SPIN-OFF OF NOTATION LABS INC.

3 Months Ended

Mar. 31, 2022

SPIN-OFF OF NOTATION LABS INC.

Spin-off of notation labs inc

NOTE 2 – SPIN-OFF OF NOTATION LABS INC.

On January 24, 2022, the Company completed the spin-off of its subsidiary Notation Labs Inc into a stand-alone company. Each holder of the common stock received one share of Notation labs, Inc common stock for every four shares of the Company’s common stock held at the close of business on December 10, 2021, the record date of the distribution. In contemplation of the Spin-off, the Notation Labs business, the historical results of operations, assets and liabilities, and the cash flows of Notation Labs are reflected as discontinued operations. Prior to the Separation, net assets attributable to Notation Labs were as follows:

Assets
Cash and cash equivalents	79,517
Due to related party	486,500
Total Assets of Discontinued Operations	566,017
Liabilities
Trade accounts payable and accrued liabilities	75,918
Due to related party	200
Notes payable - related party	400,000
Notes payable	21,340
Royalty liability	460,000
Total current liabilities of discontinued operations	957,458
Net liabilites spun off to shareholders	(391,441	)

Discontinued Operations

The components of assets and liabilities of discontinued operations that are stated separately as of December 31, 2021 in the Consolidated Balance Sheets are comprised of the following items:

	December 31
	2021
Assets
Cash and cash equivalents		20,831
Total Assets of Discontinued Operations
Liabilities
Trade accounts payable and accrued liabilities		76,739
Due to related party		200
Notes payable - related party		200,000
Notes payable		21,340
Royalty liability		460,000
Total current liabilities of discontinued operations		758,279

The components of loss from discontinued operations, net of tax for the Notation Labs business are as follows:

	March 31,
	2022
Selling, general and administrative		683
Research and development		25,804
Other (income) expense, net		2
loss from discontinued operations before taxes		26,489
Taxes on income		-
Loss from discontinued operations, net of taxes		26,489

The components of cashflows from discontinued operations for the Notation Labs business are as follows:

	March 31
Cash Flows from Operating Activities:	2022
Retained earnings transferred to Notation labs		391,441
Net assets transferred to Notation labs		134,831
Net liabilites tranferred to Notation labs		(536,114	)
Accounts payable and accrued liabilities		(825	)
Net transfers to Notation Labs included in Net Cash used in operating activites included in Discontinued Operations		(10,667	)
Cash Flows from Financing Activities:
Proceeds from notes payable related party		(114,000	)
Net transfer to Notation labs from financing activites		151,160
Net transfers to Notation Labs included in Net Cash Provided by Financing activites  Discontinued Operations		37,160