10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the Quarterly Period Ended December 31, 2019

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

333-191083

RASNA THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)

Nevada	39-2080103
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

420 Lexington Ave, Suite 2525, New York, NY 10170

(Address of principal executive offices)   (Zip Code)

Telephone: (646) 396-4087

(Registrant’s telephone number)

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 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 and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   Yes ☒   No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definition of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

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 ☒

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

Title of each class:	Trading Symbol(s)	Name of each exchange on which registered:
None	n/a	n/a

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 68,908,003  shares of common stock were issued and outstanding as of February 14, 2020.

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TABLE OF CONTENTS

		PAGE
PART 1	FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS	3
	Condensed Consolidated Balance Sheets - December 31,2019 (unaudited) and September 30, 2019	3
	Unaudited Condensed Consolidated Statements of Operations for the Three Months Ended December 31,2019 and 2018	4
	Unaudited Condensed Consolidated Statement of Changes in Shareholders’ Equity for the Three Months Ended December 31, 2019 and 2018	5
	Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months Ended December 31, 2019 and 2018	6
	Notes to the Condensed Consolidated Financial Statements	7
ITEM 2.	Management’s discussion and analysis of financial condition and results of operations	16
ITEM 3.	Quantitative and qualitative disclosures about market risk	21
PART II	OTHER INFORMATION
ITEM 1A	Risk factors	22
ITEM 6.	Exhibits	22
SIGNATURES		23

2

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PART I – FINANCIAL INFORMATION 

ITEM 1. FINANCIAL STATEMENTS

RASNA THERAPEUTICS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	December 31, 2019			September 30, 2019
	(Unaudited)
ASSETS
Current assets:
Cash	$	28,136		$	50,068
Prepayments and other receivables	7,789			7,176
Related party receivable	—			14,335
Total current assets	35,925			71,579
Property and equipment, net	1,540			1,949
Intellectual property	236,269			236,269
In-process research and development	613,100			613,100
Indefinite lived intangible asset	1,300,000			1,300,000
Goodwill	2,722,985			2,722,985
Total non-current assets	4,873,894			4,874,303
Total assets	$	4,909,819		$	4,945,882
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Current liabilities:
Accounts payable and accrued expenses	$	1,593,232		$	1,590,589
Related party payables	555,902			550,000
Convertible notes payable	331,168			264,907
Total current liabilities	2,480,302			2,405,496
Deferred income taxes	3,034			3,034
Total liabilities	2,483,336			2,408,530
Commitments (Note 8)
Shareholders' equity
Common stock, $0.001 par value, respectively; 200,000,000 shares authorized, of which 68,908,003 are issued and outstanding.	68,909			68,909
Additional paid-in capital	19,827,425			19,780,252
Accumulated deficit	(17,469,851		)	(17,311,809		)
Total shareholders' equity	2,426,483			2,537,352
Total liabilities and shareholders' equity	$	4,909,819		$	4,945,882

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

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RASNA THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	For the Three Months Ended December 31,
	2019			2018
Revenue	$	—		$	—
Cost of revenue		—			—
Gross profit		—			—
Operating expenses:
General and administrative		131,436			184,565
Research and development		—			75,000
Consultancy fees		19,999			29,218
Legal and professional fees		(2,154	)		110,545
Total operating expenses		149,281			399,328
Loss from operations		(149,281	)		(399,328	)
Other expense:
Interest on convertible notes payable		(8,761	)		—
Foreign currency transaction loss		—			(1,975	)
Total other expense		(8,761	)		(1,975	)
Loss from operations before income taxes		(158,042	)		(401,303	)
Income tax provision		—			—
Net loss	$	(158,042	)	$	(401,303	)
Basic and diluted net loss per share attributable to common shareholders	$	(0.00	)	$	(0.01	)
Basic and diluted weighted average common shares outstanding		68,908,003			68,908,003

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

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RASNA THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(UNAUDITED)

	Three Months Ended December 31, 2018
	Common Stock			Additional Paid-In		Accumulated			Total Shareholders’
	Shares	Amount		Capital		Deficit			Equity
Balance at October 01, 2018	68,908,003	$	68,909	$	19,412,176	$	(16,375,429	)	$	3,105,656
Share based compensation	—		—		128,236		—			128,236
Net loss	—		—		—		(401,303	)		(401,303	)
Balance at December 31, 2018	68,908,003	$	68,909	$	19,540,412	$	(16,776,732	)	$	2,832,589
	Three Months Ended December 31, 2019
	Common Stock			Additional Paid-In		Accumulated			Total Shareholders’
	Shares	Amount		Capital		Deficit			Equity
Balance at October 01, 2019	68,908,003	$	68,909	$	19,780,252	$	(17,311,809	)	$	2,537,352
Share based compensation	—	—		47,173		—			47,173
Net loss	—	—		—		(158,042		)	(158,042		)
Balance at December 31, 2019	68,908,003	$	68,909	$	19,827,425	$	(17,469,851	)	$	2,426,483

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

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RASNA THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	For the Three Months Ended December 31,
	2019			2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(158,042	)	$	(401,303	)
Adjustments to reconcile net loss to net cash used in operating activities:
Share based compensation	47,173			128,236
Depreciation	409			1,274
Other non-cash items	8,761			(2,340		)
Changes in operating assets and liabilities:
Accounts payable and accrued expenses	2,643			112,812
Related party payable	5,902			—
Prepayments and other receivables	(613		)	(262		)
Related party receivable	14,335			105,334
Net cash used in operating activities	(79,432		)	(56,249		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of convertible note payable	57,500			100,000
Net cash provided by financing activities	57,500			100,000
Effect of foreign exchange rate	—			1,113
Net change in cash	(21,932		)	44,864
Cash, beginning of period	50,068			42,693
Cash, end of period	$	28,136		$	87,557

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

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 RASNA THERAPEUTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1.    GENERAL INFORMATION

Rasna Therapeutics, Inc. (“Rasna DE", "Rasna Inc.” or the "Company"), is a biotechnology company incorporated in the State of Delaware on March 28, 2016. The Company is engaged in modulating the molecular targets NPM1 and LSD1, which are implicated in the disease progression of leukemia and lymphoma. 

On April 27, 2016, Rasna Therapeutics Limited, a private limited company incorporated in England and Wales under the U.K. Companies Act (“Rasna UK”) sold its stake in Falconridge Holdings Limited, or Falconridge, to Rasna DE for  $1. This entity had no operations, assets or liabilities as of this date.

On May 17, 2016, Rasna DE and its subsidiary Falconridge entered into an Agreement of Merger and Plan of Reorganization (“Merger Agreement”) with Arna Therapeutics Limited, a British Virgin Islands company, or Arna, which was a clinical stage biotechnology company focused on drugs to treat diseases in oncology and immunology, mainly focusing on the treatment of leukemia. Pursuant to the Merger Agreement, Arna was merged into Falconridge and the shareholders of Arna were issued shares of Rasna DE in exchange for shares of Arna.

On August 15, 2016, Active With Me, Inc., or AWM, entered into an Agreement of Merger and Plan of Reorganization with Rasna DE, and Rasna Acquisition, providing for the merger of Rasna Acquisition with and into Rasna DE, (the “Merger”), with Rasna DE, surviving the Merger as a wholly owned subsidiary of AWM. 

The Merger was treated as a reverse recapitalization effected by a share exchange for financial accounting and reporting purposes since substantially all of AWM’s operations were disposed of prior to the consummation of the transaction.  Rasna DE was treated as the accounting acquirer as its shareholders control the Company after the Merger and  AWM was treated as the legal acquirer.  As a result of the Merger, the assets and liabilities and the historical operations that are reflected in the financial statements are those of Rasna DE as if Rasna DE had always been the reporting company. Since the transaction was treated as a reverse recapitalization for financial accounting and reporting purposes, no goodwill or other intangible assets were recorded by the Company.

These unaudited condensed consolidated financial statements are presented in United States dollars (“USD”) which is also the functional currency of the primary economic environment in which the Company operates. See Note 2, foreign currency policy. 

2.    ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these unaudited condensed consolidated financial statements are set out below. These policies have been applied consistently to all the periods presented unless otherwise stated.

Basis of preparation 

These unaudited condensed consolidated financial statements have been prepared following the requirements of the Securities and Exchange Commission (the "SEC”) and United States generally accepted accounting principles (“US GAAP”) for interim reporting. The principles for condensed interim financial information do not require the inclusion of all the information and footnotes required by generally accepted accounting principles for complete financial statements.Therefore, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements as of and for the year ended September 30, 2019 and notes thereto included in the Company's Annual Report on Form 10-K filed with the SEC on January 13, 2020.  The accompanying unaudited condensed consolidated financial statements have not been audited by an independent registered public accounting firm in accordance with the standards of the Public Company Accounting Oversight Board (United States) but in the opinion of management, include all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s interim financial information.

The results of the operations for the three months ended December 31, 2019 may not be indicative of the results that may be expected for the year ending September 30, 2020. 

Principles of Consolidation

In accordance with Accounting Standards Codification ("ASC")  810, Consolidation, the Company consolidates any entity in which it has a controlling financial interest. Further, the Company consolidates any variable interest entity that it is deemed to be the primary beneficiary of, and for which the Company has the power to direct its significant activities. Upon review of the relationship between Rasna Therapeutics Limited (“Rasna UK”) and Rasna Inc., Management noted that equity investment in Rasna UK was not sufficient to fund its operations. Accordingly, Rasna Inc. was considered to be the primary beneficiary of the assets held within Rasna UK, which primarily consist of cash received from Rasna Inc. to fund its operations, and for which the Company has the power to direct its significant activities. As a result, Rasna Inc. consolidates this variable interest entity, which has minimal activity and is in the process of being liquidated.  

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The consolidated financial statements include the financial statements of the Company and its subsidiary, Arna Therapeutics Limited and its variable interest entity, Rasna Therapeutics Ltd, as well as the operations of Rasna Inc. for the period from May 17, 2016 through December 31, 2019. All significant intercompany accounts and transactions have been eliminated in the preparation of the accompanying consolidated financial statements. 

Business Combinations 

Management accounts for business combinations under the provisions of ASC Topic 805-10, Business Combinations, which requires that the purchase method of accounting be used for all business combinations. Assets acquired and liabilities assumed, including non-controlling interests, are recorded at the date of acquisition at their respective fair values. ASC 805-10 also specifies criteria that intangible assets acquired in a business combination must meet to be recognized and reported apart from goodwill. Goodwill represents the excess purchase price over the fair value of the tangible net assets and intangible assets acquired in a business combination. Acquisition-related expenses are recognized separately from the business combinations and are expensed as incurred. Management is required to complete the purchase price allocation within 12 months of the acquisition date. If such completion of the allocation results in a change in the preliminary values, the measurement period adjustment will be recognized in the period in which the adjustment amount is determined in accordance with ASU 2015-16. The amounts reflected within the consolidated financial statements are the results of a purchase price allocation based on a final valuation report. 

Use of Estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. The Company evaluates its estimates on an ongoing basis, including those related to the fair values of share based awards, income taxes and contingent liabilities, among others. The Company bases its estimates on historical experience and on various other assumptions that the Company believes to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from those estimates and such differences could be material to the consolidated financial position and results of operations.

Net Loss per Share

Basic net loss per share is computed by dividing net loss available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted loss per share includes potentially dilutive securities such as outstanding options, warrants and convertible loan notes, using various methods such as the treasury stock or modified treasury stock method in the determination of dilutive shares outstanding during each reporting period.

The following table sets forth potential common shares issuable upon the exercise of outstanding options and the exercise of warrants and convertible loan notes, all of which have been excluded from the computation of diluted weighted average shares outstanding as they would be anti-dilutive:

	December 31, 2019		December 31, 2018
Stock options		3,973,675		4,076,675
Warrants		1,926,501		1,926,501
Convertible notes & associated fees		2,145,000		361,538
Total shares issuable upon exercise or conversion		8,045,176		6,364,714

The following is the computation of net loss per share for the following periods:

	For the Three Months Ended December 31,
	2019			2018
	(Unaudited)			(Unaudited)
Net loss for the period	$	(158,042	)	$	(401,303	)
Weighted average number of shares	68,908,003			68,908,003
Net loss per share (basic and diluted)	$	(0.00	)	$	(0.01	)

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Recent Accounting Pronouncements 

In July 2017, the FASB, issued ASU, 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral. The ASU applies to issuers of financial instruments with down-round features. It amends (1) the classification of such instruments as liabilities or equity by revising the guidance in ASC 815 on the evaluation of whether instruments or embedded features with down-round provisions must be accounted for as derivative instruments and (2) the guidance on recognition and measurement of the value transferred upon the trigger of a down-round feature for equity-classified instruments by revising ASC 260. The ASU is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company adopted the provisions of ASU 2017-11 effective October 1, 2019 and it did not have a material impact on the Company's consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Intangibles -Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, which addresses the concerns over the cost and complexity of the two-step impairment test, and removes the second step of the test. An entity will apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The guidance is effective for annual and interim goodwill impairment tests performed for periods beginning after December 15, 2019. The Company is currently evaluating the impact of adopting this guidance on the Company's consolidated financial statements. In June 2018, the FASB issued ASU 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Non employee Share Based Payment Accounting, which simplifies several aspects of the accounting for nonemployee share-based payment transactions resulting from expanding the scope of Topic 718, to include share-based payment transactions for acquiring goods and services from nonemployees. Some of the areas for simplification apply only to nonpublic entities. The amendments specify that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The amendments in ASU 2018-07 also clarify that Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under Topic 606, Revenue from Contracts with Customers. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. Early adoption is permitted. The Company adopted the provisions of ASU 2018-07 effective October 1, 2019 and it did not have a material impact on the Company's consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2018-13 removes certain disclosures, modifies certain disclosures and adds additional disclosures. The ASU is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2019. Early adoption is permitted. The Company is currently evaluating the effect that this update will have on its financial statements and related disclosures.

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3.    GOING CONCERN

The Company is subject to a number of risks similar to those of other pre-commercial stage companies, including its dependence on key individuals, uncertainty of product development and generation of revenues, dependence on outside sources of capital, risks associated with research, development, testing, and obtaining related regulatory approvals of its pipeline products, suppliers and collaborators, successful protection of intellectual property, competition with larger, better-capitalized companies, successful completion of the Company's development programs and, ultimately, the attainment of profitable operations are dependent on future events, including obtaining adequate financing to fulfill its development activities and generating a level of revenues adequate to support the Company's cost structure.

The Company has experienced net losses and significant cash outflows from cash used in operating activities over the past years, and at December 31, 2019, had an accumulated deficit of $17,469,851, a net loss for the three months ended December 31, 2019 of $158,042 and net cash used in operating activities of $79,432. 

The Company expects to continue to incur net losses and have significant cash outflows for at least the next 12 months and will require significant additional cash resources to launch new development phases of existing products in its pipeline.

In the event that the Company is unable to secure the necessary additional cash resources needed, the Company may slow current development phases or halt new development phases in order to mitigate the effects of the costs of development. These conditions, among others, raise substantial doubt about the Company's ability to continue as a going concern one year from the date of this filing. The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern one year from the date of this filing. This basis of accounting contemplates the recovery of the Company's assets and the satisfaction of liabilities in the normal course of business. A successful transition to attaining profitable operations is dependent upon achieving a level of positive cash flows adequate to support the Company's cost structure.

4.    GOODWILL AND INTANGIBLE ASSETS

On May 17, 2016, the Company acquired an entity and, at initial purchase price, it was determined that there was $236,269 of intellectual property, $613,100 of In-process research and development, and $2,722,985 of goodwill.

Goodwill

Goodwill represents the excess of the purchase price over the fair value of net assets acquired in business combinations accounted for under the purchase method of accounting. The following table summarizes the Company’s goodwill for the periods indicated resulting from the acquisitions by the Company:

	December 31,		September 30,
	2019		2019
Goodwill	$	2,722,985	$	2,722,985

The Company performed an impairment analysis and no impairment was determined. Therefore no impairment was recorded as of December 31, 2019 and September 30, 2019.

Intangible Assets

On December 17, 2013 the Company’s shareholder, Panetta Partners Limited, transferred 5,000,000 of its shares in Arna Therapeutics Limited to Eurema Consulting S.r.l. and 5,000,000 shares in Arna Therapeutics Limited to TES Pharma S.r.l. In exchange for the shares, Panetta Partners Limited obtained intellectual property ("Platform Technology") from TES Pharma S.r.l and Eurema Consulting S.r.l. Panetta Partners Limited then assigned the Platform Technology to Arna Therapeutics Limited, which was accounted for as a capital contribution. The fair value of the shares exchanged for the IPR&D was $0.13 per share; in addition the issue price for shares in October 2013 was $0.13 per share (shares issued post acquisition of the IPR&D were issued at $0.28) and accordingly the Company valued the Platform Technology at $1.3 million.

On May 5, 2016, Rasna UK sold its intellectual property to Falconridge, a subsidiary of Rasna, for a note payable in the amount of $236,269. Rasna UK is considered a VIE and consolidated in these financial statements, however, is not an entity under common control as Rasna controlled both Falconridge and Rasna UK at the time of the transaction, this transaction eliminates on consolidation.

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The Company retained a Clinical Research Organisation ("CRO") to perform all related research and development associated with IPR&D related to LSD‐1. Based on review of the license agreement dated January 1, 2015, between the CRO and Rasna, the Company agreed to pay 100,002 Euros for costs incurred to date and to perform research and development on a going forward basis. Additionally, the Company entered into an amended license agreement whereby Rasna agreed to pay TTFactor an additional 435,000 Euros as of May 17, 2016, regarding services rendered between September 9, 2014 to May 17, 2016. Based on the cost approach, the IPR&D was fair valued at $613,100.

At the time of the acquisition, the Company had reasonably expected to use the Platform Technology, in the asset’s then current state, in two independent research projects that had not commenced as of the date of the acquisition. The Company’s research projects applied the conclusions reached in the Platform Technology to develop treatments for AML through reformulation of certain available pharmaceuticals and independent development of a new pharmaceutical treatment. Both research projects were initiated shortly after the Platform Technology was acquired and continue through the date of the financial statements.

At the time of acquisition, and at present, no legal, regulatory, contractual, competitive, economic, or other factors were present that would constrain the useful life of the asset to the Company. The agreement to purchase the asset has no provisions that would limit the timeframe of use, legally, contractually or economically, and the asset remains a competitive platform for results in the treatment of Acute Myeloid Leukemia and lymphoma. Specifically, the agreement irrevocably assigns all rights and title to the Asset, without limitation or contingencies. No limitations or alternative technology has emerged that would suggest obsolescence or a change in the competitive landscape for the Platform Technology as of the most recent reporting period. In addition, the Company has concluded that the useful life of the Platform Technology at the time of acquisition was beyond a foreseeable horizon, and therefore the asset is classified as an indefinite lived intangible asset.

The IPR&D and intellectual property are considered to have an indefinite life and there were no impairment charges recognized during the December 31, 2019 and the period ended September 30, 2019.

The following table summarizes the Company’s intangible assets as of the following periods: 

	December 31,		September 30,
	2019		2019		Estimated
	(Unaudited)				Useful Life
In-process research and development	$	613,100	$	613,100	Indefinite
Intellectual Property		236,269		236,269	Indefinite
Indefinite lived intangible asset		1,300,000		1,300,000	Indefinite
	$	2,149,369	$	2,149,369

5.    SHARE-BASED COMPENSATION

2016 EQUITY INCENTIVE PLAN

On July 19, 2016, the Company adopted its 2016 Equity Incentive Plan (the "Equity Incentive Plan"). The Equity Incentive Plan was established to attract, motivate, retain and reward selected employees and other eligible persons. For the Equity Incentive Plan, employees, officers, directors and consultants who provide services to the Company or one of the Company’s subsidiaries may be selected to receive awards. A total of 9,750,000 shares of the Company’s common stock was authorized for issuance with respect to awards granted under the Equity Incentive Plan.

Share-based compensation expense is the estimated fair value of options granted amortized on a straight-line basis over the requisite service period for the entire portion of the award less an estimate for anticipated forfeitures. The Company uses the “simplified” method to estimate the expected term of the options because the Company’s historical share option exercise experience does not provide a reasonable basis upon which to estimate expected term. No options were granted during the three months ended December 31, 2019 and 2018.

The fair value of stock options was valued using the Black-Scholes option pricing model, which was developed for use in estimating the fair value of traded options, which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because the Company's stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management's opinion, the existing models do not necessarily provide a reliable single measure of the fair value of the Company's stock options.

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The following table summarizes stock option activity for the three months ended December 31, 2019:

	Number of Options		Weighted Average Exercise Price Per Option		Weighted Average remaining Contractual Life (years)		Aggregate Intrinsic Value
Outstanding balance at September 30, 2019	4,073,675		0.59		6.37	$	-
Granted	—		—		—	—
Exercised	—		—		—	—
Forfeited and Expired	(100,000	)	(0.40	)	—	—
Outstanding balance at December 31, 2019	3,973,675		0.60		6.1	$	—
Options exercisable at December 31, 2019	3,083,925		0.48		5.76	$	—

As of December 31, 2019, there was  $140,279 of total unrecognized compensation cost related to stock options. The cost is expected to be recognized over a weighted average period of 1.67 years.

For the three months ended December 31, 2019 $47,173 related to share based compensation to directors and employees respectively, has been included within the general and administrative expense category in the unaudited condensed consolidated interim financial statements. No costs related to non-employees have been included within the consultancy fees expense category in the unaudited condensed consolidated interim financial statements. 

For the three months ended December 31, 2018 $119,017 related to share based compensation to directors and employees respectively, has been included within the general and administrative expense category in the unaudited condensed consolidated interim financial statements. An additional $9,218 related to non-employees respectively, has been included within the consultancy fees expense category in the unaudited condensed consolidated interim financial statements. 

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6.    CONVERTIBLE NOTES

On August 8, 2018, the Company entered into a 12% Convertible Promissory Note with High Octane Bioresearch Ltd. (the “Holder”) pursuant to which the Company issued a Convertible Promissory Note to the Holder. The Holder provided the Company with $135,000 in cash, which was received by the Company during the year ended September 30, 2019. The Company promised to pay the principal amount, together with guaranteed interest at the annual rate of 12%, with principal and accrued interest on the Note due and payable on August 9, 2019 (unless converted under terms and provisions as set forth within the Agreement). The Note provides the Holder with the right to convert, at any time, all or any part of the outstanding principal and accrued but unpaid interest into shares of the Company’s common stock at a conversion price equal to the lower of (i) $0.65 per share or (ii) the price of the next financing during the 180 days after the date of the Agreement, subject to adjustments noted within the Agreement. The number of shares issuable upon a conversion shall be determined by the quotient obtained by dividing (x) the outstanding principal amount of the Note to be converted by (y) the Conversion Price. The Note requires the Company to reserve and keep available out of its authorized and unissued shares of common stock the amount of shares that would be issued upon conversion of the Note, which includes the outstanding principal amount of the Note and interest accrued and to be accrued through the date of maturity.  

In relation to the Convertible Promissory Note, the Company has also entered into an agreement with Garcer Bioventures , a broker who introduced the Holder to the Company. Under the terms of this agreement, should the Holder convert its principal amount into common stock of the Company, the Company will issue to Garcer Bioventures the number of shares equal to 10% of the number of shares of common stock issued to High Octane upon such conversion. 

On October 19, 2018, the Company entered into a second 12% Convertible Promissory Note with the Holder with a maturity date of October 19, 2019. The Holder provided the Company with $100,000 in cash, which was received by the Company during the three months ended December 31, 2018, under the same terms as the first Note. The Company has also entered into another agreement with Garcer Bioventures in lieu of fees, under the same terms as the earlier agreement.

In July 2019, the Company extended the maturity date of the Convertible Promissory Notes from August 8, 2019 and October 19, 2019 to August 8, 2020 and October 19, 2020, respectively. All other terms of the Convertible Promissory Notes remained the same.  The Amended Convertible Promissory Notes were accounted for as a modification of the original Convertible Promissory Notes as the change in the fair value of the embedded conversion option featured in the Convertible Promissory Notes immediately before and after the amendment did not exceed 10% of the carrying amount of the Convertible Promissory Notes.

On November 12, 2019, the Company entered into a third 12% Convertible Promissory Note with the Holder with a maturity date of November 12, 2020. The Holder provided the Company with $57,500 in cash, which was received by the Company during the three months ended December 31, 2019, under the same terms as the earlier Notes.  

At December 31, 2019, there were 1,950,000 shares reserved for the conversion of the Notes and 195,000 shares were reserved in lieu of fees due to Garcer Bioventures. 

Interest expense associated with the convertible notes was $8,761 and $0 for the three months ended December 31, 2019 and 2018, respectively.

7.    RELATED PARTY TRANSACTIONS

During the normal course of its business, the Company enters into various transactions with entities that are both businesses and individuals. The following is a summary of the related party transactions during the three months ended December 31, 2019 and 2018.

Eurema Consulting

Eurema Consulting S.r.l. is a significant shareholder of the Company. During the three months ended December 31, 2019 and December 31, 2018  Eurema Consulting did not supply the Company with consulting services. As of December 31, 2019, and September 30, 2019, the balance due to Eurema Consulting S.r.l. was $200,000 for past consultancy services.

Gabriele Cerrone

Gabriele Cerrone is is the majority shareholder of Panetta Partners, one of the Company's principal shareholders and was a director of Arna Therapeutics Ltd. During the three months ended December 31, 2019 and December 31, 2018  Gabriele Cerrone did not supply the Company with consulting services. As of December 31, 2019, and September 30, 2019, the balance due to Gabriele Cerrone was $175,000 for past consultancy services.

Roberto Pellicciari and TES Pharma

Roberto Pellicciari is the majority shareholder of TES Pharma Srl, one of the Company's principal shareholders. During the three months ended December 31, 2019 and December 31, 2018 Roberto Pellicciari did not supply the Company with consulting services. As of December 31, 2019, and September 30, 2019, the balance due to Roberto Pellicciari was $175,000 for past consultancy services. Alessandro Padova is the chairman of Rasna Therapeutics Inc. and also serves on the Board of Directors of TES Pharma, one of the Company's suppliers. At December 31, 2019 and September 30, 2019, TES Pharma was owed $75,000.  

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Tiziana Life Sciences Plc ("Tiziana")

As at December 31, 2019 and September 30, 2019, a balance was owed to Tiziana Life Sciences Plc of $5,902 and was owed by Tiziana Life Sciences Plc of $252,746 respectively. As of the date these unaudited condensed consolidated financial statements are issued, the related party payable had not been paid. Kunwar Shailubhai, the Company's former CEO and a director of the Company, is also a director of Tiziana. In addition, Tiziano Lazzaretti, the Company's CFO, is also CFO of Tiziana. The Company is party to a Shared Services agreement with Tiziana whereby the Company is charged for shared services such as the payroll and rent, see Note 8 for more details. 

Panetta Partners

Panetta Partners Limited, a shareholder of Arna, is a company in which Gabriele Cerrone has significant interest and also serves as a director. At December 31, 2019 and September 30, 2019,  there was no balance owed to or from Panetta Partners Limited. In February 2020, the Company entered into a 12 % Convertible Promissory Note with Panetta Partners for $31,000 with a maturity date of February 07, 2021.

There is no interest charged on the balances with related parties. There are no defined repayment terms and such amounts can be called for payment at any time.

8.    COMMITMENTS

License Agreements

In November 2016, the Company entered into a license agreement with Profs. Falini and Martelli, wherein it obtained the exclusive rights related to the use or reformulation of Actinomycin D and intends to utilize these rights for the development of new product. In connection with this agreement, the Company was committed to paying milestone payments, the first being a EUR 50,000 payment to be paid six months after the agreement was signed. The payment was made to Profs. Falini and Martelli in June 2017.

The specific timing of the remaining milestones cannot be predicted and depends upon research and clinical developments. None of the milestones have been reached as at the date of these unaudited financial statements.

Lease Agreements

In February 2018, the Company renewed its lease agreement with the same terms, with Bucks County Biotechnology Centre Inc. in Doylestown Pennsylvania, where certain employees of the Company are based. The lease provides for annual basic lease payments from February 1, 2019 to January 31, 2020 of $13,480, plus utility expense of $237 per month. The Company did not renew this lease after January 31, 2020.

During the three months ended December 31, 2019, the Company did not incur any rental expenses related to this agreement as these costs were recharged to Tiziana Life Sciences PLC under the shared services agreement.

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Consultancy Agreements

In October 2016, the Company entered into a consultancy agreement with Tiziano Lazzaretti in which he agreed to serve as Chief Financial Officer for a fee of  $50,000 per year. This was increased to $80,000 a year in April 2017 by the Company's compensation committee. During the three months ended December 31, 2019 the Company incurred approximately $20,000  of consultancy expenses related to this agreement. At December 31, 2019 an additional $6,666 has been prepaid for fees relating to January 2020.

Shared Services Agreement

The Company has entered into a shared services agreement with Tiziana Life Sciences Plc. Under the terms of this agreement, the Company will be charged for shared services including payroll and rent for the Lexington Avenue premises, on a monthly basis based on allocated costs incurred. This agreement is effective from January 1, 2017. At December 31, 2019 $5,902 is due from Tiziana Life Sciences PLC. 

Other Commitments

The Company may enter into certain licensing agreements for products currently under development. The Company may be obligated in future periods to make additional payments, which would become due and payable only upon the achievement of certain research and development, regulatory, and approval milestones. The specific timing of such milestones cannot be predicted and depend upon future discretionary research and clinical developments, as well as, regulatory agency actions. Further, under the terms of certain agreements, the Company may be obligated to pay commercial milestones contingent upon the realization of sales revenues and sublicense revenues. Due to the long range nature of such commercial milestones, they are neither probable at this time nor predictable, and consequently are not considered contingent milestone payment amounts.

9.    SUBSEQUENT EVENTS

The Company has evaluated events that occurred subsequent to December 31, 2019 through to the date these condensed consolidated financial statements were issued, for matters that required disclosure our adjustment in these condensed consolidated financial statements. 

On  February 06, 2020, the Company announced that Dr. Kunwar Shailubhai had resigned as the CEO of Rasna Therapeutics, Inc.  

On February 07, 2020, The Company issued a 12% convertible promissory note (the "Note") in the principal amount of $31,000. The note has a maturity date of February 07, 2021 and is convertible by the holder at any time into shares of the Company's common stock at a conversion price equal to the lower of (i) $0.20 per share or (ii) the price of the price of the next financing during the 180 days after the date of the Note. If the holder has not converted the Note into common stock by the maturity date, the Company must repay the outstanding principal amount plus accrued interest. The Holder provided us with $31,000 in cash, which we received in February 2020.

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

Forward-Looking Statements 

This section and other parts of this Quarterly Report on Form 10-Q contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. Forward-looking statements can also be identified by words such as “future,” “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “will,” “would,” “could,” “can,” “may,” and similar terms. Forward-looking statements are not guarantees of future performance and the Company’s actual results may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such differences include, but are not limited to, those discussed in the Company’s Transitional Report on Form 10-K filed on January 13, 2020 under the heading “Risk Factors,” which are incorporated herein by reference.

We assume no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law.  Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

Unless expressly indicated or the context requires otherwise, the terms "Rasna,",” the “Company,” “we,” “us,” and “our” refer to Rasna Therapeutics, Inc., a Nevada corporation, and, where appropriate, its wholly owned subsidiaries.

Company Background

To date, we have devoted substantially all of our resources to research and development efforts relating to our therapeutic candidates, including conducting clinical trials and developing manufacturing capabilities, in-licensing related intellectual property, protecting our intellectual property and providing general and administrative support for these operations. Since our inception, we have funded our operations primarily through the issuance of equity securities and convertible notes.

We anticipate that our expenses will increase substantially if and as we:

• initiate new clinical trials;

• seek to identify, assess, acquire and develop other products, therapeutic candidates and technologies;

• seek regulatory and marketing approvals in multiple jurisdictions for our therapeutic candidates that successfully complete clinical studies;

• establish collaborations with third parties for the development and commercialization of our products and therapeutic candidates;

• make milestone or other payments under our agreements pursuant to which we have licensed or acquired rights to intellectual property and technology;

• seek to maintain, protect, and expand our intellectual property portfolio;

• seek to attract and retain skilled personnel;

• incur the administrative costs associated with being a public company and related costs of compliance;

• create additional infrastructure to support our operations as a commercial stage public company and our planned future commercialization efforts; and 

• experience any delays or encounter issues with any of the above.

We expect to continue to incur significant expenses and increasing losses for at least the next several years. Accordingly, we anticipate that we will need to raise additional capital in addition to the net proceeds from this offering in order to obtain regulatory approval for, and the commercialization of our therapeutic candidates. Until such time that we can generate meaningful revenue from product sales, if ever, we expect to finance our operating activities through public or private equity or debt financings, government or other third-party funding, marketing and distribution arrangements and other collaborations, strategic alliances and licensing arrangements or a combination of these approaches. If we are unable to obtain funding on a timely basis, we may be required to significantly curtail, delay or discontinue one or more of our research or development programs or the commercialization of any approved therapies or products or be unable to expand our operations or otherwise capitalize on our business opportunities, as desired, which could materially adversely affect our business, financial condition and results of operations.

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On May 17, 2016, Rasna DE and its subsidiary Falconridge entered into an Agreement of Merger and Plan of Reorganization (“Merger Agreement”) with Arna Therapeutics Limited, a British Virgin Islands company, or Arna, which was a clinical stage biotechnology company focused on drugs to treat diseases in oncology and immunology, mainly focusing on the treatment of leukemia. Pursuant to the agreement, Arna was merged into Falconridge and the shareholders of Arna were issued shares of Rasna DE in exchange for shares of Arna.

On August 15, 2016, Active With Me, Inc., or AWM, entered into an Agreement of Merger and Plan of Reorganization (the “Merger Agreement”) with Rasna DE, and Rasna Acquisition, providing for the merger of Rasna Acquisition with and into Rasna DE, (the “Merger”), with Rasna DE, surviving the Merger as a wholly-owned subsidiary of AWM. As a result of the Merger, the resulting company, Rasna Therapeutics, Inc., is a biotechnology company that is engaged in modulating the molecular targets NPM1 and LSD1, which are implicated in the disease progression of leukemia and lymphoma.

The Merger was treated as a reverse recapitalization effected by a share exchange for financial accounting and reporting purposes since substantially all of AWM’s operations were disposed of prior to the consummation of the transaction.  Rasna DE was treated as the accounting acquirer as its shareholders control us after the Merger Agreement, even though AWM was the legal acquirer.  As a result, the assets and liabilities and the historical operations that are reflected in our financial statements are those of Rasna DE as if Rasna DE had always been the reporting company. Since AWM had no operations upon the Merger Agreement taking place, the transaction was treated as a reverse recapitalization for accounting purposes and no goodwill or other intangible assets were recorded by us as a result of the Merger Agreement.

We only have one segment of activity, which is that of a biotechnology company focused on targeted drugs to treat diseases in oncology and immunology, mainly focusing on the treatment of leukemia and lymphoma.

The Company is currently evaluating the next steps required to progress its R&D pipeline.

Critical Accounting Policies and Estimates

This discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States of America, or GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported period. In accordance with US GAAP, we base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.

While our significant accounting policies are more fully described in Note 2 to our unaudited condensed consolidated financial statements appearing elsewhere in this Quarterly Report, we believe the following accounting policies are critical to the process of making significant judgments and estimates in the preparation of our financial statements.

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Basis of preparation 

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”).

Going Concern

We are subject to a number of risks similar to those of other pre-commercial stage companies, including our dependence on key individuals, uncertainty of product development and generation of revenues, dependence on outside sources of capital, risks associated with research, development, testing, and obtaining related regulatory approvals of its pipeline products, suppliers and collaborators, successful protection of intellectual property, competition with larger, better-capitalized companies, successful completion of our development programs and, ultimately, the attainment of profitable operations are dependent on future events, including obtaining adequate financing to fulfill our development activities and generating a level of revenues adequate to support our cost structure.  

We have experienced net losses and significant cash outflows from cash used in operating activities over the past years, and at December 31, 2019, had an accumulated deficit of $17,469,851, a net loss for the three months ended December 31, 2019 of $158,042 and net cash used in operating activities of $79,432.

We expect to continue to incur net losses and have significant cash outflows for at least the next twelve months. We have sufficient funds to continue operating until the end of March 2020, but will require significant additional cash resources to launch new development phases of existing products in its pipeline. In the event that the Company is unable to secure the necessary additional cash resources needed, we may slow current development phases or halt new development phases in order to mitigate the effects of the costs of development. These conditions, among others, raise substantial doubt about our ability to continue as a going concern one year from the date of this filing. The accompanying condensed consolidated financial statements have been prepared assuming that we will continue as a going concern one year from the date of this filing. This basis of accounting contemplates the recovery of our assets and the satisfaction of liabilities in the normal course of business. A successful transition to attaining profitable operations is dependent upon achieving a level of positive cash flows adequate to support our cost structure.

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Results of Operations

The following paragraphs set forth our results of operations for the periods presented.  The period-to-period comparison of financial results is not necessarily indicative of future results.

Results of Operations for the Three Months Ended December 31, 2019 and 2018

The following table sets forth the summary statements of operations for the periods indicated:

	For the Three Months Ended December 31,
	2019		2018
	(Unaudited)		(Unaudited)
Revenue	$	—	$	—
Cost of revenue	—		—
Gross profit	—		—
Operating expenses:
General and administrative	131,436		184,565
Research and development	—		75,000
Consultancy fees	19,999		29,218
Legal and professional fees	(2,154)		110,545
Total operating expenses	149,281		399,328
Loss from operations	(149,281)		(399,328		)
Other expense:
Interest on convertible notes payable	(8,761)		—
Foreign currency transaction gain	—		(1,975)
Other expense	(8,761)		(1,975)
Net loss	$	(158,042)	$	(401,303	)

Revenues

There were no revenues for the three months ended December 31, 2019 and 2018 because the Company does not have any commercial biopharmaceutical products.

Operating Expenses

Operating expenses consisting of, research and development costs, consultancy fees, legal and professional fees and general and administrative expenses for the three months ended December 31, 2019 decreased to $149,281 from $399,328 for the three months ended December 31, 2018, a decrease of $250,047. The decrease is primarily attributable to a reduction in payroll and travel expenses reflecting the decreased activity in the Company (approximately $53,000), the absence of any R&D related activities in the quarter (approximately $75,000), a reduction in professional fees relating to patent costs ($47,000), a decrease in fees for legal and payroll services ($40,000) and a professional fees accrual reversal ($26,000). 

Net Loss

Net loss for the three months ended December 31, 2019 decreased to $158,042 from $401,303 for the three months ended December 31, 2018, a decrease of $243,261. The decrease is primarily attributable to a reduction in payroll and travel expenses reflecting the decreased activity in the Company (approximately $53,000), the absence of any R&D related activities in the quarter (approximately $75,000), a reduction in professional fees relating to patent costs as patents were maintained rather than filed ($47,000), a decrease in fees for legal and payroll services ($40,000) and a professional fees accrual reversal ($26,000).

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Liquidity and Capital Resources 

We believe we will require significant additional cash resources to launch new development phases of existing products in the Company's pipeline. In the event that we are unable to secure the necessary additional cash resources needed, we may slow current development phases or halt new development phases in order to mitigate the effects of the costs of development. These conditions, among others, raise substantial doubt about our ability to continue as a going concern. A successful transition to attaining profitable operations is dependent upon achieving a level of positive cash flows adequate to support our cost structure. We cannot be certain that additional funding will be available on acceptable terms, or at all. To the extent that we raise additional funds by issuing equity securities, our shareholders may experience significant dilution. Any debt financing, if available, may (i) involve restrictive covenants that impact our ability to conduct, delay, scale back or discontinue the development and/or commercialization of one or more product candidates; (ii) seek collaborators for product candidates at an earlier stage than otherwise would be desirable and on terms that are less favorable than might otherwise be available; or (iii) relinquish or otherwise dispose of rights to technologies, product candidates or products that we would otherwise seek to develop or commercialize its self on unfavorable terms. 

On November 12, 2019, we issued  a 12% convertible promissory note (the “Note”) to an investor, in the principal amount of $57,500 with a maturity date of November 12, 2020. The Note  is convertible by the holder at any time into shares of our common stock at a conversion price equal to the lower of (i) $0.65 per share or (ii) the price of the next financing during the 180 days after the date of the Note. If the holder has not converted the Note into common stock by the maturity date, we must repay the outstanding principal amount plus accrued interest.  

On February 07, 2020, we issued  a 12% convertible promissory note (the “Note”) to an investor, in the principal amount of $31,0000 with a maturity date of February 07,2021. The Note  is convertible by the holder at any time into shares of our common stock at a conversion price equal to the lower of (i) $0.20 per share or (ii) the price of the next financing during the 180 days after the date of the Note. If the holder has not converted the Note into common stock by the maturity date, we must repay the outstanding principal amount plus accrued interest.  

Both Notes contain an anti-dilution provision, which adjusts the conversion price in the event of an issuance by us of common stock below the then effective conversion price.

Capital Resources

The following table summarizes total current assets, liabilities and working capital as of the periods indicated:

	December 31, 2019		September 30, 2019			Change
	(Unaudited)
Current assets	$	35,925	$	71,579		$	(35,654	)
Current liabilities	$	2,480,302	$	2,405,496		$	74,806
Working capital	$	(2,444,377)	$	(2,333,917	)	$	(110,460)

We had a cash balance of $28,136 and $50,068 at December 31, 2019 and September 30, 2019, respectively. 

Liquidity

The following table sets forth a summary of our cash flows for the periods indicated:

	For the three months ended December 31
	2019		2018			Increase
Net cash used in operating activities	$	(79,432)	$	(56,249)		$	(23,183)
Net cash used in investing activities	$	—	$	(4,073	)	$	—
Net cash provided by financing activities	$	57,500	$	100,000		$	(42,500)

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Net Cash Used in Operating Activities

Net cash used in operating activities consists of net loss adjusted for the effect of changes in operating assets and liabilities.

Net cash used in operating activities was $79,432 for the three months ended December 31, 2019 compared to $56,249 for the three months ended December 31, 2018. The net loss of $158,042 for the three months ended December 31, 2019 was partially offset primarily by non-cash share based compensation of $47,173, interest accrued on the Convertible Loan Notes of $8,761 and changes in operating assets and liabilities of $22,267. The net loss of $401,303 for the three months ended December 31, 2018 was partially offset by non-cash items such as share based compensation of  $128,236, consulting expense for warrants issued of ($2,340) and changes in operating assets and liabilities of $217,884.

Net Cash Provided by Financing Activities

Net cash provided by financing activities consists of proceeds from the issuance of a convertible note of  $57,500 for the three months ended December 31, 2019 compared to $100,000 of proceeds from the issuance of a convertible note during the three months ended December 31, 2018.

Off-Balance Sheet Arrangements

We consolidate variable interest entities (“VIE”) in which we hold a controlling financial interest as evidenced by the power to direct the activities of a VIE that most significantly impact its economic performance and the obligation to absorb losses of, or the right to receive benefits from, the VIE that could potentially be significant to the VIE and therefore are deemed to be the primary beneficiary. We take into account our entire involvement in a VIE (explicit or implicit) in identifying variable interests that individually or in the aggregate could be significant enough to warrant our designation as the primary beneficiary and hence require us to consolidate the VIE or otherwise require us to make appropriate disclosures. 

ITEM 3. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). This term refers to the controls and procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files under the Exchange Act is recorded, processed, summarized, and reported within the required time periods. In designing and evaluating our disclosure controls and procedures, our management recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

As of the end of the period covered by this Report, the Company’s Chief Executive Officer and Chief Financial Officer (the “Certifying Officers”), evaluated the effectiveness of the Company’s “disclosure controls and procedures,” as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934. Based on that evaluation, each officer concluded that, as of the date of the evaluation, the Company’s disclosure controls and procedures were not effective to provide reasonable assurance that the information required to be disclosed in the Company’s periodic filings under the Securities Exchange Act of 1934 is accumulated and communicated to management to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and Rule 15d-15(f) under the Exchange Act) during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

ITEM 1A. RISK FACTORS

There have been no material changes from the risk factors disclosed in our Form 10-K as of and for the period ended September 30, 2019. 

ITEM 6. EXHIBITS

31.1*	Certification of Principal Executive Officer and Principal Financial and Accounting OfficervPursuant to Section 302 of Sarbanes-Oxley Act of 2002.
32.1*	Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Section 906 of Sarbanes-Oxley Act of 2002.
101.INS*	XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.
101.SCH*	XBRL Taxonomy Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definition Linkbase

* Filed Herewith

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Signatures

Pursuant to the requirements of Section 13 or 15(d) 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.

	Rasna Therapeutics, Inc.
February 14, 2020	By:	/s/ Tiziano Lazzaretti
		Name: Tiziano Lazzaretti Title: Chief Financial Officer, (Principal Executive Officer and Principal Financial and Accounting Officer)

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EX-31.1

Exhibit 31.1

CERTIFICATION BY PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER

I, Tiziano Lazzaretti, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Rasna Therapeutics, Inc.;
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 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(s) 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, including its consolidated subsidiaries, 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 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 an annual 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(s) 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: February 14, 2020 

/s/ Tiziano Lazzaretti

Name: Tiziano Lazzaretti
Title: Chief Financial Officer, (Principal Executive Officer and Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER 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 Annual Report of Rasna Therapeutics, Inc. (the “Company”) on Form 10-Q for the quarter ended December 31, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, TizianoLazzaretti, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 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 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.

Dated: February 14, 2020 

/s/ Tiziano Lazzaretti

Name: TizianoLazzaretti
Title: Chief Financial Officer, (Principal Executive Officer and Principal Financial Officer)

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STOCK-BASED COMPENSATION

3 Months Ended

Dec. 31, 2019

STOCK-BASED COMPENSATION [Abstract]

STOCK-BASED COMPENSATION

5.    SHARE-BASED COMPENSATION

2016 EQUITY INCENTIVE PLAN

On July 19, 2016, the Company adopted its 2016 Equity Incentive Plan (the "Equity Incentive Plan"). The Equity Incentive Plan was established to attract, motivate, retain and reward selected employees and other eligible persons. For the Equity Incentive Plan, employees, officers, directors and consultants who provide services to the Company or one of the Company’s subsidiaries may be selected to receive awards. A total of 9,750,000 shares of the Company’s common stock was authorized for issuance with respect to awards granted under the Equity Incentive Plan.

Share-based compensation expense is the estimated fair value of options granted amortized on a straight-line basis over the requisite service period for the entire portion of the award less an estimate for anticipated forfeitures. The Company uses the “simplified” method to estimate the expected term of the options because the Company’s historical share option exercise experience does not provide a reasonable basis upon which to estimate expected term. No options were granted during the three months ended December 31, 2019 and 2018.

The fair value of stock options was valued using the Black-Scholes option pricing model, which was developed for use in estimating the fair value of traded options, which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because the Company's stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management's opinion, the existing models do not necessarily provide a reliable single measure of the fair value of the Company's stock options.

The following table summarizes stock option activity for the three months ended December 31, 2019:

	Number of Options		Weighted Average Exercise Price Per Option		Weighted Average remaining Contractual Life (years)		Aggregate Intrinsic Value
Outstanding balance at September 30, 2019	4,073,675		0.59		6.37	$	-
Granted	—		—		—	—
Exercised	—		—		—	—
Forfeited and Expired	(100,000	)	(0.40	)	—	—
Outstanding balance at December 31, 2019	3,973,675		0.60		6.1	$	—
Options exercisable at December 31, 2019	3,083,925		0.48		5.76	$	—

As of December 31, 2019, there was  $140,279 of total unrecognized compensation cost related to stock options. The cost is expected to be recognized over a weighted average period of 1.67 years.

For the three months ended December 31, 2019 $47,173 related to share based compensation to directors and employees respectively, has been included within the general and administrative expense category in the unaudited condensed consolidated interim financial statements. No costs related to non-employees have been included within the consultancy fees expense category in the unaudited condensed consolidated interim financial statements. 

For the three months ended December 31, 2018 $119,017 related to share based compensation to directors and employees respectively, has been included within the general and administrative expense category in the unaudited condensed consolidated interim financial statements. An additional $9,218 related to non-employees respectively, has been included within the consultancy fees expense category in the unaudited condensed consolidated interim financial statements. 

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SUBSEQUENT EVENTS

3 Months Ended

Dec. 31, 2019

SUBSEQUENT EVENTS [Abstract]

SUBSEQUENT EVENTS

9.    SUBSEQUENT EVENTS

The Company has evaluated events that occurred subsequent to December 31, 2019 through to the date these condensed consolidated financial statements were issued, for matters that required disclosure our adjustment in these condensed consolidated financial statements. 

On  February 06, 2020, the Company announced that Dr. Kunwar Shailubhai had resigned as the CEO of Rasna Therapeutics, Inc.  

On February 07, 2020, The Company issued a 12% convertible promissory note (the "Note") in the principal amount of $31,000. The note has a maturity date of February 07, 2021 and is convertible by the holder at any time into shares of the Company's common stock at a conversion price equal to the lower of (i) $0.20 per share or (ii) the price of the price of the next financing during the 180 days after the date of the Note. If the holder has not converted the Note into common stock by the maturity date, the Company must repay the outstanding principal amount plus accrued interest. The Holder provided us with $31,000 in cash, which we received in February 2020.

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STOCK-BASED COMPENSATION (Tables)

3 Months Ended

Dec. 31, 2019

STOCK-BASED COMPENSATION [Abstract]

Schedule of stock option activity

The following table summarizes stock option activity for the three months ended December 31, 2019:

	Number of Options		Weighted Average Exercise Price Per Option		Weighted Average remaining Contractual Life (years)		Aggregate Intrinsic Value
Outstanding balance at September 30, 2019	4,073,675		0.59		6.37	$	-
Granted	—		—		—	—
Exercised	—		—		—	—
Forfeited and Expired	(100,000	)	(0.40	)	—	—
Outstanding balance at December 31, 2019	3,973,675		0.60		6.1	$	—
Options exercisable at December 31, 2019	3,083,925		0.48		5.76	$	—

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($)	3 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (158,042)	$ (401,303)
Adjustments to reconcile net loss to net cash used in operating activities:
Share based compensation	47,173	128,236
Depreciation	409	1,274
Other non-cash items	8,761	(2,340)
Changes in operating assets and liabilities:
Accounts payable and accrued expenses	2,643	112,812
Prepayments and other receivables	(613)	(262)
Related party receivable	14,335	105,334
Related party payable	5,902
Net cash used in operating activities	(79,432)	(56,249)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of convertible note payable	57,500	100,000
Net cash provided by financing activities	57,500	100,000
Effect of foreign exchange rate		1,113
Net increase/(decrease) in cash	(21,932)	44,864
Cash, beginning of period	50,068	42,693
Cash, end of period	$ 28,136	$ 87,557

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CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Dec. 31, 2019	Sep. 30, 2019
Current assets:
Cash	$ 28,136	$ 50,068
Prepayments and other receivables	7,789	7,176
Related party receivable		14,335
Total current assets	35,925	71,579
Property and equipment, net	1,540	1,949
Intellectual property	236,269	236,269
In-process research and development	613,100	613,100
Indefinite lived intangible asset	1,300,000	1,300,000
Goodwill	2,722,985	2,722,985
Total non-current assets	4,873,894	4,874,303
Total assets	4,909,819	4,945,882
Current liabilities:
Accounts payable and accrued expenses	1,593,232	1,590,589
Related parties payable	555,902	550,000
Convertible notes payable	331,168	264,907
Total current liabilities	2,480,302	2,405,496
Deferred income taxes	3,034	3,034
Total liabilities	2,483,336	2,408,530
Commitments (Note 9)
Shareholders' equity
Common stock, $0.001 par value, respectively; 200,000,000 shares authorized, of which 68,908,003 are issued and outstanding.	68,909	68,909
Additional paid-in capital	19,827,425	19,780,252
Accumulated deficit	(17,469,851)	(17,311,809)
Total shareholders' equity	2,426,483	2,537,352
Total liabilities and shareholders' equity	$ 4,909,819	$ 4,945,882

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GOODWILL AND INTANGIBLE ASSETS - Narrative (Details)		3 Months Ended	12 Months Ended
	Dec. 17, 2013 USD ($) project $ / shares shares	Dec. 31, 2019 USD ($)	Sep. 30, 2019 USD ($)	May 17, 2016 EUR (€)	May 17, 2016 USD ($)	May 05, 2016 USD ($)	Jan. 01, 2015 EUR (€)	Oct. 31, 2013 $ / shares
Indefinite-lived Intangible Assets [Line Items]
IPR&D costs			$ 613,100
Goodwill		$ 2,722,985	2,722,985
Goodwill impairment		0	0
Number of independent research projects | project	2
Impairment charge		$ 0	$ 0
Intellectual property
Indefinite-lived Intangible Assets [Line Items]
Notes payable						$ 236,269
IPR&D
Indefinite-lived Intangible Assets [Line Items]
IPR&D costs					$ 613,100
Price per share (in dollars per share) | $ / shares	$ 0.13
Shares issued (in dollars per share) | $ / shares	$ 0.28							$ 0.13
Indefinite-lived intangible asset acquired	$ 1,300,000
IPR&D | Eurema Consulting S.r.l.
Indefinite-lived Intangible Assets [Line Items]
Stock issued (in shares) | shares	5,000,000
IPR&D | TES Pharma S.r.l.
Indefinite-lived Intangible Assets [Line Items]
Stock issued (in shares) | shares	5,000,000
Clinical Research Organization | IPR&D
Indefinite-lived Intangible Assets [Line Items]
IPR&D costs | €							€ 100,002
Amended License Agreement | IPR&D
Indefinite-lived Intangible Assets [Line Items]
IPR&D costs | €				€ 435,000
Rasna, Inc.
Indefinite-lived Intangible Assets [Line Items]
Goodwill					2,722,985
Rasna, Inc. | Intellectual property
Indefinite-lived Intangible Assets [Line Items]
IPR&D costs					$ 236,269

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STOCK-BASED COMPENSATION - Stock Options (Details) - USD ($)	3 Months Ended		12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Sep. 30, 2019
Number of Options
Number of Options, Outstanding balance (in shares)	4,073,675
Number of Options, Granted (in shares)
Number of Options, Exercised (in shares)
Number of Options, Forfeited and Expired (in shares)	(100,000)
Number of Options, Outstanding balance (in shares)	3,973,675		4,073,675
Number of Options, Options exercisable (in shares)	3,083,925
Weighted Average Exercise Price Per Option
Weighted Average Exercise Price Per Option, Outstanding balance (in dollars per share)	$ 0.59
Weighted Average Exercise Price Per Option, Granted (in dollars per share)
Weighted Average Exercise Price Per Option, Exercised (in dollars per share)
Weighted Average Exercise Price Per Option, Forfeited and Expired (in dollars per share)	(0.40)
Weighted Average Exercise Price Per Option, Outstanding balance (in dollars per share)	0.60		$ 0.59
Weighted Average Exercise Price Per Option exercisable (in dollars per share)	$ 0.48
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Weighted Average remaining Contractual Life (years), Outstanding balance	6 years 1 month 6 days		6 years 4 months 13 days
Weighted Average remaining Contractual Life (years) Options exercisable	5 years 9 months 3 days
Aggregate Intrinsic Value Outstanding balance
Aggregate Intrinsic Value Granted
Aggregate Intrinsic Value Exercised
Aggregate Intrinsic Value Forfeited and Expired
Aggregate Intrinsic Value Options exercisable

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GENERAL INFORMATION

3 Months Ended

Dec. 31, 2019

GENERAL INFORMATION [Abstract]

GENERAL INFORMATION

1.    GENERAL INFORMATION

Rasna Therapeutics, Inc. (“Rasna DE", "Rasna Inc.” or the "Company"), is a biotechnology company incorporated in the State of Delaware on March 28, 2016. The Company is engaged in modulating the molecular targets NPM1 and LSD1, which are implicated in the disease progression of leukemia and lymphoma. 

On April 27, 2016, Rasna Therapeutics Limited, a private limited company incorporated in England and Wales under the U.K. Companies Act (“Rasna UK”) sold its stake in Falconridge Holdings Limited, or Falconridge, to Rasna DE for  $1. This entity had no operations, assets or liabilities as of this date.

On May 17, 2016, Rasna DE and its subsidiary Falconridge entered into an Agreement of Merger and Plan of Reorganization (“Merger Agreement”) with Arna Therapeutics Limited, a British Virgin Islands company, or Arna, which was a clinical stage biotechnology company focused on drugs to treat diseases in oncology and immunology, mainly focusing on the treatment of leukemia. Pursuant to the Merger Agreement, Arna was merged into Falconridge and the shareholders of Arna were issued shares of Rasna DE in exchange for shares of Arna.

On August 15, 2016, Active With Me, Inc., or AWM, entered into an Agreement of Merger and Plan of Reorganization with Rasna DE, and Rasna Acquisition, providing for the merger of Rasna Acquisition with and into Rasna DE, (the “Merger”), with Rasna DE, surviving the Merger as a wholly owned subsidiary of AWM. 

The Merger was treated as a reverse recapitalization effected by a share exchange for financial accounting and reporting purposes since substantially all of AWM’s operations were disposed of prior to the consummation of the transaction.  Rasna DE was treated as the accounting acquirer as its shareholders control the Company after the Merger and  AWM was treated as the legal acquirer.  As a result of the Merger, the assets and liabilities and the historical operations that are reflected in the financial statements are those of Rasna DE as if Rasna DE had always been the reporting company. Since the transaction was treated as a reverse recapitalization for financial accounting and reporting purposes, no goodwill or other intangible assets were recorded by the Company.

These unaudited condensed consolidated financial statements are presented in United States dollars (“USD”) which is also the functional currency of the primary economic environment in which the Company operates. See Note 2, foreign currency policy. 

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CONDENSED CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) - $ / shares	Dec. 31, 2019	Sep. 30, 2019
Statement of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	200,000,000	200,000,000
Common stock, shares issued (in shares)	68,908,003	68,908,003
Common stock, shares outstanding (in shares)	68,908,003	68,908,003

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GOING CONCERN (Details) - USD ($)	3 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Sep. 30, 2019
GOING CONCERN [Abstract]
Accumulated deficit	$ (17,469,851)		$ (17,311,809)
Net loss	(158,042)	$ (401,303)
Net cash used in operating activities	$ 79,432	$ 56,249

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STOCK-BASED COMPENSATION - Narrative (Details) - USD ($)	3 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Jul. 19, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options granted (in shares)
2016 Equity Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized (in shares)			9,750,000
Total unrecognized compensation cost related to stock options	$ 140,279
Weighted average period to costs are expected to be recognized over	1 year 8 months 1 day
General and Administrative Expense
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share based compensation	$ 47,173

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GOODWILL AND INTANGIBLE ASSETS (Tables)

3 Months Ended

Dec. 31, 2019

GOODWILL AND INTANGIBLE ASSETS [Abstract]

Schedule of goodwill

The following table summarizes the Company’s goodwill for the periods indicated resulting from the acquisitions by the Company:

	December 31,		September 30,
	2019		2019
Goodwill	$	2,722,985	$	2,722,985

Schedule of intangible assets

The following table summarizes the Company’s intangible assets as of the following periods: 

	December 31,		September 30,
	2019		2019		Estimated
	(Unaudited)				Useful Life
In-process research and development	$	613,100	$	613,100	Indefinite
Intellectual Property		236,269		236,269	Indefinite
Indefinite lived intangible asset		1,300,000		1,300,000	Indefinite
	$	2,149,369	$	2,149,369

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GOODWILL AND INTANGIBLE ASSETS

3 Months Ended

Dec. 31, 2019

GOODWILL AND INTANGIBLE ASSETS [Abstract]

GOODWILL AND INTANGIBLE ASSETS

4.    GOODWILL AND INTANGIBLE ASSETS

On May 17, 2016, the Company acquired an entity and, at initial purchase price, it was determined that there was $236,269 of intellectual property, $613,100 of In-process research and development, and $2,722,985 of goodwill.

Goodwill

Goodwill represents the excess of the purchase price over the fair value of net assets acquired in business combinations accounted for under the purchase method of accounting. The following table summarizes the Company’s goodwill for the periods indicated resulting from the acquisitions by the Company:

	December 31,		September 30,
	2019		2019
Goodwill	$	2,722,985	$	2,722,985

The Company performed an impairment analysis and no impairment was determined. Therefore no impairment was recorded as of December 31, 2019 and September 30, 2019.

Intangible Assets

On December 17, 2013 the Company’s shareholder, Panetta Partners Limited, transferred 5,000,000 of its shares in Arna Therapeutics Limited to Eurema Consulting S.r.l. and 5,000,000 shares in Arna Therapeutics Limited to TES Pharma S.r.l. In exchange for the shares, Panetta Partners Limited obtained intellectual property ("Platform Technology") from TES Pharma S.r.l and Eurema Consulting S.r.l. Panetta Partners Limited then assigned the Platform Technology to Arna Therapeutics Limited, which was accounted for as a capital contribution. The fair value of the shares exchanged for the IPR&D was $0.13 per share; in addition the issue price for shares in October 2013 was $0.13 per share (shares issued post acquisition of the IPR&D were issued at $0.28) and accordingly the Company valued the Platform Technology at $1.3 million.

On May 5, 2016, Rasna UK sold its intellectual property to Falconridge, a subsidiary of Rasna, for a note payable in the amount of $236,269. Rasna UK is considered a VIE and consolidated in these financial statements, however, is not an entity under common control as Rasna controlled both Falconridge and Rasna UK at the time of the transaction, this transaction eliminates on consolidation.

The Company retained a Clinical Research Organisation ("CRO") to perform all related research and development associated with IPR&D related to LSD‐1. Based on review of the license agreement dated January 1, 2015, between the CRO and Rasna, the Company agreed to pay 100,002 Euros for costs incurred to date and to perform research and development on a going forward basis. Additionally, the Company entered into an amended license agreement whereby Rasna agreed to pay TTFactor an additional 435,000 Euros as of May 17, 2016, regarding services rendered between September 9, 2014 to May 17, 2016. Based on the cost approach, the IPR&D was fair valued at $613,100.

At the time of the acquisition, the Company had reasonably expected to use the Platform Technology, in the asset’s then current state, in two independent research projects that had not commenced as of the date of the acquisition. The Company’s research projects applied the conclusions reached in the Platform Technology to develop treatments for AML through reformulation of certain available pharmaceuticals and independent development of a new pharmaceutical treatment. Both research projects were initiated shortly after the Platform Technology was acquired and continue through the date of the financial statements.

At the time of acquisition, and at present, no legal, regulatory, contractual, competitive, economic, or other factors were present that would constrain the useful life of the asset to the Company. The agreement to purchase the asset has no provisions that would limit the timeframe of use, legally, contractually or economically, and the asset remains a competitive platform for results in the treatment of Acute Myeloid Leukemia and lymphoma. Specifically, the agreement irrevocably assigns all rights and title to the Asset, without limitation or contingencies. No limitations or alternative technology has emerged that would suggest obsolescence or a change in the competitive landscape for the Platform Technology as of the most recent reporting period. In addition, the Company has concluded that the useful life of the Platform Technology at the time of acquisition was beyond a foreseeable horizon, and therefore the asset is classified as an indefinite lived intangible asset.

The IPR&D and intellectual property are considered to have an indefinite life and there were no impairment charges recognized during the December 31, 2019 and the period ended September 30, 2019.

The following table summarizes the Company’s intangible assets as of the following periods: 

	December 31,		September 30,
	2019		2019		Estimated
	(Unaudited)				Useful Life
In-process research and development	$	613,100	$	613,100	Indefinite
Intellectual Property		236,269		236,269	Indefinite
Indefinite lived intangible asset		1,300,000		1,300,000	Indefinite
	$	2,149,369	$	2,149,369

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COMMITMENTS

3 Months Ended

Dec. 31, 2019

COMMITMENTS [Abstract]

COMMITMENTS

8.    COMMITMENTS

License Agreements

In November 2016, the Company entered into a license agreement with Profs. Falini and Martelli, wherein it obtained the exclusive rights related to the use or reformulation of Actinomycin D and intends to utilize these rights for the development of new product. In connection with this agreement, the Company was committed to paying milestone payments, the first being a EUR 50,000 payment to be paid six months after the agreement was signed. The payment was made to Profs. Falini and Martelli in June 2017.

The specific timing of the remaining milestones cannot be predicted and depends upon research and clinical developments. None of the milestones have been reached as at the date of these unaudited financial statements.

Lease Agreements

In February 2018, the Company renewed its lease agreement with the same terms, with Bucks County Biotechnology Centre Inc. in Doylestown Pennsylvania, where certain employees of the Company are based. The lease provides for annual basic lease payments from February 1, 2019 to January 31, 2020 of $13,480, plus utility expense of $237 per month. The Company did not renew this lease after January 31, 2020.

During the three months ended December 31, 2019, the Company did not incur any rental expenses related to this agreement as these costs were recharged to Tiziana Life Sciences PLC under the shared services agreement.

Consultancy Agreements

In October 2016, the Company entered into a consultancy agreement with Tiziano Lazzaretti in which he agreed to serve as Chief Financial Officer for a fee of  $50,000 per year. This was increased to $80,000 a year in April 2017 by the Company's compensation committee. During the three months ended December 31, 2019 the Company incurred approximately $20,000  of consultancy expenses related to this agreement. At December 31, 2019 an additional $6,666 has been prepaid for fees relating to January 2020.

Shared Services Agreement

The Company has entered into a shared services agreement with Tiziana Life Sciences Plc. Under the terms of this agreement, the Company will be charged for shared services including payroll and rent for the Lexington Avenue premises, on a monthly basis based on allocated costs incurred. This agreement is effective from January 1, 2017. At December 31, 2019 $5,902 is due from Tiziana Life Sciences PLC. 

Other Commitments

The Company may enter into certain licensing agreements for products currently under development. The Company may be obligated in future periods to make additional payments, which would become due and payable only upon the achievement of certain research and development, regulatory, and approval milestones. The specific timing of such milestones cannot be predicted and depend upon future discretionary research and clinical developments, as well as, regulatory agency actions. Further, under the terms of certain agreements, the Company may be obligated to pay commercial milestones contingent upon the realization of sales revenues and sublicense revenues. Due to the long range nature of such commercial milestones, they are neither probable at this time nor predictable, and consequently are not considered contingent milestone payment amounts.

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ACCOUNTING POLICIES - Antidilutive Shares (Details) - shares	3 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Accounting Policies [Line Items]
Total shares issuable upon exercise or conversion	8,045,176	6,364,714
Warrants
Accounting Policies [Line Items]
Total shares issuable upon exercise or conversion	1,926,501	1,926,501
Stock options
Accounting Policies [Line Items]
Total shares issuable upon exercise or conversion	3,973,675	4,076,675
Convertible notes & associated fees
Accounting Policies [Line Items]
Total shares issuable upon exercise or conversion	2,145,000	361,538

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GOODWILL AND INTANGIBLE ASSETS - Goodwill (Details) - USD ($)	Dec. 31, 2019	Sep. 30, 2019
GOODWILL AND INTANGIBLE ASSETS [Abstract]
Goodwill	$ 2,722,985	$ 2,722,985

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CONVERTIBLE NOTES - Narrative (Details) - USD ($)			3 Months Ended		12 Months Ended
	Nov. 12, 2019	Oct. 19, 2018	Dec. 31, 2019	Dec. 31, 2018	Sep. 30, 2019	Jul. 31, 2019	Aug. 08, 2018
Debt Instrument [Line Items]
Interest rate (as percentage)	12.00%					10.00%
Shares reserved for the conversion of the Notes			1,950,000
Interest expense associated with the note			$ 8,761
Convertible Debt [Member]
Debt Instrument [Line Items]
Interest rate (as percentage)		12.00%					12.00%
Cash received from the Holder	$ 57,500	$ 100,000			$ 135,000
Due Date			Aug. 09, 2019
Period after the date of the Agreement used to calculate the conversion price			180 days
Shares reserved for the conversion of the Notes			195,000

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CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED) - USD ($)	Total	Common Stock	Additional Paid-In Capital	Accumulated Deficit
Balance at Sep. 30, 2018	$ 3,105,656	$ 68,909	$ 19,412,176	$ (16,375,429)
Balance (in shares) at Sep. 30, 2018		68,908,003
Share based compensation	128,236		128,236
Net loss	(401,303)			(401,303)
Balance at Dec. 31, 2018	2,832,589	$ 68,909	19,540,412	(16,776,732)
Balance (in shares) at Dec. 31, 2018		68,908,003
Balance at Sep. 30, 2019	2,537,352	$ 68,909	19,780,252	(17,311,809)
Balance (in shares) at Sep. 30, 2019		68,908,003
Share based compensation	47,173		47,173
Net loss	(158,042)			(158,042)
Balance at Dec. 31, 2019	$ 2,426,483	$ 68,909	$ 19,827,425	$ (17,469,851)
Balance (in shares) at Dec. 31, 2019		68,908,003

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Document and Entity Information - shares	3 Months Ended
	Dec. 31, 2019	Feb. 14, 2020
Document and Entity Information [Abstract]
Entity Registrant Name	Rasna Therapeutics Inc.
Entity Central Index Key	0001582249
Document Quarterly Report	true
Document Transition Report	false
Amendment Flag	false
Document Type	10-Q
Current Fiscal Year End Date	--09-30
Document Period End Date	Dec. 31, 2019
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q1
Entity Filer Category	Non-accelerated Filer
Entity Incorporation, State or Country Code	NV
Entity Emerging Growth Company	true
Entity Small Business	true
Entity Ex Transition Period	true
Entity Current Reporting Status	Yes
Entity File Number	333-191083
Entity Shell Company	false
Entity Address, Address Line One	420 Lexington Ave,
Entity Address, Address Line Two	Suite 2525,
Entity Address, City or Town	New York
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	10170
Entity Tax Identification Number	39-2080103
City Area Code	(646)
Local Phone Number	396-4087
Entity Interactive Data Current	Yes
Entity Common Stock, Shares Outstanding		68,908,003

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GOING CONCERN

3 Months Ended

Dec. 31, 2019

GOING CONCERN [Abstract]

GOING CONCERN

3.    GOING CONCERN

The Company is subject to a number of risks similar to those of other pre-commercial stage companies, including its dependence on key individuals, uncertainty of product development and generation of revenues, dependence on outside sources of capital, risks associated with research, development, testing, and obtaining related regulatory approvals of its pipeline products, suppliers and collaborators, successful protection of intellectual property, competition with larger, better-capitalized companies, successful completion of the Company's development programs and, ultimately, the attainment of profitable operations are dependent on future events, including obtaining adequate financing to fulfill its development activities and generating a level of revenues adequate to support the Company's cost structure.

The Company has experienced net losses and significant cash outflows from cash used in operating activities over the past years, and at December 31, 2019, had an accumulated deficit of $17,469,851, a net loss for the three months ended December 31, 2019 of $158,042 and net cash used in operating activities of $79,432. 

The Company expects to continue to incur net losses and have significant cash outflows for at least the next 12 months and will require significant additional cash resources to launch new development phases of existing products in its pipeline.

In the event that the Company is unable to secure the necessary additional cash resources needed, the Company may slow current development phases or halt new development phases in order to mitigate the effects of the costs of development. These conditions, among others, raise substantial doubt about the Company's ability to continue as a going concern one year from the date of this filing. The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern one year from the date of this filing. This basis of accounting contemplates the recovery of the Company's assets and the satisfaction of liabilities in the normal course of business. A successful transition to attaining profitable operations is dependent upon achieving a level of positive cash flows adequate to support the Company's cost structure.

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SUBSEQUENT EVENTS - Narrative (Details) - USD ($)	Feb. 07, 2020	Nov. 12, 2019	Jul. 31, 2019
SUBSEQUENT EVENTS
Interest rate		12.00%	10.00%
Subsequent Event | Convertible Promissory Note
SUBSEQUENT EVENTS
Principal amount	$ 31,000
Interest rate	12.00%
Cash received	$ 31,000

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CONVERTIBLE NOTES

3 Months Ended

Dec. 31, 2019

Debt Disclosure [Abstract]

CONVERTIBLE NOTES

6.    CONVERTIBLE NOTES

On August 8, 2018, the Company entered into a 12% Convertible Promissory Note with High Octane Bioresearch Ltd. (the “Holder”) pursuant to which the Company issued a Convertible Promissory Note to the Holder. The Holder provided the Company with $135,000 in cash, which was received by the Company during the year ended September 30, 2019. The Company promised to pay the principal amount, together with guaranteed interest at the annual rate of 12%, with principal and accrued interest on the Note due and payable on August 9, 2019 (unless converted under terms and provisions as set forth within the Agreement). The Note provides the Holder with the right to convert, at any time, all or any part of the outstanding principal and accrued but unpaid interest into shares of the Company’s common stock at a conversion price equal to the lower of (i) $0.65 per share or (ii) the price of the next financing during the 180 days after the date of the Agreement, subject to adjustments noted within the Agreement. The number of shares issuable upon a conversion shall be determined by the quotient obtained by dividing (x) the outstanding principal amount of the Note to be converted by (y) the Conversion Price. The Note requires the Company to reserve and keep available out of its authorized and unissued shares of common stock the amount of shares that would be issued upon conversion of the Note, which includes the outstanding principal amount of the Note and interest accrued and to be accrued through the date of maturity.  

In relation to the Convertible Promissory Note, the Company has also entered into an agreement with Garcer Bioventures , a broker who introduced the Holder to the Company. Under the terms of this agreement, should the Holder convert its principal amount into common stock of the Company, the Company will issue to Garcer Bioventures the number of shares equal to 10% of the number of shares of common stock issued to High Octane upon such conversion. 

On October 19, 2018, the Company entered into a second 12% Convertible Promissory Note with the Holder with a maturity date of October 19, 2019. The Holder provided the Company with $100,000 in cash, which was received by the Company during the three months ended December 31, 2018, under the same terms as the first Note. The Company has also entered into another agreement with Garcer Bioventures in lieu of fees, under the same terms as the earlier agreement.

In July 2019, the Company extended the maturity date of the Convertible Promissory Notes from August 8, 2019 and October 19, 2019 to August 8, 2020 and October 19, 2020, respectively. All other terms of the Convertible Promissory Notes remained the same.  The Amended Convertible Promissory Notes were accounted for as a modification of the original Convertible Promissory Notes as the change in the fair value of the embedded conversion option featured in the Convertible Promissory Notes immediately before and after the amendment did not exceed 10% of the carrying amount of the Convertible Promissory Notes.

On November 12, 2019, the Company entered into a third 12% Convertible Promissory Note with the Holder with a maturity date of November 12, 2020. The Holder provided the Company with $57,500 in cash, which was received by the Company during the three months ended December 31, 2019, under the same terms as the earlier Notes.  

At December 31, 2019, there were 1,950,000 shares reserved for the conversion of the Notes and 195,000 shares were reserved in lieu of fees due to Garcer Bioventures. 

Interest expense associated with the convertible notes was $8,761 and $0 for the three months ended December 31, 2019 and 2018, respectively.

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ACCOUNTING POLICIES (Policies)

3 Months Ended

Dec. 31, 2019

ACCOUNTING POLICIES [Abstract]

Basis of preparation

Basis of preparation 

These unaudited condensed consolidated financial statements have been prepared following the requirements of the Securities and Exchange Commission (the "SEC”) and United States generally accepted accounting principles (“US GAAP”) for interim reporting. The principles for condensed interim financial information do not require the inclusion of all the information and footnotes required by generally accepted accounting principles for complete financial statements.Therefore, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements as of and for the year ended September 30, 2019 and notes thereto included in the Company's Annual Report on Form 10-K filed with the SEC on January 13, 2020.  The accompanying unaudited condensed consolidated financial statements have not been audited by an independent registered public accounting firm in accordance with the standards of the Public Company Accounting Oversight Board (United States) but in the opinion of management, include all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s interim financial information.

The results of the operations for the three months ended December 31, 2019 may not be indicative of the results that may be expected for the year ending September 30, 2020. 

Principles of Consolidation

Principles of Consolidation

In accordance with Accounting Standards Codification ("ASC")  810, Consolidation, the Company consolidates any entity in which it has a controlling financial interest. Further, the Company consolidates any variable interest entity that it is deemed to be the primary beneficiary of, and for which the Company has the power to direct its significant activities. Upon review of the relationship between Rasna Therapeutics Limited (“Rasna UK”) and Rasna Inc., Management noted that equity investment in Rasna UK was not sufficient to fund its operations. Accordingly, Rasna Inc. was considered to be the primary beneficiary of the assets held within Rasna UK, which primarily consist of cash received from Rasna Inc. to fund its operations, and for which the Company has the power to direct its significant activities. As a result, Rasna Inc. consolidates this variable interest entity, which has minimal activity and is in the process of being liquidated.  

The consolidated financial statements include the financial statements of the Company and its subsidiary, Arna Therapeutics Limited and its variable interest entity, Rasna Therapeutics Ltd, as well as the operations of Rasna Inc. for the period from May 17, 2016 through December 31, 2019. All significant intercompany accounts and transactions have been eliminated in the preparation of the accompanying consolidated financial statements. 

Business Combinations 

Management accounts for business combinations under the provisions of ASC Topic 805-10, Business Combinations, which requires that the purchase method of accounting be used for all business combinations. Assets acquired and liabilities assumed, including non-controlling interests, are recorded at the date of acquisition at their respective fair values. ASC 805-10 also specifies criteria that intangible assets acquired in a business combination must meet to be recognized and reported apart from goodwill. Goodwill represents the excess purchase price over the fair value of the tangible net assets and intangible assets acquired in a business combination. Acquisition-related expenses are recognized separately from the business combinations and are expensed as incurred. Management is required to complete the purchase price allocation within 12 months of the acquisition date. If such completion of the allocation results in a change in the preliminary values, the measurement period adjustment will be recognized in the period in which the adjustment amount is determined in accordance with ASU 2015-16. The amounts reflected within the consolidated financial statements are the results of a purchase price allocation based on a final valuation report. 

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. The Company evaluates its estimates on an ongoing basis, including those related to the fair values of share based awards, income taxes and contingent liabilities, among others. The Company bases its estimates on historical experience and on various other assumptions that the Company believes to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from those estimates and such differences could be material to the consolidated financial position and results of operations.

Net Loss per Share

Net Loss per Share

Basic net loss per share is computed by dividing net loss available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted loss per share includes potentially dilutive securities such as outstanding options, warrants and convertible loan notes, using various methods such as the treasury stock or modified treasury stock method in the determination of dilutive shares outstanding during each reporting period.

The following table sets forth potential common shares issuable upon the exercise of outstanding options and the exercise of warrants and convertible loan notes, all of which have been excluded from the computation of diluted weighted average shares outstanding as they would be anti-dilutive:

	December 31, 2019		December 31, 2018
Stock options		3,973,675		4,076,675
Warrants		1,926,501		1,926,501
Convertible notes & associated fees		2,145,000		361,538
Total shares issuable upon exercise or conversion		8,045,176		6,364,714

The following is the computation of net loss per share for the following periods:

	For the Three Months Ended December 31,
	2019			2018
	(Unaudited)			(Unaudited)
Net loss for the period	$	(158,042	)	$	(401,303	)
Weighted average number of shares	68,908,003			68,908,003
Net loss per share (basic and diluted)	$	(0.00	)	$	(0.01	)

Recent Accounting Pronouncements

Recent Accounting Pronouncements 

In July 2017, the FASB, issued ASU, 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral. The ASU applies to issuers of financial instruments with down-round features. It amends (1) the classification of such instruments as liabilities or equity by revising the guidance in ASC 815 on the evaluation of whether instruments or embedded features with down-round provisions must be accounted for as derivative instruments and (2) the guidance on recognition and measurement of the value transferred upon the trigger of a down-round feature for equity-classified instruments by revising ASC 260. The ASU is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company adopted the provisions of ASU 2017-11 effective October 1, 2019 and it did not have a material impact on the Company's consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Intangibles -Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, which addresses the concerns over the cost and complexity of the two-step impairment test, and removes the second step of the test. An entity will apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The guidance is effective for annual and interim goodwill impairment tests performed for periods beginning after December 15, 2019. The Company is currently evaluating the impact of adopting this guidance on the Company's consolidated financial statements. In June 2018, the FASB issued ASU 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Non employee Share Based Payment Accounting, which simplifies several aspects of the accounting for nonemployee share-based payment transactions resulting from expanding the scope of Topic 718, to include share-based payment transactions for acquiring goods and services from nonemployees. Some of the areas for simplification apply only to nonpublic entities. The amendments specify that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The amendments in ASU 2018-07 also clarify that Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under Topic 606, Revenue from Contracts with Customers. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. Early adoption is permitted. The Company adopted the provisions of ASU 2018-07 effective October 1, 2019 and it did not have a material impact on the Company's consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2018-13 removes certain disclosures, modifies certain disclosures and adds additional disclosures. The ASU is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2019. Early adoption is permitted. The Company is currently evaluating the effect that this update will have on its financial statements and related disclosures.

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COMMITMENTS - Narrative (Details)	1 Months Ended				2 Months Ended	3 Months Ended
	Feb. 28, 2018 USD ($)	Apr. 30, 2017 USD ($)	Nov. 30, 2016 EUR (€)	Oct. 31, 2016 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2019 USD ($) $ / shares shares	Dec. 31, 2018 shares	Feb. 28, 2019 USD ($)
Options granted (in shares) | shares
Exercise price of options granted (in dollars per share) | $ / shares
Bucks County Biotechnology Centre Inc. | Lease agreement
Future minimum payments due								$ 13,480
Estimated utility expense per month	$ 237
License Agreement
Amount payable for making milestone | €			€ 50,000
Agreement term			6 months
Consultancy Agreements [Member]
Consultancy expenses						$ 20,000
Prepaid fees					$ 6,666	6,666
Consultancy Agreements [Member] | Chief Financial Officer
Officer's compensation		$ 80,000		$ 50,000
Consultancy Agreements [Member] | Chief Executive Officer
Salary expenses					0
Shared Services Agreement
Due to affiliates					$ 5,902	$ 5,902

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RELATED PARTY TRANSACTIONS

3 Months Ended

Dec. 31, 2019

RELATED PARTY TRANSACTIONS [Abstract]

RELATED PARTY TRANSACTIONS

7.    RELATED PARTY TRANSACTIONS

During the normal course of its business, the Company enters into various transactions with entities that are both businesses and individuals. The following is a summary of the related party transactions during the three months ended December 31, 2019 and 2018.

Eurema Consulting

Eurema Consulting S.r.l. is a significant shareholder of the Company. During the three months ended December 31, 2019 and December 31, 2018  Eurema Consulting did not supply the Company with consulting services. As of December 31, 2019, and September 30, 2019, the balance due to Eurema Consulting S.r.l. was $200,000 for past consultancy services.

Gabriele Cerrone

Gabriele Cerrone is is the majority shareholder of Panetta Partners, one of the Company's principal shareholders and was a director of Arna Therapeutics Ltd. During the three months ended December 31, 2019 and December 31, 2018  Gabriele Cerrone did not supply the Company with consulting services. As of December 31, 2019, and September 30, 2019, the balance due to Gabriele Cerrone was $175,000 for past consultancy services.

Roberto Pellicciari and TES Pharma

Roberto Pellicciari is the majority shareholder of TES Pharma Srl, one of the Company's principal shareholders. During the three months ended December 31, 2019 and December 31, 2018 Roberto Pellicciari did not supply the Company with consulting services. As of December 31, 2019, and September 30, 2019, the balance due to Roberto Pellicciari was $175,000 for past consultancy services. Alessandro Padova is the chairman of Rasna Therapeutics Inc. and also serves on the Board of Directors of TES Pharma, one of the Company's suppliers. At December 31, 2019 and September 30, 2019, TES Pharma was owed $75,000.  

Tiziana Life Sciences Plc ("Tiziana")

As at December 31, 2019 and September 30, 2019, a balance was owed to Tiziana Life Sciences Plc of $5,902 and was owed by Tiziana Life Sciences Plc of $252,746 respectively. As of the date these unaudited condensed consolidated financial statements are issued, the related party payable had not been paid. Kunwar Shailubhai, the Company's former CEO and a director of the Company, is also a director of Tiziana. In addition, Tiziano Lazzaretti, the Company's CFO, is also CFO of Tiziana. The Company is party to a Shared Services agreement with Tiziana whereby the Company is charged for shared services such as the payroll and rent, see Note 8 for more details. 

Panetta Partners

Panetta Partners Limited, a shareholder of Arna, is a company in which Gabriele Cerrone has significant interest and also serves as a director. At December 31, 2019 and September 30, 2019,  there was no balance owed to or from Panetta Partners Limited. In February 2020, the Company entered into a 12 % Convertible Promissory Note with Panetta Partners for $31,000 with a maturity date of February 07, 2021.

There is no interest charged on the balances with related parties. There are no defined repayment terms and such amounts can be called for payment at any time.

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ACCOUNTING POLICIES (Tables)

3 Months Ended

Dec. 31, 2019

ACCOUNTING POLICIES [Abstract]

Schedule of potential common shares issuable upon the exercise of outstanding options and the exercise of warrants

The following table sets forth potential common shares issuable upon the exercise of outstanding options and the exercise of warrants and convertible loan notes, all of which have been excluded from the computation of diluted weighted average shares outstanding as they would be anti-dilutive:

	December 31, 2019		December 31, 2018
Stock options		3,973,675		4,076,675
Warrants		1,926,501		1,926,501
Convertible notes & associated fees		2,145,000		361,538
Total shares issuable upon exercise or conversion		8,045,176		6,364,714

Schedule of computation of net loss per share

The following is the computation of net loss per share for the following periods:

	For the Three Months Ended December 31,
	2019			2018
	(Unaudited)			(Unaudited)
Net loss for the period	$	(158,042	)	$	(401,303	)
Weighted average number of shares	68,908,003			68,908,003
Net loss per share (basic and diluted)	$	(0.00	)	$	(0.01	)

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RELATED PARTY TRANSACTIONS - Narrative (Details) - USD ($)	3 Months Ended
	Dec. 31, 2019	Feb. 07, 2020	Sep. 30, 2019
Related Party Transaction [Line Items]
Balance due to related party	$ 555,902		$ 550,000
Interest expense	0
Principal amount		$ 31,000
Eurema Consulting S.r.l.
Related Party Transaction [Line Items]
Balance due to related party	200,000		200,000
Gabriele Cerrone
Related Party Transaction [Line Items]
Balance due to related party	175,000		175,000
Roberto Pellicciari
Related Party Transaction [Line Items]
Balance due to related party	175,000		175,000
Tiziana Life Sciences PLC
Related Party Transaction [Line Items]
Due from related party	5,902		252,746
Panetta Partners
Related Party Transaction [Line Items]
Due from related party	0		0
Balance due to related party	$ 0		0
Alessandro Padova
Related Party Transaction [Line Items]
Due from related party			$ 75,000

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ACCOUNTING POLICIES - Net Loss per Share (Details 1) - USD ($)	3 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
ACCOUNTING POLICIES [Abstract]
Net loss for the period	$ (158,042)	$ (401,303)
Weighted average number of shares (in shares)	68,908,003	68,908,003
Net loss per share (basic and diluted) (in dollars per share)	$ (0.00)	$ (0.01)

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GOODWILL AND INTANGIBLE ASSETS - Intangible Assets (Details) - USD ($)	Dec. 31, 2019	Sep. 30, 2019
Indefinite-lived Intangible Assets [Line Items]
Intangible assets	$ 2,149,369	$ 2,149,369
In-process research and development
Indefinite-lived Intangible Assets [Line Items]
Intangible assets	613,100	613,100
Intellectual Property
Indefinite-lived Intangible Assets [Line Items]
Intangible assets	236,269	236,269
Indefinite lived intangible asset
Indefinite-lived Intangible Assets [Line Items]
Intangible assets	$ 1,300,000	$ 1,300,000

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ACCOUNTING POLICIES

3 Months Ended

Dec. 31, 2019

ACCOUNTING POLICIES [Abstract]

ACCOUNTING POLICIES

2.    ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these unaudited condensed consolidated financial statements are set out below. These policies have been applied consistently to all the periods presented unless otherwise stated.

Basis of preparation 

These unaudited condensed consolidated financial statements have been prepared following the requirements of the Securities and Exchange Commission (the "SEC”) and United States generally accepted accounting principles (“US GAAP”) for interim reporting. The principles for condensed interim financial information do not require the inclusion of all the information and footnotes required by generally accepted accounting principles for complete financial statements.Therefore, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements as of and for the year ended September 30, 2019 and notes thereto included in the Company's Annual Report on Form 10-K filed with the SEC on January 13, 2020.  The accompanying unaudited condensed consolidated financial statements have not been audited by an independent registered public accounting firm in accordance with the standards of the Public Company Accounting Oversight Board (United States) but in the opinion of management, include all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s interim financial information.

The results of the operations for the three months ended December 31, 2019 may not be indicative of the results that may be expected for the year ending September 30, 2020. 

Principles of Consolidation

In accordance with Accounting Standards Codification ("ASC")  810, Consolidation, the Company consolidates any entity in which it has a controlling financial interest. Further, the Company consolidates any variable interest entity that it is deemed to be the primary beneficiary of, and for which the Company has the power to direct its significant activities. Upon review of the relationship between Rasna Therapeutics Limited (“Rasna UK”) and Rasna Inc., Management noted that equity investment in Rasna UK was not sufficient to fund its operations. Accordingly, Rasna Inc. was considered to be the primary beneficiary of the assets held within Rasna UK, which primarily consist of cash received from Rasna Inc. to fund its operations, and for which the Company has the power to direct its significant activities. As a result, Rasna Inc. consolidates this variable interest entity, which has minimal activity and is in the process of being liquidated.  

The consolidated financial statements include the financial statements of the Company and its subsidiary, Arna Therapeutics Limited and its variable interest entity, Rasna Therapeutics Ltd, as well as the operations of Rasna Inc. for the period from May 17, 2016 through December 31, 2019. All significant intercompany accounts and transactions have been eliminated in the preparation of the accompanying consolidated financial statements. 

Business Combinations 

Management accounts for business combinations under the provisions of ASC Topic 805-10, Business Combinations, which requires that the purchase method of accounting be used for all business combinations. Assets acquired and liabilities assumed, including non-controlling interests, are recorded at the date of acquisition at their respective fair values. ASC 805-10 also specifies criteria that intangible assets acquired in a business combination must meet to be recognized and reported apart from goodwill. Goodwill represents the excess purchase price over the fair value of the tangible net assets and intangible assets acquired in a business combination. Acquisition-related expenses are recognized separately from the business combinations and are expensed as incurred. Management is required to complete the purchase price allocation within 12 months of the acquisition date. If such completion of the allocation results in a change in the preliminary values, the measurement period adjustment will be recognized in the period in which the adjustment amount is determined in accordance with ASU 2015-16. The amounts reflected within the consolidated financial statements are the results of a purchase price allocation based on a final valuation report. 

Use of Estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. The Company evaluates its estimates on an ongoing basis, including those related to the fair values of share based awards, income taxes and contingent liabilities, among others. The Company bases its estimates on historical experience and on various other assumptions that the Company believes to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from those estimates and such differences could be material to the consolidated financial position and results of operations.

Net Loss per Share

Basic net loss per share is computed by dividing net loss available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted loss per share includes potentially dilutive securities such as outstanding options, warrants and convertible loan notes, using various methods such as the treasury stock or modified treasury stock method in the determination of dilutive shares outstanding during each reporting period.

The following table sets forth potential common shares issuable upon the exercise of outstanding options and the exercise of warrants and convertible loan notes, all of which have been excluded from the computation of diluted weighted average shares outstanding as they would be anti-dilutive:

	December 31, 2019		December 31, 2018
Stock options		3,973,675		4,076,675
Warrants		1,926,501		1,926,501
Convertible notes & associated fees		2,145,000		361,538
Total shares issuable upon exercise or conversion		8,045,176		6,364,714

The following is the computation of net loss per share for the following periods:

	For the Three Months Ended December 31,
	2019			2018
	(Unaudited)			(Unaudited)
Net loss for the period	$	(158,042	)	$	(401,303	)
Weighted average number of shares	68,908,003			68,908,003
Net loss per share (basic and diluted)	$	(0.00	)	$	(0.01	)

Recent Accounting Pronouncements 

In July 2017, the FASB, issued ASU, 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral. The ASU applies to issuers of financial instruments with down-round features. It amends (1) the classification of such instruments as liabilities or equity by revising the guidance in ASC 815 on the evaluation of whether instruments or embedded features with down-round provisions must be accounted for as derivative instruments and (2) the guidance on recognition and measurement of the value transferred upon the trigger of a down-round feature for equity-classified instruments by revising ASC 260. The ASU is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company adopted the provisions of ASU 2017-11 effective October 1, 2019 and it did not have a material impact on the Company's consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Intangibles -Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, which addresses the concerns over the cost and complexity of the two-step impairment test, and removes the second step of the test. An entity will apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The guidance is effective for annual and interim goodwill impairment tests performed for periods beginning after December 15, 2019. The Company is currently evaluating the impact of adopting this guidance on the Company's consolidated financial statements. In June 2018, the FASB issued ASU 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Non employee Share Based Payment Accounting, which simplifies several aspects of the accounting for nonemployee share-based payment transactions resulting from expanding the scope of Topic 718, to include share-based payment transactions for acquiring goods and services from nonemployees. Some of the areas for simplification apply only to nonpublic entities. The amendments specify that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The amendments in ASU 2018-07 also clarify that Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under Topic 606, Revenue from Contracts with Customers. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. Early adoption is permitted. The Company adopted the provisions of ASU 2018-07 effective October 1, 2019 and it did not have a material impact on the Company's consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2018-13 removes certain disclosures, modifies certain disclosures and adds additional disclosures. The ASU is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2019. Early adoption is permitted. The Company is currently evaluating the effect that this update will have on its financial statements and related disclosures.

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($)	3 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Income Statement [Abstract]
Revenue
Cost of revenue
Gross profit
Operating expenses:
General and administrative	131,436	184,565
Research and development		75,000
Consultancy fees third parties and related parties	19,999	29,218
Legal and professional fees	(2,154)	110,545
Total operating expenses	(149,281)	(399,328)
Loss from operations	(149,281)	(399,328)
Other income/(expense):
Interest on convertible notes payable	(8,761)
Foreign currency transaction loss		(1,975)
Total other income/(expense)	(8,761)	(1,975)
Loss from operations before income taxes	(158,042)	(401,303)
Income tax provision
Net loss	$ (158,042)	$ (401,303)
Basic and diluted net loss per share attributable to common shareholders (in dollars per share)	$ (0.00)	$ (0.01)
Basic and diluted weighted average common shares outstanding (in shares)	68,908,003	68,908,003