UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 31, 20222023
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________________ to ________ __________
Commission file number: 000-55008
Organicell Regenerative Medicine, Inc.
(Exact Name of Registrant as Specified in Its Charter)
| Nevada | 47-4180540 | |
| (State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s Telephone Number, Including Area Code:(888) 963-7881
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| None | N/A | N/A |
Securities registered pursuant to Section 12(g) of the Act: Common Stock, $0.001 par value
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files.) Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “accelerated filer”, “large accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large Accelerated Filer | ☐ | Accelerated Filer | ☐ |
| Non-Accelerated Filer | ☒ | Smaller reporting company | ☒ |
| Emerging growth company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
There were shares of common stock, $0.001 par value, of the Registrant issued and outstanding as of March 16, 2022.2023.
ORGANICELL REGENERATIVE MEDICINE, INC.
TABLE OF CONTENTS
i
Part I – FINANCIAL INFORMATION
| Item 1. | Financial Statements |
Item 1. Financial Statements
Organicell Regenerative Medicine, Inc.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
| January 31, | October 31, | |||||||
| 2022 | 2021 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash | $ | 150,320 | $ | 108,570 | ||||
| Accounts receivable, net of allowance for bad debts | 114,013 | 104,150 | ||||||
| Prepaid expenses | 127,238 | 69,647 | ||||||
| Inventories | 156,375 | 234,827 | ||||||
| Total Current Assets | 547,946 | 517,194 | ||||||
| Property and equipment, net | 1,254,380 | 1,113,416 | ||||||
| Other assets – right of use | 226,525 | 254,665 | ||||||
| Security deposits | 50,282 | 47,682 | ||||||
| TOTAL ASSETS | $ | 2,079,133 | $ | 1,932,957 | ||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current Liabilities | ||||||||
| Accounts payable and accrued expenses | $ | 1,957,037 | $ | 1,873,022 | ||||
| Accrued liabilities to management | 1,730,196 | 1,542,130 | ||||||
| Notes payable | 94,392 | 4,392 | ||||||
| Advances payable | 220,897 | 220,897 | ||||||
| Finance lease obligations | 102,540 | 92,270 | ||||||
| Operating lease obligations | 118,061 | 114,231 | ||||||
| Deferred revenue | 0 | 9,575 | ||||||
| Debentures payable | 139,000 | 144,000 | ||||||
| Promissory Note, net of debt discount | 371,778 | 0 | ||||||
| Commitment Fee Shortfall Obligation | 89,000 | 0 | ||||||
| Liabilities attributable to discontinued operations | 125,851 | 125,851 | ||||||
| Total Current Liabilities | 4,948,752 | 4,126,368 | ||||||
| Long term finance lease obligations | 309,356 | 331,748 | ||||||
| Long term operating lease obligations | 108,464 | 140,434 | ||||||
| Total Liabilities | 5,366,572 | 4,598,550 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders’ Deficit | ||||||||
| Common stock, $ par value, shares authorized; and shares issued and outstanding, respectively | 1,149,205 | 1,132,361 | ||||||
| Additional paid-in capital | 38,881,841 | 37,826,795 | ||||||
| Accumulated deficit | (43,318,485 | ) | (41,624,749 | ) | ||||
| Total Stockholders’ Deficit | (3,287,439 | ) | (2,665,593 | ) | ||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | $ | 2,079,133 | $ | 1,932,957 | ||||
| The accompanying notes are an integral part of these consolidated financial statements. | ||||||||
Organicell Regenerative Medicine, Inc.
CONSOLIDATED BALANCE SHEETS
| January 31, 2023 (Unaudited) | October 31, 2022 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash | $ | 1,422,501 | $ | 3,753,097 | ||||
| Accounts receivable, net of allowance for bad debts | 106,895 | 55,110 | ||||||
| Receivables from related party | 118,939 | 128,939 | ||||||
| Other receivables | 8,000 | 7,433 | ||||||
| Prepaid expenses | 214,727 | 173,152 | ||||||
| Inventories | 281,344 | 248,510 | ||||||
| Funds held in escrow for share repurchase | 500,000 | - | ||||||
| Total Current Assets | 2,652,406 | 4,366,241 | ||||||
| Property and equipment, net | 1,543,833 | 1,683,516 | ||||||
| Other assets – right of use | 91,157 | 110,995 | ||||||
| Security deposits | 30,400 | 39,936 | ||||||
| TOTAL ASSETS | $ | 4,317,796 | $ | 6,200,688 | ||||
| LIABILITIES, SHARES SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ EQUITY | ||||||||
| Current Liabilities | ||||||||
| Accounts payable and accrued expenses | $ | 2,268,356 | $ | 2,378,531 | ||||
| Advances payable | 220,897 | 220,897 | ||||||
| Finance lease obligations | 124,525 | 143,748 | ||||||
| Operating lease obligations | 83,971 | 82,407 | ||||||
| Deferred revenue | 4,195 | - | ||||||
| Promissory Note, net of debt discount | - | 563,111 | ||||||
| Commitment Fee Shortfall Obligation | 223,847 | 174,462 | ||||||
| Commitment to repurchase shares in connection with settlement of litigation | 500,000 | 500,000 | ||||||
| Total Current Liabilities | 3,425,791 | 4,063,156 | ||||||
| Long term finance lease obligations | 207,808 | 220,340 | ||||||
| Long term operating lease obligations | 7,186 | 28,588 | ||||||
| Total Liabilities | 3,640,785 | 4,312,084 | ||||||
| Commitments and contingencies | ||||||||
| Shares Subject To Possible Redemption | ||||||||
| Series C Preferred Stock, $ par value, shares authorized; and shares issued and outstanding, respectively | - | - | ||||||
| Stockholders’ Equity | ||||||||
| Common stock, $ par value, shares authorized; and shares issued and outstanding, respectively | 1,488,757 | 1,479,126 | ||||||
| Additional paid-in capital | 51,996,216 | 50,930,784 | ||||||
| Accumulated deficit | (52,807,962 | ) | (50,521,306 | ) | ||||
| Total Stockholders’ Equity | 677,011 | 1,888,604 | ||||||
| TOTAL LIABILITIES, SHARES SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ EQUITY | $ | 4,317,796 | $ | 6,200,688 | ||||
The accompanying notes are an integral part of these consolidated financial statements.
1
Organicell Regenerative Medicine, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| Three Months Ended January 31, | ||||||||
| 2023 | 2022 | |||||||
| Revenues | $ | 1,070,219 | $ | 1,599,147 | ||||
| Cost of revenues | 104,313 | 149,120 | ||||||
| Gross profit | 965,906 | 1,450,027 | ||||||
| General and administrative expenses | 3,142,211 | 3,091,459 | ||||||
| Loss from operations | (2,176,305 | ) | (1,641,432 | ) | ||||
| Other income (expense) | ||||||||
| Interest expense | (60,966 | ) | (40,304 | ) | ||||
| Change in Commitment Fee Shortfall Obligation | (49,385 | ) | (12,000 | |||||
| Loss before taxes | (2,286,656 | ) | (1,693,736 | ) | ||||
| Provision for income taxes | - | - | ||||||
| Net loss | $ | (2,286,656 | ) | $ | (1,693,736 | ) | ||
| Net loss per common share - basic and diluted | $ | (0.00 | ) | $ | (0.00 | ) | ||
| Weighted average number of common shares outstanding - basic and diluted | 1,401,909,813 | 1,059,226,886 | ||||||
| Three Months Ended January 31, | ||||||||
| 2022 | 2021 | |||||||
| Revenues | $ | 1,599,147 | $ | 1,368,440 | ||||
| Cost of revenues | 149,120 | 168,171 | ||||||
| Gross profit | 1,450,027 | 1,200,269 | ||||||
| General and administrative expenses | 3,091,459 | 9,365,630 | ||||||
| Loss from operations | (1,641,432 | ) | (8,165,361 | ) | ||||
| Other income (expense) | ||||||||
| Interest expense | (40,304 | ) | (6,209 | ) | ||||
| Change in Commitment Fee Shortfall Obligation | (12,000 | ) | 0 | |||||
| Other | 0 | 21,565 | ||||||
| Loss before taxes | (1,693,736 | ) | (8,150,005 | ) | ||||
| Provision for income taxes | 0 | 0 | ||||||
| Net loss | $ | (1,693,736 | ) | $ | (8,150,005 | ) | ||
| Net loss per common share - basic and diluted | $ | (0.00 | ) | $ | (0.01 | ) | ||
| Weighted average number of common shares outstanding - basic and diluted | 1,059,226,886 | 966,563,218 | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
2
Organicell Regenerative Medicine, Inc.
CONSOLIDATED CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)
For the Three Months Ended January 31, 2023 and 2022
(Unaudited)
| Additional | Total Stockholders’ | |||||||||||||||||||
| Common Stock | Paid-In | Accumulated | Equity | |||||||||||||||||
| Shares | Par Value | Capital | Deficit | (Deficit) | ||||||||||||||||
| Balance October 31, 2021 | 1,132,361,005 | $ | 1,132,361 | $ | 37,826,795 | $ | (41,624,749 | ) | $ | (2,665,593 | ) | |||||||||
| Sale of common stock | 8,666,667 | 8,667 | 411,333 | - | 420,000 | |||||||||||||||
| Stock-based compensation | 5,100,000 | 5,100 | 523,790 | - | 528,890 | |||||||||||||||
| Common stock issued as commitment fee for Promissorry Note | 3,076,923 | 3,077 | 119,923 | - | 123,000 | |||||||||||||||
| Net loss | - | - | - | (1,693,736 | ) | (1,693,736 | ) | |||||||||||||
| Balance January 31, 2022 | 1,149,204,595 | $ | 1,149,205 | $ | 38,881,841 | $ | (43,318,485 | ) | $ | (3,287,439 | ) | |||||||||
| Balance October 31, 2022 | 1,479,126,390 | $ | 1,479,126 | $ | 50,930,784 | $ | (50,521,306 | ) | 1,888,604 | |||||||||||
| Sale of common stock | 4,456,328 | 4,456 | 95,544 | - | 100,000 | |||||||||||||||
| Stock-based compensation | 5,175,000 | 5,175 | 969,888 | - | 975,063 | |||||||||||||||
| Net loss | - | - | - | (2,286,656 | ) | (2,286,656 | ) | |||||||||||||
| Balance January 31, 2023 | 1,488,757,718 | $ | 1,488,757 | $ | 51,996,216 | $ | (52,807,962 | ) | $ | 677,011 | ||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
3
Organicell Regenerative Medicine, Inc.
| Additional | Total | |||||||||||||||||||
| Common Stock | Paid-In | Accumulated | Stockholders’ | |||||||||||||||||
| Shares | Par Value | Capital | Deficit | Deficit | ||||||||||||||||
| Balance October 31, 2020 | 939,942,783 | $ | 939,943 | $ | 26,536,430 | $ | (28,868,189 | ) | $ | (1,391,816 | ) | |||||||||
| Sale of common stock | 800,000 | 800 | 39,200 | - | 40,000 | |||||||||||||||
| Stock-based compensation | 69,390,000 | 69,390 | 6,554,315 | - | 6,623,705 | |||||||||||||||
| Net loss | - | - | - | (8,150,005 | ) | (8,150,005 | ) | |||||||||||||
| Balance January 31, 2021 | 1,010,132,783 | $ | 1,010,133 | $ | 33,129,945 | $ | (37,018,194 | ) | $ | (2,878,116 | ) | |||||||||
| Balance October 31, 2021 | 1,132,361,005 | $ | 1,132,361 | $ | 37,826,795 | $ | (41,624,749 | ) | (2,665,593 | ) | ||||||||||
| Sale of common stock | 8,666,667 | 8,667 | 411,333 | - | 420,000 | |||||||||||||||
| Stock-based compensation | 5,100,000 | 5,100 | 523,790 | - | 528,890 | |||||||||||||||
| Common stock issued as commitment fee for Promissory Note | 3,076,923 | 3,077 | 119,923 | - | 123,000 | |||||||||||||||
| Net loss | - | - | - | (1,693,736 | ) | (1,693,736 | ) | |||||||||||||
| Balance January 31, 2022 | 1,149,204,595 | $ | 1,149,205 | $ | 38,881,841 | $ | (43,318,485 | ) | $ | (3,287,439 | ) | |||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Three Months Ended January 31, | ||||||||
| 2023 | 2022 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net loss | $ | (2,286,656 | ) | $ | (1,693,736 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization expense | 155,800 | 14,170 | ||||||
| Amortization of OID and commitment fee discount – Promissory Note | 36,889 | 31,778 | ||||||
| Change in Commitment Fee Shortfall Obligation | 49,385 | 12,000 | ||||||
| Stock-based compensation | 975,063 | 528,890 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (51,785 | ) | (9,863 | ) | ||||
| Receivables from related party | 10,000 | - | ||||||
| Other receivables | (567 | ) | - | |||||
| Prepaid expenses | (41,575 | ) | (57,591 | ) | ||||
| Inventories | (32,834 | ) | 78,452 | |||||
| Accounts payable and accrued expenses | (110,175 | ) | 360,015 | |||||
| Accrued liabilities to management | - | 188,066 | ||||||
| Security deposits | 9,536 | (2,600 | ) | |||||
| Deferred revenue | 4,195 | (9,575 | ) | |||||
| Net cash used in operating activities | (1,282,724 | ) | (559,994 | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Purchase of fixed assets | (16,117 | ) | (155,134 | ) | ||||
| Net cash used in investing activities | (16,117 | ) | (155,134 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Proceeds from issuance of Promissory Note | - | 540,000 | ||||||
| Funds held in escrow for share repurchase | (500,000 | ) | - | |||||
| Payments on finance lease | (31,755 | ) | (12,122 | ) | ||||
| Repayments of notes payable | (600,000 | ) | (171,000 | ) | ||||
| Proceeds from sale of common stock | 100,000 | 400,000 | ||||||
| Net cash (used in) provided by financing activities | (1,031,755 | ) | 756,878 | |||||
| (Decrease) increase in cash | (2,330,596 | ) | 41,750 | |||||
| Cash at beginning of period | 3,753,097 | 108,570 | ||||||
| Cash at end of period | $ | 1,422,501 | $ | 150,320 | ||||
| SUPPLEMENTAL CASH FLOW INFORMATION: | ||||||||
| Cash paid for taxes | $ | - | $ | - | ||||
| Cash paid for interest | $ | 22,434 | $ | 11,307 | ||||
| NON-CASH INVESTING AND FINANCING TRANSACTIONS: | ||||||||
| OID discount on proceeds received from Promissory Note | $ | - | $ | 60,000 | ||||
| Stock purchased from payments due on accounts payable | $ | - | $ | 20,000 | ||||
| Common stock issued as commitment fee for Promissory Note | $ | - | $ | 123,000 | ||||
| Commitment Fee Shortfall Obligation | $ | - | $ | 77,000 | ||||
| Promissory note issued for past due Professional Fees | $ | - | $ | 256,000 | ||||
The accompanying notes are an integral part of these consolidated financial statements.
Organicell Regenerative Medicine, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Three Months Ended January 31, | ||||||||
| 2022 | 2021 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net loss | $ | (1,693,736 | ) | $ | (8,150,005 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation expense | 14,170 | 12,192 | ||||||
| Amortization of OID and commitment fee discount – Promissory Note | 31,778 | 0 | ||||||
| Change in Commitment Fee Shortfall Obligation | 12,000 | 0 | ||||||
| Stock-based compensation | 528,890 | 6,623,705 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (9,863 | ) | (29,905 | ) | ||||
| Prepaid expenses | (57,591 | ) | (1,515 | ) | ||||
| Inventories | 78,452 | (1,612 | ) | |||||
| Accounts payable and accrued expenses | 360,015 | 819,953 | ||||||
| Accrued liabilities to management | 188,066 | 247,404 | ||||||
| Security deposits | (2,600 | ) | (2,982 | ) | ||||
| Deferred revenue | (9,575 | ) | 0 | |||||
| Net cash used in operating activities | (559,994 | ) | (482,765 | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Purchase of fixed assets | (155,134 | ) | (46,264 | ) | ||||
| Net cash used in investing activities | (155,134 | ) | (46,264 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Proceeds from issuance of Promissory Note | 540,000 | 0 | ||||||
| Payments on finance lease | (12,122 | ) | (7,647 | ) | ||||
| Repayments of notes payable | (171,000 | ) | (27,307 | ) | ||||
| Proceeds from sale of common stock | 400,000 | 40,000 | ||||||
| Net cash provided by financing activities | 756,878 | 5,046 | ||||||
| Increase (decrease) in cash | 41,750 | (523,983 | ) | |||||
| Cash at beginning of period | 108,570 | 590,797 | ||||||
| Cash at end of period | $ | 150,320 | $ | 66,814 | ||||
| SUPPLEMENTAL CASH FLOW INFORMATION: | ||||||||
| Cash paid for taxes | $ | 0 | $ | 0 | ||||
| Cash paid for interest | $ | 11,307 | $ | 11,672 | ||||
| NON-CASH INVESTING AND FINANCING TRANSACTIONS: | ||||||||
| OID discount on proceeds received from Promissory Note | $ | 60,000 | $ | 0 | ||||
| Stock purchased from payments due on accounts payable | $ | 20,000 | $ | 0 | ||||
| Common stock issued as commitment fee for Promissory Note | $ | 123,000 | $ | 0 | ||||
| Commitment Fee Shortfall Obligation | $ | 77,000 | $ | 0 | ||||
| Promissory note issued for past due Professional Fees | $ | 256,000 | $ | 0 | ||||
4
ORGANICELL REGENERATIVE MEDICINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS
Organicell Regenerative Medicine, Inc. f/k/a Biotech Products Services and Research, Inc. (“Organicell” or the “Company”) was incorporated on August 9, 2011 in the State of Nevada. The Company is a clinical-stage biopharmaceutical company principally focusing on the development of innovative biological therapeutics for the treatment of degenerative diseases and to providethe provision of other related services. OurThe Company’s proprietary products are derived from perinatal sources and manufactured to retain the naturally occurring extracellular vesicles, hyaluronic acid, and proteins without the addition or combination of any other substance or diluent. Our proprietary products are principally used in the health care industry administered through doctors and clinics (collectively, “Providers”).
On May 21, 2018, the Company filed a Certificate of Amendment with the Secretary of State of Nevada to change the Company’s name from Biotech Products Services and Research, Inc. to Organicell Regenerative Medicine, Inc., effective June 20, 2018 (the “Name Change”) and during November 2021 the Name Change was effectuated in the marketplace by the Financial Industry Regulatory Agency.
For the three months ended January 31, 2022,2023, the Company principally operated through General Surgical of Florida, Inc., a Florida corporation and wholly owned subsidiary, which was formed to sell the Company’s therapeutic products to Providers.
The Company’s leading product, Zofin™ (also known as Organicell™OrganicellTM Flow), is an acellular, biologic therapeutic derived from perinatal sources and is manufactured to retain naturally occurring microRNAs, without the addition or combination of any other substance or diluent.
In June 2021, the Company announced that it was launching a service platform for its first autologous product called Patient Pure X™ (PPX™XTM (PPXTM). PPX™PPXTM is a non-manipulated biologic containing the nanoparticle fraction from a patient’s own peripheral blood. The Company began to accept minimal orders for this service sincein October 2021.
In November 2020, the Company formed Livin’ Again Inc., a wholly owned subsidiary, for the purpose of among other things, providing independent education, advertising2021 and marketing services, to Providers that provide medical and other healthcare, anti-aging and regenerative services. including FDA-approved IV vitamin and mineral liquid infusions (“IV Drip Therapies”). To date there has been no significant activity and the Company has no timetable, if any, asrevenues from PPXTM continue to when IV Drip Therapies revenues will commence.be immaterial.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The unaudited consolidated financial statements include the accounts of the Company and its wholly-owned and majority-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated.
Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to the rules and regulations of the Securities Exchange Commission, although we believe that the disclosures made are adequate to make the information not misleading. These unaudited consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended October 31, 20212022 filed with the Securities and Exchange Commission.
Concentrations of Credit Risk
The balance sheet items that potentially subject us to concentrations of credit risk are primarily cash and cash equivalents.equivalents and accounts receivable. Balances in accounts are insured up to Federal Deposit Insurance Corporation (“FDIC”) limits of $250,000 per institution. At January 31, 2022,2023, the Company did not holdheld $1,152,448 of cash balances in anyone financial institution in excess of FDIC insurance coverage limits.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles of the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the year. Management bases its estimates on historical experience and on other assumptions considered to be reasonable under the circumstances. However, actual results may differ from the estimates.
5
ORGANICELL REGENERATIVE MEDICINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Cash Equivalents
The Company considers all highly liquid investments with maturities of three months or less when purchased to be cash equivalents.
Accounts Receivable
Accounts receivable are recorded at net realizable value on the date revenue is recognized. The Company provides allowances for doubtful accounts for estimated losses resulting from the inability of its customers to pay their obligation. If the financial condition of the Company’s customers were to deteriorate, resulting in an impairment of their ability to repay, additional allowances may be required. The Company provides for potential uncollectible accounts receivable based on specific customer identification and historical collection experience adjusted for existing market conditions.
The policy for determining past due status is based on the contractual payment terms of each customer, which are generally net 30 or net 60 days. Once collection efforts by the Company and its collection agency are exhausted, the determination for charging off uncollectible receivables is made. For the three months ended January 31, 20222023 and 2021,2022, the Company did 0not record any bad debt expense.
Stock Subscriptions Receivable
Stock subscriptions receivable for equity investments in the Company are classified as current assets once a fully executed stock subscription agreement is received and provided that the receivable is collected prior to the issuance of the financial statements. In the event that the Company receives a fully executed stock subscription agreement but the receivable is not collected prior to the issuance of the financial statements, the receivable is classified as a direct reduction to stockholders’ equity. At January 31, 2022 and October 31, 2021, there were stock subscriptions receivable outstanding.
Inventory
Inventory is stated at the lower of cost or net realizable value using the average cost method. The Company provides reserves for potential excess, dated or obsolete inventories based on an analysis of forecasted demand compared to quantities on hand and any firm purchase orders, as well as product shelf life. At January 31, 20222023 and October 31, 2021,2022, the Company determined that there were not any reserves required in connection with our inventory.
Property and Equipment
Property and equipment are stated at cost. Depreciation and amortization are provided using the straight-line method over the estimated useful lives of the related assets. The estimated useful lives of property and equipment range from 3 to 15 years. Upon sale or retirement, the cost and related accumulated depreciation and amortization are eliminated from their respective accounts, and the resulting gain or loss is included in results of operations. Repairs and maintenance charges, which do not increase the useful lives of the assets, are charged to operations as incurred.
Construction in Progress
Leasehold Improvements
The cost
Leasehold improvements in excess of all projects under construction for new laboratory facilities$1,000 that are made in connection with leases having a term of more than 12 months are capitalized by the Company and otheramortized over the shorter of the useful life of the asset or the remaining lease periods and renewals that are deemed to be reasonably certain at the date the leasehold improvements are purchased. Costs associated with leasehold improvements that do not exceed $1,000are in progress (under way) at a particular point in time and have not yet been placed into service are reportedexpensed as construction in progress until such time as the project is complete.incurred.
Revenue Recognition
The Company follows the guidance of FASB Accounting Standards Update (“ASU”) Topic 606 “Revenue from Contracts with Customers” which requires the Company to recognize revenue in amounts that reflect the prorata completion of the performance obligations of the Company required under the contracts.
ORGANICELL REGENERATIVE MEDICINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The Company recognizes revenue only when it transfers control of a promised good or service to a customer in an amount that reflects the consideration it expects to receive in exchange for the good or service. Our performance obligations are satisfied and control is transferred at a point-in-time, which is typically when the transfer and title to the product sold has taken place and there is evidence of our customer’s satisfactory acceptance of the product shipment or delivery except in those instances when the customer has made prior arrangements with the Company to store the product purchased by the customer at the Company’s facilities that is to be delivered at a later date to be designated by the customer.
6
Basic income (loss) per common share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of fully vested common shares outstanding during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of fully vested shares outstanding during the period.year. The diluted weighted average number of shares outstanding is the basic weighted average number of shares adjusted for any potentially dilutive debt or equity instruments.
At January 31, 2023, the Company had common shares issuable upon the exercise of warrants that were not included in the computation of dilutive loss per share because their inclusion is anti-dilutive for the three months ended January 31, 2023. At January 31, 2022, the Company had common shares issuable upon the exercise of warrants and unpaid Original Base Salary and Incremental Salary that could be convertible into approximately 39,836,000 common shares that were not included in the computation of dilutive loss per share because their inclusion is anti-dilutive for the three months ended January 31, 2022. At January 31, 2021, the Company had common shares issuable upon the exercise of warrants and unpaid Original Base Salary and Incremental Salary that could be convertible into approximately 34,143,000 common shares that were not included in the computation of dilutive loss per share because their inclusion is anti-dilutive for the three months ended January 31, 2021.
All stock-based payments are recognized in the financial statements based on their fair values.
Research and Development Costs
Research and development costs consist of direct and indirect costs associated with the development of the Company’s technologies. These costs are expensed as incurred. Our research and development expenses were approximately $276,300194,700 and $661,900276,300 for the three months ended January 31, 20222023 and 2021,2022, respectively. The research and development costs primarily relate to the filing and approval of IND applications and the performance of clinical trials.
Income Taxes
The Company is required to filefiles a consolidated tax return that includes all of its subsidiaries.
Provisions for income taxes are based on taxes payable or refundable for the current year taxable income for federal and state income tax reporting purposes and deferred income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss carryforwards. Deferred income tax expense represents the change during the period in the deferred tax assets and deferred tax liabilities. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of the operations in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some or all of the deferred tax assets will not be realized.
The Company accounts for uncertain tax positions in accordance with FASB Topic 740 – Income Taxes. This pronouncement prescribes a recognition threshold and measurement process for financial statement recognition of uncertain tax positions taken or expected to be taken in a tax return. The interpretation also provides guidance on recognition, derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition.
ORGANICELL REGENERATIVE MEDICINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
For the three months ended January 31, 20222023 and 20212022 the Company incurred operating losses, and therefore, there was not any income tax expense amount recorded during that period.those periods. There is a full valuation allowance established for the tax benefit associated with the net losses for the three months ended January 31, 20222023 and 2021.2022.
7
Valuation of Derivatives
The Company evaluates its convertible instruments, options, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under ASC Topic 815, “Derivatives and Hedging.” The result of this accounting treatment is that the fair value of the derivative is marked-to-market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations as other income (expense). Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. Equity instruments that are initially classified as equity that become subject to reclassification under ASC Topic 815 are reclassified to liabilities at the fair value of the instrument on the reclassification date.
Sequencing
The Company has adopted a sequencing policy whereby, in the event that reclassification of contracts from equity to assets or liabilities is necessary pursuant to ASC 815 due to the Company’s inability to demonstrate it has sufficient authorized shares, shares will be allocated on the basis of the earliest issuance date of potentially dilutive instruments, with the earliest grants receiving the first allocation of shares.
The Company currently has authorized shares of common stock of which shares are issued and outstanding as of March 16, 2022.2023. The Company expects that it will continue to issue common stock in the future in connection with debt and/or equity financings, transactions with third parties, performance incentives and as compensation to its employees. Currently the amount of authorized shares is sufficient to provide for the additional shares that the Company may be contingently obligated to issue under existing arrangements.
Fair Value of Financial Instruments
The Company includes fair value information in the notes to financial statements when the fair value of its financial instruments is different from the book value. When the book value approximates fair value, no additional disclosure is made.
The Company follows FASB ASC 820, Fair Value Measurements and Disclosures, which defines fair value, establishes a framework for measuring fair value and enhances disclosures about fair value measurements. It defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company’s financial instruments consist of cash and cash equivalents, accounts payable, accrued liabilities and convertible debt. The estimated fair value of cash, accounts payable and accrued liabilities approximate their carrying amounts due to the short-term nature of these instruments.
The Company follows the provisions of ASC 820 with respect to its financial instruments. As required by ASC 820, assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to their fair value measurement.
Level one — Quoted market prices in active markets for identical assets or liabilities;
Level two — Inputs other than level one inputs that are either directly or indirectly observable such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and
Level three — Unobservable inputs that are supported by little or no market activity and developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use.
The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.
ORGANICELL REGENERATIVE MEDICINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosures each quarter.
The Company did not have any convertible instruments outstanding at January 31, 20222023 and October 31, 20212022 that qualify as derivatives.
8
Operating Lease Obligations
Under the provisions of Accounting Standards Update (ASU) No. 2016-02 (Topic 842) (“ASC 842”), the Company recognizes a right of use (“ROU”) asset and corresponding lease liability for all operating leases upon commencement of the lease. The Company applies the modified retrospective approach which includes a number of optional practical expedients on leases that commenced before the effective date of ASC 842, including continuing to account for leases that commenced before the effective date in accordance with previous guidance, unless the lease is modified and the inclusion of amounts pertaining to the maintenance portion of the leased assets.
The Company’s policy is to treat operating leases that have a term of one year or less at lease commencement date and do not include a purchase option that is reasonably certain of exercise, consistent with the lease recognition approach as previously outlined under ASC 840. In addition, month to month leases which do not involve additional financial commitments on the part of the Company are also treated consistent with the lease recognition approach as previously outlined under ASC 840. The Company has established a capitalization threshold of $15,000 in determining whether any future operating leases will be capitalized.
Subsequent Events
The Company has evaluated subsequent events that occurred after January 31, 20222023 through the financial statement issuance date for subsequent event disclosure consideration.
NOTE 3 – GOING CONCERN
The accompanying unaudited accompanying consolidated financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. The Company has had limited revenues since its inception. The Company incurred operatingnet losses of $1,641,4322,176,3052,286,656 for the three months ended January 31, 2022.2023. In addition, the Company had an accumulated deficit of $43,318,48552,807,962 at January 31, 2022.2023. The Company had a negative working capital positiondeficit of $4,400,806773,385 at January 31, 2022.2023.
New United States Food and Drug Administration (“FDA”) regulations which were announced in November 2017 and which became effective beginning in May 2021 (postponed from November 2020 due to the COVID-19 pandemic) require that the sale of products that fall under Section 351 of the Public Health Services Act pertaining to marketing traditional biologics and human cells, tissues and cellular and tissue based products (“HCT/Ps”) can only be sold pursuant to an approved biologics license application (“BLA”). The Company has not obtained any opinion or ruling regarding the Company’s operations and whether the processing, sales and distribution of the products it currently produces would be subject to the FDA’s previously announced intended enforcement policies regarding HCT/P’s.
In addition to the above, the adverse public health developments and economic effects ofassociated with the ongoing COVID-19 pandemic combined with the downturn in the overall United States and global economies have adversely affected the demand for our products and services by our customers and from patients of our customers as a result of quarantines, facility closures and social distancing measures put into effect in connection with the COVID-19 outbreak and which currently still continue to have a negative impact to our business and the economy.
ORGANICELL REGENERATIVE MEDICINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
As a result of the above, the Company’s efforts to establish a stabilized source of sufficient revenues to cover operating costs has yet to be achieved and ultimately may prove to be unsuccessful unless (a) the Company’s ability to process, sell and distribute the products currently being produced or developed in the future are not restricted,restricted; (b) the United States economy resumesreturns to pre-COVID-19 conditionsconditions; and/or (c) additional sources of working capital through operations or debt and/or equity financings are realized. These financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
Management anticipates that the Company will remain dependent, for the near future, on additional investment capital to fund ongoing operating expenses and research and development costs related to development of new products and to perform required clinical studies in connection with the sale of its products. The Company does not have any assets to pledge for the purpose of borrowing additional capital. In addition, the Company relies on its ability to produce and sell products it manufactures that are subject to changing technology and regulations that it currently sells and distributes to its customers. The Company’s current market capitalization, common stock liquidity and available authorized shares may hinder its ability to raise equity proceeds. The Company anticipates that future sources of funding, if any, will therefore be costly and dilutive, if available at all.
9
In view of the matters described in the preceding paragraphs, recoverability of the recorded asset amounts shown in the accompanying consolidated balance sheet assumes that (1)(a) the Company is able to continue to produce products or obtain products under supply arrangements which are in compliance with current and future regulatory guidelines, (2)guidelines; (b) the effects of the COVID-19 crisis resumeUnited States economy returns to pre-COVID-19 market conditions, (3)conditions; (c) the Company will be able to establish a stabilized source of revenues, including efforts to expand sales internationally and the development of new product offerings and/or designations of products, (4)products; (d) obligations to the Company’s creditors are not accelerated, (5)accelerated; (e) the Company’s operating expenses remain at current levels and/or the Company is successful in restructuring and/or deferring ongoing obligations, (6)obligations; (f) the Company is able to continue its research and development activities, particularly in regards to remaining compliant with the FDA and ongoing safety and efficacy of its products,products; and/or (7)(g) the Company obtains additional working capital to meet its contractual commitments and maintain the current level of Company operations through debt or equity sources.
There is no assurance as to when the adverse impact to the United States and worldwide economies resulting from the COVID-19 outbreak will be eliminated, if at all, and whether any new or recurring pandemic outbreaks will occur again in the future causing similar or worse devastating impact to the United States and worldwide economies and our business. In addition, there is no assurance that the products we currently produce will not be subject to the FDA’s previously announced intended enforcement policies regarding HCT/P’s and/or the Company will be able to complete its revenue growth strategy. There is no assurance that the Company’s research and development activities will be successful or that the Company will be able to timely fund the required costs of those activities. Without sufficient cash reserves, the Company’s ability to pursue growth objectives will be adversely impacted. Furthermore, despite significant effort since July 2015, the Company has thus far been unsuccessful in achieving a stabilized source of revenues. As described above, the COVID-19 crisis has significantly impaired the Company and the overall United States and World economies.
If revenues do not increase and stabilize, if the COVID-19 crisis is not satisfactorily managed and/or resolved, if the Company’s ability to process, sell and/or distribute the products currently being produced or developed in the future are restricted, and/or if additional funds cannot otherwise be raised, the Company might be required to seek other alternatives which could include the sale of assets, closure of operations and/or protection under the U.S. bankruptcy laws. As of January 31, 2022,2023, based on the factors described above, the Company concluded that there was substantial doubt about its ability to continue to operate as a going concern for the 12 months following the issuance of these financial statements.
NOTE 4 – INVENTORIES
| Schedule of Inventories | ||||||||
| January 31, 2022 | October 31, 2021 | |||||||
| Raw materials and supplies | $ | 65,946 | $ | 92,601 | ||||
| Finished goods | 90,429 | 142,226 | ||||||
| Total inventories | $ | 156,375 | $ | 234,827 | ||||
10
ORGANICELL REGENERATIVE MEDICINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
| Schedule of Inventories | ||||||||
| January 31, 2023 | October 31, 2022 | |||||||
| Raw materials and supplies | $ | 69,703 | $ | 85,096 | ||||
| Finished goods | 211,641 | 163,414 | ||||||
| Total inventories | $ | 281,344 | $ | 248,510 | ||||
NOTE 5 -– PROPERTY AND EQUIPMENT
| Schedule of Property and Equipment | ||||||||
| January 31, 2022 | October 31, 2021 | |||||||
| Computer equipment | $ | 13,541 | $ | 10,684 | ||||
| Finance lease equipment | 544,378 | 544,378 | ||||||
| Manufacturing equipment | 309,299 | 258,791 | ||||||
| 867,218 | 813,853 | |||||||
| Less: accumulated depreciation | (121,316 | ) | (107,146 | ) | ||||
| 745,902 | 706,707 | |||||||
| Construction in progress: | ||||||||
| Leasehold improvements | 508,478 | 406,709 | ||||||
| Total property and equipment, net | $ | 1,254,380 | $ | 1,113,416 | ||||
| Schedule of Property and Equipment | ||||||||
| January 31, 2023 | October 31, 2022 | |||||||
| Computer equipment | $ | 29,021 | $ | 26,881 | ||||
| Finance lease equipment | 544,378 | 544,378 | ||||||
| Manufacturing equipment | 639,956 | 625,979 | ||||||
| Leasehold improvements | 925,932 | 925,932 | ||||||
| 2,139,287 | 2,123,170 | |||||||
| Less: accumulated depreciation and amortization | (595,454 | ) | (439,654 | ) | ||||
| Total property and equipment, net | $ | 1,543,833 | $ | 1,683,516 | ||||
Depreciation expense totaled $14,17029,143 and $12,19214,170 for the three months ended January 31, 2023 and 2022, and 2021, respectively.
As described in Note 6, during the year ended October 31, 2021, the Company began the build-out of additional laboratory processing, product distribution and administrative office capacity at its Basalt Lab Lease location. The total costs incurred as of January 31,Basalt Lab Lease location became operational during May 2022 were $508,478and are reflected as construction in progress. Amortizationamortization of these costs will begin oncebegan during May 2022. Amortization expense totaled $126,657 and $0 for the build-out is completethree months ended January 31, 2023 and the facility becomes operational.2022, respectively.
10
NOTE 6 – LEASE OBLIGATIONS
Finance Lease Obligations:
During March 2019, the Company entered into a lease agreement for certain lab equipment in the amount of $239,595. Under the terms of the lease agreement, the Company is required to make 60 equal monthly payments of $4,513 plus applicable sales taxes. Under the Lease Agreement, the Company has the right to acquire all of the leased equipment for $1.00. As a result, the lease agreement is being accounted for as a finance lease obligation. The annual interest rate charged in connection with the lease is 4.5%. The leased equipment are being depreciated over their estimated useful lives of 15 years.
During October 2021, the Company entered into a second lease agreement in the amount of $304,873 for certain lab equipment that is being installed at the Basalt lab location. Under the terms of the lease agreement, the Company is required to make 60 equal monthly payments of $5,478 plus applicable sales taxes. Under the Lease Agreement, the Company has the right to acquire all of the leased equipment for $1.00. As a result, the lease agreement is being accounted for as a finance lease obligation. The annual interest rate charged in connection with the lease is 3.0%. Lease payments and depreciation of the leased equipment has not commenced pending completion ofbegan during May 2022, the date that the Basalt lab buildout was completed (see below) and the facility becomesbecame operational. The leased equipment will beare being depreciated over their estimated useful lives of 15 years.
Operating Lease Obligations:
Administrative Office
The Company’s corporate administrative offices are leased from MariLuna, LLC, a Florida limited liability company which is owned by Dr. Mitrani. During July 2020, the Company entered into an extension of the operating lease agreement. The lease term is for an additional 36 months beginning July 1, 2020 and expiring JuneOn August 30, 2023, with a monthly rental rate of $3,500. On July 1, 2020, in connection with the adoption of ASC 842, the Company recorded a ROU asset and corresponding operating lease obligation of $117,659 (present value of the associated leased payments based on an assumed borrowing rate of 4.5%).
Lease amortization expense for the three months ended January 31, 2022, and 2021 was $9,779 and $9,350, respectively.
Beginning October 1, 2020, the Company entered into a secondone-year lease agreement with Mariluna LLC(“LA Office Lease”) for office space located in Aspen, CO.Los Angeles, California commencing September 1, 2022 and ending August 31, 2023. The initial term of the leaseCompany was for one year, expiring on September 30, 2021 and the lease has been subsequently extended on a month to month basis. Under the terms of the lease, the Company is required to make monthly rental paymentsa one-time prepayment of the annual rent in the amount of $6,500160,000 and was required to provide a security deposit of $11,00010,000 upon execution of the lease agreement.
ORGANICELL REGENERATIVE MEDICINE, INC. The lease is non-renewable.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Laboratory Facilities:
In connection with the Company’s decision to again operate a placental tissue bank processing laboratory in Miami, Florida, during February 2019,Effective July 1, 2022, the Company entered into a renewable month to monthsix-month lease agreement (“Miami Lab Lease”) for an approximately 450 square foot laboratory and a 100 square footadditional administrative office facility.space effective July 1, 2022 (“New Miami Lab Lease”). Monthly lease payments are approximately $5,2009,500 per month plus administrative fees and taxes. In connection with theThe New Miami Lab Lease thewas not renewed and expired on December 31, 2022. The Company was required to post a security deposit of $6,332. From November 2020 through May 31, 2021, was returned upon expiration of the New Miami Lab Lease.
Effective October 10, 2022, the Company entered into an additional monthrelocated its Miami laboratory to month leasea 1,156 square foot administrative and laboratory facility at the Nova Southeastern University Center for Collaborative Research in Davie, Florida. This space is occupied pursuant to one year license agreement in the same facility as the Miami Lab Lease(“University Lease”) for an additional 390 square foot laboratory. Monthly lease payments were approximatelyannual base license fee of $4,40020,230 plus administrative fees and taxes..
During March 2021, the Company entered into a lease agreement for an approximately 2,452 square foot commercial space located in Basalt, Colorado (the “Basalt Lab Lease”). The Company intends to build additional laboratory processing, product distribution and administrative office capacity from this location. The term of the Basalt Lab Lease is for three years and may be renewed for an additional (3) three-year term provided the Company is not in default.default (“First Renewal Option”). Rental expense is $6,800 per month and provides for annual increases of 3% or the Denver Aurora Metropolitan CPI index, whichever is greater. In connection with the Basalt Lab Lease, the Company was required to post a security deposit of $13,600. The Company is currently constructingcompleted the construction of the initial laboratory and office build-out at an estimateda cost of $600,000925,932. The Company expectsBasalt Lab Lease location became operational during May 2022.
In connection with the construction to be completed duringexecution of the quarter ended April 30, 2022. TheBasalt Lab Lease, the Company has recorded a ROU asset and corresponding operating lease obligation of $235,313 (present value of the associated leased payments based on an assumed borrowing rate of 4.5%).
Lease amortization expense for the three months ended January 31, 2023 and 2022 was $19,838 and $18,361., respectively.
11
NOTE 7 – RELATED PARTY TRANSACTIONS
The Company’s corporate administrative offices are leased from MariLuna, LLC, a Florida limited liability company which is owned by Dr. Mitrani. The term of the lease expires in June 2023. Monthly rent is $3,500. The Company paid a security deposit of $5,000. Total rent expense forFor the three months ended January 31, 20222023 and 2021 was $10,500.
Beginning October 1, 2020, the Company entered into a second lease agreement with Mariluna LLC for office space located in Aspen, CO. The initial term of the lease was for one year, expiring on September 30, 2021 and the lease has been subsequently extended on a month to month basis. Under the terms of the lease, the Company is required to make monthly rental payments of $6,500 and was required to provide a security deposit of $11,000 upon execution of the lease agreement. Total rent expense for the three months ended January 31, 2022 and 2021 was $19,500.
In connection with Mr. Bothwell’s executive employment agreements, the Company agreed to reimburse Rover Advanced Technologies, LLC, a company owned and controlled by Mr. Bothwell for office rent and other direct expenses (phone, internet, copier and direct administrative fees, etc.) totaling $9,834 and $8,270 for the three months ended January 31, 2022 and 2021, respectively.
For the three months ended January 31, 2022, the Company sold a total of approximately $25,230 and $79,700, respectively, of productsproduct to a management services organization (“MSO”) that provides administrative services and contracts for medical supplies for several medical practices, including $25,230 and $22,740, respectively, of products purchased from the Company that were attributable to the medical practice owned by Dr. George Shapiro.Shapiro the Company’s Chief Medical Officer and a member of the board of directors. Dr. Shapiro also has an indirect economic interest in the parent company that owns the MSO. For the three months ended January 31, 2022, the total amount of sales of products to customers related to Mr. Michael Carbonara totaled $8,160.
At January 31, 2022, salary amounts owed to Albert Mitrani, Dr. Mari Mitrani and Ian Bothwell were $321,293, $408,455 and $919,428, respectively and consulting fees owed to Dr. George Shapiro were $81,000.
ORGANICELL REGENERATIVE MEDICINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 8 -– ACCOUNTS PAYABLE AND ACCRUED EXPENSES
| Schedule of account payable and accrued expenses | ||||||||
| January 31, 2023 | October 31, 2022 | |||||||
| Accrued payroll related liabilities | $ | 666,780 | $ | 666,780 | ||||
| Lab equipment and supplies payables | 463,123 | 477,255 | ||||||
| Clinical trial payables | 462,927 | 312,711 | ||||||
| Legal fees payables | 204,049 | 328,121 | ||||||
| Other professional fees payables | 153,177 | 90,993 | ||||||
| Accrued IRS penalty | 83,684 | 83,684 | ||||||
| Accrued commissions payable | 29,628 | 39,675 | ||||||
| Construction payables | 9,317 | 5,474 | ||||||
| Other payables and accrued expenses | 195,671 | 373,838 | ||||||
| Accounts Payable and Accrued Expenses | $ | 2,268,356 | $ | 2,378,531 | ||||
NOTE 9 – NOTES PAYABLE
Notes Payable
Debentures
On June 20, 2018, the Company issued a total of $150,000 of convertible 6% debentures (“150,000 Debentures”) to an accredited investor. The principal amount of the $150,000 Debentures, plus accrued and unpaid interest through June 30, 2019 were payable on the 10th business day subsequent to June 30, 2019, unless the payment of the $150,000 Debentures were prepaid at the sole option of the Company, were converted as provided for under the terms of the $150,000 Debentures, and/or accelerated due to an event of default in accordance with the terms of the $150,000 Debentures. Interest on the $150,000 Debentures for each calendar quarter ended beginning with the quarter ended June 30, 2018 is payable on the 10th business day following the immediately prior calendar quarter. The $150,000 Debentures were not repaid as required. At January 31, 2022, the principal balance of the $150,000 Debentures outstanding was $139,000 and accrued and unpaid interest was $695.
Unsecured Promissory Note For Professional Fees Owed
On January 24, 2022, the Company reached an agreement with a professional firm in connection with unpaid legal services owing as of December 31, 2021 in the amount of $278,340 (“Unpaid Professional Fees”). In connection with the agreement, the Company issued the professional firm a promissory note in the amount of $256,000 of which the Company was required to make a cash payment of $166,000 by January 25, 2022 and twelve monthly payments of $7,500 beginning February 28, 2022. If the Company makes all payments as required under the promissory note, then the Company will receive a discount of $22,340, representing the remaining balance of the Professional Fees outstanding from the December 31, 2021 balances after all payments of the promissory note are applied. As of March 16, 2022, the Company has made all required payments due in connection with the promissory note.
Unsecured Promissory Note
On February 5, 2019, the Company entered into an unsecured loan agreement with a third party with a principal balance of $25,000. The outstanding principal was due March 8, 2019. The loan was not repaid on the maturity date as required. The third party subsequently agreed to apply amounts due for invoices due from third party for future purchases of the Company products to the extent of the outstanding balances owed by the Company in connection with the loan (interest and principal). As of January 31, 2022 and October 31, 2021, the remaining amount due under this arrangement was approximately $4,392.
Promissory Note -– SPA 22
On January 11, 2022, the Company entered into a Securities Purchase Agreement (“SPA”SPA 22”) with AJB Capital Investments, LLC (“Purchaser”) pursuant to which we sold a promissory note in the principal amount of $600,000 (“Promissory Note”) to the Purchaser in a private transaction for a purchase price of $540,000 (giving effect to original issue discount of $60,000). The Promissory Note matured on January 11, 2023 and the Promissory Note was paid in full.
Pursuant to the terms of the SPA 22, the Company paid a commitment fee to the Purchaser in the amount of $123,000 (“Initial Commitment Fee”) in the form of shares of the Company’s common stock (“Initial Commitment Fee Shares”) valued at $, the closing price of the common stock of the Company on the closing date. In addition, in connection with the Extension, the Company paid an additional commitment fee to the Purchaser in the amount of $33,231 in the form of an additional shares of its common stock (“Additional Commitment Fee Shares,” and together with the Initial Commitment Fee Shares, collectively, “Commitment Fee Shares”) valued at $, the closing price of the common stock of the Company on the Extension date.
In the event that by the earlier of the first anniversary of repayment of the Promissory Note by the Company or the date that the Purchaser has sold all of the Commitment Fee Shares (“True-Up Date”), the Purchaser has not generated the amount of $300,000 from public sales of the Commitment Fee Shares, the Company shall either pay the amount of any such shortfall either (i) by issuing additional shares of our common stock at a price equal to the VWAP for the common stock during the five (5) trading day period prior to the True-up Date (“Conversion Price”); or (ii) in cash, in which case, the Company shall repurchase any unsold Commitment Fee Shares then held by the Purchaser for such shortfall amount (“Commitment Fee Shortfall Obligation”).
12
Upon the closing, the Company recorded a discount of the Promissory Note in the amount of $260,000, consisting of the original issue discount of $60,000, the fair value of the Initial Commitment Fee Shares of $123,000 and the Commitment Fee Shortfall Obligation of $77,000. These costs were fully amortized over the initial term of the Promissory Note from January 11, 2022 to July 11, 2022. In connection with the extension of the Promissory Note from July 12, 2022 to January 11, 2023, the Company recorded a discount of the Promissory Note in the amount of $100,000, consisting of the fair value of the Additional Commitment Fee Shares of $33,231 and the Additional Commitment Fee Shortfall Obligation of $66,769. These costs were amortized over the term of the Extension.
For the three months ended January 31, 2023 and 2022, $36,889 and $31,778, respectively, of the total discounts recorded in connection with the issuance of the Promissory Note have been amortized.
At January 31, 2023 and 2022, the fair value of the Commitment Fee Shares was approximately $223,846 (valued at $0.0165 the closing price of the common stock of the Company on January 31, 2023) and approximately $111,000 (valued at $0.036 the closing price of the common stock of the Company on January 31, 2022), respectively. As a result, the Company has recorded an increase in the Commitment Fee Shortfall Obligation in the amount of $49,38549,384 and $12,000 for the three months ended January 31, 2023 and 2022, respectively. The total Commitment Fee Shortfall Obligation at January 31, 2023 and 2022 was $223,847223,846 and $89,000, respectively.
On February 10, 2023, the Company received a notice from the Purchaser that it had sold all of the Commitment Fee Shares and that the Commitment Fee Shortfall Obligation of $187,519 was due (a reduction of $36,327 from the Commitment Fee Shortfall Obligation recorded as of January 31, 2023). The Company elected to satisfy the obligation through the issuance of shares of common stock based on a Conversion Price as defined in the SPA 22 of $0.016 per share.
Promissory Note – SPA 23
On March 6, 2023, the Company entered into another Securities Purchase Agreement (“SPA 23”) with the Purchaser, pursuant to which we sold a promissory note in the principal amount of $530,000 (“Note”) to the Purchaser in a private transaction to for a purchase price of $519,400 (giving effect to original issue discount of $10,600). In connection with the sale of the Promissory Note, the Company also paid the Purchaser’s legal fees and due diligence costs of $12,50015,000 and brokerage fees of $9,000 to J.H. Darbie & Co., a registered broker-dealer which were expensed during the three months ended January 31, 2022. After payment of the legal fees and brokerage fees, theresulting in net proceeds to the Company wereof $518,500504,400, which will be used for working capital and other general corporate purposes.
The Promissory Note matures on July 11, 2022, subject to extension at the option of the Company for up to an additional six month period,September 6, 2023, bears interest at the a rate of 1012% per annum for the first six months, payable monthly, and 12% per annum thereafter, payable monthly, if extended, and only following an event of default (as defined in the Note), is convertible into shares of the Company’s common stock at a conversion price equal to the lower of the “VWAP” (as hereinafter defined) of the common stock during (i) the twenty (20)ten (10) trading day period preceding the issuance date of the Note; or (ii) the twenty (20)ten (10) trading day period preceding the date of conversion of the Promissory Note.Note (the “Conversion Shares”). As used in the Promissory Note, “VWAP” means, for any date, the price of our common stock as determined by the first of the following clauses that applies: (i) if the common stock is then listed or quoted on one or more established stock exchanges or national market systems, the daily volume weighted average price of the common stock for such date on the trading market on which the common stock is then listed or quoted as reported by Bloomberg L.P.; or (ii) if the common stock is regularly quoted on an automated quotation system (including applicable tiers of the over-the-counter market maintained by OTC MarketMarkets Group, Inc.) or by a recognized securities dealer, the volume weighted average price of the common stock for such date on the applicable OTC Markets Group, Inc. tier or as quoted by such securities dealer. In accordance with the terms of the SPA 23, as of January 11, 2022,March 6, 2023, the Company has reserved shares of its authorized but unissued common stock for issuance in the event the Purchaser exercises its right to convert the Promissory Note following an event of default.
ORGANICELL REGENERATIVE MEDICINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The Promissory Note may be prepaid by the Company at any time without penalty. The Promissory Note also contains covenants, events of defaults, penalties, default interest and other terms and conditions customary in transactions of this nature.
Pursuant to the terms of the SPA 23, the Company paid a commitment fee to the Purchaser in the amount of $123,000300,000 (“Initial Commitment Fee”) in the form of shares of the Company’s common stock (the “Initial (“Commitment Fee Shares”) valued at $ the closing price of the common stock of the Company on the closing date. In addition, if the Company exercises the option to extend the maturity date of the Promissory Note, the Company will pay an additional commitment fee toand issued the Purchaser in the amount of $a Warrant exercisable for a five-year period to purchase up to in the form of an additional shares of its common stock (“Additional Commitment Fee Shares,” and together with the Initial Commitment Fee Shares, collectively, “Commitment Fee Shares”) valued at $ the closing price of the common stock of the Company on the closing date.
In the event that by the first anniversary of repayment of the Promissory Note by the Company, the Purchaser has not generated the amount of $200,000 from public sales of the Commitment Fee Shares, and $100,000 from public sales of the Additional Commitment Fee Shares, if applicable, the Company shall either pay the amount of any such shortfall either (i) by issuing additional shares of our common stock at a price equalof $ per share (“Warrant Shares”).
Pursuant to the VWAP forterms of the common stock during the five (5) trading day period prior to such anniversary date; or (ii) in cash, in which case,SPA 23, the Company shall repurchase any unsold Commitment Fee Shares then held by the Purchaser for such shortfall amount (“Commitment Fee Shortfall Obligation”) .
The offer and sale of the Promissory Note to the Purchaser was made in a private transaction exempt from thegranted certain piggyback registration requirements ofrights under the Securities Act of 1933, as amended, (“Securities Act”), in reliance on exemptions afforded by Section 4(a)(2) ofwith respect to the Securities Act and Rule 506(b) of Regulation D promulgated thereunder.
UponConversion Shares, the closing, the Company recorded a discount of the Promissory Note in the amount of $260,000, consisting of the original issue discount of $60,000, the fair value of the Initial Commitment FeeWarrant Shares of $123,000 and the Commitment Fee Shortfall Obligation of $Shares.
77,000. These costs will be amortized over the initial term of the Promissory Note. For the three months ended January 31, 2022, $31,778 of the total discounts recorded in connection with the issuance of the Promissory Note have been amortized. At January 31, 2022, the fair value of the Commitment Fee Shares was approximately $111,000 (valued at $0.036 the closing price of the common stock of the Company on January 31, 2022). As a result, the Company recorded an additional Commitment Fee Shortfall Obligation in the amount of $12,000. The total Commitment Fee Shortfall Obligation at January 31, 2022 was $89,000.
13
NOTE 9 -10 – IRS PENALTIES
The Company’s income tax returns for the periods since inception through the tax year ended October 31, 2015 were not filed with the Internal Revenue Service (“IRS”) until August 2017 (“Delinquent Filed Returns”). The Company’s income tax returns for the tax year ended October 31, 2016 were filed with the IRS during December 2017. In connection with the Delinquent Filed Returns, during the period September 2017 through October 2017, the Company received notices that it was being assessed approximately $90,000 of penalties, plus interest (“IRS Penalties”), in connection with the late filing of certain information returns that were included as part of the Delinquent Filed Returns. In connection with the notices, the IRS indicated its intent to levy property of the Company if the IRS penalties were not paid as required. During January 2018, the Company requested from the IRS an abatement of the IRS penalties based on reasonable cause. During April 2018, the IRS notified the Company that the IRS penalties for the tax year ended 2011 of $20,000, plus interest, were abated and the request for abatement for the IRS penalties for the tax years ended 2012 – 2015 were denied. The Company is currently appealing the initial determination by the IRS to exclude the IRS penalties for the tax years 2012-2015 in its consideration of abatement and filed a “Request for Collection Due Process Equivalent Hearing” (“Request”) in September 2021. A hearing was held on June 28, 2022 and the Company is awaiting the IRS’ determination. During the period that the Request is being reviewed and processed by the IRS, the IRS has agreed to put a hold on taking any levy action against the Company for the remaining amounts of the IRS Penalties that are still outstanding. In connection with the notices, the Company has accrued $83,684 and $83,684 of accrued tax penalties and interest on the balance sheet as of January 31, 20222023 and October 31, 2021,2022, respectively.
ORGANICELL REGENERATIVE MEDICINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1011 – CAPITAL STOCK
Preferred Stock
The Company is authorized to issue shares of $ par value preferred stock in one or more designated series, each of which shall be so designated as to distinguish the shares of each series of preferred stock from the shares of all other series and classes. The Company’s board of directors is authorized, without stockholders’ approval, within any limitations prescribed by law and the Company’s Articles of Incorporation, to fix and determine the designations, rights, qualifications, preferences, limitations and terms of the shares of any series of preferred stock.
Issued Shares
As of January 31, 2022, there were designations of Preferred Stock authorized or outstanding.
Common Stock
Issuances of Common Stock - Sales:
In November 2021, the Company sold an aggregate of 8,000,000 shares of common stock to one “accredited investor” at $ per share for an aggregate purchase price of $400,000. The proceeds were used for working capital.
In January 2022, the Company sold an aggregate of shares of common stock to one “accredited investor” at $ per share for an aggregate purchase price of $20,000. The purchase price was paid through an offset of an outstanding balance owed by the Company to the investor at the time of the sale of $20,000.
In February 2022, the Company sold an aggregate of shares of common stock to one “accredited investor” at $ per share for an aggregate purchase price of $250,000. The proceeds were used for working capital.
Issuances of Common Stock – Stock-Based Compensation:
On December 27, 2021,1, 2022, the Company and an employee agreed to an amendment of the employee’s employment agreement. Under the terms of the amendment, the employee agreed to extend the term of the agreement through December 31, 2024 and the Company agreed to increase the employee’s annual salary from $granted per year to $210,000 per year effective January 1, 2022. In connection with the amendment, the Company agreed to grant the employee shares of common stock ofto an employee as provided for in the Company to vest quarterly over the remaining term of theemployment agreement (valued at $ per share, the closing price of the common stock of the Company on the grant date). The total value of the stock granted in connection with the amendment was $ which will be amortized over the remaining term of the agreement. The Company recorded $ of stock-based compensation during the three months ended January 31, 2022.
In connection with the VP Agreements, during the three months ended January 31, 2022, the Company issued each of the Sales Executive an additional Performance Shares (total shares) valued at $ per share, the closing price of the common stock of the Company on the grant date. The Company will amortize the value of the stock-based compensation ofrecorded $ over the remaining term of the VP Agreements. The Company has recorded a total of $ of stock-based compensation expense based on the grant date fair value of these shares during the three months ended January 31, 2023.
On December 29, 2022, the Company agreed to issue shares of common stock to a service provider in connection withexchange for the provider providing discounts of 10% on all services provided retroactive to August 2022. The common stock granted was valued at $ based on the closing price of the common stock of the Company on the date of the agreement of $ per share. The Company recorded $ of stock-based compensation expense based on the grant date fair value of these shares.
ORGANICELL REGENERATIVE MEDICINE, INC.shares during the three months ended January 31, 2023.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Equity Line of Credit Commitment:
During November 2021, the Company entered into an term sheet agreement with an investorTysadco Partners LLC, a Delaware limited company (“Tysadco”) whereby the investor hasTysadco agreed to provide the Company with a $10,000,000 equity line of credit facility (“ELOC”), subject to many conditions including the Company determining to proceed with the ELOC, approval and execution of definitive agreements for the ELOC and the Company subsequently filing a registration statement covering the underlying shares to be sold under the ELOC. The Company iswas not obligated to proceed with the ELOC or file a registration statement for the ELOC. In connection
On September 1, 2022, the Company entered into a Purchase Agreement (the “Purchase Agreement”) with Tysadco and a Registration Rights Agreement (the “Registration Rights Agreement”) with Tysadco.
Pursuant to the Purchase Agreement, Tysadco committed to purchase, subject to certain restrictions and conditions, up to $10,000,000 worth of the Company’s common stock (the “Commitment”), over a period of 24 months from the effectiveness of the registration statement registering the resale of shares purchased by Tysadco pursuant to the Purchase Agreement (the “Registration Statement”). Pursuant to the terms of the Registration Rights Agreement, the Company was obligated to use its commercially reasonable efforts to file a registration statement with the above,Securities and Exchange Commission within thirty (30) days after the investor agreeddate of such agreement, to register the resale by Tysadco of the shares of common stock issuable under the Purchase Agreement. On September 2, 2022, the Company filed the required registration statement and on October 24, 2022, the Registration Statement was declared effective.
14
The Purchase Agreement provides that at any time after the effective date of the Registration Statement, from time to time on any business day selected by the Company (the “Purchase Date”), the Company shall have the right, but not the obligation, to direct Tysadco to buy the lesser of $1,000,000 in common stock per sale or 500% of the daily average share value traded for the 10 days prior to the closing request date, at a purchase price of 80% of the of the two lowest individual daily VWAPs during the ten (10) trading days preceding the draw down or put notice (“Valuation Period”), with a minimum request of $25,000 (“Request”). The payment for the shares covered by each request notice will occur on the business day immediately following the Valuation Period.
In addition, Tysadco will not be obligated to purchase restricted commonshares if Tysadco’s total number of shares beneficially held at that time would exceed 9.99% of the number of shares of the Company’s common stock as determined in accordance with Rule 13d-1(j) of the Securities Exchange Act of 1934, as amended. In addition, the Company priced at $is not permitted to draw on the Purchase Agreement unless the Registration Statement covering the resale of the shares is effective.
0.05 per share ($350,000) upon such time
The Purchase Agreement also contains customary representations and warranties of each of the parties. The assertions embodied in those representations and warranties were made for purposes of the Purchase Agreement and are subject to qualifications and limitations agreed to by the parties in connection with negotiating the terms of the Purchase Agreement. The Purchase Agreement further provides that the Company initially filesand Tysadco are each entitled to customary indemnification from the registration statementother for, among other things, any losses or liabilities they may suffer as a result of any breach by the ELOC. In connection withother party of any provisions of the above,Purchase Agreement or Registration Rights Agreement. The Company has the unconditional right, at any time, for any reason and without any payment or liability, to terminate the Purchase Agreement.
Pursuant to the Purchase Agreement, on December 2, 2022, the Company agreedsubmitted a put request to payTysadco to purchase 4,456,326 registered shares at a commitment feepurchase price of $0.02244, for a total of $100,000 (“Put Request”). On December 5, 2022, Tysadco funded the Put Request and the Company issued 4,456,326 shares to Tysadco. The proceeds from the investorshare sale are being used for working capital and general corporate purposes.
Shares Repurchased – Settlement of Litigation:
As described in Note 13, effective October 13, 2022, the amount ofCompany settled a lawsuit by agreeing to repurchase 3,000,00024,800,001 shares of common stock of the Company fully vested (valued atfor $0.067500,000 per share, the closing price of the common stock of. The shares repurchased were transferred to the Company on the date of the agreement). The Company recorded $201,000 of stock-based compensation expense based on the grant date fair value of these shares during the three months ended January 31, 2022.
Shares Issued - Promissory Note
As described in Note 8, in connection with the issuance of the Promissory Note on January 11, 2022, the Company issued the Purchaser’s commitment shares valued at $123,000.
ManagementFebruary 2. 2023 and Consultants Performance Stock Plan
On April 25, 2020, the Company approved the adoption of the Management and Consultants Performance Stock Plan (“MCPP”) providing for the grant to current senior executive members of management and third-party consultants shares of common stock of the Company (“Shares”) based on the achievement of certain defined operational performance milestones (“Milestones”).
On June 29, 2020, the Board amended the MCPP, providing for the additional grant of common stock of the Company to the current senior executive members of management and the current non-executive members of the Board based on the Company completing any transaction occurring while employed and/or serving as a member of the Board, respectively, that results in a change in control of the Company or any sale of substantially all the assets of the Company (“Transaction”) which upon after giving effect to such issuance of shares below, corresponds to a minimum pre-Transaction fully diluted price per share ofredeposited back into the Company’s common stock in the amounts indicated below.treasury of authorized and unissued shares on February 3, 2023.
| Schedule of minimum pre-transaction price per share | ||||||||||
| Pre-Transaction Price Per Share Valuation (a) | Executive Bonus Shares Issued (b) | Non-executive Board Bonus Shares Issued (c) | ||||||||
| $ | 0.22 | 40,000,000 | 2,000,000 | |||||||
| $ | 0.34 | 60,000,000 | 3,000,000 | |||||||
| $ | 0.45 | 80,000,000 | 4,000,000 | |||||||
| $ | 0.54 | 100,000,000 | 5,000,000 | |||||||
Unvested Equity Instruments:
ORGANICELL REGENERATIVE MEDICINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
On August 14, 2020, the Board amended the MCPP, providing for the additional grant of common stock of the Company to each Dr. Maria I. Mitrani and Ian Bothwell based on the Company obtaining aggregate gross fundings (grants for research and development and clinical trials, purchase contracts for Company products, debt and/or equity financings) or other financial awards during the term of employment with the Company based on the amounts indicated below:
| Schedule of debt and/or equity financings | ||||||||||
| Aggregate Funding Amount | Shares | |||||||||
| From | To | |||||||||
| $ | 2,500,000 | $ | 5,000,000 | 5,000,000 | ||||||
| $ | 5,000,001 | $ | 10,000,000 | 10,000,000 | ||||||
| $ | 10,000,001 | $ | 30,000,000 | 30,000,000 | ||||||
On September 23, 2020, the Board amended the MCPP, providing for the grant of common stock of the Company of 15.0 million, 7.5 million and 15.0 million shares of common stock of the Company, respectively, to each Albert Mitrani, Dr. Maria I. Mitrani and Ian Bothwell upon such time that the Company’s common stock trades above $0.25 per share, $0.50 per share and $0.75 per share, respectively, for 30 consecutive trading days subsequent to March 31, 2021 and provided such milestone occurs during the term of employment with the Company.
In addition, each of the current executives were entitled to receive an additional 7 million shares, which when combined with all previous IND and/or eIND’s Milestones previously issued under the MCPP of 43 million shares, represents the total of all incentive shares to be issued to each executive in connection with the combined thirteen IND’s and/or eIND’s Milestones achieved through September 23, 2020. In the future, each of the current executives shall be entitled to receive 5 million shares as a performance incentive for each IND and/or “Expanded Access” approval (and excluding all eIND’s) received by the Company that involve more than 15 patients and provided such milestone occurs during the term of employment with the Company.
On February 10, 2021, the Board amended the MCPP, providing for the grant of common stock of the Company of 5 million shares for each Phase II clinical trial completed, 5 million shares for each Phase III clinical trial approved and initiated (deemed to be upon the time the first patient is enrolled) and 10.0 million shares for each Phase III clinical trial fully enrolled. In addition, the CMO’s portion of a designated grant for an achievement of any applicable Milestone subsequent to September 23, 2020 was reduced to 30% until the time that the CMO becomes a full-time employee of the Company.
Pursuant to the MCPP, a total of shares have been issued and as described above, additional shares are authorized to be issued under the MCPP subject to the achievement of the defined contingent performance based milestones described above and provided the milestones are achieved while the individual is employed and/or serving as a member of the Board:
| Schedule of management and consultants performance stock plan | ||||||||
| Name | MCPP Shares Issued | MCPP Remaining Shares Authorized | ||||||
| Albert Mitrani | 80,000,000 | 137,500,000 | ||||||
| Ian Bothwell | 80,000,000 | 167,500,000 | ||||||
| Dr. Maria Mitrani | 80,000,000 | 167,500,000 | ||||||
| Dr. George Shapiro | 69,500,000 | 100,000,000 | ||||||
| Dr. Allen Meglin | 0 | 5,000,000 | ||||||
| Michael Carbonara | 0 | 5,000,000 | ||||||
| Consultants | 33,000,000 | 0 | ||||||
| Total | 342,500,000 | 582,500,000 | ||||||
The Company will record stock-based compensation expense in connection with any MCPP Shares that are actually awarded based on the fair value as of the initial grant date that the respective milestone for the MCPP Shares were approved. In connection with the MCPP Shares that have been awarded to date, all such shares were issued in connection with the MCPP Shares approved on April 25, 2020 and accordingly were valued $0.027 per share, the closing price of the common stock of the Company on the date that those respective MCPP Shares were approved.
Upon completion of the Share Exchange on October 29, 2021, the MCPP (but not Awards of unexchanged shares of our common stock) was terminated.
ORGANICELL REGENERATIVE MEDICINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Unvested Equity Instruments:
A summary of unvested equity instruments outstanding for the three months ended January 31, 20222023 and 20212022 are presented below:
| Schedule of Nonvested Share Activity | ||||||||
| Number of Nonvested Shares | Weighted- Average Grant Date Fair Value | |||||||
| Outstanding at October 31, 2022 | 99,843,151 | $ | 0.057 | |||||
| Non-Vested Shares Granted | - | $ | - | |||||
| Vested | (13,996,575 | ) | $ | 0.061 | ||||
| Expired/Forfeited | (15,846,576 | ) | $ | 0.034 | ||||
| Outstanding at January 31, 2023 | 70,000,000 | $ | 0.069 | |||||
| Schedule of Nonvested Share Activity | |||||||||||||||||
| Number of Nonvested Shares | Weighted- Average Grant Date Fair Value | Number of Nonvested Shares | Weighted- Average Grant Date Fair Value | ||||||||||||||
| Outstanding at October 31, 2021 | 83,844,445 | $ | 0.062 | 83,844,445 | $ | 0.062 | |||||||||||
| Non-Vested Shares Granted | 1,900,000 | $ | 0.343 | 1,900,000 | $ | 0.034 | |||||||||||
| Vested | (166,667 | ) | $ | 0.029 | (166,667 | ) | $ | 0.029 | |||||||||
| Expired/Forfeited | 0 | $ | 0 | - | $ | - | |||||||||||
| Outstanding at January 31, 2022 | 85,577,778 | $ | 0.061 | 85,577,778 | $ | 0.061 | |||||||||||
| Number of Nonvested Shares | Weighted- Average Grant Date Fair Value | ||||||||
| Outstanding at October 31, 2020 | 1,111,111 | $ | 0.029 | ||||||
| Non-Vested Shares Granted | 0 | $ | 0 | ||||||
| Vested | (166,666 | ) | $ | 0.029 | |||||
| Expired/Forfeited | 0 | $ | 0 | ||||||
| Outstanding at January 31, 2021 | 944,445 | $ | 0.029 | ||||||
NOTE 1112 – WARRANTS
A summary of warrant activity for the three months ended January 31, 20222023 and 20212022 are presented below:
| Summary of Warrant Activity | ||||||||||||||||
| Number of Shares | Weighted-average Exercise Price | Remaining Contractual Term (years) | Aggregate Intrinsic Value | |||||||||||||
| Outstanding at October 31, 2022 | 429,800,000 | $ | 0.02 | $ | 2,440,110 | |||||||||||
| Granted | - | $ | - | - | $ | - | ||||||||||
| Exercised | - | $ | - | - | $ | - | ||||||||||
| Expired/Forfeited | (21,000,000 | ) | $ | 0.03 | $ | - | ||||||||||
| Outstanding at January 31, 2023 | 408,800,000 | $ | 0.02 | $ | - | |||||||||||
| Exercisable at January 31, 2023 | 392,645,434 | $ | 0.02 | $ | - | |||||||||||
| Summary of Warrant Activity | ||||||||||||||||
| Number of Shares | Weighted-average Exercise Price | Remaining Contractual Term (years) | Aggregate Intrinsic Value | |||||||||||||
| Outstanding at October 31, 2021 | 9,500,000 | $ | 0.03 | $ | 289,500 | |||||||||||
| Granted | 0 | $ | 0 | - | $ | 0 | ||||||||||
| Exercised | 0 | $ | 0 | - | $ | 0 | ||||||||||
| Expired/Forfeited | 0 | $ | 0 | - | $ | 0 | ||||||||||
| Outstanding and exercisable at January 31, 2022 | 9,500,000 | $ | 0.03 | $ | 62,250 | |||||||||||
| Number of Shares | Weighted-average Exercise Price | Remaining Contractual Term (years) | Aggregate Intrinsic Value | |||||||||||||
| Outstanding at October 31, 2020 | 9,500,000 | $ | 0.03 | $ | 1,268,000 | |||||||||||
| Granted | 0 | $ | 0 | - | $ | 0 | ||||||||||
| Exercised | 0 | $ | 0 | - | $ | 0 | ||||||||||
| Expired/Forfeited | 0 | $ | 0 | - | $ | 0 | ||||||||||
| Outstanding and exercisable at January 31, 2021 | 9,500,000 | $ | 0.03 | $ | 546,000 | |||||||||||
ORGANICELL REGENERATIVE MEDICINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
| Number of Shares | Weighted-average Exercise Price | Remaining Contractual Term (years) | Aggregate Intrinsic Value | |||||||||||||
| Outstanding at October 31, 2021 | 9,500,000 | $ | 0.03 | $ | 289,500 | |||||||||||
| Granted | - | $ | - | - | $ | - | ||||||||||
| Exercised | - | $ | - | - | $ | - | ||||||||||
| Expired/Forfeited | - | $ | - | - | $ | - | ||||||||||
| Outstanding and exercisable at January 31, 2022 | 9,500,000 | $ | 0.03 | $ | 62,250 | |||||||||||
NOTE 1213 – COMMITMENTS AND CONTINGENCIES
Executive Employment Agreements
The Company is party to executive employment agreements with each of Ian T. Bothwell (our Interim Chief Executive Officer and Chief Financial Officer), Dr. Maria Ines Mitrani (our Chief Science Officer) and Albert Mitrani, our Executive Vice President of Sales), originally executed in April 2018 and subsequently amended (the “Executive Employment Agreements”). As amended, the Executive Employment Agreements provide for a term expiring on December 31, 2025 and a base annual salary of $300,000 and specified expense reimbursement allowances. They also contain customary confidentiality and non-competition provisions.
Pursuant to the terms of the SPA, the Executive Employment Agreements were further amended on August 19, 2022 and February 9, 2023 as follows:
| 1. | Each of Albert Mitrani, Dr. Maria Ines Mitrani and Ian Bothwell amended their respective employment agreements providing for (a) setting their respective base salaries at $300,000 per annum; (b) limits on cell phone, automobile and other monthly allowances; (b) elimination of any compensation associated with commissions, fixed bonus, increases to base salary (based on revenue milestones), and/or tax make-whole provisions associated with equity grants; and (c) deletion of change in control provisions. |
In addition, each of Albert Mitrani, Dr. Maria Ines Mitrani and Ian Bothwell agreed to a reduction in each executive’s annual salary to $150,000 per year effective December 15, 2022 in the case of Dr. Mari Mitrani and Albert Mitrani and November 30, 2022 in the case of Mr. Bothwell. The reduction will remain in effect through such time that net revenues from operations are breakeven when calculating the salaries of all three executives without the agreed upon reductions (“Salary Reduction Period”). There is no obligation of the Company to repay that portion of Base Salary that has been reduced during the Salary Reduction Period.
16
| 2. | Albert Mitrani and Dr. Maria Ines Mitrani each waived all accrued but unpaid compensation outstanding as of July 31, 2022. The Company, Albert Mitrani and Dr. Maria Ines Mitrani also agreed to terminate the leases with Mariluna LLC for use of Albert Mitrani’s and Mari Mitrani’s Miami, FL and Aspen, Colorado homes, retroactive to July 13, 2022. The Company wrote off the related ROU asset and lease liability as of the Closing Date. The balance of unpaid and accrued compensation that was forgiven by Albert Mitrani and Dr. Maria Ines Mitrani totaling $430,200 and $563,455 (reduced for $22,500 of security deposits that were retained by Mariluna LLC upon termination of leases), respectively, was recorded as additional paid in capital as of October 31, 2022. |
| 3. | Ian Bothwell waived all unpaid and accrued compensation outstanding as of July 31, 2022, in exchange for ten-year warrants to purchase 30,000,000 Shares at an exercise price of $0.02 per Share, exercisable on a “cashless basis” and a cash payment of $50,000 at Closing. The Company and Mr. Bothwell also agreed that rental and other office costs associated with the California office currently used by him will not be reimbursed after October 31, 2022. The balance of unpaid and accrued compensation that was forgiven by Mr. Bothwell totaling $455,478, was recorded as additional paid in capital as of October 31, 2022. |
| 4. | Each of Albert Mitrani, Dr. Maria Ines Mitrani, Ian Bothwell and all other recipients agreed to terminate all awards granted but not yet issued under the Company’s Management and Consultant Performance Plan. |
| 5. | Each of Albert Mitrani, Dr. Maria Ines Mitrani and Ian Bothwell agreed to modify severance compensation provisions to be paid upon termination to only occur upon a termination without cause in an amount equal to one month’s base salary for each year of service. |
In connection with the February 9, 2023 amendment to the Executive Employment Agreements, Mr. Bothwell and Mr. Mitrani also agreed to repay approximately $44,600 and $84,300, respectively, of previously reimbursed expenses to the Company and the Company and the executives exchanged mutual releases. As of January 31, 2023, the total amounts due from Mr. Bothwell and Mr. Mitrani were $44,600 and $74,300, respectively and is included in receivables from related party in the accompanying consolidated balance sheets.
Term Sheet – Acting CEO
On July 21, 2022 (“Effective Date”), Matthew Sinnreich was appointed by the Board of Directors to the position of Chief Operating Officer and Acting Chief Executive Officer.
On the Effective Date, Organicell and Mr. Sinnreich entered into a term sheet (the “Term Sheet”) setting forth in principle the terms of Mr. Sinnreich’s employment agreement with and compensation by the Company. The Term Sheet was subject to the negotiation and execution of a definitive employment agreement embodying the provisions of the Term Sheet, as well as customary terms and conditions for an executive employment agreement (the “Employment Agreement”). The parties agreed to use their respective commercial best efforts to negotiate and execute the Employment Agreement.
In connection with the Term Sheet, as an inducement for Mr. Sinnreich to join the Company, Mr. Sinnreich was issued shares of restricted common stock and ten-year warrants to purchase 40,000,000 shares at a price of $0.034 per share, exercisable on a “cashless” basis. The foregoing shares and warrants vested immediately upon issuance.
During the first year of the Initial Term, Mr. Sinnreich was to be compensated by the issuance of shares of Organicell’s common stock, which were to vest in equal monthly installments of 2,000,000 shares each (“Salary Shares”). During the second year of the Initial Term, Mr. Sinnreich will be entitled to receive a base salary of $25,000 per month, payable in cash or shares of Organicell’s common stock, at his election.
On September 13, 2022, Mr. Sinnreich assumed the position of President and Acting Chief Executive Officer. He subsequently resigned from the Company on November 22, 2022. During the period November 1, 2022 through November 22, 2022 and as of November 22, 2022, a total of and 8,153,424 of the Salary Shares were vested, respectively. The Company is currently reviewing its rights to rescind previously issued shares and payments to Mr. Sinnreich in light of the resignation.
17
Consultant Agreements
Assure Immune LLC
On August 19, 2022 the Company and Consultant agreed to an amendment to the consulting agreement whereby the Consultant was issued 5,000,000 shares of common stock of the Company and received a $20,000 cash payment in exchange for satisfaction of approximately $200,000 in outstanding consulting fees due to the Consultant up through August 31, 2022. The parties also agreed to the reduction of future fees payable to the Consultant from $40,000 per month to $15,000 per month for the period September 2022 through March 2023.
Preparation of IRB, Pre-IND, IND Protocols for Clinical Applications and Clinical Trial Initiation and Monitoring:Monitoring:
In connection with the Company’s ongoing research and development efforts and the Company’s efforts to meet compliance with current and anticipated United States Food and Drug Administration (“FDA”) regulations expected to be enforced beginning in May 2021 pertaining to marketing traditional biologics and human cells, tissues and cellular and tissue based products that fall under Section 351 of the Public Health Services Act (“HCT/Ps”), the Company has applied for and received Investigation New Drug (“IND”) approval from the FDA to commence clinical trials in connection with the use of the Company’s products and related treatment protocols for specific indications. The ability to successfully complete the above efforts will be dependent on the actual outcomes in connection with the use of the Company’s products and related treatment protocols for each clinical trial, the Company’s ability to timely enroll patients and fund the required payments and complete the applicable clinical trials, which is subject to available working capital generated from operations, financing arrangements with the third-party vendors involved in the studies and/or from additional debt and/or equity financings as well as the ultimate approval from the FDA.
New CRO Agreements
During August 2021, October 2021, and December 2021, the Company entered into agreements with a new CRO to provide ongoing clinical research and related services in connection with threetwo of the Company’s approved clinical research trials (“New CRO Agreements”). On August 23, 2022 the New CRO Agreements were amended. In connection with the New CRO Agreements, the Company is obligated to make aggregate payments to the CRO of approximately $1,700,000$1,443,000 plus estimated aggregate pass-through costs and other third-party direct costs of approximately $565,000$495,000 (“Pass-Through Costs”) as well as site and patient related costs. The Company is obligated to make the CRO payments in equal monthly installmentsbased on the actual costs incurred over the term of the clinical trial beginning on the commencement of the work by the CRO in connection with the applicable clinical trial and the payments for the pass-through costs and other third-party direct costs as well as site and patient related costs are paid in accordance with completion of agreed upon milestones.
As of January 31, 2022,2023, the Company has been billed a total of approximately $208,000$617,100 and $176,200, in connection with the New CRO Agreements and Pass-Through Costs, respectively, of which approximately $133,000 is$303,800 and $82,200 was outstanding as of January 31, 2022.
2023.
Contingent Convertible Obligations Into Equity Securities
Obligations Due Under Executive Employment Agreements
Beginning July 1, 2020, at the sole option of the Executive, any portion of unpaid Original Base Salary for periods after January 1, 2020, including unpaid bonus salary, may be converted by Executive into common stock at a conversion rate equal to the average trading price during the month in which the accrued salary pertains. For any unpaid Original Base Salary that existed prior to January 1, 2020, including unpaid bonus salary, the amounts may be converted at a conversion price using the closing trading price of the stock on the last trading day in December 2019.
Beginning December 1, 2020, at the sole option of the Executive, all unpaid Incremental Salary for periods after January 1, 2020 may be converted by the Executive into common stock at a conversion rate equal to the average trading price during the month in which the accrued salary pertains. For any unpaid Incremental Salary that existed prior to January 1, 2020, the amounts may be converted at a conversion price using the closing trading price of the stock on the last trading day in December 2019.
None of the Executives have yet to elect to convert any portion of their unpaid Original Base Salary.
As of January 31, 2022, there was approximately $721,000 of unpaid Original Base Salary and Incremental Salary related to the period prior to December 31, 2019 and approximately $928,000 of unpaid Original Base Salary and Incremental Salary related to the period January 1, 2020 through January 31, 2022, that could be converted in the future into approximately 39,836,000 shares of common stock (weighted average conversion price of $0.041 per share).
ORGANICELL REGENERATIVE MEDICINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Legal Matters
SEC Matter
On June 17, 2021, Organicell received a subpoena dated June 14, 2021, from the Atlanta Regional Office of the SEC requiring the production of certain documents and communications in connection with the treatment and results of various COVID-19 patients, as discussed in the Company’s Current Reports on Form 8-K filed with the SEC during the period from May 27, 2020 through May 11, 2021. The Company is fully cooperating with the SEC’s investigation and believes that it will be able to provide all of the information requested by the SEC. The Company can make no assurances as to the time or resources that will need to be devoted to this investigation or its final outcome, or the impact, if any, of this investigation or any proceedings on the Company’s current business, financial condition, results of operations, cash flows, or the Company’s future operations.
��
18
Daniel Pepock and Tracy Yourke
The Company terminated the employment agreements with the Sales Executives Daniel Pepock (“Pepock”) and Tracy Yourke (“Yourke”) effective June 30, 2022.
On August 17, 2021, the Company was served withJune 6, 2022, Pepock filed a summons and complaint by LAE International Consulting, LLC (“LAE”), in the case styled LAE International Consulting, LLC v.Complaint against Organicell Regenerative Medicine, Inc. et al., Case No. 2021-018461-CA-01 (In(“Organicell”) in the Circuit Court of Common Pleas of Westmoreland County, Pennsylvania. Organicell removed the 11thcase to the United States District Court for the Western District of Pennsylvania, and on July 15, 2022 Mr. Pepock filed an Amended Complaint asserting two counts.
On June 27, 2022, Ms. Yourke filed a complaint against Organicell in the State of Michigan, 6th Judicial Circuit, inCounty of Oakland. Organicell removed the case to the United States District Court for the Eastern District of Michigan, Southern Division, and on August 10, 2022 Ms. Yourke filed an Amended Complaint asserting three counts.
As of July 31, 2022, all past due wages to Pepock and Yourke were paid.
Mr. Pepock’s action against Organicell was designated for placement into the United States District Court’s Alternative Dispute Resolution program and the Parties agreed to mediate. On August 22, 2022, Mr. Pepock, Ms. Yourke and Organicell agreed to a material settlement term sheet (“Settlement”) which provided for the resolution and full settlement and release of all claims among the parties and for Miami Dade County, Florida) (the “Lawsuit”). Albert Mitrani, Mari Mitrani and Ian Bothwell (the “Individual Defendants”) are also named as defendants in the Lawsuit. In the Lawsuit, LAE alleges breach of contract, unjust enrichment, violation of Florida’s Unfair and Deceptive Trade Practices Act, breach of obligation of good faith and fair dealing, negligent misrepresentation and fraudulent misrepresentation in connection with a prior consulting agreement entered into between the Company and LAE. Prior to institutionbuy back all of the Lawsuit,shares of common stock of the Company terminatedissued to and owned by Mr. Pepock and Ms. Yourke at the consulting agreement.time of the Settlement (represented by Mr. Pepock and Ms. Yourke to be in excess of 24,800,000 shares) in exchange for a payment by the Company of $500,000 (“Purchase Price”). In addition, the Lawsuit, LAE is seeking judgmentCompany agreed to release Mr. Pepock and Ms. Yourke from their non-compete restrictions upon transfer of the shares to the Company. The Settlement relates to disputed claims and nothing therein shall be construed as an admission of liability or wrongdoing by the Company or any other party.
Effective October 13, 2022, the parties executed a Confidential Settlement Agreement and Mutual General Release memorializing the terms of the Settlement. Under the terms of the Settlement, the Company agreed to repurchase shares of common stock for compensatory damages, interest, costs, and attorneys’ fees. The$500,000. As of January 31, 2023, the Company denies any wrongdoing and responsibilityfunded the escrow account $500,000 in connection with the Lawsuit,obligation to repurchase the shares. The funding of the escrow account asset and believes it has strong defensesthe corresponding liability obligation to repurchase the shares are reflected in the consolidated balance sheet at January 31, 2023.
The shares repurchased were transferred to the Lawsuit. Although the Lawsuit is in its early stages, the Company on February 2. 2023 and the Individual Defendants have filed motions to dismiss due to, among other things, (a) thatescrow funds were released. The shares repurchased were redeposited back into the consulting agreement expressly negates LAE’s claims; (b) there was, in fact, no breachCompany’s treasury of contract by the Company; (c) LAE provides no grounds,authorized and cannot provide any grounds, for its barebones claims that the Company and Individual Defendants induced LAE intounissued shares on February 3, 2023. As a contract that they did not intend to perform; (d) manyresult of the claims againstabove, the Individual Defendants do not exist as a matter of law; and (e) technical deficiencies in the complaint itself. The Company is awaiting a ruling on the motion, and the hearing for the Individual Defendants’ motion to dismiss has been scheduled for March 2022.fully settled and Mr. Pepock and Ms. Yourke were released from their non-compete restrictions.
Other
In addition to the foregoing, from time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in any such matter may harm our business.
NOTE 14 – 401(K) PLAN
The Company sponsors a pooled defined contribution retirement plan (“401(k) Plan”) covering all eligible employees effective January 25, 2023. The 401(k) Plan allows eligible employees to contribute, subject to Internal Revenue Service limitations on total annual contributions, up to 92% of their compensation as defined in the 401(k) Plan, to various investment funds. Under the 401(k) Plan, the Company may, but is not obligated to, make any contributions to the 401(K) Plan for any eligible employees. The Company has not yet made any contributions to the 401(K) Plan.
NOTE 13 -15 – SEGMENT INFORMATION
The Company has only one operating segment.
19
| Item 2. |
Unless stated otherwise, the words “we,” “us,” “our,” the “Company” or “Organicell” in this Quarterly Report on Form 10-Q refer to Organicell Regenerative Medicine, Inc., a Nevada corporation, and its subsidiaries.
Cautionary Note Regarding Forward- Looking Statements
The statements contained in this Quarterly Report on Form 10-Q that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”). These forward-looking statements are identified as any statement that does not relate strictly to historical or current facts. Statements using words such as “may,” “could,” “should,” “expect,” “plan,” “project,” “strategy,” “forecast,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “pursue,” “target,” “continue,” or similar expressions help identify forward-looking statements.
The forward-looking statements contained in this Quarterly Report on Form 10-Q are largely based on our expectations, which reflect estimates and assumptions made by our management. These estimates and assumptions reflect our best judgment based on currently known market conditions and other factors. Although we believe such estimates and assumptions to be reasonable, they are inherently uncertain and involve a number of risks and uncertainties that are beyond our control. In addition, management’s assumptions about future events may prove to be inaccurate. Management cautions all readers that the forward-looking statements contained in this Quarterly Report on Form 10-Q are not guarantees of future performance, and management cannot assure any reader that such statements will be realized or the forward-looking events and circumstances will in fact occur. The Company’s actual results may differ materially from those anticipated, estimated, projected or expected by management.
All forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. We do not intend to publicly update or revise any forward-looking statements as a result of new information, future events or otherwise.
Business Overview
We are a clinical-stage biopharmaceutical company principally focusing on the development of innovative biological therapeutics for the treatment of degenerative diseases and to provide other related services. Ourregenerative medicine. The Company’s proprietary products are derived from perinatal sources and manufactured to retain the naturally occurring microRNAs,extracellular vesicles, hyaluronic acid, and proteins without the addition or combination of any other substance or diluent (“RAAM Products”). Our RAAM Products and related services are principally used in the health care industry administered through doctors and clinics (“Providers”).
Since May 2019, Organicell has operated a placental tissue bankoperates an extracellular vesicle processing laboratory in Miami,Davie, Florida, and Basalt, Colorado each for the purpose of performing research and development and the manufacturing and processing of the anti-aging and cellular therapy derived products that we sell and distribute to our customers.
The Company’s leading product, Zofin™ (also known as Organicell™ Flow), is an acellular, biologic therapeutic derived from perinatal sources and is manufactured to retain naturally occurring microRNAs, without the addition or combination of any other substance or diluent. This product contains over 300 growth factors, cytokines, chemokines, and 102 unique microRNAs as well as other exosomes/nanoparticles derived from perinatal tissues.
To date, the Company has obtained certain InvestigationInvestigational New Drug (“IND”), and eighteen18 emergency IND (“eIND”) approvals from the FDA, including applicable Institutional Review Board (“IRB”) approvals which authorized the Company to commence clinical trials or treatments in connection with the use of Zofin™ and related treatment protocols. The Company is pursuing efforts to complete its already approved clinical studies (see below) as well as obtaining approval to commence additional studies for other specific indications it has identified that the use of its products will provide more favorable and desired health related benefits for patients seeking alternative treatment options than are currently available. The ability of the Company to succeed in these efforts is subject to among other things, the Company having sufficient available working capital to fund the substantial costs of completing clinical trials, which the Company currently does not have, and ultimately, obtaining approval from the FDA.
20
New FDA guidance which was announced in November 2017 and which became effective in May 2021 (postponed from November 2020 due to the COVID-19 pandemic) requires that the sale of products that fall under Section 351 of the Public Health Services Act pertaining to marketing traditional biologics and human cells, tissues and cellular and tissue based products (“HCT/Ps”) can only be sold pursuant to an approved biologics license application (“BLA”).
We have not obtained any opinion or ruling regarding the Company’s operations and whether the processing, sales and distribution of the products we currently produce would be subject to the FDA’s previously announced intended enforcement policies regarding HCT/P’s. However, we do not believe that our products fall within these guidelines and intend to vigorously defend against any adverse interpretation by the FDA on the classification of our products that may be deemed as falling under this defined regulation, if any. Notwithstanding the foregoing, we are undertaking efforts on an ongoing basis to mitigate any potential risks associated with an adverse ruling by the FDA and the subsequent limitations on our ability to continue to generate revenues from the sale of our products in the United States until the Company obtains the required licenses. The efforts include continuing with clinical trials, expanding sales internationally and developing new product offerings and/or designations of products that would not fall under these regulations.
In June 2021, the Company announced that it was launching a service platform for its first autologous product called Patient Pure X™ (PPX™XTM (PPXTM). PPX™PPXTM is a non-manipulated biologic containing the nanoparticle fraction from a patient’s own peripheral blood. The Company began to accept minimal orders for this service sincein October 2021.2021 and to date revenues from PPXTM continue to be immaterial.
In November 2020, the Company formed Livin’ Again Inc., a wholly owned subsidiary, for the purpose of among other things, providing independent education, advertising and marketing services, to Providers that provide medical and other healthcare, anti-aging and regenerative services. including FDA-approved IV vitamin and mineral liquid infusions (“IV Drip Therapies”). To date, there has been no significant activity and the Company has no timetable, if any, as to when IV Drip Therapies revenues will commence.
COVID-19 impact on Economy and Business Environment
The adverse public health developments and economic effects of the ongoing COVID-19 outbreak in the United States have adversely affected the demand for our products and services by our customers and from patients of our customers as a result of quarantines, facility closures and social distancing measures put into effect. These restrictions have adversely affected the Company’s sales, results of operations and financial condition. In response to the COVID-19 outbreak, the Company (a) has accelerated its research and development activities; (b) has secured and is seekingcontinuing to raiseseek additional debt and/or equity financing to support working capital requirements; and (c) continues to take steps to stabilize and increase revenues from the sale of its products.
There is no assurance as to when the adverse impact to the United States and worldwide economies resulting from the COVID-19 outbreak will be eliminated, if at all, and whether any new or recurring pandemic outbreaks will occur again in the future causing a similar or worse devastating impact to the United States and worldwide economies or our business.
The following discussion of the Company’s results of operations and liquidity and capital resources should be read in conjunction with our unaudited consolidated financial statements and related notes thereto appearing in Item 1. of this Quarterly Report on Form 10-Q.
Results of Operations
Three months ended January 31, 20222023 as compared to three months ended January 31, 20212022
Revenues. Our revenues for the three months ended January 31, 20222023 were $1,599,147,$1,070,219, compared to revenues of $1,368,440$1,599,147 for the three months ended January 31, 2021.2022. The increasedecrease in revenues during the three months ended January 31, 20222023 of $230,707$528,928 or 16.9%33.1%, was primarily the result of the Company being able to realize an increasea decrease of approximately 22.3%20.8% (approximately $305,600)$274,500) in the overall unit sales of its products during the three months ended January 31, 2023 compared with the three months ended January 31, 2022, a decrease of approximately 15.0% (approximately $232,400) in the average sales prices for the products sold during the three months ended January 31, 20222023 compared with the average sales prices realized on products sold during the three months ended January 31, 20212023 and the Company’s ability to generatea decrease of approximately $48,500$22,000 of new revenues associated with its recently launched PPXTMservice platform during the three months ended January 31, 2022, partially offset from a decrease of approximately 7.4% (approximately $123,500) in the overall unit sales of its products during the three months ended January 31, 20222023 compared with the three months ended January 31, 2021.2022. The increasedecrease in the average sales prices realized on products sold during the three months ended January 31, 20222023 compared with the three months ended January 31, 20212022, was due to increasesdecreases in sales of higher priced medical grade product,products, partially offset from the reduction in volume pricing discounts granted to distributors for large orders of the Company’s medical grade product offerings and the reductionincrease in the sales of the Company’s aesthetic product offerings, which are sold at lower prices than the Company’s medical grade product offerings.
21
Cost of Revenues. Our cost of revenues for the three months ended January 31, 20222023 were $149,120,$104,313, compared with cost of revenues of $168,171$149,120 for the three months ended January 31, 2021.2022. The decrease in the cost of revenues during the three months ended January 31, 20222023 of $19,051$44,807 or 11.3%30.1%, compared with the three months ended January 31, 20212022, was due to a decrease in the amount of units sold of 7.37%20.1% (approximately $11,900)$27,400) during the three months ended January 31, 20222023, compared with the three months ended January 31, 20212022 and the reductiona decrease in the cost of units sold of 4.3%11.7% (approximately ($7,200)17,400) during the three months ended January 31, 20222023, compared to costs of units sold during the three months ended January 31, 2021.2022. The decrease in the cost of units sold was primarily the result of the Company’s ability to obtaindecrease in sales of higher cost medical grade product offerings, partially offset from the increased in sales of lower cost of raw materials used in the processing of the units that were sold during the three months ended January 31, 2022 compared with the three months ended January 31, 2021.aesthetic product offerings.
Gross Profit. Our gross profit for the three months ended January 31, 20222023 was $1,450,027 (90.7%$965,906 (90.3% of revenues), compared with gross profit of $1,200,269 (87.7%$1,450,027 (90.7% of revenues) for the three months ended January 31, 2021.2022. The increasedecrease in gross profit during the three months ended January 31, 20222023 of $249,758$484,121 was the result of increasedecreases in the average sales prices for the products sold lower number of units and costs associated with units sold and the new revenues associated with its recently launched PPX™ service platform during the three months ended January 31, 20222023 and decreases in overall unit sales of its products during the three months ended January 31, 2023 compared to the three months ended January 31, 2021.2022.
General and Administrative Expenses. General and administrative expenses for the three months ended January 31, 20222023 were $3,091,459,$3,142,211, compared with $9,365,360$3,091,459 for the three months ended January 31, 2021, a decrease2022, an increase of $6,273,901$50,752 or 67.0%1.6%. The decreaseincrease in the general and administrative expenses for the three months ended January 31, 20222023 compared with the three months ended January 31, 20212022, was primarily the result of a decreasean increase in stock-based compensation costs to advisors, consultants and administrative staff totaling approximately $6,094,815, reduced$446,200, increases in insurance costs of approximately $117,800, increased laboratory related costs of approximately $132,500 and increased investor relations costs of approximately $188,900, partially offset by decreased payroll and consulting fees of approximately $378,000, decreases in commissions from sales of the Company’s products and travel and entertainment costs of approximately $266,200, decreased professional fees of approximately $98,200 and decreased research and development costs of approximately $385,600 and reduced consulting fees of approximately $105,000, partially offset by increases in commissions due from sales of the Company’s products of approximately $160,000 and increased professional fees of approximately $187,000.$81,600. The decreaseincrease in stock-based compensation costs was the result of a reduction in the amount of shares issued as stock-based compensation during the three months ended January 31, 20222023 compared with the three months ended 2020 and decreases in the costs attributable to the shares issued as stock-based compensation based on decreases in the Company’s share price during periods that the stock-based compensation was granted.
Other Income (Expense) Other (expense), net, for the three months ended January 31, 2022 was ($52,304),principally the result of the amortization of costs from warrants issued as stock-based compensation to consultants in connection with the Restructuring in August 2022, stock issued as payment for services, and warrants issued to outside directors. The increase in insurance costs during the three months ended January 31, 2023 compared with the three months ended January 31, 2022 was principally the result of the Company’s newly obtained directors & officers insurance policy in November 2023. The decrease in payroll and consulting fees during the three months ended January 31, 2023 compared with the three months ended January 31, 2022 was principally the result of the Executives’ agreement to a reduction in salary and other income, net,compensation in connection with the Restructuring and reductions in fees paid to consultants. The decreases in commissions on from sales of $15,356the Company’s products and travel and entertainment costs was principally the result of lower unit sales and overall revenues from the sale of the Company’s products during the three months ended January 31, 2023 compared with the three months ended January 31, 2022.
Other Expense. Other expense for the three months ended January 31, 2021.2023 was $110,351, compared with other expense of $52,304 for the three months ended January 31, 2022. The increase in other (expense), net,expense of $67,660$58,047 during the three months ended January 31, 20222023 compared to the three months ended January 31, 20212022, was principally the result of increased costs from the amortization of the discounts associated with the Promissory Note of approximately $32,000, the increase in the Commitment Fee Shortfall Obligation of $12,000 and the reduction in other income of $21,565 from settlements receivedapproximately $37,400 under our Securities Purchase Agreement (“SPA 22”) with AJB Capital Investments, LLC (“AJB”) during the three months ended January 31, 20222023 compared with the three months ended 2020.January 31, 2022 and increased interest costs of approximately $20,700 in connection with the $600,000 promissory note (“$600,000 Note”) issued and sold by the Company to AJB in January 2022 during the three months ended January 31, 2023 compared with the three months ended January 31, 2022.
22
Liquidity and Capital Resources
Cash and Cash Equivalents
The following table summarizes the sources and uses of cash for the periods stated. The Company held no cash equivalents for any of the periods presented.
| For the Three Months Ended January 31, | For the January 31, | |||||||||||||||
| 2022 | 2021 | 2023 | 2022 | |||||||||||||
| Cash, beginning of year | $ | 108,570 | $ | 590,797 | $ | 3,753,097 | $ | 108,570 | ||||||||
| Net cash used in operating activities | (559,994 | ) | (482,765 | ) | (1,282,724 | ) | (559,994 | ) | ||||||||
| Net cash used in investing activities | (155,134 | ) | (46,264 | ) | (16,117 | ) | (155,134 | ) | ||||||||
| Net cash provided by financing activities | 756,878 | 5,046 | ||||||||||||||
| Net cash (used in) provided by financing activities | (1,031,755 | ) | 756,878 | |||||||||||||
| Cash, end of period | $ | 150,320 | $ | 66,814 | $ | 1,422,501 | $ | 150,320 | ||||||||
During the three months ended January 31, 2022,2023, the Company used cash in operating activities of $559,994,$1,282,724, compared to $482,765$559,994 for the three months ended January 31, 2021,2022, an increase in cash used of $77,229.$772,730. The increase in cash used in operating activities was due to the Company’s use of cash to pay increasing operating expenses on a current basis associated with professional fees, payroll, consulting costsdecrease in revenues and laboratory related expenses in connection with the Company’s expansion of its research and development activities as well asgross profit, payment of past due accounts payable and accrued expenses, the decrease in accrued liabilities to management and the increase in inventory balances during the three months ended January 31, 20222023 as compared to the three months ended January 31, 2021, partially offset from the increase in revenues and gross profit during the three months January 31, 2022 as compared to the three months January 31, 2021.2022.
During the three months ended January 31, 2022,2023, the Company had cash used in investing activities of $155,134,$16,117, compared to cash used in investing activities of $46,264$155,134 for the three months ended January 31, 2021.2022, a decrease in cash used of $139,017. The increasedecrease in cash used in investing activities of $108,870 was due primarily due to the Company’sreduction in payments made for leasehold improvements associated with the new lab facility in Basalt, CO of $101,769approximately $102,000 and increased capital expendituresa decrease in laboratory equipment purchased for the acquisition of additional fixed assets required in connection with the Company’s laboratory operationsfacilities of approximately $37,000 during the three months ended January 31, 20222023 as compared to the three months ended January 31, 2021.2022.
During the three months ended January 31, 2022,2023, the Company had cash provided byused in financing activities of $756,878$1,031,755 compared to cash provided by financing activities of $5,046$756,878 for the three months ended January 31, 2021.2022. The increasedecrease in cash provided by financing activities of $751,832$1,788,633 was due to decreases in proceeds of $540,000 from the issuance of the $600,000 Note to AJB, increases in proceeds fromthe escrow deposit for the share purchase of $500,000, increases in repayment of notes payable of $429,000, increases in payments on finance leases of approximately $19,600 and the reduction in the sale of equity securities of approximately $360,000 and the increase in proceeds from the issuance of the Promissory Note of $540,000, partially offset from increases in repayments of outstanding debt obligations of approximately $143,693, increased payments on finance leases of approximately $4,500$300,000 during the three months ended January 31, 20222023 as compared to the three months ended January 31, 2021.2022.
Capital Resources
The Company has historically relied on the sale of debt or equity securities, the restructuring of debt obligations and/or the issuance and/or exchange of equity securities to meet the shortfall in cash to fund its operations. During
Put Request
Pursuant to the three months ended January 31,Purchase Agreement entered into with Tysadco Partners LLC, on December 2, 2022, and through the date of this report, the Company completed the following private sales of its securities:
The Company issued the foregoing securitiessubmitted a put request to Tysadco to purchase 4,456,326 registered shares at a purchase price (as calculated pursuant to the exemptionPurchase Agreement) of $0.02244, for a total of $100,000 (“Put Request”). On December 5, 2022, Tysadco funded the Put Request and the Company issued 4,456,326 shares to Tysadco. The proceeds from the registration requirementsshare sale are being used for working capital and general corporate purposes.
23
SPA 23
On March 6, 2023, the Company entered into a Securities Purchase Agreement (“SPA 23”) with AJB Capital, pursuant to which we sold a Promissory Note in the principal amount of $530,000 (“$530,000 Note”) to AJB Capital in a private transaction to for a purchase price of $519,400 (giving effect to original issue discount of $10,600). In connection with the sale of the Securities Act afforded by Section 4(a)(2)$530,000 Note, the Company also paid AJB Capital’s legal fees and due diligence costs of $15,000, resulting in net proceeds to the Securities Act and/or Regulation D promulgated thereunder.Company of $504,400, which will be used for working capital and other general corporate purposes.
Going Concern Consideration
The accompanying unaudited accompanying consolidated financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. The Company has had limited revenues since its inception. The Company incurred operatingnet losses of $1,641,432$2,286,656 for the three months ended January 31, 2022.2023. In addition, the Company had an accumulated deficit of $43,318,485$52,807,962 at January 31, 2022.2023. The Company had a negative working capital positiondeficit of $4,400,806$773,385 at January 31, 2022.2023.
New United States Food and Drug Administration (“FDA”) regulations which were announced in November 2017 and which became effective beginning in May 2021 (postponed from November 2020 due to the COVID-19 pandemic) require that the sale of products that fall under Section 351 of the Public Health Services Act pertaining to marketing traditional biologics and human cells, tissues and cellular and tissue based products (“HCT/Ps”) can only be sold pursuant to an approved biologics license application (“BLA”). The Company has not obtained any opinion or ruling regarding the Company’s operations and whether the processing, sales and distribution of the products it currently produces would be subject to the FDA’s previously announced intended enforcement policies regarding HCT/P’s.
In addition to the above, the adverse public health developments and economic effects ofassociated with the ongoing COVID-19 pandemic combined with the downturn in the overall United States and global economies have adversely affected the demand for our products and services by our customers and from patients of our customers as a result of quarantines, facility closures and social distancing measures put into effect in connection with the COVID-19 outbreak and which currently still continue to have a negative impact to our business and the economy.
As a result of the above, the Company’s efforts to establish a stabilized source of sufficient revenues to cover operating costs has yet to be achieved and ultimately may prove to be unsuccessful unless (a) the Company’s ability to process, sell and distribute the products currently being produced or developed in the future are not restricted,restricted; (b) the United States economy resumesreturns to pre-COVID-19 conditionsconditions; and/or (c) additional sources of working capital through operations or debt and/or equity financings are realized. These financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
Management anticipates that the Company will remain dependent, for the near future, on additional investment capital to fund ongoing operating expenses and research and development costs related to development of new products and to perform required clinical studies in connection with the sale of its products. The Company does not have any assets to pledge for the purpose of borrowing additional capital. In addition, the Company relies on its ability to produce and sell products it manufactures that are subject to changing technology and regulations that it currently sells and distributes to its customers. The Company’s current market capitalization, common stock liquidity and available authorized shares may hinder its ability to raise equity proceeds. The Company anticipates that future sources of funding, if any, will therefore be costly and dilutive, if available at all.
In view of the matters described in the preceding paragraphs, recoverability of the recorded asset amounts shown in the accompanying consolidated balance sheet assumes that (1)(a) the Company is able to continue to produce products or obtain products under supply arrangements which are in compliance with current and future regulatory guidelines, (2)guidelines; (b) the effects of the COVID-19 crisis resumeUnited States economy returns to pre-COVID-19 market conditions, (3)conditions; (c) the Company will be able to establish a stabilized source of revenues, including efforts to expand sales internationally and the development of new product offerings and/or designations of products, (4)products; (d) obligations to the Company’s creditors are not accelerated, (5)accelerated; (e) the Company’s operating expenses remain at current levels and/or the Company is successful in restructuring and/or deferring ongoing obligations, (6)obligations; (f) the Company is able to continue its research and development activities, particularly in regards to remaining compliant with the FDA and ongoing safety and efficacy of its products,products; and/or (7)(g) the Company obtains additional working capital to meet its contractual commitments and maintain the current level of Company operations through debt or equity sources.
24
There is no assurance as to when the adverse impact to the United States and worldwide economies resulting from the COVID-19 outbreak will be eliminated, if at all, and whether any new or recurring pandemic outbreaks will occur again in the future causing similar or worse devastating impact to the United States and worldwide economies and our business. In addition, there is no assurance that the products we currently produce will not be subject to the FDA’s previously announced intended enforcement policies regarding HCT/P’s and/or the Company will be able to complete its revenue growth strategy. There is no assurance that the Company’s research and development activities will be successful or that the Company will be able to timely fund the required costs of those activities. Without sufficient cash reserves, the Company’s ability to pursue growth objectives will be adversely impacted. Furthermore, despite significant effort since July 2015, the Company has thus far been unsuccessful in achieving a stabilized source of revenues. As described above, the COVID-19 crisis has significantly impaired the Company and the overall United States and World economies.
If revenues do not increase and stabilize, if the COVID-19 crisis is not satisfactorily managed and/or resolved, if the Company’s ability to process, sell and/or distribute the products currently being produced or developed in the future are restricted, and/or if additional funds cannot otherwise be raised, the Company might be required to seek other alternatives which could include the sale of assets, closure of operations and/or protection under the U.S. bankruptcy laws. As of January 31, 2022,2023, based on the factors described above, the Company concluded that there was substantial doubt about its ability to continue to operate as a going concern for the 12 months following the issuance of these financial statements.
Off-Balance Sheet Arrangements
Our liquidity is not dependent on the use of off-balance sheet financing arrangements (as that term is defined in Item 303(a) (4) (ii) of Regulation S-K) and as of January 31, 20222023 and through the date of this report, we had no such arrangements.
Recently Issued Financial Accounting Standards
There were no recently issued financial accounting standards that would have an impact on the Company’s financial statements.
Critical Accounting Policies
Our unaudited consolidated financial statements reflect the selection and application of accounting policies which require us to make significant estimates and judgments. See Note 2 to our audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended October 31, 2021,2022, “Summary of Significant Accounting Policies”.
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk. |
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Not applicable.
| Item 4. | Controls and Procedures. |
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Disclosure controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports under the Exchange Act, such as this Quarterly Report, is recorded, processed, summarized and reported in accordance with the rules of the Securities and Exchange Commission (the “SEC”(“SEC”). Disclosure controls are also designed with the objective of ensuring that such information is accumulated appropriately and communicated to management, including the chief executive officer and chief financial officer, as appropriate, to allow for timely decisions regarding required disclosures.
Our Interim Chief Executive Officer (our principal executive officer) and our Chief Financial Officer (our principal executive, financial and accounting officer) evaluated the effectiveness of our “disclosure controls and procedures” (as defined in the Exchange Act Rules 13a-15(e) and 15d-15(e)) as of January 31, 2022,2023, the end of the period covered by this report. Based on that evaluation, our Interim Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of such date to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act were recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and that our disclosure controls are not effectively designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. See the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2021,2022, for a description of the Company’s material weaknesses in internal control over financial reporting.
Changes in Internal Controls over Financial Reporting
No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the fiscal quarter ended January 31, 20222023 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
25
Part II – OTHER INFORMATION
| Item 1. | Legal Proceedings. |
Item 1. Legal Proceedings.
In addition to matters previouslywhich have been resolved as we reported in our periodicprevious filings under the Exchange Act, from time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in any such matter may harm our business.
| Item 1A. | Risk Factors. |
Item 1A. Risk Factors.
As a “smaller reporting company” we are not required to disclose information under this Item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
We issued the following securities during the three months ended January 31, 2022 and through the date of this Quarterly Report on Form 10-Q:
None of the above issuances involved any underwriters, underwriting discounts or commissions, or any public offering and we believe were exempt from the registration requirements of the Securities Act by virtue of Section 4(a)(2) and Regulation D promulgated thereunder due to the fact that there was no solicitation or advertising and the did not involve a public offering of securities.None.
| Item 3. | Defaults upon Senior Securities |
None.Item 3. Defaults upon Senior Securities
None.
| Mine Safety Disclosures |
Not applicable.
| Item 5. | Other Information. |
Item 5. Other Information.
None.
26
None.
| Item 6. | Exhibits. |
Item 6. Exhibits.
| Exhibit No: | Description: | |
| 31.1* | Rule 13(a)-14(a)/15(d)-14(a) Certification | |
| 32.1* | Section 1350 Certification | |
| 101.INS ** | XBRL Instance Document | |
| 101.SCH** | XBRL Taxonomy Extension Schema Document | |
| 101.CAL** | XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.LAB** | XBRL Taxonomy Extension Labels Linkbase Document | |
| 101.DEF** | XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.PRE** | XBRL Taxonomy Extension Presentation Linkbase Document |
| * | Filed herewith. |
| ** | Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability under those sections. |
28
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.
| ORGANICELL REGENERATIVE MEDICINE, INC. | |||
| By: | /s/ | ||
| Ian T. Bothwell | ||
| Interim Chief Executive Officer and Chief Financial Officer | ||
| (Principal Executive, Financial and Accounting Officer) | ||
| March |
2928