Item 7. Management’s Discussion and Analysis
ITEM 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion provides information regarding
the results of operations for the years ended December 31, 2024 and 2023, and our financial condition, liquidity and capital resources
as of December 31, 2024 and 2023. The financial statements and the notes thereto contain detailed information that should be referred
to in conjunction with this discussion.
The following discussion and analysis should be read
in conjunction with and our historical financial statements and the accompanying notes included elsewhere in this Annual Report on Form
10-K, as well as the Risk Factors and the Cautionary Note Regarding Forward-Looking Statements included above.
Results of Operations
For the Years Ended
2024
2023
Operating Expenses
Amortization
$ 52,870
$ 48,259
General and Administrative
61,470
99,619
Professional Fees
144,807
155,157
Research and Development
99,625
112,444
Share-Based Compensation
5,416
—
Total operating expenses
364,188
415,479
Loss from Operations
(364,188 )
(415,479 )
Net Loss
$ (364,188 )
$ (415,479 )
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Revenues
We had no revenues for the years ended December
31, 2024 and 2023.
Gross profit and expenses
The Company’s net loss was $364,188 for the
year ending December 31, 2024 compared to $415,479 for the year ending December 31, 2023. These expenses were primarily incurred
for professional fees, share-based compensation related to the operations of the Company’s business, research and development and
other general and administrative expenses. Significant changes from the prior year include:
•
Professional fees decreased by $10,350, year over year going to $144,807 from $155,157 as legal fees decreased and overcame an increase in auditing fees. Accounting activity remained unchanged over prior year totals.
•
Share-based compensation increased to $5,416 from $Nil. The company issued share options as a form of compensation to a consultant.
•
Research and development decreased by $12,819 from $112,444 to $99,625 as the Company scaled back on new research and moves toward leveraging the positive study findings. New projects will be targeted investments expanding the development of the AAGP ® molecule through institutional collaborations and industry partnerships. The Company is making a concentrated effort to find industry partners to move research forward.
•
General and administrative expenses pushed downward again year over year, changing by $38,149 from $99,619 to $61,470 due to the spending cuts in marketing, press releases and social media exposure. Majority of new information is currently released through updates to Company website.
Our expenses in 2024 were $364,188 which included
$144,807 in professional fees. We operate the Company by hiring outside consultants to assist us with management, strategic planning,
organization and daily operations. These professional consulting services are related to marketing, accounting, merger opportunities
as well as research development services. The Company also incurred total research and development expenses of $99,625 and general
and administrative costs of $61,470 during the year ended December 31, 2024.
Liquidity and Capital Resources
As at
December 31,
2024
2023
Cash
$ (4,697 )
$ 20,408
Working Capital
$ (127,694 )
$ (23,238 )
At December 31, 2024, we had a $4,697 shortfall in
cash and negative $3,647 in total current assets. As of December 31, 2024, we had a negative working capital equity deficit position
of $127,694. Although as of the date of this Annual Report we do not believe we have sufficient capital to meet cash flow projections
and carry forward our business objectives in the short-term, the Company will need additional working capital to continue its medical
research or to be successful in any future business activities and continue to pay its liabilities. There can be no assurance that
in the future we will be able to raise capital from outside sources in sufficient amounts to fund our business.
The failure to secure adequate outside funding would
have an adverse effect on our plan of operation and results therefrom and a corresponding negative impact on stockholder liquidity.
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Sources and Uses of Cash for the Years ended
December 31, 2024 and 2023
Net Cash Used in Operating Activities
During the year ended December 31, 2024, net cash
used in operating activities decreased $152,939 from $375,989 to $223,050 for the years ended December 31, 2023 and 2024, respectively.
This decrease was predominantly due to the overall decreased spending on web marketing, news releases, and social media, as well as significant
reduction in new research spending. Informative updates have been posted on the Company website, reducing the need for news releases and
associated expenses.
Net Cash Used in Investing Activities
During the year ended December 31, 2024, net cash
used in investing activities decreased slightly by $1,098 as we continue to maintain global patent applications. Current year spending
was narrowed to maintenance of existing patent family. Net cash used for investing activities for the year ended December 31, 2023 was
$59,153. Net cash used for investing activities for the year ended December 31, 2024 was $58,055.
Net Cash Provided by Financing Activities
During the year ended December 31, 2024, net cash
provided by financing activities reduced by $174,000 from $430,000 to $256,000 for the years ended December 31, 2023 and 2024 respectively.
This decrease was predominantly due to a reduction in funding of new research through private placement of common stock shares.
Going Concern
The accompanying financial statements have been prepared
in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”), which contemplate continuation
of the Company as a going concern. The history of losses and the potential inability for the Company to make a profit from selling
a good or service has raised substantial doubt about our ability to continue as a going concern. In spite of the fact that the current
cash obligations of the Company are relatively minimal, given the cash position of the Company, we have very little cash to operate. We
intend to fund the Company and attempt to meet corporate obligations by selling common stock. However, the Company’s common
stock is at a low price and trading is not consistent.
Off-Balance Sheet Arrangements
None.
Contractual Obligations
As a smaller reporting company, we are not required
to provide the information required by paragraph (a)(5) of this Item.
Critical Accounting Policies
The preparation of financial statements in conformity
with U.S. GAAP requires management to make a variety of estimates and assumptions that affect (i) the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities as of the date of the financial statements, and (ii) the reported amounts of revenues
and expenses during the reporting periods covered by the financial statements.
Our management routinely makes judgments and estimates
about the effect of matters that are inherently uncertain. As the number of variables and assumptions affecting the future resolution
of the uncertainties increase, these judgments become even more subjective and complex. Although we believe that our estimates and assumptions
are reasonable, actual results may differ significantly from these estimates. Changes in estimates and assumptions based upon actual results
may have a material impact on our results of operation and/or financial condition. Our significant accounting policies are disclosed in
Note 2 to the Financial Statements included in this Form 10-K.
While all of the significant accounting policies are
important to the Company’s financial statements, the following accounting policies and the estimates derived there from have been
identified as being critical.
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Share-Based Compensation
The Company has granted warrants and options to purchase
shares of the Company’s common stock to various parties for consulting services. The fair values of the warrants and options
issued have been estimated using the Black-Scholes Option Pricing Model.
The Company accounts for stock compensation with persons
classified as employees for accounting purposes in accordance with ASC 718 “Compensation – Stock Compensation”, which
recognizes awards at fair value on the date of grant and recognition of compensation over the service period for awards expected to vest. Cliff
Vesting is used and awards vest on the last day of the vesting period. The fair value of stock options is determined using the Black-Scholes
Option Pricing Model. The fair value of common shares issued for services is determined based on the Company’s stock price on the
date of issuance.
Share-based compensation for non-employees in exchange
for goods and services used or consumed in an entity’s own operations are also recorded at fair value on the measurement date and
accounted for in accordance with ASC 718. The measurement of share-based compensation is subject to periodic adjustment as the underlying
instruments vest. The fair value of stock options is estimated using the Black-Scholes Option Pricing Model and the compensation charges
are amortized over the vesting period.
Intangible Assets – Patent and Patent Application
Costs
The Company owns intangible assets consisting of certain
patents and patent applications. Intangible assets acquired separately are measured on initial recognition at cost. Following initial
recognition, intangible assets are carried at cost less any accumulated amortization and any accumulated impairment losses. Subsequent
expenditures are capitalized only when they increase the future economic benefits embodied in the specific asset to which they relate.
The Company capitalizes its patent application costs. All other expenditures are recognized in profit or loss as incurred.
As at December 31, 2024, the Company does not hold
any intangible assets with indefinite lives.
Intangible assets with finite lives are amortized
over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The
amortization method and amortization period of an intangible asset with a finite life is reviewed at least annually.
Changes in the expected useful life or the expected
pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortization period or method,
as appropriate, and are treated as changes in accounting estimates.
Amortization is recognized in profit or loss on a
straight-line basis over the estimated useful lives of the Company’s patents, whereas no amortization has been recognized on the
not yet approved patent application costs for any new patents as at December 31, 2024.
Sales and Marketing
The Company is currently not selling or marketing any products.
Inflation
Although management expects that our operations will
be influenced by general economic conditions, we do not believe that inflation had a material effect on our results of operations during
the year ending December 31, 2024.
ITEM 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a smaller reporting company, we are not required to provide the information
required by this item.
ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this Item begins on page F-1 of this Annual
Report on Form 10-K and is incorporated into this part by reference.
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ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.