Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Mar. 30, 2015 | Jun. 30, 2014 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | FALSE | ||
Document Period End Date | 31-Dec-14 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | CPMD | ||
Entity Registrant Name | CANNAPHARMARX, INC. | ||
Entity Central Index Key | 1081938 | ||
Current Fiscal Year End Date | -19 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Common Stock, Shares Outstanding | 17,374,407 | ||
Entity Public Float | $22,545,190 |
Balance_Sheets
Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Current assets | ||
Cash and cash equivalents | $1,605,239 | |
Prepaid expenses | 44,102 | |
Total current assets | 1,649,341 | 0 |
Fixed Assets: | ||
Furniture and fixtures, net of $3,020 in accumulated depreciation | 97,701 | 0 |
Deposit on specialty pharmacy acquisition | 50,000 | 0 |
Total Assets | 1,797,042 | |
Current liabilities | ||
Accounts payable and accrued expenses | 137,772 | 52,206 |
Accrued legal settlement payable in cash - current portion | 205,000 | |
Accrued legal settlement payable in stock | 1,597,500 | |
Accrued interest payable - related party | 25,894 | |
Related party loan | 213,934 | |
Total current liabilities | 1,940,272 | 292,034 |
Accrued legal settlement payable in cash - noncurrent portion | 145,000 | |
Total Liabilities | 2,085,272 | 292,034 |
Stockholders' Equity | ||
Preferred stock; $0.0001 par value, 10,000,000 shares authorized; no shares issued and outstanding | ||
Common stock, $0.0001 par value; 100,000,000 shares authorized; 17,374,407 and 2,384,407 issued and outstanding, respectively | 1,737 | 238 |
Additional paid in capital | 20,855,381 | 16,874,643 |
Retained deficit | -21,145,348 | -17,166,915 |
Total Stockholders' Equity | -288,230 | -292,034 |
Total Liabilities and Stockholders' Equity | $1,797,042 |
Balance_Sheets_Parenthetical
Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Statement of Financial Position [Abstract] | ||
Accumulated depreciation | $3,020 | |
Preferred stock, par value per share | $0.00 | $0.00 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value per share | $0.00 | $0.00 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 17,374,407 | 2,384,407 |
Common stock, shares outstanding | 17,374,407 | 2,384,407 |
Statements_of_Operations
Statements of Operations (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Revenue | $0 | $0 |
Operating Expenses: | ||
Research and development | 324,149 | |
General and administrative | 1,123,273 | 80,311 |
Legal settlement expense | 1,947,500 | |
Stock-based compensation: | ||
Stock-based compensation | 579,565 | |
Total operating expenses | 3,974,487 | 80,311 |
Income (loss) from operations | -3,974,487 | -80,311 |
Other income (expense) | ||
Interest income (expense) net | -3,946 | -14,095 |
Other income (expense) net | -3,946 | -14,095 |
Income (loss) before provision for income taxes | -3,978,433 | -94,406 |
Provision (credit) for income tax | 0 | 0 |
Net income (loss) | -3,978,433 | -94,406 |
Net income (loss) per share (Basic and fully diluted) | ($0.36) | ($0.04) |
Weighted average number of common shares outstanding | 11,068,869 | 2,384,407 |
Research and Development [Member] | ||
Stock-based compensation: | ||
Stock-based compensation | 265,634 | |
General and Administrative [Member] | ||
Stock-based compensation: | ||
Stock-based compensation | $313,931 |
Statement_of_Stockholders_Equi
Statement of Stockholders' Equity (USD $) | Total | Common Stock [Member] | Paid in Capital [Member] | Retained Deficit [Member] |
Beginning Balance at Dec. 31, 2012 | ($197,628) | $238 | $16,874,643 | ($17,072,509) |
Beginning Balance, shares at Dec. 31, 2012 | 2,384,407 | |||
Net loss | -94,406 | -94,406 | ||
Ending Balance at Dec. 31, 2013 | -292,034 | 238 | 16,874,643 | -17,166,915 |
Beginning Balance, shares at Dec. 31, 2013 | 2,384,407 | |||
CPRX acquisition | 296,000 | 900 | 295,100 | |
CPRX acquisition, shares | 9,000,000 | |||
Debt relief in sale | 71,672 | 71,672 | ||
Common stock sold | 3,035,000 | 599 | 3,034,401 | |
Common stock sold, shares | 5,990,000 | |||
Stock-based compensation | 579,565 | 579,565 | ||
Net loss | -3,978,433 | -3,978,433 | ||
Ending Balance at Dec. 31, 2014 | ($288,230) | $1,737 | $20,855,381 | ($21,145,348) |
Ending Balance, shares at Dec. 31, 2014 | 17,374,407 |
Statement_of_Cash_Flows
Statement of Cash Flows (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Cash Flows From Operating Activities: | ||
Net income (loss) | ($3,978,433) | ($94,406) |
Adjustments to reconcile net income to net cash provided by (used for) operating activities: | ||
Depreciation expense | 3,020 | |
Stock-based compensation expense | 579,565 | |
Compensatory loan increases/(decreases) | -180,000 | 60,000 |
Noncash write-off of related party loan | 71,672 | |
Legal settlement payable in stock | 1,597,500 | |
Changes in operating assets & liabilities: | ||
(Increase)/decrease in prepaid expenses | -44,102 | |
Increase/(decrease) in accounts payable and accrued expenses | 290,566 | 8,694 |
Increase/(decrease) in accrued interest payable - related party | -25,894 | 14,695 |
Increase/(decrease) in non-current legal settlement payable | 145,000 | |
Net cash provided by (used for) operating activities | -1,541,106 | -11,017 |
Cash Flows From Investing Activities: | ||
Purchase of fixed assets | -100,721 | |
Deposit paid toward Specialty Pharmacy acquisition | -50,000 | |
Net cash provided by (used for) investing activities | -150,721 | |
Cash Flows From Financing Activities: | ||
Proceeds from (paydowns of) related party loans | -33,934 | 10,992 |
Proceeds from sales of common stock | 3,331,000 | |
Net cash provided by (used for) financing activities | 3,297,066 | 10,992 |
Net Increase (Decrease) In Cash | 1,605,239 | -25 |
Cash At The Beginning Of The Period | 25 | |
Cash At The End Of The Period | 1,605,239 | |
Schedule of Non-Cash Investing and Financing Activities | ||
Related party loans | -71,672 | 60,000 |
Supplemental Disclosure | ||
Cash paid for interest | 0 | 0 |
Cash paid for income taxes | $0 | $0 |
Nature_of_Operations_and_Signi
Nature of Operations and Significant Accounting Policies | 12 Months Ended | ||
Dec. 31, 2014 | |||
Accounting Policies [Abstract] | |||
Nature of Operations and Significant Accounting Policies | NOTE 1. | NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES | |
NATURE OF OPERATIONS | |||
BUSINESS | |||
The Company was incorporated as Golden Dragon Holding Co. in the State of Delaware in December 2010 as a wholly owned subsidiary of Concord Ventures, Inc. (“Concord”). In late October 2014, the Company changed its legal name to CannaPharmaRx, Inc. (or “CannaPharmaRx”). | |||
CannaPharmaRx, Inc. (together with its consolidated subsidiaries, the “Company”) is a Delaware corporation whose shares are publicly quoted on the OTCQB operated by the OTC Markets Group, Inc. We are a development stage enterprise in accordance with Accounting Standards Codification (“ASC”) Topic 915 “Development Stage Entities.” We have been in the development stage since our inception on January 1, 2011 (“Inception”). | |||
On May 9, 2014, the Company entered into a Share Purchase Agreement (the “Share Purchase Agreement”) with CannaPharmaRx, Inc., a Colorado corporation (“CannaRx”), and David Cutler, the former President, Chief Executive Officer, Chief Financial Officer and director of the Company. Under the Share Purchase Agreement, CannaRx purchased 1,421,120 restricted shares of the Company’s common stock from Mr. Cutler and an additional 9,000,000 restricted shares of the Company’s common stock directly from the Company. As a result of the Share Purchase Agreement, CannaRx is the Company’s largest stockholder. | |||
On May 15, 2014, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with CannaRx and CPHR Acquisition Corp., a newly formed and wholly owned subsidiary of the Company (“CPHR”), pursuant to which CPHR would be merged with and into CannaRx, resulting in CPHR ceasing its corporate existence and CannaRx becoming a subsidiary of the Company. In the fourth quarter of 2014, in light of the Cohen litigation described in Item 3 (Legal Proceedings) of this report, the parties determined to abandon the Merger Agreement, and the Company and certain shareholders of CannaRx entered into share exchange agreements, as an alternate means of acquiring CannaRx. In anticipation of the settlement of the Cohen litigation, the Company subsequently decided to terminate the share exchange agreements and pursue the consummation of a merger agreement or another transaction on similar terms. By consummating a merger agreement or a similar transaction, the Company intends to cause CannaRx to become a subsidiary of the Company, and to operate its business through CannaRx. | |||
BASIS OF PRESENTATION | |||
The accompanying financial statements have been prepared in accordance with the Financial Accounting Standards Board (“FASB”) “FASB Accounting Standard Codification™” (the “Codification”) which is the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) in the United States. Certain amounts in prior periods have been reclassified to conform to current presentation. | |||
USE OF ESTIMATES | |||
The preparation of our financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in these financial statements and accompanying notes. Actual results could differ from those estimates. Due to uncertainties inherent in the estimation process, it is possible that these estimates could be materially revised within the next year. | |||
CASH AND CASH EQUIVALENTS | |||
Cash and cash equivalents consist of cash and highly liquid debt instruments with original maturities of less than three months. | |||
PROPERTY AND EQUIPMENT | |||
We acquired $100,721 in property and equipment during the year ended December 31, 2014. Of this amount, $50,000 represents the capitalized cost of our proprietary RECRUIT RegistryTM website development for cannabinoid medicines. This patient registry project was completed in the fourth quarter of 2014 and will not become operational until early 2015. Accordingly, no depreciation expense was recorded against this capitalized cost in 2014. In addition to the investment in our patient registry, another $50,721 was invested in office and computer equipment, primarily in the fourth quarter and coincident with the establishment of the Company’s new headquarters in Carneys Point, New Jersey on November 1, 2014. Depreciation expenses totaled $3,020 in 2014 and have been calculated using the straight line method over the estimated useful lives of the respective assets, ranging from three to seven years. | |||
DEFERRED COSTS AND OTHER OFFERING COSTS | |||
Costs with respect to raising capital in the two private placements of the Company’s common stock were expensed by the Company in 2014. These costs where applied as internal operational expenses in 2014. We had no deferred costs and other offering costs as of either December 31, 2014 or December 31, 2013. However, future costs associated with raising capital, be it debt or equity, may more likely be incurred as a direct variable cost with third parties. Our intent is to initially defer these costs and ultimately offset against the proceeds from these capital or financial transactions if successful, or expensed if the proposed financial transaction is unsuccessful. | |||
IMPAIRMENT OF LONG-LIVED AND INTANGIBLE ASSETS | |||
In the event that facts and circumstances indicated that the cost of long-lived and intangible assets may be impaired, an evaluation of recoverability will be performed. If an evaluation is required, the estimated future undiscounted cash flows associated with the asset will be compared to the asset’s carrying amount to determine if a write-down to market value or discounted cash flow value will be required. | |||
FAIR VALUES OF ASSETS AND LIABILITIES | |||
The Company groups its financial assets and financial liabilities generally measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. | |||
Level 1: | Valuation is based on quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities generally include debt and equity securities that are traded in an active exchange market. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities. | ||
Level 2: | Valuation is based on 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. For example, Level 2 assets and liabilities may include debt securities with quoted prices that are traded less frequently than exchange-traded instruments. | ||
Level 3: | Valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. This category generally includes certain private equity investments and long-term derivative contracts. | ||
The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. As of December 31, 2014 and 2013, the Company does not have any assets or liabilities which could be considered Level 2 or 3 in the hierarchy. | |||
The Company may also be required, from time to time, to measure certain other financial assets at fair value on a nonrecurring basis. These adjustments to fair value usually result from application of lower-of-cost-or-market accounting or write-downs of individual assets. There were no such adjustments in the years ended December 31, 2014 or 2013. | |||
FINANCIAL INSTRUMENTS | |||
The estimated fair value for financial instruments was determined at discrete points in time based on relevant market information. These estimates involved uncertainties and could not be determined with exact precision. The fair value of the Company’s financial instruments, which include cash, prepaid expenses, accounts payable and the related party loan, each approximate their carrying value due either to their short length to maturity or interest rates that approximate prevailing market rates. | |||
INCOME TAXES | |||
We account for income taxes under the liability method, 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 determined based on the difference 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. | |||
ADVERTISING AND PROMOTIONAL COSTS | |||
Advertising and promotional costs are expensed as incurred. Advertising and promotional expenses totaled $138,004 were incurred during the year ended December 31, 2014. There were no advertising and promotional costs for the year ended December 31, 2013. | |||
COMPREHENSIVE INCOME (LOSS) | |||
Comprehensive income is defined as all changes in stockholders’ equity (deficit), exclusive of transactions with owners, such as capital investments. Comprehensive income includes net income or loss, changes in certain assets and liabilities that are reported directly in equity such as translation adjustments on investments in foreign subsidiaries and unrealized gains (losses) on available-for-sale securities. From our inception, there have been no differences between our comprehensive loss and net loss. Our comprehensive loss was identical to our net loss for the years ended December 31, 2014 and 2013. | |||
INCOME (LOSS) PER SHARE | |||
Income (loss) per share is presented in accordance with Accounting Standards Update (“ASU”), Earning per Share (Topic 260) which requires the presentation of both basic and diluted earnings per share (“EPS”) on the consolidated income statements. Basic EPS would exclude any dilutive effects of options, warrants and convertible securities but does include the restricted shares of common stock issued. Diluted EPS would reflect the potential dilution that would occur if securities of other contracts to issue common stock were exercised or converted to common stock. Basic EPS calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted EPS calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. Stock options outstanding at December 31, 2014 of 3,900,000 shares are excluded from the calculations of diluted net loss per share since their effect is antidilutive. | |||
STOCK-BASED COMPENSATION | |||
We have adopted ASC Topic 718, Accounting for Stock-Based Compensation, which establishes a fair value method of accounting for stock-based compensation plans. In accordance with guidance now incorporated in ASC Topic 718, the cost of stock options and warrants issued to employees and non-employees is measured on the grant date based on the fair value. The fair value is determined using the Black-Scholes option pricing model. The resulting amount is charged to expense on the straight-line basis over the period in which we expect to receive the benefit, which is generally the vesting period. The fair value of stock warrants was determined at the date of grant using the Black-Scholes option pricing model. The Black-Scholes option model requires management to make various estimates and assumptions, including expected term, expected volatility, risk-free rate, and dividend yield. | |||
BUSINESS SEGMENTS | |||
Our activities during the years December 31, 2014 and 2013 comprised a single segment. | |||
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | |||
On June 10, 2014, the Financial Accounting Standards Board (“FASB”) issued update ASU 2014-10, Development Stage Entities (Topic 915). Amongst other things, the amendments in this update removed the definition of development stage entity from Topic 915, thereby removing the distinction between development stage entities and other reporting entities from U.S. GAAP. In addition, the amendments eliminate the requirements for development stage entities to (1) present inception-to-date information on the statements of income, cash flows and stockholders’ equity, (2) label the financial statements as those of a development stage entity; (3) disclose a description of the development stage activities in which the entity is engaged and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. The amendments are effective for annual reporting periods beginning after December 31, 2014 and interim reporting periods beginning after December 15, 2015. However, entities are permitted to early adopt for any annual or interim reporting period for which the financial statements have yet to be issued. The Company has elected to early adopt these amendments, and accordingly, has not labeled the financial statements as those of a development stage entity and has not presented inception-to-date information on the respective financial statements. | |||
We have reviewed all other recently issued, but not yet effective, accounting pronouncements and do not believe the future adoption of any such pronouncements may be expected to cause a material impact on our financial condition or the results of our operations. |
Going_Concern_and_Liquidity
Going Concern and Liquidity | 12 Months Ended | |
Dec. 31, 2014 | ||
Accounting Policies [Abstract] | ||
Going Concern and Liquidity | NOTE 2. | GOING CONCERN AND LIQUIDITY |
At December 31, 2014, we had $1,605,239 in cash assets but no operating business or other source of income, outstanding liabilities totaling $2,085,272 (of which $1,597,500 will be settled in stock) and a stockholders’ deficit of $288,230. | ||
In our financial statements for the fiscal years ended December 31, 2014 and 2013, the Report of the Independent Registered Public Accounting Firm includes an explanatory paragraph that describes substantial doubt about our ability to continue as a going concern. | ||
Our financial statements for the years ended December 31, 2014 and 2013 have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. | ||
We had a working capital deficit of $290,931 (which includes an offset of $1,597,500 in current liabilities that will be settled in stock) and reported an accumulated deficit since inception (January 1, 2011) of $288,230 as of December 31, 2014. | ||
It is our current intention to raise debt and/or equity financing to fund ongoing operating expenses to create value for our shareholders. There is no assurance that these events will be satisfactorily completed or at terms acceptable to the Company. |
Assets
Assets | 12 Months Ended | |
Dec. 31, 2014 | ||
Accounting Policies [Abstract] | ||
Assets | NOTE 3. | ASSETS |
As of December 31, 2014, we had $1,649,341 in current assets, primarily comprised of cash on deposit in a bank and prepaid insurance, $97,701 in furniture and fixtures, net of accumulated depreciation, and $50,000 on deposit related to the planned acquisition of a specialty pharmacy compared to December 31, 2013, when no assets existed for the Company. |
Accounts_Payable_and_Accrued_E
Accounts Payable and Accrued Expenses | 12 Months Ended | |
Dec. 31, 2014 | ||
Payables and Accruals [Abstract] | ||
Accounts Payable and Accrued Expenses | NOTE 4. | ACCOUNTS PAYABLE AND ACCRUED EXPENSES |
As of December 31, 2014, the balance of accounts payable and accrued expenses was $137,772, which is primarily comprised of trade payables. At December 31, 2013, no trade payables existed. Any and all obligations for expenses incurred by the Company prior to May 9, 2014 were paid by Mr. David Cutler, our sole officer, a director and majority shareholder and recorded as additions to related party loans (See Note 5 below). |
Related_Party_Loan_and_Accrued
Related Party Loan and Accrued Interest Payable | 12 Months Ended | |
Dec. 31, 2014 | ||
Accounting Policies [Abstract] | ||
Related Party Loan and Accrued Interest Payable | NOTE 5. | RELATED PARTY LOAN AND ACCRUED INTEREST PAYABLE |
On May 9, 2014, the related party loan payable by the Company was released by Mr. David J. Cutler, our sole officer, a director and majority shareholder. This loan was retired and settled, including interest accrued to date, in the initial transaction through which CannaPharmaRx acquired 9,000,000 shares of the Company in exchange for $296,000 and became the Company’s majority stockholder. |
Commitments
Commitments | 12 Months Ended | |
Dec. 31, 2014 | ||
Commitments and Contingencies Disclosure [Abstract] | ||
Commitments | NOTE 6. | COMMITMENTS |
OPERATING LEASE | ||
The Company has a non-cancellable operating lease for the office space in which its headquarters is located in Carneys Point, NJ. The term of this lease extends until October 31, 2015. The remaining lease commitments total $36,970 at December 31, 2014. We had no other capital or operating leases outstanding on either December 31, 2014 or 2013. |
Litigation_and_Accrued_Settlem
Litigation and Accrued Settlement Liabilities | 12 Months Ended | |
Dec. 31, 2014 | ||
Commitments and Contingencies Disclosure [Abstract] | ||
Litigation and Accrued Settlement Liabilities | NOTE 7. | LITIGATION AND ACCRUED SETTLEMENT LIABILITIES |
On October 30, 2014, Gary M. Cohen (“Cohen”), former President, Chief Operating Officer and board member of CannaPharmaRx, Inc., at the time a privately held Colorado corporation, sued the above-referenced CannaPharmaRx, Inc. and individual officer and board member, Gary Herick. On November 26, 2014, Cohen filed an amended complaint naming the remaining corporate entities and officers and board members referenced above. In his amended complaint, Cohen has alleged various employment-related contract and wrongful termination claims, as well as claims alleging breach of fiduciary duty, misappropriation of assets, violations of corporate law regarding his access to internal corporate information, and alleged violations of U.S. federal securities laws, the Sarbanes-Oxley Act of 2002 and the U.S. Internal Revenue Code. Cohen’s claims arose out of the Company’s Board of Directors’ removal of Cohen as an officer and board member of CannaPharmaRx, Inc., which occurred on or about October 23, 2014. All the named defendants in the lawsuit continue to maintain that Cohen’s claims and allegations are false and lack legal merit. To date, the defendants have removed Cohen’s lawsuit from state court in Hillsborough County, Florida—where it was filed originally—to the U.S. District Court in Tampa, Florida. In addition, all of the defendants have filed a motion to dismiss Cohen’s entire lawsuit, which motion is still pending. Settlement negotiations between the parties are active and ongoing. If the case is not settled, all the defendants intend to continue vigorously defending against Cohen’s claims and to assert counterclaims of their own. | ||
On November 11, 2014, Golden Dragon Holding Co. (“GDHC”), now named CannaPharmaRx, Inc., a Delaware corporation, sued Cohen for having published on the Internet fake press releases concerning his false allegations filed in his lawsuit against CannaPharmaRx, Inc. et al. in Florida. In the fake press releases, Cohen published various false statements about the Company and some of its officers and directors. To date, Cohen informed the Court of his intent to file a motion to dismiss, which he decided against doing after the judge assigned to the case informed him that the Court would view such a motion as frivolous. Cohen has since filed an answer, and a case scheduling and discovery conference is scheduled with the Court on March 31, 2015. Settlement negotiations are active and ongoing. If the case is not settled, GDHC intends to continue vigorously pursuing its claims. | ||
On March 25, 2015, the Company and Mr. Cohen agreed in principle to the terms of a settlement agreement that would resolve the aforementioned lawsuits and on March 30, 2015, the parties entered into a settlement and release of claims agreement. As part of that agreement, the Company agreed to purchase all of Mr. Cohen’s 2,250,000 shares of CannaRx for a purchase price of $350,000, with $85,000 payable up front and the remainder payable in equal installments of $15,000 per month over the next 17 months, and a payment of $10,000 in the eighteenth month. The amount of cash payable in the next year of $205,000 is included in current liabilities on the balance sheet. In addition, the Company would grant 600,000 unregistered restricted shares of its common stock to Mr. Cohen as part of the settlement. The Company has valued those shares at $1,597,500 which is included in current liabilities on the balance sheet. The Company will record a charge of $1,597,500 based on the trading average of the Company’s stock over the preceding ten days, in connection with the issuance of the restricted shares. |
Related_Party_Transactions
Related Party Transactions | 12 Months Ended | |
Dec. 31, 2014 | ||
Related Party Transactions [Abstract] | ||
Related Party Transactions | NOTE 8. | RELATED PARTY TRANSACTIONS |
On May 9, 2014, a related party loan was released by Mr. David J. Cutler, our sole officer, a director and majority shareholder. This loan was retired and settled in the initial transaction where CannaPharmaRx acquired 9,000,000 shares of the Company in exchange for $296,000. |
Stockholders_Equity
Stockholders' Equity | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||
Stockholders' Equity | NOTE 9. | STOCKHOLDERS’ EQUITY | |||||||||||||||||||||||
PREFERRED STOCK | |||||||||||||||||||||||||
The Company is authorized, without further action by the shareholders, to issue up to 10,000,000 shares of one or more series of preferred stock, at a par value of $0.0001, all of which is nonvoting. The Board of Directors may, without shareholder approval, determine the dividend rates, redemption prices, preferences on liquidation or dissolution, conversion rights, voting rights and any other preferences. | |||||||||||||||||||||||||
No shares of preferred stock were issued or outstanding during the years ended December 31, 2014 and 2013. | |||||||||||||||||||||||||
COMMON STOCK | |||||||||||||||||||||||||
The Company is authorized to issue 100,000,000 shares of common stock, par value $0.0001 per share. | |||||||||||||||||||||||||
On April 29, 2008, we held our annual meeting of stockholders at which meeting the majority of stockholders approved, an up to 3 for 1 reverse split of our shares of common stock. No such reverse split has been effected as yet. | |||||||||||||||||||||||||
RECENT ISSUANCES OF COMMON STOCK | |||||||||||||||||||||||||
There were 9,000,000 shares of common stock issued on May 9, 2014 to CannaRx in exchange for $296,000. | |||||||||||||||||||||||||
There were 5,990,000 shares of common stock issued during the year ended December 31, 2014 in exchange for $2,995,000 in gross proceeds to the Company. These shares were placed through a private placement memorandum offering to accredited investors only. | |||||||||||||||||||||||||
WARRANTS | |||||||||||||||||||||||||
No warrants were issued or outstanding during years ended December 31, 2014 or 2013. | |||||||||||||||||||||||||
STOCK OPTIONS | |||||||||||||||||||||||||
No stock options were issued or outstanding during the year ended December 31, 2013. | |||||||||||||||||||||||||
During 2014, the following stock options were issued to employees in 2014 which were not issued pursuant to a formal equity compensation plan: | |||||||||||||||||||||||||
December 31, 2014 | December 31, 2013 | ||||||||||||||||||||||||
Shares | Option | Weighted | Shares | Option | Weighted | ||||||||||||||||||||
Price | Average | Price | Average | ||||||||||||||||||||||
Price | Price | ||||||||||||||||||||||||
Outstanding Options at Beginning of Year | — | — | |||||||||||||||||||||||
Options Granted | 4,800,000 | $ | 3.78 | $ | 3.78 | — | $ | — | $ | — | |||||||||||||||
Options Forfeited | (1,200,000 | ) | $ | 3.78 | $ | 3.78 | — | $ | — | $ | — | ||||||||||||||
Options Outstanding at End of Year | 3,600,000 | $ | 3.78 | $ | 3.78 | — | $ | — | $ | — | |||||||||||||||
Options Exercisable at End of Year | — | — | |||||||||||||||||||||||
Effective November 1, 2014, the Company issued options to purchase 4,800,000 shares at an exercise price of $3.78 per share. The exercise price was determined based on the closing stock price quoted on the day prior to the issuance. The options vest over a three year period from the date of issuance, one-third at each anniversary date. | |||||||||||||||||||||||||
As a result of the 2014 stock option activity, the Company has recorded an aggregate stock-based compensation charge of $579,565 for the year ended December 31, 2014, of which $265,634 relates to research and development employees and $313,931 relates to general and administrative employees. As of December 31, 2014, there are stock-based compensation charges remaining to be amortized of $9,852,599, which will be amortized to expense over the remaining vesting period through October 2018 corresponding to the 3 year vesting period on such options. |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Income Tax Disclosure [Abstract] | |||||||||
Income Taxes | NOTE 10. | INCOME TAXES | |||||||
The significant components of the Company’s deferred tax assets and liabilities at December 31, 2014 and 2013 are as follows: | |||||||||
2014 | 2013 | ||||||||
Federal net operating losses | $ | 596,000 | $ | 33,000 | |||||
State net operating losses | 91,000 | 5,000 | |||||||
Stock options | 231,000 | — | |||||||
Litigation settlement | 718,000 | — | |||||||
Total gross deferred tax assets | 1,636,000 | 38,000 | |||||||
Less valuation allowance | (1,636,000 | ) | (38,000 | ) | |||||
Net deferred tax assets | $ | — | $ | — | |||||
At December 31, 2014 and 2013, the Company has recorded a full valuation allowance against its net deferred tax assets of approximately $1,636,000 and $38,000 respectively. The change in the valuation allowance during the year ended 2014 was approximately $1,598,000 and a full valuation allowance has been recorded since, in the judgement of management, these assets are not more likely than not to be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during periods in which those temporary differences and carryforwards become deductible or are utilized. | |||||||||
As of December 31, 2014, the Company has approximately $1,754,000 and $1,547,000 of federal and state net operating loss carryforwards, respectively. The federal net operating loss carryforwards begin to expire in 2030. State net operating loss carryforwards begin to expire in 2034. Due to the change in ownership provisions of the Internal Revenue Code, the availability of the Company’s net operating loss carry forwards could be subject to annual limitations against taxable income in future periods, which could substantially limit the eventual utilization of such carry forwards. The Company has not analyzed the historical or potential impact of its equity financings on beneficial ownership and therefore no determination has been made whether the net operating loss carry forward is subject to any Internal Revenue Code Section 382 limitation. To the extent there is a limitation, there could be a substantial reduction in the deferred tax asset with an offsetting reduction in the valuation allowance. | |||||||||
The income tax benefit for the years ended December 31, 2014 and 2013 differed from the amounts computed by applying the U.S. federal income tax rate of 34% as follows: | |||||||||
2014 | 2013 | ||||||||
Federal statutory rate | 34 | % | 34 | % | |||||
Permanent differences | (0.42 | )% | — | % | |||||
State taxes | 5.78 | % | 5 | % | |||||
Valuation allowance | (41.12 | )% | (39.00 | )% | |||||
Other - deferred only | 1.77 | % | — | % | |||||
Effective tax rate | — | % | — | % | |||||
The Company applies the elements of FASB ASC 740-10, Income Taxes – Overall, regarding accounting for uncertainty in income taxes. This clarifies the accounting for uncertainty in income taxes recognized in financial statements and required impact of a tax position to be recognized in the financial statements if that position is more likely than not of being sustained by the taxing authority. As of December 31, 2014 the Company did not have any unrecognized tax benefits and has not accrued any interest or penalties through 2014. The Company does not expect to have any unrecognized tax benefits within the next twelve months. The Company’s policy is to recognize interest and penalties related to tax matters within the income tax provision. Tax years beginning in 2011 are generally subject to examination by taxing authorities, although net operating losses from all years are subject to examinations and adjustments for at least three years following the year in which the attributes are used. |
Subsequent_Events
Subsequent Events | 12 Months Ended | |
Dec. 31, 2014 | ||
Subsequent Events [Abstract] | ||
Subsequent Events | NOTE 11. | SUBSEQUENT EVENTS |
We have evaluated subsequent events through the date of this filing and note there have been no events that would require disclosure in this report, other than the settlement agreement between the Company and Mr. Cohen discussed in Note 7 above and the March 2015 issuance of common stock discussed in Note 9 above. |
Nature_of_Operations_and_Signi1
Nature of Operations and Significant Accounting Policies (Policies) | 12 Months Ended | ||
Dec. 31, 2014 | |||
Accounting Policies [Abstract] | |||
NATURE OF OPERATIONS | NATURE OF OPERATIONS | ||
BUSINESS | |||
The Company was incorporated as Golden Dragon Holding Co. in the State of Delaware in December 2010 as a wholly owned subsidiary of Concord Ventures, Inc. (“Concord”). In late October 2014, the Company changed its legal name to CannaPharmaRx, Inc. (or “CannaPharmaRx”). | |||
CannaPharmaRx, Inc. (together with its consolidated subsidiaries, the “Company”) is a Delaware corporation whose shares are publicly quoted on the OTCQB operated by the OTC Markets Group, Inc. We are a development stage enterprise in accordance with Accounting Standards Codification (“ASC”) Topic 915 “Development Stage Entities.” We have been in the development stage since our inception on January 1, 2011 (“Inception”). | |||
On May 9, 2014, the Company entered into a Share Purchase Agreement (the “Share Purchase Agreement”) with CannaPharmaRx, Inc., a Colorado corporation (“CannaRx”), and David Cutler, the former President, Chief Executive Officer, Chief Financial Officer and director of the Company. Under the Share Purchase Agreement, CannaRx purchased 1,421,120 restricted shares of the Company’s common stock from Mr. Cutler and an additional 9,000,000 restricted shares of the Company’s common stock directly from the Company. As a result of the Share Purchase Agreement, CannaRx is the Company’s largest stockholder. | |||
On May 15, 2014, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with CannaRx and CPHR Acquisition Corp., a newly formed and wholly owned subsidiary of the Company (“CPHR”), pursuant to which CPHR would be merged with and into CannaRx, resulting in CPHR ceasing its corporate existence and CannaRx becoming a subsidiary of the Company. In the fourth quarter of 2014, in light of the Cohen litigation described in Item 3 (Legal Proceedings) of this report, the parties determined to abandon the Merger Agreement, and the Company and certain shareholders of CannaRx entered into share exchange agreements, as an alternate means of acquiring CannaRx. In anticipation of the settlement of the Cohen litigation, the Company subsequently decided to terminate the share exchange agreements and pursue the consummation of a merger agreement or another transaction on similar terms. By consummating a merger agreement or a similar transaction, the Company intends to cause CannaRx to become a subsidiary of the Company, and to operate its business through CannaRx. | |||
BASIS OF PRESENTATION | BASIS OF PRESENTATION | ||
The accompanying financial statements have been prepared in accordance with the Financial Accounting Standards Board (“FASB”) “FASB Accounting Standard Codification™” (the “Codification”) which is the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) in the United States. Certain amounts in prior periods have been reclassified to conform to current presentation. | |||
USE OF ESTIMATES | USE OF ESTIMATES | ||
The preparation of our financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in these financial statements and accompanying notes. Actual results could differ from those estimates. Due to uncertainties inherent in the estimation process, it is possible that these estimates could be materially revised within the next year. | |||
CASH AND CASH EQUIVALENTS | CASH AND CASH EQUIVALENTS | ||
Cash and cash equivalents consist of cash and highly liquid debt instruments with original maturities of less than three months. | |||
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT | ||
We acquired $100,721 in property and equipment during the year ended December 31, 2014. Of this amount, $50,000 represents the capitalized cost of our proprietary RECRUIT RegistryTM website development for cannabinoid medicines. This patient registry project was completed in the fourth quarter of 2014 and will not become operational until early 2015. Accordingly, no depreciation expense was recorded against this capitalized cost in 2014. In addition to the investment in our patient registry, another $50,721 was invested in office and computer equipment, primarily in the fourth quarter and coincident with the establishment of the Company’s new headquarters in Carneys Point, New Jersey on November 1, 2014. Depreciation expenses totaled $3,020 in 2014 and have been calculated using the straight line method over the estimated useful lives of the respective assets, ranging from three to seven years. | |||
DEFERRED COSTS AND OTHER OFFERING COSTS | DEFERRED COSTS AND OTHER OFFERING COSTS | ||
Costs with respect to raising capital in the two private placements of the Company’s common stock were expensed by the Company in 2014. These costs where applied as internal operational expenses in 2014. We had no deferred costs and other offering costs as of either December 31, 2014 or December 31, 2013. However, future costs associated with raising capital, be it debt or equity, may more likely be incurred as a direct variable cost with third parties. Our intent is to initially defer these costs and ultimately offset against the proceeds from these capital or financial transactions if successful, or expensed if the proposed financial transaction is unsuccessful. | |||
IMPAIRMENT OF LONG-LIVED AND INTANGIBLE ASSETS | IMPAIRMENT OF LONG-LIVED AND INTANGIBLE ASSETS | ||
In the event that facts and circumstances indicated that the cost of long-lived and intangible assets may be impaired, an evaluation of recoverability will be performed. If an evaluation is required, the estimated future undiscounted cash flows associated with the asset will be compared to the asset’s carrying amount to determine if a write-down to market value or discounted cash flow value will be required. | |||
FAIR VALUES OF ASSETS AND LIABILITIES | FAIR VALUES OF ASSETS AND LIABILITIES | ||
The Company groups its financial assets and financial liabilities generally measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. | |||
Level 1: | Valuation is based on quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities generally include debt and equity securities that are traded in an active exchange market. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities. | ||
Level 2: | Valuation is based on 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. For example, Level 2 assets and liabilities may include debt securities with quoted prices that are traded less frequently than exchange-traded instruments. | ||
Level 3: | Valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. This category generally includes certain private equity investments and long-term derivative contracts. | ||
The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. As of December 31, 2014 and 2013, the Company does not have any assets or liabilities which could be considered Level 2 or 3 in the hierarchy. | |||
The Company may also be required, from time to time, to measure certain other financial assets at fair value on a nonrecurring basis. These adjustments to fair value usually result from application of lower-of-cost-or-market accounting or write-downs of individual assets. There were no such adjustments in the years ended December 31, 2014 or 2013. | |||
FINANCIAL INSTRUMENTS | FINANCIAL INSTRUMENTS | ||
The estimated fair value for financial instruments was determined at discrete points in time based on relevant market information. These estimates involved uncertainties and could not be determined with exact precision. The fair value of the Company’s financial instruments, which include cash, prepaid expenses, accounts payable and the related party loan, each approximate their carrying value due either to their short length to maturity or interest rates that approximate prevailing market rates. | |||
INCOME TAXES | INCOME TAXES | ||
We account for income taxes under the liability method, 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 determined based on the difference 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. | |||
ADVERTISING AND PROMOTIONAL COSTS | ADVERTISING AND PROMOTIONAL COSTS | ||
Advertising and promotional costs are expensed as incurred. Advertising and promotional expenses totaled $138,004 were incurred during the year ended December 31, 2014. There were no advertising and promotional costs for the year ended December 31, 2013. | |||
COMPREHENSIVE INCOME (LOSS) | COMPREHENSIVE INCOME (LOSS) | ||
Comprehensive income is defined as all changes in stockholders’ equity (deficit), exclusive of transactions with owners, such as capital investments. Comprehensive income includes net income or loss, changes in certain assets and liabilities that are reported directly in equity such as translation adjustments on investments in foreign subsidiaries and unrealized gains (losses) on available-for-sale securities. From our inception, there have been no differences between our comprehensive loss and net loss. Our comprehensive loss was identical to our net loss for the years ended December 31, 2014 and 2013. | |||
INCOME (LOSS) PER SHARE | INCOME (LOSS) PER SHARE | ||
Income (loss) per share is presented in accordance with Accounting Standards Update (“ASU”), Earning per Share (Topic 260) which requires the presentation of both basic and diluted earnings per share (“EPS”) on the consolidated income statements. Basic EPS would exclude any dilutive effects of options, warrants and convertible securities but does include the restricted shares of common stock issued. Diluted EPS would reflect the potential dilution that would occur if securities of other contracts to issue common stock were exercised or converted to common stock. Basic EPS calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted EPS calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. Stock options outstanding at December 31, 2014 of 3,900,000 shares are excluded from the calculations of diluted net loss per share since their effect is antidilutive. | |||
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION | ||
We have adopted ASC Topic 718, Accounting for Stock-Based Compensation, which establishes a fair value method of accounting for stock-based compensation plans. In accordance with guidance now incorporated in ASC Topic 718, the cost of stock options and warrants issued to employees and non-employees is measured on the grant date based on the fair value. The fair value is determined using the Black-Scholes option pricing model. The resulting amount is charged to expense on the straight-line basis over the period in which we expect to receive the benefit, which is generally the vesting period. The fair value of stock warrants was determined at the date of grant using the Black-Scholes option pricing model. The Black-Scholes option model requires management to make various estimates and assumptions, including expected term, expected volatility, risk-free rate, and dividend yield. | |||
BUSINESS SEGMENTS | BUSINESS SEGMENTS | ||
Our activities during the years December 31, 2014 and 2013 comprised a single segment. | |||
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | ||
On June 10, 2014, the Financial Accounting Standards Board (“FASB”) issued update ASU 2014-10, Development Stage Entities (Topic 915). Amongst other things, the amendments in this update removed the definition of development stage entity from Topic 915, thereby removing the distinction between development stage entities and other reporting entities from U.S. GAAP. In addition, the amendments eliminate the requirements for development stage entities to (1) present inception-to-date information on the statements of income, cash flows and stockholders’ equity, (2) label the financial statements as those of a development stage entity; (3) disclose a description of the development stage activities in which the entity is engaged and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. The amendments are effective for annual reporting periods beginning after December 31, 2014 and interim reporting periods beginning after December 15, 2015. However, entities are permitted to early adopt for any annual or interim reporting period for which the financial statements have yet to be issued. The Company has elected to early adopt these amendments, and accordingly, has not labeled the financial statements as those of a development stage entity and has not presented inception-to-date information on the respective financial statements. | |||
We have reviewed all other recently issued, but not yet effective, accounting pronouncements and do not believe the future adoption of any such pronouncements may be expected to cause a material impact on our financial condition or the results of our operations. |
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||
Summary of Stock Options | |||||||||||||||||||||||||
December 31, 2014 | December 31, 2013 | ||||||||||||||||||||||||
Shares | Option | Weighted | Shares | Option | Weighted | ||||||||||||||||||||
Price | Average | Price | Average | ||||||||||||||||||||||
Price | Price | ||||||||||||||||||||||||
Outstanding Options at Beginning of Year | — | — | |||||||||||||||||||||||
Options Granted | 4,800,000 | $ | 3.78 | $ | 3.78 | — | $ | — | $ | — | |||||||||||||||
Options Forfeited | (1,200,000 | ) | $ | 3.78 | $ | 3.78 | — | $ | — | $ | — | ||||||||||||||
Options Outstanding at End of Year | 3,600,000 | $ | 3.78 | $ | 3.78 | — | $ | — | $ | — | |||||||||||||||
Options Exercisable at End of Year | — | — | |||||||||||||||||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Income Tax Disclosure [Abstract] | |||||||||
Summary of Deferred Tax Assets and Liabilities | The significant components of the Company’s deferred tax assets and liabilities at December 31, 2014 and 2013 are as follows: | ||||||||
2014 | 2013 | ||||||||
Federal net operating losses | $ | 596,000 | $ | 33,000 | |||||
State net operating losses | 91,000 | 5,000 | |||||||
Stock options | 231,000 | — | |||||||
Litigation settlement | 718,000 | — | |||||||
Total gross deferred tax assets | 1,636,000 | 38,000 | |||||||
Less valuation allowance | (1,636,000 | ) | (38,000 | ) | |||||
Net deferred tax assets | $ | — | $ | — | |||||
Schedule of Income Tax Rate Reconciliation | The income tax benefit for the years ended December 31, 2014 and 2013 differed from the amounts computed by applying the U.S. federal income tax rate of 34% as follows: | ||||||||
2014 | 2013 | ||||||||
Federal statutory rate | 34 | % | 34 | % | |||||
Permanent differences | (0.42 | )% | — | % | |||||
State taxes | 5.78 | % | 5 | % | |||||
Valuation allowance | (41.12 | )% | (39.00 | )% | |||||
Other - deferred only | 1.77 | % | — | % | |||||
Effective tax rate | — | % | — | % | |||||
Nature_of_Operations_and_Signi2
Nature of Operations and Significant Accounting Policies - Additional Information (Detail) (USD $) | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | 9-May-14 | |
Private_placement | ||||
Nature Of Operations [Line Items] | ||||
Property and equipment acquired | $100,721 | |||
Website development for cannabinoid medicines | 50,000 | |||
Payments to acquire office and computer equipment | 50,721 | |||
Accumulated depreciation | 3,020 | |||
Depreciation expense recorded against capitalized cost | 0 | |||
Deferred cost and other offering costs | 0 | 0 | 0 | |
Number of private placements | 2 | |||
Advertising and promotional expenses | $138,004 | $0 | ||
Stock options excluded from calculation of diluted net income per share due to anti-dilutive effect (in shares) | 3,900,000 | |||
Minimum [Member] | ||||
Nature Of Operations [Line Items] | ||||
Estimated useful lives of assets | 3 years | |||
Maximum [Member] | ||||
Nature Of Operations [Line Items] | ||||
Estimated useful lives of assets | 7 years | |||
Share Purchase Agreement [Member] | ||||
Nature Of Operations [Line Items] | ||||
Number of shares repurchased | 1,421,120 | |||
Number additional shares repurchased | 9,000,000 |
Going_Concern_and_Liquidity_Ad
Going Concern and Liquidity - Additional Information (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Going Concern And Liquidity [Abstract] | |||
Cash | $1,605,239 | $25 | |
Liabilities | 2,085,272 | 292,034 | |
Legal settlement payable in stock - current liabilities | 1,597,500 | ||
Stockholders' equity (deficit) | -288,230 | -292,034 | -197,628 |
Working capital (deficit) | ($290,931) |
Assets_Additional_Information_
Assets - Additional Information (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Assets [Abstract] | ||
Current assets | $1,649,341 | $0 |
Furniture and fixtures, net of accumulated depreciation | 97,701 | 0 |
Deposit on specialty pharmacy acquisition | $50,000 | $0 |
Accounts_Payable_and_Accrued_E1
Accounts Payable and Accrued Expenses - Additional Information (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Payables and Accruals [Abstract] | ||
Accounts payable and accrued expenses | $137,772 | $0 |
Related_Party_Loan_and_Accrued1
Related Party Loan and Accrued Interest Payable - Additional Information (Detail) (USD $) | 12 Months Ended | 0 Months Ended |
Dec. 31, 2014 | 9-May-14 | |
Related Party Transaction [Line Items] | ||
CPHX acquisition | $296,000 | |
Common Stock [Member] | CannaPharmaRX [Member] | ||
Related Party Transaction [Line Items] | ||
CPHX acquisition, shares | 9,000,000 | |
CPHX acquisition | $296,000 |
Commitments_Additional_Informa
Commitments - Additional Information (Detail) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Commitments and Contingencies | $36,970 | |
Non-cancellable operating lease expiration date | 31-Oct-15 | |
Capital leases | 0 | 0 |
Operating leases | $0 | $0 |
Litigation_and_Accrued_Settlem1
Litigation and Accrued Settlement Liabilities - Additional Information (Detail) (USD $) | 0 Months Ended | |
Mar. 25, 2015 | Dec. 31, 2014 | |
Litigation And Other Contingencies [Line Items] | ||
Legal settlement payable in cash - current liabilities | $205,000 | |
Legal settlement payable in stock - current liabilities | 1,597,500 | |
Gary M. Cohen [Member] | Subsequent Event [Member] | ||
Litigation And Other Contingencies [Line Items] | ||
Settlement agreement, description | On March 25, 2015, the Company and Mr. Cohen agreed in principle to the terms of a settlement agreement that would resolve the aforementioned lawsuits and on March 30, 2015, the parties entered into a settlement and release of claims agreement. As part of that agreement, the Company agreed to purchase all of Mr. Cohenbs 2,250,000 shares of CannaRx for a purchase price of $350,000, with $85,000 payable up front and the remainder payable in equal installments of $15,000 per month over the next 17 months, and a payment of $10,000 in the eighteenth month. The amount of cash payable in the next year of $205,000 is included in current liabilities on the balance sheet. In addition, the Company would grant 600,000 unregistered restricted shares of its common stock to Mr. Cohen as part of the settlement. | |
Settlement agreement, share purchased | 2,250,000 | |
Settlement agreement, share purchase price | 350,000 | |
Settlement agreement, up front payment | 85,000 | |
Settlement amount payable in Equal Monthly installment up to seventeen month | 15,000 | |
Settlement amount final payment on eighteenth month | 10,000 | |
Unregistered restricted shares of common stock granted | 600,000 | |
Legal settlement payable in cash - current liabilities | 205,000 | |
Legal settlement payable in stock - current liabilities | $1,597,500 |
Related_Party_Transactions_Add
Related Party Transactions - Additional Information (Detail) (USD $) | 12 Months Ended | 0 Months Ended |
Dec. 31, 2014 | 9-May-14 | |
Related Party Transaction [Line Items] | ||
CPHX acquisition | $296,000 | |
Common Stock [Member] | CannaPharmaRX [Member] | ||
Related Party Transaction [Line Items] | ||
CPHX acquisition, shares | 9,000,000 | |
CPHX acquisition | $296,000 |
Stockholders_Equity_Additional
Stockholders' Equity - Additional Information (Detail) (USD $) | 0 Months Ended | 12 Months Ended | 0 Months Ended | |
Nov. 01, 2014 | Dec. 31, 2014 | 9-May-14 | Dec. 31, 2013 | |
Class of Stock [Line Items] | ||||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | ||
Preferred stock, par value per share | $0.00 | $0.00 | ||
Preferred stock, shares issued | 0 | 0 | ||
Preferred stock, shares outstanding | 0 | 0 | ||
Common stock, shares authorized | 100,000,000 | 100,000,000 | ||
Common stock, par value per share | $0.00 | $0.00 | ||
Reverse stock split ratio | 3 | |||
CPHX acquisition | $296,000 | |||
Common stock subscribed and paid, shares | 5,990,000 | |||
Common stock subscribed and paid | 2,995,000 | |||
Warrants, issued and outstanding | 0 | 0 | ||
Options, issued and outstanding | 3,600,000 | 0 | ||
Options issued to purchase shares | 4,800,000 | 4,800,000 | ||
Options exercise price per share | $3.78 | $3.78 | ||
Stock options, vesting period | 3 years | |||
Stock-based compensation charge | 579,565 | |||
Unamortized Stock based compensation charges | 9,852,599 | |||
Unamortized Stock based compensation charges, end date of amortization period based on vesting period | 2018-10 | |||
Research and Development Employees [Member] | ||||
Class of Stock [Line Items] | ||||
Stock-based compensation charge | 265,634 | |||
General and Administrative Employees [Member] | ||||
Class of Stock [Line Items] | ||||
Stock-based compensation charge | 313,931 | |||
Share-based Compensation Award, Tranche One [Member] | ||||
Class of Stock [Line Items] | ||||
Options vesting, percentage on each anniversary date | 33.33% | |||
Common Stock [Member] | CannaPharmaRX [Member] | ||||
Class of Stock [Line Items] | ||||
CPHX acquisition, shares | 9,000,000 | |||
CPHX acquisition | $296,000 | |||
Maximum [Member] | ||||
Class of Stock [Line Items] | ||||
Preferred stock, shares authorized | 10,000,000 |
Stockholders_Equity_Summary_of
Stockholders' Equity - Summary of Stock Options (Detail) (USD $) | 0 Months Ended | 12 Months Ended | |
Nov. 01, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Outstanding Options at Beginning of Year, Shares | 0 | ||
Options Granted, Shares | 4,800,000 | 4,800,000 | |
Options Forfeited, Shares | -1,200,000 | ||
Options Outstanding at End of Year, Shares | 3,600,000 | ||
Options Exercisable at End of Year, Shares | 0 | 0 | |
Options Granted, Option Price | $3.78 | $3.78 | |
Options Forfeited, Option Price | $3.78 | ||
Options Outstanding at End of Year, Option Price | $3.78 | ||
Options Granted, Weighted Average Price | $3.78 | ||
Options Forfeited, Weighted Average Price | $3.78 | ||
Options Outstanding at End of Year, Weighted Average Price | $3.78 |
Income_Taxes_Summary_of_Deferr
Income Taxes - Summary of Deferred Tax Assets and Liabilities (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Income Tax Disclosure [Abstract] | ||
Federal net operating losses | $596,000 | $33,000 |
State net operating losses | 91,000 | 5,000 |
Stock options | 231,000 | |
Litigation settlement | 718,000 | |
Total gross deferred tax assets | 1,636,000 | 38,000 |
Less valuation allowance | -1,636,000 | -38,000 |
Net deferred tax assets | $0 | $0 |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Operating Loss Carryforwards [Line Items] | ||
Valuation allowance | $1,636,000 | $38,000 |
Change in valuation allowance | 1,598,000 | |
Federal [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards | 1,754,000 | |
Net operating loss carryforward expiration date | 31-Dec-30 | |
State [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards | $1,547,000 | |
Net operating loss carryforward expiration date | 31-Dec-34 |
Income_Taxes_Schedule_of_Incom
Income Taxes - Schedule of Income Tax Rate Reconciliation (Detail) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | ||
Federal statutory rate | 34.00% | 34.00% |
Permanent differences | -0.42% | |
State taxes | 5.78% | 5.00% |
Valuation allowance | -41.12% | -39.00% |
Other - deferred only | 1.77% | |
Effective tax rate | 0.00% | 0.00% |