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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Globestar Therapeutics Corporation (PK) | USOTC:GSTC | OTCMarkets | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.0003 | 0.0002 | 0.0003 | 0.0003 | 0.0002 | 0.0003 | 3,274,444 | 17:41:32 |
UNITED STATES
SECURITY AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________
FORM
____________________
(MARK ONE)
For the quarterly period ended
or
For the transition period from _________ to _________
Commission File Number:
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of Incorporation or organization) | (I.R.S. Employer Identification Number) | |
(Address of principal executive offices) | (Zip code) |
Registrant’s telephone number, including area
code:
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.
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).
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 | ☐ | |
☒ | 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 ☐
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 |
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. As of October 4, 2024,
shares of common stock issued and outstanding.
TABLE OF CONTENTS
- 2 -
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, 2023. 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 GlobeStar Therapeutics Corporation, a Wyoming corporation and its subsidiaries unless the context specifically indicates otherwise.
- 3 -
PART I — FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
GLOBESTAR THERAPEUTICS CORPORATION
CONSOLIDATED BALANCE SHEETS
June 30, | September 30, | ||||||
2024 | 2023 | ||||||
(Unaudited) | |||||||
CURRENT ASSETS | |||||||
Cash and cash equivalents | $ | $ | |||||
Prepaid expenses | |||||||
Total current assets | |||||||
TOTAL ASSETS | $ | $ | |||||
LIABILITIES AND STOCKHOLDERS' DEFICIT | |||||||
Current Liabilities | |||||||
Accounts payable and accrued liabilities | $ | $ | |||||
Accounts payable to related party | |||||||
Related party advances | |||||||
Advances payable | |||||||
Note payable | |||||||
Current portion of convertible notes payable, net of discount of $ |
|||||||
Accrued interest payable | |||||||
Total current liabilities | |||||||
TOTAL LIABILITIES | |||||||
COMMITMENTS AND CONTINGENCIES | |||||||
STOCKHOLDERS' DEFICIT | |||||||
Common stock, $ | par value; and shares issued and outstanding at June 30, 2024 and September 30, 2023, respectively|||||||
Preferred stock; | shares authorized:|||||||
Series A Preferred Stock, $ | par value; shares issued and outstanding at June 30, 2024 and September 30, 2023, respectively|||||||
Series D Preferred Stock, $ | par value; shares issued and outstanding at June 30, 2024 and September 30, 2023, respectively|||||||
Series E Preferred Stock, $ | par value; shares issued and outstanding at June 30, 2024 and September 30, 2023, respectively|||||||
Series F Preferred Stock; $ | par value; shares issued and outstanding at June 30, 2024 and September 30, 2023|||||||
Additional paid-in capital | |||||||
Stock payable, consisting of | shares to be issued at June 30, 2024 and September 30, 2023, respectively|||||||
Accumulated deficit | ( |
) | ( |
) | |||
TOTAL STOCKHOLDERS' DEFICIT | ( |
) | ( |
) | |||
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ | $ |
The accompanying footnotes are an integral part of these unaudited consolidated financial statements.
- 4 -
GLOBESTAR THERAPEUTICS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended | Nine Months Ended | ||||||||||||
June 30, | June 30, | ||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||
OPERATING EXPENSES | |||||||||||||
General and administrative expenses | |||||||||||||
Total operating expenses | |||||||||||||
LOSS FROM OPERATIONS | ( |
) | ( |
) | ( |
) | ( |
) | |||||
OTHER INCOME (EXPENSE) | |||||||||||||
Gain (loss) on settlement of liabilities, related party | |||||||||||||
Interest expense | ( |
) | ( |
) | ( |
) | ( |
) | |||||
Total other expense | ( |
) | ( |
) | ( |
) | ( |
) | |||||
Net Loss | ( |
) | ( |
) | ( |
) | ( |
) | |||||
Deemed dividend | ( |
) | |||||||||||
Net loss attributable to common shareholders | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | |
Net loss per share available to common shareholders | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | |
Weighted average shares outstanding - basic and diluted |
The accompanying footnotes are an integral part of these unaudited consolidated financial statements.
- 5 -
GLOBESTAR THERAPEUTICS CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
(UNAUDITED)
Original | |||||||||||||||||||||||||||||||||
Series D | Series E | Series F | Additional | Total | |||||||||||||||||||||||||||||
Common Stock | Preferred Stock | Preferred Stock | Preferred Stock | Paid-in | Stock | Accumulated | Equity | ||||||||||||||||||||||||||
Shares | Par | Shares | Amount | Shares | Amount | Shares | Amount | Capital | Payable | Deficit | (Deficit) | ||||||||||||||||||||||
Balance, September 30, 2022 |
$ | $ | $ | $ | $ | $ | $ | ( |
) | $ | ( |
) | |||||||||||||||||||||
Common stock subscribed for cash proceeds | — | — | — | — | |||||||||||||||||||||||||||||
Conversion of Series G Preferred Stock to common | |||||||||||||||||||||||||||||||||
Stock-based compensation, related parties | — | — | — | — | |||||||||||||||||||||||||||||
Net loss for the three months ended December 31, 2022 | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||
Balance, December 31, 2022 |
$ | $ | $ | $ | $ | $ | $ | ( |
) | $ | ( |
) | |||||||||||||||||||||
Common stock subscribed for cash proceeds | — | — | — | — | |||||||||||||||||||||||||||||
Conversion of Series G Preferred Stock to common | |||||||||||||||||||||||||||||||||
Common stock issued for the conversion of debt | |||||||||||||||||||||||||||||||||
Stock-based compensation, related parties | — | — | — | — | |||||||||||||||||||||||||||||
Net loss for the three months ended March 31, 2023 | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||
Balance, March 31, 2023 |
$ | $ | $ | $ | $ | $ | $ | ( |
) | $ | ( |
) | |||||||||||||||||||||
Common stock subscribed for cash proceeds | — | — | — | — | |||||||||||||||||||||||||||||
Conversion of Series G Preferred Stock to common | |||||||||||||||||||||||||||||||||
Common stock issued for stock payable | ( |
) | |||||||||||||||||||||||||||||||
Common stock issued for settlement of liability | |||||||||||||||||||||||||||||||||
Stock-based compensation | |||||||||||||||||||||||||||||||||
Stock-based compensation, related parties | — | — | — | — | |||||||||||||||||||||||||||||
Net loss for the three months ended June 30, 2023 | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||
Balance, June 30, 2023 |
$ | $ | $ | $ | $ | $ | $ | ( |
) | $ | ( |
) |
- continued -
- 6 -
Original | |||||||||||||||||||||||||||||||||
Series D | Series E | Series F | Additional | Total | |||||||||||||||||||||||||||||
Common Stock | Preferred Stock | Preferred Stock | Preferred Stock | Paid-in | Stock | Accumulated | Equity | ||||||||||||||||||||||||||
Shares | Par | Shares | Amount | Shares | Amount | Shares | Amount | Capital | Payable | Deficit | (Deficit) | ||||||||||||||||||||||
Balance, September 30, 2023 |
$ | $ | $ | $ | $ | $ | $ | ( |
) | $ | ( |
) | |||||||||||||||||||||
Exercise of warrants | ( |
) | |||||||||||||||||||||||||||||||
Common stock issued for conversion of notes payable and accrued interest | ( |
||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||
Stock-based compensation, related parties | — | — | — | — | |||||||||||||||||||||||||||||
Deemed dividend | — | — | — | — | ( |
) | |||||||||||||||||||||||||||
Net loss for the three months ended December 31, 2023 | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||
Balance, December 31, 2023 |
$ | $ | $ | $ | $ | $ | $ | ( |
) | $ | ( |
) | |||||||||||||||||||||
Exercise of warrants | ( |
) | |||||||||||||||||||||||||||||||
Common stock issued for conversion of notes payable and accrued interest | ( |
||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||
Stock-based compensation, related parties | — | — | — | — | |||||||||||||||||||||||||||||
Net loss for the three months ended March 31, 2024 | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||
Balance, March 31, 2024 |
$ | $ | $ | $ | $ | $ | $ | ( |
) | $ | ( |
) | |||||||||||||||||||||
Common stock issued for conversion of notes payable and accrued interest | ( |
) | |||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||
Stock-based compensation, related parties | — | — | — | — | |||||||||||||||||||||||||||||
Net loss for the three months ended June 30, 2024 | — | — | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||
Balance, June 30, 2024 |
$ | $ | $ | $ | $ | $ | $ | ( |
) | $ | ( |
) |
The accompanying footnotes are an integral part of these unaudited consolidated financial statements.
- 7 -
GLOBESTAR THERAPEUTICS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine Months Ended | |||||||
June 30, | |||||||
2024 | 2023 | ||||||
CASH FLOW FROM OPERATING ACTIVITIES: | |||||||
Net loss | $ | ( |
) | $ | ( |
) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
Stock compensation | |||||||
Stock compensation, related parties | |||||||
Amortization of discount on convertible note payable | |||||||
(Gain) Loss on settlement of liabilities | ( |
) | |||||
Loss on conversion of preferred stock liability | |||||||
Changes in operating assets and liabilities | |||||||
Prepaid expenses | |||||||
Accounts payable and accrued liabilities | |||||||
Accounts payable and accrued liabilities to related party | |||||||
Accrued interest payable | |||||||
NET CASH USED IN OPERATING ACTIVITIES | ( |
) | ( |
) | |||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||
Proceeds from sale of Series G Preferred Stock | |||||||
Proceeds from convertible note payable | |||||||
Proceeds from advances | |||||||
Proceeds from related party advances | |||||||
Repayment of related party advances | ( |
) | ( |
) | |||
Proceeds from common stock subscribed and exercise of warrants | |||||||
NET CASH PROVIDED BY FINANCING ACTIVITIES | |||||||
NET CHANGE IN CASH | ( |
) | |||||
Cash at beginning of period | |||||||
Cash at end of period | $ | $ | |||||
Cash paid during the period for: | |||||||
Interest | $ | $ | |||||
Taxes | $ | $ | |||||
Noncash investing and financing transactions: | |||||||
Conversion of Series G preferred stock and accrued interest | $ | $ | |||||
Common stock issued for the conversion of debt | $ | $ | |||||
Expenses paid on the Company's behalf for subscription agreement | $ | $ | |||||
Common stock issued for stock payable | $ | $ | |||||
Deemed dividend | $ | $ | |||||
Stock payable for prepaid expense | $ | $ | |||||
Expenses paid on the Company's behalf | $ | $ |
The accompanying footnotes are an integral part of these unaudited consolidated financial statements.
- 8 -
GLOBESTAR THERAPEUTICS CORPORATION
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2024
(Unaudited)
Note 1. General Organization and Business
GlobeStar Therapeutics Corporation (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, 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 because it is no longer a Nevada corporation.
The Company is developing an expanded platform of products that include addition of treatment for Multiple Sclerosis and other neurodegenerative diseases. The potential pharmaceutical products related to treatment for multiple sclerosis are licensed to the Company through the worldwide licensing agreement described in Note 6.
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 nine months ended June 30, 2024, the Company had a net loss of
$
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, 2023 which are included on our Form 10-K filed on January 19, 2024. 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 nine months ended June 30, 2024 are not necessarily indicative of the results to be expected for the full fiscal year ending September 30, 2024.
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 and Advances
Convertible notes payable consisted of the following at June 30, 2024 and September 30, 2023:
June 30, 2024 |
September 30, 2023 |
|||||||
Convertible note dated |
$ | $ | ||||||
Convertible note dated |
||||||||
Convertible note dated |
||||||||
Total convertible notes payable | ||||||||
Unamortized discount | ( |
) | ( |
) | ||||
Total current convertible notes payable, net of discount | $ | $ |
All principal along with accrued interest is payable
on the maturity date.
On June 6, 2024, the Company entered into a convertible
promissory note with Educational Group, LLC (“Educational Group”). Pursuant to the terms of the agreement, the Company issued
a convertible promissory note (the “June 2024 Note”) to Educational Group in the aggregate principal amount of $
On May 10, 2023, the Company entered into a Securities
Purchase Agreement (the “May 2023 Securities Purchase Agreement”) with 1800 Diagonal Lending LLC (“1800 Diagonal”).
Pursuant to the terms of the May 2023 Securities Purchase Agreement, the Company issued a convertible promissory note (the “May
2023 Note”) to 1800 Diagonal in the aggregate principal amount of $
On July 3, 2023, the Company entered into a Securities
Purchase Agreement (the “July 2023 Securities Purchase Agreement”) with 1800 Diagonal Lending LLC (“1800 Diagonal”).
Pursuant to the terms of the July 2023 Securities Purchase Agreement, the Company issued a convertible promissory note (the “July
2023 Note”) to 1800 Diagonal in the aggregate principal amount of $
On November 1, 2023, the Company entered into a Securities
Purchase Agreement (the “November 2023 Securities Purchase Agreement”) with 1800 Diagonal Lending LLC (“1800 Diagonal”).
Pursuant to the terms of the November 2023 Securities Purchase Agreement, the Company issued a convertible promissory note (the “November
2023 Note”) to 1800 Diagonal in the aggregate principal amount of $
As of June 30, 2024 and September 30, 2023, accrued
interest on convertible notes payable was $
Conversions to Common Stock
During the nine months ended June 30, 2024, the
holders of the May 2023 convertible note payable elected to convert principal of $
During the nine months June 30, 2024, the holder of
the July 3, 2023 convertible note was issued
During the nine months ended June 30, 2024, the holder
of the November 1, 2023 convertible note was issued
Advances
As of June 30, 2024 and September 30, 2023, the
Company had non-interest bearing advances payable to third parties of $
Note 4. Related Party Transactions
As of June 30, 2024 and September 30, 2023, the
Company owed $
During the six months ended March 31, 2024 and
2023, the Company’s CEO paid expenses of $
In February 2022, the Company entered into an amended
and restatement employment agreement with Jim Katzaroff, the CEO. Mr. Katzaroff is entitled to an annual salary of $
The Company awarded Mr. Katzaroff a total of
Mr. Katzaroff will also receive an activity fee of 3% of gross revenues related to activities including securing a variety of vendor, sales or advertising relationships, or any new revenue generating activity. If such activity is a cost saving initiative instead of revenue generating, Mr. Katzaroff will receive 10% of the cost savings. As of June 30, 2024, no amounts have been earned or paid.
On September 26, 2023, the Company entered into an
agreement with SMI HealthCare LLC (“SMIHC”) to manage an initial clinical trial, regulatory filings, intellectual property
rights filings, manufacturing, sales and distribution in India, Southeast Asia, Africa, and the Middle East, excluding Israel and Iraq,
and for government and private aid organizations, for the Company's patented Multiple Sclerosis treatment. The agreement with SMIHC was
approved by the parties’ respective boards of directors. Implementation of the first phase is subject to the Company arranging financing.
The first phase includes formation of the Company and SMIHC subsidiaries in India, the clinical trial, regulatory and intellectual property
rights filings in India, identifying manufacturers, and planning for the commercial launch in India and countries in the region that accept
Drug Controller General of India (“DCGI”) approvals. Implementation of the second phase is expected to commence approximately
nine months later, and is subject to receipt of DCGI marketing approval and the Company arranging financing. The second phase may continue
for the duration of patent validity, and consists initially of sales, marketing and distribution in India and thereafter, countries in
SMIHC’s territory that will permit sales and distribution based upon DCGI approval. After proof of market in those countries, the
intention is to seek regulatory approvals elsewhere in SMIHC’s territory in order to expand the sales and distribution of the Company’s
MS products.
SMIHC is an affiliate of SMI Group LLC, a privately-held Los Angeles-based company. Kevin Spivak, a shareholder of the Company and consultant is the chairman of SMI Group though he did not advise the Company on this transaction and has waived fees payable to an SMI company for introducing SMIHC to the Company.
On September 19, 2023, the Company entered into a
supplement to employment agreement with Jim Katzaroff, the CEO. For Mr. Katzaroff’s contribution to the SMIHC transaction, he will
be paid the following
- 12 -
Note 5. Stockholders’ deficit
Preferred Stock
Our authorized preferred stock consists of
shares of $ par value preferred stock.
Series
A Preferred Stock – Our board of directors has designated up to
shares of Series A Preferred Stock. The Series A Preferred Stock has a liquidation value of $
per share. The initial number issued is
with additional shares to be issued as a dividend not to exceed a total of
shares. The rank of the Series A is prior to all common and preferred shares. In addition, the Series A Preferred Stock retains
protective provisions to maintain their seniority with respect to liquidation or dissolution. The Series A Preferred Stock holds no
voting rights and earns an
Series B Preferred Stock – Our
board of directors has designated up to shares of Series B Preferred Stock. The Series B Preferred Stock has a liquidation value
of $ per share. The holders of the Series B Preferred Stock are entitled to dividends of
Series C Preferred Stock – On September 12, 2017, our board of directors designated up to shares of Series C Preferred Stock with a liquidation value of $ per share. The holders of the Series C Preferred Stock have no voting rights. The Series C Preferred Stock is convertible at the option of the holder into shares of common stock at a rate of one share of common stock for each share of Series C Preferred Stock. The Series C Preferred Stock is redeemable at the option of the Company at a price of $ per share. The Series C Preferred Stock has been canceled, and there are shares of Series C Preferred Stock outstanding as of June 30, 2024 and September 30, 2023.
Series D Preferred Stock – On
September 21, 2017, our board of directors designated up to shares of Series D Preferred Stock with a liquidation value of $
per share. The holders of the Series D Preferred Stock have no voting rights.
Series E Preferred Stock – On
August 3, 2015, our board of directors designated shares of Series E Preferred stock. The Series E Preferred stock is subordinate
to our common stock. It does not receive dividends and does not participate in equity distributions.
At June 30, 2024 and September 30, 2023, there were
shares of Series E Preferred stock outstanding. Dividends, when, as and if declared by the Board of Directors, shall be paid out of funds at the time legally available for such purposes.
Series F Preferred Stock – On
September 21, 2017, our board of directors designated up to shares of Series F Preferred Stock with a liquidation value of $
per share. The holders of the Series F Preferred Stock have no voting rights.
Common Stock
The Company is authorized to issue an unlimited number of shares of common stock, with a par value of $
.
Stock payable
On March 7, 2024, the Company entered into a
consulting agreement with Valerian Capital, LLC to provide management consulting services through September 8, 2024. Pursuant to the agreement, the Company
shall issue Valerian Capital, LLC
On March 8, 2024, the Company entered into a
consulting agreement with Educational Group, LLC to provide business development and strategic consulting services through March 8,
2025. Pursuant to the agreement, the Company shall issue Educational Group, LLC
The Company recognized prepaid expense of $
Common Stock Warrants
In
February 2022, the Company entered into a consulting agreement with Spivak Management, Inc. (the “Consultant”). Under
the agreement, the Consultant will provide business strategy advice and introductions to the Company for a period of five years
unless mutually terminated sooner. The Consultant is also entitled to additional warrants in the event of the Company issuing
equity or equity equivalents in the future, with him receiving a number of warrants equal to 3% of future warrants issued, excluding
grants to officers. During the nine months ended June 30, 2024, a total of
Warrants | Weighted-Average Exercise Price Per Share |
Weighted-Average Term (Years) |
||||||||
Outstanding, September 30, 2023 | $ | |||||||||
Granted | ||||||||||
Exercised | ( |
) | ||||||||
Forfeited | ( |
) | ||||||||
Expired | ( |
) | ||||||||
Outstanding and exercisable, June 30, 2024 | $ |
The common shares issued under the warrant exercises above were issued below par value. As of June 30, 2024, the outstanding warrants had an expected remaining life of
years and have an intrinsic value of $ .
Common Stock Options
As discussed in Note 4, The Company awarded common
stock options to Mr. Katzaroff in connection with his amended and restated employment agreement. During the six months ended March
31, 2024, the Company estimated the fair value of the options to be $
Options | Weighted-Average Exercise Price Per Share |
|||||||
Outstanding, September 30, 2023 | $ | |||||||
Granted | ||||||||
Exercised | — | — | ||||||
Forfeited | — | — | ||||||
Expired | — | — | ||||||
Outstanding, June 30, 2024 | $ | |||||||
Exercisable, June 30, 2024 | $ |
The weighted average grant date fair value of the common stock options granted during the period was $
per share. As of June 30, 2024, the aggregate intrinsic value of options vested and outstanding were $ . As of June 30, 2024, the outstanding options had a weighted average remaining term of years.
Note 7. Commitments and Contingent Liabilities
In February
2022, the Company entered into a consulting agreement with Spivak Management, Inc. (the “Consultant”). Under the agreement,
the Consultant will provide business strategy advice and introductions to the Company for a period of five years unless mutually terminated
sooner. Concurrently, Kenin Spivak, who controls Spivak Management, Inc., entered into a stock purchase agreement with the Company to
purchase
The Consultant
may also receive a bonus in each calendar year of the agreement equal to the larger of any bonus awarded by the Board of Directors to
the Consultant or 50% of the largest bonus payable by the Company to anyone other than the Consultant. If the agreement is terminated
with one year of a change of control of the Company, the Consultant will be entitled to receive a payment equal to 2.99 times the larger
of the total compensation paid to the Consultant over the prior 12 month period or the average compensation paid or payable to the Consultant
over the prior three years. On September 19, 2023, the Company entered into a second supplement to consulting agreement. Pursuant to the
agreement, in In lieu of Base Fees accrued through September 2023 and interest on late payment thereof, the Company shall pay to the Consultant,
On August 10,
2023, the Company entered into a consulting agreement with Valerian Capital, LLC ( “Valerian”). Under the agreement, Valerian
will provide management consulting, business advisory, shareholder information and public relations to the Company for a period of six
months unless mutually terminated sooner.
Litigation
From time to time, the Company may be subject to routine litigation, claims, or disputes in the ordinary course of business. In the opinion of management, no pending or known threatened claims, actions or proceedings against the Company are expected to have a material adverse effect on the Company’s financial position, results of operations or cash flows. The Company cannot predict with certainty, however, the outcome or effect of any of the litigation or investigatory matters specifically described above or any other pending litigation or claims. There can be no assurance as to the ultimate outcome of any lawsuits and investigations.
Note 8. 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
● | |
● | |
● | |
● | |
● |
The Company owed $
On November 2, 2023, the Company entered into
a consulting agreement with Advanced Innovate Partners (“AIP”) under which AIP will provide
advice to GlobeStar and SMIHC on the global design, strategy and execution of clinical trials. Pursuant to the agreement, the Company
will pay the following
Note 9. Subsequent Events
On July 20, 2024, the Company was notified of an action against the Company related to incomplete Regulation D filings by the State of Washington Department of Financial Institutions Securities Division. The Company was assessed $30,000 in fines. The Company intends to vigorously defends against this action.
On September 27, 2024, the Board of Directors voted to no longer pursue its potential treatments for Multiple Sclerosis and other neurodegenerative diseases and pursue other potential business plans. The Company intends to terminate its license agreement with 7 to Stand.
On September 28, 2024, Steven Penderghast resigned as a member of the Board of Directors.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
GlobeStar Therapeutics Corporation (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, 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 because it is no longer a Nevada corporation.
We changed our name to GlobeStar Therapeutics Corporation on April 27, 2021 to better reflect our expanded platform of products that include addition of treatment for Multiple Sclerosis and other neurodegenerative diseases.
GlobeStar Therapeutics Corporation, based in Richland Washington, is a clinical stage Pharmaceutical Company introducing a patented formulation of previously approved drugs for the treatment of Multiple Sclerosis. GlobeStar Therapeutics owns the exclusive global license from the inventors, who are based in Italy. GlobeStar Therapeutics is initiating discussions with the FDA on clinical trial design in preparation for FDA submission and approval pathway.
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, SomaCeuticalsTM.
Professional Team
We have adopted a Medical Advisory Board and appointed medical doctors and medical professionals that have extensive education and hands on experience with pharmaceutical and nutraceutical solution for prevention and treatment of disease.
Management’s Plan to Attract Capital
In the near term, management will utilize equity and debt financing to complete assembling the professional and management team to commence the process for clinical trials in compliance with FDA protocol. 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 continue to 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 midterm, management will enhance its capital position with a public offering of equity securities to finance clinical trials and the necessary actions to obtain approval of worldwide marketing of our MS treatment.
In the long term, marketing the Company’s pharmaceutical and nutraceutical products will provide the necessary cash flow to support 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 capital to support near term and midterm business operations, and the ability of the Company to achieve adequate profitability and cash flows from operations to support its operations.
Corporate Governance
We have adopted codes and committees for governance of the corporation that include: (i) audit committee charter, (ii) written acknowledgement of code of ethics for directors and senior officers, (iii) compensation committee charter, (iv) confidential information policy, iv) corporate governance guidelines, (vi) executive committee charter, and (vii) nominating committee charter.
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 consolidated financial statements are prepared. We regularly review our accounting policies, and how they are applied and disclosed in our consolidated financial statements.
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While we believe that the historical experience, current trends and other factors considered support the preparation of our consolidated financial statements in conformity with GAAP, actual results could differ from our estimates and such differences could be material.
Recent Developments
On July 20, 2024, the Company was notified of an action against the Company related to incomplete Regulation D filings by the State of Washington Department of Financial Institutions Securities Division. The Company was assessed $30,000 in fines. The Company intends to vigorously defends against this action.
On September 27, 2024, the Board of Directors voted to no longer pursue its potential treatments for Multiple Sclerosis and other neurodegenerative diseases and pursue other potential business plans. The Company intends to terminate its license agreement with 7 to Stand.
On September 28, 2024, Steven Penderghast resigned as a member of the Board of Directors.
Results of Operations
Three Months Ended June 30, 2024 Compared to the Three Months Ended June 30, 2023
Revenue. We had no revenue for the three months ended June 30, 2024 and 2023.
Cost of goods sold. We had no cost of goods sold for the three months ended June 30, 2024 and 2023.
General and administrative expense. We recognized general and administrative expense of $193,357 for the three months ended June 30, 2024 compared to $1,279,283 for the comparable period of 2023. The decrease in general and administrative expense was primarily related to a decrease in stock compensation to officers and consultants.
Interest expense. We recognized interest expense of $4,304 for the three months ended June 30, 2024 compared to $9,970 for the comparable period of 2023. The $5,666 decrease was related to the conversion of convertible notes payable and accrued interest.
Net loss. For the reasons above, we recognized a net loss of $197,661 for the three months ended June 30, 2024 compared to $1,282,529 for the three months ended June 30, 2023.
Nine Months Ended June 30, 2024 Compared to the Nine Months Ended June 30, 2023
Revenue. We had no revenue for the nine months ended June 30, 2024 and 2023.
Cost of goods sold. We had no cost of goods sold for the nine months ended June 30, 2024 and 2023.
General and administrative expense. We recognized general and administrative expense of $516,811 for the nine months ended June 30, 2024 compared to $1,576,583 for the comparable period of 2023. The decrease in general and administrative expense was primarily related to a decrease in stock compensation to officers and consultants.
Interest expense. We recognized interest expense of $19,571 for the nine months ended June 30, 2024 compared to $28,816 for the comparable period of 2023. The $9,045 decrease was related to the conversion of convertible notes payable and accrued interest.
Net loss. For the reasons above, we recognized a net loss of $536,382 for the nine months ended June 30, 2024 compared to $1,598,675 for the nine months ended June 30, 2023.
Liquidity and Capital Resources
At June 30, 2024, we had cash on hand of $41. The Company had negative working capital of $1,624,932. Net cash used in operating activities for the nine months ended June 30, 2024 was $75,588. Cash on hand is not 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 June 30, 2024.
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During the nine months ended June 30, 2024 the net loss of $536,382 was offset by the following non-cash operating expenses: stock compensation of $6,918, stock based compensation with related parties of $28,344, amortization of discount of $15,963 resulting in cash flows used in operating activities of $75,588. he Company had cash flows from financing activities of $75,629, primarily due to $50,000 in proceeds from convertible note payable, $35,000 in proceeds from common stock subscription and exercise of warrants, $2,500 proceeds from advances and $2,129 of related party advances, which were offset by $14,000 for the repayment of related party advances.
During the nine months ended June 30, 2023 the net loss of $1,598,675 was offset by the following non-cash operating expenses: stock compensation of $411,761, stock based compensation with related parties of $749,703, amortization of discount of $23,777 resulting in cash flows used in operating activities of $133,065. The Company had cash flows from financing activities of $126,700, primarily due to $73,000 from the proceeds of sale of Series G Preferred Stock, $40,500 in proceeds from the common stock subscribed and $3,700 of related party advances.
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.
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 June 30, 2024. Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of June 30, 2024, 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 June 30, 2024, 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 June 30, 2024, 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 do 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.
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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
We know of no material, active or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceedings or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered beneficial shareholder are an adverse party or has a material interest adverse to us.
ITEM 1A. RISK FACTORS
Not applicable to a smaller reporting company.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Set forth below is information regarding the securities sold during the quarter ended June 30, 2024 that 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 | |||||
May 6, 2024 | Common Stock | 46,838,407 | Conversion of note payable | Section 3(a)(9) of the Securities Act | $0.00043 | |||||
May 8, 2024 | Common Stock | 31,346,187 | Conversion of note payable | Section 3(a)(9) of the Securities Act | $0.00043 |
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.
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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 (4) |
31.2 | Rule 13(a)-14(a)/15(d)-14(a) Certification of principal financial officer (4) |
32.1 | Section 1350 Certification of principal executive officer (4) |
32.2 | Section 1350 Certification of principal financial officer (4) |
101.INS | Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. (5) |
101.SCH | Inline XBRL Taxonomy Extension Schema Document (5) |
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document (5) |
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document (5) |
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document (5) |
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) (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.
GlobeStar Therapeutics Corporation | |
Date: October 4, 2024 | By: /s/ James C. Katzaroff |
James C. Katzaroff | |
Chief Executive Officer, President, Secretary, Principal Executive Officer and Director | |
Date: October 4, 2024 | By: /s/ Robert Chicoski |
Robert Chicoski | |
Chief Financial Officer, Treasurer, Secretary, Principal Financial and Accounting Officer |
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Exhibit 31.1
RULE 13A-14(A)/15D-14(A) CERTIFICATION
I, James C. Katzaroff, certify that:
1. I have reviewed this quarterly report on Form 10-Q for the period ended June 30, 2024 of GlobeStar Therapeutics Corporation.
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15-d-15(f)) for the registrant and have:
a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: October 4, 2024 | By: /s/ James C. Katzaroff |
James C. Katzaroff | |
Chief Executive Officer |
Exhibit 31.2
RULE 13A-14(A)/15D-14(A) CERTIFICATION
I, Robert Chicoski, certify that:
1. I have reviewed this quarterly report on Form 10-Q for the period ended June 30, 2024 of GlobeStar Therapeutics Corporation.
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15-d-15(f)) for the registrant and have:
a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: October 4, 2024 | By: /s/ Robert Chicoski |
Robert Chicoski | |
Chief Financial Officer |
Exhibit 32.1
SECTION 1350 CERTIFICATION
In connection with the quarterly report of GlobeStar Therapeutics Corporation (the “Company”) on Form 10-Q for the period ended June 30, 2024 as filed with the Securities and Exchange Commission (the “Report”), I, James C. Katzaroff, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. SS. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
Date: October 4, 2024 | By: /s/ James C. Katzaroff |
James C. Katzaroff | |
Chief Executive Officer |
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
Exhibit 32.2
SECTION 1350 CERTIFICATION
In connection with the quarterly report of GlobeStar Therapeutics Corporation (the “Company”) on Form 10-Q for the period ended June 30, 2024 as filed with the Securities and Exchange Commission (the “Report”), I, Robert Chicoski, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. SS. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
Date: October 4, 2024 | By: /s/ Robert Chicoski |
Robert Chicoski | |
Chief Financial Officer |
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
|
OPERATING EXPENSES | ||||
General and administrative expenses | $ 193,357 | $ 1,279,283 | $ 516,811 | $ 1,576,583 |
Total operating expenses | 193,357 | 1,279,283 | 516,811 | 1,576,583 |
LOSS FROM OPERATIONS | (193,357) | (1,279,283) | (516,811) | (1,576,583) |
OTHER INCOME (EXPENSE) | ||||
Gain (loss) on settlement of liabilities, related party | 6,724 | 6,724 | ||
Interest expense | (4,304) | (9,970) | (19,571) | (28,816) |
Total other expense | (4,304) | (3,246) | (19,571) | (22,092) |
Net Loss | (197,661) | (1,282,529) | (536,382) | (1,598,675) |
Deemed dividend | (32,341) | |||
Net loss attributable to common shareholders | $ (197,661) | $ (1,282,529) | $ (568,723) | $ (1,598,675) |
Net loss per share available to common shareholders | $ (0.00) | $ (0.00) | $ (0.00) | $ (0.00) |
Weighted average shares outstanding - basic and diluted | 1,208,971,891 | 843,524,583 | 1,112,962,113 | 790,556,670 |
General Organization and Business |
9 Months Ended |
---|---|
Jun. 30, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
General Organization and Business | Note 1. General Organization and Business
GlobeStar Therapeutics Corporation (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, 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 because it is no longer a Nevada corporation.
The Company is developing an expanded platform of products that include addition of treatment for Multiple Sclerosis and other neurodegenerative diseases. The potential pharmaceutical products related to treatment for multiple sclerosis are licensed to the Company through the worldwide licensing agreement described in Note 6. |
Going Concern and Summary of Significant Accounting Policies |
9 Months Ended |
---|---|
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
Going Concern and Summary of Significant Accounting Policies | 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 nine months ended June 30, 2024, the Company had a net loss of $536,382 and cash flow used in operating activities of $75,588. As of June 30, 2024, the Company had negative working capital of $1,624,932. Management does not anticipate having positive cash flow from operations in the near future. The Company has no 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, 2023 which are included on our Form 10-K filed on January 19, 2024. 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 nine months ended June 30, 2024 are not necessarily indicative of the results to be expected for the full fiscal year ending September 30, 2024.
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. |
Convertible Notes Payable and Advances |
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Convertible Notes Payable and Advances | Note 3. Convertible Notes Payable and Advances
Convertible notes payable consisted of the following at June 30, 2024 and September 30, 2023:
All principal along with accrued interest is payable on the maturity date. The notes are convertible into common stock at the option of the holder. The holder of the notes cannot convert the notes into shares of common stock if that conversion would result in the holder owning more than 4.9% of the outstanding stock of the Company.
On June 6, 2024, the Company entered into a convertible promissory note with Educational Group, LLC (“Educational Group”). Pursuant to the terms of the agreement, the Company issued a convertible promissory note (the “June 2024 Note”) to Educational Group in the aggregate principal amount of $27,500. The June 2024 Note bears interest at 10%, with an Original Issue Discount of $2,500 and matures on June 6, 2025. Pursuant to the terms of the June 2024 Note, the outstanding principal and accrued interest on the note shall be convertible from issuance into shares of the Company’s common stock at conversion price of $0.00017.
On May 10, 2023, the Company entered into a Securities Purchase Agreement (the “May 2023 Securities Purchase Agreement”) with 1800 Diagonal Lending LLC (“1800 Diagonal”). Pursuant to the terms of the May 2023 Securities Purchase Agreement, the Company issued a convertible promissory note (the “May 2023 Note”) to 1800 Diagonal in the aggregate principal amount of $21,300 with the Company receiving $15,000 in cash proceeds. The May 2023 Note bears interest at 12%, with a 22% rate in the event of default, with an Original Issue Discount of $1,050 and matures on May 10, 2024. Pursuant to the terms of the May 2023 Note, the outstanding principal and accrued interest on the note shall be convertible beginning six months from issuance into shares of the Company’s common stock at 61% of the lowest trading price of the Company’s common stock during the 20 days prior to conversion. The Company recognized $6,300 of discount and deferred finance costs and amortized $3,838 during the six months ended March 31, 2024. The conversion option on the note payable was not bifurcated as a derivative under ASC 815 due to sufficient authorized shares being available to settle the conversion feature.
On July 3, 2023, the Company entered into a Securities Purchase Agreement (the “July 2023 Securities Purchase Agreement”) with 1800 Diagonal Lending LLC (“1800 Diagonal”). Pursuant to the terms of the July 2023 Securities Purchase Agreement, the Company issued a convertible promissory note (the “July 2023 Note”) to 1800 Diagonal in the aggregate principal amount of $47,250 with the Company receiving $40,000 in cash proceeds. Effective July 3, 2023, the Company issued the July 2023 Note to 1800 Diagonal consistent with the terms of the July 2023 Securities Purchase Agreement. The July 2023 Note bears interest at 12%, with a 22% rate in the event of default, with an Original Issue Discount of $2,250 and matures on April. 15, 2024. Pursuant to the terms of the July 2023 Note, the outstanding principal and accrued interest on the note shall be convertible beginning six months from issuance into shares of the Company’s common stock at 61% of the lowest trading price of the Company’s common stock during the 20 days prior to conversion. The Company recognized $7,250 of discount and deferred finance costs and amortized $5,002 during the six months ended March 31, 2024. The conversion option on the note payable was not bifurcated as a derivative under ASC 815 due to sufficient authorized shares being available to settle the conversion feature.
On November 1, 2023, the Company entered into a Securities Purchase Agreement (the “November 2023 Securities Purchase Agreement”) with 1800 Diagonal Lending LLC (“1800 Diagonal”). Pursuant to the terms of the November 2023 Securities Purchase Agreement, the Company issued a convertible promissory note (the “November 2023 Note”) to 1800 Diagonal in the aggregate principal amount of $31,500 with the Company receiving $25,000 in cash proceeds. Effective November 1, 2023, the Company issued the November 2023 Note to 1800 Diagonal consistent with the terms of the November 2023 Securities Purchase Agreement. The November 2023 Note bears interest at 12%, with a 22% rate in the event of default, with an Original Issue Discount of $1,500 and matures on August 15, 2024. Pursuant to the terms of the November 2023 Note, the outstanding principal and accrued interest on the note shall be convertible beginning six months from issuance into shares of the Company’s common stock at 61% of the lowest trading price of the Company’s common stock during the 20 days prior to conversion. The Company recognized $6,500 of discount and deferred finance costs and amortized $3,408 during the six months ended March 31, 2024. The conversion option on the note payable was not bifurcated as a derivative under ASC 815 due to sufficient authorized shares being available to settle the conversion feature.
As of June 30, 2024 and September 30, 2023, accrued interest on convertible notes payable was $222,973 and $225,363, respectively.
Conversions to Common Stock
During the nine months ended June 30, 2024, the holders of the May 2023 convertible note payable elected to convert principal of $21,300 and $1,278 of accrued interest into shares of common stock. The conversion was in accordance with the terms of the agreement and no gain or loss was recognized. The shares issued for these conversions were issued below par value.
During the nine months June 30, 2024, the holder of the July 3, 2023 convertible note was issued 47,250 of principal and $2,835 of accrued interest. The conversion was in accordance with the terms of the agreement and no gain or loss was recognized. The shares issued for these conversions were issued below par value. shares of common stock upon conversion of all $
During the nine months ended June 30, 2024, the holder of the November 1, 2023 convertible note was issued 31,500 of principal and $1,885 of accrued interest. The conversion was in accordance with the terms of the agreement and no gain or loss was recognized. The shares issued for these conversions were issued below par value. shares of common stock upon conversion of all $
Advances
As of June 30, 2024 and September 30, 2023, the Company had non-interest bearing advances payable to third parties of $62,150 and $59,650, respectively. These advances are payable on demand. |
Related Party Transactions |
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Jun. 30, 2024 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 4. Related Party Transactions
As of June 30, 2024 and September 30, 2023, the Company owed $659,771 and $454,665 to officers of the Company for compensation which are recorded as accounts payable related party.
During the six months ended March 31, 2024 and 2023, the Company’s CEO paid expenses of $9,000 and $0 and was repaid $9,000 and $0, respectively. Additionally, during the six months ended March 31, 2024 and 2023, the Company received short term, unsecured, non-interest bearing advances from the Company’s CEO and CFO totaling $1,684 and $700, respectively. As of March 31, 2024 and September 30, 2023, the Company owed $7,979 and $6,295 on these related party advances, respectively.
In February 2022, the Company entered into an amended and restatement employment agreement with Jim Katzaroff, the CEO. Mr. Katzaroff is entitled to an annual salary of $180,000 and a bonus as determined by the Board of Directors. Mr. Katzaroff may elect to receive payment in shares of stock based on the average of the three lowest trading prices for the 15 days prior to election of payment in stock. Further, in the event of a change of control of the Company, Mr. Katzaroff is entitled to a payment equal to 2.99 multiplied by the larger of the total compensation paid to Mr. Katzaroff over the prior 12-month period or the average compensation paid or payable to the Consultant over the prior years.
The Company awarded Mr. Katzaroff a total of 0.009 per share, an exercise term of years. The options vest 50% immediately, and the remainder on monthly basis over two years. Mr. Katzaroff is also entitled to additional options in the event of the Company issuing equity or equity equivalents in the future, with him receiving an amount of options equal to 3% of future options or warrants issued, excluding grants to officers. The exercise price of these additional options will be 110% of the price per equity equivalent issued after the agreement date. During the six months ended March 31, 2024, a total of 5,004,049 additional options were issued to Mr. Katzaroff pursuant to the agreement terms. The total fair value of these option grants at issuance was $5,838. During the nine months ended June 30, 2024 and 2023, the Company recognized $28,344 and $53,409 of stock-based compensation, related to outstanding stock options under this agreement, respectively. At June 30, 2024, the Company had $6,848 of unrecognized expense related to options. common stock options with an exercise price of $
Additionally, Mr. Katzaroff will earn a fee related to any strategic transaction, as defined in the agreement, including but not limited to acquisitions, divestitures, partnerships or joint ventures, of at least 2% for any transactions not introduced by Mr. Katzaroff, or 4% for any introduced by Mr. Katzaroff of up to $20,000,000, and an additional 0.75% - 3.5% for amounts above that threshold. As of June 30, 2023, no amounts have been earned or paid.
Mr. Katzaroff will also receive an activity fee of 3% of gross revenues related to activities including securing a variety of vendor, sales or advertising relationships, or any new revenue generating activity. If such activity is a cost saving initiative instead of revenue generating, Mr. Katzaroff will receive 10% of the cost savings. As of June 30, 2024, no amounts have been earned or paid.
On September 26, 2023, the Company entered into an agreement with SMI HealthCare LLC (“SMIHC”) to manage an initial clinical trial, regulatory filings, intellectual property rights filings, manufacturing, sales and distribution in India, Southeast Asia, Africa, and the Middle East, excluding Israel and Iraq, and for government and private aid organizations, for the Company's patented Multiple Sclerosis treatment. The agreement with SMIHC was approved by the parties’ respective boards of directors. Implementation of the first phase is subject to the Company arranging financing. The first phase includes formation of the Company and SMIHC subsidiaries in India, the clinical trial, regulatory and intellectual property rights filings in India, identifying manufacturers, and planning for the commercial launch in India and countries in the region that accept Drug Controller General of India (“DCGI”) approvals. Implementation of the second phase is expected to commence approximately nine months later, and is subject to receipt of DCGI marketing approval and the Company arranging financing. The second phase may continue for the duration of patent validity, and consists initially of sales, marketing and distribution in India and thereafter, countries in SMIHC’s territory that will permit sales and distribution based upon DCGI approval. After proof of market in those countries, the intention is to seek regulatory approvals elsewhere in SMIHC’s territory in order to expand the sales and distribution of the Company’s MS products. Pursuant to with SMIHC, the Company will receive a 5% royalty on any sales under the agreement by the company formed in India under this agreement, and 50% of any sublicense revenue from the India company formed under the agreement. The Company will pay the following (i) initial fees of between $15,000 - $22,500, and monthly fees of between $5,000 and $12,500 per month for Phase A (ii) monthly fees of $12,500, increase after six months to $17,500 per month, and to $25,000 per month after one year. The fee will increase by 5% per year thereafter for Phase B (iii) an initial management fee of $15,000 upon certain milestones and monthly management fee of $5,000 per month thereafter.
SMIHC is an affiliate of SMI Group LLC, a privately-held Los Angeles-based company. Kevin Spivak, a shareholder of the Company and consultant is the chairman of SMI Group though he did not advise the Company on this transaction and has waived fees payable to an SMI company for introducing SMIHC to the Company.
On September 19, 2023, the Company entered into a supplement to employment agreement with Jim Katzaroff, the CEO. For Mr. Katzaroff’s contribution to the SMIHC transaction, he will be paid the following (i) during the term of the agreement with SMIHC, a fee of 3% of any SMIHC generated revenue and (ii) not less than ¼ of the participation in Pro Forma Profits Before Tax to be payable to the Company at its senior executive pursuant to the SMIHC translation. Additionally, for Mr. Katzaroff’s contribution to the AIP transaction, he will be paid the following (i) if the Company invests in AIP, or merges with AIP, Mr. Katzaroff will receive a fee ranging from 1.5% - 4% during on the aggregate consideration of the AIP transaction and (ii) if AIP generated any revenue for the Company by reason of introductions, sales agency, distribution or other similar activities, he will receive a 3% fee for the term of the AIP transaction. |
Stockholders’ deficit |
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Stockholders’ deficit | Note 5. Stockholders’ deficit
Preferred Stock
Our authorized preferred stock consists of shares of $ par value preferred stock.
Series A Preferred Stock – Our board of directors has designated up to shares of Series A Preferred Stock. The Series A Preferred Stock has a liquidation value of $ per share. The initial number issued is with additional shares to be issued as a dividend not to exceed a total of shares. The rank of the Series A is prior to all common and preferred shares. In addition, the Series A Preferred Stock retains protective provisions to maintain their seniority with respect to liquidation or dissolution. The Series A Preferred Stock holds no voting rights and earns an 8% per annum dividend, payable in additional shares of Series A Preferred Stock. At June 30, 2024 and September 30, 2023, there were shares of our Series A Preferred Stock outstanding, respectively.
Series B Preferred Stock – Our board of directors has designated up to shares of Series B Preferred Stock. The Series B Preferred Stock has a liquidation value of $ per share. The holders of the Series B Preferred Stock are entitled to dividends of 8% per year payable quarterly in cash or in shares of common stock at the option of the Company. The holders of the Series B Preferred Stock have no voting rights. The Series B Preferred Stock is redeemable at the option of the Company at a price of $ per share. At June 30, 2024 and September 30, 2023, there were shares of our Series B Preferred Stock outstanding.
Series C Preferred Stock – On September 12, 2017, our board of directors designated up to shares of Series C Preferred Stock with a liquidation value of $ per share. The holders of the Series C Preferred Stock have no voting rights. The Series C Preferred Stock is convertible at the option of the holder into shares of common stock at a rate of one share of common stock for each share of Series C Preferred Stock. The Series C Preferred Stock is redeemable at the option of the Company at a price of $ per share. The Series C Preferred Stock has been canceled, and there are shares of Series C Preferred Stock outstanding as of June 30, 2024 and September 30, 2023.
Series D Preferred Stock – On September 21, 2017, our board of directors designated up to shares of Series D Preferred Stock with a liquidation value of $ per share. The holders of the Series D Preferred Stock have no voting rights. The Series D Preferred Stock is convertible at the option of the holder into shares of common stock at a rate of $ The Series D Preferred Stock is not redeemable. In July 2023, the Company issued per share of common stock. shares to the holder of the Series D Preferred Stock for Full conversion of shares outstanding. At June 30, 2024 and September 30, 2023, there were shares of Series D Preferred Stock outstanding.
Series E Preferred Stock – On August 3, 2015, our board of directors designated shares of Series E Preferred stock. The Series E Preferred stock is subordinate to our common stock. It does not receive dividends and does not participate in equity distributions. The Series E Preferred stock retained 2/3 of the voting rights in the Company.
At June 30, 2024 and September 30, 2023, there were shares of Series E Preferred stock outstanding. Dividends, when, as and if declared by the Board of Directors, shall be paid out of funds at the time legally available for such purposes.
Series F Preferred Stock – On September 21, 2017, our board of directors designated up to shares of Series F Preferred Stock with a liquidation value of $ per share. The holders of the Series F Preferred Stock have no voting rights. The Series F Preferred Stock is convertible at the option of the holder into shares of common stock at a rate of $ The Series F Preferred Stock is not redeemable. At June 30, 2024 and September 30, 2023, per share of common stock. shares of the Series F Preferred Stock were issued and outstanding.
Common Stock
The Company is authorized to issue an unlimited number of shares of common stock, with a par value of $ .
Stock payable
On March 7, 2024, the Company entered into a consulting agreement with Valerian Capital, LLC to provide management consulting services through September 8, 2024. Pursuant to the agreement, the Company shall issue Valerian Capital, LLC 5,000. In March 2024, the Company received $5,000 of cash for the 50,000,000 shares of common stock. As of June 30, 2024, the common shares were not issued and were recorded in stock payable. shares of the Company’s common stock for a payment of $
On March 8, 2024, the Company entered into a consulting agreement with Educational Group, LLC to provide business development and strategic consulting services through March 8, 2025. Pursuant to the agreement, the Company shall issue Educational Group, LLC 5,000. In March 2024, the Company received $5,000 of cash for the 50,000,000 shares of common stock. As of June 30, 2024, the common shares were not issued and were recorded in stock payable. shares of the Company’s common stock for a payment of $
The Company recognized prepaid expense of $169,000 related to the difference between the fair value of the shares to be issued and the cash paid by the consultant. The prepaid expense will be amortized to stock-based compensation expense over the term of the agreements.
Common Stock Warrants
In February 2022, the Company entered into a consulting agreement with Spivak Management, Inc. (the “Consultant”). Under the agreement, the Consultant will provide business strategy advice and introductions to the Company for a period of five years unless mutually terminated sooner. The Consultant is also entitled to additional warrants in the event of the Company issuing equity or equity equivalents in the future, with him receiving a number of warrants equal to 3% of future warrants issued, excluding grants to officers. During the nine months ended June 30, 2024, a total of 7,349,588 additional warrants were granted to the Consultant pursuant to the agreement terms. The exercise price of these additional warrants will be 110% of the price per equity equivalent. The total fair value of these option grants at issuance was $7,358 using the follow range of assumptions in a Black-Scholes option price model volatility of % - %; 2) risk free rate of % - %; 3) dividend yield of % and 4) expected term of years. During the nine months ended June 30, 2024 the Company recognized $6,918, related to this agreement, respectively. At June 30, 2024, the Company had $12,120 of unrecognized expense related to warrants.
The common shares issued under the warrant exercises above were issued below par value. As of June 30, 2024, the outstanding warrants had an expected remaining life of years and have an intrinsic value of $ .
Common Stock Options
As discussed in Note 4, The Company awarded common stock options to Mr. Katzaroff in connection with his amended and restated employment agreement. During the six months ended March 31, 2024, the Company estimated the fair value of the options to be $5,838, using the following assumptions range: 1) volatility of % - %; 2) risk free rate of % - %; 3) dividend yield of % and 4) expected term of years. The Company recognized $28,344 of expense related to the fair value of options vesting during the nine months ended June 30, 2024. The Company expects to recognize an additional $9,562 of expense related to these options assuming all vest.
The weighted average grant date fair value of the common stock options granted during the period was $ per share. As of June 30, 2024, the aggregate intrinsic value of options vested and outstanding were $ . As of June 30, 2024, the outstanding options had a weighted average remaining term of years. |
Commitments and Contingent Liabilities |
9 Months Ended |
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Jun. 30, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingent Liabilities | Note 7. Commitments and Contingent Liabilities
In February 2022, the Company entered into a consulting agreement with Spivak Management, Inc. (the “Consultant”). Under the agreement, the Consultant will provide business strategy advice and introductions to the Company for a period of five years unless mutually terminated sooner. Concurrently, Kenin Spivak, who controls Spivak Management, Inc., entered into a stock purchase agreement with the Company to purchase 25,000 cash. The purchase and issuance of the shares was to be completed by June 30, 2022. The consultant will receive a fee of between 1% and 7% of any consideration from a strategic transaction the Company enters into, defined as any acquisition, divestiture, partnership, licensing arrangement or joint venture (“Strategic Transaction Fee”). Financing transactions are not considered strategic transactions for purposes of this agreement. The consultant will also be entitled to 5% of revenue from any business activity that the Company undertakes that is introduced by the Consultant. shares of common stock for $
The Consultant will be paid a signing bonus of $25,000 upon receipt by the Company of the $25,000 cash under the stock purchase agreement described above. The Consultant will also receive the larger of $12,500 per month, or 50% of the CEO’s fixed cash compensation under the amended employment agreement described in Note 4. The Consultant may elect to receive this payment in stock.
In July 2022, the consultant agreement and the stock purchase agreement were amended to reduce the subscription amount to $17,500. In August 2022, $17,500 was placed in escrow by Mr. Spivak for the Company’s Benefit, and the Company paid $17,500 to the Consultant from the escrow account. The shares owed to Mr. Spivak were not issued by June 30, 2023, and were issued in August 2023.
The Consultant may also receive a bonus in each calendar year of the agreement equal to the larger of any bonus awarded by the Board of Directors to the Consultant or 50% of the largest bonus payable by the Company to anyone other than the Consultant. If the agreement is terminated with one year of a change of control of the Company, the Consultant will be entitled to receive a payment equal to 2.99 times the larger of the total compensation paid to the Consultant over the prior 12 month period or the average compensation paid or payable to the Consultant over the prior three years. On September 19, 2023, the Company entered into a second supplement to consulting agreement. Pursuant to the agreement, in In lieu of Base Fees accrued through September 2023 and interest on late payment thereof, the Company shall pay to the Consultant, the sum of $300,000 in installments on and from the first to occur of either a financing or cumulative revenue of at least $1,000,000, the Company shall 15% of the financing or revenue to the Consultant, or if the Company pays its CEO compensation, the Company shall pay an equal amount to the Consultant. until the full $300,000 is paid in full. If the Company receives financing or cumulative revenue of at least $2,000,000, the Company shall pay 15% of that amount to the consultant, or if the Company pays compensation to its CEO of at least $150,000, the Company shall pay consultant an amount equal to 60% of such compensation. If a financing of at least $5,000,000 is received by the Company, the full $300,000 will be due and payable. The Company will continue to pay the Consultant a fee of $12,500 per month. The Company reclassified $250,000 of fee accrued in accounts payable owed to the Consultant and interest expense of $50,000 to a note payable. As of March 31, 2024 and September 30, 2023, the Company owed the consultant $412,000 and $337,500, which included accounts payable and accrued liabilities of $112,000 and $37,500 and notes payable of $300,000, respectively. In the event the Company invests in, mergers with or acquires AIP (as disclosed in Note 8), the Company will owe a Strategic Transaction Fee to the Consultant for that transaction. The Consultant is also entitled to 3.5% of any revenues generated by the Company from the AIP relationship.
On August 10, 2023, the Company entered into a consulting agreement with Valerian Capital, LLC ( “Valerian”). Under the agreement, Valerian will provide management consulting, business advisory, shareholder information and public relations to the Company for a period of six months unless mutually terminated sooner. Upon execution of the agreement, Valerian will purchase 33,333,333 shares of the Company’s stock for a total purchase price of $25,000 and have the option to purchase an additional 33,333,333 shares for $25,000 during the first 45 days of the agreement. Lastly, Valerian will have the right to purchase 66,000,000 warrants with an exercise price of $0.00075 for up to one year following the agreement. On October 30, 2023, the Company agreed to extend the exercise period of the 33,333,333 warrants to 150 days from the agreement date. As a result of this amendment to the warrant, the Company recognized a deemed dividend of $32,341 for the estimated incremental fair value of the warrants under the new terms. During the nine months ended June 30, 2024, the Company received $25,000 in cash proceeds for the exercise of 33,333,333 warrants previously issued to Valerian. As of June 30, 2024, the Company received $50,000 and issued 56,666,666 shares of common stock to Valerian.
Litigation
From time to time, the Company may be subject to routine litigation, claims, or disputes in the ordinary course of business. In the opinion of management, no pending or known threatened claims, actions or proceedings against the Company are expected to have a material adverse effect on the Company’s financial position, results of operations or cash flows. The Company cannot predict with certainty, however, the outcome or effect of any of the litigation or investigatory matters specifically described above or any other pending litigation or claims. There can be no assurance as to the ultimate outcome of any lawsuits and investigations. |
License Agreement |
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License Agreement | |||||||||||||||||||
License Agreement | Note 8. 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 shares of common stock to 7 to Stand upon completion of the following milestones:
The Company owed $50,000 of royalties and late fees under this agreement as of June 30, 2024 and $20,000 as of September 30, 2023.
On November 2, 2023, the Company entered into a consulting agreement with Advanced Innovate Partners (“AIP”) under which AIP will provide advice to GlobeStar and SMIHC on the global design, strategy and execution of clinical trials. Pursuant to the agreement, the Company will pay the following (i) AIP $5,000 per month during Phase A period, if the Company receives regulatory approval to manufacture, sell and distribute products in India or the United States within 60 days of the agreement (ii) AIP $6,000 per month during Phase B period (iii) AIP a sales commission of between 10% and 15% related to any customers, distributors or sales agents introduced to the Company by AIP and (iv) a commission of 4% of any proceeds from equity investments to the Company introduced by AIP, or 2% of any loan proceeds from lenders introduced by AIP. |
Subsequent Events |
9 Months Ended |
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Jun. 30, 2024 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 9. Subsequent Events
On July 20, 2024, the Company was notified of an action against the Company related to incomplete Regulation D filings by the State of Washington Department of Financial Institutions Securities Division. The Company was assessed $30,000 in fines. The Company intends to vigorously defends against this action.
On September 27, 2024, the Board of Directors voted to no longer pursue its potential treatments for Multiple Sclerosis and other neurodegenerative diseases and pursue other potential business plans. The Company intends to terminate its license agreement with 7 to Stand.
On September 28, 2024, Steven Penderghast resigned as a member of the Board of Directors. |
Going Concern and Summary of Significant Accounting Policies (Policies) |
9 Months Ended |
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Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
Interim Financial Statements | 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, 2023 which are included on our Form 10-K filed on January 19, 2024. 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 nine months ended June 30, 2024 are not necessarily indicative of the results to be expected for the full fiscal year ending September 30, 2024. |
Consolidated Financial Statements | 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 | 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. |
Convertible Notes Payable and Advances (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Convertible notes payable consisted of the following at June 30, 2024 and September 30, 2023: | Convertible notes payable consisted of the following at June 30, 2024 and September 30, 2023:
|
Stockholders’ deficit (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The following table summarizes the stock warrant activity for the nine ended June 30, 2024: |
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The following table summarizes the stock option activity for the nine months ended June 30, 2024: |
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Going Concern and Summary of Significant Accounting Policies (Details Narrative) - USD ($) |
3 Months Ended | 9 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Jun. 30, 2024 |
Mar. 31, 2024 |
Dec. 31, 2023 |
Jun. 30, 2023 |
Mar. 31, 2023 |
Dec. 31, 2022 |
Jun. 30, 2024 |
Jun. 30, 2023 |
|
Accounting Policies [Abstract] | ||||||||
Net loss | $ 197,661 | $ 174,962 | $ 163,759 | $ 1,282,529 | $ 150,237 | $ 165,909 | $ 536,382 | $ 1,598,675 |
Net cash provided by operating activities | 75,588 | $ 133,065 | ||||||
Working capital | $ 1,624,932 |
Convertible Notes Payable and Advances (Details Narrative) - USD ($) |
9 Months Ended | |||||
---|---|---|---|---|---|---|
Jun. 06, 2024 |
Nov. 01, 2023 |
Jul. 03, 2023 |
May 10, 2023 |
Jun. 30, 2024 |
Sep. 30, 2023 |
|
Short-Term Debt [Line Items] | ||||||
Debt Instrument conversion feature | The notes are convertible into common stock at the option of the holder. The holder of the notes cannot convert the notes into shares of common stock if that conversion would result in the holder owning more than 4.9% of the outstanding stock of the Company. | |||||
Debt discount | $ 1,877 | $ 8,840 | ||||
Conversion of stock description | Pursuant to the terms of the June 2024 Note, the outstanding principal and accrued interest on the note shall be convertible from issuance into shares of the Company’s common stock at conversion price of $0.00017. | Pursuant to the terms of the November 2023 Note, the outstanding principal and accrued interest on the note shall be convertible beginning six months from issuance into shares of the Company’s common stock at 61% of the lowest trading price of the Company’s common stock during the 20 days prior to conversion. | Pursuant to the terms of the July 2023 Note, the outstanding principal and accrued interest on the note shall be convertible beginning six months from issuance into shares of the Company’s common stock at 61% of the lowest trading price of the Company’s common stock during the 20 days prior to conversion. | Pursuant to the terms of the May 2023 Note, the outstanding principal and accrued interest on the note shall be convertible beginning six months from issuance into shares of the Company’s common stock at 61% of the lowest trading price of the Company’s common stock during the 20 days prior to conversion. | ||
Recognized of discount | $ 6,500 | $ 7,250 | $ 6,300 | |||
Deferred finance costs | 3,408 | 5,002 | 3,838 | |||
Accrued interest on convertible notes payable | 222,973 | 225,363 | ||||
Advance [Member] | ||||||
Short-Term Debt [Line Items] | ||||||
Non interest bearing advance | $ 62,150 | $ 59,650 | ||||
Convertible Note Date May 10 2023 [Member] | ||||||
Short-Term Debt [Line Items] | ||||||
Interest rate | 12.00% | |||||
Maturity date | May 10, 2024 | |||||
Note payable principal amount converted | $ 21,300 | |||||
Note payable accrued interest converted | $ 1,278 | |||||
Stock issued for conversion of note payable | 30,297,790 | |||||
Gain on conversion of debt | $ 0 | |||||
Convertible Note Date July 3, 2023 [Member] | ||||||
Short-Term Debt [Line Items] | ||||||
Interest rate | 12.00% | |||||
Maturity date | Apr. 15, 2024 | |||||
Note payable principal amount converted | $ 47,250 | |||||
Note payable accrued interest converted | $ 2,835 | |||||
Stock issued for conversion of note payable | 103,170,448 | |||||
Gain on conversion of debt | $ 0 | |||||
Convertible Note Date November 1,2023 [Member] | ||||||
Short-Term Debt [Line Items] | ||||||
Note payable principal amount converted | 31,500 | |||||
Note payable accrued interest converted | $ 1,885 | |||||
Stock issued for conversion of note payable | 78,184,594 | |||||
Gain on conversion of debt | $ 0 | |||||
Convertible Promissory Note [Member] | ||||||
Short-Term Debt [Line Items] | ||||||
Principal amount of convertible promissory issued | $ 27,500 | |||||
Interest rate | 10.00% | |||||
Debt discount | $ 2,500 | |||||
Maturity date | Jun. 06, 2025 | |||||
Purchase Agreement [Member] | ||||||
Short-Term Debt [Line Items] | ||||||
Principal amount of convertible promissory issued | $ 31,500 | $ 47,250 | $ 21,300 | |||
Interest rate | 12.00% | 12.00% | 12.00% | |||
Debt discount | $ 1,500 | $ 2,250 | $ 1,050 | |||
Maturity date | Aug. 15, 2024 | Apr. 15, 2024 | May 10, 2024 | |||
Cash proceeds | $ 25,000 | $ 40,000 | $ 15,000 |
Related Party Transactions (Details Narrative) - USD ($) |
1 Months Ended | 6 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|---|
Sep. 26, 2023 |
Sep. 19, 2023 |
Feb. 28, 2022 |
Mar. 31, 2024 |
Mar. 31, 2023 |
Jun. 30, 2024 |
Sep. 30, 2023 |
|
Related Party Transaction [Line Items] | |||||||
Accounts payable to related party | $ 659,771 | $ 454,665 | |||||
Expenses paid by CEO | $ 9,000 | $ 0 | |||||
Expenses repaid to CEO | 9,000 | 0 | |||||
Received short term, unsecured, non-interest bearing advances | 1,684 | $ 700 | |||||
Related party advances | $ 7,979 | $ 3,424 | $ 6,295 | ||||
Common stock, shares outstanding | 1,241,105,695 | 996,119,530 | |||||
Description of options | (i) during the term of the agreement with SMIHC, a fee of 3% of any SMIHC generated revenue and (ii) not less than ¼ of the participation in Pro Forma Profits Before Tax to be payable to the Company at its senior executive pursuant to the SMIHC translation. Additionally, for Mr. Katzaroff’s contribution to the AIP transaction, he will be paid the following (i) if the Company invests in AIP, or merges with AIP, Mr. Katzaroff will receive a fee ranging from 1.5% - 4% during on the aggregate consideration of the AIP transaction and (ii) if AIP generated any revenue for the Company by reason of introductions, sales agency, distribution or other similar activities, he will receive a 3% fee for the term of the AIP transaction. | ||||||
Royalty on any sales under the agreement | Pursuant to with SMIHC, the Company will receive a 5% royalty on any sales under the agreement by the company formed in India under this agreement, and 50% of any sublicense revenue from the India company formed under the agreement. The Company will pay the following (i) initial fees of between $15,000 - $22,500, and monthly fees of between $5,000 and $12,500 per month for Phase A (ii) monthly fees of $12,500, increase after six months to $17,500 per month, and to $25,000 per month after one year. The fee will increase by 5% per year thereafter for Phase B (iii) an initial management fee of $15,000 upon certain milestones and monthly management fee of $5,000 per month thereafter. | ||||||
Mr Katzaroff [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Description of additional options | Additionally, Mr. Katzaroff will earn a fee related to any strategic transaction, as defined in the agreement, including but not limited to acquisitions, divestitures, partnerships or joint ventures, of at least 2% for any transactions not introduced by Mr. Katzaroff, or 4% for any introduced by Mr. Katzaroff of up to $20,000,000, and an additional 0.75% - 3.5% for amounts above that threshold. As of June 30, 2023, no amounts have been earned or paid. | ||||||
Board of Directors Chairman [Member] | Mr Katzaroff [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Annual fees | $ 180,000 | ||||||
Chief Executive Officer [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Payable to consultant term | 3 years | ||||||
Common stock, shares outstanding | 35,000,000 | ||||||
Exercise price, per shares | $ 0.009 | ||||||
Excercise term | 5 years | ||||||
Description of options | The options vest 50% immediately, and the remainder on monthly basis over two years. Mr. Katzaroff is also entitled to additional options in the event of the Company issuing equity or equity equivalents in the future, with him receiving an amount of options equal to 3% of future options or warrants issued, excluding grants to officers. The exercise price of these additional options will be 110% of the price per equity equivalent issued after the agreement date. During the six months ended March 31, 2024, a total of 5,004,049 additional options were issued to Mr. Katzaroff pursuant to the agreement terms. The total fair value of these option grants at issuance was $5,838. During the nine months ended June 30, 2024 and 2023, the Company recognized $28,344 and $53,409 of stock-based compensation, related to outstanding stock options under this agreement, respectively. At June 30, 2024, the Company had $6,848 of unrecognized expense related to options. |
The following table summarizes the stock option activity for the nine months ended June 30, 2024: (Details) |
9 Months Ended |
---|---|
Jun. 30, 2024
$ / shares
shares
| |
Equity [Abstract] | |
Option outstanding, beginning | shares | 136,632,356 |
Option outstanding, per shares, beginning | $ / shares | $ 0.01 |
Granted | shares | 7,349,588 |
Granted | $ / shares | $ 0.001 |
Option outstanding, ending | shares | 143,981,944 |
Option outstanding, per shares, ending | $ / shares | $ 0.01 |
Exercisable, December 31, 2023 | shares | 139,232,158 |
Exercisable, per share, December 31, 2023 | $ / shares | $ 0.01 |
Commitments and Contingent Liabilities (Details Narrative) - USD ($) |
1 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|
Sep. 19, 2023 |
Aug. 10, 2023 |
Jul. 31, 2022 |
Feb. 28, 2022 |
Jun. 30, 2024 |
Sep. 30, 2023 |
Jul. 31, 2023 |
Aug. 31, 2022 |
|
Loss Contingencies [Line Items] | ||||||||
Stock issued during period | 6,000,000 | |||||||
Value of stock issued | $ 25,000 | |||||||
Description of commitment | The Consultant will be paid a signing bonus of $25,000 upon receipt by the Company of the $25,000 cash under the stock purchase agreement described above. The Consultant will also receive the larger of $12,500 per month, or 50% of the CEO’s fixed cash compensation under the amended employment agreement described in Note 4. The Consultant may elect to receive this payment in stock. | |||||||
Description of purchase agreement | In July 2022, the consultant agreement and the stock purchase agreement were amended to reduce the subscription amount to $17,500. | |||||||
Shares, issued under subscription agreement | 1,241,105,695 | 996,119,530 | 6,000,000 | |||||
Revenues generated, description | the sum of $300,000 in installments on and from the first to occur of either a financing or cumulative revenue of at least $1,000,000, the Company shall 15% of the financing or revenue to the Consultant, or if the Company pays its CEO compensation, the Company shall pay an equal amount to the Consultant. until the full $300,000 is paid in full. If the Company receives financing or cumulative revenue of at least $2,000,000, the Company shall pay 15% of that amount to the consultant, or if the Company pays compensation to its CEO of at least $150,000, the Company shall pay consultant an amount equal to 60% of such compensation. If a financing of at least $5,000,000 is received by the Company, the full $300,000 will be due and payable. The Company will continue to pay the Consultant a fee of $12,500 per month. The Company reclassified $250,000 of fee accrued in accounts payable owed to the Consultant and interest expense of $50,000 to a note payable. As of March 31, 2024 and September 30, 2023, the Company owed the consultant $412,000 and $337,500, which included accounts payable and accrued liabilities of $112,000 and $37,500 and notes payable of $300,000, respectively. In the event the Company invests in, mergers with or acquires AIP (as disclosed in Note 8), the Company will owe a Strategic Transaction Fee to the Consultant for that transaction. The Consultant is also entitled to 3.5% of any revenues generated by the Company from the AIP relationship. | |||||||
Consultant Agreement [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
Purchase commitment, description | Upon execution of the agreement, Valerian will purchase 33,333,333 shares of the Company’s stock for a total purchase price of $25,000 and have the option to purchase an additional 33,333,333 shares for $25,000 during the first 45 days of the agreement. Lastly, Valerian will have the right to purchase 66,000,000 warrants with an exercise price of $0.00075 for up to one year following the agreement. On October 30, 2023, the Company agreed to extend the exercise period of the 33,333,333 warrants to 150 days from the agreement date. As a result of this amendment to the warrant, the Company recognized a deemed dividend of $32,341 for the estimated incremental fair value of the warrants under the new terms. During the nine months ended June 30, 2024, the Company received $25,000 in cash proceeds for the exercise of 33,333,333 warrants previously issued to Valerian. As of June 30, 2024, the Company received $50,000 and issued 56,666,666 shares of common stock to Valerian. | |||||||
Guarantee Obligations [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
Amount paid to consultant | $ 17,500 |
License Agreement (Details Narrative) - USD ($) |
1 Months Ended | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|---|
Nov. 02, 2023 |
Aug. 23, 2020 |
Feb. 28, 2022 |
Sep. 30, 2023 |
Jun. 30, 2024 |
|
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Description of milestone | 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 issued 29,130,167 shares of common stock as a result of the change of control discussed in Note 5. These shares were issued in July 2021. | ||||
Description of milestone one | 29,130,167 Common shares immediately following the first round of funding under a private offer of equity or debt securities; These shares were issued in July 2021. | ||||
Description of milestone two | 29,130,167 Common shares immediately following the commencement of clinical trials for Federal Drug Administration clearance of the product; and | ||||
Description of milestone three | 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. | ||||
Description of milestone four | $40,000 of royalties to be paid to 7 to Stand annually, on a quarterly basis. 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. | ||||
Royalties and late fess | $ 20,000 | $ 50,000 | |||
Consulting agreement with AIP | The Consultant will be paid a signing bonus of $25,000 upon receipt by the Company of the $25,000 cash under the stock purchase agreement described above. The Consultant will also receive the larger of $12,500 per month, or 50% of the CEO’s fixed cash compensation under the amended employment agreement described in Note 4. The Consultant may elect to receive this payment in stock. | ||||
License Agreement Terms [Member] | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Consulting agreement with AIP | (i) AIP $5,000 per month during Phase A period, if the Company receives regulatory approval to manufacture, sell and distribute products in India or the United States within 60 days of the agreement (ii) AIP $6,000 per month during Phase B period (iii) AIP a sales commission of between 10% and 15% related to any customers, distributors or sales agents introduced to the Company by AIP and (iv) a commission of 4% of any proceeds from equity investments to the Company introduced by AIP, or 2% of any loan proceeds from lenders introduced by AIP. | ||||
License Agreement [Member] | Patents [Member] | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Royalty of net sales | 7.10% |
1 Year Globestar Therapeutics (PK) Chart |
1 Month Globestar Therapeutics (PK) Chart |
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