| RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS | NOTE 13 – RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL
STATEMENTS The financial statements for the three
months ended March 31, 2024 and 2023 and the opening balances as of December 31, 2023 have been restated. Subsequent to the original issuance
of these financial statements, our management determined the following:
· the Company erroneously did not recognize a valuation decreases in recorded assets
pursuant to current accounting guidelines. Assets effected included inventory, notes receivable and other current assets.
· the Company had erroneously capitalized patent filing costs.
· In addition, the Company is making certain reclassification entries. The effects on the previously issued financial statements are as follows: For periods before January 1, 2024, Management of the Company
determined that the following: [1] An additional reserve for slow moving
inventory of $ 223,175 [2] The recovery of a note receivable
related to previous commission advances was determined to be doubtful based on the terms of the note and the debtor’s recent commission
history. The balance of $ 275,246 [3] A valuation adjustment related to
a note receivable, related to an inventory transfer in the amount of $ 174,950 [4] It was necessary to provide a reserve
for advances made to acquire inventory that would not be recoverable within a reasonable period of time and adjusted the advances in the
amount of $ 164,557 [5] A financing deposit on a financing
commitment from the PFV Fund I in the amount of $ 50,000 [6] The Company determined it was necessary
to reverse previously recorded amounts associated with the note payable related to commissions. A reserve set up to reduce the carrying
value of the note was reversed in the amount of $ 27,525 [7] The Company wrote off capitalized
patent cost to legal fees in the amount of $ 83,597 [8] The Company granted warrants to
an employee and recorded expense of $123,622 based on calculation of the warrant value based on the Black Scholes method. The Company
became aware the assumptions used in the calculation were erroneous and recalculated the expense to be $ 2,238,482 2,114,860 [9] The Company issued common stock
or warrants to certain distributors who responded to an offer after the purchase of a medical testing device. Based on calculation of
the warrant value based on the Black Scholes method the value of the warrant was modified and $ 56,580 13,795 For the three months ending March 31,
2024: [10] Adjustments were required to reverse
the effects of the prior year’s entries in the current period. Certain adjustments in the prior periods
had an effect in in the current period and were recorded. The changes are as follows:
Schedule of changes in adjustments
Reduction to reserved notes receivable $ (395 )
Reduction to commissions reserved note receivable (925 )
Reduction to interest income reserved note receivable 1200
Reduction of amortization on assets written off 1575
Increase in cost of goods sold due to prepaid inventory 16458
Decrease in capitalized patents reversed in prior year $ (607 ) [11] It was necessary to revalue the
equity used in the acquisition and merger based on a third party appraisal. The common share value changed from a range of $ 0.039 0.188 0.139 The changes are as follows:
Schedule of changes in depreciation and amortization and transaction expenses
Reduction in property and equipment $ (366,262 )
Reduction in acquired intangibles - Docsun (3,331,779 )
Reduction in amortizable intangibles – Findit (2,531,548 )
Increase in goodwill – Findit 5,615,753
Reduction in amortization expense 319,905
Reduction in depreciation expense $ (17,903 ) The amounts above were recorded as a
reduction to assets or paid in capital and the associated adjustment to expense was recorded to the statement of operations. [12] It was necessary to revalue the equity used for recording
compensation, returns and loan incentives based on a third party appraisal. The fair market value of options issued was changed from a
range of $ 0.0108 0.02 0.1209 The changes related to warrants and shares are
as follows:
Schedule of changes related to warrants and
shares
Increase in compensation expense $ 1,987,687
Increase to discount for loan incentives 16,964
Discount recognized as interest expense 5,037
Reduction to expense related to returns (10,005 )
Effect of warrants on deferred revenue (995 )
Effect of warrants on returns reserve 19,351
Effect on additional paid in capital $ 15,420 The amounts above were recorded as a
reduction to assets or paid in capital and the associated adjustment to expense was recorded to the statement of operations. [13] It was necessary to reverse accrued
income and receivables for acquired subsidiary. The Company acquired a contract in its acquisition of DocSun. The contract contained a
provision for a minimum payment of $ 20,000 100,000 54,194 [14] It was necessary to accrue or adjust costs received
after the close of the period and transaction costs that had been capitalized pending the completion of the transactions that related
to the acquisition, merger and operations. Additional costs are:
Schedule of additional costs
Legal $ 43,559
Software 11,353
Transaction costs $ 12,287 The amounts above were recorded as a
reduction to assets or an increase in liabilities and the associated adjustment to expense was recorded to the statement of operations. [15] It was necessary to adjust deferred
revenue and current assets for activities related to the completion of the sales of medical testing machines. Revenue was reduced and
deferred revenue was increased by $ 14,374 10,060 [16] As a result of the above adjustments and other reclassifications,
it was necessary to adjust the Statement of Cash Flows to remove netted items, including non-cash items, and to match classification on
the previous financial statements. [17] The presentation of sales was changed
to separately show gross sales, refunds and net sales. The following table presents the effect of the restatements
of the Company’s previously issued balance sheet. As of March 31, 2024
Schedule of restatements of previously issued balance
sheet
As Previously Reported Adjustments before January 1, 2024 March 31, 2024 Adjustments Reclassifications As Restated Notes
Accounts receivable $ 102,861 $ – $ (100,000 ) $ 8,314 $ 11,175 [13]
Inventory 408,993 (223,175 ) 10,417 17,108 213,343 [1], [14]
Prepaid expenses and other current assets 302,176 27,525 (16,458 ) (17,108 ) [6], [10]
(164,557 ) (10,060 ) 72,000 [4], [5], [15]
(925 ) (45,805 ) 146,788 [14]
Notes and receivables 454,766 (454,371 ) (395 ) [2], [3], [10]
Property and equipment 581,494 (366,262 ) [11]
17,903 233,135 [11]
Intangible assets, net of Amortization 17,061,726 (83,597 ) (3,331,779 ) [7], [11]
(2,531,548 ) [11]
(319,905 ) [11]
(607 ) [10]
1,575 10,795,865 [10]
Goodwill 1,489,769 5,615,753 7,105,522 [11]
Total Assets 20,515,943 (898,174 ) (1,032,291 ) 34,508 18,619,986 [2]-[14]
Account Payable 612,912 28,354 8,314 [14]
11,525
(62,840 )
(45,806 )
(181,602 ) 370,857
Accounts Payable – related Parties 181,601 181,601
Accrued Expenses 566,120 (19,351 ) 72,000 [14]
2,975 62,840 [14]
(321,897 ) 362,687
Accrued Expenses – related Parties 321,897 321,897
Promissory notes payable and notes 1,842,449 (16,964 ) (11,525 ) [12]
(1,254 ) (963,215 ) 849,491 [14]
Promissory notes payable and notes – related parties 963,215 963,215
Deferred Revenue 333,365 (13,795 ) 15,369 334,939 [9], [12], [14]
Total Liabilities 3,504,846 (13,795 ) 9,129 35,304 3,534,687
Additional paid-in-capital 25,940,740 2,114,860 (985,717 ) [8], [11]
56,580 388,844 [9], [12]
1,987,687 [12]
15,420 280,688 29,799,102 [12]
Warrant PIC 280,688 (280,688 ) [9], [10]
Accumulated Deficit (10,166,964 ) (3,055,820 ) (2,447,652 ) – (15,670,436 ) [2]-[14]
Total Equity $ 17,011,097 $ (884,380 ) $ (1,041,418 ) $ – $ 15,085,299 [2]-[14] The following table presents the effect of the restatements of the
Company’s previously issued income statement: As of March 31, 2024
Schedule of restatements of previously issued income statement
As Previously Reported Adjustments Reclassifications As Restated Notes
Sales $ 618,116 $ (54,194 ) $ 135,401 $ [13]
Gross sales (14,374 ) 684,949 [15]
Returns (135,401 ) (135,401 )
Net sales 618,116 (68,568 ) 549,548
Cost of goods sold 159,350 16,458 [10]
(10,418 ) 165,390 [14]
Distributor incentives 45,403 9,255 54,658 [12], [14]
Selling, general and administrative expenses 1,050,129 (17,903 ) [11]
(including amortization) 319,905 [11]
1,987,687 [12]
(1,575 ) [10]
(10,005 ) [12]
80,699 3,408,936 [14]
Interest income (1,200 ) 1,200 [10]
Interest expense and financing costs 69,240 5,036 [12]
(1,254 ) 73,022 [14]
Net Loss $ (704,806 ) $ (2,447,652 ) $ – $ (3,152,458 ) [10] - [14] The following table presents the effect of the
restatements of the Company’s previously issued statement of shareholder deficit:
Schedule of restatements of
previously issued statement of shareholder deficit
Common Stock Common Stock Additional Paid- Additional Paid-in Capital- Accumulated Stockholders’
Shares Amount In Capital Warrants Deficit Deficit Notes
Balance,
March 31, 2024, as previously reported 956,530,100 $ 956,530 $ 25,940,740 $ 280,688 $ (10,166,964 ) $ 17,011,097
Prior
period revisions – – 2,171,440 – (3,055,820 ) (884,380 ) [2]
- [14]
Restatements – – 1,406,234 – (2,447,652 ) (1,041,418 ) [2]
- [14]
Reclassifications – – 280,688 (280,688 ) – –
Balance,
March 31, 2024, as restated 956,530,100 $ 956,530 $ 29,799,102 $ – $ (15,670,436 ) $ 15,085,299 The following table presents the effect
of the restatements of the Company’s previously issued statement of cash flows: As of March 31, 2024
Schedule of restatements of previously issued statement of
cash flows
As Previously Reported Adjustments As Adjusted Reclassifications As Restated Notes
Net Loss $ (704,806 ) $ (2,447,652 ) $ (3,152,458 ) $ $ (3,152,458 )
Depreciation and amortization 200,104 311,655 511,759 (11,229 ) 500,530 [11]
Fair value of shares and warrants issued for returns and services 193,620 1,947,682 2,141,302 (2,141,302 ) – [12]
Amortization of debt discount 0 – 11,228 11,228
Fair value of warrants for Services (officers& directors) 130,716 130,716 1,519,566 1,650,282
Fair value of shares and warrants issued for services – – 621,736 621,736
Fair value of shares and warrants issued for returns – – 19,351 19,351
Issuance of common shares as loan incentives 5,832 5,832 (5,832 ) –
Accounts receivable 2,762 (53,356 ) (50,594 ) – 93,406 [13]
Prepaid expenses and other assets (4,466 ) (24,452 ) (28,918 ) (395 )
87,676 58,363 [14]
Accounts payable 175,681 (2,704 ) 172,977 (74,689 ) [14]
(1,041 )
31,915 129,162
Accounts payable – related parties – (31,915 ) (31,915 )
Accrued expenses 69,078 46,840 115,918 (29,707 ) [14]
17,025 (40,764 )
Accrued expenses – related parties – 29,707 29,707
Deferred Revenue (34,633 ) 1,574 (33,059 ) 35,995 2,936 [9], [12], [14]
Purchase of property and equipment (588,432 ) 366,262 (222,170 ) 32,780 (189,390 ) [11]
Cash acquired in DocSun acquisition – 1,445 1,445 – 1,445 [11]
Intangible property (18,447,978 ) 3,331,779 (15,116,199 ) 15,022,760 [11]
90,787 90,787 (2,652 ) [14]
Increase in SBA loans 330,716 330,716 (330,716 ) –
Note and loan payments (91,474 ) (3,915 ) (95,389 ) 77,951 (17,438 ) [14]
Increase in note and loan balances 306,825 (12,657 ) 294,168 5,832 300,000 [12]
Issuance of common shares in acquisition and merger 18,441,025 (3,550,635 ) 14,890,390 (32,780 ) [11]
(14,857,610 ) –
Net effect of currency fluctuation $ $ $ $ 1,041 $ 1,041 |
