Annual report pursuant to Section 13 and 15(d)

Restatement of Previously Issued Financial Statements

v3.10.0.1
Restatement of Previously Issued Financial Statements
 12 Months Ended
Dec. 31, 2017
Accounting Changes and Error Corrections [Abstract]  
Restatement of Previously Issued Financial Statements

Note 2 – Restatement of Previously Issued Financial Statements

 

As previously disclosed, the Company determined that certain revenue transactions did not qualify for revenue recognition under generally accepted accounting principles. In the process of this determination, the Company discovered information that existed at December 31, 2017 which affected the revenue, certain obligations and the value of certain inventory items reported in the year ended December 31, 2017. The Company concluded that the impact of applying corrections for these errors and misstatements on the consolidated financial statements as of and for the year ended December 31, 2017 is material. As a result, the Company is restating its consolidated financial statements as of and for the year ended December 31, 2017. See below for a reconciliation of the previously reported amounts to the restated amounts.

The table below sets forth the consolidated balance sheets, including the balances originally reported, corrections and the as restated balances:

 

    As of December 31, 2017  
    As Reported     Correction     As Restated  
Trade Receivables, net   $ 1,490,985     $ (526,314 )   $ 964,671  
Trade Receivables – Related Party, net     125,001       (125,001 )     -  
Inventories, net     1,845,281       (897,669 )     947,612  
Total Current Assets     9,324,883       (1,548,984 )     7,775,899  
Total Assets     10,886,874       (1,548,984 )     9,337,890  
Trade and Other Payables     1,733,216       12,000       1,745,216  
Total Current Liabilities     1,773,037       12,000       1,785,037  
Total Liabilities     1,773,037       12,000       1,785,037  
Accumulated Deficit     (103,284,863 )     (1,560,984 )     (104,845,847 )
Total Stockholder’s Equity     9,113,837       (1,560,984 )     7,552,853  
Total Liabilities and Stockholders’ Equity     10,886,874       (1,548,984 )     9,337,890  

 

The table below sets for the consolidated statements of income, including the balances originally reported, corrections, and the restated amounts:

 

    For the year ended December 31, 2017  
    As Reported     Correction     As Restated  
Product revenue   $ 3,754,896     $ (450,184 )   $ 3,304,712  
Product revenue – Related party     124,631       (124,631 )     -  
Product Cost of Sales     (1,419,963 )     (986,169 )     (2,406,132 )
Gross Income     2,509,564       (1,560,984 )     948,580  
Loss from Operations     (5,052,806 )     (1,560,984 )     (6,613,790 )
Loss Before Income Taxes     (5,805,326 )     (1,560,984 )     (7,366,310 )
Net Loss Attributable to Common Stockholders     (5,805,326 )     (1,560,984 )     (7,366,310 )
Comprehensive Loss     (5,805,326 )     (1,560,984 )     (7,366,310 )
Loss per Share     (0.61 )     (0.17 )     (0.78 )

  

The table below sets forth the consolidated statements of shareholders' equity, including the balances originally reported, corrections and the as restated balances:

 

    As Reported     Correction     As Restated  
Net loss, for the year ended December 31, 2017   $ (5,805,326 )   $ (1,560,984 )   $ (7,366,310 )
Accumulated Deficit, as of December 21, 2017     (103,284,863 )     (1,560,984 )     (104,845,847 )
Total Equity, as of December 31, 2017     9,113,837       (1,560,984 )     7,552,853  

 

The table below sets forth the consolidated statements of cash flows from operating activities, including the balances originally reported, corrections and the as restated balances:

 

    For the year ended December 31, 2017  
    As Reported     Correction     As Restated  
Net loss   $ (5,805,326 )   $ (1,560,984 )   $ (7,366,310 )
Reserve and write-off for absolute inventory     26,122       1,182,400       1,208,522  
Increase in trade receivables     (1,339,714 )     526,314       (813,400 )
(Increase)/decrease in trade receivables – related party     (93,109 )     125,001       31,892  
Increase/(decrease) in inventories     165,118       (284,731 )     (119,613 )
Increase/(decrease) in trade and other payables     269,853       12,000       281,853  
Net cash used in operating activities     5,080,412       -       5,080,412  

 

The restatement had no impact on cash flows from investing activities or financing activities.

 

In addition to the restated consolidated financial statements, the information contained in Notes 4, 7, 9, 12, 15, 16, 17, 18, 19, and 22 has been restated.