Stockholders' Deficit | |
$ | 178,600 | | |
$ | 23,938 | | |
$ | 202,538 | |
Restatements
to Condensed Consolidated Statements of Operations
The
Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2024 were restated. The tables
included in the following pages show the effects of the restatements for both years, which include the following significant items for
the three and nine months ended September 30, 2024:
| • | Lease
Revenue, as included in Gross Profit, was increased by $12,000 and $36,000 to report $12,000
and $36,000 for the three-and-six-month periods. Lease Income, as included in Other Income
and Expenses, was decreased by $12,000 and $36,000 to report $0 and $0 for the three-and-six-month
periods. This reclassification was done after determining the lease of the Company’s
marine equipment is a significant component of the Company’s business operations; therefore,
proceeds from the lease are reflected as Lease Revenue included in Gross Profit instead of
as Lease Income included in Other Income and Expenses. |
| • | Previously,
Cost of Sales was included in Operating Expenses on the statement of operations. Cost of
Sales was relabeled Cost of Services to conform to industry standards, and then it was reclassified
for inclusion in Gross Profit. This reclassification was done to bring presentation on the
statement of operations in line with industry standards and reports for subsequent quarters.
Cost of Services was decreased by $2,629 to report $8,412 for the three-month period. The
amount reported for Cost of Services did not change for the six-month period. |
| • | Gross
Profit was increased by $3,588 to report $9,722 for the three-month period and increased
by $9,198 to report $29,162 for the six-month period as a result of the changes listed above. |
| • | Amortization
was increased by $1,250 and $2,500 to report $1,250 and $2,500 for the three-and-six- month
periods. The amortization is related to the $25,000 of website development costs that were
capitalized. See Note 5 for details. |
| • | General
and Administrative expenses were decreased by $77,196 and $104,634 to report $(7,311) and
$20,134 for the three-and-six-month periods, reflecting corrections made to stock-based compensation
and other general and administrative expenses. The corrections made to stock-based compensation
include a $59,602 reduction to the expense due to the forfeiture of unvested stock options.
See Note 10 for details. |
| • | Professional
Fees were increased by $35,171 and $59,846 to report $49,302 and $96,482 for the three-and-six-month
periods due to corrections made to certain accruals for professional fees in accounts payable
and to reclassification of amounts from General and Administrative expenses to Professional
Fees to conform to presentation in both prior and future periods. |
| • | Interest
Expense was decreased by $898 to report ($19,496) for the three-month period, and decreased
by $1,458 to report ($55,897) for the six-month period. This change was due to corrections
to the estimates previously used to record accrued interest. |
| • | Net
Loss was decreased by $42,509 and $40,833 to report $(59,205) and $(336,141) for the three-and-six-month
periods as a result of the changes listed above. |
The
following table summarizes the changes made to the Condensed Consolidated Statement of Operations for the Three Months Ended September
30, 2024:
| Schedule of restatements of condensed consolidated statement of operations | |
| | | |
| | | |
| | |
| | |
For the Three Months Ended September 30, 2024 |
| | |
As Previously | |
Effect of | |
As |
| | |
Issued | |
Restatement | |
Restated |
| Revenue: | |
| | | |
| | | |
| | |
| Charter Revenue | |
$ | 6,134 | | |
$ | — | | |
$ | 6,134 | |
| Lease Revenue | |
| — | | |
| 12,000 | | |
| 12,000 | |
| Total Revenue | |
| 6,134 | | |
| 12,000 | | |
| 18,134 | |
| Cost of Services | |
| — | | |
| 8,412 | | |
| 8,412 | |
| Gross Profit | |
| 6,134 | | |
| 3,588 | | |
| 9,722 | |
| Operating Expenses: | |
| | | |
| | | |
| | |
| Cost of Sales | |
| 11,041 | | |
| (11,041 | ) | |
| — | |
| Amortization Expense | |
| — | | |
| 1,250 | | |
| 1,250 | |
| Depreciation Expense | |
| 6,713 | | |
| (2 | ) | |
| 6,711 | |
| General and Administrative | |
| 69,885 | | |
| (77,196 | ) | |
| (7,311 | ) |
| Professional Fees | |
| 14,131 | | |
| 35,171 | | |
| 49,302 | |
| Total Operating Expenses | |
| 101,770 | | |
| (51,818 | ) | |
| 49,952 | |
| Operating Loss | |
| (95,636 | ) | |
| 55,406 | | |
| (40,230 | ) |
| Other Income and Expenses: | |
| | | |
| | | |
| | |
| Lease Income | |
| 12,000 | | |
| (12,000 | ) | |
| — | |
| Depreciation | |
| — | | |
| — | | |
| — | |
| Interest Income | |
| 520 | | |
| 1 | | |
| 521 | |
| Interest Expense | |
| (18,598 | ) | |
| (898 | ) | |
| (19,496 | ) |
| Loss on Asset Purchase | |
| — | | |
| — | | |
| — | |
| Total Other Income and Expenses | |
| (6,078 | ) | |
| (12,897 | ) | |
| (18,975 | ) |
| Net Loss | |
$ | (101,714 | ) | |
$ | 42,509 | | |
$ | (59,205 | ) |
The
following table summarizes the changes made to the Condensed Consolidated Statement of Operations for the Nine Months Ended September
30, 2024:
| | |
For the Nine Months Ended September 30, 2024 |
| | |
As Previously | |
Effect of | |
As |
| | |
Issued | |
Restatement | |
Restated |
| Revenue: | |
| | | |
| | | |
| | |
| Charter Revenue | |
$ | 19,964 | | |
$ | — | | |
$ | 19,964 | |
| Lease Revenue | |
| — | | |
| 36,000 | | |
| 36,000 | |
| Total Revenue | |
| 19,964 | | |
| 36,000 | | |
| 55,964 | |
| Cost of Services | |
| — | | |
| 26,802 | | |
| 26,802 | |
| Gross Profit | |
| 19,964 | | |
| 9,198 | | |
| 29,162 | |
| Operating Expenses: | |
| | | |
| | | |
| | |
| Cost of Sales | |
| 26,802 | | |
| (26,802 | ) | |
| — | |
| Amortization Expense | |
| — | | |
| 2,500 | | |
| 2,500 | |
| Depreciation Expense | |
| 20,135 | | |
| (1 | ) | |
| 20,134 | |
| General and Administrative | |
| 295,475 | | |
| (104,634 | ) | |
| 190,841 | |
| Professional Fees | |
| 36,636 | | |
| 59,846 | | |
| 96,482 | |
| Total Operating Expenses | |
| 379,048 | | |
| (69,091 | ) | |
| 309,957 | |
| Operating Loss | |
| (359,084 | ) | |
| 78,289 | | |
| (280,795 | ) |
| Other Income and Expenses: | |
| | | |
| | | |
| | |
| Lease Income | |
| 36,000 | | |
| (36,000 | ) | |
| — | |
| Depreciation | |
| — | | |
| — | | |
| — | |
| Interest Income | |
| 549 | | |
| 2 | | |
| 551 | |
| Interest Expense | |
| (54,439 | ) | |
| (1,458 | ) | |
| (55,897 | ) |
| Loss on Asset Purchase | |
| — | | |
| — | | |
| — | |
| Total Other Income and Expenses | |
| (17,890 | ) | |
| (37,456 | ) | |
| (55,346 | ) |
| Net Loss | |
$ | (376,974 | ) | |
$ | 40,833 | | |
$ | (336,141 | ) |
|