Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | May 22, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | OncBioMune Pharmaceuticals, Inc | |
Entity Central Index Key | 1,362,703 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 60,207,846 | |
Trading Symbol | OBMP | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,017 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
CURRENT ASSETS: | ||
Cash | $ 142,547 | |
Accounts receivable | 170,024 | |
Inventories | 52,603 | |
Subscription receivable | 25,237 | 11,190 |
Prepaid expenses and other current assets | 69,679 | 30,119 |
Total Current Assets | 460,090 | 41,309 |
OTHER ASSETS: | ||
Property and equipment, net | 8,899 | 9,604 |
Intangible assets | 4,695,596 | |
Security deposit | 6,400 | 6,400 |
Total Assets | 5,170,985 | 57,313 |
CURRENT LIABILITIES: | ||
Convertible debt, net | 185,937 | 54,688 |
Line of credit | 99,208 | 99,741 |
Bank overdraft | 812 | |
Accounts payable | 649,633 | 213,616 |
Accounts payable - related parties | 8,748 | |
Accrued liabilities | 128,925 | 108,034 |
Derivative liabilities | 2,216,288 | 402,055 |
Due to related parties | 6,444 | 5,000 |
Total Current Liabilities | 3,295,183 | 883,946 |
Commitments and contingencies (Note 8) | ||
STOCKHOLDERS’ EQUITY (DEFICIT): | ||
Preferred stock, value | 100 | |
Common stock: $.0001 par value, 500,000,000 shares authorized; 131,135,661 and 60,807,846 issued and outstanding at March 31, 2017 and December 31, 2016, respectively | 13,114 | 6,081 |
Additional paid-in capital | 7,791,170 | 2,310,037 |
Accumulated deficit | (5,925,499) | (3,142,851) |
Accumulated other comprehensive loss | (3,872) | |
Total Stockholders’ Equity (Deficit) | 1,875,802 | (826,633) |
Total Liabilities and Stockholders’ Equity (Deficit) | 5,170,985 | 57,313 |
Series A Preferred Stock [Member] | ||
STOCKHOLDERS’ EQUITY (DEFICIT): | ||
Preferred stock, value | 100 | 100 |
Series B Preferred Stock [Member] | ||
STOCKHOLDERS’ EQUITY (DEFICIT): | ||
Preferred stock, value | $ 789 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2017 | Dec. 31, 2016 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 131,135,661 | 60,807,846 |
Common stock, shares outstanding | 131,135,661 | 60,807,846 |
Series A Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 1,000,000 | 1,000,000 |
Preferred stock, shares outstanding | 1,000,000 | 1,000,000 |
Series B Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 7,892,000 | 0 |
Preferred stock, shares issued | 7,892,000 | 0 |
Preferred stock, shares outstanding | 7,892,000 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Income Statement [Abstract] | ||
REVENUES | $ 14,391 | |
COST OF REVENUES | 10,588 | |
GROSS PROFIT | 3,803 | |
OPERATING EXPENSES: | ||
Professional fees | 414,389 | 127,003 |
Compensation expense | 269,521 | 213,287 |
Consulting fees - related party | 20,975 | |
Research and development expense | 31,914 | 30,086 |
General and administrative expenses - related party | 7,842 | |
General and administrative expenses | 81,903 | 73,625 |
Total Operating Expenses | 826,544 | 444,001 |
LOSS FROM OPERATIONS | (822,741) | (444,001) |
OTHER INCOME (EXPENSE): | ||
Interest expense | (139,880) | (339) |
Derivative expense | (1,814,233) | |
Loss on foreign currency transactions | (5,794) | |
Total Other Income (Expense) | (1,959,907) | (339) |
NET LOSS | (2,782,648) | (444,340) |
COMPREHENSIVE LOSS: | ||
Net loss | (2,782,648) | (444,340) |
Other comprehensive loss: | ||
Unrealized foreign currency translation loss | (3,872) | |
Comprehensive loss | $ (2,786,520) | $ (444,340) |
NET LOSS PER COMMON SHARE - Basic and Diluted: | $ (0.03) | $ (0.01) |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||
Basic and diluted | 79,639,827 | 57,182,112 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (2,782,648) | $ (444,340) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 1,923 | 275 |
Stock-based compensation | 115,522 | 18,000 |
Amortization of debt discount | 131,249 | |
Derivative expense | 1,814,233 | |
Change in operating assets and liabilities: | ||
Accounts receivable | 16,224 | |
Inventories | 4,654 | |
Due from related parties | 10,750 | |
Prepaid expenses and other current assets | 15,292 | (20,525) |
Accounts payable | (420) | |
Accounts payable - related party | (1,708) | |
Accrued liabilities | 14,838 | 78,183 |
NET CASH USED IN OPERATING ACTIVITIES | (670,842) | (357,657) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Acquisition of property and equipment | (715) | |
Cash received in acquisition | 39,144 | |
NET CASH USED IN INVESTING ACTIVITIES | 38,429 | |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from related party advances | 965 | |
Decrease in bank overdraft | (812) | |
Proceeds from line of credit | 5,294 | |
Payments to line of credit | (533) | (664) |
Proceeds from sale of common stock, net of subscription receivable | 772,035 | 46,801 |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 771,655 | 51,431 |
NET INCREASE (DECREASE) IN CASH | 139,242 | (306,226) |
Effect of exchange rate changes on cash | 3,305 | |
CASH, beginning of period | 672,769 | |
CASH, end of period | 142,547 | 366,543 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Interest | 339 | |
Income taxes | ||
Non-cash investing and financing activities: | ||
Sale of common stock for subscription receivable | 25,237 | |
Liabilities assumed in acquisition | 433,947 | |
Less: assets acquired in acquisition | 325,702 | |
Net liabilities assumed | 108,245 | |
Fair value of shares for acquisition | 4,587,351 | |
Increase in intangible assets | $ 4,695,596 |
Organization and Nature of Oper
Organization and Nature of Operations | 3 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Nature of Operations | NOTE 1 - ORGANIZATION AND NATURE OF OPERATIONS OncBioMune Pharmaceuticals, Inc. (the “Company,” “we,” “us” or “our”) is a biotechnology company specializing in innovative cancer treatment therapies. The Company has proprietary rights to a breast and prostate patent vaccine, as well as a process for the growth of cancer tumors. The Company’s mission is to improve the overall patient condition through innovative bio immunotherapy with proven treatment protocols, to lower deaths associated with cancer and reduce the cost of cancer treatment. The Company’s technology is safe, and utilizes clinically proven research methods of treatment to provide optimal success of patient recovery. We are also developing and commercializing specialty drugs in Mexico and other Latin American countries following our March 10, 2017 acquisition of Vitel Laboratorios, S.A. de C.V. On March 10, 2017 (the “Closing Date”), the Company completed the acquisition of 100% of the issued and outstanding capital stock of Vitel Laboratorios, S.A. de C.V., a Mexican variable stock corporation (“Vitel”) from its shareholders Manuel Cosme Odabachian and Carlos Fernando Alaman Volnie (collectively, the “Vitel Stockholders”) pursuant to the terms and conditions of a Contribution Agreement to the Property of Trust F/2868 entered into among the Company and the Vitel Stockholders on the Closing Date (the “Contribution Agreement”). Vitel is a revenue-stage Mexico-based pharmaceutical company that develops and commercializes specialty drugs in MALA. The Company acquired Vitel for the purpose of commercializing the Company’s PROSCAVAX vaccine technology and cancer technologies in MALA and to utilize Vitel’s distribution network and customer and industry relationships. (See Note 3) |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation and principles of consolidation The Company’s consolidated financial statements include the financial statements of OncBioMune Pharmaceuticals, Inc. and its wholly-owned subsidiaries, OncBioMune, Inc., Vitel and Oncbiomune México, S.A. De C.V.. All significant intercompany accounts and transactions have been eliminated in consolidation Management acknowledges its responsibility for the preparation of the accompanying unaudited condensed consolidated financial statements which reflect all adjustments, consisting of normal recurring adjustments, considered necessary in its opinion for a fair statement of its financial position and the results of its operations for the periods presented. The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (the “U.S. GAAP”) for interim financial information and with the instructions Article 8-03 of Regulation S-X. Operating results for interim periods are not necessarily indicative of results that may be expected for the fiscal year as a whole. Certain information and note disclosure normally included in financial statements prepared in accordance with U.S. GAAP has been condensed or omitted from these statements pursuant to such accounting principles and, accordingly, they do not include all the information and notes necessary for comprehensive financial statements These unaudited condensed consolidated financial statements should be read in conjunction with the summary of significant accounting policies and notes to the consolidated financial statements for the years ended December 31, 2016 and 2015 of the Company which were included in the Company’s annual report on Form 10-K as filed with the Securities and Exchange Commission on April 17, 2017. Going concern These consolidated financial statements 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. As reflected in our accompanying consolidated financial statements, the Company had a net loss of $2,782,648 and $444,340 for the three months ended March 31, 2017 and 2016, respectively. The net cash used in operations were $670,842 and $357,657 for the three months ended March 31, 2017 and 2016, respectively. Additionally, the Company had an accumulated deficit of $5,925,499 and $3,142,851 at March 31, 2017 and at December 31, 2016, respectively, had a working capital deficit of $2,835,093 at March 31, 2017, and had minimal revenues since inception. Management believes that these matters raise substantial doubt about the Company’s ability to continue as a going concern for twelve months from the issuance date of this report. On March 10, 2017, the Company completed the acquisition of 100% of the issued and outstanding capital stock of Vitel. Management cannot provide assurance that we will ultimately achieve profitable operations or become cash flow positive, or raise additional debt and/or equity capital. Management believes that our capital resources are not currently adequate to continue operating and maintaining its business strategy for the fiscal year ending December 31, 2017. The Company will seek to raise capital through additional debt and/or equity financings to fund our operations in the future. Although the Company has historically raised capital from sales of equity and from the issuance of promissory notes, there is no assurance that it will be able to continue to do so. If the Company is unable to raise additional capital or secure additional lending in the near future, management expects that the Company will need to curtail or cease operations. These consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Use of estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Significant estimates during the three months ended March 31, 2017 and 2016 include the valuation of accounts receivable, valuation of inventories, useful life of property and equipment, assumptions used in assessing impairment of long-term assets, estimates of current and deferred income taxes and deferred tax valuation allowances, the fair value of non-cash equity transactions, the valuation of derivative liabilities, and the fair value of assets acquired and liabilities assumed in the business acquisition. Concentrations Generally, the Company relies on one vendor as a single source of raw materials to produce certain components of its cancer treatment products. The Company believe that other vendors are available to supply these materials if the Company cannot obtain these materials from its single source vendor. Fair value of financial instruments and fair value measurements FASB ASC 820 — Fair Value Measurements and Disclosures, The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are as follows: The carrying amounts reported in the consolidated balance sheets for cash, due from and to related parties, prepaid expenses, line of credit payable, accounts payable and accrued liabilities, approximate their fair market value based on the short-term maturity of these instruments. The Company accounts for certain instruments at fair value using level 3 valuation. At March 31, 2017 At December 31, 2016 Description Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Derivative liabilities — — $ 2,216,288 — — 402,055 A roll forward of the level 3 valuation financial instruments is as follows: Derivative Liabilities Balance at December 31, 2016 $ 402,055 Change in fair value included in derivative expense 1,814,233 Balance at March 31, 2017 $ 2,216,288 ASC 825-10 “ Financial Instruments , Cash and cash equivalent For purposes of the consolidated statements of cash flows, the Company considers all highly liquid instruments with a maturity of three months or less at the purchase date and money market accounts to be cash equivalents. At March 31, 2017 and December 31, 2016, the Company did not have any cash equivalents. The Company maintains its cash in bank and financial institution deposits that at times may exceed federally insured limits. There were no balances in excess of FDIC insured levels as of March 31, 2017 and December 31, 2016. The Company has not experienced any losses in such accounts through March 31, 2017. Additionally, the Company maintains cash at financial institutions in Mexico. At March 31, 2017 and December 31, 2016, cash balances held in Mexico banks of $63,335 and $0, respectively, are uninsured. Accounts receivable Accounts receivable are presented net of an allowance for doubtful accounts. The Company maintains allowances for doubtful accounts for estimated losses. The Company reviews the accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including the age of the balance, a customer’s historical payment history, its current credit-worthiness and current economic trends. Accounts are written off after exhaustive efforts at collection. At March 31, 2017, based on a review of its outstanding balances, the Company has not established an allowance for doubtful accounts. Inventories Inventories, consisting of finished goods related to the Company’s products are stated at the lower of cost and net realizable value utilizing the first-in first-out (FIFO) method. A reserve is established when management determines that certain inventories may not be saleable. If inventory costs exceed expected net realizable value due to obsolescence or quantities in excess of expected demand, the Company will record reserves for the difference between the cost and the net realizable value. These reserves are recorded based on estimates. Property and equipment Property are stated at cost and are depreciated using the straight-line method over their estimated useful lives, which range from three to five years. Leasehold improvements are depreciated over the shorter of the useful life or lease term including scheduled renewal terms. Maintenance and repairs are charged to expense as incurred. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. The Company examines the possibility of decreases in the value of these assets when events or changes in circumstances reflect the fact that their recorded value may not be recoverable. Impairment of long-lived assets In accordance with ASC Topic 360, the Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable, or at least annually. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. Derivative liabilities The Company has certain financial instruments that are embedded derivatives associated with capital raises. The Company evaluates all its financial instruments to determine if those contracts or any potential embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with ASC 810-10-05-4 and 815-40. This accounting treatment requires that the carrying amount of any embedded derivatives be recorded at fair value at issuance and marked-to-market at each balance sheet date. In the event that the fair value is recorded as a liability, as is the case with the Company, the change in the fair value during the period is recorded as either income or expense. Upon conversion, exercise or repayment, the respective derivative liability is marked to fair value at the conversion, repayment or exercise date and then the related fair value amount is reclassified to income or expense as part of gain or loss on extinguishment. Revenue recognition The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the purchase price is fixed or determinable and collectability is reasonably assured. Stock-based compensation Stock-based compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718 which requires recognition in the financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. Pursuant to ASC 505-50 – “Equity-Based Payments to Non-Employees” Basic and diluted earnings per share Pursuant to ASC 260-10-45, basic loss per common share is computed by dividing net loss by the weighted average number of shares of common stock outstanding for the periods presented. Diluted loss per share is computed by dividing net loss by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period. Potentially dilutive common shares consist of common stock issuable for stock warrants (using the treasury stock method). These common stock equivalents may be dilutive in the future. All potentially dilutive common shares were excluded from the computation of diluted shares outstanding as they would have an anti-dilutive impact on the Company’s net losses and consisted of the following: March 31, 2017 March 31, 2016 Stock warrants 10,475,895 2,694 Convertible debt 4,666,667 - Stock options 4,000,000 - Income taxes The Company accounts for income tax using the liability method prescribed by ASC 740, “Income Taxes”. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the year in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred tax assets if based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized as income or loss in the period that includes the enactment date. The Company follows the accounting guidance for uncertainty in income taxes using the provisions of ASC 740 “Income Taxes Research and development Research and development costs incurred in the development of the Company’s products are expensed as incurred. Foreign currency translation The reporting currency of the Company is the U.S. dollar. The functional currency of the parent company and its U.S. subsidiary is the U.S. dollar and the functional currency of the Company’s subsidiaries located in Mexico is the Mexican Peso (“Peso”). For the subsidiaries whose functional currencies are the Peso, results of operations and cash flows are translated at average exchange rates during the period, assets and liabilities are translated at the spot exchange rate at the end of the period, and equity is translated at historical exchange rates. As a result, amounts relating to assets and liabilities reported on the statements of cash flows may not necessarily agree with the changes in the corresponding balances on the balance sheets. Translation adjustments resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining comprehensive loss. Assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the balance sheet date with any transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency included in the results of operations as incurred. Additionally, transactions denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing on the transaction dates. All of the Company’s revenue transactions are transacted in the functional currency of the operating subsidiaries. The Company did not enter into any material transactions in foreign currencies. Transaction gains or losses have not had, and are not expected to have, a material effect on the results of operations of the Company. Asset and liability accounts at March 31, 2017 were translated at 18.7547 Pesos to $1.00, which was the exchange rates on the balance sheet date. Equity accounts were stated at their historical rate. The average translation rates applied to the statements of operations for the three months ended March 31, 2017 was 20.2618 Pesos to $1.00. Cash flows from the Company’s operations are calculated based upon the local currencies using the average translation rate. Related parties Parties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. Recent accounting pronouncements In August 2015, FASB issued ASU 2015-14, Deferral of the Effective Date Revenue from Contracts with Customers. Revenue from Contracts with Customers On February 25, 2016, the FASB issued ASU No. 2016-02 (“ASU 2016-02”) to amend the accounting guidance for leases. The accounting applied by a lessor is largely unchanged under ASU 2016-02. However, the standard requires lessees to recognize lease assets and lease liabilities for leases classified as operating leases on the balance sheet. Lessees will recognize in the statement of financial position a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it will recognize lease expense for such leases generally on a straight-line basis over the lease term. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 and early adoption is permitted. The Company is currently assessing the impact of the guidance on its consolidated financial statements and notes to its consolidated financial statements. On March 30, 2016, the FASB issued ASU No. 2016-09 (“ASU 2016-09”) to amend the accounting guidance for share-based payment accounting. The areas for simplification in ASU 2016-09 involve several aspects of the accounting for share-based payment transactions, including the income tax consequences, forfeitures, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for annual periods beginning after December 15, 2016 and early adoption is permitted. The adoption of ASU 2016-09 did not have any effect of the Company’s consolidated financial statements. Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements. |
Acquisition of Vitel Laboratori
Acquisition of Vitel Laboratorios, S.a. De C.v. | 3 Months Ended |
Mar. 31, 2017 | |
Business Combinations [Abstract] | |
Acquisition of Vitel Laboratorios, S.a. De C.v. | NOTE 3 – ACQUISITION OF VITEL LABORATORIOS, S.A. de C.V. ON March 10, 2017 (the “Closing Date”), the Company completed the acquisition of 100% of the issued and outstanding capital stock of Vitel Laboratorios, S.A. de C.V., a Mexican variable stock corporation (“Vitel”) from its shareholders Manuel Cosme Odabachian and Carlos Fernando Alaman Volnie (collectively, the “Vitel Stockholders”) pursuant to the terms and conditions of a Contribution Agreement to the Property of Trust F/2868 entered into among the Company and the Vitel Stockholders on the Closing Date (the “Contribution Agreement”). Vitel is a revenue-stage Mexico-based pharmaceutical company that develops and commercializes specialty drugs in MALA. The Company acquired Vitel for the purpose of commercializing the Company’s PROSCAVAX vaccine technology and cancer technologies in MALA and to utilize Vitel’s distribution network and customer and industry relationships. Pursuant to the terms of the Contribution Agreement, the Company issued 61,158,013 shares of its common stock and 5,000,000 shares of Series B preferred stock to Banco Actinver, S.A., in its capacity as Trustee (“Banco Actinver”) of the Irrevocable Management Trust Agreement Trust No. 2868 (the “Trust Agreement”) for the benefit of the Vitel Stockholders in exchange for 100% of the issued and outstanding capital stock of Vitel (the “Vitel Shares”). The Common Stock and Series B Preferred will be held by Trustee for the benefit of the Vitel Stockholders as provided for in the Trust Agreement and 98% of the Vitel Shares are held by Banco Actinver for the benefit of the Company as provided for in the Trust Agreement and 2% of the Vitel Shares were transferred to the Company. Vitel became a wholly owned subsidiary of the Company as of the Closing Date as the Company has full control of the Vitel Shares through the Trust. In addition, the Company issued 2,892,000 shares of Series B Preferred to Jonathan F. Head, Ph. D, the Company’s Chief Executive Officer and a member of the Board of Directors of the Company (the “Board of Directors”) as provided for in the Contribution Agreement. The Series B preferred stock issued to Dr. Head and were determined to have nominal value of $289 or $.0001 per shares and was recorded as compensation expense. To induce the Vitel Stockholders to enter into the Contribution Agreement and as a condition to close the transactions set forth in that agreement, the Company, the Vitel Stockholders, Dr. Head and Andrew A. Kucharchuk, the Company’s President, Chief Financial Officer and a Director also entered into the following agreements as of the Closing Date or perform the following actions (i) a Stockholder’s Agreement among the Company, Dr. Head, Mr. Kucharchuk, Mr. Cosme and Mr. Alaman dated as of the Closing Date (the “Stockholders’ Agreement”); (ii) the Trust Agreement; (iii) the Company, Vitel and the Vitel Stockholders entered into employment agreements with Messrs. Cosme and Alaman; (iv) the Company and Dr. Head and Mr. Kucharchuk entered into amendments to the employment agreements with, and stock option awards to, Dr. Head and Mr. Kucharchuk; (v) the Company, Dr. Head, Mr. Kucharchuk and the Vitel Stockholders agreed to consent to an amendment to the Company’s Articles of Incorporation and bylaws; (vi) and to elect Mr. Cosme, Mr. Alaman, Dr. Head and Mr. Kucharchuk as directors of Vitel and such directors to elect Mr. Cosme, Mr. Alaman, Dr. Head and Mr. Kucharchuk as officers of Vitel. The Stockholders Agreement The following is a summary of Stockholders Agreement. The Vitel Stockholders and the Company established a trust pursuant to the Trust Agreement described below. Mr. Cosme and Mr. Alaman each contributed, assigned and transferred to the Company ownership of, and title over, one share of the capital stock of Vitel (the “Vitel Shares”) and Mr. Cosme and Mr. Alaman contributed, assigned and transferred to Banco Actinver (as defined in the Trust Agreement”) ownership of, and title over, the remaining 98 Vitel Shares for the benefit of the Company pursuant to the terms and conditions of the Trust Agreement. The Company contributed, assigned and transferred to Banco Actinver ownership of, and title over, 61,158,013 newly-issued shares of Common Stock and 5,000,000 newly-issued shares of Series B Preferred Stock with 100 votes per share (collectively, the “OBM Shares”), for the benefit of Mr. Cosme and Mr. Alaman pursuant to the terms and conditions of the Trust Agreement. The OBM Shares held by the Trust have not been and will not be registered under the Securities Act of 1933, as amended, (“Securities Act”) and are restricted securities under the Securities Act and the rules and regulations promulgated thereunder and are subject to the restrictions on transfer contained in Article 4 of the Shareholders’ Agreement. Corporate Rights. The corporate rights resulting from the Vitel Shares contributed to the Trust will be exercised by Banco Actinver pursuant to the written instructions it receives from the Company. For such purposes, and pursuant to the bylaws of Vitel, the Company shall have the authority to instruct Banco Actinver regarding exercising any corporate rights it may be entitled to in its capacity as the majority Vitel shareholder. Composition of the Board of Directors. Board of Directors Resolutions. Restrictions on Transfer. Permitted Transferees Permitted Transfer Right of First Refusal Right of Co-Sale (Tag Along) Drag Along Termination Effective as of March 10, 2017, Mr. Cosme, Mr. Alaman and the Company entered into the Irrevocable Management Trust Agreement Number F/2868 between Mr. Cosme, Mr. Alaman, the Company and Banco Actinver (the “Trust Agreement”) for the purpose of establishing a trust to hold the OBM Shares and 98 shares of Vitel’s capital stock which were transferred to Trustee pursuant to the Trust Agreement, in addition to other property the beneficiaries may elect to contribute to the trust. The trust structure of this acquisition transaction was established in order to provide certain income tax benefits to the seller pursuant to Mexican tax law. In connection with the acquisition, the Company issued 61,158,013 unregistered shares of its common stock valued at $4,586,851, based on the acquisition-date fair value of our common stock of $.075 per share based on recent sales of the Company’s common stock pursuant to unit subscription agreements and 5,000,000 shares of Series B preferred stock which primarily gives the holder voting rights and were determined to have nominal value of $500. The fair value of the assets acquired and liabilities assumed were based on management estimates of the fair values on March 10, 2017. Based upon the purchase price allocation, the following table summarizes the estimated fair value of the assets acquired and liabilities assumed at the date of acquisition: Cash $ 39,144 Accounts receivable 178,835 Inventories 54,952 Recoverable taxes 50,792 Other current assets 1,499 Property and equipment 480 Goodwill and other intangible assets 4,695,596 Total assets acquired at fair value 5,021,298 Accounts payable and accrued expenses 427,723 Payroll taxes 6,224 Total liabilities assumed 433,947 Total purchase consideration $ 4,587,351 The assets acquired and liabilities assumed are recorded at their estimated fair value on the acquisition date with subsequent changes recognized in earnings or loss. These estimates are inherently uncertain and are subject to refinement. Management develops estimates based on assumptions as a part of the purchase price allocation process to value the assets acquired and liabilities assumed as of the business combination date. As a result, during the purchase price measurement period, which may be up to one year from the business acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. After the purchase price measurement period, the Company will record adjustments to assets acquired or liabilities assumed in operating expenses in the period in which the adjustments were determined. The purchase price exceeded the fair value of the net assets acquired by approximately $4,695,596, which shall be recorded as goodwill or other intangible assets pending the Company analysis of the fair values. The fair value of intangible assets may be based upon the discounted cash flow method that involves inputs that are not observable in the market (Level 3). Goodwill assigned represents the amount of consideration transferred in excess of the fair value assigned to identifiable assets acquired and liabilities assumed. Any goodwill recorded is not expected to be deductible for U.S. income tax purposes. The Company shall record acquisition and transaction related expenses in the period in which they are incurred. During the three months ended March 31, 2017, acquisition and transaction related expenses primarily consisted of legal fees of approximately $104,000. |
Line of Credit
Line of Credit | 3 Months Ended |
Mar. 31, 2017 | |
Line of Credit Facility [Abstract] | |
Line of Credit | NOTE 4 – LINE OF CREDIT In October 2014, the Company entered into a $100,000 revolving promissory note (the “Revolving Note”) with Regions Bank (the “Lender”). The unpaid principal balance of the Revolving Note is payable on demand and any unpaid principal and interest is payable due not later than October 27, 2017, is secured by deposits located at the Lender, and bears interest computed at a variable rate of interest which is equal to the Lender’s prime rate plus 1.7% (5.7% and 5.45% at March 31, 2017 and December 31, 2016, respectively). The Company will pay to Lender a late charge of 5.0% of any monthly payment not received by Lender within 10 calendar days after its due date. The Company may, at any time or from time to time, prepay the Revolving Note in whole or in part without penalty. At March 31, 2017 and December 31, 2016, the Company had $99,208 and $99,741, respectively, in borrowings outstanding under the Revolving Note with $792 and $259, respectively, available for borrowing under such note. The weighted average interest rate during the three months ended March 31, 2017 was approximately 5.57%. |
Convertible Debt
Convertible Debt | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Convertible Debt | NOTE 5 – CONVERTIBLE DEBT On November 23, 2016 (the “Original Issue Date”), the Company entered into and closed on the transaction set forth in an Amended and Restated Securities Purchase Agreement (the “Securities Purchase Agreement”) it entered into with three institutional investors (the “Purchasers”) for the sale of the Company’s convertible notes and warrants. Pursuant to the terms provided for in the Securities Purchase Agreement, the Company issued upon closing to the Purchasers for an aggregate subscription amount of $350,000: (i) 14.29% Original Issue Discount 10% Senior Secured Convertible Notes (the “Notes”); and (ii) warrants (the “Warrants”) to purchase 2,333,334 shares of the Company’s common stock at an exercise price of $0.175 (subject to adjustments under certain conditions as defined in the Warrants) (see below for reduction of warrant exercise price) which are exercisable for a period of five years from the Original Issue Date. The aggregate principal amount of the Notes is $350,000 and the Company received $300,000 after giving effect to the original issue discount of $50,000. The Notes bear interest at a rate equal to 10% per annum (which interest rate is increased to 24% per annum upon the occurrence of an Event of Default (as defined in the Notes)), have a maturity date of July 23, 2017 and are convertible (principal, and interest) at any time after the issuance date of the Notes into shares of the Company’s Common Stock at a conversion price equal to $0.15 per share (subject to adjustment as provided in the Note) (see below for reduction for reduction of conversion price), provided, however, that if an event of default has occurred, regardless of whether such Event of Default has been cured or remains ongoing, the Note shall be convertible at 60% of the lowest closing price during the prior twenty trading days of the Common Stock as reported on the OTCQB or other principal trading market (the “Default Conversion Price”). The Notes provide for two amortization payments on the six-month, seven-month and eight-month anniversary of the issue date with each amortization payment being one third of the total outstanding principal and interest. If the six-month amortization payment is made in cash then the payment is an amount equal to 120% of the applicable amortization payment and if the seven-month or the eight-month amortization payments are made in cash then the payment is an amount equal to 125% of the applicable amortization payment. The Notes may be prepaid at any time until the 180th day following the Original Issue Date at an amount equal to (i) 115% of outstanding principal balance of the Note and accrued and unpaid interest during the period from the Original Issue Date through the three months following the Original Issue Date, and (ii) 120% of outstanding principal balance of the Notes and accrued and unpaid interest during months four through six following the Original Issue Date. In order to prepay the Notes, the Company shall provide 20 Trading Days prior written notice to the Holder, during which time the Holder may convert the Notes in whole or in part at the Conversion Price. The Notes contain certain covenants, such as restrictions on the incurrence of indebtedness, creation of liens, payment of restricted payments, redemptions, payment of cash dividends and the transfer of assets. The Notes also contains certain adjustment provisions that apply in connection with any stock split, stock dividend, stock combination, recapitalization or similar transactions. The conversion price is also subject to adjustment if the Company issues or sells shares of its common stock for a consideration per share less than the conversion price then in effect, or issue options, warrants or other securities convertible or exchange for shares of its common stock at a conversion or exercise price less than the conversion price of the Notes then in effect. If either of these events should occur, the conversion price is reduced to the lowest price at which these securities were issued or are exercisable. The Company granted the Purchasers certain rights of first refusal on future offerings by the Company for as long as the Purchasers hold the Notes. In addition, subject to limited exceptions, the Purchasers will not have the right to convert any portion of the Note if the Purchaser, together with its affiliates, would beneficially own in excess of 4.99% of the number of shares of the Company’s Common Stock outstanding immediately after giving effect to its conversion. The Purchaser may increase or decrease this ownership limitation to any percentage not exceeding 9.99% upon 61 days prior written notice to the Company. The Warrants are exercisable for shares of the Company’s common stock upon the payment in cash of the exercise price and they are also exercisable on a cashless basis at any time there is no effective registration statement registering the shares of common stock underlying the Warrants. The exercise price of the Warrants is subject to adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the Common Stock and also upon any distributions of assets, including cash, stock or other property to the Company’s stockholders. The exercise price of the Warrants is also subject to full ratchet price adjustment if the Company sells or grants any option to purchase, sell or re-price any common stock or common stock equivalents, as defined, at an exercise price lower than the then-current exercise price of the Warrant with the exception for certain exempted issuances and subject to certain limitations on the reduction of the exercise price as provided in the Warrants. In the event of a fundamental transaction, as described in the Warrants and generally including any reorganization, recapitalization or reclassification of the Common Stock, the sale, transfer or other disposition of all or substantially all of the Company’s properties or assets, the Company’s consolidation or merger with or into another person, the acquisition of more than 50% of the outstanding Common Stock, or any person or group becoming the beneficial owner of 50% of the voting power represented by the outstanding Common Stock, the holders of the Warrants will be entitled to receive upon exercise of the Warrants the kind and amount of securities, cash or other property that the holders would have received had they exercised the Warrants immediately prior to such fundamental transaction; provided that upon the occurrence of certain fundamental transactions, the holder can require the Company to purchase the Warrant for cash at a price equal to the higher of the Black Scholes Value of the unexercised portion of the Warrant or difference between the cash per share paid in the fundamental transaction and the exercise price per share. The holder of Warrants will not have the right to exercise any portion of the Warrant if the holder (together with its affiliates) would beneficially own in excess of 9.99% of the number of shares of common stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Warrants. In connection with the Company’s obligations under the Notes, the Company entered into a Security Agreement, Pledge Agreement and Subsidiary Guaranty with Calvary Fund I LP, as agent, pursuant to which the Company granted a lien on all assets of the Company (the “Collateral”) excluding permitted indebtedness which includes a first lien held by Regions Bank in connection with the $100,000 revolving promissory note entered into with Regions Bank in October 2014, for the benefit of the Purchasers, to secure the Company’s obligations under the Notes. Upon an Event of Default (as defined in the Notes), the Purchasers may, among other things, collect or take possession of the Collateral, proceed with the foreclosure of the security interest in the Collateral or sell, lease or dispose of the Collateral. In connection with the issuance of the Notes and Warrants above, the Company determined that the terms of the Notes and Warrants included a down-round provision under which the conversion price and exercise price could be affected by future equity offerings undertaken by the Company or contain terms that are not fixed monetary amounts at inception. Subsequent to the date of these Notes, the Company sold stock at a share price of $0.075 per shares. Accordingly, pursuant to these ratchet provisions, the conversion price on these Notes and the exercise price of the Warrants were lowered to $0.075 per share. Additionally, the total number of Warrants were increased on a full ratchet basis by 3,111,111 (see Note 7). Under the provisions of FASB ASC Topic No. 815-40, “Derivatives and Hedging – Contracts in an Entity’s Own Stock”, the embedded conversion option contained in the convertible instruments and the Warrants were accounted for as derivative liabilities at the date of issuance and shall be adjusted to fair value through earnings at each reporting date. The fair value of the embedded conversion option derivatives and Warrants were determined using the Binomial valuation model. At the end of each period, the Company revalued the embedded conversion option and warrants derivative liabilities. For the three months ended March 31, 2017, aggregate derivative expense from changes in fair value of derivative liabilities amounted to $1,814,233, which is recorded as a component of other income/(expense) on the accompanying consolidated statements of operations. The Company did not have derivative liabilities at March 31, 2016. During the three months March 31, 2017, the fair value of the derivative liabilities was estimated using the Binomial valuation model with the following assumptions: Dividend rate 0 Term (in years) 0.33 to 4.65 years Volatility 156.6% to 201.5 % Risk-free interest rate 0.76% to 1.93 % For the three months ended March 31, 2017 and 2016, amortization of debt discounts related to the Notes amounted to $131,249 and $0, respectively, which has been included in interest expense on the accompanying consolidated statements of operations. At March 31, 2017 and December 31, 2016, the convertible debt consisted of the following: March 31, 2017 December 31, 2016 Principal amount $ 350,000 $ 350,000 Less: unamortized debt discount (164,063 ) (295,312 ) Convertible note payable, net $ 185,937 $ 54,688 At March 31, 2017 and December 31, 2016, the Company had $350,000 and $350,000, respectively, in borrowings outstanding under the Notes. The weighted average interest rate during the period ended March 31, 2017 was approximately 10.0%. |
Related-Party Transactions
Related-Party Transactions | 3 Months Ended |
Mar. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | NOTE 6 – RELATED-PARTY TRANSACTIONS Due to related parties From time to time, the Company receives advances from and repays such advances to the Company’s chief executive officer and chief financial officer for working capital purposes. Additionally, from time to time, Vitel’s General Manager of Global Operations and Vitel’s Chief Operations Officer, both of who are beneficial shareholders of the Company (together referred to as the Vitel Officers), paid expenses on behalf of the Company and the Company reimburses the Vitel Officers or these expenses. The advances are non-interest bearing and are payable on demand. For the three months ended March 31, 2017, due to related party activity consisted of the following: CEO CFO Vitel Officers Total Balance due to related parties at December 31, 2016 $ 5,000 $ - $ - $ 5,000 Working capital advances received - - 6,444 6,444 Repayments made (5,000 ) - - (5,000 ) Balance due to related parties at March 31, 2017 $ - $ - $ 6,444 $ 6,444 Accounts payable – related party At March 31, 2017, the Company owed $8,748 to a company owned by the Vitel Officers for consulting services performed Other During the three months ended March 31, 2017, the Company paid $20,975 and $7,842 to a company owned by the Vitel Officers for consulting fees and for administrative fees, respectively. |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) | 3 Months Ended |
Mar. 31, 2017 | |
Equity [Abstract] | |
Stockholders' Equity (Deficit) | NOTE 7 – STOCKHOLDERS’ EQUITY (DEFICIT) Shares Authorized On August 12, 2015, the Company filed amended and restated Articles of Incorporation with the Nevada Secretary of State to authorize 520,000,000 shares of capital stock, of which 500,000,000 shares are common stock, with a par value of $0.0001 per share (“Common Stock”), and 20,000,000 shares are preferred stock, with a par value of $0.0001 per share (“Preferred Stock”). Series A Preferred Stock On August 20, 2015, the Company filed the Certificate of Designation with the Nevada Secretary of State, designating 1,000,000 shares of the authorized 20,000,000 Preferred Stock as Series A Preferred Stock. Each holder of Series A Preferred Stock is entitled to 500 votes for each share of Series A Preferred Stock held as of the applicable date on any matter that is submitted to a vote or for the consent of the stockholders of the Company. The holders of Series A Preferred Stock shall have no special voting rights and their consent is not required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for the taking of any corporate action. On September 2, 2015, in connection with the Exchange, the Company issued 1,000,000 shares of the Company’s Series A Preferred Stock, representing 100% of the outstanding Series A Preferred. Of these shares, 500,000 were issued to our Chief Executive Officer and 500,000 shares were issued to a former member of our Board of Directors. As of March 31, 2017, there are 1,000,000 shares of Series A Preferred Stock issued and outstanding. Series B Preferred Stock On March 7, 2017, the Company filed a certificate of designation, preferences and rights of Series B preferred stock (the “Certificate of Designation”) with the Secretary of State of the State of Nevada to designate 7,892,000 shares of its previously authorized preferred stock as Series B preferred stock, par value $0.0001 per share and a stated value of $0.0001 per share. The Certificate of Designation and its filing was approved by the Company’s board of directors without shareholder approval as provided for in the Company’s articles of incorporation and under Nevada law. The holders of shares of Series B preferred stock are entitled to dividends or distributions share for share with the holders of the Common Stock, if, as and when declared from time to time by the Board of Directors. The holders of shares of Series B preferred stock have the following voting rights: ● Each share of Series B preferred stock entitles the holder to 100 votes on all matters submitted to a vote of the Company’s stockholders. ● Except as otherwise provided in the Certificate of Designation, the holders of Series B preferred stock, the holders of Company common stock and the holders of shares of any other Company capital stock having general voting rights and shall vote together as one class on all matters submitted to a vote of the Company’s stockholders; and ● Commencing at any time after the date of issuance of any shares of the Series B Preferred Stock (the “Issuance Date”) and upon the earliest of the occurrence of (i) a holder of the Series B Preferred Stock owning, directly or indirectly as a beneficiary or otherwise, shares of Common Stock which are less than 5.0% of the total outstanding shares of Common Stock, (ii) the date a holder of the Series B Preferred Stock is no longer an employee of the Company or any of its subsidiaries or (iii) five years after the Issuance Date, the Company shall have the right to redeem all of the then outstanding Series B Preferred Stock held by such holder at a price equal to the Stated Value (the “Redemption Price”). The Series B Preferred Stock which is redeemed as provided for in the Certificate of Designations shall be returned to the Company (and, if not so returned, shall automatically be deemed canceled). The Redemption Price shall be mailed to such holder at the holder’s address of record, and the Series B Preferred Stock owned by such holder shall be canceled. In the event of the voluntary or involuntary liquidation, dissolution, distribution of assets or winding-up of the Corporation, the holders of the Series B Preferred Stock shall be entitled to receive, share for share with the holders of shares of Common Stock and Series A Preferred Stock, all the assets of the Corporation of whatever kind available for distribution to stockholders, after the rights of the holders of the Series A Preferred Stock have been satisfied. In March 2017, the Company issued 2,892,000 shares of Series B Preferred to Jonathan F. Head, Ph. D, the Company’s Chief Executive Officer and a member of the Board of Directors of the Company as provided for in the Contribution Agreement. The Series B preferred stock issued to Dr. Head and were determined to have nominal value of $289 or $.0001 per shares and was recorded as compensation expense. In addition, in March 2017 the Company issued 5,000,000 shares of Series B Preferred to Banco Actinver for the benefit of the Vitel Stockholders as partial consideration in the exchange for 100% of the issued and outstanding capital stock of Vitel. (See Note 3). As of March 31, 2017, there are 7,892,000 shares of Series B Preferred issued and outstanding. Common Stock Common stock issued for services On February 27, 2017, the Company issued 150,000 shares of its unregistered common stock to an employee as a bonus for services to the Company. The shares were valued at the most recent cash price paid of $0.075 per share. In connection with these shares, the Company recorded stock-based compensation of $11,250. Common stock and warrants issued for cash During the three months ended March 31, 2017, pursuant to unit subscription agreements, the Company issued 8,119,802 shares of its unregistered common stock and 4,059,912 five-year warrants to purchase common shares for an exercise price of $0.30 per common share to investors for cash proceeds of $608,983 or $0.075 per share. Common stock issued for acquisition On March 10, 2017, pursuant to the terms of the Contribution Agreement, the Company issued 61,158,013 shares of its unregistered common stock to Banco Actinver, S.A., in its capacity as Trustee (the “Trustee”) of the Irrevocable Management Trust Agreement Trust No. 2868 (the “Trust Agreement”) for the benefit of the Vitel Stockholders in exchange for 100% of the issued and outstanding capital stock of Vitel. (See Note 3). Common stock purchase agreement On October 20, 2015, the Company entered into a common stock purchase agreement (the “Purchase Agreement”), together with a registration rights agreement (the “Registration Rights Agreement”), with Lincoln Park Capital Fund, LLC (“Lincoln Park”). Under the terms and subject to the conditions of the Purchase Agreement, the Company has the right to sell to, and Lincoln Park is obligated to purchase, up to $10.1 million in amounts of shares, as described below, of the Company’s common stock, subject to certain limitations, from time to time, over the 36-month period commencing on the date that a registration statement, which the Company agreed to file with the Securities and Exchange Commission (the “SEC”) pursuant to the Registration Rights Agreement, is declared effective by the SEC and a final prospectus in connection therewith is filed which occurred on December 15, 2015. The Company may direct Lincoln Park, at its sole discretion and subject to certain conditions, to purchase up to 100,000 shares of Common Stock on any business day (such purchases, “Regular Purchases”), provided that at least one business day has passed since the most recent purchase, and provided, however that Lincoln Park’s committed obligation under any single Regular Purchase shall not exceed $50,000, provided that the amount the Company may sell to Lincoln Park under a single Regular Purchase may increase under certain circumstances as described in the Purchase Agreement but in no event will the amount of a single Regular Purchase exceed $500,000. The purchase price of shares of Common Stock related to the future funding will be based on a formula tied to the prevailing market prices of such shares at the time of sales. In addition, the Company may direct Lincoln Park to purchase additional amounts as accelerated purchases if on the date of a Regular Purchase the closing sale price of the Common Stock is not below the threshold price as set forth in the Purchase Agreement. The Company’s sales of shares of Common Stock to Lincoln Park under the Purchase Agreement are limited to no more than the number of shares that would result in the beneficial ownership by Lincoln Park and its affiliates, at any single point in time, of more than 4.99% of the then outstanding shares of the Common Stock. In connection with the Purchase Agreement, the Company issued as a commitment fee to Lincoln Park 1,000,000 shares of Common Stock. Lincoln Park represented to the Company, among other things, that it was an “accredited investor” (as such term is defined in Rule 501(a) of Regulation D under the Securities Act of 1933, as amended (the “Securities Act”)), and the Company sold the securities in reliance upon an exemption from registration contained in Section 4(a) (2) under the Securities Act. The securities sold may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. The Purchase Agreement and the Registration Rights Agreement contain customary representations, warranties, agreements and conditions to completing future sale transactions, indemnification rights and obligations of the parties. The Company has the right to terminate the Purchase Agreement at any time, at no cost or penalty. Actual sales of shares of Common Stock to Lincoln Park under the Purchase Agreement will depend on a variety of factors to be determined by the Company from time to time, including, among others, market conditions, the trading price of the Common Stock and determinations by the Company as to the appropriate sources of funding for the Company and its operations. Lincoln Park has no right to require any sales by the Company, but is obligated to make purchases from the Company as it directs in accordance with the Purchase Agreement. Lincoln Park has covenanted not to cause or engage in any manner whatsoever, any direct or indirect short selling or hedging of our shares. The net proceeds under the Purchase Agreement to the Company will depend on the frequency and prices at which the Company sells shares of its stock to Lincoln Park. The Company expects that any proceeds received by the Company from such sales to Lincoln Park under the Purchase Agreement will be used for general corporate purposes and working capital requirements. During the three months ended March 31, 2017, pursuant to the Purchase Agreement, the Company issued 900,000 shares of its common stock to Lincoln Park for net proceeds of $176,617 and a subscription receivable of $25,237 which was collected in April 2017. Warrants Warrant activities for the three months ended March 31, 2017 are summarized as follows: Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Balance Outstanding December 31, 2016 3,304,872 $ 0.27 Issued on a full ratcheted basis 3,111,111 0.075 Issued with unit sales 4,059,912 0.30 Balance Outstanding March 31, 2017 10,475,895 $ 0.20 4.71 $ 980,000 Exercisable, March 31, 2017 10,475,895 $ 0.20 4.71 $ 980,000 Stock options On March 10, 2017, the non-management members of the Board of Directors determined that it was in the best interests of the Company to reward the Company’s chief executive officer and chief financial officer of the Company by amending their employment agreements and awarding them stock options in order to provide incentives to retain and motivate them in their roles with the Company. The stock option award included options for each of them to purchase 2,000,000 shares (the “Stock Options”) of Common Stock at an exercise price of $0.25 per share. One-third of the Stock Options vest on March 10, 2017, March 10, 2018, and March 10, 2019, respectively, and are exercisable at any time after vesting until 10 years after the grant date. The Stock Options vest so long as the optionee remains an employee of the Company or a subsidiary of the Company on the vesting dates (except as otherwise provided for in the employment agreement between the Company and the optionee). The fair value of this option grant was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions: dividend yield of 0%; expected volatility of 203.4%; risk-free interest rate of 1.93%; and, an estimated holding period of 6 years. In connection with these options, the Company valued these options at a fair value of $293,598 and will record stock-based compensation expense over the vesting period. During the three months ended March 31, 2017, the Company recorded stock-based compensation expense of $103,983 related to these options At March 31, 2017, there were 4,000,000 options outstanding and 1,333,334 options vested and exercisable. As of March 31, 2017, there was $189,615 of unvested stock-based compensation expense to be recognized through December 2026. The aggregate intrinsic value at March 31, 2017 was approximately $20,000 and was calculated based on the difference between the quoted share price on March 31, 2017 and the exercise price of the underlying options. Stock option activities for the three months ended March 31, 2017 are summarized as follows: Number of Option Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Balance Outstanding December 31, 2016 - $ - Granted 4,000,000 0.25 Balance Outstanding March 31, 2017 4,000,000 $ 0.25 9.95 $ 20,000 Exercisable, March 31, 2017 1,333,334 $ 0.25 9.95 $ 20,000 |
Commitments
Commitments | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | NOTE 8 – COMMITMENTS Employment agreements On February 2, 2016, the Company entered into an employment agreement with Jonathan F. Head, Ph.D. (“Dr. Head”) to serve as the Company’s Chief Executive Officer, the term of which runs for three years (from February 2, 2016 through February 1, 2019) and renews automatically for one year periods unless a written notice of termination is provided not less than 120 days prior to the automatic renewal date. The employment agreement with Dr. Head provides that Dr. Head’s salary for calendar year 2016 shall be $275,000 and for calendar year 2017 and for each calendar year thereafter during the term of the employment agreement with Dr. Head shall be an amount determined by the Board of Directors, which in no event shall be less than the annual salary that was payable by the Company to Dr. Head for the immediately preceding calendar year. On February 2, 2016, the Company entered into an employment agreement with Andrew Kucharchuk (“Mr. Kucharchuk) to serve as the Company’s President and Chief Financial Officer, the term of which runs for three years (from February 2, 2016 through February 1, 2019) and renews automatically for one year periods unless a written notice of termination is provided not less than 120 days prior to the automatic renewal date. The employment agreement with Mr. Kucharchuk provides that Mr. Kucharchuk’s salary for calendar year 2016 shall be $200,000 and for calendar year 2017 and for each calendar year thereafter during the term of the employment agreement with Mr. Kucharchuk shall be an amount determined by the Board of Directors, which in no event shall be less than the annual salary that was payable by the Company to Mr. Kucharchuk for the immediately preceding calendar year. The above executives shall be eligible for an annual target bonus payment in an amount equal to ten percent of his base salary (“Bonus”). The Bonus is determined based on the achievement of certain performance objectives of the Company as established by the Board of Directors. The Bonus may be greater or less than the target Bonus, based on the level of achievement of the applicable performance objectives. On March 10, 2017, the non-management members of the Board of Directors determined that it was in the best interests of the Company to reward the Company’s chief executive officer and chief financial officer of the Company by amending their employment agreements and awarding them stock options in order to provide incentives to retain and motivate them in their roles with the Company. The Company amended each of the February 2, 2016 employment agreements of the Company’s chief executive officer and chief financial officer to extend the term to March 9, 2020 and to provide for 100% vesting of any unvested portion of any outstanding equity, or equity-based award granted to them by the Company upon termination of their respective employment agreements without cause, as a result of a breach of the agreement by the Company or upon their respective death or disability. The stock option award included options for each of them to purchase 2,000,000 shares (the “Stock Options”) of Common Stock at an exercise price of $0.25 per share. One-third of the Stock Options vest on March 10, 2017, March 10, 2018, and March 10, 2019, respectively, and are exercisable at any time after vesting until 10 years after the grant date. The Stock Options vest so long as the optionee remains an employee of the Company or a subsidiary of the Company on the vesting dates (except as otherwise provided for in the employment agreement between the Company and the optionee). On March 10, 2017, Vitel entered into employment agreements with each of Messrs. Cosme and Alaman who were the sellers of Vitel. Mr. Cosme was appointed as Vitel’s General Manager of Global Operations and Mr. Alaman was appointed as its Chief Operations Officer. Both of Messrs. Cosme and Alaman will be responsible for, supervising, managing, planning, directing and organizing the activities of the Vitel and will be its two most senior executive officers reporting to Vitel’s Board of Directors with all other employees of Vitel reporting directly or indirectly to them. Each of the agreements provides for a base salary of $187,500, annual bonuses and other compensation as required under Mexican Federal Labor Law and an annual bonus target of 50% of salary based on performance objectives to be established by the Company’s Board of Directors annually. In addition, Messrs. Cosme and Alaman are entitled to a $500 monthly car allowance, health insurance reimbursement of up to $5,000 per year and other benefits required under Mexican law. The employment agreement also contains a non-compete provision prohibiting them from engaging in business activities that compete with Vitel’s current business and allows them to continue to operate their ongoing pharmaceuticals business so long as such business does not interfere with their duties to Vitel under their respective employment agreements. In addition, if Messrs. Cosme and Alaman seek to pursue any future business opportunities that do not interfere with their obligations to Vitel, they are required to notify the Company and provide it with a notice and an opportunity to participate in such opportunity. Employment agreements The employment agreements may be terminated upon the employee’s death or disability, and with or without cause. In the event Vitel terminates either of Messrs. Cosme and Alaman’s employment upon their death or disability, for cause (as defined in the employment agreement) or if either of them should resign without cause, the person resigning is entitled to payment of their base salary through the date of termination and certain severance payments they are legally entitled to receive under Mexican Federal Labor Law. At Vitel’s option, it may terminate their employment without cause or the employee may terminate the agreement for good cause (as defined in the agreement) in which event the person terminated is entitled to (i) the equivalent amount of the corresponding severance payment set forth in the Mexican Federal Labor Law for an unjustified dismissal, or if greater (ii) the equivalent amount of up to three years’ gross salary and certain amounts mandated under Mexican labor laws, depending on the date of termination less the number of months elapsed after March 10, 2017. The severance payment shall be paid in equal monthly installments over the remaining term so long as the employee is in compliance with the non-compete provisions provided for in the employment agreement. The Company is a guarantor of Vitel’s obligations under the employment agreements. The employment agreements do not represent additional purchase consideration. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 9 – SUBSEQUENT EVENTS In April 2017, pursuant to unit subscription agreements, the Company issued 133,334 shares of its common stock and 66,667 five-year warrants to purchase common shares for an exercise price of $0.30 per common share to investors for cash proceeds of $10,000 or $0.075 per share. From April 1, 2017 to April 26, 2017, pursuant to a stock purchase agreement with Lincoln Park dated October 20, 2015, whereby the Company has the right to sell to, and Lincoln Park is obligated to purchase, up to $10,100,000 in amounts of shares of the Company’s common stock, subject to certain limitations, from time to time, over the 36-month period, the Company issued 800,000 shares of its common stock to Lincoln Park for net proceeds of $183,070. On April 13, 2017, the Company issued 20,000 shares of its unregistered common stock to a consultant for business development services performed. The shares were valued at the most recent cash price paid of $0.075 per share. In connection with these shares, the Company recorded stock-based compensation of $1,500. |
Summary of Significant Accoun15
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principals of Consolidation | Basis of presentation and principles of consolidation The Company’s consolidated financial statements include the financial statements of OncBioMune Pharmaceuticals, Inc. and its wholly-owned subsidiaries, OncBioMune, Inc., Vitel and Oncbiomune México, S.A. De C.V.. All significant intercompany accounts and transactions have been eliminated in consolidation Management acknowledges its responsibility for the preparation of the accompanying unaudited condensed consolidated financial statements which reflect all adjustments, consisting of normal recurring adjustments, considered necessary in its opinion for a fair statement of its financial position and the results of its operations for the periods presented. The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (the “U.S. GAAP”) for interim financial information and with the instructions Article 8-03 of Regulation S-X. Operating results for interim periods are not necessarily indicative of results that may be expected for the fiscal year as a whole. Certain information and note disclosure normally included in financial statements prepared in accordance with U.S. GAAP has been condensed or omitted from these statements pursuant to such accounting principles and, accordingly, they do not include all the information and notes necessary for comprehensive financial statements These unaudited condensed consolidated financial statements should be read in conjunction with the summary of significant accounting policies and notes to the consolidated financial statements for the years ended December 31, 2016 and 2015 of the Company which were included in the Company’s annual report on Form 10-K as filed with the Securities and Exchange Commission on April 17, 2017. |
Going Concern | Going concern These consolidated financial statements 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. As reflected in our accompanying consolidated financial statements, the Company had a net loss of $2,782,648 and $444,340 for the three months ended March 31, 2017 and 2016, respectively. The net cash used in operations were $670,842 and $357,657 for the three months ended March 31, 2017 and 2016, respectively. Additionally, the Company had an accumulated deficit of $5,925,499 and $3,142,851 at March 31, 2017 and at December 31, 2016, respectively, had a working capital deficit of $2,835,093 at March 31, 2017, and had minimal revenues since inception. Management believes that these matters raise substantial doubt about the Company’s ability to continue as a going concern for twelve months from the issuance date of this report. On March 10, 2017, the Company completed the acquisition of 100% of the issued and outstanding capital stock of Vitel. Management cannot provide assurance that we will ultimately achieve profitable operations or become cash flow positive, or raise additional debt and/or equity capital. Management believes that our capital resources are not currently adequate to continue operating and maintaining its business strategy for the fiscal year ending December 31, 2017. The Company will seek to raise capital through additional debt and/or equity financings to fund our operations in the future. Although the Company has historically raised capital from sales of equity and from the issuance of promissory notes, there is no assurance that it will be able to continue to do so. If the Company is unable to raise additional capital or secure additional lending in the near future, management expects that the Company will need to curtail or cease operations. These consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. |
Use of Estimates | Use of estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Significant estimates during the three months ended March 31, 2017 and 2016 include the valuation of accounts receivable, valuation of inventories, useful life of property and equipment, assumptions used in assessing impairment of long-term assets, estimates of current and deferred income taxes and deferred tax valuation allowances, the fair value of non-cash equity transactions, the valuation of derivative liabilities, and the fair value of assets acquired and liabilities assumed in the business acquisition. |
Concentrations | Concentrations Generally, the Company relies on one vendor as a single source of raw materials to produce certain components of its cancer treatment products. The Company believe that other vendors are available to supply these materials if the Company cannot obtain these materials from its single source vendor. |
Fair Value of Financial Instruments and Fair Value Measurements | Fair value of financial instruments and fair value measurements FASB ASC 820 — Fair Value Measurements and Disclosures, The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are as follows: The carrying amounts reported in the consolidated balance sheets for cash, due from and to related parties, prepaid expenses, line of credit payable, accounts payable and accrued liabilities, approximate their fair market value based on the short-term maturity of these instruments. The Company accounts for certain instruments at fair value using level 3 valuation. At March 31, 2017 At December 31, 2016 Description Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Derivative liabilities — — $ 2,216,288 — — 402,055 A roll forward of the level 3 valuation financial instruments is as follows: Derivative Liabilities Balance at December 31, 2016 $ 402,055 Change in fair value included in derivative expense 1,814,233 Balance at March 31, 2017 $ 2,216,288 ASC 825-10 “ Financial Instruments , |
Cash and Cash Equivalent | Cash and cash equivalent For purposes of the consolidated statements of cash flows, the Company considers all highly liquid instruments with a maturity of three months or less at the purchase date and money market accounts to be cash equivalents. At March 31, 2017 and December 31, 2016, the Company did not have any cash equivalents. The Company maintains its cash in bank and financial institution deposits that at times may exceed federally insured limits. There were no balances in excess of FDIC insured levels as of March 31, 2017 and December 31, 2016. The Company has not experienced any losses in such accounts through March 31, 2017. Additionally, the Company maintains cash at financial institutions in Mexico. At March 31, 2017 and December 31, 2016, cash balances held in Mexico banks of $63,335 and $0, respectively, are uninsured. |
Accounts Receivable | Accounts receivable Accounts receivable are presented net of an allowance for doubtful accounts. The Company maintains allowances for doubtful accounts for estimated losses. The Company reviews the accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including the age of the balance, a customer’s historical payment history, its current credit-worthiness and current economic trends. Accounts are written off after exhaustive efforts at collection. At March 31, 2017, based on a review of its outstanding balances, the Company has not established an allowance for doubtful accounts. |
Inventories | Inventories Inventories, consisting of finished goods related to the Company’s products are stated at the lower of cost and net realizable value utilizing the first-in first-out (FIFO) method. A reserve is established when management determines that certain inventories may not be saleable. If inventory costs exceed expected net realizable value due to obsolescence or quantities in excess of expected demand, the Company will record reserves for the difference between the cost and the net realizable value. These reserves are recorded based on estimates. |
Property and Equipment | Property and equipment Property are stated at cost and are depreciated using the straight-line method over their estimated useful lives, which range from three to five years. Leasehold improvements are depreciated over the shorter of the useful life or lease term including scheduled renewal terms. Maintenance and repairs are charged to expense as incurred. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. The Company examines the possibility of decreases in the value of these assets when events or changes in circumstances reflect the fact that their recorded value may not be recoverable. |
Impairment of Long-lived Assets | Impairment of long-lived assets In accordance with ASC Topic 360, the Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable, or at least annually. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. |
Derivative liabilities | Derivative liabilities The Company has certain financial instruments that are embedded derivatives associated with capital raises. The Company evaluates all its financial instruments to determine if those contracts or any potential embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with ASC 810-10-05-4 and 815-40. This accounting treatment requires that the carrying amount of any embedded derivatives be recorded at fair value at issuance and marked-to-market at each balance sheet date. In the event that the fair value is recorded as a liability, as is the case with the Company, the change in the fair value during the period is recorded as either income or expense. Upon conversion, exercise or repayment, the respective derivative liability is marked to fair value at the conversion, repayment or exercise date and then the related fair value amount is reclassified to income or expense as part of gain or loss on extinguishment. |
Revenue Recognition | Revenue recognition The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the purchase price is fixed or determinable and collectability is reasonably assured. |
Stock-Based Compensation | Stock-based compensation Stock-based compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718 which requires recognition in the financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. Pursuant to ASC 505-50 – “Equity-Based Payments to Non-Employees” |
Basic and Diluted Earnings per Share | Basic and diluted earnings per share Pursuant to ASC 260-10-45, basic loss per common share is computed by dividing net loss by the weighted average number of shares of common stock outstanding for the periods presented. Diluted loss per share is computed by dividing net loss by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period. Potentially dilutive common shares consist of common stock issuable for stock warrants (using the treasury stock method). These common stock equivalents may be dilutive in the future. All potentially dilutive common shares were excluded from the computation of diluted shares outstanding as they would have an anti-dilutive impact on the Company’s net losses and consisted of the following: March 31, 2017 March 31, 2016 Stock warrants 10,475,895 2,694 Convertible debt 4,666,667 - Stock options 4,000,000 - |
Income Taxes | Income taxes The Company accounts for income tax using the liability method prescribed by ASC 740, “Income Taxes”. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the year in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred tax assets if based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized as income or loss in the period that includes the enactment date. The Company follows the accounting guidance for uncertainty in income taxes using the provisions of ASC 740 “Income Taxes |
Research and Development | Research and development Research and development costs incurred in the development of the Company’s products are expensed as incurred. |
Foreign Currency Translation | Foreign currency translation The reporting currency of the Company is the U.S. dollar. The functional currency of the parent company and its U.S. subsidiary is the U.S. dollar and the functional currency of the Company’s subsidiaries located in Mexico is the Mexican Peso (“Peso”). For the subsidiaries whose functional currencies are the Peso, results of operations and cash flows are translated at average exchange rates during the period, assets and liabilities are translated at the spot exchange rate at the end of the period, and equity is translated at historical exchange rates. As a result, amounts relating to assets and liabilities reported on the statements of cash flows may not necessarily agree with the changes in the corresponding balances on the balance sheets. Translation adjustments resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining comprehensive loss. Assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the balance sheet date with any transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency included in the results of operations as incurred. Additionally, transactions denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing on the transaction dates. All of the Company’s revenue transactions are transacted in the functional currency of the operating subsidiaries. The Company did not enter into any material transactions in foreign currencies. Transaction gains or losses have not had, and are not expected to have, a material effect on the results of operations of the Company. Asset and liability accounts at March 31, 2017 were translated at 18.7547 Pesos to $1.00, which was the exchange rates on the balance sheet date. Equity accounts were stated at their historical rate. The average translation rates applied to the statements of operations for the three months ended March 31, 2017 was 20.2618 Pesos to $1.00. Cash flows from the Company’s operations are calculated based upon the local currencies using the average translation rate. |
Related parties | Related parties Parties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. |
Recent Accounting Pronouncements | Recent accounting pronouncements In August 2015, FASB issued ASU 2015-14, Deferral of the Effective Date Revenue from Contracts with Customers. Revenue from Contracts with Customers On February 25, 2016, the FASB issued ASU No. 2016-02 (“ASU 2016-02”) to amend the accounting guidance for leases. The accounting applied by a lessor is largely unchanged under ASU 2016-02. However, the standard requires lessees to recognize lease assets and lease liabilities for leases classified as operating leases on the balance sheet. Lessees will recognize in the statement of financial position a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it will recognize lease expense for such leases generally on a straight-line basis over the lease term. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 and early adoption is permitted. The Company is currently assessing the impact of the guidance on its consolidated financial statements and notes to its consolidated financial statements. On March 30, 2016, the FASB issued ASU No. 2016-09 (“ASU 2016-09”) to amend the accounting guidance for share-based payment accounting. The areas for simplification in ASU 2016-09 involve several aspects of the accounting for share-based payment transactions, including the income tax consequences, forfeitures, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for annual periods beginning after December 15, 2016 and early adoption is permitted. The adoption of ASU 2016-09 did not have any effect of the Company’s consolidated financial statements. Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements. |
Summary of Significant Accoun16
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Schedule of Fair Value Using Level 3 Valuation Derivative Liability | The Company accounts for certain instruments at fair value using level 3 valuation. At March 31, 2017 At December 31, 2016 Description Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Derivative liabilities — — $ 2,216,288 — — 402,055 |
Schedule of Roll Forward of Level 3 Valuation Financial Instrument | A roll forward of the level 3 valuation financial instruments is as follows: Derivative Liabilities Balance at December 31, 2016 $ 402,055 Change in fair value included in derivative expense 1,814,233 Balance at March 31, 2017 $ 2,216,288 |
Schedule of Anti-Dilutive Shares Outstanding | All potentially dilutive common shares were excluded from the computation of diluted shares outstanding as they would have an anti-dilutive impact on the Company’s net losses and consisted of the following: March 31, 2017 March 31, 2016 Stock warrants 10,475,895 2,694 Convertible debt 4,666,667 - Stock options 4,000,000 - |
Acquisition of Vitel Laborato17
Acquisition of Vitel Laboratorios, S.a. De C.v. (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Business Combinations [Abstract] | |
Summarizes the Estimated Fair Value of Assets Acquired and Liabilities Assumed | Based upon the purchase price allocation, the following table summarizes the estimated fair value of the assets acquired and liabilities assumed at the date of acquisition: Cash $ 39,144 Accounts receivable 178,835 Inventories 54,952 Recoverable taxes 50,792 Other current assets 1,499 Property and equipment 480 Goodwill and other intangible assets 4,695,596 Total assets acquired at fair value 5,021,298 Accounts payable and accrued expenses 427,723 Payroll taxes 6,224 Total liabilities assumed 433,947 Total purchase consideration $ 4,587,351 |
Convertible Debt (Tables)
Convertible Debt (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Liabilities at Fair Value | During the three months March 31, 2017, the fair value of the derivative liabilities was estimated using the Binomial valuation model with the following assumptions: Dividend rate 0 Term (in years) 0.33 to 4.65 years Volatility 156.6% to 201.5 % Risk-free interest rate 0.76% to 1.93 % |
Schedule of Convertible Note | At March 31, 2017 and December 31, 2016, the convertible debt consisted of the following: March 31, 2017 December 31, 2016 Principal amount $ 350,000 $ 350,000 Less: unamortized debt discount (164,063 ) (295,312 ) Convertible note payable, net $ 185,937 $ 54,688 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Related Party Transactions [Abstract] | |
Schedule of Related Parties Activity | For the three months ended March 31, 2017, due to related party activity consisted of the following: CEO CFO Vitel Officers Total Balance due to related parties at December 31, 2016 $ 5,000 $ - $ - $ 5,000 Working capital advances received - - 6,444 6,444 Repayments made (5,000 ) - - (5,000 ) Balance due to related parties at March 31, 2017 $ - $ - $ 6,444 $ 6,444 |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Notes to Financial Statements | |
Schedule of Warrant Activities | Warrant activities for the three months ended March 31, 2017 are summarized as follows: Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Balance Outstanding December 31, 2016 3,304,872 $ 0.27 Issued on a full ratcheted basis 3,111,111 0.075 Issued with unit sales 4,059,912 0.30 Balance Outstanding March 31, 2017 10,475,895 $ 0.20 4.71 $ 980,000 Exercisable, March 31, 2017 10,475,895 $ 0.20 4.71 $ 980,000 |
Schedule of Stock Option Activities | Stock option activities for the three months ended March 31, 2017 are summarized as follows: Number of Option Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Balance Outstanding December 31, 2016 - $ - Granted 4,000,000 0.25 Balance Outstanding March 31, 2017 4,000,000 $ 0.25 9.95 $ 20,000 Exercisable, March 31, 2017 1,333,334 $ 0.25 9.95 $ 20,000 |
Organization and Nature of Op21
Organization and Nature of Operations (Details Narrative) | Mar. 31, 2017 | Mar. 10, 2017 |
Acquisition percentage of issued and outstanding | 50.00% | |
Vitel Laboratorios, S.A. de C.V [Member] | ||
Acquisition percentage of issued and outstanding | 100.00% |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | ||||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | Mar. 10, 2016 | Dec. 31, 2015 | |
Net Loss | $ 2,782,648 | $ 444,340 | |||
Net cash used in operations | 670,842 | 357,657 | |||
Accumulated deficit | 5,925,499 | $ 3,142,851 | |||
Working capital deficit | $ 2,835,093 | ||||
Acquisition percentage of issued and outstanding | 50.00% | ||||
Cash and cash equivalents | |||||
Cash at bank | $ 142,547 | $ 366,543 | $ 672,769 | ||
Foreign currency translation description | Asset and liability accounts at March 31, 2017 were translated at 18.7547 Pesos to $1.00, which was the exchange rates on the balance sheet date. Equity accounts were stated at their historical rate. The average translation rates applied to the statements of operations for the three months ended March 31, 2017 was 20.2618 Pesos to $1.00. Cash flows from the Companys operations are calculated based upon the local currencies using the average translation rate. | ||||
Mexico Banks [Member] | |||||
Cash at bank | $ 63,335 | $ 0 | |||
Vitel [Member] | |||||
Acquisition percentage of issued and outstanding | 100.00% |
Summary of Significant Accoun23
Summary of Significant Accounting Policies - Schedule of Fair Value Using Level 3 Valuation Derivative Liability (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Derivative liability | $ 2,216,288 | $ 402,055 |
Level 1 [Member] | ||
Derivative liability | ||
Level 2 [Member] | ||
Derivative liability | ||
Level 3 [Member] | ||
Derivative liability | $ 2,216,288 | $ 402,055 |
Summary of Significant Accoun24
Summary of Significant Accounting Policies - Schedule of Roll Forward of Level 3 Valuation Financial Instrument (Details) | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Accounting Policies [Abstract] | |
Balance at the Beginning | $ 402,055 |
Change in fair value included in derivative expense | 1,814,233 |
Balance at the End | $ 2,216,288 |
Summary of Significant Accoun25
Summary of Significant Accounting Policies - Schedule of Anti-Dilutive Shares Outstanding (Details) - shares | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Stock Warrants [Member] | ||
Total antidilutive securities excluded from computation of earnings per share | 10,475,895 | 2,694 |
Convertible Debt [Member] | ||
Total antidilutive securities excluded from computation of earnings per share | 4,666,667 | |
Stock Options [Member] | ||
Total antidilutive securities excluded from computation of earnings per share | 4,000,000 |
Acquisition of Vitel Laborato26
Acquisition of Vitel Laboratorios, S.a. De C.v. (Details Narrative) - USD ($) | Mar. 10, 2017 | Mar. 31, 2017 |
Acquisition percentage of issued and outstanding | 50.00% | |
Business acquistion description | The Common Stock and Series B Preferred will be held by Trustee for the benefit of the Vitel Stockholders as provided for in the Trust Agreement and 98% of the Vitel Shares are held by Banco Actinver for the benefit of the Company as provided for in the Trust Agreement and 2% of the Vitel Shares were transferred to the Company. Vitel became a wholly owned subsidiary of the Company as of the Closing Date as the Company has full control of the Vitel Shares through the Trust. | |
Debt interest rate description | Right of Co-Sale (Tag Along). In the event that any stockholder who is a party to the Stockholders Agreement or group of such stockholders intends to accept an offer (either solicited or unsolicited) from any third party to acquire or otherwise transfer Company Securities (as defined in the Stockholders Agreement), representing at least 20% of the outstanding Company Securities, on a fully diluted basis, the selling stockholder shall give an offer notice in writing to the other stockholders of the Company who are a party to the Stockholders Agreement, with a copy to the Company, containing the terms and conditions of such offer received from the interested third party. Each such stockholder shall have the right to participate in such offer by selling the pro rata proportion of its Company Securities pursuant to such offer to acquire or otherwise Transfer Company Securities (as defined in the Stockholders Agreement). | |
Number of unregistered shares of common stock issued | 61,158,013 | |
Number of unregistered shares of common stock value | $ 4,586,851 | |
Fair value of common stock per share | $ 0.25 | $ .075 |
Preferred stock nominal value | $ 100 | |
Total assets acquired at fair value | 5,021,298 | |
Legal fees | $ 104,000 | |
Vitel Stockholders [Member] | ||
Acquisition percentage of issued and outstanding | 100.00% | |
Jonathan [Member] | ||
Number of common stock shares issued | 2,892,000 | |
Number of common stock shares issued, value | $ 289 | |
Series B Preferred Stock [Member] | ||
Number of common stock shares issued | 5,000,000 | |
Contribution Agreement [Member] | ||
Number of common stock shares issued | 61,158,013 | |
Stockholders Agreement [Member] | ||
Number of common stock shares issued | 61,158,013 | |
Debt interest rate description | Right of Co-Sale (Tag Along). In the event that any stockholder who is a party to the Stockholders Agreement or group of such stockholders intends to accept an offer (either solicited or unsolicited) from any third party to acquire or otherwise transfer Company Securities (as defined in the Stockholders Agreement), representing at least 20% of the outstanding Company Securities, on a fully diluted basis, the selling stockholder shall give an offer notice in writing to the other stockholders of the Company who are a party to the Stockholders Agreement, with a copy to the Company, containing the terms and conditions of such offer received from the interested third party. Each such stockholder shall have the right to participate in such offer by selling the pro rata proportion of its Company Securities pursuant to such offer to acquire or otherwise Transfer Company Securities (as defined in the Stockholders Agreement). | |
Common stock outstanding, percentage description | Drag Along. In the event a stockholder who is a party to the Stockholders Agreement or group of such stockholders representing at least 32% (thirty two per cent) of the outstanding Company Securities, on a fully diluted basis, intends to accept an offer from any third party to acquire or otherwise Transfer Company Securities, representing at least 50% of the outstanding Company Securities, on a fully diluted basis, and the transaction is approved by the Board of Directors as a Major Decision, then each such stockholder shall be obligated to sell its Company Securities pursuant to the offer to purchase. | |
Stockholders Agreement [Member] | Maximum [Member] | ||
Diluted shares percentage | 5.00% | |
Stockholders Agreement [Member] | Series B Preferred Stock [Member] | ||
Number of common stock shares issued | 5,000,000 | |
Stockholder voting rights | Series B Preferred Stock with 100 votes per share | |
Subscription Agreements [Member] | Series B Preferred Stock [Member] | ||
Preferred stock shares issued | 5,000,000 | |
Preferred stock nominal value | $ 500 | |
Vitel Laboratorios, S.A. de C.V [Member] | ||
Acquisition percentage of issued and outstanding | 100.00% |
Acquisition of Vitel Laborato27
Acquisition of Vitel Laboratorios, S.a. De C.v. - Summarizes the Estimated Fair Value of Assets Acquired and Liabilities Assumed (Details) | Mar. 31, 2017USD ($) |
Business Combinations [Abstract] | |
Cash | $ 39,144 |
Accounts receivable | 178,835 |
Inventories | 54,952 |
Recoverable taxes | 50,792 |
Other current assets | 1,499 |
Property and equipment | 480 |
Goodwill and other intangible assets | 4,695,596 |
Total assets acquired at fair value | 5,021,298 |
Accounts payable and accrued expenses | 427,723 |
Payroll taxes | 6,224 |
Total liabilities assumed | 433,947 |
Total purchase consideration | $ 4,587,351 |
Line of Credit (Details Narrati
Line of Credit (Details Narrative) - USD ($) | Oct. 31, 2014 | Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 |
Line of credit | $ 99,208 | $ 99,741 | ||
Line of credit interest rate | 5.70% | 5.45% | ||
Late charge of monthly payment percentage | 5.00% | |||
Available to borrow under the line of credit | $ 792 | $ 259 | ||
Weighted average interest rate | 5.57% | 5.57% | ||
Prime Rate [Member] | ||||
Line of credit interest rate | 1.70% | |||
Revolving Credit Facility [Member] | Regions Bank [Member] | ||||
Line of credit | $ 100,000 | |||
Line of credit expiration date | Oct. 27, 2017 |
Convertible Debt (Details Narra
Convertible Debt (Details Narrative) - USD ($) | Nov. 23, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 |
Debt face amount | $ 350,000 | $ 350,000 | $ 350,000 | |
Proceeds from issuance of debt | 300,000 | |||
Debt original issue discount | $ 50,000 | |||
Debt bear interest | 10.00% | |||
Debt maturity date | Jul. 23, 2017 | |||
Debt conversion price | $ 0.15 | |||
Conversion price, percentage | 60.00% | |||
Convertible debt conversion description | (i) 115% of outstanding principal balance of the Note and accrued and unpaid interest during the period from the Original Issue Date through the three months following the Original Issue Date, and (ii) 120% of outstanding principal balance of the Notes and accrued and unpaid interest during months four through six following the Original Issue Date. In order to prepay the Notes, the Company shall provide 20 Trading Days prior written notice to the Holder, during which time the Holder may convert the Notes in whole or in part at the Conversion Price. | In addition, subject to limited exceptions, the Purchasers will not have the right to convert any portion of the Note if the Purchaser, together with its affiliates, would beneficially own in excess of 4.99% of the number of shares of the Companys Common Stock outstanding immediately after giving effect to its conversion. The Purchaser may increase or decrease this ownership limitation to any percentage not exceeding 9.99% upon 61 days prior written notice to the Company. | ||
Acquisition percentage of common stock | 50.00% | |||
Ownership interest | 50.00% | |||
Revolving line of credit | $ 99,208 | $ 99,741 | ||
Warrant exercise price | $ 0.075 | |||
Number of warrants increased | 3,111,111 | |||
Derivative income (expense) | $ 1,814,233 | |||
Amortization of debt discounts | $ 131,249 | |||
Convertible Note [Member] | ||||
Weighted average interest rate | 10.00% | |||
Stock Warrants [Member] | ||||
Ownership interest | 9.99% | |||
Revolving line of credit | $ 100,000 | |||
Six Month Amortization [Member] | ||||
Amortization debt percentage | 120.00% | |||
Seven Or Eight Month Amortization [Member] | ||||
Amortization debt percentage | 125.00% | |||
Maximum [Member] | ||||
Debt bear interest | 24.00% | |||
Minimum [Member] | ||||
Warrant exercise price | $ 0.075 | |||
Securities Purchase Agreement [Member] | ||||
Debt face amount | $ 350,000 | |||
Debt instrument description | (i) 14.29% Original Issue Discount 10% Senior Secured Convertible Notes (the Notes); and (ii) warrants (the Warrants) to purchase 2,333,334 shares of the Companys common stock at an exercise price of $0.175 (subject to adjustments under certain conditions as defined in the Warrants) which are exercisable for a period of five years from the Original Issue Date. |
Convertible Promissory Note - S
Convertible Promissory Note - Schedule of Derivative Liabilities at Fair Value (Details) | 3 Months Ended |
Mar. 31, 2017 | |
Dividend rate | 0.00% |
Minimum [Member] | |
Term (in years) | 3 months 29 days |
Volatility | 156.60% |
Risk-free interest rate | 0.76% |
Maximum [Member] | |
Term (in years) | 4 years 7 months 24 days |
Volatility | 201.50% |
Risk-free interest rate | 1.93% |
Convertible Promissory Note -31
Convertible Promissory Note - Schedule of Convertible Note (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Debt Disclosure [Abstract] | ||
Principal amount | $ 350,000 | $ 350,000 |
Less: unamortized debt discount | (164,063) | (265,312) |
Convertible note payable, net | $ 185,937 | $ 54,688 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Consulting fees - related party | $ 20,975 | |
Vitel Officers [Member] | ||
Accounts payable related party | 8,748 | |
Consulting fees - related party | 20,975 | |
Administrative fees - related party | $ 7,842 |
Related Party Transactions - Sc
Related Party Transactions - Schedule of Related Parties Activity (Details) | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Balance due to related parties | $ (5,000) |
Repayments made | (5,000) |
Balance due to related parties | 6,444 |
CEO [Member] | |
Balance due to related parties | 5,000 |
Working capital advances received | |
Repayments made | (5,000) |
Balance due to related parties | |
CFO [Member] | |
Balance due to related parties | |
Working capital advances received | |
Repayments made | |
Balance due to related parties | |
Vitel Officers [Member] | |
Balance due to related parties | |
Working capital advances received | 6,444 |
Repayments made | |
Balance due to related parties | $ 6,444 |
Stockholders' Deficit (Details
Stockholders' Deficit (Details Narrative) - USD ($) | Mar. 10, 2017 | Mar. 07, 2017 | Feb. 27, 2017 | Oct. 20, 2016 | Sep. 02, 2015 | Aug. 20, 2015 | Mar. 31, 2017 | Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | Oct. 20, 2015 | Aug. 12, 2015 |
Capital stock authorized | 520,000,000 | |||||||||||
Common stock, shares authorized | 500,000,000 | 500,000,000 | 500,000,000 | 500,000,000 | ||||||||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||
Preferred stock, shares authorized | 20,000,000 | 20,000,000 | 20,000,000 | 20,000,000 | ||||||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||
Common stock value per share | $ 0.25 | .075 | $ .075 | |||||||||
Stock-based compensation | $ 115,522 | $ 18,000 | ||||||||||
Warrants exercise price per share | $ 0.075 | $ 0.075 | ||||||||||
Beneficial ownership percentage | 50.00% | 50.00% | ||||||||||
Stock option to purchase common stock | 2,000,000 | |||||||||||
Stock option vesting, term | 10 years | |||||||||||
Stock option vesting, description | One-third of the Stock Options vest on March 10, 2017, March 10, 2018, and March 10, 2019, respectively | |||||||||||
Dividend yield | 0.00% | |||||||||||
Expected volatility | 203.40% | |||||||||||
Risk-free interest rate | 1.93% | |||||||||||
Estimated holding period | 6 years | |||||||||||
Fair value of stock based compensation | $ 293,598 | $ 269,521 | $ 213,287 | |||||||||
Stock based compensation option | $ 103,983 | |||||||||||
Stock option, outstanding | 4,000,000 | 4,000,000 | ||||||||||
Stock option vested and exercisable | 1,333,334 | 1,333,334 | ||||||||||
Unvested stock based compensation expenses | $ 189,615 | $ 189,615 | ||||||||||
Aggregate intrinisic value | $ 20,000 | $ 20,000 | ||||||||||
Unit Subscription Agreements [Member] | ||||||||||||
Number of shares issued during period | 8,119,802 | |||||||||||
Common stock value per share | $ 0.075 | $ 0.075 | ||||||||||
Warrant to purchase common shares | 4,059,912 | 4,059,912 | ||||||||||
Warrant term | 5 years | |||||||||||
Warrants exercise price per share | $ 0.30 | $ 0.30 | ||||||||||
Number of common stock issued value | $ 608,983 | |||||||||||
Contribution Agreement [Member] | ||||||||||||
Number of shares issued during period | 61,158,013 | |||||||||||
Purchase Agreement [Member] | Lincoln Park Capital Fund, LLC [Member] | ||||||||||||
Number of common stock issued value | $ 10,100,000 | |||||||||||
Maximum purchase of shares of common stock on business day | 100,000 | |||||||||||
Minimum obligation commitment amount | $ 50,000 | |||||||||||
Minimum purchase obligation amount | $ 500,000 | |||||||||||
Number of shares issued as commitment fee | 1,000,000 | |||||||||||
Purchase Agreement [Member] | Lincoln Park Capital Fund, LLC [Member] | Maximum [Member] | ||||||||||||
Beneficial ownership percentage | 4.99% | 4.99% | ||||||||||
Jonathan [Member] | ||||||||||||
Number of shares issued during period | 2,892,000 | |||||||||||
Number of common stock issued value | $ 289 | |||||||||||
Banco Actinver [Member] | Contribution Agreement [Member] | ||||||||||||
Common stock outstanding, percentage | 100.00% | |||||||||||
Number of shares issued during period | 61,158,013 | |||||||||||
Lincoln Park [Member] | Purchase Agreement [Member] | ||||||||||||
Number of shares issued during period | 900,000 | |||||||||||
Number of common stock issued value | $ 176,617 | |||||||||||
Subscription receivable | $ 25,237 | $ 25,237 | ||||||||||
Series A Preferred Stock [Member] | ||||||||||||
Preferred stock, shares authorized | 20,000,000 | 1,000,000 | 1,000,000 | 1,000,000 | ||||||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||||
Preferred stock shares designating | 1,000,000 | |||||||||||
Stock holder voting rights | Each holder of Series A Preferred Stock shall be entitled to 500 votes for each share of Series A Preferred Stock held as of the applicable date on any matter that is submitted to a vote or for the consent of the stockholders of the Company. The holders of Series A Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth in the Certificate of Designation) for taking any corporate action. | |||||||||||
Number of share exchange during period | 1,000,000 | |||||||||||
Percentage of outstanding shares | 100.00% | |||||||||||
Preferred stock, shares issued | 1,000,000 | 1,000,000 | 1,000,000 | |||||||||
Preferred stock, shares outstanding | 1,000,000 | 1,000,000 | 1,000,000 | |||||||||
Series A Preferred Stock [Member] | CEO [Member] | ||||||||||||
Preferred stock, shares issued | 500,000 | |||||||||||
Series A Preferred Stock [Member] | Board of Directors [Member] | ||||||||||||
Preferred stock, shares issued | 500,000 | |||||||||||
Series B Preferred Stock [Member] | ||||||||||||
Preferred stock, shares authorized | 7,892,000 | 7,892,000 | 0 | |||||||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||
Preferred stock shares designating | 7,892,000 | |||||||||||
Stock holder voting rights | Each share of Series B preferred stock entitles the holder to 100 votes on all matters submitted to a vote of the Companys stockholders. | |||||||||||
Preferred stock, shares issued | 7,892,000 | 7,892,000 | 0 | |||||||||
Preferred stock, shares outstanding | 7,892,000 | 7,892,000 | 0 | |||||||||
Common stock outstanding, percentage | 5.00% | |||||||||||
Series B Preferred Stock [Member] | Jonathan [Member] | ||||||||||||
Number of shares issued during period | 2,892,000 | |||||||||||
Series B Preferred Stock [Member] | Dr Head [Member] | ||||||||||||
Preferred stock, par value | $ .0001 | $ .0001 | ||||||||||
Preferred stock nominal value | $ 289 | $ 289 | ||||||||||
Series B Preferred Stock [Member] | Banco Actinver [Member] | ||||||||||||
Common stock outstanding, percentage | 100.00% | 100.00% | ||||||||||
Number of shares issued during period | 5,000,000 | |||||||||||
Series B Preferred Stock [Member] | Employee [Member] | ||||||||||||
Common stock issued for services | 150,000 | |||||||||||
Common stock value per share | $ 0.075 | |||||||||||
Stock-based compensation | $ 11,250 |
Stockholders' Deficit - Schedul
Stockholders' Deficit - Schedule of Warrant Activities (Details) | 3 Months Ended |
Mar. 31, 2017USD ($)$ / sharesshares | |
Weighted Average Remaining Contractual Term (Years), Ending Exercisable | 9 years 11 months 12 days |
Stock Warrants [Member] | |
Number of Warrants, Beginning balance | 3,304,872 |
Number of Warrants, Issued on a full ratcheted basis | 3,111,111 |
Number of Warrants, Issued with unit sales | 4,059,912 |
Number of Warrants, Ending balance | 10,475,895 |
Number of Warrants, Exercisable | 10,475,895 |
Weighted Average Exercise Price, Beginning balance | $ / shares | $ 0.27 |
Weighted Average Exercise Price, Issued on a full ratcheted basis | $ / shares | $ 0.075 |
Weighted Average Exercise Price, Issued with unit sales | 0.30 |
Weighted Average Exercise Price, Ending balance | $ / shares | $ 0.20 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 0.20 |
Weighted Average Remaining Contractual Term (Years), Ending balance | 4 years 8 months 16 days |
Weighted Average Remaining Contractual Term (Years), Ending Exercisable | 9 years 11 months 12 days |
Aggregate Intrinsic Value, Ending balance | $ | $ 980,000 |
Aggregate Intrinsic Value, Exercisable | $ | $ 980,000 |
Stockholders' Deficit - Sched36
Stockholders' Deficit - Schedule of Stock Option Activities (Details) | 3 Months Ended |
Mar. 31, 2017USD ($)$ / sharesshares | |
Equity [Abstract] | |
Number of Option Outstanding, Beginning | shares | |
Number of Option, Granted | shares | 4,000,000 |
Number of Option Outstanding, Ending | shares | 4,000,000 |
Number of Option Exercisable, Ending | shares | 1,333,334 |
Weighted Average Exercise Price Outstanding, Beginning | $ / shares | |
Weighted Average Exercise Price Granted | $ / shares | 0.25 |
Weighted Average Exercise Price Outstanding, Ending | $ / shares | 0.25 |
Weighted Average Exercise Price Exercisable, Ending | $ / shares | $ 0.25 |
Weighted Average Contractual Term (Years) Outstanding, Ending | 9 years 11 months 12 days |
Weighted Average Contractual Term (Years) Exercisable, Ending | 9 years 11 months 12 days |
Aggregate Intrinsic Value Outstanding, Ending | $ | $ 20,000 |
Aggregate Intrinsic Value Exercisable, Ending | $ | $ 20,000 |
Commitments and Contincengies (
Commitments and Contincengies (Details Narrative) - USD ($) | Mar. 10, 2017 | Feb. 02, 2016 | Mar. 31, 2017 |
Stock option vesting, percentage | 100.00% | ||
Stock option to purchase common stock | 2,000,000 | ||
Shares issued price per share | $ 0.25 | $ .075 | |
Stock option vesting, term | 10 years | ||
Stock option vesting, description | One-third of the Stock Options vest on March 10, 2017, March 10, 2018, and March 10, 2019, respectively | ||
Base salary | $ 187,500 | ||
Annual bonus, percentage | 50.00% | ||
Car allowances | $ 500 | ||
Maximum [Member] | |||
Health insurance reimbursement | $ 5,000 | ||
Jonathan F. Head, Ph.D [Member] | |||
Salary payable | $ 275,000 | ||
Andrew Kucharchuk Chief Financial Officer [Member] | |||
Salary payable | $ 200,000 | ||
Chief Executive Officer And Chief Financial Officer [Member] | |||
Stock option vesting, percentage | 100.00% | ||
Stock option term | Mar. 9, 2020 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Apr. 13, 2017 | Apr. 30, 2017 | Apr. 26, 2017 | Mar. 31, 2017 | Mar. 31, 2016 | Apr. 05, 2017 | Mar. 10, 2017 |
Warrants exercise price per share | $ 0.075 | ||||||
Common stock value per share | $ .075 | $ 0.25 | |||||
Stock-based compensation | $ 115,522 | $ 18,000 | |||||
Unit Subscription Agreements [Member] | |||||||
Number of common stock shares issued | 8,119,802 | ||||||
Warrant to purchase common shares | 4,059,912 | ||||||
Warrant term | 5 years | ||||||
Warrants exercise price per share | $ 0.30 | ||||||
Number of common stock shares issued, value | $ 608,983 | ||||||
Common stock value per share | $ 0.075 | ||||||
Subsequent Event [Member] | Lincoln Park [Member] | |||||||
Number of common stock shares issued | 800,000 | ||||||
Number of common stock shares issued, value | $ 183,070 | ||||||
Number of shares purchased, value | 10,100,000 | ||||||
Subsequent Event [Member] | Consultant [Member] | |||||||
Number of common stock shares issued | 20,000 | ||||||
Common stock value per share | $ 0.075 | ||||||
Stock-based compensation | $ 1,500 | ||||||
Subsequent Event [Member] | Unit Subscription Agreements [Member] | |||||||
Number of common stock shares issued | 133,334 | ||||||
Warrant to purchase common shares | 66,667 | ||||||
Warrant term | 5 years | ||||||
Warrants exercise price per share | $ 0.30 | ||||||
Number of common stock shares issued, value | $ 10,000 | ||||||
Common stock value per share | $ 0.075 |