Condensed Notes to Unaudited Consolidated Financial
Statements
September 30, 2021
Note 1 - Organization and Description of Business
Signet International Holdings, Inc. (the “Company”)
was incorporated in the State of Delaware and redomiciled in Nevada in February 2018. The Company’s current principal
business plan is to focus in developing advanced technologies, energy solutions and medical devices. The Company has no operating history
as of yet.
Note 2 - Going Concern
The accompanying unaudited consolidated financial
statements are prepared on a going concern basis which contemplates the realization of assets and satisfaction of liabilities and commitments
in the normal course of business. As reflected in the accompanying unaudited consolidated financial statements, the Company had a net
loss and net cash used in operations of $144,669 and $92,292, respectively, for the nine months ended September 30, 2021 and had no revenues
during the nine months ended September 30, 2021 and 2020. Additionally, the Company had an accumulated deficit of $7,999,193 as of September
30, 2021. These matters raise substantial doubt about the Company’s ability to continue as a going concern for twelve months from
the issuance date of this report. The ability of the Company to continue as a going concern is dependent on the Company’s ability
to implement its business plan, raise capital, and generate revenues. The unaudited consolidated financial statements do not include any
adjustments that might be necessary if the Company is unable to continue as a going concern.
COVID-19
In March 2020, the World Health Organization declared
COVID-19 a global pandemic and recommended containment and mitigation measures worldwide. The Company is monitoring this closely. Although
the Company has had occasion to travel overseas for meetings, expos, and demonstrations, the Company experienced similar restrictions.
The outcome of the Company’s business meeting is indeterminate. However, the Company continues to maintain a dialogue with its European
counterparts. The Company’s operations have not been affected by the COVID-19 outbreak to date, however, the ultimate duration
and severity of the outbreak and its impact on the economic environment and our business is uncertain. As of the date of this report,
the Company’s business remains open. At this time, the Company does not foresee any material changes to its operations from COVID-19.
While the Company does not anticipate an impact on its operations, the Company cannot estimate the duration of the pandemic and potential
impact on its business if the Company’s business must close. In addition, a severe or prolonged economic downturn could result in
a variety of risks to its business, including weakened demand for the Company’s products and a decreased ability to raise additional
capital when needed on acceptable terms, if at all. At this time, the Company is unable to estimate the impact of this event on its operations
Note 3 - Summary of Significant Accounting Policies
Basis of presentation and principles of consolidation
The accompanying unaudited consolidated financial
statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial
information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements.
In the opinion of management, all adjustments (all of which are of a normal recurring nature) considered necessary for a fair presentation
have been included. Operating results for the nine months ended September 30, 2021 are not indicative of the results that may be expected
for the year ending December 31, 2021 or for any other future period. These unaudited consolidated financial statements and the unaudited
condensed notes thereto should be read in conjunction with the audited consolidated financial statements and notes thereto included in
the Company’s Form 10-K, for the year ended December 31, 2020, filed with the Securities and Exchange Commission (the “SEC”)
on March 26, 2021. The Company’s unaudited consolidated financial statements include the financial statements of its three wholly-owned
subsidiaries. All inter-company balances and transactions have been eliminated in consolidation. All wholly-owned subsidiaries were inactive
subsidiaries at September 30, 2021 and December 31, 2020 and for each of the nine months ended September 30, 2021 and 2020.
Use of estimates
The preparation of the unaudited consolidated
financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and the related disclosures at the date of the
financial statements and during the reporting period. Actual results could materially differ from these estimates. Significant estimates
include the valuation of equity-based instruments issued for other than cash, valuation of right-of-use assets and liabilities and the
valuation allowance on deferred tax assets.
Signet International Holdings, Inc. and Subsidiaries
Condensed Notes to Unaudited Consolidated Financial
Statements
September 30, 2021
Risks and uncertainties for development stage company
The Company is considered to be in an early stage
since we have not commenced planned principal operations. Our activities since inception include devoting substantially all of the Company’s
efforts to business planning and development. Additionally, the Company has allocated a substantial portion of its time and investment
to the completion of the Company’s development activities to launch its marketing plan and generate revenues and to raising capital.
The Company has not generated revenue from operations and is currently in the development stage. The Company’s activities during
this early stage are subject to significant risks and uncertainties.
Cash and cash equivalents
The Company considers all highly liquid investments
with a maturity of three months or less when acquired to be cash equivalents. The Company did not have cash equivalents as of September
30, 2021 and December 31, 2020. The Company places its cash with high credit quality financial institutions. The Company’s accounts
at these institutions are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. As of September 30,
2021, the Company had not reached bank balances exceeding the FDIC insurance limit on interest bearing accounts. To reduce its risk associated
with the failure of such financial institutions, the Company evaluates at least annually the rating of the financial institutions in which
it holds deposits.
Fair value measurements and fair value
of financial instruments
The Company follows Accounting Standards Codification
(“ASC”) 820, “Fair Value Measurements and Disclosures” (“ASC 820”), for assets and liabilities measured
at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted
accounting principles that requires the use of fair value measurements, establishes a framework for measuring fair value and expands disclosure
about such fair value measurements.
ASC 820 defines fair value as the price that
would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement
date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the
use of unobservable inputs.
These inputs are prioritized below:
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Level 1:
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Observable inputs such as quoted market prices in active markets for identical assets or liabilities
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Level 2:
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Observable market-based inputs or unobservable inputs that are corroborated by market data
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Level 3:
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Unobservable inputs for which there is little
or no market data, which require the use of the reporting entity’s own assumptions.
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The Company analyzes all financial instruments
with features of both liabilities and equity under the Financial Accounting Standard Board’s (“FASB”) accounting standard
for such instruments. Under this standard, financial assets and liabilities are classified in their entirety based on the lowest level
of input that is significant to the fair value measurement.
The estimated fair value of certain financial
instruments, including prepaid expense, accounts payable, and accrued expenses are carried at historical cost basis, which approximates
their fair values because of the short-term nature of these instruments.
Property
Property is carried at cost which made up of office
equipment. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets
are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are
included in income in the year of disposition. Depreciation is calculated on a straight-line basis over the estimated useful life of the
assets. The Company shall capitalize cost of property over $1,500.
Stock-based compensation
The Company accounts for stock-based
compensation in accordance with ASC 718-10, “Share-Based Payment,” which requires the measurement and recognition of
compensation expense for all share-based payment awards made to non-employees for goods and services, and to employees and directors including
employee stock options, restricted stock awards, and employee stock purchases based on estimated fair values.
Determining Fair Value Under ASC 718-10
The Company estimates
the fair value of stock options granted using the Black-Scholes option-pricing formula. This fair value is then amortized on a straight-line
basis over the requisite service periods of the awards. The Company’s determination of fair value using an option-pricing model is affected
by the stock price as well as assumptions regarding the number of highly subjective variables.
The Company estimates
volatility based upon the historical stock price of the Company and estimates the expected term for employee stock options using the simplified
method for employees and directors and the contractual term for non-employees. The risk-free rate is determined based upon the prevailing
rate of United States Treasury securities with similar maturities.
Signet International Holdings, Inc. and Subsidiaries
Condensed Notes to Unaudited Consolidated Financial
Statements
September 30, 2021
Income taxes
The Company accounts for income taxes pursuant
to the provision of ASC 740-10, “Accounting for Income Taxes” (“ASC 740-10”), which requires, among other things,
an asset and liability approach to calculating deferred income taxes. The asset and liability approach require the recognition of deferred
tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax
bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes
it is more likely than not that the net deferred asset will not be realized.
The Company follows the provision of ASC 740-10
related to Accounting for Uncertain Income Tax Positions. When tax returns are filed, there may be uncertainty about the merits of positions
taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of
a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes
it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes,
if any. Tax positions taken are not offset or aggregated with other positions.
Tax positions that meet the more likely than not
recognition threshold is measured at the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement
with the applicable taxing authority. The portion of the benefit associated with tax positions taken that exceed the amount measured as
described above should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated
interest and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions are all
more likely than not to be upheld upon examination. As such, the Company has not recorded a liability for uncertain tax benefits.
The federal and state income tax returns of the
Company are subject to examination by the IRS and state taxing authorities, generally for three years after they are filed.
Research and development
In accordance with ASC 730-10, “Research
and Development-Overall,” research and development costs are expensed when incurred. During the nine months ended September
30, 2021 and 2020, research and development costs were $500 and $3,500, respectively, and are included in general and administrative expenses
on the accompanying consolidated statements of operations.
Net loss per share of common stock
Basic net loss per share is
computed by dividing the net loss by the weighted average number of common shares during the period. Diluted net loss per share is computed
using the weighted average number of common shares and potentially dilutive securities outstanding during the period. At September
30, 2021 and December 31, 2020, the Company had 50,000,000 potentially dilutive securities outstanding related to Series A Preferred Stock,
for both periods. Those potentially dilutive common stock equivalents were excluded from the dilutive loss per share calculation as they
would be antidilutive due to the net loss.
Impairment of long-lived assets
In accordance with ASC
360-10, “Long-lived assets,” which include property and equipment and intangible assets, are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived
assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows
expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment
charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the assets. Fair value is generally
determined using the asset’s expected future discounted cash flows or market value, if readily determinable.
Leases
In February 2016, the Financial Accounting Standards
Board (“FASB”) issued ASU 2016-02, Leases (Topic 842). The updated guidance requires lessees to recognize lease assets
and lease liabilities for most operating leases. In addition, the updated guidance requires that lessors separate lease and non-lease
components in a contract in accordance with the new revenue guidance in ASC 606. This guidance is effective for interim and annual reporting
periods beginning after December 15, 2018. The Company adopted this guidance effective January 1, 2019.
On January 1, 2019, the Company adopted ASU No.
2016-02, applying the package of practical expedients to leases that commenced before the effective date whereby the Company elected to
not reassess the following: (i) whether any expired or existing contracts contain leases and; (ii) initial direct costs for any existing
leases. For contracts entered into on or after the effective date, at the inception of a contract the Company assessed whether the contract
is, or contains, a lease. The Company’s assessment is based on: (1) whether the contract involves the use of a distinct identified
asset, (2) whether we obtain the right to substantially all the economic benefit from the use of the asset throughout the period, and
(3) whether it has the right to direct the use of the asset. The Company will allocate the consideration in the contract to each lease
component based on its relative stand-alone price to determine the lease payments.
Signet International Holdings, Inc. and Subsidiaries
Condensed Notes to Unaudited Consolidated Financial
Statements
September 30, 2021
Operating lease ROU assets represents the right
to use the leased asset for the lease term and operating lease liabilities are recognized based on the present value of future minimum
lease payments over the lease term at commencement date. As most leases do not provide an implicit rate, the Company use an incremental
borrowing rate based on the information available at the adoption date in determining the present value of future payments. Lease expense
for minimum lease payments is amortized on a straight-line basis over the lease term and is included in general and administrative expenses
in the consolidated statements of operations.
Recent accounting pronouncements
Accounting standards which are not yet effective
are not expected to have a material impact on the Company’s financial position or results of operations.
Note 4 - Stockholders’ Equity
The authorized capital stock consists of 100,000,000
shares of common stock and 50,000,000 shares of preferred stock.
Preferred stock
The Board of Directors has the authority, without
further action by the shareholders, to issue, from time to time, preferred stock in one or more series for such consideration and with
such relative rights, privileges, preferences and restrictions that the Board may determine. The preferences, powers, rights and restrictions
of different series of preferred stock may differ with respect to dividend rates, amounts payable on liquidation, voting rights, conversion
rights, redemption provisions, sinking fund provisions and purchase funds and other matters. The issuance of preferred stock could adversely
affect the voting power or other rights of the holders of common stock.
On March 14, 2007, the Company formally designated
a series of Super Voting Convertible Preferred Stock (the “Series A Super Voting Preferred Stock”) of the Company’s 50,000,000
authorized shares of the capital preferred stock of the Corporation. The designated Series A Super Voting Convertible Preferred
Stock, consists of 5,000,000 shares, par value $.001 per share, which shall have the following preferences, powers, designations and other
special rights:
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Voting and conversion:
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Holders of the Series A Super Voting Convertible Preferred Stock shall have ten votes per share held on all matters submitted to the shareholders of the Company for a vote thereon. Each holder of these shares shall have the option to appoint two additional members to the Board of Directors. Each share shall be convertible into ten (10) shares of common stock. The Company may redeem at $0.10 per share with 30 days’ notice.
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Dividends:
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The holders of Series A Super Voting Convertible Preferred Stock shall be entitled to receive dividends or distributions on a pro rata basis with the holders of common stock when and if declared by the Board of Directors of the Company. Dividends shall not be cumulative. No dividends or distributions shall be declared or paid or set apart for payment on the Common Stock in any calendar year unless dividends or distributions on the Series A Preferred Stock for such calendar year are likewise declared and paid or set apart for payment. No declared and unpaid dividends shall bear or accrue interest.
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Liquidation Preference:
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Upon the liquidation, dissolution and winding up of the Company, whether voluntary or involuntary, the holders of the Series A Super Voting Convertible Preferred Stock then outstanding shall be entitled to, on a pro-rata basis with the holders of common stock, distributions of the assets of the Corporation, whether from capital or from earnings available for distribution to its stockholders.
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There were 5,000,000 shares of Series A convertible preferred stock
issued and outstanding as of September 30, 2021 and December 31, 2020.
Signet International Holdings, Inc. and Subsidiaries
Condensed Notes to Unaudited Consolidated Financial
Statements
September 30, 2021
Common stock
During the Nine months
ended September 30, 2021:
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●
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Between January 2021 and March 2021, the Company issued an aggregate of 22,000 shares of common stock to two consultants of the Company for services rendered with fair value of $3,400 or an average of approximately $0.15 per share, based on the quoted trading price on the date of grants.
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Between February 2021 and March 2021, the Company received total gross proceeds of $33,750 or an average of approximately $0.08 per share, from the sale of 450,000 shares of the Company’s common stock.
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In April 2021, the Company received total gross proceeds of $14,981 or an average of approximately $0.07 per share, from the sale of 214,018 shares of the Company’s common stock. A portion of the 214,018 shares of common stock were not issued and has been recorded as common stock issuable as of September 30, 2021. In July 2021, the Company issued 150,000 shares and the balance of 64,018 shares remains to be issued.
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Note 5 - Commitments and Contingencies
Operating lease
In January 2018, the Company entered into a one-year
sub-lease agreement related to its leased office facilities in West Palm Beach, FL with the CEO of the Company. The lease was to
automatically be extended for successive one-year renewal terms not to exceed 5 annual renewal terms in total unless the landlord or tenant
gives a written notice of non-renewal on or before 30 days prior to expiration of the term. The lease required monthly payments of
approximately $1,136 plus sales tax and the Company was not responsible for any additional charges for common area maintenance. The monthly
rent was to increase by 2% at the end of each year. On June 30, 2021, this sub-lease agreement was terminated.
On July 1, 2021, the Company entered into a one-year
lease agreement related to its leased office facilities in West Palm Beach, FL. The lease shall automatically be extended for successive
one-year renewal term not to exceed 5 annual renewal terms in total unless the landlord or tenant gives a written notice of non-renewal
on or before 30 days prior to expiration of the term. The lease currently requires monthly payments of approximately $1,500 plus
sales tax and the Company is not responsible for any additional charges for common area maintenance. The period beginning July 1, 2021
and ending August 31, 2021 will be a rent free period. The monthly rent will increase by 4% at the end of each year.
In adopting ASC Topic 842, Leases (Topic 842),
the Company has elected the ‘package of practical expedients’, which permit it not to reassess under the new standard its
prior conclusions about lease identification, lease classification and initial direct costs. On January 1, 2019, upon adoption of ASC
Topic 842, the Company recorded right-of-use assets of $45,645 and total lease liabilities of $45,645 based on an incremental borrowing
rate of 12%. On July 1, 2021, upon the commencement of the new one-year lease agreement, the Company reversed the remaining balance of
the Right of Use (“ROU”) Asset and the related operating lease liability associated with the sub-lease agreement entered into
January 2018. In addition, the Company elected not to apply ASC Topic 842 to arrangements with lease terms of 12 months or less.
For the respective three months ended September
30, 2021 and 2020, the Company recorded rent expense of $3,591 and $3,811 for rent under these agreements, respectively. For the respective
nine months ended September 30, 2021 and 2020, the Company recorded rent expense of $9,955 and $11,434 for rent under these agreements,
respectively.
Right of Use Asset is summarized below:
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As of
September 30, 2021
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As of
December 31, 2020
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(Unaudited)
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Operating lease, ROU Asset
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$
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45,645
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$
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45,645
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Less: Accumulated amortization
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(26,265
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)
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(20,368
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)
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Reversal of remaining balance due to termination
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(19,381
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)
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-
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Balance of ROU asset
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$
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-
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$
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25,277
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Signet International Holdings, Inc. and Subsidiaries
Condensed Notes to Unaudited Consolidated Financial
Statements
September 30, 2021
Operating lease
liability related to the ROU asset is summarized below:
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As of
September 30, 2021
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As of
December 31, 2020
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(Unaudited)
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Operating lease liability
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$
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45,645
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$
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45,645
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Reduction of lease liability
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(25,627
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)
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(19,802
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)
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Total
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20,018
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25,843
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Less: current portion
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-
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(12,007
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)
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Less: reversal of remaining balance due to termination
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(20,018
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)
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-
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Long term portion of lease liability
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$
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-
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$
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13,836
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Option agreements
In November 2018, the Company entered into an
Option Agreement (the “November 2018 Option Agreement”) whereby the licensor agreed to grant an option to exclusively license
to the Company patents owned or controlled by licensor. The licensor is a University located in the state of Florida. The licensed patents
are related to technology for graphene foam coating and deicing. The option period commenced on the effective date of this November 2018
Option Agreement and expired 6 months from the effective date unless terminated by either party by giving 30 days written notice. During
the option period, the Company shall reimburse the licensor for all patent related expenses incurred during the term of this agreement
in connection with obtaining or maintaining the patent rights. The Company paid an option fee of $1,500 on the date of this agreement
which was recorded in professional and consulting fees during calendar year 2018. In May 2019, the Company entered into an amendment agreement
to extend the option period to August 2019. In October 2020, the Company entered into an exclusive licensing agreement with this licensor
(see discussion below).
In March 2019, the Company entered into an Option
Agreement (the “March 2019 Option Agreement”) whereby the licensor agreed to grant an option to exclusively license to the
Company patents owned or controlled by licensor. The licensor is a University located in the state of Florida. The licensed patents are
related to technology for rechargeable battery device. The option period commenced on the effective date of this March 2019 Option Agreement
and expires 12 months from the effective date unless terminated by either party by giving 30 days written notice. During the option period,
the Company shall reimburse the licensor for all patent related expenses incurred during the term of this agreement in connection with
obtaining or maintaining the patent rights. The Company paid an option fee of $5,000 on the date of this agreement which was recorded
in professional and consulting fees during calendar year 2019. In October 2020, the Company entered into an exclusive licensing agreement
with this licensor (see discussion below).
In August 2019, the Company entered into an Option
Agreement (the “August 2019 Option Agreement”) whereby the licensor agreed to grant an option to exclusively license to the
Company patents owned or controlled by licensor. The licensor is a University located in the state of Florida. The licensed patents are
related to technology for detecting melanoma cancer. The option period commenced on the effective date of this August 2019 Option Agreement
and expires in August 2020 unless terminated by the Company by giving 30 days written notice. During the option period, the Company shall
reimburse the licensor for all patent related expenses incurred during the term of this agreement in connection with obtaining or maintaining
the patent rights. The Company paid an option fee of $1,200 on the date of this agreement which was recorded in professional and consulting
fees during calendar year 2019. In August 2020, the Company entered into an amendment agreement to extend the option period to August
31, 2021 unless sooner terminated by the execution of a license agreement between the parties. All other provision of this option agreement
shall remain in full force and effect and unmodified by this amendment. The option period for this option agreement has expired.
In September 2019, the Company entered into an
Option Agreement (the “September 2019 Option Agreement”) whereby the licensor agreed to grant an option to exclusively license
to the Company patents owned or controlled by licensor. The licensor is a University located in the state of Florida. The licensed patents
are related to technology for self-sterilizing device using plasma fields. The option period commenced on the effective date of this September
2019 Option Agreement and expires in September 2020 unless terminated by the Company by giving 30 days written notice. During the option
period, the Company shall reimburse the licensor for all patent related expenses incurred during the term of this agreement in connection
with obtaining or maintaining the patent rights. The Company paid an option fee of $1,200 on the date of this agreement which was recorded
in professional and consulting fees during calendar year 2019. In July 2020, the Company entered into an amendment agreement to extend
the option period to September 30, 2021 unless sooner terminated by the execution of a license agreement between the parties. All other
provision of this option agreement shall remain in full force and effect and unmodified by this amendment. The option period for this
option agreement has expired.
Signet International Holdings, Inc. and Subsidiaries
Condensed Notes to Unaudited Consolidated Financial
Statements
September 30, 2021
In September 2019, the Company entered into an
Option Agreement (the “September 11, 2019 Option Agreement”) whereby the licensor agreed to grant an option to exclusively
license to the Company patents owned or controlled by licensor. The licensor is a University located in the state of Florida. The licensed
patents are related to technology for low-cost disposable medical sensor for heart-attack. The option period commenced on the effective
date of this September 11, 2019 Option Agreement and expires in September 2020 unless terminated by the Company by giving 30 days written
notice. During the option period, the Company shall reimburse the licensor for all patent related expenses incurred during the term of
this agreement in connection with obtaining or maintaining the patent rights. The Company paid an option fee of $1,200 on the date of
this agreement which was recorded in professional and consulting fees during calendar year 2019. In July 2020, the Company requested the
licensor to grant the Company an extension for this option agreement. After the Company’s initial request, the Company notified
the licensor of exercising the option and request for a licensing agreement. Despite the repeated efforts from the Company, the licensor
did not respond. As a result, such option agreement has expired.
In September 2019, the Company entered into an
Option Agreement (the “September 13, 2019 Option Agreement”) whereby the licensor agreed to grant an option to exclusively
license to the Company patents owned or controlled by licensor. The licensor is a University located in the state of Florida. The licensed
patents are related to technology for multifunctional oral prosthetic system. The option period commenced on the effective date of this
September 13, 2019 Option Agreement and expires in September 2020 unless terminated by the Company by giving 30 days written notice.
During the option period, the Company shall reimburse the licensor for all patent related expenses incurred during the term of this agreement
in connection with obtaining or maintaining the patent rights. The Company paid an option fee of $1,200 on the date of this agreement
which was recorded in professional and consulting fees during calendar year 2019. In July 2020, the Company requested the licensor to
grant the Company an extension for this option agreement. After the Company’s initial request, the Company notified the licensor
of exercising the option and request for a licensing agreement. Despite the repeated efforts from the Company, the licensor did not respond.
As a result, such option agreement has expired.
In
October 2019, the Company entered into an Option Agreement (the “October 2019 Option Agreement”) whereby the licensor agreed
to grant an option to exclusively license to the Company patents owned or controlled by licensor. The licensor is a University located
in the state of Florida. The licensed patents are related to technology for arc melted glass piles for structural foundations. The option
period commenced on the effective date of this October 2019 Option Agreement and expires in October 2020 unless terminated by the Company
by giving 30 days written notice. During the option period, the Company shall reimburse the licensor for all patent related expenses incurred
during the term of this agreement in connection with obtaining or maintaining the patent rights up to a maximum of $3,500. The Company
paid an option fee of $1,500 on the date of this agreement which was recorded in professional and consulting fees during calendar
year 2019. In October 2020, the Company entered into an amendment agreement to extend the option period to October 15, 2021. The option
period for this option agreement has expired.
Exclusive licensing agreements
On October 30, 2020, the (“Effective Date”)
the Company entered into an exclusive licensing agreement with a University for the licensed patents related to the technology for graphene
foam coating and deicing. The term of this license shall continue until licensee permanently discontinue the sale of any licensed products
or unless terminated pursuant to the terms of this agreement. Licensee may grant written sublicenses to third parties. However, the licensee
shall notify the University of the initiation of the license negotiation. Licensee may terminate this agreement by giving at least sixty
days written notice to University. The University may terminate this agreement by giving the licensee at least thirty days written notice
upon the occurrence of certain events as defined in the agreement.
The Company agreed to pay license issue fee of
$5,000 in two separate installments. The first installment of $1,500 shall be made within thirty days of the Effective Date and the second
installment of $3,500 at the first anniversary of the effective date. The Company paid the $1,500 first installment in November 2020.
Additionally, the Company agreed to pay certain
royalty payments as follows:
(i) 5.5% for Net Revenues
of licensed products; and
(ii) 5.5% for Net Revenues
of licensed processes.
Furthermore, the Company agrees to pay Licensor
minimum royalty payments, as follows:
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Payment
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Year
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$
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2,000
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2021
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$
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3,000
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2022
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$
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5,000
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2023
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$
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10,000
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2024 and every year thereafter on the same date, for the life of this License Agreement.
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Signet International Holdings, Inc. and Subsidiaries
Condensed Notes to Unaudited Consolidated Financial
Statements
September 30, 2021
The first minimum royalty payment shall be due on December 31, 2021
for calendar year 2021.
On October 30, 2020, the (“Effective Date”)
the Company entered into an exclusive licensing agreement with a University for the licensed patents related to the technology for rechargeable
battery device. The term of this license shall continue until licensee permanently discontinue the sale of any licensed products or unless
terminated pursuant to the terms of this agreement. Licensee may grant written sublicenses to third parties. However, the licensee shall
notify the University of the initiation of the license negotiation. Licensee may terminate this agreement by giving at least sixty days
written notice to University. The University may terminate this agreement by giving the licensee at least thirty days written notice upon
the occurrence of certain events as defined in the agreement.
The Company agreed to pay license issue fee of
$5,000 in two separate installments. The first installment of $1,418 shall be made within thirty days of the Effective Date and the second
installment of $3,582 at the first anniversary of the effective date. The Company paid the $1,418 first installment in November 2020.
Additionally, the Company agreed to pay certain
royalty payments as follows:
(i) 5.5% for Net Revenues
of licensed products; and
(ii) 5.5% for Net Revenues
of licensed processes.
Furthermore, the Company agrees to pay Licensor
minimum royalty payments, as follows:
|
Payment
|
|
Year
|
|
|
$
|
2,000
|
|
2021
|
|
|
$
|
3,000
|
|
2022
|
|
|
$
|
5,000
|
|
2023
|
|
|
$
|
10,000
|
|
2024 and every year thereafter on the same date, for the life of this License Agreement.
|
|
The first minimum royalty payment shall be due on December 31, 2021
for calendar year 2021.
Distributor agreement
On January 18, 2021, The Company has executed
an Exclusive Distributor Agreement with Jarada, Inc. Ltd (“Jarada”) of Seoul Korea The Agreement appoints Jarada an
exclusive South Korean territorial distribution rights to all of the Company’s Graphene products that will be developed and made
available for worldwide commercialization. The Company shall pay Jarada 15% commission on all sales made by Jarada of the Company’s
Graphene products. The term of this agreement is for two years from the date of execution and shall automatically renewed unless either
party provides notice of termination. No sales of the Graphene products has occurred during the nine months ended September 30, 2021.
Note 6 - Related Party Transactions
The Company paid rental fees for personal housing
of $2,100 and $6,300 during the nine months ended September 30, 2021 and 2020, respectively, to an affiliated company owned by the CEO
of the Company which was recorded as compensation to the CEO and included in general and administrative expenses as reflected in the accompanying
consolidated statements of operations.
In January 2018, the Company entered into a one-year
sub-lease agreement related to its leased office facilities in Palm Beach, FL with the previous CEO of the Company. The lease shall
automatically be extended for successive one-year renewal term not to exceed 5 annual renewal terms in total unless the landlord or tenant
gives a written notice of non-renewal on or before 30 days prior to expiration of the term. The lease currently requires monthly
payments of approximately $1,136 plus sales tax and the Company is not responsible for any additional charges for common area maintenance.
The monthly rent will increase by 2% at the end of each year. On July 1, 2021, the Company entered into a one-year lease agreement with
the landlord which replaces the sub-lease agreement with the previous CEO of the Company (see Note 5).
On May 21, 2021, a majority of the shareholders of
the Company, voted to appoint Alysia WolfsKeil, Esq. as the Interim Chief Executive Officer and Interim Chief Financial Officer, in order
to fulfill the positions within the Company left vacant by the recent passing of Ernesto W. Letiziano, the previous CEO and CFO of the
Company. Ms. WolfsKeil is the daughter of Ernesto W. Letiziano, the previous CEO and CFO of the Company. Ms. WolfsKeil, Esq. shall have
limited powers in her positions, specifically she shall be empowered to direct all relevant services providers of the Company as they
relate to any and all such filings with the SEC, gain access and be provided banking authority over any and all bank accounts or other
trade accounts in the name of the Company, and enter into negotiations with potential third parties who may be considered potential acquisition
targets of the Company. Ms. WolfsKeil, Esq. shall serve the shorter of a) her termination by the shareholders or b) six months from the
May 21, 2021 and will received $10,000 per month. Ms. WolfsKeil was paid $10,000 on September 28, 2021 for services related to keeping
the Company’s required public filings current. As of September 30, 2021, accrued compensation to Ms. WolfsKeil amounted $33,000
(from June 21, 2021 to September 30, 2021) and was included in accounts payable and accrued expenses in the unaudited consolidated balance
sheet.