NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED JUNE 30, 2020 AND 2019
NOTE 1 – Organization and
Going Concern
Organization
Global WholeHealth Partners Corporation was
incorporated on March 7, 2013 in the State of Nevada under the name Texas Jack Oil and Gas Corp. On May 9, 2019, the Company amended
its Articles of Incorporation to effect a change of name to Global WholeHealth Partners Corporation to align the company name with
its focus on health care related development and products. The Company’s ticker symbol changed to GWHP.
The Company was originally organized for the
purpose of exploration of Oil and Gas. However, the Company was unable to establish an oil and gas concern and was abandoned in
2016. On February 27, 2019, the Clark County District Court of Nevada appointed Barbara Bauman as custodian to the Company. The
custodian reestablished the Company in good standing.
On May 9, 2019, the Board reverse split (1-for-500)
the outstanding Common Shares of 58,172,000 to 116,358 shares.
May 23, 2019, the Company and LionsGate Funding
Group LLC (“LionsGate”), owner of a majority of the Company’s outstanding common stock as of May 23, 2019, entered
into a Stock Sale and Purchase Agreement (the “SPA”) which closed on June 27, 2019. Pursuant the SPA, the Company issued
56,000,000 shares of common stock to LionsGate in exchange for 100% of their interests in Global WholeHealth Partners Corp., a
private Wyoming corporation incorporated on April 9, 2019 (“Global Private”). Global Private has contacts with suppliers
and contract manufacturers in the In vitro diagnostic industry, with rights to sell rapid diagnostic tests, such as the following
6 minute rapid whole blood Ebola Test, 6 minute whole blood Zika test, 8 minute whole blood rapid TB test and 75 plus other tests
more than 40 which are FDA approved. Due to the common control of the Company and Global Private, pursuant to ASC 805-50-25, “Transactions
Between Entities Under Common Control”, the SPA was accounted for as a transfer of the carrying amounts of assets and liabilities
under the predecessor value method of accounting. Financial statement presentation under the predecessor values method of accounting
as a result of a business combination between entities under common control requires the receiving entity (i.e., the Company) to
report the results of operations as if both entities had been combined as of the beginning of the periods presented. The consolidated
financial statements include both entities’ full results since the inception of Global Private.
Going Concern
The Company’s consolidated financial
statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern
which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not
yet established an ongoing source of revenues sufficient to cover its operating costs to allow it to continue as a going concern.
As shown in the accompanying financial statements, the Company incurred negative operating cash flows of $685,136 for the year
ended June 30, 2020 and has an accumulated deficit of $4,748,609 from inception through June 30, 2020. The ability of the
Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it
becomes profitable.
In view of these conditions, the ability
of the Company to continue as a going concern is in doubt and dependent upon achieving a profitable level of operations and
on the ability of the Company to obtain necessary financing to fund ongoing operations. Historically, the Company has relied
upon internally generated funds, and funds from the sale of stock, issuance of promissory notes and loans from its
shareholders and private investors to finance its operations and growth. Management is planning to raise necessary additional
funds for working capital through loans and/or additional sales of its common stock. However, there is no assurance that the
Company will be successful in raising additional capital or that such additional funds will be available on acceptable terms,
if at all. Should the Company be unable to raise this amount of capital its operating plans will be limited to the amount of
capital that it can access. These consolidated financial statements do not give effect to any adjustments which will be
necessary should the Company be unable to continue as a going concern and therefore be required to realize its assets and
discharge its liabilities in other than the normal course of business and at amounts different from those reflected in the
accompanying consolidated financial statements.
NOTE 2 – Summary of Significant
Accounting Policies
Principles of Consolidation
Global WholeHealth Partners Corp, a private
Wyoming corporation was incorporated on April 9, 2019 to receive private investor funds and aggregate certain in vitro diagnostic
assets.
These consolidated financial statements presented
are those of Global WholeHealth Partners Corporation and its wholly owned subsidiary, Global Private. All significant intercompany
balances and transactions have been eliminated.
Accounting estimates
The preparation of consolidated financial statements
in conformity with U.S. generally accepted accounting principles (“GAAP”) 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual
results could differ significantly from those estimates.
Cash and cash equivalents
The Company considers all highly liquid instruments
purchased with an original maturity of three months or less and money market accounts to be cash equivalents.
Inventory
Inventory is stated at the lower of cost or
market. Inventory cost is determined on a weighted average basis in accordance with ASC 330-10-30-9. Provisions are made to reduce
slow-moving, obsolete, or unusable inventories to their estimated useful or scrap values. When necessary, the Company establishes
reserves for this purpose.
Revenue Recognition
The Company recognizes revenue from operations
through the sale of products. Product revenue is comprised of the sale of consumables. To date, all products sold have been fully
paid for in advance of shipment.
Revenue is recognized when control of products
and services is transferred to the customer in an amount that reflects the consideration that the Company expects to receive from
the customer in exchange for those products and services. This process involves identifying the contract with the customer, determining
the performance obligations in the contract, determining the contract price, allocating the contract price to the distinct performance
obligations in the contract, if applicable, and recognizing revenue when the performance obligations have been satisfied. A performance
obligation is considered distinct from other obligations in a contract when it provides a benefit to the customer either on its
own or together with other resources that are readily available to the customer and is separately identified in the contract. The
Company considers a performance obligation satisfied once it has transferred control of a good or service to the customer, meaning
the customer has the ability to use and obtain the benefit of the good or service. The Company recognizes revenue for satisfied
performance obligations only when it determines there are no uncertainties regarding payment terms or transfer of control.
Revenue from product sales is generally recognized
upon shipment to the end customer, which is when control of the product is deemed to be transferred. Invoicing typically occurs
prior to shipment and the term between invoicing and when payment is due is not significant.
Revenue is recorded net of discounts, and sales
taxes collected on behalf of governmental authorities. Sales commissions are recorded as selling and marketing expenses when incurred.
The Company records any payments received from
customers prior to the Company fulfilling its performance obligation(s) as deferred revenue.
Concentration of Credit Risk and Off-Balance Sheet Risk
The Company has no significant off-balance-sheet
risk such as foreign exchange contracts, option contracts, or other foreign hedging arrangements. Financial instruments that potentially
subject the Company to concentrations of credit risk are principally cash. The Company’s policy is to place its cash in high
quality financial institutions. The Company does not believe significant credit risk exists with respect to these institutions.
The Company had three customers that represented 87.6% of revenue
(59.6%, 17.4% and 10.6%) for the year ended June 30, 2020
Leases
The Company recognizes leases with a term of
greater than a year on the balance sheet by recording right-of-use assets and lease liabilities. Leases can be classified as either
operating leases or finance leases. Operating leases will result in straight-line lease expense, while finance leases will result
in front-loaded expense. The Company’s lease consists of an operating lease for office space. The Company does not recognize
a lease liability or right-of-use asset on the balance sheet for short-term leases. Instead, the Company recognizes short-term
lease payments as an expense on a straight-line basis over the lease term. A short-term lease is defined as a lease that, at the
commencement date, has a lease term of 12 months or less and does not include an option to purchase the underlying asset that the
lessee is reasonably certain to exercise.
Derivatives
All derivatives are recorded at fair value
on the balance sheet. The Company has determined fair values using market based pricing models incorporating readily available
prices and or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable
(supported by little or no market activity) that requires judgment and estimates.
Fair Value of Financial Instruments
The Company follows the guidance of FASB ASC
820 and ASC 825 for disclosure and measurement of the fair value of its financial instruments. FASB ASC 820 establishes a framework
for measuring fair value under GAAP and expands disclosures about fair value measurements. To increase consistency and comparability
in fair value measurements and related disclosures, ASC 820 establishes a fair value hierarchy which prioritizes the inputs to
valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority
to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.
The three (3) levels of fair value hierarchy
defined by ASC 820 are described below:
|
Level 1:
|
Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
|
|
Level 2:
|
Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
|
|
Level 3:
|
Pricing inputs that are generally observable inputs and not corroborated by market data.
|
The carrying amount of the Company’s
financial assets and liabilities, such as cash, prepaid expenses, accounts payable and notes payable approximate their fair value
due to their short-term nature.
Income Taxes
The Company accounts for income taxes using
the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized for the
future tax consequences attributed to differences between the financial statement carrying amounts of existing assets and liabilities
and their respective tax bases and tax credits and loss carry-forwards. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in which those temporary differences and carry-forwards are
expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in
income in the period that includes the enactment date. A valuation allowance is established when necessary to reduce deferred tax
assets to amounts expected to be realized. The Company reports a liability for unrecognized tax benefits resulting from uncertain
income tax positions, if any, taken or expected to be taken in an income tax return. Estimated interest and penalties are recorded
as a component of interest expense or other expense, respectively.
Related-Party Transactions
Parties are considered to be related to the
Company if the parties directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common
control with the Company. Related parties also include principal stockholders of the Company, its management, members of the immediate
families of principal stockholders of the Company and its management and other parties with which the Company may deal where one
party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting
parties might be prevented from fully pursuing its own separate interests. The Company discloses all material related-party transactions.
All transactions shall be recorded at fair value of the goods or services exchanged. Property purchased from a related party is
recorded at the cost to the related party and any payment to or on behalf of the related party in excess of the cost is reflected
as compensation or distribution to related parties depending on the transaction.
Net Income (Loss) Per Share
Basic net loss per common share attributable
to common stockholders is calculated by dividing the net loss attributable to common stockholders by the weighted-average number
of common shares outstanding for the period, without consideration for common stock equivalents. Diluted net loss per common share
attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average
number of common share equivalents outstanding for the period determined using the treasury-stock method. Dilutive common stock
equivalents are comprised of convertible notes. For all periods presented, there is no difference in the number of shares used
to calculate basic and diluted shares outstanding due to the Company’s net loss position.
The potentially dilutive securities that would
be anti-dilutive due to the Company’s net loss are not included in the calculation of diluted net loss per share attributable
to common stockholders. The anti-dilutive securities are as follows (in common stock equivalent shares):
|
|
Year Ended
June 30, 2020
|
|
Year Ended
June 30, 2019
|
Convertible promissory notes
|
|
|
10,727
|
|
|
|
—
|
|
Research and Development
Research and development costs primarily consist
of research contracts for the advancement of product development. The Company expenses all research and development costs in the
period incurred.
Stock-Based Compensation
The Company accounts for stock-based compensation
in accordance with Accounting Standards Codification (“ASC”) 718, Stock Based Compensation. ASC 718 requires
all stock-based payments to directors, employees and consultants, including grants of stock options, to be recognized in the consolidated
statements of operations based on their fair values.
Recent Accounting Pronouncements
Any reference in these notes to applicable
accounting guidance is meant to refer to the authoritative non-governmental US GAAP as found in the Financial Accounting Standards
Board's Accounting Standards Codification.
In February 2016, the Financial Accounting
Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-02, “Leases” (Topic 842), whereby lessees will
be required to recognize for all leases at the commencement date a lease liability, which is a lessee’s obligation to make
lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents
the lessee’s right to use, or control the use of, a specified asset for the lease term. A modified retrospective transition
approach is required, applying the new standard to all leases existing at the date of initial application. An entity may choose
to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements
as its date of initial application. If an entity chooses the second option, the transition requirements for existing leases also
apply to leases entered into between the date of initial application and the effective date. The entity must also recast its comparative
period financial statement and provide the disclosures required by the new standard for the comparative periods. The Company adopted
the new standard on July 1, 2019. The adoption of this standard had no impact on the Company’s consolidated financial statements
due to the Company’s leases being for periods of one year or less.
In July 2017, the FASB issued ASU No. 2017-11, Earnings
Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815). The amendments
in Part I of this Update change the classification analysis of certain equity-linked financial instruments (or embedded features)
with down round features. When determining whether certain financial instruments should be classified as liabilities or equity
instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to
an entity’s own stock. The amendments also clarify existing disclosure requirements for equity-classified instruments. As
a result, a free-standing equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as
a derivative liability at fair value as a result of the existence of a down round feature. For freestanding equity classified financial
instruments, the amendments require entities that present earnings per share (EPS) in accordance with Topic 260 to recognize the
effect of the down round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available
to common shareholders in basic EPS. Convertible instruments with embedded conversion options that have down round features are
now subject to the specialized guidance for contingent beneficial conversion features (in Subtopic 470-20, Debt—Debt with
Conversion and Other Options), including related EPS guidance (in Topic 260). The amendments in Part II of this Update recharacterize
the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Codification, to a
scope exception. Those amendments do not have a material accounting effect. For public business entities, the amendments in Part
I of this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15,
2018. Early adoption is permitted for all entities, including adoption in an interim period. If an entity early adopts the amendments
in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period.
The Company adopted ASU 2017-11 effective July 1, 2019. The adoption of this standard had no impact on the Company’s consolidated
financial statements.
In June 2018, the FASB issued ASU 2018-07, Compensation-Stock
Compensation (Topic 718): Improvements to Non-employee Share-Based Payment Accounting, which simplifies the accounting for
share-based payments made to non-employees so the accounting for such payments is substantially the same as those made to employees.
Under this ASU, share based awards to non-employees will be measured at fair value on the grant date of the awards, entities will
need to assess the probability of satisfying performance conditions if any are present, and awards will continue to be classified
according to ASC 718 upon vesting which eliminates the need to reassess classification upon vesting, consistent with awards granted
to employees. The Company adopted ASU 2018-07 effective July 1, 2019. The adoption of this standard had no impact on the Company’s
consolidated financial statements.
In December 2019, the FASB issued ASU 2019-12,
“Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes,” which is intended to simplify various
aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and
also clarifies and amends existing guidance to improve consistent application. This guidance is effective for fiscal years, and
interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. We do not expect the
adoption of ASU 2019-12 to have a material impact on our consolidated financial statements.
We review new accounting standards as
issued. Although some of these accounting standards issued or effective after the end of our previous fiscal year may be
applicable to us, we have not identified any standards that we believe merit discussion. We believe that none of the new
standards will have a significant impact on our consolidated financial statements.
NOTE 3 – Stockholder’s
Equity
Preferred Stock
The Company has Preferred stock: $0.001 par
value; 10,000,000 shares authorized with no shares issued and outstanding.
Common Stock
The Company has 400,000,000 shares of Common
Stock authorized of which 59,966,358 and 56,116,358 shares were issued and outstanding as of March 31, 2020 and June 30, 2019,
respectively. During the year ended August 31, 2020, the number of shares increased by 3,850,000 as a result of the Company selling
2,000,000 shares at $0.01 per share to LionsGate in exchange for cash of $20,000 and on the May 8, 2020, issuance 1,850,000 shares
valued at $2.00 as a bonus for prior service, including related party issuances of a) 500,000 shares to Charles Strongo, CEO; and
b) 750,000 shares to LionsGate.
NOTE 4 – Related Party Transactions
During the year ended June 30, 2020, the Company
received $20,000 upon the sale of 2,000,000 shares of common stock to LionsGate for $0.01 per share.
From time-to-time the Company receives shareholder
advances to cover operating costs. During the year ended June 30, 2020, LionsGate provided advances totaling $564,715 which was
used to pay professional fees of $57,000, general costs of $29,965 and research studies for the development of CoVid-19 related
tests of $477,750. On March 30, 2020, LionsGate forgave $443,750. See Related Party Note below for additional information.
The Company utilizes the R&D capabilities
of Pan Probe Biotech to perform studies in validation of the Company’s CoVid-19 tests. Dr. Shujie Cui is the Company’s
Chief Science Officer and 100% owner of Pan Probe. During fiscal 2020 the Company paid a total of $511,056 to Pan Probe, including
$465,250 directly from LionsGate as part of the amounts described above
Related Party Note
On March 29, 2020, the Company issued a Promissory
Note (the “Note”) to LionsGate in the amount of $506,625 which was equivalent to the advances made to the Company
up to March 29, 2020. On March 30, 2020, LionsGate decided it would be in the best interests of the Company to forgive the portion
of the Note related to testing costs which totaled $443,750 as of March 30, 2020. As a result, the Company recognized an increase
to additional paid-in capital of $443,750 leaving a Note balance of $62,875. During the three months ended June 30, 2020, LionsGate
made payments totaling $58,090 on behalf of the Company with said funds added to the balance of the Note bringing the note balance
to $120,965. The Note was amended on June 30, 2020 (“Note Amendment”). Pursuant to the Note and Note Amendment,
the terms provide for total funding of up to $585,000 or an additional $78,375 as of March 30, 2020 or an additional $20,285 as
of June 30, 2020. The Note bears interest at the rate of 5% per annum and the principal and interest is due and payable in full
on June 30, 2021 (the “Maturity Date”). If not paid by the Maturity Date, a 5% penalty will be added to the
Note and the term will extend for an additional 90 days.
During the year ended June 30, 2020, the Company
recognized $1,316 of interest expense related to the Note.
The Note was issued by the Company under the
exemption from registration afforded by Section 4(a)(2) of the Securities Act, as amended and/or Regulation D promulgated thereunder,
as the securities were issued to accredited investors, without a view to distribution, and were not issued through any general
solicitation or advertisement.
NOTE 5 – Convertible Promissory
Notes
On April 18, 2020, the Company issued five separate unsecured convertible
promissory notes in exchange for $95,000 (the "Convertible Notes"). Each Convertible Note contains the same terms and
conditions. The Convertible Notes bear interest of 8%, mature in six months on October 17, 2020 and are convertible at any time
into shares of restricted common stock at a conversion price of $9.00 per share. The debt discount attributable to the fair value
of the beneficial conversion feature amounted to $42,224 for the Vista Note and is being accreted over the term of the Vista Note.
During the year ended June 30, 2020, the Company
recognized $1,541 of interest expense and $17,075 of accretion related to the Convertible Notes.
NOTE 6 – Income Taxes
Deferred income taxes reflect the net tax effects
of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts
used for income tax purposes. Significant components of the Company’s deferred tax assets at June 30, 2020 and 2019 are as
follows:
|
|
|
2020
|
|
|
|
2019
|
|
Deferred tax assets:
|
|
|
|
|
|
|
|
|
Net operating loss carryforwards
|
|
$
|
166,545
|
|
|
$
|
42,336
|
|
Statutory tax rate
|
|
|
21
|
%
|
|
|
21
|
%
|
Total deferred tax assets
|
|
|
34,974
|
|
|
|
8,891
|
|
Less: valuation allowance
|
|
|
(34,974
|
)
|
|
|
(8,891
|
)
|
Net deferred tax asset
|
|
$
|
—
|
|
|
$
|
—
|
|
A reconciliation between the amount of income
tax benefit determined by applying the applicable U.S. statutory income tax rate to pre-tax loss for the years ended June 30, 2020
and 2019 is as follows:
|
|
2020
|
|
2019
|
Federal Statutory Rate
|
|
$
|
899,961
|
|
|
$
|
6,482
|
|
Nondeductible expenses
|
|
|
(873,877
|
)
|
|
|
(5,082
|
)
|
Change in allowance on deferred tax assets
|
|
|
26,084
|
|
|
|
1,400
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
The net increase in the valuation allowance
for deferred tax assets was $26,084 and $1,400 for the years ended June 30, 2020 and 2019, respectively. In assessing the realizability
of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets
will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income
during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred
tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Due to the uncertainty
of realizing the deferred tax asset, management has recorded a valuation allowance against the entire deferred tax asset.
For federal income tax purposes, the Company
has net U.S. operating loss carry forwards at June 30, 2020 available to offset future federal taxable income, if any, of $166,545.
The utilization of the tax net operating loss carry forwards may be limited due to ownership changes that have occurred as a result
of sales of common stock.
The fiscal years 2017 through 2019 remain open
to examination by federal authorities and other jurisdictions in which the Company operates.
NOTE 7 – Subsequent Events
Management has reviewed material events subsequent
of the period ended June 30, 2020 and prior to the filing of our consolidated financial statements in accordance with FASB ASC
855 “Subsequent Events”.
On July 13, 2020 and August 3, 2020, the Company
and Geneva Roth Remark Holdings, Inc. ("Geneva") entered into separate and identical Securities Purchase Agreements
(the "Geneva SPAs") Pursuant to the Geneva SPAs, Geneva and the Company entered into separate and identical Convertible
Promissory Notes also dated as of July 13, 2020 and August 3, 2020 for principal amounts of $63,000 and $55,000, respectively (the
"Geneva CPNs"). Pursunt to the terms of the Geneva CPNs, the Company received net proceeds of $60,000 and $52,000
(each notes proceeds were net of $3,000 in legal fees). The Geneva CPNs mature in one year, accrue interest of 10% and, after 180
days, are convertible into shares of common stock any time at a conversion price equal to 58% of the lowest trading price during
the twenty trading day period ending on the latest complete trading day prior to the conversion date. Geneva has agreed to restrict
its ability to convert the Geneva CPNs and receive shares of common stock such that the number of shares of common stock held by
them in the aggregate and their affiliates after such conversion or exercise does not exceed 4.99% of the then issued and outstanding
shares of common stock. The Geneva CPNs represent a debt obligation arising other than in the ordinary course of business, which
constitutes a direct financial obligation of the Company. The Geneva CPNs also provide for penalties and rescission rights if the
Company does not deliver shares of our common stock upon conversion within the required timeframes. In the event of default, the
note interest rate increases to 22%.
On July 22, 2020, Company entered into a Common
Stock Purchase Agreement (the “EMC2 SPA”) and a Registration Rights Agreement with EMC2 Capital, LLC (“EMC2
Capital”) pursuant to which EMC2 Capital agreed to invest up to One Hundred Million Dollars ($100,000,000) to purchase
the Company’s common stock, at a purchase price as defined in the Common Stock Purchase Agreement. The Registration Rights
Agreement was an inducement to EMC2 Capital to execute and deliver the Common Stock Purchase Agreement, whereby the Company agreed
to provide certain registration rights under the Securities Act of 1933, as amended, and the rules and regulations thereunder,
and applicable state securities laws, with respect to the shares of common stock issuable for EMC2 Capital’s investment pursuant
to the Common Stock Purchase Agreement. No shares have been sold to and purchased by EMC2 Capital as of the date of this report.
Concurrently with the July 22, 2020 Common
Stock Purchase Agreement, the Company entered into a Common Stock Purchase Warrant with EMC2 Capital (the “EMC2 Warrant”)
to subscribe for a purchase from the Company up to Two Million (2,000,000) shares of the Company’s Common Stock. The EMC2
Warrant has an initial exercise price of $1.59, the closing price of our common stock on July 22, 2020, is non-cancellable, vests
upon issuance and expires on the fifth anniversary of the EMC2 Warrant date of issuance.
The foregoing Geneva SPA, Geneva CPNs and EMC2
SPA were issued by the Company under the exemption from registration afforded by Section 4(a)(2) of the Securities Act, as amended
and/or Regulation D promulgated thereunder, as the securities were issued to accredited investors, without a view to distribution,
and were not issued through any general solicitation or advertisement.
On July 9, 2020 and July 31, 2020, the Company
received $50,000 and $40,000, respectively, from Dr. Scott Ford, Director, in exchange for restricted common stock at a price of
$2.00 per share.
On July 10, 2020, the Company made a payment
to LG of $60,000 in partial payment of the Note.
On August 6, 2020, the Company made a payment
to LG of $50,000 in partial payment of the Note.