UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
☒ QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended SeptemberJune 30, 2017
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File No. 000-17119
QUANTRX BIOMEDICAL CORPORATION |
(Exact Name of Registrant as Specified in Its Charter)
Nevada | 33-0202574 | |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification Number) |
10190 SW 90th Avenue, Tualatin, Oregon |
(Address of Principal Executive Offices) (Zip Code) |
(212) 980-2235 |
(Registrant's Telephone Number, Including Area Code) |
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 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 [ ]
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X]☐ No [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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 Exchange Act). Yes [ ]☐ No [X]
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Exchange Act: Common Stock, par value $0.01 per share
The number of shares outstanding of the issuer’s common stock as of November 21, 2017August 16, 2021 was 78,696,461.
TABLE OF CONTENTS
PAGE | ||||
4 | ||||
4 | ||||
5 | ||||
6 | ||||
7 | ||||
Condensed Notes to (Unaudited) | 8 | |||
14 | ||||
17 | ||||
18 | ||||
18 | ||||
18 | ||||
18 | ||||
18 | ||||
18 | ||||
19 | ||||
20 |
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
THIS QUARTERLY REPORT ON FORM 10-Q, INCLUDING EXHIBITS HERETO, CONTAIN FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933, AS AMENDED, AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. THESE FORWARD-LOOKING STATEMENTS ARE TYPICALLY IDENTIFIED BY THE WORDS “ANTICIPATES,” “BELIEVES,” “EXPECTS,” “INTENDS,” “FORECASTS,” “PLANS,” “ESTIMATES,” “MAY,” “FUTURE,” “STRATEGY,” OR WORDS OF SIMILAR MEANING. VARIOUS FACTORS COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED IN THE FORWARD-LOOKING STATEMENTS;STATEMENTS, INCLUDING THOSE DESCRIBED IN “RISK FACTORS” IN OUR ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2016.2020. WE ASSUME NO OBLIGATIONS TO UPDATE THESE FORWARD-LOOKING STATEMENTS TO REFLECT NEW INFORMATION, ACTUAL RESULTS, CHANGES IN ASSUMPTIONS, OR CHANGES IN OTHER FACTORS, EXCEPT AS REQUIRED BY LAW.
QUANTRX BIOMEDICAL CORPORATION
BALANCE SHEETS
September 30, | December 31, | |
2017 | 2016 | |
(Unaudited) | ||
ASSETS | ||
Current Assets: | ||
Cash and cash equivalents | $8,914 | $691 |
Prepaid expenses | - | 28,094 |
Total Current Assets | 8,914 | 28,785 |
Investments, net of impairment of $30,051 | 169,948 | 169,948 |
Intangible assets, net | 11,193 | 13,874 |
Total Assets | $190,055 | $212,607 |
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||
Current Liabilities: | ||
Accounts payable | $170,613 | $160,671 |
Accrued expenses | - | 36,342 |
Shareholder loans | - | 36,000 |
Notes payable and accrued interest | 1,784,187 | 1,059,784 |
Notes payable, related party and accrued interest | 117,801 | 558,287 |
Current portion of LT notes payable | 3,568 | 2,461 |
Total Current Liabilities | 2,076,169 | 1,853,545 |
Notes payable, long-term | 35,117 | 37,561 |
Total Liabilities | 2,111,286 | 1,891,106 |
Commitments and Contingencies | - | - |
Stockholders’ Equity (Deficit): | ||
Preferred stock; $0.01 par value, 25,000,000 authorized shares; 20,500,000 shares designated as Series B Convertible Preferred Stock; Series B Convertible Preferred shares 16,676,942 issued and outstanding | 166,769 | 166,769 |
Common Stock; $0.01 par value; 150,000,000 authorized; 78,696,461 shares issued and outstanding | 786,964 | 786,964 |
Additional paid-in capital | 48,739,606 | 48,740,389 |
Stock to be issued | 8,600 | - |
Accumulated deficit | (51,623,170) | (51,372,621) |
Total Stockholders’ Equity (Deficit) | (1,921,231) | (1,678,499) |
Total Liabilities and Stockholders’ Equity (Deficit) | $190,055 | $212,607 |
|
| June 30, |
|
| December 31, |
| ||
|
| 2021 |
|
| 2020 |
| ||
ASSETS |
| (Unaudited) |
|
| (Audited) |
| ||
Current Assets: |
|
|
|
|
|
| ||
Cash and cash equivalents |
| $ | 27,756 |
|
| $ | 55,428 |
|
Total Current Assets |
|
| 27,756 |
|
|
| 55,428 |
|
|
|
|
|
|
|
|
|
|
Investments, net of impairment of $500,000 |
|
| 0 |
|
|
| 0 |
|
Total Assets |
| $ | 27,756 |
|
| $ | 55,428 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) |
|
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
| $ | 16,919 |
|
| $ | 16,312 |
|
Notes Payable |
|
| 1,387,694 |
|
|
| 1,387,694 |
|
Accrued interest on notes payable |
|
| 966,379 |
|
|
| 866,226 |
|
Notes Payable, related party and accrued interest |
|
| 173,807 |
|
|
| 166,251 |
|
Total Liabilities |
|
| 2,544,799 |
|
|
| 2,436,483 |
|
|
|
|
|
|
|
|
|
|
Commitments and Contingencies |
|
| 0 |
|
|
| 0 |
|
|
|
|
|
|
|
|
|
|
Stockholders’ Equity (Deficit): |
|
|
|
|
|
|
|
|
Preferred stock; $0.01 par value, 25,000,000 authorized shares; 20,500,000 shares designated as Series B Convertible Preferred Stock; Series B Convertible Preferred shares 6,196,893 issued and outstanding |
|
| 61,969 |
|
|
| 61,969 |
|
Common stock; $0.01 par value; 150,000,000 authorized; 78,696,461 shares issued and outstanding |
|
| 786,964 |
|
|
| 786,964 |
|
Stock to be issued |
|
| 8,600 |
|
|
| 8,600 |
|
Additional paid-in capital |
|
| 48,876,398 |
|
|
| 48,876,398 |
|
Accumulated deficit |
|
| (52,250,974 | ) |
|
| (52,114,986 | ) |
Total Stockholders’ Equity (Deficit) |
|
| (2,517,043 | ) |
|
| (2,381,055 | ) |
|
|
|
|
|
|
|
|
|
Total Liabilities and Stockholders’ Equity (Deficit) |
| $ | 27,756 |
|
| $ | 55,428 |
|
The accompanying condensed notes are an integral part of these consolidated financial statements.
STATEMENTS OF OPERATIONS
(unaudited)
Three Months Ended September 30, | Nine Months Ended September 30, | |||
2017 | 2016 | 2017 | 2016 | |
Operating Expenses: | ||||
Sales, general and administrative | $16,747 | $13,319 | $57,055 | $53,049 |
Professional fees | 15,106 | 12,422 | 44,543 | 47,977 |
Amortization | 894 | 893 | 2,682 | 5,181 |
Depreciation | - | 274 | - | 822 |
Total Costs and Operating Expenses | 32,747 | 26,908 | 104,280 | 107,029 |
Loss from Operations | (32,747) | (26,908) | (104,280) | (107,029) |
Other Income (Expense): | ||||
Interest expense | (38,252) | (55,738) | (150,951) | (157,716) |
Gain/(loss) on impairment | - | (50,000) | - | (50,000) |
Discount on notes payable | (7,818) | - | (7,818) | - |
Gain/(loss) on disposition | 12,500 | - | 12,500 | 540 |
Gain/(loss) on settlement of interest for common stock | 16,503 | - | 16,503 | |
Total Other Income (Expense), net | (33,570) | (89,235) | (146,269) | 190,673 |
Loss Before Taxes | (66,317) | (116,143) | (250,549) | (297,702) |
Provision for Income Taxes | - | - | - | - |
Net Loss | $(33,317) | $(116,143) | $(250,549) | $(297,702) |
Basic and Diluted Net Loss per Common Share | $(0.00) | (0.00) | $(0.00) | $(0.00) |
Basic and Diluted Weighted Average Shares Used in per Share Calculation | $78,696,461 | 78,696,461 | 78,696,461 | 72,747,432 |
|
| For the Three Months Ended |
|
| For the Six Months Ended |
| ||||||||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
| ||||
Costs and Operating Expense: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Sales, general and administrative |
| $ | 3,100 |
|
| $ | 2,989 |
|
| $ | 6,647 |
|
| $ | 6,889 |
|
Professional fees |
|
| 20,131 |
|
|
| 22,451 |
|
|
| 21,631 |
|
|
| 23,451 |
|
Professional fees, related party |
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 10,500 |
|
Total Costs and Operating Expenses |
|
| 23,231 |
|
|
| 25,440 |
|
|
| 28,278 |
|
|
| 40,840 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS FROM OPERATIONS: |
|
| (23,231 | ) |
|
| (25,440 | ) |
|
| (28,278 | ) |
|
| (40,840 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income (Expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Expense |
|
| (53,759 | ) |
|
| (53,891 | ) |
|
| (107,710 | ) |
|
| (107,773 | ) |
Gain (loss) on forgiveness of accounts payable |
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 24,610 |
|
Total Other Income (Expense), net |
|
| (53,759 | ) |
|
| (53,891 | ) |
|
| (107,710 | ) |
|
| (83,163 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (Loss) Before Taxes |
|
| (76,990 | ) |
|
| (79,331 | ) |
|
| (135,988 | ) |
|
| (124,003 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for Income Taxes |
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Profit (Loss) |
| $ | (76,990 | ) |
| $ | (79,331 | ) |
| $ | (135,988 | ) |
| $ | (124,003 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted Net Loss per Common Share |
| $ | (0.00 | ) |
| $ | (0.00 | ) |
| $ | (0.00 | ) |
| $ | (0.00 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted Weighted Average Shares Used in per Share Calculation |
|
| 78,696,461 |
|
|
| 78,696,461 |
|
|
| 78,696,461 |
|
|
| 78,696,461 |
|
The accompanying condensed notes are an integral part of these interim consolidated financial statements.
STATEMENTS OF CASHFLOWS
(unaudited)
Nine Months Ended | ||
September 30, 2017 | September 30, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $(250,549) | $(297,702) |
Adjustments to reconcile net loss to net cash used by operating activities: | ||
Depreciation and amortization | 2,681 | 6,003 |
Non-cash discount on notes payable | 7,818 | - |
(Gain)/loss on disposition | (12,500) | - |
Loss on Impairment | - | 50,000 |
(Gain)/loss on issuance of common stock for settlement of interest payable | - | (16,503) |
(Increase) Decrease in: | ||
Prepaid expenses | 28,094 | 26,396 |
Increase (decrease) in: | ||
Accounts payable | 9,943 | 31,056 |
Accrued interest and expenses | 124,073 | 132,790 |
Net Cash Used by Operating Activities | (90,440) | (67,960) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Net Cash Provided by Investing Activities | - | - |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Principal payments on long-term debt | (1,337) | (962) |
Proceeds from the issuance of shareholder loans | - | 15,000 |
Proceeds from the issuance of notes payable | 100,000 | - |
Net Cash Provided (used) by financing activities | 98,663 | 14,038 |
Net Increase (Decrease) in Cash and Cash Equivalents | 8,223 | (53,922) |
Cash and Cash Equivalents, Beginning of Period | 691 | 61,078 |
Cash and Cash Equivalents, End of Period | $8,914 | $7,156 |
Supplemental Cash Flow Disclosures: | ||
Interest expense paid in cash | $1,467 | $- |
Income tax paid | $- | $- |
|
| For the Six Months Ended |
| |||||
|
| June 30, |
| |||||
|
| 2021 |
|
| 2020 |
| ||
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
| ||
Net loss |
| $ | (135,988 | ) |
| $ | (124,003 | ) |
Adjustments to reconcile net loss to net cash used by operating activities: |
|
|
|
|
|
|
|
|
Loss (gain) on forgiveness of accounts payable |
|
| 0 |
|
|
| (24,610 | ) |
(Increase) Decrease in: |
|
|
|
|
|
|
|
|
Prepaid expense |
|
| 0 |
|
|
| 7,000 |
|
Increase (Decrease) in: |
|
|
|
|
|
|
|
|
Accounts Payable |
|
| 607 |
|
|
| (13,099 | ) |
Accrued interest |
|
| 107,709 |
|
|
| 107,773 |
|
Net Cash Used by Operating Activities |
|
| (27,672 | ) |
|
| (46,939 | ) |
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
|
|
|
Net Cash Provided by Investing Activities |
|
| 0 |
|
|
| 0 |
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
Net Cash Provided (Used) by Financing Activities |
|
| 0 |
|
|
| 0 |
|
|
|
|
|
|
|
|
|
|
Net Increase (Decrease) in Cash and Cash Equivalents |
|
| (27,672 | ) |
|
| (46,939 | ) |
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents, Beginning of Period |
|
| 55,428 |
|
|
| 130,351 |
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents, End of Period |
| $ | 27,756 |
|
| $ | 83,412 |
|
|
|
|
|
|
|
|
|
|
Supplemental Cash Flow Disclosures: |
|
|
|
|
|
|
|
|
Interest expense paid in cash |
| $ | 0 |
|
| $ | 0 |
|
Income tax paid |
| $ | 0 |
|
| $ | 0 |
|
The accompanying condensed notes are an integral part of these interim consolidated financial statements.
6 |
Table of Contents |
QUANTRX BIOMEDICAL CORPORATION
STATEMENTS OF STOCKHOLDERS’EQUITY
(unaudited)
|
| Preferred Stock |
|
| Common Stock |
|
| Additional |
|
|
|
|
|
|
|
|
|
| ||||||||||||||
|
|
|
|
| Amount |
| �� | Shares |
|
| Amount |
|
| Paid-in Capital |
|
| Stock to be Issued |
|
| Accumulated Deficit |
|
| Total |
| ||||||||
For the three months ended June 30, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
BALANCE, April 1, 2020 |
|
| 6,196,893 |
|
| $ | 61,969 |
|
|
| 78,696,461 |
|
| $ | 786,964 |
|
| $ | 48,876,398 |
|
| $ | 8,600 |
|
|
| (51,906,924 | ) |
|
| (2,172,993 | ) |
Net loss for the three months ended June 30, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (79,331 | ) |
|
| (79,331 | ) |
BALANCE, June 30, 2020 |
|
| 6,196,893 |
|
| $ | 61,969 |
|
|
| 78,696,461 |
|
| $ | 786,964 |
|
| $ | 48,876,398 |
|
| $ | 8,600 |
|
| $ | (51,986,255 | ) |
| $ | (2,252,324 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the six months ended June 30, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE, January 1, 2020 |
|
| 6,196,893 |
|
| $ | 61,969 |
|
|
| 78,696,461 |
|
| $ | 786,964 |
|
| $ | 48,876,398 |
|
| $ | 8,600 |
|
|
| (51,862,252 | ) |
|
| (2,128,321 | ) |
Net loss for the six months ended June 30, 2020 |
|
| - |
|
|
| 0 |
|
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| (124,003 | ) |
|
| (124,003 | ) |
BALANCE, June 30, 2020 |
|
| 6,196,893 |
|
| $ | 61,969 |
|
|
| 78,696,461 |
|
| $ | 786,964 |
|
| $ | 48,876,398 |
|
| $ | 8,600 |
|
| $ | (51,986,255 | ) |
| $ | (2,252,324 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended June 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE, April 1, 2021 |
|
| 6,196,893 |
|
| $ | 61,969 |
|
|
| 78,696,461 |
|
| $ | 786,964 |
|
| $ | 48,876,398 |
|
| $ | 8,600 |
|
|
| (52,173,984 | ) |
|
| (2,440,053 | ) |
Net loss for the three months ended June 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (76,990 | ) |
|
| (76,990 | ) |
BALANCE, June 30, 2021 |
|
| 6,196,893 |
|
| $ | 61,969 |
|
|
| 78,696,461 |
|
| $ | 786,964 |
|
| $ | 48,876,398 |
|
| $ | 8,600 |
|
| $ | (52,250,974 | ) |
| $ | (2,517,043 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the six months ended June 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE, January 1, 2021 |
|
| 6,196,893 |
|
| $ | 61,969 |
|
|
| 78,696,461 |
|
| $ | 786,964 |
|
| $ | 48,876,398 |
|
| $ | 8,600 |
|
|
| (52,114,986 | ) |
|
| (2,381,055 | ) |
Net loss for the six months ended June 30, 2021 |
|
| - |
|
|
| 0 |
|
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| (135,988 | ) |
|
| (135,988 | ) |
BALANCE, June 30, 2021 |
|
| 6,196,893 |
|
| $ | 61,969 |
|
|
| 78,696,461 |
|
| $ | 786,964 |
|
| $ | 48,876,398 |
|
| $ | 8,600 |
|
| $ | (52,250,974 | ) |
| $ | (2,517,043 | ) |
The accompanying condensed notes are an integral part of Contents
CONDENSEDNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
Overview
As used in this Quarterly Report on Form 10-Q, the terms “Company”, “we”, “our”, “us”, “QuantRx” or the “Company” refers to QuantRx Biomedical Corporation, unless context otherwise requires. QuantRx Biomedical Corporation was incorporated on December 5, 1986, in the State of Nevada. Our principal business office is located at 10190 SW 90th Avenue, Tualatin, Oregon 97123. When used in this Quarterly Report on Form 10-Q, the terms “
We have developed
and intend to commercialize ourThe continuation of our operations remains contingent onupon the receipt of additional financing required to execute our business and operating plan, which is currently focused on the commercialization of our over-the-counter PAD productstechnology either directly or through a joint venture or other relationship intended to increase shareholder value. In the interim, we have nominal operations, focused principally on maintaining our intellectual property portfolio and continuing to complymaintaining compliance with the public company reporting requirements. In order to continue as a going concern, we will need to raise capital, which may include through the issuance of debt and/or equity securities. No assurances can be given that we will be able to obtain additional financing under terms favorable to us, if at all, or otherwise successfully develop a business and operating plan or enter into an alternative relationship to commercialize our PAD technology.
Our principal business line consists of our over-the-counter business (the “
Our current focus is to obtain additional working capital necessary to continue as a going concern, and to develop a longer term financing and operating plan to: (i) leverage our broad-based intellectual property and patent portfolio to develop new and innovative diagnostic products; (ii) commercialize our OTC Business and Diagnostics Businessover-the-counter products either directly or through joint ventures, mergers or similar transactions intended to capitalize on potential commercial opportunities presented by each of the Businesses; (iii)opportunities; (ii) contract manufacturing of our over-the-counter products to third parties while maintaining control over the manufacturing process; (iii) maintain our intellectual property portfolio with respect to patents and licenses pertaining to both the OTC Business and the Diagnostics Business; and (iv) maximize the value of our investments in non-core assets. However, asAs a result of our current financial condition, however, our efforts in the short-term will be focused on obtaining financing necessary to continuemaintain the Company as a going concern.
We follow the accounting guidance outlined in the Financial Accounting Standards Board Codification guidelines. The accompanying unaudited interim consolidated financial statements have been prepared in accordance with generally accepted principles for interim financial information and with the items under Regulation S-X required by the instructions to Form 10-Q. They may not include all information and footnotes required by United States Generally Accepted Accounting Principles (“
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Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on previously reported losses, total assets or stockholders’ equity.
2. MANAGEMENT STATEMENT REGARDING GOING CONCERN
We currently isare not generating revenue from operations, and doesdo not anticipate generating meaningful revenue from operations or otherwise in the short-term. The Company hasWe have historically financed itsour operations primarily through issuances of equity and the proceeds from the issuance of promissory notes. In the past, the Companywe also provided for itsour cash needs by issuing Common Stock, options and warrants for certain operating costs, including consulting and professional fees, as well as divesting its minority equity interests and equity-linked investments.
Our history of operating losses, limited cash resources and the absence of an operating plan necessary to capitalize on the Company’sour assets raise substantial doubt about our ability to continue as a going concern absent a strengthening of our cash position. Management is currently pursuing various funding options, including seeking debt or equity financing, licensing opportunities and the sale of certain investment holdings, as well as a strategic, merger or other transaction to obtain additional funding to continue the development of, and to successfully commercialize, itsour products. There can be no assurance that the Company will be successful in its efforts. Should the Companywe be unable to obtain adequate financing or generate sufficient revenue in the future, the Company’s business, result of operations, liquidity and financial condition would be materially and adversely harmed, and the Companywe will be unable to continue as a going concern.
There can be no assurance that, assuming the Company iswe are able to strengthen its cash position, itwe will achieve sufficient revenue or profitable operations to continue as a going concern.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies of the Company is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to GAAP and have been consistently applied in the preparation of the financial statements.
Accounting for Share-Based Payments.
The Company follows the provisions of ASC Topic 718, which establishes the accounting for transactions in which an entity exchanges equity securities for services and requires companies to expense the estimated fair value of these awards over the requisite service period. The Company uses the Black-Scholes option pricing model in determining fair value. Accordingly, compensation cost has been recognized using the fair value method and expected term accrual requirements as prescribed. During the ninethree and six months ended SeptemberJune 30, 20172021 and 2016,2020, the Company had no stock compensation expense.
In the case of modifications, the Black-Scholes model is used to value modified warrants on the modification date by applying the revised assumptions. The difference between the fair value of the warrants prior to the modification and after the modification determines the incremental value. TheIn the past, the Company has modified warrants in connection with the issuance of certain notes and note extensions. These modified warrants were originally issued in connection with previous private placement investments. In the case of debt issuances, the warrants were accounted for as original issuance discount based on their relative fair values. When modified in connection with a note issuance, the Company recognizes the incremental value as a part of the debt discount calculation, using its relative fair value in accordance with ASC Topic 470-20, “
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The fair value of each share basedshare-based payment is estimated on the measurement date using the Black-Scholes model with the following assumptions, which are determined at the beginning of each year and utilized in all calculations for that year. During the ninethree and six months ended SeptemberJune 30, 20172021 and 2016,2020, the Company did not make any Black-Scholes model assumptions, as no share-based payments were made during those periods.
Risk-Free Interest Rate.
The interest rate used is based on the yield of a U.S. Treasury security as of the beginning of the year.Expected Volatility.
The Company calculates the expected volatility based on historical volatility of monthly stock prices over a three-year period.Dividend Yield.
The Company has never paid cash dividends, and does not currently intend to pay cash dividends, and thus has assumed a 0% dividend yield.Expected Term.
For options, the Company has no history of employee exercise patterns. Therefore, the Company uses the option term as the expected term. For warrants, the Company uses the actual term of the warrant.Pre-Vesting Forfeitures.
Estimates of pre-vesting option forfeitures are based on Company experience. The Company will adjust its estimate of forfeitures over the requisite service period based on the extent to which actual forfeitures differ, or are expected to differ, from such estimates. Changes in estimated forfeitures will be recognized through a cumulative catch-up adjustment in the period of change and will also impact the amount of compensation expense to be recognized in future periods.Earnings per Share.
The Company computes net income (loss) per common share in accordance with ASC Topic 260. Net income (loss) per share is based upon the weighted average number of outstanding common shares and the dilutive effect of common share equivalents, such as options and warrants to purchase Common Stock,common stock, convertible preferred stock and convertible notes, if applicable, that are outstanding each year. BasicDiluted earnings per share, if presented, would include the dilution that would occur upon the exercise or conversion of all potentially dilutive securities into common stock using the “treasury stock” and/or “if converted” methods as applicable.
For the three and six months ended June 30, 2021 and the three and six months ended June 30, 2020, basic and diluted earnings per share were the same at the reporting dates of the accompanying financial statements, as including Common Stockcommon stock equivalents in the calculation of diluted earnings per share would have been antidilutive.
As of SeptemberJune 30, 2017,2021, the Company has no outstanding options, as all options expired in 2020. As of June 30, 2021, the Company had outstanding warrants exercisable for 15,000,000 shares of its common stock $0.01 par value (“Common Stock”), and outstanding preferred stock, $0.01 par value (“Preferred Stock”) convertible into 6,196,893 shares of its Common Stock, which options, warrants and Preferred Stock were deemed to be antidilutive for the six months ended June 30, 2021. At June 30, 2021, the Company had reserved for issuance to certain investors 860,000 shares of its Series B Convertible Preferred Stock, convertible into 860,000 shares of its Common Stock. As of June 30, 2020, the Company has estimated and reserved for issuance approximately 20.0 million shares of Common Stock for a future conversion of its issued and outstanding Convertible Notes Payable.
As of June 30, 2020, the Company had outstanding options exercisable for 2,352,0002,300,000 shares of its Common Stock, outstanding warrants exercisable for 15,000,000 shares of its Common Stock, and preferred sharesoutstanding Preferred Stock convertible into 16,676,9426,196,893 shares of its Common Stock, which options, warrants and preferred sharesPreferred Stock were deemed to be antidilutive for the ninesix months ended SeptemberJune 30, 2017.2020. At SeptemberJune 30, 2017,2020, the Company hashad reserved for issuance to certain investors 860,000 preferred shares of its Series B Convertible Preferred Stock, convertible into 860,000 shares of its Common Stock.
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Fair Value.
The Company has adopted ASC Topic 820, "
Use of Estimates.
The accompanying financial statements are prepared in conformity with accounting principles generally accepted in the United States of America, and include certain estimates and assumptions, which affect the reported amounts of assets and liabilities at the date of the financial statements, and the reported amounts of revenuesrevenue and expensesexpense during the reporting period. Accordingly, actual results may differ from those estimates.
Reclassifications.
Prior period financial statement amounts have been reclassified to conform to current period presentation. The reclassifications have no effect on net loss or earnings per share.
Recent Accounting Pronouncements
.Management has considered all recent accounting pronouncements in the current period and identified no pronouncements that would have an impact on our financial statements.
4. INVESTMENTS
In May 2006,December 2018, the Company purchased 144,024 sharesacquired a 15 interest in Preprogen LLC pursuant to the Preprogen Transaction. On October 8, 2018, the Preprogen Agreement was amended to provide for, among other things, the release of common stockfunds held in escrow related to the manufacture of GMS Biotech, formerly Genomics USA, Inc. (“
5. INTANGIBLE ASSETS
On December 31, 2016,15, 2017, the Company recorded a lossentered into an agreement with Preprogen, pursuant to which the parties agreed to the sale, assignment, and license-back of $30,051 as an impairment oncertain assets, including intellectual property transferred to Preprogen necessary to the value of its common stock investment in GUSA. The Company has valued the impairment based on the dilutiondevelopment, manufacture, marketing and sale of the Company’s investmentOTC miniform products for the feminine hygiene and certain other factors.
September 30, 2017 (unaudited) | December 31, 2016 | |
Licensed patents and patent rights | $50,000 | $50,000 |
Patents | 41,044 | 41,044 |
Lateral Flow Licensed Technology | 13,200 | 13,200 |
Less: accumulated amortization | (93,051) | (90,370) |
Intangibles, net | $11,193 | $13,874 |
6. CONVERTIBLE NOTES PAYABLE
During the years 2014 to 2017, the Company issued an additional Bridge Note in the principal amounta series of $36,500 and issued 73,000 shares of Common Stock to the purchaser of the additional Bridge Note. Additionally, we issued 500,000 shares of Common Stock in January 2015 to certain investors who purchased Bridge Notes during the year ended December 31, 2014, which were previously classified as shares to be issued.
At June 30, 2015 to December 31, 2015. As consideration for the extension of the maturity date of the Bridge Notes, the Company issued an aggregate total of 286,500 shares of Common Stock to the Bridge Note holders.
September 30, 2017 | December 31, 2016 | |
Notes Payable | 1,784,187 | 1,059,784 |
Notes Payable, related party | 117,801 | 558,287 |
Total notes payable | 1,901,988 | 1,618,071 |
|
| June 30, |
|
| December 31, 2020 |
| ||
Notes Payable |
| $ | 1,387,694 |
|
| $ | 1,387,694 |
|
Accrued Interest |
| $ | 966,379 |
|
| $ | 866,226 |
|
Notes Payable, related party |
| $ | 102,000 |
|
| $ | 102,000 |
|
Accrued Interest, related Party |
| $ | 71,807 |
|
| $ | 64,251 |
|
Total Notes Payable |
| $ | 2,527,880 |
|
| $ | 2,420,171 |
|
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Notes Payable, Related Party.
As of SeptemberJune 30, 2017,2021 and December 31, 2020, the Company owed MichaelMr. Abrams, a director of the Company, an aggregate total of $117,801$173,807 and $166,251, respectively, for outstanding principal and accrued and unpaid interest on certain Bridge Notes. The Bridge Notes held by Mr. Abrams are in default and bear interest rates ranging from 12% to 18%. As of June 30, 2021, the Bridge Notes are due and payable.
7. RELATED PARTY TRANSACTIONS
In November 2018, the Company authorized payment of $3,500 per month to Dr. Hirschman for his services as Chief Executive Officer and $3,500 to Mr. Abrams for his services as a Director. Effective January 1, 2020, Mr. Abrams has waived the payments of fees for his services. Effective April 1, 2020, Dr. Hirschman has waived the payment of is fees as Chief Executive Officer.
During the six months ended June 30, 2020, Dr. Hirschman received aggregate compensation of $3,500 of consulting fees for services as Chief Executive Officer. The Company applied $7,000 of prepaid consulting fees to services for February and March 2020.
During the six months ended June 30, 2020, Mr. Abrams received payment of accrued consulting fees for services during 2019 in the amount of $14,085. Subsequent to June 30, 2020, Mr. Abrams did not receive or accrue new compensation as he has waived his compensation for services as a Director.
As of June 30, 2021 and December 31, 2016,2020, the Company owed Mr. Abrams, a director of the Company, an aggregate total of $2,059$173,807 and BHA an aggregate total of $556,168$166,251, respectively, for outstanding principal and accrued and unpaid interest on certain Bridge Notes. Mr. Abrams is an employee of BHA.
8. OTHER BALANCE SHEET INFORMATION
Prepaid expenses: | September 30, 2017 (unaudited) | December 31, 2016 |
Prepaid insurance | $- | $28,094 |
Prepaid expenses | $- | $28,094 |
Property and equipment: | ||
Computers and office furniture, fixtures and equipment | $28,031 | $28,031 |
Machinery and equipment | 5,475 | 5,475 |
Less: accumulated depreciation | (33,506) | (33,506) |
Property and equipment, net | $- | $- |
Accrued expenses: | ||
Other Accrued expenses | $0 | 36,342 |
Accrued expenses | $0 | 36,342 |
The Company has authorized 25,000,000 shares of preferred stock,Preferred Stock, of which 20,500,000 isare designated as Series B Convertible Preferred Stock, $0.01 par value, with a stated value of approximately $204,000.$204,000 (“Series B Preferred”). The remaining authorized preferred shares havehad not been designated by the Company as of SeptemberJune 30, 2017.
Series B Convertible Preferred Stock
The Series B Preferred ranks priorsenior to the Company’s Common Stock for purposes of liquidation preference, and to all other classes and series of equity securities of the Company that by their terms did not rank senior to the Series B Preferred (“
In July and August 2017, the Company entered into Note Purchase Agreements with two existing stockholders, pursuant to which the Company issued the 2017 Bridge Notes in the aggregate principal amount of $86,000. As additional consideration for the purchase of the 2017 Bridge Notes, the Company has reserved for issuance an aggregate of 860,000 shares of Series B Preferred to be issued to the purchasers of the 2017 Bridge Notes. The Company has valued the Series B Preferred and has recorded a discount on the 2017 Bridge Notes of $7,818, which was amortized in full during the three monthsyear ended September 30,December 31, 2017.
In April 2018, the Company completed the purchase of 10,480,049 shares of Series B Preferred (the “Purchased Shares”) from an institutional shareholder for an aggregate purchase price of $20,000. Following this transaction, the shareholder no longer holds shares in the Company.
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As of SeptemberJune 30, 20172021 and December 31, 2016,2020, the Company had 16,676,9426,196,893 shares of Series B Preferred issued and outstanding, with a liquidation preference of $166,769, respectively,$61,969 and convertible into 16,676,9426,196,893 shares of the Company’s Common Stock.
9. COMMON STOCK, OPTIONS AND WARRANTS
The Company has authorized 150,000,000 shares of its Common Stock for issuance, of which 78,696,461 were issued and outstanding at each of SeptemberJune 30, 20172021 and December 31, 2016.
During the threesix months ended SeptemberJune 30, 20172021 and 2016,2020, there were no warrants issued by the Company. As of SeptemberJune 30, 2017,2021, the Company had no warrantshas one warrant issued and outstanding.
2007 Incentive and Non-Qualified Stock Option Plan.
The fair value of options granted under the Company’s 2007 Incentive and Non-Qualified Stock Option Plan is recorded as compensation expense over the vesting period, or, for performance based awards, the expected service term. The Company did not issue any options during the10. SUBSEQUENT EVENTS
We have evaluated subsequent events through the date of this filing in accordance with the Subsequent Events Topic of the FASB ASC 855, and have determined that except as disclosed herein, no subsequent events occurred that are reasonably likely to impact these financial statements.
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ITEM 2. M
The following discussion of our financial condition should be read in conjunction with the financial statements and notes to financial statements included elsewhere in this filing. The following discussion (as well as statements in Item 1 above and elsewhere) contains forward-looking statements within the meaning of the Private Securities Litigation Act of 1995 that involve risks and uncertainties. Some or all of the results anticipated by these forward-looking statements may not occur. Forward-looking statements involve known and unknown risks and uncertainties including, but not limited to, trends in the biotechnology, healthcare, and pharmaceutical sectors of the economy; competitive pressures and technological developments from domestic and foreign genetic research and development organizations which may affect the nature and potential viability of our business strategy; and private or public sector demand for products and services similar to what we plan to commercialize. We disclaim any intention or obligation to publicly announce the results of any revisions to any of the forward-looking statements contained herein to reflect future events or developments.
Unless otherwise indicated or the context otherwise requires, all references in this report to “we,” “our,” “ours,” “us,”“we”, “our”, “us”, the “Company” or similar terms refer to QuantRx Biomedical Corporation, a Nevada corporation.
Overview
We have developed
and intend to commercialize ourThe continuation of our operations remains contingent onupon the receipt of additional financing required to execute our business and operating plan, which is currently focused on the commercialization of our PAD technology, either directly or through a joint venture or other relationship intended to increase shareholder value. In the interim, we have nominal operations, focused principally on maintaining our intellectual property portfolio and continuing to complymaintaining compliance with the public company reporting requirements. In order to continue as a going concern, we will need to raise capital, which may include through the issuance of debt and/or equity securities. No assurances can be given that we will be able to obtain additional financing under terms favorable to us, if at all, or otherwise successfully develop a business and operating plan or enter into an alternative relationship to commercialize our PAD technology.
Our principal business line consists of our over-the-counter business (the “
Our current focus is to obtain additional working capital necessary to continue as a going concern, and to develop a longer term financing and operating plan to: (i) leverage our broad-based intellectual property and patent portfolio to develop new and innovative diagnostic products; (ii) commercialize our OTC Business and Diagnostics Businessover-the-counter products either directly or through joint ventures, mergers or similar transactions intended to capitalize on potential commercial opportunities presented by each of the Businesses; (iii)opportunities; (ii) contract manufacturing of our over-the-counter products to third parties while maintaining control over the manufacturing process; (iii) maintain our intellectual property portfolio with respect to patents and licenses pertaining to both the OTC Business and the Diagnostics Business; and (iv) maximize the value of our investments in non-core assets. However, asAs a result of our current financial condition, however, our efforts in the short-term will be focused on obtaining financing necessary to maintain the Company as a going concern.
While we expect the impacts of COVID-19 to have an adverse effect on our ability to successfully obtain working capital necessary to continue as a going concern.
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The following discussion of our financial condition should be read together with our financial statements and related notes included in the Annual Report on Form 10-K, filed on April 17, 2017.
Results of Operations
Comparison of the Three and NineSix Months Ended SeptemberJune 30, 20172021 to the Three and NineSix Months Ended SeptemberJune 30,
The Company did not generate any revenue during the three and ninesix months ended SeptemberJune 30, 20172021 or the three and ninesix months ended SeptemberJune 30, 2016.
Sales, general and administrative expense for the three months ended SeptemberJune 30, 20172021 and 20162020 was $16,747$3,100 and $13,319,$2,989, respectively. Sales, general and administrative expense for the ninesix months ended SeptemberJune 30, 20172021 and 20162020 was $57,055$6,647 and $53,049,$6,889, respectively.
Professional fees for the three months ended SeptemberJune 30, 20172021 and 20162020 were $15,106$20,131 and $12,422,$22,451, respectively. Professional fees for the ninesix months ended SeptemberJune 30, 20172021 and 20162020 were $44,543$21,631 and $47,977,$23,451, respectively. Professional fees include the costs of legal, consulting and auditing services provided to us.
Professional fees, related party for the three months ended June 30, 2021 and 2020 were $0 and $0, respectively. Professional fees, related party for the six months ended June 30, 2021 and 2020 were $0 and $10,500, respectively. The decrease in these professional fees relate to lower overall costs for professionalfees paid Dr. Hirschman services duringto the 2017 periods.
The Company did not incur any research and development costs during
the threeInterest expense for the three months ended SeptemberJune 30, 20172021 and 20162020 was $38,352$53,759 and $55,738,$53,891, respectively. Interest expense for the ninesix months ended SeptemberJune 30, 20172021 and 20162020 was $150,951$107,710 and $157,716,$107,773, respectively.
During the three and nine months ended SeptemberJune 30, 2017, the Company recorded amortization expense of $7,818 related to the discount on the 2017 Bridge Notes.
During the three months ended SeptemberJune 30, 2017 was $66,3172021, the Company recorded net loss of $76,990 compared to net loss for the three months ended SeptemberJune 30, 20162020 of
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The Company expects net loss to continue to decrease in future periods due to the current suspension of ourits active operations and ourits lack of revenue. We doThe Company does not expect to recommencere-commence active operations until we areit is able to secure financing necessary to execute ourits business and operating plan, including the development and launch of its over-the-counter products, or to otherwise capitalize on our PAD technology.
Liquidity and Capital Resources
At SeptemberJune 30, 2017,2021, the Company had cash and cash equivalents of $8,914,$27,756 as compared to $7,156$55,428 at SeptemberDecember 31, 2020.
The Company had cash and cash equivalents of $83,412 at June 30, 2016. 2020. The decrease in cash and cash equivalents between the 2021 and 2020 periods of approximately $55,656 is primarily attributable to cash used for operations in the 2020 and 2021 periods.
During the ninesix months ended SeptemberJune 30, 2017,2021, the Company used $90,440$27,672 for operating activities, compared to $67,960$46,939 used during the ninethree months ended SeptemberJune 30, 2016.
The Company has not generated sufficient revenuesrevenue from operations to meet its operating expenses.expense. The Company requires additional funding to complete the development and launch of its over-the-counter products, or to otherwise capitalize on its PAD technology. The Company has historically financed its operations primarily through issuances of equity and the proceeds of debt instruments. In the past, the Company has also provided for its cash needs by issuing shares of its Common Stock, options and warrants for certain operating costs, including consulting and professional fees.
Management believes that given the current economic environment and the continuing need to strengthen our cash position, there is substantial doubt about our ability to continue as a going concern. We are pursuing various funding options, including licensing opportunities and the sale of investment holdings, as well other financing transactions, to obtain additional funding to continue the development of our products and bring them to commercial markets. There can be no assurance that we will be successful in our efforts. Should we be unable to raise adequate financing or generate sufficient revenue in the future, the Company’s business, results of operations, liquidity and financial condition would be materially and adversely harmed.
The Company believes that the ability of the Company to recommencere-commence operations, and therefore continue as a going concern is dependent upon its ability to do any or all of the following:
● | obtain adequate sources of funding to pay operating expense and fund long-term business operations; |
● | enter into a licensing or other relationship that allows the Company to commercialize its products; |
● | manage or control working capital requirements by reducing operating expense; and |
● | develop new, and enhance existing, relationships with product distributors and other points of distribution for the Company’s products. |
There can be no assurance that the Company will be successful in achieving its short- or long-term plans as set forth above, or that such plans, if consummated, will enable the Company to obtain profitable operations or continue in the long-term as a going concern.
Off-Balance Sheet Arrangements
We have not entered into any transactions with unconsolidated entities in which we have financial guarantees, subordinated retained interests, derivative instruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligations under a variable interest in an unconsolidated entity that provides us with financing, liquidity, market risk or credit risk support.
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Critical Accounting Policies
The Company recognizes revenue in accordance with SEC Staff Accounting Bulletin Topic 13 when persuasive evidencelisting below is not intended to be a comprehensive list of an arrangement exists and delivery has occurred, provided the fee is fixed or determinable and collection is probable. The Company assesses whether the fee is fixed and determinable based on the payment terms associated with the transaction. If a fee is based upon a variable such as acceptance by the customer, the Company accounts for the fee as not being fixed and determinable.all of our accounting policies. In thesemost cases, the Company defers revenue and recognizes it when it becomes due and payable. Up-front engagement fees are recorded as deferred revenue and amortized to income on a straight-line basis over the term of the agreement, although the fee is due and payable at the time the agreement is signed or upon annual renewal. Payments related to substantive, performance-based milestones in an agreement are recognized as revenue upon the achievement of the milestones as specified in the underlying agreement when they represent the culmination of the earnings process.
Impairment of Assets
We assess the impairment of long-lived assets, including our other intangible assets, at least annually or whenever events or changes in circumstances indicate that their carrying value may not be recoverable. The determination of related estimated useful lives and whether or not these assets are impaired involves significant judgments, related primarily to the future profitability and/or future value of the assets. Changes in our strategic plan and/or market conditions could significantly impact these judgments and could require adjustments to recorded asset balances. We hold investments in companies having operations or technologies in areas which are within or adjacent to our strategic focus when acquired, all of which are privately held and whose values are difficult to determine. We record an investment impairment charge if we believe an investment has experienced a decline in value that is other than temporary. Future changes in our strategic direction, adverse changes in market conditions or poor operating results of underlying investments could result in losses or an inability to recover the carrying value of the investments that may not be reflected in an investment’s current carrying value, thereby possibly requiring an impairment charge in the future.
In determining fair value of assets, the Company bases 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 carrying values of assets that are not readily apparent from other sources. Actual fair value may differ from management estimates resulting in potential impairments causing material changes to certain assets and results of operations.
Global Cancer Diagnostics, Inc. (“GCD”): During 2015, the Company entered into a letter of intent with GCD, which provided for, among other things, the advance payment of $50,000 towards a potential business combination. During 2017, the Company determined the full amount of the advanced payment to be impaired.
Preprogen: During the years ended December 31, 2019 and December 31, 2018, the Company recorded a loss of $222,000 and $278,000, respectively, on an impairment on the value of share-based payment awardsits investment in Preprogen. The Company has valued the impairment based on the date of grantan evaluation by a third-party using the Black-Scholes model is affected by our stock price as well as assumptions regarding a number of complex and subjective variables. These variables include, but are not limited to, our expected stock price volatility over the term of the awards, actual and projected employee stock option exercise behaviors, and risk-free interest rate. If factors change and we employ different assumptions in future periods, the compensation expense that we record may differ significantly from what we have recorded in the current period.
Deferred Taxes
We recognize deferred tax assets and liabilities based on differences between the financial statement carrying amounts and tax bases of assets and liabilities, which requires management to perform estimates of future transactions and their respective valuations. We review our deferred tax assets for recoverability and establish a valuation allowance if it is more likely than not that the Company will not realize the benefit of the net deferred tax asset. At SeptemberJune 30, 20172021 and December 31, 2016,2020, a valuation allowance has been established. The likelihood of a material change in the valuation allowance depends on our ability to generate sufficient future taxable income. In the future, if management determines that the likelihood exists to utilize the Company’s deferred tax assets, a reduction of the valuation allowance could materially increase the Company’s net deferred tax asset.
(a)
Evaluation of disclosure controls and procedures.Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of the design and operations of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “
Exchange Act”), as of(b)
Changes in internal controls over financial reporting.There has been no change in our internal control over financial reporting that occurred during our most recent fiscal year that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. There has been no progress towards remediating our previously disclosed material weakness due to the lack of funding.
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PART II - OTHER INFORMATION
As of the date hereof, there are no additional material pending legal proceedings to which we are a party to or of which any of our property is the subject.
Our results of operations and financial condition are subject to numerous risks and uncertainties described in our Annual Report on Form 10-K for our fiscal year ended December 31, 2016,2020, filed on April 17, 2017.15, 2021. You should carefully consider these risk factors in conjunction with the other information contained in this Quarterly Report. Should any of these risks materialize, our business, financial condition and future prospects could be negatively impacted. As of SeptemberJune 30, 2017,2021, there have been no material changes to the disclosures made in the above-referenced Form 10-K.
None.
None.
Not Applicable.
None.
Exhibit | Description | |
101.INS | XBRL Instance Document | |
101.SCH | XBRL Taxonomy Extension Schema | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase | |
101.LAB | XBRL Taxonomy Extension Label Linkbase | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase |
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Table of Contents |
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: | /s/ Shalom Hirschman | |
Shalom Hirschman Principal Executive, Financial and Accounting Officer |
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