Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Nov. 16, 2015 | |
Document And Entity Information | ||
Entity Registrant Name | Immune Therapeutics, Inc. | |
Entity Central Index Key | 1,559,356 | |
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 | 177,990,052 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,015 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Current Assets: | ||
Cash and cash equivalents | $ 153,868 | $ 191,987 |
Accounts Receivable | 12,676 | |
Prepaids and Other Current assets | 45,401 | $ 30,000 |
Total current assets | 211,945 | 221,987 |
Fixed Assets: | ||
Computer equipment, net of accumulated depreciation of $5,752 and $3,778 respectively | 2,261 | 4,235 |
Intangible Assets: | ||
Patents and licenses, net of accumulated amortization of $1,645,853 and $1,201,678, respectively (Note 10) | 5,374,410 | 5,818,585 |
Deposits and other assets | 42,183 | 10,183 |
Total assets | 5,630,799 | 6,054,990 |
Current Liabilities: | ||
Accounts payable | 1,923,777 | 2,077,194 |
Accrued liabilities | 933,266 | 1,111,839 |
Current portion of notes payable | 1,729,100 | 186,067 |
Total current liabilities | 4,586,143 | 3,375,100 |
Non-current Liabilities: | ||
Notes payable, less current portion | 109,333 | 327,458 |
Total non-current liabilities | 109,333 | 327,458 |
Total Liabilities | 4,695,476 | $ 3,702,558 |
Commitments and contingencies (Note 11) | ||
Stockholders' Equity: | ||
Common stock - par value $0.0001; 500,000,000 shares authorized; 175,444,934 and 134,417,210 shares issued and outstanding respectively | 17,545 | $ 13,442 |
Additional paid in capital | 343,856,174 | 337,985,787 |
Stock issuances due | 146,303 | 847,279 |
Prepaid services | (644,167) | (3,553,186) |
Accumulated deficit | (342,618,303) | (333,547,377) |
Equity attributable to common stockholders | 757,552 | 1,745,945 |
Non-controlling interest | 177,771 | 606,487 |
Total stockholders' equity | 935,323 | 2,352,432 |
Total liabilities and stockholders' equity | $ 5,630,799 | $ 6,054,990 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Accumulated depreciation | $ 5,752 | $ 3,778 |
Amortization | $ 1,645,853 | $ 1,201,678 |
Common Stock, Par Value | $ .0001 | $ .0001 |
Common Stock, Shares Authorized | 500,000,000 | 500,000,000 |
Common Stock, Shares Issued | 175,444,934 | 134,417,210 |
Common Stock, Shares Outstanding | 175,444,934 | 134,417,210 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Statement [Abstract] | ||||
Revenues, net | $ 4,958 | $ 12,676 | ||
Operating expenses | ||||
Selling, general and administrative | 865,335 | $ 901,746 | 1,689,188 | $ 3,264,342 |
Research and development expense | 111,361 | 401,424 | 703,011 | 1,471,934 |
Stock issued for services G&A | $ 1,393,500 | $ 4,946,639 | $ 5,005,393 | 17,021,025 |
Stock issued for services R&D | 5,036,250 | |||
Warrant valuation | $ 37,451 | $ 114,939 | $ 37,451 | 2,101,866 |
Depreciation and amortization expense | 148,696 | 720,369 | 446,148 | 2,158,943 |
Total operating expenses | 2,556,343 | 7,085,117 | 7,881,191 | 31,054,360 |
Loss from operations | (2,551,385) | (7,085,117) | (7,868,515) | (31,054,360) |
Other income (expense): | ||||
Interest expense | $ (79,924) | $ (94,101) | $ (148,681) | (376,163) |
Exchange gain (loss) | (783) | |||
Loss on settlement of debt | $ (1,394,000) | $ (4,022,957) | $ (1,482,445) | (4,022,957) |
Total other income (expense) | (1,473,924) | (4,117,058) | (1,631,126) | (4,399,903) |
Net (loss) | (4,025,309) | $ (11,202,175) | (9,499,641) | (35,454,263) |
Net loss attributable to non-controlling interest | (165,759) | (428,715) | ||
Net (loss) attributable to common shareholders | $ (3,859,550) | $ (11,202,175) | $ (9,070,926) | $ (35,454,263) |
Basic and diluted loss per share attributable to common shareholders | $ (0.02) | $ (0.12) | $ (0.06) | $ (0.40) |
Weighted average number of shares outstanding | 156,814,094 | 94,316,453 | 147,365,571 | 87,875,552 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - 9 months ended Sep. 30, 2015 - USD ($) | Common Stock | Additional Paid-In Capital | Stock To Be Issued | Prepaid Services | Accumulated Deficit | Non-Controlling Interest | Total |
Beginning Balance, Shares at Dec. 31, 2014 | 134,417,210 | ||||||
Beginning Balance, Amount at Dec. 31, 2014 | $ 13,442 | $ 337,985,788 | $ 847,278 | $ (3,553,185) | $ (333,547,377) | $ 606,486 | $ 2,352,432 |
Issuance of common stock for prepaid services, Shares | 16,922,504 | ||||||
Issuance of common stock for prepaid services, Amount | $ 1,693 | 2,748,683 | $ (735,000) | (986,000) | 1,029,376 | ||
Amortization of prepaid services | $ 3,895,018 | 3,895,018 | |||||
Issuance of common stock for investment, Shares | 400,000 | ||||||
Issuance of common stock for investment, Amount | $ 40 | 31,960 | 32,000 | ||||
Issuance of common stock for legal settlement, Shares | 1,000,000 | ||||||
Issuance of common stock for legal settlement, Amount | $ 100 | 79,900 | $ 1,000 | 81,000 | |||
Issuance of common stock for interest expense, Shares | 62,500 | ||||||
Issuance of common stock for interest expense, Amount | $ 6 | 15,619 | 15,625 | ||||
Issuance of common stock in exchange for debt, Shares | 16,278,720 | ||||||
Issuance of common stock in exchange for debt, Amount | $ 1,628 | 2,504,934 | (102,000) | 2,404,562 | |||
Issuance of common stock for cash and exercise of warrants, Shares | 6,364,000 | ||||||
Issuance of common stock for cash and exercise of warrants, Amount | $ 636 | 451,839 | 135,025 | 587,500 | |||
Issuance and modification of common stock warrants | 37,451 | 37,451 | |||||
Net loss | $ (9,070,926) | $ (428,715) | (9,499,641) | ||||
Ending Balance, Shares at Sep. 30, 2015 | 175,444,934 | ||||||
Ending Balance, Amount at Sep. 30, 2015 | $ 17,545 | $ 343,856,174 | $ 146,303 | $ (644,167) | $ (342,618,303) | $ 177,771 | $ 935,323 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (9,499,641) | $ (35,454,263) |
Adjustments to reconcile net loss to net cash flows used in operating activities: | ||
Depreciation | 1,974 | 1,817 |
Amortization | 444,175 | 2,157,125 |
Stock issued, and amortization of stock issued, for prepaid services | 3,895,018 | 19,771,875 |
Loss on settlement of debt | 1,482,444 | 4,022,957 |
Stock issued for services | $ 1,029,375 | 2,148,900 |
Stock issued for license | 468,000 | |
Stock issued for legal settlement | $ 81,000 | 448,500 |
Debt discount | 25,000 | |
Stock warrant expense | $ 37,452 | 2,101,866 |
Stock (returned) issued for donation | (750,000) | |
Stock issued for interest | $ 15,625 | 298,200 |
Changes in operating assets and liabilities: | ||
Accounts payable | 605,634 | $ 1,101,734 |
Accounts receivable | (12,676) | |
Accrued liabilities | 31,427 | $ 342,550 |
Prepaid expenses and deposits | (15,401) | 226,642 |
Net cash used in operating activities | $ (1,903,594) | (3,089,097) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of computer equipment | (42,503) | |
Purchase of License | (57,340) | |
Net cash used in investing activities | (99,843) | |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from sale of stock and exercise of warrants | $ 587,500 | 1,799,262 |
Proceeds from notes payable | $ 1,277,975 | 1,210,000 |
Payments made on patent liability | (50,000) | |
Payments made on Bihari patent | (118,333) | |
Net cash provided by financing activities | $ 1,865,475 | 2,840,929 |
Net decrease in cash and cash equivalents | (38,119) | (348,011) |
Cash and cash equivalents at beginning of period | 191,987 | 406,596 |
Cash and cash equivalents at end of period | 153,868 | $ 58,585 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | ||
Cash paid for interest | 12,000 | |
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Common stock issued for loan expense and interest | $ 15,625 | $ 298,200 |
Common stock issued for prepaid services | 1,029,376 | 12,662,000 |
1. Organization and Description
1. Organization and Description of Business | 9 Months Ended |
Sep. 30, 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 Companys 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 Companys 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 Companys 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 Crohns 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 gave the Company a 55% stake in Cytocom Inc. at that time. As of September 30, 2015, the Company owns 140,100,000 shares of the common stock of Cytocom Inc, representing 54% of the total shares issued and outstanding. 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 worlds 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 bodys immune system. Our growth strategy includes the near-term commercialization of our existing immunotherapies targeting cancer, Crohns disease and/or HIV/AIDS. The Company is currently a party to an agreement to lease office space in Orlando, Florida. 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 Companys cost structure. The Company may never achieve profitability, 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 Companys operating plan, existing working capital at September 30, 2015 was not sufficient to meet the cash requirements to fund planned operations through March 31, 2016 without additional sources of cash. These conditions raise substantial doubt about the Companys 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 Companys assets and the satisfaction of liabilities in the normal course of business. The Company experienced a net loss from operations of $9,499,641 and used cash and cash equivalents for operations in the amount of $1,903,594 during the nine months ended September 30, 2015, resulting in stockholder's equity of $935,323 at September 30, 2015. |
2. Summary of Significant Accou
2. Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
2. Summary of Significant Accounting Policies | Basis of Presentation The consolidated financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been omitted. However, in the opinion of management, all adjustments (which include only normal recurring adjustments, unless otherwise indicated) necessary to present fairly the financial position and results of operations for the periods presented have been made. The results for interim periods are not necessarily indicative of trends or of results to be expected for the full year. These financial statements should be read in conjunction with the financial statements of the Company for the year ended December 31, 2014 (including the notes thereto) set forth in Form 10-K. 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 Companys 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. Revenue Recognition Revenue from product sales is recognized upon passage of title and risk of loss to customers. Provisions for discounts, rebates and sales incentives to customers, and returns and other adjustments are provided for in the period the related sales are recorded. Historical data are not yet readily available and reliable for use in estimating the amount of the reduction in gross sales. Revenue from the launch of a new product, from an improved version of an existing product, or for shipments in excess of a customer's normal requirements will be recorded when the conditions noted above are met. In those situations, management will record a returns reserve for such revenue, if necessary. If in future the Company participates in selling arrangements that include multiple deliverables (e.g., instruments, reagents, procedures, and service agreements), under these arrangements, the Company will recognize revenue upon delivery of the product or performance of the service and will allocate the revenue based on the relative selling price of each deliverable, which will be based primarily on vendor specific objective evidence. Revenue from license of product rights is recorded over the periods earned. In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers, which provides a single comprehensive model for accounting for revenue from contracts with customers and will supersede most existing revenue recognition guidance. Early adoption is not permitted. The standard becomes effective for the Company in the first quarter of 2017. The Company is currently evaluating the effect, if any, that the standard will have on its consolidated financial statements and related disclosures. Use of Estimates The preparation of the Companys 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 exceed the federally insured limits. The cash accounts are insured by the Federal Deposit Insurance Corporation up to $250,000. At September 30, 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 the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 825, Financial Instruments Fair Value Measurements The ASC Topic 820, Fair Value Measurement, 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 September 30, 2015 and September 30, 2014 was $638 and $668, respectively. Depreciation expense from continuing operations for the nine months ended September 30, 2015 and September 30, 2014 was $1,974 and $1,817, respectively. Intangible Assets Costs incurred to acquire and/or develop the Companys 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 September 30, 2015 and September 30, 2014, the Company did not capitalize any such costs. (See Note 10). During the nine months ended September 30, 2015 and September 30, 2014, the Company did not capitalize any such costs. Amortization expense for the quarters ended September 30, 2015 and September 30, 2014 was $148,058 and $719,701, respectively. Amortization expense for the nine months ended September 30, 2015 and September 30, 2014 was $444,175 and $2,157,125, 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, Property, Plant and Equipment 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 Companys 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, 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 September 30, 2015, and December 31, 2014, the Company does not have a liability for unrecognized tax uncertainties. The Companys policy is to record interest and penalties on uncertain tax positions as income tax expense. At the end of the quarters ended September 30, 2015 and September 30, 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 value of the Companys common stock at the date of the agreement. Non-controlling Interest In accordance with ASC 810, Consolidation The Company has adopted changes issued by the 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 parents equity; consolidated net income be reported at amounts inclusive of both the parents and non-controlling interests 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 Companys net loss position. A calculation of basic and diluted net loss per share follows: For the three months ended September 30, For the nine months ended September 30, 2015 2014 2015 2014 Historical net loss per share: Numerator Net loss $ (4,025,309 ) $ (11,202,175 ) $ 9,499,641 ) $ (34,454,263 ) Net loss attributed to Common stockholders $ (3,859,550 ) $ (11,202,175 ) $ (9,070,926 ) $ (34,454,263 ) Denominator Weighted-average common shares outstanding Denominator for basic and diluted net loss per share 156,814,094 94,316,453 147,365,571 87,875,552 Basic and diluted net loss per share attributed to common stockholders $ (0.02 ) $ (0.12 ) $ (0.06 ) $ (0.40 ) The Companys 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: At September 30, 2015 2014 Warrants to purchase Common stock 9,355,250 8,986,750 9,355,250 8,986,750 Recent Accounting Standards During the quarter ended September 30, 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 Companys consolidated financial statements. In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers |
3. Property and Equipment
3. Property and Equipment | 9 Months Ended |
Sep. 30, 2015 | |
Property And Equipment | |
3. Property and Equipment | September 30, 2015 December 31, 2014 Property and equipment: Computer equipment $ 8,013 $ 8,013 Less accumulated depreciation (5,752 ) (3,778 ) Property and equipment, net $ 2,261 $ 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 | 9 Months Ended |
Sep. 30, 2015 | |
Accrued Liabilities | |
4. Accrued Liabilities | Accrued expenses and other liabilities consist of the following: September 30, 2015 December 31, 2014 (in thousands) Retainer for legal services $ 60 $ 60 Accrued payroll to officers and others 472 763 Accrued interest - notes payable 120 2 Estimated legal settlement 279 279 Other accrued liabilities - 7 State payroll taxes 2 1 Total accrued liabilities $ 933 $ 1,112 |
5. Notes Payable
5. Notes Payable | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
5. Notes Payable | Notes payable consist of the following: September 30, 2015 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. The Company was unable to repay the note at maturity and the note is in default, although no demand for repayment has been made by the lender. $ 100,000 $ 100,000 Promissory notes issued between November 26, 2014 and September 30, 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 Companys 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. Notes aggregating $547,500 were in default at September 30, 2015, as the Company was unable to pay installments on those notes on their due dates. No demands for repayment have been made by the lenders. 711,500 406,525 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 notes issued between May 1, 2015 and September 30, 2015, and maturing between June 14, 2015 and December 31, 2015. Lenders on loans aggregating $506,433 earn interest at rates between 10% and 18% per annum. On loans aggregating $163,500, interest is payable in a fixed amount not tied to a specific interest rate. At September 30, 2015, total interest payable is $51,500. Notes aggregating $263,500 were in default at September 30, 2015, as the Company was unable to repay those notes on their due dates. No demands for repayment have been made by the lenders. 669,933 - 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 the Company. The note earns interest at a rate of 2% per annum and is due on September 30, 2015. The Company was unable to repay the note at maturity and the note is in default, although no demand for repayment has been made by the lender. 200,000 - Promissory notes issued by Cytocom Inc. between April 29, 2015 and September 30, 2015. Lenders earn interest at rates between 5% and 10% per annum. Notes are repayable between September 30, 2015 and September 30, 2016. The Company was unable to repay notes aggregating $50,000 that matured on or before September 30, 2015, although no demand for repayment has been made by the lenders. 150,000 - Total 1,838,433 513,525 Less: Current portion (1,729,100 ) (186,067 ) Long-Term debt, less current portion $ 109,333 $ 327,458 As of September 30, 2015, the Company had accrued $120,364 in unpaid interest, compared to $2 as of September 30, 2014. During the nine months ended September 30, 2015, 62,500 shares with a fair value of $15,625 were issued by the Company for interest expense under promissory notes (compared to 655,000 shares issued for interest and loan expenses with a fair value $298,200 in the nine months ended September 30, 2014). |
6. Capital Structure-Common Sto
6. Capital Structure-Common Stock and Common Stock Purchase Warrants | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
6. 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 September 30, 2015 and 2014, the Company was authorized to issue 500,000,000 common shares at a par value of $0.0001 per share. As of September 30, 2015, the Company had 175,444,934 shares of common stock outstanding and 129,015,249 outstanding as of September 30, 2014. Stock Warrants In the quarter ended September 30, 2015, the Company issued 390,000 warrants. There were no modifications of the terms of any warrants issued by the Company in the quarters ended September 30, 2015 and 2014. Following is a summary of outstanding stock warrants at September 30, 2015 and activity during the nine months 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 390,000 $ 0.07-0.50 $ 0.42 Expired (407,500 ) $ 1.50-2.00 $ 1.50 Exercised (24,000 ) $ 0.50 $ 0.50 Warrants as of September 30, 2015 9,355,250 $ 0.07-15.00 $ 1.68 Summary of outstanding warrants as of September 30, 2015: Expiration Date Number of Shares Exercise Price Remaining Life (years) Fourth Quarter 2015 268,750 $ 1.50 .25 Second Quarter 2016 37,500 $ 5.00 .75 Third Quarter 2016 525,000 $ 1.00-5.00 1.00 Third Quarter 2017 1,500.000 $ 1.00-1.50 2.00 Fourth Quarter 2017 2,941,666 $ 1.00-9.00 2.25 First Quarter 2018 127,500 $ 15.00 2.50 Second Quarter 2018 33,334 $ 15.00 2.75 Third Quarter 2018 650,000 $ 1.00-1.50 3.00 Fourth Quarter 2018 1,197,500 $ 1.00-1.50 3.25 First Quarter 2019 1,024,000 $ 1.50 3.50 Second Quarter 2019 90,000 $ 0.070.23 3.75 Third Quarter 2019 260,000 $ 0.50 4.00 Fourth Quarter 2019 400,000 $ 0.14-1.50 4.25 Second Quarter 2020 300,000 $ 0.50 4.75 |
7. Stock Compensation
7. Stock Compensation | 9 Months Ended |
Sep. 30, 2015 | |
Equity [Abstract] | |
7. Stock Compensation | Shares Issued for Services During the nine months ended September 30, 2015 and 2014, the Company issued 16,922,504 and 16,390,000 shares of common stock respectively for consulting fees. The Company valued these shares at $1,029,375 and $12,662,001 respectively, based upon the fair 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 $3,895,018 and $19,771,875 for the nine months ended September 30, 2015 and 2014. In the nine months ended September 30, 2015, the company also issued and expensed $1,110,375 of stock for services. |
8. Income Taxes - Results of Op
8. Income Taxes - Results of Operations | 9 Months Ended |
Sep. 30, 2015 | |
Income Taxes - Results Of Operations | |
8. Income Taxes - Results of Operations | There was no income tax expense reflected in the results of operations for the quarters ended September 30, 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 Companys 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 | 9 Months Ended |
Sep. 30, 2015 | |
Subsequent Events [Abstract] | |
9. Subsequent Events | Between October 1, 2015 and November 16, 2015, Cytocom issued notes payable totaling $500,000. Between October 1, 2015 and November 16, 2015, the Company issued 2,545,118 shares of common stock. As of November 16, 2015, the Company had outstanding 177,990,052 shares of common stock. |
10. Licenses and Supply Agreeme
10. Licenses and Supply Agreements | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
10. Licenses 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 IPs management was to enable mankind and civilization to combat fatal diseases by activating and mobilizing the bodys own immune system using TNI IPs 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 Companys 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 Peoples Republic of China, Application No.: 200810165784.8 China Patent CN1015113407 A The Patent Office of the Peoples 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 Companys 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, Hodgkins lymphoma, and non-Hodgkins 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 Companys 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 Crohns 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 Crohns 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 | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
11. 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 2015, the Company submitted protocols seeking permission from the Pharmacy, Medicines and Poisons Board of Malawi (PMPB) to conduct two trials involving Lodonal in Malawi: a. The first protocol, submitted jointly with The Jack Brewer Foundation (JBF Worldwide), received PMPB approval on November 11, 2015. The protocol covers a 12-month trial for a Single Visit Approach to Cervical Cancer Prevention. The approach is designed to deliver a preventive and simple procedure that can be performed in a clinical setting without the use of a laboratory and to allow for immediate treatment of any precancerous lesions utilizing Wallach LL100 Cryosurgical systems. The protocol provides for 50% of the patient group to be put on Lodonal to determine if the drug lowers the number of opportunistic infections during the year, and if it can be shown that LDN increases CD4, CE8, NK and T cell count, which would show that the incidence rates of opportunistic infection could decrease with Lodonal and that Lodonal could be used as a prophylaxis to prevent substantial HIV-related morbidity in Malawi. The Company expects the final trial agreement with PMPB to be signed by the end of 2015. Lodonal pills have been produced in Nicaragua in anticipation of the trial. Shipments will commence once the trial is approved. b. The second protocol, which has not yet been approved, covers a trial using Lodonal for the treatment of cancer. The protocol is still under discussion with the PMPB, and the Company expects a final protocol to be submitted for approval by year end. 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 In September 2013, TNI BioTech International, Ltd., a wholly-owned subsidiary of the Company, signed 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 agreement gives AHAR exclusive rights to sell to customers in the private sector and non-exclusive rights to public-sector companies. The Company may terminate the exclusivity if AHAR fails to meet minimum purchase targets. Unless terminated earlier, the agreement is valid for five years, subject to the right of the parties to extend for one additional five-year term. 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 Pharmas first-year purchase commitment. In August 2015, the Company announced the signing of a letter of interest with GB Pharma/AHAR and Fidson Healthcare of Nigeria to enable Fidson to market and sell LodonalTM in Nigeria. The agreement will become effective upon completion of the ongoing NAFDAC-approved trial evaluating the efficacy and safety of Lodonal. The agreement will require an amendment to the agreement signed in September 2013 with AHAR, so that both contracts conform. In October, 2015 the Company announced that it does not expect the results of the trial to be available until receipt of approval by Nigerian National Agency for Food and Drug Administration and Control, targeted for the first quarter of 2016. Other Agreements for Africa In September 2014, Airmed Biopharma Limited (Airmed), a wholly-owned subsidiary of the Company, signed an exclusive agency agreement with GB Pharma Holdings Inc., to market and promote Lodonal, and to solicit purchase orders for Lodonal, in various counties in Africa. Airmed is required to pay GB Pharma Holdings Inc. a commission based on payments actually received on purchase orders procured by the GB Pharma Holdings Inc. from customers in Africa during the term of the agreement, after deduction for certain costs incurred by Airmed for product supply. The agreement has an initial term of five years, with automatic renewals for additional one-year periods unless terminated by either party. 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 nine 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 nine months or the failure to receive approval of clinical trials is due to the Companys 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. 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 Companys 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. In accordance with these agreements, Qianjiang Pharmaceutical has acquired MENK material for the preclinical and clinical trial. MENK toxicology studies are in process under the trial, including a six-month toxicology study in animals. Other studies, including stability and general pharmacology (on normal animals to determine the effect to heart, blood pressure, etc.) have commenced. All FDA-required tests, including formulation and quality control tests, are in process. 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 FDAs Current Good Manufacturing Practice regulations (cGMP) and the Companys 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 September 30, 2015, the Company was a party to an agreement to lease office space in Orlando, Florida. The lease expires on April 30, 2016. Rent expense for the quarters ended September 30, 2015 and 2014 was $4,988 and $40,605, respectively. Legal Proceedings 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 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 September 2015, a claim was filed for breach of contract, account stated, quantum meruit, and unjust enrichment in District Court for the Middle District of Florida, Epstein Becker & Green PC v. TNI Biotech, Immune Therapeutics, Inc. Cytocom, Inc. |
12. Related Party Transactions
12. Related Party Transactions | 9 Months Ended |
Sep. 30, 2015 | |
Related Party Transactions [Abstract] | |
12. Related Party Transactions | On January 3, 2013, the Company formalized the terms under which Kelly OBrien 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 September 30, 2015 and 2014, the Company paid compensation to Ms. Wilson totaling $34,040 and $40,848 respectively. On May 15, 2015, the Company entered into a Royalty Agreement with Chris Pearce, a member of our Board of Directors. The Board of Directors approved the Agreement at a meeting held on April 16, 2015. The purpose of the Agreement is to compensate Pearce for his time as one of our founders and pay Pearce certain deferred compensation. Pursuant to the Agreement, Pearce shall receive a royalty payment in perpetuity in an amount equal to $0.010 per one tablet or capsule of low dose naltrexone sold by us outside of the United States, and $0.005 per one tablet or capsule of low dose naltrexone sold by us in the United States. The Agreement continues in effect in perpetuity unless terminated by the Company and Mr. Pearces written consent. At September 30, 2015, the Company owed Pearce $126 under the Agreement. |
2. Summary of Significant Acc19
2. Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Summary Of Significant Accounting Policies Policies | |
Basis of Presentation | The consolidated financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been omitted. However, in the opinion of management, all adjustments (which include only normal recurring adjustments, unless otherwise indicated) necessary to present fairly the financial position and results of operations for the periods presented have been made. The results for interim periods are not necessarily indicative of trends or of results to be expected for the full year. These financial statements should be read in conjunction with the financial statements of the Company for the year ended December 31, 2014 (including the notes thereto) set forth in Form 10-K. 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 Companys 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. |
Revenue Recognition | Revenue from product sales is recognized upon passage of title and risk of loss to customers. Provisions for discounts, rebates and sales incentives to customers, and returns and other adjustments are provided for in the period the related sales are recorded. Historical data are not yet readily available and reliable for use in estimating the amount of the reduction in gross sales. Revenue from the launch of a new product, from an improved version of an existing product, or for shipments in excess of a customer's normal requirements will be recorded when the conditions noted above are met. In those situations, management will record a returns reserve for such revenue, if necessary. If in future the Company participates in selling arrangements that include multiple deliverables (e.g., instruments, reagents, procedures, and service agreements), under these arrangements, the Company will recognize revenue upon delivery of the product or performance of the service and will allocate the revenue based on the relative selling price of each deliverable, which will be based primarily on vendor specific objective evidence. Revenue from license of product rights is recorded over the periods earned. In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers, which provides a single comprehensive model for accounting for revenue from contracts with customers and will supersede most existing revenue recognition guidance. Early adoption is not permitted. The standard becomes effective for the Company in the first quarter of 2017. The Company is currently evaluating the effect, if any, that the standard will have on its consolidated financial statements and related disclosures. |
Use of Estimates | The preparation of the Companys 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 exceed the federally insured limits. The cash accounts are insured by the Federal Deposit Insurance Corporation up to $250,000. At September 30, 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 the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 825, Financial Instruments |
Fair Value Measurements | The ASC Topic 820, Fair Value Measurement, |
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 September 30, 2015 and September 30, 2014 was $638 and $668, respectively. Depreciation expense from continuing operations for the nine months ended September 30, 2015 and September 30, 2014 was $1,974 and $1,817, respectively. |
Intangible Assets | Costs incurred to acquire and/or develop the Companys 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 September 30, 2015 and September 30, 2014, the Company did not capitalize any such costs. (See Note 10). During the nine months ended September 30, 2015 and September 30, 2014, the Company did not capitalize any such costs. Amortization expense for the quarters ended September 30, 2015 and September 30, 2014 was $148,058 and $719,701, respectively. Amortization expense for the nine months ended September 30, 2015 and September 30, 2014 was $444,175 and $2,157,125, 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, Property, Plant and Equipment |
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 Companys 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, 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 September 30, 2015, and December 31, 2014, the Company does not have a liability for unrecognized tax uncertainties. The Companys policy is to record interest and penalties on uncertain tax positions as income tax expense. At the end of the quarters ended September 30, 2015 and September 30, 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 value of the Companys common stock at the date of the agreement. |
Non-controlling Interest | In accordance with ASC 810, Consolidation The Company has adopted changes issued by the 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 parents equity; consolidated net income be reported at amounts inclusive of both the parents and non-controlling interests 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 Companys net loss position. A calculation of basic and diluted net loss per share follows: For the three months ended September 30, For the nine months ended September 30, 2015 2014 2015 2014 Historical net loss per share: Numerator Net loss $ (4,025,309 ) $ (11,202,175 ) $ 9,499,641 ) $ (34,454,263 ) Net loss attributed to Common stockholders $ (3,859,550 ) $ (11,202,175 ) $ (9,070,926 ) $ (34,454,263 ) Denominator Weighted-average common shares outstanding Denominator for basic and diluted net loss per share 156,814,094 94,316,453 147,365,571 87,875,552 Basic and diluted net loss per share attributed to common stockholders $ (0.02 ) $ (0.12 ) $ (0.06 ) $ (0.40 ) The Companys 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: At September 30, 2015 2014 Warrants to purchase Common stock 9,355,250 8,986,750 9,355,250 8,986,750 |
Recent Accounting Standards | During the quarter ended September 30, 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 Companys consolidated financial statements. In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers |
2. Summary of Significant Acc20
2. Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Summary Of Significant Accounting Policies Tables | |
Schedule of basic and diluted net loss per share | For the three months ended September 30, For the nine months ended September 30, 2015 2014 2015 2014 Historical net loss per share: Numerator Net loss $ (4,025,309 ) $ (11,202,175 ) $ 9,499,641 ) $ (34,454,263 ) Net loss attributed to Common stockholders $ (3,859,550 ) $ (11,202,175 ) $ (9,070,926 ) $ (34,454,263 ) Denominator Weighted-average common shares outstanding Denominator for basic and diluted net loss per share 156,814,094 94,316,453 147,365,571 87,875,552 Basic and diluted net loss per share attributed to common stockholders $ (0.02 ) $ (0.12 ) $ (0.06 ) $ (0.40 ) |
Schedule of antidilutive securities | At September 30, 2015 2014 Warrants to purchase Common stock 9,355,250 8,986,750 9,355,250 8,986,750 |
3. Property and Equipment (Tabl
3. Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Property And Equipment Tables | |
Schedule of Property and Equipment | September 30, 2015 December 31, 2014 Property and equipment: Computer equipment $ 8,013 $ 8,013 Less accumulated depreciation (5,752 ) (3,778 ) Property and equipment, net $ 2,261 $ 4,235 |
4. Accrued Liabilities (Tables)
4. Accrued Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Accrued Liabilities Tables | |
Accrued Liabilities | September 30, 2015 December 31, 2014 (in thousands) Retainer for legal services $ 60 $ 60 Accrued payroll to officers and others 472 763 Accrued interest - notes payable 120 2 Estimated legal settlement 279 279 Other accrued liabilities - 7 State payroll taxes 2 1 Total accrued liabilities $ 933 $ 1,112 |
5. Notes Payable (Tables)
5. Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Notes Payable Tables | |
Schedule of Notes payable | September 30, 2015 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. The Company was unable to repay the note at maturity and the note is in default, although no demand for repayment has been made by the lender. $ 100,000 $ 100,000 Promissory notes issued between November 26, 2014 and September 30, 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 Companys 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. Notes aggregating $547,500 were in default at September 30, 2015, as the Company was unable to pay installments on those notes on their due dates. No demands for repayment have been made by the lenders. 711,500 406,525 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 notes issued between May 1, 2015 and September 30, 2015, and maturing between June 14, 2015 and December 31, 2015. Lenders on loans aggregating $506,433 earn interest at rates between 10% and 18% per annum. On loans aggregating $163,500, interest is payable in a fixed amount not tied to a specific interest rate. At September 30, 2015, total interest payable is $51,500. Notes aggregating $263,500 were in default at September 30, 2015, as the Company was unable to repay those notes on their due dates. No demands for repayment have been made by the lenders. 669,933 - 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 the Company. The note earns interest at a rate of 2% per annum and is due on September 30, 2015. The Company was unable to repay the note at maturity and the note is in default, although no demand for repayment has been made by the lender. 200,000 - Promissory notes issued by Cytocom Inc. between April 29, 2015 and September 30, 2015. Lenders earn interest at rates between 5% and 10% per annum. Notes are repayable between September 30, 2015 and September 30, 2016. The Company was unable to repay notes aggregating $50,000 that matured on or before September 30, 2015, although no demand for repayment has been made by the lenders. 150,000 - Total 1,838,433 513,525 Less: Current portion (1,729,100 ) (186,067 ) Long-Term debt, less current portion $ 109,333 $ 327,458 |
6. Capital Structure-Common S24
6. Capital Structure-Common Stock and Common Stock Purchase Warrants (Tables) | 9 Months Ended |
Sep. 30, 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 390,000 $ 0.07-0.50 $ 0.42 Expired (407,500 ) $ 1.50-2.00 $ 1.50 Exercised (24,000 ) $ 0.50 $ 0.50 Warrants as of September 30, 2015 9,355,250 $ 0.07-15.00 $ 1.68 |
Summary of outstanding warrants | Expiration Date Number of Shares Exercise Price Remaining Life (years) Fourth Quarter 2015 268,750 $ 1.50 .25 Second Quarter 2016 37,500 $ 5.00 .75 Third Quarter 2016 525,000 $ 1.00-5.00 1.00 Third Quarter 2017 1,500.000 $ 1.00-1.50 2.00 Fourth Quarter 2017 2,941,666 $ 1.00-9.00 2.25 First Quarter 2018 127,500 $ 15.00 2.50 Second Quarter 2018 33,334 $ 15.00 2.75 Third Quarter 2018 650,000 $ 1.00-1.50 3.00 Fourth Quarter 2018 1,197,500 $ 1.00-1.50 3.25 First Quarter 2019 1,024,000 $ 1.50 3.50 Second Quarter 2019 90,000 $ 0.070.23 3.75 Third Quarter 2019 260,000 $ 0.50 4.00 Fourth Quarter 2019 400,000 $ 0.14-1.50 4.25 Second Quarter 2020 300,000 $ 0.50 4.75 |
2. Summary of Significant Acc25
2. Summary of Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Numerator | ||||
Net loss | $ (4,025,309) | $ (11,202,175) | $ (9,499,641) | $ (35,454,263) |
Net loss attributed to Common stockholders | $ (3,859,550) | $ (11,202,175) | $ (9,070,926) | $ (35,454,263) |
Denominator | ||||
Weighted-average common shares outstanding-Denominator for basic and diluted net loss per share | 156,814,094 | 94,316,453 | 147,365,571 | 87,875,552 |
Basic and diluted net loss per share attributed to common stockholders | $ (0.02) | $ (0.12) | $ (0.06) | $ (0.40) |
2. Summary of Significant Acc26
2. Summary of Significant Accounting Policies (Details 1) - shares | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Summary Of Significant Accounting Policies Tables | ||
Warrants to purchase Common stock | 9,355,250 | 8,986,750 |
Potentially dilutive securities have been excluded from the computations of diluted weighted average shares outstanding | 9,355,250 | 8,986,750 |
2. Summary of Significant Acc27
2. 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 | ||||
Depreciation expense | $ 638 | $ 668 | $ 1,974 | $ 1,817 |
Amortization expense | $ 148,058 | $ 719,701 | $ 444,175 | $ 2,157,125 |
3. Property and Equipment (Deta
3. Property and Equipment (Details) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Property And Equipment Details | ||
Computer equipment | $ 8,013 | $ 8,013 |
Less accumulated depreciation | (5,752) | (3,778) |
Property and equipment, net | $ 2,261 | $ 4,235 |
4. Accrued Liabilities (Details
4. Accrued Liabilities (Details) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Accrued Liabilities Details | ||
Retainer for legal services | $ 60,000 | $ 60,000 |
Accrued payroll to officers and others | 472,000 | 763,000 |
Accrued interest - notes payable | 120,000 | 2,000 |
Estimated legal settlement | $ 279,000 | 279,000 |
Other accrued liabilities | 7,000 | |
State payroll taxes | $ 2,000 | 1,000 |
Total accrued liabilities | $ 933,000 | $ 1,112,000 |
5. Notes Payable (Details)
5. Notes Payable (Details) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2014 |
Total | $ 1,838,433 | $ 513,525 | |
Less: Current portion | (1,729,100) | (186,067) | |
Long-Term debt, less current portion | 109,333 | 327,458 | |
Note 1 [Member] | |||
Total | 100,000 | 100,000 | |
Note 2 [Member] | |||
Total | 711,500 | 406,525 | |
Note 3 [Member] | |||
Total | 7,000 | $ 7,000 | |
Note 4 [Member] | |||
Total | 669,933 | ||
Note 5 [Member] | |||
Total | 200,000 | ||
Note 6 [Member] | |||
Total | $ 150,000 |
6. Capital Structure-Common S31
6. Capital Structure-Common Stock and Common Stock Purchase Warrants (Details) | 9 Months Ended |
Sep. 30, 2015$ / sharesshares | |
Number of Warrants | |
Beginning Balance | shares | 9,396,750 |
Issued | shares | 390,000 |
Expired | shares | (407,500) |
Exercised | shares | (24,000) |
Ending Balance | shares | 9,355,250 |
Exercise Price | |
Beginning Balance Minimum | $ 0.14 |
Beginning Balance Maximum | 0.15 |
Issued Minimum | 0.07 |
Issued Maximum | 0.50 |
Expired Minimum | 1.50 |
Expired Maximum | 2 |
Exercised | 0.50 |
Ending Balance Minimum | 0.07 |
Ending Balance Maximum | 15 |
Weighted Average Exercise Price | |
Beginning Balance | 1.72 |
Issued | 0.42 |
Expired | 1.50 |
Exercised | 0.50 |
Ending Balance | $ 1.68 |
6. Capital Structure-Common S32
6. Capital Structure-Common Stock and Common Stock Purchase Warrants (Details 1) - shares | 9 Months Ended | |
Sep. 30, 2015 | Dec. 31, 2014 | |
Number of Shares | 9,355,250 | 9,396,750 |
Fourth Quarter 2015 | ||
Number of Shares | 268,750 | |
Exercise Price | 1.50 | |
Remaining Life (years) | 3 months | |
Second Quarter 2016 | ||
Number of Shares | 37,500 | |
Exercise Price | 5 | |
Remaining Life (years) | 9 months | |
Third Quarter 2016 | ||
Number of Shares | 525,000 | |
Exercise Price | 1.00-5.00 | |
Remaining Life (years) | 1 year | |
Third Quarter 2017 | ||
Number of Shares | 1,500,000 | |
Exercise Price | 1.00-1.50 | |
Remaining Life (years) | 2 years | |
Fourth Quarter 2017 | ||
Number of Shares | 2,941,666 | |
Exercise Price | 1.00-9.00 | |
Remaining Life (years) | 2 years 3 months | |
First Quarter 2018 | ||
Number of Shares | 127,500 | |
Exercise Price | 15 | |
Remaining Life (years) | 2 years 6 months | |
Second Quarter 2018 | ||
Number of Shares | 33,334 | |
Exercise Price | 15 | |
Remaining Life (years) | 2 years 9 months | |
Third Quarter 2018 | ||
Number of Shares | 650,000 | |
Exercise Price | 1.00-1.50 | |
Remaining Life (years) | 3 years | |
Fourth Quarter 2018 | ||
Number of Shares | 1,197,500 | |
Exercise Price | 1.00-1.50 | |
Remaining Life (years) | 3 years 3 months | |
First Quarter 2019 | ||
Number of Shares | 1,024,000 | |
Exercise Price | 1.50 | |
Remaining Life (years) | 3 years 6 months | |
Second Quarter 2019 | ||
Number of Shares | 90,000 | |
Exercise Price | 0.070.23 | |
Remaining Life (years) | 3 years 9 months | |
Third Quarter 2019 | ||
Number of Shares | 260,000 | |
Exercise Price | 0.50 | |
Remaining Life (years) | 4 years | |
Fourth Quarter 2019 | ||
Number of Shares | 400,000 | |
Exercise Price | 0.14-1.50 | |
Remaining Life (years) | 4 years 3 months | |
Second Quarter 2020 | ||
Number of Shares | 300,000 | |
Exercise Price | 0.50 | |
Remaining Life (years) | 4 years 9 months |
7. Stock Compensation (Details
7. Stock Compensation (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Stock Compensation Details Narrative | ||
Common stock issued for consulting fees, shares | 16,922,504 | 16,390,000 |
Common stock issued for consulting fees, amount | $ 1,029,375 | $ 12,662,001 |
Amortization of prepaid services | $ 3,895,018 | $ 19,771,875 |
11. Commitments and Contingen34
11. Commitments and Contingencies (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Commitments And Contingencies Details Narrative | ||
Rent expense | $ 4,988 | $ 40,605 |
12. Related Party Transactions
12. Related Party Transactions (Details Narrative) - USD ($) | 3 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Owed Pearce | $ 126 | |
Ms. Wilson [Member] | ||
Compensation paid | $ 34,040 | $ 40,848 |