v3.26.1
Restatements and Revisions
 12 Months Ended
Dec. 31, 2025
Accounting Changes and Error Corrections [Abstract]  
Restatements and Revisions

Note 2 – Restatements and Revisions

 

Restatement of Previously Issued Unaudited Interim Consolidated Financial Statements

 

As a result of an internal review, the Company identified errors related classification of preferred stock and warrants, derivative liabilities, calculation of gain on settlement, and debt extinguishment accounting in its previously issued unaudited consolidated financial statements for the period ended March 31, 2025, included in its Quarterly Report on Form 10-Q filed with the SEC on May 20, 2025; the period ended June 30, 2025, included in its Quarterly Report on Form 10-Q filed with the SEC on August 14, 2025; and the period ended September 30, 2025, included in its Quarterly Report on Form 10-Q filed with the SEC on November 17, 2025 (the “Affected Periods”).

 

The Company has identified the following errors in the Affected Periods: (i) incorrect classification of Series C-1 Preferred Stock, which should have been classified as mezzanine equity is the first quarter of 2025; (ii) incorrect classification of Series C-2 Preferred Stock, which should have been classified as mezzanine equity is the second quarter of 2025; (iii) incorrect treatment of a convertible debenture containing an embedded derivative which should have been bifurcated; (iv) the incorrect recognition of a gain on settlement and corresponding reduction to liabilities in connection with a binding term sheet entered into during the second quarter of 2025; (v) the incorrect equity classification of common stock purchase warrants issued pursuant to a warrant inducement transaction during the second quarter of 2025, which should have been liability classified; and (vi) the incorrect accounting treatment of an amendment to a promissory note entered into during the third quarter of 2025, which should have been accounted for as a debt extinguishment under ASC 470-50 (collectively, the “2025 Financial Statement Errors”).

 

The Company evaluated the materiality of the 2025 Financial Statement Errors both qualitatively and quantitatively in accordance with Staff Accounting Bulletin No. 99, Materiality, and determined the effect of correcting these misstatements was material to the Affected Periods. As a result the Company is restating its unaudited consolidated financial statements (the “Restated Consolidated Financial Statements”) for the Affected Periods in accordance with ASC 250, Accounting Changes and Error Corrections. The Company is to presenting the restatement of the affected line items of the unaudited consolidated financial statements for the Affected Periods within this Annual Report on Form 10-K for the year ended December 31, 2025. Under this approach, the previously issued Quarterly Reports on Form 10-Q for the Affected Periods will not be amended, however, historical amounts presented in future Form 10-Q filings will be recast to be consistent.

 

A reconciliation from the amounts previously reported for the Affected Periods to the restated amounts is provided for the impacted financial statement line items below for: (i) the consolidated balance sheets as of March 31, 2025, June 30, 2025, and September 30, 2025; (ii) the consolidated income statement for the periods ended March 31, 2025, June 30, 2025, and September 30, 2025, (iii) the consolidated statement of stockholders equity for periods ended March 31, 2025, June 30, 2025, and September 30, 2025, and (iv) the consolidated statement of cash flows for the periods ended March31, 2025, June 30, 2025 and September 30, 2025.

 

Schedule of Effects of Restatement Adjustments  

The following table presents the effects of the restatement adjustments for the 2025 Financial Statement Errors on the Company’s unaudited interim consolidated balance sheets as March 31, 2025:

 

   Stated   Adjustment   Restated 
   March 31, 2025 
   As Previously   Restatement   As 
   Stated   Adjustment   Restated 
LIABILITIES, MEZZANINE EQUITY, AND STOCKHOLDERS’ EQUITY (DEFICIT)               
Mezzanine equity               
Series C-1 Preferred Stock, $1,000.00 par value; 30,375 shares authorized; 30,375 and 30,375 issued and outstanding as of March 31, 2025 and December 31, 2024, respectively  $-   $30,375,000   $30,375,000 
Total mezzanine equity   12,983,476    30,375,000    34,353,922 
                
Stockholders’ equity (deficit)               
Series C-1 Preferred Stock, $1,000.00 par value; 30,375 shares authorized; 30,375 and 30,375 issued and outstanding as of March 31, 2025 and December 31, 2024, respectively   30,375,000    (30,375,000)   - 
Total stockholders’ equity (deficit)  $5,848,722   $(30,375,000)  $(27,039,635)

 

The following table presents the effects of the restatement adjustments for the 2025 Financial Statement on the Company’s unaudited interim consolidated statement of stockholders’ equity (deficit) as March 31, 2025:

 

   As Previously Stated 
   Stockholders’ Equity (Deficit)   Mezzanine Equity 
   Series C-1
Preferred Stock		       Series C-1
Preferred Stock		     
   Shares   Amount   Total   Shares   Amount   Total 
Balances, December 31, 2024   30,375   $30,375,000   $12,747,473        -   $     -   $7,457,000 
Reclassification of C-1 Preferred Stock   -    -    -    --    --    -- 
Balances, March 31, 2025   30,375   $30,375,000   $3,335,365    -   $-   $ 3,978,922 

 

   Restatement Adjustment 
   Stockholders’ Equity (Deficit)   Mezzanine Equity 
   Series C-1
Preferred Stock		       Series C-1
Preferred Stock		     
   Shares   Amount   Total   Shares   Amount   Total 
Balances, December 31, 2024   -   $-   $-    -   $-   $- 
Reclassification of C-1 Preferred Stock   (30,375)   (30,375,000)   (30,375,000)   30,375    30,375,000    30,375,000 
Balances, March 31, 2025   (30,375)  $(30,375,000)  $(30,375,000)   30,375   $30,375,000   $30,375,000 

 

   As Restated 
   Stockholders’ Equity (Deficit)   Mezzanine Equity 
   Series C-1
Preferred Stock		       Series C-1
Preferred Stock		     
   Shares   Amount   Total   Shares   Amount   Total 
                         
Balances, December 31, 2024   30,375   $ 30,375,000   $12,747,473    -   $-   $7,457,000 
Reclassification of C-1 Preferred Stock   (30,375)   (30,375,000)   (30,375,000)   30,375    30,375,000    30,375,000 
Balances, March 31, 2025   -   $-   $(27,039,635)   30,375   $30,375,000   $34,353,922 

 

There was no impact on the Company’s unaudited interim consolidated income statement consolidated or cash flow statement for the three ending March 31, 2025.

 

 

The following table presents the effects of the restatement adjustments for the 2025 Financial Statement Errors on the Company’s unaudited interim consolidated balance sheets as June 30, 2025:

 

                
   As Previously   Restatement   As 
   Stated   Adjustment   Restated 
LIABILITIES, MEZZANINE EQUITY, AND STOCKHOLDERS’ EQUITY (DEFICIT)               
Derivative liability  $-   $815,897   $815,897 
Convertible notes payable – current portion, net   2,888,947    (1,091,224)   1,797,723 
Additional payments for acquisition, current portion   5,000,000    (50,000)   4,950,000 
Total current liabilities   12,463,211    (325,327)   12,137,884 
Additional payments for acquisition, net of current portion   1,125,000    (175,000)   950,000 
Total liabilities   16,687,766    (500,327)   16,187,439 
                
Mezzanine equity               
Series C-2 Preferred Stock $1,000.00 par value; 20,000 shares authorized; 10,719 and 8,576 issued and outstanding as of June 30, 2025 and December 31, 2024, respectively   -    10,121,922    10,121,922 
                
Stockholders’ equity (deficit)               
Series C-2 Preferred Stock $1,000.00 par value; 20,000 shares authorized; 10,719 and 8,576 issued and outstanding as of June 30, 2025 and December 31, 2024, respectively   10,121,922    (10,121,922)   - 
Additional paid-in capital   82,712,709    (1,165,562)   81,547,147 
Accumulated deficit   (90,203,241)   1,665,889    (88,537,352)
Total stockholders’ equity (deficit)  $2,631,473   $(9,621,595)  $(6,990,122)

 

The following tables present the effects of the restatement adjustments for the 2025 Financial Statement Errors on the Company’s unaudited interim consolidated income statements for the three and six months ending June 30, 2025:

 

                
   For the Three Months Ended June 30, 2025 
   As Previously   Restatement   As 
   Stated   Adjustment   Restated 
Gain on changes in fair value  $-   $1,660,160   $1,660,160 
Interest expense   (221,325)   (219,271)   (440,596)
Gain on settlement liability   714,500    225,000    939,500 
Total other income (expense)   (219,006)   1,665,889    1,446,883 
Net loss from continuing operations   (3,209,094)   1,665,889    (1,543,205)
Net loss  $(5,284,858)  $1,665,889   $(3,618,969)
                
Net loss from continuing operations per common share:               
Basic  $(318.00)  $167.66   $(155.31)
Diluted  $(318.00)  $167.66   $(155.31)
                
Net loss per common share:               
Basic  $(532.00)  $167.66   $(364.23)
Diluted  $(532.00)  $167.66   $(364.23)

 

                
   For the Six Months Ended June 30, 2025 
   As Previously   Restatement   As 
   Stated   Adjustment   Restated 
Gain on changes in fair value  $-   $1,660,160   $1,660,160 
Interest expense   (221,325)   (219,271)   (440,596)
Gain on settlement liability   714,500    225,000    939,500 
Total other income (expense)   (511,749)   1,665,889    1,154,140 
Net loss from continuing operations   (4,701,365)   1,665,889    

(3,035,476

)
Net Loss  $(22,688,444)  $1,665,889   $

(21,022,555

)
                
Net loss from continuing operations per common share:               
Basic  $(628.80)  $222.78   $

(405.93

)
Diluted  $(628.80)  $222.78   $

(405.93

)
                
Net loss per common share:               
Basic  $(3,034.00)  $222.78   $

(2,811.31

)
Diluted  $(3,034.00)  $222.78   $

(2,811.31

)

 

 

The following table presents the effects of the restatement adjustments for the 2025 Financial Statement Errors on the Company’s unaudited interim consolidated statement of stockholders’ equity (deficit) as June 30, 2025:

 

   Shares   Amount   Shares   Amount   Capital   Deficit   Total   Shares   Amount   Shares   Amount   Total 
As Previously Stated 
   Stockholders’ Equity (Deficit)   Mezzanine Equity 
   Series C-1   Series C-2   Additional           Series C-1   Series C-2     
   Preferred Stock   Preferred Stock   Paid-In   Accumulated       Preferred Stock   Preferred Stock     
   Shares   Amount   Shares   Amount   Capital   Deficit   Total   Shares   Amount   Shares   Amount   Total 
Balances, December 31, 2024   30,375   $30,375,000    -   $-   $49,537,134   $(67,327,733)  $12,747,473    -   $-    -   $-   $7,457,000 
Reclassification of C-1 Preferred Stock   -    -    -    -    -    -    -              -    -    - 
Balances, March 31, 2025   30,375   $30,375,000    -   $-   $57,833,740   $(84,873,449)  $3,335,365    -   $-    -   $-    3,978,922 
Reclassification of Series C-2 Preferred stock   -    -    4,576    3,978,922    -    -    3,978,922    -    -    -    -    - 
Debt conversion   -    -    2,430    2,430,000    249,991         2,680,000                          
C-1 to C-2 exchange   (2,025)   (2,025,000)   3,213    3,213,000    (837,821)   -    350,179    -    -    -    -    - 
Divesture of NAYA   (28,350)   (28,350,000)   -    -    24,368,110    -    (3,981,890)   -    -    -    -    - 
Preferred stock issued   -    -    500    500,000    -    -    500,000    -    -    -    -    - 
Warrant exercise   -    -    -    -    -    -    -    -    -    -    -    - 
Net loss   -    -    -    -    -    (5,284,858)   (5,284,858)   -    -    -    -    - 
Balances, June 30, 2025   -   $-    10,719   $10,121,922   $82,712,709   $(90,203,241)  $2,631,473    -   $-    -   $-   $- 

 

   Shares   Amount   Shares   Amount   Capital   Deficit   Total   Shares   Amount   Shares   Amount   Total 
Restatement Adjustment 
   Stockholders’ Equity (Deficit)   Mezzanine Equity 
   Series C-1   Series C-2   Additional           Series C-1   Series C-2     
   Preferred Stock   Preferred Stock   Paid-In   Accumulated       Preferred Stock   Preferred Stock     
   Shares   Amount   Shares   Amount   Capital   Deficit   Total   Shares   Amount   Shares   Amount   Total 
Balances, December 31, 2024   -   $-    -   $-   $-   $-   $-    -   $-    -   $-   $- 
Reclassification of C-1 Preferred Stock   (30,375)   (30,375,000)   -    -    -    -    (30,375,000)   30,375    30,375,000    -    -    30,375,000 
Balances, March 31, 2025   (30,375)  $(30,375,000)   -   $-   $-   $-   $(30,375,000)   30,375   $30,375,000    -   $-   $30,375,000 
Reclassification of Series C-2 Preferred stock   -    -    (4,576)   (3,978,922)   -    -    (3,978,922)   -    -    4,576    3,978,922    3,978,922 
Debt conversion   -    -    (2,430)   (2,430,000)   (428,666)   -    (2,858,666)   -    -    2,430    2,430,000    2,430,000 
C-1 to C-2 exchange   2,025    2,025,000    (3,213)   (3,213,000)   -    -    (1,188,000)   (2,025)   (2,025,000)   3,213    3,213,000    1,188,000 
Divesture of NAYA   28,350    28,350,000    -    -    -    -    28,350,000    (28,350)   (28,350,000)   -    -    (28,350,000)
Preferred stock issued   -    -    (500)   (500,000)   -    -    (500,000)   -    -    500    500,000    500,000 
Warrant exercise   -    -    -    -    (736,896)   -    (736,896)   -    -    -    -    - 
Net loss   -    -    -    -    -    1,665,889    1,665,889    -    -    -    -    - 
Balances, June 30, 2025   -   $-    (10,719)  $(10,121,922)  $(1,165,562)  $1,665,889   $(9,621,595)   -   $-    10,719   $10,121,922   $10,121,922 

 

   Shares   Amount   Shares   Amount   Capital   Deficit   Total   Shares   Amount   Shares   Amount   Total 
As Restated 
   Stockholders’ Equity (Deficit)   Mezzanine Equity 
   Series C-1   Series C-2   Additional           Series C-1   Series C-2     
   Preferred Stock   Preferred Stock   Paid-In   Accumulated       Preferred Stock   Preferred Stock     
   Shares   Amount   Shares   Amount   Capital   Deficit   Total   Shares   Amount   Shares   Amount   Total 
Balances, December 31, 2024   30,375   $30,375,000    -   $-   $49,537,134   $(67,327,733)  $12,747,473    -   $-    -   $-   $7,457,000 
Reclassification of C-1 Preferred Stock   (30,375)   (30,375,000)   -    -    -    -    (30,375,000)   30,375    30,375,000    -    -    30,375,000 
Balances, March 31, 2025   -   $-    -   $-   $57,833,740   $(84,873,449)  $(27,039,635)   30,375    30,375,000    -   $-    34,353,922 
Reclassification of Series C-2 Preferred stock   -    -    -    -    -    -    -    -    -    4,576    3,978,922    3,978,922 
Debt conversion   -    -    -    -    (178,675)   -    (178,666)   -    -    2,430    2,430,000    2,430,000 
C-1 to C-2 exchange   -    -    -    -    (837,821)   -    (837,821)   (2,025)   (2,025,000)   3,213    3,213,000    1,188,000 
Divesture of NAYA   -    -    -    -    24,368,110    -    24,368,110    (28,350)   (28,350,000)   -    -    (28,350,000)
Preferred stock issued   -    -    -    -    -    -    -    -    -    500    500,000    500,000 
Warrant exercise   -    -    -    -    (736,896)   -    (736,896)   -    -    -    -    - 
Net loss   -    -    -    -    -    (3,618,969)   (3,618,969)   -    -    -    -    - 
Balances, June 30, 2025   -   $-    -   $-   $81,547,147   $(88,537,352)  $(6,990,122)   -    -    10,719   $10,121,922    10,121,922 

 

 

The following table presents the effects of the restatement adjustments for the 2025 Financial Statement Errors on the Company’s unaudited interim consolidated cash flow statements for the six months ending June 30, 2025:

 

                
   For the Six Months Ended June 30, 2025 
   As Previously   Restatement   As 
   Stated   Adjustment   Restated 
Cash flows from operating activities:               
Net loss  $(22,688,444)  $1,665,889   $

(21,022,555

)
Adjustments to reconcile net loss to net cash used in operating activities:               
Amortization of discount on notes payable   130,908    219,271    350,179 
Gain on settlement   (774,500)   (225,000)   (999,500)
Gain on changes in FV  $-   $(1,660,160)  $

(1,660,160

)

 

 

The following table presents the effects of the restatement adjustments for the 2025 Financial Statement Errors on the Company’s unaudited interim consolidated balance sheets as September 30, 2025:

 

                
   September 30, 2025 
   As Previously   Restatement   As 
   Stated   Adjustment   Restated 
LIABILITIES AND STOCKHOLDERS’ EQUITY               
Warrant liability  $-   $256,034   $256,034 
Additional payments for acquisition, current portion   4,484,500    (375,000)   4,109,500 
Total current liabilities   9,244,687    (118,966)   9,125,721 
Additional payments for acquisition, net of current portion   800,000    150,000    950,000 
Total liabilities   12,983,476    31,034    13,014,510 
                
Stockholders’ equity               
Additional paid-in capital   90,063,124    (945,950)   89,117,174 
Accumulated deficit   (93,092,303)   914,916    (92,177,387)
Total stockholders’ equity  $5,848,722   $(31,034)  $5,817,688 

  

The following tables present the effects of the restatement adjustments for the 2025 Financial Statement Errors on the Company’s unaudited interim consolidated income statements for the three and nine months ending September 30, 2025:

 

                
   For the Three Months Ended September 30, 2025 
   As Previously   Restatement   As 
   Stated   Adjustment   Restated 
Gain on changes in fair value  $-   $(33,566)  $(33,566)
Interest Expense   (145,803)   (176,962)   (322,765)
Loss on debt extinguishment   (876,165)   (540,445)   (1,416,610)
Total other income (expense)   (1,009,141)   (750,973)   (1,760,114)
Net loss from continuing operations   (2,644,625)   (750,973)   (3,395,598)
Net Loss  $(2,644,625)  $(750,973)  $(3,395,598)
                
Net loss from continuing operations per common share:               
Basic  $(30.80)  $(8.71)  $(39.40)
Diluted  $(30.80)  $(8.71)  $(39.40)
                
Net loss per common share:               
Basic  $(30.80)  $(8.71)  $(39.40)
Diluted  $(30.80)  $(8.71)  $(39.40)

 

                
   For the Nine Months Ended September 30, 2025 
   As Previously   Restatement   As 
   Stated   Adjustment   Restated 
Gain on changes in fair value  $-   $1,626,594   $1,626,594 
Interest Expense   (273,629)   (396,233)   (669,862)
Loss on debt extinguishment   (1,568,435)   (540,445)   (2,108,880)
Gain on settlement liability   714,500    225,000    939,500 
Total other income (expense)   (1,520,890)   914,916    (605,974)
Net loss from continuing operations   (7,345,990)   914,916    (6,431,074)
Net Loss  $(25,333,069)  $914,916   $(24,418,153)
                
Net loss from continuing operations per common share:               
Basic  $(206.80)  $25.76   $(181.05)
Diluted  $(206.80)  $25.76   $(181.05)
                
Net loss per common share:               
Basic  $(713.20)  $25.76   $(687.42)
Diluted  $(713.20)  $25.76   $(687.42)

 

 

The following table presents the effects of the restatement adjustments for the 2025 Financial Statement Errors on the Company’s unaudited interim consolidated statement of stockholders’ equity as September 30, 2025:

 

   Shares   Amount   Shares   Amount   Capital   Deficit   Total   Shares   Amount   Shares   Amount   Total 
As Previously Stated 
   Stockholders’ Equity   Mezzanine Equity 
   Series C-1   Series C-2   Additional           Series C-1   Series C-2     
   Preferred Stock   Preferred Stock   Paid-In   Accumulated       Preferred Stock   Preferred Stock     
   Shares   Amount   Shares   Amount   Capital   Deficit   Total   Shares   Amount   Shares   Amount   Total 
Balances, December 31, 2024   30,375   $30,375,000    -   $-   $49,537,134   $(67,327,733)  $12,747,473    -   $-    -   $-   $7,457,000 
Reclassification of C-1 Preferred Stock   -    -    -    -    -    -    -              -    -    - 
Balances, March 31, 2025   30,375   $30,375,000    -   $-   $57,833,740   $(84,873,449)  $3,335,365    -   $-    -   $-    3,978,922 
Reclassification of Series C-2 Preferred stock   -    -    4,576    3,978,922    -    -    3,978,922    -    -    -    -    - 
Debt conversion   -    -    2,430    2,430,000    249,991         2,680,000                          
C-1 to C-2 exchange   (2,025)   (2,025,000)   3,213    3,213,000    (837,821)   -    350,179    -    -    -    -    - 
Divesture of NAYA   (28,350)   (28,350,000)   -    -    24,368,110    -    (3,981,890)   -    -    -    -    - 
Preferred stock issued   -    -    500    500,000    -    -    500,000    -    -    -    -    - 
Warrant exercise   -    -    -    -    -    -    -    -    -    -    -    - 
Net loss   -    -    -    -    -    (5,284,858)   (5,284,858)   -    -    -    -    - 
Balances, June 30, 2025   -   $-    10,719   $10,121,922   $82,712,709   $(90,203,241)  $2,631,473    -   $-    -   $-   $- 
Reclassification of Series C-2 Preferred stock   -   $-    -   $-   $-   $-    -    -   $-    -   $-   $- 
Debt conversion   -    -    2,959    2,959,000    739,892    -    3,698,960    -    -    -    -    - 
Fair value of warrants issued with notes   -    -    -    -    -    -    -    -    -    -    -    - 
Net loss   -    -    -    -    -    (2,644,625)   (2,644,625)   -    -    -    -    - 
Balances, September 30, 2025   -   $-    9,475   $8,877,359   $90,063,124   $(93,092,303)  $5,848,722    -   $-    -   $-   $- 

 

   Shares   Amount   Shares   Amount   Capital   Deficit   Total   Shares   Amount   Shares   Amount   Total 
Restatement Adjustment 
   Stockholders’ Equity   Mezzanine Equity 
   Series C-1   Series C-2   Additional           Series C-1   Series C-2     
   Preferred Stock   Preferred Stock   Paid-In   Accumulated       Preferred Stock   Preferred Stock     
   Shares   Amount   Shares   Amount   Capital   Deficit   Total   Shares   Amount   Shares   Amount   Total 
Balances, December 31, 2024   -   $-    -   $-   $-   $-   $-    -   $-    -   $-   $- 
Reclassification of C-1 Preferred Stock   (30,375)   (30,375,000)   -    -    -    -    (30,375,000)   30,375    30,375,000    -    -    30,375,000 
Balances, March 31, 2025   (30,375)  $(30,375,000)   -   $-   $-   $-   $(30,375,000)   30,375   $30,375,000    -   $-   $30,375,000 
Reclassification of Series C-2 Preferred stock   -  

$

-    (4,576) 

$

(3,978,922) 

$

-  

$

-  

$

(3,978,922)   -  

$

-    4,576  

$

3,978,922  

$

3,978,922 
Debt conversion   -    -    (2,430)   (2,430,000)   (428,666)   -    (2,858,666)   -    -    2,430    2,430,000    2,430,000 
C-1 to C-2 exchange   2,025    2,025,000    (3,213)   (3,213,000)   -    -    (1,188,000)   (2,025)   (2,025,000)   3,213    3,213,000    1,188,000 
Divesture of NAYA   28,350    28,350,000    -    -    -    -    28,350,000    (28,350)   (28,350,000)   -    -    (28,350,000)
Preferred stock issued   -    -    (500)   (500,000)   -    -    (500,000)   -    -    500    500,000    500,000 
Warrant exercise   -    -    -    -    (736,896)   -    (736,896)   -    -    -    -    - 
Net loss   -    -    -    -    -    1,665,889    1,665,889    -    -    -    -    - 
Balances, June 30, 2025   -   $-    (10,719)  $(10,121,922)  $(1,165,562)  $1,665,889   $(9,621,595)   -   $-    10,719   $10,121,922   $10,121,922 
Reclassification of Series C-2 Preferred stock   -   $-    10,719   $10,121,922   $-   $-  

$

10,121,922    -   $-    (10,719)  $(10,121,922)  $(10,121,922)
Debt conversion   -    -    -    -    51,749    -    51,749    -    -    -    -    - 
Fair value of warrants issued with notes   -    -    -    -    167,863    -    167,863                          
Net loss                            (750,973)   (750,973)   -    -    -    -    - 
Balances, September 30, 2025   -   $-    -   $-   $(945,950)  $914,916   $(31,034)   -   $-    -   $-   $- 

 

   Shares   Amount   Shares   Amount   Capital   Deficit   Total   Shares   Amount   Shares   Amount   Total 
As Restated 
   Stockholders’ Equity   Mezzanine Equity 
   Series C-1   Series C-2   Additional           Series C-1   Series C-2     
   Preferred Stock   Preferred Stock   Paid-In   Accumulated       Preferred Stock   Preferred Stock     
   Shares   Amount   Shares   Amount   Capital   Deficit   Total   Shares   Amount   Shares   Amount   Total 
Balances, December 31, 2024   30,375   $30,375,000    -   $-   $49,537,134   $(67,327,733)  $12,747,473    -   $-    -   $-   $7,457,000 
Reclassification of C-1 Preferred Stock   (30,375)   (30,375,000)   -    -    -    -    (30,375,000)   30,375    30,375,000    -    -    30,375,000 
Balances, March 31, 2025   -   $-    -   $-   $57,833,740   $(84,873,449)  $

(27,039,635

)   30,375  

$

30,375,000    -   $-  

$

34,353,922 
Reclassification of Series C-2 Preferred stock   -  

$

-    -  

$

-  

$

-  

$

-  

$

-    -  

$

-    4,576  

$

3,978,922  

$

3,978,922 
Debt conversion   -    -    -    -    (178,675)   -    (178,666)   -    -    2,430    2,430,000    2,430,000 
C-1 to C-2 exchange   -    -    -    -    (837,821)   -    (837,821)   (2,025)   (2,025,000)   3,213    3,213,000    1,188,000 
Divesture of NAYA   -    -    -    -    24,368,110    -    24,368,110    (28,350)   (28,350,000)   -    -    (28,350,000)
Preferred stock issued   -    -    -    -    -    -    -    -    -    500    500,000    500,000 
Warrant exercise   -    -    -    -    (736,896)   -    (736,896)   -    -    -    -    - 
Net loss   -    -    -    -    -    (3,618,969)   (3,618,969)   -    -    -    -    - 
Balances, June 30, 2025   -   $-    -   $-   $81,547,147   $(88,537,352)  $(6,990,122)   -  

$

-    10,719   $10,121,922  

$

10,121,922 
Reclassification of Series C-2 Preferred stock   -   $-    10,719   $10,121,922   $-   $-  

$

10,121,922    -  

$

-    (10,719)  $(10,121,922) 

$

(10,121,922)
Debt conversion   -    -    2,959    2,959,000    791,641    -    3,750,709    -    -    -    -    - 
Fair value of warrants issued with notes   -    -    -    -    167,863    -    167,863    -    -    -    -    - 
Net loss   -    -    -    -    -    (3,395,598)   (3,395,598)   -    -    -    -    - 
Balances, September 30, 2025   -   $-    9,475   $8,877,359   $89,117,174   $(92,177,387) 

$

5,817,688    -   $-    -   $-   $- 

 

 

The following table presents the effects of the restatement adjustments for the 2025 Financial Statement Errors on the Company’s unaudited interim consolidated cash flow statements for the nine months ending September 30, 2025:

 

                
   For the Nine Months Ended September 30, 2025 
   As Previously   Restatement   As 
   Stated   Adjustment   Restated 
Cash flows from operating activities:               
Net loss  $(25,333,069)  $914,916   $(24,418,153)
Adjustments to reconcile net loss to net cash used in operating activities:               
Amortization of discount on notes payable   132,644    396,233    528,877 
Loss from debt extinguishment   1,568,435    540,445    2,108,880 
Gain on changes in FV   -    (1,626,594)   (1,626,594)
Gain on settlement  $(1,615,000)  $(225,000)  $(1,840,000)

 

Revision of Previously Issued Consolidated Financial Statements

 

The Company revised its consolidated financial statements and related notes included herein for the year ending December 31, 2024 to correct the following errors:

 

  ● the previously reported deferred tax liability and associated tax provision expense did not correctly account for the acquisition of NTI. The correction increased the tax provision expense and increased the deferred tax liability by $163,115 as of December 31, 2024. Note 17 has been updated to reflect the revision;
  ● the Company originally did not recognize an allowance for its accounts receivable, this has now been corrected to include an allowance of $61,773;
  ● the Company incorrectly recognized an ROU Asset of $740,759 and corresponding current lease liability of $57,993 and long term lease liability of $793,943 for the related to the Alabama JV; and
  ● the $1,220,528 note receivable associated with the Alabama JV was reclassified from equity investments to note receivable from HRCFG on the Company’s consolidated balance sheet.

 

The following table presents the effects of the revision on the Company’s consolidated balance sheet as of December 31, 2024:

 

   As Previously   Revision   As 
   December 31, 2024 
   As Previously   Revision   As 
   Stated   Adjustment   Revised 
ASSETS            
Accounts receivable, net of allowances of $61,773  $174,881   $(61,773)  $113,108 
Total current assets   1,318,331    (61,773)   1,256,558 
Lease right of use   2,283,784    (790,164)   1,493,620 
Equity investments   740,759    (740,759)   - 
Note receivable from HRCFG   -    1,220,528    1,220,528 
Total assets  $46,449,182   $(372,168)  $46,077,014 
                
LIABILITIES AND STOCKHOLDERS’ EQUITY               
Lease liability, current portion  $239,125   $(57,993)  $181,132 
Total current liabilities   17,926,441    (57,993)   17,868,448 
Lease liability, net of current portion   2,189,555    (793,943)   1,395,612 
Liability for excess losses of equity method investee   -    479,768    479,768 
Deferred tax liability   -    163,115    163,115 
Total liabilities   26,244,709    (209,053)   26,035,656 
                
Stockholders’ equity               
Accumulated deficit   (67,164,618)   (163,115)   (67,327,733)
Total stockholders’ equity   12,747,473    (163,115)   12,584,358 
Total liabilities and stockholders’ equity  $46,449,182   $(372,168)  $46,077,014 

 

The following table presents the effects of the revision on the Company’s consolidated income statement as of December 31, 2024:

 

                
   For the Year Ended December 31, 2024 
   As Previously   Revision   As 
   Stated   Adjustment   Revised 
Provision for income taxes  $(22,913)  $163,115   $140,202 
Net loss from continuing operations   (7,576,838)   (163,115)   (7,739,953)
Net Loss   (9,095,838)   (163,115)   (9,258,953)
Net loss attributable to common shareholders  $(9,346,473)  $(163,115)  $(9,509,588)
                
Net loss from continuing operations per common share:               
Basic  $(3,013.82)  $(64.88)  $(3,078.74)
Diluted  $(3,013.82)  $(64.88)  $(3,078.74)
                
Net loss per common share:               
Basic  $(3,717.73)  $(64.88)  $(3,782.65)
Diluted  $(3,717.73)  $(64.88)  $(3,782.65)

 

The following table presents the effects of the revision on the Company’s consolidated statement of stockholders’ equity as of December 31, 2024:

 

   Deficit   Total   Deficit   Total   Deficit   Total 
   Stockholders’ Equity 
   As Previously Stated   Restatement Adjustment   As Restated 
   Accumulated       Accumulated       Accumulated     
   Deficit   Total   Deficit   Total   Deficit   Total 
Balances, December 31, 2023  $(57,818,145)  $892,825   $-   $-   $(57,818,145)  $892,825 
Net loss   (9,095,838)   (9,095,838)   (163,115)   (163,115)   (9,258,953)   (9,258,953)
Balances, December 31, 2024 

$

(67,164,618) 

$

12,747,473  

$

(163,115) 

$

(163,115) 

$

(67,327,733) 

$

12,584,358 

 

The following table presents the effects of the revision on the Company’s consolidated statement of cash flows for the year ended December 31, 2024:

 

   As Previously   Revision   As 
   For the Year Ended December 31, 2024 
   As Previously   Revision   As 
   Stated   Adjustment   Revised 
Cash flows from operating activities:               
Net loss  $(9,095,838)  $(163,115)  $(9,258,953)
Changes in assets and liabilities:               
Accounts receivable   (34,331)   61,773    27,442 
Leasehold liability   25,869    (61,773)   (35,904)
Deferred tax liability   -    163,115    163,115 
Net cash (used in) provided by operating activities  $(2,974,400)  $-   $(2,974,400)