| 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 March 31, 2024 |
| • | Statements
of Operations for the Three Months Ended March 31, 2024 |
| • | Statements
of Stockholders’ Deficit for the Three Months Ended March 31, 2024 |
| • | Statements
of Cash Flows for the Three Months Ended March 31, 2024 |
| • | Notes
to Condensed Consolidated Financial Statements |
Restatements
to Condensed Consolidated Balance Sheet
The
Condensed Consolidated Balance Sheet as of March 31, 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 March 31, 2024. The restatements include the following significant items:
| • | Accounts
Payable was decreased by $83,523 to report $25,221. The changes included various corrections
to accruals for professional fees and other expenses, reclassifications of amounts to related-party
payables, and reclassifying deferred revenue to a separate line item to conform with presentation
in both prior and future periods. |
| • | Deferred
Revenue was increased by $8,000 to report $8,000. Deferred revenue was included in accounts
payable and accrued liabilities on the previously issued financial statements. This reclassification
was done to conform with the presentation used in subsequent quarters. |
| • | Related-Party
Payables was increased by $76,826 to report $107,626. 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 $766,605 to report $17,621. Subsequent to the issuance
of the previous financial statements, the parties to various promissory notes mutually agreed
to extend the maturity dates. Thus, amounts have been reclassified to long-term liabilities
for the balance sheet as of March 31, 2024 (see explanation below on changes to Related-Party
Notes Payable). |
| • | Current
Portion of Related-Party Notes Payable was decreased by $300,000 to report $0. Subsequent
to the issuance of the previous financial statements, the parties to this promissory note
mutually agreed to extend the maturity date of the promissory note from February 22, 2025
to January 31, 2026. Thus, this amount has been reclassified to long-term liabilities for
the balance sheet as of March 31, 2024 (see explanation below on changes to Related-Party
Notes Payable). |
| • | Related-Party
Notes Payable, Net of Current Portion were increased by $1,060,644 to report $1,060,644 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 July 31, 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 March 31, 2024. |
| • | Additional
Paid-in Capital was increased by $23,150 to report $36,573,310 as a result of the correction
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 $17,292 to report ($37,703,670) 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 March 31, 2024:
| Schedule of restatements of condensed consolidated balance sheet | |
| | | |
| | | |
| | |
| | |
As of March 31, 2024 |
| | |
As Previously | |
Effect of | |
As |
| ASSETS | |
Issued | |
Restatement | |
Restated |
| Cash and Cash Equivalents | |
$ | 134,038 | | |
$ | (245 | ) | |
$ | 133,793 | |
| Other Current Assets | |
| 5,100 | | |
| — | | |
| 5,100 | |
| Property and Equipment, Net | |
| 156,666 | | |
| — | | |
| 156,666 | |
| Intangible Assets, Net | |
| 26,000 | | |
| — | | |
| 26,000 | |
| Total Assets | |
$ | 321,804 | | |
$ | (245 | ) | |
$ | 321,559 | |
| | |
| | | |
| | | |
| | |
| LIABILITIES AND STOCKHOLDERS' DEFICIT | |
| | | |
| | | |
| | |
| Accounts Payable | |
$ | 108,744 | | |
$ | (83,523 | ) | |
$ | 25,221 | |
| Deferred Revenue | |
| — | | |
| 8,000 | | |
| 8,000 | |
| Other Current Liabilities | |
| — | | |
| 758 | | |
| 758 | |
| Related-Party Payables (Note 8) | |
| 30,800 | | |
| 76,826 | | |
| 107,626 | |
| Current Portion of Notes Payable (Note 7) | |
| 784,226 | | |
| (766,605 | ) | |
| 17,621 | |
| Current Portion of Related-Party Notes Payable | |
| 300,000 | | |
| (300,000 | ) | |
| — | |
| Notes Payable, Net of Current Portion | |
| 129,741 | | |
| (5,539 | ) | |
| 124,202 | |
| Related-Party Notes Payable, Net of Current Portion | |
| — | | |
| 1,060,644 | | |
| 1,060,644 | |
| Total Liabilities | |
| 1,353,511 | | |
| (9,439 | ) | |
| 1,344,072 | |
| Common Stock | |
| 107,847 | | |
| — | | |
| 107,847 | |
| Additional Paid-in Capital | |
| 36,550,160 | | |
| 23,150 | | |
| 36,573,310 | |
| Accumulated Deficit | |
| (37,686,378 | ) | |
| (17,292 | ) | |
| (37,703,670 | ) |
| Less: Treasury Stock | |
| (3,336 | ) | |
| 3,336 | | |
| — | |
| Total Stockholders' Deficit | |
| (1,031,707 | ) | |
| 9,194 | | |
| (1,022,513 | ) |
| Total Liabilities and Stockholders' Deficit | |
$ | 321,804 | | |
$ | (245 | ) | |
$ | 321,559 | |
Restatements
to Condensed Consolidated Statements of Operations
The
Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2024 was restated. The table included
in the following page shows the effects of the restatements for both years, which include the following significant items for the three
months ended March 31, 2024:
| • | Lease
Revenue, as included in Gross Profit, was increased by $12,000 to report $12,000. Lease Income,
as included in Other Income and Expenses, was decreased by $12,000 to report $0. 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. |
| • | Cost
of Services, as included in Gross Profit, was increased by $4,621 to report $4,621. Previously,
Cost of Sales was included in General and Administrative 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. |
| • | Gross
Profit was increased by $7,379 to report $7,379 as a result of the changes listed above. |
| • | Depreciation
Expense, as included in Operating Expenses, was increased by $6,712 to report $6,712. Previously,
Depreciation was included in Other Income and Expenses on the statement of operations. This
change was made to reflect the appropriate inclusion of depreciation in Operating Expenses
because all of the fixed assets being depreciated are used directly in activities generating
Charter Revenue and Lease Revenue. An issue with $1 of rounding error was also fixed. |
| • | General
and Administrative expenses were decreased by $895 to report $105,972, reflecting a $3,471
increase to stock-based compensation and a $4,366 decrease to other operating expenses. |
| • | Professional
Fees were decreased by $10,251 to report $1,210 due to certain corrections to accruals made
for professional fees in accounts payable. |
| • | Interest
Expense was increased by $807 to report ($17,223). This change was due to corrections to
the estimates previously used to record accrued interest. |
| • | Net
Loss was decreased by $5,723 to report ($123,714) 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 March 31,
2024:
| Schedule of restatements of condensed consolidated statement of operations | |
| | | |
| | | |
| | |
| | |
For the Three Months Ended March 31, 2024 |
| | |
As Previously | |
Effect of | |
As |
| | |
Issued | |
Restatement | |
Restated |
| Revenue: | |
| | | |
| | | |
| | |
| Lease Revenue | |
$ | — | | |
$ | 12,000 | | |
$ | 12,000 | |
| Total Revenue | |
| — | | |
| 12,000 | | |
| 12,000 | |
| Cost of Services | |
| — | | |
| 4,621 | | |
| 4,621 | |
| Gross Profit | |
| — | | |
| 7,379 | | |
| 7,379 | |
| Operating Expenses: | |
| | | |
| | | |
| | |
| Depreciation Expense | |
| — | | |
| 6,712 | | |
| 6,712 | |
| General and Administrative | |
| 106,867 | | |
| (895 | ) | |
| 105,972 | |
| Professional Fees | |
| 11,461 | | |
| (10,251 | ) | |
| 1,210 | |
| Total Operating Expenses | |
| 118,328 | | |
| (4,434 | ) | |
| 113,894 | |
| Operating Loss | |
| (118,328 | ) | |
| 11,813 | | |
| (106,515 | ) |
| Other Income and Expenses: | |
| | | |
| | | |
| | |
| Lease Income | |
| 12,000 | | |
| (12,000 | ) | |
| — | |
| Depreciation | |
| (6,711 | ) | |
| 6,711 | | |
| — | |
| Interest Income | |
| 18 | | |
| 6 | | |
| 24 | |
| Interest Expense | |
| (16,416 | ) | |
| (807 | ) | |
| (17,223 | ) |
| Total Other Income and Expenses | |
| (11,109 | ) | |
| (6,090 | ) | |
| (17,199 | ) |
| Net Loss | |
$ | (129,437 | ) | |
$ | 5,723 | | |
$ | (123,714 | ) |
|