x
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QUARTERLY
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934.
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o
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TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
ACT
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California
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91-2021600
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(State
or Other Jurisdiction of Organization)
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(IRS
Employer Identification
Number)
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Large
accelerated filer o
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Accelerated
filer o
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Non-accelerated
filer o
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Smaller
reporting company x
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PART
I. FINANCIAL INFORMATION
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Item
1. Financial Statements
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3
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Consolidated
Balance Sheets as of September 30, 2009 (Unaudited) and December 31,
2008
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3
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Consolidated
Statements of Operations for the three and nine months ended September 30,
2008 and 2009 (Unaudited) and for the period from inception (February 1,
2000) to September 30, 2009 (Unaudited)
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4
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Consolidated
Statements of Cash Flows for the nine months ended September 30, 2008 and
2009 (Unaudited) and for the period from inception (February 1, 2000) to
September 30, 2009 (Unaudited)
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5
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Notes
to Unaudited Consolidated Financial Statements
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6
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Item
2. Management’s Discussion and Analysis of Financial Condition and Results
of Operations
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10
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Item
3. Quantitative and Qualitative Disclosures about Market
Risk
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16
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Item
4. Controls and Procedures
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17
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PART
II. OTHER INFORMATION
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Item
1. Legal Proceedings
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17
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Item
1A. Risk Factors
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18
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Item
2. Unregistered Sales of Equity Securities and Use of
Proceeds
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18
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Item
3. Defaults Upon Senior Securities
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18
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Item
4. Submission of Matters to a Vote of Security Holders
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18
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Item
5. Other Information
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18
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Item
6. Exhibits
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19
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SIGNATURES
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19
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December
31,
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September
30,
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|||||||
2008
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2009
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|||||||
(Unaudited)
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||||||||
ASSETS
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||||||||
Current
assets:
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||||||||
Cash
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$ | 50,910 | $ | 1,996,454 | ||||
Inventory
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10,770 | 66,860 | ||||||
Prepaid
expenses
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27,468 | 11,946 | ||||||
Total
current assets
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89,148 | 2,075,260 | ||||||
Property
and equipment, net
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9,941 | 7,673 | ||||||
Other
assets
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8,133 | 8,803 | ||||||
TOTAL
ASSETS
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$ | 107,222 | $ | 2,091,736 | ||||
LIABILITIES
AND STOCKHOLDERS' DEFICIT
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||||||||
Current
liabilities:
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||||||||
Accounts
payable
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$ | 156,399 | $ | 124,333 | ||||
Accrued
expenses
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849,856 | 1,025,557 | ||||||
Due
to officers
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1,557,301 | 1,536,031 | ||||||
Other
loans payable
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100,000 | 80,000 | ||||||
Total
current liabilities
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2,663,556 | 2,765,921 | ||||||
Stockholders'
deficit:
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||||||||
Common
stock, $0.001 par value, 2,000,000,000 shares authorized;
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||||||||
211,276,482
and 269,200,232 shares issued and outstanding,
respectively
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211,277 | 269,201 | ||||||
Additional
paid-in capital
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21,503,591 | 24,915,942 | ||||||
(Deficit)
accumulated during the development stage
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(24,271,202 | ) | (25,859,328 | ) | ||||
Total
stockholders' deficit
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(2,556,334 | ) | (674,185 | ) | ||||
TOTAL
LIABILITIES AND STOCKHOLDERS' DEFICIT
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$ | 107,222 | $ | 2,091,736 |
For
the
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||||||||||||||||||||
Period
From
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||||||||||||||||||||
February
1,
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||||||||||||||||||||
2000
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(Inception)
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||||||||||||||||||||
Through
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||||||||||||||||||||
Three Months Ended September
30,
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Nine Months Ended September
30,
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September
30,
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||||||||||||||||||
2008
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2009
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2008
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2009
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2009
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Sales
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$ | 3,045 | $ | 900 | $ | 3,045 | $ | 27,528 | $ | 51,773 | ||||||||||
Cost
of sales
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655 | - | 655 | 3,260 | 7,789 | |||||||||||||||
Gross
profit
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2,390 | 900 | 2,390 | 24,268 | 43,984 | |||||||||||||||
Costs
and expenses:
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||||||||||||||||||||
General
and administrative
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431,321 | 448,391 | 950,838 | 1,020,196 | 9,173,381 | |||||||||||||||
Research
and development
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- | 91,580 | - | 126,955 | 1,867,192 | |||||||||||||||
General
and administrative - stock based compensation
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75,000 | 195,000 | 500,000 | 410,000 | 7,839,657 | |||||||||||||||
Write-off
of advances to potential acquiree
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- | - | - | - | 629,000 | |||||||||||||||
Finance
costs
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- | - | - | - | 786,000 | |||||||||||||||
Interest
expense
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12,649 | 20,957 | 42,640 | 55,243 | 508,857 | |||||||||||||||
Amortization
of license agreement
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- | - | - | - | 155,210 | |||||||||||||||
Amortization
of intangibles
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- | - | - | - | 656,732 | |||||||||||||||
Losses
on settlements
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- | - | - | - | 1,261,284 | |||||||||||||||
Write-down
of investment in subsidiary
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- | - | - | - | 620,805 | |||||||||||||||
Equity
in loss of unconsolidated subsidiary
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- | - | - | - | 853,540 | |||||||||||||||
Write-off
of investment in Portage BioMed
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- | - | - | - | 60,000 | |||||||||||||||
Write-off
of investment in Xenacare
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- | - | - | - | 175,000 | |||||||||||||||
Net
gain from deconsolidation of Receptopharm
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- | - | - | - | (1,081,095 | ) | ||||||||||||||
Write-off
of goodwill
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- | - | - | - | 2,397,749 | |||||||||||||||
Total
costs and expenses
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518,970 | 755,928 | 1,493,478 | 1,612,394 | 25,903,312 | |||||||||||||||
Net
loss
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$ | (516,580 | ) | $ | (755,028 | ) | $ | (1,491,088 | ) | $ | (1,588,126 | ) | $ | (25,859,328 | ) | |||||
Per
share information - basic and diluted:
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||||||||||||||||||||
Loss
per common share
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$ | (0.00 | ) | $ | (0.00 | ) | $ | (0.01 | ) | $ | (0.01 | ) | ||||||||
Weighted
average common shares outstanding
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188,838,473 | 224,710,545 | 153,588,517 | 217,217,631 |
For
the
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||||||||||||
Period
From
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||||||||||||
February
1,
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||||||||||||
2000
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(Inception)
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Through
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||||||||||||
Nine months ended September
30,
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September
30,
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|||||||||||
2008
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2009
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2009
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Net
cash (used in) operating activities
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$ | (854,461 | ) | $ | (1,115,011 | ) | $ | (7,779,217 | ) | |||
Cash
flows from investing activities:
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||||||||||||
Cash
reduction due to deconsolidation of Infectech
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- | - | (2,997 | ) | ||||||||
Cash
reduction due to deconsolidation of Receptopharm
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- | - | (1,754 | ) | ||||||||
Cash
acquired in acquisition of Infectech
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- | - | 3,004 | |||||||||
Cash
acquired in acquisition of Receptopharm
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40,444 | - | 40,444 | |||||||||
Acquisition
of property and equipment
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- | - | (96,029 | ) | ||||||||
Loan
to Receptopharm
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(300,000 | ) | - | (300,000 | ) | |||||||
Investments
carried at cost
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- | - | (235,000 | ) | ||||||||
Net
cash (used in) investing activities
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(259,556 | ) | - | (592,332 | ) | |||||||
Cash
flows from financing activities:
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||||||||||||
Common
stock issued for cash
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808,500 | 3,060,275 | 6,668,275 | |||||||||
Proceeds
from convertible loans
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- | - | 304,750 | |||||||||
Proceeds
from notes payable
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- | 40,000 | 140,000 | |||||||||
Repayment
of notes payable
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(80,000 | ) | (80,000 | ) | ||||||||
Repayment
of stockholder loans
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- | (506,250 | ) | (615,000 | ) | |||||||
Loans
from stockholders
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231,000 | 546,530 | 3,949,978 | |||||||||
Net
cash provided by financing activities
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1,039,500 | 3,060,555 | 10,368,003 | |||||||||
Net
increase (decrease) in cash
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(74,517 | ) | 1,945,544 | 1,996,454 | ||||||||
Cash
- beginning of period
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122,810 | 50,910 | - | |||||||||
Cash
- end of period
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$ | 48,293 | $ | 1,996,454 | $ | 1,996,454 | ||||||
Supplemental
Cash Flow Information:
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||||||||||||
Cash
paid for interest
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$ | - | $ | - | $ | - | ||||||
Cash
paid for income taxes
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$ | - | $ | - | $ | - | ||||||
Non-cash
investing and financing activities:
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Assumption
of obligation under license agreement
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$ | - | $ | - | $ | 1,750,000 | ||||||
Value
of shares issued as consideration in acquisition of Nutra Pharma,
Inc.
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$ | - | $ | - | $ | 112,500 | ||||||
Payments
of license fee obligation by stockholder
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$ | - | $ | - | $ | 208,550 | ||||||
Conversion
of stockholder loan to common stock
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$ | - | $ | - | $ | 862,012 | ||||||
Loan
advances to Bio Therapeutics, Inc. by stockholder
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$ | - | $ | - | $ | 629,000 | ||||||
Value
of common stock issued as consideration in acquisition of Infectech,
Inc.
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$ | - | $ | - | $ | 4,486,375 | ||||||
Liabilities
assumed in acquisition of Infectech, Inc.
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$ | 115,586 | ||||||||||
Cancellation
of common stock
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$ | - | $ | - | $ | 14,806 | ||||||
Value
of common stock issued by stockholder to third party in connection with
settlement
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$ | - | $ | - | $ | 229,500 | ||||||
Value
of common stock issued by stockholder to employee for services
rendered
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$ | - | $ | - | $ | 75,000 | ||||||
Net
deferred taxes recorded in connection with acquisition
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$ | - | $ | - | $ | 967,586 | ||||||
Notes
payable settled with common stock
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$ | - | $ | - | $ | 98,000 | ||||||
Settlement
of stockholder loan in exchange for common stock of
subsidiary
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$ | - | $ | - | $ | 1,384,931 | ||||||
Settment
of debt with common stock
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$ | 1,200,000 | $ | - | $ | 1,406,750 | ||||||
Expenses
paid by stockhoder
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$ | - | $ | - | $ | 119,140 | ||||||
Value
of common stock issued for the acquisition of Receptopharm
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$ | - | $ | - | $ | 1,050,000 |
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Number
of
shares
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Weighted
average
exercise
price
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Weighted
average
fair
value
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|||||||||
Balance
December 31, 2008
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40,140,000
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$
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0.11
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$
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0.02
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|||||||
Exercised
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-
|
-
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-
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|||||||||
Issued
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10,575,000
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$
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0.10
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$
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0.02
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|||||||
Forfeited
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-
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-
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-
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|||||||||
Balance
September 30, 2009
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50,715,000
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$
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0.11
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$
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0.02
|
Exercise
Price
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Weighted
Average
Number
Outstanding
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Weighted
Average
Contractual
Life
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Weighted
Average
Exercise
Price
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||||||
$0.10
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47,715,000
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3.25
years
|
$
|
.10
|
|||||
$0.20
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1,000,000
|
1.33
years
|
.20
|
||||||
$0.27
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2,000,000
|
1.50
years
|
$
|
.27
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|||||
50,715,000
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·
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Safe
and Effective
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·
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All
Natural
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·
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Long-Acting
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·
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Easy
to Use
|
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·
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Non-Narcotic
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·
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Non-Addictive
|
|
·
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Analgesic
and Anti-Inflammatory
|
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·
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Launched
its initial print advertising campaign with ads appearing in Prevention,
Health, Star, Woman's World, Soap Opera, and Self
magazines.
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·
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Announced
that the Chain Drug Marketing Association (“CDMA”) will begin making
Cobroxin available for purchase through its 6,000 member
pharmacies.
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·
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Announced
an agreement to advertise Cobroxin in the official publication for NASCAR,
Racing One, for the 2010 racing
season.
|
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·
|
Announced
completion of an agreement to advertise Cobroxin in the 2009 National
Football Alumni Guide and Yearbook, a publication that is distributed to
football fans, current and past NFL players, team owners, coaches and
league executives.
|
|
·
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Hospitals;
|
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·
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Pharmaceutical
companies;
|
|
·
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Biotechnology
companies;
|
|
·
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Medical
device distributors;
|
|
·
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Governmental
organizations;
|
|
·
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Environmental
testing facilities; and
|
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·
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Government
water and soil testing facilities at the local, state and federal
levels.
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·
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Sell
or dispose of our assets, if any;
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·
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Pay
our liabilities in order of priority, if we have available cash to pay
such liabilities;
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·
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If
any cash remains after we satisfy amounts due to our creditors, distribute
any remaining cash to our shareholders in an amount equal to the net
market value of our net assets;
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·
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File
a Certificate of Dissolution with the State of California to dissolve our
corporation and close our business;
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·
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Make
the appropriate filings with the Securities and Exchange Commission so
that we will no longer be required to file periodic and other required
reports with the Securities and Exchange Commission, if, in fact, we are a
reporting company at that time; and
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·
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Make
the appropriate filings with the Financial Industry Regulatory Authority
(FINRA) to effect a delisting of our common stock, if, in fact, our common
stock is trading on the Over-the-Counter Bulletin Board at that
time.
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·
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Whether
we successfully develop and commercialize products from our research and
development activities.
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·
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If
we fail to compete effectively in the intensely competitive biotechnology
area, our operations and market position will be negatively
impacted.
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·
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If
we fail to successfully execute our planned partnering and out-licensing
of products or technologies, our future performance will be adversely
affected.
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·
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The
recent economic downturn and related credit and financial market crisis
may adversely affect our ability to obtain financing, conduct our
operations and realize opportunities to successfully bring our
technologies to market.
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·
|
Biotechnology
industry related litigation is substantial and may continue to rise,
leading to greater costs and unpredictable
litigation.
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·
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If
we fail to comply with extensive legal/regulatory requirements affecting
the healthcare industry, we will face increased costs, and possibly
penalties and business losses.
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·
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an
obligation under a guarantee contract;
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·
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a
retained or contingent interest in assets transferred to the
unconsolidated entity or similar arrangement that serves as credit,
liquidity or market risk support to such entity for such
assets;
|
·
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any
obligation, including a contingent obligation, under a contract that would
be accounted for as a derivative instrument,
or;
|
·
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any
obligation, including a contingent obligation, arising out of a variable
interest in an unconsolidated entity that is held by us and material to us
where such entity provides financing, liquidity, market risk or credit
risk support to, or engages in leasing, hedging or research and
development services with us.
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Exhibit No.
|
Title
|
|
31.1
|
Certification of
Chief Executive Officer and Chief Financial Officer pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.
|
|
32.1
|
Certification
of Chief Executive Officer and Chief Financial Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of
2002.
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Dated:
November 18, 2009
|
NUTRA
PHARMA CORP.
|
Registrant
|
/s/
Rik J. Deitsch
|
Rik
J. Deitsch
|
Chief
Executive Officer/Chief Financial
Officer
|