NOTE 12 - Restatement of Previously Issued Financial Statements | Effective January 1, 2018, the Company acquired all of the issued and outstanding shares of HELPCOmm. Inc. (“HelpComm”), a telecom construction and services corporation located in Manassas, Virginia, in exchange for $25,000 of cash and 100,000 shares of Series D Convertible Preferred Stock (the “Acquisition”). On March 12, 2019, the Company and HelpComm entered into a Rescission, Settlement and Confidentiality Agreement with Mutual Releases, whereby the acquisition of HelpComm was fully rescinded effective retroactive to January 1, 2018. The Company has restated its previously issued March 31, 2018 financial statements. The adjustments to the previously issued financial statements reflect the following: a) remove all transactions related to HelpComm b) remove interest accrued in error on a settlement amount that was non-interest bearing c) change value of derivative liability based on the Black-Scholes model BRAVATEK SOLUTIONS, INC. BALANCE SHEET As of March 31, 2018 (unaudited) As Previously Filed Adjustments As Restated CURRENT ASSETS Cash $ 75,803 $ (30,664 ) $ 45,139 Accounts receivable 361,872 (361,872 ) a - Accounts receivable, related party 24,837 - 24,837 Note receivable 25,000 (25,000 ) a - Prepaid expenses and other current assets 288,566 (243,616 ) a 44,950 Investment in unconsolidated investee 20,000 (20,000 ) a - TOTAL CURRENT ASSETS 796,078 (681,152 ) a 114,926 Property and equipment, net 229,035 (209,668 ) a 19,367 Intangible assets, net 1,861,533 (1,861,533 ) a - Goodwill 1,339,259 (1,339,259 ) a - TOTAL ASSETS 4,225,905 $ (4,091,612 ) $ 134,293 CURRENT LIABILITIES Convertible notes payable, net of discounts $ 816,238 $ - $ 816,238 Notes payable 898,946 (68,158 ) a 830,788 Revolving line of credit 493,666 (493,666 ) a - Bank term loans 95,458 (95,458 ) a - Accounts payable and accrued liabilities 699,034 (627,557 ) a 71,477 Accounts payable, related party 341,671 (22,282 ) a 319,389 Accrued interest 348,914 (40,110 ) b 308,804 Capital leases payable 17,244 (17,244 ) a - Derivative liabilities 3,036,641 67,168 c 3,103,809 TOTAL CURRENT LIABILITIES 6,747,812 (1,297,307 ) 5,450,505 LONG-TERM LIABILITIES Notes payable 94,544 (94,544 ) a - Bank term loans 204,832 (204,832 ) a - Capital leases payable 753 (753 ) a - Series D convertible preferred stock 2,400,000 (2,400,000 ) a - TOTAL LONG-TERM LIABILITIES 2,700,129 (2,700,129 ) - COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' DEFICIT Series B preferred stock 26 - 26 Series C preferred stock 32 - 32 Common stock 6,097,640 - 6,097,640 Common stock to be issued 66,917 - 66,917 Additional paid in capital 18,231,714 954,575 c 19,186,289 Accumulated deficit (29,618,365 ) (1,048,751 ) a,b,c (30,667,116 ) TOTAL STOCKHOLDERS' DEFICIT (5,222,036 ) (94,176 ) (5,316,212 ) TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 4,225,905 $ (4,091,612 ) $ 134,293 BRAVATEK SOLUTIONS, INC. STATEMENTS OF OPERATIONS For the Three Months Ended March 31, 2018 (unaudited) As Previously Filed Adjustments As Restated Sales, other $ 1,044,156 $ (1,044,156 ) a $ - Sales, related party 24,837 - 24,837 Total sales 1,068,993 (1,044,156 ) 24,837 Cost of services 821,092 (818,778 ) 2,314 GROSS PROFIT (LOSS) 247,901 (225,378 ) 22,523 OPERATING EXPENSES Selling expenses 10,300 - 10,300 General and administrative 668,788 (438,706 ) a 230,082 Research and development 10,000 - 10,000 TOTAL OPERATING EXPENSES 689,088 (438,706 ) 250,382 OPERATING LOSS (441,187 ) 213,328 (227,859 ) OTHER INCOME (EXPENSES) Interest expense (60,551 ) 10,916 a (49,635 ) Loss on investment in joint venture - (20,000 ) a (20,000 ) Other income 11,448 (9,943 ) a 1,505 Loss on failed acquisition - (150,000 ) a (150,000 ) Gain (loss) on fair value of derivatives 1,777,359 (1,763,589 ) c 13,770 Gain (loss) on extinguishment of debt (20,000 ) - (20,000 ) Amortization of debt discount (802,085 ) 187,989 c (614,096 ) TOTAL OTHER INCOME (EXPENSE), NET 906,171 (1,744,627 ) (838,456 ) NET INCOME (LOSS) $ 464,984 $ (1,531,299 ) $ (1,066,315 ) EARNINGS (LOSS) PER SHARE $ 0.55 $ (1.26 ) BRAVATEK SOLUTIONS, INC. STATEMENTS OF CASH FLOWS For the Three Months Ended March 31, 2018 (unaudited) As Previously Filed Adjustments As Restated CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss ) $ 464,984 $ (1,531,299 ) $ (1,066,315 ) Adjustments to reconcile net income (loss) to net cash used in operations: Amortization and depreciation 197,206 (117,157 ) a 80,049 Loss on rescinded acquisition - 150,000 a 150,000 Loss on extinguishment of debt - 20,000 a 20,000 Amortization of debt discounts 802,084 (187,988 ) c 614,096 (Gain) loss on fair value of derivatives (1,777,359 ) 1,763,589 c (13,770 ) Loss on investment in joint venture - 20,000 a 20,000 Changes in operating assets and liabilities: Accounts receivable, related party 49,989 (64,826 ) a (14,837 ) Accounts receivable (24,837 ) 24,837 a - Prepaid expenses and other current assets 26,875 (48,764 ) a (21,889 ) Accounts payable and accrued liabilities (87,597 ) 124,690 a,b 37,093 Accounts payable and accrued liabilities, related party 3,938 (2,728 ) a 1,210 NET CASH USED IN OPERATING ACTIVITIES (344,717 ) 150,354 (194,363 ) CASH FLOWS FROM INVESTING ACTIVITIES Cash paid in HelpComm acquisition 46,910 (196,910 ) a (150,000 ) Purchase of property and equipment (10,190 ) 10,190 a - Investment in joint venture (20,000 ) - (20,000 ) Purchase of note receivable (25,000 ) 25,000 a - Purchase of exclusivity (29,880 ) - (29,880 ) NET CASH USED IN INVESTING ACTIVITIES (38,160 ) (161,720 ) (199,880 ) CASH FLOWS FROM BY FINANCING ACTIVITIES Payments of principal on notes and leases payable (21,901 ) 21,901 a - Payments of principal on convertible notes payable (4,500 ) - (4,500 ) Payments of principal on bank term notes payable (22,454 ) 22,454 a - Proceeds from issuance of convertible debt , net 240,000 14,525 a 254,525 Proceeds from revolving line of credit 495,000 (495,000 ) a - Payments on revolving line of credit (416,822 ) 416,822 a - NET CASH PROVIDED BY FINANCING ACTIVITIES 269,323 (19,298 ) 250,025 NET INCREASE IN CASH AND CASH EQUIVALENTS (113,554 ) (30,664 ) (144,218 ) CASH AND CASH EQUIVALENTS Beginning of period 189,357 - 189,357 End of period $ 75,803 $ (30,664 ) $ 45,139 |