UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended June 30, 2014
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ___________ to __________
Commission file number 000-56035
GLOBAL WHOLEHEALTH PARTNERS CORPORATION
(Exact name of the Companyregistrant as specified in its charter)
Nevada | 46-2316220 | |
( | (I.R.S. Employer Identification No.) | |
1402 N El Camino Real | ||
San Clemente, California | 92672 | |
(Address of principal executive offices) | (Zip Code) |
(714) 392-9752 |
(Address of principal executive offices) (Zip Code)
Securities registered pursuant to Section 12(b) of the Exchange Act:
Securities registered pursuant to Section 12(g) of the Exchange Act:
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o ☐ No x
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 13(d)15(d) of the Act. Act.
Yes o ☒ No x
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes x ☒ No o
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Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained in this form,herein, and will not be contained, to the best of registrant'sregistrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. To the best of registrants' knowledge, there are no disclosures of delinquent filers required in response to Item 405 of Regulation S-K. Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company or an emerging growth company. See the definitions of "large“large accelerated filer"filer,” “accelerated filer”, "accelerated filer"“smaller reporting company” and "small reporting company"“emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer | ☐ | Accelerated filer | ☐ | |
Non-accelerated filer | ☒ | Smaller reporting company | ☒ | |
Emerging growth company | ☒ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act)Exchange Act.). Yes o ☐ No x
The aggregate market value of the voting and nonvotingnon-voting common equity held by non-affiliates of Texas Jack Oil and Gas Corp.the registrant as of the last business day of the registrant’s most recently completed second fiscal quarter, based upon the closing sale price of the registrant’s common stock on December 31, 2020, as reported on the OTC Markets Group Inc. Pink tier (the “OTCPink”) was approximately $0.
As of September 15, 2021 there were 82,057,885 shares of the registrant’s $0.001 par value common stock outstanding as of September19, 2014 was 23,400,000.
DOCUMENTS INCORPORATED BY REFERENCE
None.
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TABLE OF CONTENTS
GLOBAL WHOLEHEALTH PARTNERS CORPORATION
ANNUAL REPORT ON FORM 10-K
FOR THE YEARS ENDED JUNE 30, 2021 AND 2020
Page | ||||
PART I | ||||
Item 1. | 4 | |||
Item 1A. | 5 | |||
Item 1B. | 5 | |||
Item 2. | 7 | |||
Item 3. | 7 | |||
Item 4. | 7 | |||
PART II | ||||
Item 5. | 7 | |||
Item 7. | Operations | 10 | ||
Item 7A. | 14 | |||
Item 8. | 15 | |||
Item 9. | 34 | |||
Item | 34 | |||
Item 9B. | 34 | |||
PART III | ||||
Item 10. | 36 | |||
Item 11. | 39 | |||
Item 12. | 41 | |||
Item 13. | 41 | |||
Item 14. | 43 | |||
PART IV | ||||
Item 15. | 44 | |||
SIGNATURES | 45 | |||
EXHIBIT INDEX | 46 | |||
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PART I
Forward-Looking Statements
This Annual Report on Form 10-K contains forward looking statements. Forward-looking statements discuss matters that are not purely historical and that are “forward-looking statements.” Such forward-looking statements include, but are not limited to, statements regarding our and their management's expectations, hopes, beliefs, intentions or strategies regarding the future, including our financial condition and results of operations. In addition, any statements that refer to projections, forecasts or other characterizations offacts. Because they discuss future events or circumstances, including any underlying assumptions, areconditions, forward-looking statements. Thestatements may include words “anticipates,such as “anticipate,” “believes,“believe,” “continue,“estimate,” “intend,” “could,” “estimates,“should,” “expects,” “intends,“would,” “may,” “seek,” “plan,” “might,” “plans,“will,” “possible,“expect,” “predict,” “project,” “forecast,” “potential,” “predicts,” “projects,” “seeks,” “should,” “will,” “would” and“continue” negatives thereof or similar expressions, or the negatives of such terms, may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.
Although forward-looking statements in this report reflect the partiesgood faith judgment of our management, forward-looking statements are inherently subject to known and the transaction. There can be no assurance that future developments actually affecting us will be those anticipated. Theseunknown risks, business, economic and other risks and factors that may cause actual results or performance to be materially different from those discussed in these forward-looking statements. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. Accordingly, you are urged not to place undue reliance on these forward-looking statements, includingwhich speak only as of the followingdate of this report.
We assume no obligation to update any forward-looking statements involve a numberin order to reflect any event or circumstance that may arise after the date of risks, uncertainties (some of which are beyond the parties' control)this report, other than as may be required by applicable law or other assumptions.
All references to “we,” “us,” or “our” refer to Global WholeHealth Partners Corporation.
Item
1. BusinessBackground
Global WholeHealth Partners Corporation (the “Company”) was incorporated on March 7, 2013 in the State of Nevada on March 7, 2013, underNevada. On May 9, 2019, the Company amended its Articles of Incorporation to effect a change of name of Texas Jack Oil & Gas Corporation.
Our Business
Global WholeHealth Partners Corporation develops and operating history. Our independent auditor has issued an audit opinionmarkets in-vitro diagnostic (“IVD”) tests for over-the-counter (“OTC” or consumer), or consumer-use and point-of-care (“POC” or professional) which includes hospitals, physicians’ offices and medical clinics, including those within penal systems throughout the US and abroad. The Company currently markets a statement expressing substantial doubtrange of diagnostic test kits for consumer use through OTC sales, and for use by health care professionals, generally located at medical clinics, physician offices and hospitals known POC, in the United States. These test kits are known as in-vitro diagnostic test kits or IVD products.
All of the products we sell are manufactured in a U.S. Food and Drug Administration (“FDA”) Approved Facility in the USA. An FDA Approved facility is a facility that meets Good Manufacturing Practices (“GMP”) with the FDA.
We sell products internationally which are not FDA approved to oursell in the US. These products include an FDA Certificate of Exportability and include tests such as Ebola, ZIKA, Dengue, Malaria, Influenza, Tuberculosis, Corona Viruses, and other vector borne diseases.
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CoVid-19 Activities
In response to the novel strain of coronavirus (“COVID-19”) pandemic, in early January 2020, the Company set out to test and perform the studies necessary to develop a Rapid Diagnostic IgG/IgM 10-minute Rapid Test (“RDT”) and Real Time Polymerase Chain Reaction Test (“RT-PCR”). On March 15, 2020, the Company received an Acknowledgment Letter from the FDA for the RT-PCR and the Company’s submission had been assigned document control number PEUA200084. On April 6, 2020, the Company received an Acknowledgment Letter from the FDA for the RDT and the Company’s submission had been assigned document control number EUA200181. Concurrently, with the efforts to get FDA approval of the RDT and RT-PCR, on May 22, 2020, the Company, received a Letter of Authorization from 1drop Inc. authorizing the Company to sell 1drop Inc.’s 1copy TM COVID-19 qPCR Multi Kit, which had received Emergency Use Authorization from the FDA. On August 3, 2020, the Company received a Letter of Authorization from Healgen Scientific Limited authorizing the Company to sell Healgen Scientific Limited’s SARS-COV-2 IgG/IgM Antibody Whole Blood, Serum and Plasma. On September 14, 2020, the Company received an Acknowledgment Letter the FDA had received the Company’s Global Rapid Antigen Test application, a new test developed by the Company. The Company’s submission was assigned document control number PEUA201789.
To date, the Company has been unable to gain FDA approval of its EUA applications primarily due to financial constraints and the high cost of required testing to gain FDA approval. Early in the pandemic, the sale of unapproved tests was common place, and provided the Company with the expectation that it would be able to subsidize the FDA approval process. However, due to unprecedented efforts by larger diagnostics companies, FDA approval of various tests arrived quickly causing marketplace demand to shift away from unapproved COVID-19 tests thereby rendering the Company’s unapproved products uncompetitive. The Company was also unable to sell a material quantity of the 1drop Inc. and Healgen FDA approved tests due to insufficient funds for marketing, their high relative cost and the rapid commoditization of COVID-19 tests in general.
Plan of Operation
As a result of the COVID-19 pandemic, the Company became laser focused on developing and selling COVID tests beginning in the second half of fiscal 2020. Over the course of 2021, the Company continued its efforts to develop an RDT, RT-PCR and antigen test and will continue to do so if economics and the Company’s ability to continue as a going concern. We currently own a 3% working interest in one wellfinance FDA approval makes sense. Due to the Bright 1H, which was drilled in late summercommoditization of 2012COVID-19 tests, the Company expects that it will no longer offer for resale the tests it purchases from other companies and was completed and placed into production in October 2012. The well has been drilled with lateral lines that are approximately 2,000 feet in length. There are a total of three producing wells on this property however Texas Jack only has an interest in one wellany future COVID-19 tests offered by the Bright 1H.
The Company is currently in the process of oil had been taken from county lands since 1923.
Industry
The In-vitro Diagnostic (“IVD”) testing industry encompasses the following two primary categories: the over-the-counter market (“OTC”), Waco: Texian Press, 1974).
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The Company believes, according to publicly available sources, that the Bright 1H and possible additional property, the operator of our one well the Bright 1H will continue to target refiners, remarketers and third party intermediaries, who either have, or have access to, consumer delivery systems. Southlake Operating LLC the third –party operator will continue to sell the oil from our one well the Bright 1H under both short-term (less than one year) and long-term (one year or more) agreements at prices negotiated with third parties. Currently Spears Oil,IVD industry is a third party operator, picks up the oil from the Bright 1H and sells it to Shell Oil Company. The price is based upon a 20-day floating average. Typically either the entire contract (in the case of short-term contracts) or the price provisions of the contract (in the case of long-term contracts) are renegotiated at intervals ranging in frequency from daily to annually.
Competition
Diagnostic products are subject to regulation by statecompetition in technological innovation, price, convenience of use, service, instrument warranty provisions, product performance, laboratory efficiency, long-term supply contracts, and product potential for overall cost-effectiveness and productivity gains. Some products in this segment can be subject to rapid product obsolescence or regulatory commissions. changes. We compete with several companies around the world who possess significantly greater technical and financial resources and professional and consumer reach and recognition, including Accon Labs, Johnson & Johnson, DB, Abbott, and Roche all of whom carry similar products.
Marketing and Sales
The basisCompany is focused on generating increased sales through online retail, large and small distributors and directly to doctors, hospitals, clinics and governments. The Company is taking steps and developing the materials needed to effect its marketing strategy.
Research and Development
We are continuing to look for intrastate oil pipeline regulation, and the degree of regulatory oversight and scrutiny given to intrastate oil pipeline rates, varies from state to state.
Employees
As of oil properties, the establishment of maximum allowable rates of production from oil wells, the regulation of well spacing,June 30, 2021, we have no full-time employees. Charles Strongo our CEO, Treasurer and pluggingChairman, F. Rene Alvarez, our COO, President and abandonment of wells. The effect of these regulations is to limit the amount of oil that can be produced from wellsDirector and to limit the number of wells or the locations, although companies can apply for exceptions to such regulations or to have reductions in well spacing. Moreover, each state generally imposes a production or severance tax with respect to the productionDr. Shuijie Cui, our Chief Science Officer and sale of oil within its jurisdiction.
Other Information
Our website address is www.gwhpcorp.com. The public may read and copy any materials filed by uswe file with the United States Securities and Exchange Commission at the Securities and Exchange Commission's Public Reference Room at 100 F Street, N.E. Washington, D.C. 20549. Information(“SEC”) on the operation of the Public Reference Room may be obtained by calling the Securities and Exchange CommissionSEC’s website at 1-800-732-0330. The Securities and Exchange Commission maintains an internet website (http://www.sec.gov) thatwww.sec.gov which site contains reports, proxy and information statements, and other information regarding issuers, such as us, that file electronically with the Securities and Exchange Commission.
The Company’s executive office is located at 1402 N El Camino Real, San Clemente, CA 92672 The Company’s telephone number is (714) 392-9752.
ITEM 1A. RISK FACTORS
Smaller reporting companies are not required to provide the information required by this prospectus,Item 1A.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
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ITEM 2. PROPERTIES
We utilize approximately 1,500 square feet of office and warehouse space located at 1402 North El Camino Real, San Clemente, California 92672. The space is leased pursuant to a sublease on a month-to-month basis with monthly rent due of $3,700.
ITEM 3. LEGAL PROCEEDINGS
We are not party to nor are we aware of any material pending lawsuit, litigation or proceeding.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Information
Our common stock is quoted on the OTC Pink tier (the “OTCPink”) under the symbol “GWHP”.
The market price of our common stock is subject to significant fluctuations in response to variations in our quarterly operating results, general trends in the market, and other factors, over many of which we have commencedlittle or no control. In addition, broad market fluctuations, as well as general economic, business operations but have not yet generated any revenues.
On May 9, 2019, the Board of Directors authorized a one for five hundred (1:500) reverse stock split which became effective on May 20, 2019. All share amounts contained in this Annual Report reflect this reverse split
Holders
Our Certificate of Incorporation authorizes the issuance of those securities could result in dilutionup to our existing security holder. If we raise money400,000,000 shares of common stock, par value $0.001 per share and 10,000 shares of preferred stock, par value $0.001 per share. As of September 8, 2021, there were 384 stockholders of record holding an aggregate of 82,057,885 shares of common stock (this number does not include stockholders who hold their stock through debt financing or bank loans, we may be required to secure the financing with some or allbrokers, banks and other nominees). No preferred stock has been issued.
Transfer Agent
The transfer agent of our business assets, which could be sold or retained by the creditor should we default in our payment obligations. If we fail to raise sufficient funds, we would have to curtail or cease operations.
Dividend Policy
We have never declared or paid any cash dividends or distributions on any of our capital stock. Westock and we currently intend to retain our future earnings, if any, to support operationsfund the development and to finance expansion and therefore wegrowth of our business. We do not anticipate paying anyintend to pay cash dividends onto holders of our common stock in the foreseeable future.
Penny Stock
Our controlling security holder may take actions that conflict with your investment.
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Penny stocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system). Penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer’s account. The broker-dealer must also make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These requirements may have the effect of reducing the level of trading activity, if any, in the secondary market for a security that becomes subject to the penny stock rules. The additional burdens imposed upon broker-dealers by such requirements may discourage broker-dealers from effecting transactions in our securities, which could severely limit thetheir market price and liquidity of our securities. These requirements may restrict the ability of broker-dealers to sell our common stock and may affect yourthe ability of our stockholders to resell our common stock.
Securities Authorized for Issuance under Equity Compensation Plans
None.
Recent Sales of Unregistered Securities
LionsGate Funding Management LLC 300,000 shares of common stock - On July 10, 2021, the Company and LionsGate Funding Management LLC (“LGFM”) entered into a stock option planMedia and we have not issued any warrants, options or other rightsMarketing Services Agreement (the “MMSA”). Pursuant to acquire our securities.
Firstfire Global Opportunities Fund LLC Senior Secured Convertible Promissory Note and 165,000 Stock Purchase Warrants - On June 18, 2021, the issuance and sales of securities without registration since inception. No such sales involved the use of an underwriter; no advertising or public solicitation was involved; the securities bearCompany entered into a restrictive legend; and no commissions were paid in connectionSecurities Purchase Agreement with Firstfire Global Opportunities Fund LLC, for the sale of any securities.
Geneva Roth Remark Holdings, Inc. Promissory Note and Warrant to purchase 51,975 shares of common stock - On April 26, 2021, the Company and Geneva Roth Remark Holdings, Inc. ("Geneva") entered into a Securities Purchase Agreement (the "SPA"). Pursuant to the SPA, The Company sold to Geneva a Promissory Note for the principal amount of $86,625 (the "Geneva Promissory Note") and issued a warrant to purchase up to 51,975 shares of common stock (the “Geneva Warrant”). On August 9, 2021, the Company repaid, in whole, the balance due under the Geneva Promissory Note, or $57,173. For additional information see, “NOTE 6 – Convertible Promissory Notes” under Item 8 of this Annual Report.
Geneva Convertible Promissory Notes dated July 13, 2020, August 3, 2020 and September 8, 2020 396,486 shares of common stock - On July 13, 2020, August 3, 2020 and September 8, 2020, the Company and Geneva entered into separate and identical Securities Purchase Agreements (the "Geneva SPAs"). Pursuant to the Geneva SPAs, Geneva and the Company entered into separate and identical Convertible Promissory Notes also dated as of July 13, 2020, August 3, 2020 and September 8, 2020 for principal amounts of $63,000, $55,000 and $53,000, respectively (collectively, the "Geneva CPNs"). Pursuant to the terms of the Geneva CPNs, the Company received net proceeds of $60,000, $52,000 and $50,000. The Geneva CPNs were convertible into shares of common stock any time after 180 days at a conversion price equal to 58% of the lowest trading price during the twenty-trading day period ending on the latest complete trading day prior to the conversion date. On December 21, 2020, the Company paid $90,487 as full payment of the Geneva CPN dated July 13, 2020. On February 16, 2021, Empire Associates, Inc., an unaffiliated company, paid off the balance, in-full, on the note dated August 3, 2020. The payment totaled $77,061. Empire Associates agreed to accept 250,000 shares of common stock in full satisfaction of the $77,061 paid to Geneva on behalf of the Company. On March 15, 2021, the Company issued 146,486 shares of common stock to Geneva upon their conversion, in-full, of amounts owing under the Geneva CPN dated September 8, 2020. For additional information see “NOTE 6 – Convertible Promissory Notes”, under Item 8 of this Annual Report.
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Nunzia Pharmaceutical, Inc. 5,000,000 shares of common stock - On April 12, 2021, the Company and Nunzia Pharmaceutical, Inc. entered into a Mutual Sales and Marketing Agreement (the “MSMA”). Pursuant to the terms of the MSMA, each company has mutual abilities to share their products for sale under nonexclusive but favorable conditions and prices. The duration of the agreement is for an initial period of five years commencing on April 12, 2021. As consideration for the MSMA, the Company agreed to issue 5,000,000 shares of its restricted common stock to Nunzia and Nunzia agreed to issue 5,000,000 shares of its restricted common stock to the Company.
Charles Strongo IP License Agreement 5,000,000 shares of common stock - On March 30, 2021, the Company entered into a License Agreement (the “IP LicenseAgreement”) with Charles Strongo. Under the terms of the IP License Agreement, the Company has the exclusive license to use the intellectual property, “A Rapid, Micro-Welt or Later flow text for Parkinson’s, Dementia, or Alzheimer or ASD.” The Company agreed to issue 5,000,000 shares of common stock and pay a 2% fee of gross sales from use of the intellectual property. For additional information see “NOTE 4 – Stockholders’ Equity”, under Item 8 of this Annual Report.
LionsGate Funding Group LLC 1,750,000 shares of common stock - On February 21, 2021, the Company agreed to issue and on February 25, issued 1,750,000 shares to LionsGate. The Company recorded compensation expense of $1,680,000.
Charles Strongo Patent License Agreement 3,000,000 shares of common stock - On January 12, 2021, the Company entered into a License Agreement (the “PatentLicenseAgreement”) with Charles Strongo. Under the terms of the Patent License Agreement, the Company has the exclusive license to manufacture, sell and license to be manufactured the only Biodegradable plastic for medical devices. The devices include cassettes, midstream, small buffer bottles, urine cups, and any other plastic type of medical device used in testing or for medical services under provisional patent number 63/054,139. The Company agreed to issue 3,000,000 shares of restricted common stock and pay a 2% fee of gross sales from use of the patent. For additional information see “NOTE 4 – Stockholders’ Equity”, under Item 8 of this Annual Report.
Board of Directors 1,200,000 shares of common stock - On January 5, 2021, the Board appointed a new member, Dr. Miriam Lisbeth Paez De La Cerda and issued 200,000 shares of restricted common stock to each of the six Directors for a total issuance of 1,200,000 shares valued at $0.72 per share, the closing price of our common stock on January 5, 2020.
Sale of 250,000 shares of common stock - On December 15, 2020, the Company sold 250,000 shares of restricted common stock for $0.36 per share and received $90,000. These shares were issued on February 5, 2021, and are included in exchangethe earnings per share calculation on an as-if-issued basis.
Dr. Scott Ford 264,298 shares of rights in mine property valuedcommon stock - On each of September 24, 2020 and July 9, 2020, the Company and Dr. Scott Ford, Director, entered into a subscription agreement for the purchase 219,298 and 45,000 shares of restricted common stock at $165,000, or $0.011a price of $1.14 and $2.00 per share.
EMC2 Capital, LLC 1,415,094 Commitment Shares, 2,000,000 Commitment Warrant and 721,663 Purchase Shares - On July 22, 2020, the Company entered into a Common Stock Purchase Agreement (the “EMC2 SPA”) and a Registration Rights Agreement with EMC2 Capital, LLC (“EMC2 Capital”) pursuant to which EMC2 Capital agreed to invest up to One Hundred Million Dollars ($100,000,000) to purchase the Company’s common stock at a private placement under Rule 506purchase price as defined in the Common Stock Purchase Agreement (the "Purchase Shares"). As consideration for entry into the EMC2 SPA, the Company agreed to issue 1,415,094 shares of common stock (the "Commitment Shares") and a warrant to purchase up to two million (2,000,000) shares of common stock (the “Commitment Warrant”). The Commitment Warrant vested upon issuance, expires on its fifth anniversary and had an initial exercise price of $1.59 per share subject to adjustment. The Company agreed to issue a Registration Rights Agreement as an inducement to EMC2 Capital to execute and deliver the EMC2 SPA. The obligation to issue the Commitment Shares and Commitment Warrant and the right of the Regulation DCompany to sell Purchase Shares to EMC2 Capital was dependent on the Company satisfying certain conditions, including notice of Section 4(2)effectivness of the shelf registration statement registering the Purchase Shares and the issuance of the Commitment Shares and Commitment Warrant. Fom Our Form S-1 registering 11,993,271 shares of common stock related to the EMC2 SPAwas filed on January 28, 2021 and declared effective on March 3, 2021. As a result of the Securities Actand Exchange Commission declaring our Registration on Form S-1 effective, the pre conditions necessary for the Company to begin selling Purchase Shares to EMC2 Capital were removed. During fiscal 2021, from March 3, 2021 through June 30, 2021, the Company sold 721,663 Purchase Shares to EMC2 Capital at prices ranging from $0.32 - $0.37 and received total proceeds of 1933, as amended,$250,051. For additional information see “NOTE 4 – Stockholders’ Equity”, under Item 8 of this Annual Report.
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Fiscal 2020 3,850,000 shares of common stock – On October 15, 2019, the Company sold 8,400,000 common2,000,000 shares for $8,400 in cash, or $0.001at $0.01 per share to LionsGate in exchange for cash of $20,000 and on May 8, 2020, the Company issued 1,850,000 shares valued at $2.00 as a totalbonus for prior service, including related party issuances of ten investors.
The securities issued above were issued by the Company under the exemption from registration afforded by Section 4(a)(2) of the Securities Act, as amended and/or Regulation D promulgated thereunder, as the securities were issued to accredited investors, without a view to distribution, and were not issued through any general solicitation or advertisement.
Additional Information
Copies of our annual reports, quarterly reports, current reports, and any amendments to those reports, are available free of charge on the internet at www.sec.gov. All statements made in any of our filings, including all forward-looking statements, are made as of the date of the document(s) in which the statement is included, and we do not assume or undertake any obligation to update any of those statements or documents unless we are required to do so by law.
Item
7. Management’s Discussion and Analysis of Financial condition and results of operationsThe following Management’s Discussion and Analysis (“MD&A”) is intended to help the reader understand the consolidated results of operations and financial condition of Global WholeHealth Partners Corporation. The MD&A is provided as a supplement to, and should be read in conjunction with financial statements and the accompanying notes to the financial statements included in this Form 10-K.
Our discussion and analysis of our financial condition and results of operations
Overview
We sell and develop in-vitro diagnostic products, including rapid diagnostic tests, such as the forward-looking statements. COVID-19 test, 6-minute rapid whole blood Ebola test, 6-minute whole blood Zika test, 8-minute whole blood rapid TB test and over 75 other tests more than 40 which are FDA approved.
The Company cautions you notwas founded to place undue reliance ondevelop and market in-vitro diagnostic (“IVD”) tests for over-the-counter (“OTC” or consumer), or consumer-use and point-of-care (“POC” or professional) which includes hospitals, physicians’ offices and medical clinics, including those within penal systems throughout the statements, which speak onlyUS and abroad. The Company currently markets a range of diagnostic test kits for consumer use through OTC sales, and for use by health care professionals, generally located at medical clinics, physician offices and hospitals known POC, in the United States. These test kits are known as in-vitro diagnostic test kits or IVD products.
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All of the dateproducts we sell are manufactured in a U.S. Food and Drug Administration (“FDA”) Approved Facility in the USA. An FDA Approved facility is a facility that meets Good Manufacturing Practices (“GMP”) with the FDA.
We sell products internationally which are not FDA approved to sell in the US. These products include an FDA Certificate of this Form 10-K. Exportability and include tests such as Ebola, ZIKA, Dengue, Malaria, Influenza, Tuberculosis, Corona Viruses, and other vector borne diseases.
The cautionary statements contained or referred to in this section should be considered in connection with any subsequent written or oral forward-looking statements that the Company or persons acting on its behalf may issue. The Company does not undertake any obligation to review or confirm analysts’ expectations or estimates or to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date of this Form 10-K or to reflect the occurrence of unanticipated events.
As of June 30, 20142021, we had negative working capital of $104,534, a cash balance of $74,702 and 2013.
| Years ended June 30 | 2014 | 2013 | ||||||
Revenue | $ | 4,083 | $ | - | ||||
Selling, general and administrative expenses | (95,068 | ) | (34,419 | ) | ||||
Net operating loss | (90,985 | ) | (34,419 | ) | ||||
Other expense | (8,276 | ) | (1,183 | ) | ||||
Net loss | (99,261 | ) | (35,602 | ) | ||||
Net loss per share - basic and diluted | (0.00 | ) | (0.00 | ) | ||||
Weighted average shares - basic and diluted | 23,179,726 | 16,000,522 | ||||||
COVID-19
In late 2019, COVID-19 was reported to finance our operating losseshave surfaced in suchWuhan, China, which has since spread globally. In March 2020, the World Health Organization declared COVID-19 a manner. We have, however, been able to raise additional fundsglobal pandemic. The COVID-19 outbreak has resulted in government authorities in the pastUnited States and around the world implementing numerous measures to try to reduce the spread of COVID-19, such as travel bans and restrictions, social distancing, quarantines, shelter in place or total lock-down orders and business limitations and shutdowns. While some of these measures were relaxed or rolled back, we believe that we will be ablecontinue to do so inmonitor the future.
Results of Operations
Year ended June 30, 2014 and 2013.
| 2014 | 2013 | |||||||
Current Assets | $ | 5,874 | $ | 42,681 | ||||
Current Liabilities | 115,217 | 117,183 | ||||||
Working Capital (Deficit) | $ | (109,343 | ) | $ | (74,502 | ) | ||
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| Year Ended June 30, |
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| 2021 |
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| 2020 |
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| Increase / (Decrease) |
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Revenue |
| $ | 40,196 |
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| $ | 241,624 |
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| $ | (201,428 | ) |
Cost of revenue |
|
| 201,495 |
|
|
| 150,588 |
|
|
| 50,907 |
|
Gross profit |
|
| (161,299 | ) |
|
| 91,036 |
|
|
| (252,335 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Professional fees |
|
| 83,790 |
|
|
| 61,550 |
|
|
| 22,240 |
|
Research and development |
|
| 481,740 |
|
|
| 513,003 |
|
|
| (31,263 | ) |
Selling, general and administrative |
|
| 317,062 |
|
|
| 82,078 |
|
|
| 234,984 |
|
Stock compensation |
|
| 2,544,000 |
|
|
| 3,700,000 |
|
|
| (1,156,000 | ) |
Total operating expenses |
|
| 3,426,592 |
|
|
| 4,356,631 |
|
|
| (930,039 | ) |
Loss from operations |
|
| (3,587,891 | ) |
|
| (4,265,595 | ) |
|
| (677,704 | ) |
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
| (64,732 | ) |
|
| (2,857 | ) |
|
| 61,875 |
|
Interest recorded on compensatory warrants |
|
| (737,569 | ) |
|
| - |
|
|
| 737,569 |
|
Amortization of debt discount |
|
| (163,931 | ) |
|
| (17,075 | ) |
|
| 146,856 |
|
Loss on related party transfer of intangible assets |
|
| (4,480,000 | ) |
|
| - |
|
|
| 4,480,000 |
|
Total other income (expense) |
|
| (5,446,232 | ) |
|
| (19,932 | ) |
|
| 5,426,300 |
|
Net loss |
| $ | (9,034,123 | ) |
| $ | (4,285,527 | ) |
| $ | 4,748,596 |
|
| 11 |
Revenue and Cost of Revenue
During fiscal 2021, the Company’s sales decreased $201,428 from $241,624 in Fiscal 2020 to $40,196 in fiscal 2021. As a result of the COVID pandemic, the Company became laser focused on developing and selling COVID tests. The decrease in our revenue was due to our ability to sell unapproved COVID tests in fiscal 2020 compared to decreasing demand for unapproved tests beginning in fiscal 2021. Our attempts to develop our own FDA approved COVID test proved unsuccessful as was our ability to resell third party COVID tests primarily due to their high-cost relative to our competitors. The Company is currently in the process of refocusing its attention on marketing its core FDA OTC approved products which includes tests for pregnancy, ovulation, colorectal, drugs of abuse, glucose strips and glucose monitors through various platforms, including Walmart, Amazon and eBay. The Company estimates sales of non-COVID-19 tests to begin in fiscal Q2.
Cost of revenue increased in fiscal 2021 resulting in negative gross profit due primarily to fair value adjustments to inventory totaling $171,811 as a result of shelf-life expiration for some products.
Professional Fees
Professional fees relate to expenditures incurred primarily for legal, accounting and financing services. During fiscal 2021 professional fees increased $22,240 due to an $18,000 increase in accounting costs $12,240 increase in financing costs offset by an $8,000 decrease in legal fees.
Research and Product Development
Research and Product Development (“R&D”) costs represent costs incurred to develop our tests and are incurred pursuant to certain internal R&D cost allocations, when applicable, and agreements with third-party providers, but primarily with Pan Probe Biotech, owned by Dr. Shujie Cui, our Chief Science Officer. R&D costs are expensed when incurred. During fiscal 2021, R&D costs decreased $31,263 to $481,740 compared to $513,003 in fiscal 2020 primarily due to the timing of costs incurred related to COVID-19 test development.
Selling, General and Administrative
Selling, general and administrative (“SG&A”) costs include all expenditures related to personnel, travel and entertainment, public company compliance and communication costs, sales related costs, insurance and other office related costs. SG&A costs increased by $234,984 to $311,062 during fiscal 2021 compared to $82,078 during fiscal 2020. The increase is due to an increase in personnel costs ($162,500), public company related costs ($21,446), rent ($38,639), and marketing ($28,053) offset by a decrease in sales commissions ($13,920) and other G&A costs ($1,734).
Stock Compensation
Stock compensation represents the expense associated with the issuance of stock in exchange for services and is non-cash in nature. Stock compensation is based on our stock price at the measurement date and can fluctuate significantly as a result. Stock compensation expense in fiscal 2021 consisted of the issuance of 2,950,000 shares of restricted common stock at a weighted average price of $0.86 per share compared to the year ended Junefiscal 2020 issuance of 1,850,000 shares of restricted common stock at a weighted average price of $2.00 per share. All shares were issued free of obligation and are valued at the close price of our common stock on the date of grant.
| 12 |
Other Income and (Expense)
Other expense includes “interest expense” relates to the stated interest of our outstanding promissory notes, “interest recorded on compensatory warrants” relates to the relative value of warrants issued in conjunction with common stock as an inducement to enter into a stock purchase agreement with EMC2 Capital, “amortization of debt discount” represents the accretion of the discount applied to our notes as a result of the issuance and modification of detachable warrants and the beneficial conversion feature contained certain notes.
The loss on related party transfer of intangible assets represents value of two separate, exclusive, five-year, license agreements between the Company and Charles Strongo, our CEO, one for the manufacture of Biodegradable plastic for medical devices under provisional patent 63/054,139 and the second license agreement for the use of the intellectual property described as “a Rapid, Micro-Well or Later flow test for Parkinson’s, Dementia, or Alzheimer or ASD” (collectively, the “License Agreements”). The License Agreements were both executed on January 12, 2021 and March 30, 2013.
Liquidity and Capital Resources
As of June 30, 2014, from $74,502 at2021, our cash totaled $74,702, compared to current liabilities of $508,649. From inception to June 30, 2013. Accounts payable2021, we have incurred an accumulated deficit of $13,782,732. This loss has been incurred through a combination of professional fees, R&D, SG&A and accrued expenses increasednon-cash stock related costs of $11,493,569 to support our plans to develop our business. During fiscal 2021, the Company had revenue of $40,196, gross profit of negative $161,299 and used cash in operations of $642,802. The Company has incurred losses since inception and may not be able to generate sufficient net revenue from $5,000 asits business in the future to achieve or sustain profitability. The Company currently has insufficient funds to operate over the next twelve months. To finance our operations, we have entered into a Common Stock Purchase Agreement with EMC2 Capital LLC, which provided us with $250,000 (upon the sale of 721,663 shares of common stock) during the fourth quarter of fiscal 2021 and $800,000 (upon the sale of 2,343,986 shares of common stock) thus far in fiscal 2022. Additionally, we entered into a Securities Purchase Agreement and related 12% senior secured convertible promissory note on June 30, 2013 to $36,384 as18, 2021, under which the Company received funding of June 30, 2014 primarily$224,500 on July 8, 2021.We are currently pursuing additional funds through equity or debt financing or a combination thereof. However, aside from the recognitionEMC2 SPA, the Company has no commitments to obtain any such financing, and there can be no assurance that financing will be available in amounts or on terms acceptable to the Company, if at all.
Summary of accrued consulting fees.
Presented below is a table that summarizes the cash provided or used in our activities and the amount of the respective increases or decreases in cash provided by $32,000 to $72,000 as of June 30, 2014, from $40,000 at June 30, 2013. We also amended a related party note payable and reclassified $71,000 from notes payable current as of June 30, 2013 to noncurrent as of June 30, 2014.
|
| Year Ended June 30, |
|
| Increase / (Decrease) |
| ||||||
|
| 2021 |
|
| 2020 |
|
| |||||
Operating activities |
| $ | (642,802 | ) |
| $ | (685,136 | ) |
| $ | 42,334 |
|
Investing activities |
|
| (3,505 | ) |
|
| - |
|
|
| (3,505 | ) |
Financing activities |
|
| 706,512 |
|
|
| 679,715 |
|
|
| 26,797 |
|
Net increase (decrease) in cash |
| $ | 60,205 |
|
| $ | (5,421 | ) |
| $ | 65,626 |
|
Operating Activities
Net cash used in operating activities totaled $62,227. Cash provided by financing activitiesincreased $42,334 or 6% during fiscal 2021 compared to fiscal 2020.
Investing Activities
The Company purchased computer equipment totaling $3,505 in fiscal 2021.
| 13 |
Financing Activities
During fiscal 2021, the year ended June 30, 2014 was $25,420 and is attributable to $400 in proceedsCompany financed its operations from the sale of common stock $36,720 from the($680,051) and net issuance of promissory notes and set off with $11,700 net advances to the Company’s CEO.
Contractual Obligations
None.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements.
Critical Accounting Policies
Our discussion and gas production dependsanalysis of our financial condition and results of operations are based upon our Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the quantityUnited States of productionAmerica (“GAAP”). The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses, and the price obtainedrelated disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates based on its historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the production. An increase in prices will permit us to finance our operations to a greater extent with internally generated funds,carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may allow us to obtain equity financing more easilydiffer from these estimates under different assumptions or on better terms, and lessens the difficulty of obtaining financing. However, price increases heighten the competition for oil and gas prospects, increase the costs of exploration and development, and, because of potential price declines, increase the risks associated with the purchase of producing properties during times that prices are at higher levels.
Due to the costslevel of exploration, (v) may resultactivity and lack of complex transactions, we believe there are currently no critical accounting policies and estimates that affect the preparation of our financial statements.
Recently Issued Accounting Pronouncements
For a discussion of new accounting pronouncements see Note 2, Summary of Significant Accounting Policies, of the consolidated financial statements appearing elsewhere in marginally productive oil and gas wells being abandoned as non-commercial, and (vi) may increase the difficultythis Form 10-K.
Related Party Transactions
For a discussion of obtaining financing. However, price declines reduce the competition for oil and gas properties and correspondingly reduce the prices paid for leases and prospects.
ITEM 7A. Quantitative and Qualitative disclosures aboutDisclosures About Market Risk
Smaller reporting companies are not presently or otherwise engage in market risk sensitive instruments.
| 14 |
Item 8. Financial Statements and Supplementary Data
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page | ||
16 | ||
Consolidated Balance Sheets as of June 30, | 17 | |
Consolidated Statements of Operations | 18 | |
Consolidated | 19 | |
Consolidated Statements of Cash Flows | 20 | |
Notes | 21 |
To the shareholders and the board of Directors and Stockholdersdirectors of
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Texas Jack Oil & GasGlobal WholeHealth Partners Corporation (the “Company”), as of June 30, 20142021 and 2013 and2020, the related statements of operations, stockholders' equity (deficit), and cash flows for the yearyears then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 20142021 and 2020, and the results of its operations and its cash flows for the period from March 7, 2013 (date of inception) through June 30, 2013. years then ended, in conformity with accounting principles generally accepted in the United States.
Basis for Opinion
These financial statements are the responsibility of the Company’sCompany's management. Our responsibility is to express an opinion on thesethe Company's financial statements based on our audits.
We conducted our auditsaudit in accordance with the standards of the Public Company Accounting Oversight Board (United States of America).PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. OurAs part of our audits included considerationwe are required to obtain an understanding of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An
Our audit includesincluded performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence supportingregarding the amounts and disclosures in the financial statements. AnOur audit also includes assessingincluded evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statement presentation.statements. We believe that our auditsaudit provides a reasonable basis for our opinion.
Substantial Doubt about the financial statements referredCompany’s Ability to the above present fairly, in all material respects, the financial position of Texas Jack Oil & Gas Corporation.Continue as of June 30, 2014 and 2013, and the results of operations, equity and cash flows for the year ended June 30, 2014 and for the period from March 7, 2013 (date of inception) through June 30, 2013 in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 31 to the accompanying financial statements, the Company has not commenced its planned principalsuffered recurring losses from operations is incapable of generating sufficientand has a significant accumulated deficit. In addition, the Company continues to experience negative cash flow to sustain its operations without securing additional financing, which raisesflows from operations. These factors raise substantial doubt about itsthe Company's ability to continue as a going concern. Management's plans in regard to this matterthese matters are also described in Note 3.1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ RBSM LLP
BF Borgers CPA PC
We have served as the Company's auditor since 2019
Lakewood, CO
September 29, 2014
| 16 |
GLOBAL WHOLEHEALTH PARTNERS CORPORATION |
|
|
|
| ||||
CONSOLIDATED BALANCE SHEETS |
|
|
|
| ||||
|
|
|
|
| ||||
|
| June 30, |
| |||||
|
| 2021 |
|
| 2020 |
| ||
ASSETS |
|
|
|
|
|
| ||
Current assets: |
|
|
|
|
|
| ||
Cash |
| $ | 74,702 |
|
| $ | 14,497 |
|
Accounts receivable |
|
| 0 |
|
|
| 0 |
|
Prepaid expenses and other current assets |
|
| 27,918 |
|
|
| 15,064 |
|
Inventory, net |
|
| 29,681 |
|
|
| 152,147 |
|
Deferred financing costs |
|
| 271,814 |
|
|
| 0 |
|
Total current assets |
|
| 404,115 |
|
|
| 181,708 |
|
|
|
|
|
|
|
|
|
|
Equipment, net of accumulated depreciation of $1,067 |
|
| 2,438 |
|
|
| 0 |
|
Investment in related party common stock |
|
| 5,000 |
|
|
|
|
|
Total assets |
| $ | 411,553 |
|
| $ | 181,708 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Related party note |
| $ | 2,785 |
|
| $ | 120,965 |
|
Convertible notes payable, net of discount of $27,460 and $25,149, respectively |
|
| 85,000 |
|
|
| 69,851 |
|
Notes payable |
|
| 43,320 |
|
|
| 0 |
|
Accounts payable and accrued liabilities |
|
| 148,946 |
|
|
| 46,321 |
|
Related party payables |
|
| 228,598 |
|
|
| 4,306 |
|
Total current liabilities |
|
| 508,649 |
|
|
| 241,443 |
|
Total liabilities |
|
| 508,649 |
|
|
| 241,443 |
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity (deficit): |
|
|
|
|
|
|
|
|
Preferred stock; $0.001 par value, 10,000,000 shares authorized, no shares issued or outstanding at June 30, 2021 and 2020 |
|
| 0 |
|
|
| 0 |
|
Common stock; $0.001 par value, 400,000,000 shares authorized, 78,713,899 and 59,966,358 shares issued and outstanding at June 30, 2021 and 2020, respectively |
|
| 78,714 |
|
|
| 59,966 |
|
Common stock payable |
|
| 77,061 |
|
|
| 0 |
|
Additional paid-in capital |
|
| 13,529,861 |
|
|
| 4,628,908 |
|
Retained deficit |
|
| (13,782,732 | ) |
|
| (4,748,609 | ) |
Total stockholders' equity (deficit) |
|
| (97,096 | ) |
|
| (59,735 | ) |
Total liabilities and stockholders' equity (deficit) |
| $ | 411,553 |
|
| $ | 181,708 |
|
|
|
|
|
|
|
|
|
|
(The accompanying notes are an integral part of these consolidated financial statements) | ||||||||
| 17 |
GLOBAL WHOLEHEALTH PARTNERS CORPORATION |
|
| ||
CONSOLIDATED STATEMENTS OF OPERATIONS |
|
|
| |
|
|
|
|
|
|
| Year Ended June 30, | ||
|
| 2021 |
| 2020 |
|
|
|
|
|
Revenue | $ 40,196 |
| $ 241,624 | |
Cost of revenue | 201,495 |
| 150,588 | |
Gross profit | (161,299) |
| 91,036 | |
|
|
|
|
|
Operating expenses |
|
|
| |
| Professional fees | 83,790 |
| 61,550 |
| Research and development - related party | 461,040 |
| 492,440 |
| Research and development | 20,700 |
| 20,563 |
| Selling, general and administrative - related party | 1,690,204 |
| 1,512,422 |
| Selling, general and administrative | 1,170,858 |
| 2,269,656 |
Total operating expense | 3,426,592 |
| 4,356,631 | |
Loss from operations | (3,587,891) |
| (4,265,595) | |
Other income (expense) |
|
|
| |
| Interest expense | (802,301) |
| (2,857) |
| Amortization of debt discount | (163,931) |
| (17,075) |
| Loss on related party transfer of intangible assets | (4,480,000) |
| 0 |
Total other income (expense) | (5,446,232) |
| (19,932) | |
Net loss | $ (9,034,123) |
| $(4,285,527) | |
|
|
|
|
|
Basic and Diluted Loss per Common Share | $ (0.14) |
| $ (0.07) | |
|
|
|
|
|
Weighted average number of common shares outstanding - basic and diluted | 65,905,595 |
| 57,804,167 | |
|
|
|
|
|
(The accompanying notes are an integral part of these consolidated financial statements) | ||||
| 18 |
GLOBAL WHOLEHEALTH PARTNERS CORPORATION |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) |
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
|
| Common Stock |
|
| Additional Paid-in |
|
| Common Stock |
|
| Retained |
|
| Total Stockholders' Equity |
| |||||||||
|
| Shares |
|
| Amount |
|
| Capital |
|
| Payable |
|
| Deficit |
|
| (Deficit) |
| ||||||
|
|
|
|
|
|
|
|
| ||||||||||||||||
Balance, June 30, 2019 |
|
| 56,116,358 |
|
| $ | 56,116 |
|
| $ | 426,784 |
|
| $ | 0 |
|
| $ | (463,082 | ) |
| $ | 19,818 |
|
Common stock issued to related party for cash at $0.01 per share |
|
| 2,000,000 |
|
|
| 2,000 |
|
|
| 18,000 |
|
|
| 0 |
|
|
| 0 |
|
|
| 20,000 |
|
Issuance of common stock for services |
|
| 1,850,000 |
|
|
| 1,850 |
|
|
| 3,698,150 |
|
|
| 0 |
|
|
| 0 |
|
|
| 3,700,000 |
|
Forgiveness of related party advances |
|
| - |
|
|
| 0 |
|
|
| 443,750 |
|
|
| 0 |
|
|
| 0 |
|
|
| 443,750 |
|
Discount on convertible promissory notes due to beneficial conversion feature |
|
| - |
|
|
| 0 |
|
|
| 42,224 |
|
|
| 0 |
|
|
| 0 |
|
|
| 42,224 |
|
Net loss for the year ended June 30, 2020 |
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| (4,285,527 | ) |
|
| (4,285,527 | ) |
Balance, June 30, 2020 |
|
| 59,966,358 |
|
|
| 59,966 |
|
|
| 4,628,908 |
|
|
| 0 |
|
|
| (4,748,609 | ) |
|
| (59,735 | ) |
Common stock issued for cash |
|
| 514,298 |
|
|
| 514 |
|
|
| 429,486 |
|
|
| 0 |
|
|
| 0 |
|
|
| 430,000 |
|
Common stock sold pursuant to the EMC2 SPA |
|
| 721,663 |
|
|
| 722 |
|
|
| (722 | ) |
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
Common stock issued upon conversion of convertible promissory note |
|
| 146,486 |
|
|
| 147 |
|
|
| 55,503 |
|
|
| 77,061 |
|
|
| 0 |
|
|
| 132,711 |
|
Common stock issued for services |
|
| 2,950,000 |
|
|
| 2,950 |
|
|
| 2,541,050 |
|
|
| 0 |
|
|
| 0 |
|
|
| 2,544,000 |
|
Common stock issued for license agreements with Charles Strongo |
|
| 8,000,000 |
|
|
| 8,000 |
|
|
| 4,472,000 |
|
|
| 0 |
|
|
| 0 |
|
|
| 4,480,000 |
|
Investment in related party common stock |
|
| 5,000,000 |
|
|
| 5,000 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 5,000 |
|
Common stock issued as compensation for financings |
|
| 1,415,094 |
|
|
| 1,415 |
|
|
| 1,258,019 |
|
|
| 0 |
|
|
| 0 |
|
|
| 1,259,434 |
|
Discount on convertible promissory notes due to beneficial conversion feature |
|
| - |
|
|
| 0 |
|
|
| 145,617 |
|
|
| 0 |
|
|
| 0 |
|
|
| 145,617 |
|
Net loss for the year ended June 30, 2021 |
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| (9,034,123 | ) |
|
| (9,034,123 | ) |
Balance, June 30, 2021 |
|
| 78,713,899 |
|
| $ | 78,714 |
|
| $ | 13,529,861 |
|
| $ | 77,061 |
|
| $ | (13,782,732 | ) |
| $ | (97,096 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(The accompanying notes are an integral part of these consolidated financial statements) | ||||||||||||||||||||||||
| 19 |
GLOBAL WHOLEHEALTH PARTNERS CORPORATION |
|
|
|
| ||||
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|
|
|
| ||||
|
| Year Ended June 30, |
| |||||
|
| 2021 |
|
| 2020 |
| ||
Cash flows from operating activities |
|
|
|
|
|
| ||
Net loss |
| $ | (9,034,123 | ) |
| $ | (4,285,527 | ) |
Adjustments to reconcile net loss to net cash flows used in operating activities: |
|
|
|
|
|
|
|
|
Loss on related party transfer of intangible assets |
|
| 4,480,000 |
|
|
| 0 |
|
Common stock issued for services |
|
| 2,544,000 |
|
|
| 3,700,000 |
|
Amortization of debt discount |
|
| 163,931 |
|
|
| 17,075 |
|
Interest recorded on compensatory warrants |
|
| 737,569 |
|
|
| 0 |
|
Depreciation and amortization |
|
| 1,067 |
|
|
| 0 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
(Increase) decrease in accounts receivable |
|
| 0 |
|
|
| 0 |
|
(Increase) decrease in prepaid expenses and other current assets |
|
| (12,854 | ) |
|
| (15,064 | ) |
(Increase) decrease in inventory |
|
| 122,466 |
|
|
| (152,147 | ) |
Increase (decrease) in accounts payable and accrued expenses |
|
| 127,336 |
|
|
| 46,321 |
|
Increase (decrease) related party payables |
|
| 227,806 |
|
|
| 4,206 |
|
Net cash flows used in operating activities |
|
| (642,802 | ) |
|
| (685,136 | ) |
|
|
|
|
|
|
|
|
|
Cash flows used in investing activity |
|
|
|
|
|
|
|
|
Purchase of equipment |
|
| (3,505 | ) |
|
| 0 |
|
Net cash flows used in investing activity |
|
| (3,505 | ) |
|
| 0 |
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
|
|
|
Proceeds from sale of common stock |
|
| 680,051 |
|
|
| 20,000 |
|
Proceeds from convertible promissory notes |
|
| 162,000 |
|
|
| 95,000 |
|
Payments on convertible promissory notes |
|
| (73,000 | ) |
|
| 0 |
|
Proceeds from promissory notes |
|
| 75,000 |
|
|
| 0 |
|
Payments on promissory notes |
|
| (15,845 | ) |
|
| 0 |
|
Proceeds from related party note, net |
|
| 144,576 |
|
|
| 564,715 |
|
Payments of related party note |
|
| (266,270 | ) |
|
| 0 |
|
Net cash flows from financing activities |
|
| 706,512 |
|
|
| 679,715 |
|
Change in cash |
|
| 60,205 |
|
|
| (5,421 | ) |
Cash at beginning of period |
|
| 14,497 |
|
|
| 19,918 |
|
Cash at end of period |
| $ | 74,702 |
|
| $ | 14,497 |
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
|
|
Interest paid in cash |
| $ | 32,680 |
|
| $ | 0 |
|
Income taxes paid in cash |
| $ | 0 |
|
| $ | 0 |
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of non-cash transactions: |
|
|
|
|
|
|
|
|
Common stock issued for conversion of note payable |
| $ | 132,711 |
|
| $ | 0 |
|
Debt discount recorded for beneficial conversion feature |
| $ | 145,617 |
|
| $ | 0 |
|
|
|
|
|
|
|
|
|
|
(The accompanying notes are an integral part of these consolidated financial statements) | ||||||||
| 20 |
GLOBAL WHOLEHEALTH PARTNERS CORPORATION
| June 30, | June 30, | |||||||
| 2014 | 2013 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
Cash | $ | 5,874 | $ | 42,681 | ||||
Total current assets | 5,874 | 42,681 | ||||||
Loan receivable - officer | 53,880 | 46,900 | ||||||
Right on mine property | 165,000 | 165,000 | ||||||
Total Assets | $ | 224,754 | $ | 254,581 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities | ||||||||
Notes payable | $ | 72,000 | $ | 40,000 | ||||
Note payable - related party | - | 71,000 | ||||||
Accounts payable and accrued expenses | 36,384 | 5,000 | ||||||
Accrued interest - related party | 6,833 | 1,183 | ||||||
Total Current Liabilities | 115,217 | 117,183 | ||||||
Non-Current liabilities | ||||||||
Note payable - related party | 71,000 | - | ||||||
Total Non-Current Liabilities | 71,000 | - | ||||||
Total Liabilities | $ | 186,217 | $ | 117,183 | ||||
Commitments and contingencies | - | - | ||||||
Stockholders' equity | ||||||||
Preferred stock, $0.001 par value, 10,000,000 shares authorized | - | - | ||||||
Common stock, $0.001 par value, 60,000,000 shares authorized, 23,400,000 shares issued and outstanding as of June 30, 2014 and June 30, 2013 | 23,400 | 23,000 | ||||||
Additional paid in capital | 150,000 | 150,000 | ||||||
Accumulated deficit | (134,863 | ) | (35,602 | ) | ||||
Total stockholders’ equity | 38,537 | 137,398 | ||||||
Total liabilities and stockholders’ equity | $ | 224,754 | $ | 254,581 | ||||
For the Year ended | For the Period From March 7, 2013 | |||||||
| June 30, | June 30, | |||||||
| 2014 | 2013 | |||||||
Revenue | $ | 4,083 | $ | - | ||||
OPERATING EXPENSES | ||||||||
Selling, general and administrative expenses | 95,068 | 34,419 | ||||||
Total operating expenses | 95,068 | 34,419 | ||||||
Net Operating Loss | (90,985 | ) | (34,419 | ) | ||||
OTHER EXPENSES | ||||||||
Interest expense | 8,276 | 1,183 | ||||||
Total other expenses | 8,276 | (1,183 | ) | |||||
Loss before provision for income taxes | (99,261 | ) | (35,602 | ) | ||||
Provision for income taxes | - | - | ||||||
Net income (loss) | $ | (99,261 | ) | $ | (35,602 | ) | ||
Net income (loss) per share - basic | $ | (0.00 | ) | $ | (0.00 | ) | ||
Net income (loss) per share - diluted | $ | (0.00 | ) | $ | (0.00 | ) | ||
Weighted average shares outstanding - basic | 23,179,726 | 16,000,522 | ||||||
Weighted average shares outstanding - diluted | 23,176,726 | 16,000,522 | ||||||
| Common Stock | Additional Paid-In | Accumulated | Total Stockholders' | |||||||||||||||||
| Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||
Common stock issued for purchase of mine property from the founder in March, 2013 at $0.011 per share | 15,000,000 | $ | 15,000 | $ | 150,000 | $ | - | $ | 165,000 | |||||||||||
Common stock issued on sale to founder in June, 2013 at par value | 8,000,000 | 8,000 | - | - | 8,000 | |||||||||||||||
Net loss for the period of Inception (March 7, 2013) through June 30, 2013 | - | - | - | (35,602 | ) | (35,602 | ) | |||||||||||||
Balance, June 30, 2013 | 23,000,000 | $ | 23,000 | $ | 150,000 | $ | (35,602 | ) | $ | 137,398 | ||||||||||
Common stock issued for cash at $0.001 | 400,000 | 400 | - | - | 400 | |||||||||||||||
Net loss for the year ended June 30, 2014 | - | - | - | (99,261 | ) | (99,261 | ) | |||||||||||||
Balance, June 30, 2014 | 23,400,000 | $ | 23,400 | $ | 150,000 | $ | (134,863 | ) | $ | 38,537 | ||||||||||
For the Year ended | For the Period From March 7, 2013 | |||||||
| June 30, | June 30, | |||||||
| 2014 | 2013 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Net loss | $ | (99,261 | ) | $ | (35,602 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Changes in assets and liabilities: | ||||||||
Accrued interest - related party | 5,650 | - | ||||||
Accounts payable and accrued expenses | 31,384 | 6,183 | ||||||
Net cash (used in) operating activities | (62,227 | ) | (29,419 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES | - | - | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
Proceeds from sale of common stock | 400 | 8,000 | ||||||
Payments to officer under note receivable | (11,700 | ) | (46,900 | ) | ||||
Repayments from officer under note receivable | 4,720 | - | ||||||
Proceeds from issuance of promissory note | 32,000 | 40,000 | ||||||
Proceeds from issuance of promissory note - shareholder | - | 71,000 | ||||||
Net cash provided by financing activities | 25,420 | 72,100 | ||||||
Net (decrease) increase in cash and cash equivalents | (36,807 | ) | 42,681 | |||||
Cash and cash equivalents at beginning of period | 42,681 | - | ||||||
Cash and cash equivalents at end of period | $ | 5,874 | $ | 42,681 | ||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||
Interest paid | $ | - | $ | - | ||||
Income taxes paid | $ | - | $ | - | ||||
NON CASH TRANSACTIONS | ||||||||
Common stock issued to acquire rights in mineral properties | $ | - | $ | 165,000 | ||||
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2014
NOTE 1 – BUSINESS
Organization
Global WholeHealth Partners Corporation (the “Company”), was incorporated on March 7, 2013 under the laws ofin the State of Nevada. Nevada under the name Texas Jack Oil and Gas Corp. On May 9, 2019, the Company amended its Articles of Incorporation to effect a change of name to Global WholeHealth Partners Corporation. The Company’s ticker symbol changed to GWHP.
The Company is headquartered in Californiasells and develops in-vitro diagnostic products, including rapid diagnostic tests, such as the COVID-19 Test, 6-minute rapid whole blood Ebola Test, 6-minute whole blood Zika test, 8-minute whole blood rapid TB test and over 75 other tests.
The Company was originally organized for the purpose of exploration of Oil and Gas.
On May 9, 2019, the Board reverse split (1-for-500) the outstanding Common Shares of 58,172,000 to 116,358 shares.
May 23, 2019, the Company and LionsGate Funding Group LLC (“LionsGate”), owner of a newmajority of the Company’s outstanding common stock as of May 23, 2019, entered into a Stock Sale and Purchase Agreement (the “SPA”) which closed on June 27, 2019. Pursuant the SPA, the Company issued 56,000,000 shares of common stock to LionsGate in exchange for 100% of their interests in Global WholeHealth Partners Corp., a private Wyoming corporation incorporated on April 9, 2019 (“Global Private”). Global Private has contacts with suppliers and contract manufacturers in the In vitro diagnostic industry, with rights to sell rapid diagnostic tests, such as the following: 6-minute rapid whole blood Ebola Test, 6-minute whole blood Zika test, 88minute whole blood rapid TB test and 75 plus other tests more than 40 which are FDA approved. Due to the common control of the Company and Global Private, pursuant to ASC 805-50-25, “Transactions Between Entities Under Common Control”, the SPA was accounted for as a transfer of the carrying amounts of assets and liabilities under the predecessor value method of accounting. Financial statement presentation under the predecessor values method of accounting as a result of a business combination between entities under common control requires the receiving entity (i.e., the Company) to report the results of operations as if both entities had been combined as of the beginning of the periods presented. The consolidated financial statements include both entities’ full results since the inception of Global Private.
Going Concern
The Company’s consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and planned principal operations have not yet commenced, there has been no revenue generated fromliquidation of liabilities in the oil well.
In view of these conditions, the ability of the Company to continue as a going concern is in doubt and dependent upon achieving a profitable level of operations and on the ability of the Company to obtain necessary financing to fund ongoing operations. Historically, the Company has relied upon internally generated funds, and funds from the sale of stock, issuance of promissory notes and loans from its shareholders and private investors to finance its operations and growth. Management is planning to raise necessary additional funds for working capital through loans and/or additional sales of its common stock. However, there is no assurance that the Company will be successful in raising additional capital or that such additional funds will be available on acceptable terms, if at all. Should the Company be unable to raise this amount of capital its operating plans will be limited to the amount of capital that it can access. These consolidated financial statements do not give effect to any adjustments which will be necessary should the Company be unable to continue as a going concern and do not include any adjustments that may resulttherefore be required to realize its assets and discharge its liabilities in other than the normal course of business and at amounts different from those reflected in the outcomeaccompanying consolidated financial statements.
| 21 |
NOTE 2 – Significant Accounting Policies
Principles of this uncertainty.
Global WholeHealth Partners Corp, a private Wyoming corporation was incorporated on April 9, 2019 to receive private investor funds and aggregate certain in vitro diagnostic assets.
These consolidated financial statements presented are those of Global WholeHealth Partners Corporation and its wholly owned subsidiary, Global Private. All significant intercompany balances and transactions have been eliminated.
On May 19, 2021, the Company entered into a Partnership Joint venture Philippines agreement with AAJ Partners Corp, a Philippine Company for the purpose of establishing a manufacturing facility. The agreement provides the Company with 40% interest in the joint venture once formally formed. As of June 30, 2021, the joint venture legal entity was in the process of formation. The Company expects to report the results of the joint venture under the equity method of accounting.
Use of estimates
The preparation of unaudited condensed financial statements in accordanceconformity with U.S. generally accepted accounting principles generally accepted in the United States(“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosuresdisclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Cash and cash equivalents
The Company considers all highly liquid instruments purchased with an original maturity of net operating lossthree months or less and credit carry-forwardsmoney market accounts to be cash equivalents.
Inventory
Inventory is comprised of finished goods and temporary differences between the tax basis of assets and liabilities and their respective financial reporting amounts measuredstated at the current enacted tax rates. lower of cost or net realizable value. Inventory cost is determined on a weighted average basis in accordance with ASC 330-10-30-9. Provisions are made to reduce slow-moving, obsolete, or unusable inventories to their estimated useful or scrap values. When necessary, the Company establishes reserves for this purpose. During the year ended June 30, 2021, the Company recognized $171,811 of adjustments to reduce the value of inventory due primarily to the reduction in selling prices of COVID-19 test products.
Equipment
Fixed assets are carried at cost, less accumulated depreciation. Major improvements are capitalized, while repair and maintenance are expensed when incurred. Renewals and betterments that materially extend the life of the assets are capitalized. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in that period.
| 22 |
Depreciation is computed on a straight-line basis over estimated useful lives of the related assets. The estimated useful lives of depreciable assets are:
Estimated | ||
Useful Lives | ||
Computer equipment and software | 3 years | |
Equipment, furniture and fixtures | 5 years |
Intangible assets
Other definite-lived intangible assets are amortized over their useful lives. The Company reviews the recoverability of long-lived assets whenever events or changes in circumstances indicate the carrying amount of such assets may not be recoverable.
Revenue Recognition
The Company recognizes revenue from operations through the sale of products. Product revenue is comprised of the sale of consumables. To date, all products sold have been fully paid for in advance of shipment.
Revenue is recognized when control of products and services is transferred to the customer in an amount that reflects the consideration that the Company expects to receive from the customer in exchange for those products and services. This process involves identifying the contract with the customer, determining the performance obligations in the contract, determining the contract price, allocating the contract price to the distinct performance obligations in the contract, if applicable, and recognizing revenue when the performance obligations have been satisfied. A performance obligation is considered distinct from other obligations in a contract when it provides a benefit to the customer either on its own or together with other resources that are readily available to the customer and is separately identified in the contract. The Company considers a performance obligation satisfied once it has transferred control of a good or service to the customer, meaning the customer has the ability to use and obtain the benefit of the good or service. The Company recognizes revenue for satisfied performance obligations only when it determines there are no uncertainties regarding payment terms or transfer of control.
Revenue from product sales is generally recognized upon shipment to the end customer, which is when control of the product is deemed to be transferred. Invoicing typically occurs prior to shipment and the term between invoicing and when payment is due is not significant.
Revenue is recorded net of discounts, and sales taxes collected on behalf of governmental authorities. Sales commissions are recorded as selling and marketing expenses when incurred.
The Company records any payments received from customers prior to the Company fulfilling its performance obligation(s) as deferred revenue.
The Company had one customer that represented 57.2% of revenue for the year ended June 30, 2021. The Company had three customers that represented 87.6% of revenue (59.6%, 17.4% and 10.6%) for the year ended June 30, 2020. No other customers represented greater than 10% of sales.
Concentration of Credit Risk and Off-Balance Sheet Risk
The Company has no significant off-balance-sheet risk such as foreign exchange contracts, option contracts, or other foreign hedging arrangements. Financial instruments that potentially subject the Company to concentrations of credit risk are principally cash. The Company’s policy is to place its cash in high quality financial institutions. The Company does not believe significant credit risk exists with respect to these institutions.
Leases
The Company recognizes leases with a term of greater than a year on the balance sheet by recording right-of-use assets and lease liabilities. Leases can be classified as either operating leases or finance leases. Operating leases will result in straight-line lease expense, while finance leases will result in front-loaded expense. The Company’s lease consists of an estimatedoperating lease for office space. The Company does not recognize a lease liability or right-of-use asset on the balance sheet for short-term leases. Instead, the Company recognizes short-term lease payments as an expense on a straight-line basis over the lease term. A short-term lease is defined as a lease that, at the commencement date, has a lease term of 12 months or less and does not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise.
| 23 |
Derivatives
All derivatives are recorded at fair value on the balance sheet. The Company has determined fair values using market-based pricing models incorporating readily available prices and or valuation allowancetechniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity) that requires judgment and estimates.
Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company utilizes a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include:
Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;
Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and
Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
During the periods covered by this report, the Company did not have any assets or liabilities that were required to be measured at fair value on its deferred income tax assets if it is not more likely than not that these deferred income tax assets will be realized.
Fair Value of Financial Instruments
The Company’s financial instruments consist of the fair value of certain financial instruments. The carrying value of cash and cash equivalents, accounts payable and accrued liabilities, and short-term borrowings, as reflected inexpenses. The carrying amounts of the balance sheets,Company’s financial instruments approximate fair value because of the short-term maturity of these instruments. All otheritems. These fair value estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect those estimates. We do not hold or issue financial instruments for trading purposes, nor do we utilize derivative instruments.
Income Taxes
The Company accounts for income taxes using the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributed to differences between the financial statement carrying amounts of existing assets and liabilities and equity instrumentstheir respective tax bases and tax credits and loss carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences and carry-forwards are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established when necessary to reduce deferred tax assets to amounts expected to be realized. The Company reports a liability for unrecognized tax benefits resulting from uncertain income tax positions, if any, taken or expected to be taken in an income tax return. Estimated interest and penalties are recorded as a component of interest expense or other expense, respectively.
| 24 |
Transactions with Related Parties
Parties are considered to be related to the Company if the parties directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal stockholders of the Company, its management, members of the immediate families of principal stockholders of the Company and its management and other parties with which the Company may deal where one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all material related-party transactions. All transactions shall be recorded at fair value of the goods or services exchanged. Property purchased from a related party is recorded at the cost to the related party and any payment to or on behalf of the related party in excess of the cost is reflected as compensation or distribution to related parties depending on the transaction.
Basic net loss per common share attributable to common stockholders is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding for the period, without consideration for common stock equivalents. Diluted net loss per common share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common share equivalents outstanding for the period determined using the treasury-stock method. Dilutive common stock equivalents are either recognized or disclosedcomprised of convertible notes and warrants to purchase common stock. For all periods presented, there is no difference in the financial statements together with other information relevantnumber of shares used to calculate basic and diluted shares outstanding due to the Company’s net loss position.
The potentially dilutive securities that would be anti-dilutive due to the Company’s net loss are not included in the calculation of diluted net loss per share attributable to common stockholders. The anti-dilutive securities are as follows (in common stock equivalent shares):
|
| Year Ended June 30, 2021 |
| Year Ended June 30, 2020 |
Common stock warrants |
| 2,216,975 |
| - |
Convertible promissory notes |
| 10,354 |
| 10,727 |
Research and Development
Research and development costs primarily consist of research contracts for making a reasonable assessmentthe advancement of future cash flows, interest rate risk and credit risk. Where practicable the fair values of financial assets and financial liabilities have been determined and disclosed; otherwise only available information pertinent to fair value has been disclosed.
Stock-Based Compensation
The Company accounts for stock-based compensation in accordance with Accounting Standards Codification subtopic 605-10, Revenue Recognition (“ASC”) 718, Stock Based Compensation. ASC 605-10”) which718 requires all stock-based payments to directors, employees and consultants, including grants of stock options, to be recognized in the consolidated statements of operations based on their fair values. If a stock-based award contains performance-based conditions, at the point that four basic criteria mustit becomes probable that the performance conditions will be met, before revenue can be recognized: (1) persuasive evidencethe Company records a cumulative catch-up of an arrangement exists; (2) delivery has occurred; (3) the selling priceexpense from the grant date to the current date, and then amortizes the remainder of the expense over the remaining service period. Management evaluates when the achievement of a performance-based condition is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) areprobable based on management's judgments regarding the fixed natureexpected satisfaction of the selling pricesperformance conditions as of the products delivered and the collectability of those amounts.
Recent accounting for arrangements that may involve the delivery or performance of multiple products, services and/or rights to use assets.
In June of 2014August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU 2014-10, “Elimination of Certain Financial Reporting Requirements, Including”) No. 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation”Entity’s Own Equity” (“ASU 2014-10”2020-06”)., which simplifies accounting for convertible instruments by removing major separation models required under current U.S. GAAP. ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain areas. ASU 2020-06 is effective for the Company for fiscal years beginning after December 31, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020 and adoption must be as of the beginning of the Company’s annual fiscal year. The Company adopted ASU 2020-06 beginning with our fiscal year starting on July 1, 2021. We do not expect the adoption of ASU 2020-06 to have a material impact on our consolidated financial statements.
| 25 |
Any reference in these notes to applicable accounting guidance is meant to refer to the authoritative non-governmental US GAAP as found in the Financial Accounting Standards Board's Accounting Standards Codification.
Recently adopted accounting pronouncements
In January 2020, the FASB issued ASU 2020-01 - Investments - Equity securities (Topic 321), Investments - Equity method and joint ventures (Topic 323), and Derivatives and hedging (Topic 815) - Clarifying the interactions between Topic 321, Topic 323, and Topic 815. The amendments in this Update improve the accounting for certain equity securities upon the application or discontinuation of the equity method of accounting and clarify the scope considerations for forward contracts and purchased options on certain securities. The amendments are effective for public entities in fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted. The Company did not early adopt and believes the adoption of this new guidance will not have a material impact on its consolidated financial statements and disclosures.
In December 2019, the FASB issued ASU 2014-10 remove2019-12, Income Taxes – Simplifying the definitionAccounting for Income Taxes. The guidance removes certain exceptions for recognizing deferred taxes for equity method investments, performing intra period allocation, and calculating income taxes in interim periods. The ASU also adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for goodwill and allocating taxes to members of a development stage entity from the master glossaryconsolidated group, among others. This guidance is effective for interim and annual reporting periods beginning after December 15, 2020. Early adoption of the Accounting Standards Codification, thereby removing the financial reporting distinction between development stage entities and other reporting entities from U.S. GAAP. In addition, the amendments eliminate the requirementsstandard is permitted, including adoption in interim or annual periods for development stage entities to (1) present inception-to-date information in the statements of income, cash flows, and shareholder equity, (2) label thewhich financial statements as those of a development stage entity, (3) disclose a description of the development stage activities in which the entity is engaged, and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage.
In July 2017, the FASB issued ASU No. 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815). The amendments in Part I of this Update change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. The amendments also clarify existing disclosure requirements for equity-classified instruments. As a result, a free-standing equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. For freestanding equity classified financial instruments, the amendments require entities that present earnings per share (EPS) in accordance with Topic 260 to recognize the effect of the down round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common shareholders in basic EPS. Convertible instruments with embedded conversion options that have down round features are now subject to the specialized guidance for contingent beneficial conversion features (in Subtopic 470-20, Debt—Debt with Conversion and Other Options), including related EPS guidance (in Topic 260). The amendments in Part II of this Update recharacterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Codification, to a scope exception. Those amendments do not have a material accounting effect. For public business entities, the amendments in Part I of this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted for all entities, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The Company adopted ASU No. 2017-11 at the beginning of the fiscal 2020 with no impact on its Financial Statements.
The Company reviews new accounting standards as issued. Although some of these accounting standards issued or effective after the end of the Company’s previous fiscal year may be applicable, the Company has not identified any standards that the Company believes merit further discussion. The Company believes that none of the new standards will have a significant impact on the consolidated financial statements.
| 26 |
NOTE 3 – GOING CONCERN MATTERS
Equipment consists of the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying financial statements duringfollowing:
|
| June 30, |
| |||||
|
| 2021 |
|
| 2020 |
| ||
Computers, office equipment and software |
| $ | 3,505 |
|
| $ | 0 |
|
Total equipment |
|
| 3,505 |
|
|
| 0 |
|
Accumulated depreciation |
|
| (1,067 | ) |
|
| 0 |
|
Equipment, net |
| $ | 2,438 |
|
| $ | 0 |
|
During the year ended June 30, 2014,2021, the Company incurred net losses attributable to common stockholderspurchased $3,505 of $99,261,computer equipment. During fiscal 2021, the Company recognized depreciation expense of $1,067.
NOTE 4 – Stockholder’s Equity
Preferred Stock
The Company has negative working capital (current liabilities minus current assets)Preferred stock: $0.001 par value; 10,000,000 shares authorized with no shares issued and outstanding.
Common Stock
The Company has 400,000,000 shares of $109,343Common Stock authorized of which 78,713,899 and 56,116,358 shares were issued and outstanding as of June 30, 20142021 and June 30, 2020, respectively.
On April 20, 2021, the Company and Empire Associates, Inc. entered into a Stock Purchase Agreement whereby the Company agreed to issue 250,000 to Empire Associates, Inc. in full satisfaction of the $77,060 paid to Geneva by Empire Associates on behalf of the Company. The shares were unissued as of June 30, 2021, but are included in the calculation of EPS on an as-if issued basis.
On April 12, 2021, the Company and Nunzia Pharmaceutical, Inc. entered into a Mutual Sales and Marketing Agreement (the “MSMA”). Pursuant to the terms of the MSMA, each company has mutual abilities to share their products for sale under nonexclusive but favorable conditions and prices. The duration of the agreement is for an initial period of five years commencing on April 12, 2021. As consideration for the MSMA, the Company agreed to issue 5,000,000 shares of its restricted common stock to Nunzia and Nunzia agreed to issue 5,000,000 shares of its restricted common stock to the Company. Due to the related party nature of the MSMA, the Company recorded the issuance of its shares at par value and the receipt of shares from Global at par value or $5,000 and reflected the balance as a non-current asset under the account “Investment in related party.”
On March 30, 2021, the Company entered into a License Agreement (the “IP LicenseAgreement”) with Charles Strongo. Under the terms of the IP License Agreement, the Company has the exclusive license to use the intellectual property, “A Rapid, Micro-Welt or Later flow text for Parkinson’s, Dementia, or Alzheimer or ASD.” The Company agreed to issue 5,000,000 shares of common stock and pay a 2% fee of gross sales from use of the intellectual property. The duration of the IP License Agreement is for an initial period of five years. The IP License Agreement was initially valued at $0.62 per share or $3,100,000. Due to the related party nature of the transfer and the absence of historical cost records, the full $3,100,000 was expensed within “Loss on related party transfer of intangible assets.”
On March 15, 2021, the Company issued 146,486 shares to Geneva Roth Remark Holdings, Inc. For additional information see “NOTE 6 – Convertible Promissory Notes” below.
On February 21, 2021, the Company agreed to issue and on February 25, issued 1,750,000 shares to LionsGate. The Company recorded compensation expense of $1,680,000.
| 27 |
On January 12, 2021, the Company entered into a License Agreement (the “PatentLicenseAgreement”) with Charles Strongo. Under the terms of the Patent License Agreement, the Company has the exclusive license to manufacture, sell and license to be manufactured the only Biodegradable plastic for medical devices. The devices include cassettes, midstream, small buffer bottles, urine cups, and any other plastic type of medical device used $62,227 in testing or for medical services under provisional patent number 63/054,139. The Company agreed to issue 3,000,000 shares of restricted common stock and pay a 2% fee of gross sales from use of the patent. The duration of the Patent License Agreement is for an initial period of five years. The Patent License Agreement was valued at $0.46 per share or $1,380,000. Due to the related party nature of the transfer and the absence of historical cost records, the full $1,380,000 was expensed within “Loss on related party transfer of intangible assets.”
On January 5, 2021, the Board appointed a new member, Dr. Miriam Lisbeth Paez De La Cerda and issued 200,000 shares of restricted common stock to each of the six Directors for a total issuance of 1,200,000 shares valued at $0.72 per share, the closing price of our common stock on January 5, 2020.
On December 15, 2020, the Company sold 250,000 shares of restricted common stock for $0.36 per share and received $90,000. These shares were issued on February 5, 2021, and are included in the earnings per share calculation on an as-if-issued basis.
On September 24, 2020, the Company and Dr. Scott Ford, Director, entered into a subscription agreement for the purchase 219,298 shares of restricted common stock at a price of $1.14 per share ($250,000 total) which represents a 50% discount to the share price due to the lack of marketability and the thinly traded nature of our common stock on the OTC. These shares were issued on February 5, 2021, and are included in the earnings per share calculation on an as-if-issued basis.
On July 22, 2020, the Company entered into a Common Stock Purchase Agreement (the “EMC2 SPA”) and a Registration Rights Agreement with EMC2 Capital, LLC (“EMC2 Capital”) pursuant to which EMC2 Capital agreed to invest up to One Hundred Million Dollars ($100,000,000) to purchase the Company’s common stock at a purchase price as defined in the Common Stock Purchase Agreement (the "Purchase Shares"). As consideration for entry into the EMC2 SPA, the Company agreed to issue 1,415,094 shares of common stock (the "Commitment Shares") and a warrant to purchase up to two million (2,000,000) shares of common stock (the “Commitment Warrant”). The Commitment Warrant vested upon issuance, expires on its fifth anniversary and had an initial exercise price of $1.59 per share subject to adjustment whereby in the event that the bid price drops below the exercise price, at any time, the exercise price will decease by a prescribed amonut. If the bid price drops below $0.59 per share, the exercise price would be adjusted to par value, or $0.001 per share. Additionally, the Company agreed to issue a Registration Rights Agreement as an inducement to EMC2 Capital to execute and deliver the EMC2 SPA, whereby the Company agreed to provide certain registration rights under the Securities Act of 1933, as amended, and the rules and regulations thereunder, and applicable state securities laws, with respect to the shares of common stock issuable for EMC2 Capital’s investment pursuant to the Common Stock Purchase Agreement. The obligation to issue the Commitment Shares and Commitment Warrant and the right of the Company to sell Purchase Shares to EMC2 Capital was dependent on the Company satisfying certain conditions, including notice of effectivness of the shelf registration statement registering the Purchase Shares and the issuance of the Commitment Shares and Commitment Warrant. Fom Our Form S-1 registering 11,993,271 shares of common stock related to the EMC2 SPA was filed on January 28, 2021 and declared effective on March 3, 2021, the measurement date.
The value of the Commitment Shares on the measurement date was $0.89 per share or $1,259,000. The value of the Commitment Warrant on the Measurement Date was $1,780,000 as calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model include: (1) Stock price of $0.89 per share; (2) exercise price of $0.001 per share; (3) discount rate 0.73% (4) expected life of 4.33 years, (5) expected volatility of 227%, and (6) zero expected dividends.
As a result of the Securities and Exchange Commission declaring our Registration on Form S-1 effective, the pre conditions necessary for the Company to begin selling Purchase Shares to EMC2 Capital were removed. As a result, the Company determined the relative fair value of the Commitment Warrants and Commitment Shares to be $737,569 and $521,865, respectively and recorded a deferred financing asset of $521,865 and interest expense of $737,569. Subsequent cash receipts from the sale of Purchase Shares will first be allocated to the deferred financing cost asset.
| 28 |
During fiscal 2021, from March 3, 2021 through June 30, 2021, the Company sold 721,663 purchase shares to EMC2 Capital at prices ranging from $0.32 - $0.37 and received total proceeds of $250,051.
On July 9, 2020, the Company and Dr. Scott Ford, Director, entered into a subscription agreement for operating activities forthe purchase 45,000 shares of restricted common stock at a price of $2.00 per share which represents a 50% discount to the share price due to the lack of marketability and the thinly traded nature of our common stock on the OTC. These shares were issued on February 5, 2021, and are included in the earnings per share calculation on an as-if-issued basis.
During the year ended June 30, 2014. In addition,2020, the number of shares increased by 3,850,000 as a result of the Company has yet commercialized its planned businessselling 2,000,000 shares at $0.01 per share to LionsGate in exchange for cash of $20,000 and has generated very little revenues since inception. These factors among others raise substantial doubt abouton May 8, 2020, issuing 1,850,000 shares valued at $2.00 as a bonus for prior service, including related party issuances of 500,000 shares to Charles Strongo, our CEO and 750,000 shares to LionsGate.
Warrants
Each of the Company’s abilitywarrants outstanding entitles the holder to continuepurchase one share of the Company’s common stock for each warrant share held. A summary of the Company’s warrants outstanding and exercisable as of June 30, 2021 and 2020 is as follows:
Shares of Common Stock Issuable from Warrants Outstanding as of | ||||||||||
Description | June 30, | June 30, | Weighted Average Exercise Price | Date of | Expiration | |||||
2021 | 2020 | Issuance | ||||||||
EMC2 Capital | 2,000,000 | - | Variable | July 22, 2020 | July 22, 2025 | |||||
Geneva | 51,975 | - | Variable | April 26, 2021 | April 26, 2024 | |||||
Firstfire | 165,000 | - | variable | June 18, 2021 | June 18, 2024 | |||||
Total | 2,216,975 | - | ||||||||
NOTE 5 –Transactions with Related Persons
On April 12, 2021, the Company and Nunzia Pharmaceutical, Inc. entered into a going concernMutual Sales and Marketing Agreement pursuant to which Nunzia and the Company exchanged 5,000,000 shares of common stock. For additional information, see “NOTE 4 – Stockholder’s Equity.”
On March 30, 2021, the Company entered into a five-year License Agreement with Charles Strongo and issued 5,000,000 shares of restricted common stock. For additional information, see “NOTE 4 – Stockholder’s Equity.”
On February 21, 2021 the Company agreed to issue and on February 25, issued 1,750,000 shares to LionsGate. The Company recorded compensation expense of $1,680,000.
On January 12, 2021, the Company entered into a five-year License Agreement with Charles Strongo and issued 3,000,000 shares of restricted common stock. For additional information, see “NOTE 4 – Stockholder’s Equity.”
On January 5, 2021, the Board appointed a new member, Dr. Miriam Lisbeth Paez De La Cerda and issued 200,000 shares of restricted common stock to each of the six Directors for a reasonable periodtotal issuance of time.
On July 9, 2020 and services and there can be no assurance that the Company's efforts will be successful. There is no assurance that can be given that management's actions will result in profitable operations or the resolution of its liquidity problems. The accompanying unaudited condensed financial statements do not include any adjustments that might result shouldSeptember 24, 2020, the Company be unableand Dr. Scott Ford entered into a subscription agreement for the purchase of restricted common stock resulting in the payment of $340,000 to continue as a going concern.
Beginning in January 2020, the Company utilizes the R&D capabilities of Pan Probe Biotech to perform studies in validation of the Company’s COVID-19 tests. Dr. Shujie Cui is the Company’s Chief Science Officer and 100% owner of Pan Probe. During the year ended June 30, 2020, LionsGate provided advances totaling $564,715 which was used to pay professional fees of $57,000, general costs of $29,965 and research studies for the development of CoVid-19 related tests of $477,750, including $465,250 paid to Pan Probe Biotech to perform studies in validation of the Company’s CoVid-19 tests. On March 30, 2020, in conjunction with their entry into the Note (defined below), LionsGate forgave $443,750, see below for additional information. During the year ended June 30, 2021, the Company incurred R&D costs of $461,040 and paid Pan Probe $229,250 for R&D work leaving a balance due of $228,480 as of June 30, 2021.
| 29 |
The Company paid rent to Pan Probe on a temporary basis, from April 21, 2020 through October 21, 2020, at a rate of $2,551 per month or $15,306 which was prepaid in full in April 2020. During the years ended June 30, 2021 and 2020, the Company recognized $10,204 and $5,102 of rent expense, respectively, related to this arrangement.
Related Party Note
From time-to-time the Company receives shareholder advances from LionsGate to cover operating costs. On March 29, 2020, the Company issued a Promissory Note (the “Note”), and on June 30, 2020, amended the Note (the “NoteAmendment”). Pursuant to the Note and Note Amendment, the terms provided for total funding of up to $585,000, interest at the rate of 5% per annum with the principal and interest due in-full on June 30, 2021. On January 27, 2021, the Company and LionsGate entered into a Loan Agreement (the “Loan Agreement”) and Promissory note (the “Promissory Note”) pursuant to which the Company may borrow up to $250,000 at an annual interest rate of 5% and default interest rate of 15%. The Loan Agreement supersedes the Note and Note Amendment and included a beginning balance of $29,951 which was the balance of advances and accrued interest owing under the Note as of January 27, 2021. The Promissory Note matures on December 31, 2021. During fiscal 2021 and 2020, LionsGate provided advances under the Note, Note Amendment and Promissory Note totaling $266,270 and $58,090, respectively. During fiscal 2021 and 2020, the Company repaid amounts owing under the Note, Note Amendment and Promissory Note totaling $267,750 and $0, respectively.
During fiscal 2021 and 2020, the Company recognized $2,178 and $1,316, respectively, of interest expense related to the Note, Note Amendment and Promissory Note. As of June 30, 2014 accounts payable2021, the Note principal balance is $2,785 and accrued liabilitiesinterest balance is comprised $2,626 of accrued interest on notes payable and $33,758 of accrued consulting fees.
NOTE 56 – RELATED PARTY TRANSACTIONS
On April 18, 2020, the Company issued 15,000,000five separate unsecured convertible promissory notes in exchange for $95,000 (the "Convertible Notes"). Each Convertible Note contains the same terms and conditions. The Convertible Notes bear interest of 8%, matured in six months on October 17, 2020 and are convertible at any time into shares of restricted common stock at a conversion price of $9.00 per share. The notes are currently in default. The debt discount attributable to the founderfair value of the beneficial conversion feature amounted to $42,224 for the Convertible Notes and was accreted over the term of the Convertible Notes. In December of 2020, the Company for purchaserepaid, in-full, two of the Convertible Notes with principal a balance totaling $10,000 and $500 in interest payable. During fiscal 2021 and 2020, the Company recognized $7,143 and $1,541, respectively, of interest in mine property which was valued at $165,000 being original cost toexpense; and $25,149 and $17,075, respectively, of accretion. As of June 30, 2021, the founder. The mineConvertible Notes principal balance is $85,000 and accrued interest was assigned tobalance is $8,184
Firstfire Global Opportunities Fund LLC
On June 18, 2021 (the "Issue Date"), the Company on May 1, 2013 through partial assignment agreement. The Company presently ownsentered into a 3% percent working lease interest in one well locatedSecurities Purchase Agreement with Firstfire Global Opportunities Fund LLC ("Firstfire"), for the sale of a secured, 12% senior secured convertible promissory note in the Jack County, Texas.
| 30 |
Additionally, the Company entered into a Registration Rights Agreement with Firstfire whereby the Company agreed to file within 90 days and have declared effective within 120 days from the Issue Date, a registration statement to cover the shares issuable under the Firstfire Note and Firstfire Warrant. Failure to file within 90 days will result in a $2,500 in liquidated damages. Failure to have the registration declared effective before 120 days will result in a $2,500 in liquidated damages.
As additional consideration, the Company granted Firstfire a warrant to purchase 165,000 shares of our common stock (the "Firstfire Warrant") at an exercise price of $0.50 for a period of three (3) years. The Firstfire Warrant contains provision for an anti-dilution adjustment and cashless exercise rights if a registration statement covering the resale of the Firstfire Warrant shares is not available for the resale of such Firstfire Warrant shares. The fair value of the Firstfire Warrant was originally$0.36 per share and was calculated using the Black-Scholes option pricing model with the following assumptions: (1) Stock price of $0.41 per share; (2) exercise price of $0.50 per share; (3) discount rate 0.47% (4) expected life of 3 years, (5) expected volatility of 194.5%, and (6) zero expected dividends market price of common stock. This resulted in allocating $48,849 to the Firstfire Warrant and $226,151 to the Firstfire Note. Then, we calculated the debt discount attributable to the beneficial conversion feature which amounted to $264,372. As a result of the original issue discount, fees, warrant and beneficial conversion feature of the Firstfire Note, the Company recorded a debt discount of $275,000 which is being accreted over the term of the Firstfire Note.
Geneva Promissory Note dated April 26, 2021
On April 26, 2021, the Company and Geneva entered into a Securities Purchase Agreement (the "SPA"). Pursuant to the SPA, The Company sold to Geneva a Promissory Note for the principal amount of $86,625 (the "Geneva Promissory Note ") and issued a warrant to purchase up to 51,975 shares of common stock (the “Geneva Warrant”). Under the Geneva Promissory Note the Company received net proceeds of $75,000 which included deductions for a 10% original issue discount, $3,000 for legal fees and $750 as a due diligence fee. The Geneva Promissory Note matures in one (1) year, requires ten (10) monthly payments of $9,529 beginning June 1, 2021, and is unsecured. Upon an event of default, the Geneva Promissory Note will increase to 150% times the sum of the then outstanding principal, become immediately due, accrue interest at 22% per year, and become convertible into shares of common stock at an exercise price of 75% multiplied by the lowest trading price of our common stock during the five (5) trading day period prior to conversion. Geneva has agreed to restrict its ability to convert the Geneva Promissory Note and receive shares of common stock such that the number of shares of common stock held by them in the aggregate and their affiliates after such conversion or exercise does not exceed 4.99% of the then issued and outstanding shares of common stock. The Geneva Promissory Note represents a debt obligation arising other than in the ordinary course of business, which constitutes a direct financial obligation of the Company. On August 9, 2021, the Company repaid, in whole, the balance due under the Geneva Promissory Note, or $57,173.
As a condition to the Creditor’s entry into the Geneva Promissory Note, the Company issued Geneva a Stock Purchase Warrant (the “Geneva Warrant”) to purchase up to 51,975 shares of the Company’s common stock, which are exercisable from October 23, 2021 to April 26, 2024, with an exercise price of $0.50. The fair value of the Geneva Warrant was $0.56 per share and was calculated using the Black-Scholes option pricing model with the following assumptions: (1) Stock price of $0.60 per share; (2) exercise price of $0.50 per share; (3) discount rate 0.35% (4) expected life of 3 years, (5) expected volatility of 206%, and (6) zero expected dividends market price of common stock. This resulted in allocating $29,106 to the Geneva Warrant and $57,519 to the Geneva Promissory Note. As a result of the original issue discount, legal fees, due diligence fee and warrant, on April 26, 2021, the Company recorded a debt discount of $33,411 which is being accreted over the term of the Geneva Promissory Note.
During the fiscal 2021, the Company made two payments totaling $19,058 and recognized interest expense and accretion of the debt discount of $3,213 and $5,951, respectively.
| 31 |
Geneva Convertible Promissory Notes dated July 13, 2020, August 3, 2020 and September 8, 2020
On July 13, 2020, August 3, 2020 and September 8, 2020 (the “Issue Dates”), the Company and Geneva Roth Remark Holdings, Inc. ("Geneva") entered into separate and identical Securities Purchase Agreements (the "Geneva SPAs"). Pursuant to the Geneva SPAs, Geneva and the Company entered into separate and identical Convertible Promissory Notes also dated as of July 13, 2020, August 3, 2020 and September 8, 2020 for principal amounts of $63,000, $55,000 and $53,000, respectively (the "Geneva CPNs"). Pursuant to the terms of the Geneva CPNs, the Company received net proceeds of $60,000, $52,000 and $50,000 (the proceeds from each note were funded net of $3,000 in legal fees). The Geneva CPNs matured in one year, accrued interest of 10% and, after 180 days, were convertible into shares of common stock any time at a conversion price equal to 58% of the lowest trading price during the twenty trading day period ending on the latest complete trading day prior to the conversion date. The Geneva CPN’s may be prepaid anytime up to 180 days from issuance with the following prepayment penalties: 1) The period beginning on the Issue Date and ending on the date which is ninety (90) days following the Issue Date, 125%; 2) The period beginning on the date that is ninety-one (91) day from the Issue Date and ending one hundred fifty (150) days following the Issue Date, 135%; and 3) The period beginning on the date that is one hundred fifty-one (151) day from the Issue Date and ending one hundred eighty (180) days following the Issue Date, 139%. Geneva agreed to restrict its ability to convert the Geneva CPNs and receive shares of common stock such that the number of shares of common stock held by them in the aggregate and their affiliates after such conversion or exercise did not exceed 4.99% of the then issued and outstanding shares of common stock. The Geneva CPNs represented a debt obligation arising other than in the ordinary course of business, which constitutes a direct financial obligation of the Company. The Geneva CPNs include penalties and rescission rights if the Company does not deliver shares of our common stock upon conversion within the required timeframes. In the event of default, the note interest rate increases to 22%.
On December 21, 2020, the Company paid $90,487 as full payment of the Geneva CPN dated July 13, 2020. The payment included $63,000 of principal, $2,917 of interest related to the coupon and $24,570 as a prepayment penalty recorded as interest expense.
On February 16, 2021, Empire Associates, Inc., an unaffiliated company, paid off the balance, in-full, on the note dated August 3, 2020. The payment totaled $77,061 and included $55,000 of principal, $3,256 of interest related to the coupon and $18,805 as a prepayment penalty recorded as interest expense. At the time of payoff, the Company and Empire Associates, Inc. had not entered into any agreements related to the payment of the Geneva CPN dated August 3, 2020. On April 20 the Company and Empire Associates, Inc. entered into a Stock Purchase Agreement whereby the Company agreed to issue 250,000 to Empire Associates, Inc. in full satisfaction of the $77,061 paid to Geneva on behalf of the Company.
On March 15, 2014. 2021, the Company issued 146,486 shares of common stock to Geneva upon their conversion, in-full, of $53,000 of Principal and $2,650 of unpaid interest owing under the Geneva CPN dated September 8, 2020.
The debt discount attributable to the legal fees paid and fair value of the beneficial conversion feature contained in the Geneva CPNs amounted to $132,831 and was accreted over the term of the Geneva CPNs. In the event a Geneva CPN was paid in advance of its maturity date, the future accretion was extendedrecorded in the period the related Geneva CPN was repaid.
Related to October 1, 2015. Totalthe Geneva CPNs, during fiscal 2021, the Company recognized $52,754 of interest expensesexpense $132,831 of accretion. As of June 30, 2021, a balance of $77,061 is recorded to common stock payable.
NOTE 7 – Income Taxes
On December 22, 2017, the Tax Cuts and Jobs Act (“The Act”) was enacted into law. The Act applies to corporations generally beginning with taxable years starting after December 31, 2017 and reduces the corporate tax rate from a graduated set of rates with a maximum 35% tax rate to a flat 21% tax rate. Additionally, the Act introduced other changes that impacted corporations, including a net operating loss (“NOL”) deduction annual limitation, an interest expense deduction annual limitation, elimination of the alternative minimum tax, and immediate expensing of the full cost of qualified property. The Act also introduced an international tax reform that moved the U.S. toward a territorial system, in which income earned in other countries will generally not be subject to U.S. taxation. However, the accumulated foreign earnings of certain foreign corporations were subject to a one-time transition tax, which can be elected to be paid over an eight-year tax transition period, using specified percentages, or in one lump sum. NOL and foreign tax credit (“FTC”) carryforwards can be used to offset the transition tax liability. This change had no impact on the Company as it has not earned taxable income in the past and it has significant NOL carryforwards.
| 32 |
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets at June 30, 2021 and 2020 are as follows:
|
| 2021 |
|
| 2020 |
| ||
Deferred tax assets: |
|
|
|
|
|
| ||
Net operating loss carryforwards |
| $ | 1,275,168 |
|
| $ | 166,545 |
|
Statutory tax rate |
|
| 21 | % |
|
| 21 | % |
Total deferred tax assets |
|
| 267,785 |
|
|
| 34,974 |
|
Less: valuation allowance |
|
| (267,785 | ) |
|
| (34,974 | ) |
Net deferred tax asset |
| $ | 0 |
|
| $ | 0 |
|
A reconciliation between the amount of income tax benefit determined by applying the applicable U.S. statutory income tax rate to pre-tax loss for the years ended June 30, 20142021 and 2013 on2020 is as follows:
|
| 2021 |
|
| 2020 |
| ||
Federal Statutory Rate |
| $ | 1,897,166 |
|
| $ | 899,961 |
|
Nondeductible expenses |
|
| (1,664,355 | ) |
|
| (873,877 | ) |
Change in allowance on deferred tax assets |
|
| 232,811 |
|
|
| 26,084 |
|
The net increase in the above loanvaluation allowance for deferred tax assets was $5,650$232,811 and $1,183, respectively; total accrued interest as of June 30, 2014 and 2013 is $6,833 and $1,183. The default rate of interest is 1.5% per month. In May 2014, the due date of this note was extended to October 1, 2015.
For federal income tax provision (benefit) forpurposes, the Company has net U.S. operating loss carry forwards at June 30, 2021 available to offset future federal taxable income, if any, of $1,275,168. The utilization of the tax net operating loss carry forwards may be limited due to ownership changes that have occurred as a result of sales of common stock.
The fiscal years 2018 through 2020 remain open to examination by federal authorities and other jurisdictions in which the Company operates.
NOTE 8 – Subsequent Events
Management has reviewed material events subsequent of the period ended June 30, 2014 consists2021 and prior to the filing of our consolidated financial statements in accordance with FASB ASC 855 “Subsequent Events”.
On July 10, 2021, the following:
| 33 | ||||
| Deferred tax assets (liabilities): | ||||
Net operating loss carry forward | $ | 34,471 | ||
Less: valuation allowance | (34,471 | ) | ||
Net deferred tax asset | $ | – |
Subsequent to the Registration Statement on Form S-1, which was declared effective by the SEC on June 25, 2014. Asend of August 31, 2014,fiscal 2021 through September 8, 2021, the Company has sold 2,343,986 purchase shares to EMC2 Capital at prices ranging from $0.30 - $0.34 and received total proceeds of $800,001.
On June 18, 2021, the Company and Firstfire entered into a Securities Purchase Agreement, the Firstfire Note and Firstfire Warrant. The transaction was consumated on July 8, 2021 upon the receipt of funds totaling $224,500.
On July 1, 2021, the Company paid LionsGate $24,000 or $21,215 in excess of the balance owing to LionsGate which the Company recorded as a receivable.
On August 9, 2021, the Company repaid, in whole, the balance due under the Geneva Promissory Note, or $57,173.
During August, the Company paid Charles Strongo, our CEO, the total sum of 540,000$50,000 for work performed in fiscal 2021.
During July, the Company paid Rene Alvarez, our COO, the total sum of $75,000 of which $25,000 related to work performed in fiscal 2021 and $50,000 for services provided in fiscal 2022.
On August 12, 2021, the Company granted and on September 2, 2021, issued 750,000 shares of restricted common stock in exchange for an aggregateservices valued at $354,750 based on the close price of $54,000. As of the date of this report, no shares have been issued.
| 34 |
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A. Controls and Procedures.
(a) Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including the principal executive officerour Chief Executive Officer and the principal financial officer (principal financial officer),Chief Financial Officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rule 13(a)-15(e)Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 Act.(the “Exchange Act”), as of the end of the period covered by this quarterly report. Based on this evaluation, becauseour Chief Executive Officer and Chief Financial Officer concluded that as of the Company’s limited resources and limited number of employees, management concludedJune 30, 2021, that our disclosure controls and procedures were ineffectiveeffective such that the information required to be disclosed in our SEC filings is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as of June 30, 2014.
(b) Management’s Report on Internal Control over Financial Reporting
Management’s Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’sreporting (as defined in Rule 13a-15(f) under the Exchange Act). Our internal control over financial reporting is a process designed under the supervision of our principal executive officer and principal financial officer to provide reasonable assurancesassurance regarding the reliability of financial reporting and the preparation of theour financial statements of the Companyfor external reporting purposes in accordance with U.S. generally accepted accounting principles, orUS GAAP. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree orof compliance with the policies or procedures may deteriorate.
As of our Chief Executive Officer/ Chief Financial Officer (principal financial officer),June 30, 2021, our management, conducted an evaluation ofincluding our principal executive officer and principal financial officer, assessed the effectiveness of our internal control over financial reporting as of June 30, 2014 based onusing the frameworkcriteria set forth in Internal Control—Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO")(comm. only referred to as COSO). Based on this assessment, our evaluation and the material weaknesses described below, management concluded that the Company did not maintain effectiveour internal control over financial reporting was effective based on those criteria as of June 30, 2014 based on the COSO framework criteria. Management has identified control deficiencies regarding the lack of segregation of duties and the need for a stronger internal control environment. Management of the Company believes that these material weaknesses are due to the small size of the Company’s accounting staff. The small size of the Company’s accounting staff may prevent adequate controls in the future, such as segregation of duties, due to the cost/benefit of such remediation. To mitigate the current limited resources and limited employees, we rely heavily on direct management oversight of transactions, along with the use of legal and accounting professionals. As we grow, we expect to increase our number of employees, which will enable us to implement adequate segregation of duties within the internal control framework.
(c) Changes in Internal Controls
There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that haveoccurred during the period covered by this report that has materially affected, or areis reasonably likely to materially affect, our internal controlscontrol over financial reporting.
None.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the compensationnames and ages of our sole Executive Officer for the period from inception on March 7, 2013 through the period ending June 30, 201 4.
| Name And Principal position | Year | Salary($) | Bonus($) | Stock Awards($) | Option Awards($) | Non-Equity Incentive Plan Compensation($) | Nonqualified Deferred Compensation Earnings($) | All Other Compensation($) | Total($) | |||||||||||||||||||||||||
Robert Schwarz, CEO | 2013 (1) | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | |||||||||||||||||
2014 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||
Name | Age | Current Position With Us | Director or Officer Since | |||
Charles Strongo | 57 | CEO, Treasurer, Chairman and Secretary | August 1, 2019 | |||
Rene Alvarez | 83 | COO, President, Director | August 1, 2019 | |||
Dr. Shuijie Cui | 57 | Chief Science Officer and Director | August 1, 2019 | |||
Dr. Scott Ford | 68 | Director | August 1, 2019 | |||
Wolfgang Groeters | 86 | Director | August 1, 2019 | |||
Dr. Miriam Lisbeth Paez De La Cerda | 44 | Director | January 5, 2021 |
Former Officers and Directors
Richard Johnson, CFO, Treasurer and Director from August 1, 2019 through his retirement on August 21, 2020.
Sara P. Gonzales, CEO, President, Secretary, Treasurer and Director since May 6, 2019 through August 1, 2019 resigned all position except for Secretary on August 1, 2019 maintaining the position of Secretary.
Sara Gonzales, Secretary from May 6, 2019 to April 15, 2020. On April 15, 2020, the Company’s Board of Directors accepted the resignation letter dated January 1, 2020 from Sarah Gonzales as the Company’s Secretary. Her resignation was not due to any dispute or disagreement with the Company on any matter relating to the Company's operations, policies or practices and on April 15, 2020 was officially accepted by the Company’s Board of Directors To fill the vacancy created by Ms. Gonzales’ resignation, the Company’s Board of Directors appointed Charles Strongo as the Company’s Secretary.
Biographical Information
Set forth below are the names of all of our directors and executive officers, all positions and offices held by each person, the period during which each has served as such, and the principal occupations and employment of such persons during at least the last five years, and other director positions held currently or during the last five years:
Current Directors and Officers
Charles Strongo, MBA. Mr. Strongo currently serves as the Company’s CEO and Chairman since August 1, 2019 and as Secretary as of April 15, 2020. Mr. Strongo has 30 years’ experience in business management and operations with a proven track record of increasing profitability in the health care industry and particularly in the in-vitro diagnostic industry. Mr. Strongo has been in the in vitro diagnostic business for the past Twenty-Four years, having begun in 1995, the beginning of the “over-the counter” in-vitro diagnostic industry and has managed annual budgets exceeding $500 million. Mr. Strongo has served as President and Chief Executive Officer of EarlyDETECT, Inc. (EDI) since March, 2004. He was a member of the EDI Board of Directors from June 2002 until June 2009. Prior to that, Mr. Strongo served as the Chief Financial Officer for two years. Mr Strongo has owned and operated his own successful FDA Approved diagnostic manufacturing facility. Mr. Strongo has a comprehensive knowledge of ISO and FDA regulations and has prepared several companies for the ISO inspections. Mr. Strongo has filed more than twenty FDA 510K filings; he has also worked on countless pharmaceutical filings. Mr. Strongo has prepared several companies for FDA inspections, under FDA regulatory GMP guidelines. Mr. Strongo has cleared companies for ISO 13485 CDM in less than 6 months, a process that usually takes a year. Mr. Strongo’s dynamic personality, keen understanding and extensive professional expertise, have enabled Mr. Strongo to increase profitability for multiple companies domestically and internationally. Mr. Strongo established businesses in foreign countries, including Canada, Brazil, China, South Africa, Russia, Taiwan, Mexico, Malaysia, Thailand, and the Philippines. Mr. Strongo holds a BA/MBA in Business Management from National University.
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Rene Alvarez. Mr. Alvarez currently serves as the Company’s COO/President as of May 8, 2020 and Director since August 1, 2019. Mr. Alvarez is a graduate of Canisius College (BS in Accounting) and earned a law degree at the State University of New York at Buffalo (LLB and JD degrees). He was admitted to the New York State Bar Association in 1969. Mr. Alvarez also spent two years in the U.S. Army where he attained the rank of Captain and earned the Bronze Star while serving in Viet Nam. After fulfilling his military service, he joined Ford Motor Company in 1969 where he held various key executive positions including Senior Vice President of a Ford subsidiary from which he retired in 1999. After retiring, Mr. Alvarez joined LA Fitness International, LLC as Corporate Vice President until he once again retired in June of 2011. Mr. Alvarez also served as Chairman of the Board of L. L. Knickerbocker Company, a major marketing and distribution source for celebrity products and currently serves on the Boards of Planet Electric, Inc., Whole Health Product, Inc., Las Vegas Cares, and Nevco Co. Mr. Alvarez resides in Newport Beach, California with his wife and two children.
Shuijie Cui. Mr. Ciu served as a post doctorate Fellow in the Ob/Gyn and Reproductive Biology department of The University of Texas Medical School at Houston. Mr. Cui also served as a post doctorate Fellow in the Division of Laboratory Medicine, M.D. Anderson Cancer Center at The University of Texas, Houston. Dr. Cui is known as the father of Strep A Tests. Dr. Cui worked with the Chinese Government on the testing and vaccine for SARS. Dr.
Dr. Scott Ford. Dr. Ford practiced general dentistry for over 39 years retiring in 2016. Dr. Ford taught at USC Dental School as a clinical instructor, part-time for over 7 years both in Emergency Dentistry and Restorative Dentistry. Dr. Ford was a co-founder of Rowpar Pharmaceuticals, a privately held dental products corporation and manufacturer of ClōSYS® oral health products. Dr. Ford received his BA in Biology from UC San Diego in 1975 and DDS degree from University of Southern California School Of Dentistry in 1971.
Wolfgang Groeters. Mr. Groeters’brings several decades of experience in health care and diagnostics and had worked as an engineer for Medtronic's, Bentley Labs, Edward Science and others. Wolfgang has a strong understanding of the health care industry in specialty items.
Dr. Miriam Lisbeth Paez De La Cerda. Dr. Miriam Lisbeth Paez De La Cerda is a General Practitioner with over 15 years of experience. Dr. Miriam currently serves as an outpatient physician at the Institute of Security and Social Services for Government and Municipal Workers of the State of Baja California (ISSSTECALI) since 2007. From 2005 through 2017, Dr. Miriam served as an outpatient physician at Centro de Integracion Juvenil A.C. working as a family doctor and in the risk reduction program for drug addicts. Dr. Miriam actively works to prevent drug addiction by training and recruiting promoters and volunteers of preventive programs for addictions, holding youth forums for addiction prevention, workshops and informative talks (protection and risk factors) in schools, companies and government institutions. Dr. Miriam regularly administers rapid tests for the detection of drugs, HIV and Hepatitis C.
All of our directors are elected annually to serve for one year or until their successors are duly elected and qualified.
Family Relationships and Other Matters
There are no family relationships among or between any of our officers and directors.
Legal Proceedings
None of or directors or officers are involved in any legal proceedings as described in Regulation S-K (§229.401(f)).
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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Because we do not have a class of equity securities registered pursuant to section 12 of the Exchange Act we are not required to make the disclosures required by Item 405 of Regulation SK.
CODE OF ETHICS
We believehave not adopted a code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer, or persons performing similar functions, because of the small number of persons involved in the management of the Company.
CORPORATE GOVERNANCE
Director Independence
We are not listed on a major U.S. securities exchange and, therefore, are not subject to the corporate governance requirements of any such exchange, including those related to the independence of directors However, Our Board considers that a director is independent when the director is not an officer or employee of the Company, does not have any relationship which would, or could reasonably appear to, materially interfere with the independent judgment of such director, and the director otherwise meets the independence requirements under the listing standards of FINRA and the rules and regulations of the SEC. At this time, after considering all of the relevant facts and circumstances, our Board has determined that Dr. Scott Ford, Wolfgang Groeters and Dr. Miriam Lisbeth Paez De La Cerda qualify as “independent” directors”. Upon our listing on any national securities exchange or any inter-dealer quotation system, we will elect such independent directors as is necessary under the rules of any such securities exchange.
Board Leadership Structure
We currently have three executive officers and six directors. Our Board has reviewed our current Board leadership structure — which consists of a Chief Executive Officer who is also the Chairman of the Board, a Chief Operating Officer and Chief Science Officer both of whom are also Directors and three other Directors which are independent — in light of the composition of the Board, our size, the nature of our business, the regulatory framework under which we operate, our stockholder base, our peer group and other relevant factors, and has determined that this structure is currently the most appropriate Board leadership structure for our company. Nevertheless, the Board intends to carefully evaluate from time to time whether our Chief Executive Officer and Chairman positions should be separated based on what the Board believes is best for us and our stockholders.
Board Role in Risk Oversight
Risk is inherent in every business, and how well a business manages risk can ultimately determine its success. We face a number of risks, including strategic risks, enterprise risks, financial risks, and regulatory risks. While our management is responsible for day-to-day management of various risks we face, the Board, as a whole, is responsible for evaluating our exposure to risk and to satisfy itself that the risk management processes designed and implemented by management are adequate and functioning as designed. The Board reviews and discusses policies with respect to risk assessment and risk management. The Board also has oversight responsibility with respect to the integrity of our financial reporting process and systems of internal control regarding finance and accounting, as well as its financial statements.
Board of Directors Meetings, Committees of the Board of Directors, and Annual Meeting Attendance
During the fiscal year ended June 30, 2020, the Board held a total of six (6) meetings. All members of the Board attended all Board meetings. We do not maintain a policy regarding director attendance at annual meetings and we did not have an annual meeting of shareholders during the fiscal years ended June 30, 2020 and 2019.
We do not currently have any standing committees of the Board. The full Board is responsible for performing the functions of: (i) the Audit Committee, (ii) the Compensation Committee and (iii) the Nominating Committee.
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ITEM 11. EXECUTIVE COMPENSATION
Our Board is responsible for establishing the compensation and benefits for our executive officers. The Board reviews the performance and total compensation package for our executive officers, and considers the modification of existing compensation and the adoption of new compensation plans. The board has not retained any compensation consultants.
Summary Compensation Table
The following table sets forth information concerning compensation earned for services rendered to us by our executive officers who were serving as executive officers during the fiscal years ended June 30, 2021 and 2020:
Name and Principal Position | Year Ended June 30, |
Salary ($) |
Stock Awards ($) | Total ($) |
Charles Strongo (1) (2) CEO, Treasurer, Chairman and Secretary | 2021 | 75,000 | 4,624,000 | 4,699,000 |
2020 | - | 1,000,000 | 1,000,000 | |
Richard Johnson (1) Former CFO, Treasurer and Director | 2021 | 20,000 | - | 20,000 |
2020 | - | - | - | |
Rene Alvarez (3) COO, President and Director | 2021 | 79,800 | 144,000 | 223,800 |
2020 | 10,000 | 1,000,000 | 1,010,000 | |
Dr. Shuijie Cui (4) Chief Science Officer and Director | 2021 | - | 144,000 | 144,000 |
2020 | - | - | - | |
Sara P. Gonzales (1) Former CEO, President, Treasurer and Secretary | 2020 | - | - | - |
(1) Sara Gonzales was appointed as CEO, President, Treasurer, Secretary and Director on May 6, 2019. Sara Gonzales did not earn and was not paid any compensation during her tenure. Sara Gonzales resigned all positions on August 1, 2019 except as Secretary which position she resigned from on April 15, 2020 and Mr. Strongo assumed. In her place, on August 1, 2019, the Company appointed Charles Strongo to serve as the Company’s CEO, President and Chairman and Richard Johnson to serve as the Company’s CFO, Treasurer and Director. Richard Johnson served a CFO, Treasurer and Director through August 21, 2020.
(2) Mr Strongo was granted 500,000 shares of common stock on May 8, 2020 valued at the close price of our common stock ($2.00 per share) resulting in $1,000,000 of compensation in fiscal 2020. In Fiscal 2021, Mr. Strongo was granted 1) 200,000 shares on January 5, 2021 valued at the close price of our common stock ($0.72 per share) or $144,000; 2) 3,000,000 shares pursuant to the Patent License Agreement dated January 12, 2021 valued at the close price of our common stock ($0.46 per share) or $1,380,000; and 3) 5,000,000 shares pursuant to the IP License Agreement dated March 30, 2021 valued at the close price of our common stock ($0.62 per share) or $3,100,000. For additional information see “NOTE 4 – Stockholders’ Equity”, under Item 8 of this Annual Report.
(3) Mr. Alvarez was $10,000 in cash compensation during fiscal 2020 and granted 500,000 shares of common stock on May 8, 2020 valued at the close price of our common stock ($2.00 per share) resulting in $1,010,000 of compensation in fiscal 2020. In Fiscal 2021, Mr. Alvarez received $54,800 in cash compensation and was granted 200,000 shares on January 5, 2021 valued at the close price of our common stock ($0.72 per share) or $144,000.
(4) In Fiscal 2021, Mr. Cui was granted 200,000 shares on January 5, 2021 valued at the close price of our common stock ($0.72 per share) or $144,000.
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Employment Agreements
We currently have no employment agreements in place. The Board approved cash compensation to be paid to Mr. Strongo and Mr. Alvarez for fiscal 2021 in the amount of $75,000 and $79,800, respectively, and to compensate each individualof Messrs. Strongo and Alvarez $75,000 during fiscal 2022.
Outstanding Equity Awards as Fiscal Year-End
None.
Payments Upon Termination of Change in Control
There are no understandings or entity namedagreements known by management at this time which would result in a change in control.
COMPENSATION OF DIRECTORS
Our directors play a critical role in guiding our strategic direction and overseeing the management of our Company. Ongoing developments in corporate governance and financial reporting have resulted in an increased demand for such highly qualified and productive public company directors. The many responsibilities and risks and the substantial time commitment of being a director of a public company require that we provide adequate incentives for our directors’ continued performance by paying compensation commensurate with our directors’ workload. In establishing director compensation, the Board is guided by the following goals:
· compensation should consist of cash and/or equity awards that are designed to fairly pay the directors for work required for a company of our size and scope;
· compensation should align the directors’ interests with the long-term interests of stockholders; and
· compensation should assist with attracting and retaining qualified directors.
For their services as directors, on January 5, 2021, the Board granted 200,000 shares of restricted common stock to each of the six (6) directors. The stock was valued at the close price of our common stock ($0.72 per share) or $144,000 per director and $864,000 in total. No Board compensation was paid during fiscal 2020.
Limitation on Directors' Liabilities; Indemnification of Officers and Directors
Our Bylaws designate the relative duties and responsibilities of our officers and establish procedures for actions by directors and stockholders and other items. Our bylaws also contain indemnification provisions, which will permit us to indemnify our officers and directors to the maximum extent provided by Nevada law. For additional information, see Exhibit 3.2 to this Annual Report.
Directors' and Officers' Liability Insurance
We have not obtained directors' and officers' liability insurance.
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth certain information as of the date of this report by (i) all persons who are known by us to beneficially own more than 5% of our outstanding shares of common stock, (ii) each director, director nominee, and Named Executive Officer; and (iii) all executive officers and directors as a group:
Name and Address of Beneficial Owner (1) | Number of shares Beneficially Owned (2) | Percent of Class Owned (2) |
Directors and Officers |
|
|
Charles Strongo | 14,025,531 | 17.1% |
Rene Alvarez | 7,493,698 | 9.1% |
Dr. Scott Ford | 1,039,132 | 1.3% |
Dr. Shuijie Cui | 2,975,000 | 3.6% |
Wolfgang Groeters | 2,230,000 | 2.7% |
Dr. Miriam Lisbeth Paez De La Cerda | 200,000 | * |
All Directors and Officers as a Group | 27,963,361 | 34.1% |
|
|
|
5% shareholders |
|
|
Charles Strongo | 14,025,531 | 17.1% |
Rene Alvarez | 7,493,698 | 9.1% |
5% shareholders as a group | 21,519,229 | 26.2% |
Total Directors and Officers and 5% Shareholders | 27,963,361 | 34.1% |
* less than 1%
(1) Beneficial ownership is determined in accordance with SEC rules and generally includes voting or investment power with respect to securities. Each of the beneficial owners listed above has direct ownership of and sole investmentvoting power and votinginvestment power with respect to the securitiesshares of our common stock and except as indicated as beneficially owned by them, subjectthe address of each beneficial owner is 1402 N El Camino Real, San Clemente, CA 92672.
(2) Calculated pursuant to community property laws, where applicable, except where otherwise noted:
| Name and Address | Shares of Common Stock Beneficially Owned | Percent of Shares Outstanding | ||||||
Robert Schwarz | 15,000,000 | 64 | % | |||||
Officers and Directors as a group (1 person) | 15,000,000 | 64 | % | |||||
ITEM 13. CertainCERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
We do not have a formal written policy for the review and approval of transactions with related parties; however, our Corporate Governance Principles require actual or potential conflict of interest to be reported to the Board. Our employees are expected to disclose personal interests that may conflict with ours and they may not engage in personal activities that conflict with their responsibilities and obligations to us. Periodically, we inquire as to whether or not any of our Directors have entered into any transactions, arrangements or relationships that constitute related party transactions. If any actual or potential conflict of interest is reported, our entire Board and outside legal counsel review the transaction and relationship disclosed and the Board makes a formal determination regarding each Director's independence. If the transaction is deemed to present a conflict of interest, the Board will determine the appropriate action to be taken.
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Transactions with Related Persons
The Board is responsible for review, approval, or ratification of “related-person transactions” involving Global WholeHealth Partners or its subsidiaries and related persons. Under SEC rules (Section 404 (a) of Regulation S-K), a related person is a director, officer, nominee for director, or 5% stockholder of our outstanding shares of common stock since the beginning of the previous fiscal year, and their immediate family members. Immediate family members include spouses, parents, stepparents, children, stepchildren, siblings, mothers- and fathers-in-law, sons- and daughters-in-law, and brothers- and sisters-in-law and anyone residing in such person’s home (other than a tenant)
The Board has determined that, barring additional facts or circumstances, a related person does not have a direct or indirect material interest in the following categories of transactions:
· any transaction with another company for which a related person’s only relationship is as an employee (other than an executive officer), director, or beneficial owner of less than 10% of that company’s shares, if the amount involved does not exceed the greater of $1 million or 2% of that company’s total annual revenue;
· compensation to executive officers determined by the Board;
· compensation to directors determined by the Board;
· transactions in which all security holders receive proportional benefits; and
· banking-related services involving a bank depository of funds, transfer agent, registrar, trustee under a trust indenture, or similar service.
Review, Approval or Ratification of Transactions with Related Persons
The Board reviews transactions involving related persons who are not included in one of the above categories and makes a determination whether the related person has a material interest in a transaction and may approve, ratify, rescind, or take other action with respect to the transaction in its discretion. An interested related party who serves on the Board shall recuse their self from the review and approval of a related party transaction in which they have an interest in the transaction. In the event of a potential conflict of interest, the Board will generally evaluate the transaction in terms of the following standards: (i) the benefits to us; (ii) the impact on a director’s independence in the event the related person is a director, independence
The following is a description of each transaction since the beginning of 2019, and each currently proposed transaction, in which:
· we have been or are to be a participant;
· the amount involved exceeds the lesser of $120,000 or 1% of the average of our total assets for the last two completed fiscal years; and
· any of our directors, or executive officers nor any proposed nominee for election as a director, nor any person who beneficially owns, directly or indirectly, shares carryingholders of more than 5% of the voting rights attached to allany class of our outstanding shares, nor any memberscapital stock at the time of the transactions in issue, or any immediate family (including spouse, parents, children, siblings, and in-laws)member of or person sharing the household with any of the foregoing persons has any material interest,these individuals, had or will have a direct or indirect material interest.
For additional information see “NOTE 5 – Transactions with Related Persons”, under Item 8 of this Annual Report.
Director Independence
Please refer to “Director Independence” under the section titled “CORPORATE GOVERNANCE” in “ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.”
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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Independent Public Accountants
BFBorgers CPA PC currently serves as our independent registered public accounting firm to audit our financial statements for the fiscal year ended June 30, 2021 and 2020. To the knowledge of management, neither such firm nor any of its members has any direct or material indirect financial interest in us or any connection with us in any transaction since March 7, 2013 (inception) or in any presently proposed transaction which, in either case, has or will materially affect us.
| Fiscal year ended June 30, | ||||||||
| Description | 2014 | 2013 | ||||||
Year end audit and review of quarterly interim financial statements | $ | 21,500 | $ | 10,000 | ||||
Other audit related fees not included above | Nil | nil | ||||||
Tax compliance, tax advice and tax planning | Nil | nil | ||||||
Total | $ | 21,500 | $ | 10,000 | ||||
Our Board, in its discretion, may direct the appointment of Directorsdifferent public accountants at any time during the year, if the Board believes that a change would be in the best interests of the stockholders. The Board has considered the information described in “Financial Information Systems Designaudit fees, audit-related fees, tax fees and Implementation Fees ”other fees paid to our auditors, as disclosed below, and “ All Other Fees ” above and believeshas determined that itthe payment of such fees is compatible with maintaining the principal accountant’s independence. In each case (commencing after August 1, 2002),independence of the board of directors pre-approved all such services.
Principle Accounting Fees and Services
Audit Fees
We have incurred fees totaling $38,200 and $54,500 for professional services related to the audit of our financial statements for the most recent two fiscal years.
Audit-Related Fees
None.
Tax Fees
The Company did not pay an outside accountant to prepare tax returns for the year ended June 30, 2021 and 2020.
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PART IV
ITEM 15. Exhibits and financial statement schedules
(a) The following exhibitsdocuments are filed withas a part of this Form 10-K or10-K:
1. Financial Statements
The following financial statements are included in Part II, Item 8 of this Form 10-K:
● Report of Independent Registered Public Accounting Firm;
● Balance Sheets as of June 30, 2021 and 2020;
● Statements of Operations for the years ended June 30, 2021 and 2020;
● Statements of Stockholders’ Deficit for the years ended June 30, 2021 and 2020;
● Statements of Cash Flows for the years ended June 30, 2021 and 2020; and
● Notes to Financial Statements
2. Exhibits
The exhibits listed in the Exhibit Index, which appears immediately following the signature page, are incorporated herein by reference, and are filed as part of this Form 10-K.
3. Financial Statement Schedules
Financial statement schedules are omitted because they are not required or are not applicable, or the following references.
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SIGNATURES
Pursuant to the requirements of SectionSections 13 or 15(d) of the Securities and Exchange Act of 1934, as amended, the Registrantregistrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Global WholeHealth Partners Corporation
(Registrant)
September 27, 2021
By: /s/ Robert Schwarz
Charles Strongo
Chief Executive Officer, Treasurer, Secretary and President
(Principal Executive Officer and Principal Financial Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature | Title | Date |
/s/ Charles Strongo Charles Strongo | Chief Executive Officer and Director (Principal Executive Officer) | September 27, 2021 |
/s/ Rene Alvarez Rene Alvarez | Chief Operating Officer, President and Director | September 27, 2021 |
/s/ Dr. Shuijie Cui Dr. Shuijie Cui | Chief | September 27, 2021 |
/s/ Dr. Scott Ford Dr. Scott Ford | Director | September 27, 2021 |
/s/ Wolfgang Groeters Wolfgang Groeters | Director | September 27, 2021 |
/s/ Dr. Miriam Lisbeth Paez De La Cerda Dr. Miriam Lisbeth Paez De La Cerda | Director | September 27, 2021 |
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Exhibit Index
Exhibit No | Description of Exhibit |
Notice of Entry of Order, Eight Judicial District Court, Clark County, Nevada, Case No.: A-19-787038-P (Incorporated by reference to the Form 10 filed on December 19, 2019) | |
Articles of Incorporation (Incorporated by reference to Form S-1 filed on January 28, 2014) | |
By-Laws (Incorporated by reference to Form S-1 filed on January 28, 2014) | |
Certificate of Change dated May 9, 2019 (Incorporated by reference to Form 10 filed on December 19, 2019) | |
Certificate of Amendment dated May 9, 2019 (Incorporated by reference to Form 10 filed on December 19, 2019) | |
Certificate of Change dated August 30, 2019 (Incorporated by reference to Form 10 filed on December 19, 2019) | |
Stock Purchase and Sale Agreement between the Company and Lionsgate Funding Group, LLC dated May 23, 2019 (Incorporated by reference to Form 10 filed on December 19, 2019) | |
Media and Marketing Services Agreement between Global WholeHealth Partners Corp and Empire Associates, Inc. dated August 18, 2020 (Incorporated by reference to the Form 8-K filed on August 21, 2020) | |
Form of Common Stock Purchase Agreement between Global WholeHealth Partners Corp and EMC2 Capital, LLC dated July 22, 2020 (Incorporated by reference to the Form 8-K filed on July 23, 2020) | |
Form of Common Stock Purchase Warrant between Global WholeHealth Partners Corp and EMC2 Capital, LLC dated July 22, 2020 (Incorporated by reference to the Form 8-K filed on July 23, 2020) | |
Registration Rights Agreement between Global WholeHealth Partners Corp and EMC2 Capital, LLC dated July 22, 2020 (Incorporated by reference to the Form 8-K filed on July 23, 2020) | |
Form of Stock Purchase Agreement between Global WholeHealth Partners Corp and Geneva Roth Remark Holdings, Inc. dated July 13, 2020 (Incorporated by reference to the Form 10-K filed on September 28, 2020) | |
Form of Convertible Promissory Note between Global WholeHealth Partners Corp and Geneva Roth Remark Holdings, Inc. dated July 13, 2020 (Incorporated by reference to the Form 10-K filed on September 28, 2020) | |
Form of Stock Purchase Agreement between Global WholeHealth Partners Corp and Geneva Roth Remark Holdings, Inc. dated August 3, 2020 (Incorporated by reference to the Form 10-K filed on September 28, 2020) | |
Form of Convertible Promissory Note between Global WholeHealth Partners Corp and Geneva Roth Remark Holdings, Inc. dated August 3, 2020 (Incorporated by reference to the Form 10-K filed on September 28, 2020) | |
Form of Stock Purchase Agreement between Global WholeHealth Partners Corp and Geneva Roth Remark Holdings, Inc. dated April 26, 2021 (Incorporated by reference to Form 10-Q filed on May 24, 2021) | |
Form of Common Stock Purchase Warrant between Global WholeHealth Partners Corp and Geneva Roth Remark Holdings, Inc. dated April 26, 2021 (Incorporated by reference to Form 10-Q filed on May 24, 2021) | |
4.12* | Form of Securities Purchase Agreement between Global WholeHealth Partners Corp and Firstfire Global Opportunities Fund, LLC dated June 18, 2021. |
4.13* | Form of Senior Secured Convertible Promissory Note between Global WholeHealth Partners Corp and Firstfire Global Opportunities Fund, LLC dated June 18, 2021. |
4.14* | Form of Security Agreement between Global WholeHealth Partners Corp and Firstfire Global Opportunities Fund, LLC dated June 18, 2021. |
4.15* | Form of Common Stock Purchase Warrant issued to by Global WholeHealth Partners Corp to Firstfire Global Opportunities Fund, LLC dated June 18, 2021. |
Distribution Agreement and Letter of Exclusivity (Incorporated by reference to Form 10 filed on March 20, 2020) | |
Form of Promissory Note between LionsGate Funding Group LLC and Global WholeHealth Partners Corp. dated March 29, 2020 (Incorporated by reference to the Form 10-Q filed on May 7, 2020) | |
Form of convertible promissory Note dated April 18, 2020 (Incorporated by reference to the Form 10-K filed on September 28, 2020) | |
Licensing Agreement with Charles Strongo dated January 12, 2021 (Incorporated by reference to the Form 8-K filed on January 21, 2021) | |
Loan Agreement and Promissory Note between LionsGate Funding Group LLC and Global WholeHealth Partners Corp. dated January 27, 2021 (Incorporated by reference to the Form 10-Q filed February 16, 2021) | |
License Agreement with Charles Strongo dated March 21, 2021 (Incorporated by reference to Form 10-Q filed on May 24, 2021) | |
Mutual Sales and Marketing Agreement dated April 12, 2021 (Incorporated by reference to the Form 8-K filed on April 19, 2021) | |
Form of Promissory Note between Global WholeHealth Partners Corp and Geneva Roth Remark Holdings, Inc. dated April 26, 2021 (Incorporated by reference to Form 10-Q filed on May 24, 2021) | |
Partnership Joint Venture Philippines Agreement dated May 19, 2021 (Incorporated by reference to Form 8-K filed on May 21, 2021) | |
Media and Marketing Services Agreement between Global WholeHealth Partners Corp and LinosGate Funding Mangement LLC dated July 18, 2021 | |
Acknowledgement Letter from the FDA dated March 15, 2020 (Incorporated by reference to the Form 10-Q filed on May 7, 2020) | |
Acknowledgement Letter from the FDA dated April 6, 2020 (Incorporated by reference to the Form 8-K filed on April 10, 2020) | |
Certification of Principal Executive Officer and Principal | |
Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002* | |
101.INS | XBRL Instance Document |
101.SCH | XBRL Taxonomy Extension - Schema Document |
101.CAL | XBRL Taxonomy Extension - Calculation Linkbase Document* |
101.DEF | XBRL Taxonomy Extension - Definition Linkbase Document |
101.LAB | XBRL Taxonomy Extension - Label Linkbase Document |
101.PRE | XBRL Taxonomy Extension - Presentation Linkbase Document |
104 | Cover page formatted as Inline XBRL and contained in Exhibit 101 |
*Filed herewith.
§ Management contract or compensatory plan.
| 46 |