Spotlight Innovation 10-Q 18 Nov 15 2015 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Nov. 17, 2015
Document And Entity Information
Entity Registrant Name	SPOTLIGHT INNOVATION, INC.
Entity Central Index Key	1,388,486
Document Type	10-Q
Document Period End Date	Sep. 30, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		14,277,026
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2,015

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($)	Sep. 30, 2015	Dec. 31, 2014
CURRENT ASSETS:
Cash	$ 541,012	$ 9,068
Restricted cash	119,625	$ 122,250
Prepaid expenses	26,250
Total current assets	686,887	$ 131,318
LONG TERM ASSETS
Property, plant and equipment, net of depreciation of $1,207 and $525	30,141	8,475
In process research and development	7,119,423	6,977,347
Total assets	7,836,451	7,117,140
CURRENT LIABILITIES:
Accounts payable	181,892	330,099
Accounts payable - related parties	16,027	348,955
Accrued liabilities	$ 847,846	457,440
Stock payable		269,705
Warrants payable	$ 2,237,589	692,317
Line of credit, net of debt discount of $847 and $1,611 respectively	886,910	750,714
Notes payable	353,631	356,131
Short term debt - related party	166,410	183,000
Convertible debentures, net of debt discounts of $2,601,930 and $85,590, respectively	996,314	670,322
Total current liabilities	5,686,619	$ 4,058,683
LONG-TERM LIABILITIES
Deferred liabilities	150,000
TOTAL LIABILITIES	$ 5,836,619	$ 4,058,683
Commitments and contingencies
Equity:
Preferred stock
Common stock, par value $0.001, 4,000,000,000 shares authorized, 13,777,026 and 13,094,618 shares outstanding	$ 14,277	$ 13,095
Additional paid-in capital	14,380,207	11,277,032
Accumulated deficit	(14,749,025)	(10,601,946)
Total equity attributable to Spotlight Innovation, Inc.	354,541	688,181
Non-controlling interest	2,354,373	2,370,276
Total stockholders' deficit	1,999,832	3,058,457
Total liabilities and stockholders' deficit	$ 7,836,451	$ 7,117,140
Series A Preferred Stock [Member]
Equity:
Preferred stock
Series C Preferred Stock [Member]
Equity:
Preferred stock

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Property, plant and equipment, net of depreciation	$ 1,207	$ 525
Lines of credit, net of discounts	847	1,611
Convertible debentures, net of debt discounts	$ 2,601,930	$ 85,590
Preferred Stock Par Value	$ 0.001	$ 0.001
Preferred Stock Shares Authorized	4,000,000	4,000,000
Preferred Stock Shares Issued	0	0
Preferred Stock Shares Outstanding	0	0
Common Stock Par Value	$ 0.001	$ .001
Common Stock Shares Authorized	4,000,000,000	4,000,000,000
Common Stock Shares Issued	14,277,026	13,094,618
Common Stock Shares Outstanding	14,277,026	13,094,618
Series A Preferred Stock [Member]
Preferred Stock Par Value	$ 5	$ 5
Preferred Stock Shares Authorized	3,000,000	3,000,000
Preferred Stock Shares Issued	1,051,200	1,051,200
Preferred Stock Shares Outstanding	1,051,200	1,051,200
Series C Preferred Stock [Member]
Preferred Stock Par Value	$ 5	$ 5
Preferred Stock Shares Authorized	500,000	500,000
Preferred Stock Shares Issued	0	0
Preferred Stock Shares Outstanding	0	0

Consolidated Statements of Oper

Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Consolidated Statements Of Operations
Revenue
Operating expenses:
General and administrative expenses	$ 1,799,468	$ 405,202	$ 3,208,479	$ 751,611
Research and development expense	$ 254,844		258,496
Settlement of payables			4,076
Total operating expenses	$ 2,054,312	$ 405,202	3,471,051	$ 751,611
LOSS FROM OPERATIONS	(2,054,312)	(405,202)	(3,471,051)	(751,611)
OTHER INCOME (EXPENSE):
Interest expense	(182,003)	$ (361,411)	(763,195)	$ (1,275,960)
Other income	146		477
Gain on foreign currency exchange	31,180		64,422
Total other income	(150,677)	$ (361,411)	(698,296)	$ (1,275,960)
Net loss	(2,204,989)	$ (766,613)	(4,169,347)	$ (2,027,571)
Net income attributable to non-controlling interest	(21,245)		(22,267)
Net loss attributable to Spotlight Innovation, Inc.	$ (2,183,744)	$ (766,613)	$ (4,147,080)	$ (2,027,571)
Net loss per common share - basic and diluted	$ (0.17)	$ (0.07)	$ (0.31)	$ (0.21)
Weighted average number of common shares outstanding - basic and diluted	14,277,026	11,502,376	13,828,277	9,932,639

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (4,147,080)	$ (2,027,571)
Net loss attributable to noncontrolling interests	(22,267)
Adjustments to reconcile net loss to cash used by operating activities:
Amortization of debt discount	$ 462,188	$ 425,542
Amortization of deferred financing costs		771,685
Interest expense from common shares issued for modification of convertible debt	$ 37,500	80,000
Depletion, depreciation, amortization and accretion expense	1,625	300
Share-based compensation	1,983,764	$ 102,500
Settlement of payables	4,076
Gain on foreign currency exchange	(64,422)
Changes in operating assets and liabilities:
Prepaid expense	(26,250)
Deposits		$ 12,250
Accounts payable	(148,744)	(81,115)
Accounts payable - related party	86,485	60,704
Accrued expenses	463,293	96,870
NET CASH USED IN OPERATING ACTIVITIES	(1,369,832)	$ (558,835)
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid for purchase of fixed assets	$ (5,220)
Acquisition of Celtic Biotech		$ 2,955
Acquisition of Memcine, net of cash received of $27,071	$ (2,929)
Restricted cash	2,625	$ (53,285)
NET CASH USED IN INVESTING ACTIVITIES	$ (5,524)	(49,330)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings on short term debt		2,500
Proceeds from convertible debentures - related parties	$ 1,719,800	501,970
Proceeds from notes payable	(2,500)	(102,500)
Proceeds from sale of common shares	$ 190,000	225,000
Proceeds from related party advances		3,560
NET CASH PROVIDED BY FINANCING ACTIVITIES	$ 1,907,300	630,530
NET CHANGE IN CASH	531,944	22,365
Cash, at beginning of period	9,068	19,102
Cash, at end of period	541,012	41,467
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:
Interest paid	$ 28,750	$ 21,362
Income taxes paid
NON-CASH INVESTING AND FINANCING TRANSACTIONS
Debt discount for relative fair value of warrants attached to convertible debentures	$ 277,598	$ 265,495
Beneficial conversion feature for convertible debentures	999,310	236,475
Common shares issued for stock payable	269,705	$ 4,728,190
Warrants issued in satisfaction of warrants payable	385,351
Warrants issued for extinguishment of accounts payable - related party	$ 419,413
Common shares issued for deferred financing costs		$ 771,685
Common shares issued for convertible debentures		$ 118,113

DESCRIPTION OF BUSINESS AND BAS

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
NOTE 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION	Spotlight Innovation Inc. (the "Company") was organized under the laws of the state of Iowa on March 23, 2012 ("inception") under the name Spotlight InnovationLLC. In December 2013, the Company, through a reverse acquisition, merged with American Exploration Corporation ("American Exploration"). The Company was founded to identify, validate and finance healthcare-focused companies formed for the purpose of commercializing intellectual property developed by major centers of academia in the United States. The Company provides strategic partners the opportunity to participate in the financing of a preferred search for, acquisition of, and/or funding of companies holding licenses for the commercialization of intellectual property developed by academic institutions. The principals of the Company have been involved in all stages of the commercialization of healthcare intellectual property over the last eight years. On June 4, 2014, the Company, through its subsidiary, Celtic Biotech Iowa, Inc. ("Celtic Iowa"), entered into a share exchange agreement with Celtic Biotech, Ltd., an Irish Limited Company ("CBL"), to merge with and into CBL.. The primary intellectual property of CBL is an invention that relates to the compositions and methods combining snake venom toxin with chemotherapeutic agent(s) for cancer therapy. Celtic Iowa develops novel therapeutic products for the treatment of solid cancers and pain in humans. Derived from naturally specialized receptor-binding proteins, these products have the potential to reduce treatment costs, increase survivability, and improve the quality of life for cancer patients. On June 2, 2015, the Company concluded its purchase of 82.25% ownership interest in Memcine Pharmaceuticals, Inc., a Delaware corporation, ("Memcine") to provide for continued development of its Immunoplex™ vaccine platform technology, which is designed to use the body's own naturally occurring targeting system to deliver vaccine components to immune cells and stimulate a robust response. Memcine Pharmaceuticals has a licensing agreement for its technologies with the University of Iowa. The accompanying consolidated financial statements of Spotlight Innovation Inc. have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and the rules of the Securities and Exchange Commission ("SEC") and should be read in conjunction with the audited financial statements and notes thereto contained in the Company's latest Annual Report filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements that would substantially duplicate disclosures contained in the audited financial statements for the most recent fiscal year, as reported in the Form 10-K filed with the SEC on April 15, 2015, have been omitted.

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America 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 financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include those regarding the valuation of option and warrant transactions. Principles of Consolidation The consolidated financial statements include the Company's accounts, including those of the Company's subsidiaries Celtic Iowa and Memcine. During the year ended December 31, 2014, Celtic Iowa acquired 95% of the outstanding shares of CBL. During the three months ended September 30, 2015, the Company acquired an 82.25% interest in Memcine. Accordingly, the Company has consolidated CBL, Celtic Iowa, Inc. and Memcine. All significant intercompany accounts and transactions have been eliminated. Non-Controlling Interest The Company is required to report the non-controlling interests in CBL and Memcine as separate components of shareholders' equity. The Company is also required to present the consolidated net income and the portion of the consolidated net income allocable to the non-controlling interest and to the shareholders of the Company separately in its consolidated statements of operations. Losses applicable to the non-controlling interest are allocated to the non-controlling interest even when those losses are in excess of the non-controlling interest's investment basis. Loss per Common Share Basic loss per common share is computed by dividing the net loss attributable to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per share is computed by dividing the net loss attributable to common shareholders by the weighted-average number of common and common equivalent shares outstanding during the period. Common share equivalents included in the diluted computation represent shares issuable upon assumed exercise of stock options and warrants or the assumed conversion of convertible debt instruments, using the treasury stock and "if converted" method. For periods in which net losses are incurred, weighted average shares outstanding is the same for basic and diluted loss per share calculations, as the inclusion of common share equivalents would have an anti-dilutive effect. For the nine months ended September 30, 2015 and 2014, the dilutive effect of 5,200 and 5,200 options, 885,000 and 1,559,936 warrants, and 1,774,650 and 250,985 common shares issuable for conversion of convertible debt, respectively, were excluded from the diluted earnings per share calculation because their effect would have been anti-dilutive. Cash and Cash Equivalents The Company considers all highly liquid investments with maturity of three months or less when purchased to be cash equivalents. Concentrations of Credit Risk Financial instruments which potentially subject the Company to concentrations of credit risk include cash deposits placed with financial institutions. The Company maintains its cash in bank accounts which, at times, may exceed federally insured limits as guaranteed by the Federal Deposit Insurance Corporation ("FDIC"). As of September 30, 2015, the Company had $291,012 of cash balances that were uninsured. The Company has not experienced any losses on such accounts. Foreign exchange and currency translation For the nine months ended September 30, 2015 and 2014, the Company maintained cash accounts in U.S. dollars and European Union euros, and incurred certain expenses denominated in European Union euros. The Company's and its consolidated subsidiaries' functional and reporting currency is the U.S. dollar. Transactions denominated in foreign currencies are remeasured into U.S. dollars at exchange rates in effect on the date of the transactions. Assets and liabilities are remeasured using exchange rates at the end of each period. Exchange gains or losses on remeasurements are included in earnings. In the event that the functional currency of a Company's consolidated subsidiary was not the U.S dollar, then that subsidiary's foreign currency monetary assets and liabilities are translated into U.S. dollars at the current exchange rate and non-monetary assets and liabilities are translated using historical exchange rates. Such adjustments resulting from the translation process would be reported in a separate component of other comprehensive income and are not included in the determination of the results of operations. As of September 30, 2015 and 2014, the Company had no subsidiaries with functional currencies that required translation. In-Process Research and Development In-process research and development ("IPR&D") represents the estimated fair value assigned to research and development projects acquired in a purchased business combination that have not been completed at the date of acquisition and which have no alternative future use. IPR&D assets acquired in a business combination are capitalized as indefinite-lived intangible assets. These assets remain indefinite-lived until the completion or abandonment of the associated research and development efforts. During the periods prior to completion or abandonment, those acquired indefinite-lived assets are not amortized but are tested for impairment annually, or more frequently, if events or changes in circumstances indicate that the asset might be impaired. During periods after completion, those acquired indefinite-lived assets are amortized based on their useful life. During 2014, the Company acquired IPR&D assets in its acquisition of CBL. The fair value of the assets acquired was $7,119,423. These assets are still subject to research and development completion and accordingly, no amortization has been recorded. Equipment Equipment is stated at cost less accumulated depreciation and amortization. Maintenance and repairs are charged to expense as incurred. Renewals and betterments which extend the life or improve existing equipment are capitalized. Upon disposition or retirement of equipment, the cost and related accumulated depreciation are removed and any resulting gain or loss is reflected in operations. Depreciation is provided using the straight-line method over the estimated useful lives of the assets, which is 10 years. Impairment of Long-Lived Assets and Intangibles The Company performs impairment tests on its long-lived assets when circumstances indicate that their carrying amounts may not be recoverable. If required, recoverability is tested by comparing the estimated future undiscounted cash flows of the asset or asset group to its carrying value. If the carrying value is not recoverable, the asset or asset group is written down to fair value. For the three months ended September 30, 2015 and 2014, the Company recorded $0 in impairment to the Company's long-lived assets. Stock-Based Compensation The Company measures the cost of employee services received in exchange for stock and stock options based on the grant date fair value of the awards. The Company determines the fair value of stock option grants using the Black-Scholes option pricing model. The Company determines the fair value of shares of non-vested stock (also commonly referred to as restricted stock) based on the last quoted price of our stock on the date of the share grant. The fair value determined represents the cost for the award and is recognized over the vesting period during which an employee is required to provide service in exchange for the award. As share-based compensation expense is recognized based on awards ultimately expected to vest, the Company reduces the expense for estimated forfeitures based on historical forfeiture rates, if historical forfeiture rates are available. Previously recognized compensation costs may be adjusted to reflect the actual forfeiture rate for the entire award at the end of the vesting period. Excess tax benefits, if any, are recognized as an addition to paid-in capital. Income Taxes The Company utilizes the asset and liability method in accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for operating loss and tax credit carry-forwards and for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets unless it is more likely than not that the value of such assets will be realized. Fair Value of Financial Instruments The Company follows FASB ASC 820, Fair Value Measurement As defined in ASC 820, fair value, clarified as an exit price, represents the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As a result, fair value is a market-based approach that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering these assumptions, ASC 820 defines a three-tier value hierarchy that prioritizes the inputs used in the valuation methodologies in measuring fair value. Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Subsequent Events The Company evaluated subsequent events through the date when financial statements are issued for disclosure consideration. Recent Accounting Pronouncements There were various accounting standards and interpretations issued recently, none of which are expected to have a material effect on the Company's operations, financial position or cash flows

GOING CONCERN

GOING CONCERN	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
NOTE 3. GOING CONCERN	The Company is an early stage company and as such has not generated revenues from operations and there is no assurance of any future revenues. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. As of September 30, 2015, the Company has accumulated net losses of $14,749,025 and has a working capital deficit $4,999,732. These factors raise substantial doubt as to the Company's ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon the Company's successful efforts to raise sufficient capital and then attain profitable operations. Management is investigating all options to raise enough funds to meet the Company's working capital requirements through either the sale of the Company's common stock or other financings. There can be no assurances, however, that management will be able to obtain sufficient additional funds when needed, or that such funds, if available, will be obtained on terms satisfactory to the Company.

ACQUISITIONS

ACQUISITIONS	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
NOTE 4. ACQUISITIONS	Memcine On June 2, 2015, the Company acquired 82.25% of the ownership in Memcine for $30,000. The following table summarizes the allocation of the purchase price to the net assets acquired: Fair value at June 2, 2015 Cash $ 27,071 Property, plant and equipment 18,071 IPR&D 142,076 Total assets 187,218 Accounts payable and accrued liabilities (854 ) Deferred liabilities (150,000 ) Total liabilities (150,854 ) Net assets acquired $ 36,364 The Company recorded the 17.75% non-controlling interest in Memcine at a fair value of $6,364. Memcine had immaterial activity during the nine months ended September 30, 2014 and the period from January 1, 2015 through June 2, 2015. Accordingly, the Company has not presented pro forma information for the acquisition as the impact to the Company's operations was deemed immaterial. In late second quarter 2015 the Company employed Capital Rx Consulting to complete an independent valuation of the potential value of Memcine, once the Immunoplex platform reaches human clinical trials. Based upon their results the range of value for the Immunoplex Platform is between a best case scenario of $27.9 million and worst case scenario $3.9 million with a mid-point of $12.8 million. The worst case assumes that reaching human clinical trials takes longer than 5 year. The financial statements as presented here do not reflect any valuation based upon this study. CBL In June 2014, the Company, through its wholly-owned subsidiary Celtic Iowa, entered into a share exchange agreement with CBL. Celtic Iowa issued 474,419 shares of its Preferred B Stock, par value of $5.00 per share. In exchange, the Company received shares equal to 95% of the total outstanding shares of CBL. As there is no existing market for the preferred shares of Celtic Iowa, the Company used the fair value of the acquired net assets of CBL to determine the purchase price. The following table summarizes the allocation of the purchase price to the net assets acquired: Fair value at June 4, 2014 Cash $ 1,656 Accounts receivable – related party 1,349 Property, plant and equipment 9,000 IPR&D 6,977,347 Total assets 6,989,352 Accounts payable and accrued liabilities (242,693 ) Short-term debt – related party (204,186 ) Total liabilities (446,879 ) Final Purchase price $ 6,542,473 The Company recorded the 5% non-controlling interest in CBL at a fair value of $327,124. The preferred shares issued are convertible into common shares of Celtic Iowa on a one for one basis in the event of a Deemed Liquidation Event (as defined in the Certificate of Designation) and are redeemable at the Company's option in five years at the stated par value of $5 per share. The preferred shares have preferential rights to the net assets of Celtic Iowa in the case of liquidation up to the par value of the stock. While the Company maintains voting control through the common stock of Celtic Iowa and controls management decisions of Celtic Iowa, the Company's rights to the net assets are subordinated to the preferred stock until the net assets of the Company exceeds $2,372,078. As a result, the Company has recorded non-controlling interest in Celtic Iowa of $2,372,078, which is the value attributed to the Preferred B stock issued by Celtic Iowa net of the non-controlling interest in CBL. The Preferred Stock of Celtic Iowa is eliminated in consolidation. CBL had immaterial activity during the nine months ended September 30, 2014. Accordingly, the Company has not presented Pro forma information for the acquisition as the impact to the Company's operations was deemed immaterial.

NOTES PAYABLE

NOTES PAYABLE	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
Note 5 - NOTES PAYABLE	On December 16, 2013, the Company assumed the liabilities of American Exploration which included the following notes payable to unrelated third parties: Date Stated Original of Interest Principal Due Promissory Note Note Rate Amount Date Default #1 05/29/09 10 % $ 30,000 On Demand No #2 06/05/09 10 % $ 7,698 On Demand No #3 08/16/09 10 % $ 50,000 On Demand No #4 09/27/10 10 % $ 60,000 On Demand No #5 06/02/10 5 % $ 50,000 On Demand No #6 02/04/11 5 % $ 30,000 On Demand No #7 05/04/11 5 % $ 35,000 On Demand No #8 08/11/11 10 % $ 20,000 On Demand No #9 12/05/11 10 % $ 20,000 On Demand No #10 04/28/12 10 % $ 30,000 On Demand No The Company also assumed $92,923 in accrued interest related to these notes. The Company recorded $21,540 and $21,533 in interest expense for the nine months ended September 30, 2015 and 2014, respectively, on the above notes payable. The Company also assumed a liability for previous advances made by American Exploration's former CEO in the amount of $23,433. During the nine months ending September 30, 2015, the Company repaid $2,500 of these advances. These advances are due on demand and do not bear interest. During the nine months ended September 30, 2014, the Company received advances from a third party in the amount of $2,500. These advances were due on demand and did not bear interest, and have been repaid as of September 30, 2015. As of September 30, 2015 and through the date of these financial statements, the Company has not received any demand notice from the lenders noted above for payment of principal or interest on these notes payable.

CONVERTIBLE INSTRUMENTS

CONVERTIBLE INSTRUMENTS	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
NOTE 6. CONVERTIBLE INSTRUMENTS	Kopriva Note On September 27, 2013, the Company entered into a convertible note (the "Kopriva Note") in the amount of $40,000 from an investor. The term of the Kopriva Note is fifteen months from commencement. During the term of the Kopriva Note, interest shall accrue on the unpaid principal balance at a fixed rate equal to 10% per annum, compounded annually. Should the Company default on the Kopriva Note, the outstanding balance of the Kopriva Note shall bear interest at the default rate of 20% per annum, compounded annually. In addition to the interest accrued the holder received warrants to purchase up to 100,000 shares of common stock. The conversion feature of the Kopriva Note and the exercise price of the warrants is the greater of (i) a discount of 40% to the 20 day average closing market price prior to the day that the warrant is executed or (ii) $0.20 per share. The warrants will have a term of thirty-six (36) months from the date of repayment or conversion of the Kopriva Note. The relative fair value of the warrants issued on the date of grant was $25,136 and was recorded as a debt discount on the Kopriva Note. In connection with the Kopriva Note, the conversion feature was also analyzed for a beneficial conversion feature at which time it was concluded that a beneficial conversion feature existed. The Company recorded a debt discount of $14,864 for the fair value of the beneficial conversion feature. The Company amortized the combined debt discounts from the warrants and beneficial conversion feature over the term of the Kopriva Note. On December 19, 2014, the Company entered an agreement to extinguish the Kopriva Note and its accrued interest in exchange for 100,002 shares of common stock. This agreement modified the terms of the conversion which resulted in the holder receiving more shares. As a result of the modification of the conversion feature, the Company determined that the change in the fair value of the conversion feature was greater than 10% and accordingly, recorded $120,085 as a loss on debt extinguishment which was the difference in fair value of the new conversion feature and the carrying value of the Kopriva Note and accrued interest on the date of modification. The Company recorded the issuance of the common stock on conversion at its fair value of $165,003 based on the market price on the date of grant. Convertible Debt Associated with Line of Credit On April 4, 2014, the Company entered into a line of credit (the "Line of Credit") with Denver Savings Bank in the principal amount of $752,325. The Line of Credit provides that the Company can borrow up to the aforementioned principal amount from the bank until April 1, 2017, subject to the borrowing occurring as prescribed by the Security and Loan Agreement as described below. Interest accrues at the rate of 4.25% per year. The loan is repayable on demand, but if no demand is made, then quarterly payments of accrued interest calculated on the amount of credit outstanding. As security for the Line of Credit a third party (the "Cosigner") cosigned the Line of Credit, and pledged certain collateral. In exchange for this pledge, the Company issued to the Cosigner 150,000 shares of common stock of the Company, and agreed to issue 30,000 shares of its common stock upon each one year anniversary of the Line of Credit, provided that the Line of Credit remains in effect. The shares of common stock had a fair value of $183,000 based on the market price on the date of grant and have been recorded as interest expense. On April 4, 2014, the Cosigner and three third parties entered into a Security and Loan Agreement (the "SLA"). The SLA ensures that the Cosigner will be fully remunerated should the Company default on the Line of Credit. The SLA provides a guaranty to the Cosigner from the three third parties, which have pledged to repay any outstanding amounts on the Line of Credit should the Company default on the Line of Credit. The Company may request draw downs on the Line of Credit at any time. Once a request is made, the Cosigner withdraws the funds and issues them to the third parties. The third parties will then loan the Company the funds from the Line of Credit and the Company issues convertible promissory notes (the "Convertible Notes"). As the Company is both obligated to the Bank, as primary obligor, and to the third parties through the Convertible Notes, the Company has recorded liabilities on both obligations. The amounts attributable to the Line of Credit directly are recorded as non-cash interest expense. As of September 30, 2015, the Company had borrowed $752,325 through the Line of Credit, and issued Convertible Notes with the third parties in the amount of $752,325. The Convertible Notes accrue interest at 20.5% per annum and mature in six months from the dates of issuance. The Company received $572,220 in net proceeds from the Convertible Notes, net of debt service, expense fees and legal fees. These fees were recorded as a debt discount on the Convertible Notes. The Convertible Notes also contain a conversion feature which allows the Company to convert the Convertible Notes into shares of the Company's common stock. The conversion price is the lower of 50% of the prior 20 days average market price on the date of conversion, or $0.50 per share. However, in no event will the conversion price be lower than $0.25 per shares. The Company analyzed the Convertible Notes for a beneficial conversion feature. As a result of the in-the-money conversion price, the Company determined that a beneficial conversion feature did exist and recorded a debt discount of $186,869. Pursuant to the Convertible Notes, the Company issued warrants to purchase 752,325 shares of common stock of the Company at an exercise price equal to the lower of: (i) 50% of the prior 20 days average market price on the date of exercise, or (ii) $0.50 per share. However, in no event will the exercise price be lower than $0.25 per share. The warrants have a term of three years. The Company calculated the relative fair value of the warrants using the Black-Scholes model at $385,351, which was recorded as a debt discount to the Convertible Notes. All notes were due on December 31, 2014 and are now in default. The Company has not received a notice of default or demand for repayment from the lenders as of the date of this filing. Additional Convertible Notes Associated with Additional Line of Credit On July 29, 2014, the Company entered into an agreement with a third party individual to guarantee an additional line of credit (the "Additional Line of Credit") in the amount of $250,000 with Denver Savings Bank. The Company may request draw downs on the Additional Line of Credit at any time. In exchange for the guarantee, the Company issued 42,300 shares of its common stock to the Individual. The shares of common stock had a fair value of $33,840 based on the market price on the date of grant and have been recorded as deferred financing costs. The Individual and three third parties entered into a Security and Loan Agreement (the "Additional SLA"). The Additional SLA ensures that the Individual will be fully remunerated should the Company default on the Additional Line of Credit. The Additional SLA provides a guaranty to the Individual from the three third parties, which have pledged to repay any outstanding amounts on the Additional Line of Credit should the Company default on the Additional Line of Credit. As of September 30, 2015, $135,000 has been drawn on the Additional Line of Credit. Once a request is made, the Individual withdraws the funds and issues them to the third parties. The third parties then loan the Company the funds from the Line of Credit and the Company issues convertible promissory notes (the "Additional Convertible Notes"). The third party guarantors require the Company to repay all funds drawn under the Additional Line of Credit to the bank in addition to the obligation to pay the guarantors for the principal amount of the convertible notes. As the Company is both obligated to the Bank, as a cosigner to the Additional Line of Credit and to the third parties through the Additional Convertible Notes, the Company has recorded liabilities on both obligations. The Company has entered into Additional Convertible Notes with the third parties in the amount borrowed. The Additional Convertible Notes accrue interest at 20.5% per annum and mature in six months from the dates of issuance. The Convertible Notes contain a conversion feature which allows the Company to convert the Additional Convertible Notes into shares of the Company's common stock. The conversion price is the lower of 50% of the prior 20 days average market price on the date of conversion, or $0.50 per share. However, in no event will the conversion price be lower than $0.25 per share. The Company analyzed the Convertible Notes for a beneficial conversion feature. As a result of the in-the-money conversion price, the Company determined that a beneficial conversion feature did exist and recorded a debt discount of $31,815. Pursuant to the Additional Convertible Notes, the Company issued warrants to purchase 135,000 shares of common stock of the Company at an exercise price equal to the lower of: (i) 50% of the prior 20 days average market price on the date of exercise, or ii) $0.50 per share. However, in no event will the exercise price be lower than $0.25 per share. The warrants have a term of three years. The Company calculated the relative fair value of the warrants using the Black-Scholes model at $67,985, which was recorded as a debt discount to the Convertible Notes. The Company is amortizing the combined debt discounts from the original issue discounts, warrants and beneficial conversion feature over the term of the Convertible Notes and Additional Convertible Notes. The Company recorded interest expense of $269,844 related to the amortization of the debt discounts for the nine months ended September 30, 2015. The Company also recorded $156,247 in interest expense for the nine months ended September 30, 2015. Greig Companies Note On March 27, 2015, the Company entered into a convertible note (the "Greig Note") in the amount of $2,500,000 with a related party investor and received proceeds of $1,620,000, net of debt service, origination fee and legal fees. The term of the Greig Note is 60 months from commencement. During the term of the Greig Note, interest shall accrue on the unpaid principal balance at a rate equal to the prime rate plus five percentage points per annum, compounded annually, for the first 36 months; and prime rate plus six percentage points in the last 24 months. Should the Company default on the Greig Note, the outstanding balance of the Greig Note shall bear interest at the default rate of two additional percentage points per annum, compounded annually. The Company issued warrants to purchase 250,000 and 300,000 shares of the Company's common stock to K4, LLC and The Grieg Companies, respectively, as consideration for entering into the convertible note. The warrants have an exercise price equal to 50% of the 20 day average closing market price of the Company's common stock prior to the date of exercise, provided that the exercise price shall not be below $1.50 per share. The Greig Note also contains a conversion feature that allows the investor to convert the unpaid principal and accrued interest into shares of the Company's common stock at a price of $1.50 per share. The warrants will have a term of 36 months from the date of repayment or conversion of the Greig Note. The relative fair value of the warrants issued on the date of grant was $652,504 and was recorded as a debt discount on the Greig Note. As of September 30, 2015, the Company has recorded the relative fair value as a warrant payable. The Company analyzed the Greig Note for a beneficial conversion feature. As a result of the in-the-money conversion price, the Company determined that a beneficial conversion feature did exist and recorded a debt discount of $967,496. The Company is amortizing the combined debt discounts from the original issue discounts, warrants and beneficial conversion feature over the term of the Convertible Notes. The Company accrued interest expense of $105,668 and recorded amortization of the debt discount as interest expense for $57,345 during the nine months ended September 30, 2015.

DEFERRED LIABILITIES

DEFERRED LIABILITIES	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
Note 7. DEFERRED LIABILITIES	In September 2012, Memcine received financial assistance from Iowa Economic Development Authority ("IEDA"). Memcine entered into an agreement with IEDA, whereby IEDA would provide $150,000 in cash proceeds to Memcine in exchange for a 2% royalty on future gross revenues of Memcine to be paid to IEDA as repayment for the financial assistance. Total royalties to be paid will be $225,000 and the payment terms are on a semi-annual basis. To date Memcine has not produced any revenues and has not been obligated to make repayment of the financial assistance. The contract also includes an acceleration clause which would require the Company to make a lump sum repayment of the financial assistance plus accrued interest at 6% per annum beginning from the date the proceeds were disbursed to Memcine should any of the following occur: a) Memcine issues an initial public offering b) Memcine relocates outside of the state of Iowa c) Memcine sells 51% or more of the company's assets or the company As a condition to the acquisition by the Company, Memcine applied and was granted a waiver of the acceleration clause. Accordingly, the future repayment obligation is recorded as a long term deferred liability .

INCOME TAXES

INCOME TAXES	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
NOTE 8. INCOME TAXES	Realization of deferred tax assets is dependent upon sufficient future taxable income during the period that deductible temporary differences and carry-forwards are expected to be available to reduce taxable income. At September 30, 2015, the Company's deferred tax assets consisted primarily of net operating loss carry forwards acquired from American Exploration in the merger. For the three months ended September 30, 2015, the material reconciling items between the tax benefit computed at the statutory rate and the actual benefit recognized in the financial statements consisted of expenses related to share-based compensation and the change in the valuation allowance during the applicable period. At September 30, 2015, the Company has recorded a 100% valuation allowance as management believes it is likely that any deferred tax assets will not be realized. As of September 30, 2015, the Company had a net operating loss carry forward of approximately $11.8 million, which will expire between years 2028 and 2035. Due to the change in ownership provisions of the Tax Reform Act of 1986, the net operating loss carry forwards are expected to be subject to significant annual limitations for the change in ownership that resulted in the Company's merger with American Exploration, Inc. in the year ended December 31, 2013.

EQUITY

EQUITY	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
Note 9. EQUITY	The Company has authorized the issuance of 500,000 shares of Series A preferred stock, 500,000 shares of Series C preferred stock, 4,000,000 shares of other preferred stock and 4,000,000,000 shares of other common stock. COMMON STOCK 2015 Issuances On January 5, 2015, the Company issued 33,334 shares of common stock for a subscription received in December 2014. The subscription consisted of 33,334 shares of common stock and 12,500 warrants to purchase one share of common stock for each warrant, for net cash proceeds of $25,000. The warrants have an exercise price of $1.25 per share and expire three years after the date of issuance. The relative fair value of the common stock was $13,702 and was recorded as a stock payable as of December 31, 2014. As of March 31, 2015, the warrants remain unissued. In January 2015, the Company issued 157,000 shares of its common stock to settle stock payables in an amount of $256,002. On February 3, 2015, the Company issued 25,000 shares of its common stock to a consultant with a professional services agreement. The shares were valued at $41,250, based on the market price on the date of grant and were recorded as compensation expense. On February 28, 2015, the Company entered into a stock for services agreement with Michael Reysack, the Company's Investor Relations Officer, to issue 156,139 shares of common stock for services. The fair value of these shares was $257,629 based on the market price on the date of grant. In February 2015, the Company issued several subscription units that consisted of common stock and warrants. The Company received subscriptions to acquire 113,335 shares of common stock and 42,500 warrants to purchase one share of common stock for each warrant, for net cash proceeds of $85,000. The warrants have an exercise price of $1.25 per share and expire three years after the date of issuance. On April 3, 2015, the Company received a subscription for 140,000 shares of common stock and warrants to purchase 52,500 shares of common stock for each warrant, for net cash proceeds of $105,000. The warrants have an exercise price of $1.25 per share and expire three years of the date of issuance. The relative fair value of the warrants calculated based on the Black-Scholes model was $40,368. On April 28, 2015, the Company issued 30,000 shares of common stock to a third party in conjunction with the annual line of credit fee with Denver Savings Bank. The shares were valued at $37,500, based on the market price on the date of grant and will be recorded as interest expense. On April 28, 2015, the Company issued 2,600 shares of common stock to a third party in conjunction with a professional services agreement entered into on December 19, 2014. The shares were valued at $3,250, based on the market price on the date of grant and is recorded as compensation expense. On June 6, 2015, the Company issued 25,000 shares of common stock to a third party in conjunction with a professional services agreement entered into on December 19, 2014. The shares were valued at $31,250, based on the market price on the date of grant and is recorded as compensation expense. On June 23, 2015, the Company issued 500,000 shares of common stock to a third party in conjunction with a professional services agreement. The shares were valued at $525,000, based upon he market price on the date of grant and is recorded as compensation expense. Options We have one equity compensation plan, the Spotlight Innovation Inc. 2009 Stock Option Plan. A summary of the stock option activity for the nine months ended September 30, 2015 is presented below. Options Weighted-Average Exercise Price Aggregate Intrinsic Value Outstanding December 31, 2014 5,200 $ 359.04 $ - Granted - - - Exercised - - - Expired - - - Outstanding September 30, 2015 5,200 $ 359.04 $ - Exercisable September 30, 2015 5,200 $ 359.04 $ - Warrants During the nine months ended September 30, 2015, the Company received subscriptions to acquire 113,335 shares of common stock and 42,500 warrants to purchase one share of common stock each, for net cash proceeds of $85,000. The warrants have an exercise price of $1.25 per share, and expire three years of the date of issuance. The relative fair value of the warrants based on the Black-Scholes model was $38,413. As of September 30, 2015, the Company has recorded the relative fair value as a warrant payable. The Company issued warrants to purchase 135,000 shares of common stock in conjunction with the Additional Convertible Notes during January 2015. The exercise price is equal to the lower of: (i) 50% of the prior 20 days average market price on the date of exercise, or ii) $0.50 per share. However, in no event will the exercise price be lower than $0.25 per share. The warrants have a term of three years. The relative fair value of the warrants based on the Black-Scholes model was $67,985. The Company granted warrants to purchase 250,000 and 300,000 shares of common stock to related parties in conjunction with a convertible note dated March 27, 2015. The warrants have an exercise price of $1.50 per share, and expire thirty-six (36) months from the date of repayment or conversion of the convertible note. The relative fair value of the warrants based on the Black-Scholes model was $652,504. As of September 30, 2015, the Company had issued warrants to purchase 300,000 common shares and recorded the relative fair value of the unissued warrants of $277,598 as a warrant payable. On March 30, 2015, the Company issued warrants to purchase 359,620 shares of common stock to a related party in conjunction with a settlement of an outstanding payable in the amount of $419,413. The warrants have an exercise price of $1.25 per share, and expire five years from the date of issuance. The fair value of the warrants based on the Black-Scholes model was $449,398. Accordingly, the Company recorded a loss on extinguishment of debt of $29,984. As of September 30, 2015, the Company has recorded the relative fair value as a warrant payable. On June 3, 2015, the Company issued warrants to purchase 200,000 shares of common stock to an unrelated third party in conjunction to a services agreement. The warrants were priced at $1.25 per share and expire in 1.7 years from issuance. The fair value of the warrants based upon the Black-Scholes model is $246,830. On June 23, 2015, the Company issued warrants to purchase 1,000,000 shares of common stock to an unrelated party in conjunction to a services agreement. The warrants have an exercise price of $1.25 per share, and expire in 2.2 years from issuance. The fair value of the warrants based upon the Black-Scholes model is $1,043,457. The fair value of the above warrants was determined by using the Black-Scholes option-pricing model. Variables used in the model for the warrants issued include: i) discount rates ranging from 1.07% to 1.42%; ii) expected terms ranging from 3.00 to 5.00 years; iii) expected volatility ranging from 328.77% to 406.58%; iv) zero expected dividends and v) stock price of $1.25 to $1.65. During the nine months ended September 30, 2015, the Company issued 862,500 warrants that were granted in the year ended December 31, 2014 and were recorded as a warrant payable. The Company recorded $561,573 in additional paid-in capital for the issuance of the warrants in satisfaction of the warrants payable. There are currently 2,159,620 warrants that the Company has not issued as of September 30, 2015. The fair value of these warrants was $2,402,513. A summary of the warrant activity for the nine months ended September 30, 2015 is presented below: Warrants Weighted-Average Exercise Price Aggregate Intrinsic Value Outstanding December 31, 2014 1,364,171 $ 1.40 $ - Granted 964,531 1.25 - Exercised - - - Expired/cancelled (100,000 ) $ 1.29 - Outstanding September 30, 2015 2,228,702 $ 1.94 - Exercisable September 30, 2015 2,228,702 $ 1.94 $ - The weighted average remaining contractual term of the outstanding warrants and exercisable warrants as of September 30, 2015 was 3.27 years.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
NOTE 10. COMMITMENTS AND CONTINGENCIES	On June 4, 2014, the Company entered into a series of agreements related to an equity arrangement for the sole purpose of funding acquisitions. The Company issued 1,051,200 Convertible Series A Preferred stock for $41,418,000 to nine investors, through a private placement of 900 Units (the "Securities") consisting of 1,051,200 shares of Convertible Series A Preferred Stock (convertible into common shares of the Company) and warrants to purchase 413,964,900 common shares of the Company. The warrants have exercise prices from $0.25 to $0.7035 per share and terms of four to six years. The Company can receive up to $165,681,009 if all the warrants are exercised. The Convertible Series A Preferred stock may convert into common shares of the Company at a rate of 1 share of Series A Preferred stock for 100 shares of common stock and must be converted within three years. Under the terms of the Unit Subscription Agreement ("USA"), the Investors' cash of $41,418,000 ($46,020 per Unit sold) has been deposited in a restricted account with an Intermediary, whereby an Account Management Agreement ("AMA") between the Investors, the Company, and the Intermediary governs the release of funds to the Company from the restricted account. The Company has placed with the Intermediary, the Securities to be released to the investors at the same time and ratio as the funds are released to the Company upon each closing (as defined in the USA). The Company will record the fair value of the Securities as they are issued to the investors by the Intermediary. The restricted cash will be released to the Company with the approval of the Investors. A request first must be made to the Investors' representative along with a Use of Proceeds ("UOP") and, after review and approval by Investors' representative, will the funds be released. There are 36 planned periodic installments pursuant to the AMA schedule, which have already been approved by the Company and the Investors. The release of funds is based upon trading volumes at or above a minimum bid price which will cause a release of a percentage of each periodic "Breakout" funds to the Company. There are provisions within the agreement which address release of funds to the Company in the event that: 1.) trading volume is below the minimums, and 2.) average bid prices are above or below the minimums. As of September 30, 2015, the Company has not had any funds released to it. As such, the Securities are still in escrow. The Company, through its subsidiary Celtic Biotech Iowa, Inc., entered into a license agreement to license technology for novel therapy for chronic kidney disease owned by Zheng-Hong Qin of Wilmington, Massachusetts. The agreement provides for a 7% royalty payment on all net sales related to the licensed therapies. As of September 30, 2015, no sales have been made. On December 3, 2014, the Company signed a Memorandum of Understanding with Black Swan, LLC to provide certain government relations and related services. The MOU provides for compensation to Black Swan of a monthly cash retainer as well as a grant of 150,000 common shares at a date that is mutually agreed upon by the parties: (1) A monthly retainer, the amount and duration of which to be determined, but in any event a total of $7,500 shall be paid to Black Swan for initial work during the period ending December 31, 2014 ($3,750 of which has previously been paid by the Company to Black Swan); (2) A grant of equity in the amount of 150,000 shares, or the equivalent options with a strike price of $1.00, or other functionally equivalent interest in the Company with a current market value of $250,000; and (3) An increase in the monthly retainer or a bonus payment equal to 10% of private money and 6% of public money received by the Company or its subsidiaries through introductions provided by Black Swan to the Company. On December 19, 2014, the Company entered into an agreement with a third party to provide investor relations consulting services. The Company agreed to issue 30,000 shares of restricted common stock at the time of the agreement and up to 150,000 additional shares based on milestones achieved by the consultant. In addition, the Company agreed to issue warrants to purchase 100,000 shares of common stock for a term of three years and an exercise price of $1.29 per share. The fair value of these warrants was $164,924. As of December 31, 2014, the consultant had achieved one of the milestones and was due an additional 25,000 shares. The fair value of the 55,000 shares of common stock to be issued to the consultant was $91,000 based on the market price on the dates of grant which was recorded as a stock payable at December 31, 2014. During the three months ended March 31, 2015, the consultant met an additional milestone which required the Company to issue 25,000 shares of common stock. The shares were valued at $41,250 based on the market price on the date grant. All of the shares earned by the consultant were issued in January and February of 2015. On April 29, 2015, the consulting agreement was mutually terminated. As a result of the termination of the agreement, 100,000 warrants were cancelled. On April 29, 2015, the Company entered into a three-year consulting agreement with Sundrop Consulting, Inc. ("Sundrop") and agreed to compensate Sundrop as follows: $10,669 per month; 25,000 shares of common stock upon execution of the agreement; a warrant to purchase 100,000 shares of the Company's common stock at $1.29 per share with an expiration date of December 19, 2017. In addition, the Company agreed to pay a bonus of $300,000 in cash and 500,000 shares of common stock if the Company receives $10 million in financing through the efforts of Sundrop; a bonus of $100,000 in cash and 300,000 shares of common stock if the Company achieves a listing of its securities on the New York Stock Exchange or Nasdaq; and a bonus of $750,000 in cash and 1.5 million shares of common stock if the Company receives $40 million in financing through the efforts of Sundrop. On June 23, 2015, the Company amended the agreement with Sundrop as follows: a) the Company will compensate Sundrop $10,669 per month in bi-weekly installments of $5,334. B) bonus provision, Company will issue 500,000 shares of Common Stock at the signing of the agreement with an additional 500,000 issued at the one year anniversary of the agreement and 500,000 issued at the two year anniversary of the agreement providing the agreement remains in effect, c) Sundrop is issued warrants for the right to purchase 1,000,000 shares of common stock at $1.25 per share, adjusted for any stock splits payable in cash to the Company, with the warrants expiring on December 19, 2017, d) an annual raise of $10,000 for every one million dollars in financing received by the Company during the term of the agreement. On July 1, 2015, Celtic Biotech Iowa received a communication from Instituto Buhtantan indicating that they have licensed its patent application entitled "Methods, kits and compositions comprising crotamine", among other patent applications and patents, which are now in the name of Research Support Foundation of the State of Săo Paulo – FAPESP. Celtic Biotech Iowa has agreed to pay $15,000 upon receipt of an invoice and an additional $15,000 sixty days thereafter. On July 1, 2015, the Company entered into an agreement with DAK Capital, LLC to provide investment banking and capital advisory services in connection with the Company's efforts to raise capital and with respect to such other matters as to which the Company and DAK may agree. The agreement has a minimum term of six months and a monthly non-refundable payment of $10,000 to DAK. In the event that DAK completes a transaction for the benefit of the Company of at least $10 million during this six-month term, the agreement is automatically extended for eighteen additional months. Each transaction is subject to payment of a success fee of 8% to DAK, as well as warrants equal to the amount of the transaction, each with a term of five years. On July 14, 2015, CBL entered into a clinical agreement with Immunoclin, Ltd., a United Kingdom corporation, to carry out the phase 1b (and potentially phase 2) trial of the drug Crotoxin. The agreement calls for Celtic Iowa to pay to Immunoclin, Ltd. 525,330 Euro, (approximately $584,908) over the period of the trial, which is expected to last 18 months.

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
Note 11. RELATED PARTY TRANSACTIONS	As a result of the acquisition of CBL, the Celtic Biotech Iowa, Inc. assumed two short-term notes payable due to a related party. The debts are denominated in Euros, and on June 4, 2014, the date of acquisition, the carrying amount of the debts were $204,186 after foreign currency remeasurement. The notes accrue compounded interest at 5% per annum and were due in November and December 2014. As of September 30, 2015, these notes were still outstanding and the carrying value of the notes was $166,410, resulting in the Company recording 16,690 in gain on foreign currency remeasurement. The Company has negotiated an extension of the due date to December 31, 2015 for the note that was due in December 2014. On March 30, 2015, the Company entered into an agreement with Catwalk Capital, LLC to settle outstanding fees due to Catwalk. To settle a balance of $491,881, the Company agreed to pay $72,467 in cash and the Company granted Catwalk 359,620 warrants to purchase common shares of the Company at $1.25 per share, expiring five years after date of issuance. The fair value of the warrants based on the Black-Scholes model was $449,398. Accordingly, the Company recorded a loss on extinguishment of debt of $29,984. On March 30, 2015, the Company entered into a consulting agreement with The Greig Companies, whose principal is a significant shareholder of the Company. The consultant will provide corporate and strategic growth advisory services. The Company has agreed to pay the consultant a $10,000 monthly fee with an additional per diem reimbursement of $1,250 for days traveling. The term of the contract is three years. In August 2015, the Company terminated this agreement.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
Note 12. SUBSEQUENT EVENTS	On October 19, 2015 the Company entered into an exclusive service agreement with Steve Katz and Associates, Inc. ("Katz") where Katz will assist the company in refining commercialization strategy, acquisition strategy, raising capital and define a strategy to move to a NASDAQ listing. The Company will compensate Katz at a rate of $425 per hour billed monthly by invoice, and will pay a $5,100 retainer. The Company will also reimburse Katz for all travel expense incurred in relation to this agreement. The is cancelable by either party at anytime On November 4, 2015, the Company formed a new subsidiary, CDT Veterinary Therapeutics Inc. The new subsidiary was established to develop the veterinary applications of certain products in the Celtic Biotech pipeline. The regulatory pathway for animal drugs is not as arduous as that of human therapeutics because the trial phase is shorter. It therefore represents an opportunity to reach the marketplace in a shorter timeframe. In this way, each entity can focus on its' target space without diluting the overall effort.

SUMMARY OF SIGNIFICANT ACCOUN18

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	9 Months Ended
	Sep. 30, 2015
Summary Of Significant Accounting Policies Policies
Use of Estimates	The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America 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 financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include those regarding the valuation of option and warrant transactions.
Principles of Consolidation	The consolidated financial statements include the Company's accounts, including those of the Company's subsidiaries Celtic Iowa and Memcine. During the year ended December 31, 2014, Celtic Iowa acquired 95% of the outstanding shares of CBL. During the three months ended September 30, 2015, the Company acquired an 82.25% interest in Memcine. Accordingly, the Company has consolidated CBL, Celtic Iowa, Inc. and Memcine. All significant intercompany accounts and transactions have been eliminated.
Non-Controlling Interest	The Company is required to report the non-controlling interests in CBL and Memcine as separate components of shareholders' equity. The Company is also required to present the consolidated net income and the portion of the consolidated net income allocable to the non-controlling interest and to the shareholders of the Company separately in its consolidated statements of operations. Losses applicable to the non-controlling interest are allocated to the non-controlling interest even when those losses are in excess of the non-controlling interest's investment basis.
Loss per Common Share	Basic loss per common share is computed by dividing the net loss attributable to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per share is computed by dividing the net loss attributable to common shareholders by the weighted-average number of common and common equivalent shares outstanding during the period. Common share equivalents included in the diluted computation represent shares issuable upon assumed exercise of stock options and warrants or the assumed conversion of convertible debt instruments, using the treasury stock and "if converted" method. For periods in which net losses are incurred, weighted average shares outstanding is the same for basic and diluted loss per share calculations, as the inclusion of common share equivalents would have an anti-dilutive effect. For the nine months ended September 30, 2015 and 2014, the dilutive effect of 5,200 and 5,200 options, 885,000 and 1,559,936 warrants, and 1,774,650 and 250,985 common shares issuable for conversion of convertible debt, respectively, were excluded from the diluted earnings per share calculation because their effect would have been anti-dilutive.
Cash and Cash Equivalents	The Company considers all highly liquid investments with maturity of three months or less when purchased to be cash equivalents.
Concentrations of Credit Risk	Financial instruments which potentially subject the Company to concentrations of credit risk include cash deposits placed with financial institutions. The Company maintains its cash in bank accounts which, at times, may exceed federally insured limits as guaranteed by the Federal Deposit Insurance Corporation ("FDIC"). As of September 30, 2015, the Company had $291,012 of cash balances that were uninsured. The Company has not experienced any losses on such accounts.
Foreign exchange and currency translation	For the nine months ended September 30, 2015 and 2014, the Company maintained cash accounts in U.S. dollars and European Union euros, and incurred certain expenses denominated in European Union euros. The Company's and its consolidated subsidiaries' functional and reporting currency is the U.S. dollar. Transactions denominated in foreign currencies are remeasured into U.S. dollars at exchange rates in effect on the date of the transactions. Assets and liabilities are remeasured using exchange rates at the end of each period. Exchange gains or losses on remeasurements are included in earnings. In the event that the functional currency of a Company's consolidated subsidiary was not the U.S dollar, then that subsidiary's foreign currency monetary assets and liabilities are translated into U.S. dollars at the current exchange rate and non-monetary assets and liabilities are translated using historical exchange rates. Such adjustments resulting from the translation process would be reported in a separate component of other comprehensive income and are not included in the determination of the results of operations. As of September 30, 2015 and 2014, the Company had no subsidiaries with functional currencies that required translation.
In-Process Research and Development	In-process research and development ("IPR&D") represents the estimated fair value assigned to research and development projects acquired in a purchased business combination that have not been completed at the date of acquisition and which have no alternative future use. IPR&D assets acquired in a business combination are capitalized as indefinite-lived intangible assets. These assets remain indefinite-lived until the completion or abandonment of the associated research and development efforts. During the periods prior to completion or abandonment, those acquired indefinite-lived assets are not amortized but are tested for impairment annually, or more frequently, if events or changes in circumstances indicate that the asset might be impaired. During periods after completion, those acquired indefinite-lived assets are amortized based on their useful life. During 2014, the Company acquired IPR&D assets in its acquisition of CBL. The fair value of the assets acquired was $7,119,423. These assets are still subject to research and development completion and accordingly, no amortization has been recorded.
Equipment	Equipment is stated at cost less accumulated depreciation and amortization. Maintenance and repairs are charged to expense as incurred. Renewals and betterments which extend the life or improve existing equipment are capitalized. Upon disposition or retirement of equipment, the cost and related accumulated depreciation are removed and any resulting gain or loss is reflected in operations. Depreciation is provided using the straight-line method over the estimated useful lives of the assets, which is 10 years.
Impairment of Long-Lived Assets and Intangibles	The Company performs impairment tests on its long-lived assets when circumstances indicate that their carrying amounts may not be recoverable. If required, recoverability is tested by comparing the estimated future undiscounted cash flows of the asset or asset group to its carrying value. If the carrying value is not recoverable, the asset or asset group is written down to fair value. For the three months ended September 30, 2015 and 2014, the Company recorded $0 in impairment to the Company's long-lived assets.
Stock-Based Compensation	The Company measures the cost of employee services received in exchange for stock and stock options based on the grant date fair value of the awards. The Company determines the fair value of stock option grants using the Black-Scholes option pricing model. The Company determines the fair value of shares of non-vested stock (also commonly referred to as restricted stock) based on the last quoted price of our stock on the date of the share grant. The fair value determined represents the cost for the award and is recognized over the vesting period during which an employee is required to provide service in exchange for the award. As share-based compensation expense is recognized based on awards ultimately expected to vest, the Company reduces the expense for estimated forfeitures based on historical forfeiture rates, if historical forfeiture rates are available. Previously recognized compensation costs may be adjusted to reflect the actual forfeiture rate for the entire award at the end of the vesting period. Excess tax benefits, if any, are recognized as an addition to paid-in capital.
Income Taxes	The Company utilizes the asset and liability method in accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for operating loss and tax credit carry-forwards and for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets unless it is more likely than not that the value of such assets will be realized.
Fair Value of Financial Instruments	The Company follows FASB ASC 820, Fair Value Measurement measurements. The provisions of ASC 820 apply to all financial assets and liabilities measured at fair value. As defined in ASC 820, fair value, clarified as an exit price, represents the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As a result, fair value is a market-based approach that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering these assumptions, ASC 820 defines a three-tier value hierarchy that prioritizes the inputs used in the valuation methodologies in measuring fair value. Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.
Subsequent Events	The Company evaluated subsequent events through the date when financial statements are issued for disclosure consideration.
Recent Accounting Pronouncements	There were various accounting standards and interpretations issued recently, none of which are expected to have a material effect on the Company's operations, financial position or cash flows.

ACQUISITIONS (Tables)

ACQUISITIONS (Tables)	9 Months Ended
	Sep. 30, 2015
Memcine [Member]
Summarizes of the purchase price to the net assets	The following table summarizes the allocation of the purchase price to the net assets acquired: Fair value at June 2, 2015 Cash $ 27,071 Property, plant and equipment 18,071 IPR&D 142,076 Total assets 187,218 Accounts payable and accrued liabilities (854 ) Deferred liabilities (150,000 ) Total liabilities (150,854 ) Net assets acquired $ 36,364
CBL [Member]
Summarizes of the purchase price to the net assets	As there is no existing market for the preferred shares of Celtic Iowa, the Company used the fair value of the acquired net assets of CBL to determine the purchase price. The following table summarizes the allocation of the purchase price to the net assets acquired: Fair value at June 4, 2014 Cash $ 1,656 Accounts receivable – related party 1,349 Property, plant and equipment 9,000 IPR&D 6,977,347 Total assets 6,989,352 Accounts payable and accrued liabilities (242,693 ) Short-term debt – related party (204,186 ) Total liabilities (446,879 ) Final Purchase price $ 6,542,473

NOTES PAYABLE (Tables)

NOTES PAYABLE (Tables)	9 Months Ended
	Sep. 30, 2015
Notes Payable Tables
NOTES PAYABLE	On December 16, 2013, the Company assumed the liabilities of American Exploration which included the following notes payable to unrelated third parties: Date Stated Original of Interest Principal Due Promissory Note Note Rate Amount Date Default #1 05/29/09 10 % $ 30,000 On Demand No #2 06/05/09 10 % $ 7,698 On Demand No #3 08/16/09 10 % $ 50,000 On Demand No #4 09/27/10 10 % $ 60,000 On Demand No #5 06/02/10 5 % $ 50,000 On Demand No #6 02/04/11 5 % $ 30,000 On Demand No #7 05/04/11 5 % $ 35,000 On Demand No #8 08/11/11 10 % $ 20,000 On Demand No #9 12/05/11 10 % $ 20,000 On Demand No #10 04/28/12 10 % $ 30,000 On Demand No

EQUITY (Tables)

EQUITY (Tables)	9 Months Ended
	Sep. 30, 2015
Stock Option [Member]
Summary of stock option activity	A summary of the stock option activity for the nine months ended September 30, 2015 is presented below. Options Weighted-Average Exercise Price Aggregate Intrinsic Value Outstanding December 31, 2014 5,200 $ 359.04 $ - Granted - - - Exercised - - - Expired - - - Outstanding September 30, 2015 5,200 $ 359.04 $ - Exercisable September 30, 2015 5,200 $ 359.04 $ -
Warrant [Member]
Summary of stock option activity	A summary of the warrant activity for the nine months ended September 30, 2015 is presented below: Warrants Weighted-Average Exercise Price Aggregate Intrinsic Value Outstanding December 31, 2014 1,364,171 $ 1.40 $ - Granted 964,531 1.25 - Exercised - - - Expired/cancelled (100,000 ) $ 1.29 - Outstanding September 30, 2015 2,228,702 $ 1.94 - Exercisable September 30, 2015 2,228,702 $ 1.94 $ -

SUMMARY OF SIGNIFICANT ACCOUN22

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Summary Of Significant Accounting Policies Details Narrative
Dilutive effect of notes payable convertible			5,200	5,200
Dilutive effect of options to purchase			885,000	1,559,936
Common shares issuable for conversion of convertible debt			1,774,650	250,985
Cash balances uninsured	$ 291,012		$ 291,012
Impairment to long lived assets	$ 0	$ 0
Interest in Memcine	82.25%

GOING CONCERN (Details Narrativ

GOING CONCERN (Details Narrative) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Going Concern Details Narrative
Accumulated net losses	$ (14,749,025)	$ (10,601,946)
Working capital deficit	$ 4,999,732

ACQUISITIONS (Details)

ACQUISITIONS (Details) - Memcine [Member]	Sep. 30, 2015USD ($)
Cash	$ 27,071
Property, plant and equipment	18,071
IPR&D	142,076
Total assets	187,218
Accounts payable and accrued liabilities	(854)
Deferred liabilities	(150,000)
Total liabilities	(150,854)
Net assets acquired	$ 36,364

ACQUISITIONS (Details 1)

ACQUISITIONS (Details 1) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Short-term debt - related party	$ 166,410	$ 183,000
CBL [Member]
Cash	1,656
Accounts receivable - related party	1,349
Property, plant and equipment	9,000
IPR&D	6,977,347
Total assets	6,989,352
Accounts payable and accrued liabilities	(242,693)
Short-term debt - related party	(204,186)
Total liabilities	(446,879)
Net assets acquired	$ 6,542,473

NOTES PAYABLE (Details)

NOTES PAYABLE (Details)	9 Months Ended
	Sep. 30, 2015USD ($)
Promissory Note One [Member]
Date of note	May 29, 2009
Stated Interest rate	10.00%
Original Principal Amount	$ 30,000
Due date	On Demand
Default	No
Promissory Note Two [Member]
Date of note	Jun. 5, 2009
Stated Interest rate	10.00%
Original Principal Amount	$ 7,698
Due date	On Demand
Default	No
Promissory Note Three [Member]
Date of note	Aug. 16, 2009
Stated Interest rate	10.00%
Original Principal Amount	$ 50,000
Due date	On Demand
Default	No
Promissory Note Four [Member]
Date of note	Sep. 27, 2010
Stated Interest rate	10.00%
Original Principal Amount	$ 60,000
Due date	On Demand
Default	No
Promissory Note Five [Member]
Date of note	Jun. 2, 2010
Stated Interest rate	5.00%
Original Principal Amount	$ 50,000
Due date	On Demand
Default	No
Promissory Note Six [Member]
Date of note	Feb. 4, 2011
Stated Interest rate	5.00%
Original Principal Amount	$ 30,000
Due date	On Demand
Default	No
Promissory Note Seven [Member]
Date of note	May 4, 2011
Stated Interest rate	5.00%
Original Principal Amount	$ 35,000
Due date	On Demand
Default	No
Promissory Note Eight [Member]
Date of note	Aug. 11, 2011
Stated Interest rate	10.00%
Original Principal Amount	$ 20,000
Due date	On Demand
Default	No
Promissory Note Nine [Member]
Date of note	Dec. 5, 2011
Stated Interest rate	10.00%
Original Principal Amount	$ 20,000
Due date	On Demand
Default	No
Promissory Note Ten [Member]
Date of note	Apr. 28, 2012
Stated Interest rate	10.00%
Original Principal Amount	$ 30,000
Due date	On Demand
Default	No

NOTES PAYABLE (Details Narrativ

NOTES PAYABLE (Details Narrative) - USD ($)	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Interest expense	$ 21,540	$ 21,533
Proceeds from borrowings on short term debt		$ 2,500
American Exploration Former CEO [Member]
Repaid amount on advances	$ 2,500

CONVERTIBLE INSTRUMENTS (Detail

CONVERTIBLE INSTRUMENTS (Details Narrative)	9 Months Ended
	Sep. 30, 2015USD ($)
Convertible Instruments Details Narrative
Interest expense related to amortized debt discount	$ 269,844
Line of Credit	752,325
Aditional line of credit	135,000
Interest expense related to the debt discount	105,668
Interest expense	156,247
Accrued interest expense	$ 57,345

INCOME TAXES (Details Narrative

INCOME TAXES (Details Narrative)	9 Months Ended
	Sep. 30, 2015USD ($)
Income Taxes Details Narrative
Valuation Allowance	100.00%
Net operating loss carry forward	$ 11,800,000
Net operating loss carry forward expire years	2028 and 2035

EQUITY (Details)

EQUITY (Details) - Stock Option [Member]	9 Months Ended
	Sep. 30, 2015USD ($)$ / sharesshares
Options
Outstanding at Beginning | shares	5,200
Granted | shares
Exercised | shares
Expired | shares
Outstanding at Ending | shares	5,200
Exercisable at Ending | shares	5,200
Weighted-Average Exercise Price
Weighted-Average Exercise Price Outstanding Beginning	$ 359.04
Granted
Exercised
Expired
Weighted-Average Exercise Price Outstanding Ending	$ 359.04
Weighted-Average Exercise Price Exercisable Ending	$ 359.04
Aggregate Intrinsic Value
Aggregate Intrinsic Value Outstanding Beginning | $
Granted | $
Exercised | $
Expired | $

EQUITY (Details 1)

EQUITY (Details 1) - Warrant [Member]	9 Months Ended
	Sep. 30, 2015USD ($)$ / sharesshares
Options
Outstanding at Beginning | shares	1,364,171
Granted | shares	1,354,969
Exercised | shares
Expired | shares	(100,000)
Outstanding at Ending | shares	2,228,702
Exercisable at Ending | shares	2,228,702
Weighted-Average Exercise Price
Weighted-Average Exercise Price Outstanding Beginning	$ 1.40
Granted	$ 1.25
Exercised
Expired	$ 1.29
Weighted-Average Exercise Price Outstanding Ending	1.94
Weighted-Average Exercise Price Exercisable Ending	$ 1.94
Aggregate Intrinsic Value
Aggregate Intrinsic Value Outstanding Beginning | $
Granted | $
Exercised | $
Expired | $

EQUITY (Details Narrative)

EQUITY (Details Narrative) - USD ($)	9 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Warrant payable	862,500
Additional paid-in capital	$ 14,380,207	$ 11,277,032
Warrants not issued	2,159,620
Warrant [Member]
Subscriptions received	113,335
Common stock shares	42,500
Net cash proceeds	$ 85,000
Warrants issued	$ 300,000
Warrant payable	277,598
Weighted average remaining contractual term of the outstanding options and exercisable	3 years 3 months 7 days
Additional paid-in capital	$ 561,573

RELATED PARTY TRANSACTIONS (Det

RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Related Party Transactions Details Narrative
Short term debt - related party	$ 166,410		$ 166,410		$ 183,000
Gain on foreign currency exchange	$ 31,180		$ 64,422