| Restatement |
NOTE 21 – RESTATEMENT
We have restated our financial statements
for the year ended 2011 The net effect is a $327,524 decrease in Net Income due to $225,000 increase in compensation expense and
$102,503 increase in interest expense. The increase in compensation expense resulted from valuing the share price for shared based
services provided by the COO at $0.10. The shares were valued based on contemporaneous sales to unrelated third party investors.
The increase in interest expense resulted from valuing detachable warrants that were issued with convertible debt and from the
beneficial conversion feature value that was not previously valued. The following Tables show the Balance Sheet and Income Statement
effect.
BALANCE SHEET
| |
|
Restatement |
|
|
Originally
Filed
|
|
|
Net
Effect
|
|
| ASSETS |
|
|
|
|
|
|
|
|
|
| Current Assets |
|
|
|
|
|
|
|
|
|
| Cash and cash equivalents |
|
$ |
988 |
|
|
$ |
988 |
|
|
|
|
| Accounts receivable |
|
|
184,232 |
|
|
|
184,232 |
|
|
|
|
| Prepaid consulting |
|
|
22,500 |
|
|
|
22,500 |
|
|
|
|
| Prepaid expenses |
|
|
16,437 |
|
|
|
16,437 |
|
|
|
|
| Total Current Assets |
|
|
224,157 |
|
|
|
224,157 |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Property and Equipment (net) |
|
|
52,500 |
|
|
|
52,500 |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| TOTAL ASSETS |
|
$ |
276,657 |
|
|
$ |
276,657 |
|
|
$ |
— |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
| Current Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
| Accounts payable |
|
$ |
139,609 |
|
|
$ |
139,609 |
|
|
|
|
|
| Notes payable - related party |
|
|
25,000 |
|
|
|
25,000 |
|
|
|
|
|
| Notes payable (Convertible), net |
|
|
126,951 |
|
|
|
274,427 |
|
|
|
(147,476 |
) |
| Note payable - factoring |
|
|
115,127 |
|
|
|
115,126 |
|
|
|
|
|
| Loans payable - insurance |
|
|
4,174 |
|
|
|
4,174 |
|
|
|
|
|
| Line of credit |
|
|
35,146 |
|
|
|
35,146 |
|
|
|
|
|
| Accrued interest |
|
|
896 |
|
|
|
896 |
|
|
|
|
|
| Total Current Liabilities |
|
|
446,902 |
|
|
|
594,378 |
|
|
|
(147,476 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Stockholders' Equity (Deficit) |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Common stock-$.001 par value, 50,000,000 shares authorized, |
|
|
28,666 |
|
|
|
28,666 |
|
|
|
|
|
| Additional paid in capital |
|
|
3,639,812 |
|
|
|
3,164,813 |
|
|
|
475,000 |
|
| Accumulated deficit |
|
|
(3,838,724 |
) |
|
|
(3,511,200 |
) |
|
|
(327,524 |
) |
| Total Stockholders' Equity (Deficit) |
|
|
(170,245 |
) |
|
|
(317,722 |
) |
|
|
147,476 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) |
|
$ |
276,657 |
|
|
$ |
276,657 |
|
|
$ |
— |
|
STATEMENT OF OPERATIONS
For the Year Ended December 31, 2011
| |
|
Restatement |
|
|
Originally
Filed
|
|
|
Net
Effect
|
|
| |
|
|
|
|
|
|
|
|
|
| Revenue |
|
$ |
666,152 |
|
|
$ |
666,152 |
|
|
|
(0 |
) |
| Cost of Sales |
|
|
62,597 |
|
|
|
62,597 |
|
|
|
0 |
|
| Gross Profit |
|
|
603,555 |
|
|
|
603,555 |
|
|
|
(0 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
| Administrative and general |
|
|
395,917 |
|
|
|
395,917 |
|
|
|
0 |
|
| Salaries and employee benefits |
|
|
844,526 |
|
|
|
619,526 |
|
|
|
225,000 |
|
| Professional fees |
|
|
441,665 |
|
|
|
441,665 |
|
|
|
0 |
|
| Total Operating Expenses |
|
|
1,682,108 |
|
|
|
1,457,108 |
|
|
|
225,000 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| (Loss) Before Other Income (Expense) |
|
|
(1,078,553 |
) |
|
|
(853,553 |
) |
|
|
(225,000 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Other Income (Expense) |
|
|
|
|
|
|
|
|
|
|
|
|
| Other income (expense) |
|
|
— |
|
|
|
21 |
|
|
|
(21 |
) |
| Interest expense |
|
|
(142,498 |
) |
|
|
(39,995 |
) |
|
|
(102,503 |
) |
| Loss on sale of property & equipment |
|
|
(396 |
) |
|
|
(396 |
) |
|
|
0 |
|
| Total Other Income (Expense) |
|
|
(142,894 |
) |
|
|
(40,370 |
) |
|
|
(102,524 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| (Loss) from operations before income taxes |
|
|
(1,221,447 |
) |
|
|
(893,923 |
) |
|
|
(327,524 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Provision for Income Taxes |
|
|
— |
|
|
|
— |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Net (Loss) |
|
|
(1,221,447 |
) |
|
|
(893,923 |
) |
|
|
(327,524 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Basic and Fully Diluted (Loss) per Share: |
|
|
|
|
|
|
|
|
|
|
|
|
| Basic and fully diluted |
|
$ |
(0.04 |
) |
|
$ |
(0.03 |
) |
|
$ |
(0.01 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted average common shares outstanding |
|
|
27,308,284 |
|
|
|
27,308,284 |
|
|
|
27,308,284 |
|
|