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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended December 31, 2021

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from _____ to _____

 

000-55320

(Commission file number)

 

NEXIEN BIOPHARMA, INC.

(Exact name of registrant as specified in its charter)

 

Delaware   26-2049376
(State or other jurisdiction of incorporation or organization)   (I.R.S. Employer Identification No.)

 

4340 E Kentucky Ave., Suite 206, Glendale, CO 80246

(Address of principal executive offices) (Zip Code)

 

(303) 495-7583

(Registrant’s telephone number, including area code)

 

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

 

Securities registered pursuant to Section 12(b) of the Act: None

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
         

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

  Large accelerated filer ☐ Accelerated filer ☐
  Non-accelerated filer Smaller reporting company
    Emerging growth company

 

If an emerging growth company, indicate by the check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 60,022,196 shares as of February 4, 2022.

 

 

 

 
 

 

TABLE OF CONTENTS

 

Item   Description   Page
    PART I - FINANCIAL INFORMATION    
         
ITEM 1.   FINANCIAL STATEMENTS.   3
ITEM 2.   MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.   17
ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.   20
ITEM 4.   CONTROLS AND PROCEDURES.   20
         
    PART II - OTHER INFORMATION    
         
ITEM 1.   LEGAL PROCEEDINGS.   21
ITEM 1A.   RISK FACTORS.   21
ITEM 2.   UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.   21
ITEM 3.   DEFAULT UPON SENIOR SECURITIES.   21
ITEM 4.   MINE SAFETY DISCLOSURES.   21
ITEM 5.   OTHER INFORMATION.   21
ITEM 6.   EXHIBITS.   22

 

2
 

 

PART 1 - FINANCIAL INFORMATION

 

ITEM 1 - FINANCIAL STATEMENTS

 

Nexien BioPharma, Inc.

Consolidated Balance Sheets

 

    December 31, 2021     June 30, 2021  
    (Unaudited)     (Audited)  
                 
Assets                
                 
Current Assets                
Cash   $ 2,942     $ 18,041  
Prepaids     -       7,500  
                 
 Total current assets     2,942       25,541  
                 
Total Assets   $ 2,942     $ 25,541  
                 
Liabilities and Stockholders’ (Deficit)                
                 
Current Liabilities                
Accounts payable and accrued expenses   $ 6,563     $ 6,375  
Due to officer     35,000       20,000  
Convertible notes payable - related party, net of discount of $41,196 at December 31, 2021 and $52,059 at June 30, 2021     23,804       12,941  
                 
 Total current liabilities     65,367       39,316  
                 
Commitments and Contingencies                
                 
Stockholders’ (Deficit)                
Preferred stock - $.0001 par value; 10,000,000 authorized; none issued     -       -  
Common stock - $.0001 par value; 200,000,000 shares authorized; 56,772,196 shares and 55,772,196 shares issued and outstanding at December 31, 2021 and June 30, 2021, respectively     5,677       5,577  
Additional paid in capital     10,545,904       10,476,004  
Stock payable     35,000       35,000  
Common stock subject to forfeiture     -       (223,255 )
Accumulated deficit     (10,649,006 )     (10,307,101 )
                 
 Total Stockholders’ (Deficit)     (62,425 )     (13,775 )
                 
Total Liabilities and Stockholders’ (Deficit)   $ 2,942     $ 25,541  

 

See accompanying notes to these consolidated financial statements.

 

3
 

 

Nexien BioPharma, Inc.

Consolidated Statements of Operations

For the Three and Six Months Ended December 31, 2021 and 2020

(Unaudited)

 

                         
    Three months ended     Six months ended  
    December 31,     December 31,  
    2021     2020     2021     2020  
                         
Revenue   $ -     $ -     $ -     $ -  
                                 
Operating expenses                                
 Professional fees     11,440       7,400       17,480       22,990  
 General and administrative     202,056       818,798       310,955       1,864,500  
                                 
Total operating expenses     213,496       826,198       328,435       1,887,490  
                                 
Other income (expense)                                
 Interest expense - related     (1,296 )     (527 )     (2,607 )     (655 )
 Amortization of discount on convertible notes     (5,402 )     (1,306 )     (10,863 )     (1,306 )
                                 
Total other income (expense)     (6,698 )     (1,833 )     (13,470 )     (1,961 )
                                 
Net loss   $ (220,194 )   $ (828,031 )   $ (341,905 )   $ (1,889,451 )
                                 
Loss per share - basic and diluted   $ (0.004 )   $ (0.01 )   $ (0.01 )   $ (0.03 )
                                 
Weighted average shares outstanding - basic and diluted     56,211,756       55,784,493       55,990,775       55,370,365  

  

See accompanying notes to consolidated financial statements.

 

4
 

 

Nexien BioPharma, Inc.

Consolidated Statements of Stockholders’ Equity (Deficit)

Six Months Ended December 31, 2021 and 2020

(Unaudited)

 

                                           
    Shares     Common Stock     Additional Paid in Capital     Stock Payable     Common Stock Subject to Forfeiture     Accumulated Deficit    

Total
Stockholders’
Equity (Deficit) 

 
                                           
Balance, June 30, 2021     55,772,196     $ 5,577     $ 10,476,004     $ 35,000     $ (223,255 )   $ (10,307,101 )   $ (13,775 )
                                                         
Amortization of CRx shares     -       -       -       -       223,255       -       223,255  
Common stock issuable to officers     -       -       -       70,000       -       -       70,000  
Common stock issued to officers     1,000,000       100       69,900       (70,000 )     -       -       -  
Net loss     -       -        -       -       -       (341,905 )     (341,905 )
                                                         
Balance, December 31, 2021     56,772,196     $ 5,677     $ 10,545,904     $ 35,000     $ -     $ (10,649,006 )   $ (62,425 )
                                                         
                                                         
Balance, June 30, 2020     53,984,004     $ 5,398     $ 11,583,159     $ -     $ (3,147,763 )   $ (8,447,159 )   $ (6,365 )
                                                         
Issuance of stock for conversion of related party                                                        
note payable and interest at $0.014 per share     1,797,192       180       24,981       -       -       -       24,981  
Issuance of stock for accounts payable at $0.09 per share     150,000       15       13,485       -       -       -       13,485  
Amortization of CRx shares     -       -       -       -       1,308,049       -       1,308,049  
Fair value of options granted     -       -       282,116       -       -       -       282,116  
Fair value of warrants issued     -       -       252,104       -       -       -       252,104  
Discount on convertible debt     -       -       38,638       -       -       -       38,638  
Net loss     -       -       -       -       -       (1,889,451 )     (1,889,451 )
                                                         
Balance, December 31, 2020     55,931,196     $ 5,593     $ 12,194,483     $ -     $ (1,839,714 )   $ (10,336,610 )   $ 23,557  

 

See accompanying notes to these consolidated financial statements.

 

5
 

 

Nexien BioPharma, Inc.

Consolidated Statements of Cash Flows

Six Months Ended December 31, 2021 and 2020

(Unaudited)

 

    2021     2020  
             
Cash flows from operating activities                
Net loss   $ (341,905 )   $ (1,889,451 )
Adjustments to reconcile net loss to net cash used in operating activities                
Stock based compensation     -       534,220  
Fair value of shares issued for CRx Acquisition     223,255       1,308,049  
Stock issued for services and license fee     -       13,500  
Stock issued/issuable to officers     70,000       -  
Discount on convertible debt     10,863       1,306  
Changes is assets and liabilities                
Decrease in prepaids     7,500       6,000  
Increase (decrease) in accounts payable and accrued expenses     188       (14,276 )
Cash used in operating activities     (30,099 )     (40,652 )
                 
Cash flows from investing activities                
Cash used in investing activities     -       -  
                 
Cash flows from financing activities                
Cash proceeds from convertible note payable - related     -       78,000  
Advance from officer     15,000       -  
Cash provided by financing activities     15,000       78,000  
                 
Net increase in cash and cash equivalents     (15,099 )     37,348  
Cash and cash equivalents, beginning of period     18,041       10,786  
Cash and cash equivalents, end of period   $ 2,942     $ 48,134  
                 
Supplemental disclosure of non-cash investing and financing activities                
                 
Shares issued for conversion of related party note and interest   $ -     $ 25,161  
Shares issued for settlement of accounts payable   $ -     $ 13,500  

  

See accompanying notes to these consolidated financial statements.

 

6
 

 

NEXIEN BIOPHARMA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

Note 1 – Nature of Business and Basis of Presentation

 

Nexien BioPharma, Inc. (the “Company” or “Nexien”) was incorporated in the State of Michigan on November 10, 1952 as Gantos, Inc., and was reincorporated in the State of Delaware in 2008, changing its name to Kinder Holding Corp. In October 2017, the Company completed a reverse acquisition of Intiva BioPharma Inc., a Colorado corporation (“BioPharma”), incorporated on March 27, 2017, through an exchange of shares (the “Share Exchange Transaction”) and changed its name to Intiva BioPharma Inc. In September 2018, the Company changed its name to Nexien BioPharma, Inc.

 

As further described in Note 4, BioPharma became a wholly-owned subsidiary of the Company. Since this transaction resulted in the existing shareholders of BioPharma acquiring control of the Company, for financial reporting purposes, the business combination has been accounted for as an additional capitalization of the Company (a reverse acquisition with BioPharma as the accounting acquirer). The operations of BioPharma were the only continuing operations of the Company.

 

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

 

Principles of Consolidation

 

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

 

Note 2 - Going Concern Uncertainty

 

The accompanying financial statements have been prepared in conformity with US GAAP, which contemplates continuation of the Company as a going concern. The Company has not established any source of revenue to cover its operating costs, and as such, has incurred an operating loss since inception of $10,649,006. The development of pharmaceuticals with the objective of obtaining approval by the FDA and other international regulatory authorities is not a short-term endeavor for any specific drug candidate. It also requires extremely significant amounts of capital funding for clinical trials and other matters. At December 31, 2021, the Company had negative working capital $62,425. The Company will require significant additional capital to fund the implementation and execution of its business plan. This capital, which likely will be millions of dollars for a single drug candidate, will be required for research, regulatory applications, and clinical trials. At the present time, the Company has a funding commitment which will enable it to continue its research operations for approximately the next twelve months (See Note 10). These and other factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.

 

7
 

 

NEXIEN BIOPHARMA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

Note 3 – Summary of Significant Accounting Policies

 

Use of Estimates

 

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

 

Cash and Cash Equivalents

 

For financial statement presentation purposes, the Company considers those short-term, highly liquid investments with original maturities of three months or less to be cash or cash equivalents. There were no cash equivalents at December 31, 2021 and June 30, 2021.

 

Valuation of Long-Lived Assets

 

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

 

Fair Value of Financial Instruments

 

FASB ASC 825, “Financial Instruments,” requires entities to disclose the fair value of financial instruments, both assets and liabilities recognized and not recognized on the balance sheet, for which it is practicable to estimate fair value. FASB ASC 825 defines fair value of a financial instrument as the amount at which the instrument could be exchanged in a current transaction between willing parties. At December 31, 2021 and June 30, 2021, the carrying value of certain financial instruments (cash and cash equivalents, accounts payable and accrued expenses) approximates fair value due to the short-term nature of the instruments or interest rates, which are comparable with current rates.

 

Fair Value Measurements

 

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

 

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

 

Level 2: Inputs to the valuation methodology include:

 

  Quoted prices for similar assets or liabilities in active markets;
  Quoted prices for identical or similar assets or liabilities in inactive markets;
  Inputs other than quoted prices that are observable for the asset or liability;
  Inputs that are derived principally from or corroborated by observable market data by correlation or other means.

 

8
 

 

NEXIEN BIOPHARMA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

Note 3 – Summary of Significant Accounting Policies (continued)

 

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

 

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

 

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

 

When the Company changes its valuation inputs for measuring financial assets and liabilities at fair value, either due to changes in current market conditions or other factors, it may need to transfer those assets or liabilities to another level in the hierarchy based on the new inputs used. The Company recognizes these transfers at the end of the reporting period that the transfers occur. For the periods ended December 31, 2021 and June 30, 2021, there were no significant transfers of financial assets or financial liabilities between the hierarchy levels.

 

As at December 31, 2021 and June 30, 2021, no assets or liabilities were required to be measured at fair value on a recurring basis.

 

Earnings per Common Share

 

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

 

Income Taxes

 

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

 

Revenue Recognition

 

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

 

Research and Development Expenses

 

Research and development expenses are charged to operations as incurred.

 

9
 

 

NEXIEN BIOPHARMA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

Note 3 – Summary of Significant Accounting Policies (continued)

 

Stock-based compensation

 

Pursuant to FASB ASC 718, all share-based payments to employees, including grants of employee stock options, are recognized in the statement of operations based on their fair values.

 

Issuance of shares for non-cash consideration

 

The Company accounts for the issuance of equity instruments to acquire goods and/or services based on the fair value of the goods and services or the fair value of the equity instrument at the time of issuance, whichever is more reliably determinable. The Company’s accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of the standards issued by the FASB. The measurement date for the fair value of the equity instruments issued is determined as the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor’s performance is complete. In the case of equity instruments issued to consultants, the fair value of the equity instrument is recognized over the term of the consulting agreement.

 

Reclassifications

 

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

 

Recent Accounting Pronouncements

 

Although there are several other new accounting pronouncements issued or proposed by the FASB, which the Company has adopted or will adopt, as applicable, the Company does not believe any of these accounting pronouncements has had or will have a material impact on its consolidated financial position or results of operations. Management has evaluated accounting standards and interpretations issued but not yet effective as of December 31, 2021 and does not expect such pronouncements to have a material impact on the Company’s financial position, operations, or cash flows.

 

Note 4 – Share Exchange Agreement

 

On August 8, 2017, the Company entered into a Share Exchange Agreement, as amended and restated on October 13, 2017 (the “Agreement”), with BioPharma. Pursuant to the terms of the Agreement, the Company agreed to issue to the shareholders of BioPharma 42,642,712 post-reverse stock-split shares of the Company’s common stock, par value $0.0001 (“Common Stock”), in exchange for all of the issued and outstanding shares of BioPharma capital stock, thereby making BioPharma a wholly-owned subsidiary of the Company. As part of the Closing of the Agreement, the 20,000,000 pre-reverse split shares of the Company’s Common Stock previously purchased by Kanativa USA, effective on June 26, 2017 in a change in control transaction from the Company’s control shareholders, were canceled. Since this transaction resulted in the existing shareholders of BioPharma acquiring control of the Company, for financial reporting purposes, the business combination has been accounted for as an additional capitalization of the Company (a reverse acquisition with BioPharma as the accounting acquirer).

 

Note 5 – License Agreements

 

Accu-Break License Agreement

 

On February 28, 2018, the Company obtained a worldwide exclusive license with respect to a proprietary delivery system for cannabinoid-based medications from Accu-Break Pharmaceuticals Inc (Accu-Break), whose President was an affiliate of the Company as of the date of the agreement. Upon execution of the agreement, as amended September 18, 2018, $35,000 was paid to the licensor; an additional $30,000 was paid in cash during the year ended June 30, 2019; and a final payment of $35,000 was paid in common stock of the Company during the year ended June 30, 2020.

 

10
 

 

NEXIEN BIOPHARMA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

Note 5 – License Agreements (continued)

 

The Company is required to pay milestone payments upon obtaining regulatory approval of pharmaceutical licensed products and royalties based upon sales of licensed products. The Company may grant sublicenses under the terms of the agreement.

 

The Company has previously estimated that it may not be able to recover the $65,000 of costs capitalized under the Accu-Break License Agreement, and recognized an impairment of $65,000 for the license at June 30, 2019. The $35,000 value of common stock issued in the year ended June 30, 2020 was charged to operations. Although the Company has recognized an impairment under Generally Accepted Accounting Principles, it retains its rights under the AccuBreak license agreement.

 

Note 6– Stockholders’ Equity

 

Common stock

 

In May 2021, the Board of Directors authorized the issuance of a total of 2,500,000 shares of common stock of the Company to each of its Chief Executive Officer and Chief Financial Officer, with 250,000 of such shares to be issued to each of them every quarter beginning July 1, 2021 and continuing every three months through October 1, 2023, it being the intent of the Board that the issuance of these shares represents compensation for services rendered for the then completed calendar quarter. At December 31, 2021, the Company has included as a component of Stockholders’ Equity the $35,000 fair value of the aggregate 500,000 shares issued January 1, 2022 for the quarter ended December 31, 2021. During the six months ended December 31, 2021, the Company issued, pursuant to the agreement, an aggregate 1,000,000 shares, valued at $70,000, for the quarters ended September 30, 2021 and June 30, 2021.

 

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

 

  1,797,192 shares, at $0.014 per share, to its CEO for conversion of a note payable in the principal amount of $25,000 and accrued interest of $161. No gain or loss was recognized on conversion as the conversion was made under the terms of the note agreement.
     
  150,000 shares valued at $13,500, $0.09 per share, as consideration for consulting services.

 

CRX Limited Liability Company Interest Purchase Agreement

 

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

 

11
 

 

NEXIEN BIOPHARMA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

Note 6- Stockholders’ Equity (continued)

 

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

 

The transaction was valued at $8,360,000, based on the fair value of the 11,000,000 shares issued of $0.76 per share, as per the closing market price of the Company’s common stock on the date of the agreement. The $836,000 fair value of the 1,100,000 shares issued not subject to any forfeiture restrictions was charged to operations during the six months ended December 31, 2018. The $7,524,000 fair value of the 9,900,000 shares subject to forfeiture was charged to stockholders’ equity as a contra equity account, and was being amortized over the vesting periods. The net amount charged to stockholder’s equity was $0 on the date of the acquisition.

 

Effective December 31, 2018, one of the Sellers resigned from the Company and forfeited 1,732,500 unvested shares previously issued. In May 2019, that Seller returned to the Company an additional 142,500 vested shares issued in accordance with the Purchase Agreement. The fair value of the returned shares was credited to the operations as of June 30, 2019.

 

In March 2021, four of the Sellers terminated their relationships with the Company and forfeited their remaining 2,409,000 unvested shares, valued at the original issuance price of $1,830,840 ($0.76 per share).

 

As at December 31, 2021, all shares issued were fully vested and an aggregate $5,104,159 was charged to operations for the value of vested shares issued and the amortization of the unvested CRX shares. For the six months ended December 31, 2021 and 2020, $223,255,000 and $1,308,049, respectively, has been charged to operations for the amortization of unvested CRX shares during each of the periods.

 

2017 Stock Incentive Plan

 

On August 10, 2017, the Company adopted the “2017 Stock Incentive Plan” and granted an aggregate of 6,400,000 shares of Common Stock to five officers and directors of the Company, valued at $800,000 ($0.125 per share). In March 2018, 1,166,667 unvested shares (valued at $145,833) previously issued to the Company’s former Chief Executive Officer were canceled. On July 25, 2018, the Company accelerated the vesting of 1,083,342 unvested shares of Common Stock previously granted to its former Chief Executive Officer and Chief Financial Officer. All 5,233,333 shares issued (valued at $654,167) have been vested.

 

2018 Equity Incentive Plan

 

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

 

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

 

In August 2018, the Board of Directors granted options to purchase a total of 150,000 shares of Common Stock, exercisable for a period of seven years, to two individuals, (i) a director and (ii) a consultant of the Company, at an exercise price of $0.38 per share. All options granted have been fully vested.

 

12
 

 

NEXIEN BIOPHARMA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

Note 6-Stockholders’ Equity (continued)

 

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

 

Average risk-free interest rates     2.3% - 2.8 %
Average expected life (in years)     4.0 to 7.0  
Volatility     160% to 296 %

 

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

 

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

Average risk-free interest rates     2.88% - 2.93 %
Average expected life (in years)     4.0  
Volatility     171% to 172 %

 

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

 

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

 

Average risk-free interest rates     0.23 %
Average expected life (in years)     4.0  
Volatility     152 %

 

The fair value of the vested options granted of $315,350 was charged to operations during the year ended June 30, 2021.

 

A summary of option activity during the six months ended December 31, 2021 is presented below:

 

    Shares     Weighted Average Exercise Price     Weighted Average Remaining Contractual Life (Years)  
                   
Outstanding and exercisable – June 30, 2021     7,995,000     $ 0.26       4.5  
Granted     -                  
Exercised     -                  
Expired/Canceled     -                  
Outstanding and exercisable -December 31, 2021     7,995,000     $ 0.26       4.2  

 

13
 

 

NEXIEN BIOPHARMA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

Note 6 – Stockholders’ Equity (continued)

 

Warrants

 

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

 

The following table summarizes information about warrants outstanding at December 31, 2021:

 

    Number     Exercise Price     Expires
Class A     1,727,299     $ 0.040265     November 24, 2025
Class B     1,727,299     $ 0.043276     November 24, 2025
Class C     1,727,299     $ 0.045157     November 24, 2025

 

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

 

Average risk-free interest rates     .39 %
Average expected life (in years)     2.5  
Volatility     153 %

 

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

 

Note 7 – Convertible Notes Payable

 

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

 

The Company has recorded the conversion feature as a Beneficial Conversion Feature. The fair value of $65,000 for the expense portion of the notes is being amortized over the term of the notes. As the warrants exceeded the value of the notes themselves, the discount is the entire amount of the notes. This fair value has been determined based on the current trading prices of the Company’s common stock. Management has determined that this treatment is appropriate given the uncertain nature of the value of the Company and its stock, and there will be no revaluations until the note is paid or redeemed for stock. During the six months ended December 31, 2021, $10,863 was charged to operations for amortization during the period of the Beneficial Conversion Feature.

 

Note 8 – Related Party Transactions

 

BioPharma was formed as a subsidiary of Kanativa USA, which is a subsidiary of Kanativa Inc. Kanativa USA was issued 24,000,000 shares of BioPharma’s common stock as consideration for its contribution of 100% of the ownership of NexN, and costs and expenses incurred on behalf of BioPharma and NexN in the amount of $201,228.

 

14
 

 

NEXIEN BIOPHARMA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

Note 8 – Related Party Transactions (continued)

 

In May 2021, the Company’s Board of Directors authorized the issuance of a total of 2,500,000 shares of common stock of the Company to each of its Chief Executive Officer and Chief Financial Officer, with 250,000 of such shares to be issued to each of them every quarter beginning July 1, 2021 and continuing every three months through October 1, 2023. At December 31, 2021, the Company has recorded as a component of stockholders’ equity the $35,000 fair value of the aggregate 500,000 shares issued January 1, 2022 for the quarter ended December 31, 2021.

 

During the three months ended December 31, 2021, the Company’s Chief Executive Officer advanced an aggregate $15,000 to the Company for working capital and operating purposes. The advances are non-interest bearing and are repayable on demand.

 

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

 

Note 9- Commitments and Contingencies

 

At December 31, 2021, there were no legal proceedings against the Company.

 

Note 10Subsequent Events

 

Note Purchase Agreement

 

On January 18, 2022, the Company entered into a note purchase agreement with Quick Capital, LLC, a Wyoming limited liability company (“Quick Capital”), pursuant to which the Company issued Quick Capital a twelve-month convertible promissory note in the principal amount of $170,454 (the “Note”) for a $150,000 investment, which included an original issuance discount of 12%. In connection with the Note issuance, Quick Capital was also issued 500,000 restricted shares of the Company’s common stock and a three-year warrant (the “Warrant”) to purchase up to an aggregate of 347,512 restricted shares of the Company’s common stock at an exercise price of $0.075 per share (the “Warrant Shares”). The Company received the $146,750 net proceeds from the note, after Quick Capital’s legal fees of $3,250.

 

Quick Capital is entitled to a cash payment of $20,000 as liquidated damages for any failure to include all shares issuable upon the conversion of the Note (the “Conversion Shares”) and the Warrant Shares on any registration statement filed with the Securities and Exchange Commission. For twelve months following the issuance of the Quick Note, Quick Capital will have the right of first refusal to participate in future financings proposed to the Company by bonafide third parties on the same terms as such third parties and participation rights to purchase up to $1,000,000 of securities in other offerings, subject to certain exceptions.

 

The Note is convertible into shares of common stock at a conversion price of $0.035 per share. The Note may be prepaid at any time within the first six months at 130% of face value. Thereafter, the Note can only be prepaid at Quick Capital’s discretion.

 

If an event of default (as described in the Note) occurs, the Note will become immediately due and payable in an amount equal to 150% of the then outstanding principal amount of the Note plus any interest or amounts owing to Quick Capital.

 

The Note may not be converted and the Warrant may not be exercised if after giving effect to such conversion or exercise, as the case may be, Quick Capital and its affiliates would beneficially own more than 9.99% of the outstanding common stock of the Company.

 

15
 

 

NEXIEN BIOPHARMA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

Note 10 – Subsequent Events (continued)

 

On or after May 7, 2022 and upon the mutual agreement of the Company and Quick Capital, Quick Capital may purchase additional note(s) in an aggregate amount not to exceed $350,000 on similar terms.

 

In connection with this transaction, the Company issued, as a consulting fee, a one-year warrant to purchase 2,250,000 restricted shares of the Company’s common stock at an exercise price of $0.001 per share to One Eyed Jack Enterprises LLC. The warrant was exercised on January 25, 2022.

 

In January 2022, the Company issued an aggregate 500,000 shares of common stock as compensation to two officers, pursuant to Board of Directors authorization, for quarterly services rendered through December 31, 2021.

 

Advance from Officer

 

Subsequent to December 31, 2021, the Company’s Chief Executive Officer advanced an additional $10,000 to the Company for working capital and operating purposes. The advance is non-interest bearing and is repayable on demand.

 

The Company has analyzed its operations subsequent to December 31, 2021 through the date these financial statements were issued, and has determined that it does not have any additional material subsequent events to disclose.

 

16
 

 

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

 

Forward-Looking Statements

 

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

 

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help you understand our historical results of operations during the periods presented and our financial condition for the six months ended December 31, 2021 and 2020. This MD&A should be read in conjunction with our audited financial statements as of June 30, 2021 and 2020.

 

Overview

 

We are engaged in pursuing pre-clinical and drug development activities for certain pharmaceutical formulations that include cannabinoids. We have filed three provisional patent applications, and acquired a license covering certain intellectual property related to a drug delivery system.

 

As a relatively new business engaged in start-up operations and activities, we will require substantial additional funding to successfully complete any of our drug development programs. At present, we cannot estimate the substantial capital requirements needed to secure regulatory approvals for our drug candidates. We estimate that we will need to raise at a minimum $50,000 just to maintain our existence as a public company for the remainder of the current calendar year.

 

We are a start-up company with no revenues from operations. Notwithstanding our successful raise of $2,076,158, net of offering costs, in equity capital since inception to December 31, 2021, and the receipt of $146,750, net of financing costs, from a debt issuance in January 2022, there is substantial doubt that we can continue as an on-going business for the next twelve months without a significant infusion of capital or entering into a business combination transaction. We do not anticipate that Nexien BioPharma will generate revenues from its research and development activities related to its drug development projects in the near future, due to the protracted revenue model of pursuing pharmaceutical drug development in accordance with the pathway set forth by the FDA. The Company had to cease research and development activities due to the lack of sufficient working capital. In January 2022 the Company received a funding commitment from a third-party lender and will be recommencing research and development activities on its myotonic dystrophy project. While management continues its efforts to raise additional capital for the Company, it is also seeking merger or other business combination or restructuring opportunities.

 

Results of Operations for the three months ended December 31, 2021 as compared to December 31, 2020

 

Net loss for the three months ended December 31, 2021 was $220,194, a decrease of $607,837 from the net loss of $828,031 for the three months ended December 31, 2020.

 

17
 

 

General and administrative costs of $202,056 incurred for the three months ended December 31, 2021 includes non-cash charges of $163,255 for the fair value of the shares issued for the acquisition of CRX Bio Holdings LLC and $35,000 as the value of non-cash stock-based compensation costs for common shares issued to officers. In comparison, general and administrative costs for the three months ended December 31, 2020 include a non-cash charge of $521,051 for the fair value of the shares issued for the acquisition of CRX Bio Holdings LLC, as well as non-cash stock-based compensation costs for the period of $33,972 for the fair value of options granted and $252,104 for the fair value of warrants issued in conjunction with convertible debt financing during the 2020 period. General and administrative expenses, exclusive of non-cash stock-based compensation costs, were consistent during the 2021 and 2020 periods, consisting predominately of costs and expenses associated the Company’s maintaining its public company status.

 

During the three months ended December 31, 2021 and 2020, the Company incurred $6,698 and $1,833, respectively, for interest and amortization of discount related to the convertible debt financings.

 

There were no research and development costs for the periods ended December 31, 2021 and 2020 due to the Company’s limited financial resources and availability of research personnel.

 

Professional fees of $11,440 for the three months ended December 31, 2021 increased by $4,040 from $7,400 for the period ended December 31, 2020. Fees for the 2021 and 2020 periods consisted of legal fees for securities related matters and fees for auditor quarterly review and other required tax and regulatory filings.

 

Results of Operations for the six months ended December 31, 2021 as compared to December 31, 2020

 

Net loss for the six months ended December 31, 2021 was $341,905, a decrease of $1,547,546 from the net loss of $1,889,451 for the six months ended December 31, 2020.

 

During the six months ended December 31, 2021, the Company had limited financial resources and substantially all available funds were utilized for maintaining corporate operations as a public company. In January 2022, the Company completed a debt financing agreement resulting in the receipt of $146,750. These funds will be utilized for maintaining corporate operations and continuance of the Company’s research for myotonic dystrophy and myotonia.

 

General and administrative costs of $310,955 incurred for the six months ended December 31, 2021 includes non-cash charges of $223,255 for the fair value of the shares issued for the acquisition of CRX Bio Holdings LLC and $70,000 as the value of non-cash stock-based compensation costs for common shares issued to officers. In comparison, general and administrative costs for the six months ended December 31, 2020 include a non-cash charge of $1,308,049 for the fair value of the shares issued for the acquisition of CRX Bio Holdings LLC, as well as non-cash stock-based compensation costs for the period of $282,116 for the fair value of options granted and $252,104 for the fair value of warrants issued in conjunction with convertible debt financing during the 2020 period. General and administrative expenses, exclusive of non-cash stock-based compensation costs, were consistent during the 2021 and 2020 periods, consisting predominately of costs and expenses associated the Company’s maintaining its public company status.

 

During the six months ended December 31, 2021 and 2020, the Company incurred $13,470 and $1,961, respectively, for interest and amortization of discount related to the convertible debt financings.

 

During the six months ended December 31, 2020, the Board of Directors granted options to purchase a total of 5,000,000 shares of common stock to officers of the Company, exercisable for a period of seven years at an exercise price of $0.08 per share. No additional options have been granted through December 31, 2021.

 

Professional fees of $17,480 for the six months ended December 31, 2021 decreased by $5,510 from $22,990 for the six months ended December 31, 2020. Fees for both the 2021 and 2020 periods consisted of legal fees for securities related matters and fees for annual audit and other required regulatory filings.

 

There were no research and development costs for the periods ended December 31, 2021 and 2020 due to the Company’s limited financial resources and availability of research personnel.

 

During the six months ended December 31, 2021, the Company issued 500,000 shares of common stock to each of two officers for services rendered to the Company.

 

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Liquidity and Capital Resources

 

At December 31, 2021, we had a working capital deficit of $62,425 and cash of $2,942, as compared to a working capital deficit of $13,775 and cash of $18,041 at June 30, 2021. The decrease in both working capital and cash was due primarily to available funds being utilized for maintaining corporate operations as a public company. We used $30,099 of cash for operating activities, and received a $15,000 advance from one of our officers during the six months ended December 31, 2021.

 

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

 

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

 

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

 

Availability of Additional Capital

 

Notwithstanding our success in raising gross proceeds of $2.1 million from the private sale of equity securities through December 31, 2021, and the completion of a debt financing agreement resulting in the receipt of $146,750 in January 2022, there can be no assurance that we will continue to be successful in raising additional funds through equity capital and/or debt financings and have adequate capital resources to fund our operations or that any additional funds will be available to us on favorable terms or in amounts required by us. We estimate that we will require at a minimum $50,000 just to maintain our existence as a public company for the remainder of the current calendar year.

 

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

 

Capital Expenditure Plan During the Next Twelve Months

 

To date, we raised approximately $2.1 million, in equity capital (including exercised warrants) and $146,750 in debt financings, and we may be expected to require a minimum of $50,000 in capital during the remainder of the current calendar year to continue our existence as a public company. There can be no assurance that we will continue to be successful in raising capital in sufficient amounts and/or at terms and conditions satisfactory to the Company. Our revenues are expected to come from our drug development projects. As a result, we will continue to incur operating losses unless and until we have obtained regulatory approval with respect to one of our drug development projects and commence to generate sufficient cash flow to meet our operating expenses. There can be no assurance that we will obtain regulatory approval and the market will adopt our future drugs. In the event that we are not able to successfully: (i) raise equity capital and/or debt financing; or (ii) market our drugs after obtaining regulatory approval, our financial condition and results of operations will be materially and adversely affected.

 

Going Concern Consideration

 

Our registered independent auditors have issued an opinion on our financial statements as of June 30, 2021 which includes a statement describing our going concern status. This means that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills and meet our other financial obligations. This is because we have not generated any revenues and no revenues are anticipated until we begin marketing any drugs that we successfully develop. Accordingly, we must raise capital from sources other than the actual sale from any drugs that we develop. We must raise capital to continue our drug development activities and stay in business.

 

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Off-Balance Sheet Arrangements

 

At December 31, 2021 and June 30, 2021, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K promulgated under the Securities Act of 1934.

 

Contractual Obligations and Commitments

 

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

 

Critical Accounting Policies

 

Our significant accounting policies are described in the notes to our financial statements as of December 31, 2021 and are included elsewhere in this report.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Not applicable.

 

ITEM 4. CONTROLS AND PROCEDURES

 

Evaluation of disclosure controls and procedures.

 

As of December 31, 2021, the Company’s chief executive officer and chief financial officer conducted an evaluation regarding the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Exchange Act. Based upon the evaluation of these controls and procedures as provided under the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013), our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were ineffective as of the end of the period covered by this report.

 

Changes in internal controls.

 

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

 

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PART II - OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

None.

 

ITEM 1A. RISK FACTORS

 

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Risk Factors in our Form 10-K as filed with the SEC on October 12, 2021, which could materially affect our business, financial condition or future results. The risks described in our Form 10-K are not the only risks facing our company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

 

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

 

During the quarter ended December 31, 2021 we issued and sold the unregistered securities set forth in the table below.

 

Date   Persons or Class of Persons   Securities   Consideration
December 2021   Richard Greenberg   500,000 shares of Common Stock   Compensation
             
December 2021   Evan Wasoff   500,000 shares of Common Stock   Compensation

 

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

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

None.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not applicable.

 

ITEM 5. OTHER INFORMATION

 

None.

 

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ITEM 6. EXHIBITS

 

Regulation

S-K Number

  Document
2.1   Limited Liability Company Interest Purchase Agreement by and among the Members of CRX Bio Holdings LLC and Nexien BioPharma, Inc. dated October 26, 2018 (1)
3.1   Certificate of Incorporation (2)
3.2   Certificate of Merger (2)
3.3   Certificate of Amendment to Certificate of Incorporation (2)
3.4   Certificate of Amendment to Certificate of Incorporation (3)
3.5   Certificate of Amendment to Certificate of Incorporation (4)
3.6   Bylaws (2)
10.1   2017 Stock Incentive Plan (3)
10.2   Licensing Agreement between the Company and Kotzker Consulting LLC (3)
10.3   Exclusive License Agreement between the Company and Accu-Break Pharmaceuticals, Inc. (3)
10.4   2018 Equity Incentive Plan (4)
10.5   First Amendment to Exclusive License Agreement between the Company and Accu-Break Pharmaceuticals, Inc. dated September 18, 2018 (4)
10.6   Demand Convertible Promissory Note dated June 11, 2020 to Richard Greenberg (5)
10.7   Convertible Promissory Note and Warrants dated November 24, 2020 to Richard Greenberg (6)
31.1   Rule 13a-14(a) Certification of Richard Greenberg
31.2   Rule 13a-14(a) Certification of Evan L. Wasoff
32.1   Certification of Richard Greenberg Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2   Certification of Evan L. Wasoff Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101   Financial statements from the Quarterly Report on Form 10-Q of Nexien BioPharma, Inc. for the six-month and quarterly periods ended December 31, 2021, formatted in XBRL: (i) the Balance Sheets; (ii) the Statements of Operations; (iii) the Statements of Cash Flows; and (iv) the Notes to Financial Statements (6)
101.INS   Inline XBRL Instance Document
101.SCH   Inline XBRL Taxonomy Extension Schema Document
101.CAL   Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF   Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB   Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE   Inline XBRL Taxonomy Extension Presentation Linkbase Document
104   Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

  (1) Filed as an exhibit to the Current Report on Form 8-K filed October 30, 2018.
  (2) Filed as an exhibit to the registration statement on Form 10 filed November 14, 2014.
  (3) Filed as an exhibit to the Quarterly Report on Form 10-Q filed May 15, 2018.
  (4) Filed as an exhibit to the Annual Report on Form 10-K filed September 28, 2018.
  (5) Filed as an exhibit to the Annual Report on Form 10-K filed September 28, 2020.
  (6) Filed as an exhibit to the Quarterly Report on Form 10-Q filed February 11, 2021.
  (7) In accordance with Rule 406T of Regulation S-T, the information in these exhibits shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability under that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filing.

 

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SIGNATURES

 

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

 

  NEXIEN BIOPHARMA, INC.
     
Dated: February 8, 2022 By:  /s/ Richard Greenberg
    Richard Greenberg, Chief Executive Officer
     
  By: /s/ Evan L. Wasoff
    Evan L. Wasoff, Chief Financial Officer

 

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