Notes to Consolidated Financial Statements
June 30, 2019 and 2018
NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization and Nature of Business
Sangui Biotech International, Inc. (“the Company”) was incorporated in Colorado in 1995. Since 2003 when a comprehensive restructuring of the group was completed, all operations have been carried out by Sangui BioTech GmbH, its 90% owned subsidiary which is headquartered in Witten, Germany. Sangui Biotech International, Inc., (“the Parent Company”) acts as a holding company whose purpose it is to secure financing and access to the capital markets. Effective from June 18, 2018 Sangui BioTech GmbH together with Sastomed GmbH founded Sangui Know-How- und Patentverwertungsgesellschaft mbH & Co. KG (“Sangui KG”). Sangui KG is a limited partnership, with Sangui BioTech GmbH as the general partner (owing 99.8%) and Sastomed GmbH as a limited partner (owning 0.2%).
Sangui BioTech GmbH is engaged in the development of technologies aimed at improved supply of oxygen to the human body such as wound management products in particular a wound spray based on natural hemoglobin, wound dressings based on Chitosan (a natural polymer), artificial oxygen carriers (external applications of hemoglobin, blood substitutes and blood additives) and cosmetics. The cosmetics products are currently being sold via the Company’s internet shop, yielding a small amount of revenues. Otherwise, the Company does not produce nor market its products. It has adopted the strategy to license its technologies to industry partners in exchange for royalties. In the pursuit of this strategy, the Company established a joint venture company in December 2010 for the purposes of marketing and selling the wound spray product in Germany and of preparing its market entry in several other European countries and Mexico. As consideration for the license, the Company is paid royalties on all sales of this product and is entitled to a 25 percent share of all future profits of the joint venture. Effective December 31, 2017 the Company sold its 25% share of the joint venture to its co-partner. On June 22, 2018, Sangui KG has acquired all rights in the license agreement concluded on December 17, 2010 with Sastomed GmbH from Sangui BioTec GmbH.
Going Concern
The Company incurred a net loss attributable to common stockholders of $ 323,576 and used cash in operating activities of $316,918 for the year ended June 30, 2019. These and other conditions raise substantial doubt about the Company's ability to continue as a going concern for a period of one year from the issuance of these financial statements. The Company expects to continue to incur significant capital expenses in pursuing its business plan to market its products and expand its product line; however, obtaining additional financing through stock offerings or other feasible financing alternatives may be difficult or even impossible. In order for the Company to continue operating at its existing levels, it will require significant additional funds over the next twelve months. Therefore, the Company is dependent on funds raised through equity or debt offerings. Management plans to continue to raise necessary capital through both notes payable, as well as stock sales.
Additional financing may not be available on terms favorable to the Company or at all. If these funds are not available, the Company may not be able to execute its business plan or take advantage of business opportunities. The Company’s ability to obtain such additional financing and to achieve its operating goals is uncertain. In the event that the Company does not obtain additional capital or is not able to increase cash flow through the increase of sales, there is a substantial doubt of its being able to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
F-6
SANGUI BIOTECH INTERNATIONAL, INC.
Notes to Consolidated Financial Statements
June 30, 2019 and 2018
NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Principles of Consolidation
The consolidated financial statements include the accounts of Sangui BioTech International, Inc., its 90% owned foreign subsidiary, Sangui BioTech GmbH and its 99.8% owned foreign subsidiary, Sangui KG. All intercompany accounts and transactions have been eliminated in consolidation.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the respective reporting period. As future events and their effects cannot be determined with precision, actual results could differ from those estimates. Significant estimates made by management are, among others, the realization of receivables, inventories, long-lived assets, and valuation allowance on deferred tax assets. Due to the current dependence of Sangui on the revenue from the license agreement with Sastomed GmbH, the management places the highest priority on the sales development in this area in order to be able to recognize potential risks in good time and to take appropriate measures if necessary. These measures include regular and ad hoc discussions with the licensee about its planned business development.
Risks and Uncertainties
The Company's line of future pharmaceutical and cosmetic products (artificial oxygen carriers or blood substitute and additives) as well as other medical products being developed by Sangui BioTech GmbH, are deemed as medical devices or biologics, and as such are governed by the Federal Food and Drug and Cosmetics Act and by the regulations of state agencies and various foreign government agencies. The pharmaceutical products will be subject to stringent regulatory requirements because they are in vivo products for humans. The Company and its subsidiaries have limited experience in obtaining regulatory clearance on these types of products. Therefore, the Company could be subject to risks of delays in obtaining or failing to obtain regulatory clearance.
Financial Instruments
Pursuant to ASC 820, Fair Value Measurements and Disclosures, an entity is required to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:
Level 1
Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.
F-7
SANGUI BIOTECH INTERNATIONAL, INC.
Notes to Consolidated Financial Statements
June 30, 2019 and 2018
NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Level 2
Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.
Level 3
Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The Company’s financial instruments consist principally of cash, accounts and notes receivable, accounts payable and accrued liabilities, notes payable and amounts due to related parties. We believe that the recorded values of all of our financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.
Foreign Currency Translation
The functional currency of the Company’s Sangui GmbH and Sangui KG subsidiaries is the local currency, the Euro. Accordingly, assets and liabilities of the subsidiary are translated into U.S. dollars at period-end exchange rates. All equity account balances have been translated at the historical rates. Revenues and expenses are translated at the average exchange rates in effect for the period. The resulting translation gains or losses are recorded as a component of accumulated other comprehensive income in the consolidated statement of stockholders’ equity. For the years ended June 30, 2019 and 2018, the Company recognized a loss on translation adjustment in the amount of $1,474 and of $29,306, respectively. Gains of $6,807 respectively, $549 resulting from foreign currency transactions as of June 30, 2019 and 2018.
The exchange rates used to calculate values and results of operations for the years ended June 30, 2019 and 2018, were as follows:
|
Year-end Rates
|
|
Average Period Rates
|
June 30, 2019
|
0.878005
|
|
0.876498
|
June 30, 2018
|
0.856494
|
|
0.838296
|
Pursuant to ASC 830-20-35, Foreign Currency Matters, the Company accounts for the translation of transactions denominated in foreign currencies in the Parent Company’s books as transaction gains (losses) recognized in General & Administrative expenses.
Cash and Cash Equivalents
The Company considers highly liquid investments with insignificant interest rate risk and original maturities to the Company of three months or less to be cash equivalents. The Company maintains its cash in uninsured bank accounts in Germany. Cash and cash equivalents include time deposits for which
F-8
SANGUI BIOTECH INTERNATIONAL, INC.
Notes to Consolidated Financial Statements
June 30, 2019 and 2018
the Company has no requirements for compensating balances. The Company has not experienced any losses in its uninsured bank accounts. The Company had no cash equivalents outstanding as of June 30, 2019 and 2018.
NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Property and Equipment
Property and equipment are recorded at cost and are depreciated or amortized using the straight-line method over the expected useful lives, which range from three to five years. Leasehold improvements are amortized using the straight-line method over the lesser of the estimated useful lives of the assets or the related lease terms. Depreciation expense for the years ended June 30, 2019 and 2018 was $0 and $0, respectively. Expenditures for normal maintenance and routine repairs are charged to expense, and significant improvements are capitalized. The cost and related accumulated depreciation of assets are removed from
the accounts upon retirement or other disposition; any resulting gain or loss is reflected in the statement of operations.
Impairment of Long-Lived Assets
Long-lived assets, including property and equipment and certain identifiable intangibles to be held and used are reviewed by the management of the Company for impairment whenever events or changes in circumstances indicate that the carrying value of an asset or asset group may not be recoverable. On a regular basis and at least annually, the Company evaluates whether events and circumstances have occurred that indicate possible impairment and relies on a number of factors, including business plans, economic projections, and anticipated future cash flows. Measurement of the amount of impairment, if any, is based upon the difference between the asset’s carrying value and estimated fair value. As of June 30, 2019 and 2018, no impairment was considered necessary.
Revenue Recognition
The Company derives revenue primarily from licensing fees on sales of its wound spray product as well as from the sale of its cosmetics products.
The wound spray technology is licensed to an entity, in which the Company held a 25 % equity interest, as a Joint Venture (See Note 2). Effective December 31, 2015 the Company sold its 25 % share of the joint venture to its co-partner. The Company presently is entitled to royalties on net sales of the wound spray product. Licensing fees are invoiced on a quarterly basis and are recognized as revenue during the quarter that the sales were reported by the licensee.
The Company’s product sales (amounting to less than 1% of total revenues in the current year) are generated via online orders, with credit card payment.
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). The new revenue recognition standard provides a five-step analysis of transactions to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
F-9
SANGUI BIOTECH INTERNATIONAL, INC.
Notes to Consolidated Financial Statements
June 30, 2019 and 2018
The licensing fees are invoiced on a quarterly basis and are recognized as revenues during the quarter for which the sales were reported by the licensee.
NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The conditions of ASC 606 are met and the Company records revenues when: (i) a valid license arrangement exists, (ii) the license terms are fixed and determinable, (iii) the later of (a) when the licensee makes the subsequent sales or use that trigger the royalty, or (b) the performance obligation to which some or all of the sales-based or usage- based royalties has been allocated has been satisfied and (iv) collectability is probable.
Trade Accounts Receivable
Accounts receivable are reflected at estimated net realizable value. The Company maintains an allowance for doubtful accounts based upon a variety of factors. The Company reviews all open accounts and provides specific reserves for customer collection issues when it believes a loss is probable. The reserve estimate includes consideration of such factors as the length of time receivables are past due, the financial condition of the customer, and historical experience. The Company also records a reserve for all customers, excluding those that have been specifically reserved for, based upon evaluation of historical losses which exceeded the specific reserves the Company had established. For the years ended June 30, 2019 and 2018, the Company recognized bad debt expense in the amounts of $0 and $0, respectively.
Inventory
Inventory is stated at the lower of cost (computed on a first-in, first-out basis) or market value. Provisions to value the inventory at the lower of the actual cost to purchase or manufacture the inventory, or the current estimated market value of the inventory, are based upon assumptions about future demand and market conditions. The Company also performs evaluations of inventory and records a provision or impairment for estimated excess and obsolete items based upon demand, and any other known factors at the time. As of June 30, 2019 and 2018, all inventory balances had been reserved against in full.
Concentration of Credit Risk
Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. The Company performs ongoing credit evaluations of its customers and maintains allowances for potential credit losses. Sales to the Company's largest customer represents over 99% of the Company's revenues.
Sales Tax Collected from Customers
As a part of the Company’s normal course of business, sales taxes are collected from customers. Sales taxes collected are remitted, in a timely manner, to the appropriate governmental tax authority on behalf of the customer. The Company’s policy is to present revenue and costs net of sales taxes.
F-10
SANGUI BIOTECH INTERNATIONAL, INC.
Notes to Consolidated Financial Statements
June 30, 2019 and 2018
NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Income Taxes
The Company accounts for income taxes in accordance with ASC 740. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be realized or settled. The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred income tax assets are reviewed for recoverability and the Company records a valuation allowance to reduce deferred income tax assets when it is more likely than not that such deferred tax assets will not be realized.
The Company has foreign subsidiaries formed or acquired to conduct or support its business outside the United States. The Company provides for income taxes, net of applicable foreign tax credits, on temporary differences in its investment in foreign subsidiaries which are not considered to be permanently invested outside of the United States.
ASC 740 defines the threshold for recognizing the benefits of tax return positions in the financial statements as “more-likely-than-not” to be sustained by the taxing authority. A tax position that meets the “more-likely-than-not” criterion shall be measured at the largest amount of benefit that is more than 50 percent likely of being realized upon ultimate settlement. ASC 740 also provides guidance on derecognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. ASC 740 applies to all tax positions accounted for under ASC 740. Estimated interest and penalties related to the underpayment of income taxes are recorded as a component of provision for income taxes in the consolidated statements of operations. For the years ended
June 30, 2019 and 2018, the Company did not recognize any such interest or penalties, nor were any interest fees or penalties accrued as of June 30, 2019 and 2018.
Research and Development
Research and development costs are charged to operations as they are incurred. Legal fees and other direct costs incurred in obtaining and protecting patents are also expensed as incurred, due to the uncertainty with
respect to future cash flows resulting from the patents. Research and development costs totaled $27,226 and $23,003 during the fiscal years ended June 30, 2019 and 2018, respectively.
Basic and Diluted Loss per Common Share
Basic loss per common share excludes dilution and is computed by dividing loss available to common stockholders by the weighted average number of common shares outstanding during the period of computation. Diluted loss per share gives effect to all potential dilutive common shares outstanding during the period of compensation. The computation of diluted loss per share does not assume conversion, exercise or contingent exercise of securities that would have an antidilutive effect on earnings. As of June 30, 2019 and 2018, the Company had no potentially dilutive securities that would affect the loss per share if they were to be included in the loss per share.
F-11
SANGUI BIOTECH INTERNATIONAL, INC.
Notes to Consolidated Financial Statements
June 30, 2019 and 2018
NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Comprehensive Loss
Total comprehensive loss represents the net change in stockholders' equity during a period from sources other than transactions with stockholders and as such, includes net loss. For the Company, the components of other comprehensive loss are the changes in the cumulative foreign currency translation adjustments.
Segments of an Enterprise and Related Information
ASC 280, "Disclosures about Segments of an Enterprise and Related Information," establishes standards for the way public companies report information about segments of their business in their annual financial statements and requires them to report selected segment information in their quarterly reports issued to stockholders. It also requires entity-wide disclosures about the products and services an entity provides, the material countries in which it holds assets and reports revenues and its major customers, if any. As of June 30, 2019 and 2018, the Company has one business segment, which is includes the manufacturing and sales of its wound treatment and cosmetic products as well as the licensing of business partners to do the same.
Non-controlling Interests
On June 11, 2008, the Company’s wholly-owned German subsidiary, Sangui Biotech GmbH (“GmbH”) issued 11,400 shares of its previously unissued common stock for cash proceeds of $1,140,759. These shares amount to 10 percent of the GmbH’s total outstanding common stock, which totaled 113,800 shares of as June 30, 2019 and 2018, respectively. The Company accounts for these non-controlling interests pursuant to ASC 810 whereby gains or losses in a subsidiary with a non-controlling interest are allocated to the non-controlling interest based on the ownership percentage of the non-controlling interest, even if that allocation results in a deficit non-controlling interest balance.
As stated above, effective June 18, 2018 GmbH founded Sangui KG as a limited partnership. As a result, the business activity and operations of Sangui KG are included in those of GmbH and are therefore subject to the same non-controlling interests accounting guidance as that of GmbH, adjusted for GmbH's 0.2% non-controlling interest in Sangui KG.
Recent Accounting Pronouncements
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which amends the existing accounting standards for revenue recognition. ASU 2014-09 is based on principles that govern the recognition of revenue at an amount an entity expects to be entitled when products are transferred to customers.
Subsequently, the FASB has issued the following standards related to ASU 2014-09: ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (“ASU 2016-08”); ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing (“ASU 2016-10”); ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients (“ASU 2016-12”); and ASU No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts
F-12
SANGUI BIOTECH INTERNATIONAL, INC.
Notes to Consolidated Financial Statements
June 30, 2019 and 2018
with Customers (“ASU 2016-20”). The Company must adopt ASU 2016-08, ASU 2016-10, ASU 2016-12 and ASU 2016-20 with ASU 2014-09 (collectively, the “new revenue standards”).
NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The new revenue standards may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. The Company has adopted the new revenue standards during the first quarter of fiscal year 2019. The new revenue standard did not materially impact the amount and timing of revenue recognized in the Company’s consolidated financial statements.
Financial Statement Reclassifications
The Company has reclassified certain prior-year account balances in order to comply with current-period classifications and increase comparability.
NOTE 2 – LICENSE AGREEMENT & INVESTMENT IN JOINT VENTURE
Investment in joint venture
During December 2010, the Company’s subsidiary Sangui BioTech GmbH established a joint venture company with SanderStrothmann GmbH, under the name of SastoMed GmbH (“the Joint Venture”). The Company owned 25 percent of the Joint Venture and accounted for its interest in the Joint Venture using the equity method of accounting. The Company invested $8,508 in the Joint Venture during the year ended June 30, 2011. The Company has written the investment down to $0 for its share of the Joint Venture’s losses, amounting to $112,819 during the calendar year ending December 31, 2014.
The Company entered into an agreement which is cancellable by either party, with 14 days written notice. The agreement includes payments to its joint venture partner (SastoMed GmbH) by the Company of $7,760 per month for research and development consulting services. The agreement was terminated September 30, 2017.
On June 9, 2015, the Company entered into a note payable with the Joint Venture for 32,863 Euros. The note payable accrues interest at 4% annum and is due June 30, 2019.
Effective December 31, 2015 the company sold its interest in the SastoMed joint venture. The sale of the joint venture terminated the relationship with SastoMed however, the licensing agreement is still in effect. Accordingly, the note payable of 34,282 Euros, which was previously recorded as a related party note payable, is now reclassified as non-related party note payable. The Company fully repaid principle and accrued interest on July 12, 2018. As of June 30, 2019 and 2018, the principle and accrued interest of the note was $0 and $40,025, respectively.
License Agreement
In December 2010, Sangui GmbH established a joint venture company with SanderStrothmann GmbH of Georgsmarienhuette, Germany. Under the name of SastoMed GmbH this enterprise was in charge of obtaining the CE mark certification authorizing the distribution of the Hemospray wound spray in the member states of the European Union. Sangui GmbH has granted SastoMed GmbH global distribution rights for its Hemospray product.
F-13
SANGUI BIOTECH INTERNATIONAL, INC.
Notes to Consolidated Financial Statements
June 30, 2019 and 2018
NOTE 2 – LICENSE AGREEMENT & INVESTMENT IN JOINT VENTURE (CONTINUED)
The basic terms of the licensing contract agreement are that Sangui GmbH is awarded a fixed licensing fee as a percentage of the external revenues received from sales of the Granulox product (based on SastoMed selling prices). The percentage ranges in the uppermost zone of what is usually granted in the pharmaceutical and medical products industries and thus well above the average licensing rate of 7.5% of sales revenues as calculated by market analysts. In addition, the percentage will be permanently increased by one fourth of the current rate as soon as cumulated sales revenues at SastoMed have exceeded €50,000,000.
Effective June 18, 2018 Sangui GmbH together with Sastomed GmbH founded Sangui Know-How- und Patentverwertungsgesellschaft mbH & Co. KG (“Sangui KG”). Sangui KG is a limited partnership with Sangui GmbH being the general partner with 99.8% ownership, and Sastomed GmbH as the limited partner with 0.2% ownership. On June 22, 2018, Sangui KG has acquired all rights in the license agreement concluded on December 17, 2010 with Sastomed GmbH from Sangui GmbH. Nevertheless, all material content of the existing license agreement remains unchanged even after the transition from Sangui GmbH to Sangui KG. This also applies to the pledge of the European patent, EP 1485120 concerning the Hemo2 spray, to the Sastomed GmbH.
Pursuant to the contracts dated May 2, 2018 and November 11, 2018 between Sangui GmbH respectively Sangui KG and a former contractor Sangui KG grants that contractor a license fee on the license income received by Sangui for his previous services as a co-inventor. The license fee is 10% analogously to the remuneration regulation of the German Law on Employee Inventions (ArbnErfG).
NOTE 3 – PROPERTY AND EQUIPMENT
Property and equipment consists of the following at June 30, 2019 and 2018:
|
June 30,
|
|
2019
|
|
2018
|
Technical and laboratory equipment
|
$
|
-
|
|
$
|
641,326
|
Leasehold improvements
|
|
-
|
|
|
285,189
|
Office equipment and furniture
|
|
-
|
|
|
311,371
|
Total property and equipment
|
|
-
|
|
|
1,237,886
|
Less accumulated depreciation and amortization
|
|
-
|
|
|
(1,237,886)
|
Total property and equipment, net
|
$
|
-
|
|
$
|
-
|
In connection with the closure of the business premises of Sangui GmbH in Witten, all fixed assets were scrapped or sold for proceeds of $1,108.
NOTE 4 – RELATED PARTY TRANSACTIONS
As of June 30, 2019 and 2018, the Company has recorded $28,458 and $19,088, respectively, in accounts payable to related parties for accrued interest from the related party loans payable below.
Related Party Loans Payable
Prior to 2016, the Company entered into a note payable with a Company Director for 100,000 Euros ($113,895 as of June 30, 2019). The note payable accrues interest at 5 percent per annum, is due on June 30, 2019 and is unsecured. As of June 30, 2019, the note has an accrued interest balance of $23,584.
F-14
SANGUI BIOTECH INTERNATIONAL, INC.
Notes to Consolidated Financial Statements
June 30, 2019 and 2018
On December 12, 2017 a Company Director advanced an amount of 25,000 Euros ($28,474 as of June 30, 2019) to the Company. The loan is due on demand, accrues interest annually at 2% and is unsecured. As of June 30, 2019, the note has an accrued interest balance of $882.
On January 19, 2018 a Company Director advanced an amount of 25,000 Euros ($28,474 as of June 30, 2019) to the Company. The loan is due on demand, accrues interest annually at 2% and is unsecured. As of June 30, 2019, the note has an accrued interest balance of $822.
On March 13, 2018 a Company Director advanced an amount of 25,000 Euros ($28,474 as of June 30, 2019) to the Company. The loan is due on demand, accrues interest annually at 2% and is unsecured. As of June 30, 2019, the note has an accrued interest balance of $740.
On July 16, 2018 a Company Director advanced an amount of 25,000 Euros ($28,474 as of June 30, 2019) to the Company. The loan is due on demand, accrues interest annually at 2% and is unsecured. As of June 30, 2019, the note has an accrued interest balance of $545.
On September 10, 2018 a Company Director advanced an amount of 25,000 Euros ($28,474 as of June 30, 2019) to the Company. The loan is due on demand, accrues interest annually at 2% and is unsecured. As of June 30, 2019, the note has an accrued interest balance of $457.
On September 28, 2018 a Company Director advanced an amount of 25,000 Euros ($29,054). The loan is due on demand, accrues no interest and is unsecured. The Company has fully repaid the loan on October 1, 2018.
On October 4, 2018 a Company Director advanced an amount of 25,000 Euros ($28,474 as of June 30, 2019) to the Company. The loan is due on demand, accrues interest annually at 2% and is unsecured. As of June 30, 2019, the note has an accrued interest balance of $420.
On December 27, 2018 a Company Director advanced an amount of 25,000 Euros ($28,474 as of June 30, 2019) to the Company. The loan is due on demand, accrues interest annually at 2% and is unsecured. As of June 30, 2019, the note has an accrued interest balance of $289.
On January 21, 2019 a Company Director advanced an amount of 15,000 Euros ($17,084 as of June 30, 2019) to the Company. The loan is due on demand, accrues interest annually at 2% and is unsecured. As of June 30, 2019, the note has an accrued interest balance of $150.
On February 26, 2019 a Company Director advanced an amount of 25,000 Euros ($28,474as of June 30, 2019) to the Company. The loan is due on demand, accrues interest annually at 2% and is unsecured. As of June 30, 2019, the note has an accrued interest balance of $193.
NOTE 4 – RELATED PARTY TRANSACTIONS (CONTINUED)
On March 20, 2019 a Company Director advanced an amount of 25,000 Euros ($28,474 as of June 30, 2019) to the Company. The loan is due on demand, accrues interest annually at 2% and is unsecured. As of June 30, 2019, the note has an accrued interest balance of $159.
On April 8, 2019 a Company Director advanced an amount of 20,000 Euros ($22,779 as of June 30, 2019) to the Company. The loan is due on demand, accrues interest annually at 2% and is unsecured. As of June 30, 2019, the note has an accrued interest balance of $104.
F-15
SANGUI BIOTECH INTERNATIONAL, INC.
Notes to Consolidated Financial Statements
June 30, 2019 and 2018
On May 9, 2019 a Company Director advanced an amount of 30,000 Euros ($34,168 as of June 30, 2019) to the Company. The loan is due on demand, accrues interest annually at 2% and is unsecured. As of June 30, 2019, the note has an accrued interest balance of $97.
On June 21, 2019 a Company Director advanced an amount of 30,000 Euros ($34,168 as of June 30, 2019) to the Company. The loan is due on demand, accrues interest annually at 2% and is unsecured. As of June 30, 2019, the note has an accrued interest balance of $17.
NOTE 5 – STOCKHOLDERS' EQUITY
Preferred Stock
The Company is authorized to issue 10,000,000 shares of preferred stock. The authorized preferred shares are non-voting and the Board of Directors has not designated any liquidation value or dividend rates. During the financial years ended June 30, 2019 and 2018 no shares of preferred stock were issued or outstanding.
Common Stock
The Company is authorized to issue 250,000,000 shares of common stock with no par value. The holders of the Company's common stock are entitled to one vote for each share held of record on all matters to be voted on by those stockholders.
Common Stock Issuances
During the year ended June 30, 2019 the Company issued 6,500,000 shares of common stock for cash at an average of $0.013 per share, yielding total cash proceeds of $84,491. In addition, the Company issued 844,000 shares of common stock for services valued at $18,652, for an average of $0.0221 per share. The shares issued for services were valued at the trading price of the common stock on the date the shares were issued.
During the year ended June 30, 2018 the Company issued 7,070,000 shares of common stock for cash at an average of $0.0219 per share, yielding total cash proceeds of $154,488.
Stock Options
From time to time, the Company may issue stock options pursuant to various agreements and other contemporary agreements. At June 30, 2019 and 2018, and during the years ended June 30, 2019 and 2018, no options were issued or outstanding.
NOTE 5 – STOCKHOLDERS' EQUITY (CONTINUED)
Treasury Shares
The Company holds 53,756 of its common stock as treasury stock, which is valued at cost of $19,387, at June 30, 2019 and 2018.
NOTE 6 - INCOME TAX PROVISION
The Company’s provision for income taxes was $-0- and $-0- for the years ended June 30, 2019 and 2018 respectively, since the Company incurred net operating losses through June 30, 2019.
F-16
SANGUI BIOTECH INTERNATIONAL, INC.
Notes to Consolidated Financial Statements
June 30, 2019 and 2018
Income tax expense for the years ended June 30, 2019 and 2018 differed from the amounts computed by applying the U.S. federal income tax rate of 21 percent as follows:
|
|
June 30,
|
|
June 30,
|
|
|
2019
|
|
2018
|
Income tax benefit at U.S. federal statutory rates
|
$
|
(67,951)
|
$
|
(42,380)
|
Effect of:
|
|
|
|
|
Change in valuation allowance
|
|
67,951
|
|
42,380
|
Provision for income taxes
|
$
|
-
|
$
|
-
|
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets at June 30, 2019 and 2018 are presented below:
|
|
June 30,
|
|
June 30,
|
|
|
2019
|
|
2018
|
Deferred tax assets
|
|
|
|
|
Net operating losses
|
$
|
(7,851,921)
|
|
(7,789,678)
|
Common stock issued for services
|
|
130,273
|
|
130,273
|
Debt issued for financing costs
|
|
10,500
|
|
10,500
|
Impairment of related parties receivables
|
|
269,541
|
|
269,541
|
Change in derivative liabilities
|
|
5,892
|
|
5,892
|
Gain on sale of assets
|
|
1,456
|
|
1,456
|
Increase (decrease) in valuation allowances
|
|
7,434,259
|
|
7,372,016
|
Net deferred taxes
|
$
|
-
|
$
|
-
|
As of June 30, 2019, the Company had net operating loss carryforwards of approximately $35.4 million which is available to offset future taxable federal, state and foreign income. The federal and state carryforward amounts expire in varying amounts between 2019 and 2030. The foreign net operating loss carryforwards do not have an expiration period.
The Company has evaluated its uncertain tax positions and determined that any required adjustments for unrecognized tax benefits would not have a material impact on the Company’s balance sheet, income statement, or statement of cash flows.
NOTE 6 - INCOME TAX PROVISION (CONTINUED)
The Company’s tax filings for 2012 through 2017 remain subject to examination by tax authorities for federal income tax purposes and by other major taxing jurisdictions to which we are subject. The Company has identified potential penalties for the late filing of reports to taxing authorities. The Company believes that it is more likely than not the penalties will be waived and accordingly has not accrued the penalties in the financial statements.
NOTE 7 – COMMITMENTS AND CONTINGENCIES
Indemnities and Guarantees
F-17
SANGUI BIOTECH INTERNATIONAL, INC.
Notes to Consolidated Financial Statements
June 30, 2019 and 2018
During the normal course of business, the Company has made certain indemnities and guarantees under which it may be required to make payments in relation to certain transactions. These indemnities include certain agreements with the Company's officers, under which the Company may be required to indemnify such person for liabilities arising out of their employment relationship. The duration of these indemnities and guarantees varies and, in certain cases, is indefinite. The majority of these indemnities and guarantees do not provide for any limitation of the maximum potential future payments the Company could be obligated to make. Historically, the Company has not been obligated to make significant payments for these obligations. The Company has recorded a reserve for indemnities and guarantees of $-0- as of June 30, 2019 and 2018.
Leases
Effective from June 30, 2019 the Company has closed the site in Witten and relocated its headquarters to Hamburg.The Company leases office facilities from an unrelated third party at Euro 685 per month. The office lease contract is maintained on a month-to-month basis.
The Company also leases an automobile under an operating lease. The lease provides for a lease payment of 538 Euros per month beginning June 2018 expiring May 2020.
License Agreement
As part of an out-of-court settlement of a lawsuit between Sastomed GmbH and a former employee of Sangui regarding the recognition of the inventor's property, Sangui also granted a issuing of 2,238,095 of its shares to the employee in addition to a license fee on the revenues generated by the license agreement with Sastomed (see Note 2), The subject of the settlement was also the assumption of all legal costs by this employee. Under the agreement between Sangui and Sastomed, Sangui is entitled to half of this reimbursement. The net burden of the shares issued ($ 38,048) and Sangui's portion in the process cost reimbursement ($10,868) amounts to USD 27,180 and was reported under accrued payables as of June 30, 2019.
NOTE 8 – STOCK-BASED COMPENSATION
The Company has applied the disclosure provisions of ASC 718 for the years ended June 30, 2019 and 2018. There were no common shares or stock options outstanding, issued or granted to employees during these reporting periods.
On April 28, 2004, the Company adopted the 2004 Employee Stock Incentive Plan (“the Plan”). Under the terms of this plan the Board was authorized to issue up to 1,000,000 shares of common stock to certain eligible employees of the Company or its subsidiaries. All of these shares were issued pursuant to the plan prior to June 30, 2007. On September 22, 2008 the Company adopted the 2008 Amended and Restated Long-Term Equity Incentive Plan, whereby the Board was authorized to issue up to 10,000,000 shares of common stock (including incentive stock options) to certain eligible employees, directors, and/or consultants of the Company or its subsidiaries. During the years ended June 30, 2019 and 2018, respectively, the Company issued no shares pursuant to this Plan. All shares available under the 2008 Long-Term Equity Incentive Plan had been issued as of June 30, 2019.
NOTE 9 – NOTE PAYABLE
On June 9, 2015, the Company entered into a note payable with the Joint Venture for 32,863 Euros (see note 2). The note payable accrues interest at 4% annum and is due June 30, 2019. Accordingly, the note payable and accrued interest of 34,282 Euros, which was previously recorded as a related party note
F-18
SANGUI BIOTECH INTERNATIONAL, INC.
Notes to Consolidated Financial Statements
June 30, 2019 and 2018
payable, is now reclassified as non-related party note payable. The Company fully repaid principle and accrued interest on July 12, 2018. The principal and accrued interest of the note at June 30, 2019 and 2018 was $0 and $40,025, respectively. The Company fully repaid principle and accrued interest on July 17, 2018.
NOTE 10 – SUBSEQUENT EVENTS
Subsequent to the year ended June 30, 2019, the Company issued 2,238,095 shares of common stock for service at $38,048, for an average of $0.017 per share.
On September 17, 2019 a Company Director advanced an amount of 20,000 Euros ($22,779; converted with exchange rate of June 30, 2019) to the Company. The loan is due on demand, accrues interest annually at 2% and is unsecured.
On October 4, 2019 a Company Director advanced an amount of 20,000 Euros ($22,779; converted with exchange rate of June 30, 2019) to the Company. The loan is due on demand, accrues interest annually at 2% and is unsecured.
F-19
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Identity of directors and executive officers
The following table sets forth the names and ages of the current directors and executive officers of Sangui BioTech International, Inc., their principal offices and positions and the date each such person became a director or executive officer. Our executive officers are elected annually by the Board of Directors. Our directors serve one-year terms or until their successors are elected. The executive officers serve terms of one year or until their death, resignation or removal by the Board of Directors. There are no family relationships between any of the directors and executive officers. In addition, there was no arrangement or understanding between any executive officer and any other person pursuant to which any person was selected as an executive officer.
The directors as of June 30, 2019 were as follows
Name
|
Age
|
Position with the Company
|
Director Since
|
Hubertus Schmelz
|
63
|
Non-Executive Director
|
Dec 18, 2008
|
|
|
|
|
Thomas Striepe
|
57
|
CEO, CFO & Director
|
Feb 7, 2005
|
None of the Directors are related to one another. None of the independent Directors has a business or professional relationship with SGBI and/or the other Directors and substantial shareholders of SGBI, except as follows:
Since January 2004, the SanguiBio Tech GmbH,a subsidiary of the Company has an agreement with Hubertus Schmelz under which the latter serves as a Managing Director on an hourly basis.
The day-to-day operations of SGBI are entrusted to the Executive Directors of SGBI.
The business and working experience of the Directors and key Executive Officers of SGBI as of June 30, 2019, are set out below:
THOMAS STRIEPE, is Vice President Accounting and Controlling at Treukonzept Finance GmbH, Hamburg, Germany, a financial services company. Prior to joining Treukonzept Finance GmbH in 2004, he held management positions in the accounting departments of several German and international corporations. He holds an MBA from Hamburg University.
HUBERTUS SCHMELZ, is the General Manager of SanguiBioTech GmbH. He was appointed to this position effective December 16, 2003. Prior to joining Sangui he acted as a legal and business consultant. During the last decade prior to 2000 he was entrusted with numerous business development projects by the German Treuhandanstalt in restructuring the economy of Eastern Germany. After having studied law he acted as legal counsel in several positions.
There are no arrangements or understandings between any of the directors or executive officers, or any other person or person pursuant to which they were selected as directors and/or officers.
Significant Employees
All but one individual serving as scientific or administrative staff have been engaged on the basis of consulting agreements. They include non-disclosure and exclusivity sections and secure the ongoing
35
cooperation. Key personnel the expertise and abilities of which would be difficult to replace, includes Dr. Harald Poetzschke.
Directorships
No Director of the Company or person nominated or chosen to become a Director holds any other directorship in any company with a class of securities registered pursuant to section 12 of the Exchange Act or subject to the requirements of section 15(d) of such Act or any other company registered as an investment company under the Investment Company Act of 1940.
Family Relationships
There are no family relationships between any of the directors, officers or employees of the Company.
Involvement in Certain Legal Proceedings
During the past ten years, no present director, executive officer or person nominated to become a director or an executive officer of the Company has been or filed:
1.A petition under the Federal bankruptcy laws or any state insolvency law was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing;
2.Such person was convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);
3.Such person was the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities:
i.Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;
ii.Engaging in any type of business practice; or
iii.Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws;
4.Such person was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in
36
paragraph (f)(3)(i) of this section, or to be associated with persons engaged in any such activity;
5.Such person was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;
6.Such person was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;
7.Such person was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:
i.Any Federal or State securities or commodities law or regulation; or
ii.Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or
iii.Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
8.Such person was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.
Promoters and Control Persons
None.
37
Audit Committee and Audit Committee Financial Expert
The Company has no separately designated standing audit committee or another committee performing similar functions. The Board of Directors acts as the audit committee. None of the directors qualifies as an Audit Committee Financial Expert.
Material Changes to the Method by Which the Shareholders May Recommend Nominees to the Board of Directors
None.
Section 16 (a) Beneficial Ownership Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's executive officers, directors and persons who own more than ten percent of the Company's Common Stock, to file initial reports of beneficial ownership on Form 3, changes in beneficial ownership on Form 4 and an annual statement of beneficial ownership on Form 5, with the SEC. Such executive officers, directors and greater than ten percent shareholders are required by SEC rules to furnish the Company with copies of all such forms that they have filed.
Based solely upon a review of copies of the reports filed, we believe that during the year ended June 30, 2019, all executive officers, directors and persons who own more than ten percent of the Company's Common Stock are in compliance with such regulations.
Code of Ethics
As of the date of this report the Company has not adopted a code of ethics.
Audit Committee and Audit Committee Financial Expert
Our board of directors is comprised of two directors, none of which is an outside independent director, and as of the date hereof we have not established an audit committee. Accordingly, our board of directors presently performs the functions that would customarily be undertaken by an audit committee.
ITEM 11.EXECUTIVE COMPENSATION AND OTHER INFORMATION
Summary Compensation Table
The table below summarizes all compensation awarded to, earned by, or paid to our Officers for all services rendered in all capacities to us for the fiscal periods indicated.
Name and Principal
Position
|
Year
|
Salary
($) (1)
|
Bonus
($)
|
Stock Awards
($)
|
Option Awards
($)
|
Total
($)
|
|
|
|
|
|
|
|
Thomas Striepe
|
2019
|
68,454 (3)
|
-
|
-
|
-
|
68,454
|
-Chief Executive Officer
|
2018
|
19,253
|
-
|
-
|
-
|
19,253
|
-Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hubertus Schmelz (2)
|
2019
|
-
|
-
|
-
|
-
|
-
|
|
2018
|
-
|
-
|
-
|
-
|
-
|
38
(1) All figures are expressed in United States Dollars (“USD”); for the German management personnel, the EURO or DM was converted to USD using the average exchange rate of the period July 1 through June 30 for each year.
(2) Hubertus Schmelz serves as the General Manager of the Company’s 90% owned subsidiary, Sangui Biotech, GMBH.
(3) See Item 13 below, Certain Relationships and Related Transactions, and Director Independence.
Narrative Disclosure to Summary Compensation Table
There are no other employment contracts, compensatory plans or arrangements, including payments to be received from the Company with respect to any executive officer, that would result in payments to such person because of his or her resignation, retirement or other termination of employment with the Company, or its subsidiaries, any change in control, or a change in the person’s responsibilities following a change in control of the Company.
There are no agreements or understandings for any executive officer to resign at the request of another person. None of our executive officers acts or will act on behalf of or at the direction of any other person.
Outstanding Equity Awards at Fiscal Year-End Table and Narrative
The Company had no outstanding equity awards at fiscal year-end.
Compensation of Directors
There was no compensation paid to any director who was a Named Executive Officer during the fiscal year ended June 30, 2019.
Other Contracts
None.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Securities Authorized for Issuance under Equity Compensation Plans
No securities have been authorized for issuance as part of any Equity Compensation Plan.
39
Security Ownership of Certain Beneficial Owners
The following table sets forth, as of June 30, 2019, certain information concerning ownership of shares of Common Stock by any person who is the beneficial owner of more than 5% of the issued and outstanding Common Stock of the Company.
|
|
|
|
Title of
Class
|
Name and
Address of
Beneficial
Owner
|
Amount and
Nature of
Beneficial
Owner
|
Percent of
Class
|
|
|
|
|
Common Stock
|
Wolfgang Jensen
Am Berge 9
21376 Eyendorf
Germany
|
19,454,000
|
9.8%
|
|
|
|
|
Common Stock
|
Hubertus Schmelz
Neuer Wall 54
20354 Hamburg
Germany
|
18,806,481
|
9.4%
|
|
|
|
|
Common Stock
|
SastoMed GmbH
Brüsseler Straße 2
49124 Georgsmarienhütte
Germany
|
8,406,837
|
4.2%
|
Security Ownership of Management
The following table sets forth, as of June 30, 2019, certain information concerning ownership of shares of Common Stock by each director of the Company and by all executive officers and directors of the Company as a group:
|
|
|
|
Title of
Class
|
Name and
Address of
Beneficial
Owner
|
Amount and
Nature of
Beneficial
Owner(1)
|
Percent of
Class
|
|
|
|
|
Common Stock
|
Thomas Striepe
Neuer Wall 54
20354 Hamburg
Germany
|
1,350,000
|
0.7%
|
|
|
|
|
Common Stock
|
Hubertus Schmelz
Neuer Wall 54
20354 Hamburg
Germany
|
18,806,481
|
9.4%
|
|
|
|
|
Common Stock
|
All Officers and Directors as a Group (2 persons)
|
20,156,481
|
10.1%
|
Percentages are calculated on the basis of 199,295,503 shares issued on June 30, 2019.
40
Changes in Control
To the best of the Company’s knowledge there are no present arrangements or pledges of the Company's securities, which may result in a change in control of the Company.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Transactions with related persons
Except as otherwise disclosed below, no Director, substantial shareholder or Executive Officer of SGBI was or is an interested party in any transaction undertaken by SGBI or its subsidiary within the last two years.
The Company has an agreement with the Company's former President and CEO, pursuant to which he is entitled to three percent royalties of gross revenues earned with any product based on his inventions. No royalties were outstanding, paid or earned in fiscal years 2019 and 2018.
As of June 30, 2019 and 2018, the Company has recorded $2,715 and $2,779, respectively, in accounts payable to related parties for services performed by Company officers and directors.
Related Party Loans Payable
On March 6, 2015, the Company entered into a note payable with a family member of a Company Director for 100,000 Euros. The note is adapted period to period. On May 31, 2016 the note payable and accrued interest were transferred to a Company Director. The note payable accrues interest at 5 percent per annum, is due on June 30, 2019 and is unsecured. On December 12, 2017, January 19, 2018, March 13, 2018, July 16 ,2018, September 10, 2018, October 4, 2018, December 27, 2018, January 21, 2019, February 26, 2019, March 20, 2019, April 8, 2019, May 9, 2019 and June 21, 2019 the Director granted thirteen additional loans totaling 320,000 Euros to the Company. The interest rate is uniformly 2.0% per annum. They are unsecured. The balance of both note and loan principal and interest is $ 506,815 at June 30, 2019.
Consulting Contract with Thomas Striepe.
The Company signed a consulting contract with Thomas Striepe, covering certain administrations services on April 01, 2018.
Parents
Not applicable.
Promoters and Control Persons
Not applicable.
41
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Independent Registered Public Accountants
The Company’s independent accountants for the fiscal year ended June 30, 2019 and 2018 were Sadler, Gibb & Associates, LLC.
(a)Audit Fees. For the fiscal year ended 2019, the aggregate fees billed by Sadler, Gibb & Associates for services rendered for the audits of the annual financial statements and the review of the financial statements included in the quarterly reports on Form 10-Q or services provided in connection with the statutory and regulatory filings or engagements for those fiscal years were $25,500 as summarized below:
(in $)
|
2019
|
2018
|
Audit Fees
|
25,500
|
25,500
|
Audit related fees
|
-0-
|
-0-
|
Tax fees
|
-0-
|
-0-
|
Other fees
|
-0-
|
-0-
|
(b)Audit-Related Fees. For the fiscal year ended 2019 and 2018fees billed by Sadler, Gibb & Associates were an aggregate $0 for any audit-related services other than as set forth in paragraph (a) above.
(c)Tax Fees. For the fiscal years ended 2019 and 2018 Sadler, Gibb & Associates did not bill any fees for tax compliance services. The auditors did not provide tax-planning advice for the fiscal years ended 2019 and 2018.
(d)All Other Fees. None.
42