U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10
GENERAL FORM FOR REGISTRATION OF SECURITIES
Pursuant to Section 12(b) or 12(g) of the Securities Exchange
Act of 1934
|
SIGNET INTERNATIONAL HOLDINGS,
INC. |
| (Exact name of registrant as specified in its
charter) |
|
Delaware |
|
16-1732674 |
| (State
or Other Jurisdiction of Incorporation) |
|
(IRS
Employer Identification Number) |
205 Worth Avenue, Suite 316, Palm Beach, Florida
33480
(Address of principal executive offices, zip code)
(561) 832-2000
Registrant’s telephone number, including area code
Securities registered pursuant to Section 12(b) of the
Exchange Act: None
Securities registered pursuant to Section 12(g) of the
Exchange Act:
Common Stock, $0.001 par value trading under the symbol
SIGN:OTCPink
Indicate by check mark if the registrant is a well-known seasoned
issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒
No
Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the Act. ☐ Yes ☒
No
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 (§ 232.405 of this chapter)
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,
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 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 has filed a report on
and attestation to its management’s assessment of the effectiveness
of its internal control over financial reporting under Section
404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the
registered public accounting firm that prepared or issued its audit
report. ☐
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Act). ☐ Yes ☒ No
The aggregate market value of the voting and non-voting common
equity held by non-affiliates as of June 30, 2020 was
$5,393,900.
TABLE OF CONTENTS
FORWARD LOOKING STATEMENTS
This Form 10 contains forward-looking information. This document
contains forward-looking statements. Any statements contained in
this document that are not statements of historical fact may be
deemed to be forward-looking statements. You can identify
forward-looking statements as those that are not historical in
nature, particularly those that use terminology such as “may”,
“will”, “should”, “expects”, “anticipates”, “contemplates”,
“estimates”, “believes”, “plans”, “projects”, “predicts”,
“potential” or “continue” or the negative of these similar terms.
In evaluating these forward-looking statements, you should consider
various factors, including the following: (a) those risks and
uncertainties related to general economic conditions, (b) whether
we are able to manage our planned growth efficiently and operate
profitably, (c) whether we are able to generate sufficient revenues
or obtain financing to sustain and grow our operations, and (d)
whether we are able to successfully fulfill our primary
requirements for cash. The Company’s actual results may differ
significantly from the results projected in the forward-looking
statements. The Company assumes no obligation to update
forward-looking statements.
FORM 10 INFORMATION
ITEM 1. BUSINESS
Overview
Signet International Holdings, Inc. (the “Company”) was
incorporated on February 2, 2005 in accordance with the Laws of the
State of Delaware as 51142, Inc. The Company changed its
corporate name to Signet International Holdings, Inc. in
conjunction with the September 8, 2005 transaction discussed
below.
On September 8, 2005, pursuant to a Stock Purchase Agreement and
Share Exchange (Agreement) by and among Signet International
Holdings, Inc. (Signet); Signet Entertainment Corporation (SIG) and
the shareholders of SIG (Shareholders) (collectively SIG and the
SIG shareholders shall be known as the “SIG Group”), Signet
acquired 100.0% of the then issued and outstanding preferred and
common stock of SIG for a total of 3,421,000 common shares and
5,000,000 preferred shares of Signet’s stock issued to the SIG
Group. Pursuant to the agreement, SIG became a wholly
owned subsidiary of Signet.
Signet Entertainment Corporation was incorporated on October 17,
2003 in accordance with the Laws of the State of
Florida. SIG was formed to establish a television
network “The Gaming and Entertainment Network”. To date,
this effort has been incomplete. The Company has abandoned pursuant
of any gaming or entertainment operations. The Company’s current
principal business plan is to focus in developing advanced
technologies, energy solutions and medical devices. By utilizing
sub licensing arrangements for the intellectual property licenses
we acquire, our strategy is focused on identifying strategic
partners that can develop and market products based on the
underlying technologies. We do not claim to have expertise in the
various intellectual properties we seek to acquire. Instead, our
value is based on our ability to assess technologies and
appropriate partners for the commercialization of products and
process based on the underlying intellectual property. Research and
development of the underly technologies is being performed at major
universities in Florida. The development of a commercial products
will be conducted by our strategic partners.
In determining whether we will pursue any particular intellectual
property we have engaged outside consulting scientists to evaluate
the viability of the underlying technology and its commercial
viability. We do not have a set metric for determining the
viability. We rely solely on the expertise of our consultants.
These consultants hold certain expertise in the specific field
related to the underlying technology. These include 3 consultants
for graphene applications, an engineer in magnetic energy, and two
consultants specializing in negotiating terms with universities and
public institutions. All consultants have agreed to receive
compensation in the form of common stock.
As we approach the second Quarter of 2020, we are pleased with the
progress we have made. We have accomplished each phase of our
growth and we have remained consistent with our
responsibilities.
Our status as an emerging growth public company is materializing
before us. We have engaged a new scientist to support our efforts
to help further develop out technologies and interact with the
several universities with whom we have option contracts to license
certain patents. We hear from other universities on a regular basis
that tells us we are welcome to the fraternity of research
scientists, engineers, and inventors. We have increased efforts to
create more awareness of our presence by engaging a social media
specialist who will keep the public informed of all our progress
and assist us with shareholders relations. Our team is growing and
meeting our needs.
Since all of the technologies we have options to license are
trending, unique, and further advanced than any others we know of
on the market today, we must maintain our edge and seek constant
improvement to stay viable—and we are doing just that.
Because of our efforts, we have our path laid out before us. Last
year´s strategy allowed us to take the proper steps to arrive at
this juncture. We are now proudly holding ourselves out to the
world as a viable and worthy consortium from which multinationals
can acquire advanced, patented technology. Although our
technologies may necessitate some retooling and possibly an
avant-garde approach in implementing, we feel that in considering
the alternative technologies presently available, ours is the
superior choice.
We have completed these efforts to identify and locate a niche,
function, and purpose for all our products. Inasmuch as our
products are ‘green’ in nature and innovative in design, we feel
these technologies can easily be integrated into daily life to the
benefit of all. We all will see great progress and never to look
back.
Our Plan
Our plan is to continue to raise awareness of our rights to license
patented technologies. Our plan requires that we raise sufficient
capital in order to exercise those certain options to secure the
licenses. Our model is based on utilizing the expertise of research
and development facilities in the Florida university system in
order to deploy commercially viable products into the market. We
currently are developing our marketing plan and commercial
modelling. This process involves press releases, social media,
marketing, expanding our contacts with professionals in
interrelated fields of study, such as dermatological associations,
or aviation, engineering, healthcare or energy related
associations, representatives and groups, and increasing and
building upon investor relationships in the private and public
sectors.
We plan to first file all our required reports with the SEC. Once
this is accomplished, we will focus full global attention raising
funds to secure our licensing rights in the technologies
represented by the various patents. We will attract interest and
sell or license rights for the use of our technologies either
geographically or industry specific. Anticipating revenue from sale
of rights or even licensing is a difficult dynamic to anticipate.
However, to offer illustrations of prior transactions accomplished
in the past few years of similar or related technologies, attached
are abstracts from published postings.
Currently, two (2) of our option agreements, specifically those
related to graphene technology and magnetic batteries have expired
a result of Covid 19 delays that have limited the formal capacities
of the leading institutions to reinstate the same. However, we have
been advised, verbally, that we maintain the right to extend the
options upon proper re-opening and commencement of regular
university operations. Generally, if an option expires, we must
renegotiate terms for reinstating on a case by case basis.
Since we are a public company, we have the advantages of not only
raising capital through private placements, debentures, and other
financial instruments, but also through entering into various forms
of strategic partnerships and joint ventures to be identified.
Should the occasion arise whereby an investor desires to fund
prototype building of anyone of our technologies; we would be in a
better position to demonstrate that our product works and
mass-production ready. At that time, we would be able to consider
marketing and distribution opportunities.
WE CURRENTLY DO NOT OWN ANY PATENTS OR HAVE ANY LICENSES FOR USE
OF PATENTS. WE HAVE SECURED OPTIONS TO ACQUIRE LICENSES. THE
BUSINESS LINES DESCRIBED BELOW ARE HIGHLY DEPENDENT UPON OUR
ABILITY TO EXERCISE OUR OPTIONS TO SECURE LICENSURE IN THE
TECHNOLOGIES. IN ORDER TO ACQUIRE THE LICENSES, ENGAGE IN
PREPARATION AND DEVELOPMENT OF THE COMMERICIALIZATION AND MARKETING
OF THE TECHNOLOGIES LISTED BELOW WILL REQUIRE THAT THE COMPANY
RAISE SIGNIFICANT AMOUNTS OF CAPITAL.
The terms of our option agreement described herein are $1,200 to be
paid as consideration for the option right. To exercise the option,
we must pay $3,500. Each option is for 1 year, and we renew any
expiring options with no consideration. The options are deemed
exclusive.
We have not yet begun negotiating the terms of a formal license,
including, but not limited to, exclusivity, sublicensing,
contribution of university staff and faculty in developing the
commercialization of the underlying technology, costs, or rights to
improvements on the underlying technology.
Medicine and Bioscience
Our focus in bioscience and sport medicine currently relates to
four products under development: Sterilal™ self-sanitizing devices,
PASS smart denture mouth guard, a handheld heart attack sensor, and
a painless melanoma detection system derived from the patents we
currently have options to license. We continue explore other
products and methods based on our current work to develop new
products and methods in the future.
Sterilal™
On September 11, 2019, we executed a one-year Option Agreement with
the University of Florida Research Foundation, Inc. to acquire a
license of certain patented technology related to self-sterilizing
medical devices. The technology is described as Self-Sterilizing
Device Using Plasma Fields. This self-generated plasma field
provides for self-sterilization of devices used in medical
procedures, drug delivery, consumer products, and food preparation
and to surfaces, affording them self-sterilizing properties. The
Sterilal™ product is a unique medical sterilization process
technology. The self-sterilization technology utilizes plasma
energy to provide self-sterilizing properties for medical devices,
equipment, and surfaces. The process neutralizes contamination in
seconds using a self-generated plasma field, while simultaneously
minimizing risk of exposure and offering the highest levels of
sterility.
Developed by researchers at a major Florida university, the
Sterilal™ is a sterilization technique that enables medical devices
to maintain a constant state of sterilization for fast, economical,
and safe reuse or disposal. Built into a device itself, the
self-sterilization could potentially apply to numerous medical
devices such as scalpels, syringes, and catheters, as well as
various surfaces that come into contact with patients and
healthcare workers.
The Sterilal™’s self-generated plasma field offers numerous
advantages over present methods of sterilization of medical
devices. This self-generated plasma field allows self-sterilization
of objects, apparatuses, and surfaces. As the field neutralizes
contamination in seconds, it allows reuse of devices and equipment,
which reduces time, costs, and inventory. The process further
eliminates the need for toxic chemicals used in traditional
sterilization procedures, reducing potential exposure and related
hazards.
Flexible and adaptable, the device-specific technology can be
applied to any surface of any shape or size. The plasma field
utilizes inexpensive electrodes, insulators, and electro-active
components that ensure easy and cost-efficient manufacturing.
The Sterilal™ comes as a response to the CDC’s estimated 76 million
illnesses, 325,000 hospitalizations, and 5,200 deaths that occur in
the United States each year due to some form of contamination. Once
applied, the Sterilal™ can effectively self-sterilize devices used
in medical procedures, drug delivery, consumer products, and food
preparation affording them with self-sterilizing properties.
Applications
Technique that affords self-sterilizing properties to medical
devices as well as equipment or surfaces that require a constant
state of sterilization for medical procedures, drug delivery,
consumer products, or food preparation equipment
Advantages
|
● |
Neutralizes contamination in
seconds using a self-generated plasma field, minimizing risk of
exposure and offering the highest levels of sterility |
|
● |
Allows reuse of devices and
equipment, reducing costs, time, and inventory |
|
● |
Utilizes inexpensive electrodes,
insulators, and electro-active components, ensuring easy and
cost-efficient manufacturing |
|
● |
Eliminates the need for toxic
chemicals used in traditional sterilization procedures, reducing
potential exposure and related hazards |
|
● |
Applies to surfaces of various
shapes and sizes, providing device-specific flexibility |
Technology
This self-generated plasma field allows self-sterilization of
objects, apparatuses, and surfaces. Traditionally, plasma discharge
involves placing a DC voltage potential across two electrodes. As
the voltage potential gradually increases, upon reaching the
breakdown voltage VB, the current and the amount of excitation of
the neutral gas becomes large enough to produce visible plasma.
Dielectric barrier discharge (DBD) involves one dielectric-coated
electrode that is typically exposed at the surface to the
surrounding atmosphere, while another electrode is embedded inside
a layer of insulator. University of Florida researchers have found
that with special DBD arrangements, a fast reduction of viable
cells by more than four orders of magnitude is possible within a
few seconds, even for UV resistant cells. Thus, a self-generating
plasma field is able to maintain a constant rate of sterilization
when built into medical devices and surfaces.
PASS
On September 14, 2019, we executed a one-year Option Agreement with
the University of Florida to acquire a license for certain patented
technology described as Multifunctional Smart Denture Mouth Guard
that Remotely Monitors Health, known as PASS. PASS is an electronic
smart mouth guard technology that remotely monitors an athletes’
fitness, can detect concussions, and will store the medical history
of the user.
The mouth guard provides real-time data readout of vital signs and
potential injuries sustained while playing sports. The market size
for wearable fitness monitors has increased by90 percent from 2018
to 2019. This device can record health information near the head
such as concussions and heat stroke. According to Statistic Brain
Research Institute, 35 million Americans between the ages of 5 and
18 play team sports, and at the high school sports level alone,
there were more than 250,000 reported concussions.
PASS smart mouth guard technology detects and collects data points
of an athlete’s heart rate and blood pressure using an infrared
sensor. It monitors the core body temperature, biting force, oral
diseases, HIV, Cancers and Diabetes through saliva. In total, there
are 11 sensors. The user-friendly computer interface simplifies
data collection which allows viewers to detect dangerous levels of
force experienced during activity.
Inexpensive, Rapid, Painless Melanoma Detection by Skin Odors
to Identify Malignancy Without Biopsy
In August 2019, we executed a one-year Option Agreement with the
University of Florida Research Foundation, Inc. to acquire a
license for certain patented technology related to non-invasive
melanoma detection. This inexpensive detection of the presence of
melanoma is real-time and uses vapor samples, enabling inexpensive
and painless diagnoses. Melanoma is the deadliest form of skin
cancer: Each year, an estimated 10,000 deaths occur from the
disease, and 75,000 new cases are diagnosed. Detects biomarkers
specific to melanoma increasing accuracy of diagnosis. The
device operates in real-time, eliminating delay. Uses vapor or
other sample, making diagnosis non-invasive and painless. These
methods of detecting forms of cancer, such as melanoma, analyze the
chemical compounds present in a sample of air surrounding
potentially cancerous tissue, without a need for prior excision of
the tissue. The advantage the system is that it is portable,
non-invasive detection of biomarkers specific to melanoma.
Technology
These methods of detecting forms of cancer, such as melanoma,
analyze the chemical compounds present in a sample of air
surrounding potentially cancerous tissue, without a need for prior
excision of the tissue. These methods include the chemical analysis
of the sample by mass spectrometry, liquid chromatography, gas
chromatography, ion mobility spectrometry, or high-field asymmetric
waveform ion mobility spectrometry. If a mole appears suspicious, a
doctor can aspirate a sample of air over it. Analyzing the gas
through ambient ionization and separation methods provides a
spectrum of the gas specimen. In real-time, a direct analysis
determines if the biomarkers for melanoma are present. This
eliminates the need for the widely used “wait-and-watch” approach,
as well as the need to biopsy every suspicious-looking mole,
allowing more focused biopsy procedures.
Handheld Heart Attack Sensor
On September 14, 2019 we executed a one-year Option Agreement with
the University of Florida Research Foundation, Inc. to acquire a
license for certain patented technology is described as Handheld
Electronic Heart-Attack Sensor. It is used to rapidly and
accurately determine blood-troponin levels. Prior to the onset of a
heart attack, blood-troponin concentration increases, marking a
period in which damage to the myocardial cells is still reversible.
Heart attacks represent one of the five most common reasons for
emergency room visits clearly demonstrating the need for more
urgent testing methods. This technology eliminates time-consuming,
expensive testing, eases the burden of stress, and safeguards
against the limited effectiveness of emergency room conditions.
Battery Technology
In March 2019, we executed a one-year Option Agreement with Florida
International University to acquire a license for certain patented
technology related to rapid battery charging systems. InCharge™ is
a patented, compact magnetic-based energy source that not only
produces energy but charges itself. As a new energy source,
InCharge™ holds promise to revolutionize the global energy market,
along with other energy-based applications.
InCharge™ is revolutionary technology. It is a new type of battery,
not an attachment. The device produces energy and it recharges
virtually instantly. It offers a large number of cycles, a long
storage time, as well as being compact in size. It will actually
replace slow, rechargeable batteries.
The InCharge™ magnetic-based battery device provides energy
yielding a large number of cycles with a long storage time. The
patents for InCharge™ also demonstrate the operation of an
instantly rechargeable device using a laboratory prototype.
Graphene
In November 2018, we executed a six-month Option Agreement with
Florida International University to acquire a license of patented
technology related to the application of graphene in de-icing
planes. The option has expired, but we are in continued
negotiations with the university. We are developing applications
for a unique de-icing application of graphene for use in the
airline industry. The new deicing application for aircraft will be
enhanced by graphene, the revolutionary carbon-based
nanotechnology. The 3D graphene foam−polymer composite can deice
aircraft with superior deicing efficiency. The patent on the new
material takes effect next week. Signet subsidiary, Signet Graphene
Technologies, Inc., has signed an agreement with Florida
International University’s Department of Mechanical and Materials
Engineering, where the new deicing material was created, to develop
and market the new product.
The material is a highly conductive multifunctional 3D graphene
foam−PDMS polymer composite, or 3D GrF for short, with
high-efficiency current-induced deicing capabilities. 3D GrF is a
significant technological innovation in aviation deicing. The 3D
graphene-polymer composite provides electrical current-induced
heating and deicing capabilities for aircraft and has demonstrated
impressive thermal stability to 100 electrical loading−unloading
cycles. Its application is intended to serve both the public and
private sectors.
FIU’s Department of Mechanical and Materials Engineering
successfully fabricated and submitted a patent application for the
3D GrF at their Plasma Forming Laboratory in Miami, Florida, in
2017.
Graphene’s high electrical and thermal conductivity, in combination
with its extremely low density, provides an intrinsic uniform
electrical and thermal transport path resulting in a lightweight
composite with enhanced multifunctional (electrical, thermal, and
mechanical) properties to serve as active deicing components on
aircraft structures. Applications of 3D GrF serve as lightweight
coatings and free-standing components with heating abilities in
structures operating at extremely low temperatures. The coating
also increases the tensile strength of the aircraft.
The innovative 3D GrF deicing technology comes at a time when the
aircraft deicing market is expected to experience remarkable growth
in the coming years. Its development is poised to enter a $1.30
billion deicing market that is presently limited by excessive costs
and toxic waste. Nations across the Northern Hemisphere such as
Canada, U.S., Russia, China, U.K, Germany, Poland, France, Finland,
Norway, Switzerland, and Japan among many others, are all expected
to witness an upsurge in demand of aircraft deicing systems.
The need for deicing technology has never been greater. Adhesion of
ice to the surfaces of aircraft operating in critically
low-temperature conditions and inclement weather severely
compromises an aircraft’s aerodynamic performance. Airport deicing
operations are necessitated and performed for safety of passengers
and crews, as well as to preserve the structural integrity of
aircrafts. The deicing operations are time consuming, causing
extensive flight delays for travelers and a heavy financial burden
for the airline industry.
Current efforts to reduce and mitigate the ice formation in
aircraft surfaces include the dispersion of chemicals, mechanical
removal, and electrical heating of surfaces have inherent
limitations. Besides the excessive costs and time of deicing each
aircraft individually, toxic chemicals pose environmentally
hazardous runoff. The chemical runoff is so hazardous, efforts to
contain, cleanup and even recycle the toxic ‘spills’ after each
deicing has become necessary, which adds to the excessive costs. As
for electrical heating systems, though they have proven suitable
for deicing, when implemented, the current-induced heating system
results in high power consumption, and therefore, higher costs.
As industry forecasts point to excessive demand and need for
improved deicing technology, FIU’s Mechanical and Materials
Engineering’s 3D GrF applications provide superior deicing
efficiency with the added benefit of increasing the tensile
strength of the aircraft. The results are not only cost effective,
but more environmentally friendly. Signet is well-positioned to
further the development and commercialization of this extraordinary
new deicing product enhanced by the use of graphene, the
revolutionary carbon-based nanotechnology.
Arc Melted Glass Piles
On October 8, 2019, we executed a one-year Option Agreement with
the University of South Florida Research Foundation, Inc. to
acquire a license of certain patented technology described as Arc
Melted Glass Piles of Structural Foundations Glass created by Arc
melting process producing a compressive glass in pilings. This
technology has proven critical advantages, such as increased
strength yielding a SKI of 36- concrete yields 4KSI. More cost
effective proving at least a 40% savings. Because of the large
compressive strength of glass, the required thickness can be
significantly reduced requiring smaller boreholes. Soil from the
borehole can be mixed with raw material additives of sodium
carbonate (soda ash) and fluxing agents, most readily available at
the site. The specific advantage of using glass as a piling
material is that is has the potential to provide higher strength at
a very low cost that parallels less demand on our natural
environment.
Intellectual Property
We do not currently hold any intellectual property.
Government Regulation
Currently, the Company is not subject to any specific governmental
regulation. However, as we begin to develop our applications for
commercial use, we may be subject to federal and/or state approval
for the products and uses. We may require approvals, permits, or
licenses issued by governmental agencies such as the US Food and
Drug Administration and the Federal Aviation Administration.
Regarding products, methods, and uses that do not require approvals
from governmental bodies, we may be subject to liabilities related
to the messaging from the Federal Communication Commission and the
Federal Trade Commission.
Employees
As of the date of this filing we currently have no employees,
except our executive team, which consists of 1 person.
Key Consultants
The Company does not currently have any key consultants under
contract. The Company is working with professionals, such as
lawyers and accountants and brokers as needed.
Available Information
Our website is located at www.signetinternationalholdings.com. We
will make available on our website, free of charge, copies of our
annual reports on Form 10- K, quarterly reports on Form 10-Q,
current reports on Form 8-K and amendments to those reports, as
applicable and as soon as reasonably practicable after we
electronically file or furnish such materials to the Securities and
Exchange Commission. Our website and the information contained
therein or connected thereto are not intended to be incorporated
into this registration statement.
You may also read and copy any materials we file with the SEC at
the SEC’s Public Reference Room, located at 100 F Street, N.E.,
Washington, DC 20549. Information on the operation of the Public
Reference Room may be obtained by calling the SEC at
1-800-SEC-0330. The SEC maintains an Internet site that contains
reports, proxy and information statements, and other information
regarding issuers that file electronically with the SEC at
http://www.sec.gov.
ITEM 1A. RISK
FACTORS.
As a smaller reporting company, as defined by Rule 12b-2 of the
Exchange Act and in Item 10(f)(1) of Regulation S-K, we are
electing scaled disclosure reporting and therefore are not required
to provide the information requested by this item.
ITEM 2. FINANCIAL
INFORMATION
For financial reports, please see Item 15 and the exhibits
index below and corresponding exhibits, which are incorporated
herein by reference.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Forward Looking Statements
This Current report on Form 10 contains forward-looking statements
that involve risks and uncertainties. These statements relate to
future events or our future financial performance. In some cases,
you can identify forward-looking statements by terminology
including “could”, “may”, “will”, “should”, “expect”, “plan”,
“anticipate”, “believe”, “estimate”, “predict”, “potential” and the
negative of these terms or other comparable terminology. These
statements are only predictions. Actual events or results may
differ materially.
While these forward-looking statements, and any assumptions upon
which they are based, are made in good faith and reflect our
current judgment regarding the direction of our business, actual
results will almost always vary, sometimes materially, from any
estimates, predictions, projections, assumptions or other future
performance suggested in this report.
Significant Accounting Policies
Our discussion and analysis of our results of operations and
liquidity and capital resources are based on our consolidated
financial statements, which have been prepared in accordance with
accounting principles generally accepted in the United States. The
preparation of these consolidated financial statements requires us
to make estimates and judgments that affect the reported amounts of
assets, liabilities, revenues and expenses, and disclosure of
contingent assets and liabilities. On an ongoing basis, we evaluate
our estimates and judgments, including those related to valuation
of intangible assets, share-based payments, and income taxes. We
base our estimates on historical and anticipated results and trends
and on various other assumptions that we believe are reasonable
under the circumstances, including assumptions as to future events.
These estimates form the basis for making judgments about the
carrying values of assets and liabilities that are not readily
apparent from other sources. By their nature, estimates are subject
to an inherent degree of uncertainty. Actual results that differ
from our estimates could have a significant adverse effect on our
operating results and financial position.
Emerging Growth Company
We qualify as an “emerging growth company” under the JOBS Act. As a
result, we are permitted to, and intend to, rely on exemptions from
certain disclosure requirements. For so long as we are an emerging
growth company, we will not be required to:
| |
● |
have an auditor report on our internal controls
over financial reporting pursuant to Section 404(b) of the
Sarbanes-Oxley Act; |
| |
● |
comply with any requirement that may be adopted
by the Public Company Accounting Oversight Board regarding
mandatory audit firm rotation or a supplement to the auditor’s
report providing additional information about the audit and the
financial statements (i.e., an auditor discussion and
analysis); |
| |
● |
submit certain executive compensation matters to
shareholder advisory votes, such as “say-on-pay” and
“say-on-frequency;” and |
| |
● |
disclose certain executive compensation related
items such as the correlation between executive compensation and
performance and comparisons of the CEO’s compensation to median
employee compensation. |
In addition, Section 107 of the JOBS Act also provides that an
emerging growth company can take advantage of the extended
transition period provided in Section 7(a)(2)(B) of the Securities
Act for complying with new or revised accounting standards. In
other words, an emerging growth company can delay the adoption of
certain accounting standards until those standards would otherwise
apply to private companies. We have elected to take advantage of
the benefits of this extended transition period. Our financial
statements may therefore not be comparable to those of companies
that comply with such new or revised accounting standards.
We will remain an “emerging growth company” for up to five years,
or until the earliest of (i) the last day of the first fiscal year
in which our total annual gross revenues exceed $1 billion, (ii)
the date that we become a “large accelerated filer” as defined in
Rule 12b-2 under the Securities Exchange Act of 1934, which would
occur if the market value of our ordinary shares that is held by
non-affiliates exceeds $700 million as of the last business day of
our most recently completed second fiscal quarter or (iii) the date
on which we have issued more than $1 billion in non-convertible
debt during the preceding three year period.
Uncertainties
Although we have been in operation for some time, we are still a
development stage company, and we have not generated any revenues
from our business activities. Thus, we anticipate that we will
require additional financing in order to complete our acquisition
activities. We currently do not have sufficient financing to fully
execute our business plan and there is no assurance that we will be
able to obtain the necessary financing to do so. Accordingly, there
is uncertainty about our ability to continue to operate if we
undergo any acquisition or to even undergo an acquisition.
Plan of Operations
The Company plans to continue to work research and development
based on the option to license intellectual properties and to
expand our portfolio of intellectual property and products.
As we approach the second Quarter of 2020, we are pleased with the
progress we have made. We have accomplished each phase of our
growth and we have remained consistent with our
responsibilities.
Our status as an emerging growth public company is materializing
before us. We have engaged a new scientist to help further develop
out technologies and interact with the several universities with
whom we have contracts. We hear from other universities on a
regular basis that tells us we are welcome to the fraternity of
research scientists, engineers, and inventors. We have increased
efforts to create more awareness of our presence by engaging a
social media specialist who will keep the public informed of all
our progress and assist us with shareholders relations. Our team is
growing and meeting our needs.
Since we will soon be fully reporting and currently filing, we have
engaged our new SEC legal counsel to guide us through the labyrinth
of compliance and the next steps to up-listing. We have also
retained our patent counsel to advise and instruct us on strategy
and enhancement of our patent rights, protecting us not only
domestically but also worldwide.
Since all of our technologies are trending, unique, and further
advanced than any others we know of on the market today, we must
maintain our edge and seek constant improvement to stay viable—and
we are doing just that.
Because of our efforts, we have our path laid out before us. Last
year´s strategy allowed us to take the proper steps to arrive at
this juncture. We are now proudly holding ourselves out to the
world as a viable and worthy consortium from which multinationals
can acquire advanced, patented technology. Although our
technologies may necessitate some retooling and possibly an
avant-garde approach in implementing, we feel that in considering
the alternative technologies presently available, ours is the
superior choice.
We have completed these efforts to identify and locate a niche,
function, and purpose for all our products. Inasmuch as our
products are ‘green’ in nature and innovative in design, we feel
these technologies can easily be integrated into daily life to the
benefit of all. We all will see great progress and never to look
back.
Results of Operations
For the Three Months Ended March 31, 2020 and 2019
Revenue:
The Company is in its development stage. For the three months ended
March 31, 2020 and 2019, the Company did not have any revenue
generating operations, nor did the Company has any related cost of
goods sold.
Operating Expenses:
For the three months ended March 31, 2020, the Company had total
operating expenses of $257,026 primarily consisting of
professional fees of $47,468, consulting fees of $193,361, public
company expenses of $2,840, lease expense of $3,811, compensation
expense of $3,150, research and development expenses of $1,500,
travel and entertainment of $2,057, and office expense of
$2,839.
For the three months ended March 31, 2019, the Company had total
operating expenses of $14,042 primarily consisting of consulting
fees of $2,050, public company expenses of $2,287, lease expense of
$1,472, compensation expense of $3,000, research and development
expenses of $1,500, travel and entertainment of $1,866, and office
expense of $1,868.
Net Loss:
The Company’s net loss for the three months ended March 31, 2020
and 2019 was $257,026 and $14,042, respectively.
Liquidity and Capital Resources
As of March 31, 2020, the Company had total current assets of
$185,177, which primarily consisted of cash of $178,295 and prepaid
expenses of $6,882. As of December 31, 2019, the Company had total
current assets of $148,293, which primarily consisted of cash of
$106,661, prepaid expenses of $16,632 and subscription receivable
of $25,000.
As of March 31, 2020, we had a working capital surplus of $132,051,
as compared to a working capital deficit of $342,442 as of December
31, 2019. In 2020, the Company reduced total accrued salary by
$460,952 to our Chief Executive Officer in connection with the
issuance of 829,721 shares of common stock valued at $94,422 and
$366,530 of contributed capital from the forgiveness of accrued
salaries in January 2020 thereby eliminating the accrued salary due
to officer and thereby reduced the working capital deficit.
The Company will have additional capital requirements during fiscal
year 2020. Currently, the Company does not have any revenue
generating business operations, nor does the Company currently have
the capital resources required to execute its business strategy.
Therefore, the Company will attempt to raise additional capital
through the sale of our securities.
The Company cannot assure that we will have sufficient capital to
finance our growth and/or business operations or that such capital
will be available on terms that are favorable to the Company or at
all. The Company is currently incurring operating losses that are
expected to continue for the foreseeable future. During the three
months ended March 31, 2020, we received total proceeds of $106,017
from sale of common stock and collected $25,000 of subscription
receivable which were used for working capital purposes. We have
incurred legal, accounting, consulting, rent and office expense
during our operations.
We anticipate generating losses and, therefore, may be unable to
continue operations in the future. If we require additional
capital, we would have to issue debt or equity or enter into a
strategic arrangement with a third party.
Going Concern Consideration
As reflected in the accompanying unaudited consolidated financial
statements, the Company had a net loss and net cash used in
operations of $257,026 and $59,383, respectively, for the three
months ended March 31, 2020 and had no revenues during the three
months ended March 31, 2020. Additionally, the Company had an
accumulated deficit of $7,756,773 at March 31, 2020. These matters
raise substantial doubt about the Company’s ability to continue as
a going concern for twelve months from the issuance date of this
report.
The ability of the Company to continue as a going concern is
dependent on the Company’s ability to implement its business plan,
raise capital, and generate revenues. Currently, management is
seeking capital to implement its business plan. Management
believes that the actions presently being taken provide the
opportunity for the Company to continue as a going concern. The
unaudited consolidated financial statements do not include any
adjustments that might be necessary if the Company is unable to
continue as a going concern.
Cash Flows
| |
|
Three Months Ended
March 31, |
|
| |
|
2020 |
|
|
2019 |
|
| Net Cash Used in
Operating Activities |
|
$ |
(59,383 |
) |
|
$ |
(25,311 |
) |
| Net Cash
Provided by Financing Activities |
|
|
131,017 |
|
|
|
2,000 |
|
| Net Change in
Cash |
|
$ |
71,634 |
|
|
$ |
(23,311 |
) |
Net Cash Used in Operating Activities:
Net cash used in operating activities was $59,383 and $23,311 for
the three months ended March 31, 2020 and 2019, respectively.
|
● |
During the three
months ended March 31, 2020 cash was used primarily as
follows: |
|
o |
a decrease in our prepaid expenses
and other current asset of $9,750; |
|
o |
a increase in our total accounts
payable and accrued expenses of $22,957 and; |
|
o |
non-cash operating expense of stock
issued for services of $164,900. |
|
● |
During the three
months ended March 31, 2019 cash was used as follows: |
|
o |
an increase in our prepaid expenses
and other current asset of $8,616; |
|
o |
a decrease in our total accounts
payable and accrued expenses of $3,003 and; |
|
o |
non-cash operating expense of stock
issued for services of $350. |
Net Cash Provided by in Financing Activities:
Net cash provided by financing activities was $131,017 and $2,000
for the three months ended March 31, 2020 and 2019,
respectively.
|
● |
During the three
months ended March 31, 2020, we received proceeds of $106,017 from
sale of Company’s common stock and collected $25,000 from
subscription receivable. |
|
● |
During the three
months ended March 31, 2019, we received proceeds of $2,000 from
sale of the Company’s common stock. |
Years ended December 31, 2019 and 2018
Revenue. The Company is in its development stage. For the
years ended December 31, 2019 and 2018, the Company did not have
any revenue generating operations, nor did the Company has any
related cost of goods sold.
Operating Expenses. For the year ended December 31, 2019,
the Company had total operating expenses of $114,025 primarily
consisting of professional fees of $8,800, consulting fees of
$46,335, public company expenses of $6,826, lease expense of
$14,854, compensation expense of $12,150 and office expense of
$9,769. For the year ended December 31, 2018, our total operating
expenses were $80,996 primarily consisting of professional fees of
$7,700, consulting fees of $20,914, public company expenses of
$6,739, lease expense of $14,578, compensation expense of $12,000
and office expense of $12,125.
Net Loss. The Company’s net loss for the years ended
December 31, 2019 and 2018 was $114,750 and $80,996,
respectively.
Liquidity and Capital Resources
As of December 31, 2019, the Company had total current assets of
$148,293, which primarily consisted of cash of $106,661, prepaid
expenses of $16,632 and subscription receivable of $25,000. In
fiscal year 2018, we had $49,107 which primarily consisted of cash
of $48,725 and prepaid expenses of $382. As of December 31, 2019,
we had a working capital deficit of $342,442, as compared to a
working capital deficit of $889,858 as of December 31, 2018.
The Company will have additional capital requirements during fiscal
year 2020. Currently, the Company does not have any revenue
generating business operations, nor does the Company currently have
the capital resources required to execute its business strategy.
Therefore, the Company will attempt to raise additional capital
through the sale of our securities.
The Company cannot assure that we will have sufficient capital to
finance our growth and/or business operations or that such capital
will be available on terms that are favorable to the Company or at
all. The Company is currently incurring operating deficits that are
expected to continue for the foreseeable future. We received
proceeds of $172,556 from sale of common stock during the year
ended December 31, 2019 used for working capital purposes.
Additionally, between January 2020 and March 2020, the Company
received total gross proceeds of $64,516 from sale of common stock.
We have incurred legal, accounting, consulting, rent and office
expense during our operations.
We anticipate generating losses and, therefore, may be unable to
continue operations in the future. If we require additional
capital, we will have to issue debt or equity or enter into a
strategic arrangement with a third party.
Going Concern Consideration
As reflected in the accompanying consolidated financial statements,
the Company had no revenue generating operations. In addition,
there is a working capital deficiency of approximately $342,000,
accumulated deficit of approximately $7,500,000 and a stockholder’s
deficiency of approximately $332,000 as of December 31, 2019. This
raises substantial doubt about its ability to continue as a going
concern. The ability of the Company to continue as a going concern
is dependent on the Company’s ability to raise additional capital
and implement its business plan. The consolidated financial
statements do not include any adjustments that might be necessary
if the Company is unable to continue as a going concern.
As of December 31, 2019 we had a working capital deficit in the
amount of $342,442. We reduced total accrued salaries by
$460,952 to our Chief Executive Officer in connection with the
issuance of 829,721 shares of common stock and contributed capital
from the forgiveness of accrued salaries in January 2020 thereby
eliminating the remaining liability of accrued salaries due to
officer and potentially reduces the working capital deficit.
Management believes that actions presently being taken to obtain
additional funding and implement its strategic plans provide the
opportunity for the Company to continue as a going concern.
Liquidity and Capital Resources
| |
|
For the Year ended
December 31,
|
|
| |
|
2019 |
|
|
2018 |
|
| Net Cash Used in
Operating Activities |
|
$ |
(109,620 |
) |
|
$ |
(67,784 |
) |
| Net Cash
Provided by Financing Activities |
|
|
167,556 |
|
|
|
107,740 |
|
| Net
Increase in Cash |
|
$ |
57,936 |
|
|
$ |
39,956 |
|
Net cash used in operating activities was $109,620 for the year
ended December 31, 2019 as compared to $67,784 for the year ended
December 31, 2018. During the year ended December 31, 2019 cash was
used as follows:
| |
● |
net loss was $114,750,
and |
| |
● |
an increase in our prepaid expenses of
approximately $16,250, |
| |
● |
an increase in our total accounts payable and
accrued expenses of $2,340, and |
| |
● |
non-cash operating expense of stock-based
compensation of $18,618 and deferred rent of $422. |
During the year ended December 31, 2018 cash was used as
follows:
| |
● |
net loss was $80,996, and |
| |
● |
a decrease in our total accounts payable and
accrued expenses of $6,202, and |
| |
● |
non-cash operating expense of stock-based
compensation of $19,414. |
Net cash provided by financing activities for the year ended
December 31, 2019 was $167,556 as compared to approximately
$107,740 for the year ended December 31, 2018. During the year
ended December 31, 2019, we received proceeds of $172,556 from sale
of stock offset by purchase and cancellation of common stock of
$5,000. During the year ended December 31, 2018, we received
proceeds of approximately $107,740 from the sale of
stock.
We currently have no external sources of liquidity, such as
arrangements with credit institutions or off-balance sheet
arrangements that will have or are reasonably likely to have a
current or future effect on our financial condition or immediate
access to capital. We expect to require additional financing to
fund our current operations for fiscal 2020. There is no assurance
that we will be able to obtain additional financing on acceptable
terms or at all.
If we are unable to raise the funds required to fund our
operations, we will seek alternative financing through other means,
such as borrowings from institutions or private individuals. There
can be no assurance that we will be able to raise the capital we
need for our operations from the sale of our securities. We have
not located any sources for these funds and may not be able to do
so in the future. We expect that we will seek additional financing
in the future. However, we may not be able to obtain additional
capital or generate sufficient revenues to fund our operations. If
we are unsuccessful at raising sufficient funds, for whatever
reason, to fund our operations, we may be forced to cease
operations.
Critical Accounting Policies
The discussion and analysis of our consolidated financial condition
and consolidated results of operations are based upon our
consolidated financial statements, which have been prepared in
accordance with U.S. generally accepted accounting principles. The
preparation of our financial statements requires us to make
estimates and judgments that affect the reported amounts of assets,
liabilities, revenues and expenses, and related disclosure of
contingent assets and liabilities. On an on-going basis, we
evaluate our estimates based on historical experience and on
various other assumptions that are believed to be reasonable under
the circumstances, the results of which form the basis for making
judgments about the carrying values of assets and liabilities that
are not readily apparent from other sources. Actual results may
differ from these estimates under different assumptions or
conditions. Management believes the following critical accounting
policies affect the significant judgments and estimates used in the
preparation of the consolidated financial statements.
Use of Estimates
The preparation of the consolidated financial statements in
conformity with accounting principles generally accepted in the
U.S. requires management to make estimates and assumptions that
affect the reported amounts of assets, liabilities, revenues,
expenses, and the related disclosures at the date of the financial
statements and during the reporting period. Actual results could
materially differ from these estimates. Significant estimates
include the valuation of equity-based instruments issued for other
than cash, and the valuation allowance on deferred tax assets.
Fair value of financial instruments
The Company follows ASC 820, “Fair Value Measurements and
Disclosures” (“ASC 820”), for assets and liabilities measured at
fair value on a recurring basis. ASC 820 establishes a common
definition for fair value to be applied to existing generally
accepted accounting principles that require the use of fair value
measurements, establishes a framework for measuring fair value and
expands disclosure about such fair value measurements.
ASC 820 defines fair value as the price that would be received to
sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date.
Additionally, ASC 820 requires the use of valuation techniques that
maximize the use of observable inputs and minimize the use of
unobservable inputs. These inputs are prioritized below:
| Level
1: |
Observable inputs such as quoted market prices in
active markets for identical assets or liabilities |
| Level 2: |
Observable market-based inputs or unobservable
inputs that are corroborated by market data |
| Level 3: |
Unobservable inputs for which there is little or
no market data, which require the use of the reporting entity’s own
assumptions. |
The Company analyzes all financial instruments with features of
both liabilities and equity under the Financial Accounting Standard
Board’s (“FASB”) accounting standard for such instruments. Under
this standard, financial assets and liabilities are classified in
their entirety based on the lowest level of input that is
significant to the fair value measurement.
Stock-Based Compensation
The Company accounts for employee stock-based compensation in
accordance with ASC 718-10, “Share-Based Payment,” which
requires the measurement and recognition of compensation expense
for all share-based payment awards made to employees and directors
including employee stock options, restricted stock awards, and
employee stock purchases based on estimated fair values.
In June 2018, the FASB issued ASU 2018-07, Compensation - Stock
Compensation (Topic 718). This update is intended to reduce cost
and complexity and to improve financial reporting for share-based
payments issued to non-employees (for example, service providers,
external legal counsel, suppliers, etc.). The ASU expands the scope
of Topic 718, Compensation-Stock Compensation, which currently only
includes share-based payments issued to employees, to also include
share-based payments issued to non-employees for goods and
services. Consequently, the accounting for share-based payments to
non-employees and employees will be substantially aligned. This
standard will be effective for financial statements issued by
public companies for the annual and interim periods beginning after
December 15, 2018. Early adoption of the standard is permitted. The
standard will be applied in a retrospective approach for each
period presented. Management adopted this standard on January 1,
2019.
Determining Fair Value Under ASC 718-10
The Company estimates the fair value of stock options granted using
the Black-Scholes option-pricing formula. This fair value is then
amortized on a straight-line basis over the requisite service
periods of the awards. The Company’s determination of fair value
using an option-pricing model is affected by the stock price as
well as assumptions regarding the number of highly subjective
variables.
The Company estimates volatility based upon the historical stock
price of the Company and estimates the expected term for employee
stock options using the simplified method for employees and
directors and the contractual term for non-employees. The risk-free
rate is determined based upon the prevailing rate of United States
Treasury securities with similar maturities.
Leases
In February 2016, the Financial Accounting Standards Board (“FASB”)
issued ASU 2016-02, Leases (Topic 842). The updated guidance
requires lessees to recognize lease assets and lease liabilities
for most operating leases. In addition, the updated guidance
requires that lessors separate lease and non-lease components in a
contract in accordance with the new revenue guidance in ASC 606.
This guidance is effective for interim and annual reporting periods
beginning after December 15, 2018. The Company adopted this
guidance effective January 1, 2019.
On January 1, 2019, the Company adopted ASU No. 2016-02, applying
the package of practical expedients to leases that commenced before
the effective date whereby the Company elected to not reassess the
following: (i) whether any expired or existing contracts contain
leases and; (ii) initial direct costs for any existing leases. For
contracts entered into on or after the effective date, at the
inception of a contract the Company assessed whether the contract
is, or contains, a lease. The Company’s assessment is based on: (1)
whether the contract involves the use of a distinct identified
asset, (2) whether we obtain the right to substantially all the
economic benefit from the use of the asset throughout the period,
and (3) whether it has the right to direct the use of the asset.
The Company will allocate the consideration in the contract to each
lease component based on its relative stand-alone price to
determine the lease payments.
Operating lease ROU assets represents the right to use the leased
asset for the lease term and operating lease liabilities are
recognized based on the present value of future minimum lease
payments over the lease term at commencement date. As most leases
do not provide an implicit rate, the Company use an incremental
borrowing rate based on the information available at the adoption
date in determining the present value of future payments. Lease
expense for minimum lease payments is amortized on a straight-line
basis over the lease term and is included in general and
administrative expenses in the consolidated statements of
operations.
Recent Accounting Pronouncements
In July 2017, the FASB issued ASU 2017-11 “Earnings
Per Share” (Topic 260). The amendments in the update change the
classification of certain equity-linked financial instruments (or
embedded features) with down round features. The amendments also
clarify existing disclosure requirements for equity-classified
instruments. For freestanding equity-classified financial
instruments, the amendments require entities that present earnings
per share (“EPS”) in accordance with Topic 260, Earnings Per Share,
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 would be 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). 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. The adoption of this guidance had no material
impact on its accounting and disclosures and there was no
cumulative effect.
In August 2018, the FASB issued ASU 2018-13, “Changes to
Disclosure Requirements for Fair Value Measurements”, which will
improve the effectiveness of disclosure requirements for recurring
and nonrecurring fair value measurements. The standard removes,
modifies, and adds certain disclosure requirements, and is
effective for fiscal years, and interim periods within those fiscal
years, beginning after December 15, 2019. The Company is assessing
ASU 2018-07 and does not expect it to have a material impact on its
accounting and disclosures.
Other accounting standards which were not effective until after
December 31, 2019 are not expected to have a material impact on the
Company’s financial position or results of operations.
ITEM 3.
PROPERTIES
In January 2018, the Company entered into a one-year sub-lease
agreement related to its leased office facilities in Palm
Beach, FL with the CEO of the Company. The lease shall
automatically be extended for successive one-year renewal term not
to exceed 5 annual renewal terms in total unless the landlord or
tenant gives a written notice of non-renewal on or before 30 days
prior to expiration of the term. The lease currently requires
monthly payments of approximately $1,136 plus sales tax and the
Company is not responsible for any additional charges for common
area maintenance. The monthly rent will increase by 2% at the end
of each year.
ITEM 4. SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of the date of this report, the
total number of shares owned beneficially by each of our directors,
officers and key employees, individually and as a group, and the
present owners of 5% or more of our total outstanding shares. The
stockholders listed below have direct ownership of his/her shares
and possess voting and dispositive power with respect to the
shares.
|
Name |
|
# of Shares Beneficially Owned |
|
|
Percentage of
Class1 |
|
|
Total Voting Rights |
|
| Ernesto W. Letiziano –
Common |
|
|
1,810,920 |
|
|
|
11.72 |
% |
|
|
2.77 |
% |
| Ernesto W. Letiziano – Series A Super
Preferred |
|
|
5,000,000 |
|
|
|
100.00 |
% |
|
|
76.39 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| All officers and
directors as a group |
|
|
|
|
|
|
|
|
|
|
79.16 |
% |
|
1) |
Series A Super Preferred Shares
have ten (10) votes per share. |
ITEM 5.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.
The names, ages and positions of our directors and executive
officers are as follows:
|
Name |
|
Age |
|
Position |
|
Position Held
Since |
| Ernest W. Letiziano |
|
80 |
|
Director/President |
|
2005 |
Our bylaws provide that the number of directors shall be nine (9)
or less. Our bylaws also provide that directors may be removed with
or without cause by the holders of a majority of the shares then
entitled to vote at an election of directors. Furthermore, any
vacancy on our board of directors, however occurring, including a
vacancy resulting from an increase in the size of our board, may
only be filled by the affirmative vote of a majority of our
directors then in office even if less than a quorum. Any director
so chosen shall hold office until the next annual election and
until their successor(s) are duly elected and shall qualify, unless
sooner replaced. The classification of directors, together with the
limitations on removal of directors and treatment of vacancies, has
the effect of making it more difficult for stockholders to change
the composition of our board of directors. Our executive officers
are elected by the board of directors and their terms of office are
at the discretion of the board of directors, subject to terms and
conditions of their respective employment agreements, if any.
Pursuant to our amended bylaws we have indemnified our officers and
directors to the fullest extent allowed under Delaware law.
Ernest W. Letiziano Chief Executive Officer, the Board of
Directors as of July 8, 2005. Mr. Letiziano has 40 years of
experience in finance, business and sports and entertainment. After
serving his internship with Haskins & Sells, CPA’s,
Mr. Letiziano sat for his CPA Certificate in Pennsylvania. In
1964 he received his Registered Municipal Accountant’s Certificate
to practice in New York, New Jersey, and Pennsylvania. He was
employed with Haskins and Sells from 1962-1969. Letiziano attended
Pennsylvania State University, where he majored in accounting and
economics. From 1970-1972, he co-owned an accounting practice in
Reading, PA. From 1992 to 1997, Mr. Letiziano has been
self-employed as an international monetarist facilitating financial
transactions for his clients. From 1988 to 1993, Mr. Letiziano
was CEO of Ringside International Broadcasting Corporation, (NASDAQ
symbol: RIBC). The company enjoyed over 4 years of success
in sports and entertainment TV programming. RIBC captured 98% of
the TV markets; in excess of 66 million TV households in the United
States. RIBC boxing shows also aired in eight foreign countries.
The company was sold in 1993 to a Houston based company.
Mr. Letiziano co-owned Classic Motor Car Company, an
automobile-manufacturer 1973-1976. From 1977 to 1982 he was Vice
President of First Florida Utilities, Inc., a five-state utility
public company (NASDAQ symbol SFFL). In 1982,
Mr. Letiziano founded, Ringside Events, Inc., a promotional
boxing enterprise. He has held commission licenses worldwide and
promoted and produced over 150 major events internationally. Mr.
Letiziano dedicates 100% of his professional time to the Company
and has for the past 5 years.
Family Relationships
There are no family relationships between any of the executive
officers and directors. Each director is elected at our annual
meeting of shareholders, if management deems it advisable to hold
an annual meeting of shareholders and holds office for a term of
one (1) year, or until his successor is elected and qualified.
Involvement in Certain Legal Proceedings
During the past ten (10) years, none of the following occurred with
respect to a present or former director, executive officer or
promoter of the Company: (1) any bankruptcy petition filed by or
against any business of which such person was a general partner or
executive officer either at the time of the bankruptcy or within
two years prior to that time; (2) any conviction in a criminal
proceeding or being subject to a pending criminal proceeding
(excluding traffic violations and other minor offenses); (3) being
subject to any order, judgment or decree, not subsequently
reversed, suspended or vacated, of any court of any competent
jurisdiction, permanently or temporarily enjoining, barring,
suspending or otherwise limiting his involvement in any type of
business, securities or banking activities; and (4) being found by
a court of competent jurisdiction (in a civil action), the
Commission or the commodities futures trading commission to have
violated a Federal or state securities or commodities law, and the
judgment has not been reversed, suspended or vacated.
ITEM 6. EXECUTIVE
COMPENSATION
This section discusses the principles underlying our policies and
decisions with respect to the compensation of our executive
officers who are named in the “Summary Compensation Table”, or our
“named executive officers”, and all material factors relevant to an
analysis of these policies and decisions.
Other than the employment agreements described above, the Company
has no other employment agreements in place with its officers,
directors or employees.
Summary Compensation Table
|
Name
And
Principal
Position
(a)
|
|
Year
(b)
|
|
|
Salary
(US$)
(c)
|
|
|
Bonus
(US$)
(d)
|
|
|
Stock
Awards
(US$)
(e)1
|
|
|
Option
Awards
(US$)
(f)
|
|
|
Non-
Equity
Incentive
Plan
Compensation
(US$)
(g)
|
|
|
Nonqualified
Deferred
Compensa-
tion
Earnings
(US$)
(h)
|
|
|
All
Other
Compen-
sation
(US$)
(i)
|
|
|
Total
(US$)
(j)
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Ernesto
W. Letiziano |
|
2019 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
$ |
12,000 |
|
|
$ |
12,000 |
|
| President |
|
2018 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
$ |
12,150 |
|
|
$ |
12,150 |
|
| Director |
|
2017 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Mr. Letiziano receives reimbursements for his apartment as
compensation for his services as represented by “All Other
Compensation” above. The monthly rent due is $1,000.
Mr. Letiziano had accrued compensation as officer of $460,952.
$94,422 was exchanged for 829,721 shares of common stock on January
24, 2020. The balance of $366,530 was forgiven by Mr. Letiziano and
charged against additional paid in capital.
The Company has no stock option, retirement, pension, or
profit-sharing programs for the benefit of directors, officers or
other employees, but our officers and directors may recommend
adoption of one or more such programs in the future.
There are no understandings or agreements regarding compensation
our management will receive after a business combination that is
required to be disclosed.
The Company does not have a standing compensation committee or a
committee performing similar functions, since the Board of
Directors has determined not to compensate the officers and
directors until such time that the Company becomes cash flow
positive.
This information includes the dollar value of base salaries, bonus
awards and number of stock options granted, and certain other
compensation, if any. The compensation discussed
addresses all compensation awarded to, earned by, or paid to our
named executive officer.
There are no other stock option plans, retirement, pension, or
profit-sharing plans for the benefit of our officers and directors
other than as described herein.
Long-Term Incentive Plan Awards
We do not have any long-term incentive plans that provide
compensation intended to serve as incentive for performance.
ITEM 7. CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
INDEPENDENCE
Mr. Tom Donaldson has agreed that upon the ability to cover costs
related to director and officer insurance, he would be willing to
be appointed President of the Company. Until such time, Mr.
Donaldson has no formal relationship with the Company.
Transactions with Related Persons
None.
Director Independence
We are not subject to listing requirements of any national
securities exchange or national securities association and, as a
result, we are not at this time required to have our board
comprised of a majority of “independent directors.”
Committees of Our Board of Directors and the Role of Our Board
in Risk Oversight
We do not have any independent directors. The board of directors
oversees our business affairs and monitors the performance of
management. At the present stage of our Company, our Board believes
that in the context of risk oversight, by combining the positions
of Chairman of the Board and Chief Executive Officer, the Board
gains valuable perspective that combines operational experience of
a member of management with the oversight focus of a member of the
Board.
The Company has not established any committees, including an Audit
Committee, a Compensation Committee or a Nominating Committee, or
any committee performing a similar function. The functions of those
committees are being undertaken by Board of Directors as a whole.
Because we do not have any independent directors, we believe that
the establishment of these committees would be more form over
substance.
The Company does not have a policy regarding the consideration of
any director candidates which may be recommended by our
stockholders, including the minimum qualifications for director
candidates, nor has our board of directors established a process
for identifying and evaluating director nominees. Further, when
identifying nominees to serve as director, while the Company does
not have a policy regarding the consideration of diversity in
selecting directors, at such time as we expand our Board, our Board
will seek to create a board of directors that is strong in its
collective knowledge and has a diversity of skills and experience
with respect to accounting and finance, management and leadership,
vision and strategy, business operations, business judgment,
industry knowledge and corporate governance. The Company has not
adopted a policy regarding the handling of any potential
recommendation of director candidates by our stockholders,
including the procedures to be followed. Our Board has not
considered or adopted any of these policies as we have never
received a recommendation from any stockholder for any candidate to
serve on our Board of Directors. Given our relative size, we do not
anticipate that any of our stockholders will make such a
recommendation in the near future. While there have been no
nominations of additional directors proposed, in the event such a
proposal is made, all members of our Board will participate in the
consideration of director nominees. In considering a director
nominee, it is likely that our Board will consider the professional
and/or educational background of any nominee with a view towards
how this person might bring a different viewpoint or experience to
our Board.
Our securities are not quoted on an exchange that has requirements
that a majority of our Board members be independent and we are not
currently otherwise subject to any law, rule or regulation
requiring that all or any portion of our board of directors include
“independent” directors, nor are we required to establish or
maintain an Audit Committee or other committee of our board of
directors.
Conflict of Interest
Our directors are not obligated to commit their time and attention
exclusively to our business and, accordingly, they may encounter
conflicts of interest in allocating their own time between our
operations and those of other businesses. Nevertheless, if the
execution of our business plan demands more time than is currently
committed by any of our officers, directors, consultants or
advisors, they will be under no obligation to commit such
additional time, and their failure to do so may adversely affect
our ability to carry on our business and successfully execute our
business plan.
Compensation of Directors
No directors have received compensation for their role as a
director of the Company.
Code of Ethics
The Company has not yet adopted a Code of Conduct or Code of Ethics
but intends to do so in the future.
ITEM 8. LEGAL
PROCEEDINGS
We may be involved from time to time in ordinary litigation,
negotiation and settlement matters that will not have a material
effect on our operations or finances. We are not aware of any
pending or threatened litigation against us or our officers and
directors in their capacity as such that could have a material
impact on our operations or finances.
ITEM 9. MARKET
PRICE OF AND DIVIDEND ON THE REGISTRANT’S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
Trading Information.
Our common stock has never been quoted or qualified for trading.
The transfer agent for our common stock is Olde Monmouth Stock
Transfer Co., Inc, with an address of 200 Memorial Pkwy, Atlantic
Heights, NJ 07716.
As of May 12, there were 181 holders of record of our common stock
with 18,709,057 shares outstanding.
Market Information
Our common shares are listed on the OTCPink exchanged operated by
OTC Markets, LLC under the symbol SIGN:Pink However, we intend to
make application with OTC Markets, LLC to be listed on their OTCQB
exchange, which would avail shareholders of the benefit of having
our common stock traded on a national exchange. OTC Pink is a
quotation service that does not require an entity to have a class
of securities registered under Section 12(g) or 15(g) of the
Exchange Act. Once this Form 10 Registration statement is deemed
effective, we will have our common stock registered under Section
12(g) of the Exchange Act.
Rule 144
In general, under Rule 144, beginning 90 days after the date of
this registration statement, any person who is not our affiliate
and has held their shares for at least six months, including the
holding period of any prior owner other than one of our affiliates,
may sell shares without restriction, subject to the establishment
of a trading market in our common stock and the availability of
current public information about us. In addition, under Rule 144,
any person who is not our affiliate and has not been our affiliate
at any time during the preceding three months and has held their
shares for at least one year, including the holding period of any
prior owner other than one of our affiliates, would be entitled to
sell an unlimited number of shares immediately upon the
establishment of a trading market in our common stock without
regard to whether current public information about us is
available.
Beginning 90 days after the date of this Form 10 filing, a person
who is our affiliate or who was our affiliate at any time during
the preceding three (3) months and who has beneficially owned
restricted securities for at least six (6) months, including the
holding period of any prior owner other than one of our affiliates,
is entitled to sell a number of shares within any three-month
period that does not exceed the greater of:
|
● |
1% of the number of shares of our
common stock then outstanding, or |
|
● |
if the class is listed on a stock
exchange, the greater of 1% or the average reported weekly trading
volume during the four weeks preceding the filing of a notice of
sale on Form 144. Unless or until we list on a higher exchange than
the OTC Bulletin Board or the OTC Markets our affiliates stock can
only be sold using the 1% measurement. |
Sales under Rule 144 by our affiliates are also subject to manner
of sale provisions and notice requirements and to the availability
of current public information about us.
Dividends
We have never declared or paid any cash dividends. We currently
intend to retain our future earnings, if any, to support operations
and to finance expansion and therefore we do not anticipate paying
any cash dividends on our common stock in the foreseeable
future.
Securities Authorized for Issuance Under Equity Compensation
Plans
None.
ITEM 10. RECENT SALE
OF UNREGISTERED SECURITIES
Please reference Note 4 of our Financial Statements.
ITEM 11.
DESCRIPTION OF REGISTRANT’S SECURITIES TO BE REGISTERED
General
Our authorized capital stock consists of 100,000,000 shares of
common stock, $0.001 par value per share, and 50,000,000 shares of
preferred stock, $0.001 par value per share. The following
description of our capital stock and provisions of our Certificate
of Incorporation, as amended, and Bylaws, is only a summary. You
should also refer to our Certificate of Incorporation, as amended,
a copy of which is incorporated by reference as an exhibit to this
registration statement, and our Bylaws, a copy of which is
incorporated by reference as an exhibit to this registration
statement.
Common Stock
We are authorized to issue up to a total of 100,000,000 shares of
common stock, par value $0.001 per share. The shares of common
stock are nonassessable, without pre-emption rights, and do not
carry cumulative voting rights. Holders of our common stock are
entitled to one vote for each share held on all matters submitted
to a vote of our stockholders. Holders of our common stock are
entitled to receive dividends if, and when, declared by our Board
of Directors.
Preferred Stock
On March 14, 2007, the Company formally designated a series of
Super Preferred Stock of the Company’s 50,000,000 authorized shares
of the capital preferred stock of the Corporation. The
designated Series A Convertible Super Preferred Stock (the “Series
A Super Preferred Stock”), consists of 5,000,000 shares, par value
$.001 per share, which shall have the following preferences,
powers, designations and other special rights:
| Voting: |
Holders of the Series A Super Preferred Stock
shall have ten (10) votes per share held on all matters submitted
to the shareholders of the Company for a vote
thereon. Each holder of these shares shall have the
option to appoint two additional members to the Board of
Directors. |
| Conversion
Right: |
Each share of Series A Super Preferred Stock
shall be convertible into ten (10) shares of common
stock. |
| |
|
| Dividends: |
The
holders of Series A Super Preferred Stock shall be entitled to
receive dividends or distributions on a pro rata basis with the
holders of common stock when and if declared by the Board of
Directors of the Company. Dividends shall not be
cumulative. No dividends or distributions shall be
declared or paid or set apart for payment on the Common Stock in
any calendar year unless dividends or distributions on the Series A
Preferred Stock for such calendar year are likewise declared and
paid or set apart for payment. No declared and unpaid
dividends shall bear or accrue interest. |
| Liquidation
Preference: |
Upon the liquidation, dissolution and winding up
of the Company, whether voluntary or involuntary, the holders of
the Series A Super Preferred Stock then outstanding shall be
entitled to, on a pro-rata basis with the holders of common stock,
distributions of the assets of the Corporation, whether from
capital or from earnings available for distribution to its
stockholders. |
The Board of Directors has the authority, without further action by
the shareholders, to issue, from time to time, preferred stock in
one or more series for such consideration and with such relative
rights, privileges, preferences and restrictions that the Board may
determine. The preferences, powers, rights and restrictions of
different series of preferred stock may differ with respect to
dividend rates, amounts payable on liquidation, voting rights,
conversion rights, redemption provisions, sinking fund provisions
and purchase funds and other matters. The issuance of preferred
stock could adversely affect the voting power or other rights of
the holders of common stock.
There were 5,000,000 shares of Series A preferred stock issued and
outstanding as of December 31, 2019 and 2018.
ITEM 12.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under our Bylaws, we may indemnify an officer or director who is
made a party to any proceeding, including a law suit, because of
his position, if he acted in good faith and in a manner he
reasonably believed to be in our best interest. We may advance
expenses incurred in defending a proceeding. To the extent that the
officer or director is successful on the merits in a proceeding as
to which he is to be indemnified, we must indemnify him against all
expenses incurred, including attorney’s fees. With respect to a
derivative action, indemnity may be made only for expenses actually
and reasonably incurred in defending the proceeding, and if the
officer or director is judged liable, only by a court order. The
indemnification is intended to be to the fullest extent permitted
by the laws of the State of Delaware.
Regarding indemnification for liabilities arising under the
Securities Act of 1933, which may be permitted to directors or
officers under Delaware law, we are informed that, in the opinion
of the Securities and Exchange Commission, indemnification is
against public policy, as expressed in the Act and is, therefore,
unenforceable.
ITEM 13. FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA
See Item 15 and the exhibits index below and corresponding
exhibits, which are incorporated herein by reference.
ITEM 14. CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE.
There have been no disagreements on accounting and financial
disclosures from the inception of our company through the date of
this Form 10
ITEM 15. FINANCIAL
STATEMENTS AND EXHIBITS
Unaudited annual financial statements as of and for the three
months ended March 31, 2020 and 2019 of Signet International
Holdings, Inc.
| |
● |
Consolidated
Balance Sheets as of March 31, 2020 (Unaudited) and December 31,
2019; |
| |
● |
Consolidated
Statements of Operations for the Three Months Ended March 31, 2020
and 2019 (Unaudited); |
| |
● |
Consolidated
Statements of Changes in Stockholders’ Equity (Deficit) for the
Three Months ended March 31, 2020 and 2019 (Unaudited); |
| |
● |
Consolidated
Statements of Cash Flows for the Three Months ended March 31, 2020
and 2019; and |
| |
● |
Condensed
Notes to Consolidated Financial Statements. |
Audited annual financial statements as of and for the years
ended December 31, 2019 and 2018 of Signet International Holdings,
Inc.
|
● |
Report
of Independent Registered Public Accounting Firm; |
|
● |
Consolidated
Balance Sheets as of December 31, 2019 and 2018; |
|
● |
Consolidated
Statements of Operations for the years ended December 31, 2019 and
2018; |
|
● |
Consolidated
Statements of Changes in Stockholders’ Deficit for the years ended
December 31, 2019 and 2018; |
|
● |
Consolidated
Statements of Cash Flows for the years ended December 31, 2019 and
2018; and |
|
● |
Notes
to Consolidated Financial Statements. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
| |
Signet
International Holdings, Inc. |
| |
(Name of
Registrant) |
| |
|
| Date: July 14, 2020 |
By: |
/s/ Ernesto W. Letiziano |
| |
|
Name: Ernesto W.
Letiziano |
| |
|
Title: President and
Director |
| |
|
Principal Executive
Officer |
| |
|
Principal Accounting and
Financial Officer |
Signet
International Holdings, Inc.
Contents
SIGNET INTERNATIONAL
HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED
BALANCE SHEETS
| |
|
March 31,
2020 |
|
|
December 31,
2019 |
|
| |
|
(Unaudited) |
|
|
|
|
| |
|
|
|
|
|
|
| ASSETS |
|
|
|
|
|
|
| CURRENT ASSETS: |
|
|
|
|
|
|
| Cash |
|
$ |
178,295 |
|
|
$ |
106,661 |
|
| Prepaid expenses and other current
assets |
|
|
6,882 |
|
|
|
16,632 |
|
| Subscription receivable |
|
|
- |
|
|
|
25,000 |
|
| |
|
|
|
|
|
|
|
|
| Total Current Assets |
|
|
185,177 |
|
|
|
148,293 |
|
| |
|
|
|
|
|
|
|
|
| NON-CURRENT ASSETS: |
|
|
|
|
|
|
|
|
| Operating lease right-of-use
asset, net |
|
|
33,293 |
|
|
|
35,811 |
|
| |
|
|
|
|
|
|
|
|
| TOTAL ASSETS |
|
$ |
218,470 |
|
|
$ |
184,104 |
|
| |
|
|
|
|
|
|
|
|
| LIABILITIES AND STOCKHOLDERS’ EQUITY
(DEFICIT) |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| CURRENT LIABILITIES: |
|
|
|
|
|
|
|
|
| Accounts payable and accrued
expenses |
|
$ |
42,350 |
|
|
$ |
19,393 |
|
| Accrued officer salary |
|
|
- |
|
|
|
460,952 |
|
| Operating lease obligation -
current portion |
|
|
10,776 |
|
|
|
10,390 |
|
| |
|
|
|
|
|
|
|
|
| Total Current Liabilities |
|
|
53,126 |
|
|
|
490,735 |
|
| |
|
|
|
|
|
|
|
|
| LONG-TERM LIABILITIES: |
|
|
|
|
|
|
|
|
| Operating lease obligation -
long-term portion |
|
|
22,975 |
|
|
|
25,843 |
|
| |
|
|
|
|
|
|
|
|
| Total
Liabilities |
|
|
76,101 |
|
|
|
516,578 |
|
| |
|
|
|
|
|
|
|
|
| Commitments and
Contingencies (see Note 5) |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| STOCKHOLDERS’ EQUITY (DEFICIT): |
|
|
|
|
|
|
|
|
|
Preferred stock, $0.001 par value; 50,000,000 shares authorized;
Series A Preferred stock ($0.001 Par Value; 5,000,000 Shares
Designated; 5,000,000 issued and outstanding) |
|
|
5,000 |
|
|
|
5,000 |
|
|
Common stock, $0.001 par value: 100,000,000 shares authorized;
19,219,057 and 15,954,358 shares issued and outstanding at March
31, 2020 and December 31, 2019, respectively |
|
|
19,219 |
|
|
|
15,954 |
|
| Additional paid
in capital |
|
|
7,874,923 |
|
|
|
7,146,319 |
|
|
Accumulated deficit |
|
|
(7,756,773 |
) |
|
|
(7,499,747 |
) |
| |
|
|
|
|
|
|
|
|
| Total
Stockholders’ Equity (Deficit) |
|
|
142,369 |
|
|
|
(332,474 |
) |
| |
|
|
|
|
|
|
|
|
| TOTAL LIABILITIES
AND STOCKHOLDERS’ EQUITY (DEFICIT) |
|
$ |
218,470 |
|
|
$ |
184,104 |
|
See
accompanying condensed notes to unaudited consolidated financial
statements.
SIGNET INTERNATIONAL
HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF OPERATIONS
(Unaudited)
| |
|
For
the three Months Ended |
|
| |
|
March 31, |
|
| |
|
2020 |
|
|
2019 |
|
| |
|
|
|
|
|
|
| NET
REVENUES |
|
$ |
- |
|
|
$ |
- |
|
| |
|
|
|
|
|
|
|
|
| OPERATING EXPENSES: |
|
|
|
|
|
|
|
|
|
Professional and consulting fees |
|
|
240,829 |
|
|
|
2,050 |
|
|
General and administrative |
|
|
16,197 |
|
|
|
11,992 |
|
| |
|
|
|
|
|
|
|
|
|
Total Operating Expenses |
|
|
257,026 |
|
|
|
14,042 |
|
| |
|
|
|
|
|
|
|
|
| LOSS FROM
OPERATIONS |
|
|
(257,026 |
) |
|
|
(14,042 |
) |
| |
|
|
|
|
|
|
|
|
| LOSS BEFORE PROVISION FOR INCOME
TAXES |
|
|
(257,026 |
) |
|
|
(14,042 |
) |
| |
|
|
|
|
|
|
|
|
| Provision for
income taxes |
|
|
- |
|
|
|
- |
|
| |
|
|
|
|
|
|
|
|
| NET LOSS |
|
$ |
(257,026 |
) |
|
$ |
(14,042 |
) |
| |
|
|
|
|
|
|
|
|
| NET LOSS PER
COMMON SHARE - Basic and diluted |
|
$ |
(0.01 |
) |
|
$ |
(0.00 |
) |
| |
|
|
|
|
|
|
|
|
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: |
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
18,309,076 |
|
|
|
12,829,794 |
|
See
accompanying condensed notes to unaudited consolidated financial
statements.
SIGNET INTERNATIONAL
HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(DEFICIT)
For
the Three Months Ended March 31, 2020 and 2019
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional |
|
|
|
|
|
Total
Stockholders’ |
|
|
|
|
Preferred Stock - Series A |
|
|
Common Stock |
|
|
Paid-in |
|
|
Accumulated |
|
|
Equity |
|
| |
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Deficit |
|
|
(Deficit) |
|
|
Balance, December 31, 2019 |
|
|
5,000,000 |
|
|
$ |
5,000 |
|
|
|
15,954,358 |
|
|
$ |
15,954 |
|
|
$ |
7,146,319 |
|
|
$ |
(7,499,747 |
) |
|
$ |
(332,474 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Sale of
common stock for cash |
|
|
- |
|
|
|
- |
|
|
|
981,500 |
|
|
|
982 |
|
|
|
105,035 |
|
|
|
- |
|
|
|
106,017 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Issuance
of common stock for accrued salaries |
|
|
- |
|
|
|
- |
|
|
|
829,721 |
|
|
|
830 |
|
|
|
93,592 |
|
|
|
- |
|
|
|
94,422 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Issuance
of common stock for services |
|
|
- |
|
|
|
- |
|
|
|
1,453,478 |
|
|
|
1,453 |
|
|
|
163,447 |
|
|
|
- |
|
|
|
164,900 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contributed capital by an officer through forgiveness of accrued
salaries |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
366,530 |
|
|
|
- |
|
|
|
366,530 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(257,026 |
) |
|
|
(257,026 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, March 31, 2020 |
|
|
5,000,000 |
|
|
$ |
5,000 |
|
|
|
19,219,057 |
|
|
$ |
19,219 |
|
|
$ |
7,874,923 |
|
|
$ |
(7,756,773 |
) |
|
$ |
142,369 |
|
| |
|
Preferred Stock - Series A |
|
|
Common Stock |
|
|
Additional
Paid-in |
|
|
Accumulated |
|
|
Total
Stockholders’ |
|
| |
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Deficit |
|
|
Deficit |
|
|
Balance, December 31, 2018 |
|
|
5,000,000 |
|
|
$ |
5,000 |
|
|
|
12,819,738 |
|
|
$ |
12,820 |
|
|
$ |
6,477,319 |
|
|
$ |
(7,384,997 |
) |
|
$ |
(889,858 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Sale of
common stock for cash |
|
|
- |
|
|
|
- |
|
|
|
20,000 |
|
|
|
20 |
|
|
|
1,980 |
|
|
|
- |
|
|
|
2,000 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Issuance
of common stock for services |
|
|
- |
|
|
|
- |
|
|
|
3,500 |
|
|
|
3 |
|
|
|
347 |
|
|
|
- |
|
|
|
350 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(14,042 |
) |
|
|
(14,042 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, March 31, 2019 |
|
|
5,000,000 |
|
|
$ |
5,000 |
|
|
|
12,843,238 |
|
|
$ |
12,843 |
|
|
$ |
6,479,646 |
|
|
$ |
(7,399,039 |
) |
|
$ |
(901,550 |
) |
See accompanying condensed notes to unaudited consolidated
financial statements.
SIGNET INTERNATIONAL
HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
| |
|
For
the Three Months Ended March 31, |
|
| |
|
2020 |
|
|
2019 |
|
| CASH
FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
|
| Net
loss |
|
$ |
(257,026 |
) |
|
$ |
(14,042 |
) |
| Adjustments
to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
|
|
|
|
| Stock
issued for services |
|
|
164,900 |
|
|
|
350 |
|
| Rent
expense |
|
|
36 |
|
|
|
- |
|
| Change
in operating assets and liabilities: |
|
|
|
|
|
|
|
|
| Prepaid
expenses and other current assets |
|
|
9,750 |
|
|
|
(8,616 |
) |
| Accounts
payable and accrued expenses |
|
|
22,957 |
|
|
|
(3,003 |
) |
| |
|
|
|
|
|
|
|
|
| NET
CASH USED IN OPERATING ACTIVITIES |
|
|
(59,383 |
) |
|
|
(25,311 |
) |
| |
|
|
|
|
|
|
|
|
| CASH
FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
| Issuance
of common stock for cash |
|
|
106,017 |
|
|
|
2,000 |
|
| Collection
of subscription receivable |
|
|
25,000 |
|
|
|
- |
|
| |
|
|
|
|
|
|
|
|
| NET
CASH PROVIDED BY FINANCING ACTIVITIES |
|
|
131,017 |
|
|
|
2,000 |
|
| |
|
|
|
|
|
|
|
|
| NET
CHANGE IN CASH |
|
|
71,634 |
|
|
|
(23,311 |
) |
| |
|
|
|
|
|
|
|
|
| CASH,
beginning of year |
|
|
106,661 |
|
|
|
48,725 |
|
| |
|
|
|
|
|
|
|
|
| CASH,
end of period |
|
$ |
178,295 |
|
|
$ |
25,414 |
|
| |
|
|
|
|
|
|
|
|
| SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION: |
|
|
|
|
|
|
|
|
| Cash
paid during the period for: |
|
|
|
|
|
|
|
|
| Interest |
|
$ |
- |
|
|
$ |
- |
|
| Income
taxes |
|
$ |
- |
|
|
$ |
- |
|
| |
|
|
|
|
|
|
|
|
| SUPPLEMENTAL
DISCLOSURE OF NON-CASH INVESTING AND FINANCING
ACTIVITIES: |
|
|
|
|
|
|
|
|
| Issuance
of common stock for accrued salaries |
|
$ |
94,422 |
|
|
$ |
- |
|
| Contributed
capital by an officer through forgiveness of accrued
salary |
|
$ |
366,530 |
|
|
$ |
- |
|
See
accompanying condensed notes to unaudited consolidated financial
statements.
Signet International
Holdings, Inc. and Subsidiaries
Condensed Notes to Unaudited Consolidated Financial
Statements
March 31, 2020
(Unaudited)
Note
1 - Organization and Description of Business
Signet
International Holdings, Inc. (the “Company”) is incorporated in the
State of Delaware. The Company’s current principal
business plan is to focus in developing advanced technologies,
energy solutions and medical devices. The Company has no operating
history as of yet.
Note
2 - Going Concern
The
accompanying unaudited consolidated financial statements are
prepared on a going concern basis which contemplates the
realization of assets and satisfaction of liabilities and
commitments in the normal course of business. As reflected in the
accompanying unaudited consolidated financial statements, the
Company had a net loss and net cash used in operations of $257,026
and $59,383, respectively, for the three months ended March 31,
2020 and had no revenues during the three months ended March 31,
2020 and 2019. Additionally, the Company had an accumulated deficit
of $7,756,773 as of March 31, 2020. These matters raise substantial
doubt about the Company’s ability to continue as a going concern
for twelve months from the issuance date of this report. The
ability of the Company to continue as a going concern is dependent
on the Company’s ability to implement its business plan, raise
capital, and generate revenues. Currently, management is seeking
capital to implement its business plan. Management believes
that the actions presently being taken provide the opportunity for
the Company to continue as a going concern. The unaudited
consolidated financial statements do not include any adjustments
that might be necessary if the Company is unable to continue as a
going concern.
Note
3 - Summary of Significant Accounting Policies
Basis
of presentation and principles of consolidation
The
accompanying unaudited consolidated financial statements have been
prepared in accordance with U.S. generally accepted accounting
principles (“GAAP”) for interim financial information. Accordingly,
they do not include all of the information and footnotes required
by U.S. GAAP for complete financial statements. In the opinion of
management, all adjustments (all of which are of a normal recurring
nature) considered necessary for a fair presentation have been
included. Operating results for the three months ended March 31,
2020 are not indicative of the results that may be expected for the
year ending December 31, 2020 or for any other future period. These
unaudited consolidated financial statements and the unaudited
condensed notes thereto should be read in conjunction with the
audited consolidated financial statements and notes thereto
included in the Company’s Registration of Securities on Form
10-12G, for the year ended December 31, 2019, filed with the
Securities and Exchange Commission (the “SEC”) on May 14, 2020. The
Company’s unaudited consolidated financial statements include the
financial statements of its three wholly-owned subsidiaries. All
inter-company balances and transactions have been eliminated in
consolidation. All wholly-owned subsidiaries were inactive
subsidiaries at March 31, 2020 and December 31, 2019 and for each
of the three months ended March 31, 2020 and 2019.
Use
of estimates
The
preparation of the unaudited consolidated financial statements in
conformity with accounting principles generally accepted in the
U.S. requires management to make estimates and assumptions that
affect the reported amounts of assets, liabilities, revenues,
expenses, and the related disclosures at the date of the financial
statements and during the reporting period. Actual results could
materially differ from these estimates. Significant estimates
include the valuation of equity-based instruments issued for other
than cash, valuation of right-of-use assets and liabilities and the
valuation allowance on deferred tax assets.
Risks
and uncertainties for development stage company
The
Company is considered to be in an early stage since we have not
commenced planned principal operations. Our activities since
inception include devoting substantially all of the Company’s
efforts to business planning and development. Additionally, the
Company has allocated a substantial portion of its time and
investment to the completion of the Company’s development
activities to launch its marketing plan and generate revenues and
to raising capital. The Company has not generated revenue from
operations and is currently in the development stage. The Company’s
activities during this early stage are subject to significant risks
and uncertainties.
Cash
and cash equivalents
The
Company considers all highly liquid investments with a maturity of
three months or less when acquired to be cash equivalents. The
Company did not have cash equivalents as of March 31, 2020 and
December 31, 2019. The Company places its cash with high credit
quality financial institutions. The Company’s accounts at these
institutions are insured by the Federal Deposit Insurance
Corporation (“FDIC”) up to $250,000. As of March 31, 2020, the
Company had not reached bank balances exceeding the FDIC insurance
limit on interest bearing accounts. To reduce its risk associated
with the failure of such financial institutions, the Company
evaluates at least annually the rating of the financial
institutions in which it holds deposits.
Signet International Holdings, Inc. and Subsidiaries
Condensed Notes to Unaudited Consolidated Financial
Statements
March 31, 2020
(Unaudited)
Fair
value measurements and fair value of financial
instruments
The
Company follows Accounting Standards Codification (“ASC”) 820,
“Fair Value Measurements and Disclosures” (“ASC 820”), for assets
and liabilities measured at fair value on a recurring basis. ASC
820 establishes a common definition for fair value to be applied to
existing generally accepted accounting principles that requires the
use of fair value measurements, establishes a framework for
measuring fair value and expands disclosure about such fair value
measurements.
ASC 820
defines fair value as the price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. Additionally,
ASC 820 requires the use of valuation techniques that maximize
the use of observable inputs and minimize the use of unobservable
inputs.
These
inputs are prioritized below:
| |
Level
1: |
Observable
inputs such as quoted market prices in active markets for identical
assets or liabilities |
| |
|
|
| |
Level
2: |
Observable
market-based inputs or unobservable inputs that are corroborated by
market data |
| |
|
|
| |
Level
3: |
Unobservable
inputs for which there is little or no market data, which require
the use of the reporting entity’s own assumptions.
|
The
Company analyzes all financial instruments with features of both
liabilities and equity under the Financial Accounting Standard
Board’s (“FASB”) accounting standard for such instruments. Under
this standard, financial assets and liabilities are classified in
their entirety based on the lowest level of input that is
significant to the fair value measurement.
The
estimated fair value of certain financial instruments, including
prepaid expense, accounts payable, accrued expenses and accrued
salaries are carried at historical cost basis, which approximates
their fair values because of the short-term nature of these
instruments.
Stock-based
compensation
The
Company accounts for stock-based compensation in accordance with
ASC 718-10, “Share-Based Payment,” which requires the
measurement and recognition of compensation expense for all
share-based payment awards made to non-employees for goods and
services, and to employees and directors including employee stock
options, restricted stock awards, and employee stock purchases
based on estimated fair values.
Determining
Fair Value Under ASC 718-10
The
Company estimates the fair value of stock options granted using the
Black-Scholes option-pricing formula. This fair value is then
amortized on a straight-line basis over the requisite service
periods of the awards. The Company’s determination of fair value
using an option-pricing model is affected by the stock price as
well as assumptions regarding the number of highly subjective
variables.
The
Company estimates volatility based upon the historical stock price
of the Company and estimates the expected term for employee stock
options using the simplified method for employees and directors and
the contractual term for non-employees. The risk-free rate is
determined based upon the prevailing rate of United States Treasury
securities with similar maturities.
Income
taxes
The
Company accounts for income taxes pursuant to the provision of ASC
740-10, “Accounting for Income Taxes” (“ASC 740-10”), which
requires, among other things, an asset and liability approach to
calculating deferred income taxes. The asset and liability approach
require the recognition of deferred tax assets and liabilities for
the expected future tax consequences of temporary differences
between the carrying amounts and the tax bases of assets and
liabilities. A valuation allowance is provided to offset any net
deferred tax assets for which management believes it is more likely
than not that the net deferred asset will not be
realized.
The
Company follows the provision of ASC 740-10 related to Accounting
for Uncertain Income Tax Positions. When tax returns are filed,
there may be uncertainty about the merits of positions taken or the
amount of the position that would be ultimately sustained. In
accordance with the guidance of ASC 740-10, the benefit of a tax
position is recognized in the financial statements in the period
during which, based on all available evidence, management believes
it is more likely than not that the position will be sustained upon
examination, including the resolution of appeals or litigation
processes, if any. Tax positions taken are not offset or aggregated
with other positions.
Signet International Holdings, Inc. and Subsidiaries
Condensed Notes to Unaudited Consolidated Financial
Statements
March 31, 2020
(Unaudited)
Tax
positions that meet the more likely than not recognition threshold
is measured at the largest amount of tax benefit that is more than
50 percent likely of being realized upon settlement with the
applicable taxing authority. The portion of the benefit associated
with tax positions taken that exceed the amount measured as
described above should be reflected as a liability for uncertain
tax benefits in the accompanying balance sheet along with any
associated interest and penalties that would be payable to the
taxing authorities upon examination. The Company believes its tax
positions are all more likely than not to be upheld upon
examination. As such, the Company has not recorded a liability for
uncertain tax benefits.
The
federal and state income tax returns of the Company are subject to
examination by the IRS and state taxing authorities, generally for
three years after they are filed.
Net
loss per share of common stock
Basic
net loss per share is computed by dividing the net loss by the
weighted average number of common shares during the period. Diluted
net loss per share is computed using the weighted average
number of common shares and potentially dilutive securities
outstanding during the period. At March 31, 2020 and December 31,
2019, the Company had 50,000,000 potentially dilutive securities
outstanding related to Series A Preferred Stock, for both periods.
Those potentially dilutive common stock equivalents were excluded
from the dilutive loss per share calculation as they would be
antidilutive due to the net loss.
Impairment
of long-lived assets
In
accordance with ASC 360-10, “Long-lived assets,” which
include property and equipment and intangible assets, are reviewed
for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable.
Recoverability of long-lived assets to be held and used is measured
by a comparison of the carrying amount of an asset to the estimated
undiscounted future cash flows expected to be generated by the
asset. If the carrying amount of an asset exceeds its estimated
undiscounted future cash flows, an impairment charge is recognized
by the amount by which the carrying amount of the asset exceeds the
fair value of the assets. Fair value is generally determined using
the asset’s expected future discounted cash flows or market value,
if readily determinable. During fiscal year 2017, the Company
impaired the total values of various literary rights. Management
believes the impaired literary rights have value to the Company and
will continue to market these rights.
Leases
In
February 2016, the Financial Accounting Standards Board (“FASB”)
issued ASU 2016-02, Leases (Topic 842). The updated guidance
requires lessees to recognize lease assets and lease liabilities
for most operating leases. In addition, the updated guidance
requires that lessors separate lease and non-lease components in a
contract in accordance with the new revenue guidance in ASC 606.
This guidance is effective for interim and annual reporting periods
beginning after December 15, 2018. The Company adopted this
guidance effective January 1, 2019.
On
January 1, 2019, the Company adopted ASU No. 2016-02, applying the
package of practical expedients to leases that commenced before the
effective date whereby the Company elected to not reassess the
following: (i) whether any expired or existing contracts contain
leases and; (ii) initial direct costs for any existing leases. For
contracts entered into on or after the effective date, at the
inception of a contract the Company assessed whether the contract
is, or contains, a lease. The Company’s assessment is based on: (1)
whether the contract involves the use of a distinct identified
asset, (2) whether we obtain the right to substantially all the
economic benefit from the use of the asset throughout the period,
and (3) whether it has the right to direct the use of the asset.
The Company will allocate the consideration in the contract to each
lease component based on its relative stand-alone price to
determine the lease payments.
Operating
lease ROU assets represents the right to use the leased asset for
the lease term and operating lease liabilities are recognized based
on the present value of future minimum lease payments over the
lease term at commencement date. As most leases do not provide an
implicit rate, the Company use an incremental borrowing rate based
on the information available at the adoption date in determining
the present value of future payments. Lease expense for minimum
lease payments is amortized on a straight-line basis over the lease
term and is included in general and administrative expenses in the
consolidated statements of operations.
Recent
accounting pronouncements
Accounting
standards which are not yet effective are not expected to have a
material impact on the Company’s financial position or results
of operations.
Signet
International Holdings, Inc. and Subsidiaries
Condensed
Notes to Unaudited Consolidated Financial Statements
March
31, 2020
(Unaudited)
Note
4 - Stockholders’ Equity (Deficit)
The
authorized capital stock consists of 100,000,000 shares of common
stock and 50,000,000 shares of preferred stock.
Common
stock
During
the Three Months Ended March 31, 2020:
|
● |
the
Company settled accrued salaries to its Chief Executive Officer
(“CEO”) in the amount of $94,422 by issuing 829,721 shares of
common stock at a price of approximately $0.11 per share, based on
recent private placement sales of common stock on the date of
grant. Additionally, the CEO forgave accrued salary of $366,530
(see Note 6). |
|
● |
the
Company issued an aggregate of 1,014,103 to two consultants of the
Company for services rendered with fair value of $115,405 or an
average of approximately $0.11 per share, based on recent private
placement sales of common stock on the dates of grants. |
|
● |
the
Company issued an aggregate of 439,375 to various consultants for
services rendered with fair value of $49,495 or an average of
approximately $0.11 per share, based on recent private placement
sales of common stock on the dates of grants. |
|
● |
the
Company received total gross proceeds of $106,017 or an average of
approximately $0.11 per share, from the sale of 981,500 shares of
the Company’s common stock. |
During
the Three Months Ended March 31, 2019:
|
● |
the
Company issued 3,500 shares to a consultant for services rendered
with fair value of $350 or $0.10 per share, based on recent private
placement sales of common stock on the dates of grant. |
|
● |
the
Company received gross proceeds of $2,000 or $0.10 per share, from
the sale of 20,000 shares of the Company’s common
stock. |
Note
5 - Commitments and Contingencies
Operating
lease
In
January 2018, the Company entered into a one-year sub-lease
agreement related to its leased office facilities in Palm
Beach, FL with the CEO of the Company. The lease shall
automatically be extended for successive one-year renewal terms not
to exceed 5 annual renewal terms in total unless the landlord or
tenant gives a written notice of non-renewal on or before 30 days
prior to expiration of the term. The lease currently requires
monthly payments of approximately $1,136 plus sales tax and the
Company is not responsible for any additional charges for common
area maintenance. The monthly rent will increase by 2% at the end
of each year.
In
adopting ASC Topic 842, Leases (Topic 842), the Company has elected
the ‘package of practical expedients’, which permit it not to
reassess under the new standard its prior conclusions about lease
identification, lease classification and initial direct costs. In
addition, the Company elected not to apply ASC Topic 842 to
arrangements with lease terms of 12 months or less. On January 1,
2019, upon adoption of ASC Topic 842, the Company recorded
right-of-use assets of $45,645 and total lease liabilities of
$45,645 based on an incremental borrowing rate of 12%. For the
respective three months ended March 31, 2020 and 2019, we paid an
aggregate of $3,775 and $1,472 for rent under this agreement,
respectively.
Right
of Use (“ROU”) Asset is summarized below:
| |
|
As
of
March 31, 2020 |
|
|
As
of
December 31,
2019
|
|
| |
|
(Unaudited) |
|
|
|
|
| Office
lease, ROU Asset |
|
$ |
45,645 |
|
|
$ |
45,645 |
|
| Less:
Accumulated amortization |
|
|
(12,352 |
) |
|
|
(9,834 |
) |
| Balance
of ROU asset |
|
$ |
33,293 |
|
|
$ |
35,811 |
|
Signet International Holdings, Inc. and Subsidiaries
Condensed Notes to Unaudited Consolidated Financial
Statements
March 31, 2020
(Unaudited)
Operating
lease liability related to the ROU asset is summarized
below:
| |
|
As of
March 31, 2020 |
|
|
As
of
December 31,
2019
|
|
| |
|
(Unaudited) |
|
|
|
|
| Office lease
liability |
|
$ |
45,645 |
|
|
$ |
45,645 |
|
| Reduction of
lease liability |
|
|
(11,894 |
) |
|
|
(9,412 |
) |
| Total |
|
|
33,751 |
|
|
|
36,233 |
|
| Less:
current portion |
|
|
(10,776 |
) |
|
|
(10,390 |
) |
| Long term
portion of lease liability |
|
$ |
22,975 |
|
|
$ |
25,843 |
|
Future
minimum lease payments under non-cancellable operating lease at
March 31, 2020 are as follows:
| Balance of year 2020 |
|
$ |
10,635 |
|
| Year 2021 |
|
|
14,462 |
|
| Year 2022 |
|
|
14,752 |
|
| Total |
|
|
39,849 |
|
| Imputed
interest |
|
|
(6,098 |
) |
| Total operating
lease liability |
|
$ |
33,751 |
|
Option
agreements
In
November 2018, the Company entered into an Option Agreement (the
“November 2018 Option Agreement”) whereby the licensor agreed to
grant an option to exclusively license to the Company patents owned
or controlled by licensor. The licensor is a University located in
the state of Florida. The licensed patents are related to
technology for graphene foam coating and deicing. The option period
commenced on the effective date of this November 2018 Option
Agreement and expired 6 months from the effective date unless
terminated by either party by giving 30 days written notice. During
the option period, the Company shall reimburse the licensor for all
patent related expenses incurred during the term of this agreement
in connection with obtaining or maintaining the patent rights. The
Company paid an option fee of $1,500 on the date of this agreement
which was recorded in professional and consulting fees during
fiscal 2018. In May 2019, the Company entered into an amendment
agreement to extend the option period to August 2019. Although this
option has expired, the Company, however is currently in
discussions to enter into a permanent licensing agreement with this
licensor.
In
March 2019, the Company entered into an Option Agreement (the
“March 2019 Option Agreement”) whereby the licensor agreed to grant
an option to exclusively license to the Company patents owned or
controlled by licensor. The licensor is a University located in the
state of Florida. The licensed patents are related to technology
for rechargeable battery device. The option period commenced on the
effective date of this March 2019 Option Agreement and expires 12
months from the effective date unless terminated by either party by
giving 30 days written notice. During the option period, the
Company shall reimburse the licensor for all patent related
expenses incurred during the term of this agreement in connection
with obtaining or maintaining the patent rights. The Company paid
an option fee of $5,000 on the date of this agreement which was
recorded in professional and consulting fees during fiscal 2019.
Although this option has expired, the Company, however is currently
in discussions to enter into a permanent licensing agreement with
this licensor.
In
August 2019, the Company entered into an Option Agreement (the
“August 2019 Option Agreement”) whereby the licensor agreed to
grant an option to exclusively license to the Company patents owned
or controlled by licensor. The licensor is a University located in
the state of Florida. The licensed patents are related to
technology for detecting melanoma cancer. The option period
commenced on the effective date of this August 2019 Option
Agreement and expires in August 2020 unless terminated by the
Company by giving 30 days written notice. During the option period,
the Company shall reimburse the licensor for all patent related
expenses incurred during the term of this agreement in connection
with obtaining or maintaining the patent rights. The Company paid
an option fee of $1,200 on the date of this agreement which was
recorded in professional and consulting fees during fiscal
2019.
In
September 2019, the Company entered into an Option Agreement (the
“September 2019 Option Agreement”) whereby the licensor agreed to
grant an option to exclusively license to the Company patents owned
or controlled by licensor. The licensor is a University located in
the state of Florida. The licensed patents are related to
technology for self-sterilizing device using plasma fields. The
option period commenced on the effective date of this September
2019 Option Agreement and expires in September 2020 unless
terminated by the Company by giving 30 days written notice. During
the option period, the Company shall reimburse the licensor for all
patent related expenses incurred during the term of this agreement
in connection with obtaining or maintaining the patent rights. The
Company paid an option fee of $1,200 on the date of this agreement
which was recorded in professional and consulting fees during
fiscal 2019.
Signet International Holdings, Inc. and Subsidiaries
Condensed Notes to Unaudited Consolidated Financial
Statements
March 31, 2020
(Unaudited)
In
September 2019, the Company entered into an Option Agreement (the
“September 11, 2019 Option Agreement”) whereby the licensor agreed
to grant an option to exclusively license to the Company patents
owned or controlled by licensor. The licensor is a University
located in the state of Florida. The licensed patents are related
to technology for low cost disposable medical sensor for
heart-attack. The option period commenced on the effective date of
this September 11, 2019 Option Agreement and expires in September
2020 unless terminated by the Company by giving 30 days written
notice. During the option period, the Company shall reimburse the
licensor for all patent related expenses incurred during the term
of this agreement in connection with obtaining or maintaining the
patent rights. The Company paid an option fee of $1,200 on the date
of this agreement which was recorded in professional and consulting
fees during fiscal 2019.
In
September 2019, the Company entered into an Option Agreement (the
“September 13, 2019 Option Agreement”) whereby the licensor agreed
to grant an option to exclusively license to the Company patents
owned or controlled by licensor. The licensor is a University
located in the state of Florida. The licensed patents are related
to technology for multifunctional oral prosthetic system. The
option period commenced on the effective date of this September 13,
2019 Option Agreement and expires in September 2020 unless
terminated by the Company by giving 30 days written notice. During
the option period, the Company shall reimburse the licensor for all
patent related expenses incurred during the term of this agreement
in connection with obtaining or maintaining the patent rights. The
Company paid an option fee of $1,200 on the date of this agreement
which was recorded in professional and consulting fees during
fiscal 2019.
In
October 2019, the Company entered into an Option Agreement (the
“October 2019 Option Agreement”) whereby the licensor agreed to
grant an option to exclusively license to the Company patents owned
or controlled by licensor. The licensor is a University located in
the state of Florida. The licensed patents are related to
technology for arc melted glass piles for structural foundations.
The option period commenced on the effective date of this October
2019 Option Agreement and expires in October 2020 unless terminated
by the Company by giving 30 days written notice. During the option
period, the Company shall reimburse the licensor for all patent
related expenses incurred during the term of this agreement in
connection with obtaining or maintaining the patent rights up to a
maximum of $3,500. The Company paid an option fee of $1,500 on the
date of this agreement which was recorded in professional and
consulting fees during fiscal 2019.
Consulting
agreements
On
January 5, 2020, the Company entered into a twelve-month agreement,
effective as of March 13, 2020, with a consultant to serve as a
technical science consultant, for $2,500 cash payment and 30,000
shares of the Company’s common stock. This agreement may be
terminated without cause by either party in 30 days upon submitting
a written notice. These shares had a fair value of $2,250 or $0.075
per share, based on recent private placement sales of common stock
and recorded as stock-based consulting.
On
February 13, 2020 the Company entered into a six-month agreement
with an individual to serve as a chief engineer consultant. The
Company will pay the consultant a consulting fee in cash and shares
of the Company’s common stock for services to be rendered, to be
determined and agreed upon by both parties when services
begin.
Note
6 - Related Party Transactions
In
January 2020, the Company settled accrued salary owed to its Chief
Executive Officer (“CEO”) by issuing 829,721 shares of common stock
valued at $94,422, based on recent private placement sales of
common stock on the date of grant (see Note 4). Additionally, the
CEO forgave accrued salary of $366,530. The Company reduced total
accrued salary by $460,952 in connection with the issuance of the
829,721 shares of common stock and recorded contributed capital of
$366,530 for the forgiveness of accrued salary.
The
Company paid rental fees for personal housing of $3,811 and $3,000
during the three months ended March 31, 2020 and 2019,
respectively, to an affiliated company owned by the CEO of the
Company which was recorded as compensation to the CEO and included
in general and administrative expenses as reflected in the
accompanying consolidated statements of operations.
Note
7 - Subsequent Events
Between
April 2020 and June 2020, the Company issued an aggregate of 9,375
shares of common stock to a consultant for services rendered with
fair value of $1,397 or an average of approximately $0.15 per
share, based on recent private placement sales of common stock on
the dates of grants.
On
May 21, 2020, the Company entered into an amended agreement with an
individual related to a consulting agreement dated on August 29,
2019. The consultant will provide business advisory, investor
relations, and promotion services in exchange for 3,125 shares of
the Company’s common stock per month, valued at recent private
placement sales of common stock. This agreement may be terminated,
without cause by either party, upon submitting 30 days written
notice.
Signet
International Holdings, Inc.
Contents
Report
of Independent Registered Public Accounting Firm
To
the Stockholders and the Board of Directors of:
Signet
International Holdings, Inc.
Opinion
on the Financial Statements
We
have audited the accompanying consolidated balance sheets of Signet
International Holdings, Inc. and Subsidiaries (the “Company”) as of
December 31, 2019 and 2018, the related statements of operations,
changes in stockholders’ deficit, and cash flows, for each of the
two years in the period ended December 31, 2019, and the related
notes (collectively referred to as the “consolidated financial
statements”). In our opinion, the consolidated financial statements
present fairly, in all material respects, the consolidated
financial position of the Company as of December 31, 2019 and 2018,
and the results of its operations and its cash flows for each of
the two years in the period ended December 31, 2019, in conformity
with accounting principles generally accepted in the United States
of America.
Going
Concern
The
accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern. As
discussed in Note 2 to the consolidated financial statements, the
Company has a net loss and cash used in operations of $114,750 and
$109,620, respectively, in 2019, has no revenue in 2019 or 2018 and
has a working capital deficit, stockholders’ deficit and
accumulated deficit of $342,442, $332,474 and $7,499,747,
respectively, at December 31, 2019. These matters raise
substantial doubt about the Company’s ability to continue as a
going concern. Management’s Plan in regard to these matters is also
described in Note 2. The consolidated financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
Basis
for Opinion
These
consolidated financial statements are the responsibility of the
Company’s management. Our responsibility is to express an opinion
on the Company’s consolidated financial statements based on our
audits. We are a public accounting firm registered with the Public
Company Accounting Oversight Board (United States) (“PCAOB”) and
are required to be independent with respect to the Company in
accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and
the PCAOB.
We
conducted our audits in accordance with the standards of the PCAOB.
Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement, whether due
to error or fraud. The Company is not required to have, nor were we
engaged to perform, an audit of internal control over financial
reporting. As part of our audits we are required to obtain an
understanding of internal control over financial reporting but not
for the purpose of expressing an opinion on the effectiveness of
the Company’s internal control over financial reporting.
Accordingly, we express no such opinion.
Our
audits included performing procedures to assess the risks of
material misstatement of the consolidated financial statements,
whether due to error or fraud and performing procedures that
respond to those risks. Such procedures included examining, on a
test basis, evidence regarding the amounts and disclosures in the
consolidated financial statements. Our audits also included
evaluating the accounting principles used and significant estimates
made by management, as well as evaluating the overall presentation
of the consolidated financial statements. We believe that our
audits provide a reasonable basis for our opinion.
/s/
Salberg & Company, P.A.
SALBERG
& COMPANY, P.A.
We
have served as the Company’s auditor since 2019.
Boca
Raton, Florida
May
13, 2020
2295
NW Corporate Blvd., Suite 240 ● Boca Raton, FL 33431
Phone:
(561) 995-8270 ● Toll Free: (866) CPA-8500 ● Fax: (561)
995-1920
www.salbergco.com
● info@salbergco.com
Member
National Association of Certified Valuation Analysts ● Registered
with the PCAOB
Member
CPAConnect with Affiliated Offices Worldwide ● Member Center
for Public Company Audit Firms
SIGNET INTERNATIONAL
HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED
BALANCE SHEETS
| |
|
December
31, |
|
| |
|
2019 |
|
|
2018 |
|
| |
|
|
|
|
|
|
| ASSETS |
|
|
|
|
|
|
| CURRENT
ASSETS: |
|
|
|
|
|
|
|
Cash |
|
$ |
106,661 |
|
|
$ |
48,725 |
|
|
Prepaid
expenses and other current assets |
|
|
16,632 |
|
|
|
382 |
|
|
Subscription
receivable |
|
|
25,000 |
|
|
|
- |
|
| |
|
|
|
|
|
|
|
|
|
Total
Current Assets |
|
|
148,293 |
|
|
|
49,107 |
|
| |
|
|
|
|
|
|
|
|
|
NON-CURRENT
ASSETS: |
|
|
|
|
|
|
|
|
|
Operating
lease right-of-use asset, net |
|
|
35,811 |
|
|
|
- |
|
| |
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS |
|
$ |
184,104 |
|
|
$ |
49,107 |
|
| |
|
|
|
|
|
|
|
|
| LIABILITIES AND
STOCKHOLDERS’ DEFICIT |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES: |
|
|
|
|
|
|
|
|
|
Accounts
payable and accrued expenses |
|
$ |
19,393 |
|
|
$ |
17,053 |
|
|
Accrued
officer salary |
|
|
460,952 |
|
|
|
921,912 |
|
|
Operating
lease liability - current portion |
|
|
10,390 |
|
|
|
- |
|
| |
|
|
|
|
|
|
|
|
|
Total
Current Liabilities |
|
|
490,735 |
|
|
|
938,965 |
|
| |
|
|
|
|
|
|
|
|
|
LONG-TERM
LIABILITIES: |
|
|
|
|
|
|
|
|
|
Operating
lease liability - long-term portion |
|
|
25,843 |
|
|
|
- |
|
| |
|
|
|
|
|
|
|
|
|
Total
Liabilities |
|
|
516,578 |
|
|
|
938,965 |
|
| |
|
|
|
|
|
|
|
|
|
Commitments and
Contingencies (see Note 6) |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’
DEFICIT: |
|
|
|
|
|
|
|
|
|
Preferred
stock, $0.001 par value; 50,000,000 shares authorized; Series A
Preferred stock ($0.001 Par Value; 5,000,000 Shares Designated;
5,000,000 issued and outstanding) |
|
|
5,000 |
|
|
|
5,000 |
|
|
Common
stock, $0.001 par value: 100,000,000 shares authorized;
15,954,358 and 12,819,738 shares issued and outstanding
at December 31, 2019 and 2018, respectively |
|
|
15,954 |
|
|
|
12,820 |
|
|
Additional
paid in capital |
|
|
7,146,319 |
|
|
|
6,477,319 |
|
|
Accumulated
deficit |
|
|
(7,499,747 |
) |
|
|
(7,384,997 |
) |
| |
|
|
|
|
|
|
|
|
|
Total
Stockholders’ Deficit |
|
|
(332,474 |
) |
|
|
(889,858 |
) |
| |
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES AND STOCKHOLDERS’ DEFICIT |
|
$ |
184,104 |
|
|
$ |
49,107 |
|
See
accompanying notes to consolidated financial statements.
SIGNET INTERNATIONAL
HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF OPERATIONS
For
The Years Ended
| |
|
December
31, |
|
| |
|
2019 |
|
|
2018 |
|
| |
|
|
|
|
|
|
| NET
REVENUES |
|
$ |
- |
|
|
$ |
- |
|
| |
|
|
|
|
|
|
|
|
| OPERATING
EXPENSES: |
|
|
|
|
|
|
|
|
|
Professional and
consulting fees |
|
|
55,135 |
|
|
|
28,614 |
|
|
General
and administrative |
|
|
58,890 |
|
|
|
52,382 |
|
| |
|
|
|
|
|
|
|
|
|
Total
Operating Expenses |
|
|
114,025 |
|
|
|
80,996 |
|
| |
|
|
|
|
|
|
|
|
| LOSS FROM
OPERATIONS |
|
|
(114,025 |
) |
|
|
(80,996 |
) |
| |
|
|
|
|
|
|
|
|
| Other
expense: |
|
|
|
|
|
|
|
|
|
Loss from
foreign currency transactions |
|
|
(725 |
) |
|
|
- |
|
| |
|
|
|
|
|
|
|
|
|
Total
Other Expense |
|
|
(725 |
) |
|
|
- |
|
| |
|
|
|
|
|
|
|
|
| LOSS BEFORE PROVISION
FOR INCOME TAXES |
|
|
(114,750 |
) |
|
|
(80,996 |
) |
| |
|
|
|
|
|
|
|
|
| Provision for income
taxes |
|
|
- |
|
|
|
- |
|
| |
|
|
|
|
|
|
|
|
| NET LOSS |
|
$ |
(114,750 |
) |
|
$ |
(80,996 |
) |
| |
|
|
|
|
|
|
|
|
| NET LOSS PER COMMON
SHARE - Basic and diluted |
|
$ |
(0.01 |
) |
|
$ |
(0.01 |
) |
| |
|
|
|
|
|
|
|
|
| WEIGHTED AVERAGE
COMMON SHARES OUTSTANDING: |
|
|
|
|
|
|
|
|
|
Basic and
diluted |
|
|
13,386,159 |
|
|
|
11,987,015 |
|
See
accompanying notes to consolidated financial statements.
SIGNET INTERNATIONAL HOLDINGS, INC. AND
SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
For
the Years Ended December 31, 2019 and 2018
| |
|
|
|
|
|
|
|
|
|
|
Additional |
|
|
|
|
|
Total |
|
| |
|
Preferred Stock - Series A |
|
|
Common
Stock |
|
|
Paid-in |
|
|
Accumulated |
|
|
Stockholders’ |
|
| |
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Deficit |
|
|
Deficit |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
December 31, 2017 |
|
|
5,000,000 |
|
|
$ |
5,000 |
|
|
|
11,469,145 |
|
|
$ |
11,469 |
|
|
$ |
6,351,516 |
|
|
$ |
(7,304,001 |
) |
|
$ |
(936,016 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance
of common stock for cash |
|
|
- |
|
|
|
- |
|
|
|
1,156,453 |
|
|
|
1,157 |
|
|
|
106,583 |
|
|
|
- |
|
|
|
107,740 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance
of common stock for services |
|
|
- |
|
|
|
- |
|
|
|
194,140 |
|
|
|
194 |
|
|
|
19,220 |
|
|
|
- |
|
|
|
19,414 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(80,996 |
) |
|
|
(80,996 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance, December 31,
2018 |
|
|
5,000,000 |
|
|
$ |
5,000 |
|
|
|
12,819,738 |
|
|
$ |
12,820 |
|
|
$ |
6,477,319 |
|
|
$ |
(7,384,997 |
) |
|
$ |
(889,858 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale of
common stock for cash and subscription receivable |
|
|
- |
|
|
|
- |
|
|
|
3,060,200 |
|
|
|
3,060 |
|
|
|
194,496 |
|
|
|
- |
|
|
|
197,556 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance
of common stock for accrued salaries |
|
|
- |
|
|
|
- |
|
|
|
921,920 |
|
|
|
922 |
|
|
|
45,174 |
|
|
|
- |
|
|
|
46,096 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance
of common stock for services |
|
|
- |
|
|
|
- |
|
|
|
173,500 |
|
|
|
173 |
|
|
|
18,445 |
|
|
|
- |
|
|
|
18,618 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contributed capital by
an officer through forgiveness of accrued salaries |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
414,864 |
|
|
|
- |
|
|
|
414,864 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase
and cancellation of common stock |
|
|
- |
|
|
|
- |
|
|
|
(1,000,000 |
) |
|
|
(1,000 |
) |
|
|
(4,000 |
) |
|
|
- |
|
|
|
(5,000 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return and
cancellation of common stock |
|
|
- |
|
|
|
- |
|
|
|
(21,000 |
) |
|
|
(21 |
) |
|
|
21 |
|
|
|
- |
|
|
|
- |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(114,750 |
) |
|
|
(114,750 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
December 31, 2019 |
|
|
5,000,000 |
|
|
$ |
5,000 |
|
|
|
15,954,358 |
|
|
$ |
15,954 |
|
|
$ |
7,146,319 |
|
|
$ |
(7,499,747 |
) |
|
$ |
(332,474 |
) |
See
accompanying notes to consolidated financial statements.
SIGNET INTERNATIONAL
HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF CASH FLOWS
For
The Years Ended
| |
|
December
31, |
|
| |
|
2019 |
|
|
2018 |
|
| |
|
|
|
|
|
|
| CASH
FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
|
|
Net
loss |
|
$ |
(114,750 |
) |
|
$ |
(80,996 |
) |
|
Adjustments to
reconcile net loss to net cash used in operating
activities: |
|
|
|
|
|
|
|
|
|
Stock-based
compensation |
|
|
18,618 |
|
|
|
19,414 |
|
|
Rent
expense |
|
|
422 |
|
|
|
- |
|
|
Change in
operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
Prepaid
expenses and other current assets |
|
|
(16,250 |
) |
|
|
- |
|
|
Accounts
payable and accrued expenses |
|
|
2,340 |
|
|
|
(6,202 |
) |
| |
|
|
|
|
|
|
|
|
|
NET CASH
USED IN OPERATING ACTIVITIES |
|
|
(109,620 |
) |
|
|
(67,784 |
) |
| |
|
|
|
|
|
|
|
|
|
CASH FLOWS
FROM FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
|
Issuance
of common stock for cash, net of subscription
receivable |
|
|
172,556 |
|
|
|
107,740 |
|
|
Purchase
and cancellation of common stock |
|
|
(5,000 |
) |
|
|
- |
|
| |
|
|
|
|
|
|
|
|
|
NET CASH
PROVIDED BY FINANCING ACTIVITIES |
|
|
167,556 |
|
|
|
107,740 |
|
| |
|
|
|
|
|
|
|
|
|
NET
INCREASE IN CASH |
|
|
57,936 |
|
|
|
39,956 |
|
| |
|
|
|
|
|
|
|
|
|
CASH,
beginning of year |
|
|
48,725 |
|
|
|
8,769 |
|
| |
|
|
|
|
|
|
|
|
|
CASH, end
of year |
|
$ |
106,661 |
|
|
$ |
48,725 |
|
| |
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION: |
|
|
|
|
|
|
|
|
|
Cash paid
during the period for: |
|
|
|
|
|
|
|
|
|
Interest |
|
$ |
- |
|
|
$ |
- |
|
|
Income
taxes |
|
$ |
- |
|
|
$ |
- |
|
| |
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL
DISCLOSURE OF NON-CASH INVESTING AND FINANCING
ACTIVITIES: |
|
|
|
|
|
|
|
|
|
Issuance
of common stock for accrued salaries |
|
$ |
46,096 |
|
|
$ |
- |
|
|
Contributed capital by
an officer through forgiveness of accrued salary |
|
$ |
414,864 |
|
|
$ |
- |
|
|
Common
stock issued for subscription receivable |
|
$ |
25,000 |
|
|
$ |
- |
|
|
Operating lease
right-of-use asset and operating lease liability recorded on
adoption of ASC 842 |
|
$ |
45,645 |
|
|
$ |
- |
|
See
accompanying notes to consolidated financial statements.
Signet International
Holdings, Inc. and Subsidiaries
Notes
to Consolidated Financial Statements
December 31, 2019
and 2018
Note
1 - Organization and Description of Business
Signet
International Holdings, Inc. (the “Company”) is incorporated in the
State of Delaware. The Company’s current principal
business plan is to focus in developing advanced technologies,
energy solutions and medical devices. The Company has no operating
history as of yet.
Note
2 - Going Concern
The
accompanying consolidated financial statements are prepared on a
going concern basis which contemplates the realization of assets
and satisfaction of liabilities and commitments in the normal
course of business. As reflected in the accompanying consolidated
financial statements, the Company had a net loss and net cash used
in operations of $114,750 and $109,620 respectively, for the year
ended December 31, 2019 and has no revenues in 2019 or 2018.
Additionally, the Company had an accumulated deficit of $7,499,747,
stockholders’ deficit of $332,474 and working capital deficit of
$342,442 as of December 31, 2019. These matters raise substantial
doubt about the Company’s ability to continue as a going concern
for twelve months from the issuance date of this report. The
ability of the Company to continue as a going concern is dependent
on the Company’s ability to implement its business plan, raise
capital, and generate revenues. Currently, management is seeking
capital to implement its business plan. Management
believes that the actions presently being taken provide the
opportunity for the Company to continue as a going concern. The
consolidated financial statements do not include any adjustments
that might be necessary if the Company is unable to continue as a
going concern.
Note
3 - Summary of Significant Accounting Policies
Basis
of presentation and principles of consolidation
The
Company’s consolidated financial statements include the financial
statements of its three wholly-owned subsidiaries. All
inter-company balances and transactions have been eliminated in
consolidation. All wholly-owned subsidiaries were inactive
subsidiaries at December 31, 2019 and 2018 and for each of the two
years in the period ended December 31, 2019.
Use
of estimates
The
preparation of the consolidated financial statements in conformity
with accounting principles generally accepted in the U.S. requires
management to make estimates and assumptions that affect the
reported amounts of assets, liabilities, revenues, expenses, and
the related disclosures at the date of the financial statements and
during the reporting period. Actual results could materially differ
from these estimates. Significant estimates include the valuation
of equity-based instruments issued for other than cash, and the
valuation allowance on deferred tax assets.
Risks
and uncertainties for development stage company
The
Company is considered to be in an early stage since we have not
commenced planned principal operations. Our activities since
inception include devoting substantially all of the Company’s
efforts to business planning and development. Additionally, the
Company has allocated a substantial portion of its time and
investment to the completion of the Company’s development
activities to launch its marketing plan and generate revenues and
to raising capital. The Company has not generated revenue from
operations and is currently in the development stage. The Company’s
activities during this early stage are subject to significant risks
and uncertainties.
Cash
and cash equivalents
The
Company considers all highly liquid investments with a maturity of
three months or less when acquired to be cash equivalents. The
Company did not have cash equivalents as of December 31, 2019 and
2018. The Company places its cash with high credit quality
financial institutions. The Company’s accounts at these
institutions are insured by the Federal Deposit Insurance
Corporation (“FDIC”) up to $250,000. As of December 31, 2019, the
Company had not reached bank balances exceeding the FDIC insurance
limit on interest bearing accounts. To reduce its risk associated
with the failure of such financial institutions, the Company
evaluates at least annually the rating of the financial
institutions in which it holds deposits.
Fair
value measurements and fair value of financial
instruments
The
Company follows Accounting Standards Codification (“ASC”) 820,
“Fair Value Measurements and Disclosures” (“ASC 820”), for assets
and liabilities measured at fair value on a recurring basis. ASC
820 establishes a common definition for fair value to be applied to
existing generally accepted accounting principles that requires the
use of fair value measurements, establishes a framework for
measuring fair value and expands disclosure about such fair value
measurements.
Signet
International Holdings, Inc. and Subsidiaries
Notes
to Consolidated Financial Statements
December 31, 2019
and 2018
ASC 820
defines fair value as the price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. Additionally,
ASC 820 requires the use of valuation techniques that maximize
the use of observable inputs and minimize the use of unobservable
inputs.
These
inputs are prioritized below:
|
Level
1:
|
Observable
inputs such as quoted market prices in active markets for identical
assets or liabilities |
|
|
|
|
Level
2: |
Observable
market-based inputs or unobservable inputs that are corroborated by
market data |
|
|
|
|
Level
3: |
Unobservable
inputs for which there is little or no market data, which require
the use of the reporting entity’s own assumptions. |
The
Company analyzes all financial instruments with features of both
liabilities and equity under the Financial Accounting Standard
Board’s (“FASB”) accounting standard for such instruments. Under
this standard, financial assets and liabilities are classified in
their entirety based on the lowest level of input that is
significant to the fair value measurement.
The
estimated fair value of certain financial instruments, including
prepaid expense, accounts payable, accrued expenses and accrued
salaries are carried at historical cost basis, which approximates
their fair values because of the short-term nature of these
instruments.
Stock-based
compensation
The
Company accounts for employee stock-based compensation in
accordance with ASC 718-10, “Share-Based Payment,” which
requires the measurement and recognition of compensation expense
for all share-based payment awards made to employees and directors
including employee stock options, restricted stock awards, and
employee stock purchases based on estimated fair values,
In
June 2018, the FASB issued ASU 2018-07, Compensation - Stock
Compensation (Topic 718). This update is intended to reduce cost
and complexity and to improve financial reporting for share-based
payments issued to non-employees (for example, service providers,
external legal counsel, suppliers, etc.). The ASU expands the scope
of Topic 718, Compensation-Stock Compensation, which currently only
includes share-based payments issued to employees, to also include
share-based payments issued to non-employees for goods and
services. Consequently, the accounting for share-based payments to
non-employees and employees will be substantially aligned. This
standard will be effective for financial statements issued by
public companies for the annual and interim periods beginning after
December 15, 2018. Early adoption of the standard is permitted. The
standard will be applied in a retrospective approach for each
period presented. Management adopted this standard on January 1,
2019 and there was no cumulative effect on adoption.
Determining
Fair Value Under ASC 718-10
The
Company estimates the fair value of stock options granted using the
Black-Scholes option-pricing formula. This fair value is then
amortized on a straight-line basis over the requisite service
periods of the awards. The Company’s determination of fair value
using an option-pricing model is affected by the stock price as
well as assumptions regarding the number of highly subjective
variables.
The
Company estimates volatility based upon the historical stock price
of the Company and estimates the expected term for employee stock
options using the simplified method for employees and directors and
the contractual term for non-employees. The risk-free rate is
determined based upon the prevailing rate of United States Treasury
securities with similar maturities.
Income
taxes
The
Company accounts for income taxes pursuant to the provision of ASC
740-10, “Accounting for Income Taxes” (“ASC 740-10”), which
requires, among other things, an asset and liability approach to
calculating deferred income taxes. The asset and liability approach
require the recognition of deferred tax assets and liabilities for
the expected future tax consequences of temporary differences
between the carrying amounts and the tax bases of assets and
liabilities. A valuation allowance is provided to offset any net
deferred tax assets for which management believes it is more likely
than not that the net deferred asset will not be
realized.
The
Company follows the provision of ASC 740-10 related to Accounting
for Uncertain Income Tax Positions. When tax returns are filed,
there may be uncertainty about the merits of positions taken or the
amount of the position that would be ultimately sustained. In
accordance with the guidance of ASC 740-10, the benefit of a tax
position is recognized in the financial statements in the period
during which, based on all available evidence, management believes
it is more likely than not that the position will be sustained upon
examination, including the resolution of appeals or litigation
processes, if any. Tax positions taken are not offset or aggregated
with other positions.
Signet
International Holdings, Inc. and Subsidiaries
Notes
to Consolidated Financial Statements
December 31, 2019
and 2018
Tax
positions that meet the more likely than not recognition threshold
is measured at the largest amount of tax benefit that is more than
50 percent likely of being realized upon settlement with the
applicable taxing authority. The portion of the benefit associated
with tax positions taken that exceed the amount measured as
described above should be reflected as a liability for uncertain
tax benefits in the accompanying balance sheet along with any
associated interest and penalties that would be payable to the
taxing authorities upon examination. The Company believes its tax
positions are all more likely than not to be upheld upon
examination. As such, the Company has not recorded a liability for
uncertain tax benefits.
The
Company has adopted ASC 740-10-25, “Definition of Settlement”,
which provides guidance on how an entity should determine whether a
tax position is effectively settled for the purpose of recognizing
previously unrecognized tax benefits and provides that a tax
position can be effectively settled upon the completion and
examination by a taxing authority without being legally
extinguished. For tax positions considered effectively settled, an
entity would recognize the full amount of tax benefit, even if the
tax position is not considered more likely than not to be sustained
based solely on the basis of its technical merits and the statute
of limitations remains open. The federal and state
income tax returns of the Company are subject to examination by the
IRS and state taxing authorities, generally for three years after
they are filed.
Net
loss per share of common stock
Basic
net loss per share is computed by dividing the net loss by the
weighted average number of common shares during the period. Diluted
net loss per share is computed using the weighted average
number of common shares and potentially dilutive securities
outstanding during the period. At December 31, 2019 and 2018, the
Company has 50,000,000 and 50,000,000, potentially dilutive
securities outstanding related to Series A Preferred Stock,
respectively. Those potentially dilutive common stock equivalents
were excluded from the dilutive loss per share calculation as they
would be antidilutive due to the net loss.
Impairment
of long-lived assets
In
accordance with ASC 360-10, “Long-lived assets,” which
include property and equipment and intangible assets, are reviewed
for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable.
Recoverability of long-lived assets to be held and used is measured
by a comparison of the carrying amount of an asset to the estimated
undiscounted future cash flows expected to be generated by the
asset. If the carrying amount of an asset exceeds its estimated
undiscounted future cash flows, an impairment charge is recognized
by the amount by which the carrying amount of the asset exceeds the
fair value of the assets. Fair value is generally determined using
the asset’s expected future discounted cash flows or market value,
if readily determinable. During fiscal year 2017, the Company
impaired the total values of various literary rights. Management
believes the impaired literary rights have value to the Company and
will continue to market these rights.
Leases
In
February 2016, the Financial Accounting Standards Board (“FASB”)
issued ASU 2016-02, Leases (Topic 842). The updated guidance
requires lessees to recognize lease assets and lease liabilities
for most operating leases. In addition, the updated guidance
requires that lessors separate lease and non-lease components in a
contract in accordance with the new revenue guidance in ASC 606.
This guidance is effective for interim and annual reporting periods
beginning after December 15, 2018. The Company adopted this
guidance effective January 1, 2019.
On
January 1, 2019, the Company adopted ASU No. 2016-02, applying the
package of practical expedients to leases that commenced before the
effective date whereby the Company elected to not reassess the
following: (i) whether any expired or existing contracts contain
leases and; (ii) initial direct costs for any existing leases. For
contracts entered into on or after the effective date, at the
inception of a contract the Company assessed whether the contract
is, or contains, a lease. The Company’s assessment is based on: (1)
whether the contract involves the use of a distinct identified
asset, (2) whether we obtain the right to substantially all the
economic benefit from the use of the asset throughout the period,
and (3) whether it has the right to direct the use of the asset.
The Company will allocate the consideration in the contract to each
lease component based on its relative stand-alone price to
determine the lease payments.
Operating
lease ROU assets represents the right to use the leased asset for
the lease term and operating lease liabilities are recognized based
on the present value of future minimum lease payments over the
lease term at commencement date. As most leases do not provide an
implicit rate, the Company use an incremental borrowing rate based
on the information available at the adoption date in determining
the present value of future payments. Lease expense for minimum
lease payments is amortized on a straight-line basis over the lease
term and is included in general and administrative expenses in the
consolidated statements of operations.
Signet
International Holdings, Inc. and Subsidiaries
Notes
to Consolidated Financial Statements
December 31, 2019
and 2018
Recent
accounting pronouncements
In July
2017, the FASB issued ASU 2017-11 “Earnings Per
Share” (Topic 260). The amendments in the update change the
classification of certain equity-linked financial instruments (or
embedded features) with down round features. The amendments also
clarify existing disclosure requirements for equity-classified
instruments. For freestanding equity-classified financial
instruments, the amendments require entities that present earnings
per share (“EPS”) in accordance with Topic 260, Earnings Per Share,
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 would be 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). 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. The adoption of this guidance had no material
impact on its accounting and disclosures and there was no
cumulative effect.
In
August 2018, the FASB issued ASU 2018-13, “Changes to
Disclosure Requirements for Fair Value Measurements”, which will
improve the effectiveness of disclosure requirements for recurring
and nonrecurring fair value measurements. The standard removes,
modifies, and adds certain disclosure requirements, and is
effective for fiscal years, and interim periods within those fiscal
years, beginning after December 15, 2019. The Company is assessing
ASU 2018-07 and does not expect it to have a material impact on its
accounting and disclosures.
Other
accounting standards which were not effective until after December
31, 2019 are not expected to have a material impact on the
Company’s financial position or results of
operations.
Note
4 – Stockholders’ Deficit
The
authorized capital stock consists of 100,000,000 shares of common
stock and 50,000,000 shares of preferred stock.
Preferred
stock
On
March 14, 2007, the Company formally designated a series of Super
Preferred Stock of the Company’s 50,000,000 authorized shares of
the capital preferred stock of the Corporation. The
designated Series A Convertible Super Preferred Stock (the “Series
A Super Preferred Stock”), consists of 5,000,000 shares, par value
$.001 per share, which shall have the following preferences,
powers, designations and other special rights:
|
Voting
and conversion: |
Holders
of the Series A Super Preferred Stock shall have ten votes per
share held on all matters submitted to the shareholders of the
Company for a vote thereon. Each holder of these shares
shall have the option to appoint two additional members to the
Board of Directors. Each share shall be convertible into
ten (10) shares of common stock. The Company may redeem $0.10 per
share with 30 days’ notice. |
|
Dividends: |
The
holders of Series A Super Preferred Stock shall be entitled to
receive dividends or distributions on a pro rata basis with the
holders of common stock when and if declared by the Board of
Directors of the Company. Dividends shall not be
cumulative. No dividends or distributions shall be
declared or paid or set apart for payment on the Common Stock in
any calendar year unless dividends or distributions on the Series A
Preferred Stock for such calendar year are likewise declared and
paid or set apart for payment. No declared and unpaid
dividends shall bear or accrue interest. |
|
Liquidation
Preference: |
Upon
the liquidation, dissolution and winding up of the Company, whether
voluntary or involuntary, the holders of the Series A Super
Preferred Stock then outstanding shall be entitled to, on a
pro-rata basis with the holders of common stock, distributions of
the assets of the Corporation, whether from capital or from
earnings available for distribution to its
stockholders. |
The
Board of Directors has the authority, without further action by the
shareholders, to issue, from time to time, preferred stock in one
or more series for such consideration and with such relative
rights, privileges, preferences and restrictions that the Board may
determine. The preferences, powers, rights and restrictions of
different series of preferred stock may differ with respect to
dividend rates, amounts payable on liquidation, voting rights,
conversion rights, redemption provisions, sinking fund provisions
and purchase funds and other matters. The issuance of preferred
stock could adversely affect the voting power or other rights of
the holders of common stock.
There
were 5,000,000 shares of Series A preferred stock issued and
outstanding as of December 31, 2019 and 2018.
Common
stock
During
fiscal year 2018, the Company received total gross proceeds of
$107,740 or average of approximately $0.093 per share from the sale
of 1,156,453 shares of the Company’s common stock.
During
fiscal year 2018, the Company issued an aggregate of 194,140 to
various consultants for services rendered. The Company valued the
shares of common stock at the fair value of approximately $0.10 per
common share or $19,414 based on the sales of common stock on
recent private placements on the dates of grants. During the year
ended December 31, 2018, the Company recorded stock-based
compensation of $19,414.
Signet
International Holdings, Inc. and Subsidiaries
Notes
to Consolidated Financial Statements
December 31, 2019
and 2018
During
fiscal year 2019, the Company received total gross proceeds of
$172,556 and subscription receivable of $25,000 or average of
approximately $0.065 per shares from the sale of 3,060,200 shares
of the Company’s common stock. The Company collected the
subscription receivable in January 2020. The 500,000 common shares
relating to the subscription receivable were issuable at December
31, 2019.
During
fiscal year 2019, the Company issued an aggregate of 173,500 to
various consultants for services rendered. The Company valued the
shares of common stock at the fair value ranging from approximately
$0.075 to $0.10 per common share or $18,618 based on the sales of
common stock on recent private placements on the dates of grants.
During the year ended December 31, 2019, the Company recorded
stock-based compensation of $18,618.
In
July 2019, the Company purchased back 1,000,000 shares of its
common stock for $5,000. Upon the return of the shares, the Company
cancelled the 1,000,000 shares of common stock.
In
August 2019, the Company paid accrued salaries to its Chief
Executive Officer in the amount of $46,096 by issuing 921,920
shares of common stock at a price of $0.05 per share of common
stock based on the sales of common stock on recent private
placements on the dates of grant. Additionally, the Chief Financial
Officer forgave accrued salaries of $414,864 during the year ended
December 31, 2019. The Company reduced total accrued salaries by
$460,960 in connection with the issuance of 921,920 shares of
common stock and recorded $414,864 of contributed capital from the
forgiveness of accrued salaries.
In
September 2019, a consultant returned 21,000 shares of the
Company’s common stock after resigning as a business advisor of the
Company. The Company cancelled the 21,000 shares of the Company’s
common stock which was recorded at par value.
Note
5 – Income Taxes
The
Company has incurred historical aggregate net operating losses of
approximately $1,825,732 for income tax purposes as of December 31,
2019. The net operating loss carries forward for United States
income taxes, which may be available to reduce future years’
taxable income. Management believes that the realization of the
benefits from these losses appears not more than likely than not
due to the Company’s limited operating history and continuing
losses for United States income tax purposes. Accordingly, the
Company has provided a 100% valuation allowance on the deferred tax
asset to reduce the asset to zero. Management will review this
valuation allowance periodically and make adjustments as
necessary.
The
items accounting for the difference between income taxes at the
effective statutory rate and the provision for income taxes were as
follows:
| |
|
Year
Ended
December 31,
2019
|
|
|
Year
Ended
December 31,
2018
|
|
| Income tax benefit at
U.S. statutory rate of 21% |
|
$ |
(24,098 |
) |
|
$ |
(17,009 |
) |
| Income tax benefit –
State tax rate at 5% |
|
|
(5,737 |
) |
|
|
(4,050 |
) |
| Non-deductible
expenses |
|
|
4,841 |
|
|
|
5,048 |
|
| Increase in valuation
allowance |
|
|
24,994 |
|
|
|
16,011 |
|
| Total provision for
income tax |
|
$ |
- |
|
|
$ |
- |
|
The
Company’s approximate net deferred tax asset was as
follows:
| Deferred Tax
Asset: |
|
December 31,
2019
|
|
|
December 31,
2018
|
|
| Net operating loss
carryforward |
|
$ |
474,690 |
|
|
$ |
449,696 |
|
| Valuation
allowance |
|
|
(474,690 |
) |
|
|
(449,696 |
) |
| Net deferred tax
asset |
|
$ |
- |
|
|
$ |
- |
|
On
December 22, 2017, the Tax Cuts and Jobs Act (the “Act”) was signed
into law. The Act decreases the U.S. corporate federal income tax
rate from a maximum of 34% to a flat 21% effective January 1, 2018.
The Act also includes a number of other provisions including, among
others, the elimination of net operating loss carrybacks and
limitations on the use of future losses, the repeal of the
Alternative Minimum Tax regime and the repeal of the domestic
production activities deduction. These provisions are not expected
to have a material effect on the Corporation. Given the significant
complexity of the Act and anticipated additional implementation
guidance from the Internal Revenue Service, further implications of
the Act may be identified in future periods.
The
Company provided a valuation allowance equal to the deferred income
tax asset for the year ended December 31, 2019 and 2018 because it
was not known whether future taxable income will be sufficient to
utilize the loss carryforward. The increase in the allowance was
$24,994 in fiscal 2019. The potential tax benefit arising from the
loss carryforward of approximately $1,668,018 accumulated through
December 31, 2017 will expire in 2037 and the fiscal 2018 and 2019
net operating loss carryforward of approximately $157,714 may be
carried forward indefinitely.
Signet
International Holdings, Inc. and Subsidiaries
Notes
to Consolidated Financial Statements
December 31, 2019
and 2018
Additionally,
the future utilization of the net operating loss carryforward to
offset future taxable income may be subject to an annual limitation
as a result of ownership changes or business changes that could
occur in the future. If necessary, the deferred tax assets will be
reduced by any carryforward that expires prior to utilization as a
result of such limitations, with a corresponding reduction of the
valuation allowance. The Company does not have any uncertain tax
positions or events leading to uncertainty in a tax position. The
Company’s 2017, 2018 and 2019 Corporate Income Tax Returns are
subject to Internal Revenue Service examination.
Note
6 – Commitments and Contingencies
Operating
lease
In
January 2018, the Company entered into a one-year sub-lease
agreement related to its leased office facilities in Palm
Beach, FL with the CEO of the Company. The lease shall
automatically be extended for successive one-year renewal term not
to exceed 5 annual renewal terms in total unless the landlord or
tenant gives a written notice of non-renewal on or before 30 days
prior to expiration of the term. The lease currently requires
monthly payments of approximately $1,136 plus sales tax and the
Company is not responsible for any additional charges for common
area maintenance. The monthly rent will increase by 2% at the end
of each year.
In
adopting ASC Topic 842, Leases (Topic 842), the Company has elected
the ‘package of practical expedients’, which permit it not to
reassess under the new standard its prior conclusions about lease
identification, lease classification and initial direct costs. In
addition, the Company elected not to apply ASC Topic 842 to
arrangements with lease terms of 12 month or less. On January 1,
2019, upon adoption of ASC Topic 842, the Company recorded
right-of-use assets $45,645 and total lease liabilities of $45,645
based on an incremental borrowing rate of 12%. For the respective
years ended December 31, 2019 and 2018, we paid an aggregate of
$14,854 and $14,578 for rent under this agreement,
respectively.
ROU
is summarized below:
| |
|
December 31,
2019 |
|
| Office lease
ROU |
|
$ |
45,645 |
|
| Less accumulated
reduction |
|
|
(9,834 |
) |
| Balance of ROU asset
as of December 31, 2019 |
|
$ |
35,811 |
|
Operating
lease liability related to the ROU asset is summarized
below:
| |
|
December 31,
2019 |
|
| Office lease
liability |
|
$ |
45,645 |
|
| Reduction of lease
liability |
|
|
(9,412 |
) |
| Total |
|
|
36,233 |
|
| Less: current
portion |
|
|
(10,390 |
) |
| Long term portion of
lease liability as of December 31, 2019 |
|
$ |
25,843 |
|
Future
Minimum lease payments under non-cancelable operating lease at
December 31, 2019 are as follows:
| Year 2020 |
|
$ |
14,179 |
|
| Year
2021 |
|
|
14,462 |
|
| Year 2022 |
|
|
14,752 |
|
| Total |
|
|
43,393 |
|
| Imputed
interest |
|
|
(7,160 |
) |
| Total operating lease
liability |
|
$ |
36,233 |
|
Option
agreements
In November 2018, the Company entered into an Option Agreement (the
“November 2018 Option Agreement”) whereby the licensor agreed to
grant an option to exclusively license to the Company patents owned
or controlled by licensor. The licensor is a University located in
the state of Florida. The licensed patents are related to
technology for graphene foam coating and deicing. The option period
commenced on the effective date of this November 2018 Option
Agreement and expired 6 months from the effective date unless
terminated by either party by giving 30 days written notice. During
the option period, the Company shall reimburse the licensor for all
patent related expenses incurred during the term of this agreement
in connection with obtaining or maintaining the patent rights. The
Company paid an option fee of $1,500 on the date of this agreement
which was recorded in professional and consulting fees as reflected
in the accompanying consolidated statements of operations. In May
2019, the Company entered into an amendment agreement to extend the
option period to August 2019. Although this option has expired, the
Company, however is currently in discussions to enter into a
permanent licensing agreement with this licensor.
Signet
International Holdings, Inc. and Subsidiaries
Notes
to Consolidated Financial Statements
December 31, 2019
and 2018
In March 2019, the Company entered into an Option Agreement (the
“March 2019 Option Agreement”) whereby the licensor agreed to grant
an option to exclusively license to the Company patents owned or
controlled by licensor. The licensor is a University located in the
state of Florida. The licensed patents are related to technology
for rechargeable battery device. The option period commenced on the
effective date of this March 2019 Option Agreement and expires 12
months from the effective date unless terminated by either party by
giving 30 days written notice. During the option period, the
Company shall reimburse the licensor for all patent related
expenses incurred during the term of this agreement in connection
with obtaining or maintaining the patent rights. The Company paid
an option fee of $5,000 on the date of this agreement which was
recorded in professional and consulting fees as reflected in the
accompanying consolidated statements of operations. Although this
option has expired, the Company, however is currently in
discussions to enter into a permanent licensing agreement with this
licensor.
In August 2019, the Company entered into an Option Agreement (the
“August 2019 Option Agreement”) whereby the licensor agreed to
grant an option to exclusively license to the Company patents owned
or controlled by licensor. The licensor is a University located in
the state of Florida. The licensed patents are related to
technology for detecting melanoma cancer. The option period
commenced on the effective date of this August 2019 Option
Agreement and expires in August 2020 unless terminated by the
Company by giving 30 days written notice. During the option period,
the Company shall reimburse the licensor for all patent related
expenses incurred during the term of this agreement in connection
with obtaining or maintaining the patent rights. The Company paid
an option fee of $1,200 on the date of this agreement which was
recorded in professional and consulting fees as reflected in the
accompanying consolidated statements of operations.
In September 2019, the Company entered into an Option Agreement
(the “September 2019 Option Agreement”) whereby the licensor agreed
to grant an option to exclusively license to the Company patents
owned or controlled by licensor. The licensor is a University
located in the state of Florida. The licensed patents are related
to technology for self-sterilizing device using plasma fields. The
option period commenced on the effective date of this September
2019 Option Agreement and expires in September 2020 unless
terminated by the Company by giving 30 days written notice. During
the option period, the Company shall reimburse the licensor for all
patent related expenses incurred during the term of this agreement
in connection with obtaining or maintaining the patent rights. The
Company paid an option fee of $1,200 on the date of this agreement
which was recorded in professional and consulting fees as reflected
in the accompanying consolidated statements of operations.
In September 2019, the Company entered into an Option Agreement
(the “September 11, 2019 Option Agreement”) whereby the licensor
agreed to grant an option to exclusively license to the Company
patents owned or controlled by licensor. The licensor is a
University located in the state of Florida. The licensed patents
are related to technology for low cost disposable medical sensor
for heart-attack. The option period commenced on the effective date
of this September 11, 2019 Option Agreement and expires in
September 2020 unless terminated by the Company by giving 30 days
written notice. During the option period, the Company shall
reimburse the licensor for all patent related expenses incurred
during the term of this agreement in connection with obtaining or
maintaining the patent rights. The Company paid an option fee of
$1,200 on the date of this agreement which was recorded in
professional and consulting fees as reflected in the accompanying
consolidated statements of operations.
In September 2019, the Company entered into an Option Agreement
(the “September 13, 2019 Option Agreement”) whereby the licensor
agreed to grant an option to exclusively license to the Company
patents owned or controlled by licensor. The licensor is a
University located in the state of Florida. The licensed patents
are related to technology for multifunctional oral prosthetic
system. The option period commenced on the effective date of this
September 13, 2019 Option Agreement and expires in September 2020
unless terminated by the Company by giving 30 days written notice.
During the option period, the Company shall reimburse the licensor
for all patent related expenses incurred during the term of this
agreement in connection with obtaining or maintaining the patent
rights. The Company paid an option fee of $1,200 on the date of
this agreement which was recorded in professional and consulting
fees as reflected in the accompanying consolidated statements of
operations.
In October 2019, the Company entered into an Option Agreement (the
“October 2019 Option Agreement”) whereby the licensor agreed to
grant an option to exclusively license to the Company patents owned
or controlled by licensor. The licensor is a University located in
the state of Florida. The licensed patents are related to
technology for arc melted glass piles for structural foundations.
The option period commenced on the effective date of this October
2019 Option Agreement and expires in October 2020 unless terminated
by the Company by giving 30 days written notice. During the option
period, the Company shall reimburse the licensor for all patent
related expenses incurred during the term of this agreement in
connection with obtaining or maintaining the patent rights up to a
maximum of $3,500. The Company paid an option fee of $1,500 on the
date of this agreement which was recorded in professional and
consulting fees as reflected in the accompanying consolidated
statements of operations.
Signet
International Holdings, Inc. and Subsidiaries
Notes
to Consolidated Financial Statements
December 31, 2019
and 2018
Consulting
agreements
On
August 29, 2019, the Company entered into a six-month consulting
agreement with a consultant for business advisory and promotion
services in exchange for 50,000 shares of the Company’s common
stock. Additionally, the Company shall pay such consultant for any
market research and business relation services rendered in cash. In
2019, the Company issued the 50,000 shares of the Company’s common
stock to the consultant.
Note
7 – Related Party Transactions
In
August 2019, the Company paid accrued salaries to its Chief
Executive Officer in the amount of $46,096 by issuing 921,920
shares of common stock (see Note 4). Additionally, the Chief
Financial Officer forgave accrued salaries of $414,864 during the
year ended December 31, 2019. The Company reduced total accrued
salaries by $460,960 in connection with the issuance of 921,920
shares of common stock and recorded $414,864 of contributed capital
from the forgiveness of accrued salaries.
The
Company paid rental fee for personal housing of $12,150 and $12,000
during the year ended December 31, 2019 and 2018, respectively to
an affiliated company owned by the CEO of the Company and was
recorded as compensation to the CEO which is included in general
and administrative expenses as reflected in the accompanying
statements of operations.
In
January 2018, the Company entered into a one-year sub-lease
agreement related to its leased office facilities in Palm
Beach, FL with the CEO of the Company (see Note 6).
Note
8 - Subsequent Events
In
January 2020, the Company paid accrued salaries to its Chief
Executive Officer in the amount of $94,422 by issuing 829,721
shares of common stock at a price of approximately $0.11 per share
of common stock based on the sales of common stock on recent
private placements on the dates of grant. Additionally, the Chief
Executive Officer forgave accrued salaries of $366,530 in January
2020. The Company reduced total accrued salaries by $460,952 in
connection with the issuance of 829,721 shares of common stock and
recorded contributed capital of $366,530 from the forgiveness of
accrued salaries thereby eliminating the remaining liability of
accrued salaries due to officer and potentially reduces the working
capital deficit.
In
January 2020, the Company issued an aggregate of 1,014,103 to two
directors of the Company for services rendered. The Company valued
the shares of common stock at the fair value of approximately $0.11
per common share or $115,405 based on the sales of common stock on
recent private placements on the dates of grants. In January 2020,
the Company recorded stock-based compensation of
$115,405.
Between
January 2020 and March 2020, the Company received total gross
proceeds of $66,016 or an average of approximately $0.104 per share
from the sale of 631,500 shares of the Company’s common stock. In
January 2020, the Company collected a subscription receivable of
$25,000 which was recorded as of December 31, 2019.
Between
January 2020 and March 2020, the Company issued an aggregate of
495,625 to various consultants for services rendered. The Company
valued the shares of common stock at the fair value of an average
of approximately $0.11 per common share or $56,090 based on the
sales of common stock on recent private placements on the dates of
grants.
On
January 5, 2020, the Company entered into a twelve-month consulting
agreement with a consultant who will act as technical science
consultant in exchange for 20,000 shares of the Company’s common
stock. This agreement may be terminated without cause by either
party in 30 days upon submitting a written notice.
On February 13, 2020 the Company entered into a six-month
consulting agreement with a consultant who will act as an
engineering consultant. The Company shall pay the consultant a
consulting fee in cash and shares of the Company’s common stock for
services rendered to be determined and agreed upon by both
parties.
F-25
Signet (PK) (USOTC:SIGN)
Historical Stock Chart
From Dec 2020 to Jan 2021
Signet (PK) (USOTC:SIGN)
Historical Stock Chart
From Jan 2020 to Jan 2021
