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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

(Mark One)
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 2017
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ______to______

 

Commission File Number: 000-54163

 

NuLife Sciences, Inc.

(Exact name of registrant as specified in its Charter)

  

Nevada		46-3876675
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employee Identification No.)
2618 San Miguel, Suite 203 Newport Beach, CA		92660
(Address of principal executive office)		(Zip Code)

 

(949) 973-0684

(Registrant’s telephone number, including area code)

 

Not Applicable

 (Former Name, former address and former fiscal year, if changed since last report)

 

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 issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes  ☒   No  ☐

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files).     Yes  ☒   No  ☐

 

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

 

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

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

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date: As of February 20, 2017, there were 40,504,391 shares of $0.001 par value common stock, issued and outstanding.

 

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PART I: FINANCIAL INFORMATION
Item 1: Financial Statements	3
Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operation	20
Item 3: Quantitative and Qualitative Disclosures about Market Risk	24
Item 4: Controls and Procedures	24
PART II: OTHER INFORMATION
Item 1: Legal Proceedings	25
Item 1A: Risk Factors	25
Item 2: Unregistered Sales of Equity Securities and Use of Proceeds	25
Item 3: Defaults Upon Senior Securities	28
Item 4: Mine Safety Disclosures	28
Item 5: Other Information	28
Item 6: Exhibits	29
SIGNATURES	29

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PART I - FINANCIAL INFORMATION

 

ITEM 1.  FINANCIAL STATEMENTS

 

NuLife Sciences, Inc. (fka “SmooFi, Inc.”)

Condensed Consolidated Balance Sheets

 

		December 31, 2017 (Unaudited)				September 30, 2017
ASSETS
CURRENT ASSETS:
Cash		$	40			$	44,123
Prepaid expenses			—				5,000
Advances receivable			—				1,090
Total Current Assets			40				50,213
Security deposit			4,871				4,871
TOTAL ASSETS		$	4,911			$	55,084
LIABILITIES AND STOCKHOLDERS’ DEFICIT
CURRENT LIABILITIES:
Accrued expenses		$	610,410			$	633,689
Due to related parties			135,730				84,500
Accrued interest			35,821				36,508
Notes payable			205,910				99,500
Convertible note, current portion, net			92,380				58,432
TOTAL CURRENT LIABILITIES			1,080,251				912,629
Convertible notes, net			14,177				23,027
Derivative liability			102,559				231,733
TOTAL LONG TERM LIABILITIES			116,736				254,760
TOTAL LIABILITIES			1,196,987				1,167,389
STOCKHOLDERS’ DEFICIT:
Preferred stock Series A, $0.001 par value; 15,000,000 shares authorized; 117,500 and 117,500 issued or outstanding, respectively			118				118
Preferred stock Series B, $0.001 par value; 10,000,000 shares authorized; nil and 10,000,000 issued or outstanding, respectively			—				10,000
Common stock, $0.001 par value; 475,000,000 shares authorized; 40,504,391 and 37,797,238 shares issued and outstanding, respectively			40,504				37,797
Additional paid in capital			6,251,065				5,445,385
Accumulated deficit			(7,483,763	)			(6,605,605	)
TOTAL STOCKHOLDERS’ DEFICIT			(1,192,076	)			(1,112,305	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT		$	4,911			$	55,084

 

 

 

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

 

NuLife Sciences, Inc. (fka “SmooFi, Inc.”)

Condensed Consolidated Statements of Operations

For the Three Months Ended December 31, 2017 and 2016

(Unaudited)

 

 

		2017				2016
Revenue		$	—			$	—
Cost of sales			—				—
Gross Profit			—				—
Operating expense:
General and administrative expenses			(768,775	)			(98,856	)
Related party compensation			(42,994	)			(303,404	)
Total operating expense			(811,769	)			(402,260	)
Loss from operations			(811,769	)			(402,260	)
Interest expense			(201,254	)			(36,479	)
Interest income			—				504
Forgiveness of accounts payable			73,644				—
Gain (loss) on change in fair value of derivative and derivative expense			61,221				(14,319	)
Loss before provision for income tax			(878,158	)			(452,554	)
Provision for income taxes			—				—
Net loss		$	(878,158	)		$	(452,554	)
Basic and diluted net loss per share		$	(0.02	)		$	(0.01	)
Weighted average common shares outstanding – basic and diluted			38,209,901				31,085,800

 

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

 

 

 

NuLife Sciences, Inc. (fka “SmooFi, Inc.”)

Condensed Consolidated Statement of Cash Flows

For the Three Months Ended December 31, 2017 and 2016

(Unaudited)

 

		2017				2016
CASH FLOW FROM OPERATING ACTIVITIES:
Net loss		$	(878,158	)		$	(452,554	)
Adjustments to reconcile net loss to net cash used in operating activities:
Interest expense - amortization of debt discount			170,765				27,495
(Gain) loss on change in fair value of derivative and derivative expense			(61,221	)			14,319
Stock-based compensation expense			640,000				186,904
Forgiveness of accounts payable			(73,644	)			—
Note receivable			—				(504	)
Prepaid expenses			5,000				—
Accounts payable and accrued expenses			50,365				35,656
Due to related party			52,320				(2,867	)
Accrued interest payable			2,080				8,983
Net Cash Used in Operating Activities			(92,493	)			(182,568	)
CASH FLOW FROM FINANCING ACTIVITIES:
Loan proceeds			106,410				685,000
Proceeds from the issuance of convertible notes			20,000				—
Payment of convertible notes			(78,000	)			—
Net Cash Provided by Financing Activities			48,410				685,000
CHANGE IN CASH			(44,083	)			502,432
CASH AT BEGINNING OF PERIOD			44,123				1,086
CASH AT END OF PERIOD		$	40			$	503,518
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for:
Interest		$	—			$	—
Income taxes		$	—			$	—
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Shares issued for convertible debt and interest		$	77,767			$	—
Derivative liability written off due to payment of debt		$	67,953			$	—
Initial value of beneficial conversion feature		$	12,667			$	—

 

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

 

NULIFE SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2017 and 2016

(Unaudited)

 

NOTE 1 - ORGANIZATION

 

NuLife Sciences Inc., formerly SmooFi, Inc. (the "Company") was incorporated under the laws of the State of Nevada on October 15, 2013. The Company issued 7,250,000 shares of its common stock to our founder, Derek Cahill, as consideration for the purchase of a business plan along with a website. On April 21, 2015, the Board of Directors of the Company approved a three-for-one forward stock split of the Company's common stock (the “Forward Split”). Accordingly, shareholders owning shares of the Company's common stock received two additional shares of the Company for each share they owned, and Mr. Cahill’s 7,250,000 shares became 21,750,000 shares. Prior to the Forward Split the Company had 10,128,600 shares issued and outstanding and following the Forward Split the Company has 40,504,391 shares issued and outstanding.  

 

During our fiscal year ended September 30, 2017, the Company formed three subsidiaries in the state of Nevada: NuLife BioMed, Inc. (“NuLife BioMed”), NuLife Technologies, Inc. (”NuLife Technologies”) and NuLife Medical Inc., (“NuLife Medical”), and one in the state of Wyoming: , NuLife Oncology LLC, a Wyoming Limited Liability Company (“NuLife Oncology”), the Managing Member of which is NuLife Technologies NuLife BioMed was the only active subsidiary during the first fiscal quarter ended December 31, 2017.

 

On January 29, 2017, the Company announced the completion of an Asset Purchase Agreement to acquire all of the assets (the “Asset Purchase”) of GandTex LLC, a Texas Limited Liability Company (“GandTex”). GandTex is a biomedical company focused on advancing human organ transplant technology and medical research. The assets being transferred pursuant to the Asset Purchase consisted of certain proprietary patents for eliminating the need for an organ or tissue match, and the necessity for anti-rejection drugs, as well as management of, and historical data for, animal trials (“Animal Trials”) conducted by GandTex(collectively, the “GandTex Assets”). Pursuant to the terms of the Asset Purchase, and upon achieving certain pro-forma goals, the Company agreed to provide additional funding for the Trials in the aggregate amount of $300,000. In exchange for the GandTex Assets, the Company issued to GandTex 10,000,000 shares of its Series B Convertible Preferred Stock. GandTex is owned and controlled by a single individual Managing Member who beneficially owns 70% of GandTex The Asset Purchase was amended by an Addendum to the Asset Purchase Agreement effective July 11, 2017, and subsequently restructured so as to perfect ownership of the GandTex Assets by way of the GandTex Restructuring Agreements effective July 27, 2017 between GandTex and Duplitrans Inc. (“Duplitrans”), and as to certain of the agreements, the Company. In late October 2017, the Company terminated the Asset Purchase and the GandTex Restructuring Agreements on October 24, 2017 in an unwinding of the Asset Purchase by way of a Settlement an Release Agreement dated October 24, 2017, involving the full return of the 10,000,000 shares of the Company’s Series B Convertible Preferred Stock in exchange for a full release of any and all claims that Duplitrans or GandTex may have had against the Company, and the transfer of the patents contained within the GandTex Assets to GandTex, and the Exclusive License to Duplitrans, and we entered into a Memorandum of Understanding with NuGenesis, a new entity being formed by certain shareholders of Duplitrans, with the intent to continue the development of the Wound Care technique in concert with NuGenesis. On December 29, 2017, the Company issued 2,000,000 common shares which 1,960,000 common shares were issued to Duplitrans and 40,000 common shares were issued to the legal counsel of Duplitrans in regards to the agreement with GandTex. On the date of the settlement, October 24, 2017, the shares had a fair market value of $640,000. Accordingly, the Company recorded $640,000 of stock based compensation during the three months ended December 31, 2017. Refer to NOTE 4 – Asset Purchase Agreement.

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The Company's financial statements are prepared using the accrual method of accounting. The Company elected a September 30 fiscal year-end. These financial statements present the consolidated financial statements of NuLife Sciences, Inc. and its two wholly owned subsidiaries, NuLife Biomed, NuLife Technologies, an NuLife Medical, along with NuLife Oncology, of which NuLife Technologies is the Managing Member, as of the Company’s fiscal quarter ended December 31, 2017.

 

 

NuLife Technologies, Inc., NuLife Medical and NuLife Oncology were all inactive at December 31, 2017 and remain inactive as of the date of this report.

 

The unaudited interim financial statements have been prepared by us pursuant to the rules and regulations of the Securities and Exchange Commission. The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments) which are, in the opinion of management, necessary to fairly present the operating results for the respective periods. Certain information and footnote disclosures normally present in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such rules and regulations. These condensed consolidated financial statements should be read in conjunction with the audited financial statements and notes for the year ended September 30, 2017 included in our Annual Report on Form 10-K. The results of the three-month period ended December 31, 2017 are not necessarily indicative of the results to be expected for the full year ending September 30, 2018.

 

 Cash Equivalents

 

For purposes of the balance sheet and statement of cash flows, the Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. The Company does not have any cash equivalent as of December 31, 2017 and September 30, 2017.

 

Stock-based Compensation

 

The Company follows ASC 718-10, Stock Compensation, which addresses the accounting for transactions in which an entity exchanges its equity instruments for goods or services, with a primary focus on transactions in which an entity obtains employee services in share-based payment transactions. ASC 718-10 requires measurement of the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). Incremental compensation costs arising from subsequent modifications of awards after the grant date must be recognized Nonemployee share-based payments are measured at fair value, based on either the fair value of the equity instrument issued or on the fair value of the services received. We determine the fair value of common stock grants based on the price of the common stock on the measurement date (which is the earlier of the date at which a commitment for performance by the counterparty to earn the equity instruments is reached, if there are sufficient disincentives to ensure performance, or the date at which the counterparty's performance is complete). We determine the fair value of preferred stock grants based on the price of the preferred stock as potentially converted into common stock and based on the underlying common stock on the measurement date (which is the earlier of the date at which a commitment for performance by the counterparty to earn the equity instruments is reached, if there are sufficient disincentives to ensure performance, or the date at which the counterparty's performance is complete).

 

Use of Estimates and Assumptions

 

Preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. The Company has adopted the provisions of ASC 260.

 

Management makes estimates that affect certain accounts including, deferred income tax, accrued expenses, fair value of equity instruments and reserves for any other commitments or contingencies. Any adjustments applied to estimates are recognized in the year in which such adjustments are determined.

 

Loss per Share

 

The basic loss per share is calculated by dividing the Company's net loss available to common shareholders by the weighted average number of common shares during the year. The diluted loss per share is calculated by dividing the Company's net loss available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. Diluted loss per share are the same as basic earnings loss per share due to the lack of dilutive items in the Company.

 

 

Fair Value Measurements and Disclosures

 

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2017 and September 30, 2017. The respective carrying value of certain on-balance-sheet financial instruments, approximate their fair values. These financial instruments include cash, accounts receivable, accounts payable, accrued expenses and notes payable. Fair values were assumed to approximate carrying values for these financial instruments because they are short term in nature and their carrying amounts approximate fair values or they are receivable or payable on demand.

  

The Company uses fair value measurements under the three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure for fair value measures. The three levels are defined as follows:

 

•	Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
•	Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.
•	Level 3 inputs to the valuation methodology are unobservable and significant to the fair value.

 

				Fair Value Measurements  Using Fair Value Hierarchy
				Level 1				Level 2				Level 3
	Convertible notes (net of discount) – December 31, 2017			$	—			$	—			$	106,557
	Convertible notes (net of discount) – September 30, 2017			$	—			$	—			$	81,459
	Derivative liability – December 31, 2017			$	—			$	—			$	102,559
	Derivative liability – September 30, 2017			$	—			$	—			$	231,733

 

The following table provides a summary of the changes in fair value of the Company’s Convertible Promissory Notes, which are both Level 3 liabilities as of December 31, 2017:

 

Balance at September 30, 2017		$	81,459
Issuance of notes			20,000
Accretion of debt discount			91,617
Debt discount on convertible notes due to beneficial conversion feature			(12,667	)
Accretion of debt discount due to beneficial conversion feature			79,148
Payment of convertible debt			(78,000	)
Conversion of principal into shares of common stock			(75,000	)
Balance December 31, 2017		$	106,557

 

The Company determined the value of its convertible notes using a market interest rate and the value of the derivative liability issued at the time of the transaction less the accretion. There is no active market for the debt and the value was based on the delayed payment terms in addition to other facts and circumstances at the end of December 31, 2017 and September 30, 2017.

  

The Company determined the value of warrants issued to a consultant using the Black-Scholes Model. There is no active market for the warrants and the value was based on the warrant terms in addition to other facts and circumstances at the end of the Company’s first quarter ended December 31, 2017 and its fiscal year ended September 30, 2017.

 

Derivative Financial Instruments

 

The Company evaluates our financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based financial instruments, the Company uses the Black-Scholes-Merton pricing model to value the derivative instruments. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated

 

at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date.

 

The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Derivative instruments that become subject to reclassification are reclassified at the fair value of the instrument on the reclassification date. Derivative instrument liabilities will be classified in the balance sheet as current or non-current based on whether or not settlement of the derivative instrument is expected within 12 months of the balance sheet date. 

 

The Company estimates the fair value of these instruments using the Black-Scholes option pricing model and the intrinsic value if the convertible notes are due on demand.

 

We have determined that certain convertible debt instruments outstanding as of the date of these financial statements include an exercise price “reset” adjustment that qualifies as derivative financial instruments under the provisions of ASC 815-40, Derivatives and Hedging - Contracts in an Entity’s Own Stock (“ASC 815-40”). Certain of the convertible debentures have a variable exercise price, thus are convertible into an indeterminate number of shares for which we cannot determine if we have sufficient authorized shares to settle the transaction with. Accordingly, the embedded conversion option is a derivative liability and is marked to market through earnings at the end of each reporting period. Any change in fair value during the period recorded in earnings as “Other income (expense) - gain (loss) on change in derivative liabilities.” Please refer to Note 8 below. 

 

Income Taxes

 

Income taxes are provided in accordance with ASC 740, Income Taxes. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carry forwards. Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities.

 

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

 

No provision was made for Federal or State income taxes.

 

Advertising

 

Advertising will be expensed in the period in which it is incurred. There have been no advertising expenses for the reporting periods presented.

 

Intangible Assets

 

Intangible assets with finite lives are amortized over their estimated useful life. The Company monitors conditions related to these assets to determine whether events and circumstances warrant a revision to the remaining amortization period. The Company tests its intangible assets with finite lives for potential impairment whenever management concludes events or changes in circumstances indicate that the carrying amount may not be recoverable. The original estimate of an asset's useful life and the impact of an event or circumstance on either an asset's useful life or carrying value involve significant judgment.

 

Research and Development

 

Research is planned search or critical investigation aimed at discovery of new knowledge with the hope that such knowledge will be useful in developing a new product or service (hereinafter “product”) or a new process or technique (hereinafter “process”) or in bringing about a significant improvement to an existing product or process. Development is the translation of research findings or other knowledge into a plan or design for a new product or process or for a significant improvement to an existing product or process whether intended for sale or use. It includes the conceptual formulation, design, and testing of product alternatives, construction of prototypes, and operation of pilot plants. It does not include routine or periodic alterations to existing products, production lines, manufacturing processes, and other on-going operations even though those alterations may represent improvements and it does not include market research or market testing activities. Per ASC 730, the Company expenses research and development cost as incurred.

 

Recently Issued Accounting Pronouncements

 

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which supersedes the existing guidance for lease accounting, Leases (Topic 840). ASU 2016-02 requires lessees to recognize leases on their balance sheets, and leaves accounting for the lessor largely unchanged. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early application is permitted for all entities. ASU 2016-02 requires a modified retrospective approach for all leases existing at, or entered into after, the date of initial application, with an option to elect to use certain transition relief. The Company is currently evaluating the impact of this new standard on its consolidated financial statements.

 

In March 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”). The standard is intended to simplify several areas of accounting for share-based compensation arrangements, including the income tax impact, classification on the statement of cash flows and forfeitures. ASU 2016-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and early adoption is permitted. The Company has adopted this new standard.

 

In January 2017, the FASB issued Accounting Standards Update No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (ASU 2017-01), which revises the definition of a business and provides new guidance in evaluating when a set of transferred assets and activities is a business. This guidance will be effective for the Company in the first fiscal quarter of 2018 on a prospective basis, and early adoption is permitted. The Company does not expect the standard to have a material impact on our consolidated financial statements.

 

In July 2017, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update 2017-11 (“ASU 2017-11”) which changes the accounting for equity instruments that include a down round feature.  For public entities, this update is effective for fiscal years beginning after December 15, 2018, and interim periods within those years.  Early adoption is permitted.  The Company does not anticipate the adoption of this amendment will have an impact on the consolidated financial statements and related disclosures as the Company does not have any related equity instruments.

 

The Company reviewed all recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the SEC and they did not or are not believed by management to have a material impact on the Company's present or future financial statements.

 

NOTE 3 – GOING CONCERN

 

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. For the three months ended December 31, 2017, the Company had a net loss of $878,158. As of December 31, 2017, the Company had a working capital deficit of $1,080,211 and an accumulated deficit of $7,483,763. The Company does not have a source of revenue and does not anticipate having one in the near future. Without additional capital, the Company will not be able to remain in business within the next twelve months.

 

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 Company’s future plans is fully dependent upon the funding of NuGenesis sufficient to carry forward the research on the Wound Care Process, and upon the ability of Duplitrans to also obtain sufficient funding to continue with the development of the NuLife Process at the Company’s existing facilities.

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. Substantial doubt has not been alleviated from management’s plan at this time.

 

NOTE 4 – ASSET PURCHASE AGREEMENT

 

Following the Closing of the Asset Purchase, in March 2017, we learned that Mr. James Gandy did not have proper authority to transfer the Exclusive License rights from Duplitrans to GandTex, after which we proposed a restructuring of the transaction, which was approved by the Duplitrans shareholders, so that we ended up with exclusive use and ownership of the intellectual property that was in dispute, but at the same time the Duplitrans shareholders were compensated for the license termination by way of an amendment to the conversion terms of the Series B Preferred Stock and a Royalty Agreement in favor of Duplitrans (the “GandTex Restructuring”).

Following our initial stage of the resumption of the Animal Trials conducted earlier in Ecuador by Duplitrans and GandTex, and the GandTex Restructuring, we learned that certain critical information concerning the organ transplantation process, thought to be contained in the GandTex Assets, was not contained in any of the Patents or License comprising the GandTex Assets, and was withheld by the inventor, Mr. Gandy during his review of our Protocol for the transplantation procedures (the “Omitted Transplantation Information”). In October 2017, as described in our Form 8-K filed October 21, 2017 following the discovery of the Omitted Transplantation Information, we entered into a settlement agreements with Duplitrans and GandTex pursuant to which we reversed the Asset Acquisition and the GandTex Restructuring Agreements in their entirety, and GandTex and Duplitrans agreed to the full return of the 10,000,000 shares of our Series B Preferred Stock, the cancellation of the Royalty Agreement with Duplitrans/GandTex, and a full release by GandTex and Duplitrans from any and all claims that they may have believed they had against us (the “Release”). In consideration for the termination of the Asset Purchase Agreement and the GandTex Restructuring Agreements, the Release and the return of our Series B Preferred Stock, we issued 2,000,000 shares of our common Stock to Duplitrans and to Duplitrans legal counsel.

In conjunction with Mr. Gandy’s final disclosure of the Omitted Transplantation Information, but prior to the Release and unwinding of the Asset Purchase, we entered into a Memorandum of Understanding (the “MOU”) with NuGenesis, an entity in formation organized by certain of the Duplitrans shareholders (“NuGenesis”), which we believed could enable us to continue to pursue the Animal Studies and a secondary application of the NuLife Process – known as the “Wound Care Technique”.

To date, the proposed Wound Care activities (the “Wound Care Technique”) are still in the investigation stage, without significant expenditures by the Company due to our efforts to maintain adequate funding for our corporate operations. The commercial relationship between the NuGenesis and Duplitrans has not yet been established in an adequate definitive joint venture agreement, but only through the MOU during this exploratory stage of the business. Neither the Company or NuGenesis currently have the necessary funding to resume the development of the Wound Care Technique, and the reduction of the MOU to a definitive agreement is contingent upon either the Company or NuGenesis obtaining the funding necessary to carry the proposed development through to completion

 

NOTE 5 - CONSULTING AGREEMENTS

 

On April 1, 2015, the Company entered into a twelve-month consulting agreement with an investor relations firm. Per the agreement, the Company will pay the consultant a monthly fee of $8,500 on the first day of each month with the payment deferred until the Company closes financing in the amount of $3 million or greater. Additionally, the Company was required to issue the consultant 200,000 shares of common stock on October 1, 2015. The agreement was terminated on October 16, 2016. During the three months ended December 31, 2017 and 2016, the Company recorded compensation expense in the amount of $-0- and $2,133 related to this agreement.

 

 

On February 28, 2017, but effective January 5, 2017, the Company entered into an Advisory Agreement with Global Business Strategies Inc. (“Global “), a company controlled Mr. Luke (the “Global Agreement”). Pursuant to the Global Agreement the Company retained Global to provide management advice, corporate development strategies, to assist in the general and administrative functions, and to make Mr. Luke available to serve as a Director or a member of the Company’s management (the “Services” as defined in the Global Agreement).  In consideration for the Services the Company agreed to pay Global $8,500 per month, which included any and all fees for Mr. Luke continuing to serve as the Company’s President and fees to others working for Global, and allowed for reimbursement of expenses up to $500 per month without prior written approval. The Company also agreed to pay Global an additional $1,500 per month if Mr. Luke was appointed to serve as a Director also incorporated you of the Company, and agreed to issue to Global 55,000 shares of its Series A Convertible Preferred Stock. Mr. Luke has not been appointed a Director of the Company as of the date of this report. During the three months ended December 31, 2017 and 2016, the Company recorded compensation expense in the amount of $25,500 and $-0- related to this agreement.

 

On June 10, 2017, the Company entered into a Master Service Agreement with an investment consultant to provide services to the Company for a period of six months. The agreement calls for a budget of $215,000 with an initial payment of $150,000. Additionally, the agreement called for the issuance of 250,000 cashless warrants exercisable for three years at a price of 110% of the closing price on June 10, 2017. The Company paid $65,000 of the initial payment on August 14, 2017, the remaining $85,000 of the initial payment and $65,000 of the balance of the agreement, for a total of $150,000 is included in accounts payable as of December 31, 2017 and September 30, 2017. See Note 13– Subsequent Events.

 

NOTE 6 – NOTES PAYABLE

 

As of December 31, 2017, the Company had a note payable issued and outstanding to a third-party lender with a total principle of $25,000 and accrued interest of $15,912. The note was due on June 30, 2015, has an interest rate of 12%. This note is in default and remains unpaid at December 31, 2017. The Company has been able in the past to arrange equity or debt financing sufficient to pay off its notes, not in dispute, but there cannot be any assurance that the Company will be able to continue to attract such financing in the future.

 

As of December 31, 2017, the Company had three notes payable issued and outstanding with a former director with a total principle of $74,500 and accrued interest of $14,366. The three notes, in the amount of $47,000, $15,000 and $12,500, were issued on January 14, 2016. February 10, 2016 and February 29, 2016, respectively. The three notes are due on the earlier of one week after the closing of a certain contemplated farm property acquisition or July 31, 2016, and have an interest rate of 10%. The former director for all three notes is East West Secured Developments, LLC, an Arizona Limited Liability Company (“EWSD”) of which Mr. Brian Loiselle, the EWSD Managing Member, was also a former director of the Company. On June 30, 2016, the Company entered into Amendment #1 (the “EWSD Amendment”) to these three notes to extend the due date to one week after the closing of a certain contemplated farm property acquisition or October 31, 2016. The three notes have been reclassified to non-related party debt. Since the closing of the contemplated farm property never occurred, the Company has taken the position, pursuant to the language of the EWSD Amendments, that there is not legal date for repayment, and it intends to leave the subject notes on its Financial Statements until a mutual settlement agreement can be reached between Mr. Loiselle and the Company.

 

On December 28, 2017, the Company entered into a note payable in the aggregate principal amount of $106,410. The Note matures on March 31, 2018, and bears interest at the rate of 12% per annum. As of December 31, 2017, the note balance and accrued interest is $106,410 and $105, respectively. This note remains unpaid at December 31, 2017.

 

NOTE 7 – CONVERTIBLE NOTES

 

Convertible notes consist of the following:

 

		December 31, 2017				September 30, 2017
Convertible note payable, annual interest rate of 8%, convertible into common stock at $0.11 per share and due December 2019.		$	5,000			$	80,000
Convertible note payable, annual interest rate of 12%, convertible into common stock at a variable rate per share and due June 2018			—				78,000
Convertible note payable, annual interest rate of 8%, convertible into common stock at a variable rate per share and due November 2017			65,000				65,000
Convertible note payable, annual interest rate of 8%, convertible into common stock at $0.11 per share and due August 2020			50,000				50,000
Convertible note payable, annual interest rate of 5%, convertible into common stock at a variable rate per share and due September 2018			82,500				82,500
Convertible note payable, annual interest rate of 8%, convertible into common stock at $0.30 per share and due October 13, 2020			20,000				—
Unamortized debt discount			(56,864	)			(91,480	)
Unamortized debt discount due to beneficial conversion feature			(59,079	)			(-)
			106,557				81,459
Less current portion			92,380				58,432
Convertible debt, net of current portion and debt discount		$	14,177			$	23,027

 

During the year ended September 30, 2017, the Company entered into certain Note Purchase Agreements (collectively the “Purchase Agreements”) in connection with the issuance of certain convertible promissory notes, in the aggregate principal amount of $685,000. The Purchase Notes are due in 36 months. The Purchase Notes bear interest at the rate of 8% compounded monthly. The Purchase Notes, together with all interest as accrued, are each convertible into shares of the Company’s common stock at a conversion price of Eleven cents ($0.11) per share. Due to the beneficial conversion feature of these notes, the Company recorded $635,545 of debt discount as a contra liability and amortized $576,838 of the discount during the year ended September 30, 2017. During July 2017, certain note holders converted their respective principal and accrued interest into 5,720,066 shares of the Company’s common stock. During October 2017, certain note holders converted their respective principal and accrued interest into 707,153 shares of the Company’s common stock. As of December 31, 2017, the note balances and accrued interest are $5,000 and $419, respectively.

 

On June 26, 2017, the Company entered into a Securities Purchase Agreement (“SAP”) in connection with the issuance of a convertible promissory note (the “Power Up Note”) in the aggregate principal amount of $78,000. The Power Up Note matures on June 30, 2018 (the “Maturity Date”), and bears interest at the rate of 12% per annum. After 180 days, the Note may not be prepaid. Any amount of principal or interest on this note which is not paid when due shall bear interest at the rate of twenty two percent (22%) per annum from the due date. This note, together with all interest as accrued, is convertible into shares of the Company’s common stock at a 35% discount to the lowest trading price in the 10-day period ending on the latest complete Trading Day prior to the Conversion Date. Due to the beneficial conversion feature of this note, the Company recorded $78,000 of debt discount as a contra liability and amortized $57,707 of the discount during the three months ended December 31, 2017. During the quarter ended December 2017, this note along with accrued interest and a prepayment were paid in full.

 

On August 14, 2017, the Company entered into a Securities Purchase Agreement (“SAP”) in connection with the issuance of a convertible promissory note (the “Kingdom Note”) in the aggregate principal amount of $65,000. The Note matures on November 14, 2017 (the “Maturity Date”), and bears interest at the rate of 8% per annum. The Note, together with all interest as accrued, is convertible into shares of the Company’s common stock at $0.11 per share. Due to the beneficial conversion feature of this note, the Company recorded $65,000 of debt discount as a contra liability and amortized $31,056 of the discount during the three months ended December 31, 2017. As of December 31, 2017, the note balance and accrued interest is $65,000 and $1,995, respectively. This note is in default and remains unpaid at December 31, 2017, however, the Company and the Payee entered into a Debt Conversion Agreement in February, 2018 pursuant to which the Payee received shares of the Company’s Series A Convertible Preferred Stock in exchange for the full release of any and all obligations related to the Kingdom Note. Refer to NOTE 13. SUBSEQUENT EVENTS.

 

On August 23, 2017, the Company entered into a Securities Purchase Agreement (“SAP”) in connection with the issuance of a convertible promissory note (the “Hayden Note”) in the aggregate principal amount of $50,000. The Note matures on August 23, 2020 (the “Maturity Date”), and bears interest at the rate of 8% per annum. The Note, together with all interest as accrued, is convertible into shares of the Company’s common stock at $0.11 per share. Due to the beneficial conversion feature of this note, the Company recorded $50,000 of debt discount as a contra liability and amortized $4,197 of the discount during the three months ended December 31, 2017. As of December 31, 2017, the note balance and accrued interest is $50,000 and $1,434, respectively. This note remains unpaid at December 31, 2017.

 

On September 12, 2017, the Company entered into a Securities Purchase Agreement (“SAP”) in connection with the issuance of a convertible promissory note (the “First Fire Note”) in the aggregate principal amount of $82,500. The Note matures on September 12, 2018 (the “Maturity Date”), and bears interest at the rate of 5% per annum. The Note, together with all interest as accrued, is convertible into shares of the Company’s common stock at a 35% discount to the lowest trading price in the 21-day period ending on the latest complete Trading Day prior to the Conversion Date. As of December 31, 2017, the note balance and accrued interest is $82,500 and $1,243. This note remains unpaid at December 31, 2017.

 

On October 13, 2017, the Company entered into a Securities Purchase Agreement (“SAP”) in connection with the issuance of a convertible promissory note (the “Escala Note”) in the aggregate principal amount of $20,000. The Note matures on October 13, 2020 (the “Maturity Date”), and bears interest at the rate of 8% per annum. The Note, together with all interest as accrued, is convertible into shares of the Company’s common stock at $0.30 per share. Due to the beneficial conversion feature of this note, the Company recorded $12,667 of debt discount as a contra liability and amortized $913 of the discount during the three months ended December 31, 2017. As of December 31, 2017, the note balance and accrued interest is $20,000 and $346, respectively. This note remains unpaid at December 31, 2017.

 

NOTE 8 – DERIVATIVE LIABILITY

  

During June 2017, the Company entered into a Loan Agreement with an investor pursuant to which the Company issued a convertible promissory note in the principal amount of $78,000. The Note is convertible into shares of common stock at an initial conversion price subject to adjustment as contained in the Note. The note, together with all interest as accrued, is convertible into shares of the Company’s common stock at 65% of the trailing average highest closing bid price of the Company’s common stock on the date of conversion. The Note accrues interest at a rate of 12% per annum and matures on June 30, 2018. The note was paid in full during the three months ended December 31, 2017.

  

During September 2017, the Company entered into a Loan Agreement with an investor pursuant to which the Company issued a convertible promissory note in the principal amount of $82,500. The Note is convertible into shares of common stock at an initial conversion price subject to adjustment as contained in the Note. The note, together with all interest as accrued, is convertible into shares of the Company’s common stock at 65% of the trailing average highest closing bid price of the Company’s common stock on the date of conversion. The Note accrues interest at a rate of 5% per annum and matures on September 12, 2018.

 

Due to the variable conversion price associated with these convertible promissory notes, the Company has determined that the conversion feature is considered a derivative liability. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivatives as of the inception date of the Convertible Promissory Note and to adjust the fair value as of each subsequent balance sheet date.

 

The initial fair value of the embedded debt derivative of $238,785 was allocated as a debt discount in the amount of $147,500 and excess $91,285 was charged to interest expenses, loss on derivative. The fair value of the described embedded derivative was determined using the Black-Scholes Model with the following assumptions:

 

			September 12, 2017			June 26, 2017
(1) dividend yield of			0%;			0%;
(2) expected volatility of			265%;			250%,
(3) risk-free interest rate of			1.27%;			1.20% - 1.24%,
(4) expected life of			1 year			1 year
(5) fair value of the Company’s common stock of			$0.54 per share.			$0.67 per share.

 

During the three months ended December 31, 2017 and 2016, the Company recorded the gain (loss) in fair value of derivative and derivative expense in the amount of $61,221 and $(14,319), respectively. 

 

For the three months ended December 31, 2017, $79,148 and $-0-, were expensed in the statement of operation as amortization of debt discount related to above notes and shown as interest expenses, respectively.

 

The following table represents the Company’s derivative liability activity for the period ended:

 

Balance at September 30, 2017		$	231,733
Change in fair value of derivative at period end			(61,221	)
Derivative liability written off due to payment of related debt			(67,953	)
Balance at December 31, 2017		$	102,559

 

NOTE 9 – SHARE CAPITAL

 

The Company is authorized to issue 475,000,000 shares of $.001 par value common stock and 25,000,000 shares of$.001 par value preferred stock.

 

As of December 31, 2017, the Company had 40,504,391 shares of its common stock issued and outstanding, with 117,500 shares of its Series A Convertible Preferred Stock issued and outstanding and -0- shares of its Series B Convertible Preferred Stock issued and outstanding..

 

On December 29, 2017, the Company issued 2,000,000 to Duplitrans and the legal counsel of Duplitrans in regards to the agreement with GandTex. On the date of the settlement, October 24, 2017, the shares had a fair market value of $640,000. Accordingly, the Company recorded $640,000 of stock based compensation during the three months ended December 31, 2017. All of the Company’s 10,000,000 Series B Convertible Preferred Stock, previously issued to GandTex, were cancelled during the quarter ended December 31, 2017.

 

Description of Preferred Stock:

 

Series A Preferred Stock

 

•

As authorized in the Company’s Amended and Restated Articles of Incorporation, the Company has 2,000,000 shares of Series A Preferred Stock (“Series A Stock”) authorized with the following characteristics:

 

•

Holders of the Series A Stock shall be entitled to receive dividends or other distributions with the holders of the Common Stock on an “as converted” basis when, as, and if declared by the Directors of the　Corporation.

 

•

Holders of shares of Series A Stock, upon Board of Directors approval, may convert at any time following the issuance upon sixty-one (61) day written notice to the Corporation. Each share of Series A Preferred Stock shall be convertible into such number of fully paid and non-assessable shares of Common Stock as is determined by multiplying the number of issued and outstanding shares of the Corporation’s Common Stock together with all other derivative securities, including securities convertible into or exchangeable for Common Stock, whether or not then convertible or exchangeable (b) subscriptions, rights, options and warrants to purchase shares of Common Stock, whether or not then exercisable, but entitled to vote on matters submitted to the Shareholders (collectively, “Derivative Securities”), issued by the Corporation and outstanding as of the Date of Conversion, by .000001, then multiplying that number of shares of Series A Stock to be converted.

 

•

In case of any consolidation or merger of the Corporation, the Corporation shall mail to each holder of Series A Stock at least thirty (30) days prior to　the consummation of such event, a notice thereof and each such holder shall have the option to either (i) convert such holder’s shares of Series A Stock into shares of Common Stock pursuant to this paragraph and thereafter receive the number of shares of Common Stock or other securities or property, or cash, as the case may be, to which a holder of the number of shares of Common Stock of the Corporation deliverable upon conversion of such Series A Stock would have been entitled upon conversion immediately preceding such consolidation, merger or conveyance, or (ii) exercise such holder’s rights pursuant to Section 8.1(a) hereof; provided however that the Series A Stock shall not be subject to or affected as to the number of Conversion Shares or the redemption or liquidation price by reason of any reverse stock split affected prior or as a result of any reorganization.

 

•

In the event of a liquidation, the holders of shares of the Series A Stock shall be entitled to receive, prior to the holders of the other series of Preferred Stock and prior and in preference to any distribution of the assets or surplus funds of the Corporation to the holders of any other shares of stock of the Corporation by reason of their ownership of such stock, an amount equal to Five Dollar ($5.00) per share with respect to each share of Series B Stock owned as of the date of Liquidation, plus all declared but unpaid dividends with respect to such shares, and thereafter they shall share in the net Liquidation proceeds on an “as converted basis” on the same basis as the holders of the Common Stock.

 

•

The holders of each share of Series A Stock shall have that number of votes as determined by multiplying the number of issued and outstanding shares of the Corporation’s Common Stock together with all other derivative securities issued by the Corporation and outstanding as of the Date of Conversion, whether or not then convertible or exchangeable, entitled to vote on matters submitted to the Shareholders, by .000001, then multiplying that number of shares of Series A Stock to be converted.

 

•

the Corporation shall have the option to redeem all of the outstanding shares of Series A Stock at any time on an “all or nothing” basis, unless otherwise mutually agreed in writing between the Corporation and the holders of shares of Series A Stock holding at least 51% of such Series A Stock, beginning ten (10) business days following notice by the Corporation, at a redemption price the higher of (a) Five Dollar ($5.00) per share, or (b) Fifty percent (50%) of the trailing average highest closing Bid price of the Corporation’s Common Stock as published at www.OTCMarkets.com or the Corporation’s primary listing exchange on the date of Notice of redemption, unless otherwise modified by mutual written consent between the Corporation and the Holders of the Series A Stock (the "Conversion Price"). Redemption payments shall only be made in cash within sixty (60) days of notice by the Corporation to redeem.

 

•

The shares of Series A Stock acquired by the Corporation by reason of conversion or otherwise can be reissued, but only as an amended class, not as shares of Series A Stock.

 

Series B Preferred Stock

 

•

In conjunction with the unwinding of the Asset Acquisition with GandTex, the Company cancelled all 10,000,000 shares of its Series B Preferred Stock (“Series B Stock”). Pursuant to the terms of the Series B Stock, the shares of Series B Stock acquired by the Corporation by reason of conversion or otherwise, can be reissued but only as an amended class, not as shares of Series B Stock.

 

Therefore, the Company returned the Series B Stock to its authorized but unissued Preferred Stock and no longer has a class of Series B Convertible Preferred Stock.

 

Stock Options

 

On November 15, 2016, the Board approved the grant of 1,500,000 common stock purchase options to Fred Luke, the Company’s President, at an exercise price of not less than One Hundred Ten percent (110%) of the ten (10) day lowest trailing average closing bid price of such shares on the date of execution of the Option Agreement which was Fourteen cents ($0.14) per share and subject to certain adjustments on November 15, 2016. The options vested immediately.

 

On January 31, 2017, the Board approved the grant of 120,000 common stock purchase options Dr. Youxue Wang, the Director of Research for NuLife BioMed. The option vested immediately. The exercise price of the options was calculated at January 31, 2017 at One Hundred Ten percent (110%) of the 10-day trailing average closing Bid price of such shares, which was Seventy cents ($0.70) per share.

 

On May 15, 2017, the Board approved the grant of 1,500,000 common stock purchase options to John Hollister, the Company’s former CEO, at an exercise price of not less than One Hundred Ten percent (110%) of the ten (10) day lowest trailing average closing bid price of such shares on a certain date of agreement which was Fourteen cents ($0.12) per share and subject to certain adjustments on October 17, 2016. The options vested based on certain goals and as such 500,000 common stock options were earned prior to Mr. Hollister’s employment ending with the Company, the remaining 1,000,000 common stock options expired due to his resignation.

 

Stock option transactions for the three months ended December 31, 2017 are summarized as follows:

 

		Shares				Weighted Average Exercise Price				Weighted Average Remaining Term			Aggregate Intrinsic Value
Outstanding, September 30, 2017			3,120,000			$	0.17				2.26	$	355,200
Granted			-				-				-	$	-
Exercised			-				-
Expired			(1,000,000)				0.12				2.08	$	120,000
Outstanding, December 31, 2017			2,120,000			$	0.17				2.00	$	355,200
Exercisable, December 31, 2017			2,120,000			$	0.17				2.00	$	355,200

 

The initial fair value of the options was $308,909 charged to operating expense during the year ended September 30, 2017. The fair value of the option was determined using the Black-Scholes Model with the following assumptions:

 

(1) dividend yield of		0%;
(2) expected volatility of		236%,313%,223%
(3) risk-free interest rate of		1.28%,1.46%,.98%
(4) expected life of		3 years, and
(5) fair value of the Company’s common stock of		$0.13, $0.60, $0.11 per share.

 

Warrants

 

On June 10, 2016, the Board approved the grant of 250,000 common stock purchase warrants to a consultant at an exercise price of not less than One Hundred Ten percent (110%) of the ten (10) day lowest trailing average closing bid price of such shares on the date of execution of the warrant which was $0.66 per share. The warrants vested immediately.

 

Warrant transactions for the three ended December 31, 2017 are summarized as follows:

 

		Shares				Weighted Average Exercise Price				Weighted Average Remaining Term			Aggregate Intrinsic Value
Outstanding, September 30, 2017			250,000			$	0.66				2.70
Granted			-				-				-
Exercised			-				-
Expired			-				-
Outstanding, December 31, 2017			250,000			$	0.66				2.44
Exercisable, December 31, 2017			250,000			$	0.66				2.44

 

The initial fair value of the options was $144,800 charged to operating expense during the year ended September 30, 2017. The fair value of the option was determined using the Black-Scholes Model with the following assumptions:

 

(1) dividend yield of		0%;
(2) expected volatility of		249%
(3) risk-free interest rate of		1.5%
(4) expected life of		3 years, and
(5) fair value of the Company’s common stock of		$0.60 per share.

 

The Company recorded $-0- and $186,904 of stock compensation expense in the statements of operations for the three months ended December 31, 2017 and 2016, respectively, related to non-vested share-based compensation arrangements granted under existing stock option plans.

 

As of December 31, 2017, there was $0 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under existing stock option plans.

 

NOTE 10 - CONTINGENCY

 

As of December 31, 2017, as described in Note 6, the Company has accrued $53,200 in accrued expenses, note payable of $74,500 and accrued interest of $14,366 due EWSD. At September 30, 2017 the Company owed EWSD the aggregated amount of $138,311, which is past due and has been in default since October 31, 2016. On top of the amount accrued by the Company, Mr. Loiselle had demanded for a penalty fee of $101,235, which is approximately 18% monthly default rate on the amount past due. We believe the penalty fee imposed is invalid and are currently in dispute with Mr. Loiselle. See NOTE 6. above.

 

NOTE 11 – FORGIVENESS OF ACCOUNTS PAYABLE

 

On November 15, 2017, a service vendor with a balance due of $73,644 agreed to cancel the debt owed by The Company. Accordingly, the Company recorded $73,644 of forgiveness of debt during the three months ended December 31, 2017.

 

NOTE 12 - LEASE AGREEMENT

 

During May 2017, the executed a 5-year lease for a laboratory at NOVA Southeastern University at which the Company will be utilizing the NuLife Technique to process organs, as well as conducting bench research to better characterize and assess the impact of the technique. The lease calls for monthly payments of $2,582, which includes the initial base rent of $1,925 along with applicable taxes and shared operating expenses. The lease required a security deposit in the amount of $4,871 and requires a 4% increase in base rent annually. Rent expense for three months ended December 31, 2017 and 2016 was $8,225 and $-0-, respectively.

 

Future minimum lease payments are as follows for the years ending:

 

	September 30, 2018 (remaining months)		$	17,633
	September 30, 2019			24,344
	September 30, 2020			25,318
	September 30, 2021			26,331
	September 30, 2022			18,016
			$	111,642

 

NOTE 13 - SUBSEQUENT EVENTS

 

On January 30, 2018, the Master Service Agreement as described in note 5 entered into on June 10, 2017 was terminated and the Company received a refund of $38,000 in cash.

 

 

Effective February 20, 2018 the Company entered into two Debt Conversions Agreements, one with Kingdom Building Inc. (“Kingdom”) and MZHCI LLC (“MZ”) pursuant to which Kingdom and MZ agreed to exchange an aggregate of approximately $445,296 of combined Notes Payable and Accounts Payable into 694,041 and 1,086,176 shares, respectively, of the Company’s Series A Convertible Preferred Stock.

 

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

 

The information contained in this Form 10-Q is intended to update the information contained in our Annual Report on Form 10-K for the year ended September 30, 2017 and presumes that readers have access to, and will have read, the "Management's Discussion and Analysis of Financial Condition and Results of Operations" and other information contained in such Form 10-K. The following discussion and analysis also should be read together with our financial statements and the notes to the financial statements included elsewhere in this Form 10-Q.

 

Except for historical information, the matters discussed in this section are forward looking statements that involve risks and uncertainties and are based upon judgments concerning various factors that are beyond the Company's control. Consequently, and because forward-looking statements are inherently subject to risks and uncertainties, the actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. You are urged to carefully review and consider the various disclosures made by us in this report. We strongly encourage investors to carefully read the factors described elsewhere in this report in the section entitled "Risk Factors" for a description of certain risks that could, among other things, cause actual results to differ from these forward-looking statements. We assume no responsibility to update the forward-looking statements contained in this quarterly report on Form 10-Q. The following should also be read in conjunction with the unaudited Financial Statements and notes thereto that appear elsewhere in this report.

 

Company Overview

 

As a result of the Company not receiving the working capital promised by certain third parties, development of the two business segments described below has been slow, and generated no revenues since its inception on October 15, 2013. In August 2017, changing our name and pursuing the various biomedical opportunities which had been presented to us, one of which, the patents and other rights owned by GandTex seemed very attractive and we elected to acquire the patents purportedly owned by GandTex and develop what is now termed the “NuLife Process” or NuLife Technique”. As a result of operating difficulties relating primarily to the hurricanes and related severe weather in southern Florida, the home of our Animal Trials, and the discovery that certain critical information related to the actual surgical process has been withheld by the inventor of the NuLife Process, we suspended the organ transplantation activities in October 2017. In connection with the return of the Exclusive License to Duplitrans and the return of and the patent rights acquired from GandTex pursuant to individual Settlement and Release Agreements with Duplitrans and GandTex (the “Settlement Agreements).

 

While the organ transplantation activities were suspended we began investigating other applications of the NuLife Process, in particular the Wound Care Technique. To date, the Company’s participation in the proposed Wound Care activities are still in the investigation stage, without significant expenditures by the Company due to our efforts to maintain adequate funding for our corporate operations. Further, the commercial relationship between the NuGenesis and Duplitrans has not yet been established in an adequate definitive joint venture agreement, but only through the MOU during this exploratory stage of the business. Neither the Company or NuGenesis currently have the necessary funding to resume the development of the Wound Care Technique, and the reduction of the MOU to a definitive agreement is contingent upon either the Company or NuGenesis obtaining the funding necessary to carry the proposed development through to completion

 

Online marketplace and community

 

The Company's initially-defined business strategy is to acquire and/or develop and market software and services that will significantly enhance the performance and functionality of the Internet services used by individuals and by small to medium sized businesses. However, .it appears that the Website will not be competitive in the “service” sector of the Internet space without certain modifications, , but could have other applications which we may consider pursuing depending upon the results of the current Animal Trials, our investigation of the Wound Care Process and the potential opportunities in the oncology data management space. Since the acquisition of the organ transplant technology, we narrowed the focus of our platform to the healthcare industry and have, for now, suspended the modification of the Website.

 

 

However, with the Settlement Agreements and unwinding of the Asset Acquisition, and the shift in our structure and direction in the healthcare industry to attempt to become involved with NuGenesis in the development of the Wound Care Technique, as funding becomes available we intend to either (a) pursue the joint venture envisioned by the MOU with NuGenesis in the development of the Wound Care Technique, or (b) refocus on our Website and (i) modifying our online marketplace and community to focus on healthcare professionals and those in need of individual at-home and post-operative care, together with Hospitals and physicians who need part time or additional personnel due for expansion, or (ii) simply updating the Website as www.anytimeJobs.com.

 

Critical Accounting Policies

 

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and related disclosures of contingent assets and liabilities in the financial statements and accompanying notes. The SEC has defined a company's critical accounting policies as the ones that are most important to the portrayal of the company's financial condition and results of operations, and which require the company to make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. We believe that our estimates and assumptions are reasonable under the circumstances; however, actual results may vary from these estimates and assumptions. We have identified in Note 2 - "Summary of Accounting Policies" to the Financial Statements contained in this Quarterly Report certain critical accounting policies that affect the more significant judgments and estimates used in the preparation of the financial statements.

 

Going Concern

 

Our auditor has issued a "going concern" qualification as part of its opinion in the Audit Report for the fiscal year ended September 30, 2017, and our financial statements as of and for the year then ended include a "going concern" footnote (See Footnote 3 – Going Concern) disclosing that our ability to continue as a going concern is contingent on us to be able to raise working capital to generate revenue by completing and launching our online marketplace and community portal and implementing the new business strategy of developing the NuLife Process.

 

Results of Operation

 

Three Months Ended December 31, 2017 and 2016

 

Revenue.

 

Revenue was $0 for the three months ended December 31, 2017 and 2016.

 

Cost of Sales.

 

Cost of sales was $0 for the three months ended December 31, 2017 and 2016.

 

Operating Expenses.

 

Operating expenses were $811,769 and $402,260 for the three months ended December 31, 2017 and 2016, respectively. Operating expenses consist of general and administrative expenses and related party compensation. During the three months ended December 31, 2017 and 2016 general and administrative expenses were $768,775 and $98,856, respectively. During the three months ended December 31, 2017 and 2016, the Company recorded $640,000 and $-0- of stock-based compensation to non-related parties. During the three months ended December 31, 2017 and 2016 related party compensation was $42,994 and $303,404, respectively. Related party compensation included $186,904 of stock-based compensation during the three months ended December 31, 2016.

 

 

Interest Expense.

 

Interest expense was $201,254 and $36,479 for the three months ended December 31, 2017 and 2016, respectively, which related to interest accrued on borrowings, which were greater at December 31, 2017 as a result of newly issued debt. Included in interest expense for the three months ended December 31, 2017 and 2016, was also $91,617 and $14,392, respectively, of non-cash interest expense related to the amortization of the debt discount and beneficial conversion feature.

 

Interest Income.

 

Interest income was $-0- and $504 for the three months ended December 31, 2017 and 2016, respectively, which related to interest due on notes receivable and interest earned in bank accounts, which were greater in the three months ended December 31, 2017.

 

Forgiveness of Accounts Payable.

 

During the three months ended December 31, 2017, a vendor cancelled the amount the Company owed. Accordingly, the Company recorded a forgiveness of debt in the amount of $73,644.

 

Gain(Loss) on derivative.

 

The Company recorded a net gain on derivative in the amount of $61,221 in the three months ended December 31, 2017 compared to a loss on derivative of $14,319 during the three months ended December 31, 2016.

 

Liquidity and Capital Resources

 

The following is a summary of the Company's cash flows provided by (used in) operating, investing, and financing activities for the three months ended December 31, 2017 and 2016:

 

		2017				2016
Operating Activities		$	(92,493	)		$	(182,568	)
Investing Activities			-				-
Financing Activities			48,410				685,000
Net Effect on Cash		$	(44,083)			$	502,432

 

Since acquiring the business plan and Website, during our fiscal year ended September 30, 2016, most of our resources and work was devoted to the development of the Website segment of our business. However, this has been suspended for the time being due to certain modifications needed to eliminate the risk of cyber-attacks. When those procedures are completed, which we believe will occur over several months following the receipt of adequate financing, we may resume work on our Website as well further internal development of software for which we have developed our initial framework of and completed some coding. We believe that the work needed to initiate and complete the software development for our online marketplace and community portal, attract developers, and initiate our marketing plans, including the development of a saleable product suite, may be in excess of $100,000 if outside contractors and experts are used. If we are able to secure funding to outsource these procedures, of which there are no assurances, we will then commence the launch of our intended services and software products to the public. If we are able to use internal resources only (primarily consisting of the services of our president and chief financial officer), the process will take much longer and our initial launch may be limited to a much smaller target market. If we are unable to raise any funds from third party sources, the development costs would have to be funded by current shareholders, management or by third-parties through the issuance of Convertible or Demand Promissory Notes. While we have previously engaged the services of an established software development firm which we used on an as "needed basis", their involvement is limited by our ability to raise financing. Our goal would be to have software products available, services available, multiple sales channels and a comprehensive corporate website up and running within one year after receipt of adequate financing, but there is no way of estimating what the likelihood of achieving that goal would be.

 

 

If a market for our shares ever develops, of which there can be no assurances, we may continue to use restricted shares of our common stock or stock options to compensate employees/consultants and independent contractors wherever possible. We cannot predict the likelihood or source of raising capital or funds that may be needed to complete the development of our business plan and its stages as outlined above.

 

As a public company, we will incur ongoing expenses associated with professional fees for accounting, legal and a host of other expenses including annual reports and proxy statements, if required. We estimate that these costs will range up to $50,000 per year over the next few years and may be significantly higher if our business volume and transactional activity increases, and we would not be subject to the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 for an opinion on our system on internal controls by our independent audit firm unless and until we exceed $75 million in market capitalization. These obligations may reduce our ability and resources to expand our business plan and activities. We hope to be able to use our status as a public company to increase our ability to use noncash means of settling outstanding obligations (i.e. issuance of restricted shares of our common stock) and compensate independent contractors who provide professional services to us, although there can be no assurances that we will be successful in any of these efforts. We will also reduce compensation levels paid to management (if we attract or retain outside personnel to perform this function) if there is insufficient cash generated from operations to satisfy these costs.

 

We are presently seeking equity and debt financing for both segments of our business. However, these actions, if successful, could result in dilution of the ownership interests of existing shareholders and further dilute common stock book value, and such dilution may be material. The Company may offer shares of its common stock to settle a portion of the professional fees incurred in connection with its registration statement. No negotiations have taken place with any professional and no assurances can be made as to the likelihood that any professional will accept shares in settlement of obligations due them.

 

As of December 31, 2017, we owed $610,410 in accounts payable, accrued expenses and to related parties, a substantial portion of which are past due. The only agreements, written or oral, with any vendors or other providers for payment of services or expenses are with respect to (i) contracted investor relation services, and (ii) compensation to the Company's President, our Chief Executive Officer and our Chief Financial Officer, one of whom is a director. There are no other significant liabilities at December 31, 2017.

 

As of December 31, 2017, the Company had one note payable issued and outstanding to a third-party lender with a total principle of $25,000 and accrued interest of $15,912. The note was due on June 30, 2015, has an interest rate of 12%. This note is in default and remains unpaid at December 31, 2017.

 

As of December 31, 2017, the Company had three notes payable issued and outstanding with a former director with a total principle of $74,500 and accrued interest of $14,366. The three notes, in the amount of $47,000, $15,000 and $12,500, were issued on January 14, 2016. February 10, 2016 and February 29, 2016, respectively. The three notes are due on the earlier of one week after the closing of a certain contemplated farm property acquisition or July 31, 2016, and have an interest rate of 10%. The former director for all three notes is East West Secured Developments, LLC, an Arizona Limited Liability Company (“EWSD”) of which Mr. Brian Loiselle, the EWSD Managing Member, was also a former director of the Company. On June 30, 2016, the Company entered into Amendment #1 to these three notes to extend the due date to one week after the closing of a certain contemplated farm property acquisition or October 31, 2016. The three notes have been reclassified to non-related party debt. See NOTE 6 above.

 

On December 28, 2017, the Company entered into a note payable in the aggregate principal amount of $106,410. The Note matures on March 31, 2018, and bears interest at the rate of 12% per annum. As of December 31, 2017, the note balance and accrued interest is $106,410 and $105, respectively. This note remains unpaid at December 31, 2017

 

As of December 31, 2017, the Company had five convertible notes payable issued and outstanding with a total principle of $222,500 and accrued interest of $5,437. The notes are due December 31, 2017 through October 13, 2020 and have interest rates of 5% to 12%. The notes remain unpaid as of December 31, 2017.

 

Off-Balance Sheet Arrangements

 

We have not entered into 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 and would be considered material to investors.

 

Contractual Obligations

 

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.

 

Item 3. Quantitative and Qualitative Disclosures about Market Risks

 

Not applicable because we are a smaller reporting company.

 

Item 4. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures 

 

Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s President (the “President”) and principal Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company’s President and principal financial officer concluded that the Company’s disclosure controls and procedures were not effective to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s President and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure as a result of continuing material weaknesses (such as the absence of an audit committee and absence of qualified independent directors) in its internal control over financial reporting.

 

Changes in Internal Controls Over Financial Reporting

 

There have been no changes in the Company's internal control over financial reporting during the latest fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

 

 

PART II - OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

The Company owes on promissory notes that have an aggregate principal amount of $74,500 and are simple promissory notes with 10% annual interest to EWSD. The notes are in default, but there is not a default interest provided in the notes. Therefore, the notes continue to accrue interest at 10% per annum until paid or collected. Mr. Loiselle is demanding 18% per month interest for the past four months to the present. The Company has disputed this interest that is not detailed on the notes. Furthermore, Mr. Loiselle is claiming unpaid compensation of $10,000 per month for services without an agreement with the Company. These charges are also being disputed by the Company. These disputes represent a material risk, and may be litigated in the future other than the aforementioned, the Company currently has no other litigation pending, threatened or contemplated, or unsatisfied judgments.

 

From time to time, we are also a party to certain legal proceedings incidental to the normal course of our business including the enforcement of our rights under contracts with contractors and suppliers. While the outcome of these legal proceedings cannot at this time be predicted with certainty, we do not expect that these proceedings will have a material effect upon our financial condition or results of operations.

 

Item 1A. Risk Factors

 

Not applicable because we are a smaller reporting company.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

In October 2013, following the Company's incorporation on October 15, 2013, the Company issued 7,250,00 shares of our common, now 21,750,000 shares following the 3:1 forward stock split, stock to its founder, Derek Cahill, as consideration for the purchase of a business plan along with a website. The acquisition of the business plan and website was valued at $72,500.

 

On October 29, 2013, the Company completed a private placement whereby it issued 5,400,000 shares of common stock to accredited investors at $0.003 per share for total gross proceeds of $18,000.

 

On April 16, 2014, the Company completed a public offering whereby it issued 1,735,800 shares of common stock at $0.042 per share for total gross proceeds of $72,325. The Company's Registration Statement on Form S-1 was declared effective March 6, 2014.

 

On August 7, 2015, the Company granted 100,000 shares of restricted common stock to its chief operating officer. On the date of the grant, the shares were valued at $.61 per share which was the unadjusted closing share price on that date for a fair value of $61,000. The shares vest over a six-month period, with the vested shares recorded on the accompanying balance sheet under equity - shares to be issued. The subject 100,000 shares of common stock will be issued in a subsequent period.

 

The Company amended and restated that certain outstanding promissory note of the Company, dated July 3, 2015, and in the principal amount of $50,025 (the "Default Note"). The replacement convertible promissory note (the “Exchange Note”) matures on December 31, 2017 (the “Maturity Date”), and bears interest at the rate of 8% per annum, and the principal and interest due thereunder may be prepaid at any time. The Exchange Note, together with all interest as accrued, is convertible into shares of the Company’s common stock at $0.11, which amount represents the average trailing average high closing Ask price of the Company’s common stock as of the date of issuance of the Exchange Note.

 

On September 2, 2016, the Company entered into those certain Note Purchase Agreements (collectively, the “Purchase Agreements”) in connection with the issuance of certain convertible promissory notes (collectively, the “Purchase Notes”) in the aggregate principal amount of $50,000. All of the Purchase Notes mature thirty-six months from the date of issuance (the “Maturity Date”), and bear interest at the rate of 10% per annum. Each of the Purchase Notes may be prepaid until the Maturity Date at 110% of the principal and interest amount outstanding. The Purchase Notes, together with all interest as accrued, are each convertible into shares of the Company’s common stock at 50% of the trailing average highest closing bid price of the Company’s common stock on the date of conversion. The Purchase Agreements and the Purchase Notes contain representations, warranties, conditions, restrictions, and covenants of the Company that are customary in such transactions with smaller companies.

 

Also, on September 2, 2016, the Company amended and restated the Default Note. The Exchange Note matures on December 31, 2017, and bears interest at the rate of 8% per annum, and the principal and interest due thereunder may be prepaid at any time. The Exchange Note, together with all interest as accrued, is convertible into shares of the Company’s common stock at $0.11, which amount represents the average trailing average high closing Ask price of the Company’s common stock as of the date of issuance of the Exchange Note.

 

The Purchase Notes may be accelerated by the holders thereof in the event of default. In addition, the amounts due and payable under the Purchase Notes (and, consequently, the number of shares of common stock convertible thereunto) may be increased to 150% of the principal and interest amounts of the Purchase Notes. The Purchase Notes are a direct financial obligation of the Company and are considered a current liability of the Company for accounting purposes.

 

We relied upon Section 4(2) of the Securities Act of 1933, as amended for the above private placement issuances. We believed that Section 4(2) was available because:

 

• None of these issuances involved underwriters, underwriting discounts or commissions

 

• We placed restrictive legends on all certificates issued

 

• No sales were made by general solicitation or advertising

 

• Sales were made only to accredited investors

 

In connection with the above transactions, we provided the following to all investors:

 

• Access to all our books and records

 

• Access to all material contracts and documents relating to our operation

 

• The opportunity to obtain any additional information, to the extent we possessed such information, necessary to verify the accuracy of the information to which the investors were given access.

 

Pursuant to the terms of the Asset Purchase Agreement with GandTex, on December 30, 2016 the Board approved the issuance of 10,000,000 shares of the Company’s Series B Convertible Preferred Stock to GandTex. The shares were released to GandTex concurrent with the closing on January 29, 2017.

 

On January 20 , 2017, the Company entered into a Debt Conversion Agreement (the “Conversion Agreement”) in respect of $13,750 of the accruing monthly fees due to MZHCI, LLC(“MZ”) by the Company pursuant to the Investor Relations Consulting Agreement between MZ and the Company dated April 1, 2015 (the “Debt”) together with a release by MZ in favor of the Company for any claims for reimbursement of any and all due diligence expenses, investigative costs or any other type of fees or costs incurred by MZ related to the recent purchase by the Company of the GandTex Assets. Pursuant to the terms of the Conversion Agreement, the Company issued to MZ an aggregate of 55,000 shares of restricted Series A Convertible Preferred Stock.

 

On February 28, 2017 the Company entered into an Advisory Agreement with Global Business Strategies Inc.(“Global“), a Company owned by the Company’s President Fred G. Luke (“the “Global Agreement”), pursuant to which the Company retained Global to provide management advice and corporate development strategies, and to make Mr. Luke available to serve as the Company’s President, for an aggregate of $8,500 per month and, subject to the condition that Global effected filing of the Company’s its Quarterly Report for the period ending December 31, 2016 on Form 10-Q on a timely basis, Global received an aggregate of 55,000 shares of restricted Series A Convertible Preferred Stock.

 

On June 26, 2017, the Company entered into a Securities Purchase Agreement (“June SPA”) in connection with the issuance of a convertible promissory note (“June Note”) in the aggregate principal amount of $78,000. The June Note matures on June 30, 2018 (the “Maturity Date”), and bears interest at the rate of 12% per annum. After 180 days, the June Note may not be prepaid. Any amount of principal or interest on the June Note which is not paid when due shall bear interest at the rate of twenty two percent (22%) per annum from the due date. The June Note, together with all interest as accrued, is convertible into shares of the Company’s common stock at a 35% discount to

 

the lowest trading price in the 10-day period ending on the latest complete Trading Day prior to the Conversion Date. The June SPA and the June Note contain representations, warranties, conditions, restrictions, and covenants of the Company that are customary in such transactions with smaller companies.

 

On August 14, 2017, the Company entered into a Securities Purchase Agreement (“SAP”) in connection with the issuance of a convertible promissory note (the “Kingdom Note”) in the aggregate principal amount of $65,000. The Note matures on November 14, 2017 (the “Maturity Date”), and bears interest at the rate of 8% per annum. The Note, together with all interest as accrued, is convertible into shares of the Company’s common stock at $0.11 per share. Due to the beneficial conversion feature of this note, the Company recorded $65,000 of debt discount as a contra liability and amortized $31,056 of the discount during the three months ended December 31, 2017. As of December 31, 2017, the note balance and accrued interest is $65,000 and $1,995, respectively. This note is in default and remains unpaid at December 31, 2017, however, the Company and the Payee entered into a Debt Conversion Agreement in February, 2018 pursuant to which the Payee received shares of the Company’s Series A Convertible Preferred Stock in exchange for the full release of any and all obligations related to the Kingdom Note. Refer to NOTE 13. SUBSEQUENT EVENTS.

 

On August 23, 2017, the Company entered into a Securities Purchase Agreement (“SAP”) in connection with the issuance of a convertible promissory note (the “Hayden Note”) in the aggregate principal amount of $50,000. The Note matures on August 23, 2020 (the “Maturity Date”), and bears interest at the rate of 8% per annum. The Note, together with all interest as accrued, is convertible into shares of the Company’s common stock at $0.11 per share. Due to the beneficial conversion feature of this note, the Company recorded $50,000 of debt discount as a contra liability and amortized $4,197 of the discount during the three months ended December 31, 2017. As of December 31, 2017, the note balance and accrued interest is $50,000 and $1,424, respectively. This note remains unpaid at December 31, 2017.

 

On September 12, 2017, the Company entered into a Securities Purchase Agreement (“SAP”) in connection with the issuance of a convertible promissory note (the “First Fire Note”) in the aggregate principal amount of $82,500. The Note matures on September 12, 2018 (the “Maturity Date”), and bears interest at the rate of 5% per annum. The Note, together with all interest as accrued, is convertible into shares of the Company’s common stock at a 35% discount to the lowest trading price in the 21-day period ending on the latest complete Trading Day prior to the Conversion Date. As of December 31, 2017, the note balance and accrued interest is $82,500 and $1,243. This note remains unpaid at December 31, 2017.

 

On October 13, 2017, the Company entered into a Securities Purchase Agreement (“SAP”) in connection with the issuance of a convertible promissory note (the “Escala Note”) in the aggregate principal amount of $20,000. The Note matures on October 13, 2020 (the “Maturity Date”), and bears interest at the rate of 8% per annum. The Note, together with all interest as accrued, is convertible into shares of the Company’s common stock at $0.30 per share. Due to the beneficial conversion feature of this note, the Company recorded $12,667 of debt discount as a contra liability and amortized $913 of the discount during the three months ended December 31, 2017. As of December 31, 2017, the note balance and accrued interest is $20,000 and $346, respectively. This note remains unpaid at December 31, 2017.

 

On December 28, 2017, the Company entered into a note payable in the aggregate principal amount of $106,410. The Note matures on March 31, 2018, and bears interest at the rate of 12% per annum. As of December 31, 2017, the note balance and accrued interest is $106,410 and $105, respectively. This note remains unpaid at December 31, 2017

 

On December 29, 2017, the Company issued 2,000,000 to Duplitrans and the legal counsel of Duplitrans in regards to the agreement with GandTex. On the date of the settlement, October 24, 2017, the shares had a fair market value of $640,000. Accordingly, the Company recorded $640,000 of stock based compensation during the three months ended December 31, 2017. All of the Company’s 10,000,000 Series B Convertible Preferred Stock, previously issued to GandTex, were cancelled during the quarter ended December 31, 2017.

 

As of December 31, 2017, the Company had five convertible notes payable issued and outstanding with a total principle of $222,500 and accrued interest of $5,437. The notes are due December 31, 2017 through October 13, 2020 and have interest rates of 5% to 12%. The notes remain unpaid as of December 31, 2017.

  

 

Item 3. Defaults Upon Senior Securities.

 

None

 

Item 4. Mine Safety Disclosures

 

Not Applicable.

 

Item 5. Other Information.

 

None.

 

 

 

Item 6. Exhibits.

 

Exhibit No.		Description
3.1
3.2
31.1		Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1		Certification of Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2		Certification of Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		XBRL Taxonomy Extension Label Linkbase Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

 

---

 

 

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.

   

	NuLife Sciences, Inc.
Date: February 23, 2018	By:	/s/  Fred Luke
		Fred Luke
		President
		(Duly Authorized Officer and Principal Executive Officer)