The following discussion and analysis of our financial condition and result of
operations should be read in conjunction with our financial statements and the
notes thereto and the other financial information appearing elsewhere in this
report on Form 10-K. This discussion contains forward-looking statements that
relate to future events or our future financial performance. These statements
involve known and unknown risks, uncertainties and other factors that may cause
our 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. These
risks and other factors include, among others, those listed under
"Forward-Looking Statements" and "Risk Factors" and those included elsewhere in
this report. Our financial statements are prepared in
Overview
We continue to be a biotechnology company dedicated to eradicating "cross-over" zoonotic diseases, such as COVID-19 (Coronavirus), Paratuberculosis (Johne's disease), Mad Cow Disease, Chronic Wasting Disease, E.coli and Salmonella infections, by applying our advanced proprietary molecular sciences and robotic technologies. We focus on developing molecular diagnostic tests, therapeutics, and vaccines through our proprietary robotic technologies with the belief that improved technologies and methodologies must be developed and implemented in order to aid mankind's control of emerging diseases in animals and in humans. We believe it has become increasingly evident that, if not properly addressed, diseases in animals may continue to cause serious and growing global problems with respect to economics, human health and biodiversity.
We previously developed proprietary diagnostic assays for use in the agricultural and veterinary markets, and we are currently developing proprietary, genetics-based diagnostic assays and vaccine solutions through our robotic technologies with the goal of controlling the spread of zoonotic infection in the human population. Our mission is to continually apply our scientific research to the more effective management of zoonotic diseases and, in so doing, realize the commercial potential of our molecular biotechnologies.
We will require significant additional funding in order to implement and achieve our business plan. There is no guarantee that we will be successful in securing the required financing, and if such financing is secured, there is no guarantee that we will fully achieve our business goals. We provide a comprehensive solution that allows diagnosing, treating and managing zoonotic diseases in animals and humans.
Our business model is based on the development of a proprietary Molecular Robotic/AI Laboratory Platform ("MORAP"), which would combine the use of advanced robotic laboratory systems integrated with AI software systems on a global scale. Upon development, MORAP would encompass a nationwide network of interactive molecular laboratories operated using advanced integrated robotic and machine learning cloud-based software systems, which would be able to share data and interact with each other. We believe MORAP would be capable of processing millions of samples and collecting, storing and analyzing data. We believe that MORAP nationwide communications network could be accomplished through advanced cloud-based software systems, machine learning and Internet-of-Things (IoT) networks. Upon development, MORAP could be readily replicated and scaled utilizing identical instrumentation and software.
Our proprietary Molecular Robotic and Therapeutic Platform (MORAPAT) is designed to prevent the spread of disease from animals and; at the same time, allow to better control of zoonotic infectious agents. More importantly, we believe that our platform can prevent the spread of viruses and bacteria in animals and /or food products and subsequent infection of human population. We have developed a molecular system for the detection of Mycobacterium Avian Paratuberculosis in the milk of infected dairy cows.
To date, we have developed a prototype computer program to track samples that will be received and processed in our commercial laboratory. This program will initially be used to track samples that will be sent out and received by our laboratory. We anticipate that research and development, or R&D, will be the source for both assay development and vaccine design/development. If we are successful in developing assays for different diseases, we intend to formalize the procedure into a commercial application through a series of laboratories to be owned and operated by us. We anticipate that R&D will be ongoing during the life of the Company, as this is the source for new products to be introduced to the market.
Our plan is to seek new innovations in the robotic biotechnology field. Our goal
is to focus on both the domestic and international markets for the
commercialization of our zoonotic molecular robotics and AI integrated platform.
Our current competitors include primarily,
19
We do not manufacture any products. We do not intend to establish a
manufacturing facility to manufacture any products that we may develop anywhere
in the world. Our unique approach to the testing for zoonotic diseases allows us
to begin commercialization of our diagnostic tests without the need for a long
and enduring approval process from the
Liquidity and Capital Resources - Going Concern
As of
Our current cash balance is not sufficient to fund our business objectives and we will need significant additional capital over the next 12 to 18 months in order to fund our planned operations. Specifically, we intend to spend significant funds on completing our robotic prototype system, validating and testing our products, seeking necessary regulatory approvals and focusing on international expansion. We will attempt to raise capital through one or more private offerings of debt or equity securities or both. We may not be able to secure the financing that we believe is necessary to implement our strategic objectives and, even if additional financing is secured, we may not achieve our strategic objectives. As of the date of this report, we do not have any firm commitments from any investors for any additional funding.
Our longer-term working capital and capital requirements will depend upon numerous factors, including revenue and profit generation, pre-clinical studies and clinical trials, the timing and cost of obtaining regulatory approvals, the cost of filing, prosecuting, defending, and enforcing patent claims and other intellectual property rights, competing technological and market developments, collaborative arrangements. Additional capital will be required in order to attain such goals. Such additional funds may not become available on acceptable terms and we cannot give assurance that any additional funding that we do obtain will be sufficient to meet our needs in the long term.
The accompanying consolidated financial statements do not include any adjustments to reflect the possible future effects on recoverability and classification of liabilities that may result from the outcome of this uncertainty. If we are unable to obtain additional working capital, our business may fail. Accordingly, we must raise cash from sources other than operations. To date, we have financed our operations primarily through cash flow from limited operations, augmented by cash proceeds from financing activities, short-term borrowings and equity contributions by our stockholders. We must raise cash to implement our projected plan of operations. Failure to obtain capital to fund short-term and long-term needs will likely result in the curtailment of our operations or cessation of certain aspects of our business strategy.
Capital Expenditures and Resources
Our operations require capital expenditures primarily for lab equipment and
software development. Capital expenditures for the years ended
Results of Operations
The following table sets forth key components of our results of operations
during the years ended
Years Ended December 31, 2020 2019 Expenses General and administrative expenses$ 274,611 $ 138,152 Payroll expenses 466,000 601,000 Total operating expenses 740,611 739,152 Loss from operations (740,611 ) (739,152 ) Other income (expenses) Interest (expense) (33,852 ) (28,582 ) Proceeds from settlement - 250,083 Total other income (expense) (33,852 ) 221,501 Net loss before income taxes (774,463 ) (517,651 ) Provision for income taxes - - Net loss$ (774,463 ) $ (517,651 ) 20
Revenue. We did not generate any revenue for the years ended
General and administrative expenses. Our general and administrative expenses
consist primarily of office lease, overhead, insurance, professional advisor
fees, and other expenses incurred in connection with general operations. Our
total general and administrative expenses increased by
Payroll expenses. Our payroll expenses include employee salaries and bonuses
plus related payroll taxes. Our accrued payroll expenses were
The entire amount of accrued payroll expense incurred in 2020 and 2019 was deferred due to lack of funds.
Total other expenses. We had
Total other income. The Company recorded a gain on the settlement with
Net loss. The Company incurred net losses of
Summary of Cash Flow
The net cash used in operating activities was
Net cash provided by financing activities was
Contractual Obligations and Commitments
There were no contractual obligations or commitments of any kind.
Convertible Notes
In previous years we borrowed money from investors and issued convertible notes
due on demand and bearing interest at an annual rate of 8%. The notes are
convertible into shares our common stock at a conversion price of
The Company has approximately
Related Party Loans
From time to time, certain directors, officers and stockholders have made loans to the Company.
As of
As of
21 Investment Agreement
In
The Board member resigned. In 2019 the Company received a net settlement of
approximately
Capital Expenditures
Our operations require capital expenditures primarily for lab equipment and
software development. The Company lost its lab equipment and other capital
assets when the office space lease was terminated in
Inflation
Inflation and changing prices have not had a material effect on our business and we do not expect that inflation or changing prices will materially affect our business in the foreseeable future. However, our management will closely monitor price changes in our industry and continually maintain effective cost control in operations.
Seasonality
Our operating results and operating cash flows historically have not been subject to significant seasonal variations. This pattern may change, however, as a result of new market opportunities or new product introductions.
Off-Balance Sheet Arrangements
We do not have any off balance sheet arrangements.
Effect of Inflation and Market Prices on
Inflation and changing prices have not had a material effect on our business and we do not expect that inflation or changing prices will materially affect our business in the foreseeable future. However, our management will closely monitor price changes in our industry and continually maintain effective cost control in operations.
Critical Accounting Policies and Estimates
The preparation of financial statements in conformity with accounting principles GAAP requires our management to make assumptions, estimates and judgments that affect the amounts reported, including the notes thereto, and related disclosures of commitments and contingencies, if any. We have identified certain accounting policies that are significant to the preparation of our financial statements. These accounting policies are important for an understanding of our financial condition and results of operation. Critical accounting policies are those that are most important to the portrayal of our financial condition and results of operations and require management's difficult, subjective, or complex judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Certain accounting estimates are particularly sensitive because of their significance to financial statements and because of the possibility that future events affecting the estimate may differ significantly from management's current judgments. We believe the following critical accounting policies involve the most significant estimates and judgments used in the preparation of our financial statements:
Property and Equipment, Net.
Property and equipment consist primarily of office and laboratory equipment,
leasehold improvements, vehicle, and is stated at cost. Depreciation is computed
on a straight-line basis over the estimated useful lives ranging from three to
seven years. The Company has one vehicle recorded in property and equipment with
a net book value of
22
Impairment of Long-Lived Assets.
We review the recoverability of long-lived assets to determine whether events or changes in circumstances occurred that indicate the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on the ability to recover the carrying value of the asset from the expected future cash flows of the related operations. If these cash flows are less than the carrying value of such asset, an impairment loss is recognized for the difference between the estimated fair value and carrying value. The measurement of impairment requires management to make estimates of these cash flows related to long-lived assets, as well as other fair value determinations.
Stock-Based Compensation.
Stock-based compensation is accounted for under FASB ASC Topic No. 718 - Compensation - Stock Compensation. The guidance requires recognition in the financial statements of the cost of employee services received in exchange for an award of equity instruments over the period the employee is required to perform the services in exchange for the award (presumptively the vesting period). The guidance also requires measurement of the cost of employee services received in exchange for an award based on the grant-date fair value of the award. We account for non-employee share-based awards in accordance with guidance related to equity instruments that are issued to other than employees for acquisition, or in conjunction with selling, goods or services.
Fair Value of Financial Instruments.
The carrying value of cash, accounts payable, accrued expenses and notes payable approximates fair value due to the short-term nature of these accounts.
Recently Issued Accounting Standards
In
In
In
Management has evaluated all recent accounting pronouncements as issued by the FASB in the form of Accounting Standards Updates ("ASU") through the date these financial statements were available to be issued and found no recent accounting pronouncements issued, but not yet effective accounting pronouncements, when adopted, will have a material impact on the financial statements of the Company.
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