Restatements
 12 Months Ended
Dec. 31, 2017
Accounting Changes and Error Corrections [Abstract]  
Restatements

3. RESTATEMENTS

 

Below are the restated December 31, 2016 financial statements. The original December 31, 2016 financial statements erroneously recognized the entire upfront fees from two of its independent distributors in revenue at the time the Company delivered the exclusive license to the distributors rather than over the term of the agreements (5 years). To correct that error, the Company has shown the portion of the upfront fees attributable to that period only.

 

Consolidated Balance Sheet

 

    December 31, 2016 as filed     Restatement adjustment     Restated December 31, 2016  
                   
Assets                        
Current Assets                        
Cash   $ 116,309             $ 116,309  
Accounts receivable, net     51,241               51,241  
Prepaid Expenses     2,361               2,361  
Inventories     10,650               10,650  
Total Current Assets     180,561       -       180,561  
Other Assets                        
Deposits     256,254               256,254  
Furniture and equipment     356,346               356,346  
Total Assets   $ 793,161     $ -     $ 793,161  
                         
Liabilities and Stockholders’ Deficit                        
Current Liabilities                        
Accounts payable   $ 28,250             $ 28,250  
Accrued expenses     68,795               68,795  
Accrued interest     10,110               10,110  
Income taxes payable     5,700               5,700  
Deferred revenue     106,331       56,000       162,331  
Derivative liability     73,556               73,556  
Notes payable, net of debt discount of $15, 018 and $0 at December 31, 2016 and 2015, respectively     125,351               125,351  
Notes payable - related party, current portion     49,396               49,396  
Convertible notes payable, net of debt discount of $23,724 and $0 at December 31, 2016 and 2015, respectively     33,775               33,775  
Royalty notes payable, net of debt discount of $87,036 and $0 at December 31, 2016 and 2015, respectively     29,742               29,742  
Total Current Liabilities     531,006       56,000       587,006  
Long term liabilities                        
Notes payable, net of debt discount of $32,292 and $0 at December 31, 2016 and 2015, respectively     17,708               17,708  
Notes payable - related party, net of debt discount of $0 and $52,386 at December 31, 2016 and 2015, respectively     48,353               48,353  
Convertible notes payable, net of current portion and discount     -               -  
Royalty notes payable, net of debt discount of $574,294 and $0 at December 31, 2016 and 2015, respectively     8,778               8,778  
Accrued royalties payable     121,967               121,967  
Total Liabilities     727,812       56,000       783,812  
                         
Stockholders’ Equity (Deficit)                        
Preferred stock, $0.001 par value, 20,000,000 shares authorized, none outstanding     -               -  
Common stock, $0.001 par value, 100,000,000 shares authorized, 19,575,605 and                        
15,006,750 shares issued or issuable at December 31, 2016 and December 31, 2015, respectively.     1,958               1,958  
Additional paid-in capital     1,594,721               1,594,721  
Accumulated deficit     (1,531,330 )     (56,000 )     (1,587,330 )
Total Stockholder’s Equity (Deficit)     65,349       (56,000 )     9,349  
Total Liabilities and Stockholders’ Equity (Deficit)   $ 793,161     $ -     $ 793,161  

 

Consolidated Statements of Operations

 

    Years Ended December 31.  
    2016 as filed     Restatement adjustment     Restated 2016  
Monitoring revenue   $ 212,128             $ 212,128  
Distributorship revenue     147,637       (56,000 )     91,637  
Total revenue     359,765       (56,000 )     303,765  
Monitoring cost of revenue     38,276               38,276  
Distributorship cost of revenue     2,892               2,892  
Total cost of revenue     41,168       -       41,168  
Gross profit     318,597       (56,000 )     262,597  
Operating expenses                        
Payroll     147,231               147,231  
Professional fees     92,705               92,705  
General and administrative expenses     458,351               458,351  
Research and development     -               -  
Depreciation     65,449               65,449  
Impairment of asset     -               -  
Total operating expenses     763,736       -       763,736  
Loss from operations     (445,139 )     (56,000 )     (501,139 )
                         
Other income (expense)                        
Interest expense     (214,708 )             (214,708 )
Change in fair value of derivative liability     (22,231 )             (22,231 )
Gain (loss) on extinguishment of debt     (116,541 )             (116,541 )
Total other income (expense)     (353,480 )     -       (353,480 )
                         
Loss before provision for income taxes     (798,619 )     (56,000 )     (854,619 )
                         
Provision for income taxes     1,600               1,600  
                         
Net loss   $ (800,219 )   $ (56,000 )   $ (856,219 )
                         
Basic and diluted loss per common share   $ (0.05 )   $ (0.01 )   $ (0.06 )
                         
Weighted average number of common shares outstanding - basic and diluted     16,478,128               16,478,128  

 

Consolidated Statement of Cash Flows

 

    Twelve months ended December 31, 2016  
    2016 as filed     Restatement adjustment     Restated 2016  
Cash flows from operating activities:                        
Net loss   $ (800,219 )   $ (56,000 )   $ (856,219 )
Adjustments to reconcile from net loss to net cash used in operating activities:                        
Depreciation and amortization     65,449               65,449  
Shares issued for services     236,933               236,933  
Loss on extinguishment of debt     116,541               116,541  
Amortization of debt discount     158,665               158,665  
Change in fair value of derivative liability     22,231               22,231  
Impairment of asset     -               -  
Changes in operating assets and liabilities                        
Accounts receivable     (49,650 )             (49,650 )
Prepaid expenses     212               212  
Inventories     (285 )             (285 )
Deposits     (250,029 )             (250,029 )
Accounts payable     17,883               17,883  
Accrued expenses     14,914               14,914  
Accrued interest     8,110               8,110  
Income taxes payable     1,600               1,600  
Deferred revenue     24,657       56,000       80,657  
Accrued royalties payable     1,967               1,967  
Net cash used in operating activities     (431,021 )     -       (431,021 )
                         
Cash flows from investing activities:                        
Purchase of property and equipment     (376,148 )             (376,148 )
Net cash used in investing activities     (376,148 )     -       (376,148 )
                         
Cash flows from financing activities:                        
Proceeds from notes payable     876,200               876,200  
Repayments of notes payable     (149,325 )             (149,325 )
Proceeds from issuance of common stock     187,500               187,500  
Shareholder contributions     -               -  
Net cash provided by financing activities     914,375       -       914,375  
                         
Net increase (decrease) in cash     107,206       -       107,206  
Cash, beginning of period     9,103               9,103  
Cash, end of period   $ 116,309     $ -     $ 116,309  
                         
Supplemental disclosure of cash information:                        
Cash paid during the period for:                        
Interest   $ 48,032             $ 48,032  
Income taxes   $ -             $ -  
Supplemental disclosure of non-cash investing and financing activities                        
Common stock issued for services   $ 236,933             $ 236,933  
Establishment of debt discount for royalty notes   $ 120,000             $ 120,000  

 

Consolidated Statement of Shareholders’ Equity (Deficit) (restated)

 

    Common Stock     Additional Paid-in     Accumulated     Restatement     Restated Accumulated Deficit     Total Stockholders’ Equity (Deficit)  
    Shares     Amount     Capital     Deficit     adjustment     (restated)     (restated)  
Balance December 31, 2014     14,852,500     $ 1,485     $ 305,671     $ (225,669 )                   $ 307,156  
Shares issued for cash     154,250       15       84,985       -                       85,000  
Warrants issued     -       -       18,656       -                       18,656  
Shareholders contributions     -       -       29,235       -                       29,235  
Net loss     -       -       -       (505,442 )                     -  
Balance December 31, 2015     15,006,750       1,500       438,547       (731,111 )             (731,111 )     (291,064 )
Shares issued for services     667,517       67       236,866       -               -       236,933  
Shares issued for cash     1,273,576       127       187,373       -               -       187,500  
Shares issued related to debt     2,531,485       254       731,945       -               -       732,199  
Shares issued related to anti-dilution     96,277       10       (10 )                                
Net loss     -       -       -       (800,219 )     (56,000 )     (856,219 )     (856,219 )
Balance December 31, 2016     19,575,605     $ 1,958     $ 1,594,721     $ (1,531,330 )   $ (56,000 )   $ (1,587,330 )   $ 9,349