See accompanying notes to consolidated financial statements.

Intiva BioPharma Inc.

Consolidated Statements of Operations and Comprehensive Loss

For the Three and Six Months Ended December 31, 2017

(Unaudited)

See accompanying notes to consolidated financial statements.

Intiva BioPharma Inc.

Consolidated Statements of Cash Flows

For the Six Months Ended December 31, 2017

(Unaudited)

See accompanying notes to consolidated financial statements.

IntivaNexien BioPharma, Inc.

NotesConsolidated Statements of Operations

For the Three and Six Months Ended December 31, 2020 and 2019

(Unaudited)

See accompanying notes to consolidated financial statements.

Nexien BioPharma, Inc.

Consolidated FinancialStatement of Stockholders’ Equity

For the Six months ended December 31, 2020 and 2019

(Unaudited)

See accompanying notes to consolidated financial statements.

Nexien BioPharma, Inc.

Consolidated Statements of Cash Flows

For the Six Months Ended December 31, 2020 and 2019

(Unaudited)

See accompanying notes to consolidated financial statements.

NEXIEN BIOPHARMA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Unaudited

Note 1 – Nature of Business and Basis of Presentation

The Company was incorporated on November 10, 1952 in Michigan as Gantos, Inc. On July 21, 2008, the Company completed its change in domicile to Delaware and subsequently changed its name to Kinder Holding Corp. (the “Company”). As of October 13, 2017, the Company completed a reverse acquisition of Intiva BioPharma Inc., a Colorado corporation (“BioPharma”) through an exchange of shares (the “Share Exchange Transaction”). In connection with the Share Exchange Transaction, the Company changed its name to Intiva BioPharma Inc. on November 8, 2017.2017 and, in September 2018, the Company changed its name to Nexien BioPharma, Inc.

As further described in Note 3,4, BioPharma became a wholly-owned subsidiary of the Company. Since this transaction resulted in the existing shareholders of BioPharma acquiring control of the Company, for financial reporting purposes, the business combination has been accounted for as an additional capitalization of the Company (a reverse acquisition with BioPharma as the accounting acquirer). The operations of BioPharma were the only continuing operations of the Company. The accompanying financial statements as of December 31, 20172020 and for the three and six month periodsmonths then ended, and June 30, 2020, and year then ended, present the historical financial information of BioPharma.

BioPharma was incorporated under the laws of the State of Colorado on March 27, 2017 to pursue pre-clinical and drug development activities, in accordance with U.S. Food and Drug Administration (“FDA”) protocols, for certain pharmaceutical formulations that include cannabinoids. It is pursuing the formulation and development of cannabinoid-based drugs containing cannabinoids for the treatment of various diseases, disorders and medical conditions, and disorders, and owns a license covering certain intellectual property, including certain patent applications, and has filed fivethree of its own provisional patent applications for other drugs that include cannabinoids and other substances, including terpenes, that are intended to be developed with the objective of treating certain medical conditions and disorders. It was formed as a corporate subsidiary of the Colorado corporation IntivaKanativa USA Inc. (“IntivaKanativa USA”), which is a subsidiary of the Ontario, Canada corporation, INTIVAKanativa Inc.

All share and per share amounts have been adjusted in the footnotes and accompanying financial statements to give effect to the Share Exchange Transaction.

Principles of Consolidation

The accompanying consolidated financial statements include BioPharma and its wholly owned subsidiaries: Intiva Kotzker PharmaceuticalsBioPharma Inc. (a Colorado corporation), NexN Inc. (“Intiva Kotzker”NexN”) and Intiva SharirNexDM Inc. (collectively “the Company”the “Company”), and were prepared from the accounts of the Company in accordance with accounting principles generally accepted in the United States of America (US GAAP). All significant intercompany transactions and balances have been eliminated on consolidation.

All share and per share amounts have been adjusted in the footnotes and accompanying financial statements to give effect to the Share Exchange Transaction. (See Note 4).

Basis of PresentationNote 2 - Going Concern Uncertainty

The Financial Statements presented hereinaccompanying financial statements have been prepared in accordanceconformity with US GAAP, which contemplates continuation of the Company as a going concern. The Company has not established any source of revenue to cover its operating costs, and as such, has incurred an operating loss since inception of $10,336,610. The development of pharmaceuticals with the accounting policies described inobjective of obtaining approval by the June 30, 2017 auditedFDA and other international regulatory authorities is not a short-term endeavor for any specific drug candidate. It also requires extremely significant amounts of capital funding for clinical trials and other matters. At December 31, 2020, the Company had working capital $51,420. The Company will require significant additional capital to fund the implementation and execution of its business plan. This capital, which likely will be millions of dollars for a single drug candidate, will be required for research, regulatory applications, and clinical trials. At the present time, the Company does not have any commitments or known sources for this level of funding. These and other factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and should be read in conjunction withclassification of assets or the notesamounts and classification of liabilities that may result from the possible inability of the Company to financial statements which appearcontinue as parta going concern.

NEXIEN BIOPHARMA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Unaudited

Note 3 – Summary of those financial statements.Significant Accounting Policies

Use of Estimates

The preparation of these financial statements in conformity with generally accepted accounting principles generally acceptedrequires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statement and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from the estimates.

Cash and Cash Equivalents

For financial statement presentation purposes, the Company considers those short-term, highly liquid investments with original maturities of three months or less to be cash or cash equivalents. There were no cash equivalents at December 31, 2020 and June 30, 2020.

Valuation of Long-Lived Assets

The Company reviews the recoverability of its long-lived assets including equipment, goodwill and other intangible assets, when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on the Company’s ability to recover the carrying value of the asset from the expected future pre-tax cash flows (undiscounted and without interest charges) of the related operations. If these cash flows are less than the carrying value of such asset, an impairment loss is recognized for the difference between estimated fair value and carrying value. The Company’s primary measure of fair value is based on discounted cash flows. The measurement of impairment requires management to make estimates of these cash flows related to long-lived assets, as well as other fair value determinations.

Fair Value of Financial Instruments

Financial Accounting Standards Board (FASB) ASC 825, Financial Instruments, requires entities to disclose the fair value of financial instruments, both assets and liabilities recognized and not recognized on the balance sheet, for which it is practicable to estimate fair value. FASB ASC 825 defines fair value of a financial instrument as the amount at which the instrument could be exchanged in a current transaction between willing parties. At December 31, 2020 and June 30, 2020, the carrying value of certain financial instruments (cash and cash equivalents, accounts payable and accrued expenses) approximates fair value due to the short-term nature of the instruments or interest rates, which are comparable with current rates.

Fair Value Measurements

The Company measures fair value under a framework that utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of inputs which prioritize the inputs used in measuring fair value are:

Level 1: Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access.

Level 2: Inputs to the valuation methodology include:

NEXIEN BIOPHARMA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Unaudited

Note 3 – Summary of Significant Accounting Policies (continued)

If the asset or liability has a specified (contractual) term, the level 2 input must be observable for substantially the full term of the asset or liability.

Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.

When the Company changes its valuation inputs for measuring financial assets and liabilities at fair value, either due to changes in current market conditions or other factors, it may need to transfer those assets or liabilities to another level in the hierarchy based on the new inputs used. The Company recognizes these transfers at the end of the reporting period that the transfers occur. For the periods ended December 31, 2020 and June 30, 2020, there were no significant transfers of financial assets or financial liabilities between the hierarchy levels.

As at December 31, 2020 and June 30, 2020, no assets or liabilities were required to be measured at fair value on a recurring basis.

Earnings per Common Share

The Company computes net income (loss) per share in accordance with ASC 260, Earnings per Share. ASC 260 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive.

Income Taxes

The Company has adopted ASC 740, Accounting for Income Taxes. Pursuant to ASC 740, the Company is required to compute tax asset benefits for net operating losses carried forward. The potential benefits of net operating losses have not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years.

Revenue Recognition

The Company has adopted ASC 606, Revenue from Contracts with Customers. Under ASC 606, the Company recognizes revenue from the commercial sales of products, licensing agreements and contracts to perform pilot studies by applying the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied.

Research and Development Expenses

Research and development expenses are charged to operations as incurred.

NEXIEN BIOPHARMA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Unaudited

Note 3 – Summary of Significant Accounting Policies (continued)

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents. Cash and cash equivalents are deposited with major banks in the United States of America requires usAmerica. Management believes that such financial institutions are financially sound and, accordingly, minimal credit risk exists with respect to make estimates and judgments that affect the reported amountsthese financial instruments. The Company does not have any significant off-balance-sheet concentration of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to intangible assets, income taxes, insurance obligations and contingencies and litigation. We base our estimates on 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 carrying values of assets and liabilities that are not readily apparent from other resources. Actual results may differ from these estimates under different assumptions or conditions.

In the opinion of Management, the information furnished in these interim financial statements reflects all adjustments necessary for a fair statement of the financial position and results of operations and cash flows as of and for the three and six-month periods ended December 31, 2017. All such adjustments are of a normal recurring nature.

credit risk.

Note 2 – Recently Issued Accounting Pronouncements

Stock-based compensation

In January 2017,Pursuant to ASC 718, Compensation – Stock Compensation, all share-based payments to employees, including grants of employee stock options, are recognized in the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-04, Intangibles - Goodwill and Other (Topic 350). ASU 2017-04 simplifiesstatement of operations based on their fair values.

Issuance of shares for non-cash consideration

The Company accounts for the subsequent measurementissuance of goodwill by removing the second step of the two-step impairment test. The amendment requires an entityequity instruments to perform its annual, acquire goods and/or interim goodwill impairment test by comparingservices based on the fair value of a reporting unit with its carrying amount. An impairment charge should be recognizedthe goods and services or the fair value of the equity instrument at the time of issuance, whichever is more reliably determinable. The Company’s accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of the standards issued by the FASB. The measurement date for the amountfair value of the equity instruments issued is determined as the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the carrying amount exceedsconsultant or vendor’s performance is complete. In the reporting unit’scase of equity instruments issued to consultants, the fair value; however,value of the lossequity instrument is recognized should not exceedover the total amountterm of goodwill allocated to that reporting unit. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The amendment should be applied on a prospective basis. ASU 2017-04 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company intends to early adopt the ASU in 2018.consulting agreement.

Reclassifications

In January 2017,Certain amounts in the consolidated financial statements for prior year periods have been reclassified to conform with the current period presentation.

Recent Accounting Pronouncements

Although there are several other new accounting pronouncements issued or proposed by the FASB, issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which clarifies the definition of a business to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The standard will be effective for the Company inhas adopted or will adopt, as applicable, the first quarterCompany does not believe any of 2018. Early adoption is permitted. The Company is currently evaluating thethese accounting pronouncements has had or will have a material impact of adopting this ASU on its consolidated financial statements.

There are no other recentlyposition or results of operations. Management has evaluated accounting standards and interpretations issued accountingbut not yet effective as of December 31, 2020 and does not expect such pronouncements that the Company has yet to adopt that are expected to have a material effectimpact on itsthe Company’s financial position, results of operations, or cash flows.

Note 3 –Share4 – Share Exchange Agreement and Acquisition Deposit

On August 8, 2017, the Company entered into a Share Exchange Agreement, as amended and restated on October 13, 2017 (the “Agreement”), with BioPharma. Pursuant to the terms of the Agreement, the Company agreed to issue to the shareholders of BioPharma 42,642,712 post-reverse stock-split shares of the Company’s common stock, par value $0.0001 (“Common Stock”), in exchange for all of the issued and outstanding shares of BioPharma capital stock, thereby making BioPharma a wholly-owned subsidiary of the Company. As part of the Closing of the Agreement, the 20,000,000 pre-reverse split shares of the Company’s Common Stock previously purchased by IntivaKanativa USA, effective on June 26, 2017 in a change in control transaction from the Company’s control shareholders, shall bewere canceled.

Subsequent to Since this transaction resulted in the Closing, the Company agreed to undertake to implement certain corporate actions, including filing with the Stateexisting shareholders of Delaware a Certificate of Amendment to the Company’s Certificate of Incorporation to:

On October 13, 2017, the Closing of the Agreement became effective, and as a result of the share exchange, BioPharma became a wholly-owned subsidiaryacquiring control of the Company, and the results of business will be consolidated on the Company’s consolidated financial statements. Forfor financial reporting purposes, the transaction is to bebusiness combination has been accounted for as an additional capitalization of BioPharmathe Company (a reverse acquisition with BioPharma as the accounting acquirer (reverse acquirer). The operations of BioPharma will be the continuing operations of the Company.

NEXIEN BIOPHARMA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Unaudited

Note 5 – License Agreements

Kotzker License Agreement

In March 2017, the Company licensed certain intellectual property from Kotzker Consulting LLC (“Kotzker Consulting”), an unrelated entity. The licensed intellectual property included patent applications relating to the use of cannabinoid receptor modulators and terpenes in the acute treatment during exposure to organophosphorus nerve agents and/or organophosphorus insecticides. Under terms of the agreement, the Company was required to use its commercially reasonable efforts to develop and commercialize the licensed products, and, in particular, was to be responsible for the design, manufacturing, preclinical, clinical, and regulatory development activities of the licensed products and shall bear the costs of such activities. As consideration for entering into the agreement, the Company agreed to: (i) pay Kotzker Consulting $180,000, (ii) pay patent prosecution costs incurred as of the date of the agreement of $15,000 and (iii) issue to Kotzker Consulting 31,550 shares of Kanativa Inc.’s common stock valued at $78,875 ($2.50 per share based on a private placement to third parties of Kanativa Inc.’s common stock at that time). The Company also capitalized legal fees of $29,040 incurred in conjunction with acquiring the license agreement. The license agreement was to terminate, on a country by country basis, upon the expiration of the licensed patent for the licensed intellectual property, or when a competitor generic product utilizing the licensed technology was marketed in the particular country.

The Company was to be responsible for development milestone payments for (i) licensed products for use as a preventative and therapeutic neuroprotective against nerve agents and pesticides and (ii) licensed products for treatment of diseases. Milestone payments for each of the foregoing was to be due in two payments, the first payment no later than thirty (30) days from acceptance of submission of the regulatory filing of the first licensed product and the second payment no later than thirty (30) days from approval of the first licensed product. Royalties were to be due beginning with first commercial sale of developed products. The Company had completed and submitted a Pre-Investigational New Drug meeting request and amendment thereto with the FDA.

In September 2017, the Company entered into a contract with a contract manufacturing organization to develop an injectable formulation of a drug product to be submitted to the FDA. It was anticipated that the product would be developed utilizing the new drug application 505(b) (2) regulatory pathway for use in the treatment during and immediately following exposure to organophosphorous nerve agents. The drug product was to consist of a synthetic cannabinoid and a blend of terpenes in an injectable vehicle.

The Company previously estimated that it may not be able to recover the $302,915 carrying value of costs capitalized under the Kotzker License Agreement and recognized an impairment of the $302,915 at June 2017, pursuant30, 2019. In December 2020, the Company elected to terminate this agreement, assigned the licensed intellectual property back to Kotzker and issued 150,000 restricted shares of common stock, valued at $13,500 ($0.09 per share) as a final payment for consulting fees owed.

Accu-Break License Agreement

On February 28, 2018, the Company obtained a worldwide exclusive license with respect to a Debt Purchase Agreement, BioPharmaproprietary delivery system for cannabinoid-based medications from Accu-Break Pharmaceuticals Inc (Accu-Break). Upon execution of the agreement, as amended September 18, 2018, $35,000 was paid $86,670 to the licensor; an additional $30,000 was paid in cash during the year ended June 30, 2019; and a former directorfinal payment of $35,000 was paid in common stock of the Company during the year ended June 30, 2020. The Company is required to satisfypay milestone payments upon obtaining regulatory approval of pharmaceutical licensed products and royalties based upon sales of licensed products. The Company may grant sublicenses under the debt obligationterms of the agreement.

The Company has previously estimated that it may not be able to recover the director$65,000 of costs capitalized under the Accu-Break License Agreement, and recognized an impairment of $65,000 for BioPharmathe license at June 30, 2019. The $35,000 value of common stock issued in the year ended June 30, 2020 was charged to purchase the debt obligation. The amount paid and additional costs paid by BioPharma on behalf ofoperations. Although the Company subsequent to June 30, 2017 of $12,900 aggregated $99,570, was classified as a non-current asset onhas recognized an impairment under Generally Accepted Accounting Principles, it retains its rights under the accompanying June 30, 2017 consolidated balance sheet.Accu-Break license agreement.

NEXIEN BIOPHARMA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Unaudited

Note 4 –Stockholders’6– Stockholders’ Equity

Common stock

In May 2017, BioPharma commencedDuring the year ended June 30, 2020, the Company issued 473,286 shares of its common stock as follows:

During the six months ended December 31, 2020, the Company issued shares of its common stock as follows:

CRX Limited Liability Company Interest Purchase Agreement

On October 26, 2018, Company entered into a private placementLimited Liability Company Interest Purchase Agreement (the “Purchase Agreement”) with the members of 1,116,400 unitsCRX Bio Holdings LLC, a Delaware limited liability company (“CRX”), to acquire all of Common Stockthe membership interest in CRX in exchange for 11,000,000 restricted shares of the Company’s common stock (the “Acquisition”), valued at $0.76 per share. The transaction has been accounted for as an asset acquisition, and Warrantsnot a business combination, and has been valued at the fair value of the common stock issued by the Company, as CRX’s cost basis was $0 in the assets. CRX is engaged in the research and development of advanced cannabinoid formulations and drug delivery systems with a focus on bioavailability and related pharmacokinetics and pharmacodynamics (PK/PD) enhancement. The Acquisition transaction was consummated on October 26, 2018. By acquiring CRX as a wholly-owned subsidiary, the Company acquired all of its assets, which consist primarily of three U.S. provisional patent applications relating to cannabinoid formulations to treat convulsive disorders, chronic traumatic encephalopathy, and neuropathic pain. At the closing, the Company issued to the six members of CRX (the “Sellers”) 1,100,000 shares not subject to any forfeiture restrictions and 9,900,000 shares which shall be released from forfeiture restrictions according to the following vesting schedule:

Any Seller who is not then providing services to the Company or any of its subsidiaries on any vesting date, whether through voluntary termination or termination “for cause,” will forfeit his unvested shares, which will be cancelled.

The transaction has been valued at $8,360,000, based on the fair value of the 11,000,000 shares issued of $0.76 per share, as per the closing market price of $1.25 per unit. Each unit consistedthe Company’s common stock on the date of tenthe agreement. The $836,000 fair value of the 1,100,000 shares issued not subject to any forfeiture restrictions was charged to operations during the six months ended December 31, 2018. The $7,524,000 fair value of Common Stock, one Class A Warrantthe 9,900,000 shares subject to purchase one shareforfeiture has been charged to stockholders’ equity as a contra equity account, and is being amortized over the vesting periods. The net amount charged to stockholder’s equity was $0 on the date of Common Stockthe acquisition. As at $0.25 per share, one Class B Warrant to purchase one share of Common Stock at $0.38 per shareDecember 31, 2020 and one Class C Warrant to purchase one share of Common Stock at $0.50 per share. As of June 30, 2017, 778,400 units had2020, an aggregate $5,095,286 and $3,787,237, respectively, has been sold,charged to operations for total gross proceedsthe value of $973,000, including 387,200 units which were subscribed but for which funds had not been received. The 3,872,000vested shares underlying the subscribed units in the amount of $484,000 were included as issued and outstanding shares at June 30, 2017,the amortization of the unvested CRX shares. For the three months ended December 31, 2020 and the related $484,000 subscription receivable was recorded as a component of stockholders’ equity on the June 30, 2017 consolidated balance sheet. Subsequent2019, $521,051 and $625,513, respectively, has been charged to June 30, 2017, the Company received proceeds of $484,000operations for the subscribed shares. In July and August amortization of unvested CRX shares during each of the periods.

NEXIEN BIOPHARMA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Unaudited

Note 6 – Stockholders’ Equity (continued)

2017 BioPharma sold an additional 338,000 units (3,380,000 shares) for gross proceeds of $422,500.Stock Incentive Plan

On August 10, 2017, BioPharmathe Company adopted the “2017 Stock Incentive Plan” and granted an aggregate of 6,400,000 shares of BioPharma Common Stock to five officers and directors of the Company, valued at $800,000 ($0.125 per share). One-thirdIn March 2018, 1,166,667 unvested shares (valued at $145,833) previously issued to the Company’s former Chief Executive Officer were canceled. On July 25, 2018, the Company accelerated the vesting of each grant vested as1,083,342 unvested shares of the initial date of grant (August 10, 2017),Common Stock previously granted to its former Chief Executive Officer and 8-1/3% upon the end of each calendar quarter beginning December 31, 2017.Chief Financial Officer. As of December 31, 2017, 3,733,341 of theJune 30, 2020, all 5,233,333 shares issued (valued at $466,667) are subject to forfeiture until vesting occurs.

On August 25, 2017, BioPharma entered into consulting agreements with two unrelated individuals for (i) developing and maintaining social media portals and (ii) identifying and developing potential strategic partners for the Company’s various drug development activities. The agreements are each for a three month term, payable monthly in shares$654,167) have been vested, of the Company’s common stock, valued at $0.125 per share, of an aggregate 304,800 shares and 138,000 shares, respectively. As of December 31, 2017, an aggregate 442,800which 150,000 shares, valued at $55,350, have been issued$18,750, were vested during the year ended June 30, 2020.

2018 Equity Incentive Plan

(i) On March 30, 2018, the Company’s board of directors approved and recommended for adoption by the stockholders of the Company a 2018 Equity Incentive Plan and has reserved 8,000,000 shares of Common Stock for issuance under the terms of that Plan.

In July 2018, the Board of Directors granted options to purchase a total of 1,810,000 shares of Common Stock, exercisable for a period of seven years, to officers/directors/consultants of the Company at an exercise price of $0.54 per share.

In August 2018, the Board of Directors granted options to purchase a total of 150,000 shares of Common Stock, exercisable for a period of seven years, to two individuals, for services rendered pursuant to(i) a director and (ii) a consultant of the consulting agreements.

On September 1, 2017, BioPharma commenced a private placement saleCompany, at an exercise price of its common stock at $0.25$0.38 per share. The Company sold 100,000 shares for gross proceeds of $25,000, before offering costs of $4,916.

Warrants

The relative fair value of the warrants attached to the common stock issued in the May 2017 private placement of units waseach option grant is estimated aton the date of grant using the Black-SholesBlack-Scholes option pricing model. The relative fair value attached tomodel with the common stock component is $1,139,573 andfollowing weighted-average assumptions used for grants under the relativefixed option plan:

The fair value of the warrantsoptions granted at June 30, 2020 is $255,927$867,715, including $33,307 for the fair value of options vested in 2020. All options granted have been fully vested as of June 30, 2020.

(ii) On October 17, 2018, the Board of Directors granted options to purchase an aggregate 800,000 shares of Common Stock, exercisable for a period of seven years, to officers/directors of the Company at an exercise price of $0.655 per share and confirmed a grant of options made as of October 1, 2018, to purchase 500,000 shares of Common Stock, exercisable for a period of seven years, to an officer and director of the Company at an exercise price $0.48. All of the options were fully vested as of the date of grant.

The fair value of each option grant date.is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions used for grants under the fixed option plan:

The fair value of the fully vested options granted of $803,997 was charged to operations during the year ended June 30, 2019.

NEXIEN BIOPHARMA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Unaudited

Note 6 – Stockholders’ Equity (continued)

(iii) On August 19, 2020, the Board of Directors authorized the issuance of an aggregate 5,000,000 options to three officers of the Company, exercisable at $0.08 per share for a seven-year period from the date of grant. As of the date of grant, 3,333,334 options were fully vested and the balance of 1,666,666 options will vest quarterly over the next four calendar quarters beginning September 30, 2020.

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions used for grants under the fixed option plan:

The fair value of the vested options granted of $282,116 was charged to operations during the six months ended December 31, 2020.

A summary of option activity during the six months ended December 31, 2020 is presented below:

Warrants

On November 24, 2020, the Company issued warrants for the acquisition of common shares as partial consideration for the issuance of convertible notes (Note 7(b)).

The following table summarizes information about warrants outstanding at December 31, 2017:2020:

The fair value of the warrants granted is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions used for grants under the fixed option plan:

The relative fair value of the warrants granted of $252,104 was charged to operations at the date of grant.

NEXIEN BIOPHARMA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Unaudited

Note 7 – Convertible Notes Payable

(a) On June 11, 2020, the Company entered into a financing arrangement with its CEO under which he agreed to lend the Company up to $25,000. The note bears interest at 5% per annum and is due upon demand. At the option of the lender, the unpaid principal and interest may be converted, in whole or in part, into shares of the Company’s common stock at the lesser of (i) $0.014, being the closing price of the Company’s common stock as of the date of the note, or (ii) the volume-weighted average price (VWAP) of the Company’s common stock over the ten trading days immediately preceding the Company’s receipt of Notice of Conversion from the lender. As the market price of the Company’s common stock and the VWAP were the same as of the date of the note, no discount for beneficial conversion feature has been recorded. As of June 30, 2020, the lender had advanced $12,000 under the arrangement; and accrued interest of $33 is included in accounts payable and accrued expenses at June 30, 2020. On July 10, 2020, the Company’s CEO loaned the Company an additional $13,000 pursuant to the financing arrangement. On August 12, 2020, the CEO sent notice to the Company that he was electing to convert the outstanding principal of $25,000 and accrued interest of $161 to 1,797,192 shares of common stock at the contractual conversion price of $0.014 per share. No gain or loss was recognized on conversion as the conversion was made under the terms of the note agreement.

(b) On November 24, 2020, the Company entered into financing agreements with two individuals, its CEO and a shareholder. Under the agreements, the Company issued unsecured convertible promissory notes due in three years (November 24, 2023) with accrued interest at the rate of 8% per annum, compounded annually. The notes and accrued interest are convertible at the option of the holders at any time into restricted shares of the Company’s common stock at a price of $0.037631, being the volume-weighted average price of the common stock over the 10 trading days immediately preceding the date the notes were funded. The CEO was issued a note in the principal amount of $40,000, which included a $15,000 advance made in October 2020 and an additional loan of $25,000. A stockholder of the Company loaned $25,000 on these terms. Both lenders were also issued three types of warrants, exercisable for a five-year period, at prices of $0.040265, $0.043276, and $0.045157, to purchase a total of 5,181,897 shares (Note 6).

The Company has recorded the conversion feature as a Beneficial Conversion Feature. The fair value of $38,638 for the expense portion of the notes is being amortized over the term of the notes. This fair value has been determined based on the current trading prices of the Company’s common stock. Management has determined that this treatment is appropriate given the uncertain nature of the value of the Company and its stock, and there will be no revaluations until the note is paid or redeemed for stock. During the quarterthree months ended December 31, 2017, warrants were exercised as follows:2020, $1,306 was charged to operations for amortization during the period of the Beneficial Conversion Feature.

Note 5 –Related8 – Related Party Transactions

BioPharma was formed as a subsidiary of IntivaKanativa USA, which is a subsidiary of INTIVAKanativa Inc., Kanativa USA was issued 24,000,000 shares of BioPharma’s common stock as consideration for its contribution of 100% of the ownership of NexN, and costs and expenses incurred on behalf of BioPharma and NexN in the amount of $201,228. Included in the consideration for the issuance of the common stock is $172,915 of capitalized license agreement costs comprised of (i) the value of Kanativa Inc. common stock issued to Kotzker Consulting of $78,875 and (ii) payments to Kotzker Consulting and legal costs in the aggregate of $94,040 (See Note 5).

At June 30, 2017, BioPharma was owed $141,329 from InitvaKanativa USA for advances made by BioPharma on behalf of IntivaKanativa USA in conjunction with the Share Exchange Agreement (See Note 3)4). During the six months ended December 31, 2017, $26,662As of June 30, 2020, an aggregate $50,662 was repaid by Intiva USA.Kanativa USA, including $15,000 and $9,000 during the years ended June 30, 2019 and June 30, 2020, respectively. The remaining balance of $90,667 was due from Intivaon March 1, 2020. On May 1, 2020, BioPharma and Kanativa USA entered into an agreement extending the due date for payment of the remaining balance to June 30, 2020. Effective June 30, 2020, Kanativa USA determined that it would be unable to pay the remaining balance of the advance. Accordingly, the Company wrote-off the remaining balance of $90,667 as a charge to operations during the period ended June 30, 2020.

NEXIEN BIOPHARMA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Unaudited

Note 8 – Related Party Transactions (continued)

On August 10, 2017, the Company granted an aggregate of 6,400,000 shares of Common Stock to five officers and directors of the Company, valued at $800,000 ($0.125 per share), under the Company’s 2017 Stock Incentive Plan. One-third of each grant vested as of the initial date of grant (August 10, 2017), and 8-1/3% upon the end of each calendar quarter beginning December 31, 20172017. In March 2018, the Company cancelled 1,166,667 unvested shares previously issued to its former CEO. As of $114,667 is classified as a current asset onJune 30, 2020, all granted shares, valued at $654,167, were fully vested.

In February 2018, the accompanying December 31, 2017 consolidated balance sheet.Company entered into an exclusive license agreement with Accu-Break whose President was an affiliate of the Company at the time of the agreement (See Note 5).

The members of the Company’s Chairman,Board of Directors, its Chief Executive Officer,Office and its Chief Financial Officer are also directors and officers and/or directors of INTIVAKanativa Inc., and other subsidiaries and affiliated entities of INTIVAKanativa Inc.

In June and November 2020, the Company issued convertible notes payable with its Chief Executive Officer and a shareholder of the Company (See Note 7).

Note 6 – Subsequent Events9- Commitments and Contingencies

In January 2018,BioPharma received proceeds fromAt December 31, 2020, there were no legal proceedings against the exercise of warrants issued as follows:Company.

Note 10 – Subsequent Event

On February 3, 2021, the Company entered into an agreement with an investor relations firm to provide services for shareholder information and relations.  The agreement is for an initial one-year period.   Under the terms of the agreement, the Company shall pay a retainer of $2,500 per month for the first three months and $10,000 per month thereafter. The agreement may be terminated by the Company after the initial three months, at which time the Company would be obligated to pay an additional one month’s retainer.

The Company has analyzed its operations subsequent to December 31, 2020 through the date these financial statements were issued, and has determined that it does not have any other additional material subsequent events to disclose.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION

Forward-Looking Statements

The following plan of operation provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with our financial statements and notes thereto. This section includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Certain statements that the Company may make from time to time, including all statements contained in this registration statementreport that are not statements of historical fact, constitute “forward-looking statements”. Forward-looking statements may be identified by words such as “plans,” “expects,” “believes,” “anticipates,” “estimates,” “projects,” “will,” “should,” and other words of similar meaning used in conjunction with, among other things, discussions of future operations, financial performance, product development and new product launches, market position and expenditures. You should not place undue certainty on these forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our predictions.

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help you understand our historical results of operations during the periods presented and our financial condition for the three and six months ended December 31, 2017.2020 and 2019. This MD&A should be read in conjunction with our audited financial statements as of June 30, 2017 (audited). See section entitled “Forward-Looking Statements” above.2020 and 2019.

Overview

We are engaged in pursuing pre-clinical and drug development activities for certain pharmaceutical formulations that include cannabinoids. We have filed three provisional patent applications, and acquired a start-up company with no revenues from operations. Notwithstanding our successful raiselicense covering certain intellectual property related to a drug delivery system. In October 2018, we acquired all of $1,514,000the membership interest in equity capital duringCRx Bio Holdings LLC, which also engaged in the period from April 2017 to September 2017, there is substantial doubt that we can continue as an on-going business for the next twelve months without the success of our business operations. We do not anticipate that BioPharma will generate revenues from its research and development activatesof advanced cannabinoid formulations and drug delivery systems, by issuing 11,000,000 shares of our common stock. As part of the CRx acquisition, we also acquired three additional patent applications. CRx had an agreement with a major university to perform pre-clinical research related to its drug development projectsthe parenteral administration of cannabinoid formulations. As this research was common to both the CRx programs and the Nexien programs, we consolidated this research for the near future.purposes of the Nexien capital expenditure budget.

As a relatively new business engaged in start-up operations and activities, we will require substantial additional funding to successfully complete any of our drug development projects.programs. At present, we cannot estimate the substantial capital requirements needed to secure regulatory approvals for our drug candidates. Nevertheless, weWe estimate that we will need to raise at a minimum $1 million during$60,000 just to maintain our existence as a public company for the remainder of the current calendar year.

We are a start-up company with no revenues from operations. Notwithstanding our successful raise of $2,076,158, net of offering costs, in equity capital since inception to December 31, 2020, there is substantial doubt that we can continue as an on-going business for the next 12twelve months to commence our drug development projects.without a significant infusion of capital or entering into a business combination transaction. We also must fund the estimated $100,000 in operating costs related to being a public company. Failure to obtain this necessary capital at acceptable terms, if at all, when needed, may force us to delay, limit, or terminate our drug development efforts to secure regulatory approvals and would adversely impact our planneddo not anticipate that Nexien BioPharma will generate revenues from its research and development effortsactivities related to its drug development projects in connectionthe near future, due to the protracted revenue model of pursuing pharmaceutical drug development in accordance with the pathway set forth by the FDA. The Company has had to cease research and development activities due to the lack of sufficient working capital. While management continues its efforts to raise capital for the Company, it is also seeking merger or other business combination or restructuring opportunities.

Results of Operations for the three months ended December 31, 2020 as compared to December 31, 2019

Net loss for the three months ended December 31, 2020 was $828,031, an increase of $131,757 from the net loss of $696,274 for the three months ended December 31, 2019.

General and administrative costs for the three months ended December 31, 2020 include a non-cash charge of $521,051 for the fair value of the shares issued for the acquisition of CRX Bio Holdings LLC, as well as non-cash stock-based compensation costs for the period of $33,972 for the fair value of options granted and $252,104 for the fair value of warrants issued in conjunction with convertible debt financing during the 2020 period. In comparison, general and administrative costs of $687,209 incurred during the three months ended December 31, 2019 includes a non-cash charge of $625,513 for the fair value of the shares issued for the acquisition of CRX Bio Holdings LLC, as well as non-cash stock-based compensation costs for the period of $15,539. General and administrative expenses, exclusive of non-cash stock-based compensation costs, were consistent during the 2020 and 2019 periods, consisting predominately of costs and expenses associated the Company’s future drugs, which may make it more difficultmaintaining its public company status.

During the three months ended December 31, 2020, the Company incurred $1,833 for usinterest and amortization of discount related to attain profitability.the convertible debt financings.

There were no research and development costs for the periods ended December 31, 2020 and 2019.

Professional fees of $7,400 for the three months ended December 31, 2020 decreased by $1,665 from $9,065 for the period ended December 31, 2019. Fees for the 2020 and 2019 periods consisted of legal fees for securities related matters and fees for auditor quarterly review and other required tax and regulatory filings.

Results of Operations for the three and six months ended December 31, 20172020 as compared to December 31, 2019

Net loss for the six months ended December 31, 20172020 was $754,338,$1,889,451, an increase of $303,264$451,275 from the net loss of $451,074 for the three months ended September 30, 2017.

During the three months and six months ended December 31, 2017, the Company’s efforts were focused on equity private placement financing activities, consummation of the Share Exchange Transaction, filings with the U.S. Patent Office and FDA, and initial research and development activities on its products. Professional fees of $185,378$1,438,176 for the six months ended December 31, 2017consisted2019.

General and administrative costs for the six months ended December 31, 2020 include a non-cash charge of legal$1,308,049 for the fair value of the shares issued for the acquisition of CRX Bio Holdings LLC, as well as non-cash stock-based compensation costs for the period of $282,116 for the fair value of options granted and $252,104 for the fair value of warrants issued in conjunction with convertible debt financing during the 2020 period. In comparison, general and administrative costs of $1,370,175 incurred during the six months ended December 31, 2019 includes a non-cash charge of $1,204,459 for the fair value of the shares issued for the acquisition of CRX Bio Holdings LLC, as well as non-cash stock-based compensation costs for the period of $52,137. General and administrative expenses, exclusive of non-cash stock-based compensation costs, were consistent during the 2020 and 2019 periods, consisting predominately of costs and expenses associated the Company’s maintaining its public company status.

During the six months ended December 31, 2020, the Company incurred $1,961 for interest and amortization of discount related to the convertible debt financings.

During the six months ended December 31, 2020, the Board of Directors granted options to purchase a total of 5,000,000 shares of common stock to officers of the Company, exercisable for a period of seven years at an exercise price of $0.08 per share.

Professional fees to external counselsof $22,990 for the six months ended December 31, 2020 decreased by $10,101 from $33,001 for the six months ended December 31, 2019. Fees for both the 2020 and our chief operating officer for patent and FDA related matters,2019 periods consisted of legal fees for securities related matters and filings as the Company completed the Share Exchange transaction, audit fees for the period ended June 30, 2017annual audit and other required regulatory filings.

GeneralThere were no research and administrativedevelopment costs duringfor the quarter ended September 30, 2017consisted primarily of internal travel and promotion costs related to our financing activities. During the quarterperiods ended December 31, 2017, general2020 and administrative costs increased by approximately $75,000, as the Company migrated from a private to public entity, incurring transfer agent and other external costs associated with the transition.2019.

Research and development costs of $89,845for

During the six months ended December 31, 2017 include $75,000 paidunder an agreement2019, the Company paid $35,000 in shares of our Common Stock with respect to a contract manufacturer with significant expertise in pre-clinicalproprietary delivery system for cannabinoid-based medications.

Liquidity and clinical trial development and regulatory approvals to develop an injectable formulation for our drug candidate (see “Contractual Obligations and Commitments” below). During the three months endedCapital Resources

At December 31, 2017,2020, we had a working capital of $51,420 and cash of $48,134, as compared to a working capital deficit of $6,365 and cash of $10,786 at June 30, 2020. The increase in both working capital and cash was due primarily to funds received from the Company incurredCompany’s issuance of convertible notes. We used $40,652 of cash for operating activities, and had an additional $9,500 for on-going research and development activities to an outside firm.

On August 10, 2017,increase in liquidity from financing of $78,000 from issuances of convertible debt during the Company granted an aggregate of 6,400,000 shares of BioPharma Common Stock to five officers and directors of the Company, subject to forfeiture restrictions. Restrictions lapsed as to one-third of each grant as of the initial date of grant, and restrictions as to one-twelfth of each grant will lapse quarterly for a two-year period commencing on the last day of each calendar quarter beginning on October 1, 2017. Stock based compensation for the three and six months ended December 31, 2017 includes$66,667and $333,333, respectively, as2020.

The unsecured convertible promissory notes are due in three years (November 24, 2023) and accrue interest at the valuerate of 8% per annum, compounded annually. The notes and accrued interest are convertible at the option of the holders at any time into restricted shares vested underof the grant and $36,900 and $55,350, respectively, forCompany’s common stock at a price of $0.037631, being the volume-weighted average price of the common stock over the 10 trading days immediately preceding the date the Note was funded. The CEO was issued a note in the principal amount of $40,000, which included a $15,000 advance made in October 2020 and an additional loan of $25,000. A stockholder of the Company loaned $25,000 on these terms. Both lenders were also issued three types of warrants, exercisable for a five-year period, at prices of $0.040265, $0.043276, and $0.045157, to two individuals under consulting agreements.

Liquidity and Capital Resourcespurchase a total of 5,181,897 shares.

While management of the Company believes that the Company will be successful in its current and planned activities, there can be no assurance that the Company will be successful in its drug development activities, and raise sufficient equity, debt capital or strategic relationships to sustain the operations of the Company.

Our ability to create sufficient working capital to sustain us over the next twelve-month period, and beyond, is dependent on our raising additional equity or debt capital, or entering into strategic arrangementarrangements with aone or more third party.parties.

There can be no assurance that sufficient capital will be available to us. We currently have no agreements, arrangements or understandings with any person to obtain funds through bank loans, lines of credit or any other sources.

Availability of Additional Capital

Notwithstanding our success in raising gross proceeds of $1,514,000$2.1 million from the private sale of equity securities through December 31, 2017, $90,320 from the exercise of common stock warrants during the quarter ended December 31, 2017 and $214,572 from the exercise of additional common stock warrants in January 2018, and our expectation that we will be successful in raising up to an additional $1million during the next twelve months,2020, there can be no assurance that we will continue to be successful in raising equity capital and have adequate capital resources to fund our operations or that any additional funds will be available to us on favorable terms or in amounts required by us. IfWe estimate that we determine that it is necessarywill need to raise additional funds, we may chooseat a minimum $60,000 just to do so through public or private equity or debt financing, a bank line of credit, or other arrangements. If we are unable to obtain adequate capital resources to fund operations, we may be required to delay, scale back or eliminate some or all ofmaintain our plan of operations, which may have a material adverse effect on our business, results of operations and ability to operateexistence as a going concern.public company for the remainder of the current calendar year.

Any additional equity financing may be dilutive to our stockholders, new equity securities may have rights, preferences or privileges senior to those of existing holders of our shares of common stock.Common Stock. Debt or equity financing may subject us to restrictive covenants and significant interest costs.

Capital Expenditure Plan During the Next Twelve Months

To date, we raised approximately $1.8$2.1 million, in equity capital (including exercised warrants) and we may be expected to require up to an additional $1 milliona minimum of $60,000 in capital during the next 12 monthsremainder of the current calendar year to fully implementcontinue our business plan and fund our operations. Our plan is to utilize the capital that we raise, together with anticipated cash flow from operations, to fundexistence as a very significant investment in sales and marketing, concentrated principally on online advertising and incentivizing existing customers for the introduction of new customers, among other strategies. However, therepublic company. There can be no assurance that: (i)that we will continue to be successful in raising capital in sufficient amounts and/or at terms and conditions satisfactory to the Company; or (ii) we will generate any revenues from operations to fulfill our plan of operations.Company. Our revenues are expected to come from our drug development projects. As a result, we will continue to incur operating losses unless and until we have obtained regulatory approval with respect to one of our drug development projects and commence to generate sufficient cash flow to meet our operating expenses and fund our planned sales and market efforts.expenses. There can be no assurance that we will obtain regulatory approval and the market will adopt our future drugs or that we will generate sufficient cash flow to fund our enhanced sales and marketing plan.drugs. In the event that we are not able to successfully: (i) raise equity capital and/or debt financing; or (ii) market our drugs after obtaining regulatory approval, our financial condition and results of operations will be materially and adversely affected and we will either have to delay or curtail our plan for funding our sales and marketing efforts.affected.

Going Concern Consideration

Our registered independent auditors have issued an opinion on our financial statements as of June 30, 20172020 which includes a statement describing our going concern status. This means that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills and meet our other financial obligations. This is because we have not generated any revenues and no revenues are anticipated until we begin marketing any drugs that we successfully develop. Accordingly, we must raise capital from sources other than the actual sale from any drugs that we develop. We must raise capital to continue our drug development activities and stay in business.

Off-Balance Sheet Arrangements

As ofAt December 31, 2020 and June 30, 2017 and December 31, 2017,2020, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K promulgated under the Securities Act of 1934.

Contractual Obligations and Commitments

As of June 30, 2017, we did not have any contractual obligations. On September 19, 2017, we entered into an agreement with a contract manufacturer with significant expertise in pre-clinical and clinical trial development and regulatory approvals to develop an injectable formulation for our drug candidate in the Kotzker Development Project with the objective of applying for FDA approval. It iswas anticipated that the drug candidate willwould be developed utilizing the new drug application 505(b)(2) regulatory pathway for use in the treatment during and immediately following exposure to organophosphorus nerve agents. The formulation of the drug candidate willwas to be based on one or more synthetic cannabinoids..cannabinoids. We paid $75,000 to the contract manufacturer upon signing the contract, which further providesprovided that we pay an additional $20,000 upon completion of the drug formulation and $20,000 upon completion of Phase 1 development. No payment schedule has yethad been agreed to upon completion of Phase 2 and Phase 3 development stage and the contract may be terminated by either party. In December 2020, we elected to terminate this agreement and issued 150,000 restricted shares of our common stock as a final payment for consulting fees owed.

On February 28, 2018, we obtained a worldwide exclusive license with respect to a proprietary delivery system for cannabinoid-based medications. Upon execution of the agreement, as amended September 18, 2018, $35,000 was paid to the licensor. An additional $10,000 was paid on November 1, 2018, $20,000 was paid on February 28, 2019 and a final payment, in cash or stock at the option of the Company, of $35,000, due August 31, 2019, was paid in shares of our common stock. We are required to pay milestone payments upon obtaining regulatory approval of pharmaceutical licensed products and royalties based upon sales of licensed products. We may grant sublicenses under the terms of the agreement.

Critical Accounting Policies

Our significant accounting policies are described in the notes to our financial statements as of December 31, 20172020 and are included elsewhere in this report.

Plan of Operation

Our plan of operation now relates to our newly acquired subsidiary BioPharma. For a complete discussion of our plan of operation, see the Form 8-K filing announcing the acquisition filed October 16, 2017.

Accounting for a Business Combination

As a result of the closing of the share exchange agreement with BioPharma, the transaction will be accounted for as a reverse acquisition with us being the surviving registrant. As a result of any reverse acquisition, if the acquired entity’s stockholders will exercise control over us, the transaction will be deemed to be a capital transaction where we are treated as a non-business entity. Therefore, the accounting for the transaction is identical to that resulting from a reverse merger, except no goodwill or other intangible assets will be recorded. For accounting purposes, the acquired entity will be treated as the accounting acquirer and, accordingly, will be presented as the continuing entity.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures.

As of December 31, 2017,2020, the Company’s chief executive officer and chief financial officer conducted an evaluation regarding the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Exchange Act. Based upon the evaluation of these controls and procedures as provided under the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013), our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were ineffective as of the end of the period covered by this report.

Changes in internal controls.

During the quarterly period covered by this report, no changes occurred in our internal control over financial reporting that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 1A. RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Risk Factors in our Form 8-K10-K as filed with the SEC on October 16, 2017,September 28, 2020, which could materially affect our business, financial condition or future results. The risks described in our Form 8-K10-K are not the only risks facing our company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

During the quarter ended December 31, 20172020 we issued and sold the unregistered securities set forth in the table below.

We relied upon the exemption from registration contained in Rule 506(b) of Regulation DSection 4(a)(2) under the Securities Act, as the securities were sold only to accredited investors, sophisticated as to the business of the Company, without the use of general solicitation or advertising. No underwriters or placement agents were used and no commissions were paid in the above stock transactions. Restrictive legends wereA restrictive legend was placed on the certificates evidencing the securities issued in all of the above transactions.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSUREDISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.