Attached files
file | filename |
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EX-99.3 - TODOS MEDICAL LTD. | ex99-3.htm |
EX-99.1 - TODOS MEDICAL LTD. | ex99-1.htm |
EX-23.1 - TODOS MEDICAL LTD. | ex23-1.htm |
8-K/A - TODOS MEDICAL LTD. | form8-ka.htm |
Exhibit 99.2
Provista Diagnostics, Inc.
Financial Statements As
of March 31, 2021 and for the three
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CONTENTS | ||
FINANCIAL STATEMENTS | ||
Balance Sheet | 1 | |
Statements of Operations | 2 | |
Statements of Changes in Stockholder’s Equity | 3 | |
Statements of Cash Flows | 4 | |
Notes to Financial Statements | 5 – 10 |
PROVISTA DIAGNOSTICS, INC.
BALANCE SHEET
MARCH 31, 2021
| 2021 | |||
ASSETS | ||||
CURRENT ASSETS | ||||
Cash | $ | 73,550 | ||
Accounts receivable (Note 4) | 65,752 | |||
Total current assets | 139,302 | |||
PROPERTY AND EQUIPMENT, NET (NOTE 3) | 183,333 | |||
SECURITY DEPOSITS | 3,225 | |||
$ | 325,860 | |||
LIABILITIES AND STOCKHOLDER’S EQUITY | ||||
CURRENT LIABILITIES | ||||
Accounts payable and accrued liabilities (Note 4) | $ | 82,369 | ||
Due to related party (Note 4) | 1,104 | |||
Total current liabilities | 83,473 | |||
COMMITMENT AND CONTINGENCY (NOTE 5) | ||||
STOCKHOLDER’S EQUITY | ||||
Common stock, $.001 par value, 1,000 shares authorized, 1,000 issued and outstanding | 1 | |||
Additional paid-in capital | 299,999 | |||
Retained earnings | (57,613 | ) | ||
Total stockholder’s equity | 242,387 | |||
$ | 325,860 |
See accompanying notes.
1 |
PROVISTA DIAGNOSTICS, INC.
STATEMENTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2021 AND 2020 | ||||||||
2021 | 2020 | |||||||
REVENUES (NOTE 4) | $ | 132,972 | $ | - | ||||
OPERATING EXPENSES (NOTE 4) | 136,505 | 112,097 | ||||||
LOSS FROM OPERATIONS | (3,533 | ) | (112,097 | ) | ||||
OTHER EXPENSES | (1,539 | ) | (4,442 | ) | ||||
NET LOSS | $ | (5,072 | ) | $ | (116,539 | ) |
See accompanying notes.
2 |
PROVISTA DIAGNOSTICS, INC.
STATEMENT OF CHANGES IN STOCKHOLDER’S EQUITY
THREE MONTHS ENDED MARCH 31, 2021 AND 2020 | ||||||||||||||||||||
Common stock * | ||||||||||||||||||||
Shares
issued and outstanding | Amount | Additional paid-in capital | Accumulated deficit | Total | ||||||||||||||||
Balances - December 31, 2019 | 1,000 | $ | 1 | $ | 249,999 | $ | (7,167 | ) | $ | 242,833 | ||||||||||
Net loss | - | - | - | (116,539 | ) | (116,539 | ) | |||||||||||||
Balances - March 31, 2020 | 1,000 | 1 | 249,999 | (123,706 | ) | 126,294 | ||||||||||||||
Balances - December 31, 2020 | 1,000 | $ | 1 | $ | 299,999 | $ | (52,541 | ) | $ | 247,459 | ||||||||||
Net loss | - | - | - | (5,072 | ) | (5,072 | ) | |||||||||||||
Balances - March 31, 2021 | 1,000 | $ | 1 | $ | 299,999 | $ | (57,613 | ) | $ | 242,387 |
* 1,000 shares authorized; $0.001 par value
See accompanying notes.
3 |
PROVISTA DIAGNOSTICS, INC.
STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 2021 AND 2020 | ||||||||
2021 | 2020 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net loss | $ | (5,072 | ) | $ | (116,539 | ) | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
Depreciation | 12,500 | 12,500 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | 78,718 | - | ||||||
Prepaid expenses | 6,743 | 1,562 | ||||||
Accounts payable and accrued liabilities | 10,594 | 8,024 | ||||||
Due (from) to related party | (47,455 | ) | 139,264 | |||||
Total adjustments | 61,100 | 161,350 | ||||||
Net cash provided by operating activities | 56,028 | 44,811 | ||||||
NET CHANGE IN CASH | 56,028 | 44,811 | ||||||
CASH - BEGINNING | 17,522 | 11,596 | ||||||
CASH - ENDING | $ | 73,550 | $ | 56,407 | ||||
Supplemental Disclosure of Cash Flow Information: | ||||||||
Interest paid | $ | - | $ | - | ||||
Income taxes paid | $ | - | $ | - |
See accompanying notes.
4 |
PROVISTA DIAGNOSTICS, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization and Business Activity
Provista Diagnostics, Inc. ( “Provista” or the “Company”) was incorporated in the state of Nevada on November 12, 2009 and subsequently converted to a Delaware corporation on February 8, 2012. The Company operates a laboratory for purposes of test validation and commercialization activities related to the distribution and sampling of COVID-19 testing. The Company’s principal office location and laboratory is located in Alpharetta, Georgia.
Cash
From time to time, the Company maintains cash balances with financial institutions in excess of federally insured limits.
Accounts Receivable
Accounts receivable are uncollateralized customer obligations due under normal trade terms. The carrying amount of accounts receivable may be reduced by an allowance that reflects management’s best estimate of the amounts that will not be collected. Management individually reviews all accounts receivable balances and based on assessment of current credit worthiness, estimates the portion, if any, of the balance that will not be collected. All accounts or portions thereof determined to be uncollectible are written off to the allowance for doubtful accounts. As management believes that the accounts are fully collectible and are therefore stated at net realizable value, management has not recorded an allowance for doubtful accounts.
Revenue Recognition
The Company’s revenue is principally derived from services provided under a laboratory consulting agreement with its customer, and is recognized in accordance with, Accounting Standards Update (“ASU”) No. 2014-09, “Revenues from Contracts with Customers” (“ASC Topic 606”). The laboratory consulting agreement has a fee for service arrangement.
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NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Under the laboratory consulting agreement, the Company is responsible for test validation and commercialization activities related to the distribution and sample processing of COVID-19 tests. The single performance obligation in this contract is a stand-ready obligation as the Company must provide a service of standing ready to provide services, as and when the customer decides. Revenues are recognized over time as the customer simultaneously receives and consumes the benefits provided as the Company performs the services. The Company uses an output method (time-elapsed) to measure its progress and performance toward satisfaction of the performance obligation as time elapsed represents the work performed over the time period, which corresponds with, and thereby best depicts, the transfer of control to the client. Revenues are recognized using a straight-line measure of progress as the control of the services is provided to the customer ratably over the term of the contract. The Company typically invoices its customers on a monthly basis with payment terms that provide customers pay within 30 days of invoice. Amounts that have been invoiced are recorded in accounts receivable and in unearned revenue or revenue, depending on whether transfer of control to customers has occurred. During the three-month period ended March 31, 2021, revenues related to this revenue stream amounted to $100,000.
The Company also derives revenues from markups on expense reimbursements. These amounts are recognized at a point in time when reimbursable expenses are paid by the Company. During the year ended December 31, 2020, revenues related to this revenue stream amounted to approximately $33,000.
Major Customers
One customer, of which during April 2021 became a related party (Note 4), accounted for all revenue earned during the three months ended March 31, 2021, as well as all accounts receivable outstanding as of March 31, 2021.
Property and Equipment
Property and equipment is recorded at cost. Expenditures for major betterments and additions are charged to the asset accounts, while replacements, maintenance and repairs which do not improve or extend the lives of the respective assets are charged to expense as incurred.
Depreciation
Depreciation of property and equipment is computed using straight-line methods over the estimated useful lives of the assets, which is five years.
Income Taxes
The Company accounts for income taxes under the liability method whereby deferred tax assets and liabilities are provided for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
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NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Deferred tax assets, net of a valuation allowance, are recorded when management believes it is more likely than not that the tax benefits will be realized. Realization of the deferred tax assets is dependent upon generating sufficient taxable income in the future. The amount of deferred tax asset considered realizable could change in the near term if estimates of future taxable income are modified.
The Company assesses its tax positions in accordance with “Accounting for Uncertainties in Income Taxes” as prescribed by the Accounting Standards Codification, which provides guidance for financial statement recognition and measurement of uncertain tax positions taken or expected to be taken in a tax return for open tax years (generally a period of three years from the later of each return’s due date or the date filed) that remain subject to examination by the Company’s major tax jurisdictions.
The Company assesses its tax positions and determines whether it has any material unrecognized liabilities for uncertain tax positions. The Company records these liabilities to the extent it deems them more likely than not to be incurred. Interest and penalties related to uncertain tax positions, if any, would be classified as a component of income tax expense.
The Company believes that it does not have any significant uncertain tax positions requiring recognition or measurement in the accompanying financial statements.
Advertising Costs
Advertising costs are charged to operations as incurred and are included in operating expenses. The amounts charged for the three months ended March 31, 2021 and 2020 were approximately $4,000 and $2,000, respectively.
Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements, in conformity with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the balance sheet date and the reported amounts of revenues and expenses for the periods presented. Actual results could differ from those estimates.
NOTE 2. ECONOMIC DEPENDENCY
All of the Company’s revenues are derived from agreements with one customer. The Company has incurred continuous losses and has equity of $242,387 as of March 31, 2021. In the absence of achieving profitable operations, the Company is dependent on continued financing from its parent company.
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NOTE 2. ECONOMIC DEPENDENCY (Continued)
The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts of liabilities that might be necessary should the Company be unable to continue as a going concern.
NOTE 3. PROPERTY AND EQUIPMENT
Property and equipment at March 31, 2021 consisted of the following:
Laboratory equipment | $ | 237,366 | ||
Furniture and fixtures | 12,634 | |||
250,000 | ||||
Less: accumulated depreciation | 66,667 | |||
$ | 183,333 |
Depreciation expense amounted to $12,500 and $12,500 for the three months ended March 31, 2021 and 2020, respectively.
NOTE 4. RELATED PARTY TRANSACTIONS
Due to Related Party
Ascenda Biosciences LLC (“Ascenda”), a company related by virtue of common ownership, provides the Company certain management and administrative services. During the three months ended March 31, 2021 and 2020, Ascenda charged the Company approximately $14,000 and $30,000, respectively, related to these services. As of March 31, 2021, approximately $1,000 was due to Ascenda.
Laboratory Consulting Agreement
On April 2, 2020, the Company entered into a laboratory consulting agreement with Emerald Organic Products, Inc. (“Emerald”), Todos Medical, Ltd (“Todos”) and Corona Diagnostics, LLC (“CD”) collectively referred to as the “Lab Customers”. Under the terms of the agreement, the Lab Customers pay the Company a fee of $50,000 per month for use of the Company’s laboratory, as well as expense reimbursement for various operational costs including payroll and benefits, property and equipment purchases, IT support, marketing and advertising, travel, and laboratory supplies and services, among other expenses. As of March 31, 2021, amounts due from the Lab Customers related to this agreement amounted to $65,752. For the three months ended March 31, 2021, revenues related to this agreement amounted to approximately $133,000.
On April 19, 2021, Todos entered into an agreement to purchase all the outstanding shares of the Company from Strategic Investment Holdings, LLC, the sole owner of all the outstanding securities of the Company, for $7,500,000.
8 |
NOTE 5. COMMITMENT AND CONTINGENCY
Lease Commitment
The Company leases laboratory facilities under a non-cancelable operating lease expiring in 2023. A portion of the rent is reimbursed by Ascenda. The lease is guaranteed by an unrelated individual.
The approximate future minimum rentals under these leases for the periods subsequent to March 31, 2021 are as follows:
2022 | $ | 123,000 | ||
2023 | 126,000 | |||
$ | 249,000 |
Rent expense, net of reimbursements from Ascenda, amounted to $30,125 and $19,452 for the three month periods ended March 31, 2021 and 2020, respectively.
Global Pandemic
In March 2020 the World Health Organization declared the novel strain of coronavirus (COVID-19) a global pandemic and recommended containment and mitigation measures worldwide. Although, as of the date of issuance of these financial statements, this pandemic has not had a material adverse affect upon the Company, future potential impact, if any, can not be determined at this time.
NOTE 6. INCOME TAX PROVISION (BENEFIT)
The effective tax rates for the three month periods ended March 31, 2021 and 2020, differed from the maximum federal statutory tax rate principally due to state income tax benefits and changes in the deferred tax asset valuation allowance.
In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based upon historical taxable losses and projections for future taxable income, management believes as of March 31, 2021 it is more likely than not that the Company will not realize the benefits of these deductible differences, and as a result, a valuation allowance has been recorded.
9 |
NOTE 6. INCOME TAX PROVISION (BENEFIT) (Continued)
Deferred income tax assets and liabilities at March 31, 2021 consisted of the following:
Deferred tax assets (liabilities): | ||||
Net operating loss carryforwards | $ | 3,626,000 | ||
Accrued expenses | 20,000 | |||
R&D tax credit | 1,825,000 | |||
Charitable contributions | 8,000 | |||
Depreciable assets | (19,000 | ) | ||
5,460,000 | ||||
Less: valuation allowance | (5,460,000 | ) | ||
Deferred tax asset, net | $ | - |
As of March 31, 2021, the Company had approximately $55,259,000 in Federal net operating loss carryforwards, with $8,723,000 available for use to offset taxable income in future years due to IRC Section 382 limitations
NOTE 7. SUBSEQUENT EVENTS
The Company has evaluated subsequent events through June 30, 2021, which is the date the accompanying financial statements were available to be issued.
10 |