RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

6 Months Ended

Apr. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

NOTE 3 – RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

Subsequent to the Company’s filing of its Annual Report on Form 10-K for the fiscal year ended October 31, 2023 and its Quarterly Report on Form 10-Q for the three and six months ended April 30, 2023, with the Securities and Exchange Commission on June 20, 2023, the Company performed an evaluation of its accounting policies in relation to the fair value of its common stock. Management determined that the Original Forms 10-K and 10-Q do not give effect to certain expenses identified. Accordingly, the Company restates its consolidated financial statements in this Form 10-Q as outlined further below. Upon review of the Company’s previously filed Forms 10-K and 10-Q, the following errors were discovered and recorded:

1. The amended change in par value per share was adjusted from $0.001 to $0.0001 in December 22, 2022.

2. Reclassified ‘Common stock to be issued’ to an individual equity line item within the Balance Sheet

3. Reclassified $100,000 of consulting and development services expense to ‘Due to related party’

4. Reclassified $437,373 of long-term investments to intangible assets, net and other assets

5. Reclassified $100,000 of other current liabilities to accounts payable

6. Included additional expense already maintained in the Companies system within general and administrative expenses

7. Reclassified stock-based compensation expense to an individual line within the operating expenses

8. Updated the initial recognition and subsequent adjustments of the derivative liability to ‘Adjustments to reconcile net loss to net cash used in operating activities’ within the condensed consolidated statement of cash flows

9. Classified the issuance of common stock issued upon purchase of intangible assets appropriately as a non-cash investing activity

10. Classified the $1.5 million in proceeds from notes payables as the sole financing activity in the six months ended April 30, 2023.

The following table sets forth the effects of the adjustments on affected items within the Company’s previously reported condensed balance sheet as of October 31, 2023:

	October 31, 2023			Adjustments				October 31, 2023
		(As Filed)						(As Restated)
ASSETS:
Current Assets:
Cash	$	1,448,769		$	—			$	1,448,769
Accounts Receivable		226,951			—				226,951
Total current assets		1,675,720			—				1,675,720
Property, plant and equipment, net		1,510			—				1,510
Software development		5,033,332			—				5,033,332
Long-term investments		437,372			(437,372	)	4		—
Intangible assets, net		—			268,000		4		268,000
Other assets		—			169,373		4		169,373
TOTAL ASSETS	$	7,147,934		$	1			$	7,147,935
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities:
Accounts payable	$	—		$	100,000		5	$	100,000
Accrued expenses		100,378			—				100,378
Due to related party		57,756			100,000		3		157,756
Derivative liabilities		—			—				—
Other current liabilities		100,000			(100,000	)	5		—
Notes payable		—			—				—
Total current liabilities		258,134			100,000				358,134
TOTAL LIABILITIES		258,134			100,000				358,134
STOCKHOLDERS’ DEFICIT:
Preferred Stock Series A, par value $0.001, 10,000,000 shares authorized, 10,000,000 and 10,000,000 shares issued and outstanding as of April 30, 2024 and October 31, 2023, respectively		10,000			—				10,000
Common stock, par value $0.001, 950,000,000 shares authorized, 127,753,215 and 126,160,534 issued and outstanding as of April 30, 2024 and October 31, 2023		126,160			(113,544	)	1		12,616
Common stock to be issued		—			1,440,000		2		1,440,000
Additional paid-in-capital		26,176,224			1,744,774		1,2		27,920,998
Accumulated deficit		(19,422,584	)		(3,171,229	)	3,6		(22,593,813	)
TOTAL STOCKHOLDERS DEFICIT		6,889,800			(99,999	)			6,789,801
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	7,147,934		$	—			$	7,147,935

The following table sets forth the effects of the adjustments on affected items within the Company’s previously reported condensed consolidated statement of operations for the three and six months ended April 30, 2023:

	For the Three Months Ended										For the Six Months Ended
	April 30, 2023			Adjustments				April 30, 2023			April 30, 2023			Adjustments				April 30, 2023
	(As Filed)							(As Restated)			(As Filed)							(As Restated)
Revenues	$	226,886		$	—			$	226,886		$	453,772		$	—			$	453,772
Cost of sales		—			—				—			—			—				—
Gross profit (loss)		226,886			—				226,886			453,772			—				453,772
Operating expenses:
General and administrative expenses		1,208,323			(436,093	)	4,5		743,341			1,420,663			(432,200	)	6,7		988,463
Stock based compensation		—			1,959,107		5		1,959,107			—			1,959,107		7		1,959,107
Total operating expenses		1,208,323			1,494,125				2,702,448			1,420,663			1,526,907				2,947,570
Loss from operations		(981,437	)		(1,494,125	)			(2,475,562	)		(966,891	)		(1,555,797	)			(2,522,688	)
Other income (expense):
Interest Expense		—			(28,890	)			(28,890	)		—			(28,890	)			(28,890	)
Other income (expense)		713,136			—				713,136			(335,493	)		—				(335,493	)
Total other income (expense)		713,136			(28,890	)			684,246			(335,493	)		(28,890	)			(364,383	)
Net loss before taxes		(268,301	)		(1,523,015	)			(1,791,316	)		(1,302,384	)		(1,555,797	)			(2,858,181	)
Income tax provision (benefit)		—			—				—			—			—				—
Net loss	$	(268,301	)	$	(1,523,015	)		$	(1,791,316	)	$	(1,302,384	)	$	(1,555,797	)		$	(2,858,181	)
Net loss per share, basic and diluted	$	(0.00	)	$				$	(0.07	)	$	(0.01	)	$				$	(0.17	)
Weighted average shares outstanding, basic and diluted		109,459,182							24,564,538			109,459,182							17,291,813

The following table sets forth the effects of the adjustments on affected items within the Company’s previously reported consolidated statements of cash flows for the six months ended April 30, 2023:

	For the six months ended April 30, 2023			Adjustments				For the six months ended April 30, 2023
	(As Filed)							(As Restated)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(1,302,385	)		(1,555,796	)		$	(2,858,181	)
Adjustments to reconcile net loss to net cash used in operating activities:
Equity based compensation expense - stock		—			1,959,107		8		1,959,107
Loss on change in fair value of derivative liability		—			(713,136	)	8		(713,136	)
Amortization of debt discount related to derivatives		—			1,047,879		8		1,047,879
Changes in operating assets and liabilities
Decrease (Increase) in accounts receivable		(453,772	)		—				(453,772	)
Increase (Decrease) in accounts payable and accrued liabilities		(52,701	)		66,136		3,5		13,435
Increase (Decrease) in derivative liabilities		340,713			(340,713	)	7		—
Change in derivative interest		(5,969	)		5,969		8		—
Net cash used in operating activities	$	(1,474,114	)		469,447			$	(1,004,667	)
CASH FLOWS FROM INVESTING ACTIVITIES
Long term investments		(18,550,285	)		18,550,285		9		—
Net cash used in investing activities	$	(18,550,285	)		18,550,285			$	—
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable		518,500			1,020,510		10		1,539,010
Additional paid-in capital		20,081,273			(20,081,273	)	10		—
Net cash provided by financing activities	$	20,599,773			(19,060,763	)		$	1,539,010
Net decrease in cash and cash equivalents		575,374			(41,031	)			534,343
Cash and cash equivalents, beginning of the year		(32,453	)		32,453				—
Cash and cash equivalents, end of the year	$	542,921			(8,578	)		$	534,343
Supplemental disclosures for cash flow information:
Cash paid during the year for interest	$	—						$	—
Supplemental disclosure of noncash financing activities:
Conversion of convertible notes payable to shareholders’ equity	$	—						$	1,091,164
Issuance of common stock issued upon purchase of intangible assets	$	—						$	18,550,285