Cover
Cover - shares | 6 Months Ended | |
Sep. 30, 2021 | Nov. 14, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2021 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2021 | |
Current Fiscal Year End Date | --03-31 | |
Entity File Number | 000-53832 | |
Entity Registrant Name | MALACHITE INNOVATIONS, INC. | |
Entity Central Index Key | 0001438943 | |
Entity Tax Identification Number | 75-3268988 | |
Entity Incorporation, State or Country Code | NV | |
Entity Address, Address Line One | 200 Park Avenue | |
Entity Address, Address Line Two | Suite 400 | |
Entity Address, City or Town | Cleveland | |
Entity Address, State or Province | OH | |
Entity Address, Postal Zip Code | 44122 | |
City Area Code | (216) | |
Local Phone Number | 304-6556 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | MLCT | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 51,450,147 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Sep. 30, 2021 | Mar. 31, 2021 |
Current Assets | ||
Cash and cash equivalents | $ 57,425 | $ 884,137 |
Prepaid expenses and other current assets | 3,195 | |
Total current assets | 57,425 | 887,332 |
Deposits | 10,586 | 9,502 |
Total Assets | 68,011 | 896,834 |
Current Liabilities | ||
Accounts payable and accrued liabilities | 155,671 | 33,440 |
Total liabilities | 155,671 | 33,440 |
Commitments and contingencies | ||
Stockholders’ Equity (Deficit) | ||
Common stock, par value $0.001 per share; 1,000,000,000 shares authorized; 51,200,147 and 50,840,147 shares issued and outstanding, respectively | 51,000 | 50,640 |
Additional paid-in-capital | 48,405,642 | 48,240,463 |
Accumulated deficit | (48,544,302) | (47,427,709) |
Total stockholders’ equity (deficit) | (87,660) | 863,394 |
Total Liabilities and Stockholders’ Equity | $ 68,011 | $ 896,834 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2021 | Mar. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 51,200,147 | 50,840,147 |
Common stock, shares outstanding | 51,200,147 | 50,840,147 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Statement [Abstract] | ||||
Revenues | ||||
Operating expenses: | ||||
General and administrative | 436,523 | 374,290 | 950,960 | 947,543 |
Research and development | 67,838 | 98,829 | 165,650 | 266,293 |
Total operating expenses | 504,361 | 473,119 | 1,116,610 | 1,213,836 |
Loss from operations | (504,361) | (473,119) | (1,116,610) | (1,213,836) |
Other income (expense) | ||||
Other income | 3 | 187 | 17 | 666 |
Total other income (expenses), net | 3 | 187 | 17 | 666 |
Net loss | $ (504,358) | $ (472,932) | $ (1,116,593) | $ (1,213,170) |
Basic and diluted loss per common share | $ (0.01) | $ (0.01) | $ (0.02) | $ (0.02) |
Weighted average number of common shares outstanding | ||||
Basic and diluted | 50,711,017 | 50,840,147 | 50,775,229 | 50,840,147 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Mar. 31, 2020 | $ 50,640 | $ 47,778,607 | $ (46,546,858) | $ 1,282,389 |
Beginning balance, shares at Mar. 31, 2020 | 50,840,147 | |||
Fair value of vested stock options | 237,237 | 237,237 | ||
Net loss | (1,213,170) | (1,213,170) | ||
Ending balance, value at Sep. 30, 2020 | $ 50,640 | 48,015,844 | (47,760,028) | 306,456 |
Ending balance, shares at Sep. 30, 2020 | 50,840,147 | |||
Beginning balance, value at Jun. 30, 2020 | $ 50,640 | 47,903,534 | (47,287,096) | 667,078 |
Beginning balance, shares at Jun. 30, 2020 | 50,840,147 | |||
Fair value of vested stock options | 112,310 | 112,310 | ||
Net loss | (472,932) | (472,932) | ||
Ending balance, value at Sep. 30, 2020 | $ 50,640 | 48,015,844 | (47,760,028) | 306,456 |
Ending balance, shares at Sep. 30, 2020 | 50,840,147 | |||
Beginning balance, value at Mar. 31, 2021 | $ 50,640 | 48,240,463 | (47,427,709) | 863,394 |
Beginning balance, shares at Mar. 31, 2021 | 50,840,147 | |||
Issuance of common shares | $ 500 | 118,500 | 119,000 | |
Issuance of common shares, shares | 500,000 | |||
Fair value of vested stock options | 46,539 | 46,539 | ||
Cancellation of common shares | $ (140) | 140 | ||
Cancellation of common shares, shares | 140,000 | |||
Net loss | (1,116,593) | (1,116,593) | ||
Ending balance, value at Sep. 30, 2021 | $ 51,000 | 48,405,642 | (48,544,302) | (87,660) |
Ending balance, shares at Sep. 30, 2021 | 51,200,147 | |||
Cancellation of common shares, shares | (140,000) | |||
Beginning balance, value at Jun. 30, 2021 | $ 50,500 | 48,287,142 | (48,039,944) | 297,698 |
Beginning balance, shares at Jun. 30, 2021 | 50,700,147 | |||
Issuance of common shares | $ 500 | 118,500 | 119,000 | |
Issuance of common shares, shares | 500,000 | |||
Net loss | (504,358) | (504,358) | ||
Ending balance, value at Sep. 30, 2021 | $ 51,000 | $ 48,405,642 | $ (48,544,302) | $ (87,660) |
Ending balance, shares at Sep. 30, 2021 | 51,200,147 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash flows from operating activities | ||
Net loss | $ (1,116,593) | $ (1,213,170) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Fair value of vested stock options | 46,539 | 237,237 |
Operating lease expense | 66,851 | |
Changes in operating assets and liabilities: | ||
Prepaid expense and other current assets | 3,195 | 2,471 |
Deposits | (1,084) | 146 |
Accounts payable and accrued liabilities | 122,231 | (160,326) |
Operating lease liability | (67,982) | |
Net cash used in operating activities | (945,712) | (1,134,773) |
Cash flows from financing activities: | ||
Proceeds from issuance of common shares and warrants | 119,000 | |
Proceeds from note payable | 96,988 | |
Net cash provided by financing activities | 119,000 | 96,988 |
Net decrease in cash | (826,712) | (1,037,785) |
Cash and cash equivalents - beginning of period | 884,137 | 2,392,225 |
Cash and cash equivalents - end of period | 57,425 | 1,354,440 |
Supplemental disclosure of cash flow information: | ||
Interest | ||
Income taxes |
BUSINESS OPERATIONS AND SUMMARY
BUSINESS OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
BUSINESS OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. BUSINESS OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Malachite Innovations, Inc. (the “Company”, “we”, “us” or “our”), was incorporated in the State of Nevada on June 29, 2007. In 2015, the Company developed a new class of cannabinoids known as cannabosides, which were discovered through application of the Company’s proprietary enzymatic bioprocessing technologies. In 2016, the Company received approvals from the U.S. Drug Enforcement Administration (the “DEA”) and the State of California to initiate studies and manufacturing scale-up at its research and development facilities in order to develop cannabosides. Currently, we do not have any commercial products and have not yet generated any revenues from our cannabinoid prodrug pharmaceuticals. I n October 2021, the Company reorganized its corporate structure and created the following two wholly-owned operating subsidiaries: (i) Graphium Biosciences, Inc., a Nevada corporation (“Graphium”), into which the Company contributed all of its drug development assets; and (ii) Daedalus Ecosciences, Inc., a Nevada corporation (“Daedalus”). Graphium plans to focus its business activities on the health and wellness of people, with a particular focus on advancing our broad portfolio of over 100 glycosylated cannabinoid prodrugs. Daedalus plans to focus its business activities on the health and wellness of the planet, with a particular focus on deploying technological innovations and eco-friendly solutions to remedy difficult environmental situations in economically challenged communities. Going Concern The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying financial statements, during the six months ended September 30, 2021, the Company incurred a net loss of $ 1,116,593 945,712 The ability to continue as a going concern is dependent on the Company attaining and maintaining profitable operations in the future and/or raising additional capital to meet its obligations and repay its liabilities arising from normal business operations when they come due. We estimate as of September 30, 2021, we had sufficient funds to operate the business for 15 months as $4,881,000 of the $5,000,000 equity line secured in August 2021 with an institutional investor was available for additional equity issuances through December 31, 2022. Although our existing cash balances and the availability of funds under our equity line are estimated to be sufficient to fund our currently planned level of operations, we are actively seeking additional financing and other sources of capital to fund our planned future operations at a lower cost of capital, including a potential revolving line of credit with a financial institution. We do not presently have, nor do we expect in the near future to have, significant revenue to fund our business from our operations, and will need to obtain all of our necessary funding from external sources in the near term. Since inception, the Company has experienced recurring operating losses and negative operating cash flows, and we have funded our operations primarily through equity and debt financings, and we expect to continue to rely on these sources of capital in the future. If we raise additional funds by issuing equity or convertible debt securities, our existing stockholders’ ownership will be diluted, and obtaining commercial loans would increase our liabilities and future cash commitments. If we cannot raise the money that we need in order to continue to develop our business, we will be forced to delay, scale back or eliminate some or all of our proposed operations. COVID-19 The Company is subject to risks and uncertainties of the COVID-19 pandemic that could adversely impact our business, our liquidity and access to capital markets and our business development activities. The Company has implemented additional health and safety precautions and protocols in response to the pandemic and government guidelines. The extent of the impact of the COVID-19 pandemic has had and will continue to have on the Company is highly uncertain and difficult to predict and quantify. The full extent to which the COVID-19 pandemic will directly or indirectly impact the Company’s business, results of operations and financial condition will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain or treat it, including vaccination efforts, as well as the economic impact on local, regional, national and international markets. Basis of Presentation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Graphium Biosciences, Inc., Daedalus Ecosciences, Inc., and Vitality Healthtech, Inc. (dissolved in May 2021), and have been prepared in accordance with accounting principles generally accepted in the United States of America. Intercompany balances and transactions have been eliminated in consolidation. The Company’s fiscal year end is December 31. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 period. Actual results could differ from those estimates. The more significant estimates and assumptions by management include, among others, assumptions used in reserves for accounts receivable, assumptions used in valuing equity instruments issued for services, the valuation allowance for deferred tax assets, and accruals for potential liabilities. Actual results could differ from those estimates. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less at the date of acquisition to be cash equivalents. From time to time, the Company’s cash account balances exceed the balances covered by the Federal Deposit Insurance System. The Company has never suffered a loss due to such excess balances. Income Taxes The Company follows the asset and liability method of accounting for income taxes. Under this method, deferred income tax assets and liabilities are recognized for the estimated tax consequences attributable to differences between the financial statement carrying values and their respective income tax basis (temporary differences). The effect on deferred income tax assets and liabilities of a change in tax rates is recognized as income (loss) in the period that includes the enactment date. Leases The Company determines whether a contract is, or contains, a lease at inception. Right-of-use assets represent the Company’s right to use an underlying asset during the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at lease commencement based upon the estimated present value of unpaid lease payments over the lease term. The Company uses its incremental borrowing rate based on the information available at lease commencement in determining the present value of unpaid lease payments. The Company had no lease commitments for longer than one year as of September 30, 2021. The laboratory space lease in Rocklin, California ends on March 31, 2022. Stock-Based Compensation The Company periodically issues stock options and restricted stock awards to employees and non-employees in non-capital raising transactions for services. The Company accounts for such grants issued and vesting based on ASC 718, Compensation-Stock Compensation, whereby the value of the award is measured on the date of grant and recognized for employees as compensation expense on the straight-line basis over the vesting period. Recognition of compensation expense for non-employees is in the same period and manner as if the Company had paid cash for the services. The Company recognizes the fair value of stock-based compensation within its Statements of Operations with classification depending on the nature of the services rendered. The fair value of the Company’s stock options is estimated using the Black-Scholes-Merton Option Pricing model, which uses certain assumptions related to risk-free interest rates, expected volatility, expected life of the stock options or restricted stock, and future dividends. Compensation expense is recorded based upon the value derived from the Black-Scholes-Merton Option Pricing model and based on actual experience. The assumptions used in the Black-Scholes-Merton Option Pricing model could materially affect compensation expense recorded in future periods. Basic and Diluted Loss Per Share Basic loss per share is computed by dividing the net loss applicable to common stockholders by the weighted average number of outstanding common shares during the period. Shares of restricted stock are included in the basic weighted average number of common shares outstanding from the time they vest. Diluted loss per share is computed by dividing net loss applicable to common stockholders by the weighted average number of common shares outstanding plus the number of additional common shares that would have been outstanding if all dilutive potential common shares had been issued. Shares of restricted stock are included in the diluted weighted average number of common shares outstanding from the date they are granted unless they are antidilutive. Diluted loss per share excludes all potential common shares if their effect is anti-dilutive. The following potentially dilutive shares were excluded from the shares used to calculate diluted earnings per share as their inclusion would be anti-dilutive: SCHEDULE OF ANTIDILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNINGS PER SHARE 2021 2020 September 30, 2021 2020 Options 5,997,544 6,030,044 Warrants 646,668 613,335 Total 6,644,212 6,643,379 Patents and Patent Application Costs Although the Company believes that its patents and underlying technology have continuing value, the amount of future benefits to be derived from the patents is uncertain. Accordingly, patent costs are expensed as incurred. Research and Development Research and development costs consist primarily of fees paid to consultants and outside service providers, patent fees and costs, and other expenses relating to the acquisition, design, development and testing of the Company’s treatments and product candidates. Research and development costs are expensed as incurred. Segments As of September 30, 2021, the Company operates in one segment for the development of pharmaceutical products. In accordance with the “Segment Reporting” Topic of the ASC, the Company’s chief operating decision maker has been identified as the Chief Executive Officer, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Existing guidance, which is based on a management approach to segment reporting, establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products and services, major customers, and the countries in which the entity holds material assets and reports revenue. All material operating units qualify for aggregation under “Segment Reporting” due to their similar customer base and similarities in: economic characteristics; nature of products and services; and procurement, manufacturing, and distribution processes. Since the Company currently operates in one segment, all financial information required by “Segment Reporting” can be found in the accompanying financial statements. As of October 1, 2021, we began operating under two segments: (i) Graphium Biosciences, Inc., a wholly-owned subsidiary of the Company, will report the operating results of our health and wellness innovations serving people, with a particular focus on advancing our broad portfolio of over 100 glycosylated cannabinoid prodrugs, and (ii) Daedalus Ecosciences, Inc., a wholly-owned subsidiary of the Company, will report the operating results of our health and wellness innovations serving the planet, with a particular focus on deploying technological innovations and eco-friendly solutions to remedy difficult environmental situations in economically challenged communities. Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future financial statements. |
STOCK OPTIONS
STOCK OPTIONS | 6 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
STOCK OPTIONS | 2. STOCK OPTIONS A summary of the Company’s stock option activity during the six months ended September 30, 2021 is as follows: SUMMARY OF STOCK OPTION ACTIVITY Shares Weighted Balance outstanding at March 31, 2021 5,997,544 $ 0.84 Granted - - Exercised - - Expired - - Cancelled - - Balance outstanding at September 30, 2021 5,997,544 $ 0.84 Balance exercisable at September 30, 2021 5,997,544 $ 0.84 A summary of the Company’s stock options outstanding and exercisable as of September 30, 2021 is as follows: SCHEDULE OF STOCK OPTIONS OUTSTANDING AND EXERCISABLE Number of Options Weighted Average Exercise Price Weighted Average Grant- date Stock Price Options Outstanding, September 30, 2021 750,000 $ 0.30 $ 0.30 2,000,000 $ 0.35 $ 0.35 1,664,542 $ 0.50 $ 0.50 128,000 $ 0.96 $ 0.96 130,000 $ 1.00 $ 10.00 500,834 $ 1.50 1.95 $ 1.50 1.95 657,500 $ 2.00 2.79 $ 2.00 2.79 123,334 $ 3.10 3.80 $ 3.10 3.80 43,334 $ 4.00 4.70 $ 4.00 4.70 5,997,544 Options Exercisable, September 30, 2021 750,000 $ 0.30 $ 0.30 2,000,000 $ 0.35 $ 0.35 1,664,542 $ 0.50 $ 0.50 128,000 $ 0.96 $ 0.96 130,000 $ 1.00 $ 10.00 500,834 $ 1.50 1.95 $ 1.50 1.95 657,500 $ 2.00 2.79 $ 2.00 2.79 123,334 $ 3.10 3.80 $ 3.10 3.80 43,334 $ 4.00 4.70 $ 4.00 4.70 5,997,544 During the six months ended September 30, 2021, we expensed total stock-based compensation related to stock options of $ 46,539 no 5,997,544 no |
STOCKHOLDERS_ EQUITY (DEFICIT)
STOCKHOLDERS’ EQUITY (DEFICIT) | 6 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY (DEFICIT) | 3. STOCKHOLDERS’ EQUITY (DEFICIT) Issuance of Common Stock and Warrants On September 28, 2021, pursuant to a registration statement on Form S-1 filed with the Securities and Exchange Commission, the Company sold 500,000 shares of its common stock and warrants to purchase 500,000 shares of the Company’s common stock, resulting in proceeds to the Company of $ 119,000 . The common stock and warrants were sold under an equity line to a single investor, at a price of $ 0.238 per share and the exercise price for the warrants of $ 0.32 per share. |
WARRANTS
WARRANTS | 6 Months Ended |
Sep. 30, 2021 | |
Warrants | |
WARRANTS | 4. WARRANTS The Company has issued warrants to purchase common stock in conjunction with financing arrangements. A summary of the warrant activity during the six months ended September 30, 2021 is as follows: SUMMARY OF WARRANTS ACTIVITY Shares Weighted Average Exercise Price Balance outstanding at March 31, 2021 146,668 $ 3.00 Granted 500,000 0.32 Exercised - - Expired/Cancelled - - Balance outstanding and exercisable at September 30, 2021 646,668 $ 1.08 At September 30, 2021, the 646,668 no |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 5. COMMITMENTS AND CONTINGENCIES The Company received a letter in February 2021 from counsel for the Company’s previous director and officer insurance carrier (the “insurer”) demanding that the Company reimburse the insurer for sums advanced by the insurer without the Company’s knowledge or consent to a former director of the Company as defense costs in connection with a claim purportedly arising under a previous director and officer liability insurance policy. The Company believes it has no liability for this claim on the basis of, among other things, Nevada law, the Company’s governing documents and the language of the policy. Accordingly, as of September 30, 2021, no contingent liability has been recorded in the Company’s consolidated statements of financial condition for this matter. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 6 . SUBSEQUENT EVENTS In October 2021, the Company, pursuant to the registration statement on Form S-1 filed with the Securities and Exchange Commission, sold 250,000 shares of its common stock to a single investor for $ 50,950 in connection with the equity line. Pursuant to an agreement between the Company and the investor, no warrants were issued as part of this transaction. |
BUSINESS OPERATIONS AND SUMMA_2
BUSINESS OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Going Concern | Going Concern The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying financial statements, during the six months ended September 30, 2021, the Company incurred a net loss of $ 1,116,593 945,712 The ability to continue as a going concern is dependent on the Company attaining and maintaining profitable operations in the future and/or raising additional capital to meet its obligations and repay its liabilities arising from normal business operations when they come due. We estimate as of September 30, 2021, we had sufficient funds to operate the business for 15 months as $4,881,000 of the $5,000,000 equity line secured in August 2021 with an institutional investor was available for additional equity issuances through December 31, 2022. Although our existing cash balances and the availability of funds under our equity line are estimated to be sufficient to fund our currently planned level of operations, we are actively seeking additional financing and other sources of capital to fund our planned future operations at a lower cost of capital, including a potential revolving line of credit with a financial institution. We do not presently have, nor do we expect in the near future to have, significant revenue to fund our business from our operations, and will need to obtain all of our necessary funding from external sources in the near term. Since inception, the Company has experienced recurring operating losses and negative operating cash flows, and we have funded our operations primarily through equity and debt financings, and we expect to continue to rely on these sources of capital in the future. If we raise additional funds by issuing equity or convertible debt securities, our existing stockholders’ ownership will be diluted, and obtaining commercial loans would increase our liabilities and future cash commitments. If we cannot raise the money that we need in order to continue to develop our business, we will be forced to delay, scale back or eliminate some or all of our proposed operations. |
COVID-19 | COVID-19 The Company is subject to risks and uncertainties of the COVID-19 pandemic that could adversely impact our business, our liquidity and access to capital markets and our business development activities. The Company has implemented additional health and safety precautions and protocols in response to the pandemic and government guidelines. The extent of the impact of the COVID-19 pandemic has had and will continue to have on the Company is highly uncertain and difficult to predict and quantify. The full extent to which the COVID-19 pandemic will directly or indirectly impact the Company’s business, results of operations and financial condition will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain or treat it, including vaccination efforts, as well as the economic impact on local, regional, national and international markets. |
Basis of Presentation | Basis of Presentation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Graphium Biosciences, Inc., Daedalus Ecosciences, Inc., and Vitality Healthtech, Inc. (dissolved in May 2021), and have been prepared in accordance with accounting principles generally accepted in the United States of America. Intercompany balances and transactions have been eliminated in consolidation. The Company’s fiscal year end is December 31. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 period. Actual results could differ from those estimates. The more significant estimates and assumptions by management include, among others, assumptions used in reserves for accounts receivable, assumptions used in valuing equity instruments issued for services, the valuation allowance for deferred tax assets, and accruals for potential liabilities. Actual results could differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less at the date of acquisition to be cash equivalents. From time to time, the Company’s cash account balances exceed the balances covered by the Federal Deposit Insurance System. The Company has never suffered a loss due to such excess balances. |
Income Taxes | Income Taxes The Company follows the asset and liability method of accounting for income taxes. Under this method, deferred income tax assets and liabilities are recognized for the estimated tax consequences attributable to differences between the financial statement carrying values and their respective income tax basis (temporary differences). The effect on deferred income tax assets and liabilities of a change in tax rates is recognized as income (loss) in the period that includes the enactment date. |
Leases | Leases The Company determines whether a contract is, or contains, a lease at inception. Right-of-use assets represent the Company’s right to use an underlying asset during the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at lease commencement based upon the estimated present value of unpaid lease payments over the lease term. The Company uses its incremental borrowing rate based on the information available at lease commencement in determining the present value of unpaid lease payments. The Company had no lease commitments for longer than one year as of September 30, 2021. The laboratory space lease in Rocklin, California ends on March 31, 2022. |
Stock-Based Compensation | Stock-Based Compensation The Company periodically issues stock options and restricted stock awards to employees and non-employees in non-capital raising transactions for services. The Company accounts for such grants issued and vesting based on ASC 718, Compensation-Stock Compensation, whereby the value of the award is measured on the date of grant and recognized for employees as compensation expense on the straight-line basis over the vesting period. Recognition of compensation expense for non-employees is in the same period and manner as if the Company had paid cash for the services. The Company recognizes the fair value of stock-based compensation within its Statements of Operations with classification depending on the nature of the services rendered. The fair value of the Company’s stock options is estimated using the Black-Scholes-Merton Option Pricing model, which uses certain assumptions related to risk-free interest rates, expected volatility, expected life of the stock options or restricted stock, and future dividends. Compensation expense is recorded based upon the value derived from the Black-Scholes-Merton Option Pricing model and based on actual experience. The assumptions used in the Black-Scholes-Merton Option Pricing model could materially affect compensation expense recorded in future periods. |
Basic and Diluted Loss Per Share | Basic and Diluted Loss Per Share Basic loss per share is computed by dividing the net loss applicable to common stockholders by the weighted average number of outstanding common shares during the period. Shares of restricted stock are included in the basic weighted average number of common shares outstanding from the time they vest. Diluted loss per share is computed by dividing net loss applicable to common stockholders by the weighted average number of common shares outstanding plus the number of additional common shares that would have been outstanding if all dilutive potential common shares had been issued. Shares of restricted stock are included in the diluted weighted average number of common shares outstanding from the date they are granted unless they are antidilutive. Diluted loss per share excludes all potential common shares if their effect is anti-dilutive. The following potentially dilutive shares were excluded from the shares used to calculate diluted earnings per share as their inclusion would be anti-dilutive: SCHEDULE OF ANTIDILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNINGS PER SHARE 2021 2020 September 30, 2021 2020 Options 5,997,544 6,030,044 Warrants 646,668 613,335 Total 6,644,212 6,643,379 |
Patents and Patent Application Costs | Patents and Patent Application Costs Although the Company believes that its patents and underlying technology have continuing value, the amount of future benefits to be derived from the patents is uncertain. Accordingly, patent costs are expensed as incurred. |
Research and Development | Research and Development Research and development costs consist primarily of fees paid to consultants and outside service providers, patent fees and costs, and other expenses relating to the acquisition, design, development and testing of the Company’s treatments and product candidates. Research and development costs are expensed as incurred. |
Segments | Segments As of September 30, 2021, the Company operates in one segment for the development of pharmaceutical products. In accordance with the “Segment Reporting” Topic of the ASC, the Company’s chief operating decision maker has been identified as the Chief Executive Officer, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Existing guidance, which is based on a management approach to segment reporting, establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products and services, major customers, and the countries in which the entity holds material assets and reports revenue. All material operating units qualify for aggregation under “Segment Reporting” due to their similar customer base and similarities in: economic characteristics; nature of products and services; and procurement, manufacturing, and distribution processes. Since the Company currently operates in one segment, all financial information required by “Segment Reporting” can be found in the accompanying financial statements. As of October 1, 2021, we began operating under two segments: (i) Graphium Biosciences, Inc., a wholly-owned subsidiary of the Company, will report the operating results of our health and wellness innovations serving people, with a particular focus on advancing our broad portfolio of over 100 glycosylated cannabinoid prodrugs, and (ii) Daedalus Ecosciences, Inc., a wholly-owned subsidiary of the Company, will report the operating results of our health and wellness innovations serving the planet, with a particular focus on deploying technological innovations and eco-friendly solutions to remedy difficult environmental situations in economically challenged communities. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future financial statements. |
BUSINESS OPERATIONS AND SUMMA_3
BUSINESS OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
SCHEDULE OF ANTIDILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNINGS PER SHARE | SCHEDULE OF ANTIDILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNINGS PER SHARE 2021 2020 September 30, 2021 2020 Options 5,997,544 6,030,044 Warrants 646,668 613,335 Total 6,644,212 6,643,379 |
STOCK OPTIONS (Tables)
STOCK OPTIONS (Tables) | 6 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
SUMMARY OF STOCK OPTION ACTIVITY | A summary of the Company’s stock option activity during the six months ended September 30, 2021 is as follows: SUMMARY OF STOCK OPTION ACTIVITY Shares Weighted Balance outstanding at March 31, 2021 5,997,544 $ 0.84 Granted - - Exercised - - Expired - - Cancelled - - Balance outstanding at September 30, 2021 5,997,544 $ 0.84 Balance exercisable at September 30, 2021 5,997,544 $ 0.84 |
SCHEDULE OF STOCK OPTIONS OUTSTANDING AND EXERCISABLE | A summary of the Company’s stock options outstanding and exercisable as of September 30, 2021 is as follows: SCHEDULE OF STOCK OPTIONS OUTSTANDING AND EXERCISABLE Number of Options Weighted Average Exercise Price Weighted Average Grant- date Stock Price Options Outstanding, September 30, 2021 750,000 $ 0.30 $ 0.30 2,000,000 $ 0.35 $ 0.35 1,664,542 $ 0.50 $ 0.50 128,000 $ 0.96 $ 0.96 130,000 $ 1.00 $ 10.00 500,834 $ 1.50 1.95 $ 1.50 1.95 657,500 $ 2.00 2.79 $ 2.00 2.79 123,334 $ 3.10 3.80 $ 3.10 3.80 43,334 $ 4.00 4.70 $ 4.00 4.70 5,997,544 Options Exercisable, September 30, 2021 750,000 $ 0.30 $ 0.30 2,000,000 $ 0.35 $ 0.35 1,664,542 $ 0.50 $ 0.50 128,000 $ 0.96 $ 0.96 130,000 $ 1.00 $ 10.00 500,834 $ 1.50 1.95 $ 1.50 1.95 657,500 $ 2.00 2.79 $ 2.00 2.79 123,334 $ 3.10 3.80 $ 3.10 3.80 43,334 $ 4.00 4.70 $ 4.00 4.70 5,997,544 |
WARRANTS (Tables)
WARRANTS (Tables) | 6 Months Ended |
Sep. 30, 2021 | |
Warrants | |
SUMMARY OF WARRANTS ACTIVITY | The Company has issued warrants to purchase common stock in conjunction with financing arrangements. A summary of the warrant activity during the six months ended September 30, 2021 is as follows: SUMMARY OF WARRANTS ACTIVITY Shares Weighted Average Exercise Price Balance outstanding at March 31, 2021 146,668 $ 3.00 Granted 500,000 0.32 Exercised - - Expired/Cancelled - - Balance outstanding and exercisable at September 30, 2021 646,668 $ 1.08 |
SCHEDULE OF ANTIDILUTIVE SECURI
SCHEDULE OF ANTIDILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNINGS PER SHARE (Details) - shares | 6 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 6,644,212 | 6,643,379 |
Share-based Payment Arrangement, Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 5,997,544 | 6,030,044 |
Warrant [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 646,668 | 613,335 |
BUSINESS OPERATIONS AND SUMMA_4
BUSINESS OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Accounting Policies [Abstract] | ||||
Net loss | $ 504,358 | $ 472,932 | $ 1,116,593 | $ 1,213,170 |
Net cash used in operating activities | $ 945,712 | $ 1,134,773 | ||
Substantial doubt about going concern, conditions or events | We estimate as of September 30, 2021, we had sufficient funds to operate the business for 15 months as $4,881,000 of the $5,000,000 equity line secured in August 2021 with an institutional investor was available for additional equity issuances through December 31, 2022. Although our existing cash balances and the availability of funds under our equity line are estimated to be sufficient to fund our currently planned level of operations, we are actively seeking additional financing and other sources of capital to fund our planned future operations at a lower cost of capital, including a potential revolving line of credit with a financial institution. |
SUMMARY OF STOCK OPTION ACTIVIT
SUMMARY OF STOCK OPTION ACTIVITY (Details) | 6 Months Ended |
Sep. 30, 2021$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Shares Outstanding, Beginning Balance Outstanding | shares | 5,997,544 |
Shares, Granted | shares | |
Shares, Exercised | shares | |
Shares, Expired | shares | |
Shares, Cancelled | shares | |
Shares Outstanding, Ending Balance | shares | 5,997,544 |
Shares, Balance Exercisable | shares | 5,997,544 |
Weighted Average Exercise Price, Outstanding Beginning Balance | $ / shares | $ 0.84 |
Weighted Average Exercise Price, Granted | $ / shares | |
Weighted Average Exercise Price, Exercised | $ / shares | |
Weighted Average Exercise Price, Expired | $ / shares | |
Weighted Average Exercise Price, Cancelled | $ / shares | |
Weighted Average Exercise Price, Outstanding Ending Balance | $ / shares | 0.84 |
Weighted Average Exercise Price, Balance Exercisable | $ / shares | $ 0.84 |
SCHEDULE OF STOCK OPTIONS OUTST
SCHEDULE OF STOCK OPTIONS OUTSTANDING AND EXERCISABLE (Details) - $ / shares | 6 Months Ended | |
Sep. 30, 2021 | Mar. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Options, Options Outstanding | 5,997,544 | 5,997,544 |
Number of Options, Options Exercisable | 5,997,544 | |
Stock Options One [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Options, Options Outstanding | 750,000 | |
Weighted Average Exercise Price, Options Outstanding | $ 0.30 | |
Weighted Average Grant-date Stock Price, Options Outstanding | $ 0.30 | |
Number of Options, Options Exercisable | 750,000 | |
Weighted Average Exercise Price, Options Exercisable | $ 0.30 | |
Weighted Average Grant-date Stock Price, Options Exercisable | $ 0.30 | |
Stock Options Two [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Options, Options Outstanding | 2,000,000 | |
Weighted Average Exercise Price, Options Outstanding | $ 0.35 | |
Weighted Average Grant-date Stock Price, Options Outstanding | $ 0.35 | |
Number of Options, Options Exercisable | 2,000,000 | |
Weighted Average Exercise Price, Options Exercisable | $ 0.35 | |
Weighted Average Grant-date Stock Price, Options Exercisable | $ 0.35 | |
Stock Options Three [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Options, Options Outstanding | 1,664,542 | |
Weighted Average Exercise Price, Options Outstanding | $ 0.50 | |
Weighted Average Grant-date Stock Price, Options Outstanding | $ 0.50 | |
Number of Options, Options Exercisable | 1,664,542 | |
Weighted Average Exercise Price, Options Exercisable | $ 0.50 | |
Weighted Average Grant-date Stock Price, Options Exercisable | $ 0.50 | |
Stock Options Four [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Options, Options Outstanding | 128,000 | |
Weighted Average Exercise Price, Options Outstanding | $ 0.96 | |
Weighted Average Grant-date Stock Price, Options Outstanding | $ 0.96 | |
Number of Options, Options Exercisable | 128,000 | |
Weighted Average Exercise Price, Options Exercisable | $ 0.96 | |
Weighted Average Grant-date Stock Price, Options Exercisable | $ 0.96 | |
Stock Options Five [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Options, Options Outstanding | 130,000 | |
Weighted Average Exercise Price, Options Outstanding | $ 1 | |
Weighted Average Grant-date Stock Price, Options Outstanding | $ 10 | |
Number of Options, Options Exercisable | 130,000 | |
Weighted Average Exercise Price, Options Exercisable | $ 1 | |
Weighted Average Grant-date Stock Price, Options Exercisable | $ 10 | |
Stock Options Six [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Options, Options Outstanding | 500,834 | |
Number of Options, Options Exercisable | 500,834 | |
Stock Options Six [Member] | Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted Average Exercise Price, Options Outstanding | $ 1.50 | |
Weighted Average Grant-date Stock Price, Options Outstanding | 1.50 | |
Weighted Average Exercise Price, Options Exercisable | 1.50 | |
Weighted Average Grant-date Stock Price, Options Exercisable | 1.50 | |
Stock Options Six [Member] | Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted Average Exercise Price, Options Outstanding | 1.95 | |
Weighted Average Grant-date Stock Price, Options Outstanding | 1.95 | |
Weighted Average Exercise Price, Options Exercisable | 1.95 | |
Weighted Average Grant-date Stock Price, Options Exercisable | $ 1.95 | |
Stock Options Seven [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Options, Options Outstanding | 657,500 | |
Number of Options, Options Exercisable | 657,500 | |
Stock Options Seven [Member] | Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted Average Exercise Price, Options Outstanding | $ 2 | |
Weighted Average Grant-date Stock Price, Options Outstanding | 2 | |
Weighted Average Exercise Price, Options Exercisable | 2 | |
Weighted Average Grant-date Stock Price, Options Exercisable | 2 | |
Stock Options Seven [Member] | Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted Average Exercise Price, Options Outstanding | 2.79 | |
Weighted Average Grant-date Stock Price, Options Outstanding | 2.79 | |
Weighted Average Exercise Price, Options Exercisable | 2.79 | |
Weighted Average Grant-date Stock Price, Options Exercisable | $ 2.79 | |
Stock Options Eight [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Options, Options Outstanding | 123,334 | |
Number of Options, Options Exercisable | 123,334 | |
Stock Options Eight [Member] | Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted Average Exercise Price, Options Outstanding | $ 3.10 | |
Weighted Average Grant-date Stock Price, Options Outstanding | 3.10 | |
Weighted Average Exercise Price, Options Exercisable | 3.10 | |
Weighted Average Grant-date Stock Price, Options Exercisable | 3.10 | |
Stock Options Eight [Member] | Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted Average Grant-date Stock Price, Options Outstanding | 3.80 | |
Weighted Average Exercise Price, Options Exercisable | 3.80 | |
Weighted Average Grant-date Stock Price, Options Exercisable | $ 3.80 | |
Stock Options Nine[Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Options, Options Outstanding | 43,334 | |
Number of Options, Options Exercisable | 43,334 | |
Stock Options Nine[Member] | Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted Average Grant-date Stock Price, Options Outstanding | $ 4 | |
Weighted Average Exercise Price, Options Exercisable | 4 | |
Weighted Average Grant-date Stock Price, Options Exercisable | 4 | |
Stock Options Nine[Member] | Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted Average Exercise Price, Options Outstanding | 4.70 | |
Weighted Average Grant-date Stock Price, Options Outstanding | 4.70 | |
Weighted Average Exercise Price, Options Exercisable | 4.70 | |
Weighted Average Grant-date Stock Price, Options Exercisable | $ 4.70 |
STOCK OPTIONS (Details Narrativ
STOCK OPTIONS (Details Narrative) - USD ($) | 6 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |||
Stock-based compensation expense | $ 46,539 | $ 237,237 | |
Unamortized cost of outstanding stock-based awards | $ 0 | ||
Outstanding stock options | 5,997,544 | 5,997,544 | |
Stock warrants, intrinsic value | $ 0 |
STOCKHOLDERS_ EQUITY (DEFICIT)
STOCKHOLDERS’ EQUITY (DEFICIT) (Details Narrative) - USD ($) | Sep. 28, 2021 | Sep. 30, 2021 | Sep. 30, 2020 |
Equity [Abstract] | |||
Stock Issued During Period, Shares, New Issues | 500,000 | ||
Warrant to purchase common stock | 500,000 | ||
Proceeds from common stock | $ 119,000 | $ 119,000 | |
Shares Issued, Price Per Share | $ 0.238 | ||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.32 |
SUMMARY OF WARRANTS ACTIVITY (D
SUMMARY OF WARRANTS ACTIVITY (Details) - Warrant [Member] | 6 Months Ended |
Sep. 30, 2021$ / sharesshares | |
Number of Shares, Warrants Outstanding, Beginning Balance | shares | 146,668 |
Weighted Average Exercise Price, Warrants Outstanding, Beginning Balance | $ / shares | $ 3 |
Number of Shares, Warrants Granted | shares | 500,000 |
Weighted Average Exercise Price, Warrants Outstanding, Granted | $ / shares | $ 0.32 |
Number of Shares, Warrants Exercised | shares | |
Weighted Average Exercise Price, Warrants Outstanding, Exercised | $ / shares | |
Number of Shares, Warrants Expired | shares | |
Weighted Average Exercise Price, Warrants Outstanding, Expired | $ / shares | |
Number of Shares, Warrants Outstanding and Exercisable Ending Balance | shares | 646,668 |
Weighted Average Exercise Price, Warrants Outstanding, Outstanding and Exercisable, Ending Balance | $ / shares | $ 1.08 |
WARRANTS (Details Narrative)
WARRANTS (Details Narrative) | Sep. 30, 2021USD ($)shares |
Stock warrants, intrinsic value | $ 0 |
Warrant [Member] | |
Outstanding warrants | shares | 646,668 |
Stock warrants, intrinsic value | $ 0 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - Subsequent Event [Member] - Single Investor [Member] | 1 Months Ended |
Oct. 31, 2021USD ($)shares | |
Subsequent Event [Line Items] | |
Number of shares sold | shares | 250,000 |
Number of shares sold, value | $ | $ 50,950 |