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Revision and Correction of an Immaterial Error in Previously Issued Financial Statements | 12 Months Ended
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Dec. 31, 2020
Revision and Correction of an Immaterial Error in Previously Issued Financial Statements |
Note 2. Revision and Correction of an Immaterial Error in Previously Issued Financial Statements | During the year ended December 31, 2020, we identified an error related to the amortization of our capitalized patent costs. In our prior financial statements through September 30, 2020, we did not record any amortization expense relating to our capitalized patent costs since we deemed them as not being placed in service. Subsequently, we concluded that the patents have provided us with an economic benefit (i.e. legal protection rights) and accordingly should have amortized our capitalized patents costs starting from the patents’ application dates, over a 20-year period, which is generally the legal life of each new patent filing. This revision in accounting policy results in an amortization of the capitalized patent costs, as shown below for the year ended December 31, 2019. In accordance with ASC 250, Accounting Changes and Error Corrections, we evaluated the materiality of the errors from quantitative and qualitative perspectives and concluded that this error was immaterial to the Company’s prior interim unaudited financial statements and annual audited financial statements. Since this error correction to record the amortization of patent costs was deemed immaterial, no amendments to previously filed interim periodic financial reports or annual financial reports are required. Consequently, the Company corrected this error by revising the December 31, 2019 consolidated financial statements included herein and shown below. This misstatement had no net impact on the Company’s consolidated statements of cash flows. The effect of this correction of this error on our previously filed audited consolidated financial statements prior to 2019 was to adjust the beginning accumulated deficit balance, as of January 1, 2019, by approximately $0.6 million and to adjust the annual audited financial statements as of and for the year ended December 31, 2019 is as follows:
|  | Year Ended December 31, 2019 |
|  | As Previously Reported |  |  | Adjustment |  |  | As Revised |
Consolidated Statement of Operations Data: |  |  |  |  |  |  |  |  |
General and Administrative – Patent Amortization |  | $ | 5,697,469 |  |  |  | 89,623 |  |  | $ | 5,787,092 |
Total Operating Expenses |  |  | 8,373,625 |  |  |  | 89,623 |  |  |  | 8,463,248 |
Loss from operations before income taxes |  |  | (10,587,124 | ) |  |  | (89,623 | ) |  |  | (10,676,747 | )
Net loss |  |  | (10,587,124 | ) |  |  | (89,623 | ) |  |  | (10,676,747 | )
Net loss attributable to common shareholders |  |  | (11,286,939 | ) |  |  | (89,623 | ) |  |  | (11,376,562 | )
Net loss per share, basic and diluted |  |  | (3.63 | ) |  |  | (0.03 | ) |  |  | (3.66 | )
Number of weighted shares |  |  | 3,107,580 |  |  |  | — |  |  |  | 3,107,580 |
|  | As of December 31, 2019 |
|  | As Previously Reported |  |  | Adjustment |  |  | As Revised |
Consolidated Balance Sheet Data: |  |  |  |  |  |  |  |  |
Patents and trademarks, net |  | $ | 1,798,484 |  |  |  | (653,596 | ) |  | $ | 1,144,888 |
Total Assets |  |  | 20,204,844 |  |  |  | (653,596 | ) |  |  | 19,551,248 |
Accumulated deficit |  |  | (114,084,746 | ) |  |  | (653,596 | ) |  |  | (114,738,342 | )
Total stockholders’ equity |  |  | 19,854,545 |  |  |  | (653,596 | ) |  |  | 19,200,949 |
|  | Year Ended December 31, 2019 |
|  | As Previously Reported |  |  | Adjustment |  |  | As Revised |
Consolidated Cash Flows Operating Activities Data: |  |  |  |  |  |  |  |  |
Net loss |  | $ | (10,587,124 | ) |  |  | (89,623 | ) |  | $ | (10,676,747 | )
Amortization of Patents |  |  | — |  |  |  | 89,623 |  |  |  | 89,623 |
The correction of these immaterial errors totaled approximately $61,000 and $90,000 for the nine months ended September 30, 2020 and for the year-ended December 31, 2019, respectively. The effect of this correction on the Company’s prior interim quarterly unaudited financial statements for 2020 and 2019 was immaterial.

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