Restatement of Financial Statements

9 Months Ended

Mar. 31, 2018

Accounting Changes and Error Corrections [Abstract]

Restatement of Financial Statements

2. Restatement of Financial Statements

On August 2, 2018, the Company mistakenly filed a wrong version of Form 10-Q for the period ended March 31, 2018, the Consolidated Statement of Operations for the three and nine months ended March 31, 2018 and Statement of Cash Flows for the nine-month period ending on March 31, 2018 was misstated. Below is a summary of the adjustments/restatement of the mistakenly filed 10-Q.

	For the Three Months Ended March 31, 2018									For the Nine Months Ended March 31, 2018
	(Original)			(Adjustment)			(Restated)			(Original)			(Adjustment)			(Restated)
Revenues, net	$	2,965,404		$	(2,115,968	)	$	849,436		$	5,081,372		$	(2,115,968	)	$	2,965,404
Cost of goods sold:		2,107,834			(1,512,946	)		594,888			3,618,033			(1,510,199	)		2,107,834
Total cost of goods sold		2,107,834			(1,512,946	)		594,888			3,618,033			(1,510,199	)		2,107,834
Gross profit		857,570			(603,021	)		254,549			1,463,339			(605,769	)		857,570
Operating expenses:
Selling, general and administrative expenses		2,849,789			(2,052,593	)		797,196			4,901,953			(2,052,164	)		2,849,789
Total operating expenses		2,849,789			(2,052,593	)		797,196			4,901,953			(2,052,164	)		2,849,789
Loss from operations		(1,992,220	)		1,449,573			(542,647	)		(3,438,615	)		1,446,396			(1,992,219	)
Non-operating income (expense):
Other income		14,206			(14,206	)		—			29,281			(15,075	)		14,206
Interest expense		(303,484	)		206,377			(97,107	)		(509,813	)		206,329			(303,484	)
Change in fair value of derivative liabilities		(1,384,423	)		5,064,955			3,680,532			(6,449,378	)		5,064,955			(1,384,423	)
Loss on conversion		—			(250,640	)		(250,640	)		—			(250,640	)		(250,640	)
Other expense		(612,894	)		611,629			(1,265	)		(979,799	)		617,545			(362,254	)
Total non-operating income (expense)		(2,286,594	)		5,618,114			3,331,520			(7,909,709	)		5,623,114			(2,286,595	)
Net income (loss)		(4,278,814	)		7,067,686			2,788,872			(11,348,323	)		7,069,509			(4,278,814	)
Basic net income (loss) per share		(0.02	)		0.03			0.01			(0.05	)		0.03			(0.02	)
Diluted net income (loss) per share		(0.02	)		0.03			0.01			(0.05	)		0.03			(0.02	)
Basic weighted average common shares outstanding		247,395,774			—			247,395,774			237,925,753			—			237,925,753
Diluted weighted average common shares outstanding *		247,395,774			—			247,395,774			237,925,753			—			237,925,753

	For the Nine Months Ended March 31, 2018
	(Original)			(Adjustment)			(Restated)
Cash flows from operating activities:
Net loss		(11,348,323	)		7,069,509			(4,278,814	)
Adjustments to reconcile net loss to cash flows from operating activities:		125,642			—			125,642
Initial valuation of debt discount
Loss on settlement		—			250,460			250,460
Amortization of debt discount		314,677			49,986			364,663
Stock based compensation		926,754			(137,525	)		789,229
Change in fair value of derivative liability		9,578,061			(8,193,638	)		1,384,423
Depreciation and amortization		—			85,807			85,807
Changes in assets and liabilities:
Accounts receivable		(239,302	)		—			(239,302	)
Inventory		100,447			—			100,447
Other assets		(374,664	)		—			(374,664	)
Bank overdraft		13,260			—			13,260
Accounts payable and accrued liabilities		(194,809	)		—			(194,809	)
Customer deposits		66,713			—			66,713
Unearned revenue		(11,970	)		—			(11,970	)
Accrued interest and Other payables		3,317			50,000			53,317
Net cash used in operating activities		954,390			(2,819,987	)		(1,865,597	)
Cash flows from investing activities:
Acquisition of intangible assets		(13,999	)		—			(13,999	)
Acquisition of property and equipment		(133,132	)		—			(133,132	)
Net cash used in investing activities		(147,131	)		—			(147,131	)
Cash flows from financing activities:
Proceeds from shares to be issued		361,478			961,207			1,322,685
Proceeds from convertible notes		702,653			(50,000	)		652,653
Repayment of notes payable		—			—			—
Payment to Note payable-related parties		(22,666	)		—			(22,666	)
Proceeds from loans		30,342			—			30,342
Repayment of loan payable-related parties		(158,617	)		—			(158,617	)
Repayment of loans		—			—			—
Proceeds from advance share issuance		95,094			—			95,094
Loan receivable		—			—			—
Net cash provided by financing activities		1,008,284			911,207			1,919,491
Net increase (decrease) in cash		(93,237	)		—			(93,237	)
Cash paid during the period for:
Cash, beginning of period		101,880			—			101,880
Cash, end of period		8,643			—			8,643
Interest		—			—			—
Income taxes		—			—			—
Supplemental disclosure of non-cash financing activities Debts settled through shares issuance		993,250			—			993,250