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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2023

 

or

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from __________ to __________

 

Commission file number 333-222631

 

SOUL BIOTECHNOLOGY CORP
(Exact name of registrant as specified in its charter)

 

Nevada   82-3155323
(State or other jurisdiction of
incorporation or organization)
 

(I.R.S. Employer

Identification No.)

 

8742
(Primary Standard Industrial Classification Code Number)

 

36 Fourth Ave. N, Yorkton Saskatchewan, Canada   S3N 2V7
(Address of principal executive offices)   (Zip Code)

 

Registrant’s telephone number, including area code (306) 563-4123

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of exchange on which registered
N/A   N/A   N/A

 

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 preceding 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   ☒ 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 during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☐ Yes   ☒ No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or 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 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 check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act.) ☐ Yes   ☒ No

 

The number of shares outstanding of the registrant’s common stock as of November 20, 2023 was 598,545,644 shares.

 

DOCUMENTS INCORPORATED BY REFERENCE — NONE

 

 

 

 

 

 

SOUL BIOTECHNOLOGY CORPORATION

QUARTERLY REPORT ON FORM 10-Q

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 (UNAUDITED)

 

Part I – FINANCIAL INFORMATION    
     
Item 1.   Consolidated financial statements (unaudited)   1
         
Item 2.   Management’s Discussion and Analysis of Financial Condition and Results of Operations   14
         
Item 3.   Quantitative and Qualitative Disclosures about Market Risk   17
         
Item 4.   Controls and Procedures   18
         
Part II – OTHER INFORMATION    
     
Item 1.   Legal Proceedings   19
         
Item 1A.   Risk Factors   19
         
Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds   19
         
Item 3.   Defaults Upon Senior Securities   19
         
Item 4.   Mine Safety Disclosures   19
         
Item 5.   Other Information   19
         
Item 6.   Exhibits   20
         
SIGNATURES   21

 

i

 

 

PART I FINANCIAL INFORMATION

 

Item 1. Condensed Consolidated financial statements.

 

Index to Condensed Consolidated financial statements

 

    Page
CONSOLIDATED FINANCIAL STATEMENTS:    
     
Condensed Consolidated Balance Sheets, September 30, 2023 (unaudited), and December 31, 2022   2
     
Unaudited Condensed Consolidated Statements of Operations the Three and Nine Months Ended September 30, 2023, and 2022   3
     
Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Deficit for the Nine Months Ended September 30, 2023, and 2022   4
     
Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2023, and 2022   5
     
Notes to the Unaudited Interim Condensed Consolidated Financial Statements   6

 

1

 

 

SOUL BIOTECHNOLOGY CORP.

Condensed Balance Sheets

 

           
   September 30,
2023
   December 31,
2022
 
   (Unaudited)      
Assets          
Current assets          
Cash and cash equivalents  $10,574   $41,808 
Accounts receivable   3,104    1,344 
Inventory   38,542    35,281 
Prepaid and other assets   1,181    1,179 
Total current assets   53,400    79,612 
Goodwill   -    512,196 
Intangible assets   830,571    88,923 
Total assets  $883,972   $680,731 
           
Liabilities and Stockholders’ Deficit          
Current Liabilities          
Accrued payable and accrued liabilities  $42,028   $42,953 
Common stock payable   -    843,878 
Convertible note -related party   27,778    - 
Due to related parties   228,688    227,704 
Total current liabilities   298,494    1,114,535 
Government loans   29,584    29,532 
Total liabilities   328,078    1,144,067 
           
Stockholders’ Equity (Deficit)          
Common stock, Par Value $0.001, 700,000,000 shares authorized, 598,545,644 and 598,545,644 shares issued and outstanding of shares as of September 30, 2023 and December 31, 2022, respectively   598,546    75,000 
Additional paid in capital   2,080,075    25,740 
Accumulated deficit   (2,035,661)   (525,881)
Accumulated other comprehensive loss   (87,066)   (38,195)
Total stockholders’ equity (deficit)   555,894    (463,336)
Total liabilities and stockholders’ equity (deficit)  $883,972   $680,731 

 

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

 

2

 

 

SOUL BIOTECHNOLOGY CORP.

Condensed Statements of Operations

(Unaudited)

 

                     
   For the
Three Months Ended
September 30,
   For the
Nine Months Ended
September 30,
 
   2023   2022   2023   2022 
Revenue, net                    
Revenue, net  $16,260   $42,154   $76,871   $122,927 
Cost of sales   6,015    5,333    26,255    44,471 
Gross margin   10,245    36,821    50,617    78,456 
                     
Operating expenses                    
General and administrative expenses   (21,030)   31,970    34,738    64,122 
Professional fees   16,242    94,716    66,500    263,607 
Amortization of intangible assets   417,924    11,107    845,293    30,055 
Impairment of goodwill and intangible   -         590,512    - 
Total operating expenses   413,136    137,794    1,537,043    357,784 
Loss from operations   (402,891)   (100,973)   (1,486,426)   (279,328)
                     
Other income (expense)                    
Interest expense   (7,067)   (449)   (7,745)   (1,292)
Total other income (expense)   (7,067)   (449)   (7,745)   (1,292)
Loss from continuing operations before income taxes   (409,958)   (101,422)   (1,494,171)   (280,620)
Provision (benefit) for income taxes   -    -    -    - 
Loss from continuing operations   (409,958)   (101,422)   (1,494,171)   (280,620)
Loss from discontinued operations   (5,177)   (5,760)   (15,609)   (21,086)
Net loss  $(415,135)  $(107,182)  $(1,509,780)  $(301,706)
                     
Basic and diluted loss per share:                    
Loss from continuing operations  $(0.00)  $(0.00)  $(0.00)  $(0.00)
Loss from discontinued operations  $(0.00)  $(0.00)  $(0.00)  $(0.00)
                     
Weighted average number of shares outstanding   598,545,644    75,000,000    598,545,644    67,324,064 
                     
Comprehensive loss:                    
Net loss  $(415,135)  $(107,182)  $(1,509,780)  $(301,706)
Foreign currency translation adjustment   (41,622)   (20,430)   (48,871)   (37,101)
Comprehensive loss  $(456,757)  $(127,612)  $(1,558,651)  $(338,807)

 

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

 

3

 

 

SOUL BIOTECHNOLOGY CORP.

Condensed Statements of Changes in Shareholders’ Deficit

For the Three and Nine Months Ended September 30, 2023 and 2022

(Unaudited)

 

                               
   Common Stock   Additional
Paid-in
   Accumulated
Other
Comprehensive
   Accumulated   Total
Stockholders’
 
   Shares   Value   Capital   Income   Deficit   Deficit 
Balance, December 31, 2021   23,889,500   $23,890   $25,740   $-   $(183,311)  $(133,681)
                               
Shares issued with the acquisition of MySpray   51,110,500    51,110                   51,110 
                               
Net loss             -     -     (34,120)   (34,120)
                               
Balance, March 31, 2022   75,000,000   $75,000   $25,740   $-   $(217,431)  $(116,691)
                               
Change in exchange rates                  (16,671)        (16,671)
                               
Net loss        -     -     -     (160,404)   (160,404)
                               
Balance, June 30, 2022   75,000,000   $75,000   $25,740   $(16,671)  $(377,835)  $(293,766)
                               
Change in exchange rates                  (20,430)        (20,430)
                               
Net loss        -     -     -     (107,182)   (107,182)
                               
Balance, September 30, 2022   75,000,000   $75,000   $-   $(37,101)  $(485,017)  $(421,377)

 

   Common Stock   Additional
Paid-in
   Accumulated
Other
Comprehensive
   Accumulated   Total
Stockholders’
 
   Shares   Value   Capital   Income   Deficit   Deficit 
Balance, December 31, 2022   75,000,000   $75,000   $25,740   $(38,195)  $(525,881)  $(463,336)
                               
Issuance of acquisition shares   569,889,500    569,890                   569,890 
                               
Change in exchange rates                  290         290 
                               
Net loss             -          (60,305)   (60,305)
                               
Balance, March 31, 2023   644,889,500   $644,890   $25,740   $(37,905)  $(586,186)  $46,538 
                               
Private placement issuance of shares   21,036,144    21,036    252,119              273,155 
                               
Issuance of shares for services -prior   6,000,000    6,000    71,125              77,125 
                               
Repurchase of common shares   (24,000,000)   (24,000)   (52,291)             (76,291)
                               
Shares issued for purchase of intangible assets and service agreement   44,920,000    44,920    1,662,476              1,707,396 
                               
Capital contribution from officers   (95,000,000)   (95,000)   95,000              - 
                               
Private placement of shares   700,000    700    25,907              26,607 
                               
Change in exchange rates                  (7,539)        (7,539)
                               
Net loss                       (1,034,339)   (1,034,339)
                               
Balance, June 30, 2023   598,545,644   $598,546   $2,080,075   $(45,444)  $(1,620,526)  $1,012,651 
                               
Change in exchange rates                  (41,622)        (41,622)
                               
Net loss        -     -          (415,135)   (415,135)
                               
Balance, September 30, 2023   598,545,644   $598,546   $2,080,075   $(87,066)  $(2,035,661)  $555,894 

 

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

 

4

 

 

SOUL BIOTECHNOLOGY CORP.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

 

           
   For the
Nine Months Ended
September 30,
 
   2023   2022 
Cash Flows From Operating Activities          
Net loss  $(1,509,780)  $(301,706)
Less : Loss from discontinued operation   (15,609)   (21,086)
Loss from continuing operations   (1,494,171)   (280,620)
Amortization of intangible assets   845,293    30,055 
Impairment of goodwill and intangible assets   590,512      
Adjustments to reconcile net income to net cash provided by operating activities:          
Changes in operating assets and liabilities:          
Accounts receivable   (1,760)   (3,056)
Inventory   (3,261)   268 
Accrued payable and accrued liabilities   (925)   6,999 
Net cash used in operating activities -continuing operations   (64,312)   (246,354)
Net cash used in operating activities -discontinued operations   (15,609)   (21,086)
Net cash used in operating activities   (79,921)   (267,440)
           
Cash Flows from Investing Activities          
Acquisition of a business net of cash acquired   -    19,981 
Net cash provided by investing activities   -    19,981 
           
Cash Flows From Financing Activities          
Proceeds from the sale of common stock   26,607    - 
Proceeds from convertible notes   27,778      
Common stock payable   -    271,669 
Proceeds from related party loans   984    12,821 
Net cash provided by financing activities   55,369    284,490 
           
Effect of exchange rates on cash and cash equivalents   (6,682)   15,343 
Net (decrease) increase in cash and cash equivalents   (31,234)   52,374 
Cash and cash equivalents, beginning of year   41,808    9,499 
Cash and cash equivalents, end of year  $10,574   $61,873 
           
Supplemental disclosure of cash flow information          
Cash paid for income tax expense  $-   $- 
Cash paid for interest expense  $-   $- 

 

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

 

5

 

 

SOUL BIOTECHNOLOGY CORPORATION

NOTES TO (UNAUDITED) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2023 AND 2022

 

NOTE 1 – ORGANIZATION AND DESCRIPTION OF THE BUSINESS

 

Basis of Presentation and Organization

 

Soul Biotechnology Corporation, f/k/a Adorbs Inc. (“Soul” or the “Company”) is a Nevada corporation. Adorbs was formerly a developmental stage corporation formed to provide organic children’s clothing designed to be cute, comfortable, and trendy. The Company was incorporated under the laws of the State of Nevada on October 18, 2017. On that date, the Company was authorized to issue 75,000,000 shares of common stock at $0.001 par value.

 

On February 10, 2022, the Company entered into a share exchange agreement (the “Share Exchange Agreement”) with MySpray Therapeutics Inc. (“MySpray”), a Saskatchewan, Canadian corporation, Nichol Martinuik (“Martinuik”) and Rachel Martinuik (“R. Martinuik”), the sole officers, directors, and shareholders of MySpray, Qatar Consulting Inc. & Company (“Qatar”), Broadway Creative Consultants Corp. (“Broadway”), and David Lazar (“Lazar”), as the sole officer and director of the Company and the managing member of Activist Investing LLC (“Activist”). Under the Share Exchange Agreement, One Hundred Percent (100%) of the ownership interest of MySpray was exchanged for (i) 51,110,500 shares of common stock of the Company at the Closing, and (ii) an additional 569,889,500 shares of common stock of ADOB, to be issued upon the increase in authorized shares of common stock of ADOB to 700,000,000, each of which is to be issued to Martinuik, R. Martinuik, Qatar, Broadway, and Activist, pro-rata, in accordance with the Share Exchange Agreement. The former stockholders of MySpray will acquire a majority of the issued and outstanding common stock as a result of the share exchange transaction. The transaction has been accounted for as a recapitalization of the Company, whereby MySpray is the accounting acquirer.

 

Immediately after completion of such share exchange, the Company will have a total of 644,889,500 issued and outstanding shares, with authorized share capital for common share of 700,000,000.

 

Consequently, the Company has ceased to fall under the definition of a shell company as defined in Rule 12b-2 under the Exchange Act of 1934, as amended (the “Exchange Act”) and MySpray is now a wholly-owned subsidiary.

 

On May 5, 2022, the Company filed a Certificate of Amendment with the state of Nevada increasing its authorized shares from 75,000,000 to 700,000,000 shares of $0.001 par value common stock. None of the additional 569,889,500 shares issuable under the terms of the Share Agreement, have been issued.

 

MySpray creates innovative and clinically developed products for the global natural health community in the areas of immune function, mental health, and pain management and is currently the license holder of 9 Natural Product Numbers (NPN) through the Natural and Non-prescription Health Products Directorate division of Health Canada.

 

MySpray is preparing to expand formulas to support clinical trials along with the licensing for research and development in the fields of mental health and the impact of treatment protocols with phytonutrients, medicinal mushrooms, and psychedelic compounds under our current “MyShrooms” brand. Also, MySpray is attempting end-to-end capabilities from substrate for growth, genetics, research, extraction, formulations, delivery, and distribution of the finished product. This could allow MySpray to maintain high-quality control and enable us to:

 

  Create formulations for clinical trials.

 

  Supply raw materials, standardized extracts, and medicinal compounds that are in high demand for ongoing academic research globally.

 

  Provide finished products direct to consumer.

 

  Offer white label manufacturing.

 

6

 

 

The Company changed its name to Soul Biotechnology Corporation on January 3, 2023.

 

On March 13, 2023, the sole existing director and officer resigned immediately. Accordingly, David Lazar, serving as a director and an officer, ceased to be the President, Chief Executive Officer, Chief Financial Officer, and as a Member of the Board of Directors of the Company. Also on March 13, 2023, Rachel Martinuik consented to the new CEO, CFO, Treasurer, and a Member of the Board of Directors of the Company and Nichol Martinuik consented to act as the new President, Secretary, and a Member of the Board of Directors of the Company.

 

Rachel Martinuik, 47, CEO and Chair of the board of MySpray, has been part of MySpray from inception. In her previous role as Chief Operating Officer, her responsibilities included the oversight of MySpray’s resources and oversees budgetary expenditures.

 

Nichol Martinuik, 47, President & Founder of MySpray, has been in health sciences, traditional medicine, and the natural health industry since 1997, gaining clinical experience in pain management, disease prevention, and therapeutic health solutions.

 

On June 1, 2023 the Company decided to transition from its current Clinic Operations to the establishment of a research laboratory. This strategic move was driven by the Company’s commitment to innovation and advancing the field of healthcare through research and development to include clinical trials of medicinal mushrooms, cannabinoids, and psychedelic compounds including psilocybin. All of the assets and results of operations from Clinic Operations have been treated as discontinued operations for all periods presented in the condensed financial statements. See Note 4. Discontinued Operations.

 

The Company’s year-end is December 31.

 

All figures presented in this report are in US dollars unless stated otherwise.

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING ASSUMPTIONS AND POLICIES

 

Basis of presentation

 

The accompanying condensed consolidated financial statements have been prepared in accordance with the FASB’s ASC, which is the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of condensed financial statements in conformity with generally accepted accounting principles (“GAAP”) in the United States. The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary MySpray Therapeutics Inc. All intercompany accounts and transactions are eliminated in consolidation.

 

Discontinued Operations

 

The operations of the Company’s former Clinic Division has been presented as discontinued operations. Unless otherwise noted, amounts and disclosures throughout these Notes to Condensed Consolidated Financial Statements relate solely to continuing operations and exclude all discontinued operations. See Note 4. for additional information on discontinued operations.

 

Going Concern

 

The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business for the twelve months following the date of these condensed consolidated financial statements.

 

The Company expects to generate operating cash flow that will be sufficient to fund presently anticipated operations although there can be no assurance. This raises substantial doubt about the Company’s ability to continue as a going concern. Therefore, the Company will need to raise additional funds and is currently exploring alternative sources of financing to supplement the expected cash flow. Historically, the Company has raised capital through private placements, as an interim measure to finance working capital needs and may continue to raise additional capital through the sale of common stock or other securities and obtaining some short-term loans. The Company will be required to continue to do so until its operations become profitable.

 

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The Company may attempt to raise capital in the near future through the sale of equity or debt financing; however, there can be assurances the Company will be successful in doing so. There can be no assurance that such additional financing will be available to the Company on acceptable terms or at all.

 

Management’s Representation of Interim Condensed Consolidated Financial Statements

 

The accompanying unaudited condensed consolidated financial statements have been prepared by the Company without audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The Company uses the same accounting policies in preparing quarterly and annual condensed consolidated financial statements. Certain information and footnote disclosures normally included in condensed consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been or omitted as allowed by such rules and regulations, and management believes that the disclosures are adequate to make the information presented not misleading. These condensed consolidated financial statements include all of the adjustments, which in the opinion of management are necessary for a fair presentation of financial position and results of operations. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative of results for a full year.

 

Estimates

 

The preparation of condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of liabilities on the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant estimates relate to the amortization period for intangible assets and income taxes. The Company bases its estimates on historical experience, known or expected trends, and various other assumptions that are believed to be reasonable given the quality of information available as of the date of these condensed consolidated financial statements. The results of these assumptions provide the basis for making estimates about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates.

 

Cash and Cash Equivalents

 

For purposes of reporting within the statements of cash flows, the Company considers all cash on hand, cash accounts not subject to withdrawal restrictions or penalties, and all highly liquid debt instruments purchased with a maturity of three months or less to be cash and cash equivalents. As of September 30, 2023, and December 31, 2022, the on-hand cash balances were $10,574 and $41,808, respectively.

 

Inventory

 

Inventory, is stated at the lower of cost or net realizable value with cost determined under the first-in, first-out (“FIFO”) method. As of September 30, 2023, and December 31, 2022, inventory amounted to $38,542 and $35,281, respectively.

 

Goodwill and Intangible Assets

 

Goodwill represents the future economic benefit arising from other assets acquired that could not be individually identified and separately recognized. The goodwill arising from the Company’s acquisition is attributable to the value of the potential expanded market opportunity with new customers. Intangible assets have either an identifiable or indefinite useful life. Intangible assets with identifiable useful lives are amortized on a straight-line basis over their economic or legal life, whichever is shorter. The Company’s amortizable intangible assets consist primarily of customer relationships, trademarks, and product formulations. The useful life of these customer relationships is estimated to be three years. The Company also has purchased intellectual property which is amortized over a one year period.

 

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Goodwill is not amortized but is subject to annual impairment testing unless circumstances dictate more frequent assessments. The Company performs an annual impairment assessment for goodwill during the fourth quarter of each year and more frequently whenever events or changes in circumstances indicate that the fair value of the asset may be less than the carrying amount. Goodwill impairment testing compares the fair value of the reporting unit to its carrying amount. The fair value of the reporting unit is determined by considering both the income approach and market approaches. The fair values calculated under the income approach and market approaches are weighted based on circumstances surrounding the reporting unit. Under the income approach, the Company determines fair value based on estimated future cash flows of the reporting unit, which are discounted to the present value using discount factors that consider the timing and risk of cash flows. For the discount rate, the Company relies on the capital asset pricing model approach, which includes an assessment of the risk-free interest rate, the rate of return from publicly traded stocks, the Company’s risk relative to the overall market, the Company’s size and industry and other Company-specific risks. Other significant assumptions used in the income approach include the terminal value, growth rates, future capital expenditures, and changes in future working capital requirements. The market approaches use key multiples from guideline businesses that are comparable and are traded on a public market. If the fair value of the reporting unit is greater than its carrying amount, there is no impairment. If the reporting unit’s carrying amount exceeds its fair value, then an impairment loss is recognized in an amount equal to the excess.

 

Due to the discontinuation of Clinic Operations as described throughout this Report, during the three months ended June 30, 2023, the Company performed an impairment analysis and determined that its goodwill and intangible assets were fully impaired. As a result the Company recorded an impairment charge of $590,512 on its Statements of Operations for the three months ended June 30, 2023.

 

Revenue Recognition

 

The Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The guidance provided in Accounting Standards Codification (“ASC”) Topic 606 (“ASC 606”) requires entities to use a five-step model to recognize revenue by allocating the consideration from contracts to performance obligations on a relative standalone selling price basis. Revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services. The standard also requires new disclosures regarding the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. ASC 606 also includes Subtopic 340-40, Other Assets and Deferred Costs – Contracts with Customers, which requires the deferral of incremental costs of obtaining a contract with a customer.

 

Foreign Currency Translation

 

The functional and reporting currency of MySpray is the Canadian dollar. Monetary assets denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Average monthly rates are used to translate revenues and expenses.

 

Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Exchange gains or losses arising from foreign currency transactions are included in the determination of net income for the respective periods.

 

Assets and liabilities of the Company’s operations are translated into the reporting currency, United States dollars, at the exchange rate in effect at the balance sheet dates. Revenue and expenses are translated at average rates in effect during the reporting periods.

 

Assets and liabilities of the Company’s operations are translated into the reporting currency, United States dollars, at the exchange rate in effect at the balance sheet dates. Revenue and expenses are translated at average rates in effect during the reporting periods. Equity transactions are recorded at the historical rate when the transaction occurs. The resulting translation adjustment is reflected as accumulated other comprehensive income, a separate component of stockholders’ equity in the statement of stockholders’ equity.

 

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Differences may arise in the amount of bad debt expense, depreciation expense and amortization expense reported in the Company’s operating results as compared to the corresponding change in the allowance for doubtful accounts, accumulated depreciation, and accumulated amortization, respectively, due to foreign currency translation. These translation adjustments are reflected in accumulated other comprehensive income, a separate component of the Company’s stockholders’ equity.

 

Income Taxes

 

The Company accounts for income taxes pursuant to FASB ASC Topic 740, Income Taxes. Under FASB ASC Topic 740, deferred tax assets and liabilities are determined based on temporary differences between the bases of certain assets and liabilities for income tax and financial reporting purposes. The deferred tax assets and liabilities are classified according to the financial statement classification of the assets and liabilities generating the differences. The Company maintains a 100% valuation allowance with respect to deferred tax assets, therefore there are no deferred taxes on the Company’s Balance Sheet. The Company establishes a valuation allowance based upon the potential likelihood of realizing the deferred tax asset and taking into consideration the Company’s financial position and results of operations for the current period. Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carry-forward period under the Federal tax laws. Changes in circumstances, such as the Company generating taxable income, could cause a change in judgment about the reliability of the related deferred tax asset. Any change in the valuation allowance will be included in income in the year of the change in estimate.

 

Fair Value Measurement

 

The Company values its convertible notes and amounts due to related partings and short-term loans payable under FASB ASC 820 which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements.

 

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based on the observability of those inputs. ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement).

 

The three levels of the fair value hierarchy are as follows:

 

Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities, and listed equities.

 

Level 2 – Valuations for assets and liabilities that can be obtained from readily available pricing sources via independent providers for market transactions involving similar assets or liabilities. The Company’s principal markets for these securities are the secondary institutional markets, and valuations are based on observable market data in those markets.

 

Level 3 – Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. The Company uses Level 3 to value its derivative instruments.

 

Employee Stock-Based Compensation

 

The Company accounts for stock-based compensation in accordance with ASC 718 Compensation-Stock Compensation (“ASC 718”). ASC 718 addresses all forms of share-based payment (“SBP”) awards including shares issued under employee stock purchase plans and stock incentive shares. Under ASC 718 awards result in a cost that is measured at fair value on the awards’ grant date, based on the estimated number of awards that are expected to vest, and will result in a charge to operations.

 

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Net Loss per Share

 

Net loss per common share is computed by dividing net loss by the weighted average common shares outstanding during the period as defined by Financial Accounting Standards, ASC Topic 260, “Earnings per Share.” Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding.

 

Subsequent Event

 

The Company evaluated subsequent events through the date when the condensed consolidated financial statements are issued for disclosure consideration.

 

Recent Accounting Pronouncements

 

There are no recent accounting pronouncements that have an impact on the Company’s operations.

 

NOTE 3 – GOING CONCERN

 

The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business for the twelve months following the date of these condensed consolidated financial statements. The Company has incurred significant operating losses since its inception. As of September 30, 2023, the Company had a working capital deficit of $245,094 and an accumulated deficit of $2,035,661.

 

The Company expects to generate operating cash flows that will be sufficient to fund presently anticipated operations although there can be no assurance. This raises substantial doubt about the Company’s ability to continue as a going concern. Therefore, the Company will need to raise additional funds and is currently exploring alternative sources of financing to supplement the expected cash flow. Historically, the Company has raised capital through private placements, as an interim measure to finance working capital needs and may continue to raise additional capital through the sale of common stock or other securities and obtaining some short-term loans. The Company will be required to continue to do so until its operations become profitable.

 

The Company may attempt to raise capital in the near future through the sale of equity or debt financing; however, there can be assurances the Company will be successful in doing so. There can be no assurance that such additional financing will be available to the Company on acceptable terms or at all.

 

NOTE 4 – DISCONTINUED OPERATIONS

 

On September 1, 2023 the Company decided to transition from its current Clinic Operations to the establishment of a research laboratory. This strategic move was driven by the Company’s commitment to innovation and advancing the field of healthcare through research and development. All of the assets and results of operations from Clinic Operations have been treated as discontinued operations for all periods presented in the condensed financial statements. The assets and liabilities of Clinic Operations were transferred to the Company’s CEO and her spouse for no consideration since Clinic Operations were not profitable in either 2022 or 2023 to date. The following table reflects the results of operations from Clinic Operations for the periods presented.

 

                    
   Three Months Ended
September 30,
   Nine Months Ended
September 30,
 
   2023   2022   2023   2022 
Revenue  $209   $39,613   $64,665   $93,462 
Operating expenses   5,386    45,373    80,274    114,548 
Discontinued operations, net of tax  $(5,177)  $(5,760)  $(15,609)  $(21,086)

 

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NOTE 5 – BUSINESS ACQUISITION

 

On February 10, 2022, the Company entered into a share exchange agreement (the “Share Exchange Agreement”) with MySpray Therapeutics Inc. (“MySpray”), a Saskatchewan, Canadian corporation, Nichol Martinuik (“Martinuik”) and Rachel Martinuik (“R. Martinuik”), the sole officers, directors, and shareholders of MySpray, Qatar Consulting Inc. & Company (“Qatar”), Broadway Creative Consultants Corp. (“Broadway”), and David Lazar (“Lazar”), as the sole officer and director of the Company and the managing member of Activist Investing LLC (“Activist”). Under the Share Exchange Agreement, One Hundred Percent (100%) of the ownership interest of MySpray was exchanged for (i) 51,110,500 shares of common stock of the Company at the Closing, and (ii) an additional 569,889,500 shares of common stock of ADOB, to be issued upon the increase in authorized shares of common stock of ADOB to 700,000,000, each of which is to be issued to Martinuik, R. Martinuik, Qatar, Broadway, and Activist, pro-rata, in accordance with the Share Exchange Agreement. As of the date of this Report, none of the 569,889,500 shares had been issued. The former stockholders of MySpray will acquire a majority of the issued and outstanding common stock as a result of the share exchange transaction. The transaction has been accounted for as a recapitalization of the Company, whereby MySpray is the accounting acquirer.

 

For the acquisition of MySpray the following table summarizes the acquisition date fair value of the consideration paid, identifiable assets acquired and liabilities assumed:

 

Consideration paid

 

     
Common stock, 621,000,000 shares of the Company restricted common stock valued at $0.001 per share  $621,000 
Net liabilities assumed   62,777 
Fair value of total consideration paid  $683,777 

 

Net assets acquired and liabilities assumed

 

     
Cash and cash equivalents  $30,542 
Accounts receivable   595 
Inventory   53,431 
Other assets   1,409 
Total assets  $85,977 
      
Accounts payable and accrued liabilities   117,214 
Government of Canada loan   31,540 
Total liabilities   148,754 
      
Net liabilities assumed  $62,777 

 

The Company has allocated the fair value of the total consideration paid of $547,022 to goodwill and $136,755 to intangible assets with a life of three years. The value of goodwill represented MySpray’s ability to generate profitable operations going forward. Management estimated the provisional fair values of the intangible assets and goodwill on February 10, 2022. As a result of Clinic Operations becoming a discontinued operation, the Company fully impaired its goodwill and intangible asset balance of $590,512.

 

NOTE 6 – INTANGIBLE ASSETS

 

During the three months ended June 30, 2023 the Company acquired intellectual property (IP) by issuing 44,920,000 shares of its common stock valued at $1,707,396. The company is amortizing the value of its IP over a one year period. As a result the Company has recorded amortization expense of $845,293 on its Statements of Operations for the six months ended September 30, 2023. As of September 30, 2023 the balance of intangible assets was $830,571. This amount will be amortized prorata over the next six months.

 

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NOTE 7 – RELATED PARTY TRANSACTIONS

 

The Company has been funded by its executive officers, a former executive officer, and officers of its subsidiary. As of September 30, 2023, the balance due to these individuals amounted to $228,688 in the form of interest-free demand loans, compared to $227,704 during the period ended December 31, 2022. During the nine months ended September 30, 2023, the Company’s officers have advanced $984 in interest free loans to the Company.

 

On September 19, 2023 the former CEO of the Company, David Lazar entered into a $27,778 convertible loan with the Company bearing interest at 3.5%. The maturity date of the Note is September 10, 2024. The conversion price is currently not determinable because the Company’s common stock doesn’t trade on any exchange.

 

On June 1, 2023 the Company decided to transition from its current Clinic Operations to the establishment of a research laboratory. This strategic move was driven by the Company’s commitment to innovation and advancing the field of healthcare through research and development. All of the assets and results of operations from Clinic Operations have been treated as discontinued operations for all periods presented in the condensed consolidated financial statements. The assets and liabilities of Clinic Operations were transferred to the Company’s CEO and her spouse for no consideration since Clinic Operations were not profitable in either 2022 or 2023 to date.

 

During the three months ended June 30, 2023 the Company’s CEO and her spouse each voluntarily donated 47,500,000 of their common shares, for of total of 95,000,000 common shares which were returned to the Company’s treasury.

 

NOTE 8 – COMMON STOCK AND COMMON STOCK PAYABLE

 

On May 5, 2022, the Company filed a Certificate of Amendment with the state of Nevada increasing its authorized shares from 75,000,000 to 700,000,000 shares of $0.001 par value common stock. As of September 30, 2023, and December 31, 2022, a total of 598,545,644 and 75,000,000 shares of common stock were issued and outstanding, respectively. The Company has issued the following shares during 2023:

 

  Ø 21,736,144 shares were issued pursuant to private placements. These shares were valued at $299,762.

 

  Ø 44,920,000 shares were issued to purchase intellectual property and for services. These shares were valued at 1,707,396.

 

  Ø 24,000,000 shares were repurchased. These shares were valued at $76,201.

 

  Ø 6,000,000 shares valued at $77,125 were issued for services.

 

  Ø 95,000,000 shares were returned to treasury by the Company’s officers and treated as donated capital.

 

NOTE 9 – SUBSEQUENT EVENTS

 

In accordance with the Statement of Financial Accounting Standards (“SFAS”) 165 (ASC 855-10) management has performed an evaluation of subsequent events through the date that the condensed consolidated financial statements were available to be issued and has determined that it does not have any material subsequent events to disclose in these condensed consolidated financial statements.

 

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

 

The following discussion and analysis should be read in conjunction with our unaudited consolidated financial statements and the related notes thereto. The management’s discussion and analysis contains forward-looking statements, such as statements of our plans, objectives, expectations, and intentions. Any statements that are not statements of historical fact are forward-looking statements. When used, the words “believe,” “plan,” “intend,” “anticipate,” “target,” “estimate,” “expect” and the like, and/or future tense or conditional constructions (“will,” “may,” “could,” “should,” etc.), or similar expressions, identify certain of these forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. Our actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of several factors. We do not undertake any obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this Quarterly Report on Form 10-Q. The following discussion should be read in conjunction with our audited financial statements and the related notes that appear in our Annual Report on Form 10-K, as filed with the Securities and Exchange Commission on March 30, 2022.

 

Overview

 

Business Overview

 

Soul Biotechnology Corporation is a US holding company incorporated in Nevada in October 2017, which operates through the Company’s wholly owned subsidiary MySpray Therapeutics Inc. (“MySpray”), a Saskatchewan, Canada corporation incorporated on October 2, 2012.

 

MySpray creates innovative and clinically developed products for the global natural health community in the areas of immune function, mental health, and pain management.

 

MySpray Therapeutics® Inc. is currently the license holder of 9 Natural Product Numbers (NPN) through the Natural and Non-prescription Health Products Directorate division of Health Canada.

 

We are preparing to expand formulas to support clinical trials along with the licensing for research and development in the fields of mental health and the impact of treatment protocols with phytonutrients, medicinal mushrooms, and psychedelic compounds under our current “MyShrooms” brand.

 

We are attempting end-to-end capabilities from substrate for growth, genetics, research, extraction, formulations, delivery, and distribution of the finished product. This could allow MySpray to maintain high-quality control and enable us to:

 

  Create formulations for clinical trials.

 

  Supply raw materials, standardized extracts, and medicinal compounds that are in high demand for ongoing academic research globally.

 

  Provide finished products direct to consumer.

 

  Offer white label manufacturing.

 

Through this process, we are attempting to achieve a net zero global environmental footprint, implementing growth solutions using naturally composted substrates and by-products of manufacturing current products. MySpray is a current member of the Canadian Health Food Association (CHFA) and presently offers 5 products in the natural health marketplace, and proudly manufactures in Canada with cGMP credentials, sourced from USDA-certified organic North American producers.

 

MySpray is clinically developing innovative and evidence-based therapeutics that can help us generate revenue through the sales of its five products to distributors, direct wholesale to pharmacies, clinics, health stores, ecommerce, and traditional retailers, along with our retail online store.

 

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Background of the Company

 

MySpray Therapeutics was founded in 2012 by natural health practitioner and researcher, Nichol Martinuik, with a mission of creating the most innovative and life-changing products.

 

The first mission was to find a solution to the low absorption rates of nutrients from pills, leading to the development of Vitamin D3 and B12 oral sprays. Sublingual and buccal absorption provides a much higher absorption by the body, eliminating the gastric breakdown through digestion. With the use of a convenient spray, it ensures that your body is receiving the maximum benefits.

 

MyPain LiniMint was the next product to be approved by Health Canada, after many years of clinical research and development with dimethyl sulfoxide (“DMSO”) as a topical analgesic for pain management. DMSO provides tissue penetration directly to the site of pain and inflammation, with capabilities beyond any other topically applied product. Many trials were conducted with this formula to create a balanced product that minimized the odors associated with DMSO.

 

MyShrooms Immunity was then developed as an immune modulator and formulated with a synergistic blend of 8 medicinal mushrooms. Fungi have been revered medically for thousands of years in their abilities to increase the immune system’s recognition and defence from daily threats. MyShrooms Defence is the evolution of the original Vitamin D3 spray, and a combination of Chaga and D3. Chaga is a potent substance containing over 200 nutrients, including vitamin D and the cofactors necessary for absorption, creating a superior formula for disease prevention.

 

MySpray is committed to ongoing research, and the development of innovative solutions and premium health products. Nichol is a member of the Natural Health Practitioners of Canada, and the Saskatchewan Association of Doctors of Natural Medicine. MySpray Therapeutics is proudly manufactured in Canada and a proud member of the Canadian Health Food Association.

 

Products

 

MySpray offers products in a variety of delivery systems including topical, capsules, and through a highly absorbed convenient oral spray delivery system.

 

MyShrooms Immune-Pro

 

MyShrooms Immune-Pro is a clinical strength herbal medicine to activate, balance, and support a healthy immune system. It is formulated with a powerful and unique trifecta of medicinal mushrooms, ginseng, and propolis. With potent antioxidants and powerful adaptogens it increases energy and the body’s response to stress, along with related mental and physical fatigue.

 

MyShrooms Defence

 

MyShrooms Defence is a combination of chaga, often proclaimed “king of medicinal mushrooms,” and Vitamin D. Chaga is a rich source of potent antioxidants and powerful phytochemicals, such as sterols, phenols, beta-glucans, and melanin. Vitamin D, widely known as the sunshine vitamin, is an essential hormone for disease prevention, and the regulation of minerals. Combined they strengthen the body’s natural defence system, and protect against pathogens, illness, and disease.

 

MyShrooms Immunity

 

MyShrooms Immunity offers the synergistic effect of 8 medicinal mushrooms, each containing complex, unique, and specific compounds providing significant health benefits throughout the whole body. As an immune modulator, it helps to activate, balance, and restore a healthy immune response with a comprehensive combination of the most potent medicinal mushrooms including: Reishi, Chaga, Cordyceps, Turkey Tail, Lion’s Mane, Agaricus Blazei, Shiitake, and Maitake.

 

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MyShrooms Energy

 

MyShrooms Energy is a combination of Cordyceps and Vitamin B12. Cordyceps mushroom has been used for centuries for its energizing and apoptogenic properties, as well as to support oxygen uptake, stamina, endurance, libido, and kidney and adrenal health. With naturally occurring B-vitamins, it is a perfect blend to include Vitamin B12 with its essential and diverse functions in the body. B12 is involved in the maintenance of the nervous system, red blood cell production, energy metabolism and the proper functioning of our brain, heart, liver, and kidneys. Combined they contribute to optimal health, well-being, performance, mood, vitality, and energy.

 

MyPain LiniMint

 

MyPain LiniMint contains 80% DMSO and delivers the deepest tissue penetration available. It is 100% natural and provides unmatched pain relief from muscle strains, joint sprains, backaches & arthritis. The powerful analgesic properties easily penetrate through the skin into all tissues, reducing pain and inflammation at the source to promote the body’s natural healing process, a remarkable advantage over other topically applied products.

 

With approximately 11,000 studies on DMSO, research demonstrates its analgesic properties by blocking the peripheral C nerve fibers and acts as an antioxidant neutralizing the free radicals of inflammation.

 

MySpray generates revenue through the sales of its five products to distributors, direct wholesale to pharmacies, clinics, health stores, ecommerce, and traditional retailers, along with our retail online store.

 

The results from discontinued operations are excluded from management’s discussion of operations below, and from the Liquidity analysis.

 

Results of Operations for the Nine Months Ended September 30, 2023 Compared to the Nine Months Ended September 30, 2022

 

Revenue

 

For the nine months ended September 30, 2023, we recorded $76,781 in revenue from the sale of our products from continuing operations compared to $122,927 for the nine months ended September 30, 2022. We are in the process of developing our strategic business plan going forward and, therefore, revenues may vary from period to period.

 

Cost of sales

 

Cost of sales was $26,255 for the nine months ended September 30, 2023, compared to cost of sales of $44,471 for the nine months ended September 30, 2022.

 

Operating expenses

 

Operating expenses for the nine months ended September 30, 2023 were $1,537,043 compared to $357,784 for the nine months ended September 30, 2022. The increase in operating expenses in the nine months ended September 30, 2023, compared to the same period in 2022 is due to amortization of $845,293 in intangible assets, an impairment of goodwill and intangible assets of $590,512 compared to $-0- in the 2022 period; offset by a decrease in in general and administrative expenses and a significant decrease in professional fees of $197,908 in 2023 compared to 2022.

 

Net Loss

 

As a result of the foregoing, we had a loss from continuing operations of $1,494,171 for the nine months ended September 30, 2023 compared to a loss of $280,620 during the same nine-month period ended September 30, 2022. The loss from discontinued operations for the nine months ended September 30, 2023 was $15,609 compared to a loss of $21,086 during the same nine-month period ended September 30, 2022.

 

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Liquidity and Capital Resources

 

We had $10,574 in cash on hand as of September 30, 2023.

 

Net cash used in operating activities was $79,921 for the nine months ended September 30, 2023, compared to $267,440 for the nine months ended September 30, 2022. The decrease in cash used in operating activities during the nine months ended September 30, 2023 was primarily due to changes in operating assets and liabilities.

 

Net cash provided investing activities was $-0- for the period ended September 30, 2023 compared to $19,981 in net cash provided by investing activities during the period ended September 30, 2022. The decrease is attributable to the acquisition of a business net of cash acquired in the 2022 period.

 

Net cash provided by financing activities was $55,369 for the nine months ended September 30, 2023, compared to $284,490 for the nine months ended September 30, 2022. The decrease during the 2023 period is primarily attributable to $$271,669 in proceeds from the sale of common stock in the 2022 period, compared to $27,778 in proceeds from convertible loans and $26,607 in proceeds from the sale of common stock in the 2023 period.

 

We believe will become cash flow positive from operations in the future, however, there can be no assurance that we will be successful. Also, there can be no assurance that related parties will continue to fund our operations or that we can obtain funding from the sale of our securities or through the issuance of debt.

 

Off-Balance Sheet Arrangements

 

We do not have 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 that is material to investors.

 

Critical Accounting Policies and Estimates

 

The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

We believe that the following critical policies affect our more significant judgments and estimates used in preparation of our condensed consolidated financial statements.

 

See Note 2 to the Financial Statements for a Listing of our Critical Accounting Policies

 

New Accounting Pronouncements

 

There are no new accounting pronouncements that have a material impact on our condensed consolidated financial statements.

 

Off-Balance Sheet Arrangements

 

None.

 

Item 3. Quantitative And Qualitative Disclosures About Market Risk.

 

We are a smaller reporting company and are not required to provide this information.

 

17

 

 

Item 4. Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures.

 

Our management is responsible for establishing and maintaining a system of “disclosure controls and procedures” (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our disclosure controls and procedures were not effective as of September 30, 2023.

 

Management’s Report on Internal Control over Financial Reporting.

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that:

 

  pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
     
  provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
     
  provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the consolidated financial statements.

 

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate.

 

Our management assessed the effectiveness of our internal control over financial reporting based on the parameters set forth above and has concluded that as of September 30, 2023, our internal control over financial reporting was not effective to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with U.S. generally accepted accounting principles as a result of the following material weaknesses:

 

  The Company does not have sufficient segregation of duties within accounting functions due to only having one officer and limited resources.
     
  The Company does not have an independent board of directors or an audit committee.
     
  The Company does not have written documentation of our internal control policies and procedures.
     
  All of the Company’s financial reporting is carried out by a financial consultant.

 

We plan to rectify these weaknesses by implementing an independent board of directors, establishing written policies and procedures for our internal control of financial reporting, and hiring additional accounting personnel at such time as we complete a reverse merger or similar business acquisition.

 

Changes in Internal Control over Financial Reporting.

 

There has been no change in our internal control over financial reporting during the year September 30, 2023, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

18

 

 

PART II OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

The Company may be involved in certain legal proceedings that arise from time to time in the ordinary course of its business. Legal expenses associated with any contingency are expensed as incurred. The Company’s officers and directors are not aware of any threatened or pending litigation to which the Company is a party or which any of its property is the subject and which would have any material, adverse effect on the Company.

 

Item 1A. Risk Factors.

 

As a smaller reporting company, we are not required to include this disclosure in this Quarterly Report on Form 10-Q.

 

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

 

None.

 

Item 3. Defaults Upon Senior Securities.

 

None.

 

Item 4. Mine Safety Disclosures.

 

Not applicable.

 

Item 5. Other Information.

 

None.

 

19

 

 

Item 6. Exhibits.

 

The exhibits listed on the Exhibit Index below are provided as part of this report.

 

3.1   Articles of Incorporation of the Company Inc., as amended on March 16, 2018 (incorporated by reference to our Registration Statement on Form S-1 filed on January 19, 2018)
     
3.2   Bylaws of the Company Inc. (incorporated by reference to our Registration Statement on Form S-1 filed on January 19, 2018)
     
10.1   Share Exchange Agreement (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the SEC on February 10, 2022
     
22   Demand Promissory Note Payable to Activist Investing LLC (incorporated by reference to our Registration Statement on 10-12G/A filed on December 22, 2020)
     
23   Demand Promissory Note Payable to Rebecca Lazar (incorporated by reference to our Registration Statement on 10-12G/A filed on December 22, 2020)
     
31.1   Certification of Principal Executive Officer and Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a)
     
32.1   Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
     
101.INS   XBRL Instance Document
     
101.SCH   XBRL Schema Document
     
101.CAL   XBRL Calculation Linkbase Document
     
101.DEF   XBRL Definition Linkbase Document
     
101.LAB   XBRL Label Linkbase Document
     
101.PRE   XBRL Presentation Linkbase Document

 

20

 

 

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.

 

  SOUL BIOTECHNOLOGY CORPORATION
     
Dated: November 20, 2023 By: /s/ Rachel Martinuik
    Rachel Martinuik
    Chief Executive Officer and
    Chief Financial Officer
    Principal Executive Officer,
    Principal Financial Officer

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

21

 

Exhibit 31.1

 

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER

 

I, Rachel Martinuik, certify that:

 

1. I have reviewed this Quarterly report on Form 10-Q of Soul Biotechnology Corporation;

 

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 consolidated 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 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 our supervision, to ensure that material information relating to the registrant, 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 consolidated 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 a quarter 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 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.

 

Dated: November 20, 2023 By: /s/ Rachel Martinuik
    Rachel Martinuik
    Chief Executive Officer
   

(Principal Executive Officer and

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 SOUL BIOTECHNOLOGY CORPORATION (the “Company”) on Form 10-Q for the quarter ended September 30, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Rachel Martinuik, Chief Executive Officer, certify, pursuant to 18 U.S.C. section 906 of the Sarbanes-Oxley Act of 2002, that:

 

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities and 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.

 

A signed original of this written statement required by Section 906 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.

 

Dated: November 20, 2023 By: /s/ Rachel Martinuik
    Rachel Martinuik
    Chief Executive Officer
   

(Principal Executive Officer and

Principal Financial Officer)

 

A signed original of this written statement required by Section 906 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.

 

 

v3.23.3
Cover - shares
9 Months Ended
Sep. 30, 2023
Nov. 20, 2023
Cover [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Quarterly Report true  
Document Transition Report false  
Document Period End Date Sep. 30, 2023  
Document Fiscal Period Focus Q3  
Document Fiscal Year Focus 2023  
Current Fiscal Year End Date --12-31  
Entity File Number 333-222631  
Entity Registrant Name Adorbs Inc  
Entity Central Index Key 0001726822  
Entity Tax Identification Number 82-3155323  
Entity Incorporation, State or Country Code NV  
Entity Address, Address Line One 36 Fourth Ave. N  
Entity Address, City or Town Yorkton Saskatchewan  
Entity Address, Country CA  
Entity Address, Postal Zip Code S3N 2V7  
City Area Code 306  
Local Phone Number 563-4123  
Entity Current Reporting Status No  
Entity Interactive Data Current No  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   598,545,644
v3.23.3
Condensed Balance Sheets (Unaudited) - USD ($)
Sep. 30, 2023
Dec. 31, 2022
Current assets    
Cash and cash equivalents $ 10,574 $ 41,808
Accounts receivable 3,104 1,344
Inventory 38,542 35,281
Prepaid and other assets 1,181 1,179
Total current assets 53,400 79,612
Goodwill 512,196
Intangible assets 830,571 88,923
Total assets 883,972 680,731
Current Liabilities    
Accrued payable and accrued liabilities 42,028 42,953
Common stock payable 843,878
Convertible note -related party 27,778
Due to related parties 228,688 227,704
Total current liabilities 298,494 1,114,535
Government loans 29,584 29,532
Total liabilities 328,078 1,144,067
Stockholders’ Equity (Deficit)    
Common stock, Par Value $0.001, 700,000,000 shares authorized, 598,545,644 and 598,545,644 shares issued and outstanding of shares as of September 30, 2023 and December 31, 2022, respectively 598,546 75,000
Additional paid in capital 2,080,075 25,740
Accumulated deficit (2,035,661) (525,881)
Accumulated other comprehensive loss (87,066) (38,195)
Total stockholders’ equity (deficit) 555,894 (463,336)
Total liabilities and stockholders’ equity (deficit) $ 883,972 $ 680,731
v3.23.3
Condensed Balance Sheets (Unaudited) (Parenthetical) - $ / shares
Sep. 30, 2023
Dec. 31, 2022
Statement of Financial Position [Abstract]    
Common stock, par value (in Dollars per share) $ 0.001 $ 0.001
Common stock, shares authorized 700,000,000 700,000,000
Common stock, shares issued 598,545,644 598,545,644
Common stock, shares Outstanding 598,545,644 598,545,644
v3.23.3
Condensed Statements of Operations (Unaudited) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Revenue, net        
Revenue, net $ 16,260 $ 42,154 $ 76,871 $ 122,927
Cost of sales 6,015 5,333 26,255 44,471
Gross margin 10,245 36,821 50,617 78,456
Operating expenses        
General and administrative expenses (21,030) 31,970 34,738 64,122
Professional fees 16,242 94,716 66,500 263,607
Amortization of intangible assets 417,924 11,107 845,293 30,055
Impairment of goodwill and intangible   590,512
Total operating expenses 413,136 137,794 1,537,043 357,784
Loss from operations (402,891) (100,973) (1,486,426) (279,328)
Other income (expense)        
Interest expense (7,067) (449) (7,745) (1,292)
Total other income (expense) (7,067) (449) (7,745) (1,292)
Loss from continuing operations before income taxes (409,958) (101,422) (1,494,171) (280,620)
Provision (benefit) for income taxes
Loss from continuing operations (409,958) (101,422) (1,494,171) (280,620)
Loss from discontinued operations (5,177) (5,760) (15,609) (21,086)
Net loss $ (415,135) $ (107,182) $ (1,509,780) $ (301,706)
Basic and diluted loss per share:        
Loss from continuing operations - Basic $ (0.00) $ (0.00) $ (0.00) $ (0.00)
Loss from continuing operations - DIluted (0.00) (0.00) (0.00) (0.00)
Loss from discontinued operations - Basic (0.00) (0.00) (0.00) (0.00)
Loss from discontinued operations - Diluted $ (0.00) $ (0.00) $ (0.00) $ (0.00)
Weighted average number of shares outstanding - Basic 598,545,644 75,000,000 598,545,644 67,324,064
Weighted average number of shares outstanding - Diluted 598,545,644 75,000,000 598,545,644 67,324,064
Comprehensive loss:        
Net loss $ (415,135) $ (107,182) $ (1,509,780) $ (301,706)
Foreign currency translation adjustment (41,622) (20,430) (48,871) (37,101)
Comprehensive loss $ (456,757) $ (127,612) $ (1,558,651) $ (338,807)
v3.23.3
Condensed Statements of Changes in Shareholders' Deficit (Unaudited) - USD ($)
Common Stock [Member]
Additional Paid-in Capital [Member]
AOCI Attributable to Parent [Member]
Retained Earnings [Member]
Total
Beginning balance, value at Dec. 31, 2021 $ 23,890 $ 25,740 $ (183,311) $ (133,681)
Beginnig balance, shares at Dec. 31, 2021 23,889,500        
Shares issued with the acquisition of MySpray $ 51,110       51,110
Shares issued with acquisition of MySpray, Shares 51,110,500        
Net loss   (34,120) (34,120)
Ending balance, value at Mar. 31, 2022 $ 75,000 25,740 (217,431) (116,691)
Ending balance, shares at Mar. 31, 2022 75,000,000        
Change in exchange rates     (16,671)   (16,671)
Net loss (160,404) (160,404)
Ending balance, value at Jun. 30, 2022 $ 75,000 25,740 (16,671) (377,835) (293,766)
Ending balance, shares at Jun. 30, 2022 75,000,000        
Change in exchange rates     (20,430)   (20,430)
Net loss (107,182) (107,182)
Ending balance, value at Sep. 30, 2022 $ 75,000 (37,101) (485,017) (421,377)
Ending balance, shares at Sep. 30, 2022 75,000,000        
Beginning balance, value at Dec. 31, 2022 $ 75,000 25,740 (38,195) (525,881) (463,336)
Beginnig balance, shares at Dec. 31, 2022 75,000,000        
Issuance of acquisition shares $ 569,890       569,890
Issuance of acquisition shares, shares 569,889,500        
Change in exchange rates     290   290
Net loss     (60,305) (60,305)
Ending balance, value at Mar. 31, 2023 $ 644,890 25,740 (37,905) (586,186) 46,538
Ending balance, shares at Mar. 31, 2023 644,889,500        
Private placement issuance of shares $ 21,036 252,119     273,155
Private placement issuance of shares, Shares 21,036,144        
Issuance of shares for services -prior $ 6,000 71,125     77,125
Issuance of shares for services -prior, Shares 6,000,000        
Repurchase of common shares $ (24,000) (52,291)     (76,291)
Repurchase of common shares, Shares (24,000,000)        
Shares issued for purchase of intangible assets and service agreement $ 44,920 1,662,476     1,707,396
Shares issued for purchase of intangible assets and service agreement, Shares 44,920,000        
Capital contribution from officers $ (95,000) 95,000    
Capital contribution from officers, Shares (95,000,000)        
Private placement of shares $ 700 25,907     26,607
Private placement of shares, Shares 700,000        
Change in exchange rates     (7,539)   (7,539)
Net loss       (1,034,339) (1,034,339)
Ending balance, value at Jun. 30, 2023 $ 598,546 2,080,075 (45,444) (1,620,526) 1,012,651
Ending balance, shares at Jun. 30, 2023 598,545,644        
Change in exchange rates     (41,622)   (41,622)
Net loss   (415,135) (415,135)
Ending balance, value at Sep. 30, 2023 $ 598,546 $ 2,080,075 $ (87,066) $ (2,035,661) $ 555,894
Ending balance, shares at Sep. 30, 2023 598,545,644        
v3.23.3
Condensed Statements of Cash Flows (Unaudited) - USD ($)
9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Cash Flows From Operating Activities    
Net loss $ (1,509,780) $ (301,706)
Less : Loss from discontinued operation (15,609) (21,086)
Loss from continuing operations (1,494,171) (280,620)
Amortization of intangible assets 845,293 30,055
Impairment of goodwill and intangible assets 590,512
Changes in operating assets and liabilities:    
Accounts receivable (1,760) (3,056)
Inventory (3,261) 268
Accrued payable and accrued liabilities (925) 6,999
Net cash used in operating activities -continuing operations (64,312) (246,354)
Net cash used in operating activities -discontinued operations (15,609) (21,086)
Net cash used in operating activities (79,921) (267,440)
Cash Flows from Investing Activities    
Acquisition of a business net of cash acquired 19,981
Net cash provided by investing activities 19,981
Cash Flows From Financing Activities    
Proceeds from the sale of common stock 26,607
Proceeds from convertible notes 27,778  
Common stock payable 271,669
Proceeds from related party loans 984 12,821
Net cash provided by financing activities 55,369 284,490
Effect of exchange rates on cash and cash equivalents (6,682) 15,343
Net (decrease) increase in cash and cash equivalents (31,234) 52,374
Cash and cash equivalents, beginning of year 41,808 9,499
Cash and cash equivalents, end of year 10,574 61,873
Supplemental disclosure of cash flow information    
Cash paid for income tax expense
Cash paid for interest expense
v3.23.3
ORGANIZATION AND DESCRIPTION OF THE BUSINESS
9 Months Ended
Sep. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
ORGANIZATION AND DESCRIPTION OF THE BUSINESS

NOTE 1 – ORGANIZATION AND DESCRIPTION OF THE BUSINESS

 

Basis of Presentation and Organization

 

Soul Biotechnology Corporation, f/k/a Adorbs Inc. (“Soul” or the “Company”) is a Nevada corporation. Adorbs was formerly a developmental stage corporation formed to provide organic children’s clothing designed to be cute, comfortable, and trendy. The Company was incorporated under the laws of the State of Nevada on October 18, 2017. On that date, the Company was authorized to issue 75,000,000 shares of common stock at $0.001 par value.

 

On February 10, 2022, the Company entered into a share exchange agreement (the “Share Exchange Agreement”) with MySpray Therapeutics Inc. (“MySpray”), a Saskatchewan, Canadian corporation, Nichol Martinuik (“Martinuik”) and Rachel Martinuik (“R. Martinuik”), the sole officers, directors, and shareholders of MySpray, Qatar Consulting Inc. & Company (“Qatar”), Broadway Creative Consultants Corp. (“Broadway”), and David Lazar (“Lazar”), as the sole officer and director of the Company and the managing member of Activist Investing LLC (“Activist”). Under the Share Exchange Agreement, One Hundred Percent (100%) of the ownership interest of MySpray was exchanged for (i) 51,110,500 shares of common stock of the Company at the Closing, and (ii) an additional 569,889,500 shares of common stock of ADOB, to be issued upon the increase in authorized shares of common stock of ADOB to 700,000,000, each of which is to be issued to Martinuik, R. Martinuik, Qatar, Broadway, and Activist, pro-rata, in accordance with the Share Exchange Agreement. The former stockholders of MySpray will acquire a majority of the issued and outstanding common stock as a result of the share exchange transaction. The transaction has been accounted for as a recapitalization of the Company, whereby MySpray is the accounting acquirer.

 

Immediately after completion of such share exchange, the Company will have a total of 644,889,500 issued and outstanding shares, with authorized share capital for common share of 700,000,000.

 

Consequently, the Company has ceased to fall under the definition of a shell company as defined in Rule 12b-2 under the Exchange Act of 1934, as amended (the “Exchange Act”) and MySpray is now a wholly-owned subsidiary.

 

On May 5, 2022, the Company filed a Certificate of Amendment with the state of Nevada increasing its authorized shares from 75,000,000 to 700,000,000 shares of $0.001 par value common stock. None of the additional 569,889,500 shares issuable under the terms of the Share Agreement, have been issued.

 

MySpray creates innovative and clinically developed products for the global natural health community in the areas of immune function, mental health, and pain management and is currently the license holder of 9 Natural Product Numbers (NPN) through the Natural and Non-prescription Health Products Directorate division of Health Canada.

 

MySpray is preparing to expand formulas to support clinical trials along with the licensing for research and development in the fields of mental health and the impact of treatment protocols with phytonutrients, medicinal mushrooms, and psychedelic compounds under our current “MyShrooms” brand. Also, MySpray is attempting end-to-end capabilities from substrate for growth, genetics, research, extraction, formulations, delivery, and distribution of the finished product. This could allow MySpray to maintain high-quality control and enable us to:

 

  Create formulations for clinical trials.

 

  Supply raw materials, standardized extracts, and medicinal compounds that are in high demand for ongoing academic research globally.

 

  Provide finished products direct to consumer.

 

  Offer white label manufacturing.

 

The Company changed its name to Soul Biotechnology Corporation on January 3, 2023.

 

On March 13, 2023, the sole existing director and officer resigned immediately. Accordingly, David Lazar, serving as a director and an officer, ceased to be the President, Chief Executive Officer, Chief Financial Officer, and as a Member of the Board of Directors of the Company. Also on March 13, 2023, Rachel Martinuik consented to the new CEO, CFO, Treasurer, and a Member of the Board of Directors of the Company and Nichol Martinuik consented to act as the new President, Secretary, and a Member of the Board of Directors of the Company.

 

Rachel Martinuik, 47, CEO and Chair of the board of MySpray, has been part of MySpray from inception. In her previous role as Chief Operating Officer, her responsibilities included the oversight of MySpray’s resources and oversees budgetary expenditures.

 

Nichol Martinuik, 47, President & Founder of MySpray, has been in health sciences, traditional medicine, and the natural health industry since 1997, gaining clinical experience in pain management, disease prevention, and therapeutic health solutions.

 

On June 1, 2023 the Company decided to transition from its current Clinic Operations to the establishment of a research laboratory. This strategic move was driven by the Company’s commitment to innovation and advancing the field of healthcare through research and development to include clinical trials of medicinal mushrooms, cannabinoids, and psychedelic compounds including psilocybin. All of the assets and results of operations from Clinic Operations have been treated as discontinued operations for all periods presented in the condensed financial statements. See Note 4. Discontinued Operations.

 

The Company’s year-end is December 31.

 

All figures presented in this report are in US dollars unless stated otherwise.

 

v3.23.3
SUMMARY OF SIGNIFICANT ACCOUNTING ASSUMPTIONS AND POLICIES
9 Months Ended
Sep. 30, 2023
Accounting Policies [Abstract]  
SUMMARY OF SIGNIFICANT ACCOUNTING ASSUMPTIONS AND POLICIES

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING ASSUMPTIONS AND POLICIES

 

Basis of presentation

 

The accompanying condensed consolidated financial statements have been prepared in accordance with the FASB’s ASC, which is the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of condensed financial statements in conformity with generally accepted accounting principles (“GAAP”) in the United States. The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary MySpray Therapeutics Inc. All intercompany accounts and transactions are eliminated in consolidation.

 

Discontinued Operations

 

The operations of the Company’s former Clinic Division has been presented as discontinued operations. Unless otherwise noted, amounts and disclosures throughout these Notes to Condensed Consolidated Financial Statements relate solely to continuing operations and exclude all discontinued operations. See Note 4. for additional information on discontinued operations.

 

Going Concern

 

The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business for the twelve months following the date of these condensed consolidated financial statements.

 

The Company expects to generate operating cash flow that will be sufficient to fund presently anticipated operations although there can be no assurance. This raises substantial doubt about the Company’s ability to continue as a going concern. Therefore, the Company will need to raise additional funds and is currently exploring alternative sources of financing to supplement the expected cash flow. Historically, the Company has raised capital through private placements, as an interim measure to finance working capital needs and may continue to raise additional capital through the sale of common stock or other securities and obtaining some short-term loans. The Company will be required to continue to do so until its operations become profitable.

 

The Company may attempt to raise capital in the near future through the sale of equity or debt financing; however, there can be assurances the Company will be successful in doing so. There can be no assurance that such additional financing will be available to the Company on acceptable terms or at all.

 

Management’s Representation of Interim Condensed Consolidated Financial Statements

 

The accompanying unaudited condensed consolidated financial statements have been prepared by the Company without audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The Company uses the same accounting policies in preparing quarterly and annual condensed consolidated financial statements. Certain information and footnote disclosures normally included in condensed consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been or omitted as allowed by such rules and regulations, and management believes that the disclosures are adequate to make the information presented not misleading. These condensed consolidated financial statements include all of the adjustments, which in the opinion of management are necessary for a fair presentation of financial position and results of operations. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative of results for a full year.

 

Estimates

 

The preparation of condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of liabilities on the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant estimates relate to the amortization period for intangible assets and income taxes. The Company bases its estimates on historical experience, known or expected trends, and various other assumptions that are believed to be reasonable given the quality of information available as of the date of these condensed consolidated financial statements. The results of these assumptions provide the basis for making estimates about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates.

 

Cash and Cash Equivalents

 

For purposes of reporting within the statements of cash flows, the Company considers all cash on hand, cash accounts not subject to withdrawal restrictions or penalties, and all highly liquid debt instruments purchased with a maturity of three months or less to be cash and cash equivalents. As of September 30, 2023, and December 31, 2022, the on-hand cash balances were $10,574 and $41,808, respectively.

 

Inventory

 

Inventory, is stated at the lower of cost or net realizable value with cost determined under the first-in, first-out (“FIFO”) method. As of September 30, 2023, and December 31, 2022, inventory amounted to $38,542 and $35,281, respectively.

 

Goodwill and Intangible Assets

 

Goodwill represents the future economic benefit arising from other assets acquired that could not be individually identified and separately recognized. The goodwill arising from the Company’s acquisition is attributable to the value of the potential expanded market opportunity with new customers. Intangible assets have either an identifiable or indefinite useful life. Intangible assets with identifiable useful lives are amortized on a straight-line basis over their economic or legal life, whichever is shorter. The Company’s amortizable intangible assets consist primarily of customer relationships, trademarks, and product formulations. The useful life of these customer relationships is estimated to be three years. The Company also has purchased intellectual property which is amortized over a one year period.

 

Goodwill is not amortized but is subject to annual impairment testing unless circumstances dictate more frequent assessments. The Company performs an annual impairment assessment for goodwill during the fourth quarter of each year and more frequently whenever events or changes in circumstances indicate that the fair value of the asset may be less than the carrying amount. Goodwill impairment testing compares the fair value of the reporting unit to its carrying amount. The fair value of the reporting unit is determined by considering both the income approach and market approaches. The fair values calculated under the income approach and market approaches are weighted based on circumstances surrounding the reporting unit. Under the income approach, the Company determines fair value based on estimated future cash flows of the reporting unit, which are discounted to the present value using discount factors that consider the timing and risk of cash flows. For the discount rate, the Company relies on the capital asset pricing model approach, which includes an assessment of the risk-free interest rate, the rate of return from publicly traded stocks, the Company’s risk relative to the overall market, the Company’s size and industry and other Company-specific risks. Other significant assumptions used in the income approach include the terminal value, growth rates, future capital expenditures, and changes in future working capital requirements. The market approaches use key multiples from guideline businesses that are comparable and are traded on a public market. If the fair value of the reporting unit is greater than its carrying amount, there is no impairment. If the reporting unit’s carrying amount exceeds its fair value, then an impairment loss is recognized in an amount equal to the excess.

 

Due to the discontinuation of Clinic Operations as described throughout this Report, during the three months ended June 30, 2023, the Company performed an impairment analysis and determined that its goodwill and intangible assets were fully impaired. As a result the Company recorded an impairment charge of $590,512 on its Statements of Operations for the three months ended June 30, 2023.

 

Revenue Recognition

 

The Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The guidance provided in Accounting Standards Codification (“ASC”) Topic 606 (“ASC 606”) requires entities to use a five-step model to recognize revenue by allocating the consideration from contracts to performance obligations on a relative standalone selling price basis. Revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services. The standard also requires new disclosures regarding the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. ASC 606 also includes Subtopic 340-40, Other Assets and Deferred Costs – Contracts with Customers, which requires the deferral of incremental costs of obtaining a contract with a customer.

 

Foreign Currency Translation

 

The functional and reporting currency of MySpray is the Canadian dollar. Monetary assets denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Average monthly rates are used to translate revenues and expenses.

 

Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Exchange gains or losses arising from foreign currency transactions are included in the determination of net income for the respective periods.

 

Assets and liabilities of the Company’s operations are translated into the reporting currency, United States dollars, at the exchange rate in effect at the balance sheet dates. Revenue and expenses are translated at average rates in effect during the reporting periods.

 

Assets and liabilities of the Company’s operations are translated into the reporting currency, United States dollars, at the exchange rate in effect at the balance sheet dates. Revenue and expenses are translated at average rates in effect during the reporting periods. Equity transactions are recorded at the historical rate when the transaction occurs. The resulting translation adjustment is reflected as accumulated other comprehensive income, a separate component of stockholders’ equity in the statement of stockholders’ equity.

 

Differences may arise in the amount of bad debt expense, depreciation expense and amortization expense reported in the Company’s operating results as compared to the corresponding change in the allowance for doubtful accounts, accumulated depreciation, and accumulated amortization, respectively, due to foreign currency translation. These translation adjustments are reflected in accumulated other comprehensive income, a separate component of the Company’s stockholders’ equity.

 

Income Taxes

 

The Company accounts for income taxes pursuant to FASB ASC Topic 740, Income Taxes. Under FASB ASC Topic 740, deferred tax assets and liabilities are determined based on temporary differences between the bases of certain assets and liabilities for income tax and financial reporting purposes. The deferred tax assets and liabilities are classified according to the financial statement classification of the assets and liabilities generating the differences. The Company maintains a 100% valuation allowance with respect to deferred tax assets, therefore there are no deferred taxes on the Company’s Balance Sheet. The Company establishes a valuation allowance based upon the potential likelihood of realizing the deferred tax asset and taking into consideration the Company’s financial position and results of operations for the current period. Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carry-forward period under the Federal tax laws. Changes in circumstances, such as the Company generating taxable income, could cause a change in judgment about the reliability of the related deferred tax asset. Any change in the valuation allowance will be included in income in the year of the change in estimate.

 

Fair Value Measurement

 

The Company values its convertible notes and amounts due to related partings and short-term loans payable under FASB ASC 820 which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements.

 

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based on the observability of those inputs. ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement).

 

The three levels of the fair value hierarchy are as follows:

 

Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities, and listed equities.

 

Level 2 – Valuations for assets and liabilities that can be obtained from readily available pricing sources via independent providers for market transactions involving similar assets or liabilities. The Company’s principal markets for these securities are the secondary institutional markets, and valuations are based on observable market data in those markets.

 

Level 3 – Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. The Company uses Level 3 to value its derivative instruments.

 

Employee Stock-Based Compensation

 

The Company accounts for stock-based compensation in accordance with ASC 718 Compensation-Stock Compensation (“ASC 718”). ASC 718 addresses all forms of share-based payment (“SBP”) awards including shares issued under employee stock purchase plans and stock incentive shares. Under ASC 718 awards result in a cost that is measured at fair value on the awards’ grant date, based on the estimated number of awards that are expected to vest, and will result in a charge to operations.

 

Net Loss per Share

 

Net loss per common share is computed by dividing net loss by the weighted average common shares outstanding during the period as defined by Financial Accounting Standards, ASC Topic 260, “Earnings per Share.” Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding.

 

Subsequent Event

 

The Company evaluated subsequent events through the date when the condensed consolidated financial statements are issued for disclosure consideration.

 

Recent Accounting Pronouncements

 

There are no recent accounting pronouncements that have an impact on the Company’s operations.

 

v3.23.3
GOING CONCERN
9 Months Ended
Sep. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
GOING CONCERN

NOTE 3 – GOING CONCERN

 

The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business for the twelve months following the date of these condensed consolidated financial statements. The Company has incurred significant operating losses since its inception. As of September 30, 2023, the Company had a working capital deficit of $245,094 and an accumulated deficit of $2,035,661.

 

The Company expects to generate operating cash flows that will be sufficient to fund presently anticipated operations although there can be no assurance. This raises substantial doubt about the Company’s ability to continue as a going concern. Therefore, the Company will need to raise additional funds and is currently exploring alternative sources of financing to supplement the expected cash flow. Historically, the Company has raised capital through private placements, as an interim measure to finance working capital needs and may continue to raise additional capital through the sale of common stock or other securities and obtaining some short-term loans. The Company will be required to continue to do so until its operations become profitable.

 

The Company may attempt to raise capital in the near future through the sale of equity or debt financing; however, there can be assurances the Company will be successful in doing so. There can be no assurance that such additional financing will be available to the Company on acceptable terms or at all.

 

v3.23.3
DISCONTINUED OPERATIONS
9 Months Ended
Sep. 30, 2023
Discontinued Operations and Disposal Groups [Abstract]  
DISCONTINUED OPERATIONS

NOTE 4 – DISCONTINUED OPERATIONS

 

On September 1, 2023 the Company decided to transition from its current Clinic Operations to the establishment of a research laboratory. This strategic move was driven by the Company’s commitment to innovation and advancing the field of healthcare through research and development. All of the assets and results of operations from Clinic Operations have been treated as discontinued operations for all periods presented in the condensed financial statements. The assets and liabilities of Clinic Operations were transferred to the Company’s CEO and her spouse for no consideration since Clinic Operations were not profitable in either 2022 or 2023 to date. The following table reflects the results of operations from Clinic Operations for the periods presented.

 

                    
   Three Months Ended
September 30,
   Nine Months Ended
September 30,
 
   2023   2022   2023   2022 
Revenue  $209   $39,613   $64,665   $93,462 
Operating expenses   5,386    45,373    80,274    114,548 
Discontinued operations, net of tax  $(5,177)  $(5,760)  $(15,609)  $(21,086)

 

v3.23.3
BUSINESS ACQUISITION
9 Months Ended
Sep. 30, 2023
Business Combination and Asset Acquisition [Abstract]  
BUSINESS ACQUISITION

NOTE 5 – BUSINESS ACQUISITION

 

On February 10, 2022, the Company entered into a share exchange agreement (the “Share Exchange Agreement”) with MySpray Therapeutics Inc. (“MySpray”), a Saskatchewan, Canadian corporation, Nichol Martinuik (“Martinuik”) and Rachel Martinuik (“R. Martinuik”), the sole officers, directors, and shareholders of MySpray, Qatar Consulting Inc. & Company (“Qatar”), Broadway Creative Consultants Corp. (“Broadway”), and David Lazar (“Lazar”), as the sole officer and director of the Company and the managing member of Activist Investing LLC (“Activist”). Under the Share Exchange Agreement, One Hundred Percent (100%) of the ownership interest of MySpray was exchanged for (i) 51,110,500 shares of common stock of the Company at the Closing, and (ii) an additional 569,889,500 shares of common stock of ADOB, to be issued upon the increase in authorized shares of common stock of ADOB to 700,000,000, each of which is to be issued to Martinuik, R. Martinuik, Qatar, Broadway, and Activist, pro-rata, in accordance with the Share Exchange Agreement. As of the date of this Report, none of the 569,889,500 shares had been issued. The former stockholders of MySpray will acquire a majority of the issued and outstanding common stock as a result of the share exchange transaction. The transaction has been accounted for as a recapitalization of the Company, whereby MySpray is the accounting acquirer.

 

For the acquisition of MySpray the following table summarizes the acquisition date fair value of the consideration paid, identifiable assets acquired and liabilities assumed:

 

Consideration paid

 

     
Common stock, 621,000,000 shares of the Company restricted common stock valued at $0.001 per share  $621,000 
Net liabilities assumed   62,777 
Fair value of total consideration paid  $683,777 

 

Net assets acquired and liabilities assumed

 

     
Cash and cash equivalents  $30,542 
Accounts receivable   595 
Inventory   53,431 
Other assets   1,409 
Total assets  $85,977 
      
Accounts payable and accrued liabilities   117,214 
Government of Canada loan   31,540 
Total liabilities   148,754 
      
Net liabilities assumed  $62,777 

 

The Company has allocated the fair value of the total consideration paid of $547,022 to goodwill and $136,755 to intangible assets with a life of three years. The value of goodwill represented MySpray’s ability to generate profitable operations going forward. Management estimated the provisional fair values of the intangible assets and goodwill on February 10, 2022. As a result of Clinic Operations becoming a discontinued operation, the Company fully impaired its goodwill and intangible asset balance of $590,512.

 

v3.23.3
INTANGIBLE ASSETS
9 Months Ended
Sep. 30, 2023
Goodwill and Intangible Assets Disclosure [Abstract]  
INTANGIBLE ASSETS

NOTE 6 – INTANGIBLE ASSETS

 

During the three months ended June 30, 2023 the Company acquired intellectual property (IP) by issuing 44,920,000 shares of its common stock valued at $1,707,396. The company is amortizing the value of its IP over a one year period. As a result the Company has recorded amortization expense of $845,293 on its Statements of Operations for the six months ended September 30, 2023. As of September 30, 2023 the balance of intangible assets was $830,571. This amount will be amortized prorata over the next six months.

 

v3.23.3
RELATED PARTY TRANSACTIONS
9 Months Ended
Sep. 30, 2023
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS

NOTE 7 – RELATED PARTY TRANSACTIONS

 

The Company has been funded by its executive officers, a former executive officer, and officers of its subsidiary. As of September 30, 2023, the balance due to these individuals amounted to $228,688 in the form of interest-free demand loans, compared to $227,704 during the period ended December 31, 2022. During the nine months ended September 30, 2023, the Company’s officers have advanced $984 in interest free loans to the Company.

 

On September 19, 2023 the former CEO of the Company, David Lazar entered into a $27,778 convertible loan with the Company bearing interest at 3.5%. The maturity date of the Note is September 10, 2024. The conversion price is currently not determinable because the Company’s common stock doesn’t trade on any exchange.

 

On June 1, 2023 the Company decided to transition from its current Clinic Operations to the establishment of a research laboratory. This strategic move was driven by the Company’s commitment to innovation and advancing the field of healthcare through research and development. All of the assets and results of operations from Clinic Operations have been treated as discontinued operations for all periods presented in the condensed consolidated financial statements. The assets and liabilities of Clinic Operations were transferred to the Company’s CEO and her spouse for no consideration since Clinic Operations were not profitable in either 2022 or 2023 to date.

 

During the three months ended June 30, 2023 the Company’s CEO and her spouse each voluntarily donated 47,500,000 of their common shares, for of total of 95,000,000 common shares which were returned to the Company’s treasury.

 

v3.23.3
COMMON STOCK AND COMMON STOCK PAYABLE
9 Months Ended
Sep. 30, 2023
Common Stock And Common Stock Payable  
COMMON STOCK AND COMMON STOCK PAYABLE

NOTE 8 – COMMON STOCK AND COMMON STOCK PAYABLE

 

On May 5, 2022, the Company filed a Certificate of Amendment with the state of Nevada increasing its authorized shares from 75,000,000 to 700,000,000 shares of $0.001 par value common stock. As of September 30, 2023, and December 31, 2022, a total of 598,545,644 and 75,000,000 shares of common stock were issued and outstanding, respectively. The Company has issued the following shares during 2023:

 

  Ø 21,736,144 shares were issued pursuant to private placements. These shares were valued at $299,762.

 

  Ø 44,920,000 shares were issued to purchase intellectual property and for services. These shares were valued at 1,707,396.

 

  Ø 24,000,000 shares were repurchased. These shares were valued at $76,201.

 

  Ø 6,000,000 shares valued at $77,125 were issued for services.

 

  Ø 95,000,000 shares were returned to treasury by the Company’s officers and treated as donated capital.

 

v3.23.3
SUBSEQUENT EVENTS
9 Months Ended
Sep. 30, 2023
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

NOTE 9 – SUBSEQUENT EVENTS

 

In accordance with the Statement of Financial Accounting Standards (“SFAS”) 165 (ASC 855-10) management has performed an evaluation of subsequent events through the date that the condensed consolidated financial statements were available to be issued and has determined that it does not have any material subsequent events to disclose in these condensed consolidated financial statements.

v3.23.3
SUMMARY OF SIGNIFICANT ACCOUNTING ASSUMPTIONS AND POLICIES (Policies)
9 Months Ended
Sep. 30, 2023
Accounting Policies [Abstract]  
Basis of presentation

Basis of presentation

 

The accompanying condensed consolidated financial statements have been prepared in accordance with the FASB’s ASC, which is the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of condensed financial statements in conformity with generally accepted accounting principles (“GAAP”) in the United States. The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary MySpray Therapeutics Inc. All intercompany accounts and transactions are eliminated in consolidation.

 

Discontinued Operations

Discontinued Operations

 

The operations of the Company’s former Clinic Division has been presented as discontinued operations. Unless otherwise noted, amounts and disclosures throughout these Notes to Condensed Consolidated Financial Statements relate solely to continuing operations and exclude all discontinued operations. See Note 4. for additional information on discontinued operations.

 

Going Concern

Going Concern

 

The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business for the twelve months following the date of these condensed consolidated financial statements.

 

The Company expects to generate operating cash flow that will be sufficient to fund presently anticipated operations although there can be no assurance. This raises substantial doubt about the Company’s ability to continue as a going concern. Therefore, the Company will need to raise additional funds and is currently exploring alternative sources of financing to supplement the expected cash flow. Historically, the Company has raised capital through private placements, as an interim measure to finance working capital needs and may continue to raise additional capital through the sale of common stock or other securities and obtaining some short-term loans. The Company will be required to continue to do so until its operations become profitable.

 

The Company may attempt to raise capital in the near future through the sale of equity or debt financing; however, there can be assurances the Company will be successful in doing so. There can be no assurance that such additional financing will be available to the Company on acceptable terms or at all.

 

Management’s Representation of Interim Condensed Consolidated Financial Statements

Management’s Representation of Interim Condensed Consolidated Financial Statements

 

The accompanying unaudited condensed consolidated financial statements have been prepared by the Company without audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The Company uses the same accounting policies in preparing quarterly and annual condensed consolidated financial statements. Certain information and footnote disclosures normally included in condensed consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been or omitted as allowed by such rules and regulations, and management believes that the disclosures are adequate to make the information presented not misleading. These condensed consolidated financial statements include all of the adjustments, which in the opinion of management are necessary for a fair presentation of financial position and results of operations. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative of results for a full year.

 

Estimates

Estimates

 

The preparation of condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of liabilities on the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant estimates relate to the amortization period for intangible assets and income taxes. The Company bases its estimates on historical experience, known or expected trends, and various other assumptions that are believed to be reasonable given the quality of information available as of the date of these condensed consolidated financial statements. The results of these assumptions provide the basis for making estimates about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates.

 

Cash and Cash Equivalents

Cash and Cash Equivalents

 

For purposes of reporting within the statements of cash flows, the Company considers all cash on hand, cash accounts not subject to withdrawal restrictions or penalties, and all highly liquid debt instruments purchased with a maturity of three months or less to be cash and cash equivalents. As of September 30, 2023, and December 31, 2022, the on-hand cash balances were $10,574 and $41,808, respectively.

 

Inventory

Inventory

 

Inventory, is stated at the lower of cost or net realizable value with cost determined under the first-in, first-out (“FIFO”) method. As of September 30, 2023, and December 31, 2022, inventory amounted to $38,542 and $35,281, respectively.

 

Goodwill and Intangible Assets

Goodwill and Intangible Assets

 

Goodwill represents the future economic benefit arising from other assets acquired that could not be individually identified and separately recognized. The goodwill arising from the Company’s acquisition is attributable to the value of the potential expanded market opportunity with new customers. Intangible assets have either an identifiable or indefinite useful life. Intangible assets with identifiable useful lives are amortized on a straight-line basis over their economic or legal life, whichever is shorter. The Company’s amortizable intangible assets consist primarily of customer relationships, trademarks, and product formulations. The useful life of these customer relationships is estimated to be three years. The Company also has purchased intellectual property which is amortized over a one year period.

 

Goodwill is not amortized but is subject to annual impairment testing unless circumstances dictate more frequent assessments. The Company performs an annual impairment assessment for goodwill during the fourth quarter of each year and more frequently whenever events or changes in circumstances indicate that the fair value of the asset may be less than the carrying amount. Goodwill impairment testing compares the fair value of the reporting unit to its carrying amount. The fair value of the reporting unit is determined by considering both the income approach and market approaches. The fair values calculated under the income approach and market approaches are weighted based on circumstances surrounding the reporting unit. Under the income approach, the Company determines fair value based on estimated future cash flows of the reporting unit, which are discounted to the present value using discount factors that consider the timing and risk of cash flows. For the discount rate, the Company relies on the capital asset pricing model approach, which includes an assessment of the risk-free interest rate, the rate of return from publicly traded stocks, the Company’s risk relative to the overall market, the Company’s size and industry and other Company-specific risks. Other significant assumptions used in the income approach include the terminal value, growth rates, future capital expenditures, and changes in future working capital requirements. The market approaches use key multiples from guideline businesses that are comparable and are traded on a public market. If the fair value of the reporting unit is greater than its carrying amount, there is no impairment. If the reporting unit’s carrying amount exceeds its fair value, then an impairment loss is recognized in an amount equal to the excess.

 

Due to the discontinuation of Clinic Operations as described throughout this Report, during the three months ended June 30, 2023, the Company performed an impairment analysis and determined that its goodwill and intangible assets were fully impaired. As a result the Company recorded an impairment charge of $590,512 on its Statements of Operations for the three months ended June 30, 2023.

 

Revenue Recognition

Revenue Recognition

 

The Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The guidance provided in Accounting Standards Codification (“ASC”) Topic 606 (“ASC 606”) requires entities to use a five-step model to recognize revenue by allocating the consideration from contracts to performance obligations on a relative standalone selling price basis. Revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services. The standard also requires new disclosures regarding the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. ASC 606 also includes Subtopic 340-40, Other Assets and Deferred Costs – Contracts with Customers, which requires the deferral of incremental costs of obtaining a contract with a customer.

 

Foreign Currency Translation

Foreign Currency Translation

 

The functional and reporting currency of MySpray is the Canadian dollar. Monetary assets denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Average monthly rates are used to translate revenues and expenses.

 

Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Exchange gains or losses arising from foreign currency transactions are included in the determination of net income for the respective periods.

 

Assets and liabilities of the Company’s operations are translated into the reporting currency, United States dollars, at the exchange rate in effect at the balance sheet dates. Revenue and expenses are translated at average rates in effect during the reporting periods.

 

Assets and liabilities of the Company’s operations are translated into the reporting currency, United States dollars, at the exchange rate in effect at the balance sheet dates. Revenue and expenses are translated at average rates in effect during the reporting periods. Equity transactions are recorded at the historical rate when the transaction occurs. The resulting translation adjustment is reflected as accumulated other comprehensive income, a separate component of stockholders’ equity in the statement of stockholders’ equity.

 

Differences may arise in the amount of bad debt expense, depreciation expense and amortization expense reported in the Company’s operating results as compared to the corresponding change in the allowance for doubtful accounts, accumulated depreciation, and accumulated amortization, respectively, due to foreign currency translation. These translation adjustments are reflected in accumulated other comprehensive income, a separate component of the Company’s stockholders’ equity.

 

Income Taxes

Income Taxes

 

The Company accounts for income taxes pursuant to FASB ASC Topic 740, Income Taxes. Under FASB ASC Topic 740, deferred tax assets and liabilities are determined based on temporary differences between the bases of certain assets and liabilities for income tax and financial reporting purposes. The deferred tax assets and liabilities are classified according to the financial statement classification of the assets and liabilities generating the differences. The Company maintains a 100% valuation allowance with respect to deferred tax assets, therefore there are no deferred taxes on the Company’s Balance Sheet. The Company establishes a valuation allowance based upon the potential likelihood of realizing the deferred tax asset and taking into consideration the Company’s financial position and results of operations for the current period. Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carry-forward period under the Federal tax laws. Changes in circumstances, such as the Company generating taxable income, could cause a change in judgment about the reliability of the related deferred tax asset. Any change in the valuation allowance will be included in income in the year of the change in estimate.

 

Fair Value Measurement

Fair Value Measurement

 

The Company values its convertible notes and amounts due to related partings and short-term loans payable under FASB ASC 820 which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements.

 

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based on the observability of those inputs. ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement).

 

The three levels of the fair value hierarchy are as follows:

 

Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities, and listed equities.

 

Level 2 – Valuations for assets and liabilities that can be obtained from readily available pricing sources via independent providers for market transactions involving similar assets or liabilities. The Company’s principal markets for these securities are the secondary institutional markets, and valuations are based on observable market data in those markets.

 

Level 3 – Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. The Company uses Level 3 to value its derivative instruments.

 

Employee Stock-Based Compensation

Employee Stock-Based Compensation

 

The Company accounts for stock-based compensation in accordance with ASC 718 Compensation-Stock Compensation (“ASC 718”). ASC 718 addresses all forms of share-based payment (“SBP”) awards including shares issued under employee stock purchase plans and stock incentive shares. Under ASC 718 awards result in a cost that is measured at fair value on the awards’ grant date, based on the estimated number of awards that are expected to vest, and will result in a charge to operations.

 

Net Loss per Share

Net Loss per Share

 

Net loss per common share is computed by dividing net loss by the weighted average common shares outstanding during the period as defined by Financial Accounting Standards, ASC Topic 260, “Earnings per Share.” Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding.

 

Subsequent Event

Subsequent Event

 

The Company evaluated subsequent events through the date when the condensed consolidated financial statements are issued for disclosure consideration.

 

Recent Accounting Pronouncements

Recent Accounting Pronouncements

 

There are no recent accounting pronouncements that have an impact on the Company’s operations.

 

v3.23.3
DISCONTINUED OPERATIONS (Tables)
9 Months Ended
Sep. 30, 2023
Discontinued Operations and Disposal Groups [Abstract]  
Schedule of discontinued operations
                    
   Three Months Ended
September 30,
   Nine Months Ended
September 30,
 
   2023   2022   2023   2022 
Revenue  $209   $39,613   $64,665   $93,462 
Operating expenses   5,386    45,373    80,274    114,548 
Discontinued operations, net of tax  $(5,177)  $(5,760)  $(15,609)  $(21,086)
v3.23.3
BUSINESS ACQUISITION (Tables)
9 Months Ended
Sep. 30, 2023
Business Combination and Asset Acquisition [Abstract]  
Schedule of consideration paid
     
Common stock, 621,000,000 shares of the Company restricted common stock valued at $0.001 per share  $621,000 
Net liabilities assumed   62,777 
Fair value of total consideration paid  $683,777 
Schedule of asset and liabilities assumed
     
Cash and cash equivalents  $30,542 
Accounts receivable   595 
Inventory   53,431 
Other assets   1,409 
Total assets  $85,977 
      
Accounts payable and accrued liabilities   117,214 
Government of Canada loan   31,540 
Total liabilities   148,754 
      
Net liabilities assumed  $62,777 
v3.23.3
ORGANIZATION AND DESCRIPTION OF THE BUSINESS (Details Narrative) - $ / shares
Sep. 30, 2023
Dec. 31, 2022
Feb. 10, 2022
Common stock, shares authorized 700,000,000 700,000,000  
Common stock, par value (in Dollars per share) $ 0.001 $ 0.001  
Number of shares issued     644,889,500
Number of shares outstanding     644,889,500
Share authorized for capital stock     700,000,000
Spray [Member]      
Ownership interest     100.00%
Common stock at Closing     51,110,500
Common stock to be issued     569,889,500
Increase in common stock shares authorized     700,000,000
Soul Biotechnology Corporation [Member]      
Common stock, shares authorized 75,000,000    
Common stock, par value (in Dollars per share) $ 0.001    
v3.23.3
SUMMARY OF SIGNIFICANT ACCOUNTING ASSUMPTIONS AND POLICIES (Details Narrative) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Accounting Policies [Abstract]        
Cash in hand balance $ 10,574 $ 10,574   $ 41,808
Inventory 38,542 38,542   $ 35,281
Impairment charges $ 590,512  
v3.23.3
GOING CONCERN (Details Narrative) - USD ($)
Sep. 30, 2023
Dec. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]    
Working capital deficit $ 245,094  
Accumulated deficit $ 2,035,661 $ 525,881
v3.23.3
DISCONTINUED OPERATIONS (Details) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Discontinued Operations and Disposal Groups [Abstract]        
Revenue $ 209 $ 39,613 $ 64,665 $ 93,462
Operating expenses 5,386 45,373 80,274 114,548
Discontinued operations, net of tax $ (5,177) $ (5,760) $ (15,609) $ (21,086)
v3.23.3
BUSINESS ACQUISITION (Details)
Feb. 10, 2022
USD ($)
Business Acquisition [Line Items]  
Net liabilities assumed $ 62,777
Spray [Member]  
Business Acquisition [Line Items]  
Common stock, 621,000,000 shares of the Company restricted common stock valued at $0.001 per share 621,000
Net liabilities assumed 62,777
Fair value of total consideration paid $ 683,777
v3.23.3
BUSINESS ACQUISITION (Details 1)
Feb. 10, 2022
USD ($)
Business Combination and Asset Acquisition [Abstract]  
Cash and cash equivalents $ 30,542
Accounts receivable 595
Inventory 53,431
Other assets 1,409
Total assets 85,977
Accounts payable and accrued liabilities 117,214
Government of Canada loan 31,540
Total liabilities 148,754
Net liabilities assumed $ 62,777
v3.23.3
BUSINESS ACQUISITION (Details Narrative) - USD ($)
9 Months Ended
Sep. 30, 2023
Feb. 10, 2022
Business Acquisition [Line Items]    
Impairment of goodwill and intangible asset $ 590,512  
Goodwill [Member]    
Business Acquisition [Line Items]    
Fair value of consideration 547,022  
Finite-Lived Intangible Assets [Member]    
Business Acquisition [Line Items]    
Fair value of consideration $ 136,755  
Spray [Member]    
Business Acquisition [Line Items]    
Ownership interest   100.00%
Common stock at Closing   51,110,500
Increase in common stock shares authorized   700,000,000
Common stock to be issued   569,889,500
v3.23.3
INTANGIBLE ASSETS (Details Narrative) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Finite-Lived Intangible Assets [Line Items]          
Amortization expense $ 417,924 $ 11,107 $ 845,293 $ 30,055  
Intangible assets $ 830,571   $ 830,571   $ 88,923
Intellectual Property [Member]          
Finite-Lived Intangible Assets [Line Items]          
Stock issued for purchases of assets, share 44,920,000   44,920,000    
Stock issued for purchases of assets, value $ 1,707,396   $ 1,707,396    
v3.23.3
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)
9 Months Ended
Sep. 30, 2023
Dec. 31, 2022
Related Party Transaction [Line Items]    
Due to related parties $ 228,688 $ 227,704
Repayment of related party debt 984  
Convertible loan payable $ 27,778
Number of common stock returned 95,000,000  
David Lazar [Member]    
Related Party Transaction [Line Items]    
Convertible loan payable $ 27,778  
Interest rate 3.50%  
Maturity date Sep. 10, 2024  
v3.23.3
COMMON STOCK AND COMMON STOCK PAYABLE (Details Narrative) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2023
Dec. 31, 2022
Subsidiary, Sale of Stock [Line Items]      
Common stock, shares authorized 700,000,000 700,000,000 700,000,000
Common stock, par value (in dollars per share) $ 0.001 $ 0.001 $ 0.001
Common stock, shares issued 598,545,644 598,545,644 598,545,644
Common stock, shares Outstanding 598,545,644 598,545,644 598,545,644
Stock repurchased during period, shares   24,000,000  
Stock repurchased during period, value   $ 76,201  
Stock issued for services, value   $ 6,000,000  
Stock issued for services, share   77,125  
Number of common stock returned   95,000,000  
Intellectual Property [Member]      
Subsidiary, Sale of Stock [Line Items]      
Stock issued for purchases of assets, share 44,920,000 44,920,000  
Stock issued for purchases of assets, value $ 1,707,396 $ 1,707,396  
Private Placement [Member]      
Subsidiary, Sale of Stock [Line Items]      
Stock issued in private placement   21,736,144  
Proceeds from issuance of private placement   $ 299,762  

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