Proteo (PTEO) 10-Q 18 Aug 14 2014 Q2 Quarterly report Financial data

Document_And_Entity_Informatio

Document And Entity Information	6 Months Ended
	Jun. 30, 2014	Aug. 14, 2014
Document And Entity Information	'	'
Entity Registrant Name	'PROTEO INC	'
Entity Central Index Key	'0001063104	'
Document Type	'10-Q	'
Document Period End Date	30-Jun-14	'
Amendment Flag	'false	'
Current Fiscal Year End Date	'--12-31	'
Is Entity a Well-known Seasoned Issuer?	'No	'
Is Entity a Voluntary Filer?	'No	'
Is Entity's Reporting Status Current?	'Yes	'
Entity Filer Category	'Smaller Reporting Company	'
Entity Common Stock, Shares Outstanding	'	23,879,350
Document Fiscal Period Focus	'Q2	'
Document Fiscal Year Focus	'2014	'

CONDENSED_CONSOLIDATED_BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)	Jun. 30, 2014	Dec. 31, 2013
CURRENT ASSETS	'	'
Cash and cash equivalents	$692,777	$456,310
Research supplies	390,095	391,526
Prepaid expenses and other current assets	10,808	22,073
Current Assets	1,093,680	869,909
PROPERTY AND EQUIPMENT, NET	19,277	20,501
Total Assets	1,112,957	890,410
CURRENT LIABILITIES	'	'
Accounts payable and accrued liabilities	68,469	151,359
Current Liabilities	68,469	151,359
LONG TERM LIABILITIES	'	'
Deferred revenues	534,858	0
Accrued licensing fees	778,107	784,776
Noncurrent Liabilities	1,312,965	784,776
COMMITMENTS AND CONTINGENCIES	'	'
STOCKHOLDERS' DEFICIT	'	'
Non-voting preferred stock, par value $0.001 per share; 10,000,000 shares authorized; 723,590 shares issued and outstanding	724	724
Common stock, par value $0.001 per share; 300,000,000 shares authorized; 23,879,350 shares issued and outstanding	23,880	23,880
Additional paid-in capital	8,988,125	8,988,125
Accumulated other comprehensive income	240,289	250,514
Accumulated deficit	-9,521,495	-9,308,968
Total Stockholders' Deficit	-268,477	-45,725
Total Liabilities and Stockholders' Deficit	$1,112,957	$890,410

CONDENSED_CONSOLIDATED_BALANCE1

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Jun. 30, 2014	Dec. 31, 2013
Statement of Financial Position [Abstract]	'	'
Non-voting preferred stock par value	$0.00	$0.00
Non-voting preferred stock shares authorized	10,000,000	10,000,000
Non-voting preferred stock shares issued	723,590	723,590
Non-voting preferred stock shares outstanding	723,590	723,590
Common stock par value	$0.00	$0.00
Common stock, shares authorized	300,000,000	300,000,000
Common stock, shares issued	23,879,350	23,879,350
Common stock, shares outstanding	23,879,350	23,879,350

CONDENSED_CONSOLIDATED_STATEME

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Income Statement [Abstract]	'	'	'	'
REVENUES	$0	$0	$0	$0
EXPENSES	'	'	'	'
General and administrative	41,197	40,151	86,070	93,643
Research and development	108,296	96,907	216,390	150,043
Costs and Expenses	149,493	137,058	302,460	243,686
OTHER INCOME (EXPENSE)	'	'	'	'
Development income	74,776	0	74,776	0
Interest and other income (expense), net	10,545	-20,110	15,157	13,561
Total other income (expense)	85,312	-20,110	89,933	13,561
NET INCOME (LOSS)	-64,172	-157,168	-212,527	-230,125
BASIC AND DILUTED INCOME (LOSS) PER SHARE	$0	($0.01)	($0.01)	($0.01)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING	23,879,350	23,879,350	23,879,350	23,879,350
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS	'	'	'	'
NET LOSS	-64,172	-157,168	-212,527	-230,125
FOREIGN CURRENCY TRANSLATION ADJUSTMENTS	-8,447	21,243	-10,225	-21,660
COMPREHENSIVE LOSS	($72,619)	($135,925)	($222,752)	($251,785)

CONSOLIDATED_STATEMENTS_OF_CAS

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
CASH FLOWS FROM OPERATING ACTIVITIES	'	'
Net loss	($212,527)	($230,125)
Adjustments to reconcile net loss to net cash used in operating activities:	'	'
Depreciation	5,848	11,455
Loss on disposal of equipment	0	11,438
Foreign currency transaction gains	-11,271	-21,892
Changes in operating assets and liabilities:	'	'
Research supplies	-1,905	45,732
Prepaid expenses and other current assets	11,126	30,343
Accounts payable and accrued liabilities	-82,438	-48,478
Deferred revenue	533,742	0
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	242,575	-201,527
CASH FLOWS FROM INVESTING ACTIVITIES	'	'
Proceeds from sale of property and equipment	0	34,663
Acquisition of property and equipment	-4,794	0
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES	-4,794	34,663
NET CASH PROVIDED BY FINANCING ACTIVITIES	0	0
EFFECT OF FOREIGN CURRENCY EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS	-1,314	-5,726
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	236,467	-172,590
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD	456,310	375,722
CASH AND CASH EQUIVALENTS - END OF PERIOD	$692,777	$203,132

1_NATURE_OF_BUSINESS_AND_BASIS

1. NATURE OF BUSINESS AND BASIS OF PRESENTATION	6 Months Ended
	Jun. 30, 2014
Organization, Consolidation and Presentation of Financial Statements [Abstract]	'
NATURE OF BUSINESS AND BASIS OF PRESENTATION	'
	BASIS OF PRESENTATION
	The accompanying condensed consolidated balance sheet as of December 31, 2013, which has been derived from audited financial statements, and the accompanying interim condensed consolidated financial statements as of June 30, 2014 and for the three-month and six-month periods ended June 30, 2014 and 2013, have been prepared by management pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") for interim financial reporting. These interim condensed consolidated financial statements are unaudited and, in the opinion of management, include all adjustments (consisting only of normal recurring adjustments and accruals) necessary to present fairly the financial condition, results of operations and cash flows of Proteo, Inc. and its wholly owned subsidiary (hereinafter collectively referred to as the "Company") as of and for the periods presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"). Operating results for the three-month and six-month periods ended June 30, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014, or for any other interim period during such year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted in accordance with the rules and regulations of the SEC, although the Company believes that the disclosures made are adequate to make the information not misleading. The accompanying condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2013 filed with the SEC on February 26, 2014.
	NATURE OF BUSINESS
	The Company is a clinical stage drug development company focusing on the development of anti-inflammatory treatments for rare diseases with significant unmet needs. The Company's management deems its lead drug candidate Tiprelestat (also known as Elafin) for intravenous use to be one of the most prospective treatments of acute postoperative inflammatory complications, in particular after esophageal cancer surgery. Elafin appears to be also a promising compound for the treatment of pulmonary arterial hypertension. The clinical development is currently focused in Europe with the intention to receive the primary approval in Europe.
	The products that the Company is developing, to the extent they are considered drugs or biologics, are governed by the Federal Food, Drug and Cosmetics Act (in the United States) and the regulations of State and various foreign government agencies. The Company's proposed pharmaceutical products to be used by humans are subject to certain clearance procedures administered by the above regulatory agencies.
	Since its inception, the Company has primarily been engaged in the research and development of its proprietary product Elafin. The Company intends to seek the various governmental regulatory approvals for the marketing of Elafin. Management believes that none of its planned products will produce sufficient revenues in the near future. As a result, the Company intends to generate revenue by out-licensing and marketing activities. There are no assurances, however, that the Company will be able to develop such products, or if produced, that they will be accepted in the marketplace.
	From time to time, the Company enters into collaborative arrangements for the research and development (R&D), manufacture and/or commercialization of products and product candidates.  These collaborations may provide for non-refundable, upfront license fees, R&D and commercial performance milestone payments, cost sharing, royalty payments and/or profit sharing. The Company's collaboration agreements with third parties are generally performed on a “best efforts” basis with no guarantee of either technological or commercial success.
	Proteo, Inc.'s common stock is currently quoted on the OTC QB under the symbol "PTEO".
	CONCENTRATIONS
	The Company maintains substantially all of its cash in bank accounts at a German private commercial bank. The Company's bank accounts at this financial institution are presently protected by the voluntary "Deposit Protection Fund of The German Private Commercial Banks". The Company has not experienced any losses in these accounts.
	The Company's operations, including research and development activities and most of its assets, are located in Germany. The Company's operations are subject to various political, economic, and other risks and uncertainties inherent in Germany and the European Union.
	OTHER RISKS AND UNCERTAINTIES
	The Company will require substantial additional funding for continuing research and development, obtaining regulatory approval, and for the commercialization of its products. Management plans to generate revenues from product sales, but there are no purchase commitments for any of the proposed products. Additionally, the Company may generate revenues from out-licensing activities. There can be no assurance that further out-licensing may be achieved or whether such will generate significant profit. In the absence of significant sales and profits, the Company may seek to raise additional funds to meet its working capital requirements through the additional placement of debt and/or equity securities. There is no assurance that the Company will be able to obtain sufficient additional funds when needed, or that such funds, if available, will be obtainable on terms satisfactory to the Company.
	The Company's line of future pharmaceutical products being developed by its German subsidiary, to the extent they may be considered drugs or biologics, are governed by the Federal Food, Drug and Cosmetics Act (in the United States) and by the regulations of State agencies and various foreign government agencies. There can be no assurances that the Company will obtain the regulatory approvals required to market its products. The pharmaceutical products under development will be subject to more stringent regulatory requirements because they are recombinant products for humans. The Company has no experience in obtaining regulatory clearance on these types of products. Therefore, the Company will be subject to the risks of delays in obtaining or failing to obtain regulatory clearance and other uncertainties, including financial, operational, technological, regulatory and other risks associated with an emerging business, including the potential risk of business failure.
	The Company is exposed to risks related to fluctuations in foreign currency exchange rates. Management does not utilize derivative instruments to hedge against such exposure.
	PRINCIPLES OF CONSOLIDATION
	The condensed consolidated financial statements have been prepared in accordance with GAAP and include the accounts of Proteo, Inc. and Proteo Biotech AG, its wholly owned subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation.
	RESEARCH SUPPLIES
	The Company capitalizes the cost of supplies used in its research and development activities.  Such costs are expensed as used to research and development expenses in the accompanying condensed consolidated statements of operations.
	FAIR VALUE MEASUREMENTS
	The Fair Value Measurements and Disclosures Topic of the Financial Accounting Standard Board’s (“FASB”) Accounting Standards Codification (“ASC” or “Codification”) requires disclosure of fair value information about financial instruments when it is practicable to estimate that value. Management believes that the carrying amounts of the Company's financial instruments, consisting primarily of cash, accounts payable and accrued expenses, approximate their fair value at June 30, 2014 due to their short-term nature. The Company does not have any assets or liabilities that are measured at fair value on a recurring basis and, during the three-month and six-month periods ended June 30, 2014 and 2013, did not have any assets or liabilities that were measured at fair value on a non-recurring basis.
	SIGNIFICANT RECENT ACCOUNTING PRONOUNCEMENTS
	In June 2014, the FASB approved Accounting Standards Update 2014-10 (“ASU 2014-10”), Development Stage Entities. This Update removes the definition of a development stage entity from the Master glossary of the ASC, thereby removing the financial reporting distinction between development stage entities and other reporting entities from GAAP. In addition, ASU 2014-10 eliminates requirements for development stage entities to:
		·	Present inception-to-date information in the statements of operations, cash flows and stockholders’ deficit,
		·	Label the financial statements as those of a development stage entity,
		·	Disclose a description of the development stage activities in which the entity is engaged, and
		·	Disclose the first year in which the entity is no longer a development stage entity that in prior years it had in the development stage.
	ASC 2014-10 also clarifies that the guidance in ASC Topic 275, Risks and Uncertainties, is applicable to entities that have not commenced planned principal operations. These amendments are effective for annual reporting periods beginning after December 15, 2014, and interim periods therein, with early adoption permitted. The Company elected to adopt the aforementioned amendments for the financial statements contained within its June 30, 2014 Form 10-Q. As such, information previously required by ASC Topic 915, Development Stage Entities, has been excluded from the accompanying condensed consolidated financial statements.
	The amendments in ASU 2014-10 also eliminate an exception provided to development stage entities in ASC Topic 810, Consolidation, for determining whether an entity is a variable interest entity on the basis of the amount of investment equity that is at risk. This amendment is effective for annual reporting periods beginning after December 2015, and interim periods therein. The Company is currently evaluating the requirements under this amendment, but does not expect it to materially impact the financial statements when adopted.
	In the opinion of management, neither the FASB, its Emerging Issues Task Force, the AICPA, nor the SEC have issued any additional accounting pronouncements since the Company filed its December 31, 2013 Form 10-K that are expected to have material impact on the Company's future consolidated financial statements.

2_LOSS_PER_COMMON_SHARE

2. LOSS PER COMMON SHARE	6 Months Ended
	Jun. 30, 2014
Earnings Per Share [Abstract]	'
LOSS PER COMMON SHARE	'
	Basic loss per common share is computed based on the weighted average number of shares outstanding for the period. Diluted loss per common share is computed by dividing net loss by the weighted average shares outstanding assuming all dilutive potential common shares were issued. There were no dilutive potential common shares outstanding at June 30, 2014 and 2013. As such, basic and diluted loss per common share equals net loss, as reported, divided by the weighted average number of common shares outstanding for the respective periods.

3_FOREIGN_CURRENCY_TRANSLATION

3. FOREIGN CURRENCY TRANSLATION	6 Months Ended
	Jun. 30, 2014
Foreign Currency Translation [Abstract]	'
FOREIGN CURRENCY TRANSLATION	'
	Assets and liabilities of the Company's German operations are translated from Euros (the functional currency) into U.S. dollars (the reporting currency) at period-end exchange rates; equity transactions are translated at historical rates; and income and expenses are translated at weighted average exchange rates for the period. Net foreign currency exchange gains or losses resulting from such translations are excluded from the results of operations but are included in other comprehensive income and accumulated in a separate component of stockholders' equity. Accumulated comprehensive income approximated $240,000 at June 30, 2014 and $251,000 at December 31, 2013.

4_FOREIGN_CURRENCY_TRANSACTION

4. FOREIGN CURRENCY TRANSACTIONS	6 Months Ended
	Jun. 30, 2014
Foreign Currency Translation [Abstract]	'
FOREIGN CURRENCY TRANSACTIONS	'
	The Company records payables related to a certain licensing agreement (Note 6) in accordance with the Foreign Currency Matters Topic of the Codification. Quarterly commitments under such agreement are denominated in Euros. For each reporting period, the Company translates the quarterly amount to U.S. dollars at the exchange rate effective on that date. If the exchange rate changes between when the liability is incurred and the time payment is made, a foreign exchange gain or loss results.
	Additionally, the Company computes a foreign exchange gain or loss at each balance sheet date on all recorded transactions denominated in foreign currencies that have not been settled. The difference between the exchange rate that could have been used to settle the transaction on the date it occurred and the exchange rate at the balance sheet date is the gain or loss that is currently recognized. The Company recorded foreign currency transaction gains of approximately $11,000 and $22,000 for the six-month periods ended June 30, 2014 and 2013, which are included in interest and other income (expense), net in the accompanying condensed consolidated statements of operations and comprehensive loss.

5_SEGMENTS_OF_AN_ENTERPRISE_AN

5. SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION	6 Months Ended
	Jun. 30, 2014
Segment Reporting [Abstract]	'
SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION	'
	The Company considers itself to operate in one segment and has not generated any significant operating revenues since its inception. All of the Company's property and equipment is located in Germany.

6_LONGTERM_LIABILITIES

6. LONG-TERM LIABILITIES	6 Months Ended
	Jun. 30, 2014
Long-Term Liabilities	'
LONG-TERM LIABILITIES	'
	DEFERRED REVENUES
	On May 16, 2014, the Company entered into a funding and revenue sharing agreement (the “Development Agreement”) with an unrelated third party (disclosed in the Company’s 8-K filing to the SEC as of May 22, 2014). The third party will fund operational expenses of the Company as well as the development costs related to the clinical development program aimed at receiving regulatory approval for the use of Elafin for the intravenous treatment of patients undergoing esophageal cancer surgery in the European Union. Total payments by the third party to the Company shall not exceed 3.5 million Euros. Revenue participation right payments will be made to the party when and if Elafin is commercialized within the European Union for the intravenous treatment of patients undergoing esophageal cancer surgery. The Development Agreement will terminate after the earlier of 15 years or 10 complete and consecutive years after the first regulatory approval of Elafin for this indication. Under no circumstances is the payment refundable, even if the drug is never commercialized.
	Through June 30, 2014, pursuant to the provisions of the Development Agreement, the party made cash payments totaling 446,000 Euros (approximately $612,000) to the Company. As no revenue sharing payments will be made unless Elafin is commercialized, the payments received are being accounted for as a payment for the Company to use reasonable efforts to complete development, obtain regulatory approvals, and to commercialize Elafin (i.e. the performance period). Therefore, amounts received from the party will be initially deferred and recognized as revenue over the projected performance period under the Development Agreement in direct relation to expenses incurred. Through June 30, 2014, the Company recognized approximately $75,000 of development income under the Development Agreement, which is included as a component of other income (expense) in the accompanying condensed consolidated statements of operations.
	ACCRUED LICENSING FEES
	On December 30, 2000, the Company entered into a thirty-year license agreement, beginning January 1, 2001 (the "License Agreement"), with Dr. Oliver Wiedow, MD, the owner and inventor of several patents, patent rights and technologies related to Elafin. Pursuant to the License Agreement, the Company agreed to pay Dr. Wiedow an annual license fee of 110,000 Euros for a period of six years. The License Agreement was amended in December 2008 to waive non-payment defaults and to defer the due dates of each payment. In July 2011, in February 2012, February 2013, and again in June 2014, Dr. Wiedow agreed in writing to waive the non-payment defaults and agreed to defer the due dates of the payments for the outstanding balance of 570,000 Euro. As a result, the outstanding balance of 570,000 Euros is due on April 30, 2018. While the total amount owed does not currently bear interest, the Amendment provides that any late payment shall be subject to interest at an annual rate equal to the German Base Interest Rate plus six percent. In the event that the Company's financial condition improves, the parties can agree to increase and/or accelerate the payments. Dr. Wiedow, who is a director of the Company, beneficially owned approximately 27% of the Company's outstanding common stock as of June 30, 2014.
	At June 30, 2014, the Company has accrued approximately $778,000 of licensing fees payable to Dr. Wiedow which are included in long-term liabilities. This is a decrease over the respective accrual of approximately $785,000 at December 31, 2013, which was solely due to changes in foreign currency exchange rates.

7_INCOME_TAXES

7. INCOME TAXES	6 Months Ended
	Jun. 30, 2014
Income Tax Disclosure [Abstract]	'
INCOME TAXES	'
	The Company accounts for income taxes under the asset and liability method, whereby deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Management evaluates the need to establish a valuation allowance for deferred tax assets based upon the amount of existing temporary differences, the period in which they are expected to be recovered and expected levels of taxable income. A valuation allowance to reduce deferred tax assets is established when it is “more likely than not” that some or all of the deferred tax assets will not be realized. Management has determined that a full valuation allowance against the Company’s net deferred tax assets is appropriate.
	There is no material income tax expense recorded for the periods ended June 30, 2014 and 2013, due to the Company's net losses and related changes to the full valuation allowance for deferred tax assets.
	As of June 30, 2014, the Company has a deferred tax asset and an equal amount of valuation allowance of approximately $2,543,000, relating primarily to federal and foreign net operating loss carryforwards of approximately $597,000 and $1,674,000, respectively, and temporary differences related to the recognition of accrued licensing fees of approximately $272,000.
	Based on management’s evaluation of uncertainty in income taxes, the Company concluded that there were no significant uncertain tax positions requiring recognition in its financial statements or related disclosures. Accordingly, no adjustments to recorded tax liabilities or accumulated deficit were required.  As of June 30, 2014, there were no increases or decreases to liability for income taxes associated with uncertain tax positions.

1_NATURE_OF_BUSINESS_AND_BASIS1

1. NATURE OF BUSINESS AND BASIS OF PRESENTATION (Policies)	6 Months Ended
	Jun. 30, 2014
Accounting Policies [Abstract]	'
BASIS OF PRESENTATION	'
	BASIS OF PRESENTATION
	The accompanying condensed consolidated balance sheet as of December 31, 2013, which has been derived from audited financial statements, and the accompanying interim condensed consolidated financial statements as of June 30, 2014 and for the three-month and six-month periods ended June 30, 2014 and 2013, have been prepared by management pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") for interim financial reporting. These interim condensed consolidated financial statements are unaudited and, in the opinion of management, include all adjustments (consisting only of normal recurring adjustments and accruals) necessary to present fairly the financial condition, results of operations and cash flows of Proteo, Inc. and its wholly owned subsidiary (hereinafter collectively referred to as the "Company") as of and for the periods presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"). Operating results for the three-month and six-month periods ended June 30, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014, or for any other interim period during such year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted in accordance with the rules and regulations of the SEC, although the Company believes that the disclosures made are adequate to make the information not misleading. The accompanying condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2013 filed with the SEC on February 26, 2014.
NATURE OF BUSINESS	'
	NATURE OF BUSINESS
	The Company is a clinical stage drug development company focusing on the development of anti-inflammatory treatments for rare diseases with significant unmet needs. The Company's management deems its lead drug candidate Tiprelestat (also known as Elafin) for intravenous use to be one of the most prospective treatments of acute postoperative inflammatory complications, in particular after esophageal cancer surgery. Elafin appears to be also a promising compound for the treatment of pulmonary arterial hypertension. The clinical development is currently focused in Europe with the intention to receive the primary approval in Europe.
	The products that the Company is developing, to the extent they are considered drugs or biologics, are governed by the Federal Food, Drug and Cosmetics Act (in the United States) and the regulations of State and various foreign government agencies. The Company's proposed pharmaceutical products to be used by humans are subject to certain clearance procedures administered by the above regulatory agencies.
	Since its inception, the Company has primarily been engaged in the research and development of its proprietary product Elafin. The Company intends to seek the various governmental regulatory approvals for the marketing of Elafin. Management believes that none of its planned products will produce sufficient revenues in the near future. As a result, the Company intends to generate revenue by out-licensing and marketing activities. There are no assurances, however, that the Company will be able to develop such products, or if produced, that they will be accepted in the marketplace.
	From time to time, the Company enters into collaborative arrangements for the research and development (R&D), manufacture and/or commercialization of products and product candidates.  These collaborations may provide for non-refundable, upfront license fees, R&D and commercial performance milestone payments, cost sharing, royalty payments and/or profit sharing. The Company's collaboration agreements with third parties are generally performed on a “best efforts” basis with no guarantee of either technological or commercial success.
	Proteo, Inc.'s common stock is currently quoted on the OTC QB under the symbol "PTEO".
CONCENTRATIONS	'
	CONCENTRATIONS
	The Company maintains substantially all of its cash in bank accounts at a German private commercial bank. The Company's bank accounts at this financial institution are presently protected by the voluntary "Deposit Protection Fund of The German Private Commercial Banks". The Company has not experienced any losses in these accounts.
	The Company's operations, including research and development activities and most of its assets, are located in Germany. The Company's operations are subject to various political, economic, and other risks and uncertainties inherent in Germany and the European Union.
OTHER RISKS AND UNCERTAINTIES	'
	OTHER RISKS AND UNCERTAINTIES
	The Company will require substantial additional funding for continuing research and development, obtaining regulatory approval, and for the commercialization of its products. Management plans to generate revenues from product sales, but there are no purchase commitments for any of the proposed products. Additionally, the Company may generate revenues from out-licensing activities. There can be no assurance that further out-licensing may be achieved or whether such will generate significant profit. In the absence of significant sales and profits, the Company may seek to raise additional funds to meet its working capital requirements through the additional placement of debt and/or equity securities. There is no assurance that the Company will be able to obtain sufficient additional funds when needed, or that such funds, if available, will be obtainable on terms satisfactory to the Company.
	The Company's line of future pharmaceutical products being developed by its German subsidiary, to the extent they may be considered drugs or biologics, are governed by the Federal Food, Drug and Cosmetics Act (in the United States) and by the regulations of State agencies and various foreign government agencies. There can be no assurances that the Company will obtain the regulatory approvals required to market its products. The pharmaceutical products under development will be subject to more stringent regulatory requirements because they are recombinant products for humans. The Company has no experience in obtaining regulatory clearance on these types of products. Therefore, the Company will be subject to the risks of delays in obtaining or failing to obtain regulatory clearance and other uncertainties, including financial, operational, technological, regulatory and other risks associated with an emerging business, including the potential risk of business failure.
	The Company is exposed to risks related to fluctuations in foreign currency exchange rates. Management does not utilize derivative instruments to hedge against such exposure.
PRINCIPLES OF CONSOLIDATION	'
	PRINCIPLES OF CONSOLIDATION
	The condensed consolidated financial statements have been prepared in accordance with GAAP and include the accounts of Proteo, Inc. and Proteo Biotech AG, its wholly owned subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation.
RESEARCH SUPPLIES	'
	RESEARCH SUPPLIES
	The Company capitalizes the cost of supplies used in its research and development activities.  Such costs are expensed as used to research and development expenses in the accompanying condensed consolidated statements of operations.
FAIR VALUE MEASUREMENTS	'
	FAIR VALUE MEASUREMENTS
	The Fair Value Measurements and Disclosures Topic of the Financial Accounting Standard Board’s (“FASB”) Accounting Standards Codification (“ASC” or “Codification”) requires disclosure of fair value information about financial instruments when it is practicable to estimate that value. Management believes that the carrying amounts of the Company's financial instruments, consisting primarily of cash, accounts payable and accrued expenses, approximate their fair value at June 30, 2014 due to their short-term nature. The Company does not have any assets or liabilities that are measured at fair value on a recurring basis and, during the three-month and six-month periods ended June 30, 2014 and 2013, did not have any assets or liabilities that were measured at fair value on a non-recurring basis.
SIGNIFICANT RECENT ACCOUNTING PRONOUNCEMENTS	'
	SIGNIFICANT RECENT ACCOUNTING PRONOUNCEMENTS
	In June 2014, the FASB approved Accounting Standards Update 2014-10 (“ASU 2014-10”), Development Stage Entities. This Update removes the definition of a development stage entity from the Master glossary of the ASC, thereby removing the financial reporting distinction between development stage entities and other reporting entities from GAAP. In addition, ASU 2014-10 eliminates requirements for development stage entities to:
		·	Present inception-to-date information in the statements of operations, cash flows and stockholders’ deficit,
		·	Label the financial statements as those of a development stage entity,
		·	Disclose a description of the development stage activities in which the entity is engaged, and
		·	Disclose the first year in which the entity is no longer a development stage entity that in prior years it had in the development stage.
	ASC 2014-10 also clarifies that the guidance in ASC Topic 275, Risks and Uncertainties, is applicable to entities that have not commenced planned principal operations. These amendments are effective for annual reporting periods beginning after December 15, 2014, and interim periods therein, with early adoption permitted. The Company elected to adopt the aforementioned amendments for the financial statements contained within its June 30, 2014 Form 10-Q. As such, information previously required by ASC Topic 915, Development Stage Entities, has been excluded from the accompanying condensed consolidated financial statements.
	The amendments in ASU 2014-10 also eliminate an exception provided to development stage entities in ASC Topic 810, Consolidation, for determining whether an entity is a variable interest entity on the basis of the amount of investment equity that is at risk. This amendment is effective for annual reporting periods beginning after December 2015, and interim periods therein. The Company is currently evaluating the requirements under this amendment, but does not expect it to materially impact the financial statements when adopted.
	In the opinion of management, neither the FASB, its Emerging Issues Task Force, the AICPA, nor the SEC have issued any additional accounting pronouncements since the Company filed its December 31, 2013 Form 10-K that are expected to have material impact on the Company's future consolidated financial statements.

2_LOSS_PER_COMMON_SHARE_Detail

2. LOSS PER COMMON SHARE (Details Narrative)	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Earnings Per Share [Abstract]	'	'
Antidilutive shares included in earnings per loss	0	0

3_FOREIGN_CURRENCY_TRANSLATION1

3. FOREIGN CURRENCY TRANSLATION (Details Narrative) (USD $)	Jun. 30, 2014	Dec. 31, 2013
Foreign Currency Translation [Abstract]	'	'
Accumulated other comprehensive income	$240,289	$250,514

4_FOREIGN_CURRENCY_TRANSACTION1

4. FOREIGN CURRENCY TRANSACTIONS (Details Narrative) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Foreign Currency Translation [Abstract]	'	'	'	'
Foreign currency transaction gains (losses)	($8,447)	$21,243	($10,225)	($21,660)

6_LONGTERM_LIABILITIES_Details

6. LONG-TERM LIABILITIES (Details Narrative) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013
Long-Term Liabilities	'	'	'	'	'
Payments made for product development	'	'	$612,000	'	'
Development income	74,776	0	74,776	0	'
Accrued licensing fees	$778,107	'	$778,107	'	$784,776

7_INCOME_TAXES_Details_Narrati

7. INCOME TAXES (Details Narrative) (USD $)	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Income Tax Disclosure [Abstract]	'	'
Income tax expense	$0	$0
Deferred tax asset	2,543,000	'
Valuation allowance	2,543,000	'
Federal net operating loss carryforwards	597,000	'
Foreign net operating loss carryforwards	1,674,000	'
Temporary differences related to the recognition of accrued licensing fees	$272,000	'