BIOFORCE NANOSCIENCES HOLDINGS, INC. - Quarter Report: 2020 September (Form 10-Q)

U.S. SECURITIES AND EXCHANGE COMMISSION

 Washington, D.C. 20549

FORM 10-Q

[X]   QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2020.

  [   ]   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number:  000-51074

BIOFORCE NANOSCIENCES HOLDINGS, INC.

 (Exact name of registrant as specified in its charter)

Registrant’s telephone number, including area code: 757-306-6090

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  [X]        No  [  ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes  [X ]        No  [   ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,”  “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

-1-

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  [   ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  [  ]    No  [X]

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: At October 22, 2020 the registrant had outstanding 15,271,755 shares of common stock, par value $0.001 per share post split one-for-five (1-for-5) reverse stock-split which became effective on February 28, 2020.

TABLE OF CONTENTS

-2-

 PART I – FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

BIOFORCE NANOSCIENCES HOLDINGS, INC.

INDEX TO FINANCIAL STATEMENTS

-3-

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

-4-

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

-5-

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

-6-

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

-8-

BIOFORCE NANOSCIENCES HOLDINGS, INC. and SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS

NOTE 1 – Organization & Description of Business

The Company was incorporated in the State of Nevada on December 10, 1999 as Silver River Ventures, Inc.  On February 24, 2006, the Company completed the acquisition of BioForce Nanosciences Holdings Inc. (“BioForce”), a Delaware corporation, and changed the corporate name at that time. The acquisition was made pursuant to an agreement entered into on November 30, 2005 ("Merger Agreement"), whereby we agreed to merge our newly created, wholly owned subsidiary, Silver River Acquisitions, Inc., with and into BioForce, with BioForce being the surviving entity.  On May 6, 2020, the Company purchased 100,000 shares of Element Acquisition Corporation for $1,000 which then became a wholly owned subsidiary. The Company’s mission is to become a leading provider of vitamin, mineral and other nutritional supplements, powders and beverages, formulated to promote a healthier lifestyle for active individuals in all age ranges.  

NOTE 2 – Summary of Significant Accounting Policies

Basis of Presentation

The accompanying condensed consolidated balance sheet has been derived from the December 31, 2019 audited financial statements and the unaudited condensed consolidated financial statements as of September 30, 2020 and 2019, have been prepared in accordance with generally accepted accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements, and should be read in conjunction with the audited financial statements and related footnotes included in our Annual report on Form 10-K for the year ended December 31, 2019 (the “2019 Annual Report”), filed with the Securities and Exchange Commission (the “SEC”).  It is management’s opinion, however, that all material adjustments (consisting of normal recurring adjustments), have been made which are necessary for fair condensed consolidated financial statements presentation. Operating results for the three and nine months ended September 30, 2020, are not necessarily indicative of the results of operations expected for the year ending December 31, 2020.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of Bioforce Nanosciences Holdings, Inc., and its wholly owned subsidiary, Element Acquisition Corporation, (the “Company”).  All significant inter-company balances have been eliminated in consolidation.  

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

-9-

BIOFORCE NANOSCIENCES HOLDINGS, INC. and SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS

NOTE 2 – Summary of Significant Accounting Policies - continued

Earnings (Loss) per Share

Earnings (loss) per share of common stock are computed in accordance with FASB ASC 260 “Earnings per Share”.  Basic earnings (loss) per share are computed by dividing income or loss available to common shareholders by the weighted-average number of common shares outstanding for each period.  Diluted earnings per share are calculated by adjusting the weighted average number of shares outstanding assuming conversion of all potentially dilutive stock options, warrants and convertible securities, if dilutive. Common stock equivalents that are anti-dilutive are excluded from both diluted weighted average number of common shares outstanding and diluted earnings (loss) per share.

Stock-Based Compensation 

We account for employee and non-employee stock-based compensation in accordance with the guidance of FASB ASC Topic 718, Compensation—Stock Compensation, which requires all share-based payments, including grants of stock options, to be recognized in the financial statements based on their fair values.  The fair value of the equity instrument is charged directly to compensation expense and credited to additional paid-in capital over the period during which services are rendered.

Fair Value of Financial Instruments

The estimated fair values for financial instruments are determined at discrete points in time based on relevant market information. These estimates involve uncertainties and cannot be determined with precision. The carrying amounts of accounts payable and accrued liabilities approximate fair value given their short term nature or effective interest rates.

Revenue Recognition

Beginning January 1, 2018, the Company implemented ASC 606, Revenue from Contracts with Customers.  Although the new revenue standard is expected to have an immaterial impact, if any, on our ongoing net income, we did implement changes to our processes related to revenue recognition and the control activities within them.  These included the development of new policies based on the five-step model provided in the new revenue standard, ongoing contract review requirements, and gathering of information provided for disclosures.

The Company recognizes revenue and cost of goods sold from product sales or services rendered when control of the promised goods are transferred to our clients in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods and services.  To achieve this core principle, we apply the following five steps:  identify the contract with the client, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to performance obligations in the contract and recognize revenues when or as the Company satisfies a performance obligation.  

-10-

BIOFORCE NANOSCIENCES HOLDINGS, INC. and SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS

NOTE 3 – Recently Issued Accounting Standards

The Company has implemented all new accounting pronouncements that are in effect and is evaluating any that may impact its financial statements, including the new lease standard.  The Company does not have any leases and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

NOTE 4 – Going Concern 

The Company’s condensed consolidated financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has reported recurring losses from operations.  As a result, there is an accumulated deficit at September 30, 2020 and December 31, 2019. These conditions raise substantial doubt as to the Company's ability to continue as a going concern.

While the Company is attempting to continue operations and generate revenues, the Company’s cash position may not be significant enough to support the Company’s daily operations.    Management believes that the actions presently being taken to further implement the Company’s business plan; to expand sales with a dynamic marketing campaign and generate revenues provide the opportunity for the Company to continue as a going concern.  While the Company believes in the viability of its strategy to generate revenues and in its ability to raise additional funds, there can be no assurances to that effect.  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.

NOTE 5 – Related Party Transactions

The Company’s Director, Secretary and Acting CFO, Richard Kaiser, is the operator of Yes International, a full-service investor relations firm.  He handles duties of the Company regarding his officer capacities as the Secretary and Acting CFO, but also provides investor relations services through Yes International for the Company at no charge.

During the three months ended September 30, 2020 and 2019, two (2) board of directors paid all expenses of the Company in the amount of $8,642 and $7,756, respectively.  The amount paid during the three months ended September 30, 2019 was not to be reimbursed therefore, additional paid in capital was increased by $7,756, for the three months ended September 30, 2019.

During the nine months ended September 30, 2020 and 2019, two (2) board of directors paid all expenses of the Company in the amount of $56,018 and $31,663, respectively.  Due to related parties was $56,018 at September 30, 2020.  The amount paid during the nine months ended September 30, 2019 was not to be reimbursed therefore, additional paid in capital was increased by $31,663, for the nine months ended September 30, 2019.

-11-

BIOFORCE NANOSCIENCES HOLDINGS, INC. and SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS

NOTE 6 – Stock

Preferred Stock

Preferred stock consists of 100,000,000 shares authorized at $0.001 par value.  10,000,000 of these preferred shares have been separately allocated to Series A Preferred. Preferred stock can be converted into 100 shares of common stock, have dividend rights at 100 times common and have voting rights equal to 100 shares of common stock. At September 30, 2020 and December 31, 2019 there were 2,000,000 and -0- Series A Preferred shares issued and outstanding, respectively.  During the nine months ended September 30, 2020, 2,000,000 shares were issued to two (2) of the board of directors for compensation in the amount of $158,000,000.  The fair value of the shares issued was based on the market price of the Company’s common stock of $0.79 on the measurement date, multiplied by the conversion rate to common.

Common Stock

Common stock consists of 900,000,000 shares authorized at $0.001 par value.  On November 25, 2019, the board of directors approved a 5 to 1 reverse split.  The reverse has been retrospectively accounted for at January 1, 2019 in the statements of changes in stockholders’ equity.  At September 30, 2020 and December 31, 2019 there were 15,271,755 and 15,270,588 shares issued and outstanding, respectively.  

During the nine months ended September 30, 2020, the Company issued 1,167 shares of common stock in exchange for product payment that was recorded in stock payable in the amount of $1,339 at December 31, 2019.  The fair value of the shares issued was based on the market price of the Company’s common stock on the measurement date.

During the three months ended September 30, 2019, the Company issued 2,866 shares of common stock in exchange for product payment that was recorded in accounts payable in the amount of $5,015.  The fair value of the shares issued was based on the market price of the Company’s common stock on the measurement date.

During the nine months ended September 30, 2019, the Company issued 4,407 shares of common stock in exchange for product payment that was recorded in accounts payable in the amount of $13,255.  The fair value of the shares issued was based on the market price of the Company’s common stock on the measurement date.

NOTE 7 – Risks and Uncertainties

For the three and nine months ended September 30, 2019 the Company’s sales were with one (1) customer and amounted to $5,962 and $17,775, respectively.  For the three and nine months ended September 30, 2019, the Company’s purchases were with one (1) vendor and amounted to $4,240 and $13,415, respectively.

Coronavirus Impact (COVID-19) 

Due to the recent outbreak of the coronavirus reported in many countries worldwide, local and federal governments have issued travel advisories, canceled large scale public events and closed schools. In addition, companies have begun to cancel conferences and travel plans and require employees to work from home. Global financial markets have also experienced extreme volatility and disruptions to capital and credit markets.

We are unable to predict the impact of the coronavirus on our operations at this time. Adverse events such as health-related concerns about working in our offices, the inability to travel, potential impact on our business partners and customers, and other matters affecting the general work and business environment could harm our business and delay the implementation of our business strategy. The adverse events may also adversely impact our ability to raise capital or to continue as a going concern. We continue to monitor the recent outbreak of the coronavirus on our operations.

NOTE 8 – Subsequent Events

On July 14, 2020, a "Memorandum of Understanding" (MOU) was entered into by both the management entities of BioForce NanoSciences Holdings, Inc. (BFNH) and Element Global, Inc. (ELGL). The MOU provided for non-binding terms and conditions whereas BFNH could possibly take over ELGL through a merger of the entity, its subsidiaries, and its assets. The management at Element Global, Inc. notified the management at BioForce NanoSciences Holdings, Inc. with their decision not to pursue any assets purchase agreement(s) or a complete merger of their entity, Element Global, Inc with BioForce NanoSciences Holdings, Inc. Per terms of the non-binding MOU, the possible arrangement between the two entities is now null and void, and no definitive agreement on the intended takeover of ELGL or any of its assets to occur by BFNH. On October 09, 2020, the Company filed a Form 8-K stating that the Board of Directors at BioForce NanoSciences Holdings, Inc. cancelled and voided the July 14, 2020 "Memorandum of Understanding" (MOU) with Element Global, Inc.

The Company on October 15, 2020 changed the name of its wholly-owned subsidiary Element Acquistion Corporation, a Wyoming corporation, to BioForce Nanosciences Holdings, Inc, a Wyoming corporation.

-12-

ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following information should be read in conjunction with our financial statements and related notes thereto included in Part I, Item 1, above.

Forward Looking Statements

Certain matters discussed herein are forward-looking statements. Such forward-looking statements contained in this Form 10-Q involve risks and uncertainties, including statements as to:

        ·our future strategic plans

        ·our future operating results;

        ·our business prospects;

        ·our contractual arrangements and relationships with third parties;

        ·the dependence of our future success on the general economy;

        ·our possible future financing; and

        ·the adequacy of our cash resources and working capital. 

        ·the Covid-19 Pandemic.

From time to time, we or our representatives have made or may make forward-looking statements, orally or in writing. Such forward-looking statements may be included in, but not limited to, press releases, oral statements made with the approval of an authorized executive officer or in various filings made by us with the Securities and Exchange Commission. Words or phrases "will likely result", "are expected to", "will continue", "is anticipated", "estimate", "project or projected", or similar expressions are intended to identify "forward-looking statements". Such statements are qualified in their entirety by reference to and are accompanied by the above discussion of certain important factors that could cause actual results to differ materially from such forward-looking statements.

Management is currently aware of the global and domestic issues arising from the Covid-19 pandemic and the possible direct and indirect effects on the company's operations which could have a material adverse effect on the company's current financial position, future results of operations, or liquidity, because its current operations are limited. However, investors should also be aware of factors, which includes the possibility of Covid-19 effects on operational status, could have a negative impact on the company's prospects and the consistency of progress in the areas of revenue generation, liquidity, and generation of capital resources, once it begins to implement its business plan. These may include: (i) variations in revenue, (ii) possible inability to attract investors for its equity securities or otherwise raise adequate funds from any source should the company seek to do so, (iii) increased governmental regulation or significant changes in that regulation, (iv) increased competition, (v) unfavorable outcomes to litigation involving the company or to which the company may become a party in the future, and (vi) a very competitive and rapidly changing operating environment.

The risks identified here are not all inclusive. New risk factors emerge from time to time and it is not possible for management to predict all of such risk factors, nor can it assess the impact of all such risk factors on the company's business or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements. Accordingly, forward-looking statements should not be relied upon as a prediction of actual results.

The financial information set forth in the following discussion should be read with the financial statements of BioForce NanoSciences Holdings, Inc. included elsewhere herein.

-13-

Business

BioForce Nanosciences Holdings, Inc. (“BioForce or the “Company”) was previously in the business of manufacturing nano-particular measurement devices and molecular printers, but due to a lack of profitability, the subsidiary of the company that owned that technology filed for bankruptcy.  That subsidiary and related technology was later bought out of bankruptcy by an unrelated third party.  Subsequently, new management came into the Company to pursue a better business model and now the Company’s mission is to become a leading provider of natural vitamins, minerals and other nutritional supplements, powders and beverages, formulated to promote a healthier lifestyle for active individuals in all age ranges. The Company private labels products with key distributors and manufacturing providers.

BioForce entered into the supplement business in or about 2015.  These supplements, powders and beverages offer vitamins and minerals to complement a healthy intake of protein and carbohydrates for active individuals and participants in sports.

BioForce recently changed its business plan and it is in the process of establishing a dynamic marketing campaign to achieve brand awareness of its product offerings to drive business growth through sales of nutrition supplements to retailers, sporting goods retailers, supermarkets, mass merchandisers, and online. BioForce currently markets its products through social media and telemarketing. The Company plans to expand marketing efforts with a direct marketing and B2B (Business to Business) sales campaign, with the eventual expectation to expand throughout the entire United States.

The Company proactively seeks to expand its “BioForce Eclipse” nutritional powder for use into households throughout the U.S., and the Company will approach retail stores, including health food and sporting goods stores to create a vendor relationship. During this phase, the Company will continue to try to advance its social media platform with direct online and targeted advertisements to health conscience individuals.

Nutrition retailers, grocery stores, retail pharmacies, and online stores, like Amazon, will be important channels for the Company’s Eclipse product-lines. In The USA, there are thousands of direct outlets like grocery stores, pharmacies, hospitals, department stores, medical clinics, surgery clinics, universities, nursing homes, prisons, and other facilities which are all targets of potential sales of the vitamin and mineral supplemental products.

BioForce Nanosciences Holdings, Inc. sells the BioForce Eclipse powder multivitamin and mineral supplement without non-compete and non-disclosure agreements. The Company currently private labels the powder through a manufacturer located in Virginia. The Company has a Supplier Agreement with this manufacturer that gives the Company non-exclusion rights to market the product.  The distributor owns the rights to the formula for this product.  If the Company can source product in a more cost-effective way without diminished quality, the Company would evaluate such opportunities when presented.  Currently, the distributor who provides the private label powder provides “Consignment Terms,” which allows us to only pay for the product when it is sold. 

The FDA has rules regarding the fitness for consumption of foods as well as vitamins and supplements sold to the public, and those laws apply to our product.  However, our product does not require pre-clearance like a drug in order to be sold into the marketplace.  

The Company in May 2020, formed a wholly-owned subsidiary, Element Acquisition Corporation, a Wyoming corporation,with unlimited common shares authorized, par value $0.001. Element Acquisition Corporation was formed to pursue potential acquisitions in the media, entertainment, media technology and sports sectors.

The Company on October 15, 2020 changed the name of its wholly-owned subsidiary Element Acquisition Corporation, a Wyoming corporation, to BioForce Nanosciences Holdings, Inc, a Wyoming corporation. Management intends to redomicile BioForce Nanosciences Holdings, Inc., a Nevada corporation, into a Wyoming corporation using its wholly-owned BioForce Nanosciences Holdings, Inc., a Wyoming corporation as the entity for the redomicile corporate action (See "Subsequent Event," Part II, Item 5).

-14-

Transfer Agent

Our transfer agent is Transfer Online, Inc. whose address is 512 SE Salmon Street, Portland, Oregon 97214, and telephone number (503) 227-2950.

Company Contact Information

Our principal executive and subsidiary offices are located at 2020 General Booth Blvd., Unit 230, Virginia Beach, VA 23454, telephone (757) 306-6090. The information to be contained in our Internet website, www.bravomultinational.com, shall not constitute part of this report. 

Current Directors

The following persons were elected to the board of directors to serve until the next annual meeting or until their replacement is elected:

Merle Ferguson	Director
Richard Kaiser	Director

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Overall Operating Results:

 

Three Months – September 30, 2020 and 2019 Statements

 

The Sales Revenue from the Company’s BioForce Eclipse vitamin supplements for the three months ended September 30, 2020 and for the three months ended September 30, 2019 were $-0- and $5,962, respectively. During the three months ended September 30, 2020 the Company received no orders, -0- units of its Bioforce Eclipse supplement product, and for the same period ending September 30, 2019 the Company received one order for 265 units of its Bioforce Eclipse supplement product.

 

The Cost of Goods Sold for the three months ended September 30, 2020 was $-0- and the Cost of Goods Sold for the three months ended September 30, 2019 was $4,240, the cost associated with the sales of its BioForce Eclipse supplement product.

 

Gross Margins for the three months ended September 30, 2020 was 0% from the sale of -0- units of the BioForce Eclipse supplement product, and during the same period in September 30, 2019 was 29.78% from the sale of 265 units of the BioForce Eclipse supplement product. The decrease for the three months ended September 30, 2020 in comparison to three months ended September 30, 2019 is contributed to no unit sales of supplement sold.

 

Gross Profit for the three months ended September 30, 2020 was $-0- and for the three months ended September 30, 2019 was $1,722.

 

Operating expenses for three months ended September 30, 2020, totaled $117,922 from Board of Director compensation and General and Administrative Expenses, compared to $8,056 for the three months ended September 30, 2019. This increase in September 30, 2020 compared to the same period ended September 30, 2019 was attributed to higher expenses with fees for Board of Director compensation.

 

-15-

Nine Months – September 30, 2020 and 2019 Statements

 

The Sales Revenue from the Company’s "BioForce Eclipse" vitamin supplement for the nine months ended September 30, 2020 and for the nine months ended September 30, 2019 were $-0- and $17,775,  respectively. During the nine months ended September 30, 2020 the Company sold -0- units of its "BioForce Eclipse" vitamin supplement product for $-0- and during the nine months ended September 30, 2019 the Company sold 770 units of its "BioForce Eclipse" vitamin supplement product for $17,775.

 

The Cost of Sales for the nine months ended September 30, 2020 was $-0- and for the nine months ended September 30, 2019 was $13,415 respectively.  For the nine months ended September 30, 2020, the Company had $-0- in costs associated with the sale of its "Bioforce Eclipse" vitamin supplement product, and for the nine months ended September 30, 2019 the Company had $13,415 associated cost due to sales of its vitamin supplement.

 

Gross Margins for the nine months ended September 30, 2020 was 0% from the sale of -0- units of the “BioForce Eclipse” supplement product, and for nine months ended September 30, 2019 was 24.53% from sale of 770 units of the supplement product. The decrease for the nine months ended September 30, 2020 in comparison to nine months ended September 30, 2019 is that no sales of the vitamin supplement occurred during the nine months ended September 30, 2020.

 

Gross Profit for the nine months ended September 30, 2020 was $-0- and for the nine months ended September 30, 2020 was $4,360.  The Company had sales of -0- units of the "BioForce Eclipse" vitamin supplement product for the nine months ended September 30, 2020, and during nine months ended September 30, 2019 had sales of 770 units of the vitamin supplement.

 

Operating expenses for nine months ended September 30, 2020, totaled $158,285,990 for Board of Director Compensation and General and Administrative Expenses, compared to $30,728 for the nine months ended September 30, 2019. This increase during the same nine month period ended September 30, 2020 was attributed to the cost of the issuance of convertible Preferred 'A' shares and higher fees related to accounting and legal fees associated with the Company being a full-reporting issuer.

 

-16-

Net Loss:

 

Net loss for the three months ended September 30, 2020 and 2019 were $117,922 and $6,334, respectively. Net loss for the nine months ended September 30, 2020 and 2019 were $158,285,990 and $26,368, respectively.

 

Liquidity and Capital Resources:

 

As of September 30, 2020, the Company’s assets totaled $39,865, which consisted of cash. Our total liabilities were $227,208 from accrued director compensation expenses and amounts due to related parties. As of September 30, 2020, the Company had an accumulated deficit of $159,047,742 and working capital deficit of $237,343.

 

As indicated herein, we need capital for the implementation of our business plan, and we will need additional capital for continuing our operations. We do not have sufficient revenues to pay our operating expenses at this time. Unless the Company is able to raise working capital, it is likely that the Company will either have to cease operations or substantially change its methods of operations or change its business plan (See Note 4 in Financial Statements). For the next 12 months the Company has a written commitment from its CEO in Mr. Merle Ferguson's employment contract (See Exhibit 10.01) to advance funds as necessary in meeting the Company's operating requirements.

 

Cash (Used in) Operating Activities

 

Net cash used in operating activities for the nine months ended September 30, 2020 and 2019 was $69,048 and $14,123, respectively. The increase amount was attributed to General and Administrative cost that were used in operational and professional fee expenses.

 

Cash Flows from Investing Activities

 

Net cash used in investing activities was $-0- for both nine month periods ended September 30, 2020 and 2019.

-17-

 

Cash Provided by Financing Activities

 

Net cash provided by financing activities was $56,018 for nine months ended September 30, 2020 from proceeds from Related Parties, and was $31,663 for nine months ended September 30, 2019 from the amount of Capital Contributions from the Company's directors .

 

Critical Accounting Policies

 

Our financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles in the United States. Preparing financial statements requires management to make estimates and assumptions that impact the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management’s application of accounting policies. Critical accounting policies include revenue recognition and stock-based compensation. The Company has implemented all new accounting pronouncements that are in effect and is evaluating any that may impact its financial statements, including revenue recognition. The Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

 

Revenue Recognition

 

In accordance with ASC Topic 606, Revenue from Contracts with Customers ("ASC 606"), revenues are recognized when control of the promised goods or services is transferred to our clients, in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods and services. To achieve this core principle, we apply the following five steps: (1) Identify the contract with a client; (2) Identify the performance obligations in the contract; (3) Determine the transaction price; (4) Allocate the transaction price to performance obligations in the contract; and (5) Recognize revenues when or as the company satisfies a performance obligation.

 

We adopted this ASC on January 1, 2018. Although the new revenue standard is expected to have an immaterial impact, if any, on our ongoing net income, we did implement changes to our processes related to revenue recognition and the control activities within them.  

Stock-Based Compensation

 

We account for employee and non-employee stock-based compensation in accordance with the guidance of FASB ASC Topic 718, Compensation—Stock Compensation, which requires all share-based payments, including grants of stock options, to be recognized in the financial statements based on their fair values.  The fair value of the equity instrument is charged directly to compensation expense and credited to additional paid-in capital over the period during which services are rendered. 

Recent Accounting Pronouncements 

 

The Company has implemented all new accounting pronouncements that are in effect and is evaluating any that may impact its financial statements, including revenue recognition.  The Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations. 

 

-18-

Off-Balance Sheet Arrangements

 

We do not have any off-balance sheet arrangements.

 

Reverse Stock Split

We were authorized to issue 900,000,000 shares of our common stock, of which 15,270,588 shares were outstanding taking into account the one-for-five (1-for-5) reverse stock split effective February 28, 2020. Our shares of common stock are held by approximately 231 stockholders of record.  The number of record holders was determined from the records of our transfer agent and does not include beneficial owners of our common stock whose shares are held in the names of various securities brokers, dealers, and registered clearing agencies.  In addition to our authorized common stock, BioForce Nanosciences Holdings, Inc. is authorized to issue 100,000,000 shares of preferred stock, par value at $0.001 per share. Based on the amended Articles of Incorporation the Company has 10,000,000 Series 'A' Preferred which have voting and conversion rights of 100 common shares, par value $0.001(see Exhibit 3.2); leaving a balance of 90,000,000 "Blank Check" Preferred.

Going Concern

 

We have incurred net losses since our inception. We anticipate incurring additional losses before realizing growth in revenue and we will depend on additional financing in order to meet our continuing obligations and ultimately to attain profitability. Our ability to obtain additional financing, whether through the issuance of additional equity or through the assumption of debt, is uncertain. These conditions raise substantial doubt as to the Company's ability to continue as a going concern. The financial statements do not include any adjustments that might result from the uncertainty about our ability to continue our business.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Not applicable

 

ITEM 4. CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controls and Procedures

 

Our management, with the participation of our Principal Executive Officer and Principal Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Quarterly Report on Form 10-Q. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs. 

-19-

 

Based on our evaluation, our Principal Executive Officer and Principal Financial Officer, after considering the existence of material weaknesses identified, determined that our internal control over financial reporting disclosure controls and procedures were not effective as of September 30, 2020.

 

We identified the following deficiencies which together constitute a material weakness in our assessment of the effectiveness of internal control over financial reporting as of September 30, 2020: 

 

- The Company has inadequate segregation of duties within its cash disbursement control design. 

 

Changes in Internal Control Over Financial Reporting

 

There have been no changes in the Company’s internal control over financial reporting that occurred during the Quarter ended September 30, 2020 to have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

Coronavirus Impact (COVID-19)

 

Due to the recent outbreak of the coronavirus reported in many countries worldwide, local and federal governments have issued travel advisories, canceled large scale public events and closed schools. In addition, companies have begun to cancel conferences and travel plans and require employees to work from home. Global financial markets have also experienced extreme volatility and disruptions to capital and credit markets.

 

We are unable to predict the impact of the coronavirus on our operations at this time. Adverse events such as health-related concerns about working in our offices, the inability to travel, potential impact on our business partners and customers, and other matters affecting the general work and business environment could harm our business and delay the implementation of our business strategy. The adverse events may also adversely impact our ability to raise capital or to continue as a going concern. We continue to monitor the recent outbreak of the coronavirus on our operations. The global economic slowdown and the other risks and uncertainties associated with the pandemic could have a material adverse effect on our business, financial condition, results of operations and growth prospects. In addition, to the extent the ongoing COVID-19 pandemic adversely affects the Company's business and results of operations, it may also have the effect of heightening many of the other risks and uncertainties which the Company faces.

-20-

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

 

At this time, there are no materials pending legal proceedings to which the Company is a party or as to which any of its property is subject, and no such proceedings are known to the Company to be threatened or contemplated against it.

 

ITEM 1A. RISK FACTORS

 

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and, as such, are not required to provide the information under this Item.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

On February 20, 2020 the Company issued 1,072 restricted shares of common stock at $1.2495 per share based on the closing price of the Company's shares on February 20, 2020. The issuance was for product payment of the Company's "BioEclipse" Supplement and was record as stock payable in the amount of $1,339 (Adjustments to stock issuance accounts the one-for-five (1-for-5) reverse stock-split which became effective on February 28, 2020, all fractional share amounts after split round upwardly to next whole share; price per share adjusted based on the one-for-five (1-for-5) reverse split of common shares)- See Exhibit 10.6.

On March 31, 2020, Bioforce Nanosciences Holdings, Inc., (the "Company" or the "Registrant") issued in total 2,000,000 shares of its Preferred Series 'A' shares to certain officers of the company, Mr. Merle Ferguson- CEO and Mr. Richard Kaiser - CFO in accordance with their employment contracts (See Exhibits 10.1 and 10.2). The sale was a private placement pursuant to an exemption from registration provided by Section 4(2) of the Securities Act of 1933, and the issuance was not a public offering due to the limited number of persons that received the shares, and the manner of the issuances. No underwriter was involved with the sale and no commissions were paid in connection with such sale. All securities issued by the Company are deemed "restricted securities" within the meaning of that term as defined in Rule 144 of the Securities Act and have been issued pursuant to the "private placement" exemption under Section 4(2) of the Securities Act. Such transactions did not involve a public offering of securities. All purchasers in the private placement had access to information on the Company necessary to make an informed investment decision. The Company has been informed that all purchasers were able to bear the economic risk of this investment and are aware that the securities were not registered under the Securities Act, and cannot be re-offered or re-sold unless they are registered or are qualified for sale pursuant to an exemption from registration. The transfer agent and registrar of the Company will be instructed to mark "stop transfer" on its ledger regarding these shares (see Exhibit 10.4 and 10.5).

-21-

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

None.

ITEM 4. MINING SAFETY DISCLOSURES

 

Not applicable.

ITEM 5. OTHER INFORMATION.

 

On March 16, 2020, the Company entered into a consulting agreement with Mr. Aldo Dalla-Vecchia of RSDL Enterprises to provide general consulting services to BFNH's management team. The agreement ended May 15, 2020 for a total cash consideration of $6,000 (See Exhibit 10.3).

 

On March 31, 2020, the Board of Directors approved the employment agreement for Mr. Merle Ferguson as the Company's Chairman, CEO, and President. In consideration of the execution of the Agreement, and the performance of his obligations hereunder, as President shall receive a fee of Two Hundred Eighty Eight Thousand Dollars US ($288,000) per year for five (5) years of services rendered with a start date of March 23, 2020; payable in new common S3, S8, or restricted shares (dependent upon registration availability), cash or combination of cash and shares of BioForce Nanosciences Holdings, Inc. Further, Mr. Ferguson was issued One Million Five Hundred Thousand (1,500,000) Preferred 'A' Shares, par value $0.001, as a one-time signing bonus per this employment agreement (See Exhibit 10.1).

 

On March 31, 2020, the Board of Directors approved the employment agreement of Mr. Richard Kaiser as the Company's Director, CFO, and Secretary. In consideration of the execution of the Agreement, and the performance of his obligations hereunder, as Chief Financial Officer shall receive a fee of One Hundred Thirty Five Thousand Dollars US ($135,000) per year for five (5) years of services rendered with a start date of March 25, 2020; payable in registered shares or restricted shares (dependent upon registration availability), cash or combination of cash and shares of BioForce Nanosciences Holdings, Inc. Further, Mr. Kaiser was issued Five Hundred Thousand (500,000) Preferred 'A' Shares, par value $0.001, as a one-time signing bonus per this employment agreement agreement (See Exhibit 10.2).

On May18, 2020, BioForce NanoSciences Holdings Inc. formed a wholly owned subsidiary, Element Acquisition Corporation, a Wyoming corporation, with unlimited shares authorized, par value $0.001. Mr. Merle Ferguson and Mr. Richard Kaiser are Board of Directors of Element Acquisition Corporation.

-22-

 

On May 25, 2020, the Company entered into a second consulting agreement with Mr. Aldo Dalla-Vecchia of RSDL Enterprises to provide general consulting services to BFNH's management team. The agreement is for two month ending July 27, 2020 for a total cash consideration of $7,000, $3,500 per month (See Exhibit 10.7)

On June 04, 2020, BioForce Nanosciences Holdings, Inc.' s wholly-owned subsidiary Element Acquisition Corporation, announced that it created an "Investment Committee" comprised of leading executives with extensive experience in the media, entertainment and sports sectors. The "Investment Committee" would oversee a strategy aimed at acquiring and investing in companies across these industries. Element Acquisition Corporation would serve as a potential acquisition vehicle for these type of transactions.

On July 14, 2020, BioForce Nanosciences Holdings, Inc. (BFNH) filed a Form8-K that it had entered into Memorandum of Understanding ("MOU") with Element Global, Inc., a Utah Corporation which publicly trades under the symbol ELGL. The MOU sets forth the general terms and conditions for a merger, to which BFNH and the ELGL have jointly agreed to the following:

 

(A). Element Global, Inc. (ELGL) has subsidiaries and specific assets;

 

(B). ELGL (Seller) desired to sell itself, its subsidiaries, and its assets, and BFNH (Buyer) desired to purchase all of the assets from or controlled by ELGL and its subsidiaries, fully take control from ELGL and its subsidiaries, and conduct business activities with the ELGL Assets;

 

BFNH desired to acquire 100% of ELGL, its subsidiaries and its assets, and ELGL desired to sell the Company, its subsidiaries, and assets to BFNH. Upon successful due diligence and other customary document presentations, BFNH and ELGL believed that a final agreement could consummate itself on or before October 13, 2020 (See Exhibit 10.8).

 

Subsequent Event

 

On October 9, 2020, the Company filed a Form 8-K whereas the July 14, 2020 Memorandum of Understanding ("MOU") with Element Global, Inc. (ELGL), a Utah Corporation (see Exhibit 10.8), became nullified due to terms of the non-binding"MOU" agreement. Management was notified by the Element Global, Inc's management, before October 13, 2020, that they decided not to pursue a potential take over of its assets and of their company by BioForce Nanosciences Holdings, Inc. As a result of this action, BioForce Nanosciences Holdings, Inc.'s wholly-owned subsidiary, Element Acquisition Corporation, a Wyoming Corporation, accepted the resignation of Mr. Gagnon as its director, it dissolved the "Investment Committee "and removed its "Investment Committee members," Mr. LaViolette, Mr. Davis, Mr. Greenberg, Mr. Shapiro, Mr. Gagnon, and Mr. Scheffer.

 

On October 15, 2020, BioForce Nanoscience Holdings, Inc.'s wholly-owned subsidiary Element Acquisition Corporation, a Wyoming corporation, changed its name to Bioforce Nanosciences Holdings, Inc. (Wyoming). With the completion of the name change, management intends to redomicile BioForce Nanosciences Holdings, Inc., a Nevada Corporation, into a Wyoming corporation using its wholly-owned subsidiary Bioforce Nanosciences Holdings, Inc., a Wyoming corporation as the entity for the redomicile corporate action. Before such an action can become effective, the Board of Directors and shareholders need to approve such an action to reincorporate BioForce Nanosciences Holdings in the State of Wyoming.

 

-23-

ITEM 6. EXHIBITS 

Index to Exhibits.

Exhibit No.     Description of Exhibit

3.1 Certificate of Incorporation*

3.2 Amended Articles of Certificate of Incorporation (previously filed at Exhibit 3.1 on DEF 14C-Definative Information Statement )*

 

3.3 Bylaws (previously filed as Exhibit 3.2 on FORM 10)*

 

10.1 Employment Agreement – Merle Ferguson*

 

10.2 Employment Agreement - Kaiser*

 

10.3 Consulting Contract RSDL Enterprises-March 16, 2020*

 

10.4 Subscription Agreement- Ferguson*

 

10.5 Subscription Agreement- Kaiser*

 

10.6 Supplier Agreement (Previously filed as Exhibit 10.1 Form 10/A)*

 

10.7 Consulting Contract RSDL Enterprises-May 25, 2020*

 

10.8 Memorandum of Understanding between BioForce NanoSciences Holdings, Inc. and Element Global, Inc.- July 14, 2020*

 

31.1 Certification Chief Executive Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002.+

 

31.2 Certification Chief Executive Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002.+

 

32.1 Certification Chief Executive Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002.+

 

32.2 Certification Chief Executive Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002.+  

 

101 Interactive Financial Data XBRL Extensions.+ 

 

* Previously filed

+ filed herewith

-24-

SIGNATURES

 

In accordance with the requirements of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

BIOFORCE NANOSCIENCES HOLDINGS, INC.

Dated: October 23, 2020	By:  /s/ Merle Ferguson Merle Ferguson Chief Executive Officer
	By: /s/Richard Kaiser Richard Kaiser Acting Chief Financial Officer

 

 

 

-25-