UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10QSB
(X) Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended September 30, 2002
( ) Transition report pursuant of Section 13 or 15(d) of the Securities
Exchange Act of 1939 for the transition period ____ to______
COMMISSION FILE NUMBER: 333-44398
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NUTRA PHARMA CORP.
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(Exact name of registrant as specified in its charter)
California 91-2021600
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(State or other jurisdiction of (IRS Employer I.D. Number)
incorporation or organization)
485 Martin Lane, Beverly Hills, California 90210
(Address of principal executive offices) (Zip Code)
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Registrant's telephone number: (310) 858-7088
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Former name, former address and former fiscal year, if changed
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports,), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
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The number of shares of the registrant's common stock as of September 30, 2002:
47,433,207.
Transitional Small Business Disclosure Format (check one): Yes No X
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TABLE OF CONTENTS
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
(a) Balance Sheet
(b) Statement of Operations
(c) Statement of Changes in Financial Position
(d) Statement of Shareholders' Equity
(e) Notes to Financial Statements
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations
Item 3. Risks
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities and Use of Proceeds
Item 3. Defaults On Senior Securities
Item 4. Submission of Items to a Vote
Item 5. Other Information
Item 6
(a) Exhibits
(b) Reports on Form 8K
SIGNATURES
FINANCIAL DATA SCHEDULE
Nutra Pharma Corp.
(A Development Stage Company)
Balance Sheets
December 31, September 30,
2001 2002
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ASSETS
Current Assets:
Cash $ 0 $ 17,092
Loan Receivable - 520,000
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Total current assets: 0 537,092
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Non-current Assets
License Agreement 1,750,000 1,750,000
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Accumulated Amortization ( 116,667) ( 116,667)
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Total Non-Current Assets 1,633,333 $1,633,333
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TOTAL ASSETS $1,633,333 $2,170,425
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LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities:
Loan payable-related party 42,683 819,327
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Total Current Liabilities 42,663 819,327
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Long Term Liabilities
License fees payable 1,725,000 1,675,000
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Total Liabilities 1,767,683 2,494,327
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Stockholders' Equity:
Preferred stock authorized - 20,000,000
Issued and outstanding - 0
Common stock, $.001 par value
Authorized _ 2,000,000,000 shares
Issued and outstanding _ 44,500,000 shares
at December 31, 2001 and 47,433,207 at
September 30, 2002 69,444 72,377
Paid in capital (17,500) 471,495
Deficit accumulated during
the development stage (186,294) ( 867,774)
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Total Stockholders' Equity (134,350) ( 323,902)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,633,333 $2,170,425
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Nutra Pharma Corp.
(A Development Stage Company)
Statements of Operations
For the periods ended September 30, 2001 and 2002
September 30 September 30
2002 2001
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Income $ 0 $ 0
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Total Income 0 0
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Operating Expenses
Professional Fees $ 37,295 5,000
General and
administrative expenses 5,041 20,000
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Total Expenses 42,336 25,000
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Net income (loss) $( 42,336) $( 25,000)
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Nutra Pharma Corp.
(A Development Stage Company)
Statement of Stockholders' Equity
For the period February 1, 2000 (inception)
through September 30, 2002
Deficit
Number Accumulated
of Common Paid During
Shares Stock In Development
Outstanding at Par Value Capital Stage
----------- ------------ ------- -----------
February 1, 2000 (inception) 0 $ 0 $ 0
Stock issued to founders at inception 1,950,000 1,950 0
Net loss - December 31, 2000 (1,950)
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Balance at December 31, 2000 1,950,000 $ 1,950 $ 0 (1,950)
Common stocks issued 9/30/2001 50,000 25 (17,500)
Common stocks issued 42,500,000 42,500
Net loss - December 31, 2001 (184,344)
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Balance at December 31, 2001 44, 500,000 $ 67,469 $(17,500) (186,294)
Net loss - March 31, 2002 (146,644)
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Balance at March 31, 2002 44,500,000 67,444 (17,500) (360,438)
Stocks issued April 23, 2002 2,200,000 2,200 0
Stocks issued May 21, 2002 for services 100,000 100 0
Stocks cancelled May 23, 2002 (10,394,000) (10,394) 89,433
Stocks issued June 6, 2002 1,000,000 1,000 0
Stocks issued June 30, 2002
Net loss at June 30, 2002 (465,000)
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Balance at June 30, 2002 37,567,700 62,511 71,933 (825,438)
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Stocks cancelled July 16, 2002 ( 10,000) ( 10) 0
Stocks issued August 27, 2002 2,500,000 2,500 0
Stocks issued August 27, 2002 1,000,000 1,000 0
Stocks cancelled September 12, 2002 ( 1,000,000) (1,000) 0
Stocks issued September 30, 2002 7,376,207 7,376 399,562
Net loss at September 30, 2002 (42,336)
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Balance at September 30, 2002 47,433,207 72,377 471,495 (867,774)
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NUTRA PHARMA CORPORATION
(A Development Stage Company)
Notes to Financial Statements
September 30, 2002
NOTE 1 - NATURE OF BUSINESS
Nutra Pharma was incorporated under the laws of the state of California on
February 1 2000,under the original name of Exotic-Bird.com, and subsequently
changed its name to Cyber-Vitamin.com and, in November, 2001, to Nutra Pharma
Corporation. The purpose for which the corporation is organized is to engage
in any lawful act or activity for which a corporation may be organized under
the General Corporation Law of the State of California including, without
limitation, to engage in the distribution of botanical biopharmaceutical
products.
Nutra Pharma has been in the development stage since its formation on February
1, 2000. Planned principal operations have only recently commenced since then,
but Nutra Pharma has not generated any significant revenue.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
Basis - The Company uses the accrual method of accounting.
Cash and cash equivalents - The Company considers all short term, highly liquid
investments that are readily convertible within three months to known amounts
as cash equivalents. Currently, it has no cash equivalents.
Loss per share - Net loss per share is provided in accordance with Statement of
Financial accounting Standards No. 128 "Earnings Per Share". Basic loss per
share reflects the amount of losses for the period available to each share of
common stock outstanding during the reporting period, while giving effect to
all dilutive potential common shares that were outstanding during the period,
such as stock options and convertible securities. Fully Diluted Earnings Per
Shares shall be shown on stock options and other convertible issues that may be
exercised within ten years of the financial statement dates. As of December
31, 2001 the Company had no issuable shares qualified as dilutive to be
included in the earnings per share calculations.
Estimates - The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statement and
accompanying notes. Actual results could differ from those estimates.
E. Revenues are recognized and recorded when ordered goods are paid for by
credit card. Expenses are realized and recorded when invoiced. The Company has
adopted the provision of SFAS No. 109 "Accounting for Income Taxes". It
requires recognition of deferred tax liabilities and assets for the expected
future tax consequences of events that have been included in the financial
statements or tax returns. Under this method, deferred tax liabilities and
assets are determined based on the differences between the financial statement
and tax basis of assets and liabilities us interacted tax rates in effect for
the year in which the differences are expected to reverse. Nutra Pharma
Corporation has incurred losses that can be carried forward to offset future
earnings if conditions of the Internal Revenue codes are met.
The Company's total deferred tax assets as of December 31, 2001 is as follows:
Net operating loss carryforward $62,677
Valuation allowance (62,677)
Net deferred tax asset $ -
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The net operating loss carry forward for federal tax purposes will expire in
year 2021.
NOTE 4 - RELATED PARTY TRANSACTIONS
The Company issued a total of 2,500,000 shares of unregistered common stock to
its officers. The stocks issued are recorded at par value. The shares were
subsequently returned to the treasury and the issuance was cancelled. The
shares were returned after the September 30, 2002 quarter closing and as such
the number of shares outstanding as of quarter end do not reflect the decrease
of 2,500,000 shares. The company has increased the outstanding amount of a
long term note payable to a director of the company, in exchange for working
capital. The note is payable on demand, at an interest rate of 10% per annum.
The 7,376,207 shares of Nutra Pharma common stock issued on September 30, 2002
were to Bio Therapeutics Inc. shareholders pursuant to Nutra Pharma's
acquisition of Bio Therapeutics Inc. The shares are being held in escrow until
the final closing of the transaction.
NOTE 5 - License Agreement
On May 7, 2001, the Company entered into a license agreement. The purchase
price for the license was $1,750,000. The cost of the licensing agreement
acquired was recorded as an intangible asset and was being amortized over the
term of the license of five years. The license was superseded by a joint
venture agreement between the company and Terra BioPharma.
On January 30, 2002, the Company and Terra Biopharma S.A., a corporation formed
under the laws of the Republic of Panama, entered into a joint venture
agreement to patent the compound WD667, its manufacturing process and various
uses in human and animal healing, and agreed to pay Terra Biopharma $1,740,000
in exchange for the distribution rights of the product, and we made payments of
$269,327 to Terra Biopharma which it used on development of WD667, including
renting a clinic for trials, and development of a manufacturing plant. This
agreement superseded the exclusive license agreement between Terra Biopharma
and Nutra Pharma dated May 7, 2001. This agreement is being rescinded, due to
delays in development and uncertainty of Terra Bio Pharma's financial
requirements and ability to develop the product. Upon final settlement of the
"rescission agreement", Nutra Pharma will no longer have rights to any of Terra
Biopharma's research and development and Nutra Pharma will no longer have any
outstanding financial obligations to Terra Biopharma. After final settlement,
Nutra Pharma will no longer account for the Terra Biopharma license agreement
as either an asset or a liability.
NOTE 6 - GOING CONCERN
The Company has nominal assets and limited operations with which to create
operating capital. It has an accumulated deficit of $184,344 at December 31,
2001, and $867,774 at September 30, 2002. These factors raise substantial doubt
about the company's ability to continue as a going concern. The company seeks
to raise operating capital through private placements of its common stock.
However, there can be no assurance that such offering or negotiations will be
successful.
UNAUDITED INFORMATION
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The information furnished herein was taken from the books and records of the
Company without audit. However, such information reflects all adjustments which
are, in the opinion of management, necessary to properly reflect the results of
the interim period presented. The information presented is not necessarily
indicative of the results from operations expected for the full fiscal year.
In this report references to "we," "us," and "our" refer to NUTRA PHARMA CORP.
FORWARD LOOKING STATEMENTS
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This Form 10-QSB contains certain forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. For this purpose any
statements contained in this Form 10-QSB that are not statements of historical
fact may be deemed to be forward-looking statements. Without limiting the
foregoing, words such as "may," "will," "expect," "believe," "anticipate,"
"estimate" or "continue" or comparable terminology are intended to identify
forward-looking statements. These statements by their nature involve
substantial risks and uncertainties, and actual results may differ materially
depending on a variety of factors, many of which are not within Nutra Pharma's
control. These factors include but are not limited to economic conditions
generally and in the industries in which Nutra Pharma may participate;
competition within Nutra Pharma's chosen industry, including competition from
much larger competitors; technological advances and failure by Nutra Pharma to
successfully develop business relationships.
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
Results of Operations
Since inception, we have experienced losses. We have financed our operations
primarily through the sale of our common stock or by loans from shareholders.
The net loss for the three months ended September 30, 2002 was $42,336,
compared to a net loss of $25,000 for the same period of 2001. Management
attributes the increase in net loss to the development of Nutra Pharma's
products and investment in Bio Therapeutics.
Liquidity and Capital Resources
As of December 31, 2001, we had a working capital deficit of $42,683, compared
to a working capital deficit of $819,327 for September 30, 2002. We have no
material commitments for the next twelve months. We believe that our current
cash needs for at least the next twelve months can be met by loans from our
directors, officers and shareholders.
Recent Developments
On August 22, 2002, Nutra Pharma Corp ("Nutra Pharma") consummated the first
portion of its acquisition agreement with of Bio Therapeutics, Inc., a Florida
corporation ("Bio Therapeutics"), provided for in the Definitive Agreement
dated May 30, 2002 and the Closing Agreement for the Exchange of Common Stock
dated August 12, 2002, as amended. Pursuant to the Agreement, Bio Therapeutics
is being acquired by Nutra Pharma and will become a wholly owned subsidiary of
Nutra Pharma, upon the completion of Nutra Pharma's private placement of a
minimum of $1.5 million of its common stock. If Nutra Pharma fails to raise the
minimum of $1.5 million in the private placement, the Agreement shall become
null and void. In connection with the transaction, Nutra Pharma is issuing
approximately 11,730,889 shares of its Common Stock, $.001 par value ("Common
Stock"), to all holders of Bio Therapeutics common stock in exchange for
11,730,889 shares of Bio Therapeutics common stock, subject to adjustment and
the issuance of additional shares to Bio Therapeutics shareholders if, on the
date of final closing of the Agreement, the common stock of Nutra Pharma is not
trading at the best offer price of $1.20 per share. As of September 30, 2002,
7,376,207 of these shares have been issued and are being held in escrow to
secure both parties' obligations under the Agreement.
The description of the Acquisition Agreement set forth herein is qualified in
its entirety by reference to the copy of the Definitive Agreement dated May 30,
2002, the Amendment to Closing Agreement for the Exchange of Common Stock dated
August 12, 2002, and the Amendment to Closing Agreement for the Exchange of
Common Stock, dated September 27, 2002, which have been filed under 8-K prior
to this report and which are incorporated herein by reference.
Upon completion of the acquisition, Bio Therapeutics Inc. will become a wholly-
owned subsidiary of Nutra Pharma Corp. Bio Therapeutics is a developmental
stage biopharmaceutical company with drugs for cancer, multiple sclerosis, or
MS, and neuromuscular disorders. The Company has also developed a number of
unique patented drug delivery platforms for topical and needle free delivery of
these unique drugs. Its lead drug candidate, Alpha-Immunokine, a novel modified
protein, has been studied as a treatment for several clinical disorders.
Preliminary test results show that the drug, administered to patients is
extremely safe.
During the past decade, Bio Therapeutics has conducted pilot trials of the
Immunokine in MS. The longest-enrolled MS patient has been treated for nearly
ten years. Many patients report sustained relief of disabling fatigue and pain,
improved ambulation, and other benefits. In the U.S., many patients with
relapsing forms of MS are not receiving approved 'disease-modifying' therapies.
Bio Therapeutics' drug is the first of a new class of therapeutics. It may
offer superior (or complementary) efficacy and much greater tolerability than
current MS treatments. And it may prove beneficial to a broad range of MS,
irrespective of disease severity. The Immunokine has been approved for formal
controlled clinical trials in MS. Alpha-Immunokine-NNS, is derived from a small
protein called alpha-cobratoxin. Native alpha-cobratoxin is a potent poison
extracted from cobra venom. A specific chemical process modifies the cobra
toxin, eliminating its deadly effect. The Immunokine retains some of the
affinities of the native toxin, but to a much diminished degree -- likely a key
factor in the agent's purported therapeutic effects.
Patents covering the manufacturing process have been filed; the first was
recently issued. A new formulation of the modified protein may also prove
effective when administered orally. The Company has recently developed a new
spray "puffer" that permits efficient delivery of the agent through the oral
mucosa. Patent applications have been filed. Oral delivery may provide MS
patients with an additional "quality of life" benefit by eliminating or
decreasing the requirement for routine injections.
During the last 10 years, Bio Therapeutics has conducted pilot studies in MS,
treating several patients with Immunokine. The longest-enrolled patient is now
commencing his 10th year, and credits the drug with his sustained improvement
in quality of life. Since 1997, the Company has conducted open trials for the
human therapeutic drug under the auspices of the Ministry of Health of the
Bahamas in collaboration with Coral Pharmaceuticals. MS patients have reported
relief of neuropathic pain (when present) soon after initiation of therapy.
Marked reduction in fatigue, a prevalent and often disabling MS symptom, is
typically noted after several weeks of treatment. Improved ambulation -- a
function of balance, muscle strength, and coordination -- has been reported
about six to eight months after the start of treatment; some patients continue
to improve over subsequent months.
Clinical investigations of the Immunokine have been conducted in a variety of
other neurologic, viral, and cancer-related disorders. There have been no
significant safety issues with the Immunokine; tolerability is good. For
example, the agent has been investigated in clinical studies conducted at the
University of Santiago in Chile. Studies involving more than 100 patients
evaluated the Immunokine as a treatment for advanced prostate cancer and in the
management of herpes-virus infections -- particularly recurrent varicella
zoster (Shingles). The investigators noted significant symptomatic improvements
(relief of fatigue and pain). They also believe that the drug exhibited
antiviral and possibly antitumor activity. Those accounts support the safety
and tolerability of the drug, and are consistent with reports from the Ministry
of Health's trials.
Veterinary studies complement the human clinical experience, providing
additional data. For example, favorable results have been reported by treating
various animals for Feline Leukemia, FIV (a feline virus analogous to HIV),
canine malignancies, and a variety of other prevalent animal diseases and
disorders. Without the drug, most of these veterinary patients would have been
candidates for euthanasia.
Nutra Pharma has developed its own wound healing product, separate and apart
from the joint venture, consisting of a wound care foam, using a patented
delivery system developed by Bio Therapeutics, Inc.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
We are not currently involved in any legal proceedings.
Item 2. Changes in securities and use of proceeds
NONE
Item 3. Defaults on senior securities
NONE
Item 4. Submission of items to a vote
NONE
Item 5. Other information
Effective October 26, 2002, Officer and Director Dr. Edith W. Martin has
resigned as the Company's President and from the Company's Board of Directors.
On September 15, 2002, Dr. Harold Crews resigned as the Company's Chief
Executive Officer and from the Company's Board of Directors.
Item 6.
a) Exhibits
NONE
b) Reports on 8K
8-Ks were filed on August 13, 2002 and September 9th, 2002.
SIGNATURES
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In accordance with the requirements of the Securities and Exchange Act of 1934,
the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
NUTRA PHARMA CORP.
Dated: November 14, 2002 By: Zirk Engelbrecht
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Zirk Engelbrecht, Chmn. and
acting Vice Pres.
CERTIFICATION
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We hereby certify that the foregoing report fully complies with the require-
ments of Sections 13(a) and 15(d) of the Exchange Act and the information
contained in this report fairly represents, in all material respects, the
financial condition and results of operations of the company.
Dated: November 14, 2002 By: Zirk Engelbrecht
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Zirk Engelbrecht, Chmn and
Acting Vice Pres.
Dated: November 14, 2002 By: Nancy Volpe
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Nancy Volpe, Secretary/Treasurer