| RESTATEMENT |
NOTE
12 – RESTATEMENT
Subsequent
to the Company’s filing of its Annual Report on Form 10-K for the year ended December 31, 2024, management determined that the
Company:
|
A) |
had insufficient authorized shares to fully settle its equity-linked financial instruments in shares primarily due to a convertible note
payable – related party plus accrued interest entered into with the Company’s previous CEO, Mr. James Owens, that may convert
at a rate of $0.01 per share for the Company’s common stock. As a result, in fiscal year 2024, the Company classified the equity-linked
financial instruments as derivative liabilities under ASC 815, Derivatives and Hedging, and recorded a derivative liability of
$18,676,168. The error had a significant effect on our previously issued consolidated financial statements for the year ended December
31, 2024. |
| |
|
|
|
B) |
had failed to properly classify liabilities settled with shares of common stock of $4,021,910 for the year ended December 31, 2024.
We previously classified the liabilities settled with shares of common stock as a component of other expense, a line item in the consolidated
statements of operations of our previously issued consolidated financial statements and reclassified the liabilities settled with shares
of common stock to additional paid in capital in the Consolidated Balance Sheet as of December 31, 2024. |
As
a result of the above, the Company is restating its previously issued consolidated financial statements for the year ended 2024 to correct
the errors noted above with the Securities and Exchange Commission within this Annual Report. Accordingly, the accompanying consolidated
balance sheet and statements of operations for the period described in the preceding sentence have been retroactively adjusted as summarized
below:
SCHEDULE OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS
| Effect
of correction of derivative liability and liabilities settled with shares of common stock | |
As
Previously
Reported | |
As
Restated | |
Retroactive
Adjustment |
| | |
| |
| |
|
| At December 31, 2024 | |
| | | |
| | | |
| | |
| | |
| | | |
| | | |
| | |
| LIABILITIES | |
| | | |
| | | |
| | |
| -Derivative
liability | |
$ | - | | |
$ | 18,676,168 | | |
$ | 18,676,168
| (1) |
| -Total
current liabilities | |
$ | 1,101,605 | | |
$ | 19,777,773 | | |
$ | 18,676,168 | |
| -Total
liabilities | |
$ | 1,101,605 | | |
$ | 19,777,773 | | |
$ | 18,676,168 | |
| | |
| | | |
| | | |
| | |
| RETAINED
EARNINGS/EQUITY | |
| | | |
| | | |
| | |
| -Additional
paid-in-capital | |
$ | 46,515,936 | | |
$ | 42,494,026 | | |
$ | (4,021,910)
| (2) |
| -Accumulated
deficit | |
$ | (47,637,384 | ) | |
$ | (62,291,642 | ) | |
$ | (14,654,258 | ) |
| -Total
stockholders’ deficit | |
$ | (1,081,236 | ) | |
$ | (19,757,404 | ) | |
$ | (18,676,168 | ) |
| | |
| | | |
| | | |
| | |
| STATEMENT OF INCOME | |
| | | |
| | | |
| | |
| Year Ended December 31, 2024 | |
| | | |
| | | |
| | |
| | |
| | | |
| | | |
| | |
| -Other
(income) expense: | |
| | | |
| | | |
| | |
| -Loss on
extinguishment of debt with a related party | |
$ | (4,021,910 | ) | |
$ | - | | |
$ | (4,021,910)
| (2) |
| -Change
in derivative liability | |
$ | - | | |
$ | 18,676,168 | | |
$ |
18,676,168 | (1) |
| -Total
other (income) expense | |
$ | (4,101,910 | ) | |
$ | 18,756,168 | | |
$ | (14,654,258 | ) |
| | |
| | | |
| | | |
| | |
| -Net loss | |
$ | (4,499,968 | ) | |
$ | (19,154,226 | ) | |
$ | (14,654,258 | ) |
| | |
| | | |
| | | |
| | |
| STATEMENT
OF STOCKHOLDERS’ EQUITY | |
| | | |
| | | |
| | |
| At December 31, 2024 | |
| | | |
| | | |
| | |
| -Loss on
extinguishment of debt with a related party | |
$ | - | | |
$ | (4,021,910 | ) | |
$ | (4,021,910)
| (2) |
| -Net income | |
$ | (4,499,968 | ) | |
$ | (19,154,226 | ) | |
$ |
(14,654,258) | (1),
(2) |
| -Balance, December 31, 2024 | |
$ | (1,081,236 | ) | |
$ | (19,757,404 | ) | |
$ | (18,676,168 | ) |
| | |
| | | |
| | | |
| | |
| STATEMENT
OF CASH FLOWS | |
| | | |
| | | |
| | |
| Year Ended December 31, 2024 | |
| | | |
| | | |
| | |
| Cash Flows
from Operating Activities | |
| | | |
| | | |
| | |
| -Net loss | |
$ | (4,499,968 | ) | |
$ | (19,154,226 | ) | |
$ |
(14,654,258) | (1),
(2) |
| -Change
in derivative liability | |
$ | - | | |
$ | 18,676,168 | | |
$ | (18,676,168) | (1) |
| -Loss on
extinguishment of debt with a related party | |
$ | (4,021,910 | ) | |
$ | - | | |
$ | 4,021,910
| (2) |
| (1) |
Period effect on results of operations for insufficient authorized shares to fully settle its equity-linked
financial instruments |
| (2) |
Period effect on results of operations for failed to properly classify liabilities
settled with shares of common stock |
|