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Settlement and Confidentiality Agreement with Mutual Releases, whereby the acquisition of HelpComm was fully rescinded effective retroactive to January 1, 2018.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 June 30, 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 June 30, 2018 As Previously Filed Adjustments As Restated CURRENT ASSETS Cash $ 62,824 $ (914 ) a $ 61,910 Accounts receivable 299,046 (259,837 ) a 39,209 Accounts receivable, related party 24,837 (24,837 ) a - Other assets 251,413 (251,413 ) a - Prepaid expenses and other current assets 69,019 8,516 a 77,535 Investment in unconsolidated investee 70,000 (70,000 ) a TOTAL CURRENT ASSETS 777,139 (598,485 ) a 178,654 a Property and equipment, net 210,962 (193,854 ) a 17,108 Intangible assets, net 1,770,842 (1,770,842 ) a - Goodwill 1,339,259 (1,339,259 ) a - TOTAL ASSETS $ 4,098,202 $ (3,902,440 ) $ 195,762 CURRENT LIABILITIES Convertible notes payable, net of discounts $ 992,241 $ 52,969 a $ 1,045,210 Notes payable 904,652 (73,864 ) a 830,788 Revolving line of credit 499,035 (499,035 ) a - Bank term loans 97,139 (97,139 ) a - Accounts payable and accrued liabilities 638,794 (584,630 ) a 54,164 Accounts payable, related party 308,562 (21,062 ) a 287,500 Accrued interest 366,919 (40,110 ) b 326,809 Capital leases payable 12,045 (12,045 ) a Derivative liabilities 2,238,111 738,371 c 2,976,482 TOTAL CURRENT LIABILITIES 6,057,498 (536,545 ) 5,520,953 LONG-TERM LIABILITIES Notes payable 82,268 (82,268 ) a - Bank term loans 180,491 (180,491 ) a - Capital leases payable 449 (449 ) a - Series D convertible preferred stock 2,400,000 (2,400,000 ) a - TOTAL LONG-TERM LIABILITIES 2,663,208 (2,663,208 ) 0 COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' DEFICIT Series B preferred stock 26 - 26 Series C preferred stock 32 - 32 Common stock 6,431,060 - 6,431,060 Common stock to be issued 66,917 - 66,917 Additional paid in capital 21,053,191 848,933 c 21,902,124 Accumulated deficit (32,173,730 ) (1,551,620 ) a,b,c (33,725,350 ) TOTAL STOCKHOLDERS' DEFICIT (4,622,504 ) (702,687 ) (5,325,191 ) TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 4,098,202 $ (3,902,440 ) $ 195,762 BRAVATEK SOLUTIONS, INC. STATEMENTS OF OPERATIONS For the Three Months Ended June 30, 2018 As Previously Filed Adjustments As Restated REVENUES Sales, other $ 774,204 $ (774,186 ) a $ 18 Sales, related party - - - Total sales 774,204 (774,186 ) 18 Cost of services 627,439 (625,159 ) 2,280 GROSS PROFIT (LOSS) 146,765 (149,027 ) (2,262 ) OPERATING EXPENSES Selling expenses 700 9,000 a 9,700 General and administrative 2,897,089 (372,748 ) a 2,524,341 Research and development 6,750 - 6,750 TOTAL OPERATING EXPENSES 2,904,539 (363,748 ) 2,540,791 OPERATING LOSS (2,757,774 ) 214,721 (2,543,053 ) OTHER INCOME (EXPENSES) Interest expense (56,679 ) 18,866 a (37,813 ) Loss on investment in joint venture 0 (77,969 ) a (77,969 ) Other income 1,500 0 a 1,500 Loss on failed acquisition - (110,425 ) a (110,425 ) Gain (loss) on fair value of derivatives 843,192 (678,560 ) c 164,632 Gain (loss) on extinguishment of debt (3,020 ) - (3,020 ) Amortization of debt discount (582,586 ) 130,500 c (452,086 ) TOTAL OTHER INCOME (EXPENSE), NET 202,407 (717,588 ) (515,181 ) NET INCOME (LOSS) $ (2,555,367 ) $ (502,867 ) $ (3,058,234 ) EARNINGS (LOSS) PER SHARE BASIC $ (2.89 ) $ (3.46 ) BRAVATEK SOLUTIONS, INC. STATEMENTS OF OPERATIONS For the Six Months Ended June 30, 2018 As Previously Filed Adjustments As Restated REVENUES Sales, other $ 1,818,360 $ (1,818,342 ) a $ 18 Sales, related party 24,837 - 24,837 Total sales 1,843,197 (1,818,342 ) 24,855 Cost of services 1,448,531 (1,443,937 ) 4,594 GROSS PROFIT (LOSS) 394,666 (374,405 ) 20,261 OPERATING EXPENSES Selling expenses 700 19,300 20,000 General and administrative 3,576,177 (821,754 ) a 2,754,423 Research and development 16,750 - 16,750 TOTAL OPERATING EXPENSES 3,593,627 (802,454 ) 2,791,173 OPERATING LOSS (3,198,961 ) 428,049 (2,770,912 ) OTHER INCOME (EXPENSES) Interest expense (117,228 ) 29,780 a (87,448 ) Loss on investment in joint venture 0 (97,969 ) a (97,969 ) Other income 12,948 (9,943 ) a 3,005 Loss on failed acquisition - (260,425 ) a (260,425 ) Gain (loss) on fair value of derivatives 2,620,551 (2,442,149 ) c 178,402 Gain (loss) on extinguishment of debt (23,020 ) - (23,020 ) Amortization of debt discount (1,384,671 ) 318,489 c (1,066,182 ) TOTAL OTHER INCOME (EXPENSE), NET 1,108,580 (2,462,217 ) (1,353,637 ) NET INCOME (LOSS) $ (2,090,381 ) $ (2,034,168 ) $ (4,124,549 ) EARNINGS (LOSS) PER SHARE BASIC $ (2.40 ) $ (4.72 ) BRAVATEK SOLUTIONS, INC. STATEMENTS OF CASH FLOWS For the Six Months Ended June 30, 2018 As Previously Filed Adjustments As Restated CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (2,090,381 ) $ (2,034,168 ) $ (4,124,549 ) Adjustments to reconcile net loss to net cash used in operations: Amortization and depreciation 307,105 (224,297 ) a 82,808 Loss on rescinded acquisition - 150,000 a 150,000 (Gain) loss on extinguishment of debt - 20,000 a 20,000 Amortization of debt discounts 1,384,671 (318,489 ) c 1,066,182 (Gain) loss on fair value of derivatives (2,620,551 ) 2,442,149 c (178,402 ) Loss on investment in joint venture 20,000 a 20,000 Stock issued for donation 25,000 a 25,000 Voting control value of preferred stock issued 2,333,140.0 - 2,333,140 Changes in operating assets and liabilities: Accounts receivable, related party (24,837 ) (4,372 ) a (29,209 ) Accounts receivable 112,815 (112,815 ) a Prepaid expenses and other current assets (5,626 ) (48,848 ) a (54,474 ) Accounts payable and accrued liabilities (112,034 ) 167,617 a,b 55,583 Accounts payable and accrued liabilities, related party (4,171 ) (26,508 ) a (30,679 ) NET CASH USED IN OPERATING ACTIVITIES (719,869 ) 55,269 (664,600 ) 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 (45,000 ) 25,000 a (20,000 ) Purchase of note receivable (25,000 ) 25,000 a - Purchase of exclusivity (30,380 ) - (30,380 ) NET CASH USED IN INVESTING ACTIVITIES (63,660 ) (136,720 ) (200,380 ) CASH FLOWS FROM BY FINANCING ACTIVITIES Payments of principal on notes and leases payable (33,975 ) 33,975 a - Payments of principal on convertible notes payable (62,461 ) - (62,461 ) Payments of principal on bank term notes payable (45,114 ) 45,114 a - Proceeds from issuance of convertible debt, net 715,000 84,994 a 799,994 Proceeds from revolving line of credit 626,600 (626,600 ) a - Payments on revolving line of credit (543,054 ) 543,054 a - NET CASH PROVIDED BY FINANCING ACTIVITIES 656,996 80,537 737,533 NET INCREASE IN CASH AND CASH EQUIVALENTS (126,533 ) (914 ) (127,447 ) CASH AND CASH EQUIVALENTS Beginning of period 189,357 - 189,357 End of period 62,824 (914 ) 61,910 |