UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 30, 20202021
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ___________ to ___________
Commission file number 000-56035
GLOBAL WHOLEHEALTH PARTNERS CORPORATION
(Exact name of registrant as specified in its charter)
Nevada | 46-2316220 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
|
| |
San Clemente, California | 92673 | |
(Address of principal executive offices) | (Zip Code) |
1403 N. El Camino Real, San Clemente, CA 92672
(Former name, former address and former fiscal year, if changed since last report)
(714) 392-9752
(Registrant’s telephone number, including area code)
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 x ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes x ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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 | ☒ | |
Emerging growth company | ☐ |
1 |
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 12b-2 of the Exchange Act). Yes ☐ No x☒
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 59,966,35884,327,383 shares of common stock, par value $0.001, were outstanding on November 12, 2020.October 27, 2021.
2 |
GLOBAL WHOLEHEALTH PARTNERS CORPORATION
FORM 10-Q
FORM 10-Q
For the Quarterly Period Ended September 30, 20202021
Table of Contents
PART I. | FINANCIAL INFORMATION | ||
Item 1. | Financial Statements (Unaudited) | 4 | |
Balance Sheets | 4 | ||
Statements of Operations | 5 | ||
Statements of Stockholders’ Equity | 6 | ||
Statements of Cash Flows | 7 | ||
Notes to Financial Statements | 8 | ||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 18 | |
Item 4. | Controls and Procedures | 22 | |
PART II. | OTHER INFORMATION | ||
Item 1A. | Risk Factors | 22 | |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 22 | |
Item 5. | Other Information | 22 | |
Item 6. | Exhibits | ||
| Signatures | ||
Certifications |
3 |
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
GLOBAL WHOLEHEALTH PARTNERS CORPORATION | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
September 30, | June 30, | |||||||
2020 | 2020 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash | $ | 132,614 | $ | 14,497 | ||||
Prepaid expenses and other current assets | 2,551 | 15,064 | ||||||
Inventory | 214,603 | 152,147 | ||||||
Total current assets | 349,768 | 181,708 | ||||||
Equipment, net of accumulated depreciation of $194 | 3,311 | — | ||||||
Total assets | $ | 353,079 | $ | 181,708 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | ||||||||
Current liabilities: | ||||||||
Related party note | $ | 36,875 | $ | 120,965 | ||||
Convertible notes payable, net of discount of $116,930 | 149,070 | 69,851 | ||||||
Accounts payable and accrued liabilities | 8,356 | 46,321 | ||||||
Related party payables | 1,845 | 4,306 | ||||||
Total current liabilities | 196,146 | 241,443 | ||||||
Total liabilities | 196,146 | 241,443 | ||||||
Commitments and contingencies | ||||||||
Stockholders' equity (deficit): | ||||||||
Preferred stock; $0.001 par value, 10,000,000 shares authorized, no shares issued or outstanding at September 30, 2020 and June 30, 2020 | — | — | ||||||
Common stock; $0.001 par value, 400,000,000 shares authorized, 59,966,358 shares issued and outstanding at September 30, 2020 and June 30, 2020 | 59,966 | 59,966 | ||||||
Additional paid-in capital | 4,752,739 | 4,628,908 | ||||||
Common stock payable | 340,000 | |||||||
Retained deficit | (4,995,772 | ) | (4,748,609 | ) | ||||
Total stockholders' equity (deficit) | 156,933 | (59,735 | ) | |||||
Total liabilities and stockholders' equity (deficit) | $ | 353,079 | $ | 181,708 | ||||
(The accompanying notes are an integral part of these consolidated financial statements) |
GLOBAL WHOLEHEALTH PARTNERS CORPORATION | ||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
Three Months Ended September 30, | ||||||||
2020 | 2019 | |||||||
Revenue | $ | 15,385 | $ | — | ||||
Cost of revenue | 10,544 | — | ||||||
Gross profit | 4,841 | — | ||||||
Operating expenses: | ||||||||
Professional fees | 33,775 | 14,500 | ||||||
Research and development - related party | 138,310 | — | ||||||
Research and development | 700 | — | ||||||
Selling, general and administrative - related party | 7,653 | — | ||||||
Selling, general and administrative | 25,610 | 4,298 | ||||||
Total operating expense | 206,048 | 18,798 | ||||||
Loss from operations | (201,207 | ) | (18,798 | ) | ||||
Other income (expense) | ||||||||
Interest expense | (4,906 | ) | — | |||||
Accretion of debt discount | (41,050 | ) | — | |||||
Total other income (expense) | (45,956 | ) | — | |||||
Net loss | $ | (247,163 | ) | $ | (18,798 | ) | ||
Basic and Diluted Loss per Common Share | $ | (0.00 | ) | $ | (0.00 | ) | ||
Weighted average number of common shares outstanding - basic and diluted | 59,979,728 | 56,116,358 | ||||||
(The accompanying notes are an integral part of these consolidated financial statements) |
GLOBAL WHOLEHEALTH PARTNERS CORPORATION |
|
|
|
| ||||
CONSOLIDATED BALANCE SHEETS |
|
|
|
| ||||
|
| September 30, |
|
| June 30, |
| ||
|
| 2021 |
|
| 2021 |
| ||
ASSETS |
| (Unaudited) |
|
|
| |||
Current assets: |
|
|
|
|
|
| ||
Cash |
| $ | 303,986 |
|
| $ | 74,702 |
|
Prepaid expenses and other current assets |
|
| 309,861 |
|
|
| 27,918 |
|
Inventory, net |
|
| 29,681 |
|
|
| 29,681 |
|
Deferred financing costs |
|
| 0 |
|
|
| 271,814 |
|
Total current assets |
|
| 643,528 |
|
|
| 404,115 |
|
|
|
|
|
|
|
|
|
|
Equipment, net of accumulated depreciation of $1,358 and $1,067 |
|
| 2,147 |
|
|
| 2,438 |
|
Investment in related party common stock |
|
| 5,000 |
|
|
| 5,000 |
|
Deposits |
|
| 32,621 |
|
|
| 0 |
|
Total assets |
| $ | 683,296 |
|
| $ | 411,553 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Related party note |
| $ | 0 |
|
| $ | 2,785 |
|
Convertible notes payable, net of discount of $545,781 and $27,460, respectively |
|
| 199,219 |
|
|
| 85,000 |
|
Notes payable |
|
| 0 |
|
|
| 43,320 |
|
Accounts payable and accrued liabilities |
|
| 150,405 |
|
|
| 148,946 |
|
Related party payables |
|
| 135,603 |
|
|
| 225,598 |
|
Total current liabilities |
|
| 485,227 |
|
|
| 508,649 |
|
Total liabilities |
|
| 485,227 |
|
|
| 508,649 |
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity (deficit): |
|
|
|
|
|
|
|
|
Preferred stock; $0.001 par value, 10,000,000 shares authorized, no shares issued or outstanding at September 30, 2021 and June 30, 2021, respectively |
|
| 0 |
|
|
| 0 |
|
Common stock; $0.001 par value, 400,000,000 shares authorized, 83,152,383 and 78,713,899 shares issued and outstanding at September 30, 2021 and June 30, 2021, respectively |
|
| 83,152 |
|
|
| 78,714 |
|
Additional paid-in capital |
|
| 15,298,620 |
|
|
| 13,529,861 |
|
Common stock payable |
|
| 129,000 |
|
|
| 77,061 |
|
Deferred compensation |
|
| (96,750 | ) |
|
| 0 |
|
Retained deficit |
|
| (15,215,953 | ) |
|
| (13,782,732 | ) |
Total stockholders' equity (deficit) |
|
| 198,069 |
|
|
| (97,096 | ) |
Total liabilities and stockholders' equity (deficit) |
| $ | 683,296 |
|
| $ | 411,553 |
|
|
|
|
|
|
|
|
|
|
(The accompanying notes are an integral part of these consolidated financial statements) |
4 |
GLOBAL WHOLEHEALTH PARTNERS CORPORATION |
|
|
|
| ||||
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) |
|
|
|
|
|
| ||
|
|
|
|
|
|
| ||
|
| Three Months Ended September 30, |
| |||||
|
| 2021 |
|
| 2020 |
| ||
|
|
|
|
|
|
| ||
Revenue |
| $ | 375 |
|
| $ | 15,385 |
|
Cost of revenue |
|
| 0 |
|
|
| 10,544 |
|
Gross profit |
|
| 375 |
|
|
| 4,841 |
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
|
Professional fees |
|
| 57,250 |
|
|
| 33,775 |
|
Research and development - related party |
|
| 507,005 |
|
|
| 138,310 |
|
Research and development |
|
| 0 |
|
|
| 700 |
|
Selling, general and administrative - related party |
|
| 57,250 |
|
|
| 7,653 |
|
Selling, general and administrative |
|
| 584,048 |
|
|
| 25,610 |
|
Total operating expense |
|
| 1,205,553 |
|
|
| 206,048 |
|
Loss from operations |
|
| (1,205,178 | ) |
|
| (201,207 | ) |
Other income (expense) |
|
|
|
|
|
|
|
|
Interest expense |
|
| (86,364 | ) |
|
| (4,906 | ) |
Amortization of debt discount |
|
| (141,679 | ) |
|
| (41,050 | ) |
Total other income (expense) |
|
| (228,043 | ) |
|
| (45,956 | ) |
Net loss |
| $ | (1,433,221 | ) |
| $ | (247,163 | ) |
|
|
|
|
|
|
|
|
|
Basic and Diluted Loss per Common Share |
| $ | (0.02 | ) |
| $ | (0.00 | ) |
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding - basic and diluted |
|
| 81,486,898 |
|
|
| 59,979,728 |
|
|
|
|
|
|
|
|
|
|
(The accompanying notes are an integral part of these consolidated financial statements) |
GLOBAL WHOLEHEALTH PARTNERS CORPORATION | ||||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY | ||||||||||||||||||||||||
Common Stock | Additional Paid-in | Common Stock | Retained | Total Stockholders’ | ||||||||||||||||||||
Shares | Amount | Capital | Payable | Deficit | Equity | |||||||||||||||||||
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2020 | ||||||||||||||||||||||||
BALANCE JULY 1, 2020 | 59,966,358 | $ | 59,966 | $ | 4,628,908 | $ | — | $ | (4,748,609 | ) | $ | (59,735 | ) | |||||||||||
Common stock issued for cash | — | — | — | 340,000 | — | 340,000 | ||||||||||||||||||
Discount on convertible promissory notes due to beneficial conversion feature | — | — | 123,831 | — | — | 123,831 | ||||||||||||||||||
Net loss for the three months ended September 30, 2020 | — | — | — | — | (247,163 | ) | (247,163 | ) | ||||||||||||||||
Balance, September 30, 2020 | 59,966,358 | $ | 59,966 | $ | 4,752,739 | $ | 340,000 | $ | (4,995,772 | ) | $ | 156,933 | ||||||||||||
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2019 | ||||||||||||||||||||||||
BALANCE JULY 1, 2019 | 56,116,358 | $ | 56,116 | $ | 426,784 | — | $ | (463,082 | ) | $ | 19,818 | |||||||||||||
Net loss for the three months ended September 30, 2019 | — | — | — | — | (18,798 | ) | (18,798 | ) | ||||||||||||||||
Balance, September 30, 2019 | 56,116,358 | $ | 56,116 | $ | 426,784 | $ | — | $ | (481,880 | ) | $ | 1,020 | ||||||||||||
(The accompanying notes are an integral part of these consolidated financial statements) |
5 |
GLOBAL WHOLEHEALTH PARTNERS CORPORATION |
|
|
|
|
|
|
|
|
| |||||||||||||||||||
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (UNAUDITED) | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||
|
| Common Stock |
|
| Additional Paid-in |
|
| Common Stock |
|
| Deferred |
|
| Retained |
|
| Total Stockholders' Equity |
| ||||||||||
|
| Amount |
|
| Shares |
|
| Capital |
|
| Payable |
|
| Compensation |
|
| Deficit |
|
| (Deficit) |
| |||||||
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
BALANCE JULY 1, 2021 |
|
| 78,713,899 |
|
| $ | 78,714 |
|
| $ | 13,529,861 |
|
| $ | 77,061 |
|
| $ | 0 |
|
| $ | (13,782,732 | ) |
| $ | (97,096 | ) |
Common stock sold pursuant to the EMC2 SPA |
|
| 3,438,484 |
|
|
| 3,438 |
|
|
| 799,748 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 803,186 |
|
Common stock issued upon conversion of convertible promissory note |
|
| 250,000 |
|
|
| 250 |
|
|
| 76,811 |
|
|
| (77,061 | ) |
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
Common issued stock related to services |
|
| 750,000 |
|
|
| 750 |
|
|
| 354,000 |
|
|
| 129,000 |
|
|
| (96,750 | ) |
|
| 0 |
|
|
| 387,000 |
|
Discount on convertible promissory notes due to beneficial conversion feature |
|
| - |
|
|
| 0 |
|
|
| 538,200 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 538,200 |
|
Net loss for the three months ended September 30, 2021 |
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| (1,433,221 | ) |
|
| (1,433,221 | ) |
Balance, September 30, 2021 |
|
| 83,152,383 |
|
| $ | 83,152 |
|
| $ | 15,298,620 |
|
| $ | 129,000 |
|
| $ | (96,750 | ) |
| $ | (15,215,953 | ) |
| $ | 198,069 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BALANCE JULY 1, 2020 |
|
| 59,966,358 |
|
| $ | 59,966 |
|
| $ | 4,628,908 |
|
| $ | 0 |
|
| $ | 0 |
|
| $ | (4,748,609 | ) |
| $ | (59,735 | ) |
Common stock issued for cash |
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| 340,000 |
|
|
| 0 |
|
|
| 0 |
|
|
| 340,000 |
|
Discount on convertible promissory notes due to beneficial conversion feature |
|
| - |
|
|
| 0 |
|
|
| 123,831 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 123,831 |
|
Net loss for the three months ended September 30, 2020 |
|
| - |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| 0 |
|
|
| (247,163 | ) |
|
| (247,163 | ) |
Balance, September 30, 2020 |
|
| 59,966,358 |
|
| $ | 59,966 |
|
| $ | 4,752,739 |
|
| $ | 340,000 |
|
| $ | 0 |
|
| $ | (4,995,772 | ) |
| $ | 156,933 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(The accompanying notes are an integral part of these consolidated financial statements) |
6 |
GLOBAL WHOLEHEALTH PARTNERS CORPORATION |
|
|
|
|
|
| ||
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) |
|
|
|
|
|
| ||
|
| Three Months Ended September 30, |
| |||||
|
| 2021 |
|
| 2020 |
| ||
Cash flows from operating activities |
|
|
|
|
|
| ||
Net loss |
| $ | (1,433,221 | ) |
| $ | (247,163 | ) |
Adjustments to reconcile net loss to net cash flows used in operating activities: |
|
|
|
|
|
|
|
|
Common stock issued for services |
|
| 387,000 |
|
|
| 0 |
|
Amortization of debt discount |
|
| 141,679 |
|
|
| 41,050 |
|
Depreciation and amortization |
|
| 291 |
|
|
| 194 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
(Increase) decrease in prepaid expenses and other assets |
|
| (189,564 | ) |
|
| 12,513 |
|
(Increase) decrease in inventory |
|
|
|
|
|
| (62,456 | ) |
Increase (decrease) in accounts payable and accrued expenses |
|
| 1,459 |
|
|
| (37,965 | ) |
Increase (decrease) related party payables |
|
| (92,995 | ) |
|
| (961 | ) |
Net cash flows used in operating activities |
|
| (1,185,351 | ) |
|
| (294,788 | ) |
|
|
|
|
|
|
|
|
|
Cash flows used in investing activity |
|
|
|
|
|
|
|
|
Purchase of equipment |
|
| 0 |
|
|
| (3,505 | ) |
Net cash flows used in investing activity |
|
| 0 |
|
|
| (3,505 | ) |
|
|
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
|
|
|
Proceeds from sale of common stock |
|
| 950,000 |
|
|
| 340,000 |
|
Proceeds from convertible promissory notes |
|
| 538,200 |
|
|
| 162,000 |
|
Payments on promissory notes |
|
| (70,780 | ) |
|
| 0 |
|
Proceeds from related party note, net |
|
| 0 |
|
|
| 24,410 |
|
Payments of related party note |
|
| (2,785 | ) |
|
| (110,000 | ) |
Net cash flows from financing activities |
|
| 1,414,635 |
|
|
| 416,410 |
|
Change in cash |
|
| 229,284 |
|
|
| 118,117 |
|
Cash at beginning of period |
|
| 74,702 |
|
|
| 14,497 |
|
Cash at end of period |
| $ | 303,986 |
|
| $ | 132,614 |
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
|
|
Interest paid in cash |
| $ | 5,450 |
|
| $ | 0 |
|
Income taxes paid in cash |
| $ | 0 |
|
| $ | 0 |
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of non-cash transactions: |
|
|
|
|
|
|
|
|
Debt discount recorded for beneficial conversion feature |
| $ | 356,656 |
|
| $ | 0 |
|
|
|
|
|
|
|
|
|
|
(The accompanying notes are an integral part of these consolidated financial statements) |
GLOBAL WHOLEHEALTH PARTNERS CORPORATION | ||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
Three Months Ended September 30, | ||||||||
2020 | 2019 | |||||||
Cash flows from operating activities | ||||||||
Net loss | $ | (247,163 | ) | $ | (18,798 | ) | ||
Adjustments to reconcile net loss to net cash flows used in operating activities: | ||||||||
Depreciation | 194 | — | ||||||
Accretion of debt discount | 41,050 | — | ||||||
Changes in operating assets and liabilities: | ||||||||
(Increase) decrease in prepaid expenses and other current assets | 12,513 | — | ||||||
(Increase) decrease in inventory | (62,456 | ) | (20,085 | ) | ||||
Increase (decrease) in accounts payable and accrued expenses | (37,965 | ) | 4,585 | |||||
Increase (decrease) related party payables | (961 | ) | 14,500 | |||||
Net cash flows from operating activities | (294,788 | ) | (19,798 | ) | ||||
Cash flows used in investing activity | ||||||||
Purchase of equipment | (3,505 | ) | — | |||||
Net cash flows used in investing activity | (3,505 | ) | — | |||||
Cash flows from financing activities | ||||||||
Proceeds from sale of common stock | 340,000 | — | ||||||
Proceeds from convertible promissory notes | 162,000 | — | ||||||
Proceeds from related party note, net | 24,410 | — | ||||||
Payments of related party note | (110,000 | ) | — | |||||
Net cash flows from financing activities | 416,410 | — | ||||||
Change in cash | 118,117 | (19,798 | ) | |||||
Cash at beginning of period | 14,497 | 19,918 | ||||||
Cash at end of period | $ | 132,614 | $ | 120 | ||||
Supplemental disclosure of cash flow information: | ||||||||
Interest paid in cash | $ | — | $ | — | ||||
Income taxes paid in cash | $ | — | $ | — | ||||
(The accompanying notes are an integral part of these consolidated financial statements) |
7 |
GLOBAL WHOLEHEALTH PARTNERS CORPORATION
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 20202021 AND 20192020
NOTE 1 – Organization, –Organization, Basis of Presentation and Going Concern
Organization
Global WholeHealth Partners Corporation was incorporated on March 7, 2013 in the State of Nevada.Nevada under the name Texas Jack Oil and Gas Corp. On May 9, 2019, the Company amended its Articles of Incorporation to effect a change of name to Global WholeHealth Partners Corporation. The Company’s ticker symbol changed to GWHP.
The Company sells and developdevelops in-vitro diagnostic products, including rapid diagnostic tests, such as the COVID-19 Test, 6 minute6-minute rapid whole blood Ebola Test, 6 minute6-minute whole blood Zika test, 8 minute8-minute whole blood rapid TB test and over 75 other tests.
Basis of Presentation
The accompanying unaudited interim condensed consolidated financial statements of Global WholeHealth Partners Corporation and Subsidiary (the “Company”“Company”) as of September 30, 2020,2021, and for the three months ended September 30, 20202021 and 2019,2020, include the accounts of the Company and its wholly-owned and controlled subsidiary, Global WholeHealth Partners Corp, a private Wyoming corporation, and have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”GAAP”), for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted.
The preparation of consolidated financial statements in conformity with U.S. 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 consolidated financial statements, and the reported amounts of expenses during the reporting periods. Actual results may differ from those estimates. The interim financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2020.2021. In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited financial statements and include all adjustments (including normal recurring adjustments) necessary for the fair presentation of the Company’s financial position as of September 2020,30, 2021, results of operations for the three months ended September 30, 20202021 and 2019,2020, and stockholders’ equity and cash flows for the three months ended September 30, 20202021 and 2019.2020. The Company did not record an income tax provision during the periods presented due to net taxable losses. The results of operations for any interim period are not necessarily indicative of the results of operations for the entire year.
RisksCOVID-19 Pandemic and Uncertaintiesthe Coronavirus Aid, Relief, and Economic Security (“CARES”) Act
In December 2019, an outbreak of the COVID-19 virus was reported in Wuhan, China. On March 11,January 30, 2020, the World Health Organization declared(“WHO”) announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China (the “COVID-19 outbreak”) and the risks to the international community as the virus spreads globally beyond its point of origin. In March 2020, the WHO classified the COVID-19 virusoutbreak as a global pandemic, andbased on March 13, 2020, President Donald J. Trump declared the virus a national emergencyrapid increase in the United States. This highly contagious disease has spread to mostexposure globally.
The full impact of the countries in the world and throughout the United States, creating a serious impact on customers, workforces and suppliers, disrupting economies and financial markets, and potentially leadingCOVID-19 outbreak continues to a world-wide economic downturn. It has caused a disruptionevolve as of the normaldate of this report. As such, it is uncertain as to the full magnitude that the pandemic may have on the Company’s financial condition, liquidity, and future results of operations. Management is actively monitoring the impact of the global situation on its financial condition, liquidity, operations, suppliers, industry, and workforce. Given the daily evolution of many businesses, including the temporary closureCOVID-19 outbreak and the global responses to curb its spread, the Company is not able to estimate the effects of the COVID-19 outbreak on its results of operations, financial condition, or scale-back of business operations and/or the imposition of either quarantine or remote work or meeting requirementsliquidity for employees, either by government order or on a voluntary basis. fiscal year 2022.
The pandemic may adversely affect our operations, our employees and our employee productivity. It may also impact the ability of our subcontractors, partners, and suppliers to operate and fulfill their contractual obligations, and result in an increase in costs, delays or disruptions in performance. Our employees are working remotely and using various technologies to perform their functions. In reaction to the spread of COVID-19 in the United States, many businesses have instituted social distancing policies, including the closure of offices and worksites and deferring planned business activity. The disruption and volatility in the global and domestic capital markets may increase the cost of capital and limit our ability to access capital. Both the health and economic aspects of the COVID-19 virus are highly fluid and the future course of each is uncertain. For these reasons and other reasons that may come to light if the coronavirus pandemic and associated protective or preventative measures expand, we may experience a material adverse effect on our business operations, revenues and financial condition; however, its ultimate impact is highly uncertain and subject to change.
On March 27, 2020, then President Trump signed into law the CARES Act. The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations, increased limitations on qualified charitable contributions, and technical corrections to tax depreciation methods for qualified improvement property. The CARES Act also appropriated funds for the SBA Paycheck Protection Program loans that are forgivable in certain situations to promote continued employment, as well as Economic Injury Disaster Loans to provide liquidity to small businesses harmed by COVID-19.
Going Concern
The Company’s consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs to allow it to continue as a going concern.
As shown in the accompanying financial statements, the Company incurred negative operating cash flows of $294,788$1,185,351 for the three months ended September 30, 20202021 and has an accumulated deficit of $4,995,772$15,215,953 from inception through September 30, 2020.2021. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable.
In view of these conditions, the ability of the Company to continue as a going concern is in doubt and dependent upon achieving a profitable level of operations and on the ability of the Company to obtain necessary financing to fund ongoing operations. Historically, the Company has relied upon internally generated funds, and funds from the sale of stock, issuance of promissory notes and loans from its shareholders and private investors to finance its operations and growth. Management is planning to raise necessary additional funds for working capital through loans and/or additional sales of its common stock. However, there is no assurance that the Company will be successful in raising additional capital or that such additional funds will be available on acceptable terms, if at all. Should the Company be unable to raise this amount of capital its operating plans will be limited to the amount of capital that it can access. These consolidated financial statements do not give effect to any adjustments which will be necessary should the Company be unable to continue as a going concern and therefore be required to realize its assets and discharge its liabilities in other than the normal course of business and at amounts different from those reflected in the accompanying consolidated financial statements.
NOTE 2 – Significant Accounting Policies
New Accounting Pronouncements Not Yet Adopted
We evaluate all Accounting Standards Updates (ASUs) issued by the Financial Accounting Standards Board (FASB) for consideration of their applicability. ASUs not included in our disclosures were assessed and determined to be either not applicable or are not expected to have a material impact on our Consolidated Financial Statements.
Accounting Pronouncements Recently Adopted
None. In August 2020, the FASB issued ASU No. 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models required under current U.S. GAAP. ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain areas. ASU 2020-06 is effective for the Company for fiscal years beginning after December 31, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020 and adoption must be as of the beginning of the Company’s annual fiscal year. The Company adopted ASU 2020-06 beginning with our fiscal year starting on July 1, 2021. We do not expect the adoption of ASU 2020-06 to have a material impact on our consolidated financial statements.
In January 2020, the FASB issued ASU 2020-01 - Investments - Equity securities (Topic 321), Investments - Equity method and joint ventures (Topic 323), and Derivatives and hedging (Topic 815) - Clarifying the interactions between Topic 321, Topic 323, and Topic 815. The amendments in this Update improve the accounting for certain equity securities upon the application or discontinuation of the equity method of accounting and clarify the scope considerations for forward contracts and purchased options on certain securities. The amendments are effective for public entities in fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted. The Company adopted ASU 2020-01 beginning with our fiscal year starting on July 1, 2021. We do not expect the adoption of ASU 2020-01 to have a material impact on our consolidated financial statements.
In December 2019, the FASB issued ASU 2019-12, Income Taxes – Simplifying the Accounting for Income Taxes. The guidance removes certain exceptions for recognizing deferred taxes for equity method investments, performing intra period allocation, and calculating income taxes in interim periods. The ASU also adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for goodwill and allocating taxes to members of a consolidated group, among others. This guidance is effective for interim and annual reporting periods beginning after December 15, 2020. Early adoption of the standard is permitted, including adoption in interim or annual periods for which financial statements have not yet been issued. The transition requirements are dependent upon each amendment within this update and will be applied either prospectively or retrospectively. The Company adopted ASU 2019-12 effective July 1, 2021. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements, financial position, results of operations, or cash flows.
Principles of Consolidation
Global WholeHealth Partners Corp, a private Wyoming corporation was incorporated on April 9, 2019 to receive private investor funds and aggregate certain in vitro diagnostic assets.
These consolidated financial statements presented are those of Global WholeHealth Partners Corporation and its wholly owned subsidiary, Global Private. All significant intercompany balances and transactions have been eliminated.
Use of Estimates
The preparation of financial statements in conformity with U.S. 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 revenues and expenses during the reporting period. Actual results could differ from those estimates. The estimates made by management primarily relate to accounts receivable, inventories, deferred income tax valuation allowances, and identifiable intangible assets.
Inventory
Inventory is comprised of finished goods and stated at the lower of cost or net realizable value. Inventory cost is determined on a weighted average basis in accordance with ASC 330-10-30-9. Provisions are made to reduce slow-moving, obsolete, or unusable inventories to their estimated useful or scrap values. When necessary, the Company establishes reserves for this purpose. During the three months ended September 30, 2021, the Company did not recognize any adjustments to the value in inventory.
Equipment
Fixed assets are carried at cost, less accumulated depreciation. Major improvements are capitalized, while repair and maintenance are expensed when incurred. Renewals and betterments that materially extend the life of the assets are capitalized. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in that period.
Depreciation is computed on a straight-line basis over estimated useful lives of the related assets. The estimated useful lives of depreciable assets are:
Intangible assets Other definite-lived intangible assets are amortized over their useful lives. The Company reviews the recoverability of long-lived assets whenever events or changes in circumstances indicate the carrying amount of such assets may not be recoverable. Revenue Recognition
The Company recognizes revenue from operations through the sale of products. Product revenue is comprised of the sale of consumables. To date, all products sold have been fully paid for in advance of shipment.
Revenue is recognized when control of products and services is transferred to the customer in an amount that reflects the consideration that the Company expects to receive from the customer in exchange for those products and services. This process involves identifying the contract with the customer, determining the performance obligations in the contract, determining the contract price, allocating the contract price to the distinct performance obligations in the contract, if applicable, and recognizing revenue when the performance obligations have been satisfied. A performance obligation is considered distinct from other obligations in a contract when it provides a benefit to the customer either on its own or together with other resources that are readily available to the customer and is separately identified in the contract. The Company considers a performance obligation satisfied once it has transferred control of a good or service to the customer, meaning the customer has the ability to use and obtain the benefit of the good or service. The Company recognizes revenue for satisfied performance obligations only when it determines there are no uncertainties regarding payment terms or transfer of control.
Revenue from product sales is generally recognized upon shipment to the end customer, which is when control of the product is deemed to be transferred. Invoicing typically occurs prior to shipment and the term between invoicing and when payment is due is not significant.
Revenue is recorded net of discounts, and sales taxes collected on behalf of governmental authorities. Sales commissions are recorded as selling and marketing expenses when incurred.
The Company records any payments received from customers prior to the Company fulfilling its performance obligation(s) as deferred revenue.
The Company had one customer that represented 100% of revenue for the three months ended September 30, 2021. The Company had five customers that represented 91.1% of revenue (20.8%, 20.2%, 19.0%, 17.3% and 13.8%) for the three months ended September 30, 2020.
Leases The Company recognizes leases with a term of greater than a year on the balance sheet by recording right-of-use assets and lease liabilities. Leases can be classified as either operating leases or finance leases. Operating leases will result in straight-line lease expense, while finance leases will result in front-loaded expense. The Company’s lease consists of an operating lease for office space. The Company does not recognize a lease liability or right-of-use asset on the balance sheet for short-term leases. Instead, the Company recognizes short-term lease payments as an expense on a straight-line basis over the lease term. A short-term lease is defined as a lease that, at the commencement date, has a lease term of 12 months or less and does not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise. Derivatives All derivatives are recorded at fair value on the balance sheet. The Company has determined fair values using market-based pricing models incorporating readily available prices and or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity) that requires judgment and estimates. Transactions with Related Parties Parties are considered to be related to the Company if the parties directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal stockholders of the Company, its management, members of the immediate families of principal stockholders of the Company and its management and other parties with which the Company may deal where one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all material related-party transactions. All transactions shall be recorded at fair value of the goods or services exchanged. Property purchased from a related party is recorded at the cost to the related party and any payment to or on behalf of the related party in excess of the cost is reflected as compensation or distribution to related parties depending on the transaction. Stock-Based Compensation The Company accounts for stock-based compensation in accordance with Accounting Standards Codification (“ASC”) 718, Stock Based Compensation. ASC 718 requires all stock-based payments to directors, employees and consultants, including grants of stock options, to be recognized in the consolidated statements of operations based on their fair values. If a stock-based award contains performance-based conditions, at the point that it becomes probable that the performance conditions will be met, the Company records a cumulative catch-up of the expense from the grant date to the current date, and then amortizes the remainder of the expense over the remaining service period. Management evaluates when the achievement of a performance-based condition is probable based on the expected satisfaction of the performance conditions as of the reporting date. Net Income (Loss) Per Share
Basic net loss per common share attributable to common stockholders is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding for the period, without consideration for common stock equivalents. Diluted net loss per common share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common share equivalents outstanding for the period determined using the treasury-stock method. Dilutive common stock equivalents are comprised of convertible
NOTE 3 – Equipment
Equipment consists of the following:
During the three months ended September 30,
NOTE 4 – Stockholder’s Equity
Preferred Stock
The Company has Preferred stock: $0.001 par value; 10,000,000 shares authorized with no shares issued and outstanding.
Common Stock
The Company has 400,000,000 shares of Common Stock authorized of which On April 20, 2021, the Company and Empire Associates, Inc. entered into a Stock Purchase Agreement whereby the Company agreed to issue 250,000 to Empire Associates, Inc. in full satisfaction of the $77,060 paid to Geneva by Empire Associates on behalf of the Company. The shares were issued on September 2, 2021, and are included in the calculation of EPS on an as-if issued basis.
On July
On July 22, 2020, the Company entered into a Common Stock Purchase Agreement (the
Warrants Each of the Company’s warrants outstanding entitles the holder to purchase one share of the Company’s common stock for each warrant share held. A summary of the Company’s warrants outstanding and exercisable as of September 30, 2021 and June 30, 2021 is as follows:
NOTE 5 –Transactions with Related Persons On July 10, 2021, the Company and LionsGate Funding Management LLC (“LGFM”) entered into a Media and Marketing Services Agreement (the “MMSA”). Pursuant to the MMSA, 1) LGFM will provide services designed to increase the awareness and visibility in the investment community and market product to distributors throughout the world for a period of 12 months; and 2) the Company will pay LGFM $100,000 and issue 300,000 shares of restricted common stock. On July 1, 2021, the Company paid LionsGate $24,000 or $21,215 in excess of the balance owing to LionsGate which the Company recorded as a receivable. Beginning in January 2020, the Company utilizes the R&D capabilities of Pan Probe Biotech to perform studies The Company paid rent to Pan Probe on a temporary basis, from April 21, 2020 through October 21, 2020, at a rate of $2,551 per month or $15,306 which was prepaid in full in April 2020. During the three months ended September 30, 2020, the Company recognized $7,653 of rent
Related Party Note
From time-to-time the Company receives shareholder advances from LionsGate to cover operating costs. On March 29, 2020, the Company issued a Promissory Note (the “Note”)
During the three months ended September 30, 2021 and 2020, the Company recognized $0 and $411 of interest expense related to the
NOTE 6 – Convertible Promissory Notes
On April 18, 2020, the Company issued five separate unsecured convertible promissory notes in exchange for $95,000 (the "Convertible Notes"). Each Convertible Note contains the same terms and conditions. The Convertible Notes bear interest of 8%, Firstfire Global Opportunities Fund LLC Firstfire Note No. 1 On June 18, 2021, the Company entered into a Securities Purchase Agreement with Firstfire Global Opportunities Fund LLC ("Firstfire"), for the sale of a secured, 12% senior secured convertible promissory note in the principle amount of $275,000 and 165,000 stock purchase warrants. On July 8, 2021, the Company received $224,500 net of a $25,000 original issue discount and $25,500 of placement agent and legal fees, and issued a senior secured convertible promissory note (the "Firstfire Note No. 1") in the amount of $275,000. The terms of the Firstfire Note No. 1 provide for all principal and interest due in twelve (12) months on June 18, 2022, with $33,000 of interest (i.e., $275,000 x 12%) earned as of June 18, 2021, interest due upon default of 20% annually, a prepayment penalty of 5% of all outstanding amounts due, and if the Company triggers and event of default which is not cured, then the total of all amounts owing will be increased by 25%, to be paid at the discretion of Firstfire, in the form of cash or conversion into common stock. The Firstfire Note No. 1 is convertible any time after June 18, 2021 into shares of common stock at a conversion price that is the lesser of $0.35 per share or seventy percent (70%) of the lowest traded price of our common stock during the ten (10) trading day period prior to conversion. Conversion of the Firstfire Note No. 1 and/or the Firstfire Warrant No. 1 is limited to Firstfire beneficially owning no more than 4.99% of the outstanding common stock of the Company. Additionally, the Company entered into a Registration Rights Agreement with Firstfire whereby the Company agreed to file within 90 days and have declared effective within 120 days from June 18, 2021, a registration statement to cover the shares issuable under the Firstfire Note No. 1 and Firstfire Warrant No. 1. Failure to file within 90 days will result in a $2,500 in liquidated damages. Failure to have the registration declared effective before 120 days will result in a $2,500 in liquidated damages. As additional consideration, the Company granted Firstfire a warrant to purchase 165,000 shares of our common stock (the "Firstfire Warrant No. 1") at an exercise price of $0.50 for a period of three (3) years. The Firstfire Warrant No. 1 contains provision for an anti-dilution adjustment and cashless exercise rights if a registration statement covering the resale of the Firstfire Warrant No. 1 shares is not available for the resale of such Firstfire Warrant No. 1 shares. The fair value of the Firstfire Warrant No. 1 was $0.36 per share and was calculated using the Black-Scholes option pricing model with the following assumptions: (1) Stock price of $0.41 per share; (2) exercise price of $0.50 per share; (3) discount rate 0.47% (4) expected life of 3 years, (5) expected volatility of 194.5%, and (6) zero expected dividends. This resulted in allocating $48,849 to the Firstfire Warrant No. 1 and $226,151 to the Firstfire Note No. 1. Then, we calculated the debt discount attributable to the beneficial conversion feature which amounted to $264,372. As a result of the original issue discount, fees, warrant and beneficial conversion feature of the Firstfire Note No. 1, the Company recorded a debt discount of $275,000 which is being accreted over the term of the Firstfire Note No. 1. As of September 30, 2021, the Firstfire Note No. 1 is convertible into 1,795,918 shares of common stock.
Firstfire Note No. 2 On August 27, 2021, the Company entered into a Securities Purchase Agreement with Firstfire, for the sale of a secured, 12% senior secured convertible promissory note in the principle amount of $385,000 and 330,000 stock purchase warrants. The Company received $313,700 net of a $35,000 original issue discount and $36,300 of placement agent and legal fees, and issued a senior secured convertible promissory note (the "Firstfire Note No. 2") in the amount of $385,000. The terms of the Firstfire Note No. 2 provide for all principal and interest due in twelve (12) months on August 27, 2022, with $46,200 of interest (i.e., $385,000 x 12%) earned as of August 27, 2021, interest due upon default of 20% annually, a prepayment penalty of 5% of all outstanding amounts due, and if the Company triggers and event of default which is not cured, then the total of all amounts owing will be increased by 25%, to be paid at the discretion of Firstfire, in the form of cash or conversion into common stock. The Firstfire Note No. 2 is convertible any time after August 27, 2021 if the underlying shares have an effective registration statement, otherwise, the right of conversion commences after 180 days from August 31, 2021 into shares of common stock at a conversion price that is the lesser of $0.35 per share or seventy percent (70%) of the lowest traded price of our common stock during the ten (10) trading day period prior to conversion. Conversion of the Firstfire Note No. 2 and/or the Firstfire Warrant No. 2 is limited to Firstfire beneficially owning no more than 4.99% of the outstanding common stock of the Company. Additionally, the Company entered into a Registration Rights Agreement with Firstfire whereby the Company agreed to file within 90 days and have declared effective within 120 days from August 27, 2021, a registration statement to cover the shares issuable under the Firstfire Note No. 2 and Firstfire Warrant No. 2. Failure to file within 90 days will result in a $3,500 in liquidated damages. Failure to have the registration declared effective before 120 days will result in a $3,500 in liquidated damages. As additional consideration, the Company granted Firstfire a warrant to purchase 330,000 shares of our common stock (the "Firstfire Warrant No. 2") at an exercise price of $0.50 for a period of three (3) years. The Firstfire Warrant No. 2 contains provision for an anti-dilution adjustment and cashless exercise rights if a registration statement covering the resale of the Firstfire Warrant No. 2 shares is not available for the resale of such Firstfire Warrant No. 2 shares. The fair value of the Firstfire Warrant No. 2 was $0.32 per share and was calculated using the Black-Scholes option pricing model with the following assumptions: (1) Stock price of $0.37 per share; (2) exercise price of $0.50 per share; (3) discount rate 0.41% (4) expected life of 3 years, (5) expected volatility of 184.0%, and (6) zero expected dividends. This resulted in allocating $82,870 to the Firstfire Warrant No. 2 and $302,130 to the Firstfire Note No. 2. Then, we calculated the debt discount attributable to the beneficial conversion feature which amounted to $248,111. As a result of the original issue discount, fees, warrant and beneficial conversion feature of the Firstfire Note No. 2, the Company recorded a debt discount of $385,000 which is being accreted over the term of the Firstfire Note No. 2. As of September 30, 2021, the Firstfire Note No. 2 is convertible into 2,514,286 shares of common stock. Geneva Promissory Note dated April 26, 2021 On April 26, 2021, the Company and Geneva entered into a Securities Purchase Agreement (the "SPA"). Pursuant to the SPA, The Company sold to Geneva a Promissory Note for the principal amount of $86,625 (the "Geneva Promissory Note ") and issued a warrant to purchase up to 51,975 shares of common stock (the “Geneva Warrant”). Under the Geneva Promissory Note the Company received net proceeds of $75,000 which included deductions for a 10% original issue discount, $3,000 for legal fees and $750 as a due diligence fee. The Geneva Promissory Note matured in one (1) year, requires ten (10) monthly payments of $9,529 beginning June 1, 2021, and is unsecured. On August 9, 2021, the Company repaid, in whole, the balance due under the Geneva Promissory Note, or $57,173. During the three months ended September 30, 2021, the Company made payments totaling $76,230 including principal of $70,780 and interest of $5,450, and recognized accretion of the debt discount of $$27,460.
Geneva Convertible
On July 13, 2020, On December 21, 2020, the Company paid $90,487 as full payment of the Geneva CPN dated July 13, 2020. The payment included $63,000 of principal, $2,917 of interest related to the coupon and $24,570 as a prepayment penalty recorded as interest expense. On February 16, 2021, Empire Associates, Inc., an unaffiliated company, paid off the balance, in-full, on the note dated August 3, 2020. The payment totaled $77,061 and included $55,000 of principal, $3,256 of interest related to the coupon and $18,805 as a prepayment penalty recorded as interest expense. At the time of payoff, the Company and Empire Associates, Inc. had not entered into any agreements related to the payment of the Geneva CPN dated August 3, 2020. On April 20 the Company and Empire Associates, Inc. entered into a Stock Purchase Agreement whereby the Company agreed to On March 15, 2021, the Company issued 146,486 shares of common stock The debt discount attributable to the legal fees paid and fair value of the beneficial conversion feature contained in the Geneva CPNs amounted to
The Geneva CPNs were paid in full in fiscal 2021. During the three months ended September 30 2020, the Company recognized $4,495 of interest expense and $41,050 of accretion related to the
NOTE 7 - Leases On September 14, 2021, the Company leased 6,900 square feet of office and light industrial space located at 1130 Calle Cordillera, San Clemente, California and entered into a Standard Multi-Tenant Office Lease (the “Lease”). Pursuant to the Lease the term is five years beginning on October 15, 2021, the Company paid a security deposit of $32,621, and monthly base rent is $9,696 subject to an annual increase of 3% each year. NOTE 8 – Subsequent Events
Management has reviewed material events subsequent of the period ended September 30,
Subsequent to September 30, 2021 and through October 27, 2021, the Company sold 875,000 Purchase Shares to EMC2 Capital for $0.20 per share resulting in proceeds to the Company of $175,000.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
This Report on Form 10-Q contains forward-looking statements which involve assumptions and describe our future plans, strategies, and expectations, and are generally identifiable by use of words such as
Such forward-looking statements include statements regarding, among other things, (a) the potential markets for our products, our potential profitability, and cash flows, (b) our growth strategies, (c) anticipated trends in the in-vitro diagnostics industry, (d) our future financing plans, and (e) our anticipated needs for working capital. This information may involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from the future results, performance, or achievements expressed or implied by any forward-looking statements. These statements may be found under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” as well as in this Form 10-Q generally. Actual events or results may differ materially from those discussed in forward-looking statements as a result of various factors, including, without limitation, the matters described in this Form 10-Q generally. In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained in this filing will in fact occur. In addition to the information expressly required to be included in this filing, we will provide such further material information, if any, as may be necessary to make the required statements, in light of the circumstances under which they are made, not misleading. Although forward-looking statements in this report reflect the good faith judgment of our management, forward-looking statements are inherently subject to known and unknown risks, business, economic and other risks and uncertainties that may cause actual results to be materially different from those discussed in these forward-looking statements. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. We assume no obligation to update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this report, other than as may be required by applicable law or regulation. Readers are urged to carefully review and consider the various disclosures made by us in our filings with the Securities and Exchange Commission which attempt to advise interested parties of the risks and factors that may affect our business, financial condition, results of operation and cash flows. If one or more of these risks or uncertainties materialize, or if the underlying assumptions prove incorrect our actual results may vary materially from those expected or projected.
Except where the context otherwise requires and for purposes of this Form 10-Q only, “we” “us“ “our“ “Company“ “our Company“ and “Global WholeHealth Partners” refer to Global WholeHealth Partners Corporation, a Nevada corporation.
Our Business
We sell and develop in-vitro diagnostic products, including rapid diagnostic tests, such as the COVID-19 test,
The Company was founded to develop
All of the products we sell are manufactured in a U.S. Food and Drug Administration (“
As a result of the COVID-19
The ability of the As of
Results of Operations
Three months ended September 30,
Operating Expenses
Professional Fees
Professional fees relate to expenditures incurred primarily for legal and accounting services. During the three Research and Product Development
Research and Product Development (“R&D”) costs represent costs incurred to develop our tests and are incurred pursuant to Selling, General and Administrative
Selling, general and administrative (“SG&A”) costs include all expenditures related to personnel, travel and entertainment, public company compliance costs, insurance and other office related costs. SG&A costs increased by $221,035 to $254,298 during the three months ended September 30, 2021 compared to $33,263 during the three months ended September 30, 2020. The increase is due to an increase of $85,000 in personnel costs, and $138,172 in marketing costs offset by a $2,137 decrease in other administrative costs. Stock Compensation Stock compensation represents the expense associated with the issuance of stock in exchange for services and is non-cash in nature. Stock compensation is based on our stock price at the measurement date and fluctuates as our stock price changes. During the three months ended September 30,
Other Income and (Expense)
Other expense Liquidity and Capital Resources
As of September 30,
Summary of Cash Flows
Presented below is a table that summarizes the cash provided or used in our activities and the amount of the respective increases or decreases in cash provided by (used in) those activities between the fiscal periods:
Operating Activities
Net cash used in operating activities increased
Investing Activities
Net cash used in investing activities
Financing Activities
During the three months ended September 30,
Other Contractual Obligations
None.
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 are material to investors.
Due to the level of activity and lack of complex transactions, we believe there are currently no critical accounting policies
Recently Issued Accounting Pronouncements For a discussion of new accounting pronouncements see Note 2
Related Party Transactions
For a discussion of our Related Party Transactions,
Item 4. Controls and Procedures
Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), as of the end of the period covered by this quarterly report. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of September 30,
Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II – OTHER INFORMATION
Item 1A. Risk Factors
COVID-19 Pandemic Impact and Risk
At this time, it is not possible to fully assess the impact of the COVID-19 pandemic on the Company’s operations and capital requirements. Should the COVID-19 pandemic continue, it may adversely affect the Company’s ability to (i) retain employees and consultants; (ii) obtain additional financing on terms acceptable to the Company, if at all; (iii) delay regulatory submissions and approvals; (iv) delay, limit or preclude the Company from securing manufacturing sites or partnerships; (v) delay, limit or preclude the Company from achieving technology or product development goals, milestones, or objectives; and (vi) preclude or delay entry into joint venture or partnership arrangements. The occurrence of any one or more of such events may affect the Company’s ability to execute on its business plan.
The Company’s priority and commitment is to the health and security of its team members, their families and its partners through this unprecedented event.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
On July 10, 2021, the Company and LionsGate Funding Management LLC entered into a Media and Marketing Services Agreement pursuant to which the Company agreed to issue 300,000 shares of restricted common stock. The shares were unissued as of September 30, 2021. During the three months ended September 30, 2021, the Company issued 750,000 shares in exchange for services valued at $354,750. All proceeds from sales of unregistered securities, if any, are used for general corporate purposes. Item 5. Other information On August 27, 2021, the Company entered into a Securities Purchase Agreement with Firstfire, for the sale of a secured, 12% senior secured convertible promissory note in the principle amount of $385,000 and 330,000 stock purchase warrants. The Company received $313,700 net of a $35,000 original issue discount and $36,300 of placement agent and legal fees, and issued a senior secured convertible promissory note in the amount of $385,000 due in twelve months with $46,200 of interest earned as of August 27, 2021. As additional consideration, the Company granted Firstfire a warrant to purchase 330,000 shares of our common stock at an exercise price of $0.50 for a period of three (3) years. For additional information, see “Note 6 – Convertible Promissory Notes” under Item 1 in this Quarterly Report on Form 10-Q.
Item 6. Exhibits
** Furnished herewith. XBRL (eXtensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
SIGNATURE
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.
Global WholeHealth Partners Corp.
By: /S/ Charles Strongo Charles Strongo Chief Executive Officer, Chief Financial Officer and Director
Date: November
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