REVISION OF PRIOR PERIOD FINANCIAL STATEMENTS

12 Months Ended

Dec. 31, 2017

Accounting for the fair value of the convertible promissory notes and warrants issued in the Company's private placement

REVISION OF PRIOR PERIOD FINANCIAL STATEMENTS

REVISION OF PRIOR PERIOD FINANCIAL STATEMENTS

NOTE 14 – REVISION OF PRIOR PERIOD FINANCIAL STATEMENTS

In connection with the preparation of its financial statements for the quarter ended March 31, 2017, the Company identified an error related to the manner in which it accounted for the fair value of convertible promissory notes and warrants issued in a private placement during December 2016 (Note 6). Specifically, the Company was required to apply the guidance of FASB ASC 470, and more specifically, ASC 470 20 25 2 and ASC 470 20 25 3. On the balance sheet at December 31, 2016, the Company recorded the face value of convertible notes payable issued in connection with the private placement under liabilities, discounted by (i) the value of the original issue discount and (ii) the value of the warrants issued to the placement agent. The Company did not, however, discount the value of the convertible notes by the fair value of the warrants issued to individual investors.

In accordance with Staff Accounting Bulletin (“SAB”) No. 99, Materiality, and SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements, the Company evaluated the error and determined that the related impact was not material to the Company’s results of operations or financial position for any prior annual or interim period. Accordingly, the Company corrected these errors for the year ended December 31, 2016 by revising the financial statements beginning in the period ended March 31, 2017. Periods not presented herein will be revised, as applicable, in future filings.

The following tables present the revisions to the balance sheet as of, and the statement of operations for the year ended, December 31, 2016:

Balance Sheet

	As of December 31, 2016
	As Reported		Adjustments		As Revised
Convertible notes payable, net	$	814,989	$	(809,681)	$	5,308
Total Liabilities	$	17,260,318	$	(809,681)	$	16,450,637
Shareholders’ Equity
Additional paid-in capital	$	10,593,324	$	811,901	$	11,405,225
Accumulated deficit		(9,848,822)		(2,220)		(9,851,042)
Total Shareholders’ Equity	$	766,466	$	809,681	$	1,576,147
Total Liabilities and Shareholders’ Equity	$	18,026,784	$	—	$	18,026,784

Statement of Operations

	Year Ended
	December 31, 2016
Net (loss), as reported	$	(4,479,052)
Adjustments:
Previously reported accretion of debt discount (conversion feature and warrants) (interest expense)		2,529
Corrected accretion of debt discount (interest expense)		4,749
Total adjustment		(2,220)
Net (loss), as revised	$	(4,481,272)
Net (loss) per share, as reported	$	(0.21)
Net (loss) per share, as revised	$	(0.21)