License Agreement

12 Months Ended

Sep. 30, 2022

License Agreement

License Agreement

Note 9. License Agreement

Effective August 23, 2020 the Company’s wholly-owned subsidiary, SomaCeuticals, Inc. entered into an exclusive global license agreement with 7 to Stand, Inc. for the rights to U.S. patent 10,610,592 issued to Fabrizio de Silvestri, Terni, Italy, as inventor, April 7, 2020 for treatment of Multiple Sclerosis. In consideration for the license agreement, SomaCeuticals agreed to pay 7 to Stand a royalty of 7.1% of the net sales of any product developed under the patent on a worldwide basis. Additionally, the Company will issue shares of common stock to 7 to Stand upon completion of the following milestones:

● Common shares representing 5% of total number of outstanding common shares of the Company immediately following any change of control of the Company; the Company issued 29,130,167 shares of common stock as a result of the change of control discussed in Note 5. These shares were issued in July 2021.

● 29,130,167 Common shares immediately following the first round of funding under a private offer of equity or debt securities; These shares were issued in July 2021.

● 29,130,167 Common shares immediately following the commencement of clinical trials for Federal Drug Administration clearance of the product; and

● Common shares representing an adjustment to increase 7 to Stand’s total ownership to 19.99% of total number of outstanding common shares of the Company immediately following FDA clearance of the product for sale. The Company expects to issue 29,130,166 shares of common stock related to this provision if met.

● $40,000 of royalties to be paid to 7 to Stand annually, on a quarterly basis. The license agreement may be terminated by 7 to Stand if 1) SomaCeuticals does not begin clinical trials within one year of the agreement; 2) if SomaCeuticals terminates the continuation of the clinical trials; or 3) shall not commence marketing the product within reasonable time after obtaining FDA approval.

The Company paid $52,000 in royalties during the year ended September 30, 2022 and owes $26,250 of royalties and late fees under this agreement as of September 30, 2022.

During the year ended September 30, 2021, the Company recognized share-based compensation expense of $3,204,318 related to the 58,260,334 shares issued pursuant to the first two milestones described above, based on the closing price of the Company’s common stock on the date the milestone was met.

The Company is currently in default of this agreement.