What changed in this filing

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Item 1. Financial Statements

2021-11-15 compared with 2021-08-13 · 188 added, 127 removed, 185 unchanged (63% of the section changed)

Financial Statements (unaudited)

BIOPHARMA, INC.

INNOVATIONS, INC.

FINANCIAL STATEMENTS

MONTHS ENDED JUNE 30, 2021 AND 2020

AND SIX MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

CONSOLIDATED UNAUDITED BALANCE SHEETS

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NOTES TO THE CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS

BIOPHARMA, INC.

INNOVATIONS, INC.

BALANCE SHEETS

September 30, 2021

March 31, 2021

Current Assets

Cash and cash equivalents

Prepaid expenses and

other current assets

Prepaid expenses and other current assets

Total current assets

and Stockholders’ Equity

Accounts payable and

accrued liabilities

Liabilities and Stockholders’ Equity

Current Liabilities

Accounts payable and accrued liabilities

Total liabilities

Commitments and contingencies

Stockholders’

Stockholders’ Equity (Deficit)

Common stock, par value $ 0.001 per share;

1,000,000,000

1,000,000,000 shares authorized;

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( 47,427,709 )

Total stockholders’

Liabilities and Stockholders’ Equity

Total stockholders’ equity (deficit)

Total Liabilities and Stockholders’ Equity

accompanying notes to the consolidated financial statements.

BIOPHARMA, INC.

INNOVATIONS, INC.

STATEMENTS OF OPERATIONS

Months Ended June 30,

Three Months Ended

September 30,

Six Months Ended

September 30,

Operating expenses:

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Loss from operations

Interest income

Total other income,

( 1,116,610 )

( 1,213,836 )

Basic and diluted loss

per common share:

Other income (expense)

Total other income (expenses), net

$ ( 504,358 )

$ ( 472,932 )

$ ( 1,116,593 )

$ ( 1,213,170 )

Basic and diluted loss per common share

Weighted average number of common shares outstanding

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accompanying notes to the consolidated financial statements.

BIOPHARMA, INC.

INNOVATIONS, INC.

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

MONTHS ENDED JUNE 30, 2021 AND 2020

months ended June 30, 2021 (Unaudited)

Balance – March 31, 2021

AND SIX MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

Three months ended September 30, 2021 (Unaudited)

Number of shares

Paid-in Capital

Accumulated Deficit

Balance as of June 30, 2021

$ ( 48,039,944 )

Issuance of common shares

Fair value of vested stock options

Cancellation of common shares

Cancellation of common shares, shares

Balance as of September 30, 2021 (Unaudited)

$ ( 48,544,302 )

Three months ended September 30, 2020 (Unaudited)

Number of shares

Paid-in Capital

Accumulated Deficit

Balance – June 30, 2020

$ ( 47,287,096 )

Fair value of vested stock options

Balance as of June 30, 2021 (Unaudited)

Balance as of September 30, 2020 (Unaudited)

$ ( 47,760,028 )

months ended June 30, 2020 (Unaudited)

Six months ended September 30, 2021 (Unaudited)

Number of shares

Paid-in Capital

Accumulated Deficit

Balance as of March 31, 2021

$ ( 47,427,709 )

Cancellation of common shares

Issuance of common shares

Fair value of vested stock options

( 1,116,593 )

Balance as of September 30, 2021 (Unaudited)

$ ( 48,544,302 )

Six months ended September 30, 2020 (Unaudited)

Number of shares

Paid-in Capital

Accumulated Deficit

Balance – March 31, 2020

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Fair value of vested stock options

Balance as of June 30, 2020 (Unaudited)

( 1,213,170 )

accompanying notes to the consolidated financial statements.

BIOPHARMA, INC.

( 1,213,170 )

Balance as of September 30, 2020 (Unaudited)

$ ( 47,760,028 )

INNOVATIONS, INC.

STATEMENTS OF CASH FLOWS

Months Ended June 30,

Six Months Ended September 30,

Cash flows from operating activities

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$ ( 1,213,170 )

Adjustments to reconcile net loss to net cash

used in operating activities

Adjustments to reconcile net loss to net cash used in operating activities

Fair value of vested stock options

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Accounts payable and accrued liabilities

lease liability

Operating lease liability

Net cash used in operating activities

( 1,134,773 )

Cash flows from financing activities:

Proceeds from issuance of common shares and warrants

Proceeds from note payable

Net cash provided by

financing activities

Net cash provided by financing activities

Net decrease in cash

Cash and cash equivalents

- beginning of period

Cash and cash equivalents

- end of period

( 1,037,785 )

Cash and cash equivalents - beginning of period

Cash and cash equivalents - end of period

Supplemental disclosure of cash flow information:

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accompanying notes to the consolidated financial statements.

BIOPHARMA, INC.

INNOVATIONS, INC.

TO CONSOLIDATED FINANCIAL STATEMENTS

MONTHS ENDED JUNE 30, 2021 AND 2020

AND SIX MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

BUSINESS OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Biopharma, Inc.

(the “Company”, “we”, “us” or “our”), was incorporated in the State of

Nevada on June 29, 2007.

Innovations, Inc.

(the “Company”, “we”, “us” or “our”), was incorporated in the State

of Nevada on June 29, 2007.

2015, the Company developed a new class of cannabinoids known as cannabosides, which were discovered through application of the Company’s

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cannabinoid prodrug pharmaceuticals.

October 2021, the Company reorganized its corporate structure and created the following two wholly-owned operating subsidiaries:

Graphium Biosciences, Inc., a Nevada corporation (“Graphium”), into which the Company contributed all of its drug development

and (ii) Daedalus Ecosciences, Inc., a Nevada corporation (“Daedalus”).

Graphium plans to focus its business activities

on the health and wellness of people, with a particular focus on advancing our broad portfolio of over 100 glycosylated cannabinoid prodrugs.

Daedalus plans to focus its business activities on the health and wellness of the planet, with a particular focus on deploying technological

innovations and eco-friendly solutions to remedy difficult environmental situations in economically challenged communities.

accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement

of liabilities and commitments in the normal course of business.

As reflected in the accompanying financial statements, during the three

months ended June 30, 2021, the Company incurred a net loss of $ 612,235 and used $ 562,701 of cash in our operating activities.

factors raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date that the

financial statements are issued.

The financial statements do not include any adjustments that might be necessary should the Company be

unable to continue as a going concern.

ability to continue as a going concern is dependent on the Company attaining and maintaining profitable operations in the future and/or

raising additional capital to meet its obligations and repay its liabilities arising from normal business operations when they come due.

We estimate as of June 30, 2021, we will have sufficient funds to operate the business for the next three months.

Since our existing

cash balances are estimated to be insufficient to fund our currently planned level of operations, we will need additional financing

or other sources of capital to fund our planned future operations.

Further, these estimates could differ if we encounter unanticipated

difficulties, or if our estimates of the amount of cash necessary to operate our business prove to be wrong, and we use our available

financial resources faster than we currently expect.

No assurance can be given that any future financing or capital, if needed, will

be available or, if available, that it will be on terms that are satisfactory to the Company.

As reflected in the accompanying financial statements, during the six

months ended September 30, 2021, the Company incurred a net loss of $ 1,116,593 and used $ 945,712 of cash in our operating activities.

These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date that

the financial statements are issued.

The financial statements do not include any adjustments that might be necessary should the Company

be unable to continue as a going concern.

The ability to continue as a

going concern is dependent on the Company attaining and maintaining profitable operations in the future and/or raising additional capital

to meet its obligations and repay its liabilities arising from normal business operations when they come due.

We estimate as of September

30, 2021, we had sufficient funds to operate the business for 15 months as $4,881,000 of the $5,000,000 equity line secured in August

2021 with an institutional investor was available for additional equity issuances through December 31, 2022.

Although our existing cash

balances and the availability of funds under our equity line are estimated to be sufficient to fund our currently planned level of operations,

we are actively seeking additional financing and other sources of capital to fund our planned future operations at a lower cost of capital,

including a potential revolving line of credit with a financial institution.

However, these estimates could differ if we encounter

unanticipated difficulties, or if our estimates of the amount of cash necessary to operate our business prove to be wrong, and we use

our available financial resources faster than we currently expect.

No assurance can be given that any future financing or capital, if

needed, will be available or, if available, that it will be on terms that are satisfactory to the Company.

do not presently have, nor do we expect in the near future to have, significant revenue to fund our business from our operations, and

will need to obtain most of our necessary funding from external sources in the near term.

will need to obtain all of our necessary funding from external sources in the near term.

Since inception, the Company has experienced

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and we expect to continue to rely on these sources of capital in the future.

If we raise additional funds by issuing equity or

convertible debt securities, our existing stockholders’ ownership will be diluted, and obtaining commercial loans would increase

our liabilities and future cash commitments.

If we cannot raise the money that we need in order to continue to develop our business,

we will be forced to delay, scale back or eliminate some or all of our proposed operations.

If we raise additional funds by issuing equity or convertible

debt securities, our existing stockholders’ ownership will be diluted, and obtaining commercial loans would increase our liabilities

and future cash commitments.

If we cannot raise the money that we need in order to continue to develop our business, we will be forced

to delay, scale back or eliminate some or all of our proposed operations.

Company is subject to risks and uncertainties of the COVID-19 pandemic that could adversely impact our business, our liquidity and access

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of Presentation

The consolidated financial statements

include the accounts of the Company and its wholly owned subsidiary, Vitality Healthtech, Inc.

(dissolved in May 2021),

and have been prepared in accordance with accounting principles generally accepted in the United States of America.

Intercompany balances

and transactions have been eliminated in consolidation.

consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Graphium Biosciences,

Inc., Daedalus Ecosciences, Inc., and Vitality Healthtech, Inc.

(dissolved in May 2021), and have been prepared in accordance with accounting

principles generally accepted in the United States of America.

Intercompany balances and transactions have been eliminated in consolidation.

The Company’s fiscal year end is December 31.

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The Company has never suffered a loss due to such excess balances.

Financial Instruments

Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded

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 derivative financial instruments, the Company uses a probability weighted average Black-Scholes-Merton Option Pricing

model to value the derivative instruments at inception and on subsequent valuation dates.

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.

Company follows the asset and liability method of accounting for income taxes.

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is recognized as income (loss) in the period that includes the enactment date.

The Company determines whether

a contract is, or contains, a lease at inception.

Right-of-use assets represent the Company’s right to use an underlying asset

during the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease.

Right-of-use assets and lease liabilities are recognized at lease commencement based upon the estimated present value of unpaid lease

payments over the lease term.

The Company uses its incremental borrowing rate based on the information available at lease commencement

in determining the present value of unpaid lease payments.

The Company had no lease commitments for longer than one year as of June 30,

Company determines whether a contract is, or contains, a lease at inception.

Right-of-use assets represent the Company’s right

to use an underlying asset during the lease term, and lease liabilities represent the Company’s obligation to make lease payments

arising from the lease.

Right-of-use assets and lease liabilities are recognized at lease commencement based upon the estimated present

value of unpaid lease payments over the lease term.

The Company uses its incremental borrowing rate based on the information available

at lease commencement in determining the present value of unpaid lease payments.

The Company had no lease commitments for longer than

one year as of September 30, 2021.

The laboratory space lease in Rocklin, California ends on March 31, 2022.

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for services.

The Company accounts for such grants issued and vesting based on ASC 718, Compensation-Stock Compensation, whereby

the value of the award is measured on the date of grant and recognized for employees as compensation expense on the straight-line basis

over the vesting period.

Recognition of compensation expense for non-employees is in the same period and manner as if the Company had

paid cash for the services.

The Company recognizes the fair value of stock-based compensation within its Statements of Operations with

classification depending on the nature of the services rendered.

The Company accounts for such grants issued and vesting based on ASC 718, Compensation-Stock Compensation, whereby the

value of the award is measured on the date of grant and recognized for employees as compensation expense on the straight-line basis over

the vesting period.

Recognition of compensation expense for non-employees is in the same period and manner as if the Company had paid

cash for the services.

The Company recognizes the fair value of stock-based compensation within its Statements of Operations with classification

depending on the nature of the services rendered.

fair value of the Company’s stock options is estimated using the Black-Scholes-Merton Option Pricing model, which uses certain

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SCHEDULE OF ANTIDILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNINGS PER SHARE

September 30,

and Patent Application Costs

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costs are expensed as incurred.

Company operates in one segment for the development of pharmaceuticals products.

In accordance with the “Segment Reporting”

Topic of the ASC, the Company’s chief operating decision maker has been identified as the Chief Executive Officer, who reviews

operating results to make decisions about allocating resources and assessing performance for the entire Company.

Existing guidance, which

is based on a management approach to segment reporting, establishes requirements to report selected segment information quarterly and

to report annually entity-wide disclosures about products and services, major customers, and the countries in which the entity holds

material assets and reports revenue.

All material operating units qualify for aggregation under “Segment Reporting” due to

their similar customer base and similarities in:

of September 30, 2021, the Company operates in one segment for the development of pharmaceutical products.

In accordance with the “Segment

Reporting” Topic of the ASC, the Company’s chief operating decision maker has been identified as the Chief Executive Officer,

who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company.

guidance, which is based on a management approach to segment reporting, establishes requirements to report selected segment information

quarterly and to report annually entity-wide disclosures about products and services, major customers, and the countries in which the

entity holds material assets and reports revenue.

All material operating units qualify for aggregation under “Segment Reporting”

due to their similar customer base and similarities in:

economic characteristics;

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and distribution processes.

Since the Company operates in one segment, all financial information required by “Segment Reporting”

can be found in the accompanying financial statements.

Since the Company currently operates in one segment, all financial information required by “Segment

Reporting” can be found in the accompanying financial statements.

As of October 1, 2021, we began

operating under two segments:

(i) Graphium Biosciences, Inc., a wholly-owned subsidiary of the Company, will report the

operating results of our health and wellness innovations serving people, with a particular focus on advancing our broad portfolio of

over 100 glycosylated cannabinoid prodrugs, and (ii) Daedalus Ecosciences, Inc., a wholly-owned subsidiary of the Company,

will report the operating results of our health and wellness innovations serving the planet, with a particular focus on deploying

technological innovations and eco-friendly solutions to remedy difficult environmental situations in economically challenged

Accounting Pronouncements

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STOCK OPTIONS

summary of the Company’s stock option activity during the three months ended June 30, 2021 is as follows:

summary of the Company’s stock option activity during the six months ended September 30, 2021 is as follows:

SUMMARY OF STOCK OPTION ACTIVITY

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Balance outstanding at March 31, 2021

Balance outstanding at June 30, 2021

Balance exercisable at June 30, 2021

summary of the Company’s stock options outstanding and exercisable as of June 30, 2021 is as follows:

Balance outstanding at September 30, 2021

Balance exercisable at September 30, 2021

summary of the Company’s stock options outstanding and exercisable as of September 30, 2021 is as follows:

SCHEDULE OF STOCK OPTIONS OUTSTANDING AND EXERCISABLE

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Weighted Average Grant- date Stock Price

Options Outstanding, June 30, 2021

Options Outstanding, September 30, 2021

$ 1.50 - 1.95

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$ 4.00 - 4.70

Options Exercisable, June 30, 2021

Options Exercisable, September 30, 2021

$ 1.50 - 1.95

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$ 4.00 - 4.70

the three months ended June 30, 2021, we expensed total stock-based compensation related to stock options of $ 46,539 .

There is no remaining

unamortized cost of the outstanding stock-based awards at June 30, 2021.

At June 30, 2021, the 5,997,544 outstanding stock options had

no intrinsic value.

summary of warrants to purchase common stock during the three months ended June 30, 2021 is as follows:

the six months ended September 30, 2021, we expensed total stock-based compensation related to stock options of $ 46,539 .

remaining unamortized cost of the outstanding stock-based awards at September 30, 2021.

At September 30, 2021, the 5,997,544 outstanding

stock options had no intrinsic value.

STOCKHOLDERS’ EQUITY (DEFICIT)

of Common Stock and Warrants

September 28, 2021, pursuant to a registration statement on Form S-1 filed with the Securities and Exchange Commission, the Company

sold 500,000 shares

of its common stock and warrants to purchase 500,000

shares of the Company’s common stock, resulting

in proceeds to the Company of $ 119,000 .

The common stock and warrants were sold under an equity line to a single investor, at a price of $ 0.238

per share and the exercise price for the warrants

Company has issued warrants to purchase common stock in conjunction with financing arrangements.

A summary of the warrant activity during the six months ended September 30, 2021 is as follows:

SUMMARY OF WARRANTS ACTIVITY

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Expired/Cancelled

Balance outstanding and exercisable at June 30, 2021

June 30, 2021, the 146,668 outstanding stock warrants had no intrinsic value.

Balance outstanding and exercisable at September 30, 2021

September 30, 2021, the 646,668 outstanding stock warrants had no intrinsic value.

COMMITMENTS AND CONTINGENCIES

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“insurer”) demanding that the Company reimburse the insurer for sums advanced by the insurer without the Company’s

knowledge or consent to a former director of the Company as defense costs in connection with a claim purportedly arising under a

previous director and officer liability insurance policy.

The Company believes it has no liability for this claim on the basis

of, among other things, Nevada law, the Company’s governing documents and the language of the policy.

Accordingly, as of June 30,

2021, no contingent liability has been recorded in the Company’s consolidated statements of financial condition for this matter.

knowledge or consent to a former director of the Company as defense costs in connection with a claim purportedly arising under a previous

director and officer liability insurance policy.

The Company believes it has no liability for this claim on the basis of, among other

things, Nevada law, the Company’s governing documents and the language of the policy.

Accordingly, as of September 30, 2021, no

contingent liability has been recorded in the Company’s consolidated statements of financial condition for this matter.

SUBSEQUENT EVENTS

October 2021, the Company, pursuant to the registration statement on Form S-1 filed with the Securities and Exchange Commission,

shares of its common stock to a single investor

in connection with the equity line.

to an agreement between the Company and the investor, no warrants were issued as part of this transaction.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements