Restatement of Previously Issued Financial Statements

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

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Settlement and Confidentiality Agreement with Mutual Releases, whereby the acquisition of HelpComm was fully rescinded effective retroactive to January 1, 2018.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