UNITED STATES

SECURITY AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

____________________

FORM 10-Q

____________________

(MARK ONE)

[X]☒     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2017June 30, 2021

or

[_]☐     TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

Commission File Number:333-170315

GlobeStar Therapeutics Corporation

AngioSoma Inc.

(Exact name of registrant as specified in its charter)

Wyoming27-3480481

Nevada

27-3480481

(State or other jurisdiction of Incorporation or organization)

(I.R.S. Employer Identification Number)

2500 Wilcrest Drive, 3rd Floor
Houston, TX719 Jadwin Avenue, Richland, WA

77042

99352

(Address of principal executive offices)

(Zip code)

 

Registrant’s telephone number, including area code: 832-781-8521206-451-1970

Angiosoma Inc.

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

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

Yes [X] No [_]

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

Yes [X] No [_]

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

Large accelerated filer

[_]

☐

Accelerated filer

[_]

☐

Non-accelerated filer

[_]

☐

Smaller reporting company

[X]

☐

(Do not check is smaller reporting company)

Emerging growth company

[_]

☒

 

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

[_]

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

Yes [_] No [X]

Securities registered pursuant to Section 12(b) of the Act: None.

Title of each classTrading SymbolName of each exchange on which registered
CommonGSTCN/A

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. As of February 14, 2018, 52,084,067August 20, 2021, 546,495,726 shares of common stock are issued and outstanding.


TABLE OF CONTENTS


PART I — FINANCIAL INFORMATION

4

Item 1. Financial Statements

4

Consolidated Balance Sheets as of December 31, 2017June 30, 2021 (Unaudited) and September 30, 2017 (Unaudited)2020

4

Consolidated Statements of Operations for the Three and Nine Months Ended December 31, 2017June 30, 2021 and 20162020 (Unaudited)

5

Consolidated Statements of Comprehensive IncomeStockholders’ Deficit for the Three and Nine Months Ended December 31, 2017June 30, 2021 and 20162020 (Unaudited)

6

Consolidated Statement of Changes in Stockholders’ Equity for the Three Months Ended December 31, 2017 (Unaudited)

7

Consolidated Statements of Cash Flows for the ThreeNine Months Ended December 31, 2017June 30, 2021 and 20162020 (Unaudited)

8

7

Notes to the Unaudited Consolidated Financial Statements

9

8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

13

14

Item 3. Quantitative and Qualitative Disclosures about Market Risk

14

16

Item 4. Controls and Procedures

14

16

PART II — OTHER INFORMATION

14

17

Item 1. Legal Proceedings

14

17

Item 1A. Risk Factors

14

17

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

15

17

Item 3. Defaults upon Senior Securities

15

17

Item 4. Mine Safety Disclosures

15

17

Item 5. Other Information

15

17

Item 6. Exhibits

15

18
SIGNATURES19


- 2 -


CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION


Certain statements in this report contain or may contain forward-looking statements. These statements, identified by words such as “plan”, “anticipate”, “believe”, “estimate”, “should”, “expect” and similar expressions include our expectations and objectives regarding our future financial position, operating results and business strategy. These statements are subject to known and unknown risks, uncertainties and other factors, which may cause actual results, performance, or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward - looking statements. These forward-looking statements were based on various factors and were derived utilizing numerous assumptions and other factors that could cause our actual results to differ materially from those in the forward-looking statements. These factors include, but are not limited to, our ability to secure suitable financing to continue with our existing business or change our business and conclude a merger, acquisition or combination with a business prospect, economic, political and market conditions and fluctuations, government and industry regulation, interest rate risk, U.S. and global competition, and other factors. Most of these factors are difficult to predict accurately and are generally beyond our control. You should consider the areas of risk described in connection with any forward-looking statements that may be made herein. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. Readers should carefully review this report in its entirety, including but not limited to our financial statements and the notes thereto and the risks described in our Annual Report on Form 10-K for the fiscal year ended September 30, 2017.2020. We advise you to carefully review the reports and documents we file from time to time with the Securities and Exchange Commission (the “SEC”), particularly our quarterly reports on Form 10-Q and our current reports on Form 8-K. Except for our ongoing obligations to disclose material information under the Federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events.


OTHER PERTINENT INFORMATION


When used in this report, the terms, “we,” the “Company,” “our,” and “us” refers to AngioSoma Inc., a Nevada corporation and its subsidiaries unless the context specifically indicates otherwise.


- 3 -


PART I — FINANCIAL INFORMATION


ITEM 1. FINANCIAL STATEMENTS


GLOBESTAR THERAPEUTICS CORPORATION

(formerly known as: ANGIOSOMA INC.)

CONSOLIDATED BALANCE SHEETSHEETS

DECEMBER 31, 2017 and SEPTEMBER 30, 2017

(UNAUDITED)

   June 30,
2021		 September 30,
2020		 
   (Unaudited)    
CURRENT ASSETS       
Cash and cash equivalents $20,476 $81,442 
Prepaid expenses  —  4,783 
Inventory  —  2,412 
Total current assets  20,476  88,637 
        
Fixed assets, net  —  1,275 
        
TOTAL ASSETS $20,476 $89,912 
        
LIABILITIES AND STOCKHOLDERS’ DEFICIT       
Current Liabilities       
Accounts payable and accrued liabilities $217,500 $133,467 
Accounts payable to related party  57,155  173,568 
Advances payable  59,650  59,650 
Current portion of convertible notes payable, net of discount of $3,287 and $34,923 respectively  88,713  155,077 
Current portion of accrued interest payable  226,213  227,372 
        
Total current liabilities  649,231  749,134 
        
TOTAL LIABILITIES  649,231  749,134 
        
COMMITMENTS AND CONTINGENCIES       
        
STOCKHOLDERS’ DEFICIT       
Common stock, $0.001 par value, unlimited shares authorized; 476,832,632 and 436,218,342 shares issued and outstanding at June 30, 2021 and September 30, 2020, respectively  476,832  436,217 
Preferred stock; 20,000,000 shares authorized:       
Series A Preferred Stock, $0.001 par value, 6,000,000 shares authorized, 0 and 0 shares issued and outstanding at June 30, 2021 and September 30, 2020, respectively  0  0 
Series D Preferred Stock, $0.001 par value, 509,988 shares authorized; 509,988 shares issued and outstanding at June 30, 2021 and September 30, 2020, respectively  510  510 
Series E Preferred Stock, $0.001 par value, 1,000,000 shares authorized; 1,000,000 shares issued and outstanding at June 30, 2021 and September 30, 2020, respectively  1,000  1,000 
Series F Preferred Stock; $0.001 par value 386,975 shares authorized;  386,975 shares issued and outstanding at June 30, 2021 and September 30, 2020, respectively  387  387 
Additional paid-in capital  10,835,078  6,118,002 
Stock payable, consisting of 25,980,000 and 0 shares to be issued at June 30, 2021 and September 30, 2020, respectively  811,500  — 
Accumulated deficit  (12,754,062) (7,215,338)
        
TOTAL STOCKHOLDERS’ DEFICIT  (628,755) (659,222)
        
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT $20,476 $89,912 


 

 

December 31, 2017

 

September 30, 2017

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

65,253

 

$

14,100

 

Prepaid expenses

 

 

750

 

 

750

 

Total current assets

 

 

66,003

 

 

14,850

 

 

 

 

 

 

 

 

 

Available for sale securities, at market value

 

 

11,644

 

 

9,703

 

Intellectual property, net of impairment of $2,990,535

 

 

—

 

 

—

 

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

$

77,647

 

$

24,553

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

$

148,276

 

$

137,123

 

Accounts payable to related party

 

 

248,063

 

 

141,059

 

Advances payable

 

 

59,650

 

 

59,650

 

Current portion of convertible notes payable, net of discount of $3,000 and $0, respectively

 

 

85,000

 

 

20,000

 

Current portion of accrued interest payable

 

 

147,470

 

 

147,023

 

Total current liabilities

 

 

688,459

 

 

504,855

 

 

 

 

 

 

 

 

 

Accrued interest payable

 

 

72,329

 

 

74,880

 

Note payable

 

 

68,793

 

 

68,793

 

TOTAL LIABILITIES

 

 

829,581

 

 

648,528

 

 

 

 

 

 

 

 

 

COMMITMENTS AND CONTINGENCIES

 

 

—

 

 

—

 

 

 

 

 

 

 

 

 

STOCKHOLDERS’ DEFICIT

 

 

 

 

 

 

 

Common stock, $0.001 par value; 480,000,000 shares authorized; 52,084,067 and 45,584,067 shares issued and outstanding at December 31, 2017 and September 30, 2017, respectively

 

 

52,084

 

 

45,584

 

Preferred stock, $0.001 par value; 20,000,000 shares authorized:

 

 

 

 

 

 

 

Series A Preferred Stock, 5,000,000 shares issued and outstanding at December 31, 2017 and September 30, 2017

 

 

2,990,535

 

 

2,990,535

 

Series B Preferred Stock, $0.001 par value; 30,000 shares issued and outstanding at December 31, 2017 and September 30, 2017

 

 

—

 

 

30

 

Series D Preferred Stock, $0.001 par value; 509,988 shares issued and outstanding at December 31, 2017 and September 30, 2017

 

 

510

 

 

510

 

Series E Preferred Stock, $0.001 par value; 1,000,000 shares issued and outstanding at December 31, 2017 and September 30, 2017

 

 

1,000

 

 

1,000

 

Series F Preferred Stock; $0.001 par value; 471,975 shares issued and outstanding at December 31, 2017 and September 30, 2017

 

 

472

 

 

472

 

Additional paid-in capital

 

 

1,849,638

 

 

1,520,658

 

Accumulated other comprehensive income

 

 

971

 

 

(970

)

Accumulated deficit

 

 

(5,647,144

)

 

(5,181,794

)

Total stockholders’ deficit

 

 

(751,934

)

 

(623,975

)

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

$

77,647

 

$

24,553

 


The accompanying notesfootnotes are an integral part of these unaudited consolidated financial statements.


- 4 -


GLOBESTAR THERAPEUTICS CORPORATION

(formerly known as: ANGIOSOMA INC.)

CONSOLIDATED STATEMENTSTATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED DECEMBER 31, 2017 AND 2016(UNAUDITED)

(UNAUDITED)

               
  Three Months Ended  Nine Months Ended 
  June 30,  June 30, 
  2021  2020  2021  2020 
             
REVENUE $—  $—  $—  $77 
Cost of goods sold  —   —   2,412   14 
                 
Gross margin  —   —   (2,412)  63 
                 
OPERATING EXPENSES                
General and administrative expenses  4,478,111   48,563   5,006,455   174,248 
Total operating expenses  4,478,111   48,563   5,006,455   174,248 
                 
LOSS FROM OPERATIONS  (4,478,111)  (48,563)  (5,008,867)  (174,185)
                 
OTHER INCOME (EXPENSE)                
Loss on settlement of liabilities  (5,438)  —   (317,200)  — 
Interest expense  (34,949)  (39,422)  (212,657)  (193,149)
Total other income (expense)  (40,387)  (39,422)  (529,857)  (193,149)
                 
Net loss $(4,518,498) $(87,985) $(5,538,724) $(367,334)
                 
Net loss per common share $(0.01) $(0.00) $(0.01) $(0.00)
                 
Weighted average shares outstanding - basic and diluted  476,727,678   345,243,279   464,087,148   256,827,577 


 

Three Months Ended December 31,

 

 

2017

 

2016

 

REVENUE

$

—

 

$

—

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

General and administrative expenses

 

128,695

 

 

236,838

 

Total operating expenses

 

(128,695

)

 

(236,838

)

 

 

 

 

 

 

 

LOSS FROM OPERATIONS

 

(128,695

)

 

(236,838

)

 

 

 

 

 

 

 

OTHER INCOME (EXPENSE)

 

 

 

 

 

 

Loss on conversion

 

(335,450

)

 

—

 

Interest expense

 

(1,205

)

 

(80,576

)

 

 

 

 

 

 

 

NET LOSS

$

(465,350

)

$

(317,414

)

 

 

 

 

 

 

 

NET LOSS PER COMMON SHARE – Basic and diluted

$

(0.01

)

$

(0.01

)

 

 

 

 

 

 

 

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING – Basic and diluted

 

51,356,893

 

 

36,241,378

 


The accompanying notesfootnotes are an integral part of these unaudited consolidated financial statements.


- 5 -


GLOBESTAR THERAPEUTICS CORPORATION

(formerly known as: ANGIOSOMA INC.)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOMESTOCKHOLDERS’ DEFICIT

FOR THE THREE MONTHS ENDED DECEMBER 31, 2017 AND 2016(UNAUDITED)

(UNAUDITED)

                                  
       Series A  Series D  Series E  Series F Additional      Total 
   Common stock  Preferred Stock  Preferred Stock  Preferred Stock  Preferred Stock  paid-in  Stock  Accumulated  Equity 
  Shares Par Shares Amount Shares Amount Shares Amount Shares Amount capital payable Deficit (Deficit) 
                              
Balance, September 30, 2020  436,218,342 $436,217  0 $—  509,988 $510  1,000,000 $1,000  386,975 $387 $6,118,002 $— $(7,215,338)$(659,222)
                                            
Common stock issued for conversion of convertible note payable and accrued interest  19,269,286  19,269  0  —  —  —  —  —  —  —  45,391  —  —  64,660 
Beneficial conversion discount on convertible notes payable  —  —  —  —  —  —  —  —  —  —  30,000  —  —  30,000 
Net loss for the three months ended December 31, 2020  —  —  —  —  —  —  —  —  —  —  —  —  (124,395) (124,395)
Balance, December 31, 2020  455,487,628 $455,486  0 $—  509,988 $510  1,000,000 $1,000  386,975 $387 $6,193,393 $— $(7,339,733)$(688,957)
                                            
Issuance of common stock and retirement of accrued compensation with former officer  2,600,000  2,600  —  —  —  —  —  —  —  —  132,600  312,000  —  447,200 
Common stock issued for conversion of convertible note payable and accrued interest  17,551,147  17,552  0  —  —  —  —  —  —  —  97,990  —  —  115,542 
Sale of common stock units for cash proceeds  —  —  —  —  —  —  —  —  —  —  —  499,500  —  499,500 
Repurchase of preferred stock from former officer  —  —  —  —  —  —  (1,000,000) (1,000) —  —  (324,000) —  —  (325,000)
Issuance of preferred stock to officer  —  —  —  —  —  —  1,000,000  1,000  —  —  324,000  —  —  325,000 
Settlement of accounts payable with related party  —  —  —  —  —  —  —  —  —  —  38,130  —  —  38,130 
Beneficial conversion discount on convertible notes payable  —  —  —  —  —  —  —  —  —  —  100,000  —  —  100,000 
Net loss for the three months ended March 31, 2021  —  —  —  —  —  —  —  —  —  —  —  —  (895,831) (895,831)
Balance, March 31, 2021  475,638,775  475,638  0  —  509,988  510  1,000,000  1,000  386,975  387  6,562,113  811,500  (8,235,564) (384,416)
                                            
Common stock issued for conversion of convertible note payable and accrued interest  1,193,857  1,194  0  —  —  —  —  —  —  —  33,786  —  —  34,980 
Beneficial conversion discount on convertible notes payable  —  —  —  —  —  —  —  —  —  —  30,000  —  —  30,000 
Stock-based compensation  —  —  —  —  —  —  —  —  —  —  4,209,179  —  —  4,209,179 
Net loss for the three months ended June 30, 2021  —  —  —  —  —  —  —  —  —  —  —  —  (4,518,498) (4,518,498)
Balance, June 30, 2021  476,832,632 $476,832  0 $—  509,988 $510  1,000,000  1,000  386,975  387  10,835,078  811,500  (12,754,062) (628,755)
                                            
Balance, September 30, 2019  170,467,283 $170,468  5,800,000 $4,590,535  509,988 $510  1,000,000 $1,000  386,975 $387 $1,225,272 $— $(6,673,607)$(685,435)
                                            
Common stock issued for conversion of convertible note payable and accrued interest  39,833,749  39,833  —  —  —  —  —  —  —  —  44,967  —  —  84,800 
Beneficial conversion discount on convertible notes payable  —  —  —  —  —  —  —  —  —  —  32,000  —  —  32,000 
Return of preferred shares and retirement of accrued compensation from legal settlement  —  —  (5,800,000) (4,590,535) —  —  —  —  —  —  4,703,339  —  —  112,804 
Net loss for the three months ended December 31, 2019  —  —  —  —  —  —  —  —  —  —  —  —  (161,037) (161,037)
Balance, December 31, 2019  210,301,032  210,301  0  —  509,988  510  1,000,000  1,000  386,975  387  6,005,578  —  (6,834,644) (616,868)
                                            
Common stock issued for conversion of convertible note payable and accrued interest  93,977,186  93,977  0  —  —  —  —  —  —  —  (24,017) —  —  69,960 
Beneficial conversion discount on convertible notes payable  —  —  —  —  —  —  —  —  —  —  60,000  —  —  60,000 
Net loss for the three months ended March 31, 2020  —  —  —  —  —  —  —  —  —  —  —  —  (118,312) (118,312)
Balance, March 31, 2020  304,278,218  304,278  0  —  509,988  510  1,000,000  1,000  386,975  387  6,041,561  —  (6,952,956) (605,220)
                                            
Common stock issued for conversion of convertible note payable and accrued interest  78,841,942  78,842  0  —  —  —  —  —  —  —  (41,742) —  —  37,100 
Beneficial conversion discount on convertible notes payable  —  —  —  —  —  —  —  —  —  —  35,000  —  —  35,000 
Net loss for the three months ended June 30, 2020  —  —  —  —  —  —  —  —  —  —  —  —  (87,985) (87,985)
Balance, June 30, 2020  383,120,160 $383,120  0 $—  509,988 $510  1,000,000  1,000  386,975  387  6,034,819  —  (7,040,941) (621,105)


 

Three Months Ended December 31,

 

 

2017

 

2016

 

NET LOSS

$

(465,350

)

$

(317,414

)

 

 

 

 

 

 

 

Change in fair value of available-for-sale securities

 

1,941

 

 

2,911

 

 

 

 

 

 

 

 

Comprehensive loss

$

(463,409

)

$

(314,503

)


The accompanying notesfootnotes are an integral part of these unaudited consolidated financial statements.


- 6 -


GLOBESTAR THERAPEUTICS CORPORATION

(formerly known as: ANGIOSOMA INC.)

CONSOLIDATED STATEMENTSTATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITYCASH FLOWS

FOR THE THREE MONTHS ENDED DECEMBER 31, 2017(UNAUDITED)

(UNAUDITED)

        
  Nine Months Ended 
  June 30, 
  2021  2020 
CASH FLOW FROM OPERATING ACTIVITIES:        
Net loss $(5,538,724) $(367,334)
Adjustments to reconcile net loss to net cash used in operating activities:        
 Stock compensation  4,534,179   — 
 Depreciation  1,275   1,169 
 Amortization of discount on convertible note payable  201,636   185,395 
 Loss on conversion of notes payable  —     
 Loss on settlement of liabilities  317,200   — 
Changes in operating assets and liabilities        
 Inventory  2,412   34 
 Prepaid expenses  4,783   (778)
 Accounts payable and accrued liabilities  84,035   (1,598)
 Accounts payable and accrued liabilities to related party  51,717   5,000 
 Accrued interest payable  11,021   7,754 
NET CASH (USED IN) OPERATING ACTIVITIES  (330,466)  (170,358)
         
CASH FLOWS FROM INVESTING ACTIVITIES        
 Cash used to acquire fixed assets  —   (1,782)
NET CASH (USED IN) INVESTING ACTIVITIES  —   (1,782)
         
CASH FLOWS FROM FINANCING ACTIVITIES        
 Proceeds from sale of common stock units  499,500   — 
 Repurchase of preferred stock from former officer  (325,000)  — 
 Proceeds from convertible notes payable, net  95,000   122,000 
NET CASH PROVIDED BY FINANCING ACTIVITIES  269,500   122,000 
         
NET CHANGE IN CASH AND CASH EQUIVALENTS  (60,966)  (50,140)
         
Cash and cash equivalents at beginning of period  81,442   100,459 
         
Cash and cash equivalents at end of period $20,476  $50,319 
         
Cash paid during the period for:        
 Interest $—  $— 
 Taxes $—  $— 
         
Noncash investing and financing transactions:        
Conversion of convertible notes payable and accrued interest into common stock $215,180  $191,860 
Beneficial conversion discount on convertible notes payable $160,000  $127,000 
Common shares issued to settle liabilities with former officer $130,000  $— 
Settlement of liabilities with related party $38,130  $— 
Return of Series A preferred shares and settlement of related party compensation $—  $4,703,339 


 

 

Common Stock

 

Series A
Preferred Stock

 

Series B
Preferred Stock

 

Series D
Preferred Stock

 

Series E
Preferred Stock

 

Series F
Preferred Stock

 

Additional
Paid In

 

Accumulated
Other
Comprehensive

 

Accumulated

 

Total
Equity

 

 

 

Shares

 

Amount

 

Shares

 

Amount

 

Shares

 

Amount

 

Shares

 

Amount

 

Shares

 

Amount

 

Shares

 

Amount

 

Capital

 

Income

 

Deficit

 

(Deficit)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE,
September 30, 2017

 

45,584,067

 

$

45,584

 

5,000,000

 

$

2,990,535

 

30,000

 

$

30

 

509,988

 

$

510

 

1,000,000

 

$

1,000

 

471,975

 

$

472

 

$

1,520,658

 

$

(970

)

$

(5,181,794

)

$

(623,975

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock issued for conversion of convertible notes

 

6,000,000

 

 

6,000

 

—

 

 

—

 

—

 

 

—

 

—

 

 

—

 

—

 

 

—

 

—

 

 

—

 

 

(6,000

)

 

—

 

 

—

 

 

—

 

Common stock issued for conversion of Series B Preferred Stock

 

500,000

 

 

500

 

—

 

 

—

 

(30,000

)

 

(30

)

—

 

 

—

 

—

 

 

—

 

—

 

 

—

 

 

6,780

 

 

—

 

 

—

 

 

7,250

 

Loss on conversion of debt

 

—

 

 

—

 

—

 

 

—

 

—

 

 

—

 

—

 

 

—

 

—

 

 

—

 

—

 

 

—

 

 

328,200

 

 

—

 

 

—

 

 

328,200

 

Net loss

 

—

 

 

—

 

—

 

 

—

 

—

 

 

—

 

—

 

 

—

 

—

 

 

—

 

—

 

 

—

 

 

—

 

 

—

 

 

(465,350

)

 

(465,350

)

Other comprehensive loss

 

—

 

 

—

 

—

 

 

—

 

—

 

 

—

 

—

 

 

—

 

—

 

 

—

 

—

 

 

—

 

 

—

 

 

1,941

 

 

—

 

 

1,941

 

BALANCE,
September 30, 2017

 

52,084,067

 

$

52,084

 

5,000,000

 

$

2,990,535

 

—

 

$

—

 

509,988

 

$

510

 

1,000,000

 

$

1,000

 

471,975

 

$

472

 

$

1,849,638

 

$

971

 

$

(5,647,144

)

$

(751,934

)


The accompanying notesfootnotes are an integral part of these unaudited consolidated financial statements.


- 7 -


GLOBESTAR THERAPEUTICS CORPORATION

(formerly known as: ANGIOSOMA INC.)

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED DECEMBER 31, 2017 AND 2016

(UNAUDITED)


 

 

Three Months Ended December 31,

 

 

 

2017

 

2016

 

CASH FLOW FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

Net loss

 

$

(465,350

)

$

(317,414

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

Stock compensation

 

 

—

 

 

199,870

 

Amortization of discount on convertible note payable

 

 

—

 

 

46,302

 

Loss on conversion

 

 

335,450

 

 

—

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

 

3,916

 

 

17,030

 

Accounts payable to related party

 

 

110,314

 

 

—

 

Accrued interest payable

 

 

1,823

 

 

31,260

 

NET CASH USED IN OPERATING ACTIVITIES

 

 

(13,847

)

 

(22,952

)

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

Proceeds from advances

 

 

—

 

 

5,000

 

Proceeds from convertible notes payable

 

 

65,000

 

 

—

 

Proceeds from sale of Series B Preferred Stock

 

 

—

 

 

12,500

 

NET CASH PROVIDED BY FINANCING ACTIVITIES

 

 

65,000

 

 

17,500

 

 

 

 

 

 

 

 

 

NET INCREASE IN CASH

 

 

51,153

 

 

(5,452

)

 

 

 

 

 

 

 

 

CASH, at the beginning of the period

 

 

14,100

 

 

5,845

 

 

 

 

 

 

 

 

 

CASH, at the end of the period

 

$

65,253

 

$

393

 

 

 

 

 

 

 

 

 

Supplemental Disclosures of Cash Flow Information:

 

 

 

 

 

 

 

Cash paid during the period for:

 

 

 

 

 

 

 

Interest

 

$

—

 

$

—

 

Taxes

 

$

—

 

$

—

 

 

 

 

 

 

 

 

 

Noncash investing and financing transaction:

 

 

 

 

 

 

 

Debt converted to common stock

 

$

6,000

 

$

66,118

 

Preferred stock converted to common stock

 

$

500

 

$

—

 

Change in fair value of available-for-sale securities

 

$

1,940

 

$

2,911

 


The accompanying notes are an integral part of these unaudited consolidated financial statements.


- 8 -


ANGIOSOMA INC.

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2017

June 30, 2021

(Unaudited)


Note 1. General Organization and Business


AngioSoma, Inc., a Nevada corporation (“AngioSoma” or theGlobeStar Therapeutics Corporation (the “Company”), is a clinical stage biotechnology company focused on improving the effectiveness of current standard-of-care treatments, especially related to endovascular interventions in the treatment of peripheral artery disease (PAD).


AngioSoma is developing its lead product, a drug candidate called LiprostinTM for the treatment of peripheral artery disease, or PAD, which has completed FDA Phase I and three Phase II clinical trials. We are in discussions with several contract research organizations for completion of our FDA protocol for Phase III and submission of our new drug application for marketing in the US and its territories.


The Company was incorporated on April 29, 2016. The Company’s year-end is September 30. On October 4, 2019, the Company filed Articles of Continuance with the Secretary of State of Wyoming to continue its business in the state of Wyoming. As part of these Articles of Continuance, effective October 4, 2019, the Company has no limit on the authorized shares of common stock that can be issued. The Company filed its Certificate of Dissolution with the Secretary of State of Nevada on October 21, 2019 because it is no longer a Nevada corporation.


The Company changed its name to GlobeStar Therapeutics Corporation on April 27, 2021 from Angiosoma Inc. to better reflect our expanded platform of products that include breakthrough addition of treatment for Multiple Sclerosis and other neurodegenerative diseases. The potential pharmaceutical products related to treatment for multiple sclerosis are licensed to the Company through the worldwide licensing agreement described in Note 7.

On April 27, 2021, the Board of Directors elected Brooke Greenwald as Chief Marketing Officer and a director of the Company. On April 27, 2021, the Board of Directors of the Company elected Steven F. Penderghast as a director of the Company. On April 28, 2021, the Board of Directors elected William Farley as a director of the Company. On May 6, 2021, the Board of Directors of the Company elected David Croom as Executive Vice President of the Company.

Note 2. Going Concern and Summary of Significant Accounting Policies


The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. For the nine months ended December 31, 2017,June 30, 2021, the Company had a net loss of $465,350$5,755,065 and negative cash flow fromused in operating activities of $13,847.$345,466. As of December 31, 2017,June 30, 2021, the Company had negative working capital of $622,456.$628,755. Management does not anticipate having positive cash flow from operations in the near future. The Company has minimal revenue. Without additional capital, the Company will not be able to remain in business.


These factors raise a substantial doubt about the Company’s ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the possible inability of the Company to continue as a going concern.


The Company does not have the resources at this time to repay its credit and debt obligations, make any payments in the form of dividends to its shareholders or fully implement its business plan. Without additional capital, the Company will not be able to remain in business.


Management has plans to address the Company’s financial situation as follows:


In the near term, management plans to continue to focus on raising the funds necessary to implement the Company’s business plan. Management will continue to seek out debt financing to obtain the capital required to meet the Company’s financial obligations. There is no assurance, however, that lenders will continue to advance capital to the Company or that the new business operations will be profitable. The possibility of failure in obtaining additional funding and the potential inability to achieve profitability raise doubts about the Company’s ability to continue as a going concern.


In the long term, management believes that the Company’s projects and initiatives will be successful and will provide cash flow to the Company, which will be used to finance the Company’s future growth. However, there can be no assurances that the Company’s planned activities will be successful, or that the Company will ultimately attain profitability. The Company’s long-term viability depends on its ability to obtain adequate sources of debt or equity funding to meet current commitments and fund the continuation of its business operations, and the ability of the Company to achieve adequate profitability and cash flows from operations to sustain its operations.


Note 3. Summary of Significant Accounting Policies


Interim Financial Statements


The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Regulation S-X.S-X and should be read in conjunction with the audited financial statements and notes thereto for the year ended September 30, 2020 which are included on our Form 10-K filed on December 3, 2020. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for the three and nine months ended December 31, 2017June 30, 2021 are not necessarily indicative of the results to be expected for the full fiscal year ending September 30, 2018.2021.


- 98 -


Consolidated Financial Statements


The consolidated financial statements of the Company include the accounts of the Company and its wholly owned subsidiaries, AngioSoma Research, LLC,SomaCeuticals, Inc., First Titan Energy, LLC and First Titan Technical, LLC from the date of their formations or acquisition. Significant intercompany transactions have been eliminated in consolidation.


Use of Estimates


The preparation of financial statements in conformity with GAAP 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 financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.


Fair Value of Financial Instruments


The Company’s balance sheet includes certain financial instruments. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period between the origination of these instruments and their expected realization.


FASB Accounting Standards Codification (ASC) 820Fair Value Measurements and Disclosures (ASC 820) defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:


Level 1 - 

Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2 - 

Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Level 3 - 

Inputs that are both significant to the fair value measurement and unobservable.


Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2017. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include accounts receivable, other current assets, accounts payable, and accrued expenses. The fair value of the Company’s notes payable is estimated based on current rates that would be available for debt of similar terms that is not significantly different from its stated value.


The following table presents assets that were measured and recognized at fair value as of December 31, 2017 and the period then ended on a recurring and nonrecurring basis:


Description

 

Level 1

 

Level 2

 

Level 3

 

Total

 

Gain (Loss)

 

Available for sale securities

 

$

11,644

 

$

—

 

$

—

 

$

11,644

 

$

1,941

 

Totals

 

$

11,644

 

$

—

 

$

—

 

$

11,644

 

$

1,941

 


The following table presents assets that were measured and recognized at fair value as of September 30, 2017 and the period then ended on a recurring and nonrecurring basis:


Description

 

Level 1

 

Level 2

 

Level 3

 

Total

 

Available for sale securities

 

$

9,703

 

$

—

 

$

—

 

$

9,703

 

Totals

 

$

9,703

 

$

—

 

$

—

 

$

9,703

 


- 10 -


Commitments and Contingencies


The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. There are no known commitments or contingencies as of December 31, 2017.


Recently Issued Accounting Pronouncements


We have reviewed the FASB issued Accounting Standards Update (“ASU”) accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the corporation’s reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of our financial management and certain standards are under consideration.


Subsequent events


The Company follows the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company will evaluate subsequent events through the date when the financial statements were issued. Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification, the Company as an SEC filer considers its financial statements issued when they are widely distributed to users, such as through filing them on EDGAR.


Note 4. Advances


As of December 31, 2017 and September 30, 2017, the Company had non-interest bearing advances payable to third parties of $59,650. These advances are payable on demand.


Note 5. 3. Convertible Notes Payable


Convertible notes payable consisted of the following at December 31, 2017June 30, 2021 and September 30, 2017:2020:


 

 

December 31,
2017

 

September 30,
2017

 

Convertible note dated April 13, 2017 in the original principal amount of $20,000, no stated maturity date, bearing interest at 3% per year, convertible into common stock at a rate of $0.01 per share

 

$

20,000

 

$

20,000

 

Convertible note dated December 11, 2017 in the original principal amount of $68,000, maturing September 20, 2018, bearing interest at 12% per year, convertible beginning June 11, 2018 into common stock at a rate of 65% of the average of the two lowest trading prices during the 15 trading days prior to conversion

 

 

68,000

 

 

—

 

Total current convertible notes payable

 

 

88,000

 

 

20,000

 

 

 

 

 

 

 

 

 

Less: discount on convertible notes payable

 

 

(3,000

)

 

—

 

Total convertible notes payable, net of discount

 

$

85,000

 

$

20,000

 

         
  

June 30,

2021

  

September 30,

2020

 
Convertible note dated April 13, 2017 in the original principal amount of $20,000, no stated maturity date, bearing interest at 3% per year, convertible into common stock at a rate of $0.01 per share. $20,000  $20,000 
         
Convertible note dated March 30, 2020 in the original principal amount of $28,000, maturing January 15, 2021, bearing interest at 12% per year, convertible beginning September 26, 2020 into common stock at a rate of 65% of the average of the two lowest bid prices during the 15 trading days prior to conversion. In October 2020, principal of $28,000 and accrued interest of $1,680 were converted into 9,275,000 shares of common stock. There was no gain or loss recognized as the conversion occurred in accordance with the original terms of the agreement.  0   28,000 
         
Convertible note dated June 10, 2020 in the original principal amount of $33,000, maturing April 15, 2021, bearing interest at 12% per year, convertible beginning December 8, 2020 into common stock at a rate of 65% of the average of the two lowest bid prices during the 15 trading days prior to conversion. In December 2020, principal of $33,000 and accrued interest of $1,980 were converted into 9,994,286 shares of common stock. There was no gain or loss recognized as the conversion occurred in accordance with the original terms of the agreement.  0   33,000 
         
Convertible note dated July 7, 2020 in the original principal amount of $38,000, maturing May 15, 2021, bearing interest at 12% per year, convertible beginning January 3, 2020 into common stock at a rate of 65% of the average of the two lowest bid prices during the 15 trading days prior to conversion. In January 2021, principal of $38,000 and accrued interest of $2,280 was converted into 10,886,486 shares of common stock. There was no gain or loss recognized as the conversion occurred in accordance with the original terms of the agreement.  0   38,000 
         
Convertible note dated July 30, 2020 in the original principal amount of $33,000, maturing June 15 2021, bearing interest at 12% per year, convertible beginning February 20, 2021 into common stock at a rate of 65% of the average of the two lowest bid prices during the 15 trading days prior to conversion. In February 2021, principal of $33,000 and accrued interest of $1,980 was converted into 4,115,294 shares of common stock. There was no gain or loss recognized as the conversion occurred in accordance with the original terms of the agreement.  0   33,000 


- 9 -

         
Convertible note dated August 24, 2020 in the original principal amount of $38,000, maturing June 30, 2021, bearing interest at 12% per year, convertible beginning January 26, 2021 into common stock at a rate of 65% of the average of the two lowest bid prices during the 15 trading days prior to conversion. In February 2021, principal of $38,000 and accrued interest of $2,280 was converted into 2,549,367 shares of common stock. There was no gain or loss recognized as the conversion occurred in accordance with the original terms of the agreement.  0   38,000 
         
Convertible note dated October 6, 2020 in the original principal amount of $33,000, maturing July 30 2021, bearing interest at 12% per year, convertible beginning April 4, 2021 into common stock at a rate of 65% of the average of the two lowest bid prices during the 15 trading days prior to conversion. In April 2021, principal of $33,000 and accrued interest of $1,980 was converted into 1,193,857 shares of common stock. There was no gain or loss recognized as the conversion occurred in accordance with the original terms of the agreement.  0   0 
         
Convertible note dated January 5, 2021 in the original principal amount of $38,500, maturing January 5, 2022, bearing interest at 12% per year, convertible beginning July 4, 2021 into common stock at a rate of 65% of the average of the two lowest bid prices during the 15 trading days prior to conversion.  38,500   0 
         
Convertible note dated February 4, 2021 in the original principal amount of $33,500, maturing February 4, 2022, bearing interest at 12% per year, convertible beginning August 3, 2021 into common stock at a rate of 65% of the average of the two lowest bid prices during the 15 trading days prior to conversion.  33,500   0 
         
Total current convertible notes payable  92,000   190,000 
         
 Less: discount on convertible notes payable  (3,287)  (34,923)
 Total convertible notes payable, net of discount $88,713  $155,077 

All principal along with accrued interest is payable on the maturity date. The notes are convertible into common stock at the option of the holder. The holder of the notes cannot convert the notes into shares of common stock if that conversion would result in the holder owning more than 4.9%4.99% of the outstanding stock of the Company.


Conversions to Common Stock


During the three months ended December 31, 2017,2020, the holdersCompany recognized $3,000 of deferred finance costs from its new convertible note payable and $30,000 of new discount related to the Convertible Note Payable datedbeneficial conversion features of convertible notes payable. During the three months ended March 31, 2021, the Company recognized $7,000 of deferred finance costs from its new convertible note payable and $100,000 of new discount related to the beneficial conversion features of convertible notes payable. During the three months ended June 30, 2015 elected2021, the Company recognized $7,000 of deferred finance costs from its new convertible note payable and $30,000 of new discount related to convert principalthe beneficial conversion features of $0 into 6,000,000 sharesconvertible notes payable.

During the three and nine months ended June 30, 2021, the Company recognized interest expense on convertible notes of common stock. A loss$2,225 and $10,931 and amortization of $328,200 wasdiscount on convertible notes payable of $32,452 and $201,636, respectively. During the three and nine months ended June 30, 2020, the Company recognized interest expense on the conversions as they occurred after all debt had been fully converted asconvertible notes of $7,754 and $17,561, and amortization of discount of $39,887 and $185,395, respectively.

As of June 30, 2021 and September 30, 2017. This is recorded under additional paid in capital.2020, accrued interest was $226,123 and $227,372, respectively.


Advances

As of June 30, 2021 and September 30, 2020, the Company had non-interest bearing advances payable to third parties of $59,650. These advances are payable on demand.

- 1110 -


Note 6. 4. Related Party Transactions


In January 2021, the Company’s former Chief Executive Officer Sydney Jim agreed to forgive all accrued but unpaid compensation of $38,130, resulting in a gain on settlement of liabilities to the Company that was recorded to additional paid in capital.

In March 2021, the Company entered into severance agreement with its former CEO Alex Blankenship. The Company owed Ms. Blankenship unpaid compensation of $130,000 and agreed to issue 8,600,000 shares of common stock in full settlement of this amount and release from the employment agreement with her. The shares had a fair value of $447,200 based on the stock price at the date of the agreement. The Company recognized a loss on settlement of $317,200 in connection with this agreement. As of March 31, 2021, 2,600,000 of the shares were issued to Ms. Blankenship. Concurrently with the severance agreement, the Company agreed to purchase the 1,000,000 shares Series E Preferred Stock held by Ms. Blankenship for $325,000 in cash. The Company reissued those Series E preferred Shares to the Company’s new CEO James Katzaroff. The Company recognized stock-based compensation of $325,000 related to this reissuance.

David Summers, a significant shareholder of the Company, providesformerly provided consulting services to the Company related to the development of our products. In addition, the Company rentshad previously rented office space from Mr. Summers for $400$400 per month under a month to month lease. As part of December 31, 2017, services, rent and other expense reimbursementsthe legal settlement discussed in the amount of $112,804 was unpaid.


Alex Blankenship is paid $5,000 per month under her employment agreement with the Company. As of December 31, 2017,Note 6 in October 2019, the Company owed Ms. Blankenship $100,438 forwas relieved of these outstanding claims, and the unpaid compensation.


Asliability balance of December 31, 2017, the Company owed Sydney Jim, our former CEO, $34,821 for accrued but unpaid compensation.


Note 7. Stockholders’ Equity


Common Stock issued for conversion$112,804 was retired as contributed capital, and Mr. Summers returned 5,800,000 shares of Series BA Preferred Stockstock with a book value of $4,590,535, which were cancelled.


Note 5. Stockholders’ Equity (Deficit)

Preferred Series A

During the three months ended December 31, 2017,2019, the Company issued 2,400,000entered into a settlement agreement with David Summers, the Company’s former CEO and a common stockholder. As part of this settlement, David Summers returned 5,800,000 Series A preferred shares to the Company which were cancelled. See Note 6 for additional information regarding the settlement.

Preferred Series E

On March 31, 2021, The Company agreed to repurchase 1,000,000 shares of Series E Preferred Stock from Alex Blankenship, the Company’s former CEO, for $325,000. The Company then reissued those shares to James Katzaroff, the Company’s new CEO, and recognized stock-based compensation expense of $325,000. The Series E Preferred stock has voting rights on the basis of two votes for every outstanding share of common stock meaning that the holders of the Series E Preferred Stock have 2/3 of the voting rights in the Company.

Common Stock Units

During the three months ended March 31, 2021, the Company sold common stock units to investors. Each unit consist of 400,000 shares of common stock upon conversionand 600,000 warrants to purchase common stock for three years at an exercise price of $0.03 per share. The Company received cash proceeds of $499,500 related to the Series B Preferred Stock. A lossissuance of $7,250 was recognized19,980,000 shares of common stock and is recorded in Additional paid-in capital29,970,000 warrants. No shares of common stock were issued as of March 31, 2021. The warrants had a relative fair value of $350,462 based on the consolidated balance sheet.a Black-Scholes pricing model with estimated volatility ranging from 261.3% to 261.8%, dividend yield of 0%, expected term of three years and a risk free rate ranging from 0.19% to 0.24%.


Common stock issued for conversion of convertible notenotes payable


During the three months ended December 31, 2017,2020, the Company issued 6,000,00019,269,286 shares of common stock upon the conversion of principal of $0.$61,000 and accrued interest of $3,660. There was no gain or loss recognized as the conversion occurred in accordance with the original terms of the agreement.

During the three months ended March 31, 2021, the Company issued 17,551,147 shares of common stock upon the conversion of principal of $109,000 and accrued interest of $6,540. There was no gain or loss recognized as the conversion occurred in accordance with the original terms of the agreement.

- 11 -

During the three months ended June 30, 2021, the Company issued 1,193,857 shares of common stock upon the conversion of principal of $30,000 and accrued interest of $1,980. There was no gain or loss recognized as the conversion occurred in accordance with the original terms of the agreement.

During the three months ended December 31, 2019, the Company issued 39,833,749 shares of common stock upon the conversion of principal of $80,000 and accrued interest of $4,800. There was no gain or loss recognized as the conversion occurred in accordance with the original terms of the agreement.

During the three months ended March 31, 2020, the Company issued 93,977,186 shares of common stock upon the conversion of principal of $66,000 and accrued interest of $3,960. There was no gain or loss recognized as the conversion occurred in accordance with the original terms of the agreement.

During the three months ended June 30, 2020, the Company issued 78,841,942 shares of common stock upon the conversion of principal of $35,000 and accrued interest of $2,100. There was no gain or loss recognized as the conversion occurred in accordance with the original terms of the agreement.

Common Stock Options

During the three months ended June 30, 2021, the Board of Directors approved grants of 70,000,000 options to officers and medical advisory board members. The stock options have an exercise price of $0.003 per share and are exercisable through the latter of two years from the effective date or two years after certain liquidity events. The total fair value of these option grants at issuance was $4,209,179. All options vested immediately. The Company estimated the fair value of the stock options using a black-scholes option pricing mode and the following assumptions: 1) expected term of 1 to 2 years; 2) volatility of 253.3% and 262.8%; 3) dividend yield of 0%; and 4) risk-free rate of between 0.35% and 0.36%.

The following table summarizes the stock option activity for the nine months ended June 30, 2021:

Schedule of Stock Option Activity      
  Options  

Weighted-

Average

Exercise Price

Per Share

 
Outstanding, December 31, 2020  —  $0 
Granted  70,000,000  $0.003 
Exercised  0  $0 
Forfeited  0  $0 
Expired  0  $0 
Outstanding, June 30, 2021  70,000,000  $0.003 

As of June 30, 2021, the aggregate intrinsic value of options vested and outstanding were $1,925,000. As of June 30, 2021, all outstanding options had an expected remaining life of 1.86 years.

Beneficial conversion feature

During the nine months ended June 30, 2021, the Company charged to additional paid-in capital the aggregate amount of $160,000 on connection with the beneficial conversion feature of notes payable.

Note 6. Commitments and Contingent Liabilities

Litigation

The Company was involved in a legal dispute with Mr. David Summers, a significant shareholder, regarding the settlement of claims on certain patents and formulas. In October 2019, the Company entered into a settlement agreement with David Summers whereby all claims, disputes and litigation were dismissed. Mr. Summers returned 5,800,000 shares of Series A lossPreferred stock to the Company, which were cancelled. The Company was relieved of $328,200 wasthe previously recognized on the transaction becauseliability for compensation amounts due to Mr. Summers of $112,804. The Company assigned three patents that it occurred after all debtpreviously held to David Summers, which had been fully convertedno book value as of September 30, 2017. This isthe date of the settlement. The settlement was recorded under additional paid-in capital.as a capital transaction due to the related party nature and as such no gain or loss was recorded.


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Note 7. License Agreement

Effective August 23, 2020 the Company’s wholly-owned subsidiary, SomaCeuticals, Inc. entered into an exclusive global license agreement with 7 to Stand, Inc. for the rights to U.S. patent 10,610,592 issued to Fabrizio de Silvestri, Terni, Italy, as inventor, April 7, 2020 for treatment of Multiple Sclerosis. In consideration for the license agreement, SomaCeuticals agreed to pay 7 to Stand a royalty of 7.1% of the net sales of any product developed under the patent on a worldwide basis. Additionally, the Company will issue a total of 116,520,667 shares of common stock to 7 to Stand upon completion of the following milestones:

●Common shares representing 5% of total number of outstanding common shares of the Company immediately following any change of control of the Company; the Company will issue 29,130,167 shares of common stock as a result of the change of control discussed in Note 5. These shares were issued in July 2021.
●29,130,167 Common shares immediately following the first round of funding under a private offer of equity or debt securities; These shares were issued in July 2021.
●29,130,167 Common shares immediately following the commencement of clinical trials for Federal Drug Administration clearance of the product; and
●Common shares representing an adjustment to increase 7 to Stand’s total ownership to 19.99% of total number of outstanding common shares of the Company immediately following FDA clearance of the product for sale. The Company expects to issue 29,130,166 shares of common stock related to this provision if met.
●No royalties have been earned or paid to 7 to Stand. The license agreement may be terminated by 7 to Stand if 1) SomaCeuticals does not begin clinical trials within one year of the agreement; 2) if SomaCeuticals terminates the continuation of the clinical trials; or 3) shall not commence marketing the product within reasonable time after obtaining FDA approval.

Note 8. Subsequent Events

Subsequent to June 30, 2021, the Company issued a total of 2,802,760 shares of common stock related to the conversion of $72,000 in principal and $4,320 of outstanding convertible debt.

In July 2021, the Company issued 8,600,000 shares of common stock to its former CEO pursuant to the severance agreement.

In July 2021, the Company issued 58,260,334 shares of common stock pursuant to the first two milestones under the license agreement with 7 to Stand, Inc. 

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


Overview


AngioSomaGlobeStar Therapeutics Corporation (the “Company”) was incorporated on April 29, 2016. The Company’s year-end is September 30. On October 4, 2019, the Company filed Articles of Continuance with the Secretary of State of Wyoming to continue its business in the state of Wyoming. As part of these Articles of Continuance, effective October 4, 2019, the Company has no limit on the authorized shares of common stock that can be issued. The Company filed its Certificate of Dissolution with the Secretary of State of Nevada on October 21, 2019 because it is no longer a Nevada corporation.

We changed our name to GlobeStar Therapeutics Corporation on April 27, 2021 to better reflect our expanded platform of products that include breakthrough addition of treatment for Multiple Sclerosis and other neurodegenerative diseases.

GlobeStar Therapeutics Corporation, based in Richland Washington, is a clinical stage biotechnology company focused on improving the effectivenessPharmaceutical Company introducing a patented formulation of current standard-of-care treatments, especially related to endovascular interventions in the treatment of peripheral artery disease (PAD).


AngioSoma is developing its lead product, a drug candidate called LiprostinTMpreviously approved drugs for the treatment of peripheral artery disease, or PAD, which has completed FDA Phase I and three Phase II clinical trials. WeMultiple Sclerosis. GlobeStar Therapeutics owns the exclusive global license from the inventors, who are based in Italy. GlobeStar Therapeutics is initiating discussions with several contract research organizationsthe FDA on clinical trial design in preparation for completionFDA submission and approval pathway.

Prior to the Company’s current business plan, the Company was a wellness company dedicated to bringing innovative, effective and high-quality supplement products to the medical, wellness and adult-use markets through our marketing subsidiary, SomaCeuticalsTM

Professional Team

We have adopted a Medical Advisory Board and appointed medical doctors and medical professionals that have extensive education and hands on experience with pharmaceutical and nutraceutical solution for prevention and treatment of disease.

Management’s Plan to Attract Capital

In the near term, management will utilize debt financing to complete assembling the professional and management team to commence the process for clinical trials in compliance with FDA protocol. plans to continue to focus on raising the funds necessary to implement the Company’s business plan. Management will continue to seek out debt financing to obtain the capital required to meet the Company’s financial obligations. There is no assurance, however, that lenders will continue to advance capital to the Company or that the new business operations will be profitable. The possibility of failure in obtaining additional funding and the potential inability to achieve profitability raise doubts about the Company’s ability to continue as a going concern.

In the midterm, management will enhance its capital position with a public offering of equity securities to finance clinical trials and the necessary actions to obtain approval of worldwide marketing of our FDA protocolMS treatment

In the long term, marketing the Company’s pharmaceutical and nutraceutical products will provide the necessary cash flow to support future growth. However, there can be no assurances that the Company’s planned activities will be successful, or that the Company will ultimately attain profitability. The Company’s long-term viability depends on its ability to obtain adequate sources of capital to support near term and midterm business operations, and the ability of the Company to achieve adequate profitability and cash flows from operations to support its operations.

Corporate Governance

We have adopted codes and committees for Phase IIIgovernance of the corporation that include: (i) audit committee charter, (ii) written acknowledgement of code of ethics for directors and submission of our new drug application for marketing in the USsenior officers, (iii) compensation committee charter, (iv) confidential information policy, iv) corporate governance guidelines, (vi) executive committee charter, and its territories.(vii) nominating committee charter.


Critical Accounting Policies


We prepare our consolidated financial statements in conformity with GAAP, which requires management to make certain estimates and apply judgments. We base our estimates and judgments on historical experience, current trends, and other factors that management believes to be important at the time the condensed consolidated financial statements are prepared. We regularly review our accounting policies, and how they are applied and disclosed in our condensed consolidated financial statements.


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While we believe that the historical experience, current trends and other factors considered support the preparation of our condensed consolidated financial statements in conformity with GAAP, actual results could differ from our estimates and such differences could be material.


Results of Operations


Three Months Ended December 31, 2017June 30, 2021 Compared to the Three Months Ended December 31, 2016June 30, 2020


Revenue. We had no revenue for the three months ended June 30, 2021 and 2020.

Cost of goods sold. We had no cost of goods sold for the three months ended June 30, 2021 and 2020

General and administrative expense. We recognized general and administrative expense of $128,695$4,478,111 for the three months ended December 31, 2017June 30, 2021 compared to $236,838$48,563 for the comparable period of 2016.2020. The decreaseincrease in general and administrative expense was related primarily to a decrease in spending as a resultstock-based compensation related to options issued to officers, directors and advisory board members of having less available cash.$4,209,179 and increased officer compensation of related to new officers.


Loss on settlement of liabilities.We recognized a$5,438 and $0 loss on conversionsthe settlement of debt and preferred stock into common stock of $335,450 forliabilities during the three months ended December 31, 2017, as comparedJune 30, 2021 and 2020. The loss was related to $0 in 2016.the severance agreement with Alex Blankenship, our former CEO.


Interest expense. We recognized interest expense of $1,205$34,949 for the three months ended December 31, 2017June 30, 2021 compared to $80,576$39,422 for the comparable period of 2016. The decrease was primarily related to most2020, including amortization of the discount on convertible notes being converted into preferredpayable of $32,452 and common stock$37,247 during the yearthree months ended SeptemberJune 30, 2017.2021 and 2020, respectively.


Net loss. WeFor the reasons above, we recognized a net loss of $465,350$4,518,498 for the three months ended December 31, 2017 and $317,414June 30, 2021 compared to $87,895 for the three months ended December 31, 2016.June 30, 2020.

Nine Months Ended June 30, 2021 Compared to the Nine Months Ended June 30, 2020

Revenue. We had revenue of $0 for the nine months ended June 30, 2021 compared to $77 for the nine months ended June 30, 2020.

Cost of goods sold. We had cost of goods sold of $2,412 for the nine months ended June 30, 2021 compared to $14 for the nine months ended June 30, 2020 related to the write down of inventory kept by the Company’s former CEO as part of the severance agreement.

General and administrative expense. We recognized general and administrative expense of $5,006,455 for the nine months ended June 30, 2021 compared to $174,248 for the comparable period of 2020. The increase in general and administrative expense was related primarily to stock-based compensation of $4,209,179 related to stock options for officers and medical advisory board members and $325,000 related to the Series E Preferred stock issued to the new CEO, and increased officer compensation of $115, related to new officers and increased legal fees of $54,655.

Loss on settlement of liabilities. We recognized $317,200 and $0 loss on the settlement of liabilities during the nine months ended June 30, 2021 and 2020. The loss was related to the severance agreement with Alex Blankenship, our former CEO, resulting in a $317,200 loss.

Interest expense. We recognized interest expense of $212,657 for the nine months ended June 30, 2021 compared to $193,149 for the comparable period of 2020. The increase was a resultdue primarily to the amortization of the discount on convertible notes payable during the current period in the amount of $201,636 compared to $185,395 during the comparable period of the prior year.

Net loss. For the reasons above, we recognized a net loss on conversion of debt and preferred stock discussed in note 7.$5,538,724 for the nine months ended June 30, 2021 compared to $367,334 for the nine months ended June 30, 2020.


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Liquidity and Capital Resources


At December 31, 2017,June 30, 2021, we had cash on hand of $65,253.$20,746. The Company has negative working capital of $622,456.$628,755. Net cash used in operating activities for the threenine months ended December 31, 2017June 30, 2021 was $13,847.$330,466. Cash on hand is adequate to fund our operations for less than twelve months. We do not expect to achieve positive cash flow from operating activities in the near future. We will require additional cash in order to implement our business plan. There is no guarantee that we will be able to attain fund when we need them or that funds will be available on terms that are acceptable to the Company. We have no material commitments for capital expenditures as of December 31, 2017.June 30, 2021.


During the nine months ended June 30, 2021, the Company used cash in operating activities in the amount of $330,466. This consisted of the net loss of $5,538,724, partially offset by the following non-cash operating expenses: stock-based compensation of $4,534,179, amortization of discount of $201,636, and the loss on settlement of liabilities of $317,200. The Company had cash flows from financing activities of $269,500 from the proceeds of sale of common stock units resulting in cash proceeds of $499,500, the repurchase of Series E preferred stock for $325,000, and proceeds from convertible notes payable of $95,000.

Additional Financing


Additional financing is required to continue operations. Although actively searching for available capital, the Company does not have any current arrangements for additional outside sources of financing and cannot provide any assurance that such financing will be available.


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Off Balance Sheet Arrangements


We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


Not applicable to a smaller reporting company.


ITEM 4. CONTROLS AND PROCEDURES


Management’s Report on Internal Control over Financial Reporting


We carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of December 31, 2017.June 30, 2021. Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of December 31, 2017,June 30, 2021, our disclosure controls and procedures were not effective to ensure that information required to be disclosed in reports filed by us under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.


1.

1.

As of December 31, 2017,June 30, 2021, we did not maintain effective controls over the control environment. Specifically, we have not developed and effectively communicated to our employees our accounting policies and procedures. This has resulted in inconsistent practices. Since these entity level programs have a pervasive effect across the organization, management has determined that these circumstances constitute a material weakness.

2.

2.

As of December 31, 2017,June 30, 2021, we did not maintain effective controls over financial statement disclosure. Specifically, controls were not designed and in place to ensure that all disclosures required were originally addressed in our financial statements. Accordingly, management has determined that this control deficiency constitutes a material weakness.


Our management, including our principal executive officer and principal financial officer, who is the same person, does not expect that our disclosure controls and procedures or our internal controls will prevent all error or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected.


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Change in Internal Controls Over Financial Reporting


There was no change in our internal controls over financial reporting that occurred during the period covered by this report, which has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.



PART II — OTHER INFORMATION


ITEM 1. LEGAL PROCEEDINGS


As of September 30, 2019, the Company was involved in litigation: Cause No. 2018-48120; Somaceuticals, Inc. and AngioSoma, Inc. v. David Summers in the 151st District Court of Harris County, Texas. Dr. Summers provided scientific expertise to AngioSoma for several years, and there was a dispute regarding the ownership of several patents and other intellectual property. AngioSoma obtained a favorable settlement of the lawsuit on October 16, 2019, which resulted in the settlement of all claims of both parties along with (i) the assignment by the Company of certain technology and intellectual property to Dr. Summers, (ii) the assignment by Dr. Summers of any interest he owns in certain technology and intellectual property to the Company; and (iii) the assignment by Summers of 5,800,000 shares of Series A preferred stock of the Company to the Company.

We know of no other material, active or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceedings or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered beneficial shareholder are an adverse party or has a material interest adverse to us.


ITEM 1A. RISK FACTORS


Not applicable to a smaller reporting company.


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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS


Set forth below is information regarding the securities sold during the quarter ended December 31, 2017June 30, 2021 that were not registered under the Securities Act:


Date of Sale

Title of Security

Number
Sold

Consideration Received

and Description of

Underwriting or Other

Discounts to Market

Price or Convertible

Security, Afforded to

Purchasers

Exemption from

Registration

Claimed

If Option, Warrant

or Convertible

Security, terms of

exercise or

conversion

October 2, 2017

April 8, 2021Common Stock

1,800,000

1,193,857

Conversion of convertible note payable

Note Payable

Section 3(a)(9) of the Securities Act

Convertible at $0.01$0.0037 per share

October 3, 2017

Common Stock

1,800,000

Conversion of convertible note payable

Section 3(a)(9) of the Securities Act

Convertible at $0.01 per share

October 23, 2017

Common Stock

2,400,000

Conversion of convertible note payable

Section 3(a)(9) of the Securities Act

Convertible at $0.01 per share

December 14, 2017

Common Stock

500,000

Conversion of Series B preferred stock

Section 3(a)(9) of the Securities Act

Convertible at $0.01 per share


ITEM 3. DEFAULTS UPON SENIOR SECURITIES


The Company has not defaulted upon senior securities.


ITEM 4. MINE SAFETY DISCLOSURES


This item is not applicable to smaller reporting companies.applicable.


ITEM 5. OTHER INFORMATION


None.

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ITEM 6. EXHIBITS


3.1

3.1

Articles of Incorporation (1)

3.2

Bylaws (2)

14.1

Code of Ethics (3)

31.1

Rule 13(a)-14(a)/15(d)-14(a) Certification of principal executive officer and principal financial and account officer. (4)

32.1

Section 1350 Certification of principal executive officer and principal financial accounting officer. (4)

101

101.INS

Inline XBRL data files of Financial StatementInstance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. (5)

101.SCHInline XBRL Taxonomy Extension Schema Document (5)
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document (5)
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document (5)
101.LABInline XBRL Taxonomy Extension Label Linkbase Document (5)
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document
104Cover Page Interactive Data File (formatted as Inline XBRL and Notes contained in this Quarterly Report on Form 10-Q. (4)Exhibit 101) (5)

__________

(1)

(1)

Incorporated by reference to our Definitive Proxy Statement on Schedule 14A filed on April 8, 2015.

(2)

Incorporated by reference to our Form 10-K/A Amendment No. 1 for the year ended September 30, 2015 filed on January 22, 2016.

(3)

Incorporated by reference to our Form S-1 filed with the Securities and Exchange Commission on November 3, 2010.

(4)

Filed or furnished herewith.

(5)

In accordance with Regulation S-T, the Interactive Data Files in Exhibit 101 to the Quarterly Report on Form 10-Q shall be deemed “furnished” and not “filed.”


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SIGNATURES


SIGNATURES

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


GlobeStar Therapeutics Corporation

AngioSoma Inc.

Date: August 23, 2021

By: /s/ James C. Katzaroff

Date: February 15, 2018

BY:/s/ Alex Blankenship

James C. Katzaroff

Alex Blankenship

Chief Executive Officer, President, Secretary, Treasurer, Principal Executive Officer, Principal Finance and Accounting Officer and Sole Director


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