|
||||||||||||||||||||||||||
| SEC Info℠ | | | Home | | | Search | | | My Interests | | | Help | | | Sign In | | | Please Sign In | |||||||
|
||||||||||||||||||||||||||
As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 9/27/23 Soul Biotechnology Corp. 10-Q 6/30/23 41:2.4M Empire Filings/FA |
Document/Exhibit Description Pages Size
1: 10-Q Quarterly Report HTML 484K
2: EX-31.1 Certification -- §302 - SOA'02 HTML 17K
3: EX-32.1 Certification -- §906 - SOA'02 HTML 15K
9: R1 Cover HTML 60K
10: R2 Balance Sheets (Unaudited) HTML 95K
11: R3 Balance Sheets (Unaudited) (Parenthetical) HTML 23K
12: R4 Statements of Operations (Unaudited) HTML 122K
13: R5 Statements of Changes in Shareholders' Deficit HTML 71K
(Unaudited)
14: R6 Statements of Cash Flows (Unaudited) HTML 79K
15: R7 Organization and Description of the Business HTML 33K
16: R8 Summary of Significant Accounting Assumptions and HTML 51K
Policies
17: R9 Going Concern HTML 19K
18: R10 Discontinued Operations HTML 24K
19: R11 Business Acquisition HTML 33K
20: R12 Intangible Assets HTML 17K
21: R13 Related Party Transactions HTML 22K
22: R14 Common Stock and Common Stock Payable HTML 25K
23: R15 Subsequent Events HTML 16K
24: R16 Summary of Significant Accounting Assumptions and HTML 90K
Policies (Policies)
25: R17 Discontinued Operations (Tables) HTML 26K
26: R18 Business Acquisition (Tables) HTML 28K
27: R19 Organization and Description of the Business HTML 32K
(Details Narrative)
28: R20 Summary of Significant Accounting Assumptions and HTML 19K
Policies (Details Narrative)
29: R21 Going Concern (Details Narrative) HTML 19K
30: R22 Discontinued Operations (Details) HTML 22K
31: R23 Business Acquisition (Details) HTML 20K
32: R24 Business Acquisition (Details 1) HTML 35K
33: R25 Business Acquisition (Details Narrative) HTML 30K
34: R26 Intangible Assets (Details Narrative) HTML 25K
35: R27 Related Party Transactions (Details Narrative) HTML 18K
36: R28 Common Stock and Common Stock Payable (Details HTML 49K
Narrative)
39: XML IDEA XML File -- Filing Summary XML 67K
37: XML XBRL Instance -- soulbiotech_10q_htm XML 417K
38: EXCEL IDEA Workbook of Financial Report Info XLSX 65K
5: EX-101.CAL XBRL Calculations -- adob-20230630_cal XML 95K
6: EX-101.DEF XBRL Definitions -- adob-20230630_def XML 164K
7: EX-101.LAB XBRL Labels -- adob-20230630_lab XML 468K
8: EX-101.PRE XBRL Presentations -- adob-20230630_pre XML 365K
4: EX-101.SCH XBRL Schema -- adob-20230630 XSD 68K
40: JSON XBRL Instance as JSON Data -- MetaLinks 220± 312K
41: ZIP XBRL Zipped Folder -- 0001829126-23-006294-xbrl Zip 114K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
i ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended i June 30, 2023
or
i ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission file number i 333-222631
| i SOUL BIOTECHNOLOGY CORP |
| (Exact name of registrant as specified in its charter) |
| i Nevada | i 82-3155323 | |
| (State
or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
| 8742 |
| (Primary Standard Industrial Classification Code Number) |
| i 36 Fourth Ave. N, i Yorkton Saskatchewan, i Canada | i S3N 2V7 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code i (306) i 563-4123
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of exchange on which registered | ||
| N/A | N/A | N/A |
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 ☒ i 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 during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☐ Yes ☒ i No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or 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 | ☐ |
| i Non-accelerated Filer | ☒ | Smaller reporting company | i ☒ |
| Emerging growth company | i ☐ |
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 Act.) ☐ Yes ☒ i No
The number of shares outstanding of the registrant’s common stock as of September 27, 2023 was shares.
DOCUMENTS INCORPORATED BY REFERENCE — NONE
SOUL BIOTECHNOLOGY CORPORATION
QUARTERLY REPORT ON FORM 10-Q
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2023 (UNAUDITED)
i
Item 1. Consolidated financial statements.
Index to Consolidated financial statements
1
Balance Sheets
| June 30, | December 31, | |||||||
| 2023 | 2022 | |||||||
| (Unaudited) | ||||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | i 10,773 | $ | i 41,808 | ||||
| Accounts receivable | i 580 | i 1,344 | ||||||
| Inventory | i 38,138 | i 35,281 | ||||||
| Prepaid and other assets | i 1,206 | i 1,179 | ||||||
| Total current assets | i 50,697 | i 79,612 | ||||||
| Goodwill | - | i 512,196 | ||||||
| Intangible assets | i 1,272,303 | i 88,923 | ||||||
| Total assets | $ | i 1,323,000 | $ | i 680,731 | ||||
| Liabilities and Stockholders’ Deficit | ||||||||
| Current Liabilities | ||||||||
| Accrued payable and accrued liabilities | $ | i 49,873 | $ | i 42,953 | ||||
| Common stock payable | - | i 843,878 | ||||||
| Due to related parties | i 230,264 | i 227,704 | ||||||
| Total current liabilities | i 280,137 | i 1,114,535 | ||||||
| Government loans | i 30,212 | i 29,532 | ||||||
| Total liabilities | i 310,349 | i 1,144,067 | ||||||
| Stockholders’ Equity (Deficit) | ||||||||
| Common stock, Par Value $, shares authorized, and shares issued and outstanding of shares as of June 30, 2023 and December 31, 2022, respectively | i 598,546 | i 75,000 | ||||||
| Additional paid in capital | i 2,080,075 | i 25,740 | ||||||
| Accumulated deficit | ( i 1,620,526 | ) | ( i 525,881 | ) | ||||
| Accumulated other comprehensive loss | ( i 45,444 | ) | ( i 38,195 | ) | ||||
| Total stockholders’ equity (deficit) | i 1,012,651 | ( i 463,336 | ) | |||||
| Total liabilities and stockholders’ equity (deficit) | $ | i 1,323,000 | $ | i 680,731 | ||||
The accompanying notes are an integral part of these unaudited financial statements
2
Statements of Operations
(Unaudited)
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Revenue, net | ||||||||||||||||
| Revenue, net | $ | i 23,515 | $ | i 35,293 | $ | i 60,611 | $ | i 80,773 | ||||||||
| Cost of sales | i 4,854 | i 23,831 | i 20,239 | i 39,137 | ||||||||||||
| Gross margin | i 18,660 | i 11,462 | i 40,372 | i 41,635 | ||||||||||||
| Operating expenses | ||||||||||||||||
| General and administrative expenses | i 15,637 | i 12,339 | i 55,770 | i 32,174 | ||||||||||||
| Professional fees | i 23,701 | i 140,865 | i 50,258 | i 168,892 | ||||||||||||
| Amortization of intangible assets | i 416,689 | i 11,338 | i 427,369 | i 18,948 | ||||||||||||
| Impairment of goodwill and intangible | i 590,512 | - | i 590,512 | - | ||||||||||||
| Total operating expenses | i 1,046,539 | i 164,542 | i 1,123,908 | i 220,014 | ||||||||||||
| Loss from operations | ( i 1,027,879 | ) | ( i 153,080 | ) | ( i 1,083,536 | ) | ( i 178,378 | ) | ||||||||
| Other income (expense) | ||||||||||||||||
| Interest income (expense) | ( i 236 | ) | ( i 843 | ) | ( i 677 | ) | ( i 843 | ) | ||||||||
| Total other income (expense) | ( i 236 | ) | ( i 843 | ) | ( i 677 | ) | ( i 843 | ) | ||||||||
| Loss from continuing operations before income taxes | ( i 1,028,115 | ) | ( i 153,923 | ) | ( i 1,084,213 | ) | ( i 179,222 | ) | ||||||||
| Provision (benefit) for income taxes | - | - | - | - | ||||||||||||
| Loss from continuing operations | ( i 1,028,115 | ) | ( i 153,923 | ) | ( i 1,084,213 | ) | ( i 179,222 | ) | ||||||||
| Loss from discontinued operations | ( i 6,224 | ) | ( i 6,482 | ) | ( i 10,432 | ) | ( i 15,303 | ) | ||||||||
| Net loss | $ | ( i 1,034,339 | ) | $ | ( i 160,404 | ) | $ | ( i 1,094,645 | ) | $ | ( i 194,524 | ) | ||||
| Basic and diluted loss per share: | ||||||||||||||||
| Loss from continuing operations | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| Loss from discontinued operations | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| Weighted average number of shares outstanding | ||||||||||||||||
| Comprehensive loss: | ||||||||||||||||
| Net loss | $ | ( i 1,034,339 | ) | $ | ( i 160,404 | ) | $ | ( i 1,094,645 | ) | $ | ( i 194,524 | ) | ||||
| Foreign currency translation adjustment | ( i 7,539 | ) | ( i 16,671 | ) | ( i 7,249 | ) | ( i 16,671 | ) | ||||||||
| Comprehensive loss | $ | ( i 1,041,878 | ) | $ | ( i 177,076 | ) | $ | ( i 1,101,894 | ) | $ | ( i 211,196 | ) | ||||
The accompanying notes are an integral part of these unaudited financial statements
3
Statements of Changes in Shareholders’ Deficit
(Unaudited)
| Accumulated | ||||||||||||||||||||||||
| Additional | Other | Total | ||||||||||||||||||||||
| Common Stock | Paid-in | Comprehensive | Accumulated | Stockholders’ | ||||||||||||||||||||
| Shares | Value | Capital | Income | Deficit | Deficit | |||||||||||||||||||
| Balance, December 31, 2021 | i 23,889,500 | $ | i 23,890 | $ | i 25,740 | $ | - | $ | ( i 183,311 | ) | $ | ( i 133,681 | ) | |||||||||||
| Shares issued with the acquisition of MySpray | i 51,110,500 | i 51,110 | i 51,110 | |||||||||||||||||||||
| Net loss | - | - | - | ( i 34,120 | ) | ( i 34,120 | ) | |||||||||||||||||
| Balance, March 31, 2022 | i 75,000,000 | $ | i 75,000 | $ | i 25,740 | $ | - | $ | ( i 217,431 | ) | $ | ( i 116,691 | ) | |||||||||||
| Change in exchange rates | ( i 16,671 | ) | ( i 16,671 | ) | ||||||||||||||||||||
| Net loss | - | - | - | ( i 160,404 | ) | ( i 160,404 | ) | |||||||||||||||||
| Balance, June 30, 2022 | i 75,000,000 | $ | i 75,000 | $ | i 25,740 | $ | ( i 16,671 | ) | $ | ( i 377,835 | ) | $ | ( i 293,766 | ) | ||||||||||
| Accumulated | ||||||||||||||||||||||||
| Additional | Other | Total | ||||||||||||||||||||||
| Common Stock | Paid-in | Comprehensive | Accumulated | Stockholders’ | ||||||||||||||||||||
| Shares | Value | Capital | Income | Deficit | Deficit | |||||||||||||||||||
| Balance, December 31, 2022 | i 75,000,000 | $ | i 75,000 | $ | i 25,740 | $ | ( i 38,195 | ) | $ | ( i 525,881 | ) | $ | ( i 463,336 | ) | ||||||||||
| Issuance of acquisition shares | i 569,889,500 | i 569,890 | i 569,890 | |||||||||||||||||||||
| Change in exchange rates | i 290 | i 290 | ||||||||||||||||||||||
| Net loss | - | - | - | ( i 60,305 | ) | ( i 60,305 | ) | |||||||||||||||||
| Balance, March 31, 2023 | i 644,889,500 | $ | i 644,890 | $ | i 25,740 | $ | ( i 37,905 | ) | $ | ( i 586,186 | ) | $ | i 46,538 | |||||||||||
| Private placement issuance of shares | i 21,036,144 | i 21,036 | i 252,119 | i 273,155 | ||||||||||||||||||||
| Issuance of shares for services -prior | i 6,000,000 | i 6,000 | i 71,125 | i 77,125 | ||||||||||||||||||||
| Repurchase of common shares | ( i 24,000,000 | ) | ( i 24,000 | ) | ( i 52,291 | ) | ( i 76,291 | ) | ||||||||||||||||
| Shares issued for purchase of intangible assets and service agreement | i 44,920,000 | i 44,920 | i 1,662,476 | i 1,707,396 | ||||||||||||||||||||
| Capital contribution from officers | ( i 95,000,000 | ) | ( i 95,000 | ) | i 95,000 | - | ||||||||||||||||||
| Private placement of shares | i 700,000 | i 700 | i 25,907 | i 26,607 | ||||||||||||||||||||
| Change in exchange rates | ( i 7,539 | ) | ( i 7,539 | ) | ||||||||||||||||||||
| Net loss | - | - | - | ( i 1,034,339 | ) | ( i 1,034,339 | ) | |||||||||||||||||
| Balance, June 30, 2023 | i 598,545,644 | $ | i 598,546 | $ | i 2,080,075 | $ | ( i 45,444 | ) | $ | ( i 1,620,526 | ) | $ | i 1,012,651 | |||||||||||
The accompanying notes are an integral part of these unaudited financial statements
4
Consolidated Statements of Cash Flows
(Unaudited)
| For the Six Months Ended | ||||||||
| June 30, | ||||||||
| 2023 | 2022 | |||||||
| Cash Flows From Operating Activities | ||||||||
| Net loss | $ | ( i 1,094,645 | ) | $ | ( i 194,524 | ) | ||
| Less : Loss form discontinued operation | ( i 10,432 | ) | ( i 15,303 | ) | ||||
| Loss from continuing operations | ( i 1,084,213 | ) | ( i 179,222 | ) | ||||
| Amortization of intangible assets | i 427,369 | i 18,948 | ||||||
| Impairment of goodwill and intangible assets | i 590,512 | - | ||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | i 764 | ( i 871 | ) | |||||
| Inventory | ( i 2,857 | ) | ( i 11,942 | ) | ||||
| Prepaid and other assets | ( i 27 | ) | ||||||
| Accrued payable and accrued liabilities | i 6,920 | ( i 4,440 | ) | |||||
| Net cash used in operating activities -continuing operations | ( i 61,533 | ) | ( i 177,527 | ) | ||||
| Net cash used in operating activities -discontinued operations | ( i 10,432 | ) | ( i 14,972 | ) | ||||
| Net cash used in operating activities | ( i 71,964 | ) | ( i 192,499 | ) | ||||
| Cash Flows from Investing Activities | ||||||||
| Acquisition of a business net of cash acquired | - | i 19,981 | ||||||
| Net cash (used in) provided by investing activities | - | i 19,981 | ||||||
| Cash Flows From Financing Activities | ||||||||
| Proceeds from the sale of common stock | i 26,607 | - | ||||||
| Common stock payable | - | i 206,917 | ||||||
| Proceeds from related party loans, net of repayments | i 2,560 | i 24,916 | ||||||
| Net cash provided by financing activities | i 29,167 | i 231,833 | ||||||
| Effect of exchange rates on cash and cash equivalents | i 11,762 | i 14,045 | ||||||
| Net (decrease) increase in cash and cash equivalents | ( i 31,036 | ) | i 73,360 | |||||
| Cash and cash equivalents, beginning of year | i 41,808 | i 9,499 | ||||||
| Cash and cash equivalents, end of year | $ | i 10,773 | $ | i 82,859 | ||||
| Supplemental disclosure of cash flow information | ||||||||
| Cash paid for income tax expense | $ | - | $ | - | ||||
| Cash paid for interest expense | $ | - | $ | - | ||||
The accompanying notes are an integral part of these unaudited financial statements
5
SOUL BIOTECHNOLOGY CORPORATION
NOTES
TO (UNAUDITED) CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTH PERIODS ENDED JUNE 30, 2023 AND 2022
i
NOTE 1 – ORGANIZATION AND DESCRIPTION OF THE BUSINESS
Basis of Presentation and Organization
Soul Biotechnology Corporation, f/k/a Adorbs Inc. (“Soul” or the “Company”) is a Nevada corporation. Adorbs was formerly a developmental stage corporation formed to provide organic children’s clothing designed to be cute, comfortable, and trendy. The Company was incorporated under the laws of the State of Nevada on October 18, 2017. On that date, the Company was authorized to issue shares of common stock at $ par value.
On February 10, 2022, the Company entered into a share exchange agreement (the “Share Exchange Agreement”) with MySpray Therapeutics Inc. (“MySpray”), a Saskatchewan, Canadian corporation, Nichol Martinuik (“Martinuik”) and Rachel Martinuik (“R. Martinuik”), the sole officers, directors, and shareholders of MySpray, Qatar Consulting Inc. & Company (“Qatar”), Broadway Creative Consultants Corp. (“Broadway”), and David Lazar (“Lazar”), as the sole officer and director of the Company and the managing member of Activist Investing LLC (“Activist”). Under the Share Exchange Agreement, One Hundred Percent ( i 100%) of the ownership interest of MySpray was exchanged for (i) i 51,110,500 shares of common stock of the Company at the Closing, and (ii) an additional i 569,889,500 shares of common stock of ADOB, to be issued upon the increase in authorized shares of common stock of ADOB to , each of which is to be issued to Martinuik, R. Martinuik, Qatar, Broadway, and Activist, pro-rata, in accordance with the Share Exchange Agreement. The former stockholders of MySpray will acquire a majority of the issued and outstanding common stock as a result of the share exchange transaction. The transaction has been accounted for as a recapitalization of the Company, whereby MySpray is the accounting acquirer.
Immediately after completion of such share exchange, the Company will have a total of issued and outstanding shares, with authorized share capital for common share of i 700,000,000.
Consequently, the Company has ceased to fall under the definition of a shell company as defined in Rule 12b-2 under the Exchange Act of 1934, as amended (the “Exchange Act”) and MySpray is now a wholly-owned subsidiary.
On May 5, 2022, the Company filed a Certificate of Amendment with the state of Nevada increasing its authorized shares from 75,000,000 to shares of $ par value common stock. None of the additional 569,889,500 shares issuable under the terms of the Share Agreement, have been issued.
MySpray creates innovative and clinically developed products for the global natural health community in the areas of immune function, mental health, and pain management and is currently the license holder of 9 Natural Product Numbers (NPN) through the Natural and Non-prescription Health Products Directorate division of Health Canada.
MySpray is preparing to expand formulas to support clinical trials along with the licensing for research and development in the fields of mental health and the impact of treatment protocols with phytonutrients, medicinal mushrooms, and psychedelic compounds under our current “MyShrooms” brand. Also, MySpray is attempting end-to-end capabilities from substrate for growth, genetics, research, extraction, formulations, delivery, and distribution of the finished product. This could allow MySpray to maintain high-quality control and enable us to:
| ● | Create formulations for clinical trials. |
| ● | Supply raw materials, standardized extracts, and medicinal compounds that are in high demand for ongoing academic research globally. |
6
| ● | Provide finished products direct to consumer. |
| ● | Offer white label manufacturing. |
The Company changed its name to Soul Biotechnology Corporation on January 3, 2023.
On March 13, 2023, the sole existing director and officer resigned immediately. Accordingly, David Lazar, serving as a director and an officer, ceased to be the President, Chief Executive Officer, Chief Financial Officer, and as a Member of the Board of Directors of the Company. Also on March 13, 2023, Rachel Martinuik consented to the new CEO, CFO, Treasurer, and a Member of the Board of Directors of the Company and Nichol Martinuik consented to act as the new President, Secretary, and a Member of the Board of Directors of the Company.
Rachel Martinuik, 47, CEO and Chair of the board of MySpray, has been part of MySpray from inception. In her previous role as Chief Operating Officer, her responsibilities included the oversight of MySpray’s resources and oversees budgetary expenditures.
Nichol Martinuik, 47, President & Founder of MySpray, has been in health sciences, traditional medicine, and the natural health industry since 1997, gaining clinical experience in pain management, disease prevention, and therapeutic health solutions.
On June 1, 2023 the Company decided to transition from its current Clinic Operations to the establishment of a research laboratory. This strategic move was driven by the Company’s commitment to innovation and advancing the field of healthcare through research and development to include clinical trials of medicinal mushrooms, cannabinoids, and psychedelic compounds including psilocybin. All of the assets and results of operations from Clinic Operations have been treated as discontinued operations for all periods presented in the financial statements. See Note 4. Discontinued Operations.
The Company’s year-end is December 31.
All figures presented in this report are in US dollars unless stated otherwise.
/ i
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING ASSUMPTIONS AND POLICIES
i
The accompanying consolidated financial statements have been prepared in accordance with the FASB’s ASC, which is the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) in the United States. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary MySpray Therapeutics Inc.All intercompany accounts and transactions are eliminated in consolidation.
i
The operations of the Company’s former Clinic Division has been presented as discontinued operations. Unless otherwise noted, amounts and disclosures throughout these Notes to Consolidated Financial Statements relate solely to continuing operations and exclude all discontinued operations. See Note 4 for additional information on discontinued operations.
7
i
The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business for the twelve months following the date of these consolidated financial statements.
The Company expects to generate operating cash flow that will be sufficient to fund presently anticipated operations although there can be no assurance. This raises substantial doubt about the Company’s ability to continue as a going concern. Therefore, the Company will need to raise additional funds and is currently exploring alternative sources of financing to supplement expected cash flow. Historically, the Company has raised capital through private placements, as an interim measure to finance working capital needs and may continue to raise additional capital through the sale of common stock or other securities and obtaining some short-term loans. The Company will be required to continue to do so until its operations become profitable.
The Company may attempt to raise capital in the near future through the sale of equity or debt financing; however, there can be assurances the Company will be successful in doing so. There can be no assurance that such additional financing will be available to the Company on acceptable terms or at all.
i
Management’s Representation of Interim Consolidated Financial Statements
The accompanying unaudited consolidated financial statements have been prepared by the Company without audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The Company uses the same accounting policies in preparing quarterly and annual consolidated financial statements. Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been or omitted as allowed by such rules and regulations, and management believes that the disclosures are adequate to make the information presented not misleading. These consolidated financial statements include all of the adjustments, which in the opinion of management are necessary for a fair presentation of financial position and results of operations. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative of results for a full year.
i
The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant estimates relate to the amortization period for intangible assets, income taxes and contingencies. The Company bases its estimates on historical experience, known or expected trends, and various other assumptions that are believed to be reasonable given the quality of information available as of the date of these consolidated financial statements. The results of these assumptions provide the basis for making estimates about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates.
i
For purposes of reporting within the statements of cash flows, the Company considers all cash on hand, cash accounts not subject to withdrawal restrictions or penalties, and all highly liquid debt instruments purchased with a maturity of three months or less to be cash and cash equivalents. As of June 30, 2023, and December 31, 2022, the on-hand cash balances were $ i 10,773 and $ i 41,808, respectively.
/ i
Inventory, is stated at the lower of cost or net realizable value with cost determined under the first-in, first-out (“FIFO”) method. As of June 30, 2023, and December 31, 2022, inventory amounted to $ i 38,138 and $ i 35,281, respectively.
8
/ i
Goodwill and Intangible Assets
Goodwill represents the future economic benefit arising from other assets acquired that could not be individually identified and separately recognized. The goodwill arising from the Company’s acquisition is attributable to the value of the potential expanded market opportunity with new customers. Intangible assets have either an identifiable or indefinite useful life. Intangible assets with identifiable useful lives are amortized on a straight-line basis over their economic or legal life, whichever is shorter. The Company’s amortizable intangible assets consist primarily of customer relationships, trademarks, and product formulations. The useful life of these customer relationships is estimated to be three years. The Company also has purchased intellectual property which is amortized over a one year period.
Goodwill is not amortized but is subject to annual impairment testing unless circumstances dictate more frequent assessments. The Company performs an annual impairment assessment for goodwill during the fourth quarter of each year and more frequently whenever events or changes in circumstances indicate that the fair value of the asset may be less than the carrying amount. Goodwill impairment testing compares the fair value of the reporting unit to its carrying amount. The fair value of the reporting unit is determined by considering both the income approach and market approaches. The fair values calculated under the income approach and market approaches are weighted based on circumstances surrounding the reporting unit. Under the income approach, the Company determines fair value based on estimated future cash flows of the reporting unit, which are discounted to the present value using discount factors that consider the timing and risk of cash flows. For the discount rate, the Company relies on the capital asset pricing model approach, which includes an assessment of the risk-free interest rate, the rate of return from publicly traded stocks, the Company’s risk relative to the overall market, the Company’s size and industry and other Company-specific risks. Other significant assumptions used in the income approach include the terminal value, growth rates, future capital expenditures, and changes in future working capital requirements. The market approaches use key multiples from guideline businesses that are comparable and are traded on a public market. If the fair value of the reporting unit is greater than its carrying amount, there is no impairment. If the reporting unit’s carrying amount exceeds its fair value, then an impairment loss is recognized in an amount equal to the excess.
Due to the discontinuation of Clinic Operations as described throughout this Report, during the three months ended June 30, 2023, the Company performed an impairment analysis and determined that its goodwill and intangible assets were fully impaired. As a result the Company recorded an impairment charge of $590,512 on its Statements of Operations for the three months ended June 30, 2023.
i
The Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The guidance provided in Accounting Standards Codification (“ASC”) Topic 606 (“ASC 606”) requires entities to use a five-step model to recognize revenue by allocating the consideration from contracts to performance obligations on a relative standalone selling price basis. Revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services. The standard also requires new disclosures regarding the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. ASC 606 also includes Subtopic 340-40, Other Assets and Deferred Costs – Contracts with Customers, which requires the deferral of incremental costs of obtaining a contract with a customer.
i
The functional and reporting currency of MySpray is the Canadian dollar. Monetary assets denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Average monthly rates are used to translate revenues and expenses.
Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Exchange gains or losses arising from foreign currency transactions are included in the determination of net income for the respective periods.
Assets and liabilities of the Company’s operations are translated into the reporting currency, United States dollars, at the exchange rate in effect at the balance sheet dates. Revenue and expenses are translated at average rates in effect during the reporting periods.
9
Assets and liabilities of the Company’s operations are translated into the reporting currency, United States dollars, at the exchange rate in effect at the balance sheet dates. Revenue and expenses are translated at average rates in effect during the reporting periods. Equity transactions are recorded at the historical rate when the transaction occurs. The resulting translation adjustment is reflected as accumulated other comprehensive income, a separate component of stockholders’ equity in the statement of stockholders’ equity.
Differences may arise in the amount of bad debt expense, depreciation expense and amortization expense reported in the Company’s operating results as compared to the corresponding change in the allowance for doubtful accounts, accumulated depreciation, and accumulated amortization, respectively, due to foreign currency translation. These translation adjustments are reflected in accumulated other comprehensive income, a separate component of the Company’s stockholders’ equity.
i
The Company accounts for income taxes pursuant to FASB ASC Topic 740, Income Taxes. Under FASB ASC Topic 740, deferred tax assets and liabilities are determined based on temporary differences between the bases of certain assets and liabilities for income tax and financial reporting purposes. The deferred tax assets and liabilities are classified according to the financial statement classification of the assets and liabilities generating the differences. The Company maintains a 100% valuation allowance with respect to deferred tax assets, therefore there are no deferred taxes on the Company’s Balance Sheet. The Company establishes a valuation allowance based upon the potential likelihood of realizing the deferred tax asset and taking into consideration the Company’s financial position and results of operations for the current period. Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carry-forward period under the Federal tax laws. Changes in circumstances, such as the Company generating taxable income, could cause a change in judgment about the reliability of the related deferred tax asset. Any change in the valuation allowance will be included in income in the year of the change in estimate.
i
The Company values its convertible notes and amounts due to related partings and short-term loans payable under FASB ASC 820 which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based on the observability of those inputs. ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement).
The three levels of the fair value hierarchy are as follows:
Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities, and listed equities.
Level 2 – Valuations for assets and liabilities that can be obtained from readily available pricing sources via independent providers for market transactions involving similar assets or liabilities. The Company’s principal markets for these securities are the secondary institutional markets, and valuations are based on observable market data in those markets.
Level 3 – Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. The Company uses Level 3 to value its derivative instruments.
10
i
The Company accounts for stock-based compensation in accordance with ASC 718 Compensation-Stock Compensation (“ASC 718”). ASC 718 addresses all forms of share-based payment (“SBP”) awards including shares issued under employee stock purchase plans and stock incentive shares. Under ASC 718 awards result in a cost that is measured at fair value on the awards’ grant date, based on the estimated number of awards that are expected to vest, and will result in a charge to operations.
i
Net loss per common share is computed by dividing net loss by the weighted average common shares outstanding during the period as defined by Financial Accounting Standards, ASC Topic 260, “Earnings per Share.” Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding.
i
The Company evaluated subsequent events through the date when consolidated financial statements are issued for disclosure consideration.
i
Recent Accounting Pronouncements
There are no recent accounting pronouncements that have an impact on the Company’s operations.
/ i
The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business for the twelve months following the date of these consolidated financial statements. The Company has incurred significant operating losses since its inception. As of June 30, 2023, the Company had a working capital deficit of $ i 229,440 and an accumulated deficit of $ i 1,620,526.
The Company expects to generate operating cash flows that will be sufficient to fund presently anticipated operations although there can be no assurance. This raises substantial doubt about the Company’s ability to continue as a going concern. Therefore, the Company will need to raise additional funds and is currently exploring alternative sources of financing to supplement expected cash flow. Historically, the Company has raised capital through private placements, as an interim measure to finance working capital needs and may continue to raise additional capital through the sale of common stock or other securities and obtaining some short-term loans. The Company will be required to continue to do so until its operations become profitable.
The Company may attempt to raise capital in the near future through the sale of equity or debt financing; however, there can be assurances the Company will be successful in doing so. There can be no assurance that such additional financing will be available to the Company on acceptable terms or at all.
11
/ i
NOTE 4 – DISCONTINUED OPERATIONS
On June 1, 2023 the Company decided to transition from its current Clinic Operations to the establishment of a research laboratory. This strategic move was driven by the Company’s commitment to innovation and advancing the field of healthcare through research and development. All of the assets and results of operations from Clinic Operations have been treated as discontinued operations for all periods presented in the financial statements. The assets and liabilities of Clinic Operations were transferred to the Company’s CEO and her spouse for no consideration since Clinic Operations were not profitable in either 2022 or 2023 to date. The following table reflects the results of operations from Clinic Operations for the periods presented.
i
| Schedule of discontinued operations | ||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Revenue | $ | i 23,029 | $ | i 34,517 | $ | i 64,456 | $ | i 53,769 | ||||||||
| Operating expenses | i 29,253 | i 40,999 | i 74,888 | i 69,072 | ||||||||||||
| Discontinued operations, net of tax | $ | ( i 6,224 | ) | $ | ( i 6,482 | ) | $ | ( i 10,432 | ) | $ | ( i 15,303 | ) | ||||
/ i
On February 10, 2022, the Company entered into a share exchange agreement (the “Share Exchange Agreement”) with MySpray Therapeutics Inc. (“MySpray”), a Saskatchewan, Canadian corporation, Nichol Martinuik (“Martinuik”) and Rachel Martinuik (“R. Martinuik”), the sole officers, directors, and shareholders of MySpray, Qatar Consulting Inc. & Company (“Qatar”), Broadway Creative Consultants Corp. (“Broadway”), and David Lazar (“Lazar”), as the sole officer and director of the Company and the managing member of Activist Investing LLC (“Activist”). Under the Share Exchange Agreement, One Hundred Percent ( i 100%) of the ownership interest of MySpray was exchanged for (i) i 51,110,500 shares of common stock of the Company at the Closing, and (ii) an additional 569,889,500 shares of common stock of ADOB, to be issued upon the increase in authorized shares of common stock of ADOB to , each of which is to be issued to Martinuik, R. Martinuik, Qatar, Broadway, and Activist, pro-rata, in accordance with the Share Exchange Agreement. As of the date of this Report, none of the i 569,889,500 shares had been issued. The former stockholders of MySpray will acquire a majority of the issued and outstanding common stock as a result of the share exchange transaction. The transaction has been accounted for as a recapitalization of the Company, whereby MySpray is the accounting acquirer.
For the acquisition of MySpray the following table summarizes the acquisition date fair value of the consideration paid, identifiable assets acquired and liabilities assumed:
Consideration paid
i
| Schedule of cosideration paid | ||||
| Common stock, 621,000,000 shares of the Company restricted common stock valued at $0.001 per share | $ | i 621,000 | ||
| Net liabilities assumed | i 62,777 | |||
| Fair value of total consideration paid | $ | i 683,777 |
12
Net assets acquired and liabilities assumed
i /
The Company has allocated the fair value of the total consideration paid of $ i 547,022 to goodwill and $ i 136,755 to intangible assets with a life of three years. The value of goodwill represented MySpray’s ability to generate profitable operations going forward. Management estimated the provisional fair values of the intangible assets and goodwill at February 10, 2022. As a result of Clinic Operations becoming a discontinued operation, the Company fully impaired its goodwill and intangible asset balance of $ i 590,512.
/ i
During the three months ended June 30, 2023 the Company acquired intellectual property (IP) by issuing shares of its common stock valued at $ i 1,707,396. The company is amortizing the value of its IP over a one year period. As a result the Company recorded amortization expense of $ i 416,689 on its Statements of Operations for the three months ended June 30, 2023. As of June 30, 2023 the balance of intangible assets was i 1,272,303. This amount will be amortized prorata over the next nine months.
/ i
NOTE 7 – RELATED PARTY TRANSACTIONS
The Company has been funded by its executive officers, and officers of its subsidiary. As of June 30, 2023, the balance due to executive officers and a former officer amounted to $ i 230,264 in the form of interest-free demand loans compared to $ i 227,704 during the period ended December 31, 2022. During the six months ended June 30, 2023, the Company’s officers have advanced $ i 2,560 to the Company.
On June 1, 2023 the Company decided to transition from its current Clinic Operations to the establishment of a research laboratory. This strategic move was driven by the Company’s commitment to innovation and advancing the field of healthcare through research and development. All of the assets and results of operations from Clinic Operations have been treated as discontinued operations for all periods presented in the financial statements. The assets and liabilities of Clinic Operations were transferred to the Company’s CEO and her spouse for no consideration since Clinic Operations were not profitable in either 2022 or 2023 to date.
During the three months ended June 30, 2023 the Company’s CEO and her spouse each voluntarily donated 47,500,000 of their common shares, for of total of i 95,000,000 common shares which were returned to the Company’s treasury.
13
/ i
NOTE 8 – COMMON STOCK AND COMMON STOCK PAYABLE
On May 5, 2022, the Company filed a Certificate of Amendment with the state of Nevada increasing its authorized shares from 75,000,000 to shares of $ par value common stock. As of June 30, 2023, and December 31, 2022, a total of and shares of common stock were issued and outstanding, respectively. The Company has issued the following shares during 2023:
| Ø | shares were issued pursuant to private placements. These shares were valued at $ i 299,762. |
| Ø | shares were issued to purchase intellectual property and for services. These shares were valued at i 1,707,396. |
| Ø | shares were repurchased. These shares were valued at $ i 76,201. |
| Ø | i 6,000,000 shares valued at $ were issued for services. |
| Ø | i 95,000,000 shares were returned to treasury by the Company’s officers and treated as donated capital. |
/ i
In accordance with the Statement of Financial Accounting Standards (“SFAS”) 165 (ASC 855-10) management has performed an evaluation of subsequent events through the date that the consolidated financial statements were available to be issued and has determined that it does not have any material subsequent events to disclose in these consolidated financial statements.
14
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis should be read in conjunction with our unaudited consolidated financial statements and the related notes thereto. The management’s discussion and analysis contains forward-looking statements, such as statements of our plans, objectives, expectations, and intentions. Any statements that are not statements of historical fact are forward-looking statements. When used, the words “believe,” “plan,” “intend,” “anticipate,” “target,” “estimate,” “expect” and the like, and/or future tense or conditional constructions (“will,” “may,” “could,” “should,” etc.), or similar expressions, identify certain of these forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. Our actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of several factors. We do not undertake any obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this Quarterly Report on Form 10-Q. The following discussion should be read in conjunction with our audited financial statements and the related notes that appear in our Annual Report on Form 10-K, as filed with the Securities and Exchange Commission on March 30, 2022.
Overview
Business Overview
Soul Biotechnology Corporation is a US holding company incorporated in Nevada in October 2017, which operates through the Company’s wholly owned subsidiary MySpray Therapeutics Inc. (“MySpray”), a Saskatchewan, Canada corporation incorporated on October 2, 2012.
MySpray creates innovative and clinically developed products for the global natural health community in the areas of immune function, mental health, and pain management.
MySpray Therapeutics® Inc. is currently the license holder of 9 Natural Product Numbers (NPN) through the Natural and Non-prescription Health Products Directorate division of Health Canada.
We are preparing to expand formulas to support clinical trials along with the licensing for research and development in the fields of mental health and the impact of treatment protocols with phytonutrients, medicinal mushrooms, and psychedelic compounds under our current “MyShrooms” brand.
We are attempting end-to-end capabilities from substrate for growth, genetics, research, extraction, formulations, delivery, and distribution of the finished product. This could allow MySpray to maintain high-quality control and enable us to:
| ● | Create formulations for clinical trials. |
| ● | Supply raw materials, standardized extracts, and medicinal compounds that are in high demand for ongoing academic research globally. |
| ● | Provide finished products direct to consumer. |
| ● | Offer white label manufacturing. |
15
Through this process, we are attempting to achieve a net zero global environmental footprint, implementing growth solutions using naturally composted substrates and by-products of manufacturing current products. MySpray is a current member of the Canadian Health Food Association (CHFA) and presently offers 5 products in the natural health marketplace, and proudly manufactures in Canada with cGMP credentials, sourced from USDA-certified organic North American producers.
MySpray is clinically developing innovative and evidence-based therapeutics that can help us generate revenue through the sales of its five products to distributors, direct wholesale to pharmacies, clinics, health stores, ecommerce, and traditional retailers, along with our retail online store.
Background of the Company
MySpray Therapeutics was founded in 2012 by natural health practitioner and researcher, Nichol Martinuik, with a mission of creating the most innovative and life-changing products.
The first mission was to find a solution to the low absorption rates of nutrients from pills, leading to the development of Vitamin D3 and B12 oral sprays. Sublingual and buccal absorption provides a much higher absorption by the body, eliminating the gastric breakdown through digestion. With the use of a convenient spray, it ensures that your body is receiving the maximum benefits.
MyPain LiniMint was the next product to be approved by Health Canada, after many years of clinical research and development with dimethyl sulfoxide (“DMSO”) as a topical analgesic for pain management. DMSO provides tissue penetration directly to the site of pain and inflammation, with capabilities beyond any other topically applied product. Many trials were conducted with this formula to create a balanced product that minimized the odors associated with DMSO.
MyShrooms Immunity was then developed as an immune modulator and formulated with a synergistic blend of 8 medicinal mushrooms. Fungi have been revered medically for thousands of years in their abilities to increase the immune system’s recognition and defence from daily threats. MyShrooms Defence is the evolution of the original Vitamin D3 spray, and a combination of Chaga and D3. Chaga is a potent substance containing over 200 nutrients, including vitamin D and the cofactors necessary for absorption, creating a superior formula for disease prevention.
MySpray is committed to ongoing research, and the development of innovative solutions and premium health products. Nichol is a member of the Natural Health Practitioners of Canada, and the Saskatchewan Association of Doctors of Natural Medicine. MySpray Therapeutics is proudly manufactured in Canada and a proud member of the Canadian Health Food Association.
Products
MySpray offers products in a variety of delivery systems including topical, capsules, and through a highly absorbed convenient oral spray delivery system.
MyShrooms Immune-Pro
MyShrooms Immune-Pro is a clinical strength herbal medicine to activate, balance, and support a healthy immune system. It is formulated with a powerful and unique trifecta of medicinal mushrooms, ginseng, and propolis. With potent antioxidants and powerful adaptogens it increases energy and the body’s response to stress, along with related mental and physical fatigue.
16
MyShrooms Defence
MyShrooms Defence is a combination of chaga, often proclaimed “king of medicinal mushrooms,” and Vitamin D. Chaga is a rich source of potent antioxidants and powerful phytochemicals, such as sterols, phenols, beta-glucans, and melanin. Vitamin D, widely known as the sunshine vitamin, is an essential hormone for disease prevention, and the regulation of minerals. Combined they strengthen the body’s natural defence system, and protect against pathogens, illness, and disease.
MyShrooms Immunity
MyShrooms Immunity offers the synergistic effect of 8 medicinal mushrooms, each containing complex, unique, and specific compounds providing significant health benefits throughout the whole body. As an immune modulator, it helps to activate, balance, and restore a healthy immune response with a comprehensive combination of the most potent medicinal mushrooms including: Reishi, Chaga, Cordyceps, Turkey Tail, Lion’s Mane, Agaricus Blazei, Shiitake, and Maitake.
MyShrooms Energy
MyShrooms Energy is a combination of Cordyceps and Vitamin B12. Cordyceps mushroom has been used for centuries for its energizing and apoptogenic properties, as well as to support oxygen uptake, stamina, endurance, libido, and kidney and adrenal health. With naturally occurring B-vitamins, it is a perfect blend to include Vitamin B12 with its essential and diverse functions in the body. B12 is involved in the maintenance of the nervous system, red blood cell production, energy metabolism and the proper functioning of our brain, heart, liver, and kidneys. Combined they contribute to optimal health, well-being, performance, mood, vitality, and energy.
MyPain LiniMint
MyPain LiniMint contains 80% DMSO and delivers the deepest tissue penetration available. It is 100% natural and provides unmatched pain relief from muscle strains, joint sprains, backaches & arthritis. The powerful analgesic properties easily penetrate through the skin into all tissues, reducing pain and inflammation at the source to promote the body’s natural healing process, a remarkable advantage over other topically applied products.
With approximately 11,000 studies on DMSO, research demonstrates its analgesic properties by blocking the peripheral C nerve fibers and acts as an antioxidant neutralizing the free radicals of inflammation.
MySpray generates revenue through the sales of its five products to distributors, direct wholesale to pharmacies, clinics, health stores, ecommerce, and traditional retailers, along with our retail online store.
The results from discontinued operations are excluded from management’s discussion of operations below, and from the Liquidity analysis.
17
Results of Operations for the Six Months Ended June 30, 2023 Compared to the Six Months Ended June 30, 2022
Revenue
For the six months ended June 30, 2023, we recorded $60,611 in revenue from the sale of our products from continuing operations compared to $80,773 for the six months ended June 30, 2022. We are in the process of developing our strategic business plan going forward and, therefore, revenues may vary from period to period.
Cost of sales
Cost of sales was $20,239 for the six months ended June 30, 2023, compared to cost of sales of $39,137 for the six months ended June 30, 2022.
Operating expenses
Operating expenses for the six months ended June 30, 2023 were $1,123,908 compared to $220,014 for the six months ended June 30, 2022. The increase in operating expenses in the six months ended June 30, 2023, compared to the same period in 2022 is due to amortization of $416,689 in intangible assets, an impairment of goodwill and intangible assets of 590,512 compared to $-0- in the 2022 period; an increase in general and administrative expenses in most expense categories of $23,596 in the 2023 period, partially offset by a decrease in professional fees of $118,634 in 2023 compared to 2022.
Net Loss
As a result of the foregoing, we had a loss from continuing operations of $1,084,213 for the six months ended June 30, 2023 compared to a loss of $179,222 during the same six-month period ended June 30, 2022. The loss from discontinued operations for the six months ended June 30, 2023 was $10,432 compared to a loss of $15,303 during the same six-month period ended June 30, 2022.
Liquidity and Capital Resources
We had $10,773 in cash on hand as of June 30, 2023.
Net cash used in operating activities was $61,533 for the six months ended June 30, 2023, compared to $177,527 for the six months ended June 30, 2022 The decrease in cash used in operating activities during the six months ended June 30, 2023 was primarily due to changes in operating assets and liabilities.
Net cash provided investing activities was $-0- for the period ended June 30, 2023 compared to $19,981 in net cash provided by investing activities during the period ended June 30, 2022. The decrease is attributable to the acquisition of a business net of cash acquired in the 2022 period.
Net cash provided by financing activities was $29,167 for the six months ended June 30, 2023, compared to $231,833 for the six months ended June 30, 2022. The decrease during the 2023 period is primarily attributable to $24,916 in proceeds from related party loans in 2022 compared to $2,560, and a decrease in proceeds from the sale of common stock of $180,310 in the six months ended June 30, 2022.
We believe will become cash flow positive from operations in the future, however, there can be no assurance that we will be successful. Also, there can be no assurance that related parties will continue to fund our operations or that we can obtain funding from the sale of our securities or through the issuance of debt.
18
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.
Critical Accounting Policies and Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
We believe that the following critical policies affect our more significant judgments and estimates used in preparation of our consolidated financial statements.
See Note 2 to the Financial Statements for a Listing of our Critical Accounting Policies
New Accounting Pronouncements
There are no new accounting pronouncements that have a material impact on our financial statements.
Off-Balance Sheet Arrangements
None.
Item 3. Quantitative And Qualitative Disclosures About Market Risk.
We are a smaller reporting company and are not required to provide this information.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures.
Our management is responsible for establishing and maintaining a system of “disclosure controls and procedures” (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our disclosure controls and procedures were not effective as of June 30, 2023.
19
Management’s Report on Internal Control over Financial Reporting.
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that:
| ● | pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; | |
| ● | provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and | |
| ● | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the consolidated financial statements. |
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate.
Our management assessed the effectiveness of our internal control over financial reporting based on the parameters set forth above and has concluded that as of June 30, 2023, our internal control over financial reporting was not effective to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with U.S. generally accepted accounting principles as a result of the following material weaknesses:
| ● | The Company does not have sufficient segregation of duties within accounting functions due to only having one officer and limited resources. | |
| ● | The Company does not have an independent board of directors or an audit committee. | |
| ● | The Company does not have written documentation of our internal control policies and procedures. | |
| ● | All of the Company’s financial reporting is carried out by a financial consultant. |
We plan to rectify these weaknesses by implementing an independent board of directors, establishing written policies and procedures for our internal control of financial reporting, and hiring additional accounting personnel at such time as we complete a reverse merger or similar business acquisition.
Changes in Internal Control over Financial Reporting.
There has been no change in our internal control over financial reporting during the year June 30, 2023, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
20
The Company may be involved in certain legal proceedings that arise from time to time in the ordinary course of its business. Legal expenses associated with any contingency are expensed as incurred. The Company’s officers and directors are not aware of any threatened or pending litigation to which the Company is a party or which any of its property is the subject and which would have any material, adverse effect on the Company.
As a smaller reporting company, we are not required to include this disclosure in this Quarterly Report on Form 10-Q.
Item 2. Unregistered Sales of Equity Securities and Use Of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
None.
21
The exhibits listed on the Exhibit Index below are provided as part of this report.
22
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.
| SOUL BIOTECHNOLOGY CORPORATION | ||
| Dated: September 27, 2023 | By: | /s/ Rachel Martinuik |
| Rachel Martinuik | ||
| Chief Executive Officer and | ||
| Chief Financial Officer | ||
| Principal Executive Officer, | ||
| Principal Financial Officer | ||
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
23
| This ‘10-Q’ Filing | Date | Other Filings | ||
|---|---|---|---|---|
 | ||||
| 12/31/23 | ||||
| Filed on: | 9/27/23 | |||
| For Period end: | 6/30/23 | NT 10-Q | ||
| 6/1/23 | ||||
| 3/31/23 | 10-Q | |||
| 3/13/23 | 10-K, 8-K | |||
| 1/3/23 | ||||
| 12/31/22 | 10-K | |||
| 6/30/22 | 10-Q | |||
| 5/5/22 | 8-K | |||
| 3/31/22 | 10-Q | |||
| 3/30/22 | PRE 14C | |||
| 2/10/22 | 8-K | |||
| 12/31/21 | 10-K | |||
| 10/18/17 | ||||
| 10/2/12 | ||||
| List all Filings | ||||
As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 2/10/22 Soul Biotechnology Corp. 8-K:1,2,3,5 2/10/22 14:1.2M Empire Filings/FA 12/14/20 Soul Biotechnology Corp. 10-12G/A 5:709K EdgarAgents LLC/FA 11/18/20 Soul Biotechnology Corp. 10-12G/A 6:838K EdgarAgents LLC/FA 1/19/18 Soul Biotechnology Corp. S-1 6:1M S2 Filings LLC/FA |