ITEM 2. MANAGEMENT’S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following discussion should be read in conjunction with our
consolidated financial statements and notes thereto included
herein. In connection with, and because we desire to take advantage
of, the “safe harbor” provisions of the Private
Securities Litigation Reform Act of 1995, we caution readers
regarding certain forward looking statements in the following
discussion and elsewhere in this report and in any other statement
made by, or on our behalf, whether or not in future filings with
the Securities and Exchange Commission. Forward looking statements
are statements not based on historical information and which relate
to future operations, strategies, financial results or other
developments. Forward looking statements are necessarily based upon
estimates and assumptions that are inherently subject to
significant business, economic and competitive uncertainties and
contingencies, many of which are beyond our control and many of
which, with respect to future business decisions, are subject to
change. These uncertainties and contingencies can affect actual
results and could cause actual results to differ materially from
those expressed in any forward looking statements made by, or on
our behalf. We disclaim any obligation to update forward looking
statements.
Overview and History
We
were incorporated in the State of Colorado on August 31, 2006 under
the name “Mountain West Business Solutions,
Inc.” Until October 2009, our business was to
provide management consulting with regard to accounting, computer
and general business issues for small and home-office based
companies. Effective October 15, 2009, we executed an agreement to
acquire Sunshine Biopharma, Inc., a Colorado corporation, in
exchange for the issuance of 21,962,000 shares of our Common Stock
and 850,000 shares of Convertible Preferred Stock, each convertible
into twenty (20) shares of our Common Stock. As a result of this
transaction we changed our name to “Sunshine Biopharma, Inc.
and our officers and directors resigned their positions with us and
were replaced by our current management. The majority of the Common
Shares and all of the Convertible Preferred Shares we issued for
this transaction were issued to Advanomics Corporation, a privately
held Canadian company (“Advanomics”). On December 21,
2011, Advanomics exercised its right to convert the 850,000 shares
of Series “A” Preferred Stock it held in our Company
into 17,000,000 shares of Common Stock.
Following the above
detailed transactions, we began to operate as a pharmaceutical
company focusing on development of the Adva-27a anticancer
compound. We operated under a the exclusive technology license
agreement with Advanomics until December 2015, at which time we
acquired all of the worldwide right to the technology and became
direct owner of all issued and pending patents pertaining to the
Adva-27a technology. Following acquisition of the Adva-27a patents,
the exclusive license agreement with Advanomics was terminated and
Sunshine Etopo, Inc., Sunshine Biopharma Inc.’s subsidiary
holding the exclusive license with Advanomics, was
dissolved.
In July
2014, we formed a wholly owned Canadian subsidiary, Sunshine
Biopharma Canada Inc. (“Sunshine Canada”), for the
purposes of offering generic pharmaceutical products in Canada and
elsewhere around the globe. Sunshine Canada has recently signed
licensing agreements for four (4) generic prescription drugs for
the treatment of cancer and BPH (Benign Prostatic
Hyperplasia).
With
our entry into the generic pharmaceuticals business, we have become
a fully integrated pharmaceutical company offering generic and
proprietary drugs for the treatment of cancer and other acute and
chronic indications.
Effective August 1, 2017 we moved our principal
place of business to 6500 Trans-Canada Highway, 4th Floor,
Pointe-Claire, Quebec, Canada H9R 0A5. Our new phone
number is (514) 426-6161 and our website address
is
www.sunshinebiopharma.com
.
We
have not been subject to any bankruptcy, receivership or similar
proceeding.
Results Of Operations
Comparison of Results of Operations for the three months ended June
30, 2017 and 2016
For
the three months ended June 30, 2017 and 2016, we did not generate
any revenues.
General
and administrative expenses during the three month period ended
June 30, 2017 remained relatively consistent with the prior period
in 2016. G&A expenses were $472,218, compared to general and
administrative expense of $471,313 incurred during the three month
period ended June 30, 2016, an increase of only $905. The various
components of our general and administrative expense varied
significantly from prior results of operations. Specifically,
consulting fees decreased by $84,309 during the three months ended
June 30, 2017, compared to the similar period in 2016 as a result
of shifting of the services rendered towards the less costly
development of our generic pharmaceuticals business. Also, as a
result of shifting our current efforts towards the development of
our Generic Pharmaceuticals operations, we incurred no research
& development expenses during the three months ended June 30,
2017, compared to an expenditure of $32,793 during the similar
period in 2016. See “Plan of Operation” below. In
addition, we saw a decrease of $14,456 in our amortization &
depreciation due to write-downs. The general and administrative
expense categories that saw an increase during the three months
ended June 30, 2017, compared to the similar period in 2016
included executive compensation, legal fees and accounting fees.
Executive compensation increased by $93,072, legal fees by $12,230
and accounting fees by $42,246. The increase in our accounting fees
was due to the fact that we paid for all of the bookkeeping
services required in 2017 in one lump-sum payment through stock
issuance in the second quarter of 2017. Our interest expense of
$9,598 during the three months ended June 30, 2017 was relatively
unchanged from the $9,997 incurred during the similar period in
2016. Finally, we incurred no losses arising from debt conversion
during the three months ended June 30, 2017 and 2016.
As
a result, we incurred a net loss of $485,444 ($0.00 per share) for
the three month period ended June 30, 2017, compared to a net loss
of $481,310 ($0.00 per share) during the three month period ended
June 30, 2016.
Comparison of Results of Operations for the six months ended June
30, 2017 and 2016
For
the six months ended June 30, 2017 and 2016, we did not generate
any revenues.
General
and administrative expenses during the six month period ended June
30, 2017 were also consistent to expenses incurred during the
similar period in 2016, as we incurred $581,208 in G&A expense,
compared to general and administrative expense of $540,995 incurred
during the six month period ended June 30, 2016, an increase of
$40,213. Some components of our general and administrative expense
increased while others decreased during the six month period ended
June 30, 2017, compared to the corresponding period of 2016. The
expense categories that saw an increase included accounting fees
and executive compensation. The increase of $51,046 in accounting
fees during the six months ended June 30, 2017, compared to the
similar period in 2016 was due to the fact that we paid for all of
the bookkeeping services required in 2017 in one lump-sum payment
through stock issuance in the second quarter of 2017. The
categories that saw a decrease during the six months ended June 30,
2017, compared to the similar period in 2016 were consulting fees
and research & development expenses. The decrease of $72,556 in
consulting fees and $32,793 in research & development expenses
were a result of the shifting of the services rendered to us
towards the development of the less costly Generic Pharmaceuticals
business. See “Plan of Operation” below. Most of our
other expenses remained relatively constant during the six month
period ended June 30, 2017 compared to the similar period in
2016. We incurred $18,742 in interest expense during the
six months ended June 30, 2017, compared to $16,951 in interest
expense during the similar period in 2016. However, we
incurred $76,929 in losses arising from debt conversion during the
six months ended June 30, 2017, compared to $253,658 in losses from
debt conversion during the similar period in 2016, a difference of
$176,729 as a result of a smaller amount of convertible notes
outstanding. We also received $25,000 from the settlement of
litigation in 2016 that we did not receive during the six months
ended June 30, 2017.
As
a result, we incurred a net loss of $681,146 ($0.00 per share) for
the six month period ended June 30, 2017, compared to a net loss of
$786,604 ($0.00 per share) during the six month period ended June
30, 2016.
Because
we did not generate any revenues during the six months ended June
30, 2017, following is our Plan of Operation.
Plan of Operation
Since
inception, we have been operating as a pharmaceutical company
focused on the research, development and commercialization of
proprietary drugs for the treatment of various forms of
cancer. In July 2014, we formed Sunshine Biopharma
Canada Inc., a Canadian wholly owned subsidiary, for the purposes
of conducting generic pharmaceuticals business in Canada and
elsewhere around the world. During 2016, we intensified our
activities in the generic pharmaceuticals area as we continued to
pursue our proprietary anticancer drug development efforts.
Accordingly, we have become a fully integrated pharmaceutical
company offering generic and proprietary drugs for the treatment of
cancer and other acute and chronic indications. Below we describe
our Generic Pharmaceuticals operations followed by our Proprietary
Drug Development Program.
Generic Pharmaceuticals Operations
In
2016, our Canadian wholly owned subsidiary, Sunshine Biopharma
Canada Inc. (“Sunshine Canada”), signed Cross
Referencing Agreements with a major pharmaceutical company for four
prescription generic drugs for the treatment of Breast Cancer,
Prostate Cancer and Enlarged Prostate. We will market and sell
these new pharmaceutical products under our own Sunshine Biopharma
label. These four generic products are as follows:
●
Anastrozole (brand
name Arimidex® by AstraZeneca) for treatment of Breast
Cancer;
●
Letrozole (brand
name Femara® by Novartis) for treatment of Breast
Cancer;
●
Bicalutamide (brand
name Casodex® by AstraZenica) for treatment of Prostate
Cancer;
●
Finasteride (brand
name Propecia® by Merck) for treatment of BPH (Benign
Prostatic Hyperplasia)
Worldwide sales of
the brand name version of these products as reported in the SEC
filing of the respective owner of the registered trademark are as
follows:
●
Arimidex®
$232M in 2016
●
Propecia®
$183M in 2015
On June
12, 2017, Sunshine Canada submitted an application to Health Canada
for the procurement of a Drug Establishment License
(“DEL”), a requirement for the Company’s drug
handling and pharmaceutical operations. Health Canada has assigned
the Company DEL Application No. 3-002475 and File No. 17938.
Sunshine Canada is currently awaiting Health Canada to set a date
for physical inspection of our warehouse and drug management
operations which we have set up at the facility of our strategic
alliance partner, Atlas Pharma Inc. In addition, Sunshine Canada is
currently in the process of preparing the documentation for filing
applications for a Drug Identification Number (“DIN”)
for each of its four (4) generic products, SBI-Anastrozole,
SBI-Letrozole, SBI-Bicalutamide and SBI-Finasteride. We cannot
estimate the timing for our obtaining the DEL and the DIN’s
due to variables involved that are out of our control. The Figure
below shows our 30-Pill blister pack of Anastrozole.
We
currently have twenty three (23) additional Generic Pharmaceuticals
under review for in-licensing. While no assurances can be provided,
when completed, this will bring our Generic Products portfolio to a
total of twenty seven (27). We believe that a larger product
portfolio provides us with more opportunities and a greater reach
into the marketplace. We hope to further build our generics
portfolio of “SBI” label Generic Pharmaceuticals over
time.
Various
publicly available sources indicate that the worldwide sales of
generic pharmaceuticals are approximately $200 billion per year. In
the United States and Canada, the sales of generic pharmaceuticals
are approximately $50 billion and $5 billion, respectively. The
generic pharmaceuticals business is fairly competitive and there
are several multinational players in the field including Teva
(Israel), Novartis - Sandoz (Switzerland), Hospira (USA), Mylan
(Netherlands), Sanofi (France), Fresenius Kabi (Germany) and Apotex
(Canada). While no assurances can be provided, with our offering of
Canadian approved products we believe that we will be able to
access at least a small percentage of the generic pharmaceuticals
marketplace.
As part
of a subscription agreement, we have an obligation to pay a royalty
of 5% of net sales on one of our generic products (Anastrozole) for
a period of three (3) years from the date of the first sale of that
product.
While
no assurances can be provided and subject to the availability of
adequate financing, of which there is no assurance, we anticipate
that profits from the sales of Generic Products will be used to
finance our proprietary drug development program, including
Adva-27a, our flagship anticancer compound. In addition to
near-term revenue generation, building the generics business
infrastructure and securing the proper permits will render us
appropriately positioned for the marketing and distribution of our
proprietary Adva-27a drug candidate, provided that Adva-27a is
approved for such marketing and distribution, of which there can be
no assurance.
Proprietary Drug Development Operations
Our
proprietary drug development activities have been focused on the
development of a small molecule called Adva-27a for the treatment
of aggressive cancers. A Topoisomerase II inhibitor, Adva-27a has
been shown to be effective at destroying Multidrug Resistant cancer
cells including Pancreatic Cancer cells, Breast Cancer cells,
Small-Cell Lung Cancer cells and Uterine Sarcoma cells (Published
in ANTICANCER RESEARCH, Volume 32, Pages 4423-4432, October 2012).
Sunshine Biopharma is direct owner of all issued and pending
worldwide patents pertaining to Adva-27a including U.S. Patent
Number 8,236,935. See “Part I, Item 1 – Business -
Intellectual Property.”
Summary
of Adva-27a Preclinical Studies
Adva-27a is a
GEM-difluorinated C-glycoside derivative of Podophyllotoxin.
Another derivative of Podophyllotoxin called Etoposide is currently
on the market and is used to treat various types of cancer
including leukemia, lymphoma, testicular cancer, lung cancer, brain
cancer, prostate cancer, bladder cancer, colon cancer, ovarian
cancer, liver cancer and several other forms of cancer. Etoposide
is one of the most widely used anticancer drugs. Adva-27a and
Etoposide are similar in that they both attack the same target in
cancer cells, namely the DNA unwinding enzyme, Topoisomerase II.
Unlike Etoposide, and other anti-tumor drugs currently in use,
Adva-27a is able to destroy Multidrug Resistant Cancer cells.
Adva-27a is the only compound known today that is capable of
destroying Multidrug Resistant Cancer. In addition, Adva-27a has
been shown to have distinct and more desirable biological and
pharmacological properties compared to Etoposide. In side-by-side
studies using Multidrug Resistant Breast Cancer cells and Etoposide
as a reference, Adva-27a showed markedly improved cell killing
activity (see Figure below). Our preclinical studies to date have
shown that:
●
Adva-27a is
effective at killing different types of Multidrug Resistant cancer
cells, including Pancreatic Cancer Cells (Panc-1), Breast Cancer
Cells (MCF-7/MDR), Small-Cell Lung Cancer Cells (H69AR), and
Uterine Sarcoma Cells (MES-SA/Dx5).
●
Adva-27a is
unaffected by P-Glycoprotein, the enzyme responsible for making
cancer cells resistant to anti-tumor drugs.
●
Adva-27a has
excellent clearance time (half-life = 54 minutes) as indicated by
human microsomes stability studies and pharmacokinetics data in
rats.
●
Adva-27a clearance
is independent of Cytochrome P450, a mechanism that is less likely
to produce toxic intermediates.
●
Adva-27a is an
excellent inhibitor of Topoisomerase II with an IC50 of only 13.7
micromolar (this number has recently been reduce to 1.44 micromolar
as a result of resolving the two isomeric forms of
Adva-27a).
●
Adva-27a has shown
excellent pharmacokinetics profile as indicated by studies done in
rats.
●
Adva-27a does not
inhibit tubulin assembly.
These
and other preclinical data have been published in ANTICANCER
RESEARCH, a peer-reviewed International Journal of Cancer Research
and Treatment. The publication which is entitled “Adva-27a, a
Novel Podophyllotoxin Derivative Found to Be Effective Against
Multidrug Resistant Human Cancer Cells” [ANTICANCER RESEARCH
32: 4423-4432 (2012)] is available on our website at
www.sunshinebiopharma.com
.
Clinical
Development Path
The
early stage preclinical studies for our lead compound, Adva-27a,
were successfully completed and the results have been published in
ANTICANCER RESEARCH 32: 4423-4432 (2012). We have been delayed in
our implementation of our clinical development program due to lack
of funding. Our fund raising efforts are continuing and as soon as
adequate financing is in place we will continue our clinical
development program of Adva-27a by conducting the next sequence of
steps comprised of the following:
● GMP
Manufacturing of 2 kilogram for use in IND-Enabling Studies and
Phase I Clinical Trials
●
IND-Enabling Studies
●
Regulatory Filing (Fast-Track Status Anticipated)
● Phase
I Clinical Trials (Pancreatic Cancer and in parallel Multidrug
Resistant Breast Cancer)
GMP Manufacturing
In
November 2014, we entered into a Manufacturing Services Agreement
with Lonza Ltd. and Lonza Sales Ltd. (hereinafter jointly referred
to as “Lonza”), whereby we engaged Lonza to be the
manufacturer of our Adva-27a anticancer drug. In June 2015 we
received a sample of the pilot manufacturing run for evaluation.
Our laboratory analyses showed that, while the sample meets the
required biological specifications, the amount of material
generated (the “Yield”) by the pilot run was found to
be significantly lower than planned. During the course of our
discussions concerning the problem of the low Yield, Lonza informed
us that they required us to pay them $687,818 prior to moving
forward with any activity pertaining to the manufacturing agreement
we have with them. We have repeatedly indicated to Lonza that a
clear path defining exactly how the extremely low Yield issue would
be addressed is imperative prior to us making any payments. As of
the date of this report, neither party has changed its position.
See “Part I, Item 3 – Legal
Proceedings.”
Clinical
Trials
Adva-27a’s
initial indication will be pancreatic cancer for which there are
currently little or no treatment options available. We have
concluded an agreement with McGill University’s Jewish
General Hospital in Montreal, Canada to conduct Phase I clinical
trials for this indication. All aspects of the planned clinical
trials in Canada will employ FDA standards at all levels. Subject
to obtaining the necessary financing, we now anticipate that Phase
I clinical trials will commence in mid-2018 and we estimate that it
will take 18 months to complete, at which time we expect to receive
limited marketing approval for “compassionate-use”
under the FDA and similar guidelines in Canada. See
“Potential Near-Term Opportunities” below.
Potential
Near-Term Opportunities
According to the
American Cancer Society, nearly 1.5 million new cases of cancer are
diagnosed in the U.S. each year. Given the terminal and
limited treatment options available for the pancreatic cancer
indication we are planning to study, we anticipate being granted
limited marketing approval (“compassionate-use”) for
our Adva-27a following receipt of funding and a successful Phase I
clinical trial. There are no assurances that either will
occur. Such limited approval will allow us to make the
drug available to various hospitals and health care centers for
experimental therapy and/or “compassionate-use”,
thereby generating revenues in the near-term.
In
addition, we believe that upon successful completion of Phase I
Clinical Trials we may receive one or more offers from large
pharmaceutical companies to buyout or license our drug at a
significant premium. However, there are no assurances
that our Phase I Trials will be successful, or if successful, that
any pharmaceutical companies will make an acceptable offer to
us. In the event we do not consummate such a
transaction, we will require significant capital in order to
complete the requisite additional clinical trials towards a
potential full marketing approval, of which there can be no
assurance.
A Space-Filling Model of Our Anticancer Compound,
Adva-27a
Intellectual Property
Effective October
8, 2015, we executed a Patent Purchase Agreement (the
“October Purchase Agreement”), with Advanomics, a
related party, pursuant to which we acquired all of the right,
title and interest in and to U.S. Patent Number 8,236,935 (the
“US Patent”) for our anticancer compound,
Adva-27a. On December 28, 2015, we executed a second
Patent Purchase Agreement (the “December Purchase
Agreement”), with Advanomics, pursuant to which we acquired
all of the right, title and interest in and to all of the remaining
worldwide rights covered by issued and pending patents under
PCT/FR2007/000697 and PCT/CA2014/000029 (the “Worldwide
Patents”) for our anticancer compound, Adva-27a.
Effective December
28, 2015, we entered into amendments (the “Amendments”)
of these Purchase Agreements pursuant to which the total purchase
price was reduced from $17,142,499 to $618,810, the book value of
this intellectual property on the financial statements of
Advanomics. Further, the Amendments provided for
automatic conversion of the promissory notes representing the new
purchase price into an aggregate of 321,305,415 shares of our
Common Stock once we increase our authorized capital such that
these shares can be issued. In July 2016 we increased
our authorized capital and issued the 321,305,415 Common shares to
Advanomics thereby completing all aspects of the patent purchase
arrangements and securing direct ownership of all worldwide patents
and rights pertaining to Adva-27a.
In
addition, in 2016 we signed Cross Referencing Agreements with a
major pharmaceutical company for four (4) prescription generic
drugs for the treatment of Breast Cancer, Prostate Cancer and
Enlarged Prostate. These agreements give us the right to register
the four (4) generic products, Anastrozole, Letrozole, Bicalutamide
and Finasteride in Canada under our own label and obtain a DIN for
each in order to be able to place them on the market.
While
no assurances can be provided, we are also planning to expand our
product line through acquisitions and/or in-licensing as well as
in-house research and development.
Liquidity and Capital Resources
As
of June 30, 2017, we had cash or cash equivalents of
$128,768.
Net cash used in operating activities was $185,850
during the six month period ended June 30, 2017, compared to
$219,995 for the six month period ended June 30,
2016. We anticipate that overhead costs and other
expenses will increase in the future as we move forward with our
proprietary drug development activities and our
offering of
generic pharmaceutical products as
discussed above.
Cash
flows from financing activities were $275,665 for the six month
periods ended June 30, 2017, compared to $244,128 during the six
months ended June 30, 2016. Cash flows used by investing
activities were $22,295 and $2,343 for the six month periods ended
June 30, 2017 and 2016, respectively.
During
the six months ended June 30, 2017, we issued a total of 99,194,792
shares of $0.001 par value Common Stock. Of these, 42,528,125
shares valued at $128,451 were issued upon conversion of
outstanding notes payable, reducing the debt by $48,500 and
interest payable by $3,022 and generating a loss on conversion of
$76,929. The remaining 56,666,667 shares were issued as
follows:
●
6,000,000 shares
for $15,000 Canadian ($11,278 US), which funds were paid directly
to a firm engaged to conduct a valuation of the Company’s
assets.
●
34,000,000 shares
for cash of $85,000 Canadian ($63,912 US).
●
6,666,667 shares
for purchase of laboratory equipment valued at
$22,000.
●
10,000,000 shares
for bookkeeping services required by the Company during
2017.
In
addition, during the six months ended June 30, 2017, we engaged in
the following debt transactions:
●
On February 10,
2017, we received monies in exchange for a convertible note payable
having a face value of $50,000.
●
On April 1, 2017,
we received monies in exchange for a convertible note payable
having a face value of $100,000 Canadian (approximately $75,190
US).
●
On April 26, 2017,
we received monies in exchange for a convertible note payable
having a face value of $65,000.
We are not generating revenue from our operations, and our ability
to implement our business plan as set forth herein will depend on
the future availability of financing. Such financing will be
required to enable us to further develop our generic
pharmaceuticals business and proprietary drug development program.
We intend to raise funds through private placements of our Common
Stock and/or debt financing. We estimate that we will require
approximately $6 million ($1 million for the generic pharmaceutical
operations and $5 million for the proprietary drug development
program) to fully implement our business plan in the future and
there are no assurances that we will be able to raise this capital.
While we are engaged in discussions with various investment banking
firms and venture capitalists to provide us these funds, as of the
date of this report we have not reached any agreement with any
party that has agreed to provide us with the capital necessary to
effectuate our business plan. Our inability to obtain sufficient
funds from external sources when needed will have a material
adverse effect on our plan of operation, results of operations and
financial condition.
Our
cost to continue operations as they are now conducted is nominal,
but these are expected to increase as we move forward with
implementation of our business plan. We do not have sufficient
funds to cover the anticipated increase in the relevant expenses.
We need to raise additional funds in order to continue our existing
operations to finance our plans to expand our operations for the
next year. If we are successful in raising additional funds, we
expect our operations and business efforts to continue and expand.
There are no assurances this will occur.
Independent
Valuation
We had
previously reported in our Form 10-K for our fiscal year ended
December 31, 2016 and Form 10-Q for the three months ended March
31, 2017, that pursuant to terms included in certain Subscription
Agreements with us we had undertaken to obtain a valuation report
(the “Report”) on our issued and outstanding shares by
an independent valuation firm. To comply with this obligation, on
March 9, 2017, we engaged MNP LLP (“MNP”) to provide us
with such Report.
On June
22, 2017, MNP issued its Report, which arrived at an estimated en
bloc Fair Market Value at March 31, 2017 (the "Valuation Date"), of
our issued and outstanding shares, in the range of $977.0 million
to $1,133.0 million.
MNP is
one of the largest public accountancy firms in Canada (www.mnp.ca).
The Montréal Valuation Practice (the “Practice”)
is engaged in the valuation of businesses, business ownership
interests, and securities and intangible assets in connection with
business combinations, distributions of listed and unlisted
securities, private placements, exchanges of shares, corporate and
financial reorganizations, going-private transactions, leveraged
buy-outs, fair value measurement of assets and liabilities for
purchase price allocation and annual impairment testing for
financial reporting pursuant to generally-accepted accounting
principles both in Canada and the United States. The Practice has
performed more than 3,000 valuations of public and private
companies throughout Canada and in the United States during the
past thirty years. Members of the Practice have also been playing
an active role in the Canadian and U.S. professional societies of
which they are accredited members, including serving on governing
boards and standards promulgating committees.
MNP is
not an insider, associate, or affiliate of our Company or any of
our affiliates, associates, or shareholders (collectively, the
“Interested Parties”). MNP does not own shares in our
Company, nor does it have any agreements, commitments, or
undertakings in respect of any future business involving any of the
Interested Parties. MNP’s professional fees for services
rendered in preparing the Report were not contingent, in whole or
in part, on the conclusions reached therein and were based strictly
on the professional time expended on the engagement at their
standard hourly rates.
The
results of this valuation have not been used in the preparation of
our financial statements.
Subsequent
Events
On July
20, 2017, we issued the three members of our Board of Directors
42,000,000 shares of $0.001 Common Stock valued at $336,000 or
$0.008 per share for services rendered to us in 2017.
On July
20, 2017, we issued 4,337,500 shares of our $0.001 par value Common
Stock for the purchase of laboratory equipment valued at
$34,700.
On July
24, 2017, we issued 2,717,391 shares of our $0.001 Common Stock
valued at $21,739, or $0.008 per share, for $25,000 of consulting
services rendered to us in June 2017. We will recognize a gain of
$3,261 on the settlement of this obligation, the difference between
the value of the stock issued at July 20, 2017 and the amount of
the invoice.
On
August 3, 2017, we received monies in exchange for a convertible
note payable having a face value of $80,000.
On
August 4, 2017, we issued payment in the amount of $67,422 to pay
off a note payable having a principal amount of $50,000, accrued
interest of $1,863 and prepayment penalty of $15,559. The note had
a maturity date of November 20, 2017.
Inflation
Although
our operations are influenced by general economic conditions, we do
not believe that inflation had a material effect on our results of
operations during the six month period ended June 30,
2017.
Critical Accounting Estimates
The
discussion and analysis of our financial condition and results of
operations are based upon our consolidated financial statements,
which have been prepared in accordance with accounting principles
generally accepted in the United States. The preparation of these
consolidated financial statements requires us to make estimates and
judgments that affect the amounts of assets, liabilities, revenues
and expenses, and related disclosure of contingent assets and
liabilities. On an on-going basis, we evaluate our estimates based
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
sources. Actual results may differ from these estimates under
different assumptions or conditions. The following represents a
summary of our critical accounting policies, defined as those
policies that we believe are the most important to the portrayal of
our financial condition and results of operations and that require
management’s most difficult, subjective or complex judgments,
often as a result of the need to make estimates about the effects
of matters that are inherently uncertain.