Quarterly Report (10-q)

Date : 10/02/2018 @ 3:35PM
Source : Edgar (US Regulatory)
Stock : Start Scientific Inc (PK) (STSC)
Quote : 0.25  0.0 (0.00%) @ 12:52PM

Quarterly Report (10-q)

SECURITIES AND EXCHANGE COMMISSION

 

Washington, D.C. 20549

______________________

 

FORM 10-Q

 

[ X ] Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the quarter ended June 30, 2018

 

OR

 

[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the transition period from __________ to ___________

 

Commission file number: 000-52227

 

START SCIENTIFIC, INC.

(Name of Small Business Issuer in Its Charter)

 

Delaware   20-4910418

(State or Other Jurisdiction

of Incorporation or Organization)

 

(IRS Employer

Identification No.)

     
521 Wilshire Blvd., Suite 101    
Oklahoma City, OK   73116
(Address of Principal Executive Offices)   (Zip Code)

 

 

 

  (210) 758-5898  
  Issuer’s Telephone Number, Including Area Code  
     

 

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

 

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

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [ ] No [ X ]

 

     

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

 

Large Accelerated Filer [  ] Non-Accelerated Filer [  ]

Accelerated Filer [ ]

Emerging Growth Company [X]

Smaller reporting company [X]

 

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

 

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

 

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS

 

Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13, or 15(d) of the Exchange Act of 1934 after the distribution of securities under a plan confirmed by a court. Yes [ ] No [ ]

 

APPLICABLE ONLY TO CORPORATE ISSUERS

 

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date. As of October 1, 2018, the Company had issued and outstanding 745,024,353 shares of common stock.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  2  

PART I

 

FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS REQUIRED BY FORM 10-Q

 

The Financial Statements of the Company are Prepared as of June 30, 2018 and December 31, 2017, and for the Three and Six Months Ended June 30, 2018 and 2017.

 

 

 

CONTENTS

 

Balance Sheets (Unaudited)

 

4
Statements of Operations (Unaudited)

 

5
Statements of Cash Flows (Unaudited)

 

6
Notes to the Financial Statements (Unaudited)

 

7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  3  

 

START SCIENTIFIC, INC.
Balance Sheets
(Unaudited)
 
ASSETS
    June 30,   December 31,
    2018   2017
         
TOTAL ASSETS   $ —       $ —    
                 
LIABILITIES AND STOCKHOLDERS' DEFICIT
                 
CURRENT LIABILITIES                
                 
Accounts payable   $ 28,758     $ 17,799  
Accrued expenses     798,069       766,604  
Accounts payable and accrued liabilites - related parties     779,469       771,618  
Convertible notes payable     87,715       89,215  
Notes payable     586,510       567,010  
Notes payable - related parties     92,770       90,393  
Derivative liability     228,479       201,643  
                 
Total Current Liabilities     2,601,770       2,504,282  
                 
TOTAL LIABILITIES     2,601,770       2,504,282  
                 
STOCKHOLDERS' DEFICIT                
                 
Preferred stock, $0.00001 par value; 100 shares authorized,                
 100 and 100 issued and outstanding, respectively     —         —    
Common stock, $0.00001 par value; 5,000,000,000 shares authorized,                
 745,024,353 and 652,899,353 shares issued and outstanding, respectively     7,450       6,529  
Additional paid-in-capital     14,335,139       14,331,578  
Accumulated deficit     (16,944,359 )     (16,842,389 )
                 
Total Stockholders' Deficit     (2,601,770 )     (2,504,282 )
                 
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT   $ —       $ —    
                 
The accompanying notes are an integral part of these unaudited financial statements

 

 

 

 

 

  4  

 

START SCIENTIFIC, INC.
Statements of Operations
(Unaudited)
 
    For the Three Months Ended   For the Six Months Ended
    June 30,   June 30,
    2018   2017   2018   2017
                 
                 
NET REVENUES   $ —       $ —       $ —       $ —    
                                 
OPERATING EXPENSES                                
                                 
Professional fees     20,192       20       36,952       620  
                                 
Total Operating Expenses     20,192       20       36,952       620  
                                 
LOSS FROM OPERATIONS     (20,192 )     (20 )     (36,952 )     (620 )
                                 
OTHER INCOME (EXPENSES)                                
                                 
Gain (Loss) on change in fair value of derivative liability     (51,901 )     (6,627 )     (26,836 )     76,122  
Interest expense - related parties     (1,037 )     (516 )     (2,100 )     (1,027 )
Interest expense (including amortization of debt discount of $-0-, $-0-, $-0- and $1,183, respectively)     (17,924 )     (18,235 )     (36,082 )     (37,614 )
                                 
Total Other Income (Expenses)     (70,862 )     (25,378 )     (65,018 )     37,481  
                                 
INCOME (LOSS) BEFORE INCOME TAXES     (91,054 )     (25,398 )     (101,970 )     36,861  
                                 
INCOME TAX EXPENSE     —         —         —         —    
                                 
NET INCOME (LOSS)   $ (91,054 )   $ (25,398 )   $ (101,970 )   $ 36,861  
                                 
BASIC AND DILUTED:                                
Net income (loss) per common share   $ (0.00 )   $ (0.00 )   $ (0.00 )   $ 0.00  
                                 
Weighted average shares outstanding     745,024,353       512,099,353       744,515,375       512,099,353  
                                 
The accompanying notes are an integral part of these unaudited financial statements

 

 

 

 

  5  

 

START SCIENTIFIC, INC.
Statements of Cash Flows
(Unaudited)
 
    For the Six Months Ended
    June 30,
    2018   2017
         
CASH FLOWS FROM OPERATING ACTIVITIES:                
                 
Net income (loss)   $ (101,970 )   $ 36,861  
Adjustments to reconcile net loss to net                
 cash used by operating activities:                
Loss (Gain) on change in fair value of derivative liability     26,836       (76,122 )
Amortization of debt discounts     —         1,183  
Changes in operating assets and liabilities:                
Accounts payable and accrued liabilities - related parties     7,851       2,138  
Accounts payable and accrued expenses     45,406       33,840  
                 
Net Cash Used by Operating Activities     (21,877 )     (2,100 )
                 
CASH FLOWS FROM INVESTING ACTIVITIES:     —         —    
                 
CASH FLOWS FROM FINANCING ACTIVITIES:                
                 
Proceeds from notes payable     19,500       —    
Proceeds from notes payable - related parties     2,377       2,100  
                 
Net Cash Provided by Financing Activities     21,877       2,100  
                 
NET CHANGE IN CASH AND CASH EQUIVALENTS   $ —       $ —    
                 
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD     —         —    
                 
CASH AND CASH EQUIVALENTS, END OF PERIOD   $ —       $ —    
                 
SUPPLEMENTAL CASH FLOW INFORMATION                
                 
Cash Payments For:                
Interest   $ 1,164     $ —    
Income taxes   $ —       $ —    
                 
Non-cash financing activity:                
Common stock issued for the conversion of accrued interest   $ 2,982     $ —    
Common stock issued for the conversion of convertible notes payable   $ 1,500     $ —    
                 
The accompanying notes are an integral part of these unaudited financial statements

 

  6  

START SCIENTIFIC, INC.

Notes to the Financial Statements

June 30, 2018

(Unaudited)

 

NOTE 1 - BASIS OF FINANCIAL STATEMENT PRESENTATION

 

The accompanying unaudited financial statements have been prepared by Start Scientific, Inc. (the "Company") pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted in accordance with such rules and regulations. The information furnished in the interim financial statements includes normal recurring adjustments and reflects all adjustments, which, in the opinion of management, are necessary for a fair presentation of such financial statements. Although management believes the disclosures and information presented are adequate to make the information not misleading, it is suggested that these interim financial statements be read in conjunction with the Company’s audited financial statements and notes thereto included in its Form 10-K for the year ended December 31, 2017. Operating results for the six months ended June 30, 2018 are not necessarily indicative of the results to be expected for the year ending December 31, 2018.

 

NOTE 2 - GOING CONCERN CONSIDERATIONS

 

The accompanying condensed financial statements have been prepared using generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. As reported in its Annual Report on Form 10-K for the year ended December 31, 2017, the Company has incurred operating losses of $16,842,389 from inception of the Company through December 31, 2017. The Company’s accumulated deficit at June 30, 2018 was $16,944,359 and had a working capital deficit, continued losses, and negative cash flows from operations. These factors combined, raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans to address and alleviate these concerns are as follows:

 

The Company’s management continues to develop a strategy of exploring all options available to it so that it can develop successful operations and have sufficient funds, therefore, as to be able to operate over the next twelve months. The Company is attempting to improve these conditions by way of financial assistance through issuances of additional equity and by generating revenues through sales of products and services. No assurance can be given that funds will be available, or, if available, that it will be on terms deemed satisfactory to management. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually attain profitable operations. The accompanying condensed financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result from the outcome of these uncertainties.

 

NOTE 3 - ACCOUNTS PAYABLE AND ACCRUED LIABILITIES - RELATED PARTIES

 

Accounts payable and accrued liabilities – related parties consisted of the following:

 

    June 30,
2018
  December 31, 2017
Accounts payable   $ 592,507     $ 586,757  
Accrued interest     104,808       102,707  
Misc. loans and advances     82,154       82,154  
Total   $ 779,469     $ 771,618  

  7  

START SCIENTIFIC, INC.

Notes to the Financial Statements

June 30, 2018

(Unaudited)

 

NOTE 4 - CONVERTIBLE NOTES PAYABLE

 

Convertible notes payable consisted of the following:

 

    June 30,
2018
  December 31,
2017
Convertible note payable to an entity, interest at 8%, due on February 25, 2016, in default, (A)   $ 23,630     $ 23,630  
Convertible note payable to an entity, interest at 10%, due on April 29, 2016, in default. The note carries a 24% interest rate in the event of default. (B)     43,185       43,185  
Convertible note payable to an entity, interest at 10%, due on demand (C)     20,900       22,400  
 Total Notes Payable     87,715       89,215  
Less: Current Portion     (87,715 )     (89,215 )
 Long-Term Notes Payable   $ —       $ —    

 

(A) On February 25, 2015, the Company issued a promissory note in the original principal amount of $52,500 to a lender. The Note matured on February 25, 2016 and carried an interest rate of 8% per annum. The Note is due and payable in full unless converted partially or in its entirety upon the election of the lender into fully paid and non-assessable shares of common stock of the Company at a 60% discount to the lowest trading price as reported on the OTCQB for the fifteen trading days previous to the conversion date. As of June 30, 2018 and December 31, 2017, the Company owed a balance of $23,630. The derivative liability associated with this convertible note payable is discussed in NOTE 7.

 

(B) On April 29, 2015, the Company issued a promissory note in the original principal amount of $53,500 to a lender. The Note matured on April 29, 2016 and carries an interest rate of 10% per annum. The Note is due and payable in full unless converted partially or in its entirety upon the election of the lender into fully paid and non-assessable shares of common stock of the Company at a 55% discount to the lowest trading price as reported on the OTCQB for the fifteen trading days previous to the conversion date. As of June 30, 2018 and December 31, 2017, the Company owed a balance of $43,185. The derivative liability associated with this convertible note payable is discussed in NOTE 7.

 

(C) On January 12, 2016, the Company issued a promissory note in the original principal amount of $25,000 to an unrelated lender. The Note is due on demand and carries an interest rate of 10% per annum. The Note shall be due and payable in full unless converted partially or in its entirety upon the election of the lender into fully paid and non-assessable shares of common stock of the Company at a conversion price equal to $0.00005. During the six months ended June 30, 2018, $1,500 of the principal balance of the note was converted into 30,000,000 shares of common stock. As of June 30, 2018 and December 31, 2017, the Company owed balances of $20,900 and $22,400, respectively.

 

The Company recognized amortization expense related to the debt discount of $-0- and $1,183 for the six months ended June 30, 2018 and 2017, respectively.

  8  

START SCIENTIFIC, INC.

Notes to the Financial Statements

June 30, 2018

(Unaudited)

 

For the six months ended June 30, 2018 and 2017, the Company recognized interest expense on convertible notes of $3,435 and $3,292, respectively. As of June 30, 2018 and December 31, 2017, the accrued interest payable was $26,820 and $25,294, respectively, which is included in accrued expenses.

 

NOTE 5 - NOTES PAYABLE

 

Notes payable consisted of the following:   June 30,
2018
  December 31,
2017
Note payable to a company, interest at 24% per annum, due on demand, unsecured   $ 32,100     $ 32,100  
Notes payable to individuals, interest at 10% per annum, due on demand, unsecured     15,760       15,760  
Note payable to an individual, default interest at 24% per annum, due on August 27, 2012, unsecured, in default     100,000       100,000  
Notes payable to an individual, interest at 6% per annum, due on July 13, 2013, unsecured, in default     100,000       100,000  
Notes payable to individuals, interest at 8% per annum, due on August 30, 2013 and September 9, 2013, unsecured, in default     300,000       300,000  
Notes payable to an individual, interest at 8% per annum, due on demand, unsecured     38,650       19,150  
 Total Notes Payable     586,510       567,010  
Less: Current Portion     (586,510 )     (567,010 )
 Long-Term Notes Payable   $ —       $ —    

 

Accrued interest at June 30, 2018 and December 31, 2017 was $306,276 and $274,794, respectively, and is included in accrued expenses.

  9  

START SCIENTIFIC, INC.

Notes to the Financial Statements

June 30, 2018

(Unaudited)

 

NOTE 6 - NOTES PAYABLE – RELATED PARTIES

 

Notes payable – related parties consisted of the following:   June 30,
2018
  December 31,
2017
Note payable to a related individual, interest at 24%  per annum, due on demand, unsecured   $ 63,076     $ 62,252  
Note payable to a related individual, interest at 10%  per annum, due on demand, unsecured     16,578       16,578  
Note payable to a related individual, interest at 10%  per annum, due on demand, unsecured     4,145       4,145  
Notes payable to a company, due on demand, unsecured     8,971       7,418  
Total Notes Payable – Related Parties     92,770       90,393  
 Less: Current Portion     (92,770 )     (90,393 )
 Long-Term Notes Payable – Related Parties   $ —       $ —    

 

Accrued interest at June 30, 2018 and December 31, 2017 was $104,808 and $102,707, respectively and is included in accrued liabilities – related parties.

 

NOTE 7 - DERIVATIVE LIABILITY

 

The Company analyzed the convertible notes for derivative accounting consideration under ASC 815, “ Derivatives and Hedging,”  and   determined that the conversion options associated with two of its convertible notes from NOTE 4 above should be classified as a liability since the conversion options became effective at issuance resulting in there being no explicit limit to the number of shares to be delivered upon settlement. 

 

The Company determined its derivative liability to be a Level 2 fair value measurement and used the Black-Scholes pricing model to calculate the fair value as of June 30, 2018 and December 31, 2017. The Black-Scholes model requires six basic data inputs: the exercise or strike price, time to expiration, the risk free interest rate, the current stock price, the estimated volatility of the stock price in the future, and the dividend rate. Changes to these inputs could produce a significantly higher or lower fair value measurement. The fair value of each conversion option is estimated using the Black-Scholes valuation model.

 

  10  

START SCIENTIFIC, INC.

Notes to the Financial Statements

June 30, 2018

(Unaudited)

 

The derivative liability at June 30, 2018 consisted of the following:

 

    Original Note
Face Value
  Derivative Liability
Convertible note payable to an entity, interest at 8%, due on February 25, 2016, in default, (A) from NOTE 4   $ 52,500     $ 114,442  
Convertible note payable to an entity, interest at 10%, due on April 29, 2016, in default, (B) from NOTE 4     53,500       114,037  
Totals   $ 106,000     $ 228,479  

 

The derivative liability at December 31, 2017 consisted of the following:

 

    Original Note
Face Value
  Derivative Liability
Convertible note payable to an entity, interest at 8%, due on February 25, 2016, in default, net of discount of $1,183 (A)   $ 52,500     $ 67,386  
Convertible note payable to an entity, interest at 10%, due on April 29, 2016, in default (B)     53,500       134,257  
Totals   $ 106,000     $ 201,643  

 

The above convertible notes contain variable conversion features based on the future trading price of the Company’s common stock. Therefore, the number of shares of common stock issuable upon conversion of the notes is indeterminate. Due to the variable conversion terms of convertible notes (A) and (B) described in NOTE 4 above, it was determined that there was a derivative liability associated with these notes. The fair values of the derivative liability at June 30, 2018 and December 31, 2017 were $228,479 and $201,643, respectively, which are reported on the balance sheet. The Company recorded a loss on the statement of operations for the six months ended June 30, 2018 of $26,836 on the changes in the fair values of the derivative liability. The Company recorded a gain on the statement of operations for the six months ended June 30, 2017 of $76,122 on the changes in the fair value of the derivative liability.

 

NOTE 8 - EQUITY TRANSACTIONS

 

On January 8, 2016, the Company amended and restated its Certificate of Incorporation to increase the number of authorized shares of common stock to be issued to 5,000,000,000. The par value of both the Preferred Stock and common stock was also changed from $0.0001 to $0.00001.

 

During the year ended December 31, 2017, the Company issued an aggregate of 140,800,000 shares of its common stock for the conversion of various debt instruments in the amount of $48,107.

 

  11  

START SCIENTIFIC, INC.

Notes to the Financial Statements

June 30, 2018

(Unaudited)

 

During the six months ended June 30, 2018, the Company issued an aggregate of 92,125,000 shares of its common stock for the conversion of accrued interest in the amount of $2,982 and conversion of convertible notes of $1,500.

 

NOTE 9 - SUBSEQUENT EVENTS

 

The Company has evaluated subsequent events for the period of June 30, 2018 through the date the financial statements were issued, and concluded there were no other events or transactions occurring during this period that required recognition or disclosure in its financial statements.

 

 

 

  12  

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

 

You should read the following discussion of the Company's financial condition and results of operations in conjunction with the audited financial statements and related notes included in the filing of the company’s latest annual 10-K. This discussion may contain forward-looking statements, including, without limitation, statements regarding our expectations, beliefs, intentions, or future strategies that are signified by the words "expects," "anticipates," "intends," "believes," or similar language. Actual results could differ materially from those projected in the forward looking statements. We caution you that Start Scientific’s business and financial performance is subject to substantial risks and uncertainties.

 

Overview

 

Prior to April 2012, we were a reseller of technology-related hardware and software, including laptops, desktops, networking devices, telecommunication systems and networks, servers and software. In April 2012, in connection with the acquisition of two separate one-fourth (1/4) working interests in certain oil and gas leases located in Yazoo County, Mississippi, our principal business became the exploration, development, and production of oil and gas interests.

Results of Operations

 

Following is our discussion of the relevant items affecting results of operations for the three and six month periods ended June 30, 2018 and 2017.

 

Revenues. The Company generated net revenues of $-0- for the three and six month periods ended June 30, 2018 and 2017.

 

Professional Fees. Professional fees consist of legal and accounting fees associated with the preparation, audits and reviews of the Company’s financial statements. Professional fees for the three months ended June 30, 2018 were $20,192 compared to $20 during the three months ended June 30, 2017. Professional fees for the six months ended June 30, 2018 were $36,952 compared to $620 during the six months ended June 30, 2017. The increase is mainly the result of legal and accounting fees associated with the Company becoming current in its filings with the Securities and Exchange Commission.

 

Other Income (Expense). Other income and expenses for the three months ended June 30, 2018 resulted in net other expense of $70,862 compared to net other expense of $25,378 during the three months ended June 30, 2017. Other income and expenses for the six months ended June 30, 2018 resulted in net other expense of $65,018 compared to net other income of $37,481 during the six months ended June 30, 2017. Other expenses incurred were comprised primarily of interest expenses related to the promissory notes and other liabilities of the Company in the amount of $38,182 during the six months ended June 30, 2018. Also included in this category is the loss on the change in fair value of derivative liability in the amount of $26,836 during the six months ended June 30, 2018. During the six months ended June 30, 2017, the Company incurred interest expenses of $38,641 which includes the amortization of debt discount of $1,183. Also included in this category is the gain on the change in fair value of derivative liability in the amount of $76,122 during the six months ended June 30, 2017.

 

Off-Balance Sheet Arrangements

 

The Company has no off-balance sheet arrangements.

 

  13  

Personnel

 

Start Scientific has project-based contract personnel that we utilize to carry out our business. We utilize contract personnel on a continuous basis, primarily in connection with service contracts which require a high level of specialization for one or more of the service components offered.

 

Liquidity and Capital Resources

 

Since inception, the Company has financed its operations through a series of loans, credit accounts with hardware vendors, and the use of Company credit to procure goods and services. As of June 30, 2018, our primary source of liquidity consisted of $-0- in cash and cash equivalents. We may seek to secure additional debt or equity capital to finance substantial business development initiatives or acquire additional oil and gas resources.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

As a smaller reporting company we are not required to provide this information.

 

ITEM 4. CONTROLS AND PROCEDURES

 

Management’s Report on Disclosure Controls and Procedures

 

The Securities and Exchange Commission defines the term “disclosure controls and procedures” to mean a Company's controls and other procedures of an issuer that are designed to ensure that information required to be disclosed in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. The Company maintains such a system of controls and procedures in an effort to ensure that all information which it is required to disclose in the reports it files under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified under the SEC's rules and forms and that information required to be disclosed is accumulated and communicated to principal executive and principal financial officers to allow timely decisions regarding disclosure.

 

As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of the chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, the chief executive officer and chief financial officer concluded that the disclosure controls and procedures are designed to provide reasonable assurance of achieving the objectives of timely alerting them to material information required to be included in the Company’s periodic SEC reports and of ensuring that such information is recorded, processed, summarized and reported within the time periods specified. The Company’s chief executive officer and chief financial officer also concluded that the disclosure controls and procedures were ineffective as of the end of the period covered by this report to provide reasonable assurance of the achievement of these objectives.

 

  14  

Changes in Internal Control over Financial Reporting

 

There have been no significant changes in our internal controls over financial reporting that occurred during the quarter ended June 30, 2018 that have materially or are reasonably likely to materially affect, our internal controls over financial reporting.

 

 

  15  

PART II

 

OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

None

 

ITEM 1A. RISK FACTORS

 

As a smaller reporting company, we are not required to provide the information required by this item.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES

 

During the six months ended June 30, 2018, the Company issued an aggregate of 92,125,000 shares of its common stock for the conversion of various debt instruments in the amount of $4,482.

 

On November 30, 2017, the Company converted into 31,000,000 shares of common stock, $1,730 of a note, originally issued by the Company on April 29, 2015, which decreased the derivative liability by $30,208.

 

On November 28, 2017, the Company converted into 29,500,000 shares of common stock, $1,610 of a note, originally issued by the Company on April 29, 2015, which decreased the derivative liability by $4,222.

 

On November 16, 2017, the Company converted into 28,000,000 shares of common stock, $370 of a note, originally issued by the Company on April 29, 2015, which decreased the derivative liability by $1,996.

 

On November 8, 2017, the Company converted into 26,800,000 shares of common stock, $322 of a note, originally issued by the Company on April 29, 2015, which decreased the derivative liability by $3,481.

 

On November 3, 2017, the Company converted into 25,500,000 shares of common stock, $270 of a note, originally issued by the Company on April 29, 2015, which decreased the derivative liability by $3,898.

 

Exemption From Registration Claimed

 

All of the sales by the Company of its unregistered securities were made by the Company in reliance upon Section 4(2) of the Securities Act of 1933, as amended (the “1933 Act”). All of the individuals and/or entities listed above that purchased the unregistered securities were all known to the Company and its management, through pre-existing business relationships. All purchasers were provided access to all material information, which they requested, and all information necessary to verify such information and were afforded access to management of the Company in connection with their purchases. All purchasers of the unregistered securities acquired such securities for investment and not with a view toward distribution, acknowledging such intent to the Company. All certificates or agreements representing such securities that were issued contained restrictive legends, prohibiting further transfer of the certificates or agreements representing such securities, without such securities either being first registered or otherwise exempt from registration in any further resale or disposition.

  16  

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

None.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

None.

 

ITEM 5. OTHER INFORMATION

 

Not applicable.

 

ITEM 6. EXHIBITS:

 

The following documents are filed as exhibits to this Form 10-Q:

 

INDEX TO EXHIBITS

 

 

Exhibit

Number

 

 

Title of Document

3.1  

Certificate of Incorporation of Start Scientific, Inc., a Delaware corporation.(1)

 

3.2  

Bylaws of Start Scientific, Inc., a Delaware corporation.(2)

 

31.1   Certification by Chief Financial Officer, Jim Frazier, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 .
32.1   Certification by Chief Financial Officer, Jim Frazier, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

(1) Filed as an Exhibit to the Company’s Current Report on Form 8-K filed on November 23, 2011.
(2) Filed as an Exhibit to the Company’s Registration Statement on Form 10 SB12G, deemed effective by the Commission on January 17, 2007.

 

 

 

 

 

 

 

 

 

 

 

 

 

  17  
SIGNATURES

 

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

 

 

    START SCIENTIFIC, INC.
     
Date:  October 2, 2018   By: /s/ Jim Frazier
    Jim Frazier
   

Chief Executive Officer and

Chief Financial Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  18  

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