RAPID THERAPEUTIC SCIENCE LABORATORIES, INC.
(formerly, Holly Brothers Pictures, Inc.)
Consolidated Balance Sheets
|
June 30, 2020
|
|
March 31, 2020
|
Assets
|
(unaudited)
|
|
|
Current assets:
|
|
|
|
Cash
|
$
|
213,123
|
|
$
|
136,215
|
Inventory
|
|
28,619
|
|
|
5,873
|
Total current assets
|
|
241,742
|
|
|
142,088
|
|
|
|
|
|
|
Intangible assets:
|
|
|
|
|
|
Sublicense agreement, net of accumulated amortization of $62,500
and $37,500
|
|
277,500
|
|
|
302,500
|
|
|
|
|
|
|
Total assets
|
$
|
519,242
|
|
$
|
444,588
|
|
|
|
|
|
|
Liabilities and Stockholders Deficit
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Accounts payable - other
|
$
|
83,426
|
|
$
|
64,577
|
Equity subscription payable
|
|
90,000
|
|
|
90,000
|
Contract liabilities
|
|
-
|
|
|
32,000
|
Notes payable - related party
|
|
23,350
|
|
|
23,350
|
Notes payable - other
|
|
890,233
|
|
|
883,185
|
Accrued interest payable
|
|
423,321
|
|
|
400,720
|
Derivative liability, at fair value
|
|
44,952
|
|
|
-
|
Total current liabilities
|
|
1,555,282
|
|
|
1,493,832
|
|
|
|
|
|
|
Other liabilities:
|
|
|
|
|
|
Convertible notes payable
|
|
315,240
|
|
|
315,240
|
Total liabilities
|
|
1,870,522
|
|
|
1,809,072
|
|
|
|
|
|
|
Commitments and contingencies (Note 8)
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders deficit:
|
|
|
|
|
|
Preferred stock, no par value per share, 100,000,000 shares
authorized, no shares issued and outstanding
|
|
-
|
|
|
-
|
Common stock, $.001 par value per share, 750,000,000 and
200,000,000 authorized, 161,874,334 and 159,556,000 shares
issued and outstanding
|
|
161,874
|
|
|
159,556
|
Additional paid in capital
|
|
2,991,984
|
|
|
2,414,718
|
Accumulated deficit
|
|
(4,167,799)
|
|
|
(3,601,419)
|
Treasury stock
|
|
(337,339)
|
|
|
(337,339)
|
Total stockholders deficit
|
|
(1,351,280)
|
|
|
(1,364,484)
|
|
|
|
|
|
|
Total liabilities and stockholders deficit
|
$
|
519,242
|
|
$
|
444,588
|
See accompanying notes to unaudited consolidated financial statements.
3
RAPID THERAPEUTIC SCIENCE LABORATORIES, INC.
(formerly, Holly Brothers Pictures, Inc.)
Consolidated Statements of Operations
(Unaudited)
|
Three Months Ended June 30,
|
|
2020
|
|
2019
|
|
|
|
|
Revenues
|
$
|
129,287
|
|
$
|
-
|
Costs of goods sold
|
|
18,556
|
|
|
-
|
Gross profit
|
|
110,731
|
|
|
-
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
General and administrative
|
|
629,510
|
|
|
22,974
|
Amortization expense
|
|
25,000
|
|
|
-
|
Total operating expenses
|
|
654,510
|
|
|
22,974
|
|
|
|
|
|
|
Other (expense):
|
|
|
|
|
|
Interest expense
|
|
(22,601)
|
|
|
(46,099)
|
Total other income (expense)
|
|
(22,601)
|
|
|
(46,099)
|
|
|
|
|
|
|
Net loss before income taxes
|
|
(566,380)
|
|
|
(69,073)
|
Income taxes
|
|
-
|
|
|
-
|
|
|
|
|
|
|
Net loss
|
$
|
(566,380)
|
|
$
|
(69,073)
|
|
|
|
|
|
|
Net loss per share, basic and diluted
|
$
|
(0.00)
|
|
$
|
(0.06)
|
|
|
|
|
|
|
Weighted average shares outstanding, basic and diluted
|
|
160,447,978
|
|
|
1,204,000
|
See accompanying notes to unaudited consolidated financial statements.
4
RAPID THERAPEUTIC SCIENCE LABORATORIES, INC.
(formerly, Holly Brothers Pictures, Inc.)
Consolidated Statements of Stockholders Deficit
(Unaudited)
|
|
|
Additional
|
|
|
|
|
|
Total
|
|
Common Stock
|
|
Paid-in
|
|
Accumulated
|
|
Treasury
|
|
Stockholders'
|
|
Shares
|
Amount
|
|
Capital
|
|
Deficit
|
|
Stock
|
|
Deficit
|
|
|
|
|
|
|
|
|
|
|
|
Balance at March 31, 2020
|
159,556,000
|
$
|
159,556
|
|
$
|
2,414,718
|
|
$
|
(3,601,419)
|
|
$
|
(337,339)
|
|
$
|
(1,364,484)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Private sales of common stock
|
960,000
|
|
960
|
|
|
239,040
|
|
|
-
|
|
|
-
|
|
|
240,000
|
Stock compensation expense
|
1,358,334
|
|
1,358
|
|
|
338,226
|
|
|
-
|
|
|
-
|
|
|
339,584
|
Net loss
|
-
|
|
-
|
|
|
-
|
|
|
(566,380)
|
|
|
-
|
|
|
(566,380)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at June 30, 2020
|
161,874,334
|
|
161,874
|
|
|
2,991,984
|
|
|
(4,167,799)
|
|
|
(337,339)
|
|
|
(1,351,280)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at March 31, 2019
|
1,204,000
|
|
1,204
|
|
|
144,477
|
|
|
(2,976,835)
|
|
|
(337,339)
|
|
|
(3,168,493)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock compensation expense
|
-
|
|
-
|
|
|
10,750
|
|
|
-
|
|
|
-
|
|
|
10,750
|
Net loss
|
-
|
|
-
|
|
|
-
|
|
|
(69,073)
|
|
|
-
|
|
|
(69,073)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at June 30, 2019
|
1,204,000
|
$
|
1,204
|
|
$
|
155,227
|
|
$
|
(3,045,908)
|
|
$
|
(337,339)
|
|
$
|
(3,226,816)
|
See accompanying notes to unaudited consolidated financial statements.
5
RAPID THERAPEUTIC SCIENCE LABORATORIES, INC.
(formerly, Holly Brothers Pictures, Inc.)
Consolidated Statements of Cash Flows
(Unaudited)
|
Three Months Ended
June 30,
|
|
2020
|
|
2019
|
Cash flows from operating activities:
|
|
|
|
Net loss
|
$
|
(566,380)
|
|
$
|
(69,073)
|
Adjustments to reconcile net loss to net
cash provided by (used in) operations
|
|
|
|
|
|
Stock compensation expense
|
|
339,584
|
|
|
10,750
|
Amortization expense
|
|
25,000
|
|
|
-
|
Inventory
|
|
(22,746)
|
|
|
-
|
Accounts payable
|
|
18,849
|
|
|
5,356
|
Accrued interest payable
|
|
22,601
|
|
|
46,099
|
Other, net
|
|
(32,000)
|
|
|
-
|
Net cash flows used in operating activities
|
|
(215,092)
|
|
|
(6,868)
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
Issuance of notes payable to related parties
|
|
52,000
|
|
|
8,000
|
Private sales of common stock
|
|
240,000
|
|
|
-
|
Net cash flows provided by financing activities
|
|
292,000
|
|
|
8,000
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
76,908
|
|
|
1,132
|
Cash and cash equivalents at beginning of period
|
|
136,215
|
|
|
1,334
|
|
|
|
|
|
|
Cash and cash equivalents at end of period
|
$
|
213,123
|
|
$
|
2,466
|
|
|
|
|
|
|
Supplemental cash flow data:
|
|
|
|
|
|
Cash paid for interest
|
$
|
-
|
|
$
|
-
|
Cash paid for income taxes
|
|
-
|
|
|
-
|
|
|
|
|
|
|
Supplemental Non-cash financing activities:
|
|
|
|
|
|
Debt discount on convertible notes payable
|
$
|
(44,952)
|
|
$
|
-
|
Derivative liabilities
|
|
44,952
|
|
|
-
|
See accompanying notes to unaudited consolidated financial statements.
6
RAPID THERAPEUTIC SCIENCE LABORATORIES, INC.
(formerly, Holly Brothers Pictures, Inc.)
Notes to Consolidated Financial Statements
(Unaudited)
(1)Condensed Interim Financial Statements
The Company - Rapid Therapeutic Science Laboratories, Inc. (we, our or the Company) was incorporated in the State of Nevada on February 22, 2013, originally under the name of PowerMedChairs. On June 2, 2017, the Company changed its name to Holly Brothers Pictures, Inc. On February 1, 2018, the Company acquired 100% of the equity interests in Power Blockchain, LLC (Power Blockchain) through an exchange agreement in a transaction that resulted in the transition to a planned new business of mining crypto-currency. Effective November 15, 2019, the Company exited from that business and adopted a new business strategy focused on developing potential commercial opportunities which will involve the rapid application of therapeutics using inhaler technology that the Company has sublicensed from a third party as a result of the execution of a sublicense agreement with the sublicensor on that date (see Note 4). In conjunction with the adoption of the new business strategy, the Company changed its name to Rapid Therapeutic Science Laboratories, Inc., effective January 13, 2020. At that time, the Company also commenced online sales of its inhaler products.
Interim Financial Information - The accompanying consolidated financial statements have been prepared by the Company, without audit, in accordance with accounting principles generally accepted in the Unites States of America for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). In the opinion of management, these consolidated financial statements contain all adjustments, consisting only of normal recurring adjustments, necessary to fairly state the financial position of the Company as of June 30, 2020, the results of its operations for the three month periods ended June 30, 2020 and 2019, the changes in its stockholders deficit for the three month periods ended June 30, 2020 and 2019, and cash flows for the three month periods ended June 30, 2020 and 2019. These financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended March 31, 2020, as filed with the SEC on June 29, 2020.
Impact of COVID-19 Pandemic on Consolidated Financial Statements. The outbreak of the 2019 novel coronavirus disease (COVID-19), which was declared a global pandemic by the World Health Organization on March 11, 2020, and the related responses by public health and governmental authorities to contain and combat its outbreak and spread has severely impacted the U.S. and world economies. Decreased demand for our products caused by COVID-19 could have a material adverse effect on our results of operations. Separately, economic recessions, including those brought on by the COVID-19 outbreak may have a negative effect on the demand for our products and our operating results. The range of possible impacts on the Companys business from the coronavirus pandemic could include: (i) changing demand for the Companys products; (ii) rising bottlenecks in the Companys supply chain; and (iii) increasing contraction in the capital markets. At this time, the Company believes that it is premature to determine the potential impact on the Companys business prospects from these or any other factors that may be related to the coronavirus pandemic.
(2)Summary of Significant Accounting Policies
Basis of Accounting - The basis is United States generally accepted accounting principles. The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Power Blockchain, which is presently inactive.
Principles of Consolidation - The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All intercompany accounts and transactions have been eliminated in consolidation.
Cash and Cash Equivalents - The Company considers all short-term investments with a maturity of three months or less at the date of purchase to be cash equivalents.
7
Earnings per Share - The basic earnings (loss) per share is calculated by dividing the Companys net income (loss) available to common shareholders by the weighted average number of common shares issued and outstanding during the year. The diluted earnings (loss) per share is calculated by dividing the Companys net income (loss) available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted as of the first year for any potentially dilutive debt or equity. The Company has not issued any options or warrants or similar securities that are presently exercisable.
Revenue recognition - We account for revenue from contracts with customers in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Update ("ASU") No. 2014-09, "Revenue from Contracts with Customers (Topic 606)." The unit of account in Topic 606 is a performance obligation, which is a promise in a contract to transfer to a customer either a distinct good or service (or bundle of goods or services) or a series of distinct goods or services provided at a point in time or over a period of time. Topic 606 requires that a contracts transaction price, which is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer, is to be allocated to each performance obligation in the contract based on relative standalone selling prices and recognized as revenue when (point in time) or as (over time) the performance obligation is satisfied.
Inventory - Inventory as of June 30, 2020, consists of inhalers and related products and supplies delivered to a location near the Companys offices, and held for sale to wholesale or retail customers. Inventory is stated at the lower of weighted average cost or market.
Intangible Assets - The Company amortizes the costs of any renewable license or sub-license agreements over the contractual terms of such renewable agreements. For any license or sub-license agreements which do not require any renewal payments to be made, the Company performs periodic assessments in order to determine whether there has been any impairment in the carrying value of such intangible assets (see Note 4).
Income Taxes - The provision for income taxes is the total of the current taxes payable and the net of the change in the deferred income taxes. Provision is made for the deferred income taxes where differences exist between the period in which transactions affect current taxable income and the period in which they enter into the determination of net income in the financial statements. A valuation allowance is provided for the amount of deferred assets that, based on available evidence, are not expected to be realized.
Use of Estimates - The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from estimates.
Fair Value of Financial Instruments - Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as further noted below.
Level 1:The preferred inputs to valuation efforts are quoted prices in active markets for identical assets or liabilities, with the caveat that the reporting entity must have access to that market. Information at this level is based on direct observations of transactions involving the same assets and liabilities, not assumptions, and thus offers superior reliability. However, relatively few items, especially physical assets, actually trade in active markets.
Level 2:FASB acknowledged that active markets for identical assets and liabilities are relatively uncommon and, even when they do exist, they may be too thin to provide reliable information. To
8
deal with this shortage of direct data, the board provided a second level of inputs that can be applied in three situations.
Level 3:If inputs from levels 1 and 2 are not available, FASB acknowledges that fair value measures of many assets and liabilities are less precise. The board describes Level 3 inputs as unobservable, and limits their use by saying they shall be used to measure fair value to the extent that observable inputs are not available. This category allows for situations in which there is little, if any, market activity for the asset or liability at the measurement date. Earlier in the standard, FASB explains that observable inputs are gathered from sources other than the reporting company and that they are expected to reflect assumptions made by market participants.
Recently Issued Accounting Pronouncements - In the three months ended June 30, 2020, the Financial Accounting Standards Board issued several new Accounting Standards Updates which the Company believes will have no material impact to the Company.
Subsequent Events - Management has evaluated any subsequent events occurring in the period from June 30, 2020 through the date the financial statements were issued, to determine if disclosure in this report is warranted (see Note 9).
(3)Going Concern
The Company's consolidated financial statements are prepared using the 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. However, the Company has generated minimal revenues and has suffered recurring losses totaling $4,167,799 since inception. These factors, among others, indicate that there is substantial doubt about the Companys ability to continue as a going concern within one year from the issuance date of this filing.
In order to obtain the necessary capital to sustain operations, Managements plans include, among other things, the possibility of pursuing new equity sales and/or making additional debt borrowings. There can be no assurances, however, that the Company will be successful in obtaining such additional financing, or that such financing will be available on favorable terms, if at all. The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might result from the outcome of this uncertainty.
(4)Intangible Assets
Effective November 15, 2019, the Company entered into a sublicense agreement with Texas MDI, Inc. (TMDI), a Texas corporation, (the "Agreement") granting the Company access to certain technology regarding the RxoidTM metered dose inhaler that TMDI has licensed from a third party. In conjunction with execution of the Agreement, the Company simultaneously issued a total of 140,000,000 shares of its Common Stock to TMDI, in consideration of the sublicense rights granted to the Company in this transaction. Such rights were transferred as a result of extensive third party negotiations between the Company and TMDI and have been recorded as the acquisition of an intangible asset in the amount of $140,000, based on the par value of the shares issued.
During the term of the Agreement, the Company is required to reimburse TMDI to the extent that TMDI is required to make any payments to the licensor, pursuant to its license agreement with a third party. Accordingly, the Company has an obligation to reimburse TMDI in the amount of $200,000 as a license fee covering the first two years of the Agreement. The Company has partially satisfied this obligation by making an equipment purchase on behalf of the licensor in the amount of $135,000, and has agreed to pay the remaining license fee of $65,000 in cash within a 24 month period (for which, the Company has recorded a liability of $44,925 for the unpaid portion of this amount in accounts payable as of June 30, 2020). The Company has recorded the entire $200,000 license fee as an intangible asset and is amortizing such expense on a straight-line basis over a 24 month period (of which, $25,000 was amortized in the three month period ended June 30, 2020).
9
(5)Notes Payable
As of June 30, 2020 and March 31, 2020, the Company had the following note payable obligations:
|
|
June 30,
|
|
March 31,
|
|
|
2020
|
|
2020
|
Convertible promissory notes issued to two accredited investors, maturing in 1 to 5 years, accruing interest at 5% per annum, convertible into common stock at $0.05 per share.
|
|
$
|
300,000
|
|
$
|
300,000
|
|
|
|
|
|
|
|
Convertible promissory notes issued to former owners in acquisition of Power Blockchain, accruing interest at 5% per annum, principal repayments originally due in four equal installments on 2nd, 3rd, 4th and 5th anniversaries, convertible into common stock at $0.13 per share, with final maturity on February 1, 2023.
|
|
|
165,240
|
|
|
165,240
|
|
|
|
|
|
|
|
Other short term notes issued to various affiliates of the former owners of Power Blockchain for acquisition of Treasury Stock, computers and equipment, and working capital financing, at stated interest rates of 10%. Amended on November 15, 2019, to mature in one year and to be convertible into common stock at $0.05 per share.
|
|
|
756,535
|
|
|
756,535
|
|
|
|
|
|
|
|
Convertible note issued to an accredited investor on June 30, 2020, net of unamortized debt discount of $44,952 (see further discussion below)
|
|
|
7,048
|
|
|
-
|
|
|
|
|
|
|
|
Total notes payable
|
|
$
|
1,228,823
|
|
$
|
1,221,775
|
Future maturities of notes payable as of June 30, 2020 are as follows:
Year ending June 30, 2021
|
|
$
|
913,583
|
Year ending June 30, 2022
|
|
|
-
|
Year ending June 30, 2023
|
|
|
165,240
|
Year ending June 30, 2024
|
|
|
150,000
|
Year ending June 30, 2025
|
|
|
-
|
|
|
$
|
1,228,823
|
On June 30, 2020, the Company entered into a Securities Purchase Agreement with an accredited investor (the Buyer) with respect to a Convertible Promissory Note (the Note) issued by the Company to the Buyer in the amount of $55,000. The Note has a maturity date of one year after the date of issuance and bears interest at a rate of 12% per annum, which is not due until maturity. At the option of the Buyer, the Note may be converted into shares of the Companys common stock, beginning one hundred eighty (180) days following the date of issuance. Under this option, the conversion price shall be subject to a discount of 42%, based on the average of the three (3) lowest closing bid prices for the Common Stock during the prior fifteen (15) trading day period. The Buyer will be limited to convert no more than 4.99% of the issued and outstanding Common Stock at time of conversion at any one time. The Company determined that the conversion feature of the Note required the recognition of a derivative liability upon issuance. As of June 30, 2020, the Company calculated the fair value of the derivative liability, using the Black Scholes model, to be $44,952. Accordingly the Company has recognized a derivative liability in that amount offset by a debt discount. The Company will amortize the debt discount as interest expense over the one year term of the Note.
10
Effective November 15, 2019, the following transactions took place in the Companys notes payable:
·The Company entered into new promissory notes with two accredited investors under which the Company borrowed a total of $300,000, with such notes maturing in five years, accruing interest at 5% per annum, and being convertible into common stock at the option of the holders, at a conversion price of $0.05 per share.
·The two holders of outstanding convertible notes payable elected to exercise their existing rights to convert a portion of their notes into shares of common stock, at the stated conversion ratio of $0.13 per share. The two holders converted a total principal amount of $2,034,760 in notes into a total of 15,652,000 shares of common stock leaving the remaining total principal balance of $165,240 unconverted.
·The Company entered into an amendment with the holders of existing non-convertible notes in the total principal amount of $732,835 (out of a total of $756,535) whereby such notes will remain outstanding and continue to accrue interest with deferral of the maturity dates being extended for one year or until the Company has raised an additional $500,000 of new equity securities, at which time, the principal and accrued interest shall be converted into common stock at a conversion price of $0.05 per share.
The Company performed an analysis of both the newly issued convertible notes and the newly amended existing notes, which were formerly non-convertible, to determine whether there was a beneficial conversion feature and noted none.
(6)Stockholders Equity
Effective January 13, 2020, the Company filed a Certificate of Amendment to its Amended and Restated Articles of Incorporation (the Certificate of Amendment) with the Secretary of State of the State of Nevada to increase the total authorized shares of common stock of the Company from 200 million shares to 750 million shares and to authorize 100 million shares of blank check preferred stock of the Company.
During the quarter ended June 30, 2020, the Company entered into private stock subscription agreements with six separate accredited investors whereby the Company sold a total of 960,000 shares of restricted common stock to these six investors at an offering price of $0.25 per share, resulting in gross proceeds to the Company of $240,000.
Additionally, the Company awarded 1,358,334 shares of restricted common stock to a total of 11 consultants during the quarter ended June 30, 2020 as compensation for services. Based on the timing of these awards in relation to the private offering of common stock noted above, the Company valued the shares at a price of $0.25 per share, for total non-cash compensation expense of $339,584.
In March 2018, the Board approved the establishment of a new 2018 Stock Option Plan with an authorization for the issuance of up to 1,000,000 shares of common stock. The Plan is designed to provide for future discretionary grants of stock options, stock awards and stock unit awards to key employees and non-employee directors. The Company has made no issuances under this Plan.
(7)Related Party Transactions
Office services have been provided without charge by a director. Such costs are immaterial to the consolidated financial statements and, accordingly, have not been reflected therein. The officers and directors of the Company are involved in other business activities and may, in the future, become involved in other business opportunities. If a specific business opportunity becomes available, such persons may face a conflict in selecting between the Company and their other business interests. The Company has not formulated a policy for the resolution of such conflicts.
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(8)Commitments and Contingencies
From time to time in the ordinary course of our business, the Company may be involved in legal proceedings, the outcomes of which may not be determinable. The results of litigation are inherently unpredictable. Any claims against us, whether meritorious or not, could be time consuming, result in costly litigation, require significant amounts of management time and result in diversion of significant resources. We are not able to estimate an aggregate amount or range of reasonably possible losses for those legal matters for which losses are not probable and estimable, primarily for the following reasons: (i) many of the relevant legal proceedings are in preliminary stages, and until such proceedings develop further, there is often uncertainty regarding the relevant facts and circumstances at issue and potential liability; and (ii) many of these proceedings involve matters of which the outcomes are inherently difficult to predict. We currently have no insurance policies covering such potential losses.
We are not at this time involved in any legal proceedings.
(9)Subsequent Events
Since December 31, 2019 and through the date of this report, the entire global economy has been substantially impacted by the coronavirus pandemic which began in China and has spread to the United States and most other parts of the world. As disclosed in Note 1, the Company has adopted a new business strategy focused on developing potential commercial opportunities which will involve the rapid application of therapeutics using proprietary metered dose inhaler technology that the Company has recently sublicensed from a third party. The range of possible impacts on the Companys business from the coronavirus pandemic could include: (i) changing demand for the Companys products; (ii) rising bottlenecks in the Companys supply chain; and (iii) increasing contraction in the capital markets. At this time, the Company believes that it is premature to determine the potential impact on the Companys business prospects from these or any other factors that may be related to the coronavirus pandemic.
In August 2020, the Company entered into private stock subscription agreements with thirty-three separate accredited investors whereby the Company sold a total of 2,404,000 shares of restricted common stock to these investors at an offering price of $0.25 per share, resulting in gross proceeds to the Company of $601,000.
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