Rapid Therapeutic Science Laboratories, Inc. (Form: 10-Q, Received: 08/13/2020 14:14:19)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X] Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Quarterly Period Ended June 30, 2020

Commission File No. 000-55018

[ ] Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from ________________ to ______________

RAPID THERAPEUTIC SCIENCE

LABORATORIES, INC.

(Exact Name of Registrant as specified in its charter)

Nevada

46-2111820

(State or other jurisdiction

of incorporation)

(IRS Employer

Identification Number)

5580 Peterson Ln., Suite 200

Dallas, TX

75240

(Address of principal

executive offices)

(zip code)

(800) 497-6059

(Registrant’s telephone number, including area code)

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: [X] No: [ ]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted 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 and post such files). Yes: [X] No: [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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 [X] Smaller reporting company [X] Emerging growth company [ ]

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

The number of shares outstanding of Common Stock, par value $0.001 per share, as of August 13, 2020 was 164,278,334 shares.

RAPID THERAPEUTIC SCIENCE LABORATORIES, INC.

(formerly, Holly Brothers Pictures, Inc.)

FORM 10-Q

June 30, 2020

INDEX

	Page
PART I. FINANCIAL INFORMATION

Item 1. Financial Statements	3
Consolidated Balance Sheets as of June 30, 2020 (Unaudited) and March 31, 2020	3
Consolidated Statements of Operations for the three months ended June 30, 2020 and 2019 (Unaudited)	4
Consolidated Statements of Stockholders’ Deficit for the three months ended June 30, 2020 and 2019 (Unaudited)	5
Consolidated Statements of Cash Flows for the three months ended June 30, 2020 and 2019 (Unaudited)	6
Notes to Consolidated Financial Statements (Unaudited)	7

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Item 3. Quantitative and Qualitative Disclosures About Market Risk	17
Item 4. Controls and Procedures	17

PART II. OTHER INFORMATION

Item 1. Legal Proceedings	18
Item 1A. Risk Factors	18
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	18
Item 3. Defaults Upon Senior Securities	19
Item 4. Mine Safety Disclosures	19
Item 5. Other Information	19
Item 6. Exhibits	19
Signature	20

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

RAPID THERAPEUTIC SCIENCE LABORATORIES, INC.

(formerly, Holly Brothers Pictures, Inc.)

Consolidated Balance Sheets

	June 30, 2020		March 31, 2020
Assets	(unaudited)
Current assets:
Cash	$	213,123	$	136,215
Inventory		28,619		5,873
Total current assets		241,742		142,088

Intangible assets:
Sublicense agreement, net of accumulated amortization of $62,500 and $37,500		277,500		302,500

Total assets	$	519,242	$	444,588

Liabilities and Stockholders’ Deficit
Current liabilities:
Accounts payable - other	$	83,426	$	64,577
Equity subscription payable		90,000		90,000
Contract liabilities		-		32,000
Notes payable - related party		23,350		23,350
Notes payable - other		890,233		883,185
Accrued interest payable		423,321		400,720
Derivative liability, at fair value		44,952		-
Total current liabilities		1,555,282		1,493,832

Other liabilities:
Convertible notes payable		315,240		315,240
Total liabilities		1,870,522		1,809,072

Commitments and contingencies (Note 8)

Stockholders’ deficit:
Preferred stock, no par value per share, 100,000,000 shares authorized, no shares issued and outstanding		-		-
Common stock, $.001 par value per share, 750,000,000 and 200,000,000 authorized, 161,874,334 and 159,556,000 shares issued and outstanding		161,874		159,556
Additional paid in capital		2,991,984		2,414,718
Accumulated deficit		(4,167,799)		(3,601,419)
Treasury stock		(337,339)		(337,339)
Total stockholders’ deficit		(1,351,280)		(1,364,484)

Total liabilities and stockholders’ deficit	$	519,242	$	444,588

See accompanying notes to unaudited consolidated financial statements.

RAPID THERAPEUTIC SCIENCE LABORATORIES, INC.

(formerly, Holly Brothers Pictures, Inc.)

Consolidated Statements of Operations

(Unaudited)

	Three Months Ended June 30,
	2020		2019

Revenues	$	129,287	$	-
Costs of goods sold		18,556		-
Gross profit		110,731		-

Operating expenses:
General and administrative		629,510		22,974
Amortization expense		25,000		-
Total operating expenses		654,510		22,974

Other (expense):
Interest expense		(22,601)		(46,099)
Total other income (expense)		(22,601)		(46,099)

Net loss before income taxes		(566,380)		(69,073)
Income taxes		-		-

Net loss	$	(566,380)	$	(69,073)

Net loss per share, basic and diluted	$	(0.00)	$	(0.06)

Weighted average shares outstanding, basic and diluted		160,447,978		1,204,000

See accompanying notes to unaudited consolidated financial statements.

RAPID THERAPEUTIC SCIENCE LABORATORIES, INC.

(formerly, Holly Brothers Pictures, Inc.)

Consolidated Statements of Stockholders’ Deficit

(Unaudited)

				Additional						Total
	Common Stock			Paid-in		Accumulated		Treasury		Stockholders'
	Shares	Amount		Capital		Deficit		Stock		Deficit

Balance at March 31, 2020	159,556,000	$	159,556	$	2,414,718	$	(3,601,419)	$	(337,339)	$	(1,364,484)

Private sales of common stock	960,000		960		239,040		-		-		240,000
Stock compensation expense	1,358,334		1,358		338,226		-		-		339,584
Net loss	-		-		-		(566,380)		-		(566,380)

Balance at June 30, 2020	161,874,334		161,874		2,991,984		(4,167,799)		(337,339)		(1,351,280)


Balance at March 31, 2019	1,204,000		1,204		144,477		(2,976,835)		(337,339)		(3,168,493)

Stock compensation expense	-		-		10,750		-		-		10,750
Net loss	-		-		-		(69,073)		-		(69,073)

Balance at June 30, 2019	1,204,000	$	1,204	$	155,227	$	(3,045,908)	$	(337,339)	$	(3,226,816)

See accompanying notes to unaudited consolidated financial statements.

RAPID THERAPEUTIC SCIENCE LABORATORIES, INC.

(formerly, Holly Brothers Pictures, Inc.)

Consolidated Statements of Cash Flows

(Unaudited)

	Three Months Ended June 30,
	2020		2019
Cash flows from operating activities:
Net loss	$	(566,380)	$	(69,073)
Adjustments to reconcile net loss to net cash provided by (used in) operations
Stock compensation expense		339,584		10,750
Amortization expense		25,000		-
Inventory		(22,746)		-
Accounts payable		18,849		5,356
Accrued interest payable		22,601		46,099
Other, net		(32,000)		-
Net cash flows used in operating activities		(215,092)		(6,868)

Cash flows from financing activities:
Issuance of notes payable to related parties		52,000		8,000
Private sales of common stock		240,000		-
Net cash flows provided by financing activities		292,000		8,000

Net increase (decrease) in cash and cash equivalents		76,908		1,132
Cash and cash equivalents at beginning of period		136,215		1,334

Cash and cash equivalents at end of period	$	213,123	$	2,466

Supplemental cash flow data:
Cash paid for interest	$	-	$	-
Cash paid for income taxes		-		-

Supplemental Non-cash financing activities:
Debt discount on convertible notes payable	$	(44,952)	$	-
Derivative liabilities		44,952		-

See accompanying notes to unaudited consolidated financial statements.

RAPID THERAPEUTIC SCIENCE LABORATORIES, INC.

(formerly, Holly Brothers Pictures, Inc.)

Notes to Consolidated Financial Statements

(Unaudited)

(1)Condensed Interim Financial Statements

The Company - Rapid Therapeutic Science Laboratories, Inc. (“we”, “our” or the “Company”) was incorporated in the State of Nevada on February 22, 2013, originally under the name of PowerMedChairs. On June 2, 2017, the Company changed its name to Holly Brothers Pictures, Inc. On February 1, 2018, the Company acquired 100% of the equity interests in Power Blockchain, LLC (“Power Blockchain”) through an exchange agreement in a transaction that resulted in the transition to a planned new business of mining crypto-currency. Effective November 15, 2019, the Company exited from that business and adopted a new business strategy focused on developing potential commercial opportunities which will involve the rapid application of therapeutics using inhaler technology that the Company has sublicensed from a third party as a result of the execution of a sublicense agreement with the sublicensor on that date (see Note 4). In conjunction with the adoption of the new business strategy, the Company changed its name to Rapid Therapeutic Science Laboratories, Inc., effective January 13, 2020. At that time, the Company also commenced online sales of its inhaler products.

Interim Financial Information - The accompanying consolidated financial statements have been prepared by the Company, without audit, in accordance with accounting principles generally accepted in the Unites States of America for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, these consolidated financial statements contain all adjustments, consisting only of normal recurring adjustments, necessary to fairly state the financial position of the Company as of June 30, 2020, the results of its operations for the three month periods ended June 30, 2020 and 2019, the changes in its stockholder’s deficit for the three month periods ended June 30, 2020 and 2019, and cash flows for the three month periods ended June 30, 2020 and 2019. These financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended March 31, 2020, as filed with the SEC on June 29, 2020.

Impact of COVID-19 Pandemic on Consolidated Financial Statements. The outbreak of the 2019 novel coronavirus disease (“COVID-19”), which was declared a global pandemic by the World Health Organization on March 11, 2020, and the related responses by public health and governmental authorities to contain and combat its outbreak and spread has severely impacted the U.S. and world economies. Decreased demand for our products caused by COVID-19 could have a material adverse effect on our results of operations. Separately, economic recessions, including those brought on by the COVID-19 outbreak may have a negative effect on the demand for our products and our operating results. The range of possible impacts on the Company’s business from the coronavirus pandemic could include: (i) changing demand for the Company’s products; (ii) rising bottlenecks in the Company’s supply chain; and (iii) increasing contraction in the capital markets. At this time, the Company believes that it is premature to determine the potential impact on the Company’s business prospects from these or any other factors that may be related to the coronavirus pandemic.

(2)Summary of Significant Accounting Policies

Basis of Accounting - The basis is United States generally accepted accounting principles. The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Power Blockchain, which is presently inactive.

Principles of Consolidation - The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All intercompany accounts and transactions have been eliminated in consolidation.

Cash and Cash Equivalents - The Company considers all short-term investments with a maturity of three months or less at the date of purchase to be cash equivalents.

Earnings per Share - The basic earnings (loss) per share is calculated by dividing the Company’s net income (loss) available to common shareholders by the weighted average number of common shares issued and outstanding during the year. The diluted earnings (loss) per share is calculated by dividing the Company’s net income (loss) available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted as of the first year for any potentially dilutive debt or equity. The Company has not issued any options or warrants or similar securities that are presently exercisable.

Revenue recognition - We account for revenue from contracts with customers in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Update ("ASU") No. 2014-09, "Revenue from Contracts with Customers (Topic 606)." The unit of account in Topic 606 is a performance obligation, which is a promise in a contract to transfer to a customer either a distinct good or service (or bundle of goods or services) or a series of distinct goods or services provided at a point in time or over a period of time. Topic 606 requires that a contract’s transaction price, which is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer, is to be allocated to each performance obligation in the contract based on relative standalone selling prices and recognized as revenue when (point in time) or as (over time) the performance obligation is satisfied.

Inventory - Inventory as of June 30, 2020, consists of inhalers and related products and supplies delivered to a location near the Company’s offices, and held for sale to wholesale or retail customers. Inventory is stated at the lower of weighted average cost or market.

Intangible Assets - The Company amortizes the costs of any renewable license or sub-license agreements over the contractual terms of such renewable agreements. For any license or sub-license agreements which do not require any renewal payments to be made, the Company performs periodic assessments in order to determine whether there has been any impairment in the carrying value of such intangible assets (see Note 4).

Income Taxes - The provision for income taxes is the total of the current taxes payable and the net of the change in the deferred income taxes. Provision is made for the deferred income taxes where differences exist between the period in which transactions affect current taxable income and the period in which they enter into the determination of net income in the financial statements. A valuation allowance is provided for the amount of deferred assets that, based on available evidence, are not expected to be realized.

Use of Estimates - The preparation of consolidated 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 and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period.

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from estimates.

Fair Value of Financial Instruments - Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as further noted below.

Level 1:The preferred inputs to valuation efforts are “quoted prices in active markets for identical assets or liabilities,” with the caveat that the reporting entity must have access to that market. Information at this level is based on direct observations of transactions involving the same assets and liabilities, not assumptions, and thus offers superior reliability. However, relatively few items, especially physical assets, actually trade in active markets.

Level 2:FASB acknowledged that active markets for identical assets and liabilities are relatively uncommon and, even when they do exist, they may be too thin to provide reliable information. To

deal with this shortage of direct data, the board provided a second level of inputs that can be applied in three situations.

Level 3:If inputs from levels 1 and 2 are not available, FASB acknowledges that fair value measures of many assets and liabilities are less precise. The board describes Level 3 inputs as “unobservable,” and limits their use by saying they “shall be used to measure fair value to the extent that observable inputs are not available.” This category allows “for situations in which there is little, if any, market activity for the asset or liability at the measurement date”. Earlier in the standard, FASB explains that “observable inputs” are gathered from sources other than the reporting company and that they are expected to reflect assumptions made by market participants.

Recently Issued Accounting Pronouncements - In the three months ended June 30, 2020, the Financial Accounting Standards Board issued several new Accounting Standards Updates which the Company believes will have no material impact to the Company.

Subsequent Events - Management has evaluated any subsequent events occurring in the period from June 30, 2020 through the date the financial statements were issued, to determine if disclosure in this report is warranted (see Note 9).

(3)Going Concern

The Company's consolidated financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company has generated minimal revenues and has suffered recurring losses totaling $4,167,799 since inception. These factors, among others, indicate that there is substantial doubt about the Company’s ability to continue as a going concern within one year from the issuance date of this filing.

In order to obtain the necessary capital to sustain operations, Management’s plans include, among other things, the possibility of pursuing new equity sales and/or making additional debt borrowings. There can be no assurances, however, that the Company will be successful in obtaining such additional financing, or that such financing will be available on favorable terms, if at all. The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might result from the outcome of this uncertainty.

(4)Intangible Assets

Effective November 15, 2019, the Company entered into a sublicense agreement with Texas MDI, Inc. (“TMDI”), a Texas corporation, (the "Agreement") granting the Company access to certain technology regarding the RxoidTM metered dose inhaler that TMDI has licensed from a third party. In conjunction with execution of the Agreement, the Company simultaneously issued a total of 140,000,000 shares of its Common Stock to TMDI, in consideration of the sublicense rights granted to the Company in this transaction. Such rights were transferred as a result of extensive third party negotiations between the Company and TMDI and have been recorded as the acquisition of an intangible asset in the amount of $140,000, based on the par value of the shares issued.

During the term of the Agreement, the Company is required to reimburse TMDI to the extent that TMDI is required to make any payments to the licensor, pursuant to its license agreement with a third party. Accordingly, the Company has an obligation to reimburse TMDI in the amount of $200,000 as a license fee covering the first two years of the Agreement. The Company has partially satisfied this obligation by making an equipment purchase on behalf of the licensor in the amount of $135,000, and has agreed to pay the remaining license fee of $65,000 in cash within a 24 month period (for which, the Company has recorded a liability of $44,925 for the unpaid portion of this amount in accounts payable as of June 30, 2020). The Company has recorded the entire $200,000 license fee as an intangible asset and is amortizing such expense on a straight-line basis over a 24 month period (of which, $25,000 was amortized in the three month period ended June 30, 2020).

(5)Notes Payable

As of June 30, 2020 and March 31, 2020, the Company had the following note payable obligations:

	June 30,		March 31,
	2020		2020
Convertible promissory notes issued to two accredited investors, maturing in 1 to 5 years, accruing interest at 5% per annum, convertible into common stock at $0.05 per share.	$	300,000	$	300,000

Convertible promissory notes issued to former owners in acquisition of Power Blockchain, accruing interest at 5% per annum, principal repayments originally due in four equal installments on 2nd, 3rd, 4th and 5th anniversaries, convertible into common stock at $0.13 per share, with final maturity on February 1, 2023.		165,240		165,240

Other short term notes issued to various affiliates of the former owners of Power Blockchain for acquisition of Treasury Stock, computers and equipment, and working capital financing, at stated interest rates of 10%. Amended on November 15, 2019, to mature in one year and to be convertible into common stock at $0.05 per share.		756,535		756,535

Convertible note issued to an accredited investor on June 30, 2020, net of unamortized debt discount of $44,952 (see further discussion below)		7,048		-

Total notes payable	$	1,228,823	$	1,221,775

Future maturities of notes payable as of June 30, 2020 are as follows:

Year ending June 30, 2021	$	913,583
Year ending June 30, 2022		-
Year ending June 30, 2023		165,240
Year ending June 30, 2024		150,000
Year ending June 30, 2025		-
	$	1,228,823

On June 30, 2020, the Company entered into a Securities Purchase Agreement with an accredited investor (the “Buyer”) with respect to a Convertible Promissory Note (the “Note”) issued by the Company to the Buyer in the amount of $55,000. The Note has a maturity date of one year after the date of issuance and bears interest at a rate of 12% per annum, which is not due until maturity. At the option of the Buyer, the Note may be converted into shares of the Company’s common stock, beginning one hundred eighty (180) days following the date of issuance. Under this option, the conversion price shall be subject to a discount of 42%, based on the average of the three (3) lowest closing bid prices for the Common Stock during the prior fifteen (15) trading day period. The Buyer will be limited to convert no more than 4.99% of the issued and outstanding Common Stock at time of conversion at any one time. The Company determined that the conversion feature of the Note required the recognition of a derivative liability upon issuance. As of June 30, 2020, the Company calculated the fair value of the derivative liability, using the Black Scholes model, to be $44,952. Accordingly the Company has recognized a derivative liability in that amount offset by a debt discount. The Company will amortize the debt discount as interest expense over the one year term of the Note.

Effective November 15, 2019, the following transactions took place in the Company’s notes payable:

·The Company entered into new promissory notes with two accredited investors under which the Company borrowed a total of $300,000, with such notes maturing in five years, accruing interest at 5% per annum, and being convertible into common stock at the option of the holders, at a conversion price of $0.05 per share.

·The two holders of outstanding convertible notes payable elected to exercise their existing rights to convert a portion of their notes into shares of common stock, at the stated conversion ratio of $0.13 per share. The two holders converted a total principal amount of $2,034,760 in notes into a total of 15,652,000 shares of common stock leaving the remaining total principal balance of $165,240 unconverted.

·The Company entered into an amendment with the holders of existing non-convertible notes in the total principal amount of $732,835 (out of a total of $756,535) whereby such notes will remain outstanding and continue to accrue interest with deferral of the maturity dates being extended for one year or until the Company has raised an additional $500,000 of new equity securities, at which time, the principal and accrued interest shall be converted into common stock at a conversion price of $0.05 per share.

The Company performed an analysis of both the newly issued convertible notes and the newly amended existing notes, which were formerly non-convertible, to determine whether there was a beneficial conversion feature and noted none.

(6)Stockholders’ Equity

Effective January 13, 2020, the Company filed a Certificate of Amendment to its Amended and Restated Articles of Incorporation (the “Certificate of Amendment”) with the Secretary of State of the State of Nevada to increase the total authorized shares of common stock of the Company from 200 million shares to 750 million shares and to authorize 100 million shares of “blank check” preferred stock of the Company.

During the quarter ended June 30, 2020, the Company entered into private stock subscription agreements with six separate accredited investors whereby the Company sold a total of 960,000 shares of restricted common stock to these six investors at an offering price of $0.25 per share, resulting in gross proceeds to the Company of $240,000.

Additionally, the Company awarded 1,358,334 shares of restricted common stock to a total of 11 consultants during the quarter ended June 30, 2020 as compensation for services. Based on the timing of these awards in relation to the private offering of common stock noted above, the Company valued the shares at a price of $0.25 per share, for total non-cash compensation expense of $339,584.

In March 2018, the Board approved the establishment of a new 2018 Stock Option Plan with an authorization for the issuance of up to 1,000,000 shares of common stock. The Plan is designed to provide for future discretionary grants of stock options, stock awards and stock unit awards to key employees and non-employee directors. The Company has made no issuances under this Plan.

(7)Related Party Transactions

Office services have been provided without charge by a director. Such costs are immaterial to the consolidated financial statements and, accordingly, have not been reflected therein. The officers and directors of the Company are involved in other business activities and may, in the future, become involved in other business opportunities. If a specific business opportunity becomes available, such persons may face a conflict in selecting between the Company and their other business interests. The Company has not formulated a policy for the resolution of such conflicts.

(8)Commitments and Contingencies

From time to time in the ordinary course of our business, the Company may be involved in legal proceedings, the outcomes of which may not be determinable. The results of litigation are inherently unpredictable. Any claims against us, whether meritorious or not, could be time consuming, result in costly litigation, require significant amounts of management time and result in diversion of significant resources. We are not able to estimate an aggregate amount or range of reasonably possible losses for those legal matters for which losses are not probable and estimable, primarily for the following reasons: (i) many of the relevant legal proceedings are in preliminary stages, and until such proceedings develop further, there is often uncertainty regarding the relevant facts and circumstances at issue and potential liability; and (ii) many of these proceedings involve matters of which the outcomes are inherently difficult to predict. We currently have no insurance policies covering such potential losses.

We are not at this time involved in any legal proceedings.

(9)Subsequent Events

Since December 31, 2019 and through the date of this report, the entire global economy has been substantially impacted by the coronavirus pandemic which began in China and has spread to the United States and most other parts of the world. As disclosed in Note 1, the Company has adopted a new business strategy focused on developing potential commercial opportunities which will involve the rapid application of therapeutics using proprietary metered dose inhaler technology that the Company has recently sublicensed from a third party. The range of possible impacts on the Company’s business from the coronavirus pandemic could include: (i) changing demand for the Company’s products; (ii) rising bottlenecks in the Company’s supply chain; and (iii) increasing contraction in the capital markets. At this time, the Company believes that it is premature to determine the potential impact on the Company’s business prospects from these or any other factors that may be related to the coronavirus pandemic.

In August 2020, the Company entered into private stock subscription agreements with thirty-three separate accredited investors whereby the Company sold a total of 2,404,000 shares of restricted common stock to these investors at an offering price of $0.25 per share, resulting in gross proceeds to the Company of $601,000.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this “Report”) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We make forward-looking statements under the “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in other sections of this Report. In some cases, you can identify forward-looking statements by the following words: “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. Forward-looking statements are not a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available at the time the statements are made and involve known and unknown risks, uncertainties and other factors that may cause our results, levels of activity, performance or achievements to be materially different from the information expressed or implied by the forward-looking statements in this Report.

You should not rely upon forward-looking statements as predictions of future events. We are under no duty to update any of these forward-looking statements after the date of this Report to conform our prior statements to actual results or revised expectations, and we do not intend to do so, except as otherwise provided by law.

You should read the matters described in “Risk Factors” and the other cautionary statements made in this Report, as being applicable to all related forward-looking statements wherever they appear in this Report. We cannot assure you that the forward-looking statements in this Report will prove to be accurate and therefore prospective investors are encouraged not to place undue reliance on forward-looking statements. Other than as required by law, we undertake no obligation to update or revise these forward-looking statements, even though our situation may change in the future.

This information should be read in conjunction with the interim unaudited financial statements and the notes thereto included in this Quarterly Report on Form 10-Q, and the audited financial statements and notes thereto and “Part II. Other Information - Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations”, contained in our Annual Report on Form 10-K for the year ended March 31, 2020, filed with the Securities and Exchange Commission on June 29, 2020 (the “Annual Report”).

Certain capitalized terms used below and otherwise defined below, have the meanings given to such terms in the footnotes to our unaudited consolidated financial statements included above under “Part I - Financial Information” - “Item 1. Financial Statements”.

In this Report, we may rely on and refer to information regarding the industries in which we operate in general from market research reports, analyst reports and other publicly available information. Although we believe that this information is reliable, we cannot guarantee the accuracy and completeness of this information, and we have not independently verified any of it.

Unless the context requires otherwise, references to the “Company,” “we,” “us,” “our,” “RTSL”, refer specifically to Rapid Therapeutic Science Laboratories, Inc. and its consolidated subsidiary.

In addition, unless the context otherwise requires and for the purposes of this Report only:

·“Exchange Act” refers to the Securities Exchange Act of 1934, as amended;

·“SEC” or the “Commission” refers to the United States Securities and Exchange Commission; and

·“Securities Act” refers to the Securities Act of 1933, as amended.

Where You Can Find Other Information

We file annual, quarterly, and current reports, proxy statements and other information with the SEC. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC like us at http://www.sec.gov. Copies of documents filed by us with the SEC are also available from us without charge, upon oral or written request to our Secretary, who can be contacted at the address and telephone number set forth on the cover page of this Report.

Overview

Effective November 15, 2019, the Company and TMDI entered into the Agreement granting the Company access to certain technology regarding the RxoidTM MDI inhaler that TMDI has licensed from a third party (see Note 4 to the financial statements included above). In conjunction with execution of the Agreement, the Company issued a total of 140,000,000 shares of Common Stock to TMDI, resulting in a change in control of the Company. At the same time, the Company named Donal R. Schmidt, Jr., TMDI’s founder and president, as its Chairman and Chief Executive Officer. The Company commenced its initial business operations under the new business strategy in early 2020. In order to more closely represent and reflect the new business strategy, the Company changed its name to Rapid Therapeutic Science Laboratories, Inc., effective January 13, 2020.

During the term of the Agreement, the Company is required to reimburse TMDI to the extent that TMDI is required to make any payments to EM3 Methodologies, LLC (“EM3”)(the licensor of the technology), pursuant to the License Agreement between EM3 and TMDI, as a result of the Agreement. The Company’s obligation to make such reimbursements to TMDI is conditioned upon TMDI providing the Company with an advance notice requesting such payments, along with an accounting showing the calculations for such payments (see also Note 4 to the financial statements included above).

With execution of the Agreement, the Company adopted a new business strategy focused on developing potential commercial opportunities in the greater aerosol manufacturing space not limited to cannabinoids. This business strategy will involve the rapid application of therapeutics using the RxoidTM MDI technology that is being sublicensed from TMDI. The market for such products includes, but is not limited to, prospective healthcare providers, pharmacies and other parties such as major retailers and wholesale medical distributors. Finally, the Company will utilize a robust direct marketing campaign on the internet, where legal. Although the sub-license with EM3 is exclusive to manufacturing in the States of Texas, California, Florida and Nevada, RxoidTM or any other aerosol product manufactured by the Company related to the licensed technology may be marketed and produced world-wide on a non-exclusive basis, where legal. Simultaneously, the Company exited from its previous operations in the bitcoin mining business, which had been suspended since the middle of 2018.

Plan of Operations

Since execution of the Agreement with TMDI in November 2019, our plan of operations has been primarily focused on using the proceeds of the convertible notes received in conjunction with the TMDI transaction in order to fund the preliminary activities of marketing and production planning for our licensed aerosol inhaler product line ultimately leading to the initial sales of our new products, beginning in early 2020. In that regard, we have supplemented the proceeds received from the convertible notes issued in November 2019 with the private sales of restricted shares of our common stock to various accredited investors, as well as a relatively small amount of new convertible note borrowings, to further fund our operations since January 2020.

Novel Coronavirus (COVID-19)

In December 2019, a novel strain of coronavirus, which causes the infectious disease known as COVID-19, was reported in Wuhan, China. The World Health Organization declared COVID-19 a “Public Health Emergency of International Concern” on January 30, 2020 and a global pandemic on March 11, 2020. In March and April, many U.S. states and local jurisdictions began issuing ‘stay-at-home’ orders. As disclosed above, the Company has adopted a new business strategy focused on developing potential commercial opportunities which will involve the rapid application of therapeutics using proprietary metered dose inhaler technology that the Company has recently sublicensed from a third party. The range of possible impacts on the Company’s business from the coronavirus

pandemic could include: (i) changing demand for the Company’s products; (ii) rising bottlenecks in the Company’s supply chain; and (iii) increasing contraction in the capital markets. At this time, the Company believes that it is premature to determine the potential impact on the Company’s business prospects from these or any other factors that may be related to the coronavirus pandemic; however, it is possible that Covid-19 and the worldwide response thereto, may have a material negative effect on our operations, cash flows and results of operations.

Currently we believe that we have sufficient cash on hand, and availability to raise additional funding, or borrow additional funding, as needed, to support our operations for the foreseeable future; however, we will continue to evaluate our business operations based on new information as it becomes available and will make changes that we consider necessary in light of any new developments regarding the pandemic.

The future impact of COVID-19 on our business and operations is currently unknown. The pandemic is developing rapidly and the full extent to which COVID-19 will ultimately impact us depends on future developments, including the duration and spread of the virus, as well as potential seasonality of new outbreaks

Results of Operations

The following discussion reflects the Company’s revenues and expenses for the three month periods ended June 30, 2020 and 2019, as reported in our consolidated financial statements included in Item 1.

Three months ended June 30, 2020 versus three months ended June 30, 2019

Revenues - The Company commenced sales of its inhaler products to customers in January 2020. The Company has two different sales channels as follows:

•Wholesale - designed to capture fairly large, but sporadic, orders received from wholesale customers, often for substantial quantities with relatively high profit margins.

•Retail - designed to capture a high volume of small orders received from retail customers through an online portal, with significantly lower profit margins.

The revenues from such sales in the three months ended June 30, 2020, consisting mostly of two large wholesale orders, were $129,287 compared to zero for the three months ended June 30, 2019. Revenues from sales of the Company’s inhaler products, under both sales channels, are expected to gradually increase in the future.

Cost of Goods Sold - Cost of goods sold for the three months ended June 30, 2020 were $18,556 compared to zero for the three months ended June 30, 2019. The cost of goods sold in the 2020 period reflected the cost of procuring inhalers and related products and supplies for resale and resulted in a gross profit of approximately 85%, reflecting a relatively large portion of sales to higher profit wholesale customers.

General and Administrative Expense - General and administrative expenses for the three months ended June 30, 2020 were $629,510 compared to $22,974 for the three months ended June 30, 2029. This increase was due to the higher level of overhead costs following the Company’s recent adoption of a new business strategy focused on developing potential commercial opportunities which will involve the rapid application of therapeutics using the RxoidTM MDI technology that is being sublicensed from TMDI. Included in general and administrative expenses were non-cash stock compensation expenses for restricted stock grants to various consultants in the amounts of $339,584 and $10,750, respectively.

Amortization Expense - Amortization expense for the three months ended June 30, 2020 was $25,000 compared to zero for the three months ended June 30, 2019. This increase was due to the Company’s quarterly amortization of its obligation to reimburse TMDI in the amount of $200,000 for a license fee owed by TMDI to a third party licensor covering the first two years of the sublicense agreement.

Interest Expense - Interest expense for the three months ended June 30, 2020 was $22,601 versus $46,099 for the three months ended June 30, 2019. This decrease was due to lower level of outstanding borrowings following the conversion of certain convertible notes payable into common stock in November 2019.

Liquidity and Capital Resources

Operating activities. Net cash used in operating activities for the three months ended June 30, 2020 was $215,092 compared to $6,868 for the three months ended June 30, 2019. This net increase was largely due to the higher level of overhead costs following the Company’s recent adoption of a new business strategy in early 2020, as further noted above.

Financing activities. Net cash provided by financing activities was $292,000 for the three months ended June 30, 2020 compared to $8,000 for the three months ended June 30, 2019. This increase was largely due to the private sales of common stock in the amount of $240,000 and the issuance of convertible notes payable in the amount of $52,000 (net of transaction cost of $3,000).

Prior to the three months ended June 30, 2019, the Company entered into an equity subscription agreement with a third party investor in February 2020, whereby the Company agreed to sell the third party 640,000 shares of restricted common stock and a large number of common stock purchase warrants, in exchange for a cash payment to the Company of $90,000, and the performance of certain other obligations. The terms and conditions of this memorandum agreement were subject to the negotiation of a definitive agreement between the parties. To date, the parties have not reached such definitive agreement. Accordingly, the Company has recorded the $90,000 payment received from the third party as a current liability with the expectation that it will eventually either be converted into some form of equity, converted to a term loan, or refunded to the third party.

We have not generated a net profit from sales of our inhaler products beginning in early 2020. Additionally, we had a working capital deficit of $1.3 million as of June 30, 2020. Accordingly, we will need to raise additional capital to fund our future operations. Until such time that we can generate substantial net profit from operations, if ever, we expect to finance our operating activities through a combination of equity offerings and debt financings and we may seek to raise additional capital through strategic collaborations.

However, we may be unable to raise additional funds or enter into such arrangements when needed on favorable terms, or at all, which would have a negative impact on our financial condition and could force us to delay, limit, reduce or terminate our operations. Failure to receive additional funding could cause us to cease operations, in part or in full. Furthermore, even if we believe we have sufficient funds for our current or future operating plans, we may seek additional capital due to favorable market conditions or strategic considerations, which may cause dilution to our existing stockholders.

Going Concern

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has generated limited revenues and has suffered recurring losses totaling $4,167,799 since inception. These factors, among others, indicate that the Company may be unable to continue as a going concern for a reasonable period of time. The consolidated financial statements do not contain any adjustments to reflect the possible future effects on the classification of assets or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations are based on consolidated financial statements which have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. We believe that certain accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements. See our Annual Report on Form 10-K for the year ended March 31, 2020, as filed with the SEC on June 29, 2020, for a further description of our critical accounting policies and estimates.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Information for this Item is not required as the Registrant is a “smaller reporting company” as defined in Rule 12b-2 of the Exchange Act.

ITEM 4. CONTROLS AND PROCEDURES

(a) Disclosure controls and procedures

We have established and maintain a system of disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in our reports filed with the Securities and Exchange Commission pursuant to the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Commission and that such information is accumulated and communicated to our management, including our Chief Executive Officer (CEO) and Chief Financial Officer (CFO), to allow timely decisions regarding required disclosures.

As of June 30, 2020, our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures as of the end of the period covered by this Quarterly Report were not effective because of a lack of segregation of duties, as described in Item 9A. of our Annual Report on Form 10-K for the year ended March 31, 2020, which we view as an integral part of our disclosure controls and procedures.

The lack of segregation of duties referenced above represents a material weakness in our internal controls over financial reporting. Notwithstanding this weakness, management believes that the consolidated financial statements included in this report fairly present, in all material respects, our consolidated financial position and results of operations as of and for the quarter ended June 30, 2020.

(b) Changes in internal controls over financial reporting

There was no change in our internal controls over financial reporting that occurred during the quarter ended June 30, 2020, that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Although we may, from time to time, be involved in litigation and claims arising out of our operations in the normal course of business, we are not currently a party to any material legal proceeding. In addition, we are not aware of any material legal or governmental proceedings against us, or contemplated to be brought against us.

ITEM 1A. RISK FACTORS

There have been no material changes from the risk factors previously disclosed in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended March 31, 2020, filed with the Commission on June 29, 2020 (the “Form 10-K”), under the heading “Risk Factors”, and investors should review the risks provided in the Form 10-K, which are incorporated by reference herein, prior to making an investment in the Company. The business, financial condition and operating results of the Company can be affected by a number of factors, whether currently known or unknown, including but not limited to those described in the Form 10-K for the year ended March 31, 2020, under “Risk Factors”, any one or more of which could, directly or indirectly, cause the Company’s actual financial condition and operating results to vary materially from past, or from anticipated future, financial condition and operating results. Any of these factors, in whole or in part, could materially and adversely affect the Company’s business, financial condition, operating results and stock price.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Effective June 30, 2020, the Company and Power Up Lending Group, Ltd. (the “Buyer”) entered into a Securities Purchase Agreement (the “Agreement”) with respect to a Convertible Promissory Note (the “Note”) issued by the Company to the Buyer in the amount of $55,000. The Note has a maturity date of one year after the date of issuance and bears interest at a rate of 12% per annum, which is not due until maturity. At the option of the Buyer, the Note may be converted into shares of the Company’s common stock beginning one hundred eighty (180) days following the date of issuance. Under this option, the conversion price is subject to a discount of 42%, based on the average of the three (3) lowest closing bid prices for the common stock during the prior fifteen (15) trading day period. The Buyer will be limited to convert no more than 4.99% of the issued and outstanding common stock at time of conversion at any one time.

We claim an exemption from registration pursuant to Section 4(a)(2) and/or Rule 506 of Regulation D of the Securities Act for such issuances, since the foregoing issuances did not involve a public offering, the recipients were (a) an “accredited investor”; and/or (b) had access to similar documentation and information as would be required in a Registration Statement under the Securities Act. The securities are subject to transfer restrictions, and the certificates evidencing the securities contain an appropriate legend stating that such securities have not been registered under the Securities Act and may not be offered or sold absent registration or pursuant to an exemption therefrom. The securities were not registered under the Securities Act and such securities may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act and any applicable state securities laws.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Exhibit No.	Description
10.1	Securities Purchase Agreement between Rapid Therapeutic Science Laboratories, Inc. and Power Up Lending Group, Ltd., dated as of June 30, 2020 (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 6, 2020, and incorporated herein by reference)(File No. 000-55018)
10.2	Form of Subscription Agreement*
31.1	Certification of Chief Executive Officer pursuant to 15 U.S.C. Section 7241, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
31.2	Certification of Chief Financial Officer pursuant to 15 U.S.C. Section 7241, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**

101.INS	XBRL Instance Document*
101.SCH	XBRL Taxonomy Extension Schema Document*
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document*
101.LAB	XBRL Taxonomy Extension Label Linkbase Document*
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document*
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document*

* Filed herewith.

** Furnished herewith.

SIGNATURE

Pursuant to the requirements 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.

	RAPID THERAPEUTIC SCIENCE LABORATORIES, INC.

	/s/ Donal R. Schmidt, Jr.
	Donal R. Schmidt, Jr.
	Chief Executive Officer
	(Principal Executive Officer)


	/s/ D. Hughes Watler, Jr.
	D. Hughes Watler, Jr.
	Chief Financial Officer
	(Principal Financial/Accounting Officer)
August 13, 2020

THE SECURITIES TO BE ISSUED PURSUANT TO THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (“SECURITIES ACT”), OR ANY OTHER APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE OFFERED OR SOLD UNLESS REGISTERED THEREUNDER OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.

SUBSCRIPTION AGREEMENT

Name of Subscriber: ____________________________

Rapid Therapeutic Science Laboratories, Inc.

5580 Peterson Lane, Suite 200

Dallas, Texas 75240

Ladies and Gentlemen:

1. Subscription. I (sometimes referred to herein as the “Investor”) hereby subscribe for and agree to purchase the Securities (as defined below) set forth on the signature page hereto of Rapid Therapeutic Science Laboratories, Inc., a Nevada corporation (the “Company”), on the terms and conditions described herein and in Exhibit A hereto (collectively, the “Offering Documents”). Terms not defined herein are as defined in the Offering Documents. There is no minimum offering. The maximum offering is $4,000,000.

2. Description of Securities; Risk Factors.

a. Description of Securities. The Company is offering (the “Offering”) to the Investor shares of the Company’s common stock (“Common Stock” or “Securities”) at a purchase price of $0.25 per share.

b. Warrants: For additional consideration the Investor is entitled to purchase an addition 1 times the number of shares purchased under 2a. above at a price of $1.00. Such purchase must be made within 180 days of the Company’s 3-day average VWAP above $1.00. Otherwise such warrants are void. The warrants are not cashless and are subject to Rule 144 provisions.

c. Risks Related to the Investment in the Securities. Investing in the Securities involves a high degree of risk. Before investing, Investors should carefully consider the following risks, together with the other information contained in Offering Documents.

i. No Minimum Subscription Agreement; No Escrow Arrangement. Under the terms of this Subscription Agreement, there is no minimum subscription amount to be raised by the Company in this private placement and, upon the Company’s acceptance of the Subscriber’s offer to subscribe for the Securities, the subscription proceeds shall immediately become a part of the working capital of the Company and shall be allocated in the accordance with the Company management’s discretion. Further, the Subscription Agreement does not contemplate any escrow arrangement whereby the subscription proceeds are kept until and unless a certain event triggering the termination of the escrow fund occurs. Absence of such arrangements could result in less protection for the potential investors in the Company.

ii. Discretion in Application of Net Proceeds. The Company’s management has the sole discretion to determine the application of the net proceeds of this offering. A substantial portion will be applied to working capital of the Company. Accordingly, the Company’s management will have broad discretion in the application of the net proceeds.

iii. No Voting Power by Prospective Investors. The Company’s directors and officers own or control an aggregate of 140,000,000 shares of Common Stock, which represents a super-majority of the shares outstanding and are, and in the foreseeable future will continue to be, in a position to elect a majority of its Board of Directors. The Board of Directors establishes corporate policies and has the sole authority to nominate and elect the company’s officers to carry out those policies.

Prospective investors therefore will have no participation in the Company’s affairs. As a result of the current capital structure of the Company, a prospective investor shall not obtain voting control over major corporate decisions and actions.

iv. Absence of Cash Dividends and No Cash Dividends Anticipated. The future payment by the Company of cash dividends on its common stock, if any, rests within the discretion of its Board of Directors and will depend, among other things, upon the Company’s earnings, its capital requirements and its financial condition, as well as other relevant factors. The Company does not anticipate making any cash distributions upon its Common Stock in the foreseeable future.

v. The Company Will Likely Make Future Offerings of Its Securities. The Company reserves the right to make future offers and sales, either public or private, of its securities including shares of preferred stock, Common Stock or securities convertible into its common stock at prices differing from the offering price of the Common Stock offered hereby. There can be no assurance that the Company will be able to successfully complete any such future offerings; however, in the event that any such future sales of securities are affected, the Investor’s pro rata ownership interest in the Company will be reduced to the extent of any such issuances and, to the extent any such sales are effected at consideration which is less than that paid by the Investor, the Investor may experience dilution.

vi. New Business Strategy. The Company recently announced it was adopting a new business strategy focused on developing potential commercial opportunities which will involve the rapid application of therapeutics using the RxoidTM MDI technology that the Company sublicensed from TMDI, an entity affiliated with the Company’s new director and CEO, Donal R. Schmidt, Jr., with prospective healthcare providers, pharmacies and other parties in the states of Texas, California, Florida and Nevada. Simultaneously, the Company announced it would be exiting from its previous operations in the bitcoin mining business, which has been suspended since the middle of 2018. Due to the change in strategy, the Company’s prior SEC filings will not fully describe the Company’s planned operations and future plans.

3. Purchase.

a. I hereby tender to the Company a check or wire transfer (information to be provided to me on my request) made payable to “Rapid Therapeutic Science Laboratories, Inc.” for such number of shares of Common Stock indicated on the signature page hereto, an executed copy of this Subscription Agreement and an executed copy of my Investor Questionnaire attached as Exhibit A hereto.

b. Investor will wire $____________ USD within 3 business days after receiving this agreement. Upon the earlier of a Closing (defined below) for my subscription or completion of the offering, I will be notified promptly by the Company as to whether my subscription has been accepted by the Company.

c. Wire Instructions:

Wells Fargo Bank

Dallas, Texas

ABA Routing # 121000248

Account # 6411598227

For the Benefit of Rapid Therapeutic Science Laboratories, Inc,

5580 Peterson Ln., Ste. 200

Dallas, TX 75240

Attn.: Donal R. Schmidt, Jr. CEO, 214-236-1363

4. Acceptance or Rejection of Subscription.

a. I understand and agree that the Company reserves the right to reject this subscription for the Securities, in whole or in part, for any reason and at any time prior to the Closing (defined below) of my subscription.

b. In the event of the rejection of this subscription, my subscription payment will be promptly returned to me without interest or deduction and this Subscription Agreement shall have no force or effect. In the event my subscription is accepted, and the offering is completed, the subscription funds shall be released to the Company.

c. This subscription can be rejected at the sole decision of the Company prior to issuance of any stock to the Investor.

5. Closing. The closing (“Closing”) of this offering may occur any time and from time to time before the Termination Date. There is no minimum offering. The Securities subscribed for herein shall not be deemed issued to or owned by me until one copy of this Subscription Agreement has been executed by me and countersigned by the Company and the Closing with respect to such Securities has occurred.

6. Disclosure. Because this offering is limited to accredited investors as defined in Section 2(15) of the Securities Act, and Rule 501 promulgated thereunder, in reliance upon the exemption contained in Section 4(a)(2) of the Securities Act and applicable state securities laws, the Securities are being sold without registration under the Securities Act. I acknowledge receipt of the Offering Documents and represent that I have carefully reviewed and understand the Offering Documents, including its exhibit. I have received all information and materials regarding the Company that I have requested. I fully understand that the Company has a limited financial and operating history and that the Securities are speculative investments, which involve a high degree of risk of the loss of my entire investment. I fully understand the nature of the risks involved in purchasing the Securities and I am qualified by my knowledge and experience to evaluate investments of this type. I have carefully considered the potential risks relating to the Company and purchase of its Securities and have reviewed each of the risks set forth in the Offering Documents. Both my advisors and I have had the opportunity to ask questions of and receive answers from representatives of the Company or persons acting on its behalf concerning the Company and the terms and conditions of a proposed investment in the Company and my advisors and I have also had the opportunity to obtain additional information necessary to verify the accuracy of information furnished about the Company. Finally, I have carefully reviewed all of the Company’s filings with the Securities and Exchange Commission, understanding that the Company has recently modified its business strategy. Accordingly, I have independently evaluated the risks of purchasing the Securities.

7. Investor Representations and Warranties. I acknowledge, represent, and warrant to, and agree with, the Company as follows:

a. I am aware that my investment involves a high degree of risk as disclosed in the Offering Documents and have read carefully the Offering Documents and the Company’s SEC filings, and I understand that by signing this Subscription Agreement I am agreeing to be bound by all of the terms and conditions of the Offering Documents.

b. I acknowledge and am aware that there is no assurance as to the future performance of the Company.

c. I acknowledge that there may be certain adverse tax consequences to me in connection with my purchase of Securities, and the Company has advised me to seek the advice of experts in such areas prior to making this investment.

d. I am purchasing the Securities for my own account for investment purposes and not with a view to or for sale in connection with the distribution of the Securities, nor with any present intention of selling or otherwise disposing of all or any part of the foregoing securities. I agree that I must bear the entire economic risk of my investment for an indefinite period of time because, among other reasons, the Securities have not been registered under the Securities Act or under the securities laws of any state and, therefore, cannot be resold, pledged, assigned or otherwise disposed of unless they are subsequently registered under the Securities Act and under applicable securities laws of certain states or an exemption from such registration is available. I hereby authorize the Company to place a legend denoting the restrictions on the Securities that are issued to me.

e. I recognize that the Securities, as an investment, involve a high degree of risk including, but not limited to, the risk of economic losses from operations of the Company and the total loss of my investment. I believe that the investment in the Securities is suitable for me based upon my investment objectives and financial needs, and I have adequate means for providing for my current financial needs and contingencies and have no need for liquidity with respect to my investment in the Company.

f. I have been given access to full and complete information regarding the Company and have utilized such access to my satisfaction for the purpose of obtaining information in addition to, or verifying information included in, the Offering Documents, and I have either met with or been given reasonable opportunity to meet with officers of the Company for the purpose of asking questions of, and receiving answers from, such officers concerning the terms and conditions of the offering of the Securities and the business and operations of the Company and to obtain any additional information, to the extent reasonably available.

g. I have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Securities and have obtained, in my judgment, sufficient information from the Company to evaluate the merits and risks of an investment in the Company. I have not utilized any person as my purchaser representative as defined in Regulation D under the Securities Act in connection with evaluating such merits and risks.

h. I have relied solely upon my own investigation in making a decision to invest in the Company.

i. I have received no representation or warranty from the Company or any of its officers, directors, employees or agents in respect of my investment in the Company and I have received no information (written or otherwise) from them relating to the Company or its business other than as set forth in the Offering Documents. I am not participating in the offer as a result of or subsequent to: (i) any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over television or radio or (ii) any seminar or meeting whose attendees have been invited by any general solicitation or general advertising.

j. I have had full opportunity to ask questions and to receive satisfactory answers concerning the offering and other matters pertaining to my investment and all such questions have been answered to my full satisfaction.

k. I have been provided an opportunity to obtain any additional information concerning the offering and the Company and all other information to the extent the Company possesses such information or can acquire it without unreasonable effort or expense.

l. I am an “accredited investor” as defined in Section 2(15) of the Securities Act and in Rule 501 promulgated thereunder and have attached the completed Accredited Investor Questionnaire to indicate my “accredited investor” category. I can bear the entire economic risk of the investment in the Securities for an indefinite period of time and I am knowledgeable about and experienced in investments in the equity securities of non-publicly traded companies, including early stage companies. I am not acting as an underwriter or a conduit for sale to the public or to others of unregistered securities, directly or indirectly, on behalf of the Company or any person with respect to such securities.

m. I understand that (1) the Securities and the underlying securities have not been registered under the Securities Act, or the securities laws of certain states in reliance on specific exemptions from registration, (2) no securities administrator of any state or the federal government has recommended or endorsed this offering or made any finding or determination relating to the fairness of an investment in the Company and (3) the Company is relying on my representations and agreements for the purpose of determining whether this transaction meets the requirements of the exemptions afforded by the Securities Act and certain state securities laws.

n. I understand that since neither the offer nor sale of the Securities has been registered under the Securities Act or the securities laws of any state, the Securities may not be sold, assigned, pledged or otherwise disposed of unless they are so registered or an exemption from such registration is available.

o. I have been urged to seek independent advice from my professional advisors relating to the suitability of an investment in the Company in view of my overall financial needs and with respect to the legal and tax implications of such investment.

p. If the Investor is a corporation, company, trust, employee benefit plan, individual retirement account, Keogh Plan, or other tax-exempt entity, it is authorized and qualified to become an Investor in the Company and the person signing this Subscription Agreement on behalf of such entity has been duly authorized by such entity to do so.

q. The information contained in my Investor Questionnaire, as well as any information which I have furnished to the Company with respect to my financial position and business experience, is correct and complete as of the date of this Subscription Agreement and, if there should be any material change in such information prior to the Closing of the offering, I will furnish such revised or corrected information to the Company. I hereby acknowledge and am aware that except for any rescission rights that may be provided under applicable laws, I am not entitled to cancel, terminate or revoke this subscription and any agreements made in connection herewith shall survive my death or disability.

r. The Investor acknowledges that (i) the Offering Documents contains material, nonpublic information concerning the Company within the meaning of Regulation FD promulgated by the SEC, and (ii) the Investor is obtaining such material, nonpublic information solely for the purpose of considering whether to purchase the Securities pursuant to a private placement that is exempt from registration under the Securities Act. In accordance with Regulation FD and other applicable provisions of the federal securities laws, the Investor agrees to keep such information confidential and not to disclose it to any other person or entity except the Investor’s legal counsel, other advisors and other representatives who have agreed (i) to keep such information confidential, (ii) to use such information only for the purpose set forth above, and (iii) to comply with applicable securities laws with respect to such information. In addition, the Investor further acknowledges that the Investor and such legal counsel, other advisors and other representatives are prohibited from trading in the Company's securities while in possession of material, non-public information and agrees to refrain from purchasing or selling securities of the Company until such material, non-public information has been publicly disseminated by the Company.

8. Indemnification. I hereby agree to indemnify and hold harmless the Company and its officers, directors, stockholders, employees, agents, and counsel against any and all losses, claims, demands, liabilities, and expenses (including reasonable legal or other expenses, including reasonable attorneys’ fees) incurred by each such person in connection with defending or investigating any such claims or liabilities, whether or not resulting in any liability to such person, to which any such indemnified party may become subject under the Securities Act, under any other statute, at common law or otherwise, insofar as such losses, claims, demands, liabilities and expenses (a) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact made by me and contained in this Subscription Agreement or my Investor Questionnaire, or (b) arise out of or are based upon any breach by me of any representation, warranty, or agreement made by me contained herein or therein.

9. Severability. In the event any parts of this Subscription Agreement are found to be void, the remaining provisions of this Subscription Agreement shall nevertheless be binding with the same effect as though the void parts were deleted.

10. Choice of Law and Jurisdiction. This Subscription Agreement shall be governed by the laws of the State of Texas as applied to contracts entered into and to be performed entirely within the State of Texas. Any action arising out of this Subscription Agreement shall be brought exclusively in a court of competent jurisdiction in Dallas, Texas, and the parties hereby irrevocably waive any objections they may have to venue in Dallas, Texas.

11. Counterparts. This Subscription Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. The execution of this Subscription Agreement may be by actual or facsimile signature.

12. Benefit. This Subscription Agreement shall be binding upon and inure to the benefit of the parties hereto.

13. Notices and Addresses. All notices, offers, acceptance and any other acts under this Subscription Agreement (except payment) shall be in writing, and shall be sufficiently given if delivered to the addresses in person, by Federal Express or similar courier delivery, as follows:

Investor:

At the address designated on the signature

page of this Subscription Agreement.

The Company:

Rapid Therapeutic Science Laboratories, Inc.

5580 Peterson Lane, Suite 200

Dallas, Texas 75240

or to such other address as any of them, by notice to the others may designate from time to time. The transmission confirmation receipt from the sender’s facsimile machine shall be conclusive evidence of successful facsimile delivery. Time shall be counted to, or from, as the case may be, the delivery in person or by mailing.

14. Entire Agreement. This Subscription Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior oral and written agreements between the parties hereto with respect to the subject matter hereof. This Subscription Agreement may not be changed, waived, discharged, or terminated orally but, rather, only by a statement in writing signed by the party or parties against which enforcement or the change, waiver, discharge or termination is sought.

15. Section Headings. Section headings herein have been inserted for reference only and shall not be deemed to limit or otherwise affect, in any matter, or be deemed to interpret in whole or in part, any of the terms or provisions of this Subscription Agreement.

16. Survival of Representations, Warranties and Agreements. The representations, warranties and agreements contained herein shall survive the delivery of, and the payment for, the Securities.

17. Acceptance of Subscription. The Company may accept this Subscription Agreement at any time for all or any portion of the Securities subscribed for by executing a copy hereof as provided and notifying me within a reasonable time thereafter.

RESIDENTS OF ALL STATES: THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SAID ACT AND SUCH LAWS. THE SECURITIES ARE SUBJECT TO REGISTRATIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER SAID ACT AND SUCH LAWS PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THI S OFFERING OR THE ACCURACY OR ADEQUACY OF THE OFFERING DOCUMENTS. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

THE AGGREGATE AMOUNT SUBSCRIBED FOR HEREBY IS: ______,000 Shares

(Total dollar amount times 4)

Share Purchase Price: $____________________ total USD (price is $0.25 per share)

Manner in Which Title is to be Held. (check one)

[ ] Individual Ownership	[ ] Community Property
[ ] Joint Tenant with Right of Survivorship (both parties must sign)
[ ] Partnership	[ ] Tenants in common
[ ] Corporation Trust	[ ] IRA or Keogh
[ ] Other (please indicate)

INDIVIDUAL INVESTORS	ENTITY INVESTORS
	Name of entity, if any
______________________________
Signature (Individual)	By: _____________________________
	*Signature
	Its: _____________________________
______________________________	Title:____________________________
Signature (Joint)
(all record holders must sign)

______________________________	______________________________
Name(s) Typed or Printed	Name Typed or Printed

Address to Which Correspondence	Address to Which Correspondence
Should be Directed	Should be Directed

______________________________	______________________________
______________________________	______________________________
City, State and Zip Code	City, State and Zip Code

______________________________	______________________________
Tax Identification or	Tax Identification or
Social Security Number	Social Security Number

* If Securities are being subscribed for by any entity, the Certificate of Signatory on the next page must also be completed The foregoing subscription is accepted, and the Company hereby agrees to be bound by its terms on _____ day of ___________________, 2020.

Rapid Therapeutic Science Laboratories, Inc.

Dated:

By:_______________________________

Name: Donal R. Schmidt, Jr.

Its: Chief Executive Officer

CERTIFICATE OF SIGNATORY

(To be completed if Securities are being subscribed for by an entity)

I, ____________________________, the __________________________________

(name of signatory) (title)

of ________________________________________ (“Entity”), a ________________________

(name of entity) (type of entity)

hereby certify that I am empowered and duly authorized by the Entity to execute the Subscription Agreement and to purchase the Securities, and certify further that the Subscription Agreement has been duly and validly executed on behalf of the Entity and constitutes a legal and binding obligation of the Entity.

IN WITNESS WHEREOF, I have set my hand this ______ day of ____________, 2020.

_______________________________

(Signature)

Exhibit A

ACCREDITED INVESTOR QUESTIONNAIRE

Purpose of this Questionnaire

The Securities of Rapid Therapeutic Science Laboratories, Inc., a Nevada corporation (the “Company”) are being offered under the Securities Act of 1933, as amended (the “1933 Act”), or the securities laws of any state, in reliance on the exemptions contained in Sections 4(2) and 4(6) and Regulation D Rule 506 of the 1933 Act and on similar exemptions under applicable state laws. Under Sections 4(a)(2) and Regulation D Rule 506 and/or certain state laws, the Company may be required to determine that an individual or each individual equity owner of an investing entity meets certain suitability requirements before selling the Securities to such individual or entity. THE COMPANY MAY, AT ITS ELECTION, NOT SELL SECURITIES TO A SUBSCRIBER WHO HAS NOT COMPLETELY FILLED OUT THIS QUESTIONNAIRE. This Questionnaire does not constitute an offer to sell or a solicitation of an offer to buy the Securities or any other security.

Instructions

One (1) copy of this Questionnaire should be completed, signed, dated, and delivered to the Company.

Please Answer All Questions

If the appropriate answer is “None” or “Not Applicable,” so state. Please print or type your answers to all questions. Attach additional sheets if necessary, to complete your answers to any item.

Your answers will be kept strictly confidential at all times; however, the Company may present this Questionnaire to such parties as it deems appropriate, including its counsel, in order to assure itself that the offer and sale of the Securities ts will not result in a violation of the registration provisions of the 1933 Act or a violation of the securities laws of any state.

(1) Please provide the following personal information:

Name: __________________________________

(2) I am an accredited investor (as defined in Rule 501 (a) of Reg. D) because (check each appropriate description):

______ I am a natural person whose individual net worth, or joint net worth with my spouse, exceeds $1,000,000 (excluding the value of my residence).

_____ I am a natural person who had individual income exceeding $200,000 in each of the two most recent years or joint income with my spouse exceeding $300,000 in each of those years and I have a reasonable expectation of reaching the same income level in the current year.

_____ I am a broker-dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934.

_____ I am an organization described in Section 501(c)(3) of the Internal Revenue Code, not formed for the specific purpose of acquiring the Securities, with total assets exceeding $5,000,000.

______ I am a corporation, Massachusetts or similar business trust or partnership, not formed for the specific purpose of acquiring the Securities, with total assets exceeding $5,000,000.

______ I am a trust, not formed for the specific purpose of acquiring the Securities, with total assets exceeding $5,000,000 and whose purchase is directed by a “sophisticated person,” as defined in Rule 506(b)(2)(ii) of Reg. D.

(For the purposes of this questionnaire, a “sophisticated person” means any person who has such knowledge and experience in financial and business matters that he or she is capable of evaluating the merits and risks of the prospective investment.)

_____ I am an employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 and (i) investment decisions for such plan are made by a plan fiduciary, as defined in Section 3(21) of such Act, which is a bank, savings and loan association, insurance company or registered investment advisor or (ii) such plan has total assets exceeding $5,000,000 or (iii) if a self-directed plan, investment decisions are made solely by accredited investors.

______ I am an entity in which all of the equity owners are accredited investors.

(3) Check, if appropriate:

_____ I hereby represent and warrant that I have such knowledge and experience in financial and business matters that I am capable of evaluating the merits and risks of any prospective investment in the Company.

(4) By signing this Questionnaire, I hereby confirm the following statements:

I am aware that the offering of the Securities will involve securities for which no market currently exists, thereby requiring any investment to be maintained for an indefinite period of time, and I have no need to liquidate the investment.

I acknowledge that any delivery to me of any documentation relating to the Securities prior to the determination by the Company of my suitability as an investor shall not constitute an offer of the Securities until such determination of suitability shall be made, and I agree that I shall promptly return all such documentation to the Company upon request.

My answers to the foregoing questions are true and complete to the best of my information and belief, and I will promptly notify the Company of any changes in the information I have provided.

I also understand and agree that, although the Company will use its best efforts to keep the information provided in answers to this Questionnaire strictly confidential, the Company may present this Questionnaire and the information provided in answers to it to such parties as it may deem advisable if called upon to establish the availability under any federal or state securities laws of an exemption from registration of the private placement or if the contents thereof are relevant to any issue in any action, suit, or proceeding to which the Company is a party or by which it or they are or may be bound.

I realize that this Questionnaire does not constitute an offer by the Company to sell the Securities but is merely a request for information.

_________________________________

Printed Name

_________________________________

Signature

Date and Place Executed:

Date:_________________________________ Place:______________________________