Global Wholehealth Partners Corp - Annual Report: 2022 (Form 10-K)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended June 30, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________

Commission file number 000-56035

(Exact name of registrant as specified in its charter)

(Registrant’s telephone number, including area code)

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

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

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐   No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☒   No ☐

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒   No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒   No ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐

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.

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 ☒

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of the last business day of the registrant’s most recently completed second fiscal quarter, based upon the closing sale price of the registrant’s common stock on December 31, 2021, as reported on the OTC Markets Group Inc. Pink tier (the “OTCPink”) was $4,098,960.

As of October 13, 2022 there were 131,287,079 shares of the registrant’s common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

None.

TABLE OF CONTENTS

GLOBAL WHOLEHEALTH PARTNERS CORPORATION

ANNUAL REPORT ON FORM 10-K

FOR THE YEARS ENDED JUNE 30, 2022 AND 2021

PART I

Forward-Looking Statements

This Annual Report on Form 10-K contains forward looking statements. Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “predict,” “project,” “forecast,” “potential,” “continue” negatives thereof or similar expressions. Forward-looking statements contained in this Report speak only as of the date of this report, may be based on various underlying assumptions and current expectations about the future and are not guarantees. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, level of activity, performance or achievement to be materially different from the results of operations or plans expressed or implied by such forward-looking statements.

Although forward-looking statements in this report reflect the good faith judgment of our management, forward-looking statements are inherently subject to known and unknown risks, business, economic and other risks and factors that may cause actual results to be materially different from those discussed in these forward-looking statements. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. Accordingly, you are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this report.

We assume no obligation to update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this report, other than as may be required by applicable law or regulation.

All references to “we,” “us,” or “our” refer to Global WholeHealth Partners Corporation.

Item 1. Business

Background

Global WholeHealth Partners Corporation (the “Company”) was incorporated on March 7, 2013 in the State of Nevada. On May 9, 2019, the Company amended its Articles of Incorporation to effect a change of name to Global WholeHealth Partners Corporation and changed our ticker symbol to GWHP.

Our Business

The Company develops and markets in-vitro diagnostic (“IVD”) tests. The Company has developed over 125 Diagnostic Tests with the criteria that they be “low cost”, OTC or “self-administered”, “absolutely accurate”, and provide “immediate results”. Company scientists participated in the development of the original Pregnancy test which was the first diagnostic to include these criteria and these criteria have been included in all Diagnostic tests developed by the Company since. Tests with these criteria have become to be known as “Rapid Tests”. The Company has 45 FDA approved tests  for distribution in the US which include tests for Troponin, Colorectal, and Drug testing among others. The remainder tests  carry an FDA Certificate of Exportability for distribution in foreign countries and include tests such as Ebola, ZIKA, Dengue Fever, Malaria, Influenza, Tuberculosis, Yellow Fever, Corona Viruses, and other epidemic and vector borne diseases.

The Company currently markets a range of IVD test kits for consumer use through over-the-counter (“OTC” or consumer), or consumer-use and point-of-care (“POC” or professional) for use by health care professionals, generally located at medical clinics, physician offices and hospitals, including those within penal systems throughout the US and abroad.

All of the products we sell are manufactured in a U.S. Food and Drug Administration (“FDA”) Approved Facility in the USA. An FDA Approved facility is a facility that meets Good Manufacturing Practices (“GMP”) with the FDA.

We sell products internationally which are not FDA approved to sell in the US. These products include an FDA Certificate of Exportability and include tests such as Ebola, ZIKA, Dengue, Malaria, Influenza, Tuberculosis, Corona Viruses, and other vector borne diseases.

CoVid-19 Activities

From January of 2020 through January 2022, the Company was largely unsuccessful in it’s efforts to develop and sell COVID tests due to the commoditization of such tests and to the lack of recognition of the Company in the marketplace. The Company believes the opportunity here has diminished and is now focusing on its core business of manufacturing and distributing its vast product line of Diagnostic Tests.

Plan of Operation

The Company is currently focusing its attention on marketing its core FDA OTC approved products which includes tests for pregnancy, ovulation, colorectal, drugs of abuse, glucose strips and glucose monitors through various platforms, including Walmart, Amazon, eBay and a recent contract with PrimeCare America for distribution in the Midwestern part of the country.

Industry

The IVD testing industry encompasses the following two primary categories: the OTC market and the POC. The concepts that distinguish POC technology—operation simple enough for non-laboratory users; little or no maintenance requirement; and rapid, reliable results—mean that it can be applied equally well in many non-clinical settings, such as the OTC market. As advances in medical technology increasingly make it possible to diagnose diseases and physiological conditions from ever-smaller amounts of body fluids, certain diseases and conditions that once required diagnosis by physicians and/or medical technicians inside hospital emergency rooms, exam rooms/bedside studies, or private clinics, can now also be done by inexpensive, easy-to-use diagnostic devices that consumers can use in the comfort and anonymity of their home. Today, the average pharmacy, whether a privately owned neighborhood store, or chain owned, has become an outlet for selling IVD test kits for in-home use.

The Company believes, according to publicly available sources, that the IVD industry is a multi-billion-dollar industry that is increasing each year. This assessment includes all laboratory hospital-based products, over-the-counter devices, and rapid tests performed at the point-of-care. The Company believes that the following factors can be attributed to the increase in overall need and use of IVD test kits: an aging baby-boomer population; increasing healthcare costs; the ever-growing number of uninsured and under-insured in the U.S. and abroad; and a general increase in consumer awareness, in part due to the wealth of information available on the Internet.

Competition

Diagnostic products are subject to competition in technological innovation, price, convenience of use, service, instrument warranty provisions, product performance, laboratory efficiency, long-term supply contracts, and product potential for overall cost-effectiveness and productivity gains. Some products in this segment can be subject to rapid product obsolescence or regulatory changes. We compete with several companies around the world who possess significantly greater technical and financial resources and professional and consumer reach and recognition, including Accon Labs, Johnson & Johnson, DB, Abbott, and Roche all of whom carry similar products.

Marketing and Sales

The Company is focused on generating increased sales through online retail, large and small distributors and directly to doctors, hospitals, clinics and governments. The Company is taking steps and developing the materials needed to effect its marketing strategy.

Research and Development

We are continuing to look for needs in the world to create and work with our scientific team and science partners to make IVD tests for a variety of diseases as the need and opportunity arises.

Facilities

The Company manufactures at two FDA approved labs located in San Diego and Escondido, California. All products are manufactured in the United States. The Corporate headquarters is located separately in the San Clemente, California business district. The two facilities have capacity to produce 250,000 units per day on a single shift. Further, additional facilities for lease are plentiful and can be equipped and setup quickly. We also provide third party manufacturing services.

The Company has sufficient warehouse facilities to accommodate our maximum production volumes and to keep sufficient inventory requirements (three months inventory of client order size) for subsequent refill orders by customers.

Employees

The Company currently has two employees, including Mr. Rene Alvarez, Chairman, President, CEO, Treasurer and Secretary and Edgar Gonzales, Director and Vice President. 

Mr. Charles Strongo resigned from all Officer positions as well as a member of the Board. All of his functions were delegated to Mr. Rene Alvarez. Also, the Board accepted resignations from Dr. Ciu, Dr. Ford. Dr. Paez de la Cerda, and Wolfgang Groeters; all were appointed by Mr. Strongo. Mr Alvarez is re-constituting the Board at this time and has accepted Mr. Edgar B. Gonzalez to Board membership. It is anticipated that three additional members will be accepted soon. At the present time, we have no full-time employees. Messrs. Alvarez and Gonzalez devote approximately 40 to 60 hours each per week or as much time as is necessary to conduct the affairs of the company. The company utilizes independent contractors when necessary.

Other Information

Our website address is www.gwhpcorp.com. The public may read and copy any materials we file with the United States Securities and Exchange Commission (“SEC”) on the SEC’s website at www.sec.gov which site contains reports, proxy and information statements, and other information regarding issuers, such as us, that file electronically with the SEC. All statements made in any of our filings, including all forward-looking statements, are made as of the date of the document(s) in which the statement is included, and we do not assume or undertake any obligation to update any of those statements or documents unless we are required to do so by law.

The Company’s executive office is located at 1402 N El Camino Real, San Clemente, CA 92672 The Company’s telephone number is (714) 392-9752.

ITEM 1A. RISK FACTORS

Smaller reporting companies are not required to provide the information required by this Item 1A.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

Item 2. Properties

We utilized approximately 1,500 square feet of office and warehouse space located at 1402 North El Camino Real, San Clemente, California 92672. The space is leased pursuant to a sublease on a month-to-month basis with monthly rent due of approximately $3,700.

Item 3. LEGAL PROCEEDINGS

See Note 9 to our financial statements for information related to the Securities and Commission Civil Complaint filed on February 17, 2022.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

Our common stock is quoted on the OTC Pink tier (the “OTCPink”) under the symbol “GWHP”.

The market price of our common stock is subject to significant fluctuations in response to variations in our quarterly operating results, general trends in the market, and other factors, over many of which we have little or no control. In addition, broad market fluctuations, as well as general economic, business and political conditions, may adversely affect the market for our common stock, regardless of our actual or projected performance.

On May 9, 2019, the Board of Directors authorized a one for five hundred (1:500) reverse stock split which became effective on May 20, 2019. All share amounts contained in this Annual Report reflect this reverse split

Holders

Our Certificate of Incorporation authorizes the issuance of up to 400,000,000 shares of common stock, par value $0.001 per share and 10,000 shares of preferred stock, par value $0.001 per share. As of September 8, 2021, there were 384 stockholders of record holding an aggregate of 82,057,885 shares of common stock (this number does not include stockholders who hold their stock through brokers, banks and other nominees). No preferred stock has been issued.

Transfer Agent

The transfer agent of our common stock is Nevada Agency and Transfer Company, having an office at 50 West Liberty Street, Suite 880, Reno, NV 89501; their phone number is (775) 322-0626.

Dividend Policy

We have never paid cash dividends on any of our capital stock and we currently intend to retain our future earnings, if any, to fund the development and growth of our business. We do not intend to pay cash dividends to holders of our common stock in the foreseeable future.

Penny Stock

Our common stock trades at less than $5.00 per share and is therefore subject to the Securities and Exchange Commission’s penny stock rules.

Penny stocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system). Penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer’s account. The broker-dealer must also make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These requirements may have the effect of reducing the level of trading activity, if any, in the secondary market for a security that becomes subject to the penny stock rules. The additional burdens imposed upon broker-dealers by such requirements may discourage broker-dealers from effecting transactions in our securities, which could severely limit their market price and liquidity of our securities. These requirements may restrict the ability of broker-dealers to sell our common stock and may affect the ability of our stockholders to resell our common stock.

Securities Authorized for Issuance under Equity Compensation Plans

None.

Recent Sales of Unregistered Securities

During fiscal 2022, the Company issued 16,000,000 shares in exchange for services valued at $1,733,100, which includes the issuance of 9,000,000 shares, in total, to the Board of Directors, valued at $387,000.

During fiscal 2022, Firstfire 1) converted $164,000 or principal of Firstfire Note No. 1 at a per share price of $0.03, and received 5,466,666 shares; and 2) converted $31,500 or principal of Firstfire Note No. 2 at a per share price of $0.0063, and received 5,000,000 shares.

On July 10, 2021, the Company and LionsGate Funding Management LLC (“LGFM”) entered into a Media and Marketing Services Agreement (the “MMSA”). Pursuant to the MMSA, 1) LGFM provided services designed to increase the awareness and visibility in the investment community and market product to distributors throughout the world for a period of 12 months; and 2) the Company will pay LGFM $100,000 and issue 300,000 shares of restricted common stock valued at $129,000. The shares were issued on October 11, 2021. Lionsgate was also issued 2,500,000 shares on January 13, 2022 in exchange for services valued at $215,000.

The securities issued above were issued by the Company under the exemption from registration afforded by Section 4(a)(2) of the Securities Act, as amended and/or Regulation D promulgated thereunder, as the securities were issued to accredited investors, without a view to distribution, and were not issued through any general solicitation or advertisement.

Additional Information

Copies of our annual reports, quarterly reports, current reports, and any amendments to those reports, are available free of charge on the internet at www.sec.gov. All statements made in any of our filings, including all forward-looking statements, are made as of the date of the document(s) in which the statement is included, and we do not assume or undertake any obligation to update any of those statements or documents unless we are required to do so by law.

Item 7. Management’s Discussion and Analysis of Financial condition and results of operations

The following Management’s Discussion and Analysis (“MD&A”) is intended to help the reader understand the consolidated results of operations and financial condition of Global WholeHealth Partners Corporation. The MD&A is provided as a supplement to, and should be read in conjunction with financial statements and the accompanying notes to the financial statements included in this Form 10-K.

Our discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities and expenses and related disclosure of contingent assets and liabilities. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Overview

Global WholeHealth Partners Corporation develops and markets in-vitro diagnostic tests for over-the-counter, or consumer-use and point-of-care which includes hospitals, physicians’ offices and medical clinics, including those within penal systems throughout the US and abroad. The Company currently markets a range of diagnostic test kits for consumer use through OTC sales, and for use by health care professionals, generally located at medical clinics, physician offices and hospitals known POC, in the United States. These test kits are known as in-vitro diagnostic test kits or IVD products.

The Company’s consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs to allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

As of June 30, 2022, we had negative working capital of $1,575,766, and a cash balance of $0. Management recognizes that in order for us to meet our capital requirements, and continue to operate, additional financing will be necessary. During July 2022, the Company sold $239,675 face value of promissory notes from which the Company received $206,250 in proceeds. We expect to raise additional funds through private or public equity investment in order to expand the range and scope of our business operations. We will seek access to private or public equity but there is no assurance that such additional funds will be available for us to finance our operations on acceptable terms, if at all. If we are unable to raise additional capital or generate positive cash flow, it is unlikely that we will be able to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Results of Operations

Year ended June 30, 2022 compared with the year ended June 30, 2021

Revenue and Cost of Revenue

During fiscal 2022, the Company’s sales included a $7,000 sale to a related party. Sales decreased due to the Company’s inability to secure and market test items. The cost of revenue in 2022 and 2021 included inventory adjustments of $115,681 and 171,811, respectively, due to shelf-life expiration of our products

Professional Fees

Professional fees relate to expenditures incurred primarily for legal, accounting and financing services. During fiscal 2022 professional fees increased primarily due to higher legal fees incurred related to the February 17, 2022 Securities and Exchange Commission lawsuit filed in the federal district court for the Southern District of California, for additional information see the notes to our financial statements, “NOTE 9 – Commitments and Contingencies”.

Research and Product Development

Research and Product Development (“R&D”) costs represent costs incurred to develop our tests and are incurred pursuant to certain internal R&D cost allocations, when applicable, and agreements with third-party providers, but primarily with Pan Probe Biotech, owned by Dr. Shujie Cui, our Chief Science Officer. R&D costs are expensed when incurred. During fiscal 2022 compared to fiscal 2021, R&D costs increased due to the development of a COVID antigen test.

Selling, General and Administrative

Selling, general and administrative (“SG&A”) costs include all expenditures related to personnel, rent, travel, public company costs, utilities, marketing and other office related costs. SG&A costs increased during fiscal 2022 compared to fiscal 2021 due increases in personnel costs of $127,500, travel and meals of $38,020, rent of $84,427, utilities of $31,363, impairment charges of $26,418, marketing costs of $155,672 and other SG&A costs of $2,188.

Stock Compensation

Stock compensation represents the expense associated with the issuance of stock in exchange for services and is non-cash in nature. Stock compensation is based on our stock price at the measurement date and can fluctuate significantly as a result. Stock compensation expense in fiscal 2022 consisted of the issuance of 16,000,000 shares of restricted common stock at a weighted average price of $0.11 per share compared to the fiscal 2021 issuance of 2,950,000 shares of restricted common stock at a weighted average price of $0.86 per share. All shares were issued free of obligation.

Other Income and (Expense)

Other expense includes “interest expense” which relates to the stated interest and penalties upon default of our outstanding promissory notes, and “amortization of debt discount” which represents the accretion of the discount applied to our notes as a result of the issuance of detachable warrants, the beneficial conversion feature contained certain notes and deductions from the proceeds of the promissory notes for various related fees. During fiscal 2022, interest expense included $191,400 of liquidated damages and penalties due to our default on the Firstfire Notes and $79,200 of interest expense related to the Firstfire Notes and $90,466 related to our promissory notes.

During fiscal 2021, the company recognized $64,732 of interest expense related to your outstanding promissory notes and $737,569 related to the July 22, 2020 Common Stock Purchase Agreement with EMC2 Capital, LLC and related Commitment Warrants valued at $737,569.

The loss on related party transfer of intangible assets represents value of two separate, exclusive, five-year, license agreements between the Company and Charles Strongo, our former CEO, one for the manufacture of Biodegradable plastic for medical devices under provisional patent 63/054,139 and the second license agreement for the use of the intellectual property described as “a Rapid, Micro-Well or Later flow test for Parkinson’s, Dementia, or Alzheimer or ASD” (collectively, the “License Agreements”). The License Agreements were both executed on January 12, 2021 and March 30, 2021. In exchange for entering into the License Agreements, the Company issued a total of 8 million shares of restricted common stock with a market value of $4,480,000. Due to this being a related party transfer with no available historical cost records, the full value of the stock issued was recorded as a loss.

Liquidity and Capital Resources

As of June 30, 2022, the Company had no cash and a bank overdraft of $1,230 and current liabilities of $1,719,380. From inception to June 30, 2022, we have incurred an accumulated deficit of $18,937,685. This loss has been incurred through a combination of professional fees, R&D, SG&A and non-cash stock related costs of $13,235,369 to support our plans to develop our business. During fiscal 2022, the Company had negligible revenues and used cash in operations of $1,968,207. The Company has incurred losses since inception and may not be able to generate sufficient net revenue from its business in the future to achieve or sustain profitability. The Company currently has insufficient funds to operate over the next twelve months. To finance our operations, we have entered into a Common Stock Purchase Agreement with EMC2 Capital LLC, which provided us with $1,476,872 during fiscal 2022. Additionally, we entered into a Securities Purchase Agreement and related 12% senior secured convertible promissory note on June 18, 2021 and August 27, 2021, under which the Company received net proceeds of $224,500 on July 8, 2021 and $313,700 on September 2, 2021. Subsequent to fiscal 2022, in July 2022, the Company sold $239,675 face value of promissory notes from which the Company received $206,250 in proceeds. We are currently pursuing additional funds through equity or debt financing or a combination thereof. However, aside from the EMC2 SPA, the Company has no commitments to obtain any such financing, and there can be no assurance that financing will be available in amounts or on terms acceptable to the Company, if at all.

Summary of Cash Flows

Presented below is a table that summarizes the cash provided or used in our activities and the amount of the respective increases or decreases in cash provided by (used in) those activities between the fiscal periods:

Operating Activities

Net cash used in operating activities increased primarily due to increases in R&D, professional fees, personnel and other SG&A costs.

Investing Activities

The Company purchased computer equipment totaling $3,505 in fiscal 2021 .

Financing Activities

During fiscal 2022, the Company received $1,478,870 upon the sale of 7,856,514 shares of common stock, $2,000 upon the issuance of 2,000,000 shares pursuant to a warrant exercise, and $538,200 from the sale of convertible promissory notes offset by debt payments totaling $123,565.

During fiscal 2021, the Company received $680,051 upon the sale of 1,235,961 shares of common stock, $162,000 from the sale of convertible promissory notes, $75,000 from the sale of promissory notes and $144,576 from the sale of a related party note offset by payments of $73,000 on convertible promissory notes, $15,845 on promissory notes and $266,270 on related party notes.

Contractual Obligations

None.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations are based upon our Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses, and the related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates based on its historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Due to the level of activity and lack of complex transactions, we believe there are currently no critical accounting policies and estimates that affect the preparation of our financial statements.

Recently Issued Accounting Pronouncements

See “NOTE 2 – Significant Accounting Policies” to our consolidated financial statements under Item 8 in this Annual Report on Form 10-K.

Related Party Transactions

For a discussion of our Related Party Transactions, see “Note 5 - Transactions With Related Persons” to our Financial Statements included under Item 8 in this Annual Report on Form 10-K.

ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk

Smaller reporting companies are not required to provide the information required by this item.

Item 8. Financial Statements

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm

To the shareholders and the board of directors of Global WholeHealth Partners Corporation

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Global WholeHealth Partners Corporation as of June 30, 2022 and 2021, the related statements of operations, stockholders’ equity (deficit), and cash flows for the years then ended, 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 June 30, 2022 and 2021, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. 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 audit 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 Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit 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 audit 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 audit provides a reasonable basis for our opinion.

Substantial Doubt about the Company’s Ability to Continue as a Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has suffered recurring losses from operations and has a significant accumulated deficit. In addition, the Company continues to experience negative cash flows from operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/S/ BF Borgers CPA PC

BF Borgers CPA PC

We have served as the Company’s auditor since 2019

Lakewood, CO

October 13, 2022

 5041

GLOBAL WHOLEHEALTH PARTNERS CORPORATION

CONSOLIDATED BALANCE SHEETS

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

GLOBAL WHOLEHEALTH PARTNERS CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

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

GLOBAL WHOLEHEALTH PARTNERS CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

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

GLOBAL WHOLEHEALTH PARTNERS CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

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

GLOBAL WHOLEHEALTH PARTNERS CORPORATION

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED JUNE 30, 2022 AND 2021

NOTE 1 – Organization and Going Concern

Organization

Global WholeHealth Partners Corporation was incorporated on March 7, 2013 in the State of Nevada under the name Texas Jack Oil and Gas Corp. On May 9, 2019, the Company amended its Articles of Incorporation to effect a change of name to Global WholeHealth Partners Corporation. The Company’s ticker symbol changed to GWHP.

The Company develops and markets in-vitro diagnostic tests. The Company has developed over 125 Diagnostic Tests with the criteria that they be “low cost”, OTC or “self-administered”, “absolutely accurate”, and provide “immediate results”. The Company has 45 FDA approved tests for distribution in the US which include tests for Troponin, Colorectal, and Drug testing among others. The remainder tests carry an FDA Certificate of Exportability for distribution in foreign countries and include tests such as Ebola, ZIKA, Dengue Fever, Malaria, Influenza, Tuberculosis, Yellow Fever, Corona Viruses, and other epidemic and vector borne diseases.

Going Concern

The Company’s consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs to allow it to continue as a going concern. As shown in the accompanying financial statements, the Company incurred negative operating cash flows of $1,968,2071,968,000 for the year ended June 30, 2022 and has an accumulated deficit of $18,937,68518,943,000 from inception through June 30, 2022. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable.

In view of these conditions, the ability of the Company to continue as a going concern is in substantial doubt and dependent upon achieving a profitable level of operations and on the ability of the Company to obtain necessary financing to fund ongoing operations. Historically, the Company has relied upon internally generated funds, and funds from the sale of stock, issuance of promissory notes and loans from its shareholders and private investors to finance its operations and growth. Management is planning to raise necessary additional funds for working capital through loans and/or additional sales of its common stock. However, there is no assurance that the Company will be successful in raising additional capital or that such additional funds will be available on acceptable terms, if at all. Should the Company be unable to raise this amount of capital its operating plans will be limited to the amount of capital that it can access. These consolidated financial statements do not give effect to any adjustments which will be necessary should the Company be unable to continue as a going concern and therefore be required to realize its assets and discharge its liabilities in other than the normal course of business and at amounts different from those reflected in the accompanying consolidated financial statements.

NOTE 2 – Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) 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. The estimates made by management primarily relate to accounts receivable, inventories, deferred income tax valuation allowances, and identifiable intangible assets.

Cash and cash equivalents

The Company considers all highly liquid instruments purchased with an original maturity of three months or less and money market accounts to be cash equivalents.

Inventory

Inventory is comprised of finished goods and stated at the lower of cost or net realizable value. Inventory cost is determined on a weighted average basis in accordance with ASC 330-10-30-9. Provisions are made to reduce slow-moving, obsolete, or unusable inventories to their estimated useful or scrap values. When necessary, the Company establishes reserves for this purpose. During the year ended June 30, 2022 and 2021, the Company recognized $115,681 and $171,811, respectively, of adjustments to reduce the value of inventory due primarily to the reduction in selling prices and expiration of test kits.

Equipment

Fixed assets are carried at cost, less accumulated depreciation. Major improvements are capitalized, while repair and maintenance are expensed when incurred. Renewals and betterments that materially extend the life of the assets are capitalized. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in that period.

Depreciation is computed on a straight-line basis over estimated useful lives of the related assets. The estimated useful lives of depreciable assets are:

Intangible assets

Other definite-lived intangible assets are amortized over their useful lives. The Company reviews the recoverability of long-lived assets whenever events or changes in circumstances indicate the carrying amount of such assets may not be recoverable.

Revenue Recognition

The Company recognizes revenue from operations through the sale of products. Product revenue is comprised of the sale of consumables. To date, all products sold have been fully paid for in advance of shipment.

Revenue is recognized when control of products and services is transferred to the customer in an amount that reflects the consideration that the Company expects to receive from the customer in exchange for those products and services. This process involves identifying the contract with the customer, determining the performance obligations in the contract, determining the contract price, allocating the contract price to the distinct performance obligations in the contract, if applicable, and recognizing revenue when the performance obligations have been satisfied. A performance obligation is considered distinct from other obligations in a contract when it provides a benefit to the customer either on its own or together with other resources that are readily available to the customer and is separately identified in the contract. The Company considers a performance obligation satisfied once it has transferred control of a good or service to the customer, meaning the customer has the ability to use and obtain the benefit of the good or service. The Company recognizes revenue for satisfied performance obligations only when it determines there are no uncertainties regarding payment terms or transfer of control.

Revenue from product sales is generally recognized upon shipment to the end customer, which is when control of the product is deemed to be transferred. Invoicing typically occurs prior to shipment and the term between invoicing and when payment is due is not significant.

Revenue is recorded net of discounts, and sales taxes collected on behalf of governmental authorities. Sales commissions are recorded as selling and marketing expenses when incurred.

The Company records any payments received from customers prior to the Company fulfilling its performance obligation(s) as deferred revenue.

The Company had one customer that represented 57.2% of revenue for the year ended June 30, 2021. The Company had three customers that represented 87.6% of revenue (59.6%, 17.4% and 10.6%) for the year ended June 30, 2020. No other customers represented greater than 10% of sales.

Concentration of Credit Risk and Off-Balance Sheet Risk

The Company has no significant off-balance-sheet risk such as foreign exchange contracts, option contracts, or other foreign hedging arrangements. Financial instruments that potentially subject the Company to concentrations of credit risk are principally cash. The Company’s policy is to place its cash in high quality financial institutions. The Company does not believe significant credit risk exists with respect to these institutions.

Leases

The Company recognizes leases with a term of greater than a year on the balance sheet by recording right-of-use assets and lease liabilities. Leases can be classified as either operating leases or finance leases. Operating leases will result in straight-line lease expense, while finance leases will result in front-loaded expense. The Company’s lease consists of an operating lease for office space. The Company does not recognize a lease liability or right-of-use asset on the balance sheet for short-term leases. Instead, the Company recognizes short-term lease payments as an expense on a straight-line basis over the lease term. A short-term lease is defined as a lease that, at the commencement date, has a lease term of 12 months or less and does not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise.

Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company utilizes a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include:

Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;

Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and

Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

During the periods covered by this report, the Company did not have any assets or liabilities that were required to be measured at fair value on a recurring basis or on a non-recurring basis.

Fair Value of Financial Instruments

The Company’s financial instruments consist of accounts payable and accrued expenses. The carrying amounts of the Company’s financial instruments approximate fair value because of the short-term maturity of these items. These fair value estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect those estimates. We do not hold or issue financial instruments for trading purposes, nor do we utilize derivative instruments.

Income Taxes

The Company accounts for income taxes using the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributed to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credits and loss carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences and carry-forwards are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established when necessary to reduce deferred tax assets to amounts expected to be realized. The Company reports a liability for unrecognized tax benefits resulting from uncertain income tax positions, if any, taken or expected to be taken in an income tax return. Estimated interest and penalties are recorded as a component of interest expense or other expense, respectively.

Transactions with Related Parties

Parties are considered to be related to the Company if the parties directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal stockholders of the Company, its management, members of the immediate families of principal stockholders of the Company and its management and other parties with which the Company may deal where one-party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all material related-party transactions. All transactions shall be recorded at fair value of the goods or services exchanged. Property purchased from a related party is recorded at the cost to the related party and any payment to or on behalf of the related party in excess of the cost is reflected as compensation or distribution to related parties depending on the transaction.

Net Income (Loss) Per Share

Basic net loss per common share attributable to common stockholders is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding for the period, without consideration for common stock equivalents. Diluted net loss per common share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common share equivalents outstanding for the period determined using the treasury-stock method. Dilutive common stock equivalents are comprised of convertible notes and warrants to purchase common stock. For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding due to the Company’s net loss position.

The potentially dilutive securities that would be anti-dilutive due to the Company’s net loss are not included in the calculation of diluted net loss per share attributable to common stockholders. The anti-dilutive securities are as follows (in common stock equivalent shares):

Research and Development

Research and development costs primarily consist of research contracts for the advancement of product development. The Company expenses all research and development costs in the period incurred.

Stock-Based Compensation

The Company accounts for stock-based compensation in accordance with Accounting Standards Codification (“ASC”) 718, Stock Based Compensation. ASC 718 requires all stock-based payments to directors, employees and consultants, including grants of stock options, to be recognized in the consolidated statements of operations based on their fair values. If a stock-based award contains performance-based conditions, at the point that it becomes probable that the performance conditions will be met, the Company records a cumulative catch-up of the expense from the grant date to the current date, and then amortizes the remainder of the expense over the remaining service period. Management evaluates when the achievement of a performance-based condition is probable based on the expected satisfaction of the performance conditions as of the reporting date.

Accounting Pronouncements

We evaluate all Accounting Standards Updates (ASUs) issued by the Financial Accounting Standards Board (FASB) for consideration of their applicability. ASUs not included in our disclosures were assessed and determined to be either not applicable or are not expected to have a material impact on our Consolidated Financial Statements.

New Accounting Pronouncements Not Yet Adopted

None.

Accounting Pronouncements Recently Adopted

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” (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models required under current U.S. GAAP. ASU 2020-06 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. ASU 2020-06 is effective for the Company for fiscal years beginning after December 31, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020 and adoption must be as of the beginning of the Company’s annual fiscal year. The Company adopted ASU 2020-06 beginning with our fiscal year starting on July 1, 2021 with no impact on its Financial Statements.

In January 2020, the FASB issued ASU 2020-01 - Investments - Equity securities (Topic 321), Investments - Equity method and joint ventures (Topic 323), and Derivatives and hedging (Topic 815) - Clarifying the interactions between Topic 321, Topic 323, and Topic 815. The amendments in this Update improve the accounting for certain equity securities upon the application or discontinuation of the equity method of accounting and clarify the scope considerations for forward contracts and purchased options on certain securities. The amendments are effective for public entities in fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted. The Company adopted ASU 2020-01 beginning with our fiscal year starting on July 1, 2021 with no impact on its Financial Statements.

In December 2019, the FASB issued ASU 2019-12, Income Taxes – Simplifying the Accounting for Income Taxes. The guidance removes certain exceptions for recognizing deferred taxes for equity method investments, performing intra period allocation, and calculating income taxes in interim periods. The ASU also adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for goodwill and allocating taxes to members of a consolidated group, among others. This guidance is effective for interim and annual reporting periods beginning after December 15, 2020. Early adoption of the standard is permitted, including adoption in interim or annual periods for which financial statements have not yet been issued. The transition requirements are dependent upon each amendment within this update and will be applied either prospectively or retrospectively. The Company adopted ASU 2019-12 effective July 1, 2021 with no impact on its Financial Statements.

NOTE 3 – Equipment

Equipment consists of the following:

During the year ended June 30, 2021, the Company purchased $3,505 of computer equipment. During fiscal 2022 and 2021, the Company recognized depreciation expense of $1,163 and $1,067, respectively.

NOTE 4 – Stockholder’s Equity

Preferred Stock

The Company has Preferred stock: $0.001 par value; 10,000,000 shares authorized with no shares issued and outstanding.

Common Stock

The Company has 400,000,000 shares of Common Stock authorized of which 115,287,079 and 78,713,899 shares were issued and outstanding as of June 30, 2022 and June 30, 2021, respectively.

During fiscal 2022, the Company issued 16,000,000 shares in exchange for services valued at $1,733,100, which includes the issuance of 9,000,000 shares, in total, to the Board of Directors, valued at $387,000.

During fiscal 2022, Firstfire 1) converted $164,000 or principal of Firstfire Note No. 1 at a per share price of $0.03, and received 5,466,666 shares; and 2) converted $31,500 or principal of Firstfire Note No. 2 at a per share price of $0.0063, and received 5,000,000 shares.

On July 10, 2021, the Company and LionsGate Funding Management LLC (“LGFM”) entered into a Media and Marketing Services Agreement (the “MMSA”). Pursuant to the MMSA, 1) LGFM will provide services designed to increase the awareness and visibility in the investment community and market product to distributors throughout the world for a period of 12 months; and 2) the Company will pay LGFM $100,000 and issue 300,000 shares of restricted common stock valued at $129,000. The shares were issued on October 11, 2021. Lionsgate was issued 2,500,000 shares on January 13, 2022 in exchange for services valued at $215,000.

On April 20, 2021, the Company and Empire Associates, Inc. entered into a Stock Purchase Agreement whereby the Company agreed to issue 250,000 to Empire Associates, Inc. in full satisfaction of the $77,060 paid to Geneva by Empire Associates on behalf of the Company. The shares were issued on September 2, 2021.

On April 12, 2021, the Company and Nunzia Pharmaceutical, Inc. entered into a Mutual Sales and Marketing Agreement (the “MSMA”). Pursuant to the terms of the MSMA, each company has mutual abilities to share their products for sale under nonexclusive but favorable conditions and prices. The duration of the agreement is for an initial period of five years commencing on April 12, 2021. As consideration for the MSMA, the Company agreed to issue 5,000,000 shares of its restricted common stock to Nunzia and Nunzia agreed to issue 5,000,000 shares of its restricted common stock to the Company. Due to the related party nature of the MSMA, the Company recorded the issuance of its shares at par value and the receipt of shares from Global at par value or $5,000 and reflected the balance as a non-current asset under the account “Investment in related party.”

On March 30, 2021, the Company entered into a License Agreement (the “IP License Agreement”) with Charles Strongo. Under the terms of the IP License Agreement, the Company has the exclusive license to use the intellectual property, “A Rapid, Micro-Welt or Later flow text for Parkinson’s, Dementia, or Alzheimer or ASD.” The Company agreed to issue 5,000,000 shares of common stock and pay a 2% fee of gross sales from use of the intellectual property. The duration of the IP License Agreement is for an initial period of five years. The IP License Agreement was initially valued at $0.62 per share or $3,100,000. Due to the related party nature of the transfer and the absence of historical cost records, the full $3,100,000 was expensed within “Loss on related party transfer of intangible assets.”

On March 15, 2021, the Company issued 146,486 shares to Geneva Roth Remark Holdings, Inc. For additional information see “NOTE 6 – Convertible Promissory Notes” below.

On February 21, 2021, the Company agreed to issue and on February 25, issued 1,750,000 shares to LionsGate. The Company recorded compensation expense of $1,680,000.

On January 12, 2021, the Company entered into a License Agreement (the “Patent License Agreement”) with Charles Strongo. Under the terms of the Patent License Agreement, the Company has the exclusive license to manufacture, sell and license to be manufactured the only Biodegradable plastic for medical devices. The devices include cassettes, midstream, small buffer bottles, urine cups, and any other plastic type of medical device used in testing or for medical services under provisional patent number 63/054,139. The Company agreed to issue 3,000,000 shares of restricted common stock and pay a 2% fee of gross sales from use of the patent. The duration of the Patent License Agreement is for an initial period of five years. The Patent License Agreement was valued at $0.46 per share or $1,380,000. Due to the related party nature of the transfer and the absence of historical cost records, the full $1,380,000 was expensed within “Loss on related party transfer of intangible assets.”

On January 5, 2021, the Board appointed a new member, Dr. Miriam Lisbeth Paez De La Cerda and issued 200,000 shares of restricted common stock to each of the six Directors for a total issuance of 1,200,000 shares valued at $0.72 per share, the closing price of our common stock on January 5, 2020.

On December 15, 2020, the Company sold 250,000 shares of restricted common stock for $0.36 per share and received $90,000. These shares were issued on February 5, 2021.

On September 24, 2020, the Company and Dr. Scott Ford, Director, entered into a subscription agreement for the purchase 219,298 shares of restricted common stock at a price of $1.14 per share ($250,000 total) which represents a 50% discount to the share price due to the lack of marketability and the thinly traded nature of our common stock on the OTC. These shares were issued on February 5, 2021.

On July 9, 2020, the Company and Dr. Scott Ford, Director, entered into a subscription agreement for the purchase 45,000 shares of restricted common stock at a price of $2.00 per share which represents a 50% discount to the share price due to the lack of marketability and the thinly traded nature of our common stock on the OTC. These shares were issued on February 5, 2021.

EMC2 Capital

On July 22, 2020, the Company entered into a Common Stock Purchase Agreement (the “EMC2 SPA”) and a Registration Rights Agreement with EMC2 Capital, LLC (“EMC2 Capital”) pursuant to which EMC2 Capital agreed to invest up to One Hundred Million Dollars ($100,000,000) to purchase the Company’s common stock at a purchase price as defined in the Common Stock Purchase Agreement (the “Purchase Shares”). As consideration for entry into the EMC2 SPA, the Company agreed to issue 1,415,094 shares of common stock (the “Commitment Shares”) and a warrant to purchase up to two million (2,000,000) shares of common stock (the “Commitment Warrant”). The Commitment Warrant vested upon issuance, expires on its fifth anniversary and had an initial exercise price of $1.59 per share subject to adjustment whereby in the event that the bid price drops below the exercise price, at any time, the exercise price will decease by a prescribed amonut. Since the bid price dropped below $0.59 per share, the exercise price has been adjusted to par value, or $0.001 per share. Additionally, the Company agreed to issue a Registration Rights Agreement as an inducement to EMC2 Capital to execute and deliver the EMC2 SPA, whereby the Company agreed to provide certain registration rights under the Securities Act of 1933, as amended, and the rules and regulations thereunder, and applicable state securities laws, with respect to the shares of common stock issuable for EMC2 Capital’s investment pursuant to the Common Stock Purchase Agreement. The obligation to issue the Commitment Shares and Commitment Warrant and the right of the Company to sell Purchase Shares to EMC2 Capital was dependent on the Company satisfying certain conditions, including notice of effectivness of the shelf registration statement registering the Purchase Shares and the issuance of the Commitment Shares and Commitment Warrant. Our Form S-1 registering 11,993,271 shares of common stock related to the EMC2 SPA was filed on January 28, 2021 and declared effective on March 3, 2021, the measurement date.

The value of the Commitment Shares on the measurement date was $0.89 per share or $1,259,000. The value of the Commitment Warrant on the Measurement Date was $1,780,000 as calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model include: (1) Stock price of $0.89 per share; (2) exercise price of $0.001 per share; (3) discount rate 0.73% (4) expected life of 4.33 years, (5) expected volatility of 227%, and (6) 0zero expected dividends.

As a result of the Securities and Exchange Commission declaring our Registration on Form S-1 effective, the pre conditions necessary for the Company to begin selling Purchase Shares to EMC2 Capital were removed. As a result, the Company determined the relative fair value of the Commitment Warrants and Commitment Shares to be $737,569 and $521,865, respectively and recorded a deferred financing asset of $521,865 and interest expense of $737,569. Subsequent cash receipts from the sale of Purchase Shares were first be allocated to the deferred financing cost asset.

During fiscal 2021, from March 3, 2021 through June 30, 2021, the Company sold 721,663 purchase shares to EMC2 Capital at prices ranging from $0.32 - $0.37 and received total proceeds of $250,051.

During fiscal 2022, the Company sold 7,856,514 Purchase Shares to EMC2 Capital at prices ranging from $0.02 - $0.34 and received total proceeds of $1,476,872. No Purchase Shares were sold during our fourth quarter ended June 30, 2022.

EMC2 also exercised their warrant to purchase 2,000,000 shares in exchange for the exercise price resulting in $2,000 of proceeds.

Warrants

Each of the Company’s warrants outstanding entitles the holder to purchase one share of the Company’s common stock for each warrant share held. A summary of the Company’s warrants outstanding and exercisable as of June 30, 2022 and 2021 is as follows:

NOTE 5 – Transactions with Related Persons

On March 30, 2022, the Board issued a total of 9,000,000 shares of restricted common stock valued at $0.043 per share to its six Directors.

On March 30, 2022, Michael Mitsunaga made a $10,000 payment to the Company’s counsel. Mr. Mitsunaga is the President Nunzia Pharmaceutical Company and was appointed its CEO in February 2022. Mr. Charles Strongo, the Company’s former Chairman and CEO resigned his position as Chairman and CEO of Nunzia Pharmaceutical Company on February 22, 2022. Due to the related party nature of the payment, as of June 30, 2022, the $10,000 is reflected on the balance sheet under the account “related party payables”.

On July 10, 2021, the Company and LionsGate Funding Management LLC (“LGFM”) entered into a Media and Marketing Services Agreement (the “MMSA”). LGFM is a shareholder, has provided significant funding to the Company and former officers of the Company are affiliates of LGFM. Pursuant to the MMSA, 1) LGFM provided services designed to increase the awareness and visibility in the investment community and market product to distributors throughout the world for a period of 12 months; and 2) the Company will pay LGFM $100,000 and issue 300,000 shares of restricted common stock valued at $129,000. The shares were issued on October 11, 2021. Lionsgate was also issued 2,500,000 shares on January 13, 2022 in exchange for services valued at $215,000.

Lionsgate was issued 2,500,000 shares on January 13, 2022 in exchange for services valued at $215,000.

On April 12, 2021, the Company and Nunzia Pharmaceutical, Inc. entered into a Mutual Sales and Marketing Agreement pursuant to which Nunzia and the Company exchanged 5,000,000 shares of common stock. For additional information, see “NOTE 4 – Stockholder’s Equity.”

On March 30, 2021, the Company entered into a five-year License Agreement with Charles Strongo and issued 5,000,000 shares of restricted common stock. For additional information, see “NOTE 4 – Stockholder’s Equity.”

On February 21, 2021 the Company agreed to issue and on February 25, issued 1,750,000 shares to LionsGate. The Company recorded compensation expense of $1,680,000.

On January 12, 2021, the Company entered into a five-year License Agreement with Charles Strongo and issued 3,000,000 shares of restricted common stock. For additional information, see “NOTE 4 – Stockholder’s Equity.”

On January 5, 2021, the Board appointed a new member, Dr. Miriam Lisbeth Paez De La Cerda and issued 200,000 shares of restricted common stock to each of the six Directors for a total issuance of 1,200,000 shares valued at $0.72 per share.

On July 9, 2020 and September 24, 2020, the Company and Dr. Scott Ford entered into a subscription agreement for the purchase of restricted common stock resulting in the payment of $340,000 to the Company, see “Note 4 – Stockholders’ Equity” above for additional information.

Beginning in January 2020, the Company utilizes the R&D capabilities of Pan Probe Biotech to perform studies and work towards the development of the Company’s COVID-19 tests. Dr. Shujie Cui is the Company’s former Chief Science Officer and 100% owner of Pan Probe. During the year ended June 30, 2022, the Company incurred R&D costs of $1,369,097 and paid Pan Probe $1,015,000 for R&D work. As of June 30, 2022 and 2021 the balance due to Pan Probe was $582,577 and $228,480, respectively.

The Company paid rent to Pan Probe on a temporary basis, from April 21, 2020 through October 21, 2020, at a rate of $2,551 per month or $15,306 which was prepaid in full in April 2020. During the year ended June 30, 2021, the Company recognized $10,204 of rent expense related to this arrangement.

Related Party Note

From time-to-time the Company receives shareholder advances from LionsGate to cover operating costs. On March 29, 2020, the Company issued a Promissory Note (the “Note”), and on June 30, 2020, amended the Note (the “Note Amendment”). Pursuant to the Note and Note Amendment, the terms provided for total funding of up to $585,000, interest at the rate of 5% per annum with the principal and interest due in-full on June 30, 2021. On January 27, 2021, the Company and LionsGate entered into a Loan Agreement (the “Loan Agreement”) and Promissory note (the “Promissory Note”) pursuant to which the Company may borrow up to $250,000 at an annual interest rate of 5% and default interest rate of 15%. The Loan Agreement supersedes the Note and Note Amendment and included a beginning balance of $29,951 which was the balance of advances and accrued interest owing under the Note as of January 27, 2021. The Promissory Note matured on December 31, 2021. During fiscal 2022 and 2021, LionsGate provided advances under the Note, Note Amendment and Promissory Note totaling $0 and $144,577, respectively. During fiscal 2022 and 2021, the Company repaid amounts owing under the Note, Note Amendment and Promissory Note totaling $24,000 and $267,750, respectively. The $24,000 fiscal 2022 payment exceeded the balance due of $2,785 by $21,215, resulting in a receivable to the Company which Lionsgate has partially repaid through fiscal 2022 payments totaling $950, leaving a receivable balance due from Lionsgate of $20,266 as of June 30, 2022.

During fiscal 2022 and 2021, the Company recognized $0 and $2,178, respectively, of interest expense related to the Note, Note Amendment and Promissory Note.

NOTE 6 – Convertible Promissory Notes

On April 18, 2020, the Company issued five separate unsecured convertible promissory notes in exchange for $95,000 (the “Convertible Notes”). Each Convertible Note contains the same terms and conditions. The Convertible Notes bear interest of 8%, matured in six months on October 17, 2020 and are convertible at any time into shares of restricted common stock at a conversion price of $9.00 per share. The notes are currently in default. The debt discount attributable to the fair value of the beneficial conversion feature amounted to $42,224 for the Convertible Notes and was accreted over the term of the Convertible Notes. In December of 2020, the Company repaid, in-full, two of the Convertible Notes with principal a balance totaling $10,000 and $500 in interest payable. In November of 2021, the Company repaid, in-full, one of the Convertible Notes with a principal balance totaling $50,000 and $6,425 of interest payable. During the years ended June 30, 2022 and 2021, the Company recognized $4,345 and $7,143, respectively, of interest expense; and $0 and $25,149, respectively, of accretion. As of June 30, 2022, the Convertible Notes principal balance is $35,000 and accrued interest balance is $6,102.

Firstfire Global Opportunities Fund LLC

Firstfire Note No. 1

On June 18, 2021, the Company entered into a Securities Purchase Agreement with Firstfire Global Opportunities Fund LLC (“Firstfire”), for the sale of a secured, 12% senior secured convertible promissory note in the principle amount of $275,000 and 165,000 stock purchase warrants. On July 8, 2021, the Company received $224,500 net of a $25,000 original issue discount, and $25,500 of placement agent and legal fees, and issued a senior secured convertible promissory note (the “Firstfire Note No. 1”) in the amount of $275,000. The terms of the Firstfire Note No. 1 provide for all principal and interest due in twelve (12) months on June 18, 2022, with $33,000 of interest (i.e., $275,000 x 12%) earned as of June 18, 2021, interest due upon default of 20% annually, a prepayment penalty of 5% of all outstanding amounts due, and if the Company triggers and event of default which is not cured, then the total of all amounts owing will be increased by 25%, to be paid at the discretion of Firstfire, in the form of cash or conversion into common stock. The Firstfire Note No. 1 is convertible any time after June 18, 2021 into shares of common stock at a conversion price that is the lesser of $0.35 per share or seventy percent (70%) of the lowest traded price of our common stock during the ten (10) trading day period prior to conversion. Conversion of the Firstfire Note No. 1 and/or the Firstfire Warrant No. 1 is limited to Firstfire beneficially owning no more than 4.99% of the outstanding common stock of the Company.

Additionally, the Company entered into a Registration Rights Agreement with Firstfire whereby the Company agreed to file within 90 days and have declared effective within 120 days from June 18, 2021, a registration statement to cover the shares issuable under the Firstfire Note No. 1 and Firstfire Warrant No. 1. Failure to file within 90 days and have the registration declared effective before 120 days will result in liquidated damages of 1% principal amount.

Due to the Company not filing a registration statement to cover the shares underlying a Firstfire Note No. 1 conversion by the dates specified in the Registration Rights Agreement, the Firstfire Note No. 1 fell into default resulting in the Firstfire Note No. 1 becoming immediately due and the Company recognizing liquidated damages of $2,750 and $77,000 increase in the amount due.

As additional consideration, the Company granted Firstfire a warrant to purchase 165,000 shares of our common stock (the “Firstfire Warrant No. 1”) at an exercise price of $0.50 for a period of three (3) years. The Firstfire Warrant No. 1 contains provision for an anti-dilution adjustment and cashless exercise rights if a registration statement covering the resale of the Firstfire Warrant No. 1 shares is not available for the resale of such Firstfire Warrant No. 1 shares. The fair value of the Firstfire Warrant No. 1 was $0.36 per share and was calculated using the Black-Scholes option pricing model with the following assumptions: (1) Stock price of $0.41 per share; (2) exercise price of $0.50 per share; (3) discount rate 0.47% (4) expected life of 3 years, (5) expected volatility of 194.5%, and (6) 0zero expected dividends. This resulted in allocating $48,849 to the Firstfire Warrant No. 1 and $226,151 to the Firstfire Note No. 1. The debt discount attributable to the beneficial conversion feature was $264,372. As a result of the original issue discount, fees, warrant and beneficial conversion feature of the Firstfire Note No. 1, the Company recorded a debt discount of $275,000.

During the year ended June 30, 2022, Firstfire converted $164,000 of principal of the Firstfire Note No. 1 at an average per share price of $0.03, and received 5,466,666 shares of common stock.

During the year ended June 30, 2022, the Company recognized $34,471 of interest expense.

As of June 30, 2022, the total amount due, including interest and penalties, under the Firstfire Note 1 is $225,221 and is convertible into approximately 40,218,100 shares of common stock.

Firstfire Note No. 2

On August 27, 2021, the Company entered into a Securities Purchase Agreement with Firstfire, for the sale of a secured, 12% senior secured convertible promissory note in the principle amount of $385,000 and 330,000 stock purchase warrants. The Company received $313,700 net of a $35,000 original issue discount and $36,300 of placement agent and legal fees, and issued a senior secured convertible promissory note (the “Firstfire Note No. 2”) in the amount of $385,000. The terms of the Firstfire Note No. 2 provide for all principal and interest due in twelve (12) months on August 27, 2022, with $46,200 of interest (i.e., $385,000 x 12%) earned as of August 27, 2021, interest due upon default of 20% annually, a prepayment penalty of 5% of all outstanding amounts due, and if the Company triggers and event of default which is not cured, then the total of all amounts owing will be increased by 25%, to be paid at the discretion of Firstfire, in the form of cash or conversion into common stock. The Firstfire Note No. 2 is convertible any time after August 27, 2021 if the underlying shares have an effective registration statement, otherwise, the right of conversion commences after 180 days from August 31, 2021 into shares of common stock at a conversion price that is the lesser of $0.35 per share or seventy percent (70%) of the lowest traded price of our common stock during the ten (10) trading day period prior to conversion. Conversion of the Firstfire Note No. 2 and/or the Firstfire Warrant No. 2 is limited to Firstfire beneficially owning no more than 4.99% of the outstanding common stock of the Company.

Additionally, the Company entered into a Registration Rights Agreement with Firstfire whereby the Company agreed to file within 90 days and have declared effective within 120 days from August 27, 2021, a registration statement to cover the shares issuable under the Firstfire Note No. 2 and Firstfire Warrant No. 2. Failure to file within 90 days and have the registration declared effective before 120 days will result in liquidated damages of 1% of the principal amount.

Due to the Company not filing a registration statement to cover the shares underlying a Firstfire Note No. 2 conversion by the dates specified in the Registration Rights Agreement, the Firstfire Note No. 2 fell into default resulting in the Firstfire Note No. 2 becoming immediately due and the Company recognizing liquidated damages of $3,850 and $107,800 increase in the amount due.

As additional consideration, the Company granted Firstfire a warrant to purchase 330,000 shares of our common stock (the “Firstfire Warrant No. 2”) at an exercise price of $0.50 for a period of three (3) years. The Firstfire Warrant No. 2 contains provision for an anti-dilution adjustment and cashless exercise rights if a registration statement covering the resale of the Firstfire Warrant No. 2 shares is not available for the resale of such Firstfire Warrant No. 2 shares. The fair value of the Firstfire Warrant No. 2 was $0.32 per share and was calculated using the Black-Scholes option pricing model with the following assumptions: (1) Stock price of $0.37 per share; (2) exercise price of $0.50 per share; (3) discount rate 0.41% (4) expected life of 3 years, (5) expected volatility of 184.0%, and (6) 0zero expected dividends. This resulted in allocating $82,870 to the Firstfire Warrant No. 2 and $302,130 to the Firstfire Note No. 2. The debt discount attributable to the beneficial conversion feature was $248,111. As a result of the original issue discount, fees, warrant and beneficial conversion feature of the Firstfire Note No. 2, the Company recorded a debt discount of $385,000.

During the year ended June 30, 2022, Firstfire converted $31,500 of principal of the Firstfire Note No. 2 at a per share price of $0.0063, and received 5,000,000 shares of common stock.

During the year ended June 30, 2022, the Company recognized $46,200 of interest expense.

As of June 30, 2022, the total amount due, including interest and penalties, under the Firstfire Note 2 is $511,350 and is convertible into approximately 93,112,500 shares of common stock.

Geneva Promissory Note dated April 26, 2021

On April 26, 2021, the Company and Geneva Roth Remark Holdings, Inc. (“Geneva”) entered into a Securities Purchase Agreement (the “SPA”). Pursuant to the SPA, The Company sold to Geneva a Promissory Note for the principal amount of $86,625 (the “Geneva Promissory Note”) and issued a warrant to purchase up to 51,975 shares of common stock (the “Geneva Warrant”). Under the Geneva Promissory Note the Company received net proceeds of $75,000 which included deductions for a 10% original issue discount, $3,000 for legal fees and $750 as a due diligence fee. The Geneva Promissory Note matured in one (1) year, required ten (10) monthly payments of $9,529 beginning June 1, 2021, and was unsecured. On August 9, 2021, the Company repaid, in whole, the remaining balance due under the Geneva Promissory Note, or $57,173.

During the year ended June 30, 2022 and 2021, the Company made payments totaling $76,230 and $19,058, respectively, recognized interest expense of $3,213 and $5,550, respectively and recognized accretion of the debt discount of $5,951 and $27,460, respectively.

Geneva Convertible Promissory Notes dated July 13, 2020, August 3, 2020 and September 8, 2020

On July 13, 2020, August 3, 2020 and September 8, 2020 (the “Issue Dates”), the Company and Geneva entered into separate and identical Securities Purchase Agreements (the “Geneva SPAs”). Pursuant to the Geneva SPAs, Geneva and the Company entered into separate and identical Convertible Promissory Notes also dated as of July 13, 2020, August 3, 2020 and September 8, 2020 for principal amounts of $63,000, $55,000 and $53,000, respectively (the “Geneva CPNs”). Pursuant to the terms of the Geneva CPNs, the Company received net proceeds of $60,000, $52,000 and $50,000 (the proceeds from each note were funded net of $3,000 in legal fees). The Geneva CPNs matured in one year, accrued interest of 10% and, after 180 days, were convertible into shares of common stock any time at a conversion price equal to 58% of the lowest trading price during the twenty-trading day period ending on the latest complete trading day prior to the conversion date. The Geneva CPN’s may be prepaid anytime up to 180 days from issuance with the following prepayment penalties: 1) The period beginning on the Issue Date and ending on the date which is ninety (90) days following the Issue Date, 125%; 2) The period beginning on the date that is ninety-one (91) day from the Issue Date and ending one hundred fifty (150) days following the Issue Date, 135%; and 3) The period beginning on the date that is one hundred fifty-one (151) day from the Issue Date and ending one hundred eighty (180) days following the Issue Date, 139%.

On December 21, 2020, the Company paid $90,487 as full payment of the Geneva CPN dated July 13, 2020. The payment included $63,000 of principal, $2,917 of interest related to the coupon and $24,570 as a prepayment penalty recorded as interest expense.

On February 16, 2021, Empire Associates, Inc., an unaffiliated company, paid off the balance, in-full, on the note dated August 3, 2020. The payment totaled $77,061 and included $55,000 of principal, $3,256 of interest related to the coupon and $18,805 as a prepayment penalty recorded as interest expense. At the time of payoff, the Company and Empire Associates, Inc. had not entered into any agreements related to the payment of the Geneva CPN dated August 3, 2020. On April 20 the Company and Empire Associates, Inc. entered into a Stock Purchase Agreement whereby the Company agreed to issue 250,000 to Empire Associates, Inc. in full satisfaction of the $77,061 paid to Geneva on behalf of the Company.

On March 15, 2021, the Company issued 146,486 shares of common stock to Geneva upon their conversion, in-full, of $53,000 of Principal and $2,650 of unpaid interest owing under the Geneva CPN dated September 8, 2020.

The debt discount attributable to the legal fees paid and fair value of the beneficial conversion feature contained in the Geneva CPNs amounted to $132,831 and was accreted over the term of the Geneva CPNs. In the event a Geneva CPN was paid in advance of its maturity date, the future accretion was recorded in the period the related Geneva CPN was repaid.

The Geneva CPNs were repaid in full in fiscal 2021. During the year ended June 30, 2021, the Company recognized $9,380 of interest expense, $43,374 of in penalties and $132,831 of accretion related to the debt discount.

NOTE 7 – Leases

On September 14, 2021, in anticipation of increased business, the Company leased 6,900 square feet of office and light industrial space located at 1130 Calle Cordillera, San Clemente, California and entered into a Standard Multi-Tenant Office Lease (the “Lease”). Pursuant to the Lease the term is five years beginning on October 15, 2021, the Company paid a security deposit of $32,621, and monthly base rent is $9,696 subject to an annual increase of 3% each year.

On July 13, 2022, the Company received a notice to pay rent or surrender the premises located at 1130 Calle Cordillera, San Clemente, California due to non payment of rent for the months of April 2022 – July 2022 and totaling $35,391. In mid August 2022, the Company surrendered the premises and the deposit of $32,621 towards payment of the balance owed leaving a liability of $2,770.

As of June 30, 2022, the Company has not entered into any leases other than the lease described above which have not yet commenced and would entitle the Company to significant rights or create additional obligations.

NOTE 8 – Income Taxes

Income taxes are accounted for using an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company’s financial statements or tax returns. A valuation allowance is established to reduce deferred tax assets if all, or some portion, of such assets will more than likely not be realized.

There is no current or deferred tax expense for 2022 and 2021, due to the Company’s loss position. Realization of the future tax benefits related to the deferred tax assets is dependent on many factors, including the Company’s ability to generate taxable income within the net operating loss carryforward period. Management has considered these factors in reaching its conclusion as to the valuation allowance for financial reporting purposes and has recorded a full valuation allowance against the deferred tax asset.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets at June 30, 2022 and 2021 are as follows:

A reconciliation between the amount of income tax benefit determined by applying the applicable U.S. statutory income tax rate to pre-tax loss for the years ended June 30, 2022 and 2021 is as follows:

The net increase in the valuation allowance for deferred tax assets was $571,002 and $232,811 for the years ended June 30, 2022 and 2021, respectively. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Due to the uncertainty of realizing the deferred tax asset, management has recorded a valuation allowance against the entire deferred tax asset.

For federal income tax purposes, the Company has net U.S. operating loss carry forwards at June 30, 2022 available to offset future federal taxable income, if any, of approximately $3,994,223. The utilization of the tax net operating loss carry forwards may be limited due to ownership changes that have occurred as a result of sales of common stock.

The fiscal years 2019 through 2021 remain open to examination by federal authorities and other jurisdictions in which the Company operates.

NOTE 9 – Commitments and Contingencies

On September 14, 2021, the Company leased 6,900 square feet of office and light industrial space located at 1130 Calle Cordillera, San Clemente, California. See “Note 6 - Leases” and “Note 10 – Subsequent Events” for additional information.

On February 17, 2022, the Securities and Exchange Commission filed a lawsuit in the federal district court for the Southern District of California, charging the Company, former CEO Charles Strongo, and four stock promoters with violations of section 10(b) of the Securities Exchange Act of 1934 and section 17(a) of the Securities Act of 1933. The SEC’s complaint seeks injunctive relief, disgorgement of funds allegedly received from illegal conduct plus pre-judgment interest, and the civil penalties. On the same day, the US Attorney’s Office for the Southern District of California announced the unsealing of an indictment charging Mr. Strongo and the promoters with conspiring to manipulate the market for the Company’s stock in an alleged “pump-and-dump” scheme through allegedly false and misleading statements in press releases and SEC filings concerning the Company’s emergency use authorization submissions to the Food and Drug Administration for COVID-19 tests. The matter is presently stayed pending the conclusion of the criminal case, United States of America v. Brian Volmer et. al., United States District Court, Southern District Case No. 21-cr-1310-WQH, in which Mr. Strongo is also named as a defendant. Mr. Strongo adamantly denies the allegations and has entered a plea of not guilty to the charges. Total legal costs recognized through fiscal 2022 were $72,949. Due to the nature and early stage of the SEC Action, the Company is unable to estimate the total costs to defend itself or the potential costs to the Company in the event that it is not successful in its defense.

NOTE 10 – Subsequent Events

Management has reviewed material events subsequent of the period ended June 30, 2022 and prior to the filing of our consolidated financial statements in accordance with FASB ASC 855 “Subsequent Events”.

On July 25, 2022, Firstfire converted $29,750 of principal under the Firstfire Note 2 and received 5,000,000 shares of common stock.

On Agust 3, 2022, Firstfire converted $20,000 of principal under the Firstfire Note 2 and received 5,000,000 shares of common stock.

On September 6, 2022, Firstfire converted $23,100 of principal under the Firstfire Note 2 and received 5,000,000 shares of common stock.

On July 13, 2022, the Company received a notice to pay rent or surrender the premises located at 1130 Calle Cordillera, San Clemente, California due to non payment of rent for the months of April 2022 – July 2022 and totaling $35,391. In mid August 2022, the Company surrendered the premises and the deposit of $32,621 towards payment of the balance owed.

On July 21, 2022, the Company and 1800 Diagonal Lending LLC (“1800 Diagonal”) entered into a Securities Purchase Agreement (the “1800 Diagonal SPA”). Pursuant to the 1800 Diagonal SPA, the Company sold to 1800 Diagonal a Promissory Note for the principal amount of $114,675 (the “1800 Diagonal Promissory Note”). Pursuant to the 1800 Diagonal Promissory Note the Company received net proceeds of $100,000 which included deductions for a $10,425 original issue discount, $3,000 for legal fees and $1,250 as a due diligence fee. The 1800 Diagonal Promissory Note matures in one (1) year, requires no payments until maturity, is unsecured and subject to customary remedies upon default. Beginning 180 days for the date of the 1800 Diagonal Promissory Note, the 1800 Diagonal Promissory Note becomes, at the option of 1800 Diagonal, convertible into shares of common stock at an exercise price of 75% multiplied by the average of the three lowest closing bid prices over the 15 days prior to the conversion date. 1800 Diagonal has agreed to restrict its ability to convert the 1800 Diagonal Promissory Note and receive shares of common stock such that the number of shares of common stock held by them in the aggregate and their affiliates after such conversion or exercise does not exceed 4.99% of the then issued and outstanding shares of common stock. The 1800 Diagonal Promissory Note represents a debt obligation arising other than in the ordinary course of business, which constitutes a direct financial obligation of the Company. The foregoing summary of the 1800 Diagonal SPA and 1800 Diahonal Promissory Note does not purport to be complete and is qualified in its entirety by reference to the full text of the 1800 Diagonal SPA and 1800 Diahonal Promissory Note which are filed herewith by the Company as Exhibit 10.12 and 10.13, respectively, to this report.

On July 27, 2022, the Company and Coventry Enterprises LLC (“Coventry”) entered into a Securities Purchase Agreement (the “Coventry SPA”). Pursuant to the Coventry SPA, the Company sold to Coventry a promissory note for the principal amount of $125,000 (the “Coventry Note”) and agreed to issue 1,000,000 shares of common stock (the “Common Stock Fee”). Pursuant to the Coventry Note, the Company received net proceeds of $106,250 which included deductions for an original issue discount of $18,750. Also, the Company paid a 3rd party broker the sum of $7,000 as a commission related to the Coventry Note. The Coventry Note includes 10% or $12,500 of guaranteed interest, matures in one (1) year, requires seven payments of $19,642.85 beginning December 27, 2022, is unsecured and subject to customary remedies upon default, including accruing interest at 18% and becoming convertible into common stock at a conversion price per share equal to 90% of the lowest per-share trading price during the twenty (20) trading day period before the conversion. The Coventry Note represents a debt obligation arising other than in the ordinary course of business, which constitutes a direct financial obligation of the Company. The foregoing summary of the Coventry SPA and Coventry Note does not purport to be complete and is qualified in its entirety by reference to the full text of the Coventry SPA and Coventry Note which are filed herewith by the Company as Exhibit 10.14 and 10.15, respectively, to this report. As a result of the original issue discount, the Common Stock Fee valued at $9,000, and the $7,000 broker commission, the Company recorded a debt discount of $34,750 which is being accreted over the term of the Coventry Note.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), as of the end of the period covered by this quarterly report. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of June 30, 2022, that our disclosure controls and procedures were effective such that the information required to be disclosed in our SEC filings is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

(b) Management’s Report on Internal Control over Financial Reporting

Management’s Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our internal control over financial reporting is a process designed under the supervision of our principal executive officer and principal financial officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external reporting purposes in accordance with US GAAP. Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

As of June 30, 2022, our management, including our principal executive officer and principal financial officer, assessed the effectiveness of our internal control over financial reporting using the criteria set forth in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (comm. only referred to as COSO). Based on this assessment, our management concluded that our internal control over financial reporting was effective based on those criteria as of June 30, 2022.

(c) Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth the names and ages of all of our directors and executive officers as of the date of this report. We have a Board comprised of two members. Each director holds office until a successor is duly elected or appointed. Executive officers serve at the discretion of the Board and are appointed by the Board. Also provided herein are brief descriptions of the business experience of each of the directors and officers during the past five years, and an indication of directorships held by each director in other companies subject to the reporting requirements under the Federal securities law.

Former Officers and Directors

Dr. Miriam Lisbeth Paez De La Cerda, Director from August 1, 2019 to her resignation on August 5, 2022.

Dr. Shuijie Cui, Chief Science Officer and Director from August 1, 2019 to his resignation on July 19, 2022.

Wolfgang Groeters, Director from August 1, 2019 to his resignation on July 19, 2022. 

Dr. Scott Ford, Director from August 1, 2019 to his resignation on July 19, 2022.

Charles Strongo, Chairman, CEO from August 1, 2019 and Secretary from April 15, 2020 to his resignation on July 12, 2022.

Biographical Information

Set forth below are the names of all of our directors and executive officers, all positions and offices held by each person, the period during which each has served as such, and the principal occupations and employment of such persons during at least the last five years, and other director positions held currently or during the last five years:

Current Directors and Officers

Rene Alvarez. Mr. Alvarez currently serves as the Company’s COO/President as of May 8, 2020 and Director since August 1, 2019. Mr. Alvarez is a graduate of Canisius College (BS in Accounting) and earned a law degree at the State University of New York at Buffalo (LLB and JD degrees). He was admitted to the New York State Bar Association in 1969. Mr. Alvarez also spent two years in the U.S. Army where he attained the rank of Captain and earned the Bronze Star while serving in Viet Nam. After fulfilling his military service, he joined Ford Motor Company in 1969 where he held various key executive positions including Senior Vice President of a Ford subsidiary from which he retired in 1999. After retiring, Mr. Alvarez joined LA Fitness International, LLC as Corporate Vice President until he once again retired in June of 2011. Mr. Alvarez also served as Chairman of the Board of L. L. Knickerbocker Company, a major marketing and distribution source for celebrity products and currently serves on the Boards of Planet Electric, Inc., Whole Health Product, Inc., Las Vegas Cares, and Nevco Co. Mr. Alvarez resides in Newport Beach, California with his wife and two children.

Mr. Edgar B. Gonzalez. Mr. Gonzalez is the Executive Vice President of Sales, Operations, Marketing and sits on the Board Of Directors of the Company. Mr. Gonzalez has over 30+ years of experience in Business Finance and Corporate Management. Previously, Mr. Gonzalez founded and was President of California Investments which he owned and operated for 25 years and exceeded sales of over 700 million Dollars worldwide. Mr. Gonzalez has been a leader within the international community in contracts and financing, is considered a stakeholder with Federal Drug Administration having been a participant with them and has international contacts throughout the world, many of whom hold high positions within their governments and in their Ministry of Health Departments.

All of our directors are elected annually to serve for one year or until their successors are duly elected and qualified.

Family Relationships and Other Matters

There are no family relationships among or between any of our officers and directors.

Legal Proceedings

None of or directors or officers are involved in any legal proceedings as described in Regulation S-K (§229.401(f)).

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Because we do not have a class of equity securities registered pursuant to section 12 of the Exchange Act we are not required to make the disclosures required by Item 405 of Regulation SK.

CODE OF ETHICS

We have not adopted a code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer, or persons performing similar functions, because of the small number of persons involved in the management of the Company.

CORPORATE GOVERNANCE

Director Independence

We are not listed on a major U.S. securities exchange and, therefore, are not subject to the corporate governance requirements of any such exchange, including those related to the independence of directors However, Our Board considers that a director is independent when the director is not an officer or employee of the Company, does not have any relationship which would, or could reasonably appear to, materially interfere with the independent judgment of such director, and the director otherwise meets the independence requirements under the listing standards of FINRA and the rules and regulations of the SEC. At this time, after considering all of the relevant facts and circumstances, our Board has determined that Wolfgang Groeters and qualify as an “independent” director. Upon our listing on any national securities exchange or any inter-dealer quotation system, we will elect such independent directors as is necessary under the rules of any such securities exchange.

Board Leadership Structure

We currently have one executive officer and two directors. Our Board has reviewed our current Board leadership structure — which consists of a Chief Executive Officer who is also the Treasurer, Secretary and Chairman of the Board — in light of the composition of the Board, our size, the nature of our business, the regulatory framework under which we operate, our stockholder base, our peer group and other relevant factors, and has determined that this structure is currently the most appropriate Board leadership structure for our company. Nevertheless, the Board intends to carefully evaluate from time to time whether our Executive Officer and Chairman positions should be separated based on what the Board believes is best for us and our stockholders.

Board Role in Risk Oversight

Risk is inherent in every business, and how well a business manages risk can ultimately determine its success. We face a number of risks, including strategic risks, enterprise risks, financial risks, and regulatory risks. While our management is responsible for day-to-day management of various risks we face, the Board, as a whole, is responsible for evaluating our exposure to risk and to satisfy itself that the risk management processes designed and implemented by management are adequate and functioning as designed. The Board reviews and discusses policies with respect to risk assessment and risk management. The Board also has oversight responsibility with respect to the integrity of our financial reporting process and systems of internal control regarding finance and accounting, as well as its financial statements.

Board of Directors Meetings, Committees of the Board of Directors, and Annual Meeting Attendance

During the fiscal year ended June 30, 2022, the Board held a total of one (1) meeting. Shareholders were invited to attend via Zoom. We did not, however, have a qualifying annual meeting of shareholders during the fiscal years ended June 30, 2022 and 2021.

We do not currently have any standing committees of the Board. The full Board is responsible for performing the functions of: (i) the Audit Committee, (ii) the Compensation Committee and (iii) the Nominating Committee.

ITEM 11. EXECUTIVE COMPENSATION

Our Board is responsible for establishing the compensation and benefits for our executive officers. The Board reviews the performance and total compensation package for our executive officers, and considers the modification of existing compensation and the adoption of new compensation plans. The board has not retained any compensation consultants.

Summary Compensation Table

The following table sets forth information concerning compensation earned for services rendered to us by our executive officers who were serving as executive officers during the fiscal years ended June 30, 2022 and 2021:

Employment Agreements

We currently have no employment agreements in place. The Board approved cash compensation to be paid to Mr. Strongo and Mr. Alvarez for fiscal 2021 in the amount of $75,000 and $79,800, respectively, and to compensate each of Messrs. Strongo and Alvarez $75,000 during fiscal 2022.

Outstanding Equity Awards as Fiscal Year-End

None.

Payments Upon Termination of Change in Control

There are no understandings or agreements known by management at this time which would result in a change in control.

COMPENSATION OF DIRECTORS

Our directors play a critical role in guiding our strategic direction and overseeing the management of our Company. Ongoing developments in corporate governance and financial reporting have resulted in an increased demand for such highly qualified and productive public company directors. The many responsibilities and risks and the substantial time commitment of being a director of a public company require that we provide adequate incentives for our directors’ continued performance by paying compensation commensurate with our directors’ workload. In establishing director compensation, the Board is guided by the following goals:

For their services as directors, on March 30, 2022, the Board granted 9,000,000 shares of restricted common stock to its directors. The stock was valued at the close price of our common stock ($0.043 per share) or $387,000 in total to the following individuals:

For their services as directors, on January 5, 2021, the Board granted 200,000 shares of restricted common stock to each of the six (6) directors. The stock was valued at the close price of our common stock ($0.72 per share) or $144,000 per director and $864,000 in total.

Limitation on Directors’ Liabilities; Indemnification of Officers and Directors

Our Bylaws designate the relative duties and responsibilities of our officers and establish procedures for actions by directors and stockholders and other items. Our bylaws also contain indemnification provisions, which will permit us to indemnify our officers and directors to the maximum extent provided by Nevada law. For additional information, see Exhibit 3.2 to this Annual Report.

Directors’ and Officers’ Liability Insurance

We have not obtained directors’ and officers’ liability insurance.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth certain information as of the date of this report by (i) all persons who are known by us to beneficially own more than 5% of our outstanding shares of common stock, (ii) each director, director nominee, and Named Executive Officer; and (iii) all executive officers and directors as a group: