Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | 12-May-15 | |
Document And Entity Information | ||
Entity Registrant Name | Immune Therapeutics, Inc. | |
Entity Central Index Key | 1559356 | |
Document Type | 10-Q | |
Document Period End Date | 31-Mar-15 | |
Amendment Flag | FALSE | |
Current Fiscal Year End Date | -19 | |
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 | 144,553,712 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2015 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (Unaudited) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Current Assets: | ||
Cash and cash equivalents | $30,852 | $191,987 |
Accounts Receivable | 2,070 | 0 |
Prepaids and Other Current assets | 30,000 | 30,000 |
Total current assets | 62,922 | 221,987 |
Fixed Assets: | ||
Computer equipment, net of accumulated depreciation of $4,446 and $3,778 respectively | 3,567 | 4,235 |
Intangible Assets: | ||
Patents and licenses, net of amortization of $1,349,737 and $1,201,678, respectively (Note 10) | 5,670,526 | 5,818,585 |
Deposits | 10,183 | 10,183 |
Total assets | 5,747,198 | 6,054,990 |
Current Liabilities: | ||
Accounts payable | 1,884,673 | 2,077,194 |
Accrued liabilities | 1,144,439 | 1,111,839 |
Current portion of notes payable | 660,083 | 186,067 |
Total current liabilities | 3,689,195 | 3,375,100 |
Non-current Liabilities: | ||
Notes payable, less current portion | 354,417 | 327,458 |
Total non-current liabilities | 354,417 | 327,458 |
Total Liabilities | 4,043,612 | 3,702,558 |
Commitments and contingencies (Note 7) | ||
Stockholders' Equity: | ||
Common stock - par value $0.0001; 500,000,000 shares authorized; 144,553,712 and 134,417,210 shares issued and outstanding respectively | 14,456 | 13,442 |
Additional paid in capital | 339,829,624 | 337,985,787 |
Stock issuances due | 127,803 | 847,279 |
Prepaid services | -2,422,001 | -3,553,186 |
Accumulated deficit | -336,576,846 | -333,547,377 |
Equity attributable to common stockholders | 973,036 | 1,745,945 |
Non-controlling interest | 730,550 | 606,487 |
Total stockholders' equity | 1,703,586 | 2,352,432 |
Total liabilities and stockholders' equity | $5,747,198 | $6,054,990 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Accumulated depreciation | $4,446 | $3,778 |
Amortization | $1,349,737 | $1,201,678 |
Common Stock, Par Value | $0.00 | $0.00 |
Common Stock, Shares Authorized | 500,000,000 | 500,000,000 |
Common Stock, Shares Issued | 144,553,712 | 134,417,210 |
Common Stock, Shares Outstanding | 144,553,712 | 134,417,210 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (Unaudited) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Income Statement [Abstract] | ||
Revenues, net | $2,070 | $0 |
Operating expenses: | ||
Selling, general and administrative | 401,987 | 727,119 |
Research and development expense | 177,157 | 511,253 |
Stock issued for services G&A | 2,161,559 | 9,689,703 |
Stock issued for services R&D | 0 | 3,659,583 |
Warrant valuation expense | 0 | 2,196,131 |
Depreciation and amortization expense | 148,727 | 719,287 |
Total operating expenses | 2,889,430 | 17,503,076 |
Loss from operations | -2,887,360 | -17,503,076 |
Interest expense | -18,045 | -161,081 |
Exchange loss | 0 | -783 |
Total other income (expense) | -18,045 | -161,864 |
Net loss | -2,905,405 | -17,664,940 |
Net loss attributable to non-controlling interest | -124,064 | 0 |
Net loss attributable to common shareholders | ($2,781,341) | $0 |
Basic and diluted loss per share: | ||
Basic and diluted loss per share to common shareholders | ($0.02) | ($0.02) |
Weighted average number of shares outstanding | 138,795,044 | 81,562,670 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Stockholders Equity (Unaudited) (USD $) | Common Stock | Additional Paid-In Capital | Stock To Be Issued | Prepaid Services | Accumulated Deficit | Non-Controlling Interest | Total |
Beginning Balance, Amount at Dec. 31, 2014 | $13,442 | $337,985,787 | $847,278 | ($3,553,185) | ($333,547,377) | $606,486 | $2,352,432 |
Beginning Balance, Shares at Dec. 31, 2014 | 134,417,210 | ||||||
Issuance of common stock for prepaid services, Shares | 9,272,502 | ||||||
Issuance of common stock for prepaid services, Amount | 928 | 1,711,948 | -682,500 | -631,000 | 399,376 | ||
Amortization of prepaid services | 1,762,184 | 1,762,184 | |||||
Issuance of common stock for cash and exercise of warrants, Shares | 264,000 | ||||||
Issuance of common stock for cash and exercise of warrants, Amount | 26 | 29,949 | 65,025 | 95,000 | |||
Net loss | -2,781,341 | -124,064 | -2,905,405 | ||||
Ending Balance, Amount at Mar. 31, 2015 | $14,456 | $339,829,624 | $127,803 | $2,422,001 | ($336,328,718) | $482,422 | $1,703,586 |
Ending Balance, Shares at Mar. 31, 2015 | 144,553,712 |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | ($2,905,405) | ($17,664,940) |
Adjustments to reconcile loss from continuing operations to net cash flows used in operating activities: | ||
Depreciation | 668 | 575 |
Amortization | 148,059 | 718,712 |
Stock issued, and amortization of stock issued, for prepaid services | 2,161,559 | 13,349,287 |
Stock warrant expense | 0 | 2,414,073 |
Stock (returned) issued for donation | 0 | -750,000 |
Stock issued for interest on origination fees | 0 | 145,350 |
Changes in operating assets and liabilities: | ||
Accounts receivable | -2,070 | 0 |
Accounts payable | -192,521 | 175,441 |
Accrued liabilities | 32,600 | 70,921 |
Prepaid expenses and deposits | 0 | 180,652 |
Net cash used in operating activities | -757,110 | -1,359,929 |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from sale of stock and exercise of warrants | 95,000 | 657,025 |
Proceeds from issuance of notes payable | 500,975 | 600,000 |
Repayments of notes payable, related party | 0 | -20,000 |
Payments made on patent liability | 0 | -50,000 |
Net cash provided by financing activities | 595,975 | 1,187,025 |
Net decrease in cash and cash equivalents | -161,135 | -172,904 |
Cash and cash equivalents at beginning of period | 191,987 | 406,596 |
Cash and cash equivalents at end of period | 30,852 | 233,692 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | ||
Cash paid for interest | 4,500 | 0 |
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Accrued interest for purchase of patent | 0 | 2,715,000 |
Conversion of debt and accrued interest to common stock | 0 | 114,166 |
Common stock issued license | $0 | $2,550,000 |
1_Organization_and_Description
1. Organization and Description of Business | 3 Months Ended |
Mar. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
1. Organization and Description of Business | Immune Therapeutics, Inc. (collectively, the “Company,” “us” or “we”) was initially incorporated in Florida on December 2, 1993 as Resort Clubs International, Inc. (“Resort Clubs”). It was formed to manage and market golf course properties in resort markets throughout the United States. Galliano International Ltd. (“Galliano”) was incorporated in Delaware on May 27, 1998 and began trading in November 1999 through the filing of a 15C-211. On November 10, 2004, Galliano merged with Resort Clubs. Resort Clubs was the surviving corporation. On August 23, 2010, Resort Clubs changed its name to pH Environmental Inc. (“pH Environmental”). |
On April 23, 2012, pH Environmental completed a name change to TNI BioTech, Inc., and on April 24, 2012, we executed a share exchange agreement for the acquisition of all of the outstanding shares of TNI BioTech IP, Inc. On September 4, 2014, a majority of our shareholders approved an amendment to our Amended and Restated Articles of Incorporation, as amended, to change our name to Immune Therapeutics, Inc. We filed our name change amendment with the Secretary of State of Florida on October 27, 2014 changing our name to Immune Therapeutics, Inc. | |
The Company currently resides in Orlando, Florida. In July 2012, the Company’s focus turned to acquiring patents that would protect and advance the development of new uses of opioid-related immune- therapies, such as low dose naltrexone (“LDN”) and Methionine [Met5]-enkephalin (“MENK”). The Company’s therapies are believed to stimulate and/or regulate the immune system in such a way that they provide the potential to treat a variety of diseases. We believe our therapies may be able to correct abnormalities or deficiencies in the immune system in diseases such as HIV infection, autoimmune disease, immune disorders, or cancer; all of which can lead to disease progression and life-threatening situations when the immune system is not functioning optimally. | |
In October 2012, the Company formed TNI BioTech International, Ltd., a BVI company in Tortola, British Virgin Islands, which was set up to allow the Company to market and sell LDN in those countries outside the U.S. in which we have been able to obtain approval to sell the Company’s products. | |
In August 2013, the Company formed its United Kingdom subsidiary, TNI BioTech, LTD (the “UK Subsidiary”). The UK Subsidiary received approval to be considered a micro, small or medium-sized enterprise (“SME”) with the European Medicines Agency (“EMA”) on August 21, 2013. The designation provides the UK Subsidiary with significant discounts when holding meetings or submitting filings to the EMA. On September 19, 2013, the UK Subsidiary submitted a pre-submission package to the EMA regarding Crohn’s Disease. The EMA granted the UK Subsidiary a meeting that took place on September 27, 2013. The UK Subsidiary is eligible to benefit from the provisions for administrative and financial assistance for SMEs set out in Regulation (EC) No 2049/2005. | |
In December 2013, the Company formed a new subsidiary, Cytocom Inc., to focus on conducting LDN and MENK clinical trials in the United States. In December 2014, the Company completed the distribution of common stock of Cytocom Inc. to its shareholders. As part of the transaction, the Company retained certain exclusive rights to patents, in-country approvals, formulations, trademarks, manufacturing, marketing, sales, and distributions rights in emerging nations, including Africa, Central America, South America, Russia, India, China, Far East, and The Commonwealth of Independent States (former Soviet Union). The Company will continue to have access to existing clinical data as well as any new data generated by Cytocom Inc. during drug development. On December 8, 2014, the number of Cytocom Inc. shares of common stock that were issued to our shareholders totaled 113,242,522 shares. In connection with the transaction, Cytocom Inc. issued 140,100,000 shares of its common stock to the Company, which has allowed the Company to retain a 55% stake in Cytocom Inc. until such time as funding for Cytocom Inc. closes. | |
In March 2014, the Company incorporated Airmed Biopharma Limited, an Irish corporation with an address in Dublin, Ireland, and Airmed Holdings Limited, an Irish company domiciled in Bermuda. The Irish companies were set up to benefit from incentives granted by the Irish government for the establishment of pharmaceutical companies (many of the world’s leading pharmaceutical companies have located in Ireland), and so that the Company could take advantage of Ireland's status as a member of the European Union and the European Economic Area. An Irish limited liability company enjoys a low corporate income tax rate of 12.5%, one of the lowest in the world. The Irish-domiciled company hopes to qualify for tax incentives for Irish holding/headquartered companies and to benefit from the network of double tax treaties that reduce withholding taxes. TNI BioTech International, Ltd. will manage our international distribution, using product that is manufactured in Ireland and elsewhere. | |
We are focused on the development and commercialization of therapeutic treatments for cancer, HIV/AIDS and autoimmune diseases and immune disorders by combating these severe and fatal diseases through the stimulation and/or regulation of the body’s immune system. Our growth strategy includes the near-term commercialization of our existing immunotherapies targeting cancer, Crohn’s disease and/or HIV/AIDS. | |
The Company is currently a party to agreements to lease office space in White Plains, New York and Orlando, Florida. The White Plains office is no longer in use. | |
Going Concern | |
The Company has incurred significant net losses since inception and has relied on its ability to fund its operations through private equity financings. Management expects operating losses and negative cash flows to continue at more significant levels in the future. As the Company continues to incur losses, transition to profitability is dependent upon the successful development, approval, and commercialization of its product candidate and the achievement of a level of revenues adequate to support the Company’s cost structure. The Company may never achieve profitability, and unless and until it does, the Company will continue to need to raise additional cash. Management intends to fund future operations through additional private or public debt or equity offerings, and may seek additional capital through arrangements with strategic partners or from other sources. Based on the Company’s operating plan, existing working capital at December 31, 2014 was not sufficient to meet the cash requirements to fund planned operations through December 31, 2015 without additional sources of cash. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern and do not include adjustments that might result from the outcome of this uncertainty. This basis of accounting contemplates the recovery of the Company’s assets and the satisfaction of liabilities in the normal course of business. | |
The Company has experienced a net loss from operations of $2,887,360 and has used cash and cash equivalents for operations in the amount of $757,110 during the quarter ended March 31, 2015, resulting in stockholder’s equity of $1,703,586. | |
2_Summary_of_Significant_Accou
2. Summary of Significant Accounting Policies | 3 Months Ended | ||||||||||
Mar. 31, 2015 | |||||||||||
Accounting Policies [Abstract] | |||||||||||
2. Summary of Significant Accounting Policies | Basis of Presentation | ||||||||||
The accompanying consolidated financial statements have been prepared in accordance with United States (U.S.) generally accepted accounting principles (U.S. GAAP) and include all adjustments necessary for the fair presentation of the Company’s financial position for the periods presented. | |||||||||||
The Company qualifies as an “emerging growth company” as defined in Section 101 of the Jumpstart our Business Startups Act (“JOBS Act”) as we do not have more than $1,000,000,000 in annual gross revenue for the year ended December 31, 2014. We are electing to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1) of the JOBS Act. | |||||||||||
Use of Estimates | |||||||||||
The preparation of the Company’s financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from such estimates. | |||||||||||
Cash, Cash Equivalents, and Short-Term Investments | |||||||||||
The Company considers all highly liquid investments with original maturities at the date of purchase of three months or less to be cash equivalents. Cash and cash equivalents include bank demand deposits, marketable securities with maturities of three months or less at purchase, and money market funds that invest primarily in certificates of deposits, commercial paper and U.S. government and U.S. government agency obligations. Cash equivalents are reported at fair value. | |||||||||||
Concentration of Credit Risk | |||||||||||
Financial instruments that potentially subject the Company to concentrations of credit risk are primarily cash and cash equivalents. The Company is exposed to credit risk, subject to federal deposit insurance, in the event of a default by the financial institutions holding its cash and cash equivalents to the extent of amounts recorded on the balance sheets. The cash accounts are insured by the Federal Deposit Insurance Corporation up to $250,000. At March 31, 2015, the Company has no uninsured cash balances. | |||||||||||
Segment and Geographic Information | |||||||||||
Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision making group, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business in one operating segment and does not segment the business for internal reporting or decision making. | |||||||||||
Fair Value of Financial Instruments | |||||||||||
In accordance with the reporting requirements of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 825, “Financial Instruments”, the Company calculates the fair value of its assets and liabilities which qualify as financial instruments under this standard and includes this additional information in the notes to the financial statements when the fair value is different than the carrying value of those financial instruments. Cash, accounts payable, payable to officer, patent liability and net liabilities of discontinued operations are accounted for at cost which approximates fair value due to the relatively short maturity of these instruments. The carrying value of notes payable and notes payable related party also approximate fair value since they bear market rates of interest and other terms. None of these instruments are held for trading purposes. | |||||||||||
Fair Value Measurements | |||||||||||
The ASC Topic 820, Fair Value Measurements and Disclosures, defines fair value, establishes a framework for measuring fair value in accordance with U.S. generally accepted accounting principles, and requires certain disclosures about fair value measurements. In general, fair values of financial instruments are based upon quoted market prices, where available. If such quoted market prices are not available, fair value is based upon internally developed models that primarily use, as inputs, observable market-based parameters. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value. These adjustments may include amounts to reflect counterparty credit quality and the customer's creditworthiness, among other things, as well as unobservable parameters. Any such valuation adjustments are applied consistently over time. | |||||||||||
Property and Equipment | |||||||||||
Property and equipment are stated at cost, less accumulated depreciation. Depreciation is determined on a straight-line basis over the estimated useful lives of the assets, which generally range from three to five years. Maintenance and repairs are charged against expense as incurred. Depreciation expense from continuing operations for the quarters ended March 31, 2015 and March 31, 2014 was $668 and $575, respectively. | |||||||||||
Intangible Assets | |||||||||||
Costs incurred to acquire and/or develop the Company’s product licenses and patents are capitalized and amortized by straight-line methods over estimated useful lives of seven to sixteen years. Intangible assets are stated at the lower of cost or estimated fair market value. During the quarters ended March 31, 2015 and March 31, 2014, the Company did not capitalized any such costs. (See Note 10). Amortization expense for the quarters ended March 31, 2015 and March 31, 2014 was $148,059 and $718,712, respectively. | |||||||||||
Impairment of Long-Lived Assets | |||||||||||
The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable as prescribed by ASC Topic 360-10-05, “Property, Plant and Equipment.” If the carrying amount of the asset, including any intangible assets associated with that asset, exceeds its estimated undiscounted net cash flow, before interest, the Company will recognize an impairment loss equal to the difference between its carrying amount and its estimated fair value. No impairment losses were recognized for the quarters ended March 31, 2015 and March 31, 2014. | |||||||||||
Research and Development Costs | |||||||||||
Research and development costs are charged to expense as incurred and are typically comprised of salaries and benefits, pre-clinical studies, clinical trial activities, drug development and manufacturing, fees paid to consultants and other entities that conduct certain research and development activities on the Company’s behalf and third-party service fees, including clinical research organizations and investigative sites. Costs for certain development activities, such as clinical trials are recognized based on an evaluation of the progress to completion of specific tasks using data such as patient enrollment, clinical site activations, or information provided by vendors on their actual costs incurred. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the financial statements as operating expenses. | |||||||||||
Income Taxes | |||||||||||
The Company follows FASB ASC Topic 740, “Income Taxes,” which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statements and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the asset will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. | |||||||||||
The standard addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC Topic 740, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the tax authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. ASC Topic 740 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. At the date of adoption, and as of December 31, 2014, and 2013, the Company does not have a liability for unrecognized tax uncertainties. | |||||||||||
The Company’s policy is to record interest and penalties on uncertain tax positions as income tax expense. At the end of the quarters ended March 31, 2015 and March 31, 2014, the Company had not accrued any interest or penalties related to uncertain tax positions. | |||||||||||
Stock-Based Compensation and Issuance of Stock for Non-Cash Consideration | |||||||||||
The Company measures and recognizes compensation expense for all share-based payment awards made to employees and directors, including employee stock options, based on estimated fair values equaling either the market value of the shares issued or the value of consideration received, whichever is more readily determinable. The majority of the non-cash consideration pertains to services rendered by consultants and others and has been valued at the fair market value of the Company’s common stock at the date of the agreement. | |||||||||||
The Company’s accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of ASC Topic 505-50, “Equity-Based Payments to Non-Employees.” The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor’s performance is complete. | |||||||||||
Non-controlling Interest | |||||||||||
In accordance with ASC 810, Consolidation, the Company consolidates Cytocom, Inc. The non-controlling interests in Cytocom represent the interests of outside shareholders in the equity and results of operations of Cytocom. | |||||||||||
The Company has adopted changes issued by the Financial Accounting Standards Board (“FASB”) to the accounting for non-controlling interests in consolidated financial statements. These changes require, among other items, that a non-controlling interest be included within equity separate from the parent’s equity; consolidated net income be reported at amounts inclusive of both the parent’s and non-controlling interest’s shares; and, separately, the amounts of consolidated net income attributable to the parent and non-controlling interest all be reported on the consolidated statements of operations and comprehensive loss. | |||||||||||
Net Loss per Share | |||||||||||
Basic net loss per share is calculated by dividing the net loss attributable to common stockholders by the weighted average number of common shares outstanding for the period, without consideration for common stock equivalents. Diluted net loss per share is calculated by dividing the net loss by the weighted-average number of common share equivalents outstanding for the period determined using the treasury-stock method and the if-converted method. Dilutive common stock equivalents are comprised of common stock purchase warrants and options outstanding. For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding due to the Company’s net loss position. | |||||||||||
A calculation of basic and diluted net loss per share follows: | |||||||||||
For the three months ended March 31, | |||||||||||
2015 | 2014 | ||||||||||
Historical net loss per share: | |||||||||||
Numerator | |||||||||||
Net loss | $ | (2,781,341 | ) | $ | (17,664,940 | ) | |||||
Net loss attributed to Common stockholders | $ | (2,781,341 | ) | $ | (17,664,940 | ) | |||||
Denominator | |||||||||||
Weighted-average common shares outstanding— | 138,795,044 | 81,562,670 | |||||||||
Denominator for basic and diluted net loss per share | |||||||||||
Basic and diluted net loss per share attributed | $ | (0.02 | ) | $ | (0.22 | ) | |||||
to common stockholders | |||||||||||
The Company’s potential dilutive securities which include stock and warrants have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share. Therefore, the weighted-average Common stock outstanding used to calculate both basic and diluted net loss per share is the same. | |||||||||||
The following shares of potentially dilutive securities have been excluded from the computations of diluted weighted average shares outstanding as the effect of including such securities would be antidilutive: | |||||||||||
For the three months ended March 31, | |||||||||||
2015 | 2014 | ||||||||||
Warrants to purchase Common stock | 9,372,750 | 8,824,250 | |||||||||
9,372,750 | 8,824,250 | ||||||||||
Recent Accounting Standards | |||||||||||
During the quarter ended March 31, 2015, there were several new accounting pronouncements issued by the Financial Accounting Standards Board. Each of these pronouncements, as applicable, has been or will be adopted by the Company. Management does not believe the adoption of any of these accounting pronouncements has had or will have a material impact on the Company’s consolidated financial statements. | |||||||||||
The Company qualifies as an “emerging growth company” as defined in Section 101 of the Jumpstart our Business Startups Act (“JOBS Act”) as we do not have more than $1,000,000,000 in annual gross revenue and did not have such amount as of December 31, 2014, our last fiscal year. We are electing to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1) of the JOBS Act. |
3_Property_and_Equipment
3. Property and Equipment | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Property And Equipment | |||||||||
Property and Equipment | |||||||||
March 31, | |||||||||
2015 | 2014 | ||||||||
Property and equipment: | |||||||||
Computer equipment | $ | 8,013 | $ | 8,013 | |||||
Less accumulated depreciation | (4,446 | ) | (3,778 | ) | |||||
Property and equipment, net | $ | 3,567 | $ | 4,235 | |||||
The Company utilizes the straight-line method for depreciation, using three to five-year depreciable asset lives. Depreciation expense was not material for all periods presented. | |||||||||
4_Accrued_Liabilities
4. Accrued Liabilities | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Accrued Liabilities | |||||||||
Accrued Liabilities | Accrued expenses and other liabilities consist of the following: | ||||||||
31-Mar-15 | 31-Dec-14 | ||||||||
(in thousands) | |||||||||
Retainer for legal services | $ | 60 | $ | 60 | |||||
Accrued payroll to officers and others | 789 | 763 | |||||||
Accrued interest - notes payable | 15 | 2 | |||||||
Estimated legal settlement | 279 | 279 | |||||||
Other accrued liabilities | 0 | 7 | |||||||
State payroll taxes | 2 | 1 | |||||||
Total accrued expenses and other liabilities | $ | 1,145 | $ | 1,112 |
5_Notes_Payable
5. Notes Payable | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Debt Disclosure [Abstract] | |||||||||
5. Notes Payable | Notes payable consist of the following: | ||||||||
31-Mar-15 | December 31, 2014 | ||||||||
Promissory note issued July 29, 2014 to Ira Gaines. The note matures on January 27, 2015 and earns interest at a rate of 18% per annum. | $ | 100,000 | $ | 100,000 | |||||
Promissory notes issued between November 26, 2014 and March 31, 2015, to raise up to $2,000,000 in debt. Lenders earn interest at a rate of 10% per annum, plus a pro-rata share of two percent of the Company’s gross receipts for sales of IRT-103-LDN in perpetuity. Notes will be repaid in 36 monthly installments of principal and interest commencing no later than October 15, 2015. | 707,500 | 406,525 | |||||||
Promissory note issued October 17, 2014 to Roger Bozarth. The note matures on October 17, 2015 and earns interest at a rate of 2% per annum. | 7,000 | 7,000 | |||||||
Promissory note issued January 26, 2015 to Robert J. Dailey. The note is Senior to, and has priority in right of payment over, all indebtedness of borrower. The note earns interest at a rate of 2% per annum and is due on June 30, 2015. | 200,000 | ||||||||
Total | 1,014,500 | 513,525 | |||||||
Less: Current portion | (660,083 | ) | (186,067 | ) | |||||
Long-Term debt, less current portion | $ | 354,417 | $ | 327,458 | |||||
As of March 31, 2015, the Company had accrued $15,353 in unpaid interest. During the quarter ended March 31, 2015, no shares were issued by the Company for origination fees and loan expenses under promissory notes (compared to 260,000 shares with a fair value $362,250 in the quarter ended March 31, 2014). |
6_Capital_StructureCommon_Stoc
6. Capital Structure-Common Stock and Common Stock Purchase Warrants | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Notes to Financial Statements | |||||||||||||
4. Capital Structure-Common Stock and Common Stock Purchase Warrants | Each holder of common stock is entitled to vote on all matters and is entitled to one vote for each share held. No holder of shares of stock of any class shall be entitled as a matter of right to subscribe for or purchase or receive any part of any new or additional issue of shares of stock of any class, or of securities convertible into shares of stock or any class, whether now hereafter authorized or whether issued for money, for consideration other than money, or by way of dividend. | ||||||||||||
As of March 31, 2015 and 2014, the Company was authorized to issue 500,000,000 common shares at a par value of $0.0001 per share. The par value at December 31, 2013 was reported at $0.001 per share. | |||||||||||||
As of March 31, 2015, the Company had 144,553,712 shares of common stock outstanding and 134,417,210 outstanding as of March 31, 2014. | |||||||||||||
Stock Warrants | |||||||||||||
In the quarter ended March 31, 2015, the Company issued no warrants. | |||||||||||||
There were no modifications of the terms of any warrants issued by the Company in the quarters ended March 31, 2015 and 2014. | |||||||||||||
Following is a summary of outstanding stock warrants at December 31, 2015 and 2014 and activity during the years then ended: | |||||||||||||
Number of Shares | Exercise Price | Weighted Average Price | |||||||||||
Warrants as of December 31, 2014 | 9,396,750 | $ | 0.14-15 | $ | 1.72 | ||||||||
Issued in 2015 | 0 | $ | - | $ | - | ||||||||
Expired | - | $ | - | $ | - | ||||||||
Exercised | (24,000 | ) | $ | 0.5 | $ | 0.5 | |||||||
Warrants as of March 31, 2015 | 9,372,750 | $ | 0.14-15 | $ | 1.72 | ||||||||
Summary of outstanding warrants as of March 31, 2015: | |||||||||||||
Expiration Date | Number of Shares | Exercise Price | Remaining Life (years) | ||||||||||
Third Quarter 2015 | 407,500 | $ | 1.50-2.00 | 0.5 | |||||||||
Fourth Quarter 2015 | 268,750 | $ | 1.5 | 0.75 | |||||||||
Second Quarter 2016 | 37,500 | $ | 3.00-5.00 | 1.25 | |||||||||
Third Quarter 2016 | 525,000 | $ | 0.50-5.00 | 1.5 | |||||||||
Third Quarter 2017 | 1,500.00 | $ | 1.00-1.50 | 2.5 | |||||||||
Fourth Quarter 2017 | 2,941,666 | $ | 1.00-9.00 | 2.75 | |||||||||
First Quarter 2018 | 127,500 | $ | 15 | 3 | |||||||||
Second Quarter 2018 | 33,334 | $ | 15 | 3.25 | |||||||||
Third Quarter 2018 | 400,000 | $ | 1.00-1.50 | 3.5 | |||||||||
Fourth Quarter 2018 | 1,197,500 | $ | 1.00-1.50 | 3.75 | |||||||||
First Quarter 2019 | 1,024,000 | $ | 1.5 | 4 | |||||||||
Third Quarter 2019 | 500,000 | $ | 0.5 | 4.5 | |||||||||
Fourth Quarter 2019 | 410,000 | $ | 0.14-1.50 | 4.75 | |||||||||
7_Stock_Compensation
7. Stock Compensation | 3 Months Ended |
Mar. 31, 2015 | |
Equity [Abstract] | |
5. Stock Compensation | Shares Issued for Services |
During the quarters ended March 31, 2015 and 2014, the Company issued 9,272,502 and 5,490,000 shares of common stock respectively for consulting fees. The Company valued these shares at $1,712,876 and $7,965,500 respectively, based upon the fair market value of the common stock at the dates of the agreements. The consulting fees are amortized over the contract periods which are typically between 12 and 24 months. The amortization of prepaid services totaled $1,762,184 and $12,902,887 for the quarters ended March 31, 2015 and 2014. | |
8_Income_Taxes_Results_of_Oper
8. Income Taxes - Results of Operations | 3 Months Ended |
Mar. 31, 2015 | |
Income Taxes - Results Of Operations | |
Income Taxes - Results of Operations | There was no income tax expense reflected in the results of operations for the quarters ended March 31, 2015 and 2014 because the Company incurred a net loss in both quarters. |
The Company has recognized no tax benefit for the losses generated for the periods through December 31, 2014. ASC Topic 740 requires that a valuation allowance be provided if it is more likely than not that some portion or all of a deferred tax asset will not be realized. The Company’s ability to realize the benefit of its deferred tax asset will depend on the generation of future taxable income. Because the Company has yet to recognize revenue, we believe that the full valuation allowance should be provided. | |
Our effective tax rate for fiscal years 2014 and 2013 was 0%. Our tax rate can be affected by recurring items, such as tax rates in foreign jurisdictions and the relative amount of income we earn in jurisdictions. It may also be affected by discrete items that may occur in any given year, but are not consistent from year to year. | |
As of December 31, 2014, we have estimated federal and state income tax net operating loss (“NOL”) carry-forwards of approximately $1,500,000, which will expire in 2032-2036. |
9_Subsequent_Events
9. Subsequent Events | 3 Months Ended |
Mar. 31, 2015 | |
Subsequent Events [Abstract] | |
9. Subsequent Events | |
Between March 31, 2015 and May 12, 2015 the company borrowed $89,000. | |
The company did not issue any stock between March 31, 2015 and May 12, 2015. | |
As of May 12, 2015, the Company had outstanding 144,553,712 shares of common stock. | |
10_Lincenses_and_Supply_Agreem
10. Lincenses and Supply Agreements | 3 Months Ended |
Mar. 31, 2015 | |
Notes to Financial Statements | |
6. Lincenses and Supply Agreements | Patent and Subsidiary Acquisition |
The Company entered into a share exchange agreement on April 24, 2012 to acquire all of the outstanding shares of TNI BioTech IP, Inc. (“TNI IP”), a biotechnology firm incorporated in Florida and formed to acquire patents related to the treatment of cancer and HIV/AIDS and autoimmune diseases, using Met-enkephalin (“MENK”) and Naltraxone (“LDN”). The goal of TNI IP’s management was to enable mankind and civilization to combat fatal diseases by activating and mobilizing the body’s own immune system using TNI IP’s patented use of MENK. The first patents acquired by TNI IP were acquired from Dr. Nicholas P. Plotnikoff and Professor Fengping Shan in 2012. TNI IP was acquired in exchange for 20,250,000 shares of the Company’s common stock, of which 8,000,000 shares were issued to Dr. Plotnikoff for the acquisition of patents and the remaining 12,250,000 shares were issued to the founders of TNI IP in exchange for all of their right, title and interest in their TNI IP shares. The goodwill arising on the acquisition of TNI IP was valued at $98,000,000 and license agreements arising from the acquisition of TNI IP were valued at $16,006,000. | |
In connection with the share exchange, we entered into a Sale of Technology Agreement with Dr. Nicholas P. Plotnikoff on March 4, 2012, wherein Dr. Plotnikoff agreed to transfer and assign all of his rights, title and interest in: European Patent United Kingdom, Germany, France, Ireland EP 1401471 BI Methods for inducing sustained immune response; Russian Patent Russian Federation patent number 2313364; The Patent Office of the People’s Republic of China, Application No.: 200810165784.8 China Patent CN1015113407 A The Patent Office of the People’s Republic of China ISSN: 1006-2858 CN 21-1349/R; Patent Agencies Government of India Patent, Application number 1627/KOLNP/2003 number 220265 an Enkephalin Peptide Composition; and the US Patent Pending, US Patent Application 10/146.999 e. The Company received all the production formulations and technology designs from Dr. Plotnikoff necessary for the manufacturing, formulation, production and protocols of the MENK treatment of cancer and HIV/AIDS. As consideration for entering into the Sale of Technology Agreement, Dr. Plotnikoff received 8,000,000 shares of common stock, a royalty of a single-digit percentage on all sales of MENK and was granted the position of Non-Executive Chairman of the Board of Directors. | |
At the time of the acquisition, the valuation of goodwill and other intangible assets were determined using the fair market price for the Company’s common stock, which were exchanged for shares of TNI IP. In the fourth quarter of 2012, the Company performed an annual valuation to determine whether any goodwill or intangible assets that had been acquired by the Company were impaired. The result of this valuation was that material impairments were identified. The Company recognized an impairment of the goodwill arising on the acquisition of TNI IP of $98,000,000. | |
Patent License Agreements | |
On August 13, 2012, the Company signed an exclusive License Agreement with Ms. Jacqueline Young (the “Young Agreement”) for the intellectual property developed by Dr. Bernard Bihari relating to treatments with opioid antagonists such as naltrexone and Met-enkephalin for a variety of diseases and conditions including malignant lymphoma, chronic lymphocytic leukemia, Hodgkin’s lymphoma, and non-Hodgkin’s lymphoma, chronic herpes virus infections, chronic herpes viral infections such as chronic genital herpes caused by the herpes simplex virus Type 2 and chronic infections due to the Epstein-Barr virus and a treatment method for humans infected with HTLV-III (AIDS) virus, including patients clinically diagnosed as suffering from AIDS and those suffering from AIDS-related complex (ARC). The Bihari patents were acquired in exchange for 540,000 shares of the Company’s common stock with a fair market value of $972,000 and assumed liabilities of $400,000, which is payable to Ms. Young over a twenty-four month period in equal installments to reimburse her for the costs of a New York City office in accordance with the Young Agreement. The patent liability at December 31, 2013 totaled $118,333. The cost of the patent totaled $1,372,000. The Company will pay the licensor a royalty payment of 1% of gross MENK sales and provide the licensor a position as non-executive chairman of the Company. In addition, we are required to make a minimum royalty in the amount of $100,000 for each year after 2014 until such time as we make a first commercial sale. The Young Agreement is valid for the life of the patents and expires on a country by country basis in each country where patent rights exist, upon the expiration of the last to expire patent in each country or in the event the patent in such country is held to be invalid and/or unenforceable (by a court or government body of competent jurisdiction) or admitted to be invalid or unenforceable. Additionally, we can cancel the Young Agreement upon 120 days’ written notice and shall pay all royalties and fees that have accrued under the Young Agreement. We have the exclusive rights to the intellectual property; however, Ms. Young retains a right to practice the patents licensed under the Young Agreement solely for noncommercial, academic research purposes. | |
On December 24, 2012, the Company signed an agreement for the acquisition of patent rights (the “Smith Agreement”) for the intellectual property of Dr. Jill Smith and LDN Research Group, LLC (collectively, the “Licensor Parties”), whose members are Dr. Ian S. Zagon, Dr. Patricia J. McLaughlin and Moshe Rogosnitzky and orphan drug designation by the FDA to a novel late-stage drug, trademarked “LDN,” for the treatment of Pediatric Crohn’s disease. The patent covers methods and formulations for treatment of the inflammatory and ulcerative diseases of the bowel, using naltrexone in low doses as an opioid antagonist. These patents were acquired in exchange for 300,000 shares of our common stock with a fair market value of $2,715,000 and payment of $165,384 (consisting of a $100,000 initial license fee and payment of $65,384 of expenses), which totaled $2,880,384. | |
The Smith Agreement requires the Company to (i) use commercially reasonable efforts to develop, commercialize, market and sell licensed products in a manner consistent with a business plan, (ii) expend a minimum amount of funds per annum to develop and commercialize licensed products as soon as practicable, (iii) obtain all requisite regulatory approvals needed to use or sell licensed products in the field of use, and (iv) make the first commercial sale of a licensed product by March of 2017. | |
The Company is required to pay an annual license fee, an annual running royalty on net sales of each licensed product or a minimum royalty, whichever is greater, and a sublicense fee on payments received by the Company from sublicensees. The Company has an exclusive, worldwide license to make, have made, use, lease, import, offer for sale and sell licensed products and to use the method under the patent rights. The Smith Agreement will terminate on the expiration or abandonment of the last patent to expire or ten years after the sale of the first licensed product. The Company may terminate the Smith Agreement upon 90 days’ written notice, provided all sublicenses are terminated and all amounts due and owing are paid to the Licensor Parties. The Licensor Parties may terminate the agreement ten days' after notice to the Company if the Company is ten days late in payment or there is a breach that remains uncured for ten days after written notice of such breach. | |
The Company is also required to pay milestone payments after substantial achievement of certain milestone events for each licensed product including payment: upon initiation of each Phase III trial; upon positive completion of each Phase III clinical trial of the therapeutic use of an LDN compound in the field of use; when a New Drug Application (“NDA”) is accepted for review by the FDA; and when FDA approval to market the NDA is approved. The Company will issue shares upon reaching certain milestones including upon the first dosing of the first patient in a Phase III clinical trial for each licensed product, upon the first sale of each licensed product, and upon the achievement of a set dollar amount in cumulative sales for each licensed product covered by NDAs. | |
As part of the Smith Agreement, the Company has the right to apply to the FDA for the transfer of the orphan drug status for the use of naltrexone for the treatment of pediatric Crohn’s disease and ulcerative colitis, the Investigation New Drug Application (“IND”), and the right to acquire the relevant clinical data set from Dr. Jill Smith. Dr. Jill Smith made arrangements to transfer the IND to the Company as well as the relevant clinical data set, and the FDA has acknowledged that the Company is now the sponsor for this IND. | |
On September 24, 2014, the Company and the Licensor Parties jointly agreed to terminate the Smith Agreement, and in place thereof, have the Licensor Parties grant a similar license in their patent rights to Cytocom Inc. pursuant to a Patent License Agreement between the Licensor Parties, Cytocom Inc. and the Company with substantially similar terms as set forth in the Smith Agreement. Pursuant to this agreement, the Company issued 1,000,000 shares of its common stock valued at $270,000, upon execution to the Licensor Parties and the Company guaranteed the obligations of Cytocom Inc. to the Licensor Parties under the agreement. | |
On January 18, 2013, the Company signed an exclusive licensing agreement with The Penn State Research Foundation to license all of the intellectual property developed by Dr. Ian S. Zagon, Dr. Patricia J. McLaughlin and Dr. Jill P. Smith for the treatment of cancer titled “Opioid Growth Factor and Cancer” and “Combination Therapy with Opioid Growth Factor and Taxanes for the Treatment of Cancer” (the “Foundation Agreement”). | |
The Foundation Agreement requires the Company to: (a) use commercially reasonable efforts to develop, commercialize, market and sell licensed products in a manner consistent with a business plan; (b) expend a minimum amount of funds per annum to develop and commercialize licensed products as soon as practicable; (c) obtain all requisite regulatory approvals needed to use or sell licensed products in the field of use; and (d) make the first commercial sale of a licensed product by December 31, 2016. | |
The Foundation Agreement provides that the Company must pay to the licensor an initial license fee, a license maintenance fee on each anniversary of the effective date of the Foundation Agreement, and an annual running royalty on net sales for each licensed product or a minimum royalty, whichever is greater. In addition, the Company must pay a sublicense fee on payments received by the Company from sublicensees. | |
The Foundation Agreement also requires the Company to make payments upon the achievement of certain milestone events including: initiation of each Phase II trial; initiation of each Phase III trial; when the NDA is accepted for review by the FDA; and when FDA approval to market is approved. The Company must also issue shares upon certain milestones including upon the first dosing of the first patient in a Phase II clinical trial for each licensed product, upon the first dosing of the first patient in a Phase III clinical trial for each licensed product, upon the first sale of each licensed product, and upon the achievement of a set dollar amount of cumulative sales for each licensed product covered by NDAs. | |
The Foundation Agreement terminates on the expiration or abandonment of the last patent to expire or become abandoned. The Company may terminate the Foundation Agreement at any time upon 60 days’ prior written notice and ceasing to make and sell all licensed products, the termination of all sublicenses and payment of all monies owed under the Foundation Agreement. The licensor may terminate the agreement 30 days after notice to the Company if the Company is 30 days late in payment or a breach that remains uncured for 45 days after written notice of such breach. | |
In May of 2013, the Company executed a Patent License Agreement with Professor Fengping Shan (the “Shan Agreement”) pursuant to which it obtained exclusive rights to develop and commercialize the licensed technology. The licensed technology is the intellectual property developed and owned by Professor Shan (i) relating to the treatment of a variety of diseases and conditions with MENK including multiple forms of lymphoma and cancer and (ii) a treatment method for humans infected with the HLTV-III (AIDS) virus including AIDS and AIDS related complex (ARC). The licensed technology includes the methods and formulations for these treatments including all INDs, communications with regulatory agencies, patient data, and letters relating to these treatments. The licensed technology also includes certain patents developed by Professor Shan. Under the Shan Agreement, the Company must issue 500,000 shares to Professor Shan upon final transfer of the licenses, and reimburse Professor Shan for all out of pocket expenses in connection with the patents. The Company will pay Professor Shan a running royalty on gross sales subject to decreases if third party intellectual property is needed to complete such sale or product. The Shan Agreement lasts for the duration of each of the licensed patents however the Company may terminate the Shan Agreement on 120 days' written notice to Professor Shan. | |
On August 6, 2014, Professor Fengping Shan executed an Assignment pursuant to which he transferred to the Company his entire right, title and interest in and to the licensed patents under the Shan Agreement and CN 201210302259 Application of combination of low-dose naltrexone and methionine-enkephalin to preparation of anti-cancer drug for the consideration of 500,000 shares of common stock valued at $140,000. | |
11_Commitments_and_Contingenci
11. Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
7. Commitments and Contingencies | Malawi Treatment Facilities |
On July 14, 2012, GB Oncology and Imaging Group LTD (“GBOIG”) in partnership with the Company signed a letter of intent agreement to collaborate with the Government of Malawi to assist in expanding the treatment of cancer, HIV/AIDS and other infectious diseases. | |
In December of 2014, the Government of Malawi completed an oncology clinic at the Queen Elizabeth Central Hospital in Blantyre, Malawi for the treatment of cancer and infectious diseases. Protocols for a 120-day bridging trial at the clinic for cancer treatment using Lodonal have been submitted for review, and the Company expects to obtain government approvals in 2015 to commence a trial. Lodonal pills have been produced in Nicaragua in anticipation of the trial. Shipments will commence once the trial is approved. | |
The Company and GB will work with the government of Malawi to open and operate other clinics that provide treatments for HIV/AIDS, cancer and other infectious diseases. Under the letter of intent, the Company and GBOIG intend to provide HIV/AIDS treatment to 25,000 patients and hopefully expanding to 500,000 within 24 months. The Company shall contribute $1,000 in initial capital to the venture. The Company shall be allocated 50% of the net income from the venture. Either party may terminate the venture with 180 days’ notice to the other party prior to the one-year anniversary of the Agreement. After the one-year anniversary, the agreement may only be terminated with 180 days' notice to the other party if the other party has breached the Agreement. | |
GBOIG, a subsidiary of GB Energie LLC, is a Washington D.C. based minority woman-owned business managed by Dr. Gloria B. Herndon. Dr. Herndon is a former director of the Company. Dr. Herndon’s directorship with the Company ended September 4, 2014. | |
Open an Oncology and Infectious Disease Center in Malawi at Queen Elizabeth Central Hospital | |
On September 25, 2012, GBOIG, in partnership with the Company, signed an agreement with the Government of Malawi to open an outpatient clinic at Queen Elizabeth Central Hospital (in Malawi) for the treatment of cancer and infectious disease. The duration of the Agreement shall be for 25 years with an optional 10-year renewal to be indicated by the Government of Malawi at least three years prior to the expiration of the term. The Government of Malawi shall bear the upfront costs for the agreement of $2,500,000. | |
Distribution Agreements in Nigeria | |
Effective November 9, 2012, we signed an exclusive Distribution Agreement with G-Ex Technologies/St. Maris Pharma and GB Pharma Holdings, LLC for the Federal Republic of Nigeria. Under the terms of the Distribution Agreement, G-Ex Technologies/St. Maris Pharma and GB Pharma Holdings LLC will have exclusive marketing and distribution rights to IRT-103 LDN and IRT-104 LDN cream in Nigeria until the end of the term of the agreement on December 31, 2017. We will be responsible for the manufacture and supply of IRT-103 LDN and IRT-104 LDN cream. As part of the Distribution Agreement, G-Ex Technologies/St. Maris Pharma will provide us with a revolving letter of credit for the minimum purchase of 750,000 doses monthly of IRT-103 LDN or IRT-104 LDN cream priced at $1.00 per dose. There are no upfront fees. | |
The Distribution Agreement calls for G-Ex Technologies/St. Maris Pharma and GB Pharma Holdings, LLC to purchase a minimum of 15,000,000 doses monthly within 24 months to maintain the exclusivity of the agreement. Once G-Ex Technologies/St. Maris Pharma and GB Pharma Holdings, LLC reach sales of 1,000,000 doses per day, we have agreed to joint venture a factory in the Federal Republic of Nigeria to meet local demands. | |
G-Ex Technologies/St. Maris Pharma is a consortium of companies organized under the laws of the Republic of Nigeria operated by management, a consultant, general pharmaceutical, clinical pharmacy and marketing executives, each with over 25 years of industry experience and well versed in the changing dynamics of the prescription and over-the-counter drug international marketplace. G-Ex Technologies/St. Maris Pharma has been actively supported by medical practice professionals in business and academia who have been involved in the management of related drug therapies for many years. | |
The parties have been unable to perform under the agreement because a certificate of free sale was not obtained by the Company until November of 2013, and no extension has been granted. | |
In October 2013, the Company announced the signing of a Distribution Agreement with AHAR Pharma, a Nigerian company, to market Lodonal™, in Nigeria for the treatment of autoimmune diseases and cancer. AHAR intends to distribute Lodonal™ through a local distributor network, an Internet client base and directly to hospitals, pharmacists and doctors in Nigeria. The Company expects to implement the agreement in 2015. Under the agreement, the Company is obligated to provide delivery of an initial supply of between 1 million and 1.5 million doses of Lodonal™ product to cover AHAR Pharma’s first-year purchase commitment. | |
Agreements with Hubei Qianjiang Pharmaceutical Company | |
On October 18, 2012, the Company and Hubei Qianjiang Pharmaceutical Co., Ltd. (“Qianjiang Pharmaceutical”), signed a Venture Cooperation Agreement on New Drug Methionine Enkephalin (the “Venture Agreement”) pursuant to which Qianjiang Pharmaceutical acquired an exclusive license for the production of MENK in China. The Venture Agreement requires that Qianjiang Pharmaceutical conduct drug research and pilot testing for MENK, organize pre-clinical studies, and apply for clinical trials for MENK with the Chinese State Food and Drug Administration. Under the Venture Agreement, Qianjiang Pharmaceutical must open a co-administration account for the development of MENK in China. Qianjiang Pharmaceutical must pay the Company, upon the marketing of MENK products, a half-year amount equaling 6% of its gross sales from MENK of the preceding half year. The Company may cancel the Venture Agreement if Qianjiang Pharmaceutical does not pay expenses for a period exceeding six months or does not commence clinical trials within 12-months after receiving certain approvals. Qianjiang Pharmaceutical may cancel the Venture Agreement if the Company fails to perform its obligations for a period of six months or the failure to receive approval of clinical trials is due to the Company’s MENK technologies. The Venture Agreement was amended on February 24, 2013 to expand the clinical trials from pancreatic to both pancreatic and liver cancer and amended on March 6, 2014 to require Qianjiang Pharmaceutical to commence studies and clinical trials in China and place funds in the co-administration account. | |
On August 6, 2014, the Company entered into a Supplementary Agreement on New Drug Methionine – Enkephalin Cooperation (the “Amendment”) with Qianjiang Pharmaceutical, amending the Venture Agreement, as amended. The Company and Qianjiang Pharmaceutical executed the Amendment to accelerate clinical trials in both the United States and China, and agreed to immediately initiate three month Good Laboratory Practice (“GLP”) Toxicology Studies (rat and dog) within 30 days of signing the Amendment. The Amendment requires that the GLP Toxicology Studies Trials are conducted in China in accordance with international standards and standards acceptable to the FDA and that the studies include the following: | |
Exploratory Toxicology (nGLP) | |
- Dose range finding studies | |
- Different species and methods of administration | |
- Multiple dosing regimens | |
- Estimate the response vs. dose given | |
Definitive Toxicology (GLP) | |
- Performed in collaboration with Calvert Laboratories (USA) and MPI/Medicillon (China) | |
- General toxicology studies | |
- Different species and methods of administration | |
- Immunogenicity study with NHPs | |
Special Toxicology Studies (planned) | |
Pursuant to the Amendment, Qianjiang Pharmaceutical will make certain funds available from the co-administrative account opened by Qianjiang Pharmaceutical under the Venture Agreement, in accordance with an approved budget and timeline set forth in the Amendment. A portion of these funds are expected to be used by Cytocom to run PK and Dosing trials for MENK in the United States. The Amendment requires Cytocom and Qianjiang Pharmaceutical to meet with the China State Food and Drug Administration to determine that PK and Dosing Trials completed in the United States will be acceptable. All developments and trials run by Cytocom in the U.S. or the European Union will be used for requesting registration approval in China. | |
In February 2013, the Company signed a Strategic Framework Agreement for Cooperation with Qianjiang Pharmaceutical. Under the agreement, the parties will work together to further the development of new products and conduct research and development on the Company’s licensed patented technology. Specifically, the parties aim to co-invest to develop and market products focusing on HIV, cancer and related autoimmune system therapies, develop co-ventured manufacturing facilities in China, and develop co-ventured distribution of the developed products in China and Africa. The agreement does not have a definitive term, as each new agreement resulting from the cooperation will set forth the material terms, including, but not limited to, fees, duration and termination therein. | |
Supervision and Inspection of Manufacturing in Nicaragua | |
On April 23, 2013, the Company signed a Contract with ViPharma for the Supervision and Inspection of Manufacturing Processes as part of its negotiations for a contract for the manufacturing of LDN in a tablet, capsule and/or cream. The contract sets out the terms and conditions under which ViPharma will carry out the services of inspecting and supervising the manufacturing and packaging processes of LDN and ensure compliance with the FDA’s Current Good Manufacturing Practice regulations (“cGMP”) and the Company’s specifications. ViPharma will carry out its obligations in whatever Latin American country the Company ultimately decides to manufacture LDN. Under the contract, ViPharma has the exclusive rights to supervise and inspect all manufacturing processes of LDN in Latin America. The initial term of the agreement is ten years commencing in September 2013, with automatic five-year renewal terms provided neither party is in breach. The agreement may be terminated by (i) mutual agreement, (ii) in the event of a breach after a 45 day cure period or (iii) by either party upon provision of written notice at least 90 days before the end of the agreement, provided however that if the Company terminates the contract without cause it will be required to pay ViPharma a $10 million penalty. | |
Operating Leases | |
At March 31, 2015, the Company was a party to agreements to lease office space in White Plains, New York, and Orlando, Florida. The White Plains office is no longer in use. Rent expense for the quarters ended March 31, 2015 and 2014 was $18,319 and $31,207, respectively. | |
In February 2014, a claim was filed for breach of contract and unjust enrichment in the Circuit Court for Montgomery County, Maryland, E.J. Krause & Associates, Inc. v. TNI BioTech, Inc., in which the named plaintiff claims that we breached a sub-sublease. The plaintiff is seeking damages in excess of $75,000, along with costs, attorneys’ fees, pre-judgment interest and post-judgment interest. The company has accrued $279,000 for this claim. | |
Legal Proceedings | |
In October 2014, a claim was filed for breach of contract and unjust enrichment in the United States District Court, Middle District of Florida, Orlando Division, QS Pharma, LLC v. TNI BioTech, Inc. n/k/a Immune Therapeutics, Inc., in which the named plaintiff claims that we breached various proposals between the parties. The plaintiff was seeking an amount of damages to be proven at trial and pre-judgment interest. The plaintiff filed a Motion for Order of Default, which the court entered against the Company in favor of the plaintiff on December 15, 2014. The company has accrued $210,452 for this claim. | |
12_Related_Party_Transactions
12. Related Party Transactions | 3 Months Ended |
Mar. 31, 2015 | |
Related Party Transactions [Abstract] | |
8. Related Party Transactions | On January 3, 2013, the Company formalized the terms under which Kelly O’Brien Wilson, the daughter-in-law of the Company's Chief Executive Officer is employed. Ms. Wilson had been working with the Company in 2012 and her three-year employment agreement is effective as of December 1, 2012. The terms of the agreement define her base salary, a grant of a common stock, and health insurance coverage. Ms. Wilson was issued 500,000 shares of common stock of the Company in January 2014. In the quarters ended March 31, 2015 and 2014, the Company paid compensation to Ms. Wilson totaling $40,848 and 40,848 respectively. |
2_Summary_of_Significant_Accou1
2. Summary of Significant Accounting Policies (Policies) | 3 Months Ended | ||||||||||
Mar. 31, 2015 | |||||||||||
Summary Of Significant Accounting Policies Policies | |||||||||||
Basis of Presentation | The accompanying consolidated financial statements have been prepared in accordance with United States (U.S.) generally accepted accounting principles (U.S. GAAP) and include all adjustments necessary for the fair presentation of the Company’s financial position for the periods presented. | ||||||||||
The Company qualifies as an “emerging growth company” as defined in Section 101 of the Jumpstart our Business Startups Act (“JOBS Act”) as we do not have more than $1,000,000,000 in annual gross revenue for the year ended December 31, 2014. We are electing to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1) of the JOBS Act. | |||||||||||
Use of Estimates | The preparation of the Company’s financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from such estimates. | ||||||||||
Cash, Cash Equivalents, and Short-Term Investments | The Company considers all highly liquid investments with original maturities at the date of purchase of three months or less to be cash equivalents. Cash and cash equivalents include bank demand deposits, marketable securities with maturities of three months or less at purchase, and money market funds that invest primarily in certificates of deposits, commercial paper and U.S. government and U.S. government agency obligations. Cash equivalents are reported at fair value. | ||||||||||
Concentration of Credit Risk | Financial instruments that potentially subject the Company to concentrations of credit risk are primarily cash and cash equivalents. The Company is exposed to credit risk, subject to federal deposit insurance, in the event of a default by the financial institutions holding its cash and cash equivalents to the extent of amounts recorded on the balance sheets. The cash accounts are insured by the Federal Deposit Insurance Corporation up to $250,000. At March 31, 2015, the Company has no uninsured cash balances. | ||||||||||
Segment and Geographic Information | Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision making group, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business in one operating segment and does not segment the business for internal reporting or decision making. | ||||||||||
Fair Value of Financial Instruments | In accordance with the reporting requirements of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 825, “Financial Instruments”, the Company calculates the fair value of its assets and liabilities which qualify as financial instruments under this standard and includes this additional information in the notes to the financial statements when the fair value is different than the carrying value of those financial instruments. Cash, accounts payable, payable to officer, patent liability and net liabilities of discontinued operations are accounted for at cost which approximates fair value due to the relatively short maturity of these instruments. The carrying value of notes payable and notes payable related party also approximate fair value since they bear market rates of interest and other terms. None of these instruments are held for trading purposes. | ||||||||||
Fair Value Measurements | The ASC Topic 820, Fair Value Measurements and Disclosures, defines fair value, establishes a framework for measuring fair value in accordance with U.S. generally accepted accounting principles, and requires certain disclosures about fair value measurements. In general, fair values of financial instruments are based upon quoted market prices, where available. If such quoted market prices are not available, fair value is based upon internally developed models that primarily use, as inputs, observable market-based parameters. Valuation adjustments may be made to ensure that financial instruments are recorded at fair value. These adjustments may include amounts to reflect counterparty credit quality and the customer's creditworthiness, among other things, as well as unobservable parameters. Any such valuation adjustments are applied consistently over time. | ||||||||||
Property and Equipment | Property and equipment are stated at cost, less accumulated depreciation. Depreciation is determined on a straight-line basis over the estimated useful lives of the assets, which generally range from three to five years. Maintenance and repairs are charged against expense as incurred. Depreciation expense from continuing operations for the quarters ended March 31, 2015 and March 31, 2014 was $668 and $575, respectively. | ||||||||||
Intangible Assets | Costs incurred to acquire and/or develop the Company’s product licenses and patents are capitalized and amortized by straight-line methods over estimated useful lives of seven to sixteen years. Intangible assets are stated at the lower of cost or estimated fair market value. During the quarters ended March 31, 2015 and March 31, 2014, the Company did not capitalized any such costs. (See Note 10). Amortization expense for the quarters ended March 31, 2015 and March 31, 2014 was $148,059 and $718,712, respectively. | ||||||||||
Impairment of Long-Lived Assets | The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable as prescribed by ASC Topic 360-10-05, “Property, Plant and Equipment.” If the carrying amount of the asset, including any intangible assets associated with that asset, exceeds its estimated undiscounted net cash flow, before interest, the Company will recognize an impairment loss equal to the difference between its carrying amount and its estimated fair value. No impairment losses were recognized for the quarters ended March 31, 2015 and March 31, 2014. | ||||||||||
Research and Development Costs | Research and development costs are charged to expense as incurred and are typically comprised of salaries and benefits, pre-clinical studies, clinical trial activities, drug development and manufacturing, fees paid to consultants and other entities that conduct certain research and development activities on the Company’s behalf and third-party service fees, including clinical research organizations and investigative sites. Costs for certain development activities, such as clinical trials are recognized based on an evaluation of the progress to completion of specific tasks using data such as patient enrollment, clinical site activations, or information provided by vendors on their actual costs incurred. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the financial statements as operating expenses. | ||||||||||
Income Taxes | The Company follows FASB ASC Topic 740, “Income Taxes,” which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statements and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the asset will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. | ||||||||||
The standard addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC Topic 740, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the tax authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. ASC Topic 740 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. At the date of adoption, and as of December 31, 2014, and 2013, the Company does not have a liability for unrecognized tax uncertainties. | |||||||||||
The Company’s policy is to record interest and penalties on uncertain tax positions as income tax expense. At the end of the quarters ended March 31, 2015 and March 31, 2014, the Company had not accrued any interest or penalties related to uncertain tax positions. | |||||||||||
Share-Based Compensation and Issuance of Stock for Non-Cash Consideration | The Company measures and recognizes compensation expense for all share-based payment awards made to employees and directors, including employee stock options, based on estimated fair values equaling either the market value of the shares issued or the value of consideration received, whichever is more readily determinable. The majority of the non-cash consideration pertains to services rendered by consultants and others and has been valued at the fair market value of the Company’s common stock at the date of the agreement. | ||||||||||
The Company’s accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of ASC Topic 505-50, “Equity-Based Payments to Non-Employees.” The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor’s performance is complete. | |||||||||||
Non-controlling Interest | In accordance with ASC 810, Consolidation, the Company consolidates Cytocom, Inc. The non-controlling interests in Cytocom represent the interests of outside shareholders in the equity and results of operations of Cytocom. | ||||||||||
The Company has adopted changes issued by the Financial Accounting Standards Board (“FASB”) to the accounting for non-controlling interests in consolidated financial statements. These changes require, among other items, that a non-controlling interest be included within equity separate from the parent’s equity; consolidated net income be reported at amounts inclusive of both the parent’s and non-controlling interest’s shares; and, separately, the amounts of consolidated net income attributable to the parent and non-controlling interest all be reported on the consolidated statements of operations and comprehensive loss. | |||||||||||
Net Loss per Share | Basic net loss per share is calculated by dividing the net loss attributable to common stockholders by the weighted average number of common shares outstanding for the period, without consideration for common stock equivalents. Diluted net loss per share is calculated by dividing the net loss by the weighted-average number of common share equivalents outstanding for the period determined using the treasury-stock method and the if-converted method. Dilutive common stock equivalents are comprised of common stock purchase warrants and options outstanding. For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding due to the Company’s net loss position. | ||||||||||
A calculation of basic and diluted net loss per share follows: | |||||||||||
For the three months ended March 31, | |||||||||||
2015 | 2014 | ||||||||||
Historical net loss per share: | |||||||||||
Numerator | |||||||||||
Net loss | $ | (2,781,341 | ) | $ | (17,664,940 | ) | |||||
Net loss attributed to Common stockholders | $ | (2,781,341 | ) | $ | (17,664,940 | ) | |||||
Denominator | |||||||||||
Weighted-average common shares outstanding— | 138,795,044 | 81,562,670 | |||||||||
Denominator for basic and diluted net loss per share | |||||||||||
Basic and diluted net loss per share attributed | $ | (0.02 | ) | $ | (0.22 | ) | |||||
to common stockholders | |||||||||||
The Company’s potential dilutive securities which include stock and warrants have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share. Therefore, the weighted-average Common stock outstanding used to calculate both basic and diluted net loss per share is the same. | |||||||||||
The following shares of potentially dilutive securities have been excluded from the computations of diluted weighted average shares outstanding as the effect of including such securities would be antidilutive: | |||||||||||
For the three months ended March 31, | |||||||||||
2015 | 2014 | ||||||||||
Warrants to purchase Common stock | 9,372,750 | 8,824,250 | |||||||||
9,372,750 | 8,824,250 | ||||||||||
Recent Accounting Standards | During the quarter ended March 31, 2015, there were several new accounting pronouncements issued by the Financial Accounting Standards Board. Each of these pronouncements, as applicable, has been or will be adopted by the Company. Management does not believe the adoption of any of these accounting pronouncements has had or will have a material impact on the Company’s consolidated financial statements. | ||||||||||
The Company qualifies as an “emerging growth company” as defined in Section 101 of the Jumpstart our Business Startups Act (“JOBS Act”) as we do not have more than $1,000,000,000 in annual gross revenue and did not have such amount as of December 31, 2014, our last fiscal year. We are electing to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1) of the JOBS Act. |
2_Summary_of_Significant_Accou2
2. Summary of Significant Accounting Policies (Tables) | 3 Months Ended | ||||||||||
Mar. 31, 2015 | |||||||||||
Summary Of Significant Accounting Policies Tables | |||||||||||
Schedule of basic and diluted net loss per share | For the three months ended March 31, | ||||||||||
2015 | 2014 | ||||||||||
Historical net loss per share: | |||||||||||
Numerator | |||||||||||
Net loss | $ | (2,781,341 | ) | $ | (17,664,940 | ) | |||||
Net loss attributed to Common stockholders | $ | (2,781,341 | ) | $ | (17,664,940 | ) | |||||
Denominator | |||||||||||
Weighted-average common shares outstanding— | 138,795,044 | 81,562,670 | |||||||||
Denominator for basic and diluted net loss per share | |||||||||||
Basic and diluted net loss per share attributed | $ | (0.02 | ) | $ | (0.22 | ) | |||||
to common stockholders | |||||||||||
Schedule of anitdilutive securities | For the three months ended March 31, | ||||||||||
2015 | 2014 | ||||||||||
Warrants to purchase Common stock | 9,372,750 | 8,824,250 | |||||||||
9,372,750 | 8,824,250 |
3_Property_and_Equipment_Table
3. Property and Equipment (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Property And Equipment Tables | |||||||||
Schedule of Property and Equipment | March 31, | ||||||||
2015 | 2014 | ||||||||
Property and equipment: | |||||||||
Computer equipment | $ | 8,013 | $ | 8,013 | |||||
Less accumulated depreciation | (4,446 | ) | (3,778 | ) | |||||
Property and equipment, net | $ | 3,567 | $ | 4,235 |
4_Accrued_Liabilities_Tables
4. Accrued Liabilities (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Accrued Liabilities Tables | |||||||||
Accrued Liabilities | 31-Mar-15 | 31-Dec-14 | |||||||
(in thousands) | |||||||||
Retainer for legal services | $ | 60 | $ | 60 | |||||
Accrued payroll to officers and others | 789 | 763 | |||||||
Accrued interest - notes payable | 15 | 2 | |||||||
Estimated legal settlement | 279 | 279 | |||||||
Other accrued liabilities | 0 | 7 | |||||||
State payroll taxes | 2 | 1 | |||||||
Total accrued expenses and other liabilities | $ | 1,145 | $ | 1,112 |
5_Notes_Payable_Tables
5. Notes Payable (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Notes Payable Tables | |||||||||
Schedule of Notes payable | 31-Mar-15 | December 31, 2014 | |||||||
Promissory note issued July 29, 2014 to Ira Gaines. The note matures on January 27, 2015 and earns interest at a rate of 18% per annum. | $ | 100,000 | $ | 100,000 | |||||
Promissory notes issued between November 26, 2014 and March 31, 2015, to raise up to $2,000,000 in debt. Lenders earn interest at a rate of 10% per annum, plus a pro-rata share of two percent of the Company’s gross receipts for sales of IRT-103-LDN in perpetuity. Notes will be repaid in 36 monthly installments of principal and interest commencing no later than October 15, 2015. | 707,500 | 406,525 | |||||||
Promissory note issued October 17, 2014 to Roger Bozarth. The note matures on October 17, 2015 and earns interest at a rate of 2% per annum. | 7,000 | 7,000 | |||||||
Promissory note issued January 26, 2015 to Robert J. Dailey. The note is Senior to, and has priority in right of payment over, all indebtedness of borrower. The note earns interest at a rate of 2% per annum and is due on June 30, 2015. | 200,000 | ||||||||
Total | 1,014,500 | 513,525 | |||||||
Less: Current portion | (660,083 | ) | (186,067 | ) | |||||
Long-Term debt, less current portion | $ | 354,417 | $ | 327,458 |
6_Capital_StructureCommon_Stoc1
6. Capital Structure-Common Stock and Common Stock Purchase Warrants (Tables) | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Capital Structure-common Stock And Common Stock Purchase Warrants Tables | |||||||||||||
Schedule of outstanding stock warrants | Number of Shares | Exercise Price | Weighted Average Price | ||||||||||
Warrants as of December 31, 2014 | 9,396,750 | $ | 0.14-15 | $ | 1.72 | ||||||||
Issued in 2015 | 0 | $ | - | $ | - | ||||||||
Expired | - | $ | - | $ | - | ||||||||
Exercised | (24,000 | ) | $ | 0.5 | $ | 0.5 | |||||||
Warrants as of March 31, 2015 | 9,372,750 | $ | 0.14-15 | $ | 1.72 | ||||||||
Summary of outstanding warrants | Expiration Date | Number of Shares | Exercise Price | Remaining Life (years) | |||||||||
Third Quarter 2015 | 407,500 | $ | 1.50-2.00 | 0.5 | |||||||||
Fourth Quarter 2015 | 268,750 | $ | 1.5 | 0.75 | |||||||||
Second Quarter 2016 | 37,500 | $ | 3.00-5.00 | 1.25 | |||||||||
Third Quarter 2016 | 525,000 | $ | 0.50-5.00 | 1.5 | |||||||||
Third Quarter 2017 | 1,500.00 | $ | 1.00-1.50 | 2.5 | |||||||||
Fourth Quarter 2017 | 2,941,666 | $ | 1.00-9.00 | 2.75 | |||||||||
First Quarter 2018 | 127,500 | $ | 15 | 3 | |||||||||
Second Quarter 2018 | 33,334 | $ | 15 | 3.25 | |||||||||
Third Quarter 2018 | 400,000 | $ | 1.00-1.50 | 3.5 | |||||||||
Fourth Quarter 2018 | 1,197,500 | $ | 1.00-1.50 | 3.75 | |||||||||
First Quarter 2019 | 1,024,000 | $ | 1.5 | 4 | |||||||||
Third Quarter 2019 | 500,000 | $ | 0.5 | 4.5 | |||||||||
Fourth Quarter 2019 | 410,000 | $ | 0.14-1.50 | 4.75 |
2_Summary_of_Significant_Accou3
2. Summary of Significant Accounting Policies (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Numerator | ||
Net loss attributed to Common stockholders | ($2,781,341) | ($17,664,940) |
Denominator | ||
Weighted-average common shares outstanding-Denominator for basic and diluted net loss per share | 138,795,044 | 81,562,670 |
Basic and diluted net loss per share attributed to common stockholders | ($0.02) | ($0.22) |
2_Summary_of_Significant_Accou4
2. Summary of Significant Accounting Policies (Details 1) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Summary Of Significant Accounting Policies Tables | ||
Warrants to purchase Common stock | 9,372,750 | 8,824,250 |
2_Summary_of_Significant_Accou5
2. Summary of Significant Accounting Policies (Details Narrative) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Depreciation expense | $668 | $575 |
Amortization expense | $148,059 | $718,712 |
3_Property_and_Equipment_Detai
3. Property and Equipment (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 |
Property And Equipment Details | |||
Computer equipment | $8,013 | $8,013 | |
Less accumulated depreciation | -4,446 | -3,778 | |
Property and equipment, net | $3,567 | $4,235 | $4,235 |
4_Accrued_Liabilities_Details
4. Accrued Liabilities (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Accrued Liabilities Details | ||
Retainer for legal services | $60 | $60 |
Accrued payroll to officers and others | 789 | 763 |
Accrued interest - notes payable | 15 | 2 |
Estimated legal settlement | 279 | 279 |
Other accrued liabilities | 0 | 7 |
State payroll taxes | 2 | 1 |
Total accrued expenses and other liabilities | $1,145 | $1,112 |
5_Notes_Payable_Details
5. Notes Payable (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Notes Payable | $1,014,500 | $513,525 |
Less: Current portion | -660,083 | -186,067 |
Long-Term debt, less current portion | 354,417 | 327,458 |
Note 1 | ||
Notes Payable | 100,000 | 100,000 |
Note 2 | ||
Notes Payable | 707,500 | 406,525 |
Note 3 | ||
Notes Payable | 7,000 | 7,000 |
Note 4 | ||
Notes Payable | $200,000 | $0 |
6_Capital_StructureCommon_Stoc2
6. Capital Structure-Common Stock and Common Stock Purchase Warrants (Details) (USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Number of Warrants | |
Beginning Balance | 9,396,750 |
Issued | 0 |
Expired | 0 |
Exercised | -24,000 |
Ending Balance | 9,372,750 |
Exercise Price | |
Beginning Balance Minimum | $0.14 |
Beginning Balance Maximum | $0.15 |
Issued | $0 |
Expired | $0 |
Exercised | $0.50 |
Ending Balance Minimum | $0.14 |
Ending Balance Maximum | $0.15 |
Weighted Average Exercise Price | |
Beginning Balance | $1.72 |
Issued | $0 |
Expired | $0 |
Exercised | 0.5 |
Ending Balance | $1.72 |
6_Capital_StructureCommon_Stoc3
6. Capital Structure-Common Stock and Common Stock Purchase Warrants (Details 1) | 3 Months Ended | |
Mar. 31, 2015 | Dec. 31, 2014 | |
Number of Shares | 9,372,750 | 9,396,750 |
Third Quarter 2015 | ||
Number of Shares | 407,500 | |
Exercise Price | 1.50-2.00 | |
Remaining Life (years) | 6 months | |
Fourth Quarter 2015 | ||
Number of Shares | 268,750 | |
Exercise Price | 1.5 | |
Remaining Life (years) | 9 months | |
Second Quarter 2016 | ||
Number of Shares | 37,500 | |
Exercise Price | 3.00-5.00 | |
Remaining Life (years) | 1 year 3 months | |
Third Quarter 2016 | ||
Number of Shares | 525,000 | |
Exercise Price | 0.50-5.00 | |
Remaining Life (years) | 1 year 6 months | |
Third Quarter 2017 | ||
Number of Shares | 1,500 | |
Exercise Price | 1.00-1.50 | |
Remaining Life (years) | 2 years 6 months | |
Fourth Quarter 2017 | ||
Number of Shares | 2,941,666 | |
Exercise Price | 1.00-9.00 | |
Remaining Life (years) | 2 years 9 months | |
First Quarter 2018 | ||
Number of Shares | 127,500 | |
Exercise Price | 15 | |
Remaining Life (years) | 3 years | |
Second Quarter 2018 | ||
Number of Shares | 33,334 | |
Exercise Price | 15 | |
Remaining Life (years) | 3 years 3 months | |
Third Quarter 2018 | ||
Number of Shares | 400,000 | |
Exercise Price | 1.00-1.50 | |
Remaining Life (years) | 3 years 6 months | |
Fourth Quarter 2018 | ||
Number of Shares | 1,197,500 | |
Exercise Price | 1.00-1.50 | |
Remaining Life (years) | 3 years 9 months | |
First Quarter 2019 | ||
Number of Shares | 1,024,000 | |
Exercise Price | 1.5 | |
Remaining Life (years) | 4 years | |
Third Quarter 2019 | ||
Number of Shares | 500,000 | |
Exercise Price | 0.5 | |
Remaining Life (years) | 4 years 6 months | |
Fourth Quarter 2019 | ||
Number of Shares | 410,000 | |
Exercise Price | 0.14-1.50 | |
Remaining Life (years) | 4 years 9 months |