BDPT 10-Q
Bioadaptives, Inc. (BDPT)
Form
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the quarterly period ended: |
or
TRANSITION REPORT PERSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
| |
| For the transition period from ___________ to ___________ |
Commission File Number
(Exact name of registrant as specified in its charter) |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) | |
(Address of principal executive offices) | (Zip Code) |
(
(Registrant’s telephone number, including area code)
N/A
(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 registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒
Indicate by check mark whether the registrant has submitted electronically 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). ☒
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non- accelerated filer, or a small 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 | ☐ |
☒ | Smaller reporting Company | ||
Emerging Growth Company |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Table of Contents
PART I – FINANCIAL INFORMATION |
|
|
|
| 3 |
| |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of operations |
| 16 |
|
Item 3. Quantitative and Qualitative Disclosures about Market Risk |
| 23 |
|
| 23 |
| |
|
|
|
|
|
| ||
| 25 |
| |
| 25 |
| |
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds |
| 26 |
|
| 26 |
| |
| 26 |
| |
| 26 |
| |
| 26 |
| |
| 27 |
|
| 2 |
| Table of Contents |
BIOADAPTIVES, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
|
| September 30, |
|
| December 31, |
| ||
|
| 2024 |
|
| 2023 |
| ||
|
|
|
|
|
|
| ||
ASSETS |
| |||||||
Current Assets: |
|
|
|
|
|
| ||
Cash |
| $ |
|
| $ |
| ||
Inventory |
|
|
|
|
|
| ||
Security deposit |
|
|
|
|
|
| ||
Prepaid expense |
|
|
|
|
|
| ||
Total Current Assets |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
License and patent, net |
|
|
|
|
|
| ||
TOTAL ASSETS |
| $ |
|
| $ |
| ||
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ DEFICIT |
| |||||||
Current Liabilities: |
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities |
|
|
|
|
|
| ||
Derivative liabilities |
|
|
|
|
|
| ||
Current portion of convertible notes - net of discount of $ |
|
|
|
|
|
| ||
Notes Payable |
|
|
|
|
|
| ||
Note payable - related party |
|
|
|
|
|
| ||
Total Current Liabilities |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Total Liabilities |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Stockholders’ Deficit: |
|
|
|
|
|
|
|
|
Preferred stock, ($ |
|
|
|
|
|
|
|
|
Series A Preferred Stock |
|
|
|
|
|
| ||
Series B Preferred Stock |
|
|
|
|
|
| ||
Series C Preferred Stock |
|
|
|
|
|
| ||
Series D Preferred Stock |
|
|
|
|
|
| ||
Common stock ($ |
|
|
|
|
|
| ||
Additional paid-in capital |
|
|
|
|
|
| ||
Accumulated deficit |
|
| ( | ) |
|
| ( | ) |
Total Stockholders’ Deficit |
|
| ( | ) |
|
| ( | ) |
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT |
| $ |
|
| $ |
| ||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
| 3 |
| Table of Contents |
BIOADAPTIVES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(UNAUDITED)
|
| Three Months Ended |
|
| Nine months ended |
| ||||||||||
|
| September 30, |
|
| September 30, |
| ||||||||||
|
| 2024 |
|
| 2023 |
|
| 2024 |
|
| 2023 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Revenues |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
Cost of revenue |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Gross Profit (Loss) |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Professional fees |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Impairment of inventory |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Amortization and impairment loss of license and patent |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Total Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income (Expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Unrealized gain (loss) on marketable securities |
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) | ||
Interest expense |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Change in fair value of derivative liabilities |
|
|
|
|
|
|
|
| ( | ) |
|
|
| |||
Loss on settlement of debt |
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) | ||
Total Other Income (Expense) |
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income taxes |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss Per Common Share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Number of Common Shares Outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted |
|
|
|
|
|
|
|
|
|
|
|
| ||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
| 4 |
| Table of Contents |
BIOADAPTIVES, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT
For the three and nine months ended September 30, 2024 and 2023
(UNAUDITED)
|
| Series A Preferred stock |
|
| Series B Preferred stock |
|
| Series C Preferred stock |
|
| Series D Preferred stock |
|
| Common stock |
|
| Additional paid-in |
|
| Accumulated |
|
|
|
| ||||||||||||||||||||||||||||
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| capital |
|
| Deficit |
|
| Total |
| |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Balance, December 31, 2023 |
|
|
|
| $ |
|
|
|
|
| $ |
|
|
| - |
|
| $ |
|
|
| - |
|
| $ |
|
|
|
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ | ( | ) | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series A preferred stock issued for license fee |
|
|
|
|
|
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Series B preferred stock issued for license fee |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Series B preferred stock issued for settlement of debt |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Common stock issued for conversion of debt |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Net loss for the period |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | ||||||
Balance, March 31, 2024 |
|
|
|
| $ |
|
|
|
|
| $ |
|
|
| - |
|
| $ | - |
|
|
| - |
|
| $ |
|
|
|
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ | ( | ) | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series C preferred stock issued for purchase of inventory |
|
| - |
|
|
|
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Common stock issued for conversion of debt |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Net loss for the period |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | ||||||
Balance, June 30, 2024 |
|
|
|
| $ |
|
|
|
|
| $ |
|
|
|
|
| $ |
|
|
| - |
|
| $ |
|
|
|
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ | ( | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series D preferred stock issued for conversion of common stock |
|
| - |
|
|
|
|
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Net loss for the period |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | ||||||
Balance, September 30, 2024 |
|
|
|
| $ |
|
|
|
|
| $ |
|
|
|
|
| $ |
|
|
|
|
| $ |
|
|
|
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ | ( | ) | |||||||||||
| 5 |
| Table of Contents |
|
| Series A Preferred stock |
|
| Series B Preferred stock |
|
| Common stock |
|
| Additional paid-in |
|
| Accumulated |
|
|
|
| ||||||||||||||||||
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| capital |
|
| Deficit |
|
| Total |
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
Balance, December 31, 2022 |
|
|
|
| $ |
|
|
| - |
|
| $ |
|
|
|
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ | ( | ) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock issued for conversion of debt |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Net loss for the period |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | ||||
Balance, March 31, 2023 |
|
|
|
| $ |
|
|
| - |
|
| $ |
|
|
|
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ | ( | ) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock issued for conversion of debt |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Net loss for the period |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | ||||
Balance, June 30, 2023 |
|
|
|
| $ |
|
|
| - |
|
| $ |
|
|
|
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ | ( | ) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series A preferred stock issued for license fee |
|
|
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Series B preferred stock issued for settlement of debt - related party |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Series B preferred stock issued for license fee |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Common stock issued for conversion of debt |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Net loss for the period |
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | ||||
Balance, September 30, 2023 |
|
|
|
| $ |
|
|
|
|
| $ |
|
|
|
|
| $ |
|
| $ |
|
| $ | ( | ) |
| $ | ( | ) | |||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
| 6 |
| Table of Contents |
BIOADAPTIVES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOW
(UNAUDITED)
|
| Nine months ended |
| |||||
|
| September 30, |
| |||||
|
| 2024 |
|
| 2023 |
| ||
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
| ||
Net loss |
| $ | ( | ) |
| $ | ( | ) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
|
|
Change in fair value of derivative liabilities |
|
|
|
|
| ( | ) | |
Impairment of patent |
|
|
|
|
|
| ||
Impairment of inventory |
|
|
|
|
|
| ||
Amortization of license and patent |
|
|
|
|
|
| ||
Amortization of debt discount |
|
|
|
|
|
| ||
Loss on settlement of debt |
|
|
|
|
|
| ||
Unrealized loss on investments in marketable securities |
|
|
|
|
|
| ||
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
|
|
| ( | ) | |
Inventory |
|
| ( | ) |
|
|
| |
Prepaid expense and other current assets |
|
|
|
|
|
| ||
Accounts payable and accrued liabilities |
|
|
|
|
|
| ||
Due to related party |
|
|
|
|
| ( | ) | |
Net Cash Used in Operating Activities |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
Proceeds from issuance for common stock |
|
|
|
|
|
| ||
Proceed from related party |
|
|
|
|
|
| ||
Repayment to related party |
|
|
|
|
| ( | ) | |
Proceeds from notes payable |
|
|
|
|
|
| ||
Proceeds from convertible notes |
|
|
|
|
|
| ||
Proceeds from issuance for preferred stock |
|
|
|
|
|
| ||
Net Cash Provided by Financing Activities |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Net change in cash |
|
| ( | ) |
|
|
| |
Cash at beginning of period |
|
|
|
|
|
| ||
Cash at end of period |
| $ |
|
| $ |
| ||
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL CASH FLOW INFORMATION: |
|
|
|
|
|
|
|
|
Cash paid for income taxes |
| $ |
|
| $ |
| ||
Cash paid for interest |
| $ |
|
| $ |
| ||
|
|
|
|
|
|
|
|
|
NON-CASH INVESTING AND FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
Derivative liability recognized as debt discount |
| $ |
|
| $ |
| ||
Issuance of common stock for conversion of debt |
| $ |
|
| $ |
| ||
Issuance Series A preferred stock for license fee |
| $ |
|
| $ |
| ||
Issuance Series B preferred stock for license fee |
| $ |
|
| $ |
| ||
Issuance Series B preferred stock for settlement of debt - related party |
| $ |
|
| $ |
| ||
Issuance Series C preferred stock for purchase of inventory |
| $ |
|
| $ |
| ||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
| 7 |
| Table of Contents |
BIOADAPTIVES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. DESCRIPTION OF BUSINESS AND HISTORY
Description of business
BioAdaptives, Inc. (“BioAdaptives” or the “Company”) was incorporated in Delaware on April 19, 2013, under the name Apex 8, Inc. Shortly afterwards, the Company’s control person sold his interest; new owners appointed management and changed its name to BioAdaptives, Inc. BioAdaptives’ core business is to investigate, market and distribute natural plant, algal and mushroom-based products and medical devices that improve health and wellness for humans and animals, with an emphasis on pain relief, anti-viral function, and anti-aging properties.
The Company’s corporate office is located at 2620 Regatta Drive, Suite 102, Las Vegas, NV 89128.
2. SUMMARY OF SIGNIFICANT POLICIES
Basis of Presentation
The accompanying unaudited interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s most recent Annual Financial Statements filed with the SEC on Form 10K. In the opinion of management, all adjustments, consisting of normal recurring adjustments necessary for a fair presentation of financial position and the results of operations for the interim period presented, have been reflected herein. The results of operations for the interim period are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements that would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal period, as reported in the Form 10K filed with SEC on April 10, 2024, have been omitted.
Use of estimates
The preparation of consolidated financial statements in conformity with US GAAP requires the Company to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. These estimates and judgments are based on historical information, information that is currently available to the Company, and on various other assumptions that the Company believes to be reasonable under the circumstances. Actual results could differ from those estimates.
Derivative Financial Instruments
The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. We evaluate all of 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 derivative financial instruments, the Company used a Black Scholes valuation 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. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.
| 8 |
| Table of Contents |
Earnings (loss) per share
Basic earnings (loss) per common share is computed by dividing net income (loss) available to common shareholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per common share is computed by dividing income available to common shareholders by the weighted-average number of shares of common stock outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if potentially dilutive securities had been issued.
For the nine months ended September 30, 2024 and 2023, the following common stock equivalents were excluded from the computation of diluted net loss per share as the result of the computation was anti-dilutive.
|
| September 30, |
|
| September 30, |
| ||
|
| 2024 |
|
| 2023 |
| ||
|
| (Shares) |
|
| (Shares) |
| ||
Series A Preferred Stock |
|
|
|
|
|
| ||
Series B Preferred Stock |
|
|
|
|
|
| ||
Series C Preferred Stock |
|
|
|
|
| - |
| |
Series D Preferred Stock |
|
|
|
|
| - |
| |
Convertible notes |
|
|
|
|
|
| ||
Total |
|
|
|
|
|
| ||
3. GOING CONCERN
The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred losses since inception and had an accumulated deficit of $
In order to mitigate the risk related with this uncertainty, the Company plans to issue additional shares of common stock for cash and services during the next 12 months.
| 9 |
| Table of Contents |
4. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
Accounts payable and accrued liabilities aa of September 30, 2024 and December 31, 2023 consists of the following:
|
| September 30, |
|
| December 31, |
| ||
|
| 2024 |
|
| 2023 |
| ||
Accounts payable |
| $ |
|
| $ |
| ||
Credit card |
|
|
|
|
|
| ||
Accrued salary |
|
|
|
|
|
| ||
Accrued interest |
|
|
|
|
|
| ||
Accrued liabilities |
|
|
|
|
|
| ||
|
| $ |
|
| $ |
| ||
5. NOTES PAYABLE
During the nine months ended September 30, 2024, the Company issued notes payable of $
For the nine months ended September 30, 2024, the interest expense on notes payable was $
6. CONVERTIBLE NOTES
Convertible notes as of September 30, 2024 and December 31, 2023 consist of the following:
|
| September 30, |
|
| December 31, |
| ||
|
| 2024 |
|
| 2023 |
| ||
Convertible Notes - originated in April 2018 |
| $ |
|
| $ |
| ||
Convertible Notes - originated in June 2018 |
|
|
|
|
|
| ||
Convertible Notes - originated in October 2018 |
|
|
|
|
|
| ||
Convertible Notes - issued fiscal year 2023 |
|
|
|
|
|
| ||
Total convertible notes payable |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Less: Unamortized debt discount |
|
|
|
|
| ( | ) | |
Total convertible notes |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Less: current portion of convertible notes |
|
|
|
|
|
| ||
Long-term convertible notes |
| $ |
|
| $ |
| ||
For the nine months ended September 30, 2024 and 2023, the interest expense on convertible notes was $
The Company recognized amortization expense related to the debt discount of $
Conversion
During the nine months ended September 30, 2024, the Company converted notes with principal amounts of $
| 10 |
| Table of Contents |
Convertible Notes – Issued during the year ended December 31, 2018
During the year ended December 31, 2018, the Company issued a total principal amount of $
| • | Term two years; |
|
|
|
| • | Annual interest rates |
|
|
|
| • | |
|
|
|
| • |
Convertible Notes - Issued during the year ended December 31, 2023
During the year ended December 31, 2023, the Company issued a total principal amount of $
| • | Term one year; |
|
|
|
| • | Annual interest rates |
|
|
|
| • | |
|
|
|
| • |
7. DERIVATIVE LIABILITIES
The Company analyzed the conversion option for derivative accounting consideration under ASC 815, Derivatives and Hedging, and hedging, and determined that the instrument should be classified as a liability since the conversion option becomes effective at issuance resulting in there being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options. The Company accounts for warrants as a derivative liability due to there being no explicit limit to the number of shares to be delivered upon settlement of all conversion options.
Fair Value Assumptions Used in Accounting for Derivative Liabilities.
ASC 815 requires us to assess the fair market value of derivative liability at the end of each reporting period and recognize any change in the fair market value as other income or expense item.
The Company determined our derivative liabilities to be a Level 3 fair value measurement and used the Black-Scholes pricing model to calculate the fair value as of September 30, 2024. The Black-Scholes model requires six basic data inputs: the exercise or strike price, time to expiration, the risk-free interest rate, the current stock price, the estimated volatility of the stock price in the future, and the dividend rate. Changes to these inputs could produce a significantly higher or lower fair value measurement. The fair value of each convertible note is estimated using the Black-Scholes valuation model.
| 11 |
| Table of Contents |
For the nine months ended September 30, 2024 and year ended December 31, 2023, the estimated fair values of the liabilities measured on a recurring basis are as follows:
|
| Nine months ended |
|
| Year ended |
| ||
|
| September 30, |
|
| December 31, |
| ||
|
| 2024 |
|
| 2023 |
| ||
Expected term |
|
|
|
| ||||
Expected average volatility |
|
|
|
| ||||
Expected dividend yield |
|
|
|
| ||||
Risk-free interest rate |
|
|
|
| ||||
The following table summarizes the changes in the derivative liabilities during the nine months ended September 30, 2024.
Fair Value Measurements Using Significant Observable Inputs (Level 3) |
| |||
|
|
|
| |
Balance - December 31, 2023 |
| $ |
| |
|
|
|
|
|
Addition of new derivatives recognized as debt discounts |
|
|
| |
Addition of new derivatives recognized as loss on derivatives |
|
|
| |
Settled on issuance of common stock |
|
| ( | ) |
(Gain) loss on change in fair value of the derivative |
|
|
| |
Balance - September 30, 2024 |
| $ |
| |
The aggregate loss on derivatives during the nine months ended September 30, 2024 and 2023 was as follows.
|
| Nine months ended |
| |||||
|
| September 30, |
| |||||
|
| 2024 |
|
| 2023 |
| ||
Day one loss due to derivative liabilities on convertible notes |
| $ |
|
| $ |
| ||
(Gain) loss on change in fair value of the derivative liabilities |
|
|
|
|
| ( | ) | |
|
| $ |
|
| $ | ( | ) | |
8. STOCKHOLDERS’ EQUITY
Preferred Stock
On January 24, 2022, the Board of Directors of the Company’s, approved for an increase in the number of authorized shares of the Company’s preferred stock from 5,000,000 shares to
The Company is authorized to issue
| 12 |
| Table of Contents |
Series A Preferred Stock
On February 6, 2020, the Company established its Series A Preferred Stock, par value $
The Company may use the Series A Preferred Stock for purpose of asset acquisition or in satisfaction of recognized debt; they are not otherwise available for sale. The Series A Preferred Stock have enhanced voting privileges under certain circumstances; the collective right to appoint elect one director, at the Holders’ option; and conversion-to-common rights
During the nine months ended September 30, 2024, the Company issued
There are
Series B Preferred Stock
On January 24, 2022, the Company established its Series B Preferred Stock, par value $
The Company may use the Series B Preferred Stock for purpose of asset acquisition or in satisfaction of recognized debt; they are not otherwise available for sale. The Series B Preferred Stock have enhanced voting privileges (100:1); the collective right to appoint elect one director, at the Holders’ option; and conversion-to-common rights
During the nine months ended September 30, 2024, the Company issued
During the nine months ended September 30, 2024, the Company issued
As of September 30, 2024 and December 31, 2023,
Series C Preferred Stock
On January 24, 2022, the Company established its Series C Preferred Stock, par value $
The Company may use the Series C Preferred Stock for purpose of asset acquisition or in satisfaction of recognized debt; they are not otherwise available for sale. The Series C Preferred Stock have enhanced voting privileges (1000:1); the collective right to appoint elect one director, at the Holders’ option; and conversion-to-common rights
| 13 |
| Table of Contents |
During the nine months ended September 30, 2024, the Company issued
As of September 30, 2024 and December 31, 2023,
Series D Preferred Stock
On July 4, 2024, the Company established its Series D Preferred Stock, par value $
The may convert the Series D Preferred Stock to Common Stock at a rate of
During the nine months ended September 30, 2024, the Company issued
As of September 30, 2024 and December 31, 2023,
Common Stock
The Company is authorized to issue
As of September 30, 2024 and December 31, 2023, there were
Fiscal year 2024
During the nine months ended September 30, 2024, the Company issued
Warrant
On February 6, 2022, in conjunction with purchase of patent, the Company granted
| 14 |
| Table of Contents |
9. RELATED PARTY TRANSACTIONS
Notes payable – related party
During the nine months ended September 30, 2024 and 2023, the Company repaid notes payable to a related party of $
During the nine months ended September 30, 2024, the Company issued
As of September 30, 2024 and December 31, 2023, the Company recorded notes payable - related party of $
Due to related party
As of September 30, 2024, and December 31, 2023, the Company owed Dr. Edward E. Jacobs, M.D., our CEO, $
Employee agreements
During the year ended December 31, 2022, the Company accrued salary related to employment agreement in 2022 of $
10. LICENSE AND PATENT
As of September 30, 2024 and December 31, 2023, License and patent consist of the following:
|
| September 30, |
|
| December 31, |
| ||
|
| 2024 |
|
| 2023 |
| ||
License |
| $ |
|
| $ |
| ||
Patent |
|
|
|
|
|
| ||
|
|
|
|
|
|
| ||
Accumulated amortization |
|
| ( | ) |
|
| ( | ) |
|
| $ |
|
| $ |
| ||
For the nine months ended September 30, 2024 and 2023, the Company recorded amortization expense of $
11. COMMITMENTS AND CONTINGENCIES
Short term Leases
The Company has not entered into any long-term leases, contracts or commitments. In November, 2023, the Company leased an office which the term is month to month. For the nine months ended September 30, 2024, the Company incurred rent expense of $
In accordance with ASC 855-10, the Company has analyzed its operations subsequent to September 30, 2024, through the date when financial statements were issued, and has determined to disclose the below subsequent event
On October 10th, 2024, the company filed a certificate of designation of preference shares right and limitations of series C convertible preferred shares .
| 15 |
| Table of Contents |
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FORWARD LOOKING STATEMENTS
This current report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward- looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
Our unaudited financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report.
Our financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.
In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to “common shares” refer to the common shares in our capital stock. As used in this quarterly report, the terms “we”, “us”, “our”, “Company” and “BioAdaptives” mean BioAdaptives Inc., unless otherwise indicated.
1.OUR BUSINESS
Overview
BioAdaptives’ core business is to investigate, market and distribute natural plant and algal-based products and medical devices that improve health and wellness for humans and animals, with an emphasis on weight control, pain relief, anti-viral function, and anti-aging properties. BioAdaptives is reformulating its entire product line and will be bringing out new products in the third quarter of 2024.
Effective November 15, 2021, the Company entered into a marketing agreement for an FDA-cleared Class II medical device, the Lung Flute™. In April 2024, The Company negotiated with the sole owner of the product to assume their existing stock and their rights to all future activities on this item. It intends to actively expand its sales efforts beyond the direct sale effort of its Lung Cleanser to expand to the medical communities, pharmacies, gyms, athletic clubs, and senior communities both in US and Internationally. The Company is also exploring agreements with other medical device manufacturers; the owners of intellectual property relating to medical devices and processes; and marketing companies associated with these manufacturers and owners.
| 16 |
| Table of Contents |
The Company’s current products in development include dietary supplements using natural ingredients and proprietary methods of optimizing the availability of nutrients in foods and beverages. The human products are designed to aid in the control of weight. Empowering the user to lose weight while maintaining more of their lean muscle mass. The initial new product line for humans includes Zeranovia™ for healthy weight loss, Xcellera™ regenerative stem cell activator, Wynovia™ to reduce the loss of lean muscle mass while dieting.
Our animal products expected in third quarter 2024 are dog treats for anti-aging, wellness, and joint repair. These formulations are based upon extensive trials on humans, dogs, horses, hogs, and mice. The canine product are all in the form of treats making delivery and dosing very simple and effective.
Effective February 2, 2022, the Company acquired the exclusive option to purchase U.S. Patent No. 9,783,432B (the “Patent”), covering technology used in enhancing the capability of water to hold significantly larger amounts of oxygen. The Agreement also allows the Company a two-year license to use the technology covered by the Patent, including for further development of oxygenated water products for consumers. The Agreement was more fully discussed in the Company’s Form 8-K filed on February 6, 2022. As a result, The Company formed a wholly-owned subsidiary, MORO2, Inc. to study the feasibility of this technology. Unfortunately, after spending two years’ effort seeking a co-packer to manufacture a test run of this product, no co-packer could be located. As a result, it declined the option to purchase this technology and returned the unit to the inventor.
The Company signed a dealer’s agreement with Pixcelcando out of Europe for their AI Body Composition Analysis technology for US distribution. It is currently carrying out free trial offers to interested parties before its major launching effort in the 2nd and 3rd quarters 2024.
While we continue to investigate and acquire nutraceutical products for humans and animals, all of our current activities are reliant on marketing and distributing products developed and owned by others. We do not own the formulations for our key products and manufacture and market them under an agreement with the developer that requires payment of a royalty and license agreement We are reliant on direct and indirect sales of the line of human products and the All-in-One animal products for revenues, along with Lung Armor™, none of which has produced any significant revenue yet. We have very limited experience in marketing and have yet to develop reliable sales expectations and forecasting.
Market and Marketing
We market our science-based, quality nutraceuticals to a broad base of the population in the U.S., and are exploring marketing prospects in Asia, Australasia, the Middle East, and Europe. The Company’s current target markets also include equine and canine companion animals and equine competitors in the U.S., Australasia and the Middle East.
During 2023, we undertook direct mailing, use of social media, trade advertising and existing connections to create awareness about our human and animal products’ benefits. We are developing affiliate marketing opportunities and recognize that a broader campaign using direct mail, and traditional advertising along with social media and more contemporary marketing tools is necessary.
We are pursuing scientific surveys and other testing to demonstrate the usefulness of our products. While we do not anticipate developing testing protocols suitable for FDA approvals, we expect anecdotal and testimonial reports that will be useful in our marketing efforts. The Company is currently continuing participating in a survey involving the use of PluriPain® by patients suffering from Gadolinium Deposition Disease (“GDD”). The survey, conducted by in collaboration with a research team resident affiliated with at Stanford University, is on-going and thehas produced early promising results, with 60% of a small subject population reporting significant relief. We have undertaken preliminary steps toward developing a survey/research protocol for use of the Lung Flute™ by long-term tobacco smokers and persons regularly exposed to second-hand tobacco smoke.
| 17 |
| Table of Contents |
Our products have not changed, except for refinements and improvements, and we will continue to emphasize the unique qualities, use and function of our nutraceuticals. We intend to create market share in our target demographic by (i) emphasizing the benefits of our proprietary algal-based, all-natural, stimulant-free, non-GMO ingredients that combine with proven Traditional Chinese Medicine and Ayurvedic botanicals into science-based formulations, (ii) investigating additional products in response to market demand and testing, and (iii) utilizing our marketing operation to act as its sales and distribution arm to seek additional channels for sales coverage.
As noted above, we entered into licensing agreements for the MindnMemory™ product during 2022. While the product is all-natural botanical formulations, as our other nutraceutical products, they represent a departure from our existing product lines because they are targeted to specific markets: MindnMemory™ is a nootropic, intended to improve memory, enhances focus, mental clarity. endurance and mental acuity; our initial marketing efforts are oriented toward e-gamers and seniors.
The Lung Flute™, especially when used with PrimiLungs™, shows promise. The device is an FDA-cleared Class II medical device that employs user-generated acoustic waves to loosen lung secretions for expulsion. In short, the device helps users clear their lungs. In conjunction with the anti-viral function of PrimiLungs™, the Lung Armor™ package presents great opportunities in view of current fears of an endemic viral environment. Samples of this device were shipped to Poland for consideration for hospital use. With the Companies expanded interest in this area, we expect greater sales activities will take place in the last two quarters of 2024.
In addition, we have started the use of a formulation of PluriPain® targeted toward the symptoms of pre-menstrual syndrome and menstrual pain. Anecdotal and testimonial reports have long noted that users obtain relief from these symptoms with use of the PluriPain® product, and we have made adjustments and additions to the formulation to target these symptoms. Early reports regarding “PluriPain-PMS” are promising, and we expect marketing efforts to emphasize the usefulness of the new products. We are hoping that a topical pain relief product to be added to this line.
With regard to animal products, in 2020, the Company formed the Livestock Impact Division, which entered into a business relationship with Livestock Impact, Inc. We also entered into a Marketing and Licensing Agreement with the owners of these products providing us with exclusive rights to market these products. The President of the Division is Bruce Colclasure, a National Cutting Horse Association champion who owns and operates the Flying C Bar Ranch and is the breeder and trainer of over 80 NCHA champion cutting horses. Mr. Colclasure uses and endorses our Equine All-in-One™, Equine All-in One™ Plus and Equine All-in-One™ Extreme products and provides valuable feedback and testimonials regarding its function. In addition, a high-performance formulation of our All-in-One product has been and is used by quarter horse trainers at facilities in Oklahoma and New Mexico, with excellent results. We used these results in our marketing efforts in 2023 and to expand our outreach program in 2024 In 2023 we continued a marketing affiliate outreach program, directly contacting the principals of horse clubs and associations, offering discounts, samples and other inducements, seeking to develop “product champion” and “maven” relationships. We have contacted principals in organizations with thousands of members and many more thousands of horses. We have distributed samples and marketing materials to over 40 principals and influencers in regional and breed-specific equine associations and received good feedback from these marketing initiatives. quarter. Our expectation is that the use of the samples by these principals will demonstrate improvements in appearance and performance and that they will, in turn, recommend the product to their members. The Company appointed an exclusive Distributor for its equine line of products in the 3rd Q 2023 and is actively working with them to expand the marketing effort in 2024.
| 18 |
| Table of Contents |
The Company believes that the population growth in the seasoned and geriatric demographic cohort presents a unique opportunity. The World Health Organization has stated that the 60 years and over population segment will more than double from 11% to over 22% between 2000 and 2050, with the absolute number of people aged 60 and over expected to increase to 2 billion within the same period. The Company also recognizes the rising buying power and interests of the Millennials in wellness products and their choice of communication medium being social media and internet. It intends to establish a major focus to capture the anticipated growth in this sector. We believe that our social media promotion program will eventually gain traction and generate revenues, and we are actively seeking a workable, efficient formula to grow consumer engagement and product sales.
The Company believes that international sales represent a significant future growth opportunity as aging population growth outside North America exceeds 1 billion people. The Company plans to aggressively pursue international sales by adding salespeople to its marketing effort, including use of social media, developing a network in high-growth APAC regions, and continuing its efforts to register products and trademarks in attractive foreign markets.
Manufacturing
All of the Company’s nutraceutical products are considered dietary supplements or natural foods, and we carefully avoid making health, drug or disease cure claims that could trigger regulatory compliance issues and affect our ability to market BioAdaptives products. Our active ingredients are all plant-, - or algal-based and sourced worldwide from reputable suppliers who employ stringent compliance and sustainable agriculture practices.
BioAdaptives actively investigates new products, techniques and novel applications of existing products or technology in our research. The Company’s research work has centered on investigations of all-natural supplement formulations that activate primitive cells, including stem cells and their derivatives, and natural ingredients that encourage stem cell proliferation. In 2022, the Company started a line of products utilizing both algae and mushrooms.
With regard to medical devices, we have in April 2024 purchased the LungFlute™ from the sole US affiliated with the patent holder. We do not expect to develop any direct capability to manufacture medical devices for numerous reasons, including a lack of capital and the fact that amortized cost of such facilities, if we were to construct or acquire them, is generally far higher compared to the cost of purchase of a finished product. As noted above, it is our intention to operate primarily as a marketing company, developing consumer markets for nutraceutical products and medical devices that we license or market for others.
Employees
In 2024, The Company has 3 full-time non-executive employees and 2 part-time employees. We retain hourly labor on an as-needed basis and professional consultants to operate our business. The management of the Company expects to continue use of outside consultants, attorneys, and accountants, as necessary, so long as it is seeking and evaluating business opportunities. The need for additional employees, and their availability, will be addressed in connection with the decision whether or not to acquire or participate in specific business opportunities.
| 19 |
| Table of Contents |
2. LIQUITITY AND CAPITAL RESOURCES:
Liquidity -- Financial Performance – Three and Nine months Ended September 30, 2024 and 2023
We had a net loss of $37,649 for the three-month period ended September 30, 2024, which was $24,588 more than the net loss of $13,061 for the three-month period ended September 30, 2023. The change in our results is mainly due to the Change in other income (Expenses), impairment loss of patent and write-off of inventories recorded as const of revenue.
We had a net loss of $527,373 for the nine-month period ended September 30, 2024, which was $83,208 more than the net loss of $444,165 for the nine-month period ended September 30, 2023. The change in our results is mainly due to impairment loss of patent and write-off of inventories recorded as const of revenue.
The following table summarizes key items of comparison and their related increase (decrease) for the Three-month periods ended September 30, 2024, and 2023:
|
| Three Months Ended |
|
|
| |||||||
|
| September 30, |
|
|
|
| ||||||
|
| 2024 |
|
| 2023 |
|
| Change |
| |||
Revenue |
| $ | - |
|
| $ | 15,649 |
|
|
| (15,649 | ) |
Cost of sales |
|
| - |
|
|
| 10,999 |
|
|
| (10,999 | ) |
Operating expenses |
|
| 121,941 |
|
|
| 96,863 |
|
|
| 25,078 |
|
Other income |
|
| 84,292 |
|
|
| 79,152 |
|
|
| 5,140 |
|
Net loss |
| $ | (37,649 | ) |
| $ | (13,061 | ) |
|
| (24,588 | ) |
Revenue
During the three months ended September 30, 2024, the Company did not generate any revenues.
Operation Expenses
Our general, administrative and professional fees are largely attributable to office, rent, advertising, consultants and transfer agent, legal, accounting and audit fees related to our reporting requirements as a public company as well as stock-based compensation for officers, directors and consultants, as well as amortization of license and patent. The increase in operating expenses was primarily due to an impairment of inventory and patent.
Other Income (Expense)
Other expenses consist of interest expenses of $9,697 and $20,625, change in fair value of derivative liabilities of $93,989 and $261,488, unrealized loss on marketable securities of $0 and $11 and loss for debt settlement of $0 and $161,700 for the three months ended September 30, 2024 and 2023, respectively.
Net Loss
As a result of our operating expenses, the Company reported a net loss of $37,649 and $13,061 for the three months ended September 30, 2024 and 2023, respectively.
| 20 |
| Table of Contents |
The following table summarizes key items of comparison and their related increase (decrease) for the nine-month periods ended September 30, 2024, and 2023:
|
| Nine months ended |
|
|
| |||||||
|
| September 30, |
|
|
|
| ||||||
|
| 2024 |
|
| 2023 |
|
| Change |
| |||
Revenue |
| $ | 12,669 |
|
| $ | 21,364 |
|
|
| (8,695 | ) |
Cost of sales |
|
| 8,640 |
|
|
| 13,244 |
|
|
| (4,604 | ) |
Operating expenses |
|
| 268,780 |
|
|
| 175,257 |
|
|
| 93,523 |
|
Other expenses |
|
| (262,622 | ) |
|
| (277,028 | ) |
|
| 14,406 |
|
Net loss |
| $ | (527,373 | ) |
| $ | (444,165 | ) |
|
| (83,208 | ) |
Revenue
Our revenues have been derived entirely from product sales. It reflects a mixture predominantly through wholesale of LiveStock Impact, Inc products and the retail of a small amount of BioAdaptives human supplements. Because of the wholesale element, margins for products are much tighter than previously when all sales were through retail web sales.
Cost of Sales
Our cost of sales is primarily derived from contract manufacturing expenses and shipping and handling expenses related to customer fulfillment. We also expense marketing expenses, which includes the cost of samples or products provided for promotional purposes and website content development. We have contracted for consulting services relating to website and product label redesign and another web sales outreach campaign, and we expect expenses to accrue for such services in 3rd.Q 2024, and beyond.
Operation Expenses
Our general, administrative and professional fees are largely attributable to office, rent, advertising, consultants and transfer agent, legal, accounting and audit fees related to our reporting requirements as a public company as well as stock-based compensation for officers, directors and consultants, as well as amortization of license and patent. The increase in operating expenses was primarily due to an impairment of inventory and patent.
Other Income (Expense)
Other expenses consist of interest expenses of $82,281 and $123,941, change in fair value of derivative liabilities of $185,291 and $8,644, other income of $4,950 and 0, unrealized loss on marketable securities of $0 and $31 and loss on settlement of debt $0 and $161,700 for the nine months ended September 30, 2024 and 2023, respectively.
Net Loss
As a result of our operating expenses the Company reported a net loss of $527,373 and $444,165 for the nine months ended September 30, 2024 and 2023, respectively.
Capital Resources – Balance Sheet and Cash Flows
Our balance sheet as of September 30, 2024, reflects current assets of $46,393, including cash in the amount of $43,893. We currently meet cash requirements by infusions of cash from issuance of notes to finance partners, through RegA subscriptions and advances from shareholders. Most of these notes have conversion features that require accounting for derivative liabilities. We are hopeful that future Reg. A+ offerings will help to reduce our financing costs but can provide no assurances as to whether our offering will be successful.
|
| September 30, |
|
| December 31, |
|
|
|
| |||
|
| 2024 |
|
| 2023 |
|
| Change |
| |||
Current Assets |
| $ | 46,393 |
|
| $ | 88,557 |
|
|
| (42,164 | ) |
Current Liabilities |
| $ | 1,851,754 |
|
| $ | 1,750,629 |
|
|
| 101,125 |
|
Working Capital (Deficiency) |
| $ | (1,805,361 | ) |
| $ | (1,662,072 | ) |
|
| (143,289 | ) |
| 21 |
| Table of Contents |
Cash Flows
|
| Nine months ended |
|
|
|
| ||||||
|
| September 30, |
|
|
|
| ||||||
|
| 2024 |
|
| 2023 |
|
| Change |
| |||
Cash used in Operating Activities |
| $ | (148,979 | ) |
| $ | (132,477 | ) |
|
| (16,502 | ) |
Cash used in Investing Activities |
| $ | - |
|
| $ | - |
|
|
| - |
|
Cash provided by Financing Activities |
| $ | 132,096 |
|
| $ | 259,144 |
|
|
| (127,048 | ) |
Net Increase (Decrease) In Cash During Period |
| $ | (16,883 | ) |
| $ | 126,667 |
|
|
| (143,550 | ) |
Cash Flows from Operating Activities
Net cash used in operating activities during the nine months ended September 30, 2024, was $148,979, an increase of $16,502 from net cash used of $132,477 in operating activities during the nine months ended September 30, 2023.
Cash Flows from Financing Activities
Net cash provided by financing activities during the nine months ended September 30, 2024 was $132,096 from proceeds from notes payable and issuance of preferred stock. Net cash provided by financing activities during the nine months ended September 30, 2023 was $259,144 from proceeds from issuance of common stock, related party, net of repayment, and convertible notes.
As of September 30, 2024, we have insufficient cash to operate our business at the current level for the next twelve months and insufficient cash to achieve our business goals. The success of our business plan beyond the next 12 months is contingent upon us obtaining additional financing. We intend to fund operations through debt and/or equity financing arrangements, which may be insufficient to fund our capital expenditures, working capital, or other cash requirements. We do not have any formal commitments or arrangements for the sales of stock or the advancement or loan of funds at this time. There can be no assurance that such additional financing will be available to us on acceptable terms, or at all.
Critical Accounting Estimates -- Going Concern
The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred losses since inception and had an accumulated deficit of $6,861,859, and a working capital deficit of $1,805,361 as of September 30, 2024. The Company requires capital for its contemplated operational and marketing activities. The Company’s ability to raise additional capital through the future issuances of common stock is unknown. Obtaining additional financing, successful development of the Company’s contemplated plan of operations, and the transition, ultimately, to profitable operations are necessary for the Company to continue operations. The ability to successfully resolve these factors raises substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements of the Company do not include any adjustments that may result from the outcome of these aforementioned uncertainties.
In order to mitigate the risk related with this uncertainty, the Company plans to issue additional shares of common stock for cash and services during the next 12 months.
Off-Balance Sheet Arrangements
We have no 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, and capital expenditures or capital resources that are material to stockholders.
| 22 |
| Table of Contents |
Critical Accounting Policies and Estimates
The discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with the accounting principles generally accepted in the United States of America. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. We evaluate our estimates and assumptions on an ongoing basis and base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for the judgments we make about the carrying value of assets and liabilities that are not readily apparent from other sources. Because these estimates can vary depending on the situation, actual results may differ from these estimates. Making estimates and judgments about future events is inherently unpredictable and is subject to significant uncertainties, some of which are beyond our control. Should any of these estimates and assumptions change or prove to have been incorrect, it could have a material impact on our results of operations, financial position and statement of cash flows.
Recent Accounting Pronouncements
The Company has evaluated recent pronouncements through Accounting Standards Updates (“ASU”) and believes that none of them will have a material impact on the Company’s financial position, results of operations or cash flows.
Item 3. 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 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
As required by Rule 13a-15 under the Securities Exchange Act of 1934, we have carried out an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this quarterly report, September 30, 2024. This evaluation was carried out under supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer.
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our company’s reports filed under the Securities Exchange Act of 1934 is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
Based upon that evaluation, including our Chief Executive Officer and Chief Financial Officer, we have concluded that our disclosure controls and procedures were ineffective as of the end of the period covered by this report due to a material weakness in our internal control over financial reporting, which is described below.
| 23 |
| Table of Contents |
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934). Management has assessed the effectiveness of our internal control over financial reporting as of September 30, 2024, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. As a result of this assessment, management concluded that, as of September 30, 2023, our internal control over financial reporting was not effective. Our management identified the following material weaknesses in our internal control over financial reporting, which are indicative of many small companies with small staff: (i) inadequate segregation of duties and effective risk assessment. and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines.
We plan to take steps to enhance and improve the design of our internal control over financial reporting. During the period covered by this quarterly report on Form 10-Q, we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we hope to implement the following changes during our fiscal year ending December 31, 2024: (i) appoint additional qualified personnel to address inadequate segregation of duties and ineffective risk management; and (ii) adopt sufficient written policies and procedures for accounting and financial reporting. The remediation efforts set out in (i) and (ii) are largely dependent upon our securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may be adversely affected in a material manner.
To a certain extent, the size of our operation provides inherent checks and balances relative to internal controls: Because of our limited staff size and the integration of our executives and directors in operations, the prospect for significant internal control failures resulting in unreliable financial statements or worse is remote. Regardless, we recognize the importance of multiple layers of reporting and controls and are working toward improving our capabilities.
Changes in Internal Control over Financial Reporting
There was no change in the Company’s internal control over financial reporting that occurred during the Company’s most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
| 24 |
| Table of Contents |
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
At this time, we know of no pending legal proceedings to which we are a party, either individually or in the aggregate. We are from time-to-time, during the normal course of our business operations, subject to various litigation claims and legal disputes. There are no such claims or disputes pending at this time and we have not been notified of any possible claims or disputes.
Item 1A. Risk Factors
As a “smaller reporting company”, we are not required to provide the information required by this Item.
Covid-19 Pandemic Impact and Risk
At this time, it is not possible to fully assess the impact of the COVID-19 pandemic on the Company’s operations and capital requirements. While we have noted that economic headwinds have eased generally, our business is impacted by numerous other influences. Business activities from 1Q 2020 onward were substantially curtailed: Our key executives were unable to travel, which impacted on our financing operations. Consumer demand was generally down in our target markets, even though we offer products that are generally considered to promote health. We delayed much of our marketing activity due to travel, funding and perceived demand issues. We re-launched our marketing efforts during 1Q 2022, but these have slowed to gain traction. The other factors impeding the growth of our business have significantly changed: travel restrictions have eased, and our finance partners have cash for investments or debt issuance. Consumer demand for our products, however, has not increased significantly. We believe this has more to do with poor reception to our marketing initiatives and the fact that we operate in a crowded market space, with several better-known and capitalized competitors. The CDC reports that US children and adults should remain vigilant to new mutations of the COVID-19 virus, and that the pandemic will likely continue to impact groups that comprise our intended consumers. Should the pandemic reignite, the Company may be faced with the same headwinds we saw during 2021, which may adversely affect the Company’s ability to (i) retain employees and consultants; (ii) obtain additional financing on terms acceptable to the Company, if at all; (iii) delay regulatory submissions and approvals, if required; (iv) delay, limit or preclude the Company from securing manufacturing sites, partnerships or marketing agreements; (v) delay, limit or preclude the Company from achieving technology or product development goals, milestones, or objectives; and (vi) preclude or delay entry into joint venture or partnership arrangements. The occurrence of any one or more of such events may affect the Company’s ability to execute its business plan. During 2Q 2022, the Company commenced sponsorship of a COVID Long Hauler Survey, providing funding for scientific uses and samples of our pain, pulmonary and sleep products to participants. While we do not (and cannot) make any manner of drug-type or treatment claims regarding disease, the Company has received anecdotal reports that certain combinations of our products provide relief from certain long-term COVID symptoms, including brain fog, persistent pain, and sleep disruptions. Although we are careful not to make any COVID-related claims in our marketing materials, we intend to pursue this survey for general scientific purposes to determine additional uses for our products and has continue to support covid related testings.
The Company’s priority and commitment is to the health and security of its team members, their families and its partners through this unprecedented pandemic.
The Company has no insight into what would happen if COVID is to affect the economy again with its possible resurgence.
| 25 |
| Table of Contents |
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
The Company has no senior securities, but has outstanding instruments previously characterized as unsecured convertible debentures. These instruments are not senior to any other Company obligation. The Company arranged extension and forbearance agreements with the holders of the 12% Debentures, which were issued in 2018 and were due at various times in 2020. Our agreement called for the extension of these obligations on the same terms until December 31, 2021, in exchange for current interest payments and delivery of 280,000 shares of its common stock (total). We are currently in default on these obligations but are working on an alternative resolution.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Nothing to add.
Item 6. Exhibits
| 26 |
| Table of Contents |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
| BioAdaptives Inc. |
|
| (Registrant) |
|
Dated: November 19, 2024 |
|
|
| /s/ James Keener. |
|
| James Keener |
|
| Chief Executive Officer |
|
| 27 |