The following discussion should be read in conjunction with the Financial Statements of our Company and notes thereto included elsewhere in this report.
Forward-Looking Statements
The following information specifies certain forward-looking statements of the management of our Company. Forward-looking statements are statements that estimate the happening of future events and are not based on historical fact. Forward-looking statements may be identified by the use of forward-looking terminology, such as "may," "shall," "could," "expect," "estimate," "anticipate," "predict," "probable," "possible," "should," "continue," or similar terms, variations of those terms or the negative of those terms. The forward-looking statements in this annual report on Form 10-K have been compiled by our management on the basis of assumptions made by management and considered by management to be reasonable. Our future operating results, however, are impossible to predict and no representation, guaranty, or warranty is to be inferred from those forward-looking statements.
All forward-looking statements in this annual report on Form 10-K are based on information available to us as of the date of this annual report on Form 10-K, and we assume no obligation to update any forward-looking statements.
Business Overview
Per the schedule 14C filed on
The Company's strategy is to develop and commercialize, on a worldwide basis, various intellectual property rights (patents, patent applications, know how, etc.) relating to a series of encapsulated products that incorporate proprietary derivatives of the chemokine CXCL12 for creating a zone of immunoprotection around cells, tissues, organs and devices for therapeutic purposes. The product name VICAPSYN™ is the Company's proprietary product line that is applied to transplantation therapies and related stem-cell applications in the transplantation field.
Results of Operations
The Year Ended
Revenues
The Company did not have any revenues for the years ended
Expenses
Operating expenses consist of personnel costs, research and development
expenses, professional fees, travel expenses and general and administrative
expenses. Our total operating expenses for the year ended
28
Year-over year increases in general and administrative expenses of
Other Income
There was no other income or other expenses for the year ended
Net Loss
As a result of the foregoing, the Company had a net loss of
Liquidity and Capital Resources
The Company is not currently generating revenues. At
In
In
However, we will require additional capital to meet our liquidity needs and do
not believe that we have enough cash on hand to operate our business during the
next 12 months. We anticipate we will need to raise an additional
To date, we have financed our operations through our sale of equity and debt securities. Failure to generate revenue or to raise funds could cause us to go out of business, which would result in the complete loss of your investment.
We did not generate revenues from operations for the year ended
Additionally, we will have to meet all the financial disclosure and reporting requirements associated with being a publicly reporting company. This additional corporate governance time required of management could limit the amount of time management has to implement our business plan and may impede the speed of our operations.
29 Operating Activities
For the year ended
For the year ended
Investing Activities
There were no investing activities from continuing operations for the year ended
Financing Activities
For the year ended
Off-Balance Sheet Arrangements
As of
Critical Accounting Policies
Our discussion and analysis of financial condition and results of operations is
based upon our consolidated financial statements, which have been prepared in
accordance with accounting principles generally accepted in
The methods, estimates and judgments we use in applying our most critical
accounting policies have a significant impact on the results that we report in
our consolidated financial statements. The
We believe the following critical accounting policies, among others, require significant judgments and estimates used in the preparation of our interim condensed consolidated financial statements.
30
Basis of Presentation and Principles of Consolidation
The accompanying consolidated financial statements are prepared in accordance
with
Emerging Growth Company
The Company qualifies as an "emerging growth company" under the Jumpstart Our Business Startups Act of 2012, as amended (the "JOBS Act"). Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. As an emerging growth company, the Company can delay the adoption of certain accounting standards until those standards would otherwise
Use of Estimates
The preparation of financial statements in conformity with
Cash
The Company considers all highly liquid investments with an original term of
three months or less to be cash equivalents. These investments are carried at
cost, which approximates fair value. The Company held no cash equivalents as of
Intangible Assets
Costs for intangible assets are accounted for through the capitalization of
those costs incurred in connection with developing or obtaining such assets.
Capitalized costs are included in intangible assets in the consolidated balance
sheets. The Company's intangible assets consist of costs incurred in connection
with securing an Exclusive Patent License Agreement with
As of
Long-Lived Assets
The Company recognizes impairment losses on long-lived assets used in operations
when indicators of impairment are present and the undiscounted cash flows
estimated to be generated by those assets are less than the assets' carrying
values. Management has reviewed the Company's long-lived assets for the years
ended
Equity Method Investment
The Company accounts for investments in which the Company owns more than 20% or
has the ability to exercise significant influence of the investee, using the
equity method in accordance with the
The investment of an investor is also adjusted to reflect the investor's share of changes in the investee's capital. Dividends received from an investee reduce the carrying amount of the investment. A series of operating losses of an investee or other factors may indicate that a decrease in value of the investment has occurred which is other than temporary, and which should be recognized even though the decrease in value is in excess of what would otherwise be recognized by application of the equity method.
31
In accordance with ASC 323-10-35-20 through 35-22, the investor ordinarily shall discontinue applying the equity method if the investment (and net advances) is reduced to zero and shall not provide for additional losses unless the investor has guaranteed obligations of the investee or is otherwise committed to provide further financial support for the investee. An investor shall, however, provide for additional losses if the imminent return to profitable operations by an investee appears to be assured. For example, a material, nonrecurring loss of an isolated nature may reduce an investment below zero even though the underlying profitable operating pattern of an investee is unimpaired. If the investee subsequently reports net income, the investor shall resume applying the equity method only after its share of that net income equals the share of net losses not recognized during the period the equity method was suspended.
Equity and cost method investments are classified as investments. The Company periodically evaluates its equity and cost method investments for impairment due to declines considered to be other than temporary. If the Company determines that a decline in fair value is other than temporary, then a charge to earnings is recorded as an impairment loss in the accompanying consolidated statements of operations.
Fair Value of Financial Instruments
ASC 825, "Disclosures about Fair Value of Financial Instruments," requires
disclosure of fair value information about financial instruments. ASC 820, "Fair
Value Measurements" defines fair value, establishes a framework for measuring
fair value in
The carrying amounts of the Company's financial assets and liabilities, such as cash, prepaid expenses, accounts payable and accrued liabilities, payables with related parties, approximate their fair values because of the short maturity of these instruments.
Revenue Recognition
Revenue recognition is accounted for under ASC Topic 606, "Revenue from Contracts with Customers" ("ASC 606") and all the related amendments.
The core principle of ASC 606 requires that an entity recognize revenue to
depict the transfer of promised goods or services to customers in an amount that
reflects the consideration to which the company expects to be entitled in
exchange for those goods or services. ASC 606 defines a five-step process to
achieve this core principle and, in doing so, it is possible more judgment and
estimates may be required within the revenue recognition process than required
under
The Company's contracts with customers are generally on a contract and work order basis and represent obligations that are satisfied at a point in time, as defined in the new guidance, generally upon delivery or has services are provided. Accordingly, revenue for each sale is recognized when the Company has completed its performance obligations. Any costs incurred before this point in time, are recorded as assets to be expensed during the period the related revenue is recognized.
Stock Based Compensation
Stock-based compensation is accounted for based on the requirements of ASC 718 - "Compensation -Stock Compensation," which requires recognition in the financial statements of the cost of employee, non-employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. The Company has elected to recognize forfeitures as they occur, and the cumulative impact of this change did not have any effect on the Company's consolidated financial statements and related disclosures.
32 Research and Development
Costs and expenses that can be clearly identified as research and development
are charged to expense as incurred. For the years ended
Income Taxes
The Company accounts for income taxes in accordance with ASC 740-10, Income Taxes. Deferred tax assets and liabilities are recognized to reflect the estimated future tax effects, calculated at the tax rate expected to be in effect at the time of realization. A valuation allowance related to a deferred tax asset is recorded when it is more likely than not that some portion of the deferred tax asset will not be realized. Deferred tax assets and liabilities are adjusted for the effects of the changes in tax laws and rates of the date of enactment.
ASC 740-10 prescribes a recognition threshold that a tax position is required to meet before being recognized in the financial statements and provides guidance on recognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition issues. Interest and penalties are classified as a component of interest and other expenses. To date, the Company has not been assessed, nor paid, any interest or penalties.
Uncertain tax positions are measured and recorded by establishing a threshold for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Only tax positions meeting the more-likely-than-not recognition threshold at the effective date may be recognized or continue to be recognized.
Earnings (Loss) Per Share
The Company reports earnings (loss) per share in accordance with ASC 260,
"Earnings per Share." Basic earnings (loss) per share is computed by dividing
net income (loss) by the weighted-average number of shares of common stock
outstanding during each period. Diluted earnings per share is computed by
dividing net loss by the weighted-average number of shares of common stock,
common stock equivalents and other potentially dilutive securities outstanding
during the period. As of
December 31, 2022 December 31, 2021 Common stock to be issued 727,281 11,067,281 Stock options 2,670,000 1,900,000
Warrants to purchase common stock - 4,060,060
3,397,281 17,027,281
The following is management's discussion and analysis of certain significant
factors that have affected our financial position and operating results during
the periods included in the accompanying consolidated financial statements, as
well as information relating to the plans of our current management. This report
includes forward-looking statements. Generally, the words "believes,"
"anticipates," "may," "will," "should," "expect," "intend," "estimate,"
"continue," and similar expressions or the negative thereof or comparable
terminology are intended to identify forward-looking statements. Such statements
are subject to certain risks and uncertainties, including the matters set forth
in this report or other reports or documents we file with the
33 Going Concern
The independent auditors' reports on our consolidated financial statements for
the years ended
While our financial statements are presented on the basis that we are a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business over a reasonable length of time, our auditors have raised a substantial doubt about our ability to continue as a going concern.
Off Balance Sheet Arrangements
We have no off-balance sheet arrangements including arrangements that would affect our liquidity, capital resources, market risk support and credit risk support or other benefits.
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