Revision of stock compensation expense

9 Months Ended

Sep. 30, 2022

Compensation Related Costs [Abstract]

Revision of stock compensation expense

Note 11 – Revision of stock compensation expense

During the second quarter of 2022, the Company identified certain adjustments required to correct balances within stock-based compensation, which is included in operating expenses in the accompanying consolidated statements of operations, related to employees, directors and consultants (see Note 7 – Equity Compensation Plan) recorded during the three-month periods from June 2021 to March 2022. The Company had incorrectly calculated the amortization of the stock-based compensation for the periods from June 2021 to March 2022. The error discovered resulted in an understatement of the stock-based compensation expense for the periods June 2021 to March 2022 summarized as follows:

	As previously
	reported			adjustment			As if restated
Three months ended 6/30/2021
Gross profit (loss)		(74,264	)		(369	)		(74,633	)
Operating expenses		1,238,394			24,253			1,262,647
Operating loss		(1,312,658	)		24,622			(1,288,036	)
Net loss		(1,315,083	)		(24,622	)		(1,339,705	)
Additional paid in capital		9,929,130			24,622			9,953,752
Accumulated Deficit		(5,726,594	)		(24,622	)		(5,751,216	)
Six months ended 6/30/2021
Gross profit (loss)		(226,148	)		(369	)		(226,517	)
Operating expenses		2,187,905			24,253			2,212,158
Operating loss		(2,414,053	)		24,622			(2,389,431	)
Net loss		(2,210,194	)		(24,622	)		(2,234,816	)
Additional paid in capital		9,929,130			24,622			9,953,752
Accumulated Deficit		(5,726,594	)		(24,622	)		(5,751,216	)
Three months ended 9/30/2021
Gross profit (loss)		126,983			(1,173	)		125,810
Operating expenses		858,099			77,034			935,133
Operating loss		(731,116	)		78,207			(652,909	)
Net loss		(710,663	)		(78,207	)		(788,870	)
Additional paid in capital		9,837,157			78,207			9,915,364
Accumulated Deficit		(6,123,934	)		(78,207	)		(6,202,141	)
Nine months ended 9/30/2021
Gross profit (loss)		(99,165	)		(1,542	)		(100,707	)
Operating expenses		2,732,681			101,287			2,833,968
Operating loss		(2,831,846	)		102,829			(2,729,017	)
Net loss		(2,607,534	)		(102,829	)		(2,710,363	)
Additional paid in capital		9,837,157			102,829			9,939,986
Accumulated Deficit		(6,123,934	)		(102,829	)		(6,226,763	)
Year ended 12/31/2021
Gross profit (loss)		(83,257	)		(2,431	)		(85,688	)
Operating expenses		3,474,593			159,625			3,634,218
Operating loss		(3,557,850	)		162,056			(3,395,794	)
Net loss		(3,141,753	)		(162,056	)		(3,303,809	)
Additional paid in capital		9,873,345			162,056			10,035,401
Accumulated Deficit		(6,658,153	)		(162,056	)		(6,820,209	)
Three months ended 3/31/2022
Gross profit (loss)		(1,061	)		(1,507	)		(2,568	)
Operating expenses		1,127,111			98,961			1,226,072
Operating loss		(1,128,172	)		100,468			(1,027,704	)
Net loss		(1,129,975	)		(100,468	)		(1,230,443	)
Additional paid in capital		9,924,394			262,523			10,186,917
Accumulated Deficit		(7,788,128	)		(262,523	)		(8,050,651	)

Based upon an analysis of Accounting Standards Codification 250 “accounting Changes and Error Corrections (ASC 250), U.S. Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin (“SAB”) No. 99, “Materiality” and SAB No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements” (“SAB 108”), the Company determined this error was immaterial to the previously-issued condensed consolidated financial statements, and as such no restatement was necessary. Correcting prior-period financial statements for such immaterial misstatements does not require previously filed reports to be amended. Accordingly, the misstatement was corrected in the period ended June 30, 2022.

For the nine months ended September 30, 2022, correction of this error increased our stock-based compensation expense, total operating expenses and net loss for periods through March 31, 2022 by $262,523. Loss per share increased in the nine months ended September 30, 2021 by $0.01.