UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 20202021
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OF 15(d) OF THE EXCHANGE ACT OF 1934
From the transition period from ___________ to ____________
Commission File Number 000-54933
IMMUNE THERAPEUTICS, INC.
(Exact name of small business issuer as specified in its charter)
Florida | 59-3226705 | |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
2431 Aloma Ave., Suite 124, Winter Park, FL 32792
(Address of principal executive offices)
888-613-8802
(Issuer’s telephone number)
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act: None
Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes [X] No [ ]
Indicate by check mark whether the registrant has submitted electronically 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 [ ]
Indicate by a check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer [ ] | Accelerated Filer [ ] | |
Non-Accelerated Filer [ ] | Smaller Reporting Company [X] | |
Emerging growth Company [ ] |
Indicate by a check mark whether the company is a shell company (as defined by Rule 12b-2 of the Exchange Act: Yes [ ] No [X]
As of June 29, 2020,May 24, 2021, there were 457,578481,906 shares of Common Stock outstanding.
TABLE OF CONTENTS
PART I – FINANCIAL STATEMENTS | ||
Item 1. | Financial Statements | 5 |
Item 2. | Management’s Discussion and Analysis of Financial Conditions and Results of Operations | |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | |
Item 4. | Controls and Procedures | |
PART II – OTHER INFORMATION | ||
Item 1. | Legal Proceedings | |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | |
Item 3. | Default upon Senior Securities | |
Item 6. | Exhibits |
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained or incorporated by reference in this AnnualQuarterly Report on Form 10-Q are considered forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995) concerning our business, results of operations, economic performance and/or financial condition, based on management’s current expectations, plans, estimates, assumptions, and projections. Forward-looking statements are included, for example, in the discussions about:
● | strategy; | |
● | new product discovery and development; | |
● | current or pending clinical trials; | |
● | our products’ ability to demonstrate efficacy or an acceptable safety profile; | |
● | actions by the FDA and other regulatory authorities; | |
● | product manufacturing, including our arrangements with third-party suppliers; | |
● | product introduction and sales; | |
● | royalties and contract revenues; | |
● | expenses and net income; | |
● | credit and foreign exchange risk management; | |
● | liquidity; | |
● | asset and liability risk management; | |
● | the outcome of litigation and other proceedings; | |
● | intellectual property rights and protection; | |
● | economic factors; | |
● | competition; and | |
● | legal risks. |
Any statements contained in this report that are not statements of historical fact may be deemed forward-looking statements. Forward- lookingForward-looking statements generally are identified by the words “expects,” “anticipates,” “believes,” “intends,” “estimates,” “aims,” “plans,” “may,” “could,” “will,” “will continue,” “seeks,” “should,” “predict,” “potential,” “outlook,” “guidance,” “target,” “forecast,” “probable,” “possible” or the negative of such terms and similar expressions. Forward-looking statements are subject to change and may be affected by risks and uncertainties, most of which are difficult to predict and are generally beyond our control. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update any forward-looking statement in light of new information or future events, except as required by law, although we intend to continue to meet our ongoing disclosure obligations under the U.S. securities laws and other applicable laws.
We caution you that a number of important factors could cause actual results or outcomes to differ materially from those expressed in, or implied by, the forward-looking statements, and therefore you should not place too much reliance on them. These factors include, among others, those described herein, under “Risk Factors” and elsewhere in this AnnualQuarterly Report and in our other public reports filed with the Securities and Exchange Commission. It is not possible to predict or identify all such factors, and therefore the factors that are noted are not intended to be a complete discussion of all potential risks or uncertainties that may affect forward-looking statements. If these or other risks and uncertainties materialize, or if the assumptions underlying any of the forward-looking statements prove incorrect, our actual performance and future actions may be materially different from those expressed in, or implied by, such forward- lookingforward-looking statements. We can offer no assurance that our estimates or expectations will prove accurate or that we will be able to achieve our strategic and operational goals.
Forward-looking statements are based on information we have when those statements are made or management’s good faith belief as of that time with respect to future events and are subject to significant risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements.
Important factors that could cause such differences include, but are not limited to:
● | our lack of operating history; | |
● | our current and future capital requirements and our ability to satisfy our capital needs; | |
● | our inability to keep up with industry competition; | |
● | interpretations of current laws and the passages of future laws; | |
● | acceptance of our business model by investors and our ability to raise capital; |
● | our drug discovery and development activities may not result in products that are approved by the applicable regulatory authorities. Even if our drug candidates do obtain regulatory approval, they may never achieve market acceptance or commercial success; | |
● | our reliance on key personnel and collaborative partners, including our ability to attract and retain scientists; | |
● | our reliance on third party manufacturing to supply drugs for clinical trials and sales; | |
● | our limited distribution organization with no sales and marketing staff; | |
● | our being subject to product liability claims; | |
● | our reliance on key personnel, including our ability to attract and retain scientists; | |
● | legislation or regulation that may increase the cost of our business or limit our service and product offerings; | |
● | risks related to our intellectual property, including our ability to adequately protect intellectual property rights; | |
● | risks related to government regulation, including our ability to obtain approvals for the commercialization of some or all of our drug candidates, and ongoing regulatory obligations and continued regulatory review which may result in significant additional expense and subject us to penalties if we fail to comply with applicable regulatory requirements; and | |
● | our ability to obtain regulatory approvals |
Moreover, new risks regularly emerge, and it is not possible for our management to predict or articulate all risks we face, nor can we assess the impact of all risks on our business or the extent to which any risk, or combination of risks, may cause actual results to differ from those contained in any forward-looking statements. All forward-looking statements included in this prospectus are based on information available to us on the date of this AnnualQuarterly Report. Except to the extent required by applicable laws or rules, we undertake no obligation to publicly update or revise any forward-looking statement, whether as a resultbecause of new information, future events or otherwise. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained above and throughout this AnnualQuarterly Report.
JUMPSTART OUR BUSINESS STARTUPS ACT
We qualify as an “emerging growth company” as defined in Section 101 of the Jumpstart our Business Startups Act (“JOBS Act”) as we do not have more than $1,000,000,000 in annual gross revenue and did not have such amount as of December 31, 2019, the last day of our last fiscal year. We are electing to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1) of the JOBS Act.
As an emerging growth company, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements that are otherwise applicable to public companies. These provisions include, but are not limited to:
We will remain an emerging growth company until the earliest to occur of: (i) our reporting $1 billion or more in annual gross revenues; (ii) the end of fiscal year 2020; (iii) our issuance, in a three year period, of more than $1 billion in non-convertible debt; and (iv) the end of the fiscal year in which the market value of our common stock held by non-affiliates exceeded $700 million on the last business day of our second fiscal quarter.
PART 1 – FINANCIAL INFORMATION
IMMUNE THERAPEUTICS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited) | (Unaudited) | |||||||||||||||
March 31, 2020 | December 31, 2019 | March 31, 2021 | December 31, 2020 | |||||||||||||
ASSETS | ||||||||||||||||
Current Assets: | ||||||||||||||||
Cash | $ | 6,153 | 4,925 | $ | 11,658 | $ | 9,971 | |||||||||
Total current assets | 6,153 | 4,925 | 11,658 | 9,971 | ||||||||||||
Fixed Assets: | ||||||||||||||||
Computer equipment, net of accumulated depreciation of $12,682 and 12,522 respectively | 531 | 691 | ||||||||||||||
Deposits | 202 | 200 | 253 | 200 | ||||||||||||
Total assets | $ | 6,886 | 5,816 | $ | 11,911 | $ | 10,171 | |||||||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||||||||||
Current Liabilities: | ||||||||||||||||
Accounts payable | $ | 2,753,243 | 2,655,949 | $ | 2,710,589 | $ | 2,562,515 | |||||||||
Accrued payroll | 3,627,648 | 3,627,648 | ||||||||||||||
Accrued interest | 453,782 | 635,217 | ||||||||||||||
Accrued liabilities | 5,033,358 | 4,646,771 | 267,557 | 221,057 | ||||||||||||
Net payables due to related parties | 46,899 | 48,217 | ||||||||||||||
Payables due to related parties | 626,010 | 531,420 | ||||||||||||||
Notes payable, net of debt discount | 5,545,371 | 5,545,371 | 3,070,208 | 2,844,851 | ||||||||||||
Derivative liability | 1,109,509 | 798,126 | - | 1,254,444 | ||||||||||||
Total current liabilities | 14,488,380 | 13,694,437 | 10,755,794 | 11,677,151 | ||||||||||||
Total liabilities | 14,488,380 | 13,694,437 | 10,755,794 | 11,677,152 | ||||||||||||
Commitments and Contingencies (Note 12) | ||||||||||||||||
Commitments and Contingencies | - | - | ||||||||||||||
Stockholders’ Deficit: | ||||||||||||||||
Common stock – par value $0.0001; 750,000,000 shares authorized; 457,578 and 457,578 shares issued and outstanding respectively | 46 | 46 | ||||||||||||||
Common stock – par value $0.0001; 750,000,000 shares authorized; 481,906 and 476,504 shares issued and outstanding respectively | 49 | 48 | ||||||||||||||
Additional paid in capital | 370,908,099 | 370,908,099 | 371,473,810 | 371,341,120 | ||||||||||||
Stock issuances due | 10,303 | 10,303 | 10,303 | 10,303 | ||||||||||||
Accumulated deficit | (385,399,942 | ) | (384,607,069 | ) | (382,228,045 | ) | (383,018,452 | ) | ||||||||
Total stockholders’ deficit | (14,481,494 | ) | (13,688,621 | ) | (10,743,883 | ) | (11,666,981 | ) | ||||||||
Total liabilities and stockholders’ deficit | $ | 6,886 | 5,816 | $ | 11,911 | $ | 10,171 |
The accompanying notes are an integral part of these consolidated financial statements.
IMMUNE THERAPEUTICS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
Three Months ended | Three Months ended | |||||||||||||||
March 31, 2020 | March 31, 2019 | March 31, 2021 | March 31, 2020 | |||||||||||||
Operating expenses: | ||||||||||||||||
Selling, general and administrative | $ | 363,637 | $ | 486,585 | $ | 138,726 | $ | 363,637 | ||||||||
Research and development expense | 31,509 | - | 148,693 | 31,509 | ||||||||||||
Stock issued for services G&A | - | 120,000 | ||||||||||||||
Depreciation and amortization expense | 159 | 387 | - | 159 | ||||||||||||
Total operating expenses | (395,305 | ) | (606,972 | ) | (287,419 | ) | (395,305 | ) | ||||||||
Loss from operations | (395,305 | ) | (606,972 | ) | (287,419 | ) | (395,305 | ) | ||||||||
Other income (expense): | ||||||||||||||||
Interest expense | (86,185 | ) | (115,209 | ) | (100,404 | ) | (86,185 | ) | ||||||||
Gain (Loss) on Derivative Liability Revaluation | (311,383 | ) | 12,772 | |||||||||||||
Gain (loss) on Derivative liability revaluation | 1,178,230 | (311,383 | ) | |||||||||||||
Total other income (expense) | (397,568 | ) | (102,437 | 1,077,826 | (397,568 | ) | ||||||||||
Net loss | $ | (792,873 | ) | $ | (709,409 | ) | ||||||||||
Net income (loss) | $ | 790,407 | $ | (792,873 | ) | |||||||||||
Net loss attributable to common shareholders | (792,873 | ) | (709,409 | ) | ||||||||||||
Basic loss per share to common shareholders | $ | (1.73 | ) | $ | (1.58 | ) | ||||||||||
Weighted average number of shares outstanding | 457,578 | 447,626 | ||||||||||||||
Basic income (loss) per share attributable to common shareholders | $ | 1.65 | $ | (1.73 | ) | |||||||||||
Diluted income (loss) per share to common shareholders | $ | 0.05 | $ | (1.73 | ) | |||||||||||
Basic weighted average number of shares outstanding | 478,305 | 457,578 | ||||||||||||||
Diluted weighted average number of shares outstanding | 16,594,895 | 457,578 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY/(DEFICIT)
FOR THE PERIODS ENDED MARCH 31, 2021 AND 2020
(Unaudited)
Common Stock | Additional Paid-in | Stock To Be | Accumulated | |||||||||||||||||||||
Shares | Amount | Capital | Issued | Deficit | Total | |||||||||||||||||||
Balance December 31, 2019 | 457,578 | $ | 46 | $ | 370,908,099 | $ | 10,303 | $ | (384,607,069 | ) | $ | (13,688,621 | ) | |||||||||||
Net loss | - | - | - | - | (792,873 | ) | (792,873 | ) | ||||||||||||||||
Balance March 31, 2020 | 457,578 | $ | 46 | $ | 370,908,099 | $ | 10,303 | $ | (385,399,942 | ) | $ | (14,481,494 | ) | |||||||||||
Balance, December 31, 2020 | 476,504 | $ | 48 | $ | 371,341,120 | $ | 10,303 | (383,018,452 | ) | $ | (11,666,981 | ) | ||||||||||||
Issuance of common stock upon conversion of debt | 5,402 | 1 | 56,479 | - | - | 56,480 | ||||||||||||||||||
Extinguishment of derivative liability upon conversion of debt | - | - | 76,211 | - | - | 76,211 | ||||||||||||||||||
Net income (loss) | - | - | - | - | 790,407 | 790,407 | ||||||||||||||||||
Balance March 31, 2021 | 481,906 | $ | 49 | $ | 371,473,810 | $ | 10,303 | $ | (382,228,045 | ) | $ | (10,743,883 | ) |
The accompanying notes are an integral part of these condensed consolidated financial statements.
IMMUNE THERAPEUTICS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
Three Months Ended | ||||||||
March 31, 2021 | March 31, 2020 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Net income (loss) | $ | 790,407 | $ | (792,873 | ) | |||
Adjustments to reconcile net income (loss) to net cash flows used in operating activities: | ||||||||
Depreciation | - | 159 | ||||||
Amortization of debt discount | 34,789 | - | ||||||
Change in value of derivative | (1,178,230 | ) | 311,383 | |||||
Changes in operating assets and liabilities: | ||||||||
Deposits | 53 | - | ||||||
Accounts payable | 147,965 | 97,292 | ||||||
Accrued payroll | - | 240,140 | ||||||
Accrued interest | 65,613 | 96,447 | ||||||
Accrued liabilities | 46,500 | 49,998 | ||||||
Due to related parties | 94,590 | (1,318 | ) | |||||
Net cash from operating activities | 1,687 | 1,228 | ||||||
Net increase in cash and cash equivalents | 1,687 | 1,228 | ||||||
Cash and cash equivalents at beginning of period | 9,971 | 4,925 | ||||||
Cash and cash equivalents at end of period | $ | 11,658 | $ | 6,153 | ||||
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES: | ||||||||
Conversion of debt and accrued interest to common stock | $ | 56,480 | - |
The accompanying notes are an integral part of these condensed consolidated financial statements.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY/(DEFICIT)
FOR THE PERIODS ENDED MARCH 31, 2020 AND 2019
(Unaudited)
Common Stock | Additional Paid-in | Stock To Be | Prepaid | Accumulated | Non- Controlling | |||||||||||||||||||||||||||
Shares | Amount | Capital | Issued | Services | Deficit | Interest | Total | |||||||||||||||||||||||||
Balance December 31, 2018 | 434,322,574 | $ | 43,433 | $ | 369,881,037 | $ | 35,303 | $ | - | $ | (381,210,411 | ) | $ | - | $ | (11,250,638 | ) | |||||||||||||||
Issuance of common stock for prepaid services | 3,000,000 | 300 | 119,700 | - | - | - | - | 120,000 | ||||||||||||||||||||||||
Issuance of warrants in connection with debt agreement | - | - | 23,000 | - | - | - | - | 23,000 | ||||||||||||||||||||||||
Issuance of common stock in exchange for debt | 18,255,225 | 1,825 | 60,609 | - | - | - | - | 62,434 | ||||||||||||||||||||||||
Net loss | - | - | - | - | - | (709,409 | ) | - | (709,409 | ) | ||||||||||||||||||||||
Balance March 31, 2019 | 455,577,799 | $ | 45,558 | $ | 370,084,346 | $ | 35,303 | $ | - | $ | (381,919,820 | ) | $ | - | $ | (11,754,613 | ) | |||||||||||||||
Balance, December 31, 2019 | 457,578 | $ | 46 | $ | 370,908,099 | $ | 10,303 | $ | - | (384,607,069 | ) | $ | - | $ | (13,688,621 | ) | ||||||||||||||||
Net loss | - | - | - | - | - | (792,873 | ) | - | (792,873 | ) | ||||||||||||||||||||||
Balance March 31, 2020 | 457,578 | $ | 46 | $ | 370,908,099 | $ | 10,303 | $ | - | $ | (385,399,942 | ) | $ | - | $ | (14,481,494 | ) |
The accompanying notes are an integral part of these condensed consolidated financial statements.
IMMUNE THERAPEUTICS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
Three Months Ended | ||||||||
March 31, 2020 | March 31, 2019 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Net loss | $ | (792,873 | ) | $ | (709,409 | ) | ||
Adjustments to reconcile net loss to net cash flows used in operating activities: | ||||||||
Depreciation | 159 | 387 | ||||||
Amortization of debt discount | - | 61,271 | ||||||
Stock issued for services | - | 120,000 | ||||||
Change in value of derivative | 311,383 | (12,772 | ) | |||||
Changes in operating assets and liabilities: | ||||||||
Due to Cytocom Inc. | (1,318 | ) | - | |||||
Interest accrued on debt | 96,447 | - | ||||||
Accounts payable | 97,292 | 210,933 | ||||||
Accrued liabilities | 290,138 | 303,400 | ||||||
Net cash from/ (used in) operating activities | 1,228 | (171 | ) | |||||
Net increase/(decrease) in cash and cash equivalents | 1,228 | (171 | ) | |||||
Cash and cash equivalents at beginning of period | 4,925 | 5,859 | ||||||
Cash and cash equivalents at end of period | $ | 6,153 | $ | 5,688 |
Three Months Ended, | ||||||||
March 31, 2020 | March 31, 2019 | |||||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||
Cash paid for interest | $ | - | $ | 16,000 | ||||
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITES: | ||||||||
Debt discounts on notes payable and warrants | $ | - | $ | 23,000 | ||||
Conversion of debt and accrued interest to common stock | $ | - | $ | 27,100 | ||||
Reclassification from notes payable to accounts payable | $ | - | $ | 254,749 | ||||
Debt settled and reclassified to accrued expenses | $ | - | $ | 35,325 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
Immune Therapeutics, Inc. and Subsidiaries
Notes to the Condensed Consolidated Financial Statements
March 31, 2020
(Unaudited)
1. Organization and Description of BusinessCompany Overview
Immune Therapeutics Inc. (the “Company”“Company” or “IMUN”) was initially incorporated inis a Florida Public corporation trading on December 2, 1993 as Resort Clubs International, Inc. (“Resort Clubs”). On November 10, 2004, Galliano International Ltd. merged with Resort Clubs; Resort Clubs was the surviving corporation. On August 23, 2010, Resort Clubs changed its name to pH Environmental Inc. (“pH Environmental”). On April 23, 2012, pH Environmental completed a name change to TNI BioTech, Inc., and on April 24, 2012, it executed a share exchange agreement for the acquisition of all of the outstanding shares of TNI BioTech IP, Inc. In October 2014, the name was changed to Immune Therapeutics, Inc.
OTC-Pink market. The Company initially focused on acquiring patents that would protect and advance the development of new uses of opioid-related immune therapies such as low dose naltrexone (“LDN”) and Methionine [Met5]-enkephalin (“MENK”) to stimulate and/or regulate the immune system to treat a variety of diseases. The Company believed that the therapies may be able to correct abnormalities or deficiencies in the immune system in diseases such as HIV infection, autoimmune disease, immune disorders, or cancer, all of which can lead to disease progression and life-threatening situations when the immune system is not functioning optimally.
In December 2013, the Company formed a subsidiary, Cytocom Inc. (“Cytocom”), to focus on conducting LDN and MENK clinical trials in the United States. In a series of licensing agreements between the Company and Cytocom entered into between 2014 and 2020, in return for an up-front payment, the transfer of certain Company notes payable and other liabilities to Cytocom, and the payment of royalties by Cytocom on future sales, the Company transferred rights to Cytocom to develop and sell LDN and MENK for treatment in humans in the United States and certain other developed economies. The Company retained the right to develop and sell the licensed products in Emerging Markets.
Under a May 2018 amendment to the licensing agreements, the royalty due from Cytocom was set at 1% of sales and the Company no longer had any ongoing obligations to pay for costs in connection with the assets of Cytocom. As a consequence of this amendment, the Company no longer consolidated the financial statements of Cytocom with its own statements. Under a December 2018 amendment, Cytocom became obligated to maintain Immune’s ownership at not less than 15.5% of Cytocom. At March 31, 2020, the Company’s equity interest in Cytocom stood at 14.5% of Cytocom’s issued and outstanding common stock.
On February 27, 2020, the Company entered into a license agreement (the “License Agreement”) with Forte Biotechnology International Corp. (“Forte”), which granted Forte an exclusive license to develop and commercialize pharmaceutical products consisting of Lodonal and MENK for use in veterinary applications for all indications world-wide. Forte is managed by Noreen Griffin, a former Chief Executive Officer of the Company.
At present, the Company is a late development-stage biopharmaceutical company focused on the licensing,drug development and commercialization of innovative prescription medications for humanscompany. We identify, evaluate, and seek to acquire technologies in Africa, Centralthe medical device and South America,drug development sectors with the Caribbeanintent to further develop them and China. The Company is not permittedmove them to commercialization. Such commercialization efforts include sale, licensing and go to market its licensed productsstrategies. During 2020 as described herein, the Company executed two such licenses; one to Cytocom, Inc. (“Cytocom”) and one to Forte Animal Health, Inc. (“Forte”).
The Company’s strategy has been limited due to lack of capital. Management is seeking to secure new investment capital with which to continue to pursue the Company’s strategy. There is no guaranty that the Company will be successful in the United States.securing additional capital.
Going Concern
TheAs of March 31, 2021, the Company has incurred significanthad $11,658 in cash on hand, negative working capital of $10,743,883 and a stockholders’ deficit of $10,743,883. For the three months ended March 31, 2021, the Company reported a net losses since inceptionincome attributable to common shareholders of $790,407. Included in the net income for the three months ended March 31, 2021 is a non-cash gain of $1,178,230 related to write off of derivative liabilities associated with the conversion and elimination of conversion features for notes. During the three months ended March 31, 2020, the Company reported a net loss attributable to common shareholders of $792,873.
Historically the Company has relied on its ability to fund itsthe funding of operations through private equity financings. Managementfinancings and management expects operating losses and negative cash flows to continue at more significant levels in the future. As the Company continues to incur losses, transition to profitability is dependent upon the successful development, approval, and commercialization of its current or future product candidatecandidates as they become available and the achievement of a level of revenues adequate to support the Company’s cost structure. The Company may never achieve profitability, and unless and until it does, the Company will continue to need to raise additional cash. Management intends to fund future operations through additional private or public debt or equity offerings and may seek additional capital through arrangements with strategic partners or from other sources. Based on the Company’s operating plan, existing working
Working capital at March 31, 2020 was2021 is not sufficient to meet the cash requirements to fund planned operations through for the next 12twelve months without additional sources of cash. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern and do not include adjustments that might result from the outcome of this uncertainty. This basis of accounting contemplates the recovery of the Company’s assets and the satisfaction of liabilities in the normal course of business.
Management recognizes that the Company cannot move forward without adequate capital resources. The transactions anticipated with Cytocom and Forte will result in the assignment of certain debt and other liabilities of the Company experiencedbut will not provide immediate cash inflows to the Company.
Management is currently pursuing a net loss attributablestrategy to commonre-capitalize the Company and position it for future growth. Key steps in the process include:
● | Improve the condition of the Company’s financial position and balance sheet: | ||
○ | Complete the licensing transactions described herein. | ||
○ | Seek additional capital to continue to maintain operations and compliance with OTC reporting requirements. | ||
○ | Seek funding from current noteholders with exercisable warrants to convert such warrants as a means of raising capital and reducing outstanding debt. | ||
● | Identify and seek to acquire late-stage assets for future commercialization. | ||
● | Build out an appropriate operational infrastructure, generate new opportunities and grow shareholder value. |
If the Company is unable to secure new working capital, other alternatives strategies will be required.
There can be no guaranties that the Company will be successful in:
● | Executing its restructuring plan | |
● | Securing adequate capital to continue operations. | |
● | Identifying and acquiring assets for future development. |
Company History
Immune Therapeutics, Inc. (the “Company”) was initially incorporated in Florida on December 2, 1993 as Resort Clubs International, Inc. (“Resort Clubs”). It was formed to manage and market golf course properties in resort markets throughout the United States. Galliano International Ltd. (“Galliano”) was incorporated in Delaware on May 27, 1998 and began trading in November 1999 through the filing of a 15C-211. On November 10, 2004, Galliano merged with Resort Clubs. Resort Clubs was the surviving corporation. On August 23, 2010, Resort Clubs changed its name to pH Environmental Inc. (“pH Environmental”).
On April 23, 2012, pH Environmental completed a name change to TNI BioTech, Inc., and on April 24, 2012, we executed a share exchange agreement for the acquisition of all the outstanding shares of TNI BioTech IP, Inc. On September 4, 2014, a majority of our shareholders approved an amendment to our Amended and Restated Articles of $792,873 duringIncorporation, as amended, to change our name to Immune Therapeutics, Inc. We filed our name change amendment with the three months ended March 31, 2020, resultingSecretary of State of Florida on October 27, 2014 changing our name to Immune Therapeutics, Inc.
In July 2012, the Company’s focus turned to acquiring patents that would protect and advance the development of new uses of opioid-related immune-therapies.
Due to its inability to move forward on the proposed plan the Company has been forced to pursue alternatives to the original restructuring strategy. To realize the potential value of its technology positions, the Board directed management to pursue sublicensing options to Forte and Cytocom as further described in stockholders’ deficit of $385,399,942 at that date.Note 7.
2. Summary of Significant Accounting Policies
Basis of Presentation
The condensed consolidated financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been omitted. However, in the opinion of management, all adjustments (which include only normal recurring adjustments, unless otherwise indicated) necessary to present fairly the financial position and results of operations for the periods presented have been made. The results for interim periods are not necessarily indicative of trends or of results to be expected for the full year. These financial statements should be read in conjunction with the financial statements of the Company for the year ended December 31, 20192020 (including the notes thereto) set forth in Form 10- K.
We have identified the policies below as critical to our business operations and the understanding of its results of operations. The Company’s senior management has reviewed these critical accounting policies and related disclosures with the Company’s Board of Directors. The impact and any associated risks related to these policies on our business operations are discussed throughout this section where such policies affect our reported and expected financial results.
The Company qualifies as an “emerging growth company” as defined in Section 101 of the Jumpstart our Business Startups Act (“JOBS Act”) as we do not have more than $1,000,000,000 in annual gross revenue for the year ended December 31, 2019. We are electing to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1) of the JOBS Act.
Shares Issued and Outstanding
On October 25, 2019, the Company closed voting by written consent as detailed in its Proxy Statement on form 14A, filed September 5, 2019 pursuant to Section 14(a) of the Securities Exchange Act of 1934, as amended (“Proxy Statement”). The Proxy Statement disclosed actions for which the Company was soliciting written consent, including consent to effect a reverse stock split of the Company’s issued and outstanding, but not authorized, common stock (the “Reverse Split”) at a ratio of 1,000-to-1. The Company’s shareholders approved a 1,000:1 reverse stock split in October 2019. The action was filed with the Reverse Split. The implementationState of Florida during the first quarter of 2020 at which time all current and historical financial reporting was restated to reflect the impact of the shareholderreverse split on per share and warrant grant disclosures. On May 6, 2021, the Company received approval is subject to approval byfrom the Financial Industry RegulatoryInformation Reporting Authority (“FINRA”).In connection with our application to FINRA, on February 6, 2020, we filed Articles of Amendment to our Articles of Incorporation to effect the reverse stock split of our issued and outstanding, but not authorized, common stock at a ratio of 1 to 1,000. On March 12, 2020 we corrected a typographical error to reflect the proper ratio of 1 to 1,000 by the filing of Articles of Amendment to our Articles of Incorporation. Although we filed the Articles of Amendment at FINRA's instruction, on June 9, 2020, we were advised by FINRA that our 1 for 1,000 reverse stock split would not be processed. By not processing the reverse stock split, quotations for our common stock do not reflect the 1 for 1,000 reverse stock split, which occurred on February 6, 2020. The financial statements accompanying this Form 10-Q are presented on the basis of the implementation of the reverse stock split.
Use of Estimates
The preparation of the Company’s financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from such estimates.
Cash, Cash Equivalents, and Short-Term Investments
The Company considers all highly liquid investments with original maturities at the date of purchase of three months or less to be cash equivalents. Cash and cash equivalents include bank demand deposits, marketable securities with maturities of three months or less at purchase, and money market funds that invest primarily in certificates of deposits, commercial paper and U.S. government and U.S. government agency obligations. Cash equivalents are reported at fair value.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk are primarily cash and cash equivalents. The Company is exposed to credit risk, subject to federal deposit insurance, in the event of a default by the financial institutions holding its cash and cash equivalents to the extent of amounts recorded on the condensed consolidated balance sheets. The cash accounts are insured by the Federal Deposit Insurance Corporation up to $250,000. At March 31, 2020,2021, the Company has no cash balances in excess of insured limits.
Segment and Geographic Information
Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business in one operating segment and does not segment the business for internal reporting or decision making.
Fair Value of Financial Instruments
In accordance with the reporting requirements of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 825, “Financial Instruments”, the Company calculates the fair value of its assets and liabilities which qualify as financial instruments under this standard and includes this additional information in the notes to the financial statements when the fair value is different than the carrying value of those financial instruments. Cash, cash equivalents and accounts payable are accounted for at cost which approximates fair value due to the relatively short maturity of these instruments. The carrying value of notes payable also approximate fair value since they bear market rates of interest and other terms. None of these instruments are held for trading purposes.
Derivative Financial Instruments
FASB ASC 820, Fair Value Measurements requires bifurcation of certain embedded derivative instruments in certain debt or equity instruments, and measurement at their fair value for accounting purposes. A holder redemption feature embedded in the Company’s note payable requires bifurcation from its host instrument and is accounted for as a freestanding derivative.
Fixed Assets
Fixed assets are stated at cost, less accumulated depreciation. Depreciation is determined on a straight-line basis over the estimated useful lives of the assets, which generally range from three to five years. Maintenance and repairs are charged against expense as incurred. Depreciation expense for the quarters ended March 31, 2020 and March 31, 2019 was $159 and $387, respectively.
Impairment of Long-Lived Assets
The Company evaluates long-lived assets for impairment whenever events or change in circumstances indicate that the carrying amount of an asset may not be recoverable as prescribed by ASC Topic 360-10-05, “Property, Plant and Equipment.” If the carrying amount of the asset, including any intangible assets associated with that asset, exceeds its estimated undiscounted net cash flow, before interest, the Company will recognize an impairment loss equal to the difference between its carrying amount and its estimated fair value.
Research and Development Costs
Research and development costs are charged to expense as incurred and are typically comprised of salaries and benefits, pre-clinical studies, clinical trial activities, drug development and manufacturing, feesexpenses associated with advancing the commercialization of our technologies. Expenses recognized in the quarter ended March 31, 2021 consisted of amounts paid to consultants and other entities that conduct certain research and development activities on the Company’s behalf and third-party service fees, including clinical research organizations and investigative sites. Costs for certain development activities, such as clinical trials are recognized based on an evaluation of the progress to completion of specific tasks using data such as patient enrollment, clinical site activations, or information provided by vendors on their actual costs incurred. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the financial statements as operating expenses.patent related activities.
Income Taxes
The Company follows ASC Topic 740, Income Taxes, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statements and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the asset will not be realized. 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 standard addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC Topic 740, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the tax authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. ASC Topic 740 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. At the date of adoption, and as of March 31, 20202021 and 2019,2020, the Company does not have a liability for unrecognized tax uncertainties.
The Company’s policy is to record interest and penalties on uncertain tax positions as income tax expense. As of March 31, 2020,2021, and 2019,2020, the Company has not accrued any interest or penalties related to uncertain tax positions.
Stock-Based Compensation and Issuance of Stock for Non-Cash Consideration
The Company measures and recognizes compensation expense for all share-based payment awards made to employees and directors including employee stock options, based on estimated fair values equaling either the market value of the shares issued, or the value of consideration received, whichever is more readily determinable. The majority ofGenerally, the non-cash consideration pertains to services rendered by consultants and others and has been valued at the fair value of the Company’s common stock at the date of the agreement.
The Company’s accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of ASC Topic 505-50, “Equity-Based Payments to Non-Employees.718, “Compensation-Stock Compensation.” The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor’s performance is complete.
The Company did not grant any stock-based compensation awards during the three months ended March 31, 2021 and 2020.
Net LossIncome (Loss) per Share
The Company’s potentially dilutive securities, common stock warrants, have been included in the computation of diluted net income per share for the three-month period ended March 31, 2021. Net income per share for the three-month period ended March 31, 2021 was calculated by dividing the net income by the weighted-average number of common share outstanding for the period determined using the treasury-stock method and the if-converted method.
Basic net loss per share is calculated by dividing the net loss attributable to common stockholders by the weighted average number of common shares outstanding for the period, without consideration for common stock equivalents. Diluted net loss per share is calculated by dividingFor the net loss bythree-month period ended March 31, 2020, the weighted-average number of common share equivalents outstanding for the period determined using the treasury-stock method and the if-converted method. Dilutive common stock equivalents are comprised of common stock purchase warrants outstanding. For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding due to the Company’s net loss position.
The Company’s potentialpotentially dilutive securities which include stock and warrants, have beenwere excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per common share. Therefore, the weighted-average Commoncommon stock outstanding used to calculate both basic and diluted net loss per share is the same.same for the three-month period ended March 31, 2020.
The following shares
A reconciliation of potentially dilutive securities have been excluded from the computations of diluted weighted average shares outstanding used in basic and diluted earnings per share computation is as the effect of including such securities would be antidilutive:follows:
At March 31, | ||||||||
2020 | 2019 | |||||||
Common Stock Purchase Warrants | 13,387,936 | 10,466,126 | ||||||
Convertible Debt | 137,585 | 112,943 |
Net Income (Numerator) | Weighted Average Common Shares (Denominator) | Per Share Amount | ||||||||||
Basic EPS | ||||||||||||
Income available to common stockholders | $ | 790,407 | 478,305 | $ | 1.65 | |||||||
Diluted EPS | ||||||||||||
Effect of warrants convertible into common stock | 20,012,083 | |||||||||||
Potential shares purchasable using proceeds of warrants | (3,925,915 | ) | ||||||||||
Effect of convertible debt | 30,422 | |||||||||||
Income available to common stockholders | $ | 790,407 | 16,594,895 | $ | 0.05 |
Recent Accounting Standards
DuringThe Company has reviewed the quarter ended March 31, 2020, there were several new accounting pronouncements issued by the Financial Accounting Standards Board. Each of theseBoard during the first quarter 2021. Applicable pronouncements as applicable, has been or will be adopted by the Company.Company in accordance with the accounting guidance and definition. Management does not believe the adoption of any of these accounting pronouncements has had or will have a material impact on the Company’s consolidated financial statements.
3. Accrued Liabilities
Accrued expenses and other liabilities consist of the following:
March 31, 2020 | December 31, 2019 | |||||||
Accrued payroll | $ | 3,850,950 | $ | 3,610,810 | ||||
Accrued interest and penalties – notes payable | 996,351 | 899,904 | ||||||
Estimated legal settlements | 136,057 | 136,057 | ||||||
Other accrued liabilities | 50,000 | 48,217 | ||||||
Total accrued expenses and other liabilities | $ | 5,033,358 | $ | 4,694,988 |
4. Notes payable
Notes payable consist of the following:
March 31, 2020 | December 31, 2019 | |||||||
Promissory notes issued between November 26, 2014 and December 31, 2015, to raise up to $2,000,000 in debt. Lenders earn interest at a rate of 10% per annum, plus a pro-rata share of two percent of the Company’s gross receipts for sales of IRT-103-LDN in perpetuity. Notes will be repaid in 36 monthly installments of principal and interest commencing no later than October 15, 2015. These notes were in default at March 31, 2020, as the Company was unable to pay installments on their due dates. | 286,000 | 286,000 | ||||||
Promissory notes issued between May 1, 2015 and December 31, 2016 and maturing between June 14, 2015 and December 1, 2017. Lenders on loans aggregating $675,994 earn interest at rates between 2% and 10% per annum. One loan, in the amount of $100,000, interest was payable in a fixed amount not tied to a specific interest rate. However, this note was extinguished and reassigned to a related party in 2019. The Company was unable to repay the remaining notes at maturity and at March 31, 2020 these notes were in default. | 625,994 | 625,994 | ||||||
Promissory notes issued to an officer of the Company effective November 3, 2015 and maturing November 3, 2016 for settlement of accrued payroll, bearing interest at 10% per annum and including a stock conversion feature. The Company was unable to repay the note at maturity and at March 31, 2020 the note was in default. | 97,737 | 97,737 | ||||||
Promissory notes issued between July 1, 2016 and December 31, 2016. Lenders earn interest at 2% per annum. The notes mature on December 31, 2017, and at March 31, 2020 the notes were in default. | 206,000 | 206,000 | ||||||
Promissory notes aggregating $1,350,000 issued in the fourth quarter 2016. The notes accrue interest at 2% per annum and mature between November 1, 2017 and December 31, 2017. As March 31, 2020, the notes were in default. | 1,354,000 | 1,354,000 | ||||||
Promissory notes aggregating $500,000 issued in the first quarter of 2017. The notes accrue interest at 2% per annum and mature between January 12, 2018 and September 30, 2018. At March 31, 2020, the notes were in default. | 500,000 | 500,000 | ||||||
Promissory notes aggregating $300,000 issued in the second quarter of 2017. The notes accrue interest at 2% per annum and mature between April 3, 2018 and May 31, 2018. At March 31, 2020, the notes were in default. | 300,000 | 300,000 | ||||||
Promissory notes aggregating $191,800 issued in the third quarter of 2017. The notes accrue interest at 2% per annum and mature between June 16, 2018 and December 31, 2018. At March 31, 2020, the notes were in default. | 191,800 | 191,800 | ||||||
Promissory note for $425,000 issued in October 2017 with an original issue discount of $70,000. The note is in default, giving the holder an option to convert the note to stock using the lowest value of the Company’s common stock 25 days prior to the conversion. In 2018, the defaults also resulted in certain penalties, as a result of which the principal amount of the note outstanding at March 31, 2020 had increased to $454,032. $49,943 of accrued interest owed on the note has been converted to stock. The Company has accrued a $1,109,509 derivative liability for the remaining conversion right. | 454,032 | 454,032 | ||||||
Promissory notes aggregating $105,500 issued in the fourth quarter of 2017. The notes accrue interest at 2% per annum. At March 31, 2020, the notes were in default. | 105,500 | 105,500 | ||||||
Promissory notes aggregating $47,975 issued in the first quarter of 2018. The notes accrue interest at 2% per annum and mature between May 2018 and January 2019. At March 31, 2020, the notes were in default. | 47,975 | 47,975 |
Promissory notes aggregating $125,000 issued in the first quarter of 2018. The notes accrue interest between 2% and 12% per annum and mature between April 2018 and June 2018. These notes include warrants between 5,000 and 20,000 shares with an exercise price of $0.5. At March 31, 2020 the notes were in default | 125,000 | 125,000 | ||||||
Promissory notes aggregating $65,000 issued in the second quarter of 2018. The notes accrue interest between 2% per annum and mature between July 2018 and October 2018. These notes include warrants between 1,000 and 5,000 shares with an exercise price of $5. At March 31, 2020 the notes were in default | 65,000 | 65,000 | ||||||
Promissory notes aggregating $198,000 issued in the third quarter of 2018. The notes accrue interest at 2% per annum and mature between November 2018 and January 2019. These notes include warrants between 600 and 5,000 shares with an exercise price of $5. At March 31, 2020, the notes were in default. | 198,000 | 198,000 | ||||||
Promissory notes aggregating $533,855 issued in the fourth quarter of 2018. The notes accrue interest from 2% to 3.5% per annum and mature between February 2019 and December 2019. These notes include warrants between 200 and 39,500 shares with an exercise price of $5 to $40. At March 31, 2020, the note was in default. | 533,855 | 533,855 | ||||||
Promissory note for $23,000 issued in the first quarter of 2019. The note accrues interest at 2% per annum and matures during July 2019. The note includes warrants for 4,600 shares with an exercise price of $5. At March 31, 2020, the note was in default. | 23,000 | 23,000 | ||||||
Promissory note for $231,478 issued in the first quarter of 2019. The note accrues interest at 6% per annum and matured in February 2020. At March 31, 2020, the notes were in default. | 231,478 | 231,478 | ||||||
Promissory notes aggregating $50,000 issued in the second quarter of 2019. The notes accrue interest at 2% per annum and mature between July and September 2019. These notes include warrants for 10,000 shares with an exercise price of $5. At March 31, 2020, the notes were in default. | 50,000 | 50,000 | ||||||
Promissory note in the amount of $150,000 issued on October 1, 2019 for the settlement of outstanding debt in the same amount. The note accrues interest at 15% per annum, with $1,875 due in monthly interest payments. and matures on April 30, 2021. | 150,000 | 150,000 | ||||||
Total | $ | 5,545,371 | $ | 5,545,371 |
As of March 31, 2020, the Company had accrued $996,351 in unpaid interest and default penalties. During the quarter ended March 31, 2020, no shares were issued by the Company in settlement of promissory notes.
As of March 31, 2019,2021 and December 31, 2020, the Company had accrued $877,570$1,677,275 and $1,639,275, respectively, in unpaid interest and default penalties. notes payable to shareholders of record.
During the first quarter of 2021, the Company issued 5,402 common shares, at a price of $10.40 per share, upon the conversion of $53,000 in promissory notes and $3,480 in accrued interest. The Company did not issue any in new promissory notes during the three months ended March 31, 2019, 18,255,225 shares with a fair value of $78,500 were2021.
The Company issued by the Company for settlement of$53,000 in new promissory notes totaling $27,710.during the three months ended March 31, 2020. The noteholder
converted the principal and all accrued interest in the amount of $3,180 in October 2020. The Company issued 6,893 shares of common stock at an average price per share of $8.15 in connection with this conversion.
5. Derivative LiabilitiesA summary of Notes Payable at March 31, 2021 and December 31, 2020 follows.
March 31, 2021 | December 31, 2020 | |||||||
Promissory notes issued between December 2014 and January 2015. Lender earns interest at 10%, plus a pro-rata share of two percent of the Company’s gross receipts for sales of IRT-103-LDN in perpetuity. Notes were to be repaid in 36 monthly installments of principal and interest commencing no later than October 15, 2015. These notes are in default. | $ | 70,000 | $ | 70,000 | ||||
Promissory notes issued between May 2015 and June 2016 and maturing between February 2017 and November 2018. Lenders earn interest at rates between 2% and 10%. These notes are in default. | $ | 149,500 | 149,500 | |||||
Promissory notes aggregating $1,350,000 issued in 2016. The notes accrue interest at 2% and mature between November 2017 and December 2017. These notes are in default. | $ | 606,500 | 606,500 | |||||
Promissory notes aggregating $500,000 issued in 2017 accrue interest at 2% and mature between January 2018 and September 2018. These notes are in default. | $ | 205,000 | 205,000 | |||||
Promissory notes aggregating $300,000 issued in 2017 accrue interest at 2% and mature in May 2018. These notes are in default. | $ | 150,000 | 150,000 | |||||
Promissory notes aggregating $191,800 issued in 2017 accrue interest at 2% and mature between August 2018 and September 2018. These notes are in default. | $ | 116,800 | 116,800 | |||||
A promissory note for $425,000 was issued in October 2017 with an original issue discount of $70,000 and an annual interest rate of 22% on all outstanding balances. The note is in default, giving the holder an option to convert the note to stock using the lowest value of the Company’s common stock 25 days prior to the conversion. The defaults triggered certain penalties, resulting in an outstanding balance of $454,032. The original noteholder entered into a Note Purchase Agreement, in the amount of $697,600 reflecting the total principal, interest and penalties associated with this instrument, and transferred the note to Global Reverb Corp., an entity wholly owned by the Company’s former Chief Executive Officer and director, Noreen Griffin. During the first quarter of 2021, the Global Reverb Corp. sold 50% of the value of the note to another investor. | $ | 697,600 | 454,032 | |||||
13 |
Promissory notes aggregating $105,500 issued in 2017 accrue interest at 2%. These notes were in default. | $ | 105,500 | 105,500 | |||||
Promissory notes aggregating $47,975 issued in the 2018 accrue interest at 2% and mature between May 2018 and January 2019. These notes are in default. | $ | 47,975 | 47,975 | |||||
Promissory notes aggregating $65,000 issued in 2018 accrue interest at 2% and mature between July 2018 and October 2018. These notes include warrants between 1,000 and 5,000 shares with an exercise price of $5. These notes are in default. | $ | 65,000 | 65,000 | |||||
Promissory notes aggregating $208,000 were issued in 2018, of which $3,000 were issued to a related party. The notes accrue interest at 2% and mature between August 2019 and January 2019. These notes include warrants between 60,000 and 500,000 shares with an exercise price of $0.05. These notes are in default. | $ | 118,000 | 118,000 | |||||
Promissory notes aggregating $533,855 were issued in 2018, of which $210,000 is to a related party. The notes accrue interest at 2% and mature between January 2019 and November 2019. These notes include warrants between 200 and 39,500 shares with an exercise price of $5 to $40. These notes are in default. | $ | 323,855 | 323,855 | |||||
Promissory note for $23,000 issued to a related party in the first quarter of 2019. The note accrues interest at 2% and matured during July 2019. The note includes warrants for 4,600 shares with an exercise price of $5. The note is in default. | $ | 23,000 | 23,000 | |||||
Promissory note issued in the first quarter of 2019. The note accrues interest at 6% and matured in February 2020. The note is in default. | $ | 231,478 | 231,478 | |||||
Promissory notes for $50,000 issued in the second quarter of 2019 accrues interest at 2% and matured in July 2019. The notes include warrants for 10,000 shares with an exercise price of $5. The note is in default. | $ | 10,000 | 10,000 | |||||
Promissory note issued on October 2019 for the settlement of outstanding debt in the same amount. The note accrues interest at 15% per annum, with $1,875 due in monthly interest payments, and matures on April 30, 2021. | $ | 150,000 | 150,000 | |||||
Promissory note issued in the third quarter of 2020 accrues interest at 12% and matures in August 2021. The Company recognized a $54,312 derivative liability for the conversion rights attached to the note as of December 31, 2020. This outstanding principal and interest accrued on this note was converted into 5,402 common shares in February 2021. | $ | - | 53,000 | |||||
3,070,208 | 2,879,640 | |||||||
Less: Original issue discount on notes payable and warrants issued with notes. | - | (34,789 | ) | |||||
Total | $ | 3,070,208 | $ | 2,844,851 |
As of March 31, 2020 and December 31, 20192020, the aggregateCompany had $453,782 and $635,217, respectively, in accrued and unpaid interest and default penalties.
4. Derivative Liabilities
As of March 31, 2021, and December 31, 2020 the fair value of the outstanding derivative liabilities was $1,109,509zero and $798,126,$1,254,444, respectively.
During the three-month period ended March 31, 2021, the Company entered into a Note Exchange Agreement with a noteholder that resulted in the issuance of new non-convertible promissory notes of $697,600 in exchange for outstanding convertible promissory note with related accrued interest. The new notes do not have conversion rights and as such, the Company reversed a derivative liability of $1,200,129 during the first quarter of 2021.
The Company estimatedissued 5,402 common shares, during the first quarter of 2021, in connection with a noteholder’s election to convert $56,480 in principal and interest to common shares. The Company recognized $21,899 for the change in fair market value on related derivative liability prior to the conversion and reverse $76,211 in derivative liabilities for the conversion rights upon issuance of the derivative liability using the Black-Scholes option pricing model using the following key assumption during the quarter March 31, 2020:common shares.
| ||||
The Company determines the fair values of its financial instruments based on the fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The following three levels of inputs may be used to measure fair value:
Level 1 Quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.
Level 2 Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
● | Level 1 Quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. | |
● | Level 2 Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | |
● | Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. |
The Company measured the fair market value of the assets or liabilities.
The Company usesconversion option associated with certain convertible notes, at December 31, 2020 utilizing Level 3 inputs to estimate the fair valuewhich resulted in a derivative liability of its derivative liabilities.$1,254,441.
The following schedule summarizes the valuation of financial instruments at fair value in the balance sheet as of March 31, 2020:
Fair Value Measurements as of March 31, 2020 | ||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||
Assets | ||||||||||||
Total assets | - | - | - | |||||||||
Liabilities | ||||||||||||
Conversion option derivative liability | $ | - | $ | - | $ | 1,109,509 | ||||||
Total liabilities | $ | - | $ | - | $ | 1,109,509 |
The following table set forth aA reconciliation of changes in the fair value of derivative liabilities classified as Level 3 in the fair value hierarchy:hierarchy follows:
Conversion option derivative liability | ||||
Beginning balance | $ | 798,126 | ||
Change in fair value | 311,383 | |||
Ending balance | $ | 1,109,509 |
Conversion option derivative liability | ||||
Balance December 31, 2020 | $ | 1,254,441 | ||
Change in fair value | 21,899 | |||
Settlement of liability upon debt exchange and conversion | (1,276,340 | ) | ||
Balance March 31, 2021 | $ | - |
65. Capital Structure – Common Stock and Stock Purchase Warrants
Each holder of common stock is entitled to vote on all matters and is entitled to one vote for each share held. No holder of shares of stock of any class shall be entitled as a matter of right to subscribe for or purchase or receive any part of any new or additional issue of shares of stock of any class, or of securities convertible into shares of stock or any class, whether now hereafter authorized or whether issued for money, for consideration other than money, or by way of dividend.
Stock Warrants
InDuring the three months ended March 31, 2021 and March 31, 2020, no new warrants were issued by the Company.
or exercised. There were no modifications ofto the terms of any warrants issued by the Company during these periods.
At March 31, 2021, the Company had a total of 20,068,435 warrants rights outstanding. Included in the quartersoutstanding warrants are 18,730,000 warrants, held by thirty one investors with an exercise price of $0.05 per share, that include provisions that limit the maximum impact of a reverse split on their warrant shares and the exercise price per share at 10-to-1.
The following is a summary of outstanding common stock warrants for the three-month period ended March 31, 2020 and 2019.2021.
Expiration Date | Number of Shares | Exercise Price | Remaining Life (years) | |||||||||
Second Quarter 2021 | 5,812 | $ | 14-200 | .25 | ||||||||
Third Quarter 2021 | 5,167 | $ | 30-200 | .50 | ||||||||
Fourth Quarter 2021 | 300 | $ | 100 | .75 | ||||||||
First Quarter 2022 | 150 | $ | 200 | 1.00 | ||||||||
Second Quarter 2022 | 1,750 | $ | 150 | 1.25 | ||||||||
Third Quarter 2022 | 1,650 | $ | 50-100 | 1.50 | ||||||||
Fourth Quarter 2022 | 9,811 | $ | 80-290 | 1.75 | ||||||||
First Quarter 2023 | 1,204,000 | $ | 0.05-40 | 2.00 | ||||||||
Second Quarter 2023 | 802,000 | $ | 0.05-200 | 2.25 | ||||||||
Third Quarter 2023 | 7,521,500 | $ | 0.05-100 | 2.50 | ||||||||
Fourth Quarter 2023 | 6,024,300 | $ | 0.05-0.20 | 2 .75 | ||||||||
First Quarter 2024 | 3,660,000 | $ | 0.05 | 3.00 | ||||||||
Second Quarter 2024 | 800,000 | $ | 5.00 | 3.25 | ||||||||
Third Quarter 2028 | 3,000 | $ | 70 | 7.50 | ||||||||
Second Quarter 2032 | 28,995 | $ | 10-70 | 11.25 | ||||||||
20,068,435 | $ | 0.05-200 |
Following is a summary of outstanding stock warrants at, and activity duringfor the three months ended March 31, 2020:2021:
Number of Shares | Exercise Price | Weighted Average Price | ||||||||||
Warrants as of December 31, 2019 | 13,388,936 | $ | 0.05-500 | $ | 2.43 | |||||||
Issued in 2020 | - | $ | - | $ | - | |||||||
Expired and forfeited | (1,000 | ) | $ | 100 | $ | 5.00 | ||||||
Exercised | - | $ | - | $ | - | |||||||
Warrants as of March 31, 2020 | 13,387,936 | $ | 0.05-500 | $ | 2.40 |
Summary of outstanding warrants as of March 31, 2020:
Expiration Date | Number of Shares | Exercise Price | Remaining Life (years) | |||||||||
Second Quarter 2020 | 300 | $ | 500 | 0.25 | ||||||||
Fourth Quarter 2020 | 1,000 | $ | 200 | 0.75 | ||||||||
First Quarter 2021 | 12,600 | $ | 200 | 1.00 | ||||||||
Second Quarter 2021 | 5,812 | $ | 14-200 | 1.25 | ||||||||
Third Quarter 2021 | 5,167 | $ | 30-200 | 1.50 | ||||||||
Fourth Quarter 2021 | 300 | $ | 100 | 1.75 | ||||||||
First Quarter 2022 | 150 | $ | 200 | 2.00 | ||||||||
Second Quarter 2022 | 1,750 | $ | 150 | 2.25 | ||||||||
Third Quarter 2022 | 1,650 | $ | 50-100 | 2.50 | ||||||||
Fourth Quarter 2022 | 9,811 | $ | 80-290 | 2.75 | ||||||||
First Quarter 2023 | 9,000 | $ | 5-40 | 3.00 | ||||||||
Second Quarter 2023 | 213,000 | $ | 0.05-200 | 3.25 | ||||||||
Third Quarter 2023 | 7,026,500 | $ | 0.05-100 | 3.50 | ||||||||
Fourth Quarter 2023 | 6,024,300 | $ | 0.05-20 | 3.75 | ||||||||
First Quarter 2024 | 36,600 | $ | 5 | 4.00 | ||||||||
Second Quarter 2024 | 8,000 | $ | 5 | 4.25 | ||||||||
Third Quarter 2028 | 3,000 | $ | 70 | 8.50 | ||||||||
Second Quarter 2032 | 28,995 | $ | 10-70 | 12.25 | ||||||||
13,387,936 | $ | 0.05-500 |
Number of Shares | Exercise Price | Weighted Average Price | ||||||||||
Warrants as of December 31, 2020 | 20,081,035 | $ | 0.05-200 | $ | 0.68 | |||||||
Issued | - | $ | - | $ | - | |||||||
Expired and forfeited | (12,600 | ) | $ | 200 | $ | 200 | ||||||
Exercised | - | $ | - | $ | - | |||||||
Warrants as of March 31, 2021 | 20,068,435 | $ | 0.05-200 | $ | 0.55 |
7. Stock Compensation
Shares Issued for Services
During the quarters ended March 31, 2020 and 2019, the Company issued 0 and 3,000,000 shares of common stock respectively for consulting fees. The Company valued these shares at $0 and $120,000 respectively, based upon the fair value of the common stock at the dates of the agreements.
8. 6. Income Taxes – Results of Operations
There was no income tax expense reflected in the results of operations for the years ended March 31, 20202021 and 20192020 because the Company incurred a net loss in both years.
For U.S. federal purposes the corporate statutory income tax rate was 21%, for 2019 and 2020 tax years.
The Company has recognized no tax benefit for the losses generated for the periods through March 31, 2020. ASC Topic 740 requires that a valuation allowance be provided if it is more likely than not that some portion or all of a deferred tax asset will not be realized. The Company’s ability to realize the benefit of its deferred tax asset will depend on the generation of future taxable income. Because the Company has yet to recognize revenue, we believe that the full valuation allowance should be provided.
Our effective tax rate for fiscal years 2020 and 2019 was 0%. Our tax rate can be affected by recurring items, such as tax rates in foreign jurisdictions and the relative amount of income we earn in jurisdictions. It may also be affected by discrete items that may occur in any given year but are not consistent from year to year.
9. LicensesFor U.S. federal purposes the corporate statutory income tax rate was 21%, for 2021 and Supply2020 tax years. The Company has recognized no tax benefit for the losses generated for the periods through March 31, 2021. ASC Topic 740 requires that a valuation allowance be provided if it is more likely than not that some portion or all a deferred tax asset will not be realized. The Company’s ability to realize the benefit of its deferred tax asset will depend on the generation of future taxable income. Because the Company has yet to recognize revenue, we believe that the full valuation allowance should be provided.
7. Licenses Agreements
PatentDue to the Company’s need to generate short term cash flow to fund operations, the Company sublicensed all of its remaining technology to Forte and Subsidiary AcquisitionCytocom Inc. as detailed below. The Company is currently seeking to acquire pharmaceutical and medical device products, technology and/or intellectual property that it can incubate for future commercialization using its experience and expertise in this area.
Forte Animal Health, Inc.
On February 27, 2020, the Company approved and entered into a license agreement (the “License Agreement”) with Forte Animal Health Inc. (“Forte”). Forte has yet to fund the consideration defined in the agreement. This license agreement has not been fully executed and as such the underlying license is not yet effective.
Under the License Agreement, the Company granted Forte an exclusive license to develop and commercialize pharmaceutical products consisting of Lodonal and MENK for use in veterinary applications for all indications world-wide. Milestone payments and royalties are defined in the agreement based on development and royalties are based on sales during the license period.
The Initial License Fee includes the assumption of certain Company defaulted Notes and other liabilities. Forte will assume a minimum of IMUN defaulted debt and to assume certain additional obligations of the Company. The note holders and vendors associated with the assigned liabilities have not yet assigned their rights to Forte.
Consideration for February 28, 2020 License to Forte
Consideration Assumption of: | ||||
Notes in Default | $ | 1,787,706 | ||
Accounts payable and accruals | 261,706 | |||
Past Due Employee Obligations | 990,201 | |||
Total Consideration to be Recognize Upon Execution | $ | 3,039,613 |
The documentation and sign off of this agreement related to the Forte license has yet to be signed and the individual lenders need to provide their approval for the transfer of these notes. As such the accompanying financial statements do not reflect any gain on sale. Until such time as the transaction is completed Forte does not have clear title and interest to the veterinary rights.
Forte has agreed to make payments to the Company in connection with this agreement as follows:
● | Initial License Fee, upon the assignment of certain Company Notes Payable. |
● | Development Milestone Payments upon the occurrence of the identified events, one-time, non-creditable, non-refundable milestone payments of $100,000 will be earned by the Company upon: (1) a successful MUMS designation and (2) upon a successful conditional approval. | |
● | Commercial Milestone Payments upon reaching the mutually agreed aggregate net sales. Forte will pay one-time, non-creditable, non-refundable milestone payments to be negotiated and addressed in a separate Amendment later. | |
● | Royalties during the royalty term (generally 15 years from the first sale of a product in a country), royalties on annual net sales as follows: |
Annual Sales of Royalty Qualifying Licensed Products | Royalty Rate | |||
<$500,000,000 | 2 | % | ||
500,000,000 to < $1,000,000,000 | 4 | % | ||
> $1,000,000,000) | 6 | % |
Cytocom
In December 2013, the Company formed a subsidiary, Cytocom Inc. (“Cytocom”), to focus on conducting LDN and MENK clinical trials in the United States. In December 2014, the Company finalized the distribution of common stock of Cytocom to its shareholders. As part of the transaction (“Original Agreement”), the Company transferred to Cytocom certain of its rights, title and interest in or relating to intellectual property (i) patents, patent applications, and all divisional, continuations and continuations-in-part thereof, together with all reissues, reexaminations, renewals and extensions thereof and all rights to obtain such divisionals, continuations and continuations-in-part, reissues, reexaminations, renewals and extensions, and all utility models and statutory invention registrations and any other such analogous rights, (ii) trademarks, service marks, Internet domain names, trade dress, trade styles, logos, trade names, services names, brand names, corporate names, assumed business names and general intangibles and other source identifiers of a like nature, together with the goodwill associated with any of the foregoing, and all registrations and applications for registrations thereof, together with all renewals and extensions thereof and all rights to obtain such renewals and extensions, (iii) copyrights, mask work rights, database and design rights, moral rights and rights in Internet websites, whether registered or unregistered and whether published or unpublished, all registrations and recordings thereof and all applications in connection therewith, together with all renewals, continuations, reversions and extensions thereof and all rights to obtain such renewals, continuations, reversions and extensions, and (iv) confidential and proprietary information, including, trade secrets and know-how.
In December 2014, the Company transferred to Cytocom certain of its rights, title and interest in or relating to intellectual property. Cytocom licensed back to the Company a perpetual, non-exclusive, royalty-free right and license to use the assigned intellectual property for veterinary indications and for the marketing rights to emerging markets, access to all clinical data, use of the formulation for LDN and MENK.
The Original Agreement also granted the Company rights to market Lodonal™ and Met-Enkephalin (“MENK”) in “Emerging Markets,” which included all countries excluding Canada, Italy, Japan, France, Germany, United Kingdom, European Community, and the United States. Pursuant to the Original Agreement, the Company was required to pay Cytocom a 5% royalty on all sales all ongoing drug development and fees due in connection with the underlying patents until such time as Cytocom was funded.
On May 1, 2018, the Company entered into an amended and restated licensing agreement (the “Restated Agreement”) with Cytocom. The Restated Agreement restates the licensing arrangement between the Company and Cytocom as provided by the Original Agreement. The Restated Agreement grants the Company distribution and marketing rights for Lodonal™ and MENK for humans in Emerging Markets. In addition, the Company has been granted the rights to distribute and market Lodonal™ and MENK for animal use in the United States. The royalty due to Cytocom was reduced from 5% to 1% of sales and the Company no longer hadhas any ongoing obligations to pay for the cost in connection with the assets of Cytocom.
On June 4, 2018, the Company and Cytocom entered into a Stock Purchase Agreement (the “Stock Agreement”). Pursuant to the Stock Agreement, the Company cancelled approximately $4,000,000 of debt owed to it by Cytocom in exchange for ten percent (10%) of the issued and outstanding common stock of Cytocom, as calculated on a fully diluted basis. The Restated Agreement was a condition of the Stock Agreement.
On April 8, 2019, the Company signed a second amendment to its licensing agreement (the “Second Amendment”) with Cytocom. The Second Amendment confirmed that, as of its effective date (December 31, 2018) the Company owned 15.57% of the common shares issued and outstanding on that date. The Company agreed to assume the obligation to repay all accounts payable obligations and accrued liabilities owed by Cytocom as of the effective date, except those accounts’ payable obligations and accrued liabilities as specified in the Second Amendment. The Company also assumed the obligation to repay all notes payable, together with any interest or fees payable thereon, owed by Cytocom as of the effective date, except those notes’ payable obligations, together with any interest or fees payable thereon, as specified by the Second Amendment. The parties further agreed that in the event of a change of control of Cytocom, and at the option of Cytocom, the Company would have the right to purchase outright the Company’s licensing rights to Emerging Markets for humans under the License Agreement at a price equal to value of those licensing rights as determined by and independent valuator acceptable to the Company and Cytocom.
On May 13, 2020, the Company and Cytocom entered into Amendment to The Second Amendment to The License Agreement (“Third Amendment”) to their Second Amendment to The License Agreement that iswas effective December 31, 2018. The Third Amendment made changes tosublicense provides Cytocom with the lists of liabilities thatCompany’s previously licensed rights for LDN and MENK in Emerging Markets.
Terms for consideration for the sublicense were assigned bynot finalized until August 12, 2020 at which time Cytocom and the Company signed a letter agreement in which Cytocom agreed to assume a combination of defaulted notes plus certain other liabilities. The Company agreed to transfer all the rights, title, and interest to Cytocom in technology licensed from Penn State Research Foundation in exchange for Cytocom assuming all past due and future obligations under the Penn State license. While the Company formalized the agreement to deconsolidate on May 1, 2018, Cato Research Ltd and Penn State University, both vendors of the effective date. Simultaneously withCompany, did not consent to assign the Third Amendment,payables to Cytocom. As of March 31, 2021, the companies signed a PRC AmendmentCompany had outstanding accounts payable balances of $477,451 and $421,048 due to The Second Amendment to The License Agreement, in which they confirmed that the term “the Republic of China” in the Second Amendment means the People’s Republic of ChinaCato Research Ltd and not The Republic of China, also known as Taiwan.Penn State University, respectively.
On February 27,In the third quarter of 2020, the Company approved and entered intoreceived a license agreement (the “License Agreement”Notice of Default (“Notice”) with Forte Biotechnology International Corp. (“Forte”). Underfrom Cytocom relating to the License Agreement,sublicensing transaction. The Company disputes the Company granted Forte an exclusive licensevalidity of the Notice on the basis that Cytocom has failed to develop and commercialize pharmaceutical products consisting of Lodonal and MENK for use in veterinary applications for all indications world-wide. Asexecute on their consideration for the license, Forte agreed to make certain license, milestonelicense.
The Notes transaction has not been fully consummated. The Notes in default have been assigned and royalty payments to the Company. Forte is managedtransfer signed off by Noreen Griffin, a former Chief Executive Officerthe creditors, but Cytocom still has not completed the assumption of the Company.agreed upon obligations.
10. Consideration for May 13, 2020 License to Cytocom
Consideration Assumption of: | ||||
Notes in Default | $ | 3,038,107 | ||
Accounts payable and accruals | 1,052,123 | |||
Past Due Employee Obligations | 1,110,567 | |||
Total anticipated Consideration | $ | 5,200,797 | ||
Recognized through December 31, 2020 | (3,312,333 | ) | ||
To Be Recognized upon Execution | $ | 1,888,464 |
At March 31, 2021, the Company has an equity interest of 13.3% in Cytocom. In connection with the May 1, 2018 “Restated Agreement” with Cytocom, the Company no longer has ongoing obligations to pay for costs in connection with the assets of Cytocom. Accordingly, effective May 1, 2018, the Company deconsolidated Cytocom. The Company uses the equity method to account for its retained interest in Cytocom.
Commitments and Contingencies8. Subsequent Events
In October 2013, theThe Company announced on May 6, 2021, that FINRA has processed a reverse split of 1-for 1,000 of the signingissued and outstanding stock. The reverse stock split was completed with the state of Florida on March 12, 2020. FINRA’s processing was the last step necessary to fully effectuate the reverse split approved by shareholders in October of 2019. The Company’s common stock began trading on a Distribution Agreement with AHAR Pharma, a Nigerian company, tosplit-adjusted basis on the Over-the-Counter Exchange (OTC-PINK) at market Lodonal™, in Nigeria for the treatment of autoimmune diseases and cancer. AHAR intends to distribute Lodonal™ through a local distributor network, an Internet client base and directly to hospitals, pharmacists and doctors in Nigeria. The first deliveries under the agreement took place in February 2018. Due to the fact that AHAR Pharma failed to meet its contractual purchase obligations, the Company formally issued notice of default under the agreement.open on May 6, 2021.
On April 18, 2018, AHAR Pharma transferred its rights under the Distribution Agreement to Fidson Healthcare Plc (“Fidson”), and Fidson signed an exclusive distribution agreement with the Company to distribute Lodonal™. Discussions between the Company and Fidson in the first quarter of 2020 did notAs a result in any orders or shipments under this agreement.
Contract Manufacturing Agreements
On October 25, 2016, the Company and Acromax Dominicana, SA (“Acromax”), which is based in the Dominican Republic, entered into a contract for manufacturing of LDN tablets, capsules and/or creams (“Agreement”). Subject to the terms and conditions of the Agreement, Acromaxreverse stock split, each 1,000 pre-split shares of common stock outstanding will obtain all necessary licensesautomatically be combined into one issued and permitsoutstanding share of common stock. No fractional shares of common stock will be issued as a result of any reverse stock split, fractional shares will be rounded up to carry out the manufacturing and packaging of LDN in exchange for a fixed fee per tablet plus an additional fee for packaging, shipping and customs clearance. The Agreement has an initial term of five years unless terminated by either party in accordance with the terms.
whole shares.
18 |
Operating Leases
At March 31, 2020, the Company was a party to an agreement to lease office space in Winter Park, Florida. Rental expense for the three months ended March 31, 2020 and 2019 was $177 and $5,282 respectively.
11. Subsequent Events
On May 4, 2020, the Company issued a Convertible Promissory Note (the “Note”) to Geneva Roth Remark Holdings, Inc. (“Geneva Roth”) in the principal amount of $53,000. The Note matures on May 6, 2021, and bears interest at the rate of 12% per annum. Any amount of the Note not repaid at maturity will bear interest at the rate of 22% per annum.
Geneva Roth will have the right, at any time during the period beginning 180 days following the date of the Note and ending the later of the maturity date or the date of payment of the default amount, to convert all or any part of the outstanding and unpaid amount of the Note into shares of the Company’s common stock. The conversion price will be equal to 61% multiplied by the lowest trading price for the common stock during the 20 trading day period ending on the latest complete trading day prior to the conversion date. The Company has agreed to reserve from its authorized and unissued common stock a sufficient number of shares, free from preemptive rights, to provide for the issuance of common stock upon the full conversion of the Note. The Company is also required at all times to have authorized and reserved six times the number of shares that would be issuable upon full conversion of the Note (initially 47,391,952 shares).
On June 15, 2020, the Company issued a Convertible Promissory Note (the “Note”) to Geneva Roth Remark Holdings, Inc. (“Geneva Roth”) in the principal amount of $38,000. The Note matures on June 15, 2021, and bears interest at the rate of 12% per annum. Any amount of the Note not repaid at maturity, will bear interest at the rate of 22% per annum.
Geneva Roth will have the right, at any time during the period beginning 180 days following the date of the Note and ending the later of the maturity date or the date of payment of the default amount, to convert all or any part of the outstanding and unpaid amount of the Note into shares of the Company’s common stock. The conversion price will be equal to 61% multiplied by the lowest trading price for the common stock during the 20 trading day period ending on the latest complete trading day prior to the conversion date. The Company has agreed to reserve from its authorized and unissued common stock a sufficient number of shares, free from preemptive rights, to provide for the issuance of common stock upon the full conversion of the Note. The Company is also required at all times to have authorized and reserved six times the number of shares that would be issuable upon full conversion of the Note (initially 30,636,925 shares).
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
Forward-Looking Statements and Associated Risks
The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. This sectionreport contains certain forward-looking statements that are based on the beliefs of management as well as assumptions made by and currently available to management. The statements contained in this report relating to matters that are not historical facts are forward-looking statements that involve risks and uncertainties, including, but not limited to, future demand for our products and services, the successful commercialization of our products, general domestic and global economic conditions, government and environmental conditions and regulations, competition and customer strategies, changes in our business strategy or development plans, capital deployment, business disruptions, including those by fires, raw material supplies, environmental regulations, and other partsrisks and uncertainties, certain of which are beyond our control. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may differ materially from those forward-looking statements. For further discussion of certain of the matters described above see the Cautionary Note Regarding Forward-Looking Statements included in our 2020 Annual Report on Form 10-K.
Undue reliance should not be placed on our forward-looking statements. Except as required by law, we disclaim an obligation to update any factors or to publicly announce the results of any revisions to any of the forward-looking statements contained in this quarterly report on Form 10-Q to reflect new information, future events, or other developments. The following discussion and analysis should be read in conjunction with the accompanying condensed consolidated financial statements and notes thereto appearing elsewhere in this Form 10-Q contain forward-looking statements. 10-Q.
Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. Forward-looking statements also can be identified by words such as “future,” “anticipates,” “believes,” “estimates,” “expects,” “intends,” “will,” “would,” “could,” “can,” “may,” and similar terms. Forward-looking statements are not guaranteesa guarantee of future performance and the Company’s actual results may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such differences include, but are not limited to, those discussed in our Annual Report on Form 10-K/A for the year ended December 31, 2019 filed with the Securities and Exchange Commission on May 14, 2020 (the “2019 Form 10-K”) under the heading “Risk Factors”statements.
The following discussion should be read in conjunction with the 2019 Form 10-K and the consolidated financial statements and notes thereto included elsewhere in this Form 10-Q. All information presented herein is based on the Company’s fiscal calendar. Unless otherwise stated, references in this report to particular years, quarters, months or periods refer to the Company’s fiscal years ended in December and the associated quarters, months, or periods of those fiscal years. Each of the terms the “Company”, “we”, “us” or “our” as used herein refers collectively to Immune Therapeutics, Inc. and its subsidiaries, unless otherwise stated. The Company assumes no obligation to revise or update any forward-looking statements for any reason, except as required by law.
Company Overview
Immune Therapeutics Inc. (the “Company” or “IMUN”) is a Florida Public Company trading on the OTC-Pink. We are a drug development and commercialization company. We identify, evaluate, and seek to acquire technologies in the medical and drug development sectors with the intent to further develop them and move them to commercialization. Such commercialization efforts include sale, licensing and go to market strategies. During 2020 as described herein, the Company executed two such licenses; one to Cytocom, Inc. (“Cytocom”) and one to Forte Animal Health, Inc. (“Forte”).
Our strategy has been limited due to lack of capital. Management is seeking to secure new investment capital with which to continue to pursue the Company’s strategy. There is no guaranty that the Company will be successful in securing additional capital.
Going Concern
As of March 31, 2021, the Company had $11,658 in cash on hand, negative working capital of $10,743,883 and a stockholders’ deficit of $10,743,883. For the three months ended March 31, 2021, the Company reported a net income attributable to common shareholders of $790,407. Included in the net income for the three months ended March 31, 2021 is a non-cash gain of $1,178,230 related to write off of derivative liabilities associated with the conversion and elimination of conversion features for notes. During the three months ended March 31, 2020, the Company reported a net loss attributable to common shareholders of $792,873.
Historically the Company has relied on the funding of operations through private equity financings and management expects operating losses and negative cash flows to continue at more significant levels in the future. As the Company continues to incur losses, transition to profitability is dependent upon the successful development, approval, and commercialization of its current or future product candidates as they become available and the achievement of a level of revenues adequate to support the Company’s cost structure. The Company may never achieve profitability, and unless and until it does, the Company will continue to need to raise additional cash. Management intends to fund future operations through additional private or public debt or equity offerings and may seek additional capital through arrangements with strategic partners or from other sources.
Based on our operating plan, working capital at March 31, 2021 is not sufficient to meet the cash requirements to fund planned operations through the next twelve months without additional sources of cash. These conditions raise substantial doubt about our ability to continue as a going concern. The accompanying financial statements have been prepared assuming that we will continue as a going concern and do not include adjustments that might result from the outcome of this uncertainty. This basis of accounting contemplates the recovery of the Company’s assets and the satisfaction of liabilities in the normal course of business.
Management is currently pursuing a strategy to re-capitalize the Company and position it for future growth. Key steps in the process include:
● | Improve the condition of the Company’s financial position and balance sheet: |
○ | License, where practical technologies which the Company will otherwise not be able to commercialize. | |
○ | Seek additional capital to continue to maintain operations and compliance with OTC reporting requirements. | |
○ | Seek funding from current noteholders with exercisable warrants to convert such warrants as a means of raising capital and reducing outstanding debt. |
● | Identify and seek to acquire late-stage assets for future commercialization. | |
● | Build out an appropriate operational infrastructure, generate new opportunities and grow shareholder value. |
If the Company is unable to secure new working capital, other alternatives strategies will be required. For the three months ended March 31, 2021, the Company reported a net income attributable to common shareholders of $790,407 which included a non-cash gain of $1,178,230 related to the revaluation of the fair market value of derivative liabilities associated with conversion rights on certain debt instruments. during the period. As of March 31, 2021, the Company has a stockholders’ deficit of $10,743,883.
Historically, the Company has been able to acquire and develop assets, spin them out and retain both an equity stake and royalties and milestone payments. In so doing, the Company has acted as an incubator for late-stage drug development. Management believes that this strategy can continue to be successful.
At this time, the Company is reviewing several opportunities which it may pursue as soon as funding is available. At present no definitive actions have been taken.
There can be no guaranties that the Company will be successful in:
● | Executing its restructuring plan | |
● | Securing adequate capital to continue operations. | |
● | Identifying and acquiring assets for future development. |
Three Months Ended March 31, 20202021 Compared to Three Months Ended March 31, 20192020
Revenues
We had no revenues from operations for the three months ended March 31, 20202021 and 2019.2020.
Operating Expenses
Selling, general and administrative
Selling, general and administrative expenses and related percentages for the three months ended March 31, 20202021 and 20192020 were as follows (dollar amounts in thousands):
For the three months ended March 31, | For the three months ended March 31, | |||||||||||||||
2020 | 2019 | 2021 | 2020 | |||||||||||||
Selling, general and administrative | $ | 364 | $ | 487 | $ | 138 | $ | 364 | ||||||||
Decrease from prior year | $ | (123 | ) | $ | (151 | ) | $ | (226 | ) | $ | (123 | ) | ||||
Percent decrease from prior year | (25 | )% | (24 | )% | (62 | )% | (25 | )% |
For the three months ended March 31, 20202021, our operations and 2019,selling, general and administrative expense have been focused on business development activities and completion of the current licensing transactions.
For the three months ended March 31, 2021 and 2020, selling, general and administrative expenses were made up as follows (dollar amounts in thousands):
For the three months ended March 31, | ||||||||
2020 | 2019 | |||||||
Stock listing and investor relations expenses | $ | 15 | $ | 11 | ||||
Consulting and contractors | 30 | 84 | ||||||
Payroll | 233 | 235 | ||||||
Professional fees | 16 | 37 | ||||||
Travel | - | 1 | ||||||
Other expenses | 70 | 119 |
For the three months ended March 31, | ||||||||
2021 | 2020 | |||||||
Shareholder and investor relations | $ | 6 | $ | 15 | ||||
Board fees | 30 | 60 | ||||||
Contractors and consulting | 35 | 46 | ||||||
Salaries and benefits | 65 | 233 | ||||||
Other expenses | 2 | 10 |
In the three months ended March 31, 2020,2021, total cash and accruals for selling, general and administrative expense was $364$138 compared to $487$364 for the corresponding period in 2019,2020, a decrease of $123$226 or 25%62%. Significant items included:
● | ||
March 31, 2020. | ||
● | Contractors and consulting services include professional fees for legal, tax and accounting services in | |
● | payroll in the amount of | |
Research and development
R&D expenses and related percentages for the three months ended March 31, 20202021 and 20192020 were as follows (dollar amounts in thousands):
For the three months ended March 31, | For the three months ended March 31, | |||||||||||||||
2020 | 2019 | 2021 | 2020 | |||||||||||||
Research and development | $ | 32 | $ | - | $ | 149 | $ | 32 | ||||||||
Increase/(decrease) from prior year | $ | 32 | $ | (129 | ) | $ | 117 | $ | (32 | ) | ||||||
Percent increase/(decrease) from prior year | 100 | % | (100 | )% | 366 | % | (100 | )% |
Expenses for research and development in the three months ended March 31, 20202021 was $32$149 compared to $0$32 in the same period in 2019, reflecting the cost in 2020 to maintain intellectual property licenses.
Stock issued for services2020.
The Company periodically receives services from consultants under long-term consulting contracts, in terms of which it issues stock to prepay for the services. In such cases, the Company initially accounts for the full cost of these services as Prepaid Services on its balance sheet, calculated by the number of shares issued multiplied by the share price on the contract date. This amount is then amortized as a cost over the period in which the services are provided to the Company. The Company reports these costs separately from Selling, general and administrative costs, and Research and development costs, to better demonstrate the true costs of Selling, general and administrative activities, and Research and development.
Amortization of amounts recorded as Prepaid Services for stock issued for services G&A and related percentages for$149 during the three months ended March 31, 2021 for fees payable to Penn State University related to license maintenance fees, minimum royalties and various patent evaluation and filing expenses. These liabilities were assigned to Cytocom in connection with August 12, 2020 and 2019 wereagreement as follows (dollar amountsdescribed in thousands):
For the three months ended March 31, | ||||||||
2020 | 2019 | |||||||
Amortization of prepaid consulting expense G&A | $ | - | $ | 120 | ||||
Percentage decrease from prior year | (100 | )% | (100 | )% |
The numberNote 7 to the financial statements. As Penn State has not consented to the assignment of shares issuedthese fees, the Company retains liability for prepaid consulting services G&A inthem until paid by Cytocom; at which time, the three months ending March 31, 2020 was nil.Company will recognize a gain on the assignment of liabilities.
There were no prepaid consulting services G&A in the three months ended March 31, 2020.
Warrant valuation expense
When the Company sells its stock for cash or settles debt for stock, it periodically issues warrants to acquire additional stock at prices agreed at the date of the original sale. The Company incurs a cost for the rights attached to the warrants, which is calculated using the Black-Scholes Model (see above 8. Capital Structure—Common Stock and Common Stock Purchase Warrants.) This expense is reported in the Condensed Consolidated Statements of Operations above as the Warrant valuation expense.
In the three months ended March 31, 2020, the Company issued no warrants to stockholders.
In the three months ended March 31, 2019, the Company issued 4,600,000 warrants to stockholders at an exercise price of $0.005, for which it recorded a debt discount of $23,000.
Depreciation and amortization
The Company amortizes the costs incurred to acquire patents and licenses over the period of the related agreements. All of the Company’s patents and licenses had been fully amortized by December 31, 2018.
Depreciation and amortization expenses for the three months ended March 31, 2020 and 2019 were as follows (dollar amounts in thousands):
For the three months ended March 31, | ||||||||
2020 | 2019 | |||||||
Depreciation expense | $ | - | $ | - | ||||
Amortization expense | $ | - | $ | - | ||||
Increase/ (Decrease) from prior year | $ | - | $ | - | ||||
Percentage increase/(decrease) from prior year | - | % | - | % |
Interest Expense
Interest expense for the three months ended March 31, 2020 and 2019 were as follows (dollar amounts in thousands):
For the three months ended March 31, | For the three months ended March 31, | |||||||||||||||
2020 | 2019 | 2021 | 2020 | |||||||||||||
Interest expense | $ | 86 | $ | 115 | $ | 100 | $ | 86 | ||||||||
Increase / (Decrease) from prior year | $ | (29 | ) | $ | (105 | ) | $ | 14 | $ | (29 | ) | |||||
Percentage Increase (Decrease) from prior year | (25 | )% | (48 | )% | 16 | % | (25 | )% |
The decreaseCompany was able to reduce the total principal outstanding as of March 31, 2021 through the assignment of $2,728,731 of notes payable to Cytocom during in the third quarter of 2020. The increase in interest expense was primarily due toduring the settlement of certain notes payable that carried a high rate of interest in the fourth quarter of 2019.
Loss of settlement of debt
There were no gains or losses on settlement by lenders or vendors of any of their notes or accounts payable by converting them to equity for both the three monthsthree-month period ended March 31, 20202021 reflects the amortization of debt discount in the amount of $35 during the current reporting period and the three months ended March 31, 2019.$65 in interest expense on principal amounts.
Liquidity
Liquidity is measured by our ability to secure enough cash to meet our contractual and operating needs as they arise. We doThe Company does not anticipate generating sufficient net positive cash flows from our operations to fund the next twelve months. We had cash of $11,658 at March 31, 2021, compared to $6,153 at March 31, 2020, compared to $5,688 at March 31, 2019.2020.
For the three months ended March 31, 2021 and 2020, and 2019, net cash from/(used in)from operating activities was $1,228$1,687 and ($171),$1,228, respectively.
$0 ofThe Company had no cash was used in investing activities for the three months ended March 31, 2020 ($0 in 2019).
During the three months ended March 31, 20202021 and 2019, there were no proceeds from the sale of stock and exercise of stock warrants. The Company received $53,000 from the issuance of notes payable in three months ended March 31, 2020, compared to $0 in 2019. There were no loan repayments made in cash in the three months ended March 31, 2020 ($0 in 2019).2020.
The Company does not expect to generate revenues from sales in the first half of 2020.foreseeable future. If the Company is unable to raise additional working capital to meet all of its operating obligations and expenditures, the Company may havebe required to modify its business plan.
Off-Balance Sheet Arrangements
During the three months ended March 31, 20202021 and 2019,2020, the Company did not engage in any off-balance sheet arrangements as defined in item 303(a)(4) of the SEC’s Regulation S-K.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not Applicable.
ITEM 4. CONTROLS AND PROCEDURES
Changes in Internal Controls over Financial Reporting
There were no changes in our internal controls over financial reporting that occurred during the period covered by this report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Evaluation of Disclosure Controls and Procedures
As of the end of the period covered by this report, we conducted an evaluation, under the supervision and with the participation of our principal executive officer and principal financial officer, of our disclosure controls and procedures as defined in Rules 13(a)-15(e) under the Exchange Act. Based on this evaluation, the principal executive officer andwho is also the principal financial officer concluded that, because of the weakness in internal controls over financial reporting described below, our disclosure controls and procedures are ineffective to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.
Management assessed the effectiveness of the internal controls over financial reporting as of June 30, 2019, using the framework set forth in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based upon this assessment, our management concluded that as of June 30, 2019, the internal controls over financial reporting were not effective. The reportable conditions and material weakness relate to a limited segregation of duties and lack of an audit committee. The limited segregation of duties within our company and the lack of an audit committee are due to the small number of employees. Management has determined that this control deficiency constitutes a material weakness. This material weakness could result in material misstatements of significant accounts and disclosures that would result in a material misstatement to our interim or annual financial statements that would not be prevented or detected. In addition, due to limited staffing, we are not always able to detect minor errors or omissions in reporting.
Going forward, management anticipates that additional staff will be necessary to mitigate these weaknesses, as well as to implement other planned improvements. Additional staff will enable us to document and apply transactional and periodic controls procedures, permit a better review and approval process and improve quality of financial reporting. However, the potential addition of new staff is contingent on obtaining additional financing, and there is no assurance that we will be able to do so.
Limitations on the Effectiveness of Internal Controls
Readers are cautioned that our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all fraud and material error. An internal control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our control have been detected. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any control design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.
None.
ITEM 2. SUBSEQUENT EVENTS
None.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
In the quarter ended March 31, 2020, no shares were issued by the Company (in the corresponding quarter in 2019,On February 26, 2021, the Company issued a total of 21,255,2255,402 shares of common stock, (netat an average price per share of stock cancellations). 18,255,225$10.46, in connection with a conversion notice received from a noteholder in payment of those shares were issuedoutstanding principal and related accrued interest. The transaction was exempt from registration under Section 3(a)(9) of the Securities Act of 1933, as amended. The conversion made according to settle amounts owed under notes payable, including accruedthe terms of the promissory note and unpaid interest as applicable).
No considerationno commission or other remuneration was received by the Company in the quarters ended March 31, 2020 considerationpaid or given directly or indirectly for the exercise of previously-issued warrants.soliciting such exchange.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
The current portion of notes payable on the Company’s Condensed Consolidated Balance Sheets above contains, at March 31, 2020,2021, certain promissory notes on which the Company was in arrears on payments of principal as follows:
● | ||
● | ||
● | $205,000 in promissory notes issued in 2017 that accrue that interest at 2% and mature between January 2018 and September 2018. | |
● | ||
● | ||
● | ||
● | $47,975 promissory notes issued in the | |
● | ||
● | $118,000 in promissory notes were | |
● | $323,855 in promissory notes were | |
● | ||
● | ||
● | ||
● | $150,000 promissory note issued in October 2019 that accrues interest at 15% was not in default on March 31, |
At March 31, 2020,2021, the Company had insufficient cash on hand to repay these notes.
ITEM 4. MINE SAFETY DISCLOSURES
None.
Articles of Amendment to Articles of Incorporation
On February 6, 2020, the Company filed Articles of Amendment to Articles of Incorporation of the Company (“February Articles of Amendment”), a copy of which has been filed with this Quarterly Report on Form 10-Q as Exhibit 10.68, and is incorporated herein by reference. The February Articles of Amendment changed the registered agent and registered office address of the Company. The February Articles of Amendment also effected a reverse stock split of the Company’s issued and outstanding, but not authorized, common stock at a ratio of 1 to 1,000.
On March 12, 2020, the Company filed Articles of Amendment to Articles of Incorporation of the Company (“March Articles of Amendment”), a copy of which has been filed with this Quarterly Report on Form 10-Q as Exhibit 10.69, and is incorporated herein by reference. The March Articles of Amendment corrected a typographical error in the February Articles of Amendment in order to correctly reflect the reverse stock split ratio of 1 to 1,000 Additionally, the March Articles of Amendment increased the authorized capital stock of the corporation from five hundred million (500 million) shares of common stock to seven hundred fifty million (750 million) shares of common stock.
FINRA Letter
On June 9, 2020, we were advised by FINRA that our 1 for 1,000 reverse stock split would not be processed by FINRA. FINRA required that we file the Articles of Amendment as part of the application. By not processing the reverse stock split, quotations for our common stock do not reflect the 1 for 1,000 reverse stock split, which occurred on February 6, 2020. Accordingly, caution should be exercised by purchasers, sellers, and broker-dealers buying, selling or trading our common stock.
FINRA based its unwillingness to process the reverse stock split on Rule 6490(d)(3)(3) of the FINRA Manual, which provides that FINRA does not have to process the reverse stock split because FINRA has actual knowledge that we, persons associated with us, our officers, our directors, our transfer agent, our legal adviser, our promoters or other persons connected to us are the subject of a pending, adjudicated or settled regulatory action or investigation by a federal, state or foreign regulatory agency, or a self-regulatory organization, or a civil or criminal action related to fraud or securities laws violations.
FINRA goes on to describe the actions of John M. Fife. Mr. Fife was the subject to a Securities and Exchange Commission Administrative Proceeding in August 2007, in which the SEC alleged that Mr. Fife and Clarion Management, LLC (for which Mr. Fife was the sole member) engaged in a fraudulent scheme to purchase variable annuity contracts in order to engage in market timing.
Our officers and directors had no knowledge of the foregoing actions of Mr. Fife. Mr. Fife is the Chief Executive Officer of Iliad Research and Trading, L.P. (“Iliad’), which holds an outstanding convertible promissory note from the Company dated October 25, 2017 in the original principal amount of $425,000, and which is convertible based on the outstanding principal and interest into shares of common stock of the Company at a 40% discount to the market price. We intend to take steps to enter into an arrangement with Iliad to terminate the convertible note in exchange for a cash payment, and, once complete, to coordinate with FINRA to process the reverse stock split.
We advise the public and all broker-dealers that quotations for our common stock do not reflect the 1 for 1,000 reverse stock split and our actual capital structure as a result of FINRA’s decision not to process the same.None.
The following exhibits are filed with this Annual Report:
24 |
25 |
* | filed with the Form 10 Registration Statement filed with the SEC on April 22, 2013 and the Amendment No. 1 to the Form 10 Registration Statement filed with the SEC on June 7, 2013 and incorporated herein by reference. |
# | filed with the Amendment No. 1 to the Form 10 Registration Statement filed with the SEC on June 7, 2013 and incorporated herein by reference. |
+ | filed with the Amendment No. 2 to the Form 10 Registration Statement filed with the SEC on July 18, 2013 and incorporated herein by reference. |
^ | filed with the Amendment No. 3 to the Form 10 Registration Statement filed with the SEC on August 23, 2013 and incorporated herein by reference. |
? | filed with the Amendment No. 4 to the Form 10 Registration Statement filed with the SEC on September 25, 2013 and incorporated herein by reference. |
Î | filed with the Amendment No. 5 to the Form 10 Registration Statement filed with the SEC on October 11, 2013 and incorporated herein by reference. |
† | Portions of this exhibit have been redacted pursuant to a confidential treatment order granted by the Securities and Exchange Commission. |
> | Filed with the Amendment No. 6 to the Form 10 Registration Statement filed with the SEC on November 21, 2013 and incorporated hereby by reference. |
R | Filed with the Amendment No. 7 to the Form 10 Registration Statement filed with the SEC on January 22, 2015 and incorporated hereby by reference. |
∞ | Filed with Form 10-K for the year ended December 31, 2019. |
26 |
In accordance with the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
Immune Therapeutics, Inc. | ||
Date: | By: | /s/ Kevin J. Phelps |
Kevin J. Phelps | ||
Chief Executive Officer | ||
and Chief Financial Officer |