| Restatement | Note 12 – Restatement
Previously reported Restated
For the six months ended For the six months ended
6/30/2017 Adjustment 6/30/2017
Revenue $ 211,086 680,427 {a} $ 891,513
Revenue - related party – 6,571 {b} 6,571
Total revenue 211,086 898,084
Cost of Revenue 65,498 686,998 {a} 752,496
Gross Profit 145,588 145,588
Operation Expenses:
Compensation - officers 60,000 60,000
Research and development 109,929 109,929
Professional fees 69,777 69,777
General and administrative 123,083 123,083
Total Operating Expenses 362,789 362,789
Loss from Operations (217,201 ) (217,201 )
Other Income (Expense)
Interest expense, net 53 53
Other income 4,763 4,763
Total other expense 4,815 4,815
Loss before income taxes (212,885 ) (212,885 )
Income tax expense 800 800
Net Loss $ (213,685 ) $ (213,685 )
Weight Average Number of Common Shares Outstanding - Basic and Diluted 34,574,706 34,574,706
Net Loss per common share
Basic and diluted $ (0.01 ) $ (0.01 ) {a} The Company previously recorded shipment
of sales shipped directly from vendor to customer as net of cost of goods sold. The Company corrected the error by recording sales
at gross amount and separately record cost of goods sold amount. {b} Revenue generated from Vitashower Corp.,
a company owned by the CEO, amounted to $6,571 for the six months ended June 30, 2017 was reclassified to be separately disclosed.
Previously reported Restated
For the three months ended For the three months ended
6/30/2017 Adjustment 6/30/2017
Revenue $ 128,896 496,172 {a} $ 625,068
Revenue - related party – 3,563 {b} 3,563
Total revenue 128,896 628,631
Cost of Revenue 45,163 499,736 {a} 544,898
Gross Profit 83,733 83,733
Operation Expenses:
Compensation - officers 30,000 30,000
Research and development 55,453 55,453
Professional fees 41,797 41,797
General and administrative 60,673 60,673
Total Operating Expenses 187,923 187,923
Loss from Operations (104,190 ) (104,190 )
Other Income (Expense)
Interest expense, net 20 20
Other income – –
Total other expense 20 20
Loss before income taxes (104,170 ) (104,170 )
Income tax expense 800 800
Net Loss $ (104,970 ) $ (104,970 )
Weight Average Number of Common Shares Outstanding - Basic and Diluted 34,574,706 34,574,706
Net Loss per common share
Basic and diluted $ (0.00 ) $ (0.00 ) {a} The Company previously recorded shipment
of sales shipped directly from vendor to customer as net of cost of goods sold. The Company corrected the error by recording sales
at gross amount and separately record cost of goods sold amount. {b} Revenue generated from Vitashower Corp.,
a company owned by the CEO, amounted to $3,563 for the three months ended June 30, 2017 was reclassified to be separately disclosed. | The Company
reevaluated inventory for slow moving and reserved a portion of slow moving inventory for obsolescence. In 2015 the
Company entered into a business combination with an entity under common control. The accounting treatment for such business combination
should have been recorded at carry value, similar to pooling of interest. The Company corrected the error in the accounting treatment
of the transaction. In 2016, the Company recorded sales transactions net of cost of goods sold in error. The restatement corrected
the error. Also, certain
account classifications have been modified. Related party accounts receivable and accounts payable have been reclassified to their
own line for disclosure purpose. See below for result of 2016 restatement and reclassification.
Previous reported Restated
12/31/2016 Adjustment 12/31/2016
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 340,073 (2 ) $ 340,071
Accounts receivable 35,896 (10,332 ) {a} 25,564
Accounts receivable - related party – 10,332 {a} 10,332
Inventories, net 104,832 (36,337 ) {b} 68,495
Prepaid expenses 7,962 7,962
Total Current Assets 488,763 – 452,424
Property and equipment, net 8,517 – 8,517
Other assets:
Deposits 24,726 – 24,726
Total assets: $ 522,006 – $ 485,667
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable and accrued liabilities $ 372,912 (4,399 ) {c} $ 368,513
Customer deposit 57,726 4,400 {c} 62,126
Income taxes payable 800 – 800
Total Current Liabilities 431,438 431,439
Non-current Liabilities
Deferred rent 468 – 468
Total Liabilities 431,906 431,907
Commitments and Contingencies
Stockholders' Equity:
Common stock, par value $0.001 per share,
75,000,000 shares authorized; 34,574,706 shares issued and outstanding as of December 31, 2017 and 2016, respectively 34,575 – 34,575
Additional paid-in capital 713,239 658,379 {d} 1,371,618
Accumulated deficit (657,714 ) (694,719 ) {e} (1,352,433 )
Total stockholders' equity 90,100 53,760
Total Liabilities and Stockholders' Equity $ 522,006 $ 485,667 {a} The Company
reclassified related party accounts receivable and payable balance into its own line item. {b}The Company
reserved $36,337 for slow moving inventory items. {c} Customer
deposit of $4,400 was reclassified out from accounts payable to correctly record in customer deposit. {d} The Company
and Perfecular Inc. entered into merger agreement on December 30, 2015. The two entities are merger under common control. Per
ASC 805-50-45, entities merger under common control should be recorded using book value and retained earnings is carried into
the consolidated financial statements. The Company erroneously eliminated Perfecular Inc.’s retained earnings through consolidation.
An adjustment is made to properly record investment made to the merger and record retained earnings of Perfecular Inc. {e} Accumulated
adjustment effect in result of inventory reserve and adjustment to properly recorded investment made to the merger.
Previously reported Restated
12/31/2016 Adjustment 12/31/2016
Revenue $ 337,496 778,723 {f} $ 1,116,219
Revenue - related party – 5,759 {g} 5,759
Total revenue 337,496 1,121,978
Cost of Revenue 57,128 809,431 {f}{h} 866,559
Gross Profit 280,368 255,419
Operation Expenses:
Compensation - officers 121,385 121,385
Research and development 201,899 201,899
Professional fees 142,956 142,955
General and administrative 257,365 (1,155 ) {g} 256,210
Total Operating Expenses 723,605 722,449
Loss from Operations (443,237 ) (467,030 )
Other Income (Expense)
Interest expense, net (203 ) 300 {g} 97
Other income 5,736 (5,148 ) {g} 588
Other expense (1,600 ) 1,012 {g} (588 )
Total other expense 3,933 91
Loss before income taxes (439,304 ) (466,939 )
Income tax provision 1,600 (1,105 ) {j} 495
Net Loss $ (440,904 ) $ (467,434 )
Weight Average Number of Common Shares Outstanding
- Basic and Diluted 34,574,706 34,574,706
Net Loss per common share
Basic and diluted $ (0.01 ) $ (0.01 ) {f} The Company
previously recorded shipment of sales shipped directly from vendor to customer as net of cost of goods sold. The Company corrected
the error by recording sales at gross amount and separately record cost of goods sold amount. {g} Other
income and other expenses items were reclassified to other income statement accounts. Refund of rent expense of $1,155 was reclassified
from other income to general and administrative expenses. Other expenses items including interest expense and cost of sales were
reclassified to their respective accounts. Interest expense was reclassified from other income. {h} The Company
reserved $36,337 for slow moving inventory items into cost of goods sold. {i}Income
tax refund was reclassified from other income to income tax expense.
Previously Restated
12/31/2016 Adjustment 12/31/2016
Cash flows from operating activities:
Net Loss $ (440,904 ) (26,530 ) $ (467,434 )
Adjustments to reconcile
net loss to net cash used in operating activities:
Inventory reserve – 26,528 {j} 26,528
Depreciation expense 1,130 1,130
Changes in Operating Assets
and Liabilities:
Accounts receivable 70,993 10,332 {k} 81,325
Accounts receivable - related
party – (10,332 ) {k} (10,332 )
Inventories (53,258 ) (53,258 )
Prepaid expenses 6,999 6,999
Accounts payable and accrued
liabilities 96,987 (4,402 ) {l} 92,585
Customer deposit (82,303 ) 4,400 {l} (77,903 )
Deferred rent (443 ) (443 )
Net cash flows used in operating activities (400,799 ) (400,803 )
Cash flows from investing activities:
Purchase of property and
equipment (8,239 ) (8,239 )
Net cash flows used in investing activities (8,239 ) (8,239 )
Cash flows from financing activities:
Repayment to related parties (63,369 ) (63,368 )
Repayment to shareholders (19,533 ) (19,534 )
Net cash flows provided
by (used in) financing activities (82,902 ) (82,902 )
Net Change in Cash and Cash
Equivalents (491,940 ) (491,944 )
Cash and cash equivalents - Beginning of Period 832,015 832,015
Cash and cash equivalents - End of Period $ 340,071 $ 340,071 {j} The Company
reserved $36,337 for slow moving inventory items into cost of goods sold. {k} The Company
reclassified related party accounts receivable and payable balance into its own line item. {l} Customer
deposit of $4,400 was reclassified out from accounts payable to correctly record in customer deposit. |
