GlobeStar Therapeutics Corp - Quarter Report: 2021 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, 2021

☐ 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 20, 2021, 475,638,775 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, 2021 (Unaudited) and September 30, 2020	4

Consolidated Statements of Operations for the Three and Six Months Ended March 31, 2021 and 2020 (Unaudited)	5

Consolidated Statements of Changes in Stockholders' Deficit for the Three and Six Months Ended March 31, 2021 and 2020 (Unaudited)	6

Consolidated Statements of Cash Flows for the Three and Six Months Ended March 31, 2021 and 2020 (Unaudited)	7

Notes to the Unaudited Consolidated Financial Statements	8-12

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	16

Item 3. Defaults upon Senior Securities	16

Item 4. Mine Safety Disclosures	16

Item 5. Other Information	16

Item 6. Exhibits	16

SIGNATURES	17

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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, 2020. 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 Nevada corporation and its subsidiaries unless the context specifically indicates otherwise.

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PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ANGIOSOMA INC.

CONSOLIDATED BALANCE SHEETS


	March 31,			September 30,
	2021			2020
	(Unaudited)
CURRENT ASSETS
Cash and cash equivalents	$	158,888		$	81,442
Prepaid expenses		—			4,783
Inventory		—			2,412
Total current assets		158,888			88,637

Fixed assets, net		—			1,275

TOTAL ASSETS	$	158,888		$	89,912

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities
Accounts payable and accrued liabilities	$	138,697		$	133,467
Accounts payable to related party		—			173,568
Advances payable		59,650			59,650
Current portion of convertible notes payable, net of discount of $6,011 and $34,923 respectively		118,989			155,077
Current portion of accrued interest payable		225,968			227,372

Total current liabilities		543,304			749,134

TOTAL LIABILITIES		543,304			749,134

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS’ DEFICIT
Common stock, $0.001 par value, unlimited shares authorized; 475,638,775 and 436,218,342 shares issued and outstanding at March 31, 2021 September 30, 2020, respectively		475,638			436,217
Preferred stock; 20,000,000 shares authorized:
Series A Preferred Stock, $0.001 par value, 6,000,000 shares authorized, 0 and 0 shares issued and outstanding at March 31, 2021 and September 30, 2020, respectively		—			—
Series D Preferred Stock, $0.001 par value, 509,988 shares authorized; 509,988 shares issued and outstanding at March 31, 2021 and September 30, 2020, respectively		510			510
Series E Preferred Stock, $0.001 par value, 1,000,000 shares authorized; 1,000,000 shares issued and outstanding at March 31, 2021 and September 30, 2020, respectively		1,000			1,000
Series F Preferred Stock; $0.001 par value 386,975 shares authorized; 386,975 shares issued and outstanding at March 31, 2021 and September 30, 2020, respectively		387			387
Additional paid-in capital		6,562,113			6,118,002
Stock payable, consisting of 25,980,000 and 0 shares to be issued at March 31, 2021 and December 31, 2020, respectively		811,500			—
Accumulated deficit		(8,235,564	)		(7,215,338	)

TOTAL STOCKHOLDERS’ DEFICIT		(384,416	)		(659,222	)

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	158,888		$	89,912

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

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ANGIOSOMA INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)


	Three Months Ended						Six Months Ended
	March 31,						March 31,
	2021			2020			2021			2020

REVENUE	$	—		$	—		$	—		$	77
Cost of goods sold		2,412			—			2,412			14

Gross margin		(2,412	)		—			(2,412	)		63

OPERATING EXPENSES
General and administrative expenses		467,991			51,389			528,344			125,685
Total operating expenses		467,991			51,389			528,344			125,685

LOSS FROM OPERATIONS		(470,403	)		(51,389	)		(530,756	)		(125,622	)

OTHER INCOME (EXPENSE)
Loss on settlement of liabilities		(311,762	)		—			(311,762	)		—
Interest expense		(113,666	)		(66,923	)		(177,708	)		(153,727	)
Total other income (expense)		(425,428	)		(66,923	)		(489,470	)		(153,727	)

Net loss	$	(895,831	)	$	(118,312	)	$	(1,020,226	)	$	(279,349	)

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

Weighted average shares outstanding - basic and diluted		469,027,749			235,768,659			457,766,883			212,861,298

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

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ANGIOSOMA INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

(UNAUDITED)


				Series A					Series D			Series E					Series F			Additional								Total
	Common stock			Preferred Stock					Preferred Stock			Preferred Stock					Preferred Stock			paid-in			Stock		Accumulated			Equity
	Shares	Par		Shares		Amount			Shares	Amount		Shares		Amount			Shares	Amount		capital			Payable		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	)


Balance, September 30, 2020	436,218,342	$	436,217	—		$	—		509,988	$	510	1,000,000		$	1,000		386,975	$	387	$	6,118,002		$	—	$	(7,215,338	)	$	(659,222	)

Common stock issued for conversion of convertible note payable and accrued interest	19,269,286		19,269	—			—		—		—	—			—		—		—		45,391			—		—			64,660
Beneficial conversion discount on convertible notes payable	—		—	—			—		—		—	—			—		—		—		30,000			—		—			30,000
Net loss for the three months ended December 31, 2020	—		—	—			—		—		—	—			—		—		—		—			—		(124,395	)		(124,395	)
Balance, December 31, 2020	455,487,628	$	455,486	—		$	—		509,988	$	510	1,000,000		$	1,000		386,975	$	387	$	6,193,393		$	—	$	(7,339,733	)	$	(688,957	)

Issuance of common stock and retirement of accrued compensation with former officer	2,600,000		2,600	—			—		—		—	—			—		—		—		132,600			312,000		—			447,200
Common stock issued for conversion of convertible note payable and accrued interest	17,551,147		17,552	—			—		—		—	—			—		—		—		97,990			—		—			115,542
Sale of common stock units for cash proceeds	—		—	—			—		—		—	—			—		—		—		—			499,500		—			499,500
Repurchase of preferred stock from former officer	—		—	—			—		—		—	(1,000,000	)		(1,000	)	—		—		(324,000	)		—		—			(325,000	)
Issuance of preferred stock to officer	—		—	—			—		—		—	1,000,000			1,000		—		—		324,000			—		—			325,000
Settlement of accounts payable with related party	—		—	—			—		—		—	—			—		—		—		38,130			—		—			38,130
Beneficial conversion discount on convertible notes payable	—		—	—			—		—		—	—			—		—		—		100,000			—		—			100,000
Net loss for the three months ended March 31, 2021	—		—	—			—		—		—	—			—		—		—		—			—		(895,831	)		(895,831	)
Balance, March 31, 2021	475,638,775	$	475,638	—		$	—		509,988	$	510	1,000,000		$	1,000		386,975	$	387	$	6,562,113		$	811,500	$	(8,235,564	)	$	(384,416	)

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

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ANGIOSOMA, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)


	Six Months Ended
	March 31,
	2021			2020
CASH FLOW FROM OPERATING ACTIVITIES:
Net loss	$	(1,020,226	)	$	(279,349	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock compensation		325,000			—
Depreciation		1,275			1,032
Amortization of discount on convertible note payable		168,912			148,148
Loss on settlement of liabilities		311,762			—
Changes in operating assets and liabilities
Inventory		2,412			34
Prepaid expenses		4,783			(1,561	)
Accounts payable and accrued liabilities		5,232			(1,597	)
Accounts payable and accrued liabilities to related party		—			(5,000	)
Accrued interest payable		8,796			5,579
NET CASH (USED IN) OPERATING ACTIVITIES		(192,054	)		(132,714	)

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 sale of common stock units		499,500			—
Repurchase of preferred stock from former officer		(325,000	)		—
Proceeds from convertible notes payable, net		95,000			67,000
NET CASH PROVIDED BY FINANCING ACTIVITIES		269,500			67,000

NET CHANGE IN CASH AND CASH EQUIVALENTS		77,446			(67,228	)

Cash and cash equivalents at beginning of period		81,442			100,459

Cash and cash equivalents at end of period	$	158,888		$	33,231

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

Noncash investing and financing transactions:
Conversion of convertible notes payable and accrued interest into common stock	$	180,202		$	154,760
Beneficial conversion discount on convertible notes payable	$	130,000		$	92,000
Common shares issued to settle liabilities with former officer	$	135,438		$	—
Settlement of liabilities with related party	$	38,130		$	—
Return of Series A preferred shares and settlement of related party compensation	$	—		$	4,703,339

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

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ANGIOSOMA INC.

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

(Unaudited)

Note 1. General Organization and Business

Angiosoma Inc. (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. As part of these Articles of Continuance, the Company effective October 4, 2019, the Company has no limit on the authorized shares of common stock that can be issued. 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 is a clinical stage pharmaceutical Company introducing a patented formulation of previously approved drugs for the treatment of multiple sclerosis. Prior to the Company’s current business plan, the Company was 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.

Note 2. Going Concern and Summary of Significant Accounting Policies

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. For the six months ended March 31, 2021, the Company had a net loss of $1,020,226 and cash flow used in operating activities of $192,054. As of March 31, 2021, the Company had negative working capital of $384,416. Management does not anticipate having positive cash flow from operations in the near future. The Company has minimal revenue. Without additional capital, the Company will not be able to remain in business.

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.

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, 2020 which are included on our Form 10-K filed on December 3, 2020. 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, 2021 are not necessarily indicative of the results to be expected for the full fiscal year ending September 30, 2021.

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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.

Note 3. Convertible Notes Payable

Convertible notes payable consisted of the following at March 31, 2021 and September 30, 2020:


	March 31, 2021		September 30, 2020
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 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 a rate of 65% of the average of the two lowest bid prices during the 15 trading days prior to conversion. In October 2020, principal of $28,000 and accrued interest of $1,680 were converted into 9,275,000 shares of common stock. There was no gain or loss recognized as the conversion occurred in accordance with the original terms of the agreement.		—		28,000

Convertible note dated June 10, 2020 in the original principal amount of $33,000, maturing April 15, 2021, bearing interest at 12% per year, convertible beginning December 8, 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 December 2020, principal of $33,000 and accrued interest of $1,980 were converted into 9,994,286 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 July 7, 2020 in the original principal amount of $38,000, maturing May 15, 2021, bearing interest at 12% per year, convertible beginning January 3, 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 January 2021, principal of $38,000 and accrued interest of $2,280 was converted into 10,886,486 shares of common stock. There was no gain or loss recognized as the conversion occurred in accordance with the original terms of the agreement.		—		38,000

Convertible note dated July 30, 2020 in the original principal amount of $33,000, maturing June 15 2021, bearing interest at 12% per year, convertible beginning February 20, 2021 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 2021, principal of $33,000 and accrued interest of $1,980 was converted into 4,115,294 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

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Convertible note dated August 24, 2020 in the original principal amount of $38,000, maturing June 30, 2021, bearing interest at 12% per year, convertible beginning January 26, 2021 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 2021, principal of $38,000 and accrued interest of $2,280 was converted into 2,549,367 shares of common stock. There was no gain or loss recognized as the conversion occurred in accordance with the original terms of the agreement.		—			38,000

Convertible note dated October 6, 2020 in the original principal amount of $33,000, maturing July 30 2021, bearing interest at 12% per year, convertible beginning April 4, 2021 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.		33,000			—

Convertible note dated January 5, 2021 in the original principal amount of $38,500, maturing January 5, 2022, bearing interest at 12% per year, convertible beginning July 4, 2021 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.		38,500			—

Convertible note dated February 4, 2021 in the original principal amount of $33,500, maturing February 4, 2022, bearing interest at 12% per year, convertible beginning August 3, 2021 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.		33,500			—

Total current convertible notes payable		125,000			190,000

Less: discount on convertible notes payable		(6,011	)		(34,923	)
Total convertible notes payable, net of discount	$	118,989		$	155,077

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 4.99% of the outstanding stock of the Company.

During the three months ended December 31, 2020, the Company recognized $3,000 of deferred finance costs from its new convertible note payable and $30,000 of new discount related to the beneficial conversion features of convertible notes payable. During the three months ended March 31, 2021, the Company recognized $7,000 of deferred finance costs from its new convertible note payable and $100,000 of new discount related to the beneficial conversion features of convertible notes payable.

During the three and six months ended March 31, 2021, the Company recognized interest expense on convertible notes of $5,942 and $8,796 and amortization of discount on convertible notes payable of $61,188 and $168,912, respectively. During the three and six months ended March 31, 2020, the Company recognized interest expense on convertible notes of $596 and $5,579 and amortization of discount on convertible notes payable of $66,327 and $148,148, respectively

As of March 31, 2021 and September 30, 2020, accrued interest was $225,968 and $227,372, respectively.

Advances

As of March 31, 2021 and September 30, 2020, the Company had non-interest bearing advances payable to third parties of $59,650. These advances are payable on demand.

Note 4. Related Party Transactions

In January 2021, the Company’s former Chief Executive Officer Sydney Jim agreed to forgive all accrued but unpaid compensation of $38,130, resulting in a gain on settlement of liabilities to the Company that was recorded to additional paid in capital.

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In March 2021, the Company entered into severance agreement with its former CEO Alex Blankenship. The Company owed Ms. Blankenship unpaid compensation of $135,438 and agreed to issue 8,600,000 shares of common stock in full settlement of this amount and release from the employment agreement with her. The shares had a fair value of $447,200 based on the stock price at the date of the agreement. The Company recognized a loss on settlement of $311,762 in connection with this agreement. As of March 31, 2021, 2,600,000 of the shares were issued to Ms. Blankenship. Concurrently with the severance agreement, the Company agreed to purchase the 1,000,000 shares Series E Preferred Stock held by Ms. Blankenship for $325,000 in cash. The Company reissued those Series E preferred Shares to the Company’s new CEO James Katzaroff. The Company recognized stock-based compensation of $325,000 related to this reissuance.

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 6 in October 2019, the Company was relieved of these outstanding claims, and the unpaid liability balance of $112,804 was retired as contributed capital, and Mr. Summers returned 5,800,000 shares of Series A Preferred stock with a book value of $4,590,535, which were cancelled.

Note 5. 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 6 for additional information regarding the settlement.

Preferred Series E

On March 31, 2021, The Company agreed to repurchase 1,000,000 shares of Series E Preferred Stock from Alex Blankenship, the Company’s former CEO, for $325,000. The Company then reissued those shares to James Katzaroff, the Company’s new CEO, and recognized stock-based compensation expense of $325,000. The Series E Preferred stock has voting rights on the basis of two votes for every outstanding share of common stock meaning that the holders of the Series E Preferred Stock have 2/3 of the voting rights in the Company.

Common Stock Units

During the three months ended March 31, 2021, the Company sold common stock units to investors. Each unit consist of 400,000 shares of common stock and 600,000 warrants to purchase common stock for three years at an exercise price of $0.03 per share. The Company received cash proceeds of $499,500 related to the issuance of 19,980,000 shares of common stock and 29,970,000 warrants. No shares of common stock were issued as of March 31, 2021. The warrants has a relative fair value of $350,462 based on a Black-Scholes pricing model with estimated volatility ranging from 261.3% to 261.8%, dividend yield of 0%, expected term of three years and a risk free rate ranging from 0.19% to 0.24%.

Common stock issued for conversion of convertible notes payable

During the three months ended December 31, 2020, the Company issued 19,269,286 shares of common stock upon the conversion of principal of $61,000 and accrued interest of $3,660. 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, 2021, the Company issued 17,551,147 shares of common stock upon the conversion of principal of $109,000 and accrued interest of $6,540. The Company recognized a loss of $13,994 on these conversions.

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.

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Beneficial conversion feature

During the six months ended March 31, 2021, the Company charged to additional paid-in capital the aggregate amount of $130,000 on connection with the beneficial conversion feature of notes payable.

Note 6. 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.

Note 7. License Agreement

Effective August 23, 2020 the Company’s wholly-owned subsidiary, SomaCeuticals, Inc. entered into an exclusive global license agreement with 7 to Stand, Inc. for the rights to U.S. patent 10,610,592 issued to Fabrizio de Silvestri, Terni, Italy, as inventor, April 7, 2020 for treatment of Multiple Sclerosis. In consideration for the license agreement, SomaCeuticals agreed to pay 7 to Stand a royalty of 7.1% of the net sales of any product developed under the patent on a worldwide basis. Additionally, the Company will issue a total of 116,520,667 shares of common stock to 7 to Stand upon completion of the following milestones:


•	Common shares representing 5% of total number of outstanding common shares of the Company immediately following any change of control of the Company; the Company will issue 29,130,167 shares of common stock as a result of the change of control discussed in Note 5. These shares have not yet been issued.

•	29,130,167 Common shares immediately following the first round of funding under a private offer of equity or debt securities;

•	29,130,167 Common shares immediately following the commencement of clinical trials for Federal Drug Administration clearance of the product; and

•	Common shares representing an adjustment to increase 7 to Stand’s total ownership to 19.99% of total number of outstanding common shares of the Company immediately following FDA clearance of the product for sale. The Company expects to issue 29,130,166 shares of common stock related to this provision if met.

•	No royalties have been earned or paid to 7 to Stand. The license agreement may be terminated by 7 to Stand if 1) SomaCeuticals does not begin clinical trials within one year of the agreement; 2) if SomaCeuticals terminates the continuation of the clinical trials; or 3) shall not commence marketing the product within reasonable time after obtaining FDA approval.

Note 8. Subsequent Events

On April 27, 2021, the Board of Directors of the Company elected Brooke Greenwald as Chief Marketing Officer of the corporation.

On April 27, 2021, the Board of Directors of the Company elected Steven F. Penderghast as Director of the corporation. On April 28, 2021, the Company awarded Mr Penderghast stock options to purchase 5,000,000 shares of common stock at an exercise price of $0.003 per share. The stock option is exercisable through the latter of two years from the effective date or two years after certain liquidity events.

On May 6, 2021, the Board of Directors of the Company elected David Croom as Executive Vice President of the corporation. and elected Dr. Leonard Wisneski, MD, FACP as the Medical Advisory Board Chairman.

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

Overview

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, 2021 Compared to the Three Months Ended March 31, 2020

Revenue. We had no revenue for the three months ended March 31, 2021 and 2020.

Cost of goods sold. We had $2,412 and $0 cost of goods sold for the three months ended March 31, 2021 and 2020, respectively related to the write down of inventory kept by the Company’s former CEO as part of the severance agreement.

General and administrative expense. We recognized general and administrative expense of $467,991 for the three months ended March 31, 2021 compared to $51,389 for the comparable period of 2020. The increase in general and administrative expense was related primarily to stock-based compensation of $325,000 related to the Series E Preferred stock issued to the new CEO, and increased officer compensation of $45,438 primarily due to a bonus and increased legal fees of $38,100.

Loss on settlement of liabilities. We recognized $311,762 and $0 loss on the settlement of liabilities during the three months ended March 31, 2021 and 2020. The loss was related to the severance agreement with Alex Blankenship, our former CEO, resulting in a $311,762 loss.

Interest expense. We recognized interest expense of $113,666 for the three months ended March 31, 2021 compared to $66,923 for the comparable period of 2020, including amortization of the discount on convertible notes payable of $107,726 and $66,237 during the three months ended March 31, 2021 and 2020, respectively.

Net loss. For the reasons above, we recognized a net loss of $895,831 for the three months ended March 31, 2021 compared to $118,312 for the three months ended March 31, 2020.

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Six Months Ended March 31, 2021 Compared to the Six Months Ended March 31, 2020

Revenue. We had revenue of $0 for the six months ended March 31, 2021 compared to $77 for the six months ended March 31, 2020.

Cost of goods sold. We had cost of goods sold of $2,412 for the six months ended March 31, 2021 compared to $14 for the six months ended March 31, 2020 related to the write down of inventory kept by the Company’s former CEO as part of the severance agreement.

General and administrative expense. We recognized general and administrative expense of $528,344 for the six months ended March 31, 2021 compared to $125,685 for the comparable period of 2020. The increase in general and administrative expense was related primarily to stock-based compensation of $325,000 related to the Series E Preferred stock issued to the new CEO, and increased officer compensation of $45,438 primarily due to a bonus and increased legal fees of $38,100.

Loss on settlement of liabilities. We recognized $311,762 and $0 loss on the settlement of liabilities during the six months ended March 31, 2021 and 2020. The loss was related to the severance agreement with Alex Blankenship, our former CEO, resulting in a $311,762 loss.

Interest expense. We recognized interest expense of $177,708 for the six months ended March 31, 2021 compared to $153,727 for the comparable period of 2020. The increase was due primarily to the amortization of the discount on convertible notes payable during the current period in the amount of $168,912 compared to $148,148 during the comparable period of the prior year.

Net loss. For the reasons above, we recognized a net loss of $1,020,226 for the six months ended March 31, 2021 compared to $279,349 for the six months ended March 31, 2020.

Liquidity and Capital Resources

At March 31, 2021, we had cash on hand of $158,888. The Company has negative working capital of $384,416. Net cash used in operating activities for the six months ended March 31, 2021 was $192,054. 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, 2021.

During the six months ended March 31, 2021, the Company used cash in operating activities in the amount of $192,054. This consisted of the net loss of $1,020,226, partially offset by the following non-cash operating expenses: stock-based compensation of $325,000, amortization of discount of $168,912, and the loss on settlement of liabilities of 311,762. The Company had cash flows from financing activities of $269,500 from the proceeds of sale of common stock units resulting in cash proceeds of $499,500, the repurchase of Series E preferred stock for $325,000, and proceeds from convertible notes payable of $95,000.

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.

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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, 2021. Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of March 31, 2021, 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.


1.	As of March 31, 2021, 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, 2021, 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.

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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, 2021that were not registered under the Securities Act:


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

January 11, 2021	Common Stock		10,886,486	Conversion of Note Payable	Section 3(a)(9) of the Securities Act	Convertible at $0.0037 per share
February 10, 2021	Common Stock		4,115,294	Conversion of Note Payable	Section 3(a)(9) of the Securities Act	Convertible at $0.0084 per share
February 26, 2021	Common Stock		2,549,367	Conversion of Note Payable	Section 3(a)(9) of the Securities Act	Convertible at $0.0154 per share
March 5, 2020	Common Stock		2,600,000	Settlement of liabilities	Section 3(a)(9) of the Securities Act	N/A

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.”

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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 21, 2021	By: /s/ James C. Katzaroff
	James C. Katzaroff
	Chief Executive Officer, President, Secretary, Treasurer, Principal Executive Officer, Principal Finance and Accounting Officer and Sole Director

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