CORRECTION OF AN ERROR IN PREVIOUSLY ISSUED FINANCIAL STATEMENTS (Tables)

9 Months Ended

Nov. 30, 2019

Correction Of Error In Previously Issued Financial Statements

Schedule of financial statements

The impact on the financial statements for the three and nine months ended November 30, 2018 are as follows:

ARTIFICIAL INTELLIGENCE TECHNOLOGY SYSTEMS INC. 

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

	Originally stated						Restated
	Three Months Ended November 30, 2018			Adjustment			Three Months Ended November 30, 2018
Revenues	$	38,864		$	—		$	38,864
Cost of Goods Sold		—			—			—
Gross Profit		38,864			—			38,864
Operating expenses:
Research and development		300,881			—			300,881
General and administrative		800,384			(76,381	)		724,003
Depreciation and amortization		31,489			—			31,489
Loss on impairment of fixed assets		—			—			—
Total operating expenses		1,132,754			(76,381	)		1,056,373
Loss from operations		(1,093,890	)		76,38	1		(1,017,509	)
Total other income (expense), net		8,805,008			—			8,805,008
Net income (loss)	$	7,711,118		$	76,381		$	7,787,499
Net income (loss) per share - basic	$	0.86		$	0.01		$	0.87
Net income (loss) per share - diluted	$	(0.00	)	$	—		$	(0.00	)

	Originally stated						Restated
	Nine Months Ended November 30, 2018			Adjustment			Nine Months Ended November 30, 2018
Revenues	$	65,705		$	—			$	65,705
Cost of Goods Sold		35,454			—				35,454
Gross Profit		30,251			—				30,251
Operating expenses:
Research and development		534,012			—				534,012
General and administrative		3,082,656			(606,879	)			2,475,777
Depreciation and amortization		82,902			—				82,902
Loss on impairment of fixed assets		4,739			—				4,739
Total operating expenses		3,704,309			(606,879	)			3,097,430
Loss from operations		(3,674,058	)		606,879				(3,067,179	)
Total other income (expense), net		21,058,280			—				21,058,280
Net income (loss)	$	17,384,222		$	606,879			$	17,991,101
Net income ( loss) per share - basic	$	4.32		$	0.12			$	4.47
Net income (loss) per share - diluted	$	(0.01	)		—			$	(0.01	)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	17,384,222		$	606,879			$	17,991,101
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		82,902			—				82,902
Provision for note receivable		40,000			—				40,000
Loss on impairment of fixed assets		4,739			—				4,739
Stock based compensation		632,972			(606,879	)			26,092
Change in fair value of derivative liabilities		(26,216,071	)		—				(26,216,071	)
Interest expense related to derivative liability in excess of face value of debt		751,522			—				751,522
Interest expense related to penalties from debt defaults		221,055			—				221,055
Amortization of debt discounts		3,428,164			—				3,428,164
Gain on settlement of debt		(131,136)			—				(131,136)
Changes in operating assets and liabilities:
Accounts receivable		(879)			—				(879)
Prepaid expenses		62,026			—				62,026
Device parts inventory		74,678			—				74,678
Accounts payable and accrued expenses		1,371,979			—				1,371,979
Accrued interest payable		615,547			—				615,547
Net cash used in operating activities		(1,678,281	)		—				(1,678,281	)
Net cash used in investing activities		(232,933	)		—				(232,933	)
Net cash provided by financing activities		1,903,992			—				1,903,992
Net change in cash		(7,222	)		—				(7,222	)
Cash, beginning of period		24,773			—				24,773
Cash, end of period	$	17,551		$	—			$	17,551