GlobeStar Therapeutics Corp - Quarter Report: 2020 March (Form 10-Q)

UNITED STATES

SECURITY AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_________________________

FORM 10-Q

_________________________

(MARK ONE)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2020

☐ TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

Commission File Number: 333-170315

AngioSoma Inc.

(Exact name of registrant as specified in its charter)


Wyoming		27-3480481
(State or other jurisdiction of Incorporation or organization)		(I.R.S. Employer Identification Number)

2500 Wilcrest Drive, 3^rd Floor Houston, TX		77042
(Address of principal executive offices)		(Zip code)

Registrant’s telephone number, including area code: 832-781-8521

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


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☒
(Do not check is smaller reporting company)		Emerging growth company	☐

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

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

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


Title of each class	Trading Symbol	Name of each exchange on which registered
N/A	N/A	N/A

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. As of May 4, 2020, 319,439,508 shares of common stock issued and outstanding.

Table of Contents

TABLE OF CONTENTS


PART I — FINANCIAL INFORMATION	4

Item 1. Financial Statements	4

Consolidated Balance Sheets as of March 31, 2020 and September 30, 2019 (Unaudited)	4

Consolidated Statements of Operations for the Three and Six Months Ended March 31, 2020 and 2019 (Unaudited)	5

Consolidated Statement of Changes in Stockholders’ Equity (Deficit) for the Three and Six Months Ended March 31, 2020 and 2019 (Unaudited)	6-7

Consolidated Statements of Cash Flows for the Six Months Ended March 31, 2020 and 2019 (Unaudited)	8

Notes to the Unaudited Consolidated Financial Statements	9-13

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	13-14

Item 3. Quantitative and Qualitative Disclosures about Market Risk	14

Item 4. Controls and Procedures	15

PART II — OTHER INFORMATION	15

Item 1. Legal Proceedings	15

Item 1A. Risk Factors	15

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	15-16

Item 3. Defaults upon Senior Securities	16

Item 4. Mine Safety Disclosures	16

Item 5. Other Information	16

Item 6. Exhibits	16

- 2 -

Table of Contents

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

Certain statements in this report contain or may contain forward-looking statements. These statements, identified by words such as “plan”, “anticipate”, “believe”, “estimate”, “should”, “expect” and similar expressions include our expectations and objectives regarding our future financial position, operating results and business strategy. These statements are subject to known and unknown risks, uncertainties and other factors, which may cause actual results, performance, or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward - looking statements. These forward-looking statements were based on various factors and were derived utilizing numerous assumptions and other factors that could cause our actual results to differ materially from those in the forward-looking statements. These factors include, but are not limited to, our ability to secure suitable financing to continue with our existing business or change our business and conclude a merger, acquisition or combination with a business prospect, economic, political and market conditions and fluctuations, government and industry regulation, interest rate risk, U.S. and global competition, and other factors. Most of these factors are difficult to predict accurately and are generally beyond our control. You should consider the areas of risk described in connection with any forward-looking statements that may be made herein. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. Readers should carefully review this report in its entirety, including but not limited to our financial statements and the notes thereto and the risks described in our Annual Report on Form 10-K for the fiscal year ended September 30, 2019. We advise you to carefully review the reports and documents we file from time to time with the Securities and Exchange Commission (the “SEC”), particularly our quarterly reports on Form 10-Q and our current reports on Form 8-K. Except for our ongoing obligations to disclose material information under the Federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events.

OTHER PERTINENT INFORMATION

When used in this report, the terms, “we,” the “Company,” “our,” and “us” refers to AngioSoma Inc., a Wyoming corporation and its subsidiaries unless the context specifically indicates otherwise.

- 3 -

Table of Contents

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ANGIOSOMA INC.

CONSOLIDATED BALANCE SHEETS


	March 31,			September 30,
	2020			2019
	(Unaudited)
CURRENT ASSETS
Cash and cash equivalents	$	33,231		$	100,459
Prepaid expenses		2,348			787
Inventory		40,081			40,115
Total current assets		75,660			141,361

Fixed assets, net		1,304			822

TOTAL ASSETS	$	76,964		$	142,183

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities
Accounts payable and accrued liabilities	$	133,470		$	135,067
Accounts payable to related party		173,568			291,372
Advances payable		59,650			59,650
Current portion of convertible notes payable, net of discount of $2,057 and $52,205, respectively		90,943			113,795
Current portion of accrued interest payable		224,553			227,734

Total current liabilities		682,184			827,618

TOTAL LIABILITIES		682,184			827,618

COMMITMENTS AND CONTINGENCIES		—			—

STOCKHOLDERS’ DEFICIT
Common stock, $0.001 par value; 480,000,000 shares authorized; 304,278,218 and 170,467,283 shares issued and outstanding at March 31, 2020 and September 30, 2019, respectively		304,278			170,468
Preferred stock; 20,000,000 shares authorized:
Series A Preferred Stock, $0.001 par value, 0 and 5,800,000 shares issued and outstanding at March 31, 2020 and September 30, 2019, respectively		—			4,590,535
Series D Preferred Stock, $0.001 par value; 509,988 shares issued and outstanding at March 31, 2020 and September 30, 2019, respectively		510			510
Series E Preferred Stock, $0.001 par value; 1,000,000 shares issued and outstanding at March 31, 2020 and September 30, 2019, respectively		1,000			1,000
Series F Preferred Stock; $0.001 par value; 386,975 shares issued and outstanding at March 31, 2020 and September 30, 2019, respectively		387			387
Additional paid-in capital		6,041,561			1,225,272
Accumulated deficit		(6,952,956	)		(6,673,607	)

TOTAL STOCKHOLDERS’ DEFICIT		(605,220	)		(685,435	)

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	76,964		$	142,183

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

- 4 -

Table of Contents

ANGIOSOMA INC.

CONSOLIDATED STATEMENT OF OPERATIONS

(UNAUDITED)


	Three Months Ended						Six Months Ended
	March 31,						March 31,
	2020			2019			2020			2019
REVENUE	$	—		$	—		$	77		$	275
Cost of goods sold		—			—			14			47
		—			—			63			228

OPERATING EXPENSES
General and administrative expenses		51,389			70,786			125,685			200,409
Total operating expenses		51,389			70,786			125,685			200,409

LOSS FROM OPERATIONS		(51,389	)		(70,786	)		(125,622	)		(200,181	)

OTHER INCOME (EXPENSE)
Loss on conversion of debt		—			(16,236	)		—			(131,547	)
Interest expense		(66,923	)		(103,241	)		(153,727	)		(186,778	)

Net Loss	$	(118,312	)	$	(190,263	)	$	(279,349	)	$	(518,506	)

Net loss per common share	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.01	)

Weighted average shares outstanding - basic and diluted		235,768,659			92,551,946			212,861,298			83,543,153

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

- 5 -

Table of Contents

ANGIOSOMA INC.

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIT

(UNAUDITED)


	Common stock				Series A Preferred Stock				Series B Preferred Stock				Series D Preferred Stock				Series E Preferred Stock				Series F Preferred Stock				Additional paid-in		Accumulated Other Comprehensive		Accumulated			Total Equity
	Shares		Par		Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		capital		Income		Deficit			(Deficit)
Balance, September 30, 2018		69,323,021	$	69,323		5,000,000	$	2,990,535		—	$	—		509,988	$	510		1,000,000	$	1,000		446,975	$	447	$	2,065,018	$	971	$	(5,998,535	)	$	(870,731	)

Common stock issued for conversion of convertible note payable and accrued interest		12,265,832		12,266		—		—		—		—		—		—		—		—		—		—		61,214		—		—			73,480

Issuance of Common stock officer as compensation		3,500,000		3,500		—		—		—		—		—		—		—		—		—		—		64,750		—		—			68,250

Beneficial conversion discount on convertible notes payable		—		—		—		—		—		—		—		—		—		—		—		—		97,421		—		—			97,421

Loss on conversion of debt		—		—		—		—		—		—		—		—		—		—		—		—		115,311		—		—			115,311

Net loss for the three months ended December 31, 2018		—		—		—		—		—		—		—		—		—		—		—		—		—		—		(328,243	)		(328,243	)

Balance, December 31, 2018		85,088,853	$	85,089		5,000,000	$	2,990,535		—	$	—		509,988	$	510		1,000,000	$	1,000		446,975	$	447	$	2,403,714	$	971	$	(6,326,778	)	$	(844,512	)

Common stock issued for conversion of convertible note payable and accrued interest		15,152,998		15,154		—		—		—		—		—		—		—		—		—		—		95,807		—		—			110,961

Beneficial conversion discount on convertible notes payable		—		—		—		—		—		—		—		—		—		—		—		—		64,407		—		—			64,407

Loss on conversion of debt		—		—		—		—		—		—		—		—		—		—		—		—		16,236		—		—			16,236

Net loss for the three months ended March 31, 2019		—		—		—		—		—		—		—		—		—		—		—		—		—		—		(190,263	)		(190,263	)

Balance, March 31, 2019		100,241,851	$	100,243		5,000,000	$	2,990,535		—	$	—		509,988	$	510		1,000,000	$	1,000		446,975	$	447	$	2,580,164	$	971	$	(6,517,041	)	$	(843,171	)

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

- 6 -

Table of Contents

ANGIOSOMA INC.

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIT

(UNAUDITED)


	Common stock				Series A Preferred Stock						Series B Preferred Stock				Series D Preferred Stock				Series E Preferred Stock				Series F Preferred Stock				Additional paid-in			Accumulated Other Comprehensive		Accumulated			Total Equity
	Shares		Par		Shares			Amount			Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		capital			Income		Deficit			(Deficit)
Balance, September 30, 2019		170,467,283	$	170,468		5,800,000		$	4,590,535			—	$	—		509,988	$	510		1,000,000	$	1,000		386,975	$	387	$	1,225,272		$	—	$	(6,673,607	)	$	(685,435	)

Common stock issued for conversion of convertible note payable and accrued interest		39,833,749		39,833		—			—			—		—		—		—		—		—		—		—		44,967			—		—			84,800

Beneficial conversion discount on convertible notes payable		—		—		—			—			—		—		—		—		—		—		—		—		32,000			—		—			32,000

Return of preferred shares and retirement of accrued compensation from legal settlement		—		—		(5,800,000	)		(4,590,535	)		—		—		—		—		—		—		—		—		4,703,339			—		—			112,804

Net loss for the three months ended December 31, 2019		—		—		—			—			—		—		—		—		—		—		—		—		—			—		(161,037	)		(161,037	)

Balance, December 31, 2019		210,301,032	$	210,301		—		$	—			—	$	—		509,988	$	510		1,000,000	$	1,000		386,975	$	387	$	6,005,578		$	—	$	(6,834,644	)	$	(616,868	)

Common stock issued for conversion of convertible note payable and accrued interest		93,977,186		93,977		—			—			—		—		—		—		—		—		—		—		(24,017	)		—		—			69,960

Beneficial conversion discount on convertible notes payable		—		—		—			—			—		—		—		—		—		—		—		—		60,000			—		—			60,000

Net loss for the three months ended March 31, 2020		—		—		—			—			—		—		—		—		—		—		—		—		—			—		(118,312	)		(118,312	)

Balance, March 31, 2020		304,278,218	$	304,278		—		$	—			—	$	—		509,988	$	510		1,000,000	$	1,000		386,975	$	387	$	6,041,561		$	—	$	(6,952,956	)	$	(605,220	)

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

- 7 -

Table of Contents

ANGIOSOMA INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)


	Six Months Ended
	March 31,
	2020			2019
CASH FLOW FROM OPERATING ACTIVITIES:
Net loss	$	(279,349	)	$	(518,506	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock compensation		—			68,250
Depreciation		1,032			236
Amortization of discount on convertible note payable		148,148			176,148
Loss on conversion of debt		—			131,547
Changes in operating assets and liabilities
Inventory		34			(20,064	)
Prepaid expenses		(1,561	)		(2,362	)
Accounts payable and accrued liabilities		(1,597	)		6,666
Accounts payable and accrued liabilities to related party		(5,000	)		5,000
Accrued interest payable		5,579			10,630
NET CASH (USED IN) OPERATING ACTIVITIES		(132,714	)		(142,455	)

CASH FLOWS FROM INVESTING ACTIVITIES
Cash used to acquire fixed assets		(1,514	)		—
NET CASH (USED IN) INVESTING ACTIVITIES		(1,514	)		—

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from convertible notes payable		73,000			135,000
Payment of deferred finance costs		(6,000	)		—
NET CASH PROVIDED BY FINANCING ACTIVITIES		67,000			135,000

NET CHANGE IN CASH AND CASH EQUIVALENTS		(67,228	)		(7,455	)

Cash and cash equivalents at beginning of period		100,459			91,597

Cash and cash equivalents at end of period	$	33,231		$	84,142

Cash paid during the period for:
Interest	$	—		$	—
Taxes	$	—		$	—

Noncash investing and financing transactions:
Conversion of convertible notes payable into common stock	$	154,760		$	184,441
Return of Series A preferred shares and settlement of related party compensation	$	4,703,339		$	—
Beneficial conversion discount on convertible notes payable	$	92,000		$	161,828

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

- 8 -

Table of Contents

ANGIOSOMA INC.

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2020

(Unaudited)

Note 1. General Organization and Business

AngioSoma is a wellness company dedicated to bringing innovative, effective and high-quality supplement products to the medical, wellness and adult-use markets through our marketing subsidiary, SomaCeuticals^TM. SomaCeuticals has acquired a diversified supply of supplements, strong clinical, scientific and operating capabilities and leading product research and development infrastructure in order to create trusted products and brands in an expanding global market.

We have abandoned our pursuit of FDA clearance and marketing of any drugs or products, including Liprostin^TM, the patented pharmaceutical for a controlled drug delivery system. When rights to the drug were acquired it was represented that the initial clinical trials had been successfully completed and the single remaining trial was eligible to go forward. Research disclosed the representations are untrue. Therefore, further efforts to seek clearance and market the product ceased.

The Company was incorporated on April 29, 2016. The Company’s year-end is September 30. On October 4, 2019, the Company filed Articles of Continuance with the Secretary of State of Wyoming to continue its business in the state of Wyoming. The Company filed its Certificate of Dissolution with the Secretary of State of Nevada on October 21, 2019 since it is no longer a Nevada corporation. The Company undertook the necessary steps to notify the Financial Industry Regulatory Authority (“FINRA”) of the move from Nevada to Wyoming, and on October 28, 2019, FINRA notified the Company that FINRA has updated their system to reflect that the Company is now a Wyoming company.

Note 2. Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. For the six months ended March 31, 2020, the Company had a net loss of $279,349 and negative cash flow from operating activities of $132,714. As of March 31, 2020, the Company had negative working capital of $606,524. Management does not anticipate having positive cash flow from operations in the near future.

These factors raise a substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the possible inability of the Company to continue as a going concern.

Management has plans to address the Company’s financial situation as follows:

In the near term, management plans to continue to focus on raising the funds necessary to implement the Company’s business plan. Management will continue to seek out debt financing to obtain the capital required to meet the Company’s financial obligations. There is no assurance, however, that lenders will advance capital to the Company or that the new business operations will be profitable. The possibility of failure in obtaining additional funding and the potential inability to achieve profitability raise doubts about the Company’s ability to continue as a going concern.

In the long term, management believes that the Company’s projects and initiatives will be successful and will provide cash flow to the Company, which will be used to finance the Company’s future growth. However, there can be no assurances that the Company’s planned activities will be successful, or that the Company will ultimately attain profitability. The Company’s long-term viability depends on its ability to obtain adequate sources of debt or equity funding to meet current commitments and fund the continuation of its business operations, and the ability of the Company to achieve adequate profitability and cash flows from operations to sustain its operations.

- 9 -

Table of Contents

Note 3. Summary of Significant Accounting Policies

Interim Financial Statements

The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Regulation S-X and should be read in conjunction with the audited financial statements and notes thereto for the year ended September 30, 2019 which are included on our Form 10-K filed on December 31, 2019. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for the three and six months ended March 31, 2019 are not necessarily indicative of the results to be expected for the full fiscal year ending September 30, 2020.

Consolidated Financial Statements

The consolidated financial statements of the Company include the accounts of the Company and its wholly owned subsidiaries, SomaCeuticals, Inc., First Titan Energy, LLC and First Titan Technical, LLC from the date of their formations or acquisition. Significant intercompany transactions have been eliminated in consolidation.

Recently Issued Accounting Pronouncements

We have reviewed the FASB issued Accounting Standards Update (“ASU”) accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the corporation’s reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of our financial management and certain standards are under consideration.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842): Accounting for Leases. This update requires that lessees recognize right-of-use assets and lease liabilities that are measured at the present value of the future lease payments at lease commencement date. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee will largely remain unchanged and shall continue to depend on its classification as a finance or operating lease. We have performed a comprehensive review in order to determine what changes were required to support the adoption of this new standard. We elected certain practical expedients permitted under the transition guidance and the optional transition method that allows for a cumulative-effect adjustment in the period of adoption and will not restate prior periods. Under the new guidance, the majority of our leases will continue to be classified as operating leases. The Company adopted this guidance on October 1, 2019, with no impact to the consolidated financial statements due to the Company not being a party to any lease agreements.

In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment, which simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. In computing the implied fair value of goodwill under Step 2, current U.S. GAAP requires the performance of procedures to determine the fair value at the impairment testing date of assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, the amendments under this ASU require the goodwill impairment test to be performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The ASU became effective for us on October 1, 2019 and did not have a material effect on our financial statements.

Note 4. Advances

As of March 31, 2020 and September 30, 2019, the Company had non-interest bearing advances payable to third parties of $59,650. These advances are payable on demand.

- 10 -

Table of Contents

Note 5. Convertible Notes Payable

Convertible notes payable consisted of the following at March 31, 2020 and September 30, 2019:


	March 31, 2020			September 30, 2019
Convertible note dated April 13, 2017 in the original principal amount of $20,000, no stated maturity date, bearing interest at 3% per year, convertible into common stock at a rate of $0.01 per share.	$	20,000		$	20,000

Convertible note dated April 1, 2019 in the original principal amount of $45,000, maturing February 15, 2019, bearing interest at 12% per year, convertible beginning September 28, 2019 into common stock at a rate of 65% of the average of the two lowest trading prices during the 15 trading days prior to conversion. In October 2019, principal of $45,000 and accrued interest of $2,700 were converted into 19,331,169 shares of common stock. There was no gain or loss recognized as the conversion occurred in accordance with the original terms of the agreement.		—			45,000

Convertible note dated May 21, 2019 in the original principal amount of $35,000, maturing March 15, 2019, bearing interest at 12% per year, convertible beginning November 17, 2019 into common stock at a rate of 65% of the average of the two lowest trading prices during the 15 trading days prior to conversion. In December 2019, principal of $35,000 and accrued interest of $2,100 were converted into 20,502,580 shares of common stock. There was no gain or loss recognized as the conversion occurred in accordance with the original terms of the agreement.		—			35,000

Convertible note dated August 2, 2019 in the original principal amount of $33,000, maturing May 15, 2020, bearing interest at 12% per year, convertible beginning January 29, 2020 into common stock at a rate of 65% of the average of the two lowest bid prices during the 15 trading days prior to conversion. In February 2020, principal of $33,000 and accrued interest of $1,980 were converted into 24,886,524 shares of common stock. There was no gain or loss recognized as the conversion occurred in accordance with the original terms of the agreement.		—			33,000

Convertible note dated August 13, 2019 in the original principal amount of $33,000, maturing May 30, 2020, bearing interest at 12% per year, convertible beginning February 9, 2020 into common stock at a rate of 65% of the average of the two lowest bid prices during the 15 trading days prior to conversion. In March 2020, principal of $33,000 and accrued interest of $1,980 were converted into 69,090,662 shares of common stock. There was no gain or loss recognized as the conversion occurred in accordance with the original terms of the agreement.		—			33,000

Convertible note dated October 28, 2019 in the original principal amount of $35,000, maturing September 15, 2020, bearing interest at 12% per year, convertible beginning April 5, 2020 into common stock at a rate of 65% of the average of the two lowest bid prices during the 15 trading days prior to conversion.		35,000			—

Convertible note dated January 14, 2020 in the original principal amount of $38,000, maturing November 1, 2020, bearing interest at 12% per year, convertible beginning July 12, 2020 into common stock at a rate of 65% of the average of the two lowest bid prices during the 15 trading days prior to conversion.		38,000			—

Total current convertible notes payable		93,000			166,000

Less: discount on convertible notes payable		(2,057	)		(52,205	)
Total convertible notes payable, net of discount	$	90,943		$	113,795

- 11 -

Table of Contents

All principal along with accrued interest is payable on the maturity date. The notes are convertible into common stock at the option of the holder. The holder of the notes cannot convert the notes into shares of common stock if that conversion would result in the holder owning more than 4.9% of the outstanding stock of the Company. During the six months ended March 31, 2020, the Company recorded discounts to notes payable in connection with beneficial conversion features in the aggregate amount of $92,000 and deferred finance costs of $6,000, and recorded amortization of discounts in the amount of $148,148.

As of March 31, 2020 and September 30, 2019, accrued interest on notes payable was $224,553 and $227,734, respectively.

During the three months ended March 31, 2020 and 2019, interest expense on the notes payable was $596 and $3,647, respectively; during the six months ended March 31, 2020 and 2019, interest expense on the notes payable was $5,579 and $10,630, respectively.

Note 6. Related Party Transactions

David Summers, a significant shareholder of the Company, formerly provided consulting services to the Company related to the development of our products. In addition, the Company had previously rented office space from Mr. Summers for $400 per month under a month to month lease. As part of the legal settlement discussed in Note 8, the Company was relived of these outstanding claims, and the unpaid liability balance of $112,804 was retired as contributed capital.

Alex Blankenship is paid $5,000 per month under her employment agreement as Chief Executive Officer of the Company. As of March 31, 2020, the Company owed Ms. Blankenship $135,438 for unpaid compensation.

As of March 31, 2020, the Company owed Sydney Jim, our former CEO, $38,130 for accrued but unpaid compensation.

Note 7. Stockholders’ Equity (Deficit)

Preferred Series A

During the three months ended December 31, 2019, the Company entered into a settlement agreement with David Summers, the Company’s former CEO and a common stockholder. As part of this settlement, David Summers returned 5,800,000 Series A preferred shares to the Company which were cancelled. See Note 8 for additional information regarding the settlement.

Common stock issued for conversion of convertible notes payable

During the three months ended December 31, 2019, the Company issued 39,833,749 shares of common stock upon the conversion of principal of $80,000 and accrued interest of $4,800. There was no gain or loss recognized as the conversion occurred in accordance with the original terms of the agreement.

During the three months ended March 31, 2020, the Company issued 93,977,186 shares of common stock upon the conversion of principal of $66,000 and accrued interest of $3,960. There was no gain or loss recognized as the conversion occurred in accordance with the original terms of the agreement.

Beneficial conversion feature

During the six months ended March 31, 2020, the Company charged to additional paid-in capital the aggregate amount of $92,000 on connection with the beneficial conversion feature of notes payable.

Note 8. Commitments and Contingent Liabilities

Litigation

The Company was involved in a legal dispute with Mr. David Summers, a significant shareholder, regarding the settlement of claims on certain patents and formulas. In October 2019, the Company entered into a settlement agreement with David Summers whereby all claims, disputes and litigation were dismissed. Mr. Summers returned 5,800,000 shares of Series A Preferred stock to the Company, which were cancelled. The Company was relieved of the previously recognized liability for compensation amounts due to Mr. Summers of $112,804. The Company assigned three patents that it previously held to David Summers, which had no book value as of the date of the settlement. The settlement was recorded as a capital transaction due to the related party nature and as such no gain or loss was recorded.

- 12 -

Table of Contents

Note 9. Subsequent Events

The Company entered into a convertible promissory note agreement dated March 30, 2020 in the original principal amount of $28,000, maturing January 15, 2021, bearing interest at 12% per year, convertible beginning September 26, 2020 into common stock at the greater of $0.00005 or a rate of 65% of the average of the two lowest trading prices during the 15 trading days prior to conversion. The proceeds of the note payable were received by the company on April 2, 2020, and therefore no accounting impact was recognized as of March 31, 2020.

On May 4, 2020, the holders of the convertible note payable dated October 28, 2019 elected to convert principal in the amount of $9,400 into 15,161,290 shares of the Company’s common stock at a price of $0.00062 per share. There was no gain or loss recognized as the conversion occurred in accordance with the original terms of the agreement.

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

Overview

AngioSoma is a wellness company dedicated to bringing innovative, effective and high-quality supplement products to the medical, wellness and adult-use markets through our marketing subsidiary, SomaCeuticalsTM. SomaCeuticals has acquired a diversified supply of supplements, strong clinical, scientific and operating capabilities and leading product research and development infrastructure in order to create trusted products and brands in an expanding global market.

We have abandoned our pursuit of FDA clearance and marketing of any drugs or products, including LiprostinTM, the patented pharmaceutical for a controlled drug delivery system. When rights to the drug were acquired it was represented that the initial clinical trials had been successfully completed and the single remaining trial was eligible to go forward. Research disclosed the representations are untrue. Therefore, further efforts to seek clearance and market the product ceased.

Critical Accounting Policies

We prepare our consolidated financial statements in conformity with GAAP, which requires management to make certain estimates and apply judgments. We base our estimates and judgments on historical experience, current trends, and other factors that management believes to be important at the time the condensed consolidated financial statements are prepared. We regularly review our accounting policies, and how they are applied and disclosed in our condensed consolidated financial statements.

While we believe that the historical experience, current trends and other factors considered support the preparation of our condensed consolidated financial statements in conformity with GAAP, actual results could differ from our estimates and such differences could be material.

Results of Operations

Three Months Ended March 31, 2020 Compared to the Three Months Ended March 31, 2019

Revenue. We had no revenue for the three months ended March 31, 2020 and 2019.

Cost of goods sold. We had no cost of goods sold for the three months ended March 31, 2020 and 2019.

General and administrative expense. We recognized general and administrative expense of $51,389 for the three months ended March 31, 2020 compared to $70,786 for the comparable period of 2019. The decrease in general and administrative expense was related primarily to decreases in accounting and legal fees.

Loss on conversion of debt. We recognized no loss on the conversion of debt during the six months ended March 31, 2020 compared to a loss on the conversion of debt in the amount of $16,236 during the three months ended March 31, 2019.

Interest expense. We recognized interest expense of $66,923 for the three months ended March 31, 2020 compared to $103,241 for the comparable period of 2019, including amortization of the discount on convertible notes payable of $66,237 and $99,594 during the three months ended March 31, 2020 and 2019, respectively.

- 13 -

Table of Contents

Net loss. For the reasons above, we recognized a net loss of $118,312 for the three months ended March 31, 2020 compared to $190,263 for the three months ended March 31, 2019.

Six Months Ended March 31, 2020 Compared to the Three Months Ended March 31, 2019

Revenue. We had revenue of $77 for the six months ended March 31, 2020 compared to $275 for the six months ended March 31, 2019.

Cost of goods sold. We had cost of goods sold of $14 for the six months ended March 31, 2020 compared to $47 for the six months ended March 31, 2019.

General and administrative expense. We recognized general and administrative expense of $125,685 for the six months ended March 31, 2020 compared to $200,409 for the comparable period of 2019. The decrease in general and administrative expense was related to a decrease in stock-based compensation and legal fees.

Loss on conversion of debt. We recognized no loss on the conversion of debt during the six months ended March 31, 2020 compared to $131,547 during the six months ended March 31, 2019.

Interest expense. We recognized interest expense of $153,727 for the six months ended March 31, 2020 compared to $186,778 for the comparable period of 2019. The decrease was due primarily to the amortization of the discount on convertible notes payable during the current period in the amount of $148,148 compared to $176,148 during the comparable period of the prior year.

Net loss. For the reasons above, we recognized a net loss of $279,349 for the six months ended March 31, 2020 compared to $518,506 for the six months ended March 31, 2019.

Liquidity and Capital Resources

At March 31, 2020, we had cash on hand of $33,231. The Company has negative working capital of $606,524. Net cash used in operating activities for the six months ended March 31, 2020 was $132,714. Cash on hand is adequate to fund our operations for less than twelve months. We do not expect to achieve positive cash flow from operating activities in the near future. We will require additional cash in order to implement our business plan. There is no guarantee that we will be able to attain fund when we need them or that funds will be available on terms that are acceptable to the Company. We have no material commitments for capital expenditures as of March 31, 2020.

During the six months ended March 31, 2020, the Company used cash in operating activities in the amount of $132,714. This consisted of the net loss of $279,349, partially offset by the following non-cash operating expenses: depreciation in the amount of $1,032; amortization of the discount on notes payable in the amount of $148,148, and changes in working capital of $2,545. The Company used $1,514 of cash for investing activities during the six months ended March 31, 2020 related to the purchase of fixed assets. The Company had cash flows from financing activities of $67,000 from the proceeds of convertible notes payable.

Additional Financing

Additional financing is required to continue operations. Although actively searching for available capital, the Company does not have any current arrangements for additional outside sources of financing and cannot provide any assurance that such financing will be available.

Off Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable to a smaller reporting company.

- 14 -

Table of Contents

ITEM 4. CONTROLS AND PROCEDURES

Management’s Report on Internal Control over Financial Reporting

We carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of March 31, 2020. Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of March 31, 2020, our disclosure controls and procedures were not effective to ensure that information required to be disclosed in reports filed by us under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

As of March 31, 2020, we did not maintain effective controls over the control environment. Specifically, we have not developed and effectively communicated to our employees our accounting policies and procedures. This has resulted in inconsistent practices. Since these entity level programs have a pervasive effect across the organization, management has determined that these circumstances constitute a material weakness.


2.	As of March 31, 2020, we did not maintain effective controls over financial statement disclosure. Specifically, controls were not designed and in place to ensure that all disclosures required were originally addressed in our financial statements. Accordingly, management has determined that this control deficiency constitutes a material weakness.

Our management, including our principal executive officer and principal financial officer, who is the same person, does not expect that our disclosure controls and procedures or our internal controls will prevent all error or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected.

Change in Internal Controls Over Financial Reporting

There was no change in our internal controls over financial reporting that occurred during the period covered by this report, which has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

As of September 30, 2019, the Company was involved in litigation: Cause No. 2018-48120; Somaceuticals, Inc. and AngioSoma, Inc. v. David Summers in the 151^st District Court of Harris County, Texas. Dr. Summers provided scientific expertise to AngioSoma for several years, and there was a dispute regarding the ownership of several patents and other intellectual property. AngioSoma obtained a favorable settlement of the lawsuit on October 16, 2019, which resulted in the settlement of all claims of both parties along with (i) the assignment by the Company of certain technology and intellectual property to Dr. Summers, (ii) the assignment by Dr. Summers of any interest he owns in certain technology and intellectual property to the Company; and (iii) the assignment by Summers of 5,800,000 shares of Series A preferred stock of the Company to the Company.

We know of no other material, active or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceedings or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered beneficial shareholder are an adverse party or has a material interest adverse to us.

ITEM 1A. RISK FACTORS

Not applicable to a smaller reporting company.

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

Set forth below is information regarding the securities sold during the quarter ended March 31, 2020 that were not registered under the Securities Act:

- 15 -

Table of Contents


Date of Sale	Title of Security	Number Sold		Consideration Received and Description of Underwriting or Other Discounts to Market Price or Convertible Security, Afforded to Purchasers	Exemption from Registration Claimed	If Option, Warrant or Convertible Security, terms of exercise or conversion

February 10, 2020	Common Stock		6,000,000	Conversion of Note Payable	Section 3(a)(9) of the Securities Act	Convertible at $.002 per share
February 14, 2020	Common Stock		9,333,333	Conversion of Note Payable	Section 3(a)(9) of the Securities Act	Convertible at $.0015 per share
February 26, 2020	Common Stock		9,553,191	Conversion of Note Payable	Section 3(a)(9) of the Securities Act	Convertible at $.00094 per share
March 2, 2020	Common Stock		11,230,769	Conversion of Note Payable	Section 3(a)(9) of the Securities Act	Convertible at $.00065 per share
March 9, 2020	Common Stock		12,181,818	Conversion of Note Payable	Section 3(a)(9) of the Securities Act	Convertible at $.00055 per share
March 10, 2020	Common Stock		12,181,818	Conversion of Note Payable	Section 3(a)(9) of the Securities Act	Convertible at $.00055 per share
March 16, 2020	Common Stock		12,173,913	Conversion of Note Payable	Section 3(a)(9) of the Securities Act	Convertible at $.00046 per share
March 18, 2020	Common Stock		12,142,857	Conversion of Note Payable	Section 3(a)(9) of the Securities Act	Convertible at $.00042 per share
March 23, 2020	Common Stock		9,179,487	Conversion of Note Payable	Section 3(a)(9) of the Securities Act	Convertible at $.00039 per share

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

The Company has not defaulted upon senior securities.

ITEM 4. MINE SAFETY DISCLOSURES

This item is not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS


3.1	Articles of Incorporation (1)
3.2	Bylaws (2)
14.1	Code of Ethics (3)
31.1	Rule 13(a)-14(a)/15(d)-14(a) Certification of principal executive officer and principal financial and account officer (4)
32.1	Section 1350 Certification of principal executive officer and principal financial accounting officer (4)
101	XBRL data files of Financial Statement and Notes contained in this Quarterly Report on Form 10-Q (4)(5)

__________


(1)	Incorporated by reference to our Definitive Proxy Statement on Schedule 14A filed on April 8, 2015.
(2)	Incorporated by reference to our Form 10-K/A Amendment No. 1 for the year ended September 30, 2015 filed on January 22, 2016.
(3)	Incorporated by reference to our Form S-1 filed with the Securities and Exchange Commission on November 3, 2010.
(4)	Filed or furnished herewith.
(5)	In accordance with Regulation S-T, the Interactive Data Files in Exhibit 101 to the Quarterly Report on Form 10-Q shall be deemed “furnished” and not “filed.”

- 16 -

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	AngioSoma Inc.

Date: May 5, 2020	By: /s/ Alex Blankenship
	Alex Blankenship
	Chief Executive Officer, President, Secretary, Treasurer, Principal Executive Officer, Principal Finance and Accounting Officer and Sole Director

- 17 -