0001185185-18-001414.txt : 20180810 0001185185-18-001414.hdr.sgml : 20180810 20180810165545 ACCESSION NUMBER: 0001185185-18-001414 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 44 CONFORMED PERIOD OF REPORT: 20170930 FILED AS OF DATE: 20180810 DATE AS OF CHANGE: 20180810 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Znergy, Inc. CENTRAL INDEX KEY: 0001568875 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC LIGHTING & WIRING EQUIPMENT [3640] IRS NUMBER: 461845946 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-55152 FILM NUMBER: 181009455 BUSINESS ADDRESS: STREET 1: 808A SOUTH HUNTINGTON STREET CITY: SYRACUSE STATE: IN ZIP: 46567 BUSINESS PHONE: 941-350-7833 MAIL ADDRESS: STREET 1: 808A SOUTH HUNTINGTON STREET CITY: SYRACUSE STATE: IN ZIP: 46567 FORMER COMPANY: FORMER CONFORMED NAME: MAZZAL HOLDING CORP. DATE OF NAME CHANGE: 20140218 FORMER COMPANY: FORMER CONFORMED NAME: Boston Investment & Development Corp. DATE OF NAME CHANGE: 20130205 10-Q/A 1 znergy20170930_10qa.htm FORM 10-Q/A znergy20170930_10qa.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549  

  


 

FORM 10-Q/A

Amendment No. 1

 


 

Quarterly report pursuant Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the quarterly period ended September 30, 2017

 

Transition report pursuant Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the transition period from _______ to _______

 

000-55152

(Commission file number)

 

ZNERGY, INC.

(Exact name of registrant as specified in its charter)

 

Nevada

 

46-1845946

(State or other jurisdiction of incorporation

or organization)

 

(I.R.S. Employer Identification No.)

 

6102 South MacDill Avenue, Suite G

Tampa, FL 33611

 

33611

(Address of principal executive offices)

 

(Zip Code)

 

800-931-5662

(Registrant’s telephone number, including area code)

 

MAZZAL HOLDING CORP.

(Former name, former address and former fiscal year, if changed since last report)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒                                No ☐

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ☐                                No ☒ 

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer ☐

 

Accelerated filer                    ☐

Non-accelerated filer ☐  (Do not check if a smaller reporting company)

 

Smaller reporting company   ☒

Emerging growth company ☐

 

 

 

If an emerging growth company, indicate by check mark if he registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provide pursuant to Section 13(a) of the Exchange Act. ☐ 

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). 

Yes ☐                                No ☒

 

On November 13, 2017, there were 227,624,960 shares of the registrant’s common stock outstanding.

 

 

Explanatory Note

 

As used in the Amendment No. 1 on Form 10-Q for the quarter ended September 30, 2017, (the “Form 10-Q/Q”), the terms “Company”, “our”, “us” or “we” refer to Znergy, Inc., formerly Mazzal Holding Corp.

 

This Form 10-Q/A amends the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2017 (the “Original Report”), as originally filed with the Securities and Exchange Commission (the “SEC”) on November 13, 2017. This Form 10-Q/A is being filed to restate the unaudited Condensed Consolidated Financial Statements and related Management’s Discussion and Analysis of Financial Condition and Results of Operations for the three and nine months ended September 30, 2017. Subsequent to the filing of the September 30, 2017 Form 10-Q, the Company determined that it had made an error in its assessment of when collectability was reasonably assured for rebate revenue. The Company has determined that the change had a material effect on the Condensed Consolidated Financial Statements for the three and nine Months ended September 30, 2017. The change in accounting was properly reflected in the Company’s Form 10-K filed with the SEC.

 

The Company’s Chief Executive Officer has also provided new certifications as required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002. The certifications are included in the Form 10-Q/A as Exhibits 31.1 and 32.1.

 

For the convenience of the reader, this Form 10-Q/A sets forth the information in the Original Report in its entirety, as such information is modified and superseded where necessary to reflect the restatement and related revisions. Except as provided above, this Form 10-Q/A does not reflect events occurring after the filing of the Original Report and does not amend or otherwise update any information in the Original Report. Accordingly, this Form 10-Q/A should be read in conjunction with our filings with the SEC subsequent to the date on which we filed the Original Report with the SEC.  

 

 

 

 

TABLE OF CONTENTS

 

PART I - FINANCIAL INFORMATION

 

 

Item 1.

Condensed Consolidated Financial Statements

4

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

17

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

22

 

Item 4.

Controls and Procedures

22

 

 

Part II - OTHER INFORMATION

23

 

Item 1.

Legal Proceedings

23

 

Item 5.

Other Information

23

 

Item 6.

Exhibits

23

 

 

 

 

SIGNATURES

24

 

 

 

PART I - FINANCIAL INFORMATION

 

Item 1.          Condensed Consolidated Financial Statements

 

 

ZNERGY, INC.

INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

CONTENTS:

 

 

 

Condensed Consolidated Balance Sheets as of September 30, 2017 (unaudited), and December 31, 2016

5

 

 

Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2017 and 2016 (unaudited)

6

 

 

Consolidated Statement of Changes in Stockholders’ Equity (Deficit) for the nine months ended September 30, 2017 (unaudited)

7

 

 

Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2017 and 2016 (unaudited)

8

 

 

Notes to Condensed Consolidated Unaudited Financial Statements

9

 

 

 

ZNERGY, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

as of


 

   

September 30,

   

December 31,

 
   

2017

   

2016

 
   

(UNAUDITED)

         
    (RESTATED)          
ASSETS                

CURRENT ASSETS

               

Cash

  $ 131,444     $ 40,507  

Accounts receivable, net of allowance

    481,389       79,612  

Prepaid expenses

    76,460       3,750  

Inventory

    389,768       192,105  

Total current assets

    1,079,061       315,974  
                 

Fixed Assets, net

    306,189       2,567  

Intangible assets, net

    1,845       1,845  

TOTAL ASSETS

  $ 1,387,095     $ 320,386  
                 

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

               

CURRENT LIABILITIES

               

Accounts payable

  $ 251,131     $ 284,930  

Accrued expenses

    185,588       139,336  

Customer deposits

    64,383       6,605  

Advances

    -       60,000  

Loan, building

    225,000       -  

Loan from related party

    892       135,749  

Total current liabilities

    726,994       626,620  
                 

COMMITMENTS AND CONTINGENCIES

               
                 

STOCKHOLDERS’ EQUITY (DEFICIT)

               

  Preferred stock, $0.0001 par value, 100,000,000

      authorized shares; no shares issued and outstanding

    -       -  

  Common stock, $0.0001 par value; 500,000,000 shares

      authorized; 227,624,960 and 193,150,000 shares issued

      and outstanding at September 30, 2017 and

      December 31, 2016

    22,762       19,315  

  Additional paid-in-capital

    11,825,308       7,626,099  

  Accumulated deficit

    (11,187,969

)

    (7,951,648

)

Total Stockholders’ Equity (Deficit)

    660,101       (306,234

)

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

  $ 1,387,095     $ 320,386  

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 

 

ZNERGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

   

For the Three Months Ended

   

For the Nine Months Ended

 
   

September 30,

   

September 30,

   

September 30,

   

September 30,

 
   

2017

   

2016

   

2017

   

2016

 
   

(Restated)

           

(Restated)

         

Revenue

  $ 586,976     $ 2,461     $ 1,015,217     $ 14,701  

Cost of revenue

    423,334       -       596,661       -  

Gross profit

    163,642       2,461       418,556       14,701  
                                 

Selling, general and administrative expenses

    1,241,262       231,754       3,654,877       373,490  
                                 

Loss from operations

    (1,077,620

)

    (229,293

)

    (3,236,321

)

    (358,789

)

                                 

Other income (expense)

                               

Other income

    -       -       -       7,136  

  Total other income

    -       -       -       7,136  
                                 

Provision for income taxes

    -       -       -       -  
                                 

Net loss

  $ (1,077,620

)

  $ (229,293

)

  $ (3,236,321

)

  $ (351,653

)

                                 

Net loss per common share - basic and diluted

  $ (0.01

)

  $ (0.00

)

  $ (0.02

)

  $ (0.00

)

                                 

Weighted average number of shares outstanding

   - basic and diluted

    214,074,451       185,060,753       205,493,759       203,991,818  

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 

ZNERGY, INC.

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2017

(Unaudited)

 

           

(Restated)

                   

Total

 
                   

Additional

           

Stockholders’

 
   

Common Stock

   

Paid in

   

Accumulated

   

Equity

 
   

Shares

   

Amount

   

Capital

   

Deficit

   

(Deficit)

 

Balance at December 31, 2016

    193,150,000     $ 19,315     $ 7,626,099     $ (7,951,648

)

  $ (306,234

)

                                         

Stock and options issued for services

    19,550,000       1,955       2,562,243       -       2,564,198  
                                         

506b Offering

                                       

Stock and warrants issued for cash

    10,600,000       1,060       793,941       -       795,001  

Stock and warrants issued for debt conversion

    4,324,960       432       843,025       -       843,457  
                                         

Net loss

                            (3,236,321

)

    (3,236,321

)

                                         

Balance at September 30, 2017

    227,624,960     $ 22,762     $ 11,825,308     $ (11,187,969

)

  $ 660,101  

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 

 

ZNERGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

 

   

For the Nine

   

For the Nine

 
   

Months Ended

   

Months Ended

 
   

September 30,

   

September 30,

 
   

2017

   

2016

 
   

(Restated)

         

CASH FLOWS USED IN OPERATING ACTIVITIES:

               

Net loss

  $ (3,236,321

)

  $ (351,653

)

Adjustments to reconcile net loss to net cash

used in operating activities:

               

Depreciation and amortization

    1,862       2,500  

Common stock and options issued for services

    2,564,198       197,169  

Common stock and options issued for interest on debt converted

    519,085       -  

Contributed services

    -       10,640  

Accounts receivable

    (401,777

)

    (23,480

)

Prepaid expenses

    (72,710

)

    -  

Inventory

    (197,663

)

    (19,341

)

Accounts payable & accrued expenses

    21,818       69,534  

Customer deposits

    57,778       -  

          Net cash used in operating activities

    (743,730

)

    (114,631

)

                 

CASH FLOWS USED IN INVESTING ACTIVITIES:

               

Purchase of fixed assets

    (80,484

)

    (1,213

)

          Net cash used in  investing activities

    (80,484

)

    (1,213

)

                 

CASH FLOWS FROM FINANCING ACTIVITIES:

               

     Proceeds from issuance of common stock

    795,001       -  

     Repayment of advances from third parties

    (106,340

)

    -  

     Payments of Loan from Related Parties

    (260

)

    -  

     Advances from third parties

    226,750       123,526  

          Net cash provided by financing activities

    915,151       123,526  
                 

INCREASE IN CASH

    90,937       7,682  
                 

CASH, BEGINNING OF PERIOD

    40,507       1,279  
                 

CASH, END OF PERIOD

  $ 131,444     $ 8,961  
                 

Supplemental Disclosures

               

Non-cash investing and financing activities:

               

  Transfer of assets and liabilities to related party for return of common shares

  $ -     $ 1,018,679  

  Purchase of building with note

  $ 225,000     $ -  

  Repayment of debt with common stock and options

  $ 324,372     $ -  

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 

 

ZNERGY, INC.

NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS

SEPTEMBER 30, 2017

 

NOTE 1 – NATURE OF BUSINESS AND BASIS OF PRESENTATION

 

Znergy, Inc., (formerly Mazzal Holding Corp., formerly Boston Investment and Development Corp.) is a Nevada corporation (the “Company”), incorporated on January 23, 2013. The original business plan of the Company was the construction and management of multi-family home developments and the subsequent sale thereof.

 

On October 26, 2015 the Company acquired Global ITS, Inc. and its wholly owned subsidiary, Znergy, Inc. in order to expand into the Energy Efficiency (EE) marketplace, focusing on commercial lighting and green project financing. On February 9, 2016, the Company agreed to sell to the Mazzal Trust the real property which the Trust had previously sold to the Company and the Trust returned to the Company 149,950,000 of the 150,000,000 shares of the Company’s common stock owned by the Trust.  The Company is now focused solely on the EE marketplace with an emphasis on LED retrofitting and relamping.

 

Basis of Presentation

The accompanying interim condensed consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q and do not include all of the information and footnotes required by GAAP for complete financial statements.

 

Certain information and footnote disclosures normally included in the Company’s annual audited consolidated financial statements and accompanying notes have been condensed or omitted in these interim condensed consolidated financial statements. Accordingly, the unaudited condensed consolidated financial statements included herein should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2016, as filed with the Securities and Exchange Commission (“SEC”) on Form 10-K.

 

The results of operations presented in this quarterly report are not necessarily indicative of the results of operations that may be expected for any future periods. In the opinion of management, these unaudited condensed consolidated financial statements include all adjustments and accruals, consisting only of normal recurring adjustments that are necessary for a fair presentation of the results of all interim periods reported herein.

 

Consolidation

The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions have been eliminated in consolidation.

 

Revenue Recognition

The Company accounts for revenue using the “completed contract method” in accordance with ASC 605-35. Under this method, contract costs are accumulated as deferred assets and billings and/or cash receipts are recorded to a deferred revenue liability account during the contract period, but no revenues, costs or profits are recognized in operations until the completion of the contract. Costs include direct material, direct labor, subcontract labor and allocable indirect costs. All unallocable indirect costs and corporate general and administrative costs are charged to the periods as incurred. However, in the event a loss on a contract is foreseen, the Company will recognize the loss when such loss is determined. The deferred asset (accumulated contract costs) in excess of the deferred liability (billings and/or cash received) is classified as a current asset under “Costs in excess of billings on uncompleted contracts.” The deferred liability (billings and/or cash received) in excess of the deferred asset (accumulated contract costs) is classified under current liabilities as “Billings in excess of costs on uncompleted contracts.” A contract is considered complete when accepted by the customer. The Company quotes its customers the total costs of product installation and materials minus the expected rebates, if any, from a given utility.  For projects larger than $10,000, rebates must be pre-approved by the utility.  Rebate revenue is recognized when the rebate is received by the Company.

 

Reclassification

Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations. Reclassifications have also been made to the Consolidated Condensed Statement of Cash Flows for the for the nine months ending September 30, 2016, for consistency with the current period presentation. This change in classification does not materially affect previously reported cash flows from operations, investing or financing activities in the Consolidated Condensed Statement of Cash Flows, and had no effect on the previously reported Consolidated Condensed Statement of Operations for any period.

 

 

NOTE 2 – RESTATEMENT

 

Subsequent to the filing of the September 30, 2017 Form 10Q, the Company determined that it had made an error in its assessment of when collectability was reasonably assured for rebate revenue and should include rebate income as revenue only  when it is collected by the Company. The correction to rebate revenue resulted in a reduction in the number of performance-based options issued and the charge to operations for performance-based options. The Company has determined that the correction had a material effect on the Condensed Consolidated Financial Statements for the three and nine months ended September 30, 2017.

 

As a result, the Company has restated its unaudited Condensed Consolidated Financial Statements for the three and nine months ended September 30, 2017. The following table summarizes the restatement changes made to the Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Operations, and Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2017, previously filed:

 

Condensed Consolidated Balance Sheets

 

Originally

   

Restatement

         
   

Reported

   

Adjustment

   

As Restated

 
                         

Accounts receivable, net of allowance

    697,389       (216,000 )     481,389  

Total current assets

    1,295,061       (216,000 )     1,079,061  

TOTAL ASSETS

    1,603,095       (216,000 )     1,387,095  
                         

Additional paid-in-capital

    11,917,435       (92,127 )     11,825,308  

Accumulated deficit

    (11,064,096 )     (123,873 )     (11,187,969 )

Total Stockholders' Equity (Deficit)

    876,101       (216,000 )     660,101  

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

    1,603,095       (216,000 )     1,387,095  

 

Condensed Consolidated Statements of Operations (Three Months)

 

Originally

   

Restatement

         
   

Reported

   

Adjustment

   

As Restated

 
                         

Revenue

    873,976       (287,000 )     586,976  

Gross profit

    450,642       (287,000 )     163,642  

Selling, general and administrative expenses

    1,404,389       (163,127 )     1,241,262  

Loss from Operations

    (953,747 )     (123,873 )     (1,077,620 )

Net Loss

    (953,747 )     (123,873 )     (1,077,620 )

 

 

Condensed Consolidated Statements of Operations (Nine Months)

 

Originally

   

Restatement

         
   

Reported

   

Adjustment

   

As Restated

 
                         

Revenue

    1,302,217       (287,000 )     1,015,217  

Gross profit

    705,556       (287,000 )     418,556  

Selling, general and administrative expenses

    3,818,004       (163,127 )     3,654,877  

Loss from Operations

    (3,112,448 )     (123,873 )     (3,236,321 )

Net Loss

    (3,112,448 )     (123,873 )     (3,236,321 )

 

Condensed Consolidated Statements of Cash Flows

 

Originally

   

Restatement

         
   

Reported

   

Adjustment

   

As Restated

 
                         

Net Loss

    (3,112,448 )     (123,873 )     (3,236,321 )

Common stock and options issued for services

    2,656,325       (92,127 )     2,564,198  

Accounts receivable

    (617,777 )     216,000       (401,777 )

 

NOTE 3 – GOING CONCERN

 

The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. As of September 30, 2017, while the Company has a working capital surplus of $352,067, the accumulated losses from operations aggregated $11,187,969 and it continues to experience operating losses. The Company intends to fund operations through equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements through September 2018. As such, the company is attempting to secure purchase order and asset based financing to support the growth needs of the company.

 

The Company is dependent upon, among other things, obtaining additional financing to continue operations and to execute its business plan. No assurances can be made that management will be successful in pursuing any of these strategies.

 

These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

NOTE 4 – FIXED ASSETS

 

On July 22, 2017, the Company entered into a purchase agreement for a property located at 808 A South Huntington Street, Syracuse, Indiana.  The agreement stipulates a purchase price of $255,000 of which $30,000 was paid on July 22, 2017 with the balance of $225,000 due 180 days after closing.  There is no interest payable on the balance due.  The square footage of the building is approximately 2,348.  The property also includes 27 storage units generating approximately $19,000 per year rental income.  The Company closed on the property on September 1, 2017.

 

 

NOTE 5 – INTANGIBLE ASSETS

 

The Company was granted a federally registered trademark for “ZNERGY”. The cost of applying for and prosecuting this trademark was $1,845 which cost was accounted for as a non-amortizing intangible asset.

 

NOTE 6 – LOANS FROM RELATED PARTY

 

   

September 30,

2017

   

December 31,

2016

 

Loans from related party

  $ 892     $ 135,749  

 

The loan at December 31, 2016 is from B2 Opportunity Fund, LLC, a major shareholder of the Company, and is unsecured, bears no interest and is repayable on demand. This loan was repaid by the issuance of 1,809,987 shares of common stock and 1,809,987 options to purchase common stock during June 2017 (see Note 6).

 

NOTE 7 – STOCKHOLDERS’ EQUITY

 

Common Stock

 

On January 25, 2017 the Company appointed Richard Mikles as Chairman of the board of directors and issued to Mr. Mikles 3,000,000 shares of its common stock, valued at its trading price and vested immediately, and 4,000,000 options to purchase shares of common stock of the Company at a price of $0.10 per share said options vesting equally over eight quarters and having an expiration of three years from the date of issue. Concomitantly, the Company entered into a consulting agreement with Mr. Mikles to provide marketing, strategic, and organizational services to the Company. Upon execution of this consulting agreement the Company issued 2,000,000 shares of common stock, valued at its trading price and vested immediately, and 5,000,000 options to purchase shares of common stock of the Company at a price of $0.10 per share said options to vest quarterly in the amount of one option for every two dollars of revenue recognized by the Company.

 

On January 27, 2017 the Company appointed Kevin Harrington to its Board of Directors and issued 2,000,000 shares of its common stock, valued at its trading price and vested immediately, and 4,000,000 options to purchase shares of common stock of the Company at a price of $0.10 per share said options vesting equally over eight quarters and having an expiration of three years from the date of issue.

 

On February 2, 2017 the Company entered into a consulting agreement with Venture Legal Services, PLLC, to provide legal and strategic advisory services for the Company. In conjunction with the execution of this agreement, the Company granted Venture options to purchase up to 2,000,000 shares of its common stock at a price of $0.10 per share. The options have an expiration of three years from the date of issue and vest quarterly one option for every two dollars of revenue recognized by the Company.

 

On May 15, 2017, the Company entered into an employment agreement with Mr. Baker, our CEO.  Mr. Baker was granted 5,000,000 shares of common stock of the Company, valued at its trading price and vested immediately, and was granted 5,000,000 options to purchase common stock of the Company at $0.10 per share. These options have a three-year expiration and vest quarterly one option for every two dollars of revenue recognized by the Company.

 

On May 15, 2017, the Company entered into an employment agreement with Mr. Floyd, our CFO.  Mr. Floyd was granted 10,000,000 options to purchase common stock of the Company at $0.10 per share. These options have a three-year expiration and vest quarterly one option for every two dollars of revenue recognized by the Company.

 

On June 1, 2017, the Company entered into a service agreement with a provider of investor relations services. Under the agreement, the Company issued 1,000,000 shares of common stock to the provider, valued at its trading price, vesting 500,000 on June 1, 2017, 250,000 shares on October 1, 2017 and 250,000 shares on January 1, 2018.

 

 

 

On June 13, 2017, the Company entered into a service agreement with a provider of bookkeeping, accounting, payroll and human resources services.  Under the agreement, the Company issued 250,000 shares of common stock to the provider, valued at its trading price and vested immediately, and 1,000,000 options to purchase common stock of the Company at $0.10 per share.  These options have a three-year expiration and vest evenly over two years.

 

On July 10, 2017 the Company entered into an employment agreement with Ryan Smith, 60, to serve as Senior Vice President of the Company. The agreement has a term of three years, and Mr. Smith’s employment with the Company is on an at-will basis.  The agreement specifies an annual base salary of $100,000 and a performance based bonus within 45 days from the end of the Company’s fiscal year as determined by the Compensation Committee of the Board of Directors. In addition, Mr. Smith was granted 3,000,000 shares of common stock of the Company, vested immediately, and was granted 7,000,000 options to purchase common stock of the Company at $0.10 per share. The Options have a three-year expiration and vest quarterly one option for every two dollars of revenue recognized by the Company.

 

On July 13, 2017, the Company entered into a service agreement with a provider of tax services.  Under the agreement, the Company issued 100,000 shares of common stock to the provider, valued at its trading price and vested immediately, and 400,000 options to purchase common stock of the Company at $0.10 per share. These options have a three-year expiration and vest evenly over two years.

 

On July 13, 2017, the Company amended and extended a consulting agreement, originally executed on January 23, 2017, with its Chairman, Rick Mikles. Under the amended and extended agreement, the Company issued 1,600,000 shares of common stock to Mr. Mikles, valued at its trading price and vested immediately.

 

On August 31, 2017, the Company entered into an advisory agreement with Donald Herrmann of Tampa, Florida. Under the agreement, the Company issued 100,000 shares of common stock to Mr. Herrmann, valued at its trading price and vested immediately, and 900,000 options to purchase common stock of the Company at $0.10 per share. These options have a three-year expiration and vest evenly over two years.

 

On September 19, 2017 the Company appointed Jennifer Peek to its Board of Directors and as its Audit Committee Chair and issued 1,500,000 shares of its common stock, valued at its trading price and vested immediately, and 1,500,000 options to purchase shares of common stock of the Company at a price of $0.10 per share. The options vest equally over eight quarters and having an expiration of three years from the date of issue.

 

Private Offerings of Common Stock and Warrants

During the period ended June 30, 2017 the Company completed a private offering of common stock and warrants to accredited and unaccredited investors for gross proceeds of $1,119,372 which securities were offered under Regulation D, Rule 506(b) of the Securities and Exchange Act of 1933. The Company accepted subscriptions, in the aggregate, for 14,924,960 shares of common stock and one-year warrants to purchase 14,924,960 shares of common stock of which 10,600,000 shares of its common stock and 10,600,000 warrants were issued for $795,000 in cash and 4,324,960 shares of its common stock and 4,324,960 warrants were issued for $324,372 in the conversion of debt. Investors received one-year fully vested warrant to purchase up to 100% of the number of shares purchased in the offering. The warrants have an exercise price of $0.15 per share. The purchase price for each share of common stock together with the warrants was $0.075.  For the debt converted, the difference between the amount of debt converted and the fair value of the common stock and warrants issued of $519,085 has been charged to interest expense.

 

 

 

Options

 

The Company has issued and outstanding two types of options, time vesting and performance vesting.

 

Options – Time Vesting

 

There were 2,400,000 options issued and outstanding as of December 31, 2016 that vest equally over time. The following table shows the stock option activity for time vesting options during the period ended September 30, 2017:

 

   

Number of

Options

   

Weighted Average

Exercise Price

 
                 

Options outstanding at beginning of year

    2,400,000     $ 0.10  

Changes during the period:

               

Granted - at market price

    11,800,000     $ 0.10  

Exercised

    -          

Expired

    -          

Options outstanding at end of period

    14,200,000     $ 0.10  

Options exercisable at end of period

    5,204,168     $ 0.10  

 

Options issued were valued using the Black-Scholes model assuming zero dividends, a $0.10 strike price, 3-year expiration, 1.51% average risk-free rate and 255% average volatility. Costs incurred in respect of stock based compensation related to time-vested options for employees, advisors and consultants for the three and nine-month periods ended September 30, 2017 were approximately $122,000 and $295,000, respectively. Costs incurred in respect of stock based compensation related to time-vested options for employees, advisors and consultants for the three and nine-month periods ended September 30, 2016 were $-0- and $-0-, respectively.

 

Unrecognized compensation costs related to time-vested options was approximately $800,000 which is expected to be recognized ratably over approximately 22 months.

 

Options – Performance Vesting

 

There were 5,000,000 options issued and outstanding as of December 31, 2016 that vest based on Company performance with one option vesting for every two dollars of revenue, vesting quarterly. The following table shows the stock option activity for performance vesting options during the period ended September 30, 2017:

 

   

Number of

Options

   

Weighted Average

Exercise Price

 
                 

Options outstanding at beginning of year

    5,000,000     $ 0.10  

Changes during the period:

               

Granted - at market price

    30,800,000     $ 0.10  

Exercised

    -          

Expired

    -          

Options outstanding at end of period

    35,800,000     $ 0.10  

Options exercisable at end of period

    2,780,815     $ 0.10  

 

 

 

Options issued were valued using the Black-Scholes model assuming zero dividends, a $0.10 strike price, 3-year expiration, 1.62% average risk-free rate and 259% average volatility. Costs incurred in respect of stock based compensation related to performance vested options for employees, advisors and consultants for the three and nine-month periods ended September 30, 2017 were approximately $190,000 and $289,000, respectively. Costs incurred in respect of stock based compensation related to performance-vested options for employees, advisors and consultants for the three and nine-month periods ended September 30, 2016 were $-0- and $-0-, respectively.

 

Unrecognized compensation costs related to options was approximately $3,533,000 which is expected to be recognized over approximately 12 months.

 

Warrants

 

There were no warrants issued and outstanding as of December 31, 2016. The following table shows the warrant activity during the period ended September 30, 2017:

 

           

Weighted

 
   

Number

   

Average

 
   

Of

   

Exercise

 
   

Warrants

   

Price

 
                 

Warrants outstanding at beginning of year

    -          

Changes during the period:

               

Granted

    14,924,960     $ 0.15  

Exercised

    -          

Expired

    -          

Warrants outstanding at end of period

    14,924,960     $ 0.15  

Warrants exercisable at end of period

    14,924,960          

 

Warrants issued were valued using the Black-Scholes model assuming zero dividends, a $0.15 strike price, 1-year expiration, 1.49% risk-free rate and volatility of 238%. Costs incurred for warrants issued to related parties for the conversion of debt were recorded as interest expenses and were $0 and $367,662 for the three and nine months ending September 30, 2017, respectively.

 

NOTE 8 – LITIGATION

 

16(b) Litigation

On September 26, 2016, Registrant filed in the United States District Court for the Middle District of Florida a Complaint against defendants The Mazzal Trust, Nissim S. Trabelsi and Shawn Telsi (collectively the “Defendants”), seeking the disgorgement of profits obtained by Defendants and certain of their shareholder affiliates defined under Rule 16a-1(a)(1) under the Exchange Act defined below (collectively, the “Group”) through “short swing profits” in violation of Section 16(b) of the Securities Exchange Act of 1934 (the “Exchange Act”). Specifically, Registrant alleged that the Group acted under the guidance and control of the Defendants, whose individual defendants had filed forms 3 and 4 with the Securities and Exchange Commission (the “SEC”), declaring themselves to be “insiders” for the purpose of Section 16(b). The Group owned 100% of the shares of Registrant at the time that members of the group were engaged in the sale and purchase of such shares. The sales and purchases referenced all occurred within six months of other sales and purchases, subjecting Defendants to disgorge to Registrant all profits made by the Group in such sales and purchases. As detailed in paragraphs 16-22 of the Complaint, the total profits received by the Group is $1,695,689. Accordingly, Registrant has demanded the return of all such profits to Registrant plus the statutory payment of attorneys’ fees.  On August 24, 2017, the court granted the Company a default judgment against Defendants. The Company intends to vigorously pursue satisfaction of this judgment although there can be no assurance of the recovery of any funds from Defendants.

 

 

 

VStock Transfer Communications

On January 26, 2017, the Company received an email from its transfer agent, VStock Transfer, LLC, (“VStock”) informing the Company that it had been served with a Summons and Complaint (B2 Opportunity Fund (“B2”) v. Trabelsi et al. - Index No.:17-CV-10043, the “Claim”) and further stating that the Company was obligated to indemnify VStock for fees and expenses incurred in defending the Claim. The Company responded on February 24, 2017 stating that (1) we reviewed the Transfer Agent and Registrar Agreement between Mazzal and VStock dated May 20, 2014 and that in Article VI(c) of that agreement it states that indemnification will not be offered if the acts of VStock constitute bad faith or gross negligence, (2) we reviewed the lawsuit filed by B2 against VStock and others and find that VStock’s actions constitute gross negligence and perhaps bad faith, and we therefore deny indemnification of VStock relating to the Claim, and (3) should VStock take any action to seek indemnification by Znergy in any manner, Znergy will either join B2 in its lawsuit or will file an action on its own. The Company terminated its agreement with VStock. Management cannot at this time estimate what, if any, financial impact this matter will have on the Company.

 

NOTE 9 – CUSTOMER CONCENTRATION

 

During the three months ended September 30, 2017 we had one customer whose purchases accounted for substantially all of the sales.

 

At September 30, 2017, there was one customer who had an accounts receivable balance greater than 10% of our total outstanding receivable balance.

 

 

 

 

CAUTIONARY STATEMENT FOR FORWARD-LOOKING STATEMENTS

 

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  We have based these forward-looking statements on our current expectations and projections about future events, and they are applicable on as of the dates of such statement.  These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements.  In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “could,” “would,” “forecast,” “expect,” “plan,” anticipate,” believe,” estimate,” continue,” or the negative of such terms or other similar expressions.  Factors that might cause or contribute to such a discrepancy include, but are not limited to, those listed under the heading “Risk Factors” and those listed in our other SEC filings. You should not put undue reliance on any forward-looking statements.  These statements speak only as of the date of this Quarterly Report on Form 10-Q, even if subsequently made available on our website or otherwise, and we undertake no obligation to update or revise these statements to reflect events or circumstances occurring after the date of this Quarterly Report on Form 10-Q.  The following discussion should be read in conjunction with our Financial Statements and related Notes thereto included elsewhere in this report. Throughout this Quarterly Report on Form 10-Q we will refer to Znergy, Inc., together with its subsidiaries, as the “Company,” “we,” “us,” and “our.”

 

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Overview

 

The Company was formed in January 2013 as a Nevada corporation.  The original business plan of the Company was to build and sell multi-family housing projects. The Company acquired a parcel of land in Taunton, Massachusetts, from The Mazzal Trust, a trust of which the founder of the Company, Nissim Trabelsi, was the Trustee, in exchange for shares of the Company’s common stock, and began development of the project and construction of multi-family units.

 

Subsequently, on October 26, 2015, the Company acquired Global ITS, Inc., a Wyoming corporation (“Global”), and its wholly owned subsidiary, Znergy, Inc., a Florida corporation (“Znergy”), in order to expand into the Energy Efficiency (EE) marketplace, focusing on commercial lighting and green project financing.

 

On February 9, 2016, the Company agreed to sell to The Mazzal Trust the real property which the Trust had previously sold to the Company, and the Trust returned to the Company 149,950,000 of the 150,000,000 shares of the Company’s common stock owned by the Trust, which shares were cancelled. The Company is now focused solely on the EE marketplace. Both of these transactions are discussed in more detail below.

 

Restatement

 

Subsequent to the filing of the September 30, 2017 Form 10Q, the Company determined that it had made an error in its assessment of when collectability was reasonably assured for rebate revenue and should include rebate income as revenue only when it is collected by the Company. The correction to rebate revenue resulted in a reduction in the number of performance-based options issued and the charge to operations for performance-based options. The Company has determined that the correction had a material effect on the Condensed Consolidated Financial Statements for the three and nine months ended September 30, 2017.

 

Recent Developments

 

Global ITS Transaction

 

Share Exchange Agreement

 

On October 26, 2015, the Company entered into a Share Exchange Agreement (the “Agreement”) with Global ITS, Inc., a Wyoming corporation (“Global”), and the shareholders of Global, pursuant to which we exchanged 120,000,000 of our common shares (the “Company Shares”) for 24,000,000 Global common shares held by Global’s shareholders representing 100% of Global’s outstanding shares (the “Share Exchange”). The transaction was reported in, and the Agreement was filed as an exhibit to, a Current Report filed with the SEC on October 27, 2015.

 

Change in Control Transaction

 

On February 9, 2016, the Company, Nissim Trabelsi, Shawn Telsi, the Mazzal Living Trust, the majority shareholder of the Company (the “Trust”), and B2 Opportunity Fund, LLC, a Nevada limited liability company (“B2”), entered into an Amended Master Stock Purchase Agreement (the “Master Agreement”).

 

Pursuant to the Master Agreement, Mr. Trabelsi and Mr. Telsi agreed to sell all of the shares of the Company’s common stock owned by them, 45,800,000 shares and 9,500,000 shares, respectively, to B2 or B2’s designees. In connection with the Master Agreement, B2 paid $315,000 to Mr. Trabelsi for his and Mr. Telsi’s shares.

 

 

 

Also in connection with the Master Agreement, the Company agreed to sell to the Trust all of its real property with a carrying value of $1,897,000, and the Trust assumed the related party loan with a carrying value of $853,521 and accounts payable and accrued expenses with a carrying value of $24,500. In exchange, the Trust returned to the Company 149,950,000 of the 150,000,000 shares of the Company’s common stock owned by the Trust. In connection with the execution of the Master Agreement, the Company canceled the 149,950,000 shares of common stock conveyed by the Trust.

 

In connection with his sale of his and Mr. Telsi’s shares, Mr. Trabelsi appointed Christopher J. Floyd to the Board of Directors of the Company and to the Board of Directors of Command Control Center Corp. (“Command Control”), a wholly owned subsidiary of the Company. Mr. Trabelsi also appointed Mr. Floyd as the CEO, CFO, and Secretary of both the Company and of Command Control. Following Mr. Trabelsi’s appointment of Mr. Floyd to the boards of directors and as an officer of the Company and Command Control, Mr. Trabelsi resigned from all positions with the Company and with Command Control, effective immediately.

 

Results of Operations

 

The Company had revenues of $1,015,217 and $14,701 for the nine-month periods ended September 30, 2017, and September 30, 2016, respectively. The Company had revenues of $586,976 and $2,461 for the three-month periods ended September 30, 2017, and September 30, 2016, respectively. Revenues in 2017 comprise LED installation projects while revenues in 2016 consist of consulting services.  The increase in revenues is due to the increase in personnel, implementing formalized training programs, resulting in increased sales and marketing efforts.  The Company expects to continue to see increased revenue in future periods but can make no assumptions as to size of any increases or certainty thereof.

 

The Company incurred costs of revenue of $596,661 and $-0- for the nine-month periods ended September 30, 2017, and September 30, 2016, respectively. The Company incurred costs of revenue of $423,334 and $-0- for the three-month periods ended September 30, 2017, and September 30, 2016, respectively. Costs of revenue in 2017 comprise primarily LED product and installation costs, including labor and rental equipment.

 

The Company had general and administrative expenses of $3,654,877 and $373,490 for the nine-month periods ended September 30, 2017, and September 30, 2016, respectively. The Company had general and administrative expenses of $1,241,262 and $231,754 for the three-month periods ended September 30, 2017, and September 30, 2016, respectively. General and administrative expenses for the nine months ended September 30, 2017 are comprised primarily of $2,564,198 in common stock and options issued for services, $519,085 in common stock and warrants issued for interest related to the conversion of debt, $208,973 in salaries and wages, and $54,060 in legal and auditing fees. General and administrative costs for the nine months ended September 30, 2016 consisted primarily of $203,548 in consulting fees and $57,545 in legal and auditing fees.  General and administrative costs for the three months ended September 30, 2017 are comprised primarily of stock-based compensation and consulting costs of $492,748 and personnel expenses of $229,815.  General and administrative costs for the three months ended September 30, 2016 are comprised primarily of stock-based consulting costs of $166,667 and professional fees of $29,998.

 

The Company had net losses of $3,236,321 and $351,653 for the nine-month periods ended September 30, 2017 and September 30, 2016, respectively. The Company had net losses of $1,077,620 and $229,293 for the three-month periods ended September 30, 2017 and September 30, 2016, respectively.

 

Liquidity and Capital Resources

 

As of September 30, 2017, the Company had a working capital surplus of $352,067 with total current assets of $1,079,061 comprising $131,444 in cash, $481,389 in accounts receivable, $76,460 in prepaid expenses, and $389,768 in inventory, and total current liabilities of $726,994 comprising $251,131 in accounts payable, $185,588 in accrued expenses, $64,383 in customer deposits, and $225,000 in a note due February 28, 2018 for the purchase of a building. Use of cash for operating activities totaled $743,730 primarily for funding an increase in accounts receivable of $401,777 and inventory of $197,663. The primary source of funds was loans from related parties in the amount of $226,750 and proceeds from the offering of our common stock in the amount of $795,000.

 

Going Concern Discussion

 

For the year ending December 31, 2016, our auditors issued an explanatory note regarding our ability to continue as a going concern. This means that our auditors believe there is substantial doubt that we can continue as an on-going business for the next 12 months. Accordingly, we must raise cash from sources other than operations. Our only other source for cash at this time is investments by third parties and loans from others in our company.

 

 

 

As of September 30, 2017, management believes that generating revenues in the next six to twelve months is important to support our planned ongoing operations. However, we cannot guarantee that we will generate such growth. If we do not generate sufficient cash flow to support our operations over the next six to twelve months, we will need to raise additional capital by issuing capital stock in exchange for cash or obtain loans in order to continue as a going concern. There are no formal or informal agreements to attain such financing. We cannot assure you that any financing can be obtained or, if obtained, that it will be on reasonable terms. Without realization of additional capital, it would be unlikely for us to continue as a going concern. No adjustments have been made to the financial statements to reflect our doubt to continue as a going concern.

 

At the time of this filing we have three officers: David Baker, our CEO; Christopher Floyd, our CFO and Secretary; and Ryan Smith, our Senior Vice President. Mr. Baker and Mr. Floyd are responsible for our managerial and organizational structure which will include preparation and implementation of disclosure and accounting controls under the Sarbanes Oxley Act of 2002. When these controls are implemented, Mr. Baker and Mr. Floyd, together with any other executive officers in place at that time, will be responsible for the administration of these controls.

 

Our management does not expect to incur significant research and development costs in 2017.

 

On July 22, 2017, the Company entered into a purchase agreement for a property located at 808 A South Huntington Street, Syracuse, Indiana. The agreement stipulates a purchase price of $255,000 of which $30,000 was paid on July 22, 2017 with the balance of $225,000 due 180 days after closing.  There is no interest payable on the balance due. The square footage of the building itself is approximately 2,348.  The property also includes 27 storage units generating approximately $19,000 per year rental income. The Company closed on the property on September 1, 2017.

 

Critical Accounting Policies

 

The Company’s most critical accounting policies include (a) use of estimates, (b) revenue recognition, (c) going concern, and (d) share based payments. The methods, estimates and judgments the Company uses in applying these most critical accounting policies have a significant impact on the results the Company reports in its financial statements.

 

(a) Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts or revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company’s significant estimates, judgments and assumptions used in these consolidated financial statements include those related to revenues, accounts receivable and related allowances, contingencies, and the fair values of stock-based compensation. These estimates, judgments, and assumptions are reviewed periodically and the effects of material revisions in estimates are reflected in the financial statements prospectively from the date of any change in estimate. 

 

(b) Revenue Recognition

 

The Company accounts for revenue using the “completed contract method” in accordance with ASC 605-35. Under this method, contract costs are accumulated as deferred assets and billings and/or cash receipts are recorded to a deferred revenue liability account during the contract period, but no revenues, costs or profits are recognized in operations until the completion of the contract. Costs include direct material, direct labor, subcontract labor and allocable indirect costs. All unallocable indirect costs and corporate general and administrative costs are charged to the periods as incurred. However, in the event a loss on a contract is foreseen, the Company will recognize the loss when such loss is determined. The deferred asset (accumulated contract costs) in excess of the deferred liability (billings and/or cash received) is classified as a current asset under “Costs in excess of billings on uncompleted contracts.” The deferred liability (billings and/or cash received) in excess of the deferred asset (accumulated contract costs) is classified under current liabilities as “Billings in excess of costs on uncompleted contracts.” A contract is considered complete when accepted by the customer. The Company quotes its customers the total costs of product installation and materials minus the expected rebates, if any, from a given utility.  For projects larger than $10,000, rebates must be pre-approved by the utility.  Rebate revenue is recognized when the rebate is received by the Company.

 

(c) Going Concern

 

The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. As of September 30, 2017, while the Company has a working capital surplus of $568,067, the accumulated losses from operations aggregated $11,064,096 and it continues to experience operating losses. The Company intends to fund operations through equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements through September 2018.

 

 

 

The Company is dependent upon, among other things, obtaining additional financing to continue operations and to execute its business plan. In response to these problems, management intends to raise additional funds through public or private placement offerings. No assurances can be made that management will be successful in pursuing any of these strategies.

 

These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

(d) Share-Based Payments

 

Certain employees, officers, directors, and consultants of the Company participate in incentive plans that provide for granting stock options and performance-based awards. Time based stock options generally vest in equal increments over a two -year period and expire on the third anniversary following the date of grant. Performance-based stock options vest once the applicable performance conditions are satisfied.

 

The Company recognizes stock-based compensation for equity awards granted to employees, officers, directors and consultants as compensation and benefits expense in the consolidated statements of operations. The fair value of stock options is estimated using a Black-Scholes valuation model on the date of grant. Stock-based compensation is recognized over the requisite service period of the individual awards, which generally equals the vesting period. For performance-based stock options, compensation is recognized once the applicable performance condition is satisfied.

 

The Company recognizes stock-based compensation for equity awards granted as selling, general and administrative expense in the consolidated statements of operations.

 

The fair value of restricted stock awards is equal to the closing price of the Company’s stock on the date of grant multiplied by the number of shares awarded. Stock-based compensation is recognized over the requisite service period of the individual awards, which generally equals the vesting period.

 

Recently Issued Accounting Pronouncements

 

In May 2014, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update No. 2014-09, Revenue From Contracts With Customers, or ASU 2014-09. Pursuant to this update, an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The amendments in this update are currently effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period, and are to be applied retrospectively, or on a modified retrospective basis. Early application is not permitted. In July 2015, the FASB approved a one-year deferral of the effective date for annual reporting periods beginning after December 15, 2017 with early adoption permitted for annual periods beginning after December 15, 2016. We are currently evaluating the impact of adopting ASU 2014-09 on our consolidated financial statements.

 

In August 2014, FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, or ASU 2014-15. ASU 2014-15 explicitly requires a company’s management to assess an entity’s ability to continue as a going concern, and to provide related footnote disclosures in certain circumstances. The new standard became effective in the first annual period ending after December 15, 2016. Management has evaluated the potential impact of the adoption of this standard and believes its adoption has no material impact on our consolidated statements of financial position, results of operations or cash flows.

 

In July 2015, the FASB issued ASU No. 2015-11, (“ASU 2015-11”), Inventory (Topic 330): Simplifying the Measurement of Inventory. ASU 2015-11 requires an entity to measure in scope inventory at the lower of cost and net realizable value. The amendment does not apply to inventory that is measured using the last-in, first-out or the retail inventory method. For public entities, ASU 2015-11 is effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years, and is to be applied prospectively. Management has evaluated the impact of the adoption of this standard and believes its adoption has no material impact on our consolidated statements of financial position, results of operations or cash flows.

 

 

 

On February 24, 2016, the FASB issued ASU No. 2016-02, Leases, requiring lessees to recognize a right-of-use asset and a lease liability on the balance sheet for all leases with the exception of short-term leases. For lessees, leases will continue to be classified as either operating or finance leases in the income statement. Lessor accounting is similar to the current model but updated to align with certain changes to the lessee model. Lessors will continue to classify leases as operating, direct financing or sales-type leases. The effective date of the new standard for public companies is for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption is permitted. The new standard must be adopted using a modified retrospective transition and requires application of the new guidance at the beginning of the earliest comparative period presented. We are currently evaluating the effect that the updated standard will have on our consolidated financial statements and related disclosures.

 

On March 30, 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting, which simplifies various aspects related to the accounting and presentation of share-based payments. The amendments require entities to record all tax effects related to share-based payments at settlement or expiration through the income statement and the windfall tax benefit to be recorded when it arises, subject to normal valuation allowance considerations. All tax-related cash flows resulting from share-based payments are required to be reported as operating activities in the statement of cash flows. The updates relating to the income tax effects of the share-based payments including the cash flow presentation may be adopted either prospectively or retrospectively. Further, the amendments allow the entities to make an accounting policy election to either estimate forfeitures or recognize forfeitures as they occur. If an election is made, the change to recognize forfeitures as they occur must be adopted using a modified retrospective approach with a cumulative effect adjustment recorded to opening retained earnings. The effective date of the new standard for public companies is for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years. Early adoption is permitted. Adoption of this standard did not have any effect on the Company’s financial statements.

 

The Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

 

Off-Balance Sheet Arrangements

 

None.

 

 

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

Not applicable.

 

Item 4. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

Disclosure controls and procedures are the controls and other procedures that are designed to provide reasonable assurance that information required to be disclosed by the issuer in the reports that it files or submits under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.  Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including the principal executive and principal financial officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.  Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

 

We have carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer of the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act as of the end of the period covered by this Quarterly Report.

 

Based upon that evaluation we have concluded that our disclosure controls and procedures were ineffective as of the end of the period covered by this report due to a material weakness in our internal control over financial reporting, which is described below.

 

Our management identified the following material weaknesses which are indicative of many small companies with small staff: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines.

 

Although we plan to take steps to enhance and improve the design of our internal control over financial reporting, we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we hope to implement the following changes during our fiscal year ending December 31, 2017: (i) appoint additional qualified personnel to address inadequate segregation of duties and ineffective risk management; and (ii) adopt sufficient written policies and procedures for accounting and financial reporting. The remediation efforts set out in (i) and (ii) are largely dependent upon our securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may be adversely affected in a material manner.

 

Changes in Internal Control over Financial Reporting

 

There was no change in the Company’s internal control over financial reporting that occurred during the Company’s most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

 

 

 

PART II.                 OTHER INFORMATION

 

Item 1. Legal Proceedings

 

Other than described below, we know of no pending legal proceedings to which we are a party which are material or potentially material, either individually or in the aggregate. We are from time to time, during the normal course of our business operations, subject to various litigation claims and legal disputes. We do not believe that the ultimate disposition of any of these matters will have a material adverse effect on our consolidated financial position, results of operations or liquidity.

 

On September 26, 2016, the Company filed in the United States District Court for the Middle District of Florida a Complaint against defendants The Mazzal Trust, Nissim S. Trabelsi and Shawn Telsi (collectively the “Defendants”), seeking the disgorgement of profits obtained by Defendants and certain of their shareholder affiliates defined under Rule 16a-1(a)(1) under the Exchange Act defined below (collectively, the “Group”) through “short swing profits” in violation of Section 16(b) of the Securities Exchange Act of 1934 (the “Exchange Act”). Specifically, the Company alleged that the Group acted under the guidance and control of the Defendants, whose individual defendants had filed forms 3 and 4 with the Securities and Exchange Commission (the “SEC”, declaring themselves to be “insiders” for the purpose of Section 16(b). The Group owned 100% of the shares of the Company at the time that members of the group were engaged in the sale and purchase of such shares. The sales and purchases referenced all occurred with six months of other sales and purchases, subjecting Defendants to disgorge to the Company all profits made by the Group in such sales and purchases. As detailed in paragraphs 16-22 of the Complaint, the total profits received by the Group is $1,695,689. Accordingly, the Company has demanded the return of all such profits to Registrant plus the statutory payment of attorneys’ fees.  On August 24, 2017, the court granted the Company a default judgment against Defendants.  The Company intends to vigorously pursue satisfaction of this judgment although there can be no assurance of the recovery of any funds from Defendants.

 

On January 26, 2017, the Company received an email from its transfer agent at that time, VStock Transfer, LLC, (“VStock”) informing the Company that it had been served with a Summons and Complaint (B2 Opportunity Fund (“B2”) v. Trabelsi et al. - Index No.:17-CV-10043, the “Claim”) and further stating that the Company was obligated to indemnify VStock for fees and expenses incurred in defending the Claim.  The Company responded on February 24, 2017 stating that (1) we reviewed the Transfer Agent and Registrar Agreement between Mazzal and VStock dated May 20, 2014 and that in Article VI(c) of that agreement it states that indemnification will not be offered if the acts of VStock constitute bad faith or gross negligence, (2) we reviewed the lawsuit filed by B2 against VStock and others and find that VStock’s actions constitute gross negligence and perhaps bad faith, and we therefore deny indemnification of VStock relating to the Claim, and (3) should VStock take any action to seek indemnification by Znergy in any manner, Znergy will either join B2 in its lawsuit or will file an action on its own. The Company terminated its agreement with VStock. Management cannot at this time estimate what, if any, financial impact this matter will have on the Company.

 

Item 5. Other Information.

 

Amendment of Articles of Incorporation; Name Change; Status

 

On May 31, 2016, the Company filed a definitive information statement on Schedule 14C to provide information to the Company’s stockholders relating to an action taken by the holders of a majority of the outstanding shares of common stock to amend the Company’s articles of incorporation to change the name of the Company from Mazzal Holding Company to Znergy, Inc. The Board of Directors of the Company approved the amendment and name change and recommended the amendment to the shareholders of the Company. On May 13, 2016, the holders of 94,498,335 shares of the Company’s common stock, constituting approximately 52.48% of the outstanding shares, approved the amendment and the name change. On July 15, 2016, the Company filed its Amended and Restated Articles of Incorporation with the State of Nevada to effectuate the name change.

 

 

 

 

 

Item 6. Exhibits

 

(a)          Exhibits

 

Exhibit No.

 

Description

3.1

 

Articles of Incorporation for BIDC (previously filed as an exhibit to the Company’s registration statement on Form S-1, filed with the Commission on June 10, 2013)

3.2

 

Bylaws of BIDC (previously filed as an exhibit to the Company’s registration statement on Form S-1, filed with the Commission on June 10, 2013)

3.3

 

Amended and Restated Articles of Incorporation, as filed with the Nevada Secretary of State on July 15, 2016 (previously filed as an exhibit to the Company’s information statement on Form Def 14C, filed with the Commission on May 31, 2016)

10.1

 

Share Exchange Agreement, dated as of October 26, 2015 (previously filed as an exhibit to the Company’s Current Report on Form 8-K, filed with the Commission on  October 27, 2015)

10.2

 

Master Stock Purchase Agreement (previously filed as an exhibit to the Company’s Current Report on Form 8-K, filed with the Commission on February 12, 2016)

10.3

 

Employment Agreement with Dave Baker (previously filed as an exhibit to the Company’s Current Report on Form 8-K, filed with the Commission on October 4, 2016)

10.4

 

Employment Agreement with Dave Baker (previously filed as an exhibit to the Company’s Current Report on Form 8-K, filed with the Commission on May 19, 2017)

10.5

 

Employment Agreement with Christopher Floyd (previously filed as an exhibit to the Company’s Current Report on Form 8-K, filed with the Commission on May 19, 2017)

10.6

 

Employment Agreement with Ryan Smith (previously filed as an exhibit to the Company’s Current Report on Form 8-K, filed with the Commission on July 12, 2017)

31.1

 

Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a).

32.1

 

Certification of Chief Executive Officer pursuant to 18 U.S.C. §1350 as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002.

101 INS

 

XBRL Instance Document*

101 SCH

 

XBRL Schema Document*

101 CAL

 

XBRL Calculation Linkbase Document*

101 DEF

 

XBRL Definition Linkbase Document*

101 LAB

 

XBRL Labels Linkbase Document*

101 PRE

 

XBRL Presentation Linkbase Document*

 

 

 

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

ZNERGY, INC.

 

By: /s/ Dave Baker

 

 

Dave Baker

Chief Executive Officer and Director

(Principal Executive Officer)

Date: August 10, 2018

 

 

 

 

 

 

 

 

25

 

 

 

EX-31.1 2 ex_120982.htm EXHIBIT 31.1 ex_120982.htm

 

Exhibit 31.1

 

Certification of the Chief Executive Officer

Pursuant to Rule 13a-14(a) or Rule 15d-14(a)

 

I, Dave Baker, certify that:

 

1.

I have reviewed this Quarterly Report on Form 10-Q of Znergy, Inc.;

 

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

 

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

 

b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

 

c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of the annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

 

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

 

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

 

Dated: August 10, 2018

By:

/s/ Dave Baker

 

 

 

Dave Baker

 

 

Chief Executive Officer

 

 

 

EX-32.1 3 ex_120983.htm EXHIBIT 32.1 ex_120983.htm

 

Exhibit 32.1

 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report on Form 10-Q of Znergy, Inc. (the “Company”) for the three and nine month periods ending September 30, 2017, as filed with the Securities and Exchange Commission as of and on the date hereof (the “Report”), Dave Baker, Chief Executive Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

 

 

(1)

The report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

 

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

 

Dated: August 10, 2018 

By:

/s/ Dave Baker

 

 

 

Dave Baker

 

 

Chief Executive Officer

 

This certification accompanies each Report pursuant to § 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of §18 of the Securities Exchange Act of 1934, as amended.

 

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

 

 

 

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This Form 10-Q/A is being filed to restate the unaudited Condensed Consolidated Financial Statements and related Management's Discussion and Analysis of Financial Condition and Results of Operations for the three and nine months ended September 30, 2017. Subsequent to the filing of the September 30, 2017 Form 10-Q, the Company determined that it had made an error in its assessment of when collectability was reasonably assured for rebate revenue. The Company has determined that the change had a material effect on the Condensed Consolidated Financial Statements for the three and nine Months ended September 30, 2017. The change in accounting was properly reflected in the Company's Form 10-K filed with the SEC. The Company's Chief Executive Officer has also provided new certifications as required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002. The certifications are included in the Form 10-Q/A as Exhibits 31.1 and 32.1. For the convenience of the reader, this Form 10-Q/A sets forth the information in the Original Report in its entirety, as such information is modified and superseded where necessary to reflect the restatement and related revisions. Except as provided above, this Form 10-Q/A does not reflect events occurring after the filing of the Original Report and does not amend or otherwise update any information in the Original Report. Accordingly, this Form 10-Q/A should be read in conjunction with our filings with the SEC subsequent to the date on which we filed the Original Report with the SEC. --12-31 227624960 true 0001568875 Yes No Smaller Reporting Company No 2017 Q3 2017-09-30 <div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; "> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;"><b>NOTE 1 &#x2013; NATURE OF BUSINESS AND BASIS OF PRESENTATION</b></p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">Znergy, Inc., (formerly Mazzal Holding Corp., formerly Boston Investment and Development Corp.) is a Nevada corporation (the &#x201c;Company&#x201d;), incorporated on January 23, 2013. The original business plan of the Company was the construction and management of multi-family home developments and the subsequent sale thereof.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">On October 26, 2015 the Company acquired Global ITS, Inc. and its wholly owned subsidiary, Znergy, Inc. in order to expand into the Energy Efficiency (EE) marketplace, focusing on commercial lighting and green project financing. On February 9, 2016, the Company agreed to sell to the Mazzal Trust the real property which the Trust had previously sold to the Company and the Trust returned to the Company 149,950,000 of the 150,000,000 shares of the Company&#x2019;s common stock owned by the Trust.&#xa0; The Company is now focused solely on the EE marketplace with an emphasis on LED retrofitting and relamping.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;"><b>Basis of Presentation</b></p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">The accompanying interim condensed consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America (&#x201c;GAAP&#x201d;) for interim financial information and the instructions to Form 10-Q and do not include all of the information and footnotes required by GAAP for complete financial statements.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">Certain information and footnote disclosures normally included in the Company&#x2019;s annual audited consolidated financial statements and accompanying notes have been condensed or omitted in these interim condensed consolidated financial statements. Accordingly, the unaudited condensed consolidated financial statements included herein should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2016, as filed with the Securities and Exchange Commission (&#x201c;SEC&#x201d;) on Form 10-K.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">The results of operations presented in this quarterly report are not necessarily indicative of the results of operations that may be expected for any future periods. In the opinion of management, these unaudited condensed consolidated financial statements include all adjustments and accruals, consisting only of normal recurring adjustments that are necessary for a fair presentation of the results of all interim periods reported herein.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;"><b>Consolidation</b></p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions have been eliminated in consolidation.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;"><b>Revenue Recognition</b></p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">The Company accounts for revenue using the &#x201c;completed contract method&#x201d; in accordance with ASC 605-35. Under this method, contract costs are accumulated as deferred assets and billings and/or cash receipts are recorded to a deferred revenue liability account during the contract period, but no revenues, costs or profits are recognized in operations until the completion of the contract. Costs include direct material, direct labor, subcontract labor and allocable indirect costs. All unallocable indirect costs and corporate general and administrative costs are charged to the periods as incurred. However, in the event a loss on a contract is foreseen, the Company will recognize the loss when such loss is determined. The deferred asset (accumulated contract costs) in excess of the deferred liability (billings and/or cash received) is classified as a current asset under &#x201c;Costs in excess of billings on uncompleted contracts.&#x201d; The deferred liability (billings and/or cash received) in excess of the deferred asset (accumulated contract costs) is classified under current liabilities as &#x201c;Billings in excess of costs on uncompleted contracts.&#x201d; A contract is considered complete when accepted by the customer. The Company quotes its customers the total costs of product installation and materials minus the expected rebates, if any, from a given utility.&#xa0; For projects larger than $10,000, rebates must be pre-approved by the utility.&#xa0; Rebate revenue is recognized when&#xa0;the rebate is received by the Company.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;"><b>Reclassification</b></p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">Certain prior year amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations. Reclassifications have also been made to the Consolidated Condensed Statement of Cash Flows for the for the nine months ending September 30, 2016, for consistency with the current period presentation. This change in classification does not materially affect previously reported cash flows from operations, investing or financing activities in the Consolidated Condensed Statement of Cash Flows, and had no effect on the previously reported Consolidated Condensed Statement of Operations for any period.</p><br/></div> 149950000 150000000 <div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; "> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;"><b>NOTE 2 &#x2013; RESTATEMENT</b></p><br/><p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: justify;">Subsequent to the filing of the September 30, 2017 Form 10Q, the Company determined that it had made an error in its assessment of when collectability was reasonably assured for rebate revenue and should include rebate income as revenue only &#xa0;when it is collected by the Company. The correction to rebate revenue resulted in a reduction in the number of performance-based options issued and the charge to operations for performance-based options. The Company has determined that the correction had a material effect on the Condensed Consolidated Financial Statements for the three and nine months ended September 30, 2017.</p><br/><p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: justify;">As a result, the Company has restated its unaudited Condensed Consolidated Financial Statements for the three and nine months ended September 30, 2017. The following table summarizes the restatement changes made to the Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Operations, and Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2017, previously filed:</p><br/><table border="0" cellpadding="0" cellspacing="0" class="finTable" style="width: 100%; font-size: 10pt; font-family: &quot;Times New Roman&quot;, Times, serif; text-indent: 0px;"> <tr style="vertical-align: bottom;"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; width: 55%;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;"><b>Condensed Consolidated Balance Sheets</b></p> </td> <td id="new_id-1208" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1209" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b><b><b>Originally</b></b></b></b></p> </td> <td id="new_id-1210" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1211" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1212" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b><b><b>Restatement</b></b></b></b></p> </td> <td id="new_id-1213" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1214" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1215" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"><b>&#xa0;</b></td> <td id="new_id-1216" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"><b>&#xa0;</b></td> <td id="new_id-1217" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"><b>&#xa0;</b></td> </tr> <tr style="vertical-align: bottom;"> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1218" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1219" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b><b><b>Reported</b></b></b></b></p> </td> <td id="new_id-1220" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;">&#xa0;</td> <td id="new_id-1221" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1222" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b><b><b>Adjustment</b></b></b></b></p> </td> <td id="new_id-1223" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;">&#xa0;</td> <td id="new_id-1224" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1225" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b><b><b>As Restated</b></b></b></b></p> </td> <td id="new_id-1226" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;">&#xa0;</td> </tr> <tr style="vertical-align: bottom;"> <td>&#xa0;</td> <td id="new_id-1227">&#xa0;</td> <td id="new_id-1228">&#xa0;</td> <td id="new_id-1229">&#xa0;</td> <td id="new_id-1230">&#xa0;</td> <td id="new_id-1231">&#xa0;</td> <td id="new_id-1232">&#xa0;</td> <td id="new_id-1233">&#xa0;</td> <td id="new_id-1234">&#xa0;</td> <td id="new_id-1235">&#xa0;</td> <td id="new_id-1236">&#xa0;</td> <td id="new_id-1237">&#xa0;</td> <td id="new_id-1238">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left; text-indent: 18pt;">Accounts receivable, net of allowance</p> </td> <td id="new_id-1239" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1240" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1241" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">697,389</td> <td id="new_id-1242" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1243" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1244" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1245" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(216,000</td> <td id="new_id-1246" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> <td id="new_id-1247" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1248" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1249" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">481,389</td> <td id="new_id-1250" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left; text-indent: 18pt;">Total current assets</p> </td> <td id="new_id-1251" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1252" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1253" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">1,295,061</td> <td id="new_id-1254" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1255" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1256" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1257" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(216,000</td> <td id="new_id-1258" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> <td id="new_id-1259" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1260" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1261" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">1,079,061</td> <td id="new_id-1262" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left; text-indent: 18pt;">TOTAL ASSETS</p> </td> <td id="new_id-1263" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1264" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1265" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">1,603,095</td> <td id="new_id-1266" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1267" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1268" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1269" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(216,000</td> <td id="new_id-1270" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> <td id="new_id-1271" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1272" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1273" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">1,387,095</td> <td id="new_id-1274" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td>&#xa0;</td> <td id="new_id-1275">&#xa0;</td> <td id="new_id-1276">&#xa0;</td> <td id="new_id-1277">&#xa0;</td> <td id="new_id-1278">&#xa0;</td> <td id="new_id-1279">&#xa0;</td> <td id="new_id-1280">&#xa0;</td> <td id="new_id-1281">&#xa0;</td> <td id="new_id-1282">&#xa0;</td> <td id="new_id-1283">&#xa0;</td> <td id="new_id-1284">&#xa0;</td> <td id="new_id-1285">&#xa0;</td> <td id="new_id-1286">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left; text-indent: 18pt;">Additional paid-in-capital</p> </td> <td id="new_id-1287" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1288" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1289" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">11,917,435</td> <td id="new_id-1290" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1291" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1292" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1293" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(92,127</td> <td id="new_id-1294" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> <td id="new_id-1295" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1296" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1297" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">11,825,308</td> <td id="new_id-1298" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left; text-indent: 18pt;">Accumulated deficit</p> </td> <td id="new_id-1299" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1300" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1301" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(11,064,096</td> <td id="new_id-1302" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> <td id="new_id-1303" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1304" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1305" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(123,873</td> <td id="new_id-1306" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> <td id="new_id-1307" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1308" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1309" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(11,187,969</td> <td id="new_id-1310" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left; text-indent: 18pt;">Total Stockholders' Equity (Deficit)</p> </td> <td id="new_id-1311" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1312" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1313" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">876,101</td> <td id="new_id-1314" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1315" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1316" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1317" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(216,000</td> <td id="new_id-1318" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> <td id="new_id-1319" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1320" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1321" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">660,101</td> <td id="new_id-1322" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left; text-indent: 18pt;">TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)</p> </td> <td id="new_id-1323" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1324" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1325" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">1,603,095</td> <td id="new_id-1326" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1327" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1328" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1329" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(216,000</td> <td id="new_id-1330" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> <td id="new_id-1331" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1332" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1333" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">1,387,095</td> <td id="new_id-1334" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> </tr> </table><br/><table border="0" cellpadding="0" cellspacing="0" class="finTable" style="width: 100%; font-size: 10pt; font-family: &quot;Times New Roman&quot;, Times, serif; text-indent: 0px;"> <tr style="vertical-align: bottom;"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; width: 55%;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;"><b>Condensed Consolidated Statements of Operations (Three Months)</b></p> </td> <td id="new_id-1335" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1336" style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: center;"><b><b>Originally</b></b></p> </td> <td id="new_id-1337" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1338" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1339" style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: center;"><b><b>Restatement</b></b></p> </td> <td id="new_id-1340" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1341" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1342" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"><b>&#xa0;</b></td> <td id="new_id-1343" style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"><b>&#xa0;</b></td> <td id="new_id-1344" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"><b>&#xa0;</b></td> </tr> <tr style="vertical-align: bottom;"> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1345" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1346" style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: center;"><b><b>Reported</b></b></p> </td> <td id="new_id-1347" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;">&#xa0;</td> <td id="new_id-1348" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1349" style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: center;"><b><b>Adjustment</b></b></p> </td> <td id="new_id-1350" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;">&#xa0;</td> <td id="new_id-1351" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1352" style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: center;"><b><b>As Restated</b></b></p> </td> <td id="new_id-1353" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;">&#xa0;</td> </tr> <tr style="vertical-align: bottom;"> <td>&#xa0;</td> <td id="new_id-1354">&#xa0;</td> <td id="new_id-1355">&#xa0;</td> <td id="new_id-1356">&#xa0;</td> <td id="new_id-1357">&#xa0;</td> <td id="new_id-1358">&#xa0;</td> <td id="new_id-1359">&#xa0;</td> <td id="new_id-1360">&#xa0;</td> <td id="new_id-1361">&#xa0;</td> <td id="new_id-1362">&#xa0;</td> <td id="new_id-1363">&#xa0;</td> <td id="new_id-1364">&#xa0;</td> <td id="new_id-1365">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left; text-indent: 18pt;">Revenue</p> </td> <td id="new_id-1366" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1367" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1368" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">873,976</td> <td id="new_id-1369" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1370" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1371" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1372" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(287,000</td> <td id="new_id-1373" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> <td id="new_id-1374" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1375" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1376" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">586,976</td> <td id="new_id-1377" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left; text-indent: 18pt;">Gross profit</p> </td> <td id="new_id-1378" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1379" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1380" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">450,642</td> <td id="new_id-1381" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1382" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1383" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1384" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(287,000</td> <td id="new_id-1385" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> <td id="new_id-1386" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1387" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1388" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">163,642</td> <td id="new_id-1389" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left; text-indent: 18pt;">Selling, general and administrative expenses</p> </td> <td id="new_id-1390" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1391" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1392" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">1,404,389</td> <td id="new_id-1393" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1394" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1395" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1396" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(163,127</td> <td id="new_id-1397" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> <td id="new_id-1398" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1399" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1400" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">1,241,262</td> <td id="new_id-1401" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left; text-indent: 18pt;">Loss from Operations</p> </td> <td id="new_id-1402" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1403" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1404" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(953,747</td> <td id="new_id-1405" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> <td id="new_id-1406" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1407" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1408" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(123,873</td> <td id="new_id-1409" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> <td id="new_id-1410" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1411" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1412" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(1,077,620</td> <td id="new_id-1413" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left; text-indent: 18pt;">Net Loss</p> </td> <td id="new_id-1414" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1415" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1416" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(953,747</td> <td id="new_id-1417" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> <td id="new_id-1418" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1419" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1420" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(123,873</td> <td id="new_id-1421" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> <td id="new_id-1422" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1423" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1424" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(1,077,620</td> <td id="new_id-1425" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> </tr> </table><br/><table border="0" cellpadding="0" cellspacing="0" class="finTable" style="width: 100%; font-size: 10pt; font-family: &quot;Times New Roman&quot;, Times, serif; text-indent: 0px;"> <tr style="vertical-align: bottom;"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; width: 55%;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;"><b>Condensed Consolidated Statements of Operations (Nine Months)</b></p> </td> <td id="new_id-1426" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1427" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: center;"><b><b>Originally</b></b></p> </td> <td id="new_id-1428" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1429" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1430" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: center;"><b><b>Restatement</b></b></p> </td> <td id="new_id-1431" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1432" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1433" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"><b>&#xa0;</b></td> <td id="new_id-1434" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"><b>&#xa0;</b></td> <td id="new_id-1435" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"><b>&#xa0;</b></td> </tr> <tr style="vertical-align: bottom;"> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1436" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1437" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: center;"><b><b>Reported</b></b></p> </td> <td id="new_id-1438" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;">&#xa0;</td> <td id="new_id-1439" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1440" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: center;"><b><b>Adjustment</b></b></p> </td> <td id="new_id-1441" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;">&#xa0;</td> <td id="new_id-1442" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1443" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: center;"><b><b>As Restated</b></b></p> </td> <td id="new_id-1444" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;">&#xa0;</td> </tr> <tr style="vertical-align: bottom;"> <td>&#xa0;</td> <td id="new_id-1445">&#xa0;</td> <td id="new_id-1446">&#xa0;</td> <td id="new_id-1447">&#xa0;</td> <td id="new_id-1448">&#xa0;</td> <td id="new_id-1449">&#xa0;</td> <td id="new_id-1450">&#xa0;</td> <td id="new_id-1451">&#xa0;</td> <td id="new_id-1452">&#xa0;</td> <td id="new_id-1453">&#xa0;</td> <td id="new_id-1454">&#xa0;</td> <td id="new_id-1455">&#xa0;</td> <td id="new_id-1456">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left; text-indent: 18pt;">Revenue</p> </td> <td id="new_id-1457" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1458" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1459" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">1,302,217</td> <td id="new_id-1460" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1461" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1462" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1463" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(287,000</td> <td id="new_id-1464" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> <td id="new_id-1465" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1466" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1467" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">1,015,217</td> <td id="new_id-1468" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left; text-indent: 18pt;">Gross profit</p> </td> <td id="new_id-1469" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1470" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1471" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">705,556</td> <td id="new_id-1472" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1473" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1474" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1475" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(287,000</td> <td id="new_id-1476" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> <td id="new_id-1477" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1478" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1479" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">418,556</td> <td id="new_id-1480" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left; text-indent: 18pt;">Selling, general and administrative expenses</p> </td> <td id="new_id-1481" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1482" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1483" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">3,818,004</td> <td id="new_id-1484" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1485" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1486" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1487" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(163,127</td> <td id="new_id-1488" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> <td id="new_id-1489" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1490" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1491" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">3,654,877</td> <td id="new_id-1492" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left; text-indent: 18pt;">Loss from Operations</p> </td> <td id="new_id-1493" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1494" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1495" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(3,112,448</td> <td id="new_id-1496" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> <td id="new_id-1497" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1498" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1499" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(123,873</td> <td id="new_id-1500" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> <td id="new_id-1501" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1502" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1503" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(3,236,321</td> <td id="new_id-1504" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left; text-indent: 18pt;">Net Loss</p> </td> <td id="new_id-1505" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1506" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1507" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(3,112,448</td> <td id="new_id-1508" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> <td id="new_id-1509" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1510" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1511" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(123,873</td> <td id="new_id-1512" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> <td id="new_id-1513" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1514" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1515" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(3,236,321</td> <td id="new_id-1516" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> </tr> </table><br/><table border="0" cellpadding="0" cellspacing="0" class="finTable" style="width: 100%; font-size: 10pt; font-family: &quot;Times New Roman&quot;, Times, serif; text-indent: 0px;"> <tr style="vertical-align: bottom;"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; width: 55%;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;"><b>Condensed Consolidated Statements of Cash Flows</b></p> </td> <td id="new_id-1517" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1518" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: center;"><b><b>Originally</b></b></p> </td> <td id="new_id-1519" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1520" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1521" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: center;"><b><b>Restatement</b></b></p> </td> <td id="new_id-1522" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1523" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1524" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"><b>&#xa0;</b></td> <td id="new_id-1525" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"><b>&#xa0;</b></td> <td id="new_id-1526" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"><b>&#xa0;</b></td> </tr> <tr style="vertical-align: bottom;"> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1527" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1528" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: center;"><b><b>Reported</b></b></p> </td> <td id="new_id-1529" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;">&#xa0;</td> <td id="new_id-1530" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1531" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: center;"><b><b>Adjustment</b></b></p> </td> <td id="new_id-1532" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;">&#xa0;</td> <td id="new_id-1533" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1534" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: center;"><b><b>As Restated</b></b></p> </td> <td id="new_id-1535" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;">&#xa0;</td> </tr> <tr style="vertical-align: bottom;"> <td>&#xa0;</td> <td id="new_id-1536">&#xa0;</td> <td id="new_id-1537">&#xa0;</td> <td id="new_id-1538">&#xa0;</td> <td id="new_id-1539">&#xa0;</td> <td id="new_id-1540">&#xa0;</td> <td id="new_id-1541">&#xa0;</td> <td id="new_id-1542">&#xa0;</td> <td id="new_id-1543">&#xa0;</td> <td id="new_id-1544">&#xa0;</td> <td id="new_id-1545">&#xa0;</td> <td id="new_id-1546">&#xa0;</td> <td id="new_id-1547">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left; text-indent: 18pt;">Net Loss</p> </td> <td id="new_id-1548" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1549" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1550" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(3,112,448</td> <td id="new_id-1551" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> <td id="new_id-1552" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1553" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1554" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(123,873</td> <td id="new_id-1555" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> <td id="new_id-1556" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1557" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1558" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(3,236,321</td> <td id="new_id-1559" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left; text-indent: 18pt;">Common stock and options issued for services</p> </td> <td id="new_id-1560" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1561" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1562" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">2,656,325</td> <td id="new_id-1563" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1564" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1565" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1566" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(92,127</td> <td id="new_id-1567" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> <td id="new_id-1568" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1569" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1570" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">2,564,198</td> <td id="new_id-1571" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left; text-indent: 18pt;">Accounts receivable</p> </td> <td id="new_id-1572" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1573" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1574" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(617,777</td> <td id="new_id-1575" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> <td id="new_id-1576" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1577" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1578" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">216,000</td> <td id="new_id-1579" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1580" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1581" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1582" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(401,777</td> <td id="new_id-1583" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> </tr> </table><br/></div> <div style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; "> As a result, the Company has restated its unaudited Condensed Consolidated Financial Statements for the three and nine months ended September 30, 2017. The following table summarizes the restatement changes made to the Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Operations, and Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2017, previously filed:<br /><br /><table border="0" cellpadding="0" cellspacing="0" class="finTable" style="width: 100%; font-size: 10pt; font-family: &quot;Times New Roman&quot;, Times, serif; text-indent: 0px;"> <tr style="vertical-align: bottom;"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; width: 55%;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;"><b>Condensed Consolidated Balance Sheets</b></p> </td> <td id="new_id-1208" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1209" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b><b><b>Originally</b></b></b></b></p> </td> <td id="new_id-1210" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1211" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1212" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b><b><b>Restatement</b></b></b></b></p> </td> <td id="new_id-1213" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1214" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1215" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"><b>&#xa0;</b></td> <td id="new_id-1216" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"><b>&#xa0;</b></td> <td id="new_id-1217" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"><b>&#xa0;</b></td> </tr> <tr style="vertical-align: bottom;"> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1218" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1219" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b><b><b>Reported</b></b></b></b></p> </td> <td id="new_id-1220" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;">&#xa0;</td> <td id="new_id-1221" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1222" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b><b><b>Adjustment</b></b></b></b></p> </td> <td id="new_id-1223" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;">&#xa0;</td> <td id="new_id-1224" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1225" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b><b><b>As Restated</b></b></b></b></p> </td> <td id="new_id-1226" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;">&#xa0;</td> </tr> <tr style="vertical-align: bottom;"> <td>&#xa0;</td> <td id="new_id-1227">&#xa0;</td> <td id="new_id-1228">&#xa0;</td> <td id="new_id-1229">&#xa0;</td> <td id="new_id-1230">&#xa0;</td> <td id="new_id-1231">&#xa0;</td> <td id="new_id-1232">&#xa0;</td> <td id="new_id-1233">&#xa0;</td> <td id="new_id-1234">&#xa0;</td> <td id="new_id-1235">&#xa0;</td> <td id="new_id-1236">&#xa0;</td> <td id="new_id-1237">&#xa0;</td> <td id="new_id-1238">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left; text-indent: 18pt;">Accounts receivable, net of allowance</p> </td> <td id="new_id-1239" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1240" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1241" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">697,389</td> <td id="new_id-1242" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1243" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1244" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1245" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(216,000</td> <td id="new_id-1246" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> <td id="new_id-1247" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1248" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1249" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">481,389</td> <td id="new_id-1250" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left; text-indent: 18pt;">Total current assets</p> </td> <td id="new_id-1251" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1252" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1253" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">1,295,061</td> <td id="new_id-1254" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1255" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1256" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1257" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(216,000</td> <td id="new_id-1258" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> <td id="new_id-1259" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1260" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1261" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">1,079,061</td> <td id="new_id-1262" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left; text-indent: 18pt;">TOTAL ASSETS</p> </td> <td id="new_id-1263" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1264" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1265" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">1,603,095</td> <td id="new_id-1266" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1267" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1268" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1269" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(216,000</td> <td id="new_id-1270" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> <td id="new_id-1271" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1272" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1273" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">1,387,095</td> <td id="new_id-1274" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td>&#xa0;</td> <td id="new_id-1275">&#xa0;</td> <td id="new_id-1276">&#xa0;</td> <td id="new_id-1277">&#xa0;</td> <td id="new_id-1278">&#xa0;</td> <td id="new_id-1279">&#xa0;</td> <td id="new_id-1280">&#xa0;</td> <td id="new_id-1281">&#xa0;</td> <td id="new_id-1282">&#xa0;</td> <td id="new_id-1283">&#xa0;</td> <td id="new_id-1284">&#xa0;</td> <td id="new_id-1285">&#xa0;</td> <td id="new_id-1286">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left; text-indent: 18pt;">Additional paid-in-capital</p> </td> <td id="new_id-1287" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1288" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1289" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">11,917,435</td> <td id="new_id-1290" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1291" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1292" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1293" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(92,127</td> <td id="new_id-1294" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> <td id="new_id-1295" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1296" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1297" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">11,825,308</td> <td id="new_id-1298" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left; text-indent: 18pt;">Accumulated deficit</p> </td> <td id="new_id-1299" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1300" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1301" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(11,064,096</td> <td id="new_id-1302" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> <td id="new_id-1303" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1304" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1305" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(123,873</td> <td id="new_id-1306" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> <td id="new_id-1307" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1308" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1309" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(11,187,969</td> <td id="new_id-1310" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left; text-indent: 18pt;">Total Stockholders' Equity (Deficit)</p> </td> <td id="new_id-1311" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1312" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1313" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">876,101</td> <td id="new_id-1314" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1315" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1316" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1317" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(216,000</td> <td id="new_id-1318" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> <td id="new_id-1319" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1320" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1321" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">660,101</td> <td id="new_id-1322" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left; text-indent: 18pt;">TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)</p> </td> <td id="new_id-1323" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1324" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1325" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">1,603,095</td> <td id="new_id-1326" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1327" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1328" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1329" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(216,000</td> <td id="new_id-1330" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> <td id="new_id-1331" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1332" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1333" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">1,387,095</td> <td id="new_id-1334" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> </tr> </table><table border="0" cellpadding="0" cellspacing="0" class="finTable" style="width: 100%; font-size: 10pt; font-family: &quot;Times New Roman&quot;, Times, serif; text-indent: 0px;"> <tr style="vertical-align: bottom;"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; width: 55%;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;"><b>Condensed Consolidated Statements of Operations (Three Months)</b></p> </td> <td id="new_id-1335" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1336" style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: center;"><b><b>Originally</b></b></p> </td> <td id="new_id-1337" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1338" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1339" style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: center;"><b><b>Restatement</b></b></p> </td> <td id="new_id-1340" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1341" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1342" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"><b>&#xa0;</b></td> <td id="new_id-1343" style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"><b>&#xa0;</b></td> <td id="new_id-1344" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"><b>&#xa0;</b></td> </tr> <tr style="vertical-align: bottom;"> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1345" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1346" style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: center;"><b><b>Reported</b></b></p> </td> <td id="new_id-1347" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;">&#xa0;</td> <td id="new_id-1348" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1349" style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: center;"><b><b>Adjustment</b></b></p> </td> <td id="new_id-1350" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;">&#xa0;</td> <td id="new_id-1351" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1352" style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: center;"><b><b>As Restated</b></b></p> </td> <td id="new_id-1353" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;">&#xa0;</td> </tr> <tr style="vertical-align: bottom;"> <td>&#xa0;</td> <td id="new_id-1354">&#xa0;</td> <td id="new_id-1355">&#xa0;</td> <td id="new_id-1356">&#xa0;</td> <td id="new_id-1357">&#xa0;</td> <td id="new_id-1358">&#xa0;</td> <td id="new_id-1359">&#xa0;</td> <td id="new_id-1360">&#xa0;</td> <td id="new_id-1361">&#xa0;</td> <td id="new_id-1362">&#xa0;</td> <td id="new_id-1363">&#xa0;</td> <td id="new_id-1364">&#xa0;</td> <td id="new_id-1365">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left; text-indent: 18pt;">Revenue</p> </td> <td id="new_id-1366" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1367" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1368" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">873,976</td> <td id="new_id-1369" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1370" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1371" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1372" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(287,000</td> <td id="new_id-1373" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> <td id="new_id-1374" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1375" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1376" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">586,976</td> <td id="new_id-1377" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left; text-indent: 18pt;">Gross profit</p> </td> <td id="new_id-1378" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1379" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1380" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">450,642</td> <td id="new_id-1381" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1382" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1383" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1384" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(287,000</td> <td id="new_id-1385" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> <td id="new_id-1386" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1387" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1388" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">163,642</td> <td id="new_id-1389" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left; text-indent: 18pt;">Selling, general and administrative expenses</p> </td> <td id="new_id-1390" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1391" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1392" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">1,404,389</td> <td id="new_id-1393" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1394" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1395" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1396" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(163,127</td> <td id="new_id-1397" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> <td id="new_id-1398" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1399" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1400" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">1,241,262</td> <td id="new_id-1401" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left; text-indent: 18pt;">Loss from Operations</p> </td> <td id="new_id-1402" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1403" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1404" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(953,747</td> <td id="new_id-1405" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> <td id="new_id-1406" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1407" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1408" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(123,873</td> <td id="new_id-1409" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> <td id="new_id-1410" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1411" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1412" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(1,077,620</td> <td id="new_id-1413" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left; text-indent: 18pt;">Net Loss</p> </td> <td id="new_id-1414" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1415" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1416" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(953,747</td> <td id="new_id-1417" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> <td id="new_id-1418" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1419" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1420" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(123,873</td> <td id="new_id-1421" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> <td id="new_id-1422" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1423" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1424" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(1,077,620</td> <td id="new_id-1425" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> </tr> </table><table border="0" cellpadding="0" cellspacing="0" class="finTable" style="width: 100%; font-size: 10pt; font-family: &quot;Times New Roman&quot;, Times, serif; text-indent: 0px;"> <tr style="vertical-align: bottom;"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; width: 55%;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;"><b>Condensed Consolidated Statements of Operations (Nine Months)</b></p> </td> <td id="new_id-1426" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1427" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: center;"><b><b>Originally</b></b></p> </td> <td id="new_id-1428" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1429" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1430" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: center;"><b><b>Restatement</b></b></p> </td> <td id="new_id-1431" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1432" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1433" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"><b>&#xa0;</b></td> <td id="new_id-1434" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"><b>&#xa0;</b></td> <td id="new_id-1435" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"><b>&#xa0;</b></td> </tr> <tr style="vertical-align: bottom;"> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1436" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1437" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: center;"><b><b>Reported</b></b></p> </td> <td id="new_id-1438" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;">&#xa0;</td> <td id="new_id-1439" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1440" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: center;"><b><b>Adjustment</b></b></p> </td> <td id="new_id-1441" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;">&#xa0;</td> <td id="new_id-1442" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1443" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: center;"><b><b>As Restated</b></b></p> </td> <td id="new_id-1444" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;">&#xa0;</td> </tr> <tr style="vertical-align: bottom;"> <td>&#xa0;</td> <td id="new_id-1445">&#xa0;</td> <td id="new_id-1446">&#xa0;</td> <td id="new_id-1447">&#xa0;</td> <td id="new_id-1448">&#xa0;</td> <td id="new_id-1449">&#xa0;</td> <td id="new_id-1450">&#xa0;</td> <td id="new_id-1451">&#xa0;</td> <td id="new_id-1452">&#xa0;</td> <td id="new_id-1453">&#xa0;</td> <td id="new_id-1454">&#xa0;</td> <td id="new_id-1455">&#xa0;</td> <td id="new_id-1456">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left; text-indent: 18pt;">Revenue</p> </td> <td id="new_id-1457" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1458" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1459" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">1,302,217</td> <td id="new_id-1460" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1461" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1462" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1463" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(287,000</td> <td id="new_id-1464" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> <td id="new_id-1465" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1466" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1467" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">1,015,217</td> <td id="new_id-1468" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left; text-indent: 18pt;">Gross profit</p> </td> <td id="new_id-1469" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1470" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1471" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">705,556</td> <td id="new_id-1472" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1473" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1474" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1475" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(287,000</td> <td id="new_id-1476" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> <td id="new_id-1477" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1478" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1479" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">418,556</td> <td id="new_id-1480" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left; text-indent: 18pt;">Selling, general and administrative expenses</p> </td> <td id="new_id-1481" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1482" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1483" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">3,818,004</td> <td id="new_id-1484" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1485" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1486" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1487" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(163,127</td> <td id="new_id-1488" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> <td id="new_id-1489" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1490" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1491" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">3,654,877</td> <td id="new_id-1492" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left; text-indent: 18pt;">Loss from Operations</p> </td> <td id="new_id-1493" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1494" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1495" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(3,112,448</td> <td id="new_id-1496" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> <td id="new_id-1497" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1498" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1499" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(123,873</td> <td id="new_id-1500" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> <td id="new_id-1501" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1502" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1503" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(3,236,321</td> <td id="new_id-1504" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left; text-indent: 18pt;">Net Loss</p> </td> <td id="new_id-1505" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1506" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1507" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(3,112,448</td> <td id="new_id-1508" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> <td id="new_id-1509" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1510" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1511" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(123,873</td> <td id="new_id-1512" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> <td id="new_id-1513" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1514" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1515" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(3,236,321</td> <td id="new_id-1516" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> </tr> </table><table border="0" cellpadding="0" cellspacing="0" class="finTable" style="width: 100%; font-size: 10pt; font-family: &quot;Times New Roman&quot;, Times, serif; text-indent: 0px;"> <tr style="vertical-align: bottom;"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; width: 55%;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;"><b>Condensed Consolidated Statements of Cash Flows</b></p> </td> <td id="new_id-1517" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1518" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: center;"><b><b>Originally</b></b></p> </td> <td id="new_id-1519" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1520" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1521" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: center;"><b><b>Restatement</b></b></p> </td> <td id="new_id-1522" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1523" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1524" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"><b>&#xa0;</b></td> <td id="new_id-1525" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"><b>&#xa0;</b></td> <td id="new_id-1526" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"><b>&#xa0;</b></td> </tr> <tr style="vertical-align: bottom;"> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1527" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1528" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: center;"><b><b>Reported</b></b></p> </td> <td id="new_id-1529" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;">&#xa0;</td> <td id="new_id-1530" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1531" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: center;"><b><b>Adjustment</b></b></p> </td> <td id="new_id-1532" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;">&#xa0;</td> <td id="new_id-1533" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1534" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: center;"><b><b>As Restated</b></b></p> </td> <td id="new_id-1535" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;">&#xa0;</td> </tr> <tr style="vertical-align: bottom;"> <td>&#xa0;</td> <td id="new_id-1536">&#xa0;</td> <td id="new_id-1537">&#xa0;</td> <td id="new_id-1538">&#xa0;</td> <td id="new_id-1539">&#xa0;</td> <td id="new_id-1540">&#xa0;</td> <td id="new_id-1541">&#xa0;</td> <td id="new_id-1542">&#xa0;</td> <td id="new_id-1543">&#xa0;</td> <td id="new_id-1544">&#xa0;</td> <td id="new_id-1545">&#xa0;</td> <td id="new_id-1546">&#xa0;</td> <td id="new_id-1547">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left; text-indent: 18pt;">Net Loss</p> </td> <td id="new_id-1548" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1549" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1550" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(3,112,448</td> <td id="new_id-1551" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> <td id="new_id-1552" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1553" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1554" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(123,873</td> <td id="new_id-1555" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> <td id="new_id-1556" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1557" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1558" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(3,236,321</td> <td id="new_id-1559" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left; text-indent: 18pt;">Common stock and options issued for services</p> </td> <td id="new_id-1560" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1561" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1562" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">2,656,325</td> <td id="new_id-1563" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1564" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1565" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1566" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(92,127</td> <td id="new_id-1567" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> <td id="new_id-1568" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1569" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1570" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">2,564,198</td> <td id="new_id-1571" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: left; text-indent: 18pt;">Accounts receivable</p> </td> <td id="new_id-1572" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1573" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1574" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(617,777</td> <td id="new_id-1575" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> <td id="new_id-1576" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1577" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1578" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">216,000</td> <td id="new_id-1579" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1580" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1581" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1582" style="width: 12%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">(401,777</td> <td id="new_id-1583" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">)</td> </tr> </table></div> 697389 -216000 1295061 -216000 1603095 -216000 11917435 -92127 -11064096 -123873 876101 -216000 1603095 -216000 873976 -287000 450642 -287000 1404389 -163127 -953747 -123873 -953747 -123873 1302217 -287000 705556 -287000 3818004 -163127 -3112448 -123873 -3112448 -123873 2656325 -92127 617777 -216000 <div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; "> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;"><b>NOTE </b><b>3</b><b> &#x2013; GOING CONCERN</b></p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. As&#xa0;of September 30, 2017, while the Company has a working capital surplus of $352,067, the accumulated losses from operations aggregated $11,187,969 and it continues to experience operating losses. The Company intends to fund operations through equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements through September 2018. As such, the company is attempting to secure purchase order and asset based financing to support the growth needs of the company.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">The Company is dependent upon, among other things, obtaining additional financing to continue operations and to execute its business plan. No assurances can be made that management will be successful in pursuing any of these strategies.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">These factors, among others, raise substantial doubt about the Company&#x2019;s ability to continue as a going concern. The accompanying condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.</p><br/></div> -352067 <div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; "> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;"><b>NOTE </b><b>4</b><b> &#x2013; FIXED ASSETS</b></p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">On July 22, 2017, the Company entered into a purchase agreement for a property located at 808 A South Huntington Street, Syracuse, Indiana.&#xa0; The agreement stipulates a purchase price of $255,000 of which $30,000 was paid on July 22, 2017 with the balance of $225,000 due 180 days after closing.&#xa0; There is no interest payable on the balance due.&#xa0; The square footage of the building is approximately 2,348.&#xa0; The property also includes 27 storage units generating approximately $19,000 per year rental income.&#xa0; The Company closed on the property on September 1, 2017.</p><br/></div> 255000 30000 225000 2348 27 19000 <div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; "> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;"><b>NOTE&#xa0;</b><b>5</b><b> &#x2013; INTANGIBLE ASSETS</b></p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">The Company was granted a federally registered trademark for &#x201c;ZNERGY&#x201d;. The cost of applying for and prosecuting this trademark was $1,845 which cost was accounted for as a non-amortizing intangible asset.</p><br/></div> 1845 <div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; "> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;"><b>NOTE&#xa0;</b><b>6</b><b> &#x2013; LOANS FROM RELATED PARTY</b></p><br/><table border="0" cellpadding="0" cellspacing="0" class="finTable" style="margin-right: 10%; margin-left: 10%; width: 80%; font-size: 10pt; font-family: &quot;Times New Roman&quot;, Times, serif; text-indent: 0px;"> <tr style="vertical-align: bottom;"> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1584" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1585" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b>September 30, </b></b></p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b>2017</b></b></p> </td> <td id="new_id-1586" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;">&#xa0;</td> <td id="new_id-1587" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1588" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b>December 31, </b></b></p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b>2016</b></b></p> </td> <td id="new_id-1589" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; width: 62%;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;">Loans from related party</p> </td> <td id="new_id-1590" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1591" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td> <td id="new_id-1592" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">892</td> <td id="new_id-1593" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 3px; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1594" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1595" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td> <td id="new_id-1596" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">135,749</td> <td id="new_id-1597" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 3px; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> </tr> </table><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">The loan at December 31, 2016 is from B2 Opportunity Fund, LLC, a major shareholder of the Company, and is unsecured, bears no interest and is repayable on demand. This loan was repaid by the issuance of 1,809,987 shares of common stock and 1,809,987 options to purchase common stock during June 2017 (see Note 6).</p><br/></div> 1809987 1809987 <div style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; "> <table border="0" cellpadding="0" cellspacing="0" class="finTable" style="margin-right: 10%; margin-left: 10%; width: 80%; font-size: 10pt; font-family: &quot;Times New Roman&quot;, Times, serif; text-indent: 0px;"> <tr style="vertical-align: bottom;"> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1584" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1585" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b>September 30, </b></b></p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b>2017</b></b></p> </td> <td id="new_id-1586" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;">&#xa0;</td> <td id="new_id-1587" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1588" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b>December 31, </b></b></p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b>2016</b></b></p> </td> <td id="new_id-1589" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; width: 62%;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;">Loans from related party</p> </td> <td id="new_id-1590" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1591" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td> <td id="new_id-1592" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">892</td> <td id="new_id-1593" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 3px; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1594" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1595" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">$</td> <td id="new_id-1596" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 3px double rgb(0, 0, 0);">135,749</td> <td id="new_id-1597" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 3px; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> </tr> </table></div> 892 135749 <div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; "> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;"><b>NOTE&#xa0;</b><b>7</b><b> &#x2013; STOCKHOLDERS&#x2019; EQUITY</b></p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;"><b>Common Stock</b></p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">On January 25, 2017 the Company appointed Richard Mikles as Chairman of the board of directors and issued to Mr. Mikles 3,000,000 shares of its common stock, valued at its trading price and vested immediately, and 4,000,000 options to purchase shares of common stock of the Company at a price of $0.10 per share said options vesting equally over eight quarters and having an expiration of three years from the date of issue. Concomitantly, the Company entered into a consulting agreement with Mr. Mikles to provide marketing, strategic, and organizational services to the Company. Upon execution of this consulting agreement the Company issued 2,000,000 shares of common stock, valued at its trading price and vested immediately, and 5,000,000 options to purchase shares of common stock of the Company at a price of $0.10 per share said options to vest quarterly in the amount of one option for every two dollars of revenue recognized by the Company.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">On January 27, 2017 the Company appointed Kevin Harrington to its Board of Directors and issued 2,000,000 shares of its common stock, valued at its trading price and vested immediately, and 4,000,000 options to purchase shares of common stock of the Company at a price of $0.10 per share said options vesting equally over eight quarters and having an expiration of three years from the date of issue.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt 0.2pt;text-align:justify;">On February 2, 2017 the Company entered into a consulting agreement with Venture Legal Services, PLLC, to provide legal and strategic advisory services for the Company. In conjunction with the execution of this agreement, the Company granted Venture options to purchase up to 2,000,000 shares of its common stock at a price of $0.10 per share. The options have an expiration of three years from the date of issue and vest quarterly one option for every two dollars of revenue recognized by the Company.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">On May 15, 2017, the Company entered into an employment agreement with Mr. Baker, our CEO.&#xa0; Mr. Baker was granted 5,000,000 shares of common stock of the Company, valued at its trading price and vested immediately, and was granted 5,000,000 options to purchase common stock of the Company at $0.10 per share. These options have a three-year expiration and vest quarterly one option for every two dollars of revenue recognized by the Company.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">On May 15, 2017, the Company entered into an employment agreement with Mr. Floyd, our CFO.&#xa0; Mr. Floyd was granted 10,000,000 options to purchase common stock of the Company at $0.10 per share. These options have a three-year expiration and vest quarterly one option for every two dollars of revenue recognized by the Company.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">On June 1, 2017, the Company entered into a service agreement with a provider of investor relations services. Under the agreement, the Company issued 1,000,000 shares of common stock to the provider, valued at its trading price, vesting 500,000 on June 1, 2017, 250,000 shares on October 1, 2017 and 250,000 shares on January 1, 2018.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">On June 13, 2017, the Company entered into a service agreement with a provider of bookkeeping, accounting, payroll and human resources services.&#xa0; Under the agreement, the Company issued 250,000 shares of common stock to the provider, valued at its trading price and vested immediately, and 1,000,000 options to purchase common stock of the Company at $0.10 per share.&#xa0; These options have a three-year expiration and vest evenly over two years.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">On July 10, 2017 the Company entered into an employment agreement with Ryan Smith, 60, to serve as Senior Vice President of the Company. The agreement has a term of three years, and Mr. Smith&#x2019;s employment with the Company is on an at-will basis.&#xa0; The agreement specifies an annual base salary of $100,000 and a performance based bonus within 45 days from the end of the Company&#x2019;s fiscal year as determined by the Compensation Committee of the Board of Directors. In addition, Mr. Smith was granted 3,000,000 shares of common stock of the Company, vested immediately, and was granted 7,000,000 options to purchase common stock of the Company at $0.10 per share. The Options have a three-year expiration and vest quarterly one option for every two dollars of revenue recognized by the Company.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">On July 13, 2017, the Company entered into a service agreement with a provider of tax services.&#xa0; Under the agreement, the Company issued 100,000 shares of common stock to the provider, valued at its trading price and vested immediately, and 400,000 options to purchase common stock of the Company at $0.10 per share. These options have a three-year expiration and vest evenly over two years.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">On July 13, 2017, the Company amended and extended a consulting agreement, originally executed on January 23, 2017, with its Chairman, Rick Mikles. Under the amended and extended agreement, the Company issued 1,600,000 shares of common stock to Mr. Mikles, valued at its trading price and vested immediately.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">On August 31, 2017, the Company entered into an advisory agreement with Donald Herrmann of Tampa, Florida. Under the agreement, the Company issued 100,000 shares of common stock to Mr. Herrmann, valued at its trading price and vested immediately, and 900,000 options to purchase common stock of the Company at $0.10 per share. These options have a three-year expiration and vest evenly over two years.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">On September 19, 2017 the Company appointed Jennifer Peek to its Board of Directors and as its Audit Committee Chair and issued 1,500,000 shares of its common stock, valued at its trading price and vested immediately, and 1,500,000 options to purchase shares of common stock of the Company at a price of $0.10 per share. The options vest equally over eight quarters and having an expiration of three years from the date of issue.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;"><font style="text-decoration:underline">Private Offerings of Common Stock and Warrants</font></p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">During the period ended June 30, 2017 the Company completed a private offering of common stock and warrants to accredited and unaccredited investors for gross proceeds of $1,119,372 which securities were offered under Regulation D, Rule 506(b) of the Securities and Exchange Act of 1933. The Company accepted subscriptions, in the aggregate, for 14,924,960 shares of common stock and one-year warrants to purchase 14,924,960 shares of common stock of which 10,600,000 shares of its common stock and 10,600,000 warrants were issued for $795,000 in cash and 4,324,960 shares of its common stock and 4,324,960 warrants were issued for $324,372 in the conversion of debt. Investors received one-year fully vested warrant to purchase up to 100% of the number of shares purchased in the offering. The warrants have an exercise price of $0.15 per share. The purchase price for each share of common stock together with the warrants was $0.075.&#xa0; For the debt converted, the difference between the amount of debt converted and the fair value of the common stock and warrants issued of $519,085 has been charged to interest expense.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;"><b>Options</b></p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;">The Company has issued and outstanding two types of options, time vesting and performance vesting.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;"><font style="text-decoration:underline"><i>Options &#x2013; Time Vesting</i></font></p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;">There were 2,400,000 options issued and outstanding as of December 31, 2016 that vest equally over time. The following table shows the stock option activity for time vesting options during the period ended September 30, 2017:</p><br/><table border="0" cellpadding="0" cellspacing="0" class="finTable" style="margin-right: 10%; margin-left: 10%; width: 80%; font-size: 10pt; font-family: &quot;Times New Roman&quot;, Times, serif; text-indent: 0px;"> <tr style="vertical-align: bottom;"> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1598" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1599" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b>Number of</b></b></p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b>Options</b></b></p> </td> <td id="new_id-1600" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;">&#xa0;</td> <td id="new_id-1601" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1602" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b>Weighted Average</b></b></p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b>Exercise Price</b></b></p> </td> <td id="new_id-1603" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;">&#xa0;</td> </tr> <tr style="vertical-align: bottom;"> <td>&#xa0;</td> <td id="new_id-1604">&#xa0;</td> <td id="new_id-1605">&#xa0;</td> <td id="new_id-1606">&#xa0;</td> <td id="new_id-1607">&#xa0;</td> <td id="new_id-1608">&#xa0;</td> <td id="new_id-1609">&#xa0;</td> <td id="new_id-1610">&#xa0;</td> <td id="new_id-1611">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; width: 62%;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;">Options outstanding at beginning of year</p> </td> <td id="new_id-1612" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1613" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1614" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">2,400,000</td> <td id="new_id-1615" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1616" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1617" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">$</td> <td id="new_id-1618" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">0.10</td> <td id="new_id-1619" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;">Changes during the period:</p> </td> <td id="new_id-1620" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1621" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1622" style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1623" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1624" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1625" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1626" style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1627" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">Granted - at market price</p> </td> <td id="new_id-1628" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1629" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1630" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">11,800,000</td> <td id="new_id-1631" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1632" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1633" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">$</td> <td id="new_id-1634" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">0.10</td> <td id="new_id-1635" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">Exercised</p> </td> <td id="new_id-1636" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1637" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1638" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">-</td> <td id="new_id-1639" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1640" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1641" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1642" style="text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1643" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">Expired</p> </td> <td id="new_id-1644" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1645" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);">&#xa0;</td> <td id="new_id-1646" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">-</td> <td id="new_id-1647" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1648" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1649" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);">&#xa0;</td> <td id="new_id-1650" style="text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);">&#xa0;</td> <td id="new_id-1651" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;">Options outstanding at end of period</p> </td> <td id="new_id-1652" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1653" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);">&#xa0;</td> <td id="new_id-1654" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">14,200,000</td> <td id="new_id-1655" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1656" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1657" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">$</td> <td id="new_id-1658" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">0.10</td> <td id="new_id-1659" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;">Options exercisable at end of period</p> </td> <td id="new_id-1660" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1661" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1662" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">5,204,168</td> <td id="new_id-1663" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1664" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1665" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">$</td> <td id="new_id-1666" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">0.10</td> <td id="new_id-1667" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> </tr> </table><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">Options issued were valued using the Black-Scholes model assuming zero dividends, a $0.10 strike price, 3-year expiration, 1.51% average risk-free rate and 255% average volatility. Costs incurred in respect of stock based compensation related to time-vested options for employees, advisors and consultants for the three and nine-month periods ended September 30, 2017 were approximately $122,000 and $295,000, respectively. Costs incurred in respect of stock based compensation related to time-vested options for employees, advisors and consultants for the three and nine-month periods ended September 30, 2016 were $-0- and $-0-, respectively.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">Unrecognized compensation costs related to time-vested options was approximately $800,000 which is expected to be recognized ratably over approximately 22 months.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;"><font style="text-decoration:underline"><i>Options &#x2013; Performance Vesting</i></font></p><br/><p style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin: 0pt; text-align: justify;">There were 5,000,000 options issued and outstanding as of December 31, 2016 that vest based on Company performance with one option vesting for every two dollars of revenue, vesting quarterly. The following table shows the stock option activity for performance vesting options during the period ended September 30, 2017:</p><br/><table border="0" cellpadding="0" cellspacing="0" class="finTable" style="margin-right: 10%; margin-left: 10%; width: 80%; font-size: 10pt; font-family: &quot;Times New Roman&quot;, Times, serif; text-indent: 0px;"> <tr style="vertical-align: bottom;"> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1668" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1669" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b>Number of</b></b></p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b>Options</b></b></p> </td> <td id="new_id-1670" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;">&#xa0;</td> <td id="new_id-1671" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1672" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b>Weighted Average</b></b></p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b>Exercise Price</b></b></p> </td> <td id="new_id-1673" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;">&#xa0;</td> </tr> <tr style="vertical-align: bottom;"> <td>&#xa0;</td> <td id="new_id-1674">&#xa0;</td> <td id="new_id-1675">&#xa0;</td> <td id="new_id-1676">&#xa0;</td> <td id="new_id-1677">&#xa0;</td> <td id="new_id-1678">&#xa0;</td> <td id="new_id-1679">&#xa0;</td> <td id="new_id-1680">&#xa0;</td> <td id="new_id-1681">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; width: 62%;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;">Options outstanding at beginning of year</p> </td> <td id="new_id-1682" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1683" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1684" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">5,000,000</td> <td id="new_id-1685" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1686" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1687" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">$</td> <td id="new_id-1688" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">0.10</td> <td id="new_id-1689" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;">Changes during the period:</p> </td> <td id="new_id-1690" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1691" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1692" style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1693" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1694" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1695" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1696" style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1697" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">Granted - at market price</p> </td> <td id="new_id-1698" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1699" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1700" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">30,800,000</td> <td id="new_id-1701" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1702" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1703" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">$</td> <td id="new_id-1704" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">0.10</td> <td id="new_id-1705" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">Exercised</p> </td> <td id="new_id-1706" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1707" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1708" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">-</td> <td id="new_id-1709" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1710" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1711" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1712" style="text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1713" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">Expired</p> </td> <td id="new_id-1714" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1715" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);">&#xa0;</td> <td id="new_id-1716" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">-</td> <td id="new_id-1717" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1718" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1719" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);">&#xa0;</td> <td id="new_id-1720" style="text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);">&#xa0;</td> <td id="new_id-1721" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;">Options outstanding at end of period</p> </td> <td id="new_id-1722" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1723" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);">&#xa0;</td> <td id="new_id-1724" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">35,800,000</td> <td id="new_id-1725" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1726" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1727" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">$</td> <td id="new_id-1728" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">0.10</td> <td id="new_id-1729" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;">Options exercisable at end of period</p> </td> <td id="new_id-1730" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1731" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1732" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">2,780,815</td> <td id="new_id-1733" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1734" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1735" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">$</td> <td id="new_id-1736" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">0.10</td> <td id="new_id-1737" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> </tr> </table><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">Options issued were valued using the Black-Scholes model assuming zero dividends, a $0.10 strike price, 3-year expiration, 1.62% average risk-free rate and 259% average volatility. Costs incurred in respect of stock based compensation related to performance vested options for employees, advisors and consultants for the three and nine-month periods ended September 30, 2017 were approximately $190,000 and $289,000, respectively. Costs incurred in respect of stock based compensation related to performance-vested options for employees, advisors and consultants for the three and nine-month periods ended September 30, 2016 were $-0- and $-0-, respectively.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">Unrecognized compensation costs related to options was approximately $3,533,000 which is expected to be recognized over approximately 12 months.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;"><b>Warrants</b></p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">There were no warrants issued and outstanding as of December 31, 2016. The following table shows the warrant activity during the period ended September 30, 2017:</p><br/><table border="0" cellpadding="0" cellspacing="0" class="finTable" style="margin-right: 10%; margin-left: 10%; width: 80%; font-size: 10pt; font-family: &quot;Times New Roman&quot;, Times, serif; text-indent: 0px;"> <tr style="vertical-align: bottom;"> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1738" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1739" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"><b>&#xa0;</b></td> <td id="new_id-1740" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"><b>&#xa0;</b></td> <td id="new_id-1741" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"><b>&#xa0;</b></td> <td id="new_id-1742" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1743" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b>Weighted</b></b></p> </td> <td id="new_id-1744" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> </tr> <tr style="vertical-align: bottom;"> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1745" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1746" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b>Number</b></b></p> </td> <td id="new_id-1747" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1748" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1749" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b>Average</b></b></p> </td> <td id="new_id-1750" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> </tr> <tr style="vertical-align: bottom;"> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1751" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1752" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b>Of</b></b></p> </td> <td id="new_id-1753" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1754" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1755" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b>Exercise</b></b></p> </td> <td id="new_id-1756" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> </tr> <tr style="vertical-align: bottom;"> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1757" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1758" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b>Warrants</b></b></p> </td> <td id="new_id-1759" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;">&#xa0;</td> <td id="new_id-1760" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1761" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b>Price</b></b></p> </td> <td id="new_id-1762" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;">&#xa0;</td> </tr> <tr style="vertical-align: bottom;"> <td>&#xa0;</td> <td id="new_id-1763">&#xa0;</td> <td id="new_id-1764">&#xa0;</td> <td id="new_id-1765">&#xa0;</td> <td id="new_id-1766">&#xa0;</td> <td id="new_id-1767">&#xa0;</td> <td id="new_id-1768">&#xa0;</td> <td id="new_id-1769">&#xa0;</td> <td id="new_id-1770">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; width: 62%;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;">Warrants outstanding at beginning of year</p> </td> <td id="new_id-1771" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1772" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1773" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">-</td> <td id="new_id-1774" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1775" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1776" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1777" style="text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1778" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;">Changes during the period:</p> </td> <td id="new_id-1779" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1780" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1781" style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1782" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1783" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1784" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1785" style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1786" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">Granted</p> </td> <td id="new_id-1787" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1788" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1789" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">14,924,960</td> <td id="new_id-1790" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1791" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1792" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">$</td> <td id="new_id-1793" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">0.15</td> <td id="new_id-1794" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">Exercised</p> </td> <td id="new_id-1795" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1796" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1797" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">-</td> <td id="new_id-1798" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1799" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1800" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1801" style="text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1802" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">Expired</p> </td> <td id="new_id-1803" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1804" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);">&#xa0;</td> <td id="new_id-1805" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">-</td> <td id="new_id-1806" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1807" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1808" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);">&#xa0;</td> <td id="new_id-1809" style="text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);">&#xa0;</td> <td id="new_id-1810" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;">Warrants outstanding at end of period</p> </td> <td id="new_id-1811" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1812" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);">&#xa0;</td> <td id="new_id-1813" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">14,924,960</td> <td id="new_id-1814" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1815" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1816" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">$</td> <td id="new_id-1817" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">0.15</td> <td id="new_id-1818" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;">Warrants exercisable at end of period</p> </td> <td id="new_id-1819" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1820" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1821" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">14,924,960</td> <td id="new_id-1822" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1823" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1824" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1825" style="text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1826" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> </tr> </table><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">Warrants issued were valued using the Black-Scholes model assuming zero dividends, a $0.15 strike price, 1-year expiration, 1.49% risk-free rate and volatility of 238%. Costs incurred for warrants issued to related parties for the conversion of debt were recorded as interest expenses and were $0 and $367,662 for the three and nine months ending September 30, 2017, respectively.</p><br/></div> 3000000 4000000 0.10 P24M P3Y 2000000 5000000 0.10 vest quarterly in the amount of one option for every two dollars of revenue recognized by the Company 2000000 4000000 0.10 P24M P3Y 2000000 0.10 P3Y vest quarterly one option for every two dollars of revenue recognized by the Company. 5000000 5000000 0.10 10000000 0.10 P3Y P3Y vest quarterly one option for every two dollars of revenue recognized by the Company vest quarterly one option for every two dollars of revenue recognized by the Company 1000000 500000 250000 250000 250000 1000000 0.10 P2Y P3Y 100000 performance based bonus within 45 days from the end of the Company&#x2019;s fiscal year as determined by the Compensation Committee of the Board of Directors 3000000 7000000 0.10 P3Y vest quarterly one option for every two dollars of revenue recognized by the Company 100000 400000 0.10 P2Y 1600000 100000 900000 0.10 P3Y P3Y P2Y 1500000 1500000 0.10 P24M P3Y 1119372 14924960 14924960 10600000 10600000 795000 4324960 4324960 324372 Investors received one-year fully vested warrant to purchase up to 100% of the number of shares purchased in the offering. 0.15 0.075 2400000 0.00 0.10 P3Y 0.0151 2.55 122000 295000 800000 P22M 5000000 vest based on Company performance with one option vesting for every two dollars of revenue, vesting quarterly 0.00 0.10 P3Y 0.0162 2.59 190000 289000 3533000 P12M 0.00 0.15 P1Y 0.0149 2.38 0 367662 <div style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; "> <table border="0" cellpadding="0" cellspacing="0" class="finTable" style="margin-right: 10%; margin-left: 10%; width: 80%; font-size: 10pt; font-family: &quot;Times New Roman&quot;, Times, serif; text-indent: 0px;"> <tr style="vertical-align: bottom;"> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1598" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1599" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b>Number of</b></b></p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b>Options</b></b></p> </td> <td id="new_id-1600" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;">&#xa0;</td> <td id="new_id-1601" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1602" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b>Weighted Average</b></b></p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b>Exercise Price</b></b></p> </td> <td id="new_id-1603" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;">&#xa0;</td> </tr> <tr style="vertical-align: bottom;"> <td>&#xa0;</td> <td id="new_id-1604">&#xa0;</td> <td id="new_id-1605">&#xa0;</td> <td id="new_id-1606">&#xa0;</td> <td id="new_id-1607">&#xa0;</td> <td id="new_id-1608">&#xa0;</td> <td id="new_id-1609">&#xa0;</td> <td id="new_id-1610">&#xa0;</td> <td id="new_id-1611">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; width: 62%;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;">Options outstanding at beginning of year</p> </td> <td id="new_id-1612" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1613" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1614" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">2,400,000</td> <td id="new_id-1615" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1616" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1617" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">$</td> <td id="new_id-1618" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">0.10</td> <td id="new_id-1619" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;">Changes during the period:</p> </td> <td id="new_id-1620" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1621" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1622" style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1623" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1624" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1625" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1626" style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1627" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">Granted - at market price</p> </td> <td id="new_id-1628" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1629" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1630" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">11,800,000</td> <td id="new_id-1631" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1632" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1633" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">$</td> <td id="new_id-1634" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">0.10</td> <td id="new_id-1635" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">Exercised</p> </td> <td id="new_id-1636" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1637" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1638" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">-</td> <td id="new_id-1639" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1640" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1641" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1642" style="text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1643" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">Expired</p> </td> <td id="new_id-1644" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1645" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);">&#xa0;</td> <td id="new_id-1646" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">-</td> <td id="new_id-1647" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1648" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1649" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);">&#xa0;</td> <td id="new_id-1650" style="text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);">&#xa0;</td> <td id="new_id-1651" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;">Options outstanding at end of period</p> </td> <td id="new_id-1652" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1653" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);">&#xa0;</td> <td id="new_id-1654" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">14,200,000</td> <td id="new_id-1655" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1656" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1657" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">$</td> <td id="new_id-1658" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">0.10</td> <td id="new_id-1659" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;">Options exercisable at end of period</p> </td> <td id="new_id-1660" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1661" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1662" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">5,204,168</td> <td id="new_id-1663" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1664" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1665" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">$</td> <td id="new_id-1666" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">0.10</td> <td id="new_id-1667" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> </tr> </table><table border="0" cellpadding="0" cellspacing="0" class="finTable" style="margin-right: 10%; margin-left: 10%; width: 80%; font-size: 10pt; font-family: &quot;Times New Roman&quot;, Times, serif; text-indent: 0px;"> <tr style="vertical-align: bottom;"> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1668" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1669" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b>Number of</b></b></p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b>Options</b></b></p> </td> <td id="new_id-1670" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;">&#xa0;</td> <td id="new_id-1671" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1672" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b>Weighted Average</b></b></p> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b>Exercise Price</b></b></p> </td> <td id="new_id-1673" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;">&#xa0;</td> </tr> <tr style="vertical-align: bottom;"> <td>&#xa0;</td> <td id="new_id-1674">&#xa0;</td> <td id="new_id-1675">&#xa0;</td> <td id="new_id-1676">&#xa0;</td> <td id="new_id-1677">&#xa0;</td> <td id="new_id-1678">&#xa0;</td> <td id="new_id-1679">&#xa0;</td> <td id="new_id-1680">&#xa0;</td> <td id="new_id-1681">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; width: 62%;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;">Options outstanding at beginning of year</p> </td> <td id="new_id-1682" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1683" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1684" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">5,000,000</td> <td id="new_id-1685" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1686" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1687" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">$</td> <td id="new_id-1688" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">0.10</td> <td id="new_id-1689" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;">Changes during the period:</p> </td> <td id="new_id-1690" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1691" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1692" style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1693" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1694" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1695" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1696" style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1697" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">Granted - at market price</p> </td> <td id="new_id-1698" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1699" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1700" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">30,800,000</td> <td id="new_id-1701" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1702" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1703" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">$</td> <td id="new_id-1704" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">0.10</td> <td id="new_id-1705" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">Exercised</p> </td> <td id="new_id-1706" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1707" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1708" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">-</td> <td id="new_id-1709" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1710" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1711" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1712" style="text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1713" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">Expired</p> </td> <td id="new_id-1714" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1715" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);">&#xa0;</td> <td id="new_id-1716" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">-</td> <td id="new_id-1717" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1718" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1719" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);">&#xa0;</td> <td id="new_id-1720" style="text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);">&#xa0;</td> <td id="new_id-1721" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;">Options outstanding at end of period</p> </td> <td id="new_id-1722" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1723" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);">&#xa0;</td> <td id="new_id-1724" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">35,800,000</td> <td id="new_id-1725" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1726" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1727" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">$</td> <td id="new_id-1728" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">0.10</td> <td id="new_id-1729" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;">Options exercisable at end of period</p> </td> <td id="new_id-1730" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1731" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1732" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">2,780,815</td> <td id="new_id-1733" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1734" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1735" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">$</td> <td id="new_id-1736" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">0.10</td> <td id="new_id-1737" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> </tr> </table></div> 2400000 0.10 11800000 0.10 0 0 14200000 0.10 5204168 0.10 5000000 0.10 30800000 0.10 0 0 35800000 0.10 2780815 0.10 <div style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; "> There were no warrants issued and outstanding as of December 31, 2016. The following table shows the warrant activity during the period ended September 30, 2017:<br /><br /><table border="0" cellpadding="0" cellspacing="0" class="finTable" style="margin-right: 10%; margin-left: 10%; width: 80%; font-size: 10pt; font-family: &quot;Times New Roman&quot;, Times, serif; text-indent: 0px;"> <tr style="vertical-align: bottom;"> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1738" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1739" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"><b>&#xa0;</b></td> <td id="new_id-1740" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"><b>&#xa0;</b></td> <td id="new_id-1741" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;"><b>&#xa0;</b></td> <td id="new_id-1742" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1743" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b>Weighted</b></b></p> </td> <td id="new_id-1744" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> </tr> <tr style="vertical-align: bottom;"> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1745" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1746" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b>Number</b></b></p> </td> <td id="new_id-1747" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1748" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1749" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b>Average</b></b></p> </td> <td id="new_id-1750" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> </tr> <tr style="vertical-align: bottom;"> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1751" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1752" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b>Of</b></b></p> </td> <td id="new_id-1753" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1754" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1755" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b>Exercise</b></b></p> </td> <td id="new_id-1756" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> </tr> <tr style="vertical-align: bottom;"> <td style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1757" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1758" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b>Warrants</b></b></p> </td> <td id="new_id-1759" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;">&#xa0;</td> <td id="new_id-1760" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td colspan="2" id="new_id-1761" style="text-align: center; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:center;"><b><b>Price</b></b></p> </td> <td id="new_id-1762" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;">&#xa0;</td> </tr> <tr style="vertical-align: bottom;"> <td>&#xa0;</td> <td id="new_id-1763">&#xa0;</td> <td id="new_id-1764">&#xa0;</td> <td id="new_id-1765">&#xa0;</td> <td id="new_id-1766">&#xa0;</td> <td id="new_id-1767">&#xa0;</td> <td id="new_id-1768">&#xa0;</td> <td id="new_id-1769">&#xa0;</td> <td id="new_id-1770">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; width: 62%;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;">Warrants outstanding at beginning of year</p> </td> <td id="new_id-1771" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1772" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1773" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">-</td> <td id="new_id-1774" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1775" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1776" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1777" style="text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1778" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;">Changes during the period:</p> </td> <td id="new_id-1779" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1780" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1781" style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1782" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1783" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1784" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1785" style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1786" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">Granted</p> </td> <td id="new_id-1787" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1788" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1789" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">14,924,960</td> <td id="new_id-1790" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1791" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1792" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">$</td> <td id="new_id-1793" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">0.15</td> <td id="new_id-1794" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">Exercised</p> </td> <td id="new_id-1795" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1796" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1797" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">-</td> <td id="new_id-1798" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1799" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1800" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1801" style="text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1802" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;text-indent:36pt;">Expired</p> </td> <td id="new_id-1803" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1804" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);">&#xa0;</td> <td id="new_id-1805" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">-</td> <td id="new_id-1806" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1807" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1808" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);">&#xa0;</td> <td id="new_id-1809" style="text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);">&#xa0;</td> <td id="new_id-1810" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(255, 255, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;">Warrants outstanding at end of period</p> </td> <td id="new_id-1811" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1812" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; border-bottom: 1px solid rgb(0, 0, 0);">&#xa0;</td> <td id="new_id-1813" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">14,924,960</td> <td id="new_id-1814" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1815" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1816" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">$</td> <td id="new_id-1817" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; border-bottom: 1px solid rgb(0, 0, 0);">0.15</td> <td id="new_id-1818" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; padding-bottom: 1px; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204, 238, 255);"> <td style="text-align: left; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;"> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;">Warrants exercisable at end of period</p> </td> <td id="new_id-1819" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1820" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1821" style="width: 16%; text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt;">14,924,960</td> <td id="new_id-1822" style="width: 1%; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt; margin-left: 0pt; white-space: nowrap;">&#xa0;</td> <td id="new_id-1823" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1824" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1825" style="text-align: right; font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> <td id="new_id-1826" style="font-family: &quot;Times New Roman&quot;, Times, serif; font-size: 10pt;">&#xa0;</td> </tr> </table></div> 0 14924960 0.15 0 0 14924960 0.15 14924960 <div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; "> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;"><b>NOTE&#xa0;</b><b>8</b><b> &#x2013; LITIGATION</b></p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;"><font style="text-decoration:underline">16(b) Litigation</font></p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">On September 26, 2016, Registrant filed in the United States District Court for the Middle District of Florida a Complaint against defendants The Mazzal Trust, Nissim S. Trabelsi and Shawn Telsi (collectively the &#x201c;Defendants&#x201d;), seeking the disgorgement of profits obtained by Defendants and certain of their shareholder affiliates defined under Rule 16a-1(a)(1) under the Exchange Act defined below (collectively, the &#x201c;Group&#x201d;) through &#x201c;short swing profits&#x201d; in violation of Section 16(b) of the Securities Exchange Act of 1934 (the &#x201c;Exchange Act&#x201d;). Specifically, Registrant alleged that the Group acted under the guidance and control of the Defendants, whose individual defendants had filed forms 3 and 4 with the Securities and Exchange Commission (the &#x201c;SEC&#x201d;), declaring themselves to be &#x201c;insiders&#x201d; for the purpose of Section 16(b). The Group owned 100% of the shares of Registrant at the time that members of the group were engaged in the sale and purchase of such shares. The sales and purchases referenced all occurred within six months of other sales and purchases, subjecting Defendants to disgorge to Registrant all profits made by the Group in such sales and purchases. As detailed in paragraphs 16-22 of the Complaint, the total profits received by the Group is $1,695,689. Accordingly, Registrant has demanded the return of all such profits to Registrant plus the statutory payment of attorneys&#x2019; fees.&#xa0; On August 24, 2017, the court granted the Company a default judgment against Defendants. The Company intends to vigorously pursue satisfaction of this judgment although there can be no assurance of the recovery of any funds from Defendants.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;"><font style="text-decoration:underline">VStock Transfer Communications</font></p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">On January 26, 2017, the Company received an email from its transfer agent, VStock Transfer, LLC, (&#x201c;VStock&#x201d;) informing the Company that it had been served with a Summons and Complaint (B2 Opportunity Fund (&#x201c;B2&#x201d;) v. Trabelsi et al. - Index No.:17-CV-10043, the &#x201c;Claim&#x201d;) and further stating that the Company was obligated to indemnify VStock for fees and expenses incurred in defending the Claim. The Company responded on February 24, 2017 stating that (1) we reviewed the Transfer Agent and Registrar Agreement between Mazzal and VStock dated May 20, 2014 and that in Article VI(c) of that agreement it states that indemnification will not be offered if the acts of VStock constitute bad faith or gross negligence, (2) we reviewed the lawsuit filed by B2 against VStock and others and find that VStock&#x2019;s actions constitute gross negligence and perhaps bad faith, and we therefore deny indemnification of VStock relating to the Claim, and (3) should VStock take any action to seek indemnification by Znergy in any manner, Znergy will either join B2 in its lawsuit or will file an action on its own. The Company terminated its agreement with VStock. Management cannot at this time estimate what, if any, financial impact this matter will have on the Company.</p><br/></div> 1695689 <div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; "> <p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:left;"><b>NOTE </b><b>9</b><b> &#x2013; CUSTOMER CONCENTRATION</b></p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">During the three months ended September 30, 2017 we had one customer whose purchases accounted for substantially all of the sales.</p><br/><p style="font-family:'Times New Roman', Times, serif;font-size:10pt;margin:0pt;text-align:justify;">At September 30, 2017, there was one customer who had an accounts receivable balance greater than 10% of our total outstanding receivable balance.</p><br/></div> 0.10 EX-101.SCH 5 znrg-20170930.xsd XBRL TAXONOMY EXTENSION SCHEMA 001 - Statement - CONDENSED CONSOLIDATED BALANCE SHEETS link:presentationLink link:definitionLink link:calculationLink 002 - 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