RESTATEMENT

3 Months Ended

Mar. 31, 2019

In connection with the preparation of the Company’s unaudited condensed consolidated financial statements for the period ended September 30, 2019, management determined that it had incorrectly accounted for its VIE as an equity method investment in its unaudited condensed consolidated financial statements for the period ended March 31, 2019 and did not consolidate its VIE in the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2019, as originally filed with the SEC on May 20, 2019 (the “Original Filing”).

Based on management’s analysis, in accordance with ASC 810-10-25-22 – Consolidation – Variable Interest Entities, the Company determined that the equity investors lacked characteristics of a controlling financial interest and the initial equity investments in these entities may be or were insufficient to meet or sustain its operations without additional subordinated financial support from other parties. Additionally, the Company determined that it is the primary beneficiary of the VIE because the Company is the sole service provider (some through service agreements), which gave the Company the right to receive (and the Company has received) the proceeds from the VIE’s operations. Accordingly, the Company restated its unaudited condensed consolidated financial statements to include the consolidated financial position and results of operations of its VIE since its inception, which occurred during the three months ended March 31, 2019, which is included in this Amendment No. 1 to the Company’s Quarterly Report on Form 10-Q/A for quarter ended March 31, 2019.

Accordingly, the Company’s unaudited condensed consolidated balance sheet at March 31, 2019 and for the three months ended March 31, 2019 and the condensed consolidated statements of operations have been restated herein. The effect of correcting this error in the Company’s condensed consolidated financial statements at March 31, 2019 and for the three months ended March 31, 2019 are shown in the table as follows:

Condensed Consolidated Balance Sheet Data (Unaudited):

	March 31, 2019
	As Previously Reported			Adjustments			Restated

Accounts receivable, net	$	503,141		$	(3,912	)	$	499,229
Accounts receivable - related party	$	250,000		$	(250,000	)	$	—
Total Assets	$	4,268,169		$	(253,912	)	$	4,014,257

Accrued expenses - related party	$	45,151		$	(151	)	$	45,000
Total Liabilities	$	672,068		$	(151	)	$	671,917

Stockholders’ Equity:
Common Stock	$	10,247		$	(100	)	$	10,147
Additional paid in capital	$	76,353,211		$	(3,513	)	$	76,349,698
Accumulated deficit	$	(75,585,537	)	$	(128,761	)	$	(75,714,298	)
Total Rokk3r, Inc Stockholders' Equity		778,026			(132,374	)		645,652

Non-controlling interest in consolidated subsidiary and VIE (Note 5)	$	(3,656	)	$	(121,387	)	$	(125,043	)

Total Stockholders’ Equity	$	774,370		$	(253,761	)	$	520,609
Total Liabilities and Stockholders’ Equity	$	4,268,169		$	(253,912	)	$	4,014,257

a)	Decrease of accounts receivable and accounts receivable - related party of $3,912 and $250,000, respectively, from elimination of inter-company receivables as a result of consolidating the VIE.

b)	Aggregate decrease in total assets of $253,912 from above change as a result of consolidating the VIE.

c)	Decrease of accrued expenses - related party of $151 due to elimination of inter-company balance as a result of consolidating the VIE.

d)	Decrease of common stock of $100 due correction of common stock attributed to the Company.

e)	Decrease of additional paid-in-capital of $3,513 due to elimination of VIE’s paid-in-capital as a result of consolidating the VIE.

f)	Increase of accumulated deficit of $128,761 due to addition of VIE’s net loss attributed to the Company as a result of consolidating the VIE.

g)	Increase of non-controlling interest in consolidated VIE of $121,387 due to addition of VIE’s non-controlling interest attributed to the VIE as a result of consolidating the VIE.

h)	Aggregate increase in total liabilities and stockholders’ equity of $253,912 from above changes as a result of consolidating the VIE.

Consolidated Statement of Operations (Unaudited):

	For the Three Months Ended March 31, 2019
	As Previously Reported			Adjustments				Restated

Revenues	$	888,920		$	(3,912	)		$	885,008
Revenues – related party		250,000			(250,000	)			—
Total Revenue	$	1,138,920		$	253,912		(a)	$	885,008

Loss on equity method investments	$	(151	)	$	151		(b)	$	—

Net Loss Attributable to Common Stockholders Before Allocation to Non-controlling Interest	$	(518,336	)	$	(356,073	)	(c)	$	(874,409	)

Less Net Loss Allocated to Non -controlling Interest in Consolidated Subsidiary and VIE		(3,656	)		(125,000	)	(d)		(128,656	)

Net Loss Applicable to Rokk3r, Inc Common Stockholders	$	(514,680	)	$	(231,073	)		$	(745,753	)

a)	Aggregate decrease of revenues and revenues -related party for the three months ended March 31, 2019 of $253,912 due to elimination of inter-company revenue as a result of consolidating the VIE.

b)	Decrease of loss on equity method investments for the three months ended March 31, 2019 of $151 as a result of consolidating the VIE.

Increase of net loss attributable to common stockholders before allocation to non-controlling interest for the three months ended March 31, 2019 of $253,761 due to the changes discussed above as a result of consolidating the VIE. Further, $102,312 is the result of Series B Preferred Stock redemption premium for the three months ended March 31, 2019 not previously reported.

d)	Increase of net loss allocated to non-controlling interest for the three months ended March 31, 2019 of $125,000 as a result of consolidating the VIE.

Rokk3r Inc. 10-Q/A