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RESTATEMENT OF FINANCIAL STATEMENTS
 9 Months Ended
Sep. 30, 2024
Accounting Changes and Error Corrections [Abstract]  
RESTATEMENT OF FINANCIAL STATEMENTS

  

2.

RESTATEMENT OF FINANCIAL STATEMENTS

 

During the preparation of the financial statements for the year ended December 31, 2023, the Company identified and corrected its classification and accounting treatment for its series R convertible preferred stock and the related dividend accrual. Pursuant to ASC 250, Accounting changes and error corrections issued by FASB and Staff Accounting Bulletin 99 Materiality, issued by Securities and Exchange Commission, the Company determined the impact of the error was immaterial. The impact of the error correction is reflected in the consolidated balance sheet as of September 30, 2023 as a $274,982 increase to the mezzanine equity and offsetting decrease to the series R convertible preferred stock and subject to possible redemption mezzanine equity line item. In addition, the impact of the unpaid dividend accrual was reflected as of September 30, 2023 as a $24,681 increase to mezzanine equity and offsetting decrease to the accumulated deficits.

 

During the preparation of the financial statements for three months ended March 31, 2024, the Company identified and corrected its classification for all its outstanding common stock amount per par value of $0.001 with additional paid-in-capital related with a 1-for-75,000 reverse split executed on January 9, 2024. The impact of this adjustment decreased $1,804,774 to common stock and offsetting increase to additional paid-in-capital as of December 31, 2023.

 

On November 10, 2023, the Company sold Platinum Tax, which was a full-service tax resolution firm located in Los Angeles, California. The Company presented in prior periods operating loss as loss from discontinued operations of $3,705 and $93,005 on the consolidated statement of operations for the three and nine months ended September 30, 2023, respectively.

 

The impact of the error corrections also reflected a $136.12 increase of basic earnings per share, and a $2.30 increase of diluted earnings per share on the consolidated statement of operations for the three months ended September 30, 2023. For the nine months ended September 30, 2023, the impact of the error correction reflected a $167.33 increase of basic earnings per share, and an increase of $2.40 of diluted earnings per share.

 

The following tables summarize the impact of the corrections on the Company’s condensed consolidated balance sheet as of September 30, 2023, the condensed consolidated statement of operations for the three and nine months ended September 30, 2023, and the condensed consolidated statement of cash flows for the nine months ended September 30, 2023: 

            
Balance sheet            
   Impact of correction of error 
September 30, 2023 (Unaudited)  As previously reported   Adjustments   As restated 
             
Total assets  $18,518,727   $(844)  $18,517,883 
                
Total liabilities   12,102,942    (244,129)   11,858,813 
                
Mezzanine equity   5,440,434    299,663    5,740,097 
                
Total stockholders' equity  $975,352   $(299,663)  $675,689 

 

Statement of operations

 

    Impact of correction of error  
Three months ended September 30, 2023 (Unaudited)   As previously reported     Adjustments     As restated  
                   
Revenue   $ 3,438,124     $ (32,265 )   $ 3,405,859  
Cost of sales     557,028       (5,605 )     551,423  
Gross profit     2,881,096       (26,660 )     2,854,436  
Operating expense     611,110       (30,067 )     581,043  
Income from operations     2,269,986       3,407       2,273,393  
Other income (expense), net     (288,465 )     298       (288,167 )
Net income before discontinued operations     1,981,521       3,705       1,985,226  
Loss from discontinued operations     –       (3,705 )     (3,705 )
Net income for the period   $ 1,981,521     $ –     $ 1,981,521  
Preferred stock dividends   $ (150,965 )   $ 0.00     $ (150,965 )
Net income attributable to common shareholders   $ 1,830,556     $ 0.00     $ 1,830,556  
Basic earnings per share for continuing operations   $ 0.00     $ 136.12     $ 136.12  
Diluted earnings per share for continuing operations   $ 0.00     $ 2.30     $ 2.30  

 

   Impact of correction of error 
Nine months ended September 30, 2023 (Unaudited)  As previously reported   Adjustments   As restated 
             
Revenue  $9,781,731   $(304,967)  $9,476,764 
Cost of sales   2,643,137    (53,730)   2,589,407 
Gross profit   7,138,594    (251,237)   6,887,357 
Operating expense   2,448,876    (341,900)   2,106,976 
Income from operations   4,689,718    90,663    4,780,381 
Other income (expense), net   (1,908,110)   2,342    (1,905,768)
Net income before discontinued operations   2,781,608    93,005    2,874,613 
Loss from discontinued operations   –    (93,005)   (93,005)
Net income for the period  $2,781,608   $–   $2,781,608 
Preferred stock dividends  $(605,384)  $0.00   $(605,384)
Net income attributable to common shareholders  $2,176,224   $0.00   $2,176,224 
Basic earnings per share for continuing operations  $0.00   $167.33   $167.33 
Diluted earnings per share for continuing operations  $0.00   $2.40   $2.40 

 

Statement of Cash Flows

 

   Impact of correction of error 
Nine months ended September 30, 2023 (Unaudited)  As previously reported   Adjustments   As restated 
             
Net cash used in operating activities of continuing operations  $(603,392)  $45,850   $(557,542)
Net cash provided by financing activities of continuing operations  $557,933   $(131,262)  $426,671