GLOBAL WHOLEHEALTH PARTNERS CORPORATION Forward-Looking Statements
This Report on Form 10-Q contains forward-looking statements which involve assumptions and describe our future plans, strategies, and expectations, and are generally identifiable by use of words such as "may" "will" "should," "expect," "anticipate," "estimate," "believe," "intend," or "project," or the negative of these words or other variations on these words or comparable terminology. These statements are expressed in good faith and based upon a reasonable basis when made, but there can be no assurance that these expectations will be achieved or accomplished. Such forward-looking statements include statements regarding, among other things, (a) the potential markets for our products, our potential profitability, and cash flows, (b) our growth strategies, (c) anticipated trends in the in-vitro diagnostics industry, (d) our future financing plans, and (e) our anticipated needs for working capital. This information may involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from the future results, performance, or achievements expressed or implied by any forward-looking statements. These statements may be found under "Management's Discussion and Analysis of Financial Condition and Results of Operations" as well as in this Form 10-Q generally. Actual events or results may differ materially from those discussed in forward-looking statements as a result of various factors, including, without limitation, the matters described in this Form 10-Q generally. In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained in this filing will in fact occur. In addition to the information expressly required to be included in this filing, we will provide such further material information, if any, as may be necessary to make the required statements, in light of the circumstances under which they are made, not misleading. Although forward-looking statements in this report reflect the good faith judgment of our management, forward-looking statements are inherently subject to known and unknown risks, business, economic and other risks and uncertainties that may cause actual results to be materially different from those discussed in these forward-looking statements. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. We assume no obligation to update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this report, other than as may be required by applicable law or regulation. Readers are urged to carefully review and consider the various disclosures made by us in our filings with theSecurities and Exchange Commission which attempt to advise interested parties of the risks and factors that may affect our business, financial condition, results of operation and cash flows. If one or more of these risks or uncertainties materialize, or if the underlying assumptions prove incorrect our actual results may vary materially from those expected or projected. Except where the context otherwise requires and for purposes of this Form 10-Q only, "we" "us" "our" "Company" "our Company" and "Global WholeHealth Partners " refer toGlobal WholeHealth Partners Corporation , aNevada corporation. Our Business
We sell products internationally which are not FDA approved to sell in the US.
These products include an FDA Certificate of Exportability and include tests
such as Ebola, ZIKA, Dengue, Malaria, Influenza, Tuberculosis, Corona Viruses,
and other vector borne diseases.
As a result of the COVID-19 pandemic, the Company became laser focused on
developing and selling COVID tests beginning in the second half of fiscal 2020.
The Company achieved sales of COVID tests in fiscal 2021 that were sourced from
third parties. In addition, over the course of fiscal 2021, the Company
continued its efforts to develop an RDT, RT-PCR and antigen test. Due to the
relatively quick commoditization of COVID-19 tests, the Company's strategy of
selling third party tests until it could complete a COVID test of its own proved
ill-timed and caused a drop in sales in the latter part of fiscal 2021. As a
result, the Company refocused its attention on marketing its core FDA OTC
approved products which includes tests for pregnancy, ovulation, colorectal,
drugs of abuse, glucose strips and glucose monitors through various platforms,
including Walmart, Amazon and eBay, in addition to the development of a COVID
antigen test being developed under a Memorandum of Understanding ("MOU") dated
September 15, 2021 between Global WholeHealth Partners , Avant Gen, Inc. and Pan
Probe Biotech. Pursuant to the MOU, the parties thereto have developed a rapid
Covid-19 antigen test. The work under the MOU has resulted in the filing of
clinical studies with the NIH and we are hoping to receive an FDA EUA approval
in fiscal Q3. In addition, the Company has developed a saliva based rapid
COVID-19 test not subject to the MOU which the company plans to file with the
NIH seeking an FDA EUA which the Company hopes to receive in fiscal Q4.
18
The Company's consolidated financial statements are prepared using generally
accepted accounting principles in the United States of America applicable to a
going concern which contemplates the realization of assets and liquidation of
liabilities in the normal course of business. The Company has not yet
established an ongoing source of revenues sufficient to cover its operating
costs to allow it to continue as a going concern.
The ability of the Company to continue as a going concern is dependent on the
Company obtaining adequate capital to fund operating losses until it becomes
profitable. If the Company is unable to obtain adequate capital, it could be
forced to cease operations.
As of March 31, 2022 , we had negative working capital of $1,671,290 , a cash
balance of $27,416 and inventory balance of $86,000 . Management recognizes that
in order for us to meet our capital requirements, and continue to operate,
additional financing will be necessary. We expect to raise additional funds
through private or public equity investment in order to expand the range and
scope of our business operations. We will seek access to private or public
equity but there is no assurance that such additional funds will be available
for us to finance our operations on acceptable terms, if at all. If we are
unable to raise additional capital or generate positive cash flow, it is
unlikely that we will be able to continue as a going concern. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
Results of Operations
Three and nine months ended
Revenue and Cost of Revenue
During the three months ended
During the three months endedMarch 31, 2022 and 2021, the Company's cost of revenue totaled$33,681 and$54,540 . During the nine months endedMarch 31, 2022 and 2021, the Company's cost of revenue totaled$33,681 and$82,671 , respectively. The elevated cost of revenue was due to the fair value adjustment to inventory for the shelf-life expiration of some products which totaled$29,681 and$51,615 during the three and nine months endedMarch 31, 2022 and 2021, respectively, resulting in negative gross profit. Operating Expenses Three Months Ended March 31, Increase / 2022 2021 (Decrease)
Operating expenses:
Professional fees$ 32,132 $ 14,400 $17,732 Research and development 3,000 30,000 (27,000) Selling, general and administrative 142,560 22,980 119,580 Stock compensation 728,950 2,544,000 (1,815,050) Total operating expenses$ 906,642 $ 2,611,380 $(1,704,738) 19 Nine Months Ended March 31, Increase / 2022 2021 (Decrease) Operating expenses: Professional fees$ 103,532 $ 61,625 $41,907 Research and development 1,372,697 234,010 1,138,687 Selling, general and administrative 805,822 77,641 728,181 Stock compensation 1,709,550 2,544,000 (834,450) Total operating expenses$ 3,991,601 $ 2,917,276 $1,074,325 Professional Fees
Professional fees relate to expenditures incurred primarily for legal and
accounting services. During the three and nine months ended
Research and Product Development
Research and Product Development ("R&D") costs represent costs incurred to
develop our tests and are incurred pursuant to certain internal R&D cost
allocations, when applicable, and agreements with third-party providers, but
primarily with Pan Probe Biotech, owned by Dr. Shujie Cui , our Chief Science
Officer. R&D costs are expensed when incurred. During the three and nine months
ended March 31, 2022 compared to the three and nine months ended March 31, 2021 ,
R&D costs increased due to the development of a COVID antigen test. The timing
of the development costs is not expected to be consistent from period to period.
Selling, General and Administrative
Selling, general and administrative ("SG&A") costs include all expenditures
related to personnel, rent, travel, public company costs, utilities, marketing
and other office related costs. SG&A costs increased during the three and nine
months ended March 31, 2022 over the prior year primarily due increases in
personnel costs, marketing costs, rent other administrative costs.
Stock Compensation
Stock compensation represents the expense associated with the issuance of stock
in exchange for services and is non-cash in nature. Stock compensation is based
on our stock price at the measurement date and fluctuates as our stock price
changes. During the three months ended March 31, 2022 , the Company issued
12,500,000 shares of common stock valued at $688,000 and recognized $32,250 of
deferred stock compensation and $8,700 for unissued shares. During the nine
months ended March 31, 2022 , the Company issued 16,000,000 shares of common
stock valued at $1,733,000 and recognized $96,750 of deferred stock compensation
and $8,700 for unissued shares with $32,250 to be recognized over the finalfiscal quarter of 2022. Other Income and (Expense) Other expense includes "interest expense" which relates to the stated interest and penalties upon default of our outstanding promissory notes, and "amortization of debt discount" which represents the accretion of the discount applied to our notes as a result of the issuance of detachable warrants and the beneficial conversion feature contained certain notes. During the three months endedMarch 31, 2022 , interest expense totaled$690 . During the nine months endedMarch 31, 2022 , interest expense totaled$279,697 and included$191,400 of liquidated damages and penalties due to our default on the Firstfire Notes and$79,200 of interest expense related to the Firstfire Notes.
Liquidity and Capital Resources
As ofMarch 31, 2022 , our cash totaled$27,416 , compared to current liabilities of$1,895,932 . From inception toMarch 31, 2022 , we have incurred an accumulated deficit of$18,767,796 . This loss has been incurred through a combination of professional fees, R&D, SG&A and non-cash stock related costs of$13,203,119 to support our plans to develop our business. During the three and nine months endedMarch 31, 2022 , the Company had negligible revenues and used cash in operations of$1,940,791 . The Company has incurred losses since inception and may not be able to generate sufficient net revenue from its business in the future to achieve or sustain profitability. The Company currently has insufficient funds to operate over the next twelve months. To finance our operations, we have entered into a Common Stock Purchase Agreement withEMC2 Capital LLC , which provided us with$76,871 and$1,476,872 during the three and nine months endedMarch 31, 2022 , respectively. Additionally, we entered into a Securities Purchase Agreement and related 12% senior secured convertible promissory note onJune 18, 2021 andAugust 27, 2021 , under which the Company received net proceeds of$224,500 onJuly 8, 2021 and$313,700 onSeptember 2, 2021 . We are currently pursuing additional funds through equity or debt financing or a combination thereof. However, aside from the EMC2 SPA, the Company has no commitments to obtain any such financing, and there can be no assurance that financing will be available in amounts or on terms acceptable to the Company, if at all. 20
© Edgar Online, source
