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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 June 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
- ---------------------------------- ----------------------------
(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
4900 9th Avenue NW, Suite 201, Seattle, Washington 98102
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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 June 30, 2002:
37,567,000.
Transitional Small Business Disclosure Format (check one): Yes No X
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1
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, June 30,
2001 2002
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ASSETS
Current Assets:
Cash $ 0 $ 0
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Total current assets: 0 0
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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 $1,633,333
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LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities:
Loan payable-related party 42,683 649,327
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Total Current Liabilities 42,663 649,327
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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 2,324,327
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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 37,567,000 at
June 30, 2002 69,444 62,511
Paid in capital (17,500) 71,933
Deficit accumulated during
the development stage (186,294) (825,438)
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Total Stockholders' Equity (134,350) (690,994)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,633,333 $1,633,333
======= =======
Nutra Pharma Corp.
(A Development Stage Company)
Statements of Operations
For the periods ended June 30, 2001 and 2002
June 30 June 30
2002 2001
---- ----
Income $ 0 $ 0
----- -----
Total Income 0 0
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Operating Expenses
Professional Fees $ 30,000 1,000
General and
administrative expenses 435,000 950
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Total Expenses 465,000 1,950
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Net income (loss) $(465,000) $( 1,950)
------- ------
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Nutra Pharma Corp.
(A Development Stage Company)
Statement of Stockholders' Equity
For the period February 1, 2000 (inception) through June 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 24, 2002 161,000 161 0
Net loss at June 30, 2002 (465,000)
------------- ----------- -------- ------------
Balance at June 30, 2002 37,567,700 62,511 71,933 (825,438)
======= ======= ======= =======
NUTRA PHARMA CORPORATION
(A Development Stage Company)
Notes to Financial Statements
June 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 $ -
=======
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 6,000,000 shares of unregistered common stock to
its officers, legal counsel, and consultant in exchange for services rendered.
The stocks issued are recorded at par value of the services received. The
company has issued a long term note payable to an officer of the company, in
exchange for working capital. The note is payable on demand, at an interest
rate of 10% per annum.
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 compoundWD667, its manufacturing process and various
uses in human and animal healing. Terra Nutra shall be owned by 50% Nutra
Pharma and 50% Terra Biopharma. Nutra Pharma shall be the sole and exclusive
distributor of all products derived from compound. Nutra Pharma shall pay
Terra Biopharma $1,740,000 in exchange for the distribution rights of the
product. Terra Biopharma shall purchase suitable land and construct a
manufacturing plant. This agreement supersedes the exclusive license agreement
between Terra Biopharma and Nutra Pharma dated May 7, 2001.
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. 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
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'scontrol. 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 June 30, 2002 was $465,000, 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 $649,327 for June 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 April 26, 2002 Nutra Pharma entered into a Letter of Intent ("LOI") to
acquire 100 percent of the capital stock of Bio Therapeutics Inc,. a
Plantation, Florida company. The terms of the LOI consisted of Nutra Pharma
Corp acquiring 100 percent (12,825,974 shares) of Bio Therapeutics in exchange
for 49% of the issued and outstanding stock of Nutra Pharma and $500,000 in
cash. The stock is to be held in escrow and will be released to Bio
Therapeutics shareholders upon the successful closing of Nutra Pharma and Bio
Therapeutics' joint private placement for a minimum of $1.5 million. The LOI
also set forth a $2.40 conversion price for which Bio Therapeutics Inc. stock
will be converted into Nutra Pharma Corp. common stock.
In May, 2002, Nutra Pharma majority shareholders agreed retired 10,394,000
shares of Nutra Pharma Corp. common stock to facilitate the acquisition of Bio
Therapeutics Inc.
On May 30, 2002 Nutra Pharma entered into a Definitive Agreement to acquire 100
percent of the capital stock of Bio Therapeutics Inc. This came after Nutra
Pharma made payments of $500,000 to Bio Therapeutics as required by the LOI
dated April 26, 2002. This agreement requires Nutra Pharma to issue 11,137,139
shares of Nutra Pharma Corp common stock to Bio Therapeutics' shareholders in
exchange for 100 percent of the outstanding stock of Bio Therapeutics, subject
to certain adjustments, should Nutra Pharma's common stock not have a market
value of at least $2.40 per share. The agreement also called for a $500,000
loan account to be created whereby Bio Therapeutics repays Nutra Pharma
$500,000 from the LOI payments should the transaction be terminated prior to
closing.
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 well
over 100 patients is extremely safe.
During the past decade, Bio Therapeutics has conducted pilot trials of the
Immunokine in MS, involving more than 20 patients. 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 excellent. 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 great safety and tolerability of the drug, and are consistent with reports
from the Ministry of Health's trials.
Veterinary studies (over 1000 animals) 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.
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. Terra Nutra shall be owned by 50% Nutra
Pharma and 50% Terra Biopharma. Nutra Pharma shall be the sole and exclusive
distributor of all products derived from compound. Nutra Pharma shall pay
Terra Biopharma $1,740,000 in exchange for the distribution rights of the
product. Terra Biopharma shall purchase suitable land and construct a
manufacturing plant. This agreement supersedes the exclusive license agreement
between Terra Biopharma and Nutra Pharma dated May 7, 2001.
Nutra Pharma has developed its own wound healing product, separate and apart
from the joint venture, consisting of a wound care foam, containing complex
sales and carbohydrates, using a patented delivery system developed by Bio
Therapeutics, Inc. Nutra Pharma believes that this product will have a wide
range of applications, from minor cosmetic surgeries to the treatment of
diabetic ulcers. Initial testing of the product has confirmed its ability to
meet and exceed USP standards, and Nutra Pharma anticipates that it will begin
clinical testing of the product within the next 60 to 90 days.
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 NONE
On July 11, 2002 , Dr. Rafael Gonzalez-Visozo and Mona L. Martin resigned as
officers and directors, and Dr. Harold Crews was appointed Chief Executive
Officer.
Item 6.
a) Exhibits NONE
b) Reports on 8K NONE
SIGNATURES
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: August 13
, 2002 By: Zirk Englebrecht
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Zirk Englebrecht, Chairman,
Board of Directors