UNITED STATES
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TABLE OF CONTENTS
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As used in this Annual Report on Form 10-K, unless the context otherwise requires, the terms the “Company,” “Registrant,” “we,” “us,” “our,” “Meso,” or “MSSV” refer to Meso Numismatics, Inc., a Nevada corporation.
FORWARD-LOOKING STATEMENTS
Except for statements of historical fact, some information in this document contains “forward-looking statements” that involve substantial risks and uncertainties. You can identify these forward-looking statements by words such as “may,” “will,” “should,” “anticipate,” “estimate,” “plans,” “potential,” “projects,” “continuing,” “ongoing,” “expects,” “management believes,” “we believe,” “we intend” or the negative of these words or other variations on these words or comparable terminology. The statements that contain these or similar words should be read carefully because these statements discuss our future expectations, contain projections of our future results of operations or of our financial position, or state other forward-looking information. We believe that it is important to communicate our future expectations to our investors. However, there may be events in the future that we are not able accurately to predict or control. Further, we urge you to be cautious of the forward-looking statements which are contained in this registration statement because they involve risks, uncertainties and other factors affecting our operations, market growth, service, products and licenses. The factors listed in the sections captioned “Risk Factors” and “Description of Business,” as well as other cautionary language in this registration statement and events in the future may cause our actual results and achievements, whether expressed or implied, to differ materially from the expectations we describe in our forward-looking statements. We operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for us to predict all of those risks, nor can we assess the impact of all of those risks on our business or the extent to which any factor may cause actual results to differ materially from those contained in any forward-looking statement. The forward-looking statements in this registration statement are based on assumptions management believes are reasonable. However, due to the uncertainties associated with forward-looking statements, you should not place undue reliance on any forward-looking statements. Further, forward-looking statements speak only as of the date they are made, and unless required by law, we expressly disclaim any obligation or undertaking to publicly update any of them in light of new information, future events, or otherwise. The occurrence of any of the events described as risk factors or other future events could have a material adverse effect on our business, results of operations and financial position. Since our common stock is considered a “penny stock,” we are ineligible to rely on the safe harbor for forward-looking statements provided in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”).
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PART I
ITEM 1. BUSINESS
Overview
Since the acquisition of Global Stem Cell Group in August of 2021, our focus has been mainly dedicated to its operations serving the markets in the regenerative medicine industry. We believe stem cell therapy is becoming an increasingly effective clinical solution for treating conditions that traditional or conventional medicine only offers within palliative care and pain management. Patients around the world are seeking a natural regenerative alternative without the potential risks and side effects sometimes associated with conventional pharmaceuticals.
We work with doctors and their staff to provide products, solutions, equipment, services, and training to help them be successful in the application of Stem Cell Therapies. Our team combines solutions from extensive clinical research with the manufacturing and commercialization of viable cell therapy and immune support related products that we believe will change the course of traditional medicine around the world forever. Our strategy allows us the ability to create immediate revenue streams through product sales, distribution, and clinical applications, driven by our extensive education platform. Our revenue comes directly from the training and the seminars, from the resale of these kits, products, and equipment, services, and from the reoccurring application of our process using the kits and solutions we provide.
Global Stem Cells Group is a leader in the Stem Cell and Regenerative Medicine fields, covering clinical research, patient applications, along with physician training through our state-of-the-art global network of companies. The Company’s mission is to enable physicians to make the benefits of stem cell medicine a reality for patients around the world. They have been educating doctors on the science and application of cell-based therapeutics for the past 10 years. Our professional trademarked association “ISCCA” INTERNATIONAL SOCIETY FOR STEM CELL APPLICATION is a global network of medical professionals that leverages these multinational relationships to build best practices and further our mission.
The Company envisions the ability to improve “health-span” through the discovery and developments of new cellular therapy products, and cutting-edge technology.
Global Stem Cells Group, as almost everyone else in the world, was severely affected by the covid 19 pandemic. As we have been recovering in 2022 and into 2023, we are integrating every aspect of the regenerative medicine industry. During 2024, we plan to continue to add manufacturing and commercialization of viable cell therapy and immune support related products that we believe will change the course of traditional medicine around the world forever.
We believe this strategy will allow us the ability to increase our current revenues and create immediate revenue streams through product sales, distribution, and clinical applications, driven by our extensive education platform here are our main projects and revenue generators for 2024 and beyond.
Global Stem Cell Group Operations
We operate through our wholly owned subsidiary, Global Stem Cells Group (referred to sometimes as “GSCG”), which offers the following products and services for value:
| ■ | Treatments - Patient procedures from treatments GSCG is offering at its Cancun, Mexico clinic, with another clinic soon expected in a joint venture with an investor under renovation in Dubai, UAE. | |
| ■ | Training - GSCG offers a Stem Cell & Exosomes Certification Program where physicians attending these training sessions take advantage of a full review of stem cell biology, characterization and regenerative properties of cells and cell products, cytokines and growth factors and how they can be applied in a clinic setting. Other trainings and programs are available. | |
| ■ | Products - Physicians can order SVF Kits through GSCG, which includes EC Certificate. The SVF Kits are being used in clinical procedures like intra-articular injections, cosmetic surgery, acne scarring, dermal injections, stem cell enriched fat transfers, chronic ulcers, and other conditions today. | |
| ■ | Equipment - Physicians can order equipment through GSCG, which includes medical supplies, equipment and resources required to practice regenerative medicine. |
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Manufacturing Facilities
We own no real estate, but we have a lease for property located in Cancun, Mexico and soon in Dubai, UAE. These facilities are designed to be both treatment centers for services and manufacturing laboratories for product offerings. We believe GSCG is at the forefront of cellular product manufacturing and therapeutic development. The Manufacturing Facilities division is responsible for the production of various cellular products and therapies, spanning different categories and locations around the world.
Cell Therapy Product Manufacturing Facility in Cancun, Mexico:
GSCG entered into a lease with HELLIMEX, S.A. DE CV beginning January 16, 2022 and ending on January 15, 2024. The Cancun property is located in the Tulum Trade Center and the facility was inaugurated in May of 2022 and began operations in July of 2022. It has been accredited both by the Mexican General Health Council and Cofepris (Mexican FDA). GSCG’s processing operation is in the well-known HELLIMEX, S.A. DE CV building, a high-rise office of leased suites that provide a multitude of other professional services.
Due to the expansion of the Cancun Clinic, an additional 1,216 square feet Global Stem Cell Group, Inc. entered into a new Cancun lease with RIVIERA MAYA, S.A. DE C.V beginning January 16, 2024 and ending on January 15, 2026. The property is located in the Tulum Trade Center, consisting of 2,863 square feet with a monthly rent of $6,341 and a security deposit of $11,725.
GSCG’s manufacturing facility in Cancun, Mexico, is a state-of-the-art hub dedicated to the production of cutting-edge cellular products, with a particular focus on mesenchymal stem cells and exosomes. The Cancun Clinic, as part of Global Stem Cells Group, offers a comprehensive range of medical services. Advanced stem cell therapies are employed to address a diverse array of medical conditions, utilizing the regenerative potential of mesenchymal stem cells and exosomes for tissue repair and regeneration.
The facility houses specialized laboratories equipped for the production of high-quality cellular products, including mesenchymal stem cells and exosomes. This facility prides itself on in-house production, ensuring strict quality control and safety measures for the manufacture of cellular products that meet the highest standards of efficacy. The Cellular Product Development Line at the Cancun Clinic is dedicated to ongoing research and development of new cellular products. The primary objective is to foster continuous innovation, allowing the facility to remain at the forefront of regenerative medicine.
We have assembled a highly qualified team of medical professionals and technicians that specialize in GSCG’s processes, solutions, and services. We believe our processing facilities in Cancun are top-notch, and include a laboratory to culture-expand cells, a process that yields better patient results, and a cryopreservation unit to keep these extracted samples stored safely until they are needed. This Laboratory/ Treatment Center has the latest technologies available including NK Cell Therapy CAR T-cell for cancer treatment and produces full Lines of Msc and Exosomes.
The Cancun Clinic actively organizes educational courses and medical conferences for physicians. These initiatives aim to create awareness of the therapeutic benefits of stem cell therapies and equip healthcare professionals with the latest advancements in regenerative medicine. The manufacturing facility directly sells high-quality cellular therapy products, including exosomes and cultured expanded mesenchymal stem cells. These products cater to physicians and medical facilities seeking reliable regenerative medicine solutions.
Our model is to work hand-in-hand with the patients’ physicians to provide a total quality experience in this innovative industry. Our revenue is derived from training doctors, providing services to each patient that these doctors bring to us for treatments, and the solutions and products they utilize.
Cell Therapy Product Manufacturing Facility in Dubai UAE (expected second quarter 2024)
Global Stem Cells Group is extending its footprint with the establishment of a cutting-edge manufacturing facility in Dubai, located within the prestigious Hyatt Place Hotel in Jumeirah.
Similar to its counterpart in Cancun, this facility is currently under construction and will be equipped to offer comprehensive regenerative medicine services. Positioned strategically, the leased suite in Dubai is set to serve patients and physicians from the Middle East and Asia.
The new facility is expected to replicate the capabilities of the Cancun facility, featuring specialized laboratories for the production of advanced cellular products, including mesenchymal stem cells and exosomes. This expansion aligns with GSCG’s commitment to excellence and patient-centered care, aiming to pioneer cutting-edge stem cell treatments in a global context. The Dubai facility’s location within the Healthcare City reflects a strategic move to contribute significantly to the advancement of regenerative medicine in the region and further expands Global Stem Cells Group’s global network.
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ReGen Network Centers
Global Stem Cells Group has a network of licensed clinics worldwide functioning as advanced facilities for research and development. With a licensing fee from GSCG, these ReGen Centers operate and play a pivotal role in pushing the boundaries of stem cell utilization in medical treatments. They actively engage in the development of novel techniques and clinical approaches, conducting clinical studies and treatment protocols to continually advance the field.
The focus extends to embracing new technologies and fostering collaboration with scientists, researchers, and medical professionals globally. This collaborative effort aims to contribute to the progress of stem cell research and therapy on a global scale.
Additionally, these centers are instrumental in the establishment of research hubs worldwide, further expanding Global Stem Cells Group’s reach. Not only do they serve as research and development hubs, but these clinics also function as treatment centers, ensuring that the innovative therapies and advancements in stem cell research are accessible to patients from diverse geographical locations. The multi-faceted role of these clinics underscores Global Stem Cells Group’s commitment to driving excellence and pioneering advancements in the realm of regenerative medicine.
Permanent Treatment Center of Excellence and Physician Training in Istanbul, Turkey
This flagship operation in “Istanbul Center” employs well-targeted combinations of Exosomes, allogeneic human Mesenchymal cells, and autologous bone marrow and Adipose derived stem cells to treat a wide array of diseases and debilitating medical conditions. Our treatment plans are mostly focused on a systemic and/or whole-body approach. This new processing facility works with local partners to provide the latest in Stem Cell Therapies to many of those in this region who have no access to these kinds of cutting-edge medical solutions. Our physician training services will help educate and generate demand for our solutions, services, and products. Key doctors and partners from this operation help train and teach at other ISSCA events.
Permanent Treatment Center of Excellence and Physician Training in Buenos Aires
ReGen Buenos Aires, under the expert guidance of Dr. Silvina Pastrana, M.D., stands as a prominent facility within the Global Stem Cells Group network. As the medical director of the Stem Cell Center Buenos Aires and Regentherapy Puerto Madero, Dr. Pastrana leads a team of specialized medical professionals in orthopedics, rheumatology, medical clinic, and cosmetic surgery. With a comprehensive background in surgery, she skillfully integrates stem cell therapies into various procedures, showcasing a commitment to cutting-edge medical approaches. Pastrana’s role extends beyond the clinic, her contribution to the field is further highlighted by her membership on the Global Stem Cells Group Advisory Board, serving as Head instructor of ISSCA LATAM. ReGen Buenos Aires, under Dr. Pastrana’s leadership, embodies a commitment to excellence and innovation in the application of stem cell therapies across various medical disciplines.
Permanent Treatment Center of Excellence and Physician Training in Belgium
ReGen Belgium, a pivotal clinic in the Global Stem Cells Group network, operates under the expert guidance of Dr. Samy Joheir, MD, a renowned surgeon specializing in plastic, reconstructive, and cosmetic surgery. Located at the Churchill Aesthetic Center in Uccle, Belgium, this facility serves a dual purpose as a medical certification center and a treatment facility. Dr. Joheir’s practice encompasses a spectrum of specialties, offering cosmetic surgery procedures, including liposuction, breast augmentation, and facial surgeries like facelifts and rhinoplasties. The clinic also provides cosmetic medicine procedures, such as botulinum toxin treatments for wrinkles, chemical peels, and lipo fillings. Notably, ReGen Belgium stands out for its expertise in hair micrografting, a technique for hair restoration. Dr. Joheir’s commitment to excellence, coupled with the clinic’s multifaceted offerings, solidifies its role in advancing regenerative medicine while delivering innovative treatments in the realm of plastic and cosmetic surgery.
Permanent Treatment Center of Excellence and Physician Training in Jakarta
ReGen Jakarta, Indonesia, stands as a center of excellence within the Global Stem Cells Group, specializing in aesthetics, diabetes, and weight loss. Led by the accomplished Dr. Yanti Kushmiran, this center has emerged as a leading hub in Asia for utilizing cutting-edge exosome technologies to address diabetic foot problems. Dr. Kushmiran is a prominent member of the ReGen network, and her expertise in the field has positioned ReGen Jakarta as a frontrunner in regenerative medicine for these specific medical concerns.
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The center’s primary focus on aesthetics, diabetes, and weight loss underscores its commitment to providing comprehensive solutions for patients seeking innovative treatments in these areas. Dr. Kushmiran’s leadership has propelled ReGen Jakarta to the forefront of regenerative medicine in Indonesia, and there are plans in motion to further expand its impact by opening additional facilities in clinics across the country. As a pivotal part of the Global Stem Cells Group network, ReGen Jakarta continues to contribute significantly to advancements in regenerative medicine, offering hope and transformative solutions to individuals facing challenges in aesthetics, diabetes, and weight management in Indonesia and beyond.
Regenerative Medicine Clinic in Mexico City
Collaborating with the esteemed Dr. Vanessa Rodriguez Pares, Fosters Regencell Facility in Mexico City emerges as a prominent partner within the Global Stem Cells Group network. Recognized as one of the most prestigious aesthetic clinics in the region, this collaboration is poised to elevate the standards of regenerative medicine services across Mexico. Dr. Vanessa Rodriguez Pares, a leading expert in the field, brings her wealth of knowledge and experience to the forefront of this partnership, ensuring a commitment to excellence in every aspect of regenerative medicine.
This affiliation underscores the commitment to maintaining a high level of service and innovation in regenerative medicine throughout Mexico. Patients can anticipate cutting-edge aesthetic and regenerative treatments offered by Fosters Regencell, blending the clinic’s reputation for excellence with the expertise and support of the Global Stem Cells Group network. This collaboration is set to make a lasting impact on the landscape of regenerative medicine in Mexico, providing patients with access to top-tier services and advancements in the field.
Regenerative Medicine Clinic in Portugal
In collaboration with Dr. Roni Moya, Regene Clinic in Portugal stands as a distinguished partner within the Global Stem Cells Group network. This clinic, under the leadership of Dr. Moya, has strategically positioned itself as a focal point for regenerative medicine in Portugal. Specializing in immunotherapy and the treatment of chronic degenerative diseases, Regene Clinic also addresses pain management and functional medicine, offering a comprehensive approach to patient care.
The clinic’s unique role extends beyond its function as a treatment center, doubling as a training center for doctors seeking expertise in regenerative medicine. Dr. Roni Moya’s leadership ensures that the clinic maintains a high standard of medical education, providing valuable training opportunities for healthcare professionals. This dual function exemplifies the commitment of Regene Clinic to not only advance patient care but also contribute to the growth and education of medical practitioners in the field of regenerative medicine.
The collaboration with Global Stem Cells Group amplifies the clinic’s impact, fostering innovation and excellence in regenerative therapies. Regene Clinic in Portugal serves as a beacon for patients seeking advanced regenerative treatments and as a hub for medical professionals eager to expand their knowledge in this evolving field.
Regenerative Medicine Clinic in Tashkent, Uzbekistan
As the newest clinic partner for the Global Stem Cells Group, the ReGen clinic in Tashkent, Uzbekistan, embarks on a mission to redefine healthcare objectives in the region. Committed to advancing regenerative medicine, the clinic aims to provide the people of Uzbekistan with access to cutting-edge stem cell therapies and innovative medical treatments.
Beyond offering state-of-the-art regenerative solutions, the clinic envisions becoming a vital educational hub by collaborating with the International Society for Stem Cell Application (ISSCA) to host training programs. By fostering knowledge and expertise among local healthcare professionals, the clinic aspires to elevate the standards of healthcare in Uzbekistan and contribute significantly to the global movement of regenerative medicine.
Regenerative Medicine Clinic in Dominican Republic
Looking ahead to the coming year, Global Stem Cells Group is poised for a groundbreaking venture with Dr. Patria Gonzalez, as we finalize a transformative deal for a state-of-the-art center in Punta Cana, Dominican Republic.
This strategic collaboration not only expands our global network but also strategically places a cutting-edge regenerative medicine facility in the heart of the picturesque tourist destination of Punta Cana. Dr. Gonzalez’s expertise adds immense value to this partnership, and together, we are committed to promoting stem cell therapy in this vibrant locale. The envisioned center not only signifies a major step forward in our mission to make regenerative medicine a global standard but also presents a unique opportunity to provide advanced treatments amidst the allure of a premier tourist destination.
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As we embark on this exciting venture, the collaboration with Dr. Patria Gonzalez in Punta Cana represents a fusion of medical excellence and an ideal setting, poised to make regenerative therapies more accessible to a diverse range of individuals while contributing to the growth of regenerative medicine in the Caribbean region.
Other Regenerative Medicine Clinics
We also have plans in the coming year to venture in Albania and Thailand, and plan to share news of collaborations in those countries.
Strategic Partnerships
We have entered strategic collaborative partnerships with existing companies and organizations that share our vision of advancing regenerative care. These relationships are important to us in the expansion of franchising opportunities for specialized regenerative care clinics worldwide and research and development for our products and services.
Partnership Between Global Stem Cells Group and ReGen
Through their strategic partnership, ReGen has experienced remarkable growth, leveraging Global Stem Cells Group’s reputation and extensive resources to open state-of-the-art clinics in several countries. These clinics have become pioneers in regenerative care in the region.
ReGen is at the forefront of introducing cutting-edge aesthetic treatments, such as the perfected hair transplant technique from Turkey, revolutionizing the regenerative healthcare landscape. Patients now have access to the latest and most effective treatment options. This partnership underscores Global Stem Cells Group’s vision to make its exceptional services accessible to people around the world.
While ReGen brings access to clinics, advanced techniques and expertise, Global Stem Cells Group provides valuable resources as a conglomerate of companies engaged in product manufacturing and comprehensive training through ISSCA. This collaboration has the potential to change the lives of people seeking regenerative care on a global scale.
This landmark partnership is poised to reshape the world of regenerative care, marking a transformative moment for the field of regenerative medicine.
Strategic Alliance Between Global Stem Cells Group and StemBio
Global Stem Cells Group and StemBio have joined forces in a groundbreaking collaboration to advance the field of regenerative medicine. The Alliance, unveiled at the World Regenerative Medicine Congress in Istanbul, marks a significant step forward in harnessing expertise to change, repair, or regenerate human cells, tissues, and organs. The alliance’s primary objectives include advancing research and development in cutting-edge technologies such as NK cells, CAR T cells, allogeneic PRP and placenta products, and human fibroblast technologies. This collaborative effort represents a commitment to pioneering new medical frontiers and pushing the boundaries of regenerative medicine.
Line of Products
Solidifying and increasing our presence worldwide, we are completing our new catalog of Cell Therapy products manufactured completely in house as opposed to our previous reseller model. This new series of products include:
| ● | CELLGENIC FLOW EXOSOMES This is the company’s flagship product, which we believe stands ready to revolutionize the practice of regenerative medicine as we know it today. Exosomes are extracellular vesicles that float freely within the blood, very much like platelets. These are cell-derived non-particles that play a pivotal role in cell-to-cell communication that are involved in a wide range of physiological processes. Exosomes play an important role in the transfer of proteins and other bioactive molecules between cells and regulate gene expression in recipient cells, thus influencing various molecular pathways and have a wide range of therapeutic implications, including hair loss and pain management. |
| ● | CELLGENIC MSC (Mesenchymal Stem Cell) This product excretes growth factors, cytokines, and proteins, which all play a key role in the regeneration of tissue. Their anti-inflammatory and immunomodulatory properties mean that it is difficult for them to be rejected by the body. Additionally, they increase blood flow to the vital organs that need it the most. MSC has immunomodulatory effects that have an effect on macrophages, neutrophils, NK cells, mast cells and dendritic cells in innate immunity with known anti-inflammatory benefits. |
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| ● | CELLGENIC LYOPHILIZED EXOSOMES (Lyophilized Exosomes) is derived from human umbilical cord mesenchymal stem cells and includes potent growth factors, peptides, coenzymes, minerals, amino acids, vitamins and UV radiation reducing agents for skin revitalization. Exosomes are extracellular vesicles, which is the medical term for tiny bubbles that are released from stem cells. Exosomes carry genetic information and proteins to cells throughout your body, and they create paths for communication between cells to help combat aging skin, environmental damage and loss of elasticity and tone. |
| ● | VITANOVAS is a mobile IV infusion company that provides in-home treatments to patients in need of immune modulation to help fight infections, viruses, and diseases. |
| ● | GCELL GCell technology is a closed-system medical device that harnesses the natural and powerful restorative capabilities of adipose tissue. It is a cutting-edge tool that utilizes micrograft technology to harness the natural and powerful restorative capabilities of adipose tissues. This is a precise system that is able to process a stem cell sample from adipose tissue in less than half of the time that it would take a physician to do so through traditional means. This allows the patient to be more comfortable throughout the shorter procedure, as less anesthesia is also required than when operating under traditional means. The GCell is a minimally invasive, portable machine that allows physicians to fully unlock the potential of regenerative medicine as a component in their practice. |
| ● | CELLGENIC SVF is an isolation kit system that has all the ingredients and consumables for the extraction of adipose-Derived Stem cells from fat. This complete kit it is currently being used in clinical procedures for lung disease, intra-articular injections for osteoarthritis of the knee and hip, cosmetic surgery, dermal injection, stem cell enriched fat transfer, wounds chronic ulcers among other chronic conditions. |
| ● | CELLGENIC BONE MARROW Cell isolation protocols usually include density gradient centrifugation. With careful attention to detail the BMC system gently and precisely processes bone marrow aspirate for the purest concentration of these cells at the point of care. BMC is part of a developmental effort to provide an effective therapy that is low risk. It recovers a large percentage of platelet rich plasma and other total nucleated cells in a treatment sample. It is a closed system with strong performance outcomes and outstanding product stability. |
| ● | CELLGENIC PRP (Platelet Rich Plasma) is used to encourage healing and reduce inflammation. As a concentrated source of autologous platelets, PRP contains several growth factors and other cytokines that can stimulate the healing of soft tissues. |
| ● | CELLGENIC HUMAN PLACENTA In placental therapy, extracts of placenta containing polydeoxyribonucleotide (PDRN), enzymes, nucleic acids, amino acids, peptides, vitamins, trace elements, minerals and growth factors are normally administered via intramuscular injection. Administered placental extracts are readily absorbed by binding to specific receptors present on the surface of targeted cells followed by stimulating inactive or damaged cells, tissues and organs in the body, thus providing tissue repair and regeneration. In addition, placental extracts also exhibit many other therapeutic properties and act as a stimulant for tissue repair, wound healing, immunomodulation, anti-inflammatory, cellular proliferation and tissue regeneration. |
| ● | CELLGENIC ALLOGENEIC PRP Allogeneic PRP has been shown to be a safe option. Allogeneic PRP offers the benefit of being collected from voluntary blood donors, with its derivatives ready for use without requiring clinicians to collect a sample from the patient. This is particularly useful in clinical situations such as acute burns when patients may be fluid-depleted and thrombocytopenic. However, PRP preparation is contraindicated in patients with hematological disorders, sepsis, or infection, and relative contraindications include the use of non-steroidal anti-inflammatory drugs or corticosteroids, tobacco use, malignancies, and anemia. |
We believe Global Stem Cells Group’s future is looking bright as we look to bounce back from the pandemic effect on our operations. We are uniquely positioned to reach our revenue goals due to our global presence and network of independent businesses. We stand positioned to give the world access to the full spectrum of everything regenerative medicine can offer-- from being a source for products themselves, to sourcing equipment, to treating patients. We are able to do this because of our decade of experience in the field, and because of the world-class leadership and organization of the Group.
Leaders in stem cell medicine trust the high quality of Global Stem Cells Group’s world-class stem cell therapies, and physicians all over the world have come to value it as a trusted source for the newest ground-breaking research and development in the field of regenerative Medicine.
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Patents and Proprietary Rights
We are committed to the protection of our intellectual property of proprietary products and process as well as trademarks and other methods described below.
Our business includes the development of proprietary cell therapy products as well as revenue generating physician and patient based regenerative medicine / cell therapy training services, cell collection and cell storage services, the sale of cell collection and treatment kits for humans and animals, and the operation of a cell therapy clinic.
On February 19, 2019, the U.S. Patent and Trademark Office (“USPTO”) filed US service trademark, 5,682,488 which claims exclusive us of “ISCCA” as INTERNATIONAL SOCIETY FOR STEM CELL APPLICATION to Stem Cell Training Inc a Florida Corporation.
On April 30, 2019, the U.S. Patent and Trademark Office (“USPTO”) granted US service trademark, 5,739,089 which claims exclusive us of “ISCCA” as INTERNATIONAL SOCIETY FOR STEM CELL APPLICATION to Stem Cell Training Inc a Florida Corporation.
We own proprietary protocols for the harvesting and isolation of Stem Cells Derived from the adipose tissue and Bone marrow.
We also own proprietary standard operating procedures for the manufacturing of allogeneic cellular therapy products derived from perinatal tissue.
None of these protocols or IP have been patented. We rely on our own trade secrets and proprietary know-how to protect our technology and maintain our competitive position, since patent protection may not be available or applicable to our technology. Our policy is to require each of our employees, consultants and advisors to execute a confidentiality and inventions assignment agreement before beginning their employment, consulting or advisory relationship with us. The agreements generally provide that the individual must keep confidential and not disclose to other parties any confidential information developed or learned by the individual during the course of the individual’s relationship with us except in limited circumstances. These agreements generally also provide that we shall own all inventions conceived by the individual in the course of rendering services to us. Moreover, some of our collaborators and scientific advisors have rights to publish data and information to which we have rights, which may impair our ability to protect our proprietary information or obtain patent protection in the future.
We work with others in our research and development activities and one of our strategies is to enter into collaborative agreements with third parties to develop our proposed products. Disputes may arise about inventorship and corresponding rights in know-how and inventions resulting from the joint creation or use of intellectual property by us and our licensors, collaborators, consultants and others. In addition, other parties may circumvent any proprietary protection we do have. As a result, we may not be able to maintain our proprietary position.
We are not currently a party to any litigation or other adverse proceeding challenging our patents, patent licenses or intellectual property rights. However, if we become involved in litigation or any other adverse intellectual property proceeding, for example, as a result of an alleged infringement, or a third party alleging an earlier date of invention, we may have to spend significant amounts of money and time and, in the event of an adverse ruling, we could be subject to liability for damages, including treble damages, invalidation of our intellectual property and injunctive relief that could prevent us from using technologies or developing products, any of which could have a significant adverse effect on our business, financial condition and results of operation.
In addition, any claims relating to the infringement of third party proprietary rights, or earlier date of invention, even if not meritorious, could result in costly litigation, lengthy governmental proceedings, divert management’s attention and resources and require us to enter royalty or license agreements which are not advantageous, if available at all.
Competition
We face competitors in many different segments of our business models. We face intense competition from companies with much larger capital resources than us, and, as a result, we could struggle to attract customers and gain market share. Many of our existing or future competitors have greater financial resources and greater brand name recognition than we do and, as a result, may be better positioned to adapt to changes in the industry or the economy as a whole. We will strive to advance our products and technology in each of these sectors ahead of our competitors to gain market share. We also face intense competition in attracting and retaining qualified employees. Our ability to continue to compete effectively will depend upon our ability to attract new employees, retain and motivate our existing employees and to compensate employees competitively. We face significant competition in several aspects of our business, and such competition might increase, particularly in the market for regenerative therapies.
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Our competitors may announce new products, services or enhancements that better address changing industry standards on regenerative care. Any such increased competition could cause pricing pressure, loss of business or decreased customer purchases, any of which could adversely affect our business and operating results.
We believe that we have competitive strengths and protection via our depth of services and products that we offer in the regenerative medicine field, including, but without limitation to, cell therapy products, isolation systems, physician training, laboratory build outs, medical tourism, and more.
While there are particular or specific competitors in any one of these areas, no one is currently providing the full service one stop solution for such a complete range of offerings in this industry as we are.
Furthermore, we compete by becoming a resource, creating standards of practice, advancing the Stem Cell field in general, and by connecting associates and partners in many different aspects of the business.
Government Regulations
Although Stem Cell therapy is heavily regulated in the US by the Food and Drug Administration, Global Stem Cells group does not focus its business portfolio in US markets. To this end, we have suspended operations in the US. As such, we are not constrained by FDA regulatory jurisdictions. We now operate exclusively in countries where clear regulatory pathways to manufacturing and practice exist.
Marketing
Global Stem Cell Group uses its vast network of professionals in the regenerative and therapeutic industries to market and grow our business. Training seminars held on location in more than a dozen international locations have helped drive the attraction that is bringing new business to our group. The ISCCA is our professional association and is a global network of medical professionals that leverages these multinational relationships to build best practices and further our mission. Our physician training services educate and generate continued reoccurring demand for our solutions, services, and products.
The more we educate physicians about our products and services, the more physician referrals we have received. It has been a difficult task to introduce new methodologies to physicians with more traditional views, but word of mouth has played a crucial role in the growth of our company and our reputation in the industry. We believe our website will further expand our growth as new physicians have an easy-to-understand synopses of our how our products and services may assist with and benefit their patients. We believe that as our network of physicians widens, we will experience significant growth from repeat business from existing clients and with new business from patient referrals.
Employees
As of December 31, 2023, the Company had no full-time employees. All other workforces are contractors, advisors, consultants, and/or vendors.
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Corporate History
The Company was originally founded in 1999 as Spectrum Ventures LLC, a private company, registered in Tacoma, WA, for the purpose of developing, marketing and selling voice over IP products and services. In 2002, the Company changed its name to Nxtech Wireless Cable Systems, Inc. In August 2007, the Company changed its name to Oriens Travel & Hotel Management Corp. In November 2014, the Company changed its name to Pure Hospitality Solutions, Inc. During 2014, the Board of Directors of the Company deemed it in the best interests of the Company and its shareholders to switch directions and become involved in the business of numismatics, specifically the collection and ultimately the sale of coins, paper currency, bullion and medals. On November 21, 2016 the Company (formerly known as Pure Hospitality Solutions, Inc. a Nevada corporation) entered into an agreement with Meso Numismatics, Corp., a Florida corporation. The respective Boards of Directors of the Pure Hospitality Solutions, Inc. and Meso Numismatics, Corp., at that time, determined that it was advisable and to the advantage of and the best interests of Pure Hospitality Solutions, Inc. and its shareholders and Meso Numismatics, Corp. and its stockholders that Meso Numismatics, Corp. merge with and into Pure Hospitality Solutions, Inc. (the “Merger”). It was at that time, Mr. Melvin Pereira, our prior Chief Executive Officer, who controlled both, Pure Hospitality Solutions, Inc. and Meso Numismatics, Corp. that the Company acquired common control of Meso Numismatics, Corp. and the assets there held. At the completion of the Merger, Meso Numismatics Corp. ceased to exist. In September of 2018 the Company effected a name change and changed its name from Pure Hospitality Solutions, Inc. to Meso Numismatics, Inc.
On October 28, 2022, we entered into an Agreement of Conveyance, Transfer and Assignment of Subsidiary with our prior officer and director, Mr. Melvin Pereira, pursuant to which we agreed to sell Mr. Pereira 100% of our interest in Meso Numismatics Corp., a Florida corporation. As a result of this transaction, we are no longer engaged in the sale of coins, paper currency, bullion and medals and we have moved into what we believe is a more lucrative opportunity for our company, the operations of Global Stem Cell Group.
Additional Information
The public may read and copy any materials the Company files with the SEC in the SEC’s Public Reference Section, Room 1580, 100 F Street N.E., Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Section by calling the SEC at 1-800-SEC-0330. Additionally, the SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, which can be found at http://www.sec.gov.
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Item 1A. Risk Factors.
You should carefully consider the risks described below together with all of the other information included in this registration statement before making an investment decision with regard to our securities. The statements contained in or incorporated herein that are not historic facts are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by forward-looking statements. If any of the following risks actually occurs, our business, financial condition or results of operations could be harmed. In that case, you may lose all or part of your investment. In addition to other information in this registration statement and in other filings we make with the Securities and Exchange Commission, the following risk factors should be carefully considered in evaluating our business as they may have a significant impact on our business, operating results and financial condition. If any of the following risks actually occurs, our business, financial condition, results of operations and future prospects could be materially and adversely affected. Because of the following factors, as well as other variables affecting our operating results, past financial performance should not be considered as a reliable indicator of future performance and investors should not use historical trends to anticipate results or trends in future periods.
Risks Related to Macroeconomics, COVID-19 Restrictions and Other Conditions
OUR OPERATIONS AND PERFORMANCE DEPEND SIGNIFICANTLY ON GLOBAL AND REGIONAL ECONOMIC CONDITIONS AND ADVERSE ECONOMIC CONDITIONS CAN MATERIALLY ADVERSELY AFFECT OUR BUSINESS, RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
A deterioration in economic conditions and related drivers of global uncertainty and change, such as reduced business activity, high unemployment, rising interest rates, housing prices, and energy prices (including the price of gasoline), increased consumer indebtedness, lack of available credit, the rate of inflation, and perceptions of the economy, as well as other factors, such as terrorist attacks, protests, looting, and other forms of civil unrest, cyber-attacks and data breaches, public health emergencies (such as the COVID-19 pandemic and other epidemics), extreme weather conditions and climate change, significant changes in the political environment, political instability, armed conflict (such as the ongoing military conflict between Ukraine and Russia and the emerging military conflict in Israel and Gaza) and/or public policy, including increased state, local or federal taxation, could adversely affect our operating results and financial condition.
Major public health issues, including pandemics such as the COVID-19 pandemic, have adversely affected, and could in the future materially adversely affect, us due to their impact on the global economy and demand for our regenerative products; the imposition of protective public safety measures, such as shutdowns and restrictive health mandates; and disruptions in our operations, supply chain and sales and distribution channels, resulting in interruptions to our business and the supply of current products and offering of existing services, and delays in production ramps of new products and development of new services.
In addition to an adverse impact on demand for our regenerative products and services, uncertainty about, or a decline in, global or regional economic conditions can have a significant impact on our suppliers, contract manufacturers, logistics providers, distributors, and other channel partners, and developers. Potential outcomes include financial instability; inability to obtain credit to finance business operations; and insolvency.
As a result, our operating results may be impacted by the health of the global economy. Volatility and disruption in global capital and credit markets may lead to slowdowns or declines in client spending which could adversely affect our business and financial performance. Our business and financial performance, including new business bookings and collection of our accounts receivable, may be adversely affected by current and future economic conditions (including a reduction in the availability of credit, higher energy costs, rising interest rates, financial market volatility and lower than expected economic growth) that cause a slowdown or decline in client spending. Reduced purchases by our clients or changes in payment terms could adversely affect our revenue growth and cause a decrease in our cash flow from operations. Bankruptcies or similar events affecting clients may cause us to incur bad debt expense at levels higher than historically experienced. Further, volatility and disruption in global financial markets may also limit our ability to access the capital markets at a time when we would like, or need, to raise capital, which could have an impact on our ability to react to changing economic and business conditions. Accordingly, if global financial and economic volatility continues or worsens, our business, results of operations and financial condition could be materially and adversely affected.
Adverse economic conditions can also lead to increased credit and collectability risk on our trade receivables; the failure of derivative counterparties and other financial institutions; limitations on our ability to issue new debt; reduced liquidity; and declines in the fair values of our financial instruments. These and other impacts can materially adversely affect our business, results of operations, financial condition and stock price.
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A PANDEMIC, SUCH AS COVID-19, COULD HAVE A MATERIAL ADVERSE IMPACT ON FINANCIAL RESULTS AND BUSINESS OPERATIONS OF THE COMPANY.
A novel strain of coronavirus (COVID-19) was first identified in December 2019 and subsequently declared a global pandemic by the World Health Organization on March 11, 2020. As a result of the outbreak, many companies have experienced disruptions in their operations and in the markets served. The Company considered the impact of COVID-19 on the assumptions and estimates used and determined that there were no material adverse impacts on the Company’s results of operations and financial position as of and for the year ended December 31, 2022. The full extent of the future impacts of COVID-19 on the Company’s operations is uncertain. A prolonged outbreak could have a material adverse impact on financial results and business operations of the Company, including the timing and ability of the Company to collect accounts receivable and the ability of the Company to continue to provide high-quality services and equipment. The Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities at the date of issuance of these financial statements. These estimates may change as new events occur and additional information is obtained.
ALL OF REVENUE IS DERIVED FROM CUSTOMERS OUTSIDE THE UNITED STATES, AND WE MAY LOSE REVENUES AND MARKET SHARE DUE TO EXCHANGE RATE FLUCTUATIONS AND POLITICAL AND ECONOMIC CHANGES RELATED TO FOREIGN BUSINESS.
All of our revenue comes from customers outside of the United States. Any US company conducting foreign business is always subject to economic, political and regulatory uncertainties and risks that are unique to each area of the world. Fluctuations in exchange rates may also affect the prices that foreign customers are willing to pay, and may put us at a price disadvantage compared to other competitors. Potentially volatile shifts in exchange rates may negatively affect our financial position and results.
RISKS AND UNCERTAINTIES ASSOCIATED WITH OUR OPERATIONS OUTSIDE OF THE UNITED STATES MAY ADVERSELY AFFECT OUR RESULTS OF OPERATIONS, CASH FLOW, LIQUIDITY OR FINANCIAL CONDITION
These challenges include: (1) compliance with complex and changing laws, regulations and policies of governments that may impact our operations, such as foreign ownership restrictions, import and export controls, tariffs, and trade restrictions; (2) compliance with U.S. and foreign laws that affect the activities of companies abroad, such as anti-corruption laws, competition laws, currency regulations, and laws affecting dealings with certain nations; (3) the difficulties involved in managing an organization doing business in many different countries; (4) rapid changes in government policy, acts of terrorism, or the threat of international boycotts or U.S. anti-boycott legislation; and (5) currency exchange rate fluctuations.
Risks Related to Our Financial Condition
We have a limited operating history.
The Company was incorporated under the laws of the State of Nevada in 1999 but has only recently acquired Global Stem Cells Group Inc., under which it conducts its current operations. Accordingly, the Company has only a limited operating history with which you can evaluate its business and prospects. An investor in the Company must consider its business and prospects in light of the risks, uncertainties and difficulties frequently encountered by early-stage companies, including limited capital, delays in product development, government regulations, possible marketing and sales obstacles and delays, inability to gain customer and merchant acceptance or inability to achieve significant distribution of our products and services to customers. The Company cannot be certain that it will successfully address these risks. Its failure to address any of these risks could have a material adverse effect on its business.
THE REPORT OF OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM CONTAINS AN EXPLANATORY PARAGRAPH THAT EXPRESSES SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE AS A GOING CONCERN.
The report of our independent registered public accounting firm with respect to our financial statements as of December 31, 2023 and for the year then ended indicates that our financial statements have been prepared assuming that we will continue as a going concern. The report states that, the Company suffered a net loss from operations and has a net capital deficiency, which raises substantial doubt about its ability to continue as a going concern. Our plans in regard to these matters are described in Note 2 to our audited financial statements as of December 31, 2023 and 2022 and for the years then ended. If we are not able to continue as a going concern, investors could lose their investments.
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Our ability to generate the significant amount of cash needed to service our debt obligations and our ability to refinance all or a portion of our indebtedness or obtain additional financing depends on many factors, many of which may be beyond our control.
Our ability to make scheduled payments on, or to refinance our obligations under, our debt, will depend on our financial and operating performance, which, in turn, will be subject to prevailing economic and competitive conditions and to the financial and business factors, many of which may be beyond our control. We cannot guarantee that our business will generate sufficient cash flow from operations, that currently anticipated business opportunities will be realized on schedule or at all, or that future borrowings will be available to us in amounts sufficient to enable us to service our indebtedness and any amounts borrowed under future credit facilities, or to fund our other liquidity needs.
We will use cash to pay the principal and interest on our debt. These payments limit funds otherwise available for working capital, capital expenditures, acquisitions, collaborations and other purposes. As a result of these obligations, our current liabilities may exceed our current assets. We may need to take on additional debt as we expand our presence in the global stem cell industry, which could increase our ratio of debt to equity. The need to service our debt may limit funds available for other purposes and our inability to service debt in the future could lead to acceleration of our debt and foreclosure on assets.
We cannot guarantee that we will be able to refinance any of our indebtedness or obtain additional financing, particularly because of our anticipated high levels of indebtedness and the indebtedness incurrence restrictions imposed by the agreements governing our indebtedness, as well as prevailing market conditions. We may face substantial liquidity problems and might be required to dispose of material assets or operations to meet our indebtedness service and other obligations.
The lending documents restrict, and any agreements governing future indebtedness may restrict, our ability to dispose of assets and use the proceeds from any such dispositions. We cannot guarantee we will be able to consummate any asset sales, or if we do, what the timing of the sales will be or whether the proceeds that we realize will be adequate to meet indebtedness service obligations when due.
Risks Related to Our Business
The Operations and Commercialization of Stem Cell Therapies is an exciting, new, and integral part of the emerging Regenerative Medicine market, BUT The field remains in its infancy.
As with all new technologies, products, practices and solutions, there are inherit risks related to our industry and business.
The field of stem cell therapy is relatively new, and not yet widely adopted by the medical community, and because of that infancy, it may have an adverse effect on our ability to reach potential physicians that are skeptical of the benefits or have questions about the risks, and thus, we may run into resistance in the marketing of our products and services. Stem cell therapies may be susceptible to various risks, including side effects, unintended immune system responses, inadequate therapeutic efficacy, and lack of acceptance by physicians, hospital, and the patients themselves.
Our experience and others have shown that physicians are historically slow to adopt new treatment methods based on new technologies, like ours, when existing and trusted methods continue to be supported by established practitioners. Overcoming these obstacles often requires significant marketing expenditures, product performance, cost cutting and/or decreased pricing. We believe the skepticism to be a significant barrier as we attempt to gain market penetration with our products and services. Failure to achieve market acceptance of our products and services would have a material adverse effect on our financial condition.
Additionally, part of our success will depend on continuing to establish and maintain effective strategic partnerships and collaborations with our international partners, which may impose challenges, restrictions, and or financial impacts to our business.
As we apply our business strategy of establishing and maintaining strategic relationships, we believe this will allow us to expand and complement our products, training, support and commercialization capabilities. This we believe will allow us to reduce costs with greater economies of scale, and leverage a greater source of market intelligence, with crucial meta data gathered of Stem Cell Therapies applied to a full spectrum across global applications. Notwithstanding, there can be no assurances that we will favorably maintain all current or successfully add new relationships to successfully advance our business.
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Some of Our Potential Cell Therapy Products and Technologies Are In Early Stages Of Development.
The development of new cell therapy products is a highly risky undertaking, and there can be no assurance that any future research and development efforts we may undertake will be successful. Our potential products will require extensive additional research and development and perhaps regulatory approval before any commercial introduction. There can be no assurance that any future research, development and clinical trial efforts will result in viable products or meet efficacy standards.
WE COMPETE WITH A NUMBER OF COMPANIES IN OUR SPACE AND FACE INCREASED COMPETITION FROM SUCH COMPANIES.
In our global cell therapy operations, we face competitors in many different segments of our business models. We face intense competition from companies with much larger capital resources than us, and, as a result, we could struggle to attract customers and gain market share. Some of our existing or future competitors have greater financial resources and greater brand name recognition than we do and, as a result, may be better positioned to adapt to changes in the industry or the economy as a whole. We will strive to advance our products and technology in each of these sectors ahead of our competitors to gain market share. We also face intense competition in attracting and retaining qualified employees. Our ability to continue to compete effectively will depend upon our ability to attract new employees, retain and motivate our existing employees and to compensate employees competitively. We face significant competition in several aspects of our business, and such competition might increase, particularly in the market for regenerative therapies.
Our competitors may announce new products, services or enhancements that better address changing industry standards on regenerative care. Any such increased competition could cause pricing pressure, loss of business or decreased customer purchases, any of which could adversely affect our business and operating results.
We believe that we have competitive strengths and protection via our depth of services and products, and our continually expanding global footprint, that we offer in the regenerative medicine field, including, but without limitation to, cell therapy products, isolation systems, physician training, laboratory build outs, medical tourism, and more.
While there are particular or specific competitors in any one of these areas, no one is currently providing the full service one stop solution for such a complete range of offerings in this industry as we are.
Furthermore, we compete by becoming a resource, creating standards of practice, advancing the Stem Cell field in general, and by connecting associates and partners in many different aspects of the business.
We intend to continue strategic business acquisitions and other combinations, which are subject to inherent risks.
In order to expand our solutions, services, and grow our market and client base, we may continue to seek and complete strategic business acquisitions and other combinations that we believe are complementary to our business. Acquisitions have inherent risks which may have a material adverse effect on our business, financial condition, operating results or prospects, including, but not limited to: 1) failure to successfully integrate the business and financial operations, services, intellectual property, solutions or personnel of an acquired business and to maintain uniform standard controls, policies and procedures; 2) diversion of management’s attention from other business concerns; 3) entry into markets in which we have little or no direct prior experience; 4) failure to achieve projected synergies and performance targets; 5) loss of clients or key personnel; 6) incurrence of debt or assumption of known and unknown liabilities; 7) write-off of software development costs, goodwill, client lists and amortization of expenses related to intangible assets; 8) dilutive issuances of equity securities; and, 9) accounting deficiencies that could arise in connection with, or as a result of, the acquisition of an acquired company, including issues related to internal control over financial reporting and the time and cost associated with remedying such deficiencies. If we fail to successfully integrate acquired businesses or fail to implement our business strategies with respect to these acquisitions, we may not be able to achieve projected results or support the amount of consideration paid for such acquired businesses.
If we are unable to manage our growth in the new markets in which we offer solutions or services, our business and financial results could suffer.
Our future financial results will depend in part on our ability to profitably manage our business in the new markets that we enter. Difficulties in managing future growth in new markets could have a significant negative impact on our business, financial condition and results of operations.
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OUR BUSINESS WILL SUFFER IF OUR NETWORK SYSTEMS, OR OPEN-SOURCE PLATFORM FAILS OR BECOME UNAVAILABLE.
A reduction in the performance, reliability and availability of our network infrastructure would harm our ability to distribute our products to our users, as well as our reputation and ability to attract and retain customers. Our systems and operations could be damaged or interrupted by fire, flood, power loss, telecommunications failure, Internet breakdown, earthquake and similar events. Our systems could also be subject to viruses, break-ins, sabotage, acts of terrorism, acts of vandalism, hacking, cyber-terrorism and similar misconduct. We might not carry adequate business interruption insurance to compensate us for losses that may occur from a system outage. Any system error or failure that causes interruption in availability of our product or an increase in response time could result in a loss of potential customers, which could have a material adverse effect on our business, financial condition and results of operations. If we suffer sustained or repeated interruptions, then our products and services could be less attractive to our users and our business would be materially harmed.
WE MAY NOT BE ABLE TO IMPLEMENT OUR GROWTH AND MARKETING STRATEGY SUCCESSFULLY OR ON A TIMELY BASIS OR AT ALL.
Our future success depends, in large part, on our ability to implement our growth strategy of expanding distribution and sales of our product portfolio, attracting new consumers and introducing new product lines and product extensions.
Our sales and operating results will be adversely affected if we fail to implement our growth strategy or if we invest resources in a growth strategy that ultimately proves unsuccessful.
Risks Related to Legal Uncertainty
We may become subject to legal proceedings that could have a material adverse impact on our financial position and results of operations.
From time to time and in the ordinary course of our business, we may become involved in various legal proceedings. All such legal proceedings are inherently unpredictable and, regardless of the merits of the claims, litigation may be expensive, time-consuming and disruptive to our operations and distracting to management. If resolved against us, such legal proceedings could result in excessive verdicts, injunctive relief or other equitable relief that may affect how we operate our business. Similarly, if we settle such legal proceedings, it may affect how we operate our business. Future court decisions, alternative dispute resolution awards, business expansion or legislative activity may increase our exposure to litigation and regulatory investigations. In some cases, substantial noneconomic remedies or punitive damages may be sought. Although we maintain liability insurance coverage, there can be no assurance that such coverage will cover any particular verdict, judgment or settlement that may be entered against us, that such coverage will prove to be adequate or that such coverage will continue to remain available on acceptable terms, if at all. If we incur liability that exceeds our insurance coverage or that is not within the scope of the coverage in legal proceedings brought against us, it could have an adverse effect on our business, financial condition and results of operations.
| ● | Certification, licensing or regulatory requirements; | |
| ● | Unexpected changes in regulatory requirements; | |
| ● | Changes to or reduced protection of intellectual property rights in some countries |
DEFECTS IN THE PRODUCTS WE SELL OR FAILURES IN QUALITY CONTROL RELATED TO OUR DISTRIBUTION OF PRODUCTS COULD IMPAIR OUR ABILITY TO SELL OUR PRODUCTS OR COULD RESULT IN PRODUCT LIABILITY CLAIMS, LITIGATION AND OTHER SIGNIFICANT EVENTS INVOLVING SUBSTANTIAL COSTS.
Detection of any significant defects in our regenerative medicine products that we sell or failure in our quality control procedures or the quality control procedures of our suppliers may result in, among other things, delay in time-to-market, loss of sales and market acceptance of our products, diversion of development resources, injury to our reputation and restrictions imposed by governmental agencies. The costs we may incur in correcting any product defects may be substantial and we may not be able to identify adequate remedies, if required. Additionally, errors, defects or other performance problems could result in financial or other damages to our customers, which could result in litigation. Product liability litigation, even if we prevail and/or our suppliers, would be time consuming and costly to defend, and if we and/or our product suppliers do not prevail, could result in the imposition of a damages award. We presently do not maintain product liability insurance and we are therefore exposed to claims without the benefit of insurance.
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If we should in the future become required to obtain regulatory approval to market and sell our pRODUCTS AND services we will not be able to generate any revenues until such approval is received.
The medical industry is subject to stringent regulation by a wide range of authorities. Although Stem Cell therapy is heavily regulated in the US by the Food and Drug Administration, we do not focus our business portfolio in U.S. markets. To this end, we have suspended operations in the U.S. As such, we are not constrained by FDA regulatory jurisdictions. We now operate exclusively in countries where clear regulatory pathways to manufacturing and practice exist.
However, while we are not presently required to obtain regulatory approval in regulated markets, such as the U.S., to create, market and sell our products and services we cannot predict whether regulatory clearance will be required in the future and, if so, whether such clearance will at such time be obtained, whether for the products and services that we have commercialized or may attempt to develop. Should such regulatory approval in the future be required, our products and services may be suspended or may not be able to be marketed and sold until we have completed the regulatory clearance process as and if implemented by the FDA or similar foreign regulatory entities. Satisfaction of regulatory requirements typically takes many years, is dependent upon the type, complexity and novelty of the product or service and would require the expenditure of substantial resources.
If regulatory clearance of products and services is granted, this clearance may be limited to those particular states and conditions for which the products and services are demonstrated to be safe and effective, which would limit our ability to generate revenue.
We cannot ensure that any products and services developed by us will meet all of the applicable regulatory requirements needed to receive marketing clearance. Failure to obtain regulatory approval will prevent commercialization of our products and services where such clearance is necessary. There can be no assurance we will obtain regulatory approval of our products and services that may require it.
We may be unable to protect our intellectual property from infringement by third parties, and third parties may claim that we are infringing on their intellectual property, either of which could materially and adversely affect us.
We intend to rely on patent protection, trade secrets, technical know-how and continuing technological innovation to protect our intellectual property, and we expect to require any employees, consultants and advisors that we may hire or engage in the future to execute confidentiality and assignment of inventions agreements in connection with their employment, consulting or advisory relationships. There can be no assurance, however, that these agreements will not be breached or that we will have adequate remedies for any such breach.
Despite our efforts to protect our intellectual property, third parties may infringe or misappropriate our intellectual property or may develop intellectual property competitive with ours. Our competitors may independently develop similar technology or otherwise duplicate our products and services. As a result, we may have to litigate to enforce and protect our intellectual property rights to determine their scope, validity or enforceability. Intellectual property litigation is particularly expensive, time-consuming, diverts the attention of management and technical personnel and could result in substantial cost and uncertainty regarding our future viability. The loss of intellectual property protection or the inability to secure or enforce intellectual property protection would limit our ability to produce and/or market our products and services in the future and would likely have an adverse effect on any revenues we may in the future be able to generate by the sale or license of such intellectual property.
We may be subject to costly litigation in the event our future services or technology infringe upon another party’s proprietary rights. Third parties may have, or may eventually be issued, patents that would be infringed by our technology. Any of these third parties could make a claim of infringement against us with respect to our technology. We may also be subject to claims by third parties for breach of copyright, trademark or license usage rights. Any such claims and any resulting litigation could subject us to significant liability for damages or injunctions precluding us from utilizing our technology or services or marketing or selling any products or services under the same. An adverse determination in any litigation of this type could require us to design around a third party’s patent, license alternative technology from another party or otherwise result in limitations in our ability to use the intellectual property subject to such claims.
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We may be Exposed to Liabilities under the Foreign Corrupt Practices Act and any Determination that we Violated these Laws could have a Material Adverse Effect on our Business.
We are subject to the Foreign Corrupt Practices Act (FCPA), and other laws that prohibit improper payments or offers of payments to foreign governments and their officials and political parties by U.S. persons and issuers as defined by the statute, for the purpose of obtaining or retaining business. It is our policy to implement safeguards to discourage these practices by our employees. However, our existing safeguards and any future improvements may prove to be less than effective and our employees, consultants, sales agents or distributors may engage in conduct for which we might be held responsible. Violations of the FCPA may result in severe criminal or civil sanctions and we may be subject to other liabilities, which could negatively affect our business, operating results and financial condition.
THERE MAY BE DEFICIENCIES WITH OUR INTERNAL CONTROLS THAT REQUIRE IMPROVEMENTS, AND IF WE ARE UNABLE TO ADEQUATELY EVALUATE INTERNAL CONTROLS, WE MAY BE SUBJECT TO SANCTIONS BY THE SEC.
We are exposed to potential risks from legislation requiring companies to evaluate internal controls under Section 404a of the Sarbanes-Oxley Act of 2002. As a smaller reporting company and emerging growth company, we will not be required to provide a report on the effectiveness of our internal controls over financial reporting until our second annual report, and we will be exempt from the auditor attestation requirements concerning any such report so long as we are an emerging growth company or a smaller reporting company. We have not yet evaluated whether our internal control procedures are effective and therefore there is a greater likelihood of undiscovered errors in our internal controls or reported financial statements as compared to issuers that have conducted such evaluations. If we are not able to meet the requirements of Section 404a in a timely manner or with adequate compliance, we might be subject to sanctions or investigation by regulatory authorities, such as the SEC.
Risks Related to Our Management and Control Persons
WE RELY HEAVILY ON OUR MANAGEMENT, AND THE LOSS OF THEIR SERVICES COULD ADVERSELY AFFECT OUR BUSINESS.
Our success is highly dependent upon the continued services of our Chief Executive Officer, David Christensen. The loss of Mr. Christensen’s services would have a material adverse effect on the Company and its business operations.
The market for skilled employees is highly competitive, especially for employees in our industry. Although we expect that our planned compensation programs will be intended to attract and retain the employees required for us to be successful, there can be no assurance that we will be able to retain the services of all our key employees or a sufficient number to execute our plans, nor can there be any assurance we will be able to continue to attract new employees as required.
OUR LACK OF ADEQUATE D&O INSURANCE MAY ALSO MAKE IT DIFFICULT FOR US TO RETAIN AND ATTRACT TALENTED AND SKILLED DIRECTORS AND OFFICERS.
In the future we may be subject to additional litigation, including potential class action and stockholder derivative actions. Risks associated with legal liability are difficult to assess and quantify, and their existence and magnitude can remain unknown for significant periods of time. To date, we have not obtained directors and officers liability (“D&O”) insurance. Without adequate D&O insurance, the amounts we would pay to indemnify our officers and directors should they be subject to legal action based on their service to the Company could have a material adverse effect on our financial condition, results of operations and liquidity. Furthermore, our lack of adequate D&O insurance may make it difficult for us to retain and attract talented and skilled directors and officers, which could adversely affect our business.
OUR SERIES AA HOLDERS POSSESS SIGNIFICANT VOTING POWER WITH RESPECT TO OUR VOTING STOCK, WHICH WILL LIMIT YOUR INFLUENCE ON CORPORATE MATTERS.
There are currently 50,000 shares of Series AA Preferred Stock held by David Christensen, the Company’s CEO. As a result of the issuance of 1,000,000 shares of Series AA Preferred Stock to Benito Novas, a change of control has occurred. The amended certificate of designation for the Series AA Preferred Stock provides that all of the holders of the Series AA Preferred Stock together, voting separately as a class, shall have an aggregate vote equal to sixty-seven (67%) percent of the total vote on all matters submitted to the stockholders. The amended certificate of designation for the Series AA Preferred Stock further provides that a unanimous consent of the holders of Series AA Preferred Stock is necessary for, among other things, a change in control of the Company, requiring the votes of both Messrs. Christensen and Novas.
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The holder of the Series AA Super Voting Preferred Stock shall have an aggregate vote equal to sixty-seven (67%) percent of the total vote on all matters submitted to the stockholders that each stockholder of the Corporation’s Common Stock is entitled to vote at each meeting of stockholders of the Corporation (and written actions of stockholders in lieu of meetings) with respect to any and all matters presented to the stockholders of the Corporation for their action and consideration.
As a result, our insiders have the ability to significantly influence our management and affairs through the election and removal of our Board and all other matters requiring stockholder approval, including any future merger, consolidation or sale of all or substantially all of our assets. This concentrated voting power could discourage others from initiating any potential merger, takeover or other change-of-control transaction that may otherwise be beneficial to our stockholders. Furthermore, this concentrated control will limit the practical effect of your influence over our business and affairs, through any stockholder vote or otherwise. Any of these effects could depress the price of our common stock.
THE ELIMINATION OF MONETARY LIABILITY AGAINST OUR DIRECTORS, OFFICERS AND EMPLOYEES UNDER OUR ARTICLES OF INCORPORATION AND THE EXISTENCE OF INDEMNIFICATION RIGHTS TO OUR DIRECTORS, OFFICERS AND EMPLOYEES MAY RESULT IN SUBSTANTIAL EXPENDITURES BY OUR COMPANY AND MAY DISCOURAGE LAWSUITS AGAINST OUR DIRECTORS, OFFICERS AND EMPLOYEES.
Our Articles of Incorporation contain provisions that eliminate the liability of our directors for monetary damages to our Company and shareholders. Our Amended and Restated Bylaws also require us to indemnify our officers and directors. We may also have contractual indemnification obligations under our agreements with our directors, officers and employees. The foregoing indemnification obligations could result in our company incurring substantial expenditures to cover the cost of settlement or damage awards against directors, officers and employees that we may be unable to recoup. These provisions and resulting costs may also discourage our company from bringing a lawsuit against directors, officers and employees for breaches of their fiduciary duties, and may similarly discourage the filing of derivative litigation by our shareholders against our directors, officers and employees even though such actions, if successful, might otherwise benefit our Company and shareholders.
OUR OFFICER AND DIRECTORS HAS LIMITED EXPERIENCE MANAGING A PUBLIC COMPANY.
Our officer and director has limited experience managing a public company. Consequently, we may not be able to raise any funds or run our public company successfully. Our executive officer and director’s lack of experience of managing a public company could cause you to lose some or all of your investment.
Risks Related to Our Common Stock
OUR STOCK PRICE MAY BE VOLATILE OR MAY DECLINE REGARDLESS OF OUR OPERATING PERFORMANCE, AND YOU MAY LOSE PART OR ALL OF YOUR INVESTMENT.
The market price of our common stock may fluctuate widely in response to various factors, some of which are beyond our control, including:
| ● | market conditions or trends in the dietary supplement industry or in the economy as a whole; |
| ● | actions by competitors; |
| ● | actual or anticipated growth rates relative to our competitors; |
| ● | the public’s response to press releases or other public announcements by us or third parties, including our filings with the SEC; |
| ● | economic, legal and regulatory factors unrelated to our performance; |
| ● | any future guidance we may provide to the public, any changes in such guidance or any difference between our guidance and actual results; |
| ● | changes in financial estimates or recommendations by any securities analysts who follow our common stock; |
| ● | speculation by the press or investment community regarding our business; |
| ● | litigation; |
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| ● | changes in key personnel; and |
| ● | future sales of our common stock by our officers, directors and significant shareholders. |
In addition, the stock markets, including the over-the-counter markets where we are quoted, have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. These broad market fluctuations may materially affect our stock price, regardless of our operating results. Furthermore, the market for our common stock historically has been limited and we cannot guarantee that a larger market will ever be developed or maintained. The price at which investors purchase shares of our common stock may not be indicative of the price that will prevail in the trading market. Market fluctuations and volatility, as well as general economic, market and political conditions, could reduce our market price. As a result, these factors may make it more difficult or impossible for you to sell our common stock for a positive return on your investment. In the past, shareholders have instituted securities class action litigation following periods of market volatility. If we were involved in securities litigation, we could incur substantial costs and our resources and the attention of management could be diverted from our business.
FUTURE SALES OF SHARES OF OUR COMMON STOCK, OR THE PERCEPTION IN THE PUBLIC MARKETS THAT THESE SALES MAY OCCUR, MAY DEPRESS OUR STOCK PRICE.
The market price of our common stock could decline significantly as a result of sales of a large number of shares of our common stock. In addition, if our significant shareholders sell a large number of shares, or if we issue a large number of shares, the market price of our stock could decline. Any issuance of additional common stock by us in the future, or warrants or options to purchase our common stock, if exercised, would result in dilution to our existing shareholders. Such issuances could be made at a price that reflects a discount or a premium to the then-current trading price of our common stock. Moreover, the perception in the public market that shareholders might sell shares of our stock or that we could make a significant issuance of additional common stock in the future could depress the market for our shares. These sales, or the perception that these sales might occur, could depress the market price of our common stock or make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.
We have issued shares of common stock, options and convertible notes which are convertible into shares of our common stock in connection with our private placements and certain employment, director and consultant agreements. In addition, we issued shares of our common stock and convertible notes which are convertible into shares of our common stock, in financing transactions and pursuant to employment agreements that are deemed to be “restricted securities,” as that term is defined in Rule 144 promulgated under the Securities Act. From time to time, certain of our shareholders may be eligible to sell all or some of their restricted shares of common stock by means of ordinary brokerage transactions in the open market pursuant to Rule 144, subject to certain limitations. The resale pursuant to Rule 144 of shares acquired from us in private transactions could cause our stock price to decline significantly.
“PENNY STOCK” RULES MAY MAKE BUYING OR SELLING OUR COMMON STOCK DIFFICULT.
If the market price for our common stock is below $5.00 per share, trading in our common stock may be subject to the “penny stock” rules. The SEC has adopted regulations that generally define a penny stock to be any equity security that has a market price of less than $5.00 per share, subject to certain exceptions. These rules would require that any broker-dealer that would recommend our common stock to persons other than prior customers and accredited investors, must, prior to the sale, make a special written suitability determination for the purchaser and receive the purchaser’s written agreement to execute the transaction. Unless an exception is available, the regulations would require the delivery, prior to any transaction involving a penny stock, of a disclosure schedule explaining the penny stock market and the risks associated with trading in the penny stock market. In addition, broker-dealers must disclose commissions payable to both the broker-dealer and the registered representative and current quotations for the securities they offer. The additional burdens imposed upon broker-dealers by such requirements may discourage broker-dealers from effecting transactions in our common stock, which could severely limit the market price and liquidity of our common stock.
POTENTIAL FUTURE FINANCINGS MAY DILUTE THE HOLDINGS OF OUR CURRENT SHAREHOLDERS.
In order to provide capital for the operation of our business, in the future we may enter into financing arrangements. These arrangements may involve the issuance of new shares of common stock, preferred stock that is convertible into common stock, debt securities that are convertible into common stock or warrants for the purchase of common stock. Any of these items could result in a material increase in the number of shares of common stock outstanding, which would in turn result in a dilution of the ownership interests of existing common shareholders. In addition, these new securities could contain provisions, such as priorities on distributions and voting rights, which could affect the value of our existing common stock.
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WE CURRENTLY DO NOT INTEND TO PAY DIVIDENDS ON OUR COMMON STOCK. AS A RESULT, YOUR ONLY OPPORTUNITY TO ACHIEVE A RETURN ON YOUR INVESTMENT IS IF THE PRICE OF OUR COMMON STOCK APPRECIATES.
We currently do not expect to declare or pay dividends on our common stock. In addition, in the future we may enter into agreements that prohibit or restrict our ability to declare or pay dividends on our common stock. As a result, your only opportunity to achieve a return on your investment will be if the market price of our common stock appreciates and you sell your shares at a profit.
YOU MAY EXPERIENCE DILUTION OF YOUR OWNERSHIP INTEREST DUE TO THE FUTURE ISSUANCE OF ADDITIONAL SHARES OF OUR COMMON STOCK.
We are in a capital intensive business and we do not have sufficient funds to finance the growth of or to support our projected capital expenditures. As a result, we will require additional funds from future equity or debt financings, including tax equity financing transactions or sales of preferred shares or convertible debt, to complete the development of new projects and pay the general and administrative costs of our business. We may in the future issue our previously authorized and unissued securities, resulting in the dilution of the ownership interests of holders of our common stock. We are currently authorized to issue 6,500,000,000 shares of common stock. The potential issuance of such additional shares of common stock or preferred stock or convertible debt may create downward pressure on the trading price of our common stock. We may also issue additional shares of common stock or other securities that are convertible into or exercisable for common stock in future public offerings or private placements for capital raising purposes or for other business purposes. The future issuance of a substantial number of common shares into the public market, or the perception that such issuance could occur, could adversely affect the prevailing market price of our common shares. A decline in the price of our common shares could make it more difficult to raise funds through future offerings of our common shares or securities convertible into common shares.
WE HAVE A SIGNIFICANT NUMBER OF SHARES OF OUR COMMON STOCK ISSUABLE UPON CONVERSION OF CERTAIN OUTSTANDING CONVERTIBLE NOTES, AND THE ISSUANCE OF SUCH SHARES UPON EXERCISE OR CONVERSION WILL HAVE A SIGNIFICANT DILUTIVE IMPACT ON OUR STOCKHOLDERS. SALES OF A SUBSTANTIAL NUMBER OF SHARES OF OUR COMMON STOCK FOLLOWING THE EXPIRATION OF LOCK-UPS MAY ADVERSELY AFFECT THE MARKET PRICE OF OUR COMMON STOCK AND THE ISSUANCE OF ADDITIONAL SHARES WILL DILUTE ALL OTHER STOCKHOLDERS.
As of December 31, 2023, there were 87,500,000 shares of Common Stock issuable upon the exercise of options and warrants at weighted average exercise price of $0.091, 293,973 shares from the conversion of outstanding convertible notes and 39,090,908 shares from the conversion of outstanding convertible preferred stock.
In addition, our articles of incorporation, as amended, permits the issuance of up to 6,500,000,000 shares of Common Stock. Thus, we have the ability to issue substantial amounts of Common Stock in the future, which would dilute the percentage ownership held by stockholders.
FUTURE ISSUANCE OF OUR COMMON STOCK, PREFERRED STOCK, OPTIONS AND WARRANTS COULD DILUTE THE INTERESTS OF EXISTING STOCKHOLDERS.
We may issue additional shares of our common stock, preferred stock, options and warrants in the future. The issuance of a substantial amount of common stock, options and warrants could have the effect of substantially diluting the interests of our current stockholders. In addition, the sale of a substantial amount of common stock or preferred stock in the public market, or the exercise of a substantial number of warrants and options either in the initial issuance or in a subsequent resale by the target company in an acquisition which received such common stock as consideration or by investors who acquired such common stock in a private placement could have an adverse effect on the market price of our common stock.
OUR ARTICLES OF INCORPORATION GRANTS OUR BOARD THE POWER TO ISSUE ADDITIONAL SHARES OF COMMON AND PREFERRED SHARES AND TO DESIGNATE OTHER CLASSES OF PREFERRED SHARES, ALL WITHOUT STOCKHOLDER APPROVAL.
As of December 31, 2023, our authorized capital consists of 6,500,000,000 shares of common stock and 11,000,000 shares are authorized as preferred stock, both with a par value of $0.001 per share. Our Board, without any action by our stockholders, may designate and issue shares of preferred stock in such series as it deems appropriate and establish the rights, preferences and privileges of such shares, including dividends, liquidation and voting rights, provided it is consistent with Delaware law.
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The rights of holders of our preferred stock that may be issued could be superior to the rights of holders of our shares of common stock. The designation and issuance of shares of capital stock having preferential rights could adversely affect other rights appurtenant to shares of our common stock. Furthermore, any issuances of additional stock (common or preferred) will dilute the percentage of ownership interest of then-current holders of our capital stock and may dilute our book value per share.
BECAUSE THE COMPANY IS A “SMALLER REPORTING COMPANY,” WE MAY TAKE ADVANTAGE OF CERTAIN SCALED DISCLOSURES AVAILABLE TO US, RESULTING IN HOLDERS OF OUR SECURITIES RECEIVING LESS COMPANY INFORMATION THAN THEY WOULD RECEIVE FROM A PUBLIC COMPANY THAT IS NOT A SMALLER REPORTING COMPANY.
We are a “smaller reporting company” as defined in the Exchange Act. As a smaller reporting company, we may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as (i) our voting and non-voting common stock held by non-affiliates is less than $250 million measured on the last business day of our second fiscal quarter, or (ii) our annual revenue is less than $100 million during the most recently completed fiscal year and our voting and non-voting common stock held by non-affiliates is less than $700 million measured on the last business day of our second fiscal quarter. To the extent we take advantage of any reduced disclosure obligations, it may make it harder for investors to analyze the Company’s results of operations and financial prospectus in comparison with other public companies.
BECAUSE WE ARE A SMALL COMPANY WITH A LIMITED OPERATING HISTORY, HOLDERS OF COMMON STOCK MAY FIND IT DIFFICULT TO SELL THEIR STOCK IN THE PUBLIC MARKETS.
The number of persons interested in purchasing our common stock at any given time may be relatively small. This situation is attributable to a number of factors. One factor is that we are a small company that is still relatively unknown to stock analysts, stock brokers, institutional investors, and others in the investment community that generate or influence sales volume. Another factor is that, even if the Company came to the attention of these persons, they tend to be risk-averse and would likely be reluctant to follow an unproven company such as ours. Furthermore, many brokerage firms may not be willing to effect transactions in our securities, including our common stock. As a consequence, there may be periods when trading activity in our common stock is minimal or even non-existent, as compared to trading activity in the securities of a seasoned issuer with a large and steady volume of trading activity. We cannot give you any assurance that an active public trading market for our common stock or other securities will develop or be sustained, or that, if developed, the trading levels will be sustained.
OUR COMMON STOCK IS QUOTED THROUGH THE OTC MARKETS, WHICH MAY HAVE AN UNFAVORABLE IMPACT ON OUR STOCK PRICE AND LIQUIDITY.
The Company’s common stock is quoted on the OTC Markets, which is a significantly more limited market than the New York Stock Exchange or NASDAQ. The trading volume may be limited by the fact that many major institutional investment funds, including mutual funds, follow a policy of not investing in OTC Markets stocks and certain major brokerage firms restrict their brokers from recommending OTC Markets stocks because they are considered speculative and volatile.
The trading volume of the Company’s common stock has been and may continue to be limited and sporadic. As a result, the quoted price for the Company’s common stock on the OTC Markets may not necessarily be a reliable indicator of its fair market value.
Additionally, the securities of small capitalization companies may trade less frequently and in more limited volume than those of more established companies. The market for small capitalization companies is generally volatile, with wide price fluctuations not necessarily related to the operating performance of such companies.
WE MAY SEEK TO RAISE ADDITIONAL FUNDS, FINANCE ACQUISITIONS OR DEVELOP STRATEGIC RELATIONSHIPS BY ISSUING CAPITAL STOCK.
We may finance our operations and develop strategic relationships by issuing equity or debt securities, which could significantly reduce the percentage ownership of our existing stockholders. Furthermore, any newly issued securities could have rights, preferences and privileges senior to those of our existing stock. Moreover, any issuances by us of equity securities may be at or below the prevailing market price of our stock and in any event may have a dilutive impact on your ownership interest, which could cause the market price of our stock to decline.
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ITEM 1B. UNRESOLVED STAFF COMMENTS
This information is not required for smaller reporting companies.
ITEM 1C. CYBERSECURITY
We rely on our information technology to operate our business. As such, we have policies and processes designed to protect our information technology systems, some of which are managed by third parties, and resolve issues in a timely manner in the event of a cybersecurity threat or incident.
We have designed our business applications and hosting services to minimize the impact that cybersecurity incidents could have on our business and have identified back-up systems where appropriate. We seek to further mitigate cybersecurity risks through a combination of monitoring and detection activities, use of anti-malware applications, employee training, quality audits and communication and reporting structures, among other processes. We engage a third-party consultant to assist us with our cybersecurity risk management framework, including the monitoring and detection of cybersecurity threats and responding to any cybersecurity threats or incidents. Our third-party consultant team is managed by our Chief Financial Officer who reports to the Audit Committee at the board-level, as appropriate.
As of December 31, 2023, we have not identified an indication of a cybersecurity incident that would have a material impact on our business and consolidated financial statements.
ITEM 2. PROPERTIES
We maintain our current principal office at 433 Plaza Real Suite 275 Boca Raton, Florida 33432. Our phone number is (800) 956-3935.
Global Stem Cell Group, Inc. entered into the Cancun lease with HELLIMEX, S.A. DE CV beginning January 16 2022 and ending on January 15, 2024. The property is located in the Tulum Trade Center, consisting of 1,647 square feet with a monthly rent of $2,714 and security deposit of $5,588. In January 2022, the Company began the buildout of the clinic and order equipment. The Cancun facility was to be inaugurated in May 2022 is accredited both by the Mexican General Health Council and Cofepris (Mexican FDA).
Due to the expansion of the Cancun Clinic, an additional 1,216 square feet Global Stem Cell Group, Inc. entered into a new Cancun lease with RIVIERA MAYA, S.A. DE C.V beginning January 16, 2024 and ending on January 15, 2026.
ITEM 3. LEGAL PROCEEDINGS
To the Company’s knowledge, there is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our Company or any of our subsidiaries, threatened against or affecting our Company, our common stock, any of our subsidiaries or of our Company’s or our Company’s subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
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PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
Market Information.
Our common stock is qualified for quotation on the OTC Markets-OTCPink under the symbol “MSSV” and has been quoted on the OTCPINK since October 16, 2018. There currently is no liquid trading market for our common stock. There can be no assurance that a significant active trading market in our common stock will develop, or if such a market develops, that it will be sustained.
Penny Stock
The Securities Exchange Commission has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the Commission, that: (a) contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading;(b) contains a description of the broker’s or dealer’s duties to the customer and of the rights and remedies available to the customer with respect to a violation to such duties or other requirements of Securities’ laws; (c) contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price;(d) contains a toll-free telephone number for inquiries on disciplinary actions;(e) defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and;(f) contains such other information and is in such form, including language, type, size and format, as the Commission shall require by rule or regulation.
The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with; (a) bid and offer quotations for the penny stock;(b) the compensation of the broker-dealer and its salesperson in the transaction;(c) the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and (d) a monthly account statements showing the market value of each penny stock held in the customer’s account.
In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitability statement.
These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our stock if it becomes subject to these penny stock rules. Therefore, because our common stock is subject to the penny stock rules, stockholders may have difficulty selling those securities.
Holders
As of March 28, 2024, we had 142 shareholders of common stock per transfer agent’s shareholder list.
Dividends
The Company has not paid any cash dividends to date and does not anticipate or contemplate paying any dividends in the foreseeable future. It is the present intention of management to utilize all available funds for the growth of the Registrant’s business.
Equity Compensation Plan Information
The Company does not currently have an equity compensation plan in place.
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Recent Sales of Unregistered Securities
On February 24, 2021, the Company issued 36,232 shares of common stock for consulting services in the amount of $10,000.
On April 16, 2021, the Company issued 33,772 shares of common stock for consulting services in the amount of $10,000.
On June 28, 2021, the Company issued 1,092,866 shares of common stock as settlement of the lawsuit with Joseph Canouse, in the amount of $213,109.
On August 18, 2021, Meso Numismatics, Inc. completed its acquisition of Global Stem Cells Group Inc., through a Stock Purchase Agreement acquiring all the outstanding capital stock of Global Stem Cells Group Inc and issued a total of 1,000,000 shares of Series AA Preferred Stock and, 8,974 shares of Series DD Preferred Stock to Benito Novas.
On August 18, 2021, in consideration of mutual covenants set forth in the Professional Service Consulting Agreement, Dave Christensen, was granted 896 shares of Series DD Preferred Stock as compensation. An amount of 448 shares were issued on August 18, 2021 and the remaining 448 were issued February 18, 2022.
On December 23, 2021, the Company issued 52,659 shares of common stock for consulting services which were valued in the amount of $10,000.
During the year ended December 31, 2021, the Company issued warrants to purchase 87,500,000 shares of common stock, at weighted average exercise prices of $0.091 per share. These warrants expire three years from issuance date.
On March 23, 2022, the Company issued 76,278 shares of common stock for consulting services which were valued in the amount of $10,000.
On May 5, 2022, the Company issued 89,485 shares of common stock for consulting services which were valued in the amount of $10,000.
On November 30, 2022, the Company issued 193,050 shares of common stock for consulting services which were valued in the amount of $10,000.
On or about December 17, 2023, the Company issued 50,000 shares of common stock as commitment shares under an Equity Financing Agreement.
The offers, sales, and issuances of the securities described above were deemed to be exempt from registration under the Securities Act in reliance on Section 4(a)(2) of the Securities Act or Regulation D promulgated thereunder as transactions by an issuer not involving a public offering. The recipients of securities in each of these transactions acquired the securities for investment only and not with a view to or for sale in connection with any distribution thereof and appropriate legends were affixed to the securities issued in these transactions. Each of the recipients of securities in these transactions was an accredited or sophisticated person and had adequate access, through employment, business or other relationships, to information about us.
ITEM 6. [RESERVED]
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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
General
The following is a discussion by management of its view of the Company’s business, financial condition, and corporate performance for the past year. The purpose of this information is to give management’s recap of the past year, and to give an understanding of management’s current outlook for the near future. This section is meant to be read in conjunction with the Financial Statements of this Annual Report on Form 10-K.
Results of Operations
Below is a summary of the results of operations for the years ended December 31, 2023 and 2022.
| For the Years Ended December 31, | ||||||||||||||||
| 2023 | 2022 | $ Change | % Change | |||||||||||||
| Revenue | $ | 2,409,953 | $ | 1,530,223 | $ | 879,730 | 57.49 | % | ||||||||
| Cost of revenue | 734,285 | 653,256 | 81,029 | 12.40 | % | |||||||||||
| Gross profit | 1,675,668 | 876,967 | 798,701 | 91.08 | % | |||||||||||
| Operating expenses | ||||||||||||||||
| Advertising and marketing | 476,989 | 317,796 | 159,193 | 50.09 | % | |||||||||||
| Professional fees | 752,277 | 886,651 | (134,374 | ) | -15.16 | % | ||||||||||
| Officer compensation | 90,000 | 90,000 | - | 0.00 | % | |||||||||||
| Depreciation and amortization expense | 310,102 | 152,739 | 157,363 | 103.03 | % | |||||||||||
| Investor relations | 9,000 | 190,382 | (181,382 | ) | -95.27 | % | ||||||||||
| General and administrative | 752,527 | 424,258 | 328,269 | 77.37 | % | |||||||||||
| Total operating expenses | 2,390,894 | 2,061,826 | 329,068 | 15.96 | % | |||||||||||
| Other income (expense) | ||||||||||||||||
| Interest expense | (6,491,538 | ) | (4,403,774 | ) | (2,087,764 | ) | 47.41 | % | ||||||||
| Gain on derivative financial instruments | 4,798 | 13,498 | (8,700 | ) | -64.45 | % | ||||||||||
| Gain on settlement of debt | 2,463 | - | 2,463 | 0.00 | % | |||||||||||
| Gain on extinguishment of debt | 1,511,297 | - | 1,511,297 | 0.00 | % | |||||||||||
| Impairment of goodwill | (4,125,460 | ) | - | (4,125,460 | ) | 0.00 | % | |||||||||
| Loss from continuing operations | (9,813,666 | ) | (5,575,135 | ) | (4,238,531 | ) | 58.07 | % | ||||||||
| Discontinued operations: | ||||||||||||||||
| Gain on sale of discontinued operations | - | 68,313 | (68,313 | ) | -100.00 | % | ||||||||||
| Gain from discontinued operations | - | 68,313 | (68,313 | ) | -100.00 | % | ||||||||||
| Net loss | $ | (9,813,666 | ) | $ | (5,506,822 | ) | $ | (4,306,844 | ) | 78.211 | % | |||||
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Revenue
Revenue increased by 57.49% in the amount of $879,730 for the year ended December 31, 2023, compared to the same period in 2022. We experienced an increase in all but one of our product revenue categories. The increase in revenue was a result of marketing and sales efforts to increase brand recognition and exposure in the industry. We experienced more lead generation in 2023 increasing equipment, products, and training sales in regions like Southeast Asia and the Middle East. The opening of the Cancun facility in the second half of 2022 also increased sales by provided a facility for physicians to come for training and preform patient procedures. Additional, Global Stem Cells Group, like almost everyone else in the world, was severely affected by the covid 19 pandemic during 2021 and the first six months of 2022, restrictions our international travel along with in person meetings limited our training of new customers along with selling them products and equipment which adversely affecting our results of operations.
We expect that our revenues will increase in future quarters as a result of our ongoing marketing and brand awareness campaigns, training seminars, lectures and other efforts we engage in that expand our presence in the industry and provide us more opportunities to sell our products.
The following table presents the Company’s revenue by product category for the years ended December 31, 2023 and 2022:
| For the Years Ended December 31, | ||||||||
| 2023 | 2022 | |||||||
| Training | $ | 599,425 | $ | 279,404 | ||||
| Product supplies | 1,329,159 | 866,104 | ||||||
| Equipment | 162,370 | 163,400 | ||||||
| Patient procedures | 318,999 | 221,255 | ||||||
| Total revenue | $ | 2,409,953 | $ | 1,530,223 | ||||
Operating expenses
Operating expenses increased by 15.90% in the amount of $329,068 for the year ended December 31, 2023, compared to the year ended 2022. Listed below are the major changes to operating expenses:
Advertising and marketing fees increased by $159,193 for the year ended December 31, 2023, compared to the year ended 2022, primarily due to an increase in advertising by Global Stem Cells Group.
Professional fees decreased by $134,374 for the year ended December 31, 2023, compared to the year ended 2022, primarily due to audit fees.
Depreciation and amortization increased by $157,363 for the year ended December 31, 2023, compared to the year ended 2022, primarily due to completion of the Cancun facility in May 2022.
Investor relations decreased by $181,382 for the year ended December 31, 2023, compared to the year ended 2022, primarily due to the expiration of an agreement with an investor relation firm at December 31, 2022.
General and administrative expense increase by $328,269 for the year ended December 31, 2023, compared to the year ended 2022, primarily due to an increase in travel and expenses associated with the Cancun facility.
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We expect our overall operating expenses to increase on a quarterly basis for the balance of the year and into 2024 as we further implement our business plan. We expect increases in future quarters over all major categories as we engage in efforts to increase brand awareness with our products and services, including advertising campaigns and investor relation services. We also expect an increase in general operating costs and growth initiatives as we ramp up operations and seek to expand them.
Other expense
Other expense increased by $4,708,164 for the year ended December 31, 2023, compared to the year ended 2022, primarily as a result of impairment of goodwill of $4,125,460, the increase in amortization of debt discount of $1,303,150 and $784,614 of interest on promissory notes offset by gain on extinguishment of debt of $1,511,297.
Discontinued operations
On October 28, 2022, we completed the disposition of our prior coins, paper currency, bullion and medals business by entering into an Agreement of Conveyance, Transfer and Assignment of Subsidiary with our prior officer and director, Mr. Melvin Pereira, pursuant to which we agreed to sell Mr. Pereira 100% of our interest in Meso Numismatics Corp., a Florida corporation. In exchange, Mr. Pereira has agreed to assume all of the liabilities of Meso Numismatics, resulting in a gain of $68,313 in 2022.
Net Loss
We recorded a net loss of $9,813,666 for the year ended December 31, 2023, as compared with a net loss of $5,506,822 for the year ended 2022.
Liquidity and Capital Resources
Since inception, the Company has financed its operations through private placements and convertible notes. The following is a summary of the cash and cash equivalents as of December 31, 2023 and December 31, 2022.
| December 31, 2023 | December 31, 2022 | $ Change | % Change | |||||||||||||
| Cash and cash equivalents | $ | 530,540 | $ | 1,645,185 | $ | (1,114,645 | ) | -67.75 | % | |||||||
Summary of Cash Flows
Below is a summary of the Company’s cash flows for the years ended December 31, 2023 and 2022.
| For the Years Ended December 31, | ||||||||
| 2023 | 2022 | |||||||
| Net cash used from operating activities-continued operations | $ | (419,200 | ) | $ | (1,183,849 | ) | ||
| Net cash used from operating activities-discontinued operations | - | 69,713 | ||||||
| Net cash used in operating activities | (419,199 | ) | (1,114,136 | ) | ||||
| Net cash provided by (used in) investing activities | (385,596 | ) | (198,428 | ) | ||||
| Net cash provided by (used in) financing activities | (309,850 | ) | (20,776 | ) | ||||
| Net increase (decrease) in cash and cash equivalents | $ | (1,114,645 | ) | $ | (1,333,340 | ) | ||
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Operating activities
Net cash used in operating activities was $419,200 during the year ended December 31, 2023 and consisted of a net loss of $9,813,666, which was offset by a net change in operating assets and liabilities of $3,417,093 and non-cash items of $5,977,373. The primary non-cash items for the year ended December 31, 2023, consisted of impairment of goodwill of $4,125,460, amortization of debt discount of $3,059,914, depreciation and amortization of $310,102 and shares issued for services of $455 offset by change in derivative liabilities of $4,798 and gain on extinguishment of debt of $1,511,297. The significant change in operating assets and liabilities was an increase in accounts payable and accounts receivable.
Net cash used in operating activities was $1,114,136 during the year ended December 31, 2022 and consisted of a net loss of $5,506,822, which was offset by a net change in operating assets and liabilities of $2,553,594 and non-cash items of $1,837,692. The primary non-cash items for the year ended December 31, 2022, consisted of amortization of debt discount of $1,756,764, depreciation and amortization of $152,739 and shares issued for services of $10,000 offset by change in derivative liabilities of $13,498 and gain on discontinued operations of $68,313. The significant change in operating assets and liabilities was an increase in accounts payable and accounts receivable.
Investing activities
Net cash used in investing activities was $385,596 and consisted of the purchase of property and equipment associated with the Cancun facility during the year ended December 31, 2023.
Net cash used in investing activities was $198,428 and consisted of the purchase of property and equipment associated with the completion of the Cancun lab during the year ended December 31, 2022.
Financing activities
Net cash used in financing activities was $309,850 and consisted of principal payment of debt of $9,850 and consideration paid to note holders of $300,000 for the year ended December 31, 2023.
Net cash used in financing activities was $20,776 and consisted of principal payment of debt for the year ended December 31, 2022.
Going Concern
The financial statements have been prepared assuming the Company will continue as a going concern. The Company has incurred losses since inception, resulting in an accumulated deficit of approximately $61,990,131 and a working capital deficit of $21,674,139 as of December 31, 2023 and future losses are anticipated. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern.
The ability of the Company to continue its operations as a going concern is dependent on management’s plans, which include the raising of capital through debt and/or equity markets with some additional funding from other traditional financing sources, including term notes, until such time that funds provided by operations are sufficient to fund working capital requirements.
The Company will require additional funding to finance the growth of its current and expected future operations as well to achieve its strategic objectives. There can be no assurance that financing will be available in amounts or terms acceptable to the Company, if at all. The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.
Off-Balance Sheet Arrangements
As of December 31, 2023, the Company had no off-balance sheet arrangements.
Critical Accounting Policies
Our critical accounting policies have not materially changed during the nine months ended September 30, 2023. Furthermore, the preparation of our financial statements is in conformity with generally accepted accounting principles in the United States of America, or GAAP. The preparation of our financial statements requires management to make judgments and estimates that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of expenses during the reporting period. Our management believes that we consistently apply these judgments and estimates, and the financial statements fairly represent all periods presented. However, any differences between these judgments and estimates and actual results could have a material impact on our statements of income and financial position.
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Derivative Instruments
The derivative instruments are accounted for as liabilities, the derivative instrument is initially recorded at its fair market value and is then re-valued at each reporting date, with changes in fair value recognized in operations for each reporting period. The Company uses the Monte Carlo option pricing model to value the derivative instruments.
Stock Based Compensation
Share-based compensation issued to employees is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite service period. The Company measures the fair value of the share-based compensation issued to non-employees at the grant date using the stock price observed in the trading market (for stock transactions) or the fair value of the award (for non-stock transactions), which were considered to be more reliably determinable measures of fair value than the value of the services being rendered.
New Accounting Pronouncements
In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ASU 2020-04 provides optional expedient and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. In response to the concerns about structural risks of interbank offered rates and, particularly, the risk of cessation of the London Interbank Offered Rate (“LIBOR”), regulators in several jurisdictions around the world have undertaken reference rate reform initiatives to identify alternative reference rates that are more observable or transaction-based and less susceptible to manipulation. The ASU provides companies with optional guidance to ease the potential accounting burden associated with transitioning away from reference rates that are expected to be discontinued. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform—Scope, which clarified the scope and application of the original guidance. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform—Deferral of the Sunset Date of Topic 848. This update extends the sunset provision of ASU 2020-04 to December 31, 2024. The Company has not yet adopted this ASU and is evaluating the effect of adopting this new accounting guidance.
In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 requires companies to measure credit losses utilizing a methodology that reflects expected credit losses and requires a consideration of a broader range of reasonable and supportable information to inform credit loss estimates. For companies that qualified as Smaller Reporting Companies as defined by the SEC as of November 19, 2019, ASU 2016-13 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. The Company is evaluating the impact of the guidance on its financial statements.
Other accounting standards and amendments to existing accounting standards that have been issued and have future effective dates are not applicable or are not expected to have a significant impact on the Company’s consolidated financial statements.
Revenue Recognition
In accordance with FASB ASC 606, Revenue from Contracts with Customers, we determine revenue recognition through the following steps:
| (1) | Identify the contract with a customer |
| (2) | Identify the performance obligations in the contract |
| (3) | Determine the transaction price |
| (4) | Allocate the transaction price to each performance obligation in the contract |
| (5) | Recognize revenue when each performance obligation is satisfied |
There was no material impact on the Company’s financial statements as a result of adopting Topic 606 for the nine months ended September 30, 2023 and the year ended December 31, 2022.
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The Company’s main source of revenue is comprised of the following:
| ● | Training-GSCG offers a Stem Cell & Exosomes Certification Program where physicians attending these training sessions will take advantage of a full review of stem cell biology, characterization and regenerative properties of cells and cell products, cytokines and growth factors and how they can be applied in a clinic setting. The physicians will pay for the training sessions upfront and receives all the material and certificate upon completion of seminar. Completion of the seminar is when control is transferred and when revenue is recognized. |
| ● | Products-Physicians can order SVF Kits through GSCG which includes EC Certificate from Institute for Testing and Certificating, Inc. SVT Kits are paid for upfront and shipped from a third party directly to physicians. Transfer of control is when the product is shipped which is when revenue is recognized. |
| ● | Equipment- Physicians can order equipment through GSCG which includes a warranty from manufacture of equipment. Equipment is paid for upfront and shipped from manufacture directly to physicians. Transfer of control is when the equipment is shipped which is when revenue is recognized. |
| ● | Patient procedures are the treatments GSCG is offering at its Cancun clinic. The transfer of control is when the procedures are completed which is when revenue is recognized. |
The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product to a customer or as services are rendered. Revenue is measured based on the consideration the Company receives in exchange for those products
Use of Estimates
The preparation of these financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The significant estimates included in these financial statements are associated with accounting for the goodwill, derivative liability valuations, valuation of preferred stock, fair value estimates, valuation of assets and liabilities in business combination and in its going concern analysis.
Fair Value of Financial Instruments
The fair value of financial instruments, which include cash, accounts payable and accrued expenses and advances from related parties were estimated to approximate their carrying values due to the immediate or short-term maturity of these financial instruments. Management is of the opinion that the Company is not exposed to significant interest, currency or credit risks arising from financial instruments.
Fair value is defined as the price which would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-tier fair value hierarchy which prioritizes the inputs used in the valuation methodologies, as follows:
| Level 1 | Inputs - Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. |
| Level 2 | Inputs - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other means. |
| Level 3 | Inputs - Unobservable inputs for determining the fair values of assets or liabilities that reflect an entity’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities. |
At December 31, 2023 and December 31, 2022, the carrying amounts of the Company’s financial instruments, including cash, account payables, and accrued expenses, approximate their respective fair value due to the short-term nature of these instruments.
At December 31, 2023 and December 31, 2022, the Company does not have any assets or liabilities except for derivative liabilities related to convertible notes payable required to be measured at fair value in accordance with FASB ASC Topic 820, Fair Value Measurement.
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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are not required to provide the information required by this Item because we are a smaller reporting company.
ITEM 8. FINANCIAL STATEMENTS
The financial statements required by this Item 8 are included in this Annual Report following Item 15 hereof. As a smaller reporting company, we are not required to provide supplementary financial information.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
On September 22, 2023, we dismissed L J Soldinger Associates, LLC as our independent registered public accounting firm and, on September 22, 2023, we engaged Victor Mokuolu, CPA PLLC as our independent registered public accounting firm. The engagement of was approved by our Board of Directors.
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports, filed under the Securities Exchange Act of 1934, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable and not absolute assurance of achieving the desired control objectives. In reaching a reasonable level of assurance, management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. In addition, the design of any system of controls 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. Over time, a control may become inadequate because of changes in conditions or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
As required by the SEC Rules 13a-15(b) and 15d-15(b), we carried out an evaluation under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on the foregoing, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were not effective at the reasonable assurance level due to the material weaknesses described below.
| 1. | We do not have written documentation of our internal control policies and procedures. Written documentation of key internal controls over financial reporting is a requirement of Section 404 of the Sarbanes-Oxley Act which is applicable to us for the year ended December 31, 2023. Management evaluated the impact of our failure to have written documentation of our internal controls and procedures on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness. |
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| 2. | We have inadequate controls to ensure that information necessary to properly record transactions is adequately communicated on a timely basis from non-financial personnel to those responsible for financial reporting. Management evaluated the impact of the lack of timely communication between non–financial personnel and financial personnel on our assessment of our reporting controls and procedures and has concluded that the control deficiency represented a material weakness. | |
| 3. | The Company failed to account for the acquisition of GSCG using the full purchase accounting method in accordance with ASC 805. |
To address these material weaknesses, management engaged financial consultants, performed additional analyses and other procedures to ensure that the financial statements included herein fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented. We have not remedied the material weaknesses as of December 31, 2023. The Company plans to take remedial action to address these weaknesses during the fiscal year ended 2024.
Changes in Internal Control Over Financial Reporting
There has been no change in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) of the Exchange Act that occurred during the year ended December 31, 2023 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting, except the implementation of the controls identified above.
ITEM 9B. OTHER INFORMATION
ITEM 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
None.
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PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
Our current director and executive officer and his age are listed below.
| Name | Current Age | Position | ||
| David Christensen | 58 | President, Chief Executive Officer (Principal Executive Officer), Chief Financial Officer (Principal Accounting Officer and Principal Financial Officer), Secretary and Director |
David Christensen
From Feb 2001 to present, Dave has been the CEO and EVP of Enterprise Technology Consulting, where he helps companies transform their Leadership and Operations by driving Strategic Initiatives. As a Black Belt in Lean Six Sigma, he uses the best tools from these Lean Principles known as “Hoshin Kanri” (Strategy Deployment) to help companies develop and execute their business objectives. Strategy Deployment leverages this strong process knowledge and broad business experience to drive continuous improvement and performance breakthroughs that deliver exceptional value.
From Dec 2017 to present, Dave has also served as CEO and President of TNT Blockchain Inc, where he leads an international team of Supply Chain Technology solutions developers.
From May 2019 to Nov 2019, Dave served as CEO and Director of Lans Holdings, Inc., a company in the payment processor business.
From Jul 2015 to Present, Dave served as Vice President Strategy Development of Mode Transportation, a company in the freight transportation industry.
From Sep 2015 to Jan 2018, Dave served as Chief Strategy Officer and Director of Lans Holdings, Inc., a company in the payment processor business.
Dave has previously worked for companies such as Compaq, HP, Cal Cartage, Qualcomm, Wal-Mart International, Rexnord Carlyle, Lans Holdings, Mode Transportation, Hypercom, and Verifone.
Aside from that provided above, Dave does not hold and has not held over the past five years any other directorships in any company with a class of securities registered pursuant to Section 12 of the Exchange Act or subject to the requirements of Section 15(d) of the Exchange Act or any company registered as an investment company under the Investment Company Act of 1940.
Dave is qualified to serve as our director for his experience in developing companies.
Family Relationships.
There are no family relationships between any of our directors or executive officers.
Involvement in Certain Legal Proceedings.
During the past 10 years, none of our current directors, nominees for directors or current executive officers has been involved in any legal proceeding identified in Item 401(f) of Regulation S-K, including:
| 1. | Any petition under the Federal bankruptcy laws or any state insolvency law filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he or she was a general partner at or within two years before the time of such filing, or any corporation or business association of which he or she was an executive officer at or within two years before the time of such filing; |
| 2. | Any conviction in a criminal proceeding or being named a subject of a pending criminal proceeding (excluding traffic violations and other minor offenses); |
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| 3. | Being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him or her from, or otherwise limiting, the following activities: |
| i. | Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity; |
| ii. | Engaging in any type of business practice; or |
| iii. | Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws; |
| 4. | Being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any type of business regulated by the Commodity Futures Trading Commission, securities, investment, insurance or banking activities, or to be associated with persons engaged in any such activity; |
| 5. | Being found by a court of competent jurisdiction in a civil action or by the SEC to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated; |
| 6. | Being found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated; |
| 7. | Being subject to, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of: |
| i. | Any Federal or State securities or commodities law or regulation; or |
| ii. | Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or |
| iii. | Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or |
| 8. | Being subject to, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member. |
Term of Office
Our directors are appointed at the annual meeting of shareholders and hold office until the annual meeting of the shareholders next succeeding his or her election, or until his or her prior death, resignation or removal in accordance with our bylaws. Our officers are appointed by the Board and hold office until the annual meeting of the Board next succeeding his or her election, and until his or her successor shall have been duly elected and qualified, subject to earlier termination by his or her death, resignation or removal.
Section 16(a) Beneficial Ownership Reporting Compliance
As December 31, 2023, based on a review solely of the filings made under Section 16 of the Exchange Act, all reports were timely filed.
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ITEM 11. EXECUTIVE COMPENSATION.
The following summary compensation table sets forth all compensation awarded to, earned by, or paid to the named executive officers paid by us during the years ended December 31, 2023 and 2022.
EXECUTIVE OFFICER COMPENSATION TABLE
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Non-Qualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) | |||||||||||||||||||||||||||
| David Christensen | 2023 | 90,000 | - | 90,000 | ||||||||||||||||||||||||||||||||
| President, Chief Executive Officer (Principal Executive Officer), Chief Financial Officer (Principal Accounting Officer and Principal Financial Officer), Secretary And Director | 2022 | 90,000 | - | 90,000 | ||||||||||||||||||||||||||||||||
Outstanding Equity Awards at the End of the Fiscal Year
We do not have any equity compensation plans and therefore no equity awards are outstanding as of December 31, 2023.
None of the members of the board of directors of the Company were compensated for services in such capacity.
Bonuses and Deferred Compensation
We do not have any bonus, deferred compensation or retirement plan. All decisions regarding compensation are determined by our board of directors.
Payment of Post-Termination Compensation
We do not have change-in-control agreements with our director or executive officer, and we are not obligated to pay severance or other enhanced benefits to our executive officer upon termination of her employment.
Employment Agreements
On August 18, 2021, the Company entered into a three year Consulting Agreement with ETC (Enterprise Technology Consulting) owned by David Christensen. Consultant shall be compensated monthly based on annual rate of $90,000. Additionally, the agreement with ETC includes an issuance of 896 shares of Series DD Preferred Stock of the Company. An amount of 448 shares are issued on August 18, 2021 and the remaining 448 was issued on February 18, 2022.
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Board of Directors
Our directors hold office until the next annual meeting of shareholders and until their successors have been duly elected and qualified. Our officers are elected by and serve at the discretion of the board of directors.
Securities Authorized for Issuance Under Equity Compensation Plans
As of December 31, 2023, we did not have any securities authorized for issuance under any equity compensation plans.
Compensation of Directors
No director received compensation for his services during the year ended December 31, 2023.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
The following table sets forth the number of shares of common stock owned of record and beneficially by our executive officers, directors and persons who hold 5% or more of the outstanding shares of voting stock of the Company.
The amounts and percentages of our common stock beneficially owned are reported on the basis of SEC rules governing the determination of beneficial ownership of securities. Under the SEC rules, a person is deemed to be a “beneficial owner” of a security if that person has or shares “voting power,” which includes the power to vote or to direct the voting of such security, or “investment power,” which includes the power to dispose of or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities of which that person has the right to acquire beneficial ownership within 60 days through the exercise of any stock option, warrant or other right. Under these rules, more than one person may be deemed a beneficial owner of the same securities and a person may be deemed to be a beneficial owner of securities as to which such person has no economic interest. Unless otherwise indicated, each of the shareholders named in the table below, or his or her family members, has sole voting and investment power with respect to such shares of our common stock. Except as otherwise indicated, the address of each of the shareholders listed below is: c/o Meso Numismatics, Inc., 433 Plaza Real Suite 275 Boca Raton, Florida 33432.
Applicable percentage ownership is based on 12,493,938 shares of Common Stock outstanding as of March 28, 2024. In addition, as of March 28, 2024, there were 1,050,000 shares of Series AA Preferred Stock outstanding.
| Name and Address of Beneficial Owner | Common Stock Owned Beneficially | Percent of Class | Series AA Preferred Stock Owned Beneficially | Percent of Class | ||||||||||||
| Named Executive Officers and Directors | ||||||||||||||||
| Dave Christensen | 50,000 | 5 | % | |||||||||||||
| All Executive Officers and Directors as a group (1 person) | 50,000 | 5 | % | |||||||||||||
| 5% or greater shareholders | ||||||||||||||||
| Ajene Watson LLC and Digital Asset Monetary Network (1) | 1,082,477 | 8.7 | % | |||||||||||||
| Benito Novas | 1,000,000 | 95 | % | |||||||||||||
| (1) | Mr. Ajene Watson has investment and voting control over such shares. |
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
Other than as disclosed below or the transactions described under the heading “Executive Compensation,” there have been no transactions involving the Company since the beginning of the last fiscal year, or any currently proposed transactions, in which the Company was or is to be a participant and the amount involved exceeds $120,000 or one percent of the average of the Company’s total assets at year-end for the last two completed fiscal years, and in which any related person had or will have a direct or indirect material interest.
The Company’s corporate registered office is 433 Plaza Real Suite, 275, Boca Raton, Florida 33432. The online virtual office lease is for a month to month term at $89.00 per month. The Company has no physical office leases that required implementation of ASU 842 in the year ended December 31, 2023 and 2022 to assets and liabilities.
Benito Novas’ brother, sister and nephew provide marketing/administrative and training/R&D services to Global Stem Cells Group and were paid $233,893 in the aggregate as consultants during the year ended December 31, 2023, and $200,390 in the aggregate for the year ended December 31, 2022.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
Audit Fees
For the Company’s fiscal years ended December 31, 2023 and 2022, we were billed approximately $200,640 and $333,490, respectively, for professional services rendered by our independent auditors for the audit and review of our financial statements.
Audit Related Fees
There were no fees for audit related services rendered by our independent auditors for the years ended December 31, 2023 and 2022, respectively.
Tax Fees
For the Company’s fiscal years ended December 31, 2023 and 2022, there were no fees for professional services rendered by our independent auditors for tax compliance, tax advice, and tax planning.
All Other Fees
For the Company’s fiscal years ended December 31, 2023 and 2022, we were no billed any other fees by our auditors.
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ITEM 15. EXHIBITS FINANCIAL STATEMENT SCHEDULES.
We have filed the exhibits listed on the accompanying Exhibit Index of this registration statement and below in this Item 15:
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ITEM 16. 10-K SUMMARY
None
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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.
| Dated April 15, 2024 | MESO NUMISMATICS, INC. | |
| By: | /s/ David Christensen | |
| David Christensen | ||
|
President, Chief Executive Officer, Chief Financial Officer, Secretary and Director (Principal Executive Officer) (Principal Financial Officer) (Principal Accounting Officer) | ||
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ITEM 15 FINANCIAL STATEMENTS
MESO NUMISMATICS, INC.
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
CONTENTS
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders
Meso Numismatic, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheet of Meso Numismatic, Inc. (“the Company”) as of December 31, 2023, and the related consolidated statements of operations, stockholders’ deficit, and cash flows for the year ended December 31, 2023, and the related notes (collectively referred to as the financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for the year ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.
Substantial Doubt about the Company’s ability to continue as a Going Concern
The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has suffered recurring losses from operations and has a significant accumulated deficit. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
F-2
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Goodwill and Impairment
As disclosed in Note 12, Goodwill, to the financial statements, the Company completed an assessment of Goodwill in accordance with Financial Accounting Standards Board (FASB), Accounting Standards Codification (ASC) 350-20-35, and subsequently issued Accounting Standards Update (ASU) 2017-04, Intangibles – Goodwill and Other (Topic 350). The assessment was completed and the Company has recognized impairment of $4,125,460 and with a remaining Goodwill balance of $1,679,978 as of December 31, 2023.
The test for impairment of Goodwill involves judgment. Our procedures to address the critical audit matter included a review of management’s goodwill impairment assessment, the underlying transaction that created goodwill, and reporting unit attributable to the goodwill, and comparison of the fair value of the reporting unit and carrying amount.
Debt Modification
For the year ended December 31, 2023, the Company entered into Debt Modification agreements that terminated two secured notes in the amount of $2,506,827 and accrued interest of $1,304,470 in exchange for an aggregate consideration of $300,000 and new notes with an aggregate principal amount of $1,999,999. Note 4, Promissory Notes, Payable to the financial statements includes the details of these notes.
Our procedures to address the critical audit matter included a review of the debt modification agreements, the terms, the consideration exchange, and the relevant guidance according to ASC 470-50-40.
We have served as the Company’s auditor since 2023.
April 15, 2024
PCAOB ID:
F-3
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Stockholders of Meso Numismatics, Inc.
Opinion on the Financial Statements
We have audited the accompanying balance sheet of Meso Numismatics, Inc. (the Company) as of December 31, 2022, and the related statements of operations, stockholders’ deficit, and cash flows for the year ended December 31, 2022 and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022, and the results of its operations and its cash flows for the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.
Substantial Doubt about the Company’s Ability to Continue as a Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has an accumulated deficit of approximately $52,200,000 and a loss from continuing operations of $5.5 million, that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
/s/ L J Soldinger Associates, LLC
We served as the Company’s auditor from 2021 to 2023.
Deer Park, IL
April 15, 2024
F-4
MESO NUMISMATICS, INC.
CONSOLIDATED BALANCE SHEETS
| As of December 31, | ||||||||
| 2023 | 2022 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable | ||||||||
| Prepaid expenses | ||||||||
| Total current assets | ||||||||
| Property and equipment, net | ||||||||
| Other assets | ||||||||
| Intangible assets, net | ||||||||
| Right of use asset, net | ||||||||
| Goodwill | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued liabilities | $ | $ | ||||||
| Accrued interest | ||||||||
| Customer advances | ||||||||
| Derivative liability | ||||||||
| Lease liability | ||||||||
| Notes payable, net | ||||||||
| Total current liabilities | ||||||||
| Long term liabilities | ||||||||
| Lease liability, net of current portion | ||||||||
| Convertible notes payable, net of current portion | ||||||||
| Notes payable-related parties | ||||||||
| Notes payable, net of current portion | ||||||||
| Total liabilities | $ | $ | ||||||
| Stockholders’ deficit | ||||||||
| Preferred stock, $ | ||||||||
| Preferred stock, $ | ||||||||
| Common stock, $ | ||||||||
| Additional paid in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ deficit | ( | ) | ( | ) | ||||
| Total liabilities and stockholders’ deficit | $ | $ | ||||||
The accompanying notes are an integral part of these audited consolidated financial statements.
F-5
MESO NUMISMATICS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
| For the Years Ended December 31, | ||||||||
| 2023 | 2022 | |||||||
| Revenue | $ | $ | ||||||
| Cost of revenue | ||||||||
| Gross profit | ||||||||
| Operating expenses | ||||||||
| Advertising and marketing | ||||||||
| Professional fees | ||||||||
| Officer compensation | ||||||||
| Depreciation and amortization expense | ||||||||
| Investor relations | ||||||||
| General and administrative | ||||||||
| Total operating expenses | ||||||||
| Other income (expense) | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| Gain on derivative financial instruments | ||||||||
| Other income | ||||||||
| Gain on extinguishment of debt | ||||||||
| Impairment of goodwill | ( | ) | ||||||
| Loss from continuing operations | ( | ) | ( | ) | ||||
| Discontinued operations: | ||||||||
| Gain (loss) on sale of discontinued operations | ||||||||
| Income (loss) from discontinued operations | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Basic and diluted earnings (loss)per share from: | ||||||||
| $ | ( | ) | $ | ( | ) | |||
| $ | ( | ) | $ | ( | ) | |||
The accompanying notes are an integral part of these audited consolidated financial statements.
F-6
MESO NUMISMATICS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
For the Year Ended December 31, 2023
| Series AA Preferred | Series DD Preferred | Additional | ||||||||||||||||||||||||||||||||||
| Stock | Stock | Common Stock | Paid In | Accumulated | ||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Total | ||||||||||||||||||||||||||||
| Balance, December 31, 2022 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||
| Issuance of common stock for services | - | - | ||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Balance, December 31, 2023 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||
The accompanying notes are an integral part of these audited consolidated financial statements
F-7
MESO NUMISMATICS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
For the Year Ended December 31, 2022
| Series AA Preferred | Series DD Preferred | Additional | ||||||||||||||||||||||||||||||||||
| Stock | Stock | Common Stock | Paid In | Accumulated | ||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Total | ||||||||||||||||||||||||||||
| Balance, December 31, 2021 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||
| Issuance of common stock for services | - | - | ||||||||||||||||||||||||||||||||||
| Issuance of preferred series DD for services-related party | - | - | ||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Balance, December 31, 2022 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||
The accompanying notes are an integral part of these audited consolidated financial statements
F-8
MESO NUMISMATICS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
| For the Years Ended December 31, | ||||||||
| 2023 | 2022 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net loss from continuing operations | $ | ( | ) | $ | ( | ) | ||
| Non-cash adjustments to reconcile net loss to net cash: | ||||||||
| Amortization of debt discount | ||||||||
| Depreciation and amortization expense | ||||||||
| Gain from changes in derivative liability fair values | ( | ) | ( | ) | ||||
| Common shares issued for services | ||||||||
| Gain on settlement of debt | ( | ) | ||||||
| Gain on extinguishment of debt | ( | ) | ||||||
| Impairment of goodwill | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ||||||
| Prepaid expenses | ( | ) | ||||||
| Accounts payable and accrued liabilities | ||||||||
| Cash used for operating activities-continuing operations | ( | ) | ( | ) | ||||
| Depreciation discontinued operations | ||||||||
| Gain (loss) on discontinued operations | ||||||||
| Cash provided (used) for operating activities-discontinued operations | ||||||||
| CASH USED BY OPERATING ACTIVITIES | ( | ) | ( | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Purchase of property and equipment | ( | ) | ( | ) | ||||
| CASH USED BY INVESTING ACTIVITIES | ( | ) | ( | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Principal payment on debt | ( | ) | ( | ) | ||||
| Consideration paid to note holder | ( | ) | ||||||
| CASH USED BY FINANCING ACTIVITIES | ( | ) | ( | ) | ||||
| Net decrease in cash | ( | ) | ( | ) | ||||
| Cash, beginning of year | ||||||||
| Cash, end of year | $ | $ | ||||||
| Cash paid for income taxes | $ | $ | ||||||
| Cash paid for interest | $ | $ | ||||||
| NON-CASH FINANCING ACTIVITIES: | ||||||||
| Stock issued through stock payable | $ | $ | ||||||
| Right of use asset financed through payable | $ | $ | ||||||
The accompanying notes are an integral part of these audited consolidated financial statements.
F-9
MESO NUMISMATICS, INC.
NOTES TO CONSOLDIATED FINANCIAL STATEMENTS
December 31, 2023
NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS
Organization and History
Meso Numismatics, Inc. (the “Company”) was originally organized under the laws of Washington State in 1999, as Spectrum Ventures, LLC to develop market and sell VOIP (Voice over Internet Protocol) services. In 2002, the Company changed its name to Nxtech Wireless Cable Systems, Inc. In August 2007, the Company changed its name to Oriens Travel & Hotel Management Corp. In November 2014, the Company changed its name to Pure Hospitality Solutions, Inc.
On November 16, 2016, the Company entered into an Agreement and Plan of Merger between the Company and Meso Numismatics Corp. (“Meso”). The acquisition of Meso is to support the Company’s overall mission of specializing in ventures related to Central America and the Latin countries of the Caribbean; not limited to tourism. Meso is a small but scalable numismatics operation that the Company can leverage for low-cost cost revenues and product marketing.
Meso Numismatics, Inc. maintains an online store with eBay (www.mesocoins.com) and participates in live auctions with major companies such as Heritage Auctions, Stacks Bowers Auctions and Lyn Knight Auctions.
The acquisition was complete on August 4, 2017
following the Company issuance of
On September 4, 2017, the Company decided to suspend its booking operations, Oveedia, to focus on continuing to build its numismatic business, Meso Numismatics. Inc. The Company did, however, use its footprint within the Latin American region to expand Meso Numismatics, Inc. at a much quicker rate.
In September 2018, the Company changed its name to Meso Numismatics, Inc. and FINRA provided a market effective date and on September 26, 2018, the new ticker symbol MSSV became effective on October 16, 2018.
On August 18, 2021, Meso Numismatics, Inc., completed
its acquisition of Global Stem Cells Group Inc., through a Stock Purchase Agreement acquiring all the outstanding capital stock of Global
Stem Cells Group Inc and paid the purchase price of a total of
Pursuant to the terms of the Fifth Post Closing
Amendment along with the completion of the acquisition of Global Stem Cells Group Inc., the issuance of the
F-10
On October 28, 2022, the Company entered into
an Agreement of Conveyance, Transfer and Assignment of Subsidiary with our prior officer and director, Mr. Melvin Pereira, pursuant to
which we agreed to sell Mr. Pereira
Description of Business
As a result of this transaction, the Company is no longer engaged in the sale of coins, paper currency, bullion and medals and it has moved into what is believed to be a more lucrative opportunity for the Company - the operations of Global Stem Cell Group.
The Company believes stem cell therapy is becoming an increasingly effective clinical solution for treating conditions that traditional or conventional medicine only offers within palliative care and pain management. The Company works with doctors and their staff to provide products, solutions, equipment, services, and training to help them be successful in the application of Stem Cell Therapies. The Company combines solutions from extensive clinical research with the manufacturing and commercialization of viable cell therapy and immune support related products that it believes will change the course of traditional medicine around the world forever. The Company’s revenue comes directly from the training and the seminars, from the resale of these kits, products, and equipment, services, and from the reoccurring application of the Company’s process using the kits and solutions it provides.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation and Basis of Presentation
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Global Stem Cells Group Inc. (since August 18, 2021) and Cellular Hope Institute, wholly-owned subsidiary of Global Stem Cells Group Inc. All significant intercompany transactions have been eliminated in consolidation.
Use of Estimates in Financial Statement Presentation
The preparation of these financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The significant estimates included in these financial statements are associated with accounting for the goodwill, derivative liability, valuation of preferred stock, and for the valuation of assets and liabilities in business combination.
Reclassifications
Certain amounts for the prior year have been revised or reclassified to conform to the current year presentation. No change in net loss resulted from these reclassifications.
Cash and Cash Equivalents
The Company considers all highly liquid accounts
with original maturities of three months or less to be cash equivalents. At December 31, 2023 and December 31, 2022, all of the Company’s
cash was deposited in major banking institutions. There were no cash equivalents as of December 31, 2023 and December 31, 2022. Our cash
balances at financial institutions may exceed the Federal Deposit Insurance Company’s (FDIC) insured limit of $
F-11
Accounts Receivable
Accounts receivable are recorded at original invoice
amount less an allowance for uncollectible accounts that management believes will be adequate to absorb estimated losses on existing balances.
Management estimates the allowance based on collectability of accounts receivable and prior bad debt experience. Accounts receivable balances
are written off against the allowance upon management’s determination that such accounts are uncollectible. Recoveries of accounts
receivable previously written off are recorded when received. Management believes that credit risks on accounts receivable will not be
material to the financial position of the Company or results of operations. The allowance for doubtful accounts was $
Intangible Assets
Intangible assets with finite lives are amortized over their estimated useful lives. Intangible assets with indefinite lives are not amortized, but are tested for impairment annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. No impairment was recognized for the year ended December 31, 2023 and the year ended December 31, 2022.
Goodwill
We test our reporting unit for impairment annually at year end or more frequently if events or circumstances indicate it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the carrying amount of a reporting unit exceeds its estimated fair value, we record an impairment loss based on the difference between fair value and carrying amount of the reporting unit, not to exceed to the associated carrying amount of goodwill. (see Note 12 for detail of goodwill).
Derivative Instruments
The derivative instruments are accounted for as liabilities, the derivative instrument is initially recorded at its fair market value and is then re-valued at each reporting date, with changes in fair value recognized in operations for each reporting period. The Company uses the Monte Carlo option pricing model to value the derivative instruments.
Revenue Recognition
The Company recognizes revenue from the sale of products under ASC 606 by applying the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied.
The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product to a customer or services are provided. Revenue is measured based on the consideration the Company receives in exchange for those products.
Income Taxes
The Company uses the liability method to record income tax activity. Deferred taxes are determined based upon the estimated future tax effects of differences between the financial reporting and tax reporting bases of assets and liabilities, given the provisions of currently enacted tax laws.
The accounting for uncertainty in income taxes recognized in an enterprise’s financial statements uses the threshold of more-likely-than-not to be sustained upon examination for inclusion or exclusion. Measurement of the tax uncertainty occurs if the recognition threshold has been met.
F-12
Net Earnings (Losses) Per Common Share
The Company accounts for net loss per share in accordance with Accounting Standards Codification subtopic 260-10, Earnings Per Share (“ASC 260-10”), which requires presentation of basic and diluted earnings per share (“EPS”) on the face of the statement of operations for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS.
Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during each period. It excludes the dilutive effects of any potentially issuable common shares. The effect of common stock equivalents is anti-dilutive with respect to losses and therefore basic and dilutive is the same.
Diluted net loss per share is calculated by including
any potentially dilutive share issuances in the denominator.
| For the Years Ended December 31, | ||||||||
| 2023 | 2022 | |||||||
| Convertible notes outstanding | ||||||||
| Convertible preferred stock outstanding | ||||||||
| Shares underlying warrants outstanding | ||||||||
Fair Value of Financial Instruments
The fair value of financial instruments, which include cash, accounts payable and accrued expenses and advances from related parties were estimated to approximate their carrying values due to the immediate or short-term maturity of these financial instruments. Management is of the opinion that the Company is not exposed to significant interest, currency or credit risks arising from financial instruments.
Fair value is defined as the price which would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-tier fair value hierarchy which prioritizes the inputs used in the valuation methodologies is as follows:
| Level 1 | Inputs - Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. |
| Level 2 | Inputs - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other means. |
| Level 3 | Inputs - Unobservable inputs for determining the fair values of assets or liabilities that reflect an entity’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities. |
At December 31, 2023 and December 31, 2022, the carrying amounts of the Company’s financial instruments, including cash, account payables, and accrued expenses, approximate their respective fair value due to the short-term nature of these instruments.
At December 31, 2023 and December 31, 2022, the Company does not have any assets or liabilities except for derivative liabilities related to convertible notes payable required to be measured at fair value in accordance with FASB ASC Topic 820, Fair Value Measurement.
F-13
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| December 31, 2023 | ||||||||||||||||
| Derivative liability | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
| December 31, 2022 | ||||||||||||||||
| Derivative liability | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
Comprehensive Income
The Company records comprehensive income as the change in equity of a business during a period from transactions and other events and circumstances from non-owner sources. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. Other comprehensive income (loss) includes foreign currency translation adjustments and unrealized gains and losses on available-for-sale securities. As of December 31, 2023 and December 31, 2022, the Company had no items that represent comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements.
Stock Based Compensation
Share-based compensation issued to employees is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite service period. The Company measures the fair value of the share-based compensation issued to non-employees at the grant date using the stock price observed in the trading market (for stock transactions) or the fair value of the award (for non-stock transactions), which were considered to be more reliably determinable measures of fair value than the value of the services being rendered.
New Accounting Pronouncements
In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ASU 2020-04 provides optional expedient and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. In response to the concerns about structural risks of interbank offered rates and, particularly, the risk of cessation of the London Interbank Offered Rate (“LIBOR”), regulators in several jurisdictions around the world have undertaken reference rate reform initiatives to identify alternative reference rates that are more observable or transaction-based and less susceptible to manipulation. The ASU provides companies with optional guidance to ease the potential accounting burden associated with transitioning away from reference rates that are expected to be discontinued. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform—Scope, which clarified the scope and application of the original guidance. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform—Deferral of the Sunset Date of Topic 848. This update extends the sunset provision of ASU 2020-04 to December 31, 2024. The Company has not yet adopted this ASU and is evaluating the effect of adopting this new accounting guidance.
In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 requires companies to measure credit losses utilizing a methodology that reflects expected credit losses and requires a consideration of a broader range of reasonable and supportable information to inform credit loss estimates. For companies that qualified as Smaller Reporting Companies as defined by the SEC as of November 19, 2019, ASU 2016-13 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. The Company is evaluating the impact of the guidance on its financial statements.
Other accounting standards and amendments to existing accounting standards that have been issued and have future effective dates are not applicable or are not expected to have a significant impact on the Company’s consolidated financial statements
F-14
Going Concern
The financial statements have been prepared assuming
the Company will continue as a going concern. The Company has incurred losses since inception, resulting in an accumulated deficit of
$
The ability of the Company to continue its operations as a going concern is dependent on management’s plans, which include the raising of capital through debt and/or equity markets with some additional funding from other traditional financing sources, including term notes, until such time that funds provided by operations are sufficient to fund working capital requirements.
The Company will require additional funding to finance the growth of its current and expected future operations as well to achieve its strategic objectives. There can be no assurance that financing will be available in amounts or terms acceptable to the Company, if at all. The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.
NOTE 3 – REVENUE RECOGNITION
In accordance with FASB ASC 606, Revenue from Contracts with Customers, we determine revenue recognition through the following steps:
| (1) | Identify the contract with a customer |
| (2) | Identify the performance obligations in the contract |
| (3) | Determine the transaction price |
| (4) | Allocate the transaction price to each performance obligation in the contract |
| (5) | Recognize revenue when each performance obligation is satisfied |
There was no material impact on the Company’s financial statements as a result of adopting Topic 606 for the years ended December 31, 2023 and December 31, 2022.
The Company’s main source of revenue is comprised of the following:
| ● | Training-GSCG offers a Stem Cell & Exosomes Certification Program where physicians attending these training sessions will take advantage of a full review of stem cell biology, characterization and regenerative properties of cells and cell products, cytokines and growth factors and how they can be applied in a clinic setting. The physicians will pay for the training sessions upfront and receives all the material and certificate upon completion of seminar. Completion of the seminar is when control is transferred and when revenue is recognized. |
| ● | Products-Physicians can order SVF Kits through GSCG, which includes EC Certificate from Institute for Testing and Certificating, Inc. SVT Kits are paid for upfront and shipped from a third party directly to physicians. Transfer of control is when the product is shipped, which is when revenue is recognized. |
| ● | Equipment- Physicians can order equipment through GSCG, which includes a warranty from manufacture of equipment. Equipment is paid for upfront and shipped from manufacture directly to physicians. Transfer of control is when the equipment is shipped which is when revenue is recognized. |
| ● | Patient procedures are the treatments GSCG is offering at its Cancun clinic. The transfer of control is when the procedures are completed, which is when revenue is recognized. |
The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product to a customer or as services are rendered. Revenue is measured based on the consideration the Company receives in exchange for those products.
F-15
| For the Years Ended December 31, | ||||||||
| 2023 | 2022 | |||||||
| Training | $ | $ | ||||||
| Product supplies | ||||||||
| Equipment | ||||||||
| Patient procedures | ||||||||
| Total revenue | $ | $ | ||||||
| For the Year Ended | ||||||||||||
| December 31, 2023 | ||||||||||||
| Global Stem | Meso | |||||||||||
| Cells Group | Numismatics | Total | ||||||||||
| Revenue | $ | $ | $ | |||||||||
| Cost of revenue | ||||||||||||
| Gross profit | $ | $ | $ | |||||||||
| Gross Profit % | % | % | % | |||||||||
| Assets | $ | $ | $ | |||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
COVID-19
In December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China, which has and is continuing to spread throughout China and other parts of the world, including the United States. On January 30, 2020, the World Health Organization declared the outbreak of the coronavirus disease (COVID-19) a “Public Health Emergency of International Concern.” On January 31, 2020, U.S. Health and Human Services Secretary Alex M. Azar II declared a public health emergency for the United States to aid the U.S. healthcare community in responding to COVID-19, and on March 11, 2020 the World Health Organization characterized the outbreak as a “pandemic”.
The significant outbreak of COVID-19 resulted in a widespread health crisis that adversely affected the economies and financial markets in which we operate. Restrictions in international travel along with in person meetings limited our training of new customers along with selling them products and equipment which adversely affecting our results of operations and financial condition during 2021 and the first six months of 2022.
F-16
During the fourth quarter of 2022 and into 2023 we started recovering from the COVID-19 pandemic with restrictions in international travel removed along with the opening of the Cancun facility in the second half of 2022, which provided a facility for physicians to come for training and preform patient procedures.
The full extent of the future impacts of COVID-19 on the Company’s operations is uncertain. A prolonged outbreak could have a material adverse impact on financial results and business operations of the Company, including the timing and ability of the Company to collect accounts receivable and the ability of the Company to continue to provide high-quality services and equipment. The Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities at the date of issuance of these financial statements. These estimates may change as new events occur and additional information is obtained.
NOTE 4 – NOTES PAYABLE
Convertible Notes Payable
On
November 25, 2019, the Company, pursuant to the certificate of designation of the Series BB Preferred Stock, elected to exchange the
preferred shares for other indebtedness calculated at a price per share equal to $
| December 31, | December 31, | |||||||
| 2023 | 2022 | |||||||
| Convertible notes payable | $ | $ | ||||||
| Less: Discount | ||||||||
| Convertible notes payable, net | $ | $ | ||||||
During
the periods ending December 31, 2023 and December 31, 2022, the Company incurred $
Promissory Notes Payable
During
2015, the Company entered into line of credit with Digital Arts Media Network treated as a promissory note. The promissory note bear
interest at ten (
F-17
On
November 25, 2019, the Company, pursuant to the certificate of designation of the Series BB Preferred Stock, elected to exchange the
preferred shares for other indebtedness calculated at a price per share equal to $
On
December 3, 2019, Melvin Pereira, the prior CEO, converted
At
December 7, 2020 the Company exchanged $
On
December 9, 2020, the Company entered into a Promissory Debentures with a lender in the amount of $
On
January 6, 2021, the Company entered into a Promissory Debentures with a lender in the amount of $
On
June 22, 2021, the Company entered into a Promissory Debentures with a lender in the amount of $
F-18
On
August 18, 2021, through a Stock Purchase Agreement in which
On
August 18, 2021, through a Stock Purchase Agreement in which
On
September 20, 2021, the Company entered into a Promissory Debentures with a lender in the amount of $
On
December 30, 2021, the parties wished to modify the terms of the Promissory Debentures dated July 13, 2020 in the amount of $
On
December 30, 2021, the parties wished to modify the terms of the Promissory Debentures dated July 15, 2020 in the amount of $
On
November 20, 2023 both the Company and two separate lenders hereby agree to terminate the 2020 Secured Note in the amount of $
F-19
| December 31, | December 31, | |||||||
| 2023 | 2022 | |||||||
| Promissory notes payable | $ | $ | ||||||
| Less: Discount | ||||||||
| Less: Deferred finance costs | ||||||||
| Promissory notes payable, net | $ | $ | ||||||
During
the periods ending December 31, 2023 and December 31, 2022, the Company made $
Derivatives Liabilities
The Company determined that the convertible notes outstanding as of December 31, 2023 contained an embedded derivative instrument as the conversion price was based on a variable that was not an input to the fair value of a “fixed-for-fixed” option as defined under FASB ASC Topic No. 815 – 40.
| December 31, | |||
| 2023 | |||
| Common stock issuable | |||
| Market value of common stock on measurement date | $ | ||
| Adjusted exercise price | $ | ||
| Risk free interest rate | |||
| Instrument lives in years | |||
| Expected volatility | |||
| Expected dividend yields |
At
December 7, 2020 the Company exchanged $
| Balance at December 31, 2021 | $ | |||
| Additions | ||||
| Fair value loss | ( | ) | ||
| Conversions | ( | |||
| Balance at December 31, 2022 | ||||
| Additions | ||||
| Fair value gain | ( | ) | ||
| Conversions | ( | ) | ||
| Balance at December 31, 2023 | $ |
F-20
NOTE 5 – STOCKHOLDERS EQUITY
Common Shares
The
Board of Directors and shareholders were required to increase the number of authorized shares of common stock from (a)
2022 Transactions
On
March 23, 2022, the Company issued
On
May 5, 2022, the Company issued
On
November 30, 2022, the Company issued
2023 Transactions
On
December 8, 2023, the Company issued
As
of December 31, 2023 and December 31, 2022, the Company has
Warrants
During
the year ended December 31, 2020, the Company issued warrants to purchase
On
January 6, 2021, the Company issued warrants to purchase
On
June 22, 2021, the Company issued warrants to purchase
On
September 20, 2021, the Company issued warrants to purchase
F-21
| Number of Warrants | Weighted Average Exercise Price | |||||||
| Outstanding at year ended December 31, 2021 | $ | |||||||
| Granted | ||||||||
| Exercised | ||||||||
| Expired | ||||||||
| Outstanding at year ended December 31, 2022 | $ | |||||||
| Granted | ||||||||
| Exercised | ||||||||
| Expired | ( | ) | - | |||||
| Outstanding at year ended December 31, 2023 | $ | |||||||
Warrants
granted in the year ended December 31, 2020 were valued using the Black Scholes Merton Model with the risk-free interest rate of
Warrants
granted in the year ended December 31, 2021 were valued using the Black Scholes Merton Model with the risk-free interest rate within
ranges between
Designation of Series AA Super Voting Preferred Stock
On
June 30, 2014, the Company filed with the Secretary of State with Nevada an amendment to the Company’s Articles of Incorporation,
authorizing the issuance of up to eleven million (
On
May 2, 2014, the Company filed with the Secretary of State with Nevada in the form of a Certificate of Designation that authorized the
issuance of up to
All
of the Holders of the Series AA Super Voting Preferred Stock together, voting separately as a class, shall have an aggregate vote equal
to sixty-seven (
The holders of the Series AA Super Voting Preferred Stock shall not be entitled to receive dividends paid on the Company’s common stock.
Upon liquidation, dissolution and winding up of the affairs of the Company, whether voluntary or involuntary, the holders of the Series AA Super Voting Preferred Stock shall not be entitled to receive out of the assets of the Company, whether from capital or earnings available for distribution, any amounts which will be otherwise available to and distributed to the common shareholders.
The shares of the Series AA Super Voting Preferred Stock will not be convertible into the shares of the Company’s common stock.
On
November 26, 2019, the Company filed with the Secretary of State with Nevada an amendment to the Company’s Articles of Incorporation,
authorizing the increase to
F-22
On
June 26, 2020, Meso Numismatics, Inc. completed the repurchase of
On
June 26, 2020, due to Mr. Pereira’s resignation, Meso Numismatics, Inc.’s Board of Directors appointed Mr. David Christensen,
current Director and President of the Company, to serve as Chief Executive Officer, Chief Financial Officer and Secretary, effective
June 27, 2020 and granted
The
$
On
August 18, 2021, Meso Numismatics, Inc., completed its acquisition of Global Stem Cells Group Inc., through a Stock Purchase Agreement
acquiring all the outstanding capital stock of Global Stem Cells Group Inc and paid the purchase price of a total of
The
Series AA Preferred shares issued on August 18, 2021, were valued based upon industry specific control premiums and the Company’s
market cap at the time of the transaction. The $
As
of December 31, 2023 and December 31, 2022, the Company has
Designation of Series BB Preferred Stock
On
March 29, 2017, the Company filed with the Secretary of State with Nevada in the form of a Certificate of Designation that authorized
the issuance of up to one million (
Each holder of outstanding shares of Series BB Preferred Stock shall be entitled to convert on a 1 for 1 basis into shares of the Company’s common stock, any or all of their shares of Series BB Preferred Stock after a minimum of six (6) months have elapsed from the issuance of the preferred stock to the holder. The Series BB Preferred Stock has no voting rights until the Holder redeems the preferred stock into the Company’s common stock. The Series BB Preferred Stock shall not be adjusted by the Corporation.
The holders of the Series BB Preferred Stock shall not be entitled to receive dividends paid on the Company’s common stock.
The
Series BB Preferred Stock has a liquidation value of $
As
of December 31, 2019,
As of December 31, 2023 and December 31, 2022, the Company had no preferred shares of Series BB Preferred Stock issued and outstanding.
F-23
Designation of Series CC Preferred Stock
At
any time prior to November 25, 2022 (“Automatic Conversion Date”) the Company may redeem for cash out of funds legally available
therefor, any or all of the outstanding Series CC Convertible Preferred Stock at a price equal to $
Each
holder of outstanding shares of Series CC Convertible Preferred Stock shall be entitled to convert, prior to the Automatic Conversion
Date, part or all of its shares of Series CC Convertible Preferred Stock into a number of fully paid and nonassessable shares of common
stock at a price per share determined by dividing the number of issued and outstanding shares of stock of the Company on the date of
conversion by
The holders of the Series CC Convertible Preferred Stock shall not be entitled to receive dividends paid on the Company’s common stock.
The holders of the Series CC Convertible Preferred Stock shall not be entitled to vote on any matter submitted to the shareholders of the Company for their vote, waiver, release or other action.
As of December 31, 2023 and December 31, 2022, the Company had no preferred shares of Series CC Preferred Stock issued and outstanding.
Designation of Series DD Convertible Preferred Stock
On
November 26, 2019, the Company filed with the Secretary of State with Nevada an amendment to the Company’s Articles of Incorporation,
authorizing ten thousand (
Each
holder of outstanding shares of Series DD Convertible Preferred Stock shall be entitled to its shares of Series DD Convertible Preferred
Stock into a number of fully paid and nonassessable shares of common stock determined by multiplying the number of issued and outstanding
shares of common stock of the Company on the date of conversion by
The holders of the Series DD Convertible Preferred Stock shall not be entitled to receive dividends paid on the Company’s common stock.
The holders of the Series DD Convertible Preferred Stock shall not be entitled to vote on any matter submitted to the shareholders of the Company for their vote, waiver, release or other action.
On
August 18, 2021, Meso Numismatics, Inc., completed its acquisition of Global Stem Cells Group Inc., through a Stock Purchase Agreement
acquiring all the outstanding capital stock of Global Stem Cells Group Inc and paid the purchase price of a total of
The
$
F-24
In
consideration of mutual covenants set forth in the Professional Service Consulting Agreement, Dave Christensen, current Director, President,
Chief Executive Officer, Chief Financial Officer and Secretary, shall be compensated monthly based on annual rate of $
The
$
As
of December 31, 2023 and December 31, 2022, the Company had
NOTE 6 – RELATED PARTY TRANSACTIONS
In
consideration of mutual covenants set forth in the Professional Service Consulting Agreement, Dave Christensen, current Director, President,
Chief Executive Officer, Chief Financial Officer and Secretary, shall be compensated monthly based on an annual rate of $
On
August 18, 2021, through a Stock Purchase Agreement in which
Benito
Novas’ brother, sister and nephew provide marketing/administrative and training/R&D services to Global Stem Cells Group and
were paid $
NOTE 7 – COMMITMENTS AND CONTINGENCIES
Pursuant
to an Agreement between Global Stem Cell Group and a lender dated November 17, 2020, in the event that any of Global Stem Cell Group,
and/or the Entities and /or Parent (individually the “Company” and collectively the “Companies”) dispose of any
Assets to any party or third party or parties (an “Asset Disposition”), then Global Stem Cell Group shall undertake to cause
such party, third party or parties to acquire the perpetual right of a percentage of Global revenues from the Investor. The consideration
for the Right shall be equal to the fair value (“FV”) of the Assets at the time of the Asset Disposition (the “Asset
Disposition Payment”). The Asset Disposition Payment shall not exceed
During
the period ending December 31, 2021, Global Stem Cell Group, Inc. entered into the Cancun lease with HELLIMEX, S.A. DE CV beginning January
16 2022 and ending on January 15, 2024. The property is located in the Tulum Trade Center, consisting of
F-25
NOTE 8 – PROPERTY AND EQUIPMENT, NET
| December 31, 2023 | December 31, 2022 | |||||||
| Computer and office equipment ( | $ | $ | ||||||
| Leasehold improvements ( | ||||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ||||
| Total property and equipment, net | $ | $ | ||||||
Depreciation
expense for the years ended December 31, 2023 and December 31, 2022 was $
We evaluate the carrying value of long-lived assets for impairment on an annual basis or whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. Further testing of specific assets or grouping of assets is required when undiscounted future cash flows associated with the assets is less than their carrying amounts. An asset is considered to be impaired when the anticipated undiscounted future cash flows of an asset group are estimated to be less than its carrying value. The amount of impairment recognized is the difference between the carrying value of the asset group and its fair value. Fair value estimates are based on assumptions concerning the amount and timing of estimated future cash flows. We recorded no impairment of long-lived assets for the year ended December 31, 2023 and the year ended December 31, 2022.
NOTE 9 – INTELLECTUAL PROPERTY
A third party independent valuation specialist was asked to determine the value of Global Stem Cell Group, Inc., tangible and intangible assets assuming the offering price was at fair value. In order to perform the purchase price allocation, the tangible and intangible assets were valued as of August 18, 2021.
| December 31, 2023 | December 31, 2022 | |||||||
| Tradename - Trademarks | $ | $ | ||||||
| Intellectual Property / Licenses | ||||||||
| Customer Base | ||||||||
| Intangible assets | ||||||||
| Less: accumulated amortization | ( | ) | ( | ) | ||||
| Total intangible assets, net | $ | $ | ||||||
Amortization
is computed on straight-line method based on estimated useful lives of
F-26
NOTE 10 – INCOME TAXES
Due
to the Company’s net losses, there were no provisions for income taxes for the years ended December 31, 2023 and 2022. The difference
between the income tax expense of zero shown in the statement of operations and pre-tax book net loss times the federal statutory rate
of
| 2023 | ||||
| Income tax (benefit) | $ | ( | ) | |
| Non-deductible | ||||
| Change in valuation allowance | ||||
| Income tax (benefit) per financial statements | $ | |||
| December 31, 2023 | December 31, 2022 | |||||||
| Deferred Tax Assets: | ||||||||
| Net operating losses | $ | $ | ||||||
| Less valuation allowance | ( | ) | ( | ) | ||||
| Total deferred tax assets | $ | $ | ||||||
The Company has recorded a full allowance against its deferred tax assets as of December 31, 2023 and 2022 because management determined that it is not more-likely-than not that those assets will be realized. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of deferred assets will not be realized. The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.
For
federal income tax purposes, the Company has a net operating loss carry forward of approximately
NOTE 11 – OPERATING LEASES
During
the period ending December 31, 2021, Global Stem Cell Group, Inc. entered into the Cancun lease with HELLIMEX, S.A. DE CV beginning January
16, 2022 and ending on January 15, 2024. The property is located in the Tulum Trade Center, consisting of
In January 2022, the Company began the buildout of the clinic and began to order equipment. The Cancun facility was inaugurated in May 2022 and is accredited both by the Mexican General Health Council and Cofepris (Mexican FDA).
| 2024 | $ | |||
| 2025 | ||||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| Total undiscounted cash payments | ||||
| Less interest | ||||
| Present value of payments | $ |
F-27
NOTE 12 – GOODWILL
On
August 18, 2021, through a Stock Purchase Agreement, we acquired
The
preliminary purchase price for the merger was determined to be $
Under the acquisition method, the purchase price must be allocated to the reporting units net assets acquired, inclusive of intangible assets, with any excess fair value recorded to goodwill. The goodwill, which is not deductible for tax purposes, is attributable to the assembled workforce of Global Stem Cells Group, planned growth in new markets, and synergies expected to be achieved from the combined operations of Meso Numismatics, Inc. and Global Stem Cells Group.
| Goodwill | ||||
| Balance at December 31, 2021 | $ | |||
| Acquisition | ||||
| Impairment | ||||
| Balance at December 31, 2022 | $ | |||
| Acquisition | ||||
| Impairment | ( | ) | ||
| Balance at December 31, 2023 | $ | |||
During each fiscal year, we periodically assess whether any indicators of impairment exist which would require us to perform an interim impairment review. As of each interim period end during each fiscal year, we concluded that a triggering event had not occurred that would more likely than not reduce the fair value of our reporting unit below their carrying values. We performed our annual test of goodwill for impairment as of December 31, 2023.
The
Company has recognized impairment of $
NOTE 13 – DISCONTINUED OPERATIONS
On
October 28, 2022, we entered into an Agreement of Conveyance, Transfer and Assignment of Subsidiary with our prior officer and director,
Mr. Melvin Pereira, pursuant to which we agreed to sell Mr. Pereira
As a result of this transaction, we are no longer engaged in the sale of coins, paper currency, bullion and medals and we have moved into what we believe is a more lucrative opportunity for our company, the operations of Global Stem Cell Group.
F-28
| Revenue | $ | |||
| Cost of revenue | ||||
| Gross profit | ||||
| Operating expenses | ||||
| Advertising and marketing | ||||
| Depreciation and amortization expense | ||||
| General and administrative | ( | ) | ||
| Total operating expenses | ( | ) | ||
| Gain from discontinued operations | $ |
NOTE 14 – SUBSEQUENT EVENTS
In accordance with ASC 855-10, we have analyzed events and transactions that occurred subsequent to December 31, 2023 through the date these financial statements were issued and have determined that we do not, aside from the following, have any other material subsequent events to disclose or recognize in these financial statements.
The
Company previously designated
Due
to the expansion of the Cancun Clinic, an additional 1,216 square feet Global Stem Cell Group, Inc. entered into a new Cancun lease with
RIVIERA MAYA, S.A. DE C.V beginning January 16, 2024 and ending on January 15, 2026. The property is located in the Tulum Trade Center,
consisting of 2,863 square feet with a monthly rent of $
F-29
