UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-K

 

(Mark One)

 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the fiscal year ended December 31, 2021

 

OR

 

 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from              to             .

 

Commission file number:  000-56010

 

MESO NUMISMATICS, INC.

(Exact name of registrant as specified in its charter)

 

Nevada   88-0492191
(State or other jurisdiction of
incorporation or organization)
  (I.R.S. Employer
Identification No.)

 

433 Plaza Real Suite 275

Boca Raton, Florida 33432

(Address of principal executive offices) (Zip Code)

 

(800) 956-3935

(Registrant’s telephone number, including area code)

 

(Former name, former address and former fiscal year, if changed since last report)

 

Securities registered under Section 12(b) of the Exchange Act: None

 

Securities registered under Section 12(g) of the Exchange Act: Common Stock, par value $0.001 per share

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐    No ☒

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐   No ☒

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☒   No ☐ 

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☐   No ☒ 

 

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.. 

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer Accelerated filer
Non-accelerated filer Smaller reporting company
  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. ☐

 

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No  

 

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter $2,282,559.

 

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date: 12,161,403 shares as of April 29, 2022

 

 

 

 

 

TABLE OF CONTENTS

 

PART I   1
     
ITEM 1. BUSINESS 1
     
ITEM 1A. RISK FACTORS 9
     
ITEM 1B. UNRESOLVED STAFF COMMENTS 19
     
ITEM 2. PROPERTIES 19
     
ITEM 3. LEGAL PROCEEDINGS 19
     
ITEM 4. MINE SAFETY DISCLOSURES 19
     
PART II   20
     
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

20

     
ITEM 6. [Reserved] 21
     
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 21
     
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 26
     
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 26
     
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 26
     
ITEM 9A. CONTROLS AND PROCEDURES 27
     
ITEM 9B. OTHER INFORMATION 27
     
ITEM 9C Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 27
     
PART III   28
     
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 28
     
ITEM 11. EXECUTIVE COMPENSATION 30
     
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS 31
     
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE 31
     
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES 32
     
PART IV   33
     
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES 33
     
ITEM 16. 10-K SUMMARY 33
     
SIGNATURES 34

 

i

 

 

As used in this Annual Report on Form 10-K, unless the context otherwise requires, the terms the “Company,” “Registrant,” “we,” “us,” “our,” “Meso,” or “MSSV” refer to Meso Numismatics, Inc., a Nevada corporation.

 

FORWARD-LOOKING STATEMENTS

 

Except for statements of historical fact, some information in this document contains “forward-looking statements” that involve substantial risks and uncertainties. You can identify these forward-looking statements by words such as “may,” “will,” “should,” “anticipate,” “estimate,” “plans,” “potential,” “projects,” “continuing,” “ongoing,” “expects,” “management believes,” “we believe,” “we intend” or the negative of these words or other variations on these words or comparable terminology. The statements that contain these or similar words should be read carefully because these statements discuss our future expectations, contain projections of our future results of operations or of our financial position, or state other forward-looking information. We believe that it is important to communicate our future expectations to our investors. However, there may be events in the future that we are not able accurately to predict or control. Further, we urge you to be cautious of the forward-looking statements which are contained in this registration statement because they involve risks, uncertainties and other factors affecting our operations, market growth, service, products and licenses. The factors listed in the sections captioned “Risk Factors” and “Description of Business,” as well as other cautionary language in this registration statement and events in the future may cause our actual results and achievements, whether expressed or implied, to differ materially from the expectations we describe in our forward-looking statements. We operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for us to predict all of those risks, nor can we assess the impact of all of those risks on our business or the extent to which any factor may cause actual results to differ materially from those contained in any forward-looking statement. The forward-looking statements in this registration statement are based on assumptions management believes are reasonable. However, due to the uncertainties associated with forward-looking statements, you should not place undue reliance on any forward-looking statements. Further, forward-looking statements speak only as of the date they are made, and unless required by law, we expressly disclaim any obligation or undertaking to publicly update any of them in light of new information, future events, or otherwise. The occurrence of any of the events described as risk factors or other future events could have a material adverse effect on our business, results of operations and financial position. Since our common stock is considered a “penny stock,” we are ineligible to rely on the safe harbor for forward-looking statements provided in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”).

 

ii

 

 

PART I

 

ITEM 1. BUSINESS

 

Overview

 

Meso Numismatics, Inc. has a numismatics operation Meso Numismatics focuses on the Central American Caribbean region with a concentration of products surrounding Mesoamerica (Mexico to Panama).

 

Having locations in Costa Rica and Florida for the purposes of conveniently shipping products, the Company has the ability to export its inventory of coins, paper currency, bullion and medals from Costa Rica, to be sold in the U.S. and around the world. Likewise, the Company also imports such products back to Costa Rica, to be sold throughout the local markets.

 

The Company adheres to strict processes related to acquisition and sale of its products. It begins by selecting the best inventory, be it a rare coin from Latin America, or a banknote with an error from the United States. Inventory is carefully screened by management, is then sent to be graded by the proper grading authority. For all coins, medals and bullion, the Company’s inventory is sent to the Numismatic Guaranty Company for authentication and grading. For all banknotes, the Company utilizes the services of Paper Money Guaranty, LLC for authentication and grading, both Florida-based companies. Once graded, the inventory is sent to the Company’s Florida-based location prior to being sent to one of the Company’s many customers around the world.

 

The Company maintains an online store with eBay (www.mesocoins.com) and participates in live auctions with major companies such as Heritage Auctions, Stacks Bowers Auctions, Lyn Knight Auctions and Sedwick Coins for the sale of its coins, paper currency, bullion and medals. The Company also launched a new application technology available on the Google Play Store, as well as the Apple App Store. The Application is a banknote scanner which instantly identifies key characteristics of a banknote. This includes the catalog reference number of the note, the value, which entity it was issued by, the country of origin and the printer that printed the note. A picture of each note from our database of more than 61,000 banknotes from a combined 750 countries and regions will also be included with the information. For the numismatic industry in particular, this application eliminates the need for reference books, as well as the hours of time it takes to reference all the information about banknotes. With a simple snap of a picture, information is provided to the end-user almost instantaneously.

 

On August 18, 2021, through a Stock Purchase Agreement in which 100% of the outstanding shares of Global Stem Cell Group, Inc. were acquired for $225,000 in cash, the issuance of 1,000,000 shares of preferred series AA stock and the issuance of 8,974 shares of preferred series DD stock and the Company acquired the assets and assumed the liabilities of Global Stem Cells Group, Inc. In addition, the company has allocated $8.2M for delivery to an escrow account being set up by LANs holdings.

 

There are currently 50,000 shares of Series AA Preferred Stock held by David Christensen, the Company’s CEO. As a result of the issuance of 1,000,000 shares of Series AA Preferred Stock to Benito Novas, a change of control has occurred. The amended certificate of designation for the Series AA Preferred Stock provides that all of the holders of the Series AA Preferred Stock together, voting separately as a class, shall have an aggregate vote equal to sixty-seven (67%) percent of the total vote on all matters submitted to the stockholders. The amended certificate of designation for the Series AA Preferred Stock further provides that a unanimous consent of the holders of Series AA Preferred Stock is necessary for, among other things, a change in control of the Company, requiring the votes of both Messrs. Christensen and Novas.

 

1

 

 

Global Stem Cell Group Operations

 

Global Stem Cells Group’s operations are dedicated to the regenerative medicine industry. We work with doctors and their staff to provide products, solutions, equipment, services, and training to help them be successful in the application of Stem Cell Therapies. Our team combines solutions from extensive clinical research with the manufacturing and commercialization of viable cell therapy and immune support related products that we believe will change the course of traditional medicine around the world forever. Our strategy allows us the ability to create immediate revenue streams through product sales, distribution, and clinical applications, driven by our extensive education platform. Our revenue comes directly from the training and the seminars, from the resale of these kits, products, and equipment, services, and from the reoccurring application of our process using the kits and solutions we provide.

 

Global Stem Cells Group is a leader in the Stem Cell and Regenerative Medicine fields, covering clinical research, patient applications, along with physician training through our state-of-the-art global network of companies. The Company’s mission is to enable physicians to make the benefits of stem cell medicine a reality for patients around the world. They have been educating doctors on the science and application of cell-based therapeutics for the past 10 years. Our professional trademarked association “ISCCA” INTERNATIONAL SOCIETY FOR STEM CELL APPLICATION is a global network of medical professionals that leverages these multinational relationships to build best practices and further our mission.

 

The Company envisions the ability to improve “health-span” through the discovery and developments of new cellular therapy products, and cutting-edge technology. 

 

Global Stem Cells Group, as almost everyone else in the world, was severely affected by the covid 19 pandemic. As we look to recover in 2022, we are integrating every aspect of the regenerative medicine industry. During 2022, we plan to add manufacturing and commercialization of viable cell therapy and immune support related products that we believe will change the course of traditional medicine around the world forever.

 

We believe this strategy will allow us the ability to increase our current revenues and create immediate revenue streams through product sales, distribution, and clinical applications, driven by our extensive education platform here are our main projects and revenue generators for 2022 and beyond.

 

Manufacturing Facilities

 

Permanent Treatment Center of Excellence and Physician Training in Istanbul, Turkey

 

Our Flagship Operation in “Istanbul Center” deploys well-targeted combinations of Exosomes, allogeneic human Mesenchymal cells, autologous bone marrow, and Adipose derived stem cells to treat a wide array of diseases and debilitating medical conditions.

 

Since 2018, we have completed over 7 industry seminars and training sessions in Istanbul. Through our joint venture/partnership with Biotrend Technology that was completed in February this year, our treatment plans are focused mostly on a systemic and/or whole-body approach. This new processing facility works with our local partner to provide the latest in Stem Cell Therapies to many of those in this region who have no access to these kinds of cutting-edge medical solutions. Our physician training services will help educate and generate demand for our solutions, services, and products.

 

Biotrend Technology’s CEO, Dr Salih Yildrim, is the acting ISSCA Director and this center operates under our brand Global Stem Cell Group name. Biotrend Technology is a fully staffed facility that operates also in other forms or regenerative health procedures that we do not participate in. This Joint Venture operates as a pure revenue sharing agreement whereas we do not own the lease, employees, or any other P&L expenses. They operate under the GSCG name, utilizing our products, services, training, and procedures. Dr. Salih Yildirim sits on our GSCG staff and is the Director of Overseas Operations. He functions as the International Relations Program Manager at Cleveland Clinic Turkey and is GSCG’s Managing Director over BioTrend Medical International. He is also engaged in consulting and identifying business development opportunities locally and regionally

 

Cell Therapy Product Manufacturing Facility in Cancun Mexico

 

The Cancun facility that is to begin operations in July of 2022 has been accredited both by the Mexican General Health Council and Cofepris (Mexican FDA). GSCG’s processing operation is in the well-known HELLIMEX, S.A. DE CV building, a high-rise office of leased suites that provide a multitude of other professional services.

 

We have assembled a highly qualified team of medical professionals and technicians that specialize in GSCG’s processes, solutions, and services. Our processing facilities in Cancun is top-notch, and include a laboratory to culture-expand cells, a process that yields better patient results, and a cryopreservation unit to keep these extracted samples stored safely until they are needed. This Laboratory/ Treatment Center will have the latest technologies available including NK Cell Therapy CAR T-cell for cancer treatment and produce full Lines of Msc and Exosomes. Our model is to work hand-in-hand with the patients’ physicians to provide a total quality experience in this innovative industry. Our revenue is derived from training doctors, providing services to each patient that these doctors bring to us for treatments, and the solutions and products they utilize.

 

2

 

 

Cell Therapy Product manufacturing facility in Dubai UAE

 

Similar to Cancun, we are in the process of building out a leased suite and equipping this facility in the well-known healthcare city DUBAI UAE. This facility will serve patients and physicians from the Middle East and Asia and will have the same capabilities as our Cancun counterpart.

 

Products

 

Solidifying and increasing our Presence worldwide www.cellgenic.com, we are completing our new catalog of Cell Therapy products manufactured completely in house as opposed of our previous re seller model. This new series of products include:

 

CELLGENIC FLOW EXOSOMES This is the company’s flagship product, which stands ready to revolutionize the practice of regenerative medicine as we know it today. Exosomes are extracellular vesicles that float freely within the blood, very much like platelets. These are cell-derived non-particles that play a pivotal role in cell-to-cell communication that are involved in a wide range of physiological processes. Exosomes play an important role in the transfer of proteins and other bioactive molecules between cells and regulate gene expression in recipient cells, thus influencing various molecular pathways and have a wide range of therapeutic implications, including hair loss and pain management.

 

CELLGENIC MSC (Mesenchymal Stem Cell) This product excretes growth factors, cytokines, and proteins, which all play a key role in the regeneration of tissue. Their anti-inflammatory and immunomodulatory properties mean that it is difficult for them to be rejected by the body. Additionally, they increase blood flow to the vital organs that need it the most. MSC has immunomodulatory effects that have an effect on macrophages, neutrophils, NK cells, mast cells and dendritic cells in innate immunity with known anti-inflammatory benefits.

 

CELLGENIC LUMA (Lyophilized Exosomes) is derived from human umbilical cord mesenchymal stem cells and includes potent growth factors, peptides, coenzymes, minerals, amino acids, vitamins and UV radiation reducing agents for skin revitalization. Exosomes are extracellular vesicles, which is the medical term for tiny bubbles that are released from stem cells. Exosomes carry genetic information and proteins to cells throughout your body, and they create paths for communication between cells to help combat aging skin, environmental damage and loss of elasticity and tone.

 

VITANOVAS is a mobile IV infusion company that provides in-home treatments to patients in need of immune modulation to help fight infections, viruses, and diseases.

 

GCELL RESTORE GCell technology is a closed-system medical device that harnesses the natural and powerful restorative capabilities of adipose tissue. It is a cutting-edge tool that utilizes micrograft technology to harness the natural and powerful restorative capabilities of adipose tissues. This is a precise system that is able to process a stem cell sample from adipose tissue in less than half of the time that it would take a physician to do so through traditional means. This allows the patient to be more comfortable throughout the shorter procedure, as less anesthesia is also required than when operating under traditional means. The GCell is a minimally invasive, portable machine that allows physicians to fully unlock the potential of regenerative medicine as a component in their practice.

 

CELLGENIC SVF is an isolation kit system that has all the ingredients and consumables for the extraction of adipose-Derived Stem cells from fat. This complete kit it is currently being used in clinical procedures for lung disease, intra-articular injections for osteoarthritis of the knee and hip, cosmetic surgery, dermal injection, stem cell enriched fat transfer, wounds chronic ulcers among other chronic conditions.

 

CELLGENIC BONE MARROW Cell isolation protocols usually include density gradient centrifugation. With careful attention to detail the BMC system gently and precisely processes bone marrow aspirate for the purest concentration of these cells at the point of care. BMC is part of a developmental effort to provide an effective therapy that is low risk. It recovers a large percentage of platelet rich plasma and other total nucleated cells in a treatment sample. It is a closed system with strong performance outcomes and outstanding product stability.

 

CELLGENIC PRP (Platelet Rich Plasma) is used to encourage healing and reduce inflammation. As a concentrated source of autologous platelets, PRP contains several growth factors and other cytokines that can stimulate the healing of soft tissues.

 

3

 

 

Global Stem Cells Group’s future is looking bright as we look to bounce back from the pandemic effect on our operations. We are uniquely positioned to reach our revenue goals due to our global presence and network of independent businesses. We stand positioned to give the world access to the full spectrum of everything regenerative medicine can offer-- from being a source for products themselves, to sourcing equipment, to treating patients. We are able to do this because of our decade of experience in the field, and because of the world-class leadership and organization of the Group.

 

Leaders in stem cell medicine trust the high quality of Global Stem Cells Group’s world-class stem cell therapies, and physicians all over the world have come to value it as a trusted source for the newest ground-breaking research and development in the field of regenerative Medicine.

 

Patents and Proprietary Rights

 

We are committed to the protection of our intellectual property of proprietary products and process as well as trademarks and other methods described below.

 

Our business includes the development of proprietary cell therapy products as well as revenue generating physician and patient based regenerative medicine / cell therapy training services, cell collection and cell storage services, the sale of cell collection and treatment kits for humans and animals, and the operation of a cell therapy clinic.

 

On February 19, 2019, the U.S. Patent and Trademark Office (“USPTO”) filed US service trademark, 5,682,488 which claims exclusive us of “ISCCA” as INTERNATIONAL SOCIETY FOR STEM CELL APPLICATION to Stem Cell Training Inc a Florida Corporation.

 

On April 30, 2019, the U.S. Patent and Trademark Office (“USPTO”) granted US service trademark, 5,739,089 which claims exclusive us of “ISCCA” as INTERNATIONAL SOCIETY FOR STEM CELL APPLICATION to Stem Cell Training Inc a Florida Corporation.

 

We own proprietary protocols for the harvesting and isolation of Stem Cells Derived from the adipose tissue and Bone marrow.

 

We also own proprietary standard operating procedures for the manufacturing of allogeneic cellular therapy products derived from perinatal tissue.

 

None of these protocols or IP have been patented.. However, we rely on our own trade secrets and proprietary know-how to protect our technology and maintain our competitive position, since patent protection may not be available or applicable to our technology.

 

Competition

 

We face competitors in many different segments of our business models. We face intense competition from companies with much larger capital resources than us, and, as a result, we could struggle to attract customers and gain market share. Many of our existing or future competitors have greater financial resources and greater brand name recognition than we do and, as a result, may be better positioned to adapt to changes in the industry or the economy as a whole. We will strive to advance our products and technology in each of these sectors ahead of our competitors to gain market share. We also face intense competition in attracting and retaining qualified employees. Our ability to continue to compete effectively will depend upon our ability to attract new employees, retain and motivate our existing employees and to compensate employees competitively. We face significant competition in several aspects of our business, and such competition might increase, particularly in the market for regenerative therapies.

 

4

 

 

Our competitors may announce new products, services or enhancements that better address changing industry standards on regenerative care. Any such increased competition could cause pricing pressure, loss of business or decreased customer purchases, any of which could adversely affect our business and operating results.

 

We believe that we have competitive strengths and protection via our depth of services and products that we offer in the regenerative medicine field, including, but without limitation to, cell therapy products, isolation systems, physician training, laboratory build outs, medical tourism, and more.

 

While there are particular or specific competitors in any one of these areas, no one is currently providing the full service one stop solution for such a complete range of offerings in this industry as we are.

 

Furthermore, we compete by becoming a resource, creating standards of practice, advancing the Stem Cell field in general, and by connecting associates and partners in many different aspects of the business.

 

Government Regulations

 

Although Stem Cell therapy is heavily regulated in the US by the Food and Drug administrator, Global Stem Cells group does not focus its business portfolio in US markets, to this end, we have suspended operations in the US. As such, we are not constrained by FDA regulatory jurisdictions. We now operate exclusively in countries where clear regulatory pathways to manufacturing and practice exist.

 

Marketing

 

Global Stem Cell Group uses its vast network of professionals in the regenerative and therapeutic industries to market and grow our business. Training seminars held on location in more than a dozen international locations have helped drive the attraction that is bringing new business to our group. The ISCCA is our professional association and is a global network of medical professionals that leverages these multinational relationships to build best practices and further our mission. Our physician training services educate and generate continued reoccurring demand for our solutions, services, and products.

 

The more we educate physicians about our products and services, the more physician referrals we have received. It has been a difficult task to introduce new methodologies to physicians with more traditional views, but word of mouth has played a crucial role in the growth of our company and our reputation in the industry. We believe our website will further expand our growth as new physicians have an easy to understand synopses of our how our products and services may assist with and benefit their patients. We believe that as our network of physicians widens we will experience significant growth from repeat business from existing clients and with new business from patient referrals.

 

Numismatics Operations

 

Meso Numismatics, Inc., has established a growing numismatics operation Meso Numismatics focuses on the Central American Caribbean region with a concentration of products surrounding Mesoamerica (Mexico to Panama).

 

Having locations in Costa Rica and Florida for the purposes of conveniently shipping products, the Company has the ability to export its inventory of coins, paper currency, bullion and medals from Costa Rica, to be sold in the U.S. and around the world. Likewise, the Company also imports such products back to Costa Rica, to be sold throughout the local markets.

  

The Company adheres to strict processes related to acquisition and sale of its products. It begins by selecting the best inventory, be it a rare coin from Latin America, or a banknote with an error from the United States. All inventory is carefully screened by management, then sent to be graded by the proper grading authority. For all coins, medals and bullion, the Company’s inventory is sent to the Numismatic Guaranty Company for authentication and grading. For all banknotes, the Company utilizes the services of Paper Money Guaranty, LLC for authentication and grading, both Florida-based companies. Once graded, the inventory is sent to the Company’s Florida-based location prior to being sent to one of the Company’s many customers around the world.

 

5

 

 

We maintain an online store with eBay (www.mesocoins.com) and participate in live auctions with major companies such as Heritage Auctions, Stacks Bowers Auctions, Lyn Knight Auctions and Sedwick Coins for the sale of its coins, paper currency, bullion and medals. The Company also launched a new application technology available on the Google Play Store, as well as the Apple App Store. The Application is a banknote scanner which instantly identifies key characteristics of a banknote. This includes the catalog reference number of the note, the value, which entity it was issued by, the country of origin and the printer that printed the note. A picture of each note from our database of more than 61,000 banknotes from a combined 750 countries and regions will also be included with the information. For the numismatic industry in particular, this application eliminates the need for reference books, as well as the hours of time it takes to reference all the information about banknotes. With a simple snap of a picture, information is provided to the end-user almost instantaneously.

 

Meso expects to continue to acquire rare inventory at market rates, from throughout the Meso Region (including Central America and the Caribbean). The inventory is then sent for authentication and grading, followed by said items being sold throughout Meso’s sales outlets. This includes an eBay store with up to, but not limited to, $50,000 in items for sale at any one time. For some of the Company’s rarer inventory, items are sent to major auction houses around the world for sale.

 

As of December 31, 2021, the Company is working on an inventory tracking system by serial number. Until such time the inventory costs cannot be properly confirmed, therefore any inventory balances are expensed during each reporting period.

 

License Agreements

 

Coins / Medals

 

The Company’s inventory is comprised of roughly 50% coins / medals and 50% paper money. The Company has a meticulous process for the acquisition and sales process for each coin item. The Company specializes in coins from the Meso region, but also acquires coins and medals from elsewhere around the world.

 

The process starts by visiting local shops and establishments throughout the Meso region to gather information about the coins that Company’s management is considering for acquisition. Once an item has been selected, it is paid for, then packaged and sent from Meso’s Costa Rica location to the Company’s Florida location. From there, the merchandise is once again examined, then sent to NGC (the Numismatic Guaranty Company) for grading and authentication. After approximately three weeks, the items are sent back to Meso’s Florida location for storage, safekeeping and subsequent distribution to its respective destinations.

 

Management carefully evaluates the grades assigned to each piece of merchandise and then decides which items will be sold through its eBay store, which items will be sold at live auction and which items will be traded for other items. Some pieces are also sent back to Costa Rica for trading, some are sold on eBay and some go to auction powerhouses around the globe.

 

Meso also acquires ungraded coins / medals from eBay, as well as at specialty shops throughout the Meso region and during certain U.S. shows. Those items are taken through the same aforementioned process.

 

Paper Money

 

As indicated above, paper money makes up approximately 50% of Meso’s inventory. The process of acquiring paper money almost mirrors that of coins / medals.

 

Meso’s management often visits local banks and central banks throughout the Meso region. Management selects banknotes within bundles, aiming to acquire rare and exceptional notes. This includes RADARS (the same serial number back-and-forth), errors and uncirculated rarities.

 

The note is then sent from Costa Rica to Florida for grading and authentication. For this service, the Company utilizes the Paper Money Guaranty, which is expected to examine the note in great detail, then offers a grade for its condition. The note is encased, then sent back to Meso’s Florida location for distribution to its final destination. Similarly to coins, management inspects each note, then decides whether it will be sold on eBay, at a specialty auction, or traded for other merchandise in the Meso Region.

 

Similar to coins, Meso also purchases ungraded notes on eBay or at other stores, has them graded through the same process, then decides where to sell it at the end.

 

6

 

 

Industry Overview

 

Numismatics itself is the study or collecting of currency, including but not limited to paper money, coins, medals, tokens and other objects. Numismatics is often associated with stamp collecting, philately, and is equally as popular when it comes to hobbies around the world.

 

The numismatic industry is a multi-billion-dollar market that continues to grow year-over-year. Estimates provided by PNG (The Professional Numismatists Guild) placed the U.S. rare coin market at between $3.4 and $4 billion in 2018.

 

At the forefront of the numismatic industry is NGC (The Numismatics Guaranty Company) and PMG (The Paper Money Guaranty). These two organizations, with locations around the world, are responsible for the majority of authenticating and grading various forms of currency. Since its inception in 1987, NGC has graded more than 42 million coins, with 61% representing the US, 16% representing Asia, $13% representing Europe, and, a combined 8% representing Africa, South America and Australia.

 

Growth Strategy

 

According to an article published in a May 2017 edition of The Economist, the global numismatic market has a value between $5 Billion and $8 Billion per year. It has been noted that out of all the global numismatic sales around the world, the United States is responsible for roughly 85% of the market, further depicted in the chart below. We believe we can capture market share in the U.S. market and we believe we are well positioned to take advantage of, As indicated by the following chart, the Company has the opportunity for growth within the U.S. and the Latin American region as well. The Company has the opportunity for growth within the Latin American region as well. The Company also expects to perform outreach and educate Latin America and Australia about the value of numismatics. 

 

Many Latin American countries postal services are difficult to navigate due to political unrest and corruption. We believe we have an advantage by having boots on the ground in Costa Rica, and associates throughout all of Latin America, which affords us the opportunity to procure almost any type of item and safely have it graded and then sold.

 

Successful importation and exportation of merchandise between Central America and the United States is crucial for the Company. Being able to acquire inventory at reduced costs, then selling the items for healthy profits, once graded, continues to be the key to growth.

 

The Company anticipates organic growth as well growth through acquisitions, as the right opportunities present themselves. The Company has and will continue to reinvest capital in new inventory, further supporting its long-term goal of becoming a recognized, global numismatic brand. Possible future acquisitions include websites / social media pages, in addition to physical numismatic businesses that could become available. These acquisitions could be solely of a company’s inventory, or their physical location and assets as well.

 

Competitive Strengths

 

Technology

 

To our knowledge, Meso Numismatics has the only banknote scanner on the market. The technology, mostly utilized by numismatists, quickly assesses all the information about a banknote and almost instantly displays the information, along with a replica banknote from the database.

 

The Meso App, available on the Google Play Store and the Apple App Store, is expected to eventually be transitioned into a platform to buy, sell, and trade banknotes. Monetization is expected come from advertisers displaying banner ads, as well as transactional fees from the sales of items. The Company also has the ability, although it does not do so yet, to charge the user for general use of the App.

 

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Location

 

Meso Numismatics has office locations in San Jose, Costa Rica and Boca Raton, Florida. Having dual locations, especially in these two areas in particular, is extremely advantageous to the Company.

 

The Costa Rican location of Meso is pivotal for the Company. Management in this location is able to obtain some items, below-market prices due to relationships made within the industry. While a US collector must pay for an item (usually with a premium) plus shipping and handling, having management on the ground allows the Company to acquire items without the extra costs. Management also has relationships with dealers throughout the region and trades / exchanges merchandise for better items. The majority of the Company’s inventory originates in Costa Rica, then is shipped to Florida for grading and authentication.

 

The Boca Raton location of Meso is almost as pivotal as the Costa Rican location, as the leading grader and authenticator of merchandise (PMG and NGC) also has locations in Florida. Merchandise is sent from Costa Rica to Boca Raton. Once inventoried, merchandise is sent to PMG or NGC for grading and authenticating. Once complete, the inventory is returned to the Boca Raton location where it is safely housed and distributed to its final location. Having this location allows the Company to ship items globally at significantly lower rates than shipping from Costa Rica.

 

Strategic Partnerships

 

Meso has strategically partnered with Softon Digital (“Softon”) of Costa Rica, in addition to the above relationships with PMG and NGC. Softon assisted in the development and creation of the Meso App and it is expected that Softon will continue to help the Company evolve the technological portion of the business, with their team of programmers and engineers.

 

Competition

 

In the coins and other collectibles business, we will compete with a number of comparably sized and smaller firms, as well as a number of larger firms throughout the United States. Our primary competitors are American Numismatic Rarities, a comparably-sized coin auctioneer. Many of our competitors have the ability to attract customers as a result of their reputation and the quality collectibles they obtain through their industry connections. Additionally, other reputable companies that sell rare coins and other collectibles may decide to enter our markets to compete with us. These companies have greater name recognition and have greater financial and marketing resources than we do. If these auction companies are successful in entering the specialized market for premium collectibles in which we participate or if dealers and sellers participate less in our auctions, we may attract fewer buyers and our revenue could decrease.

 

Employees

 

As of December 31, 2021, the Company had 1 full-time employee.

 

Corporate History

 

The Company was originally founded in 1999 as Spectrum Ventures LLC, a private company, registered in Tacoma, WA, for the purpose of developing, marketing and selling voice over IP products and services. In 2002, the Company changed its name to Nxtech Wireless Cable Systems, Inc. In August 2007, the Company changed its name to Oriens Travel & Hotel Management Corp. In November 2014, the Company changed its name to Pure Hospitality Solutions, Inc. During 2014, the Board of Directors of the Company deemed it in the best interests of the Company and its shareholders to switch directions and become involved in the business of numismatics, specifically the collection and ultimately the sale of coins, paper currency, bullion and medals. On November 21, 2016 the Company (formerly known as Pure Hospitality Solutions, Inc. a Nevada corporation) entered into an agreement with Meso Numismatics, Corp., a Florida corporation. The respective Boards of Directors of the Pure Hospitality Solutions, Inc. and Meso Numismatics, Corp., at that time, determined that it was advisable and to the advantage of and the best interests of Pure Hospitality Solutions, Inc. and its shareholders and Meso Numismatics, Corp. and its stockholders that Meso Numismatics, Corp. merge with and into Pure Hospitality Solutions, Inc. (the “Merger”). It was at that time, Mr. Melvin Pereira, our prior Chief Executive Officer, who controlled both, Pure Hospitality Solutions, Inc. and Meso Numismatics, Corp. that the Company acquired common control of Meso Numismatics, Corp. and the assets there held. At the completion of the Merger, Meso Numismatics Corp. ceased to exist. In September of 2018 the Company effected a name change and changed its name from Pure Hospitality Solutions, Inc. to Meso Numismatics, Inc.

 

Additional Information

 

The public may read and copy any materials the Company files with the SEC in the SEC’s Public Reference Section, Room 1580, 100 F Street N.E., Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Section by calling the SEC at 1-800-SEC-0330. Additionally, the SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, which can be found at http://www.sec.gov.

 

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Item 1A. Risk Factors.

 

You should carefully consider the risks described below together with all of the other information included in this registration statement before making an investment decision with regard to our securities. The statements contained in or incorporated herein that are not historic facts are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by forward-looking statements. If any of the following risks actually occurs, our business, financial condition or results of operations could be harmed. In that case, you may lose all or part of your investment. In addition to other information in this registration statement and in other filings we make with the Securities and Exchange Commission, the following risk factors should be carefully considered in evaluating our business as they may have a significant impact on our business, operating results and financial condition. If any of the following risks actually occurs, our business, financial condition, results of operations and future prospects could be materially and adversely affected. Because of the following factors, as well as other variables affecting our operating results, past financial performance should not be considered as a reliable indicator of future performance and investors should not use historical trends to anticipate results or trends in future periods.

 

Risks Related to Our Business

 

We have a limited operating history.

 

The Company was incorporated under the laws of the State of Nevada in 2001 and has engaged in limited operations to date. Accordingly, the Company has only a limited operating history with which you can evaluate its business and prospects. An investor in the Company must consider its business and prospects in light of the risks, uncertainties and difficulties frequently encountered by early-stage companies, including limited capital, delays in product development, possible marketing and sales obstacles and delays, inability to gain customer and merchant acceptance or inability to achieve significant distribution of our products and services to customers. The Company cannot be certain that it will successfully address these risks. Its failure to address any of these risks could have a material adverse effect on its business.

 

THE REPORT OF OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM CONTAINS AN EXPLANATORY PARAGRAPH THAT EXPRESSES SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE AS A GOING CONCERN.

 

The report of our independent registered public accounting firm with respect to our financial statements as of December 31, 2021 and for the year then ended indicates that our financial statements have been prepared assuming that we will continue as a going concern. The report states that, he Company suffered a net loss from operations and has a net capital deficiency, which raises substantial doubt about its ability to continue as a going concern. Our plans in regard to these matters are described in Note 2 to our audited financial statements as of December 31, 2021 and 2020 and for the years then ended.

 

WE COMPETE WITH A NUMBER OF COMPANIES IN OUR SPACE AND FACE INCREASED COMPETITION FROM SUCH COMPANIES.

 

In the coins and other collectibles business, we will compete with a number of comparably sized and smaller firms, as well as a number of larger firms throughout the United States. Our primary competitors are American Numismatic Rarities, a comparably-sized coin auctioneer. Many of our competitors have the ability to attract customers as a result of their reputation and the quality collectibles they obtain through their industry connections. Additionally, other reputable companies that sell rare coins and other collectibles may decide to enter our markets to compete with us. These companies have greater name recognition and have greater financial and marketing resources than we do. If these auction companies are successful in entering the specialized market for premium collectibles in which we participate or if dealers and sellers participate less in our auctions, we may attract fewer buyers and our revenue could decrease.

 

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In our cell therapy operations, we face competitors in many different segments of our business models. We face intense competition from companies with much larger capital resources than us, and, as a result, we could struggle to attract customers and gain market share. Many of our existing or future competitors have greater financial resources and greater brand name recognition than we do and, as a result, may be better positioned to adapt to changes in the industry or the economy as a whole. We will strive to advance our products and technology in each of these sectors ahead of our competitors to gain market share. We also face intense competition in attracting and retaining qualified employees. Our ability to continue to compete effectively will depend upon our ability to attract new employees, retain and motivate our existing employees and to compensate employees competitively. We face significant competition in several aspects of our business, and such competition might increase, particularly in the market for regenerative therapies.

 

Our competitors may announce new products, services or enhancements that better address changing industry standards on regenerative care. Any such increased competition could cause pricing pressure, loss of business or decreased customer purchases, any of which could adversely affect our business and operating results.

 

We believe that we have competitive strengths and protection via our depth of services and products that we offer in the regenerative medicine field, including, but without limitation to, cell therapy products, isolation systems, physician training, laboratory build outs, medical tourism, and more.

 

While there are particular or specific competitors in any one of these areas, no one is currently providing the full service one stop solution for such a complete range of offerings in this industry as we are.

 

Furthermore, we compete by becoming a resource, creating standards of practice, advancing the Stem Cell field in general, and by connecting associates and partners in many different aspects of the business.

 

MARKET PRICE FLUCTUATION OF THE COIN MARKET MAY AFFECT INTEREST IN OUR PRODUCTS, SERVICES AND PROFITABILITY

 

The profitability of our operations is directly related to the market price of metals and the numismatic coin market. The market prices of metals and the numismatic coin market fluctuate significantly and are affected by a number of factors beyond our control, including, but not limited to, the rate of inflation, the exchange rate of the dollar to other currencies, interest rates, global economic and political conditions, and the collector’s market. Price fluctuations in the metals and numismatic market from the conception of a potential target to the conclusion of operations can significantly affect profitability. We may begin one or more operations at a time when the price of metals or numismatic coins make operations economically feasible and subsequently incur losses due to market decreases. Adverse fluctuations in the metals or numismatic market may force us to curtail or cease our business operations.

 

CHANGES IN APPLE APP STORE AND GOOGLE PLAY STORE POLICIES COULD RESULT IN OUR MOBILE APPLICATIONS BEING DE-LISTED. IN ADDITION, OUR THIRD PARTY SERVICE PROVIDERS MAY DECLINE TO PROVIDE SERVICES DUE TO THEIR POLICIES, OR CEASE TO PROVIDE SERVICES PREVIOUSLY PROVIDED TO US DUE TO A CHANGE OF POLICY. IN ADDITION TO CHALLENGES WE FACE WITH RESPECT TO COMPLIANCE WITH THE APPLE APP STORE AND GOOGLE PLAY STORE GUIDELINES.

 

The company’s application was developed for the numismatic industry as, what we believe is the world’s first banknote recognition scanner. Any user with a smartphone can simply snap and submit a picture of any banknote and they are quickly greeted with information about the note, such as its reference number, the value of the note, which entity it was issued by, the country of origin, and the exact printing company which printed the note. If this application is removed from the apple app store or the google play store, the company would lose the technology side of the business. The company would still be a numismatic company, but would not have any technology associated with the company.

 

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Failure to attract clients could greatly harm our ability to generate revenue.

 

Our ability to generate revenue is dependent on the continued growth of our sales and technology application. If we are unable to continue to grow our network or bring new clients to our network, our ability to generate revenue would be greatly compromised. There is no guarantee that individuals and businesses will want to join our platform, or that we will be able to generate revenue from the existing clients of the Company.

 

The value of our inventory is subject to volatility in the price of gold and any other precious metal The Company has two types of inventory -- paper money and coin currency. The majority of coins are made of either silver, gold, nickel, platinum, etc. Should the price of these metals decline, we would experience a decline in the value of our inventory.

 

Our operations will be significantly affected by changes in the market price of gold, silver, other precious metals and the valuation of currencies. The prices of these metals and currencies fluctuate widely and are affected by numerous factors, all of which are beyond our control. Some of these factors include the sale or purchase of gold by central banks and financial institutions; interest rates; currency exchange rates; inflation or deflation; fluctuation in the value of the United States dollar and other currencies; speculation; global and regional supply and demand, including investment, industrial and jewelry demand; and the political and economic conditions of major gold or other mineral producing countries throughout the world, such as Russia and South Africa. The price of gold or other minerals have fluctuated widely in recent years, and a decline in the price of gold could cause a significant decrease in the value of our properties, limit our ability to raise money, and render continued exploration and development of our properties impracticable. If that happens, then we could lose our rights to our properties and be compelled to sell some or all of these rights. Additionally, the future development of our properties beyond the exploration stage is heavily dependent upon the level of gold prices remaining sufficiently high to make the development of our properties economically viable. You may lose your investment if the price of gold decreases. The greater the decrease in the price of gold, the more likely it is to have a material adverse impact on our business.

 

WE ARE REQUIRED TO COMPLY WITH A WIDE VARIETY OF LAWS AND REGULATIONS, AND ARE SUBJECT TO REGULATION BY VARIOUS FEDERAL, STATE AND FOREIGN AGENCIES.

 

We are subject to various local, state, federal, foreign and transnational laws and regulations, particularly those relating to the importation and exportation of coins and paper money, tariffs and trade barriers, taxation, exchange controls, current good manufacturing practices, health and safety and our business practices in the U.S. and abroad, such as anti-corruption and anti-competition laws, and, in the future, any changes to such laws and regulations could adversely affect us. Any noncompliance by us with applicable laws and regulations or the failure to maintain, renew or obtain necessary permits and licenses could result in criminal, civil and administrative penalties and could have an adverse effect on our results of operations.

 

WE ARE SUBJECT TO A VARIETY OF LITIGATION THAT COULD ADVERSELY AFFECT OUR RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

 

The improper handling of coins and paper money or accidents involving the transportation of such materials could subject us to liability. In addition, our reputation could be adversely affected by negative publicity surrounding such events regardless of whether or not claims against us are successful. Defending against such claims may divert our management’s attention, may be expensive, and may require that we pay damage awards or settlements or become subject to equitable remedies that could adversely affect our financial condition and results of operations. A successful claim brought against us in excess of available insurance or not covered by insurance or indemnification agreements, or any claim that results in significant adverse publicity against us, could have a material adverse effect on our business and our reputation. Furthermore, the outcome of litigation is inherently uncertain.

 

11

 

 

Risks and Uncertainties Associated with Our Expansion Into and Our Operations Outside of the United States May Adversely Affect Our Results of Operations, Cash Flow, Liquidity or Financial Condition

 

These challenges include: (1) compliance with complex and changing laws, regulations and policies of governments that may impact our operations, such as foreign ownership restrictions, import and export controls, tariffs, and trade restrictions; (2) compliance with U.S. and foreign laws that affect the activities of companies abroad, such as anti-corruption laws, competition laws, currency regulations, and laws affecting dealings with certain nations; (3) the difficulties involved in managing an organization doing business in many different countries; (4) rapid changes in government policy, acts of terrorism, or the threat of international boycotts or U.S. anti-boycott legislation; and (5) currency exchange rate fluctuations.

 

Fluctuations in Foreign Currency Exchange Rates May Adversely Affect Our Results of Operations, Cash Flow, Liquidity or Financial Condition.

 

As a numismatic company, the value of the inventory is not only tied to the price of a metal, but the actual numismatic piece. Since the company has banknotes and coins from around the world, if the price of a foreign currency declines, the value of the inventory may decline as well. In addition, since the Company is able to procure items at discounted rates from the Meso region, if the exchange rates change, the company may be unable to acquire inventory at such discounted costs.

 

We may become subject to legal proceedings that could have a material adverse impact on our financial position and results of operations.

 

From time to time and in the ordinary course of our business, we may become involved in various legal proceedings. All such legal proceedings are inherently unpredictable and, regardless of the merits of the claims, litigation may be expensive, time-consuming and disruptive to our operations and distracting to management. If resolved against us, such legal proceedings could result in excessive verdicts, injunctive relief or other equitable relief that may affect how we operate our business. Similarly, if we settle such legal proceedings, it may affect how we operate our business. Future court decisions, alternative dispute resolution awards, business expansion or legislative activity may increase our exposure to litigation and regulatory investigations. In some cases, substantial noneconomic remedies or punitive damages may be sought. Although we maintain liability insurance coverage, there can be no assurance that such coverage will cover any particular verdict, judgment or settlement that may be entered against us, that such coverage will prove to be adequate or that such coverage will continue to remain available on acceptable terms, if at all. If we incur liability that exceeds our insurance coverage or that is not within the scope of the coverage in legal proceedings brought against us, it could have an adverse effect on our business, financial condition and results of operations.

 

  Certification, licensing or regulatory requirements;
     
  Unexpected changes in regulatory requirements;
     
  Changes to or reduced protection of intellectual property rights in some countries

 

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We intend to continue strategic business acquisitions and other combinations, which are subject to inherent risks.

 

In order to expand our solutions, services, and grow our market and client base, we may continue to seek and complete strategic business acquisitions and other combinations that we believe are complementary to our business. Acquisitions have inherent risks which may have a material adverse effect on our business, financial condition, operating results or prospects, including, but not limited to: 1) failure to successfully integrate the business and financial operations, services, intellectual property, solutions or personnel of an acquired business and to maintain uniform standard controls, policies and procedures; 2) diversion of management’s attention from other business concerns; 3) entry into markets in which we have little or no direct prior experience; 4) failure to achieve projected synergies and performance targets; 5) loss of clients or key personnel; 6) incurrence of debt or assumption of known and unknown liabilities; 7) write-off of software development costs, goodwill, client lists and amortization of expenses related to intangible assets; 8) dilutive issuances of equity securities; and, 9) accounting deficiencies that could arise in connection with, or as a result of, the acquisition of an acquired company, including issues related to internal control over financial reporting and the time and cost associated with remedying such deficiencies. If we fail to successfully integrate acquired businesses or fail to implement our business strategies with respect to these acquisitions, we may not be able to achieve projected results or support the amount of consideration paid for such acquired businesses.

 

Volatility and disruption resulting from global economic conditions could negatively affect our business, results of operations and financial condition.

 

Although certain indices and economic data have shown signs of stabilization in the United States and certain global markets, there can be no assurance that these improvements will be broad-based or sustainable, nor is it clear how, if at all, they will affect the markets relevant to us. As a result, our operating results may be impacted by the health of the global economy. Volatility and disruption in global capital and credit markets may lead to slowdowns or declines in client spending which could adversely affect our business and financial performance. Our business and financial performance, including new business bookings and collection of our accounts receivable, may be adversely affected by current and future economic conditions (including a reduction in the availability of credit, higher energy costs, rising interest rates, financial market volatility and lower than expected economic growth) that cause a slowdown or decline in client spending. Reduced purchases by our clients or changes in payment terms could adversely affect our revenue growth and cause a decrease in our cash flow from operations. Bankruptcies or similar events affecting clients may cause us to incur bad debt expense at levels higher than historically experienced. Further, volatility and disruption in global financial markets may also limit our ability to access the capital markets at a time when we would like, or need, to raise capital, which could have an impact on our ability to react to changing economic and business conditions. Accordingly, if global financial and economic volatility continues or worsens, our business, results of operations and financial condition could be materially and adversely affected. 

 

If we are unable to manage our growth in the new markets in which we offer solutions or services, our business and financial results could suffer.

 

Our future financial results will depend in part on our ability to profitably manage our business in the new markets that we enter. Difficulties in managing future growth in new markets could have a significant negative impact on our business, financial condition and results of operations.

 

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The Operations and Commercialization of Stem Cell Therapies is an exciting, new, and integral part of the emerging Regenerative Medicine market, BUT The field remains in its infancy.

 

As with all new technologies, products, practices and solutions, there are inherit risks related to our industry and business.

 

The field of stem cell therapy is relatively new, and not yet widely adopted by the medical community, and because of that infancy, it may have an adverse effect on our ability to reach potential physicians that are skeptical of the benefits or have questions about the risks, and thus, we may run into resistance in the marketing of our products and services. Stem cell therapies may be susceptible to various risks, including side effects, unintended immune system responses, inadequate therapeutic efficacy, and lack of acceptance by physicians, hospital, and the patients themselves.

 

Our experience and others have shown that physicians are historically slow to adopt new treatment methods based on new technologies, like ours, when existing and trusted methods continue to be supported by established practitioners. Overcoming these obstacles often requires significant marketing expenditures, product performance, cost cutting and/or decreased pricing. We believe the skepticism to be a significant barrier as we attempt to gain market penetration with our products and services. Failure to achieve market acceptance of our products and services would have a material adverse effect on our financial condition.

 

Additionally, part of our success will depend on continuing to establish and maintain effective strategic partnerships and collaborations with our international partners, which may impose challenges, restrictions, and or financial impacts to our business.

 

As we apply our business strategy of establishing and maintaining strategic relationships, we believe this will allow us to expand and complement our products, training, support and commercialization capabilities. This we believe will allow us to reduce costs with greater economies of scale, and leverage a greater source of market intelligence, with crucial meta data gathered of Stem Cell Therapies applied to a full spectrum across global applications. Notwithstanding, there can be no assurances that we will favorably maintain all current or successfully add new relationships to successfully advance our business.

 

We rely heavily on our management, and the loss of their services could adversely affect our business.

 

Our success is highly dependent upon the continued services of our Chief Executive Officer, David Christensen. The loss of Mr. Christensen’s services would have a material adverse effect on the Company and its business operations.

 

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WE MAY NOT BE ABLE TO IMPLEMENT OUR GROWTH AND MARKETING STRATEGY SUCCESSFULLY OR ON A TIMELY BASIS OR AT ALL.

 

Our future success depends, in large part, on our ability to implement our growth strategy of expanding distribution and sales of our product portfolio, attracting new consumers and introducing new product lines and product extensions.

 

Our sales and operating results will be adversely affected if we fail to implement our growth strategy or if we invest resources in a growth strategy that ultimately proves unsuccessful. 

  

Risks Related to Our Common Stock

  

If our ability to register our Common Stock is limited, your ability to sell such shares may be subject to substantial restrictions, and you may be required to hold such shares for a period of time prior to sale, in which case you could suffer a substantial loss on such shares.

 

If our ability to register the resale of shares of our Common Stock is limited, you may not be able to sell your Common shares. There will be substantial restrictions on your ability to transfer any shares which are not registered for resale, and you may be required to hold the shares for some period of time.

 

OUR STOCK PRICE MAY BE VOLATILE OR MAY DECLINE REGARDLESS OF OUR OPERATING PERFORMANCE, AND YOU MAY LOSE PART OR ALL OF YOUR INVESTMENT.

 

The market price of our common stock may fluctuate widely in response to various factors, some of which are beyond our control, including:

 

  market conditions or trends in the dietary supplement industry or in the economy as a whole;

 

  actions by competitors;

 

  actual or anticipated growth rates relative to our competitors;

 

  the public’s response to press releases or other public announcements by us or third parties, including our filings with the SEC;

 

  economic, legal and regulatory factors unrelated to our performance;

 

  any future guidance we may provide to the public, any changes in such guidance or any difference between our guidance and actual results;

 

  changes in financial estimates or recommendations by any securities analysts who follow our common stock;

 

  speculation by the press or investment community regarding our business;

 

  litigation;

 

  changes in key personnel; and

 

  future sales of our common stock by our officers, directors and significant shareholders.

 

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In addition, the stock markets, including the over-the-counter markets where we are quoted, have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. These broad market fluctuations may materially affect our stock price, regardless of our operating results. Furthermore, the market for our common stock historically has been limited and we cannot assure you that a larger market will ever be developed or maintained. The price at which investors purchase shares of our common stock may not be indicative of the price that will prevail in the trading market. Market fluctuations and volatility, as well as general economic, market and political conditions, could reduce our market price. As a result, these factors may make it more difficult or impossible for you to sell our common stock for a positive return on your investment. In the past, shareholders have instituted securities class action litigation following periods of market volatility. If we were involved in securities litigation, we could incur substantial costs and our resources and the attention of management could be diverted from our business.

 

FUTURE SALES OF SHARES OF OUR COMMON STOCK, OR THE PERCEPTION IN THE PUBLIC MARKETS THAT THESE SALES MAY OCCUR, MAY DEPRESS OUR STOCK PRICE.

 

The market price of our common stock could decline significantly as a result of sales of a large number of shares of our common stock. In addition, if our significant shareholders sell a large number of shares, or if we issue a large number of shares, the market price of our stock could decline. Any issuance of additional common stock by us in the future, or warrants or options to purchase our common stock, if exercised, would result in dilution to our existing shareholders. Such issuances could be made at a price that reflects a discount or a premium to the then-current trading price of our common stock. Moreover, the perception in the public market that shareholders might sell shares of our stock or that we could make a significant issuance of additional common stock in the future could depress the market for our shares. These sales, or the perception that these sales might occur, could depress the market price of our common stock or make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.

  

We have issued shares of common stock, options and convertible notes which are convertible into shares of our common stock in connection with our private placements and certain employment, director and consultant agreements. In addition, we issued shares of our common stock and convertible notes which are convertible into shares of our common stock, in financing transactions and pursuant to employment agreements that are deemed to be “restricted securities,” as that term is defined in Rule 144 promulgated under the Securities Act. From time to time, certain of our shareholders may be eligible to sell all or some of their restricted shares of common stock by means of ordinary brokerage transactions in the open market pursuant to Rule 144, subject to certain limitations. The resale pursuant to Rule 144 of shares acquired from us in private transactions could cause our stock price to decline significantly.

 

“PENNY STOCK” RULES MAY MAKE BUYING OR SELLING OUR COMMON STOCK DIFFICULT.

 

If the market price for our common stock is below $5.00 per share, trading in our common stock may be subject to the “penny stock” rules. The SEC has adopted regulations that generally define a penny stock to be any equity security that has a market price of less than $5.00 per share, subject to certain exceptions. These rules would require that any broker-dealer that would recommend our common stock to persons other than prior customers and accredited investors, must, prior to the sale, make a special written suitability determination for the purchaser and receive the purchaser’s written agreement to execute the transaction. Unless an exception is available, the regulations would require the delivery, prior to any transaction involving a penny stock, of a disclosure schedule explaining the penny stock market and the risks associated with trading in the penny stock market. In addition, broker-dealers must disclose commissions payable to both the broker-dealer and the registered representative and current quotations for the securities they offer. The additional burdens imposed upon broker-dealers by such requirements may discourage broker-dealers from effecting transactions in our common stock, which could severely limit the market price and liquidity of our common stock.

 

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POTENTIAL FUTURE FINANCINGS MAY DILUTE THE HOLDINGS OF OUR CURRENT SHAREHOLDERS.

 

In order to provide capital for the operation of our business, in the future we may enter into financing arrangements. These arrangements may involve the issuance of new shares of common stock, preferred stock that is convertible into common stock, debt securities that are convertible into common stock or warrants for the purchase of common stock. Any of these items could result in a material increase in the number of shares of common stock outstanding, which would in turn result in a dilution of the ownership interests of existing common shareholders. In addition, these new securities could contain provisions, such as priorities on distributions and voting rights, which could affect the value of our existing common stock.

 

WE CURRENTLY DO NOT INTEND TO PAY DIVIDENDS ON OUR COMMON STOCK. AS A RESULT, YOUR ONLY OPPORTUNITY TO ACHIEVE A RETURN ON YOUR INVESTMENT IS IF THE PRICE OF OUR COMMON STOCK APPRECIATES.

 

We currently do not expect to declare or pay dividends on our common stock. In addition, in the future we may enter into agreements that prohibit or restrict our ability to declare or pay dividends on our common stock. As a result, your only opportunity to achieve a return on your investment will be if the market price of our common stock appreciates and you sell your shares at a profit.

 

YOU MAY EXPERIENCE DILUTION OF YOUR OWNERSHIP INTEREST DUE TO THE FUTURE ISSUANCE OF ADDITIONAL SHARES OF OUR COMMON STOCK.

 

We are in a capital intensive business and we do not have sufficient funds to finance the growth of or to support our projected capital expenditures. As a result, we will require additional funds from future equity or debt financings, including tax equity financing transactions or sales of preferred shares or convertible debt, to complete the development of new projects and pay the general and administrative costs of our business. We may in the future issue our previously authorized and unissued securities, resulting in the dilution of the ownership interests of holders of our common stock. We are currently authorized to issue 6,500,000,000 shares of common stock. The potential issuance of such additional shares of common stock or preferred stock or convertible debt may create downward pressure on the trading price of our common stock. We may also issue additional shares of common stock or other securities that are convertible into or exercisable for common stock in future public offerings or private placements for capital raising purposes or for other business purposes. The future issuance of a substantial number of common shares into the public market, or the perception that such issuance could occur, could adversely affect the prevailing market price of our common shares. A decline in the price of our common shares could make it more difficult to raise funds through future offerings of our common shares or securities convertible into common shares.

 

WE HAVE A SIGNIFICANT NUMBER OF SHARES OF OUR COMMON STOCK ISSUABLE UPON CONVERSION OF CERTAIN OUTSTANDING CONVERTIBLE NOTES, AND THE ISSUANCE OF SUCH SHARES UPON EXERCISE OR CONVERSION WILL HAVE A SIGNIFICANT DILUTIVE IMPACT ON OUR STOCKHOLDERS. SALES OF A SUBSTANTIAL NUMBER OF SHARES OF OUR COMMON STOCK FOLLOWING THE EXPIRATION OF LOCK-UPS MAY ADVERSELY AFFECT THE MARKET PRICE OF OUR COMMON STOCK AND THE ISSUANCE OF ADDITIONAL SHARES WILL DILUTE ALL OTHER STOCKHOLDERS.

 

As of December 31, 2020, there were 16,000,000 shares of Common Stock issuable upon the exercise of options and warrants.

  

In addition, our articles of incorporation, as amended, permits the issuance of up to 6,500,000,000 shares of Common Stock. Thus, we have the ability to issue substantial amounts of Common Stock in the future, which would dilute the percentage ownership held by stockholders.

 

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FUTURE ISSUANCE OF OUR COMMON STOCK, PREFERRED STOCK, OPTIONS AND WARRANTS COULD DILUTE THE INTERESTS OF EXISTING STOCKHOLDERS.

 

We may issue additional shares of our common stock, preferred stock, options and warrants in the future. The issuance of a substantial amount of common stock, options and warrants could have the effect of substantially diluting the interests of our current stockholders. In addition, the sale of a substantial amount of common stock or preferred stock in the public market, or the exercise of a substantial number of warrants and options either in the initial issuance or in a subsequent resale by the target company in an acquisition which received such common stock as consideration or by investors who acquired such common stock in a private placement could have an adverse effect on the market price of our common stock.

 

OUR SERIES AA HOLDERS POSSESS SIGNIFICANT VOTING POWER WITH RESPECT TO OUR VOTING STOCK, WHICH WILL LIMIT YOUR INFLUENCE ON CORPORATE MATTERS.

 

There are currently 50,000 shares of Series AA Preferred Stock held by David Christensen, the Company’s CEO. As a result of the issuance of 1,000,000 shares of Series AA Preferred Stock to Benito Novas, a change of control has occurred. The amended certificate of designation for the Series AA Preferred Stock provides that all of the holders of the Series AA Preferred Stock together, voting separately as a class, shall have an aggregate vote equal to sixty-seven (67%) percent of the total vote on all matters submitted to the stockholders. The amended certificate of designation for the Series AA Preferred Stock further provides that a unanimous consent of the holders of Series AA Preferred Stock is necessary for, among other things, a change in control of the Company, requiring the votes of both Messrs. Christensen and Novas.

 

The holder of the Series AA Super Voting Preferred Stock shall have an aggregate vote equal to sixty-seven (67%) percent of the total vote on all matters submitted to the stockholders that each stockholder of the Corporation’s Common Stock is entitled to vote at each meeting of stockholders of the Corporation (and written actions of stockholders in lieu of meetings) with respect to any and all matters presented to the stockholders of the Corporation for their action and consideration.

 

As a result, our insiders have the ability to significantly influence our management and affairs through the election and removal of our Board and all other matters requiring stockholder approval, including any future merger, consolidation or sale of all or substantially all of our assets. This concentrated voting power could discourage others from initiating any potential merger, takeover or other change-of-control transaction that may otherwise be beneficial to our stockholders. Furthermore, this concentrated control will limit the practical effect of your influence over our business and affairs, through any stockholder vote or otherwise. Any of these effects could depress the price of our common stock.

 

OUR ARTICLES OF INCORPORATION GRANTS OUR BOARD THE POWER TO ISSUE ADDITIONAL SHARES OF COMMON AND PREFERRED SHARES AND TO DESIGNATE OTHER CLASSES OF PREFERRED SHARES, ALL WITHOUT STOCKHOLDER APPROVAL.

 

As of December 31, 2021, our authorized capital consists of 6,500,000,000 shares of common stock and 11,000,000 shares are authorized as preferred stock, both with a par value of $0.001 per share. Our Board, without any action by our stockholders, may designate and issue shares of preferred stock in such series as it deems appropriate and establish the rights, preferences and privileges of such shares, including dividends, liquidation and voting rights, provided it is consistent with Delaware law.

 

The rights of holders of our preferred stock that may be issued could be superior to the rights of holders of our shares of common stock. The designation and issuance of shares of capital stock having preferential rights could adversely affect other rights appurtenant to shares of our common stock. Furthermore, any issuances of additional stock (common or preferred) will dilute the percentage of ownership interest of then-current holders of our capital stock and may dilute our book value per share.

 

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ITEM 1B. UNRESOLVED STAFF COMMENTS

 

This information is not required for smaller reporting companies.

 

ITEM 2. PROPERTIES

 

We maintain our current principal office at 433 Plaza Real Suite 275 Boca Raton, Florida 33432. Our phone number is (800) 956-3935.

 

ITEM 3. LEGAL PROCEEDINGS

 

Other than described below, to the Company’s knowledge, there is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our Company or any of our subsidiaries, threatened against or affecting our Company, our common stock, any of our subsidiaries or of our Company’s or our Company’s subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

 

On May 12, 2015, the Company issued a convertible promissory Note (the “Note”) in the principal amount of $25,000 to Tarpon Bay Partners, LLC (“Tarpon Bay”), whose principal at the time, is now known as a “Bad Actor” under SEC rules. On or about January 23, 2017, Tarpon Bay elected to convert principal and interest under the Note into shares of the Company’s common stock. On or about June 6, 2017 the Note was assigned to J.P. Carey Enterprises, Inc. (“J.P.”). On or about June 7, 2017, J.P. elected to convert principal and interest under the Note into shares of the Company’s common stock. Joseph Canouse, a principal at J.P. initiated a lawsuit against the Company in Fulton County Court, in Georgia for, amongst other things, breach of contract. A default judgment was entered into against the Company for failure to response to these claims. The court then issued an Order of Judgement against the Company in the amount of $282,500 which was recorded in accounts payable as of December 31, 2017. The Company appealed the Courts’ decision and in November 2018, while the Court of Appeals affirmed liability under the judgment, the Court of Appeals vacated the award of the entire judgment amount and remanded the case back to the trial court with instructions. The case is awaiting a trial date.

 

On June 23, 2021, the Company entered into settlement agreement of the Joseph Canouse lawsuit for consideration of $300,000 in cash and 1,092,866 shares of common stock in the amount of $213,109. The $513,109 settlement was offset by the $282,500 which was recorded in accounts payable as of December 31, 2017 resulting in expense of $231,109 during the nine months ended September 30, 2021. 

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not applicable.

 

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PART II

 

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

 

Market Information.

 

Our common stock is qualified for quotation on the OTC Markets-OTCPink under the symbol “MSSV” and has been quoted on the OTCPINK since October 16, 2018. Previously, our common stock was quoted on the OTC Markets-OTC Pink Current-OTCPink, under the symbol “PNOW.” There currently is no liquid trading market for our common stock. There can be no assurance that a significant active trading market in our common stock will develop, or if such a market develops, that it will be sustained.

 

The ability of individual stockholders to trade their shares in a particular state may be subject to various rules and regulations of that state. A number of states require that an issuer’s securities be registered in their state or appropriately exempted from registration before the securities are permitted to trade in that state. Presently, we have no plans to register our securities in any particular state. Further, our shares may be subject to the provisions of Section 15(g) and Rule 15g-9 of the Exchange Act, commonly referred to as the “penny stock” rule. Section 15(g) sets forth certain requirements for transactions in penny stocks and Rule 15g-9(d)(1) incorporates the definition of penny stock as that used in Rule 3a51-1 of the Exchange Act.

 

Holders

 

As of April 29, 2022, we had 144 shareholders of common stock per transfer agent’s shareholder list.

 

Dividends

 

The Company has not paid any cash dividends to date and does not anticipate or contemplate paying any dividends in the foreseeable future. It is the present intention of management to utilize all available funds for the growth of the Registrant’s business.

 

Equity Compensation Plan Information

 

The Company does not currently have an equity compensation plan in place.

 

Recent Sales of Unregistered Securities

 

On January 8, 2020, the Company issued 410,000 shares of common stock in conversion of $2,583 convertible notes payable at conversion price of $0.0063: a loss of $4,251 was recorded.

 

On May 19, 2020, the Company issued 802,525 shares of common stock in conversion of $3,290 convertible notes payable at conversion price of $0.0041: a loss of $3,378 was recorded.

 

On July 15, 2020, the Company issued 905,929 shares of common stock in conversion of $4,122 convertible notes payable at conversion price of $0.00455: no loss was recorded.

 

On November 30, 2020, the Company issued 791,104 shares of common stock in conversion of $4,747 convertible notes payable at conversion price of $0.0070: a loss of $2,034 was recorded.

 

During the year ended December 31, 2020, the Company issued warrants to purchase 16,000,000 shares of common stock, at exercise prices of $0.03 per share. These warrants expire three years from issuance date. The Company recorded the fair value of the 16,000,000 warrants issued with debt at approximately $279,868 at December 31, 2020.

 

On February 24, 2021, the Company issued 36,232 shares of common stock for consulting services in the amount of $10,000.

 

On April 16, 2021, the Company issued 33,772 shares of common stock for consulting services in the amount of $10,000.

  

On June 28, 2021, the Company issued 1,092,866 shares of common stock as settlement of the lawsuit with Joseph Canouse, in the amount of $213,109.

 

20

 

 

On August 18, 2021, Meso Numismatics, Inc. completed its acquisition of Global Stem Cells Group Inc., through a Stock Purchase Agreement acquiring all the outstanding capital stock of Global Stem Cells Group Inc and issued a total of 1,000,000 shares of Series AA Preferred Stock and, 8,974 shares of Series DD Preferred Stock to Benito Novas.

 

On August 18, 2021, in consideration of mutual covenants set forth in the Professional Service Consulting Agreement, Dave Christensen, was granted 896 shares of Series DD Preferred Stock as compensation. An amount of 448 shares are issued on August 18, 2021 and the remaining 448 to be issued February 18, 2022, both grants valued at $251,535 each.

 

On December 23, 2021, the Company issued 52,659 shares of common stock for consulting services which were valued in the amount of $10,000.

 

During the year ended December 31, 2021, the Company issued warrants to purchase 87,500,000 shares of common stock, at weighted average exercise prices of $0.091 per share. These warrants expire three years from issuance date.

 

During the year ended December 31, 2021 and 2020, we issued securities that were not registered under the Securities Act, and were not previously disclosed in a Current Report on Form 8-K as listed below. Except where noted, all of the securities discussed in this Item 5 were issued in reliance on the exemption under Section 4(a)(2) of the Securities Act.

 

ITEM 6. [Reserved]

 

We are not required to provide the information required by this item because we are a smaller reporting company.

 

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

General 

 

The following is a discussion by management of its view of the Company’s business, financial condition, and corporate performance for the past year. The purpose of this information is to give management’s recap of the past year, and to give an understanding of management’s current outlook for the near future. This section is meant to be read in conjunction with the Financial Statements of this Annual Report on Form 10-K.

 

Results of Operations

 

Below is a summary of the results of operations for the years ended December 31, 2021 and 2020.

 

   For the Years Ended December 31 
   2021   2020   $ Change   % Change 
Revenue  $475,261   $55,082   $420,179    762.82%
Cost of revenue   330,013    43,954    286,059    650.81%
Gross profit   145,248    11,128    134,120    1,205.25%
                     
Operating expenses                    
Advertising and marketing   134,144    247    133,897    54,209.31%
Professional fees   966,974    145,624    821,350    564.02%
Officer compensation   567,932    270,581    297,351    109.89%
Depreciation and amortization   40,858    800    40,058    5,007.25%
Investor relations   100,496    12,430    88,066    708.50%
General and administrative-related party   8,116,269    -    8,116,269    0.00%
General and administrative   151,339    29,866    121,473    406.73%
Total operating expenses   10,078,012    459,548    9,618,464    2,093.03%
                     
Other income (expense)                    
Interest expense   (2,724,351)   (4,204,326)   1,479,975    -35.20%
Loss on conversion of debt   -    (9,663)   9,663    -100.00%
Derivative financial instruments   3,744    (1,233,277)   1,237,021    -100.00%
Settlement of lawsuit   (231,109)   -    (231,109)   0.00%
Net income (loss)  $(12,884,480)  $(5,895,686)  $(6,988,794)   118.54%

 

21

 

 

Revenue

 

Revenue increased by 762.82% in the amount of $420,179 for the years ended December 31, 2021, compared to the same period in 2020. The key reason for the increase in revenue was a result of the acquisition of Global Stem Cells Group, Inc. on August 18, 2021. Revenue from viable cell therapy and immune support related products along with physician training was $437,887 from August 19, 2021 to December 31, 2021, offset by a decrease in sale of coins, metals and paper money of $17,708 for the years ended December 31, 2021, compared to the same period in 2020.

 

Listed below are the revenues, cost of revenues and gross profits by Company for the years ended December 31, 2021:

 

   For the Year Ended
December 31, 2021
 
   Global Stem
Cells Group
   Meso
Numismatics
   Total 
Revenue  $437,887   $37,374   $475,261 
Cost of revenue   287,750    42,263    330,013 
Gross profit  $150,137   $(4,889)  $145,248 
Gross Profit %   34.29%   -13.08%   30.56%

 

Operating expenses

 

Operating expenses increased by 2,093.03% in the amount of $9,618,464 for the years ended December 31, 2021, compared to the same period in 2020. Listed below are the major changes to operating expenses:

 

Professional fees increased by $821,350 for the years ended December 31, 2021, compared to the same period in 2020, primarily due to $146,000 in legal, $433,000 in consulting and $138,000 in audit and accounting expenses.

 

Officer compensation increased by $297,351 for the years ended December 31, 2021, compared to the same period in 2020, primarily due to the issuance of 896 shares of Series DD Preferred Stock of the Company to Dave Christensen, current Director, President, Chief Executive Officer, Chief Financial Officer and Secretary as compensation pursuant to the Professional Service Consulting Agreement. The $503,072 value of the 896 shares of Series DD Convertible Preferred Stock is based on converting into a number of fully paid and nonassessable shares of common stock determined by multiplying the number of issued and outstanding shares of common stock of the Company on the date of conversion by 3.17 conversion price offset by the $166,795 value of the 50,000 shares of Series AA Super Voting Preferred Stock to Mr. David Christensen in 2020 along with $45,000 to Melvin Pereira in 2020.

 

General and administrative-related party expense increase by $8,116,269 for the years ended December 31, 2021, compared to the same period in 2020, primarily due to the issuance of the 1,000 shares of the Company’s Series CC Convertible Preferred Stock to Lans Holdings Inc. terminated and replaced with a cash payment as consideration. The Company paid Lans Holdings Inc., by delivery in escrow, an amount equal to $8,200,000, offset by $83,731 the value of the 1,000 shares of the Company’s Series CC Convertible Preferred Stock terminated.

 

22

 

 

Other expense

 

Other expense decreased by $2,495,550 for the years ended December 31, 2021, compared to the same period in 2020, primarily as a result of the change in fair market value of the convertible notes in 2020 offset by increase in amortization of discounts and settlement of lawsuit in 2021.

 

Net Loss

 

We recorded a net loss of $12,884,480 for the years ended December 31, 2021, as compared with a net loss of $5,895,686 for the same period ended December 31, 2020.

 

Liquidity and Capital Resources

 

Since inception, the Company has financed its operations through private placements and convertible notes. The following is a summary of the cash and cash equivalents as of December 31, 2021 and December 31, 2020.

 

   December 31,
   December 31,
         
   2021   2020   $ Change   % Change 
Cash and cash equivalents  $2,978,525   $42,534   $2,935,991    6,903%

 

Summary of Cash Flows

 

Below is a summary of the Company’s cash flows for the years ended December 31, 2021 and 2020.

 

   For the Years
Ended December 31,
 
   2021   2020 
Net cash used in operating activities  $(9,878,664)  $(322,745)
Net cash provided by (used in) investing activities   666,467    (175,000)
Net cash provided by financing activities   12,148,188    516,900 
Net increase in cash and cash equivalents  $2,935,991   $19,155 

 

Operating activities

 

Net cash used in operating activities was $9,878,664 during the year ended December 31, 2021 and consisted of a net loss of $12,884,480, which was offset by a net change in operating assets and liabilities of $1,545,861 and non-cash items of $1,459,955. The primary non-cash items for the year ended December 31, 2021, consisted of amortization of debt discount of $893,959 and shares issued for services and settlement of debt of $494,645. The significant change in operating assets and liabilities was an increase in accounts payable and accrued liabilities.

 

Net cash used in operating activities was $322,745 during the year ended December 31, 2020 and consisted of a net loss of $5,895,686, which was offset by a net change in operating assets and liabilities of $1,092,756 and non-cash items of $4,480,184. The primary non-cash items for the year ended December 31, 2020, consisted of amortization of debt discount of $1,851,882, penalty on debt of $1,183,530, preferred shares issued for services of $166,795 and by change in derivative liabilities of $1,233,277. The significant change in operating assets and liabilities was an increase in accounts payable and accrued liabilities.

 

Investing activities

 

Net cash provided by investing activities was $666,467 consisted of cash acquired in business combination and cash to Global Stem Cells Group Inc. during the year ended December 31, 2021, as compared to net cash paid for deposit on acquisition of $175,000 during the same period in 2020.

 

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Financing activities

 

Net cash provided by financing activities was $12,148,188 consisted of proceeds received from the issuance of promissory notes offset by principle payment on debt for the year ended December 31, 2021, as compared to net cash provided by financing activities of $516,900 during the same period in 2020 consisted of proceeds received from the issuance of promissory notes of $701,900 offset by $160,000 from repurchase of preferred stock.

 

Going Concern

 

The financial statements have been prepared assuming the Company will continue as a going concern. The Company has incurred losses since inception, resulting in an accumulated deficit of approximately $46,669,643 and a working capital deficit of $1,200,000 as of December 31, 2021 and future losses are anticipated. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern.

 

The ability of the Company to continue its operations as a going concern is dependent on management’s plans, which include the raising of capital through debt and/or equity markets with some additional funding from other traditional financing sources, including term notes, until such time that funds provided by operations are sufficient to fund working capital requirements.

 

We currently do not see any need to raise additional capital at this time. Our current capital investors are on favorable terms, and we expect that we will be able to execute our business plan, grow the business and start generating greater revenue. We have no current plans to restrict our operations at this time. The Company may require additional funding to finance the growth of its current and expected future operations as well to achieve its strategic objectives. There can be no assurance that financing will be available in amounts or terms acceptable to the Company, if at all. The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.

 

Off-Balance Sheet Arrangements

 

As of December 31, 2021, the Company had no off-balance sheet arrangements.

 

Critical Accounting Policies

 

Our critical accounting policies have not materially changed during the year ended December 31, 2020. Furthermore, the preparation of our financial statements is in conformity with generally accepted accounting principles in the United States of America, or GAAP. The preparation of our financial statements requires management to make judgments and estimates that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of expenses during the reporting period. Our management believes that we consistently apply these judgments and estimates, and the financial statements fairly represent all periods presented. However, any differences between these judgments and estimates and actual results could have a material impact on our statements of income and financial position.

 

Derivative Instruments

 

The derivative instruments are accounted for as liabilities, the derivative instrument is initially recorded at its fair market value and is then re-valued at each reporting date, with changes in fair value recognized in operations for each reporting period. The Company uses the Binomial option pricing model to value the derivative instruments.

 

Stock Based Compensation

 

Share-based compensation issued to employees is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite service period. The Company measures the fair value of the share-based compensation issued to non-employees at the grant date using the stock price observed in the trading market (for stock transactions) or the fair value of the award (for non-stock transactions), which were considered to be more reliably determinable measures of fair value than the value of the services being rendered.

 

24

 

 

New Accounting Pronouncements

 

In March 2020, the FASB issued optional guidance to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting and subsequently issued clarifying amendments. The guidance provides optional expedients and exceptions for accounting for contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (LIBOR) or another reference rate expected to be discontinued because of reference rate reform. The optional guidance is effective upon issuance and can be applied on a prospective basis at any time between January 1, 2020 through December 31, 2022. The Company is currently evaluating the impact of adoption on its consolidated financial statements. The Company is progressing in its evaluation of LIBOR cessation exposures, including the review of debt-related contracts, leases, business development and licensing arrangements, royalty and other agreements. The Company has amended certain agreements and continues to review other agreements for potential impacts. With regard to debt-related exposures in particular, all existing interest rate swaps linked to LIBOR will mature in 2022. The Company is still evaluating the impact to its LIBOR-based debt. Based on its evaluation thus far, the Company does not anticipate a material impact to its consolidated financial statements as a result of reference rate reform.

 

In October 2021, the FASB issued amended guidance that requires acquiring entities to recognize and measure contract assets and liabilities in a business combination in accordance with existing revenue recognition guidance. The amended guidance is effective for interim and annual periods in 2023 and is to be applied prospectively. Early adoption is permitted on a retrospective basis to the beginning of the fiscal year of adoption. The adoption of this guidance will not have a material impact on the Company’s consolidated financial statements for prior acquisitions; however, the impact in future periods will be dependent upon the contract assets and contract liabilities acquired in future business combinations.

 

In November 2021, the FASB issued new guidance to increase the transparency of transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy. The guidance requires annual disclosures of such transactions to include the nature of the transactions and the significant terms and conditions, the accounting treatment and the impact to the company’s financial statements. The guidance is effective for annual periods beginning in 2022 and is to be applied on either a prospective or retrospective basis. The Company is currently evaluating the impact of adoption on its consolidated financial statements.

 

Other accounting standards and amendments to existing accounting standards that have been issued and have future effective dates are not applicable or are not expected to have a significant impact on the Company’s consolidated financial statements

 

Revenue Recognition

 

Effective January 1, 2018, the Company adopted ASC 606 — Revenue from Contracts with Customers. Under ASC 606, the Company recognizes revenue from the sale of products by applying the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied.

 

The Company’s main sources of revenue are comprised of the following:

 

Revenue is derived from activities in training, reselling equipment, products, and services.

 

Training-GSCG offers a Stem Cell & Exosomes Certification Program where physicians attending this training sessions will take advantage of a full review of stem cell biology, characterization and regenerative properties of cells and cell products, cytokines and growth factors and how can be apply in the clinic. The physicians will pay for the training sessions upfront and receives all the material and certificate upon completion of seminar which is when revenue is recognized by GSCG.

 

Products-Physicians can order SVF Kits through GSCG which includes EC Certificate from Institute for Testing and Certificating, Inc. SVT Kits are paid for upfront and shipped from third party directly to physicians. Revenue is recognized by GSCG when product is shipped.

 

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Equipment- Physicians can order equipment through GSCG which includes warranty from manufacture of equipment. Equipment is paid for upfront and shipped from manufacture directly to physicians. Revenue is recognized by GSCG when product is shipped.

 

Rare coins and banknotes-MESO acquires rare coins and banknotes from Latin America at reduced costs and sales through its website and auctions.

 

The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product to a customer. Revenue is measured based on the consideration the Company receives in exchange for those products.

 

Use of Estimates

 

The preparation of these financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The significant estimates included in these financial statements are associated with accounting for the derivative liability valuations, valuation of preferred stock, fair value estimates, valuation of assets and liabilities in business combination and in its going concern analysis.

 

Fair Value of Financial Instruments

 

The fair value of financial instruments, which include cash, accounts payable and accrued expenses and advances from related parties were estimated to approximate their carrying values due to the immediate or short-term maturity of these financial instruments. Management is of the opinion that the Company is not exposed to significant interest, currency or credit risks arising from financial instruments.

 

Fair value is defined as the price which would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-tier fair value hierarchy which prioritizes the inputs used in the valuation methodologies, as follows:

 

Level 1 Inputs - Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

 

Level 2 Inputs - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other means.

 

Level 3 Inputs - Unobservable inputs for determining the fair values of assets or liabilities that reflect an entity’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities.

 

At December 31, 2021 and December 31, 2020, the carrying amounts of the Company’s financial instruments, including cash, account payables, and accrued expenses, approximate their respective fair value due to the short-term nature of these instruments.

 

At December 31, 2021 and December 31, 2020, the Company does not have any assets or liabilities except for derivative liabilities related to convertible notes payable required to be measured at fair value in accordance with FASB ASC Topic 820, Fair Value Measurement.

 

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

We are not required to provide the information required by this Item because we are a smaller reporting company.

 

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 

The financial statements required by this Item 8 are included in this Annual Report following Item 15 hereof. As a smaller reporting company, we are not required to provide supplementary financial information.

 

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 

None.

 

26

 

 

ITEM 9A. CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controls and Procedures

 

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports, filed under the Securities Exchange Act of 1934, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable and not absolute assurance of achieving the desired control objectives. In reaching a reasonable level of assurance, management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. In addition, the design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, a control may become inadequate because of changes in conditions or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

 

As required by the SEC Rules 13a-15(b) and 15d-15(b), we carried out an evaluation under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on the foregoing, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were not effective at the reasonable assurance level due to the material weaknesses described below.

 

1.We do not have written documentation of our internal control policies and procedures. Written documentation of key internal controls over financial reporting is a requirement of Section 404 of the Sarbanes-Oxley Act which is applicable to us for the year ended December 31, 2021. Management evaluated the impact of our failure to have written documentation of our internal controls and procedures on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.

 

2.We have inadequate controls to ensure that information necessary to properly record transactions is adequately communicated on a timely basis from non-financial personnel to those responsible for financial reporting. Management evaluated the impact of the lack of timely communication between non–financial personnel and financial personnel on our assessment of our reporting controls and procedures and has concluded that the control deficiency represented a material weakness.

 

3.The Company failed to account for the acquisition of GSCG using the full purchase accounting method in accordance with ASC 805.

 

To address these material weaknesses, management engaged financial consultants, performed additional analyses and other procedures to ensure that the financial statements included herein fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented. We have not remedied the material weaknesses as of December 31, 2021. The Company plans to take remedial action to address these weaknesses during the fiscal year ended 2022.

 

Changes in Internal Control Over Financial Reporting

 

There has been no change in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) of the Exchange Act that occurred during the year ended December 31, 2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting, except the implementation of the controls identified above.

 

ITEM 9B. OTHER INFORMATION

 

None.

 

ITEM 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

 

None.

 

27

 

 

PART III

 

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

 

Our current director and executive officer and his age are listed below.

 

Name   Current Age   Position
David Christensen   56   President, Chief Executive Officer (Principal Executive Officer), Chief Financial Officer (Principal Accounting Officer and Principal Financial Officer), Secretary and Director

 

David Christensen

 

From Feb 2001 to present, Dave has been the CEO and EVP of Enterprise Technology Consulting, where he helps companies transform their Leadership and Operations by driving Strategic Initiatives. As a Black Belt in Lean Six Sigma, he uses the best tools from these Lean Principles known as “Hoshin Kanri” (Strategy Deployment) to help companies develop and execute their business objectives. Strategy Deployment leverages this strong process knowledge and broad business experience to drive continuous improvement and performance breakthroughs that deliver exceptional value.

 

From Dec 2017 to present, Dave has also served as CEO and President of TNT Blockchain Inc, where he leads an international team of Supply Chain Technology solutions developers.

 

From May 2019 to Nov 2019, Dave served as CEO and Director of Lans Holdings, Inc., a company in the payment processor business.

 

From Jul 2015 to Present, Dave served as Vice President Strategy Development of Mode Transportation, a company in the freight transportation industry.

 

From Sep 2015 to Jan 2018, Dave served as Chief Strategy Officer and Director of Lans Holdings, Inc., a company in the payment processor business.

 

Dave has previously worked for companies such as Compaq, HP, Cal Cartage, Qualcomm, Wal-Mart International, Rexnord Carlyle, Lans Holdings, Mode Transportation, Hypercom, and Verifone.

 

Aside from that provided above, Dave does not hold and has not held over the past five years any other directorships in any company with a class of securities registered pursuant to Section 12 of the Exchange Act or subject to the requirements of Section 15(d) of the Exchange Act or any company registered as an investment company under the Investment Company Act of 1940.

 

Dave is qualified to serve as our director for his experience in developing companies.

 

Family Relationships.

 

There are no family relationships between any of our directors or executive officers.

 

28

 

 

Involvement in Certain Legal Proceedings.

 

During the past 10 years, none of our current directors, nominees for directors or current executive officers has been involved in any legal proceeding identified in Item 401(f) of Regulation S-K, including:

 

1.Any petition under the Federal bankruptcy laws or any state insolvency law filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he or she was a general partner at or within two years before the time of such filing, or any corporation or business association of which he or she was an executive officer at or within two years before the time of such filing;

 

2.Any conviction in a criminal proceeding or being named a subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);

 

3.Being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him or her from, or otherwise limiting, the following activities:

 

i.Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;

 

ii.Engaging in any type of business practice; or

 

iii.Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws;

  

4.Being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any type of business regulated by the Commodity Futures Trading Commission, securities, investment, insurance or banking activities, or to be associated with persons engaged in any such activity;

 

5.Being found by a court of competent jurisdiction in a civil action or by the SEC to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;

 

6.Being found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;

 

7.Being subject to, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:

 

i.Any Federal or State securities or commodities law or regulation; or

 

ii.Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or

 

iii.Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

 

8.Being subject to, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

 

Term of Office

 

Our directors are appointed at the annual meeting of shareholders and hold office until the annual meeting of the shareholders next succeeding his or her election, or until his or her prior death, resignation or removal in accordance with our bylaws. Our officers are appointed by the Board and hold office until the annual meeting of the Board next succeeding his or her election and until his or her successor shall have been duly elected and qualified, subject to earlier termination by his or her death, resignation or removal.

 

29

 

 

Section 16(a) Beneficial Ownership Reporting Compliance

 

As December 31, 2021, based on a review solely of the filings made under Section 16 of the Exchange Act, all reports were timely filed

 

ITEM 11. EXECUTIVE COMPENSATION.

 

The following summary compensation table sets forth all compensation awarded to, earned by, or paid to the named executive officers paid by us during the years ended December 31, 2021 and 2020.

 

EXECUTIVE OFFICER COMPENSATION TABLE

 

Name and Principal Position  Year   Salary
($)
   Bonus
($)
 
    Stock
Awards
($)
 
    Option
Awards
($)
 
    Non-Equity
Incentive Plan
Compensation
($)
 
   Non-Qualified
Deferred
Compensation
Earnings
($)
   All Other
Compensation
($)
 
   Total
($)
 
 
                                     
Melvin Pereira   2020    48,786                                                                                                  48,786 
Chief Former Executive Officer (PEO/PFO)   2021                                         
                                              
David Christensen   2020    55,000         166,795                        221,795 
President, Chief Executive Officer (Principal Executive Officer), Chief Financial Officer (Principal Accounting Officer and Principal Financial Officer), Secretary And Director   2021    60,000         503,072                        563,072 

 

Outstanding Equity Awards at the End of the Fiscal Year

 

We do not have any equity compensation plans and therefore no equity awards are outstanding as of December 31, 2021. 

 

None of the members of the board of directors of the Company were compensated for services in such capacity.

 

Bonuses and Deferred Compensation

 

We do not have any bonus, deferred compensation or retirement plan. All decisions regarding compensation are determined by our board of directors.

 

Payment of Post-Termination Compensation

 

We do not have change-in-control agreements with our director or executive officer, and we are not obligated to pay severance or other enhanced benefits to our executive officer upon termination of her employment.

 

30

 

 

Employment Agreements

 

On August 18, 2021, the Company entered into a three year Consulting Agreement with ETC (Enterprise Technology Consulting) owned by David Christensen. Consultant shall be compensated monthly based on annual rate of $90,000. Additionally, the agreement with ETC includes an issuance of 896 shares of Series DD Preferred Stock of the Company. An amount of 448 shares are issued on August 18, 2021 and the remaining 448 was issued on February 18, 2022.

 

Board of Directors

 

Our directors hold office until the next annual meeting of shareholders and until their successors have been duly elected and qualified. Our officers are elected by and serves at the discretion of the board of directors.

 

Securities Authorized for Issuance Under Equity Compensation Plans

 

As of December 31, 2021, we did not have any securities authorized for issuance under any equity compensation plans.

  

Compensation of Directors

 

No director received compensation for his services during the year ended December 31, 2021.

 

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

 

The following table sets forth the number of shares of common stock owned of record and beneficially by our executive officers, directors and persons who hold 5% or more of the outstanding shares of voting stock of the Company.

 

The amounts and percentages of our common stock beneficially owned are reported on the basis of SEC rules governing the determination of beneficial ownership of securities. Under the SEC rules, a person is deemed to be a “beneficial owner” of a security if that person has or shares “voting power,” which includes the power to vote or to direct the voting of such security, or “investment power,” which includes the power to dispose of or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities of which that person has the right to acquire beneficial ownership within 60 days through the exercise of any stock option, warrant or other right. Under these rules, more than one person may be deemed a beneficial owner of the same securities and a person may be deemed to be a beneficial owner of securities as to which such person has no economic interest. Unless otherwise indicated, each of the shareholders named in the table below, or his or her family members, has sole voting and investment power with respect to such shares of our common stock. Except as otherwise indicated, the address of each of the shareholders listed below is: c/o Meso Numismatics, Inc., 433 Plaza Real Suite 275 Boca Raton, Florida 33432.

 

 Applicable percentage ownership is based on 12,161,403 shares of Common Stock outstanding as of April 29, 2022. In addition, as of April 29, 2022, there were 1,050,000 shares of Series AA Preferred Stock outstanding.

 

Name and Address of Beneficial Owner  Common
Stock
Owned
Beneficially
   Percent
of Class
   Series AA
Preferred
Stock
Owned
Beneficially
   Percent
of Class
 
Named Executive Officers and Directors                
Dave Christensen   -    -    50,000    5%
All Executive Officers and Directors as a group (1 person)   -    -    50,000    5%
5% or greater shareholders        -           
Ajene Watson LLC(1)   747,303    6.14%   -    - 
Benito Novas   -         1,000,000    95%

 

(1) Mr. Ajene Watson has investment and voting control over such shares.

 

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

 

Other than as disclosed below, or included in the section titled Executive Compensation, there have been no transactions involving the Company since the beginning of the last fiscal year, or any currently proposed transactions, in which the Company was or is to be a participant and the amount involved exceeds $120,000 or one percent of the average of the Company’s total assets at year-end for the last two completed fiscal years, and in which any related person had or will have a direct or indirect material interest.

 

31

 

 

On June 26, 2020, Meso Numismatics Inc. completed the repurchase of 1,000,000 shares of its Series AA (“Series AA”) Super Voting Preferred Stock for an aggregate total purchase price equal to $160,000, representing all of the Series AA shares held by E-Network de Costa Rica S.A. and S&M Chuah Enterprises Ltd., respectively.

 

On June 26, 2020, due to Mr. Pereira’s resignation, Meso Numismatics Inc.’s Board of Directors appointed Mr. David Christensen, current Director and President of the Company, to serve as Chief Executive Officer, Chief Financial Officer and Secretary, effective June 27, 2020 and granted 50,000 shares of Series AA to Mr. David Christensen.

 

In consideration of mutual covenants set forth in the Professional Service Consulting Agreement, Dave Christensen, current Director, President, Chief Executive Officer, Chief Financial Officer and Secretary, shall be compensated monthly based on annual rate of $90k starting January 1, 2022. Additionally, the agreement includes an issuance of 896 shares of Series DD Preferred Stock of the Company. An amount of 448 shares are issued on August 18, 2021 and the remaining 448 to be issued February 18, 2022, the value of each grant equaling $251,535. Amounts paid to Enterprise Technology Consulting, a Company 100% owned by Dave Christensen, CEO, for consulting services during 2021 were $60,000.

 

The Company paid Lans Holdings Inc., by delivery in escrow on November 3, 2021, an amount equal to USD $8,200,000.

 

On August 18, 2021, through a Stock Purchase Agreement in which 100% of the outstanding shares of Global Stem Cell Group, Inc. the Company acquired a 2018 Jaguar F-Pace which was acquired from Benito Novas for $45,000 on January 8, 2019 and assumed the related auto loan, with an original loan amount of $20,991 at 8.99% interest for 48 months and monthly payments of $504.94. As of December 31, 2021, the principal balance of the outstanding auto loan was $5,776.

 

On August 18, 2021, through a Stock Purchase Agreement in which 100% of the outstanding shares of Global Stem Cell Group, Inc. the Company acquired 50,000,000 shares of common stock from Aesthetic Marketing Group, LLC on May 23, 2019. Aesthetic Marketing Group is wholly owned by Benito Novas, CEO of Global Stem Cell Group, Inc.

 

Benito Novas’, (CEO of Global Stem Cell Group, Inc.) brother, sister and nephew provide marketing/administrative and training/R&D services to Global Stem Cells Group and were paid as consultants from August 18, 2021 to December 31, 2021 in aggregate $101,175.

 

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.

 

M&K CPAS, PLLC served as our independent registered public accountants for the year ended December 31, 2020. L J Soldinger Associates, LLC served as our independent registered public accountants for the year ended December 31, 2021.

 

Audit Fees

 

For the Company’s fiscal years ended December 31, 2021 and 2020, we were billed approximately $109,445 and $30,400, respectively, for professional services rendered by our independent auditors for the audit and review of our financial statements.

 

Audit Related Fees

 

There were no fees for audit related services rendered by our independent auditors for the years ended December 31, 2021 and 2020, respectively.

 

Tax Fees

 

For the Company’s fiscal years ended December 31, 2021 and 2020, there were no fees for professional services rendered by our independent auditors for tax compliance, tax advice, and tax planning.

 

All Other Fees

 

For the Company’s fiscal years ended December 31, 2021 and 2020, we were no billed any other fees by our auditors.

 

 

32

 

 

PART IV

 

ITEM 15. EXHIBIT AND FINANCIAL STATEMENT SCHEDULES.

 

(a)(1) FINANCIAL STATEMENTS.

 

The following documents are included on pages F-1 through F-33 attached hereto and are files as part of this Annual Report on Form 10-K. Reference is made to the Index to Consolidated Financial Statements on Page F-1.

 

(a)(2) EXHIBITS

 

We have filed the exhibits listed on the accompanying Exhibit Index of this registration statement and below in this Item 15:

 

        Incorporated by    
Exhibit       Reference   Filed or Furnished
Number   Exhibit Description   Form     Exhibit   Filing Date   Herewith
                     
2.1   Plan of Merger   10-12G   2.1   12/12/2018    
                     
3.1   Articles of Incorporation, as Amended   10-12G   3.1   12/12/2018    
                     
3.2   Series AA Certificate of Designation   10-12G   3.2   12/12/2018    
                     
3.3   Series BB Certificate of Designation   10-12G   3.3   12/12/2018    
                     
3.4   Amendment to Certificate of Designation of Series AA Preferred Stock   8-K   3.1   11/29/2019    
                     
3.5   Certificate of Designation of Series CC Preferred Stock   8-K   3.2   11/29/2019    
                     
3.6   Certificate of Designation of Series DD Preferred Stock   8-K   3.3   11/29/2019    
                     
3.7   Amendment to Certificate of Designation of Series AA Preferred Stock   8-K   3.1   6/24/2021    
                     
3.7   Amended and Restated Bylaws   8-K   3.4   11/29/2019    
                     
10.2   Binding Letter of Intent   8-K   10.1   07/15/2019    
                     
10.3   Exchange Agreement of Series BB Convertible Stock   8-K   10.1   11/29/2019    
                     
10.4   Repurchase Agreement   8-K   10.1   11/29/2019    
                     
10.5   Stock Purchase Agreement   8-K   10.2   6/24/2021    
                     
10.6   Consulting Agreement   8-K   10.1   8/19/2021    
                     
21.1   List of Subsidiaries   10-12G   21.1   12/12/2018    
                     
31.1   Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.               X
                     
31.2   Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.               X
                     
32.1   Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350.               X
                     
101.INS   Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.               X
                     
101.SCH   Inline XBRL Taxonomy Extension Schema Linkbase Document.               X
                     
101.CAL   Inline XBRL Taxonomy Calculation Linkbase Document.               X
                     
101.DEF   Inline XBRL Taxonomy Extension Definition Linkbase Document.               X
                     
101.LAB   Inline XBRL Taxonomy Label Linkbase Document.               X
                     
101.PRE   Inline XBRL Taxonomy Presentation Linkbase Document.               X
                     
104   Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).                

 

ITEM 16. 10-K SUMMARY

 

None 

33

 

 

SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Dated May 4, 2022 MESO NUMISMATICS, INC.
     
  By: /s/ David Christensen
    David Christensen
   

President, Chief Executive Officer, Chief Financial Officer, Secretary and Director

(Principal Executive Officer)

(Principal Financial Officer)

(Principal Accounting Officer)

 

34

 

 

ITEM 15   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 

MESO NUMISMATICS, INC.

 

CONSOLIDATED FINANCIAL STATEMENTS

 

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

 

CONTENTS

 

    Page
     
Reports of Independent Registered Public Accounting Firms   F-2
     
Consolidated Balance Sheets as of December 31, 2021  and 2020   F-7
     
Consolidated Statements of Operations for the Years Ended December 31, 2021 and 2020   F-8
     
Consolidated Statements of Stockholders’ Deficit for the Years Ended December 31, 2021 and 2020   F-9
     
Consolidated Statements of Cash Flows for the Years Ended December 31, 2021 and 2020   F-11
     
Notes to Consolidated Financial Statements   F-12

 

F-1

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Director and

Stockholders of Meso Numismatics, Inc,

 

Opinion on the Financial Statements

 

We have audited the accompanying consolidated balance sheet of Meso Numismatics, Inc, (the “Company”) as of December 31, 2021, and the related consolidated statements of operations, stockholders’ deficit, and cash flows for the year ended December 31, 2021, 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, 2021, and the results of its operations and its cash flows for the year ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

 

Explanatory Opinion - Going Concern

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company suffered net losses from operations from inception, has a working capital deficit of approximately $1,200,000 and has an accumulated deficit of $46,669,643 as of December 31, 2021 which raises substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters are also described in Note 2. We believe that our audits provide a reasonable basis for our opinion.

 

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 audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, 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

 

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

 

F-2

 

 

Business Combination

 

Critical Audit Matter Description

 

The Company consummated a business combination whereby, the Company acquired 100% of the outstanding stock of Global Stem Cell Group, Inc. (“GSCG”). The Company purchased the outstanding stock of GSCG through the issuance of its Series AA and Series DD preferred stock along with cash to the seller. The Company engaged an independent consultant to assist in the valuation of the preferred stock. The Company also required the independent consultant to value the net assets including goodwill and intangibles acquired in the transaction.

 

Critical Audit Matter Determination

 

The business combination was major change in size and operations of the Company requiring expertise in the valuations of the Company’s preferred stocks issued as part of the consideration and valuation of the intangible assets and goodwill acquired in the acquisition.

 

How We Addressed the Matter in Our Audit

 

-Read the valuation reports prepared by the independent valuation consultant

 

-Reviewed the consultant’s qualifications

 

-Discussed the methodology used in the valuing the Company’s preferred stock issued to the seller

 

-Reviewed the consultant’s assumptions used and calculations performed of the value of the preferred stock and the allocation of the purchase price to the net assets acquired including the intangibles and goodwill

 

-Tested the models developed by the outside consultant with managements input

 

Notes Payable and Warrants

 

Critical Audit Matter Description

 

As discussed in Note 4, the Company obtains funds for operations by issuing convertible notes payable and warrants. Some of the convertible notes that have been issued contain conversion features that result in the conversion prices that fluctuate with the daily changes in the Company’s common stock price as it trades in the over-the-counter market. Due to the fluctuation of the conversion prices, the embedded conversion features require bifurcation from the host contracts and are recorded as derivative liabilities which US GAAP requires the fair value to be determined as of each reporting period.

 

Critical Audit Matter Determination

 

Significant judgment is required by the Company in determining the derivative liability values for these convertible note agreements including the use of a specialist engaged by management and allocations of the proceeds of the notes to the notes and warrants issued.

 

How We Addressed the Matter in Our Audit

 

-We reviewed the consultant’s qualifications

 

-We reviewed the terms of the debt agreements and warrants issued by the Company.

 

-We inquired of management and there outside consultants regarding the assumptions used in the allocations of the proceeds of the debt instrument to the debt and warrants issued.

 

-We reviewed support for the significant inputs used in the valuation models prepared to determine the value of the embedded derivatives, as well as assessing the model for reasonableness.

 

F-3

 

 

Going Concern

 

Critical Audit Matter Description

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. Management’s plans for addressing going concern matter are described in Note 2.

 

Critical Audit Matter Determination

 

As discussed in Note 2 to the financial statements, the Company suffered a net loss from operations, a working capital deficit and has an accumulated deficit of approximately $47 million which raises substantial doubt about its ability to continue as a going concern.

 

How We Addressed the Matter in Our Audit

 

Our audit procedures included:

 

-Identifying the conditions and events noted above that, when considered in the aggregate, indicate there is substantial doubt about the Company’s ability to continue as a going concern

 

-Evaluating management’s plans in connection with their intent to raise additional debt financing

 

-GSCG business development to overcome the presumption of a going concern

 

Reviewing and evaluating the financial statement presentation and disclosure regarding the substantial doubt about the ability of the Company to continue as a going concern.

 

/s/ L J Soldinger Associates LLC  
   
We have served as the company’s auditor since 2021.  
   
Deer Park, Illinois  
   
May 4, 2022  
   
PCAOB Audit ID # 318  

 

F-4

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors and
Stockholders of Meso Numismatics, Inc.

 

Opinion on the Financial Statements

 

We have audited the accompanying balance sheet of Meso Numismatics, Inc. (the Company) as of December 31, 2020, and the related statements of operations, stockholders’ deficit, and cash flows for the year ended December 31, 2020, 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, 2020, and the results of its operations and its cash flows for the year ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.

 

Basis for Opinion

 

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

 

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

 

F-5

 

 

Going Concern

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company suffered a net loss from operations and has a net capital deficiency, which raises substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Critical Audit Matters

 

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

 

Notes Payable

 

As discussed in Note 4, the Company borrows funds through the use of convertible notes payable that contain a conversion price that fluctuates with the stock price. Due to the fluctuation of the conversion price, the embedded conversion feature requires bifurcation from the host contract and is recorded as a liability subject to market adjustments as of each reporting period. Significant judgment is exercised by the Company in determining derivative liability values for these convertible note agreements, including the use of a specialist engaged by management.

 

We evaluated management’s conclusions regarding their derivative liability and reviewed support for the significant inputs used in the valuation model, as well as assessing the model for reasonableness.

 

Convertible Preferred Stock

 

As discussed in Note 5, the Company has issued and outstanding certain Preferred Shares that contain a fixed value and convertible into a variable number of common stock on the date of conversion. Auditing management’s evaluation of the convertible preferred shares involves significant judgements and estimates in determining the proper classification of the preferred shares that include both debt and equity qualities. To evaluate the appropriateness and accuracy of the classification of the convertible preferred shares, we evaluated management’s assessment of the debt and equity like characteristics.

 

We evaluated management’s appropriateness and accuracy of the classification of the convertible preferred shares and evaluated management’s assessment of the debt and equity like characteristics.

 

/s/ M&K CPAS, PLLC
   
We have served as the Company’s auditor since 2017.
   
Houston, Texas
   
April 12, 2021  

 

 

 

F-6

 

 

MESO NUMISMATICS, INC.

CONSOLIDATED BALANCE SHEETS

 

   As of December 31, 
   2021   2020 
ASSETS        
Current assets        
Cash and cash equivalents  $2,978,525   $42,534 
Accounts receivable   17,256    
-
 
Prepaid expenses   24,245    
-
 
Total current assets   3,020,027    42,534 
Property and equipment, net   22,909    2,200 
Other assets   5,568    175,000 
Intangible assets, net   451,624    
-
 
Goodwill   5,805,438    
-
 
Total assets  $9,305,566   $219,734 
           
LIABILITIES AND STOCKHOLDERS’ DEFICIT          
           
Current liabilities          
Accounts payable and accrued liabilities  $250,756   $375,789 
Accrued interest   2,129,395    390,437 
Customer advances   18,215    
-
 
Stock payable-related party   251,536    
-
 
Stock payable   20,000    
-
 
Derivative liability   20,442    
-
 
Convertible notes payable, net   -    148,249 
Notes payable, net   1,527,711    
-
 
Total current liabilities   4,218,055    914,475 
           
Long term liabilities          
Convertible notes payable, net of current portion   33,982    14,498 
Notes payable-related parties   7,800    7,800 
Notes payable, net of current portion   11,802,736    5,608,861 
Total liabilities  $16,062,573   $6,545,574 
           
Preferred stock, $0.001 par value per share; 8,000,000 shares authorized as Series CC; 1,000 shares issued 0 and 1,000 shares outstanding for the years ended December 31, 2021 and December 31, 2020, respectively   
-
    83,731 
           
Stockholders’ deficit          
Preferred stock, $0.001 par value per share 1,050,000 shares authorized as Series AA; 1,050,000 and 50,000 shares issued and outstanding for the years ended December 31, 2021 and December 31, 2020, respectively   1,050    50 
Preferred stock, $0.001 par value per share; 1,000,000 shares authorized as Series BB; 0 and 279,146 shares issued and outstanding for the years ended December 31, 2021 and December 31, 2020, respectively   
-
    279 
Preferred stock, $0.001 par value per share; 10,000 shares authorized as Series DD; 9,422 and 0 shares issued and outstanding for the years ended December 31, 2021 and December 31, 2020, respectively   10    - 
Common stock, $0.001 par value per share; 6,500,000,000 shares authorized; 13,687,439 and 12,471,910 shares issued and issuable and 12,085,125 and 10,869,596 shares outstanding for the years ended December 31, 2021 and December 31, 2020, respectively   12,086    10,870 
Additional paid in capital   39,899,491    27,364,393 
Accumulated deficit   (46,669,643)   (33,785,163)
Total stockholders’ deficit   (6,757,007)   (6,409,571)
Total liabilities and stockholders’ deficit  $9,305,566   $219,734 

 

The accompanying notes are an integral part of these audited consolidated financial statements.

 

F-7

 

 

MESO NUMISMATICS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

 

   For the Years Ended
December 31,
 
   2021   2020 
Revenue  $475,261   $55,082 
Cost of revenue   330,013    43,954 
Gross profit   145,248    11,128 
           
Operating expenses          
Advertising and marketing   134,144    247 
Professional fees   966,974    145,624 
Officer compensation   567,932    270,581 
Depreciation and amortization expense   40,858    800 
Investor relations   100,496    12,430 
General and administrative-related party   8,116,269    
-
 
General and administrative   151,339    29,866 
Total operating expenses   10,078,012    459,548 
           
Other income (expense)          
Interest expense   (2,724,351)   (4,204,326)
Loss on debt settlement   
-
    (9,663)
Gain (loss) on derivative financial instruments   3,744    (1,233,277)
Settlement of lawsuit   (231,109)   
-
 
Net loss  $(12,884,480)  $(5,895,686)
Net loss per common share, basic and diluted  $(1.12)  $(0.63)
Weighted average number of common shares outstanding, basic and diluted   11,482,399    9,341,942 

 

The accompanying notes are an integral part of these audited consolidated financial statements.

 

F-8

 

 

MESO NUMISMATICS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

For the Year Ended December 31, 2021

 

   Series CC
Preferred Stock
   Series AA
Preferred Stock
   Series BB
Preferred Stock
   Series DD Preferred Stock   Common Stock   Additional
Paid In
   Accumulated     
   Shares   Amount   Shares   Amount   Shares   Amount   Shares   Amount   Shares   Amount   Capital   Deficit   Total 
Balance, December 31, 2020   1,000   $83,731    50,000   $50    279,146   $279    
-
   $
-
    10,869,596   $10,870   $27,364,393   $(33,785,163)  $(6,409,571)
Settlement of lawsuit   
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
    1,092,866    1,093    212,016    
-
    213,109 
Issuance of common stock for services   
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
    122,663    123    29,877    
-
    30,000 
Issuance of preferred series DD for services-related party   
-
    
-
    
-
    
-
    
-
    
-
    448    1    
-
    
-
    251,535    
-
    251,536 
Cancellation of preferred series BB   
-
    
-
    
-
    
-
    (279,146)   (279)   
-
    
-
    
-
    
-
    279    
-
    
-
 
Cancellation of  preferred series CC-related party   (1,000)   (83,731)   
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
 
Issuance of preferred series AA for acquisition of Global Stem Cell Group, Inc.   
-
    
-
    1,000,000    1,000    
-
    
-
    
-
    
-
    
-
    
-
    962,866    
-
    963,866 
Issuance of preferred series DD for acquisition of Global Stem Cell Group, Inc.   
-
    
-
    
-
    
-
    
-
    
-
    8,974    9    
-
    
-
    5,038,567    
-
    5,038,576 
Imputed interest on debt   -    
-
    -    
-
    -    
-
    -    
-
    -    
-
    (24,186)   
-
    (24,186)
Fair value of warrants   -    
-
    -    
-
    -    
-
    -    
-
    -    
-
    6,064,144    
-
    6,064,144 
Net income (Loss)   -    
-
    -    
-
    -    
-
    -    
 
    -    
-
    
-
    (12,884,480)   (12,884,480)
Balance, December 31, 2021   
-
   $
-
    1,050,000   $1,050    
-
   $
-
    9,422   $10    12,085,125   $12,086   $39,899,491   $(46,669,643)  $(6,757,006)

 

The accompanying notes are an integral part of these audited consolidated financial statements

 

F-9

 

 

MESO NUMISMATICS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

For the Year Ended December 31, 2020

 

   Series CC
Preferred Stock
   Series AA
Preferred Stock
   Series BB
Preferred Stock
   Common Stock   Additional
Paid In
   Accumulated     
   Shares   Amount   Shares   Amount   Shares   Amount   Shares   Amount   Capital   Deficit   Total 
Balance, December 31, 2019   1,000   $83,731    
1,000,0000
   $1,000    279,146   $279    7,960,038   $7,961   $20,524,380   $(27,889,477)  $(7,355,857)
Conversion of convertible debt   
-
    
-
    
-
    
-
    
-
    
-
    2,909,558    2,909    11,833    
-
    14,742 
Repurchase of Preferred Series AA   
-
    
-
    (1,000,000)   (1,000)   
-
    
-
    
-
    
-
    (159,000)   
-
    (160,000)
Granted of Preferred Series AA for services   
-
    
-
    50,000    50    
-
    
-
    
-
    
-
    166,745    
-
    166,795 
Imputed interest on debt   -    
-
    -    
-
    -    
-
    -    
-
    34,237    
-
    34,237 
Loss on conversion of stock   -    
-
    -    
-
    -    
-
    -    
-
    9,663    
-
    9,663 
Derivative settlement   -    
-
    -    
-
    -    
-
    -    
-
    6,496,668    
-
    6,496,668 
Fair value of warrants   -    
-
    -    
-
    -    
-
    -    
-
    279,867    
-
    279,867 
Net income (Loss)   -    
-
    -    
-
    -    
-
         
-
    
-
    (5,895,686)   (5,895,686)
Balance, December 31, 2020   1,000   $83,731    50,000   $50    279,146   $279    10,869,596   $10,870   $27,364,393   $(33,785,163)  $(6,409,571)

 

The accompanying notes are an integral part of these audited consolidated financial statements

 

F-10

 

 

MESO NUMISMATICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

   For the Years Ended
December 31,
 
   2021   2020 
CASH FLOWS FROM OPERATING ACTIVITIES        
Net loss  $(12,884,480)  $(5,895,686)
Non-cash adjustments to reconcile net loss to net cash:          
Amortization of debt discount   893,959    1,851,882 
Depreciation and amortization expense   40,858    800 
(Gain) loss from changes in derivative liability fair values   (3,744)   1,233,277 
Common shares issued for settlement of lawsuit   213,109    
-
 
Common shares issued for services   30,000    
-
 
Preferred shares issued for services   251,536    166,795 
Loss on conversion of debt   
-
    9,663 
Penalty on debt   
-
    1,183,530 
Imputed interest on debt   34,237    34,237 
Changes in operating assets and liabilities:          
Accounts receivable   (3,250)   
-
 
Prepaid expenses   (24,245)   
-
 
Other assets   (5,568)   
-
 
Accounts payable and accrued liabilities   1,307,388    1,092,757 
Stock payable   271,536    
-
 
CASH USED BY OPERATING ACTIVITIES   (9,878,664)   (322,745)
           
CASH FLOWS FROM INVESTING ACTIVITIES          
Cash acquired in business combination   666,467    
-
 
Cash paid for deposit on acquisition   
-
    (175,000)
CASH PROVIDED/(USED) BY INVESTING ACTIVITIES   666,467    (175,000)
           

CASH FLOWS FROM FINANCING ACTIVITIES

          
Proceeds from issuance of debt   12,400,000    701,900 
Loan to non-affiliate   (250,000)   
-
 
Principle payment on debt   (1,812)   (25,000)
Repurchase of preferred stock   
-
    (160,000)
CASH PROVIDED BY FINANCING ACTIVITIES   12,148,188    516,900 
           

Net increase (decrease) in cash

   2,935,991    19,155 
 Cash, beginning of year   42,534    23,379 
           
Cash, end of year  $2,978,525   $42,534 
Cash paid for income taxes  $
-
   $
-
 
Cash paid for interest  $208   $
-
 
           
NON-CASH FINANCING ACTIVITIES:          
Warrants discount issued on debt  $5,703,537   $279,867 
Cancellation of preferred series BB  $279   $
-
 
Cancellation of preferred series CC  $83,731   $
-
 
Issuance of preferred series AA for acquisition  $963,866   $
-
 
Issuance of preferred series DD for acquisition  $5,038,576   $
-
 
Discount issued on convertible debt  $1,200,000   $532,400 
Settlement of derivative discounts  $
-
   $6,496,668 
Conversion of convertible debt  $
-
   $14,742 
Debt restructure  $
-
   $4,196,212 

 

The accompanying notes are an integral part of these audited consolidated financial statements.

 

F-11

 

 

MESO NUMISMATICS, INC.

NOTES TO CONSOLDIATED FINANCIAL STATEMENTS

December 31, 2021

 

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

 

Nature of Business

 

Meso Numismatics, Inc. (the “Company”) was originally organized under the laws of Washington State in 1999, as Spectrum Ventures, LLC to develop market and sell VOIP (Voice over Internet Protocol) services. In 2002, the Company changed its name to Nxtech Wireless Cable Systems, Inc. In August 2007, the Company changed its name to Oriens Travel & Hotel Management Corp. In November 2014, the Company changed its name to Pure Hospitality Solutions, Inc.

 

On November 16, 2016, the Company entered into an Agreement and Plan of Merger between the Company and Meso Numismatics Corp. (“Meso”). The acquisition of Meso is to support the Company’s overall mission of specializing in ventures related to Central America and the Latin countries of the Caribbean; not limited to tourism. Meso is a small but scalable numismatics operation that the Company can leverage for low cost revenues and product marketing.

 

Meso Numismatics, Inc. maintains an online store with eBay (www.mesocoins.com) and participates in live auctions with major companies such as Heritage Auctions, Stacks Bowers Auctions and Lyn Knight Auctions.

 

The acquisition was complete on August 4, 2017 following the Company issuance of 25,000 shares of Series BB preferred stock to Meso to acquire one hundred (100%) percent of Meso’s common stock. The Company accounted for the acquisition as common control, as Melvin Pereira, the CEO and principal shareholder of the Company controlled, operated and owned both companies. On November 16, 2016, the date of the Merger Agreement and June 30, 2017, the date of the Debt Settlement Agreement, Melvin Pereira, CEO of Pure Hospitality Solutions, owned 100% of the stock of Meso Numismatics, Inc. Pure Hospitality Solutions, Inc. and Meso Numismatics, Inc. first came under common control on June 30, 2017.

 

On September 4, 2017, the Company decided to suspend its booking operations, Oveedia, to focus on continuing to build its numismatic business, Meso Numismatics. Inc. The Company did, however, use its footprint within the Latin American region to expand Meso Numismatics, Inc. at a much quicker rate.

 

In September 2018, the Company changed its name to Meso Numismatics, Inc. and FINRA provided a market effective date and on September 26, 2018, the new ticker symbol MSSV became effective on October 16, 2018.

 

On July 2, 2018, the Board of Directors authorized and shareholders approved a 1-for-1,000 reverse stock split of its issued and outstanding shares of common stock held by the holders of record. The prior year financials have been changed to reflect the 1-for-1,000 reverse stock split.

 

On November 27, 2019, Meso Numismatics, Inc. entered into an Assignment and Assumption Agreement with Lans Holdings Inc., whereby Lans Holdings Inc. assigned all of its rights to, obligations and interest in a Binding Letter of Intent entered into on May 23, 2019 with Global Stem Cells Group Inc. and Benito Nova, setting forth the principal terms pursuant to which the Company will acquire 50,000,000 shares of common stock of Global Stem Cells Group Inc.

 

In consideration for the Assignment, Meso Numismatics, Inc. shall:

 

Assume certain Convertible Redeemable Notes issued by Lans Holdings Inc. to a lender, pursuant to the Assignment and Assumption Agreement and subject to any pre-existing defaults under the Notes, Meso Numismatics, Inc. reissued an aggregate of $1,079,626 of Convertible Redeemable Notes to the lender which bear interest at a rate varying from ten (10%) to fifteen (15%) percent, and have a one (1) year maturity date.

 

Issue to Lans Holdings Inc. 1,000 shares of its Series CC Convertible Preferred Stock valued at $83,731 calculated based on conversion provision of the Company’s Articles of Incorporation filed with the Secretary of State in Nevada on November 26, 2019. Shareholders of outstanding shares of Series CC Convertible Preferred Stock shall be entitled to convert part or all of its shares of Series CC Convertible Preferred Stock into a number of fully paid and nonassessable shares of common stock at a price per share determined by dividing the number of issued and outstanding shares of stock of the Company on the date of conversion by 1,000 and multiply the results by 0.8 conversion price.

 

F-12

 

 

The consideration for the assignment of $1,163,357, consisting of an aggregate of $1,079,626 of Convertible Redeemable Notes assumed from Lans Holdings Inc. and 1,000 shares of its Series CC Convertible Preferred Stock valued at $83,731 issued to Lans Holdings Inc was recorded as compensation expense.

 

On November 27, 2019, and in connection with the execution of the Assignment, the Company’s Board of Directors appointed Mr. David Christensen, former director and CEO of Lans Holdings Inc., to serve as director and president of the Company.

 

On December 23, 2019, Meso Numismatics, Inc. entered into the Post Closing Amendment to the Assignment and Assumption Agreement originally entered into on November 27, 2019 with Global Stem Cells Group Inc., Benito Novas, and Lans Holdings Inc., whereby the Original Agreement is amended to extend the deadline to enter into the New LOI to 120 days from the execution of the Post Closing Amendment and option to receive Series CC Convertible Preferred Stock granted to Lans Holdings Inc. has been extended to 120 days from the execution of the Post Closing Amendment.

 

On April 22, 2020, Meso Numismatics, Inc. entered into a Second Post Closing Amendment to the Assignment and Assumption Agreement originally entered into on November 27, 2019 with Global Stem Cells Group Inc., Benito Novas, and Lans Holdings Inc., which Assignment was first amended pursuant to the Post Closing Amendment to the Assignment and Assumption Agreement entered into on December 23, 2019. The Original Agreement is amended to extend the deadline to enter into the New LOI to 150 days from the execution of the Second Amendment and option to receive Series CC Convertible Preferred Stock granted to Lans Holdings Inc. has been extended to 150 days from the execution of the Second Amendment.

 

On June 25, 2020, Mr. Martin Chuah submitted his resignation as Director of the Company, effective June 26, 2020. There are no disagreements between Mr. Chuah and Meso Numismatics, Inc. on any matter relating to its operations, policies or practices.

 

On June 26, 2020, Meso Numismatics, Inc. completed the repurchase of 1,000,000 shares of its Series AA (“Series AA”) Super Voting Preferred Stock, representing all of the Series AA shares held by E-Network de Costa Rica S.A. and S&M Chuah Enterprises Ltd., respectively.

 

On June 26, 2020, Mr. Melvin Pereira submitted his resignation as Chief Executive Officer, Chief Financial Officer, Secretary and Director of Meso Numismatics, Inc., effective June 26, 2020. There are no disagreements between Mr. Pereira and Meso Numismatics, Inc. on any matter relating to its operations, policies or practices.

 

On June 26, 2020, due to Mr. Pereira’s resignation, Meso Numismatics, Inc.’s Board of Directors appointed Mr. David Christensen, current Director and President of the Company, to serve as Chief Executive Officer, Chief Financial Officer and Secretary, effective June 27, 2020 and granted 50,000 shares of Series AA to Mr. David Christensen.

 

On September 16, 2020, Meso Numismatics, Inc. entered into a Third Post Closing Amendment to the Assignment and Assumption Agreement originally entered into on November 27, 2019 with Global Stem Cells Group Inc., Benito Novas, and Lans Holdings Inc., which Assignment was first amended pursuant to the Post Closing Amendment to the Assignment and Assumption Agreement entered into on December 23, 2019. The Original Agreement is amended to extend the deadline to enter into the New LOI to 180 days from the execution of the Third Amendment and option to receive Series CC Convertible Preferred Stock granted to Lans Holdings Inc. has been extended to 180 days from the execution of the Third Amendment.

 

On March 12, 2021, Meso Numismatics, Inc. entered into a Fourth Post Closing Amendment to the Assignment and Assumption Agreement originally entered into on November 27, 2019 with Global Stem Cells Group Inc., Benito Novas, and Lans Holdings Inc., which Assignment was first amended pursuant to the Post Closing Amendment to the Assignment and Assumption Agreement entered into on December 23, 2019. The Original Agreement is amended to extend the deadline to enter into the New LOI to 90 days from the execution of the Fourth Amendment and option to receive Series CC Convertible Preferred Stock granted to Lans Holdings Inc. has been extended to 90 days from the execution of the Fourth Amendment.

 

F-13

 

 

On June 22, 2021, Meso Numismatics, Inc. entered into a Fifth Post Closing Amendment to the Assignment and Assumption Agreement originally entered into on November 27, 2019 with Global Stem Cells Group Inc., Benito Novas, and Lans Holdings Inc.

 

1.Pursuant to the terms of the Fifth Post Closing Amendment, and as full and total consideration for the Assignment and Assumption Agreement and in addition to the assumption of the New LOI and the assumption of the Assigned Debt (both terms as defined in the Assignment and Assumption Agreement ), the option granted to Lans Holdings Inc. pertaining to the issuance of the Company’s Series CC Convertible Preferred Stock was terminated and replaced with a cash payment as consideration, upon the following terms:

 

a.The Company shall pay Lans Holdings Inc., by delivery in escrow, an amount equal to USD $8,200,000, which Cash Payment shall be used by Lans Holdings Inc. for the repurchase of Lans Holdings shares of common stock from the Lans common shareholders.

 

On June 22, 2021, the Company entered into a stock purchase agreement with Global Stem Cells Group Inc and Benito Novas. Pursuant to the terms of the stock purchase agreement, the Company shall acquire 50,000,000 shares of common stock of Global Stem Cells Group Inc., representing all of the outstanding shares of Global Stem Cells Group Inc, from Benito Novas in exchange for the following:

 

a.1,000,000 shares of the Company’s Series AA Super Voting Preferred Stock;

 

b.8,974 shares of the Company’s Series DD Convertible Preferred Stock; and

 

c.An amount equal to USD $50,000 being the balance owing to Benito Novas pursuant to the terms of the New LOI and Assignment.

 

The closing of the stock purchase agreement shall occur no later than August 18, 2021.

 

On June 22, 2021, Meso Numismatics, Inc. entered into a Secured Loan Agreement with an otherwise unaffiliated third-party investor, pursuant to which Meso Numismatics, Inc. agreed to issue to the Investor a $11,600,000 face value Senior Secured Promissory Note with a $1,100,000 original issue discount, and a three year Common Stock Purchase Warrant to acquire up to 70,000,000 shares of our common stock at an exercise price of $0.10 per share, subject to adjustments.

 

On August 18, 2021, Meso Numismatics, Inc., completed its acquisition of Global Stem Cells Group Inc., through a Stock Purchase Agreement acquiring all the outstanding capital stock of Global Stem Cells Group Inc and paid the purchase price of a total of 1,000,000 shares of Series AA Preferred Stock in the Company, 8,974 shares of Series DD Preferred Stock in the Company and $225,000 USD (the final payment of $50,000 was made on July 2, 2021).

 

Pursuant to the terms of the Fifth Post Closing Amendment along with the completion of the acquisition of Global Stem Cells Group Inc., the issuance of the 1,000 shares of the Company’s Series CC Convertible Preferred Stock to Lans Holdings Inc. was terminated and replaced with a cash payment as consideration. The Company shall pay Lans Holdings Inc., by delivery in escrow, an amount equal to USD $8,200,000, which Cash Payment shall be used by Lans Holdings Inc. for the repurchase of all of its shares of common stock from its common shareholders. The company paid on November 3, 2021 the USD $8,200,000 in cash to an escrow account set up by Lans Holdings Inc.. The $8.2 million was expensed in the income statement as General and Administrative Expense – Related Party for the year ending December 31, 2021.

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Principles of Consolidation and Basis of Presentation

 

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Pure Hospitality Solutions, Inc. Meso Numismatics, Corp. and Global Stem Cells Group Inc. (since August 18, 2021). All significant intercompany transactions have been eliminated in consolidation.

 

Use of Estimates in Financial Statement Presentation

 

The preparation of these financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The significant estimates included in these financial statements are associated with accounting for the derivative liability, valuation of preferred stock, and for the valuation of assets and liabilities in business combination.

 

F-14

 

 

Reclassifications

 

Certain amounts for the prior year have been revised or reclassified to conform to the current year presentation. No change in net loss resulted from these reclassifications.

 

Cash and Cash Equivalents

 

The Company considers all highly liquid accounts with original maturities of three months or less to be cash equivalents. At December 31, 2021 and December 31, 2020, all of the Company’s cash was deposited in major banking institutions. There were no cash equivalents as of December 31, 2021 and December 31, 2020. Our cash balances at financial institutions may exceed the Federal Deposit Insurance Company’s (FDIC) insured limit of $250,000 from time to time.

 

Accounts Receivable

 

Accounts receivable are recorded at original invoice amount less an allowance for uncollectible accounts that management believes will be adequate to absorb estimated losses on existing balances. Management estimates the allowance based on collectability of accounts receivable and prior bad debt experience. Accounts receivable balances are written off against the allowance upon management’s determination that such accounts are uncollectible. Recoveries of accounts receivable previously written off are recorded when received. Management believes that credit risks on accounts receivable will not be material to the financial position of the Company or results of operations. The allowance for doubtful accounts was $0 and $0 as of December 31, 2021 and December 31, 2020, respectively.

 

Intangible Assets

 

Intangible assets with finite lives are amortized over their estimated useful lives. Intangible assets with indefinite lives are not amortized, but are tested for impairment annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. No impairment was recognized for the year ended December 31, 2021.

 

Goodwill

 

Goodwill represents the excess acquisition cost over the fair value of net tangible and intangible assets acquired. Goodwill is not amortized and is subject to annual impairment testing on or between annual tests if an event or change in circumstance occurs that would more likely than not reduce the fair value of a reporting unit below its carrying value. In testing for goodwill impairment, the Company has the option to first assess qualitative factors to determine whether the existence of events or circumstances lead to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events and circumstances, the Company concludes that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is not required. If the Company concludes otherwise, the Company is required to perform the two-step impairment test. The goodwill impairment test is performed at the reporting unit level by comparing the estimated fair value of a reporting unit with its respective carrying value. If the estimated fair value exceeds the carrying value, goodwill at the reporting unit level is not impaired. If the estimated fair value is less than the carrying value, further analysis is necessary to determine the amount of impairment, if any, by comparing the implied fair value of the reporting unit’s goodwill to the carrying value of the reporting unit’s goodwill.

 

Derivative Instruments

 

The derivative instruments are accounted for as liabilities, the derivative instrument is initially recorded at its fair market value and is then re-valued at each reporting date, with changes in fair value recognized in operations for each reporting period. The Company uses the Binomial option pricing model to value the derivative instruments.

 

Revenue Recognition

 

Effective January 1, 2018, the Company adopted ASC 606 — Revenue from Contracts with Customers. Under ASC 606, the Company recognizes revenue from the sale of products by applying the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied.

 

F-15

 

 

The Company’s main sources of revenue are comprised of the following:

 

Training-GSCG offers a Stem Cell & Exosomes Certification Program where physicians attending this training sessions will take advantage of a full review of stem cell biology, characterization and regenerative properties of cells and cell products, cytokines and growth factors and how can be apply in the clinic. The physicians will pay for the training sessions upfront and receives all the material and certificate upon completion of seminar which is when revenue is recognized by GSCG.

 

Products-Physicians can order SVF Kits through GSCG which includes EC Certificate from Institute for Testing and Certificating, Inc. SVT Kits are paid for upfront and shipped from third party directly to physicians. Revenue is recognized by GSCG when product is shipped.

 

Equipment- Physicians can order equipment through GSCG which includes warranty from manufacture of equipment. Equipment is paid for upfront and shipped from manufacture directly to physicians. Revenue is recognized by GSCG when product is shipped.

 

Rare coins and banknotes-MESO acquires rare coins and banknotes from Latin America at reduced costs and sales through its website and auctions.

 

The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product to a customer. Revenue is measured based on the consideration the Company receives in exchange for those products.

 

Income Taxes

 

The Company uses the liability method to record income tax activity. Deferred taxes are determined based upon the estimated future tax effects of differences between the financial reporting and tax reporting bases of assets and liabilities, given the provisions of currently enacted tax laws.

 

The accounting for uncertainty in income taxes recognized in an enterprise’s financial statements uses the threshold of more-likely-than-not to be sustained upon examination for inclusion or exclusion. Measurement of the tax uncertainty occurs if the recognition threshold has been met.

 

Net Earnings (Losses) Per Common Share

 

The Company accounts for net loss per share in accordance with Accounting Standards Codification subtopic 260-10, Earnings Per Share (“ASC 260-10”), which requires presentation of basic and diluted earnings per share (“EPS”) on the face of the statement of operations for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS.

 

Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during each period. It excludes the dilutive effects of any potentially issuable common shares. The effect of common stock equivalents is anti-dilutive with respect to losses and therefore basic and dilutive is the same

 

Diluted net loss per share is calculated by including any potentially dilutive share issuances in the denominator. The following securities are excluded from the calculation of weighted average diluted shares at December 31, 2021 and 2020, respectively, because their inclusion would have been anti-dilutive.

 

   For the Years Ended
December 31,
 
   2021   2020 
Convertible notes outstanding   75,710    455,297,705 
Convertible preferred stock outstanding   37,647,060    4,651,726 
Shares underlying warrants outstanding   103,500,000    
-
 
    141,222,770    459,949,431 

 

F-16

 

 

Fair Value of Financial Instruments

 

The fair value of financial instruments, which include cash, accounts payable and accrued expenses and advances from related parties were estimated to approximate their carrying values due to the immediate or short-term maturity of these financial instruments. Management is of the opinion that the Company is not exposed to significant interest, currency or credit risks arising from financial instruments.

 

 Fair value is defined as the price which would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-tier fair value hierarchy which prioritizes the inputs used in the valuation methodologies is as follows:

 

 Level 1 Inputs - Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

 

Level 2 Inputs - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other means.

 

Level 3 Inputs - Unobservable inputs for determining the fair values of assets or liabilities that reflect an entity’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities.

 

At December 31, 2021 and December 31, 2020, the carrying amounts of the Company’s financial instruments, including cash, account payables, and accrued expenses, approximate their respective fair value due to the short-term nature of these instruments.

 

At December 31, 2021 and December 31, 2020, the Company does not have any assets or liabilities except for convertible notes payable required to be measured at fair value in accordance with FASB ASC Topic 820, Fair Value Measurement.

 

The following presents the Company’s fair value hierarchy for those assets and liabilities measured at fair value as of December 31, 2021 and December 31, 2020:

 

   Level 1   Level 2   Level 3   Total 
December 31, 2021                
Derivative liability                                   20,442    20,442 
Total  $
-
   $
-
   $20,442   $20,442 
                     
December 31, 2020                    
Total  $
-
   $
-
   $
-
   $
-
 

 

Comprehensive Income

 

The Company records comprehensive income as the change in equity of a business during a period from transactions and other events and circumstances from non-owner sources. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. Other comprehensive income (loss) includes foreign currency translation adjustments and unrealized gains and losses on available-for-sale securities. As of December 31, 2021 and December 31, 2020, the Company had no items that represent comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements.

 

Stock Based Compensation

 

Share-based compensation issued to employees is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite service period. The Company measures the fair value of the share-based compensation issued to non-employees at the grant date using the stock price observed in the trading market (for stock transactions) or the fair value of the award (for non-stock transactions), which were considered to be more reliably determinable measures of fair value than the value of the services being rendered.

 

F-17

 

 

New Accounting Pronouncements

 

In March 2020, the FASB issued optional guidance to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting and subsequently issued clarifying amendments. The guidance provides optional expedients and exceptions for accounting for contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate (LIBOR) or another reference rate expected to be discontinued because of reference rate reform. The optional guidance is effective upon issuance and can be applied on a prospective basis at any time between January 1, 2020 through December 31, 2022. The Company is currently evaluating the impact of adoption on its consolidated financial statements. The Company is progressing in its evaluation of LIBOR cessation exposures, including the review of debt-related contracts, leases, business development and licensing arrangements, royalty and other agreements. The Company has amended certain agreements and continues to review other agreements for potential impacts. With regard to debt-related exposures in particular, all existing interest rate swaps linked to LIBOR will mature in 2022. The Company is still evaluating the impact to its LIBOR-based debt. Based on its evaluation thus far, the Company does not anticipate a material impact to its consolidated financial statements as a result of reference rate reform.

 

In October 2021, the FASB issued amended guidance that requires acquiring entities to recognize and measure contract assets and liabilities in a business combination in accordance with existing revenue recognition guidance. The amended guidance is effective for interim and annual periods in 2023 and is to be applied prospectively. Early adoption is permitted on a retrospective basis to the beginning of the fiscal year of adoption. The adoption of this guidance will not have a material impact on the Company’s consolidated financial statements for prior acquisitions; however, the impact in future periods will be dependent upon the contract assets and contract liabilities acquired in future business combinations.

 

In November 2021, the FASB issued new guidance to increase the transparency of transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy. The guidance requires annual disclosures of such transactions to include the nature of the transactions and the significant terms and conditions, the accounting treatment and the impact to the company’s financial statements. The guidance is effective for annual periods beginning in 2022 and is to be applied on either a prospective or retrospective basis. The Company is currently evaluating the impact of adoption on its consolidated financial statements.

 

Other accounting standards and amendments to existing accounting standards that have been issued and have future effective dates are not applicable or are not expected to have a significant impact on the Company’s consolidated financial statements

 

Going Concern

 

The financial statements have been prepared assuming the Company will continue as a going concern. The Company has incurred losses since inception, resulting in an accumulated deficit of approximately $47 million and a working capital deficit of $1,200,000 as of December 31, 2021 and future losses are anticipated. These factors, among others, generally tend to raise substantial doubt about the Company’s ability to continue as a going concern.

 

The ability of the Company to continue its operations as a going concern is dependent on management’s plans, which include the raising of capital through debt and/or equity markets with some additional funding from other traditional financing sources, including term notes, until such time that funds provided by operations are sufficient to fund working capital requirements.

 

The Company will require additional funding to finance the growth of its current and expected future operations as well to achieve its strategic objectives. There can be no assurance that financing will be available in amounts or terms acceptable to the Company, if at all. The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.

 

F-18

 

 

NOTE 3 – REVENUE RECOGNITION

 

On January 1, 2018, the Company adopted ASU 2014-09 Revenue from Contracts with Customers and all subsequent amendments to the ASU (collectively, “ASC 606”), the Company recognizes revenue from the sales of products, by applying the following steps:

 

(1)Identify the contract with a customer

 

(2)Identify the performance obligations in the contract

 

(3)Determine the transaction price

 

(4)Allocate the transaction price to each performance obligation in the contract

 

(5)Recognize revenue when each performance obligation is satisfied

 

 

There was no impact on the Company’s financial statements as a result of adopting Topic 606 for the years ended December 31, 2021 and December 31, 2020.

 

The Company’s main source of revenue is comprised of the following:

 

Training-GSCG offers a Stem Cell & Exosomes Certification Program where physicians attending this training sessions will take advantage of a full review of stem cell biology, characterization and regenerative properties of cells and cell products, cytokines and growth factors and how can be apply in the clinic. The physicians will pay for the training sessions upfront and receives all the material and certificate upon completion of seminar which is when revenue is recognized by GSCG.
   
Products-Physicians can order SVF Kits through GSCG which includes EC Certificate from Institute for Testing and Certificating, Inc. SVT Kits are paid for upfront and shipped from third party directly to physicians. Revenue is recognized by GSCG when product is shipped.
   
Equipment- Physicians can order equipment through GSCG which includes warranty from manufacture of equipment. Equipment is paid for upfront and shipped from manufacture directly to physicians. Revenue is recognized by GSCG when product is shipped.

 

Rare coins and banknotes-MESO acquires rare coins and banknotes from Latin America at reduced costs and sales through its website and auctions.

 

The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product to a customer. Revenue is measured based on the consideration the Company receives in exchange for those products.

 

The following table presents the Company’s revenue by product category for the years ended December 31, 2021 and 2020:

 

    For the Years Ended
December 31,
 
    2021     2020  
Coins and banknotes   $ 37,374     $ 55,082  
Training     112,970      
-
 
Product supplies     209,706      
-
 
Equipment     115,210      
-
 
Total revenue   $ 475,261     $ 55,082  

 

F-19

 

 

Listed below are the revenues, cost of revenues, gross profits, assets and net loss by Company:

 

   For the Year Ended
December 31, 2021
 
   Global Stem
Cells Group
   Meso
Numismatics
   Total 
Revenue  $437,887   $37,374   $475,261 
Cost of revenue   287,750    42,263    330,013 
Gross profit  $150,137   $(4,889)  $145,248 
Gross Profit %   34.29%   -13.08%   30.56%
                
Assets  $8,026,166   $1,279,400   $9,305,566 
Net loss  $(12,451,078)  $(433,402)  $(12,884,480)

 

COVID-19

  

In December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China, which has and is continuing to spread throughout China and other parts of the world, including the United States. On January 30, 2020, the World Health Organization declared the outbreak of the coronavirus disease (COVID-19) a “Public Health Emergency of International Concern.” On January 31, 2020, U.S. Health and Human Services Secretary Alex M. Azar II declared a public health emergency for the United States to aid the U.S. healthcare community in responding to COVID-19, and on March 11, 2020 the World Health Organization characterized the outbreak as a “pandemic”. The significant outbreak of COVID-19 has resulted in a widespread health crisis adversely affecting our 2021 and 2020 business, results of operations and financial condition.

 

The outbreak of COVID-19 has resulted in a widespread health crisis that adversely affected the economies and financial markets in which we operate. Restrictions in travel along with in person meetings limited our training of new customers along with selling them products and equipment.

 

NOTE 4 – NOTES PAYABLE

 

Convertible Notes Payable

 

During 2019, the Company entered into an aggregate of $387,980 Convertible Debentures with two lenders which bear interest from eight (8%) percent to fifteen (15%) percent and have a one (1) year maturity date. The notes may be repaid in whole or in part at any time prior to maturity. There are no shares of common stock issuable upon the execution of the promissory notes. The notes are convertible, at the lenders’ sole discretion, into shares of common stock at variable conversion prices. During 2019, the two lenders had advanced a total of $354,870, net of discount and attorney fees, in the amount of $33,110 to the Company. On May 19, 2020, the Company issued 802,525 shares of common stock in conversion of $3,290 convertible notes payable at conversion price of $0.0041: a loss of $3,378 was recorded. On July 15, 2020, the Company issued 905,929 shares of common stock in conversion of $4,122 convertible notes payable at conversion price of $0.00455: no loss was recorded. On November 30, 2020, the Company issued 791,104 shares of common stock in conversion of $4,747 convertible notes payable at conversion price of $0.0070: a loss of $2,034 was recorded. On December 7, 2020, the parties agreed to terminate the convertible promissory notes and accrued but unpaid interest in favor of new secured promissory notes and warrants to purchase shares of our common stock. As of December 31, 2021 and December 31, 2020, the convertible promissory notes had an outstanding balance of $0.

 

On November 25, 2019, Meso Numismatics, Inc. pursuant to the certificate of designation of the Series BB Preferred Stock, elected to exchange the preferred shares for other indebtedness calculated at a price per share equal to $1.20. Upon the Company’s mailing of the Exchange Agreement, the shareholder had the option, within 30 days of such mailing date and subject to the execution of this Agreement to receive the Indebtedness in the form of a convertible note. If the shareholder did not give the Meso Numismatics, Inc. notice the Indebtedness shall automatically was issued in the form of a promissory note. The convertible note agreements bear no interest and have a four (4) year maturity date. The notes may be repaid in whole or in part at any time prior to maturity. There are no shares of common stock issuable upon the execution of the promissory notes. The notes are convertible, at the investors’ sole discretion, into shares of common stock at conversion price equal to the lowest bid price of the Common Stock as reported on the National Quotations Bureau OTC Markets exchange for the three prior trading days including the day upon which a Notice of Conversion is received by the Company. As of December 31, 2019, 81,043 Preferred Series BB shares were exchange for an aggregate of $97,252 convertible notes. During the years ending December 31, 2021 and December 31, 2020, the Company made $0.00 and $25,000, respectively of payments on the outstanding convertible notes. As of December 31, 2021 and December 31, 2020, the convertible promissory notes had an outstanding balance of $72,252.

 

F-20

 

 

On November 27, 2019, Meso Numismatics, Inc. entered into an Assignment and Assumption Agreement with Lans Holdings Inc., whereby Lans Holdings Inc. assigned all of its rights to, obligations and interest in a Binding Letter of Intent entered into on May 23, 2019 with Global Stem Cells Group Inc. and Benito Nova, setting forth the principal terms pursuant to which the Company will acquire 50,000,000 shares of common stock of Global Stem Cells Group Inc. to Meso Numismatics, Inc. for assumption of certain Convertible Redeemable Notes issued by Lans holdings Inc. to lenders pursuant to a securities purchase agreement.

 

Pursuant to the Assignment and Assumption Agreement and subject to any pre-existing defaults under the Notes, Meso Numismatics, Inc. reissued the below Notes to a lender upon the following terms:

 

Original Date of Note  Note Date  Maturity  Date  Principal
Face Amount
of Note
   Interest  Rate 
12/12/2016  11/27/2019  11/27/2020  $239,196.00    10%
12/15/2016  11/27/2019  11/27/2020   291,930.00    12% 
5/16/2019  11/27/2019  11/27/2020   83,000.00    15% 
6/28/2019  11/27/2019  11/27/2020   191,000.00    15% 
7/15/2019  11/27/2019  11/27/2020   84,500.00    15% 
8/2/2019  11/27/2019  11/27/2020   98,000.00    15% 
9/17/2019  11/27/2019  11/27/2020   92,000.00    15% 
         $1,079,626.00      

 

During the period ended March 31, 2020 and December 31, 2019, the lender converted $4,676 of principal into common stock resulting into a balance of $1,074,950. On December 7, 2020, the parties agreed to terminate the convertible promissory notes and accrued but unpaid interest in favor of new secured promissory notes and warrants to purchase shares of our common stock. As of December 31, 2021 and December 31, 2020, the convertible promissory notes had an outstanding balance of $0.

 

From January 28, 2020 to March 30, 2020, the Company entered into an aggregate of $58,410 of Convertible Debentures with a lender which bear interest of eight (8%) percent and have a one (1) year maturity date. The notes may be repaid in whole or in part at any time prior to maturity. There are no shares of common stock issuable upon the execution of the promissory notes. The notes are convertible, at the lenders’ sole discretion, into shares of common stock at variable conversion prices. The lender had advanced a total of $52,600, net of discount and attorney fees, in the amount of $5,810 to the Company. On December 7, 2020, the parties agreed to terminate the convertible promissory notes and accrued but unpaid interest in favor of new secured promissory notes and warrants to purchase shares of our common stock. As of December 31, 2021 and December 31, 2020, the convertible promissory notes had an outstanding balance of $0.

 

From April 30, 2020 to June 24, 2020, the Company entered into an aggregate of $109,020 of Convertible Debentures with a lender which bear interest at eight (8%) percent and have a one (1) year maturity date. The notes may be repaid in whole or in part at any time prior to maturity. There are no shares of common stock issuable upon the execution of the promissory notes. The notes are convertible, at the lenders’ sole discretion, into shares of common stock at variable conversion prices. The lender had advanced a total of $93,300, net of discount in the amount of $15,720 to the Company. On December 7, 2020, the parties agreed to terminate the convertible promissory notes and accrued but unpaid interest in favor of new secured promissory notes and warrants to purchase shares of our common stock. As of December 31, 2021 and December 31, 2020, the convertible promissory notes had an outstanding balance of $0.

 

From May 4, 2020 to June 1, 2020, the Company entered into an aggregate of $146,200 of Convertible Debentures with a lender which bear interest at fifteen (15%) percent and have a one (1) year maturity date. The notes may be repaid in whole or in part at any time prior to maturity. There are no shares of common stock issuable upon the execution of the promissory notes. The notes are convertible, at the lenders’ sole discretion, into shares of common stock at variable conversion prices. The lender had advanced a total of $132,000, net of discount in the amount of $14,200 to the Company. On December 7, 2020, the parties agreed to terminate the convertible promissory notes and accrued but unpaid interest in favor of new secured promissory notes and warrants to purchase shares of our common stock. As of December 31, 2021 and December 31, 2020, the convertible promissory notes had an outstanding balance of $0.

 

On June 25, 2020, the Company entered into a Convertible Debentures with a lender in the amount of $60,000 which bear interest at fifteen (15%) percent and have a one (1) year maturity date. The note may be repaid in whole or in part at any time prior to maturity. There are no shares of common stock issuable upon the execution of the promissory note. The note is convertible, at the lenders’ sole discretion, into shares of common stock at variable conversion prices. The lender had advanced a total of $54,000, net of discount in the amount of $6,000 to the Company. On December 7, 2020, the parties agreed to terminate the convertible promissory notes and accrued but unpaid interest in favor of new secured promissory notes and warrants to purchase shares of our common stock. As of December 31, 2021 and December 31, 2020, the convertible promissory notes had an outstanding balance of $0.

 

F-21

 

 

On July 17, 2020, the Company entered into a Convertible Debentures with a lender in the amount of $238,095 which bear interest at eight (8%) percent and have a one (1) year maturity date. The notes may be repaid in whole or in part at any time prior to maturity. There are no shares of common stock issuable upon the execution of the promissory notes. The notes are convertible, at the lenders’ sole discretion, into shares of common stock at variable conversion prices. The lender had advanced a total of $195,000, net of discount in the amount of $43,095 to the Company. On December 7, 2020, the parties agreed to terminate the convertible promissory notes and accrued but unpaid interest in favor of new secured promissory notes and warrants to purchase shares of our common stock. As of December 31, 2021 and December 31, 2020, the convertible promissory notes had an outstanding balance of $0.

 

On December 7, 2020, the Company signed Debt Restructure Agreements to restructure the debt obligations with three separate lenders.  The three lenders all had outstanding convertible promissory notes with our company in the aggregate principal amount plus default penalty and accrued but unpaid interest of $5,379,624, and the parties have agreed to terminate the old convertible promissory notes in favor of new secured promissory notes and warrants to purchase shares of our common stock.  The Company agreed to the new notes and warrants over the prior convertible notes because the old notes were in default and contained unfavorable terms on conversions. The new notes extended the maturity date, are not convertible into our common shares, but instead secure the debt obligations with our assets.  The new notes have a maturity date of December 7, 2023 and an aggregate principal amount of $5,379,624 and, as an incentive; we have issued cashless warrants to purchase 15,000,000 shares of our common stock at an exercise price of $0.03 per share in connection with the restructuring.

 

These debentures were convertible, at the investors’ sole option, into common shares at the following terms:

 

a 50 percent discount to the lowest closing bid price during the 10 days immediately preceding the conversion date as reported on the National Quotations Bureau OTCQB exchange

 

a 50 percent discount to the average of the lowest traded price during the 20 days immediately preceding the conversion date as quoted by Bloomberg LP;

 

a 50 percent discount to the lowest closing bid price during the 25 days immediately preceding the conversion date as reported on the National Quotations Bureau OTCQB exchange

 

a 40 percent discount to the average of the three lowest traded price during the 20 days immediately preceding the conversion date as quoted by Bloomberg LP; or

 

either (i) a 40 percent discount to the 10 days average daily trading price immediately preceding the conversion date, or (ii) at a fixed conversion price of $0.001 per share during any time whereby the current day market price is at or less than $0.075.

 

The balance of the convertible notes as of December 31, 2021 and December 31, 2020 is as follows:

 

   December 31,   December 31, 
   2021   2020 
Convertible notes payable  $72,252   $220,499 
Less: Discount   38,270    57,752 
Convertible notes payable, net  $33,982   $162,747 

 

F-22

 

 

During the periods ending December 31, 2021 and December 31, 2020 the Company received $0.00 and $526,900, respectively, from funding on new convertible notes.

 

During the periods ending December 31, 2021 and December 31, 2020, the Company incurred $0.00 and $9,663 losses on the conversion of convertible notes, respectively. In connection with the convertible notes, the Company recorded $14,760 and $293,568, respectively of interest expense and $19,482 and $1,842,103, respectively of debt discount amortization expense. As of December 31, 2021 and December 31, 2020, the Company had approximately $251,144 and $328,876, respectively of accrued interest.

 

During the periods ending December 31, 2021 and December 31, 2020, the Company made $0.00 and $25,000, respectively of payments on the outstanding convertible notes, and converted $0.00 and $14,742, respectively, of principal and interest into 0.00 and 2,909,558 shares of common stock. At December 7, 2020 the Company exchanged $5,379,624 of principal and accrued but unpaid interest on convertible notes for $5,379,624 promissory notes and cashless warrants to purchase 15,000,000 shares of our common stock. As of December 31, 2021 and December 31, 2020, the principal balance of outstanding convertible notes payable was $72,252 and $220,499, respectively.

 

Promissory Notes Payable

 

During 2015, the Company entered into line of credit with Digital Arts Media Network treated as a promissory note. The promissory note bear interest at ten (10%) and have a one (1) year maturity date. The notes may be repaid in whole or in part at any time prior to maturity. There are no shares of common stock issuable upon the execution of the promissory notes. As of December 31, 2021, the principal balance of the outstanding loan was $130,025 and accrued interest of $79,598.

 

On November 25, 2019, Meso Numismatics, Inc. pursuant to the certificate of designation of the Series BB, Preferred Stock elected to exchange the preferred shares for other indebtedness calculated at a price per share equal to $1.20. Upon the Company’s mailing of the Exchange Agreement, the shareholder shall have the option, within 30 days of such mailing date and subject to the execution of this Agreement to receive the Indebtedness in the form of a convertible note. Should the shareholder not give the Meso Numismatics, Inc. notice the Indebtedness shall automatically be issued in the form of a promissory note. The promissory note agreements bear no interest and have a four (4) year maturity date with a 20% premium to be paid upon maturity. The notes may be repaid in whole or in part at any time prior to maturity. As of December 31, 2019, 276,723 Preferred Series BB shares were exchange for an aggregate of $332,068 promissory notes.

 

On December 3, 2019, Melvin Pereira, the CEO, converted 18,500 shares of the 25,000 shares of Series BB preferred stock to acquire one hundred (100%) percent of Meso’s common stock into 250,999 shares of the Company’s common stock and elected to exchange the remaining 6,500 shares of Series BB preferred stock for a promissory note of $7,800.

 

On July 13, 2020, the Company entered into a Promissory Debentures with a lender in the amount of $6,000 which bear interest at eighteen (18%) percent and have a two (2) year maturity date. The notes may be repaid in whole or in part at any time prior to maturity. The lender had advanced a total of $5,000, net of discount in the amount of $1,000 to the Company.

 

On July 15, 2020, the Company entered into a Promissory Debentures with a lender in the amount of $84,000 which bear interest at eighteen (18%) percent and have a two (2) year maturity date. The notes may be repaid in whole or in part at any time prior to maturity. The lender had advanced a total of $70,000, net of discount in the amount of $14,000 to the Company.

 

At December 7, 2020 the Company exchanged $5,379,624 of principal, default penalty and accrued but unpaid interest on convertible notes for $5,379,624 promissory notes and cashless warrants to purchase 15,000,000 shares of our common stock with three separate lenders. The new notes have a maturity date of November 23, 2023 and an aggregate principal amount of $5,379,624 shall bear interest at a fifteen (15%) percentage compounded annual interest rate and, as an incentive; we have issued cashless warrants to purchase 15,000,000 shares of our common stock at an exercise price of $0.03 per share in connection with the restructuring. The Company recorded the fair value of the 15,000,000 warrants issued with debt at approximately $262,376 at December 31, 2020 as a discount. Lender is granted security interest and lien in all rights, title and interest in the assets and property of the as collateral.

 

F-23

 

 

On December 9, 2020, the Company entered into a Promissory Debentures with a lender in the amount of $110,000 which bear compounded annual interest at eighteen (18%) percent and have a two (2) year maturity date and cashless warrants to purchase 1,000,000 shares of our common stock. The notes may be repaid in whole or in part at any time prior to maturity. The lender had advanced a total of $100,000, net of discount in the amount of $10,000 to the Company. The Company recorded the fair value of the 1,000,000 warrants issued with debt at approximately $17,491 at December 31, 2020 as a discount. 

 

On January 6, 2021, the Company entered into a Promissory Debentures with a lender in the amount of $1,000,000 which bear interest at eighteen (15%) percent and have a one (1) year maturity date and cashless warrants to purchase 10,000,000 shares of our common stock, at exercise prices of $0.03 per share. The notes may be repaid in whole or in part at any time prior to maturity. The lender had advanced a total of $900,000, net of discount in the amount of $100,000 to the Company. The Company recorded the fair value of the 10,000,000 warrants issued with debt at approximately $237,811 at the date of issuance as a discount.

 

On June 22, 2021, the Company entered into a Promissory Debentures with a lender in the amount of $11,600,000 which bear interest at twelve (12%) percent and have a three (3) year maturity date and cashless warrants to purchase 70,000,000 shares of our common stock, at exercise prices of $0.10 per share. The notes may be repaid in whole or in part at any time prior to maturity. The lender had advanced a total of $10,500,000, net of discount in the amount of $1,100,000 to the Company. The Company recorded the fair value of the 70,000,000 warrants issued with debt at approximately $5,465,726 at the date the warrants were issued as a discount. Lender is granted senior security interest and lien in all rights, title and interest in the assets and property of the Company as collateral.

 

On August 18, 2021, through a Stock Purchase Agreement in which 100% of the outstanding shares of Global Stem Cell Group, Inc. the Company acquired a 2018 Jaguar F-Pace which was acquired from Benito Novas for $45,000 on January 8, 2019 and assumed the related auto loan, with an original loan amount of $20,991 at 8.99% interest for 48 months and monthly payments of $504.94. As of December 31, 2021, the principal balance of the outstanding auto loan was $5,776.

 

On August 18, 2021, through a Stock Purchase Agreement in which 100% of the outstanding shares of Global Stem Cell Group, Inc. the Company assumed the November 17, 2020, agreement with an Investor for proceeds in the amount of $400,000 treated as a promissory. In exchange for the gross proceeds, the Investor shall receive the right to a perpetual 7.75% (payment percentage) of the revenues of Global Stem Cell Group. The payments of the payment percentage shall be calculated by multiplying the gross quarterly revenues appearing in the financial statements by the payment percentage and treated as accrued interest. Payments shall be made ninety (90) days from the end of each respective fiscal quarter with the first payment to be made on the quarter ending December 31, 2020. Payments may be accrued and deferred if payment would deplete cash, cash equivalent and/or short term investment balances on each respective fiscal quarter by more than twenty (20%) percent. As of December 31, 2021, the principal balance of the outstanding loan was $400,000 and accrued interest totals $87,185. This debt instrument is currently in default due to the non-payment of interest.

 

On September 20, 2021, the Company entered into a Promissory Debentures with a lender in the amount of $1,100,000 which bear interest at twelve (12%) percent and have a three (3) year maturity date and cashless warrants to purchase 7,500,000 shares of our common stock, at exercise prices of $0.085 per share. The notes may be repaid in whole or in part at any time prior to maturity. The lender had advanced a total of $1,000,000, net of discount in the amount of $100,000 to the Company. The Company recorded the fair value of the 7,500,000 warrants issued with debt at approximately $360,607 at the time of issuance as a discount.

 

On December 30, 2021, the parties wished to modify the terms of the Promissory Debentures dated July 13, 2020 in the amount of $6,000 and accrued interest in the amount of $1,578 by issuing a new promissory note and extend the date of maturity. In consideration for the new terms, the Promissory Debenture dated December 30, 2021 shall include a five (5%) percent premium for a total of $7,958 which bear interest at twelve (12%) percent and have a seventeen (17) months maturity date. The notes may be repaid in whole or in part at any time prior to maturity.

 

On December 30, 2021, the parties wished to modify the terms of the Promissory Debentures dated July 15, 2020 in the amount of $84,000 and accrued interest in the amount of $22,162 by issuing a new promissory note and extend the date of maturity. In consideration for the new terms, the Promissory Debenture dated December 30, 2021 shall include a five (5%) percent premium for a total of $111,470 which bear interest at twelve (12%) percent and have a seventeen (17) months maturity date. The notes may be repaid in whole or in part at any time prior to maturity.

 

F-24

 

 

The balance of the promissory as of December 31, 2021 and December 31, 2020 is as follows:

 

  

December 31,

   December 31,
 
   2021   2020 
Promissory notes payable  $20,243,335   $5,911,692 
Less: Discount   6,822,622    295,091 
Less: Deferred finance costs   82,466      
Promissory notes payable, net  $13,338,247   $5,616,601 

 

During the periods ending December 31, 2021 and December 31, 2020, the Company made $1,812 and $0 payments, respectively on the outstanding promissory notes, and recorded $1,781,394 and $61,561, respectively of interest expense and $874,476 and $3,676, respectively of debt discount amortization expense. As of December 31, 2021 and December 31, 2020, the Company had approximately $1,878,251 and $61,561, respectively of accrued interest. As of December 31, 2021 and December 31, 2020, the principal balance of outstanding promissory notes payable was $20,243,335 and $5,911,692, respectively.

 

Derivatives Liabilities

 

The Company determined that the convertible notes outstanding as of December 31, 2020 contained an embedded derivative instrument as the conversion price was based on a variable that was not an input to the fair value of a “fixed-for-fixed” option as defined under FASB ASC Topic No. 815 – 40.

 

The Company determined the fair values of the embedded convertible notes derivatives and tainted convertible notes using the lattice valuation model with the following assumptions:

 

   December 31,
 
   2021 
Common stock issuable   75,710 
Market value of common stock on measurement date  $0.27 
Adjusted exercise price  $0.21 
Risk free interest rate   .68%
Instrument lives in years   3.00 Year 
Expected volatility   121%
Expected dividend yields   
None
 

 

At December 7, 2020 the Company exchanged $5,379,624 of principal, default penalty and accrued but unpaid interest on convertible notes for $5,379,624 promissory notes and cashless warrants to purchase 15,000,000 shares of our common stock which eliminated the derivative liability associated with this debt.

 

The balance of the fair value of the derivative liability as of December 31, 2021 and December 31, 2020 is as follows:

 

Balance at December 31, 2019  $4,730,990 
Additions   532,401 
Fair value loss   1,233,277 
Conversions   (6,496,668)
Balance at December 31, 2020   
-
 
Additions   24,186 
Fair value gain   (3,744)
Conversions   
-
 
Balance at December 31, 2021  $20,442 

 

F-25

 

 

NOTE 5 – CONVERTIBLE PREFERRED STOCK

 

Designation of Series CC Convertible Preferred Stock

 

On November 26, 2019, the Company filed with the Secretary of State with Nevada an amendment to the Company’s Articles of Incorporation, as amended (the “Articles of Incorporation”), authorizing one thousand (1,000) shares of a new series of preferred stock, par value $0.001 per share, designated “Series CC Convertible Preferred Stock,” for which the board of directors established the rights, preferences and limitations thereof.

 

At any time prior to November 25, 2022 (“Automatic Conversion Date”) the Company may redeem for cash out of funds legally available therefor, any or all of the outstanding Series CC Convertible Preferred Stock at a price equal to $1,000 per share. If not converted prior, on the Automatic Conversion Date, any and all remaining issued and outstanding shares of Series CC Convertible Preferred Stock shall automatically convert at the Conversion Price, which is a price per share determined by dividing the number of issued and outstanding shares of (common?) stock of the Company on the date of conversion by 1,000 and multiply the results by 0.8.

 

Each holder of outstanding shares of Series CC Convertible Preferred Stock shall be entitled to convert prior to the Automatic Conversion Date, convert part or all of its shares of Series CC Convertible Preferred Stock into a number of fully paid and nonassessable shares of common stock at a price per share determined by dividing the number of issued and outstanding shares of stock of the Company on the date of conversion by 1,000 and multiply the results by 0.8 conversion price.

 

The holders of the Series CC Convertible Preferred Stock shall not be entitled to receive dividends paid on the Company’s common stock.

 

The holders of the Series CC Convertible Preferred Stock shall not be entitled to vote on any matter submitted to the shareholders of the Company for their vote, waiver, release or other action.

 

On November 27, 2019, Meso Numismatics, Inc. entered into an Assignment and Assumption Agreement with Global Stem Cells Group Inc., a corporation duly formed under the laws of the State of Florida, Benito Novas and Lans Holdings Inc. a Nevada Corporation whose securities ceased to be registered as of September 18, 2019, whereby Lans Holdings Inc. assigned all of its rights, obligations and interest in, the Letter of Intent it previously entered into with Global Stem Cells Group Inc. and Benito Novas.

 

In consideration for the Assignment, Meso Numismatics, Inc. issued to Lans Holdings Inc. 1,000 shares of its Series CC Convertible Preferred Stock valued at $83,731 calculated based on conversion provision of the Company’s Articles of Incorporation filed with the Secretary of State in Nevada on November 26, 2019. Shareholders of outstanding shares of Series CC Convertible Preferred Stock shall be entitled to convert part or all of its shares of Series CC Convertible Preferred Stock into a number of fully paid and nonassessable shares of common stock at a price per share determined by dividing the number of issued and outstanding shares of stock of the Company on the date of conversion by 1,000 and multiply the results by 0.8 conversion price.

 

The Convertible Series CC Preferred Stock has been classified outside of permanent equity and liabilities since it embodies a conditional obligation that the Company may settle by issuing a variable number of equity shares and the monetary value of the obligation is based on a fixed monetary amount known at inception. The Company has recorded $83,731 which represents 1,000 Series CC Convertible Preferred Stock at $83.73 per share, issued and outstanding as of December 31, 2021 and December 31, 2020, outside of permanent equity and liabilities.

 

F-26

 

 

On November 12, 2020, the Company filed with the Secretary of State in Nevada the amendment to Certificate of Designation authorizing the increase from 1,000 to 8,000,000 shares of the Series CC Convertible Preferred Stock.

 

Pursuant to the terms of the Fifth Post Closing Amendment along with the completion of the acquisition of Global Stem Cells Group Inc., the issuance of the 1,000 shares of the Company’s Series CC Convertible Preferred Stock to Lans Holdings Inc. was terminated and replaced with a cash payment as consideration.

 

As of December 31, 2021 and December 31, 2020, the Company has 0 and 1,000 preferred shares of Series CC Preferred Stock issued and outstanding, respectively. During the period of these financial statements, no dividend was declared or paid on the Series CC preferred shares.

 

NOTE 6 – STOCKHOLDERS EQUITY

 

Common Shares

 

The Board of Directors and shareholders were required to increase the number of authorized shares of common stock from (a) 200,000,000 to 500,000,000 during June 2015, (b) 500,000,000 to 1,500,000,000 during July 2015, and (c) 1,500,000,000 to 6,500,000,000 during March 2016, to adhere to the Company’s contractual obligation to maintain the required reserve share amount for debtholders.

 

2020 Transactions

 

On January 8, 2020, the Company issued 410,000 shares of common stock in conversion of $2,583 convertible notes payable at conversion price of $0.0063: a loss of $4,251 was recorded.

 

On May 19, 2020, the Company issued 802,525 shares of common stock in conversion of $3,290 convertible notes payable at conversion price of $0.0041: a loss of $3,378 was recorded.

 

On July 15, 2020, the Company issued 905,929 shares of common stock in conversion of $4,122 convertible notes payable at conversion price of $0.00455: no loss was recorded.

 

On November 30, 2020, the Company issued 791,104 shares of common stock in conversion of $4,747 convertible notes payable at conversion price of $0.0070: a loss of $2,034 was recorded.

 

2021 Transactions

 

On February 24, 2021, the Company issued 36,232 shares of common stock for consulting services where were valued in the amount of $10,000.

 

On April 16, 2021, the Company issued 33,772 shares of common stock for consulting services which were valued in the amount of $10,000.

 

On June 28, 2021, the Company issued 1,092,866 shares of common stock as settlement of the lawsuit, which were valued in the amount of $213,109.

 

On December 23, 2021, the Company issued 52,659 shares of common stock for consulting services which were valued in the amount of $10,000.

 

As of December 31, 2021 and December 31, 2020, the Company has 12,085,125 and 10,869,596 common shares issued and outstanding, respectively.

 

F-27

 

 

Warrants

 

During the year ended December 31, 2020, the Company issued warrants to purchase 16,000,000 shares of common stock, at exercise prices of $0.03 per share. These warrants expire three years from issuance date. The Company recorded the fair value of the 16,000,000 warrants issued with debt at approximately $279,867 at December 31, 2020 as a discount.

 

On January 6, 2021, the Company issued warrants to purchase 10,000,000 shares of common stock, at exercise prices of $0.033 per share. These warrants expire three years from issuance date. The Company recorded the fair value of the 10,000,000 warrants issued with debt at approximately $237,811 as a discount.

 

On June 22, 2021, the Company issued warrants to purchase 70,000,000 shares of common stock, at exercise prices of $0.100 per share. These warrants expire three years from issuance date. The Company recorded the fair value of the 70,000,000 warrants issued with debt at approximately $5,465,726 as a discount.

 

On September 20, 2021, the Company issued warrants to purchase 7,500,000 shares of common stock, at exercise prices of $0.085 per share. These warrants expire three years from issuance date. The Company recorded the fair value of the 7,500,000 warrants issued with debt at approximately $360,607 as a discount.

 

The following table summarizes the Company’s warrant transactions during the year ended December 31, 2021 and year ended December 2020:

 

   Number of
Warrants
   Weighted
Average
Exercise
Price
 
Outstanding at year ended December 31, 2019   
-
   $
-
 
Granted   16,000,000    0.030 
Exercised   
-
    
-
 
Expired   
-
    
-
 
Outstanding at year ended December 31, 2020   16,000,000   $0.030 
Granted   87,500,000    0.091 
Exercised          
Expired          
Outstanding at quarter ended December 31, 2021   103,500,000   $0.082 

 

Warrants granted in the year ended December 31, 2020 were valued using the Black Scholes Model with the risk-free interest rate of 0.20%, expected life 3 years, expected dividend rate of 0% and expected volatility ranging of 411.72%.

 

Warrants granted in the year ended December 31, 2021 were valued using the Black Scholes Merton Model with the risk-free interest rate within ranges between 0.20% to 0.45%, term of 3 years, dividend rate of 0% and historical volatility ranging between 338.36% to 394.78%. The final value assigned to the warrants was determined using a relative fair value calculation between the amount of warrants and promissory notes.

 

Designation of Series AA Super Voting Preferred Stock

 

On June 30, 2014, the Company filed with the Secretary of State with Nevada an amendment to the Company’s Articles of Incorporation, authorizing the issuance of up to eleven million (11,000,000) shares of preferred stock, par value $0.001 per share.

 

On May 2, 2014, the Company filed with the Secretary of State with Nevada in the form of a Certificate of Designation that authorized the issuance of up to one million (1,000,000) shares of a new series of preferred stock, par value $0.001 per share, designated “Series AA Super Voting Preferred Stock,” for which the board of directors established the rights, preferences and limitations thereof.

 

F-28

 

 

All of the Holders of the Series AA Super Voting Preferred Stock together, voting separately as a class, shall have an aggregate vote equal to sixty-seven (67%) percent of the total vote on all matters submitted to the stockholders that each stockholder of the Corporation’s Common Stock is entitled to vote at each meeting of stockholders of the Corporation (and written actions of stockholders in lieu of meetings) with respect to any and all matters presented to the stockholders of the Corporation for their action and consideration.

 

The holders of the Series AA Super Voting Preferred Stock shall not be entitled to receive dividends paid on the Company’s common stock.

 

Upon liquidation, dissolution and winding up of the affairs of the Company, whether voluntary or involuntary, the holders of the Series AA Super Voting Preferred Stock shall not be entitled to receive out of the assets of the Company, whether from capital or earnings available for distribution, any amounts which will be otherwise available to and distributed to the common shareholders.

 

The shares of the Series AA Super Voting Preferred Stock will not be convertible into the shares of the Company’s common stock.

 

During 2014, the Company and S & M Chuah Enterprises Ltd, agreed to an exchange of 900,000,000 common shares previously issued to S & M Chuah Enterprises Ltd, entity controlled by Ken Chua, CEO & board member for 500,000 shares of Series AA Preferred Stock of the Corporation, par value $0.001 per share. The 900,000,000 common shares were returned to the Company’s transfer agent for cancellation. The shares were valued on the date of the agreement using the par value of $0.001, since the shares were non-convertible, non-tradable super voting only.

 

During 2014, the Company and E-Network de Costa Rica S.A., entity controlled by Melvin Pereira mutually agreed upon amount of 500,000 shares of Series AA Preferred Stock of the Corporation, par value $0.001 per share, as a compensation for becoming the new CEO of Pure Hospitality Solutions Inc. The shares were valued on the date of the agreement and are non-convertible, non-tradable super voting only.

 

On November 26, 2019, the Company filed with the Secretary of State with Nevada an amendment to the Company’s Articles of Incorporation, authorizing the increase to 1,050,000 shares of the Series AA Super Voting Preferred Stock.

 

On June 26, 2020, Meso Numismatics, Inc. completed the repurchase of 1,000,000 shares of its Series AA (“Series AA”) Super Voting Preferred Stock for an aggregate total purchase price equal to $160,000, representing all of the Series AA shares held by E-Network de Costa Rica S.A. and S&M Chuah Enterprises Ltd., respectively.

 

On June 26, 2020, due to Mr. Pereira’s resignation, Meso Numismatics, Inc.’s Board of Directors appointed Mr. David Christensen, current Director and President of the Company, to serve as Chief Executive Officer, Chief Financial Officer and Secretary, effective June 27, 2020 and granted 50,000 shares of Series AA to Mr. David Christensen.

 

The $166,795 value of the 50,000 shares of Series AA Super Voting Preferred Stock to Mr. David Christensen is based on the 10,000 votes per preferred share to one vote per common share. Valuation based on definition of control premium is defined as the price to which a willing buyer and willing seller would agree in any arms-length transaction to acquire control of the Company. The premium paid above the market value of the company is real economic benefit to controlling the Company. Historically, the average control premium applied in M&A transactions averages approximately 30%, which represents the value of control.

 

On August 18, 2021, Meso Numismatics, Inc., completed its acquisition of Global Stem Cells Group Inc., through a Stock Purchase Agreement acquiring all the outstanding capital stock of Global Stem Cells Group Inc and paid the purchase price of a total of 1,000,000 shares of Series AA Preferred Stock in the Company, 8,974 shares of Series DD Preferred Stock in the Company and $225,000 USD (the final payment of $50,000 was made on July 2, 2021).

 

The Series AA Preferred shares issued on August 18, 2021, were valued based upon industry specific control premiums and the Company’s market cap at the time of the transaction. The $963,866 value of the 1,000,000 shares of Series AA Super Voting Preferred Stock issued to Benito Novas were valued based on a calculation by a third party independent valuation specialist.

 

As of December 31, 2021 and December 31, 2020, the Company has 1,050,000 and 50,000 preferred shares of Series AA Preferred Stock issued and outstanding, respectively. During the period of these financial statements, no dividend was declared or paid on the Series AA preferred shares.

 

F-29

 

 

Designation of Series BB Preferred Stock

 

On March 29, 2017, the Company filed with the Secretary of State with Nevada in the form of a Certificate of Designation that authorized the issuance of up to one million (1,000,000) shares of a new series of preferred stock, par value $0.001 per share, designated “Series BB Preferred Stock,” for which the board of directors established the rights, preferences and limitations thereof.

 

Each holder of outstanding shares of Series BB Preferred Stock shall be entitled to convert on a 1 for 1 basis into shares of the Company’s common stock, any or all of their shares of Series BB Preferred Stock after a minimum of six (6) months have elapsed from the issuance of the preferred stock to the holder. The Series BB Preferred Stock has no voting rights until the Holder redeems the preferred stock into the Company’s common stock. The Series BB Preferred Stock shall not be adjusted by the Corporation.

 

The holders of the Series BB Preferred Stock shall not be entitled to receive dividends paid on the Company’s common stock.

 

The Series BB Preferred Stock has a liquidation value of $1.00. Upon liquidation, dissolution and winding up of the affairs of the Company, whether voluntary or involuntary, the holders of the Series BB Preferred Stock shall be entitled to share equally and ratably in proportion to the preferred stock owned by the holder to receive out of the assets of the Company, whether from capital or earnings available for distribution, any amounts which will be otherwise available to and distributed to the common shareholders.

 

As of December 31, 2019, 81,043 Preferred Series BB shares were exchanged for an aggregate of $97,252 convertible notes and 276,723 Preferred Series BB shares were exchanged for an aggregate of $332,068 promissory notes of which 78,620 were returned and cancelled and 279,146 were still outstanding at December 31, 2020. During the three months ended March 31, 2021, the remaining 279,146 were returned and cancelled.

 

As of December 31, 2021 and December 31, 2020, the Company had 0 and 279,146, respectively, of preferred shares of Series BB Preferred Stock issued and outstanding. During the period of these financial statements, no dividend was declared or paid on the Series BB preferred shares.

 

Designation of Series DD Convertible Preferred Stock

 

On November 26, 2019, the Company filed with the Secretary of State with Nevada an amendment to the Company’s Articles of Incorporation, authorizing ten thousand (10,000) shares of a new series of preferred stock, par value $0.001 per share, designated “Series DD Convertible Preferred Stock,” for which the board of directors established the rights, preferences and limitations thereof.

 

Each holder of outstanding shares of Series DD Convertible Preferred Stock shall be entitled to its shares of Series DD Convertible Preferred Stock into a number of fully paid and nonassessable shares of common stock determined by multiplying the number of issued and outstanding shares of common stock of the Company on the date of conversion by 3.17 conversion price.

 

The holders of the Series DD Convertible Preferred Stock shall not be entitled to receive dividends paid on the Company’s common stock.

 

The holders of the Series DD Convertible Preferred Stock shall not be entitled to vote on any matter submitted to the shareholders of the Company for their vote, waiver, release or other action.

 

F-30

 

 

On August 18, 2021, Meso Numismatics, Inc., completed its acquisition of Global Stem Cells Group Inc., through a Stock Purchase Agreement acquiring all the outstanding capital stock of Global Stem Cells Group Inc and paid the purchase price of a total of 1,000,000 shares of Series AA Preferred Stock in the Company, 8,974 shares of Series DD Preferred Stock in the Company and $225,000 USD (the final payment of $50,000 was made on July 2, 2021).

 

The $5,038,576 value of the 8,974 shares of Series DD Convertible Preferred Stock to Benito Novas is based on converting into a number of fully paid and nonassessable shares of common stock determined by multiplying the number of issued and outstanding shares of common stock of the Company on the date of conversion by 3.17 conversion price. The $5,038,576 value of the 8,974 shares of Series DD Convertible Preferred Stock represents the fair value of the consideration paid allocated to the assets and liabilities acquired from Global Stem Cells Group Inc.

 

In consideration of mutual covenants set forth in the Professional Service Consulting Agreement, Dave Christensen, current Director, President, Chief Executive Officer, Chief Financial Officer and Secretary, shall be compensated monthly based on annual rate of $90,000, starting January 1, 2022. Additionally, the agreement includes an issuance of 896 shares of Series DD Preferred Stock of the Company. An amount of 448 shares are issued on August 18, 2021 and the remaining 448 to be issued February 18, 2022.

 

The $503,072 value of the 896 shares of Series DD Convertible Preferred Stock is based on converting into a number of fully paid and nonassessable shares of common stock determined by multiplying the number of issued and outstanding shares of common stock of the Company on the date of conversion by 3.17 conversion price. The $251,536 value of the 448 shares of Series DD Convertible Preferred Stock to be issued February 18, 2022 was recorded as stock payable. The full amount of $503,552 was expensed at the date of grant, as a matter of accounting policy. There is $251,776 recorded as stock payable – related party due to Dave Christensen, CEO, at December 31, 2021.

 

As of December 31, 2021 and December 31, 2020, the Company had 9,422 and 0 preferred shares of Series DD Convertible Preferred Stock issued and outstanding, respectively, with 448 will be issued in February 2022. During the period of these financial statements, no dividend was declared or paid on the Series DD preferred shares.

 

NOTE 7 – RELATED PARTY TRANSACTIONS

 

On June 25, 2020, Mr. Martin Chuah submitted his resignation as Director of the Company, effective June 26, 2020. There are no disagreements between Mr. Chuah and Meso Numismatics, Inc. on any matter relating to its operations, policies or practices.

 

On June 26, 2020, Mr. Melvin Pereira submitted his resignation as Chief Executive Officer, Chief Financial Officer, Secretary and Director of Meso Numismatics, Inc., effective June 26, 2020. There are no disagreements between Mr. Pereira and Meso Numismatics, Inc. on any matter relating to its operations, policies or practices.

 

On June 26, 2020, Meso Numismatics, Inc. completed the repurchase of 1,000,000 shares of its Series AA Super Voting Preferred Stock for an aggregate total purchase price equal to $160,000, representing all of the Series AA shares held by E-Network de Costa Rica S.A. and S&M Chuah Enterprises Ltd., respectively.

 

On June 26, 2020, due to Mr. Pereira’s resignation, Meso Numismatics, Inc.’s Board of Directors appointed Mr. David Christensen, current Director and President of the Company, to serve as Chief Executive Officer, Chief Financial Officer and Secretary, effective June 27, 2020 and granted 50,000 shares of Series AA Super Voting Preferred Stock to Mr. David Christensen.

 

In consideration of mutual covenants set forth in the Professional Service Consulting Agreement, Dave Christensen, current Director, President, Chief Executive Officer, Chief Financial Officer and Secretary, shall be compensated monthly based on annual rate of $90k starting January 1, 2022. Additionally, the agreement includes an issuance of 896 shares of Series DD Preferred Stock of the Company. An amount of 448 shares are issued on August 18, 2021 and the remaining 448 to be issued February 18, 2022. Amounts paid to Enterprise Technology Consulting, a Company 100% owned by Dave Christensen, CEO, for consulting services during 2021 were $60,000.

 

The Company paid Lans Holdings Inc., by delivery in escrow on November 3, 2021, an amount equal to USD $8,200,000.

 

F-31

 

 

On August 18, 2021, through a Stock Purchase Agreement in which 100% of the outstanding shares of Global Stem Cell Group, Inc. the Company acquired a 2018 Jaguar F-Pace which was acquired from Benito Novas for $45,000 on January 8, 2019 and assumed the related auto loan, with an original loan amount of $20,991 at 8.99% interest for 48 months and monthly payments of $504.94. As of December 31, 2021, the principal balance of the outstanding auto loan was $5,776.

 

On August 18, 2021, through a Stock Purchase Agreement in which 100% of the outstanding shares of Global Stem Cell Group, Inc. the Company acquired 50,000,000 shares of common stock from Aesthetic Marketing Group, LLC on May 23, 2019. Aesthetic Marketing Group is wholly owned by Benito Novas, CEO of Global Stem Cell Group, Inc.

 

Benito Novas’, (CEO of Global Stem Cell Group, Inc.) brother, sister and nephew provide marketing/administrative and training/R&D services to Global Stem Cells Group and were paid as consultants from August 18, 2021 to December 31, 2021 in aggregate $101,175.

 

NOTE 8 – COMMITMENTS AND CONTINGENCIES

 

On May 12, 2015, the Company issued a convertible promissory Note (the “Note”) in the principal amount of $25,000 to Tarpon Bay Partners, LLC (“Tarpon Bay”) whose principal at the time is now known as a “Bad Actor” under SEC rules. On or about January 23, 2017, Tarpon Bay elected to convert principal and interest under the Note into shares of the Company’s common stock. On or about June 6, 2017 the Note was assigned to J.P. Carey Enterprises, Inc. (“J.P.”). On or about June 7, 2017, J.P. elected to convert principal and interest under the Note into shares of the Company’s common stock. Joseph Canouse, a principal at J.P., initiated a lawsuit against the Company in Fulton County Court, in Georgia for, among other things, breach of contract. A default judgment was entered into against the Company for failure to response to these claims. The court then issued an Order of Judgement against the Company in the amount of $282,500 which was recorded in accounts payable as of December 31, 2017. The Company appealed the Courts’ decision and in November 2018, while the Court of Appeals affirmed liability under the judgment, the Court of Appeals vacated the award of the entire judgment amount and remanded the case back to the trial court with instructions.

 

On June 23, 2021, the Company entered into a settlement agreement for an outstanding lawsuit for consideration of $300,000 in cash and 1,092,866 shares of common stock in the amount of $213,109. The $513,109 settlement was offset by the $282,500 which was recorded in accounts payable as of December 31, 2017 resulting in expense of $231,109 during the six months ended June 30, 2021.

 

On June 28, 2021, the Company paid $300,000 in cash and issued 1,092,866 shares of common stock as settlement of the lawsuit, in the amount of $213,109, resulting in an outstanding balance of $0 as of December 31, 2021.

 

Per an Agreement between Global Stem Cell Group and a lender dated November 17, 2020, in the event that any of Global Stem Cell Group, and/or the Entities and /or Parent (individually the “Company” and collectively the “Companies”) dispose of any Assets to any party or third party or parties (an “Asset Disposition”), then Global Stem Cell Group shall undertake to cause such party, third party or parties to acquire the Right from the Investor. The consideration for the Right shall be equal to the fair value (“FV”) of the Assets at the time of the Asset Disposition (the “Asset Disposition Payment”). The Asset Disposition Payment shall not exceed 27.5% (twenty-seven and a half percent) of the FV of the Assets. As part of the agreement, should the Global Stem Cell Group consummate its acquisition agreement with Meso Numismatics, Inc., so long as Meso Numismatics, Inc. agrees to be bound by the provision after the acquisition, then that provision will not trigger at the time of sale of the Global Stem Cell Group to Meso Numismatics, Inc.

 

During the period ending December 31, 2021, Global Stem Cell Group, Inc. entered into the Cancun lease with HELLIMEX, S.A. DE CV beginning January 16 2022 and ending on January 15, 2024. The property is located in the Tulum Trade Center, consisting of 1,647 square feet with a monthly rent of $2,714 and security deposit of $5,588.

 

F-32

 

 

NOTE 9 – PROPERTY AND EQUIPMENT, NET

 

Property and equipment, net consisted of the following:

 

   December 31,
2021
   December 31,
2020
 
Computer and office equipment (5 year useful life)  $66,445   $4,000 
Less: accumulated depreciation   (43,536)   (1,800)
Total property and equipment, net  $22,909   $2,200 

 

Depreciation expense for the years ended December 31, 2021 and December 31, 2020 was $40,858 and $800, respectively.

 

NOTE 10 – ACQUISITION

 

On August 18, 2021, through a Stock Purchase Agreement in which 100% of the outstanding shares of Global Stem Cell Group, Inc. were acquired for $225,000 in cash, the issuance of 1,000,000 shares of preferred series AA stock and the issuance of 8,974 shares of preferred series DD stock.

 

The preliminary purchase price for the merger was determined to be $6.229 million, which consists of (i) 1 million shares of Series AA preferred stock valued at approximately $964,000, (ii) 8,974 shares of Series DD preferred stock valued at approximately $5.04 million and (iii) $225,000 in cash of which $175,000 was advanced in prior to closing of the transaction.

 

The Company accounted for the Stock Purchase Agreement as a business combination under the acquisition method of accounting. Under ASC 805 Business Acquisitions, determination of the accounting acquirer follows the requirements for control contained within ASC 810 Consolidations. Meso Numismatics, Inc. was determined to be the accounting acquirer based upon the terms of the Stock Purchase Agreement and other factors including the voting provisions contained within the Series AA preferred stock. Those voting provisions require that for (1) any change of control or (2) for any change in directors that the Series AA can only vote in a unanimous fashion, therefore the shares held by the current CEO and board Chairman prior to the date of the acquisition remain in control of the combined entity. In addition, no new officers or directors were brought on board as a result of the acquisition.

 

The following table presents an allocation of the purchase price to the net assets acquired, inclusive of intangible assets, with the excess fair value recorded to goodwill. The goodwill, which is not deductible for tax purposes, is attributable to the assembled workforce of Global Stem Cells Group, planned growth in new markets, and synergies expected to be achieved from the combined operations of Meso Numismatics, Inc. and Global Stem Cells Group.

 

Description 

As of

August 18,

2021

 
Cash Payments to GSCG  $225,000 
Fair value of  1,000,000 shares of preferred series AA stock   963,866 
Fair value of  8,974 shares of preferred series DD stock   5,038,576 
Accounts payable and accrued liabilities   164,252 
Note payables   407,588 
Due to MESO   250,000 
Total consideration  $7,049,282 
      
Cash and cash equivalents   716,647 
Accounts receivable   14,006 
Property and equipment, net   25,491 
Intangible assets, net   487,700 
Total fair value of assets acquired   1,243,844 
Consideration paid in excess of fair value (Goodwill)  (1)  $5,805,438 

 

(1)The consideration paid in excess of the net fair value of assets acquired and liabilities assumed has been recognized as goodwill.

 

F-33

 

 

Under the provisions of purchase accounting, the Company has up to 1 year from the date of the acquisition to finalize the accounting for the assets acquired and liabilities assumed. The amounts included in the table above are therefore still subject to revision should additional information become available to the Company regarding the assets acquired and liabilities assumed. 

 

NOTE 11 – INTELLECTUAL PROPERTY

 

A third party independent valuation specialist was asked to determine the value of Global Stem Cell Group, Inc., tangible and intangible assets assuming the offering price was at fair value. In order to perform the purchase price allocation, the tangible and intangible assets were valued as of August 18, 2021.

 

The Fair Value of the intangible assets as of the Valuation Date is reasonably represented as:

 

   December 31,
2021
  December 31,
2020
 
Tradename - Trademarks  $87,700  $
          -
 
Intellectual Property / Licenses   363,000   
-
 
Customer Base   37,000   
-
 
Intangible assets   487,700   
-
 
Less: accumulated amortization   (36,076)  
-
 
Total intangible assets, net  $451,624  $
-
 

 

Amortization is computed on straight-line method based on estimated useful lives of 5 years. During the year ended December 31, 2021, the Company recorded amortization expense of the intellectual property of $36,076.

 

NOTE 12 – INCOME TAXES

 

Due to the Company’s net losses, there were no provisions for income taxes for the years ended December 31, 2021 and 2020. The difference between the income tax expense of zero shown in the statement of operations and pre-tax book net loss times the federal statutory rate of 21% is due to the change in the valuation allowance.

 

The benefit for income taxes differed from the amount computed using the U. S federal income tax rate of 21% for December 21, 2021, as follows

 

   2021 
Income tax (benefit)  $(2,705,741)
Non-deductible   345,741 
Change in valuation allowance   2,360,000 
Income tax (benefit) per financial statements  $
-
 

 

Deferred income tax assets as of December 31, 2021 and 2020 were as follows:

 

   December 31,
2021
   December 31,
2020
 
Deferred Tax Assets:        
Net operating losses  $3,619,294   $1,259,107 
Less valuation allowance   (3,619,294)   (1,259,107)
Total deferred tax assets  $
-
   $
-
 

 

F-34

 

 

The Company has recorded a full allowance against its deferred tax assets as of December 31, 2021 and 2020 because management determined that it is not more-likely-than not that those assets will be realized. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of deferred assets will not be realized. The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.