UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

Form 10-Q

 

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the quarterly period ended March 31, 2021

 

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 5(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition period from ______________________________ to ______________________________

 

Commission File Number 33-55254-41

 

BIOETHICS, LTD.

(Exact name of registrant as specified in charter)

 

 

NEVADA

87-0485312

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

 

 

1661 Lakeview Circle, Ogden, Utah

84403

(Address of principal executive offices)

(Zip Code)

 

 

(801) 399-3632

(Issuer’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act: NONE

 

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 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 every Interactive Data File required to be submitted 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 such files).  Yes [X]    No [  ]

 

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[  ] 

Non-accelerated filer[X]Smaller reporting company[X] 

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 check mark whether the issuer is a shell company (as defined in rule 12b-2 of the Exchange Act).  Yes [X]    No [  ]

 

As of May 24, 2021, the issuer had outstanding 1,135,194 shares of common stock, par value $0.001. 



BIOETHICS, LTD.

 

FORM 10-Q

 

FOR THE QUARTER ENDED MARCH 31, 2021

 

 

INDEX

 

PART I   Financial Information

 

Item 1.Condensed Financial Statements (Unaudited)

 

Item 2.  Management’s Discussion and Analysis of Financial Condition

 and Results of Operations

 

Item 3.  Quantitative and Qualitative Disclosures About Market Risk10 

 

Item 4.  Controls and Procedures10 

 

PART II Other Information

 

Item 1.  Legal Proceedings11 

 

Item 1A.  Risk Factors11 

 

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds11 

 

Item 3.  Defaults Upon Senior Securities11 

 

Item 4.  Mine Safety Disclosures11 

 

Item 5.  Other Information11 

 

Item 6.  Exhibits12 

 

SIGNATURES12 


2


PART I – FINANCIAL INFORMATION

 

Item 1.Condensed Financial Statements (Unaudited) 

 

 

BIOETHICS, LTD.

 

CONTENTS

 

PAGE 

 

 

Condensed Unaudited Balance Sheets,  

As of March 31, 2021 and December 31, 20204 

 

 

Condensed Unaudited Statements of Operations,  

For the three months ended March 31, 2021 and 20205 

 

 

Condensed Unaudited Statements of Stockholders’ Deficit,  

For the three months ended March 31, 2021 and 2020                         6 

 

 

Condensed Unaudited Statements of Cash Flows,  

For the three months ended March 31, 2021 and 2020                         7 

 

 

Notes to Condensed Unaudited Financial Statements for the three months 

ended March 31, 2021 and 20208 


3


BIOETHICS, LTD.

Condensed Balance Sheets

(Unaudited)

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31,

 

December 31,

 

 

 

 

 

 

 

2021

 

2020

 

 

 

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

$              467

 

$              667

 

 

 

 

 

 

 

 

 

 

 

 

Total Current Assets

 

 

 

 

                467

 

                667

 

 

 

 

 

 

 

 

 

 

FIXED ASSETS, NET

 

 

 

 

                155

 

                226

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

 

 

 

$              622

 

$              893

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

 

 

 

$         62,712

 

$         53,943

 

Accounts payable - related party

 

 

 

 

             3,000

 

             1,500

 

Accrued interest - related parties

 

 

 

 

           28,223

 

           20,561

 

Accrued interest

 

 

 

 

           43,547

 

           38,503

 

Convertible note payable, net of unamortized debt

 

 

 

 

 

 

 

 discount of $1,189 and $2,718, respectively

 

 

 

           33,811

 

           32,282

 

Notes payable

 

 

 

 

         150,000

 

         150,000

 

Notes payable - related parties

 

 

 

 

         186,234

 

         182,834

 

 

 

 

 

 

 

 

 

 

 

 

Total Current Liabilities

 

 

 

 

         507,527

 

         479,623

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES

 

 

 

 

         507,527

 

         479,623

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock, $0.01 par value; 25,000,000 shares

 

 

 

 

 

 

 

authorized, -0- shares issued and outstanding

 

 

 

                     -

 

                     -

 

Common stock, $0.001 par value; 250,000,000 shares authorized,

 

 

 

 

 

1,135,194 shares issued and outstanding

 

 

 

             1,135

 

             1,135

 

Additional paid-in capital

 

 

 

 

         500,479

 

         500,479

 

Accumulated deficit

 

 

 

 

     (1,008,519)

 

        (980,344)

 

 

 

 

 

 

 

 

 

 

 

 

Total Stockholders' Deficit

 

 

 

 

        (506,905)

 

        (478,730)

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

$              622

 

$              893

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these unaudited condensed financial statements.


4


 

 

BIOETHICS, LTD.

Condensed Statements of Operations

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

 

 

 

 

 

 

March 31,

 

 

 

 

 

 

 

2021

 

2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET REVENUES

 

 

 

 

$                   -

 

$                   -

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

 

 

           13,940

 

           26,229

 

 

 

 

 

 

 

 

 

 

 

 

Total Operating Expenses

 

 

 

 

           13,940

 

           26,229

 

 

 

 

 

 

 

 

 

 

LOSS FROM OPERATIONS

 

 

 

 

          (13,940)

 

          (26,229)

 

 

 

 

 

 

 

 

 

 

OTHER INCOME (EXPENSES)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

 

 

          (14,235)

 

          (10,428)

 

 

 

 

 

 

 

 

 

 

 

 

Total Other Income (Expenses)

 

 

 

 

          (14,235)

 

          (10,428)

 

 

 

 

 

 

 

 

 

 

NET LOSS BEFORE INCOME TAXES

 

 

 

 

          (28,175)

 

          (36,657)

 

 

 

 

 

 

 

 

 

 

PROVISION FOR INCOME TAXES

 

 

 

 

                     -

 

                     -

 

 

 

 

 

 

 

 

 

 

NET LOSS

 

 

 

 

$        (28,175)

 

$        (36,657)

 

 

 

 

 

 

 

 

 

 

BASIC AND DILUTED LOSS PER SHARE

 

 

 

 

$            (0.02)

 

$            (0.03)

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE NUMBER OF

 

 

 

 

 

 

 

SHARES OUTSTANDING

 

 

 

 

      1,135,194

 

      1,135,194

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these unaudited condensed financial statements.


5


BIOETHICS, LTD.

Condensed Statements of Stockholders' Deficit

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31, 2021

 

 

 

 

Additional

 

 

 

Total

 

 

Common Stock

 

Paid-In

 

Accumulated

 

Stockholders'

 

 

Shares

 

Amount

 

Capital

 

Deficit

 

Deficit

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2020

 

        1,135,914

 

$            1,135

 

$         494,279

 

$     (1,008,519)

 

$        (478,730)

 

 

 

 

 

 

 

 

 

 

 

Net loss for the three months ended

 

 

 

 

 

 

 

 

 

 

March 31, 2021

 

                     -

 

                     -

 

                     -

 

           (28,175)

 

           (28,175)

 

 

 

 

 

 

 

 

 

 

 

Balance, March 31, 2021

 

        1,135,914

 

$            1,135

 

$         494,279

 

$     (1,036,694)

 

$        (506,905)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31, 2020

 

 

 

 

Additional

 

 

 

Total

 

 

Common Stock

 

Paid-In

 

Accumulated

 

Stockholders'

 

 

Shares

 

Amount

 

Capital

 

Deficit

 

Deficit

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2019

 

        1,135,914

 

$            1,135

 

$         494,279

 

$        (861,153)

 

$        (365,739)

 

 

 

 

 

 

 

 

 

 

 

Net loss for the three months ended

 

 

 

 

 

 

 

 

 

 

March 31, 2020

 

                     -

 

                     -

 

                     -

 

           (36,657)

 

           (36,657)

 

 

 

 

 

 

 

 

 

 

 

Balance, March 31, 2020

 

        1,135,914

 

$            1,135

 

$         494,279

 

$        (897,810)

 

$        (402,396)

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these audited condensed financial statements.


6


BIOETHICS, LTD.

Condensed Statements of Cash Flows

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

 

 

 

 

 

 

March 31,

 

 

 

 

 

 

 

2021

 

2020

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

$        (28,175)

 

$        (36,657)

Adjustments to reconcile net loss to net cash

 

 

 

 

 

 

used by operating activities:

 

 

 

 

 

 

 

 

 

Amortization of debt discount

 

 

 

 

             1,529

 

             1,989

 

 

Depreciation

 

 

 

 

                  71

 

                  72

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

Accounts payable

 

 

 

 

             8,769

 

           11,081

 

 

Accounts payable - related party

 

 

 

 

             1,500

 

             1,500

 

 

Accrued interest - related parties

 

 

 

 

             7,662

 

             4,151

 

 

Accrued interest

 

 

 

 

             5,044

 

             4,288

 

 

 

 

 

 

 

 

 

 

 

 

Net Cash Used by Operating Activities

 

 

 

            (3,600)

 

          (13,576)

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

                     -

 

                     -

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from notes payable - related parties

 

 

 

             3,400

 

           12,400

 

 

Repayment of notes payable - related parties

 

 

 

                     -

 

            (6,000)

 

 

 

 

 

 

 

 

 

 

 

 

Net Cash Provided by Financing Activities

 

 

 

             3,400

 

             6,400

 

 

 

 

 

 

 

 

 

 

DECREASE IN CASH AND CASH EQUIVALENTS

 

 

 

               (200)

 

            (7,176)

 

 

 

 

 

 

 

 

 

 

CASH AND CASH EQUIVALENTS AT

 

 

 

 

 

 

 

BEGINNING OF PERIOD

 

 

 

 

                667

 

             8,761

 

 

 

 

 

 

 

 

 

 

CASH AND CASH EQUIVALENTS AT

 

 

 

 

 

 

 

END OF PERIOD

 

 

 

 

$              467

 

$           1,585

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURES:

 

 

 

 

 

 

 

 

Cash paid for interest

 

 

 

 

$                   -

 

$                   -

 

Cash paid for income taxes

 

 

 

 

$                   -

 

$                   -

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these unaudited condensed financial statements.


7


BIOETHICS, LTD.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2021 and 2020


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Organization - Bioethics, Ltd. (“the Company”) was organized under the laws of the State of Nevada on July 26, 1990.  The Company was organized to provide a vehicle for participating in potentially profitable business ventures which may become available through the personal contacts of and at the complete discretion of the Company’s officers and directors.  The Company has not paid any dividends and any dividends that may be paid in the future will depend upon the financial requirements of the Company and other relevant factors.

 

The accompanying financial statements have been prepared by the Company without audit.  In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows for the three months ended March 31, 2021 and 2020 have been made.

 

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted.  It is suggested that these financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s December 31, 2020 audited financial statements.  The results of operations for the three months ended March 31, 2021 are not necessarily indicative of the operating results for the full year.

 

NOTE 2 - RELATED PARTY TRANSACTIONS

 

Management Compensation - During the three months ended March 31, 2021 and 2020, the Company did not pay any compensation to its officers and directors.

 

Beginning August 2017, the Company entered into an oral agreement to pay the Company’s President $500 per month as payment for use of his personal residence as the Company’s office and mailing address.  The Company has recorded rent expense of $1,500 during each of the three months ended March 31, 2021 and 2020, which is included in the general and administrative expenses on the statements of operations.  The amount payable at December 31, 2020 was $1,500.  During the three months ended March 31, 2021, the Company paid $-0-, resulting in $3,000 payable at March 31, 2021.  

 

On March 8, 2018 the Company entered into a promissory note with a newly-affiliated party in the amount of $43,250. The note is payable on demand and carries interest at 10% per annum.  Interest expense for the three months ended March 31, 2021 and 2020 was $3,493 and $863, respectively, resulting in accrued interest of $13,248 and $9,755 at March 31, 2021 and December 31, 2020, respectively.  Principal balance on the note at March 31, 2021 and December 31, 2020 was $43,250.  

 

On December 12, 2017, the Company entered into a promissory note with its President in the amount of $107,000.  On various dates from the origin of the note through December 31, 2020, the officer advanced the Company an additional $53,270, and the Company made payments of $20,686, resulting in the total note principal balance of $139,584 at December 31, 2020.  During the three months ended March 31, 2021, the Company received an additional $3,400 and paid a total of $-0- of the principal balance resulting in the total note principal balance of $142,984 at March 31, 2021.  The cumulative note balance is uncollateralized, due on demand, and carries interest at 12% per annum.  Interest expense on the note for the three months ended March 31, 2021 and 2020 was $4,169 and $3,288, respectively, of which the Company repaid $-0- during the three months ended March 31, 2021, resulting in accrued interest totaling $14,975 and $10,806 at March 31, 2021 and December 31, 2020, respectively.

 

NOTE 3 - NOTES PAYABLE

 

On June 14, 2016, the Company issued a promissory note in the principal amount of $35,000 to an unaffiliated lender. The Note is due on demand at any time after its original maturity date of June 14, 2017, and carries an interest rate of 8% per annum.  Interest expense for the three months ended March 31, 2021 and 2020 totaled $690 and$698, respectively, resulting in accrued interest at March 31, 2021 and December 31, 2020 of $13,432 and $12,742, respectively.  Principal balance due on the note at March 31, 2021 and December 31, 2020 was $35,000.


8


BIOETHICS, LTD.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2021 and 2020


On August 15, 2018, the Company issued a promissory note in the principal amount of $10,000 to an unaffiliated lender. The Note was due on November 15, 2018, is currently in default, and carries an interest rate of 12% per annum.  Interest expense for the three months ended March 31, 2021 and 2020 totaled $296 and $299, respectively, resulting in accrued interest at March 31, 2021 and December 31, 2020 of $2,403 and $2,107, respectively.  Principal balance on the note at March 31, 2021 and December 31, 2020 was $10,000.

 

On November 15, 2018, the Company issued a promissory note in the principal amount of $20,000 to an unaffiliated lender. The Note was due on February 15, 2019, is currently in default, and carries an interest rate of 12% per annum.  Interest expense for the three months ended March 31, 2021 and 2020 totaled $592 and $598, respectively, resulting in accrued interest at March 31, 2021 and December 31, 2020 of $4,807 and $4,215, respectively.  Principal balance on the note at March 31, 2021 and December 31, 2020 was $20,000.

 

On December 31, 2018, the Company issued a promissory note in the principal amount of $30,000 to an unaffiliated lender. The Note was due on December 31, 2019, is currently in default, and carries an interest rate of 12% per annum.  Interest expense for the three months ended March 31, 2021 and 2020 totaled $888 and $898, respectively, resulting in accrued interest at March 31, 2021 and December 31, 2020 of $7,210 and $6,322, respectively.  Principal balance on the note at March 31, 2021 and December 31, 2020 was $30,000.

 

On January 23, 2019, the Company issued a promissory note in the principal amount of $50,000 to an unaffiliated lender. The Note was due on January 23, 2020, is currently in default, and carries an interest rate of 12% per annum.  Interest expense for the three months ended March 31, 2021 and 2020 totaled $1,479 and $1,496, respectively, resulting in accrued interest at March 31, 2021 and December 31, 2020 of $12,016 and $10,537, respectively.  Principal balance on the note at March 31, 2021 and December 31, 2020 was $50,000.

 

On May 1, 2020, the Company issued a promissory note in the principal amount of $5,000 to an unaffiliated lender. The Note is due on May 1, 2021 and carries an interest rate of 12% per annum.  Interest expense for the three months ended March 31, 2021 totaled $148, resulting in accrued interest at March 31, 2021 and December 31, 2020 of $539 and $391, respectively.  Principal balance on the note at March 31, 2021 and December 31, 2020 was $5,000.

 

NOTE 4 – CONVERTIBLE NOTES PAYABLE

 

On December 18, 2019, the Company issued a convertible promissory note in the original principal amount of $10,000 to a lender. The Note was due on June 18, 2020, is currently in default, and carries an interest rate of 8% per annum. The Note is due and payable in full unless converted partially or in its entirety upon the election of the lender into fully paid and non-assessable shares of common stock of the Company at a conversion rate of $2.00 per share.  The Company recognized a beneficial conversion feature and recorded a debt discount in the amount of $4,000, which was being amortized over the life of the promissory note.  At March 31, 2021 and December 31, 2020, the unamortized debt discount was $-0-, and the net convertible note balance was $10,000.  The amortization of debt discount was $-0- and $1,989 during three months ended March 31, 2021 and March 31, 2020, respectively.  Interest expense for the three months ended March 31, 2021 and 2020 totaled $296 and $299, respectively, resulting in accrued interest at March 31, 2021 and December 31, 2020 of $1,542 and $1,246, respectively. Principal balance on the note at March 31, 2021 and December 31, 2020 was $10,000.

 

On June 9, 2020, the Company issued a convertible promissory note in the original principal amount of $10,000 to a lender. The Note is due on June 9, 2021 and carries an interest rate of 10% per annum. The Note is due and payable in full unless converted partially or in its entirety upon the election of the lender into fully paid and non-assessable shares of common stock of the Company at a conversion rate of $2.50 per share.  The Company recognized a beneficial conversion feature and recorded a debt discount in the amount of $6,200, which is being amortized over the life of the promissory note.  At March 31, 2021 and December 31, 2020, the unamortized debt discount was $2,718 and $1,189, respectively, and the net convertible note balance was $5,719 and $8811, respectively.  The amortization of debt discount was $1,529 during the three months ended March 31, 2021.  Interest expense for the three months ended March 31, 2021 totaled $359, resulting in accrued interest at March 31, 2021 of $808.  Principal balance on the note at March 31, 2021 and December 31, 2020 was $10,000.

 

On August 3, 2020, the Company issued a convertible promissory note in the original principal amount of $15,000 to a lender. The Note is due on August 3, 2021 and carries an interest rate of 8% per annum. The Note is due and payable


9


BIOETHICS, LTD.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2021 and 2020


in full unless converted partially or in its entirety upon the election of the lender into fully paid and non-assessable shares of common stock of the Company at a conversion rate of $7.00 per share.  The Company did not recognize a beneficial conversion feature or debt discount as the conversion price was higher than the market price at the time of issuance of the note.  Interest expense for the three months ended March 31, 2021 totaled $296, resulting in accrued interest at March 31, 2021 of $789. Principal balance on the note at March 31, 2021 and December 31, 2020  was $15,000.

 

 

NOTE 5 – EQUITY TRANSACTIONS

 

On December 2, 2019, the Company amended its articles of incorporation with the state of Nevada increasing the number of authorized common stock of the Company to 250,000,000 shares.  There were no equity transactions during the three months ended March 31, 2021 or 2020, resulting in 1,135,194 shares of common stock issued and outstanding at March 31, 2021 and December 31, 2020.

 

Effective November 2, 2020, the Company effectuated a 1 share for 10 shares reverse stock split which reduced the issued and outstanding shares of common stock from 11,000,000 shares to 1,135,194 shares.  The accompanying financial statements have been retroactively adjusted to reflect this reverse stock split.

 

NOTE 6 - GOING CONCERN

 

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern.  However, the Company has incurred losses since its inception totaling $1,008,519 and has no on-going operations.  These factors raise substantial doubt about the ability of the Company to continue as a going concern.  In this regard, management is proposing to raise any necessary additional funds not provided by operations through loans, additional sales of its common stock, or through a possible business combination.  There is no assurance that the Company will be successful in raising this additional capital or in achieving profitable operations.  In addition, the COVID-19 pandemic could have an impact on our ability to obtain financing to fund the operations. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.

 

NOTE 7 - LOSS PER SHARE

 

The computation of basic loss per share is based on the weighted average number of shares outstanding during each period.  

 

The following data show the amounts used in computing loss per share for the three months ended:

 

 

 

March 31, 2021

 

March 31,

2020

 

 

 

 

 

Net loss (numerator)

$

(28,175)

$

(36,657)

Weighted average shares outstanding (denominator)

 

1,135,194

 

1,135,194

Basic and fully diluted net loss per share amount

$

(0.02)

$

(0.03)

 

The computation of diluted earnings per common share is based on the weighted average number of shares outstanding during the year plus the common stock equivalents as detailed in the following chart.  For the three months ended March 31, 2021 and 2020, the inclusion of these shares on the statements of operations would have resulted in a weighted average shares fully diluted number that was anti-dilutive, and as such they are excluded.  

 

 

 

 

 

The following data show the fully diluted shares for the three months ended March 31, 2021 and 2020:

 

 

 

March 31,


10


BIOETHICS, LTD.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

THREE MONTHS ENDED MARCH 31, 2021 and 2020


 

 

2021

 

2020

 

 

 

 

 

Basic weighted average shares outstanding

 

1,135,194

 

1,135,194

Convertible debt

 

11,143

 

-0-

Total

 

1,146,337

 

1,135,194

 

 

NOTE 8 – MERGER AGREEMENT

 

On November 30, 2020, the Company entered into an Agreement and Plan of Merger (“Merger Agreement”) with XCR Diagnostics, Inc. (“XCR”) to, subject to a number of conditions, acquire 100% of the ownership of XCR for consideration of (1) approximately 38,843,906 shares of the Company’s unregistered common stock, and (2) options to purchase approximately 7,500,000 shares of the Company’s unregistered common stock at various exercise prices.

 

Closing of the acquisition of XCR is subject to a number of conditions, including but not limited to approval of the Company’s stockholders, providing required stockholder information and notice, the completion, filing and clearance of all necessary state and securities filings. The parties must also create and execute several exhibits and schedules, including formation of a merger subsidiary, Certificate of Merger, Articles of Merger and Disclosure Schedules for both the Company and XCR.  The Merger Agreement states that XCR may rescind this Agreement in its sole discretion in the event that the company and/or XCR are unable to transfer at least $300,000 in paid in capital into XCR’s bank account within 90 days from the Closing of the Merger.

 

As of the date these financial statements were issued, the conditions to the closing of the Merger Agreement have not been met, therefore, the closing of the acquisition has not occurred and no stock has been issued by the Company.  

 

NOTE 9 – SUBSEQUENT EVENTS

 

The Company has evaluated subsequent events from the balance sheet date through the date the financial statements were issued and determined there are no events requiring disclosure.


11



Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

You should read the following discussion in conjunction with our financial statements, which are included elsewhere in this report.  The following information contains forward-looking statements. (See “Forward-Looking Statements” below.)

 

FORWARD-LOOKING STATEMENTS

 

This report contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995.  These statements reflect the Company’s views with respect to future events based upon information available to it at this time.  These forward-looking statements are subject to certain uncertainties and other factors that could cause actual results to differ materially from these statements.  The words “anticipates,” “believes,” “estimates,” “expects,” “plans,” “projects,” “targets,” and similar expressions identify forward-looking statements.  Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made.  The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, changes in assumptions, future events or otherwise.

 

General

 

The Company is a shell company that conducts no active business operations and is seeking business opportunities for acquisition or participation by the Company.

 

The Report of Independent Registered Public Accounting Firm on the Company’s December 31, 2020 audited financial statements addresses an uncertainty about the Company’s ability to continue as a going concern, indicating that the Company has incurred losses since its inception and has no on-going operations.  The report further indicates that these factors raise substantial doubt about the Company’s ability to continue as a going concern.  At March 31, 2021, the Company had a working capital deficit of $507,060 and an accumulated deficit since inception of $1,008,519. The Company incurred net losses of $28,175 and $36,657 for the three months ended March 31, 2021 and 2020, respectively.  The Company has not entered into any agreements or arrangements for the provision of additional debt or equity financing and there can be no assurance that it will be able to obtain the additional debt or equity capital required to continue its operations.  

 

On July 29, 2020, the Company entered into a non-binding Term Sheet with XCR Diagnostics, Inc. (“XCR”), subject to a number of conditions, to acquire 100% of the ownership of XCR.  On July 31, 2020, the Company filed a Form 8-K further describing the proposed transaction. The Company and XCR have not yet negotiated a definitive agreement for the proposed acquisition.

 

The Three Months ended March 31, 2021 compared to March 31, 2020

 

The Company did not conduct any operations during the three-month periods ended March 31, 2021 or 2020.  At March 31, 2021, the Company had cash and total current assets in the amount of $467, compared to $667 at December 31, 2020.  At March 31, 2021, the Company had total current liabilities of $507,527, compared to $479,623 at December 31, 2020.  The Company had a working capital deficit of $507,060 at March 31, 2021 compared to $478,956 at December 31, 2020.

 

The Company did not generate revenues during the three-month periods ending March 31, 2021 or 2020.  The Company incurred general and administrative expenses of $13,940 during the three months ended March 31, 2021, compared to $26,229 during the three months ended March 31, 2020.  Such expenses consist primarily of legal and accounting fees as well as taxes and annual fees required to maintain the Company’s corporate status.   

 

The Company incurred other expenses of $14,235 during the three months ended March 31, 2021 compared to $10,428 during the three months ended March 31, 2020.  Total other income and expenses consist of interest expense related to the notes payable due from the Company.  Increase in interest expense is due to the increase in debt issued by the Company.  

 

The Company incurred a net loss of $28,175 during the three months ended March 31, 2021, compared to a net loss of $36,657 during the three months ended March 31, 2020.  The decrease in net loss in 2021 as compared to 2020


12



was due to the increased professional fees in the three months ended 2020 related to the unwinding and rescission of a transaction.   

 

The Company has never had substantial ongoing operations. As a result, since its inception on July 26, 1990, the Company had an accumulated deficit of $1,008,519 as of March 31, 2021.

 

Liquidity and Capital Resources

 

Net cash used by operating activities was $3,600 and $13,576 during the three months ended March 31, 2021 and 2020, respectively.

 

Net cash provided by investing activities was $-0- during both the three months ended March 31, 2021 and 2020.

 

Net cash provided by financing activities was $3,400 and $6,400 during the three months ended March 31, 2021 and 2020, respectively.

 

Since the Company does not generate any revenues from operations, it is dependent on sales of securities, loans, or contributions from its stockholders in order to pay its operating costs. In addition, in the event the Company locates a suitable candidate for potential acquisition, the Company will require additional funds to pay the costs of negotiating and completing the acquisition of such candidate.  The Company has not entered into any agreement or arrangement for the provision of any additional funding and no assurances can be given that such funding will be available to the Company on terms acceptable to it or at all.  

 

The Company cannot presently foresee the cash requirements of any business opportunity which may ultimately be acquired by the Company.  However, since it is likely that any business it acquires will be involved in active business operations, the Company anticipates that an acquisition will result in increased cash requirements as well as increases in the number of employees of the Company.

Off-Balance Sheet Arrangements

 

The Company has not entered into any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that are material to investors.

Critical Accounting Policies

 

Due to the lack of current operations and limited business activities, the Company does not have any accounting policies that it believes are critical to facilitate an investor’s understanding of the Company’s financial and operating status.

 

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

 

Not Applicable.  The Company is a “smaller reporting company.”

 

Item 4. Controls and Procedures.

 

Disclosure Controls and Procedures

 

Under the supervision and with the participation of our management, including our Chief Executive Officer/Chief Financial Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (“the Exchange Act”) as of March 31, 2021, the end of the period covered by this report.  Based upon that evaluation, our Chief Executive Officer/Chief Financial Officer concluded that our disclosure controls and procedures as of March 31, 2021 were not effective such that the information required to be disclosed by us in reports filed under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including our Chief Executive Officer/Chief


13



Financial Officer, as appropriate to allow timely decisions regarding disclosure.  A controls system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.  

 

Changes in Internal Control over Financial Reporting

 

There was no change in our internal control over financial reporting during the quarter ended March 31, 2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

 

 

Part II---OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

The Company is not a party to any material pending legal proceedings and, to the best of its knowledge; its properties are not the subject of any such proceedings.

 

Item 1A. Risk Factors.

 

Not Applicable.  The Company is a “smaller reporting company.”

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

 

None.

 

Item 3. Defaults Upon Senior Securities.

 

Not Applicable.

 

Item 4. Mine Safety Disclosures.

 

Not Applicable.

 

Item 5. Other Information.

None.


14



Item 6.Exhibits 

 

The following documents are included as exhibits to this report:

 

(a)Exhibits 

 

 

Exhibit

Number

 

SEC Reference Number

 

 

 

Title of Document

 

 

 

Location

 

 

 

 

 

 

 

31.1

 

31

 

Section 302 Certification of Chief Executive and Chief Financial Officer

 

This Filing

32.1

 

32

 

Section 1350 Certification of Chief Executive and Chief

Financial Officer

 

This Filing

101.INS**

 

 

 

XBRL Instance Document

 

This Filing

101.SCH**

 

 

 

XBRL Taxonomy Extension Schema

 

This Filing

101.CAL**

 

 

 

XBRL Taxonomy Extension Calculation Linkbase

 

This Filing

101.DEF**

 

 

 

XBRL Taxonomy Extension Definition Linkbase

 

This Filing

101.LAB**

 

 

 

XBRL Taxonomy Extension Label Linkbase

 

This Filing

101.PRE**

 

 

 

XBRL Taxonomy Extension Presentation Linkbase

 

This Filing

 

 

**XBRL information is furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934, and is not subject to liability under those sections, is not part of any registration statement or prospectus to which it relates and is not incorporated or deemed to be incorporated by reference into any registration statement, prospectus or other document.

 

SIGNATURES

 

Pursuant to 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, thereunto duly authorized.

 

 

Bioethics, Ltd.

 

 

 

 

Date:  May 24, 2021

By /s/ Mark A. Scharmann

 

Mark A. Scharmann

 

President, Chief Executive Officer and

 

Chief Financial Officer

 

(Principal Executive and Financial Officer)

 


15

 

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