zivo_10q.htm

United States

Securities and Exchange Commission

Washington, D.C. 20549

Form 10-Q

(Mark One)

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

For the quarterly period ended June 30, 2021

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

For the transition period from _____to_____

Commission file number: 000-30415

Zivo Bioscience, Inc.

(Exact name of registrant as specified in its charter)

Nevada

87-0699977

(State or other jurisdiction of

incorporation or organization)

(IRS Employer

Identification No.)

2804 Orchard Lake Rd., Suite 202, Keego Harbor, MI 48320

(Address of principal executive offices) (Zip code)

(248) 452 9866

(Registrant’s telephone number, including area code)

Not Applicable

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

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol(s)

Name of Each Exchange on

Which Registered

Common Stock, par value $0.001 per share

ZIVO

The Nasdaq Stock Market LLC

Warrants

ZIVOW

The Nasdaq Stock Market LLC

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

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

Indicate by checkmark 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	☒	Smaller reporting company
☐	Accelerated filer	☐	Emerging growth company
☒	Non-accelerated filer

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12-b2 of the Exchange Act). Yes ☐ No ☒

There were 9,218,657 shares of common stock, $0.001 par value, outstanding at August 13, 2021.

FORM 10-Q

ZIVO BIOSCIENCE, INC.

INDEX

		Page
PART I – FINANCIAL INFORMATION		3
Item 1.	Condensed Consolidated Financial Statements	3
	Condensed Consolidated Balance Sheets as of June 30, 2021 (unaudited) and December 31, 2020	3
	Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2021 and 2020 (unaudited)	4
	Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficiency) for the three and six months ended June 30, 2021 and 2020 (unaudited)	5
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2021 and 2020 (unaudited)	7
	Notes to Unaudited Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	32
Item 4.	Controls and Procedures	32

PART II – OTHER INFORMATION		33
Item 1.	Legal Proceedings	33
Item 1A.	Risk Factors	33
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33
Item 3.	Defaults Upon Senior Securities	34
Item 4.	Mine Safety Disclosures	34
Item 5.	Other information	34
Item 6.	Exhibits	35

Table of Contents

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

ZIVO BIOSCIENCE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEET

	As of June 30, 2021			As of December 31, 2020
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash	$	10,903,264		$	137,862
Prepaid Expenses		158,615			29,953
Total Current Assets		11,061,879			167,815

PROPERTY AND EQUIPMENT, NET		-			-

OTHER ASSETS
Right of Use Asset, net		38,738			49,364
Deposits		3,000			3,000
Total Other Assets		41,738			52,364

TOTAL ASSETS	$	11,103,617		$	220,179

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts Payable	$	918,346		$	1,559,627
Loans Payable, Related Parties		-			9,000
Convertible Debentures Payable		240,000			5,180,342
Deferred Revenue - Participation Agreements		2,031,103			1,936,800
Accrued Interest		96,100			2,464,724
Lease Liability, current portion		26,790			29,172
Note Payable		63,500			-
Accrued Liabilities – Other		266,397			214,250
Total Current Liabilities		3,642,236			11,393,915

LONG-TERM LIABILITIES:
Note -Payable – SBA Paycheck Protection Loan		121,700			121,700
Lease Liability, long term portion		6,709			15,178
Total Long-Term Liabilities		128,409			136,878

TOTAL LIABILITIES		3,770,645			11,530,793
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY (DEFICIT):
Common stock, $.001 par value, 150,000,000 shares authorized; 9,068,657 and 5,162,945 issued and outstanding at June 30, 2021 and December 31, 2020		9,069			5,163
Additional Paid-In Capital		110,452,205			87,747,898
Accumulated deficit		(103,128,302	)		(99,063,675	)
Total Stockholders' Deficit		7,332,972			(11,310,614	)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)	$	11,103,617		$	220,179

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

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ZIVO BIOSCIENCE, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	For the Three Months ended June 30, 2021			For the Three Months ended June 30, 2020			For the Six Months ended June 30, 2021			For the Six Months ended June 30, 2020
REVENUES:
Service Revenue	$	-		$	-			-		$	20,000
Total Revenues		-			-			-			20,000

COSTS AND EXPENSES:
General and Administrative		960,567			374,202			2,236,795			1,067,775
Professional fees and Consulting expense		320,921			219,037			481,515			375,486
Research and Development		467,918			436,695			1,114,670			2,012,795

Total Costs and Expenses		1,749,406			1,029,934			3,832,980			3,456,056

LOSS FROM OPERATIONS		(1,749,406	)		(1,029,934	)		(3,832,980	)		(3,436,056	)

OTHER EXPENSE:
Interest expense		(18,582	)		(24,182	)		(43,043	)		(48,609	)
Interest expense – related parties		(77,660	)		(112,719	)		(188,604	)		(225,148	)
Total Other Expense		(96,242	)		(136,901	)		(231,647	)		(273,757	)

NET LOSS	$	(1,845,648	)	$	(1,166,835	)		(4,064,627	)	$	(3,709,813	)

BASIC AND DILUTED LOSS PER SHARE	$	(0.28	)	$	(0.23	)	$	(0.70	)	$	(0.73	)
WEIGHTED AVERAGE BASIC AND DILUTED SHARES OUTSTANDING		6,490,505			5,047,773			5,846,011			5,075,912

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

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ZIVO BIOSCIENCE, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIENCY

FOR THE THREE MONTHS ENDED JUNE 30, 2020 AND JUNE 30, 2021

					Additional
	Common Stock				Paid in		Accumulated
	Shares		Amount		Capital		Deficit			Total

Balance, March 31, 2020		5,048,646	$	5,049	$	83,347,862	$	(92,500,924	)	$	(9,148,013	)

Issuance of warrants for services		-		-		117,474		-			117,474
Common stock issued on warrant exercise		34,482		34		204,366		-			204,400
Net loss for the three months ended June 30, 2020		-		-		-		(1,166,835	)		(1,166,835	)
Balance, June 30, 2020		5,083,129	$	5,083	$	83,669,702	$	(93,667,759	)	$	(9,992,975	)

					Additional
	Common Stock				Paid in			Accumulated
	Shares		Amount		Capital			Deficit			Total

Balance, March 31, 2021		5,263,884	$	5,264	$	89,853,620		$	(101,282,654	)	$	(11,423,770	)

Issuance of warrants for services						369,965						369,965
Issuance of common stock for cash		43,090		43		474,926						474,970
Issuance of warrants as per the Co-Participation Agreements						14,898						14,898
Common stock issued on cashless warrant exercise		54,361		54		(54	)					-
Public offering issuance of stock and warrants		2,760,000		2,760		13,797,240						13,800,000
Underwriting and other expenses for public offering						(1,622,638	)					(1,622,638	)
Warrants sold as part of the public offering						4,240						4,240
Common stock issued on conversion of 11% Convertible Debt and accrued interest		942,322		942		7,537,614						7,538,556
Stock issues for services		5,000		5		22,395						22,400
Net loss for the three months ended June 30, 2021									(1,845,648	)		(1,845,648	)
Balance, June 30, 2021		9,068,657	$	9,069	$	110,452,205		$	(103,128,302	)	$	7,332,972

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

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ZIVO BIOSCIENCE, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIENCY
FOR THE SIX MONTHS ENDED JUNE 30, 2020 AND JUNE 30, 2021


					Additional
	Common Stock				Paid in		Accumulated
	Shares		Amount		Capital		Deficit			Total
Balance, December 31, 2019		4,959,206	$	4,959	$	81,614,504	$	(89,957,946	)	$	(8,338,483	)

Issuance of warrants for services		-		-		898,975		-			898,975
Issuance of warrants for services – related party		-		-		297,248		-			297,248
Issuance of warrants as per the Co-Participation Agreements						117,474					117,474
Issuance of common stock for cash		1,953		2		24,998		-			25,000
Common stock issued on conversion of 11% Convertible Debt and accrued interest		17,028		17		136,208		-			136,225
Common stock issued on warrant exercise		104,940		105		580,295		-			580,400
Net loss for the six months ended March 31, 2020		-		-		-		(3,709,813	)		(3,709,813	)
Balance, June 30, 2020		5,083,129	$	5,083	$	83,669,702	$	(93,667,759	)	$	(9,992,975	)

					Additional
	Common Stock				Paid in
	Shares		Amount		Capital			Deficit			Total
Balance, December 31, 2020		5,162,846	$	5,163	$	87,747,898		$	(99,063,675	)	$	(11,310,614	)

Issuance of warrants for services						1,344,989						1,344,989
Issuance of common stock for cash – related party		4,464		5		49,995			-			50,000
Issuance of common stock for cash		139,664		140		1,514,829						1,514,969
Issuance of warrants as per the Co-Participation Agreements						55,697						55,697
Common stock issued on cashless warrant exercise		54,361		54		(54	)					-
Public offering issuance of stock and warrants		2,760,000		2,760		13,797,240						13,800,000
Underwriting and other expenses for public offering						(1,622,638	)					(1,622,638	)
Warrants sold as part of the public offering						4,240						4,240
Common stock issued on conversion of 11% Convertible Debt and accrued interest		942,322		942		7,537,614						7,538,556
Stock issues for services		5,000		5		22,395						22,400
Net loss for the six months ended June 30, 2021									(4,064,627	)		(4,064,627	)
Balance, June 30, 2021		9,068,657	$	9,069	$	110,452,205		$	(103,128,302	)	$	7,332,972

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

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ZIVO BIOSCIENCE, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

	For the Six Months Ended June 30, 2021			For the Six Months Ended June 30, 2020
Cash Flows for Operating Activities:
Net Loss	$	(4,064,627	)	$	(3,709,813	)
Adjustments to reconcile net loss to net cash used by operating activities:
Amortization of Lease Liability		10,622
Stock and warrants issued for services rendered – related party					297,248
Stock and warrants issued for services rendered		1,367,389			898,974
Changes in assets and liabilities:
Increase in prepaid expenses		(128,661	)		(80,554	)
Increase / (Decrease) in accounts payable		(641,281	)		113,296
Decrease in Lease Liability		(10,851	)
Increase in deferred revenue – participation agreements		85,303			1,032,526
Increase in accrued liabilities and interest		281,738			325,507
Net Cash Used by Operating Activities		(3,100,368	)		(1,122,816	)

Cash Flows from Investing Activities:
Net Cash by Investing Activities	$	-		$	-

Cash Flow from Financing Activities:
Proceeds from Loan Payable, related party – net of repayments					51,000
Proceeds of Note Payable, other		190,500			121,700
Payments of Note Payable, other		(127,000	)
Public offering of stock and warrants		13,804,240
Expenses related to the public offering		(1,622,639	)
Proceeds from sale of common stock warrants – participation agreements		55,696			117,474
Proceeds from exercise of common stock warrants					580,400
Proceeds from sale of common stock – related party		50,000
Proceeds from sales of common stock		1,514,973			25,000
Net Cash Provided by Financing Activities		13,865,770			895,574

Increase/(Decrease) in Cash		10,765,402			(227,242	)
Cash at Beginning of Period		137,862			346,111
Cash at End of Period	$	10,903,264		$	118,869

Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for:
Interest	$	2,056		$	-
Income Taxes	$	-		$	-

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

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ZIVO BIOSCIENCE, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Continued)

Supplemental Disclosure of Non-Cash Investing and Financing Activities:

Six Months Ended June 30, 2021:

During the six months ended June 30, 2021, a related party applied the proceeds of a Loan Payable in the principal amount of $9,000, against an investment in a Participation Agreement.

During the six months ended June 30, 2021, warrants to purchase 139,100 shares of the Company’s common stock were exercised on a “cashless” basis resulting in the issuance of 54,361 shares of common stock.

On June 2, 2021, pursuant to the terms of several Debt Extension and Conversion Agreements with holders of our 11% convertible debt, a total of $7,538,556 comprised of outstanding principal of $4,940,342 and interest of $2,598,214 our convertible notes were automatically converted into 942,322 shares of common stock at $8.00 per share. See Note 6 – Convertible Debt for additional information.

Six Months Ended June 30, 2020:

During the six months ended June 30, 2020, $100,000 of 11% Convertible Notes, as well as $36,225 in related accrued interest were converted at $8.00 per share into 17,028 shares of the Company’s common stock.

During the quarter ended March 31, 2020, a principal shareholder and related party assigned warrants to purchase 46,875 shares of the Company’s common stock to third party investors and such warrants were exercised in the first quarter of 2020 at $8.00 per share resulting in the issuance of 46,875 shares of common stock for gross proceeds of $375,000. The Company considered the warrants to be contributed capital from a principal shareholder and recorded equity related finance charges. The warrants were valued at $453,441 using the Black Scholes pricing model relying on the following assumptions: volatilities ranging from 128.20% to 142.46%; annual rate of dividends 0%; discount rates ranging from 0.66% to 1.65%.

During the quarter ended June 30, 2020, a principal shareholder and related party assigned a warrant to purchase 6,250 shares of the Company’s common stock a third-party investor and such warrant was exercised in the second quarter of 2020 at $8.00 per share resulting in the issuance of 6,250 shares of common stock for gross proceeds of $50,000. The Company considered the warrant to be contributed capital from a principal shareholder and recorded equity related finance charges. The warrants were valued at $42,090 using the Black Scholes pricing model relying on the following assumptions: volatility of 133.44%; annual rate of dividends 0%; discount rate of 0.41%.

During the six months ended June 30, 2020, warrants to purchase 57,875 shares of the Company’s common stock were exercised on a “cashless” basis resulting in the issuance of 27,436 shares of common stock.

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

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ZIVO BIOSCIENCE, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements include the accounts of ZIVO Bioscience, Inc. and its wholly- owned subsidiaries (collectively, the “Company”). All significant intercompany accounts and transactions have been eliminated in consolidation. In the opinion

SEC Form 10-Q filed by Zivo Bioscience Inc.