UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended December 31, 2017

OR
June 30, 2021

OR

¨TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

☐ 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

333-191083

RASNA THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)

Nevada39-2080103
Nevada39-2080103

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification Number)

420 Lexington Ave, Suite 2525, New York, NY 10170

(Address of principal executive offices)   (Zip Code)

Telephone: (646) 396-4087

(Registrant’s telephone number)

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 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 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 x☒   No ¨☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definition of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  o
☐
Accelerated filer  x
☐
Non-accelerated filer o
☒
Smaller reporting company o
☒
(Do not check if a smaller reporting company)
Emerging growth company x
☒


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. x☒





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

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 68,908,003  shares of common stock were issued and outstanding as of February 7, 2018.August 11, 2021.




TABLE OF CONTENTS


 PAGE
PART I1FINANCIAL INFORMATION 
 
ITEM 1.
Financial statementsFINANCIAL STATEMENTS (Unaudited)
 1
Condensed Consolidated Balance Sheets - December 31, 2017 (Unaudited)June 30,2021 (unaudited) and September 30, 20172020
 
4
1
Unaudited Condensed Consolidated Statements of Operations for the Three and Nine Months Ended December 31, 2017June 30,2021 and 20162020
 
4
2
Unaudited Condensed Consolidated StatementStatements of Changes in Shareholders’ EquityEquity/(Deficit) for the Three and Nine Months Ended December 31, 2017June 30, 2021 and 2020
 
6
3
Unaudited Condensed Consolidated Statements of Cash Flows for the ThreeNine Months Ended December 31, 2017June 30, 2021 and 20162020
 
7
4
Notes to the unaudited Condensed Consolidated Interim Financial Statements
 
8
5
ITEM 2.
Management’s discussion and analysis of financial condition and results of operations
 
21
11
ITEM 3.
QuantitativeControls and qualitative disclosures about market riskProcedures
 
30
17
ITEM 4.
Controls and procedures
 
30
PART IIOTHER INFORMATION 
PART IIOTHER INFORMATION 
ITEM 1ARisk factors 18
ITEM 1A6.
Risk factorsExhibits
 
32
18
ITEM 6.
ExhibitsSIGNATURES
 
32
SIGNATURES
33
19


i



PART I – FINANCIAL INFORMATION


ITEM 1. FINANCIAL STATEMENTS


RASNA THERAPEUTICS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)


  June 30,  September 30, 
  2021  2020 
ASSETS      
Current assets:      
Cash $50,840  $14,241 
Prepaid expenses  43,816   17,641 
Related party receivable  —   748 
Total current assets  94,656   32,630 
         
Property and equipment, net  —   314 
Total non-current assets  —   314 
         
Total assets $94,656  $32,944 
         
LIABILITIES AND SHAREHOLDERS’ EQUITY        
         
Liabilities:        
Current liabilities:        
Accounts payable and accrued expenses $1,674,351  $1,635,788 
Related party payables  557,757   550,000 
Loan payable and accrued interest, related party  79,200   74,880 
Convertible notes payable, net - related party  216,140   90,262 
Convertible notes payable, net  488,896   356,702 
Total current liabilities  3,016,344   2,707,632 
         
Total liabilities  3,016,344   2,707,632 
         
Commitments and contingencies        
         
Shareholders’ equity        
Common stock, $0.001 par value; 200,000,000 shares authorized; 68,908,003 shares issued and outstanding  68,909   68,909 
Additional paid-in capital  20,229,696   19,914,884 
Accumulated deficit  (23,220,293)  (22,658,481)
Total shareholders’ deficit  (2,921,688)  (2,674,688)
Total liabilities and shareholders’ deficit $94,656  $32,944 
 December 31, 2017 (Unaudited) September 30, 2017
ASSETS 
  
Current assets: 
  
Cash and cash equivalents$1,286,048
 $2,537,611
Prepayments and other receivables164,476
 129,157
Related party receivable28,931
 28,931
Total current assets1,479,455
 2,695,699
    
Property and Equipment, net6,037
 7,047
Intellectual Property236,269
 236,269
In-process research and development613,100
 613,100
Indefinite lived intangible asset1,300,000
 1,300,000
Goodwill2,722,985
 2,722,985
Total non-current assets4,878,391
 4,879,401
    
Total assets$6,357,846
 $7,575,100
    
LIABILITIES AND SHAREHOLDERS' EQUITY 
  
    
Liabilities: 
  
Current liabilities: 
  
Accounts payable and accrued expenses$769,157
 $987,364
Related party payables550,000
 550,000
Total current liabilities1,319,157
 1,537,364
    
Total liabilities1,319,157
 1,537,364
    
Commitments and Contingencies (Note 9)

 

    
Shareholders' equity 
  
Common stock, $0.001 and $0.01 par value, respectively; 200,000,000 shares authorized, of which 68,908,003 are issued and outstanding.68,909
 68,909
Additional paid-in capital19,272,299
 18,267,895
Accumulated deficit(14,302,519) (12,299,068)
Total shareholders' equity5,038,689
 6,037,736
Total liabilities and shareholders' equity$6,357,846
 $7,575,100
`

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





RASNA THERAPEUTICS, INC.




CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

(UNAUDITED)

For the Three Months Ended December 31, For the 
Three Months Ended 
June 30,		  For the
Nine Months Ended 
June 30,		 
2017 2016 2021  2020  2021  2020 
Revenue$—
 $—
 $—  $—  $—  $— 
Cost of revenue—
 —
  —   —   —   — 
Gross profit—
 —
  —   —   —   — 
                   
Operating expenses: 
  
                
General and administrative *873,801
 571,215
General and administrative  64,573   81,178   268,397   356,686 
Research and development176,932
 366,046
  -   11,386   44,739   66,739 
Consultancy fees third parties and related parties **772,395
 130,180
Legal and professional fees176,647
 310,104
Total operating expenses1,999,775
 1,377,545
  64,573   92,564   313,136   423,425 
                   
Loss from operations(1,999,775) (1,377,545)  (64,573)  (92,564)  (313,136)  (423,425)
                   
Other income/(expense): 
  
                
Accretion of debt discount  (40,909)  —   (68,182)  — 
Beneficial conversion feature on convertible notes  —       (123,718)  — 
Interest expense  (18,108)  (11,631)  (56,824)  (29,785)
Gain on sale of asset  —   120,000   —   120,000 
Impairment of goodwill  —   (2,722,985)  —   (2,722,985)
Foreign currency transaction gain(3,676) 21,461
  —   —   48   — 
Other income(3,676) 21,461
Total other income expense  (59,017)  (2,614,616)  (248,676)  (2,632,770)
                   
Loss from operations before income taxes(2,003,451) (1,356,084)  (123,590)  (2,707,180)  (561,812)  (3,056,195)
                   
Income tax provision—
 —
  —   —   —   — 
                   
Net loss$(2,003,451) $(1,356,084) $(123,590)  (2,707,180)  (561,812)  (3,056,195)
                   
Basic and diluted loss per share attributable to common shareholders$(0.03) $(0.02)
Basic and diluted net loss per share attributable to common shareholders $(0.00) $(0.04) $(0.01) $(0.04)
                   
Basic and diluted weighted average common shares outstanding68,908,003
 65,082,334
  68,908,003   68,908,003   68,908,003   68,908,003 

* Share based payments to employees have been reclassified from consultancy fees third parties to general and administrative expenses for the three months ended December 31, 2016 to conform to current year presentation.

** Consultancy fees to related parties for the three months ended December 31, 2016 have been combined and included with consultancy fees third parties in both periods presented.

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



RASNA THERAPEUTICS, INC.


CONDENSED CONSOLIDATED STATEMENTSTATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(UNAUDITED)
EQUITY/DEFICIT

(UNAUDITED)

 Common Stock Additional Paid-In Accumulated Total Shareholders’
 Shares Amount Capital Deficit Equity
Balance at September 30, 201768,908,003
 $68,909
 $18,267,895
 $(12,299,068) $6,037,736
          
Share based compensation—
 —
 224,982
 —
 224,982
 Warrants issued for consulting services—
 —
—
779,422
—
—
 779,422
Net loss—
 —
 —
 (2,003,451) (2,003,451)
          
Balance at December 31, 201768,908,003
 $68,909
 $19,272,299
 $(14,302,519) $5,038,689
  Nine Months Ended June 30, 2021 
  Common Stock  Additional
Paid-In		  Accumulated  Total
Shareholders’		 
  Shares  Amount  Capital  Deficit  Deficit 
Balance at October 1, 2020  68,908,003  $68,909  $19,914,884  $(22,658,481) $(2,674,688)
                     
Share based compensation  —   —   41,094   —   41,094 
Beneficial conversion feature related to convertible notes          273,718       273,718 
Net loss  —   —   —   (561,812)  (561,812)
                     
Balance at June 30, 2021  68,908,003  $68,909  $20,229,696  $(23,220,294) $(2,921,688)

  Nine Months Ended June 30, 2020 
  Common Stock  Additional
Paid-In		  Accumulated  Total
Shareholders’		 
  Shares  Amount  Capital  Deficit  Deficit 
Balance at October 1, 2019  68,908,003  $68,909  $19,780,252  $(17,311,809) $2,537,352 
                     
Share based compensation  —   —   114,375   —   114,375 
Net loss  —   —   —   (3,056,195)  (3,056,195)
Balance at June 30, 2020  68,908,003  $68,909  $19,894,627  $(20,368,004) $(404,468)

  Three Months Ended June 30, 2021 
  Common Stock  Additional
Paid-In		  Accumulated  Total
Shareholders’		 
  Shares  Amount  Capital  Deficit  Deficit 
Balance at March 31, 2021  68,908,003  $68,909  $20,224,591  $(23,096,703) $(2,803,204)
                     
Share based compensation  —   —   5,107   —   5,107 
Net loss  —   —   —   (123,591)  (123,591)
                     
Balance at June 30, 2021  68,908,003  $68,909  $20,229,696  $(23,220,294) $(2,921,688)

  Three Months Ended June 30, 2020 
  Common Stock  Additional
Paid-In		  Accumulated  Total
Shareholders’		 
  Shares  Amount  Capital  Deficit  Equity 
Balance at March 31, 2020  68,908,003  $68,909  $19,869,933  $(17,660,824) $2,278,018 
                     
Share based compensation  —   —   24,694   —   24,694 
Net loss  —   —   —   (2,707,180)  (2,707,180)
Balance at June 30, 2020  68,908,003  $68,909  $19,894,627  $(20,368,004) $(404,468)

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



RASNA THERAPEUTICS, INC.


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(UNAUDITED)

For the Three Months Ended December 31, 2017 For the
Nine Months Ended 
June 30,		 
2017 2016 2021  2020 
CASH FLOWS FROM OPERATING ACTIVITIES: 
  
     
Net loss$(2,003,451) $(1,356,084) $(561,812) $(3,056,195)
Adjustments to reconcile net loss to net cash used in operating activities: 
  
        
Share based compensation224,982
 250,540
  41,094   114,375 
Warrants issued for consultancy services779,422
 —
Depreciation1,010
 —
  314   1,226 
Beneficial conversion feature related to convertible notes  123,718   — 
Impairment of goodwill  —   2,722,985 
Accretion of debt discount  68,182   — 
Changes in operating assets and liabilities:           
Other receivables(35,319) 72,520
Accounts payable and accrued expenses  70,263   33,944 
Related party payable  30,267   4,265 
Prepayments and other receivables  (26,175)  (28,106)
Related party receivable—
 —
  748   13,587 
Accounts payable and accrued expenses(221,883) 283,891
Related party payables—
 (12,500)
Net cash used in operating activities(1,255,239) (761,633)  (253,401)  (193,919)
           
CASH FLOWS FROM FINANCING ACTIVITIES: 
  
        
Net proceeds from issuance of shares of common stock—
 2,007,500
Proceeds from issuance of loan payable - related party  —   72,000 
Proceeds from issuance of convertible note payable  290,000   108,500 
Net cash provided by financing activities—
 2,007,500
  290,000   180,500 
           
Effect of foreign exchange rate3,676
 —
  —   — 
           
Net (decrease)/ Increase in cash and cash equivalents(1,251,563) 1,245,867
Net change in cash  36,599   (13,419)
           
Cash and cash equivalent, beginning of period2,537,611
 —
Cash, beginning of period  14,241   50,068 
           
Cash and cash equivalent, end of period$1,286,048
 $1,245,867
   
Non-cash transactions: 
  
Warrants earned, pending issue$—
 $484,009
Common stock issued for acquisition$—
 $7,675,000
Cash, end of period $50,840  $36,649 

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


RASNA THERAPEUTICS, INC.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

(UNAUDITED)

1.  GENERAL INFORMATION


Rasna Therapeutics, Inc. (“Rasna DE"DE”, “Rasna Inc.” or "Rasna Inc.”the “Company”), is a biotechnology company incorporated in the State of Delaware on March 28, 2016.


On October 11, 2017, we changed our fiscal year end from March 31 to September 30 and we filed a Form 10-KT on November 30, 2017.

On April 27, 2016, Rasna Therapeutics Limited, a private limited company incorporated in England and Wales under the U.K. Companies Act (“Rasna UK”) sold its stake in Falconridge Holdings Limited, or Falconridge, to Rasna DE for $1. This entity had no operations, no assets or liabilities as of this date.
On May 17, 2016, Rasna DE and its subsidiary Falconridge entered into an Agreement of Merger and Plan of Reorganization (“Merger Agreement”) with Arna Therapeutics Limited, a British Virgin Islands company, or Arna, which was a clinical stage biotechnology company focused on drugs to treat diseases in oncology and immunology, mainly focusing on the treatment of leukemia. Pursuant to the agreement, Arna was merged into Falconridge and the shareholders of Arna were issued shares of Rasna DE in exchange for shares of Arna.

On August 15, 2016, Active With Me, Inc., or AWM, entered into an Agreement of Merger and Plan of Reorganization (the “Merger Agreement”) with Rasna DE, and Rasna Acquisition, providing for the merger of Rasna Acquisition with and into Rasna DE, (the “Merger”), with Rasna DE, surviving the Merger as a wholly-owned subsidiary of AWM. As a result of the Merger, the resulting company, Rasna Therapeutics, Inc., is a biotechnology company that The Company is engaged in modulating the molecular targets NPM1 and LSD1, which are implicated in the disease progression of leukemia and lymphoma.

The Merger has been treated as a reverse recapitalization effected by a share exchange for financial accounting and reporting purposes since substantially all of AWM’s operations were disposed of prior to the consummation of the transaction.  Rasna DE is treated as the accounting acquirer as its stockholders control us after the Merger Agreement, even though AWM was the legal acquirer.  As a result, the assets and liabilities and the historical operations that are reflected in our financial statements are those of Rasna DE as if Rasna DE had always been the reporting company.  Since AWM had no operations upon the Merger Agreement taking place, the transaction was treated as a reverse recapitalization for accounting purposes and no goodwill or other intangible assets were recorded by us as a result of the Merger Agreement.

These unaudited condensed consolidated financial statements are presented in United States dollars (“USD”) which is also the functional currency of the primary economic environment in which the Company operates. See Note 2, Foreign currency policy. 


Risks and Uncertainties

Management continues to evaluate the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations and/or ability to secure additional cash resources, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

2.  ACCOUNTING POLICIES


The principal accounting policies applied in the preparation of these unaudited condensed consolidated financial statements are set out below. These policies have been applied consistently to all the periods presented unless otherwise stated.

Basis of preparation

These unaudited condensed consolidated financial statements have been prepared following the requirements of the Securities and Exchange Commission (“SEC”(the “SEC”) and United States generally accepted accounting principles (“US GAAP”) for interim reporting. InThe principles for condensed interim financial information do not require the inclusion of all the information and footnotes required by generally accepted accounting principles for complete financial statements. Therefore, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements as of and for the year ended September 30, 2020 and notes thereto included in the Company’s Annual Report on Form 10-K filed with the SEC on January 15, 2021. The accompanying unaudited condensed consolidated financial statements have not been audited by an independent registered public accounting firm in accordance with the standards of the Public Company Accounting Oversight Board (United States), but in the opinion of management, the accompanying consolidatedsuch financial statements include all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s interim financial information.


The accompanying unaudited condensed consolidated financial statements should be read in conjunction withresults of the audited financial statements as of andoperations for the sixNine months ended June 30, 2021 may not be indicative of the results that may be expected for the year ending September 30, 2017, contained in the Company's annual report on Form 10-KT filed with the SEC on November 30, 2017.2021. 


Principles of Consolidation

In accordance with ASC 810, Consolidation, the Company consolidates any entity in which it has a controlling financial interest. Further, the Company consolidates any variable interest entity that it is deemed to be the primary beneficiary of, and have the power to direct its significant activities. Upon review of the relationship between Rasna Therapeutics Limited (“Rasna UK”) and


Rasna Inc., Management noted that equity investment in Rasna UK is not sufficient to fund its operations. Accordingly, Rasna Inc. is considered to be the primary beneficiary of the assets held within Rasna UK, which primarily consist of cash received from Rasna Inc. to fund its operations, and has power to direct its significant activities. As a result, Rasna Inc. consolidates this variable interest entity.  

The consolidated financial statements include the financial statements of the Company and its wholly owned subsidiary, Rasna DE, and Rasna DE’s subsidiary, Arna Therapeutics Limited as well as the operations of Rasna Inc. for the period from May 17, 2016 through December 31, 2017.Limited. All significant intercompany accounts and transactions have been eliminatedeliminates in the preparation of the accompanying consolidated financial statements.


Business Combinations 

Management accounts for business combinations under the provisions of Accounting Standards Codification ("ASC") Topic 805-10, Business Combinations ("ASC 805-10"), which requires that the acquisition method of accounting be used for all business combinations. Assets acquired and liabilities assumed, including non-controlling interests, are recorded at the date of acquisition at their respective fair values. ASC 805-10 also specifies criteria that intangible assets acquired in a business combination must meet to be recognized and reported apart from goodwill. Goodwill represents the excess purchase price over the fair value of the tangible net assets and intangible assets acquired in a business combination. Acquisition-related expenses are recognized separately from the business combinations and are expensed as incurred.
The amounts reflected within the Note 3 - Acquisitions are the results of the final valuation report of the purchase price allocation.
Going Concern
The Company is subject to a number of risks similar to those of other pre-commercial stage companies, including its dependence on key individuals, uncertainty of product development and generation of revenues, dependence on outside sources of capital, risks associated with research, development, testing, and obtaining related regulatory approvals of its pipeline products, suppliers and collaborators, successful protection of intellectual property, competition with larger, better-capitalized companies, successful completion of the Company's development programs and, ultimately, the attainment of profitable operations are dependent on future events, including obtaining adequate financing to fulfill its development activities and generating a level of revenues adequate to support the Company's cost structure.
The Company has experienced net losses and significant cash outflows from cash used in operating activities over the past years, and at December 31, 2017, had an accumulated deficit of $14,302,519, a net loss for the for the three months ended December 31, 2017 of $2,003,451 and net cash used in operating activities of $1,255,239.  
We expect to continue to incur net losses and have significant cash outflows for at least the next twelve months. The Company has sufficient funds to continue operating until the end of November 2018, but will require significant additional cash resources to launch new development phases of existing products in its pipeline. In the event that the Company is unable to secure the necessary additional cash resources needed, the Company may slow current development phases or halt new development phases in order to mitigate the effects of the costs of development. These conditions, among others, raise substantial doubt about the Company's ability to continue as a going concern. The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. This basis of accounting contemplates the recovery of the Company's assets and the satisfaction of liabilities in the normal course of business. A successful transition to attaining profitable operations is dependent upon achieving a level of positive cash flows adequate to support the Company's cost structure.


Use of Estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. The Company evaluates its estimates on an ongoing basis, including those related to the fair values of stockshare based awards, income taxes and contingent liabilities, among others. The Company bases its estimates on historical experience and on various other assumptions that the Company believes to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from those estimates and such differences could be material to the Company’s consolidated financial position and results of operations.


Fair Value


Reclassifications


The carrying value of the Company’s financial instruments, including cash and cash equivalents, accounts payable and accrued liabilities, approximate fair value because of the short-term nature of such financial instruments. Management measures certain other assets   at fair value on a nonrecurring basis when they are deemed to be other-than-temporarily impaired.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of related party receivables.
Deposits held with banks, including those held

Certain amounts in foreign branches of global banks, may exceed the amount of insurance provided on such deposits. These deposits may be redeemed upon demand and bear minimal risk. Management believes that the institutions that hold our instruments are financially sound and are subject to minimal credit risk.

Cash and cash equivalents
Cash and cash equivalents consists of cash on deposit with banks with an original maturity of three months or less.

From time to time, the Company’s balances in its bank accounts exceed Federal Deposit Insurance Corporation limits. The Company will periodically evaluate the risk of exceeding insured levels and might transfer funds if it deems appropriate. The Company has not experienced any losses with regards to balances in excess of insured limits or as a result of other concentrations of credit risk.

Prepayments and other receivables

Prepayments consists of prepaid Directors and Officers liability insurance.

Property and Equipment

Expenditures for additions, renewals and improvements are capitalized at cost. Depreciation is computed in a straight line method based on the estimated useful lives of the related assets. The estimated useful lives of the major classes of depreciable assets are 2 to 5 years for equipment and furniture and fixtures. Expenditures for repairs and maintenance are charged to operations as incurred. The Company periodically evaluates whether current events or circumstances indicate that the carrying life of the depreciable assets may not be recoverable.
Goodwill and Intangible assets
Intangible assets are made up of indefinite lived intangible assets, in-process research and development, (“IPR&D”) and certain intellectual property (“IP”). The balance of the indefinite lived intangible assets represents the platform technology that was acquired in 2013, which, at the time, was determined to have alternative future uses. IPR&D assets represent the fair value assigned to acquired technologies in a business combination, which at the time of the business combination have not reached technological feasibility and have no alternative future use. IP assets represent the fair value assigned to technologies, which at the time of acquisition have reached technological feasibility, however, have not yet been put into service. Intangible assets are considered to have an indefinite useful life until the completion or abandonment of the associated research and development projects.
Goodwill represents the premium paid over the fair value of the net tangible and intangible assets acquired in business combinations. Goodwill is not amortized; rather, it is subject to a periodic assessment for impairment by applying a fair value based test. Goodwill is assessed for impairment on an annual basis or more frequently if events or changes in circumstances indicate that the asset might be impaired. An impairment charge is recognized only when the implied fair value of the Company’s reporting unit’s goodwill is less than its carrying amount.

 Management evaluates indefinite life intangible assets for impairment on an annual basis and on an interim basis if events or changes in circumstances between annual impairment tests indicate that the asset might be impaired. The ongoing evaluation for impairment of its indefinite life intangible assets requires significant management estimates and judgment. Management reviews indefinite life intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. There were no impairment charges during the three months ended December 31, 2017 and 2016.


Risks and Uncertainties
The Company intends to operate in an industry that is subject to rapid change. The Company’s operations will be subject to significant risk and uncertainties including financial, operational, technological, regulatory, and other risks associated with an early stage company, including the potential risk of business failure.

Reclassifications
Certain prior period amountsfinancial statements have been reclassified for comparative purposes to conform to the fiscal 2018current period presentation. These reclassifications havehad no impacteffect on the previously reported net loss.

Research and development
Expenditure on research and development is charged to the statements of operations in the year in which it is incurred with the exception of expenditures incurred in respect of the development of major new products where the outcome of those projects is assessed as being reasonably certain in regards to viability and technical feasibility. Such expenditure is capitalized and amortized straight line over the estimated period of sale for each product, commencing in the year that sales of the product are first made. To date, the Company has not capitalized any such expenditures other than certain IPR&D & IP recorded in connection with certain acquisition or equity transactions.

Foreign Currency
Items included in the financial statements are measured using their functional currency, being the currency of the primary economic environment in which the company operates. The financial statements are presented in United States Dollar (“USD”), which is the company’s functional and presentational currency.
Foreign currency transactions are translated using the rate of exchange applicable at the date of the transaction. Foreign exchange gains and losses resulting from the settlement of such transactions and from the re-translation at the year-end of monetary assets and liabilities denominated in foreign currencies are recognized in the statementsresults of operations.


Net Loss per Share

Basic net loss per share is computed by dividing net loss available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted loss per share includes potentially dilutive securities such as outstanding options, warrants and warrants,convertible loan notes, using various methods such as the treasury stock, or modified treasury stock, methodand if converted methods in the determination of dilutive shares outstanding during each reporting period.

The following table sets forth potential common shares issuable upon the exercise of outstanding options and the exercise of warrants and convertible loan notes, all of which have been excluded from the computation of diluted weighted average shares outstanding as they would be anti-dilutive:

  June 30,
2021		  June 30,
2020		 
Stock options  3,648,675   3,948,675 
Warrants  1,926,501   1,926,501 
Convertible notes & associated fees  81,877,887   12,233,333 
Total shares issuable upon exercise or conversion  87,453,063   18,108,509 

 December 31, 2017 December 31, 2016
Stock options4,829,875
 1,662,375
Warrants1,926,501
 —
Total shares issuable upon exercise or conversion6,756,376
 1,662,375

The following is the computation of net loss per share for the following periods:

  For the
Three Months Ended 
June 30,		 
  2021  2020 
  (Unaudited)  (Unaudited) 
Net loss for the period $(123,590) $(2,707,180)
Weighted average number of shares  68,908,003   68,908,003 
Net loss per share (basic and diluted) $(0.00) $(0.04)

  For the
Nine Months Ended 
June 30,		 
  2021  2020 
  (Unaudited)  (Unaudited) 
Net loss for the period $(561,812) $(3,0056,195)
Weighted average number of shares  68,908,003   68,908,003 
Net loss per share (basic and diluted) $(0.01) $(0.04)

Recent Accounting Pronouncements

 For the Three Months Ended December 31,
 2017 (Unaudited) 2016 (Unaudited)
Net loss for the period$(2,003,451) $(1,356,084)
Weighted average number of shares68,908,003
 65,082,334
Net loss per share (basic and diluted)$(0.03) $(0.02)



Warrants

In April 2016,December 2019, the Company committed to issue warrants as compensation toFASB issued ASU 2019-12, Income Taxes - Simplifying the placement agents relating to fundraising. On February 28, 2017,Accounting for Income Taxes (“ASU 2019-12”). Among other items, the Company issuedamendments in ASU 2019-12 simplify the accounting treatment of tax law changes and year-to-date losses in interim periods. An entity generally recognizes the effects of a ten year warrant to purchase 1,440,501 shares of common stock at an exercise price of $0.37 per share.


The Company had determined that the service inception date preceded the grant date, and accordingly, recorded a liability to issue warrants in the Company as of the date that the equity was issued, with an offset charge to additional paid-in capital as these are offering costs. The liability to issue warrants was marked to market each period until the grant date, at which point the Company determined that in accordance with ASC 815-40-25-7, the warrants should be classified in stockholder’s equity. See Note 7 for additional information.

In July 2017, the Company committed to issue warrants as compensation to the placement agents relating to fundraising. On August 31, 2017, the Company issued a ten year warrant to purchase 112,000 shares of common stock at an exercise price of $0.65 per share.

On August 31, 2017, the Company entered into consulting agreements with placement agents who were providing consulting services in the areas of capital market advisory and investor relations. In lieu of fees for these consulting services, on September 1, 2017, the Company issued ten year warrants to purchase 347,000 shares of common stock at an exercise price of $0.60 per share. The Company determined that the service inception date did not preceed the grant date, and accordingly classifies the warrants in stockholder's equity, in accordance with ASC 815-40-25-7. See Note 7 for additional information.


Equity-Based Payments
ASC Topic 718 “Compensation—Stock Compensation” requires companies to measure the cost of employee services received in exchange for the award of equity instruments based on the estimated fair value of the award at the date of grant. The expense is to be recognized over the period during which an employee is required to provide services in exchange for the award. The Company accounts for shares of common stock, stock options and warrants issued to employees based on the fair value of the stock, stock option or warrant, if that value is more reliably measurable than the fair value of the consideration or services received.

The Company accounts for stock options issued and vesting to non-employees in accordance with ASC Topic 505-50 “Equity -Based Payment to Non-Employees” and accordingly the value of the stock compensation to non-employees is based upon the measurement date as determined at either a) the date at which a performance commitment is reached, or b) at the date at which the necessary performance to earn the equity instruments is complete. Accordingly the fair value of these options is being “marked to market” quarterly until the measurement date is determined.

Income taxes

On December 22, 2017, The Tax Cuts and Jobs Act was signed into law and has resulted in significant change to the U.S corporate income tax system.  These changes include a federal statutory rate reduction from 35% to 21%, a transition tax which applies to the repatriate of foreign earnings and profits, the elimination or reduction of certain domestic deductions and credits and limitations on the deductibility of interest expense and executive compensation. 

Changes in tax rates and tax laws are accounted forlaw in the period of enactment.  Therefore, duringenactment; however, there is an exception for tax laws with delayed effective dates. Under current guidance, an entity may not adjust its annual effective tax rate for a tax law change until the three month period ended December 31, 2017, we recorded an incomein which the law is effective. This exception was removed under ASU 2019-12, thereby providing that all effects of a tax benefit totaling $4,301 related to our current estimatelaw change are recognized in the period of enactment, including adjustment of the impact of the 2017 Tax Cuts and Jobs Act.


Recent Accounting Pronouncements Not Yet Adopted

On August 26, 2016, the FASB issued Accounting Standards Update (ASU) 2016-15, Classification of Certain Cash Receipts and Cash Payments, seeking to eliminate diversityestimated annual effective tax rate. Regarding year-to-date losses in practice related to how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments in ASU 2016-15 address eight specific cash flow issues and apply to all entities, including both business entities and not-for-profit entities that areinterim periods, an entity is required to presentestimate its annual effective tax rate for the full fiscal year at the end of each interim period and use that rate to calculate its income taxes on a statement of cash flows under FASB Accounting Standards Codification (FASB ASC) 230, Statement of Cash Flows.
The amendments in ASU 2016-15 are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption inyear-to-date basis. However, current guidance provides an interim period. If an entity


early adopts the amendmentsexception that when a loss in an interim period any adjustments should be reflected as ofexceeds the beginning ofanticipated loss for the fiscal year, that includes that interim period. An entity that elects early adoption must adopt all of the amendments inincome tax benefit is limited to the same period. The amendments in ASU 2016-15 should be applied using a retrospective transition method to each period presented. If it is impracticable to apply the amendments retrospectively for some of the issues, the amendments for those issuesamount that would be applied prospectively as ofrecognized if the earliest date practicable. The Company expects to adoptyear-to-date loss were the anticipated loss for the full year. ASU 2019-12 removes this ASU described aboveexception and provides that, in this situation, an entity would compute its Consolidated Financial Statements beginning in October 1, 2018. Management has evaluated and concluded that there will be no material impactincome tax benefit at each interim period based on its consolidated financial statements.
In November 2016, the FASB issuedestimated annual effective tax rate. ASU No. 2016-18, Statement of Cash Flows (Topic 230) Restricted Cash a consensus of the FASB Emerging Issues Task Force (“ASU 2016-18”). ASU 2016-18 requires restricted cash and cash equivalents to be included with cash and cash equivalents on the statement cash flows. The new standard2019-12 is expected to be effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, with early adoption permitted. Management has evaluated the effects of ASU 2016-18 and concluded that there will be no material impact on its consolidated financial statements.
In January 2017, the FASB issued ASU 2017-1, Business Combinations (Topic 805): Clarifying the Definition of a Business, which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The guidance is effective for annual financial reporting periods beginning after December 15, 2017. The Company expects to adopt this ASU described above in its Consolidated Financial Statements beginning in October 1, 2018. Management has evaluated and concluded that there will be no material impact on its consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04, Intangibles -Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, which addresses the concerns over the cost and complexity of the two-step impairment test, and removes the second step of the test. An entity will apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The guidance is effective for annual and interim goodwill impairment tests performed for periods beginning after December 15, 2019 with early adoption permitted in January 2017. Management has evaluated and concluded that there will be no material impact on its consolidated financial statements.

In July 2017, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral. The ASU applies to issuers of financial instruments with down-round features. It amends (1) the classification of such instruments as liabilities or equity by revising the guidance in ASC 815 on the evaluation of whether instruments or embedded features with down-round provisions must be accounted for as derivative instruments and (2) the guidance on recognition and measurement of the value transferred upon the trigger of a down-round feature for equity-classified instruments by revising ASC 260. The ASU is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For all other companies, the amendments are effective for fiscal years beginning after December 15, 2019, and2020, including interim periods within fiscal years beginning after December 15, 2020.those annual periods. Early adoption is permitted. ManagementThe Company has not yet evaluated the effect that this update will have on its financial statements and concludedrelated disclosures.

The Company has determined that thereall other recently issued accounting pronouncements will be nonot have a material impact on its consolidated financial statements.position, results of operations and cash flows, or do not apply to its operations.


3.  ACQUISITIONSLIQUIDITY AND GOING CONCERN

The Company has no present revenue and has experienced net losses and significant cash outflows from cash used in operating activities since inception. 

The following transactions were accountedCompany expects to continue to incur net losses and have significant cash outflows for usingat least the acquisition accounting method which requires, among other things,next 12 months and will require significant additional cash resources to launch new development phases of existing products in its pipeline. 

In the event that the assets acquired and liabilities assumed are recognized at their acquisition date fair value.

On May 5, 2016, Rasna UK sold its intellectual propertyCompany is unable to Falconridge,secure the additional cash resources needed, the Company may slow current development phases or halt new development phases in order to mitigate the effects of the costs of development. These conditions, among others, raise substantial doubt about the Company’s ability to continue as a subsidiary of Rasna,going concern for a note payable in the amountperiod of $236,269. Rasna UK is considered a VIE and consolidated in these financial statements, however, is not an entity under common control as Rasna controlled both Falconridge and Rasna UK at the time of the transaction, this transaction eliminates on consolidation.
On May 17, 2016, Rasna and its subsidiary Falconridge entered into an Agreement of Merger and Plan of Reorganization with Arna. Pursuant to the agreement, Arna was merged into Falconridge and the shareholders of Arna were issued shares of Rasna in exchange for shares of Arna. Arna was deemed to be the accounting acquirer because Rasna and Falconridge Holdings Limited were non-trading holding companies and Arna’s operations will comprise the ongoing operations of the combined entity and its senior management will serve as the senior management of the combined entity. Further, 65% of the voting interest in Rasna was


acquired by Arna shareholders in connection with the transaction. Therefore, the assets and liabilities of the acquired entity, Rasna, were written to fair value in accordance with the Acquisition Method prescribed in ASC 805, Business Combinations.
The consideration transferred was measured based upon the share price recently received during a non-public equity raise in Rasna, during which non-related investors paid $0.40 per share of common stock. During the acquisition transaction, 19,187,500 of 54,837,790 shares were issued to legacy Rasna shareholders, which results in consideration transferred to the acquiree’s shareholders of $7,675,000.
In addition, $607,159 of a related party receivable due to Arnaone year from Rasna Uk, was forgiven as part of the consideration transferred.
The purchase price allocation as of the date of acquisition is set forth inthis filing. The accompanying condensed consolidated financial statements have been prepared assuming that the table below. As per the purchase accounting method, the tangible and identifiable intangible assets acquired and liabilities assumed were recorded at fair valueCompany will continue as ofa going concern one year from the date of acquisition, withthis filing. This basis of accounting contemplates the remaining purchase price recorded as goodwill.

The Company’s allocation of the purchase price in connection with the acquisition was calculated as follows:
 Balance as of
 May 17, 2016
Share consideration transferred$7,675,000
Forgiveness of receivable607,159
Consideration transferred$8,282,159
  
Less: Fair value of assets acquired 
Cash and cash equivalents(5,116,609)
Other receivables(14,187)
Prepayment(66,856)
Related party receivables(20,412)
Intellectual property(236,269)
In-Process research and development(613,100)
  
Plus: Liabilities assumed 
Accounts payable and accrued expenses492,603
Related party payables15,656
  
Goodwill$2,722,985
Of the above assets acquired and liabilities assumed, the intellectual property acquired was owned by Falconridge  and the residual assets acquired and liabilities assumed comprised the VIE that was controlled by Rasna, Inc.

Acquired In-Process Research and Development

Acquired IPR&D is the fair value of the LSD-1 asset at the acquisition date. The Company determined that the fair value of LSD-1 was $613,100 as of the acquisition date using the cost approach. This was based on the fact that LSD-1 was not yet technologically feasible or in use as of the valuation date. Also as no prospective revenue stream could be determined, the cost approach was deemed to be the most appropriate.

The Company retained a Clinical Research Organisation ("CRO") to perform all related research and development associated with LSD-1. As all research and development associated with LSD‐1 was performed by the CRO and no other contributions to LSD‐1 IPR&D were made beyond payments to the CRO, the Company considered the payments made to estimate the fair value of LSD‐1.


Active With Me, Inc.
On August 15, 2016, Active With Me, Inc., entered into an Agreement of Merger and Plan of Reorganization (the “Merger Agreement”) with Rasna, Inc., and Rasna Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of Active With Me, Inc. (“Merger Sub”), providing for the merger of Merger Sub with and into Rasna, Inc. (the “Merger”), with Rasna, Inc.


surviving the Merger as a wholly-owned subsidiary of Active With Me, Inc. As a result of the Merger, the resulting company, Rasna Therapeutics, Inc., is a biotechnology company that is engaged in modulating the molecular targets NPM1 and LSD1, which are implicated in the disease progression of leukemia and lymphoma.
The Merger was treated as a reverse recapitalization effected by a share exchange for financial accounting and reporting purposes since substantially all of Active With Me’s operations were disposed of prior to the consummation of the transaction.  Rasna Successor is treated as the accounting acquirer as its stockholders control the Company after the Exchange Agreement, even though Active With Me, Inc. was the legal acquirer.  As a result, the assets and liabilities and the historical operations that are reflected in these financial statements are those of Rasna Successor as if Rasna Successor had always been the reporting company.  Since Active With Me, Inc. had no operations upon the Merger Agreement taking place, the transaction was treated as a reverse recapitalization for accounting purposes and no goodwill or other intangible assets were recorded by the Company as a result of the Merger Agreement.

Thereafter, pursuant to a Stock Purchase Agreement, the Company transferred all of the outstanding capital stock of Rasna Successor to a former officer and director of Active With Me, Inc. in exchange for cancellation of an aggregate of 1,500,000 shares of Rasna Successor’s common stock held by such person.

In connection with the share exchange, each share of Rasna, Inc was exchanged for the right to receive .33 shares in Active With Me, Inc. Once issued, the new shares were combined with the 3,305,000 common shares held by legacy Active With Me, Inc. shareholders. Immediately following the Merger, 1,500,000 shares were canceled, which related to one legacy Active With Me shareholder that effectively spun off the remaining assets of Active With Me in connection with the transaction. Finally, subsequent to the transaction, the legal acquirer executed a 3.25 for 1 stock split on its common shares. Following the closing of the Merger and Rasna Successor’s cancellation of 1,500,000 shares in the Split-Off, there were 19,901,471 shares of Rasna Successor issued and outstanding, which once effected for the 3.25 for 1 reverse stock split, resulted in 64,679,798 shares outstanding in the combined entity.

4.    GOODWILL AND INTANGIBLE ASSETS
As noted in Note 3 - Acquisitions, on May 17, 2016, there was a transaction where the Company acquired an entity and, at initial purchase price, it was determined that there was $236,269 of intellectual property, $613,100 of In-process research and development, and $2,722,985 of goodwill.
Goodwill
Goodwill represents the excess of the purchase price over the fair value of net assets acquired in business combinations accounted for under the purchase method of accounting. The following table summarizes the Company’s goodwill for the periods indicated resulting from the acquisitions by the Company:
 December 31, September 30,
 2017 2017
Goodwill$2,722,985
 $2,722,985
Acquisition of Rasna and its subsidiaries—
 —
Net Book Value$2,722,985
 $2,722,985
    

The Company  performed an impairment analysis and no impairment was determined. Therefore no impairment was recorded for the three months ended December 31, 2017 and the period ended September 30, 2017.

Intangible Assets
On December 17, 2013 the Company’s shareholder, Panetta Partners Limited, transferred 5,000,000 of its shares in Arna Therapeutics Limited to Eurema Consulting S.r.l. and 5,000,000 shares in Arna Therapeutics Limited to TES Pharma S.r.l. In exchange for the shares, Panetta Partners Limited obtained intellectual property ("Platform Technology") from TES Pharma S.r.l and Eurema Consulting S.r.l. Panetta Partners Limited then assigned the Platform Technology to Arna Therapeutics Limited, which was accounted for as a capital contribution. The fair value of the shares exchanged for the IPR&D was $0.13 per share; in addition


the issue price for shares in October 2013 was $0.13 per share (shares issued post acquisition of the IPR&D were issued at $0.28) and accordingly the Company valued the Platform Technology at $1.3 million.

IPR&D relating to LSD-1, was acquired in the reverse acquisition of Rasna UK by Arna as of May 17, 2016. The Company retained a Clinical Research Organisation ("CRO") to perform all related research and development associated with LSD‐1. Based on review of the license agreement dated January 1, 2015, between the CRO and Rasna, the Company agreed to pay 100,002 Euros for costs incurred to date and to perform research and development on a going forward basis. Additionally, the Company entered into an amended license agreement whereby Rasna agreed to pay TTFactor an additional 435,000 Euros as of May 17, 2016, regarding services rendered between September 9, 2014 to May 17, 2016. Based on the cost approach, the IPR&D was valued at $613,100.

At the time of the acquisition, the Company had reasonably expected to use the Platform Technology, in the asset’s then current state, in two independent research projects that had not commenced as of the date of the acquisition. The Company’s research projects applied the conclusions reached in the Platform Technology to develop treatments for AML through reformulation of certain available pharmaceuticals and independent development of a new pharmaceutical treatment. Both research projects were initiated shortly after the Platform Technology was acquired and continue through the date of the financial statements.

At the time of acquisition, and at present, no legal, regulatory, contractual, competitive, economic, or other factors were present that would constrain the useful life of the asset to the Company. The agreement to purchase the asset has no provisions that would limit the timeframe of use, legally, contractually or economically, and the asset remains a competitive platform for results in the treatment of Acute Myeloid Leukemia and lymphoma. Specifically, the agreement irrevocably assigns all rights and title to the Asset, without limitation or contingencies. No limitations or alternative technology has emerged that would suggest obsolescence or a change in the competitive landscape for the Platform Technology as of the most recent reporting period. In addition, the Company has concluded that the useful life of the Platform Technology at the time of acquisition was beyond a foreseeable horizon, and therefore the asset is classified as an indefinite lived intangible asset.

The IPR&D and intellectual property are considered to have an indefinite life and there were no impairment charges recognized during the three months ended December 31, 2017 and the period ended September 30, 2017.
The following table summarizes the Company’s intangible assets as of the following periods: 

 December 31, September 30,   
 2017 2017 Estimated Useful Life 
In-process research and development$613,100
 $613,100
 Indefinite 
Intellectual Property236,269 236,269 Indefinite 
Indefinite lived intangible asset1,300,000 1,300,000 Indefinite 
 $2,149,369
 $2,149,369
   


5.    ACCOUNTS PAYABLE AND ACCRUED EXPENSES
The following table summarizes the Company’s accounts payable and accrued expenses as of the following periods:
  December 31, 2017 (Unaudited) September 30, 2017
Accounts payable $353,877
 $658,921
Accrued expenses 415,280
 328,443
  $769,157
 $987,364

Accounts payable is predominantly made up of unpaid invoices relating to research and development, accounting and professional fees. Included within the accrued expenses balance of $415,280 at December 31, 2017 is approximately $100,000 relating to vendors for research and development expenses, $75,000 relating to an accrual for directors fees, approximately $67,000 relating payroll accruals, and approximately $70,000 of accrued legal, patent and other costs.



Included within the accrued expenses balance of $328,443 at September 30, 2017 is $128,000 of accrued legal, accounting and professional fees, $60,000 for payroll related expenses and $50,000 for Directors fees.

6.    STOCK-BASED COMPENSATION

2016 EQUITY INCENTIVE PLAN

On July 19, 2016, the Company adopted its 2016 Equity Incentive Plan (the "Equity Incentive Plan"). The plan was established to attract, motivate, retain and reward selected employees and other eligible persons. For the Equity Incentive Plan, employees, officers, directors and consultants who provide services to the Company or onerecovery of the Company’s subsidiaries may be selectedassets and the satisfaction of liabilities in the normal course of business. A successful transition to receive awards. A totalattaining profitable operations is dependent upon achieving a level of 9,750,000 shares ofpositive cash flows adequate to support the Company’s common stock was authorized for issuance with respect to awards granted under the Equity Incentive Plan.cost structure.

4.  SHARE-BASED COMPENSATION

The fair values of stock option grants during

For the three and Nine months ended December 31, 2017 were calculated onJune 30, 2021 $5,106 and $41,094 respectively, related to share based compensation to directors and employees respectively, has been included within the date ofgeneral and administrative expense category in the grant using the Black-Scholes option pricing model. Compensation expense is recognized over the period of service, generally the vesting period. Duringaccompanying unaudited condensed consolidated interim financial statements. 

For the three and Nine months ended December 31, 2017, no options were granted byJune 30, 2020 $24,694 and $114,375 respectively, related to share based compensation to directors and employees respectively, has been included within the Company. The following assumptions were usedgeneral and administrative expense category in the Black-Scholes options pricing model to estimate the fair value of stock options for the three months ended December 31, 2017:accompanying unaudited condensed consolidated interim financial statements. 


 Employee – Vesting Period Non- Employee – Vesting Period
 1 Year 2 Years 3 Years 4Years 1 Year 2 Years 3 Years
Stock Price$0.85 $0.85 $0.85 $0.85 $3.00 $3.00 $3.00
Expected life (years)5.50 5.75 6.00 6.25 5.50 5.75 6.00
Expected volatility82.40% 82.20% 81.90% 81.70% 86.60% 85.40% 89.00%
Expected dividend yield—% —% —% —% —% —% —%
Risk-free interest rate1.57% 1.57% 1.57% 1.57% 1.57% 1.57% 1.57%

The input assumptions used are as follows:
Discount rate —Based on the daily yield curve rates for U.S. Treasury obligations with maturities which correspond to the expected term of the Company’s stock options.
Dividend yield —The Company has not paid any dividends on common stock since its inception and does not anticipate paying dividends on its common stock in the foreseeable future.
Expected volatility —Based on the historical volatility of seven different comparable Companys’ stock.
Expected term —The Company has had no stock options exercised since inception. The expected option term represents the period that stock-based awards are expected to be outstanding based on the simplified method provided in Staff Accounting Bulletin (“SAB”) No. 107, Share-Based Payment , (“SAB No. 107”), which averages an award’s weighted-average vesting period and expected term for “plain vanilla” share options. Under SAB No. 107, options are considered to be “plain vanilla” if they have the following basic characteristics: (i) granted “at-the-money”; (ii) exercisability is conditioned upon service through the vesting date; (iii) termination of service prior to vesting results in forfeiture; (iv) limited exercise period following termination of service; and (v) options are non-transferable and non-hedgeable.
The Company will continue to use the simplified method for the expected term until it has the historical data necessary to provide a reasonable estimate of expected life in accordance with SAB No. 107, as amended by SAB No. 110. For the expected term, the Company has “plain-vanilla” stock options, and therefore used a simple average of the vesting period and the contractual term for options granted subsequent to January 1, 2006 as permitted by SAB No. 107.
Forfeitures —ASC Topic 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company has estimated zero forfeiture.


The following table summarizes stock option activity for the three months ended December 31, 2017:
 Number of Options Weighted Average Exercise Price Per Option Weighted Average remaining Contractual Life (years) Aggregate Intrinsic Value
Outstanding balance at September 30, 20174,829,875
 0.56
 8.60
 $5,975,874
        
Granted—
 —
 —
 —
        
Exercised—
 —
 —
 —
        
Forfeited and Expired—
 —
 —
 —
        
Outstanding balance at December 31, 20174,829,875
 0.56
 8.02
 $11,806,521
        
Options exercisable at December 31, 20171,963,156
 0.27
 7.01
 $5,365,467
There were no options exercised during the three months ended December 31, 2017.

As of December 31, 2017,June 30, 2021 there was approximately $1,262,741$1,580 of total unrecognized compensation cost related to stock options. The cost is expected to be recognized over a weighted average period of 1.30.17 years.


For the three months ended

5.  CONVERTIBLE NOTES

The table below summarizes outstanding convertible notes as of June 30, 2021 and September 30, 2020: 

Convertible Notes Payable: June 30,
2021		  September 30,
2020		 
Principal value of Non-Related Party Notes  392,500   292,500 
Interest accrued  96,396   64,202 
Carrying Value of Notes  488,896   356,702 
         
Principal value of Related Party Notes  276,000   86,000 
Interest accrued  21,958   4,262 
Beneficial conversion feature of new notes  (81,818)  - 
Carrying Value of Notes  216,140   90,262 
         
Total carrying value of convertible notes payable  705,036   446,964 

Most notes accrue interest at 12% per annum and are due on December 31, 2017, $257,207 related2021. The most recent note issued for $100,000 accrues interest at 1% per annum and is due on December 31, 2021.

On February 3, 2021, all previously outstanding notes were reissued with amended expiry and conversion terms. The amended terms are as follows:

1.Conversion

The amended Notes provide the Holders with the right to convert, at any time, all or any part of the outstanding principal and accrued but unpaid interest into shares of the Company’s common stock at a conversion price equal to the lower of (i) $0.01 per share based compensationor (ii) the price of the next equity financing, which raises at least US $1,000,000, subject to directors and employees which has been includedadjustments noted within the general and administrative expense category in the unaudited condensed consolidated interim financial statements.  An additional ($32,225) related to non-employees has been included within the Consultancy fees third parties and related parties expense category in the unaudited condensed consolidated interim financial statements.Agreement.


For the three months ended December 31, 2016, $159,095 related to share based compensation to directors and employees which has been included within the general and administrative expense category in the unaudited condensed consolidated interim financial statements. An additional $91,445 related to non-employees has been included within the Consultancy fees third parties and related parties expense category in the unaudited condensed consolidated interim financial statements.

7.    WARRANTS


On April 10, 2016, the Company incurred the obligation to issue warrants to placement agents relating to fundraising. The Company accounted for the obligation based on an estimate
2.Expiry of the notes was amended to December 31, 2021.

The fair value of warrants issued using the Black-Scholes Model (“BSM”) andamended notes was calculated as the Company recorded $484,009 as a liabilityprincipal plus interest.

The original notes were deemed to be extinguished, and a reduction to proceedsloss on extinguishment of the equity offering (additional paid-in-capital). The Company assessed the fair value for each reporting period of the liability and recorded changes to additional paid-in capital. At February 28, 2017, the date the warrants were issued, the obligation$nil was reversed to additional paid-in capital and no outstanding liability existed. Based upon the Company’s analysis of the criteria contained in ASC Topic 815-40, “Derivatives and Hedging - Contracts in an Entity’s Own Equity”, the Company determined that the warrants issued as placement agent warrants are classified as equity in additional paid in capital. recorded.


On July 3, 2017,January 14, 2021, the Company entered into a finders agreement12% Convertible Promissory Note with a placement agent whereby they incurred an obligationPanetta Partners Ltd. (the “Holder”) pursuant to issue warrants once a private placement has successfully been entered into. On August 31, 2017, the performance condition had been satisfied andwhich the Company issued a Convertible Promissory Note to the related warrants. Based uponHolder. The Holder provided the Company with $60,000 in cash. The Company promised to pay the principal amount, together with guaranteed interest at the annual rate of 12%, with principal and accrued interest on the Note due and payable on December 21, 2021 (unless converted under terms and provisions as set forth within the Agreement). The Note provides the Holder with the right to convert, at any time, all or any part of the outstanding principal and accrued but unpaid interest into shares of the Company’s analysiscommon stock at a conversion price equal to the lower of (i) $0.01 per share or (ii) the price of the criteria contained in ASC Topic 815-40, “Derivatives and Hedging - Contracts in an Entity’s Own Equity”,next equity financing, which raises at least US $1,000,000, subject to adjustments noted within the Agreement. The number of shares issuable upon a conversion shall be determined by the quotient obtained by dividing (x) the outstanding principal amount of the Note to be converted by (y) the Conversion Price. The Note requires the Company determinedto reserve and keep available out of its authorized and unissued shares of common stock the amount of shares that would be issued upon conversion of the warrants issued as placement agent warrants are classified as equity in additional paid in capital.Note, which includes the outstanding principal amount of the Note and interest accrued and to be accrued through the date of maturity. 


On September 1, 2017,February 10, 2021, the Company entered into a 12% Convertible Promissory Note with Panetta Partners Ltd. (the “Holder”) pursuant to which the Company issued warrantsa Convertible Promissory Note to placement agents in lieu of fees for consultancy services to bethe Holder. The Holder provided over a period of 6 months. Based upon the Company’s analysis of the criteria contained in ASC Topic 815-40, “Derivatives and Hedging - Contracts in an Entity’s Own Equity”, the Company determined thatwith $90,000 in cash. All other terms were the warrants issued in lieusame as the note before.

Upon issuance of consultancy fees are classified as equity in additional paid in capital.




The fair valuethese notes, the Company recognized a debt discount of approximately $150,000, resulting from the warrants atrecognition of a beneficial conversion feature (BCF). This BCF will be amortized on a straight line basis over the date of issuance has been calculated based on the following inputs and assumptions using the Black Scholes Model:

 September 1, 2017August 31, 2017February 28, 2017
Fair value at issuance date$1,420,456$424,179$2,914,884
Warrants issued374,000112,0001,440,501
Exercise Price$0.60$0.65$0.37
Stock Price$4.00$4.00$2.10
Expected Term (Years)101010
Volatility %91%91%105%
Discount Rate - Bond Equivalent Yield2.35%2.35%2.55%
Dividend Yield—%—%—%

The input assumptions used are as follows:
Discount rate —Based on the daily yield curve rates for U.S. Treasury obligations with maturities which correspond to the expected term of the Company’s stock options.
Dividend yield —The Company has not paid any dividends on common stock sincenote due to its inception and does not anticipate paying dividends on its common stock in the foreseeable future.
Expected volatility —Based on the historical volatility of seven different comparable Companies’ stock.
Expected term —The Company has used the life of the warrant.


The following table summarizes warrant activity for the three months ended December 31, 2017:
short life.

 Number of Warrants Weighted Average Exercise Price Per Option Weighted Average remaining Contractual Life (years) Aggregate Intrinsic Value
Outstanding balance at September 30, 20171,926,501
 0.43
 8.86
 6,875,819
        
Granted—
 —
 —
 —
        
Forfeited—
 —
 —
 —
        
Outstanding balance at December 31, 20171,926,501
 0.43
 8.61
 $4,949,318
        
Warrants exercisable at December 31, 20171,926,501
 0.43
 8.61
 $4,949,318

The performance related warrants issued on August 31, 2017 are fully vested and do not have any forfeiture conditions attached.

The fair value of the consultancy warrants issued on September 1, 2017 was $1,418,071 at December 31, 2017, of which $307,765 was expensed during the six months ended September 30 2017.

During the three months ended December 31, 2017, $779,422 of costs were recognized for consultancy related warrants. These costs are included within the Consultancy fees third parties and related parties expense category in the consolidated financial statements. 

There is approximately $330,884 of unrecognized costs related to warrants to be recognized over a weighted average period of 2 months.





8.

6.  RELATED PARTY TRANSACTIONS


During the normal course of its business, the Company enters into various transactions with entities that are both businesses and individuals.

The following is a summary of the related party transactions duringfor the three months ended December 31, 2017 and 2016.periods presented.

Eurema Consulting

Eurema Consulting S.r.l. wasis a significant shareholder of Arna Therapeutics Limited.the Company. During the three months ended December 31, 2017June 30, 2021 and three months ended December 31, 2016,June 30, 2020 Eurema Consulting S.r.l. did not supply the Company with consulting services. As of December 31, 2017,June 30, 2021, and September 30, 2017,2020, the balance due to Eurema Consulting S.r.lS.r.l. was owed $200,000 and $200,000, respectively, by the Company for past consultancy services.



Gabriele Cerrone

Gabriele Cerrone was a Directoris the majority shareholder of Arna Therpeutics Limited. DuringPanetta Partners, one of the three months ended December 31, 2017,Gabriele Cerrone did not supply the Company with consulting services. During the three months ended December 31, 2016, Gabriele Cerrone charged the Company $25,000, relating to consultancy fees.Company’s principal shareholders. As of December 31, 2017,June 30, 2021, and September 30, 2017,2020, the balance due to Gabriele Cerrone was $175,000 and $175,000, respectively for past consultancy services. In March 2020, the Company entered into a 12% Convertible Promissory Note with Gabriele Cerrone for $20,000 with an extended maturity date of December 31, 2021. In February 2021, Gabriele Cerrone assigned the Note to Panetta Partners Ltd.


Roberto Pellicciari

Roberto Pellicciari was a Director of Arna Therpeutics Limited and soleTES Pharma 

Roberto Pellicciari is the majority shareholder of TES Pharma Srl.Srl, one of the Company’s principal shareholders. During the three months ended December 31, 2017June 30, 2021 and June 30, 2020 Roberto Pellicciari did not supply the Company with consulting services. During the three months ended December 31, 2016, Roberto Pellicciari charged the Company $25,000, relating to consultancy fees. As of December 31, 2017,June 30, 2021, and September 30, 2017,2020, the balance due to Roberto Pellicciari was $175,000 and $175,000, respectively for past consultancy services. At June 30, 2021 and September 30, 2020, TES Pharma was owed $75,000. 


There is no interest charged on the balances with related parties. There are no defined repayment terms and such amounts can be called for payment at any time.

9.    COMMITMENTS AND CONTINGENCIES

Tiziana Life Sciences Plc (“Tiziana”)

License Agreements

The Company is party to a Shared Services Agreement with Tiziana, whereby the Company is charged for shared services and rent. Tiziana had previously agreed to waive all charges for shared services from October 2018 onwards, until further notice since the amounts due for such services are de minimis. Notice was given and recharges from October 1, 2020 were resumed. Keeren Shah the Company’s Finance Director, is also Finance Director of Tiziana, and the Company’s directors, Willy Simon and John Brancaccio are also non executive directors of Tiziana.


As of June 30, 2021, $7,757 was due to Tiziana under services charged under the shared services agreement. This is recorded as a related party payable in the accompanying condensed consolidated balance sheets. As of September 30, 2020, the Company made payments on behalf of Tiziana of $748, which are recorded as a related party receivable in the accompanying condensed consolidated balance sheets. 

On June 30, 2020, Tiziana extended a loan facility to Rasna of $65,000. The loan is repayable within 18 months and is incurring an interest charge of 8% per annum. In November 2016,April 2020, the loan facility was extended by a further $7,000, so the loan facility totals $72,000. As of June 30, 2021, the amounts due to Tiziana under this loan facility were $79,200.

Panetta Partners

Panetta Partners Limited, a shareholder of Rasna, is a company in which Gabriele Cerrone is a major shareholder and also serves as a director.

In February 2020, September 2020 and October 2020 the Company entered into a license agreement12% Convertible Promissory Notes with Profs. FaliniPanetta Partners for $31,000, $35,000 and Martelli, wherein it obtained the exclusive rights related$40,000 with extended maturity dates of December 31, 2021. The amount due for these notes at June 30, 2021, with respect to the use or reformulationprincipal and accrued interest is $36,198, $38,243 and $43,320 respectively.

In February 2021, Gabriele Cerrone, a major shareholder of Actinomycin D and intends to utilize these rights for the development of new product. In connection with this agreement, the Company was committed to paying milestone payments, the first beingPanetta Partners Ltd, assigned a EUR 50,000 payment to be paid six months after the agreement was signed. The payment was made to Profs. Falini and Martelli in June 2017.


During the three months ended December 31, 2017, the second milestone was achieved triggering a payment EUR 50,000 . This will be paid12% Convertible Promissory Note that he entered into in February 2018.2020 to Panetta Partners Ltd. The amount due for this note at June 30, 2021, with respect to the principal and accrued interest is $23,067.

7. SUBSEQUENT EVENTS


The specific timing of the remaining milestones cannot be predicted and depend upon research and clinical developments. The Company expects to incur further payments of EUR 400,000 in respect of this agreement once milestones are achieved.

Lease Agreements

In January 2017, the Company entered into a lease agreement with Bucks County Biotechnology Centre Inc in Doylestown Pennsylvania, where certain employees of the Company are based. The lease provides for annual basic lease payments from February 1, 2017 to January 31, 2018 of $13,480, plus and utility expense estimate of $237 per month. During the three months ended December 31, 2017, the Company had incurred approximately $4,000 of rental expenses related to this agreement.

The Company is currently in the process of renewing this lease, which has an automatic month to month renewal until the new lease agreement is signed.

Employment and Consultancy Agreements



In October 2015, Rasna Therapeutics Ltd entered into a consultancy agreement with James Tripp in which he agreed to consult on clinical operations for a fee of $10,000 per calendar quarter. Mr. Tripp's consultancy agreement ended in May 2017 and all outstanding obligations are settled with him.

In September 2016, the board of directors awarded Mr Tripp 125,000 options to vest over a 3 year period, with an exercise price of $0.40. Upon the end of Mr Tripp's consultancy agreement in May 2017, all options have been forfeited.

In October 2016, the Company entered into a consultancy agreement with Tiziano Lazzaretti in which he agreed to serve as Chief Financial Officer for a fee of $50,000 per year. This was increased to $80,000 a year in April 2017 by the Company's compensation committee.

On May 24, 2017, the Company entered into an executive employment agreement with Kunwar Shailubhai to serve as Chief Executive Officer and Chief Scientific Officer for a renumeration of $300,000 per annum. Also included within the agreement is a performance related bonus of 35% of base salary.

In June 2017, the board of directors awarded Dr Shailubhai 1,700,000 options to vest over a 4 year period, with an exercise price of $0.85.

The Company has entered a number of employment agreements commencingevaluated subsequent events that occurred after the balance sheet date up to the date that the consolidated financial statements were issued and did not identify any subsequent events that would have required adjustment or disclosure in January 2017. These agreements relate to clinical and non clinical employees, and are reviewable on an annual basis. The Company's committed to paying approximately $180,000 of salary and bonus expenses for the 12 month period to December 2018.consolidated financial statements.


Shared Services Agreement


The Company has entered into a shared services agreement with Tiziana Life Sciences Plc. Under the terms of this agreement, the Company will be charged for shared services including payroll and rent for the Lexington Avenue premises, on a monthly basis based on allocated costs incurred. This agreement is effective from January 1, 2017. At December 31, 2017 $0 is due to Tiziana Life Sciences PLC. During the three months ended December 31, 2017, the Company had incurred approximately $44,000 of payroll and $29,000 of rental expenses related to this agreement.



Other Commitments

The Company may enter into certain licensing agreements for products currently under development. The Company may be obligated in future periods to make additional payments, which would become due and payable only upon the achievement of certain research and development, regulatory, and approval milestones. The specific timing of such milestones cannot be predicted and depend upon future discretionary research and clinical developments, as well as, regulatory agency actions. Further, under the terms of certain agreements the Company may be obligated to pay commercial milestones contingent upon the realization of sales revenues and sublicense revenues. Due to the long range nature of such commercial milestones, they are neither probable at this time nor predictable, and consequently are not considered contingent milestone payment amounts.

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

Forward-Looking Statements

This section and other parts of this Quarterly Report on Form 10-Q contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. Forward-looking statements can also be identified by words such as “future,” “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “will,” “would,” “could,” “can,” “may,” and similar terms. Forward-looking statements are not guarantees of future performance and the Company’s actual results may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such differences include, but are not limited to, those discussed in the Company’s Annual Report on Form 10-KT10-K filed on November, 30, 2017January 15, 2021 under the heading “Risk Factors,” which are incorporated herein by reference.

We assume no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.



Unless expressly indicated or the context requires otherwise, the terms "Rasna,"“Rasna,”,” the “Company,” “we,” “us,” and “our” refer to Rasna Therapeutics, Inc., a Nevada corporation, and, where appropriate, its wholly owned subsidiaries.

Company Background

To date, we have devoted substantially all of our resources to research and development efforts relating to our therapeutic candidates, including conducting clinical trials and developing manufacturing capabilities, in-licensing related intellectual property, protecting our intellectual property and providing general and administrative support for these operations. Since our inception, we have funded our operations primarily through the issuance of equity securities.securities and convertible notes.


We anticipate that our expenses will increase substantially if and as we:

●initiate new clinical trials;
●seek to identify, assess, acquire and develop other products, therapeutic candidates and technologies;
●seek regulatory and marketing approvals in multiple jurisdictions for our therapeutic candidates that successfully complete clinical studies;
●establish collaborations with third parties for the development and commercialization of our products and therapeutic candidates;
●make milestone or other payments under our agreements pursuant to which we have licensed or acquired rights to intellectual property and technology;

●seek to maintain, protect, and expand our intellectual property portfolio;
●seek to attract and retain skilled personnel;
●incur the administrative costs associated with being a public company and related costs of compliance;
●create additional infrastructure to support our operations as a commercial stage public company and our planned future commercialization efforts; and 
●experience any delays or encounter issues with any of the above.


continue enrollment in our ongoing clinical trials;


initiate new clinical trials;


seek to identify, assess, acquire and develop other products, therapeutic candidates and technologies;

seek regulatory and marketing approvals in multiple jurisdictions for our therapeutic candidates that successfully complete clinical studies;

establish collaborations with third parties for the development and commercialization of our products and therapeutic candidates;

make milestone or other payments under our agreements pursuant to which we have licensed or acquired rights to intellectual property and technology;

seek to maintain, protect, and expand our intellectual property portfolio;

seek to attract and retain skilled personnel;

incur the administrative costs associated with being a public company and related costs of compliance;

create additional infrastructure to support our operations as a commercial stage public company and our planned future commercialization efforts; and

experience any delays or encounter issues with any of the above.

We expect to continue to incur significant expenses and increasing losses for at least the next several years. Accordingly, we anticipate that we will need to raise additional capital in addition to the net proceeds from this offering in order to obtain regulatory approval for, and the commercialization of our therapeutic candidates. Until such time that we can generate meaningful revenue from product sales, if ever, we expect to finance our operating activities through public or private equity or debt financings, government or other third-party funding, marketing and distribution arrangements and other collaborations, strategic alliances and licensing arrangements or a combination of these approaches. If we are unable to obtain funding on a timely basis, we may be required to significantly curtail, delay or discontinue one or more of our research or development programs or the commercialization of any approved therapies or products or be unable to expand our operations or otherwise capitalize on our business opportunities, as desired, which could materially adversely affect our business, financial condition and results of operations.


On October 11, 2017, we changed our fiscal year end from March 31 to September 30 and we filed a Form 10-KT on November 30, 2017.

Rasna Therapeutics, Inc. (“Rasna DE" or "Rasna Inc.”), is a company incorporated in the State of Delaware on March 28, 2016.

On April 27, 2016, Rasna Therapeutics Limited, a private limited company incorporated in England and Wales under the U.K. Companies Act (“Rasna UK”) sold its stake in Falconridge Holdings Limited, or Falconridge, to Rasna DE for $1. This entity had no operations, no assets or liabilities as of this date.
On May 17, 2016, Rasna DE and its subsidiary Falconridge entered into an Agreement of Merger and Plan of Reorganization (“Merger Agreement”) with Arna Therapeutics Limited, a British Virgin Islands company, or Arna, which was a clinical stage


biotechnology company focused on drugs to treat diseases in oncology and immunology, mainly focusing on the treatment of leukemia. Pursuant to the agreement, Arna was merged into Falconridge and the shareholders of Arna were issued shares of Rasna DE in exchange for shares of Arna.

On August 15, 2016, Active With Me, Inc., or AWM, entered into an Agreement of Merger and Plan of Reorganization (the “Merger Agreement”) with Rasna DE, and Rasna Acquisition, providing for the merger of Rasna Acquisition with and into Rasna DE, (the “Merger”), with Rasna DE, surviving the Merger as a wholly-owned subsidiary of AWM. As a result of the Merger, the resulting company, Rasna Therapeutics, Inc., is a biotechnology company that is engaged in modulating the molecular targets NPM1 and LSD1, which are implicated in the disease progression of leukemia and lymphoma.
The Merger has been treated as a reverse recapitalization effected by a share exchange for financial accounting and reporting purposes since substantially all of AWM’s operations were disposed of prior to the consummation of the transaction.  Rasna DE is treated as the accounting acquirer as its stockholders control us after the Merger Agreement, even though AWM was the legal acquirer.  As a result, the assets and liabilities and the historical operations that are reflected in our financial statements are those of Rasna DE as if Rasna DE had always been the reporting company.  Since AWM had no operations upon the Merger Agreement taking place, the transaction was treated as a reverse recapitalization for accounting purposes and no goodwill or other intangible assets were recorded by us as a result of the Merger Agreement.
Thereafter, pursuant to a Stock Purchase Agreement, the Company transferred all of the outstanding capital stock of Rasna DE to a former officer and director of AWM in exchange for cancellation of an aggregate of 1,500,000 shares of Rasna DE's common stock held by such person.

In connection with the share exchange, each share of Rasna DE was exchanged for the right to receive .33 shares in AWM. Once issued, the new shares were combined with the 3,305,000 common shares held by legacy AWM shareholders. Immediately following the Merger, 1,500,000 shares were canceled, which related to one legacy AWM shareholder that effectively spun off the remaining assets of AWM in connection with the transaction. Finally, subsequent to the transaction, the legal acquirer executed a 3.25 for 1 stock split on its common shares. Historical common stock amounts and additional paid-in capital have been retroactively adjusted for the effect of the share splits executive in connection with the Merger transaction.

On September 20, 2016, we filed a Certificate of Change in Nevada which effected a 3.25 for 1 forward stock split of our common stock for shareholders of record as of August 16, 2016 and increased the authorized number of shares of common stock to 200,000,000 shares.

We only have one segment of activity, which is that of a clinical stage biotechnology company focused on targeted drugs to treat diseases in oncology and immunology, mainly focusing on the treatment of leukemia and lymphoma.


The Company is currently looking into raising funds to progress its R&D pipeline.

Critical Accounting Policies and Estimates

This discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States of America, or US GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported period. In accordance with US GAAP, we base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.

While our significant

The Company has determined that it was not subject to any new accounting policies are more fully described in Note 2 to our unaudited condensed consolidated financial statements appearing elsewhere in this Quarterly Report, we believepronouncements that became effective during the following accounting policies are critical to the process of making significant judgments and estimates in the preparation of our financial statements.Nine months ended June 30, 2021.


Basis of preparation

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”).US GAAP. Any reference in these notes to applicable guidance is meant to refer to US GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“the FASB”).







Principles of Consolidation
In accordance with ASC 810, Consolidation, we consolidate any entity in which we have a controlling financial interest. Further, we consolidate any variable interest entity that we are deemed to be the primary beneficiary of,

Liquidity and have the power to direct its significant activities. Upon review of the relationship between Rasna Therapeutics (“Rasna UK”) and Rasna, Management noted that equity investment in Rasna UK is not sufficient to fund its operations. Accordingly, Rasna is considered to be the primary beneficiary of the assets held within Rasna UK, which primarily consist of cash received from Rasna to fund its operations, and has power to direct its significant activities. As a result, Rasna consolidates this variable interest entity.

The interim condensed consolidated financial statements include the financial statements of the Company and its subsidiary, Arna Therapeutics Limited as well as the operations of Rasna for the period from May 17, 2016 through December 31, 2017. All significant intercompany accounts and transactions have been eliminated in the preparation of the accompanying condensed consolidated financial statements.
Business Combinations

Management accounts for business combinations under the provisions of Accounting Standards Codification ("ASC") Topic 805-10, Business Combinations ("ASC 805-10"), which requires that the purchase method of accounting be used for all business combinations. Assets acquired and liabilities assumed, including non-controlling interests, are recorded at the date of acquisition at their respective fair values. ASC 805-10 also specifies criteria that intangible assets acquired in a business combination must meet to be recognized and reported apart from goodwill. Goodwill represents the excess purchase price over the fair value of the tangible net assets and intangible assets acquired in a business combination. Acquisition-related expenses are recognized separately from the business combinations and are expensed as incurred.
Management is required to complete the purchase price allocation within 12 months of the acquisition date. If such completion of the allocation results in a change in the preliminary values, the measurement period adjustment will be recognized in the period in which the adjustment amount is determined in accordance with ASU 2015-16. The amounts reflected within the Note 3 - Acquisitions are the results of a purchase price allocation based on a final valuation report.
Going Concern

We are subject to a number of risks similar to those of other pre-commercial stage companies, including our dependence on key individuals, uncertainty of product development and generation of revenues, dependence on outside sources of capital, risks associated with research, development, testing, and obtaining related regulatory approvals of its pipeline products, suppliers and collaborators, successful protection of intellectual property, competition with larger, better-capitalized companies, successful completion of our development programs and, ultimately, the attainment of profitable operations are dependent on future events, including obtaining adequate financing to fulfill our development activities and generating a level of revenues adequate to support our cost structure.

We have no present revenue and have experienced net losses and significant cash outflows from cash used in operating activities over the past years,since inception, and as at December 31, 2017,June 30, 2021, had accumulateda working capital deficit of $14,302,519 ,$2,921,688, a net loss for the threeNine months ended December 31, 2017June 30, 2021 of $2,003,451$561,812 and net cash used in operating activities of $1,255,239.$253,401 for the Nine months ended June 30, 2021.


We expect to continue to incur net losses and have significant cash outflows for at least the next twelve months. We have sufficient funds to continue operating until the end of November 2018, butmonths and will require significant additional cash resources to launch new development phases of existing products in its pipeline. In the event that the Company is unable to secure the necessary additional cash resources needed, we may slow current development phases or halt new development phases in order to mitigate the effects of the costs of development. These conditions, among others, raise substantial doubt about the our ability to continue as a going concern.concern one year from the date of this filing. The accompanying condensed consolidated financial statements have been prepared assuming that we will continue as a going concern.concern one year from the date of this filing. This basis of accounting contemplates the recovery of our assets and the satisfaction of liabilities in the normal course of business. A successful transition to attaining profitable operations is dependent upon achieving a level of positive cash flows adequate to support our cost structure.






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 liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. We evaluate our estimates on an ongoing basis, including those related to the fair values of stock based awards, income taxes and contingent liabilities, among others. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from those estimates and such differences could be material to our consolidated financial position and results of operations.

Fair Value of Financial Instruments
The carrying value of our financial instruments, including cash and cash equivalents, related party balances, accounts payable and accrued liabilities, approximate fair value because of the short-term nature of such financial instruments. Management measures certain other assets, including nonmarketable equity securities, at fair value on a nonrecurring basis when they are deemed to be other-than-temporarily impaired.

Concentration of Credit Risk
Financial instruments that potentially subject us to concentrations of credit risk consist principally of related party receivables.

Deposits held with banks, including those held in foreign branches of global banks, may exceed the amount of insurance provided on such deposits. These deposits may be redeemed upon demand and bear minimal risk. Management believes that the institutions that hold our instruments are financially sound and are subject to minimal credit risk.


Cash and cash equivalents
Cash and cash equivalents consists of cash on deposit with banks with an original maturity of three months or less.

From time to time,our balances in our bank accounts exceed Federal Deposit Insurance Corporation limits. We will periodically evaluate the risk of exceeding insured levels and might transfer funds if we deem appropriate. We have not experienced any losses with regards to balances in excess of insured limits or as a result of other concentrations of credit risk.


Goodwill and Intangible assets
Intangible assets are made up of indefinite lived intangible assets, in-process research and development, (“IPR&D”) and certain intellectual property (“IP”). The balance of the indefinite lived intangible assets represents the platform technology that was acquired in 2013, which, at the time, was determined to have alternative future uses. IPR&D assets represent the fair value assigned to acquired technologies in a business combination, which at the time of the business combination have not reached technological feasibility and have no alternative future use. IP assets represent the fair value assigned to technologies, which at the time of acquisition have reached technological feasibility, however, have not yet been put into service. Intangible assets are considered to have an indefinite useful life until the completion or abandonment of the associated research and development projects.
Goodwill represents the premium paid over the fair value of the net tangible and intangible assets acquired in business combinations.  Goodwill is not amortized; rather, it is subject to a periodic assessment for impairment by applying a fair value based test.  Goodwill is assessed for impairment on an annual basis or more frequently if events or changes in circumstances indicate that the asset might be impaired. An impairment charge is recognized only when the implied fair value of the Company’s reporting unit’s goodwill is less than its carrying amount.
Management evaluates indefinite life intangible assets for impairment on an annual basis and on an interim basis if events or changes in circumstances between annual impairment tests indicate that the asset might be impaired. The ongoing evaluation for impairment of its indefinite life intangible assets requires significant management estimates and judgment. Management reviews definite life intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. There were no impairment charges as of the three months ended December 31, 2017 or 2016.

Risks and Uncertainties


We intend to operate in an industry that is subject to rapid change. Our operations will be subject to significant risk and uncertainties including financial, operational, technological, regulatory, and other risks associated with an early stage company, including the potential risk of business failure.

Reclassifications
Certain prior period amounts have been reclassified for comparative purposes to conform to the fiscal 2018 presentation. These reclassifications have no impact on the previously reported net loss.


Research and development
Expenditure on research and development is charged to the statements of operation in the year in which it is incurred with the exception of expenditures incurred in respect of the development of major new products where the outcome of those projects is assessed as being reasonably certain in regards to viability and technical feasibility. Such expenditure is capitalized and amortized straight line over the estimated period of sale for each product, commencing in the year that sales of the product are first made. To date, we have not capitalized any such expenditures other than certain IPR&D & IP recorded in connection with certain acquisition or equity transactions.

Foreign Currency
Items included in the financial statements are measured using their functional currency, being the currency of the primary economic environment in which the company operates. The financial statements are presented in United States Dollar (“USD”), which is the company’s functional and presentational currency.
Foreign currency transactions are translated using the rate of exchange applicable at the date of the transaction. Foreign exchange gains and losses resulting from the settlement of such transactions and from the re-translation at the year-end of monetary assets and liabilities denominated in foreign currencies are recognized in the statements of operations.

Net Loss per Share
Basic net loss per share is computed by dividing net loss available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted net loss per share includes potentially dilutive securities such as outstanding options and warrants, using various methods such as the treasury stock or modified treasury stock method in the determination of dilutive shares outstanding during each reporting period.
The following table sets forth potential common shares issuable upon the exercise of outstanding options and the exercise of warrants, all of which have been excluded from the computation of diluted weighted average shares outstanding as they would be anti-dilutive, including the impact on dilutive net loss per share of in-the-money warrants as per ASC 260-10-45-35 through ASC 260-10-45-37:

 December 31, 2017 December 31, 2016
Stock options4,829,875
 1,662,375
Warrants1,926,501
 —
Total shares issuable upon exercise or conversion6,756,376
 1,662,375


Equity-Based Payments to Non-Employees
ASC Topic 718 “Compensation-Stock Compensation” requires companies to measure the cost of employee services received in exchange for the award of equity instruments based on the estimated fair value of the award at the date of grant. The expense is to be recognized over the period during which an employee is required to provide services in exchange for the award. The Company accounts for shares of common stock, stock options and warrants issued to employees based on the fair value of the stock, stock option or warrant, if that value is more reliably measurable than the fair value of the consideration or services received.


We account for stock options issued and vesting to non-employees in accordance with ASC Topic 505-50 “Equity -Based Payment to Non-Employees” and accordingly the value of the stock compensation to non-employees is based upon the measurement date as determined at either a) the date at which a performance commitment is reached, or b) at the date at which the necessary performance to earn the equity instruments is complete. Accordingly the fair value of these options is being “marked to market” quarterly until the measurement date is determined.

Income taxes

On December 22, 2017, The Tax Cuts and Jobs Act was signed into law and has resulted in significant change to the U.S corporate income tax system.  These changes include a federal statutory rate reduction from 35% to 21%, a transition tax which applies to the repatriate of foreign earnings and profits, the elimination or reduction of certain domestic deductions and credits and limitations on the deductibility of interest expense and executive compensation. 

Changes in tax rates and tax laws are accounted for in the period of enactment.  Therefore, during the three month period ended December 31, 2017, we recorded an income tax benefit totaling $4,301 related to our current estimate of the impact of the 2017 Tax Cuts and Jobs Act.

Recent Accounting Pronouncements Not Yet Adopted

On August 26, 2016, the FASB issued Accounting Standards Update (ASU) 2016-15, Classification of Certain Cash Receipts and Cash Payments, seeking to eliminate diversity in practice related to how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments in ASU 2016-15 address eight specific cash flow issues and apply to all entities, including both business entities and not-for-profit entities that are required to present a statement of cash flows under FASB Accounting Standards Codification (FASB ASC) 230, Statement of Cash Flows.
The amendments in ASU 2016-15 are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendments in the same period. The amendments in ASU 2016-15 should be applied using a retrospective transition method to each period presented. If it is impracticable to apply the amendments retrospectively for some of the issues, the amendments for those issues would be applied prospectively as of the earliest date practicable. We expect to adopt this ASU described above in our Consolidated Financial Statements beginning in October 1, 2018. Management has evaluated and concluded that there will be no material impact on our consolidated financial statements.
In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230) Restricted Cash a consensus of the FASB Emerging Issues Task Force (“ASU 2016-18”). ASU 2016-18 requires restricted cash and cash equivalents to be included with cash and cash equivalents on the statement cash flows. The new standard is expected to be effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, with early adoption permitted. Management has evaluated the effects of ASU 2016-18 and concluded that there will be no material impact on our consolidated financial statements.
In January 2017, the FASB issued ASU 2017-1, Business Combinations (Topic 805): Clarifying the Definition of a Business, which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The guidance is effective for annual financial reporting periods beginning after December 15, 2017. We expect to adopt this ASU described above in our Consolidated Financial Statements beginning in October 1, 2018. Management has evaluated and concluded that there will be no material impact on our consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04, Intangibles -Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, which addresses the concerns over the cost and complexity of the two-step impairment test, and removes the second step of the test. An entity will apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The guidance is effective for annual and interim goodwill impairment tests performed for periods beginning after December 15, 2019 with early adoption permitted in January 2017. Management has evaluated and concluded that there will be no material impact on our consolidated financial statements.

In July 2017, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting


for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral. The ASU applies to issuers of financial instruments with down-round features. It amends (1) the classification of such instruments as liabilities or equity by revising the guidance in ASC 815 on the evaluation of whether instruments or embedded features with down-round provisions must be accounted for as derivative instruments and (2) the guidance on recognition and measurement of the value transferred upon the trigger of a down-round feature for equity-classified instruments by revising ASC 260. The ASU is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For all other companies, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted. Management has evaluated and concluded that there will be no material impact on our consolidated financial statements.


Results of Operations

The following paragraphs set forth our results of operations for the periods presented. The period-to-period comparison of financial results is not necessarily indicative of future results.

Results of Operations for the Three Months Ended December 31, 2017Nine months ended June 30, 2021 and 20162020

The following table sets forth the summary statements of operations for the periods indicated:

  For the 
Nine Months Ended
June 30,		 
  2021  2020 
  (Unaudited)  (Unaudited) 
Revenue $—  $— 
Cost of revenue  —   — 
Gross profit  —   — 
         
Operating expenses:        
Research and Development  44,739   66,739 
General and administrative  268,398   356,686 
Total operating expenses  313,137   423,425 
         
Loss from operations  (313,137)  (423,425)
         
Other expense:        
         
       — 
Accretion of debt discount  (68,182)  — 
Beneficial conversion feature on convertible notes  (123,718)  — 
Gain on sale of asset  —   120,000 
Impairment of goodwill  —   (2,722,985)
Interest expense  (56,824)  (29,785)
Foreign currency transaction gain  48   — 
Other expense  (248,676)  (2,632,770)
         
Net loss $(561,812) $(3,056,195)
 For the Three Months Ended December 31,
 2017 (Unaudited) 2016 (Unaudited)
Revenue$—
 $—
Cost of revenue—
 —
Gross profit—
 —
    
Operating expenses: 
  
General and administrative873,801
 571,215
Research and development176,932
 366,046
Consultancy fees third parties and related parties772,395
 130,180
Legal and professional fees176,647
 310,104
Total operating expenses1,999,775
 1,377,545
    
Loss from operations(1,999,775) (1,377,545)
    
Other income/(expense): 
  
Foreign currency transaction gain(3,676) 21,461
Other income(3,676) 21,461
    
Net loss$(2,003,451) $(1,356,084)

Revenues

Revenues


There were no revenues for the threeNine months ended December 31, 2017June 30, 2021 and 20162020 because the Company does not have any commercial biopharmaceutical products.


Operating Expenses


Operating expenses consisting of research and development costs, consultancy fees, legal and professional fees and general and administrative expenses for the threeNine months ended December 31, 2017 increasedJune 30, 2021 decreased to $1,999,775$268,398 from $1,377,545$356,686 for the threeNine months ended December 31, 2016, an increaseJune 30, 2020, a decrease of $622,230.$88,288 The increasedecrease is primarily attributable to payroll and rental expenditure incurreda reduction in the share based payments charge due to more options having reached the hiring additional employeesend of their vesting period (approximately $74,000) and obtaining additional office spacea reduction in consulting fees (approximately $236,000),$14,000).

Other expense

During the nine months ended June 30, 2021, other expense decreased to approximately $249,000 from $2,632,000 in the prior year. This is due to one off charges in the prior year for the impairment of goodwill ($2,723,000) and the increase



ingain on the charge for options and warrants (approximately $754,000),sale of an asset of $120,000 offset by decreases in researchthe additional interest accrued on the convertible debt of $27,000, a charge recognized for the beneficial conversion feature of $124,000 and development expenses and legal and professional fees (approximately $322,000)the accretion of debt discount of $68,000.


Net Loss


Net loss for the threeNine months ended December 31, 2017 increasedJune 30, 2021 decreased to $2,003,451$561,812 from $1,356,084$3,056,195 for the threeNine months ended December 31, 2016, an increaseJune 30, 2020, a decrease of $647,367. The increase is primarily attributable to payroll and rental expenditure incurred due to the hiring additional employees and obtaining additional office space (approximately $236,000), and the increase in the charge for options and warrants (approximately $754,000), offset by decreases in research and development expenses and legal and professional fees (approximately $322,000)$2,494,383.


Liquidity and Capital Resources


We have sufficientbelieve we will require significant additional cash to carry out our activities until November 2018. We will be required to raise additional capitalresources to continue to launch new development phases of existing products in the Company’s pipeline. In the event that we are unable to secure the necessary additional cash resources needed, we may slow current development and commercializationphases or halt new development phases in order to mitigate the effects of current product candidates andthe costs of development. These conditions, among others, raise substantial doubt about our ability to fund operations.continue as a going concern. A successful transition to attaining profitable operations is dependent upon achieving a level of positive cash flows adequate to support our cost structure. We cannot be certain that additional funding will be available on acceptable terms, or at all. To the extent that we raise additional funds by issuing equity securities, our shareholders may experience significant dilution. Any debt financing, if available, may (i) involve restrictive covenants that impact our ability to conduct, delay, scale back or discontinue the development and/or commercialization of one or more product candidates; (ii) seek collaborators for product candidates at an earlier stage than otherwise would be desirable and on terms that are less favorable than might otherwise be available; or (iii) relinquish or otherwise dispose of rights to technologies, product candidates or products that we would otherwise seek to develop or commercialize its self on unfavorable terms. 

On November 12, 2019, we issued a 12% convertible promissory note (the “Note”) to an investor, in the principal amount of $57,500 with a maturity date of November 12, 2020. The Note was convertible by the holder at any time into shares of our common stock at a conversion price equal to the lower of (i) $0.65 per share or (ii) the price of the next financing during the 180 days after the date of the Note. If the holder has not converted the Note into common stock by the maturity date, we must repay the outstanding principal amount plus accrued interest. 

On February 07, 2020, we issued a 12% convertible promissory note (the “Note”) to an investor, in the principal amount of $31,000 with a maturity date of February 07, 2021. The Note was convertible by the holder at any time into shares of our common stock at a conversion price equal to the lower of (i) $0.20 per share or (ii) the price of the next financing during the 180 days after the date of the Note. If the holder has not converted the Note into common stock by the maturity date, we must repay the outstanding principal amount plus accrued interest. 


On March 20, 2020, we issued a 12% convertible promissory note (the “Note”) to an investor, in the principal amount of $20,000 with a maturity date of March 20, 2021. The Note was convertible by the holder at any time into shares of our common stock at a conversion price equal to the lower of (i) $0.20 per share or (ii) the price of the next financing during the 180 days after the date of the Note. If the holder has not converted the Note into common stock by the maturity date, we must repay the outstanding principal amount plus accrued interest. 

On September 22, 2020, we issued a 12% convertible promissory note (the “Note”) to an investor, in the principal amount of $35,000 with a maturity date of September 22, 2021. The Note was convertible by the holder at any time into shares of our common stock at a conversion price equal to the lower of (i) $0.20 per share or (ii) the price of the next financing during the 180 days after the date of the Note. If the holder has not converted the Note into common stock by the maturity date, we must repay the outstanding principal amount plus accrued interest. 

On October 21, 2020, we issued a 12% convertible promissory note (the “Note”) to an investor, in the principal amount of $40,000 with a maturity date of October 21, 2021. The Note was convertible by the holder at any time into shares of our common stock at a conversion price equal to the lower of (i) $0.05 per share or (ii) the price of the next financing during the 180 days after the date of the Note. If the holder has not converted the Note into common stock by the maturity date, we must repay the outstanding principal amount plus accrued interest. 

All notes contain an anti-dilution provision, which adjusts the conversion price in the event of an issuance by us of common stock below the then effective conversion price. All of these notes were amended and restated in February 2021. The maturity date of the notes were extended to December 31, 20201 and the conversion price amended to the lower of (i) $0.01 per share or (ii) t the price of the next equity financing, which raises at least US$1,000,000.

On January 14, 2021, we issued a 12% convertible promissory note (the “Note”) to an investor, in the principal amount of $60,000 with a maturity date of December 31, 2021. The Note was convertible by the holder at any time into shares of our common stock at a conversion price equal to the lower of (i) $0.01 per share or (ii) t the price of the next equity financing, which raises at least US$1,000,000. If the holder has not converted the Note into common stock by the maturity date, we must repay the outstanding principal amount plus accrued interest.

On February 10, 2021, we issued a 12% convertible promissory note (the “Note”) to an investor, in the principal amount of $90,000 with a maturity date of December 31, 2021. The Note was convertible by the holder at any time into shares of our common stock at a conversion price equal to the lower of (i) $0.01 per share or (ii) t the price of the next equity financing, which raises at least US$1,000,000. If the holder has not converted the Note into common stock by the maturity date, we must repay the outstanding principal amount plus accrued interest.

On May 25, 2021, we issued a 1% convertible promissory note (the “Note”) to an investor, in the principal amount of $100,000 with a maturity date of December 31, 2021. The Note was convertible by the holder at any time into shares of our common stock at a conversion price equal to the lower of (i) $0.01 per share or (ii) t the price of the next equity financing, which raises at least US$1,000,000. If the holder has not converted the Note into common stock by the maturity date, we must repay the outstanding principal amount plus accrued interest.

On April 16, 2020, we entered into an asset purchase agreement with Tiziana pursuant to which we agreed to sell all of the intellectual property relating to a nanoparticle-based formulation of Act D to Tiziana in exchange for an upfront payment of $120,000 and milestone payments of up to an aggregate $630,000.

Capital Resources

The following table summarizes total current assets, liabilities and working capital deficiency as of the periods indicated:

  June 30,
2021
(Unaudited)		  September 30,
2020		  Change 
          
Current assets $94,656  $32,630  $62,026 
Current liabilities  3,016,344   2,707,632   308,711 
Working capital deficit $(2,921,688) $(2,675,002) $(246,686)
 December 31, 2017 (Unaudited) September 30, 2017 Change
Current assets$1,479,455
 $2,695,699
 $(1,216,244)
Current liabilities$1,319,157
 $1,537,364
 $(218,207)
Working capital$160,298

$1,158,335

$(998,037)

We had a cash balance of $1,286,048$50,840 and $2,537,611$14,241 at December 31, 2017June 30, 2021 and September 30, 2017,2020, respectively. 


Liquidity

Liquidity

The following table sets forth a summary of our cash flows for the periods indicated:


  For the
Nine months ended
June 30,		 
  2021  2020  Increase/
(Decrease)		 
Net cash used in operating activities $(253,401) $(193,919) $59,482 
Net cash used in investing activities $—  $—  $— 
Net cash provided by financing activities $290,000  $180,500  $109,500 
 For the Three Months Ended December 31,
 2017 2016 Increase/(Decrease)
Net cash used in operating activities$(1,255,239) $(761,633) $(493,606)
Net cash provided by investing activities$—
 $—
 $—
Net cash provided by financing activities$—
 $2,007,500
 $(2,007,500)

Net Cash Used in Operating Activities

Cash

Net cash used in operating activities consists of net loss adjusted for the effect of changes in operating assets and liabilities.

Net cash used in operating activities was $1,255,239$253,401 for the threeNine months ended December 31, 2017June 30, 2021 compared to $761,633$193,919 for the threeNine months ended December 31, 2016.June 30, 2020.  The change is principally attributable to net loss of $2,003,451 excluding$561,812 for the Nine months ended June 30, 2021 was partially offset primarily by non-cash items such as share basedshare-based compensation of $224,982 , consultancy expense for warrants issued$41,094, interest accrued on the Convertible Loan Notes and the loan from Tiziana of $779,422$54,209, other expenses related to the convertible notes of $191,900 and changes in operating assets and liabilities of $258,067.$20,894. The net loss of $3,056,195 for the nine months ended June 30, 2020 was partially offset primarily by non-cash share based compensation of $114,375, a good will impairment charge of $2,722,985, interest accrued on the Convertible Loan Notes of $28,345 and changes in operating assets and liabilities of $4,655.

Net Cash Provided by Financing Activities



Cash

Net cash provided by financing activities consists of proceeds received from the saleissuance of sharesconvertible notes of common stock issued in a private placement to accredited investors. This was $0$190,000 for the threeNine months ended December 31, 2017June 30, 2021 compared to $2,007,500proceeds from the issuance of a convertible note of $108,500 and a related party loan payable of $72,000 for the threeNine months ended December 31, 2016.June 30, 2020.



Off-Balance Sheet Arrangements

We consolidate variable interest entities (“VIE”) in which we hold a controlling financial interest as evidenced by the power to direct the activities of a VIE that most significantly impact its economic performance and the obligation to absorb losses of, or the right to receive benefits from, the VIE that could potentially be significant to the VIE and therefore are deemed to be the primary beneficiary. We take into account our entire involvement in a VIE (explicit or implicit) in identifying variable interests that individually or in the aggregate could be significant enough to warrant our designation as the primary beneficiary and hence require us to consolidate the VIE or otherwise require us to make appropriate disclosures.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable

ITEM 4.3. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures


We maintain “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). This term refers to the controls and procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files under the Exchange Act is recorded, processed, summarized, and reported within the required time periods. In designing and evaluating our disclosure controls and procedures, our management recognized that disclosure controls and procedures, no matter how well conceived and



operated, can provide only reasonable, not absolute, assurance that the objectives of disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.


As of the end of the period covered by this Report, the Company’s Chief Executive Officer, and Chief Financial Officer (the “Certifying Officers”), evaluated the effectiveness of the Company’s “disclosure controls and procedures,” as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934. Based on that evaluation,  eachthe Chief Executive officer concluded that, as of the date of the evaluation, the Company’s disclosure controls and procedures were not effective to provide reasonable assurance that the information required to be disclosed in the Company’s periodic filings under the Securities Exchange Act of 1934 is accumulated and communicated to management to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting


There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and Rule 15d-15(f) under the Exchange Act) during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.







PART II – OTHER INFORMATION


ITEM 1A. RISK FACTORS

There have been no material changes from the risk factors disclosed in our Annual Report on Form 10-KT10-K as of and for the six monthsyear ended September 30, 2017.2020, filed with the SEC on February 15, 2021. 


ITEM 6. EXHIBITS


31.1*31.1 
Certification of Principal Executive Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002.
31.2*
Certification ofand Principal Financial and Accounting Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002.
32.1*32.1 
Certification of Principal Executive Officer Pursuant to Section 906 of Sarbanes-Oxley Act of 2002.
32.2*
Certification ofand Principal Financial Officer Pursuant to Section 906 of Sarbanes-Oxley Act of 2002.
101.INS*101.INS Inline XBRL Instance DocumentDocument.
101.SCH*101.SCH Inline XBRL Taxonomy Extension Schema DocumentDocument.
101.CAL*101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase DocumentDocument.
101.LAB*101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LABInline XBRL Taxonomy Extension Label Linkbase DocumentDocument.
101.PRE*101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase DocumentDocument.
101.DEF*104 Cover Page Interactive Data File (formatted as Inline XBRL Taxonomy Extension Definition Linkbaseand contained in Exhibit 101).

* Filed Herewith



Signatures

Signatures

Pursuant to the requirements of Section 13 or 15(d) 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.

 Rasna Therapeutics, Inc.
   
August 16, 2021By:
February 7, 2018By:/s/ Kunwar ShailubhaiKeeren Shah
  
Name: Kunwar Shailubhai
Title: Chief Executive Officer
Keeren Shah
  
Title:
February 7, 2018By:/s/ Tiziano Lazzaretti
Name: Tiziano Lazzaretti
Title: ChiefFinance Director, (Principal Executive Officer and Principal Financial Officer
and Accounting Officer)



19

33

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