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AS
FILED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 22, 2022
Registration
No. 333-265782
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
AMENDMENT
NO. 3 TO
FORM S-1
REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933
| SIGYN THERAPEUTICS, INC. |
| (Exact
name of Registrant as specified in its charter) |
| Delaware
|
|
3841 |
|
47-2573116 |
(State
or other jurisdiction of
incorporation or organization) |
|
(Primary
Standard Industrial
Classification
Code) |
|
(I.R.S.
Employer
Identification
No.) |
2468
Historic Decatur Road
Suite
140
San
Diego, California 92106
Telephone:
(619) 353-0800
(Address
and Telephone Number of Registrant’s Principal
Executive Offices and Principal Place of Business)
VCorp
Services
18
Lafayette Place
Woodmere,
NY 11598
Telephone:
(845) 425-0077
(Name,
Address, and Telephone Number for Agent of Service)
Copies
to:
| Jolie
Kahn, Esq. |
|
Patrick
J. Egan, Esq. |
| 12
E. 49th Street, 11th Floor |
|
Leslie
Marlow, Esq. |
| New
York, NY 10017 |
|
Hank
Gracin, Esq. |
| Telephone:
(516) 217-6379 |
|
Blank
Rome LLP |
| Fax:
(866) 705-3071 |
|
1271
Avenue of the Americas |
| |
|
New
York, NY 10020 |
| |
|
Phone:
(212) 885-5000 |
| |
|
Fax:
(212) 885-5001 |
Approximate
date of commencement of proposed sale to the public: As soon as practicable on or after the effective date of this registration statement.
If
any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, please check the following box: ☒
If
this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following
box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.
☐
If
this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If
this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company,
or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller
reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large
accelerated filer |
☐ |
Accelerated
Filer |
☐ |
| Non-accelerated
filer |
☒ |
Smaller
reporting company |
☒ |
| |
|
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 to Section 7(a)(2)(B) of the Securities Act.
The
Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective
in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this Registration Statement shall become effective
on such date as the Commission acting pursuant to said Section 8(a) may determine.
The
information in this prospectus is not complete and may be changed. We may not sell these securities until the Securities and Exchange
Commission declares our registration statement effective. This prospectus is not an offer to sell these securities and is not soliciting
an offer to buy these securities in any state where the offer or sale is not permitted.
PRELIMINARY
PROSPECTUS SUBJECT TO COMPLETION DATED DECEMBER 22, 2022
Sigyn
Therapeutics, Inc.
Class A Units
Each Class A Unit Consisting of
One Share
of Common Stock and
One Series A Warrant to Purchase One Share of
Common Stock
Class B Units
Each Class B Unit Consisting
of __ Shares of Series B Preferred Stock and One Series A Warrant to
Purchase One Share of
Common Stock
This is a firm commitment
public offering of ____ Class A Units (“Class A Units”), with each Class A Unit consisting of one share of our common
stock, par value $0.001 per share, and one Series A Warrant to purchase one share our common stock (and the shares issuable from time
to time upon exercise of the Series A Warrants) pursuant to this prospectus based on an assumed offer price of $____ for each Class A
Unit. Each Series A Warrant will have an exercise price of $____ (assumed) per share, will be exercisable upon issuance and will expire
five years from issuance. We expect the public offering price will be $______ per Class A Unit.
The Class A Units have no
stand-alone rights, will not be certificated or issued as stand-alone securities and there will be no trading market for the Class A
Units. The shares of common stock and the Series A Warrants comprising the Class A Units will separate immediately upon completion of
this offering and prior to any trading of the common stock and Series A Warrants.
We are also offering to those purchasers, whose purchase
at least $250,000 of Class A Units or whose purchase of Class A Units in this offering would result in the purchaser, together with its
affiliates and certain related parties, beneficially owning more than 4.99% (or, at the election of the purchaser, 9.99%) of our outstanding
common stock following the consummation of this offering, the opportunity to purchase, in lieu of the number of Class A Units that would
result in ownership in excess of 4.99% (or, at the election of the purchaser, 9.99%) of our outstanding common stock or who would purchase
at least $250,000 of Class A Units, a unit consisting of one share of Series B convertible preferred stock, par value $.001 per share
(“Series B Preferred Stock”), convertible at any time at the holder’s option into a number of shares of common stock
equal to $5,000 divided by $_____, the public offering price per Class A Unit (the “Conversion Price”), and warrants to purchase
a number of shares of common stock equal to the number of shares of common stock issuable upon conversion of one share of Series B Preferred
Stock (“Class B Unit”) at a public offering price of $5,000 per Class B unit. The Series B preferred shares contain price
protection so that if any offering is made of our Common Stock or common stock equivalents at a price per share lower than the offering
price per share in this offering, the conversion price of the Series B Preferred shares will automatically be reduced to the lower price
per share. The warrants included in the Class B Units will have the same terms as the warrants included in the Class A Units. For
each Class B Unit we sell, the number of Class A Units we are offering will be decreased on a dollar-for-dollar basis. Because we will
issue a Series A Warrant as part of the Class A Unit or Class B Unit, the number of Series A Warrants sold in this offering will not
change as a result of the change in the mix of Class A Units and Class B Units.
Our common stock trades
on the OTCQB® Venture Market under the symbol “SIGY”. On December 22, 2022, the last report sale price
of our common stock on the OTCQB® Venture Market was $_____. Prior to this offering, there has been no public market for our
Class A Units or our Series A Warrants. We plan to apply to
have our shares of common stock listed on the Nasdaq Capital Market under the symbol “SIGY”. No assurance can be given that
our application will be approved or that the trading price of our common stock on the OTCQB® Venture Market will be indicative of
the prices of our common stock if our common stock were traded on the Nasdaq Capital Market. If, for whatever reason, Nasdaq does
not confirm the listing of our common stock on Nasdaq prior to the pricing of the offering, we will not be able to consummate and will
terminate this offering. There is no established trading market for the Series A Warrants or the Series B Preferred Stock. In addition,
we do not intend to apply for the listing of the Series A Warrants or the Series B Preferred on any national securities exchange or other
trading market. Without an active trading market, the liquidity of the Series A Warrants and the Series B Preferred Stock will be limited.
The number of Class A Units and Class B Unit offered
in this prospectus and all other applicable information has been determined based on an assumed public offering price of $_____
per Class A Unit and $___ per Class B Unit, which is based on the last reported sales price of our common stock of $
on , 2022. The actual public offering price of the Class A Units
and Class B Units will be determined between the underwriters and us at the time of pricing, considering our historical performance and
capital structure, prevailing market conditions, and overall assessment of our business, and may be at a discount to the current market
price. Therefore, the assumed public offering price per Class A Unit and Class B Unit used throughout this prospectus may not be indicative
of the actual public offering price for the Class A Units and Class B Units. See “Determination of Offering Price” for additional
information.
Investing
in our securities involves a high degree of risk. See “Risk Factors” beginning on page 6 of this
prospectus for a discussion of information that should be considered in connection with an investment in our
securities.
We
are an “emerging growth company” under the federal securities laws and may elect to comply with certain reduced public company
reporting requirements for future filings.
Neither
the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined
if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
| |
|
Class
A Unit |
|
Class B Unit |
|
Total |
|
| Public
offering price |
|
$ |
|
|
$ |
|
|
$ |
|
|
| Underwriting
discounts and commissions(1) |
|
$ |
|
|
$ |
|
|
$ |
|
|
| Proceeds
to us, before expenses (2) |
|
$ |
|
|
$ |
|
|
$ |
|
|
| (1) | We
have also agreed to issue warrants to purchase shares of our common stock to the representative
of underwriters and to reimburse the representative of the underwriters for certain expenses.
See “Underwriting” for additional information regarding total underwriter compensation. |
| (2) | The
amount of offering proceeds to us presented in this table does not give effect to any exercise
of the: (i) over-allotment option (if any) we have granted to the representative of the underwriters
as described below and (ii) warrants being issued to the representative of the underwriters
in this offering. The public offering price and underwriting discount corresponds to (i)
in respect of the Class A Units (a) a public offering price per share of common stock of
$__ and (b) a public offering price per Series A Warrant of $__, and (ii) in respect of the
Class B Units (a) a public offering price per share of Series B Preferred Stock of
$__ and (ii) a public offering price per Series A Warrant of $_____. |
We have granted a 45-day option to the underwriters,
exercisable one or more times in whole or in part, to purchase up to an additional ____ shares of common stock and/or __ shares of Series
B Preferred Stock and/or additional Series A Warrants (having the same terms as the Series A Warrants included in the Class
A Units in the offering) from us in any combination thereof at the public offering price per share of common stock equal to the
public offering price per Class A Unit minus $0.01 per share and $0.01 per Series A Warrant, respectively, less the underwriting discounts
payable by us, solely to cover over-allotments, if any.
The
underwriters expect to deliver the securities to purchasers in the offering on or about ,
2022.
The
date of this prospectus is , 2022
Table
of Contents
You
should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with different information.
We are not making an offer of these securities in any state where the offer is not permitted. You should not assume that the information
contained in this prospectus is accurate as of any date other than the date on the front of this prospectus.
PROSPECTUS
SUMMARY
Except
as otherwise indicated, as used in this prospectus, references to the “Company,” “we,” “us,” or “our”
refer to Sigyn Therapeutics, Inc.
The
following summary highlights selected information contained in this prospectus, and it may not contain all of the information that is
important to you. Before making an investment decision, you should read the entire prospectus carefully, including “Risk Factors”
and our financial statements and related notes, included elsewhere in, or incorporated by reference into, this prospectus.
Our
Company
Sigyn Therapeutics, Inc. (“Sigyn”, the
“Company” “we,” “us,” or “our”) is a development-stage company focused on addressing
unmet needs in global health. Sigyn Therapy™ is a broad-spectrum blood purification technology designed to reduce the presence
of viral pathogens, bacterial toxins, and inflammatory mediators from the bloodstream.
Candidate treatment indications for Sigyn
Therapy include endotoxemia and inflammation in End-Stage Renal Disease (ESRD) dialysis patients, Sepsis (leading cause of hospital
deaths worldwide1), Community Acquired Pneumonia (a leading cause of death among infectious diseases2) and
Emerging Bioterror and Pandemic threats.
Beyond
our focus to clinically advance Sigyn Therapy, we intend to develop a pipeline of extracorporeal blood purification therapies. In this
regard, we have filed patent and trademark submissions related to a therapeutic system to enhance the delivery of cancer chemotherapy
and reduce its toxicity. At present, we have no market approved medical products.
1Global,
regional and national sepsis incidence and mortality The Journal Lancet, January 2020
2The
American Thoracic Society – Pneumonia Facts 2019
Risks
and Challenges That We Face
An
investment in our securities involves a high degree of risk. You should carefully consider the risks summarized below and the other risks
that are discussed more fully in the “Risk Factors” section of this prospectus immediately following this prospectus summary.
These risks include, but are not limited to, the following:
| |
● |
Demand
and market acceptance of our product offerings may be considerably less than what we currently anticipate. |
| |
|
|
| |
● |
We
may be unable to increase revenues in the manner in which we anticipate and generate profitability. |
| |
|
|
| |
● |
We
may face challenges in successfully completing U.S. Food and Drug Administration (“FDA”) testing requirements. |
| |
|
|
| |
● |
We
may not be able to meet increased and changing regulatory requirements. |
| |
|
|
| |
● |
We
believe the FDA will classify our lead product candidate to be a significant risk Class III
device, which would require extensive pre-clinical and clinical studies to be conducted along
with the submission of a Pre-Market Approval (PMA) application prior to market clearance
consideration by FDA. |
| |
|
|
| |
● |
We
will need to raise additional capital to fully commercialize our products. |
| |
|
|
| |
● |
Some
of our target products may face an uncertain regulatory environment. |
| |
|
|
| |
● |
We
may be unable to expand operations and manage growth. |
| |
|
|
| |
● |
We
may be unable to retain key members of our management and development teams and to recruit additional qualified personnel. |
| |
|
|
| |
● |
We
face competition from companies that have greater resources than we do and we may not be able to effectively compete against
these companies. |
| |
|
|
| |
● |
We
face risks as a result of the ongoing COVID-19 pandemic. |
| |
|
|
| |
● |
As
stated in their audit opinion for our audited financials for the year ended December 31, 2021, our auditors believe that we may not
be able to continue as a going concern. |
| |
|
|
| |
● |
Since
inception, our primary focus has been directed toward the advancement of Sigyn Therapy. As of September 30, 2022, we have
an accumulated deficit of $6.3 million and a working capital deficit of $1.8 million. |
Implications
of Being an Emerging Growth Company
We
are an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, or the Securities Act, as modified
by the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. As such, we are eligible to take advantage of certain exemptions
from various reporting requirements applicable to other public companies that are not “emerging growth companies” including,
but not limited to:
| |
● |
being permitted to present only two years of audited financial
statements and only two years of related disclosure in “Management’s Discussion and Analysis of Financial Condition and Results
of Operations” in this prospectus; |
| |
|
|
| |
● |
being permitted to provide less extensive narrative disclosure
than other public companies including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley
Act of 2002 and reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements and registration
statements; |
| |
|
|
| |
● |
being permitted to utilize exemptions from the requirements
of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously
approved; |
| |
|
|
| |
● |
being permitted to defer complying with certain changes in
accounting standards; and |
| |
|
|
| |
● |
being permitted to use test-the-waters communications with
qualified institutional buyers and institutional accredited investors. |
We
intend to take advantage of these and other exemptions available to “emerging growth companies.” We could remain an “emerging
growth company” until the earliest of (a) the last day of our fiscal year following the fifth anniversary of the closing of this
offering, (b) the last day of the first fiscal year in which our annual gross revenues exceed $1.235 billion, (c) the last day
of our fiscal year in which we are deemed to be a “large accelerated filer” as defined in Rule 12b-2 under the Securities
Exchange Act of 1934, or Exchange Act (which would occur if the market value of our equity securities that is held by non-affiliates
exceeds $700 million as of the last business day of our most recently completed second fiscal quarter), or (d) the date on which we have
issued more than $1 billion in nonconvertible debt during the preceding three-year period.
The
JOBS Act permits an “emerging growth company” like us to take advantage of an extended transition period to comply with new
or revised accounting standards applicable to public companies. This means that an “emerging growth company” can delay the
adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to delay such
adoption of new or revised accounting standards.
Available
Information
We
file various reports with the SEC, including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form
8-K, which are available through the SEC’s electronic data gathering, analysis and retrieval system (“EDGAR”) by accessing
the SEC’s home page (http://www.sec.gov).
Corporate
Information
On
October 19, 2020, Sigyn Therapeutics, Inc, a Delaware corporation (the “Registrant”) formerly known as Reign Resources
Corporation, completed a Share Exchange Agreement (the “Agreement”) with Sigyn Therapeutics, Inc., a private entity
incorporated in the State of Delaware on October 19, 2019. Our mailing address is currently 2468 Historic Decatur Road., Suite 140,
San Diego, California, 92106. Our telephone number is (619) 353-0800.
THE
OFFERING
Class A Units offered by us: |
|
We
are offering Class A Units. Each Class A Unit consists of one share of our common stock and
a Series A Warrant to purchase one share of our common stock (together with the shares of
common stock underlying such warrants). The Class A Units will not be certificated or issued
in stand-alone form. The shares of our common stock and the Series A Warrants comprising
the Class A Units are immediately separable upon issuance and will be issued separately in
this offering. |
| |
|
|
| Assumed
Offering price: |
|
$[__]
per Class A Unit |
| |
|
|
| Class B Units offered by us: |
|
We are also offering to those purchasers, who purchase
at least $250,000 of Class A Units or whose purchase of Class A Units in this offering would result in the purchaser, together
with its affiliates and certain related parties, beneficially owning more than 4.99% (or, at the election of the purchaser, 9.99%)
of our outstanding common stock following the consummation of this offering, the opportunity to purchase, in lieu of the number of
Class A Units that would result in ownership in excess of 4.99% (or, at the election of the purchaser, 9.99%) of our outstanding
common stock, or who would purchase at least $250,000 of Class A Units, Class B Units. Each Class B Unit will consist of one
share of Series B Preferred Stock convertible into a number of shares of common stock equal to $5,000 divided by $____, the public
offering price per Class A Unit (the “Conversion Price”), and warrants to purchase a number of shares of common stock
equal to the number of shares of common stock issuable upon conversion of one share of Series B Preferred Stock (together with the
shares of common stock underlying such shares of Series B Preferred Stock and such warrants). The Class B Units are immediately separable
into their components upon closing of the offering contemplated hereby. For each Class B Unit we sell, the number of Class A Units
we are offering will be decreased on a dollar-for-dollar basis. Because we will issue a warrant as part of each Unit, the number
of warrants sold in this offering will not change as a result of a change in the mix of the Units sold. |
| |
|
|
| Offering price per Class B Unit: |
|
$ |
| |
|
|
| Description of Series B Preferred Stock: |
|
Each share of Series B Preferred
Stock is convertible at any time at the holder’s option into a number of shares
of common stock equal to $5,000 divided by the Conversion Price. Notwithstanding the foregoing,
we shall not effect any conversion of Series B Preferred Stock, with certain exceptions,
to the extent that, after giving effect to an attempted conversion, the holder of shares
of Series B Preferred Stock (together with such holder’s affiliates, and any
persons acting as a group together with such holder or any of such holder’s affiliates)
would beneficially own a number of shares of our common stock in excess of 4.99% (or, at
the election of the purchaser, 9.99%) of the shares of our common stock then outstanding
after giving effect to such exercise. The Series B Preferred Stock does not generally have
any voting rights. For additional information, see “Description of Securities—Series
B Preferred Stock” in this prospectus. |
| |
|
|
| Number
of shares of common stock outstanding after the offering:(1) |
|
_______
shares of common stock |
| |
|
|
| Market
for the common stock: |
|
Our
common stock trades on the OTCQB® Venture Market under the symbol “SIGY”. On December 7, 2022, the last reported
sale price for our common stock was $0.25 per share. Prior to this offering, there has been a limited market for our common
stock. While our common stock trades on the OTCQB® Venture Market, there has been negligible trading volume. |
| |
|
|
| |
|
There
is no assurance that an active trading market will develop, or, if developed, that it will be sustained. Consequently, purchasers
of our common stock may find it difficult to resell the securities offered herein should the purchasers desire to do so when eligible
for public resale. |
| |
|
|
| |
|
Our
officers and directors are not purchasing securities in this offering. |
| |
|
|
| Use
of proceeds: |
|
We estimate
that we will receive approximately $___________ in gross proceeds if we sell all of the Class
A Units in the offering (based on an assumed offering price of $[__] per Class A Unit, which
was the last reported sales price of our common stock on the OTCQB® Venture Market
on , 2022), and we will receive estimated net proceeds (after deducting underwriting
discounts and estimated offering expenses) (assuming no exercise of the underwriter’s
over-allotment option, the Series A Warrants included in the Class A Units and Class B Units
or the Representatives’ Warrants offered hereby).
We currently intend to use the net proceeds from this offering, together with our existing cash and cash equivalents, to fund our research and development activities, clinical trials and the regulatory review process, and the remainder for working capital and other general corporate purposes. See “Use of Proceeds” for a more detailed explanation of how the proceeds from the Offering will be used. |
| Over-allotment option: |
|
We have granted a 45-day option to the representative of
the underwriters to purchase up to additional shares of common stock and/or additional Series A Warrants, based on an assumed
public offering price of $ per Class A Unit or $__ per Class B Unit, which was the last reported sales price of our common stock
on the OTCQB® Venture Market on , 2022 (having
the same terms as the Series A Warrants included in the Class A Units and Class B Units in the offering) from us in any combination
thereof at a price per share of common stock equal to the public offering price per Class A Unit and Class B Unit minus $0.01 and
a price per warrant of $0.01, respectively, in each case, less the underwriting discounts payable by us, solely to cover over-allotments,
if any. |
| |
|
|
| Representative’s
Warrants |
|
The
registration statement of which this prospectus is a part also registers for sale warrants (the “Representative’s Warrants”)
to purchase shares of our common stock (based on an assumed offering price of $ per share, which was the last reported sales price
of our common stock as quoted on the OTCQB® Venture Market on , 2022) to Univest Securities, LLC (the “representative”),
as the representative of the several underwriters, as a portion of the underwriting compensation payable to the representative in
connection with this offering. The representative’s warrants will be exercisable at any time, and from time to time, in whole
or in part, during the four and one half period commencing 180 days following the commencement of sales of the securities in this
offering at an exercise price of $[__] (110% of the assumed public offering price of the Class A Units). Please see “Underwriting—Representative’s
Warrants” for a description of these warrants. |
| |
|
|
| Risk
Factors: |
|
See
“Risk Factors‚” and the other information in this prospectus for a discussion of the factors you should consider
before deciding to invest in shares of our securities. |
| |
|
|
| Trading
symbol: |
|
Our
common stock currently trades on the OTCQB® Venture Market under the symbol
“SIGY”. We plan to apply to have our shares of common stock listed on the Nasdaq
Capital Market under the symbol “SIGY”. No assurance can be given that our application
will be approved or that the trading prices of our common stock on the OTCQB® Venture
Market will be indicative of the prices of our common stock if our common stock were
traded on the Nasdaq Capital Market. If, for whatever reason, Nasdaq does not confirm the
listing of our common stock on Nasdaq prior to the pricing of the offering, we will not be
able to consummate and will terminate this offering.
There is no established trading market for the
Series B Preferred Stock or the Series A Warrants and we do not expect a market to develop. In addition, we do not intend to apply for
the listing of the Series B Preferred Stock or the Series A Warrants on any national securities exchange or other trading market. Without
an active trading market, the liquidity of the Series B Preferred Stock and the Series A Warrants will be limited. |
| |
|
|
| Series
A Warrants: |
|
The
exercise price of the Series A Warrants shall be 110% of the offering price of the Class A Units. The Series A Warrants have a
five-year term. The Series A Warrants are exercisable at any time after their original issuance and at any time up to the date that
is five years after their original issuance. The Series A Warrants will be exercisable, at the option of each holder, in whole or in
part by delivering to us a duly executed exercise notice and, at any time a registration statement registering the issuance of the
shares of common stock underlying the Series A Warrants under the Securities Act is effective and available for the issuance of such
shares, or an exemption from registration under the Securities Act is available for the issuance of such shares, by payment in full
in immediately available funds for the number of shares of common stock purchased upon such exercise. If a registration statement
registering the issuance of the shares of common stock underlying the Series A Warrants under the Securities Act is not
effective or available and an exemption from registration under the Securities Act is not available for the issuance of such shares,
the holder may, in its sole discretion, elect to exercise the Series A Warrant through a cashless exercise, in which case the holder would
receive upon such exercise the net number of shares of common stock determined according to the formula set forth in the Series A Warrant. No
fractional shares of common stock will be issued in connection with the exercise of a Series A Warrant. In lieu of fractional shares, we will
pay the holder an amount in cash equal to the fractional amount multiplied by the exercise price. |
| (1) |
The number of shares of our
common stock to be outstanding after this offering is based on shares of our common stock outstanding as December 22,
2022. |
| |
|
|
Unless we
indicate otherwise or the context otherwise requires, all information in this prospectus: |
| |
● |
assumes
no exercise by the underwriters of their option to purchase up to additional
shares of our common stock and/or Series A Warrants from us to cover over-allotments, if any; |
| |
● |
no
exercise of the Series A Warrants included in the Class A Units and Class B Units;
|
| |
● |
assumes
no exercise of the Representative’s Warrants to be issued upon consummation of this offering at an exercise price equal
to 110% of the initial offering price of the Class A Units; |
| |
● |
assumes
no shares of Series B Preferred Stock are sold in this offering;
|
| |
● |
assumes
no exercise of outstanding warrants to purchase shares
of our common stock at an exercise price of $[__]; and |
| |
● |
excludes
shares of common stock to be reserved for future issuance under our equity incentive plan, which will be effective upon the completion
of this offering. |
To
the extent we sell any Class B Units in this offering, the same aggregate number of common stock equivalents resulting from this offering
would be convertible under the Series B Preferred Stock issued as part of the Class B Units.
SUMMARY
FINANCIAL DATA
The following tables set forth
a summary of our historical financial data as of, and for the periods ended on, the dates indicated. The statements of operations data
for the years ended December 31, 2021, and 2020 and the nine months ended September 30, 2022 and September
30, 2021, and balance sheet data as of December 31, 2021, and December 31, 2020 and September 30, 2022 and September,
2021 are derived from our audited and unaudited financial statements included elsewhere in this prospectus. The unaudited financial
statements have been prepared on a basis consistent with our audited financial statements included in this prospectus and include, in
our opinion, all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the financial information
in those statements.
The
following summary financial information should be read in connection with, and is qualified by reference to, our financial statements
related notes thereto and the section titled “Management’s Discussion and Analysis of Financial Condition and Results of
Operations” included elsewhere in this prospectus. Our historical results are not necessarily indicative of results to be expected
in any future period.
Statement
of Operations Data:
| | |
Year ended | | |
Year ended | |
| | |
December 31, | | |
December 31, | |
| | |
2021 | | |
2020 | |
| | |
| | |
| |
| Operating costs and expenses | |
| | | |
| | |
| General and administrative | |
$ | 1,274,203 | | |
$ | 497,072 | |
| Research and development | |
| 734,014 | | |
| 419,362 | |
| Total operating Expenses | |
| 2,008,217 | | |
| 916,434 | |
| Loss from operations | |
| (2,008,217 | ) | |
| (916,434 | ) |
| | |
| | | |
| | |
| Other expense | |
| | | |
| | |
| Impairment of assets | |
| 536,047 | | |
| - | |
| Interest expense | |
| 460,355 | | |
| 343,156 | |
| Total other income | |
| 996,402 | | |
| 343,156 | |
| Net loss | |
| (3,004,619 | ) | |
| (1,259,590 | ) |
| | |
| | | |
| | |
| Net loss per share, basic and diluted | |
$ | (0.08 | ) | |
$ | (0.17 | ) |
| | |
| | | |
| | |
| Weighted average number of shares of common stock outstanding, basic and diluted | |
| 36,396,585 | | |
| 7,351,272 | |
| Balance Sheet Data | |
| | |
| |
| | |
| | |
| |
| | |
December 31, | | |
December 31, | |
| | |
2021 | | |
2020 | |
| Cash | |
$ | 340,956 | | |
$ | 84,402 | |
| Other Current Assets | |
$ | 52,075 | | |
$ | 586,047 | |
| Total assets | |
$ | 710,259 | | |
$ | 694,082 | |
| Total liabilities | |
$ | 974,843 | | |
$ | 594,903 | |
| Preferred stock | |
$ | - | | |
$ | - | |
| Common stock | |
$ | 3,730 | | |
$ | 3,520 | |
| Additional paid-in-capital | |
$ | 3,997,445 | | |
$ | 1,356,799 | |
| Accumulated deficit | |
$ | (4,265,759 | ) | |
$ | (1,261,140 | ) |
| Total stockholders’ equity | |
$ | (264,584 | ) | |
$ | 694,082 | |
Statement of Operations Data:
| | |
Nine Months Ended | | |
Nine Months Ended | |
| | |
September 30, | | |
September 30, | |
| | |
2022 | | |
2021 | |
| Operating costs and expenses | |
| | | |
| | |
| Marketing expenses | |
$ | 446 | | |
$ | 164,500 | |
| General and administrative | |
| 516,796 | | |
| 483,755 | |
| Research and development | |
| 1,158,435 | | |
| 769,023 | |
| Total operating Expenses | |
| 1,675,677 | | |
| 1,417,278 | |
| Loss from operations | |
| (1,675,677 | ) | |
| (1,417,278 | ) |
| | |
| | | |
| | |
| Other expense | |
| | | |
| | |
| Interest expense | |
| 102 | | |
| 29,095 | |
| Interest expense - debt discount | |
| 309,226 | | |
| 286,391 | |
| Interest expense - original issuance costs | |
| 85,875 | | |
| 44,683 | |
| Total other income | |
| 395,203 | | |
| 360,683 | |
| Net loss | |
| (2,070,880 | ) | |
| (1,777,447 | ) |
| | |
| | | |
| | |
| Net loss per share, basic and diluted | |
$ | (0.06 | ) | |
$ | (0.05 | ) |
| | |
| | | |
| | |
| Weighted average number of common shares outstanding, basic and diluted | |
| 37,295,803 | | |
| 36,138,191 | |
Balance Sheet Data
| | |
Nine Months Ended | | |
Year Ended | |
| | |
September 30, | | |
December 31, | |
| | |
2022 | | |
2021 | |
| Cash | |
$ | 28,123 | | |
$ | 340,956 | |
| Other Current Assets | |
$ | 7,254 | | |
$ | 52,075 | |
| Total assets | |
$ | 362,273 | | |
$ | 710,259 | |
| Total liabilities | |
$ | 2,104,375 | | |
$ | 974,843 | |
| Preferred stock | |
$ | - | | |
$ | - | |
| Common stock | |
$ | 3,730 | | |
$ | 3,730 | |
| Additional paid-in-capital | |
$ | 4,590,807 | | |
$ | 3,997,445 | |
| Accumulated deficit | |
$ | (6,336,639 | ) | |
$ | (4,265,759 | ) |
| Total stockholders’ equity (deficit) | |
$ | (1,742,102 | ) | |
| (264,584 | ) |
RISK
FACTORS
You
should carefully consider the risks described below before investing in our securities. Additional risks not presently known to us or
that our management currently deems immaterial also may impair our business operations. If any of the risks described below were to occur,
our business, financial condition, operating results, and cash flows could be materially adversely affected. In such an event, the trading
price of our common stock could decline, and you could lose all or part of your investment. In assessing these risks, you should also
refer to the other information contained in this Prospectus, including our consolidated financial statements and related notes. The risks
discussed below include forward-looking statements, and our actual results may differ substantially from those discussed in these forward-looking
statements.
Risks
Related to Financial Condition
We
are a development-stage therapeutic organization whose primary focus in the foreseeable future will be the clinical progression of Sigyn
Therapy toward market clearance.
We
are a development stage company with no approved medical products.
To date, we have devoted substantially all of our resources to support the development of Sigyn Therapy. This includes the completion
in vitro blood purification validation studies, animal studies, the establishment of initial manufacturing protocols, staffing
our organization, establishing our intellectual property portfolio, drafting regulatory documents and raising capital to support these
activities. However, there is no assurance that we will obtain the capital resources necessary to continue to advance Sigyn Therapy or
other product candidates toward market approval.
We
have incurred significant net losses since inception and do not anticipate that we will generate revenue in the near future. It is expected
that we will continue to incur substantial net losses in the foreseeable future and we may never achieve profitability.
We
are a development-stage medical technology company. Investment in development-stage therapeutic organizations is speculative based on
the need for substantial capital resources and the risk that therapeutic candidates will not receive regulatory approval or become commercially
viable if market cleared. We have incurred losses in each year since inception. Our net losses were approximately $3.0 million and $1.3
million for the years ended December 31, 2021 and 2020, respectively, and our net losses for the nine months ended September
30, 2022 were approximately $1.6 million. As of December 31, 2021 and September 30, 2022, we had an accumulated deficit
of approximately $4.3 million and $6.3 million respectively. We expect to continue to spend significant resources to fund the
clinical progression of Sigyn Therapy and other potential product candidates.
Going
Concern Risk Factor.
As
described in our audited financial statements for the year ended December 31, 2021 contained elsewhere in this prospectus for
that same time period, our independent registered public accounting firm included an explanatory paragraph indicating that our current
liquidity position raises substantial doubt about our ability to continue as a going concern. It is anticipated that we will continue
to operate as a going concern until the completion of this offering; however, there are no assurances that we will be able to
continue our operations if this offering is delayed.
Upon
the completion of this offering, we may require additional capital in the future to fund the continuance of our operations. If we are
unable to raise additional capital when needed, we could be forced to delay, reduce or terminate our clinical development programs.
We
believe that the net proceeds from this offering will be approximately $____ million, based on an assumed public offering price of $[__]
per Class A Unit and Class B Unit, after deducting the estimated underwriting discounts and commissions and estimated offering expenses
payable by us. We believe that such proceeds will fund our operations plan for up to 24 months after the completion of the offering.
Accordingly, we acknowledge that there will be a need to raise additional capital to fund future operations, which may include the continued
clinical progression of Sigyn Therapy and other potential product candidates. However, our business or operations plan may change as
a result of factors currently unknown to us, and we may need to seek additional funds sooner than planned. However, there is no assurance
that we will be able to secure funding when we need it or on favorable terms. Additionally, our ability to raise additional capital
could be adversely impacted by market conditions or a worsening global economic climate.
Purchasers
of our stock will experience dilution.
At
September 30, 2022 and December 31, 2021, we had a net tangible book value of approximately $0.004 and $0.012 per share of our
common stock, respectively. If you purchase our common stock from us in our Offering, you will experience immediate and substantial dilution
to the extent of the difference between the public offering price per share of our common stock (assuming a $
per share public offering price, which is the assumed public offering price set forth on the cover page of this prospectus) and the as
adjusted net tangible book value per share of our common stock immediately after the offering of $
per share (assuming all shares in the Offering are sold at $
per share, which is the assumed public offering price set forth on the cover page of this prospectus).
A
small group of Company officers and directors hold a majority of the control of the Company.
As
of December 22, 2022, the Company’s executive officers and directors beneficially owned approximately 68.9% of the
Company’s outstanding common stock. By virtue of such stock ownership, the principal shareholders are able to control the election
of the members of the Company’s Board of Directors and to generally exercise control over the affairs of the Company. Such concentration
of ownership could also have the effect of delaying, deterring or preventing a change in control of the Company that might otherwise
be beneficial to stockholders. There can be no assurance that conflicts of interest will not arise with respect to such directors or
that such conflicts will be resolved in a manner favorable to the Company.
Intellectual
Property Risk Factors
We
currently own the rights to U.S. and foreign patents pending and patent applications and endeavor to continually improve our intellectual
property position. We consider the protection of our technology to be vital to our business. While we intend to focus primarily on patentable
technology, we may also rely on trade secrets, unpatented property, know-how, regulatory exclusivity, patent extensions and continuing
technological innovation to develop our competitive position. We also own rights to the trademarks Sigyn Therapeutics™ and Sigyn
Therapy™.
Our
success will depend in large part on our ability to protect our proprietary technologies, including Sigyn Therapy, and to operate without
infringing the proprietary rights of third parties. We rely on a combination of patent, trade secret, copyright and trademark laws, as
well as confidentiality agreements, and other agreements to establish and protect our proprietary rights. Our success also depends, in
part, on our ability to avoid infringing patents issued to others. If we were judicially determined to be infringing on any third-party
patent, we could be required to pay damages, alter our products or processes, obtain licenses, or cease sales of products or certain
activities.
It
is possible that our pending patent applications may not result in issued patents, and that we will not develop additional proprietary
products that are patentable, that any patents issued to us may not provide us with competitive advantages or will be challenged by third
parties and that the patents of others may prevent the commercialization of products incorporating our technology. Furthermore, others
may independently develop similar products, duplicate our products or design around our patents. U.S. patent applications are not immediately
made public, so it is possible that a third party may obtain a patent on a technology we are actively using. Additionally, there is a
risk that any patent applications that we file or later obtain could be challenged by third parties and declared invalid or unenforceable.
Patent
law outside the United States is uncertain and currently undergoing review and revisions in many countries. The laws of some countries
may not protect our proprietary rights to the same extent as the laws of the United States. Third parties may attempt to oppose the issuance
of patents to us in foreign countries by initiating opposition proceedings. Opposition proceedings against any of our patent filings
in a foreign country could have an adverse effect on our corresponding patents that may be issued or pending in the United States. In
addition to patent protection, we rely on unpatented trade secrets and proprietary technological expertise. It is possible that others
could independently develop or otherwise acquire substantially equivalent technology or somehow gain access to our trade secrets and
proprietary technological expertise.
We
Face Industry & Competition Risks
Based
on the size of the market opportunity, the industry to treat sepsis and other life-threatening inflammatory conditions is expected to
become extremely competitive. As a development-stage device, Sigyn Therapy faces the challenge of establishing medical industry support,
which will be driven by treatment data resulting from human clinical studies. Should Sigyn Therapy become market cleared, we are likely
to face significant competition. Additionally, we will need to establish large-scale production of Sigyn Therapy in order to be competitive
in the marketplace.
In
the absence of approved drug agents to treat sepsis and other life-threatening disorders, our competition is likely to come from organizations
that develop extracorporeal blood purification therapies. Among these therapies are a cytokine adsorption technology (CytoSorb from Cytosorbents
Corporation); a technology that removes circulating endotoxin (Toraymyxn from Toray Industries); and two devices that target the removal
of pathogens from the bloodstream (the Hemopurifier from Aethlon Medical) and (the Seraph-100 Microbind Affinity Filter from Exthera
Medical).
CytoSorb
is a clinical-stage therapeutic candidate in the United States and market cleared in more than 40 countries outside the U.S. CytoSorb
was recently cleared to treat severe COVID-19 infections under FDA Emergency-Use Authorization (EUA) based on its ability to adsorb inflammatory
cytokines from the bloodstream.
Toraymyxn
is a clinical-stage therapeutic candidate in the United States and broadly market cleared outside the U.S. Toraymyxn houses an immobilized
antibiotic agent with a high specificity to bind circulating endotoxin, a potent activator of sepsis resulting from gram-negative bacterial
infections. In North America, exclusive rights to Toraymyxin are licensed to Spectral Medical, who is conducting FDA approved studies
to treat sepsis.
The
Aethlon Hemopurifier is a clinical-stage therapeutic candidate in the United States. The Hemopurifier has been cleared to treat severe
COVID-19 infections through an FDA IDE supplement and was previously cleared under FDA Emergency-Use Authorization (EUA) to treat Ebola
virus. Immobilized within the Hemopurifier is an affinity lectin that has a high specificity to bind a broad-spectrum of viral pathogens
from the bloodstream.
The
Exthera Seraph-100 Microbind Affinity Filter is a clinical-stage therapeutic candidate in the United States and market cleared outside
the U.S. for the removal of bloodstream pathogens. The Seraph-100 was recently cleared and broadly deployed to treat severe COVID-19
infections under FDA Emergency-Use Authorization (EUA). The Seraph-100 incorporates heparin-coated polyethylene beads that bind both
viral and bacterial pathogens in the bloodstream.
While preclinical in vitro studies have quantified
the reduction of viral pathogens, bacterial toxins and inflammatory mediators from human blood plasma with small-scale
versions of Sigyn Therapy, there is no assurance that we will receive market clearance for our product or be able to establish
scalable manufacturing that would allow us to compete with these and other emerging therapies.
Government
Regulation May Cause Us Delays in Ability to Obtain Approval
Sigyn
Therapy is subject to regulation by numerous regulatory bodies, including the United States Food and Drug Administration (FDA) and comparable
international regulatory agencies. These agencies will require that we comply with applicable laws and regulations governing the development,
testing, manufacturing, labeling, marketing, storage, distribution, advertising and promotion, and post-marketing surveillance of Sigyn
Therapy. As a medical device, the FDA’s Center for Devices and Radiological Health (CDRH) will have primary jurisdiction over the
premarket development, review, and approval of Sigyn Therapy. Failure to comply with applicable requirements could subject us to a variety
of administrative sanctions, such as issuance of warning letters, import detentions, civil monetary penalties and/or judicial sanctions,
such as product seizures, injunctions, and criminal prosecution.
FDA’s
Pre-market Approval (PMA) Pathway May Take a Long Time for Approval of our Product
The
FDA is likely to classify our lead product candidate, Sigyn Therapy, as a significant risk Class III device, which would require extensive
pre-clinical and clinical studies to be conducted along with the submission of a Pre-Market Approval (PMA) application prior to market
clearance consideration by FDA. The commercialization of medical devices in the United States requires either a prior 510(k) clearance,
unless it is exempt, or a PMA from the FDA. Medical devices are classified into one of three classes; Class I, Class II or Class III
which are determined by the degree of risk associated with each medical device and the extent of control needed to provide reasonable
assurance of safety and effectiveness. A Class III device cannot be marketed in the United States unless the FDA approves the device
after submission of a PMA. We believe that Sigyn Therapy will be classified as a Class III device and as such will be subject to a PMA
submission and approval.
A
pre-market approval application must be supported by extensive data, including but not limited to technical, preclinical, clinical trials,
manufacturing and labelling to demonstrate to the FDA’s satisfaction reasonable evidence of safety and effectiveness of the device.
After
a pre-market approval application is submitted, the FDA has 45 days to determine whether the application is sufficiently complete to
permit a substantive review and thus whether the FDA will file the application for review. The FDA has 180 days to review a filed pre-market
approval application, although the review of an application generally occurs over a significantly longer period of time and can take
up to several years. During this review period, the FDA may request additional information or clarification of the information already
provided. Also, an advisory panel of experts from outside the FDA may be convened to review and evaluate the application and provide
recommendations to the FDA as to the approvability of the device.
Although
the FDA is not bound by the advisory panel decision, the panel’s recommendations are important to the FDA’s overall decision-making
process. In addition, the FDA may conduct a preapproval inspection of the manufacturing facility to ensure compliance with the Quality
System Regulation, or QSR. The agency also may inspect one or more clinical sites to assure compliance with FDA’s regulations.
Upon
completion of the PMA review, the FDA may: (i) approve the PMA which authorizes commercial marketing with specific prescribing information
for one or more indications, which can be more limited than those originally sought; (ii) issue an approvable letter which indicates
the FDA’s belief that the PMA is approvable and states what additional information the FDA requires, or the post-approval commitments
that must be agreed to prior to approval; (iii) issue a not approvable letter which outlines steps required for approval, but which are
typically more onerous than those in an approvable letter, and may require additional clinical trials that are often expensive and time
consuming and can delay approval for months or even years; or (iv) deny the application. If the FDA issues an approvable or not approvable
letter, the applicant has 180 days to respond, after which the FDA’s review clock is reset.
The
advancement of Sigyn Therapy will be reliant on substantial funding, of which there is no assurance that we will raise the capital resources
necessary to maintain the continuance of our operations and clinically advance Sigyn Therapy. Even if we obtain market clearance from
FDA to commercialize Sigyn Therapy, there is no assurance that we can successfully compete with other products in the marketplace. Additionally,
competitive technologies could emerge that are more effective in treating life-threatening indications targeted by Sigyn Therapy. Such
competitive products may be advanced by larger organizations that have substantially greater capital resources and marketing capabilities.
Furthermore, Sigyn Therapy may be deemed obsolete should emerging competitive technologies be commercialized prior to market clearance
of Sigyn Therapy. Since inception, our primary focus has been directed toward the advancement of Sigyn Therapy. As of September
30, 2022, we have an accumulated deficit of $6.3 million and a working capital deficit of $1.6 million.
Clinical
Trial Requirements Pose Risk to Obtaining Approval
Human
clinical trials are required to support pre-market approval. In the United States, human clinal studies require the submission of an
Investigational Device Exemption (IDE) to FDA. The IDE application must be supported by appropriate data, such as animal and laboratory
testing results, showing it is safe to test the device in humans and that the testing protocol is scientifically sound. At present, we
are preparing an IDE to submit to FDA. Prior to initiating human studies, our IDE will need to be approved in advance by the FDA for
a specific number of patients at specified study sites. During the trial, we must comply with the FDA’s IDE requirements for investigator
selection, trial monitoring, reporting and recordkeeping. Our clinical trial investigators must obtain patient informed consent, rigorously
follow the investigational plan and study protocol, control the disposition of investigational devices and comply with all reporting
and recordkeeping requirements. Clinical trials of Sigyn Therapy will not be allowed to begin until our IDE application has been approved
by the FDA and the appropriate institutional review boards, or IRBs, at the clinical trial sites. An IRB is an appropriately constituted
group that has been formally designated to review and monitor medical research involving subjects and which has the authority to approve,
require modifications in, or disapprove research to protect the rights, safety and welfare of human research subjects. The FDA or the
IRB at each site at which a clinical trial is being performed may withdraw approval of a clinical trial at any time for various reasons,
including a belief that the risks to study subjects outweigh the benefits or a failure to comply with FDA or IRB requirements. Even if
a trial is completed, the results of clinical testing may not demonstrate the safety and effectiveness of Sigyn Therapy or other product
candidates.
The
success of Sigyn Therapy and other product candidates will depend on several factors, which include:
●
the completion of clinical studies that demonstrate the safety and efficacy of our products; the receipt of market approval from
applicable regulatory authorities, and the completion of post-market studies that may be required by applicable regulatory
authorities;
●
the establishment of commercial manufacturing capabilities and launch of product marketing and commercial sales;
●
the acceptance of Sigyn Therapy or other product candidates by patients, the medical community and third-party payors;
●
obtaining and maintaining healthcare coverage and adequate reimbursement for Sigyn Therapy and other product candidates.
Many
of these factors may be beyond our control, including the time that will be required to complete clinical testing, the regulatory submission
process, and a change in the competitive landscape. It is possible that none of our product candidates will ever obtain regulatory approval,
even if we expend substantial time and resources seeking such approval. If we do not achieve one or more of these factors in a timely
manner or at all, we could experience significant delays or an inability to successfully complete clinical trials, obtain regulatory
approval or, if approved, commercialize our product candidates, which would materially harm our business, financial condition and the
results of our operations.
Our
Pre-clinical Outcomes May Not Be Predictive of Clinical Trial Success
The
results of our pre-clinical in vitro validations and animal studies may not be predictive of human clinical study outcomes. Historically,
therapeutic candidates that perform satisfactorily in pre-clinical and animal studies may nonetheless fail to obtain marketing approval.
If the results of our clinical studies are inconclusive or if there are safety concerns or adverse events associated with our product
candidates, we may:
●
be delayed in obtaining marketing approval for our product candidates, if approved at all;
●
obtain approval for indications or patient populations that are not as broad as intended or desired;
●
be required to change the way our product is administered;
●be required to perform additional clinical studies to support approval or be subject to additional post-marketing testing requirements;
●
have regulatory authorities withdraw their approval of a product or impose restrictions on its distribution in the form of a modified
risk evaluation and mitigation strategy.
Additionally,
our product candidates could potentially cause adverse events that have not yet been predicted. The inclusion of ill patients in our
clinical studies may result in deaths or other adverse medical events due to other therapies or medications that such patients may be
using. As described above, any of these events could prevent us from achieving or maintaining market acceptance of our product candidates
and impair our ability to commercialize our products.
We
will depend on enrollment and retention of patients in our clinical trials for our product candidates. Delays or difficulties enrolling
or retaining patients in our clinical trials could adversely impact our business operations.
The
successful and timely completion of clinical trials will require that we enroll and retain a sufficient number of patient candidates.
Any clinical trials that we conduct could be subject to delays for a variety of reasons, including as a result of patient enrollment
taking longer than anticipated, patient withdrawal, or adverse events. These types of developments could cause us to delay a clinical
trial or halt further development. Patient enrollment depends on many factors, including:
●
the size and nature of the patient population;
● the
severity of the disease, condition or infection under investigation;
●
eligibility criteria for the trial;
●
the proximity of patients to clinical sites;
●
the design of the clinical protocol;
●
the ability to obtain and maintain patient consents;
●
perceived risks and benefits of the product candidate under evaluation;
●
the ability to recruit clinical trial investigators with the appropriate competencies and experience;
●
the risk that patients enrolled in clinical trials will drop out of the trials before the administration of our product candidates or
trial completion;
●
the availability of competing clinical trials;
●
the availability of candidate patients during pandemic outbreaks, such as COVID-19; and
●
the availability of new therapies that are approved for the indication the clinical trial is investigating.
These
factors may make it difficult for us to enroll enough patients to complete our clinical trials in a timely and cost-effective manner.
Delays in the completion of our clinical trials may jeopardize our ability to commence product sales and generate revenue. Additionally,
factors that delay the commencement or completion of clinical trials may establish a basis for FDA to deny the approval of our therapeutic
candidates.
Risks
Related to our Business and Industry
We
are dependent on our Chief Executive Officer.
We
are dependent on our Chief Executive Officer, James A. Joyce, who is integral to our business operations and the development of
our product candidates. The loss of Mr. Joyce’s services could have a material adverse effect on our business operations.
We
have a limited number of employees.
We
are a small organization that maintains a staff of five employees. The departure of any employee could have a material adverse
effect on our business operations.
We
may be adversely affected by current and future pandemic outbreaks.
The
current COVID-19 (“COVID-19”) outbreak and the emergence of future pandemics could have a deleterious impact on our business
operations. As demonstrated by COVID-19, pandemic outbreaks can significantly delay or interrupt crucial business operations. Pandemic
outbreaks may also reduce the availability of human resources or critical supplies that will be required to carry out our clinical and
manufacturing programs. Additionally, stay-at-home and other pandemic outbreak policies could restrict critical personnel from conducting
the core activities necessary to advance Sigyn Therapy and other potential product candidates.
Economic
uncertainty may adversely affect our access to capital, cost of capital and ability to execute our business plan as scheduled.
Generally,
worldwide economic conditions remain uncertain. Access to capital markets is critical to our ability to operate. Traditionally, medical
technology companies have funded their research and development expenditures through raising capital in the equity markets. Declines
and uncertainties in these markets in the past have severely restricted raising new capital and have affected companies’ ability
to continue to expand or fund clinical development efforts. There is no certainty that the capital markets will be conducive to raising
capital on favorable terms. If economic conditions become worse, our future cost of equity or debt capital and access to the capital
markets could be adversely affected. In addition, if we are unable to access the capital markets on favorable terms, our ability to execute
our clinical progression plan would be compromised. Moreover, we rely and intend to rely on third-party vendors, including clinical research
organizations, contract manufacturing organizations and consultants. Global economic conditions may result in a disruption or delay in
the performance of our third-party contractors and suppliers. If such third parties are unable to adequately satisfy their contractual
commitments to us in a timely manner, our business could be adversely affected.
Our
reliance on third-party vendors heightens the risks faced by our business.
We
rely on third-party vendors for certain key aspects of our business, including support for information technology systems and certain
human resource functions. We do not control these partners, but we depend on them in ways that may be significant to us. If these parties
fail to meet our expectations or fulfill their obligations to us, we may fail to receive the expected benefits. In addition, if any of
these third parties fails to comply with applicable laws and regulations in the course of its performance of services for us, there is
a risk that we may be held responsible for such violations as well, which could adversely affect our business, reputation, financial
condition or results of operations.
We
rely on third party organizations to conduct our pre-clinical testing, research and clinical trials.
We
rely on third-party organizations to conduct preclinical studies, and we expect to continue to rely on third parties, such as contract
research organizations (“CROs”), contract manufacturers of clinical supplies, clinical data management organizations, medical institutions
and clinical investigators, to conduct our clinical trials and to conduct some aspects of our research and pre-clinical testing. These
third parties may terminate their engagements with us at any time. If these third parties do not successfully carry out their duties,
meet expected deadlines or conduct our studies in accordance with regulatory requirements or our stated protocols, we will not be able
to obtain, or may be delayed in obtaining, marketing approvals for our product candidates and will not be able to, or may be delayed
in our efforts to, successfully commercialize our product candidates. Furthermore, these third parties may also have relationships with
other entities, some of which may be our competitors. If we are required to enter into alternative arrangements, it could delay our product
development activities.
Upon
commercialization of our products, we may be dependent on third parties to market, distribute and sell our products.
Our
ability to generate revenues may be dependent upon the sales and marketing efforts of any future co-marketing partners and third-party
distributors. At this time, we have not entered into an agreement with any commercialization partner and only plan to do so prior to
commercialization. If we fail to reach an agreement with any commercialization partner, or upon reaching such an agreement that partner
fails to sell a large volume of our products, it may have a negative impact on our business, financial condition and results of operations.
We
will be dependent on third parties for the manufacture of our product candidates. If we experience problems with any of these third parties,
they could delay clinical development or marketing approval of our product candidates or our ability to sell any approved products.
We
do not have any manufacturing facilities. We expect to rely on third-party manufacturers for the manufacture of our product candidates
for clinical trials and for commercial supply of any product candidate for which we obtain marketing approval.
We
may be unable to establish agreements with third-party manufacturers for clinical or commercial supply on terms favorable to us, or at
all. Even if we are able to establish agreements with third-party manufacturers, reliance on third-party manufacturers entails additional
risks, including:
| ● | reliance
on the third party for regulatory compliance and quality assurance; |
| | | |
| ● | the
possible breach of the manufacturing agreement by the third party, including the inability
to supply sufficient quantities or to meet quality standards or timelines; and |
| | | |
| ● | the
possible termination or nonrenewal of the agreement by the third party at a time that is
costly or inconvenient for us. |
Third-party
manufacturers may not be able to comply with U.S. Current Good Manufacturing Practices (cGMPs) or similar regulatory
requirements outside the United States. Our failure, or the failure of our third-party manufacturers, to comply with cGMPs or other
applicable regulations, even if such failures do not relate specifically to our product candidates or approved products, could
result in sanctions being imposed on us or the manufacturers, including fines, injunctions, civil penalties, delays, suspension or
withdrawal of approvals, license revocation, seizures or recalls of product candidates, operating restrictions and criminal
prosecutions, any of which could adversely affect supplies of our product candidates and harm our business and results of
operations.
Any
product that we develop may compete with other product candidates and products for access to these manufacturing facilities. There are
a limited number of manufacturers that operate under cGMPs and that might be capable of manufacturing for us.
Any
performance failure on the part of our manufacturers, including a failure that may not relate specifically to our product candidates
or approved products, could delay clinical development or marketing approval or adversely impact our ability to generate commercial sales.
If our contract manufacturers cannot perform as agreed, we may be required to replace that manufacturer.
Our
anticipated future dependence upon others for the manufacture of our current and future product candidates or products may adversely
affect our future profit margins and our ability to commercialize any product candidates that receive marketing approval on a timely
and competitive basis.
Our
business could be adversely affected by reliance on sole suppliers.
Notwithstanding
our current multiple supplier approach, certain essential product components may be supplied in the future by sole, or a limited group
of, suppliers. Most of our products and components are purchased through purchase orders rather than through long term supply agreements
and large volumes of inventory may not be maintained. There may be shortages and delays in obtaining certain product components. Disruption
of the supply or inventory of components could result in a significant increase in the costs of these components or could result in an
inability to meet the demand for our products. In addition, if a change in the manufacturer of a key component is required, qualification
of a new supplier may result in delays and additional expenses in meeting customer demand for products. These factors could adversely
affect our revenues and ability to retain our experienced sales force.
Changes
in financial accounting standards or practices may cause adverse, unexpected financial reporting fluctuations and affect our reported
results of operations.
We
are required to prepare our financial statements in accordance with generally accepted accounting principles in the United States of
America (“GAAP”), which is periodically revised and/or expanded. From time to time, we are required to adopt new or revised
accounting standards issued by recognized authoritative bodies, including the FASB and the SEC. It is possible that future accounting
standards we are required to adopt may require additional changes to the current accounting treatment that we apply to our financial
statements and may require us to make significant changes to our reporting systems. Such changes could result in a material adverse impact
on our business, results of operations and financial condition.
We
have a limited operating history, which may make it difficult to evaluate our business and prospects.
We
face the risks associated with businesses in their early stages, with limited operating histories and whose prospects are hard to evaluate.
Any evaluation of our business and our prospects must be considered in light of the uncertainties, delays, difficulties and expenses
commonly experienced by companies at this stage, which generally include unanticipated problems and additional costs relating to the
development and testing of products, product approval or clearance, regulatory compliance, production, product introduction and marketing,
and competition. Many of these factors are beyond the control of our management. In addition, our performance will be subject to other
factors beyond our control, including general economic conditions and conditions in the healthcare industry.
Market
acceptance of Sigyn Therapy and other product candidates will be vital to our future success.
The
commercial success of our products is dependent upon their acceptance by the intended markets. Our product candidates may not gain or
maintain any significant degree of market acceptance among consumers, surgeons or healthcare providers, or acceptance by third-party
payors, such as health insurance companies, Medicaid and Medicare. We cannot be certain that our products will be used by the medical
community, even upon market approval of our product candidates.
Market
acceptance will be dependent on numerous factors, many of which are not under our control, including:
| |
● |
the
safety and efficacy of our products and product candidates, as demonstrated in clinical trials and after commercialization; |
| |
● |
favorable
regulatory approval and product labeling; |
| |
● |
the
ease of use of our product and any related instrumentation that accompany our product; |
| |
● |
our
ability to educate and train doctors on the advantages of our product; |
| |
● |
the
price of any approved product relative to alternative technologies; and |
| |
● |
the
availability of third-party reimbursement. |
If
our products and product candidates do not achieve significant market acceptance, our potential for revenues and profitability would
be adversely affected.
Our
employees, independent contractors, principal investigators, consultants, vendors and clinical research organizations, or CROs,
could engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements.
We
are exposed to the risk that our employees, independent contractors, principal investigators, consultants, vendors and CROs may engage
in fraudulent or other illegal activity. Misconduct by these persons could include intentional, reckless or negligent conduct or unauthorized
activity that violates laws or regulations, including those laws requiring the reporting of true, complete and accurate information
to the FDA or foreign regulatory authorities; manufacturing standards; federal, state and foreign healthcare fraud and abuse laws and
data privacy; or laws that require the true, complete and accurate reporting of financial information or data. In particular, sales,
marketing and other business arrangements in the healthcare industry are subject to extensive laws intended to prevent fraud, kickbacks,
self-dealing and other abusive practices. These laws may restrict or prohibit a wide range of business activities, including research,
manufacturing, distribution, pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business
arrangements. Activities subject to these laws also involve the improper use of information obtained in the course of clinical trials,
which could result in regulatory sanctions or other actions stemming from a failure to comply with such laws or regulations, and serious
harm to our reputation. In addition, federal procurement laws impose substantial penalties for misconduct in connection with government
contracts and require certain contractors to maintain a code of business ethics and conduct. If any such actions are instituted against
us, we may have to terminate employees or others involved and the impact of such termination can result in our experiencing delays and
additional costs associated with replacing the services being provided. If we are not successful in defending ourselves or asserting
our rights, those actions could have a significant impact on our business, including the imposition of civil, criminal and administrative
penalties, damages, monetary fines, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs,
FDA debarment, contractual damages, reputational harm, diminished profits and future earnings, and curtailment of our operations, any
of which could adversely affect our ability to operate our business and our operating results.
U.S.
legislative or FDA regulatory reforms may make it more difficult and costly for us to obtain regulatory approval of future product candidates
and to manufacture, market and distribute our products after approval is obtained.
From
time to time, legislation is drafted and introduced in Congress that could significantly change the statutory provisions governing the
regulatory approval, manufacture and marketing of regulated products or the reimbursement thereof. In addition, FDA regulations and guidance
are often revised or reinterpreted by the FDA in ways that may significantly affect our business and our products. Any new regulations
or revisions or reinterpretations of existing regulations may impose additional costs or lengthen review times of future products. In
addition, FDA regulations and guidance are often revised or reinterpreted by the agency in ways that may significantly affect our business
and our products. It is impossible to predict whether legislative changes will be enacted or FDA regulations, guidance or interpretations
changed, and what the impact of such changes, if any, may be.
Information
Technology Risks
Our
internal information technology (IT) systems could be compromised, damaged, breached or destroyed. IT risks include hardware and software
failure, human error, spam, viruses, malicious attacks, industrial espionage, as well as natural disasters such as fires, earthquakes,
hurricanes or floods. IT system failures may affect our ability to run our operations. Operational impact of IT failures or breaches
may result in loss of productivity and a reduced ability to advance our clinical programs. Failures or breaches of our IT systems could
also result in the loss or corruption of confidential data or in the theft of data or critical information.
Additionally,
the increased sophistication and activities of perpetrators of cyber-attacks have resulted in an increase in information security risks
in recent years. Hackers develop and deploy viruses, worms, and other malicious software programs that attack products and services and
gain access to networks and data centers. If we experience difficulties maintaining existing systems or implementing new systems, we
could incur significant losses due to disruptions in our operations. Additionally, these systems may contain valuable proprietary and
confidential information and may contain personal data of employees, third-party vendors, and collaborators. A security breach could
result in disruptions of our internal systems and business applications, harm to our competitive position from the compromise of confidential
business information, or subject us to liability under laws that protect personal data. As cyber threats continue to evolve, we may be
required to expend additional resources to continue to enhance our information security measures and/or to investigate and remediate
any information security vulnerabilities. Any of these consequences could adversely affect business.
Risk
Factors Related to Our Common Stock
The
price of our common stock may be volatile, and a shareholder’s investment in our common stock could suffer a decline in value.
There
has been significant volatility in the volume and market price of our common stock, and such volatility may continue in the future. In
addition, factors such as quarterly variations in our operating results, actions by governmental agencies, national economic and stock
market considerations as well as other events and circumstances beyond our control, including the effects of pandemic outbreaks, could
have a significant impact on the future market price of our common stock and the relative volatility of such market price.
A
prolonged decline in the price of our common stock could result in a reduction in the liquidity of our common stock and a reduction in
our ability to raise capital. If we are unable to raise the funds required for all of our planned operations and key initiatives, we
may be forced to allocate funds from other planned uses, which may negatively impact our business and operations, including our ability
to develop new products and continue our current operations.
Our
common stock is currently traded on the OTCQB® Venture Market, which may have an unfavorable impact on our stock price and
liquidity.
While
we plan to submit an application to list our common stock on the Nasdaq Capital Market, our stock currently trades
on the OTCQB® Venture Market. The OTCQB® Venture Market is significantly more limited market than the national
securities exchanges such as the New York Stock Exchange, or Nasdaq stock exchange, and there are lower financial or qualitative standards
that a company must meet to have its stock traded on the OTCQB® Venture Market. OTCQB® Venture Market is an inter-dealer
quotation system much less regulated than the major exchanges, and trading in our common stock may be subject to abuses, volatility and
shorting, which may have little to do with our operations or business prospects. This volatility could depress the market price of our
common stock for reasons unrelated to operating performance. The Financial Industry Regulatory Authority (“FINRA”) has adopted
rules that require a broker-dealer to have reasonable grounds for believing an investment is suitable for that customer when recommending
an investment to a customer. FINRA believes that there is a high probability that speculative low-priced securities will not be suitable
for some customers and may make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may
result in a limited ability to buy and sell our stock. Consummation of this offering is contingent upon our common stock being accepted
for listing on Nasdaq.
Our
common shares are currently subject to the “Penny Stock” rules of the SEC, and the trading market in our securities will
likely be limited, which makes transactions in our stock cumbersome and may reduce the value of an investment in our stock.
The
Securities and Exchange Commission has adopted Rule 15g-9 which establishes the definition of a “penny stock,” for the purposes
relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00
per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require:
| |
● |
That
a broker or dealer approve a person’s account for transactions in penny stocks; and |
| |
● |
The
broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quality of the
penny stock to be purchased. |
In
order to approve a person’s account for transactions in penny stocks, the broker or dealer must:
| |
● |
Obtain
financial information and investment experience objectives of the person; and |
| |
● |
Make
a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge
and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. |
The
broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the Commission relating
to the penny stock market, which, in highlight form:
| |
● |
Sets
forth the basis on which the broker or dealer made the suitability determination; and |
| |
● |
That
the broker or dealer received a signed, written agreement from the investor prior to the transaction. |
Generally,
brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more
difficult for investors to dispose of our common stock and cause a decline in the market value of our stock.
Disclosure
also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commission’s
payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies
available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent
price information for the penny stock held in the account and information on the limited market in penny stocks.
We
do not intend to pay any cash dividends on our shares of common stock in the near future, so our shareholders will not be able to receive
a return on their shares unless they sell their shares.
We
do not anticipate paying any cash dividends on our common stock in the foreseeable future. There is no assurance that future dividends
will be paid, and if dividends are paid, there is no assurance with respect to the amount of any such dividend. Unless we pay dividends,
our shareholders will not be able to receive a return on their shares unless they sell such shares.
Raising
additional capital may cause dilution to our existing stockholders and investors in this offering, restrict our operations or require
us to relinquish rights to our product candidates on unfavorable terms to us.
We
may seek additional capital through a variety of means, including through private and public equity offerings and debt financings, collaborations,
strategic alliances and marketing, distribution or licensing arrangements. To the extent that we raise additional capital through the
sale of equity or convertible debt securities, or through the issuance of shares under other types of contracts, or upon the exercise
or conversion of outstanding options, warrants, convertible debt or other similar securities, the ownership interests of our stockholders
will be diluted, and the terms of such financings may include liquidation or other preferences, antidilution rights, conversion and exercise
price adjustments and other provisions that adversely affect the rights of our stockholders, including rights, preferences and privileges
that are senior to those of our holders of common stock in terms of the payment of dividends or in the event of a liquidation. In addition,
debt financing, if available, could include covenants limiting or restricting our ability to take certain actions, such as incurring
additional debt, making capital expenditures, entering into licensing arrangements, or declaring dividends and may require us to grant
security interests in our assets. If we raise additional funds through collaborations, strategic alliances, or marketing, distribution
or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams,
product or product candidates or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds
through equity or debt financings when needed, we may need to curtail or cease our operations.
There is no established market for the Series
B Preferred Stock or Series A Warrants being offered in this offering.
There is no established trading market for the
Series B Preferred Stock or Series A Warrants and we do not expect a market to develop. In addition, we do not intend to apply for the
listing of the Series B Preferred Stock or Series A Warrants on any national securities exchange or other trading market. Without an
active trading market, the liquidity of the Series B Preferred Stock or Warrants will be limited.
Holders of Series B Preferred Stock will
have limited voting rights.
Except with respect to certain material changes
in the terms of the Series B Preferred Stock and certain other matters and except as may be required by Delaware law, holders of Series
B Preferred Stock will have no voting rights. Holders of Series B Preferred Stock will have no right to vote for any members of our board
of directors.
The Series A Warrants are speculative.
The Series A Warrants offered in this offering
do not confer any rights of common stock ownership on their holders, such as voting rights or the right to receive dividends, but rather
merely represent the right to acquire shares of our common stock at a fixed price for a limited period of time. Specifically, commencing
on the date of issuance, holders of the Series A Warrants may exercise their right to acquire the common stock and pay an exercise price
of $____ per share (110% of the public offering price of our Class A Units in this offering), prior to five years from the date of issuance,
after which date any unexercised warrants will expire and have no further value. Moreover, following this offering, the market value
of the Series A Warrants is uncertain and there can be no assurance that the market value of the Series A Warrants will equal or exceed
their public offering price. There can be no assurance that the market price of the common stock will ever equal or exceed the exercise
price of the Series A Warrants, and consequently, whether it will ever be profitable for holders of the warrants to exercise the Series
A Warrants.
The Series A Warrants may not have any
value and if an active, liquid trading market for the Series A Warrants does not develop, you may not be able to sell your warrants quickly
or at or above the price you paid for them.
The Series A Warrants issued in this offering
will be immediately exercisable and expire five years after their issuance. The Series A Warrants will have an initial exercise price
equal to $ . In the event that our common stock price does not exceed
the exercise price of the warrants during the period when the warrants are exercisable, the warrants may not have any value.
Prior to this offering, there has been no public
market for any of our warrants and we do not intend to list the Series A Warrants on the Nasdaq Capital Market or any other exchange.
As a result, an active trading market may not develop for the Series A Warrants to be sold in this offering or, if developed, may not
be sustained, and the market for the Series A Warrants may be volatile or may decline regardless of our operating performance.
The lack of an active market may impair your ability to sell your Series A Warrants at the time you wish to sell them or at a price that
you consider reasonable.
The exercise price of the Series A Warrants
offered by this prospectus will not be adjusted for certain dilutive events.
The exercise price of the Series A Warrants offered
by this prospectus are subject to adjustment for certain events, including, but not limited to, the payment of a stock dividend, stock
splits, certain issuances of capital stock, options, convertible securities and other securities. However, the exercise prices will not
be adjusted for dilutive issuances of securities and there may be transactions or occurrences that may adversely affect the market price
of our common stock or the market value of such warrants without resulting in an adjustment of the exercise prices of such warrants.
There
is no assurance that we will fulfill or maintain the listing requirements of the NASDAQ.
We
are applying to list our common stock on the Nasdaq Capital Market, a national securities exchange. An approval of our listing application
by NASDAQ will be subject to, among other things, our ability to fulfill all of the listing requirements of NASDAQ. There is no assurance
that our securities will become NASDAQ listed and even if our shares become NASDAQ listed, there is no assurance that an active trading
market for our securities will develop or be sustained. If our common stock is not accepted for listing on NASDAQ, we will not proceed
with the consummation of this offering.
In
addition, NASDAQ has rules for continued listing, including, without limitation, minimum market capitalization and other requirements.
Failure to maintain our listing, or de-listing from NASDAQ, would make it more difficult for shareholders to dispose of our securities
and more difficult to obtain accurate price quotations on our securities. This could have an adverse effect on the price of our common
shares. Our ability to issue additional securities for financing or other purposes, or otherwise to arrange for any financing we may
need in the future, may also be materially and adversely affected if our common shares and/or other securities are not traded on a national
securities exchange.
If
we are unable to meet the NASDAQ listing criteria, our common shares may continue to trade on the OTC Pink Sheets.
We are applying for our common stock to be listed
on NASDAQ, a national securities exchange. The NASDAQ requires companies desiring to list their common stock to meet certain listing
criteria including total number of shareholders: minimum stock price (which will necessitate that we effect a reverse split of our issued
and outstanding common stock before listing), total value of public float, and in some cases total shareholders’ equity and market
capitalization. Our failure to meet such applicable listing criteria could prevent us from listing our common stock on NASDAQ, and
if we do not list on NASDAQ, we will not proceed with this offering. In the event we are unable to have our shares traded on NASDAQ,
our common stock may continue to trade on the OTC Pink Sheets, which is less liquid and more volatile than the NASDAQ. Our failure to
have our shares traded on NASDAQ could make it more difficult for you to trade our shares, could prevent our common stock trading on
a frequent and liquid basis and could result in the value of our common stock being less than it would be if we were able to list our
shares on NASDAQ.
Our Amended and Restated Certificate of
Incorporation provides that the Court of Chancery in the State of Delaware is the sole and exclusive forum for substantially all disputes
between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes
with us or our directors, officers or employees.
Our Amended and Restated Certificate of Incorporation,
or our Certificate of Incorporation, provides that, unless our Board of Directors consents to an alternative forum, the Court of Chancery
in the State of Delaware will be the sole and exclusive forum for: (i) any derivative action or proceeding brought by or on our behalf;
(ii) any direct action asserting a claim against us or any of our directors or officers pursuant to any of the provisions of the General
Corporation Law of the State of Delaware, or our Certificate of Incorporation; (iii) any action
asserting a claim of breach of fiduciary duties owed by any of our directors, officers or other employees to our stockholders; or (iv)
any action asserting a violation of Delaware decisional law relating to our internal affairs. This provision does not apply to (a) actions
in which the Court of Chancery in the State of Delaware concludes that an indispensable party is not subject to the jurisdiction of Delaware
courts, or (b) actions in which a federal court has assumed exclusive jurisdiction to a proceeding. This choice of forum provision
is not intended to apply to any actions brought under the Securities Act of 1933, as amended, or the Securities Act, or the Securities
Exchange Act of 1934, as amended, or the Exchange Act. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all
suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. As a result, the
exclusive forum provision will not apply to suits brought to enforce any duty or liability created by the Exchange Act or any other claim
for which the federal courts have exclusive jurisdiction. There is uncertainty as to whether a court would enforce this provision
with respect to claims under the Securities Act. However, our Certificate of Incorporation does not relieve us of our duties to comply
with federal securities laws and the rules and regulations thereunder, and our stockholders will not be deemed to have waived our compliance
with these laws, rules and regulations. Our Certificate of Incorporation also provides that any person or entity purchasing or otherwise
acquiring any interest in shares of our capital stock will be deemed to have notice of and consented to this choice of forum provision.
This choice of forum provision may impose additional
litigation costs on stockholders in pursuing such claims, particularly if the stockholders do not reside in or near the State of Delaware.
Additionally, this choice of forum provision may limit our stockholders’ ability to bring a claim in a judicial forum that they
find favorable for disputes, which may discourage the filing of such lawsuits.
We
will have broad discretion in the use of the net proceeds to us from this offering and may not use them effectively.
We
will have broad discretion in the application of the net proceeds to us from this offering, including for any of the purposes described
in the section titled “Use of Proceeds,” and you will not have the opportunity as part of your investment decision to assess
whether the net proceeds are being used appropriately. Because of the number and variability of factors that will determine our use of
the net proceeds from this offering, our ultimate use may vary substantially from our currently intended use. Investors will need to
rely upon the judgment of our management with respect to the use of proceeds. Pending use, we may invest the net proceeds from this offering
in investment-grade, interest-bearing securities, such as money market accounts, certificates of deposit, commercial paper and guaranteed
obligations of the U.S. government that may not generate a high yield for our stockholders. If we do not use the net proceeds that we
receive in this offering effectively, our business, financial condition, results of operations and prospects could be harmed, and the
market price of our common stock could decline.
We
are an “emerging growth company,” and we cannot be certain if the reduced reporting and disclosure requirements applicable
to emerging growth companies will make our common stock less attractive to investors.
We
are an “emerging-growth company,” as defined in the JOBS Act, and we have elected to take advantage of certain exemptions
from various reporting requirements that are applicable to other public companies that are not “emerging growth companies,”
including the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, or Section 404, reduced disclosure obligations
regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding
advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Pursuant to
Section 107 of the JOBS Act, as an emerging growth company, we have elected to use the extended transition period for complying with
new or revised accounting standards until those standards would otherwise apply to private companies. As a result, our financial statements
will not be comparable to the financial statements of issuers who are required to comply with the effective dates for new or revised
accounting standards that are applicable to public companies, which may make our common stock less attractive to investors. In addition,
if we cease to be an emerging growth company, we will no longer be able to use the extended transition period for complying with new
or revised accounting standards.
We
will remain an emerging-growth company until the earliest of: (1) the last day of the fiscal year following the fifth anniversary of
this offering; (2) the last day of the first fiscal year in which our annual gross revenue is $1.235 billion or more; (3) the
date on which we have, during the previous rolling three-year period, issued more than $1 billion in non-convertible debt securities;
and (4) the date we qualify as a “large accelerated filer,” with at least $700 million of equity securities held by non-affiliates.
We
cannot predict if investors will find our common stock less attractive as a result of choosing to rely on these exemptions. For example,
if we do not adopt a new or revised accounting standard, our future results of operations will not be as comparable to the results of
operations of certain other companies in our industry that adopted such standards. If some investors find our common stock less attractive
as a result, there may be a less active trading market for our common stock, and our stock price may be more volatile.
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus contains forward-looking statements concerning our business, operations and financial performance and condition, as well as
our plans, objectives and expectations for our business operations and financial performance and condition. Any statements contained
herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking
statements by terminology such as “aim”, “anticipate”, “assume”, “believe”, “contemplate”,
“continue”, “could”, “due”, “estimate”, “expect”, “goal”, “intend”,
“may”, “objective”, “plan”, “predict”, “potential”, “positioned”,
“pioneer”, “seek”, “should”, “target”, “will”, “would” and other
similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms or other comparable
terminology.
These
forward-looking statements include, but are not limited to, statements about:
| ● |
our
use of net proceeds from this offering; |
| |
|
| ● |
the
continued development and growth of the demand and markets for our products; |
| |
|
| ● |
our
ability to raise future capital through debt or equity financing transactions; |
| |
|
| ● |
our
ability to attract and retain key employees; |
| |
|
| ● |
our
ability to manage growth in our business; and |
| |
|
| ● |
our
ability to identify and successfully execute strategic partnerships. |
Although
we base the forward-looking statements contained in this prospectus on assumptions that we believe are reasonable, we caution you that
actual results and developments (including our results of operations, financial condition and liquidity, and the development of the industry
in which we operate) may differ materially from those made in or suggested by the forward-looking statements contained in this prospectus.
In addition, even if results and developments are consistent with the forward-looking statements contained in this prospectus, those
results and developments may not be indicative of results or developments in subsequent periods. Certain assumptions made in preparing
the forward-looking statements contained in this prospectus include:
| ● |
our
ability to implement our business strategies; |
| |
|
| ● |
our
ability to complete the development of products on time and on budget; |
| |
|
| ● |
our
competitive advantages; |
| |
|
| ● |
our
ability to obtain and maintain financing on acceptable terms; |
| |
|
| ● |
the
impact of competition; |
| |
|
| ● |
the
changes and trends in the life sciences industry; |
| |
|
| ● |
changes
in laws, rules and regulations; |
| |
|
| ● |
our
ability to maintain good business relationships with our exclusive independent operators and strategic partners; |
| |
|
| ● |
our
ability to keep pace with changing consumer preferences; |
| |
|
| ● |
our
ability to protect our intellectual property; |
| |
|
| ● |
our
ability to identify, manage and integrate acquisitions; |
| |
|
| ● |
our
ability to retain key personnel; and |
| |
|
| ● |
the
absence of material adverse changes in our industry or the global economy, including as a result of the COVID-19 pandemic. |
These
forward-looking statements are based on our current expectations, estimates, forecasts and projections about our business and the industry
in which we operate and management’s beliefs and assumptions, and are not guarantees of future performance or development and involve
known and unknown risks, uncertainties and other factors that are in some cases beyond our control. As a result, any or all of our forward-looking
statements in this prospectus may turn out to be inaccurate. Factors that may cause actual results to differ materially from current
expectations include, among other things, those listed under “Risk Factors” and elsewhere in this prospectus. Potential investors
are urged to consider these factors carefully in evaluating the forward-looking statements. These forward-looking statements speak only
as of the date of this prospectus. Except as required by law, we assume no obligation to update or revise these forward-looking statements
for any reason, even if new information becomes available in the future. You should, however, review the factors and risks we describe
in the reports we will file from time to time with the SEC, after the date of this prospectus. See “Where You Can Find More Information”.
This
prospectus contains estimates, projections and other information concerning our industry, our business, and the markets for our products.
Information that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties,
and actual events or circumstances may differ materially from events and circumstances that are assumed in this information. Unless otherwise
expressly stated, we obtained this industry, business, market and other data from our own internal estimates and research as well as
from reports, research surveys, studies and similar data prepared by market research firms and other third parties, industry, medical
and general publications, government data and similar sources.
In
addition, assumptions and estimates of our and our industry’s future performance are necessarily subject to a high degree of uncertainty
and risk due to a variety of factors, including those described in “Risk Factors”. These and other factors could cause our
future performance to differ materially from our assumptions and estimates.
USE
OF PROCEEDS
We estimate that the net proceeds from the sale of
_____Class A Units (assuming no purchase of Class B Units) will be approximately $____ million, or approximately $____
million if the underwriter exercises in full its option to purchase additional shares of our common stock and/or Series A Warrants,
based on an assumed public offering price of $ per Class A Unit, after deducting the estimated underwriting discounts and commissions
and estimated offering expenses payable by us. Each $1.00 increase (decrease) in the assumed public offering price of $____ per Class
A Units would increase (decrease) the net proceeds to us from this offering by approximately $___ million, or approximately $___
million if the underwriter exercises its over-allotment option in full, assuming the number of Class A Units offered by us, as
set forth on the cover page of this prospectus, remain the same and after deducting estimated underwriting discounts and commissions
and estimated offering expenses payable by us.
The
expected use of net proceeds of this offering represents our current intentions based upon our present plan and business conditions.
As of the date of this prospectus, we cannot specify with certainty all of the particular uses for the net proceeds to be received upon
the completion of this offering. The amounts and timing of our actual use of net proceeds will vary depending on numerous factors. As
a result, management will have broad discretion in the application of the net proceeds, and investors will be relying on our judgment
regarding the application of the net proceeds of this offering. We currently estimate that we will use the net proceeds from this offering
as follows: ______________________ We have presumed that we will receive aggregate gross proceeds of $____ million and deducted $___
million payable in offering costs, commissions and fees.
We
intend to use the net proceeds from this offering as follows:
| ● |
Approximately
34% to fund research and the continued development of Sigyn Therapy; and |
| |
|
| ● |
Approximately
66% for working capital and other general corporate purposes, including the additional costs with being a public company. |
Based
on our current business plans, we believe that the net proceeds of this offering, together with our existing cash and cash equivalents
will enable us to fund our operating expenses and capital expenditure requirements for approximately the next two years from the date
of this prospectus.
We
believe the net proceeds will enable us to complete the first-in-human feasibility study of Sigyn Therapy in End-Stage Renal Disease
patients suffering from excel inflammation and/or endotoxemia in additional to pursing additional product advancements. In addition,
we will begin development and testing of ChemoPrepTM and ChemoPure TM with a primary objective to enhance tumor
site delivery of chemotherapy and reduce its toxicity and secondary objective to reduce treatment dosing without sacrificing patient
benefit. The company does not intend to discharge any indebtedness with the proceeds of the transaction.
This
expected use of proceeds from this offering represents our intentions based upon current plans and business conditions. As of the date
of this prospectus, we cannot predict with certainty all of the particular uses for the net proceeds to be received upon the completion
of this offering or the amounts that we will actually spend on the uses set forth above.
The
amount and timing of our actual expenditures will depend on numerous factors, including the results of our research and development,
the anticipated growth out our business and any unforeseen cash needs. As a result, our management will have broad discretion over the
use of proceeds from this offering.
The
use of the proceeds represents management’s estimates based upon current business and economic conditions. We reserve the right
to use of the net proceeds we receive in the offering in any manner we consider to be appropriate. Although our Company does not contemplate
changes in the proposed use of proceeds, to the extent we find that adjustment is required for other uses by reason of existing business
conditions, the use of proceeds may be adjusted. The actual use of the proceeds of this offering could differ materially from those outlined
above as a result of several factors including those set forth under “Risk Factors” and elsewhere in this prospectus.
DETERMINATION
OF OFFERING PRICE
The
offering price of the Class A Units and Class B Units will be negotiated between the underwriters and us considering our historical performance
and capital structure, prevailing market conditions, and overall assessment of our business. Our common stock currently trades on the
OTCQB® Venture Market under the symbol “SIGY.” On November 4, 2022, the last reported sale price of our common
stock was $0.26 per share.
MARKET
FOR OUR COMMON STOCK AND RELATED STOCKHOLDER MATTERS
Our
common stock currently trades on the OTCQB® Venture Market.
As
of December 22, 2022, we had approximately 306 shareholders of record of our shares of common stock.
We
intend to apply to list our common stock on the Nasdaq Capital Market under the symbol “SIGY.” No assurance can be given
that such application will be approved or that a trading market will develop. If, for whatever reason, Nasdaq does not confirm
the listing of our common stock on Nasdaq prior to the pricing of the offering, we will not be able to consummate and will terminate
this offering.
DIVIDEND
POLICY
We
have never paid any cash dividends on our common shares. We anticipate that we will retain funds and future earnings to support operations
and to finance the growth and development of our business. Therefore, we do not expect to pay cash dividends in the foreseeable future
following this offering. Any future determination to pay dividends will be at the discretion of our Board of Directors and will depend
on our financial condition, results of operations, capital requirements and other factors that our Board of Directors deems relevant.
In addition, the terms of any future debt or credit financings may preclude us from paying dividends.
CAPITALIZATION
The
following table sets forth our capitalization and cash as of September 30, 2022:
| |
● |
on
an actual basis; |
| |
|
|
| |
● |
on a pro forma basis to reflect the conversion of senior
secured debentures; and |
| |
|
|
| |
● |
on
a pro forma as adjusted basis to reflect the sale by us of ______ Class A Units (assuming
no Class B Units are purchased) at the assumed public offering price of $____ per Class
A Unit, after deducting the underwriting discounts and commissions and estimated offering
costs payable by us; and |
The
pro forma as adjusted information below is illustrative only and our capitalization following the completion of this offering will be
adjusted based on the actual public offering price and other terms of this offering determined at pricing.
You
should read this table together with the section in this prospectus entitled “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” and our financial statements and related notes included elsewhere in this prospectus. Numbers
are expressed in thousands (U.S. dollars) except share and per share data.
| | |
As of September 30, 2022 | |
| | |
| | |
| | |
Proforma as, | |
| Capitalization in U.S. Dollars in thousands (except share data) | |
Actual | | |
Pro Forma | | |
As Adjusted | |
| Cash | |
$ | 7 | | |
$ | 8,247 | | |
$ | 8,254 | |
| Notes payable and senior secured debentures | |
| 945 | | |
| (945 | ) | |
| - | |
| Common stock, $0.0001 par value per share, 1,000,000,000 shares authorized; 37,295,803 shares issued
and outstanding; 44,930,016 shares issued and outstanding pro forma as adjusted | |
$ | 4 | | |
$ | 0.2 | | |
$ | 4 | |
| Additional paid in capital | |
| 4,423 | | |
| 2,553 | | |
| 6,976 | |
| Accumulated deficit | |
| (5,610 | ) | |
| - | | |
| (5,610 | ) |
| Accumulated other comprehensive income | |
| - | | |
| - | | |
| - | |
| Total stockholders’ equity | |
| (1,183 | ) | |
| 2,553 | | |
| 1,370 | |
| Total Capitalization | |
$ | (238 | ) | |
$ | 1,608 | | |
$ | 1,370 | |
The
number of common shares that will be outstanding after this offering set forth above is based on 37,295,803 common shares outstanding
as of September 30, 2022.
Unless
specifically stated otherwise, all information in this prospectus assumes:
| |
● |
assumes no exercise by the
underwriters of their option to purchase up to additional shares of our common stock and/or Series A Warrants from us to cover
over-allotments, if any; |
| |
● |
assumes no exercise of the
representative’s warrants or Series A Warrants to be issued upon consummation of this offering at an exercise price equal
to 110% of the initial offering price of the common stock; |
| |
● |
assumes no shares of Series B Preferred Stock are sold in this offering; |
| |
● |
assumes
no exercise of outstanding warrants to purchase shares of the Company’s common stock at an exercise price of $[__]; and |
| |
● |
excludes shares of common stock to be reserved for future issuance
under our equity incentive plan, which will be effective upon the completion of this offering. |
To the extent we sell any Class B Units in this
offering, the same aggregate number of common stock equivalents resulting from this offering would be convertible under the Series B
Preferred Stock issued as part of the Class B Units.
| (1) |
A
$1.00 increase or decrease in the assumed public offering price per Class A Units would increase or decrease our pro forma
as adjusted cash and cash equivalents, additional paid-in capital, total shareholders’ equity and total capitalization by approximately
$___ million assuming the number of Class A Units offered by us, as set forth on the cover page of this prospectus, remains
the same and after deducting the underwriting discount and estimated offering expenses payable by us. |
DILUTION
If
you invest in our shares in this offering, your ownership interest will be diluted to the extent of the difference between the initial
public offering price per common share of in this offering and the as adjusted net tangible book value per share immediately after this
offering. We calculate net tangible book value per share by dividing our net tangible book value, which is tangible assets less total
liabilities less debt discounts, by the number of our outstanding common shares as of September 30, 2022. Our historical net tangible
book value (deficit) as of September 30, 2022, was approximately $0.015 million or $0.004 per common share.
After
giving effect to the sale of a _____ Class A Units at an assumed shares at $ per share (and assuming no sale of Class B Units),
after deducting the underwriting discounts and commissions and estimated offering costs payable by us, our as adjusted net tangible
book value (deficit) as of December 31, 2021, would have been approximately $ million, or per common share. This represents an immediate
increase in as adjusted net tangible book value of $ per share to existing shareholders and an immediate dilution of $ per share to investors
purchasing our common shares in this offering at the assumed public offering price.
The
following table illustrates per share dilution as of September 30, 2022:
| Assumed public offering price per common share | |
| | | |
$ | - | |
| Net tangible book value (deficit) per share as of September 30, 2022 | |
$ | .004 | | |
| | |
| Increase in net tangible book value (deficit) per share attributable to this offering | |
$ | - | | |
| | |
| Net tangible book value (deficit) per share after this offering | |
| | | |
$ | - | |
| Dilution per share to investors participating in this offering | |
| | | |
$ | - | |
Each
$1.00 increase (decrease) in the assumed public offering price per Class A Unit would increase (decrease) our as adjusted net
tangible book value (deficit) after this offering by approximately $___ million, or approximately $____ per share, and the dilution per
share to new investors by approximately $____ per share, assuming that the number of shares offered by us, as set forth on the cover
page of this prospectus, remain the same and after deducting the estimated underwriting discounts and commissions and estimated offering
expenses payable by us. We may also increase or decrease the number of Class A Units we are offering. An increase of 500,000 Class
A Units in the number of Class A Units offered by us would increase our as adjusted net tangible book value (deficit) after
this offering by approximately $____, or $____ per common share, and decrease the dilution per share to new investors by $____ per common
share, assuming that the assumed initial public offering price remains the same, and after deducting the estimated underwriting discounts
and commissions and estimated offering expenses payable by us. Similarly, a decrease of 500,000 Class A Units offered by us would
decrease our as adjusted net tangible book value (deficit) after this offering by approximately $___ million, or $____ per common share,
and increase the dilution per share to new investors by $____ per common share, assuming that the assumed initial public offering price
remains the same, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by
us. The information discussed above is illustrative only and will adjust based on the actual initial public offering price and other
terms of this offering determined at pricing. This table does not take into account further dilution to new investors that could occur
upon the exercise of outstanding options and warrants having a per share exercise price less than the public offering price per share
in this offering.
If
the underwriters exercise in full their option to purchase up to ____ additional shares of common stock and Series A Warrants
at the assumed initial public offering price of $____ per share, the as adjusted net tangible book value (deficit) after this offering
would be $____ per share, representing an increase in net tangible book value (deficit) of $____ per share to existing shareholders and
immediate dilution in net tangible book value (deficit) of $____ per share to investors purchasing our common shares in this offering
at the assumed public offering price.
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FISCAL CONDITION AND RESULTS OF OPERATION
The
following discussion of our plan of operation should be read in conjunction with the financial statements and related notes that
appear elsewhere in this prospectus. This discussion contains forward-looking statements that involve risks and uncertainties. Our
actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors,
including those discussed in “Risk Factors” beginning on page 6 of this prospectus. All forward-looking statements speak
only as of the date on which they are made. We undertake no obligation to update such statements to reflect events that occur or
circumstances that exist after the date on which they are made.
We
are an emerging growth company as defined in Section 2(a)(19) of the Securities Act. Pursuant to Section 107 of the Jumpstart Our Business
Startups Act, we may take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying
with new or revised accounting standards, meaning that we can delay the adoption of certain accounting standards until those standards
would otherwise apply to private companies. We have chosen to take advantage of the extended transition period for complying with new
or revised accounting standards applicable to public companies to delay adoption of such standards until such standards are made applicable
to private companies. Accordingly, our consolidated financial statements may not be comparable to the financial statements of public
companies that comply with such new or revised accounting standards.
Our
Company
Sigyn Therapeutics, Inc. (“Sigyn”,
the “Company” “we,” “us,” or “our”) is a development-stage company focused on addressing
unmet needs in global health. Sigyn Therapy™ is a broad-spectrum blood purification technology designed to reduce the presence
of viral pathogens, bacterial toxins, and inflammatory mediators from the bloodstream.
Candidate
treatment indications for Sigyn Therapy include endotoxemia and inflammation in End-Stage Renal Disease (ESRD) dialysis patients,
Sepsis (leading cause of hospital deaths worldwide1), Community Acquired Pneumonia (a leading cause of death among infectious diseases2)
and Emerging Bioterror and Pandemic threats.
Beyond
our focus to clinically advance Sigyn Therapy, we intend to develop a pipeline of extracorporeal blood purification therapies. In this
regard, we have filed patent and trademark submissions related to a therapeutic system to enhance the delivery of cancer chemotherapy
and reduce its toxicity. At present, we have no market approved medical products.
1Global, regional and national sepsis incidence and mortality
The Journal Lancet, January 2020
2The American Thoracic Society –
Pneumonia Facts 2019
Financing
Transactions
Preferred
Stock
The
Company has 10,000,000 shares of par value $0.0001 preferred stock authorized, of which no preferred shares are issued and outstanding
at December 22, 2022.
Common
Stock
The Company has authorized 1,000,000,000 shares of
par value $0.0001 common stock, of which 37,295,813 shares were outstanding as of December 22, 2022.
On
October 28, 2021, an investor elected to convert $16,714 of the aggregate principal amount of the Note of $199,650,
into 42,857 common shares.
On
October 25, 2021, an investor elected to convert the aggregate principal amount of the Note, $110,000, into 157,143 common shares.
On
October 20, 2021, the Company entered into a securities purchase agreement with an accredited investor that resulted in the issuance
of 320,000 shares of common stock and warrants to purchase an aggregate of 320,000 shares of the Company’s common stock for total
proceeds totaling $400,000. The offering allowed for qualified investors to purchase one share of the Company’s common stock at
$1.25. For each share purchased, the investor received a five-year warrant to purchase one share of common stock at $1.25 per share.
No commissions were paid in the offering. This issuance was pursuant to Section 4(a)(2) of the Securities Act in
a transaction exempt from registration.
On
October 14, 2021, the Company issued a total of 47,000 shares of its common stock valued at $37,600 (based on the stock price of the
Company’s common stock on the date of issuance) to a third party, for communications to the financial industry.
On
July 14, 2021, the Company issued a total of 47,000 shares of its common stock valued at $47,000 (based on the stock price of the Company’s
common stock on the date of issuance) to a third party, for communications to the financial industry.
On
May 10, 2021, Brio Capital elected to convert the aggregate principal amount of a $110,000 convertible note issued on February 10, 2021
into 157,143 shares of the Company’s common stock.
In
April 2021, the Company initiated an offering of up to $1.5 million of the Company’s restricted common shares. The offering allowed
for qualified investors to purchase one share of the Company’s common stock $1.25. For each share purchased, the investor received
a five-year warrant to purchase one share of common stock at $1.75 per share. On May 10, 2021, the Company closed the offering to investors
and subsequently disclosed that it had entered into securities purchase agreements with accredited investors that resulted in the issuance
of 1,172,000 shares of common stock and warrants to purchase an aggregate of 1,172,000 shares of the Company’s common stock for
total proceeds totaling $1,465,000. No commissions were paid in the offering. This issuance was pursuant to Section 4(a)(2) of
the Securities Act in a transaction exempt from registration.
On
April 14, 2021, the Company issued a total of 47,000 shares of its restricted common stock valued at $82,250 (based on the stock price
of the Company’s common stock on the date of issuance) to a third party, for communications to the financial industry. This issuance
was pursuant to Section 4(a)(2) of the Securities Act in a transaction exempt from registration.
On
February 19, 2021, a previous noteholder exercised the warrants pursuant to the cashless exercise provision of the warrant agreement
into 57,147 common shares. The common shares have not been issued as of March 14, 2022.
On
January 14, 2021, the Company issued a total of 47,000 shares of its restricted common stock valued at $82,250 (based on the stock price
of the Company’s common stock on the date of issuance) to a third party, for communications to the financial industry. This issuance
was pursuant to Section 4(a)(2) of the Securities Act in a transaction exempt from registration.
During
the year ended December 31, 2020, the Company issued 1,015,344 common shares to third parties in conjunction with the exchange of convertible
promissory debentures.
On
October 19, 2020, the Company issued 33,686,169 common shares in conjunction with the Acquisition.
Warrants
On
October 22, 2021, the Company and Osher amended convertible debt agreements for the maturity date from October 20, 2021 to October 20,
2022. In exchange for the extension of the Note, the Company issued Osher 450,000 warrants to purchase an aggregate of 450,000 shares
of the Company’s common stock, valued at $197,501 (based on the Black Scholes valuation model on the date of grant) (see Note 6).
The warrants are exercisable for a period of five years at $1.00 per share in whole or in part, as either a cash exercise or as a cashless
exercise, and fully vest at grant date. The Company is amortizing the value of the warrants ratably through October 20, 2022. The Company
recorded $40,041 and $0 for the years ended December 31, 2021 and 2020, respectively, and is classified in other expenses in the consolidated
Statements of Operations.
Current
Noteholders
Osher
– $457,380
On
January 28, 2020, the Company entered into a Securities Purchase Agreement with respect to the sale and issuance to institutional investor
Osher Capital Partners LLC (“Osher”) of (i) $385,000 aggregate principal amount of Original Issue Discount Senior Convertible
Debenture due January 26, 2021, based on $1.00 for each $0.90909 paid by Osher and (ii) five-year Common Stock Purchase Warrants to purchase
up to an aggregate of 80,209 shares of the Company’s common stock at an exercise price of $7.00 per share. The aggregate
cash subscription amount received by the Company from Osher for the issuance of the note and warrants was $350,005 which was issued at
a $34,995 original issue discount from the face value of the Note. The conversion price for the principal in connection with voluntary
conversions by a holder of the convertible notes is $0.094 per share, as amended on October 20, 2020, subject to adjustment as provided
therein, such as stock splits and stock dividends.
The
Company and Osher amended the convertible debt agreement as follow-on October 20, 2020:
| ● | The
parties amended the Warrants dated January 28, 2020, for the number of warrant shares from
80,209 warrant shares to 4,113,083 warrant shares at an exercise price of $0.14 per share. |
| ● | The
parties amended the Note for the maturity date from June 23,2021 to October 20, 2021. |
On
October 22, 2021, the Company and Osher amended convertible debt agreements as follows:
| ● | The
parties amended the October 20,2020 Notes for the maturity date from October 20, 2021 to
October 20, 2022. |
| ● | The
parties amended the October 20,2020 Notes for the aggregate principal amount and accrued
interest from $652,300 to $717,530 which is issued at a $65,230 original issue discount from
the face value of the October 20, 2020 Notes now due October 20, 2022. |
| ● | In
exchange for the extension of the Note, the Company issued Osher five-year warrants to purchase
an aggregate of 450,000 shares of the Company’s common stock at an exercise price of
$1.00 per share. |
The
Company has not repaid this convertible note and the convertible note is now in default. The Company is currently in discussions to restructure
the terms of the note.
Osher
– $60,500
On
June 23, 2020, the Company entered into a Securities Purchase Agreement with respect to the sale and issuance to institutional investor Osher Capital Partners LLC (“Osher”) of
(i) $50,000 aggregate principal amount of Original Issue Discount Senior Convertible Debenture (the “Note”) due June 23,
2021, based on $1.00 for each $0.90909 paid by Osher and (ii) five-year Common Stock Purchase Warrants (“Warrants”) to purchase
up to an aggregate of 10,000 shares of the Company’s Common Stock at an exercise price of $30.00 per share. The aggregate cash
subscription amount received by the Company from Osher for the issuance of the Note and Warrants was $50,005 which was issued at a $0
original issue discount from the face value of the Note. The conversion price for the principal in connection with voluntary conversions
by a holder of the convertible notes is $0.39 per share, as amended on October 20, 2020, subject to adjustment as provided therein, such
as stock splits and stock dividends.
The
Company and Osher amended the convertible debt agreement as follow-on October 20, 2020:
| ● | The
parties amended the Note for the aggregate principal amount from $50,000 to $55,000. The
aggregate cash subscription amount received by the Company from Osher for the issuance of
the Note and Warrants was $50,005 which was issued at an amended $4,995 original issue discount
from the face value of the Note. |
| ● | The
parties amended the Warrants dated June 23, 2020, for the number of warrant shares from 10,000
warrant shares to 141,020 warrant shares at an exercise price of $0.59 per share. |
| ● | The
parties amended the Note for the maturity date from June 23, 2021 to October 20, 2021. |
On
October 22, 2021, the Company and Osher amended convertible debt agreements as follows:
| ● | The
parties amended the October 20, 2020 Notes for the maturity date from October 20, 2021 to
October 20, 2022. |
| ● | The
parties amended the October 20, 2020 Notes for the aggregate principal amount and accrued
interest from $652,300 to $717,530 which is issued at a $65,230 original issue discount from
the face value of the October 20, 2020 Notes now due October 20, 2022. |
| ● | In
exchange for the extension of the Note, the Company issued Osher five-year warrants to purchase
an aggregate of 450,000 shares of the Company’s common stock at an exercise price of
$1.00 per share. |
The Company has not repaid this convertible note
and the convertible note is now in default. The Company is currently in discussions to restructure the terms of the note.
Osher
– $199,650
On
September 17, 2020, the Company entered into a Securities Purchase Agreement with respect to the sale and issuance to institutional investor Osher Capital Partners LLC (“Osher”) of
(i) $181,500 aggregate principal amount of Original Issue Discount Senior Convertible Debenture (the “Note”) due September
30, 2021, based on $1.00 for each $0.90909 paid by Osher and (ii) five-year Common Stock Purchase Warrants (“Warrants’) to
purchase up to an aggregate of 8,250 shares of the Company’s Common Stock at an exercise price of $30.00 per share. The aggregate
cash subscription amount received by the Company from Osher for the issuance of the Note and Warrants was $165,000 which was issued at
a $16,500 original issue discount from the face value of the Note. The conversion price for the principal in connection with voluntary
conversions by a holder of the convertible notes is $0.39 per share, as amended on October 20, 2020, subject to adjustment as provided
therein, such as stock splits and stock dividends.
The
Company and Osher amended the convertible debt agreement as follow-on October 20, 2020:
| ● | The
parties amended the Warrants dated September 17, 2020, for the number of warrant shares from
8,250 warrant shares to 465,366 warrant shares at an exercise price of $0.59 per share. |
| ● | The
parties amended the Note for the maturity date from September 30, 2021 to October 20, 2021. |
On
October 22, 2021, the Company and Osher amended convertible debt agreements as follows:
| ● | The
parties amended the October 20, 2020 Notes for the maturity date from October 20, 2021 to
October 20, 2022. |
| ● | The
parties amended the October 20, 2020 Notes for the aggregate principal amount and accrued
interest from $652,300 to $717,530 which is issued at a $65,230 original issue discount from
the face value of the October 20, 2020 Notes now due October 20, 2022. |
| ● | In
exchange for the extension of the Note, the Company issued Osher five-year warrants to purchase
an aggregate of 450,000 shares of the Company’s common stock at an exercise price of
$1.00 per share. |
On
October 28, 2021, Osher elected to convert $16,714 of the aggregate principal amount of the Note of $199,650, into 42,857 common shares.
The
Company has not repaid this convertible note and the convertible note is now in default. The Company is currently in discussions to restructure
the terms of the note.
Osher
– $110,000
On
March 23, 2022, the Company entered into an Original Issue Discount Senior Convertible Debenture (the “Note”) with respect
to the sale and issuance to institutional investor Osher Capital Partners LLC (“Osher”) of (i) $110,000 aggregate principal
amount of Note due March 23, 2023 based on $1.00 for each $0.90909 paid by the previous noteholder and (ii) five-year Common Stock Purchase
Warrants (“Warrants’) to purchase up to an aggregate of 220,000 shares of the Company’s Common Stock at an exercise
price of $0.50 per share. The aggregate cash subscription amount received by the Company from the previous noteholder for the issuance
of the Note and Warrants was $100,000 which was issued at a $10,000 original issue discount from the face value of the Note. The conversion
price for the principal in connection with voluntary conversions by a holder of the convertible notes is $0.50 per share, subject to
adjustment as provided therein, such as stock splits and stock dividends.
Brio
– $110,000
On
March 23, 2022, the Company entered into an Original Issue Discount Senior Convertible Debenture (the “Note”) with respect
to the sale and issuance to institutional investor Brio Capital Master Fund Ltd. (“Brio”) of (i) $110,000 aggregate principal
amount of Note due March 23, 2023 based on $1.00 for each $0.90909 paid by the previous noteholder and (ii) five-year Common Stock Purchase
Warrants (“Warrants’) to purchase up to an aggregate of 220,000 shares of the Company’s Common Stock at an exercise
price of $0.50 per share. The aggregate cash subscription amount received by the Company from the previous noteholder for the issuance
of the Note and Warrants was $100,000 which was issued at a $10,000 original issue discount from the face value of the Note. The conversion
price for the principal in connection with voluntary conversions by a holder of the convertible notes is $0.50 per share, subject to
adjustment as provided therein, such as stock splits and stock dividends.
Osher
– $110,000
On
April 28, 2022, the Company entered into an Original Issue Discount Senior Convertible Debentures (the “Note”) totaling (i)
$220,000 aggregate principal amount of Note due April 28, 2023 based on $1.00 for each $0.90909 paid by the previous noteholder and (ii)
five-year Common Stock Purchase Warrants (“Warrants’) to purchase up to an aggregate of 440,000 shares of the Company’s
Common Stock at an exercise price of $0.50 per share. The conversion price for the principal in connection with voluntary conversions
by the holders of the convertible notes is $0.50 per share.
Brio
- $110,000
On
May 10, 2022, the Company entered into an Original Issue Discount Senior Convertible Debenture (the “May 2022 Note”) totaling
(i) $110,000 aggregate principal amount of Note due May 10, 2023 based on $1.00 for each $0.90909 paid by the previous noteholder and
(ii) five-year Common Stock Purchase Warrants (“Warrants’) to purchase up to an aggregate of 220,000 shares of the Company’s
Common Stock at an exercise price of $0.50 per share. The conversion price for the principal in connection with voluntary conversions
by the holders of the convertible notes is $0.50 per share.
Osher – $55,000
On June 1, 2022, the Company entered into an Original
Issue Discount Senior Convertible Debenture (the “Note”) with respect to the sale and issuance to institutional investor
Osher Capital Partners LLC (“Osher”) of (i) $55,000 aggregate principal amount of Note due June 1, 2023 based on $1.00 for
each $0.90909 paid by the previous noteholder and (ii) five-year Common Stock Purchase Warrants (“Warrants’) to purchase
up to an aggregate of 110,000 shares of the Company’s Common Stock at an exercise price of $0.50 per share. The aggregate cash
subscription amount received by the Company from the previous noteholder for the issuance of the Note and Warrants was $50,000 which
was issued at a $5,000 original issue discount from the face value of the Note. The conversion price for the principal in connection
with voluntary conversions by a holder of the convertible notes is $0.50 per share, subject to adjustment as provided therein, such as
stock splits and stock dividends.
Osher – $82,500
On June 22, 2022, the Company entered into an
Original Issue Discount Senior Convertible Debenture (the “Note”) with respect to the sale and issuance to institutional
investor Osher Capital Partners LLC (“Osher”) of (i) $82,500 aggregate principal amount of Note due June 22, 2023 based
on $1.00 for each $0.90909 paid by the previous noteholder and (ii) five-year Common Stock Purchase Warrants
(“Warrants’) to purchase up to an aggregate of 165,000 shares of the Company’s Common Stock at an exercise price
of $0.50 per share. The aggregate cash subscription amount received by the Company from the previous noteholder for the issuance of
the Note and Warrants was $75,000 which was issued at a $7,500 original issue discount from the face value of the Note. The
conversion price for the principal in connection with voluntary conversions by a holder of the convertible notes is $0.50 per share,
subject to adjustment as provided therein, such as stock splits and stock dividends.
Other – $341,000
In July 2022, the Company entered into an Original
Issue Discount Senior Convertible Debentures (the “July 2022 Notes”) totaling (i) $341,000 aggregate principal amount of
Note (total of $310,000 cash was received) due in various dates in July 2023 based on $1.00 for each $0.90909 paid by the previous noteholder
and (ii) five-year Common Stock Purchase Warrants (“Warrants’) to purchase up to an aggregate of 676,936 shares of the Company’s
Common Stock at an exercise price of $0.50 per share. The conversion price for the principal in connection with voluntary conversions
by the holders of the convertible notes is $0.50 per share.
Osher – $110,000
On August 31, 2022, the Company entered into an
Original Issue Discount Senior Convertible Debenture (the “Note”) with respect to the sale and issuance to institutional
investor Osher Capital Partners LLC (“Osher”) of (i) $110,000 aggregate principal amount of Note due August 31, 2023 based
on $1.00 for each $0.90909 paid by the previous noteholder and (ii) five-year Common Stock Purchase Warrants (“Warrants’)
to purchase up to an aggregate of 733,333 shares of the Company’s Common Stock at an exercise price of $0.25 per share. The aggregate
cash subscription amount received by the Company from the previous noteholder for the issuance of the Note and Warrants was $100,000
which was issued at a $10,000 original issue discount from the face value of the Note. The conversion price for the principal in connection
with voluntary conversions by a holder of the convertible notes is $0.15 per share, subject to adjustment as provided therein, such as
stock splits and stock dividends.
Brio – $82,500
On September 9, 2022, the Company entered into
an Original Issue Discount Senior Convertible Debenture (the “Note”) with respect to the sale and issuance to institutional
investor Brio Capital Master Fund Ltd. (“Brio”) of (i) $82,500 aggregate principal amount of Note due September 9, 2023 based
on $1.00 for each $0.90909 paid by the previous noteholder and (ii) five-year Common Stock Purchase Warrants (“Warrants’)
to purchase up to an aggregate of 550,000 shares of the Company’s Common Stock at an exercise price of $0.25 per share. The aggregate
cash subscription amount received by the Company from the previous noteholder for the issuance of the Note and Warrants was $75,000 which
was issued at a $7,500 original issue discount from the face value of the Note. The conversion price for the principal in connection
with voluntary conversions by a holder of the convertible notes is $0.15 per share, subject to adjustment as provided therein, such as
stock splits and stock dividends.
Osher – $110,000
On September 20, 2022, the Company entered into
an Original Issue Discount Senior Convertible Debenture (the “Note”) with respect to the sale and issuance to institutional
investor Osher Capital Partners LLC (“Osher”) of (i) $110,000 aggregate principal amount of Note due September 20, 2023 based
on $1.00 for each $0.90909 paid by the previous noteholder and (ii) five-year Common Stock Purchase Warrants (“Warrants’)
to purchase up to an aggregate of 733,333 shares of the Company’s Common Stock at an exercise price of $0.25 per share. The aggregate
cash subscription amount received by the Company from the previous noteholder for the issuance of the Note and Warrants was $100,000
which was issued at a $10,000 original issue discount from the face value of the Note. The conversion price for the principal in connection
with voluntary conversions by a holder of the convertible notes is $0.15 per share, subject to adjustment as provided therein, such as
stock splits and stock dividends.
Impairment
of Inventory
Based
on the significant advancement of Sigyn Therapy, the Company decided in the 4th quarter of 2021 to assess the value of retail
business operations that were a focus of the Company prior to the merger transaction consummated on October 19, 2020.
Related
to this assessment, management determined the wholesale liquidation value of its sapphire gem inventory to be 5-10% of the previously
reported retail value, based on communications with certified gemologists, the variance between retail and wholesale valuations, and
current market conditions. As a result, the Company has valued the inventory at $50,000 and recorded an impairment of assets of $536,047
in the year ended December 31, 2021 and is classified in other expenses in the consolidated Statements of Operations.
Limited
Operating History; Need for Additional Capital
There
is limited historical financial information about us on which to base an evaluation of our performance. We cannot guarantee we will be
successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including
limited capital resources, and possible cost overruns due to increases in the cost of services. To become profitable and competitive,
we must receive additional capital. We have no assurance that future financing will materialize. If that financing is not available,
we may be unable to continue operations.
Results
of Operations - Year Ended December 31, 2021 Compared to Year Ended December 31, 2020
The
following discussion represents a comparison of our results of operations for the years ended December 31, 2021 and 2020. The results
of operations for the periods shown in our audited consolidated financial statements are not necessarily indicative of operating results
for the entire period. In the opinion of management, the audited consolidated financial statements recognize all adjustments of a normal
recurring nature considered necessary to fairly state our financial position, results of operations and cash flows for the periods presented.
| | |
Year Ended December 31, 2021 | | |
Year Ended December 31, 2020 | |
| | |
| | |
| |
| Net revenues | |
$ | - | | |
$ | - | |
| Cost of sales | |
| - | | |
| - | |
| Gross Profit | |
| - | | |
| - | |
| Operating expenses | |
| 2,008,217 | | |
| 916,434 | |
| Other expense | |
| 996,402 | | |
| 343,156 | |
| Net loss before income taxes | |
$ | (3,004,619 | ) | |
$ | (1,259,590 | ) |
Net
Revenues
For
the years ended December 31, 2021 and 2020, we had no revenues.
Cost
of Sales
For
the years ended December 31, 2021 and 2020, we had no cost of sales.
Operating
expenses
Operating expenses increased by $1,091,783, or
119.1%, to $2,008,217 for the year ended December 31, 2021 from $916,434 for the year ended December 31, 2020 primarily due to increases
in professional fees of $36,211, compensation costs of $259,154, consulting costs of $112,919, research and development costs of $314,652,
depreciation and amortization costs of $7,851, investor relations costs of $306,487, rent expenses of $45,154, and general and administration
costs of $9,355, as a result of adding administrative infrastructure for our anticipated business development. In 2021, the Company has
incurred an increase in professional fees (primarily audit fees), incurred a full year of compensation for its CEO and CTO and hired
a Director of Operations resulting in increased compensation costs, increased consulting costs (primarily for public relations and brand
awareness), has increased investor relations costs (primarily the fair value of common stock issued for services), and increased rent
through the lease of office space in June 2021. Research and development costs consist of an increase of $175,842 attributed to in house
efforts and $138,810 to third parties for developmental services and testing.
For the year ended December
31, 2021, we had research and development costs of $734,014, and general and administrative expenses of $1,274,203 primarily due to professional
fees of $123,293, compensation costs of $451,734, consulting costs of $286,194, rent of $46,663, depreciation and amortization costs
of $19,151, investor relations costs of $329,006, and general and administration costs of $18,162. In 2021, the Company has incurred
professional fees (primarily legal and audit fees), incurred a full year of compensation for its CEO and CTO and hired a Director of
Operations, incurred consulting costs (primarily for public relations and brand awareness), had investor relations costs (primarily the
fair value of common stock issued for services), and had rent through the lease of office space in June 2021. Research and development
costs consist of $567,748 attributed to in house efforts and $166,266 to third parties for developmental services and testing.
For the
year ended December 31, 2020, we had marketing expenses of $705, research and development costs of $419,362, and general and administrative
expenses of $496,367 primarily due to professional fees of $260,356, compensation costs of $192,580, rent of $1,509, depreciation and
amortization costs of $11,300, investor relations costs of $22,519, and general and administration costs of $8,103. In 2020, the
Company has incurred professional fees (primarily legal and audit fees, and consulting costs), and incurred compensation for its CEO
and CTO. Research and development costs consist of $391,906 attributed to in house efforts and $27,456 to third parties for developmental
services and testing.
Net
loss before income taxes
Net
loss before income taxes for the year ended December 31, 2021 totaled $3,004,619 primarily due to (increases/decreases) in compensation
costs, professional fees, consulting costs, research and development costs, investor relations costs, and general and administration
costs compared to a loss of $1,259,590 primarily due to (increases/decreases) in compensation costs, professional fees, marketing costs,
research and development costs, investor relations costs, and general and administration costs for the year ended December 31, 2020 primarily
due to professional fees.
Assets
and Liabilities
Assets
were $710,259 as of December 31, 2021. Assets consisted primarily of cash of $340,956, inventories of $50,000, equipment of $28,046,
intangible assets of $5,700, and operating lease right-of-use assets of $262,771. Liabilities were $974,843 as of December 31, 2021.
Liabilities consisted primarily accounts payable of $39,674, accrued payroll and payroll taxes of $1,072, convertible notes of $647,202,
net of $53,614 of unamortized debt discount, operating lease liabilities of $286,716, and other current liabilities of $179.
Liquidity
and Capital Resources
General
– Overall, we had an increase in cash flows for the year ended December 31, 2021 of $256,554 resulting from cash provided
by financing activities of $2,060,000, offset partially by cash used in operating activities of $1,774,182 and cash used in investing
activities of $29,264.
The
following is a summary of our cash flows provided by (used in) operating, investing, and financing activities during the periods indicated:
| | |
Year Ended December 31, 2021 | | |
Year Ended December 31, 2020 | |
| | |
| | |
| |
| Net cash provided by (used in): | |
| | | |
| | |
| Operating activities | |
$ | (1,774,182 | ) | |
$ | (829,809 | ) |
| Investing activities | |
| (29,264 | ) | |
| (10,799 | ) |
| Financing activities | |
| 2,060,000 | | |
| 925,010 | |
| | |
$ | 256,554 | | |
$ | 84,402 | |
Cash
Flows from Operating Activities – For the year ended December 31, 2021, net cash used in operations was $1,774,182 compared
to net cash used in operations of $829,809 for the year ended December 31, 2020. Net cash used in operations was primarily due to a net
loss of $3,004,619 for year ended December 31, 2021 and the changes in operating assets and liabilities of $34,149, primarily due to
the increases in other current assets of $2,075 and other assets of $20,711, and a decrease in accrued payroll and payroll taxes of $58,635,
offset primarily by increases in accounts payable of $23,669 and other current liabilities of $23,603. In addition, net cash used in
operating activities includes adjustments to reconcile net profit from depreciation expense of $2,946, amortization expense of $16,205,
accretion of original issuance costs of $61,283, accretion of debt discount of $368,205, stock issued for services of $249,100, interest
expense converted to notes payable of $30,800, and impairment of assets of $536,047.
Net
cash used in operations was primarily due to a net loss of $1,259,590 for year ended December 31, 2020 and the changes in operating assets
and liabilities of $75,325, primarily due to the increase in accounts payable of $15,095, accrued payroll and payroll taxes of $59,707,
and other current liabilities of $523. In addition, net cash used in operating activities includes adjustments to reconcile net profit
from depreciation expense of $346, amortization expense of $10,954, accretion of original issuance costs of $67,823, and accretion of
debt discount of $275,333.
Cash
Flows from Investing Activities – For the year ended December 31, 2021, net cash used in investing was $29,264 due to the
purchase of property and equipment compared to cash flows from investing activities of $10,799 due to the purchase of intangible assets
for the year ended December 31, 2020.
Cash
Flows from Financing Activities – For the year ended December 31, 2021, net cash provided by financing was $2,060,000 due
to proceeds from short term convertible notes of $250,000, repayments of short-term convertible notes of $55,000, and common stock and
warrants issued for cash of $1,865,000. For the year ended December 31, 2020, net cash provided by financing was $925,010 due to proceeds
from short term convertible notes.
Financing
– We expect that our current working capital position, together with our expected future cash flows from operations will
be insufficient to fund our operations in the ordinary course of business, anticipated capital expenditures, debt payment requirements
and other contractual obligations for at least the next twelve months. However, this belief is based upon many assumptions and is subject
to numerous risks, and there can be no assurance that we will not require additional funding in the future.
We
have no present agreements or commitments with respect to any material acquisitions of other businesses, products, product rights or
technologies or any other material capital expenditures. However, we will continue to evaluate acquisitions of and/or investments in
products, technologies, capital equipment or improvements or companies that complement our business and may make such acquisitions and/or
investments in the future. Accordingly, we may need to obtain additional sources of capital in the future to finance any such acquisitions
and/or investments. We may not be able to obtain such financing on commercially reasonable terms, if at all. Due to the ongoing global
economic crisis, we believe it may be difficult to obtain additional financing if needed. Even if we are able to obtain additional financing,
it may contain undue restrictions on our operations, in the case of debt financing, or cause substantial dilution for our shareholders,
in the case of equity financing.
Going
Concern
The
accompanying financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among
other things, the realization of assets and satisfaction of liabilities in the normal course of business. The Company had an accumulated
deficit of approximately $4,266,000 at December 31, 2021, had a working capital deficit of approximately $341,000 at December 31, 2021,
had net losses of approximately $3,005,000 and $1,260,000 for the years ended December 31, 2021 and 2020, respectively, and net cash
used in operating activities of approximately $1,774,000 and $830,000 for the years ended December 31, 2021 and 2020, respectively, with
no revenue earned since inception, and a lack of operational history. These matters raise substantial doubt about the Company’s
ability to continue as a going concern.
While
the Company is attempting to expand operations and increase revenues, the Company’s cash position may not be significant enough
to support the Company’s daily operations. Management intends to raise additional funds by way of a private offering or an asset
sale transaction. Management believes that the actions presently being taken to further implement its business plan and generate revenues
provide the opportunity for the Company to continue as a going concern. While management believes in the viability of its strategy to
generate revenues and in its ability to raise additional funds or transact an asset sale, there can be no assurances to that effect or
on terms acceptable to the Company. The ability of the Company to continue as a going concern is dependent upon the Company’s ability
to further implement its business plan and generate revenues.
The
consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.
Critical
Accounting Policies
Refer
to Note 3 in the accompanying notes to the unaudited condensed consolidated financial statements for critical accounting policies.
Recent
Accounting Pronouncements
Refer
to Note 3 in the accompanying notes to the unaudited condensed consolidated financial statements.
Off-Balance
Sheet Arrangements
As
of December 31, 2021, we had not entered into any transaction, agreement or other contractual arrangement with an entity unconsolidated
under which it has:
| |
● |
a
retained or contingent interest in assets transferred to the unconsolidated entity or similar arrangement that serves as credit; |
| |
●
|
liquidity
or market risk support to such entity for such assets; |
| |
●
|
an
obligation, including a contingent obligation, under a contract that would be accounted for as a derivative instrument; or |
| |
● |
an
obligation, including a contingent obligation, arising out of a variable interest in an unconsolidated entity that is held by, and material
to us, where such entity provides financing, liquidity, market risk or credit risk support to or engages in leasing, hedging, or research
and development services with us. |
Recent
Developments
Convertible
Promissory Debentures
Osher – $110,000
On October 20, 2022, the Company entered into
an Original Issue Discount Senior Convertible Debenture (the “Note”) with respect to the sale and issuance to institutional
investor Osher Capital Partners LLC (“Osher”) of (i) $110,000 aggregate principal amount of Note due October 20, 2023 based
on $1.00 for each $0.90909 paid by the previous noteholder and (ii) five-year Common Stock Purchase Warrants (“Warrants’)
to purchase up to an aggregate of 733,333 shares of the Company’s Common Stock at an exercise price of $0.25 per share. The aggregate
cash subscription amount received by the Company from the previous noteholder for the issuance of the Note and Warrants was $100,000
which was issued at a $10,000 original issue discount from the face value of the Note. The conversion price for the principal in connection
with voluntary conversions by a holder of the convertible notes is $0.15 per share, subject to adjustment as provided therein, such as
stock splits and stock dividends.
Brio – $82,500
On November 9, 2022, the Company entered into
an Original Issue Discount Senior Convertible Debenture (the “Note”) with respect to the sale and issuance to institutional
investor Brio Capital Master Fund Ltd. (“Brio”) of (i) $82,500 aggregate principal amount of Note due November 9, 2023 based
on $1.00 for each $0.90909 paid by the previous noteholder and (ii) five-year Common Stock Purchase Warrants (“Warrants’)
to purchase up to an aggregate of 550,000 shares of the Company’s Common Stock at an exercise price of $0.25 per share. The aggregate
cash subscription amount received by the Company from the previous noteholder for the issuance of the Note and Warrants was $75,000 which
was issued at a $7,500 original issue discount from the face value of the Note. The conversion price for the principal in connection
with voluntary conversions by a holder of the convertible notes is $0.15 per share, subject to adjustment as provided therein, such as
stock splits and stock dividends.
Osher – $55,000
On November 14, 2022, the Company entered into
an Original Issue Discount Senior Convertible Debenture (the “Note”) with respect to the sale and issuance to institutional
investor Osher Capital Partners LLC (“Osher”) of (i) $55,000 aggregate principal amount of Note due November 14, 2023 based
on $1.00 for each $0.90909 paid by the previous noteholder and (ii) five-year Common Stock Purchase Warrants (“Warrants’)
to purchase up to an aggregate of 366,667 shares of the Company’s Common Stock at an exercise price of $0.25 per share. The aggregate
cash subscription amount received by the Company from the previous noteholder for the issuance of the Note and Warrants was $50,000 which
was issued at a $5,000 original issue discount from the face value of the Note. The conversion price for the principal in connection
with voluntary conversions by a holder of the convertible notes is $0.15 per share, subject to adjustment as provided therein, such as
stock splits and stock dividends.
Osher – $145,200
On November 21, 2022, the Company entered into
an Original Issue Discount Senior Convertible Debenture (the “Note”) with respect to the sale and issuance to institutional
investor Osher Capital Partners LLC (“Osher”) of (i) $145,200 aggregate principal amount of Note due November 21, 2023 based
on $1.00 for each $0.90909 paid by the previous noteholder and (ii) five-year Common Stock Purchase Warrants (“Warrants’)
to purchase up to an aggregate of 968,000 shares of the Company’s Common Stock at an exercise price of $0.25 per share. The aggregate
cash subscription amount received by the Company from the previous noteholder for the issuance of the Note and Warrants was $132,000
which was issued at a $13,200 original issue discount from the face value of the Note. The conversion price for the principal in connection
with voluntary conversions by a holder of the convertible notes is $0.15 per share, subject to adjustment as provided therein, such as
stock splits and stock dividends.
On November 23, 2022, the noteholder elected to
convert the aggregate principal amount of the Note, $145,200, into 968,000 common shares.
Limited
Operating History; Need for Additional Capital
There
is limited historical financial information about us on which to base an evaluation of our performance. We cannot guarantee we will be
successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including
limited capital resources, and possible cost overruns due to increases in the cost of services. To become profitable and competitive,
we must receive additional capital. We have no assurance that future financing will materialize. If that financing is not available,
we may be unable to continue operations.
Business
Overview
Sigyn
Therapeutics, Inc. (“Sigyn” or the “Company”) is a development-stage medical technology company headquartered
in San Diego, California. We are focused on creating therapeutic solutions that address unmet needs in global health.
We
are developing Sigyn Therapy™ as a
candidate to treat life-threatening infections and inflammatory disorders for which effective drug therapies are not available.
We designed Sigyn Therapy to reduce the circulating presence of pathogen sources of life-threatening inflammation in concert with
dampening down the dysregulated overproduction of inflammatory cytokines (the cytokine storm), which plays a prominent role in each of
our candidate treatment indications.
We
are advancing Sigyn Therapy as a candidate to treat end-stage renal disease (ESRD) dialysis patients with chronic inflammation and/or
endotoxemia, pathogen-associated sepsis (leading cause of hospital deaths), community acquired pneumonia (a leading cause of death
among infectious diseases), and emerging pandemic threats.
Since
initiating the development of Sigyn Therapy in 2020, we completed pre-clinical in vitro studies that quantified the
reduction of pathogen sources of inflammation from human blood plasma with small-scale versions of Sigyn Therapy. These
include endotoxin (a gram-negative bacterial toxin), peptidoglycan and lipoteichoic acid (gram-positive bacterial toxins), and viral
pathogens, including COVID-19.
We
also completed in vitro studies that quantified the reduction of inflammatory cytokines from human blood plasma
with small-scale versions of Sigyn Therapy. These include interleukin-1 beta (IL-1b), interleukin-6 (IL-6), and tumor necrosis
factor alpha (TNF-a). In a related study, liposomes were reduced from human blood plasma as a model system to evaluate the potential
of Sigyn Therapy to target CytoVesicles that transport inflammatory cytokine cargos throughout the bloodstream.
In
vitro studies also quantified the
reduction of hepatic (liver) toxins from human blood plasma with small-scale versions of Sigyn Therapy. These included
ammonia, bile acid and bilirubin. Based on these outcomes, we may further investigate the potential of Sigyn Therapy to treat
acute forms of liver failure in future studies.
Each
of our in vitro studies were conducted by Innovative Biotherapies, based in Ann Arbor, Michigan. With the exception of the liposome
data results, the studies quantified the reduction of each target from human blood plasma with small-scale versions of Sigyn Therapy.
Each of these studies were conducted for a period of four hours. In the liposome study, the formulation of adsorbent components that
we incorporate within Sigyn Therapy was quantified to reduce the presence of liposomes from human blood plasma in a test-tube rocker
study conducted for a period of two hours. While we maintain ownership of our in vitro study results, we do provide rights to
researchers at Innovative Biotherapies to publish our study results.
Subsequent
to our in vitro study results, we completed in vivo animal studies of Sigyn Therapy at the University of Michigan. In these
studies, Sigyn Therapy was administered via standard dialysis machines utilizing conventional blood-tubing sets, for periods up to six
hours in eight porcine (pig) subjects. Important criteria for treatment feasibility, including hemodynamic parameters, serum chemistries
and hematologic measurements, were stable across all eight subjects. While we maintain ownership of our in vivo animal study data,
we do provide rights to researchers at the University of Michigan to publish the results of our animal studies.
The
data resulting from our in vivo and in vitro studies is being incorporated into an Investigational Device Exemption (IDE) that
we are drafting for submission to the U.S. Food and Drug Administration (“FDA”) to support the potential initiation of human
feasibility studies in the United States.
Sigyn
Therapy Mechanism of Action
We are advancing Sigyn Therapy
as a candidate to treat pathogen-associated conditions that precipitate Sepsis, Community Acquired Pneumonia, Emerging Bioterror and
Pandemic threats, and End-Stage Renal Disease patients with endotoxemia and elevated inflammatory cytokine production.
To
support widespread implementation, Sigyn Therapy is a single-use disposable device that is deployable on the global infrastructure of
hemodialysis and continuous renal replacement therapy (CRRT) machines already located in hospitals and clinics. To reduce the risk of
blood clotting and hemolysis, the anticoagulant heparin is administered, which is the standard-of-care drug administered in dialysis
and CRRT therapies. During animal studies conducted at the University of Michigan, Sigyn Therapy was deployed for use on a hemodialysis
machine manufactured by Fresenius Medical Care, the global leader in the dialysis industry.
Incorporated
within Sigyn Therapy is a “cocktail” of adsorbent components formulated to optimize the reduction of therapeutic
targets from the bloodstream. In the medical field, the term “cocktail” is a reference to the simultaneous administration
of multiple drugs (a drug cocktail) with differing mechanisms of actions. While drug cocktails are emerging as potential mechanisms to
treat cancer, they are life-saving countermeasures to treat HIV and Hepatitis-C viral infections. However, dosing of multi-drug agent
cocktails is limited by toxicity and adverse events that can result from deleterious drug interactions.
Sigyn
Therapy is not constrained by such limitations as active adsorbent components are maintained within Sigyn Therapy and not introduced
into the body. As a result, we are able to incorporate a substantial quantity of adsorbent components to capture therapeutic targets
outside of the body as they circulate through Sigyn Therapy. Each adsorbent component has differing capture characteristics that contribute
to reducing the circulating presence of pathogenic and inflammatory targets that precipitate the cytokine storm that underlies
sepsis and other life-threatening inflammatory disorders.
The
adsorbent components incorporated within Sigyn Therapy provide more than 200,000 square meters (~50 acres) of surface area on which to
adsorb and remove circulating viruses, bacterial toxins, and inflammatory mediators. Based on targeted blood flow rates of 350ml/min,
a patient’s entire bloodstream can pass through Sigyn Therapy more than fifteen times during a single four-hour treatment period.
From
a technical perspective, Sigyn Therapy is a 325 mm long polycarbonate column that internally contains polyethersulphone hollow
fibers that have porous walls have a median pore size of ~200 nanometers (nm). As blood flows into Sigyn Therapy, plasma and
therapeutic targets below 200nm travel through the porous walls as a result of blood-side pressure. As the hollow fiber bundle
within Sigyn Therapy creates a resistance to the flow of blood, a pressure drop is created along the length of the device such that
the blood-side pressure is higher at the blood inlet and lower at the blood outlet. This allows for plasma and therapeutic targets
to flow away from the blood and into the extra-lumen space (inside the polycarbonate shell, yet outside the hollow-fiber bundle) to
interact with Sigyn Therapy’s adsorbent components in a low shear force environment. In the distal third of the fiber bundle,
the pressure gradient is reversed, which allows for plasma to flow back through the fiber walls to be reconvened into the
bloodstream without the presence of therapeutic targets that were captured by adsorbent components housed in the extra-lumen space
of Sigyn Therapy.
Overview
of Candidate Treatment Indications
Based
on data resulting from in vitro blood purification studies, our candidate treatment indications include, but are not limited to;
pathogen-associated conditions that precipitate Sepsis (leading cause of hospital deaths worldwide), Community Acquired Pneumonia (a
leading cause of death among infectious diseases), Emerging Bioterror and Pandemic threats, and End-Stage Renal Disease (ESRD) patients
with endotoxemia and elevated inflammatory cytokine production. However, there is no assurance that human feasibility and pivotal studies
will demonstrate Sigyn Therapy to be a safe and efficacious treatment for any of our treatment indications.
End-Stage
Renal Disease Endotoxemia and Inflammation
According
to the United States Renal Data System (USRDS), more than 550,000 individuals suffer from end-stage renal disease (ESRD), which results
in approximately 85 million kidney dialysis treatments being administered in the United States each year. Persistent inflammation is
a hallmark feature of ESRD as reflected by the excess production of inflammatory cytokines, including tumor necrosis factor-α (TNF-α),
interleukin-1β (IL-1β) and interleukin-6 (IL-6), which contribute to increased all-cause mortality. ESRD inflammation also
induces intestinal permeability, which allows endotoxin (gram-negative bacterial toxin) to translocate from the gut and into the bloodstream.
Beyond fueling further inflammation, endotoxin is potent activator of sepsis, which can lead to multiple organ failure and death.
Sigyn
Therapy establishes a candidate strategy to improve the health and quality-of-life of ESRD patients. Beyond its potential to reduce
endotoxin, TNF-α, IL-1β, and IL-6 from human blood plasma, Sigyn Therapy can be administered in series with dialysis therapy.
We
are currently drafting an Investigational Device Exemption (IDE) for submission to the U.S. Food and Drug Administration (“FDA”)
related to a human feasibility study of Sigyn Therapy in End-Stage Renal Disease (ESRD) patients with endotoxemia and elevated inflammatory
cytokine production. As per the study protocol, Sigyn Therapy will be administered in combination with the regularly scheduled dialysis
treatments of enrolled subjects. The primary study objective will be to evaluate the safety of Sigyn Therapy in health compromised ESRD
patients. A secondary objective is to quantify changes in circulating levels of endotoxin, tumor necrosis factor-α (TNF-α),
interleukin-1β (IL-1β), and interleukin-6 (IL-6) before and after each Sigyn Therapy administration. Endotoxin and excess TNF-α,
IL-1β, and IL-6 production are commonly associated with each of our candidate treatment indications, including sepsis and community-acquired
pneumonia.
Sepsis
Sepsis
is defined as a life-threatening organ dysfunction caused by a dysregulated host response to infection. In January of 2020, a report
entitled; “Global, Regional, and National Sepsis Incidence and Mortality, 1990-2017: Analysis for the Global Burden of Disease
Study,” was published in the Journal Lancet. The publication reported 48.9 million cases of sepsis and 11 million deaths in
2017. In that same year, an estimated 20.3 million sepsis cases and 2.9 million deaths were among children younger than 5-years old.
The report included a reference that sepsis kills more people around the world than all forms of cancer combined. In the United States,
sepsis was reported to be the most common cause of hospital deaths with an annual financial burden that exceeds $24 billion.
To
date, more than 100 human studies have been conducted to evaluate the safety and efficacy of candidate drugs to treat sepsis. With one
brief exception (Xigris, Eli Lilly), none of these studies resulted in a market cleared therapy.
As
sepsis remains beyond the reach of single-target drugs, there is an emerging interest in multi-mechanism therapies that can target both
inflammatory and pathogen associated targets. Sigyn Therapy addresses a broad-spectrum of pathogen sources and the resulting dysregulated
cytokine production (the cytokine storm) that is the hallmark of sepsis. Additionally, we believe that inflammatory cytokine cargos transported
by CytoVesicles may represent a novel, yet important therapeutic target.
Community
Acquired Pneumonia
Community
Acquired Pneumonia (CAP) represents a significant opportunity for Sigyn Therapy to reduce the occurrence of sepsis. CAP is a leading
cause of death among infectious diseases, the leading cause of death in children under five years of age, and a catalyst for approximately
50% of sepsis and septic shock cases.
In
the United States, more than 1.5 million individuals are hospitalized with CAP each year, resulting in an annual financial burden that
exceeds $10 billion.
Statistically,
a therapeutic strategy that reduced the incidence of CAP related sepsis and septic shock would save thousands of lives each year. In
a study of 4,222 patients, the all-cause mortality for adult patients with CAP was reported to be 6.5% during hospitalization. However,
the mortality of patients with CAP related sepsis and septic shock rose to 51% during hospitalization.
CAP
is further complicated by the fact that the pathogen sources of CAP are identified in only 38% of patients, based on a study of 2,259
subjects whose pneumonia diagnosis was confirmed by chest x-ray. Of the source pathogens identified in the study, ninety seven percent
(97%) were either viral or bacterial in origin.
To
reduce the occurrence of CAP related sepsis and septic shock, Sigyn Therapy offers a broad-spectrum mechanism to reduce the circulating
presence of viral pathogens and bacterial toxins before and if they are identified as the CAP pathogen source. Additionally, Sigyn Therapy
may help to control the excess production of inflammatory cytokines (the cytokine storm) that precipitate sepsis and septic shock.
Emerging
Pandemic Threats
Covid-19
affirmed the use of extracorporeal blood purification as a first-line countermeasures to treat an emerging pandemic threat not addressed
with an approved drug or vaccine at the outset of an outbreak. On March 24, 2020, the U.S. Department of Health and Human Services (HHS)
declared that the emergence of COVID-19 justified the Emergency-Use Authorization (EUA) of drugs, biological products, and medical devices
to combat the pandemic. Within a month of this HHS declaration, FDA awarded an EUA to blood purification therapies from Terumo BCT, ExThera
Medical Corporation, CytoSorbents, Inc., and Baxter Healthcare Corporation. In connection with these authorizations, FDA published a
statement that blood purification devices may be effective at treating patients with confirmed COVID-19 by reducing various pathogens,
cytokines, and other inflammatory mediators from the bloodstream.
Consistent
with FDA’s statement, Sigyn Therapy has reduced various pathogens, cytokines, and other inflammatory mediators from human
blood plasma during in vitro studies and may represent a candidate strategy to treat future pandemic outbreaks, which
are increasingly being fueled by a confluence of global warming, urban crowding, and intercontinental travel.
Additionally,
as a majority of infectious human viruses are not addressed with a corresponding drug or vaccine, there may be an ongoing need for blood
purification technologies that offer to reduce the severity of infection and mitigate the excess production of inflammatory cytokines
(the cytokine storm) associated with high mortality in non-pandemic viral infections. In this regard, we believe Sigyn Therapy also aligns
with HHS initiatives established through the Public Health Emergency Medical Countermeasure Enterprise (PHEMCE) that support the development
of broad-spectrum medical countermeasures that can mitigate the impact of an emerging pandemic or bioterror threat, yet also have viability
in established disease indications.
Candidate
Pipeline Product
Beyond
our focus to clinically advance Sigyn Therapy, we intend to develop a pipeline of extracorporeal blood purification therapies. In this
regard, we have designed a therapeutic system to enhance the benefit of cancer chemotherapy. To support this endeavor, we disclosed on
October 6, 2022, that a patent application entitled: “SYSTEM AND METHODS
TO ENHANCE CHEMOTHERAPY DELIVERY AND REDUCE TOXICITY” had been filed with the
United States Patent and Trademark Office (“USPTO”). On October 13, 2022, we subsequently disclosed that trademark applications
to register ChemoPrepTM and ChemoPureTM were filed with the USPTO”.
Chemotherapeutic
agents are the most commonly administered drugs to treat cancer, which is the second leading cause of death in the United States.
Despite
therapeutic advances, treatment toxicity, drug resistance and inadequate tumor site delivery restrict the benefit of chemotherapy. To
overcome these challenges, our patent submission describes a therapeutic device system whose primary objective is to enhance tumor site
delivery of chemotherapy and reduce its toxicity. A secondary objective of the system is to reduce treatment dosing without sacrificing
patient benefit, or conversely increase chemotherapy dosing without added toxicity. In concert with these objectives, the therapeutic
system offers to inhibit the spread of cancer metastasis reported to be induced by the administration of chemotherapy.
Our
proposed chemotherapy enhancement system is comprised of two blood purification technologies. ChemoPrepTM, administered prior
to chemotherapy to optimize tumor site delivery and improve the benefit of ChemoPureTM, which is deployed post-chemotherapy
to reduce treatment toxicity and inhibit the potential spread of cancer metastasis.
Overview
of Presentation
The
following Management’s Discussion and Analysis (“MD&A”) or Plan of Operations includes the following sections:
| ● | Results
of Operations |
| | | |
| ● | Liquidity
and Capital Resources |
| | | |
| ● | Capital
Expenditures |
| | | |
| ● | Going
Concern |
| | | |
| ● | Critical
Accounting Policies |
| | | |
| ● | Off-Balance
Sheet Arrangements |
General
and administrative expenses consist primarily of personnel costs and professional fees required to support our operations and growth.
Depending
on the extent of our future growth, we may experience significant strain on our management, personnel, and information systems. We will
need to implement and improve operational, financial, and management information systems. In addition, we are implementing new information
systems that will provide better record-keeping, customer service and billing. However, there can be no assurance that our management
resources or information systems will be sufficient to manage any future growth in our business, and the failure to do so could have
a material adverse effect on our business, results of operations and financial condition.
Reclassifications
Certain
prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on
the reported results of operations. An adjustment has been made to the Consolidated Statements of Operations for three months ended March
31, 2021, to reclass $93,266 of costs to research and development previously classified in general and administrative. In addition, an
adjustment has been made to the Unaudited Condensed Consolidated Balance Sheets as of December 31, 2021, to reclass $1,072 of other current
liabilities previously classified in accrued payroll and payroll taxes.
Results
of Operations
Three
Months Ended September 30, 2022 Compared to Three Months Ended September 30, 2021
The
following discussion represents a comparison of our results of operations for the three months ended September 30, 2022 and 2021.
The results of operations for the periods shown in our audited condensed consolidated financial statements are not necessarily indicative
of operating results for the entire period. In the opinion of management, the audited condensed consolidated financial statements recognize
all adjustments of a normal recurring nature considered necessary to fairly state our financial position, results of operations and cash
flows for the periods presented.
| | |
Three
Months Ended September 30, | |
| | |
2022 | | |
2021 | |
| | |
| | |
| |
| Net
revenues | |
$ | - | | |
$ | - | |
| Cost
of sales | |
| - | | |
| - | |
| Gross
Profit | |
| - | | |
| - | |
| Operating
expenses | |
| 533,647 | | |
| 573,363 | |
| Other
expense | |
| 192,682 | | |
| 92,541 | |
| Net
loss before income taxes and discontinued operations | |
$ | (726,509 | ) | |
$ | (649,861 | ) |
Net
Revenues
For
the three months ended September 30, 2022 and 2021, we had no revenues.
Cost
of Sales
For
the three months ended September 30, 2022 and 2021, we had no cost of sales as we had no revenues.
Operating
expenses
Operating
expenses decreased by $39,716, or 6.9%, to $533,647 for three months ended September 30, 2022 from
$573,363 for the three months ended September 30, 2021 primarily due to decreases in research and development costs
of $93,733, investor relations costs of $49,835, consulting fees of $40,048, and rent expenses of $4,413, offset primarily by increases
in compensation costs of $54,994, professional fees of $16,428, depreciation costs of $1,283, marketing costs of $65,
insurance costs of $78,852, and general and administration costs of $3,309, as a result of adding administrative infrastructure
for our anticipated business development. In 2022, the Company incurred compensation for its CEO and CTO and hired a CFO resulting
in increased compensation costs, has increased professional fees (primarily legal), and has decreased investor relations
costs (primarily the fair value of common stock issued for services of $47,000 in 2021). Research and development costs consist
of a decrease of $45,944 attributed to in house efforts and a decrease of $47,789 to third parties for developmental
services and testing.
For
the three months ended September 30, 2022, we had marketing expenses of $65, research and development costs of $133,770,
and general and administrative expenses of $399,812 primarily due to professional fees of $40,729, compensation costs
of $192,315, insurance expense of $78,852, rent of $19,999, depreciation costs of $1,715, amortization costs of
$900, investor relations costs of $19,474, consulting fees of $41,775, and general and administration costs of $4,053,
as a result of adding administrative infrastructure for our anticipated business development. In 2022, the Company incurred professional
fees (primarily legal and audit fees), incurred compensation for its CEO and CTO and hired a CFO, incurred consulting costs (primarily
for public relations and brand awareness), had investor relations costs, and had rent through the lease of office space. Research and
development costs consist of $131,900 attributed to in house efforts and $1,870 to third parties for developmental services
and testing.
For
the three months ended September 30, 2021, we had research and development costs of $227,503, and general and administrative
expenses of $345,860 primarily due to professional fees of $24,301, compensation costs of $137,321, rent of $24,412,
depreciation and amortization costs of $1,332, investor relations costs of $69,309, consulting fees of $81,823,
and general and administration costs of $7,362, as a result of adding administrative infrastructure for our anticipated business
development. In 2021, the Company incurred marketing costs (primarily the fair value of common stock issued for services), has incurred
professional fees (primarily legal and audit fees, and consulting costs), incurred compensation for its CEO and CTO, incurred consulting
costs (primarily for public relations and brand awareness), had investor relations costs (primarily the fair value of common stock
issued for services of $47,000 in 2021), and had rent through the lease of office space beginning in June 2021. Research and development
costs consist of $177,844 attributed to in house efforts and $49,659 to third parties for developmental services and testing.
Other
Expense
Other
expense for the three months ended September 30, 2022 totaled $192,862 primarily due to interest expense of $148,372
in conjunction with accretion of debt discount and interest expense of $44,420 in conjunction with accretion of original issuance
discount, compared to other expense of $92,541 for the three months ended September 30, 2021 primarily due to interest
expense of $49,749 in conjunction with accretion of debt discount and interest expense of $13,697 in conjunction with accretion
of original issuance discount.
Net
loss before income taxes
Net
loss before income taxes and discontinued operations for the three months ended September 30, 2022 totaled $726,509 primarily
due to (increases/decreases) in compensation costs, professional fees, marketing costs, investor relations costs, consulting fees, research
and development costs, rent, and general and administration costs compared to a loss of $665,904 for the three months ended September
30, 2021 primarily due to (increases/decreases) in compensation costs, professional fees, investor relations, consulting fees, research
and development costs, rent, and general and administration costs.
Assets
and Liabilities
Assets
were $362,273 as of September 30, 2022. Assets consisted primarily of cash of $28,123, inventories of $50,000, other
current assets of $7,254, equipment of $23,767, intangible assets of $3,000, operating lease right-of-use assets
of $229,418, and other assets of $20,711. Liabilities were $2,104,375 as of September 30, 2022. Liabilities consisted
primarily of accounts payable of $306,000, accrued payroll and payroll taxes of $30,124, convertible notes of $1,515,443,
net of $406,373 of unamortized debt discount and debt issuance costs, and operating lease liabilities of $252,808.
Nine
Months Ended September 30,
2022 Compared to Nine Months Ended September 30, 2021
The
following discussion represents a comparison of our results of operations for the nine months ended September 30, 2022
and 2021. The results of operations for the periods shown in our audited condensed consolidated financial statements are not necessarily
indicative of operating results for the entire period. In the opinion of management, the audited condensed consolidated financial statements
recognize all adjustments of a normal recurring nature considered necessary to fairly state our financial position, results of operations
and cash flows for the periods presented.
| | |
Nine
Months Ended September 30, | |
| | |
2022 | | |
2021 | |
| | |
| | |
| |
| Net
revenues | |
$ | - | | |
$ | - | |
| Cost
of sales | |
| - | | |
| - | |
| Gross
Profit | |
| - | | |
| - | |
| Operating
expenses | |
| 1,675,677 | | |
| 1,417,278 | |
| Other
expense | |
| 395,203 | | |
| 360,169 | |
| Net
loss before income taxes and discontinued operations | |
$ | (2,070,880 | ) | |
$ | (1,777,447 | ) |
Net
Revenues
For
the nine months ended September 30, 2022 and 2021, we had no revenues.
Cost
of Sales
For
the six months ended September 2022 and 2021, we had no cost of sales as we had no revenues.
Operating
expenses
Operating
expenses increased by $258,399, or 18.2%, to $1,675,677 for nine months ended September 30, 2022 from
$1,417,278 for the nine months ended September 30, 2021 primarily due to increases in compensation costs of $199,796,
professional fees of $73,893, research and development costs of $33,041, depreciation costs of $3,859, rent expenses
of $27,905, and general and administration costs of $5,267, offset primarily by a decrease in marketing expenses of
$164,054, consulting fees of $12,918, investor relations costs of $78,386, and amortization costs of $12,606, as a result
of adding administrative infrastructure for our anticipated business development. In 2022, the Company has incurred an increase in professional
fees (primarily legal and audit fees), incurred a full year of compensation for its CEO and CTO and hired a CFO resulting
in increased compensation costs, increased consulting costs (primarily for public relations and brand awareness), has decreased
investor relations costs (primarily the fair value of common stock issued for services of $211,500 in 2021), and incurred a
full year of rent from the lease of office space in June 2021. Research and development costs consist of an increase of $46,618
attributed to in house efforts and a decrease of $13,577 to third parties for developmental services and testing.
For
the nine months ended September 30, 2022, we had marketing expenses of $446, research and development costs of $516,796,
and general and administrative expenses of $1,158,435 primarily due to professional fees of $172,170, compensation
costs of $532,643, insurance expense of $182,689, rent of $56,590, depreciation and amortization costs of $7,839,
investor relations costs of $43,465, consulting fees of $144,900, and general and administration costs of $18,139,
as a result of adding administrative infrastructure for our anticipated business development. In 2022, the Company has incurred professional
fees (primarily legal and audit fees), incurred compensation for its CEO and CTO and hired a CFO, incurred consulting costs (primarily
for public relations and brand awareness), had investor relations costs, and had rent through the lease of office space. Research
and development costs consist of $439,116 attributed to in house efforts and $77,680 to third parties for developmental
services and testing.
For
the nine months ended September 30, 2021, we had marketing expenses of $164,500, research and development costs of $483,755,
and general and administrative expenses of $933,523 primarily due to professional fees of $98,277, compensation costs
of $332,847, rent of $28,685, depreciation and amortization costs of $16,586, investor relations costs of $121,851,
consulting fees of $157,818, and general and administration costs of $12,959, as a result of adding administrative
infrastructure for our anticipated business development. In 2021, the Company has incurred professional fees (primarily legal and audit
fees, and consulting costs), had investor relations costs (primarily the fair value of common stock issued for services of $211,500),
and incurred compensation for its CEO and CTO. Research and development costs consist of $392,498 attributed to in house efforts
and $91,257 to third parties for developmental services and testing.
Other
Expense
Other
expense for the nine months ended September 30, 2022 totaled $395,203 primarily due to interest expense of $309,226
in conjunction with accretion of debt discount and interest expense of $85,875 in conjunction with accretion of original issuance
discount, compared to other expense of $360,169 for the nine months ended September 30, 2021 primarily due to interest
expense of $286,391 in conjunction with accretion of debt discount and interest expense of $44,683 in conjunction with
accretion of original issuance discount.
Net
loss before income taxes
Net
loss before income taxes and discontinued operations for the nine months ended September 30, 2022 totaled $2,070,880
primarily due to (increases/decreases) in compensation costs, professional fees, marketing costs, investor relations costs, consulting
fees, research and development costs, rent, and general and administration costs compared to a loss of $1,777,447 for the nine
months ended September 30, 2021 primarily due to (increases/decreases) in compensation costs, professional fees, investor
relations, consulting fees, research and development costs, rent, and general and administration costs.
Liquidity
and Capital Resources
Going
Concern
The
accompanying financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among
other things, the realization of assets and satisfaction of liabilities in the normal course of business. The Company had an accumulated
deficit of $6,336,639 at September 30, 2022, had a working capital deficit of $1,817,541 and $341,187 at September
30, 2022 and December 31, 2021, respectively, had a net loss of $726,609 and $2,070,880 and $665,904 and $1,777,447
for the three and nine months ended September 30, 2022 and 2021, respectively, and net cash used in operating activities
of $1,378,475 and $1,221,221 for the nine months ended September 30, 2022 and 2021, respectively, with no
revenue earned since inception, and a lack of operational history. These matters raise substantial doubt about the Company’s ability
to continue as a going concern.
While
the Company is attempting to expand operations and increase revenues, the Company’s cash position may not be significant enough
to support the Company’s daily operations. Management intends to raise additional funds by way of a public offering or an
asset sale transaction. Management believes that the actions presently being taken to further implement its business plan and generate
revenues provide the opportunity for the Company to continue as a going concern. While management believes in the viability of its strategy
to generate revenues and in its ability to raise additional funds or transact an asset sale, there can be no assurances to that effect
or on terms acceptable to the Company. The ability of the Company to continue as a going concern is dependent upon the Company’s
ability to further implement its business plan and generate revenues.
The
condensed consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a
going concern.
General
– Overall, we had a decrease in cash flows for the nine months ended September 30, 2022 of $312,833
resulting from cash used in operating activities of $1,378,475 and cash used in investing activities of $860, offset partially
by cash provided by financing activities of $1,066,502.
The
following is a summary of our cash flows provided by (used in) operating, investing, and financing activities during the periods indicated:
| | |
Nine
Months Ended September 30, | |
| | |
2022 | | |
2021 | |
| | |
| | |
| |
| Net
cash provided by (used in): | |
| | | |
| | |
| Operating
activities | |
$ | (1,378, 475 | ) | |
$ | (1,221,221 | ) |
| Investing
activities | |
| (860 | ) | |
| (20,205 | ) |
| Financing
activities | |
| 1,066,502 | | |
| 1,660,000 | |
| | |
$ | (312,833 | ) | |
$ | 418,574 | |
Cash
Flows from Operating Activities – For the nine months ended September 30, 2022, net cash used in operations
was $1,378,475 compared to net cash used in operations of $1,221,221 for the nine months ended September
30, 2021. Net cash used in operations was primarily due to a net loss of $2,070,880 for nine months ended September
30, 2022 and the changes in operating assets and liabilities of $289,465, primarily due to the increase in accounts payable
of $266,147 and accrued payroll and payroll taxes of $29,052, offset partially by other current liabilities of $555
and other current assets of $5,179. In addition, net cash used in operating activities includes adjustments to reconcile net
profit from depreciation expense of $5,139, amortization expense of $2,700, accretion of original issuance costs of $85,875,
and accretion of debt discount of $309,226.
For
the nine months ended September 30, 2021, net cash used in operations was $1,221,221. Net cash used in operations
was primarily due to a net loss of $1,777,447 for nine months ended September 30, 2021 and the changes in operating
assets and liabilities of $2,932, primarily due to the increase in accounts payable of $16,869 and other current liabilities
of $43,692, offset primarily by other current assets of $27,509, other assets of $20,711, and accrued payroll
and payroll taxes of $15,273. In addition, net cash used in operating activities includes adjustments to reconcile net profit from
depreciation expense of $1,279, amortization expense of $15,305, stock issued for services of $211,500, accretion
of original issuance costs of $44,683, and accretion of debt discount of $286,391.
Cash
Flows from Investing Activities – For the nine months ended September 30, 2022, net cash used in investing
activities was $860 due to the purchase of property and equipment compared to cash used in investing activities of $20,205
for the nine months ended September 30, 2021 due to the purchase of property and equipment.
Cash
Flows from Financing Activities – For the nine months ended September 30, 2022, net cash provided by financing
was $1,066,502, due to proceeds from short term convertible notes of $1,110,000 and fees associated with the filing of
the Company’s Form S-1 of $43,498 compared to cash provided by financing activities of $1,660,000 for the nine months
ended September 30, 2021 due to proceeds from common stock issued for cash of $1,465,000 and short term convertible notes
$250,000, and repayment of short term convertible notes of $55,000.
Financing
– We expect that our current working capital position, together with our expected future cash flows from operations will
be insufficient to fund our operations in the ordinary course of business, anticipated capital expenditures, debt payment requirements
and other contractual obligations for at least the next twelve months. As stated above, Management intends to raise additional
funds by way of a public offering or an asset sale transaction, however there can be no assurance that we will be successful
in completing such transactions.
We
have no present agreements or commitments with respect to any material acquisitions of other businesses, products, product rights or
technologies or any other material capital expenditures. However, we will continue to evaluate acquisitions of and/or investments in
products, technologies, capital equipment or improvements or companies that complement our business and may make such acquisitions and/or
investments in the future. Accordingly, we may need to obtain additional sources of capital in the future to finance any such acquisitions
and/or investments. We may not be able to obtain such financing on commercially reasonable terms, if at all. Due to the ongoing global
economic crisis, we believe it may be difficult to obtain additional financing if needed. Even if we are able to obtain additional financing,
it may contain undue restrictions on our operations, in the case of debt financing, or cause substantial dilution for our stockholders,
in the case of equity financing.
Capital
Expenditures
We
expect to purchase approximately $30,000 of equipment in connection with the expansion of our business during the next twelve months.
Fiscal
year end
Our
fiscal year end is December 31.
Critical
Accounting Policies
Refer
to Note 3 in the accompanying notes to the unaudited condensed consolidated financial statements for critical accounting policies.
Recent
Accounting Pronouncements
Refer
to Note 3 in the accompanying notes to the condensed consolidated financial statements.
Off-Balance
Sheet Arrangements
As
of September 30, 2022, we had not entered into any transaction, agreement or other contractual arrangement with an entity unconsolidated
under which it has:
| ● | a
retained or contingent interest in assets transferred to the unconsolidated entity or similar
arrangement that serves as credit; |
| | | |
| ● | liquidity
or market risk support to such entity for such assets; |
| | | |
| ● | an
obligation, including a contingent obligation, under a contract that would be accounted for
as a derivative instrument; or |
| | | |
| ● | an
obligation, including a contingent obligation, arising out of a variable interest in an unconsolidated
entity that is held by, and material to us, where such entity provides financing, liquidity,
market risk or credit risk support to or engages in leasing, hedging, or research and development
services with us. |
Inflation
We
do not believe that inflation has had a material effect on our results of operations.
DESCRIPTION
OF BUSINESS
Sigyn
Therapeutics, Inc. (“Sigyn”, the “Company”, “we,” “us,” or “our”) is a development-stage
company focused on addressing unmet needs in global health and biodefense. Sigyn Therapy™ is a broad-spectrum blood purification
technology designed to reduce the presence of viral pathogens, bacterial toxins, and inflammatory mediators from the bloodstream.
Candidate
treatment indications for Sigyn Therapy include endotoxemia and inflammation in End-Stage Renal Disease (ESRD) patients,
Sepsis (leading cause of hospital deaths worldwide1), Community Acquired Pneumonia (a leading cause of death among
infectious diseases2) and Emerging Bioterror and Pandemic threats.
Beyond
our focus to clinically advance Sigyn Therapy, we intend to develop
a pipeline of extracorporeal blood purification therapies. In this regard, we have filed patent and trademark submissions related
to a therapeutic system to enhance the delivery of cancer chemotherapy and reduce its toxicity.
Merger
Transaction
On
October 19, 2020, Reign Resources Corporation, completed a Share Exchange Agreement (the “Agreement”) with Sigyn Therapeutics,
Inc., a private entity incorporated in the State of Delaware on October 19, 2019. Pursuant to the Share Exchange Agreement, we acquired
100% of the issued and outstanding shares of privately held Sigyn Therapeutics common stock in exchange for 75% of the fully paid and
nonassessable shares of our common stock outstanding (the “Acquisition”). In conjunction with the transaction, we changed
our name from Reign Resources Corporation to Sigyn Therapeutics, Inc. pursuant to an amendment to our articles of incorporation that
was filed with the State of Delaware. Subsequently, our trading symbol was changed to SIGY. The Acquisition was treated as a “tax-free
exchange” under Section 368 of the Internal Revenue Code of 1986 and resulted in the private Sigyn Therapeutics corporate entity
becoming a wholly owned subsidiary known as Sigyn Medical Corporation. Upon the closing of the Acquisition, we appointed James A. Joyce
and Craig P. Roberts to serve as members of our Board of Directors.
As
of August 15, 2022, we had a total 37,295,813 shares issued and outstanding, of which 11,655,803 shares are held by non-affiliate shareholders.
Post-Merger
Developments
Since
the consummation of the Acquisition on October 19, 2020, we have advanced Sigyn Therapy from conceptual design through completion
of in vitro studies that have quantified the reduction of relevant therapeutic targets from human blood plasma
with small-scale versions of Sigyn Therapy. These include endotoxin (gram-negative bacterial toxin); peptidoglycan and lipoteichoic
acid (gram-positive bacterial toxins); viral pathogens (including SARS-CoV-2); hepatic toxins (ammonia, bile acid, and bilirubin); and
tumor necrosis factor alpha (TNF alpha), interleukin-1 beta (IL-1b), and interleukin 6 (IL-6), which are pro-inflammatory cytokines whose
dysregulated production (the cytokine storm) precipitate sepsis and play a prominent role in each of our therapeutic opportunities.
Subsequent
to these studies, we disclosed the completion of in vivo animal studies. In these studies, Sigyn Therapy was administered
via standard dialysis machines utilizing conventional blood-tubing sets, for periods of up to six hours in eight (8) porcine (pig) subjects,
each weighing approximately 40-45 kilograms. The studies were comprised of a pilot phase (two subjects), which evaluated the feasibility
of the study protocol in the first-in-mammal use of Sigyn Therapy; and an expansion phase (six subjects) to further assess treatment
feasibility and refine pre-treatment set-up and operating procedures. There were no serious adverse events reported in any of
the treated animal subjects. Of the eight treatments, seven were administered for the entire six-hour treatment period. One
treatment was halted early due to the observation of a clot in the device, which was believed to be the result of a procedural deviation
in the pre-treatment set-up. Important criteria for treatment feasibility – including hemodynamic parameters, serum chemistries
and hematologic measurements – were stable across all subjects.
The
studies were conducted by a clinical team at Innovative
BioTherapies, Inc. (“IBT”), under a contract with the University of Michigan to utilize animal care, associated institutional
review oversight, as well as surgical suite facilities located within the North Campus Research Complex. The treatment protocol
of the study was reviewed and approved by the University of Michigan Institutional Animal Care and Use Committee (IACUC).
The
animal studies were conducted to correspond with FDA’s best practice guidance. The number of animals enrolled in our study and
the amount of data collected was based on the ethical and least burdensome principles that underly the FDA goal of using the minimum
number of animals necessary to generate valid scientific data to demonstrate reasonable feasibility and performance of a medical
device prior to human study consideration. A porcine animal model is a generally accepted model for the study of extracorporeal
blood purification devices intended to treat infectious disease and inflammatory disorders. Regardless of these factors, FDA may require
that we conduct additional animal studies.
The
data resulting from our in vivo and in vitro studies is being incorporated into an Investigational Device Exemption (IDE) that
we are drafting for submission to the U.S. Food and Drug Administration (“FDA”) to support the potential initiation of a
human feasibility study in End-Stage Renal Disease (ESRD) patients with endotoxemia and elevated inflammatory cytokine production. As
per the study protocol, Sigyn Therapy is to be administered in combination with the regularly scheduled dialysis treatments of enrolled
subjects. The primary study objective will be to evaluate the safety of Sigyn Therapy in health compromised ESRD patients. A secondary
objective will be to quantify changes in circulating levels of endotoxin, tumor necrosis factor-αlpha (TNF-α), interleukin-1β
(IL-1β), and interleukin-6 (IL-6) before and after each Sigyn Therapy administration. Endotoxin and excess TNF-α, IL-1β,
and IL-6 production are commonly associated with each of our candidate treatment indications, including sepsis and community-acquired
pneumonia.
Based
on our previous experience in developing extracorporeal blood purification therapies, we believe that we have collected sufficient data
to support first-in-human studies of Sigyn Therapy. In this regard, we plan to submit an IDE application to FDA related to the potential
initiation of a human feasibility study during the 2023 calendar year. However, there is no assurance that FDA will approve the initiation
of our feasibility study. Additionally, while we believe the data from our in vivo and in vitro studies provides support for our
IDE submission, FDA may request that we conduct additional animal or pre-clinical studies prior to approving our IDE. Among our previous
experiences in developing extracorporeal blood purification therapies, our CEO oversaw the development of the Aethlon Hemopurifier, a
first-in-industry device that received an FDA “Breakthrough Device” designation for the treatment of life-threatening viruses
and was awarded a second FDA “Breakthrough Device” designation related to the treatment of cancer.
Legal
Proceedings
From
time to time, we may become party to litigation or other legal proceedings that we consider to be a part of the ordinary course of our
business. We are not currently involved in legal proceedings that could reasonably be expected to have a material adverse effect on our
business, prospects, financial condition or results of operations. We may become involved in material legal proceedings in the future.
To the best our knowledge, none of our directors, officers or affiliates is involved in a legal proceeding adverse to our business or
has a material interest adverse to our business.
Sigyn
Therapy Mechanism of Action
We
designed Sigyn Therapy to be a candidate to treat
pathogen-associated inflammatory conditions that are life-threatening. To date, pre-clinical in vitro studies have quantified
the reduction of viral pathogens, bacterial toxins, and inflammatory mediators from human blood plasma with small-scale versions
of Sigyn Therapy. Such capabilities establish Sigyn Therapy as a candidate to treat pathogen-associated conditions that precipitate
Sepsis, Community Acquired Pneumonia, Emerging Bioterror and Pandemic threats, and End-Stage Renal Disease patients with endotoxemia
and elevated inflammatory cytokine production.
To
support widespread implementation, Sigyn Therapy is a single-use disposable device that is deployable on the global infrastructure of
hemodialysis and continuous renal replacement therapy (CRRT) machines already located in hospitals and clinics. To reduce the risk of
blood clotting and hemolysis, the anticoagulant heparin is administered, which is the standard-of-care drug administered in dialysis
and CRRT therapies. During animal studies conducted at the University of Michigan, Sigyn Therapy was deployed for use on a hemodialysis
machine manufactured by Fresenius Medical Care, the global leader in the dialysis industry.
Incorporated
within Sigyn Therapy is a “cocktail” of adsorbent components formulated to optimize the broad-spectrum reduction
of therapeutic targets from the bloodstream. In the medical field, the term “cocktail” is a reference to the simultaneous
administration of multiple drugs (a drug cocktail) with differing mechanisms of actions. While drug cocktails are emerging as potential
mechanisms to treat cancer, they are life-saving countermeasures to treat HIV and Hepatitis-C viral infections. However, dosing of
multi-drug agent cocktails is limited by toxicity and adverse events that can result from deleterious drug interactions.
Sigyn
Therapy is not constrained by such limitations as active adsorbent components are maintained within Sigyn Therapy and not introduced
into the body. As a result, we are able to incorporate a substantial quantity of adsorbent components to capture therapeutic targets
outside of the body as they circulate through Sigyn Therapy. Each adsorbent component has differing capture characteristics that contribute
to optimizing the potential of Sigyn Therapy to reduce the presence of pathogenic and inflammatory targets that precipitate the
cytokine storm that underlies sepsis and other life-threatening inflammatory disorders.
The
adsorbent components incorporated within Sigyn Therapy provide more than 200,000 square meters (~50 acres) of surface area on which to
adsorb and remove circulating viruses, bacterial toxins, and inflammatory mediators. Beyond a potential capacity to reduce
therapeutic targets from human blood plasma, we believe that Sigyn Therapy offers an efficient treatment methodology.
Based on targeted blood flow rates of 350ml/min, a patient’s entire bloodstream can pass through Sigyn Therapy more
than fifteen times during a single four-hour treatment period.
From
a technical perspective, Sigyn Therapy is a 325mm long polycarbonate column that internally contains polyethersulphone hollow fibers
that have porous walls with a median pore size of ~200 nanometers (nm). As blood flows into Sigyn Therapy, plasma and therapeutic
targets below 200nm travel through the porous walls as a result of blood-side pressure. As the hollow fiber bundle within Sigyn Therapy
creates a resistance to the flow of blood, a pressure drop is created along the length of the device such that the blood-side pressure
is higher at the blood inlet and lower at the blood outlet. This allows for plasma and therapeutic targets to flow away from the blood
and into the extra-lumen space (inside the polycarbonate shell, yet outside the hollow-fiber bundle) to interact with Sigyn Therapy’s
adsorbent components in a low shear force environment. In the distal third of the fiber bundle, the pressure gradient is reversed, which
allows for plasma to flow back through the fiber walls to be reconvened into the bloodstream without the presence of therapeutic targets
that were captured or bound by adsorbent components housed in the extra-lumen space of Sigyn Therapy.
Overview
of Candidate Treatment Indications
Based
on data resulting from in vitro blood purification studies, our candidate treatment indications include, but are not limited to;
pathogen-associated inflammatory conditions that precipitate Sepsis (leading cause of hospital deaths worldwide), Community Acquired
Pneumonia (a leading cause of death among infectious diseases), Emerging Bioterror and Pandemic threats, and End-Stage Renal Disease
(ESRD) patients with endotoxemia and elevated inflammatory cytokine production. However, there is no assurance that human feasibility
and pivotal studies will demonstrate Sigyn Therapy to be a safe and efficacious treatment for any treatment indications.
End-Stage
Renal Disease, Endotoxemia and Inflammation
According
to the United States Renal Data System (USRDS), more than 550,000 individuals suffer from end-stage renal disease (ESRD), which results
in approximately 85 million kidney dialysis treatments being administered in the United States each year. Persistent inflammation is
a hallmark feature of ESRD as reflected by the excess production of inflammatory cytokines, including tumor necrosis factor-α (TNF-α),
interleukin-1β (IL-1β) and interleukin-6 (IL-6), which contribute to increased all-cause mortality. ESRD inflammation also
induces intestinal permeability, which allows endotoxin (gram-negative bacterial toxin) to translocate from the gut and into the bloodstream.
Beyond fueling further inflammation, endotoxin is potent activator of sepsis, which can lead to multiple organ failure and ultimately
death.
Sigyn
Therapy establishes a candidate strategy to improve the health and quality-of-life of ESRD patients. Beyond its potential to reduce
endotoxin, TNF-α, IL-1β, and IL-6 from human blood plasma, Sigyn Therapy can be administered in series with regularly
scheduled dialysis therapy.
We
are currently preparing an Investigational Device Exemption (IDE) for submission to the U.S. Food and Drug Administration (“FDA”)
related to a human feasibility study of Sigyn Therapy in ESRD patients with endotoxemia and elevated inflammatory cytokine production.
As per the study protocol, Sigyn Therapy will be administered in combination with the regularly scheduled dialysis treatments of enrolled
subjects. The primary study objective will be to evaluate the safety of Sigyn Therapy in health compromised ESRD patients. A secondary
objective is to quantify changes in circulating levels of endotoxin, tumor necrosis factor-α (TNF-α), interleukin-1β
(IL-1β), and interleukin-6 (IL-6) before and after each Sigyn Therapy administration. Endotoxin and excess TNF-α, IL-1β,
and IL-6 production are commonly associated with each of our candidate treatment indications, including sepsis and community-acquired
pneumonia.
Sepsis
Sepsis
is defined as a life-threatening organ dysfunction caused by a dysregulated host response to infection. In January of 2020, a report
entitled; “Global, Regional, and National Sepsis Incidence and Mortality, 1990-2017: Analysis for the Global Burden of Disease
Study,” was published in the Journal Lancet. The publication reported 48.9 million cases of sepsis and 11 million deaths in
2017. In that same year, an estimated 20.3 million sepsis cases and 2.9 million deaths were among children younger than 5-years old.
The report included a reference that sepsis kills more people around the world than all forms of cancer combined. In the United States,
sepsis was reported to be the most common cause of hospital deaths with an annual financial burden that exceeds $24 billion.
To
date, more than 100 human studies have been conducted to evaluate the safety and efficacy of candidate drugs to treat sepsis. With one
brief exception (Xigris, Eli Lilly), none of these studies resulted in a market cleared therapy.
As
sepsis remains beyond the reach of single-target drugs, there is an emerging interest in multi-mechanism therapies that can target both
inflammatory and pathogen associated targets. Sigyn Therapy addresses a broad-spectrum of pathogen sources and the resulting dysregulated
cytokine production (the cytokine storm) that is the hallmark of sepsis. Additionally, we believe that inflammatory cytokine cargos transported
by CytoVesicles may represent a novel, yet important therapeutic target.
Community
Acquired Pneumonia
Community
Acquired Pneumonia (CAP) represents a significant opportunity for Sigyn Therapy to reduce the occurrence of sepsis. CAP is a leading
cause of death among infectious diseases, the leading cause of death in children under five years of age, and a catalyst for approximately
50% of sepsis and septic shock cases.
In
the United States, more than 1.5 million individuals are hospitalized with CAP each year, resulting in an annual financial burden that
exceeds $10 billion.
Statistically,
a therapeutic strategy that reduced the incidence of CAP related sepsis and septic shock would save thousands of lives each year. In
a study of 4,222 patients, the all-cause mortality for adult patients with CAP was reported to be 6.5% during hospitalization. However,
the mortality of patients with CAP related sepsis and septic shock rose to 51% during hospitalization.
CAP
is further complicated by the fact that the pathogen sources of CAP are identified in only 38% of patients, based on a study of 2,259
subjects whose pneumonia diagnosis was confirmed by chest x-ray. Of the source pathogens identified in the study, ninety seven percent
(97%) were either viral or bacterial in origin.
To
reduce the occurrence of CAP related sepsis and septic shock, Sigyn Therapy offers a broad-spectrum mechanism to reduce the circulating
presence of viral pathogens and bacterial toxins before and if they are identified as the CAP pathogen source. Additionally, Sigyn Therapy
may help to control the excess production of inflammatory cytokines (the cytokine storm) that precipitate sepsis and septic shock.
Emerging
Pandemic Threats
Covid-19
affirmed the use of extracorporeal blood purification as a first-line countermeasures to treat an emerging pandemic threat not addressed
with an approved drug or vaccine at the outset of an outbreak. On March 24, 2020, the U.S. Department of Health and Human Services (HHS)
declared that the emergence of COVID-19 justified the Emergency-Use Authorization (EUA) of drugs, biological products, and medical devices
to combat the pandemic. Within a month of this HHS declaration, FDA awarded an EUA to blood purification therapies from Terumo BCT, ExThera
Medical Corporation, CytoSorbents, Inc., and Baxter Healthcare Corporation. In connection with these authorizations, FDA published a
statement that blood purification devices may be effective at treating patients with confirmed COVID-19 by reducing various pathogens,
cytokines, and other inflammatory mediators from the bloodstream.
Consistent
with FDA’s statement, small-scale versions of Sigyn Therapy have been quantified to reduce the presence
of various pathogens, cytokines, and other inflammatory mediators from human blood plasma during in vitro studies.
As such, we believe that Sigyn Therapy could provide a candidate strategy to treat future pandemic outbreaks, which
are increasingly being fueled by a confluence of global warming, urban crowding, and intercontinental travel.
Additionally,
as a majority of infectious human viruses are not addressed with a corresponding drug or vaccine, there may be an ongoing need for blood
purification technologies that offer to reduce the severity of infection and mitigate the excess production of inflammatory cytokines
(the cytokine storm) associated with high mortality in non-pandemic viral infections. In this regard, we believe Sigyn Therapy aligns
with HHS initiatives established through the Public Health Emergency Medical Countermeasure Enterprise (PHEMCE) that support the development
of broad-spectrum medical countermeasures that can mitigate the impact of an emerging pandemic or bioterror threat, yet also have viability
in established disease indications.
Candidate
Pipeline Product
Beyond
our focus to clinically advance Sigyn Therapy, we intend to develop a pipeline of extracorporeal blood purification therapies. In this
regard, we have designed a therapeutic system to enhance the benefit of cancer chemotherapy. To support this endeavor, we disclosed on
October 6, 2022, that a patent application entitled: “SYSTEM AND METHODS
TO ENHANCE CHEMOTHERAPY DELIVERY AND REDUCE TOXICITY” had been filed with the
United States Patent and Trademark Office (“USPTO”). On October 13, 2022, we subsequently disclosed that trademark applications
to register ChemoPrepTM and ChemoPureTM were filed with the USPTO”.
Chemotherapeutic
agents are the most commonly administered drugs to treat cancer, which is the second leading cause of death in the United States. Despite
therapeutic advances, treatment toxicity, drug resistance and inadequate tumor site delivery restrict the benefit of chemotherapy. To
overcome these challenges, our patent submission describes a therapeutic device system whose primary objective is to enhance tumor site
delivery of chemotherapy and reduce its toxicity. A secondary objective of the system is to reduce treatment dosing without sacrificing
patient benefit, or conversely increase chemotherapy dosing without added toxicity. In concert with these objectives, our candidate
therapeutic system offers to inhibit the spread of cancer metastasis that can be induced by the administration of chemotherapy.
Our
proposed chemotherapy enhancement system is comprised of two blood purification technologies. ChemoPrepTM, administered prior
to chemotherapy to optimize tumor site delivery and improve the benefit of ChemoPureTM, which is deployed post-chemotherapy
to reduce treatment toxicity and inhibit the potential spread of cancer metastasis.
To
improve the delivery of chemotherapeutic agents, we designed ChemoPrepTM with an objective to reduce the bloodstream presence
of tumor-derived extracellular vesicles or exosomes (Tumor-EXs) that diminish the efficacy of chemotherapy. As compared to non-cancer
subjects, Tumor-EXs are highly concentrated in the bloodstream of those suffering from cancer. Tumor-EXs decoy and directly inhibit chemotherapeutic
agents from reaching tumor cell targets. Tumor-EXs have also been reported to export chemotherapeutic agents out of cancer cells. Based
on these factors, we believe the pre-chemo depletion of circulating Tumor-EXs could establish a novel, yet practical strategy to increase
tumor-site saturation of chemotherapy, which in turn may permit for lower doses of chemotherapy to be administered without diminishing
patient benefit.
ChemoPrepTM
may also improve the performance of ChemoPureTM as a reduced bloodstream presence of Tumor-EXs, which are competitive
binding and adsorption factors based on similar size and structural characteristics, would likely increase the efficiency of ChemoPureTM
to reduce the presence of off-target chemotherapeutic agents that remain circulating in the bloodstream.
ChemoPureTM
was designed to perform two critical functions after chemotherapy administration. To reduce treatment toxicity by lowering the
bloodstream presence of chemotherapeutic agents that are not delivered to the target tumor site, and to reduce the circulating presence
of chemotherapy-induced Tumor-EXs that may promote the spread of cancer metastases.
Unlike
Sigyn TherapyTM, which is a candidate to treat life-threatening conditions that are not addressed with approved drug therapies,
the intent of the ChemoPrepTM and ChemoPureTM is to enhance the delivery of market-cleared chemotherapeutic drugs
and reduce their toxicity. Additionally, while Sigyn TherapyTM is a hollow-fiber based device designed for use on dialysis
and continuous renal replacement machines, ChemoPrepTM and ChemoPureTM do not contain hollow-fibers and are intended
for use on portable blood processing systems that can be located within the clinical sites where chemotherapy is administered. During
treatment, the functionality of the blood processing system allows for patient blood plasma to flow through our devices, which contain
formulations of adsorbent and binding components intended deplete Tumor-EXs and chemotherapeutic agents from the bloodstream.
In
an in vitro study conducted by researchers at Innovative Biotherapies, we obtained pre-clinical insight that liposomal nanoparticles,
commonly used to deliver chemotherapeutic agents, can be reduced from human blood plasma with a formulation of adsorbent components.
In the study, liposome concentrations in human blood plasma were reduced by 92.5% after a two-hour interaction with the adsorbent components.
Beyond providing initial support for our candidate strategy to remove liposomal drug agents, the study established the possibility that
Tumor-EXs may also be reduced from blood plasma as liposomes have previously served as a research model system for isolating extracellular
vesicles and exosomes based on a similarity of size and structural characteristics.
Recent
Corporate Developments
| ● | December
2020 – Reported the first in vitro study results of Sigyn Therapy.
The study reported the simultaneous reduction of endotoxin, a gram-negative bacterial toxin,
and relevant pro-inflammatory cytokines from human blood plasma. The cytokines evaluated
in the study were Interleukin-1 Beta (IL-1B), Interleukin-6 (IL-6) and Tumor Necrosis
Factor alpha (TNF-a). |
| | | |
| ● | January
2021 - Reported the results of an in vitro study that modeled the potential
of Sigyn Therapy adsorbent components to reduce the presence of CytoVesicles
(extracellular vesicles that transport inflammatory cargos in the bloodstream) from human
blood plasma. |
| | | |
| ● | January
2021 - Appointed industry veteran Eric Lynam as Head of Clinical Affairs, with a mandate
to oversee clinical studies of Sigyn Therapy. |
| | | |
| ● | April
2021 - Disclosed in vitro study observations that small-scale versions
of Sigyn Therapy were quantified to reduce the presence of viral pathogens,
including SARS-CoV-2 (COVID-19) from human blood plasma. |
| | | |
| ● | April
2021 - Appointed former Aethlon Medical executive Charlene Owen as Director of Operations. |
| | | |
| ● | July
2021 - Disclosed the completion of in vitro studies that quantified
the reduction of hepatic toxins (ammonia, bile acid & bilirubin) from human
blood plasma with small-scale versions of Sigyn Therapy. |
| | | |
| ● | July
2021 - Disclosed the completion of a first-in-mammal pilot animal study of Sigyn
Therapy at the University of Michigan. |
| | | |
| ● | December
2021 - Reported that small-scale versions of Sigyn Therapy reduced the presence
of gram-positive bacterial toxins from human blood plasma. |
| | | |
| ● | February
2022 - Reported the subsequent completion of an in vivo animal study
of Sigyn Therapy at the University of Michigan. |
| | | |
| ● | March
2022 - Appointed Jeremy Ferrell, CPA, MBA as Chief Financial Officer. |
| | | |
| ● | March
2022 - Announced the appointments of two internationally recognized clinician researchers,
Alexander S. Yevzlin, MD, FASN and H. David Humes, MD, to Sigyn Therapeutics’ Scientific
Advisory Board. |
| | | |
| ● | March
2022 - Ajay Verma, MD, PhD, a recognized thought leader in the field of neurology joins
the Scientific Advisory Board. |
| | | |
| ● | April
2022 - Donald J. Hillebrand, M.D., a recognized thought leader in the field of Hepatology
and Liver Transplantation joins the Scientific Advisory Board. |
| | | |
| ● | August
2022 – The Company’s common stock commences trading on the OTCQB Venture
Market. |
| | | |
| ● | October
2022 – |
| ● | Announced
the appointment of Richa Nand, B.S., J.D.; Jim Dorst, B.S., M.S.; and Christopher Wetzel,
B.S., M.B.A. to our Board of Directors. |
| | | |
| ● | Patent
application entitled: “SYSTEM AND METHODS TO ENHANCE CHEMOTHERAPY DELIVERY AND REDUCE
TOXICITY” is submitted to the United States Patent and Trademark Office (“USPTO”). |
| | | |
| ● | Trademark
applications to register ChemoPrepTM and ChemoPureTM are filed with
the USPTO related to medical device products to enhance cancer therapies. |
Marketing
and Sales
At
present, our primary focus is the clinical and regulatory advancement of Sigyn Therapy. As such, we do not market or sell any therapeutic
products at this time. However, we plan to forge relationships with organizations that have established distribution channels into markets
that may have a demand for Sigyn Therapy should it receive market clearance from FDA or other foreign regulatory agencies.
Intellectual
Property
We
own the intellectual property rights to pending royalty-free patents that have been assigned to us by our co-founders, James A. Joyce
and Craig P. Roberts. We have also received a “Notice of Allowance” from the United States Patent and Trademark Office (USPTO)
related to the use of Sigyn Therapeutics, Sigyn Therapy, and the protection of our corporate logo. We plan to continually expand our
intellectual property portfolio and protect trade secrets that are not the subject of patent submissions. However, there is no assurance
that the claims of current pending and future patent applications will result in issued patents. Pending changes in patent law, it is
anticipated that each patent that becomes issued will have an enforceable life that will extend for a period of 20 years from the initial
patent filing date and will expire at the end of such 20 year terms.
At
present, we own the rights to the following patents pending.
DEVICES,
SYSTEMS AND METHODS FOR THE BROAD-SPECTRUM REDUCTION OF PRO-INFLAMMATORY CYTOKINES IN BLOOD - U.S. Application No.: 62/881,740; Filing
Date: 2019-08-01 - Inventors: Joyce and Roberts
DEVICES,
SYSTEMS AND METHODS FOR THE BROAD-SPECTRUM REDUCTION OF PRO-INFLAMMATORY CYTOKINES IN BLOOD - International Patent Application No.: PCT/US2020/044223;
Filing Date: 2020-07-30 - Inventors: Joyce and Roberts
DEVICES,
SYSTEMS AND METHODS FOR THE BROAD-SPECTRUM REDUCTION OF PRO-INFLAMMATORY CYTOKINES IN BLOOD - U.S. Patent Application No.: 16/943,436;
Filing Date: 2020-07-30 - Inventors: Joyce and Roberts
DEVICES,
SYSTEMS AND METHODS FOR THE BROAD-SPECTRUM REDUCTION OF PRO-INFLAMMATORY CYTOKINES IN BLOOD - EP No.: 20757445; Filing Date: 2022-01-24
- Inventors: Joyce and Roberts
DEVICES,
SYSTEMS AND METHODS FOR THE BROAD-SPECTRUM REDUCTION OF PRO-INFLAMMATORY CYTOKINES IN BLOOD - CA No.: 3148773; Filing Date: 2022-01-25
- Inventors: Joyce and Roberts
DEVICES,
SYSTEMS AND METHODS FOR THE BROAD-SPECTRUM REDUCTION OF PRO-INFLAMMATORY CYTOKINES IN BLOOD - JP No.: 2022-506670; Filing Date: 2022-01-31
- Inventors: Joyce and Roberts
EXTRA-LUMEN
ADSORPTION OF VIRAL PATHOGENS FROM BLOOD U.S. Patent Application No.: 63/177,520; Filing Date: 2021-04-21 Inventor: James A. Joyce
SYSTEM
AND METHODS TO ENHANCE CHEMOTHERAPY DELIVERY AND REDUCE TOXICITY U.S. Patent Application No.: 63/410,764; Filing Date: 09/28/2022 Inventor:
James A. Joyce
Government
Regulation
In
the United States, Sigyn Therapy is subject to regulation by the FDA. Should we seek to commercialize Sigyn Therapy outside the United
States, we expect to face comparable international regulatory oversight. The U.S. regulatory jurisdiction for extracorporeal blood purification
therapies is the Center for Devices and Radiological Health (“CDRH”), the FDA branch that oversees the market approval of
medical devices.
Based
on published CDRH guidance, we believe that Sigyn Therapy will be classified as a Class III medical device that is subject to a Pre-Market
Approval (“PMA”) submission pathway. A PMA pathway requires extensive data, including but not limited to technical documents,
preclinical studies, animal studies, human clinical trials, the establishment of Current Good Manufacturing Practices (“cGMPs”)
standards and labeling that fulfills FDA’s requirement to demonstrate reasonable evidence of safety and effectiveness of a medical
device product. However, as Sigyn Therapy does not emit electronic product radiation, it will not be subject to regulatory challenges
associated with medical devices that emit electronic radiation.
The
commercialization of medical devices in the United States requires either a prior 510(k) clearance, unless it is exempt, or a PMA from
the FDA. Generally, if a new device has a predicate that is already on the market under a 510(k) clearance, the FDA will allow that new
device to be marketed under a 510(k) clearance; otherwise, a premarket approval, or PMA, is required. Medical devices are classified
into one of three classes; Class I, Class II or Class III which are determined by the degree of risk associated with each medical device
and the extent of control needed to provide reasonable assurance of safety and effectiveness. Class I devices are deemed to be low risk
and are subject to the general controls of the Federal Food, Drug and Cosmetic Act, such as provisions that relate to: adulteration;
misbranding; registration and listing; notification, including repair, replacement, or refund; records and reports; and good manufacturing
practices. Most Class I devices are classified as exempt from pre-market notification under section 510(k) of the FD&C Act, and therefore
may be commercially distributed without obtaining 510(k) clearance from the FDA. Class II devices are subject to both general controls
and special controls to provide reasonable assurance of safety and effectiveness. Special controls include performance standards, post
market surveillance, patient registries and guidance documents. A manufacturer may be required to submit to the FDA a pre-market notification
requesting permission to commercially distribute some Class II devices. Devices deemed by the FDA to pose the greatest risk, such as
life-sustaining, life-supporting or implantable devices, or devices deemed not substantially equivalent to a previously cleared 510(k)
device, are placed in Class III. A Class III device cannot be marketed in the United States unless the FDA approves the device after
submission of a PMA. We believe that Sigyn Therapy will be classified as a Class III device and as such will be subject to a PMA submission
and approval.
Should
Sigyn Therapy receive market clearance from FDA, we would need to comply with applicable laws and regulations that govern the development,
testing, manufacturing, labeling, marketing, storage, distribution, advertising and promotion, and post-marketing surveillance reporting
for medical devices. Failure to comply with these applicable requirements may subject a device and/or its manufacturer to a variety of
administrative sanctions, such as issuance of warning letters, import detentions, civil monetary penalties and/or judicial sanctions,
such as product seizures, injunctions and criminal prosecution. Our failure to comply with any of these laws and regulations could have
a material adverse effect on our operations.
The
Pre-market Approval Pathway
A
pre-market approval (PMA) application must be submitted to the FDA for Class III devices for which FDA requires a PMA. The PMA application
process is much more demanding than the 510(k)-pre-market notification process. A PMA application must be supported by extensive data,
including but not limited to technical, preclinical, clinical trials, manufacturing and labeling to demonstrate to the FDA’s satisfaction
reasonable evidence of safety and effectiveness of the device.
After
a PMA application is submitted, the FDA has 45 days to determine whether the application is sufficiently complete to permit a substantive
review and thus whether the FDA will file the application for review. The FDA has 180 days to review a filed PMA application, although
the review of an application generally occurs over a significantly longer period of time and can take up to several years. During this
review period, the FDA may request additional information or clarification of the information already provided. Also, an advisory panel
of experts from outside the FDA may be convened to review and evaluate the application and provide recommendations to the FDA as to the
approvability of the device.
Although
the FDA is not bound by the advisory panel decision, the panel’s recommendations are important to the FDA decision making process.
In addition, the FDA may conduct a preapproval inspection of the manufacturing facility to ensure compliance with the Quality System
Regulation, or QSR. The agency also may inspect one or more clinical sites to assure compliance with FDA’s regulations.
Upon
completion of the PMA review, the FDA may: (i) approve the PMA which authorizes commercial marketing with specific prescribing information
for one or more indications, which can be more limited than those originally sought; (ii) issue an approvable letter which indicates
the FDA’s belief that the PMA is approvable and states what additional information the FDA requires, or the post-approval commitments
that must be agreed to prior to approval; (iii) issue a not approvable letter which outlines steps required for approval, but which are
typically more onerous than those in an approvable letter, and may require additional clinical trials that are often expensive and time
consuming and can delay approval for months or even years; or (iv) deny the application. If the FDA issues an approvable or not approvable
letter, the applicant has 180 days to respond, after which the FDA’s review clock is reset.
Clinical
Trials
Clinical
trials are almost always required to support PMA market clearance and are sometimes required for 510(k) clearance. In the United States,
for significant risk Class III devices, these trials require submission of an Investigational Device Exemption (IDE) application to the
FDA. The IDE application must be supported by appropriate data, such as animal and laboratory testing results, showing it is safe to
test the device in humans and that the testing protocol is scientifically sound. The IDE must be approved in advance by the FDA for a
specific number of patients at specified study sites. During the trial, the sponsor must comply with the FDA’s IDE requirements
for investigator selection, trial monitoring, reporting and record keeping. The investigators must obtain patient informed consent, rigorously
follow the investigational plan and study protocol, control the disposition of investigational devices and comply with all reporting
and record keeping requirements. Clinical trials for Class III devices may not begin until the IDE application is approved by the FDA
and the appropriate institutional review boards, or IRBs, at the clinical trial sites. An IRB is an appropriately constituted group that
has been formally designated to review and monitor medical research involving subjects and which has the authority to approve, require
modifications in, or disapprove research to protect the rights, safety and welfare of human research subjects. The FDA or the IRB at
each site at which a clinical trial is being performed may withdraw approval of a clinical trial at any time for various reasons, including
a belief that the risks to study subjects outweigh the benefits or a failure to comply with FDA or IRB requirements. Even if a trial
is completed, there is no assurance that clinical testing will demonstrate the safety and effectiveness of Sigyn Therapy or other pipeline
devices.
Manufacturing
and Procurement
We
are advancing a manufacturing relationship with an FDA registered Contract Manufacturing Organization (CMO) to establish cGMPs compliant
manufacturing to support human clinical studies and potential commercialization should we receive clearance to market Sigyn Therapy.
We plan to establish manufacturing procedure specifications that define each stage of our manufacturing, inspection and testing processes
and the control parameters or acceptance criteria that apply to each activity that result in the production of our technology.
We
have also established relationships with industry vendors that provide components necessary to manufacture our device. Should the relationship
with an industry vendor be interrupted or discontinued, we believe that alternate component suppliers can be identified to support the
continued manufacturing of our product. However, delays related to interrupted or discontinued vendor relationships could adversely impact
our business.
Research
and Product Development
To
date, we have outsourced our research and product development activities, which include the performance of in vitro blood plasma
validation studies, animal studies, pre-cGMPs product assembly and manufacturing through third party organizations with experience in
advancing extracorporeal blood purification technologies. Our pre-clinical in vitro blood plasma studies we each performed under
an agreement with Innovative BioTherapies, Inc. (IBT) and our animal clinical studies were conducted by IBT team members through a contract
with the University of Michigan to utilize animal care, associated institutional review oversight, as well as surgical suite facilities
located within the North Campus Research Complex. While we maintain ownership rights to all study data collected by IBT, we do permit
for IBT to publish or present the results of our contracted studies. At present, we do not have plans to build and staff our own research
and product development facility.
Employees
As
of the date of this prospectus, the Company had 5 employees and believes its relationships with its employees are good.
DESCRIPTION
OF PROPERTY
Operating
Lease
Our
corporate address 2468 Historic Decatur Road, Suite 140, San Diego, California, 92106
On
May 27, 2021, the Company entered into a sixty-three month lease for its corporate office at $5,955 per month commencing June 15, 2021
maturing September 30, 2026.
We
believe that our existing facilities are adequate for our current needs and that we will be able to lease suitable additional or alternative
space on commercially reasonable terms if and when we need it.
DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
Directors
and Executive Officers
The
following table sets forth the names, ages, and biographical information of each of our current directors and executive officers and
the positions with the Company held by each person. Our executive officers are elected annually by the board of directors. The directors
serve one-year terms until their successors are elected. The executive officers serve terms of one year or until their death, resignation
or removal by the board of directors. Unless described below, there are no family relationships among any of the directors and officers.
| Name |
|
Age |
|
Title |
| Jim
Joyce |
|
60 |
|
Chief
Executive Officer and Chairman of the Board of Directors (“CEO”) |
| Craig
Roberts |
|
69 |
|
Chief
Technology Officer and Director |
| Jeremy
Ferrell (1) |
|
52 |
|
Chief
Financial Officer |
| Richa
Nand (2) |
|
49 |
|
Non-Employee
Director |
| Jim
Dorst (2) |
|
69
|
|
Non-Employee
Director |
| Christopher
Wetzel (2) |
|
47 |
|
Non-Employee
Director |
| (1) | Mr.
Ferrell was hired as the Company’s Chief Financial Officer effective March 9, 2022. |
| | |
| (2) | Ms.
Nand, Mr. Dorst and Mr. Wetzel were appointed as Non-Executive Directors effective October
10, 2022. |
Executive
Officers
Jim
Joyce. Mr. Joyce is a Co-founder of Sigyn Therapeutics and has served as Chairman and CEO of the Company since it was founded
in 2019. He has 30+ years of diverse public market experience, which includes two decades of public company CEO and Corporate Board leadership
roles. Previously, Mr. Joyce was the founder of Exosome Sciences, Inc., where he served as Executive Chairman from 2011 to 2018. Mr.
Joyce is also the founder, former Chairman and CEO of Aethlon Medical, a therapeutic device company that he navigated from a single shareholder
start-up to Nasdaq-traded Company with 8000+ shareholders.
While
employed at Aethlon from 1999 to 2018, Mr. Joyce oversaw the development of the Aethlon Hemopurifier, the first therapeutic candidate
to receive two “Breakthrough Device” designations from the FDA. Under his leadership, the Hemopurifier received FDA “Emergency
Use Authorization” (EAU) approval to treat Ebola virus and additionally was cleared to treat Ebola by the German Government and
Health Canada. Time Magazine named the Hemopurifier one of the “11 Most Remarkable Advances in Healthcare” and designated
the device to its “Top 25 Best Inventions” award list.
During
Mr. Joyce’s tenure, Aethlon won multiple Department of Defense (DOD) contract awards, a National Cancer Institute (NCI) contract
award and grants from the National Institutes of Health (NIH). He also led the completion of approximately $100 million of equity financings
and originated preclinical and clinical collaborations with more than twenty government and non-government institutes and organizations.
We
believe Mr. Joyce’s service as our Chief Executive Officer, his extensive experience in therapeutic device technologies, his prior
board service and his extensive public company background qualifies him to serve on our board of directors.
Craig
Roberts. Mr. Roberts is an inventor of therapeutic device technologies, which includes a Percutaneous Adult Extracorporeal Membrane
Oxygenation (ECMO) system that was licensed and subsequently sold to C.R. Bard. During the ongoing pandemic, ECMO has been broadly deployed
to treat critically ill COVID-19 patients. Additionally, Mr. Roberts is the inventor of the IMPACT System, which received CE Mark clearance
in the European Union and was subsequently registered in 32 countries and successfully deployed to treat cytokine storm related conditions,
including sepsis, acute respiratory distress syndrome (ARDS), acute liver failure, severe pneumonia and H5N1 bird flu virus infection.
Mr.
Roberts is a Co-founder of Sigyn Therapeutics and has been our Chief Technical Officer since it was founded in 2019. Prior to joining
the Company, Mr. Roberts served as a consultant for Aethlon Medical, Inc. from 2016 to 2019. Prior to Aethlon, Mr. Roberts was a founder,
Chief Technology Officer and Board Member of Hemolife Medical, Inc. We believe Mr. Roberts’s service as our Chief Technology Officer,
his extensive experience with therapeutic device technologies and his previous service as board of medical device company qualifies
him to serve on our board of directors.
Jeremy
Ferrell. Mr. Ferrell has more than 25 years of finance and operations leadership experience, with expertise in venture capital;
mergers and acquisitions; due diligence; initial public offerings; strategic alliance negotiation; and financial planning and reporting.
Mr. Ferrell has served as our CFO since March 2022. Prior to joining the Company, Mr. Ferrell served as the CFO at Miku, Inc, from 2018
to 2022. Previously, he founded a Fractional CFO Services firm, where he served as CFO for various life sciences and technology companies,
including Singular Genomics, Inc., Aspen Neuroscience, Inc., and Hyduro, Inc. Before that, he served as Corporate Controller for ecoATM,
Inc., which was acquired by Outerwall, Inc. in 2013. Earlier in his career, Mr. Ferrell practiced as a certified public accountant. Mr.
Ferrell received his Bachelor of Science degree in Accountancy from Liberty University and his Master of Business Administration degree
in International Finance from the Thunderbird School of Global Management.
Non-Employee
Directors
Richa
Nand. Ms.Nand is a senior legal executive with more than 20 years of experience as an intellectual property (“IP”)
attorney and strategic business advisor for biotechnology and medical device companies. Ms. Nand is the founder of Insight Patents (for
which she has been a principal since 2014), a legal and consulting firm providing IP and transactional corporate services for the
life sciences industry. Ms. Nand previously served as Vice President of Corporate Development and Legal at Bird Rock Bio – a Johnson
& Johnson-backed biopharmaceutical company in San Diego – and Vice President of Intellectual Property and Licensing; Director
of Business Development; and In-House Patent Counsel at Cytori Therapeutics. Prior to law school, she was a biomedical researcher at
Cedars Sinai Medical Center in Beverly Hills, California. Ms. Nand received a Bachelor of Science degree in Microbiology and Molecular
Genetics from the University of California, Los Angeles, and a Juris Doctor degree from Boston University School of Law. The Company
believes Ms. Nand is qualified to sit on its Board due to her experience with medical device companies.
Jim
Dorst. Mr. Dorst has more than 30 years of senior management experience in finance, operations, planning and business transactions
at both private and public companies. He was most recently Director of Corporate Development at SYNNEX/Concentrix from July 2013 to
January 2021, where he was primarily responsible for mergers and acquisitions. Mr. Dorst was previously Chief Operating Officer (“COO”)
and Chief Financial Officer (“CFO”) at SpectraScience, Inc.; CFO of Aethlon Medical, Inc. and Vice President of Finance and
Operations for Verdisoft Corporation. In addition, he previously served as Senior Vice President of Finance and Administration at SeeCommerce;
CFO and COO of Omnis Technology Corp; and CFO and Senior Vice President of Information Technology at Savoir Technology Group, Inc. Mr.
Dorst practiced as a Certified Public Accountant with Coopers & Lybrand (now PricewaterhouseCoopers LLP); and holds a Master of Science
degree in Accounting and a Bachelor of Science degree in Finance from the University of Oregon. The Company believes Mr. Dorst is
qualified to sit on its Board due to his longstanding involvement with public companies.
Christopher
Wetzel. Mr. Wetzel has more than 25 years of leadership experience in various aspects of the healthcare delivery system and since
2004, has served as Chief Executive Officer for the Surgery Center at Hamilton in New Jersey. His career has focused on building organizations,
increasing operational efficiency, increasing profitability, maximizing revenue, and managing change in the complex and high-growth healthcare
environment. Mr. Wetzel applied his broad background in strategy, finance, and operations to guide various entities starting new ventures,
entering new markets, and reengineering business processes. He is a long-term investor in the extracorporeal therapy space. Mr. Wetzel
received a Master of Business Administration degree in Healthcare Management and a Bachelor of Science degree in Nursing from Thomas
Jefferson University (formerly Philadelphia University). The Company believes Mr. Wetzel is qualified to sit on its Board due to his
decades of experience in the healthcare delivery system.
Conflicts
of Interest
Certain
potential conflicts of interest are inherent in the relationships between our officers and directors and us.
From
time to time, one or more of our affiliates may form or hold an ownership interest in and/or manage other businesses both related and
unrelated to the type of business that we own and operate. These persons expect to continue to form, hold an ownership interest in and/or
manage additional other businesses which may compete with our business with respect to operations, including financing and marketing,
management time and services and potential customers. These activities may give rise to conflicts between or among the interests of us
and other businesses with which our affiliates are associated. Our affiliates are in no way prohibited from undertaking such activities,
and neither we nor our shareholders will have any right to require participation in such other activities.
We
may transact business with some of our officers, directors and affiliates, as well as with firms in which some of our officers, directors
or affiliates have a material interest, potential conflicts may arise between the respective interests of us and these related persons
or entities. We believe that such transactions will be effected on terms at least as favorable to us as those available from unrelated
third parties. As of this filing, we have not transacted business with any officer, director, or affiliate.
With
respect to transactions involving real or apparent conflicts of interest, we have adopted policies and procedures which require that:
(i) the fact of the relationship or interest giving rise to the potential conflict be disclosed or known to the directors who authorize
or approve the transaction prior to such authorization or approval, (ii) the transaction be approved by a majority of our disinterested
outside directors, and (iii) the transaction be fair and reasonable to us at the time it is authorized or approved by our directors.
Our
policies and procedures regarding transactions involving potential conflicts of interest are not in writing. We understand that it will
be difficult to enforce our policies and procedures and will rely and trust our officers and directors to follow our policies and procedures.
We will implement our policies and procedures by requiring the officer or director who is not in compliance with our policies and procedures
to remove himself and the other officers and directors will decide how to implement the policies and procedures, accordingly.
Corporate
Governance
The
Company promotes accountability for adherence to honest and ethical conduct; endeavors to provide full, fair, accurate, timely and understandable
disclosure in reports and documents that the Company files with the Securities and Exchange Commission (the “SEC”) and in
other public communications made by the Company; and strives to be compliant with applicable governmental laws, rules and regulations.
Director
Independence
Our
board of directors consists of five members, with three independent directors in
accordance with NASDAQ listing rule 5605(a)(2) before we uplist via an amendment to this registration statement of which this prospectus
is a part. Because our common stock is not currently listed on a national securities exchange, we have used the definition of “independence”
of The NASDAQ Stock Market to make this determination. NASDAQ Listing Rule 5605(a)(2) provides that an “independent director”
is a person other than an officer or employee of the company or any other individual having a relationship which, in the opinion of the
company’s board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of
a director. The NASDAQ listing rules provide that a director cannot be considered independent if:
| ● | the
director is, or at any time during the past three years was, an employee of the company; |
| ● | the
director or a family member of the director accepted any compensation from the company in
excess of $120,000 during any period of 12 consecutive months within the three years preceding
the independence determination (subject to certain exclusions, including, among other things,
compensation for board or board committee service); |
| ● | a
family member of the director is, or at any time during the past three years was, an executive
officer of the company; |
| ● | the
director or a family member of the director is a partner in, controlling stockholder of,
or an executive officer of an entity to which the company made, or from which the company
received, payments in the current or any of the past three fiscal years that exceed 5% of
the recipient’s consolidated gross revenue for that year or $200,000, whichever is
greater (subject to certain exclusions); |
| ● | the
director or a family member of the director is employed as an executive officer of an entity
where, at any time during the past three years, any of the executive officers of the company
served on the compensation committee of such other entity; or |
| ● | the
director or a family member of the director is a current partner of the company’s outside
auditor, or at any time during the past three years was a partner or employee of the company’s
outside auditor, and who worked on the company’s audit. |
Board
Composition
Our
business and affairs are managed under the direction of our board of directors, which consists of five members. Directors serve
for a term of one year and until their successors have been duly elected and qualified.
Committees
of the Board
Our
Company currently does not have nominating, compensation, or audit committees or committees performing similar functions nor does our
Company have a written nominating, compensation or audit committee charter. The Company plans to update its board committees to meet
NASDAQ requirements via an amendment to this registration statement of which this prospectus is a part.
In
lieu of an audit committee, the Company’s board of directors is responsible for reviewing and making recommendations concerning
the selection of outside auditors, reviewing the scope, results and effectiveness of the annual audit of the Company’s consolidated
financial statements and other services provided by the Company’s independent public accountants. The board of directors, the Chief
Executive Officer and the Chief Financial Officer of the Company review the Company’s internal accounting controls, practices and
policies.
The
Company maintains a Scientific Advisory Board (“SAB”) to assist our Board of Directors by reviewing and evaluating our clinical
development programs. We intend for our SAB members to receive per meeting fees and also be eligible to receive stock option compensation.
However, a formal SAB compensation plan has not yet been approved by our Board of Directors.
Audit
Committee Financial Expert
Mr.
Dorst qualifies as an “audit committee financial
expert” as defined in Item 407(D)(5) of Regulation S-K, and our three new directors qualify as “independent”
as the term is used in Item 7(d)(3)(iv)(B) of Schedule 14A under the Securities Exchange Act of 1934, as amended, and as defined by Rule
4200(a)(14) of the FINRA Rules.
We
believe that our directors are capable of analyzing and evaluating our consolidated financial statements and understanding internal controls
and procedures for financial reporting. The directors of our Company do not believe that it is necessary to have an audit committee because
management believes that the board of directors can adequately perform the functions of an audit committee. In addition, we believe that
retaining an independent director who would qualify as an “audit committee financial expert” would be overly costly and burdensome
and is not warranted in our circumstances given the stage of our development and the fact that we have not generated any positive cash
flows from operations to date.
Involvement
in Certain Legal Proceedings
Our
directors and our executive officers have not been involved in or a party in any of the following events or actions during the past ten
years:
| 1. | any
bankruptcy petition filed by or against any business of which such person was a general partner
or executive officer either at the time of the bankruptcy or within two years prior to that
time; |
| 2. | any
conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding
traffic violations and other minor offenses); |
| 3. | being
subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated,
of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending
or otherwise limiting his involvement in any type of business, securities or banking activities;
or |
| 4. | being
found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity
Futures Trading Commission to have violated a federal or state securities or commodities
law, and the judgment has not been reversed, suspended, or vacated. |
| 5. | Such
person was found by a court of competent jurisdiction in a civil action or by the Commission
to have violated any Federal or State securities law, and the judgment in such civil action
or finding by the Commission has not been subsequently reversed, suspended, or vacated; |
| 6. | Such
person was found by a court of competent jurisdiction in a civil action or by the Commodity
Futures Trading Commission to have violated any Federal commodities law, and the judgment
in such civil action or finding by the Commodity Futures Trading Commission has not been
subsequently reversed, suspended or vacated; |
| 7. | Such
person was the subject of, or a party to, any Federal or State judicial or administrative
order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating
to an alleged violation of: (I) Any Federal or State securities or commodities law or regulation;
or (ii) Any law or regulation respecting financial institutions or insurance companies including,
but not limited to, a temporary or permanent injunction, order of disgorgement or restitution,
civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition
order; or (iii) Any law or regulation prohibiting mail or wire fraud or fraud in connection
with any business entity; or |
| 8. | Such
person was the subject of, or a party to, any sanction or order, not subsequently reversed,
suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26)
of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section
1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange,
association, entity or organization that has disciplinary authority over its members or persons
associated with a member. |
Code
of Ethics
The
Company has not formally adopted a written Code of Ethics that governs the Company’s employees, officers and directors as the Company
is not required to do so. The board of directors evaluated the business of the Company and the number of employees and determined that
since the business is operated by a small number of persons, general rules of fiduciary duty and federal and state criminal, business
conduct and securities laws are adequate ethical guidelines. In the event our operations, employees and/or directors expand in the future,
we may take actions to adopt a formal Code of Ethics.
Role
of Board of Directors in Risk Oversight
Our
board of directors oversees an enterprise-wide approach to risk management, designed to support the achievement of business objectives,
including organizational and strategic objectives, to improve long-term organizational performance and enhance stockholder value. The
involvement of our board of directors in setting our business strategy is a key part of its assessment of management’s plans for
risk management and its determination of what constitutes an appropriate level of risk for our company. The participation of our board
of directors in our risk oversight process includes receiving regular reports from members of senior management on areas of material
risk to our company, including operational, financial, legal and regulatory, and strategic and reputational risks.
While
our board of directors has the ultimate responsibility for the risk management process, senior management and various committees of our
board of directors, when formed, will also have responsibility for certain areas of risk management. Our senior management team is responsible
for day-to-day risk management and regularly reports on risks to our full board of directors or a relevant committee. Our finance and
regulatory personnel serve as the primary monitoring and evaluation function for company-wide policies and procedures, and manage the
day-to-day oversight of the risk management strategy for our ongoing business. This oversight includes identifying, evaluating, and addressing
potential risks that may exist at the enterprise, strategic, financial, operational, compliance and reporting levels.
Director
Compensation
Our
Non-Employee directors receive a $30,000 annual retainer, paid in equal quarterly amounts for which periods the directors have provided
service. In addition, each director receives a grant of restricted stock units with a grant date fair value of $50,000 or, at the discretion
of the Board, options to acquire shares of common stock. Employee directors,
have not been separately compensated for their services to the Company as a director.
Limitation
on Liability and Indemnification Matters
Our
Certificate of Incorporation and Bylaws provide that we will indemnify our directors and officers, and may indemnify our employees and
other agents, to the fullest extent permitted by the Delaware General Corporation Law, which prohibits our Certificate of Incorporation
from limiting the liability of our directors for the following:
| ● | any
breach of the director’s duty of loyalty to the corporation or its shareholders; |
| | | |
| ● | any
act or omission not in good faith or that involves intentional misconduct or a knowing violation
of law; |
| | | |
| ● | unlawful
payments of dividends or unlawful stock repurchases or redemptions; or |
| | | |
| ● | any
transaction from which the director derived an improper personal benefit. |
If
Delaware law is amended to authorize corporate action further eliminating or limiting the personal liability of a director, then the
liability of our directors will be eliminated or limited to the fullest extent permitted by Delaware law, as so amended. Our Certificate
of Incorporation does not eliminate a director’s duty of care and in appropriate circumstances, equitable remedies, such as injunctive
or other forms of non-monetary relief, remain available under Delaware law. This provision also does not affect a director’s responsibilities
under any other laws, such as the federal securities laws or other state or federal laws. Under our bylaws, we will also be empowered
to purchase insurance on behalf of any person whom we are required or permitted to indemnify.
The
limitation of liability and indemnification provisions in our Certificate of Incorporation and bylaws may discourage shareholders from
bringing a lawsuit against directors for breach of their fiduciary duties. They may also reduce the likelihood of derivative litigation
against directors and officers, even though an action, if successful, might benefit us and our shareholders. A shareholder’s investment
may be harmed to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification
provisions. Insofar as we may provide indemnification for liabilities arising under the Securities Act to our directors, officers, and
controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that, in the opinion of the SEC, such indemnification
is against public policy as expressed in the Securities Act, and is, therefore, unenforceable. There is no pending litigation or proceeding
naming any of our directors or officers as to which indemnification is being sought, nor are we aware of any pending or threatened litigation
that may result in claims for indemnification by any director or officer.
EXECUTIVE
COMPENSATION
The
following is a discussion and analysis of compensation arrangements of our named executive officers, or NEOs. This discussion contains
forward looking statements that are based on our current plans, considerations, expectations and determinations regarding future compensation
programs. Actual compensation programs that we adopt may differ materially from currently planned programs as summarized in this discussion.
As an “emerging growth company” as defined in the JOBS Act, we are not required to include a Compensation Discussion and
Analysis section and have elected to comply with the scaled disclosure requirements applicable to emerging growth companies.
Summary
Compensation Table
The
particulars of the compensation paid to the following persons: (1) our principal executive officer; and (2) each of our two most compensated
executive officers who were serving as executive officers at the end of the fiscal year ended December 31, 2021, who we will collectively
refer to as the “named executive officers” of the Company, are set out in the following summary compensation table:
| SUMMARY COMPENSATION TABLE |
Name
and Principal Position | |
Year | | |
Salary ($) | | |
Bonus ($) | | |
Stock Awards ($) | | |
Option Awards ($) | | |
Non-Equity Incentive Plan Compensation ($) | | |
Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) | | |
All Other Compensation ($) (1) | | |
Total ($) | |
| Jim Joyce | |
| 2021 | | |
| 473,375 | | |
| 22,750 | | |
| - | | |
| - | | |
| - | | |
| - | | |
$ | 31,126 | | |
$ | 527,251 | |
| Chief Executive Officer | |
| 2020 | | |
| 418,842 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
$ | 22,516 | | |
$ | 440,866 | |
| | |
| 2019 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
$ | - | | |
$ | - | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Craig Roberts | |
| 2021 | | |
| 247,000 | | |
| 12,000 | | |
| - | | |
| - | | |
| - | | |
| - | | |
$ | 21,704 | | |
$ | 280,704 | |
| Chief Technology Officer | |
| 2020 | | |
| 233,981 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
$ | 22,024 | | |
$ | 256,497 | |
| | |
| 2019 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
$ | - | | |
$ | - | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Jeremy Ferrell | |
| 2021 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
$ | - | | |
$ | - | |
| Chief Financial Officer (2) | |
| 2020 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
$ | - | | |
$ | - | |
| | |
| 2019 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
$ | - | | |
$ | - | |
| (1) | Amounts
include health insurance and employer matched 401(k) costs. |
| (2) | Mr.
Ferrell was hired as the Company’s Chief Financial Officer effective March 9, 2022. |
Other
than as disclosed below, there are no compensatory plans or arrangements with respect to our executive officers resulting from their
resignation, retirement or other termination of employment or from a change of control.
Grants
of Plan-Based Awards Table
None
of our named executive officers received any grants of stock, option awards or other plan-based awards during the years ended December
31, 2021 and 2020.
Options
Exercised and Stock Vested Table
None
of our named executive officers exercised any stock options or restricted stock units during the years ended December 31, 2021 and 2020.
Outstanding
Equity Awards at 2021 Year End
The
Company has not issued any awards to its named executive
officers. The Company and its board of directors may grant awards as it sees fit to its employees as well as key consultants. If it
does adopt a plan, the terms of the Plan and proposed grants shall be disclosed as required.
Agreements
with Executive Officers
Jim
Joyce
At
present, Mr. Joyce receives an annual base salary of $455,000, plus bonus compensation not to exceed 50% of salary. Mr. Joyce’s
employment also provides for medical insurance, disability benefits and one year of severance pay if his employment is terminated without
cause or due to a change in control. Additionally, the Company has agreed to maintain a beneficial ownership target for Mr. Joyce to
be 9% of the Company’s outstanding shares while Mr. Joyce is employed by the Company. This compensation agreement was approved
by the Reign Resources Corporation Board of Directors on October 6, 2020 and was among conditions of the Share Exchange Agreement that
was completed with Sigyn Therapeutics, Inc. on October 19, 2020. There is no written employment agreement for Mr. Joyce at this time.
Jeremy
Ferrell
Mr.
Ferrell was hired on March 9, 2022 as the Company’s Chief Financial Officer. Mr. Ferrell receives an annual base salary of $250,000,
plus discretionary bonus compensation not to exceed 40% of salary. Mr. Ferrell’s employment also provides for medical insurance,
disability benefits and three months of severance pay if his employment is terminated without cause or due to a change in control. Additionally,
Mr. Ferrell will be granted up to 600,000 options to purchase 600,000 of the Company’s common shares upon the implementation of
a Company employee option plan that we anticipate will be adopted in connection with this offering.
Craig
Roberts
Mr.
Roberts, the Company’s Chief Technology Officer (CTO) receives an annual base salary of $240,000 as well as medical insurance and
related benefits.
Mr.
Roberts is eligible to receive bonus compensation at the discretion of the Sigyn Therapeutics, Inc. Board of Directors.
Equity
Compensation Plans and Other Benefit Plans
The
Company does not currently have any equity compensation plans and there are no arrangements or plans in which we provide pension, retirement
or similar benefits for directors or executive officers. We have no material bonus or profit-sharing plans.
Indebtedness
of Directors, Senior Officers, Executive Officers and Other Management
None
of our directors or executive officers or any associate or affiliate of the Company during the last two fiscal years, is or has been
indebted to the Company by way of guarantee, support agreement, letter of credit or other similar agreement or understanding currently
outstanding.
Outstanding
Equity Awards at Fiscal Year-End Table
The
following table sets forth certain information concerning outstanding stock awards held by the Named Executive Officers for our year
ended December 31, 2021:
| | |
Option Awards | | |
Stock Awards | |
| Name | |
Number of Securities Underlying Unexercised Options (#) Exercisable | | |
Number of Securities Underlying Unexercised Options (#) Unexercisable | | |
Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | | |
Option Exercise Price ($) | | |
Option Expiration Date | | |
Number of Shares or Units of Stock That Have Not Vested (#) | | |
Market Value of Shares or Units of Stock That Have Not Vested ($) | | |
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | | |
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| None. | |
| -0- | | |
| -0- | | |
| -0- | | |
| -0- | | |
| -0- | | |
| -0- | | |
| -0- | | |
| -0- | | |
| -0- | |
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth information relating to the beneficial ownership our common stock as of December 21, 2022 by
(i) each person known to be the beneficial owner of more than 5% of the outstanding shares of common stock and (ii) each of our directors
and executive officers. Unless otherwise noted below, we believe that all persons named in the table have sole voting and investment
power with respect to all shares of common stock beneficially owned by them. For purposes hereof, a person is deemed to be the beneficial
owner of securities that can be acquired by such person within 60 days from the date hereof upon the exercise of warrants or options
or the conversion of convertible securities. Each beneficial owner’s percentage ownership is determined by assuming that any warrants,
options or convertible securities that are held by such person (but not those held by any other person) and which are exercisable within
60 days from the date hereof, have been exercised.
| Name and Address (2) | |
Amount of Beneficial Ownership | | |
Percent of Class (1) | |
| | |
| | |
| |
| Jim Joyce (3) | |
| 12,820,000 | | |
| 34.4 | % |
| Craig Roberts (4) | |
| 12,820,000 | | |
| 34.4 | % |
| Jeremy Ferrell (5) | |
| - | | |
| - | % |
| | |
| | | |
| | |
| All Officers and Directors as a Group (3 Persons) | |
| 25,640,000 | | |
| 68.8 | % |
| | |
| | | |
| | |
| Brio Capital Master Fund Ltd. (6) | |
| 3,725,850 | | |
| 9.9 | % |
| | |
| | | |
| | |
| Osher Capital Partners LLC (7) | |
| 3,050,658 | | |
| 8.2 | % |
| (1) | Based
on 37,295,813 shares of common stock issued and outstanding. |
| (2) | Unless
otherwise noted, the address of each beneficial owner is c/o Sigyn Therapeutics, Inc., 2468
Historic Decatur Road, Suite 140, San Diego, CA 92106. |
| (3) | Mr.
Joyce is the Company’s CEO. |
| (4) | Mr.
Roberts is the Company’s CTO. |
| (5) | Mr.
Ferrell is the Company’s CFO. |
| (6) | Consists
of 3,725,850 common shares as of the date of this filing. Brio Capital Master Fund Ltd (“Brio”)
is contractually limited to beneficial ownership of our common stock not to exceed 9.99%.
The stockholder of record by the stockholder is held by Shaye Hirsch who is a director of Brio.
The business address of Brio is 100 Merrick Road, Suite 401W, Rockville Center, NY 11570. |
| (7) | Consists
of 3,050,658 common shares as of the date of this filing. Osher Capital Partners LLC (“Osher”)
is contractually limited to beneficial ownership of our common stock not to exceed 9.99%.
The Stockholder has advised us that voting and dispositive power of all the common shares
of the Company owned of record by the stockholder is held by Ari Kluger, who is President
of Osher. The business address of Osher is 23 Tammy Lane, Spring Valley NY 10977. |
We
are not aware of any person who owns of record, or is known to own beneficially, five percent or more of our outstanding securities of
any class, other than as set forth above. We do not have an investment advisor. There are no current arrangements which will result in
a change in control.
Equity
Compensation Plans
The
following represents a summary of the Equity Compensation grants and options awards outstanding at December 31, 2021 and 2020 and changes
during the years then ended:
| 2021 and 2020 |
| Plan category | |
Number of securities to be issued upon exercise of outstanding options, warrants and rights | | |
Weighted-average exercise price of outstanding options, warrants and rights | | |
Number of securities remaining available for future issuance under equity compensation plan (excluding securities reflected in column
a)) | |
| | |
(a) | | |
(b) | | |
(c) | |
| Equity compensation plans approved by security holders | |
| -0- | | |
$ | -0- | | |
| -0- | |
| Equity compensation plans not approved by security holders | |
| -0- | | |
$ | -0- | | |
| -0- | |
| Total | |
| -0- | | |
$ | -0- | | |
| -0- | |
UNDERWRITING
Univest
Securities, LLC is acting as representative of the underwriters. Subject to the terms and conditions of an underwriting agreement between
us and the representative, we have agreed to sell to each underwriter named below, and each underwriter named below has severally agreed
to purchase, at the public offering price less the underwriting discounts set forth on the cover page of this prospectus, the number
of Class A Units listed next to its name in the following table:
| | |
Number of | | |
Number of | |
| Underwriter | |
Class A Units | | |
Class B Units | |
| Univest Securities, LLC | |
| | | |
| | |
| Total | |
| 0 | | |
| 0 | |
The
underwriting agreement provides that the obligations of the underwriters to pay for and accept delivery of the securities offered by
this prospectus are subject to various conditions and representations and warranties, including the approval of certain legal matters
by their counsel and other conditions specified in the underwriting agreement. The securities are offered by the underwriters, subject
to prior sale, when, as and if issued to and accepted by them. The underwriters reserve the right to withdraw, cancel or modify the offer
to the public and to reject orders in whole or in part. The underwriters are obligated to take and pay for all of the Class A Units and
Class B Units offered by this prospectus if any such Class A Units and/or Class B Units are taken, other than those shares of common
stock and/or Series A Warrants covered by the over-allotment option described below.
We
have agreed to indemnify the underwriters against specified liabilities, including liabilities under the Securities Act, and to contribute
to payments the underwriters may be required to make in respect thereof.
Over-Allotment
Option
We
have granted to the representative an option, exercisable one or more times in whole or in part, not later than 45 days after the date
of this prospectus, to purchase from us up to an (i) additional shares of our common stock at a price of $ per share and/or (ii) additional
Series A Warrants to purchase shares of common stock at a price of $0.01 per warrant (15% of the shares of common stock and warrants
included in the Class A Units and
Class
B Units sold in this offering), in each case, less the underwriting discounts and commissions set forth on the cover of this prospectus
in any combination thereof to cover over-allotments, if any. To the extent that the representative exercises this option, each of the
underwriters will become obligated, subject to conditions, to purchase approximately the same percentage of these additional shares of
common stock and/or Series A Warrants as the number of Class A Units and Class B Units to be purchased by it in the above table bears
to the total number of Class A Units and Class B Units offered by this prospectus. We will be obligated, pursuant to the option, to sell
these additional shares of common stock and/or Series A Warrants to the underwriters to the extent the option is exercised. If any additional
shares of common stock and/or Series A Warrants are purchased, the underwriters will offer the additional shares of common stock and/or
Series A Warrants on the same terms as those on which the other Class A Units and Class B Units are being offered hereunder. If this
option is exercised in full, the total offering price to the public will be $ and the total net proceeds, before expenses and after the
credit to the underwriting commissions described below, to us will be $ .
Discounts
and Commissions
The
underwriters propose initially to offer the Class A Units and Class B Units to the public at the public offering price set forth on the
cover page of this
prospectus
and to dealers at those prices less a concession not in excess of $ per Class A Unit and $____ per Class B Units. If all of the Class
A Units
offered
by us are not sold at the public offering price, the underwriters may change the offering price and other selling terms by means of a
supplement to this prospectus.
The
following table shows the public offering price, underwriting discounts and commissions and proceeds before expenses to us. The information
assumes either no exercise or full exercise of the over-allotment option we granted to the representative of the underwriters.
| | |
| | |
| | |
Total Without | | |
Total With | |
| | |
Per Class A | | |
Per Class B | | |
Over-allotment | | |
Over-allotment | |
| | |
Unit | | |
Unit | | |
Option | | |
Option | |
| Public offering price | |
$ | | | |
$ | | | |
$ | | | |
$ | | |
| Underwriting discount (7.0%) | |
$ | | | |
$ | | | |
$ | | | |
$ | | |
| Proceeds, before expenses, to us | |
$ | | | |
$ | | | |
$ | | | |
$ | | |
| Non-accountable expense allowance (1.0%) | |
$ | | | |
$ | | | |
$ | | | |
$ | | |
(1)
The non-accountable expense allowance will not be payable with respect to representative’s exercise of the over-allotment
option.
We
have agreed to pay a non-accountable expense allowance to the representative of the underwriters equal to 1.0% of the gross proceeds
received at the closing of the offering. The non-accountable expense allowance of 1.0% is not payable with respect to any Class A Units
and Class B Units sold upon exercise of the underwriters’ over-allotment option. In addition, we have agreed to reimburse the representative
up to a maximum of $150,000 for out-of-pocket accountable expenses, including, but not limited to, travel, due diligence expenses, reasonable
fees and expenses of its legal counsel, accountable roadshow expenses, and background checks on our principal shareholders, directors
and officers.
Our
total estimated expenses of the offering, including registration, filing and listing fees, printing fees and legal and accounting expenses,
but excluding underwriting discounts and commissions, are approximately $ .
Representative’s
Warrants
Upon
completion of this offering, we have agreed to issue to the representative as compensation warrants to purchase up to
shares of common stock (5.0% of the aggregate
number of shares of common stock sold in this offering inclusive of the over-allotment option (the “representative’s
warrants”). The representative’s warrants will be exercisable at a per share exercise price equal to 110% of the public
offering price per Class A Unit and Class B Unit in this offering. The representative’s warrants are exercisable at any time
and from time to time, in whole or in part, during the four and one half year period commencing 180 days following the commencement
of sales of the securities issued in this offering.
The
representative’s warrants have been deemed compensation by FINRA and are therefore subject to a 180-day lock-up pursuant to Rule
5110(e)(1)(A) of FINRA. The representative (or permitted assignees under Rule 5110(e)(2)) will not sell, transfer, assign, pledge, or
hypothecate these warrants or the securities underlying these warrants, nor will they engage in any hedging, short sale, derivative,
put, or call transaction that would result in the effective economic disposition of the warrants or the underlying securities for a period
of 180 days following the commencement of sales of the securities issued in this offering. In addition, the representative’s warrants
provide for registration rights upon request, in certain cases. The sole demand registration right provided will not be greater than
five years from the commencement of sales of the securities issued in this offering in compliance with FINRA Rule 5110(g)(8)(C). The
piggyback registration rights provided will not be greater than seven years from the commencement of sales of the securities issued in
this offering in compliance with FINRA Rule 5110(g)(8)(D). We will bear all fees and expenses attendant to registering the securities
issuable on exercise of the warrants other than underwriting commissions incurred and payable by the holders. The exercise price and
number of shares issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend
or our recapitalization, reorganization, merger or consolidation. However, the warrant exercise price or underlying shares will not be
adjusted for issuances of shares of common stock at a price below the warrant exercise price.
Right
of First Refusal
We
have agreed to grant the representative, for the 9-month period following the closing of this offering, a right of first refusal to provide
investment banking services to us on an exclusive basis in all matters for which investment banking services are sought by us (the “Right
of First Refusal”), which right is exercisable in the representative’s sole discretion. In accordance FINRA Rule 5110(g)(6)(A),
such Right of First Refusal does not have a duration of more than three years from the commencement of sales of the public offering or
the termination date of the engagement between the us and the underwriters.
Lock-Up
Agreements
Pursuant
to “lock-up” agreements, we, our executive officers and directors, and certain stockholders, have agreed, without the prior
written consent of the representative not to directly or indirectly, offer to sell, sell, pledge or otherwise transfer or dispose of
any of shares of (or enter into any transaction or device that is designed to, or could be expected to, result in the transfer or disposition
by any person at any time in the future of) our common stock, enter into any swap or other derivatives transaction that transfers to
another, in whole or in part, any of the economic benefits or risks of ownership of shares of our common stock, make any demand for or
exercise any right or cause to be filed a registration statement, including any amendments thereto, with respect to the registration
of any shares of common stock or securities convertible into or exercisable or exchangeable for common stock or any other securities
of ours or publicly disclose the intention to do any of the foregoing, subject to customary exceptions, for a period of six months after
the date of this prospectus in the case of our directors, executive officers, the Company and any successor of the Company and certain
stockholders.
Discretionary
Accounts
The
underwriters do not intend to confirm sales of the shares of common stock offered hereby to any accounts over which they have discretionary
authority.
Nasdaq
Capital Market Listing
We
intend to apply to have our common stock listed on the Nasdaq Capital Market under the symbol “SIGY”. No assurance can be
given that our application will be approved by Nasdaq, and if not, we will not consummate this offering.
Determination
of Offering Price
The
public offering price of the Class A Units and Class B Units that we are offering was negotiated between us and the underwriters. Factors
considered in determining the public offering price of the Class A Units and Class B Units include the history and prospects of the Company,
the stage of development of our business, our business plans for the future and the extent to which they have been implemented, an assessment
of our management, general conditions of the securities markets at the time of the offering and such other factors as were deemed relevant.
Price
Stabilization, Short Positions and Penalty Bids
In
connection with this offering, the underwriters may engage in transactions that stabilize, maintain or otherwise affect the price of
our common stock and Series A Warrants. Specifically, the underwriters may over-allot in connection with this offering by selling more
shares of common stock and/or Series A Warrants than are set forth on the cover page of this prospectus. This creates a short position
in our common stock or Series A Warrants for its own account. The short position may be either a covered short position or a naked short
position. In a covered short position, the number of shares of common stock and/or Series A Warrants over-allotted by the underwriters
is not greater than the number of shares of common stock and/or Series A Warrants that they may purchase in the over-allotment option.
In a naked short position, the number of shares of common stock and/or Series A Warrants involved is greater than the number of shares
common stock in the over-allotment option. To close out a short position, the underwriters may elect to exercise all or part of the over-allotment
option. The underwriters may also elect to stabilize the price of our common stock and/or Series A Warrants or reduce any short position
by bidding for, and purchasing, common stock and/or Series A Warrants in the open market.
The
underwriters may also impose a penalty bid. This occurs when a particular underwriter or dealer repays selling concessions allowed to
it for distributing securities in this offering because the underwriter repurchases the securities in stabilizing or short covering transactions.
Finally,
the underwriters may bid for, and purchase, securities in market making transactions, including “passive” market making transactions
as described below.
These
activities may stabilize or maintain the market price of our common stock and/or Series A Warrants at a price that is higher than the
price that might otherwise exist in the absence of these activities. The underwriters are not required to engage in these activities,
and may discontinue any of these activities at any time without notice. These transactions may be effected on the national securities
exchange on which our shares of common stock are traded, in the over-the-counter market, or otherwise.
Indemnification
We
have agreed to indemnify the underwriters against liabilities relating to this offering arising under the Securities Act and the Exchange
Act, liabilities arising from breaches of some or all of the representations and warranties contained in the underwriting agreement,
and to contribute to payments that the underwriters may be required to make for these liabilities.
Affiliations
The
underwriters and their respective affiliates are full service financial institutions engaged in various activities, which may include
securities trading, commercial and investment banking, financial advisory, investment management, investment research, principal investment,
hedging, financing and brokerage activities. The underwriters and their affiliates may from time to time in the future engage with us
and perform services for us or in the ordinary course of their business for which they will receive customary fees and expenses. In the
ordinary course of their various business activities, the underwriters and their respective affiliates may make or hold a broad array
of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including
bank loans) for their own account and for the accounts of their customers, and such investment and securities activities may involve
securities and/or instruments of us. The underwriters and their respective affiliates may also make investment recommendations and/or
publish or express independent research views in respect of these securities or instruments and may at any time hold, or recommend to
clients that they acquire, long and/or short positions in these securities and instruments.
Conflicts
of Interest
We
are not under any contractual obligation to engage any of the underwriters to provide any services for us after this offering and have
no present intent to do so. However, any of the underwriters may introduce us to potential target businesses or assist us in raising
additional capital in the future. If any of the underwriters provide services to us after this offering, we may pay such underwriter
fair and reasonable fees that would be determined at that time in an arm’s length negotiation; provided that no agreement will
be entered into with any of the underwriters and no fees for such services will be paid to any of the underwriters prior to the date
that is 90 days from the date of this prospectus, unless FINRA determines that such payment would not be deemed underwriter’s compensation
in connection with this offering and we may pay the underwriters of this offering or any entity with which they are affiliated a finder’s
fee or other compensation for services rendered to us in connection with the completion of a business combination.
Electronic
Distribution
This
prospectus in electronic format may be made available on websites or through other online services maintained by one or more of the underwriters,
or by their affiliates. Other than this prospectus in electronic format, the information on any underwriter’s website and any information
contained in any other website maintained by an underwriter is not part of this prospectus or the registration statement of which this
prospectus forms a part, has not been approved and/or endorsed by us or any underwriter in its capacity as underwriter, and should not
be relied upon by investors.
Selling
Restrictions
No
action has been taken in any jurisdiction (except in the United States) that would permit a public offering of our securities, or the
possession, circulation or distribution of this prospectus or any other material relating to us or our securities in any jurisdiction
where action for that purpose is required. Accordingly, our securities may not be offered or sold, directly or indirectly, and this prospectus
or any other offering material or advertisements in connection with our securities may be distributed or published, in or from any country
or jurisdiction, except in compliance with any applicable rules and regulations of any such country or jurisdiction.
European
Economic Area and United Kingdom
In
relation to each Member State of the European Economic Area and the United Kingdom (each a “Relevant State”), no securities
have been offered or will be offered pursuant to the offering to the public in that Relevant State prior to the publication of a prospectus
in relation to the securities which have been approved by the competent authority in that Relevant State or, where appropriate, approved
in another Relevant State and notified to the competent authority in that Relevant State, all in accordance with the Prospectus Regulation,
except that offers of shares may be made to the public in that Relevant State at any time under the following exemptions under the Prospectus
Regulation:
| ● | to
legal entities which are qualified investors as defined under the Prospectus Regulation; |
| | | |
| ● | by
the underwriters to fewer than 150 natural or legal persons (other than qualified investors
as defined in the Prospectus Regulation), subject to obtaining the prior consent of the representatives
of the underwriters for any such offer; or |
| | | |
| ● | in
any other circumstances falling within Article 1(4) of the Prospectus Regulation, |
provided
that no such offer of securities shall result in a requirement for us or any underwriter to publish a prospectus pursuant to Article
3 of the Prospectus Regulation or supplement a prospectus pursuant to Article 23 of the Prospectus Regulation.
For
the purposes of this provision, the expression an “offer of securities to the public” in relation to any securities in any
Relevant State means the communication in any form and by any means of sufficient information on the terms of the offer and any securities
to be offered so as to enable an investor to decide to purchase or subscribe for our securities, and the expression “Prospectus
Regulation” means Regulation (EU) 2017/1129.
United
Kingdom
This
prospectus has only been communicated or caused to have been communicated and will only be communicated or caused to be communicated
as an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets
Act of 2000, or the FSMA) as received in connection with the issue or sale of our securities in circumstances in which Section 21(1)
of the FSMA does not apply to us. All applicable provisions of the FSMA will be complied with in respect to anything done in relation
to our securities in, from or otherwise involving the United Kingdom.
Canada
The
securities may be sold only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors, as defined
in National Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients,
as defined in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations. Any resale of the
securities must be made in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements of applicable
securities laws.
Securities
legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if this prospectus
(including any amendment thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by
the purchaser within the time limit prescribed by the securities legislation of the purchaser’s province or territory. The purchaser
should refer to any applicable provisions of the securities legislation of the purchaser’s province or territory for particulars
of these rights or consult with a legal advisor.
Pursuant
to section 3A.3 of National Instrument 33-105 Underwriting Conflicts, or NI 33-105, the underwriters are not required to comply with
the disclosure requirements of NI 33-105 regarding underwriter conflicts of interest in connection with this offering.
Hong
Kong
The
securities may not be offered or sold by means of this document or any other document other than (i) in circumstances that do not constitute
an offer or invitation to the public within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong) or the Securities and
Futures Ordinance (Cap.571, Laws of Hong Kong), or (ii) to “professional investors” within the meaning of the Securities
and Futures Ordinance (Cap.571, Laws of Hong Kong) and any rules made thereunder, or (iii) in other circumstances that do not result
in the document being a “prospectus” within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), and no advertisement,
invitation or document relating to the shares may be issued or may be in the possession of any person for the purpose of issue (in each
case whether in Hong Kong or elsewhere), that is directed at, or the contents of which are likely to be accessed or read by, the public
in Hong Kong (except if permitted to do so under the laws of Hong Kong) other than with respect to the shares which are or are intended
to be disposed of only to persons outside Hong Kong or only to “professional investors” within the meaning of the Securities
and Futures Ordinance (Cap.571, Laws of Hong Kong) and any rules made thereunder.
People’s
Republic of China
This
prospectus has not been and will not be circulated or distributed in the PRC, and the securities may not be offered or sold, and will
not be offered or sold to any person for re-offering or resale, directly or indirectly, to any resident of the PRC except pursuant to
applicable laws and regulations of the PRC.
Singapore
This
prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus and any other
document or material in connection with the offer or sale, or invitation for subscription or purchase, of the securities may not be circulated
or distributed, nor may the securities be offered or sold, or be made the subject of an invitation for subscription or purchase, whether
directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities and Futures
Act, Chapter 289 of Singapore, or the SFA, (ii) to a relevant person, or any person pursuant to Section 275(1A), and in accordance with
the conditions, specified in Section 275 of the SFA, or (iii) otherwise pursuant to, and in accordance with the conditions of, any other
applicable provision of the SFA.
South
Korea
The
securities may not be offered, sold and delivered directly or indirectly, or offered or sold to any person for re-offering or resale,
directly or indirectly, in South Korea or to any resident of South Korea except pursuant to the applicable laws and regulations of South
Korea, including the Financial Investment Services and Capital Markets Act and the Foreign Exchange Transaction Law and the decrees and
regulations thereunder. The securities have not been registered with the Financial Services Commission of South Korea for public offering
in South Korea. Furthermore, the securities may not be re-sold to South Korean residents unless the purchaser of the securities complies
with all applicable regulatory requirements (including but not limited to government approval requirements under the Foreign Exchange
Transaction Law and its subordinate decrees and regulations) in connection with their purchase.
Taiwan
The
securities have not been and will not be registered or filed with, or approved by, the Financial Supervisory Commission of Taiwan pursuant
to relevant securities laws and regulations and may not be offered or sold in Taiwan through a public offering or in circumstances which
constitute an offer within the meaning of the Securities and Exchange Act of Taiwan or relevant laws and regulations that require a registration,
filing or approval of the Financial Supervisory Commission of Taiwan. No person or entity in Taiwan has been authorized to offer or sell
the securities in Taiwan.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
Other
than compensation arrangements and convertible promissory debentures, we have not entered into any related party transaction with a member
of the immediate family or the foregoing persons of any director, executive officer, or holder of more than 5% of our capital stock during
the last two completed fiscal years. Compensation arrangements, including employment agreements, for our directors and named executive
officers are described elsewhere in “Executive Compensation—Agreements with Executive Officers.” Convertible promissory
debentures are described elsewhere in “Management Discussion and Analysis of Financial Condition and Results of Operations –
Financing Transactions”.
Security
Purchase Agreements
Osher
January
28, 2020 – $457,380
On
January 28, 2020, the Company entered into a Securities Purchase Agreement with respect to the sale and issuance to institutional investor
Osher Capital Partners LLC (“Osher”) of (i) $385,000 aggregate principal amount of Original Issue Discount Senior Convertible
Debenture due January 26, 2021, based on $1.00 for each $0.90909 paid by Osher and (ii) five-year Common Stock Purchase Warrants to purchase
up to an aggregate of 80,209 shares of the Company’s Common Stock at an exercise price of $7.00 per share. The aggregate cash subscription
amount received by the Company from Osher for the issuance of the note and warrants was $350,005 which was issued at a $34,995 original
issue discount from the face value of the Note. The conversion price for the principal in connection with voluntary conversions by a
holder of the convertible notes is $0.094 per share, as amended on October 20, 2020, subject to adjustment as provided therein, such
as stock splits and stock dividends.
The
Company and Osher amended the convertible debt agreement as follows on October 20, 2020:
| ● | The
parties amended the Warrants dated January 28, 2020, for the number of warrant shares from
80,209 warrant shares to 4,113,083 warrant shares at an exercise price of $0.14 per share. |
| ● | The
parties amended the Note to provide for interest at 8% per annum. |
| ● | The
parties amended the Note for the maturity date from June 23, 2021 to October 20, 2021. |
On
October 22, 2021, the Company and Osher amended convertible debt agreements as follows:
| ● | The
parties amended the October 20, 2020 Notes for the maturity date from October 20, 2021 to
October 20, 2022. |
| | | |
| ● | The
parties amended the October 20, 2020 Notes for the aggregate principal amount and accrued
interest from $652,300 to $717,530 which is issued at a $65,230 original issue discount from
the face value of the October 20, 2020 Notes now due October 20, 2022. |
| | | |
| ● | In
exchange for the extension of the Note, the Company issued Osher five-year warrants to purchase
an aggregate of 450,000 shares of the Company’s common stock at an exercise price of
$1.00 per share. |
The
Company has not repaid this convertible note and the convertible note is now in default. The Company is currently in discussions to restructure
the terms of the note.
June
23, 2020 – $60,500
On
June 23, 2020, the Company entered into a Securities Purchase Agreement with respect to the sale and issuance to institutional investor
Osher Capital Partners LLC (“Osher”) of (i) $50,000 aggregate principal amount of Original Issue Discount Senior Convertible
Debenture (the “Note”) due June 23, 2021, based on $1.00 for each $0.90909 paid by Osher and (ii) five-year Common Stock
Purchase Warrants (“Warrants”) to purchase up to an aggregate of 10,000 shares of the Company’s Common Stock at an
exercise price of $30.00 per share. The aggregate cash subscription amount received by the Company from Osher for the issuance of the
Note and Warrants was $50,005 which was issued at a $0 original issue discount from the face value of the Note. The conversion price
for the principal in connection with voluntary conversions by a holder of the convertible notes is $0.39 per share, as amended on October
20, 2020, subject to adjustment as provided therein, such as stock splits and stock dividends.
The
Company and Osher amended the convertible debt agreement as follows on October 20, 2020:
| ● | The
parties amended the Note for the aggregate principal amount from $50,000 to $55,000. The
aggregate cash subscription amount received by the Company from Osher for the issuance of
the Note and Warrants was $50,005 which was issued at an amended $4,995 original issue discount
from the face value of the Note. |
| ● | The
parties amended the Warrants dated June 23, 2020, for the number of warrant shares from 10,000
warrant shares to 141,020 warrant shares at an exercise price of $0.59 per share. |
| ● | The
parties amended the Note for the maturity date from June 23, 2021 to October 20, 2021. |
On
October 22, 2021, the Company and Osher amended convertible debt agreements as follows (see Note 12):
| ● | The
parties amended the October 20, 2020 Notes for the maturity date from October 20, 2021 to
October 20, 2022. |
| | | |
| ● | The
parties amended the October 20, 2020 Notes for the aggregate principal amount and accrued
interest from $652,300 to $717,530 which is issued at a $65,230 original issue discount from
the face value of the October 20, 2020 Notes now due October 20, 2022. |
| | | |
| ● | In
exchange for the extension of the Note, the Company issued Osher five-year warrants to purchase
an aggregate of 450,000 shares of the Company’s common stock at an exercise price of
$1.00 per share. |
The
Company has not repaid this convertible note and the convertible note is now in default. The Company is currently in discussions to restructure
the terms of the note.
September
17, 2020 – $182,936
On
September 17, 2020, the Company entered into a Securities Purchase Agreement with respect to the sale and issuance to institutional investor
Osher Capital Partners LLC (“Osher”) of (i) $181,500 aggregate principal amount of Original Issue Discount Senior Convertible
Debenture (the “Note”) due September 30, 2021, based on $1.00 for each $0.90909 paid by Osher and (ii) five-year Common Stock
Purchase Warrants (“Warrants’) to purchase up to an aggregate of 8,250 shares of the Company’s Common Stock at an exercise
price of $30.00 per share. The aggregate cash subscription amount received by the Company from Osher for the issuance of the Note and
Warrants was $165,000 which was issued at a $16,500 original issue discount from the face value of the Note. The conversion price for
the principal in connection with voluntary conversions by a holder of the convertible notes is $0.39 per share, as amended on October
20, 2020, subject to adjustment as provided therein, such as stock splits and stock dividends.
The
Company and Osher amended the convertible debt agreement as follow on October 20, 2020:
| ● | The
parties amended the Warrants dated September 17, 2020, for the number of warrant shares from
8,250 warrant shares to 465,366 warrant shares at an exercise price of $0.59 per share. |
| ● | The
parties amended the Note for the maturity date from September 30, 2021 to October 20, 2021. |
On
October 22, 2021, the Company and Osher amended convertible debt agreements as follows (see Note 12):
| ● | The
parties amended the October 20, 2020 Notes for the maturity date from October 20, 2021 to
October 20, 2022. |
| | | |
| ● | The
parties amended the October 20, 2020 Notes for the aggregate principal amount and accrued
interest from $652,300 to $717,530 which is issued at a $65,230 original issue discount from
the face value of the October 20, 2020 Notes now due October 20, 2022. |
| | | |
| ● | In
exchange for the extension of the Note, the Company issued Osher five-year warrants to purchase
an aggregate of 450,000 shares of the Company’s common stock at an exercise price of
$1.00 per share. |
On
October 28, 2021, Osher elected to convert $16,714 of the aggregate principal amount of the Note of $199,650, into 42,857 common shares.
The
Company has not repaid this convertible note and the convertible note is now in default. The Company is currently in discussions to restructure
the terms of the note.
March
23, 2022 – $110,000
On
March 23, 2022, the Company entered into an Original Issue Discount Senior Convertible Debenture (the “Note”) with respect
to the sale and issuance to institutional investor Osher Capital Partners LLC (“Osher”) of (i) $110,000 aggregate principal
amount of Note due March 23, 2023 based on $1.00 for each $0.90909 paid by the previous noteholder and (ii) five-year Common Stock Purchase
Warrants (“Warrants’) to purchase up to an aggregate of 220,000 shares of the Company’s Common Stock at an exercise
price of $0.50 per share. The aggregate cash subscription amount received by the Company from the previous noteholder for the issuance
of the Note and Warrants was $100,000 which was issued at a $10,000 original issue discount from the face value of the Note. The conversion
price for the principal in connection with voluntary conversions by a holder of the convertible notes is $0.50 per share, subject to
adjustment as provided therein, such as stock splits and stock dividends.
April
28, 2022 – $110,000
On
April 28, 2022, the Company entered into an Original Issue Discount Senior Convertible Debenture (the “Note”) with respect
to the sale and issuance to institutional investor Osher Capital Partners LLC (“Osher”) of (i) $110,000 aggregate principal
amount of Note due April 28, 2023 based on $1.00 for each $0.90909 paid by the previous noteholder and (ii) five-year Common Stock Purchase
Warrants (“Warrants’) to purchase up to an aggregate of 220,000 shares of the Company’s Common Stock at an exercise
price of $0.50 per share. The aggregate cash subscription amount received by the Company from the previous noteholder for the issuance
of the Note and Warrants was $100,000 which was issued at a $10,000 original issue discount from the face value of the Note. The conversion
price for the principal in connection with voluntary conversions by a holder of the convertible notes is $0.50 per share, subject to
adjustment as provided therein, such as stock splits and stock dividends.
June
1, 2022 – $55,000
On
June 1, 2022, the Company entered into an Original Issue Discount Senior Convertible Debenture (the “Note”) with respect
to the sale and issuance to institutional investor Osher Capital Partners LLC (“Osher”) of (i) $55,000 aggregate principal
amount of Note due June 1, 2023 based on $1.00 for each $0.90909 paid by the previous noteholder and (ii) five-year Common Stock Purchase
Warrants (“Warrants’) to purchase up to an aggregate of 110,000 shares of the Company’s Common Stock at an exercise
price of $0.50 per share. The aggregate cash subscription amount received by the Company from the previous noteholder for the issuance
of the Note and Warrants was $50,000 which was issued at a $5,000 original issue discount from the face value of the Note. The conversion
price for the principal in connection with voluntary conversions by a holder of the convertible notes is $0.50 per share, subject to
adjustment as provided therein, such as stock splits and stock dividends.
June
22, 2022 – $82,500
On
June 22, 2022, the Company entered into an Original Issue Discount Senior Convertible Debenture (the “Note”) with respect
to the sale and issuance to institutional investor Osher Capital Partners LLC (“Osher”) of (i) $82,500 aggregate principal
amount of Note due June 22, 2023 based on $1.00 for each $0.90909 paid by the previous noteholder and (ii) five-year Common Stock Purchase
Warrants (“Warrants’) to purchase up to an aggregate of 165,000 shares of the Company’s Common Stock at an exercise
price of $0.50 per share. The aggregate cash subscription amount received by the Company from the previous noteholder for the issuance
of the Note and Warrants was $75,000 which was issued at a $7,500 original issue discount from the face value of the Note. The conversion
price for the principal in connection with voluntary conversions by a holder of the convertible notes is $0.50 per share, subject to
adjustment as provided therein, such as stock splits and stock dividends.
August
31, 2022 – $110,000
On
August 31, 2022, the Company entered into an Original Issue Discount Senior Convertible Debenture (the “Note”) with respect
to the sale and issuance to institutional investor Osher Capital Partners LLC (“Osher”)
of (i) $110,000 aggregate principal amount of Note due August 31, 2023 based on $1.00 for each $0.90909 paid by the previous noteholder
and (ii) five-year Common Stock Purchase Warrants (“Warrants’) to purchase up to an aggregate of 733,333 shares of the Company’s
Common Stock at an exercise price of $0.25 per share. The aggregate cash subscription amount received by the Company from the previous
noteholder for the issuance of the Note and Warrants was $100,000 which was issued at a $10,000 original issue discount from the face
value of the Note. The conversion price for the principal in connection with voluntary conversions
by a holder of the convertible notes is $0.15 per share, subject to adjustment as provided therein, such as stock splits and stock
dividends.
September
20, 2022 – $110,000
On
August 31, 2022, the Company entered into an Original Issue Discount Senior Convertible Debenture (the “Note”) with respect
to the sale and issuance to institutional investor Osher Capital Partners LLC (“Osher”)
of (i) $110,000 aggregate principal amount of Note due August 31, 2023 based on $1.00 for each $0.90909 paid by the previous noteholder
and (ii) five-year Common Stock Purchase Warrants (“Warrants’) to purchase up to an aggregate of 733,333 shares of the Company’s
Common Stock at an exercise price of $0.25 per share. The aggregate cash subscription amount received by the Company from the previous
noteholder for the issuance of the Note and Warrants was $100,000 which was issued at a $10,000 original issue discount from the face
value of the Note. The conversion price for the principal in connection with voluntary conversions
by a holder of the convertible notes is $0.15 per share, subject to adjustment as provided therein, such as stock splits and stock
dividends.
October 20, 2022 - $110,000
On October 20, 2022, the Company entered into
an Original Issue Discount Senior Convertible Debenture (the “Note”) with respect to the sale and issuance to institutional
investor Osher Capital Partners LLC (“Osher”) of (i) $110,000 aggregate principal amount of Note due October 20, 2023 based
on $1.00 for each $0.90909 paid by the previous noteholder and (ii) five-year Common Stock Purchase Warrants (“Warrants’)
to purchase up to an aggregate of 733,333 shares of the Company’s Common Stock at an exercise price of $0.25 per share. The aggregate
cash subscription amount received by the Company from the previous noteholder for the issuance of the Note and Warrants was $100,000
which was issued at a $10,000 original issue discount from the face value of the Note. The conversion price for the principal in connection
with voluntary conversions by a holder of the convertible notes is $0.15 per share, subject to adjustment as provided therein, such as
stock splits and stock dividends.
November 14, 2022 - $55,000
On November 14, 2022, the Company entered into
an Original Issue Discount Senior Convertible Debenture (the “Note”) with respect to the sale and issuance to institutional
investor Osher Capital Partners LLC (“Osher”) of (i) $55,000 aggregate principal amount of Note due November 14, 2023 based
on $1.00 for each $0.90909 paid by the previous noteholder and (ii) five-year Common Stock Purchase Warrants (“Warrants’)
to purchase up to an aggregate of 366,667 shares of the Company’s Common Stock at an exercise price of $0.25 per share. The aggregate
cash subscription amount received by the Company from the previous noteholder for the issuance of the Note and Warrants was $50,000 which
was issued at a $5,000 original issue discount from the face value of the Note. The conversion price for the principal in connection
with voluntary conversions by a holder of the convertible notes is $0.15 per share, subject to adjustment as provided therein, such as
stock splits and stock dividends.
Brio
March
23, 2022 – $110,000
On
March 23, 2022, the Company entered into an Original Issue Discount Senior Convertible Debenture (the “Note”) with respect
to the sale and issuance to institutional investor Brio Capital Master Fund Ltd. (“Brio”) of (i) $110,000 aggregate principal
amount of Note due March 23, 2023 based on $1.00 for each $0.90909 paid by the previous noteholder and (ii) five-year Common Stock Purchase
Warrants (“Warrants’) to purchase up to an aggregate of 220,000 shares of the Company’s Common Stock at an exercise
price of $0.50 per share. The aggregate cash subscription amount received by the Company from the previous noteholder for the issuance
of the Note and Warrants was $100,000 which was issued at a $10,000 original issue discount from the face value of the Note. The conversion
price for the principal in connection with voluntary conversions by a holder of the convertible notes is $0.50 per share, subject to
adjustment as provided therein, such as stock splits and stock dividends.
May
10, 2022 – $110,000
On
May 10, 2022, the Company entered into an Original Issue Discount Senior Convertible Debenture (the “Note”) with respect
to the sale and issuance to institutional investor Brio Capital Master Fund Ltd. (“Brio”) of (i) $110,000 aggregate principal
amount of Note due May 10, 2023 based on $1.00 for each $0.90909 paid by the previous noteholder and (ii) five-year Common Stock Purchase
Warrants (“Warrants’) to purchase up to an aggregate of 220,000 shares of the Company’s Common Stock at an exercise
price of $0.50 per share. The aggregate cash subscription amount received by the Company from the previous noteholder for the issuance
of the Note and Warrants was $100,000 which was issued at a $10,000 original issue
discount from the face value of the Note. The conversion
price for the principal in connection with voluntary conversions by a holder of the convertible notes is $0.50 per share, subject to
adjustment as provided therein, such as stock splits and stock dividends.
September
9, 2022 – $82,500
On
September 9, 2022, the Company entered into an Original Issue Discount Senior Convertible Debenture (the “Note”) with respect
to the sale and issuance to institutional investor Brio Capital Master Fund Ltd. (“Brio”)
of (i) $82,500 aggregate principal amount of Note due September 9, 2023 based on $1.00 for each $0.90909 paid by the previous noteholder
and (ii) five-year Common Stock Purchase Warrants (“Warrants’) to purchase up to an aggregate of 550,000 shares of the Company’s
Common Stock at an exercise price of $0.25 per share. The aggregate cash subscription amount received by the Company from the previous
noteholder for the issuance of the Note and Warrants was $75,000 which was issued at a $7,500 original issue discount from the face value
of the Note. The conversion price for the principal in connection with voluntary conversions by
a holder of the convertible notes is $0.15 per share, subject to adjustment as provided therein, such as stock splits and stock
dividends.
November 9 - $82,500
On November 9, 2022, the Company entered into
an Original Issue Discount Senior Convertible Debenture (the “Note”) with respect to the sale and issuance to institutional
investor Brio Capital Master Fund Ltd. (“Brio”) of (i) $82,500 aggregate principal amount of Note due November 9, 2023 based
on $1.00 for each $0.90909 paid by the previous noteholder and (ii) five-year Common Stock Purchase Warrants (“Warrants’)
to purchase up to an aggregate of 550,000 shares of the Company’s Common Stock at an exercise price of $0.25 per share. The aggregate
cash subscription amount received by the Company from the previous noteholder for the issuance of the Note and Warrants was $75,000 which
was issued at a $7,500 original issue discount from the face value of the Note. The conversion price for the principal in connection
with voluntary conversions by a holder of the convertible notes is $0.15 per share, subject to adjustment as provided therein, such as
stock splits and stock dividends.
DESCRIPTION
OF SECURITIES
The
following description of our capital stock is a summary and is qualified in its entirety by the provisions of our Certificate of Incorporation,
which has been filed as an exhibit to our registration statement of which this prospectus is a part.
Common
Stock
We
are authorized to issue 1,000,000,000 shares of common stock, par value $0.0001, of which 37,295,813 shares are issued and outstanding
as of August 15, 2022. Each holder of shares of our common stock is entitled to one vote for each share held of record on all matters
submitted to the vote of stockholders, including the election of Directors. The holders of shares of common stock have no pre-emptive,
conversion, subscription or cumulative voting rights. There is no provision in our Certificate of Incorporation or Bylaws that would
delay, defer, or prevent a change in control of our Company.
Choice
of Forum. The Certificate of Incorporation provides that, unless our Board consents to an alternative forum, the Court of Chancery
in the State of Delaware will be the sole and exclusive forum for: (i) any derivative action or proceeding brought by or on our behalf;
(ii) any direct action asserting a claim against us or any of our directors or officers pursuant to any of the provisions of the DGCL,
our Certificate of Incorporation or our Certificate of Incorporation; (iii) any action asserting a claim of breach of fiduciary duties
owed by any of our directors, officers or other employees to our stockholders; or (iv) any action asserting a violation of Delaware decisional
law relating to our internal affairs. This provision does not apply to (a) actions in which the Court of Chancery in the State of Delaware
concludes that an indispensable party is not subject to the jurisdiction of Delaware courts, or (b) actions in which a federal court
has assumed exclusive jurisdiction to a proceeding. This provision is not intended to apply to any actions brought under the Securities
Act or the Exchange Act. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any
duty or liability created by the Exchange Act or the rules and regulations thereunder. As a result, the exclusive forum provision will
not apply to suits brought to enforce any duty or liability created by the Exchange Act or any other claim for which the federal courts
have exclusive jurisdiction. There is uncertainty as to whether a court would enforce this provision with respect to claims under the
Securities Act. However, the Certificate of Incorporation does not relieve us of our duties to comply with federal securities laws and
the rules and regulations thereunder, and our stockholders will not be deemed to have waived our compliance with these laws, rules and
regulations. The Certificate of Incorporation also provides that any person or entity purchasing or otherwise acquiring any interest
in shares of our capital stock will be deemed to have notice of and consented to this choice of forum provision.
This
choice of forum provision may impose additional litigation costs on stockholders in pursuing such claims, particularly if the stockholders
do not reside in or near the State of Delaware. Additionally, this choice of forum provision may limit our stockholders’ ability
to bring a claim in a judicial forum that they find favorable for disputes, which may discourage the filing of such lawsuits.
Securities
Offered in this Offering
We
are offering ______ Class A Units, each unit consisting of one share of our common stock and one Series A Warrant to purchase one
share of our common stock and Class B Units, each consisting of Series B Preferred Stock and one Series A Warrant. The share
of common stock and accompanying Series A Warrants included in each Class A Unit will be issued separately and the share of Series B
Preferred Stock and accompanying Series A Warrant will be issued separately. Class A Units and Class B Units will not be issued or
certificated. We are also registering the shares of common stock included in the Class A Units and the shares of common stock
issuable from time to time upon exercise of the Series A Warrants included in the Class A Units and Class B Units and Series B
Preferred Stock offered hereby. The description of our common stock is set forth above under the heading “—Common
Stock.”
Series
B Preferred Stock Issued in this Offering
Our
board of directors shall have designated _____ shares of our preferred stock as Series B Preferred Stock, none of which are
currently issued and outstanding. The preferences and rights of the Series B Preferred Stock will be as set forth in a
Certificate of Designation (the “Series B Certificate of Designation”) filed as an exhibit to the registration statement
of which this prospectus is a part.
Pursuant
to a transfer agency agreement between us and Equity Stock Transfer, as transfer agent, the Series B Preferred Stock will be issued in
book-entry form and shall initially be represented only by one or more global certificates deposited with The Depository Trust Company,
or DTC, and registered in the name of Cede & Co., a nominee of DTC, or as otherwise directed by DTC.
In
the event of a liquidation, the holders of Series B Preferred Stock are entitled to participate on an as-converted-to-Common Stock basis
with holders of the Common Stock in any distribution of assets of the Company to the holders of the Common Stock. The Series B Certificate
of Designation provides, among other things, that we shall not pay any dividends on shares of Common Stock (other than dividends in the
form of Common Stock) unless and until such time as we pay dividends on each share of Series B Preferred Stock on an as-converted basis.
Other than as set forth in the previous sentence, the Series B Certificate of Designation provides that no other dividends shall be paid
on Series B Preferred Stock.
With
certain exceptions, as described in the Series B Certificate of Designation, the Series B Preferred Stock have no voting rights. However,
as long as any shares of Series B Preferred Stock remain outstanding, the Series B Certificate of Designation provides that we shall
not, without the affirmative vote of holders of a majority of the then-outstanding Series B Preferred Stock, (a) alter or change adversely
the powers, preferences or rights given to the Series B Preferred Stock or alter or amend the Series B Certificate of Designation, (b)
increase the number of authorized shares of Series B Preferred Stock or (c) amend our certificate of incorporation in any manner that
adversely affects the rights of holders of Series B Preferred Stock.
Each
Series B preferred share is convertible at any time at the holder’s option into a number of shares of common stock equal to $5,000
divided by the Series B Conversion Price. The “Series B Conversion Price” is initially $ and is subject to adjustment for
stock splits, stock dividends, distributions, subdivisions and combinations. Notwithstanding the foregoing, the Series B Certificate
of Designation further provides that we shall not effect any conversion of Series B Preferred Stock, with certain exceptions, to the
extent that, after giving effect to an attempted conversion, the holder of Series B Preferred Stock (together with such holder’s
affiliates, and any persons acting as a group together with such holder or any of such holder’s affiliates) would beneficially
own a number of shares of Common Stock in excess of 4.99% (or, at the election of the holder, 9.99%) of the shares of our Common Stock
then outstanding after giving effect to such exercise (the “preferred stock Beneficial Ownership Limitation”); provided,
however, that upon notice to the Company, the holder may increase or decrease the preferred stock Beneficial Ownership Limitation, provided
that in no event shall the preferred stock Beneficial Ownership Limitation exceed 9.99% and any increase in the preferred stock Beneficial
Ownership Limitation will not be effective until 61 days following notice of such increase from the holder to us.
The
Series B preferred shares contain price protection so that if any offering is made of our Common Stock or common stock equivalents at
a price per share lower than the offering price per share in this offering, the conversion price of the Series B Preferred shares will
automatically be reduced to the lower price per share. The Series B preferred shares also contain a blocker provision at 9.99% of the
issues and outstanding shares, and the Certificate of Designation for the Series B preferred shares may not be amended without the consent
of 75% of the then issued and outstanding Series B preferred shares.
We
do not intend to apply for listing of the Series B Preferred Stock on any securities exchange or other trading system.
Series
A Warrants
The
following summary of certain terms and provisions of the Series A Warrants offered hereby is not complete and is subject to, and qualified
in its entirety by the provisions of the form of Series A Warrant, which is filed as an exhibit to the registration statement of which
this prospectus is a part. Prospective investors should carefully review the terms and provisions set forth in the form of Series A Warrant.
We do not have a price as of yet so we cannot disclose the amounts of warrants outstanding following the offering, and none were available
pre-offering. The exercise price is 110% of the offering price per Class A Unit for the Series A Warrants.
Exercisability.
The Series A Warrants are exercisable at any time after their original issuance and at any time up to the date that is five years
after their original issuance. The Series A Warrants will be exercisable, at the option of each holder, in whole or in part by delivering
to us a duly executed exercise notice and, at any time a registration statement registering the issuance of the shares of common stock
underlying the Series A Warrants under the Securities Act is effective and available for the issuance of such shares, or an exemption
from registration under the Securities Act is available for the issuance of such shares, by payment in full in immediately available
funds for the number of shares of common stock purchased upon such exercise. If a registration statement registering the issuance of
the shares of common stock underlying the Series A Warrants under the Securities Act is not effective or available and an exemption from
registration under the Securities Act is not available for the issuance of such shares, the holder may, in its sole discretion, elect
to exercise the warrant through a cashless exercise, in which case the holder would receive upon such exercise the net number of shares
of common stock determined according to the formula set forth in the Series A Warrant. No fractional shares of common stock will be issued
in connection with the exercise of a Series A Warrant. In lieu of fractional shares, we will pay the holder an amount in cash equal to
the fractional amount multiplied by the exercise price.
Exercise
Limitation. A holder will not have the right to exercise any portion of the Series A Warrant if the holder (together with its affiliates)
would beneficially own in excess of 9.99% of the number of shares of our common stock outstanding immediately after giving effect to
the exercise, as such percentage ownership is determined in accordance with the terms of the Series A Warrants.
Exercise
Price. The exercise price per whole share of common stock purchasable upon exercise of the Series A Warrants is $___ per share or
110% of the public offering price of the Class A Units. The exercise price is subject to appropriate adjustment in the event of certain
stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting our common stock and
also upon any distributions of assets, including cash, stock or other property to our stockholders.
Transferability.
Subject to applicable laws, the Series A Warrants may be offered for sale, sold, transferred or assigned without our consent.
Exchange
Listing. There is no established trading market for the Series A Warrants and we do not expect a market to develop. In addition,
we do not intend to apply for the listing of the Series A Warrants on any national securities exchange or other trading market. Without
an active trading market, the liquidity of the Series A Warrants will be limited.
Warrant
Agent. The Series A Warrants will be issued in registered form under a warrant agency agreement between VStock Transfer, LLC, as
warrant agent, and us. The Series A Warrants shall initially be represented only by one or more global warrants deposited with the warrant
agent, as custodian on behalf of The Depository Trust Company (DTC) and registered in the name of Cede & Co., a nominee of DTC, or
as otherwise directed by DTC.
Fundamental
Transactions. In the event of a fundamental transaction, as described in the Series A Warrants and generally including any reorganization,
recapitalization or reclassification of our common stock, the sale, transfer or other disposition of all or substantially all of our
properties or assets, our consolidation or merger with or into another person, the acquisition of more than 50% of our outstanding common
stock, or any person or group becoming the beneficial owner of 50% of the voting power represented by our outstanding common stock, the
holders of the warrants will be entitled to receive upon exercise of the Series A Warrants the kind and amount of securities, cash or
other property that the holders would have received had they exercised the warrants immediately prior to such fundamental transaction.
Rights
as a Stockholder. Except as otherwise provided in the warrants or by virtue of such holder’s ownership of shares of our common
stock, the holder of a Series A Warrant does not have the rights or privileges of a holder of our common stock, including any voting
rights, until the holder exercises the Series A Warrant.
Governing
Law. The Series A Warrants and the warrant agency agreement are governed by New York law.
Warrants
and Options
During
2020, in conjunction with the sale and issuance of Original Issue Discount Senior Convertible Debentures (“Notes”), the Company
issued warrants to purchase an aggregate of 1,621,730 shares of the Company’s common stock with an exercise price of $0.59 and
vest over a period of five years. On February 19, 2021, a noteholder exercised 70,510 warrants pursuant to the cashless exercise provision
of the warrant agreement into 57,147 common shares. In addition, the Company issued warrants to purchase an aggregate of 4,113,083 shares
of the Company’s common stock with an exercise price of $0.14 and vest over a period of five years.
In
February and April 2021, in conjunction with the sale and issuance of Notes, the Company issued warrants to purchase an aggregate of
386,255 shares of the Company’s common stock with an exercise price of $1.20 and vest over a period of five years.
On
May 10, 2021, the Company closed a private placement to accredited investors that resulted in the issuance of 1,172,000 warrants to purchase
an aggregate of 1,172,000 shares of the Company’s common stock with an exercise price of $1.75 and vest over a period of five years.
On
October 20, 2021, the Company entered into a securities purchase agreement with an accredited investor that resulted in the issuance
of 320,000 shares of common stock and warrants to purchase an aggregate of 320,000 shares of the Company’s common stock for total
proceeds totaling $400,000. For each share purchased, the investor received a five-year warrant to purchase one share of common stock
at $1.25 per share.
On
October 22, 2021, in exchange for the extension of Notes, the Company issued a noteholder five-year warrants to purchase an aggregate
of 450,000 shares of the Company’s common stock at an exercise price of $1.00 per share
Security
Holders
As
of August 15, 2022, there were 37,295,813 common shares issued and outstanding, which were held by approximately 72 stockholders of record.
We do not know the number of our beneficial shareholders or shareholders holding shares through their broker(s) in “street name.”
Non-cumulative
Voting
Holders
of shares of our common stock do not have cumulative voting rights, which means that the holders of more than 50% of the outstanding
shares, voting for the election of directors, can elect all of the directors to be elected, if they so choose, and, in such event, the
holders of the remaining shares will not be able to elect any of our directors.
Transfer
Agent
We
have engaged VStock Transfer, LLC as the Company’s transfer agent to serve as agent for shares of our common stock. Our transfer
agent’s contact information is as follows:
VStock
Transfer, LLC
18
Lafayette Place
Woodmere,
NY 11598
Phone:
(212) 828-8436
SHARES
ELIGIBLE FOR FUTURE SALE
Prior
to this offering, there was a limited public market for our common stock as we trade sporadically on the OTCQB® Venture Market. We
cannot predict the effect, if any, that market sales of shares of our common stock or the availability of shares of our common stock
for sale will have on the market price of our common stock. Sales of substantial amounts of our common stock in the public market could
adversely affect the market prices of our common stock and could impair our future ability to raise capital through the sale of our equity
securities.
We
have an aggregate of 37,295,803 shares of our common stock outstanding as of December 31, 2021 (prior to the Offering). All of the xx,000
shares to be registered in this Offering will be freely tradable without restriction or further registration under the Securities Act,
unless those shares are purchased by our affiliates, as that term is defined in Rule 144 under the Securities Act.
Rule
144
Rule
144 allows for the public resale of restricted and control securities if a number of conditions are met. Meeting the conditions includes
holding the shares for a certain period of time, having adequate current information, looking into a trading volume formula, and filing
a notice of the proposed sale with the SEC.
In
general, a person who has beneficially owned restricted shares of our common stock for at least six months would be entitled to sell
their securities provided that (I) such person is not deemed to have been one of our affiliates at the time of, or at any time during
the 90 days preceding, a sale, (ii) we are subject to the Exchange Act periodic reporting requirements and have filed all required reports
for a least 90 days before the sale, and (iii) we are not and have never been a shell company (a company having no or nominal operations
and either (1) no or nominal assets, (2) assets consisting solely of cash and cash equivalents, or (3) assets consisting of any amount
of cash and cash equivalents and nominal other assets). If we ever become a shell company, Rule 144 would be unavailable until one year
following the date we cease to be a shell company and file Form 10 information with the SEC ceasing to be a shell company, provided that
we are then subject to the reporting requirements of section 13 or 15(d) of the Exchange Act and have filed all reports and other materials
required to be filed by section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that we were
required to file such reports and materials), other than Form 8-K reports.
Persons
who have beneficially owned restricted shares of our common stock for at least six months but who are our affiliates at the time of,
or any time during the 90 days preceding, a sale, would be subject to additional restrictions, by which such person would be entitled
to sell within any three-month period only a number of securities that does not exceed the greater of either of the following:
| ● | 1%
of the number of shares of our common stock then outstanding, which would equal approximately
388,000 shares, based on the number of shares of our common stock outstanding as of December
31, 2021 (37,295,803), and assuming the 1,500,000 shares being registered in the Offering
are issued and sold; or |
| ● | The
average weekly trading volume of our common stock during the four calendar weeks preceding
the filing of a notice on Form 144 with respect to the sale. |
At
the expiration of the one-year holding period, a person who was not one of our affiliates at any time during the three months preceding
a sale would be entitled to sell an unlimited number of shares of our common stock without restriction. A person who was one of our affiliates
at any time during the three months preceding a sale would remain subject to the volume restrictions described above.
Sales
under the Rule 144 by our affiliates or persons selling shares on behalf of our affiliates are also subject to certain manner of sale
provisions and notice requirements and to the availability of current public information about us.
LEGAL
MATTERS
The
validity of the securities offered by this prospectus will be passed upon by Jolie Kahn, Esq., New York, New York. Blank Rome LLP, New
York, New York is acting as counsel for the underwriters in this offering.
EXPERTS
Except
as disclosed herein, no expert or counsel named in this prospectus as having prepared or certified any part of this prospectus or having
given an opinion upon the validity of the securities being registered or upon other legal matters in connection with the registration
or offering of the common stock was employed on a contingency basis or had, or is to receive, in connection with the offering, a substantial
interest, directly or indirectly, in the registrant or its subsidiary. Nor was any such person connected with the Company or any of its
parents, or subsidiaries, as a promoter, managing or principal underwriter, voting trustee, director, officer or employee.
The
financial statements of Sigyn Therapeutics, Inc. as of December 31, 2021 and 2020, have been included herein in reliance on the
reports of Paris Kreit & Chiu, an independent registered public accounting firm, given on the authority of that firm as experts
in auditing and accounting.
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
During
the two most recent fiscal years ended December 31, 2021 and 2020, there have been no changes in or disagreements with our independent
registered public accounting firm on any matter of accounting principles or practices, financial statement disclosure, or auditing scope
or procedure, which disagreements if not resolved to the satisfaction of the Former Accounting Firm would have caused them to make reference
thereto in their report on the financial statements.
WHERE
YOU CAN FIND MORE INFORMATION
We
have filed a registration statement on Form S-1 under the Securities Act with the SEC for the securities offered hereby. This prospectus,
which constitutes a part of the registration statement, does not contain all of the information set forth in the registration statement
or the exhibits and schedules which are part of the registration statement. For additional information about our securities, and us we
refer you to the registration statement and the accompanying exhibits and schedules. Statements contained in this prospectus regarding
the contents of any contract or any other documents to which we refer are not necessarily complete. In each instance, reference is made
to the copy of the contract or document filed as an exhibit to the registration statement, and each statement is qualified in all respects
by that reference. Our filings, including the registration statement, will also be available to you on the Internet web site maintained
by the SEC at http://www.sec.gov.
SIGYN
THERAPEUTICS, INC.
Index
to Financial Statements
CONTENTS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To
the Board of Directors and
Stockholders
of Sigyn Therapeutics, Inc.
Opinion
on the Financial Statements
We
have audited the accompanying consolidated balance sheets of Sigyn Therapeutics, Inc. (the Company) as of December 31, 2021 and 2020,
and the related consolidated statements of operations, changes in shareholders’ equity, and cash flows for each of the two years
ended December 31, 2021, and the related notes (collectively referred to as the financial statements). In our opinion, the financial
statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the
results of its operations and its cash flows for each of the two years in the period ended December 31, 2021, in conformity with accounting
principles generally accepted in the United States of America.
The
Company’s Ability to Continue as a Going Concern
The
accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed
in Note 2 to the financial statements, the Company has suffered recurring losses from operations, has a net capital deficiency, and negative
cash flows from operating activities, therefore, the Company has stated that substantial doubt exists about its ability to continue as
a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
Basis
for Opinion
These
financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial
statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United
States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities
laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We
conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company
is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits
we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion
on the effectiveness of the entity’s internal control over financial reporting. Accordingly, we express no such opinion.
Our
audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error
or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding
the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits
provide a reasonable basis for our opinion.
Critical
Audit Matters
The
critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated
or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial
statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters
does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit
matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Going
Concern
As
described further in Note 2 to the consolidated financial statements, the Company has incurred losses each year from inception through
December 31, 2021 and expects to incur additional losses in the future.
We
determined the Company’s ability to continue as a going concern is a critical audit matter due to the estimation and uncertainty
regarding the Company’s future cash flows and the risk of bias in management’s judgments and assumptions in estimating these
cash flows.
Our
audit procedures related to the Company’s assertion on its ability to continue as a going concern included the following, among
others:
We
reviewed the Company’s working capital and liquidity ratios and forecasted revenue, operating expenses, and uses and sources of
cash used in management’s assessment of whether the Company has sufficient liquidity to fund operations for at least one year from
the financial statement issuance date. This testing included inquiries with management, comparison of prior period forecasts to actual
results, consideration of positive and negative evidence impacting management’s forecasts, the Company’s financing arrangements
in place as of the report date, market and industry factors and consideration of the Company’s relationships with its financing
partners.
Inventory
Valuation
As
described in Note 3 to the consolidated financial statements, based on the significant advancement of Sigyn Therapy, the Company decided
in the 4th quarter of 2021 to assess the value of retail business operations that were a focus of the Company prior to the merger transaction
consummated on October 19, 2020. Related to this assessment, management determined the wholesale liquidation value of its sapphire gem
inventory to be 5-10% of the previously reported retail value, based on communications with certified gemologists, the variance between
retail and wholesale valuations, and current market conditions. As a result, the Company has valued the inventory at $50,000 and recorded
an impairment of assets of $536,047 in the year ended December 31, 2021 and is classified in other expenses in the Consolidated Statements
of Operations.
We
evaluated and tested the certified gemologists inventory valuation report and subsequent company communications with this expert.
Paris
Kreit & Chiu CPA LLP
(formerly
known as Benjamin & Ko)
We
have served as the Company’s auditor since 2021.
New
York, New York
March
21, 2022
SIGYN
THERAPEUTICS, INC.
CONSOLIDATED
BALANCE SHEETS
See
accompanying notes to consolidated financial statements
SIGYN
THERAPEUTICS, INC.
CONSOLIDATED
STATEMENTS OF OPERATIONS
See
accompanying notes to consolidated financial statements
SIGYN
THERAPEUTICS, INC.
CONSOLIDATED
STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
See
accompanying notes to consolidated financial statements
SIGYN
THERAPEUTICS, INC.
CONSOLIDATED
STATEMENTS OF CASH FLOWS
See
accompanying notes to consolidated financial statements
SIGYN
THERAPEUTICS, INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE YEARS ENDED DECEMBER 31, 2021 AND 2020
NOTE
1 – ORGANIZATION AND PRINCIPAL ACTIVITIES
Corporate
History and Background
Sigyn
Therapeutics, Inc. (“Sigyn” or the “Company”) is a development-stage medical technology company headquartered
in San Diego, California. We are focused on creating therapeutic solutions that address unmet needs in global health.
We
are developing Sigyn Therapy™ as a candidate to treat life-threatening infections and inflammatory disorders for which effective
drug therapies are not available. Sigyn Therapy is an extracorporeal
blood purification technology designed to reduce the circulating presence of pathogen sources of life-threatening inflammation
in concert with dampening down the dysregulated overproduction of inflammatory cytokines (the cytokine storm), which
plays a prominent role in each of our candidate treatment indications.
We
are advancing Sigyn Therapy as a candidate to treat end-stage renal disease (ESRD) patients with chronic inflammation and/or endotoxemia,
pathogen-associated sepsis (leading cause of hospital deaths),
community acquired pneumonia (a leading cause of death among infectious diseases), and emerging pandemic threats.
Since
initiating the development of Sigyn Therapy in 2020, we completed pre-clinical in vitro studies that quantified the reduction
of pathogen sources of inflammation from
human blood plasma with small-scale versions of Sigyn Therapy. These include endotoxin (a gram-negative bacterial toxin), peptidoglycan
and lipoteichoic acid (gram-positive bacterial toxins), and viral pathogens, including COVID-19.
We
also completed in vitro studies that quantified the reduction of inflammatory cytokines from human blood plasma with small-scale
versions of Sigyn Therapy. These include interleukin-1 beta (IL-1b), interleukin-6 (IL-6), and tumor necrosis factor alpha (TNF-a). In
a related study, liposomes were reduced from human blood plasma as a model system to evaluate the potential of Sigyn Therapy to target
CytoVesicles that transport inflammatory cytokine cargos throughout the bloodstream.
In
vitro studies also quantified the reduction of hepatic (liver) toxins from human blood plasma with small-scale versions of Sigyn
Therapy. These included ammonia, bile acid and bilirubin. Based on these outcomes, we may further investigate the potential of Sigyn
Therapy to treat acute forms of liver failure in future studies.
Each
of our in vitro studies were conducted by Innovative Biotherapies, based in Ann Arbor, Michigan. With the exception of the liposome
data results, the studies quantified the reduction of each target from human blood plasma with small-scale versions of Sigyn Therapy.
Each of these studies were conducted for a period of four hours. In the liposome study, the formulation of adsorbent components that
we incorporate within Sigyn Therapy was quantified to reduce the presence of liposomes from human blood plasma in a test-tube rocker
study conducted for a period of two hours. While we maintain ownership of our in vitro study results, we do provide rights to
researchers at Innovative Biotherapies to publish our study results.
Subsequent
to our in vitro study results, we completed in vivo animal studies of Sigyn Therapy at the University of Michigan. In these
studies, Sigyn Therapy was administered via standard dialysis machines utilizing conventional blood-tubing sets, for periods up to six
hours in eight porcine (pig) subjects. Important criteria for treatment feasibility, including hemodynamic parameters, serum chemistries
and hematologic measurements, were stable across all eight subjects. While we maintain ownership of our in vivo animal study data,
we do provide rights to researchers at the University of Michigan to publish the results of our animal studies.
The
data resulting from our in vivo and in vitro studies is being incorporated into an Investigational Device Exemption (IDE) that
we are drafting for submission to the U.S. Food and Drug Administration (“FDA”) to support the potential initiation of human
feasibility studies in the United States.
Beyond
our focus to clinically advance Sigyn Therapy, we intend to develop a pipeline of extracorporeal blood purification therapies. In this
regard, we have designed a therapeutic system to enhance the benefit of cancer chemotherapy. To support this endeavor, we disclosed on
October 6, 2022, that a patent application entitled: “SYSTEM AND METHODS
TO ENHANCE CHEMOTHERAPY DELIVERY AND REDUCE TOXICITY” had been filed with the
United States Patent and Trademark Office (“USPTO”). On October 13, 2022, we subsequently disclosed that trademark applications
to register ChemoPrepTM and ChemoPureTM were filed with the USPTO”.
Public
Merger Agreement
On
October 19, 2020, Sigyn Therapeutics, Inc, a Delaware corporation (the “Registrant”) formerly known as Reign Resources Corporation,
completed a Share Exchange Agreement (the “Agreement”) with Sigyn Therapeutics, Inc., a private entity incorporated in the
State of Delaware on October 19, 2019.
In
the Share Exchange Agreement, we acquired 100%
of the issued and outstanding shares of privately held Sigyn Therapeutics Inc., common stock in exchange for 75%
of the fully paid and nonassessable shares of our common stock outstanding (the “Acquisition”). In conjunction with the transaction,
we changed our name from Reign Resources Corporation to Sigyn Therapeutics, Inc. pursuant to an amendment to our articles of incorporation
that was filed with the State of Delaware. The Acquisition was treated by the Company as a reverse merger in accordance with accounting
principles generally accepted in the United States of America (“U.S. GAAP”). For accounting purposes, Sigyn is considered
to have acquired Reign Resources Corporation as the accounting acquirer because: (i) Sigyn stockholders own 75% of the combined company,
on an as-converted basis, immediately following the Closing Date, (ii) Sigyn directors hold a majority of board seats in the combined
company and (iii) Sigyn management held all key positions in the management of the combined company. Accordingly, Sigyn’s historical
results of operations will replace Reign Resources Corporation’s historical results of operations for all periods prior to the
Acquisition and, for all periods following the Acquisition, the results of operations of the combined company will be included in the
Company’s financial statements. The Acquisition was treated as a “tax-free exchange”
under Section 368 of the Internal Revenue Code of 1986 and resulted in the private Sigyn Therapeutics corporate entity (established
on October 29, 2019) to become a wholly owned subsidiary of Reign Resources Corporation. Among the conditions for closing the acquisition,
the Reign Resources Corporation extinguished all previously reported liabilities, its preferred class of shares, and all stock purchase
options. As a result, the reported liabilities totaling $3,429,516 were converted into a total of 7,907,351 common shares. Additionally,
assets held on the books of Reign Resources Corporation, such as Gem inventory, was kept in the Company and therefore recorded as assets
on the Share Exchange date. Upon the closing of the Acquisition, we appointed James
A. Joyce and Craig P. Roberts to serve as members of our Board of Directors.
As
of March 14, 2022, we have a total 37,295,803
shares issued and outstanding, of which 11,655,803
shares are held by non-affiliate shareholders.
Post
Public Merger Developments
Since
the consummation of the Acquisition on October 19, 2020, we have advanced Sigyn Therapy from conceptual design through completion
of in vitro studies that have quantified the reduction of relevant therapeutic targets from
human blood plasma with small-scale versions of Sigyn Therapy. These include endotoxin
(gram-negative bacterial toxin); peptidoglycan and lipoteichoic acid (gram-positive bacterial toxins); viral pathogens (including SARS-CoV-2);
hepatic toxins (ammonia, bile acid, and bilirubin); and tumor necrosis factor alpha (TNF alpha), interleukin-1 beta (IL-1b), and interleukin
6 (IL-6), which are pro-inflammatory cytokines whose dysregulated production (the cytokine storm) precipitate sepsis and play a prominent
role in each of our therapeutic opportunities.
Subsequent
to these studies, we disclosed the completion of in vivo animal studies. In
these studies, Sigyn Therapy was administered via standard dialysis machines utilizing conventional blood-tubing sets, for periods
of up to six hours in eight (8) porcine (pig) subjects, each weighing approximately 40-45 kilograms. The studies were comprised of a
pilot phase (two subjects), which evaluated the feasibility of the study protocol in the first-in-mammal use of Sigyn Therapy; and an
expansion phase (six subjects) to further assess treatment feasibility and refine pre-treatment set-up and operating procedures.
There were no serious adverse events reported in any of the treated animal subjects. Of the eight treatments, seven
were administered for the entire six-hour treatment period. One treatment was halted early due to the observation of a clot in the device,
which was believed to be the result of a procedural deviation in the pre-treatment set-up. Important criteria for treatment feasibility
– including hemodynamic parameters, serum chemistries and hematologic measurements – were stable across all subjects.
The
studies were conducted by a clinical team at Innovative BioTherapies, Inc. (“IBT”), under a contract with the University
of Michigan to utilize animal care, associated institutional review oversight, as well as surgical suite facilities located within the
North Campus Research Complex. The treatment protocol of the study was reviewed and approved by the University of Michigan Institutional
Animal Care and Use Committee (IACUC).
The
animal studies were conducted to correspond with FDA’s best practice guidance. The number of animals enrolled in our study and
the amount of data collected was based on the
ethical and least burdensome principles that underly the FDA goal of using the minimum number of animals necessary to generate valid
scientific data to demonstrate reasonable feasibility and performance of a medical device prior to human study consideration. A porcine
animal model is a generally accepted model for the study of extracorporeal blood purification devices intended to treat infectious disease
and inflammatory disorders. Regardless of these factors, FDA may require that we conduct additional animal studies.
The
data resulting from our in vivo
and in vitro studies is being incorporated into an Investigational Device Exemption (IDE) that we are drafting for submission
to the U.S. Food and Drug Administration (“FDA”) to support the potential initiation of a human feasibility study
in End-Stage Renal Disease (ESRD) patients with endotoxemia and elevated inflammatory cytokine production. As per the study protocol,
Sigyn Therapy is to be administered in combination with the regularly scheduled dialysis treatments of enrolled subjects. The primary
study objective will be to evaluate the safety of Sigyn Therapy in health compromised ESRD patients. A secondary objective will be to
quantify changes in circulating levels of endotoxin, tumor necrosis factor-αlpha (TNF-α), interleukin-1β (IL-1β),
and interleukin-6 (IL-6) before and after each Sigyn Therapy administration. Endotoxin and excess TNF-α, IL-1β, and IL-6 production
are commonly associated with each of our candidate treatment indications, including sepsis and community-acquired pneumonia.
Based
on our previous experience in developing extracorporeal blood purification therapies, we believe that we have collected sufficient data
to support first-in-human studies of Sigyn Therapy. In this regard, we plan to submit an IDE application to FDA related to the potential
initiation of a human feasibility study during the 2023 calendar year. However, there is no assurance that FDA will approve the initiation
of our feasibility study. Additionally, while we believe the data from our in vivo and in vitro studies provides support for our
IDE submission, FDA may request that we conduct additional animal or pre-clinical studies
prior to approving our IDE. Among our previous experiences in developing extracorporeal blood purification therapies, our CEO oversaw
the development of the Aethlon Hemopurifier, a first-in-industry device that received an FDA “Breakthrough Device” designation
for the treatment of life-threatening viruses and was awarded a second FDA “Breakthrough Device” designation related to the
treatment of cancer.
NOTE
2 – BASIS OF PRESENTATION
The
accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States
of America and include all adjustments necessary for the fair presentation of the Company’s financial position and results of operations
for the periods presented.
The
Company currently operates in one business segment. The Company is not organized by market and is managed and operated as one business.
A single management team reports to the chief operating decision maker, the Chief Executive Officer, who comprehensively manages the
entire business. The Company does not currently operate any separate lines of businesses or separate business entities.
Going
Concern
The
accompanying financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among
other things, the realization of assets and satisfaction of liabilities in the normal course of business. The Company had an accumulated
deficit of $4,265,759
at December 31, 2021, had a working capital
deficit of approximately $341,000 at
December 31, 2021, had net losses of $3,004,619
and $1,259,590
for the years ended December 31, 2021 and
2020, respectively, and net cash used in operating activities of $1,774,182
and $829,809
for the years ended December 31, 2021 and
2020, respectively, with no revenue earned since inception, and a lack of operational history. These matters raise substantial doubt
about the Company’s ability to continue as a going concern.
While
the Company is attempting to expand its research and development activities, the Company’s cash position may not be significant
enough to support the Company’s daily operations. Management intends to raise additional funds by way of a private offering or
an asset sale transaction. Management believes that the actions presently being taken to further implement its business plan and generate
revenues provide the opportunity for the Company to continue as a going concern. While management believes in the viability of its strategy
to generate revenues and in its ability to raise additional funds or transact an asset sale, there can be no assurances to that effect
or on terms acceptable to the Company. The ability of the Company to continue as a going concern is dependent upon the Company’s
ability to further implement its business plan and generate revenues.
The
financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
NOTE
3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This
summary of significant accounting policies of the Company is presented to assist in understanding the Company’s financial statements.
The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and
objectivity. These accounting policies conform to GAAP and have been consistently applied in the preparation of the financial statements.
Use
of Estimates
The
preparation of these consolidated financial statements in accordance 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 disclosures
of contingent assets and liabilities at the dates of the consolidated financial statements and the reported amounts of net sales and
expenses during the reported periods. Actual results may differ from those estimates and such differences may be material to the consolidated
financial statements. The more significant estimates and assumptions by management include among others: realizability of inventory,
common stock valuation, and the recoverability of intangibles. The current economic environment has increased the degree of uncertainty
inherent in these estimates and assumptions.
Cash
The
Company’s cash is held in bank accounts in the United States and is insured by the Federal Deposit Insurance Corporation (“FDIC”)
up to $250,000. The Company has not experienced any cash losses.
Income
Taxes
Income
taxes are accounted for under an asset and liability approach. This process involves calculating the temporary and permanent differences
between the carrying amounts of the assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.
The temporary differences result in deferred tax assets and liabilities, which would be recorded on the Balance Sheets in accordance
with Accounting Standards Codification (“ASC”) ASC 740, Income Taxes, which established financial accounting and reporting
standards for the effect of income taxes. The likelihood that its deferred tax assets will be recovered from future taxable income must
be assessed and, to the extent that recovery is not likely, a valuation allowance is established. Changes in the valuation allowance
in a period are recorded through the income tax provision in the consolidated Statements of Operations.
ASC
740-10 clarifies the accounting for uncertainty in income taxes recognized in an entity’s consolidated financial statements and
prescribes a recognition threshold and measurement attributes for financial statement disclosure of tax positions taken or expected to
be taken on a tax return. Under ASC 740-10, the impact of an uncertain income tax position on the income tax return must be recognized
at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax
position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, ASC 740-10 provides guidance on
derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company does not
have a liability for unrecognized income tax benefits.
Advertising
and Marketing Costs
Advertising
expenses are recorded as general and administrative expenses when they are incurred. The Company had no advertising expenses for year
ended December 31, 2021 and had $705 for the year ended December 31, 2020.
Research
and Development
All
research and development costs are expensed as incurred. The Company incurred research and development expense of $734,014 and $419,362
for the years ended December 31, 2021 and 2020, respectively.
Inventories
In
conjunction with the October 19, 2020 Share Exchange Agreement, the Company kept the gem inventory of Reign Resources Corporation. Inventories
are stated at the lower of cost or market (net realizable value) on a lot basis each quarter. A lot is determined by the cut, clarity,
size, and weight of the sapphires. Inventory consists of sapphire jewels that meet rigorous grading criteria and are of cuts and sizes
most commonly used in the jewelry industry. As of December 31, 2021 and 2020, the Company carried primarily loose sapphire jewels, jewelry
for sale on our website, and jewelry held as samples. Samples are used to show potential customers what the jewelry would look like.
Promotional items given to customers that are not expected to be returned will be removed from inventory and expensed. There have been
no promotional items given to customers as of December 31, 2021. The Company performs its own in-house assessment based on gem guide
and the current market price for metals to value its inventory on an annual basis or if circumstances dictate sooner to determine if
the estimated fair value is greater or less than cost. In addition, the inventory is reviewed each quarter by the Company against industry
prices from gem-guide and if there is a potential impairment, the Company would appraise the inventory. The estimated fair value is subject
to significant change due to changes in popularity of cut, perceived grade of the clarity of the sapphires, the number, type and size
of inclusions, the availability of other similar quality and size sapphires, and other factors. As a result, the internal assessed value
of the sapphires could be significantly lower from the current estimated fair value. Loose sapphire jewels do not degrade in quality
over time.
Based
on the significant advancement of Sigyn Therapy, the Company decided in the 4th quarter of 2021 to assess the value of retail
business operations that were a focus of the Company prior to the merger transaction consummated on October 19, 2020.
Related
to this assessment, management determined the wholesale liquidation value of its sapphire gem inventory to be 5-10% of the previously
reported retail value, based on communications with certified gemologists, the variance between retail and wholesale valuations, and
current market conditions. As a result, the Company has valued the inventory at $50,000 and recorded an impairment of assets of $536,047
in the year ended December 31, 2021 and is classified in other expenses in the consolidated Statements of Operations.
Property
and Equipment
Property
and equipment are carried at cost and are depreciated on a straight-line basis over the estimated useful lives of the assets, generally
five years.
The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired
or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in
income in the year of disposition.
Intangible
Assets
Intangible
assets consist primarily of website development costs. Our intangible assets are being amortized on a straight-line basis over a period
of three years.
Assignment
of Patent
On
January 8, 2020, James Joyce, the Company’s CEO and Craig Roberts, the Company’s CTO, assigned to the Company the rights
to patent 62/881,740 pertaining to the devices, systems and methods for the broad-spectrum reduction of pro-inflammatory cytokines in
blood in exchange for founder’s shares.
Impairment
of Long-lived Assets
We
periodically evaluate whether the carrying value of property, equipment and intangible assets has been impaired when circumstances indicate
the carrying value of those assets may not be recoverable. The carrying amount is not recoverable if it exceeds the sum of the undiscounted
cash flows expected to result from the use and eventual disposition of the asset. If the carrying value is not recoverable, the impairment
loss is measured as the excess of the asset’s carrying value over its fair value.
Our
impairment analysis requires management to apply judgment in estimating future cash flows as well as asset fair values, including forecasting
useful lives of the assets, assessing the probability of different outcomes, and selecting the undiscounted rate that reflects the risk
inherent in future cash flows. If the carrying value is not recoverable, we assess the fair value of long-lived assets using commonly
accepted techniques, and may use more than one method, including, but not limited to, recent third-party comparable sales and discounted
cash flow models. If actual results are not consistent with our assumptions and estimates, or our assumptions and estimates change due
to new information, we may be exposed to an impairment charge in the future. As of December 31, 2021 and 2020, the Company had not experienced
impairment losses on its long-lived assets.
Fair
Value of Financial Instruments
The
provisions of accounting guidance, Financial Accounting Standards Board (“FASB”) Topic ASC 825, Financial Instruments
– Overall, requires all entities to disclose the fair value of financial instruments, both assets and liabilities recognized
and not recognized on the balance sheet, for which it is practicable to estimate fair value, and defines fair value of a financial instrument
as the amount at which the instrument could be exchanged in a current transaction between willing parties. As of December 31, 2021 and
2020, the fair value of cash, accounts payable, accrued expenses, and notes payable approximated carrying value due to the short maturity
of the instruments, quoted market prices or interest rates which fluctuate with market rates.
Fair
Value Measurements
Fair
value is defined 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.
Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs.
The fair value hierarchy is based on three levels of inputs, of which the first two are considered observable and the last unobservable,
as follows:
| ● | Level
1 – Quoted prices in active markets for identical assets or liabilities. |
| | | |
| ● | Level
2 – Inputs other than Level 1 that are observable, either directly or indirectly, 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. |
| | | |
| ● | Level
3 – Unobservable inputs that are supported by little or no market activity and that
are significant to the measurement of the fair value of the assets or liabilities |
The
carrying value of financial assets and liabilities recorded at fair value are measured on a recurring or nonrecurring basis. Financial
assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when a significant event occurs. There
were no financial assets or liabilities carried and measured on a nonrecurring basis during the reporting periods. Financial assets and
liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared. There
have been no transfers between levels.
Debt
The
Company issues debt that may have separate warrants, conversion features, or no equity-linked attributes.
Debt
with warrants – When the Company issues debt with warrants, the Company treats the warrants as a debt discount, record as a
contra-liability against the debt, and amortize the balance over the life of the underlying debt as amortization of debt discount expense
in the consolidated statements of operations. When the warrants require equity treatment under ASC 815, the offset to the contra-liability
is recorded as additional paid in capital in our consolidated balance sheet. When the Company issues debt with warrants that require
liability treatment under ASC 815, such as a clause requiring repricing, the warrants are considered to be a derivative that is recorded
as a liability at fair value. If the initial value of the warrant derivative liability is higher than the fair value of the associated
debt, the excess is recognized immediately as interest expense. The warrant derivative liability is adjusted to its fair value
at the end of each reporting period, with the change being recorded as expense or gain to Other (income) expense in the consolidated
Statements of Operations. If the debt is retired early, the associated debt discount is then recognized immediately as amortization
of debt discount expense in the consolidated statement of operations. The debt is treated as conventional debt.
Convertible
debt – derivative treatment – When the Company issues debt with a conversion feature, we must first assess whether the
conversion feature meets the requirements to be treated as a derivative, as follows: a) one or more underlying, typically the price of
our common stock; b) one or more notional amounts or payment provisions or both, generally the number of shares upon conversion; c) no
initial net investment, which typically excludes the amount borrowed; and d) net settlement provisions, which in the case of convertible
debt generally means the stock received upon conversion can be readily sold for cash. An embedded equity-linked component that meets
the definition of a derivative does not have to be separated from the host instrument if the component qualifies for the scope exception
for certain contracts involving an issuer’s own equity. The scope exception applies if the contract is both a) indexed to its own
stock; and b) classified in shareholders’ equity in its statement of financial position.
If
the conversion feature within convertible debt meets the requirements to be treated as a derivative, we estimate the fair value of the
convertible debt derivative using Monte Carlo Method upon the date of issuance. If the fair value of the convertible debt derivative
is higher than the face value of the convertible debt, the excess is immediately recognized as interest expense. Otherwise, the fair
value of the convertible debt derivative is recorded as a liability with an offsetting amount recorded as a debt discount, which offsets
the carrying amount of the debt. The convertible debt derivative is revalued at the end of each reporting period and any change in fair
value is recorded as a gain or loss in the statement of operations. The debt discount is amortized through interest expense over the
life of the debt.
Convertible
debt – beneficial conversion feature – If the conversion feature is not treated as a derivative, we assess whether it
is a beneficial conversion feature (“BCF”). A BCF exists if the conversion price of the convertible debt instrument is less
than the stock price on the commitment date. This typically occurs when the conversion price is less than the fair value of the stock
on the date the instrument was issued. The value of a BCF is equal to the intrinsic value of the feature, the difference between the
conversion price and the common stock into which it is convertible, and is recorded as additional paid in capital and as a debt discount
in the consolidated balance sheet. The Company amortizes the balance over the life of the underlying debt as amortization of debt discount
expense in the statement of operations. If the debt is retired early, the associated debt discount is then recognized immediately as
amortization of debt discount expense in the consolidated Statement of Operations.
If
the conversion feature does not qualify for either the derivative treatment or as a BCF, the convertible debt is treated as traditional
debt.
Basic
and Diluted Earnings Per Share
Basic
net loss per share is calculated by dividing the net loss by the weighted-average number of common shares outstanding for the period,
without consideration for common stock equivalents. Diluted earnings (loss) per share are computed on the basis of the weighted average
number of common shares (including common stock subject to redemption) plus dilutive potential common shares outstanding for the reporting
period. In periods where losses are reported, the weighted-average number of common stock outstanding excludes common stock equivalents,
because their inclusion would be anti-dilutive.
Basic
and diluted earnings (loss) per share are the same since net losses for all periods presented and including the additional potential
common shares would have an anti-dilutive effect.
Stock-Based
Compensation
In
accordance with ASC No. 718, Compensation – Stock Compensation (“ASC 718”), we measure the compensation costs
of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over
the period during which employees are required to provide services. Share-based compensation arrangements include stock options, restricted
share plans, performance-based awards, share appreciation rights and employee share purchase plans. As such, compensation cost is measured
on the date of grant at their fair value. Such compensation amounts, if any, are amortized over the respective vesting periods of the
option grant.
Non-Employee
Stock-Based Compensation
In
accordance with ASC 505, Equity Based Payments to Non-Employees, issuances of the Company’s common stock or warrants for
acquiring goods or services are measured at the fair value of the consideration received or the fair value of the equity instruments
issued, whichever is more reliably measurable. The measurement date for the fair value of the equity instruments issued to consultants
or vendors is determined at the earlier of (i) the date at which a commitment for performance to earn the equity instruments is reached
(a “performance commitment” which would include a penalty considered to be of a magnitude that is a sufficiently large disincentive
for nonperformance) or (ii) the date at which performance is complete. Although situations may arise in which counter performance may
be required over a period of time, the equity award granted to the party performing the service is fully vested and non-forfeitable on
the date of the agreement. As a result, in this situation in which vesting periods do not exist as the instruments fully vested on the
date of agreement, the Company determines such date to be the measurement date and will record the estimated fair market value of the
instruments granted as a prepaid expense and amortize such amount to general and administrative expense in the accompanying statement
of operations over the contract period. When it is appropriate for the Company to recognize the cost of a transaction during financial
reporting periods prior to the measurement date, for purposes of recognition of costs during those periods, the equity instrument is
measured at the then-current fair values at each of those interim financial reporting dates.
Reclassifications
Certain
prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on
the reported results of operations. An adjustment has been made to the Consolidated Statements of Operations for fiscal year ended December
31, 2020, to reclass $391,906 of costs to research and development previously classified in general and administrative.
Concentrations,
Risks, and Uncertainties
Business
Risk
Substantial
business risks and uncertainties are inherent to an entity, including the potential risk of business failure.
The
Company is headquartered and operates in the United States. To date, the Company has generated no revenues from operations. There can
be no assurance that the Company will be able to raise additional capital and failure to do so would have a material adverse effect on
the Company’s financial position, results of operations and cash flows. Also, the success of the Company’s operations is
subject to numerous contingencies, some of which are beyond management’s control. Currently, these contingencies include general
economic conditions, price of components, competition, and governmental and political conditions.
Interest
Rate Risk
Financial
assets and liabilities do not have material interest rate risk.
Credit
Risk
The
Company is exposed to credit risk from its cash in banks. The credit risk on cash in banks is limited because the counterparties are
recognized financial institutions.
Seasonality
The
business is not subject to substantial seasonal fluctuations.
Major
Suppliers
Sigyn
Therapy is comprised of components that are supplied by various industry vendors. Additionally, the Company is reliant on third-party
organizations to conduct clinical development studies that are necessary to advance Sigyn Therapy toward the marketplace.
Should
the relationship with an industry vendor or third-party clinical development organization be interrupted or discontinued, it is believed
that alternate component suppliers and third-party clinical development organizations could be identified to support the continued advancement
of Sigyn Therapy.
Recent
Accounting Pronouncements
In
August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurements (Topic 820): Disclosure Framework—Changes to the Disclosure
Requirements for Fair Value Measurement. This standard removes, modifies, and adds certain disclosure requirements for fair value
measurements. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December
15, 2019, with early adoption permitted. The Company adopted ASU No. 2018-13 in the first quarter of fiscal 2020, coinciding with the
standard’s effective date, and had an immaterial impact from this standard.
In
August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):
Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. This standard
aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements
for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use
software license). The Company’s accounting for the service element of a hosting arrangement that is a service contract is not
affected by the proposed amendments and will continue to be expensed as incurred in accordance with existing guidance. This standard
does not expand on existing disclosure requirements except to require a description of the nature of hosting arrangements that are service
contracts. This standard is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15,
2019. Early adoption is permitted, including adoption in any interim period for which financial statements have not been issued. Entities
can choose to adopt the new guidance prospectively or retrospectively. The Company adopted the updated disclosure requirements of ASU
No. 2018-15 prospectively in the first quarter of fiscal 2020, coinciding with the standard’s effective date, and had an immaterial
impact from this standard.
In
December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes. This standard simplifies the accounting
for income taxes by removing certain exceptions to the general principles in ASC 740, Income Taxes, while also clarifying and
amending existing guidance, including interim-period accounting for enacted changes in tax law. This standard is effective for fiscal
years, and for interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The Company
adopted ASU No. 2019-12 in the first quarter of fiscal 2021, coinciding with the standard’s effective date, and had an immaterial
impact from this standard.
In
August 2020, the FASB issued ASU No. 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging
– Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s
Own Equity, which simplifies accounting for convertible instruments by removing major separation models required under current GAAP.
The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and
it also simplifies the diluted earnings per share calculation in certain areas. This ASU is effective for annual reporting periods beginning
after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal
years beginning after December 15, 2020. This update permits the use of either the modified retrospective or fully retrospective method
of transition. The Company is currently evaluating the impact this ASU will have on its consolidated financial statements and related
disclosures.
Other
recently issued accounting updates are not expected to have a material impact on the Company’s consolidated financial statements.
NOTE
4 – EQUIPMENT
PROPERTY
AND EQUIPMENT
Equipment
consisted of the following as of:
SCHEDULE OF PROPERTY AND EQUIPMENT
| | |
| |
December 31, | | |
December 31, | |
| | |
Estimated Life | |
2021 | | |
2020 | |
| | |
| |
| | |
| |
| Office equipment | |
5 years | |
$ | 28,181 | | |
$ | 1,787 | |
| Computer equipment | |
3 years | |
| 3,157 | | |
| 287 | |
| Accumulated depreciation | |
| |
| (3,292 | ) | |
| (346 | ) |
| | |
| |
$ | 28,046 | | |
$ | 1,728 | |
Depreciation
expense was $2,946 and $346 for the years ended December 31, 2021 and 2020, respectively, and is classified in general and administrative
expenses in the Consolidated Statements of Operations.
NOTE
5 – INTANGIBLE ASSETS
Intangible
assets consisted of the following as of:
SCHEDULE OF INTANGIBLE ASSETS
| | |
Estimated life | |
December 31, 2021 | | |
December 31, 2020 | |
| Trademarks | |
3 years | |
$ | - | | |
$ | 22,060 | |
| Website | |
3 years | |
| 10,799 | | |
| 10,799 | |
| Accumulated amortization | |
| |
| (5,099 | ) | |
| (10,954 | ) |
| | |
| |
$ | 5,700 | | |
$ | 21,905 | |
As
of December 31, 2021, estimated future amortization expenses related to intangible assets were as follows:
SCHEDULE OF ESTIMATED FUTURE AMORTIZATION EXPENSE RELATED TO INTANGIBLE ASSETS
| | |
Intangible Assets | |
| 2022 | |
$ | 3,600 | |
| 2023 | |
| 2,100 | |
| Total | |
$ | 5,700 | |
The
Company had amortization expense of $16,205 and $10,954 for the years ended December 31, 2021 and 2020, respectively.
On
January 8, 2020, James Joyce, the Company’s CEO and Craig Roberts, the Company’s COO, assigned to the Company the rights
to patent 62/881,740 pertaining to the devices, systems and methods for the broad-spectrum reduction of pro-inflammatory cytokines in
blood.
NOTE
6 – CONVERTIBLE PROMISSORY DEBENTURES
Convertible
notes payable consisted of the following:
SCHEDULE OF CONVERTIBLE NOTES PAYABLE
| | |
December 31, 2021 | | |
December 31, 2020 | |
| | |
| | |
| |
| Total convertible notes payable | |
| 700,816 | | |
| 616,500 | |
| January 28, 2020 ($457,380)
– 0%
interest per annum outstanding principal and interest due October
20, 2022 (“Note 1”) | |
$ | 457,380 | | |
$ | 385,000 | |
| June 23, 2020 ($60,500)
– 0%
interest per annum outstanding principal and interest due October
20, 2022 (“Note 2”) | |
| 60,500 | | |
| 50,000 | |
| September 17, 2020 ($199,650)
– 0%
interest per annum outstanding principal and interest due October
20, 2022. On October 28, 2021, Osher elected to convert $16,714
of the aggregate principal amount of the Note of $199,650,
into 42,857
common shares. (“Note 3”) | |
| 182,936 | | |
| 181,500 | |
| | |
| | | |
| | |
| Total convertible notes payable | |
| 700,816 | | |
| 616,500 | |
| Original issue discount | |
| (53,614 | ) | |
| (19,667 | ) |
| Debt discount | |
| - | | |
| (78,165 | ) |
| | |
| | | |
| | |
| Total convertible notes payable | |
$ | 647,202 | | |
$ | 518,668 | |
Changes
in convertible notes were as follows:
SCHEDULE OF CHANGES IN CONVERTIBLE NOTES
| | |
Note 1 | | |
Note 2 | | |
Note 3 | |
| Convertible notes payable as of January 1, 2021 | |
$ | 385,000 | | |
$ | 50,000 | | |
$ | 181,500 | |
| Extension of convertible note payable | |
| 72,380 | | |
| 10,500 | | |
| 18,150 | |
| Exchange of convertible note payable for common stock | |
| - | | |
| - | | |
| (16,714 | ) |
| Convertible notes payable, net, as of December 31, 2021 | |
| 457,380 | | |
| 60,500 | | |
| 182,936 | |
| Convertible
notes payable | |
| 457,380 | | |
| 60,500 | | |
| 182,936 | |
| | |
| | | |
| | | |
| | |
| Convertible notes payable issued in 2022 | |
| - | | |
| - | | |
| - | |
| Convertible notes payable as of June 30, 2022 | |
$ | 457,380 | | |
$ | 60,500 | | |
$ | 182,936 | |
| Convertible notes payable | |
$ | 457,380 | | |
$ | 60,500 | | |
$ | 182,936 | |
Changes
in note discounts were as follows:
SCHEDULE OF CHANGES IN NOTE DISCOUNTS
| | |
Note 1 | | |
Note 2 | | |
Note 3 | |
| Note discounts as of January 1, 2020 | |
$ | 73,418 | | |
$ | 5,830 | | |
$ | 18,584 | |
| Note discounts in conjunction with extension of convertible note | |
| 41,580 | | |
| 5,500 | | |
| 18,150 | |
| 2021 accretion of note discounts | |
| (80,822 | ) | |
| (6,809 | ) | |
| (21,817 | ) |
| Note discounts as of December 31, 2021 | |
| 34,176 | | |
| 4,521 | | |
| 14,917 | |
| Note discounts | |
| 34,176 | | |
| 4,521 | | |
| 14,917 | |
| | |
| | | |
| | | |
| | |
| Note discounts issued in conjunction with debt | |
| - | | |
| - | | |
| - | |
| 2022 accretion of note discounts | |
| (20,620 | ) | |
| (2,727 | ) | |
| (9,000 | ) |
| Note discounts as of June 30, 2022 | |
$ | 13,556 | | |
$ | 1,794 | | |
$ | 5,917 | |
| Note discounts | |
$ | 13,556 | | |
$ | 1,794 | | |
$ | 5,917 | |
| | |
| | | |
| | | |
| | |
| Convertible notes payable, net, as of December 31, 2021 | |
$ | 423,204 | | |
$ | 55,979 | | |
$ | 168,019 | |
| Convertible notes payable, net, as of June 30, 2022 | |
$ | 443,824 | | |
$ | 58,706 | | |
$ | 177,019 | |
| Convertible notes payable, current | |
$ | 443,824 | | |
$ | 58,706 | | |
$ | 177,019 | |
| | |
| | | |
| | | |
| | |
| 2021 Effective interest rate | |
| 11 | % | |
| 11 | % | |
| 12 | % |
| 2022 Effective interest rate | |
| 7 | % | |
| 7 | % | |
| 7 | % |
| Effective interest rate | |
| 7 | % | |
| 7 | % | |
| 7 | % |
Current
Noteholders
Osher
– $457,380
On
January 28, 2020 (the “Original Issue Date”), the Company entered into a Securities Purchase Agreement (the “Purchase
Agreement”) with respect to the sale and issuance to institutional investor Osher Capital
Partners LLC (“Osher”) of (i) $385,000 aggregate principal amount of Original Issue Discount Senior Convertible Debenture
due January 26, 2021, based on $1.00 for each $0.90909 paid by Osher and (ii) five-year Common Stock Purchase Warrants to purchase up
to an aggregate of 80,209 shares of the Company’s Common Stock at an exercise price of $7.00 per share. The aggregate cash subscription
amount received by the Company from Osher for the issuance of the note and warrants was $350,005 which was issued at a $34,995 original
issue discount from the face value of the Note. The conversion price for the principal in connection
with voluntary conversions by a holder of the convertible notes is $0.094 per share, as amended on October 20, 2020, subject to adjustment
as provided therein, such as stock splits and stock dividends.
The
Company and Osher amended the convertible debt agreement as follow on October 20, 2020:
| ● | The
parties amended the Warrants dated January 28, 2020, for the number of warrant shares from
80,209 warrant shares to 4,113,083 warrant shares at an exercise price of $0.14 per share. |
| ● | The
parties amended the Note to provide for interest at 8% per annum. |
| ● | The
parties amended the Note for the maturity date from June 23, 2021 to October 20, 2021. |
On
October 22, 2021, the Company and Osher amended convertible debt agreements as follows:
| |
● |
The
parties amended the October 20, 2020 Notes for the maturity date from October 20, 2021 to October 20, 2022. |
| |
● |
The
parties amended the October 20, 2020 Notes for the aggregate principal amount and accrued interest from $652,300 to $717,530 which
is issued at a $65,230 original issue discount from the face value of the October 20, 2020 Notes now due October 20, 2022. |
| |
● |
In
exchange for the extension of the Note, the Company issued Osher five-year warrants to purchase an aggregate of 450,000 shares of
the Company’s common stock at an exercise price of $1.00 per share. |
Osher
– $60,500 (as amended on October 20, 2020 to $55,000)
On
June 23, 2020 (the “Original Issue Date”), the Company entered into a Securities Purchase Agreement (the “Purchase
Agreement”) with respect to the sale and issuance to institutional investor Osher Capital
Partners LLC (“Osher”) of (i) $50,000 aggregate principal amount of Original Issue Discount Senior Convertible Debenture
(the “Note”) due June 23, 2021, based on $1.00 for each $0.90909 paid by Osher and (ii) five-year Common Stock Purchase Warrants
(“Warrants”) to purchase up to an aggregate of 10,000 shares of the Company’s Common Stock at an exercise price of
$30.00 per share. The aggregate cash subscription amount received by the Company from Osher for the issuance of the Note and Warrants
was $50,005 which was issued at a $0 original issue discount from the face value of the Note. The
conversion price for the principal in connection with voluntary conversions by a holder of the convertible notes is $0.39 per share,
as amended on October 20, 2020, subject to adjustment as provided therein, such as stock splits and stock dividends.
The
Company and Osher amended the convertible debt agreement as follow on October 20, 2020:
| ● | The
parties amended the Note for the aggregate principal amount from $50,000 to $55,000. The
aggregate cash subscription amount received by the Company from Osher for the issuance of
the Note and Warrants was $50,005 which was issued at an amended $4,995 original issue discount
from the face value of the Note. |
| ● | The
parties amended the Warrants dated June 23, 2020, for the number of warrant shares from 10,000
warrant shares to 141,020 warrant shares at an exercise price of $0.59 per share. |
| ● | The
parties amended the Note for the maturity date from June 23, 2021 to October 20, 2021. |
On
October 22, 2021, the Company and Osher amended convertible debt agreements as follows (see Note 12):
| |
● |
The
parties amended the October 20, 2020 Notes for the maturity date from October 20, 2021 to October 20, 2022. |
| |
● |
The
parties amended the October 20, 2020 Notes for the aggregate principal amount and accrued interest from $652,300 to $717,530 which
is issued at a $65,230 original issue discount from the face value of the October 20, 2020 Notes now due October 20, 2022. |
| |
● |
In
exchange for the extension of the Note, the Company issued Osher five-year warrants to purchase an aggregate of 450,000 shares of
the Company’s common stock at an exercise price of $1.00 per share. |
Osher
– $199,650
On
September 17, 2020 (the “Original Issue Date”), the Company entered into a Securities Purchase Agreement (the “Purchase
Agreement”) with respect to the sale and issuance to institutional investor Osher Capital
Partners LLC (“Osher”) of (i) $181,500 aggregate principal amount of Original Issue Discount Senior Convertible Debenture
(the “Note”) due September 30, 2021, based on $1.00 for each $0.90909 paid by Osher and (ii) five-year Common Stock Purchase
Warrants (“Warrants’) to purchase up to an aggregate of 8,250 shares of the Company’s Common Stock at an exercise price
of $30.00 per share. The aggregate cash subscription amount received by the Company from Osher for the issuance of the Note and Warrants
was $165,000 which was issued at a $16,500 original issue discount from the face value of the Note. The
conversion price for the principal in connection with voluntary conversions by a holder of the convertible notes is $0.39 per share,
as amended on October 20, 2020, subject to adjustment as provided therein, such as stock splits and stock dividends.
The
Company and Osher amended the convertible debt agreement as follow on October 20, 2020:
| ● | The
parties amended the Warrants dated September 17, 2020, for the number of warrant shares from
8,250 warrant shares to 465,366 warrant shares at an exercise price of $0.59 per share. |
| ● | The
parties amended the Note for the maturity date from September 30, 2021 to October 20, 2021. |
On
October 22, 2021, the Company and Osher amended convertible debt agreements as follows (see Note 12):
| |
● |
The
parties amended the October 20, 2020 Notes for the maturity date from October 20, 2021 to October 20, 2022. |
| |
● |
The
parties amended the October 20, 2020 Notes for the aggregate principal amount and accrued interest from $652,300 to $717,530 which
is issued at a $65,230 original issue discount from the face value of the October 20, 2020 Notes now due October 20, 2022. |
| |
● |
In
exchange for the extension of the Note, the Company issued Osher five-year warrants to purchase an aggregate of 450,000 shares of
the Company’s common stock at an exercise price of $1.00 per share. |
On
October 28, 2021, Osher elected to convert $16,714 of the aggregate principal amount of the Note of $199,650, into 42,857 common shares.
Previous
Noteholders
Previous
Noteholder – $50,000 (as amended on October 20, 2020 to $55,000)
On
June 23, 2020 (the “Original Issue Date”), the Company entered into a Securities Purchase Agreement (the “Purchase
Agreement”) with respect to the sale and issuance to a previous noteholder of (i)
$50,000 aggregate principal amount of Original Issue Discount Senior Convertible Debenture (the “Note”) due June 23, 2021, based on $1.00 for each $0.90909 paid by the previous noteholder and (ii) five-year
Common Stock Purchase Warrants (“Warrants’) to purchase up to an aggregate of 10,000
shares of the Company’s Common Stock at an exercise price of $30.00
per share. The aggregate cash subscription amount received by the Company from the previous noteholder for the issuance of the Note
and Warrants was $50,000
which was issued at a $0
original issue discount from the face value of the Note. The conversion price for the
principal in connection with voluntary conversions by a holder of the convertible notes is $0.39
per share, as amended on October 20, 2020, subject to adjustment as provided therein, such as stock splits and stock
dividends.
The
Company and the previous noteholder amended the convertible debt agreement as follows on October 20, 2020:
| ● | The
parties amended the Note for the aggregate principal amount from $50,000 to $55,000. The
aggregate cash subscription amount received by the Company from the previous noteholder for
the issuance of the Note and Warrants was $50,000 which was issued at an amended $5,000 original
issue discount from the face value of the Note. |
| ● | The
parties amended the Warrants dated June 23, 2020, for the number of warrant shares from 10,000
warrant shares to 141,020 warrant shares at an exercise price of $0.59 per share. |
| ● | The
parties amended the Note for the maturity date from June 23, 2021 to October 20, 2021. |
On
December 2, 2020, the previous noteholder elected to convert the aggregate principal amount of the Note, $55,000, into 141,020 common
shares.
Previous
Noteholder - $25,000 (as amended on October 20, 2020 to $27,500)
On
August 18, 2020 (the “Original Issue Date”), the Company entered into a Securities Purchase Agreement (the “Purchase
Agreement”) with respect to the sale and issuance to a previous noteholder of (i) $25,000 aggregate principal amount of Original
Issue Discount Senior Convertible Debenture (the “Note”) due August 18, 2021, based on $1.00 for each $0.90909 paid by the
previous noteholder and (ii) five-year Common Stock Purchase Warrants (“Warrants’) to purchase up to an aggregate of 5,000
shares of the Company’s Common Stock at an exercise price of $30.00 per share. The aggregate cash subscription amount received
by the Company from the previous noteholder for the issuance of the Note and Warrants was $25,000 which was issued at a $0 original issue
discount from the face value of the Note. The conversion price for the principal in connection
with voluntary conversions by a holder of the convertible notes is $0.39 per share, as amended on October 20, 2020, subject to adjustment
as provided therein, such as stock splits and stock dividends.
The
Company and the previous noteholder amended the convertible debt agreement as follows on October 20, 2020:
| ● | The
parties amended the Note for the aggregate principal amount from $25,000 to $27,500. The
aggregate cash subscription amount received by the Company from the previous noteholder for
the issuance of the Note and Warrants was $25,000 which was issued at an amended $2,500 original
issue discount from the face value of the Note. |
| ● | The
parties amended the Warrants dated August 18, 2020, for the number of warrant shares from
5,000 warrant shares to 70,510 warrant shares at an exercise price of $0.59 per share. |
| ● | The
parties amended the Note for the maturity date from August 18, 2021 to October 20, 2021. |
On
October 28, 2020, the previous noteholder elected to convert the aggregate principal amount of the Note, $27,500, into 70,510 common
shares.
On
February 19, 2021, the previous noteholder exercised the warrants pursuant to the cashless exercise provision of the warrant agreement
into 57,147 common shares. The common shares have not been issued as of March 14, 2022.
Previous
Noteholder – $93,500
On
September 18, 2020 (the “Original Issue Date”), the Company entered into a Securities Purchase Agreement (the “Purchase
Agreement”) with respect to the sale and issuance to a previous noteholder of (i) $93,500 aggregate principal amount of Original
Issue Discount Senior Convertible Debenture (the “Note”) due September 30, 2021, based on $1.00 for each $0.90909 paid by
the previous noteholder and (ii) five-year Common Stock Purchase Warrants (“Warrants’) to purchase up to an aggregate of
4,250 shares of the Company’s Common Stock at an exercise price of $30.00 per share. The aggregate cash subscription amount received
by the Company from the previous noteholder for the issuance of the Note and Warrants was $85,000 which was issued at a $8,500 original
issue discount from the face value of the Note. The conversion price for the principal in connection
with voluntary conversions by a holder of the convertible notes is $0.39 per share, as amended on October 20, 2020, subject to adjustment
as provided therein, such as stock splits and stock dividends.
The
Company and the previous noteholder amended the convertible debt agreement as follows on October 20, 2020:
| ● | The
parties amended the Warrants dated September 18, 2020, for the number of warrant shares from
4,250 warrant shares to 239,734 warrant shares at an exercise price of $0.59 per share. |
| ● | The
parties amended the Note for the maturity date from September 30, 2021 to October 20, 2021. |
On
December 2, 2020, the previous noteholder elected to convert the aggregate principal amount of the Note, $93,500, into 239,734 common
shares.
Previous
Noteholder - $165,000
On
September 21, 2020 (the “Original Issue Date”), the Company entered into a Securities Purchase Agreement (the “Purchase
Agreement”) with respect to the sale and issuance to a previous noteholder of (i) $165,000 aggregate principal amount of Original
Issue Discount Senior Convertible Debenture (the “Note”) due September 30, 2021, based on $1.00 for each $0.90909 paid by
the previous noteholder and (ii) five-year Common Stock Purchase Warrants (“Warrants’) to purchase up to an aggregate of
7,500 shares of the Company’s Common Stock at an exercise price of $30.00 per share. The aggregate cash subscription amount received
by the Company from the previous noteholder for the issuance of the Note and Warrants was $150,000 which was issued at a $15,000 original
issue discount from the face value of the Note. The conversion price for the principal in connection
with voluntary conversions by a holder of the convertible notes is $0.39 per share, as amended on October 20, 2020, subject to adjustment
as provided therein, such as stock splits and stock dividends.
The
Company and the previous noteholder amended the convertible debt agreement as follow on October 20, 2020:
| ● | The
parties amended the number of shares from the Warrants dated September 21, 2020, for the
number of warrant shares from 7,500 warrant shares to 423,060 warrant shares at an exercise
price of $0.59 per share. |
| ● | The
parties amended the Note for the maturity date from September 30, 2021 to October 20, 2021. |
On
November 5, 2020, the previous noteholder elected to convert the aggregate principal amount of the Note, $165,000, into 423,060 common
shares.
Previous
Noteholder – $27,500 (as amended on October 20, 2020 to $22,000)
On
September 28, 2020 (the “Original Issue Date”), the Company entered into a Securities Purchase Agreement (the “Purchase
Agreement”) with respect to the sale and issuance to a previous noteholder of (i) $27,500 aggregate principal amount of Original
Issue Discount Senior Convertible Debenture (the “Note”) due August 28, 2021, based on $1.00 for each $0.90909 paid by the
previous noteholder and (ii) five-year Common Stock Purchase Warrants (“Warrants’) to purchase up to an aggregate of 1,000
shares of the Company’s Common Stock at an exercise price of $30.00 per share. The aggregate cash subscription amount received
by the Company from the previous noteholder for the issuance of the Note and Warrants was $20,000 which was issued at a $7,500 original
issue discount from the face value of the Note. The conversion price for the principal in connection
with voluntary conversions by a holder of the convertible notes is $0.39 per share, as amended on October 20, 2020, subject to adjustment
as provided therein, such as stock splits and stock dividends.
The
Company and the previous noteholder amended the convertible debt agreement as follows on October 20, 2020:
| ● | The
parties amended the Note for the aggregate principal amount from $27,500 to $22,000. The
aggregate cash subscription amount received by the Company from the previous noteholder for
the issuance of the Note and Warrants was $20,000 which was issued at an amended $2,000 original
issue discount from the face value of the Note. |
| ● | The
parties amended the Warrants dated September 28, 2020, for the number of warrant shares from
1,000 warrant shares to 56,408 warrant shares at an exercise price of $0.59 per share. |
| ● | The
parties amended the Note for the maturity date from August 18, 2021 to October 20, 2021. |
On
October 27, 2020, the previous noteholder elected to convert the aggregate principal amount of the Note, $22,000, into 56,408 common
shares.
Previous
Noteholder – $33,000
On
September 29, 2020 (the “Original Issue Date”), the Company entered into a Securities Purchase Agreement (the “Purchase
Agreement”) with respect to the sale and issuance to a previous noteholder of (i) $33,000 aggregate principal amount of Original
Issue Discount Senior Convertible Debenture (the “Note”) due August 18, 2021, based on $1.00 for each $0.90909 paid by the
previous noteholder and (ii) five-year Common Stock Purchase Warrants (“Warrants’) to purchase up to an aggregate of 1,500
shares of the Company’s Common Stock at an exercise price of $30.00 per share. The aggregate cash subscription amount received
by the Company from the previous noteholder for the issuance of the Note and Warrants was $30,000 which was issued at a $3,000 original
issue discount from the face value of the Note. The conversion price for the principal in connection
with voluntary conversions by a holder of the convertible notes is $0.39 per share, as amended on October 20, 2020, subject to adjustment
as provided therein, such as stock splits and stock dividends.
The
Company and the previous noteholder amended the convertible debt agreement as follows on October 20, 2020:
| ● | The
parties amended the Warrants dated September 29, 2020, for the number of warrant shares from
1,500 warrant shares to 84,612 warrant shares at an exercise price of $0.59 per share. |
| ● | The
parties amended the Note for the maturity date from August 18, 2021 to October 20, 2021. |
On
October 26, 2020, the previous noteholder elected to convert the aggregate principal amount of the Note, $33,000, into 84,612 common
shares.
Previous
Noteholder – $110,000
On
February 10, 2021, the Company entered into an Original Issue Discount Senior Convertible Debenture (the “Note”) with respect
to the sale and issuance to a previous noteholder of (i) $110,000 aggregate principal amount of Note due February 11, 2022 based on $1.00
for each $0.90909 paid by the previous noteholder and (ii) five-year Common Stock Purchase Warrants (“Warrants’) to purchase
up to an aggregate of 157,143 shares of the Company’s Common Stock at an exercise price of $1.20 per share. The aggregate cash
subscription amount received by the Company from the previous noteholder for the issuance of the Note and Warrants was $100,000 which
was issued at a $10,000 original issue discount from the face value of the Note. The conversion
price for the principal in connection with voluntary conversions by a holder of the convertible notes is $0.70 per share, subject to
adjustment as provided therein, such as stock splits and stock dividends.
On
May 10, 2021, the previous noteholder elected to convert the aggregate principal amount of a $110,000 convertible note issued on February
10, 2021 into 157,143 shares of the Company’s common stock.
Previous
Noteholder – $55,000
On
May 4, 2021, the Company repaid the aggregate principal amount of a $55,000 convertible debenture that was entered into on April 7, 2021
with a previous noteholder. The note was a 10% Original Issue Discount Senior Convertible Debenture (the “Note”) which included
a five-year Common Stock Purchase Warrant (“Warrants’) to purchase up to an aggregate of 71,429 shares of the Company’s
Common Stock at an exercise price of $1.20 per share. The aggregate cash subscription amount received by the Company from the previous
noteholder for the issuance of the Note and Warrants was $50,000 which was issued at a $5,000 original issue discount from the face value
of the Note.
Previous
Noteholder – $110,000
On
February 10, 2021, the Company entered into an Original Issue Discount Senior Convertible Debenture (the “Note”) with respect
to the sale and issuance to a previous noteholder of (i) $110,000 aggregate principal amount of Note due February 11, 2022 based on $1.00
for each $0.90909 paid by the previous noteholder and (ii) five-year Common Stock Purchase Warrants (“Warrants’) to purchase
up to an aggregate of 157,143 shares of the Company’s Common Stock at an exercise price of $1.20 per share. The aggregate cash
subscription amount received by the Company from the previous noteholder for the issuance of the Note and Warrants was $100,000 which
was issued at a $10,000 original issue discount from the face value of the Note. The conversion
price for the principal in connection with voluntary conversions by a holder of the convertible notes is $0.70 per share, subject to
adjustment as provided therein, such as stock splits and stock dividends.
On
October 25, 2021, the previous noteholder elected to convert the aggregate principal amount of the Note, $110,000, into 157,143 common
shares.
NOTE
7 – STOCKHOLDERS’ EQUITY
STOCKHOLDERS’ DEFICIT
The
Company has authorized 1,000,000,000 shares of par value $0.0001 common stock, of which 37,295,803 shares are outstanding at December
31, 2021.
Common
Stock
On
October 28, 2021, Osher elected to convert $16,714 of the aggregate principal amount of the Note of $199,650, into 42,857 common shares.
On
October 25, 2021, Osher elected to convert the aggregate principal amount of the Note, $110,000, into 157,143 common shares.
On
October 20, 2021, the entered into a securities purchase agreement with an accredited investor that resulted in the issuance of 320,000
shares of common stock and warrants to purchase an aggregate of 320,000
shares of the Company’s common stock for total proceeds totaling $400,000. The
offering allowed for qualified investors to purchase one share of the Company’s common stock at $1.25. For each share
purchased, the investor received a five-year warrant to purchase one share of common stock at $1.25 per share. No commissions were
paid in the offering. This issuance was pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, in a transaction
exempt from registration.
On
October 14, 2021, the Company issued a total of 47,000 shares of its common stock valued at $37,600 (based on the stock price of the
Company’s common stock on the date of issuance) to a third party, for communications to the financial industry.
On
July 14, 2021, the Company issued a total of 47,000 shares of its common stock valued at $47,000 (based on the stock price of the Company’s
common stock on the date of issuance) to a third party, for communications to the financial industry.
On
May 10, 2021, Brio Capital elected to convert the aggregate principal amount of a $110,000 convertible note issued on February 10, 2021
into 157,143 shares of the Company’s common stock.
In
April 2021, the Company initiated an offering of up to $1.5 million of the Company’s restricted common shares. The offering allowed
for qualified investors to purchase one share of the Company’s common stock $1.25. For each share purchased, the investor received
a five-year warrant to purchase one share of common stock at $1.75 per share. On May 10, 2021, the Company closed the offering to investors
and subsequently disclosed that it had entered into securities purchase agreements with accredited investors that resulted in the issuance
of 1,172,000 shares of common stock and warrants to purchase an aggregate of 1,172,000 shares of the Company’s common stock for
total proceeds totaling $1,465,000. No commissions were paid in the offering. This issuance was pursuant to Section 4(a)(2) of the Securities
Act of 1933, as amended, in a transaction exempt from registration.
On
April 14, 2021, the Company issued a total of 47,000 shares of its restricted common stock valued at $82,250 (based on the stock price
of the Company’s common stock on the date of issuance) to a third party, for communications to the financial industry. This issuance
was pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, in a transaction exempt from registration.
On
February 19, 2021, a previous noteholder exercised the warrants pursuant to the cashless exercise provision of the warrant agreement
into 57,147 common shares. The common shares have not been issued as of March 14, 2022.
On
January 14, 2021, the Company issued a total of 47,000 shares of its restricted common stock valued at $82,250 (based on the stock price
of the Company’s common stock on the date of issuance) to a third party, for communications to the financial industry. This issuance
was pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, in a transaction exempt from registration.
During
the year ended December 31, 2020, the Company issued 1,015,344 common shares to third parties in conjunction with the exchange of convertible
promissory debentures.
On
October 19, 2020, the Company issued 33,686,169 common shares in conjunction with acquisition.
Warrants
On
October 22, 2021, the Company and Osher amended convertible debt agreements for the maturity date from October 20, 2021 to October 20,
2022. In exchange for the extension of the Note, the Company issued Osher 450,000 warrants to purchase an aggregate of 450,000 shares
of the Company’s common stock, valued at $197,501 (based on the Black Scholes valuation model on the date of grant) (see Note 6).
The warrants are exercisable for a period of five years at $1.00 per share in whole or in part, as either a cash exercise or as a cashless
exercise, and fully vest at grant date. The Company is amortizing the value of the warrants ratably through October 20, 2022. The Company
recorded $40,041 and $0 for the years ended December 31, 2021 and 2020, respectively, and is classified in other expenses in the consolidated
Statements of Operations.
NOTE
8 – OPERATING LEASES
On
May 27, 2021, the Company entered into a sixty-three month lease for its corporate office at $5,955 per month commencing June 15, 2021
maturing September 30, 2026. The Company accounts for this lease in accordance with ASC 842. Adoption
of the standard resulted in the initial recognition of operating lease ROU asset of $290,827 and
operating lease liability of $290,827 as of June 15, 2021.
Operating
lease right-of-use (“ROU”) assets and liabilities are recognized at commencement date based on the present value of lease
payments over the lease term. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent
our obligation to make lease payments arising from the lease. Generally, the implicit rate of interest in arrangements is not readily
determinable and the Company utilizes its incremental borrowing rate in determining the present value of lease payments. The Company’s
incremental borrowing rate is a hypothetical rate based on its understanding of what its credit rating would be. The operating lease
ROU asset includes any lease payments made and excludes lease incentives. Our variable lease payments primarily consist of maintenance
and other operating expenses from our real estate leases. Variable lease payments are excluded from the ROU assets and lease liabilities
and are recognized in the period in which the obligation for those payments is incurred. Our lease terms may include options to extend
or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for minimum lease payments is recognized
on a straight-line basis over the lease term.
We
have lease agreements with lease and non-lease components. We have elected to account for these lease and non-lease components as a single
lease component. We are also electing not to apply the recognition requirements to short-term leases of twelve months or less and instead
will recognize lease payments as expense on a straight-line basis over the lease term.
The
components of lease expense and supplemental cash flow information related to leases for the period are as follows:
In
accordance with ASC 842, the components of lease expense were as follows:
SCHEDULE OF OPERATING LEASE COST AND SUPPLEMENTAL CASH FLOW INFORMATION
| | |
Years ended December 31, | |
| | |
| | |
| |
| | |
2021 | | |
2020 | |
| Operating lease expense | |
$ | 41,811 | | |
$ | - | |
| Short term lease cost | |
$ | - | | |
$ | - | |
| Total lease expense | |
$ | 41,811 | | |
$ | - | |
In
accordance with ASC 842, other information related to leases was as follows:
| Years ended December 31, | |
2021 | | |
2020 | |
| Operating cash flows from operating leases | |
$ | 17,866 | | |
$ | - | |
| Cash paid for amounts included in the measurement of lease liabilities | |
$ | 17,866 | | |
$ | - | |
| | |
| | | |
| | |
| Weighted-average remaining lease term—operating leases | |
| 4.67 years | | |
| - | |
| Weighted-average discount rate—operating leases | |
| 10 | % | |
| - | |
In
accordance with ASC 842, maturities of operating lease liabilities as of December 31, 2021 were as follows:
SCHEDULE OF MATURITIES OF OPERATING LEASE LIABILITIES
| | |
Operating | |
| Year ending: | |
Lease | |
| 2022 | |
$ | 72,714 | |
| 2023 | |
| 74,895 | |
| 2024 | |
| 77,142 | |
| 2025 | |
| 79,456 | |
| 2026 | |
| 54,225 | |
| Total undiscounted cash flows | |
$ | 358,431 | |
| | |
| | |
| Reconciliation of lease liabilities: | |
| | |
| Weighted-average remaining lease terms | |
| 4.67 years | |
| Weighted-average discount rate | |
| 10 | % |
| Present values | |
$ | 286,716 | |
| | |
| | |
| Lease liabilities—current | |
| 46,091 | |
| Lease liabilities—long-term | |
| 240,625 | |
| Lease liabilities—total | |
$ | 286,716 | |
| | |
| | |
| Difference between undiscounted and discounted cash flows | |
$ | 71,715 | |
Operating
lease cost was $41,811 and $0 for the years ended December 31, 2021 and 2020, respectively.
NOTE
9 – RELATED PARTY TRANSACTIONS
Other
than as set forth below, and as disclosed in Notes 5 and 7, there have not been any transaction entered into or been a participant in
which a related person had or will have a direct or indirect material interest.
Employment
Agreements
Mr.
Joyce receives an annual base salary of $455,000, plus bonus compensation not to exceed 50% of salary. Mr. Joyce’s employment also
provides for medical insurance, disability benefits and one year of severance pay if his employment is terminated without cause or due
to a change in control. Additionally, the Company has agreed to maintain a beneficial ownership target of 9% for Mr. Joyce. Mr. Joyce’s
compensation was approved by the Reign Resources Corporation Board of Directors on October 6, 2020 and was among conditions of the Share
Exchange Agreement that was completed with Sigyn Therapeutics, Inc. on October 19, 2020. The Company incurred compensation expense of $496,125
(including $18,542 of 2020 payroll paid in 2021) and $418,842, and employee benefits of $31,126 and $22,516, for the years ended December
31, 2021 and 2020, respectively.
Sigyn
had no employment agreement with its CTO but still incurred compensation on behalf of the CTO. The Company incurred compensation expense
of $259,000 and $233,981, and employee benefits of $21,704 and $22,024, for the years ended December 31, 2021 and 2020, respectively.
Bonus
On
July 21, 2021, as a result of achieving certain milestones, the Board of Directors agreed to pay each of the Company’s CEO and
CTO a performance bonus equal to 5% of their annual salary totaling $34,750.
NOTE
10 – INCOME TAXES
At
December 31, 2021, net operating loss carry forwards for Federal and state income tax purposes totaling approximately $1,408,000 available
to reduce future income which under the Tax Cuts and Jobs Act of 2018, allows for an indefinite carryforward period, with carryforwards
limited to 80% of each subsequent year’s net income. There is no income tax affect due to the recognition of a full valuation allowance
on the expected tax benefits of future loss carry forwards based on uncertainty surrounding realization of such assets.
A
reconciliation of the statutory income tax rates and the effective tax rate is as follows:
SCHEDULE
OF RECONCILIATION OF STATUTORY INCOME TAX RATES AND EFFECTIVE TAX RATE
| | |
December
31, | |
| | |
2021 | | |
2020 | |
| | |
| | |
| |
| Statutory
U.S. federal rate | |
| 21.0 | % | |
| 21.0 | % |
| State
income tax, net of federal benefit | |
| 7.0 | % | |
| 7.0 | % |
| Permanent
differences | |
| 0.0 | % | |
| 0.0 | % |
| Valuation
allowance | |
| (28.0 | )% | |
| (28.0 | )% |
| | |
| | | |
| | |
| Provision
for income taxes | |
| 0.0 | % | |
| 0.0 | % |
The
tax effects of the temporary differences and carry forwards that give rise to deferred tax assets consist of the following:
SCHEDULE
OF DEFERRED TAX ASSETS
| | |
| | |
| |
| | |
December 31, | |
| | |
2021 | | |
2020 | |
| | |
| | |
| |
| Deferred tax assets: | |
| | | |
| | |
| Net operating loss carry forwards | |
$ | 1,073,527 | | |
$ | 352,912 | |
| Valuation allowance | |
| (1,073,527 | ) | |
| (352,912 | ) |
| | |
| | | |
| | |
| Total | |
$ | - | | |
$ | - | |
Major
tax jurisdictions are the United States and California. All of the tax years will remain open three and four years for examination by
the Federal and state tax authorities, respectively, from the date of utilization of the net operating loss. There are no tax audits
pending.
NOTE
11 – EARNINGS PER SHARE
FASB
ASC Topic 260, Earnings Per Share, requires a reconciliation of the numerator and denominator of the basic and diluted earnings
(loss) per share (EPS) computations.
Basic
earnings (loss) per share are computed by dividing net earnings available to common shareholders by the weighted-average number of common
shares outstanding during the period. Diluted earnings (loss) per share is computed similar to basic earnings per share except that the
denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares
had been issued and if the additional common shares were dilutive. In periods where losses are reported, the weighted-average number
of common stock outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive.
Basic
and diluted earnings (loss) per share are the same since net losses for all periods presented and including the additional potential
common shares would have an anti-dilutive effect.
The
following table sets forth the computation of basic and diluted net income per share:
SCHEDULE OF COMPUTATION OF BASIC AND DILUTED NET INCOME PER SHARE
| | |
Years Ended December 31, | |
| | |
2021 | | |
2020 | |
| | |
| | |
| |
| Net loss attributable to the common stockholders | |
$ | (3,004,619 | ) | |
$ | (1,259,590 | ) |
| | |
| | | |
| | |
| Basic weighted average outstanding shares of common stock | |
| 36,396,585 | | |
| 7,351,272 | |
| Dilutive effect of options and warrants | |
| - | | |
| - | |
| Diluted weighted average common stock and common stock equivalents | |
| 36,396,585 | | |
| 7,351,272 | |
| | |
| | | |
| | |
| Loss per share: | |
| | | |
| | |
| Basic and diluted | |
$ | (0.08 | ) | |
$ | (0.17 | ) |
NOTE
12 – COMMITMENTS AND CONTINGENCIES
Legal
From
time to time, various lawsuits and legal proceedings may arise in the ordinary course of business. However, litigation is subject to
inherent uncertainties and an adverse result in these or other matters may arise from time to time that may harm our business. We are
currently not aware of any legal proceedings or claims that it believes will have a material adverse effect on its business, financial
condition or operating results.
NOTE
13 – SUBSEQUENT EVENTS
The
Company evaluated all events or transactions that occurred after December 31, 2020 up through the date the financial statements were
available to be issued. During this period, the Company did not have any material recognizable subsequent events required to be disclosed
as of and for the period ended December 31, 2020 except for the following:
Mr.
Ferrell was hired March 9, 2022 as the Company’s Chief Financial Officer. Mr. Ferrell receives an annual base salary of $250,000,
plus discretionary bonus compensation not to exceed 40% of salary. Mr. Ferrell’s employment also provides for medical insurance,
disability benefits and three months of severance pay if his employment is terminated without cause or due to a change in control. Additionally,
Mr. Ferrell will be granted up to 600,000 options to purchase 600,000 of the Company’s common shares upon the implementation of
a Company employee option plan.
Convertible
Promissory Debentures
Osher
– $110,000
On
March 23, 2022, the Company entered into an Original Issue Discount Senior Convertible Debenture (the “Note”) with respect
to the sale and issuance to institutional investor Osher Capital Partners LLC (“Osher”) of (i) $110,000 aggregate principal
amount of Note due March 23, 2023 based on $1.00 for each $0.90909 paid by the previous noteholder and (ii) five-year Common Stock Purchase
Warrants (“Warrants’) to purchase up to an aggregate of 220,000 shares of the Company’s Common Stock at an exercise
price of $0.50 per share. The aggregate cash subscription amount received by the Company from the previous noteholder for the issuance
of the Note and Warrants was $100,000 which was issued at a $10,000 original issue discount from the face value of the Note. The conversion
price for the principal in connection with voluntary conversions by a holder of the convertible notes is $0.50 per share, subject to
adjustment as provided therein, such as stock splits and stock dividends.
Brio
– $110,000
On
March 23, 2022, the Company entered into an Original Issue Discount Senior Convertible Debenture (the “Note”) with respect
to the sale and issuance to institutional investor Brio Capital Master Fund Ltd. (“Brio”) of (i) $110,000 aggregate principal
amount of Note due March 23, 2023 based on $1.00 for each $0.90909 paid by the previous noteholder and (ii) five-year Common Stock Purchase
Warrants (“Warrants’) to purchase up to an aggregate of 220,000 shares of the Company’s Common Stock at an exercise
price of $0.50 per share. The aggregate cash subscription amount received by the Company from the previous noteholder for the issuance
of the Note and Warrants was $100,000 which was issued at a $10,000 original issue discount from the face value of the Note. The conversion
price for the principal in connection with voluntary conversions by a holder of the convertible notes is $0.50 per share, subject to
adjustment as provided therein, such as stock splits and stock dividends.
PART
1. FINANCIAL INFORMATION
ITEM
1. FINANCIAL STATEMENTS
SIGYN
THERAPEUTICS, INC.
UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS
See
accompanying notes to unaudited condensed consolidated financial statements.
SIGYN
THERAPEUTICS, INC.
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
See
accompanying notes to unaudited condensed consolidated financial statements.
SIGYN
THERAPEUTICS, INC.
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
See
accompanying notes to unaudited condensed consolidated financial statements.
SIGYN
THERAPEUTICS, INC.
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
See
accompanying notes to unaudited condensed consolidated financial statements.
SIGYN
THERAPEUTICS, INC.
NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE
1 – ORGANIZATION AND PRINCIPAL ACTIVITIES
Corporate
History and Background
Sigyn
Therapeutics, Inc. (“Sigyn” or the “Company”) is a development-stage medical technology company headquartered
in San Diego, California. We are focused on creating therapeutic solutions that address unmet needs in global health.
We
are developing Sigyn Therapy™ as a
candidate to treat life-threatening infections and inflammatory disorders for which effective drug therapies are not available.
We designed Sigyn Therapy to reduce the circulating presence of pathogen sources of life-threatening
inflammation in concert with dampening down the dysregulated overproduction of inflammatory cytokines (the cytokine storm), which plays
a prominent role in each of our candidate treatment indications.
We
are advancing Sigyn Therapy as a candidate to treat end-stage renal disease (ESRD) patients with
chronic inflammation and/or endotoxemia, pathogen-associated sepsis (leading cause of hospital deaths), community acquired pneumonia
(a leading cause of death among infectious diseases), and emerging pandemic threats.
Since
initiating the development of Sigyn Therapy in 2020, we completed pre-clinical in vitro studies that quantified the
reduction of pathogen sources of inflammation from human blood plasma with small-scale versions of Sigyn Therapy. These
include endotoxin (a gram-negative bacterial toxin), peptidoglycan and lipoteichoic acid (gram-positive bacterial toxins), and viral
pathogens, including COVID-19.
We
also completed in vitro studies that quantified the reduction of inflammatory cytokines from human blood plasma
with small-scale versions of Sigyn Therapy. These include interleukin-1 beta (IL-1b), interleukin-6 (IL-6), and tumor necrosis
factor alpha (TNF-a). In a related study, liposomes were reduced from human blood plasma as a model system to evaluate
the potential of Sigyn Therapy to target CytoVesicles that transport inflammatory cytokine cargos throughout the bloodstream.
In
vitro studies
also quantified the reduction of hepatic (liver) toxins from human blood plasma with small-scale versions of Sigyn Therapy.
These included ammonia, bile acid and bilirubin. Based on these outcomes, we may further investigate the potential of Sigyn Therapy
to treat acute forms of liver failure in future studies.
Each
of our in vitro studies were conducted by Innovative Biotherapies, based in Ann Arbor, Michigan. With the exception of the liposome
data results, the studies quantified the reduction of each target from human blood plasma with small-scale versions of Sigyn Therapy.
Each of these studies were conducted for a period of four hours. In the liposome study, the formulation of adsorbent components that
we incorporate within Sigyn Therapy was quantified to reduce the presence of liposomes from human blood plasma in a test-tube rocker
study conducted for a period of two hours. While we maintain ownership of our in vitro study results, we do provide rights to
researchers at Innovative Biotherapies to publish our study results.
Subsequent
to our in vitro study results, we completed in vivo animal studies of Sigyn Therapy at the University of Michigan. In
these studies, Sigyn Therapy was administered via standard dialysis machines utilizing conventional blood-tubing sets, for periods up
to six hours in eight porcine (pig) subjects. Important criteria for treatment feasibility, including hemodynamic parameters,
serum chemistries and hematologic measurements, were stable across all eight subjects. While we maintain ownership of our in vivo
animal study data, we do provide rights to researchers at the University of Michigan to publish the results of our animal studies.
The
data resulting from our in vivo and in vitro studies is being incorporated into an Investigational Device Exemption (IDE) that
we are drafting for submission to the U.S. Food and Drug Administration (“FDA”) to support the potential initiation of human
feasibility studies in the United States.
Candidate
Pipeline Product
Beyond
our focus to clinically advance Sigyn Therapy, we intend to develop a pipeline of extracorporeal blood purification therapies. In this
regard, we have designed a therapeutic system to enhance the benefit of cancer chemotherapy. To support this endeavor, we disclosed on
October 6, 2022, that a patent application entitled: “SYSTEM AND METHODS
TO ENHANCE CHEMOTHERAPY DELIVERY AND REDUCE TOXICITY” had been filed with the United
States Patent and Trademark Office (“USPTO”). On October 13, 2022, we subsequently disclosed that trademark applications
to register ChemoPrepTM and ChemoPureTM were filed with the USPTO”.
Chemotherapeutic
agents are the most commonly administered drugs to treat cancer, which is the second leading cause of death in the United States. Despite
therapeutic advances, treatment toxicity, drug resistance and inadequate tumor site delivery restrict the benefit of chemotherapy.
To
overcome these challenges, our patent submission describes a therapeutic device system whose primary objective is to enhance tumor site
delivery of chemotherapy and reduce its toxicity. A secondary objective of the system is to reduce treatment dosing without sacrificing
patient benefit, or conversely increase chemotherapy dosing without added toxicity. In concert with these objectives, our candidate
therapeutic system offers to inhibit the spread of cancer metastasis that are reported to be induced by the administration
of chemotherapy.
Our
proposed chemotherapy enhancement system is comprised of two blood purification technologies. ChemoPrepTM, administered prior
to chemotherapy as a means to optimize tumor site delivery and improve the benefit of ChemoPureTM, which is deployed
post-chemotherapy to reduce treatment toxicity and inhibit the potential spread of cancer metastasis.
To
improve the delivery of chemotherapeutic agents, we designed ChemoPrepTM with an objective to reduce the bloodstream presence
of tumor-derived extracellular vesicles or exosomes (Tumor-EXs) that diminish the efficacy of chemotherapy. As compared to non-cancer
subjects, Tumor-EXs are highly concentrated in the bloodstream of those suffering from cancer. Tumor-EXs are known to decoy and
directly inhibit chemotherapeutic agents from reaching tumor cell targets. Recent studies have also revealed that Tumor-EXs can export
chemotherapeutic agents out of cancer cells. Based on these factors, we believe the pre-chemo depletion of circulating Tumor-EXs could
establish a novel, yet practical strategy to increase tumor-site saturation of chemotherapy, which in turn may permit for lower doses
of chemotherapy to be administered without diminishing patient benefit.
ChemoPrepTM
may also improve the performance of ChemoPureTM as a reduced bloodstream presence of Tumor-EXs, which are competitive
binding and adsorption factors, would likely increase the efficiency of ChemoPureTM to reduce the circulating presence of
chemotherapeutic agents that are not delivered to the target tumor site.
We
designed ChemoPureTM to perform two critical functions after chemotherapy administration. To reduce treatment toxicity through
the extraction of bloodstream chemotherapeutic agents that are not delivered to the target tumor site, and to reduce the circulating
presence of chemotherapy-induced Tumor-EXs that promote the spread of cancer metastases.
Unlike
Sigyn TherapyTM, which is a candidate to treat life-threatening conditions not addressed with approved drug therapies, the
intent of the ChemoPrepTM and ChemoPureTM is to enhance the delivery of market-cleared chemotherapeutic drugs and
reduce their toxicity. Additionally, while Sigyn TherapyTM is a hollow-fiber based device designed for use on dialysis and
continuous renal replacement machines, ChemoPrepTM and ChemoPureTM do not contain hollow-fibers and are intended
for use on portable blood processing systems that can be located within the clinical sites where chemotherapy is administered.
During treatment, the functionality of the blood processing system would allow patient blood plasma to flow through our devices, which
contain formulations of adsorbent and binding components intended deplete Tumor-EXs and chemotherapeutic agents from the bloodstream.
In
a recent in vitro study conducted by researchers at Innovative Biotherapies, we obtained pre-clinical insight that liposomal nanoparticles,
commonly used to deliver chemotherapeutic agents, can be reduced from human blood plasma with a formulation of adsorbent components.
In the study, liposome concentrations in human blood plasma were reduced by 92.5% after a two-hour interaction with the adsorbent components.
Beyond providing initial support for our candidate strategy to remove liposomal drug agents, the study established the possibility that
Tumor-EXs can also be reduced from blood plasma as liposomes have previously served as a research model system for isolating extracellular
vesicles and exosomes based on a similarity of size and structural characteristics.
Merger
Transaction
On
October 19, 2020, Sigyn Therapeutics, Inc, a Delaware corporation (the “Registrant”) formerly known as Reign Resources Corporation,
completed a Share Exchange Agreement (the “Agreement”) with Sigyn Therapeutics, Inc., a private entity incorporated in the
State of Delaware on October 19, 2019.
In
the Share Exchange Agreement, we acquired 100% of the issued and outstanding shares of privately held Sigyn Therapeutics common stock
in exchange for 75% of the fully paid and nonassessable shares of our common stock outstanding (the “Acquisition”). In conjunction
with the transaction, we changed our name from Reign Resources Corporation to Sigyn Therapeutics, Inc. pursuant to an amendment to our
articles of incorporation that was filed with the State of Delaware. Subsequently, our trading symbol was changed to SIGY. The Acquisition
was treated by the Company as a reverse merger in accordance with accounting principles generally accepted in the United States of America
(“U.S. GAAP”). For accounting purposes, Sigyn is considered to have acquired Reign Resources Corporation as the accounting
acquirer because: (i) Sigyn stockholders own 75% of the combined company, on an as-converted basis, immediately following the Closing
Date, (ii) Sigyn directors hold a majority of board seats in the combined company and (iii) Sigyn management held all key positions in
the management of the combined company. Accordingly, Sigyn’s historical results of operations will replace Reign Resources Corporation’s
historical results of operations for all periods prior to the Acquisition and, for all periods following the Acquisition, the results
of operations of the combined company will be included in the Company’s financial statements. The
Acquisition was treated as a “tax-free exchange” under Section 368 of the Internal Revenue Code of 1986 and resulted in the
private Sigyn Therapeutics corporate entity (established on October 29, 2019) to become a wholly owned subsidiary of Reign Resources
Corporation. Among the conditions for closing the acquisition, the Reign Resources Corporation extinguished all previously reported liabilities,
its preferred class of shares, and all stock purchase options. As a result, the reported liabilities totaling $3,429,516 were converted
into a total of 7,907,351 common shares. Additionally, assets held on the books of Reign Resources
Corporation, such as Gem inventory, was kept in the Company and therefore recorded as assets on the Share Exchange date. Upon
the closing of the Acquisition, we appointed James A. Joyce and Craig P. Roberts to serve as members of our Board of Directors.
As
of August 15, 2022, we have a total 37,295,813
shares issued and outstanding, of which 11,655,813
shares are held by non-affiliate stockholders.
NOTE
2 – BASIS OF PRESENTATION
The
accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States
of America and include all adjustments necessary for the fair presentation of the Company’s financial position and results of operations
for the periods presented.
The
Company currently operates in one business segment. The Company is not organized by market and is managed and operated as one business.
A single management team reports to the chief operating decision maker, the Chief Executive Officer, who comprehensively manages the
entire business. The Company does not currently operate any separate lines of businesses or separate business entities.
Going
Concern
The
accompanying financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among
other things, the realization of assets and satisfaction of liabilities in the normal course of business. The Company had an accumulated
deficit of $6,336,639 at September 30, 2022 and $4,265,759 at December 31, 2021, had a working capital deficit of $1,817,541 and $341,187
at September 30, 2022 and December 31, 2021, respectively, had a net loss of $2,070,880 and $1,777,447 for the nine months ended September
30, 2022 and 2021, respectively, and net cash used in operating activities of $1,378,475 and $1,221,221 for the nine months ended September
30, 2022 and 2021, respectively, with no revenue earned since inception, and a lack of operational history. These matters raise substantial
doubt about the Company’s ability to continue as a going concern.
While
the Company is attempting to expand operations and increase revenues, the Company’s cash position may not be significant enough
to support the Company’s daily operations. Management intends to raise additional funds by way of a public offering or an asset
sale transaction. Management believes that the actions presently being taken to further implement its business plan and generate revenues
provide the opportunity for the Company to continue as a going concern. While management believes in the viability of its strategy to
generate revenues and in its ability to raise additional funds or transact an asset sale, there can be no assurances to that effect or
on terms acceptable to the Company. The ability of the Company to continue as a going concern is dependent upon the Company’s ability
to further implement its business plan and generate revenues.
The
financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
NOTE
3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This
summary of significant accounting policies of the Company is presented to assist in understanding the Company’s financial statements.
The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and
objectivity. These accounting policies conform to GAAP and have been consistently applied in the preparation of the financial statements.
Use
of Estimates
The
preparation of these financial statements in accordance 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 disclosures of contingent
assets and liabilities at the dates of the financial statements and the reported amounts of net sales and expenses during the reported
periods. Actual results may differ from those estimates and such differences may be material to the financial statements. The more significant
estimates and assumptions by management include among others: common stock valuation, and the recoverability of intangibles. The current
economic environment has increased the degree of uncertainty inherent in these estimates and assumptions.
Cash
The
Company’s cash is held in bank accounts in the United States and is insured by the Federal Deposit Insurance Corporation (FDIC)
up to $250,000. The Company has not experienced any cash losses.
Income
Taxes
Income
taxes are accounted for under an asset and liability approach. This process involves calculating the temporary and permanent differences
between the carrying amounts of the assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.
The temporary differences result in deferred tax assets and liabilities, which would be recorded on the Balance Sheets in accordance
with ASC 740, which established financial accounting and reporting standards for the effect of income taxes. The likelihood that its
deferred tax assets will be recovered from future taxable income must be assessed and, to the extent that recovery is not likely, a valuation
allowance is established. Changes in the valuation allowance in a period are recorded through the income tax provision in the consolidated
Statements of Operations.
ASC
740-10 clarifies the accounting for uncertainty in income taxes recognized in an entity’s consolidated financial statements and
prescribes a recognition threshold and measurement attributes for financial statement disclosure of tax positions taken or expected to
be taken on a tax return. Under ASC 740-10, the impact of an uncertain income tax position on the income tax return must be recognized
at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax
position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, ASC 740-10 provides guidance on
derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. As a result of the implementation
of ASC 740-10 and currently, the Company does not have a liability for unrecognized income tax benefits.
Advertising
and Marketing Costs
Advertising
expenses are recorded as general and administrative expenses when they are incurred. The Company had advertising expenses of $65
and $446 and
$0 and $164,500
for the three and nine months ended September 30, 2022 and 2021, respectively.
Inventories
In
conjunction with the October 19, 2020 Share Exchange Agreement, the Company kept the gem inventory of Reign Resources Corporation. Inventories
are stated at the lower of cost or market (net realizable value) on a lot basis each quarter. A lot is determined by the cut, clarity,
size, and weight of the sapphires. Inventory consists of sapphire jewels that meet rigorous grading criteria and are of cuts and sizes
most commonly used in the jewelry industry. As of September 30, 2022 and December 31, 2021, the Company carried primarily loose sapphire
jewels, jewelry for sale on our website, and jewelry held as samples. Samples are used to show potential customers what the jewelry would
look like. Promotional items given to customers that are not expected to be returned will be removed from inventory and expensed. There
have been no promotional items given to customers as of September 30, 2022. The Company performs its own in-house assessment based on
gem guide and the current market price for metals to value its inventory on an annual basis or if circumstances dictate sooner to determine
if the estimated fair value is greater or less than cost. In addition, the inventory is reviewed each quarter by the Company against
industry prices from gem-guide and if there is a potential impairment, the Company would appraise the inventory. The estimated fair value
is subject to significant change due to changes in popularity of cut, perceived grade of the clarity of the sapphires, the number, type
and size of inclusions, the availability of other similar quality and size sapphires, and other factors. As a result, the internal assessed
value of the sapphires could be significantly lower from the current estimated fair value. Loose sapphire jewels do not degrade in quality
over time.
Based
on the significant advancement of Sigyn Therapy, the Company decided in the 4th quarter of 2021 to assess the value of retail
business operations that were a focus of the Company prior to the merger transaction consummated on October 19, 2020.
Related
to this assessment, management determined the wholesale liquidation value of its sapphire gem inventory to be 5-10% of the previously
reported retail value, based on communications with certified gemologists, the variance between retail and wholesale valuations, and
current market conditions. As a result, the Company has valued the inventory at $50,000 and recorded an impairment of assets of $536,047
in the year ended December 31, 2021.
Property
and Equipment
Property
and equipment are carried at cost and are depreciated on a straight-line basis over the estimated useful lives of the assets, generally
five years. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets
are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are
included in income in the year of disposition.
Intangible
Assets
Intangible
assets consist primarily of website development costs. Our intangible assets are being amortized on a straight-line basis over a period
of three years.
Impairment
of Long-lived Assets
We
periodically evaluate whether the carrying value of property, equipment and intangible assets has been impaired when circumstances indicate
the carrying value of those assets may not be recoverable. The carrying amount is not recoverable if it exceeds the sum of the undiscounted
cash flows expected to result from the use and eventual disposition of the asset. If the carrying value is not recoverable, the impairment
loss is measured as the excess of the asset’s carrying value over its fair value.
Our
impairment analyses require management to apply judgment in estimating future cash flows as well as asset fair values, including forecasting
useful lives of the assets, assessing the probability of different outcomes, and selecting the discount rate that reflects the risk inherent
in future cash flows. If the carrying value is not recoverable, we assess the fair value of long-lived assets using commonly accepted
techniques, and may use more than one method, including, but not limited to, recent third-party comparable sales and discounted cash
flow models. If actual results are not consistent with our assumptions and estimates, or our assumptions and estimates change due to
new information, we may be exposed to an impairment charge in the future. As of September 30, 2022 and December 31, 2021, the Company
had not experienced impairment losses on its long-lived assets.
Fair
Value of Financial Instruments
The
provisions of accounting guidance, FASB Topic ASC 825 requires all entities to disclose the fair value of financial instruments, both
assets and liabilities recognized and not recognized on the balance sheet, for which it is practicable to estimate fair value, and defines
fair value of a financial instrument as the amount at which the instrument could be exchanged in a current transaction between willing
parties. As of September 30, 2022 and December 31, 2021, the fair value of cash, accounts payable, accrued expenses, and notes payable
approximated carrying value due to the short maturity of the instruments, quoted market prices or interest rates which fluctuate with
market rates.
Fair
Value Measurements
Fair
value is defined 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.
Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs.
The fair value hierarchy is based on three levels of inputs, of which the first two are considered observable and the last unobservable,
as follows:
| |
● |
Level
1 – Quoted prices in active markets for identical assets or liabilities. |
| |
|
|
| |
● |
Level
2 – Inputs other than Level 1 that are observable, either directly or indirectly, 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. |
| |
|
|
| |
● |
Level
3 – Unobservable inputs that are supported by little or no market activity and that are significant to the measurement of the
fair value of the assets or liabilities |
The
carrying value of financial assets and liabilities recorded at fair value are measured on a recurring or nonrecurring basis. Financial
assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when a significant event occurs. There
were no financial assets or liabilities carried and measured on a nonrecurring basis during the reporting periods. Financial assets and
liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared. There
have been no transfers between levels.
Debt
The
Company issues debt that may have separate warrants, conversion features, or no equity-linked attributes.
Embedded
Conversion Features
The
Company evaluates embedded conversion features within convertible debt under ASC 815, Derivatives and Hedging, to determine whether
the embedded conversion feature(s) should be bifurcated from the host instrument and accounted for as a derivative at fair value with
changes in fair value recorded in earnings. If the conversion feature does not require derivative treatment under ASC 815, the instrument
is evaluated under ASC 470-20, Debt with Conversion and Other Options, for consideration of any beneficial conversion feature.
Derivative
Financial Instruments
The
Company evaluates all of it financial instruments, including stock purchase warrants, to determine if such instruments are derivatives
or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities,
the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair
value reported as charges or credits to income.
For
option-based simple derivative financial instruments, the Company uses the Monte Carlo simulations to value the derivative instruments
at inception and subsequent valuation dates. The classification of derivative instruments, including whether such instruments should
be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. There were no derivative financial instruments
as of September 30, 2022 and December 31, 2021 and no charges or credits to income for the three and nine months ended September 30,
2022.
Debt
Issue Costs and Debt Discount
The
Company may record debt issue costs and/or debt discounts in connection with raising funds through the issuance of debt. These costs
may be paid in the form of cash or equity (such as warrants). These costs are amortized to interest expense through the maturity of the
debt. If a conversion of the underlying debt occurs prior to maturity a proportionate share of the unamortized amounts is immediately
expensed. Any unamortized debt issue costs and debt discount are presented net of the related debt on the consolidated balance sheets.
Original
Issue Discount
For
certain convertible debt issued, the Company may provide the debt holder with an original issue discount. The original issue discount
would be recorded to debt discount, reducing the face amount of the note and is amortized to interest expense through the maturity of
the debt. If a conversion of the underlying debt occurs prior to maturity a proportionate share of the unamortized amounts is immediately
expensed. Any unamortized original issue discounts are presented net of the related debt on the consolidated balance sheets.
If
the conversion feature does not qualify for either the derivative treatment or as a BCF, the convertible debt is treated as traditional
debt.
Basic
and diluted earnings per share
Basic
net loss per share is calculated by dividing the net loss by the weighted-average number of common shares outstanding for the period,
without consideration for common stock equivalents. Diluted earnings (loss) per share are computed on the basis of the weighted average
number of common shares (including common stock subject to redemption) plus dilutive potential common shares outstanding for the reporting
period. In periods where losses are reported, the weighted-average number of common stock outstanding excludes common stock equivalents,
because their inclusion would be anti-dilutive.
Basic
and diluted earnings (loss) per share are the same since net losses for all periods presented and including the additional potential
common shares would have an anti-dilutive effect.
Stock
Based Compensation
In
accordance with ASC No. 718, Compensation – Stock Compensation (“ASC 718”), we measure the compensation costs
of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over
the period during which employees are required to provide services. Share-based compensation arrangements include stock options, restricted
share plans, performance-based awards, share appreciation rights and employee share purchase plans. As such, compensation cost is measured
on the date of grant at their fair value. Such compensation amounts, if any, are amortized over the respective vesting periods of the
option grant.
Non-Employee
Stock-Based Compensation
In
accordance with ASC 505, Equity Based Payments to Non-Employees, issuances of the Company’s common stock or warrants for
acquiring goods or services are measured at the fair value of the consideration received or the fair value of the equity instruments
issued, whichever is more reliably measurable. The measurement date for the fair value of the equity instruments issued to consultants
or vendors is determined at the earlier of (i) the date at which a commitment for performance to earn the equity instruments is reached
(a “performance commitment” which would include a penalty considered to be of a magnitude that is a sufficiently large disincentive
for nonperformance) or (ii) the date at which performance is complete. Although situations may arise in which counter performance may
be required over a period of time, the equity award granted to the party performing the service is fully vested and non-forfeitable on
the date of the agreement. As a result, in this situation in which vesting periods do not exist as the instruments fully vested on the
date of agreement, the Company determines such date to be the measurement date and will record the estimated fair market value of the
instruments granted as a prepaid expense and amortize such amount to general and administrative expense in the accompanying statement
of operations over the contract period. When it is appropriate for the Company to recognize the cost of a transaction during financial
reporting periods prior to the measurement date, for purposes of recognition of costs during those periods, the equity instrument is
measured at the then-current fair values at each of those interim financial reporting dates.
Reclassifications
Certain
prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on
the reported results of operations. An adjustment has been made to the Unaudited Condensed Consolidated Statements of Operations for
three and nine months ended September 2021, to reclass $177,844 and $392,496, respectively, of costs to research and development previously
classified in general and administrative. In addition,
an adjustment has been made to the Unaudited Condensed Consolidated Balance Sheets as of December
31, 2021, to reclass $1,072 of other current liabilities previously classified in accrued payroll and payroll taxes.
Concentrations,
Risks, and Uncertainties
Business
Risk
Substantial
business risks and uncertainties are inherent to an entity, including the potential risk of business failure.
The
Company is headquartered and operates in the United States. To date, the Company has generated no revenues from operations. There can
be no assurance that the Company will be able to raise additional capital and failure to do so would have a material adverse effect on
the Company’s financial position, results of operations and cash flows. Also, the success of the Company’s operations is
subject to numerous contingencies, some of which are beyond management’s control. Currently, these contingencies include general
economic conditions, price of components, competition, and governmental and political conditions.
Interest
rate risk
Financial
assets and liabilities do not have material interest rate risk.
Credit
risk
The
Company is exposed to credit risk from its cash in banks. The credit risk on cash in banks is limited because the counterparties are
recognized financial institutions.
Seasonality
The
business is not subject to substantial seasonal fluctuations.
Major
Suppliers
Sigyn
Therapy is comprised of components that are supplied by various industry vendors. Additionally, the Company is reliant on third-party
organizations to conduct clinical development studies that are necessary to advance Sigyn Therapy toward the marketplace.
Should
the relationship with an industry vendor or third-party clinical development organization be interrupted or discontinued, it is believed
that alternate component suppliers and third-party clinical development organizations could be identified to support the continued advancement
of Sigyn Therapy.
Recent
Accounting Pronouncements
In
August 2020, the FASB issued ASU No. 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging
– Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s
Own Equity, which simplifies accounting for convertible instruments by removing major separation models required under current GAAP.
The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and
it also simplifies the diluted earnings per share calculation in certain areas. This ASU is effective for annual reporting periods beginning
after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal
years beginning after December 15, 2020. The Company adopted ASU No. 2020-06 in the first quarter
of fiscal 2021, coinciding with the standard’s effective date, and had an immaterial impact from this standard.
Other
recently issued accounting updates are not expected to have a material impact on the Company’s unaudited condensed consolidated
financial statements.
NOTE
4 – PROPERTY AND EQUIPMENT
Property
and equipment consisted of the following as of:
SCHEDULE OF PROPERTY AND EQUIPMENT
| | |
| |
September
30, | | |
December
31, | |
| | |
Estimated
Life | |
2022 | | |
2021 | |
| | |
| |
| | |
| |
| Office
equipment | |
5
years | |
$ | 29,041 | | |
$ | 28,181 | |
| Computer
equipment | |
3
years | |
| 3,157 | | |
| 3,157 | |
| Accumulated
depreciation | |
| |
| (8,431 | ) | |
| (3,292 | ) |
| Property and equipment, net | |
| |
$ | 23,767 | | |
$ | 28,046 | |
Depreciation
expense was $1,716 and $5,139 and $432 and $1,279 for the three and nine months ended September 30, 2022 and 2021, respectively, and
is classified in general and administrative expenses in the unaudited condensed consolidated Statements of Operations.
NOTE
5 – INTANGIBLE ASSETS
Intangible
assets consisted of the following as of:
SCHEDULE OF INTANGIBLE ASSETS
| | |
Estimated
life | |
September
30,
2022 | | |
December
31,
2021 | |
| | |
| |
| | | |
| | |
| Website | |
3
years | |
$ | 10,799 | | |
$ | 10,799 | |
| Website | |
3
years | |
$ | 10,799 | | |
$ | 10,799 | |
| Accumulated
amortization | |
| |
| (7,799 | ) | |
| (5,099 | ) |
| Intangible
assets, net | |
| |
$ | 3,000 | | |
$ | 5,700 | |
As
of September 30, 2022, estimated future amortization expenses related to intangible assets were as follows:
SCHEDULE OF ESTIMATED AMORTIZATION EXPENSES RELATED TO INTANGIBLE ASSETS
| | |
| | |
| | |
Intangible
Assets | |
| 2022
(remaining 3 months) | |
$ | 900 | |
| 2023 | |
| 2,100 | |
| Intangible assets, net | |
$ | 3,000 | |
The
Company had amortization expense of $900 and $2,700 and $900 and $15,305 for the three and nine months ended September 30, 2022 and 2021,
respectively.
On
January 8, 2020, James Joyce, the Company’s CEO and Craig Roberts, the Company’s CTO, assigned to the Company the rights
to patent 62/881,740 pertaining to the devices, systems and methods for the broad-spectrum reduction of pro-inflammatory cytokines in
blood.
NOTE
6 – CONVERTIBLE PROMISSORY DEBENTURES
Convertible
notes payable consisted of the following:
SCHEDULE OF CONVERTIBLE NOTES PAYABLE
| | |
September
30, 2022 | | |
December
31, 2021 | |
| | |
| | |
| |
| January
28, 2020 ($457,380) – 0% interest per annum outstanding principal and interest due October 20, 2022 (“Note 1”) | |
$ | 457,380 | | |
$ | 457,380 | |
| January
28, 2020 ($457,380) – 0% interest per annum outstanding principal and interest due October 20, 2022 (“Note 1”) | |
$ | 457,380 | | |
$ | 457,380 | |
| June
23, 2020 ($60,500) – 0% interest per annum outstanding principal and interest due October 20, 2022 (“Note 2”) | |
| 60,500 | | |
| 60,500 | |
| September
17, 2020 ($199,650) – 0% interest per annum outstanding principal and interest due October 20, 2022. On October 28, 2021, Osher
elected to convert $16,714 of the aggregate principal amount of the Note of $199,650, into 42,857 common shares (“Note 3”). | |
| 182,936 | | |
| 182,936 | |
| March
23, 2022 ($220,000) – 0% interest per annum outstanding principal and interest due March 23, 2023 (“Note 4”) | |
| 220,000 | | |
| - | |
| April
28, 2022 ($110,000) – 0% interest per annum outstanding principal and interest due April 28, 2023 (“Note 5”) | |
| 110,000 | | |
| - | |
| May
10, 2022 ($110,000) – 0% interest per annum outstanding principal and interest due May 10, 2023 (“Note 6”) | |
| 110,000 | | |
| - | |
| June
1, 2022 ($55,000) – 0% interest per annum outstanding principal and interest due June 1, 2023 (“Note 7”) | |
| 55,000 | | |
| - | |
| June
22, 2020 ($82,500) – 0% interest per annum outstanding principal and interest due June 22, 2023 (“Note 8”) | |
| 82,500 | | |
| - | |
| July
2022 ($341,000) – 0% interest per annum outstanding principal and interest due various dates July 2023 (“Note 9”) | |
| 341,000 | | |
| - | |
| August
31, 2022 ($110,000) – 0% interest per annum outstanding principal and interest due August 31, 2023 (“Note 10”) | |
| 110,000 | | |
| - | |
| September
9, 2022 ($82,500) – 0% interest per annum outstanding principal and interest due September 9, 2023 (“Note 11”) | |
| 82,500 | | |
| - | |
| September
20, 2022 ($110,000) – 0% interest per annum outstanding principal and interest due September 20, 2023 (“Note 12”) | |
| 110,000 | | |
| - | |
| | |
| | | |
| | |
| Total
convertible notes payable | |
| 1,921,816 | | |
| 700,816 | |
| Original
issue discount | |
| (78,739 | ) | |
| (53,614 | ) |
| Debt
discount | |
| (327,634 | ) | |
| - | |
| | |
| | | |
| | |
| Total
convertible notes payable | |
$ | 1,515,443 | | |
$ | 647,202 | |
Principal
payments on convertible promissory debentures are due as follows:
SCHEDULE OF PRINCIPAL PAYMENTS DUE ON CONVERTIBLE PROMISSORY DEBENTURES
| | |
| 1 | |
| Year
ending December 31, | |
| |
| 2022 | |
$ | 700,816 | |
| 2023 | |
| 1,221,000 | |
| Long-Term Debt | |
$ | 1,921,816 | |
SCHEDULE OF CHANGES IN CONVERTIBLE NOTES
| | |
Note
1 | | |
Note
2 | | |
Note
3 | | |
Note
4 | | |
Note
5 | | |
Note
6 | | |
Note
7 | | |
Note
8 | | |
Note
9 | | |
Note
10 | | |
Note
11 | | |
Note
12 | | |
Totals | |
| Convertible
notes payable as of January 1, 2021 | |
$ | 385,000 | | |
$ | 50,000 | | |
$ | 181,500 | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | 616,500 | |
| Extension
of convertible note payable | |
| 72,380 | | |
| 10,500 | | |
| 18,150 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 101,030 | |
| Exchange
of convertible note payable for common stock | |
| - | | |
| - | | |
| (16,714 | ) | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (16,714 | ) |
| Convertible
notes payable, net, as of December 31, 2021 | |
| 457,380 | | |
| 60,500 | | |
| 182,936 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 700,816 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Convertible
notes payable issued in 2022 | |
| - | | |
| - | | |
| - | | |
| 220,000 | | |
| 110,000 | | |
| 110,000 | | |
| 55,000 | | |
| 82,500 | | |
| 341,000 | | |
| 110,000 | | |
| 82,500 | | |
| 110,000 | | |
| 1,221,000 | |
| Convertible
notes payable as of September 30, 2022 | |
$ | 457,380 | | |
$ | 60,500 | | |
$ | 182,936 | | |
$ | 220,000 | | |
$ | 110,000 | | |
$ | 110,000 | | |
$ | 55,000 | | |
$ | 82,500 | | |
$ | 341,000 | | |
$ | 110,000 | | |
$ | 82,500 | | |
$ | 110,000 | | |
$ | 1,921,816 | |
Changes
in note discounts were as follows:
SCHEDULE OF CHANGES IN NOTE DISCOUNTS
| | |
Note 1 | | |
Note 2 | | |
Note 3 | | |
Note 4 | | |
Note 5 | | |
Note 6 | | |
Note 7 | | |
Note 8 | | |
Note 9 | | |
Note 10 | | |
Note 11 | | |
Note 12 | | |
Totals | |
| Note discounts as of January 1, 2020 | |
$ | 73,418 | | |
$ | 5,830 | | |
$ | 18,584 | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | 97,832 | |
| Note discounts in conjunction with extension of convertible note | |
| 41,580 | | |
| 5,500 | | |
| 18,150 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 65,230 | |
| 2021 accretion of note discounts | |
| (80,822 | ) | |
| (6,809 | ) | |
| (21,817 | ) | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (109,448 | ) |
| Note discounts as of December 31, 2021 | |
| 34,176 | | |
| 4,521 | | |
| 14,917 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 53,614 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Note discounts issued in conjunction with debt | |
| - | | |
| - | | |
| - | | |
| 113,418 | | |
| 44,786 | | |
| 44,787 | | |
| 22,794 | | |
| 34,861 | | |
| 140,289 | | |
| 64,104 | | |
| 62,370 | | |
| 72,730 | | |
| 600,139 | |
| 2022 accretion of note discounts | |
| (31,100 | ) | |
| (4,113 | ) | |
| (13,575 | ) | |
| (59,350 | ) | |
| (19,019 | ) | |
| (17,547 | ) | |
| (7,556 | ) | |
| (9,550 | ) | |
| (35,360 | ) | |
| (16,158 | ) | |
| (15,720 | ) | |
| (18,332 | ) | |
| (247,380 | ) |
| accretion of note discounts | |
| (31,100 | ) | |
| (4,113 | ) | |
| (13,575 | ) | |
| (59,350 | ) | |
| (19,019 | ) | |
| (17,547 | ) | |
| (7,556 | ) | |
| (9,550 | ) | |
| (35,360 | ) | |
| (16,158 | ) | |
| (15,720 | ) | |
| (18,332 | ) | |
| (247,380 | ) |
| Note discounts as of September 30, 2022 | |
$ | 3,076 | | |
$ | 408 | | |
$ | 1,342 | | |
$ | 54,068 | | |
$ | 25,767 | | |
$ | 27,240 | | |
$ | 15,238 | | |
$ | 25,311 | | |
$ | 104,929 | | |
$ | 47,946 | | |
$ | 46,650 | | |
$ | 54,398 | | |
$ | 406,373 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Convertible notes payable, net, as of December 31, 2021 | |
$ | 423,204 | | |
$ | 55,979 | | |
$ | 168,019 | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | 647,202 | |
| Convertible notes payable, net, as of September 30, 2022 | |
$ | 454,304 | | |
$ | 60,092 | | |
$ | 181,594 | | |
$ | 165,932 | | |
$ | 84,233 | | |
$ | 82,760 | | |
$ | 39,762 | | |
$ | 57,189 | | |
$ | 236,071 | | |
$ | 62,054 | | |
$ | 35,850 | | |
$ | 55,602 | | |
$ | 1,515,443 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| 2021 Effective interest rate | |
| 11 | % | |
| 11 | % | |
| 12 | % | |
| -% | | |
| -% | | |
| -% | | |
| -% | | |
| -% | | |
| -% | | |
| -% | | |
| -% | | |
| -% | | |
| -% | |
| 2022 Effective interest rate | |
| 7 | % | |
| 7 | % | |
| 7 | % | |
| 27 | % | |
| 17 | % | |
| 16 | % | |
| 14 | % | |
| 12 | % | |
| 10 | % | |
| 15 | % | |
| 19 | % | |
| 17 | % | |
| 13 | % |
| Effective interest rate | |
| 7 | % | |
| 7 | % | |
| 7 | % | |
| 27 | % | |
| 17 | % | |
| 16 | % | |
| 14 | % | |
| 12 | % | |
| 10 | % | |
| 15 | % | |
| 19 | % | |
| 17 | % | |
| 13 | % |
Current
Noteholders
Osher
– $110,000 (Note 12)
On
September 20, 2022, the Company entered into an Original Issue Discount Senior Convertible Debenture (the “Note”) with respect
to the sale and issuance to institutional investor Osher Capital Partners LLC (“Osher”)
of (i) $110,000 aggregate principal amount of Note due September 20, 2023 based on $1.00 for each $0.90909 paid by the previous noteholder
and (ii) five-year Common Stock Purchase Warrants (“Warrants’) to purchase up to an aggregate of 733,333 shares of the Company’s
Common Stock at an exercise price of $0.25 per share. The aggregate cash subscription amount received by the Company from the previous
noteholder for the issuance of the Note and Warrants was $100,000 which was issued at a $10,000 original issue discount from the face
value of the Note. The conversion price for the principal in connection with voluntary conversions
by a holder of the convertible notes is $0.15 per share, subject to adjustment as provided therein, such as stock splits and stock
dividends.
Brio
– $82,500 (Note 11)
On
September 9, 2022, the Company entered into an Original Issue Discount Senior Convertible Debenture (the “Note”) with respect
to the sale and issuance to institutional investor Brio Capital Master Fund Ltd. (“Brio”)
of (i) $82,500 aggregate principal amount of Note due September 9, 2023 based on $1.00 for each $0.90909 paid by the previous noteholder
and (ii) five-year Common Stock Purchase Warrants (“Warrants’) to purchase up to an aggregate of 550,000 shares of the Company’s
Common Stock at an exercise price of $0.25 per share. The aggregate cash subscription amount received by the Company from the previous
noteholder for the issuance of the Note and Warrants was $75,000 which was issued at a $7,500 original issue discount from the face value
of the Note. The conversion price for the principal in connection with voluntary conversions by
a holder of the convertible notes is $0.15 per share, subject to adjustment as provided therein, such as stock splits and stock
dividends.
Osher
– $110,000 (Note 10)
On
August 31, 2022, the Company entered into an Original Issue Discount Senior Convertible Debenture (the “Note”) with respect
to the sale and issuance to institutional investor Osher Capital Partners LLC (“Osher”)
of (i) $110,000 aggregate principal amount of Note due August 31, 2023 based on $1.00 for each $0.90909 paid by the previous noteholder
and (ii) five-year Common Stock Purchase Warrants (“Warrants’) to purchase up to an aggregate of 733,333 shares of the Company’s
Common Stock at an exercise price of $0.25 per share. The aggregate cash subscription amount received by the Company from the previous
noteholder for the issuance of the Note and Warrants was $100,000 which was issued at a $10,000 original issue discount from the face
value of the Note. The conversion price for the principal in connection with voluntary conversions
by a holder of the convertible notes is $0.15 per share, subject to adjustment as provided therein, such as stock splits and stock
dividends.
Other
– $341,000 (Note 9)
In
July 2022, the Company entered into an Original Issue Discount Senior Convertible Debentures (the “July 2022 Notes”) totaling
(i) $341,000 aggregate principal amount of Note (total of $310,000 cash was received) due in various dates in July 2023 based on $1.00
for each $0.90909 paid by the previous noteholder and (ii) five-year Common Stock Purchase Warrants (“Warrants’) to purchase
up to an aggregate of 676,936 shares of the Company’s Common Stock at an exercise price of $0.50 per share. The
conversion price for the principal in connection with voluntary conversions by the holders of the convertible notes is $0.50 per share.
Osher
– $82,500 (Note 8)
On
June 22, 2022, the Company entered into an Original Issue Discount Senior Convertible Debenture (the “Note”) with respect
to the sale and issuance to institutional investor Osher Capital Partners LLC (“Osher”)
of (i) $82,500 aggregate principal amount of Note due June 22, 2023 based on $1.00 for each $0.90909 paid by the previous noteholder
and (ii) five-year Common Stock Purchase Warrants (“Warrants’) to purchase up to an aggregate of 165,000 shares of the Company’s
Common Stock at an exercise price of $0.50 per share. The aggregate cash subscription amount received by the Company from the previous
noteholder for the issuance of the Note and Warrants was $75,000 which was issued at a $7,500 original issue discount from the face value
of the Note. The conversion price for the principal in connection with voluntary conversions by
a holder of the convertible notes is $0.50 per share, subject to adjustment as provided therein, such as stock splits and stock
dividends.
Osher
– $55,000 (Note 7)
On
June 1, 2022, the Company entered into an Original Issue Discount Senior Convertible Debenture (the “Note”) with respect
to the sale and issuance to institutional investor Osher Capital Partners LLC (“Osher”)
of (i) $55,000 aggregate principal amount of Note due June 1, 2023 based on $1.00 for each $0.90909 paid by the previous noteholder and
(ii) five-year Common Stock Purchase Warrants (“Warrants’) to purchase up to an aggregate of 110,000 shares of the Company’s
Common Stock at an exercise price of $0.50 per share. The aggregate cash subscription amount received by the Company from the previous
noteholder for the issuance of the Note and Warrants was $50,000 which was issued at a $5,000 original issue discount from the face value
of the Note. The conversion price for the principal in connection with voluntary conversions by
a holder of the convertible notes is $0.50 per share, subject to adjustment as provided therein, such as stock splits and stock
dividends.
Brio
– $110,000 (Note 6)
On
May 10, 2022, the Company entered into an Original Issue Discount Senior Convertible Debenture (the “Note”) with respect
to the sale and issuance to institutional investor Brio Capital Master Fund Ltd. (“Brio”)
of (i) $110,000 aggregate principal amount of Note due May 10, 2023 based on $1.00 for each $0.90909 paid by the previous noteholder
and (ii) five-year Common Stock Purchase Warrants (“Warrants’) to purchase up to an aggregate of 220,000 shares of the Company’s
Common Stock at an exercise price of $0.50 per share. The aggregate cash subscription amount received by the Company from the previous
noteholder for the issuance of the Note and Warrants was $100,000 which was issued at a $10,000 original issue discount from the face
value of the Note. The conversion price for the principal in connection with voluntary conversions
by a holder of the convertible notes is $0.50 per share, subject to adjustment as provided therein, such as stock splits and stock
dividends.
Osher
– $110,000 (Note 5)
On
April 28, 2022, the Company entered into an Original Issue Discount Senior Convertible Debenture (the “Note”) with respect
to the sale and issuance to institutional investor Osher Capital Partners LLC (“Osher”)
of (i) $110,000 aggregate principal amount of Note due April 28, 2023 based on $1.00 for each $0.90909 paid by the previous noteholder
and (ii) five-year Common Stock Purchase Warrants (“Warrants’) to purchase up to an aggregate of 220,000 shares of the Company’s
Common Stock at an exercise price of $0.50 per share. The aggregate cash subscription amount received by the Company from the previous
noteholder for the issuance of the Note and Warrants was $100,000 which was issued at a $10,000 original issue discount from the face
value of the Note. The conversion price for the principal in connection with voluntary conversions
by a holder of the convertible notes is $0.50 per share, subject to adjustment as provided therein, such as stock splits and stock
dividends.
Osher
– $110,000 (Note 4)
On
March 23, 2022, the Company entered into an Original Issue Discount Senior Convertible Debenture (the “Note”) with respect
to the sale and issuance to institutional investor Osher Capital Partners LLC (“Osher”)
of (i) $110,000 aggregate principal amount of Note due March 23, 2023 based on $1.00 for each $0.90909 paid by the previous noteholder
and (ii) five-year Common Stock Purchase Warrants (“Warrants’) to purchase up to an aggregate of 220,000 shares of the Company’s
Common Stock at an exercise price of $0.50 per share. The aggregate cash subscription amount received by the Company from the previous
noteholder for the issuance of the Note and Warrants was $100,000 which was issued at a $10,000 original issue discount from the face
value of the Note. The conversion price for the principal in connection with voluntary conversions
by a holder of the convertible notes is $0.50 per share, subject to adjustment as provided therein, such as stock splits and stock
dividends.
Brio
– $110,000 (Note 4)
On
March 23, 2022, the Company entered into an Original Issue Discount Senior Convertible Debenture (the “Note”) with respect
to the sale and issuance to institutional investor Brio Capital Master Fund Ltd. (“Brio”)
of (i) $110,000 aggregate principal amount of Note due March 23, 2023 based on $1.00 for each $0.90909 paid by the previous noteholder
and (ii) five-year Common Stock Purchase Warrants (“Warrants’) to purchase up to an aggregate of 220,000 shares of the Company’s
Common Stock at an exercise price of $0.50 per share. The aggregate cash subscription amount received by the Company from the previous
noteholder for the issuance of the Note and Warrants was $100,000 which was issued at a $10,000 original issue discount from the face
value of the Note. The conversion price for the principal in connection with voluntary conversions
by a holder of the convertible notes is $0.50 per share, subject to adjustment as provided therein, such as stock splits and stock
dividends.
Osher
– $199,650 (Note 3)
On
September 17, 2020 (the “Original Issue Date”), the Company entered into a Securities Purchase Agreement (the “Purchase
Agreement”) with respect to the sale and issuance to institutional investor Osher Capital
Partners LLC (“Osher”) of (i) $181,500 aggregate principal amount of Original Issue Discount Senior Convertible Debenture
(the “Note”) due September 30, 2021, based on $1.00 for each $0.90909 paid by Osher and (ii) five-year Common Stock Purchase
Warrants (“Warrants’) to purchase up to an aggregate of 8,250 shares of the Company’s Common Stock at an exercise price
of $30.00 per share. The aggregate cash subscription amount received by the Company from Osher for the issuance of the Note and Warrants
was $165,000 which was issued at a $16,500 original issue discount from the face value of the Note. The
conversion price for the principal in connection with voluntary conversions by a holder of the convertible notes is $0.39 per share,
as amended on October 20, 2020, subject to adjustment as provided therein, such as stock splits and stock dividends.
The
Company and Osher amended the convertible debt agreement as follows on October 20, 2020:
| |
● |
The
parties amended the Warrants dated September 17, 2020, for the number of warrant shares from 8,250 warrant shares to 465,366 warrant
shares at an exercise price of $0.59 per share. |
| |
● |
The
parties amended the Note for the maturity date from September 30, 2021 to October 20, 2021. |
On
October 22, 2021, the Company and Osher amended convertible debt agreements as follows:
| |
● |
The
parties amended the October 20, 2020 Notes for the maturity date from October 20, 2021 to October 20, 2022. |
| |
|
|
| |
● |
The
parties amended the October 20, 2020 Notes for the aggregate principal amount and accrued interest from $652,300 to $717,530 which
is issued at a $65,230 original issue discount from the face value of the October 20, 2020 Notes now due October 20, 2022. |
| |
|
|
| |
● |
In
exchange for the extension of the Note, the Company issued Osher five-year warrants to purchase an aggregate of 450,000 shares of
the Company’s common stock at an exercise price of $1.00 per share. |
On
October 28, 2021, Osher elected to convert $16,714 of the aggregate principal amount of the Note of $199,650, into 42,857 common shares.
The
Company has not repaid this convertible note and the convertible note is now in default. The Company is currently in discussions to restructure
the terms of the note.
Osher
– $60,500 (as amended on October 20, 2020 to $55,000) (Note 2)
On
June 23, 2020 (the “Original Issue Date”), the Company entered into a Securities Purchase Agreement (the “Purchase
Agreement”) with respect to the sale and issuance to institutional investor Osher Capital
Partners LLC (“Osher”) of (i) $50,000 aggregate principal amount of Original Issue Discount Senior Convertible Debenture
(the “Note”) due June 23, 2021, based on $1.00 for each $0.90909 paid by Osher and (ii) five-year Common Stock Purchase Warrants
(“Warrants”) to purchase up to an aggregate of 10,000 shares of the Company’s Common Stock at an exercise price of
$30.00 per share. The aggregate cash subscription amount received by the Company from Osher for the issuance of the Note and Warrants
was $50,005 which was issued at a $0 original issue discount from the face value of the Note. The
conversion price for the principal in connection with voluntary conversions by a holder of the convertible notes is $0.39 per share,
as amended on October 20, 2020, subject to adjustment as provided therein, such as stock splits and stock dividends.
The
Company and Osher amended the convertible debt agreement as follows on October 20, 2020:
| |
● |
The
parties amended the Note for the aggregate principal amount from $50,000 to $55,000. The aggregate cash subscription amount received
by the Company from Osher for the issuance of the Note and Warrants was $50,005 which was issued at an amended $4,995 original issue
discount from the face value of the Note. |
| |
● |
The
parties amended the Warrants dated June 23, 2020, for the number of warrant shares from 10,000 warrant shares to 141,020 warrant
shares at an exercise price of $0.59 per share. |
| |
● |
The
parties amended the Note for the maturity date from June 23, 2021 to October 20, 2021. |
On
October 22, 2021, the Company and Osher amended convertible debt agreements as follows (see Note 12):
| |
● |
The
parties amended the October 20, 2020 Notes for the maturity date from October 20, 2021 to October 20, 2022. |
| |
|
|
| |
● |
The
parties amended the October 20, 2020 Notes for the aggregate principal amount and accrued interest from $652,300 to $717,530 which
is issued at a $65,230 original issue discount from the face value of the October 20, 2020 Notes now due October 20, 2022. |
| |
|
|
| |
● |
In
exchange for the extension of the Note, the Company issued Osher five-year warrants to purchase an aggregate of 450,000 shares of
the Company’s common stock at an exercise price of $1.00 per share. |
The
Company has not repaid this convertible note and the convertible note is now in default. The Company is currently in discussions to restructure
the terms of the note.
Osher
– $457,380 (Note 1)
On
January 28, 2020 (the “Original Issue Date”), the Company entered into a Securities Purchase Agreement (the “Purchase
Agreement”) with respect to the sale and issuance to institutional investor Osher Capital
Partners LLC (“Osher”) of (i) $385,000 aggregate principal amount of Original Issue Discount Senior Convertible Debenture
due January 26, 2021, based on $1.00 for each $0.90909 paid by Osher and (ii) five-year Common Stock Purchase Warrants to purchase up
to an aggregate of 80,209 shares of the Company’s Common Stock at an exercise price of $7.00 per share. The aggregate cash subscription
amount received by the Company from Osher for the issuance of the note and warrants was $350,005 which was issued at a $34,995 original
issue discount from the face value of the Note. The conversion price for the principal in connection
with voluntary conversions by a holder of the convertible notes is $0.094 per share, as amended on October 20, 2020, subject to adjustment
as provided therein, such as stock splits and stock dividends.
The
Company and Osher amended the convertible debt agreement as follows on October 20, 2020:
| |
● |
The
parties amended the Warrants dated January 28, 2020, for the number of warrant shares from 80,209 warrant shares to 4,113,083 warrant
shares at an exercise price of $0.14 per share. |
| |
● |
The
parties amended the Note to provide for interest at 8% per annum. |
| |
● |
The
parties amended the Note for the maturity date from June 23, 2021 to October 20, 2021. |
On
October 22, 2021, the Company and Osher amended convertible debt agreements as follows:
| |
● |
The
parties amended the October 20, 2020 Notes for the maturity date from October 20, 2021 to October 20, 2022. |
| |
|
|
| |
● |
The
parties amended the October 20, 2020 Notes for the aggregate principal amount and accrued interest from $652,300 to $717,530 which
is issued at a $65,230 original issue discount from the face value of the October 20, 2020 Notes now due October 20, 2022. |
| |
|
|
| |
● |
In
exchange for the extension of the Note, the Company issued Osher five-year warrants to purchase an aggregate of 450,000 shares of
the Company’s common stock at an exercise price of $1.00 per share. |
The
Company has not repaid this convertible note and the convertible note is now in default. The Company is currently in discussions to restructure
the terms of the note.
Previous
Noteholders
Previous
notes were detailed in our Form 10-K filed on March 31, 2022. No changes occurred related to these notes during the period covered by
this Form 10-Q.
NOTE
7 – STOCKHOLDERS’ DEFICIT
Preferred
Stock
The
Company authorized 10,000,000 shares of par value $0.0001 preferred stock, of which none are issued and outstanding at September 30,
2022, and December 31, 2021, respectively.
Common
Stock
The
Company has authorized 1,000,000,000 shares of par value $0.0001 common stock, of which 37,295,813 shares are outstanding as of September
30, 2022, and December 31, 2021, respectively.
Warrants
On
October 22, 2021, the Company and Osher amended convertible debt agreements for the maturity date from October 20, 2021 to October 20,
2022. In exchange for the extension of the Note, the Company issued Osher 450,000 warrants to purchase an aggregate of 450,000 shares
of the Company’s common stock, valued at $197,501 (based on the Black Scholes valuation model on the date of grant) (see Note 6).
The warrants are exercisable for a period of five years at $1.00 per share in whole or in part, as either a cash exercise or as a cashless
exercise, and fully vest at grant date. The Company is accreting the value of the warrants ratably through October 20, 2022. The Company
recorded $49,781 and $147,720, and $0 and $0 for the three and nine months ended September 30, 2022 and 2021, respectively, and is classified
in other expenses in the consolidated Statements of Operations. See Notes 6 for further warrant discussions.
NOTE
8 – OPERATING LEASES
On
May 27, 2021, the Company entered into a sixty-three month lease for its corporate office at $5,955 per month commencing June 15, 2021
maturing September 30, 2026. The Company accounts for this lease in accordance with ASC 842. Adoption
of the standard resulted in the initial recognition of operating lease ROU asset of $290,827 and
operating lease liability of $290,827 as of June 15, 2021.
Operating
lease right-of-use (“ROU”) assets and liabilities are recognized at commencement date based on the present value of lease
payments over the lease term. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent
our obligation to make lease payments arising from the lease. Generally, the implicit rate of interest in arrangements is not readily
determinable and the Company utilizes its incremental borrowing rate in determining the present value of lease payments. The Company’s
incremental borrowing rate is a hypothetical rate based on its understanding of what its credit rating would be. The operating lease
ROU asset includes any lease payments made and excludes lease incentives. Our variable lease payments primarily consist of maintenance
and other operating expenses from our real estate leases. Variable lease payments are excluded from the ROU assets and lease liabilities
and are recognized in the period in which the obligation for those payments is incurred. Our lease terms may include options to extend
or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for minimum lease payments is recognized
on a straight-line basis over the lease term.
We
have lease agreements with lease and non-lease components. We have elected to account for these lease and non-lease components as a single
lease component. We are also electing not to apply the recognition requirements to short-term leases of twelve months or less and instead
will recognize lease payments as expense on a straight-line basis over the lease term.
The
components of lease expense and supplemental cash flow information related to leases for the period are as follows:
In
accordance with ASC 842, the components of lease expense were as follows:
SCHEDULE OF OPERATING LEASE COST AND SUPPLEMENTAL CASH FLOW INFORMATION
| | |
2022 | | |
2021 | | |
2022 | | |
2021 | |
| | |
Nine
Months ended
September
30, | | |
Three
Months ended September 30, | |
| | |
2022 | | |
2021 | | |
2022 | | |
2021 | |
| Operating
lease expense | |
$ | 53,757 | | |
$ | 24,094 | | |
$ | 17,919 | | |
$ | 18,070 | |
| Short
term lease cost | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | |
| Total
lease expense | |
$ | 53,757 | | |
$ | 24,094 | | |
$ | 17,919 | | |
$ | 18,070 | |
In
accordance with ASC 842, other information related to leases was as follows:
| Nine
Months Ended September 30 | |
2022 | | |
2021 | |
| Operating
cash flows from operating leases | |
$ | 54,312 | | |
$ | 9,131 | |
| Cash
paid for amounts included in the measurement of lease liabilities | |
$ | 54,312 | | |
$ | 9,131 | |
| | |
| | | |
| | |
| Weighted-average
remaining lease term—operating leases | |
| 3.92
years | | |
| 4.92
years | |
| Weighted-average
discount rate—operating leases | |
| 10 | % | |
| 10 | % |
In
accordance with ASC 842, maturities of operating lease liabilities as of September 30, 2022 were as follows:
SCHEDULE OF MATURITIES OF OPERATING LEASE LIABILITIES
| | |
Operating | |
| Year
ending: | |
Lease | |
| 2022
(remaining 3 months) | |
$ | 18,402 | |
| 2023 | |
| 74,895 | |
| 2024 | |
| 77,142 | |
| 2025 | |
| 79,456 | |
| 2026 | |
| 54,225 | |
| Total
undiscounted cash flows | |
$ | 304,119 | |
| | |
| | |
| Reconciliation
of lease liabilities: | |
| | |
| Weighted-average
remaining lease terms | |
| 3.92
years | |
| Weighted-average
discount rate | |
| 10 | % |
| Present
values | |
$ | 264,691 | |
| | |
| | |
| Lease
liabilities—current | |
| 51,351 | |
| Lease
liabilities—long-term | |
| 201,457 | |
| Lease
liabilities—total | |
$ | 252,808 | |
| | |
| | |
| Difference
between undiscounted and discounted cash flows | |
$ | 51,311 | |
Operating
lease cost was $17,919 and $53,757 and $18,070 and $24,094 for the three and nine months ended September 30, 2022 and 2021, respectively.
NOTE
9 – RELATED PARTY TRANSACTIONS
Other
than as set forth below, and as disclosed in Notes 5 and 7, there have not been any transaction entered into or been a participant in
which a related person had or will have a direct or indirect material interest.
Employment
Agreements
Mr.
Ferrell was hired March 9, 2022 as the Company’s Chief Financial Officer. Mr. Ferrell receives an annual base salary of $250,000,
plus discretionary bonus compensation not to exceed 40% of salary. Mr. Ferrell’s employment also provides for medical insurance,
disability benefits and three months of severance pay if his employment is terminated without cause or due to a change in control. Additionally,
Mr. Ferrell will be granted up to 600,000 options to purchase 600,000 of the Company’s common shares upon the implementation of
a Company employee option plan. As of September 30, 2022, the Company has not implemented an option plan and therefore, no options have
been granted. The Company incurred compensation expense of $71,829 and $145,833 and $0 and $0 and employee benefits of $7,708 and $15,424
and $0 and $0 for the three and nine months ended September 30, 2022 and 2021, respectively.
NOTE
10 – EARNINGS PER SHARE
FASB
ASC Topic 260, Earnings Per Share, requires a reconciliation of the numerator and denominator of the basic and diluted earnings
(loss) per share (EPS) computations.
Basic
earnings (loss) per share are computed by dividing net earnings available to common stockholders by the weighted-average number of common
shares outstanding during the period. Diluted earnings (loss) per share is computed similar to basic earnings per share except that the
denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares
had been issued and if the additional common shares were dilutive. In periods where losses are reported, the weighted-average number
of common stock outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive.
Basic
and diluted earnings (loss) per share are
the same since net losses for all periods presented and including the additional potential common shares would have an anti-dilutive
effect.
The
following table sets forth the computation of basic and diluted net income per share:
SCHEDULE OF COMPUTATION OF BASIC AND DILUTED NET INCOME PER SHARE
| | |
2022 | | |
2021 | | |
2022 | | |
2021 | |
| | |
Nine
Months Ended September 30, | | |
Three
Months Ended September 30, | |
| | |
2022 | | |
2021 | | |
2022 | | |
2021 | |
| | |
| | |
| | |
| | |
| |
| Net
loss attributable to the common stockholders | |
$ | (2,070,880 | ) | |
$ | (1,777,447 | ) | |
$ | (726,509 | ) | |
$ | (665,904 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Basic weighted average
outstanding shares of common stock | |
| 37,295,803 | | |
| 36,138,191 | | |
| 37,295,803 | | |
| 36,721,651 | |
| Dilutive
effect of options and warrants | |
| - | | |
| - | | |
| - | | |
| - | |
| Diluted
weighted average common stock and common stock equivalents | |
| 37,295,803 | | |
| 36,138,191 | | |
| 37,295,803 | | |
| 36,721,651 | |
| | |
| | | |
| | | |
| | | |
| | |
| Loss per share: | |
| | | |
| | | |
| | | |
| | |
| Basic
and diluted | |
$ | (0.06 | ) | |
$ | (0.05 | ) | |
$ | (0.02 | ) | |
$ | (0.02 | ) |
NOTE
11 – COMMITMENTS AND CONTINGENCIES
Legal
From
time to time, various lawsuits and legal proceedings may arise in the ordinary course of business. However, litigation is subject to
inherent uncertainties and an adverse result in these or other matters may arise from time to time that may harm our business. We are
currently not aware of any legal proceedings or claims that it believes will have a material adverse effect on its business, financial
condition or operating results.
NOTE
12 – SUBSEQUENT EVENTS
The
Company evaluated all events or transactions that occurred after September 30, 2022 up through the date the financial statements were
available to be issued. During this period, the Company did not have any material recognizable subsequent events required to be disclosed
as of and for the period ended September 30, 2022 except for the following:
Convertible
Promissory Debentures
Osher
– $110,000
On
October 20, 2022, the Company entered into an Original Issue Discount Senior Convertible Debenture (the “Note”) with respect
to the sale and issuance to institutional investor Osher Capital Partners LLC (“Osher”) of (i) $110,000 aggregate principal
amount of Note due October 20, 2023 based on $1.00 for each $0.90909 paid by the previous noteholder and (ii) five-year Common Stock
Purchase Warrants (“Warrants’) to purchase up to an aggregate of 733,333 shares of the Company’s Common Stock at an
exercise price of $0.25 per share. The aggregate cash subscription amount received by the Company from the previous noteholder for the
issuance of the Note and Warrants was $100,000 which was issued at a $10,000 original issue discount from the face value of the Note.
The conversion price for the principal in connection with voluntary conversions by a holder of the convertible notes is $0.15 per share,
subject to adjustment as provided therein, such as stock splits and stock dividends.
Brio
– $82,500
On
November 9, 2022, the Company entered into an Original Issue Discount Senior Convertible Debenture (the “Note”) with respect
to the sale and issuance to institutional investor Brio Capital Master Fund Ltd. (“Brio”) of (i) $82,500 aggregate principal
amount of Note due November 9, 2023 based on $1.00 for each $0.90909 paid by the previous noteholder and (ii) five-year Common Stock
Purchase Warrants (“Warrants’) to purchase up to an aggregate of 550,000 shares of the Company’s Common Stock at an
exercise price of $0.25 per share. The aggregate cash subscription amount received by the Company from the previous noteholder for the
issuance of the Note and Warrants was $75,000 which was issued at a $7,500 original issue discount from the face value of the Note. The
conversion price for the principal in connection with voluntary conversions by a holder of the convertible notes is $0.15 per share,
subject to adjustment as provided therein, such as stock splits and stock dividends.
Osher
– $55,000
On
November 14, 2022, the Company entered into an Original Issue Discount Senior Convertible Debenture (the “Note”) with respect
to the sale and issuance to institutional investor Osher Capital Partners LLC (“Osher”) of (i) $55,000 aggregate principal
amount of Note due November 14, 2023 based on $1.00 for each $0.90909 paid by the previous noteholder and (ii) five-year Common Stock
Purchase Warrants (“Warrants’) to purchase up to an aggregate of 366,667 shares of the Company’s Common Stock at an
exercise price of $0.25 per share. The aggregate cash subscription amount received by the Company from the previous noteholder for the
issuance of the Note and Warrants was $50,000 which was issued at a $5,000 original issue discount from the face value of the Note. The
conversion price for the principal in connection with voluntary by a holder of the convertible notes is $0.15 per share, subject to adjustment
as provided therein, such as stock splits and stock dividends.
Osher
– $145,200
On
November 21, 2022, the Company entered into an Original Issue Discount Senior Convertible Debenture (the “Note”) with respect
to the sale and issuance to institutional investor Osher Capital Partners LLC (“Osher”) of (i) $145,200 aggregate principal
amount of Note due November 21, 2023 based on $1.00 for each $0.90909 paid by the previous noteholder and (ii) five-year Common Stock
Purchase Warrants (“Warrants’) to purchase up to an aggregate of 968,000 shares of the Company’s Common Stock at an
exercise price of $0.25 per share. The aggregate cash subscription amount received by the Company from the previous noteholder for the
issuance of the Note and Warrants was $132,000 which was issued at a $13,200 original issue discount from the face value of the Note.
The conversion price for the principal in connection with voluntary conversions by a holder of the convertible notes is $0.15 per share,
subject to adjustment as provided therein, such as stock splits and stock dividends.
On
November 23, 2022, the noteholder elected to convert the aggregate principal amount of the Note, $145,200, into 968,000 common shares.
Class
A Units
Each
Class A Unit Consisting of
One
Share of Common Stock and
One
Series A Warrant to Purchase One Share of Common Stock
Class
B Units
Each
Class B Unit Consisting of ___ Share of Series B Preferred Stock and One Series A Warrant to Purchase One Share of Common Stock
PROSPECTUS
, 2022
PART
II
INFORMATION
NOT REQUIRED IN THE PROSPECTUS
ITEM
13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
| Securities and Exchange Commission Registration Fee | |
$ | 1,853 | |
| FINRA Filing Fee | |
| 3,499 | |
| Nasdaq Listing Fee | |
| - | |
| Transfer Agent and Registrar Fees | |
| - | |
| Printing and Engraving Expenses | |
| - | |
| Legal Fees | |
| - | |
| Accounting Fees and Expenses | |
| - | |
| Miscellaneous | |
| - | |
| Total | |
$ | - | |
All
amounts are estimates other than the Commission’s registration fee. We are paying all expenses of the offering
listed above.
ITEM
14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
As
permitted by Section 102 of the Delaware General Corporation Law, we will adopt provisions in our Amended and Restated Certificate of
Incorporation and our Amended and Restated Bylaws that limit or eliminate the personal liability of our directors for a breach of their
fiduciary duty of care as a director. The duty of care generally requires that, when acting on behalf of the corporation, directors exercise
an informed business judgment based on all material information reasonably available to them. Consequently, a director will not be personally
liable to us or our stockholders for monetary damages for breach of fiduciary duty as a director, except for liability for:
| |
● |
any
breach of the director’s duty of loyalty to us or our stockholders; |
| |
|
|
| |
● |
any
act or omission not in good faith or that involves intentional misconduct or a knowing violation of law; |
| |
|
|
| |
● |
any
act related to unlawful stock repurchases, redemptions or other distributions or payment of dividends; or |
| |
|
|
| |
● |
any
transaction from which the director derived an improper personal benefit. |
These
limitations of liability do not affect the availability of equitable remedies such as injunctive relief or rescission. Our Amended and
Restated Certificate of Incorporation also authorizes us to indemnify our officers, directors and other agents to the fullest extent
permitted under Delaware law.
As
permitted by Section 145 of the Delaware General Corporation Law, our Amended and Restated Bylaws will provide that:
| |
● |
we
may indemnify our directors, officers and employees to the fullest extent permitted by the Delaware General Corporation Law, subject
to limited exceptions; |
As
permitted by Section 102 of the Delaware General Corporation Law, we will adopt provisions in our Amended and Restated Certificate of
Incorporation and our Amended and Restated Bylaws that limit or eliminate the personal liability of our directors for a breach of their
fiduciary duty of care as a director. The duty of care generally requires that, when acting on behalf of the corporation, directors exercise
an informed business judgment based on all material information reasonably available to them. Consequently, a director will not be personally
liable to us or our stockholders for monetary damages for breach of fiduciary duty as a director, except for liability for:
| |
● |
any
breach of the director’s duty of loyalty to us or our stockholders; |
| |
● |
any
act or omission not in good faith or that involves intentional misconduct or a knowing violation of law; |
| |
|
|
| |
● |
any
act related to unlawful stock repurchases, redemptions or other distributions or payment of dividends; or |
| |
|
|
| |
● |
any
transaction from which the director derived an improper personal benefit. |
These
limitations of liability do not affect the availability of equitable remedies such as injunctive relief or rescission. Our Amended and
Restated Certificate of Incorporation also authorizes us to indemnify our officers, directors and other agents to the fullest extent
permitted under Delaware law.
As
permitted by Section 145 of the Delaware General Corporation Law, our Amended and Restated Bylaws will provide that:
| |
● |
we
may indemnify our directors, officers and employees to the fullest extent permitted by the Delaware General Corporation Law, subject
to limited exceptions. |
We
plan to enter into an underwriting agreement that provides that the underwriters are obligated, under some circumstances, to indemnify
our directors, officers and controlling persons against specified liabilities, including liabilities under the Securities Act.
ITEM
15. RECENT SALE OF UNREGISTERED SECURITIES
Preferred
Stock
The
Company has 10,000,000 shares of par value $0.0001 preferred stock authorized, of which no preferred shares are issued and outstanding
at August 15, 2022.
Common
Stock
The
Company has authorized 1,000,000,000 shares of par value $0.0001 common stock, of which 37,295,813 shares are outstanding at August
15, 2022.
The Company issued 500,000 restricted common shares
to founders, valued at $500 (based on the par value on the date of grant).
On October 19, 2020, the Company issued 33,686,169
common shares in conjunction with the Acquisition.
During the year ended December 31, 2020, the Company issued 1,015,344 common
shares to third parties in conjunction with the exchange of convertible promissory debentures.
On January 14, 2021, the Company issued a total of 47,000 shares of its
common stock valued at $82,250 (based on the estimated fair market value of the Company’s common stock on the date of issuance)
to a third party, for communications to the financial industry.
On February 19, 2021, a previous noteholder exercised
warrants pursuant to the cashless exercise provision of the warrant agreement into 57,147 common shares. The common shares have not been
issued as of November 10, 2021.
In April 2021, the Company initiated an offering of up to $1.5 million
of the Company’s restricted common shares. The offering allowed for qualified investors to purchase one share of the Company’s
common stock $1.25. For each share purchased, the investor received a five-year warrant to purchase one share of common stock at $1.75
per share. On May 10, 2021, the Company closed the offering to investors and subsequently disclosed that it resulted in the issuance of 1,172,000 shares of common stock and warrants to purchase
an aggregate of 1,172,000 shares of the Company’s common stock for total proceeds totaling $1,465,000.
On April 14, 2021, the Company issued a total of 47,000 shares of its common
stock valued at $82,250 (based on the estimated fair market value of the Company’s common stock on the date of issuance) to a third
party, for communications to the financial industry.
On May 10, 2021, Brio Capital elected to convert the aggregate principal
amount of a $110,000 convertible note issued on February 10, 2021 into 157,143 shares of the Company’s common stock.
On July 14, 2021, the Company issued a total of 47,000
shares of its restricted common stock valued at $47,000 (based on the stock price of the Company’s common stock on the date of issuance)
to a third party, for communications to the financial industry. This issuance was pursuant to Section 4(a)(2) of the Securities Act in a transaction exempt from registration.
On October 14, 2021, the Company issued a total of
47,000 shares of its restricted common stock valued at $37,600 (based on the stock price of the Company’s common stock on the date
of issuance) to a third party, for communications to the financial industry. This issuance was pursuant to Section 4(a)(2) of the Securities
Act in a transaction exempt from registration.
On October 20, 2021, the entered into a securities
purchase agreement with an accredited investor that resulted in the issuance of 320,000 shares of common stock and warrants to purchase
an aggregate of 320,000 shares of the Company’s common stock for total proceeds totaling $400,000. The offering allowed for qualified
investors to purchase one share of the Company’s common stock at $1.25. For each share purchased, the investor received a five-year
warrant to purchase one share of common stock at $1.25 per share. No commissions were paid in the offering. This issuance was pursuant
to Section 4(a)(2) of the Securities Act of 1933 in a transaction exempt from registration.
On
October 22, 2021, the Company and Osher amended the October 20, 2020 convertible debt agreements for the maturity date from October 20,
2021 to October 20, 2022. In exchange for the extension of the Notes, the Company issued Osher five-year warrants to purchase an aggregate
of 450,000 shares of the Company’s common stock at an exercise price of $1.00 per share.
On
October 25, 2021, Osher elected to convert the aggregate principal amount of the Note, $110,000, into 157,143 common shares.
On
October 28, 2021, Osher elected to convert $16,714 of the aggregate principal amount of the Note of $385,000, into 42,857 common shares.
On
March 23, 2022, the Company entered into an Original Issue Discount Senior Convertible Debentures (the “Note”) totaling (i)
$220,000 aggregate principal amount of Note due March 23, 2023 based on $1.00 for each $0.90909 paid by the previous noteholder and (ii)
five-year Common Stock Purchase Warrants (“Warrants’) to purchase up to an aggregate of 440,000 shares of the Company’s
Common Stock at an exercise price of $0.50 per share. The conversion price for the principal in
connection with voluntary conversions by the holders of the convertible notes is $0.50 per share.
On
April 28, 2022, the Company entered into an Original Issue Discount Senior Convertible Debenture (the “April 2022 Note”)
totaling (i) $110,000 aggregate principal amount of April 2022 Note due April 28, 2023 based on $1.00 for each $0.90909 paid by the previous
noteholder and (ii) five-year Common Stock Purchase Warrants (“Warrants’) to purchase up to an aggregate of 220,000 shares
of the Company’s Common Stock at an exercise price of $0.50 per share. The conversion price
for the principal in connection with voluntary conversions by the holders of the convertible notes is $0.50 per share.
On
May 10, 2022, the Company entered into an Original Issue Discount Senior Convertible Debenture (the “May 2022 Note”) totaling
(i) $110,000 aggregate principal amount of Note due May 10, 2023 based on $1.00 for each $0.90909 paid by the previous noteholder and
(ii) five-year Common Stock Purchase Warrants (“Warrants’) to purchase up to an aggregate of 220,000 shares of the Company’s
Common Stock at an exercise price of $0.50 per share. The conversion price for the principal in
connection with voluntary conversions by the holders of the convertible notes is $0.50 per share.
On
June 1, 2022, the Company entered into an Original Issue Discount Senior Convertible Debenture (the “Note”) totaling (i)
$55,000 aggregate principal amount of Note due June 1, 2023 based on $1.00 for each $0.90909 paid by the previous noteholder and (ii)
five-year Common Stock Purchase Warrants (“Warrants’) to purchase up to an aggregate of 110,000 shares of the Company’s
Common Stock at an exercise price of $0.50 per share. The conversion price for the principal in connection with voluntary conversions
by a holder of the convertible notes is $0.50 per share.
On
June 22, 2022, the Company entered into an Original Issue Discount Senior Convertible Debenture (the “Note”) totaling (i)
$82,500 aggregate principal amount of Note due June 22, 2023 based on $1.00 for each $0.90909 paid by the previous noteholder and (ii)
five-year Common Stock Purchase Warrants (“Warrants’) to purchase up to an aggregate of 165,000 shares of the Company’s
Common Stock at an exercise price of $0.50 per share. The conversion price for the principal in connection with voluntary conversions
by a holder of the convertible notes is $0.50 per share.
In
July 2022, the Company entered into an Original Issue Discount Senior Convertible Debentures (the “July 2022 Notes”) totaling
(i) $313,500 aggregate principal amount of Note (total of $285,000 cash was received) due in various dates in July 2023 based on $1.00
for each $0.90909 paid by the previous noteholder and (ii) five-year Common Stock Purchase Warrants (“Warrants’) to purchase
up to an aggregate of 627,000 shares of the Company’s Common Stock at an exercise price of $0.50 per share. The conversion price
for the principal in connection with voluntary conversions by the holders of the convertible notes is $0.50 per share.
These
issuances have been made pursuant to transactions exempt from registration under Section 4(a)(2) of the Securities Act.
During
the year ended December 31, 2020, the Company issued 1,015,344 common shares to third parties in conjunction with the exchange of convertible
promissory debentures.
Warrants
On
October 22, 2021, the Company and Osher amended convertible debt agreements for the maturity date from October 20, 2021 to October 20,
2022. In exchange for the extension of the Note, the Company issued Osher 450,000 warrants to purchase an aggregate of 450,000 shares
of the Company’s common stock, valued at $197,501 (based on the Black Scholes valuation model on the date of grant) (see Note 6).
The warrants are exercisable for a period of five years at $1.00 per share in whole or in part, as either a cash exercise or as a cashless
exercise, and fully vest at grant date. The Company is amortizing the value of the warrants ratably through October 20, 2022. The Company
recorded $40,041 and $0 for the years ended December 31, 2021 and 2020, respectively, and is classified in other expenses in the consolidated
Statements of Operations.
Current
Noteholders
Osher
– $457,380
On
January 28, 2020 (the “Original Issue Date”), the Company entered into a Securities Purchase Agreement (the “Purchase
Agreement”) with respect to the sale and issuance to institutional investor Osher Capital Partners LLC (“Osher”) of
(i) $385,000 aggregate principal amount of Original Issue Discount Senior Convertible Debenture due January 26, 2021, based on $1.00
for each $0.90909 paid by Osher and (ii) five-year Common Stock Purchase Warrants to purchase up to an aggregate of 80,209 shares of
the Company’s Common Stock at an exercise price of $7.00 per share. The aggregate cash subscription amount received by the Company
from Osher for the issuance of the note and warrants was $350,005 which was issued at a $34,995 original issue discount from the face
value of the Note. The conversion price for the principal in connection with voluntary conversions by a holder of the convertible notes
is $0.094 per share, as amended on October 20, 2020, subject to adjustment as provided therein, such as stock splits and stock dividends.
The
Company and Osher amended the convertible debt agreement as follow-on October 20, 2020:
| |
● |
The
parties amended the Warrants dated January 28, 2020, for the number of warrant shares from 80,209 warrant shares to 4,113,083 warrant
shares at an exercise price of $0.14 per share. |
| |
● |
The
parties amended the Note for the maturity date from June 23,2021 to October 20, 2021. |
On
October 22, 2021, the Company and Osher amended convertible debt agreements as follows:
| |
● |
The
parties amended the October 20,2020 Notes for the maturity date from October 20, 2021 to October 20, 2022. |
| |
● |
The
parties amended the October 20,2020 Notes for the aggregate principal amount and accrued interest from $652,300 to $717,530 which
is issued at a $65,230 original issue discount from the face value of the October 20, 2020 Notes now due October 20, 2022. |
| |
● |
In
exchange for the extension of the Note, the Company issued Osher five-year warrants to purchase an aggregate of 450,000 shares of
the Company’s common stock at an exercise price of $1.00 per share. |
Osher
– $60,500
On
June 23, 2020 (the “Original Issue Date”), the Company entered into a (i) $50,000 aggregate principal amount of Original Issue Discount Senior Convertible Debenture (the “Note”) due June 23,
2021, based on $1.00 for each $0.90909 paid by Osher and (ii) five-year Common Stock Purchase Warrants (“Warrants”) to purchase
up to an aggregate of 10,000 shares of the Company’s Common Stock at an exercise price of $30.00 per share. The aggregate cash
subscription amount received by the Company from Osher for the issuance of the Note and Warrants was $50,005 which was issued at a $0
original issue discount from the face value of the Note. The conversion price for the principal in connection with voluntary conversions
by a holder of the convertible notes is $0.39 per share, as amended on October 20, 2020, subject to adjustment as provided therein, such
as stock splits and stock dividends.
The
Company and Osher amended the convertible debt agreement as follow-on October 20, 2020:
| |
● |
The
parties amended the Note for the aggregate principal amount from $50,000 to $55,000. The aggregate cash subscription amount received
by the Company from Osher for the issuance of the Note and Warrants was $50,005 which was issued at an amended $4,995 original issue
discount from the face value of the Note. |
| |
● |
The
parties amended the Warrants dated June 23, 2020, for the number of warrant shares from 10,000 warrant shares to 141,020 warrant
shares at an exercise price of $0.59 per share. |
| |
● |
The
parties amended the Note for the maturity date from June 23, 2021 to October 20, 2021. |
On
October 22, 2021, the Company and Osher amended convertible debt agreements as follows:
| |
● |
The
parties amended the October 20, 2020 Notes for the maturity date from October 20, 2021 to October 20, 2022. |
| |
● |
The
parties amended the October 20, 2020 Notes for the aggregate principal amount and accrued interest from $652,300 to $717,530 which
is issued at a $65,230 original issue discount from the face value of the October 20, 2020 Notes now due October 20, 2022. |
| |
● |
In
exchange for the extension of the Note, the Company issued Osher five-year warrants to purchase an aggregate of 450,000 shares of
the Company’s common stock at an exercise price of $1.00 per share. |
Osher
– $199,650
On
September 17, 2020 (the “Original Issue Date”), the Company entered into a (i) $181,500 aggregate principal amount of
Original Issue Discount Senior Convertible Debenture (the “Note”) due September 30, 2021, based on $1.00 for each
$0.90909 paid by Osher and (ii) five-year Common Stock Purchase Warrants (“Warrants’) to purchase up to an aggregate of
8,250 shares of the Company’s Common Stock at an exercise price of $30.00 per share. The aggregate cash subscription amount
received by the Company from Osher for the issuance of the Note and Warrants was $165,000 which was issued at a $16,500 original
issue discount from the face value of the Note. The conversion price for the principal in connection with voluntary conversions by a
holder of the convertible notes is $0.39 per share, as amended on October 20, 2020, subject to adjustment as provided therein, such
as stock splits and stock dividends.
The
Company and Osher amended the convertible debt agreement as follow-on October 20, 2020:
| |
● |
The
parties amended the Warrants dated September 17, 2020, for the number of warrant shares from 8,250 warrant shares to 465,366 warrant
shares at an exercise price of $0.59 per share. |
| |
● |
The
parties amended the Note for the maturity date from September 30, 2021 to October 20, 2021. |
On
October 22, 2021, the Company and Osher amended convertible debt agreements as follows:
| |
● |
The
parties amended the October 20, 2020 Notes for the maturity date from October 20, 2021 to October 20, 2022. |
| |
● |
The
parties amended the October 20, 2020 Notes for the aggregate principal amount and accrued interest from $652,300 to $717,530 which
is issued at a $65,230 original issue discount from the face value of the October 20, 2020 Notes now due October 20, 2022. |
| |
● |
In
exchange for the extension of the Note, the Company issued Osher five-year warrants to purchase an aggregate of 450,000 shares of
the Company’s common stock at an exercise price of $1.00 per share. |
On
October 28, 2021, Osher elected to convert $16,714 of the aggregate principal amount of the Note of $199,650, into 42,857 common shares.
On
March 23, 2022, the Company entered into an Original Issue Discount Senior Convertible Debentures (the “Note”) totaling (i)
$220,000 aggregate principal amount of Note due March 23, 2023 based on $1.00 for each $0.90909 paid by the previous noteholder and (ii)
five-year Common Stock Purchase Warrants (“Warrants’) to purchase up to an aggregate of 440,000 shares of the Company’s
Common Stock at an exercise price of $0.50 per share. The conversion price for the principal in connection with voluntary conversions
by the holders of the convertible notes is $0.50 per share.
On
April 28, 2022, the Company entered into an Original Issue Discount Senior Convertible Debentures (the “Note”) totaling (i)
$220,000 aggregate principal amount of Note due April 28, 2023 based on $1.00 for each $0.90909 paid by the previous noteholder and (ii)
five-year Common Stock Purchase Warrants (“Warrants’) to purchase up to an aggregate of 440,000 shares of the Company’s
Common Stock at an exercise price of $0.50 per share. The conversion price for the principal in connection with voluntary conversions
by the holders of the convertible notes is $0.50 per share.
These
issuances have been made pursuant to transactions exempt from registration under Section 4(a)(2) of the Securities Act.
Osher
– $110,000 (Note 12)
On
September 20, 2022, the Company entered into an Original Issue Discount Senior Convertible Debenture (the “Note”) with respect
to the sale and issuance to institutional investor Osher Capital Partners LLC (“Osher”) of (i) $110,000 aggregate principal
amount of Note due September 20, 2023 based on $1.00 for each $0.90909 paid by the previous noteholder and (ii) five-year Common Stock
Purchase Warrants (“Warrants’) to purchase up to an aggregate of 733,333 shares of the Company’s Common Stock at an
exercise price of $0.25 per share. The aggregate cash subscription amount received by the Company from the previous noteholder for the
issuance of the Note and Warrants was $100,000 which was issued at a $10,000 original issue discount from the face value of the Note.
The conversion price for the principal in connection with voluntary conversions by a holder of the convertible notes is $0.15 per share,
subject to adjustment as provided therein, such as stock splits and stock dividends.
Brio
– $82,500 (Note 11)
On
September 9, 2022, the Company entered into an Original Issue Discount Senior Convertible Debenture (the “Note”) with respect
to the sale and issuance to institutional investor Brio Capital Master Fund Ltd. (“Brio”) of (i) $82,500 aggregate principal
amount of Note due September 9, 2023 based on $1.00 for each $0.90909 paid by the previous noteholder and (ii) five-year Common Stock
Purchase Warrants (“Warrants’) to purchase up to an aggregate of 550,000 shares of the Company’s Common Stock at an
exercise price of $0.25 per share. The aggregate cash subscription amount received by the Company from the previous noteholder for the
issuance of the Note and Warrants was $75,000 which was issued at a $7,500 original issue discount from the face value of the Note. The
conversion price for the principal in connection with voluntary conversions by a holder of the convertible notes is $0.15 per share,
subject to adjustment as provided therein, such as stock splits and stock dividends.
Osher
– $110,000 (Note 10)
On
August 31, 2022, the Company entered into an Original Issue Discount Senior Convertible Debenture (the “Note”) with respect
to the sale and issuance to institutional investor Osher Capital Partners LLC (“Osher”) of (i) $110,000 aggregate principal
amount of Note due August 31, 2023 based on $1.00 for each $0.90909 paid by the previous noteholder and (ii) five-year Common Stock Purchase
Warrants (“Warrants’) to purchase up to an aggregate of 733,333 shares of the Company’s Common Stock at an exercise
price of $0.25 per share. The aggregate cash subscription amount received by the Company from the previous noteholder for the issuance
of the Note and Warrants was $100,000 which was issued at a $10,000 original issue discount from the face value of the Note. The conversion
price for the principal in connection with voluntary conversions by a holder of the convertible notes is $0.15 per share, subject to
adjustment as provided therein, such as stock splits and stock dividends.
Other
– $341,000 (Note 9)
In
July 2022, the Company entered into an Original Issue Discount Senior Convertible Debentures (the “July 2022 Notes”) totaling
(i) $341,000 aggregate principal amount of Note (total of $310,000 cash was received) due in various dates in July 2023 based on $1.00
for each $0.90909 paid by the previous noteholder and (ii) five-year Common Stock Purchase Warrants (“Warrants’) to purchase
up to an aggregate of 676,936 shares of the Company’s Common Stock at an exercise price of $0.50 per share. The conversion price
for the principal in connection with voluntary conversions by the holders of the convertible notes is $0.50 per share.
Osher
– $82,500 (Note 8)
On
June 22, 2022, the Company entered into an Original Issue Discount Senior Convertible Debenture (the “Note”) with respect
to the sale and issuance to institutional investor Osher Capital Partners LLC (“Osher”) of (i) $82,500 aggregate principal
amount of Note due June 22, 2023 based on $1.00 for each $0.90909 paid by the previous noteholder and (ii) five-year Common Stock Purchase
Warrants (“Warrants’) to purchase up to an aggregate of 165,000 shares of the Company’s Common Stock at an exercise
price of $0.50 per share. The aggregate cash subscription amount received by the Company from the previous noteholder for the issuance
of the Note and Warrants was $75,000 which was issued at a $7,500 original issue discount from the face value of the Note. The conversion
price for the principal in connection with voluntary conversions by a holder of the convertible notes is $0.50 per share, subject to
adjustment as provided therein, such as stock splits and stock dividends.
Osher
– $55,000 (Note 7)
On
June 1, 2022, the Company entered into an Original Issue Discount Senior Convertible Debenture (the “Note”) with respect
to the sale and issuance to institutional investor Osher Capital Partners LLC (“Osher”) of (i) $55,000 aggregate principal
amount of Note due June 1, 2023 based on $1.00 for each $0.90909 paid by the previous noteholder and (ii) five-year Common Stock Purchase
Warrants (“Warrants’) to purchase up to an aggregate of 110,000 shares of the Company’s Common Stock at an exercise
price of $0.50 per share. The aggregate cash subscription amount received by the Company from the previous noteholder for the issuance
of the Note and Warrants was $50,000 which was issued at a $5,000 original issue discount from the face value of the Note. The conversion
price for the principal in connection with voluntary conversions by a holder of the convertible notes is $0.50 per share, subject to
adjustment as provided therein, such as stock splits and stock dividends.
Brio
– $110,000 (Note 6)
On
May 10, 2022, the Company entered into an Original Issue Discount Senior Convertible Debenture (the “Note”) with respect
to the sale and issuance to institutional investor Brio Capital Master Fund Ltd. (“Brio”) of (i) $110,000 aggregate principal
amount of Note due May 10, 2023 based on $1.00 for each $0.90909 paid by the previous noteholder and (ii) five-year Common Stock Purchase
Warrants (“Warrants’) to purchase up to an aggregate of 220,000 shares of the Company’s Common Stock at an exercise
price of $0.50 per share. The aggregate cash subscription amount received by the Company from the previous noteholder for the issuance
of the Note and Warrants was $100,000 which was issued at a $10,000 original issue discount from the face value of the Note. The conversion
price for the principal in connection with voluntary conversions by a holder of the convertible notes is $0.50 per share, subject to
adjustment as provided therein, such as stock splits and stock dividends.
Convertible
Promissory Debentures
Osher
– $110,000
On
October 20, 2022, the Company entered into an Original Issue Discount Senior Convertible Debenture (the “Note”) with respect
to the sale and issuance to institutional investor Osher Capital Partners LLC (“Osher”) of (i) $110,000 aggregate principal
amount of Note due October 20, 2023 based on $1.00 for each $0.90909 paid by the previous noteholder and (ii) five-year Common Stock
Purchase Warrants (“Warrants’) to purchase up to an aggregate of 733,333 shares of the Company’s Common Stock at an
exercise price of $0.25 per share. The aggregate cash subscription amount received by the Company from the previous noteholder for the
issuance of the Note and Warrants was $100,000 which was issued at a $10,000 original issue discount from the face value of the Note.
The conversion price for the principal in connection with voluntary conversions by a holder of the convertible notes is $0.15 per share,
subject to adjustment as provided therein, such as stock splits and stock dividends.
Brio
– $82,500
On
November 9, 2022, the Company entered into an Original Issue Discount Senior Convertible Debenture (the “Note”) with respect
to the sale and issuance to institutional investor Brio Capital Master Fund Ltd. (“Brio”) of (i) $82,500 aggregate principal
amount of Note due November 9, 2023 based on $1.00 for each $0.90909 paid by the previous noteholder and (ii) five-year Common Stock
Purchase Warrants (“Warrants’) to purchase up to an aggregate of 550,000 shares of the Company’s Common Stock at an
exercise price of $0.25 per share. The aggregate cash subscription amount received by the Company from the previous noteholder for the
issuance of the Note and Warrants was $75,000 which was issued at a $7,500 original issue discount from the face value of the Note. The
conversion price for the principal in connection with voluntary conversions by a holder of the convertible notes is $0.15 per share,
subject to adjustment as provided therein, such as stock splits and stock dividends.
Osher
– $55,000
On
November 14, 2022, the Company entered into an Original Issue Discount Senior Convertible Debenture (the “Note”) with respect
to the sale and issuance to institutional investor Osher Capital Partners LLC (“Osher”) of (i) $55,000 aggregate principal
amount of Note due November 14, 2023 based on $1.00 for each $0.90909 paid by the previous noteholder and (ii) five-year Common Stock
Purchase Warrants (“Warrants’) to purchase up to an aggregate of 366,667 shares of the Company’s Common Stock at an
exercise price of $0.25 per share. The aggregate cash subscription amount received by the Company from the previous noteholder for the
issuance of the Note and Warrants was $50,000 which was issued at a $5,000 original issue discount from the face value of the Note. The
conversion price for the principal in connection with voluntary conversions by a holder of the convertible notes is $0.15 per share,
subject to adjustment as provided therein, such as stock splits and stock dividends.
Other
– $145,200
On
November 21, 2022, the Company entered into an Original Issue Discount Senior Convertible Debenture (the “Note”) with respect
to the sale and issuance to institutional investor Osher Capital Partners LLC (“Osher”) of (i) $145,200 aggregate principal
amount of Note due November 21, 2023 based on $1.00 for each $0.90909 paid by the previous noteholder and (ii) five-year Common Stock
Purchase Warrants (“Warrants’) to purchase up to an aggregate of 968,000 shares of the Company’s Common Stock at an
exercise price of $0.25 per share. The aggregate cash subscription amount received by the Company from the previous noteholder for the
issuance of the Note and Warrants was $132,000 which was issued at a $13,200 original issue discount from the face value of the Note.
The conversion price for the principal in connection with voluntary conversions by a holder of the convertible notes is $0.15 per share,
subject to adjustment as provided therein, such as stock splits and stock dividends.
On
November 23, 2022, the noteholder elected to convert the aggregate principal amount of the Note, $145,200, into 968,000 common shares.
ITEM
16. EXHIBITS
Exhibit
Number |
|
Description |
| 1.1 |
|
Form
of Underwriting Agreement** |
| |
|
|
| 3.1*
|
|
Amended and Restated Certificate of Incorporation, as filed with the Secretary of State of the State of Delaware on December 22, 2015 and as currently in effect. (Filed as Exhibit 3.1 to the Current Report on Form 8-K filed by the Registrant on December 24, 2015 and incorporated herein by reference) |
| |
|
|
| 3.2* |
|
Bylaws of the Registrant, as currently in effect (Filed as Exhibit 3.2 to the Registration Statement on Form S-1 filed by the Registrant on May 27, 2015, and incorporated herein by reference). |
| |
|
|
| 3.3 |
|
Amendment to the Certificate of Incorporation of the Registration*** |
| |
|
|
| 4.1 |
|
Form
of Representative’s Warrant** |
| |
|
|
| 4.2 |
|
Certificate of Designation for Series B Preferred Stock* |
| |
|
|
| 4.3 |
|
Form of Series A Warrant** |
| |
|
|
| 5.1
|
|
Legal
opinion of Jolie Kahn Esq. (to be added by amendment) ** |
| |
|
|
| 10.1 |
|
Share
Exchange Agreement dated August 25, 2020 (Filed as Exhibit 10.1 to the Current Report on Form 8-Kfiled by the Registrant on August
31, 2020 and incorporated herein by reference)* |
| |
|
|
| 10.2 |
|
Operating Lease* |
| |
|
|
| 10.3 |
|
Employment
Agreement for Jeremy Ferrell (Filed as Exhibit 99.1 to the Current Report on Form 8-K filed by the Registrant on March 9, 2022 and
incorporated herein by reference)* |
| |
|
|
| 10.4 |
|
January 2020 Financing Documents and Extensions* |
| |
|
|
| 10.5 |
|
June 23, 2020 Financing Documents* |
| |
|
|
| 10.6 |
|
September 17, 2020 Financing Documents* |
| |
|
|
| 10.7 |
|
Senior Convertible Debenture dated May 10, 2022 (filed as Exhibit 10.21 to S-1/A filed on August 29, 2022)* |
| |
|
|
| 10.8 |
|
Warrant dated May 10, 2022 (filed as Exhibit 10.22 to S-1/A filed on August 29, 2022)* |
| |
|
|
| 10.9 |
|
Warrant dated October 18, 2021 (filed as Exhibit 10.24 to S-1/A filed on August 29, 2022)* |
| |
|
|
| 10.10 |
|
Senior Convertible Debenture dated March 23, 2022 (filed as Exhibit 10.25 to S-1/A filed on August 29, 2022)* |
| 10.11 |
|
Warrant dated March 23, 2022 (filed as Exhibit 10.26 to S-1/A filed on August 29, 2022)* |
| |
|
|
| 10.12 |
|
Senior Convertible Debenture dated March 23, 2022 (filed as Exhibit 10.27 to S-1/A filed on August 29, 2022)* |
| |
|
|
| 10.13 |
|
Warrant dated March 23, 2022 (filed as Exhibit 10.28 to S-1/A filed on August 29, 2022)* |
| |
|
|
| 10.14 |
|
Senior Convertible Debenture dated April 28, 2022 (filed as Exhibit 10.29 to S-1/A filed on August 29, 2022)* |
| |
|
|
| 10.15 |
|
Warrant dated April 28, 2022 (filed as Exhibit 10.30 to S-1/A filed on August 29, 2022)* |
| |
|
|
| 10.16 |
|
June 1, 2022 Financing Documents* |
| |
|
|
| 10.17 |
|
June 22, 2022 Financing Documents* |
| |
|
|
| 10.18 |
|
Set of Form Documents for July 2022 Financing* |
| |
|
|
| 10.19 |
|
August 31, 2022 Financing Documents* |
| |
|
|
| 10.20 |
|
September 9, 2022 Financing Documents* |
| |
|
|
| 10.21 |
|
October 20, 2022 Financing Documents* |
| |
|
|
| 10.22 |
|
November 9, 2022 Financing Documents*** |
| |
|
|
| 10.23 |
|
November 14, 2022 Financing Documents*** |
| |
|
|
| 10.24 |
|
November 21, 2022 Financing Documents*** |
| |
|
|
| 21.1 |
|
Subsidiaries of the Registrant (filed as Exhibit 21.1 to S-1/A filed on August 29, 2022)* |
| |
|
|
| 23.1 |
|
Consent of Paris Kreit & Chiu CPA LLP*** |
| |
|
|
| 23.2 |
|
Consent
Jolie Kahn Esq. (included in Exhibit 5.1)** |
| |
|
|
| 107 |
|
Calculation of Filing Fee Table* |
| |
|
|
| * |
|
Previously
filed. |
| ** |
|
To
be filed by amendment |
| *** |
|
Filed herewith |
| + |
|
Management
contract or compensatory plan |
All
references to Registrant’s Forms 8-K, 10-K and 10-Q include reference to File No. 000-55575
ITEM
17. UNDERTAKINGS
The
undersigned registrant hereby undertakes to:
| (1)
|
File,
during any period in which it offers or sells securities, a post-effective amendment to this registration statement to: |
| |
(I)
|
Include
any prospectus required by Section 10(a)(3) of the Securities Act; |
| |
|
|
| |
(ii)
|
Reflect
in the prospectus any facts or events which, individually or together, represent a fundamental change in the information in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the
“Calculation of Registration Fee” table in the effective registration statement; |
| |
(iii)
|
Include
any additional or changed material information on the plan of distribution. |
| (2)
|
For
determining liability under the Securities Act, each post-effective amendment shall be deemed to be a new registration statement
of the securities offered, and the offering of the securities at that time shall be deemed to be the initial bona fide offering. |
| |
|
| (3)
|
File
a post-effective amendment to remove from registration any of the securities that remain unsold at the end of the offering. |
| |
|
| (4)
|
For
determining liability of the undersigned registrant under the Securities Act to any purchaser in the initial distribution of the
securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant
to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities
are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller
to the purchaser and will be considered to offer or sell such securities to such purchaser: |
| |
(i)
|
Any
preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule
424; |
| |
|
|
| |
(ii)
|
Any
free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by
the undersigned registrant; |
| |
|
|
| |
(iii)
|
The
portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant
or its securities provided by or on behalf of the undersigned registrant; and |
| |
|
|
| |
(iv)
|
Any
other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
The
undersigned registrant hereby undertakes to provide to the underwriter at the closing specified in the underwriting agreement certificates
in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser.
Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such
indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer,
or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification
by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
The
undersigned registrant hereby undertakes that:
(1)
For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed
as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant
to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time
it was declared effective.
(2)
For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the registrant has duly caused this Amendment No. 3 to Registration Statement
to be signed on its behalf by the undersigned hereunto duly authorized.
| |
Sigyn
Therapeutics, Inc. |
| |
|
|
| Dated:
December 22, 2022 |
By: |
/s/
James Joyce |
| |
|
James
Joyce |
| |
|
Chief
Executive Officer and Director |
| |
|
(Principal
Executive Officer) |
| |
|
|
| Dated:
December 22, 2022 |
By: |
/s/
Jeremy Ferrell |
| |
|
Jeremy
Ferrell |
| |
|
Chief
Financial Officer |
| |
|
(Principal
Financial and Accounting Officer) |
Each
of the undersigned, whose signature appears below, hereby constitutes and appoints James Joyce and Jeremy Ferrell and each of them, as
his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, to do any and all acts and
things and execute, in the name of the undersigned, any and all instruments which said attorney-in-fact and agent may deem necessary
or advisable in order to enable the Company to comply with the Securities Act and any requirements of the SEC in respect thereof, in
connection with the filing with the SEC of this Registration Statement on Form S-1 under the Securities Act, including specifically but
without limitation, power and authority to sign the name of the undersigned to such Registration Statement, and any amendments to such
Registration Statement, and any additional Registration Statement filed pursuant to Rule 462(b), and to file the same with all exhibits
thereto and other documents in connection therewith, with the SEC, to sign any and all applications, registration statements, notices
or other documents necessary or advisable to comply with applicable state securities laws, and to file the same, together with other
documents in connection therewith with the appropriate state securities authorities, granting unto said attorney-in-fact and agent, full
power and authority to do and to perform each and every act and thing requisite or necessary to be done in and about the premises, as
fully and to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorney-in-fact
and agent, or his substitute, may lawfully do or cause to be done by virtue hereof.
Pursuant
to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities
and on the dates indicated:
| Name |
|
Title |
|
Date |
| |
|
|
|
|
| /s/
Mr. James Joyce |
|
Chief
Executive Officer and Director |
|
December
22, 2022 |
| Mr.
James Joyce |
|
|
|
|
| |
|
|
|
|
| /s/
Mr. Craig Roberts |
|
Chief
Technology Officer and Director |
|
December
22, 2022 |
| Mr.
Craig Roberts |
|
|
|
|
| |
|
|
|
|
| /s/
Mr. Jeremy Ferrell |
|
Chief
Financial Officer |
|
December
22, 2022 |
| Mr.
Jeremy Ferrell |
|
|
|
|
| |
|
|
|
|
| /s/
Richa Nand |
|
Director |
|
December
22, 2022 |
| Richa
Nand |
|
|
|
|
| |
|
|
|
|
| /s/
Jim Dorst |
|
Director |
|
December
22, 2022 |
| Jim
Dorst |
|
|
|
|
| |
|
|
|
|
| /s/
Chris Wetzel |
|
Director |
|
December
22, 2022 |
| Chris
Wetzel |
|
|
|
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Sigyn Therapeutics (QB) (USOTC:SIGY)
Gráfica de Acción Histórica
De Nov 2024 a Dic 2024
Sigyn Therapeutics (QB) (USOTC:SIGY)
Gráfica de Acción Histórica
De Dic 2023 a Dic 2024
