Nugenerex Immuno-oncology (NUGX) 10-Q 17 Jun 20 2020 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jan. 31, 2020	Jun. 17, 2020
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jan. 31, 2020
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2020
Current Fiscal Year End Date	--07-31
Entity File Number	000-56153
Entity Registrant Name	Nugenerex Immuno-oncology, Inc.
Entity Central Index Key	0001804585
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	false
Entity Shell Company	false
Entity Incorporation, State or Country Code	DE
Entity Common Stock, Shares Outstanding		400,000,000

CONDENSED BALANCE SHEETS (Unaud

CONDENSED BALANCE SHEETS (Unaudited) - USD ($)	Jan. 31, 2020	Jul. 31, 2019
Current Assets:
Cash and total current assets	$ 174	$ 389
LIABILITIES AND STOCKHOLDERS' DEFICIT
Accounts payable and accrued expenses	349,732	12,528
Payable to foundation for services	1,315,817	1,315,817
Interest payable to foundation	3,464,457	3,055,945
Total Current Liabilities	5,130,006	4,384,290
Commitments and Contingencies	0	0
Stockholders' Deficit
Common stock, $0.001 par value, 400,000,000 shares authorized, issued, and outstanding	400,000	400,000
Additional paid-in capital	32,080,686	32,050,986
Accumulated deficit	(37,610,518)	(36,834,887)
Total Stockholders' Deficit	(5,129,832)	(4,383,901)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$ 174	$ 389

CONDENSED BALANCE SHEETS (Paren

CONDENSED BALANCE SHEETS (Parenthetical) - $ / shares	Jan. 31, 2020	Jul. 31, 2019
Statement of Financial Position [Abstract]
Common stock par value	$ 0.001	$ 0.001
Common stock shares authorized	400,000,000	400,000,000
Common stock shares issued	400,000,000	400,000,000
Common stock outstanding	400,000,000	400,000,000

CONDENSED STATEMENTS OF OPERATI

CONDENSED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jan. 31, 2020	Jan. 31, 2019	Jan. 31, 2020	Jan. 31, 2019
Revenue
Licensing revenue	$ 0	$ 0	$ 0	$ 0
Operating expenses
Research and development	3,500	342,000	255,265	354,000
General and administrative	80,050	892	111,854	8,968
Total operating expenses	83,550	342,892	367,119	362,968
Operating loss	(83,550)	(342,892)	(367,119)	(362,968)
Other Expense
Interest expense	(208,817)	(174,652)	(408,512)	(341,674)
Net Loss	$ (292,367)	$ (517,544)	$ (775,631)	$ (704,642)
Net Loss per Common Share - basic and diluted	$ 0	$ 0	$ 0	$ 0
Shares Used to Compute Net Loss per Share - basic and diluted	400,000,000	400,000,000	400,000,000	400,000,000

CONDENSED STATEMENTS OF STOCKHO

CONDENSED STATEMENTS OF STOCKHOLDERS' DEFICIT (Unaudited) - USD ($)	Common Stock	Additional Paid-In Capital	Accumulated Deficit	Total
Beginning balance, shares at Jul. 31, 2018	400,000
Beginning balance, value at Jul. 31, 2018	$ 400,000	$ 31,663,656	$ (35,726,871)	$ (3,663,215)
Contribution from Generex		18,317		18,317
Net Loss			(187,098)	(187,098)
Ending balance, shares at Oct. 31, 2018	400,000
Ending balance, value at Oct. 31, 2018	$ 400,000	31,681,973	(35,913,969)	(3,831,996)
Contribution from Generex		342,847		342,847
Net Loss			(517,544)	(517,544)
Ending balance, shares at Jan. 31, 2019	400,000
Ending balance, value at Jan. 31, 2019	$ 400,000	32,024,820	(36,431,513)	(4,006,693)
Beginning balance, shares at Jul. 31, 2019	400,000
Beginning balance, value at Jul. 31, 2019	$ 400,000	32,050,986	(36,834,887)	(4,383,901)
Contribution from Generex		26,586		26,586
Net Loss			(483,264)	(483,264)
Ending balance, shares at Oct. 31, 2019	400,000
Ending balance, value at Oct. 31, 2019	$ 400,000	32,077,572	(37,318,151)	(4,840,579)
Contribution from Generex		3,114		3,114
Net Loss			(292,367)	(292,367)
Ending balance, shares at Jan. 31, 2020	400,000
Ending balance, value at Jan. 31, 2020	$ 400,000	$ 32,080,686	$ (37,610,518)	$ (5,129,832)

CONDENSED STATEMENTS OF CASH FL

CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	6 Months Ended
	Jan. 31, 2020	Jan. 31, 2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (775,631)	$ (704,642)
Changes in operating assets and liabilities:
Interest payable to foundation	408,512	341,675
Accounts payable and accrued expenses	366,904	362,421
Net cash used in operating activities and decrease in cash and cash equivalents	(215)	(546)
Cash, beginning of period	389	1,025
Cash, end of period	174	479
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest	0	0
Cash paid for income taxes	0	0
NON-CASH INVESTING AND FINANCING ACTIVITES:
Expenses paid by parent as non-cash capital contributions	$ 29,700	$ 361,164

Going Concern

Going Concern	6 Months Ended
	Jan. 31, 2020
Going Concern
Going Concern	Note 1 Going Concern: The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which contemplates continuation of the Company as a going concern. The Company has experienced recurring net losses and negative cash flows from operations since inception and has both accumulated deficits of approximately $37.6 million and a working capital deficiency of approximately $5.1 million as of January 31, 2020. The Company’s parent, Generex Biotechnology Corporation (“Generex”) has funded substantially all the Company’s underlying working capital deficiencies. The uncertain economic fallout from the COVID -19 pandemic may also adversely affect our operations (See Commitments and Contingencies). These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The Company will continue to require substantial funds to implement its business plans. Management’s plans, to meet its operating cash flow requirements, include financing activities such as private placements of its common stock, preferred stock offerings, and issuances of debt and convertible debt instruments. There are no assurances that such additional funding will be achieved and that the Company will succeed in its future operations. Management is also actively pursuing financial and strategic alternatives, including strategic investments and divestitures, industry collaboration activities and strategic partners. These financial statements do not include any adjustments to the recoverability and classification of recorded assets amounts and classification of liabilities that might be necessary should the Company not be able to continue as a going concern. The Company’s inability to obtain required funding in the near future or its inability to obtain funding on favorable terms will have a material adverse effect on its operations and strategic development plan for future growth. If the Company cannot successfully raise additional capital and implement its strategic development plan, its liquidity, financial condition, and business prospects will be materially and adversely affected, and the Company may have to cease operations.

Summary of Significant Accounti

Summary of Significant Accounting Policies	6 Months Ended
	Jan. 31, 2020
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	Note 2 – Summary of Significant Accounting Policies: Basis of Presentation The Company’s financial statements have been included in consolidated financial statements of its parent, Generex and the Company has been dependent on Generex to fund its operations. Generex does not have costs centralized or shared services departments serving all its subsidiaries, accordingly, no allocations of centralized or shared service are necessary or included in the financial statements, as they are de-minimis. The accompanying unaudited condensed financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments, which include only normal recurring adjustments, considered necessary for a fair presentation have been included. The Company’s fiscal year ends on July 31 of each calendar year. Operating results for the three and six months ended January 31, 2020 are not necessarily indicative of the results that may be expected for the fiscal year ending July 31, 2020. The balance sheet at January 31, 2020 does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. Research and Development Costs Expenditures for research and development are expensed as incurred and include, among other costs, those related to the production of experimental drugs, and amounts incurred for conducting clinical trials. Amounts expected to be received from governments under research and development tax credit arrangements are offset against current research and development expense. Income Taxes NGIO is included in the Generex consolidated federal tax return. All tax provisions and the related tax liabilities and assets have been computed using the separate return method, as if the company was the legal taxpayer. Revenue The Company expects to generate revenue from licenses to access its intellectual property. If a license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues attributed to the license when the license is transferred to the customer and the customer is able to use and benefit from the license. For licenses that are bundled with other promises, the Company utilizes judgement to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time. At the inception of each arrangement that contain development milestones, the Company evaluates whether the development milestones included are considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the control of the Company or the licensee, such as regulatory approvals, are not generally considered probable of being achieved until those approvals are received. New Accounting Standards The Company has reviewed the FASB issued Accounting Standards Update (“ASU”) accounting pronouncements and interpretations thereof that have effective dates during the periods reported and in future periods. The Company does not believe that any new or modified principles will have a material impact on the Company’s reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of our financial management and certain standards are under consideration. In February 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-02, Leases

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jan. 31, 2020
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Note 3 - Commitments and Contingencies: Commitments On November 29, 2017, the Company entered into a clinical trial agreement (“CTA”) with a shanghai based, contract research organization (“CRO”) for a four-year Phase II study of AE37 for the treatment of metastatic triple negative breast cancer. In accordance with the CTA, the Company agrees to pay the CRO amounts not to exceed $5,747,039, unless approved in writing by both parties, upon completion of certain milestones and achievements over the four-year study On November 20, 2018, the Company entered into a clinical trial agreement with NSABP Foundation, Inc. (“NSABP”) under which NSABP will conduct clinical research using the Company’s AE37 peptide immunotherapeutic vaccine in combination with pembrolizumab (Ketruda®) for the treatment of metastatic triple negative breast cancer. The company has agreed to pay NSABP an amount not to exceed $2,118,461 based on NSABP achieving various milestones. The Company recognized $251,459 and $340,000 as research and development related to the clinical trial agreement with NSABP for the six-month periods ended January 31, 2020 and 2019, respectively. For the three-month periods ended January 31, 2020 and 2019 the Company recognized $0 and $340,000 of research and development expense related to the NSABP clinical trial agreement, respectively. Payable to Foundation On February 1, 2007, the Company entered into a clinical study agreement with the Henry J. Jackson Foundation (the “Foundation” for the clinical research and development of AE37 for the treatment of breast cancer). The Company agreed to pay the foundation total compensation of $2,700,000 payable at various intervals over the term of the agreement. On September 9, 2013, the Company entered into a forbearance agreement (the “Forbearance Agreement”) with the Foundation and under which the Company acknowledged that they were in arrears on its payment and interest obligations to the Foundation in the amount of $1,315,817. Pursuant to the Forbearance Agreement, the Company and the Foundation agreed that in exchange for deferring the overdue payments the Company would among other matters, pay the foundation (i) the final $200,000 upon completion of the study and acceptance of all study documents, 274 (ii) for a royalty of 5% of net third party sales and (iii) the original forbearance amount will continue to bear interest at 1.5% per month, compounded. The Foundation may terminate the Forbearance Agreement by providing the Company written notice should the Company, among other matters, fail to make payments due under the Forbearance Agreement. The foundation has not provided the study documents to the Company. As of January 31, 2020, and July 31, 2019, the Company’s payable to the foundation for services was $1,315,817. Interest payable to the Foundation was $3,464,457 and $3,055,945 as of January 31, 2020 and July 31, 2019, respectively. Interest accrued related to the payable to the foundation was $208,817 and $174,652, respectively for the three months ended January 31, 2020 and 2019; and $408,512 and $341,674, respectively, for the six months ended January 31, 2020 and 2019. Related Party Expenses paid by Generex on behalf of the Company have been treated as capital contributions from Generex as Generex will not be reimbursed by the Company for these expenses. For the six-month periods ended January 31, 2020 and 2019, Generex paid expenses of $29,700 and $361,164, respectively COVID-19 The ongoing coronavirus outbreak which began in China at the beginning of 2020 has impacted various businesses throughout the world, including travel restrictions and the extended shutdown of certain businesses in impacted geographic regions. If the coronavirus outbreak situation should continue to worsen, we may experience disruptions to our business including, but not limited disruptions of our ongoing clinical trials and the operations of our partners. The extent to which the coronavirus impacts our operations or those of our third-party partners will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the outbreak, new information that may emerge concerning the severity of the coronavirus and the actions to contain the coronavirus or treat its impact, among others. Any such disruptions or losses we incur could have a material adverse effect on our financial results and our ability to conduct business as expected.

Stockholders' Deficit

Stockholders' Deficit	6 Months Ended
	Jan. 31, 2020
Equity [Abstract]
Stockholders' Deficit	Note 4 - Stockholders’ Deficit: Common Stock On February 21, 2019, the Company issued a 4,000 to 1 stock split, in which all shares outstanding have been presented retrospectively for all periods presented. The Company has 400,000,000 authorized, issued, and outstanding shares of common stock with a $0.001 par value (the “Common Stock”). The holders of Common Stock are entitled to one vote per share of Common Stock held at the time of vote.

Income taxes

Income taxes	6 Months Ended
	Jan. 31, 2020
Income Tax Disclosure [Abstract]
Income taxes	Note 5–Income taxes: Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. 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 effect on net deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. At January 31, 2020, the Company had a full valuation allowance against its deferred tax assets, accordingly the Company did not recognize an income tax benefit for losses incurred during the three and six-month periods ended January 31, 2020.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Jan. 31, 2020
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The Company’s financial statements have been included in consolidated financial statements of its parent, Generex and the Company has been dependent on Generex to fund its operations. Generex does not have costs centralized or shared services departments serving all its subsidiaries, accordingly, no allocations of centralized or shared service are necessary or included in the financial statements, as they are de-minimis. The accompanying unaudited condensed financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments, which include only normal recurring adjustments, considered necessary for a fair presentation have been included. The Company’s fiscal year ends on July 31 of each calendar year. Operating results for the three and six months ended January 31, 2020 are not necessarily indicative of the results that may be expected for the fiscal year ending July 31, 2020. The balance sheet at January 31, 2020 does not include all of the information and footnotes required by U.S. GAAP for complete financial statements.
Research and Development Costs	Research and Development Costs Expenditures for research and development are expensed as incurred and include, among other costs, those related to the production of experimental drugs, and amounts incurred for conducting clinical trials. Amounts expected to be received from governments under research and development tax credit arrangements are offset against current research and development expense.
Income Taxes	Income Taxes NGIO is included in the Generex consolidated federal tax return. All tax provisions and the related tax liabilities and assets have been computed using the separate return method, as if the company was the legal taxpayer.
Revenue	Revenue The Company expects to generate revenue from licenses to access its intellectual property. If a license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues attributed to the license when the license is transferred to the customer and the customer is able to use and benefit from the license. For licenses that are bundled with other promises, the Company utilizes judgement to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time. At the inception of each arrangement that contain development milestones, the Company evaluates whether the development milestones included are considered probable of being reached and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the control of the Company or the licensee, such as regulatory approvals, are not generally considered probable of being achieved until those approvals are received.
New Accounting Standards	New Accounting Standards The Company has reviewed the FASB issued Accounting Standards Update (“ASU”) accounting pronouncements and interpretations thereof that have effective dates during the periods reported and in future periods. The Company does not believe that any new or modified principles will have a material impact on the Company’s reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of our financial management and certain standards are under consideration. In February 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-02, Leases

Going Concern (Details Narrativ

Going Concern (Details Narrative) - USD ($)	Jan. 31, 2020	Jul. 31, 2019
Going Concern
Accumulated deficits	$ (37,610,518)	$ (36,834,887)
Working capital deficiency	$ 5,100,000

Commitments and Contingencies (

Commitments and Contingencies (Details Narrative) - USD ($)	Feb. 04, 2007	Nov. 20, 2018	Nov. 29, 2017	Sep. 30, 2013	Jan. 31, 2020	Jan. 31, 2019	Jan. 31, 2020	Jan. 31, 2019	Jul. 31, 2019
Research and development expense					$ 3,500	$ 342,000	$ 255,265	$ 354,000
Payable to foundation for services					1,315,817		1,315,817		$ 1,315,817
Interest payable to foundation					3,464,457		3,464,457		$ 3,055,945
Interest expense					208,817	174,652	408,512	341,674
Related Party expenses							29,700	361,164
Clinical Trial Agreement (CTO) | Contract Research Organization (CRO)
Service fees			$ 5,747,039
Clinical Trial Agreement (CTO) | NSABP
Service fees		$ 2,118,461
Research and development expense					$ 0	$ 340,000	$ 251,459	$ 340,000
Clinical Study Agreement | Henry J. Jackson Foundation
Service fees	$ 2,700,000
Forbearance Agreement
Payment and interest obligations				$ 1,315,817
Amount received by foundation from company				Pay the foundation (i) the final $200,000 upon completion of the study and acceptance of all study documents, 274 (ii) for a royalty of 5% of net third party sales and (iii) the original forbearance amount will continue to bear interest at 1.5% per month, compounded. The Foundation may terminate the Forbearance Agreement by providing the Company written notice should the Company, among other matters, fail to make payments due under the Forbearance Agreement. The foundation has not provided the study documents to the Company

Stockholders' Deficit (Details

Stockholders' Deficit (Details Narrative) - $ / shares	1 Months Ended
	Feb. 21, 2020	Jan. 31, 2020	Jul. 31, 2019
Equity [Abstract]
Stock split	4,000 to 1
Common stock par value		$ 0.001	$ 0.001
Common stock shares authorized		400,000,000	400,000,000
Common stock shares issued		400,000,000	400,000,000
Common stock outstanding		400,000,000	400,000,000

Income taxes (Details Narrative

Income taxes (Details Narrative) - USD ($)	3 Months Ended	6 Months Ended
	Jan. 31, 2020	Jan. 31, 2020
Income Tax Disclosure [Abstract]
Income tax benefit	$ 0	$ 0