Notes to Financial Statements
(Unaudited)
Note 1. Basis of Presentation
and Nature of Operations
Name Change
On December 1, 2021, we received notice that our
name change to Odyssey Health, Inc. was approved by the state of Nevada, where we are incorporated.
Basis of Presentation
The accompanying financial information of Odyssey
Health, Inc., f/k/a Odyssey Group International, Inc., is unaudited and has been prepared in accordance with accounting principles generally
accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange
Commission ("SEC"). However, such information reflects all adjustments, consisting only of normal recurring adjustments, which
are, in the opinion of management, necessary for a fair presentation of the financial position, results of operations and cash flows for
the interim periods. The financial information as of July 31, 2021, is derived from our 2021 Annual Report on Form 10-K. The financial
statements included herein should be read in conjunction with the financial statements and the notes thereto included in our 2021 Annual
Report on Form 10-K filed with the SEC on October 29, 2021. The results of operations for the interim periods presented are not necessarily
indicative of the results to be expected for the full year.
Significant Accounting Policies
Our significant accounting policies have not changed
during the nine months ended April 30, 2022, from those disclosed in our Annual Report on Form 10-K for the year ended July 31, 2021.
Nature of Operations
Our business model is to develop or acquire unique
medical-related products, engage third parties to manufacture such products and then distribute the products through various distribution
channels, including third parties. We are developing potentially life-saving technologies: the CardioMap® heart monitoring and screening
device; the Save A Life choking rescue device, a unique neurosteroid drug compound intended to treat concussions, and a unique drug compound
to treat rare brain disorders in partnership with Prevacus, Inc. To date, none of our product candidates has received regulatory clearance
or approval for commercial sale.
We plan to license, improve, and develop our products
and identify and select distribution channels. We intend to establish agreements with distributors to get products to market quickly,
as well as to undertake and engage in our own direct marketing efforts. We will determine the most effective method of distribution for
each unique product that we include in our portfolio. We will engage third-party research and development firms who specialize in the
creation of our products to assist us in the development of our own products, and we will apply for trademarks and patents once we have
developed proprietary products.
We are not currently selling or marketing any
products, as our products are in development and Food and Drug Administration ("FDA") clearance or approval to market our products
will be required in order to sell in the United States.
Going Concern
We did not recognize any revenues for the year
ended July 31, 2021, or the nine months ended April 30, 2022, and we had an accumulated deficit of $52,172,081 as of April 30, 2022. For
the foreseeable future, we expect to experience continuing operating losses and negative cash flows from operations. Cash available at
April 30, 2022, of $266,300 may not provide enough working capital to meet our current operating expenses through June 14, 2023.
The operating deficit indicates substantial doubt
about our ability to continue as a going concern. Our continued existence depends on the success of our efforts to raise additional capital
necessary to meet our obligations as they come due and to obtain sufficient capital to execute our business plan. We may obtain capital
primarily through issuances of debt or equity or entering into collaborative arrangements with corporate partners. There can be no assurance
that we will be successful in completing additional financing or collaboration transactions or, if financing is available, that it can
be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, we may be required
to further scale down or perhaps even cease operations.
The issuance of additional equity securities could
result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans
would be available, would increase our liabilities and future cash commitments. Our financial statements do not include adjustments that
might result from the outcome of this uncertainty.
The COVID-19 global pandemic has
had an unfavorable impact on our business operations. The pandemic has impacted our ability to get financing, engage third-party vendors
and the timing of our clinical trial in Australia. The COVID-19 outbreak has adversely affected the U.S. and global economies
and financial markets, which may result in a long-term economic downturn that could negatively affect future performance and our ability
to secure additional debt or equity funding.
If we are unable to raise additional capital by
June 14, 2023, we will adjust our current business plan. Due to the unknown and volatile nature of the stock price and trading volume
of our common stock, is it is difficult to predict the timing and amount of availability pursuant to our equity line of credit with LPC.
Given our recurring losses, negative cash flow, and accumulated deficit, there is substantial doubt about our ability to continue as a
going concern.
Note 2. New Accounting
Pronouncements
ASU 2019-12
In December 2019, the Financial Accounting Standards
Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-12, “Income Taxes (Topic 740),” which
simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also
improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. This guidance
is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption of the
amendments is permitted, including adoption in any interim period for which financial statements have not yet been issued. The adoption
of ASU 2019-12 effective August 1, 2021, on a prospective basis did not have a material effect on our financial position, results of operations,
or cash flows.
ASU 2020-06
In August 2020, the FASB issued ASU 2020-06, “Debt
– Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity
(Subtopic 815-40),” which simplifies the accounting for convertible instruments, reduces complexity for preparers and practitioners
and improves the decision usefulness and relevance of the information provided to financial statement users. ASU 2020-06 also amends the
guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting
conclusions. ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal
years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020. We have not yet determined the
impact of adopting this standard on our financial position, results of operations or cash flows.
Note 3. Intangible
Assets
Intangible assets at April 30, 2022, consisted
of costs related to a patent for our PRV-002 drug device combination.
Amortization expense was as follows:
| Schedule of amortization expense | |
| | | |
| | | |
| | | |
| | |
| | |
| | |
| | |
| | |
| |
| | |
Three Months Ended April 30, | | |
Nine Months Ended April 30, | |
| | |
| 2022 | | |
| 2021 | | |
| 2022 | | |
| 2021 | |
| Amortization expense | |
$ | 754 | | |
$ | – | | |
$ | 1,206 | | |
$ | – | |
Future amortization of intangible assets is as
follows:
| Schedule of future amortization of intangible assets | |
| | |
| | |
| |
| Remainder of fiscal 2022 | |
$ | 754 | |
| Fiscal 2023 | |
| 3,015 | |
| Fiscal 2024 | |
| 3,015 | |
| Fiscal 2025 | |
| 3,015 | |
| Fiscal 2026 | |
| 3,015 | |
| Thereafter | |
| 31,200 | |
| Total amortization expense | |
$ | 44,014 | |
Note 4. Asset
Purchase Liability
In connection with our Asset Purchase
Agreement with Prevacus in March 2021, we withheld 1,000,000 shares of our common stock with a value of $1.18 per share for an
original value of $1,180,000
for payment of future Prevacus liabilities. This amount was recorded as an asset purchase liability on our Balance Sheets. The balance at April 30, 2022, and July 31, 2021, was $1,123,090 and $1,125,026, respectively.
Note 5. Fair
Value
The fair value of financial assets and liabilities
are determined utilizing a three-level framework as follows:
Level 1 – Observable inputs, such
as unadjusted quoted prices in active markets, for substantially identical assets and liabilities.
Level 2 –
Observable inputs other than quoted prices within Level 1 for similar assets and liabilities. These include quoted prices for similar
assets and liabilities in active markets, quoted prices for identical assets and liabilities in markets that are not active, or other
inputs that are observable or can be corroborated by observable market data. If the asset or liability has a specified or contractual
term, the input must be observable for substantially the full term of the asset or liability.
Level 3 –
Unobservable inputs that are supported by little or no market activity, generally requiring a significant amount of judgment by management.
The methods described
above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Further,
although we believe our valuation methods are appropriate and consistent with other market participants, the use of different methodologies
or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the
reporting date.
We did not have any transfers
of assets or liabilities measured at fair value on a recurring basis to or from Level 1, Level 2 or Level 3 during the nine months ended
April 30, 2022, or the year ended July 31, 2021.
The carrying values of
cash, prepaid expenses, accounts payable and accrued wages approximate their fair value due to their short maturities.
No changes were made
to our valuation techniques during the quarter ended April 30, 2022.
Contingent Liabilities
At April 30, 2022, and
July 31, 2021, we had contingent consideration related to the acquisition of intellectual property, know-how and patents for an anti-choking,
life-saving medical device in fiscal 2019. According to the agreement, we will make a one-time cash payment totaling $250,000 upon FDA
clearance of the device. The fair value of the contingent consideration is reviewed quarterly and determined based on the current status
of the project (Level 3). We determined the value was zero at both periods since it is not yet probable that we will file for FDA clearance.
We also had contingent
consideration at April, 2022 and July 31, 2021 related to milestones in our Asset Purchase Agreement with Prevacus, Inc. The fair
value of the contingent consideration is reviewed quarterly and determined based on the current
status of the project (Level 3). Based on these reviews, the fair value of the contingent consideration was determined to be zero at both
periods as it is not yet probable that any of the milestones will be met.
Fixed-Rate Debt
We have fixed-rate debt
that is reported on our Balance Sheets at carrying value less unamortized debt discount and closing costs. The fair value of our fixed
rate debt was calculated using a discounted cash flow methodology with estimated current interest rates based on similar risk profile
and duration (Level 2). The carrying value, excluding unamortized debt discount and debt issuance costs, and the fair value of our fixed-rate
long-term debt was as follows:
| Schedule of fixed-rate debt | |
| | |
| |
| | |
April 30, 2022 | | |
July 31, 2021 | |
| Carrying value | |
$ | 1,650,000 | | |
$ | 1,087,270 | |
| Fair value | |
$ | 1,630,618 | | |
$ | 1,094,212 | |
Non-Financial Assets
Non-financial assets, such as Property and equipment
and Intangible assets are measured at fair value on a non-recurring basis when events or circumstances indicate that an impairment may
have occurred. If we determine these assets to be impaired, they are reported at fair value as calculated during the period. No non-financial
assets were recorded at fair value during the nine months ended April 30, 2022, or the fiscal year ended July 31, 2021.
Note 6. Debt
Promissory Notes
On December 21, 2021,
and December 22, 2021, we entered into a total of five Promissory Notes (the “Notes”) with three of our directors and two
officers.
Mr. Joseph Michael Redmond,
President and Chief Executive Officer, Ms. Christine M. Farrell, Chief Financial Officer, Mr. Jerome H. Casey, Director, Mr. John P. Gandolfo,
Director, and Mr. Ricky W. Richardson, Director, each loaned us $25,000 for total proceeds of $125,000. The Notes bear interest at 8%
per annum and were originally due March 31, 2022. In April 2022, the maturity date of the Notes was extended to May 31, 2022.
Tysadco Partners
On August 29, 2021, we entered into a Securities
Purchase Agreement (the “SPA”) with Tysadco Partners (“Tysadco”) pursuant to which we entered into a $250,000
face value convertible promissory note which bears interest at a one-time rate of 8.0% applied to the face value and was originally due
March 1, 2022. We received $250,000 net cash from the issuance of the promissory note and issued 200,000 shares of common stock with a
relative fair value of $17,718 which is being expensed over the life of the note as a component of interest expense. The conversion rate
of the note is $0.30 for a total of 990,000 shares of our common stock if converted in full, including interest.
On March 31, 2022, the SPA was amended to extend
the maturity date to March 1, 2023, and, as consideration, $25,000 was added to the principal.
LGH Amendment
On April 5, 2021, we entered into a Securities
Purchase Agreement with LGH Investments, LLC (“LGH”) pursuant to which we entered into a $1,050,000 face value convertible
promissory note (the “Note”) which bears interest at a one-time rate of 8.0% applied to the face value of the Note. On February
15, 2022, we entered into Amendment No. 1 (the “Amendment”) to the Note with an effective date of February 1, 2022. Pursuant
to the Amendment, the maturity date of the Note was extended from February 5, 2022 to May 31, 2022. As consideration, $200,000 was added
to the principal amount outstanding, we issued 100,000 shares of our common stock to LGH with a value of $51,000 and we will pay down
principal and interest on the Note in the amount of the lesser of 10% or $250,000 of any future capital raises, investments, donations
or financings unless the Note has been converted. The conversion rate of the Note is $1.00 per share for a total of 1,336,000 shares of
our common stock if converted in full, including interest.
Notes Payable
The following notes payable were outstanding:
| Schedule of Notes Payable | |
| | |
| |
| | |
April 30, 2022 | | |
July 31, 2021 | |
| Note issued to Labrys due August 14, 2021 with an interest rate of 12% | |
$ | – | | |
$ | 37,270 | |
| Convertible note issued to LGH due May 31, 2022 with a fixed interest rate of 8.0% over the term of the note (annual interest rate of 12.1%) and convertible at $1.00 per share | |
| 1,250,000 | | |
| 1,050,000 | |
| Promissory notes issued to officers and directors due September 30, 2022 with a fixed interest rate of 8.0% per annum (see Note 13) | |
| 125,000 | | |
| – | |
| Tysadco convertible promissory note payable due March 1, 2023 with a fixed interest rate of 8.0% over the term of the note (annual interest rate of 15.2%) and convertible at $0.30 per share | |
| 275,000 | | |
| – | |
| | |
| 1,650,000 | | |
| 1,087,270 | |
| Unamortized debt discount and closing costs | |
| (88,863 | ) | |
| (351,030 | ) |
| | |
$ | 1,561,137 | | |
$ | 736,240 | |
Note 7. Stock-Based
Compensation
2021 Omnibus Stock Incentive Plan
At our annual stockholder meeting held September
14, 2021, the stockholders approved the Amended and Restated 2021 Omnibus Stock Incentive Plan (the “2021 Plan”). The purpose
of the Amended and Restated 2021 Omnibus Stock Incentive Plan is to enable us to recruit and retain highly qualified employees, directors
and consultants and to provide incentives for productivity and the opportunity to share in the our growth and value. Subject to certain
adjustments, the maximum number of shares of common stock, incentive stock options, stock appreciation rights, restricted stock, restricted
stock units, cash or other stock-based awards that may be issued under the Amended and Restated 2021 Omnibus Stock Incentive Plan is 20,000,000.
At April 30, 2022, 17,725,000 shares remained available for future awards and 20,000,000 shares of our common stock were reserved for
issuance pursuant to the 2021 Plan.
Stock Options
Stock option activity during the nine months ended April 30, 2022,
was as follows:
| Schedule of stock option activity | |
| | | |
| | |
| | |
Number of Options | | |
Weighted Average Exercise Price | |
| Options outstanding at July 31, 2021 | |
| 1,050,000 | | |
$ | 1.22 | |
| Options issued | |
| 1,225,000 | | |
| 0.45 | |
| Options outstanding at April 30, 2022 | |
| 2,275,000 | | |
| 0.80 | |
Restricted Stock Units (“RSUs”)
RSU activity during the nine months ended April
30, 2022, was as follows:
| Schedule of RSU activity | |
| | | |
| | |
| | |
Number of RSUs | | |
Weighted Average
Grant Date
Fair Value | |
| RSUs outstanding at July 31, 2021 | |
| 4,396,819 | | |
$ | 1.09 | |
| RSUs issued | |
| 1,500,000 | | |
| 0.45 | |
| RSUs vested | |
| (2,792,943 | ) | |
| 0.61 | |
| RSUs outstanding at April 30, 2022 | |
| 3,103,876 | | |
| 0.28 | |
On September 14, 2021, following the annual stockholders
meeting, three re-elected board members were granted 500,000 RSUs each vesting equally over 12 months at a total fair value of $675,000
based on the fair value of our stock on September 14, 2021, of $0.45 per share.
Warrants
| Schedule of warrant activity | |
| | | |
| | |
| | |
Number of
Warrants | | |
Weighted Average Exercise Price | |
| Warrants outstanding at July 31, 2021 | |
| 4,739,834 | | |
$ | 1.05 | |
| Warrants issued | |
| 3,102,066 | | |
| 0.59 | |
| Warrants canceled | |
| (1,485,834 | ) | |
| 1.50 | |
| Warrants outstanding at April 30, 2022 | |
| 6,356,066 | | |
| 0.72 | |
Unrecognized Compensation Costs
At April 30, 2022, we had unrecognized stock-based
compensation of $283,901, which will be recognized over the weighted average remaining vesting period of 0.67 years.
Note 8. Research and Development
Rebate
On November 2, 2021, we received a research and
development rebate from the government of Australia in the amount of $214,120 for clinical work performed in Australia related to our
Phase 1 human trial for safety and efficacy for the treatment of concussed individuals. In addition, during the quarter ended April 30,
2022, we accrued $185,035 in Prepaid expenses and other current assets to reflect the anticipated rebate for additional expenses incurred
related to the clinical trial. The rebates were accounted for as an offset to Research and development expense.
Note 9. Net Loss Per Share
Basic and diluted net loss per share is computed
by dividing net loss by the weighted-average number of common shares outstanding for the period. Potentially dilutive common stock and
common stock equivalents, including stock options, RSUs and warrants are excluded as they would be antidilutive.
The following anti-dilutive securities were excluded
from the calculations of diluted net loss per share:
| Schedule of anti-dilutive shares | |
| | | |
| | |
| | |
Nine Months Ended April 30, | |
| | |
2022 | | |
2021 | |
| Options to purchase common stock | |
| 2,275,000 | | |
| 900,000 | |
| Shares issuable upon conversion of convertible notes and related accrued interest | |
| 2,326,000 | | |
| 1,183,691 | |
| Warrants to purchase common stock | |
| 6,356,066 | | |
| 3,648,334 | |
| Unvested restricted stock units | |
| 3,103,876 | | |
| 2,113,598 | |
| Total potentially dilutive securities | |
| 14,060,942 | | |
| 7,845,623 | |
Note 10. Common
Stock
Returned Shares
On August 5, 2021, our loan with Labrys Fund,
LP was repaid in full and, per the agreement, on August 6, 2021, 350,000 restricted stock shares were returned to treasury.
On December 21, 2021,
Vivakor, Inc., a shareholder, returned 3,309,578 shares of our common stock and the shares were returned to treasury.
On December 29, 2021,
Regal Growth, LLC, a shareholder, returned 5,000,000 shares of our common stock and the shares were returned to treasury.
On February 2, 2022,
LBL Professional Consulting, Inc., a shareholder, returned 7,500,000 shares of our common stock and the shares were returned to treasury.
Shares Issuable
Pursuant to our agreement
with Prevacus entered into on March 1, 2021, Prevacus earned 1,000,000 shares of our common stock upon successful first dosing in our
Phase 1 clinical trial related to our PRV-002 neurosteroid concussion treatment in the quarter ended April 30, 2022. These shares have
not yet been issued.
Stock
Issuance
On February 9, 2022,
in connection with an investor relations consulting agreement with Tysadco, we issued Tysadco 3,000,000 restricted shares of our common
stock valued at $0.53 per share. The agreement includes a lock-up - leak out provision.
Reverse Split
At our 2021 annual stockholder meeting, which
was held on September 14, 2021, the stockholders approved the proposal that granted the Board discretionary authority to amend our Certificate
of Incorporation to effect a reverse stock split of the issued and outstanding shares of our common stock. As determined by our Board,
such stock split could be effected at a time and choosing of the Board. The amendment did not change the number of authorized shares of
common stock or preferred stock or the relative voting power of our stockholders. The number of authorized shares will not be reduced.
The number of authorized but unissued shares of our common stock will materially increase and will be available for re-issuance. We reserve
the right not to effect any reverse stock split if the Board does not deem it to be in the best interests of our stockholders and the
Board’s decision as to whether and when to effect the reverse stock split will be based on a number of factors, including prevailing market
conditions, existing and expected trading prices for our common stock, actual or forecasted results of operations, and the likely effect
of such results on the market price of our common stock.
Lincoln Park
Securities Purchase Agreement
On October 22, 2021, we entered into a Securities
Purchase Agreement (the “SPA”) with Lincoln Park Capital Fund, LLC (“LPC”) pursuant to which we received $250,000
in cash from LPC and LPC received (i) 1,500,000 restricted shares of our common stock, and (ii) 833,333 warrants exercisable at $0.50
per common share expiring in five years. 5
LPC Purchase Agreement Draws
During the nine months ended April 30, 2022, LPC
purchased a total of 1,174,482 shares of our common stock for total proceeds of $467,236 pursuant to the August 14, 2020 LPC Purchase
Agreement. As of April 30, 2022, LPC had purchased a total of 4,121,610 shares of our common stock pursuant to the agreement and remaining
purchase availability was $8,311,289 and remaining shares available were 15,943,556.
Tysadco Partners
On October 18, 2021, we entered into a Securities
Purchase Agreement (the “SPA”) with Tysadco pursuant to which we received $250,000 in cash from Tysadco and Tysadco received
(i) 1,500,000 restricted shares of our common stock, and (ii) 833,333 warrants exercisable at $0.50 per common share expiring in five
years. 5
LGH
In connection with an amendment to the LGH Note,
we issued LGH 100,000 shares of our common stock with a value of $51,000. See Note 6 above for additional information.
Private Placement
On February 2, 2022, we entered into an
agreement to raise money through a private investment in a public entity (“PIPE”). We offered up to 14,285,714
Units (the “Units”), each Unit consisting of one share of our common stock (the “Shares”) and one-half of an
accompanying warrant (the “Investor Warrants”) exercisable for one share of our common stock. The Units will be sold at
a price of $0.35
per Unit (the “Offering”). The Investor Warrants have a term of 5 five years and are exercisable at a price of $0.70 per
share and, in certain circumstances, may be exercised on a cashless basis. The Share and Investor Warrant comprising each Unit are
immediately separable and will be issued separately.
The Offering is made on a “Minimum”
basis, meaning a minimum amount of money must be raised. The minimum amount of 1,000,000 was raised effective April 14, 2022. Accordingly,
we issued a total of 2,870,800 Units, consisting of 2,870,800 Shares and 1,435,400 Investor Warrants for gross proceeds to us of $1,004,780.
Net proceeds after deducting commissions and fees were $849,302.
In connection with the Offering, we paid Laidlaw
& Company (UK) Ltd. (“Laidlaw”), our introducing broker, 10% of the proceeds, or $100,478 in cash, as a finder fee. At
the final closing of the Offering, we are obligated to issue Laidlaw warrants equal to 10% of the Shares sold in the Offering, including
any common stock issued or issuable. The Warrants will have an exercise price equal to the lowest price per share of the share of common
stock issued or issuable to investors in the offering and will expire in five years. The Laidlaw warrants will include cashless exercise
provisions.
We are required to file a registration statement
for resale of all shares issued or issuable in connection with the Offering within 60 days of the final closing of the Offering. Failure
to file a registration statement for the resale of the shares would require us to pay to the purchasers, in cash, as partial liquidated
damages and not as a penalty, by reason of any such delay in or reduction of its ability to sell the Securities, an amount in cash equal
to one and one-half percent (1.5%) of the aggregate subscription amount of such purchaser’s securities on the day of failure to
file the registration statement and on every thirtieth (30th) day (pro rated for periods totaling less than thirty days) thereafter
until the earlier of (a) the date such filing is cured and (b) such time that such the filing is no longer required for the purchasers
to transfer the shares and warrant shares pursuant to Rule 144. The payments shall bear interest at the rate of eighteen percent
(18%) per month (prorated for partial months) until paid in full.
Note 11. Related Party
Transactions
Due to Officers
The following amounts were due to our officers
for reimbursement of expenses and were included in Accounts payable on our Balance Sheets:
| Schedule of related party payables | |
| | | |
| | |
| | |
April 30, 2022 | | |
July 31, 2021 | |
| Joseph M. Redmond, CEO | |
$ | 5,795 | | |
$ | 2,568 | |
| Christine Farrell, CFO | |
| 130 | | |
| – | |
| | |
$ | 5,925 | | |
$ | 2,568 | |
The amount of unpaid salary and bonus due to
our officers was included in Accrued wages on our Balance Sheets and was as follows:
| Schedule of accrued wages | |
| | | |
| | |
| | |
April 30, 2022 | | |
July 31, 2021 | |
| Joseph M. Redmond, CEO | |
$ | 646,391 | | |
$ | 183,846 | |
| Christine Farrell, CFO | |
| 96,971 | | |
| – | |
| | |
$ | 743,361 | | |
$ | 183,846 | |
On January 31, 2022, the Compensation Committee
and our full Board approved the 2021 bonus plan. Pursuant to the plan, Mr. Redmond received a $360,000 bonus and Ms. Farrell received
a $40,000 bonus based upon meeting fund raising goals. The bonuses will be paid when funds are available and are included in the amounts
disclosed in the above table.
See also Note 6 for a discussion of $25,000 Promissory Notes payable
to officers and directors.
Note 12. Donation
Received
On January
5, 2022, we received a donation in the amount of $500,000 in partnership with the Erase PTSD Now organization and the Glenn Greenberg
and Linda Vester Foundation. These funds were recorded as Other income in our Statements of Operations and will be used to progress the
Phase 1 human clinical trials for drug candidate PRV-002 for the treatment of concussion.
Note 13. Subsequent Events
On May 3, 2022, the second and final closing of
the PIPE occurred, pursuant to which we issued one 1,187,572 Units, consisting of 1,187,572 shares of our common stock and warrants to
purchase 593,786 shares of our common stock for which we received $415,650 in gross proceeds. As part of the closing, we issued Laidlaw
608,755 warrants with an exercise prices of $0.35 per share with a five-year cashless exercise.
In June 2022, the maturity date of the promissory
notes outstanding to our officers and directors was extended to September 30, 2022.
In June 2022, the maturity date of the LGH Note
was extended to August 30, 2022. As consideration, the Note conversion price changed to twenty cents ($0.20) per common share.
