| RESTATEMENTS |
The Company’s
consolidated financial statements have been restated for the three and nine months ended September 30, 2014:
a) to revise
the Company’s accounting treatment related to $178,345 liabilities owed to various vendors which we had previously recorded
as extinguished and recognized as other income. As a result, the extinguishment of these payables to vendors for an aggregate
amount $178,345 and previously recorded other income should have not been recorded;
b) the Company
reclassified previously recorded gain from forgiveness of debt in connection with the execution of the Mutual and Release Agreement
with our former CEO in August 2014 to offset against payroll expenses. The Company determined that the unpaid salaries of $195,000
to Mr. Avery were extinguished and should have been recorded as an offset against payroll expenses during the nine months ended
September 30, 2014.
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September 30, 2014 |
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Adjustments |
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September 30, 2014 |
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|
As Previously Reported |
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To Restate |
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As Restated |
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| Consolidated Balance Sheet: |
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| Accounts payable and accrued expenses |
|
$ |
571,772 |
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|
$ |
65,948 |
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|
(a) |
|
$ |
637,720 |
|
| Liabilities for discontinued operations |
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|
— |
|
|
|
112,397 |
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|
(a) |
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|
112,397 |
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| Total liabilities |
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|
786,652 |
|
|
|
178,345 |
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|
(a) |
|
|
964,997 |
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|
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|
|
|
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| Accumulated deficit |
|
|
(49,169,598 |
) |
|
|
(178,345 |
) |
|
(a) |
|
|
(49,347,943 |
) |
| Total Stockholders' Deficit |
|
|
(386,552 |
) |
|
|
(178,345 |
) |
|
(a) |
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|
(564,897 |
) |
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| For the Nine Months Ended September 30, 2014 |
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| Consolidated Statement of Operations: |
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| Payroll expense |
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|
195,000 |
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|
(195,000 |
) |
|
(b) |
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|
— |
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| Total operating expenses |
|
|
580,961 |
|
|
|
(195,000 |
) |
|
(b) |
|
|
385,961 |
|
| Other income |
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|
178,345 |
|
|
|
(178,345 |
) |
|
(a) |
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— |
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| Gain from forgiveness of debt |
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|
195,000 |
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|
(195,000 |
) |
|
(b) |
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— |
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| Total other income (expenses) - net |
|
|
380,407 |
|
|
|
(373,345 |
) |
|
(a) (b) |
|
|
7,062 |
|
| Net loss |
|
|
(200,554 |
) |
|
|
(178,345 |
) |
|
(a) |
|
|
(378,899 |
) |
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| Net loss per common share, basic and diluted: |
|
$ |
(0.13 |
) |
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|
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|
$ |
(0.25 |
) |
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| For the Three Months Ended September 30, 2014 |
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| Consolidated Statement of Operations: |
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| Payroll expense |
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|
45,000 |
|
|
|
(195,000 |
) |
|
(b) |
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|
(150,000 |
) |
| Total operating expenses |
|
|
82,993 |
|
|
|
(195,000 |
) |
|
(b) |
|
|
(112,007 |
) |
| Other income |
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|
178,345 |
|
|
|
(178,345 |
) |
|
(a) |
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|
— |
|
| Gain from forgiveness of debt |
|
|
195,000 |
|
|
|
(195,000 |
) |
|
(b) |
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|
— |
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| Total other income (expenses) - net |
|
|
393,112 |
|
|
|
(373,345 |
) |
|
(a) (b) |
|
|
19,767 |
|
| Net income (loss) |
|
|
310,119 |
|
|
|
(178,345 |
) |
|
(a) |
|
|
131,774 |
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| Net income (loss) per common share, basic and diluted: |
|
$ |
0.19 |
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|
$ |
0.08 |
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| Consolidated Statement of Cash Flows: |
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| Cash flows from operating activities: |
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| Net loss |
|
|
(200,554 |
) |
|
|
(178,345 |
) |
|
(a) |
|
|
(378,899 |
) |
| Increase in accounts payable and accrued expenses |
|
|
366,227 |
|
|
|
(195,000 |
) |
|
(b) |
|
|
171,227 |
|
| Gain from forgiveness of debt |
|
|
(195,000 |
) |
|
|
195,000 |
|
|
(b) |
|
|
— |
|
| Non-cash other income |
|
$ |
(178,345 |
) |
|
$ |
178,345 |
|
|
(a) |
|
$ |
— |
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|