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Restatement of Financial Statements

9 Months Ended

Sep. 30, 2020

Restatement Of Financial Statements [Abstract]

Note 4. Restatement of Financial Statements

The Company restated its previously issued financial statements as of September 30, 2020 and the three and nine months ended September 30, 2020 to correct an accounting error related to the modification of restricted stock units which caused the Company’s stock -based compensation expense for the period to be overstated:

The Company determined that it had overstated share based compensation by $1,338,303 for the three and nine months ended September 30, 2020.

The following tables summarize the effect of the restatement on the specific items presented in our previously reported financial statements:

Balance Sheet

September 30, 2020

	September 30,						December 31,
	2020						2019
ASSETS	(As Filed)			Adjustments			(As Restated)

Total assets	$	10,474,016		$	-		$	10,474,016

LIABILITIES AND STOCKHOLDERS’ EQUITY

Total liabilities		5,564,034			-			5,564,034

Stockholders’ equity:
Series A Convertible Preferred stock, $0.001 par value; 900,000 shares authorized; 89,872 and 578,567 shares issued and outstanding, respectively		90			-			90
Common stock, $0.001 par value; 45,000,000 shares authorized; 9,845,600 and 7,390,261 shares issued and outstanding, respectively		9,846			-			9,846
Additional paid-in capital		26,667,488	(1)		(1,338,303	)		25,329,185
Accumulated deficit		(21,779,442	)(1)		1,338,303			(20,441,139	)
Total stockholders’ equity		4,897,982			-			4,897,982

Total liabilities and stockholders’ equity	$	10,462,016		$	-		$	10,462,016

Statement of Operations

Three Months Ended September 30, 2020

	Three months ended September 30, 2020						Three months ended September 30, 2020
	(As Filed)			Adjustments			(As Restated)


Revenue	$	1,171,399		$	-		$	1,171,399

Operating expenses:
Cost of revenues		956,203			-			956,203
General and administrative		3,573,946	(1)		(1,338,303	)		2,235,643
Total operating expenses		4,530,149			(1,338,303	)		3,191,846

Loss from operations		(3,358,750	)		1,338,303			(2,020,447	)

Other income (expenses):
Interest expense		-			-			-
Loss on settlemet of sccounts payable		(726,766	)		-			(726,766	)
Other income		-			-			-
Total other income (expense)		(726,766	)		-			(726,766	)

Net loss before income taxes		(4,085,516	)		1,338,303			(2,747,213	)

Provision for (benefit from) income taxes		-			-			-

Net loss	$	(4,085,516	)				$	(2,747,213	)

Net loss per share, basic and diluted	$	(0.42	)				$	(0.29	)

Weighted average common shares outstanding, basic and diluted		9,616,717						9,616,717

Statement of Operations

Nine Months Ended September 30, 2020

	Nine months ended September 30, 2020						Nine months ended September 30, 2020
	(As Filed)			Adjustments			(As Restated)


Revenue	$	3,739,798		$	-		$	3,739,798

Operating expenses:
Cost of revenues		2,739,737			-			2,739,737
General and administrative		8,372,491	(1)		(1,338,303	)		7,034,188
Total operating expenses		11,112,228			(1,338,303	)		9,773,925

Loss from operations		(7,372,430	)		1,338,303			(6,034,127	)

Other income (expenses):
Interest expense		-			-			-
Loss on settlemet of sccounts payable		(1,612,539	)		-			(1,612,539	)
Other income		-			-			-
Total other income (expense)		(1,612,539	)		-			(1,612,539	)

Net loss before income taxes		(8,984,969	)		1,338,303			(7,646,666	)

Provision for (benefit from) income taxes		-			-			-

Net loss	$	(8,984,969	)				$	(7,646,666	)

Net loss per share, basic and diluted	$	(1.03	)				$	(0.87	)

Weighted average common shares outstanding, basic and diluted		8,754,824						8,754,824

Statement of Stockholder’s Deficit

Three Months Ended September 30, 2020

	Preferred Stock						Common stock				Additional paid-in			Accumulated
As Filed	Shares			$			Shares		$		capital			deficit			Total

Balances, June 30, 2020		94,872		$	95			9,490,582	$	9,491	$	23,863,806		$	(17,693,926	)	$	6,179,466
																		-
Conversion of Series A Convertible Preferred Stock into common stock		(5,000	)		(5	)		13,158		13		(8	)		-			-
Settlement of Accounts Payable		-			-			157,000		157		847,043			-			847,200
Shares issued in cashless exercise of warrants		-			-			68,715		69		(69	)		-			-
Shares issued in cashless exercise of options		-			-			28,890		29		(29	)		-			-
Shares issued to current and former employees and directors		-			-			87,255		87		142,138			-			142,225
Stock based compensation		-			-			-		-		488,304			-			488,304
Net Loss		-			-			-		-		-			(4,085,516	)		(4,085,516	)

Ending balance, September, 2020		89,872		$	90			9,845,600	$	9,846	$	25,341,185		$	(21,779,442	)	$	3,571,679

	Preferred Stock						Common stock				Additional paid-in			Accumulated
As Restated	Shares			$			Shares		$		capital			deficit			Total

Balances, June 30, 2020		94,872		$	95			9,490,582	$	9,491	$	23,863,806		$	(17,693,926	)	$	6,179,466

Conversion of Series A Convertible Preferred Stock into common stock		(5,000	)		(5	)		13,158		13		(8	)		-			-
Settlement of Accounts Payable		-			-			157,000		157		847,043			-			847,200
Shares issued in cashless exercise of warrants		-			-			68,715		69		(69	)		-			-
Shares issued in cashless exercise of options		-			-			28,890		29		(29	)		-			-
Shares issued to current and former employees and directors		-			-			87,255		87		142,138			-			142,225
Stock based compensation		-			-			-		-		488,304			-			488,304
Net Loss		-			-			-		-		-			(2,747,213	)		(2,747,213	)

Ending balance, September, 2020		89,872		$	90			9,845,600	$	9,846	$	25,341,185		$	(20,441,139	)	$	4,909,982

Statement of Stockholder’s Deficit

Nine Months Ended September 30, 2020

	Preferred Stock						Common stock				Additional paid-in			Accumulated
As Filed	Shares			$			Shares		$		capital			deficit			Total

Balances,December 31, 2019		578,567		$	579			7,390,261	$	7,391	$	19,712,115		$	(12,794,473	)	$	6,925,612

Conversion of Series A Convertible Preferred Stock into common stock		(488,695	)		(489	)		1,286,042		1,286		(797	)		-			-
Settlement of Accounts Payable								441,567		442		2,604,948			-			2,605,390
Shares issued in cashless exercise of warrants		-			-			415,904		416		(416	)		-			-
Shares issued in cashless exercise of options		-			-			86,424		86		(86	)		-			-
Warrants exercised for cash		-			-			7,000		7		38,563			-			38,570
Shares issued to current and former employees and directors		-			-			218,402		218		142,007			-			142,225
Stock based compensation		-			-			-		-		2,844,851			-			2,844,851
Net Loss		-			-			-		-		-			(8,984,969	)		(8,984,969	)

Ending balance, September 30, 2020		89,872		$	90			9,845,600	$	9,846	$	25,341,185		$	(21,779,442	)	$	3,571,679

	Preferred Stock						Common stock				Additional paid-in			Accumulated
As Restated	Shares			$			Shares		$		capital			deficit			Total

Balances,December 31, 2019		578,567		$	579			7,390,261	$	7,391	$	19,712,115		$	(12,794,473	)	$	6,925,612

Conversion of Series A Convertible Preferred Stock into common stock		(488,695	)		(489	)		1,286,042		1,286		(797	)		-			-
Settlement of Accounts Payable								441,567		442		2,604,948			-			2,605,390
Shares issued in cashless exercise of warrants		-			-			415,904		416		(416	)		-			-
Shares issued in cashless exercise of options		-			-			86,424		86		(86	)		-			-
Warrants exercised for cash		-			-			7,000		7		38,563			-			38,570
Shares issued to current and former employees and directors		-			-			218,402		218		142,007			-			142,225
Stock based compensation		-			-			-		-		2,844,851			-			2,844,851
Net Loss		-			-			-		-		-			(7,646,666	)		(7,646,666	)

Ending balance, September 30, 2020		89,872		$	90			9,845,600	$	9,846	$	25,341,185		$	(20,441,139	)	$	4,909,982

Statement of Cash Flows

Nine Months Ended September 30, 2020

	Nine months ended September 30, 2020								Nine months ended September 30, 2020
	(As Filed)					Adjustments			(As Restated)

Cash flows from operating activities:
Net loss	$	(8,984,969	)	(1	)	$	1,338,303		$	(7,646,666	)

Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		29,275					-			29,275
Amortization of intangibles		28,457					-			28,457
Stock-based compensation		4,183,154		(1	)		(1,338,303	)		2,844,851
Loss on settlement of accounts payable		2,747,615					-			2,747,615
Bad debt expense		189,987					-			189,987
Changes in operating assets and liabilities		662,070					-			662,070
Net cash used in operating activities		(1,144,411	)				-			(1,144,411	)

Cash flows from investing activities:
Net cash provided by investing activities		(1,229	)				-			(1,229	)

Cash flows from financing activities:
Net cash provided by financing activities		847,542					-			847,542

Net (decrease) increase in cash		(298,098	)				-			(298,098	)

Cash, beginning of period		487,953					-			487,953

Cash, end of period	$	189,855				$	-		$	189,855