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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
June 20, 2024
Redwoods Acquisition Corp.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
001-41340 |
|
86-2727441 |
(Commission File Number) |
|
(IRS Employer
Identification No.) |
1115 Broadway, 12th Floor
New York, NY 10010
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including
area code (646) 916-5315
(Former name or former address, if changed since
last report)
Check the appropriate box below if the Form 8-K
filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☒ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|
|
☐ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
|
|
☐ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
|
|
☐ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b)
of the Act:
Title of Each Class |
|
Trading Symbol(s) |
|
Name of Each Exchange on Which Registered |
Units, |
|
RWODU |
|
The Nasdaq Stock Market LLC |
Common Stock |
|
RWOD |
|
The Nasdaq Stock Market LLC |
Warrants |
|
RWODW |
|
The Nasdaq Stock Market LLC |
Rights |
|
RWODR |
|
The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant
is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the
Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.
Item 8.01. Other Events
As previously announced, Redwoods Acquisition
Corp. (the “Company”) entered into that certain business combination agreement, dated May 30, 2023, by and among the Company,
ANEW MEDICAL, INC. (“ANEW”), a Wyoming corporation, and ANEW MEDICAL SUB, INC. (“Merger Sub”), a Wyoming corporation,
pursuant to which Merger Sub will merge with and into ANEW with ANEW surviving as a wholly-owned subsidiary of the Company (the “Business
Combination”). In connection with the Business Combination, the Company filed a registration statement on Form S-4 (the “Registration
Statement”) which was declared effective by the Securities and Exchange Commission (the “SEC”) on February 14, 2024.
The Registration Statement included the audited financial statements of ANEW for the year ended December 31, 2022, which were audited
by B.F. Borgers, CPA PC (“B. F. Borgers”). After learning that B. F. Borgers was no longer permitted to appear or practice
before the SEC, ANEW engaged a new auditor, Yusufali & Associates, LLC, to re-audit ANEW’s financial statements for the year
ended December 31, 2022, audit ANEW’s financial statements for the year ended December 31, 2023 and review the unaudited financial
statements of ANEW for the quarterly period ended March 31, 2024. Copies of the audited financial statements of ANEW for the years ended
December 31, 2022 and December 31, 2023 and the unaudited financial statements for the quarterly period ended March 31, 2024 are attached
hereto as exhibit 99.1 and 99.2, respectively, and are incorporated herein by reference.
IMPORTANT NOTICES
Important Notice Regarding Forward-Looking
Statements
This Current Report on Form
8-K contains certain “forward-looking statements” within the meaning of the Securities Act and the Exchange Act both as amended.
Statements that are not historical facts, including statements about the pending transactions described above, and the parties’
perspectives and expectations, are forward-looking statements. Such statements include, but are not limited to, statements regarding the
proposed transaction, including the anticipated initial enterprise value and post-closing equity value, the benefits of the proposed transaction,
integration plans, expected synergies and revenue opportunities, anticipated future financial and operating performance and results, including
estimates for growth, the expected management and governance of the combined company, and the expected timing of the transactions. The
words “expect,” “believe,” “estimate,” “intend,” “plan” and similar expressions
indicate forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to various
risks and uncertainties, assumptions (including assumptions about general economic, market, industry and operational factors), known or
unknown, which could cause the actual results to vary materially from those indicated or anticipated.
The forward-looking statements
are based on the current expectations of the management of Redwoods and ANEW MEDICAL Inc. (“ANEW”), as applicable,
and are inherently subject to uncertainties and changes in circumstances and their potential effects and speak only as of the date of
such statement. There can be no assurance that future developments will be those that have been anticipated. These forward-looking statements
involve a number of risks, uncertainties or other assumptions that may cause actual results or performance to be materially different
from those expressed or implied by these forward-looking statements including: risks related to ANEW’s businesses and strategies;
the ability to complete the proposed business combination due to the failure to obtain approval from Redwoods’ stockholders or satisfy
other closing conditions in the definitive merger agreement; the amount of any redemptions by existing holders of Redwoods’ common
stock; the ability to recognize the anticipated benefits of the business combination; other risks and uncertainties included under the
header “Risk Factors” in the registration statement on Form S-4, filed by Redwoods with the SEC; and in Redwood Acquisition
Corp.’s other filings with the SEC. Should one or more of these risks or uncertainties materialize, or should underlying assumptions
prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. Accordingly,
you are cautioned not to place undue reliance on these forward-looking statements. Forward-looking statements relate only to the date
they were made, and Redwoods, ANEW and their subsidiaries undertake no obligation to update forward-looking statements to reflect events
or circumstances after the date they were made except as required by law or applicable regulation.
Important Information for Investors and Stockholders
This document relates to a
proposed transaction between Redwoods and ANEW. This document does not constitute an offer to sell or exchange, or the solicitation of
an offer to buy or exchange, any securities, nor will there be any sale of securities in any jurisdiction in which such offer, sale or
exchange would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Redwoods filed a
registration statement on Form S-4 with the SEC, which included a document that serves as a prospectus and proxy statement of Redwoods,
referred to as a proxy statement/prospectus. A proxy statement/prospectus was sent to all of Redwoods’s stockholders on or about
February 20, 2024. Redwoods will also file other documents regarding the proposed transaction with the SEC. Before making any voting decision,
investors and security holders of Redwoods are urged to read the registration statement on Form S-4, the proxy statement/prospectus and
all other relevant documents filed or that will be filed with the SEC in connection with the proposed transaction as they become available
because they will contain important information about the proposed transaction.
Stockholders will also be
able to obtain a copy of the Form S-4, including the proxy statement/prospectus, and other documents filed with the SEC without charge,
by directing a request to: Redwoods Acquisition Corp., at 1115 Broadway, 12th Floor, New York, NY 10010. Investors and security holders
will also be able to obtain free copies of the registration statement on Form S-4, the proxy statement/prospectus and all other relevant
documents filed or that will be filed with the SEC by Redwoods through the website maintained by the SEC at www.sec.gov. INVESTORS AND
SECURITY HOLDERS OF REDWOODS ACQUISITION CORP. ARE URGED TO READ THESE MATERIALS (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND
ANY OTHER RELEVANT DOCUMENTS IN CONNECTION WITH THE TRANSACTIONS THAT REDWOODS ACQUISITION CORP. WILL FILE WITH THE SEC WHEN THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT REDWOODS ACQUISITION CORP., ANEW AND THE TRANSACTIONS.
Participants in the Solicitation
Redwoods and its directors
and executive officers may be deemed participants in the solicitation of proxies from Redwoods’ stockholders with respect to the
business combination. Information about Redwoods’ directors and executive officers and a description of their interests in Redwoods
is included in the proxy statement/prospectus for the proposed transaction and be available at the SEC’s website (www.sec.gov).
Additional information regarding the interests of such participants is contained in the proxy statement/prospectus for the proposed transaction.
ANEW and its directors and
executive officers also may be deemed to be participants in the solicitation of proxies from the stockholders of Redwoods in connection
with the proposed business combination. Information about ANEW’s directors and executive officers and information regarding their
interests in the proposed transaction is included in the proxy statement/prospectus for the proposed transaction.
No Offer or Solicitation
This Current Report on Form
8-K is not a proxy statement or solicitation of a proxy, consent or authorization with respect to any securities or in respect of the
transactions described above and shall not constitute an offer to sell or a solicitation of an offer to buy the securities of Redwoods
Acquisition Corp. or ANEW, nor shall there be any sale of any such securities in any state or jurisdiction in which such offer, solicitation,
or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction. No offering
of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended,
or an exemption therefrom.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
SIGNATURES
Pursuant to the requirements
of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
Dated: June 20, 2024 |
REDWOODS ACQUISITION CORP. |
|
|
|
|
By: |
/s/ Jiande Chen |
|
Name: |
Jiande Chen |
|
Title: |
Chief Executive Officer |
3
Exhibit 99.1
STRATEGIC ASSET LEASING, INC.
13576 Walnut Street
Omaha, NE 68144
Financial Statements and Notes
For the Years Ended December 31, 2023 and 2022
Strategic Asset Leasing, Inc.
December 31, 2023 and 2022
Index to the Financial Statements
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of Strategic Asset Leasing,
Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated
balance sheets of Strategic Asset Leasing, Inc. (the “Company”) as of December 31, 2023, and 2022, the related statements of
operations, stockholders’ equity (deficit), and cash flows for the years then ended, 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, 2023, and 2022, and the results of its operations and its cash flows for the years then ended,
in conformity with accounting principles generally accepted in the United States.
Going Concern Considerations
The accompanying financial statements have been
prepared assuming that the Company will continue as a going concern. The Company has suffered recurring losses since inception and has
not achieved profitable operations, which raises substantial doubt about its ability to continue as a going concern. Management’s
plans in regard to these matters are 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
audits. 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 audits in accordance with the
standards of the PCAOB. Those standards require that we plan and perform the audits 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 audits 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 audits 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 audits provide a reasonable basis for our opinion.
Critical Audit Matters
There were no critical audit matters to be communicated
from the current period audit of the financial statements.
We have served as the Company’s auditor
since 2024.
Short Hills, New Jersey
May 22, 2024
PCAOB registration # 3313
STRATEGIC ASSET LEASING, INC.
CONSOLIDATED BALANCE SHEETS
| |
December 31, 2023 | | |
December 31, 2022 | |
| |
| | |
| |
ASSETS | |
| | |
| |
Current assets: | |
| | |
| |
Cash | |
$ | 2,808 | | |
$ | 75,872 | |
Prepaid expenses | |
| 3,840 | | |
| 3,667 | |
Due from related party | |
| - | | |
| 250,000 | |
Total current assets | |
| 6,648 | | |
| 329,539 | |
| |
| | | |
| | |
Other assets | |
| | | |
| | |
Licenses | |
| 2,137,638 | | |
| 2,123,750 | |
Patents | |
| 48,420 | | |
| 86,160 | |
Total other assets | |
| 2,186,058 | | |
| 2,209,910 | |
| |
| | | |
| | |
Total Assets | |
$ | 2,192,706 | | |
$ | 2,539,449 | |
| |
| | | |
| | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | |
| | | |
| | |
| |
| | | |
| | |
Current liabilities: | |
| | | |
| | |
Accounts payable | |
$ | 151,259 | | |
$ | 8,014 | |
Accrued expenses | |
| 2,460 | | |
| 4,742 | |
Related party payable | |
| 135,000 | | |
| - | |
Note payable | |
| 1,332,270 | | |
| 1,347,518 | |
Total current liabilities | |
| 1,620,989 | | |
| 1,360,274 | |
| |
| | | |
| | |
Commitments and contingencies | |
| - | | |
| - | |
| |
| | | |
| | |
Stockholders’ equity (deficiency): | |
| | | |
| | |
Preferred stock Series B, $0.001 par value; 500,000
shares authorized;405,250 issued and outstanding as of December 31, 2023 and December 31, 2022 | |
| 405 | | |
| 405 | |
Preferred stock Series C, $0.0001 par value; 5,000,000
shares authorized; 1,000,000 issued and outstanding as of December 31, 2023 and December 31, 2022 | |
| 100 | | |
| 100 | |
Common stock, $0.0001 par value; 1,500,000,000 shares
authorized; 1,044,861,360 issued and outstanding as of December 31, 2023 and December 31, 2022 | |
| 104,486 | | |
| 104,486 | |
Additional paid in capital | |
| 3,539,003 | | |
| 3,539,003 | |
Common stock to be issued | |
| 851,400 | | |
| 751,400 | |
Accumulated deficit | |
| (3,923,677 | ) | |
| (3,216,219 | ) |
Total stockholders’ equity (deficiency) | |
| 571,717 | | |
| 1,179,175 | |
| |
| | | |
| | |
Total Liabilities and Stockholders’ equity | |
$ | 2,192,706 | | |
$ | 2,539,449 | |
The accompanying notes are an integral part of these financial statements.
STRATEGIC ASSET LEASING, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
| |
For the Twelve Months Ended | |
| |
December 31, 2023 | | |
December 31, 2022 | |
| |
| | |
| |
Operating expenses: | |
| | |
| |
Professional fees | |
$ | 600,776 | | |
$ | 526,007 | |
General and administrative | |
| 30,546 | | |
| 48,367 | |
Total operating expenses | |
| 631,322 | | |
| 574,374 | |
| |
| | | |
| | |
Net operating income (loss) | |
| (631,322 | ) | |
| (574,374 | ) |
| |
| | | |
| | |
Other (income) expense: | |
| | | |
| | |
Interest expense | |
| 76,214 | | |
| 24,366 | |
Other (income) expense | |
| (78 | ) | |
| (147 | ) |
Total Other (income) expense | |
| 76,136 | | |
| 24,219 | |
| |
| | | |
| | |
Net income (loss) | |
$ | (707,458 | ) | |
$ | (598,593 | ) |
| |
| | | |
| | |
Basic and diluted income (loss) per share | |
$ | (0.00 | ) | |
$ | (0.00 | ) |
| |
| | | |
| | |
Weighted average number of common shares outstanding -
basic | |
| 1,044,861,360 | | |
| 1,044,861,360 | |
The accompanying notes are an integral part of these financial statements.
STRATEGIC ASSET LEASING, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
(DEFICIT)
| |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Accumulated | | |
| |
| |
Pref.
Stock - | | |
Pref.
Stock - | | |
| | |
| | |
Additional | | |
| | |
| | |
Deficit
During | | |
Total
Stockholders’ | |
| |
Series
B | | |
Series
C | | |
Common
Stock | | |
Paid-In | | |
Stock to be | | |
Accumulated | | |
Development | | |
Equity | |
| |
Shares | | |
Amount | | |
Shares | | |
Amount | | |
Shares | | |
Amount | | |
Capital | | |
Issued | | |
Deficit | | |
Stage | | |
(Deficit) | |
Balance
at December 31, 2021 | |
| 405,250 | | |
$ | 405 | | |
| 1,000,000 | | |
$ | 100 | | |
| 1,044,861,360 | | |
$ | 104,486 | | |
$ | 3,539,003 | | |
$ | - | | |
$ | (2,617,626 | ) | |
$ | - | | |
$ | 1,026,368 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Stock
subscription/compensation - common stock | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 751,400 | | |
| - | | |
| | | |
| 751,400 | |
Net
loss | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (598,593 | ) | |
| - | | |
| (598,593 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Balance
at December 31, 2022 | |
| 405,250 | | |
$ | 405 | | |
| 1,000,000 | | |
$ | 100 | | |
| 1,044,861,360 | | |
$ | 104,486 | | |
$ | 3,539,003 | | |
$ | 751,400 | | |
$ | (3,216,219 | ) | |
$ | - | | |
$ | 1,179,175 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Stock
subscription & license purchase | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 100,000 | | |
| - | | |
| | | |
| 100,000 | |
Net
loss | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (707,458 | ) | |
| - | | |
| (707,458 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Balance
at December 31, 2023 | |
| 405,250 | | |
$ | 405 | | |
| 1,000,000 | | |
$ | 100 | | |
| 1,044,861,360 | | |
$ | 104,486 | | |
$ | 3,539,003 | | |
$ | 851,400 | | |
$ | (3,923,677 | ) | |
$ | - | | |
$ | 571,717 | |
The accompanying notes are an integral part of these financial statements.
STRATEGIC ASSET LEASING, INC.
CONSOLIDATED STATEMENTS OF CASH FLOW
| |
For the Twelve Months Ended | |
| |
December 31, 2023 | | |
December 31, 2022 | |
| |
| | |
| |
Cash flows from operating activities: | |
| | | |
| | |
Net income (loss) | |
$ | (707,458 | ) | |
$ | (598,593 | ) |
Adjustments to reconcile net loss to net cash used in operating activities: | |
| | | |
| | |
Stock based compensation | |
| - | | |
| 1,400 | |
Changes in operating assets and liabilities: | |
| | | |
| | |
Prepaid expenses | |
| (173 | ) | |
| (7,122 | ) |
Accounts payable | |
| 103,997 | | |
| 4,742 | |
Accrued expenses | |
| (2,282 | ) | |
| - | |
Related party payable | |
| 135,000 | | |
| - | |
Net cash used in operating activities | |
| (470,916 | ) | |
| (599,573 | ) |
| |
| | | |
| | |
Cash flows from investing activities: | |
| | | |
| | |
Patent acquisition costs (See Note 4) | |
| 37,740 | | |
| (86,160 | ) |
Acquisition of licenses (See Note 4) | |
| (13,888 | ) | |
| (39,248 | ) |
Net cash used in investing activities | |
| 23,852 | | |
| (125,408 | ) |
| |
| | | |
| | |
Cash flows from financing activities | |
| | | |
| | |
Proceeds from stock subscriptions | |
| 100,000 | | |
| 750,000 | |
Advance/Repayment of advance to shareholder | |
| 250,000 | | |
| (250,000 | ) |
Proceeds from notes payable - current portion | |
| 24,000 | | |
| - | |
Net cash provided by financing activities | |
| 374,000 | | |
| 500,000 | |
| |
| | | |
| | |
Net increase (decrease) in cash | |
| (73,064 | ) | |
| (224,981 | ) |
Cash - beginning of the year | |
| 75,872 | | |
| 300,853 | |
Cash - end of the year | |
$ | 2,808 | | |
$ | 75,872 | |
| |
| | | |
| | |
Supplemental disclosures: | |
| | | |
| | |
Interest paid | |
$ | 78,496 | | |
$ | 19,624 | |
Income taxes | |
$ | - | | |
$ | - | |
| |
| | | |
| | |
Supplemental disclosure for non-cash financing activities: | |
| | | |
| | |
Acquisition of drugs licenses with a promissory note (See Note 5) | |
$ | - | | |
$ | 1,347,518 | |
The accompanying notes are an integral part of these financial statements.
Strategic Asset Leasing, Inc.
Notes to Consolidated Financial Statements
December 31, 2023
NOTE 1 – ORGANIZATION AND BASIS OF PRESENTATION
Organization
The accompanying consolidated financial statements
include Strategic Asset Leasing, Inc., formerly known as Mammoth Energy Group, Inc. (‘LEAS’ or the ‘Company’), its wholly owned subsidiary
and any majority controlling interests.
The Company was incorporated on February 27, 2006,
under the laws of the State of Nevada with the aim of pursuing lithium mining. Prior to being domiciled in Nevada, the Company was a Canadian
corporation known as Technigen Corporation. In March of 2013, management decided to change the domicile of the Company to Wyoming by filing
articles of continuance on March 5, 2013, subsequently dissolving the Nevada corporation.
On December 14, 2020, the Company entered a Stock
Purchase Agreement with Dr. Joseph Sinkule for 1,000,000 shares of the Company’s Series C preferred stock. The purchase price
was $110,000. Jason Tucker, the Company’s CEO, resigned from the Company and Mr. Simkule became the Company’s CEO and sole
director.
On November 1, 2021, the Company executed an Agreement
and Plan of Merger with Anew Acquisition Corp (“ANEW”), including the wholly own subsidiary ANEW Oncology, Inc., whereby each
issued and outstanding share of ANEW common stock was converted into the right to receive one-one hundredth (1/100) of a share of the
Company’s Series B preferred stock, par value $.001 per share.
After November 1, 2021, the Company will pursue
the development of its licensed rights in major world markets to biologic medicines and gene therapies that will be developed and commercialized
by the Company and affiliates and/or corporate partners.
On November 1, 2021, the shareholders of the Company
approved a name change to ANEW Medical, Inc. and approved a 1-for-2500 reverse split.
On January 4, 2022, the Company filed an Articles
of Amendment with the State of Wyoming, changing its name to “ANEW Medical, Inc.” and the contemplated 1-for-2,500 reverse
split. During January 2022 and in accordance with SEC Rule 10b-17 and FINRA Rule 6490, the Company submitted documents and other information
to FINRA in furtherance of pursuing and obtaining approval of the subject reverse stock split and name change. The Company must submit
the additional documents requested by, and necessary to obtain approval of, FINRA in connection with the subject reverse stock split and
name change. As of December 31, 2023, the reverse split and name change have not been declared effective by FINRA to broker deals in the
quotation system.
On May 30, 2023, the Company entered into a Business
Combination Agreement with Redwoods Acquisition Corp., a Delaware corporation (“Redwoods”), and Redwoods wholly owned subsidiary
ANEW Medical Sub, Inc., a Wyoming corporation (“Merger Sub”), The Business Combination Agreement and the transactions contemplated
thereby were approved by the board of directors of each of Redwoods and the Company.
The Business Combination Agreement provides, among
other things, on the Closing Date, upon the terms and conditions set forth herein and in accordance with the applicable provisions of
the Wyoming Business Corporations Act (the “WBCA”), Merger Sub will merge with and into the Company, with the Company
as the surviving company in the Merger and, after giving effect to such merger, a wholly owned Subsidiary of Redwoods, and each Company
Share will be converted into the right to receive the Merger Consideration, on the terms and subject to the conditions set forth in the
Business Combination Agreement.
The Business Combination is expected to close,
and the related S4 is expected to be effective, in April 2024, following the receipt of the required approval by the stockholders of Redwoods
and the Company, approval by the Nasdaq Stock Market (“Nasdaq”) of the initial listing application of the combined company
filed in connection with the Business Combination, and the fulfillment of other customary closing conditions.
Business
The Company was formed to develop essential
medicines for the treatment of chronic diseases – cancer, cardiovascular, and neurodegenerative disorders. The Company currently
has acquired two licensed platforms a generic drug portfolio and a biosimilar biologics platform that uses biologic therapies to treat
cancer, and two proprietary, patented technologies involving the melanocortin receptor-binding molecules and a gene therapy platform which
uses a gene therapy approach to introduce a therapeutic protein called “Klotho” inside the body to treat neurodegenerative
diseases.
On September 12, 2022, the Company acquired five
market-approved anti-cancer drugs approved for sale in Germany for $1,386,766. The Market Authorizations (MA’s) are for four of the
drugs that comprise the “FOLFOX” and “FOLFIRI” multi-drug regimens used in treatment of metastatic colorectal and
gastric cancer and in two of the drugs are used to treat metastatic lung cancer. The drugs are important in the treatment of many solid
tumors in both childhood and adult cancers. Previously, the Company acquired two off-patent biogeneric antibodies from Reliance Life Sciences
(RLS), the life science arm of Reliance Industries Pvt Ltd. of Navi Mumbai, India.
During January 2023, the Company acquired a treatment
for small drug molecules that bind to the melanocortin receptors on human cells and affect skin pigmentation for $20,000.
In accordance with Accounting Standards Codification
(“ASC”) 915, Development Stage Entities, the Company is considered to be in the development stage, with limited operations
since incorporating in the United States.
Summary of Significant Accounting Policies
Basis of Presentation
The financial statements of the Company have been
prepared in accordance with generally accepted accounting principles in the United States of America.
Use of Estimates
In preparing financial statements, management
makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheet and revenue and expenses
in the statement of expenses. Actual results could differ from those estimates.
Reclassifications
Certain prior year amounts have been reclassified
for comparative purposes to conform to the current-year financial statement presentation. These reclassifications had no effect on previously
reported results of operations. In addition, certain prior year amounts from the restated amounts have been reclassified for consistency
with the current period presentation.
Cash and Cash Equivalents
For the purposes of the statement of cash flows,
the Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.
Concentrations of Risk
Cash and cash equivalents deposited with financial
institutions are insured by the Federal Deposit Insurance Corporation (“FDIC”). The Company did not hold cash in excess
of FDIC insurance coverage at a financial institution as of December 31, 2023 and 2022.
Prepaid Expenses
The Company considers all items incurred for future
services to be prepaid expenses. The prepaid expenses were $3,840 and $3,667 at December 31, 2023 and 2022, consisting of the OTC Market
annual fee.
Property and equipment
Property and equipment are recorded at cost and
depreciated on the straight-line method over the estimated useful lives. Expenditures for normal repairs and maintenance are charged to
expense as incurred. The cost and related accumulated depreciation of assets sold or otherwise disposed of are removed from the accounts,
and any gain or loss is included in operations.
Licenses
The Company acquires medical licenses for the
treatment of medical conditions to market and sell in the future. The initial asset cost is the cost to acquire the license. Once in use,
the Company amortizes the license cost over the useful life using the straight-line method.
Patents
The Company records the cost to acquire a commercial
license to technologies and patents as the initial asset cost. Once the patents are approved and
in use, and assuming no litigations expenses, the Company amortizes the patent cost over the useful life using the straight-line method.
The amortization period will not exceed the lifespan of the protection afforded by the patent. If the expected useful life of the patent
is even shorter, the Company will use the useful life for amortization purposes. Thus, the shorter length of a patent’s useful life and
its legal life will be used for the amortization period.
Valuation of Long-Lived and Intangible Assets
We assess the impairment of long-lived and intangible
assets periodically, or at least annually, and whenever events or changes in circumstances indicate that the carrying value may not be
recoverable. Factors considered important, which could trigger an impairment review, include the following: significant underperformance
relative to historical or projected future cash flows; significant changes in the manner of use of the assets or the strategy of the overall
business; and significant negative industry trends. When management determines that the carrying value of long-lived and intangible assets
may not be recoverable, impairment is measured as the excess of the assets’ carrying value over the estimated fair value. Management
is not aware of any other impairment changes that may currently be required; however, we cannot predict the occurrence of events that
might adversely affect the reported values in the future. On an annual basis, the Company tests the long-lived and intangible assets for
impairment based on the projected net present value of cash flows for each asset. Prior to the annual impairment test, if circumstances
change and a long-lived or intangible asset is deemed impaired, an impairment loss will be immediately recognized in the statements of
operations. At December 31, 2022, the date of the last impairment test, it was determined the estimated fair value exceeded the carry
value by in excess of 50%.
Derivative Financial Instruments
The Company does not use derivative instruments
to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments to determine
if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that
are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting
date, with changes in the fair value reported as charges or credits to income. For option-based derivative financial instruments, The
Company uses the Black-Scholes option-pricing model to value the derivative instruments at inception and subsequent valuation dates. The
classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed
at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based
on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date.
Fair Value Measurements
In September 2006, the FASB issued ASC 820 (previously
SFAS 157) which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements.
The provisions of ASC 820 were effective January 1, 2008.
As defined in ASC 820, fair value is the price
that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement
date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability,
including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable,
market corroborated, or generally unobservable. The Company classifies fair value balances based on the observations of those inputs.
ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority
to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable
inputs (level 3 measurement).
The three levels of the fair value hierarchy defined
by ASC 820 are as follows:
Level 1 – Quoted prices are available in
active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset
or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of
financial instruments such as exchange-traded derivatives, marketable securities and listed equities.
Level 2 – Pricing inputs are other than
quoted prices in active markets included in level 1, which are either directly or indirectly observable as of the reported date. Level
2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard
models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current
market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these
assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported
by observable levels at which transactions are executed in the marketplace. Instruments in this category generally include non-exchange-traded
derivatives such as commodity swaps, interest rate swaps, options and collars.
Level 3 – Pricing inputs include significant
inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that
result in management’s best estimate of fair value.
The Company did not identify any assets or liabilities
that are required to be adjusted on the balance sheet to fair value as of December 31, 2023 and 2022.
Revenue Recognition
Revenue is recognized when a customer obtains
control of promised goods or services and is recognized in an amount that reflects the consideration that an entity expects to receive
in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty
of revenue and cash flows arising from contracts with customers. The amount of revenue that is recorded reflects the consideration that
the Company expects to receive in exchange for those goods. The Company applies the following five-step model in order to determine this
amount: (i) identification of the promised goods in the contract; (ii) determination of whether the promised goods are performance
obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including
the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition
of revenue when (or as) the Company satisfies each performance obligation.
The Company only applies the five-step model to contracts
when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods and service transfers to
the customer. Once a contract is determined to be within the scope of ASC 606 at contract inception, the Company reviews the contract
to determine which performance obligations the Company must deliver and which of these performance obligations are distinct. The Company
recognizes as revenues the amount of the transaction price that is allocated to the respective performance obligation when the performance
obligation is satisfied or as it is satisfied. Generally, the Company’s performance obligations are transferred to customers at
a point in time, typically upon delivery.
Income taxes
The Company’s policy is to provide for deferred
income taxes based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates that
will be in effect when the differences are expected to reverse. The U.S. Tax Cuts and Jobs Act (TCJA) legislation reduces the U.S. federal
corporate income tax rate from 35.0% to 21.0% and is effective June 22, 2018, for the Company. On January 1, 2023, the U.S. federal corporate
income tax increased from 21% to 28%. We did not provide any current or deferred U.S. federal income tax provision or benefit for any
of the periods presented because we have experienced operating losses since inception. When it is more likely than not that a tax asset
cannot be realized through future income the Company must allow for this future tax benefit. We provided a full valuation allowance on
the net deferred tax asset, consisting of net operating loss carryforwards, because management has determined that it is more likely than
not that we will not earn income sufficient to realize the deferred tax assets during the carryforward period.
The Company is not aware of any uncertain tax
position that, if challenged, would have a material effect on the financial statements for the three-months ended December 31, 2023, or
during the prior three years applicable under FASB ASC 740. We did not recognize any adjustment to the liability for uncertain tax
position and therefore did not record any adjustment to the beginning balance of accumulated deficit on the consolidated balance sheet.
The Company is in the process of filing all unfiled tax returns. All tax returns for the Company remain open for examination.
Basic and diluted net income per share
Basic net loss per common share is computed using
the weighted average number of common shares outstanding. Diluted earnings per share (EPS) include additional dilution from common stock
equivalents, such as stock issuable pursuant to convertible notes. Common stock equivalents are not included in the computation of diluted
earnings per share when the Company reports a loss because to do so would be anti-dilutive for the periods presented. On December 31,
2023 the Company’s common stock equivalents consisted of 405,250 shares of Series B preferred stock outstanding which may be converted
into 40,525,000 shares of the Company’s common stock and 851,400 shares common stock to be issued for an aggregate of 41,376,400
shares of common stock.
Research and Development Cost
Research and development (R&D) costs are expensed
as incurred. R&D costs are related to the Company’s internally funded development of the Company medical licenses and patents. The
Company had R&D costs were $-0- for the three and years ended December 31, 2023 and 2022, respectively.
Stock Compensation
The Company accounts for share-based compensation
in accordance with the fair value recognition provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards
Codification (“ASC”) No. 718 and No. 505. The Company issues restricted stock to employees and consultants for their services.
Cost for these transactions are measured at the fair value of the equity instruments issued at the date of grant. These shares are considered
fully vested and the fair market value is recognized as an expense in the period granted. The Company recognized consulting expenses and
a corresponding increase to additional paid-in-capital related to stock issued for services. For agreements requiring future services,
the consulting expense is to be recognized ratably over the requisite service period.
The Company uses the Black-Scholes-Merton valuation
model for estimating the fair value of traded options and stock warrants. There were no stock warrants or stock options outstanding
on December 31, 2023 and 2022.
The Company recorded stock-based compensation
of $-0- and $1,400 for the years ended December 31, 2023, and 2022, respectively.
Related Parties
The registrant follows subtopic 850-10 of the
FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions.
Pursuant to Section 850-10-20 the Related parties
include (a) affiliates of the registrant; (b) entities for which investments in their equity securities would be required, absent the
election of the fair value option under the Fair Value Option Subsection of Section 825–10–15, to be accounted for by the
equity method by the investing entity; (c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed
by or under the trusteeship of management; (d) principal owners of the registrant; (e) management of the registrant; (f) other parties
with which the registrant may deal if one party controls or can significantly influence the management or operating policies of the other
to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and (g) other parties
that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in
one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might
be prevented from fully pursuing its own separate interests.
The financial statements shall include disclosures
of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary
course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements
is not required in those statements. The disclosures shall include: (a) the nature of the relationship(s) involved; (b) description of
the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income
statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial
statements; (c) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of
any change in the method of establishing the terms from that used in the preceding period; and (d) amounts due from or to related parties
as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.
Recently Issued Accounting Standards
Management believes recently issued accounting
pronouncements will have no impact on the financial statements of the Company.
NOTE 2 – GOING CONCERN
The accompanying consolidated financial statements
have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal
course of business. The Company has incurred material recurring losses from operations. The Company has not generated material revenues
since inception and has generated losses totaling $3,923,677 since inception.
The consolidated financial statements do not contain
any adjustments to reflect the possible future effects on the classification of assets or the amounts and classification of liability
that may result should the Company be unable to continue as a going concern.
NOTE 3 – SEGMENT DATA
The Company has three reportable
segments, which it believes best reflect how the Company is currently managed — Generic Drugs, Gene Therapy and Pharmaceutical
Programs. The Generic Drugs segment consists of a portfolio of drugs and biosimilar biologics selling hard-to-source, difficult to find
generic drugs and off-patent biologic therapies and proprietary and patented technology platforms that include a library of melanocortin
receptor-binding molecules, an invitro diagnostic for neurodegenerative diseases. The Generic Drug segment operations focuses on bringing
various generic drugs to market primarily in the U.S. and Europe markets. The Gene Therapy segment uses a gene therapy approach to
introduce a therapeutic protein called “Klotho” inside the body to treat neurodegenerative diseases and other diseases of
aging. The Pharmaceutical Programs segment consists of treatments using small drug molecules that bind to the melanocortin receptors on
human cells and affect skin pigmentation and other initiatives. The assets of the segments consist of the following at December 31, 2023
and 2022:
| |
December 31, 2023 | | |
December 31, 2022 | |
| |
| | |
| |
Generic drugs: | |
| | |
| |
Licenses | |
$ | 2,101,713 | | |
$ | 2,123,750 | |
Gene therapy: | |
| | | |
| | |
Patents | |
| 48,420 | | |
| 86,160 | |
Pharmaceutical programs: | |
| | | |
| | |
Licenses | |
| 36,015 | | |
| - | |
Total | |
$ | 2,186,148 | | |
$ | 2,209,910 | |
The following
table presents the Company’s reportable segment results for the three and Years ended December 31, 2023 and 2022:
| |
For the Twelve Months Ended | |
| |
December 31, 2023 | | |
December 31, 2022 | |
| |
| | |
| |
Expenses: | |
| | | |
| | |
Generic drugs | |
$ | 355,358 | | |
$ | 402,543 | |
Gene therapy | |
| 339,600 | | |
| 196,050 | |
Pharmaceutical programs | |
| 12,500 | | |
| - | |
Total | |
| 707,458 | | |
| 598,593 | |
| |
| | | |
| | |
Net loss: | |
| | | |
| | |
Generic drugs | |
| (355,358 | ) | |
| (402,543 | ) |
Gene therapy | |
| (339,600 | ) | |
| (196,050 | ) |
Pharmaceutical programs | |
| (12,500 | ) | |
| - | |
Total | |
$ | (712,095 | ) | |
$ | (598,593 | ) |
NOTE 4 – LICENCES AND PATENTS
Licenses
During 2015, the Company acquired two licenses
two licensed platform technologies, a biosimilar biologics platform that uses biologic therapies to treat cancer – recombinant antibodies,
and a gene therapy platform which uses a gene therapy approach to introduce a therapeutic protein called “Klotho” inside the
body to treat neurodegenerative diseases. The licenses were valued at $736,983.
On September 12, 2022, the Company acquired
four market-approved anti-cancer drugs approved for sale in Germany for $1,308,270. The purchase price consisted of a short-term
promissory note for $1,308,270. The purchase price represents the fair value of the intangible asset based on the net present value of
the projected gross profit to be generated by the licenses.
On January 27, 2023, the Company signed a License
Agreement with Teleost Biopharmaceutic, LLC to acquire various assets for the Company’s proprietary pharmaceutical program segment.
The license includes the use of patented small drug molecules that bind to the melanocortin receptors on human cells and affect skin pigmentation.
The terms include a $10,000 fee for signing the agreement and a $50,000 payment on January 27, 2024. The Company will pay for all new
patent costs for new discoveries and new treatments. The Company will make standard commercial development-based milestone payments for
the various stages of license development and regulatory approval. In addition, the Company will make royalty payments on the net sales
for commercial products. Beginning in 2025, the Company will also pay patent and license maintenance fees.
On March 5, 2023, the Company signed a Non-Exclusive
License Agreement with Heidelberg University to grant non-exclusive rights to various licenses owned and under development by the university.
The licenses includes the use of modified AAV capsid polypeptides for treatment of muscular diseases. The terms include a €50,000
($56,325) fee for signing the agreement and €100,000 ($112,650) payment within 60 days of the anniversary of signing the agreement.
The Company will pay €1,000,000 ($1,126,500) for each assignment of a right to a license owned by the university. For new licenses,
the Company will make standard commercial development-based milestone payments for the various stages of license development and regulatory
approval. The Company will make 2 % royalty payments by January 31st each year during the term of the agreement for each licensed
product for the proceeding calendar year. At December 31, 2023, the Company paid $56,325 under the agreement.
On December 1, 2023, the Company signed a license agreement with TransferTech
Sherbooke for the rights to develop and commercialize the technology of a “Needleless Syringe”. Under the terms of the agreement
the Company pays a $26,060 upfront fee and royalty fees on the license income. In addition, TransferTech Sherbooke will be compensated
with $50,000 in unregistered shares of the Company’s common stock the day prior to the merger pending merger with Redwoods Acquisition
Corp. The shares issued will be calculated on a post-reverse split basis. The Company has a planned 1-for-2500 reverse stock split
of its common stock was not declared effective as of December 31, 2023 by FINRA to broker deals in the quotation system. The Company
has not commenced developing the technology. The amount due under the agreement was $26,060 at December 31, 2023.
The total licenses were $2,137,638 and $2,123,750
at December 31, 2023 and 2022, respectively, in the accompanying consolidated balance sheet. The licenses are not in use. Once the licenses
are in use, the licenses will be amortized over the useful life.
Patents
The Company is acquiring patents for Alzheimer,
ALS and other items from third-party. As of December 31, 2023, the patents have not been finalized. Once the patents are declared effective,
the Patents will be amortized over the shorter of a patent’s useful life and its legal useful
life. The patent cost incurred as of December 31, 2023 and 2022 was $48,420 and $86,160, respectively, and reported as patents in the
accompanying consolidated balance sheet. At December 31, 2023, certain patent costs of $47,740 was deemed not capitalizable and were expensed
as professional fees in the accompanying statements for operations.
NOTE 5 – NOTES PAYABLE
On September 12, 2022, the Company issued a $1,308,270
promissory note to acquired four market-approved anti-cancer drugs. See Note 4 – Licenses and Patents for a further
discussion. The promissory note bears interest at 6% and a maturity date of June 30, 2023. The Company has agreed to make a monthly interest
payment of $6,541. By agreement, the interest will stop accruing at June 30, 2023. As of December 31, 2023 and Company made interest payments
of $78,496 to fully satisfy the interest obligation under the promissory note. The unpaid balance principal balance was $1,308,270 and
$1,352,260 at December 31, 2023 and 2022, respectively.
On December 12, 2023, the Company issued a $24,000
promissory note to a member of the CEO household and not a related party. The promissory note accrued interest at a one-time interest
fee of $2,460. The unpaid balance principal and interest balance was $26,460 at December 31, 2023.
NOTE 6 – EQUITY TRANSACTIONS
The Company was established with three classes
of stock, common stock – 1,500,000,000 shares authorized at a par value of $0.0001 Class B preferred stock 500,000 shares authorized
at a par value of $0.001 and Class C preferred stock 5,000,000 shares authorized at a par value of $0.0001.
On December 31, 2023 and 2022, the Company issue
and outstanding common stock was 1,044,861,360 shares, 405,250 shares of Class B preferred stock and 1,000,000 shares of Class C preferred
stock.
On November 1, 2021, the shareholders of the Company
approved a 1-for-2500 reverse split. As of December 31, 2023, the reverse split has not been declared effective by FINRA to broker deals
in the quotation system.
On February 1, 2022, the Company entered into
a Stock Purchase Agreement with an individual to sell 1,666,667 shares of the Company’s common stock for $250,000 or $0.15 shares. The
shares issued will be calculated on a post-reverse split basis. The Company has a planned 1-for-2500 reverse stock split of its common
stock was not declared effective as of December 31, 2023 by FINRA to broker deals in the quotation system. The shares have not been
issued to the individual at December 31, 2023.
On February 22, 2022, the Company entered into
a consulting agreement to provide service to the Company. Pursuant to the agreement, the consultant is compensated with 1,000,000 shares
of the Company’s restricted common stock. The shares were valued at $0.0014 per share. The shares have not been issued to the consultant
on December 31, 2023.
On September 12, 2022, the Company entered into
a Stock Purchase Agreement with an individual to sell 2,000,000 shares of the Company’s common stock for $500,000 or $0.25 shares. The
shares issued will be calculated on a post-reverse split basis. The Company has a planned 1-for-2500 reverse stock split of its common
stock was not declared effective as of December 31, 2023 by FINRA to broker deals in the quotation system. The shares have not been
issued to the individual at December 31, 2023.
On August 15, 2023, the Company entered into a
Stock Purchase Agreement with an individual to sell 300,000 shares of the Company’s restricted common stock for $75,000 or $0.25
shares. The shares issued will be calculated on a post-reverse split basis. The Company has a planned 1-for-2500 reverse stock split
of its common stock was not declared effective as of December 31, 2023 by FINRA to broker deals in the quotation system. The shares have
not been issued to the individual on December 31, 2023.
On August 15, 2023, the Company entered into a Stock Purchase Agreement
with an individual to sell 100,000 shares of the Company’s restricted common stock for $25,000 or $0.25 shares. The shares issued
will be calculated on a post-reverse split basis. The Company has a planned 1-for-2500 reverse stock split of its common stock was
not declared effective as of December 31, 2023 by FINRA to broker deals in the quotation system. The shares have not been issued to the
individual on December 31, 2023.
NOTE 7 – MATERIAL CONTRACTS
On November 27, 2014, the Company signed a License
Agreement and a Manufacturing and Supply Agreement for the monoclonal antibody development license and supply agreement and related
manufacturing with Reliance Life Sciences (RLS), the life science arm of Reliance Industries Pvt Ltd, the largest private company in India.
The contract expires on November 27, 2024 with a 10-year renewal option. The License Agreement entitles the Company to pay $100,000 per
product for a total of three products with milestone payments for meeting certain criteria. In addition, the Company will pay a quarterly
royalty payment of 5% on net sales of finished products. The Manufacturing and Supply Agreement contains an estimated acquisition price
of active pharmaceutical ingredients (API ) of $350,000 per Kg for each product developed. As of December 31, 2023, the Company has
not generated any activity under the agreement.
On October 1, 2020, the Company entered into a
three-year Management Consulting Services Agreement with an individual to provide various services including raising funds for the Company.
The contact terminates on December 31, 2023. The consultant is compensated with 3% of the net proceeds of the any contractual relationship
and equity compensation of up to 3% of the value of the business development contract with restricted share of the Company’s common
stock. As of December 31, 2023, the Company has not generated any activity under the agreement.
On November 19, 2021, the Company sign a consulting
agreement with an individual to raise capital for new medical products and commercialize such products for a 5% commission fee. As of
December 31, 2023, the Company has not generated any activity under the agreement.
On January 24, 2022, the Company signed an exclusive,
world-wide License Agreement with the University of Barcelona for a cell and/or gene therapy that has shown compelling activity in animal
models of human Alzheimer’s disease and amyotrophic lateral sclerosis (“ALS” or “Lou Gehrig’s disease”).
The gene therapy will also be applied to age-related diseases and rare (“Orphan”) diseases. Beginning on December 15, 2022,
the Quarterly license fee is 10,000 Euros. In addition, the Company will pay a Royalty equal to 3% of net sales of finished products.
For the years ended December 31, 2023 and 2022, the Company owes $-0- under the agreement.
On April 5, 2022, the Company entered into a Business
Development and Consulting Agreement with an individual to serve as the Company’s chief business officer. Beginning on May 1, 2022,
the consultant is compensated with $10,000 a month for the three months ended July 31, 2022 and $15,000 thereafter. The consultant works
approximately 80 hours a month. In addition to cash considerations, the consultant was compensated with 1,000,000 shares of the Company’s
common stock valued at $1,400 or $0.0014 per share. As of December 31, 2023, the shares have not been issued to the consultant. The Contract
was terminated on August 15, 2022 with no amount due to the consultant.
On October 19, 2022, the Company sign a M&A/Capital
Markets Advisory Agreement with a firm to advise and assist the Company in negotiating the terms and conditions with respect to a potential
sale, purchase, merger, joint venture, business combination, material change of control, or similar transaction involving the Company
and a strategic acquirer and/or private or publicly listed entity or business, including a Special Purpose Acquisition Company (SPAC),
and with respect to any offerings of any equity, equity-linked or debt securities of the Company or any other party to a financing transaction
and perform such other financial advisory services to the Company. The Company will compensate the firm with an M&A fee, a financing
fee and expenses.
Upon consummation of a transaction, the Company
will pay the firm an M&A fee consisting of an aggregate of a sum equal to the greater of $2,500,000 or the sum of the following amounts:
| ● | four percent (4.0%) of the first $100 MM of Aggregate Value; |
| ● | three percent (3.0%) of any amount of the Aggregate Value between
$100 MM and $200 MM; |
| ● | two percent (2.0%) of any amount of the Aggregate Value between
$200 MM and $300MM; |
| ● | one percent (1.0%) of any amount of the Aggregate Value exceeding
$300 MM |
In addition, the Company will pay the firm a financing
fee of seven percent (7%) of the aggregate amount of proceeds received from investors in the financing of any equity or equity-linked
securities and three percent (3%) of the aggregate amount of proceeds received from the Financing of any non-equity-linked debt securities
and credit facilities. As of December 31, 2023, the Company owes $-0- under the agreement.
On February 1, 2023, the Company entered into
a Consulting Agreement with an individual to advise the Company in the general field of melanocortins, melanocortin receptors and melanocortin
receptor-binding molecules. The consultant will be compensated with $2,500 for 12 months ending on February January 31, 2024. The Consultant
was paid $10,000 upfront for the first four months and $2,500 during March 2023 for an aggregate of $12,500. The Contract was terminated
during March 2023 and with no amount due to or due from the Consultant.
NOTE 8 – RELATED PARTIES
On June 8, 2020, the Company signed a Management
Consulting Services Agreement with an individual to provide services to the Company. In addition, the individual has been appointed a
director and an officer of the Company. The individual is compensated with $10,000 per month. At December 31, 2023, the individual
is owed $55,000 under the consulting agreement with the Company.
On October 10, 2021, the Company signed an Employment
Agreement with Dr, Joseph Sinkule to serve as the Company’s CEO for three years ending on October 9th 2024. In addition,
My Sinkule will serve as a member of the board of directors for a five-year term. Mr. Sinkule’s annual salary will be $240,000 per
year and increase to $360,000 per year upon raising a total of five million dollars ($5,000,000) or more in equity and/or debt financing.
The Company’s CEO has earned $240,000 for the years ended December 31, 2023 and 2022. At December 31, 2023, the Company’s
CEO is owed $80,000 under the agreement.
During November 2022, the Company advanced a
shareholder $300,000 as a short-term loan. The loan is non-interest bearing and due by the end of December 2022. The shareholder repaid
$50,000 during December 2022 and $250,000 in January 2023 to fully satisfy the advance. At December 31, 2023 and 2022, the loan balance
was $-0- and $250,000, respectively and is reported in due from related party in the accompanying consolidated balance sheets.
At December 31, 2023, the aggregate related party
payable was $135,000 and is reported as related party payable in the accompanying consolidated balance sheets.
NOTE 9 – INCOME TAXES
The Company’s policy is to provide for deferred income taxes
based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates that will be in
effect when the differences are expected to reverse. We did not provide any current or deferred U.S. federal income tax provision or benefit
for any of the periods presented because we have experienced operating losses since inception. When it is more likely than not that a
tax asset cannot be realized through future income the Company must allow for this future tax benefit. We provided a full valuation allowance
on the net deferred tax asset, consisting of net operating loss carryforwards, because management has determined that it is more likely
than not that we will not earn income sufficient to realize the deferred tax assets during the carryforward period.
The Company is not aware of any uncertain tax
position that, if challenged, would have a material effect on the financial statements for the year ended December 31, 2023 or during
the prior three years applicable under FASB ASC 740. We did not recognize any adjustment to the liability for uncertain tax position and
therefore did not record any adjustment to the beginning balance of accumulated deficit on the balance sheet. All tax returns for the
Company remain open for examination.
The provision for income taxes differs from the
amount computed by applying the statutory federal income tax rate to income before provision for income taxes. The sources and tax effects
of the differences for the periods presented are as follows:
| |
2023 | | |
2022 | |
Income tax provision at the federal statutory rate | |
| 28 | % | |
| 21 | % |
Effect on operating losses | |
| (28 | )% | |
| (21 | )% |
The net deferred tax assets consist of the following:
| |
December 31, 2023 | | |
December 31, 2022 | |
Deferred tax asset | |
$ | 1,098,630 | | |
$ | 675,406 | |
Valuation allowance | |
| (1,0968,630 | ) | |
| (675,406 | ) |
Net deferred tax asset | |
$ | - | | |
$ | - | |
The change in the valuation allowance for the
year ended December 31, 2022 was an increase of $423,224.
NOTE 10 – SUBSEQUENT EVENTS
On January 19, 2024, the Company entered into
a Stock Purchase Agreement with an individual to sell 200,000 shares of the Company’s restricted common stock for $50,000 or $0.25
shares. The shares issued will be calculated on a post-reverse split basis. The Company has a planned 1-for-2500 reverse stock split
of its common stock was not declared effective as of December 31, 2023 by FINRA to broker deals in the quotation system. The shares have
not been issued to the individual on May 22, 2024.
The Company’s S4 with Redwoods Acquisition
Corp. was declared effective by the SEC on February 14, 2024. The required approval by the stockholders of Redwoods and the Company, approval
by the Nasdaq Stock Market (“Nasdaq”) of the initial listing application of the combined company filed in connection with
the Business Combination, and the fulfillment of other customary closing conditions is expected to be completed in Mayl 2024.
On February 29, 2024, the Company granted three
individuals, two executives and an organization 9,900,000 unregistered shares of the Company’s Common stock for services performed
for the Company. The shares issued will be calculated on a post-reverse split basis. The Company has a planned 1-for-2500 reverse
stock split of its common stock was not declared effective as of December 31, 2023 by FINRA to broker deals in the quotation system. The
shares were valued at $43,560 or $0.0044 per share. The shares have not been issued to the individuals, executives or the university on
May 22, 2024.
On March 1, 2024, the Company filed a Certificate
of Designation with the State of Wyoming to authorize 160,000 shares of Series D Preferred Stock with a par value of $0.001. The Series
D Preferred Stock shall earn cumulative cash dividend at the annual rate of 6.0% of the original purchase price per share. Each Series
D Preferred Stock shall be converted into such number of fully paid and nonassessable shares of common stock as determined by (i) dividing
the original issue price by the automatic conversion rate and (ii) and dividing by the result quotient of ten (10). Each share of Series
D Preferred Stock shall automatically be converted into shares of the Company stock prior to the consummation of the Company’s SPAC
transaction.
On March 4, 2024, the Company sold 50,000 shares
of Series D Preferred Stock for $125,000 or $2.5 per share to an investor. In addition, the investor was granted 100,000 shares of =Series
D Preferred Stock as a commitment fee and a warrant to purchase 1,500,000 shares of the Company’s unregistered common stock. The
warrant has an excise price of $2.5 per share and expires on March 4, 2027. The Company will value the warrant using the Black-Scholes-Merton
valuation model for estimating the fair value of call options.
On March 15, 2024, the Company signed a Management
Consulting Services Agreement with an individual in exchange of 30,000 shares of Series B Preferred stock originally issued on November
1, 2021. On March 31, 2024, the Company cancelled the 30,000 shares of Series B Preferred Stock. The individual is granted a call option
for 3,000,000 unregistered shares of the Company’s Common stock at a $30 acquisition price. The call option expires on March 15,
2029. The shares issued will be calculated on a post-reverse split basis. The Company has a planned 1-for-2500 reverse stock split
of its common stock was not declared effective as of December 31, 2023 by FINRA to broker deals in the quotation system. The shares were
valued at $18,000 or $0.006 per share. The shares have not been issued to the individuals, executives or the university on May 22, 2024.
On March 15, 2024, the Company signed a Management
Consulting Services Agreement to an individual for services to the Company. The individual is compensated with a call option for 1,000,000
unregistered shares of the Company’s Common stock at a $10 acquisition price. The call option expires on March 15, 2029. The shares
issued will be calculated on a post-reverse split basis. The Company has a planned 1-for-2500 reverse stock split of its common stock
was not declared effective as of December 31, 2023 by FINRA to broker deals in the quotation system. The shares were valued at $6,000
or $0.006 per share. The shares have not been issued to the individuals, executives or the university on May 22, 2024.
On March 15, 2024, the Company signed a Management
Consulting Services Agreement with a university for services to the Company. The university is compensated with a call option for 2,000,000
unregistered shares of the Company’s Common stock at a $20 acquisition price. The call option expires on March 15, 2029. The Company
has a planned 1-for-2500 reverse stock split of its common stock was not declared effective as of December 31, 2023 by FINRA to broker
deals in the quotation system. The shares were valued at $12,000 or $0.006 per share. The shares have not been issued to the individuals,
executives or the university on May 22, 2024.
On March 25, 2024, the Company signed an Equity
for Consulting Agreement with an individual to serve as the Company’s Chief Business Officer. The individual is compensated with
1,000,000 unregistered shares of the Company’s Common stock and $10,000 per month effective the first day of Company’s de-SPAC
and public trading. The shares issued will be calculated on a post-reverse split basis. The Company has a planned 1-for-2500 reverse
stock split of its common stock was not declared effective as of December 31, 2023 by FINRA to broker deals in the quotation system. The
shares were valued at $6,700 or $.0067 per share. The shares have not been issued to the individual on May 22, 2024.
On March 27, 2024, the Company amended the December 1, 2023 license
agreement with TransferTech Sherbooke to remove the equity compensation of $50,000 in unregistered shares of the Company’s common
stock for a lump sum cash payment of $50,000 within 10 days after the pending merger with Redwoods Acquisition Corp. The December 1, 2023
license agreement with TransferTech Sherbooke contains the rights to develop and commercialize the technology of a “Needleless Syringe”.
On March 31, 2024, the Company cancelled 50,000 authorized but unissued unregistered shares of the Company’s Common stock which
were due under the agreement.
On March 28, 2024, the Company signed a Securities Purchase Agreement
with an investor for a $1,300,000 convertible promissory note which will fund upon closing the business combination with Redwoods Acquisition
Corp under the Company’s S-4 declared effective on February 14, 2024. The business combination is expected to close in May 2024.
This convertible promissory note will mature 24 months after the aforementioned closing date. The interest on this note shall commence
accruing on the original issuance date and shall be payable, at the Company’s
option, either (i) in cash at 10% per annum or (ii) in freely tradable common shares (at the lower of the conversion price or 10%
discount to the lowest of 5-day VWAP prior to the interest payment date) at 15%
per annum. In addition, the convertible promissory note may be converted upon the aforementioned closing of the business combination
at $9.00 per share; provided, however, the conversion price shall be subject
to a conversion reset as set forth in this convertible note payable. The floor conversion price is the floor price that is in compliance
with the requirements of the Nasdaq Stock Market LLC or another national exchange.
On March 28, 2024, the Company signed a Securities Purchase Agreement
with an investor for a $700,000 convertible promissory note which will fund upon closing the business combination with Redwoods Acquisition
Corp under the Company’s S-4 declared effective on February 14, 2024. The business combination is expected to close in May 2024.
This convertible promissory note will mature 24 months after the aforementioned closing date. The interest on this note shall commence
accruing on the original issuance date and shall be payable, at the Company’s
option, either (i) in cash at 10% per annum or (ii) in freely tradable common shares (at the lower of the conversion price or 10%
discount to the lowest of 5-day VWAP prior to the interest payment date) at 15%
per annum. In addition, the convertible promissory note may be converted upon the aforementioned closing of the business combination
at $9.00 per share; provided, however, the conversion price shall be subject
to a conversion reset as set forth in this convertible note payable. The floor conversion price is the floor price that is in compliance
with the requirements of the Nasdaq Stock Market LLC or another national exchange.
On April 22, 2024, the Company signed a $2,000,000 convertible promissory
note with an investor. The convertible promissory note will mature on April 22, 2026. The note is expected to fund upon closing the business
combination with Redwoods Acquisition Corp under the Company’s S-4 declared effective on February 14, 2024. The business combination
is expected to close in May 2024.The interest on this note shall be payable, at
the Company’s option, either (i) in cash at 10% per annum or (ii) in freely tradable Common Shares (at the lower of the conversion
price or 10% discount to the lowest of 5-day VWAP prior to the interest payment date) at
15% per annum. In addition, the convertible promissory note may be converted upon the aforementioned closing of the business combination
at $9.00 per share; provided, however, the conversion price shall be subject
to a conversion reset as set forth in this convertible note payable. The floor conversion price is the floor price that is in compliance
with the requirements of the Nasdaq Stock Market LLC or another national exchange.
The Company evaluated all events or transactions
that occurred through May 22, 2024. During this period, the Company did not have any other material recognizable subsequent events.
15
Exhibit
99.2
STRATEGIC
ASSET LEASING, INC.
13576
Walnut Street
Omaha,
NE 68144
Financial
Statements and Notes
For
the Three Months Ended March 31, 2024 and 2023
STRATEGIC ASSET LEASING, INC. |
CONSOLIDATED BALANCE SHEETS - Unaudited |
| |
March 31, 2024 | | |
December 31, 2023 | |
| |
| | |
| |
ASSETS | |
| | |
| |
Current assets: | |
| | |
| |
Cash | |
$ | 32,336 | | |
$ | 2,808 | |
Prepaid expenses | |
| - | | |
| 3,840 | |
Total current assets | |
| 32,336 | | |
| 6,648 | |
| |
| | | |
| | |
Other assets | |
| | | |
| | |
Licenses | |
| 2,261,134 | | |
| 2,137,638 | |
Patents | |
| 48,420 | | |
| 48,420 | |
Total other assets | |
| 2,309,554 | | |
| 2,186,058 | |
| |
| | | |
| | |
Total Assets | |
$ | 2,341,890 | | |
$ | 2,192,706 | |
| |
| | | |
| | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | |
| | | |
| | |
| |
| | | |
| | |
Current liabilities: | |
| | | |
| | |
Accounts payable | |
$ | 460,236 | | |
$ | 151,259 | |
Accrued expenses | |
| 2,460 | | |
| 2,460 | |
Related party payable | |
| 185,000 | | |
| 135,000 | |
Note payable | |
| 1,332,270 | | |
| 1,332,270 | |
Dividends payable | |
| 1,911 | | |
| - | |
Total current liabilities | |
| 1,981,877 | | |
| 1,620,989 | |
| |
| | | |
| | |
Commitments and contingencies | |
| - | | |
| - | |
| |
| | | |
| | |
Stockholders’ equity (deficiency): | |
| | | |
| | |
Preferred stock Series B, $0.001 par value; 500,000 shares authorized; 375,250 and 405,250 issued and outstanding as of March 31, 2024 and December 31, 2023, respectively | |
| 375 | | |
| 405 | |
Preferred stock Series C, $0.0001 par value; 5,000,000 shares authorized; 1,000,000 issued and outstanding as of March 31, 2024 and December 31, 2023 | |
| 100 | | |
| 100 | |
Preferred stock Series D, $0.001 par value; 160,000 shares authorized; 150,000 and -0- issued and outstanding as of March 31, 2024 and December 31, 2023, respectively | |
| 150 | | |
| - | |
Common stock, $0.0001 par value; 1,500,000,000 shares authorized; 1,044,861,360 issued and outstanding as of March 31, 2024 and December 31, 2023 | |
| 104,486 | | |
| 104,486 | |
Additional paid in capital | |
| 3,875,594 | | |
| 3,539,003 | |
Common stock to be issued | |
| 976,940 | | |
| 851,400 | |
Accumulated deficit | |
| (4,597,632 | ) | |
| (3,923,677 | ) |
Total stockholders’ equity (deficiency) | |
| 360,013 | | |
| 571,717 | |
| |
| | | |
| | |
Total Liabilities and Stockholders’ equity | |
$ | 2,341,890 | | |
$ | 2,192,706 | |
The accompanying notes are an integral part of these financial statements.
STRATEGIC ASSET LEASING, INC. |
CONSOLIDATED STATEMENTS OF OPERATIONS - Unaudited |
| |
For the Three Months Ended | |
| |
March 31,
2024 | | |
March 31,
2023 | |
| |
| | |
| |
Operating expenses: | |
| | |
| |
Stock compensation expense | |
$ | 287,251 | | |
$ | - | |
Professional fees | |
| 375,596 | | |
| 147,270 | |
General and administrative | |
| 9,198 | | |
| 5,330 | |
Total operating expenses | |
| 672,045 | | |
| 152,600 | |
| |
| | | |
| | |
Net operating income (loss) | |
| (672,045 | ) | |
| (152,600 | ) |
| |
| | | |
| | |
Other (income) expense: | |
| | | |
| | |
Interest expense | |
| - | | |
| 19,936 | |
Other (income) expense | |
| (1 | ) | |
| (53 | ) |
Total Other (income) expense | |
| (1 | ) | |
| 19,883 | |
| |
| | | |
| | |
Net income (loss) | |
$ | (672,044 | ) | |
$ | (172,483 | ) |
| |
| | | |
| | |
Basic and diluted income (loss) per share | |
$ | (0.00 | ) | |
$ | (0.00 | ) |
| |
| | | |
| | |
Weighted average number of common shares outstanding - basic | |
| 1,044,861,360 | | |
| 1,044,861,360 | |
The accompanying notes are an integral part of these financial statements.
STRATEGIC ASSET LEASING, INC. |
CONSOLIDATED
STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT) - Unaudited |
| |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Total | |
| |
Preferred
Stock -
Series B | | |
Preferred
Stock -
Series C | | |
Preferred
Stock -
Series D | | |
Common
Stock | | |
Additional
Paid-In | | |
Stock to be | | |
Accumulated | | |
Stockholders’
Equity | |
| |
Shares | | |
Amount | | |
Shares | | |
Amount | | |
Shares | | |
Amount | | |
Shares | | |
Amount | | |
Capital | | |
Issued | | |
Deficit | | |
(Deficit) | |
Three
Months Ended March 31, 2023 | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
Balance
at December 31, 2022 | |
| 405,250 | | |
$ | 405 | | |
| 1,000,000 | | |
$ | 100 | | |
| 1,000,000 | | |
$ | 100 | | |
| 1,000,000 | | |
$ | 100 | | |
$ | 3,539,003 | | |
$ | 751,400 | | |
| (3,216,219 | ) | |
$ | 2,074,889 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Stock
subscription/compensation - common stock | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
Net
loss, period ended March 31, 2023 | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (172,483 | ) | |
| (172,483 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Balance
at March 31, 2023 | |
| 405,250 | | |
$ | 405 | | |
| 1,000,000 | | |
$ | 100 | | |
| 1,000,000 | | |
$ | 100 | | |
| 1,000,000 | | |
$ | 100 | | |
$ | 3,539,003 | | |
$ | 751,400 | | |
$ | (3,388,702 | ) | |
$ | 1,902,406 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Three
Months Ended March 31, 2024 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Balance
at December 31, 2023 | |
| 405,250 | | |
$ | 405 | | |
| 1,000,000 | | |
$ | 100 | | |
| - | | |
$ | - | | |
| 1,044,861,360 | | |
$ | 104,486 | | |
$ | 3,539,003 | | |
$ | 851,400 | | |
| (3,923,677 | ) | |
$ | 571,717 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Series
D preferred stock subscription | |
| - | | |
| - | | |
| - | | |
| - | | |
| 50,000 | | |
| 50 | | |
| - | | |
| - | | |
| 124,950 | | |
| - | | |
| | | |
| 125,000 | |
Series
D preferred stock commitment fee | |
| - | | |
| - | | |
| - | | |
| - | | |
| 100,000 | | |
| 100 | | |
| - | | |
| - | | |
| 249,900 | | |
| - | | |
| - | | |
| 250,000 | |
Common
stock subscription | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| | | |
| 50,000 | | |
| - | | |
| 50,000 | |
Series
B preferred stock canceled | |
| (30,000 | ) | |
| (30 | ) | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (38,370 | ) | |
| - | | |
| - | | |
| (38,400 | ) |
Issuance
of a warrant | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 111 | | |
| - | | |
| - | | |
| 111 | |
Common
stock compensation | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 75,540 | | |
| - | | |
| 75,540 | |
Class
D preferred stock dividends | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (1,911 | ) | |
| (1,911 | ) |
Net
loss, period ended March 31, 2024 | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (672,044 | ) | |
| (672,044 | ) |
Balance
at March 31, 2024 | |
| 375,250 | | |
$ | 375 | | |
| 1,000,000 | | |
$ | 100 | | |
| 150,000 | | |
$ | 150 | | |
| 1,044,861,360 | | |
$ | 104,486 | | |
$ | 3,875,594 | | |
$ | 976,940 | | |
$ | (4,597,632 | ) | |
$ | 360,013 | |
The accompanying notes are an integral part of these financial statements.
STRATEGIC ASSET LEASING, INC. |
CONSOLIDATED STATEMENTS OF CASH FLOW - Unaudited |
| |
For the Three Months Ended | |
| |
March 31, 2024 | | |
March 31, 2023 | |
Cash flows from operating activities: | |
| | |
| |
Net income (loss) | |
$ | (672,044 | ) | |
$ | (172,483 | ) |
Adjustments to reconcile net loss to net cash used in operating activities: | |
| | | |
| | |
Stock based compensation | |
| 287,251 | | |
| - | |
Changes in operating assets and liabilities: | |
| | | |
| | |
Prepaid expenses | |
| 3,840 | | |
| (112 | ) |
Accounts payable | |
| 308,977 | | |
| 15,436 | |
Accrued expenses | |
| - | | |
| (4,742 | ) |
Related party payable | |
| 50,000 | | |
| - | |
Net cash used in operating activities | |
| (21,976 | ) | |
| (161,901 | ) |
| |
| | | |
| | |
Cash flows from investing activities: | |
| | | |
| | |
Acquisition of licenses (See Note 4) | |
| (123,496 | ) | |
| (10,000 | ) |
Net cash used in investing activities | |
| (123,496 | ) | |
| (10,000 | ) |
| |
| | | |
| | |
Cash flows from financing activities | |
| | | |
| | |
Proceeds from common stock subscription | |
| 50,000 | | |
| - | |
Proceeds from Series B preferred stock subscription | |
| 125,000 | | |
| - | |
Advance/Repayment of advance to shareholder | |
| - | | |
| 250,000 | |
Net cash provided by financing activities | |
| 175,000 | | |
| 250,000 | |
| |
| | | |
| | |
Net increase (decrease) in cash | |
| 29,528 | | |
| 78,099 | |
Cash - beginning of the year | |
| 2,808 | | |
| 75,872 | |
Cash - end of the year | |
$ | 32,336 | | |
$ | 153,971 | |
| |
| | | |
| | |
Supplemental disclosures: | |
| | | |
| | |
Interest paid | |
$ | - | | |
$ | 24,678 | |
Income taxes | |
$ | - | | |
$ | - | |
The accompanying notes are an integral part of these financial statements.
Strategic
Asset Leasing, Inc.
Notes
to Consolidated Financial Statements (unaudited)
March
31, 2024
NOTE
1 – ORGANIZATION AND BASIS OF PRESENTATION
Organization
The
accompanying consolidated financial statements include Strategic Asset Leasing, Inc., formerly known as Mammoth Energy Group, Inc. (‘LEAS’
or the ‘Company’), its wholly owned subsidiary and any majority controlling interests.
The
Company was incorporated on February 27, 2006, under the laws of the State of Nevada with the aim of pursuing lithium mining. Prior to
being domiciled in Nevada, the Company was a Canadian corporation known as Technigen Corporation. In March of 2013, management decided
to change the domicile of the Company to Wyoming by filing articles of continuance on March 5, 2013, subsequently dissolving the Nevada
corporation.
On
December 14, 2020, the Company entered a Stock Purchase Agreement with Dr. Joseph Sinkule for 1,000,000 shares of the Company’s
Series C preferred stock. The purchase price was $110,000. Jason Tucker, the Company’s CEO, resigned from the Company and
Mr. Simkule became the Company’s CEO and sole director.
On
November 1, 2021, the Company executed an Agreement and Plan of Merger with Anew Acquisition Corp (“ANEW”), including the
wholly own subsidiary ANEW Oncology, Inc., whereby each issued and outstanding share of ANEW common stock was converted into the right
to receive one-one hundredth (1/100) of a share of the Company’s Series B preferred stock, par value $.001 per share.
After
November 1, 2021, the Company will pursue the development of its licensed rights in major world markets to biologic medicines and gene
therapies that will be developed and commercialized by the Company and affiliates and/or corporate partners.
On
November 1, 2021, the shareholders of the Company approved a name change to ANEW Medical, Inc. and approved a 1-for-2500 reverse split.
On
January 4, 2022, the Company filed an Articles of Amendment with the State of Wyoming, changing its name to “ANEW Medical, Inc.”
and the contemplated 1-for-2,500 reverse split. During January 2022 and in accordance with SEC Rule 10b-17 and FINRA Rule 6490, the Company
submitted documents and other information to FINRA in furtherance of pursuing and obtaining approval of the subject reverse stock split
and name change. The Company must submit the additional documents requested by, and necessary to obtain approval of, FINRA in connection
with the subject reverse stock split and name change. As of December 31, 2023, the reverse split and name change have not been declared
effective by FINRA to broker deals in the quotation system.
On
May 30, 2023, the Company entered into a Business Combination Agreement with Redwoods Acquisition Corp., a Delaware corporation (“Redwoods”),
and Redwoods wholly owned subsidiary ANEW Medical Sub, Inc., a Wyoming corporation (“Merger Sub”), The Business Combination
Agreement and the transactions contemplated thereby were approved by the board of directors of each of Redwoods and the Company.
The
Business Combination Agreement provides, among other things, on the Closing Date, upon the terms and conditions set forth herein and
in accordance with the applicable provisions of the Wyoming Business Corporations Act (the “WBCA”), Merger Sub will
merge with and into the Company, with the Company as the surviving company in the Merger and, after giving effect to such merger, a wholly
owned Subsidiary of Redwoods, and each Company Share will be converted into the right to receive the Merger Consideration, on the terms
and subject to the conditions set forth in the Business Combination Agreement.
The
Business Combination is expected to close, and the related S4 is expected to be effective, in May 2024, following the receipt of the
required approval by the stockholders of Redwoods and the Company, approval by the Nasdaq Stock Market (“Nasdaq”) of the
initial listing application of the combined company filed in connection with the Business Combination, and the fulfillment of other customary
closing conditions.
Business
The
Company was formed to develop essential medicines for the treatment of chronic diseases – cancer, cardiovascular, and neurodegenerative
disorders. The Company currently has acquired two licensed platforms a generic drug portfolio and a biosimilar biologics platform that
uses biologic therapies to treat cancer, and two proprietary, patented technologies involving the melanocortin receptor-binding molecules
and a gene therapy platform which uses a gene therapy approach to introduce a therapeutic protein called “Klotho” inside
the body to treat neurodegenerative diseases.
On
September 12, 2022, the Company acquired five market-approved anti-cancer drugs approved for sale in Germany for $1,386,766. The
Market Authorizations (MA’s) are for four of the drugs that comprise the “FOLFOX” and “FOLFIRI” multi-drug regimens
used in treatment of metastatic colorectal and gastric cancer and in two of the drugs are used to treat metastatic lung cancer. The drugs
are important in the treatment of many solid tumors in both childhood and adult cancers. Previously, the Company acquired two off-patent
biogeneric antibodies from Reliance Life Sciences (RLS), the life science arm of Reliance Industries Pvt Ltd. of Navi Mumbai, India.
During
January 2023, the Company acquired a treatment for small drug molecules that bind to the melanocortin receptors on human cells and affect
skin pigmentation for $20,000.
On
March 5, 2023, the Company signed a Non-Exclusive License Agreement with Heidelberg University to grant non-exclusive rights to various
licenses owned and under development by the university. The licenses includes the use of modified AAV capsid polypeptides for treatment
of muscular diseases.
On
December 1, 2023, the Company signed a license agreement with TransferTech Sherbooke for the rights to develop and commercialize the
technology of a “Needleless Syringe”.
In
accordance with Accounting Standards Codification (“ASC”) 915, Development Stage Entities, the Company is considered to be
in the development stage, with limited operations since incorporating in the United States.
Summary
of Significant Accounting Policies
Basis
of Presentation
The
financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States
of America.
Use
of Estimates
In
preparing financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities
in the balance sheet and revenue and expenses in the statement of expenses. Actual results could differ from those estimates.
Reclassifications
Certain
prior year amounts have been reclassified for comparative purposes to conform to the current-year financial statement presentation. These
reclassifications had no effect on previously reported results of operations. In addition, certain prior year amounts from the restated
amounts have been reclassified for consistency with the current period presentation.
Cash
and Cash Equivalents
For
the purposes of the statement of cash flows, the Company considers all highly liquid investments purchased with an original maturity
of three months or less to be cash equivalents.
Concentrations
of Risk
Cash
and cash equivalents deposited with financial institutions are insured by the Federal Deposit Insurance Corporation (“FDIC”). The
Company did not hold cash in excess of FDIC insurance coverage at a financial institution as of March 31, 2024 and December 31, 2023.
Prepaid
Expenses
The
Company considers all items incurred for future services to be prepaid expenses. The prepaid expenses were $-0- and $3,840 at March 31,
2024 and December 31, 2023, respectively, consisting of the OTC Market annual fee.
Property
and equipment
Property
and equipment are recorded at cost and depreciated on the straight-line method over the estimated useful lives. Expenditures for normal
repairs and maintenance are charged to expense as incurred. The cost and related accumulated depreciation of assets sold or otherwise
disposed of are removed from the accounts, and any gain or loss is included in operations.
Licenses
The
Company acquires medical licenses for the treatment of medical conditions to market and sell in the future. The initial asset cost is
the cost to acquire the license. Once in use, the Company amortizes the license cost over the useful life using the straight-line method.
Patents
The
Company records the cost to acquire a commercial license to technologies and patents as the initial asset cost. Once
the patents are approved and in use, and assuming no litigations expenses, the Company amortizes the patent cost over the useful life
using the straight-line method. The amortization period will not exceed the lifespan of the protection afforded by the patent. If the
expected useful life of the patent is even shorter, the Company will use the useful life for amortization purposes. Thus, the shorter
length of a patent’s useful life and its legal life will be used for the amortization period.
Valuation
of Long-Lived and Intangible Assets
We
assess the impairment of long-lived and intangible assets periodically, or at least annually, and whenever events or changes in circumstances
indicate that the carrying value may not be recoverable. Factors considered important, which could trigger an impairment review, include
the following: significant underperformance relative to historical or projected future cash flows; significant changes in the manner
of use of the assets or the strategy of the overall business; and significant negative industry trends. When management determines that
the carrying value of long-lived and intangible assets may not be recoverable, impairment is measured as the excess of the assets’
carrying value over the estimated fair value. Management is not aware of any other impairment changes that may currently be required;
however, we cannot predict the occurrence of events that might adversely affect the reported values in the future. On an annual basis,
the Company tests the long-lived and intangible assets for impairment based on the projected net present value of cash flows for each
asset. Prior to the annual impairment test, if circumstances change and a long-lived or intangible asset is deemed impaired, an impairment
loss will be immediately recognized in the statements of operations. At December 31, 2022, the date of the last impairment test, it was
determined the estimated fair value exceeded the carry value by in excess of 50%.
Derivative
Financial Instruments
The
Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates
all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives.
For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair
value and is then re-valued at each reporting date, with changes in the fair value reported as charges or credits to income. For option-based
derivative financial instruments, The Company uses the Black-Scholes option-pricing model to value the derivative instruments at inception
and subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as
liabilities or as equity, is reassessed at the end of each reporting period. Derivative instrument liabilities are classified in the
balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within
12 months of the balance sheet date.
Fair
Value Measurements
In
September 2006, the FASB issued ASC 820 (previously SFAS 157) which defines fair value, establishes a framework for measuring fair value,
and expands disclosures about fair value measurements. The provisions of ASC 820 were effective January 1, 2008.
As
defined in ASC 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date (exit price). The Company utilizes market data or assumptions that market participants
would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique.
These inputs can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based
on the observations of those inputs. ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value.
The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement)
and the lowest priority to unobservable inputs (level 3 measurement).
The
three levels of the fair value hierarchy defined by ASC 820 are as follows:
Level
1 – Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets
are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on
an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and
listed equities.
Level
2 – Pricing inputs are other than quoted prices in active markets included in level 1, which are either directly or indirectly
observable as of the reported date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies.
These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities,
time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic
measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be
derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments
in this category generally include non-exchange-traded derivatives such as commodity swaps, interest rate swaps, options and collars.
Level
3 – Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used
with internally developed methodologies that result in management’s best estimate of fair value.
The
Company did not identify any assets or liabilities that are required to be adjusted on the balance sheet to fair value as of March 31,
2024 and December 31, 2023.
Revenue
Recognition
Revenue
is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration
that an entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature,
amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amount of revenue that is recorded
reflects the consideration that the Company expects to receive in exchange for those goods. The Company applies the following five-step
model in order to determine this amount: (i) identification of the promised goods in the contract; (ii) determination of whether
the promised goods are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement
of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance
obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.
The Company only applies the five-step model to contracts
when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods and service transfers
to the customer. Once a contract is determined to be within the scope of ASC 606 at contract inception, the Company reviews the contract
to determine which performance obligations the Company must deliver and which of these performance obligations are distinct. The Company
recognizes as revenues the amount of the transaction price that is allocated to the respective performance obligation when the performance
obligation is satisfied or as it is satisfied. Generally, the Company’s performance obligations are transferred to customers at
a point in time, typically upon delivery.
Income
taxes
The
Company’s policy is to provide for deferred income taxes based on the difference between the financial statement and tax bases
of assets and liabilities using enacted tax rates that will be in effect when the differences are expected to reverse. The U.S. Tax Cuts
and Jobs Act (TCJA) legislation reduces the U.S. federal corporate income tax rate from 35.0% to 21.0% and is effective June 22, 2018,
for the Company. On January 1, 2023, the U.S. federal corporate income tax increased from 21% to 28%. We did not provide any current
or deferred U.S. federal income tax provision or benefit for any of the periods presented because we have experienced operating losses
since inception. When it is more likely than not that a tax asset cannot be realized through future income the Company must allow for
this future tax benefit. We provided a full valuation allowance on the net deferred tax asset, consisting of net operating loss carryforwards,
because management has determined that it is more likely than not that we will not earn income sufficient to realize the deferred tax
assets during the carryforward period.
The
Company is not aware of any uncertain tax position that, if challenged, would have a material effect on the financial statements for
the three-months ended March 31, 2024, or during the prior three years applicable under FASB ASC 740. We did not recognize any adjustment
to the liability for uncertain tax position and therefore did not record any adjustment to the beginning balance of accumulated deficit
on the consolidated balance sheet. The Company is in the process of filing all unfiled tax returns. All tax returns for the Company remain
open for examination.
Basic
and diluted net income per share
Basic
net loss per common share is computed using the weighted average number of common shares outstanding. Diluted earnings per share (EPS)
include additional dilution from common stock equivalents, such as stock issuable pursuant to convertible notes. Common stock equivalents
are not included in the computation of diluted earnings per share when the Company reports a loss because to do so would be anti-dilutive
for the periods presented. On March 31, 2024 the Company’s common stock equivalents consisted of 405,250 shares of Series B preferred
stock outstanding which may be converted into 37,525,000 shares of the Company’s common stock, 150,000 of Series D preferred stock
outstanding which may be converted into 1,500,000 shares of the Company’s common stock and 16,116,667 shares common stock to be
issued to individuals, universities and executives/directors for an aggregate of 55,141,667 shares of common stock.
Research
and Development Cost
Research
and development (R&D) costs are expensed as incurred. R&D costs are related to the Company’s internally funded development
of the Company medical licenses and patents. The Company had R&D costs were $-0- for the three and three months ended
March 31, 2024 and 2023.
Stock
Compensation
The
Company accounts for share-based compensation in accordance with the fair value recognition provisions of the Financial Accounting Standards
Board (“FASB”) Accounting Standards Codification (“ASC”) No. 718 and No. 505. The Company issues restricted stock
to employees and consultants for their services. Cost for these transactions are measured at the fair value of the equity instruments
issued at the date of grant. These shares are considered fully vested and the fair market value is recognized as an expense in the period
granted. The Company recognized consulting expenses and a corresponding increase to additional paid-in-capital related to stock issued
for services. For agreements requiring future services, the consulting expense is to be recognized ratably over the requisite service
period.
The
Company uses the Black-Scholes-Merton valuation model for estimating the fair value of traded options and stock warrants. There
were no stock options outstanding on March 31, 2024 and December 31, 2023. There was a warrant for 1,500,000 shares of the Company’s
common stock outstanding at March 31, 2024.
The
Company recorded stock-based compensation of $251,2511 and $-0- for the three months ended March 31, 2024 and 2023, respectively.
Dividends
As
discussed in Note 6 – Equity Transactions, the Company issued Class D preferred stock which accrues dividends
at a rate of 6% annually. There was $1,911 of dividends payable at March 31, 2024. The dividends have not been declared and are accrued
in the accompanying consolidated balance sheets as a result of a contractual obligation in the Company’s Class D preferred stock
offering.
Related
Parties
The
registrant follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure
of related party transactions.
Pursuant
to Section 850-10-20 the Related parties include (a) affiliates of the registrant; (b) entities for which investments in their equity
securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15,
to be accounted for by the equity method by the investing entity; (c) trusts for the benefit of employees, such as pension and profit-sharing
trusts that are managed by or under the trusteeship of management; (d) principal owners of the registrant; (e) management of the registrant;
(f) other parties with which the registrant may deal if one party controls or can significantly influence the management or operating
policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests;
and (g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an
ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting
parties might be prevented from fully pursuing its own separate interests.
The
financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense
allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the
preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: (a)
the nature of the relationship(s) involved; (b) description of the transactions, including transactions to which no amounts or nominal
amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary
to an understanding of the effects of the transactions on the financial statements; (c) the dollar amounts of transactions for each of
the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that
used in the preceding period; and (d) amounts due from or to related parties as of the date of each balance sheet presented and, if not
otherwise apparent, the terms and manner of settlement.
Recently
Issued Accounting Standards
Management
believes recently issued accounting pronouncements will have no impact on the financial statements of the Company.
NOTE
2 – GOING CONCERN
The
accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets
and satisfaction of liabilities in the normal course of business. The Company has incurred material recurring losses from operations. The
Company has not generated material revenues since inception and has generated losses totaling $4,597,632 since inception.
The
consolidated financial statements do not contain any adjustments to reflect the possible future effects on the classification of assets
or the amounts and classification of liability that may result should the Company be unable to continue as a going concern.
NOTE
3 – SEGMENT DATA
The
Company has three reportable segments, which it believes best reflect how the Company is currently managed — Generic
Drugs, Gene Therapy and Pharmaceutical Programs. The Generic Drugs segment consists of a portfolio of drugs and biosimilar biologics
selling hard-to-source, difficult to find generic drugs and off-patent biologic therapies and proprietary and patented technology platforms
that include a library of melanocortin receptor-binding molecules, an invitro diagnostic for neurodegenerative diseases. The Generic
Drug segment operations focuses on bringing various generic drugs to market primarily in the U.S. and Europe markets. The Gene Therapy
segment uses a gene therapy approach to introduce a therapeutic protein called “Klotho” inside the body to treat neurodegenerative
diseases and other diseases of aging. The Pharmaceutical Programs segment consists of treatments using small drug molecules that bind
to the melanocortin receptors on human cells and affect skin pigmentation and other initiatives. The assets of the segments consist of
the following at March 31, 2024 and December 31, 2023:
| |
March 31,
2024 | | |
December 31,
2023 | |
| |
| | |
| |
Generic drugs: | |
| | |
| |
Licenses | |
$ | 2,225,119 | | |
$ | 2,101,623 | |
Gene therapy: | |
| | | |
| | |
Patents | |
| 48,420 | | |
| 48,420 | |
Pharmaceutical programs: | |
| | | |
| | |
Licenses | |
| 36,015 | | |
| 36,015 | |
Total | |
$ | 2,309,554 | | |
$ | 2,186,058 | |
The
following table presents the Company’s reportable segment results for the three months ended March 31, 2024 and 2023:
| |
For the Three Months Ended | |
| |
March 31,
2024 | | |
March 31,
2023 | |
| |
| | |
| |
Expenses: | |
| | | |
| | |
Generic drugs | |
$ | 385,130 | | |
$ | 110,763 | |
Gene therapy | |
| 286,914 | | |
| 61,720 | |
Pharmaceutical programs | |
| - | | |
| - | |
Total | |
| 672,044 | | |
| 172,483 | |
| |
| | | |
| | |
Net loss: | |
| | | |
| | |
Generic drugs | |
| (385,130 | ) | |
| (110,763 | ) |
Gene therapy | |
| (286,914 | ) | |
| (61,720 | ) |
Pharmaceutical programs | |
| - | | |
| - | |
Total | |
$ | (672,044 | ) | |
$ | (172,483 | ) |
NOTE
4 – LICENCES AND PATENTS
Licenses
During
2015, the Company acquired two licenses two licensed platform technologies, a biosimilar biologics platform that uses biologic therapies
to treat cancer – recombinant antibodies, and a gene therapy platform which uses a gene therapy approach to introduce a therapeutic
protein called “Klotho” inside the body to treat neurodegenerative diseases. The licenses were valued at $736,983.
On
January 24, 2022, the Company signed an exclusive, world-wide License Agreement with the University of Barcelona for a cell and/or gene
therapy that has shown compelling activity in animal models of human Alzheimer’s disease and amyotrophic lateral sclerosis (“ALS”
or “Lou Gehrig’s disease”). The gene therapy will also be applied to age-related diseases and rare (“Orphan”)
diseases. Beginning on December 15, 2022, the Quarterly license fee is 10,000 Euros. In addition, the Company will pay a Royalty equal
to 3% of net sales of finished products. For the three months ended March 31, 2024 and 2023, the Company paid $14,496 and $-0-, respectively,
under the agreement.
On
September 12, 2022, the Company acquired four market-approved anti-cancer drugs approved for sale in Germany for $1,308,270.
The purchase price consisted of a short-term promissory note for $1,308,270. The purchase price represents the fair value of the intangible
asset based on the net present value of the projected gross profit to be generated by the licenses.
On
January 27, 2023, the Company signed a License Agreement with Teleost Biopharmaceutic, LLC to acquire various assets for the Company’s
proprietary pharmaceutical program segment. The license includes the use of patented small drug molecules that bind to the melanocortin
receptors on human cells and affect skin pigmentation. The terms include a $10,000 fee for signing the agreement and a $50,000 payment
on January 27, 2024. The Company will pay for all new patent costs for new discoveries and new treatments. The Company will make standard
commercial development-based milestone payments for the various stages of license development and regulatory approval. In addition, the
Company will make royalty payments on the net sales for commercial products. Beginning in 2025, the Company will also pay patent and
license maintenance fees. At March 31, 2024, the Company has paid $10,000 under the agreement.
On
March 5, 2023, the Company signed a Non-Exclusive License Agreement with Heidelberg University to grant non-exclusive rights to various
licenses owned and under development by the university. The licenses includes the use of modified AAV capsid polypeptides for treatment
of muscular diseases. The terms include a €50,000 ($56,325) fee for signing the agreement and €100,000 ($112,650) payment within
60 days of the anniversary of signing the agreement. The Company will pay €1,000,000 ($1,126,500) for each assignment of a right
to a license owned by the university. For new licenses, the Company will make standard commercial development-based milestone payments
for the various stages of license development and regulatory approval. The Company will make 2 % royalty payments by January 31st
each year during the term of the agreement for each licensed product for the proceeding calendar year. At March 31, 2024 the Company
has paid or committed to pay $165,325 under the agreement.
On
December 1, 2023, the Company signed a license agreement with TransferTech Sherbooke for the rights to develop and commercialize the
technology of a “Needleless Syringe”. Under the terms of the agreement the Company pays a $26,060 upfront fee and royalty
fees on the license income. In addition, TransferTech Sherbooke will be compensated with $50,000 in unregistered shares of the Company’s
common stock the day prior to the merger pending merger with Redwoods Acquisition Corp. The shares issued will be calculated on a post-reverse
split basis. The Company has a planned 1-for-2500 reverse stock split of its common stock was not declared effective as of March
31, 2024 by FINRA to broker deals in the quotation system. The Company has not commenced developing the technology. The amount paid
under the agreement was $26,060 at March 31, 2024.
The
total licenses were $2,261,134 and $2,137,638 at March 31, 2024 and December 31, 2023, respectively, in the accompanying consolidated
balance sheet. The licenses are not in use. Once the licenses are in use, the licenses will be amortized over the
useful life.
Patents
The
Company is acquiring patents for Alzheimer, ALS and other items from third-party. As of March 31, 2024, the patents have not been finalized.
Once the patents are declared effective, the Patents will be amortized over the shorter of a patent’s
useful life and its legal useful life. The patent cost incurred as of March 31, 2024 and December 31, 2023 was $48,420 and reported
as patents in the accompanying consolidated balance sheet. At December 31, 2023, certain patent costs of $47,740 was deemed not capitalizable
and were expensed as professional fees in the accompanying statements for operations.
NOTE
5 – NOTES PAYABLE
On
September 12, 2022, the Company issued a $1,308,270 promissory note to acquired four market-approved anti-cancer drugs. See Note
4 – Licenses and Patents for a further discussion. The promissory note bears interest at 6% and a maturity date of June
30, 2023. The Company has agreed to make a monthly interest payment of $6,541. By agreement, the interest will stop accruing at June
30, 2023. As of March 31, 2024 the Company made interest payments of $78,496 to fully satisfy the interest obligation under the promissory
note. The unpaid balance principal balance was $1,308,270 at March 31, 2024 and December 31, 2023.
On
December 12, 2023, the Company issued a $24,000 promissory note to a member of the CEO household and not a related party. The promissory
note accrued interest at a one-time interest fee of $2,460. The unpaid balance principal and interest balance was $26,460 at March 31,
2024 and December 31, 2023.
NOTE
6 – EQUITY TRANSACTIONS
The
Company was established with four classes of stock, common stock – 1,500,000,000 shares authorized at a par value of $0.0001 Class
B preferred stock 500,000 shares authorized at a par value of $0.001,Class C preferred stock 5,000,000 shares authorized at a par value
of $0.0001 and Class D preferred stock 160,000 shares authorized at a par value of $0.001.
On
March 31, 2024 and December 31, 2023, the Company’s issue and outstanding common stock was 1,044,861,360 shares and 1,000,000 shares
of Class C preferred stock. On March 31, 2024 and December 31, 2023, respectively, the Company’s issue and outstanding shares of
Class B preferred stock was 375,250 and 405,250 shares and Company’s issue and outstanding Class D preferred stock was 150,000
and -0- shares.
Common
Stock
On
November 1, 2021, the shareholders of the Company approved a 1-for-2500 reverse split. As of March 31, 2024, the reverse split has not
been declared effective by FINRA to broker deals in the quotation system.
On
February 1, 2022, the Company entered into a Stock Purchase Agreement with an individual to sell 1,666,667 shares of the Company’s
common stock for $250,000 or $0.15 shares. The shares issued will be calculated on a post-reverse split basis. The Company
has a planned 1-for-2500 reverse stock split of its common stock was not declared effective as of March 31, 2024 by FINRA to broker deals
in the quotation system. The shares have not been issued to the individual at March 31, 2024.
On
February 22, 2022, the Company entered into a consulting agreement to provide service to the Company. Pursuant to the agreement, the
consultant is compensated with 1,000,000 shares of the Company’s restricted common stock. The shares were valued at $0.0014 per
share. The shares have not been issued to the consultant on March 31, 2024.
On
September 12, 2022, the Company entered into a Stock Purchase Agreement with an individual to sell 2,000,000 shares of the Company’s
common stock for $500,000 or $0.25 shares. The shares issued will be calculated on a post-reverse split basis. The Company
has a planned 1-for-2500 reverse stock split of its common stock was not declared effective as of March 31, 2024 by FINRA to broker deals
in the quotation system. The shares have not been issued to the individual at March 31, 2024.
On
August 15, 2023, the Company entered into a Stock Purchase Agreement with an individual to sell 300,000 shares of the Company’s
restricted common stock for $75,000 or $0.25 shares. The shares issued will be calculated on a post-reverse split basis. The Company
has a planned 1-for-2500 reverse stock split of its common stock was not declared effective as of March 31, 2024 by FINRA to broker deals
in the quotation system. The shares have not been issued to the individual on March 31, 2024.
On
August 15, 2023, the Company entered into a Stock Purchase Agreement with an individual to sell 100,000 shares of the Company’s
restricted common stock for $25,000 or $0.25 shares. The shares issued will be calculated on a post-reverse split basis. The Company
has a planned 1-for-2500 reverse stock split of its common stock was not declared effective as of March 31, 2024 by FINRA to broker deals
in the quotation system. The shares have not been issued to the individual on March 31, 2024.
On
January 19, 2024, the Company entered into a Stock Purchase Agreement with an individual to sell 200,000 shares of the Company’s
restricted common stock for $50,000 or $0.25 shares. The shares issued will be calculated on a post-reverse split basis. The Company
has a planned 1-for-2500 reverse stock split of its common stock was not declared effective as of March 31, 2024 by FINRA to broker deals
in the quotation system. The shares have not been issued to the individual on March 31, 2024.
On
February 29, 2024, the Company granted two individuals and two executives/directors 8,850,000 unregistered shares of the Company’s
Common stock for services performed for the Company. The shares issued will be calculated on a post-reverse split basis. The Company
has a planned 1-for-2500 reverse stock split of its common stock was not declared effective as of March 31, 2024 by FINRA to broker deals
in the quotation system. The shares were valued at $38,940 or $0.0044 per share. The shares have not been issued to the individuals or
executives/directors or the university on March 31, 2024.
On
March 15, 2024, the Company signed a Management Consulting Services Agreement with an individual exchange of 30,000 shares of Series
B Preferred stock originally issued on November 1, 2021 for shares of the Company’s common stock. On March 31, 2024, the Company
cancelled the 30,000 shares of Series B Preferred Stock. In exchange, the individual is granted a call option for 3,000,000 unregistered
shares of the Company’s Common stock at a $30 acquisition price. The call option expires on March 15, 2029. The shares issued will
be calculated on a post-reverse split basis. The Company has a planned 1-for-2500 reverse stock split of its common stock was not
declared effective as of March 31, 2024 by FINRA to broker deals in the quotation system. The call option has been exercised. The shares
were valued at $18,000 or $0.006 per share. The shares have not been issued to the individual on March 31, 2024.
On
March 25, 2024, the Company signed an Equity for Consulting Agreement with an individual to serve as the Company’s Chief Operating
Officer. The individual is compensated with 1,000,000 unregistered shares of the Company’s Common stock and $10,000 per month effective
the first day of Company’s de-SPAC and public trading. The shares issued will be calculated on a post-reverse split basis. The
Company has a planned 1-for-2500 reverse stock split of its common stock was not declared effective as of March 31, 2024 by FINRA to
broker deals in the quotation system. The shares were valued at $300 or $.003 per share. The shares have not been issued to the individual
on March 31, 2024.
On
March 27, 2024, the Company amended the December 1, 2023 license agreement with TransferTech Sherbooke to remove the equity compensation
of $50,000 in unregistered shares of the Company’s common stock for a lump sum cash payment of $50,000 within 10 days after the
pending merger with Redwoods Acquisition Corp. The December 1, 2023 license agreement with TransferTech Sherbooke contains the rights
to develop and commercialize the technology of a “Needleless Syringe”. On March 31, 2024, the Company cancelled 50,000 authorized
but unissued unregistered shares of the Company’s common stock which were due under the agreement.
Series
D Preferred Stock
On
March 1, 2024, the Company filed a Certificate of Designation with the State of Wyoming to authorize 160,000 shares of Series D Preferred
Stock with a par value of $0.001. The Series D Preferred Stock shall earn cumulative cash dividend at the annual rate of 6.0% of the
original purchase price per share. Each Series D Preferred Stock shall be converted into such number of fully paid and nonassessable
shares of common stock as determined by (i) dividing the original issue price by the automatic conversion rate and (ii) and dividing
by the result quotient of ten (10). Each share of Series D Preferred Stock shall automatically be converted into shares of the Company
stock prior to the consummation of the Company’s SPAC transaction.
On
March 1, 2024, the Company sold 50,000 shares of Series D Preferred Stock for $125,000 or $2.5 per share to an investor. The Series D
Preferred Stock shall earn cumulative cash dividend at the annual rate of 6.0% of the original purchase price per share. In addition,
the investor was granted 100,000 shares of Series D Preferred Stock as a commitment fee valued at $250,000 or $2.5 per share and a warrant
to purchase 1,500,000 shares of the Company’s unregistered common stock. The warrant was dated March 1, 2024 and has an excise
price of $2.5 per share and expires on March 1, 2027. The Company used the Black-Scholes-Merton option pricing model to estimate the
fair value of the warrant. The fair value of the 1,500,000 warrant is $2,020. The Company will record stock compensation expense over
the expected life of the warrant.
The
following table summarizes all stock warrant activity for the three months ended March 31, 2024:
| |
Warrants | | |
Weighted- Average Exercise Price Per Share | |
Outstanding, December 31, 2023 | |
| - | | |
$ | - | |
Granted | |
| 1,500,000 | | |
| 2.5 | |
Exercised | |
| - | | |
| - | |
Forfeited | |
| - | | |
| - | |
Expired | |
| - | | |
| - | |
Outstanding, March 31, 2024 | |
| 1,500,000 | | |
$ | 2.5 | |
The
Company used the Black-Scholes-Merton option pricing model to estimate the fair value of the warrant with the following assumptions:
Risk-free interest rate | |
| 4.54 | % |
Expected life (in years) | |
| 1.5 | |
Expected volatility | |
| 261.96 | % |
Grant date fair value | |
$ | 0.0049 | |
The
Company records stock compensation expense over the expected life of the warrants in the accompanying consolidated statements of operations.
The Company stock compensation expense was $111 for the three months ended March 31, 2024, in the accompanying consolidated statements
of operations.
NOTE
7 – MATERIAL CONTRACTS
On
November 27, 2014, the Company signed a License Agreement and a Manufacturing and Supply Agreement for the monoclonal antibody
development license and supply agreement and related manufacturing with Reliance Life Sciences (RLS), the life science arm of Reliance
Industries Pvt Ltd, the largest private company in India. The contract expires on November 27, 2024 with a 10-year renewal option. The
License Agreement entitles the Company to pay $100,000 per product for a total of three products with milestone payments for meeting
certain criteria. In addition, the Company will pay a quarterly royalty payment of 5% on net sales of finished products. The Manufacturing
and Supply Agreement contains an estimated acquisition price of active pharmaceutical ingredients (API ) of $350,000 per Kg for
each product developed. As of March 31, 2024, the Company has not generated any activity under the agreement.
On
October 1, 2020, the Company entered into a three-year Management Consulting Services Agreement with an individual to provide various
services including raising funds for the Company. The contact terminates on March 31, 2024. The consultant is compensated with 3% of
the net proceeds of the any contractual relationship and equity compensation of up to 3% of the value of the business development contract
with restricted share of the Company’s common stock. As of March 31, 2024, the Company has not generated any activity under the
agreement.
On
April 5, 2022, the Company entered into a Business Development and Consulting Agreement with an individual to serve as the Company’s
chief business officer. Beginning on May 1, 2022, the consultant is compensated with $10,000 a month for the three months ended July
31, 2022 and $15,000 thereafter. The consultant works approximately 80 hours a month. In addition to cash considerations, the consultant
was compensated with 1,000,000 shares of the Company’s common stock valued at $1,400 or $0.0014 per share. As of March 31, 2024,
the shares have not been issued to the consultant. The Contract was terminated on August 15, 2022 with no amount due to the consultant.
On
October 19, 2022, the Company sign a M&A/Capital Markets Advisory Agreement with a firm to advise and assist the Company in negotiating
the terms and conditions with respect to a potential sale, purchase, merger, joint venture, business combination, material change of
control, or similar transaction involving the Company and a strategic acquirer and/or private or publicly listed entity or business,
including a Special Purpose Acquisition Company (SPAC), and with respect to any offerings of any equity, equity-linked or debt securities
of the Company or any other party to a financing transaction and perform such other financial advisory services to the Company. The Company
will compensate the firm with an M&A fee, a financing fee and expenses.
Upon
consummation of a transaction, the Company will pay the firm an M&A fee consisting of an aggregate of a sum equal to the greater
of $2,500,000 or the sum of the following amounts:
| ● | four
percent (4.0%) of the first $100 MM of Aggregate Value; |
| ● | three
percent (3.0%) of any amount of the Aggregate Value between $100 MM and $200 MM; |
| ● | two
percent (2.0%) of any amount of the Aggregate Value between $200 MM and $300MM; |
| ● | one
percent (1.0%) of any amount of the Aggregate Value exceeding $300 MM |
In
addition, the Company will pay the firm a financing fee of seven percent (7%) of the aggregate amount of proceeds received from investors
in the financing of any equity or equity-linked securities and three percent (3%) of the aggregate amount of proceeds received from the
Financing of any non-equity-linked debt securities and credit facilities. As of March 31, 2024, the Company owes $-0- under the agreement.
On
February 1, 2023, the Company entered into a Consulting Agreement with an individual to advise the Company in the general field of melanocortins,
melanocortin receptors and melanocortin receptor-binding molecules. The consultant will be compensated with $2,500 for 12 months ending
on February January 31, 2024. The Consultant was paid $10,000 upfront for the first four months and $2,500 during March 2023 for an aggregate
of $12,500. The Contract was terminated during March 2023 and with no amount due to or due from the Consultant.
On
March 15, 2024, the Company signed a Management Consulting Services Agreement with an individual exchange of 30,000 shares of Series
B Preferred stock originally issued on November 1, 2021 for shares of the Company’s common stock. On March 31, 2024, the Company
cancelled the 30,000 shares of Series B Preferred Stock. In exchange, the individual is granted a call option for 3,000,000 unregistered
shares of the Company’s Common stock at a $30 acquisition price. The call option expires on March 15, 2029. The shares issued will
be calculated on a post-reverse split basis. The Company has a planned 1-for-2500 reverse stock split of its common stock was not
declared effective as of March 31, 2024 by FINRA to broker deals in the quotation system. The call option has not been exercised as of
March 31, 2024
On
March 15, 2024, the Company signed a Management Consulting Services Agreement to an individual for services to the Company. The individual
is compensated with a call option for 1,000,000 unregistered shares of the Company’s Common stock at a $10 acquisition price. The
call option expires on March 15, 2029. The shares issued will be calculated on a post-reverse split basis. The Company has a planned
1-for-2500 reverse stock split of its common stock was not declared effective as of March 31, 2024 by FINRA to broker deals in the quotation
system. The call option has not been exercised as of March 31, 2024
On
March 15, 2024, the Company signed a Management Consulting Services Agreement with a university for services to the Company. The university
is compensated with a call option for 2,000,000 unregistered shares of the Company’s Common stock at a $20 acquisition price. The
call option expires on March 15, 2029. The Company has a planned 1-for-2500 reverse stock split of its common stock was not declared
effective as of March 31, 2024 by FINRA to broker deals in the quotation system. The call option has been exercised. The shares were
valued at $12,000 or $0.006 per share. The shares have not been issued to the university on March 31, 2024.
NOTE
8 – RELATED PARTIES
On
June 8, 2020, the Company signed a Management Consulting Services Agreement with an individual to provide services to the Company. In
addition, the individual has been appointed a director and an officer of the Company. The individual is compensated with $10,000 per
month. The individual has earned $30,000 for the three months ended March 31, 2024 and 2023. At March 31, 2024 and December 31, 2023,
the individual is owed $85,000 and $55,000, respectively, under the consulting agreement with the Company.
On
October 10, 2021, the Company signed an Employment Agreement with Dr, Joseph Sinkule to serve as the Company’s CEO for three years
ending on October 9th 2024. In addition, My Sinkule will serve as a member of the board of directors for a five-year term.
Mr. Sinkule’s annual salary will be $240,000 per year and increase to $360,000 per year upon raising a total of five million dollars
($5,000,000) or more in equity and/or debt financing. The Company’s CEO has earned $240,000 for the three months ended March 31,
2024 and 2023. At March 31, 2024 and December 31, 2023, the Company’s CEO is owed $100,000 and $80,000, respectively, under the
agreement.
During
November 2022, the Company advanced a shareholder $300,000 as a short-term loan. The loan is non-interest bearing and due by the end
of December 2022. The shareholder repaid $50,000 during December 2022 and $250,000 in January 2023 to fully satisfy the advance. At March
31, 2024 and December 31, 2023, the loan balance was $-0-. .
At
March 31, 2024 and December 31, 2023, the aggregate related party payable was $185,000 and $135,000, respectively, and is reported as
related party payable in the accompanying consolidated balance sheets.
NOTE
9 – SUBSEQUENT EVENTS
The
Company’s S4 with Redwoods Acquisition Corp. was declared effective by the SEC on February 14, 2024. The required approval by the
stockholders of Redwoods and the Company, approval by the Nasdaq Stock Market (“Nasdaq”) of the initial listing application
of the combined company filed in connection with the Business Combination, and the fulfillment of other customary closing conditions
is expected to be completed in May 2024.
On
March 28, 2024, the Company signed a Securities Purchase Agreement with an investor for a $1,300,000 convertible promissory note which
will fund upon closing the business combination with Redwoods Acquisition Corp under the Company’s S-4 declared effective on February
14, 2024. The business combination is expected to close in May 2024. This convertible promissory note will mature 24 months after the
aforementioned closing date. The interest on this note shall commence accruing on the original issuance date and shall be payable, at
the Company’s option, either (i) in cash at 10% per annum or (ii) in freely tradable common shares (at the lower of the conversion
price or 10% discount to the lowest of 5-day VWAP prior to the interest payment date) at 15% per annum. In addition, the convertible
promissory note may be converted upon the aforementioned closing of the business combination at $9.00 per share; provided, however, the
conversion price shall be subject to a conversion reset as set forth in this convertible note payable. The floor conversion price is
the floor price that is in compliance with the requirements of the Nasdaq Stock Market LLC or another national exchange.
On
March 28, 2024, the Company signed a Securities Purchase Agreement with an investor for a $700,000 convertible promissory note which
will fund upon closing the business combination with Redwoods Acquisition Corp under the Company’s S-4 declared effective on February
14, 2024. The business combination is expected to close in May 2024. This convertible promissory note will mature 24 months after the
aforementioned closing date. The interest on this note shall commence accruing on the original issuance date and shall be payable, at
the Company’s option, either (i) in cash at 10% per annum or (ii) in freely tradable common shares (at the lower of the conversion
price or 10% discount to the lowest of 5-day VWAP prior to the interest payment date) at 15% per annum. In addition, the convertible
promissory note may be converted upon the aforementioned closing of the business combination at $9.00 per share; provided, however, the
conversion price shall be subject to a conversion reset as set forth in this convertible note payable. The floor conversion price is
the floor price that is in compliance with the requirements of the Nasdaq Stock Market LLC or another national exchange.
On
April 22, 2024, the Company signed a $2,000,000 convertible promissory note with an investor. The convertible promissory note will mature
on April 22, 2026. The note is expected to fund upon closing the business combination with Redwoods Acquisition Corp under the Company’s
S-4 declared effective on February 14, 2024. The business combination is expected to close in May 2024.The interest on this note shall
be payable, at the Company’s option, either (i) in cash at 10% per annum or (ii) in freely tradable Common Shares (at the lower
of the conversion price or 10% discount to the lowest of 5-day VWAP prior to the interest payment date) at 15% per annum. In addition,
the convertible promissory note may be converted upon the aforementioned closing of the business combination at $9.00 per share; provided,
however, the conversion price shall be subject to a conversion reset as set forth in this convertible note payable. The floor conversion
price is the floor price that is in compliance with the requirements of the Nasdaq Stock Market LLC or another national exchange. The
investor funded $200,000 as of May 31, 2024 under the promissory note.
On
May 2, 2024, the Company signed a Management Consulting Services Agreement with an individual to serve as the Company’s director
or investor and public relations which expired on May 2, 2025. The individual is compensated with 40,000 unregistered shares of the Company’s
Common stock which vests at 10,000 shares every three months beginning August 2, 2024 and $8,000 per month starting June 1, 2024 for
the first six months of the agreement and increase to $10,000 a month for the last six months of the agreement.
On
May 31, 2024, the Company cancelled 12,824 shares of Class B Preferred stock for a group of five individuals. The Class B preferred stock
was valued at $16,415 or $1.28 per share.
On
May 31, 2024, the Company cancelled 2,500,000 shares of common stock to be issued for two consultants of the Company. The stock was valued
at $3,900 or $0.0016 per share.
On
May 31, 2024, the Company granted 500,000 shares of company unregistered common to a group of five scientists for services to the Company.
The stock was valued at $150 or $0.0003 per share.
On
May 31, 2024, the Company granted 3,266,640 shares of company unregistered common to the Company’s CEO as a bonus. The stock was
valued at $980 or $0.0003 per share.
On
May 31, 2024, the Company granted 2,373,401 shares of company unregistered common to a group of 14 individuals for services to the company.
The stock was valued at $712 or $0.0003 per share.
The
Company evaluated all events or transactions that occurred through May 31, 2024. During this period, the Company did not have any other
material recognizable subsequent events.
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Redwoods Acquisition (NASDAQ:RWODW)
過去 株価チャート
から 8 2024 まで 9 2024
Redwoods Acquisition (NASDAQ:RWODW)
過去 株価チャート
から 9 2023 まで 9 2024