We have audited the accompanying
financial statements of Bolder BioPATH, Inc. (the "Company") (an S Corporation), which comprise the balance sheets as of December
31, 2020 and 2019, and the related statements of operations, changes in stockholders' equity, and cash flows for the years then ended,
and the notes to the financial statements.
Management is responsible for
the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the
United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and
fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Our responsibility is to express
an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement.
An audit involves performing procedures
to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's
judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In
making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the
financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating
the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well
as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our audit opinion.
In our opinion, the financial statements
referred to above present fairly, in all material respects, the financial position of Bolder BioPATH, Inc. as of December 31, 2020 and
2019, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally
accepted in the United States of America.
As described in Note 13 to the
financial statements, subsequent to the issuance of the Company's 2020 and 2019 financial statements and our report dated March 24,
2021, management determined an error as it relates to the calculation of the Company's contract assets, liabilities, and revenues on
contracts in progress. In our original report, we expressed an unmodified opinion on the 2020 and 2019 financial statements, and our
opinion on the revised statements, as expressed herein, remains unmodified.
See accompanying notes to the financial statements and independent
auditor's report.
See accompanying notes to the financial statements and independent
auditor's report.
See accompanying notes to the financial statements and independent
auditor's report.
See accompanying notes to the financial statements and independent
auditor's report.
Notes to the Financial Statements
December
31, 2020 and 2019
Note
1 - Summary of Significant Accounting Policies
The
accounting and reporting policies of Bolder BioPATH, Inc. (the "Company") conform to accounting principles generally accepted
in the United States of America. The following summary of significant accounting policies is presented to assist the reader in evaluating
the Company's financial statements.
Business
Activity - The Company, incorporated on May 14, 2002, is headquartered in Boulder, Colorado and provides contract pharmacology, toxicology,
and pathology services specializing in In Vivo models of rheumatoid arthritis, osteoarthritis, and cancer as well as other autoimmune
and inflammation models with the goal of providing pre-clinical data to support advancing proteins and small molecules to investigational
new drug or new drug application ("IND/NDA") stage.
Basis
of Accounting - The Company maintains its accounting records on the accrual basis of accounting. This method is based on the matching
concept of accounting principles generally accepted in the United States of America. As a result, revenues are recognized when they are
earned and expenses are recognized when they are incurred.
Use
of Estimates - The preparation of 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, disclosures
of contingent 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.
Cash
and Cash Equivalents - For purposes of the balance sheets and cash flow statements, cash and cash equivalents include all bank accounts
of the Company that have maturities of three months or less.
Accounts
receivable - Accounts receivable include customer obligations due under normal trade terms for amounts billed pursuant to the agreed
upon billing schedule for each respective study. The Company records accounts receivable at their net realizable value, which requires
management to estimate the collectability of the Company's receivables. Judgment is required in assessing the realization of these receivables,
including the credit worthiness of each counterparty and the related aging of past due balances.
Bolder BioPATH, Inc.
Notes to the Financial Statements
December
31, 2020 and 2019
Note 1 - Summary of
Significant Accounting Policies (continued)
Accounts
receivable continued - Management evaluates all accounts and a reserve is established based on the best facts available based on
management's assessment of their collectability. After all attempts to collect a receivable have failed, the receivable is written off
through the allowance for doubtful accounts. The allowance for doubtful accounts is estimated by analyzing the payment history of customers
and current economic conditions. The allowance for doubtful accounts was $51,058 and $53,027 as of December 31, 2020 and 2019, respectively.
Property
and Equipment - Property and equipment are stated at cost net of accumulated depreciation. Depreciation is computed using the straight-line
method over the estimated useful lives of the assets. Expenditures for major renewals and betterments that extend the useful lives of
equipment are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred. All tangible personal property
with a useful life of more than one year and a unit acquisition cost of $1,500 or more is capitalized and depreciated over its useful
life using the straight-line method. The Company expenses the full acquisition cost of tangible personal property below this threshold
in the year of purchase. Estimated useful lives on property and equipment are as follows:
|
|
|
|
Years
|
|
|
Leasehold improvements
|
|
|
5-11
years
|
|
|
Machinery and equipment
|
|
|
5
years
|
|
|
Vehicles
|
|
|
5
years
|
|
|
Computer equipment
|
|
|
5
years
|
|
|
Furniture and fixtures
|
|
|
7
years
|
|
Leasehold
improvements are amortized over the shorter of the lease term or useful life of the asset.
Depreciation
expense was $995,623 and $344,152 for the years ended December 31, 2020 and 2019, respectively.
Long-Lived
Assets - The Company evaluates its long-lived assets in accordance with Accounting Standards Codification ("ASC") 360-10-50,
“Accounting for the Impairment or Disposal of Long-lived Assets,” which requires reviewing long-lived assets for impairment
whenever events or changes in circumstances indicate that the carrying amount of an asset may not be reasonable. Recoverability of these
assets is measured by comparison of their carrying amounts to future undiscounted cash flows the assets are expected to generate. If
long-lived assets are considered to be impaired, the impairment to be recognized equals the amount by which the carrying value of the
assets exceeds fair market value and is recorded in the year the determination was made. There was no impairment of long-lived assets
as of December 31, 2020 or 2019, respectively.
Bolder BioPATH, Inc.
Notes to the Financial Statements
December
31, 2020 and 2019
Note
1 - Summary of Significant Accounting Policies (continued)
Revenue
Recognition - In accordance with the Accounting Standards Update (“ASU”)2014-09, “Revenue from Contracts with
Customers” (Topic 606), the Company recognizes revenue upon the transfer of goods and services to a customer at an amount that
reflects the consideration it expects to receive in exchange for those goods or services. The Company earns revenue through service contracts,
which are generally fixed price arrangements subject to pricing adjustments based on changes in scope. In cases where performance spans
multiple accounting periods, revenue is recognized as the respective clinical study progresses. The total contract value, or total contractual
payments, represents the aggregate contracted price for each of the agreed upon services to be provided. Changes in the scope of work
are common and generally result in a change in contract value.
When
a customer has agreed to a change in scope and renegotiated pricing terms, the contract value is amended with revenue recognized as described
above. Revenue is recognized as services are performed, generally using an output method based on milestones specific to each respective
contract, multiplied by the total contract value. The Company believes that this method used reasonably depict the progress of the Company
towards completing its obligations.
Billing
schedules and payment terms are generally negotiated on a contract-by-contract basis. The Company bills the customer for the total contract
value in progress-based installments as certain non-contingent billing milestones are reached over the contract duration, such as contract
signing, completion of the study, and delivery of the report. The term "billing milestone" relates only to a billing trigger
in a contract whereby amounts become billable and payable in accordance with a negotiated predetermined billing schedule throughout the
term of the project. These billing milestones are generally not performance- based (i.e., there is no potential additional consideration
tied to specific deliverables or performance).
In
other cases, services may be provided and revenue recognized before the customer is invoiced. In these cases, revenue recognized will
exceed amounts billed and represents a contract asset on the balance sheet. Once the customer is invoiced, the contract asset is reduced
for the amount billed and a corresponding accounts receivable is recorded.
In
some cases, payments received are in excess of revenue recognized. Payments received in advance of services being provided are deferred
as unearned revenue on the balance sheet. As the contracted services are subsequently performed and the associated revenue is recognized,
the unearned revenue balance is reduced by the amount of revenue recognized during the period.
Bolder BioPATH, Inc.
Notes to the Financial Statements
December
31, 2020 and 2019
Note 1 - Summary of
Significant Accounting Policies (continued)
Advertising
- The Company expenses advertising costs as incurred. Advertising expenses charged to operations were $9,687 and $64,996 for the
years ended December 31, 2020 and 2019, respectively.
Research
and Development Costs - Costs and expenses that can be clearly identified as research and development are charged to expense.
Concentration
of Credit Risk - The Company's operations are concentrated in the preclinical Contract Research Organization ("CRO") industry.
As such, the Company's trade accounts receivable, payables and operations are concentrated in this industry.
The
Company extends trade credit, with no interest charged, to its customers on terms that are generally standard practice in the industry
and performs ongoing evaluations of its customers' financial condition. Management believes any credit risk is minimal. For the years
ended December 31, 2020 and 2019, one customer totaled approximately 15% and 36% of accounts receivable and 16% and 25% of sales, respectively.
The
Company maintains cash accounts which, at times, may exceed the federally insured limit. Federal Deposit Insurance Corporation ("FDIC")
insures accounts up to $250,000. As of December 31, 2020, cash balances in excess of federally insured limits were $372,578. There were
no cash balances in excess of federally insured limits as of December 31, 2019.
Income
Taxes - The Company operates as a Subchapter S Corporation. As such, income and expenses of the Company are reported on the stockholders'
individual income tax return. The Company is subject to certain state and local taxes.
The
Company accounts for uncertain tax positions in accordance with ASC 740-10, "Income Taxes." ASC 740-10, "Income
Taxes," provides several clarifications related to uncertain tax positions. Most notably, a "more-likely-than-not"
standard for initial recognition of tax positions, a presumption of audit detection and a measurement of recognized tax benefits based
on the largest amount that has a greater than 50 percent likelihood of realization. ASC 740-10, "Income Taxes," applies
a two-step process to determine the amount of tax benefit to be recognized in the financial statements. First, the Company must determine
whether any amount of tax benefit may be recognized. Second, the Company determines how much of the tax benefit should be recognized
for tax positions that qualify for recognition. No additional liabilities have been recognized. Accordingly, the Company has not recognized
any penalty, interest or tax impact related to uncertain tax positions.
Bolder BioPATH, Inc.
Notes to the Financial Statements
December
31, 2020 and 2019
Note 1 - Summary of
Significant Accounting Policies (continued)
Fair
Value Measurements - The Company adopted the provisions of ASC 820, “Fair Value Measurements” for financial assets
and financial liabilities. ASC 820 defines fair value, establishes a framework for measuring fair value under GAAP, and expands disclosure
about fair value measurements. ASC 820 applies to all financial instruments that are being measured and reported on a fair value basis.
ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. ASC 820 also establishes a fair value hierarchy that prioritizes the inputs used
in valuation methodologies into the following three levels:
|
|
•
|
Level
1 Inputs - Unadjusted: quoted prices in active markets for identical assets or liabilities.
|
|
|
•
|
Level
2 Inputs - Observable: inputs other than Level 1 prices, such as quoted prices for similar
assets or liabilities; quoted prices in markets that are not active; or other inputs that
are observable or can be corroborated by observable market data for substantially the full
term of the assets or liabilities.
|
|
|
•
|
Level
3 Inputs - Unobservable: inputs that are supported by little or no market activity and that
are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities
include financial instruments whose value is determined using pricing models, discounted
cash flow methodologies, or other valuation techniques, as well as instruments for which
the determination of fair value requires significant management judgment or estimation.
|
The
carrying amounts of cash, accounts receivable, prepaid expenses, account payable and other accruals approximate their fair values because
of the short-term maturities or expected settlement dates of these instruments. All other significant financial assets or liabilities
of the Company are either recognized or disclosed in the financial statements together with information relevant for making a reasonable
assessment of future cash flows, interest rate risk, and credit risk.
Leases
- In February 2016, the FASB issued ASU 2016-02, "Leases," (Topic 842) (“ASU 2016-02”), which supersedes
the guidance in former ASC 840, "Leases." The new accounting guidance requires recognition of all long-term lease assets
and lease liabilities by lessees and sets forth new disclosure requirements for those lease assets and liabilities. It requires lessees
to recognize right-of-use ("ROU") assets and lease liabilities on the balance sheet using a modified retrospective approach
at the beginning of the earliest comparative period in the financial statements with a term of greater than 12 months regardless of the
classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases.
Bolder BioPATH, Inc.
Notes to the Financial Statements
December
31, 2020 and 2019
Note 1 - Summary of
Significant Accounting Policies (continued)
Leases
(continued) - The Company adopted this new standard on January 1, 2020 using the required modified retrospective approach and utilizing
the effective date as its date of initial application.
The
Company determines if a contract contains a lease at the inception of the contract. The Company currently has a lease related to its
facility leased for office and laboratory space, which is classified as an operating lease. The lease results in an operating right-of-use
asset, current operating lease liability, and non-current lease liability in the Company’s balance sheet. The Company does not
have any financing leases.
ASU
2016-02 provides a number of optional practical expedients in transition. The Company elected to adopt the 'package of practical expedients',
which permits the Company (i) not to reassess whether expired existing contracts are or contain leases, (ii) not to reassess the classification
of expired or existing leases, and (iii) not to reassess initial direct costs for any existing leases. The Company will continue to differentiate
between finance leases (previously referred to as capital leases) and operating leases using classification criteria that are substantially
similar to the previous guidance. Adoption of this standard resulted in the recognition of a right-of-use asset and a lease liability
on the Company’s January 1, 2020 balance sheet of $2,109,204 and $2,939,162, respectively. There was no material impact resulting
from the adoption on the Company’s statement of operations for the year ended December 31, 2020. Lease liabilities represent an
obligation to make lease payments arising from the lease and ROU assets represent the right to use the underlying asset identified in
the lease for the lease term. Lease liabilities are measured at the present value of the lease payments not yet paid discounted using
the discount rate for the lease established at the lease commencement date. To determine the present value, the implicit rate is used
when readily determinable.
For
leases where the implicit rate is not provided, the Company determines an incremental borrowing rate based on the information available
at the lease commencement date in determining the present value of lease payments. ROU assets are measured at the present value of the
lease payments and also include any prepaid lease payments made and any other indirect costs incurred, and exclude any lease incentives
received. Lease expense is recognized on a straight-line basis over the lease term. In transition to ASC 842, the Company utilized the
remaining lease term of its lease in determining the appropriate incremental borrowing rate. The application of the new standard required
netting of unamortized balance of lease incentives and deferred lease obligation to right-of-use asset at the adoption date. The Company’s
operating lease includes rental escalation clauses that are factored into the determination of lease payments when appropriate. The Company
does not separate lease and non-lease components of contracts.
Bolder BioPATH, Inc.
Notes to the Financial Statements
December
31, 2020 and 2019
Note 2 - Property and
Equipment
Property and equipment consists
of the following as of December 31:
|
|
|
2020
|
|
|
2019
|
|
|
Leasehold improvements
|
|
$
|
6,992,809
|
|
|
$
|
5,775,802
|
|
|
Machinery and equipment
|
|
|
306,278
|
|
|
|
117,777
|
|
|
Vehicles
|
|
|
252,422
|
|
|
|
185,829
|
|
|
Computer equipment
|
|
|
97,106
|
|
|
|
45,009
|
|
|
Furniture and fixtures
|
|
|
17,215
|
|
|
|
15,704
|
|
|
|
|
|
7,665,830
|
|
|
|
6,140,121
|
|
|
Less: accumulated depreciation
|
|
|
(2,571,446
|
)
|
|
|
(1,602,867
|
)
|
|
Property and equipment,
net
|
|
$
|
5,094,384
|
|
|
$
|
4,537,254
|
|
Note 3 - Accrued Liabilities
Accrued liabilities consists
of the following as of December 31:
|
|
|
2020
|
|
|
2019
|
|
|
Stockholder payable
|
|
$
|
136,339
|
|
|
$
|
41,795
|
|
|
Accrued payroll and benefits
|
|
|
36,534
|
|
|
|
-
|
|
|
Accrued bonuses
|
|
|
-
|
|
|
|
148,832
|
|
|
Use taxes
|
|
|
23,734
|
|
|
|
38,495
|
|
|
Other
|
|
|
2,992
|
|
|
|
2,990
|
|
|
Total accrued liabilities
|
|
$
|
199,599
|
|
|
$
|
232,112
|
|
Note 4 - Line of Credit
The
Company has a revolving line of credit with a maximum amount available of $1,000,000. The line of credit bears interest at variable rate
equal to the annual prime rate plus an applicable percentage of 2.00%. The effective interest rates were 5.25% and 6.75% as of December
31, 2020 and 2019, respectively. The line of credit calls for monthly interest only payments with all unpaid principal and interest due
at maturity on April 16, 2021. The line is secured by substantially all assets of the Company. The Company had no principal amounts outstanding
as of December 31, 2020 or 2019, respectively, and through the date of issuance of these financial statements.
Bolder BioPATH, Inc.
Notes to the Financial Statements
December 31, 2020 and 2019
Note 5 - Long-term Debt
The Company regularly
purchases vehicles through promissory notes in the ordinary course of operations. As of December 31, 2020, and 2019, the notes bear
interest at fixed rates ranging from 1.90% to 3.74%, respectively. The notes require monthly principal and interest payments of $965
to $2,374 and $3,604 to $68,886 with maturity dates ranging from May 2020 to September 2023 and November 2022 to April 2026 as of
December 31, 2020, and 2019, respectively. The notes are secured by the underlying asset, as defined in each respective note
agreement. The principal amounts due on the vehicle loans were $145,322 and $81,936 as of December 31, 2020, and 2019,
respectively.
PPP Loan
On April 20, 2020, the Organization
entered into a Paycheck Protection Program ("PPP") loan agreement with an original principal balance of $224,464 and a fixed
interest rate of 1.00%. The loan requires monthly principal payments of $12,634 beginning November 20, 2020 with all principal and unpaid
interest due at maturity on April 20, 2022. The Company accounted for the PPP loan in accordance with ASC 470, "Debt,"
which requires the Company to record the proceeds from the loan as a liability until it has been forgiven, either wholly or in part, and
the Company is legally released from the obligation by the government. Once released, the Company will reduce the liability by the amount
forgiven and record a gain extinguishment in accordance with ASC 450-30, "Gain contingencies." As of December 31, 2020,
the outstanding principal balance was $224,464.
Maturities of the long-term
debt are as follows for the years ended December 31:
|
|
|
|
PPP Loan
|
|
|
Third Party
|
|
|
Total
|
|
|
2021
|
|
|
$
|
151,613
|
|
|
$
|
44,501
|
|
|
$
|
196,114
|
|
|
2022
|
|
|
|
72,851
|
|
|
|
39,128
|
|
|
|
111,979
|
|
|
2023
|
|
|
|
-
|
|
|
|
18,738
|
|
|
|
18,738
|
|
|
2024
|
|
|
|
-
|
|
|
|
19,422
|
|
|
|
19,422
|
|
|
2025
|
|
|
|
-
|
|
|
|
20,132
|
|
|
|
20,132
|
|
|
Thereafter
|
|
|
|
-
|
|
|
|
3,401
|
|
|
|
3,401
|
|
|
|
|
|
$
|
224,464
|
|
|
$
|
145,322
|
|
|
$
|
369,786
|
|
Bolder BioPATH, Inc.
Notes to the Financial Statements
December 31, 2020 and 2019
Note 6 - Related Party
Note Payable
On August 1, 2019 the Company
entered into an unsecured note payable agreement with the owners of the Company with an original principal amount not to exceed $2,000,000
to assist with the expansion cost of the Company’s facility. The Company borrowed $1,000,000 on the effective date of the agreement
and an additional $1,000,000 on November 1, 2019. The related party note payable bore interest at a fixed rate of 8.00% per annum through
December 31, 2019 and decreased to 5.00% on January 1, 2020. The fixed rate is subject to change at the demand of the owners, however
will not exceed 8.00% per annum, as defined in the agreement. The related party note payable requires, at minimum, monthly interest payments
in addition to an undefined amount of principal. All unpaid amount of principal and interest are due at maturity on August 1, 2021. The
principal amounts due on the related party note payable was $1,439,632 and $2,000,000 as of December 31, 2020, and 2019, respectively.
Note 7 - EIDL Advance
On May 1 2020, the Company received
an Economic Injury Disaster Loan Advance ("EIDL Advance") of $10,000 from the United States Small Business Administration (the
"SBA") under its Economic Disaster Loan assistance program in light of the impact of the coronavirus ("COVID-19")
pandemic on the Company's business. The advance is not repayable and is recorded as other income in the accompanying statements of operations.
Note 8 - Related Party
Transactions
The Company receives report writing
services from Report Right, LLC ("Report Right"), a related entity owned by a direct relative of a stockholder. Amounts paid
to Report Right totaled $312,796 and $331,095 for the years ended December 31, 2020 and 2019, respectively. There were no amounts due
to Report Right as of December 31, 2020 or 2019, respectively.
Note 9 - Leases
The Company is obligated under
a non-cancelable lease agreement for its office and laboratory facility in Boulder, Colorado. This operating lease requires escalating
rental payments and expires on November 30, 2026.
As of December 31, 2020, future undiscounted
minimum contractual payments under the Company’s operating lease were $3,267,182. The discount rate for the operating lease
liability was 6.75% which was the Company’s incremental borrowing rate at the ASC 842 adoption date as the discount rate
implicit in the lease could not be readily determined.
Bolder BioPATH, Inc.
Notes to the Financial Statements
December 31, 2020 and 2019
Note 9 - Leases
(continued)
In addition to fixed lease payments,
the Company also has variable lease costs that requires the Company to pay its pro-rata share of real estate taxes and operating costs.
The components of lease expense are as follows related to the Company's leases for the year ended December 31, 2020:
|
Fixed operating lease costs
|
|
$
|
428,268
|
|
|
Variable lease costs
|
|
|
239,054
|
|
|
Total lease cost
|
|
$
|
667,322
|
|
Future fixed minimum rental payments required under
the non-cancelable operating lease agreements are as follows for the years ending December 31:
|
2021
|
|
|
$
|
495,585
|
|
|
2022
|
|
|
|
511,831
|
|
|
2023
|
|
|
|
528,573
|
|
|
2024
|
|
|
|
545,890
|
|
|
2025
|
|
|
|
607,841
|
|
|
Thereafter
|
|
|
|
577,462
|
|
|
Total undiscounted lease payments
|
|
|
|
3,267,182
|
|
|
Less: imputed interest
|
|
|
|
(631,024
|
)
|
|
Total lease liability
|
|
|
$
|
2,636,158
|
|
|
Other information:
|
|
|
|
|
Operating cash flows used for operating lease
|
|
$
|
704,305
|
|
|
Weighted average remaining lease term (in years)
|
|
|
5.9
|
|
|
Weighted-average discount rate
|
|
|
6.75
|
%
|
Under the prior lease accounting guidance, minimum
rental commitments under non-cancelable leases as were as follows as of December 31 2019:
|
2020
|
|
|
$
|
451,523
|
|
|
2021
|
|
|
|
495,585
|
|
|
2022
|
|
|
|
511,831
|
|
|
2023
|
|
|
|
528,573
|
|
|
2024
|
|
|
|
545,890
|
|
|
Thereafter
|
|
|
|
1,185,303
|
|
|
Total minimum lease payments
|
|
|
$
|
3,718,705
|
|
Bolder BioPATH, Inc.
Notes to the Financial Statements
December 31, 2020 and 2019
Note 10 - Retirement Plan
The Company sponsors an Internal
Revenue Code Section 401(k) safe harbor profit sharing plan covering substantially all of its employees. The Company provides a matching
contribution equal to i) 100% up to the first 3% plus ii) 50% on the next 2% of eligible compensation. Company contributions totaled $119,790
and $77,805 for the years ended December 31, 2020 and 2019, respectively.
Note 11 - Risks and Uncertainties
The new strain of COVID-19 in
2020 and the efforts to contain it have negatively impacted the global economy, disrupted manufacturing operations and global supply chains
and created significant volatility and disruption of financial markets. In addition, the COVID-19 pandemic has significantly increased
economic and demand uncertainty. The Company believes the estimates and assumptions underlying the financial statements are reasonable
and supportable based on the information available at the time the financial statements were prepared. However, uncertainty over the impact
COVID-19 will have on the global economy and the Company in particular makes many of the estimates and assumptions reflected in the 2020
financial statements inherently less certain. Therefore, actual results may ultimately differ from those estimates to a greater degree
than historically.
Note 12 - Subsequent Events
In accordance with ASC 855, "Subsequent
Events," management has evaluated all material events or transactions that occurred after December 31, 2020, the balance sheet
date, through March 24, 2021, the date the financial statements were available to be issued, except Note 13 which is through April 6,
2021. Management has determined there are no events or transactions which would impact the financial statements for the year ended December
31, 2020, except as follows:
In March 2021, the Company paid
$400,000 towards the balance due on the related party note payable.
Bolder
BioPATH, Inc.
Notes
to the Financial Statements
December
31, 2020 and 2019
Note 13 - Revisions to
Previously Issued Financial Statements
Subsequent to the issuance of
the Company's 2020 and 2019 financial statements, management determined an error in the calculation of its contract assets, liabilities,
and revenues, as it relates to the Company's contracts in progress resulting in the following adjustments as of and for the years ended:
|
December 31, 2020
|
|
As Previously
Reported
|
|
|
Restated
|
|
|
Unbilled revenue
|
|
$
|
1,084,308
|
|
|
$
|
1,456,126
|
|
|
Deferred revenue
|
|
$
|
698,560
|
|
|
$
|
777,775
|
|
|
Retained earnings
|
|
$
|
5,575,512
|
|
|
$
|
5,868,115
|
|
|
Revenues, net
|
|
$
|
12,945,469
|
|
|
$
|
12,932,434
|
|
|
Net income
|
|
$
|
1,513,526
|
|
|
$
|
1,500,491
|
|
|
December 31, 2019
|
|
As Previously
Reported
|
|
|
Restated
|
|
|
Unbilled revenue
|
|
$
|
1,036,397
|
|
|
$
|
1,392,672
|
|
|
Deferred revenue
|
|
$
|
201,960
|
|
|
$
|
252,597
|
|
|
Retained earnings
|
|
$
|
5,201,075
|
|
|
$
|
5,506,713
|
|
|
Revenues, net
|
|
$
|
13,444,792
|
|
|
$
|
12,985,335
|
|
|
Net income
|
|
$
|
4,275,195
|
|
|
$
|
3,815,738
|
|
