Bioquest Corp 10-Q for FY2021 Q3
Bioquest Corp (BQST)
About this 10-Q
Bioquest Corp filed this 10-Q on June 15, 2021, covering the quarter ended January 31, 2021 (FY2021 Q3).
Headline figures
Quarter ended January 31, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Net loss
- $667.29K
- compared with a net loss of $194.77K a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
Mark One
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 31, 2021
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to _______
COMMISSION FILE NO. 000-1568628
BIOQUEST CORP.
(Exact name of registrant as specified in its charter)
| Nevada | 80-0975853 | 5149 | ||
| (State or Other Jurisdiction of | IRS Employer | Primary Standard Industrial | ||
| Incorporation or Organization) | Identification Number | Classification Code Number |
4570 Campus Dr., Suite 23
Newport Beach, CA 92660
(Address of principal executive offices)
Phone: (714) 978-4425
(Registrant’s telephone number)
Indicate by checkmark whether the issuer: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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. Yes [X] No [ ]
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [ ] No [X]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| [ ] | Large accelerated filer | [ ] | Accelerated filer | |
| [X] | Non-accelerated filer | [X] | Smaller reporting company | |
| [ ] | Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
Applicable Only to Issuer Involved in Bankruptcy Proceedings During the Preceding Five Years.
N/A
Applicable Only to Corporate Registrants
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
| N/A |
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
| Class | Outstanding as of June 14, 2021 | |
| Common Stock, $0.001 | 8,730,733 |
Table of Contents
| PART I | ||
| Item 1. | Condensed Financial Statements | 3 |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 13 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 16 |
| Item 4. | Controls and Procedures | 16 |
| PART II | ||
| Item 1. | Legal Proceedings | 18 |
| Item 1A. | Risk Factors | 18 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 18 |
| Item 3. | Defaults Upon Senior Securities | 18 |
| Item 4. | Mining Safety Disclosures | 18 |
| Item 5. | Other Information | 18 |
| Item 6. | Exhibits | 19 |
| Signatures | 20 |
| 2 |
PART I – FINANCIAL INFORMATION
| 3 |
Condensed Balance Sheets
| (Unaudited) | ||||||||
| January 31, 2021 | April 30, 2020 | |||||||
| Assets | ||||||||
| Current Assets | ||||||||
| Cash | $ | 60 | $ | 166 | ||||
| Prepaid Expenses | 22,237 | - | ||||||
| Total Current Assets | 22,297 | 166 | ||||||
| Total Assets | $ | 22,297 | $ | 166 | ||||
| Liabilities and Stockholders’ Deficit | ||||||||
| Current Liabilities | ||||||||
| Accounts Payable and Accrued Liabilities | $ | 284,130 | $ | 28,745 | ||||
| Accrued Compensation | 987,750 | 70,000 | ||||||
| Notes Payable, Net of Note Discount of $37,293 | 17,240 | - | ||||||
| Derivative Liability | 138,555 | |||||||
| Total Current Liabilities | 1,427,675 | 98,745 | ||||||
| Long-Term Liabilities | ||||||||
| Notes Payable | 40,000 | 40,000 | ||||||
| Total Liabilities | 1,467,675 | 138,745 | ||||||
| Stockholders’ Deficit | ||||||||
| Common Stock, $.001 Par Value 500,000,000 Authorized; | ||||||||
| 8,350,733 and 8,044,233 Issued and Outstanding | ||||||||
| Respectively | 8,351 | 8,044 | ||||||
| Stock Payable | - | 50,000 | ||||||
| Additional-Paid-in-Capital | 7,685,978 | 7,323,285 | ||||||
| Accumulated Deficit | (9,139,707 | ) | (7,519,908 | ) | ||||
| Total Stockholders’ Deficit | (1,445,378 | ) | (138,579 | ) | ||||
| Total Liabilities and Stockholders’ Deficit | $ | 22,297 | $ | 166 | ||||
See Notes to Condensed Financial Statements
| 4 |
Condensed Statements of Operations
(Unaudited)
| Three Months Ended | Three Months Ended | Nine Months Ended | Nine Months Ended | |||||||||||||
| January 31, 2021 | January 31, 2020 | January 31, 2021 | January 31, 2020 | |||||||||||||
| Revenues | $ | - | $ | - | $ | - | $ | - | ||||||||
| Operating Expenses | ||||||||||||||||
| Compensation | 384,000 | 66,500 | 1,024,000 | 66,500 | ||||||||||||
| Stock Compensation Expense | 100,000 | 114,770 | 250,000 | 114,770 | ||||||||||||
| Professional Fees | 36,683 | 7,270 | 142,526 | 33,943 | ||||||||||||
| General and Administrative Expenses | 43,943 | 6,227 | 98,902 | 7,790 | ||||||||||||
| Total Operating Expenses | 564,626 | 194,767 | 1,515,428 | 223,003 | ||||||||||||
| Operating Loss | (564,626 | ) | (194,767 | ) | (1,515,428 | ) | (223,003 | ) | ||||||||
| Derivative Expense | 85,775 | - | 85,775 | - | ||||||||||||
| Interest Expense | 16,887 | - | 18,595 | 1,650 | ||||||||||||
| Net Loss | $ | (667,288 | ) | $ | (194,767 | ) | $ | (1,619,798 | ) | $ | (224,653 | ) | ||||
| Basic and Fully Dilutive Loss per Share | $ | (0.08 | ) | $ | (0.02 | ) | $ | (0.20 | ) | $ | (0.08 | ) | ||||
| Weighted Average Common Shares - | ||||||||||||||||
| Basic and Fully Diluted | 8,345,733 | 7,990,900 | 8,181,833 | 2,791,718 | ||||||||||||
See Notes to Condensed Financial Statements
| 5 |
Condensed Statement of Changes in Stockholders’ Deficit
For the Three, Six and Nine Months Ended January 31, 2021 and 2020
(Unaudited)
| Additional | ||||||||||||||||||||||||
| Common Shares | Par Value $.001 | Stock Payable | Paid-In Capital | Accumulated Deficit | Stockholders’ Deficit | |||||||||||||||||||
| Balance April 30, 2020 | 8,044,233 | $ | 8,044 | $ | 50,000 | $ | 7,323,285 | $ | (7,519,908 | ) | $ | (138,579 | ) | |||||||||||
| Net Loss for the Three Months Ended July 31, 2020 | - | - | - | - | (322,230 | ) | (322,230 | ) | ||||||||||||||||
| Shares Issued for Cash | 50,000 | 50 | - | 99,950 | - | 100,000 | ||||||||||||||||||
| Balance July 31, 2020 | 8,094,233 | 8,094 | 50,000 | 7,423,234.55 | (7,842,138 | ) | (360,809 | ) | ||||||||||||||||
| Shares Issued for Cash | 10,000 | 10 | - | 19,990 | - | 20,000 | ||||||||||||||||||
| Shares Issued for Stock Payable | 70,000 | 70 | (50,000 | ) | 49,930 | - | - | |||||||||||||||||
| Shares Issued for Employment and Consulting | - | |||||||||||||||||||||||
| Services | 150,000 | 150 | - | 149,850 | - | 150,000 | ||||||||||||||||||
| Shares Issued for Prepaid Marketing Services | 9,000 | 9 | - | 17,991 | - | 18,000 | ||||||||||||||||||
| Net Loss for the Three Months Ended October 31, 2020 | - | - | - | - | (630,282 | ) | (630,282 | ) | ||||||||||||||||
| Balance October 31, 2020 | 8,333,233 | 8,333 | - | 7,660,996 | (8,472,420 | ) | (803,091 | ) | ||||||||||||||||
| Shares Issued for Cash | 7,500 | 8 | - | 14,992 | - | 15,000.00 | ||||||||||||||||||
| Shares Issued for Services | 10,000 | 10 | - | 9,990 | - | 10,000.00 | ||||||||||||||||||
| Net Loss for the Three Months Ended January 31, 2021 | - | - | - | - | (667,288 | ) | (667,288 | ) | ||||||||||||||||
| 8,350,733 | $ | 8,351 | $ | - | $ | 7,685,978 | $ | (9,139,707 | ) | $ | (1,445,378 | ) | ||||||||||||
| Balance April 30, 2019 | 102,233 | $ | 102 | $ | - | $ | 7,151,957 | $ | (7,160,879 | ) | $ | (8,820 | ) | |||||||||||
| Net Loss for the Three Months Ended July 31, 2019 | (18,180 | ) | (18,180 | ) | ||||||||||||||||||||
| Shares Issued for Settlement of debt | 135,000 | 135 | - | 26,865 | 27,000 | |||||||||||||||||||
| Balance July 31, 2019 | 237,233 | 237 | - | 7,178,822 | (7,179,059 | ) | - | |||||||||||||||||
| Net Loss for the Three Months Ended October 31, 2019 | (11,706 | ) | (11,706 | ) | ||||||||||||||||||||
| Balance October 31, 2019 | 237,233 | 237 | - | 7,178,822 | (7,190,765 | ) | (11,706 | ) | ||||||||||||||||
| Stock Issued Services Employment and Consulting | 7,747,000 | 7,747 | 89,523 | 97,270 | ||||||||||||||||||||
| Shares Issued for Payment of Professional Services | ||||||||||||||||||||||||
| Stock Issued for Cash | 60,000 | 60 | - | 54,940 | - | 55,000 | ||||||||||||||||||
| Stock Issuable for Cash | - | - | 30,000 | - | - | 30,000 | ||||||||||||||||||
| Stock Issuable for Issuance of Notes Payable | - | - | 17,500 | - | - | 17,500 | ||||||||||||||||||
| Net Loss for Three Months Ended January 31, 2020 | - | - | - | - | (194,767 | ) | (194,767 | ) | ||||||||||||||||
| Balance January 31, 2020 | 8,044,233 | $ | 8,044 | $ | 47,500 | $ | 7,323,285 | $ | (7,385,532 | ) | $ | (6,703 | ) | |||||||||||
See Notes to Condensed Financial Statements
| 6 |
Condensed Statements of Cash Flows
(Unaudited)
| Nine Months Ended | Nine Months Ended | |||||||
| January 31, 2021 | January 31, 2020 | |||||||
| Cash Flows from Operating Activities | ||||||||
| Net Loss | $ | (1,619,798 | ) | $ | (224,653 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities | ||||||||
| Stock Based Compensation | 150,000 | 114,770 | ||||||
| Non-Cash Marketing | 7,200 | - | ||||||
| Derivative Expense net of Debt discount | 101,357 | |||||||
| Increase in Accounts Payable and Accrued Liabilities | 255,385 | 24,610 | ||||||
| Increase in Accrued Compensation | 917,750 | - | ||||||
| Net Cash Used from Operating Activities | (188,106 | ) | (85,273 | ) | ||||
| Cash from Investing Activities | - | |||||||
| Cash from Financing Activities | ||||||||
| Sale of Common Stock for Cash | 135,000 | 85,000 | ||||||
| Stock Issued for Professional Services | - | - | ||||||
| Issuance of Note Payable | 53,000 | 35,000 | ||||||
| Net Cash Provided by Financing Activities | 188,000 | 120,000 | ||||||
| Net Increase in Cash | (106 | ) | 34,727 | |||||
| Beginning Cash | 166 | - | ||||||
| Ending Cash | $ | 60 | $ | 34,727 | ||||
| Supplemental Information | ||||||||
| Non-Cash Items: | ||||||||
| Shares Issued for Extinguishment of Accounts Payable | $ | 27,000 | ||||||
See Notes to Condensed Financial Statements
| 7 |
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
January 31, 2021
(Unaudited)
NOTE 1 - ORGANIZATION AND OPERATIONS
Bioquest Corp. (the “Company”) was originally incorporated in the State of Nevada on May 17, 2011 as Renaissance Films Inc. On September 26, 2011, the Company changed its name to Sedition Films Inc. and on May 1, 2014, the Company changed its name to Select-TV Solutions, Inc. The Company was organized for the purpose of producing documentary films. On October 10, 2019, there was a change in control of the Company with the purchase of 270,000,000 of the Company’s Common stock and on that date the Company changed its name to Bioquest Corp. On October 12, 2019 the Company elected a new Board of Directors and approved a 2,000 to 1 Reverse Stock Split resulting in the reduction of the outstanding shares of the Company’s Common Stock from 454,254,585 shares to 237,233 shares. All common shares and per common share data in these financial statements and related notes hereto have been retroactively adjusted to account for the effect of the reverse stock split for all periods presented. The total number of authorized common shares and the par value thereof were not changed by the reverse stock split.
The Company markets, packages and distributes Hemp-CBD based products and Pharmaceutical based and Government approved products. Our mission is to Create High End, Unique Content and aggregate all relevant CBD content in the Nutraceutical and Pharmaceutical markets. Bioquest Corp. is positioned to generate revenue by bringing new products to the marked, created and marketed by Bioquest Corp. generating immediate revenues and by acquiring established companies who have a presence in CBD industry.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying condensed financial statements are unaudited. These financial statements and notes should be read in conjunction with the audited financial statements and related notes for the years ended April 2020 and 2019.
The accompanying interim condensed financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States for interim periods. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States have been condensed or omitted pursuant to such rules. In the opinion of management, the unaudited condensed financial statements and notes have been prepared on the same basis as the audited financial statements for the year ended April 30, 2020 and include all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the Company’s financial position at January 31, 2021 and statements of operations for the three and nine months ended January 31, 2021 and 2020 and cash flows for the nine months ended January 31, 2021 and 2020. These interim periods are not necessarily indicative of the results to be expected for any other interim period or the full year. The accompanying condensed financial statements reflect the application of certain significant accounting policies as described below and elsewhere in these notes to the condensed financial statements. As of January 31, 2021, the Company’s significant accounting policies and estimates, which are detailed in the Company’s audited financial statements for the year ended April 30, 2020, have not changed.
Cash and Cash Equivalents
Cash equivalents consist of highly liquid investments with maturities of three months or less when purchased. Cash and cash equivalents are on deposit with financial institutions without any restrictions. At January 31, 2021, cash equivalents amounted to $60.
Basic Loss Per Share
FASB ASC Subtopic 260, Earnings Per Share, provides for the calculation of “Basic” and “Diluted” earnings per share. Basic earnings per share is computed by dividing net loss available to common shareholders by the weighted average number of common shares outstanding for the period. All potentially dilutive securities including stock options and stock payable have been excluded from the computations since they would be antidilutive. However, these dilutive securities could potentially dilute earnings per share in the future. The number of potentially dilutive shares were 145,040 shares at January 31, 2021 and 35,000 shares at January 31, 2020.
| 8 |
BIOQUEST CORP.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
January 31, 2021
(Unaudited)
Income Taxes
The Company follows FASB ASC Subtopic 740, Income Taxes, for recording the provision for income taxes. Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled.
Deferred income tax expenses or benefits are based on the changes in the asset or liability each period. If available evidence suggests that it is more likely than not that some portion or all the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred income taxes in the period of change.
Stock-based Compensation
The Company follows FASB ASC Subtopic 718, Stock Compensation, for accounting for stock-based compensation. The guidance requires that new, modified and unvested share-based payment transactions, such as grants of stock options and restricted stock, be recognized in the consolidated financial statements based on their fair value at the grant date and recognized as compensation expense over their vesting periods.
Revenue Recognition
The Company will recognize revenue pursuant to Accounting Standards Codification 606, which requires revenue to be recognized at an amount that reflects the consideration expected to be received in exchange for transferring goods or services to customers. Revenue is recognized when performance obligations are satisfied through the transfer of control of promised goods to the Company’s customers. Control transfers once a customer has the ability to direct the use of, and obtain substantially all of the benefits from, the product. This includes the transfer of legal title, physical possession, the risks and rewards of ownership, and customer acceptance.
Revenue will be recognized for the Company’s wholesale customers sales when the Company ships the product from its inventory facility. Revenue will be recognized by the Company for e-commerce sales at the time the merchandise is shipped from our inventory facility. Customers typically receive goods within four days of shipment. Amounts related to shipping and handling that are billed to customers are reflected in revenues, and the related costs are reflected in cost of revenues. Taxes collected from customers and remitted to governmental authorities are presented in the consolidated statements of operations on a net basis. The nature of the Company’s business allows for customers to return previously purchased goods for a return or exchange which may result in a reduction of the Company’s revenues. These sales returns will not be significant to the Company’s revenues in the accompanying financial statements.
| 9 |
BIOQUEST CORP.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
January 31, 2021
(Unaudited)
Fair Value of Financial Instruments
Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 820 “Fair Value Measurements and Disclosures” (ASC 820) defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) a reporting entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:
Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.
Level 3 - Inputs that are both significant to the fair value measurement and unobservable. Our company estimates the fair value of financial instruments using the available market information and valuation methods. Considerable judgment is required in estimating fair value. Accordingly, the estimates of fair value may not be indicative of the amounts our company could realize in a current market exchange. As of April 30, 2020, and January 31, 2021, the carrying value of accounts payable and loans that are required to be measured at fair value, approximated fair value due to the short-term nature and maturity of these instruments.
NOTE 3 – GOING CONCERN
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.
As reflected in the accompanying financial statements, the Company had an accumulated deficit at January 31, 2021 of $9,139,707 and its liabilities exceeded its assets by $1,445,378. These factors among others raise substantial doubt about the Company’s ability to continue as a going concern.
Bioquest, Corp. markets, packages, and distributes Hemp-CBD based products and Pharmaceutical based and Government approved products. Our mission is to create high end unique content and aggregate all relevant CBD content in the Nutraceutical and Pharmaceutical markets including Medical Grade Products. Bioquest Corp. is positioned to generate revenue by bringing its new and recently developed products to the market and by accruing established companies in the CBD industry, generating immediate revenues. The Company is implementing and marketing to the business-to-business and internet-based E-Commerce to the consumers market. The Company is implementing this plan to achieve profitable and sustainable operations.
The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
NOTE 4 – RELATED PARTY TRANSACTIONS
During the year ended April 30, 2020, the Company issued to its previous CEO 135,000 common shares (270,000,000 pre reverse split) for repayment of related party debt incurred in payment of the Company’s expenses of $27,000. During October 2019, Tom Hemingway the Company’s new CEO purchased these 135,000 shares creating a change in control of the Company.
As of January 31, 2021, $987,750 is due to executive officers of the Company for compensation due from employment and consulting contracts and is recorded under accounts accrued compensations. In addition, $11,023 is due to officers- shareholders for payments on behalf of the Company and 100,000 restricted sharers of the Company stock are due under an employment contract and valued at $ 100,000 and are recorded in in accounts payable and accrued liabilities.
| 10 |
BIOQUEST CORP.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
January 31, 2021
(Unaudited)
NOTE 5 – NOTES PAYABLE
The Company issued notes payable in the amount of $40,000 due in two years from date of issuance, with interest at 6% and convertible in common shares at $1.00 per share. In addition, the Company recorded 50,000 shares payable as of April 30, 2020 and issued these shares in October 2020.
The Company issued a note payable in September 2020 due in one year in the amount of $27,500 including interest at 10%. The note is convertible at a 40% discount to market price after 90 days. The company recorded a note discount of $2,500. In November 2020 the Company issued an addition note payable due in one year in the amount of $30,800 including interest at 10%. The note convertible at a 60% discount to market price. The Company recorded a note discount of $2,800.
The expected volatility rate was estimated based on comparison to the volatility of a peer group of companies in similar industries. The term for the conversion of the notes is based upon the remaining term of the notes. The risk-free interest rate for periods within the contractual life of the option is based on U.S. Treasury securities. Circumstances may change, and additional data may become available over time, which could result in changes to these assumptions and methodologies, and thereby materially impact our fair value determination. The Company recorded an increase in note discount of $37,294, derivative liability of $138,555 and interest expense of $17,472.
The following table for the derivative liability summarizes the inputs used for the Black-Scholes pricing model on the nine months ended January 31, 2021.
| Note 1 | Note 2 | |||||||
| Weighted average exercise price | $0.74, | $0.49 | ||||||
| Risk free interest rate | .66 | % | .75 | % | ||||
| Volatility | 87.96 | % | 93.45 | % | ||||
| Expected term years | .66 | .75 | ||||||
| Dividend yield | None | None | ||||||
| 11 |
NOTE 6 – STOCKHOLDERS’ DEFICIT
Capital Stock Issued
During the quarter ended October 31, 2019, the Company issued 135,000 shares of common stock for repayment of Company debt and expenses. During the year ended April 30, 2020 the Company issued 7,747,000 shares of common stock under employment and consulting agreements. At April 30, 2020, the company had subscription agreements for 30,000 common shares to be issued from cash received of $30,000 and 40,000 shares for cash received from issuance of notes payable at April 30, 2020. There were 7,500 shares issued for cash received of $15,000 and 10,000 shares of restricted common stock issued for services in the quarter ended January 31, 2021.
Authorized Capital Stock Common Stock
The Company is authorized to issue 500,000,000 shares of common stock with a par value of $0.001 per share. As of January 31, 2021, and April 30, 2020, there were 8,350,733 and 8,044,233 and shares issued and outstanding.
NOTE 7 – SUBSEQUENT EVENTS
We evaluated subsequent events after the balance sheet date through the date the financial statements were issued. The Company issued 370,000 restricted common shares under consulting contracts. In addition, the Company extended a note payable payments and due date by ninety days and issued 10,000 restricted common shares as an extension fee. We did not identify any additional material events or transactions occurring during subsequent event reporting period that required further recognition or disclosure in these financial statements.
| 12 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Forward Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements. For this purpose, any statements contained in this Report that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking information includes statements relating to future actions, prospective products, future performance or results of current or anticipated products, sales and marketing efforts, costs and expenses, interest rates, outcome of contingencies, financial condition, results of operations, liquidity, business strategies, cost savings, objectives of management, and other matters. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “will,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “continue” and similar expressions or the negative of these similar terms. The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking information to encourage companies to provide prospective information about themselves without fear of litigation so long as that information is identified as forward-looking and is accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those projected in the information.
These forward-looking statements are not guarantees of future performance and involve risks, uncertainties and assumptions that we cannot predict. In evaluating these forward-looking statements, you should consider various factors, including the following: (a) those risks and uncertainties related to general economic conditions, (b) whether we are able to manage our planned growth efficiently and operate profitable operations, (c) whether we are able to generate sufficient revenues or obtain financing to sustain and grow our operations, (d) whether we are able to successfully fulfill our primary requirements for cash, which are explained below under “Liquidity and Capital Resources”. We assume no obligation to update forward-looking statements, except as otherwise required under the applicable federal securities laws. Unless stated otherwise, terms such as the “Company,” “BioQuest,” “we,” “us,” “our,” and similar terms shall refer to BioQuest Corp., Inc., a Nevada corporation, and its subsidiaries.
Results of Operations
Working Capital
January 31, 2021 | April 30, 2020 | |||||||
| $ | $ | |||||||
| Current assets | 22,297 | 166 | ||||||
| Current liabilities | 1,427,675 | 98,745 | ||||||
| Working capital deficit | (1,405,378 | ) | (98,579 | ) | ||||
Cash Flows
| Nine Months | Year Ended | |||||||
January 31, 2021 | April 30, 2020 | |||||||
| Cash flows used in operating activities | (188,106 | ) | (124,834 | ) | ||||
| Cash flows provided by financing activities | 188,000 | 125,000 | ||||||
| Cash flows used in investing activities | - | - | ||||||
| Net increase (decrease) in cash during period | $ | ($106) | $ | 166 | ||||
| 13 |
Three Months Ended January 31, 2021 Compared to the Three Months Ended January 31, 2019
Operating Revenue
The Company had no revenue for the three months ended January 31, 2021 or for the same period in 2020.
Cost of Revenues
The Company had no cost of revenues for the three months ended January 31, 2021 or for the same period in 2020.
Operating Expenses
Compensation was $384,000 for the three months ended January 31, 2021 compared to $66,500 for the same period in 2010 and was increased to the retaining of new personnel to develop the business of the Company.
Stock Compensation was $100,000 for the three months ended January 31, 2021 for equity awards for new personnel and consulting service and $114,770 for the same period in 2020.
Professional Fees were $36,683 for the three months ended January 31, 2021 as compared to $7,270 for the same period in 2020 for SEC filings as professional fees for investor relations.
General and administrative expenses consisted primarily marketing, product development and general expenses. For the three months ended January 31, 2021, general and administrative expenses increased to $43,943 from $6,227 for the same period in 2020 representing an increase of $37,716.
Net Income (Loss)
The Company had net loss of $667,288 for the three months ended January 31, 2021 as compared to a net loss of $194,767 for the three months ended January 31, 2020.
Nine Months Ended January 31, 2021 Compared to the Nine Months Ended January 31, 2020.
Operating Revenue
The Company had no revenue for the nine months ended January 31, 2021 or for the same period in 2020.
Cost of Revenues
The Company had no cost of revenues for the nine months ended January 31, 2021 and for the same period in 2020.
Operating Expenses
Compensation was $1,024,000 for the nine months ended January 31, 2021 compared to $66,500 for the same period in 2020 with increased to the retaining of new personnel to develop the business of the Company.
Stock Compensation was $250,000 for the nine months ended January 31, 2021 for equity awards for new personnel and consulting service and $114,770 for the same period in 2020.
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Professional Fees were $142,526 for the nine months ended January 31, 2021 as compared to $33,943 for the same period in 2020 and due to becoming current in the Company’s OTC Markets Filings, preparing our SEC filings as professional fees for investor relations.
General and administrative expenses consisted primarily of marketing, product development and expenses preparation of a OTC Market Filings and accounting expenses. For the nine months ended January 31, 2021, general and administrative expenses increased to $98,902 from $7,790 for the same period in 2020 representing an increase of $91,112.
Other Expense
The Company had interest expense of $18,595 for the nine months ending January 31, 2021 and $1,650 for the same period in 2010.
Net Income (Loss)
The Company had a net loss of $1,619,798 for the nine months ended January 31, 2021 as compared to a net loss of $224,653 for the nine months ended January 31, 2020.
Liquidity and Capital Resources
The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital and implement its business plan. Since its inception, the Company has been funded by related parties through capital investment and borrowing of funds.
At January 31, 2021, the Company had total current assets of $22,297. Current assets consisted primarily of cash and prepaid expenses. At January 31, 2021, the Company had total current liabilities of $1,427,675 compared to $98,745 at January 31, 2020. Current liabilities consisted primarily of accounts payable accrued liabilities and accrued compensation.
We had negative working capital of $1,405,378 as of January 31, 2021.
Cash flow from Operating Activities
During the nine months ended January 31, 2021, cash used in operating activities was $188,106 compared to $112,273 for the same period ended January 31, 2020. The increase in the amounts of cash used in operating activities was due to the increase in operations and personnel.
Cash flow from Financing Activities
For the nine months ended January 31, 2021, cash provided by financing activities was $188,000 compared to $147,000 provided during the nine months ended January 31, 2020.
Quarterly Developments
None.
Subsequent Developments
None.
Going Concern
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The accompanying unaudited interim consolidated condensed financial statements have been prepared in conformity with generally accepted accounting principles which contemplate continuation of the Company on a going-concern basis. The going concern basis assumes that assets are realized, and liabilities are extinguished in the ordinary course of business at amounts disclosed in the consolidated financial statements. The Company has incurred recurring losses from operations and has an accumulated deficit of $9,139,707. The Company’s ability to continue as a going concern depends upon its ability to obtain adequate funding to support its operations through continuing investments of debt and/or equity by qualified investors/creditors, internally generated working capital and monetization of intellectual property assets. These factors raise substantial doubt about the Company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Management is currently pursuing a business strategy which includes raising the necessary funds to finance the Company’s development and marketing efforts.
Critical Accounting Estimates and Policies
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Note 1 to the Financial Statements describes the significant accounting policies and methods used in the preparation of the Financial Statements. Estimates are used for, but not limited to, contingencies and taxes. Actual results could differ materially from those estimates. The following critical accounting policies are impacted significantly by judgments, assumptions, and estimates used in the preparation of the Financial Statements.
We are subject to various loss contingencies arising in the ordinary course of business. We consider the likelihood of loss or impairment of an asset or the incurrence of a liability, as well as our ability to reasonably estimate the amount of loss in determining loss contingencies. An estimated loss contingency is accrued when management concludes that it is probable that an asset has been impaired, or a liability has been incurred and the amount of the loss can be reasonably estimated. We regularly evaluate current information available to us to determine whether such accruals should be adjusted.
We recognize deferred tax assets (future tax benefits) and liabilities for the expected future tax consequences of temporary differences between the book carrying amounts and the tax basis of assets and liabilities. The deferred tax assets and liabilities represent the expected future tax return consequences of those differences, which are expected to be either deductible or taxable when the assets and liabilities are recovered or settled. Future tax benefits have been fully offset by a 100% valuation allowance as management is unable to determine that it is more likely than not that this deferred tax asset will be realized.
Recent Accounting Pronouncements
The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
Off Balance Sheet Arrangements
We have not entered into any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources and would be considered material to investors.
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
Not applicable to smaller reporting companies.
Item 4. Controls and Procedures.
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Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are designed to be effective in providing reasonable assurance that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission (the “SEC”), and that such information is accumulated and communicated to our management to allow timely decisions regarding required disclosure. Our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, they concluded that our disclosure controls and procedures were not effective for the quarterly period ended January 31, 2021.
The following aspects of the Company were noted as potential material weaknesses:
| 1. | We do not have written documentation of our internal control policies and procedures. Written documentation of key internal controls over financial reporting is a requirement of Section 404 of the Sarbanes-Oxley Act which is applicable to us for the period ended January 31, 2021, Management evaluated the impact of our failure to have written documentation of our internal controls and procedures on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness. |
| 2. | We do not as yet have sufficient resources in our accounting function, which restricts the Company’s ability to gather, analyze and properly review information related to financial reporting in a timely manner. In addition, due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. However, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by separate individuals. Management evaluated the impact of our failure to have segregation of duties on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness. |
| 3. | We have inadequate controls to ensure that information necessary to properly record transactions is adequately communicated on a timely basis from non-financial personnel to those responsible for financial reporting. Management evaluated the impact of the lack of timely communication between non–financial personnel and financial personnel on our assessment of our reporting controls and procedures and has concluded that the control deficiency represented a material weakness. |
| 4. | Certain control procedures were unable to be verified due to performance not being sufficiently documented. As an example, some procedures requiring review of certain reports could not be verified due to there being no written documentation of such review. Management evaluated the impact of its failure to maintain proper documentation of the review process on its assessment of its reporting controls and procedures and has concluded deficiencies represented a material weakness. |
In designing and evaluating disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute assurance of achieving the desired objectives. Also, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs.
Changes in Internal Controls
Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that no changes occurred in the Company’s internal controls over financial reporting during the quarter ended January 31, 2021, that has materially affected, or is reasonably likely to materially affect, the Company’s internal controls over financial reporting.
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PART II – OTHER INFORMATION
From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and, as such, are not required to provide the information under this Item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Quarterly Issuances:
There were 7,500 shares issued for cash received of $15,000 and 10,000 shares of restricted common stock issued for services in the quarter ended January 31, 2021.
Subsequent Issuances:
The Company issued 380,000 restricted common shares valued at $1.00 per share for consulting services in the quarter ended April 30, 2021.
The above securities were issued in reliance on the exemption under Section 4(a)(2) of the Securities Act. These securities qualified for exemption under Section 4(a)(2) since the issuance by us did not involve a public offering. The offerings were not “public offerings” as defined in 4(a)(2) due to the insubstantial number of persons involved in the transactions, manner of the issuance and number of securities issued. We did not undertake an offering in which we sold a high number of securities to a high number of investors. In addition, the investors had the necessary investment intent as required by Section 4(a)(2) since they agreed to and received securities bearing a legend stating that such securities are restricted pursuant to Rule 144 of the Act. This restriction ensures that these securities would not be immediately redistributed into the market and therefore not be part of a “public offering.” Based on an analysis of the above factors, we have met the requirements to qualify for exemption under Section 4(a)(2) of the Securities Act for these transactions.
Item 3. Defaults Upon Senior Securities.
None
Item 4. Mine Safety Disclosures.
Not applicable.
None.
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Item 6. Exhibits
Exhibit Number |
Exhibit Description | |
| 31.1 | Certification of the Chief Executive Officer and Chief Financial Officer Pursuant to Rule 13a-14 or 15d-14 of the Exchange Act pursuant to Section 302 of the Sarbanes- Oxley Act of 2002 | |
| 32.1 | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
| EX-101.INS | XBRL Instance Document | |
| EX-101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
| EX-101.SCH | XBRL Taxonomy Extension Schema Document | |
| EX-101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |
| EX-101.LAB | XBRL Taxonomy Extension Labels Linkbase Document | |
| EX-101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
| 19 |
In accordance with the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| BIOQUEST CORP, INC. | ||
| BioQuest Corp. | ||
| /s/ Thomas Hemingway | June 15, 2021 | |
| Thomas Hemingway, CEO, Principal Executive Officer, Director | Date | |
| /s/ Michael Krall | June 15, 2021 | |
| Michael Krall, President, Director | Date | |
| /s/ David Noyes | June 15, 2021 | |
| David Noyes, CFO, Principal Accounting Officer | Date | |
| /s/ Jeffery Donnell | June 15, 2021 | |
| Jeffery Donnell, Director | Date | |
| /s/ Robert Orbach | June 15, 2021 | |
| Robert Orbach, Director | Date | |
| 20 |
Exhibit 31.1
CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER PURSUANT TO RULE 13a-14
I, Thomas Hemingway, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of BioQuest Corp.
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
| (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| (b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| (c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| (d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
| (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: June 15, 2021 | ||
| /s/ Thomas Hemingway | ||
| By: | Thomas Hemingway | |
| Its: | Principal Executive Officer | |
Exhibit 31.2
CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER PURSUANT TO RULE 13a-14
I, David P. Noyes, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of BioQuest Corp.
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
| (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| (b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| (c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| (d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
| (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: June 15, 2021 | ||
| /s/ David P. Noyes | ||
| By: | David P. Noyes | |
| Its: | Principal Financial Officer | |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of BioQuest Corp. (the “Company”) on Form 10-Q for the period ending January 31, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Thomas Hemingway, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
| /s/ Thomas Hemingway | |
| By: Thomas Hemingway | |
| Principal Executive Officer | |
| Dated: June 15, 2021 |
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of BioQuest Corp. (the “Company”) on Form 10-Q for the period ending January 31, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David P. Noyes, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
| /s/ David P. Noyes | |
| By: David P. Noyes | |
| Principal Financial Officer | |
| Dated: June 15, 2021 |
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.