Restatement of Previously Issued Consolidated Financial Statements

3 Months Ended

Jun. 30, 2020

Accounting Changes and Error Corrections [Abstract]

Restatement of Previously Issued Consolidated Financial Statements

NOTE 2 – RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS

The Company has determined that in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606, Revenue from Contract with Customers, the Company incorrectly accounted for the cost of its co-op promotion allowances (previously referred to as “cooperative advertising”) with its customers as selling expenses instead of a reduction in net sales for each of the three months ended June 30, 2020 and 2019, as these co-op promotion allowances are not a distinct good or service and the Company cannot reasonably estimate the fair value of the benefit it receives from these arrangements.

The effects of this accounting error do not impact the condensed consolidated balance sheets, statements of cash flows and statements of shareholders’ equity. The effects are confined to the condensed consolidated statements of operations, and these notes to condensed consolidated financial statements. The tables below set forth the condensed consolidated statements of operations, including the balances as originally reported, adjustments and the as restated balances for each of the periods affected:

	Originally Reported For the Three Months Ended June 30, 2020			Adjustment			As Restated For the Three Months Ended June, 30, 2020
Net Sales	$	3,323,543		$	(271,560	)	$	3,051,983
Cost of Goods Sold		2,089,531			-			2,089,531
Gross Profit		1,234,012			(271,560	)		962,452
Operating Expenses
Selling expenses		570,553			(271,560	)		298,993
General and administrative expenses		1,363,290			-			1,363,290
Depreciation		71,107			-			71,107
Total Operating Expenses		2,004,950			(271,560	)		1,733,390
Loss from Operations		(770,938	)		-			(770,938	)
Other Income (Expenses)
Gain from damaged goods insurance claim		131,292			-			131,292
Gain from extinguishment of accounts payable		390,000			-			390,000
Interest Expense		(29,590	)		-			(29,590	)
Finance Costs		(6,405	)		-			(6,405	)
Total Other Income (Expenses), net		485,297			-			485,297
Loss Before Income Tax Benefit		(285,641	)		-			(285,641	)
Income Tax Benefit		78,837			-			78,837
Net Loss	$	(206,804	)	$	-		$	(206,804	)

	Originally Reported For the Three Months Ended June 30, 2019			Adjustment			As Restated For the Three Months Ended June, 30, 2019
Net Sales	$	4,809,040		$	(168,802	)	$	4,640,238
Cost of Goods Sold		3,821,334			-			3,821,334
Gross Profit		987,706			(168,802	)		818,904
Operating Expenses
Selling expenses		659,293			(168,802	)		490,491
General and administrative expenses		1,371,056			-			1,371,056
Depreciation		59,461			-			59,461
Total Operating Expenses		2,089,810			(168,802	)		1,921,008
Loss from Operations		(1,102,104	)		-			(1,102,104	)
Other Expenses
Interest Expense		(2,875	)		-			(2,875	)
Finance Costs		(3,333	)		-			(3,333	)
Total Other Expenses		(6,208	)		-			(6,208	)
Loss Before Income Tax Benefit		(1,108,312	)		-			(1,108,312	)
Income Tax Benefit		238,731			-			238,731
Net Loss	$	(869,581	)	$	-		$	(869,581	)