x
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QUARTERLY REPORT UNDER SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934.
|
¨
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TRANSITION REPORT UNDER SECTION
13 OR 15(d) OF THE EXCHANGE
ACT
|
California
|
91-2021600
|
|
(State
or Other Jurisdiction of Organization)
|
|
(IRS
Employer Identification
Number)
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Large
accelerated filer ¨
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Accelerated
filer ¨
|
Non-accelerated
filer ¨
|
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
|
|
|
||
Consolidated
Balance Sheets as of September 30, 2009 (Unaudited) and December 31,
2008
|
3
|
|
|
||
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)
|
4
|
|
|
||
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)
|
5
|
|
|
||
Notes
to Unaudited Consolidated Financial Statements
|
6
|
|
|
||
Item
2. Management’s Discussion and Analysis of Financial Condition and Results
of Operations
|
10
|
|
|
||
Item
3. Quantitative and Qualitative Disclosures about Market
Risk
|
17
|
|
|
||
Item
4. Controls and Procedures
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18
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PART
II. OTHER INFORMATION
|
||
|
||
Item
1. Legal Proceedings
|
18
|
|
Item
1A. Risk Factors
|
19
|
|
|
||
Item
2. Unregistered Sales of Equity Securities and Use of
Proceeds
|
19
|
|
Item
3. Defaults Upon Senior Securities
|
19
|
|
Item
4. Submission of Matters to a Vote of Security Holders
|
19
|
|
|
||
Item
5. Other Information
|
19
|
|
|
||
Item
6. Exhibits
|
20
|
|
|
||
SIGNATURES
|
20
|
December
31,
|
September
30,
|
|||||||
2008
|
2009
|
|||||||
(Unaudited)
|
||||||||
ASSETS
|
||||||||
Current
assets:
|
||||||||
Cash
|
$
|
50,910
|
$
|
1,996,454
|
||||
Inventory
|
10,770
|
66,860
|
||||||
Prepaid
expenses
|
27,468
|
11,946
|
||||||
Total
current assets
|
89,148
|
2,075,260
|
||||||
Property
and equipment, net
|
9,941
|
7,673
|
||||||
Other
assets
|
8,133
|
8,803
|
||||||
TOTAL
ASSETS
|
$
|
107,222
|
$
|
2,091,736
|
||||
LIABILITIES
AND STOCKHOLDERS' DEFICIT
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable
|
$
|
156,399
|
$
|
124,333
|
||||
Accrued
expenses
|
849,856
|
1,025,557
|
||||||
Due
to officers
|
1,557,301
|
1,536,031
|
||||||
Other
loans payable
|
100,000
|
80,000
|
||||||
Total
current liabilities
|
2,663,556
|
2,765,921
|
||||||
Stockholders'
deficit:
|
||||||||
Common
stock, $0.001 par value, 2,000,000,000 shares authorized;
|
||||||||
211,276,482
and 269,200,232 shares issued and outstanding,
respectively
|
211,277
|
269,201
|
||||||
Additional
paid-in capital
|
21,503,591
|
24,915,942
|
||||||
(Deficit)
accumulated during the development stage
|
(24,271,202
|
)
|
(25,859,328
|
)
|
||||
Total
stockholders' deficit
|
(2,556,334
|
)
|
(674,185
|
)
|
||||
TOTAL
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
$
|
107,222
|
$
|
2,091,736
|
For
the
|
||||||||||||||||||||
Period
From
|
||||||||||||||||||||
February
1,
|
||||||||||||||||||||
2000
|
||||||||||||||||||||
(Inception)
|
||||||||||||||||||||
Through
|
||||||||||||||||||||
Three
Months Ended September 30,
|
Nine
Months Ended September 30,
|
September
30,
|
||||||||||||||||||
2008
|
2009
|
2008
|
2009
|
2009
|
||||||||||||||||
Sales
|
$
|
3,045
|
$
|
900
|
$
|
3,045
|
$
|
27,528
|
$
|
51,773
|
||||||||||
Cost
of sales
|
655
|
-
|
655
|
3,260
|
7,789
|
|||||||||||||||
Gross
profit
|
2,390
|
900
|
2,390
|
24,268
|
43,984
|
|||||||||||||||
Costs
and expenses:
|
||||||||||||||||||||
General
and administrative
|
362,321
|
403,391
|
835,938
|
885,196
|
8,736,411
|
|||||||||||||||
Research
and development
|
69,000
|
136,580
|
114,900
|
261,955
|
2,304,162
|
|||||||||||||||
General
and administrative - stock based compensation
|
75,000
|
195,000
|
500,000
|
410,000
|
7,839,657
|
|||||||||||||||
Write-off
of advances to potential acquiree
|
-
|
-
|
-
|
-
|
629,000
|
|||||||||||||||
Finance
costs
|
-
|
-
|
-
|
-
|
786,000
|
|||||||||||||||
Interest
expense
|
12,649
|
20,957
|
42,640
|
55,243
|
508,857
|
|||||||||||||||
Amortization
of license agreement
|
-
|
-
|
-
|
-
|
155,210
|
|||||||||||||||
Amortization
of intangibles
|
-
|
-
|
-
|
-
|
656,732
|
|||||||||||||||
Losses
on settlements
|
-
|
-
|
-
|
-
|
1,261,284
|
|||||||||||||||
Write-down
of investment in subsidiary
|
-
|
-
|
-
|
-
|
620,805
|
|||||||||||||||
Equity
in loss of unconsolidated subsidiary
|
-
|
-
|
-
|
-
|
853,540
|
|||||||||||||||
Write-off
of investment in Portage BioMed
|
-
|
-
|
-
|
-
|
60,000
|
|||||||||||||||
Write-off
of investment in Xenacare
|
-
|
-
|
-
|
-
|
175,000
|
|||||||||||||||
Net
gain from deconsolidation of Receptopharm
|
-
|
-
|
-
|
-
|
(1,081,095
|
)
|
||||||||||||||
Purchased
research and development
|
-
|
-
|
-
|
-
|
2,397,749
|
|||||||||||||||
Total
costs and expenses
|
518,970
|
755,928
|
1,493,478
|
1,612,394
|
25,903,312
|
|||||||||||||||
Net
loss
|
$
|
(516,580
|
)
|
$
|
(755,028
|
)
|
$
|
(1,491,088
|
)
|
$
|
(1,588,126
|
)
|
$
|
(25,859,328
|
)
|
|||||
Per
share information - basic and diluted:
|
||||||||||||||||||||
Loss
per common share
|
$
|
(0.00
|
)
|
$
|
(0.00
|
)
|
$
|
(0.01
|
)
|
$
|
(0.01
|
)
|
||||||||
Weighted
average common shares outstanding
|
188,838,473
|
224,710,545
|
153,588,517
|
217,217,631
|
For
the
|
||||||||||||
Period
From
|
||||||||||||
February
1,
|
||||||||||||
2000
|
||||||||||||
(Inception)
|
||||||||||||
Through
|
||||||||||||
Nine
months ended September 30,
|
September
30,
|
|||||||||||
2008
|
2009
|
2009
|
||||||||||
Net
cash (used in) operating activities
|
$
|
(854,461
|
)
|
$
|
(1,115,011
|
)
|
$
|
(7,779,217
|
)
|
|||
Cash
flows from investing activities:
|
||||||||||||
Cash
reduction due to deconsolidation of Infectech
|
-
|
-
|
(2,997
|
)
|
||||||||
Cash
reduction due to deconsolidation of Receptopharm
|
-
|
-
|
(1,754
|
)
|
||||||||
Cash
acquired in acquisition of Infectech
|
-
|
-
|
3,004
|
|||||||||
Cash
acquired in acquisition of Receptopharm
|
40,444
|
-
|
40,444
|
|||||||||
Acquisition
of property and equipment
|
-
|
-
|
(96,029
|
)
|
||||||||
Loan
to Receptopharm
|
(300,000
|
)
|
-
|
(300,000
|
)
|
|||||||
Investments
carried at cost
|
-
|
-
|
(235,000
|
)
|
||||||||
Net
cash (used in) investing activities
|
(259,556
|
)
|
-
|
(592,332
|
)
|
|||||||
Cash
flows from financing activities:
|
||||||||||||
Common
stock issued for cash
|
808,500
|
3,060,275
|
6,668,275
|
|||||||||
Proceeds
from convertible loans
|
-
|
-
|
304,750
|
|||||||||
Proceeds
from notes payable
|
-
|
40,000
|
140,000
|
|||||||||
Repayment
of notes payable
|
(80,000
|
)
|
(80,000
|
)
|
||||||||
Repayment
of stockholder loans
|
-
|
(506,250
|
)
|
(615,000
|
)
|
|||||||
Loans
from stockholders
|
231,000
|
546,530
|
3,949,978
|
|||||||||
Net
cash provided by financing activities
|
1,039,500
|
3,060,555
|
10,368,003
|
|||||||||
Net
increase (decrease) in cash
|
(74,517
|
)
|
1,945,544
|
1,996,454
|
||||||||
Cash
- beginning of period
|
122,810
|
50,910
|
-
|
|||||||||
Cash
- end of period
|
$
|
48,293
|
$
|
1,996,454
|
$
|
1,996,454
|
||||||
Supplemental
Cash Flow Information:
|
||||||||||||
Cash
paid for interest
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||
Cash
paid for income taxes
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||
Non-cash
investing and financing activities:
|
||||||||||||
Assumption
of obligation under license agreement
|
$
|
-
|
$
|
-
|
$
|
1,750,000
|
||||||
Value
of shares issued as consideration in acquisition of Nutra Pharma,
Inc.
|
$
|
-
|
$
|
-
|
$
|
112,500
|
||||||
Payments
of license fee obligation by stockholder
|
$
|
-
|
$
|
-
|
$
|
208,550
|
||||||
Conversion
of stockholder loan to common stock
|
$
|
-
|
$
|
-
|
$
|
862,012
|
||||||
Loan
advances to Bio Therapeutics, Inc. by stockholder
|
$
|
-
|
$
|
-
|
$
|
629,000
|
||||||
Value
of common stock issued as consideration in acquisition of Infectech,
Inc.
|
$
|
-
|
$
|
-
|
$
|
4,486,375
|
||||||
Liabilities
assumed in acquisition of Infectech, Inc.
|
$
|
115,586
|
||||||||||
Cancellation
of common stock
|
$
|
-
|
$
|
-
|
$
|
14,806
|
||||||
Value
of common stock issued by stockholder to third party in connection with
settlement
|
$
|
-
|
$
|
-
|
$
|
229,500
|
||||||
Value
of common stock issued by stockholder to employee for services
rendered
|
$
|
-
|
$
|
-
|
$
|
75,000
|
||||||
Net
deferred taxes recorded in connection with acquisition
|
$
|
-
|
$
|
-
|
$
|
967,586
|
||||||
Notes
payable settled with common stock
|
$
|
-
|
$
|
-
|
$
|
98,000
|
||||||
Settlement
of stockholder loan in exchange for common stock of
subsidiary
|
$
|
-
|
$
|
-
|
$
|
1,384,931
|
||||||
Settlement
of debt with common stock
|
$
|
1,200,000
|
$
|
-
|
$
|
1,406,750
|
||||||
Expenses
paid by stockholder
|
$
|
-
|
$
|
-
|
$
|
119,140
|
||||||
Value
of common stock issued for the acquisition of Receptopharm
|
$
|
-
|
$
|
-
|
$
|
1,050,000
|
|
|
Number
of shares
|
|
|
Weighted
average
exercise
price
|
|
|
Weighted
average
fair value
|
|
|||
Balance
December 31, 2008
|
40,140,000
|
$
|
0.11
|
$
|
0.02
|
|||||||
Exercised
|
-
|
-
|
-
|
|||||||||
Issued
|
10,575,000
|
$
|
0.10
|
$
|
0.02
|
|||||||
Forfeited
|
-
|
-
|
-
|
|||||||||
Balance
September 30, 2009
|
50,715,000
|
$
|
0.11
|
$
|
0.02
|
Exercise
Price
|
|
Weighted
Average
Number
Outstanding
|
|
Weighted
Average
Contractual
Life
|
|
Weighted
Average
Exercise
Price
|
|
|||
$0.10
|
47,715,000
|
3.25
years
|
$
|
.10
|
||||||
$0.20
|
1,000,000
|
1.33
years
|
.20
|
|||||||
$0.27
|
2,000,000
|
1.50
years
|
$
|
.27
|
||||||
50,715,000
|
|
·
|
Safe and
Effective
|
|
·
|
All
Natural
|
|
·
|
Long-Acting
|
|
·
|
Easy to
Use
|
|
·
|
Non-Narcotic
|
|
·
|
Non-Addictive
|
|
·
|
Analgesic and
Anti-Inflammatory
|
|
·
|
Launched its initial print
advertising campaign with ads appearing in Prevention, Health, Star,
Woman's World, Soap Opera, and Self
magazines.
|
|
·
|
Announced that the Chain Drug
Marketing Association (“CDMA”) will begin making Cobroxin available for
purchase through its 6,000 member
pharmacies.
|
|
·
|
Announced an agreement to
advertise Cobroxin in the official publication for NASCAR, Racing One, for
the 2010 racing season.
|
|
·
|
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.
|
|
·
|
Hospitals;
|
|
·
|
Pharmaceutical
companies;
|
|
·
|
Biotechnology
companies;
|
|
·
|
Medical device
distributors;
|
|
·
|
Governmental
organizations;
|
|
·
|
Environmental testing facilities;
and
|
|
·
|
Government water and soil testing
facilities at the local, state and federal
levels.
|
|
·
|
Sell or dispose of our assets, if
any;
|
|
·
|
Pay our liabilities in order of
priority, if we have available cash to pay such
liabilities;
|
|
·
|
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;
|
|
·
|
File a Certificate of Dissolution
with the State of California to dissolve our corporation and close our
business;
|
|
·
|
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
|
|
·
|
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.
|
|
·
|
Whether we successfully develop
and commercialize products from our research and development
activities.
|
|
·
|
If we fail to compete effectively
in the intensely competitive biotechnology area, our operations and market
position will be negatively
impacted.
|
|
·
|
If we fail to successfully
execute our planned partnering and out-licensing of products or
technologies, our future performance will be adversely
affected.
|
|
·
|
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.
|
|
·
|
Biotechnology industry related
litigation is substantial and may continue to rise, leading to
greater costs and unpredictable
litigation.
|
|
·
|
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.
|
·
|
an obligation under a guarantee
contract;
|
·
|
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;
|
·
|
any obligation, including a
contingent obligation, under a contract that would be accounted for as a
derivative instrument, or;
|
·
|
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.
|
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.
|
Dated: January
25, 2010
|
NUTRA
PHARMA CORP.
|
Registrant
|
/s/ Rik J. Deitsch
|
Rik
J. Deitsch
|
Chief
Executive Officer/Chief Financial
Officer
|