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AS
FILED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION ON
JUNE 22, 2022
Registration
No. 333-
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
S-1
REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933
SIGYN THERAPEUTICS, INC. |
(Exact
name of Registrant as specified in its charter) |
Delaware |
|
3841 |
|
47-2573116 |
(State
or other jurisdiction of
incorporation or organization) |
|
(Primary
Standard Industrial
Classification
Code)
|
|
(I.R.S.
Employer
Identification
No.)
|
2468 Historic Decatur Road
Suite 140
San Diego,
California
92106
Telephone:
(619)
353-0800
(Address
and Telephone Number of Registrant’s Principal
Executive Offices and Principal Place of Business)
VCorp Services
18 Lafayette Place
Woodmere,
NY
11598
Telephone:
(845)
425-0077
(Name,
Address, and Telephone Number for Agent of Service)
Copies
to:
Jolie
Kahn, Esq.
12
E. 49th Street, 11th Floor
New
York, NY 10017
Telephone:
(516) 217-6379
Fax:
(866) 705-3071
|
|
Patrick
J. Egan, Esq.
Leslie
Marlow, Esq.
Hank Gracin, Esq.
Blank
Rome LLP
1271
Avenue of the Americas
New
York, NY 10020
Phone:
(212) 885-5000
Fax:
(212) 885-5001
|
Approximate
date of commencement of proposed sale to the public: As soon as
practicable on or after the effective date of this registration
statement.
If
any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act of 1933, please check the following box:
☒
If
this form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, check
the following box and list the Securities Act registration
statement number of the earlier effective registration statement
for the same offering. ☐
If
this form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier
effective registration statement for the same offering.
☐
If
this form is a post-effective amendment filed pursuant to Rule
462(d) under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier
effective registration statement for the same offering.
☐
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 to
Section 7(a)(2)(B) of the Securities Act.
The
Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states
that this Registration Statement shall thereafter become effective
in accordance with Section 8(a) of the Securities Act of 1933, as
amended, or until this Registration Statement shall become
effective on such date as the Commission acting pursuant to said
Section 8(a) may determine.
The information in this prospectus is not complete and may be
changed. We may not sell these securities until the Securities and
Exchange Commission declares our registration statement effective.
This prospectus is not an offer to sell these securities and is not
soliciting an offer to buy these securities in any state where the
offer or sale is not permitted.
PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION DATED JUNE 22,
2022
Sigyn
Therapeutics, Inc.

Class A Units
Each Class A Unit Consisting of
One Share
of Common Stock and
One Series A Warrant to Purchase One Share of Common
Stock
Class B Units
Each Class B Unit Consisting of __ Shares of Series B Preferred
Stock and One Series A Warrant to
Purchase One Share of Common Stock
This is a firm commitment public offering of ____ Class A Units
(“Class A Units”), with each Class A Unit consisting of one share
of our common stock, par value $0.001 per share, and one Series A
Warrant to purchase one share our common stock (and the shares
issuable from time to time upon exercise of the Series A Warrants)
pursuant to this prospectus based on an assumed offer price of
$____ for each Class A Unit. Each Series A Warrant will have an
exercise price of $____ (assumed) per share, will be exercisable
upon issuance and will expire five years from issuance. We expect
the public offering price will be $______ per Class A Unit.
The Class A Units have no stand-alone rights, will not be
certificated or issued as stand-alone securities and there will be
no trading market for the Class A Units. The shares of common stock
and the Series A Warrants comprising the Class A Units will
separate immediately upon completion of this offering and prior to
any trading of the common stock and Series A Warrants.
We are also offering to those purchasers, whose purchase of Class A
Units in this offering would result in the purchaser, together with
its affiliates and certain related parties, beneficially owning
more than 4.99% (or, at the election of the purchaser, 9.99%) of
our outstanding common stock following the consummation of this
offering, the opportunity to purchase, in lieu of the number of
Class A Units that would result in ownership in excess of 4.99%
(or, at the election of the purchaser, 9.99%) of our outstanding
common stock, a unit consisting of one share of Series B
convertible preferred stock, par value $.001 per share, convertible
at any time at the holder’s option into a number of shares of
common stock equal to $5,000 divided by $_____, the public offering
price per Class A Unit (the “Conversion Price”), and warrants to
purchase a number of shares of common stock equal to the number of
shares of common stock issuable upon conversion of one share of
Series B convertible preferred stock (“Class B Unit”) at a public
offering price of $5,000 per Class B unit. The warrants included in
the Class B Units will have the same terms as the warrants included
in the Class A Units. For each Class B Unit we sell, the number of
Class A Units we are offering will be decreased on a
dollar-for-dollar basis. Because we will issue a Series A Warrant
as part of the Class A Unit or Class B Unit, the number of Series A
Warrants sold in this offering will not change as a result of the
change in the mix of Class A Units and Class B Units.
Our common stock is quoted on the OTC Markets Pink Sheets trading
system under the symbol “SIGY”. On June 21 , 2022, the last report
sale price of our common stock on the OTC Markets Pink Sheets was
$0.249. Prior to this offering, there has been no public market for
our Class A Units or our Series A Warrants. We plan to apply to
have our shares of common stock listed on the Nasdaq Capital Market
under the symbol “SIGY”. No assurance can be given that our
application will be approved or that the trading price of our
common stock on the OTC Markets Pink Sheets will be indicative of
the prices of our common stock if our common stock were traded on
the Nasdaq Capital Market. If, for whatever reason, Nasdaq
does not confirm the listing of our common stock on Nasdaq prior to
the pricing of the offering, we will not be able to consummate and
will terminate this offering. There is no established trading
market for the warrants or the Series B convertible preferred
stock. In addition, we do not intend to apply for the listing of
the Series A Warrants or the Series B Preferred on any national
securities exchange or other trading market. Without an active
trading market, the liquidity of the Series A Warrants and the
Series B Preferred will be limited.
The number of Class A Units and Class B Unit offered in this
prospectus and all other applicable information has been determined
based on an assumed public offering price of $ per
Class A Unit and $___ per Class B Unit, which is based on the last
reported sales price of our common stock of $ on
,
2022 . The actual public offering price of the Class A Units and
Class B Units will be determined between the underwriters and us at
the time of pricing, considering our historical performance and
capital structure, prevailing market conditions, and overall
assessment of our business, and may be at a discount to the current
market price. Therefore, the assumed public offering price per
Class A Unit and Class B Unit used throughout this prospectus may
not be indicative of the actual public offering price for the Class
A Units and Class B Units. See “Determination of Offering Price”
for additional information.
Investing
in our securities involves a high degree of risk. See “Risk
Factors” beginning on page 5 of this prospectus for a
discussion of information that should be considered in connection
with an investment in our securities.
We
are an “emerging growth company” under the federal securities laws
and may elect to comply with certain reduced public company
reporting requirements for future filings.
We
intend to apply to have our common stock listed on The Nasdaq
Capital Market under the symbol “SIGY”.
Neither
the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or
determined if this prospectus is truthful or complete. Any
representation to the contrary is a criminal
offense.
|
|
Class
A Unit |
|
Class
B Unit |
|
Total |
|
Public
offering price |
|
$ |
|
|
$ |
|
|
$ |
|
|
Underwriting
discounts and commissions(1) |
|
$ |
|
|
$ |
|
|
$ |
|
|
Proceeds
to us, before expenses (2) |
|
$ |
|
|
$ |
|
|
$ |
|
|
|
(1) |
We
have also agreed to issue warrants to purchase shares of our common
stock to the representative of underwriters and to reimburse the
representative of the underwriters for certain expenses. See
“Underwriting” for additional information regarding total
underwriter compensation. |
|
(2) |
The
amount of offering proceeds to us presented in this table does not
give effect to any exercise of the: (i) over-allotment option (if
any) we have granted to the representative of the underwriters as
described below and (ii) warrants being issued to the
representative of the underwriters in this offering. The public
offering price and underwriting discount corresponds to (i) in
respect of the Class A Units (a) a public offering price per share
of common stock of $__ and (b) a public offering price per Series A
Warrant of $__, and (ii) in respect of the Class B Units (a) a
public offering price per share of Series B preferred stock of $__
and (ii) a public offering price per Series A Warrant of
$_____. |
We have granted a 45-day option to the underwriters, exercisable
one or more times in whole or in part, to purchase up to an
additional ____ shares of common stock and/or __ shares of Series B
preferred stock and/or additional Series A Warrants (having
the same terms as the Series A Warrants included in the Class A
Units in the offering) from us in any combination thereof at the
public offering price per share of common stock equal to the
public offering price per Class A Unit minus $0.01 per share and
$0.01 per Series A Warrant, respectively, less the underwriting
discounts payable by us, solely to cover over-allotments, if
any.
The
underwriters expect to deliver the securities to purchasers in the
offering on or
about ,
2022.

The
date of this prospectus is
,
2022
Table
of Contents
You
should rely only on the information contained in this prospectus.
We have not authorized anyone to provide you with different
information. We are not making an offer of these securities in any
state where the offer is not permitted. You should not assume that
the information contained in this prospectus is accurate as of any
date other than the date on the front of this
prospectus.
PROSPECTUS SUMMARY
Except
as otherwise indicated, as used in this prospectus, references to
the “Company,” “we,” “us,” or “our” refer to Sigyn Therapeutics,
Inc.
The following summary highlights selected information contained in
this prospectus, and it may not contain all of the information that
is important to you. Before making an investment decision, you
should read the entire prospectus carefully, including “Risk
Factors” and our financial statements and related notes, included
elsewhere in, or incorporated by reference into, this
prospectus.
Our
Company
Sigyn
Therapeutics, Inc. (“Sigyn” or the “Company”) is a medical
technology company headquartered in San Diego, California. Our
focus is on the treatment of pathogen-associated conditions that
precipitate sepsis, the leading cause of hospital deaths
worldwide1. Sigyn Therapy™ is a multi-function blood
purification technology designed to extract pathogen
sources of life-threatening inflammation in concert with the
broad-spectrum elimination of inflammatory mediators from human
blood plasma.
Beyond
the treatment of sepsis, Sigyn Therapy establishes a novel strategy
to address emerging pandemic threats, hepatic encephalopathy,
bridge-to-liver transplant, and community acquired pneumonia, which
is a leading cause of death among infectious diseases2,
the leading cause of death in children under five years of
age2, and a catalyst for approximately 50% of sepsis and
septic shock cases2.
1Global, regional and national sepsis incidence and mortality
The Journal Lancet, January 2020
2The American Thoracic Society – Pneumonia Facts
2019
Risks
and Challenges That We Face
An
investment in our securities involves a high degree of risk. You
should carefully consider the risks summarized below and the other
risks that are discussed more fully in the “Risk Factors” section
of this prospectus immediately following this prospectus summary.
These risks include, but are not limited to, the
following:
|
● |
Demand
and market acceptance of our product offerings may be considerably
less than what we currently anticipate. |
|
|
|
|
● |
We
may be unable to increase revenues in the manner in which we
anticipate and generate profitability. |
|
|
|
|
● |
We
may face challenges in successfully completing U.S. Food and Drug
Administration (“FDA”) testing requirements. |
|
|
|
|
● |
We
may not be able to meet increased and changing regulatory
requirements. |
|
|
|
|
● |
Our
systems are not commercially tested. |
|
|
|
|
● |
We
will need to raise additional capital to fully commercialize our
products. |
|
|
|
|
● |
Some
of our target products may face an uncertain regulatory
environment. |
|
|
|
|
● |
We
may be unable to expand operations and manage growth. |
|
|
|
|
● |
We
may be unable to retain key members of our management and
development teams and to recruit additional qualified
personnel. |
|
|
|
|
● |
We
face competition from companies that have greater resources than we
do and we may not be able to effectively compete against
these companies.
|
|
|
|
|
● |
We
face risks as a result of the ongoing COVID-19
pandemic. |
|
|
|
|
● |
We
may not be able to continue as a going concern. |
Implications
of Being an Emerging Growth Company
We
are an “emerging growth company,” as defined in Section 2(a) of the
Securities Act of 1933, or the Securities Act, as modified by the
Jumpstart Our Business Startups Act of 2012, or the JOBS Act. As
such, we are eligible to take advantage of certain exemptions from
various reporting requirements applicable to other public companies
that are not “emerging growth companies” including, but not limited
to:
|
● |
being
permitted to present only two years of audited financial statements
and only two years of related disclosure in “Management’s
Discussion and Analysis of Financial Condition and Results of
Operations” in this prospectus; |
|
|
|
|
● |
being
permitted to provide less extensive narrative disclosure than other
public companies including not being required to comply with the
auditor attestation requirements of Section 404 of the
Sarbanes-Oxley Act of 2002 and reduced disclosure obligations
regarding executive compensation in our periodic reports, proxy
statements and registration statements; |
|
|
|
|
● |
being
permitted to utilize exemptions from the requirements of holding a
nonbinding advisory vote on executive compensation and shareholder
approval of any golden parachute payments not previously
approved; |
|
|
|
|
● |
being
permitted to defer complying with certain changes in accounting
standards; and |
|
|
|
|
● |
being
permitted to use test-the-waters communications with qualified
institutional buyers and institutional accredited
investors. |
We
intend to take advantage of these and other exemptions available to
“emerging growth companies.” We could remain an “emerging growth
company” until the earliest of (a) the last day of our fiscal year
following the fifth anniversary of the closing of this offering,
(b) the last day of the first fiscal year in which our annual gross
revenues exceed $1.07 billion, (c) the last day of our fiscal year
in which we are deemed to be a “large accelerated filer” as defined
in Rule 12b-2 under the Securities Exchange Act of 1934, or
Exchange Act (which would occur if the market value of our equity
securities that is held by non-affiliates exceeds $700 million as
of the last business day of our most recently completed second
fiscal quarter), or (d) the date on which we have issued more than
$1 billion in nonconvertible debt during the preceding three-year
period.
The
JOBS Act permits an “emerging growth company” like us to take
advantage of an extended transition period to comply with new or
revised accounting standards applicable to public companies. This
means that 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 delay such adoption
of new or revised accounting standards.
Available
Information
We
file various reports with the SEC, including Annual Reports on Form
10-K, Quarterly Reports on Form 10-Q and Current Reports on Form
8-K, which are available through the SEC’s electronic data
gathering, analysis and retrieval system (“EDGAR”) by accessing the
SEC’s home page (http://www.sec.gov).
Corporate
Information
On
October 19, 2020, Sigyn Therapeutics, Inc, a Delaware corporation
(the “Registrant”) formerly known as Reign Resources Corporation,
completed a Share Exchange Agreement (the “Agreement”) with Sigyn
Therapeutics, Inc., a private entity incorporated in the State of
Delaware on October 19, 2019. Our mailing address is currently 2468
Historic Decatur Road., Suite 140, San Diego, California, 92106.
Our telephone number is (619) 353-0800.
THE OFFERING
Class A Units offered by us:
|
|
We are offering Class A Units. Each Class A Unit consists of one
share of our common stock and a Series A Warrant to purchase one
share of our common stock (together with the shares of common stock
underlying such warrants). The Class A Units will not be
certificated or issued in stand-alone form. The shares of our
common stock and the Series A Warrants comprising the Class A Units
are immediately separable upon issuance and will be issued
separately in this offering.
|
|
|
|
Assumed
Offering
price: |
|
$[__]
per Class A Unit |
|
|
|
Class B Units
offered by us: |
|
We
are also offering to those purchasers, whose purchase of Class A
Units in this offering would result in the purchaser, together with
its affiliates and certain related parties, beneficially owning
more than 4.99% (or, at the election of the purchaser, 9.99%) of
our outstanding common stock following the consummation of this
offering, the opportunity to purchase, in lieu of the number of
Class A Units that would result in ownership in excess of 4.99%
(or, at the election of the purchaser, 9.99%) of our outstanding
common stock, Class B Units. Each Class B Unit will consist of one
share of Series B preferred stock, par value $0.001 per share,
convertible into a number of shares of common stock equal to $5,000
divided by $____, the public offering price per Class A Unit (the
“Conversion Price”), and warrants to purchase a number of shares of
common stock equal to the number of shares of common stock issuable
upon conversion of one share of Series B convertible preferred
stock (together with the shares of common stock underlying such
shares of Series B convertible preferred stock and such warrants).
The Class B Units are immediately separable into their components
upon closing of the offering contemplated hereby. For each Class B
Unit we sell, the number of Class A Units we are offering will be
decreased on a dollar-for-dollar basis. Because we will issue a
warrant as part of each Unit, the number of warrants sold in this
offering will not change as a result of a change in the mix of the
Units sold. |
|
|
|
Offering price
per Class B Unit: |
|
$ |
|
|
|
Description of
Series B Preferred Stock: |
|
Each share of Series B preferred stock is
convertible at any time at the holder’s option into a number of
shares of common stock equal to $5,000 divided by the Conversion
Price. Notwithstanding the foregoing, we shall not effect any
conversion of Series B preferred stock, with certain exceptions, to
the extent that, after giving effect to an attempted conversion,
the holder of shares of Series B preferred stock (together with
such holder’s affiliates, and any persons acting as a group
together with such holder or any of such holder’s affiliates) would
beneficially own a number of shares of our common stock in excess
of 4.99% (or, at the election of the purchaser, 9.99%) of the
shares of our common stock then outstanding after giving effect to
such exercise. The Series B Preferred Stock does not generally have
any voting rights. For additional information, see “Description of
Securities—Series B Preferred Stock” in this prospectus.
|
|
|
|
Number
of shares of common stock outstanding after the
offering:(1) |
|
_______
shares of common stock |
|
|
|
Market
for the common stock: |
|
Our
common stock is quoted on the OTC Markets Pink Sheets trading
system under the symbol “SIGY”. On June 21, 2022, the last reported
sale price for our common stock was $0.249 per share. Prior to this
offering, there has been a limited market for our common stock.
While our common stock is quoted on the OTC Markets Pink Sheets,
there has been negligible trading volume. |
|
|
|
|
|
There
is no assurance that an active trading market will develop, or, if
developed, that it will be sustained. Consequently, purchasers of
our common stock may find it difficult to resell the securities
offered herein should the purchasers desire to do so when eligible
for public resale. |
|
|
|
|
|
Our
officers and directors are not purchasing securities in this
offering. |
|
|
|
Use
of proceeds: |
|
We estimate that we will
receive approximately $___________ in gross proceeds if we sell all
of the Class A Units in the offering (based on an assumed offering
price of $[__] per Class A Unit, which was the last reported sales
price of our common stock as quoted on the OTC Markets Pink Sheets
on , 2022), and we will receive estimated net proceeds (after
deducting underwriting discounts and estimated offering expenses)
(assuming no exercise of the underwriter’s over-allotment option,
the Series A Warrants included in the Class A Units and Class B
Units or the Representatives’ Warrants offered hereby).
We currently intend to use the net proceeds from this offering,
together with our existing cash and cash equivalents, to fund our
research and development activities, clinical trials and the
regulatory review process, and the remainder for working capital
and other general corporate purposes. See “Use of Proceeds” for a
more detailed explanation of how the proceeds from the Offering
will be used.
|
|
|
|
Over-allotment
option: |
|
We
have granted a 45-day option to the representative of the
underwriters to purchase up to additional shares of common stock
and/or additional Series A Warrants, based on an assumed
public offering price of $ per Class A Unit or $__ per Class B
Unit, which was the last reported sales price of our common stock
on the OTC Markets Pink Sheets on , 2022 (having the same terms as
the Series A Warrants included in the Class A Units and Class B
Units in the offering) from us in any combination thereof at a
price per share of common stock equal to the public offering price
per Class A Unit and Class B Unit minus $0.01 and a price per
warrant of $0.01, respectively, in each case, less the underwriting
discounts payable by us, solely to cover over-allotments, if
any. |
|
|
|
Representative’s
Warrants |
|
The
registration statement of which this prospectus is a part also
registers for sale warrants (the “Representative’s Warrants”) to
purchase shares of our common stock (based on an assumed offering
price of $ per share, which was the last reported sales price of
our common stock as quoted on the OTC Markets Pink Sheets on ,
2022) to Univest Securities, LLC (the “representative”), as the
representative of the several underwriters, as a portion of the
underwriting compensation payable to the representative in
connection with this offering. The representative’s warrants will
be exercisable at any time, and from time to time, in whole or in
part, during the four and one half period commencing 180 days
following the commencement of sales of the securities in this
offering at an exercise price of $[__] (110% of the assumed public
offering price of the Class A Units). Please see
“Underwriting—Representative’s Warrants” for a description of these
warrants. |
|
|
|
Risk
Factors: |
|
See
“Risk Factors‚” and the other information in this prospectus for a
discussion of the factors you should consider before deciding to
invest in shares of our securities. |
|
|
|
Trading
symbol: |
|
Our
common stock is currently quoted on the OTC Markets Pink Sheets
trading system under the symbol “SIGY”. We plan to apply to have
our shares of common stock listed on the Nasdaq Capital Market
under the symbol “SIGY”. No assurance can be given that our
application will be approved or that the trading prices of our
common stock on the OTC Markets Pink Sheets trading system will be
indicative of the prices of our common stock if our common stock
were traded on the Nasdaq Capital Market. If, for whatever reason,
Nasdaq does not confirm the listing of our common stock on Nasdaq
prior to the pricing of the offering, we will not be able to
consummate and will terminate this offering.
There is no established trading market for the Series B Preferred
Stock or the Series A Warrants and we do not expect a market to
develop. In addition, we do not intend to apply for the listing of
the Series B Preferred Stock or the Series A Warrants on any
national securities exchange or other trading market. Without an
active trading market, the liquidity of the Series B Preferred
Stock and the Series A Warrants will be limited.
|
Series
A Warrants |
|
The
exercise price of the Series A Warrants shall be 110% of the
offering price of the Class A Units. The Series A Warrants have a
five-year term. The Series A Warrants are exercisable at any time
after their original issuance and at any time up to the date that
is five years after their original issuance. The Series A Warrants
will be exercisable, at the option of each holder, in whole or in
part by delivering to us a duly executed exercise notice and, at
any time a registration statement registering the issuance of the
shares of common stock underlying the Series A Warrants under the
Securities Act is effective and available for the issuance of such
shares, or an exemption from registration under the Securities Act
is available for the issuance of such shares, by payment in full in
immediately available funds for the number of shares of common
stock purchased upon such exercise. If a registration statement
registering the issuance of the shares of common stock underlying
the Series A Warrants under the Securities Act is not effective or
available and an exemption from registration under the Securities
Act is not available for the issuance of such shares, the holder
may, in its sole discretion, elect to exercise the Series A Warrant
through a cashless exercise, in which case the holder would receive
upon such exercise the net number of shares of common stock
determined according to the formula set forth in the Series A
Warrant. No fractional shares of common stock will be issued in
connection with the exercise of a Series A Warrant. In lieu of
fractional shares, we will pay the holder an amount in cash equal
to the fractional amount multiplied by the exercise
price. |
(1) |
The
number of shares of our common stock to be outstanding after this
offering is based on shares of our common stock outstanding as June
22, 2022. |
|
|
|
Unless we
indicate otherwise or the context otherwise requires, all
information in this prospectus: |
|
● |
assumes
no exercise by the underwriters of their option to purchase up to
additional
shares of our common stock and/or Series A Warrants from us to
cover over-allotments, if any; |
|
● |
no
exercise of the Series A Warrants included in the Class A Units and
Class B Units;
|
|
● |
assumes
no exercise of the Representative’s Warrants to be issued upon
consummation of this offering at an exercise price equal to 110% of
the initial offering price of the Class A Units; |
|
● |
assumes
no shares of Series B Preferred Stock are sold in this
offering;
|
|
● |
assumes
no exercise of outstanding warrants to purchase
shares
of our common stock at an exercise price of $[__]; and |
|
● |
excludes
shares of common stock to be reserved for future issuance under our
equity incentive plan, which will be effective upon the completion
of this offering. |
To
the extent we sell any Class B Units in this offering, the same
aggregate number of common stock equivalents resulting from this
offering would be convertible under the Series B Preferred issued
as part of the Class B Units.
SUMMARY FINANCIAL DATA
The
following tables set forth a summary of our historical financial
data as of, and for the periods ended on, the dates indicated. The
statements of operations data for the years ended December 31,
2021, and 2020 and the three months ended March 31, 2022 and March
31, 2021, and balance sheet data as of December 31, 2021, and
December 31, 2020 and March 31, 2022 and March 31, 2021 are derived
from our audited financial statements included elsewhere in this
prospectus.
The
following summary financial information should be read in
connection with, and is qualified by reference to, our financial
statements related notes thereto and the section titled
“Management’s Discussion and Analysis of Financial Condition and
Results of Operations” included elsewhere in this prospectus. Our
historical results are not necessarily indicative of results to be
expected in any future period.
Statement
of Operations Data:
|
|
Year
ended |
|
|
Year
ended |
|
|
|
December 31, |
|
|
December 31, |
|
|
|
2021 |
|
|
2020 |
|
|
|
|
|
|
|
|
Operating costs and expenses |
|
|
|
|
|
|
|
|
General and administrative |
|
$ |
1,274,203 |
|
|
$ |
497,072 |
|
Research and
development |
|
|
734,014 |
|
|
|
419,362 |
|
Total operating
Expenses |
|
|
2,008,217 |
|
|
|
916,434 |
|
Loss from operations |
|
|
(2,008,217 |
) |
|
|
(916,434 |
) |
|
|
|
|
|
|
|
|
|
Other expense |
|
|
|
|
|
|
|
|
Impairment of assets |
|
|
536,047 |
|
|
|
- |
|
Interest
expense |
|
|
460,355 |
|
|
|
343,156 |
|
Total other
income |
|
|
996,402 |
|
|
|
343,156 |
|
Net loss |
|
|
(3,004,619 |
) |
|
|
(1,259,590 |
) |
|
|
|
|
|
|
|
|
|
Net loss per share, basic and
diluted |
|
$ |
(0.08 |
) |
|
$ |
(0.17 |
) |
|
|
|
|
|
|
|
|
|
Weighted average number of shares of
common stock outstanding, basic and diluted |
|
|
36,396,585 |
|
|
|
7,351,272 |
|
Balance
Sheet Data
|
|
December 31, |
|
|
December 31, |
|
|
|
2021 |
|
|
2020 |
|
Cash |
|
$ |
340,956 |
|
|
$ |
84,402 |
|
Working capital |
|
$ |
52,075 |
|
|
$ |
586,047 |
|
Total assets |
|
$ |
710,259 |
|
|
$ |
694,082 |
|
Total liabilities |
|
$ |
974,843 |
|
|
$ |
594,903 |
|
Preferred stock |
|
$ |
- |
|
|
$ |
- |
|
Common stock |
|
$ |
3,730 |
|
|
$ |
3,520 |
|
Additional paid-in-capital |
|
$ |
3,997,445 |
|
|
$ |
1,356,799 |
|
Accumulated deficit |
|
$ |
(4,265,759 |
) |
|
$ |
(1,261,140 |
) |
Total stockholders’ equity |
|
$ |
(264,584 |
) |
|
$ |
694,082 |
|
Statement
of Operations Data:
|
|
Three
Months Ended |
|
|
Three
Months Ended |
|
|
|
March
31, |
|
|
March
31, |
|
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
|
|
Operating costs and expenses |
|
|
|
|
|
|
|
|
Marketing expenses |
|
$ |
250 |
|
|
$ |
82,250 |
|
General and
administrative |
|
|
228,342 |
|
|
$ |
116,516 |
|
Research and
development |
|
|
380,644 |
|
|
|
203,330 |
|
Total operating
Expenses |
|
|
609,236 |
|
|
|
402,096 |
|
Loss from operations |
|
|
(609,236 |
) |
|
|
(402,096 |
) |
|
|
|
|
|
|
|
|
|
Other expense |
|
|
|
|
|
|
|
|
Interest
expense |
|
|
31 |
|
|
|
- |
|
Interest expense -
debt discount |
|
|
52,257 |
|
|
|
50,860 |
|
Interest expense -
original issuance costs |
|
|
16,522 |
|
|
|
8,726 |
|
Total other
income |
|
|
68,810 |
|
|
|
59,586 |
|
Net loss |
|
|
(678,046 |
) |
|
|
(461,682 |
) |
|
|
|
|
|
|
|
|
|
Net loss per share, basic and
diluted |
|
$ |
(0.02 |
) |
|
$ |
(0.01 |
) |
|
|
|
|
|
|
|
|
|
Weighted average number of shares of
common stock outstanding, basic and diluted |
|
|
37,295,803 |
|
|
|
35,266,601 |
|
Balance Sheet Data
|
|
Three
Months Ended |
|
|
Three
Months Ended |
|
|
|
March
31, |
|
|
March
31, |
|
|
|
2022 |
|
|
2021 |
|
Cash |
|
$ |
81,385 |
|
|
$ |
340,956 |
|
Working capital |
|
$ |
62,245 |
|
|
$ |
52,075 |
|
Total assets |
|
$ |
447,414 |
|
|
$ |
710,259 |
|
Total liabilities |
|
$ |
1,178,983 |
|
|
$ |
974,843 |
|
Preferred stock |
|
$ |
- |
|
|
$ |
- |
|
Common stock |
|
$ |
3,730 |
|
|
$ |
3,730 |
|
Additional paid-in-capital |
|
$ |
4,208,506 |
|
|
$ |
3,997,445 |
|
Accumulated deficit |
|
$ |
(4,943,805 |
) |
|
$ |
(4,265,759 |
) |
Total stockholders’ equity |
|
$ |
(731,569 |
) |
|
$ |
(264,584 |
) |
RISK FACTORS
You
should carefully consider the risks described below before
investing in our securities. Additional risks not presently known
to us or that our management currently deems immaterial also may
impair our business operations. If any of the risks described below
were to occur, our business, financial condition, operating
results, and cash flows could be materially adversely affected. In
such an event, the trading price of our common stock could decline,
and you could lose all or part of your investment. In assessing
these risks, you should also refer to the other information
contained in this Prospectus, including our consolidated financial
statements and related notes. The risks discussed below include
forward-looking statements, and our actual results may differ
substantially from those discussed in these forward-looking
statements.
Risks Related to Financial Condition
We are a development-stage therapeutic organization whose primary
focus in the foreseeable future will be the clinical progression of
Sigyn Therapy toward market clearance.
To
date, we have devoted substantially all of our resources to support
the development of Sigyn Therapy. This includes the completion
in vitro blood purification validation studies, animal
studies, the establishment of initial manufacturing protocols,
staffing our organization, establishing our intellectual property
portfolio, drafting regulatory documents and raising capital to
support these activities. However, there is no assurance that we
will obtain the capital resources necessary to continue to advance
Sigyn Therapy or other product candidates toward market
approval.
We have incurred significant net losses since inception and do not
anticipate that we will generate revenue in the near future. It is
expected that we will continue to incur substantial net losses in
the foreseeable future and we may never achieve
profitability.
We
are a development-stage medical technology company. Investment in
development-stage therapeutic organizations is highly speculative
based on the need for substantial capital resources and the risk
that therapeutic candidates will not receive regulatory approval or
become commercially viable if market cleared. We have incurred
losses in each year since inception. Our net losses were $3.0
million and $1.3 million for the years ended December 31, 2021 and
2020 , respectively As of December 31, 2021 and March 31,
2022, we had an accumulated deficit of $4.3 million and $4.9
million respectively. We expect to continue to spend significant
resources to fund the clinical progression of Sigyn Therapy and
other potential product candidates.
Going Concern Risk Factor.
As
described in our audited financial statements for the year ended
December 31, 2021 contained in our Annual Report on Form 10-K for
that same time period, our independent registered public accounting
firm included an explanatory paragraph indicating that our current
liquidity position raises substantial doubt about our ability to
continue as a going concern. It is anticipated that we will
continue to operate as a going concern until the completion of this
offering; however, there are no assurances that we will be continue
to operate if this offering is delayed.
Upon the completion of this offering, we may require additional
capital in the future to fund the continuance of our operations. If
we are unable to raise additional capital when needed, we could be
forced to delay, reduce or terminate our clinical development
programs.
We
believe that the net proceeds from this offering will be
approximately $____ million, based on an assumed public offering
price of $[__] per Class A Unit and Class B Unit, after deducting
the estimated underwriting discounts and commissions and estimated
offering expenses payable by us. We believe that such proceeds will
fund our operations plan for up to 24 months after the completion
of the offering. Accordingly, we acknowledge that there will be a
need to raise additional capital to fund future operations, which
may include the continued clinical progression of Sigyn Therapy and
other potential product candidates. However, our business or
operations plan may change as a result of factors currently unknown
to us, and we may need to seek additional funds sooner than
planned. However, there is no assurance that we will be able to
secure funding when we need it or on favourable terms.
Additionally, our ability to raise additional capital could be
adversely impacted by market conditions or a worsening global
economic climate.
Purchasers of our stock will experience
dilution.
At
March 31, 2022 and December 31, 2021, we had a net tangible book
value of approximately $0.005 and $0.012 per share of our common
stock, respectively. If you purchase our common stock from us in
our Offering, you will experience immediate and substantial
dilution to the extent of the difference between the public
offering price per share of our common stock (assuming a $ per
share public offering price, which is the assumed public offering
price set forth on the cover page of this prospectus) and the as
adjusted net tangible book value per share of our common stock
immediately after the offering of $xxx per share (assuming all
xxx,000 shares in the Offering are sold at $xxx per share, which is
the assumed public offering price set forth on the cover page of
this prospectus).
A small group of Company officers and directors hold a majority of
the control of the Company.
As of
June 10, 2022, 2022, the Company’s executive officers and directors
beneficially owned approximately 68.9% of the Company’s outstanding
common stock. By virtue of such stock ownership, the principal
shareholders are able to control the election of the members of the
Company’s Board of Directors and to generally exercise control over
the affairs of the Company. Such concentration of ownership could
also have the effect of delaying, deterring or preventing a change
in control of the Company that might otherwise be beneficial to
stockholders. There can be no assurance that conflicts of interest
will not arise with respect to such directors or that such
conflicts will be resolved in a manner favorable to the
Company.
Intellectual Property Risk
Factors
We
currently own the rights to U.S. and foreign patents pending and
patent applications and endeavor to continually improve our
intellectual property position. We consider the protection of our
technology to be vital to our business. While we intend to focus
primarily on patentable technology, we may also rely on trade
secrets, unpatented property, know-how, regulatory exclusivity,
patent extensions and continuing technological innovation to
develop our competitive position. We also own rights to the
trademarks Sigyn Therapeutics™ and Sigyn Therapy™.
Our
success will depend in large part on our ability to protect our
proprietary technologies, including Sigyn Therapy, and to operate
without infringing the proprietary rights of third parties. We rely
on a combination of patent, trade secret, copyright and trademark
laws, as well as confidentiality agreements, and other agreements
to establish and protect our proprietary rights. Our success also
depends, in part, on our ability to avoid infringing patents issued
to others. If we were judicially determined to be infringing on any
third-party patent, we could be required to pay damages, alter our
products or processes, obtain licenses, or cease sales of products
or certain activities.
It is
possible that our pending patent applications may not result in
issued patents, and that we will not develop additional proprietary
products that are patentable, that any patents issued to us may not
provide us with competitive advantages or will be challenged by
third parties and that the patents of others may prevent the
commercialization of products incorporating our technology.
Furthermore, others may independently develop similar products,
duplicate our products or design around our patents. U.S. patent
applications are not immediately made public, so it is possible
that a third party may obtain a patent on a technology we are
actively using. Additionally, there is a risk that any patent
applications that we file or later obtain could be challenged by
third parties and declared invalid or unenforceable.
Patent
law outside the United States is uncertain and currently undergoing
review and revisions in many countries. The laws of some countries
may not protect our proprietary rights to the same extent as the
laws of the United States. Third parties may attempt to oppose the
issuance of patents to us in foreign countries by initiating
opposition proceedings. Opposition proceedings against any of our
patent filings in a foreign country could have an adverse effect on
our corresponding patents that may be issued or pending in the
United States. In addition to patent protection, we rely on
unpatented trade secrets and proprietary technological expertise.
It is possible that others could independently develop or otherwise
acquire substantially equivalent technology or somehow gain access
to our trade secrets and proprietary technological
expertise.
We Face Industry & Competition Risks
Based
on the size of the market opportunity, the industry to treat sepsis
and other life-threatening inflammatory conditions is expected to
become extremely competitive. As a development-stage device, Sigyn
Therapy faces the challenge of establishing medical industry
support, which will be driven by treatment data resulting from
human clinical studies. Should Sigyn Therapy become market cleared,
we are likely to face significant competition. Additionally, we
will need to establish large-scale production of Sigyn Therapy in
order to be competitive in the marketplace.
In
the absence of approved drug agents to treat sepsis and other
life-threatening disorders, our competition is likely to come from
organizations that develop extracorporeal blood purification
therapies. Among these therapies are a cytokine adsorption
technology (CytoSorb from Cytosorbents Corporation); a technology
that removes circulating endotoxin (Toraymyxn from Toray
Industries); and two devices that target the removal of pathogens
from the bloodstream (the Hemopurifier from Aethlon Medical) and
(the Seraph-100 Microbind Affinity Filter from Exthera
Medical).
CytoSorb
is a clinical-stage therapeutic candidate in the United States and
market cleared in more than 40 countries outside the U.S. CytoSorb
was recently cleared to treat severe COVID-19 infections under FDA
Emergency-Use Authorization (EUA) based on its ability to adsorb
inflammatory cytokines from the bloodstream.
Toraymyxn
is a clinical-stage therapeutic candidate in the United States and
broadly market cleared outside the U.S. Toraymyxn houses an
immobilized antibiotic agent with a high specificity to bind
circulating endotoxin, a potent activator of sepsis resulting from
gram-negative bacterial infections. In North America, exclusive
rights to Toraymyxin are licensed to Spectral Medical, who is
conducting FDA approved studies to treat sepsis.
The
Aethlon Hemopurifier is a clinical-stage therapeutic candidate in
the United States. The Hemopurifier has been cleared to treat
severe COVID-19 infections through an FDA IDE supplement and was
previously cleared under FDA Emergency-Use Authorization (EUA) to
treat Ebola virus. Immobilized within the Hemopurifier is an
affinity lectin that has a high specificity to bind a
broad-spectrum of viral pathogens from the bloodstream.
The
Exthera Seraph-100 Microbind Affinity Filter is a clinical-stage
therapeutic candidate in the United States and market cleared
outside the U.S. for the removal of bloodstream pathogens. The
Seraph-100 was recently cleared and broadly deployed to treat
severe COVID-19 infections under FDA Emergency-Use Authorization
(EUA). The Seraph-100 incorporates heparin-coated polyethylene
beads that bind both viral and bacterial pathogens in the
bloodstream.
While
in vitro studies have validated the ability of Sigyn Therapy
to address inflammatory cytokines, bacterial toxins (including
endotoxin), hepatic toxins, and infectious viruses, there is no
assurance that we will receive market clearance and be able to
establish scalable manufacturing that would allow us to compete
with these and other emerging therapies.
Government Regulation May Cause Us Delays in Ability to Obtain
Approval
Sigyn
Therapy is subject to regulation by numerous regulatory bodies,
including the United States Food and Drug Administration (FDA) and
comparable international regulatory agencies. These agencies will
require that we comply with applicable laws and regulations
governing the development, testing, manufacturing, labeling,
marketing, storage, distribution, advertising and promotion, and
post-marketing surveillance of Sigyn Therapy. As a medical device,
the FDA’s Center for Devices and Radiological Health (CDRH) will
have primary jurisdiction over the premarket development, review,
and approval of Sigyn Therapy. Failure to comply with applicable
requirements could subject us to a variety of administrative
sanctions, such as issuance of warning letters, import detentions,
civil monetary penalties and/or judicial sanctions, such as product
seizures, injunctions, and criminal prosecution.
FDA’s Pre-market Approval Pathway May Take a Long Time for Approval
of our Product
Medical
devices are classified into one of three categories—Class I, Class
II or Class III—depending on the degree of risk associated with
each medical device and the extent of controls needed to provide
reasonable assurance of safety and effectiveness. We anticipate
Sigyn Therapy to be a Class III device, which is subject to a
Pre-market Approval (PMA) submission and approval.
A
pre-market approval application must be supported by extensive
data, including but not limited to technical, preclinical, clinical
trials, manufacturing and labelling to demonstrate to the FDA’s
satisfaction reasonable evidence of safety and effectiveness of the
device.
After
a pre-market approval application is submitted, the FDA has 45 days
to determine whether the application is sufficiently complete to
permit a substantive review and thus whether the FDA will file the
application for review. The FDA has 180 days to review a filed
pre-market approval application, although the review of an
application generally occurs over a significantly longer period of
time and can take up to several years. During this review period,
the FDA may request additional information or clarification of the
information already provided. Also, an advisory panel of experts
from outside the FDA may be convened to review and evaluate the
application and provide recommendations to the FDA as to the
approvability of the device.
Although
the FDA is not bound by the advisory panel decision, the panel’s
recommendations are important to the FDA’s overall decision-making
process. In addition, the FDA may conduct a preapproval inspection
of the manufacturing facility to ensure compliance with the Quality
System Regulation, or QSR. The agency also may inspect one or more
clinical sites to assure compliance with FDA’s
regulations.
Upon
completion of the PMA review, the FDA may: (i) approve the PMA
which authorizes commercial marketing with specific prescribing
information for one or more indications, which can be more limited
than those originally sought; (ii) issue an approvable letter which
indicates the FDA’s belief that the PMA is approvable and states
what additional information the FDA requires, or the post-approval
commitments that must be agreed to prior to approval; (iii) issue a
not approvable letter which outlines steps required for approval,
but which are typically more onerous than those in an approvable
letter, and may require additional clinical trials that are often
expensive and time consuming and can delay approval for months or
even years; or (iv) deny the application. If the FDA issues an
approvable or not approvable letter, the applicant has 180 days to
respond, after which the FDA’s review clock is reset.
Clinical Trial Requirements Pose Risk to Obtaining
Approval
Human
clinical trials are required to support pre-market approval. In the
United States, human clinal studies require the submission of an
Investigational Device Exemption (IDE) to FDA. The IDE application
must be supported by appropriate data, such as animal and
laboratory testing results, showing it is safe to test the device
in humans and that the testing protocol is scientifically sound. At
present, we are preparing an IDE to submit to FDA. Prior to
initiating human studies, our IDE will need to be approved in
advance by the FDA for a specific number of patients at specified
study sites. During the trial, we must comply with the FDA’s IDE
requirements for investigator selection, trial monitoring,
reporting and recordkeeping. Our clinical trial investigators must
obtain patient informed consent, rigorously follow the
investigational plan and study protocol, control the disposition of
investigational devices and comply with all reporting and
recordkeeping requirements. Clinical trials of Sigyn Therapy will
not be allowed to begin until our IDE application has been approved
by the FDA and the appropriate institutional review boards, or
IRBs, at the clinical trial sites. An IRB is an appropriately
constituted group that has been formally designated to review and
monitor medical research involving subjects and which has the
authority to approve, require modifications in, or disapprove
research to protect the rights, safety and welfare of human
research subjects. The FDA or the IRB at each site at which a
clinical trial is being performed may withdraw approval of a
clinical trial at any time for various reasons, including a belief
that the risks to study subjects outweigh the benefits or a failure
to comply with FDA or IRB requirements. Even if a trial is
completed, the results of clinical testing may not demonstrate the
safety and effectiveness of Sigyn Therapy or other product
candidates.
The
success of Sigyn Therapy and other product candidates will depend
on several factors, which include:
● the
completion of clinical studies that demonstrate the safety and
efficacy of our products; the receipt of market approval from
applicable regulatory authorities, and the completion of
post-market studies that may be required by applicable regulatory
authorities;
●the
establishment of commercial manufacturing capabilities and launch
of product marketing and commercial sales;
● the
acceptance of Sigyn Therapy or other product candidates by
patients, the medical community and third-party payors;
●obtaining
and maintaining healthcare coverage and adequate reimbursement for
Sigyn Therapy and other product candidates.
Many
of these factors may be beyond our control, including the time that
will be required to complete clinical testing, the regulatory
submission process, and a change in the competitive landscape. It
is possible that none of our product candidates will ever obtain
regulatory approval, even if we expend substantial time and
resources seeking such approval. If we do not achieve one or more
of these factors in a timely manner or at all, we could experience
significant delays or an inability to successfully complete
clinical trials, obtain regulatory approval or, if approved,
commercialize our product candidates, which would materially harm
our business, financial condition and the results of our
operations.
Our Pre-clinical Outcomes May Not Be Predictive of Clinical Trial
Success
The
results of our pre-clinical in vitro validations and animal
studies may not be predictive of human clinical study outcomes.
Historically, therapeutic candidates that perform satisfactorily in
pre-clinical and animal studies may nonetheless fail to obtain
marketing approval. If the results of our clinical studies are
inconclusive or if there are safety concerns or adverse events
associated with our product candidates, we may:
● be
delayed in obtaining marketing approval for our product candidates,
if approved at all;
●obtain
approval for indications or patient populations that are not as
broad as intended or desired;
●be
required to change the way our product is administered;
●be
required to perform additional clinical studies to support approval
or be subject to additional post-marketing testing
requirements;
●
have regulatory authorities withdraw their approval of a product or
impose restrictions on its distribution in the form of a modified
risk evaluation and mitigation strategy.
Additionally,
our product candidates could potentially cause adverse events that
have not yet been predicted. The inclusion of ill patients in our
clinical studies may result in deaths or other adverse medical
events due to other therapies or medications that such patients may
be using. As described above, any of these events could prevent us
from achieving or maintaining market acceptance of our product
candidates and impair our ability to commercialize our
products.
We will depend on enrollment and retention of patients in our
clinical trials for our product candidates. Delays or difficulties
enrolling or retaining patients in our clinical trials could
adversely impact our business operations.
The
successful and timely completion of clinical trials will require
that we enroll and retain a sufficient number of patient
candidates. Any clinical trials that we conduct could be subject to
delays for a variety of reasons, including as a result of patient
enrollment taking longer than anticipated, patient withdrawal, or
adverse events. These types of developments could cause us to delay
a clinical trial or halt further development. Patient enrollment
depends on many factors, including:
●the
size and nature of the patient population;
● the
severity of the disease, condition or infection under
investigation;
●
eligibility criteria for the trial;
●the
proximity of patients to clinical sites;
● the
design of the clinical protocol;
● the
ability to obtain and maintain patient consents;
● perceived
risks and benefits of the product candidate under
evaluation;
● the
ability to recruit clinical trial investigators with the
appropriate competencies and experience;
● the
risk that patients enrolled in clinical trials will drop out of the
trials before the administration of our product candidates or trial
completion;
●the
availability of competing clinical trials;
● the
availability of candidate patients during pandemic outbreaks, such
as COVID-19; and
●the
availability of new therapies that are approved for the indication
the clinical trial is investigating.
These
factors may make it difficult for us to enroll enough patients to
complete our clinical trials in a timely and cost-effective manner.
Delays in the completion of our clinical trials may jeopardize our
ability to commence product sales and generate revenue.
Additionally, factors that delay the commencement or completion of
clinical trials may establish a basis for FDA to deny the approval
of our therapeutic candidates.
Risks Related to our Business and Industry
We are highly dependent on our Chief Executive
Officer.
We
are highly dependent on our Chief Executive Officer, James A.
Joyce, who is integral to our business operations and the
development of our product candidates. The loss of Mr. Joyce’s
services could have a material adverse effect on our business
operations.
We have a limited number of employees
We
are a small organization that maintains a staff of five full-time
employees. The departure of any employee could have a material
adverse effect on our business operations.
We may be adversely affected by current and future pandemic
outbreaks .
The
current COVID-19 (“COVID-19”) outbreak and the emergence of future
pandemics could have a deleterious impact on our business
operations. As demonstrated by COVID-19, pandemic outbreaks can
significantly delay or interrupt crucial business operations.
Pandemic outbreaks may also reduce the availability of human
resources or critical supplies that will be required to carry out
our clinical and manufacturing programs. Additionally, stay-at-home
and other pandemic outbreak policies could restrict critical
personnel from conducting the core activities necessary to advance
Sigyn Therapy and other potential product candidates.
Economic uncertainty may adversely affect our access to capital,
cost of capital and ability to execute our business plan as
scheduled.
Generally,
worldwide economic conditions remain uncertain. Access to capital
markets is critical to our ability to operate. Traditionally,
medical technology companies have funded their research and
development expenditures through raising capital in the equity
markets. Declines and uncertainties in these markets in the past
have severely restricted raising new capital and have affected
companies’ ability to continue to expand or fund clinical
development efforts. There is no certainty that the capital markets
will be conducive to raising capital on favorable terms. If
economic conditions become worse, our future cost of equity or debt
capital and access to the capital markets could be adversely
affected. In addition, if we are unable to access the capital
markets on favorable terms, our ability to execute our clinical
progression plan would be compromised. Moreover, we rely and intend
to rely on third-party vendors, including clinical research
organizations, contract manufacturing organizations and
consultants. Global economic conditions may result in a disruption
or delay in the performance of our third-party contractors and
suppliers. If such third-parties are unable to adequately satisfy
their contractual commitments to us in a timely manner, our
business could be adversely affected.
Our reliance on third-party vendors heightens the risks faced by
our business.
We
rely on third-party vendors for certain key aspects of our
business, including support for information technology systems and
certain human resource functions. We do not control these partners,
but we depend on them in ways that may be significant to us. If
these parties fail to meet our expectations or fulfill their
obligations to us, we may fail to receive the expected benefits. In
addition, if any of these third parties fails to comply with
applicable laws and regulations in the course of its performance of
services for us, there is a risk that we may be held responsible
for such violations as well, which could adversely affect our
business, reputation, financial condition or results of
operations.
We rely on third party organizations to conduct our pre-clinical
testing, research and clinical trials.
We
rely on third-party organizations to conduct preclinical studies,
and we expect to continue to rely on third parties, such as CROs,
contract manufacturers of clinical supplies, clinical data
management organizations, medical institutions and clinical
investigators, to conduct our clinical trials and to conduct some
aspects of our research and pre-clinical testing. These third
parties may terminate their engagements with us at any time. If
these third parties do not successfully carry out their duties,
meet expected deadlines or conduct our studies in accordance with
regulatory requirements or our stated protocols, we will not be
able to obtain, or may be delayed in obtaining, marketing approvals
for our product candidates and will not be able to, or may be
delayed in our efforts to, successfully commercialize our product
candidates. Furthermore, these third parties may also have
relationships with other entities, some of which may be our
competitors. If we are required to enter into alternative
arrangements, it could delay our product development
activities.
Upon commercialization of our products, we may be dependent on
third parties to market, distribute and sell our
products.
Our
ability to generate revenues may be dependent upon the sales and
marketing efforts of any future co-marketing partners and
third-party distributors. At this time, we have not entered into an
agreement with any commercialization partner and only plan to do so
prior to commercialization. If we fail to reach an agreement with
any commercialization partner, or upon reaching such an agreement
that partner fails to sell a large volume of our products, it may
have a negative impact on our business, financial condition and
results of operations .
We will be dependent on third parties for the manufacture of our
product candidates. If we experience problems with any of these
third parties, they could delay clinical development or marketing
approval of our product candidates or our ability to sell any
approved products.
We do
not have any manufacturing facilities. We expect to rely on
third-party manufacturers for the manufacture of our product
candidates for clinical trials and for commercial supply of any
product candidate for which we obtain marketing
approval.
We
may be unable to establish agreements with third-party
manufacturers for clinical or commercial supply on terms favorable
to us, or at all. Even if we are able to establish agreements with
third-party manufacturers, reliance on third-party manufacturers
entails additional risks, including:
|
● |
reliance
on the third party for regulatory compliance and quality
assurance; |
|
|
|
|
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the
possible breach of the manufacturing agreement by the third party,
including the inability to supply sufficient quantities or to meet
quality standards or timelines; and |
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the
possible termination or nonrenewal of the agreement by the third
party at a time that is costly or inconvenient for us. |
Third-party
manufacturers may not be able to comply with U.S. cGMPs or similar
regulatory requirements outside the United States. Our failure, or
the failure of our third-party manufacturers, to comply with cGMPs
or other applicable regulations, even if such failures do not
relate specifically to our product candidates or approved products,
could result in sanctions being imposed on us or the manufacturers,
including fines, injunctions, civil penalties, delays, suspension
or withdrawal of approvals, license revocation, seizures or recalls
of product candidates, operating restrictions and criminal
prosecutions, any of which could adversely affect supplies of our
product candidates and harm our business and results of
operations.
Any
product that we develop may compete with other product candidates
and products for access to these manufacturing facilities. There
are a limited number of manufacturers that operate under cGMPs and
that might be capable of manufacturing for us.
Any
performance failure on the part of our manufacturers, including a
failure that may not relate specifically to our product candidates
or approved products, could delay clinical development or marketing
approval or adversely impact our ability to generate commercial
sales. If our contract manufacturers cannot perform as agreed, we
may be required to replace that manufacturer.
Our
anticipated future dependence upon others for the manufacture of
our current and future product candidates or products may adversely
affect our future profit margins and our ability to commercialize
any product candidates that receive marketing approval on a timely
and competitive basis.
Our business could be adversely affected by reliance on sole
suppliers.
Notwithstanding
our current multiple supplier approach, certain essential product
components may be supplied in the future by sole, or a limited
group of, suppliers. Most of our products and components are
purchased through purchase orders rather than through long term
supply agreements and large volumes of inventory may not be
maintained. There may be shortages and delays in obtaining certain
product components. Disruption of the supply or inventory of
components could result in a significant increase in the costs of
these components or could result in an inability to meet the demand
for our products. In addition, if a change in the manufacturer of a
key component is required, qualification of a new supplier may
result in delays and additional expenses in meeting customer demand
for products. These factors could adversely affect our revenues and
ability to retain our experienced sales force.
Changes in financial accounting standards or practices may cause
adverse, unexpected financial reporting fluctuations and affect our
reported results of operations.
We
are required to prepare our financial statements in accordance with
generally accepted accounting principles in the United States of
America (“GAAP”), which is periodically revised and/or expanded.
From time to time, we are required to adopt new or revised
accounting standards issued by recognized authoritative bodies,
including the FASB and the SEC. It is possible that future
accounting standards we are required to adopt may require
additional changes to the current accounting treatment that we
apply to our financial statements and may require us to make
significant changes to our reporting systems. Such changes could
result in a material adverse impact on our business, results of
operations and financial condition.
We have a limited operating history, which may make it difficult to
evaluate our business and prospects.
We
face the risks associated with businesses in their early stages,
with limited operating histories and whose prospects are hard to
evaluate. Any evaluation of our business and our prospects must be
considered in light of the uncertainties, delays, difficulties and
expenses commonly experienced by companies at this stage, which
generally include unanticipated problems and additional costs
relating to the development and testing of products, product
approval or clearance, regulatory compliance, production, product
introduction and marketing, and competition. Many of these factors
are beyond the control of our management. In addition, our
performance will be subject to other factors beyond our control,
including general economic conditions and conditions in the
healthcare industry.
Market acceptance of Sigyn Therapy and other product candidates
will be vital to our future success.
The
commercial success of our products is dependent upon their
acceptance by the intended markets. Our product candidates may not
gain or maintain any significant degree of market acceptance among
consumers, surgeons or healthcare providers, or acceptance by
third-party payors, such as health insurance companies, Medicaid
and Medicare. We cannot be certain that our products will be used
by the medical community, even upon market approval of our product
candidates.
Market
acceptance will be dependent on numerous factors, many of which are
not under our control, including:
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the
safety and efficacy of our products and product candidates, as
demonstrated in clinical trials and after
commercialization; |
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favorable
regulatory approval and product labeling; |
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the
ease of use of our product and any related instrumentation that
accompany our product; |
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our
ability to educate and train doctors on the advantages of our
product; |
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the
price of any approved product relative to alternative technologies;
and |
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the
availability of third-party reimbursement. |
If
our products and product candidates do not achieve significant
market acceptance, our potential for revenues and profitability
would be adversely affected.
Our employees, independent contractors, principal investigators,
consultants, vendors and clinical research organizations, or CROs,
could engage in misconduct or other improper activities, including
noncompliance with regulatory standards and
requirements.
We
are exposed to the risk that our employees, independent
contractors, principal investigators, consultants, vendors and CROs
may engage in fraudulent or other illegal activity. Misconduct by
these persons could include intentional, reckless or negligent
conduct or unauthorized activity that violates: laws or
regulations, including those laws requiring the reporting of true,
complete and accurate information to the FDA or foreign regulatory
authorities; manufacturing standards; federal, state and foreign
healthcare fraud and abuse laws and data privacy; or laws that
require the true, complete and accurate reporting of financial
information or data. In particular, sales, marketing and other
business arrangements in the healthcare industry are subject to
extensive laws intended to prevent fraud, kickbacks, self-dealing
and other abusive practices. These laws may restrict or prohibit a
wide range of business activities, including research,
manufacturing, distribution, pricing, discounting, marketing and
promotion, sales commission, customer incentive programs and other
business arrangements. Activities subject to these laws also
involve the improper use of information obtained in the course of
clinical trials, which could result in regulatory sanctions or
other actions stemming from a failure to comply with such laws or
regulations, and serious harm to our reputation. In addition,
federal procurement laws impose substantial penalties for
misconduct in connection with government contracts and require
certain contractors to maintain a code of business ethics and
conduct. If any such actions are instituted against us, we may have
to terminate employees or others involved and the impact of such
termination can result in our experiencing delays and additional
costs associated with replacing the services being provided. If we
are not successful in defending ourselves or asserting our rights,
those actions could have a significant impact on our business,
including the imposition of civil, criminal and administrative
penalties, damages, monetary fines, possible exclusion from
participation in Medicare, Medicaid and other federal healthcare
programs, FDA debarment, contractual damages, reputational harm,
diminished profits and future earnings, and curtailment of our
operations, any of which could adversely affect our ability to
operate our business and our operating results.
U.S. legislative or FDA regulatory reforms may make it more
difficult and costly for us to obtain regulatory approval of future
product candidates and to manufacture, market and distribute our
products after approval is obtained.
From
time to time, legislation is drafted and introduced in Congress
that could significantly change the statutory provisions governing
the regulatory approval, manufacture and marketing of regulated
products or the reimbursement thereof. In addition, FDA regulations
and guidance are often revised or reinterpreted by the FDA in ways
that may significantly affect our business and our products. Any
new regulations or revisions or reinterpretations of existing
regulations may impose additional costs or lengthen review times of
future products. In addition, FDA regulations and guidance are
often revised or reinterpreted by the agency in ways that may
significantly affect our business and our products. It is
impossible to predict whether legislative changes will be enacted
or FDA regulations, guidance or interpretations changed, and what
the impact of such changes, if any, may be.
Information Technology Risks
Our
internal information technology (IT) systems could be compromised,
damaged, breached or destroyed. IT risks include hardware and
software failure, human error, spam, viruses, malicious attacks,
industrial espionage, as well as natural disasters such as fires,
earthquakes, hurricanes or floods. IT system failures may affect
our ability to run our operations. Operational impact of IT
failures or breaches may result in loss of productivity and a
reduced ability to advance our clinical programs. Failures or
breaches of our IT systems could also result in the loss or
corruption of confidential data or in the theft of data or critical
information.
Additionally,
the increased sophistication and activities of perpetrators of
cyber-attacks have resulted in an increase in information security
risks in recent years. Hackers develop and deploy viruses, worms,
and other malicious software programs that attack products and
services and gain access to networks and data centers. If we
experience difficulties maintaining existing systems or
implementing new systems, we could incur significant losses due to
disruptions in our operations. Additionally, these systems may
contain valuable proprietary and confidential information and may
contain personal data of employees, third-party vendors, and
collaborators. A security breach could result in disruptions of our
internal systems and business applications, harm to our competitive
position from the compromise of confidential business information,
or subject us to liability under laws that protect personal data.
As cyber threats continue to evolve, we may be required to expend
additional resources to continue to enhance our information
security measures and/or to investigate and remediate any
information security vulnerabilities. Any of these consequences
could adversely affect business.
Risk Factors Related to Our Common Stock
The price of our common stock may be volatile, and a shareholder’s
investment in our common stock could suffer a decline in
value.
There
has been significant volatility in the volume and market price of
our common stock, and such volatility may continue in the future.
In addition, factors such as quarterly variations in our operating
results, actions by governmental agencies, national economic and
stock market considerations as well as other events and
circumstances beyond our control, including the effects of pandemic
outbreaks, could have a significant impact on the future market
price of our common stock and the relative volatility of such
market price.
A
prolonged decline in the price of our common stock could result in
a reduction in the liquidity of our common stock and a reduction in
our ability to raise capital. If we are unable to raise the funds
required for all of our planned operations and key initiatives, we
may be forced to allocate funds from other planned uses, which may
negatively impact our business and operations, including our
ability to develop new products and continue our current
operations.
Our common stock is currently traded on the OTC Markets Pink
Sheets, which may have an unfavorable impact on our stock price and
liquidity.
While
we plan to submit an application to list our securities on the
Nasdaq stock exchange, our stock is currently listed on the OTC
Markets Pink Sheets. The OTC Markets Pink Sheets is significantly
more limited market than the national securities exchanges such as
the New York Stock Exchange, or Nasdaq stock exchange, and there
are lower financial or qualitative standards that a company must
meet to have its stock quoted on the OTC Markets Pink Sheets. OTC
Markets Pink Sheets is an inter-dealer quotation system much less
regulated than the major exchanges, and trading in our common stock
may be subject to abuses, volatility and shorting, which may have
little to do with our operations or business prospects. This
volatility could depress the market price of our common stock for
reasons unrelated to operating performance. The Financial Industry
Regulatory Authority (“FINRA”) has adopted rules that require a
broker-dealer to have reasonable grounds for believing an
investment is suitable for that customer when recommending an
investment to a customer. FINRA believes that there is a high
probability that speculative low-priced securities will not be
suitable for some customers and may make it more difficult for
broker-dealers to recommend that their customers buy our common
stock, which may result in a limited ability to buy and sell our
stock.
Our common shares are currently subject to the “Penny Stock” rules
of the SEC, and the trading market in our securities will likely be
limited, which makes transactions in our stock cumbersome and may
reduce the value of an investment in our stock.
The
Securities and Exchange Commission has adopted Rule 15g-9 which
establishes the definition of a “penny stock,” for the purposes
relevant to us, as any equity security that has a market price of
less than $5.00 per share or with an exercise price of less than
$5.00 per share, subject to certain exceptions. For any transaction
involving a penny stock, unless exempt, the rules
require:
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That
a broker or dealer approve a person’s account for transactions in
penny stocks; and |
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The
broker or dealer receive from the investor a written agreement to
the transaction, setting forth the identity and quality of the
penny stock to be purchased. |
In
order to approve a person’s account for transactions in penny
stocks, the broker or dealer must:
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Obtain
financial information and investment experience objectives of the
person; and |
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Make
a reasonable determination that the transactions in penny stocks
are suitable for that person and the person has sufficient
knowledge and experience in financial matters to be capable of
evaluating the risks of transactions in penny stocks. |
The
broker or dealer must also deliver, prior to any transaction in a
penny stock, a disclosure schedule prescribed by the Commission
relating to the penny stock market, which, in highlight
form:
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Sets
forth the basis on which the broker or dealer made the suitability
determination; and |
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That
the broker or dealer received a signed, written agreement from the
investor prior to the transaction. |
Generally,
brokers may be less willing to execute transactions in securities
subject to the “penny stock” rules. This may make it more difficult
for investors to dispose of our common stock and cause a decline in
the market value of our stock.
Disclosure
also has to be made about the risks of investing in penny stocks in
both public offerings and in secondary trading and about the
commission’s payable to both the broker-dealer and the registered
representative, current quotations for the securities and the
rights and remedies available to an investor in cases of fraud in
penny stock transactions. Finally, monthly statements have to be
sent disclosing recent price information for the penny stock held
in the account and information on the limited market in penny
stocks.
We do not intend to pay any cash dividends on our shares of common
stock in the near future, so our shareholders will not be able to
receive a return on their shares unless they sell their
shares.
We do
not anticipate paying any cash dividends on our common stock in the
foreseeable future. There is no assurance that future dividends
will be paid, and if dividends are paid, there is no assurance with
respect to the amount of any such dividend. Unless we pay
dividends, our shareholders will not be able to receive a return on
their shares unless they sell such shares.
Raising additional capital may cause dilution to our existing
stockholders and investors in this offering, restrict our
operations or require us to relinquish rights to our product
candidates on unfavorable terms to us.
We
may seek additional capital through a variety of means, including
through private and public equity offerings and debt financings,
collaborations, strategic alliances and marketing, distribution or
licensing arrangements. To the extent that we raise additional
capital through the sale of equity or convertible debt securities,
or through the issuance of shares under other types of contracts,
or upon the exercise or conversion of outstanding options,
warrants, convertible debt or other similar securities, the
ownership interests of our stockholders will be diluted, and the
terms of such financings may include liquidation or other
preferences, antidilution rights, conversion and exercise price
adjustments and other provisions that adversely affect the rights
of our stockholders, including rights, preferences and privileges
that are senior to those of our holders of common stock in terms of
the payment of dividends or in the event of a liquidation. In
addition, debt financing, if available, could include covenants
limiting or restricting our ability to take certain actions, such
as incurring additional debt, making capital expenditures, entering
into licensing arrangements, or declaring dividends and may require
us to grant security interests in our assets. If we raise
additional funds through collaborations, strategic alliances, or
marketing, distribution or licensing arrangements with third
parties, we may have to relinquish valuable rights to our
technologies, future revenue streams, product or product candidates
or grant licenses on terms that may not be favorable to us. If we
are unable to raise additional funds through equity or debt
financings when needed, we may need to curtail or cease our
operations.
There is no established market for the Series B Preferred
Stock or Series A Warrants being offered in this
offering.
There is no established trading market for the Series B Preferred
Stock or Series A Warrants and we do not expect a market to
develop. In addition, we do not intend to apply for the listing of
the Series B Preferred Stock or Series A Warrants on any national
securities exchange or other trading market. Without an active
trading market, the liquidity of the Series B Preferred Stock or
Warrants will be limited.
Holders of Series B Preferred Stock will have limited voting
rights.
Except with respect to certain material changes in the terms of the
Series B Preferred Stock and certain other matters and except as
may be required by Delaware law, holders of Series B Preferred
Stock will have no voting rights. Holders of Series B Preferred
Stock will have no right to vote for any members of our board of
directors.
The Series A Warrants are speculative.
The Series A Warrants offered in this offering do not confer any
rights of common stock ownership on their holders, such as voting
rights or the right to receive dividends, but rather merely
represent the right to acquire shares of our common stock at a
fixed price for a limited period of time. Specifically, commencing
on the date of issuance, holders of the Series A Warrants may
exercise their right to acquire the common stock and pay an
exercise price of $____ per share (110% of the public offering
price of our Class A Units in this offering), prior to five years
from the date of issuance, after which date any unexercised
warrants will expire and have no further value. Moreover, following
this offering, the market value of the Series A Warrants is
uncertain and there can be no assurance that the market value of
the Series A Warrants will equal or exceed their public offering
price. There can be no assurance that the market price of the
common stock will ever equal or exceed the exercise price of the
Series A Warrants, and consequently, whether it will ever be
profitable for holders of the warrants to exercise the Series A
Warrants.
The Series A Warrants may not have any value and if an
active, liquid trading market for the Series A Warrants does not
develop, you may not be able to sell your warrants quickly or at or
above the price you paid for them.
The Series A Warrants issued in this offering will be immediately
exercisable and expire five years after their issuance. The Series
A Warrants will have an initial exercise price equal to $
.
In the event that our common stock price does not exceed the
exercise price of the warrants during the period when the warrants
are exercisable, the warrants may not have any value.
Prior to this offering, there has been no public market for any of
our warrants and we do not intend to list the Warrants on the
Nasdaq Capital Market or any other exchange. As a result, an active
trading market may not develop for the Series A Warrants to be sold
in this offering or, if developed, may not be sustained, and the
market for the Series A Warrants may be highly volatile or may
decline regardless of our operating performance. The lack of an
active market may impair your ability to sell your Series A
Warrants at the time you wish to sell them or at a price that you
consider reasonable.
The exercise price of the Series A Warrants offered by this
prospectus will not be adjusted for certain dilutive
events.
The exercise price of the Series A Warrants offered by this
prospectus are subject to adjustment for certain events, including,
but not limited to, the payment of a stock dividend, stock splits,
certain issuances of capital stock, options, convertible securities
and other securities. However, the exercise prices will not be
adjusted for dilutive issuances of securities and there may be
transactions or occurrences that may adversely affect the market
price of our common stock or the market value of such warrants
without resulting in an adjustment of the exercise prices of such
warrants.
There is no assurance that we will fulfill or maintain the listing
requirements of the NASDAQ.
We
are applying to list our common stock on the Nasdaq Capital Market,
a national securities exchange. An approval of our listing
application by NASDAQ will be subject to, among other things, our
ability to fulfill all of the listing requirements of NASDAQ. There
is no assurance that our securities will become NASDAQ listed and
even if our shares become NASDAQ listed, there is no assurance that
an active trading market for our securities will develop or be
sustained after this offering is completed.
In
addition, NASDAQ has rules for continued listing, including,
without limitation, minimum market capitalization and other
requirements. Failure to maintain our listing, or de-listing from
NASDAQ, would make it more difficult for shareholders to dispose of
our securities and more difficult to obtain accurate price
quotations on our securities. This could have an adverse effect on
the price of our common shares. Our ability to issue additional
securities for financing or other purposes, or otherwise to arrange
for any financing we may need in the future, may also be materially
and adversely affected if our common shares and/or other securities
are not traded on a national securities exchange.
If we are unable to meet the NASDAQ listing criteria, our common
shares may continue to trade on the OTC Pink
Sheets.
We
are applying for our common stock to be listed on NASDAQ, a
national securities exchange. The NASDAQ requires companies
desiring to list their common stock to meet certain listing
criteria including total number of shareholders: minimum stock
price (which will necessitate that we effect a reverse split of our
issued and outstanding common stock before listing), total value of
public float, and in some cases total shareholders’ equity and
market capitalization. Our failure to meet such applicable listing
criteria could prevent us from listing our common stock on NASDAQ.
In the event we are unable to have our shares traded on NASDAQ, our
common stock may continue to trade on the OTC Pink Sheets, which is
less liquid and more volatile than the NASDAQ. Our failure to have
our shares traded on NASDAQ could make it more difficult for you to
trade our shares, could prevent our common stock trading on a
frequent and liquid basis and could result in the value of our
common stock being less than it would be if we were able to list
our shares on NASDAQ.
We will have broad discretion in the use of the net proceeds to us
from this offering and may not use them
effectively.
We
will have broad discretion in the application of the net proceeds
to us from this offering, including for any of the purposes
described in the section titled “Use of Proceeds,” and you will not
have the opportunity as part of your investment decision to assess
whether the net proceeds are being used appropriately. Because of
the number and variability of factors that will determine our use
of the net proceeds from this offering, our ultimate use may vary
substantially from our currently intended use. Investors will need
to rely upon the judgment of our management with respect to the use
of proceeds. Pending use, we may invest the net proceeds from this
offering in investment-grade, interest-bearing securities, such as
money market accounts, certificates of deposit, commercial paper
and guaranteed obligations of the U.S. government that may not
generate a high yield for our stockholders. If we do not use the
net proceeds that we receive in this offering effectively, our
business, financial condition, results of operations and prospects
could be harmed, and the market price of our common stock could
decline.
We are an “emerging growth company,” and we cannot be certain if
the reduced reporting and disclosure requirements applicable to
emerging growth companies will make our common stock less
attractive to investors.
We
are an “emerging-growth company,” as defined in the JOBS Act, and
we have elected to take advantage of certain exemptions from
various reporting requirements that are applicable to other public
companies that are not “emerging growth companies,” including the
auditor attestation requirements of Section 404 of the
Sarbanes-Oxley Act, or Section 404, reduced disclosure obligations
regarding executive compensation in our periodic reports and proxy
statements, and exemptions from the requirements of holding a
nonbinding advisory vote on executive compensation and stockholder
approval of any golden parachute payments not previously approved.
Pursuant to Section 107 of the JOBS Act, as an emerging growth
company, we have elected to use the extended transition period for
complying with new or revised accounting standards until those
standards would otherwise apply to private companies. As a result,
our financial statements will not be comparable to the financial
statements of issuers who are required to comply with the effective
dates for new or revised accounting standards that are applicable
to public companies, which may make our common stock less
attractive to investors. In addition, if we cease to be an emerging
growth company, we will no longer be able to use the extended
transition period for complying with new or revised accounting
standards.
We
will remain an emerging-growth company until the earliest of: (1)
the last day of the fiscal year following the fifth anniversary of
this offering; (2) the last day of the first fiscal year in which
our annual gross revenue is $1.07 billion or more; (3) the date on
which we have, during the previous rolling three-year period,
issued more than $1 billion in non-convertible debt securities; and
(4) the date we qualify as a “large accelerated filer,” with at
least $700 million of equity securities held by
non-affiliates.
We
cannot predict if investors will find our common stock less
attractive as a result of choosing to rely on these exemptions. For
example, if we do not adopt a new or revised accounting standard,
our future results of operations will not be as comparable to the
results of operations of certain other companies in our industry
that adopted such standards. If some investors find our common
stock less attractive as a result, there may be a less active
trading market for our common stock, and our stock price may be
more volatile.
SPECIAL NOTE REGARDING FORWARD-LOOKING
STATEMENTS
This
prospectus contains forward-looking statements concerning our
business, operations and financial performance and condition, as
well as our plans, objectives and expectations for our business
operations and financial performance and condition. Any statements
contained herein that are not statements of historical facts may be
deemed to be forward-looking statements. In some cases, you can
identify forward-looking statements by terminology such as “aim”,
“anticipate”, “assume”, “believe”, “contemplate”, “continue”,
“could”, “due”, “estimate”, “expect”, “goal”, “intend”, “may”,
“objective”, “plan”, “predict”, “potential”, “positioned”,
“pioneer”, “seek”, “should”, “target”, “will”, “would” and other
similar expressions that are predictions of or indicate future
events and future trends, or the negative of these terms or other
comparable terminology.
These
forward-looking statements include, but are not limited to,
statements about:
● |
our
use of net proceeds from this offering; |
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the
continued development and growth of the demand and markets for our
products; |
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our
ability to raise future capital through debt or equity financing
transactions; |
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our
ability to attract and retain key employees; |
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our
ability to manage growth in our business; and |
|
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our
ability to identify and successfully execute strategic
partnerships. |
Although
we base the forward-looking statements contained in this prospectus
on assumptions that we believe are reasonable, we caution you that
actual results and developments (including our results of
operations, financial condition and liquidity, and the development
of the industry in which we operate) may differ materially from
those made in or suggested by the forward-looking statements
contained in this prospectus. In addition, even if results and
developments are consistent with the forward-looking statements
contained in this prospectus, those results and developments may
not be indicative of results or developments in subsequent periods.
Certain assumptions made in preparing the forward-looking
statements contained in this prospectus include:
● |
our
ability to implement our business strategies; |
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our
ability to complete the development of products on time and on
budget; |
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our
competitive advantages; |
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our
ability to obtain and maintain financing on acceptable
terms; |
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the
impact of competition; |
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the
changes and trends in the life sciences industry; |
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changes
in laws, rules and regulations; |
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our
ability to maintain good business relationships with our exclusive
independent operators and strategic partners; |
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our
ability to keep pace with changing consumer
preferences; |
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our
ability to protect our intellectual property; |
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our
ability to identify, manage and integrate acquisitions; |
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our
ability to retain key personnel; and |
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the
absence of material adverse changes in our industry or the global
economy, including as a result of the COVID-19
pandemic. |
These
forward-looking statements are based on our current expectations,
estimates, forecasts and projections about our business and the
industry in which we operate and management’s beliefs and
assumptions, and are not guarantees of future performance or
development and involve known and unknown risks, uncertainties and
other factors that are in some cases beyond our control. As a
result, any or all of our forward-looking statements in this
prospectus may turn out to be inaccurate. Factors that may cause
actual results to differ materially from current expectations
include, among other things, those listed under “Risk Factors” and
elsewhere in this prospectus. Potential investors are urged to
consider these factors carefully in evaluating the forward-looking
statements. These forward-looking statements speak only as of the
date of this prospectus. Except as required by law, we assume no
obligation to update or revise these forward-looking statements for
any reason, even if new information becomes available in the
future. You should, however, review the factors and risks we
describe in the reports we will file from time to time with the
SEC, after the date of this prospectus. See “Where You Can Find
More Information”.
This
prospectus contains estimates, projections and other information
concerning our industry, our business, and the markets for our
products. Information that is based on estimates, forecasts,
projections, market research or similar methodologies is inherently
subject to uncertainties, and actual events or circumstances may
differ materially from events and circumstances that are assumed in
this information. Unless otherwise expressly stated, we obtained
this industry, business, market and other data from our own
internal estimates and research as well as from reports, research
surveys, studies and similar data prepared by market research firms
and other third parties, industry, medical and general
publications, government data and similar sources.
In
addition, assumptions and estimates of our and our industry’s
future performance are necessarily subject to a high degree of
uncertainty and risk due to a variety of factors, including those
described in “Risk Factors”. These and other factors could cause
our future performance to differ materially from our assumptions
and estimates.
USE OF PROCEEDS
We estimate that the net proceeds from the sale of _____Class A
Units (assuming no purchase of Class B Units) will be approximately
$____ million, or approximately $____ million if the underwriter
exercises in full its option to purchase additional shares of our
common stock and/or Series A Warrants, based on an assumed public
offering price of $ per Class A Unit, after deducting the estimated
underwriting discounts and commissions and estimated offering
expenses payable by us. Each $1.00 increase (decrease) in the
assumed public offering price of $____ per Class A Units would
increase (decrease) the net proceeds to us from this offering by
approximately $___ million, or approximately $___ million if the
underwriter exercises its over-allotment option in full, assuming
the number of Class A Units offered by us, as set forth on the
cover page of this prospectus, remain the same and after deducting
estimated underwriting discounts and commissions and estimated
offering expenses payable by us.
The
expected use of net proceeds of this offering represents our
current intentions based upon our present plan and business
conditions. As of the date of this prospectus, we cannot specify
with certainty all of the particular uses for the net proceeds to
be received upon the completion of this offering. The amounts and
timing of our actual use of net proceeds will vary depending on
numerous factors. As a result, management will have broad
discretion in the application of the net proceeds, and investors
will be relying on our judgment regarding the application of the
net proceeds of this offering. We currently estimate that we will
use the net proceeds from this offering as follows:
______________________ We have presumed that we will receive
aggregate gross proceeds of $____ million and deducted $___ million
payable in offering costs, commissions and fees.
We
intend to use the net proceeds from this offering as
follows:
● |
Approximately
70% to fund research and the continued development of Sigyn
Therapy; and |
|
|
● |
Approximately
30% for working capital and other general corporate purposes,
including the additional costs with being a public
company.
|
The
use of the proceeds represents management’s estimates based upon
current business and economic conditions. We reserve the right to
use of the net proceeds we receive in the offering in any manner we
consider to be appropriate. Although our Company does not
contemplate changes in the proposed use of proceeds, to the extent
we find that adjustment is required for other uses by reason of
existing business conditions, the use of proceeds may be adjusted.
The actual use of the proceeds of this offering could differ
materially from those outlined above as a result of several factors
including those set forth under “Risk Factors” and elsewhere in
this prospectus.
DETERMINATION OF OFFERING PRICE
The
offering price of the Class A Units and Class B Units will be
negotiated between the underwriters and us considering our
historical performance and capital structure, prevailing market
conditions, and overall assessment of our business. Our common
stock is currently quoted on the OTC Markets Pink Sheets trading
system under the symbol “SIGY.” On June 22, 2022, the last reported
sale price of our common stock was $[__] per share.
MARKET FOR OUR COMMON STOCK AND RELATED STOCKHOLDER
MATTERS
Our
common stock is currently quoted on the OTC Markets Pink Sheets
trading system.
As of
June 22, 2022, we had _______ shareholders of record of our shares
of common stock.
We
intend to apply to list our common stock on the Nasdaq Capital
Market under the symbol “SIGY.” No assurance can be given that such
application will be approved or that a trading market will
develop. If, for whatever reason, Nasdaq does not confirm
the listing of our common stock on Nasdaq prior to the pricing of
the offering, we will not be able to consummate and will terminate
this offering.
DIVIDEND POLICY
We
have never paid any cash dividends on our common shares. We
anticipate that we will retain funds and future earnings to support
operations and to finance the growth and development of our
business. Therefore, we do not expect to pay cash dividends in the
foreseeable future following this offering. Any future
determination to pay dividends will be at the discretion of our
Board of Directors and will depend on our financial condition,
results of operations, capital requirements and other factors that
our Board of Directors deems relevant. In addition, the terms of
any future debt or credit financings may preclude us from paying
dividends.
CAPITALIZATION
The
following table sets forth our capitalization and cash as of March
31, 2022:
|
● |
on an
actual basis; and |
|
|
|
|
● |
on a
pro forma as adjusted basis to reflect the sale by us of ______
Class A Units (assuming no Class B Units are purchased) at the
assumed public offering price of $____ per Class A Unit, after
deducting the underwriting discounts and commissions and estimated
offering costs payable by us; and
|
|
|
|
|
● |
on a
proforma basis to reflect the conversion of senior secured
debentures. |
The
pro forma as adjusted information below is illustrative only and
our capitalization following the completion of this offering will
be adjusted based on the actual public offering price and other
terms of this offering determined at pricing.
You
should read this table together with the section in this prospectus
entitled “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” and our financial statements
and related notes included elsewhere in this prospectus. Numbers
are expressed in thousands (U.S. dollars) except share and per
share data.
|
|
March 31, 2022 |
|
Capitalization in U.S. Dollars in thousands (except share
data) |
|
Actual |
|
|
Pro Forma As
Adjusted
|
|
Cash |
|
$ |
81 |
|
|
$ |
|
|
Notes payable and senior secured
debentures |
|
|
705 |
|
|
|
|
|
Warrant liability |
|
|
- |
|
|
|
|
|
Common stock, $0.0001 par value per
share, 1,000,000,000 shares authorized; 37,295,803 shares issued
and outstanding; _____ shares issued and outstanding pro forma as
adjusted |
|
$ |
4 |
|
|
$ |
|
|
Additional paid in capital |
|
|
4,209 |
|
|
|
|
|
Obligation to issue shares |
|
|
- |
|
|
|
|
|
Accumulated deficit |
|
|
(4,944 |
) |
|
|
|
|
Accumulated
other comprehensive income |
|
|
- |
|
|
|
- |
|
Total
stockholders’ equity |
|
|
(732 |
) |
|
|
- |
|
Total
Capitalization |
|
$ |
(26 |
) |
|
$ |
- |
|
The
number of common shares that will be outstanding after this
offering set forth above is based on 37,295,803 common shares
outstanding as of March 31, 2022.
Unless
specifically stated otherwise, all information in this prospectus
assumes:
|
● |
assumes
no exercise by the underwriters of their option to purchase up to
additional shares of our common stock and/or Series A Warrants from
us to cover over-allotments, if any; |
|
● |
assumes
no exercise of the representative’s warrants or Series A Warrants
to be issued upon consummation of this offering at an exercise
price equal to 110% of the initial offering price of the common
stock; |
|
● |
assumes no shares of Series B
Preferred Stock are sold in this offering; |
|
● |
assumes
no
exercise of outstanding warrants to purchase shares of the
Company’s common stock at an exercise price of $[__];
and |
|
● |
excludes
shares of common stock to be reserved for future issuance under our
equity incentive plan, which will be effective upon the completion
of this offering. |
To the extent we sell any Class B Units in this offering, the same
aggregate number of common stock equivalents resulting from this
offering would be convertible under the Series B Preferred Stock
issued as part of the Class B Units.
(1) |
A
$1.00 increase or decrease in the assumed public offering price per
Class A Units would increase or decrease our pro forma as adjusted
cash and cash equivalents, additional paid-in capital, total
shareholders’ equity and total capitalization by approximately $___
million assuming the number of Class A Units offered by us, as set
forth on the cover page of this prospectus, remains the same and
after deducting the underwriting discount and estimated offering
expenses payable by us. |
DILUTION
If
you invest in our shares in this offering, your ownership interest
will be diluted to the extent of the difference between the initial
public offering price per common share of in this offering and the
as adjusted net tangible book value per share immediately after
this offering. We calculate net tangible book value per share by
dividing our net tangible book value, which is tangible assets less
total liabilities less debt discounts, by the number of our
outstanding common shares as of March 31, 2022. Our historical net
tangible book value (deficit) as of March 31, 2022, was
approximately $0.012 million or $0.005 per common share.
After
giving effect to the sale of a _____ Class A Units at an assumed
shares at $ per share (and assuming no sale of Class B Units),
after deducting the underwriting discounts and commissions and
estimated offering costs payable by us, our as adjusted net
tangible book value (deficit) as of December 31, 2021, would have
been approximately $ million, or per common share. This represents
an immediate increase in as adjusted net tangible book value of $
per share to existing shareholders and an immediate dilution of $
per share to investors purchasing our common shares in this
offering at the assumed public offering price.
The
following table illustrates per share dilution as of March 31,
2022:
Assumed public offering price per common
share |
|
|
|
|
|
$ |
- |
|
Net tangible book value (deficit)
per share as of March 31, 2022 |
|
$ |
- |
|
|
|
|
|
Increase in net
tangible book value (deficit) per share attributable to this
offering |
|
$ |
- |
|
|
|
|
|
Net tangible book value (deficit) per
share after this offering |
|
|
|
|
|
$ |
- |
|
Dilution per share to investors
participating in this offering |
|
|
|
|
|
$ |
- |
|
Each
$1.00 increase (decrease) in the assumed public offering price per
Class A Unit would increase (decrease) our as adjusted net tangible
book value (deficit) after this offering by approximately $___
million, or approximately $____ per share, and the dilution per
share to new investors by approximately $____ per share, assuming
that the number of shares offered by us, as set forth on the cover
page of this prospectus, remain the same and after deducting the
estimated underwriting discounts and commissions and estimated
offering expenses payable by us. We may also increase or decrease
the number of Class A Units we are offering. An increase of 500,000
Class A Units in the number of Class A Units offered by us would
increase our as adjusted net tangible book value (deficit) after
this offering by approximately $____, or $____ per common share,
and decrease the dilution per share to new investors by $____ per
common share, assuming that the assumed initial public offering
price remains the same, and after deducting the estimated
underwriting discounts and commissions and estimated offering
expenses payable by us. Similarly, a decrease of 500,000 Class A
Units offered by us would decrease our as adjusted net tangible
book value (deficit) after this offering by approximately $___
million, or $____ per common share, and increase the dilution per
share to new investors by $____ per common share, assuming that the
assumed initial public offering price remains the same, and after
deducting the estimated underwriting discounts and commissions and
estimated offering expenses payable by us. The information
discussed above is illustrative only and will adjust based on the
actual initial public offering price and other terms of this
offering determined at pricing. This table does not take into
account further dilution to new investors that could occur upon the
exercise of outstanding options and warrants having a per share
exercise price less than the public offering price per share in
this offering.
If
the underwriters exercise in full their option to purchase up to
____ additional shares of common stock and Series A Warrants at the
assumed initial public offering price of $____ per share, the as
adjusted net tangible book value (deficit) after this offering
would be $____ per share, representing an increase in net tangible
book value (deficit) of $____ per share to existing shareholders
and immediate dilution in net tangible book value (deficit) of
$____ per share to investors purchasing our common shares in this
offering at the assumed public offering price.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FISCAL CONDITION AND
RESULTS OF OPERATION
The
following discussion of our plan of operation should be read in
conjunction with the financial statements and related notes that
appear elsewhere in this prospectus. This discussion contains
forward-looking statements that involve risks and uncertainties.
Our actual results could differ materially from those anticipated
in these forward-looking statements as a result of various factors,
including those discussed in “Risk Factors” beginning on page 5 of
this prospectus. All forward-looking statements speak only as of
the date on which they are made. We undertake no obligation to
update such statements to reflect events that occur or
circumstances that exist after the date on which they are
made.
We
are an emerging growth company as defined in Section 2(a) (19) of
the Securities Act. Pursuant to Section 107 of the Jumpstart Our
Business Startups Act, we may 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, meaning
that we can delay the adoption of certain accounting standards
until those standards would otherwise apply to private companies.
We have chosen to take advantage of the extended transition period
for complying with new or revised accounting standards applicable
to public companies to delay adoption of such standards until such
standards are made applicable to private companies. Accordingly,
our consolidated financial statements may not be comparable to the
financial statements of public companies that comply with such new
or revised accounting standards.
Our
Company
Sigyn
Therapeutics, Inc. (“Sigyn” or the “Company”) is a medical
technology company headquartered in San Diego, California. Our
focus is the treatment of pathogen-associated conditions that
precipitate sepsis, the leading cause of hospital deaths
worldwide1. Sigyn Therapy™ is a multi-function blood
purification technology that extracts pathogen sources of
life-threatening inflammation in concert with the broad-spectrum
elimination of inflammatory mediators from human blood
plasma.
Beyond
the treatment of sepsis, Sigyn Therapy establishes a novel strategy
to address emerging pandemic threats, hepatic encephalopathy,
bridge-to-liver transplant, and community acquired pneumonia, which
is a leading cause of death among infectious diseases2,
the leading cause of death in children under five years of
age2, and a catalyst for approximately 50% of sepsis and
septic shock cases2.
1Global, regional and national sepsis incidence and mortality
The Journal Lancet, January 2020
2The American Thoracic Society – Pneumonia Facts
2019
Financing Transactions
Preferred
Stock
The
Company has 10,000,000 shares of par value $0.0001 preferred stock
authorized, of which no preferred shares are issued and outstanding
at May 5, 2022.
Common
Stock
The
Company has authorized 1,000,000,000 shares of par value $0.0001
common stock, of which 37,238,656 shares are
outstanding at May 5, 2022.
On
October 28, 2021, an investor elected to convert $16,714 of the
aggregate principal amount of the Note of $199,650, into 42,857
common shares.
On
October 25, 2021, an investor elected to convert the aggregate
principal amount of the Note, $110,000, into 157,143 common
shares.
On
October 20, 2021, the Company entered into a securities purchase
agreement with an accredited investor that resulted in the issuance
of 320,000 shares of common stock and warrants to purchase an
aggregate of 320,000 shares of the Company’s common stock for total
proceeds totaling $400,000. The offering allowed for qualified
investors to purchase one share of the Company’s common stock at
$1.25. For each share purchased, the investor received a five-year
warrant to purchase one share of common stock at $1.25 per share.
No commissions were paid in the offering. This issuance was
pursuant to Section 4(a)(2) of the Securities Act of 1933, as
amended, in a transaction exempt from registration.
On
October 14, 2021, the Company issued a total of 47,000 shares of
its common stock valued at $37,600 (based on the stock price of the
Company’s common stock on the date of issuance) to a third party,
for communications to the financial industry.
On
July 14, 2021, the Company issued a total of 47,000 shares of its
common stock valued at $47,000 (based on the stock price of the
Company’s common stock on the date of issuance) to a third party,
for communications to the financial industry.
On
May 10, 2021, Brio Capital elected to convert the aggregate
principal amount of a $110,000 convertible note issued on February
10, 2021 into 157,143 shares of the Company’s common
stock.
In
April 2021, the Company initiated an offering of up to $1.5 million
of the Company’s restricted common shares. The offering allowed for
qualified investors to purchase one share of the Company’s common
stock $1.25. For each share purchased, the investor received a
five-year warrant to purchase one share of common stock at $1.75
per share. On May 10, 2021, the Company closed the offering to
investors and subsequently disclosed that it had entered into
securities purchase agreements with accredited investors that
resulted in the issuance of 1,172,000 shares of common stock and
warrants to purchase an aggregate of 1,172,000 shares of the
Company’s common stock for total proceeds totalling $1,465,000. No
commissions were paid in the offering. This issuance was pursuant
to Section 4(a)(2) of the Securities Act of 1933, as amended, in a
transaction exempt from registration.
On
April 14, 2021, the Company issued a total of 47,000 shares of its
restricted common stock valued at $82,250 (based on the stock price
of the Company’s common stock on the date of issuance) to a third
party, for communications to the financial industry. This issuance
was pursuant to Section 4(a)(2) of the Securities Act of 1933, as
amended, in a transaction exempt from registration.
On
February 19, 2021, a previous noteholder exercised the warrants
pursuant to the cashless exercise provision of the warrant
agreement into 57,147 common shares. The common shares have not
been issued as of March 14, 2022.
On
January 14, 2021, the Company issued a total of 47,000 shares of
its restricted common stock valued at $82,250 (based on the stock
price of the Company’s common stock on the date of issuance) to a
third party, for communications to the financial industry. This
issuance was pursuant to Section 4(a)(2) of the Securities Act of
1933, as amended, in a transaction exempt from
registration.
During
the year ended December 31, 2020, the Company issued 1,015,344
common shares to third parties in conjunction with the exchange of
convertible promissory debentures.
On
October 19, 2020, the Company issued 33,686,169 common shares in
conjunction with acquisition.
Warrants
On
October 22, 2021, the Company and Osher amended convertible debt
agreements for the maturity date from October 20, 2021 to October
20, 2022. In exchange for the extension of the Note, the Company
issued Osher 450,000 warrants to purchase an aggregate of 450,000
shares of the Company’s common stock, valued at $197,501 (based on
the Black Scholes valuation model on the date of grant) (see Note
6). The warrants are exercisable for a period of five years at
$1.00 per share in whole or in part, as either a cash exercise or
as a cashless exercise, and fully vest at grant date. The Company
is amortizing the value of the warrants ratably through October 20,
2022. The Company recorded $40,041 and $0 for the years ended
December 31, 2021 and 2020, respectively, and is classified in
other expenses in the consolidated Statements of
Operations.
Current
Noteholders
Osher – $457,380
On
January 28, 2020 (the “Original Issue Date”), the Company entered
into a Securities Purchase Agreement (the “Purchase Agreement”)
with respect to the sale and issuance to institutional investor
Osher Capital Partners LLC (“Osher”) of (i) $385,000 aggregate
principal amount of Original Issue Discount Senior Convertible
Debenture due January 26, 2021, based on $1.00 for each $0.90909
paid by Osher and (ii) five-year Common Stock Purchase Warrants to
purchase up to an aggregate of 80,209 shares of the Company’s
Common Stock at an exercise price of $7.00 per share. The aggregate
cash subscription amount received by the Company from Osher for the
issuance of the note and warrants was $350,005 which was issued at
a $34,995 original issue discount from the face value of the Note.
The conversion price for the principal in connection with voluntary
conversions by a holder of the convertible notes is $0.094 per
share, as amended on October 20, 2020, subject to adjustment as
provided therein, such as stock splits and stock
dividends.
The
Company and Osher amended the convertible debt agreement as
follow-on October 20, 2020:
|
● |
The
parties amended the Warrants dated January 28, 2020, for the number
of warrant shares from 80,209 warrant shares to 4,113,083 warrant
shares at an exercise price of $0.14 per share. |
|
● |
The
parties amended the Note for the maturity date from June 23,2021 to
October 20, 2021. |
On
October 22, 2021, the Company and Osher amended convertible debt
agreements as follows:
|
● |
The
parties amended the October 20,2020 Notes for the maturity date
from October 20, 2021 to October 20, 2022. |
|
● |
The
parties amended the October 20,2020 Notes for the aggregate
principal amount and accrued interest from $652,300 to $717,530
which is issued at a $65,230 original issue discount from the face
value of the October 20, 2020 Notes now due October 20,
2022. |
|
● |
In
exchange for the extension of the Note, the Company issued Osher
five-year warrants to purchase an aggregate of 450,000 shares of
the Company’s common stock at an exercise price of $1.00 per
share. |
Osher – $60,500
On
June 23, 2020 (the “Original Issue Date”), the Company entered into
a Securities Purchase Agreement (the “Purchase Agreement”) with
respect to the sale and issuance to institutional investor Osher
Capital Partners LLC (“Osher”) of (i) $50,000 aggregate principal
amount of Original Issue Discount Senior Convertible Debenture (the
“Note”) due June 23, 2021, based on $1.00 for each $0.90909 paid by
Osher and (ii) five-year Common Stock Purchase Warrants
(“Warrants”) to purchase up to an aggregate of 10,000 shares of the
Company’s Common Stock at an exercise price of $30.00 per share.
The aggregate cash subscription amount received by the Company from
Osher for the issuance of the Note and Warrants was $50,005 which
was issued at a $0 original issue discount from the face value of
the Note. The conversion price for the principal in connection with
voluntary conversions by a holder of the convertible notes is $0.39
per share, as amended on October 20, 2020, subject to adjustment as
provided therein, such as stock splits and stock
dividends.
The
Company and Osher amended the convertible debt agreement as
follow-on October 20, 2020:
|
● |
The
parties amended the Note for the aggregate principal amount from
$50,000 to $55,000. The aggregate cash subscription amount received
by the Company from Osher for the issuance of the Note and Warrants
was $50,005 which was issued at an amended $4,995 original issue
discount from the face value of the Note. |
|
● |
The
parties amended the Warrants dated June 23, 2020, for the number of
warrant shares from 10,000 warrant shares to 141,020 warrant shares
at an exercise price of $0.59 per share. |
|
● |
The
parties amended the Note for the maturity date from June 23, 2021
to October 20, 2021. |
On
October 22, 2021, the Company and Osher amended convertible debt
agreements as follows:
|
● |
The
parties amended the October 20, 2020 Notes for the maturity date
from October 20, 2021 to October 20, 2022. |
|
● |
The
parties amended the October 20, 2020 Notes for the aggregate
principal amount and accrued interest from $652,300 to $717,530
which is issued at a $65,230 original issue discount from the face
value of the October 20, 2020 Notes now due October 20,
2022. |
|
● |
In
exchange for the extension of the Note, the Company issued Osher
five-year warrants to purchase an aggregate of 450,000 shares of
the Company’s common stock at an exercise price of $1.00 per
share. |
Osher – $199,650
On
September 17, 2020 (the “Original Issue Date”), the Company entered
into a Securities Purchase Agreement (the “Purchase Agreement”)
with respect to the sale and issuance to institutional investor
Osher Capital Partners LLC (“Osher”) of (i) $181,500 aggregate
principal amount of Original Issue Discount Senior Convertible
Debenture (the “Note”) due September 30, 2021, based on $1.00 for
each $0.90909 paid by Osher and (ii) five-year Common Stock
Purchase Warrants (“Warrants’) to purchase up to an aggregate of
8,250 shares of the Company’s Common Stock at an exercise price of
$30.00 per share. The aggregate cash subscription amount received
by the Company from Osher for the issuance of the Note and Warrants
was $165,000 which was issued at a $16,500 original issue discount
from the face value of the Note. The conversion price for the
principal in connection with voluntary conversions by a holder of
the convertible notes is $0.39 per share, as amended on October 20,
2020, subject to adjustment as provided therein, such as stock
splits and stock dividends.
The
Company and Osher amended the convertible debt agreement as
follow-on October 20, 2020:
|
● |
The
parties amended the Warrants dated September 17, 2020, for the
number of warrant shares from 8,250 warrant shares to 465,366
warrant shares at an exercise price of $0.59 per share. |
|
● |
The
parties amended the Note for the maturity date from September 30,
2021 to October 20, 2021. |
On
October 22, 2021, the Company and Osher amended convertible debt
agreements as follows:
|
● |
The
parties amended the October 20, 2020 Notes for the maturity date
from October 20, 2021 to October 20, 2022. |
|
● |
The
parties amended the October 20, 2020 Notes for the aggregate
principal amount and accrued interest from $652,300 to $717,530
which is issued at a $65,230 original issue discount from the face
value of the October 20, 2020 Notes now due October 20,
2022. |
|
● |
In
exchange for the extension of the Note, the Company issued Osher
five-year warrants to purchase an aggregate of 450,000 shares of
the Company’s common stock at an exercise price of $1.00 per
share. |
On
October 28, 2021, Osher elected to convert $16,714 of the aggregate
principal amount of the Note of $199,650, into 42,857 common
shares.
Osher – $110,000
On
March 23, 2022, the Company entered into an Original Issue Discount
Senior Convertible Debenture (the “Note”) with respect to the sale
and issuance to institutional investor Osher Capital Partners LLC
(“Osher”) of (i) $110,000 aggregate principal amount of Note due
March 23, 2023 based on $1.00 for each $0.90909 paid by the
previous noteholder and (ii) five-year Common Stock Purchase
Warrants (“Warrants’) to purchase up to an aggregate of 220,000
shares of the Company’s Common Stock at an exercise price of $0.50
per share. The aggregate cash subscription amount received by the
Company from the previous noteholder for the issuance of the Note
and Warrants was $100,000 which was issued at a $10,000 original
issue discount from the face value of the Note. The conversion
price for the principal in connection with voluntary conversions by
a holder of the convertible notes is $0.50 per share, subject to
adjustment as provided therein, such as stock splits and stock
dividends.
Brio – $110,000
On
March 23, 2022, the Company entered into an Original Issue Discount
Senior Convertible Debenture (the “Note”) with respect to the sale
and issuance to institutional investor Brio Capital Master Fund
Ltd. (“Brio”) of (i) $110,000 aggregate principal amount of Note
due March 23, 2023 based on $1.00 for each $0.90909 paid by the
previous noteholder and (ii) five-year Common Stock Purchase
Warrants (“Warrants’) to purchase up to an aggregate of 220,000
shares of the Company’s Common Stock at an exercise price of $0.50
per share. The aggregate cash subscription amount received by the
Company from the previous noteholder for the issuance of the Note
and Warrants was $100,000 which was issued at a $10,000 original
issue discount from the face value of the Note. The conversion
price for the principal in connection with voluntary conversions by
a holder of the convertible notes is $0.50 per share, subject to
adjustment as provided therein, such as stock splits and stock
dividends.
Osher – $110,000
On
April 28, 2022, the Company entered into an Original Issue Discount
Senior Convertible Debentures (the “Note”) totaling (i) $220,000
aggregate principal amount of Note due April 28, 2023 based on
$1.00 for each $0.90909 paid by the previous noteholder and (ii)
five-year Common Stock Purchase Warrants (“Warrants’) to purchase
up to an aggregate of 440,000 shares of the Company’s Common Stock
at an exercise price of $0.50 per share. The conversion price for
the principal in connection with voluntary conversions by the
holders of the convertible notes is $0.50 per share.
Brio - $110,000
On
May 10, 2022, the Company entered into an Original Issue Discount
Senior Convertible Debenture (the “May 2022 Note”) totaling (i)
$110,000 aggregate principal amount of Note due May 10, 2023 based
on $1.00 for each $0.90909 paid by the previous noteholder and (ii)
five-year Common Stock Purchase Warrants (“Warrants’) to purchase
up to an aggregate of 220,000 shares of the Company’s Common Stock
at an exercise price of $0.50 per share. The conversion price for
the principal in connection with voluntary conversions by the
holders of the convertible notes is $0.50 per share.
Impairment
of Inventory
Based
on the significant advancement of Sigyn Therapy, the Company
decided in the 4th quarter of 2021 to assess the value
of retail business operations that were a focus of the Company
prior to the merger transaction consummated on October 19,
2020.
Related
to this assessment, management determined the wholesale liquidation
value of its sapphire gem inventory to be 5-10% of the previously
reported retail value, based on communications with certified
gemologists, the variance between retail and wholesale valuations,
and current market conditions. As a result, the Company has valued
the inventory at $50,000 and recorded an impairment of assets of
$536,047 in the year ended December 31, 2021 and is classified in
other expenses in the consolidated Statements of
Operations.
Limited
Operating History; Need for Additional Capital
There
is limited historical financial information about us on which to
base an evaluation of our performance. We cannot guarantee we will
be successful in our business operations. Our business is subject
to risks inherent in the establishment of a new business
enterprise, including limited capital resources, and possible cost
overruns due to increases in the cost of services. To become
profitable and competitive, we must receive additional capital. We
have no assurance that future financing will materialize. If that
financing is not available, we may be unable to continue
operations.
Results
of Operations - Year Ended December 31, 2021 Compared to Year
Ended December 31, 2020
The
following discussion represents a comparison of our results of
operations for the years ended December 31, 2021 and 2020. The
results of operations for the periods shown in our audited
consolidated financial statements are not necessarily indicative of
operating results for the entire period. In the opinion of
management, the audited consolidated financial statements recognize
all adjustments of a normal recurring nature considered necessary
to fairly state our financial position, results of operations and
cash flows for the periods presented.
|
|
Year Ended
December 31, 2021 |
|
|
Year Ended
December 31, 2020 |
|
|
|
|
|
|
|
|
Net revenues |
|
$ |
- |
|
|
$ |
-
|
|
Cost of sales |
|
|
- |
|
|
|
- |
|
Gross Profit |
|
|
- |
|
|
|
- |
|
Operating expenses |
|
|
2,008,217 |
|
|
|
916,434 |
|
Other
expense |
|
|
996,402 |
|
|
|
343,156 |
|
Net
loss before income taxes |
|
$ |
(3,004,619 |
) |
|
$ |
(1,259,590 |
) |
Net
Revenues
For
the years ended December 31, 2021 and 2020, we had no
revenues.
Cost
of Sales
For
the years ended December 31, 2021 and 2020, we had no cost of
sales.
Operating
expenses
Operating
expenses increased by $1,091,783, or 119.1%, to $2,008,217 for the
year ended December 31, 2021 from $916,434 for the year ended
December 31, 2020 primarily due to increases in professional fees
of $36,211, compensation costs of $259,154, consulting costs of
$112,919, research and development costs of $314,652, depreciation
and amortization costs of $7,851, investor relations costs of
$306,487, rent expenses of $45,154, and general and administration
costs of $9,355, as a result of adding administrative
infrastructure for our anticipated business development.
For
the year ended December 31, 2021, we had research and development
costs of $734,014, and general and administrative expenses of
$1,274,203 primarily due to professional fees of $123,293,
compensation costs of $451,734, consulting costs of $286,194, rent
of $46,663, depreciation and amortization costs of $19,151,
investor relations costs of $329,006, and general and
administration costs of $18,162, as a result of adding
administrative infrastructure for our anticipated business
development.
For
the year ended December 31, 2020, we had marketing expenses of
$705, research and development costs of $419,362, and general and
administrative expenses of $496,367 primarily due to professional
fees of $260,356, compensation costs of $192,580, rent of $1,509,
depreciation and amortization costs of $11,300, investor relations
costs of $22,519, and general and administration costs of $8,103,
as a result of adding administrative infrastructure for our
anticipated business development.
Other
Expense
Other
expense for the year ended December 31, 2021 totaled $996,402
primarily due to impairment of assets of $536,047, interest expense
of $429,488 in conjunction with accretion of debt discount and
original issuance discount, and interest expense of $30,867,
compared to other expense of $343,156 primarily due to interest
expense of $343,156 in conjunction with accretion of debt discount
and original issuance discount for the year ended December 31,
2020.
Net
loss before income taxes
Net
loss before income taxes for the year ended December 31, 2021
totaled $3,004,619 primarily due to (increases/decreases) in
compensation costs, professional fees, consulting costs, research
and development costs, investor relations costs, and general and
administration costs compared to a loss of $1,259,590 primarily due
to (increases/decreases) in compensation costs, professional fees,
marketing costs, research and development costs, investor relations
costs, and general and administration costs for the year ended
December 31, 2020 primarily due to professional fees.
Assets
and Liabilities
Assets
were $710,259 as of December 31, 2021. Assets consisted primarily
of cash of $340,956, inventories of $50,000, equipment of $28,046,
intangible assets of $5,700, and operating lease right-of-use
assets of $262,771. Liabilities were $974,843 as of December 31,
2021. Liabilities consisted primarily accounts payable of $39,674,
accrued payroll and payroll taxes of $1,072, convertible notes of
$647,202, net of $53,614 of unamortized debt discount, operating
lease liabilities of $286,716, and other current liabilities of
$179.
Liquidity
and Capital Resources
General – Overall, we had an increase in cash flows for the
year ended December 31, 2021 of $256,554 resulting from cash
provided by financing activities of $2,060,000, offset partially by
cash used in operating activities of $1,774,182 and cash used in
investing activities of $29,264.
The
following is a summary of our cash flows provided by (used in)
operating, investing, and financing activities during the periods
indicated:
|
|
Year Ended
December 31, 2021 |
|
|
Year Ended
December 31, 2020 |
|
|
|
|
|
|
|
|
Net cash provided by (used in): |
|
|
|
|
|
|
|
|
Operating activities |
|
$ |
(1,774,182 |
) |
|
$ |
(829,809 |
) |
Investing
activities |
|
|
(29,264 |
) |
|
|
(10,799 |
) |
Financing activities |
|
|
2,060,000 |
|
|
|
925,010 |
|
|
|
$ |
256,554 |
|
|
$ |
84,402 |
|
Cash Flows from Operating Activities – For the year ended
December 31, 2021, net cash used in operations was $1,774,182
compared to net cash used in operations of $829,809 for the year
ended December 31, 2020. Net cash used in operations was primarily
due to a net loss of $3,004,619 for year ended December 31, 2021
and the changes in operating assets and liabilities of $34,149,
primarily due to the increases in other current assets of $2,075
and other assets of $20,711, and a decrease in accrued payroll and
payroll taxes of $58,635, offset primarily by increases in accounts
payable of $23,669 and other current liabilities of $23,603. In
addition, net cash used in operating activities includes
adjustments to reconcile net profit from depreciation expense of
$2,946, amortization expense of $16,205, accretion of original
issuance costs of $61,283, accretion of debt discount of $368,205,
stock issued for services of $249,100, interest expense converted
to notes payable of $30,800, and impairment of assets of
$536,047.
Net
cash used in operations was primarily due to a net loss of
$1,259,590 for year ended December 31, 2020 and the changes in
operating assets and liabilities of $75,325, primarily due to the
increase in accounts payable of $15,095, accrued payroll and
payroll taxes of $59,707, and other current liabilities of $523. In
addition, net cash used in operating activities includes
adjustments to reconcile net profit from depreciation expense of
$346, amortization expense of $10,954, accretion of original
issuance costs of $67,823, and accretion of debt discount of
$275,333.
Cash Flows from Investing Activities – For the year ended
December 31, 2021, net cash used in investing was $29,264 due to
the purchase of property and equipment compared to cash flows from
investing activities of $10,799 due to the purchase of intangible
assets for the year ended December 31, 2020.
Cash Flows from Financing Activities – For the year ended
December 31, 2021, net cash provided by financing was $2,060,000
due to proceeds from short term convertible notes of $250,000,
repayments of short-term convertible notes of $55,000, and common
stock and warrants issued for cash of $1,865,000. For the year
ended December 31, 2020, net cash provided by financing was
$925,010 due to proceeds from short term convertible
notes.
Financing – We expect that our current working capital
position, together with our expected future cash flows from
operations will be insufficient to fund our operations in the
ordinary course of business, anticipated capital expenditures, debt
payment requirements and other contractual obligations for at least
the next twelve months. However, this belief is based upon many
assumptions and is subject to numerous risks, and there can be no
assurance that we will not require additional funding in the
future.
We
have no present agreements or commitments with respect to any
material acquisitions of other businesses, products, product rights
or technologies or any other material capital expenditures.
However, we will continue to evaluate acquisitions of and/or
investments in products, technologies, capital equipment or
improvements or companies that complement our business and may make
such acquisitions and/or investments in the future. Accordingly, we
may need to obtain additional sources of capital in the future to
finance any such acquisitions and/or investments. We may not be
able to obtain such financing on commercially reasonable terms, if
at all. Due to the ongoing global economic crisis, we believe it
may be difficult to obtain additional financing if needed. Even if
we are able to obtain additional financing, it may contain undue
restrictions on our operations, in the case of debt financing, or
cause substantial dilution for our shareholders, in the case of
equity financing .
Going
Concern
The
accompanying financial statements have been prepared assuming the
Company will continue as a going concern, which contemplates, among
other things, the realization of assets and satisfaction of
liabilities in the normal course of business. The Company had an
accumulated deficit of approximately $4,266,000 at December 31,
2021, had a working capital deficit of approximately $341,000 at
December 31, 2021, had net losses of approximately $3,005,000 and
$1,260,000 for the years ended December 31, 2021 and 2020,
respectively, and net cash used in operating activities of
approximately $1,774,000 and $830,000 for the years ended December
31, 2021 and 2020, respectively, with no revenue earned since
inception, and a lack of operational history. These matters raise
substantial doubt about the Company’s ability to continue as a
going concern.
While
the Company is attempting to expand operations and increase
revenues, the Company’s cash position may not be significant enough
to support the Company’s daily operations. Management intends to
raise additional funds by way of a private offering or an asset
sale transaction. Management believes that the actions presently
being taken to further implement its business plan and generate
revenues provide the opportunity for the Company to continue as a
going concern. While management believes in the viability of its
strategy to generate revenues and in its ability to raise
additional funds or transact an asset sale, there can be no
assurances to that effect or on terms acceptable to the Company.
The ability of the Company to continue as a going concern is
dependent upon the Company’s ability to further implement its
business plan and generate revenues.
The
consolidated financial statements do not include any adjustments
that might be necessary if we are unable to continue as a going
concern.
Critical
Accounting Policies
Refer
to Note 3 in the accompanying notes to the unaudited condensed
consolidated financial statements for critical accounting
policies.
Recent
Accounting Pronouncements
Refer
to Note 3 in the accompanying notes to the unaudited condensed
consolidated financial statements.
Off-Balance
Sheet Arrangements
As of
December 31, 2021, we have not entered into any transaction,
agreement or other contractual arrangement with an entity
unconsolidated under which it has:
|
● |
a
retained or contingent interest in assets transferred to the
unconsolidated entity or similar arrangement that serves as
credit; |
|
● |
liquidity
or market risk support to such entity for such assets; |
|
● |
an
obligation, including a contingent obligation, under a contract
that would be accounted for as a derivative instrument;
or |
|
● |
an
obligation, including a contingent obligation, arising out of a
variable interest in an unconsolidated entity that is held by, and
material to us, where such entity provides financing, liquidity,
market risk or credit risk support to or engages in leasing,
hedging, or research and development services with us.
|
Results
of Operations - Three Months Ended March 31, 2022 Compared to
Three Months Ended March 31, 2021
The
following discussion represents a comparison of our results of
operations for the three months ended March 31, 2022 and 2021. The
results of operations for the periods shown in our audited
condensed consolidated financial statements are not necessarily
indicative of operating results for the entire period. In the
opinion of management, the audited condensed consolidated financial
statements recognize all adjustments of a normal recurring nature
considered necessary to fairly state our financial position,
results of operations and cash flows for the periods
presented.
|
|
Three Months Ended
March 31,
|
|
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
|
|
Net revenues |
|
$ |
- |
|
|
$ |
- |
|
Cost of sales |
|
|
- |
|
|
|
- |
|
Gross Profit |
|
|
- |
|
|
|
- |
|
Operating expenses |
|
|
609,236 |
|
|
|
402,096 |
|
Other expense |
|
|
68,810 |
|
|
|
59,586 |
|
Net loss before
income taxes and discontinued operations |
|
$ |
(678,046 |
) |
|
$ |
(461,682 |
) |
Net
Revenues
For
the three months ended March 31, 2022 and 2021, we had no
revenues.
Cost
of Sales
For
the three months ended March 31, 2022 and 2021, we had no cost of
sales.
Operating
expenses
Operating
expenses increased by $207,140, or 51.5%, to $609,236 for three
months ended March 31, 2022 from $402,096 for the three months
ended March 31, 2021 primarily due to increases in professional
fees of $35,610, compensation costs of $40,209, research and
development costs of $111,826, depreciation costs of $1,360, rent
expenses of $17,469, consulting fees of $76,642, and general and
administration costs of $41,874, offset primarily by a decrease in
investor relations costs of $26,395, marketing costs of $82,000,
and amortization costs of $9,454, as a result of adding
administrative infrastructure for our anticipated business
development.
For
the three months ended March 31, 2022, we had marketing expenses of
$250, research and development costs of $228,342, and general and
administrative expenses of $380,644 primarily due to professional
fees of $53,494, compensation costs of $144,894, rent of $17,919,
depreciation costs of $1,704, amortization costs of $900, investor
relations costs of $10,105, consulting fees of $107,252, and
general and administration costs of $44,377, as a result of adding
administrative infrastructure for our anticipated business
development.
For
the three months ended March 31, 2021, we had marketing expenses of
$82,250, research and development costs of $116,516, and general
and administrative expenses of $203,330 primarily due to
professional fees of $17,884, compensation costs of $104,685, rent
of $450, depreciation and amortization costs of $10,698, investor
relations costs of $36,500, consulting fees of $30,610, and general
and administration costs of $2,503, as a result of adding
administrative infrastructure for our anticipated business
development.
Other
Expense
Other
expense for the three months ended March 31, 2022 totaled $68,810
primarily due to interest expense of $52,257 in conjunction with
accretion of debt discount and interest expense of $16,522 in
conjunction with accretion of original issuance discount, compared
to other expense of $59,586 for the three months ended March 31,
2021 primarily due to interest expense of $50,860 in conjunction
with accretion of debt discount and interest expense of $8,726 in
conjunction with accretion of original issuance
discount.
Net
loss before income taxes
Net
loss before income taxes and discontinued operations for the three
months ended March 31, 2022 totaled $678,046 primarily due to
(increases/decreases) in compensation costs, professional fees,
marketing costs, investor relations costs, consulting fees, and
general and administration costs compared to a loss of $461,682 for
the three months ended March 31, 2021 primarily due to
(increases/decreases) in compensation costs, professional fees,
marketing costs, investor relations, consulting fees, and general
and administration costs.
Assets
and Liabilities
Assets
were $447,414 as of March 31, 2022. Assets consisted primarily of
cash of $81,385, inventories of $50,000, other current assets of
$12,245, equipment of $26,342, intangible assets of $4,800,
operating lease right-of-use assets of $251,931, and other assets
of $20,711. Liabilities were $1,178,983 as of March 31, 2022.
Liabilities consisted primarily accounts payable of $196,147,
convertible notes of $704,920, net of $215,896 of unamortized debt
discount and debt issuance costs, operating lease liabilities of
$275,929, and other current liabilities of $1,987.
Liquidity
and Capital Resources
Going
Concern
The
accompanying financial statements have been prepared assuming the
Company will continue as a going concern, which contemplates, among
other things, the realization of assets and satisfaction of
liabilities in the normal course of business. The Company had an
accumulated deficit of $4,943,805 at March 31, 2022, had a working
capital deficit of $807,218 and $341,187 at March 31, 2022 and
December 31, 2020, respectively, had a net loss of $678,046 and
$461,682 for the three months ended March 31, 2022 and 2021,
respectively, and net cash used in operating activities of $459,571
and $274,424 for the three months ended March 31, 2022 and 2021,
respectively, with no revenue earned since inception, and a lack of
operational history. These matters raise substantial doubt about
the Company’s ability to continue as a going concern.
While
the Company is attempting to expand operations and increase
revenues, the Company’s cash position may not be significant enough
to support the Company’s daily operations. Management intends to
raise additional funds by way of a private offering or an asset
sale transaction. Management believes that the actions presently
being taken to further implement its business plan and generate
revenues provide the opportunity for the Company to continue as a
going concern. While management believes in the viability of its
strategy to generate revenues and in its ability to raise
additional funds or transact an asset sale, there can be no
assurances to that effect or on terms acceptable to the Company.
The ability of the Company to continue as a going concern is
dependent upon the Company’s ability to further implement its
business plan and generate revenues.
The
condensed consolidated financial statements do not include any
adjustments that might be necessary if we are unable to continue as
a going concern.
General – Overall, we had a decrease in cash flows for the
three months ended March 31, 2022 of $259,571 resulting from cash
used in operating activities of $459,571, offset partially by cash
provided by financing activities of $200,000.
The
following is a summary of our cash flows provided by (used in)
operating, investing, and financing activities during the periods
indicated:
|
|
Three Months
Ended March 31, |
|
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
|
|
Net cash provided by (used in): |
|
|
|
|
|
|
|
|
Operating activities |
|
$ |
(459,571 |
) |
|
$ |
(274,424 |
) |
Investing
activities |
|
|
- |
|
|
|
(2,871 |
) |
Financing activities |
|
|
200,000 |
|
|
|
200,000 |
|
|
|
$ |
(259,571 |
) |
|
$ |
(77,295 |
) |
Cash Flows from Operating Activities – For the three months
ended March 31, 2022, net cash used in operations was $459,571
compared to net cash used in operations of $274,424 for the three
months ended March 31, 2021. Net cash used in operations was
primarily due to a net loss of $678,046 for three months ended
March 31, 2022 and the changes in operating assets and liabilities
of $147,092, primarily due to the increase in accounts payable of
$156,473, other current liabilities of $789, and other current
assets of $10,170. In addition, net cash used in operating
activities includes adjustments to reconcile net profit from
depreciation expense of $1,704, amortization expense of $900,
accretion of original issuance costs of $16,522, and accretion of
debt discount of $52,257.
For
the three months ended March 31, 2021, net cash used in operations
was $274,424. Net cash used in operations was primarily due to a
net loss of $461,682 for three months ended March 31, 2021 and the
changes in operating assets and liabilities of $34,724, primarily
due to the increase in accounts payable of $28,055, accrued payroll
and payroll taxes of $5,007, and other current liabilities of
$1,662. In addition, net cash used in operating activities includes
adjustments to reconcile net profit from depreciation expense of
$344, amortization expense of $10,354, stock issued for services of
$82,250, accretion of original issuance costs of $8,726, and
accretion of debt discount of $50,860.
Cash Flows from Investing Activities – For the three months
ended March 31, 2022, net cash used in investing was none compared
to cash flows from investing activities of $2,871 for the three
months ended March 31, 2020 due to the purchase of property and
equipment.
Cash Flows from Financing Activities – For the three months
ended March 31, 2022 and 2021, net cash provided by financing was
$200,000 and $200,000, respectively, due to proceeds from short
term convertible notes.
Financing – We expect that our current working capital
position, together with our expected future cash flows from
operations will be insufficient to fund our operations in the
ordinary course of business, anticipated capital expenditures, debt
payment requirements and other contractual obligations for at least
the next twelve months. However, this belief is based upon many
assumptions and is subject to numerous risks, and there can be no
assurance that we will not require additional funding in the
future.
We
have no present agreements or commitments with respect to any
material acquisitions of other businesses, products, product rights
or technologies or any other material capital expenditures.
However, we will continue to evaluate acquisitions of and/or
investments in products, technologies, capital equipment or
improvements or companies that complement our business and may make
such acquisitions and/or investments in the future. Accordingly, we
may need to obtain additional sources of capital in the future to
finance any such acquisitions and/or investments. We may not be
able to obtain such financing on commercially reasonable terms, if
at all. Due to the ongoing global economic crisis, we believe it
may be difficult to obtain additional financing if needed. Even if
we are able to obtain additional financing, it may contain undue
restrictions on our operations, in the case of debt financing, or
cause substantial dilution for our stockholders, in the case of
equity financing.
Capital
Expenditures
We
expect to purchase approximately $30,000 of equipment in connection
with the expansion of our business during the next twelve
months.
Fiscal
year end
Our
fiscal year end is December 31.
Critical
Accounting Policies
Refer
to Note 3 in the accompanying notes to the unaudited condensed
consolidated financial statements for critical accounting
policies.
Recent
Accounting Pronouncements
Refer
to Note 3 in the accompanying notes to the condensed consolidated
financial statements.
Off-Balance
Sheet Arrangements
As of
March 31, 2022, we have not entered into any transaction, agreement
or other contractual arrangement with an entity unconsolidated
under which it has:
|
● |
a
retained or contingent interest in assets transferred to the
unconsolidated entity or similar arrangement that serves as
credit; |
|
|
|
|
● |
liquidity
or market risk support to such entity for such assets; |
|
|
|
|
● |
an
obligation, including a contingent obligation, under a contract
that would be accounted for as a derivative instrument;
or |
|
|
|
|
● |
an
obligation, including a contingent obligation, arising out of a
variable interest in an unconsolidated entity that is held by, and
material to us, where such entity provides financing, liquidity,
market risk or credit risk support to or engages in leasing,
hedging, or research and development services with us. |
Inflation
We do
not believe that inflation has had a material effect on our results
of operations.
DESCRIPTION OF BUSINESS
Sigyn
Therapeutics, Inc. (“Sigyn” or the “Company”) is a
development-stage therapeutic technology company headquartered in
San Diego, California USA. Our business focus is the clinical
advancement of Sigyn Therapy, a multi-function blood purification
technology designed to overcome the limitations of previous drugs
and devices to treat life-threatening inflammatory disorders,
including sepsis, the leading cause of hospital deaths
worldwide.
About Sigyn Therapy
We
are advancing Sigyn Therapy to treat pathogen-associated conditions
that precipitate sepsis and other high-mortality disorders that are
not addressed with approved drug therapies. To address these unmet
therapeutic needs, we designed Sigyn Therapy to extract pathogen
sources of life-threating inflammation from the bloodstream in
concert with the depletion of pro-inflammatory cytokines, whose
dysregulated production (the cytokine storm) plays a prominent role
in each of our therapeutic indication opportunities.
In
addition to sepsis, our candidate treatment indications include,
but are not limited to; emerging pandemic threats, drug resistant
pathogens, hepatic encephalopathy, bridge to liver transplant, and
community-acquired pneumonia (“CAP”), which is a leading cause of
death among infectious diseases, the leading cause of death in
children under five years of age, and a catalyst for approximately
50% of sepsis and septic shock cases.
Merger Transaction
On
October 19, 2020, Reign Resources Corporation, completed a Share
Exchange Agreement (the “Agreement”) with Sigyn Therapeutics, Inc.,
a private entity incorporated in the State of Delaware on October
19, 2019. Pursuant to the Share Exchange Agreement, we acquired
100% of the issued and outstanding shares of privately held Sigyn
Therapeutics common stock in exchange for 75% of the fully paid and
nonassessable shares of our common stock outstanding (the
“Acquisition”). In conjunction with the transaction, we changed our
name from Reign Resources Corporation to Sigyn Therapeutics, Inc.
pursuant to an amendment to our articles of incorporation that was
filed with the State of Delaware. Subsequently, our trading symbol
was changed to SIGY. The Acquisition was treated as a “tax-free
exchange” under Section 368 of the Internal Revenue Code of 1986
and resulted in the private Sigyn Therapeutics corporate entity
becoming a wholly owned subsidiary known as Sigyn Medical
Corporation. Upon the closing of the Acquisition, we appointed
James A. Joyce and Craig P. Roberts to serve as members of our
Board of Directors.
As of
May 5, 2022, we have a total 37,238,656 shares issued and
outstanding, of which 11,655,803 shares are held by non-affiliate
shareholders.
Post-Merger
Developments
Since
the consummation of our public merger on October 19, 2020, we have
advanced Sigyn Therapy from conceptual design to clinical
application. We initiated and completed a series of in vitro
blood plasma studies that validated the ability of Sigyn Therapy to
address a broad-spectrum of relevant therapeutic targets, including
endotoxin (gram-negative bacterial toxin); peptidoglycan and
lipoteichoic acid (gram-positive bacterial toxins); viral pathogens
(including SARS-CoV-2); hepatic toxins (ammonia, bile acid, and
bilirubin); CytoVesicles (extracellular vesicles that transport
inflammatory cytokine cargos); and tumor necrosis factor alpha (TNF
alpha), interleukin-1 beta (IL-1b), and interleukin 6 (IL-6), which
are pro-inflammatory cytokines whose dysregulated production (the
cytokine storm) precipitate sepsis and play a prominent role in
each of our therapeutic opportunities.
Subsequent
to these milestone achievements, we announced the completion of
in vivo animal studies on February 23, 2022, that
demonstrated Sigyn Therapy to be safe and well
tolerated.
In
the studies, Sigyn Therapy was administered via standard dialysis
machines utilizing conventional blood-tubing sets, for periods of
up to six hours in eight (8) porcine (pig) subjects, each weighing
approximately 40-45 kilograms. The studies were comprised of a
pilot phase (two subjects), which evaluated the feasibility of the
study protocol in the first-in-mammal use of Sigyn Therapy; and an
expansion phase (six subjects) to further assess treatment safety
and refine pre-treatment set-up and operating procedures. Sigyn
Therapy was well tolerated by all eight animal subjects and no
serious adverse events were reported in any treated animal subject.
Important criteria for treatment safety – including hemodynamic
parameters, serum chemistries and hematologic measurements – were
stable across all subjects.
The
studies were conducted by a clinical team at Innovative
BioTherapies, Inc. (“IBT”), under a contract with the University of
Michigan to utilize animal care, associated institutional review
oversight, as well as surgical suite facilities located within the
North Campus Research Complex. IBT is uniquely experienced in
providing development services that support the clinical
advancement of extracorporeal devices. The treatment protocol of
the study was reviewed and approved by the University of Michigan
Institutional Animal Care and Use Committee (IACUC).
We
plan to incorporate the data resulting from our in vivo and
invitro studies into an Investigational Device Exemption (IDE)
that we are drafting for submission to the U.S. Food and Drug
Administration (“FDA”) to support the potential initiation of human
clinical studies.
Sigyn
Therapy Mechanism of Action
To
overcome the limitations of previous drug and device therapies, we
created Sigyn Therapy with a novel multi-function mechanism of
action. Based on the results of studies conducted to date, our
expansive mechanism establishes Sigyn Therapy as an emerging
candidate to treat a wide-range of pathogen-associated conditions
that precipitate sepsis and other life-threatening
disorders.
To
support widespread implementation, we designed Sigyn Therapy to be
a single-use disposable device that is deployable on the global
infrastructure of hemodialysis and continuous renal replacement
therapy (CRRT) machines already located in hospitals and
clinics.
Incorporated
with Sigyn Therapy is a “cocktail” of adsorbent components
formulated to optimize the broad-spectrum extraction of therapeutic
targets from the bloodstream. In the medical field, the term
“cocktail” is a reference to the simultaneous administration of
multiple drugs (a drug cocktail) with differing mechanisms of
actions. While drug cocktails are emerging as potential mechanisms
to treat cancer, they are proven life-saving countermeasures to
treat HIV and Hepatitis-C viral infections. However, dosing of
multi-drug agent cocktails is limited by toxicity and adverse
events that can result from deleterious drug
interactions.
Sigyn
Therapy is not constrained by such limitations as our adsorbent
components are not introduced into the body. As a result, we are
able to incorporate a substantial dose of multiple adsorbents, each
with differing mechanisms and capabilities to optimize Sigyn
Therapy’s ability to address a broad-spectrum of pathogenic and
inflammatory targets that precipitate the cytokine storm that
underlies sepsis and other acute life-threatening
disorders.
The
adsorbent components that we incorporate in Sigyn Therapy provide
more than 200,000 square meters (~50 acres) of surface area on
which to adsorb and remove circulating pathogens, toxins,
inflammatory mediators, and other relevant targets below 200nm in
diameter. Beyond an immense capacity to remove therapeutic targets,
Sigyn Therapy is also highly efficient. Based on blood flow rates
of 350ml/min, a patient’s entire bloodstream can pass through Sigyn
Therapy up to seventeen (17) times during a single four-hour
treatment period.
Overview of Candidate Treatment Indications
Based
on data resulting from in vitro blood purification studies,
our candidate treatment indications include, but are not limited
to; sepsis, community-acquired pneumonia, emerging pandemic
threats, hepatic encephalopathy, bridge to liver transplant, and
drug resistant pathogens. However, there is no assurance that
controlled human studies will demonstrate Sigyn Therapy to be an
efficacious treatment for any of these indications.
Sepsis
Sepsis
is defined as a life-threatening organ dysfunction caused by a
dysregulated host response to infection. In January of 2020, a
report entitled; “Global, Regional, and National Sepsis
Incidence and Mortality, 1990-2017: Analysis for the Global Burden
of Disease Study,” was published in the Journal Lancet. The
publication reported 48.9 million cases of sepsis and 11 million
deaths in 2017. In that same year, an estimated 20.3 million sepsis
cases and 2.9 million deaths were among children younger than
5-years old. The report included a reference that sepsis kills more
people around the world than all forms of cancer combined. In the
United States, sepsis was reported to be the most common cause of
hospital deaths with an annual financial burden that exceeds $24
billion.
To
date, more than 100 human studies have been conducted to evaluate
the safety and efficacy of candidate drugs to treat sepsis. With
one brief exception (Xigris, Eli Lilly), none of these studies
resulted in a market cleared therapy.
As
sepsis remains beyond the reach of single-target drugs, there is an
emerging interest in multi-mechanism therapies that can target both
inflammatory and pathogen associated targets. Sigyn Therapy
addresses a broad-spectrum of pathogen sources and the resulting
dysregulated cytokine production (the cytokine storm) that is the
hallmark of sepsis. Additionally, we believe that inflammatory
cytokine cargos transported by CytoVesicles may represent a novel,
yet important therapeutic target.
Community-acquired
Pneumonia
CAP
represents a significant opportunity for Sigyn Therapy to reduce
the occurrence of sepsis. CAP is a leading cause of death among
infectious diseases, the leading cause of death in children under
five years of age, and a catalyst for approximately 50% of sepsis
and septic shock cases.
In
the United States, more than 1.5 million individuals are
hospitalized with CAP each year, resulting in an annual financial
burden that exceeds $10 billion.
Statistically,
a therapeutic strategy that reduced the incidence of CAP related
sepsis and septic shock would save thousands of lives each year. In
a study of 4,222 patients, the all-cause mortality for adult
patients with CAP was reported to be 6.5% during hospitalization.
However, the mortality of patients with CAP related sepsis and
septic shock rose to 51% during hospitalization.
CAP
is further complicated by the fact that the pathogen sources of CAP
are identified in only 38% of patients, based on a study of 2,259
subjects whose pneumonia diagnosis was confirmed by chest x-ray. Of
the source pathogens identified in the study, ninety seven percent
(97%) were either viral or bacterial in origin.
To
reduce the occurrence of CAP related sepsis and septic shock, Sigyn
Therapy offers a broad-spectrum mechanism to reduce the circulating
presence of viral pathogens and bacterial toxins before and if they
are identified as the CAP pathogen source. Additionally, Sigyn
Therapy may help to control the excess production of inflammatory
cytokines (the cytokine storm) that precipitate sepsis and septic
shock.
Emerging
Pandemic Threats
Covid-19
affirmed the important role of extracorporeal blood purification
technologies as first-line countermeasures to treat a newly
emerging pandemic threat not addressed with a drug or vaccine at
the outset of an outbreak. The confluence of global warming, urban
crowding, and intercontinental travel is expected to fuel a
continuance of future pandemic threats.
Additionally,
as a majority of known human viruses are not addressed with a
corresponding drug or vaccine, there will be an ongoing need for
blood purification technologies that reduce the severity of
infection and mitigate the excess production of inflammatory
cytokines (the cytokine storm) associated with high mortality in
non-pandemic viral infections. In this regard, we believe that
Sigyn Therapy aligns with U.S. Government initiatives that support
the development of broad-spectrum medical countermeasures that can
mitigate the impact of emerging pandemic threats, yet also have
viability in established disease indications.
Hepatic
Encephalopathy
Based
on the results of invitro blood purification studies
conducted to date, we consider Sigyn Therapy to be a compelling
strategy to reverse the length and severity of Hepatic
Encephalopathy (“HE”), a frequent and serious complication of both
chronic liver disease and acute liver failure. A hallmark
characteristic of HE is the accumulation of neurotoxic substances
in the bloodstream that translocate through the blood-brain
barrier, which can result in a hepatic coma in severe cases and
ultimately cause death.
The
three-year survival rate following the first episode of HE is
approximately 15%. The clinical and economic burden of HE is
considerable as it contributes to an impaired quality of life,
morbidity, and mortality. In the United States, HE is a significant
public health concern that results in 100,000–115,000 yearly
hospital admissions.
The
severity of Hepatic Encephalopathy is often correlated with
elevated concentrations of hepatic toxins, pro-inflammatory
cytokines, and bacterial toxins in the bloodstream. In vitro
blood plasma studies have validated the ability of Sigyn Therapy to
address hepatic toxins (ammonia, bile acid, and bilirubin),
relevant pro-inflammatory cytokines (TNF-a, IL-1b, and IL-6),
gram-negative bacterial toxin (endotoxin), and gram-positive
bacterial toxins (peptidoglycan and lipoteichoic acid).
HE is
often a common occurrence in cirrhosis patients awaiting a donor
liver for transplant. As the reduced duration of an HE episode
correlates with higher rates of survival to transplant, Sigyn
Therapy may have potential utility as a bridge-to-liver transplant
device.
Bridge-To-Liver
Transplant
There
is an urgent need for a medical intervention that could reduce the
circulating presence of hepatic toxins, pro-inflammatory cytokines,
and pathogenic factors as a means to assist in extending the lives
to those awaiting a liver transplant. Based on these requirements,
there may be an opportunity for Sigyn Therapy to stabilize or
extend the life of a patient prior to the identification of a
matched liver for transplantation - otherwise known as a
bridge-to-liver transplant. In 2017, 8,082 U.S. patients received a
liver transplant, and 13,885 patients were on the waiting list for
a liver transplant. In that year, the average cost associated with
a liver transplant was reported to be $577,100 USD.
Recent Corporate Developments
|
● |
December
2020 – Reported the first in vitro study results of
Sigyn Therapy. The study demonstrated the simultaneous reduction of
endotoxin, a gram-negative bacterial toxin, and relevant
pro-inflammatory cytokines from human blood plasma. Included among
validated cytokines were Interleukin-1 Beta (IL-1B), Interleukin-6
(IL-6) and Tumor Necrosis Factor alpha (TNF-a). |
|
|
|
|
● |
January
2021 - Announced the results of an in vitro pilot study
that successfully modeled the ability of Sigyn Therapy to address
CytoVesicles (extracellular vesicles that transport inflammatory
cargos in the bloodstream). |
|
|
|
|
● |
January
2021 - Appointed industry veteran Eric Lynam as Head of
Clinical Affairs, with a mandate to oversee clinical studies of
Sigyn Therapy. |
|
|
|
|
● |
April
2021 - Disclosed in vitro study observations that
demonstrated the ability of Sigyn Therapy to adsorb viral
pathogens, including SARS-CoV-2 (COVID-19). |
|
|
|
|
● |
April
2021 - Appointed former Aethlon Medical executive Charlene Owen
as Director of Operations. |
|
|
|
|
● |
July
2021 - Announced the completion of in vitro blood
purification studies that demonstrated the broad-spectrum ability
of Sigyn Therapy to eliminate hepatic toxins (ammonia, bile acid
& bilirubin) associated with Hepatic
Encephalopathy. |
|
|
|
|
● |
July
2021 - Disclosed the completion of a first-in-mammal pilot
animal study that validated the feasibility of a clinical protocol
that resulted in the safe administration of Sigyn Therapy during
six-hour treatment exposures. |
|
|
|
|
● |
December
2021 - Announced the completion of in vitro studies that
validated the ability of Sigyn Therapy to deplete gram-positive
bacterial toxins from human blood plasma. |
|
|
|
|
● |
February
2022 - Reported the successful completion of an in vivo
animal study conducted at the University of Michigan, which
demonstrated Sigyn Therapy to be safe and well
tolerated. |
|
|
|
|
● |
March
2022 - Appointed accomplished financial executive, Jeremy
Ferrell, CPA, MBA as Chief Financial Officer, with overall
responsibility for operational finance, budgeting, and financial
reporting, as well as helping to manage the Company’s relationships
and interactions with the investment community. |
|
|
|
|
● |
March
2022 - Announced the appointments of two internationally
recognized clinician researchers, Alexander S. Yevzlin, MD, FASN
and H. David Humes, MD, to Sigyn Therapeutics’ Scientific Advisory
Board. |
|
|
|
|
● |
March
2022 - Ajay Verma, MD, PhD, a recognized thought leader in the
field of neurology joins the Science Advisory Board. |
|
|
|
|
● |
April
2022 - Donald J. Hillebrand, M.D., a recognized thought leader
in the field of Hepatology and Liver Transplantation joins the
Science Advisory Board. |
Marketing and Sales
At
present, our primary focus is the clinical and regulatory
advancement of Sigyn Therapy. As such, we do not market or sell any
therapeutic products at this time. However, we plan to forge
relationships with organizations that have established distribution
channels into markets that may have a demand for Sigyn Therapy
should it receive market clearance from FDA or other foreign
regulatory agencies.
Intellectual Property
We
own the intellectual property rights to pending royalty-free
patents that have been assigned to us by our co-founders, James A.
Joyce and Craig P. Roberts. We have also received a “Notice of
Allowance” from the United States Patent and Trademark Office
(USPTO) related to the use of Sigyn Therapeutics, Sigyn Therapy,
and the protection of our corporate logo. We plan to continually
expand our intellectual property portfolio and protect trade
secrets that are not the subject of patent submissions. However,
there is no assurance that the claims of current pending and future
patent applications will result in issued patents.
At
present, we own the rights to the following patents
pending.
DEVICES,
SYSTEMS AND METHODS FOR THE BROAD-SPECTRUM REDUCTION OF
PRO-INFLAMMATORY CYTOKINES IN BLOOD - U.S. Application No.:
62/881,740; Filing Date: 2019-08-01 - Inventors: Joyce and
Roberts
DEVICES,
SYSTEMS AND METHODS FOR THE BROAD-SPECTRUM REDUCTION OF
PRO-INFLAMMATORY CYTOKINES IN BLOOD - International Patent
Application No.: PCT/US2020/044223; Filing Date: 2020-07-30 -
Inventors: Joyce and Roberts
DEVICES,
SYSTEMS AND METHODS FOR THE BROAD-SPECTRUM REDUCTION OF
PRO-INFLAMMATORY CYTOKINES IN BLOOD - U.S. Patent Application No.:
16/943,436; Filing Date: 2020-07-30 - Inventors: Joyce and
Roberts
DEVICES,
SYSTEMS AND METHODS FOR THE BROAD-SPECTRUM REDUCTION OF
PRO-INFLAMMATORY CYTOKINES IN BLOOD - EP No.: 20757445; Filing
Date: 2022-01-24 - Inventors: Joyce and Roberts
DEVICES,
SYSTEMS AND METHODS FOR THE BROAD-SPECTRUM REDUCTION OF
PRO-INFLAMMATORY CYTOKINES IN BLOOD - CA No.: 3148773; Filing Date:
2022-01-25 - Inventors: Joyce and Roberts
DEVICES,
SYSTEMS AND METHODS FOR THE BROAD-SPECTRUM REDUCTION OF
PRO-INFLAMMATORY CYTOKINES IN BLOOD - JP No.: 2022-506670; Filing
Date: 2022-01-31 - Inventors: Joyce and Roberts
EXTRA-LUMEN
ADSORPTION OF VIRAL PATHOGENS FROM BLOOD
U.S.
Patent Application No.: 63/177,520; Filing Date:
2021-04-21
Inventor:
James A. Joyce
Government Regulation
In
the United States, Sigyn Therapy is subject to regulation by the
FDA. Should we seek to commercialize Sigyn Therapy outside the
United States, we expect to face comparable international
regulatory oversight. Based on published guidance by FDA, Sigyn
Therapy is a Class III medical device whose regulatory jurisdiction
is the Center for Devices and Radiological Health (“CDRH”), the FDA
branch that oversees the market approval of medical devices. As a
Class III device, we are subject to a Pre-Market Approval (“PMA”)
submission pathway with CDRH. The approval of a PMA application to
support market clearance of Sigyn Therapy will require extensive
data, which includes but is not limited to technical documents,
preclinical studies, animal studies, human clinical trials, the
establishment of Good Manufacturing Practice (“GMP”) standards and
labeling that fulfills FDA’s requirement to demonstrate reasonable
evidence of safety and effectiveness of a medical device product.
In this regard, there is no assurance that Sigyn Therapy will be
demonstrated to be a safe and effective product for any therapeutic
indication that we pursue.
Should
Sigyn Therapy receive market clearance, we will need to comply with
applicable laws and regulations that govern the development,
testing, manufacturing, labeling, marketing, storage, distribution,
advertising and promotion, and post-marketing surveillance
reporting for medical devices. Failure to comply with these
applicable requirements may subject a device and/or its
manufacturer to a variety of administrative sanctions, such as
issuance of warning letters, import detentions, civil monetary
penalties and/or judicial sanctions, such as product seizures,
injunctions and criminal prosecution. Our failure to comply with
any of these laws and regulations could have a material adverse
effect on our operations.
We
are subject to regulations by federal, state, local and foreign
regulators. The implementation, modification, interpretation and
enforcement of these laws and regulations vary and can limit our
ability to provide many of our services. Our ability to compete in
our target markets depends, in part, upon favorable regulatory
conditions and the favorable interpretations of existing laws and
regulations.
Manufacturing and Procurement
We
are advancing a manufacturing relationship with an FDA registered
Contract Manufacturing Organization (CMO) to establish GMP
compliant manufacturing to support human clinical studies and
potential commercialization should we receive clearance to market
Sigyn Therapy. We plan to establish manufacturing procedure
specifications that define each stage of our manufacturing,
inspection and testing processes and the control parameters or
acceptance criteria that apply to each activity that result in the
production of our technology.
We
have also established relationships with industry vendors that
provide components necessary to manufacture our device. Should the
relationship with an industry vendor be interrupted or
discontinued, we believe that alternate component suppliers can be
identified to support the continued manufacturing of our product.
However, delays related to interrupted or discontinued vendor
relationships could adversely impact our business.
Research and Product Development
To
date, we have outsourced our research and product development
activities, which include the performance of in vitro blood
plasma validation studies, animal studies, pre-GMP product assembly
and manufacturing through third party organizations with extensive
experience in advancing extracorporeal blood purification
technologies. At present, we do not have plans to build and staff
our own research and product development facility.
Employees
As of
the date of this prospectus, the Company had 5 full time employees
and believes its relationships with its employees are
good.
DESCRIPTION OF PROPERTY
Operating Lease
Our
corporate address 2468 Historic Decatur Road, Suite 140, San Diego,
California, 92106
On
May 27, 2021, the Company entered into a sixty-three month lease
for its corporate office at $5,955 per month commencing June 15,
2021 maturing September 30, 2026.
We
believe that our existing facilities are adequate for our current
needs and that we will be able to lease suitable additional or
alternative space on commercially reasonable terms if and when we
need it.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS
Directors
and Executive Officers
The
following table sets forth the names, ages, and biographical
information of each of our current directors and executive officers
and the positions with the Company held by each person. Our
executive officers are elected annually by the board of directors.
The directors serve one-year terms until their successors are
elected. The executive officers serve terms of one year or until
their death, resignation or removal by the board of directors.
Unless described below, there are no family relationships among any
of the directors and officers.
Name |
|
Age |
|
Title |
Jim
Joyce |
|
60 |
|
Chief
Executive Officer and Chairman of the Board of Directors
(“CEO”) |
Craig
Roberts |
|
69 |
|
Chief
Technology Officer and Director |
Jeremy
Ferrell (1) |
|
52 |
|
Chief
Financial Officer |
(1)
Mr. Ferrell was hired as the Company’s Chief Financial Officer
effective March 9, 2022.
Mr.
Joyce is the Co-founder, Chairman and CEO of Sigyn Therapeutics,
Inc. He has 30+ years of diverse public market experience, which
includes two decades of public company CEO and Corporate Board
leadership roles.
Mr.
Joyce was previously the founder, Chairman and CEO of Aethlon
Medical, a therapeutic device company that he navigated from a
single shareholder start-up to Nasdaq-traded Company with 8000+
shareholders. During his tenure, Mr. Joyce oversaw the development
of the Aethlon Hemopurifier, the first and only therapeutic
candidate to receive two “Breakthrough Device” awards from the
United States Food and Drug Administration (FDA). Under his
leadership, the Hemopurifier received FDA “Emergency Use
Authorization” (EAU) approval to treat Ebola virus and was cleared
to treat Ebola by the German Government and Health Canada as well.
In response, Time Magazine named the Hemopurifier one of the “11
Most Remarkable Advances in Healthcare” and designated the device
to its “Top 25 Best Inventions” award list. Mr. Joyce is well
suited to sit on the Board due to his extensive public company
background.
During
Mr. Joyce’s tenure, Aethlon won two Department of Defense (DOD)
contract awards, a National Cancer Institute (NCI) contract award
and a grant from the National Institutes of Health (NIH). He also
led the completion of approximately $100 million of equity
financings and originated preclinical and clinical collaborations
with more than twenty government and non-government institutes and
organizations. Mr. Joyce is also the former Executive Chairman of
Exosome Sciences, Inc., a company he founded to advance the
discovery of exosomal biomarkers to diagnose and monitor cancer and
neurological disorders.
Mr.
Roberts is an inventor of therapeutic device technologies, which
includes a Percutaneous Adult Extracorporeal Membrane Oxygenation
(ECMO) system that was licensed and subsequently sold to C.R. Bard.
During the ongoing pandemic, ECMO has been broadly deployed to
treat critically ill COVID-19 patients. Additionally, Mr. Roberts
is the inventor of the IMPACT System, which received CE Mark
clearance in the European Union and was subsequently registered in
32 countries and successfully deployed to treat cytokine storm
related conditions, including sepsis, acute respiratory distress
syndrome (ARDS), acute liver failure, severe pneumonia and H5N1
bird flu virus infection. Mr. Roberts is suited to sit on the Board
due to his strong medical device background.
Mr.
Ferrell has more than 25 years of finance and operations leadership
experience, with expertise in venture capital; mergers and
acquisitions; due diligence; initial public offerings; strategic
alliance negotiation; and financial planning and reporting. He was
most recently CFO at Miku, Inc, a privately held consumer hardware
and tele-health company, where he managed a successful seed
financing round and led Miku’s transition from its parent to an
independent company. Previously, he founded a Fractional CFO
Services firm, where he served as CFO for various life sciences and
technology companies, including Singular Genomics, Inc., Aspen
Neuroscience, Inc., and Hyduro, Inc. Before that, he served as
Corporate Controller for ecoATM, Inc., which was acquired by
Outerwall, Inc. in 2013. Earlier in his career, Mr. Ferrell
practiced as a certified public accountant. Mr. Ferrell received
his Bachelor of Science degree in Accountancy from Liberty
University and his Master of Business Administration degree in
International Finance from the Thunderbird School of Global
Management.
Conflicts
of Interest
Certain
potential conflicts of interest are inherent in the relationships
between our officers and directors and us.
From
time to time, one or more of our affiliates may form or hold an
ownership interest in and/or manage other businesses both related
and unrelated to the type of business that we own and operate.
These persons expect to continue to form, hold an ownership
interest in and/or manage additional other businesses which may
compete with our business with respect to operations, including
financing and marketing, management time and services and potential
customers. These activities may give rise to conflicts between or
among the interests of us and other businesses with which our
affiliates are associated. Our affiliates are in no way prohibited
from undertaking such activities, and neither we nor our
shareholders will have any right to require participation in such
other activities.
We
may transact business with some of our officers, directors and
affiliates, as well as with firms in which some of our officers,
directors or affiliates have a material interest, potential
conflicts may arise between the respective interests of us and
these related persons or entities. We believe that such
transactions will be effected on terms at least as favorable to us
as those available from unrelated third parties. As of this filing,
we have not transacted business with any officer, director, or
affiliate.
With
respect to transactions involving real or apparent conflicts of
interest, we have adopted policies and procedures which require
that: (I) the fact of the relationship or interest giving rise to
the potential conflict be disclosed or known to the directors who
authorize or approve the transaction prior to such authorization or
approval, (ii) the transaction be approved by a majority of our
disinterested outside directors, and (iii) the transaction be fair
and reasonable to us at the time it is authorized or approved by
our directors.
Our
policies and procedures regarding transactions involving potential
conflicts of interest are not in writing. We understand that it
will be difficult to enforce our policies and procedures and will
rely and trust our officers and directors to follow our policies
and procedures. We will implement our policies and procedures by
requiring the officer or director who is not in compliance with our
policies and procedures to remove himself and the other officers
and directors will decide how to implement the policies and
procedures, accordingly.
Corporate
Governance
The
Company promotes accountability for adherence to honest and ethical
conduct; endeavors to provide full, fair, accurate, timely and
understandable disclosure in reports and documents that the Company
files with the Securities and Exchange Commission (the “SEC”) and
in other public communications made by the Company; and strives to
be compliant with applicable governmental laws, rules and
regulations.
Director
Independence
We do
not have any independent directors. The Company will be appointing
independent directors in accordance with NASDAQ listing rule 5605
(a)(2) before we uplist via an amendment to this registration
statement of which this prospectus is a part. Because our common
stock is not currently listed on a national securities exchange, we
have used the definition of “independence” of The NASDAQ Stock
Market to make this determination. NASDAQ Listing Rule 5605(a)(2)
provides that an “independent director” is a person other than an
officer or employee of the company or any other individual having a
relationship which, in the opinion of the company’s board of
directors, would interfere with the exercise of independent
judgment in carrying out the responsibilities of a director. The
NASDAQ listing rules provide that a director cannot be considered
independent if:
|
● |
the
director is, or at any time during the past three years was, an
employee of the company; |
|
● |
the
director or a family member of the director accepted any
compensation from the company in excess of $120,000 during any
period of 12 consecutive months within the three years preceding
the independence determination (subject to certain exclusions,
including, among other things, compensation for board or board
committee service);
|
|
● |
a
family member of the director is, or at any time during the past
three years was, an executive officer of the company; |
|
● |
the
director or a family member of the director is a partner in,
controlling stockholder of, or an executive officer of an entity to
which the company made, or from which the company received,
payments in the current or any of the past three fiscal years that
exceed 5% of the recipient’s consolidated gross revenue for that
year or $200,000, whichever is greater (subject to certain
exclusions); |
|
● |
the
director or a family member of the director is employed as an
executive officer of an entity where, at any time during the past
three years, any of the executive officers of the company served on
the compensation committee of such other entity; or |
|
● |
the
director or a family member of the director is a current partner of
the company’s outside auditor, or at any time during the past three
years was a partner or employee of the company’s outside auditor,
and who worked on the company’s audit. |
Board
Composition
Our
business and affairs are managed under the direction of our board
of directors, which upon the consummation of this offering is
expected to consist of five members. Directors serve for a term of
one year and until their successors have been duly elected and
qualified.
Committees
of the Board
Our
Company currently does not have nominating, compensation, or audit
committees or committees performing similar functions nor does our
Company have a written nominating, compensation or audit committee
charter. The Company plans to update its board committees to meet
NASDAQ requirements via an amendment to this registration statement
of which this prospectus is a part.
In
lieu of an audit committee, the Company’s board of directors is
responsible for reviewing and making recommendations concerning the
selection of outside auditors, reviewing the scope, results and
effectiveness of the annual audit of the Company’s consolidated
financial statements and other services provided by the Company’s
independent public accountants. The board of directors, the Chief
Executive Officer and the Chief Financial Officer of the Company
review the Company’s internal accounting controls, practices and
policies.
The
Company maintains a Scientific Advisory Board (“SAB”) to assist the
Board of Directors by reviewing and evaluating our research and
development programs. Members of the SAB receive per meeting fees
and may also be eligible to receive stock options upon approval of
the Company’s board of directors.
Audit
Committee Financial Expert
Prior
to the completion of this offering, we plan to appoint a board
member that qualifies as an “audit committee financial expert” as
defined in Item 407(D)(5) of Regulation S-K, nor do we have a board
member that qualifies as “independent” as the term is used in Item
7(d)(3)(iv)(B) of Schedule 14A under the Securities Exchange Act of
1934, as amended, and as defined by Rule 4200(a)(14) of the FINRA
Rules.
We
believe that our directors are capable of analyzing and evaluating
our consolidated financial statements and understanding internal
controls and procedures for financial reporting. The directors of
our Company do not believe that it is necessary to have an audit
committee because management believes that the board of directors
can adequately perform the functions of an audit committee. In
addition, we believe that retaining an independent director who
would qualify as an “audit committee financial expert” would be
overly costly and burdensome and is not warranted in our
circumstances given the stage of our development and the fact that
we have not generated any positive cash flows from operations to
date.
Involvement
in Certain Legal Proceedings
Our
directors and our executive officers have not been involved in or a
party in any of the following events or actions during the past ten
years:
|
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 competent
jurisdiction, permanently or temporarily enjoining, barring,
suspending or otherwise limiting his involvement in any type of
business, securities or banking activities; or |
|
4. |
being
found by a court of competent jurisdiction (in a civil action), the
Commission or the Commodity Futures Trading Commission to have
violated a federal or state securities or commodities law, and the
judgment has not been reversed, suspended, or vacated. |
|
5. |
Such
person was found by a court of competent jurisdiction in a civil
action or by the Commission to have violated any Federal or State
securities law, and the judgment in such civil action or finding by
the Commission has not been subsequently reversed, suspended, or
vacated; |
|
6. |
Such
person was found by a court of competent jurisdiction in a civil
action or by the Commodity Futures Trading Commission to have
violated any Federal commodities law, and the judgment in such
civil action or finding by the Commodity Futures Trading Commission
has not been subsequently reversed, suspended or
vacated; |
|
7. |
Such
person was the subject of, or a party to, any Federal or State
judicial or administrative order, judgment, decree, or finding, not
subsequently reversed, suspended or vacated, relating to an alleged
violation of: (I) Any Federal or State securities or commodities
law or regulation; or (ii) Any law or regulation respecting
financial institutions or insurance companies including, but not
limited to, a temporary or permanent injunction, order of
disgorgement or restitution, civil money penalty or temporary or
permanent cease-and-desist order, or removal or prohibition order;
or (iii) Any law or regulation prohibiting mail or wire fraud or
fraud in connection with any business entity; or |
|
8. |
Such
person was the subject of, or a party to, any sanction or order,
not subsequently reversed, suspended or vacated, of any
self-regulatory organization (as defined in Section 3(a)(26) of the
Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as
defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C.
1(a)(29))), or any equivalent exchange, association, entity or
organization that has disciplinary authority over its members or
persons associated with a member. |
Code
of Ethics
The
Company has not formally adopted a written Code of Ethics that
governs the Company’s employees, officers and directors as the
Company is not required to do so. The board of directors evaluated
the business of the Company and the number of employees and
determined that since the business is operated by a small number of
persons, general rules of fiduciary duty and federal and state
criminal, business conduct and securities laws are adequate ethical
guidelines. In the event our operations, employees and/or directors
expand in the future, we may take actions to adopt a formal Code of
Ethics.
Role
of Board of Directors in Risk Oversight
Our
board of directors oversees an enterprise-wide approach to risk
management, designed to support the achievement of business
objectives, including organizational and strategic objectives, to
improve long-term organizational performance and enhance
stockholder value. The involvement of our board of directors in
setting our business strategy is a key part of its assessment of
management’s plans for risk management and its determination of
what constitutes an appropriate level of risk for our company. The
participation of our board of directors in our risk oversight
process includes receiving regular reports from members of senior
management on areas of material risk to our company, including
operational, financial, legal and regulatory, and strategic and
reputational risks.
While
our board of directors has the ultimate responsibility for the risk
management process, senior management and various committees of our
board of directors, when formed, will also have responsibility for
certain areas of risk management. Our senior management team is
responsible for day-to-day risk management and regularly reports on
risks to our full board of directors or a relevant committee. Our
finance and regulatory personnel serve as the primary monitoring
and evaluation function for company-wide policies and procedures,
and manage the day-to-day oversight of the risk management strategy
for our ongoing business. This oversight includes identifying,
evaluating, and addressing potential risks that may exist at the
enterprise, strategic, financial, operational, compliance and
reporting levels.
Director
Compensation
All
of the Company’s directors are employees of the Company and such
persons have not been separately compensated for their services to
the Company as a director.
Limitation
on Liability and Indemnification Matters
Our
Certificate of Incorporation and bylaws provide that we will
indemnify our directors and officers, and may indemnify our
employees and other agents, to the fullest extent permitted by the
Delaware General Corporation Law, which prohibits our Certificate
of Incorporation from limiting the liability of our directors for
the following:
|
● |
any
breach of the director’s duty of loyalty to the corporation or its
shareholders; |
|
|
|
|
● |
any
act or omission not in good faith or that involves intentional
misconduct or a knowing violation of law; |
|
|
|
|
● |
unlawful
payments of dividends or unlawful stock repurchases or redemptions;
or |
|
|
|
|
● |
any
transaction from which the director derived an improper personal
benefit. |
If
Delaware law is amended to authorize corporate action further
eliminating or limiting the personal liability of a director, then
the liability of our directors will be eliminated or limited to the
fullest extent permitted by Delaware law, as so amended. Our
Articles of Incorporation does not eliminate a director’s duty of
care and in appropriate circumstances, equitable remedies, such as
injunctive or other forms of non-monetary relief, remain available
under Delaware law. This provision also does not affect a
director’s responsibilities under any other laws, such as the
federal securities laws or other state or federal laws. Under our
bylaws, we will also be empowered to purchase insurance on behalf
of any person whom we are required or permitted to
indemnify.
In
addition to the indemnification required in our Certificate of
Incorporation and bylaws, we have entered or will enter into
indemnification agreements with each of our directors and officers.
These agreements provide indemnification for certain expenses and
liabilities incurred in connection with any action, suit,
proceeding, or alternative dispute resolution mechanism, or
hearing, inquiry, or investigation that may lead to the foregoing,
to which they are a party, or are threatened to be made a party, by
reason of the fact that they are or were a director, officer,
employee, agent, or fiduciary of our company, or any of our
subsidiaries, by reason of any action or inaction by them while
serving as an officer, director, agent, or fiduciary, or by reason
of the fact that they were serving at our request as a director,
officer, employee, agent, or fiduciary of another entity. In the
case of an action or proceeding by, or in the right of, our company
or any of our subsidiaries, no indemnification will be provided for
any claim where a court determines that the indemnified party is
prohibited from receiving indemnification. We believe that these
bylaw provisions and indemnification agreements are necessary to
attract and retain qualified persons as directors and officers. We
also maintain directors’ and officers’ liability
insurance.
The
limitation of liability and indemnification provisions in our
Certificate of Incorporation and bylaws may discourage shareholders
from bringing a lawsuit against directors for breach of their
fiduciary duties. They may also reduce the likelihood of derivative
litigation against directors and officers, even though an action,
if successful, might benefit us and our shareholders. A
shareholder’s investment may be harmed to the extent we pay the
costs of settlement and damage awards against directors and
officers pursuant to these indemnification provisions. Insofar as
we may provide indemnification for liabilities arising under the
Securities Act to our directors, officers, and controlling persons
pursuant to the foregoing provisions, or otherwise, we have been
advised that, in the opinion of the SEC, such indemnification is
against public policy as expressed in the Securities Act, and is,
therefore, unenforceable. There is no pending litigation or
proceeding naming any of our directors or officers as to which
indemnification is being sought, nor are we aware of any pending or
threatened litigation that may result in claims for indemnification
by any director or officer.
EXECUTIVE COMPENSATION
The
following is a discussion and analysis of compensation arrangements
of our named executive officers, or NEOs. This discussion contains
forward looking statements that are based on our current plans,
considerations, expectations and determinations regarding future
compensation programs. Actual compensation programs that we adopt
may differ materially from currently planned programs as summarized
in this discussion. As an “emerging growth company” as defined in
the JOBS Act, we are not required to include a Compensation
Discussion and Analysis section and have elected to comply with the
scaled disclosure requirements applicable to emerging growth
companies.
Summary Compensation Table
The
particulars of the compensation paid to the following persons: (1)
our principal executive officer; and (2) each of our two most
highly compensated executive officers who were serving as executive
officers at the end of the fiscal year ended December 31, 2021, who
we will collectively refer to as the “named executive officers” of
the Company, are set out in the following summary compensation
table:
SUMMARY COMPENSATION TABLE |
Name and Principal Position |
|
Year |
|
|
Salary
($) |
|
|
Bonus
($) |
|
|
Stock
Awards
($) |
|
|
Option
Awards
($) |
|
|
Non-Equity
Incentive Plan
Compensation
($) |
|
|
Change in
Pension
Value and
Nonqualified
Deferred
Compensation Earnings ($) |
|
|
All Other
Compensation
($) (1) |
|
|
Total
($) |
|
Jim Joyce |
|
|
2021 |
|
|
|
496,125 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
$ |
31,126 |
|
|
$ |
527,251 |
|
Chief Executive Officer |
|
|
2020 |
|
|
|
418,842 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
$ |
22,516 |
|
|
$ |
440,866 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Craig Roberts |
|
|
2021 |
|
|
|
259,000 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
$ |
21,704 |
|
|
$ |
280,704 |
|
Chief Technology Officer |
|
|
2020 |
|
|
|
233,981 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
$ |
22,024 |
|
|
$ |
256,497 |
|
|
|
|
2019 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeremy Ferrell |
|
|
2021 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
$ |
- |
|
|
$ |
- |
|
Chief
Financial Officer (2) |
|
|
2020 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
(1) |
amounts
include health insurance and employer matched 401(k)
costs. |
|
(2) |
Mr.
Ferrell was hired as the Company’s Chief Financial Officer
effective March 9, 2022. |
Other
than as disclosed below, there are no compensatory plans or
arrangements with respect to our executive officers resulting from
their resignation, retirement or other termination of employment or
from a change of control.
Grants of Plan-Based Awards Table
None
of our named executive officers received any grants of stock,
option awards or other plan-based awards during the years ended
December 31, 2021 and 2020, except as described below in “Equity
Compensation Plans and Other Benefit Plans” below.
Options Exercised and Stock Vested Table
None
of our named executive officers exercised any stock options or
restricted stock units during the years ended December 31, 2021 and
2020.
Outstanding Equity Awards at 2021 Year End
Except
as described below in “Equity Compensation Plans and Other Benefit
Plans”, the Company has not issued any awards to its named
executive officers. The Company and its board of directors may
grant awards as it sees fit to its employees as well as key
consultants. See the discussion of “Equity Compensation Plans and
Other Benefit Plans” below.
Agreements with Executive Officers
Jim
Joyce
Mr.
Joyce receives an annual base salary of $455,000, plus bonus
compensation not to exceed 50% of salary. Mr. Joyce’s employment
also provides for medical insurance, disability benefits and one
year of severance pay if his employment is terminated without cause
or due to a change in control. Additionally, the Company has agreed
to maintain a beneficial ownership target of 9% for Mr. Joyce. Mr.
Joyce’s compensation was approved by the Reign Resources
Corporation Board of Directors on October 6, 2020 and was among
conditions of the Share Exchange Agreement that was completed with
Sigyn Therapeutics, Inc. on October 19, 2020.
Jeremy
Ferrell
Mr.
Ferrell was hired on March 9, 2022 as the Company’s Chief Financial
Officer. Mr. Ferrell receives an annual base salary of $250,000,
plus discretionary bonus compensation not to exceed 40% of salary.
Mr. Ferrell’s employment also provides for medical insurance,
disability benefits and three months of severance pay if his
employment is terminated without cause or due to a change in
control. Additionally, Mr. Ferrell will be granted up to 600,000
options to purchase 600,000 of the Company’s common shares upon the
implementation of a Company employee option plan.
Craig
Roberts
Mr.
Roberts, the Company’s Chief Technology Officer (CTO) receives an
annual base salary of $240,000 as well as medical insurance and
related benefits. Mr. Roberts is eligible to receive bonus
compensation at the discretion of the Sigyn Therapeutics, Inc.
Board of Directors.
Equity
Compensation Plans and Other Benefit Plans
The
Company does not currently have any equity compensation plans and
there are no arrangements or plans in which we provide pension,
retirement or similar benefits for directors or executive officers.
We have no material bonus or profit-sharing plans.
Indebtedness
of Directors, Senior Officers, Executive Officers and Other
Management
None
of our directors or executive officers or any associate or
affiliate of the Company during the last two fiscal years, is or
has been indebted to the Company by way of guarantee, support
agreement, letter of credit or other similar agreement or
understanding currently outstanding.
Outstanding
Equity Awards at Fiscal Year-End Table
The
following table sets forth certain information concerning
outstanding stock awards held by the Named Executive Officers for
our year ended December 31, 2021:
|
|
Option
Awards |
|
Stock
Awards |
|
Name |
|
Number
of Securities Underlying Unexercised Options
(#)
Exercisable
|
|
|
Number
of Securities Underlying Unexercised Options
(#)
Unexercisable
|
|
|
Equity
Incentive Plan Awards: Number of Securities Underlying Unexercised
Unearned Options
(#)
|
|
|
Option
Exercise Price
($)
|
|
|
Option
Expiration Date |
|
Number
of Shares or Units of Stock That Have Not Vested
(#)
|
|
|
Market
Value of Shares or Units of Stock That Have Not
Vested
($)
|
|
|
Equity
Incentive Plan Awards: Number of Unearned Shares, Units or Other
Rights That Have Not Vested
(#)
|
|
|
Equity
Incentive Plan Awards: Market or Payout Value of Unearned Shares,
Units or Other Rights That Have Not Vested
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
None. |
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
-0- |
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The
following table sets forth information relating to the beneficial
ownership our common stock as of June 22, 2022 by (i) each person
known to be the beneficial owner of more than 5% of the outstanding
shares of common stock and (ii) each of our directors and executive
officers. Unless otherwise noted below, we believe that all persons
named in the table have sole voting and investment power with
respect to all shares of common stock beneficially owned by them.
For purposes hereof, a person is deemed to be the beneficial owner
of securities that can be acquired by such person within 60 days
from the date hereof upon the exercise of warrants or options or
the conversion of convertible securities. Each beneficial owner’s
percentage ownership is determined by assuming that any warrants,
options or convertible securities that are held by such person (but
not those held by any other person) and which are exercisable
within 60 days from the date hereof, have been
exercised.
Name
and Address (2) |
|
Amount of Beneficial Ownership |
|
|
Percent
of Class (1)
|
|
|
|
|
|
|
|
|
Jim
Joyce (3) |
|
|
12,820,000 |
|
|
|
34.4 |
% |
Craig
Roberts (4) |
|
|
12,820,000 |
|
|
|
34.4 |
% |
|
|
|
|
|
|
|
|
|
All Officers and Directors as a Group
(2 Persons) |
|
|
25,640,000 |
|
|
|
68.8 |
% |
|
|
|
|
|
|
|
|
|
Brio Capital Master Fund Ltd.
|
|
|
3,725,850 |
|
|
|
9.9 |
% |
|
|
|
|
|
|
|
|
|
Osher
Capital Partners LLC (5) |
|
|
3,050,658 |
|
|
|
8.2 |
% |
(1) |
Based
on 37,238,656 shares of common stock issued and
outstanding. |
(2) |
Unless
otherwise noted, the address of each beneficial owner is c/o Sigyn
Therapeutics, Inc., 2468 Historic Decatur Road, Suite 140, San
Diego, CA 92106. |
(3) |
Mr.
Joyce is the Company’s CEO. |
(4) |
Mr.
Roberts is the Company’s CTO. |
(5) |
Consists
of 3,050,658 common shares as of the date of this filing. Osher
Capital Partners LLC (“Osher”) is contractually limited to
beneficial ownership of our common shares not to exceed
9.99%. |
We
are not aware of any person who owns of record, or is known to own
beneficially, five percent or more of our outstanding securities of
any class, other than as set forth above. We do not have an
investment advisor. There are no current arrangements which will
result in a change in control.
Equity
Compensation Plans
The
following represents a summary of the Equity Compensation grants
and options awards outstanding at December 31, 2021 and 2020 and
changes during the years then ended:
2021 and 2020 |
Plan category |
|
Number of securities to be issued upon exercise of outstanding
options, warrants and rights |
|
|
Weighted-average exercise price of outstanding options, warrants
and rights |
|
|
Number of securities remaining available for future issuance under
equity compensation plan (excluding securities reflected in column
(a)) |
|
|
|
(a) |
|
|
(b) |
|
|
(c) |
|
Equity compensation plans
approved by security holders |
|
|
-0- |
|
|
$ |
-0- |
|
|
|
-0- |
|
Equity compensation plans not approved
by security holders |
|
|
-0- |
|
|
$ |
-0- |
|
|
|
-0- |
|
Total |
|
|
-0- |
|
|
$ |
-0- |
|
|
|
-0- |
|
UNDERWRITING
Univest
Securities, LLC is acting as representative of the underwriters.
Subject to the terms and conditions of an underwriting agreement
between us and the representative, we have agreed to sell to each
underwriter named below, and each underwriter named below has
severally agreed to purchase, at the public offering price less the
underwriting discounts set forth on the cover page of this
prospectus, the number of Class A Units listed next to its name in
the following table:
Underwriter |
|
Number of
Class A Units |
|
|
Number of
Class B Units
|
|
Univest Securities, LLC |
|
|
|
|
|
|
|
|
Total |
|
|
|
|
|
|
|
|
The underwriting agreement provides that the obligations of the
underwriters to pay for and accept delivery of the securities
offered by this prospectus are subject to various conditions and
representations and warranties, including the approval of certain
legal matters by their counsel and other conditions specified in
the underwriting agreement. The securities are offered by the
underwriters, subject to prior sale, when, as and if issued to and
accepted by them. The underwriters reserve the right to withdraw,
cancel or modify the offer to the public and to reject orders in
whole or in part. The underwriters are obligated to take and pay
for all of the Class A Units and Class B Units offered by this
prospectus if any such Class A Units and/or Class B Units are
taken, other than those shares of common stock and/or Series A
Warrants covered by the over-allotment option described below.
We
have agreed to indemnify the underwriters against specified
liabilities, including liabilities under the Securities Act, and to
contribute to payments the underwriters may be required to make in
respect thereof.
Over-Allotment
Option
We have granted to the representative an option, exercisable one or
more times in whole or in part, not later than 45 days after the
date of this prospectus, to purchase from us up to an (i)
additional
shares of
our common stock at a price of $
per share and/or (ii)
additional Series A Warrants to purchase
shares of common stock at
a price of $0.01 per warrant (15% of the shares of common stock and
warrants included in the Class A Units and Class B Units sold in
this offering), in each case, less the underwriting discounts and
commissions set forth on the cover of this prospectus in any
combination thereof to cover over-allotments, if any. To the extent
that the representative exercises this option, each of the
underwriters will become obligated, subject to conditions, to
purchase approximately the same percentage of these additional
shares of common stock and/or Series A Warrants as the number of
Class A Units and Class B Units to be purchased by it in the above
table bears to the total number of Class A Units and Class B Units
offered by this prospectus. We will be obligated, pursuant to the
option, to sell these additional shares of common stock and/or
Series A Warrants to the underwriters to the extent the option is
exercised. If any additional shares of common stock and/or Series A
Warrants are purchased, the underwriters will offer the additional
shares of common stock and/or Series A Warrants on the same terms
as those on which the other Class A Units and Class B Units are
being offered hereunder. If this option is exercised in full, the
total offering price to the public will be $
and the total net proceeds,
before expenses and after the credit to the underwriting
commissions described below, to us will be $
.
Discounts
and Commissions
The underwriters propose initially to offer the Class A Units and
Class B Units to the public at the public offering price set forth
on the cover page of this prospectus and to dealers at those prices
less a concession not in excess of
$ per Class A Unit
and $____ per Class B Units. If all of the Class A Units offered by
us are not sold at the public offering price, the underwriters may
change the offering price and other selling terms by means of a
supplement to this prospectus.
The following table shows the public offering price, underwriting
discounts and commissions and proceeds before expenses to us. The
information assumes either no exercise or full exercise of the
over-allotment option we granted to the representative of the
underwriters.
|
|
Per
Class A Unit |
|
|
Per
Class B Unit |
|
|
Total
Without Over-allotment Option |
|
|
Total
With Over-allotment Option |
|
Public
offering price |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Underwriting
discount (7.0%) |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Proceeds,
before expenses, to us |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Non-accountable
expense allowance (1.0%) |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
(1) |
The non-accountable expense
allowance will not payable with respect to representative’s
exercise of the over-allotment option. |
We
have agreed to pay a non-accountable expense allowance to the
representative of the underwriters equal to 1.0% of the gross
proceeds received at the closing of the offering. The
non-accountable expense allowance of 1.0% is not payable with
respect to any Class A Units and Class B Units sold upon exercise
of the underwriters’ over-allotment option. In addition,
wehave
agreed to reimburse the representative up to a maximum of $150,000
for out-of-pocket accountable expenses, including, but not limited
to, travel, due diligence expenses, reasonable fees and expenses of
its legal counsel, accountable roadshow expenses, and background
checks on our principal shareholders, directors and
officers.
Our
total estimated expenses of the offering, including registration,
filing and listing fees, printing fees and legal and accounting
expenses, but excluding underwriting discounts and commissions, are
approximately $
.
Representative’s
Warrants
Upon completion of this offering, we have agreed to issue to the
representative as compensation warrants to purchase up
to shares of common
stock (6.0% of the aggregate number of shares of common stock sold
in this offering inclusive of the over-allotment option (the
“representative’s warrants”). The representative’s warrants will be
exercisable at a per share exercise price equal to 110% of the
public offering price per Class A Unit and Class B Unit in this
offering. The representative’s warrants are exercisable at any time
and from time to time, in whole or in part, during the four and one
half year period commencing 180 days following the commencement of
sales of the securities issued in this offering.
The
representative’s warrants have been deemed compensation by FINRA
and are therefore subject to a 180-day lock-up pursuant to Rule
5110(e)(1)(A) of FINRA. The representative (or permitted assignees
under Rule 5110(e)(2)) will not sell, transfer, assign, pledge, or
hypothecate these warrants or the securities underlying these
warrants, nor will they engage in any hedging, short sale,
derivative, put, or call transaction that would result in the
effective economic disposition of the warrants or the underlying
securities for a period of 180 days following the commencement of
sales of the securities issued in this offering. In addition, the
representative’s warrants provide for registration rights upon
request, in certain cases. The sole demand registration right
provided will not be greater than five years from the commencement
of sales of the securities issued in this offering in compliance
with FINRA Rule 5110(g)(8)(C). The piggyback registration rights
provided will not be greater than seven years from the commencement
of sales of the securities issued in this offering in compliance
with FINRA Rule 5110(g)(8)(D). We will bear all fees and expenses
attendant to registering the securities issuable on exercise of the
warrants other than underwriting commissions incurred and payable
by the holders. The exercise price and number of shares issuable
upon exercise of the warrants may be adjusted in certain
circumstances including in the event of a stock dividend or our
recapitalization, reorganization, merger or consolidation. However,
the warrant exercise price or underlying shares will not be
adjusted for issuances of shares of common stock at a price below
the warrant exercise price.
Right
of First Refusal
We
have agreed to grant the representative, for the 9-month period
following the closing of this offering, a right of first refusal to
provide investment banking services to us on an exclusive basis in
all matters for which investment banking services are sought by us
(the “Right of First Refusal”), which right is exercisable in the
representative’s sole discretion. In accordance FINRA Rule
5110(g)(6)(A), such Right of First Refusal does not have
a duration of more than three years from the commencement of sales
of the public offering or the termination date of the engagement
between the us and the underwriters.
Lock-Up
Agreements
Pursuant
to “lock-up” agreements, we, our executive officers and directors,
and certain stockholders, have agreed, without the prior written
consent of the representative not to directly or indirectly, offer
to sell, sell, pledge or otherwise transfer or dispose of any of
shares of (or enter into any transaction or device that is designed
to, or could be expected to, result in the transfer or disposition
by any person at any time in the future of) our common stock, enter
into any swap or other derivatives transaction that transfers to
another, in whole or in part, any of the economic benefits or risks
of ownership of shares of our common stock, make any demand for or
exercise any right or cause to be filed a registration statement,
including any amendments thereto, with respect to the registration
of any shares of common stock or securities convertible into or
exercisable or exchangeable for common stock or any other
securities of ours or publicly disclose the intention to do any of
the foregoing, subject to customary exceptions, for a period of six
months after the date of this prospectus in the case of our
directors, executive officers, the Company and any successor of the
Company and certain stockholders.
Discretionary
Accounts
The
underwriters do not intend to confirm sales of the shares of common
stock offered hereby to any accounts over which they have
discretionary authority.
Nasdaq
Capital Market Listing
We
intend to apply to have our common stock listed on the Nasdaq
Capital Market under the symbol “SIGY”. No assurance can be given
that our application will be approved by Nasdaq.
Determination
of Offering Price
The public offering price of the Class A Units and Class B Units
that we are offering was negotiated between us and the
underwriters. Factors considered in determining the public offering
price of the Class A Units and Class B Units include the history
and prospects of the Company, the stage of development of our
business, our business plans for the future and the extent to which
they have been implemented, an assessment of our management,
general conditions of the securities markets at the time of the
offering and such other factors as were deemed relevant.
Price
Stabilization, Short Positions and Penalty Bids
In
connection with this offering, the underwriters may engage in
transactions that stabilize, maintain or otherwise affect the price
of our common stock and Series A Warrants. Specifically, the
underwriters may over-allot in connection with this offering by
selling more shares of common stock and/or Series A Warrants than
are set forth on the cover page of this prospectus. This creates a
short position in our common stock or Series A Warrants for its own
account. The short position may be either a covered short position
or a naked short position. In a covered short position, the number
of shares of common stock and/or Series A Warrants over-allotted by
the underwriters is not greater than the number of shares of common
stock and/or Series A Warrants that they may purchase in the
over-allotment option. In a naked short position, the number of
shares of common stock and/or Series A Warrants involved is greater
than the number of shares common stock in the over-allotment
option. To close out a short position, the underwriters may elect
to exercise all or part of the over-allotment option. The
underwriters may also elect to stabilize the price of our common
stock and/or Series A Warrants or reduce any short position by
bidding for, and purchasing, common stock and/or Series A Warrants
in the open market.
The
underwriters may also impose a penalty bid. This occurs when a
particular underwriter or dealer repays selling concessions allowed
to it for distributing securities in this offering because the
underwriter repurchases the securities in stabilizing or short
covering transactions.
Finally,
the underwriters may bid for, and purchase, securities in market
making transactions, including “passive” market making transactions
as described below.
These
activities may stabilize or maintain the market price of our common
stock and/or Series A Warrants at a price that is higher than the
price that might otherwise exist in the absence of these
activities. The underwriters are not required to engage in these
activities, and may discontinue any of these activities at any time
without notice. These transactions may be effected on the national
securities exchange on which our shares of common stock are traded,
in the over-the-counter market, or otherwise.
Indemnification
We
have agreed to indemnify the underwriters against liabilities
relating to this offering arising under the Securities Act and the
Exchange Act, liabilities arising from breaches of some or all of
the representations and warranties contained in the underwriting
agreement, and to contribute to payments that the underwriters may
be required to make for these liabilities.
Affiliations
The
underwriters and their respective affiliates are full service
financial institutions engaged in various activities, which may
include securities trading, commercial and investment banking,
financial advisory, investment management, investment research,
principal investment, hedging, financing and brokerage activities.
The underwriters and their affiliates may from time to time in the
future engage with us and perform services for us or in the
ordinary course of their business for which they will receive
customary fees and expenses. In the ordinary course of their
various business activities, the underwriters and their respective
affiliates may make or hold a broad array of investments and
actively trade debt and equity securities (or related derivative
securities) and financial instruments (including bank loans) for
their own account and for the accounts of their customers, and such
investment and securities activities may involve securities and/or
instruments of us. The underwriters and their respective affiliates
may also make investment recommendations and/or publish or express
independent research views in respect of these securities or
instruments and may at any time hold, or recommend to clients that
they acquire, long and/or short positions in these securities and
instruments.
Conflicts
of Interest
We
are not under any contractual obligation to engage any of the
underwriters to provide any services for us after this offering and
have no present intent to do so. However, any of the underwriters
may introduce us to potential target businesses or assist us in
raising additional capital in the future. If any of the
underwriters provide services to us after this offering, we may pay
such underwriter fair and reasonable fees that would be determined
at that time in an arm’s length negotiation; provided that no
agreement will be entered into with any of the underwriters and no
fees for such services will be paid to any of the underwriters
prior to the date that is 90 days from the date of this prospectus,
unless FINRA determines that such payment would not be deemed
underwriter’s compensation in connection with this offering and we
may pay the underwriters of this offering or any entity with which
they are affiliated a finder’s fee or other compensation for
services rendered to us in connection with the completion of a
business combination.
Electronic
Distribution
This
prospectus in electronic format may be made available on websites
or through other online services maintained by one or more of the
underwriters, or by their affiliates. Other than this prospectus in
electronic format, the information on any underwriter’s website and
any information contained in any other website maintained by an
underwriter is not part of this prospectus or the registration
statement of which this prospectus forms a part, has not been
approved and/or endorsed by us or any underwriter in its capacity
as underwriter, and should not be relied upon by
investors.
Selling
Restrictions
No
action has been taken in any jurisdiction (except in the United
States) that would permit a public offering of our securities, or
the possession, circulation or distribution of this prospectus or
any other material relating to us or our securities in any
jurisdiction where action for that purpose is required.
Accordingly, our securities may not be offered or sold, directly or
indirectly, and this prospectus or any other offering material or
advertisements in connection with our securities may be distributed
or published, in or from any country or jurisdiction, except in
compliance with any applicable rules and regulations of any such
country or jurisdiction.
European Economic Area and United Kingdom
In
relation to each Member State of the European Economic Area and the
United Kingdom (each a “Relevant State”), no securities have been
offered or will be offered pursuant to the offering to the public
in that Relevant State prior to the publication of a prospectus in
relation to the securities which have been approved by the
competent authority in that Relevant State or, where appropriate,
approved in another Relevant State and notified to the competent
authority in that Relevant State, all in accordance with the
Prospectus Regulation, except that offers of shares may be made to
the public in that Relevant State at any time under the following
exemptions under the Prospectus Regulation:
|
● |
to
legal entities which are qualified investors as defined under the
Prospectus Regulation; |
|
|
|
|
● |
by
the underwriters to fewer than 150 natural or legal persons (other
than qualified investors as defined in the Prospectus Regulation),
subject to obtaining the prior consent of the representatives of
the underwriters for any such offer; or |
|
|
|
|
● |
in
any other circumstances falling within Article 1(4) of the
Prospectus Regulation, |
provided
that no such offer of securities shall result in a requirement for
us or any underwriter to publish a prospectus pursuant to Article 3
of the Prospectus Regulation or supplement a prospectus pursuant to
Article 23 of the Prospectus Regulation.
For
the purposes of this provision, the expression an “offer of
securities to the public” in relation to any securities in any
Relevant State means the communication in any form and by any means
of sufficient information on the terms of the offer and any
securities to be offered so as to enable an investor to decide to
purchase or subscribe for our securities, and the expression
“Prospectus Regulation” means Regulation (EU) 2017/1129.
United Kingdom
This
prospectus has only been communicated or caused to have been
communicated and will only be communicated or caused to be
communicated as an invitation or inducement to engage in investment
activity (within the meaning of Section 21 of the Financial
Services and Markets Act of 2000, or the FSMA) as received in
connection with the issue or sale of our securities in
circumstances in which Section 21(1) of the FSMA does not apply to
us. All applicable provisions of the FSMA will be complied with in
respect to anything done in relation to our securities in, from or
otherwise involving the United Kingdom.
Canada
The
securities may be sold only to purchasers purchasing, or deemed to
be purchasing, as principal that are accredited investors, as
defined in National Instrument 45-106 Prospectus Exemptions or
subsection 73.3(1) of the Securities Act (Ontario), and are
permitted clients, as defined in National Instrument 31-103
Registration Requirements, Exemptions and Ongoing Registrant
Obligations. Any resale of the securities must be made in
accordance with an exemption from, or in a transaction not subject
to, the prospectus requirements of applicable securities
laws.
Securities
legislation in certain provinces or territories of Canada may
provide a purchaser with remedies for rescission or damages if this
prospectus (including any amendment thereto) contains a
misrepresentation, provided that the remedies for rescission or
damages are exercised by the purchaser within the time limit
prescribed by the securities legislation of the purchaser’s
province or territory. The purchaser should refer to any applicable
provisions of the securities legislation of the purchaser’s
province or territory for particulars of these rights or consult
with a legal advisor.
Pursuant
to section 3A.3 of National Instrument 33-105 Underwriting
Conflicts, or NI 33-105, the underwriters are not required to
comply with the disclosure requirements of NI 33-105 regarding
underwriter conflicts of interest in connection with this
offering.
Hong Kong
The
securities may not be offered or sold by means of this document or
any other document other than (i) in circumstances that do not
constitute an offer or invitation to the public within the meaning
of the Companies Ordinance (Cap.32, Laws of Hong Kong) or the
Securities and Futures Ordinance (Cap.571, Laws of Hong Kong), or
(ii) to “professional investors” within the meaning of the
Securities and Futures Ordinance (Cap.571, Laws of Hong Kong) and
any rules made thereunder, or (iii) in other circumstances that do
not result in the document being a “prospectus” within the meaning
of the Companies Ordinance (Cap.32, Laws of Hong Kong), and no
advertisement, invitation or document relating to the shares may be
issued or may be in the possession of any person for the purpose of
issue (in each case whether in Hong Kong or elsewhere), that is
directed at, or the contents of which are likely to be accessed or
read by, the public in Hong Kong (except if permitted to do so
under the laws of Hong Kong) other than with respect to the shares
which are or are intended to be disposed of only to persons outside
Hong Kong or only to “professional investors” within the meaning of
the Securities and Futures Ordinance (Cap.571, Laws of Hong Kong)
and any rules made thereunder.
People’s Republic of China
This
prospectus has not been and will not be circulated or distributed
in the PRC, and the securities may not be offered or sold, and will
not be offered or sold to any person for re-offering or resale,
directly or indirectly, to any resident of the PRC except pursuant
to applicable laws and regulations of the PRC.
Singapore
This
prospectus has not been registered as a prospectus with the
Monetary Authority of Singapore. Accordingly, this prospectus and
any other document or material in connection with the offer or
sale, or invitation for subscription or purchase, of the securities
may not be circulated or distributed, nor may the securities be
offered or sold, or be made the subject of an invitation for
subscription or purchase, whether directly or indirectly, to
persons in Singapore other than (i) to an institutional investor
under Section 274 of the Securities and Futures Act, Chapter 289 of
Singapore, or the SFA, (ii) to a relevant person, or any person
pursuant to Section 275(1A), and in accordance with the conditions,
specified in Section 275 of the SFA, or (iii) otherwise pursuant
to, and in accordance with the conditions of, any other applicable
provision of the SFA.
South Korea
The
securities may not be offered, sold and delivered directly or
indirectly, or offered or sold to any person for re-offering or
resale, directly or indirectly, in South Korea or to any resident
of South Korea except pursuant to the applicable laws and
regulations of South Korea, including the Financial Investment
Services and Capital Markets Act and the Foreign Exchange
Transaction Law and the decrees and regulations thereunder. The
securities have not been registered with the Financial Services
Commission of South Korea for public offering in South Korea.
Furthermore, the securities may not be re-sold to South Korean
residents unless the purchaser of the securities complies with all
applicable regulatory requirements (including but not limited to
government approval requirements under the Foreign Exchange
Transaction Law and its subordinate decrees and regulations) in
connection with their purchase.
Taiwan
The
securities have not been and will not be registered or filed with,
or approved by, the Financial Supervisory Commission of Taiwan
pursuant to relevant securities laws and regulations and may not be
offered or sold in Taiwan through a public offering or in
circumstances which constitute an offer within the meaning of the
Securities and Exchange Act of Taiwan or relevant laws and
regulations that require a registration, filing or approval of the
Financial Supervisory Commission of Taiwan. No person or entity in
Taiwan has been authorized to offer or sell the securities in
Taiwan.
CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS
Other
than compensation arrangements, we have not entered into any
related party transaction with a member of the immediate family or
the foregoing persons of any director, executive officer, or holder
of more than 5% of our capital stock during the last two completed
fiscal years. Compensation arrangements, including employment
agreements, for our directors and named executive officers are
described elsewhere in “Executive Compensation—Agreements with
Executive Officers.”
Indemnification
Agreements
We
have entered or intend to enter into indemnification agreements
with each of our directors and executive officers. These
agreements, among other things, will require us to indemnify each
individual to the fullest extent permitted by Delaware law,
including indemnification of expenses such as attorneys’ fees,
judgments, fines and settlement amounts incurred by the individual
in any action or proceeding, including any action or proceeding by
or in right of us, arising out of the person’s services as a
director, officer or other employee.
DESCRIPTION OF SECURITIES
The
following description of our capital stock is a summary and is
qualified in its entirety by the provisions of our Certificate of
Incorporation, which has been filed as an exhibit to our
registration statement of which this prospectus is a
part.
Common
Stock
We
are authorized to issue 1,000,000,000 shares of common stock, par
value $0.0001, of which 37,238,656 shares are issued and
outstanding as of June 22, 2022. Each holder of shares of our
common stock is entitled to one vote for each share held of record
on all matters submitted to the vote of stockholders, including the
election of Directors. The holders of shares of common stock have
no pre-emptive, conversion, subscription or cumulative voting
rights. There is no provision in our Articles of Incorporation or
By-laws that would delay, defer, or prevent a change in control of
our Company.
Securities Offered in this Offering
We are offering ______ Class A Units, each unit consisting of one
share of our common stock and one Series A Warrant to purchase one
share of our common stock and Class B Units, each consisting of
Series C preferred stock and one Series A Warrant. The share of
common stock and accompanying Series A Warrants included in each
Class A Unit will be issued separately and the share of Series B
Preferred Stock and accompanying Series A Warrant will be issued
separately. Class A Units and Class B Unitswill not be issued or
certificated. We are also registering the shares of common stock
included in the Class A Units and the shares of common stock
issuable from time to time upon exercise of the Series A Warrants
included in the Class A Units and Class B Units and Series B
preferred stock offered hereby. The description of our common stock
is set forth above under the heading “—Common Stock.”
Series
B Preferred Stock Issued in this Offering
Our
board of directors shall have designated _____ shares of our
preferred stock as Series B convertible preferred stock (“Series B
preferred stock”), none of which are currently issued and
outstanding. The preferences and rights of the Series B preferred
stock will be as set forth in a Certificate of Designation (the
“Series B Certificate of Designation”) filed as an exhibit to the
registration statement of which this prospectus is a
part.
Pursuant
to a transfer agency agreement between us and Equity Stock
Transfer, as transfer agent, the Series B preferred stock will be
issued in book-entry form and shall initially be represented only
by one or more global certificates deposited with The Depository
Trust Company, or DTC, and registered in the name of Cede &
Co., a nominee of DTC, or as otherwise directed by DTC.
In
the event of a liquidation, the holders of Series B preferred stock
are entitled to participate on an as-converted-to-Common Stock
basis with holders of the Common Stock in any distribution of
assets of the Company to the holders of the Common Stock. The
Series B Certificate of Designation provides, among other things,
that we shall not pay any dividends on shares of Common Stock
(other than dividends in the form of Common Stock) unless and until
such time as we pay dividends on each Series B preferred share on
an as-converted basis. Other than as set forth in the previous
sentence, the Series B Certificate of Designation provides that no
other dividends shall be paid on Series B preferred
stock.
With
certain exceptions, as described in the Series B Certificate of
Designation, the Series B preferred stock have no voting rights.
However, as long as any shares of Series B preferred stock remain
outstanding, the Series B Certificate of Designation provides that
we shall not, without the affirmative vote of holders of a majority
of the then-outstanding Series B preferred stock, (a) alter or
change adversely the powers, preferences or rights given to the
Series B preferred stock or alter or amend the Series B Certificate
of Designation, (b) increase the number of authorized shares of
Series B preferred stock or (c) amend our certificate of
incorporation in any manner that adversely affects the rights of
holders of Series B preferred stock.
Each
Series B preferred share is convertible at any time at the holder’s
option into a number of shares of common stock equal to $5,000
divided by the Series B Conversion Price. The “Series B Conversion
Price” is initially $ and is subject to adjustment for stock
splits, stock dividends, distributions, subdivisions and
combinations. Notwithstanding the foregoing, the Series B
Certificate of Designation further provides that we shall not
effect any conversion of Series B preferred stock, with certain
exceptions, to the extent that, after giving effect to an attempted
conversion, the holder of Series B preferred stock (together with
such holder’s affiliates, and any persons acting as a group
together with such holder or any of such holder’s affiliates) would
beneficially own a number of shares of Common Stock in excess of
4.99% (or, at the election of the holder, 9.99%) of the shares of
our Common Stock then outstanding after giving effect to such
exercise (the “preferred stock Beneficial Ownership Limitation”);
provided, however, that upon notice to the Company, the holder may
increase or decrease the preferred stock Beneficial Ownership
Limitation, provided that in no event shall the preferred stock
Beneficial Ownership Limitation exceed 9.99% and any increase in
the preferred stock Beneficial Ownership Limitation will not be
effective until 61 days following notice of such increase from the
holder to us.
We do
not intend to apply for listing of the Series B preferred stock on
any securities exchange or other trading system.
The following summary of certain terms and provisions of the Series
A Warrants offered hereby is not complete and is subject to, and
qualified in its entirety by the provisions of the form of Series A
Warrant, which is filed as an exhibit to the registration statement
of which this prospectus is a part. Prospective investors should
carefully review the terms and provisions set forth in the form of
Series A Warrant. We do not have a price as of yet so we cannot
disclose the amounts of warrants outstanding following the
offering, and none were available pre-offering. The exercise
price is 110% of the offering price per Class A Unit for the Series
A Warrants.
Exercisability. The Series A Warrants are exercisable
at any time after their original issuance and at any time up to the
date that is five years after their original issuance. The Series A
Warrants will be exercisable, at the option of each holder, in
whole or in part by delivering to us a duly executed exercise
notice and, at any time a registration statement registering the
issuance of the shares of common stock underlying the Series A
Warrants under the Securities Act is effective and available for
the issuance of such shares, or an exemption from registration
under the Securities Act is available for the issuance of such
shares, by payment in full in immediately available funds for the
number of shares of common stock purchased upon such exercise. If a
registration statement registering the issuance of the shares of
common stock underlying the Series A Warrants under the Securities
Act is not effective or available and an exemption from
registration under the Securities Act is not available for the
issuance of such shares, the holder may, in its sole discretion,
elect to exercise the warrant through a cashless exercise, in which
case the holder would receive upon such exercise the net number of
shares of common stock determined according to the formula set
forth in the Series A Warrant. No fractional shares of common stock
will be issued in connection with the exercise of a Series A
Warrant. In lieu of fractional shares, we will pay the holder an
amount in cash equal to the fractional amount multiplied by the
exercise price.
Exercise Limitation. A holder will not have the right to exercise
any portion of the Series A Warrant if the holder (together with
its affiliates) would beneficially own in excess of 9.99% of the
number of shares of our common stock outstanding immediately after
giving effect to the exercise, as such percentage ownership is
determined in accordance with the terms of the Series A
Warrants.
Exercise Price. The exercise price per whole share of
common stock purchasable upon exercise of the Series A Warrants is
$___ per share or 110% of the public offering price of the Class A
Units. The exercise price is subject to appropriate adjustment in
the event of certain stock dividends and distributions, stock
splits, stock combinations, reclassifications or similar events
affecting our common stock and also upon any distributions of
assets, including cash, stock or other property to our
stockholders.
Transferability. Subject to applicable laws, the Series
A Warrants may be offered for sale, sold, transferred or assigned
without our consent.
Exchange Listing. There is no established trading
market for the Series A Warrants and we do not expect a market to
develop. In addition, we do not intend to apply for the listing of
the Series A Warrants on any national securities exchange or other
trading market. Without an active trading market, the liquidity of
the Series A Warrants will be limited.
Warrant Agent. The Series A Warrants will be issued in registered
form under a warrant agency agreement between VStock Transfer, LLC,
as warrant agent, and us. The Series A Warrants shall initially be
represented only by one or more global warrants deposited with the
warrant agent, as custodian on behalf of The Depository Trust
Company (DTC) and registered in the name of Cede & Co., a
nominee of DTC, or as otherwise directed by DTC.
Fundamental Transactions. In the event of a fundamental
transaction, as described in the Series A Warrants and generally
including any reorganization, recapitalization or reclassification
of our common stock, the sale, transfer or other disposition of all
or substantially all of our properties or assets, our consolidation
or merger with or into another person, the acquisition of more than
50% of our outstanding common stock, or any person or group
becoming the beneficial owner of 50% of the voting power
represented by our outstanding common stock, the holders of the
warrants will be entitled to receive upon exercise of the Series A
Warrants the kind and amount of securities, cash or other property
that the holders would have received had they exercised the
warrants immediately prior to such fundamental transaction.
Rights as a Stockholder. Except as otherwise provided
in the warrants or by virtue of such holder’s ownership of shares
of our common stock, the holder of a Series A Warrant does not have
the rights or privileges of a holder of our common stock, including
any voting rights, until the holder exercises the Series A
Warrant.
Governing Law. The Series A Warrants and the warrant agency
agreement are governed by New York law.
Warrants
and Options
During
2020, in conjunction with the sale and issuance of Original Issue
Discount Senior Convertible Debentures (“Notes”), the Company
issued warrants to purchase an aggregate of 1,621,730 shares of the
Company’s common stock with an exercise price of $0.59 and vest
over a period of five years. On February 19, 2021, a noteholder
exercised 70,510 warrants pursuant to the cashless exercise
provision of the warrant agreement into 57,147 common shares. In
addition, the Company issued warrants to purchase an aggregate of
4,113,083 shares of the Company’s common stock with an exercise
price of $0.14 and vest over a period of five years.
In
February and April 2021, in conjunction with the sale and issuance
of Notes, the Company issued warrants to purchase an aggregate of
386,255 shares of the Company’s common stock with an exercise price
of $1.20 and vest over a period of five years.
On
May 10, 2021, the Company closed a private placement to accredited
investors that resulted in the issuance of 1,172,000 warrants to
purchase an aggregate of 1,172,000 shares of the Company’s common
stock with an exercise price of $1.75 and vest over a period of
five years.
On
October 20, 2021, the Company entered into a securities purchase
agreement with an accredited investor that resulted in the issuance
of 320,000 shares of common stock and warrants to purchase an
aggregate of 320,000 shares of the Company’s common stock for total
proceeds totaling $400,000. For each share purchased, the investor
received a five-year warrant to purchase one share of common stock
at $1.25 per share.
On
October 22, 2021, in exchange for the extension of Notes, the
Company issued a noteholder five-year warrants to purchase an
aggregate of 450,000 shares of the Company’s common stock at an
exercise price of $1.00 per share
Security
Holders
As of
May 5, 2022, there were 37,238,656 common shares issued
and outstanding, which were held by approximately 72 stockholders
of record. We do not know the number of our beneficial shareholders
or shareholders holding shares through their broker(s) in “street
name.”
Non-cumulative
Voting
Holders
of shares of our common stock do not have cumulative voting rights,
which means that the holders of more than 50% of the outstanding
shares, voting for the election of directors, can elect all of the
directors to be elected, if they so choose, and, in such event, the
holders of the remaining shares will not be able to elect any of
our directors.
Transfer
Agent
We
have engaged VStock Transfer, LLC as the Company’s transfer agent
to serve as agent for shares of our common stock. Our transfer
agent’s contact information is as follows:
VStock
Transfer, LLC
18
Lafayette Place
Woodmere,
NY 11598
Phone:
(212) 828-8436
SHARES ELIGIBLE FOR FUTURE SALE
Prior
to this offering, there was no public market for our common stock.
We cannot predict the effect, if any, that market sales of shares
of our common stock or the availability of shares of our common
stock for sale will have on the market price of our common stock.
Sales of substantial amounts of our common stock in the public
market could adversely affect the market prices of our common stock
and could impair our future ability to raise capital through the
sale of our equity securities.
We
have an aggregate of 37,295,803 shares of our common stock
outstanding as of December 31, 2021 (prior to the Offering). All of
the xx,000 shares to be registered in this Offering will be freely
tradable without restriction or further registration under the
Securities Act, unless those shares are purchased by our
affiliates, as that term is defined in Rule 144 under the
Securities Act.
Rule
144
Rule
144 allows for the public resale of restricted and control
securities if a number of conditions are met. Meeting the
conditions includes holding the shares for a certain period of
time, having adequate current information, looking into a trading
volume formula, and filing a notice of the proposed sale with the
SEC.
In
general, a person who has beneficially owned restricted shares of
our common stock for at least six months would be entitled to sell
their securities provided that (I) such person is not deemed to
have been one of our affiliates at the time of, or at any time
during the 90 days preceding, a sale, (ii) we are subject to the
Exchange Act periodic reporting requirements and have filed all
required reports for a least 90 days before the sale, and (iii) we
are not and have never been a shell company (a company having no or
nominal operations and either (1) no or nominal assets, (2) assets
consisting solely of cash and cash equivalents, or (3) assets
consisting of any amount of cash and cash equivalents and nominal
other assets). If we ever become a shell company, Rule 144 would be
unavailable until one year following the date we cease to be a
shell company and file Form 10 information with the SEC ceasing to
be a shell company, provided that we are then subject to the
reporting requirements of section 13 or 15(d) of the Exchange Act
and have filed all reports and other materials required to be filed
by section 13 or 15(d) of the Exchange Act during the preceding 12
months (or for such shorter period that we were required to file
such reports and materials), other than Form 8-K
reports.
Persons
who have beneficially owned restricted shares of our common stock
for at least six months but who are our affiliates at the time of,
or any time during the 90 days preceding, a sale, would be subject
to additional restrictions, by which such person would be entitled
to sell within any three-month period only a number of securities
that does not exceed the greater of either of the
following:
|
● |
1% of
the number of shares of our common stock then outstanding, which
would equal approximately 388,000 shares, based on the number of
shares of our common stock outstanding as of December 31, 2021
(37,295,803), and assuming the 1,500,000 shares being registered in
the Offering are issued and sold; or |
|
● |
The
average weekly trading volume of our common stock during the four
calendar weeks preceding the filing of a notice on Form 144 with
respect to the sale. |
At
the expiration of the one-year holding period, a person who was not
one of our affiliates at any time during the three months preceding
a sale would be entitled to sell an unlimited number of shares of
our common stock without restriction. A person who was one of our
affiliates at any time during the three months preceding a sale
would remain subject to the volume restrictions described
above.
Sales
under the Rule 144 by our affiliates or persons selling shares on
behalf of our affiliates are also subject to certain manner of sale
provisions and notice requirements and to the availability of
current public information about us.
LEGAL MATTERS
The
validity of the securities offered by this prospectus will be
passed upon by Jolie Kahn, Esq., New York, New York. Blank Rome
LLP, New York, New York is acting as counsel for the underwriters
in this offering.
EXPERTS
Except
as disclosed herein, no expert or counsel named in this prospectus
as having prepared or certified any part of this prospectus or
having given an opinion upon the validity of the securities being
registered or upon other legal matters in connection with the
registration or offering of the common stock was employed on a
contingency basis or had, or is to receive, in connection with the
offering, a substantial interest, directly or indirectly, in the
registrant or its subsidiary. Nor was any such person connected
with the Company or any of its parents, or subsidiaries, as a
promoter, managing or principal underwriter, voting trustee,
director, officer or employee.
The
financial statements of Sigyn Therapeutics, Inc. as of December 31,
2021 and 2020, have been included herein in reliance on the reports
of Paris Kreit & Chiu, an independent registered public
accounting firm, given on the authority of that firm as experts in
auditing and accounting.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
During
the two most recent fiscal years ended December 31, 2021 and 2020,
there have been no changes in or disagreements with our independent
registered public accounting firm on any matter of accounting
principles or practices, financial statement disclosure, or
auditing scope or procedure, which disagreements if not resolved to
the satisfaction of the Former Accounting Firm would have caused
them to make reference thereto in their report on the financial
statements.
WHERE YOU CAN FIND MORE INFORMATION
We
have filed a registration statement on Form S-1 under the
Securities Act with the SEC for the securities offered hereby. This
prospectus, which constitutes a part of the registration statement,
does not contain all of the information set forth in the
registration statement or the exhibits and schedules which are part
of the registration statement. For additional information about our
securities, and us we refer you to the registration statement and
the accompanying exhibits and schedules. Statements contained in
this prospectus regarding the contents of any contract or any other
documents to which we refer are not necessarily complete. In each
instance, reference is made to the copy of the contract or document
filed as an exhibit to the registration statement, and each
statement is qualified in all respects by that reference. Our
filings, including the registration statement, will also be
available to you on the Internet web site maintained by the SEC at
http://www.sec.gov.
SIGYN THERAPEUTICS, INC.
Index
to Financial Statements
CONTENTS
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To
the Board of Directors and
Stockholders
of Sigyn Therapeutics, Inc.
Opinion on the Financial Statements
We
have audited the accompanying consolidated balance sheets of Sigyn
Therapeutics, Inc. (the Company) as of December 31, 2021 and 2020,
and the related consolidated statements of operations, changes in
shareholders’ equity, and cash flows for each of the two years
ended December 31, 2021, and the related notes (collectively
referred to as the financial statements). In our opinion, the
financial statements present fairly, in all material respects, the
financial position of the Company as of December 31, 2021 and 2020,
and the results of its operations and its cash flows for each of
the two years in the period ended December 31, 2021, in conformity
with accounting principles generally accepted in the United States
of America.
The Company’s Ability to Continue as a 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 financial statements, the Company has
suffered recurring losses from operations, has a net capital
deficiency, and negative cash flows from operating activities,
therefore, the Company has stated that substantial doubt exists
about its ability to continue as a going concern. Management’s
plans in regard to these matters are also described in Note 2. The
financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
Basis for Opinion
These
financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on these
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 audit to
obtain reasonable assurance about whether the 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 its 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 entity’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 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 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 financial
statements. We believe that our audits provide a reasonable basis
for our opinion.
Critical Audit Matters
The
critical audit matters communicated below are matters arising from
the current period audit of the financial statements that were
communicated or required to be communicated to the audit committee
and that: (1) relate to accounts or disclosures that are material
to the financial statements and (2) involved our especially
challenging, subjective, or complex judgments. The communication of
critical audit matters does not alter in any way our opinion on the
financial statements, taken as a whole, and we are not, by
communicating the critical audit matters below, providing separate
opinions on the critical audit matters or on the accounts or
disclosures to which they relate.
Going
Concern
As
described further in Note 2 to the consolidated financial
statements, the Company has incurred losses each year from
inception through December 31, 2021 and expects to incur additional
losses in the future.
We
determined the Company’s ability to continue as a going concern is
a critical audit matter due to the estimation and uncertainty
regarding the Company’s future cash flows and the risk of bias in
management’s judgments and assumptions in estimating these cash
flows.
Our
audit procedures related to the Company’s assertion on its ability
to continue as a going concern included the following, among
others:
We
reviewed the Company’s working capital and liquidity ratios and
forecasted revenue, operating expenses, and uses and sources of
cash used in management’s assessment of whether the Company has
sufficient liquidity to fund operations for at least one year from
the financial statement issuance date. This testing included
inquiries with management, comparison of prior period forecasts to
actual results, consideration of positive and negative evidence
impacting management’s forecasts, the Company’s financing
arrangements in place as of the report date, market and industry
factors and consideration of the Company’s relationships with its
financing partners.
Inventory
Valuation
As
described in Note 3 to the consolidated financial statements, based
on the significant advancement of Sigyn Therapy, the Company
decided in the 4th quarter of 2021 to assess the value of retail
business operations that were a focus of the Company prior to the
merger transaction consummated on October 19, 2020. Related to this
assessment, management determined the wholesale liquidation value
of its sapphire gem inventory to be 5-10% of the previously
reported retail value, based on communications with certified
gemologists, the variance between retail and wholesale valuations,
and current market conditions. As a result, the Company has valued
the inventory at $50,000 and recorded an impairment of assets of
$536,047 in the year ended December 31, 2021 and is classified in
other expenses in the Consolidated Statements of
Operations.
We
evaluated and tested the certified gemologists inventory valuation
report and subsequent company communications with this
expert.
Paris Kreit & Chiu CPA LLP
(formerly
known as Benjamin & Ko)
We
have served as the Company’s auditor since 2021.
New York, New York
March
21, 2022
SIGYN
THERAPEUTICS, INC.
CONSOLIDATED
BALANCE SHEETS
See
accompanying notes to consolidated financial statements
SIGYN
THERAPEUTICS, INC.
CONSOLIDATED
STATEMENTS OF OPERATIONS
See
accompanying notes to consolidated financial statements
SIGYN
THERAPEUTICS, INC.
CONSOLIDATED
STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
See
accompanying notes to consolidated financial statements
SIGYN
THERAPEUTICS, INC.
CONSOLIDATED
STATEMENTS OF CASH FLOWS