NOTE

– RESTATEMENT

The net loss reported for

2016

has been increased and shareholders’ deficit as of

December 31, 2016

has been increased by

$664,456

to reflect the correction of an error identified in previously reported

2016

results, related to the recognition of a liability for a commitment of

$5,000,000

worth of common stock to be issued in the future as consideration in the acquisition of the patent intangible described in Note

The recognition of the

$5,000,000

liability created a corresponding increase in the associated cost basis of the patent. The increase in the value recognized for the patent intangible in

2016

caused an increase in amortization expense and in addition, an impairment charge was then required effective

December 31, 2016

to reflect the fair value of the land.

In addition, the Company has restated its previously issued

2016

consolidated financial statements related to an equity transaction for shares issued for services that were

not

provided, nor were shares actually issued. As a result, net loss was reduced by

$10,003

with a corresponding reduction of additional paid-in capital of

$10,000

and a

reduction in common stock. It was also determined that the common stock was

-par and the associated amounts recorded within common stock was reclassified to additional paid-in capital.

The effect on the Company's previously issued

2016

consolidated financial statements is summarized as follows:

Consolidated Balance Sheet as of

December 31, 2016

	Previously Reported			Increase (Decrease)			As Restated

Intangible assets, net	$	2,319,852		$	4,335,544		$	6,655,396
Patent acquisition liability		-			5,000,000			5,000,000
Common stock		85			(85	)		-
Additional paid-in capital		10,000			(9,918	)		82
Accumulated deficit		(13,389,785	)		(654,453	)		(14,044,238	)

Consolidated Statement of Operations as of

December 31, 2016

	Previously Reported		Increase (Decrease)		As Restated

General and administrative	$	870,303	$	97,320	$	967,623
Impairment expense		-		567,133		567,133