Proteo (PTEO) 10-Q 5 Aug 19 2019 Q2 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2019	Aug. 01, 2019
Document And Entity Information
Entity Registrant Name	PROTEO INC
Entity Central Index Key	0001063104
Document Type	10-Q
Document Period End Date	Jun. 30, 2019
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		24,879,350
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2019
Entity Small Business	true
Entity Emerging Growth	false
Entity File Number	000-30728
Interactive data current?	Yes
State of incorporation	NV

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
CURRENT ASSETS
Cash and cash equivalents	$ 121,855	$ 89,132
Research supplies	57,168	57,785
Grant funds receivable	31,362	37,562
Prepaid expenses and other current assets	61,504	64,543
Total current assets	271,889	249,022
PROPERTY AND EQUIPMENT, NET	4,187	4,929
Total assets	276,076	253,951
CURRENT LIABILITIES
Accounts payable and accrued liabilities	104,395	127,217
Total current liabilities	104,395	127,217
LONG TERM LIABILITIES
Accrued licensing fees	647,885	652,359
Other liabilities	144,353	145,396
Total long term liabilities	792,238	797,755
Total liabilities	896,633	924,972
COMMITMENTS AND CONTINGENCIES (Note 6)
STOCKHOLDERS' DEFICIT
Common stock, par value $0.001 per share; 300,000,000 shares authorized; 24,879,350 and 24,379,350 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively	24,880	24,380
Additional paid-in capital	9,296,364	9,144,464
Accumulated other comprehensive loss	(31,428)	(31,231)
Accumulated deficit	(9,911,297)	(9,812,564)
Total Proteo, Inc. Stockholders' Deficit	(620,557)	(674,127)
Noncontrolling Interest	0	3,106
Total stockholders' deficit	(620,577)	(671,021)
Total liabilities and stockholders' deficit	276,076	253,951
Series A Preferred Stock [Member]
STOCKHOLDERS' DEFICIT
Preferred stock value	724	724
Series B-1 Preferred Stock [Member]
STOCKHOLDERS' DEFICIT
Preferred stock value	100	100
Series B-2 Preferred Stock [Member]
STOCKHOLDERS' DEFICIT
Preferred stock value	$ 100	$ 0

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares	Jun. 30, 2019	Dec. 31, 2018
Non-voting preferred stock par value	$ 0.001	$ 0.001
Non-voting preferred stock shares authorized	10,000,000	10,000,000
Common stock par value	$ 0.001	$ 0.001
Common stock, shares authorized	300,000,000	300,000,000
Common stock, shares issued	24,379,350	24,379,350
Common stock, shares outstanding	24,379,350	24,379,350
Series A Preferred Stock [Member]
Non-voting preferred stock shares issued	723,590	723,590
Non-voting preferred stock shares outstanding	723,590	723,590
Series B-1 Preferred Stock [Member]
Non-voting preferred stock shares issued	100,000	100,000
Non-voting preferred stock shares outstanding	100,000	100,000
Series B-2 Preferred Stock [Member]
Non-voting preferred stock shares issued	100,000	0
Non-voting preferred stock shares outstanding	100,000	0

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
REVENUES	$ 0	$ 40,256	$ 0	$ 207,631
EXPENSES
General and administrative	59,453	40,899	109,012	76,895
Research and development, net of grants	3,682	10,648	7,298	0
TOTAL OPERATING EXPENSES	63,135	51,547	116,310	76,895
INCOME (LOSS) FROM OPERATIONS	(63,135)	(11,291)	(116,310)	130,736
INTEREST AND OTHER INCOME (EXPENSE), NET	(5,386)	39,373	14,471	19,642
NET INCOME (LOSS)	(68,521)	28,082	(101,839)	150,378
LESS: NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTEREST	(1,836)	0	(3,106)	0
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS	(66,685)	28,082	(98,733)	150,378
FOREIGN CURRENCY TRANSLATION ADJUSTMENTS	1,778	(1,205)	(197)	(2,861)
COMPREHENSIVE INCOME (LOSS)	$ (64,907)	$ 26,877	$ (98,930)	$ 147,517
BASIC AND DILUTED EARNINGS (LOSS) PER COMMON SHARE	$ 0	$ 0	$ 0	$ 0.01
BASIC AND DILUTED EARNINGS (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS PER SHARE	$ 0	$ 0	$ 0	$ 0.01
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING BASIC AND DILUTED	24,879,350	23,879,350	24,840,676	23,879,350
Development Agreement [Member]
REVENUES	$ 0	$ 40,256	$ 0	$ 77,694
Grant Revenue [Member]
REVENUES	$ 0	$ 0	$ 0	$ 129,937

CONSOLIDATED STATEMENTS OF STOC

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) - USD ($)	Preferred Stock	Common Stock [Member]	Additional Paid-In Capital	Other Comprehensive Income / Loss	Retained Earnings / Accumulated Deficit	Noncontrolling Interest	Total
Beginning balance, shares at Dec. 31, 2017	723,590	23,879,350
Beginning balance, value at Dec. 31, 2017	$ 724	$ 23,880	$ 8,988,125	$ (29,827)	$ (9,848,699)	$ 0	$ (865,797)
Other comprehensive loss				(1,656)			(1,656)
Net income (loss)					122,296		122,296
Ending balance, shares at Mar. 31, 2018	723,590	23,879,350
Ending balance, value at Mar. 31, 2018	$ 724	$ 23,880	8,988,125	(31,483)	(9,726,403)	0	(745,157)
Beginning balance, shares at Dec. 31, 2017	723,590	23,879,350
Beginning balance, value at Dec. 31, 2017	$ 724	$ 23,880	8,988,125	(29,827)	(9,848,699)	0	(865,797)
Net income (loss)							150,378
Ending balance, shares at Jun. 30, 2018	723,590	23,879,350
Ending balance, value at Jun. 30, 2018	$ 724	$ 23,880	8,988,125	(32,688)	(9,698,321)	0	(718,280)
Beginning balance, shares at Dec. 31, 2017	723,590	23,879,350
Beginning balance, value at Dec. 31, 2017	$ 724	$ 23,880	8,988,125	(29,827)	(9,848,699)	0	(865,797)
Ending balance, shares at Dec. 31, 2018	823,590	24,379,350
Ending balance, value at Dec. 31, 2018	$ 824	$ 24,380	9,144,464	(31,231)	(9,812,564)	3,106	(671,021)
Beginning balance, shares at Mar. 31, 2018	723,590	23,879,350
Beginning balance, value at Mar. 31, 2018	$ 724	$ 23,880	8,988,125	(31,483)	(9,726,403)	0	(745,157)
Other comprehensive loss				(1,205)			(1,205)
Net income (loss)					28,082		28,082
Ending balance, shares at Jun. 30, 2018	723,590	23,879,350
Ending balance, value at Jun. 30, 2018	$ 724	$ 23,880	8,988,125	(32,688)	(9,698,321)	0	(718,280)
Beginning balance, shares at Dec. 31, 2018	823,590	24,379,350
Beginning balance, value at Dec. 31, 2018	$ 824	$ 24,380	9,144,464	(31,231)	(9,812,564)	3,106	(671,021)
Stock issued for cash, shares		500,000
Stock issued for cash, value		$ 500	39,500				40,000
Other comprehensive loss				(1,975)			(1,975)
Net income (loss)					(32,048)	(1,270)	(33,318)
Ending balance, shares at Mar. 31, 2019	823,590	24,879,350
Ending balance, value at Mar. 31, 2019	$ 824	$ 24,880	9,183,964	(33,206)	(9,844,612)	1,836	(666,314)
Beginning balance, shares at Dec. 31, 2018	823,590	24,379,350
Beginning balance, value at Dec. 31, 2018	$ 824	$ 24,380	9,144,464	(31,231)	(9,812,564)	3,106	(671,021)
Net income (loss)							(101,839)
Ending balance, shares at Jun. 30, 2019	923,590	24,879,350
Ending balance, value at Jun. 30, 2019	$ 924	$ 24,880	9,296,364	(31,428)	(9,911,297)	0	(620,577)
Beginning balance, shares at Mar. 31, 2019	823,590	24,879,350
Beginning balance, value at Mar. 31, 2019	$ 824	$ 24,880	9,183,964	(33,206)	(9,844,612)	1,836	(666,314)
Stock issued for cash, shares	100,000
Stock issued for cash, value	$ 100		112,400				112,500
Other comprehensive loss				1,778			1,778
Net income (loss)					(66,685)	(1,836)	(68,521)
Ending balance, shares at Jun. 30, 2019	923,590	24,879,350
Ending balance, value at Jun. 30, 2019	$ 924	$ 24,880	$ 9,296,364	$ (31,428)	$ (9,911,297)	$ 0	$ (620,577)

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$ (101,839)	$ 150,378
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation	700	974
Foreign currency transaction (gain) loss	(4,474)	(16,868)
Changes in operating assets and liabilities:
Research supplies	219	0
Grant funds receivable	5,875	(37,365)
Development agreement receivables	0	5,962
Prepaid expenses and other current assets	2,520	24,623
Accounts payable and accrued liabilities	(22,464)	(100,000)
Deferred revenue	0	(59,808)
Other liabilities	(45)	0
NET CASH USED IN OPERATING ACTIVITIES	(119,508)	(32,104)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock	40,000	0
Proceeds from issuance of preferred stock	112,500	0
Deposit for preferred stock	0	42,173
Proceeds from related party loan	0	61,434
NET CASH PROVIDED BY FINANCING ACTIVITIES	152,500	103,607
EFFECT OF FOREIGN CURRENCY EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS	(269)	(7,598)
NET INCREASE IN CASH AND CASH EQUIVALENTS	32,723	63,905
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD	89,132	113,915
CASH AND CASH EQUIVALENTS - END OF PERIOD	$ 121,855	$ 177,820

1. NATURE OF BUSINESS AND BASIS

1. NATURE OF BUSINESS AND BASIS OF PRESENTATION	6 Months Ended
	Jun. 30, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
NATURE OF BUSINESS AND BASIS OF PRESENTATION	1. NATURE OF BUSINESS AND BASIS OF PRESENTATION BASIS OF PRESENTATION The accompanying condensed consolidated balance sheet as of December 31, 2018, which has been derived from audited financial statements, and the accompanying interim condensed consolidated financial statements as of June 30, 2019 and for the three-month and six-month periods ended June 30, 2019 and 2018, 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, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019, 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, 2018 filed with the SEC on April 15, 2019. 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. 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". RECLASSIFICATIONS Certain reclassifications have been made to the unaudited June 30, 2018 financial statements to conform to the 2019 presentation. Intercompany foreign exchange gains approximating $48,000 and $22,000 for the three-month and six-month periods ended June 30, 2018, respectively were reclassified from interest and other income (expense), net to other comprehensive loss. 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 fully 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. LIQUIDITY Management expects existing cash to be sufficient to fund the Company’s operations for at least twelve months from the issuance date of these interim financial statements. 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, entering into revenue sharing arrangements and obtaining government grants. 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. OTHER RISKS AND UNCERTAINTIES 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 (“PBAG”), its wholly owned subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation. RESEARCH AND DEVELOPMENT ACTIVITIES The Company capitalizes the cost of supplies used in its research and development activities if such supplies are deemed to have alternative future uses, usually in other research and development projects. Such costs are expensed as used to research and development expenses in the accompanying condensed consolidated statements of operations. Nonrefundable advance payments for goods or services that have the characteristics that will be used or rendered for future research and development activities are deferred and capitalized as prepaid expenses. Such amounts are expensed to research and development as the related goods and services are received. The costs of materials that are acquired for a particular research and development project and that have no alternative future uses (in other research and development projects or otherwise) and therefore no separate economic values are expensed as research and development costs at the time the costs are incurred. The Company may receive grants from the German government which are used to fund research and development activities (see Note 7). Grant funds received or to be received for the reimbursement of qualified research and development expenses are offset against such expenses in the accompanying condensed consolidated statements of operations and comprehensive income (loss) when the related expenses are incurred. 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, 2019 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 six-month periods ended June 30, 2019 and 2018, did not have any assets or liabilities that were measured at fair value on a non-recurring basis. REVENUE RECOGNITION On January 1, 2018, the Company adopted Topic 606 using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Adoption of the new standard did not result in any change to the Company’s opening retained earnings as of January 1, 2018 as product sale revenue is not significant. In determining the appropriate amount of revenue to be recognized as it fulfills its performance obligations under its agreements, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations based on estimated selling prices; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. As more fully described in Note 5, amounts received under the Development Agreement (as defined below) are initially deferred and recognized as revenue over the projected performance period under the Development Agreement in relation to development expenses incurred. SIGNIFICANT RECENT ACCOUNTING PRONOUNCEMENTS In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) During the six-months ended June 30, 2019, there have been no other changes to the Company’s significant accounting policies as described in the Annual Report on Form 10-K for the fiscal year ended December 31, 2018.

2. EARNINGS (LOSS) PER COMMON S

2. EARNINGS (LOSS) PER COMMON SHARE	6 Months Ended
	Jun. 30, 2019
Earnings Per Share [Abstract]
EARNINGS (LOSS) PER COMMON SHARE	2. EARNINGS (LOSS) PER COMMON SHARE Basic earnings (loss) per common share is computed based on the weighted average number of shares outstanding for the period. Diluted earnings (loss) per common share is computed by dividing net income (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, 2019 and 2018. As such, basic and diluted earnings (loss) per common share equals net income (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, 2019
Foreign Currency Translation [Abstract]
FOREIGN CURRENCY TRANSLATION	3. 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 loss and accumulated in a separate component of stockholders' deficit. Accumulated other comprehensive loss approximated ($31,000) and ($31,000) at June 30, 2019 and December 31, 2018, respectively.

4. FOREIGN CURRENCY TRANSACTION

4. FOREIGN CURRENCY TRANSACTIONS	6 Months Ended
	Jun. 30, 2019
Foreign Currency Translation [Abstract]
FOREIGN CURRENCY TRANSACTIONS	4. FOREIGN CURRENCY TRANSACTIONS The Company records payables related to a certain licensing agreement (see Note 6) in accordance with the Foreign Currency Matters Topic of the Codification. Quarterly commitments under such agreement are denominated in Euro. 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 (losses) of approximately ($8,000) and $37,000 for the three-month periods ended June 30, 2019 and 2018, respectively, and $4,000 and $17,000 for the six-month periods ended June 30, 2019 and 2018, respectively, which are included in interest and other income (expense), net in the accompanying condensed consolidated statements of operations and comprehensive loss.

5. DEFERRED REVENUES

5. DEFERRED REVENUES	6 Months Ended
	Jun. 30, 2019
Deferred Revenue Disclosure [Abstract]
DEFERRED REVENUES	5. 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 Current Report on 8-K filed with the SEC on May 22, 2014). The third party agreed to 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. 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. Total payments by the third party to the Company were to not exceed 3.5 million Euro (approximately $4.1 million). Through June 30, 2018, the Company received approximately 1,633,000 Euro ($1,989,000) of the 3.5 million Euro maximum. 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 are the payments refundable, even if the drug is never commercialized. As no revenue sharing payments will be made unless Elafin is commercialized, the payments received are being accounted for as payments 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 third party will be deferred and recognized as revenue over the projected performance period under the Development Agreement in relation to expenses incurred. For the three-month and six-month periods ended June 30, 2019 and 2018, the Company recognized approximately $0 and $40,000, and $0 and $78,000, respectively, of development income under the Development Agreement, which is included in revenues in the accompanying condensed consolidated statements of operations. Deferred revenues approximated $0 at both June 30, 2019 and December 31, 2018. At this time, we believe it is unlikely that the Company will receive any future amounts under the Development Agreement.

6. COMMITMENTS AND CONTINGENCIE

6. COMMITMENTS AND CONTINGENCIES	6 Months Ended
	Jun. 30, 2019
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	6. COMMITMENTS AND CONTINGENCIES ACCRUED LICENSING FEES - RELATED PARTY 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 Euro 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, February 2012, February 2013, June 2014, April 2017 and again in June 2019, 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 Euro is due on November 15, 2020. While the total amount owed does not currently bear interest, any late payment is 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 26% of the Company's outstanding common stock as of June 30, 2019. At June 30, 2019, the Company has accrued approximately $648,000 of licensing fees payable to Dr. Wiedow, which are included in long-term liabilities. This is a decrease over the respective accrual of approximately $652,000 at December 31, 2018, which was solely due to changes in foreign currency exchange rates. OTHER LIABILITIES Other liabilities at June 30, 2019 and December 31, 2018 consist of employee compensation that was incurred in 2015 to 2017, but for which payment was agreed to be deferred until November 2020.

7. GRANTS

7. GRANTS	6 Months Ended
	Jun. 30, 2019
Research and Development [Abstract]
GRANTS	7. GRANTS In June 2016, the German State of Schleswig-Holstein granted PBAG approximately 874,000 Euros (approximately $1,021,000) for further research and development of the Company's pharmaceutical product Elafin (the “Grant”). The Grant, as amended, covers 50% of eligible research and development costs incurred from December 1, 2015 through November 30, 2019. Research and development expenses for the three-month periods ended June 30, 2019 and 2018 were reduced by approximately $31,000 and $42,000, respectively, for Grant funds received and accrued during those periods. For the six-month periods ended June 30, 2019 and 2018, research and development expenses were reduced by Grant funds of approximately $62,000 and $233,000, respectively. Approximately €28,000 ($31,000) and €33,000 ($38,000) of additional eligible expenses that were not previously reimbursed at June 30, 2019 and December 31, 2018, respectively, are included in the accompanying condensed consolidated balance sheets as grant funds receivable. During the six months ended June 30, 2018, the company received approval from the government to submit certain expenses for reimbursement that had been previously expensed under GAAP. These expenses amounted to $177,000 and resulted in grant revenue exceeding grant expenses for the period. This has resulted in the presentation of net Grant revenue for the six months ended June 30, 2018.

8. RELATED PARTY LOAN

8. RELATED PARTY LOAN	6 Months Ended
	Jun. 30, 2019
Related Party Transactions [Abstract]
RELATED PARTY LOAN	8. RELATED PARTY LOAN In March 2018, the Company’s president provided a short-term loan of 50,000 Euro ($61,000) to the Company. During July 2018, the Company repaid such loan.

9. INCOME TAXES

9. INCOME TAXES	6 Months Ended
	Jun. 30, 2019
Income Tax Disclosure [Abstract]
INCOME TAXES	9. 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 at June 30, 2019 and December 31, 2018. There is no material income tax expense recorded for the six-month periods ended June 30, 2019 and 2018, due to the Company's history of net losses and related changes to the full valuation allowance for deferred tax assets. 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, 2019, there were no increases or decreases to liability for income taxes associated with uncertain tax positions.

10. CAPITAL EQUITY TRANSACTIONS

10. CAPITAL EQUITY TRANSACTIONS	6 Months Ended
	Jun. 30, 2019
Equity [Abstract]
CAPITAL EQUITY TRANSACTIONS	10. CAPITAL EQUITY TRANSACTIONS COMMON STOCK On December 12, 2018, Proteo, Inc., entered into a Common Stock Purchase Agreement (the “Agreement”) with Jork von Reden (the “Investor”), who is also a member of the Company’s board of directors. Pursuant to the Agreement, the Company agreed to issue and sell to the Investor 1,000,000 shares of the Company’s Common Stock (the “Purchase Shares”) at the price of $0.08 per share (the “Purchase Price”), for an aggregate purchase price of $80,000. The Purchase Price was equal to the closing price of the Registrant’s common stock as quoted on the OTCQB on December 6, 2018. The initial closing of 500,000 of the Purchase Shares occurred upon the Company’s receipt of the initial payment of $40,000 of the Purchase Price in December 2018. A second closing of the remaining 500,000 Purchase Shares occurred in January 2019 (the “Second Closing Date”), at which time the Investor paid the remaining $40,000 Purchase Price. PREFERRED STOCK On September 9, 2016, the Company entered into a Preferred Stock Purchase Agreement (the “B-1 Stock Agreement”) with a third-party (“B-1 Stock Investor”). Pursuant to the B-1 Stock Agreement, the Company agreed to issue and sell to the B-1 Stock Investor 1,000,000 shares of the Company’s Series B-1 Preferred Stock at the price of 1.00 Euro per share, for an aggregate purchase price of 1,000,000 Euro. Further details are described in the Company's Current Report on Form 8-K filed with the SEC on September 13, 2016. The Company received deposits totaling 100,000 Euro ($117,000) through September 30, 2018, including 20,000 Euro ($25,000) received during the three-months ended March 31, 2018. As conditions for the initial closing were met, 100,000 shares of Series B-1 Preferred Stock were issued during September 2018. The Company is currently negotiating with the B-1 Stock Investor to complete the transaction, but at this time the Company believes that it is unlikely that the full transaction will close in the near future. On April 10, 2019, the Company entered into a Preferred Stock Purchase Agreement (the “B-2 Stock Agreement”) with a Swiss corporation (the "B-2 Stock Investor"). Pursuant to the B-2 Stock Agreement, the Company agreed to issue and sell to the B-2 Stock Investor 1,000,000 shares of the Company’s Series B-2 Preferred Stock (the “Purchase Shares”) at the price of €1.00 per share (the “Purchase Price”), for an aggregate purchase price of €1,000,000. An initial closing of 100,000 of the Purchase Shares occurred on June 30, 2019 (the “Initial Closing Date”). Subsequent closings of the remaining Purchase Shares will occur on the fifth business day after such date or dates that the B-2 Stock Investor delivers all or a portion of the Purchase Price with respect to such Purchase Shares; provided, however, that B-2 Stock Investor shall deliver the Purchase Price for all remaining Purchase Shares on or before June 30, 2020. The transaction was exempt from the registration requirements of the Securities Act of 1933, as amended, by virtue of the exemptions available under Regulation S and the rules promulgated thereunder. During the six months ended June 30, 2019, the Company received €100,000 ($113,000) pursuant to the B-2 Stock Agreement. As conditions for the initial closing were met, 100,000 shares of Series B-2 Preferred Stock were issued during June 2019.

1. NATURE OF BUSINESS AND BAS_2

1. NATURE OF BUSINESS AND BASIS OF PRESENTATION (Policies)	6 Months Ended
	Jun. 30, 2019
Accounting Policies [Abstract]
BASIS OF PRESENTATION	BASIS OF PRESENTATION The accompanying condensed consolidated balance sheet as of December 31, 2018, which has been derived from audited financial statements, and the accompanying interim condensed consolidated financial statements as of June 30, 2019 and for the three-month and six-month periods ended June 30, 2019 and 2018, 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, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019, 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, 2018 filed with the SEC on April 15, 2019.
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. 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".
RECLASSIFICATIONS	RECLASSIFICATIONS Certain reclassifications have been made to the unaudited June 30, 2018 financial statements to conform to the 2019 presentation. Intercompany foreign exchange gains approximating $48,000 and $22,000 for the three-month and six-month periods ended June 30, 2018, respectively were reclassified from interest and other income (expense), net to other comprehensive loss.
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 fully 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.
LIQUIDITY	LIQUIDITY Management expects existing cash to be sufficient to fund the Company’s operations for at least twelve months from the issuance date of these interim financial statements. 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, entering into revenue sharing arrangements and obtaining government grants. 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.
OTHER RISKS AND UNCERTAINTIES	OTHER RISKS AND UNCERTAINTIES 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 (“PBAG”), its wholly owned subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation.
RESEARCH AND DEVELOPMENT ACTIVITIES	RESEARCH AND DEVELOPMENT ACTIVITIES The Company capitalizes the cost of supplies used in its research and development activities if such supplies are deemed to have alternative future uses, usually in other research and development projects. Such costs are expensed as used to research and development expenses in the accompanying condensed consolidated statements of operations. Nonrefundable advance payments for goods or services that have the characteristics that will be used or rendered for future research and development activities are deferred and capitalized as prepaid expenses. Such amounts are expensed to research and development as the related goods and services are received. The costs of materials that are acquired for a particular research and development project and that have no alternative future uses (in other research and development projects or otherwise) and therefore no separate economic values are expensed as research and development costs at the time the costs are incurred. The Company may receive grants from the German government which are used to fund research and development activities (see Note 7). Grant funds received or to be received for the reimbursement of qualified research and development expenses are offset against such expenses in the accompanying condensed consolidated statements of operations and comprehensive income (loss) when the related expenses are incurred.
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, 2019 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 six-month periods ended June 30, 2019 and 2018, did not have any assets or liabilities that were measured at fair value on a non-recurring basis.
REVENUE RECOGNITION	REVENUE RECOGNITION On January 1, 2018, the Company adopted Topic 606 using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Adoption of the new standard did not result in any change to the Company’s opening retained earnings as of January 1, 2018 as product sale revenue is not significant. In determining the appropriate amount of revenue to be recognized as it fulfills its performance obligations under its agreements, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations based on estimated selling prices; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. As more fully described in Note 5, amounts received under the Development Agreement (as defined below) are initially deferred and recognized as revenue over the projected performance period under the Development Agreement in relation to development expenses incurred.
SIGNIFICANT RECENT ACCOUNTING PRONOUNCEMENTS	SIGNIFICANT RECENT ACCOUNTING PRONOUNCEMENTS In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) During the six-months ended June 30, 2019, there have been no other changes to the Company’s significant accounting policies as described in the Annual Report on Form 10-K for the fiscal year ended December 31, 2018.

1. NATURE OF BUSINESS (Details

1. NATURE OF BUSINESS (Details Narrative)	Jun. 30, 2019USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Fair value assets	$ 0
Fair value liabilities	$ 0

2. EARNINGS (LOSS) PER COMMON_2

2. EARNINGS (LOSS) PER COMMON SHARE (Details Narrative) - shares	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Earnings Per Share [Abstract]
Antidilutive shares included in earnings per loss	0	0

3. FOREIGN CURRENCY TRANSLATI_2

3. FOREIGN CURRENCY TRANSLATION (Details Narrative) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Foreign Currency Translation [Abstract]
Accumulated other comprehensive income (loss)	$ (31,428)	$ (31,231)

4. FOREIGN CURRENCY TRANSACTI_2

4. FOREIGN CURRENCY TRANSACTIONS (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Foreign Currency Translation [Abstract]
Foreign currency transaction gains (losses)	$ 4,474	$ 16,868

5. DEFERRED REVENUES (Details N

5. DEFERRED REVENUES (Details Narrative)	3 Months Ended		6 Months Ended		50 Months Ended
	Jun. 30, 2019USD ($)	Jun. 30, 2018USD ($)	Jun. 30, 2019USD ($)	Jun. 30, 2018USD ($)	Jun. 30, 2018USD ($)	Jun. 30, 2018EUR (€)	Dec. 31, 2018USD ($)
Revenues	$ 0	$ 40,256	$ 0	$ 207,631	$ 1,989,000
Development Agreement [Member]
Revenues	0	$ 40,256	0	$ 77,694
Deferred revenue	$ 0		$ 0				$ 0
Euro [Member]
Revenues | €						€ 1,633,000

6. COMMITMENTS AND CONTINGENC_2

6. COMMITMENTS AND CONTINGENCIES (Details Narrative)	6 Months Ended
	Jun. 30, 2019USD ($)	Jun. 30, 2019EUR (€)	Dec. 31, 2018USD ($)
Accrued licensing fees | $	$ 647,885		$ 652,359
Dr. Wiedow [Member]
Licensing fee maturity date	Nov. 15, 2020
Dr. Wiedow [Member] | Euro [Member]
Accrued licensing fees | €		€ 570,000

7. GRANTS (Details Narrative)

7. GRANTS (Details Narrative)	3 Months Ended		6 Months Ended
	Jun. 30, 2019USD ($)	Jun. 30, 2018USD ($)	Jun. 30, 2019USD ($)	Jun. 30, 2018USD ($)	Jun. 30, 2019EUR (€)	Dec. 31, 2018USD ($)	Dec. 31, 2018EUR (€)
Research and development expenses reimbursed	$ 31,000	$ 42,000	$ 62,000	$ 233,000
Grant funds receivable	$ 31,362		$ 31,362			$ 37,562
Euro [Member]
Grant funds receivable | €					€ 28,000		€ 33,000

8. RELATED PARTY LOAN (Details

8. RELATED PARTY LOAN (Details Narrative) - USD ($)	6 Months Ended		7 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jul. 31, 2018	Mar. 31, 2019
Related Party Transactions [Abstract]
Proceeds from related party	$ 0	$ 61,434
Repayment of related party loan			$ 61,434
Related party loan balance				$ 0

9. INCOME TAXES (Details Narrat

9. INCOME TAXES (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Income Tax Disclosure [Abstract]
Material Income Tax expense	$ 0	$ 0
Liability for income taxes with uncertain tax positions	$ 0

10. CAPITAL EQUITY TRANSACTIO_2

10. CAPITAL EQUITY TRANSACTIONS (Details Narrative)	3 Months Ended		6 Months Ended		8 Months Ended		12 Months Ended
	Apr. 10, 2019USD ($)shares	Apr. 10, 2019EUR (€)shares	Jun. 30, 2019USD ($)shares	Jun. 30, 2018USD ($)	Sep. 09, 2016USD ($)shares	Sep. 09, 2016EUR (€)shares	Dec. 31, 2018USD ($)shares
Proceeds from issuance of common stock			$ 40,000	$ 0
Common Stock Purchase Agr [Member] | Investor [Member] | Common Stock [Member]
Stock issued new, shares | shares			500,000				500,000
Proceeds from issuance of common stock			$ 40,000				$ 40,000
B-1 Stock Agreement [Member] | B-1 Stock Investor [Member] | Series B-1 Preferred Stock [Member]
Stock issued new, shares | shares					100,000	100,000
Proceeds from issuance of common stock					$ 117,000
B-1 Stock Agreement [Member] | B-1 Stock Investor [Member] | Series B-1 Preferred Stock [Member] | Euro [Member]
Proceeds from issuance of common stock | €						€ 100,000
B-2 Stock Agreement [Member] | B-2 Stock Investor [Member] | Series B-2 Preferred Stock [Member]
Stock issued new, shares | shares	1,000,000	1,000,000
Proceeds from issuance of common stock	$ 113,000
B-2 Stock Agreement [Member] | B-2 Stock Investor [Member] | Series B-2 Preferred Stock [Member] | Euro [Member]
Proceeds from issuance of common stock | €		€ 100,000