WASHINGTON,
[X]
[ ]2018
FOR THE TRANSITION PERIOD FROM
No. 000-27237
GeneThera, Inc.
(Exact name of registrant as Specified in its Charter)
Nevada
65-0622463
(State or Other Jurisdiction of
(Internal Revenue Service
Incorporation or Organization)
Employer Identification Number)
9101 Harlan Street Suite 130 Westminster, CO
80031
(Address of Principal Executive Offices)
(Zip Code)
Registrant’s telephone number, including area code:
(303) 439-2085
 GeneThera, Inc. |
| (Exact name of registrant as specified in its charter) |
| Nevada | 65-0622463 | |
| (State or other jurisdiction of incorporation) | (I.R.S. Employer Identification No.) |
3051 W 105th Ave. #350251, Westminster, CO | 80035 | |
| (Address of principal executive offices) | (Zip Code) |
| (720) 587-5100 |
| (Registrant’s telephone number, including area code) |
None
None.
Common Stock, $0.001 per share
☒
☒
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, 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 ¨☒
| Large Accelerated Filer ☐ | |
| Accelerated |
| Smaller reporting company |
| Emerging growth company ☐ |
The issuer's revenues for the most recent fiscal year ended December 31, 2015 were $0.
☒
State the numbera total of 36,402,602 shares of the issuer’sregistrant’s common stock outstanding as of the latest practicable date: 38,183,086 shares of common stock issued and outstanding as of May 11, 2016.
February 20, 2020.
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2015
Part I
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| Item 1. | Business | 5 | |
Item 1A. | Risk Factors | 11 | |
| Item 1B. | 16 | ||
Item 2. | 16 | ||
| Item 3. | 17 | ||
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Item 4. | Mine Safety Disclosures | ||
Part II
PART II | |||
| Item 5. | Market for | ||
Item 6. | Selected Financial Data | ||
Item 7. | Management’s Discussion and Analysis | ||
| Item 7A. | Quantitative and Qualitative Disclosure About Market Risk | 23 | |
Item 8. | Financial Statements and Supplementary Data | 23 | |
Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 23 | |
Item 9A. | Controls and Procedures | 23 | |
| Item 9B. | Other Information | 24 | |
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Part III
Item 10. | Directors, Executive Officers and Corporate Governance | 25 | |
| Item 11. | Executive Compensation | 28 | |
| |||
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related | 29 | |
Item 13. | Certain Relationships and Related Transactions, and Director Independence | 30 | |
Item 14. | Principal | 31 | |
| PART IV | |||
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Item 15. | Exhibits, Financial Statement Schedules | 32 | |
| Item 16. | Form 10-K Summary | 32 | |
PART I.
FORWARD-LOOKING AND CAUTIONARY STATEMENTS
Sections
* Our financing plans,
* Regulatory environments in which we operate or plan to operate, and
*Trends affecting statements.
Factors, risks, and uncertainties that could cause actual results to differ materially from those in the forward-looking statements ("Cautionary Statements") include, among others,
* Our ability to raise capital,
* Ourcapital;
* Ourenvironment;
* Risksown;
* Risks
* Riskseconomies;
* Theservices;
* Other
All subsequent written
differ significantly from the projections. Potential investors should not make an investment decision based solely on our projections, estimates or expectations.
In November 2007, GeneThera, Inc. (“we”, “us”, the “Company” or “GeneThera”) reincorporated in the State of Nevada due to the fact that a third party had acquired the Company’s prior Florida Corporate Charter and the fact that the Company was unable to regain the control of such Corporate Charter.
Our common stock currently trades on the OTC “Over-The-Counter” pink market under the symbol GTHR. Our temporary office is located at 9101 Harlan Street Suite 130 in Westminster, CO 80031 and our telephone number is 303-439-2085. This office only answers the phone calls until our new laboratory space’s new lease agreement and renovations are completed.
For the fiscal year 2015, and as of now, the Company had one subsidiary, GeneThera, Inc., a Colorado corporation. GeneThera no longer has holds a commercial diagnostics laboratory in Mexico.
COMPANY PROFILE
GeneThera is a biotechnology company dedicated to improving food safety byapplying the latest molecular technologies to eradicate "cross-over"“cross-over” (zoonotic) diseases such as Johne's Disease,Johne’s disease, Mad Cow Disease, Chronic Wasting Disease, and E.coli. by applying the latest molecular technologies. Diseases of terrestrial, avian and aquatic life animals influence a number of economic and global security issues;issues, including food for an increasing world population, access to international trade, species conservation and protection of those endangered, and economic growth in developing and re-organizing nations. Because many animal disease agents are zoonotic (transmissible between humans and animals, causing infection in both species), their management and prevention are crucial to improving public health on a global scale. The Company focusesWe focus on developing molecular diagnostic tests, therapeutics, and vaccines through robotic technology in the belief that better technologies and methodology need to be implemented to help control emerging diseases in animals and in humans, and believeshumans. We believe that, if not addressed, these diseases in animals will likely continue to cause serious and growing problems in terms of economics, human health and biodiversity.
GeneThera has
the Company is we are positioned to move from a developmental stage to a product oriented stage company, depending on reliable funding.
GeneThera provides
The Company believes it
Johne’s
GeneThera’s (Paratuberculosis)
Johne’s Johne’s disease is a worldwide problem of domestic animals primarily including dairy cattle, sheep and goats. A significant public health concern is associated with Johne'sJohne’s disease, (JD), which results from an infection with bacteria called Mycobacterium paratuberculosis.Paratuberculosis. This organism grows very slowly, causes a gradually worsening disease condition, and is highly resistant to the infected animal'sanimal’s immune defenses. Therefore, infected animals harbor the organism for years before they test positive or develop disease signs.
·
Johne’s disease include:
·
Infection
·
·
JD affectscosts
·
exports
·
Crohn’s disease
·
sheep
·
pre-born
·
year
·
trans placental
·
“dirty” teats
carriers
are rarely detected with currently available diagnostic tests, including fecal culture or serologic tests (ELISA). This stage progresses slowly over many months or years to stage II.
Crohn’s
Crohn's
Crohn's
found in human patients and we believe that individuals that are genetically predisposed could possibly be contracting the disease through digestion of Johne’sJohne’s disease - infected milk.
BUSINESS MODEL
GeneThera has developed proprietary diagnostic assays for use in the agricultural and veterinary markets. Specific assays for Chronic Wasting Disease (among elk and deer) and Mad Cow Disease (among cattle) have been developed and are available
GeneThera provides genetics-based diagnostic and is currently working on vaccine solutions to meet the growing demands of today's veterinary industry and tomorrow's agriculture and healthcare industries. The Company is organized and operated both to continually apply its scientific research to more effective management of diseases and, in so doing, realize the commercial potential of
GeneThera animal disease assay development business is based on its Integrated Technologyour Molecular Robotic Platform (ITP) that combines a proprietary diagnostic solution called Gene Expression System (GES)the use of advance robotic hardware with PURIVAX, its system for analyzing large-scale DNA sequencing. The first partArtificial Intelligence (AI). Our therapeutic vaccine technology is based on the use of this platform is the ongoing development of molecular diagnostic assays solutions using real time Fluorogenic Polymerase Chain Reaction (F-PCR) technology to detect the presence of infectious disease from the blood of live animals. The second part of the ITP is the development of therapeutic vaccines using RNA interferenceCRISPR-Case9 gene editing technology. Interference RNACRISPR-Case 9 technology is a new technique that is based on the use of short RNA sequences complementary to a specific target gene. Once the RNA sequence binds to the gene, the gene is deactivated or “silenced”“silenced” and no longer able to produce the specific protein. It also allows for the efficient, effective, and continuous testing, management and treatment of animal populations. These facts distinguish theWe plan to deliver CRISPR modified RNA sequences motif using our proprietary PURIVAX technology. Our technology differs from any alternative testing and management methodology available to agriculture today -- all of which require the destruction of individual animals and even entire herds. Our testing and data analysis processes also allow us not only to separate infected from clean animals, but also to gain knowledge vital to development of preventative vaccines.
Each individual assay utilizes the proprietary Field Collection System (FCS) for the collection and transportation of blood samples to GeneThera laboratory. This system consists of two (2) tubes. A 5 milliliter (ml) red cap tube containing 1ml anticoagulant
solution and a 10 ml white cap tube. One (1) ml of blood is collected from the animal and added to the red cap tube. Ten (10ml) of milk is collected into the white cap tube. The FCS allows GeneThera to maintain the integrity of each sample by the addition of specific reagents to test tubes contained in the system. GeneThera FCS is designed to be an easy-to-use method of gathering blood samples from harvested or domesticated animals. It ensures consistency of samples as well as increased assurance of each sample's integrity.
To date, GeneThera has successfully developed the ability to detect Chronic Wasting Disease, a disease affecting elk and deer in North America. The release of commercialized Field Collection Systems and laboratory diagnostic testing occurred in October of 2003 as a marketing trial. GeneThera has also successfully developed an assay for the detection of Mad Cow Disease, a disease recently found in the United States, but which has been in Europe for many years. The Field Collection Systems are available for purchase from the Company. Chronic Wasting Disease and Mad Cow Disease are both in the family of diseases called Transmissible Spongiform Encephalopathy (TSE). Diagnostic assays for E. coli O157:H7 and Johne's disease are in the final stages of development.
The Company, through GeneThera, is also developing vaccines for Chronic Wasting Disease and E. coli O157:H7. The Company
INTEGRATED TECHNOLOGY PLATFORM (ITP)
GeneThera’s Integrated
The vaccine development is in the “in vitro” or pre-clinical stage. We expect to initiate experimental animal studies for Johne’s disease in the next 36-48 months. ITP combines the following technologies: 1) gene expression system technology or “GES”; 2) viral DNA purification technology or PURIVAX technology; 3) genetically engineered Adenovirus (rAD) and recombinant Adeno Associate Virus (rAAV) systems (vectors).
This integrated technology platform yields fast-track vaccine development. Leveraging its ITP, GeneThera believes that it can develop a prototype vaccine within 18 months versus the current standard of 24 to 36. We estimate that the cost to bring these vaccines to market is $5-7 million. There is no assurance that we will be able to raise the capital necessary to bring a vaccine to market and if the capital is raised, that we will be able to comply with the government regulations involved in bringing such a product to market. The GES applied modular unit system utilizes robotics and is based on nucleic acid extraction in conjunction with F-PCR technology to develop gene expression assays. Using GES assays, vaccine efficacy can be measured quickly because it will be unnecessary to wait for the antibody response to measure how well the vaccine is working. F-PCR will allow effective quantification of the precise number of viral or bacterial genetic particles before, during and after vaccine injection(s). We anticipate that the more effective the vaccine is, the stronger the decrease of the infectious disease particles will be.
GES SYSTEM
GES is a proprietary assay development system. To date, the system has been used to develop our TSE and Johne’s disease molecular assay. GES is a gene expression system to be used in our laboratory and will be marketed for commercial sale under the trade name HERDCHECK. The core of GES is Fluorogenic Polymerase Chain Reaction technology (F-PCR). GeneThera approaches the technical problems related to the use of conventional PCR in molecular diagnostics via our modular unit concept. Specifically, the modular unit consists of an Automated Nucleic Acid Workstation (ANAW) and a Sequence Detection System (SDS) that are integrated, allowing an operator to perform the entire procedure of DNA extraction and F-PCR analysis within a closed computerized system. This system results in minimal intervention and non-post-PCR manipulation. GES is a molecular genetic base system that utilizes Fluorogenic Polymerase Chain Reaction (F-PCR). Fluorogenic PCR (F-PCR) is a technology based on sequence specific hybridization between a nucleic acid target and a fluorogenic probe, a short sequence of DNA chemically treated to generate light at a specific wavelength, complementary to the target sequence. The probe consists of an oligonucleotide, a short synthetic DNA molecule, with two fluorescent molecules (a reporter and quencher dye) attached to both ends of the oligonucleotide. Due to the unique design of the Fluorogenic probe, the activity of the Taq Polymerase enzyme allows direct detection of PCR products by the release of the fluorogenic reporter during PCR. The reporter and the quencher dye are linked at the end of the probe. When the probe is intact, the proximity of the reporter dye to the quencher dye results in a suppression of the reporter fluorescence. During PCR, if the target of interest is present, the probe specifically anneals between the forward and the reverse primer site. The nuclease activity of the Taq DNA Polymerase cleaves the probe between the reporter and the quencher only if the region binds to the target. If the probe is not bound then no cleavage occurs. After cleavage, the shortened probe dissociates from the target and the polymerization of the DNA strand continues. This process occurs in every cycle and does not interfere with the exponential accumulation of the product. The cleavage of the oligonucleotide between the reporter and the quencher dye results in an increase of fluorescence of the reporter
that is directly proportional to the amount of the product accumulated. The specificity of this 5’ nuclease assay results from the requirement of sequence complementary between probe and template in order for cleavage to occur. Thus, the fluorogenic signal is generated only if the target sequence of the probe is generated by PCR. No signal is generated by non-specific amplification.
To perform GES, specific laboratory equipment is needed. This involves some substantial initial costs to set up the laboratory operations.
The Automated Nucleic Acid Workstation is a highly flexible robotic system that extracts and purifies acids from a variety of complex samples, preparing them for F-PCR analysis. Data management system software includes a database to manage all run phases and record sample processing.
The Sequence Detection System detects the fluorescent signal generated by the cleavage of the reporter dye during each PCR cycle. This process confers specificity without the need of post-PCR hybridization. Most importantly, the SDS offers the advantage of monitoring real-time increases in fluorescence during PCR processing. Specifically, monitoring real-time progress of the PCR completely changes the approach to PCR-based quantitation of DNA and RNA, most particularly, in improving the precision in both detection and quantitation of DNA and RNA targets.
GeneThera currently faces limited competition in the use of F-PCR technology and the modular unit concept for commercial testing of either infectious disease in animals or food pathogen contamination. Currently, most labs utilize conventional microbiology, immunological or conventional PCR methods for either veterinary diseases or food pathogen contamination detection. Specific to microbiology and immunological techniques, the drawbacks of these approaches are:
1.
The antibodies-based culture media used to detect the presence of infectious
diseases has a low level of sensitivity; and
2. High background due to non-specific binding of antibodies and/or culture
contamination; sample preparation and storage creates artifacts; and long, cumbersome protocols necessary to perform these tests.
A major technical limitation of conventional PCR is the risk of contaminating a specimen with the products of previously amplified sequences. Known as cross-contamination, this phenomenon represents a constant challenge to any lab using conventional PCR. Managing these challenges is cumbersome and difficult to streamline. Fluorogenic PCR (F-PCR) attempts to overcome these drawbacks by making it possible for PCR to
efficiently test large numbers of samples even when major laboratory facilities are not readily available. A novel methodology, F-PCR allows quantitative and qualitative detection of specific nucleic acid sequences in a sensitive, accurate, and rapid fashion.
PURIVAX TECHNOLOGY
GeneThera has developed a large-scale process for highly purified and high viral titer (viral concentration) Adenovirus and AAV genetically engineered viruses. This technology enables GeneTheraus to develop Adenovirus and AAV-based recombinant DNA vaccines for veterinary diseases and foodzoonotic pathogens. GeneThera’sOur PURIVAX is a purification system that dramatically improves biological purity and viral titer of recombinant Adenovirus and AAV vectors. PURIVAX is intended to completely eliminate toxic side effects associated with Adenoviruses and AAV vectors, thereby making it possible to develop highly immunogenic and safe recombinant DNA vaccines. Importantly, recombinant DNA (rDNA)rDNA vaccine technology represents a powerful tool for an innovative vaccine design process known as “genetic“genetic immunization.”
Recombinant Adenovirus (rAD)
PRODUCT DEVELOPMENT
GeneThera provides
HERD GUARD
HERDCHECK
The major features of the testing system are:
Highis a high throughput system.
Capableand highly defined and structured testing system that is capable of more than 20,000 tests per month.
Highly defined The systems use proprietary real time PCR technology.
Proprietary Real Timerobotic- based DNA extraction procedures and analyzed using the real time PCR technology.
HERDSAFE Using this methodology, we can detect between two (2) and twenty (20) bacterial particles from 10 ml of milk. We believe that our test will be very useful for early detection of Mycobacterium Avian Para tuberculosis, both in milk samples and infected cows.
HERDSOFT
DEVELOPMENTS TO DATE
HerdCheck
GeneThera has developed a molecular system for the detection of Johne’s disease in milk, blood and feces of dairy cows infected with the Mycobacterium paratuberculosis sub. Avium. (MAP). Samples from milk obtaining from supermarket shelves were either “spiked’ with different concentrations of MAP or ‘naturally processed. The bacterial DNA was isolated using both, manual and robotic- based DNA extraction procedures and analyzed using The Real Time PCR technology. Using this methodology we can detect between two (2) and twenty (20) bacterial particles from 10 ml of milk. We believe that our test will be very useful for early detection of MAP both in milk samples and infected cows.
We are currently evaluating several robotic systems for DNA extraction. We believe that we can further increase the sensitivity of the molecular assay by using robotic driven DNA extraction methods.
HerdSoft
HerdSafe
We are currently developing a vaccine for Johne’s disease. GeneThera’s approach for developing this vaccine is based on the use of PURIVAX technology, genetically engineered Adenoviral and AVV, and silencing RNA technology (iRNA). To date, we have modified the Adenovirus by inserting a gene of the MAP bacterium responsible for triggering the infection in blood cell.
However, at the present time, we do not have sufficient financial resources to implement further development work; therefore, we will need to secure substantial funding to continue the development of the Johne’s vaccine.
Disease and FUTURE DEVELOPMENT PLANS
have introduced our diagnostic solution for Chronic Wasting Mad Cow Disease on a very limited basis. We anticipate that R&D will be ongoing during the life of the Company, as this is the source for new products to be introduced to the market. Our plan is to seek new innovations in the biotechnology field. We cannot assure you that we will be successful in developing or validating any new assays or, if we are successful in developing and validating any such assays, that we can successfully commercialize them or earn profits from sales of those assays. Furthermore, we cannot assure you that we will be able to design, develop, or successfully commercialize any vaccines as a result of our research and development efforts.
R&D SERVICES
Molecular, Cellular, Viral Biology
Research & Development Services:
Molecular Biology:
Synthetic cDNA Construction
Prokaryotic Expression Vector Construction & Development
E. coli Expression Strain Evaluation
Pilot Scale Fermentation
Mammalian Expression Vector Construction & Development
Baculovirus Expression
Protein Isolation
Protein Engineering: Complement Determining Region Conjugated Proteins
Monoclonal Antibody Production Chimerization & Humanization
Vector design for Prokaryotic Expressioncommercialize any vaccines as a result of Antibody Fragments (Fab)our research and Single Chain Antibody (ScFv)
Pilot Scale-up Development
Process Purification & Characterization
Assay Development & Quality Control Pharmaceutical Dosage and Formulation
Gene Therapy Testing Services: GeneThera offers GLP (Good Laboratory Procedure) testing programs for somatic cell, viral and naked DNA-based gene therapies. development efforts.
Replication-Competent Viral Vector Testing: Sensitive in vitro cell culture assays are used to detect replication-competent retroviruses or adenoviruses. GeneThera can work with clients to provide custom replication-competent virus detection assays for the particular vector construct.
Complete Somatic Cell and Viral Vector Packaging and Producer Cell Line Characterization: GeneThera offers all of the assays mandated by regulatory authorities worldwide for the bio-safety analysis and characterization of cells and cell lines used in gene therapy products.
Vector Stock Characterization: Custom purity and potency testing is available for gene therapy viral vector stocks.
Vector Purification Process Validation for Viral Clearance: Most biopharmaceuticals require viral clearance studies to validate the removal of potential contaminants, such as those from bovine components or from helper viruses (adenovirus in AAV production). GeneThera can provide custom design and performance of viral studies for various vector purification processes.
Custom Bio-safety Testing Programs for Somatic Cell, Ex Vivo Cell, and Tissue Therapies: GeneThera can guide our clients through the unique process of designing and implementing a bio-safety testing program that meets the needs of each specific project.
GeneThera is currently seeking contracts for these services to be performed on an annual basis. There is no assurance that any contracts will be signed or that the Company will generate significant revenues or profits from any such contracts.
MARKETING STRATEGY
GeneThera’s goal is to focus on the international markets, primarily the Pacific Rim and Europe, for the commercialization of itsour animal testing platform. The company hasWe have no plans to offer any veterinary services in the United States.
SALES AND MARKETING
Our sales and marketing efforts will be primarily in Europe and Pacific Rim (New Zealand and Australia).
COMMERCIAL DIAGNOSTIC TESTING
LICENSING
INTELLECTUAL PROPERTY
COMPETITION
for their products, operating experience, research and development, marketing capabilities, and manufacturing capabilities that we do. We will face competition from companies marketing existing products or developing new products for diseases targeted by our technologies. The development of new products for those diseases for which we are attempting to develop products could render our product candidates noncompetitive and obsolete.
MANUFACTURING
PRODUCT LIABILITY
GOVERNMENT REGULATION
We encounter various
There is aable to earn sufficient revenues to continue our business.
GeneThera has had negligible revenues since inception, had and our auditors issued a negative working capital deficit and an accumulated deficit of $6,477,341 and $25,034,821, respectively“going concern” audit opinion in their report on our financial statements.
obtain additional financing, necessarywe would be forced to support GeneTheradelay the development of our products or liquidate the company.
If a business.
The Company depends
If theCompany fails to attract and retain additional highly skilled personnel, operations will suffer.
Milici. Finding qualified personnel in the biotechnology industry is very challenging. Smaller biotechnology companies are alwayspotentially at a disadvantage because of itsin the employment marketplaces due to their limited financial resources. The Company has been unable at this time to hire any additional qualified personnel. If the Company is unable to hire additional personnel, this may result in a substantial delay of its R&D and commercial operations.
If the Company fails to attract significant additional capital, the Company may be unable to continue developing its products.
From the beginning of its operation, GeneThera has obtained limited funding to implement its business strategy. The Company believes it will require significant additional funding in order to achieve its business plan. Over the next 12 months, in order to have the capability of achieving its business plan, the Company will require at least $10,000,000 in additional funding. There are no guarantees that the Company will be able to secure such financing, and if the financing is secured, there are no guarantees whether the Company can fully achieve the goals laid out in its business plan. If financing is available, it may involve issuing securities senior to our common stock. In addition, in the event we do not raise additional capital from conventional sources, such as our existing investors or commercial banks, there is a likelihood that our growth will be restricted and we may be forced to scale back or curtail implementing our business plan.
Rapid growth may place significant demands on our resources.
* The need to manage relationships with various strategic partners and other third parties.
* Difficulties in hiring and retaining skilled personnel necessary to support our business.
* The need to train and manage a growing employee base.
* Pressures for the continued development of our financial and information management systems.
If we have not made adequate allowances for the costs and risks associated with this expansion or if our systems, procedures, or controls are not adequate to support our operations, our business could be harmed.
The Company may not be able to comply with Government regulations.
The Company is subject to or affected by laws and regulations that govern, for example: the vaccination of animals for certain diseases. The failure to comply with these laws and regulations, or to obtain applicable governmental approvals, could result in the imposition of penalties, cause delays in, or make impossible, the marketing of our products and services.
The Company may be unable to compete against other more establish biotech of pharmaceuticalbiotechnology companies.
The Company operates
The Company has limited Government Regulatory Experience.
The Company has never successfully undertaken a clinical trial for animal testing. Our experience in this area is limited. The Company has never obtained regulatory approvals for any of its products. As such, the Company may be unable to ever successfully undertake a clinical trial of its products, and may be forced to curtail or abandon its current business plan.
The Company has a history of operating losses.
We have generated no revenues to date from our operations. Historically, we have had net operating losses each year since our inception. Additionally, even if we are able to commercialize our technology or any products, it is not certain that will result in revenues or profitability.
The Company relies on third parties for sale, distribution and manufacturing.
We do not have any “in house” sale, distribution or manufacturing capabilities. The success of our operations mostly depends by the ability of marketing entities.
.
The Company has a limited operating history on which investors may evaluate our operation and prospects for profitable operations
If we continue to suffer losses as we have in the past, investors may not receive any return on their investments. Our prospects must be consider speculative in light of the risks, expenses and difficulties frequently encountered by companies in their early stages of development. A substantial risk is involved in investing in the company because we have fewer resources than established companies.
The company depends on new and rapidly evolving technologies
We are engaged in activities in the biotechnology field, which is characterized by extensive research effort and rapid technological progress.
Over
Due to the increase cost of R&D and the very challenging economic environment we have decided to concentrateways. Other new competitors may enter our efforts inmarkets through the development of innovative new technology, the acquisition of rights to use existing technologies or the use of existing technologies when patents protecting such existing technologies expire. New or existing competitors may introduce new, innovative, and competitive products and services, which could be superior or perceived by our customers to be superior to our products and services or lead to the obsolescence of one or more of our products or services. Some of our competitors and potential competitors may choose to differentiate themselves by offering products and services perceived in the eyes of customers as similar, at substantially lower sales prices, which could have an adverse effect on our results of operations through loss of market share or a commercial platformdecision to lower our own sales prices to remain competitive. In addition, our ability to attract and retain customers depends on the effectiveness of our customer marketing and incentive programs and multiple competitors could bundle product and service offerings through co-marketing or other arrangements, which could enhance their ability to compete with our broad product and service offering. Certain of our competitors and potential competitors, have substantially greater financial and managerial resources than us, as well as greater experience in manufacturing, marketing, research and development, and obtaining regulatory approvals than we do.
The Companylead to a decline in diagnostic assaying for such diseases. Changes in government regulations or in the availability of government funds available for monitoring programs could negatively affect sales of our products. In addition, changes and trends in local food markets around the world could negatively affect the related production markets resulting in a decline in demand for our diagnostic assaying products. Declines in testing for any reason could have an adverse effect on our results of operations.
If As such, we failmay be unable to obtain regulatory approvalever successfully undertake a clinical trial of any of our products, we will not be permitted to market our products, and may be forced to cease operations.
curtail or modify our current business plan.
Our technology is not protected
Our technologythe Company, and know-how is not patented. We rely on trade secrets to protectcould require the registration, redesign or reformulation of our intellectual property. We cannot assure, however, that these trade secrets will provide meaningful protection for our intellectual property. Furthermore, in absence of patent protection, competitors who independently develop substantially equivalent technology may harm our business.
The Company may not be able to raise the required capital to conduct our operations and develop and commercialize our products.
We require substantial additionalresourcesproducts in order to conduct our operationsconform. Any redesign or reformulation or restricted supply of parts and develop and commercializecomponents may negatively affect the availability or performance of our products and runservices, add assaying lead-times for products and reformulated products, reduce our facilities. We will need significant additional funds or a collaborative partner, or both, finance research and development activities of our potential products. Accordingly, we are continuing to pursue additional sources of financing. Additional financing through strategic collaborations, public or private equity financing sources may not be available on accepted terms. Additionally, equity financing couldmargins, result in significant dilutionadditional costs, or have other similar effects. Any of these could adversely affect our business, financial condition, or results of operations. These legal and regulatory requirements are complex and subject to our shareholders. Further, if additional funds are obtained through arrangements with collaborative partners, these arrangementschange, and we continue to evaluate their impact. Additionally, foreign governments may require us to relinquish rightsregister our products, and these product registration requirements, which vary among the applicable jurisdictions and change from time to some of our technologies, or productstime, are often complex and require us to engage in lengthy and costly processes. We cannot assure you that we would otherwise seekwill be able to develop and commercialize on our own. If sufficient capital is not available, we may beobtain or maintain any product registration required to delay, reduce the scope of or eliminateby one or more offoreign governments. Any inability to obtain or maintain a required product registration in a jurisdiction could adversely affect our programs or potential products any ofability to market and sell the applicable product in that jurisdiction, which could have a material adversenegative effect on our business, financial condition and results of operations.
to adjust to changing legal and political environments, could result in fines, penalties, and sanctions; product recalls; suspensions or discontinuations of, or limitations or restrictions on, our ability to design, manufacture, market, import, export or sell our products; and damage to our reputation. Any of these could negatively impact our business.
Asworldwide tax system to a public company, we areterritorial tax system. The 2017 Tax Act introduced new provisions including the Global Intangible Low-Taxed Income, Foreign Derived Intangible Income, Base Erosion Anti-Abuse Tax, expanded bonus depreciation and changed deductions for executive compensation and interest expense. The U.S. Department of Treasury continues to issue regulations related to the 2017 Tax Act, which may increase or decrease our tax liability in future periods.
whichcommon stock, could causedepress the markettrading price of our common stock to decline and which could affecthave a long-term adverse impact on our ability to run our business as we otherwise would like to. New rules could also make it more difficult or costlier for us to obtain certain types of insurance, including directors’ and officers’ liability insurance, and we may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtainraise capital in the coverage that is the same or similar to our current coverage. The impact of these events could also make it more difficult for us to attract and retain qualified persons to serve on our Board of Directors, our board committees, and as executive officers. future.
Compliance with Section 404would be reluctant to follow an unproven company such as ours or purchase or recommend the purchase of the Sarbanes-Oxley Act will continue to strain our limited financialshares of common stock until such time as we became more seasoned and management resources.
We incur significant legal, accounting and other expenses in connection with our status asviable. As a fully reporting public company. The Sarbanes-Oxley Act and new rules subsequently implemented by the SEC have imposed various new requirements on public companies, including requiring changes in corporate governance practices. As such, our management and other personnel need to devote a substantial amountconsequence, there may be periods of time to these new compliance initiatives. Moreover, these rules and regulations have increased our legal and financial compliance costs and made some activitiesseveral days or more time-consuming and costly. In addition, the Sarbanes-Oxley Act requires, among other things, that we maintain effective internal controls for financial reporting and disclosure of controls and procedures. Our testing may reveal deficiencieswhen trading activity in our internal controls over financial reportingshares is minimal or non-existent, as compared to a seasoned issuer which has a large and steady volume of trading activity that are deemedwill generally support continuous sales without an adverse effect on share price. We cannot assure you that an active public trading market for our common stock will develop or be sustained. If such a market cannot be sustained, you may be unable to be material weaknesses. Our compliance with Section 404 requires that we incur substantial accounting expense and expend significant management efforts. We may need to hire additional accounting and financial staff with appropriate public company experience and technical accounting knowledge. Moreover, if we are not able to comply with the requirements of Section 404 in a timely manner, or if we or our independent registered public accounting firm identifies deficienciesliquidate your investment in our internal controls over financial reporting that are deemed to be material weaknesses, the market price of ourcommon stock.
Investors May Face Significant Restrictions On The Resale Of Our Common Stock Due To Federal Regulations Of Penny Stocks.
an exercise price of less than $5.00 per share, subject to certain exemptions. Our common stock will beis a “penny stock” and is subject to the requirements of Rule 15g-9, promulgatedor the Penny Stock Rule, under the Securities Exchange Act of 1934, as long asamended, or the price of our common stock is below $5.00 per share. UnderExchange Act. This rule imposes additional sales practice requirements on broker-dealers that sell such rule, broker-dealers who recommend low-priced securities to persons other than established customers and accredited investors“accredited investors” (generally, individuals with a net worth in excess of $1,000,000 or annual incomes exceeding $200,000, or $300,000 together with their spouses). For transactions covered by the Penny Stock Rule, a broker-dealer must satisfymake a special sales practice requirements, including a requirement that they make an individualized written suitability determination for the purchaser and receivehave received the purchaser'spurchaser’s written consent to the transaction prior to sale. As a result, this rule may affect the transaction. The Securities Enforcement Remedies and Penny Stock Reform Actability of 1990, also requires additional disclosure in connection with any trades involving a stock
defined as a penny stock. Generally, the Commission defines a penny stock as any equity security not traded on an exchange or quoted on NASDAQ that has a market price of less than $5.00 per share. The required penny stock disclosures include the delivery, priorbroker-dealers to any transaction, of a disclosure schedule explaining the penny stock market and the risks associated with it. Such requirements could severely limit the market liquidity of thesell our securities and may affect the ability of purchasers to sell theirany of our securities in the secondary market, thus possibly making it more difficult for us to raise additional capital.
In addition, various state securities laws impose restrictions on transferring "penny stocks" Disclosure is also required to be made about sales commissions payable to both the broker-dealer and as a result, investorsthe registered representative and current quotations for the securities. Finally, monthly statements are required to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stock.
Shareholders May Be Diluted Significantly Through Our Efforts To Obtain Financing And Satisfy Obligations Through The Issuance Of Additional Shares Of Our Common Stock.
if the SEC finds that such a restriction would be in the public interest.
The market price ofwhich are beyond our common stock historically has been volatile.
The market price of our common stock historically has fluctuated significantly based on, but not limited to, such factors as general stock market trends, announcements of developments related to our business, actual or anticipated variations incontrol. If our operating results and our ability or inability to generate new revenues.
Our common stock is traded onprojections of future operating results do not meet the OTC pink market under the symbol “GTHR.” In recent years, the stock marketexpectations of securities analysts or investors in general has experienced extreme price fluctuations that have oftentimes been unrelated to the operating performance of the affected companies. Similarly, the market price of our common stock may fluctuate significantly based upon factors unrelated or disproportionate to our operating performance. These market fluctuations, as well as general economic, political and market conditions, such as recessions, interest rates or international currency fluctuations may adversely affect the market price of our common stock.
We currently have a sporadic, illiquid, volatile market for our common stock, and the market for our common stock may remain sporadic, illiquid, and volatile in the future.
We currently have a highly sporadic, illiquid and volatile market for our common stock, which market is anticipated to remain sporadic, illiquid and volatile in the future and will likely be subject to wide fluctuations in response to several factors, including, but not limited to:
·
actual or anticipated variations in our results of operations;
·
our ability or inability to generate revenues;
·
the number of shares in our public float;
·
increased competition; and
·
conditions and trends in the market for our services.
Furthermore, because our common stock is traded on the OTC pink market,periods, our stock price may be impacted by factors that are unrelated or disproportionate tofall.
ITEM 2:
DESCRIPTION OF PROPERTY
We sub-lease 1,800 square feet for our administrative office, which is located at 9101 Harlan Street Suite 130 in Westminster, Colorado 80031. The lease is for 38 months and it terminates on January 31, 2018. The rent was no cost during Months 1 and 2; Months 3-14, the rent was $2,394.75 per month; Months 15-26 months, the rent is $2,472.52; Months 27-38, the rent will be $2,549.25 per month. We sub-leased 500occupy approximately 7,990 square feet of office and laboratory space. The Company lost the abovementioned lab and office space thanks to Fredric Oeschger, the owner of FOGT, LLC. As soon as we completed our Third Milestone, as per the Milestone Investment Agreement (signed and agreed upon by Oeschger and his attorney), which the Milestone was for the Company to be in compliance with the Securities and Exchange Commission (SEC). Due to Fredric Oeschger breaching his contract agreement with GeneThera, the lease agreement with WPC Clear Creek and GTI Research, Inc., was terminated because WPC could not continue waiting for the rent payment. Presently, we are in negotiations with other landlords for laboratory space. Meanwhile, we are renting a mailbox in Westminster while we review the terms of lease agreements for three (3) prospective laboratory spaces in Lafayette, Westminster, and Lakewood, CO. We are hopeful to complete a lease agreement in early 2020. We believe any of these three facilities are more than adequate for our needs and for the immediate future and that, should it be needed, additional space can be leased to accommodate any future growth. This sublease arrangement was terminated effective April 29, 2019.
| Period | Monthly Base Rent |
| 01/01/18 – 03/31/18 | $0.00 |
| 04/01/18 – 03/31/19 | $5,993 |
| 04/01/19 – 03/31/20 | $6,658 |
| 04/01/20 – 03/31/21 | $7,324 |
| 04/01/21 – 03/31/22 | $7,990 |
| 04/01/22 – 03/31/23 | $8,656 |
| 04/01/23 – 03/31/24 | $9,322 |
past due rent, for a past landlord, please see Item 3 for a more detailed discussion of this mediation.
ITEM 3:
LEGAL PROCEEDINGS
The Company is involved in claims arising during the ordinary course of business resulting from disputes with vendors and stockholders over various contracts and agreements.
On August 12, 2015,continued to cause the Company entered intoto the point of openly admitting pledging his ownership of Preferred A Stock to a third party, which was Jeffrey A. Diette.
·
If paid on or before February 12, 2016, the judgment shall be deemed paid-in-full if the Company delivers $100,000 to LCR
·
If not paid off prior to February 12, 2016, the Company judgment shall be deemed satisfied if the Company delivers $150,000 to LCR on or before August 12, 2016.
·
If not paid off prior to August 12, 2016, there willcan be no discount and the Company shall owe the judgment balance in the amountassurance that such legal proceedings will not have a material adverse effect on our business, results of $325,885
In June 2009, James Tufts filed a complaint at the Small Claims Court in Jefferson County CO in the amount of $4,000 plus expenses from a London trip. The Company has not satisfied the judgment.
On June 26, 2009, Enterprise Leasing Company of Denver filed a Civil Judgment at the Jefferson County District Court in the State of Colorado in the amount of $78,178. The Company has not satisfied the judgment.
On August 17, 2010, Banc of America Leasing filed a Civil Judgment at the Oakland County District in Troy, Michigan in the amount of $24,002. The Company has not satisfied the judgment.
On September 23, 2010, Liberty Acquisitions filed a Civil Judgment at the Jefferson County Court in the State of Colorado in the amount of $3,300. The Company has not satisfied the judgment.
On February 10, 2009, Centennial Credit Corporation filed a Civil Judgment at the Jefferson County Court in the amount of $967. The Company has not satisfied the judgment.
On August 29, 2011, GeneThera had a court hearing concerning a litigation filed by The Park III related to unpaid rent according to the lease agreement. The District Court of
Boulder entered a judgment against the Company in the amount of $77,000. The Company has not satisfied the judgment.
On November 26, 2012, the Internal Revenue Service filed a Federal Tax Lien in the amount of $1,275. The Company has not satisfied the lien.
operations, financial position or cash flows.
4.
5.
High | Low | |
| Year Ended December 31, 2017: | ||
| First Quarter | $0.01500 | $0.00650 |
| Second Quarter | 0.00850 | 0.00520 |
| Third Quarter | 0.00520 | 0.00250 |
| Fourth Quarter | 0.04000 | 0.00519 |
| Year Ended December 31, 2018: | ||
| First Quarter | $0.01700 | $0.00900 |
| Second Quarter | 0.01700 | 0.00820 |
| Third Quarter | 0.01700 | 0.00830 |
| Fourth Quarter | 0.01750 | 0.00830 |
Year | Quarter | High | Low |
2015 | Fourth | $ 0.06 | $ 0.03 |
Third | 0.07 | 0.04 | |
Second | 0.09 | 0.007 | |
First | 0.08 | 0.015 | |
2014 | Fourth | $ 0.03 | $ 0.015 |
Third | 0.03 | 0.006 | |
Second | 0.04 | 0.006 | |
First | 0.03 | 0.007 |
6.
Not applicable for
company, this section is not required.
MANAGEMENT’S7.
Sections
* Our financing plans
* Regulatory environments in which we operate or plan to operate
* Trends affecting our financial condition or resultsand result of operations
* The impact of competition, the start-up of certain operations and acquisition opportunities.
Factors, risks, and uncertainties that could cause actual results to differ materially from those in the forward-looking statements (“Cautionary Statements”) include, among others,
* Our ability to raise capital
* Our ability to execute our business strategy in a very competitive environment
* Our degree of financial leverage
* Risks associated with our acquiring and integrating companies into our own
* Risks relating to rapidly developing technology
* Regulatory considerations
* Risks related to international economies
* Risks related to market acceptance and demand for our products and services
* The impact of competitive services and pricing
* Other risks referenced from time to time in our SEC filings
All subsequent written and oral forward-looking statements attributable to us, or anyone acting on our behalf, are expressly qualified in their entirety by the cautionary statements. We do not undertake any obligations to publicly release any revisions to any forward-looking statements to reflect events or circumstances after the date of this report or to reflect unanticipated events that may occur.
You should be read the following discussion of our results and plan of operation in conjunction with the consolidatedour financial statements and the notes thereto and the other financial information appearing elsewhere in this Form 10-K. Statementsreport. In addition to historical information, the following discussion contains certain forward-looking information. See “Special Note Regarding Forward Looking Statements” above for certain information concerning those forward looking statements. Our financial statements are prepared in this Management’s Discussion and Analysis
or Plan of Operation that are not statements of historical or current objective fact are “forward-looking statements.”
OVERVIEW
We have developed proprietary diagnostic assays for use in the agricultural and veterinary markets. Specific assays for Chronic Wasting Disease (CWD) (among elk and deer) and Mad Cow Disease (among cattle) have been developed and are available currently on a limited basis. E. coli (predominantly cattle) and Johne’s disease (predominantly cattle and bison) diagnostics are in development. We are also working on vaccine solutions to meet the growing demands of today’s veterinary industry and tomorrow’s agriculture and healthcare industries. The Company is organized and operated both to continually apply its scientific research to more effective management of diseasesU.S. dollars and in so doing, realize the commercial potential of molecular biotechnology.
We have not generated significant operating revenue as of December 31, 2015. Our ability to generate substantial operating revenue will depend on our ability to developaccordance with United States generally accepted accounting principles, or GAAP.
Our independent auditors have expressed substantial doubt about our ability to continue as a going concern in their report on our consolidated financial statements for December 31, 2015. For 2015 and 2014, our operating losses were $1,085,471 and $546,071, respectively. Our current liabilities exceeded current assets by $6,477,341 and $5,738, 840 as of December 31, 2015 and 2014, respectively.
Although, we completed an equity financing with gross proceeds of approximately $1.1 million in 2005, we will require significant additional funding in order to achieve our business plan. Over the next 12 months, in order to have the capability of achieving our business plan, we believe that we will require at least $10,000,000 in additional funding. We will attempt to raise these funds by both means of one or more private offerings of debt or equity securities and prospective revenues generated by our commercial labs, once the renovations are completed. At this time, we have commitments for additional capital funds. This amount may exceed an additional $2,500,000 depending on cost involved in the further development and commercialization of our products. In such event, we may need immediate additional funding. Our capital requirements will depend on many factors including, but not limited to, the timing of further development of assays to detect the presence of infectious disease from the blood of live animals, our hiring of additional personnel, the applications for, and receipt of, regulatory approvals for any veterinary vaccines that we may develop, and other factors. Our ability to raise capital will increase our ability to implement our business plan.
Over the next 12 months, we expect significant purchases and/or sales of plant or equipment and significant changes in the number of our employees for any off-balance sheet arrangements that will have current and future effect on our financial condition.
We also expect to spend a significant amount of our capital on research and development activities for commercialization relating to development and vaccine design/development. When we are able to develop assays for different diseases, we intend to formalize the procedure into a commercial application through a series of laboratories to be owned and operated by GeneThera. To date, we have introduced our diagnostic solution for Chronic Wasting Disease (CWD) and Mad Cow Disease on a very limited basis. We anticipate that significant funds will be spent on research and development throughout the life of the Company, as this is the source for new products to be introduced to the market. Our plan is to seek new innovations in the biotechnology field. We may be successful in developing or validating any new assays and, when we are successful in developing and validating any such assays, we may be able to successfully commercialize them or earn profits from sales of those assays. Furthermore, we may be able to design, develop, or successfully commercialize vaccines as a result of our research and development efforts.
RELATED PARTY TRANSACTIONS
The Company has an outstanding loan payable to Antonio Milici, its President and shareholder amounting to $660,869 and $645,271 as of December 31, 2015 and 2014, respectively. This outstanding loan to the Company is unsecured and has 2.14% interest bearing. During the year ended December 31, 2015, the Company has recorded interest expense on this loan in the amount of $15,598.
GTI Corporate Transfer Agents, LLC is the CompanyCapital Resources – Going Concern’3s transfer agent. Ms. Michelle Torres is the Managing Director of GTI Corporate Transfer Agents, LLC with 34% ownership and/or interest. Ms. Daisy Garcia continues to be the Board Member and Assistant Managing Director of GTI Corporate Transfer Agents, LLC with a one-third ownership and/or interest. Ms. Tannya Irizarry has a one-third ownership and/or interest.
In May 2015, the Company invested $110,000 in Galtheron Molecular Solutions AG, a Swiss entity under common control. See Note 5 of the consolidated financial statements.
1.
Setna Holdings LLC
$150,705
2.
Kalos, Holdings
86,896
3.
Tannya Irizarry
23,356
4.
Elia Holdings, LLC
7,325
Total
$268,282
The Company has amounts receivable from separate related partiespay our bills. We have had negligible revenues since inception and had an accumulated deficit of $22,492$7,926,582 and $15,331 asnegative working capital of $7,964,982as of December 31, 2015 and 2014, respectively.
RESULTS OF OPERATIONS
Year Ended December 31, 2015 Compared to Year Ended December 31, 2014
For 2015, the Company has a net loss of $1,085,471 or net loss per share of $0.03, and $0 of revenue as compared with a net loss of $546,071, or $0.02 per share, and revenue of $0 for 2014.
General and Administrative Expenses: General and administrative expenses increased to $426,898 for 2015 compared to $211,843 for 2014.
Depreciation and Amortization Expense: Depreciation and amortization expenses decreased to $0 for 2015 compared to $12,762 for 2014.
LIQUIDITY AND CAPITAL RESOURCES
We had an overdrawn checking account in the amount of $(33) as of December 31, 2015 and a cash balance of $94 as of December 31, 2014. 2018.
We will require significant additional funding in order to achieve our business plan. Specifically, we intendintent to spend significant funds on validating and testing our products, seeking necessary regulatory approvals and focusing on international expansion. Over the next 12 months, in order to have the capability of achieving our business plan, we believe that we will require at least $10,000,000.$40,000,000. We will attempt to raise these funds by means of one or more private offerings of debt or equity securities or both. We may not be able to secure the financing that we believe is necessary to implement our strategic objectives and, even if additional financing is secured, we may not achieve our strategic objectives. As of the date of this Report,report, we do not have any firm commitments from any investors for any additional funding.
available on acceptable terms and we cannot give any assurance that any additional funding that we do obtain will be sufficient to meet our needs in the long term.
CRITICAL ACCOUNTING POLICIES
Years Ended December 31, | ||
2018 | 2017 | |
| Expenses | ||
| General and administrative expenses | $529,124 | $37,704 |
| Payroll expenses | 3,397,643 | 567,996 |
| Research and development | - | |
- | ||
| Total operating expenses | 3,926,767 | 605,700 |
| Loss from operations | (3,926,767) | (605,700) |
| Other expenses | ||
| Interest expense | (117,970) | (146,623) |
| Loss on write off of vendor receivable | (39,310) | |
| Total other expense | (117,970) | (185,933) |
| Other Income | ||
| Gain on extinguishment of liabilities | - | 33,913 |
| Total other income | - | 33,913 |
| Net loss before income taxes | (4,044,738) | (757,720) |
| Provision for income taxes | - | |
| Net loss | $(4,044,738) | $(757,720) |
Years Ended December 31, | ||
2018 | 2017 | |
| Net cash used in operating activities | $(462,613) | $(97,916) |
| Net cash used in investing activities | - | (26,400) |
| Net cash provided by financing activities | 300,000 | 291,969 |
| Net (decrease) increase in cash and cash equivalents | (162,613) | 167,653 |
| Cash and cash equivalents at beginning of year | 167,653 | - |
| Cash and cash equivalents at end of year | $5,040 | $167,653 |
RECENTLY ISSUEDAnnual Report on Form 10-K, which is incorporated herein by reference.]
The Company doesAND FINANCIAL DISCLOSURE
EMPLOYEES
Asachieve their stated purpose as of December 31, 2015, we had2018, the end of the period covered by this Annual Report on Form 10-K, because of the material weaknesses described below.
Name | Age | Position | ||
| Antonio Milici | 64 | Chairman of the Board, Chief Executive Officer and Chief Scientific Officer | ||
| Tannya L. Irizarry | 60 | Chief Administrative Officer and Interim Chief Financial Officer | ||
| Jeremiah Bartley | 63 | Director |
| Name and Principal Position | Year | Salary ($) | Stock Awards ($) | Total ($) |
| Antonio Milici, Chief Executive Officer | 2018 | 258,000 | 270,000 | 5288,000 |
| 2017 | 225,000 | 90,000 | 315,000 | |
| Tannya L. Irizarry, Interim Chief Financial Officer | 2018 | 208,000 | 135,000 | 343,000 |
| 2017 | 207,996 | 45,000 | 252,996 |
RESEARCH AND DEVELOPMENT
We anticipate that R&D will be the source for both assay development and vaccine design/development. If we are able to develop assays for different diseases, we intend to formalize the procedure into a commercial application through a series of laboratories to be owned and operated by us. To date, we have introduced our diagnostic solution for Chronic Wasting Disease and Mad Cow Disease on a very limited basis. We anticipate that R&D will be ongoing during the life of the Company through January 31, 2022. Unless either party gives notice to terminate the agreement at least thirty days prior to expiration of the agreement, the agreement will automatically be extended for an additional two-year period. In consideration for her services, Ms. Irizarry receives a base salary of $208,000 per annum, plus $45,000 worth of Series B Convertible Preferred Stock in March of each year. We also agreed to pay Ms. Irizarry bonus compensation or a lump sum equal to two (2) times the salary at the time we have net income of at least $2,000,000 dollars each year based on performance. In addition, we agreed to pay a onetime payment of $18,000 at the renewal of the employment agreement. We are also required to pay all living expenses to Ms. Irizarry during the time her deferred salary is not entirely released during the term of her employment agreement. Once deferred salary is entirely released to Ms. Irizarry, she is responsible for her taxes. However, during deferred salary, we are obligated to accrue deferred tax debt in its balance sheet. Ms. Irizarry is also entitled to a leased Company vehicle of her selection. At the end of aforementioned lease, Ms. Irizarry is authorized to either purchase the vehicle and/or exchange leased vehicle for another vehicle. During fiscal years 2018 and 2017, all salary was deferred.
| Name and Address of Beneficial Owner | Amount of Beneficial Ownership(1) | Percent of Common Stock(2) | Percent of Series A Preferred Stock(3) | Percent of Series B Preferred Stock(4) | Percent of Total Voting Stock(5) | ||
| Common Stock | Series A Preferred Stock | Series B Preferred Stock | |||||
Antonio Milici (6) | 2,519,567 | 0 | 17,559,593 | 7.0% | * | 67.00% | 65.00% |
Tannya L. Irizarry (7) | 2,519,567 | 0 | 8-5478,979 | 7.0% | * | 33.00% | 31.00% |
| Jerry Bartley | 0 | 0 | 0 | 0 | * | * | * |
| GeneThera Inc. (10) | 7,064,967 | 0 | 0 | 20.0% | * | * | * |
| All directors and officers as a group (3 persons named above) | 12,104,101 | 0 | 26,038,572 | 100.00% | * | 100.00% | 96.0% |
Gold X Change, Inc. (8) | 4,003,860 | 0 | 0 | 11.0% | * | * | 1.1% |
FOGT, LLC (9) | 0 | 10,350 | 0 | 0 | 100.00 | * | * |
productsIssuance Under Equity Compensation Plans
COMMERCIAL DIAGNOSTIC TESTING
In the event that we are able to develop assays for the detection of diseases in animals, we intend to establish a series of diagnostic testing laboratories geographically proximate to the primary sources of individual diseases and/or according to specific available operating efficiencies. The specific number of labs to be built and operated will be based on assay demand (demand facilitated by the number of specific disease assays GeneThera develops), our ability to obtain the capital to build the labs, and our ability to successfully manage them from our principal office.
PROPERTIES
We have a temporary office where the automated receptionist takes our messages. Once our lab space is completed and renovated, we will move to the renovated lab and office space. It is approximately 7, 900 square feet for which 4,000 square feet will be allocated for our biotechnology laboratory space in Denver, Colorado. GTI Corporate Transfer Agents, LLC, will not be part of our new laboratory space.the Company’s transfer agent. During the years ended December 31, 2018, and 2017, the Company made payments to GTI Corporate Transfer Agents, LLC; a related party, is located at 9101 Harlan StreetLLC in Westminster, CO. the amounts of $4,170 and $227, respectively.
Year Ended December 31, | ||
2018 | 2017 | |
| Audit Fees | $55,970 | $26,250 |
| Audit-Related Fees | - | |
| Tax Fees | - | |
| All Other Accounting Fees | 20,850 | 7,500 |
| TOTAL | $76,820 | $33,750 |
Exhibit No. | Description | |
| 3.1 | Amended and Restated Articles of Incorporation of the Company | |
| 3.2 | Amended and Restated Certificate of Designation of Series A Convertible Preferred Stock of the Company | |
| 3.3 | Amended and Restated Certificate of Designation of Series B Convertible Preferred Stock of the Company | |
| 3.4 | Amended and Restated Bylaws of the Company | |
| 10.1 | Milestones Investment Agreement, dated March 15, 2018, between the Company and FOGT, LLC | |
| 10.2 | Sublease, dated January 1, 2018, between GTI Research, Inc. and GeneThera, Inc. | |
| 10.3 | Sublease Termination Agreement, effective April 29, 2019, between GTI Research, Inc. and GeneThera, Inc. | |
| 10.4 | Lab and Office Lease still pending. | |
10.5† | Employment Agreement, dated January 8, 2017, between the Company and Antonio Milici, M.D., Ph.D. | |
10.6† | Employment Agreement, dated January 8, 2017, between the Company and Tannya L. Irizarry | |
| 14.1 | Code of Conduct | |
| 24.1 | Power of Attorney (contained in the signature page to this Annual Report on Form 10-K) | |
| 101.INS | XBRL Instance Document | |
| 101.SCH | XBRL Taxonomy Extension Schema Document | |
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document7 |
ITEM 8:
STATEMENTS
| Page No. | |
| Audited Consolidated Financial Statements for the Years Ended December 31, 2018 and 2017 | F-2 |
| Report of Independent Registered Public Accounting Firm | F-3 |
| Consolidated Balance Sheets as of December 31, 2018 and 2017 | F-4 |
| Consolidated Statements of Operations for the Years Ended December 31, 2018 and 2017 | F-5 |
| Consolidated Statements of Stockholders’ Equity (Deficit) for the Years Ended December 31, 2018 and 2017 | F-6 |
| Consolidated Statements of Cash Flows for the Years Ended December 31, 2018 and 2017 | F-7 |
| Notes to Consolidated Financial Statements | F-8 |
2018 and 2017
TABLE OF CONTENTS
Consolidated Balance Sheets as of December 31, 2015 and 2014
Consolidated Statements of Operations for the years ended December 31, 2015 and 2014
Consolidated Statements of Stockholders’ Equity (Deficit) for the years ended December 31, 2015 and 2014
Consolidated Statements of Cash Flows for the years ended December 31, 2015 and 2014
Notes to Consolidated Financial Statements
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
In our opinion,
a Going Concern
|
GeneThera, Inc. - Consolidated Balance Sheets | ||||||
ASSETS | December 31, 2015 | December 31, 2014 | ||||
Current assets |
| |||||
Cash | $ | 0 | $ | 94 | ||
Receivable-related party |
| 22,492 |
| 15,330 | ||
Total current assets |
| 22,492 |
| 15,424 | ||
Property and equipment | ||||||
Office and laboratory equipment and leasehold improvements | 784,330 | 784,330 | ||||
Construction in process | 13,000 | |||||
Less: Accumulated depreciation |
| (784,330) |
| (784,330) | ||
Total property and equipment, net | 13,000 | - | ||||
Investment in Galtheron Molecular, at cost |
| 110,620 |
| - | ||
TOTAL ASSETS | $ | 146,111 | $ | 15,424 | ||
LIABILITIES & STOCKHOLDERS' DEFICIT | ||||||
Current liabilities | ||||||
Bank Overdraft | $ | 33 | $ | - | ||
Accounts payable | 925,652 | 1,245,105 | ||||
Accounts payable-related party | 268,282 | 271,858 | ||||
Accrued expenses | 3,216,564 | 2,630,069 | ||||
Settlement payable | 325,885 | - | ||||
Notes payable | 10,800 | 10,800 | ||||
Convertible notes payable, net of discount | 1,262,002 | 951,161 | ||||
Loan from shareholder |
| 660,869 |
| 645,271 | ||
Total liabilities |
| 6,670,087 |
| 5,754,264 | ||
Stockholders' deficit: | ||||||
Series A preferred stock, par value $0.001 per share, 20,000,000 | ||||||
shares authorized, 4,600 shares and 4,600 shares issued and outstanding | ||||||
as of December 31, 2015 and December 31, 2014, respectively | 5 | 5 | ||||
Series B preferred stock, par value $0.001 per share, 30,000,000 | ||||||
shares authorized, 15,410,000 and 15,410,000 shares issued and outstanding | ||||||
as of December 31, 2015 and December 31, 2014, respectively | 15,410 | 15,410 | ||||
Common stock, par value $0.001 per share, 300,000,000 | ||||||
shares authorized, 36,610,636 and 34,473,056 shares issued and | ||||||
outstanding as of December 31, 2015 and December 31, 2014, respectively | 36,612 | 34,473 | ||||
Common stock to be issued | 53,572 | |||||
Additional paid-in capital | 18,405,246 | 18,160,622 | ||||
Accumulated deficit |
| (25,034,820) |
| (23,949,350) | ||
Total stockholders' deficit of Genethera, Inc. | (6,523,976) | (5,738,840) | ||||
TOTAL LIABILITIES & STOCKHOLDERS' DEFICIT | $ | 146,111 | $ | 15,424 | ||
TheDecember 31,
2018 | 2017 | |
| ASSETS | ||
| Current assets | ||
| Cash | $5,040 | $167,653 |
| Total current assets | 5,040 | 167,563 |
| Office and laboratory equipment and leasehold improvements | 729,859 | 729,859 |
| Automobile & trucks | 26,400 | 26,400 |
| Less: Accumulated depreciation | (735,139) | (729,859) |
| Total property and equipment, net | 21,120 | 26,400 |
| Other assets - deposit | 12,000 | 12,000 |
| TOTAL ASSETS | $38,160 | $206,053 |
| LIABILITIES & STOCKHOLDERS’ DEFICIT | ||
| Current liabilities | ||
$ | ||
| Accounts payable | $776,021 | 683.678 |
- | - | |
| Accrued expenses | 5,096,781 | 4,135,810 |
| Settlement payable | - | 384,545 |
| Notes payable | 25,800 | 25,800 |
| Convertible notes payable, net of discount | 420,500 | 488,960 |
| Loan from shareholder | 770,753 | 794,327 |
| Contingency | 880,162 | 880,162 |
| Total liabilities | 7,970,017 | 7,393,281 |
| Commitments and Contingencies | - | - |
| Stockholders’ deficit: | ||
| Series A preferred stock, par value $0.001 per share, 20,000,000 shares authorized, 10,350 shares and 7,350 shares to be issued as of December 31, 2018 and December 31, 2017,6, respectively | 12 | 9 |
| Series B preferred stock, par value $0.001 per share, 30,000,000 shares authorized, 26,038,572 and 16,374,286 shares to be issued as of December 31, 2018 and December 31, 2017, respectively | 26,039 | 16,374 |
| Common stock, par value $0.001 per share, 300,000,000 shares authorized, 35,905,602 and 40,064,983 shares issued and outstanding as of December 31, 2018 and December 31, 2017, respectively | 35,904 | 40,065 |
| Common stock to be issued | 53,572 | 53,572 |
| Additional paid-in capital | 22,568,815 | 19,274,214 |
| Accumulated deficit | (30,616,199) | (26,571,461) |
Total stockholders’ deficit of GeneThera, Inc. | (7,931,857) | (7,187,228) |
TOTAL LIABILITIES & STOCKHOLDERS’ DEFICIT | $38,160 | $206,053 |
GeneThera, Inc. - Consolidated Statements of Operations | |||||||||||||||
For the Years Ended | |||||||||||||||
December 31, | |||||||||||||||
2015 | 2014 | ||||||||||||||
Expenses |
|
| |||||||||||||
General and administrative expenses | $ | 426,898 | $ | 211,843 | |||||||||||
Payroll expenses | 474,000 | 384,000 | |||||||||||||
Depreciation |
| 0 |
| 12,762 | |||||||||||
Total operating expenses |
| 900,898 |
| 608,605 | |||||||||||
Loss from operations | (900,898) | (608,605) | |||||||||||||
Other expenses | |||||||||||||||
Interest expense | (184,573) | (4,335) | |||||||||||||
Gain on disposal of debt |
| - |
| 66,869 | |||||||||||
Total other expense |
| (184,573) |
| 62,534 | |||||||||||
Net loss before income taxes | (1,085,471) | (546,071) | |||||||||||||
Provision for income taxes |
| - |
| - | |||||||||||
Net loss | $ | (1,085,471) | $ | (546,071) | |||||||||||
Loss per common share - Basic and diluted | $ | (0.03) | $ | (0.02) | |||||||||||
Weighted average common shares outstanding - | |||||||||||||||
Basic and diluted |
| 36,558,285 |
| 32,802,249 | |||||||||||
The
For the Years Ended December 31, | ||
2018 | 2017 | |
| Expenses | ||
| General and administrative expenses | $529,124 | $37,7004 |
| Payroll expenses | 3,397,643 | 567,996 |
| Total operating expenses | 3,926,767 | 605,700 |
| Loss from operations | (3,926,767) | (605,700) |
| Other expenses | ||
| Interest expense | (117,970) | (146,623) |
| Loss on write off of investment | - | |
| Loss on disposal of asset | - | |
| Loss on write off of vendor receivables | - | (39,310) |
| Loss on write off of related party receivable | - | |
| Total other expense | (117,970) | (185,933) |
| Other income | ||
| Gain on extinguishment of liabilities | - | 33,913 |
| Total other income | - | 33,913 |
| Net loss before income taxes | (4,044,738) | (757,720) |
| Provision for income taxes | - | - |
| Net loss | $(4,044,738) | $(757,720) |
| Loss per common share - basic and diluted | $(0.11) | $(0.02) |
| Weighted average common shares outstanding - basic and diluted | 38,197,887 | 40,064,983 |
Genethera, Inc. | ||||||||||
Consolidated Statement of Changes in Stockholders' Deficit | ||||||||||
Additional | Total | |||||||||
Series A Preferred Stock | Series B Preferred Stock | Common Stock | Paid-in | Accumulated | Stock to | Stockholders' | ||||
Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | be issued | Deficit | |
Balance at December 31,2013 | 4,600 | 5 | 15,410,000 | 15,410 | 31,481,590 | 31,481 | 8,073,871 | (23,403,279) | - | (5,282,512) |
Shares issued for debt | 2791466 | 2792 | 80951 | 83,743 | ||||||
Shares issued for services | 200000 | 200 | 5800 | 6,000 | ||||||
Net Loss | (546,071) | (546,071) | ||||||||
Balance at December 31, 2014 | 4,600 | 5 | 15,410,000 | 15,410 | 34,473,056 | 34,473 | 18,160,622 | (23,949,350) | - | (5,738,840) |
Shares issued for debt | 515,133 | 515 | 14,939 | 53,572 | 69,026 | |||||
Shares issued for services | 1,122,447 | 1,122 | 53,878 | 55,000 | ||||||
Stock issued for construction services | 1,300,000 | 1,300 | 24,700 | 26,000 | ||||||
Stock rescinded for non-performance of services | (1,300,000) | (1,300) | (24,700) | (26,000) | ||||||
Stock issued for consulting services | 500,000 | 500 | 24,500 | 25,000 | ||||||
Beneficial conversion of convertible debt | 151,307 | 151,307 | ||||||||
Net Loss | (1,085,471) | (1,085,471) | ||||||||
Balance at December 31, 2015 | 4,600 | $ 5 | 15,410,000 | $ 15,410 | 36,610,636 | $ 36,610 | $18,405,246 | $(25,034,821) | $ 53,572 | $ (6,523,977) |
The accompanying notes are an integral part of these audited financial statements.
GeneThera, Inc. - Consolidated Statements of Cash Flows | ||||
For the Years Ended | ||||
December 31, | ||||
2015 |
| 2014 | ||
Cash flows from operating activities | ||||
Net loss | $ | (1,085,471) | (546,071) | |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Stock-based compensation | 300,336 | - | ||
Depreciation and amortization | - | 12,762 | ||
Shares issued for services | - | 6,000 | ||
Changes in operating assets and liabilities: | ||||
|
| |||
Accounts receivable - related parties | (7,162) | (330) | ||
Accounts payable and accrued expenses - related parties | 598,517 | - | ||
Accounts payable and accrued expenses | 6,464 | 395,696 | ||
Prepaids and other assets | - | 7,000 | ||
Net cash used in operating activities | (187,316) | (124,943) | ||
Cash flows from investing activities | ||||
Purchase of constuction in process | (13,000) | |||
Investment in Galtheron Molecular Solutions | (110,620) | - | ||
Net cash used in investing activities | (123,620) | - | ||
Cash flows from financing activities | ||||
Net advance from related parties | 310,841 | 123,706 | ||
Net cash provided by financing activities | 310,841 | 123,706 | ||
Net effect of exchange rates change | - | - | ||
Net decrease in cash | (94) | (1,237) | ||
Cash at the beginning of the year | 94 |
| 1,331 | |
Cash at the end of the year | (0) | �� 94 | ||
Supplemental disclosures of cash flow information: | - | |||
Cash paid for interest | $ - | $ | $ - | |
Cash paid for income taxes | $ - | $ | $ - | |
Non-cash investing and financing transactions: | ||||
Equipment purchased by third party | - | |||
Conversion of convertible notes payable to common stock | 53,573 | 83,743 | ||
Convertible note proceeds received by related party | 417,960 | 139,500 | ||
The accompanying notes are an integral part of these audited financial statements.
GENETHERA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 20152018 and 2014
Series A Preferred Stock | Series B Preferred Stock | Common Stock | ||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Additional Paid-In Capital | Accumulated Deficit | Stock to be Issued | Total | |
| Balance at December 31, 2016 | 4,600 | $5 | 15,410,000 | $15,410 | 40,064,983 | $40,065 | $18,583,242 | $(25,813,741) | $53,572 | $(7,121,447) |
| Preferred Stock to be issued | 250 | 1 | - | - | - | - | 24,999 | - | - | 25,000 |
| Preferred Stock to be issued | 2,500 | 3 | - | - | - | - | 249,997 | - | - | 250,000 |
| Stock issued for officer wages | - | - | 964,286 | 964 | - | - | 134,036 | - | - | 135,000 |
| Adjustment to PIC | - | - | - | - | - | - | 25,000 | - | - | 25,000 |
| Related party liability extinguished | - | - | - | - | - | - | 256,940 | - | - | 256,940 |
| Net Loss | - | - | - | - | - | - | - | (757,720) | - | (757,720) |
| Balance at December 31, 2017 | 7,350 | $9 | 16,374,286 | $16,374 | 40,064,983 | $40,065 | $19,274,214 | $(26,571,461) | $53,572 | $(7,187,227) |
| Preferred Stock to be issued | - | - | - | - | - | - | ||||
| Preferred Stock to be issued | 3,000 | 3 | - | - | - | - | 299,997 | - | - | 300,000 |
| Stock to be issued for officer wages | - | - | 9,664,286 | 9,664 | - | - | 2,621,979 | - | - | 2,931,643 |
| Cancelation of common stock | (4,662,351) | (4,662) | 4.662 | - | - | |||||
| Stock issued for convertible debt | 500,000 | 500 | 9,500 | - | 10,000 | |||||
| Stock to be issued for convertible debt | - | 58,460 | 58,460 | |||||||
| Adjustment to PIC | - | - | - | 1 | (30) | 1 | 3 | - | - | 5 |
| Net Loss | - | - | - | - | - | - | - | (4,044,738) | - | (4,044,738) |
| Balance at December 31, 2018 | 10,350 | $12 | 26,038,572 | $26,039 | 35,902,602 | $35,904 | $20,042,172 | $(28,089,556) | $53,572 | $(7,931,857) |
For the Years Ended December 31, | ||
2018 | 2017 | |
| Cash flows from operating activities | ||
| Net loss | $(4,044,738) | $(757,720) |
| Adjustments to reconcile net loss to net cash used in operating activities: | ||
| Stock-based compensation | 2,931,643 | 135,000 |
| Depreciation expense | 5,280 | - |
| Shares issued for services | - | - |
| Extinguishment of liabilities | - | (33,913) |
| Loss on abandonment | - | - |
| Loss on investment | - | - |
| Loss on write off of vendor receivables | - | 39,310 |
| Changes in operating assets and liabilities: | ||
| Deposit | - | (12,000) |
| Accounts receivable - related parties | - | - |
| Accounts payable and accrued expenses - related parties | (23,573) | 20,052 |
| Accounts payable and accrued expenses | 668,776 | 511,355 |
| Convertible notes payable | - | - |
| Net cash used in operating activities | (462,613) | (97,916) |
| Cash flows from investing activities | ||
| Purchase of fixed asset | - | (26,400) |
| Net cash used in investing activities | - | (26,400) |
| Cash flows from financing activities | ||
| Proceeds from issuance of stock | 300,000 | 275,000 |
- | - | |
| Proceeds from notes payable | - | 15,000 |
| Net advance from related parties | - | 1,969 |
| Net cash provided by financing activities | 300,000 | 291,969 |
| Net (decrease) increase in cash | (162,613) | 167,653 |
| Cash at the beginning of the year | 167,653, | - |
| Cash at the end of the year | $5,040 | $167,653 |
| Supplemental disclosures of cash flow information: | ||
| Cash paid for interest | $- | $- |
| Cash paid for income taxes | $- | $- |
| Non-cash investing and financing transactions: | ||
| Conversion of convertible notes payable to common stock | $(68,460) | $- ) |
| Cancellation of common stock shares | $4,662 | $- |
Operations Estimates Certain prior period amounts in the consolidated financial statements and accompanying notes have been reclassified to conform to the current period’s presentation. Cash Equivalents less. Consolidation Long-Lived Assets 2017. Taxes Common Share average number of common shares outstanding during the period. Diluted Financial Instruments Issued Accounting Pronouncements the Company’s operating lease which commenced in 2018. Property and Equipment December 31, 2015 December 31, 2014 Furniture & Fixtures 1,465 1,465 Machinery & Equipment 775,864 775,864 Software 7,000 7,000 Construction in Process 13,000 - Less: Accumulated Depreciation (784,329) (784,329) Property and Equipment, net 13,000 -Note 1 – Organization, Nature of Operations and Summary of Significant Accounting PoliciesOrganization and natureNature of operations and summary of significant accounting policiesOrganization and nature of operationsThe consolidated financial statements include GeneThera, Inc., a Nevada Corporation and its wholly owned subsidiary GeneThera, Inc. (Colorado) (collectively, “GeneThera” or the “Company)“Company”). GeneTheraThe Company has a long-standing research collaboration with GTI Research. GTI Research is assisting the Company in managing the robotic technology project. The Company’s CEO is also collaborating with this project in order for the Company’s research and development to finally become commercial in order to generate revenues.The Company is a biotechnology company that develops molecular assays for the detection of food contaminating pathogens, veterinary diseases and genetically modified organisms. The Company has not commenced sales, as yet, but only participates research and development of its products, and is solely dependent on outside financing.Use of estimatesThe preparation of financial statements in accordance with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.Cash and cash equivalents Cash equivalents are highly liquid investments with an original maturity of three months or less.Principles of consolidationThe consolidated financial statements include the accounts of the Company, and itsit is a controlled subsidiary. All intercompanyIntercompany accounts are eliminated upon consolidation.Property and Equipment, NetProperty and equipment netProperty and equipment consistsconsist primarily of office and laboratory equipment and leasehold improvements and is stated at cost. Depreciation is computed on a straight-line basis over the estimated useful lives ranging from five to seven years. Leasehold improvements are amortized over the shorter of their economic lives or lease terms.Impairment of long-lived assetsThe Company reviews the recoverability of its long-lived assets to determine whether events or changes in circumstances occurred that indicate the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on the ability to recover the carrying value of the asset from the expected future cash flows of the related operations. If these cash flows are less than the carrying value of such asset, an impairment loss is recognized for the difference between the estimated fair value and carrying value. The measurement of impairment requires management to make estimates of these cash flows related to long-lived assets, as well as other fair value determinations.Revenue recognitionResearch and development contracts are on a pre-paid basis in order to reflect milestones during research investigation. Revenues are recognized when services are completed. RecognitionThere were no revenues during the years ended December 31, 20152018 and 2014.Stock-Based CompensationStock-based compensation is accounted for under FASB ASC Topic No. 718 – –Compensation – Stock Compensation. The guidance requires recognition in the financial statements of the cost of employee services received in exchange for an award of equity instruments over the period the employee is required to perform the services in exchange for the award (presumptively the vesting period). The guidance also requires measurement of the cost of employee services received in exchange for an award based on the grant-date fair value of the award. The Company accounts for non-employee share-based awards in accordance with guidance related to equity instruments that are issued to other than employees for acquisition, or in conjunction with selling, goods or services.Income taxesIncome taxes are accounted for in accordance with the provisions of FASB ASC Topic No. 740 - Income Taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amounts expected to be realized.Basic and diluted net lossDiluted Net Loss per common shareBasic and diluted net loss per share calculations are presented in accordance with FASB ASC Topic No. 260 – –Earnings per Share, and are calculated on the basis of the weighted net loss per share calculations includes the dilutive effect of common stock equivalents in years with net income. Basic and dilutedAs the Company is in a loss position, any calculation of the dilutive effects of the Company’s convertible securities would reduce the loss per share isamount, and, as such, the same due toCompany will not perform the absencecalculation.Fair Value of common stock equivalents.Fair value of financial instrumentsThe carrying value of cash, accounts payable, and accrued expenses and notes payable approximates fair value due to the shortshort- term nature of these accounts.Recently issued accounting pronouncementsAccounting for Leases.In February 2016, the FASB amended the FASB Accounting Standards Codification and created a new Topic 842, Leases (the “New Lease Standard”). The guidance requires lessees to recognize a right-of-use asset and a lease liability for all leases (with the exception of short-term leases) at the commencement date and recognize expenses on their income statements similar to the current Topic 840, Leases. The New Lease Standard is effective for fiscal years and interim periods beginning after December 15, 2018. The Company doeswill adopt this standard effective January 1, 2019. The Company has not expectfinalized its assessment but believes this standard will have a significant impact on the adoption of any recently issued accounting pronouncementsCompany’s consolidated balance sheet. The standard is not expected to have a significant effectmaterial impact on its consolidated financial position orthe Company’s results of operations. operations or cash flows.The folowing are being evaluatedprimary effect of adopting the New Lease Standard will be to record an asset and obligation for any potential impact:2015-14 Revenue from contracts with customers2015-03 Presentations of Debt issuance costs2015-17 Deferred Tax Presentation2016-02 LeasesNote 2-2 – Going ConcernAs reflected in the accompanying consolidated financial statements, the Company has an accumulated deficit of $25,034,821$30,616,199 and negative working capital of $6,477,341$7,964,977 as of December 31, 2015.2018. This raises substantial doubt about the Company’sCompany’s ability to continue as a going concern. The Company’sCompany’s ability to continue as a going concern is dependent on its ability to raise additional capital and implement its business plan. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.Management believes that actions presently being taken to obtain additional funding and implement its strategic plans provide the opportunity for the Company to continue as a going concern.Note 3 - Property and EquipmentThe company’s property and equipment at December 31, 2015 and 2014 consisted of furniture, lab equipment, and computer software. Depreciation expense was $ -0- and $12,762 for the years ended December 31, 2015 and 2014, respectively. Expenditures for repairs and maintenance are expensed as incurred.As of December 31, 2015, the Company had construction in progress in the amount of $13,000 related to renovation of its lab space, and has not completed the work as of that date. Note 3 – Accrued ExpensesThe following is the breakdown of the Company’s accrued expenses as of December 31, 2018 and 2017: 2018 2017 Accrued officer salaries $4,473,415 $4,007,415 Accrued interest 164,313 112,546 Accrued expenses- other 459,053 15,849 Total accrued expenses $5,096,781 $4,135,810
Party Transactions $37,721. The Company has 2015 2014 Accrued officer salaries (see below) $ 2,943,904 $ 2,514,904 Accrued interest 31,282 8,734 Other 241,378 106,431 $ 3,216,564 $ 2,630,069 escrow agent. Under the terms of the Note 4 – Related party transactionsThe Company has an outstanding loan payable including interest, to Antonio Milici, its CEO and shareholderstockholder amounting to $660,869$673,092 and $645,271$693,155 as of December 31, 20152018 and 2014,2017, respectively. This outstanding loan to the Company is unsecured and bears interest at 2.41%. The Company has an outstanding loan payable to Tannya Irizarry, its COO and stockholder, amounting to $90,523 and $101,172 as December 31, 2018 and 2017, respectively. This outstanding loan to the Company is unsecured and bears interest at 8%.Tannya Irizarry owns one-third of GTI Corporate Transfer Agents, LLC, the Company’s transfer agent. During the years ended December 31, 2018 and 2017, the Company made payments to GTI Corporate Transfer Agents, LLC in the amounts of $4,170 and $477, respectively.During 2018, the Company paid $12,245 to Elia Holdings, LLC, which entity is controlled by Ms. Irizarry’s ex-husband. Elia Holdings, LLC also converted $14,980 of convertible notes into shares of common stock at a conversion price of $.03 per year. share.For the year ended December 31, 2018 the Company paid $244,624 to GTI Research Inc. for rent, scientific license agreement and for other expenses incurred by GTI Research Inc. The Chairman of the Company signed for the lease on the laboratory facility.On January 1, 2018, the Company entered into a sublease for a 7,990 square foot office and lab space on 6860 Broadway in Denver, Colorado 80221, with GTI Research, Inc. a related party, the Company’s scientific robotic technology collaborator, for 75 months. GTI Research, Inc. a related party, required payment of $12,000 security deposit in December of 2017. Monthly base rents per square foot under this lease are as follows:Period Monthly Base Rent 01/01/18 – 03/31/18 $0.00/SF 04/01/18 – 03/31/19 $9.00/SF 04/01/19 – 03/31/20 $10.00/SF 04/01/20 – 03/31/21 $11.00/SF 04/01/21 – 03/31/22 $12.00/SF 04/01/22 – 03/31/23 $13.00/SF 04/01/23 – 03/31/24 $14.00/SF In addition to the foregoing, the Company is required to pay its proportionate share of all real estate taxes, building insurance and maintenance costs.The lease terminated on April 29, 2019. No right of use asset and corresponding liability were included in the Balance Sheet.Note 5 – Extinguishment of DebtThe Company has written off $33,913 from accounts payable for a gain on extinguishment of liabilities in 2017.Note 6 – Convertible Notes PayableIn previous years the Company borrowed additional money from investors and issued convertible notes, due on demand, bearing interest at an annual rate of 8%. The notes are convertible into shares of Company common stock at a conversion price of $0.01 to $0.05 per share. As December 31, 2018 and 2017, the outstanding principal and interest on these notes was $420,500 and $488,960, respectively.The following is a list of notes that were converted during 2018.On April 18, 2018, Brook Zarecki IRA (Mid South Retirement Srvcs) converted an aggregate of $3,000 of convertible notes into shares of the Company’s common stock, at a conversion price of $0.015.On April 18, 2018, Nichole Zarecki (Mid South Retirement Srvcs) converted an aggregate of $7,000 of convertible notes into shares of the Company’s common stock, at a conversion price of $0.015.On April 18, 2018, Parker Zarecki (Mid South Retirement Srvcs) converted an aggregate of $3,000 of convertible notes into shares of the Company’s common stock, at a conversion price of $0.015.On April 18, 2018, Sierra Zarecki (Mid South Retirement Srvcs) converted an aggregate of $3,000 of convertible notes into shares of the Company’s common stock, at a conversion price of $0.015.On April 24, 2018, Patrick McClure converted an aggregate of $1,500 of convertible notes into shares of the Company’s common stock, at a conversion price of $0.020.On October 25, 2018, Daniel M. Price converted an aggregate of $20,000 of convertible notes into shares of the Company’s common stock, at a conversion price of $0.02.On November 13, 2018, Elia Holdings, LLC converted $14,980 of convertible notes into shares of the Company’s common stock, at a conversion price of $0.03.On November 13, 2018, Anthos Holdings, LLC converted $15,980 of convertible notes into shares of the Company’s common stock, at a conversion price of $0.03.On December 3, 2018, Daniel M. Price was issued 500,000 shares of common stock for 6ne-half of his total convertible notes.Note 7- Stockholders’ EquityConvertible preferred stock rightsPreferred Stock (‘Series A’) shall be convertible into Common Stock any time at the holder’s sole discretion in part or in whole by dividing the Purchase Price per Share by 110% of the Market Value on the Closing Date. ‘Market Value’ on any given date shall be defined as the average of the lowest three intra-day trading prices of the Company’s common stock during the 15 immediately preceding trading days. The Company is disputing the convertibility of these preferred shares.Preferred Stock (“Series B”) shall be convertible into ten common shares at any time and holders are entitled to 20 common share votes per such preferred share.Preferred StockThe Company has authorized 30,000,000 shares of Series A Preferred Stock, $.001 par value, and 20,000,000 shares of Series B Preferred Stock, $.001 par value.As of December 31, 2018, the Company had agreed to issue 10,350 shares of Series A Preferred Stock, but no shares were issued and outstanding.As of December 31, 2018, the Company had agreed to issue 26,03,572shares of Series B Preferred Stock, but no shares were issued and outstanding.Common StockThe Company has authorized 300,000,000 shares of common stock, $.001 par value. As of December 31, 2018 and 2017, there were 35,905,602 and 40,064,983 shares of common stock issued and outstanding, respectively.As of December 31, 2016, an additional 1,783,332 shares valued at $53,572 were yet to be issued pursuant to convertible notes payable that were converted. The common shares to be issued are disclosed separately on the Balance Sheet.Paid in CapitalDuring the year ended December 31, 2015,2017, the Company adjusted paid in capital of $25,000 from accounts payable for funds received from a stock transaction for which the shares have been issued.During the same period, the Company had a gain on extinguishment of $256,940 for the write-off of a liability previously recorded in accounts payable-related party from a company controlled by a family member of CEO that had been forgiven through the operation of law through the voluntary dissolution of the creditor’s legal entity.Designation of Series A Convertible Preferred StockOn August 29, 2018, the Company filed a certificate of designation (the “Series A Certificate of Designation”) with the Nevada Secretary of State to set forth the terms of the Series A Convertible Preferred Stock. Pursuant to the Series A Certificate of Designation, the Company designated 20,000,000 shares of its preferred stock as Series A Convertible Preferred Stock. Following is a summary of the material terms of the Series A Convertible Preferred Stock:●Dividends. Holders of shares of Series A Convertible Preferred Stock are not entitled to dividends.●Liquidation. Upon any dissolution or winding up of the Company, whether voluntary or involuntary (a “Liquidation”), holders of Series A Convertible Preferred Stock shall be entitled to receive out of the assets of the Company, before any distribution of assets is made to holders of any other class of capital stock of the Company, an amount equal to $100 per share (the “Series A Liquidation Preference”). If upon any Liquidation the amounts payable with respect to the Series A Convertible Preferred Stock and any other shares of stock of the Company ranking as to any such distribution on parity with the Series A Convertible Preferred Stock are not paid in full, the holders of Series A Convertible Preferred Stock and of such other shares shall share ratably in any such distribution in proportion to the full respective preferential amounts to which they are entitled. After the payment of the Series A Liquidation Preference shall have been made in full to the holders of the Series A Convertible Preferred Stock, the remaining assets of the Company legally available for distribution to its stockholders shall be distributed among the holders of any junior capital stock that has a liquidation preference senior to holders of common stock, and after such holders have received in full their liquidation preference, the remaining amounts shall be distributed among the holders of the Series A Convertible Preferred Stock and the common stock, collectively, as one class.●Voting. On any matter presented to stockholders for their action or consideration, each holder of Series A Convertible Preferred Stock shall be entitled to cast the number of votes equal to the number of shares of common stock into which the shares of Series A Convertible Preferred Stock held by such holder are convertible as of the record date for determining stockholders entitled to vote on such matter. Except as provided by law or by the other provisions of the Series A Certificate of Designation, the holders shall vote together with the holders of shares of common stock as a single class. However, so long as at least 50% of the shares of Series A Convertible Preferred Stock originally issued remains outstanding, the Company may not, without the affirmative vote or the written consent of the holders of at least 51% of the then outstanding shares of Series A Convertible Preferred Stock, voting separately as a class, (i) create, authorize or issue any equity security, or any security convertible into or exercisable for any equity security, unless such security is junior to the Series A Convertible Preferred Stock, in terms of dividend and liquidation preference; or (ii) increase the total number of authorized shares of Series A Convertible Preferred Stock.●Conversion. Each holder of shares of Series A Convertible Preferred Stock may, at holder’s option and at any time, convert any or all such shares into shares of common stock. The number of shares of common stock into which each share of Series A Convertible Preferred Stock may be converted (the “Conversion Rate”) shall be determined according to the terms of a stock purchase agreement between the Company and the holder. In addition, each share of Series A Convertible Preferred Stock shall automatically convert into shares of common stock, at the then applicable Conversion Rate, upon the earlier of (i) the closing of a public offering of equity or equity equivalent securities resulting in minimum gross proceeds to the Company of $20 million and (ii) upon the Company’s common stock trading at or above $6.00 per share for 20 out of 30 consecutive trading days; provided that prior to the event specified by (ii) above, the Company shall have (y) an effective registration statement on file with the SEC registering the resale of the common stock issuable upon conversion of the Series A Convertible Preferred Stock and (ii) obtained the approval for listing the common stock on any national securities exchange. The Conversion Rate is subject to customary adjustments as described in the Series A Certificate of Designation.●Redemption.The Series A Convertible Preferred Stock is not redeemable.The Company has entered in a stock purchase agreement with the holder of the Series A Convertible Preferred Stock, FOGT, LLC, pursuant which the parties agreed on the conversion rate of 400 shares of common stock for each share of Series A Convertible Preferred Stock.Designation of Series B Convertible Preferred StockOn August 29, 2018, the Company filed a certificate of designation (the “Series B Certificate of Designation”) with the Nevada Secretary of State to set forth the terms of the Series B Convertible Preferred Stock. Pursuant to the Series B Certificate of Designation, the Company designated 30,000,000 shares of its preferred stock as Series B Convertible Preferred Stock. Following is a summary of the material terms of the Series B Convertible Preferred Stock:●Dividends. Holders of shares of Series B Convertible Preferred Stock are not entitled to dividends.●Liquidation. Upon any Liquidation, holders of Series B Convertible Preferred Stock shall be entitled to receive out of the assets of the Company, before any distribution of assets is made to holders of any other class of capital stock of the Company, an amount equal to $100 per share (the “Series B Liquidation Preference”). If upon any Liquidation the amounts payable with respect to the Series B Convertible Preferred Stock and any other shares of stock of the Company ranking as to any such distribution on parity with the Series B Convertible Preferred Stock are not paid in full, the holders of Series B Convertible Preferred Stock and of such other shares shall share ratably in any such distribution in proportion to the full respective preferential amounts to which they are entitled. After the payment of the Series B Liquidation Preference shall have been made in full to the holders of the Series B Convertible Preferred Stock, the remaining assets of the Company legally available for distribution to its stockholders shall be distributed among the holders of any junior capital stock that has a liquidation preference senior to holders of common stock, and after such holders have received in full their liquidation preference, the remaining amounts shall be distributed among the holders of the Series B Convertible Preferred Stock and the common stock, collectively, as one class.●Voting. On any matter presented to stockholders for their action or consideration, each holder of Series A Convertible Preferred Stock shall be entitled to cast 20 votes per share. Except as provided by law or by the other provisions of the Series B Certificate of Designation, the holders shall vote together with the holders of shares of common stock as a single class. However, so long as at least 50% of the shares of Series B Convertible Preferred Stock originally issued remains outstanding, the Company may not, without the affirmative vote or the written consent of the holders of at least 51% of the then outstanding shares of Series B Convertible Preferred Stock, voting separately as a class, (i) create, authorize or issue any equity security, or any security convertible into or exercisable for any equity security, unless such security is junior to the Series B Convertible Preferred Stock, in terms of dividend and liquidation preference; or (ii) increase the total number of authorized shares of Series B Convertible Preferred Stock.●Conversion. Each holder of shares of Series B Convertible Preferred Stock may, at holder’s option and at any time, convert any or all such shares into shares of common stock. The number of shares of common stock into which each share of Series B Convertible Preferred Stock may be converted is ten shares of common stock for each share of Series B Convertible Preferred Stock.●Redemption.The Series B Convertible Preferred Stock is not redeemable.Note 8 – Commitments and ContingenciesEmployment AgreementsOn January 8, 2017, the Company entered into an employment agreement with Antonio Milici, its chief executive officer and chief scientific officer, for a five year term. On the same date, the Company also entered into an employment agreement with Tannya L. Irizarry, its chief administrative officer and interim chief financial officer, for a five year term.The Company agreed to pay Dr. Milici a base salary of $258,000 per annum, plus $90,000 worth of Series B Convertible Preferred Stock in March of each year. The Company also agreed to pay Dr. Milici bonus compensation or a lump sum equal to two (2) times the salary at the time the Company has recorded interest expensenet income of at least two million ($2,000,000) dollars each year based on performance. In addition, the Company agreed to pay a onetime payment of $26,900 at the renewal of the employment agreement. The Company is also required to pay all living expenses to Dr. Milici during the time his deferred salary is not entirely released during the term of his employment agreement. Once deferred salary is entirely released to Dr. Milici, he is responsible for his taxes. Dr. Milici is also entitled to a leased Company vehicle of his selection. At the end of aforementioned lease, Dr. Milici is authorized to either purchase the vehicle and/or exchange leased vehicle for another vehicle. For the fiscal years 2018 and 2017, all salary was deferred and no shares of Series B Convertible Preferred Stock were issued.The Company agreed to pay Ms. Irizarry a base salary of $208,000 per annum, plus $45,000 worth of Series B Convertible Preferred Stock in March of each year. The Company also agreed to pay Ms. Irizarry bonus compensation or a lump sum equal to two (2) times the salary at the time the Company has net income of at least two million ($2,000,000) dollars each year based on performance. In addition, the Company agreed to pay a onetime payment of $18,000 at the renewal of the employment agreement. The Company is also required to pay all living expenses to Ms. Irizarry during the time her deferred salary is not entirely released during the term of her employment agreement. Once deferred salary is entirely released to Ms. Irizarry, she is responsible for her taxes. Ms. Irizarry is also entitled to a leased Company vehicle of her selection. At the end of aforementioned Lease, Ms. Irizarry is authorized to either purchase the vehicle and/or exchange leased vehicle for another vehicle. For the fiscal years 2018 and 2017, all salary was deferred and no shares of Series B Convertible Preferred Stock were issued.Legal ContingenciesThe Company is involved in claims arising during the ordinary course of business resulting from disputes with vendors and stockholders over various contracts and agreements. Other than those outstanding judgments listed below, no other legal claims have been made or are known at this loantime.On June 6, 2008, a judgment was issued against the Company in the case of MAG Capital, LLC aka Mercator Momentum Fund III LP, Mercator Momentum Fund, LP and Monarch Pointe Fund, Ltd. v. the Company in the Orange County District Court in the State of California in the amount of $15,598.In May 2015, the Company invested $110,620 in Galtheron Molecular Solutions AG, a Swiss entity under common control. See Note 5 below.As of December 31, 2015, the Company has the following outstanding liabilities due to related parties:.Setna Holdings LLC$150,705.Kalos, Holdings 86,896.Tannya Irizarry 23,356.Elia Holdings, LLC 7,325Total$268,282As of December 31, 2015, the balance due to these same related parties was $271,858amounts receivable from separate related parties of $22,492 and $15,331 as of December 31, 2015 and 2014, respectively.During twelve months ended December 31, 2015,not satisfied the judgment.On February 10, 2009, a judgment was issued against the Company in the case of Centennial Credit Corporation v. the Company Jefferson County District Court in the State of Colorado in the amount of $967. The Company has not satisfied the judgment.In June 2009, a judgment was issued $417,960against the Company in the case of James Tufts v. the Company in the Small Claims Court in Jefferson County Colorado in the amount of $4,000 plus expenses from a London trip. The Company has not satisfied the judgment.On June 26, 2009, a judgment was issued against the Company in the case of Enterprise Leasing Company of Denver v. the Company in the Jefferson County District Court in the State of Colorado in the amount of $78,178. The Company has not satisfied the judgment.On August 17, 2010, a judgment was issued against the Company in the case of Banc of America Leasing v. the Company in the Oakland County District in Troy, Michigan in the amount of $24,183. The Company has not satisfied the judgment.On September 23, 2010, a judgment was issued against the Company in the case of Liberty Acquisitions v. the Company in the Jefferson County Court in the State of Colorado in the amount of $3,300. The Company has not satisfied the judgment.Beginning in November 2010 and through July 2011, Gold X Change, Inc. (“GXC”) invested approximately $132,000 in the aggregate in the Company’s convertible promissory notes (see Note 7). The proceeds from these notes were managed bynotes. In July 2011, a subsidiarydispute arose between the Company and GXC as to the number of Setna Holdings, a related party, in exchange for a handling fees of ten percentshares issuable upon conversion of the gross proceeds.Note 5 – InvestmentsDuring May 2015,convertible notes. In order to resolve this dispute, the Company invested $110,620 in Galtheron Molecular Solutions (“GMS”),and GXC agreed to issue a Swiss entity in exchange for 100,,000total of 24 million shares of itsthe Company’s common stock and is evaluated as a const-method investment. The Company is planning on enteringin the name of GXC; provided that GXC deposit such shares into a licensing agreementan escrow account with GMS as noted in Note 12 and, contingent upon GMS’ hiring of qualifiedpersonnel and development of an operating plan, will look to develop a long-term relationship. The Company evaluated this investment for impairment and due to the ongoing negotiations for a licensing agreement (see Note 12) there was no impairment recorded as of December 31, 2015. This investment will be re-evaluated at year end, December 31, 2016 to see if an impairment is needed, unless the licensing agreement is reached impairment will be likely.Note 6 – Accrued expensesThe Company’s accrued expenses consisted of the following as of December 31:employment agreements betweenescrow agreement, these shares would only be released to GXC if GXC invested an additional $1 million into the Company within one year, which ended on September 30, 2012. During the one year period, GXC only invested $880,162. As a result of GXC’s failure to invest the full $1 million within the one year time period as required by the escrow agreement, GXC was in default under the escrow agreement and its CEO and CFO, which run through January 2017, compensation is accrued at a combined rate of $32,000 per month. No cash compensation wasthe 24 million shares were cancelled. The $880,162 paid by GXC to the officersCompany was deemed to be the cost of the 1,189,300 shares of the Company’s common stock that was already held by GXC.Milestones Investment AgreementIn March 2018, we entered into a Milestones Investment Agreement with FOGT, LLC (in part controlled by a former member of the Board of Directors), pursuant to which FOGT, LLC had agreed to invest and purchase up to $5 million of Series A Convertible Preferred Stock pending completion of certain milestones. As of December 31, 2018, FOGT, LLC has invested $550,000 and we agreed to issue 5,500 shares of Series A Convertible Preferred Stock. FOGT, LLC had agreed to invest additional amounts as follows: (i) $1,500,000 upon completion of design, assembly and validation of an advanced robotic system; and (ii) $1,750,000 upon entering into a commercial agreement with a government organization or private entity. A dispute arose between FOGT, LLC and the Company. As a result, FOGT, LLC ceased further investments in 2015 or 2014; salaries totaling $384,000 were added to accrued liabilitiesthe Company. (The dispute is described in both 2015the “Legal Proceedings” Section of this Form 10-K.)Lease AgreementOn January 1, 2018, the Company entered into a sublease for a 7,990 square foot office and 2014. lab space on 6860 Broadway in Denver, Colorado 80221, with GTI Research, Inc. a related party, the Company’s scientific robotic technology collaborator, for 75 months. GTI Research, Inc. a related party, required payment of $12,000 security deposit in December of 2017. Monthly base rents per square foot under this lease are as follows:Period Monthly Base Rent 01/01/18 – 03/31/18 $0.00/SF 04/01/18 – 03/31/19 $9.00/SF 04/01/19 – 03/31/20 $10.00/SF 04/01/20 – 03/31/21 $11.00/SF 04/01/21 – 03/31/22 $12.00/SF 04/01/22 – 03/31/23 $13.00/SF 04/01/23 – 03/31/24 $14.00/SF In addition weto the foregoing, the Company is required to pay its proportionate share of all real estate taxes, building insurance and maintenance costs.The lease was terminated on April 29, 2019. No right of use asset or the corresponding lease liability was recorded on the books.Note 9 – Income TaxesThe Company has federal net operating loss carryforwards totaling $13,720,449 and 12,612,634 at December 31, 2018 and 2017, respectively. Subject to certain limitations (including limitations under Section 382 of the Internal Revenue Code), the carryforwards are available to offset future taxable income through 2036. The amount of change in the deferred tax asset and the related valuation allowance was approximately $342,324 during the year ending December 31, 2018, compared to approximately $357,468 in the year ending December 31, 2017.Net deferred tax assets consist of the following components as of December 31: 2018 2017 Deferred Tax Assets: NOL Carryover $6,104,912 $3,232,618 Deferred tax liabilities Less valuation allowance (6,104,912) (3,232,618)Net deferred tax assets $- $- The income tax provision differs from the amount of income tax determined by applying the U.S federal income tax rate to pretax income from continuing operations for the period ended December 31, due to the following: 2018 2017 Book loss $260,991 $265,202 State loss 34,524 35,082 Valuation allowance (295,515) (300,284) $- $- On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act of 2017 (the “Tax Act”). The Tax Act makes broad and complex changes to the U.S. tax code, including, but not limited to, reducing the U.S. federal corporate tax rate from 35 percent to 21 percent; eliminating the corporate Alternative Minimum Tax and changing how existing Alternative Minimum Tax credits can be realized; creating a new limitation on deductible interest expense; changing rules related to uses and limitations of net operating loss carryforwards created in tax years beginning after December 31, 2017; and changing limitations on the deductibility of certain executive compensation.In December 2017, the SEC issued our CFO, $45,000 worthStaff Accounting Bulletin No. 118 (“SAB 118”), which addresses situations where the accounting is incomplete for the income tax effects of our restricted common stock,the Act. SAB 118 directs taxpayers to consider the impact of the act as “provisional” when the Company does not have the necessary information available, prepared or analyzed (including computations) to finalize the accounting for the change in tax law. Companies are provided a measurement period of up to one year to obtain, prepare, and accrued stock based compensation worth 45,000.analyze information necessary to finalize the accounting for provisional amounts or amounts that cannot be estimated.The Company remeasured its deferred tax assets as of December 31, 2017, which resulted in an increase in deferred tax assets and corresponding valuation allowance increase of $1,765,769.
dates indicated.Note 7 10 – Convertible notes payableDuring Subsequent EventsAs of April 29, 2019, the year ended December 31,landlord of GTI Research, changed the Company issued Subordinated ConvertiblePromissory notes in the aggregate amount of $417,960, and convertible notes and related interest totaling $69,026 were converted to 2,298,465 shares of common stock. Of that, 515,133 shares of common stock valued at $15,454 had been issued as of December 31, 2015; the remaining 1,783,332 shares valued at $53,572 have not yet been issued as of December 31, 2015. In total during 2015, 19 new convertible notes were issued which accrue 8% per annum, and are convertible between $0.015 and $0.04. We recognized a discount on debt relatedlocks, blocking access to the beneficial conversion of the noteslaboratory facilities. The failure to receive two (2) emergency injunctive payments in the amount of $151,307, of which $112,687$80,000 from FOGT, LLC aka Fredric Oeschger, during mediation/arbitration, caused the landlord to block all occupants. The lease deposit was amortized duringnot returned and was written off by the period and charged to interest. $38,619 remains to be amortizedCompany in the next fiscal year. Assecond quarter of December 31, 2015, Outstanding Convertible notes were convertible into 15,942,000 shares of common stock.During the year ended December 31, 2014, the Company issued convertible notes in the aggregate principal amount of $139,500 that accrued interest at 8% per annum. All of the notes had an original maturity date three months after the date of issuance and were convertible, both principal and interest, into common shares of the Company at a fixedrate of $.03 per share. Upon maturity, eight of the notes, with aggregate principal amount of $83,500 plus accrued interest, were converted into common shares of the Company. In connection with the conversions, 2,791,466 shares of common stock were issued.Note 8 - Shareholders’ equityConvertible preferred stock rightsPreferred Stock (‘Series A’) shall be convertible into Common Stock any time at the holder’s sole discretion in part or in whole by dividing the Purchase Price per Share by 110% of the Market Value on the Closing Date. ‘Market Value’ on any given date shall be defined as the average of the lowest three intra-day trading prices of the Company’s common stock during the 15 immediately preceding trading days. The Company is disputing the convertibility of these preferred shares.Preferred Stock (“Series B”) shall be convertible into ten common shares at any time and holders are entitled to 20 common share votes per such preferred share.Common stockThe Company has authorized 300,000,000 shares of its common stock, $.001 par value. The Company had issued and outstanding 36,610,636 and 34,473,056 shares as of December 31, 2015 and 2014, respectively.During the year ended December 31, 2015, the Company issued 2,137,580 shares of common stock valued at $175,027 in exchange for services and property:·204,080 shares valued at $10,000 to directors for services;·918,367 shares valued at $45,000 to an officer for services; and·1,300,000 shares valued at $26,000 to a vendor for construction in process. Subsequently, these shares were returned and cancelled on August 25, 2015, for non-performance; and·500,000 shares valued at $25,000 to an unrelated vendor for services, and we will issue another 500,000 at the end of the 6-month contractDuring the year ended December 31, 2015, convertible notes payable were converted to common stock:·515,133 shares of common stock were issued for converted notes totaling $69,026·An additional 1,783,332 shares valued at $53,572 were yet to be issued as of December 31, 2015 pursuant to convertible notes payable that were converted.During 2014, the Company issued a total of 200,000 shares for services, valued at $6,000, and issued 2,791,466 in connection with convertible notes (see Note 7).Note 9 – CommitmentsEmployment AgreementsIn 2012, the Company entered into five-year employment agreements with its chief executive and scientific officer and its chief administrative and financial officer. The agreements provide for compensation of $18,000 and $14,000 per month, respectively, and expire on January 7, 2017.Office Space LeaseOur current office space is leased by a related party, who bears the liability of the contract, however we are subleasing the entire space, and our rental fees are based on the total amount of the original contract. The current lease rates are $2,495.00 per month though the end of 2016Note 10 – Legal contingenciesThe Company is involved in claims arising during the ordinary course of business resulting from disputes with vendors and stockholders over various contracts and agreements.On August 12, 2015, the Company entered into a settlement agreement with Litchfield Church Ranch, LLC (“LCR”), its former landlord, related to back rent2019 in the amount of $325,000. The Company is required to pay $15,000 on or before September 12, 2015 as a good-faith down payment, on August 21, 2015, the Company paid $13,348 towards this down payment. The Company, at its option, can satisfy the judgment$12,000.Convertible notes payableAs of February 20, 2020, no additional conversions have occurred and no new convertible notes have been issued.Change in the following ways:·If paid on or before February 12, 2016, the judgment shall be deemed paid-in-full if the Company delivers $100,000 to LCR·If not paid off prior to February 12, 2016, the Company judgment shall be deemed satisfied if the Company delivers $150,000 to LCR on or before August 12, 2016.·If not paid off prior to August 12, 2016, there will be no discount and the Company shall owe the judgment balance in the amountBoard of $325,885IIn June 2009, James Tufts filed a complaint at the Small Claims Court in Jefferson County CO in the amount of $4,000 plus expenses from a London trip. The Company has not satisfied the judgment. This balance is included in accounts payable and accruing interest at 12% per annum.On June 26, 2009, Enterprise Leasing Company of Denver filed a Civil Judgment at the Jefferson County District Court in the State of Colorado in the amount of $78,178. The Company has not satisfied the judgment.On August 17, 2010, Banc of America Leasing filed a Civil Judgment at the Oakland County District in Troy, Michigan in the amount of $24,002. The Company has not satisfied the judgment.On September 23, 2010, Liberty Acquisitions filed a Civil Judgment at the Jefferson County Court in the State of Colorado in the amount of $3,300. The Company has not satisfied the judgment.On February 10, 2009, Centennial Credit Corporation filed a Civil Judgment at the Jefferson County Court in the amount of $967. The Company has not satisfied the judgment.On August 29, 2011, GeneThera had a court hearing concerning a litigation filed by The Park III related to unpaid rent according to the lease agreement. The District Court of Boulder entered a judgment against the Company in the amount of $77,000. The Company has not satisfied the judgment.On Novermber 8, 2012, GeneThera apparently had litigation with Mark Gohr, a consultant the CEO hired when Gohr was laid off from Qwest in 2009. The Company was not aware of such litigation. The legal documentation was not served to the Registered Agent. Gohr had a judgment by default in the amount of $19,000. According to the Company's financial records reflecting whatever invoices, receipts, and/or credit card method of payment supposedly provided by Mark Gohr, this consultant financially assisted the Company for less than $10,000. LitigationDirectorsFred Oeschger is no longer pending.On November 26, 2012,serving as a director on the Internal Revenue Service filed a Federal Tax LienBoard.SIGNATURESPursuant to the requirements of section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.Date: February 27, 2020 GENETHERA, INC. /s/ Antonio MiliciName: Antonio Milici Title: Chief Executive Officer /s/ Tannya L. IrizarryName: Tannya L. Irizarry Title: Interim Chief Executive Officer POWER OF ATTORNEYKNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Antonio Milici and Tannya L. Irizarry, and each of them, as his true and lawful attorneys-in-fact and agents, with full power of substitution for him or her, and in his or her name in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done therewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, and any of them, his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed below by the following persons on behalf of the Registrant and in the amount of $1,275. The Company has not satisfiedcapacities and on the lien.Signature Title Date /s/ Antonio MiliciChairman and Chief Executive Officer (Principal Executive Officer) February 27, 2020 Antonio Milici /s/ Tannya L. IrizarryInterim Chief Financial Officer (Principal Financial and Accounting Officer) February 27, 2020 Tannya L. Irizarry /s/ Jeremiah BartleyDirector February 27, 2020 Jeremiah Bartley
Note 11 – Income taxes
We are subject to taxation in the U.S. and the State of Colorado. The Company is not current on its tax filings and is subject to examination until those filings take place.
The Company has no current or deferred income tax liability due to its operating losses.
The Company has federal net operating loss carryforwards totaling $11,144,428 and $10,249,211 at December 31, 2015 and 2014, respectively. Subject to certain limitations (including limitations under Section 382 of the Internal Revenue Code), the carryforwards are available to offset future taxable income through 2035. The amount of change in the deferred tax asset and the related valuation allowance was approximately $313,326 during the year ending December 31, 2015, compared to approximately $183,000 in the year ending December 31, 2014.
Estimated deferred tax assets totaled $3,900,550 and $3,587,224 at December 31, 2015 and 2014, respectively. A 100% valuation allowance has been recorded to offset the deferred tax assets, due to uncertainty of the Company’s ability to generate future taxable income, in the amount of $3,900,550, resulting in a net deferred tax asset of $0.
We have analyzed the filing positions in all jurisdictions where we are required to file income tax returns and found no positions that would require a liability for unrecognized income tax positions be recognized.
Note 12 – Subsequent events
As of the filing date, the Company expects to finalize and enter into an exclusive License Agreement with Galtheron Molecular Solutions. GeneThera will license Galtheron to commercialize diagnostic and vaccine technologies in Europe and the Middle East. Further details will be forthcoming. This has been delayed until the renovations of the laboratory is completed. Galtheron expects for this to be completed in the first half of the 2016-year end.
On January 29, 2016, the Company acquired a lab space for our R&D projects and robotic technology. Currently, the project manager is renovating the lab space suitable to our Molecular Biology research. It is expected that this lab space will be available for us to move in during the first week of May 2016. The new lab space is located at 6860 N. Broadway, Suite B in Denver, CO 80221.
On February 24, 2016, the CEO of the Company, appointed Professor Carol Hruska from the Czech Republic to the board of directors. Professor Hruska is the Founder of the Biomedical Technology, Epidemiology and Food Safety Global Network; and administrator of the database of both, the publications on paratuberculosis (MAP) in Crohn’s disease. He has also published articles demonstrating MAP contamination in baby formula and papers about public health threat posed by mycobacteria in water, soil, plants and air. Hi extensive experience and knowledge of the MAP and Crohn’s research will help GeneThera achieve its scientific goals, as well as increase the level of awareness of the role MAP infection plays in the dairy industry and the development of Crohn’s Disease.
On March 22, 2016, the Company issued 918,368 restricted shares to the CFO as part of the employment agreement, which reflects issuance of stock to cover the $45,000 a year stock issuance.
On March 22, 2016, the Company issued 654,082 restricted shares services for services rendered.
On April 5, 2016, the Company issued a $30,000 convertible promissory note accruing interest at 8% and convertiblee at .015 per share
.
ITEM 9:
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM9A:
CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
In connection with the preparation of this annual report, an evaluation was carried out by the Company’s management, with the participation of the chief executive officer and the acting chief financial officer, of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (“Exchange Act”)) as of December 31, 2015. Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Commission’s rules and forms, and that such information is accumulated and communicated to management, including the chief executive officer and the chief financial officer, to allow timely decisions regarding required disclosures.
Based on that evaluation, the Company’s management concluded, as of the end of the period covered by this report, that the Company’s disclosure controls and procedures were ineffective in recording, processing, summarizing, and reporting information required to be disclosed, within the time periods specified in the Commission’s rules and forms, and such information was not accumulated and communicated to management, including the chief executive officer and the chief financial officer, to allow timely decisions regarding required disclosures.
Management’s Report on Internal Control over Financial Reporting
The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is a process, under the supervision of the chief executive officer and the chief financial officer, designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with United States generally accepted accounting principles (GAAP). Internal control over financial reporting includes those policies and procedures that:
·
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the Company’s assets.
·
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of the financial statements in accordance with generally accepted accounting principles, and that
receipts and expenditures are being made only in accordance with authorizations of management and the board of directors.
·
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.
Due to its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.
The Company’s management conducted an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2015, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, this assessment is to determine if there exist material weaknesses in internal control over financial reporting. A material weakness is a control deficiency, or a combination of deficiencies in internal control over financial reporting that creates a reasonable possibility that a material misstatement in annual or interim financial statements will not be prevented or detected on a timely basis. Our assessment of the effectiveness of our internal control over financial reporting identified certain material weaknesses, therefore management considers its internal control over financial reporting to be NOT effective.
The matters involving internal control over financial reporting that our management considered to be material weaknesses were:
Insufficient accounting resources. Management had insufficient accounting resources, which insufficiency resulted in delays associated with our reporting of our operating results. Accordingly, we determined as of December 31, 2015, that the insufficient accounting resources are part of the material weaknesses as stated above.
US GAAP knowledge. Management has engaged an external consultant to counter the internal lack of US GAAP knowledge. Nonetheless, internally there is a lack of internal US GAAP knowledge, therefore, the work of the external consultant does not entirely compensate for this internal deficiency. Accordingly, we determined as of December 31, 2015, that the internal lack of US GAAP knowledge is part of the material weaknesses as stated above.
As a result of the material weaknesses in internal control over financial reporting described above, the Company’s management has concluded that, as of December 31, 2015, that the Company’s internal control over financial reporting was not effective based on the criteria in Internal Control – Integrated Framework issued by the COSO. The Company intends to remedy its material weaknesses by:
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This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. We were not required to have, nor have we, engaged our independent registered public accounting firm to perform an audit of internal control over financial reporting pursuant to the rules of the Commission that permit us to provide only management’s report in this annual report.
Changes in Internal Controls over Financial Reporting
During the period ended December 31, 2015, management has implemented a variety of internal controls procedure and financial reporting oversight. This has enabled the company to perform an assessment of the effectiveness of our internal control over financial reporting. This assessment did identify material weaknesses; which management intends to remedy.
PART III
ITEM 10:
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
DIRECTORS AND EXECUTIVE OFFICERS
The following persons are currently serving as the Company’s executive officers and directors.
Name
Age
Positions
Dr. Tony Milici
61
Chairman of the Board, Chief Executive
Officer and Chief Scientific Officer
Tannya L. Irizarry
57
Chief Administrative Officer and
Chief Financial Officer (Interim)
Jorgen Frandsen
64
Board of Director
Bruce Winsett
65
Board of Director
Dr. Antonio Milici founded GeneThera, Inc. in 1998 and has served as its Chairman and CEO since inception. Prior to founding GeneThera, Dr. Milici served as CEO and President of Genetrans, Inc., a genetic diagnostic company from 1993 to 1998. Dr. Milici was also an assistant professor in the department of Molecular Pathology at the University of Texas M.D. Anderson Cancer Center.
Tannya L. Irizarry served as Chief Administrative Officer from 1999 to Present. Since May 2007, she has served as Chief Financial Officer (Interim) of the Company. Ms. Irizarry has over 22 years of experience in medical technology and biotechnology industries. Ms. Irizarry worked at the University of Texas M.D. Anderson Cancer Center in the department of Neuro-Oncology with Dr. William S. Fields and the Office of Education with Dr. James Bowen. She also worked at the Medical College of Georgia and subsequently, at the St. Joseph Hospital in the biotechnology division. Ms. Irizarry was the Vice President of Genetrans, Inc. from 1994 to 1998. Ms. Irizarry relocated to Colorado in order to manage GeneThera, Inc. at the request of Dr. Milici.
The Company elected two Directors for our Board. Each Director is elected at the Company’s annual meeting of shareholders and holds office until the next annual meeting of shareholders and/or until the successors are elected and qualified. At present, the Company’s bylaws provide for not less than three or more than seven Directors.
Jorgen Frandsen is a Biomedical Engineer with over 35 years of experience in global operations, new technology and product development including robotic technology. He was Director of R&D at StorageTeck, VP of Product Development at Exabyte and VP of New Product Introduction at Maxtor, Inc. He is currently President of Rev Zero Engineering, a biomedical contract engineering company. Jorgen holds an MsEE from the Universty of Colorado.
Bruce Winsett is an Aerospace Engineer at Lockheed Martin with over 30 years of experience in robotic technology ranging from Military Space Programs to NASA planetary missions and Launch System support. Bruce has developed complex software systems such as graphical user interface software (Lab VIEW) to remotely control spacecraft’s robotic components. Bruce holds a Master of Science in Physics from Purdue University and he has been recognized as a Lockheed Martin Space System Co. ATLO Software Center of Excellent Scientist.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our Executive Officers, Directors and 10% Shareholders to file reports regarding initial ownership and changes in ownership with the SEC. Executive Officers, Directors, and 10% Shareholders are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file. Our information regarding compliance with Section 16(a) is based solely on a review of the copies of such reports furnished to us by our Executive Officers, Directors and 10% Shareholders. These forms include (i) Form 3, which is the Initial Statement of Beneficial Ownership of Securities, (ii) Form 4, which is a Statement
of Changes in Beneficial Ownership, and (iii) Form 5, which is an Annual Statement of Changes in Beneficial Ownership.
The Company has adopted a Code of Ethics applicable to its principal executive officer, principal financial officer, and principal accounting officer. Our Code of Ethics can be obtained by calling the Company at 303-439-2085.
ITEM 11:
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain summary information for the fiscal years ended December 31, 2015 and 2014, concerning the compensation awarded to, earned by, or paid to those persons serving as Chief Executive Officer and Chief Financial Officer of the Company during those years (the “Named Executive Officers”). No other executive officer of the Company had a total annual salary and bonus for the years presented that exceeded $100,000. Antonio Milici, M.D., Ph.D., and Tannya L. Irizarry were the only executive officers during the year ended December 31, 2015.
The following table also summarizes the annual and long-term compensation paid to Dr. Tony Milici, our Chief Executive Officer. Except for Dr. Milici, no other executive officer received annual remuneration in excess of $100,000 during 2015 or 2015. This summary compensation table shows certain compensation information for services rendered in all capacities during each of the last two completed fiscal years.
Name and Principal Position | Year | Salary | Bonus | Stock Awards | Option Awards | Non-Equity Incentive Plan Compensation | Change in Pension Value and Non-Qualified Deferred Compensation Earnings | All Other Compensation | Total |
Dr. Tony Milici | 2015 | $216,000 |
| $261,000 | |||||
Chief Executive Officer | 2014 | $216,000 |
| $261,000 | |||||
Tannya Irizarry | 2015 | $168,000 | 45,000 | $213,000 | |||||
Chief Financial Officer | 2014 | $168,000 | 45,000 | $213,000 | |||||
Does not include perks and other personal benefits in amounts less than 10% of the total annual salary and other compensation. No executive officer of the Company received any Non-Equity Incentive Plan Compensation or Nonqualified Deferred Compensation Earnings during the periods presented.
No other officer or director received in excess of $100,000 for the years ending December 31, 2015, December 31, 2014, and December 31, 2013.
Board of Directors Compensation:
The following table sets forth summary information concerning the compensation we paid to directors during the year ended December 31, 2015:
NAME |
| FEES EARNED OR PAID IN STOCK |
| OPTION AWARDS ($) |
| TOTAL ($) |
Jorgen Frandsen | $ 5,000 | $ 5,000 | ||||
Bruce Winsett | $ 5,000 | $ 5,000 |
No Director received any Stock Awards, Non-Equity Incentive Plan Compensation, Nonqualified Deferred Compensation Earnings or other Compensation other than what is disclosed above during the year ended December 31, 2015. The fees paid, were paid in stock and no cash fees were paid.
(1) Dr. Milici did not receive any compensation separate from the consideration he received as an officer of the Company for the year ended December 31, 2015 in consideration for his service to the Board as a Director of the Company.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
On January 8, 2012, the Company entered into an employment agreement with Antonio Milici, M.D., Ph.D., to serve as the Chief Executive Officer and Chief Scientific Officer of the Company through January 7, 2017. Unless either party gives notice to terminate the agreement at least thirty days prior to expiration of the agreement, the agreement will automatically be extended for an additional two year period. In consideration for his services, Dr. Milici receives a base salary of $216,000 per annum throughout the term of the agreement plus bonuses as may be determined by the Compensation Committee of the Board of Directors in its discretion or if the Company achieves net income in excess of $2,000,000 per year. As part of his employment agreement, Dr. Milici has agreed not to compete with the Company, solicit any of its customers or solicit any of its employees for a period of two years after the term of the agreement. Dr. Milici is also subject to confidentiality obligations in favor of the Company and has agreed to transfer to the Company all of his interests in any idea, concept, technique, inventory or written work developed by him during the term of his employment agreement. The Company also provides a company vehicle and gas allowance for him and his scientific consultants. On January 8, 2012, the Company entered into an employment agreement with Tannya L Irizarry to serve as the Chief Administrative Officer and Chief Financial Officer (Interim) of the Company until January 31, 2017. Unless either party gives notice to terminate the agreement at least thirty days prior to expiration of the agreement, the agreement will automatically be extended for an additional two year period. In consideration for her services, Ms. Irizarry receives a base salary of $123,000 per annum throughout the term of the agreement plus $45,000 worth on common stock issuance every March of every year of
her employment agreement. If the Company achieves net income in excess of $2,000,000 per year, Ms. Irizarry is entitled to a company vehicle, gas expenses, and auto repairs. No director received compensation for her services to the Company.
ITEM 12:
SECURITY OWNERSHIP OF CERTAIN BENIFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERS MATTERS
The following table sets forth certain information concerning the beneficial ownership of our outstanding classes of stock as of December 31, 2015 by each person known by us to be (i) the beneficial owner of more than 5% of the outstanding shares of common stock, (ii) each current director and nominee, (iii) each of the executive officers who were serving as executive officers at the end of the December 31, 2015 fiscal year and (iv) all of our directors and current executive officers as a group. Unless otherwise indicated below, to our knowledge, all persons listed below have sole voting and investment power with respect to their shares of common stock except to the extent that authority is shared by spouses under applicable law. The calculation of percentage ownership for each listed beneficial owner is based upon the number of shares of common stock issued and outstanding on December 31, 2015, plus shares of common stock subject to options, warrants and conversion rights held by such person on December 31, 2015, and exercisable or convertible within 60 days thereafter. Unless otherwise indicated, the address of each person or entity named below is c/o GeneThera, Inc., PO. Box 7085, Broomfield, CO 80021.
Name of Beneficial Owner | Number of Shares Beneficially Owned (1) | Percent of Class |
Five Percent Shareholders: | ||
Shawn T. Donahue | 1,627,557 | 0.04% |
Gold X Change, Inc. | 4,003,860 | 0.15% |
Directors and Executive Officers: |
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Dr. Antonio Milici | - | |
Tannya L. Irizarry | - | |
All Directors and Executive Officers as a Group | 5,631,417 | 0.19% |
This table is based upon information supplied by officers, directors and principal shareholders and Schedules 13D and 13G filed with the SEC. Unless otherwise indicated in the footnotes to this Table and subject to community property laws where applicable, the Company believes that two of these shareholders named in this Table has a five (5) year restriction on their stock ownership and has sole voting and investment power with respect to the shares indicated as beneficially owned. Applicable percentages are based
on 36,610,636 shares of common stock outstanding on December 31, 2015, adjusted as required by rules promulgated by the SEC.
SERIES B PREFERRED STOCK
Common Stock Beneficially Owned (2) | Voting Preferred Stock Beneficially Owned (2) | |||
Name of Beneficial Owner (1) | Number | Percent | Number | % |
Antonio Milici | 0 | 0.00% | 11,220,000 | 73% |
Tannya L. Irizarry (3) | 0 | 0.00% | 4,190,000 | 27% |
All Directors and Officers as a Group (2 persons) | 0 | 0.00% | 15,4100,000 | 100% |
This table is based upon information supplied by officers, directors, and principal shareholders and documents filed with the SEC. Unless otherwise indicated and subject to community property laws, if applicable, the Company believes that each of the shareholders named in this table has sole voting and investment power with respect to the shares indicated as beneficially owned.
Applicable percentages are based on 36,610,636 shares of common stock outstanding and on 15,410,000 shares of Series B Preferred Stock outstanding on December 31, 2015, adjusted as required by rules promulgated by the SEC. Although the Series A Preferred Stock is convertible into approximately 7.2 million shares of our common stock (assuming all shares were converted as of the date of this filing), this Table does not give effect to the Series A Preferred Stock because these shares have no voting rights and their convertibility by the holder is currently being contested by the Company.
Ms. Irizarry is married to Dr. Antonio Milici. Therefore, she has a beneficial interest in his shares.
ITEM 13:
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Director Independence
The Company has independent Directors, even though it is not required, but will continue seeking to appoint one to four more independent Directors, if and when it is required to do so.
ITEM 14:
PRINCIPAL ACCOUNTING FEES AND SERVICES
AUDIT FEES
The following is a summary of the fees that are billed to us by our auditors for professional services rendered for the past two fiscal years:
Fee Category | Fiscal 2015 Fees ($) | Fiscal 2014 Fees ($) |
Audit Fees | 25,100 | 15,396 |
Audit-Related Fees | - | - |
Tax Fees | - | - |
All Other Fees | - | - |
Audit fees consist of fees billed for professional services rendered for the audit of our financial statements and review of the interim financial statements included in quarterly reports and services that are normally provided by Fruci & Associates II, PLLC, Certified Public Accountants (“Fruci”), since January 2015 in connection with statutory and regulatory filings or engagements.
The Company’s audit committee, which consists of all directors, approved the services described above.
ITEM 15:
EXHIBITS, FINANCIAL STATEMENTS
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* Filed herewith.
** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
(1) Filed as an exhibit to our Report on Form 8-K, filed with the Commission on March 5, 2012 and incorporated herein by reference.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on the 13th day of May, 2016.
GeneThera, Inc.
By: /s/ Antonio Milici
Antonio Milici, MD, PhD
President
(Principal Executive Officer)
By: /s/ Tannya L. Irizarry
Tannya L. Irizarry
Chief Financial Officer (Interim)
(Principal Financial/Accounting Officer)
In accordance with the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
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Exhibit 21.1
Subsidiaries
GeneThera, Inc., a Colorado corporation, is a subsidiary for GeneThera, Inc., a Nevada Corporation. GeneThera Subsidiary will no longer be in Colorado.