Helix BioMedix : HXBM FY 2021 Unaudited Financial Statement

FINANCIAL STATEMENTS

HELIX BIOMEDIX, INC.

December 31, 2021 and 2020

Unaudited

Table of Contents

	PAGE
Financial Statements
Balance sheetsBalance sheets	2
Statement of operationsStatements of operations	3
Statements of stockholder equityStatements of stockholders' equity	4
Statements of cash flows	5
Notes to the financial statements	6-22

Helix BioMedix, Inc.

Balance Sheets (unaudited)

ASSETS
				December 31,
			2021				2020
CURRENT ASSETS
Cash and cash equivalents	$	2,913,242	$	3,873,263
Short-term investments		1,249,825				1,000,175
Accounts receivable		466,104				433,954
Inventory		3,684				144,960
Prepaid expenses and other current assets		146,800				122,712
Total current assets		4,779,655				5,575,064
PROPERTY AND EQUIPMENT, net		38,421				44,142
OTHER LONG-TERM ASSETS		12,260				12,260
Total assets	$	4,830,336			$	5,631,466
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable	$	23,673	$	33,624
Accrued compensation and benefits		18,682				12,147
Current portion of notes payable		-				77,090
Convertible promissory note, current portion		-				2,777,294
Accrued expenses		44,019				409,100
Total current liabilities		86,374				3,309,255
NON-CURRENT LIABILITIES
Notes payable, less current portion		-				63,304
Deferred rent		14,056				17,969
Total liabilities		100,430				3,390,528
COMMITMENTS AND CONTINGENCIES (Note 13)
STOCKHOLDERS' EQUITY
Preferred stock, $0.001 par value, 1,000,000 shares
authorized; no shares issued or outstanding		-				-
Common stock, $0.001 par value, 2,000,000 shares
authorized; 225,727 and 206,390 shares issued, and
224,708 and 205,371 shares outstanding, respectively
as of December 31, 2021 and 2020		49,780				49,761
Additional paid-in capital		63,061,668				59,212,402
Accumulated deficit		(58,198,196)				(56,837,879)
Treasury stock, 1,019 shares outstanding as of
December 31, 2021 and 2020		(183,346)				(183,346)
Total stockholders' equity		4,729,906				2,240,938
Total liabilities and stockholders' equity	$	4,830,336	$	5,631,466

2	See accompanying notes.

Helix BioMedix, Inc.

Statements of Operations (unaudited)

			Years Ended December 31,
			2021			2020
REVENUE
Licensing fees	$	1,876,198	$	1,708,338
Peptide and consumer product sales		497,161			127,850
Total revenue		2,373,359			1,836,188
COST OF REVENUE
Cost of peptide and consumer product sales		430,548			94,514
GROSS MARGIN		1,942,811			1,741,674
OPERATING EXPENSES
General and administrative		1,627,603			1,473,213
Research and development		1,238,940			1,017,576
Marketing and business development		292,678			292,403
Accounting, legal and professional fees		93,513			181,017
Depreciation		13,320			8,279
Total operating expenses		3,266,054			2,972,488
LOSS FROM OPERATIONS		(1,323,243)			(1,230,814)
OTHER (EXPENSE) INCOME
Interest income		655			24,150
Interest expense		(351,583)			(656,529)
Income from affiliated company		21,560			8,540
PPP loan forgiveness		292,294			-
Other expense, net		(37,074)			(623,839)
NET LOSS	$	(1,360,317)	$	(1,854,653)

See accompanying notes.

3

Helix BioMedix, Inc.

Statements of Stockholders' Equity (unaudited)

		Common Stock		Additional				Treasury Stock
		Number					Paid-In		Accumulated	Number					Stockholders'
		of Shares			Amount		Capital		Deficit		of Shares			Amount			Equity
Balance at December 31, 2019	206,390	$	49,761	$ 58,899,992	$(54,983,226)		(1,019)	$	(183,346)	$	3,783,181
Stock-based compensation	-			-	312,410	-		-			-			312,410
Net loss	-			-		-		(1,854,653)		-			-			(1,854,653)
Balance at December 31, 2020	206,390			49,761	59,212,402	(56,837,879)		(1,019)			(183,346)			2,240,938
Stock-based compensation	-			-	368,628	-		-			-			368,628
Conversion of debt to equity	19,337			19	3,480,638										3,480,657
Net loss	-			-	-	(1,360,317)		-			-			(1,360,317)
Balance at December 31, 2021		225,727		$	49,780	$ 63,061,668	$(58,198,196)		(1,019)	$	(183,346)	$	4,729,906

4	See accompanying notes.

Helix BioMedix, Inc.

Notes to Financial Statements

Helix BioMedix, Inc.

Statements of Cash Flows (unaudited)

			Years Ended December 31,
			2021			2020
CASH FLOWS FROM OPERATING ACTIVITIES
Netloss	$	(1,360,317)	$	(1,854,653)
Adjustments to reconcile net loss to net cash used
in operating activities
Depreciation expense		13,320			8,279
Stock-based compensation expense		368,628			312,410
Inventory adjustments		47,776			16,723
PPP loan forgiveness		(292,294)			-
Non-cash interest expense		222,706			415,871
Changes in operating assets and liabilities
Accounts receivable		(32,150)			235,179
Inventory		93,500			(81,415)
Prepaid expenses and other current assets		(24,088)			93,279
Accounts payable		(9,951)			(26,907)
Accrued compensation and benefits		6,535			(42,083)
Accrued expenses		111,663			255,989
Net cash used in operating activities		(854,672)			(667,328)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment		(7,599)			(41,134)
Purchases of short-term investments		(3,000,000)			(2,003,000)
Maturities of short-term investments		2,750,350			2,752,930
Net cash (used in) provided by investing activities		(257,249)			708,796
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of note payable		151,900			140,394
Proceeds from issuance of convertible promissory note		-			-
Net cash provided by financing activities		151,900			140,394
NET CHANGE IN CASH AND CASH EQUIVALENTS		(960,021)			181,862
CASH AND CASH EQUIVALENTS
Beginning of year		3,873,263			3,691,401
End of year	$	2,913,242	$	3,873,263
NONCASH FINANCING ACTIVITIES
Common stock warrant issued with promissory note and
accrued interest to common stock	$	3,480,657	$	-

See accompanying notes

5