PHARMACEUTICAL DEVELOPMENT PROJECT

6 Months Ended

Jun. 30, 2022

Research and Development [Abstract]

PHARMACEUTICAL DEVELOPMENT PROJECT

3. PHARMACEUTICAL DEVELOPMENT PROJECT

On December 28, 2021, the Company entered into an asset purchase agreement with Sapir (the “Purchase Agreement”), pursuant to which the Company acquired all of the assets of Sapir used in connection with the proprietary stabilized formulation of the Epigallocatechin-gallate (EGCG) molecule for further pharmaceutical development (the “Assets”). The consideration to be paid by the Company for the Assets was 1,000,000 shares of Series A Convertible Preferred Stock (the “Preferred Stock”) nominally valued at $1.00 per share (to be issued). Each share of Preferred Stock entitled Sapir to 450 votes per share and was convertible into 450 shares of the Company’s common stock.

The Company recorded the transaction as an asset acquisition as management concluded that all of the gross value received was related to the Assets. The fair value of the assets acquired was estimated to be $2,186,917 using level 2 of the fair value hierarchy. Further, as the Assets were still in development at the time of acquisition, management concluded that there was no alternative future use for the Assets and recorded a charge to acquired in-process research and development expense of $2,186,917 at the closing of the transaction, which consisted of the value assigned to the Preferred Stock to be issued in connection with the Purchase Agreement which was recorded in equity as of December 31, 2021.

On June 6, 2022, the Company and Sapir entered an agreement to rescind the acquisition due to circumstances beyond either party’s control. As a result, the Company recognized a recovery of $2,186,917 during the six months ended June 30, 2022 (2021 - $Nil) representing the reversal the fair value of the Preferred Stock that was to be issued to Sapir in accordance with the Purchase Agreement.