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As filed with the Securities and Exchange Commission on January 27, 2015
Registration No. 333-198110
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
AMENDMENT NO. 7
TO
FORM S-1
 
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
 
 
SIGNPATH PHARMA INC.
(Exact Name of Registrant as specified in its charter)
 
Delaware
 
2834
 
20-5079533
(State or other jurisdiction of incorporation or organization)
 
(Primary Standard Industrial Classification Code Number)
 
(I.R.S. Employer Identification No.)
 
3477 Corporate Parkway, Suite 100
Center Valley, PA 18034
Telephone: (215) 538-9996
Telecopier: (215) 538-1245
(Address and telephone number of principal executive offices)
 
Dr. Lawrence Helson
Chief Executive Officer
3477 Corporate Parkway, Suite 100
Center Valley, PA 18034
Telephone: (215) 538-9996
Telecopier: (215) 538-1245
 (Name, address and telephone number of agent for service)
 
Copy to:
Elliot H. Lutzker, Esq.
Davidoff Hutcher & Citron LLP
605 Third Avenue, 34th Floor
New York, New York 10158
Telephone: (212) 557-7200
Telecopier: (212) 286-1884
 
Approximate Date of Proposed Sale to the Public:  As soon as practicable after the effective date of this registration statement.
 
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. x
 
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o
 
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o
 
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o

 
 

 
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.  (Check one):
 
 
Large accelerated filer
 o
Accelerated filer
 o
 
Non-accelerated filer
 o
Smaller reporting company
 x
 
(Do not check if a smaller reporting company)
     
 
CALCULATION OF REGISTRATION FEE
 
 
Title of Each Class of Securities to be Registered
 
Amount to be
Registered (1)
   
Proposed
Maximum
Aggregate
Offering
Price per
Security(5)
   
Proposed
 Maximum
Aggregate
Offering Price
   
Amount of
Registration
Fee
 
                         
Common Stock, par value $.001
   
1,257,500
   
$
2.00
   
$
2,515,000
   
$
323.94
 (2)
Common Stock, par value $.001, issuable upon conversion of Series A Preferred Stock
   
3,382,357
   
$
2.00
     
6,764,714
     
871.30
 (3)
Common Stock, par value $.001, issuable upon conversion of Series B Preferred Stock
   
2,525,842
   
$
2.00
     
5,051,684
     
650.66
 
Common Stock, par value $.001, issuable upon conversion of Series C Preferred Stock
   
4,000,000
   
$
2.00
     
8,000,000
     
1,030.40
 
Common Stock, par value $.001, issuable upon exercise of Class A Warrants
   
3,382,357
   
$
2.00
     
6,764,714
     
871.30
 (4)
Common Stock, par value $.001, issuable upon exercise of Class B Warrants
   
2,525,842
   
$
2.00
     
5,051,684
     
650.66
 
Common Stock, par value $.001, issuable upon exercise of Class C Warrants
   
2,000,000
   
$
2.00
     
4,000,000
     
515.20
 
Common Stock, par value $.001, issuable upon full exercise of placement agent warrants
   
3,107,203
   
$
2.00
     
6,214,406
     
800.42
 
Common Stock, par value $.001, issued for accrued dividends
   
1,206,387
   
$
2.00
     
2,412,774
     
310.77
 
                                 
TOTAL
   
23,387,488
   
$
-
   
$
46,774,976
   
$
6,024.65
 (6)
 
(1)
 
Pursuant to Rule 416 under the Securities Act of 1933, these shares include an indeterminate number of shares of Common Stock issuable as a result of stock splits, stock dividends, recapitalizations or similar events.
(2)
 
$72.96 was paid on April 7, 2009 and August 6, 2009, upon the filing of Registration Statement No. 333-158474 and $14.26 was paid upon the filing of Registration Statement No. 333-169386.
(3)
 
$93.93 was paid on April 7, 2009 and August 6, 2009 upon the filing of Registration Statement No. 333-158474 and $45.89 was paid upon the filing of Registration Statement No. 333-169386
(4)
 
$119.29 was paid on April 7, 2009 and August 6, 2009 upon the filing of Registration Statement No. 333-158474 and $58.28 was paid upon the filing of Registration Statement No. 333-169386.
(5)
 
Estimated solely for purposes of calculating the registration fee pursuant to Securities Act Rule 457(g), based on the exercise price of the warrants.
(6)
 
Of this amount, $5,633.93 was paid with the filing of this Registration Statement on August 12, 2014, and the balance ($390.72) was paid as set forth in Notes (2)(3) and (4) above.
 
This Registration hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the commission, acting pursuant to said Section 8(a), may determine.
 
Pursuant to Rule 429(b) under the Securities Act this Registration Statement shall also serve as a Post-Effective Amendment No. 1 to the Company’s Registration Statement on Form S-1 (No. 333-158474) declared effective on August 10, 2009 and Form S-1 (No. 333-169386) declared effective on October 14, 2010.
 
 
 

 
 
SUBJECT TO COMPLETION – DATED January 27, 2015
 
The information contained in this prospectus is not complete and may be changed.  These securities may not be sold until the registration statement filed with the Securities and Exchange Commission (the “SEC”) is effective.  This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
 
PROSPECTUS
 
SIGNPATH PHARMA INC.
 
 
23,387,488 Shares of common stock
 
This prospectus relates to the public offering of up to 23,387,488 shares of our common stock consisting of:  1,257,500 shares issued to retail accredited investors in a bridge financing 3,382,357, 2,525,842 and 4,000,000 shares of common stock issuable upon conversion of Series A, B, and C Convertible Preferred Stock, respectively, sold to retail accredited investors in private equity offerings since 2008; (ii) 1,206,387 shares issuable to Series A Preferred Stockholder for accrued dividends through September 30, 2014; (iii) 3,382,357, 2,525,842 and 2,000,000 shares issuable upon exercise of outstanding Class A, B and C Warrants, respectively; and (iv) 3,107,203 shares issuable upon exercise of outstanding Placement Agent Warrants.  All of these shares of common stock issuable upon exercise or conversion of outstanding securities are being offered for resale by the Selling Stockholders.
 
The shares will be offered from time to time for the account of the stockholders identified in the “Selling Stockholders” section of this prospectus.  The selling stockholders and any broker-dealers that participate in the distribution of the securities may be deemed “underwriters” as that term is defined in Section 2(a)(11) of the Securities Act of 1933, as amended (the “Securities Act”).
 
The shares will be sold by the selling stockholders on an immediate and continuing basis at a fixed price of $2.00 per share. We intend to seek a listing of our common stock on the Over-The-Counter Bulletin Board (“OTCBB”), which is maintained by the Financial Industry Regulatory Authority, Inc. (“FINRA”).
 
The shares being offered pursuant to this prospectus involve a high degree of risk. Persons should not invest unless they can afford to lose their entire investment. You should carefully read the “Risk Factors” section commencing on page 8 for information that should be considered in determining whether to purchase any of the shares.
 
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
 
Pursuant to Rule 429(a) under the Securities Act, this Prospectus is a combined prospectus with the ones included in Registration Statement No 333-169386 declared effective October 14, 2010, and No. 333-158474 declared effective August 10, 2009.
 
The date of this Prospectus is __________, 2015
 
 
1

 
 
ADDITIONAL INFORMATION
 
You should rely only on the information contained or incorporated by reference in this prospectus and in any accompanying prospectus supplement. No one has been authorized to provide you with different information. The shares are not being offered in any jurisdiction where the offer is not permitted. You should not assume that the information in this prospectus or any prospectus supplement is accurate as of any date other than the date on the front of such documents.
 
TABLE OF CONTENTS 
 
 
 Page Number
   
 INTRODUCTORY COMMENTS
 3
   
 SUMMARY
 3
   
 WHERE YOU CAN FIND MORE INFORMATION
 8
   
 RISK FACTORS
 8
   
 DETERMINATION OF OFFERING PRICE
 26
   
 DILUTION AND OTHER COMPARATIVE PER SHARE DATA
 27
   
 PRICE RANGE OF COMMON STOCK, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
 28
   
 CAPITALIZATION
 29
   
 USE OF PROCEEDS
 30
   
 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 30
   
 BUSINESS
 36
   
 MANAGEMENT
 51
   
 EXECUTIVE COMPENSATION
 54
   
 PRINCIPAL STOCKHOLDERS
 56
   
 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 58
   
 SELLING STOCKHOLDERS
 59
   
 DESCRIPTION OF SECURITIES
 70
   
 SHARES ELIGIBLE FOR FUTURE SALE
 76
   
 INDEMNIFICATION
 77
   
 PLAN OF DISTRIBUTION
 78
   
 EXPERTS
 79
   
 LEGAL MATTERS
 79
   
 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 F - 1
 
 
2

 
 
INTRODUCTORY COMMENTS
 
Use of Names
 
Throughout this prospectus, the terms “we,” “us,” “our,” “registrant,” “Company” refer to SignPath Pharma Inc.
 
SUMMARY
 
The following summary of the terms of this Offering is not complete and is subject to, and is qualified in its entirety by reference to, the information set forth in the balance of this Prospectus and the provisions of each of the documents attached hereto as Exhibits.
 
Business
 
SignPath is a clinical stage biotechnology company founded in May 2006 to develop synthesized proprietary formulations of curcumin, a naturally occurring compound found in the root of the Curcuma longa Linn (turmeric) plant, for applications in human diseases. The Company is a publicly held non-traded Delaware corporation.
 
Curcumin has an extensive history as an oral medicinal product with safe human use, but its potential therapeutic benefits have been limited by its low absorption (the amount of active drug reaching lesioned tissue) when taken orally, as well as its inactivation in the liver (due to hepatic glucuronidation or sulfation) and “hydro-phobic” nature whereby it is not soluble in water or blood. SignPath has developed and received approval in June 2014 from the U.S. Food and Drug Administration (the “FDA”) of its Investigational New Drug (“IND”) application, and in Europe for an Investigated Medical Product Dossier (“IMPD”) for parenterally (taken into the body in a manner other than the digestive tract) administered curcumin, allowing curcumin to be administered intravenously and delivered to diseased sites with minimal inactivation. We believe that the liposomes, liposomal curcumin, and liposomal-PLGA-curcumin formulations we have licensed based on management’s experience and the opinions of our consultants may be useful in the treatment of cancer, diabetes and neurologic disorders. The Company is developing two different intravenous/subcutaneous nano-particle sized formulations and a specific liposome application. Proof of efficacy of these compounds against human tumor xenografts in mice and prevention of cardiac arrhythmias was patent submitted and published. During IND mandated pre-clinical toxicity trials in dogs with liposomal curcumin, a dose-dependent hemolysis was observed, allowing us to identify a safe dose level, hence, allowing specific dose/schedules of administration for clinical trials in dogs and humans.
 
SignPath has licensed three proprietary intravenous formulations containing curcumin as the active therapeutic agent. The first is a liposomal version licensed from University of Texas MD Anderson Cancer Center (“UTMDACC”) which is currently in Phase Ib clinical trials in Salzburg, Austria; the second is a nanosized version licensed from the Johns Hopkins University (“JHU”); and the third is an extended release Liposomal-PLGA formulation (curcumin-ER) licensed from the University of North Texas Health Science Center. The Company’s near term (next 12 months) goals are to complete preclinical development of curcumin-ER, to file a second IND and to begin Phase I trials for safety and dosage studies in patients with cancer under its initial IND approved in June 2014. The complete dossier for liposomal curcumin, our first formulation was submitted to the European Medicines Agency (the “EMA”) on June 8, 2011 for Phase Ia clinical trials and was completed in October 2012. The Company believes its licensed synthetic chemical formulations of curcumin will replace the naturally occurring extract mixture of curcuminoids, and its discovery of the anti-arrythmia effects of its liposomes will render them potentially patentable; patents for liposomal curcumin and nanocurcumin have already been issued. The Company plans to develop these new products which potentially will give SignPath proprietary curcumin preparations with applications in the treatment for a broad spectrum of neoplastic, neurologic, and metabolic indications.
 
The Company has assembled leaders experienced in pharmacologic development of natural products to advise it on the development of its curcumin formulations. This Scientific Advisory Board is comprised of individuals with specific experience with natural products, formulation development, neoplastic, metabolic and neurologic disorders. Expertise in analytical chemistry will come from commercially based product chemists. Drug development will be overseen by Lawrence Helson MD, Chief Executive Officer, an oncologist with 25 years of pharmaceutical development experience; Anirban Maitra, PhD, MPPH, of UTMDACC, who has expertise in nanotechnology, development of nano, and liposomal curcumin testing for antitumor effects; Judith A. Smith, PhD, director of the UTMDACC preclinical development group for the liposomal formulation and Jamboor Vishwanatha of University of North Texas Health Science Center who has experience with extended release formulations.
 
 
3

 
 
The Company’s Scientific Advisory Board members all bring relevant experience to the Company. Professor Tauseef Ahmad, MD is an experienced principal investigator for lymphoma, myeloma and solid tumor studies. Dr. Peter P. Sordillo, who joined our Scientific Advisory Board in 2013, is on the Staff of Medical Oncology and Hematology at Lenox Hill Hospital, New York as an experienced Oncologist. See “Management” below for more information about our management team and Scientific Advisory Board members.
 
Clinical application strategies will be based upon the advice of the individuals serving on the Scientific Advisory Board, all of whom have academic and practical experience in biopharmaceutical development. As described below, we expect that our Phase I and II clinical trials will be run by contract clinical research organizations in Europe and the United states.
 
During the fiscal years ended December 31, 2012 and 2013, and the nine month period ended September 30, 2014, the Company expended $939,296, $841,502, and $1,546,500, respectively, for net research and development. None of these expenses were borne by customers as the final products are not commercially available. They consisted primarily of payments made to commercial and academic institutions.  See “Business” below.
 
Company Strategies and Status
 
Business Concept
 
SignPath is a clinical phase biotech company. We in-license formulated curcumin (API) compounds based upon intellectual property, manufacturing capability, acceptable toxicity, parenteral administration feasibility, unmet clinical needs, and extensive data documenting efficacy of curcumin in disease indications. Following in-licensing of these formulations of curcumin we expect to develop a robust IP profile.   Our modus operandi is to demonstrate safety and efficacy of the formulated compounds in Phase I and II clinical trials in order to facilitate Phase III clinical trials and registration approvals. Following Phase II trials, we plan to partner, joint venture and/or independently complete Phase III clinical trials, and upon approval commercialize the products. The possibilities of selling or licensing territory for our liposome indication, or curcumin products, to other Pharma prior to completion of clinical Phase III of any of the products is not excluded.
 
Goals and Objectives
 
In June 2014, our IND application for liposomal curcumin in a Phase Ib trial was approved by the FDA.  IND status assigned by the FDA allows a drug to be used in humans, exempting it from pre-marketing approval requirements so that experimental trials may be conducted.  We plan to complete a second liposomal curcumin indication for a Phase Ib-II trial of advanced Parkinson’s disease in the US. We have an approved Investigated Medical Product Dossier (IMPD) in Europe. Our immediate goals are to complete Phase Ib clinical trials with liposomal curcumin by December 2014 for omnibus cancer indications in Salzburg, Austria.  A Phase II trial in patients with refractory metastatic or recurrent non-small cell lung cancers will follow in Germany and Austria. They will receive ascending doses of Lipocurc TM  intravenous infusions once weekly for eight weeks (one cycle) in order to determine the optimal safe dosage schedule.  The trial plans to enroll 20-24 patients with the same cancer, and secondarily observe objective tumor response rates, progression free survival, and overall survival.  The analysis will include biomarkers, and the best overall improvement between pre-treatment and up to eight weekly treatments to determine optimal safe dosage.  Additionally, the mean number of evaluable patients who exhibit overall tumor shrinkage (i.e., the disease control rate) will be determined.  SignPath Pharma will also record partial responses, stable disease, and progressive disease by RECIST criteria.  These data will allow the selection of dosage and clinical indications for Phase II and Phase III clinical trials.
 
A separate indication, progressive Parkinson’s disease will enroll 16 patients with progressive disease in order to determine the optimal safe dosage schedule, and will be followed by a Phase II clinical trial. The patients in this trial will receive eight (8) hour infusions twice weekly for four weeks in addition to L-DOPA their standard of care.
 
 
4

 
 
We have completed pre-clinical studies of oral lysophosotidylglycerol (Lyso PG) mitigation of QTc prolongation induced by moxifloxicin. In related studies, intravenous liposome mitigates currently marketed NSCLC drugs, including nilotinib, and crizotinib.
 
SignPath is a publicly held non-listed Delaware corporation with offices in Quakertown, Pennsylvania in a building owned by our CEO.  The Company does not pay rent or have a lease for its space.
 
SignPath’s executive office is located at 3477 Corporate Parkway, Suite 100, Center Valley, PA 18034.  Our telephone number is 215-538-9996.
 
The Offering
 
Securities Issued and Outstanding as of January 13, 2015:
 
Common Stock
14,163,887 shares, $.001 par value (“Common Stock”)
   
Series A Convertible Preferred Stock
3,255.375 shares, $.10 par value convertible at $.85 per share into 3,831,576 shares of Common Stock.  (1)
   
Series B Convertible Preferred Stock
2,146 shares, $.10 par value convertible at $.85 per share into 2,525,842 shares of Common Stock.
   
Series C Convertible Preferred Stock
5,000 shares $.10 par value convertible at $1.25 per share into 4,000,000 shares of Common Stock
   
Series D Convertible Preferred Stock
320 shares $.10 par value convertible at $2.00 per share into 160,000 shares of Common Stock
   
Class A Warrants
Exercisable at $1.27 per share into 3,831,576 shares of Common Stock (2)
   
Class B Warrants
Exercisable at $1.27 per share into 2,525,842 shares of Common Stock
   
Class C Warrants
Exercisable at $1.875 per share into 2,000,000 shares of Common Stock
   
Class D Warrants
Exercisable at $3.00 per share into 40,000 shares of Common Stock
   
Placement Agent Warrants
Warrants Exercisable at $.85 and $1.25 per share into an aggregate of 3,107,203 shares of Common Stock (“Placement Agent Warrants”).
   
Options
855,000 shares
   
Vendor Warrants
800,000 shares
   
Common Stock Fully Diluted
37,840,926 shares
________________________________
(1)  Includes 449,418 shares of common stock issuable upon conversion of an aggregate of 381.665 shares of Series A Preferred Stock owned by Meyers Investments Family Limited Partnership, an entity of which Bruce Meyers, a founder of the Company is General Partner, which shares are not being registered hereby.
 
(2)  Includes 449,220 Warrant shares not being registered hereby.
 
 
5

 
 
Shares Offered Hereby:
 
Between August 2007 and April 2008, the Registrant completed a Bridge Financing with 17 accredited investors pursuant to which it received total gross proceeds of $847,500 from the sale of 10% promissory notes and shares of Common Stock (the “Bridge Shares”).  An aggregate of 1,257,500 Bridge Shares (all except those held by Bruce Meyers, the principal of the placement agent for the Bridge Financing and the Registrant’s founder), are being registered for resale hereby.
 
Between November 25, 2008 and July 26, 2011, SignPath sold 3,255.375 units of its securities at a price of $1,000 per Unit for gross proceeds of $3,255,375.   Each Unit consists of (i) one share of 6.5% Series A Convertible Preferred Stock (“Series A Preferred Stock”) convertible into 1,177 shares of common stock (equivalent to $.85 per share of common stock, hereinafter, the “Conversion Rate”) following the effective date of this Registration Statement (the “Effective Date”) subject to adjustment, and (ii) one Class A Warrant to purchase 1,177 shares of common stock at $1.27 per share (the “Warrant Exercise Price”) for a seven-year period following the fifth anniversary date of when the Common Stock begins trading on a national securities exchange, the OTC Bulletin Board, or OTC Pier (the “Expiration Date”).  This registration statement includes an aggregate of approximately 1,206,387 shares issued and outstanding as per accrued dividends on Series A Preferred Stock, but does not include 449,220 shares of Common Stock issuable upon conversion of an aggregate of 381.665 shares of Series A Preferred Stock beneficially owned by Bruce Meyers, principal of the placement agent.
 
Between September 2, 2011 and November 26, 2012, SignPath sold 2,146 units of its securities offered at $1,000 per Unit for gross proceeds of $2,146,000.  Each Unit consists of (i) one share of 6.5% Series B Convertible Preferred Stock (“Series B Preferred Stock”) and one Class B Warrant convertible at an $.85 Conversion Rate and $1.25 Warrant Exercise Price the same as the Series A Units.
 
Between March 3, 2013 and June 18, 2014, SignPath sold 5,000 Units of the securities offered at $1,000 per Unit, for gross proceeds of $5,000,000.  Each Unit consists of (i) one share of 6.5% Series C Convertible Preferred Stock (“Series C Preferred Stock”) convertible into 800 shares of Common Stock (equivalent to $1.25 per share of Common Stock and one Class C Warrant to purchase 400 shares of Common Stock at $1.875 per share for a seven-year period following the Effective Date of this Registration Statement.
 
The Preferred Stock shall be convertible following the Effective Date, at the Company’s option, into common stock, and the Warrants shall be subject to redemption, upon 30 days’ written notice, if the Company’s common stock trades above 200% of the $0.85 Conversion Rate in the case of the Series A Preferred Stock and Series B Preferred Stock and 300% of the $1.25 Conversion Rate in the case of the Series C Preferred Stock, and $1.70 per share in the case of the Class A and Class B Warrants, and $3.75 per share in the case of the Class C Warrants for 20 consecutive trading days ending within 15 days prior to the date notice of redemption is given.
 
This registration statement also includes Placement Agent Warrants to purchase an aggregate of 3,107,203 Units issued in connection with the above-described Bridge Offering and Series A, B and C Private Placements.
 
This registration statement of the Company is for the purpose of allowing Selling Stockholders to resell their shares at their own discretion.  This registration statement also serves as a post-effective amendment to its two prior registration statements pursuant to Rule 429(b) under the Securities Act.  The Company’s initial registration statement on Form S-1 (No. 333-158474) was declared effective by the SEC on August 10, 2009.  Its second registration statement on Form S-1 (No. 333-169386) was declared effective by the SEC on October 14, 2010.  No founders’ shares or any other shares of common stock held by affiliates are being registered for resale.  The selling stockholders are the retail accredited investors in the Company’s Bridge Financing and Preferred Stock Offerings and the Placement Agent’s Warrants, for whom the Company agreed to file this registration statement.  None of the Units or Bridge Shares purchased by affiliates of the Company are being registered.  Thus, an aggregate of 1,257,500 Bridge Shares, 11,114,557 shares of common stock issuable upon conversion of Preferred Stock and 7,908,199 shares of common stock issuable upon exercise of Warrants and 3,107,203 shares of Common Stock issuable upon exercise of placement agent warrants, or an aggregate of 23,387,488 shares of Common Stock are registered for resale hereby.
 
The Company shall receive no consideration, directly or indirectly, in connection with the future sale of the shares registered under this registration statement by selling stockholders.
 
 
6

 
 
Summary Financial Information
 
The summary financial information set forth below is derived from the more detailed audited and unaudited financial statements of the Company appearing elsewhere in this prospectus.  This information should be read in conjunction with such financial statements, including the notes to such financial statements.
 
Statement of Operations Data:
 
   
Nine Months Ended
   
Years Ended
 
   
September 30,
   
December 31,
 
   
2014
   
2013
   
2013
   
2012
 
   
(Unaudited)
   
(Unaudited)
             
Revenue
 
$
-
   
$
-
   
$
-
   
$
-
 
Total Operating Expenses
   
2,136,244
     
1,668,545
     
1,953,731
     
1,312,405
 
Gain (Loss) on derivative liability
   
--
     
(3,926
   
(3,926
)
   
(8,154
)
Grant income
   
--
     
--
     
--
     
--
 
Interest income
   
--
     
--
     
--
     
--
 
Total other income (expense)
   
(3,435)
     
(3,453)
     
(3,141
)
   
1,471
 
Net Loss
   
(2,139,679
)
   
(1,671,998
)
   
(1,956,872
)
   
(1,310,934
)
Basic and Diluted
                               
Loss Per Share
 
$
(0.17
)
 
$
(0.13
)
 
$
(0.34
)
 
$
(0.10
)
Weighted Average Number of Shares Outstanding
   
12,877,500
     
12,848,108
     
12,877,500
     
12,833,758
 
 
Balance Sheet Data:
 
   
September 30,
   
December 31,
 
   
2014
   
2013
   
2012
 
   
(Unaudited)
             
Current Assets
 
$
1,177,769
   
$
1,241,397
   
$
31,922
 
Total Assets
   
1,177,769
     
1,241,397
     
32,066
 
Accounts Payable And Accrued Expenses
   
874,631
     
421,632
     
894,475
 
Derivative Liability
           
--
     
5,687,262
 
Total Liabilities
   
874,631
     
421,631
     
6,581,737
 
Preferred Stock
   
1,041
     
879
     
541
 
Common Stock
   
14,125
     
12,879
     
12,839
 
Accrued Dividends
   
796,181
     
1,353,961
     
861,872
 
Additional Paid-In Capital
   
12,282,878
     
10,120,454
     
1,286,613
 
Accumulated Deficit
   
(12,808,087
)
   
(10,668,408
)
   
(8,711,836
)
Stockholders’ Equity (Deficit)
   
303,138
     
819,765
     
6,549,671
 
Total Liabilities and Stockholders’ Equity
 
$
1,177,769
   
$
1,241,397
   
$
32,066
 
 
 
7

 
 
WHERE YOU CAN FIND MORE INFORMATION
 
We will distribute annual reports to our stockholders, including financial statements examined and reported on by independent certified public accountants. We also will provide you without charge, upon your request, with a copy of any or all reports and other documents we file with the SEC, as well as any or all of the documents incorporated by reference in this prospectus or the registration statement we filed with the SEC registering for resale the shares of our common stock being offered pursuant to this prospectus, other than exhibits to such documents unless such exhibits are specifically incorporated by reference into such documents. Requests for such copies should be directed to Dr. Lawrence Helson, the Company’s Chief Executive Officer, at SignPath Pharma Inc., 3477 Corporate Parkway, Suite 100, Center Valley, PA 18034; telephone (215) 538-9946; fax: 215-538-1245; URL:www.signpathpharma.com.
 
We have filed a registration statement on Form S-1 with the SEC registering under the Securities Act the common stock that may be distributed under this prospectus. This prospectus, which is a part of such registration statement, does not include all of the information contained in the registration statement and its exhibits. For further information regarding us and our common stock, you should consult the registration statement and its exhibits.
 
Statements contained in this prospectus concerning the provisions of any documents are summaries of those documents, and we refer you to the documents filed with the SEC for more information. The registration statement and any of its amendments, including exhibits filed as a part of the registration statement or an amendment to the registration statement, are available for inspection and copying as described above.
 
RISK FACTORS
 
The securities offered hereby are speculative, involve a high degree of risk and should only be purchased by persons who can afford to lose their entire investment. Prospective purchasers should carefully consider, among other things, the following risk factors relating to the business of the Company and this offering prior to making any investment. You are strongly urged to consult with professional financial advisors, accountants, and lawyers in evaluating this investment and making an independent and informed decision about whether or not to invest your money in this offering.
 
Risks Related to Our Company
 
History of significant losses and risk of losing entire investment.
 
The Company’s financial statements reflect that it has incurred significant losses since inception, including net losses of $1,310,934, $1,956,872, and $2,139,679 for the years ended December 31, 2012 and 2013, and the nine month period ended September 30, 2014, respectively. The Company expects to continue to have losses and negative cash flows for the foreseeable future, and it is possible that the Company may never reach profitability. Therefore, there is a significant risk that public investors may lose some or all of their investment.
 
 
8

 

Our financial statements have been prepared assuming that the Company will continue as a going concern.
 
Our audited financial statements for the fiscal year ended December 31, 2013 have been prepared assuming the Company will continue as a going concern. As discussed in Note 2 to the financial statements for the period ended December 31, 2013, the continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability to raise equity or debt financing, and the attainment of profitable operations from the Company’s planned business. Our independent registered public accounting firm has included an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern in their audit report for the fiscal year ended December 31, 2013. If we are unable to raise additional capital or borrow money we will not be able to complete and file INDs with the FDA in order to commence clinical trials. If that were to occur the Company would be forced to suspend or terminate operations and, in all likelihood cause investors to lose their entire investment.  During Fiscal 2013, we raised $3,380,000 of gross proceeds, and from January 1, 2014 through November 26, 2014, we raised an additional $1,940,000 of gross proceeds, which has allowed us to continue operations.
 
We are a development stage company, making it difficult for you to evaluate our business and your investment.
 
We are in the development stage and our operations and the development of our proposed products are subject to all of the risks inherent in the establishment of a new business enterprise, including:
 
 
the absence of an operating history;
 
 
the lack of commercialized products;
 
 
reliance on third parties for the development and commercialization of some of our proposed products;
 
 
uncertain market acceptance of our proposed products; and
 
 
reliance on our founder Dr. Lawrence Helson.
 
Because we are subject to these risks, you may have a difficult time evaluating our business and your purchase of our securities.
 
No revenue for the foreseeable future, with substantial losses and no guarantee of profitability.
 
At this stage of its growth cycle, the Company has a limited operating history and no revenues, products ready for market (with the exception of an advertisement to sell liposomal curcumin for restricted animal research), customers or marketing resources.
 
As a development stage company, the Company has a limited relevant operating history upon which an evaluation of its prospects can be made. Such prospects must be considered in light of the risks, expenses and difficulties frequently encountered in establishing a new business in the evolving and heavily-regulated pharmaceuticals industry, which is characterized by an ever-increasing number of market entrants, intense competition and high failure rate. In addition, significant challenges are often encountered in shifting from developmental to commercial activities.
 
 
9

 
 
In addition, we are subject to many business risks, including but not limited to, unforeseen capital requirements, failure of market acceptance, failure to establish business relationships, and competitive disadvantages against larger and more established companies. In addition, there can be no assurance that the Company will ever be able to generate revenues or, if the Company generates revenues, that it will ever be profitable, or that the Company will be able to obtain sufficient additional funds to continue its planned activities. Therefore, prospective investors may lose all or a portion of their investment. The Company does not anticipate that it will have any revenues for the foreseeable future.
 
Concentration of ownership by a Founder and its affiliates raises a potential conflict of interest between the Company, a Founder and certain of their employees.
 
Bruce Meyers, a Founder of the Company and CEO of Meyers Associates, the Company's Placement Agent, is the General Partner of Meyers Investments Family Limited Partnership, which owns 5,465,283 shares of the 24,521,305 outstanding shares (or an aggregate of  22.3%) of the Company’s voting securities. This concentration of ownership may not be in the best interests of the Company’s other stockholders and Meyers Associates may be subject to potential conflicts of interest.  As the Company's largest shareholder, these conflicts of interest include Mr. Meyers being in a position to elect the Company's Board of Director which may (i) vote to take the Company in a direction different from that of Management; (ii) approve extraordinary corporate transactions including the merger or consolidation of the Company or the sale of the Company's assets to an entity including one related to Mr. Meyers; (iii) approve transactions with a short term return to Mr. Meyers, as opposed to waiting for transactions in the long-term best interests of the Company' and (iv) approve transactions with a relation to Mr. Meyers, as opposed to negotiating with non-affiliated third parties. As a result of Meyers Associates’ ownership of the Company, it is likely that in the event the Company becomes a publicly-traded company, the Placement Agent would not be able to serve as a market maker in the Company’s common stock. To date, Meyers Associates, L.P. has not made a market for the Company's securities in the marketplace, nor has it submitted quotations on an interdealer quotation system for the Company's common stock in the past or is currently doing so.  See “Principal Stockholders”.
 
 The Company does not have the financial resources necessary to successfully complete development and market any formulations of curcumin.
 
As of September 30, 2014, the Company had $1,177,769 cash on hand.  These funds are expected to be sufficient to conduct clinical trials in Europe, to file a second IND and commence clinical trials in the U.S.  However, in order to complete product development and marketing, the Company will need to attract sufficient additional capital.  If the Company does find such financing, it may be on terms that are unfavorable or dilutive, to owners of the Company’s equity securities.
 
Our drug development program will require substantial additional capital to successfully complete it, arising from costs to:
 
 
complete research, preclinical testing and human studies;
 
 
establish pilot scale and commercial scale manufacturing processes; and
 
 
establish and develop quality control, regulatory, marketing, sales and administrative capabilities to support these programs.
 
Our future operating and capital needs will depend on many factors, including:
 
 
the pace of scientific progress in our research and development programs and the magnitude of these programs;
 
 
the scope and results of preclinical testing and human studies;
 
 
the time and costs involved in obtaining regulatory approvals;
 
 
the time and costs involved in preparing, filing, prosecuting, maintaining and enforcing patent claims;
 
 
competing technological and market developments;
 
 
our ability to establish additional collaborations;
 
 
changes in our existing collaborations;
 
 
the cost of manufacturing scale-up; and
 
 
the effectiveness of our commercialization activities.
 
 
10

 
 
We base our outlook regarding the need for funds on many uncertain variables. Such uncertainties include regulatory approvals, the timing of events outside our direct control such as negotiations with potential strategic partners and other factors. Any of these uncertain events can significantly change our cash requirements as they determine such one-time events as the receipt of major milestones and other payments.
 
We cannot be certain that additional funding will be available on acceptable terms, or at all. To the extent that we raise additional funds by issuing equity securities, our stockholders may experience significant dilution. Any debt financing, if available, may involve restrictive covenants that impact our ability to conduct our business. If we are unable to raise additional capital, when required, or on acceptable terms, we may have to significantly delay, scale back or discontinue the development and/or the commercialization of one or more of our product candidates. Accordingly, any failure to raise adequate capital in a timely manner would have a material adverse effect on our business, operating results, financial condition and future growth prospects.
 
Additional funds are required to support our operations but we may be unable to obtain them on favorable terms, we would be required to cease or reduce further development or commercialization of our potential products.
 
We will need to increase the size of our organization, and we may experience difficulties in managing growth.
 
We are a small company with one full-time employee, our CEO, as of the date of this Prospectus. To conduct our clinical trials and commercialize our product candidates, we will need to expand our employee base for managerial, operational, financial and other resources. Future growth will impose significant added responsibilities on members of management, including the need to identify, recruit, maintain and integrate additional employees. Our future financial performance and our ability to commercialize our product candidates and to compete effectively will depend, in part, on our ability to manage any future growth effectively.
 
The Company’s success is highly dependent on attracting and retaining key scientific and management personnel, but the Company may be unable to do so.
 
The Company’s future depends on the service of its scientific and management teams and other key personnel. The Company may be unable to attract highly qualified personnel, especially if it is unable to demonstrate to those individuals that it has sufficient funding to adequately compensate them either through current cash salary or with equity that could eventually have substantial value. If the Company is unable to attract highly qualified individuals, the Company may be unable to continue development or commercialization efforts of its proposed products which would have a material adverse effect on the Company’s operations.
 
Risks Related to Our Business
 
We have no experience in manufacturing, sales, marketing or distribution capabilities.
 
The Company has no experience in manufacturing, selling, marketing or distributing any formulations of curcumin or any other product. The Company has outsourced production of raw materials for production of liposomal curcumin and will outsource production of good manufacturing practice (“GMP”) grade of liposomal curcumin and nanocurcumin to commercial facilities. There can be no assurance that the Company will be able successfully to sell, market, commercialize or distribute any formulation of curcumin or any other products at any time in the future.
 
If we lose the services of our Chief Executive Officer, our operations would be disrupted and our business could be harmed.
 
Our business plan relies significantly on the continued services of our CEO, Dr. Lawrence Helson, age 83. If we were to lose his services, our ability to continue to execute our business plan would be materially impaired. While we have entered into an employment agreement with Dr. Helson, the agreement would not prevent him from terminating his employment with us. Dr. Helson has not indicated he intends to leave the Company, and we are not currently aware of any facts or circumstances that suggest he might leave us.  See "Management--Contingency Plan."
 
 
11

 
 
We are devoting our efforts to a limited number of product candidates, and there is no assurance of product success.
 
The Company is an early stage biopharmaceutical company and, since its inception, has focused mainly on research and development. There can be no assurance that the Company will ever successfully develop liposomal curcumin, nanocurcucmin, slow release PLGA formulation, or any other formulation of curcumin or any product whatsoever, or obtain FDA approval.
 
Two of our three curcumin formulations will require extensive additional development, including preclinical testing and human studies, as well as regulatory approvals, before we can commercialize and market them. We cannot predict if or when any of the product candidates we are developing will be approved for marketing. There are many reasons that we may fail in our efforts to develop our potential products, including the possibility that:
 
 
human studies may show that our potential products are ineffective or cause harmful side effects;
 
 
the products may fail to receive necessary regulatory approvals from the FDA in a timely manner, or at all;
 
 
the products, if approved, may not be produced in commercial quantities or at reasonable costs;
 
 
the potential products, once approved, may not achieve commercial acceptance;
 
 
regulatory or governmental authorities may apply restrictions to our potential products, which could adversely affect their commercial success; or
 
 
the proprietary rights of other parties may prevent us from marketing our potential products (negligible because there is no other commercial parenteral curcumin developer, and we have approved patent protection).
 
Given our limited focus on two product candidates, if these product candidates do not prove successful in clinical trials, and are not approved or are not commercialized because we have insufficient resources for continued development or for any other reason, we may be required to suspend or discontinue our operations and our business could be materially harmed.
 
SignPath partially depends on intellectual property licensed from third parties which it may not be able to maintain, however has submitted additional patent applications affording broad protection.
 
The Company’s business plan depends on developing products based on intellectual property licensed from The University of Texas MD Anderson Cancer Center (“UTMDACC”). and the University of North Texas ("UNT"). See “Business - Intellectual Property.” The Company’s license agreements require the Company to make payments to the licensors in the future. The Company currently does not have sufficient resources to make all of such payments, and there can be no assurance that the Company will be able to make such payments in the future.
 
The Company’s exclusive license with UTMDACC is for the life of patent rights or, if no patent rights are issued, for up to 30 years; however, is terminable upon 30 days’ written notice if the Company fails to cure a breach of payment or funding requirement, or upon up to 90 days’ written notice for any other breach of contract by the Company.
 
 
12

 
 
The Company’s license agreement with JHU is for the life of the last patent to expire or 20 years if no patents issue. It is terminable for a breach of contract by SignPath not cured within 30 days after receipt of notice.
 
 The Company’s license agreement with UNT terminates the later of the expiration of any patent rights or 15 years.  UNT has the right to terminate the license on 90 days’ written notice if the Company has not provided written evidence that it is making diligent efforts to actively commercialize licensed production.
 
Additional patents and pending patent applications filed by third parties, if issued, may cover aspects of products the Company intends to develop or may develop and test in the future. As a result, the Company may be required to obtain additional licenses from third-party patent holders in order to use, manufacture or sell the Company’s product candidates.
 
There can be no assurance that the Company’s current arrangements with JHU, UTMDACC, UNT or any future arrangements will lead to the development of any products with any commercial potential, that the Company will be able to obtain proprietary rights or licenses for proprietary rights with respect to any technology development in connection with these arrangements or that the Company will be able to ensure the confidentiality of any proprietary rights and information developed with JHU, UTMDACC, or UNT will prevent the public disclosure thereof. The Company is not aware of any litigation, threatened litigation, or challenge to intellectual property, however, once any patents are issued to the Company, we may be subject to future litigation.
 
There can be no assurance that the Company will be able to maintain its existing license agreements or obtain additional necessary licenses on reasonably acceptable terms or at all. The Company’s inability to maintain its existing licenses or obtain additional licenses on acceptable terms would have a material adverse effect on the Company’s business, financial condition and results of operations.
 
The US FDA regulatory process is costly, lengthy and requires specific expertise.
 
The Company will rely initially on consultants and service organizations with prior experience working with the FDA to guide the product through the regulatory process. The Company has contracts with Clinipace Inc. to analyze, prepare and present Investigational New Drug (“IND”) applications to the FDA and conduct clinical trials. The process of obtaining regulatory approvals can be extremely costly and time-consuming, and there is no guarantee of success. If the Company does not receive approval of any of its IND applications, it will not be able to proceed with Phase Ib-II clinical testing, in the United States, but has completed an IND, and an EMA approved Phase Ib trial in Austria. In addition, clinical testing is not predictable. Even if the FDA approves an IND application, the Company cannot guarantee that the FDA will approve Phase III clinical results. The Company’s failure to obtain required regulatory approvals would have a material adverse effect on the Company’s business, financial condition and results of operations and could require the Company to curtail or cease its operations.
 
Delays in clinical testing could result in increased cost to us and delay our ability to generate revenue.
 
We may experience delays in clinical testing of our product candidates. We do not know whether planned clinical trials will need to be redesigned or will be completed on schedule, if at all. Clinical trials can be delayed for a variety of reasons, including delays in obtaining regulatory approval to commence a trial, in reaching agreement on acceptable clinical trial terms with prospective sites, in obtaining institutional review board approval to conduct a trial at a prospective site, in recruiting patients to participate in a trial or in obtaining sufficient supplies of clinical trial materials. Many factors affect patient enrollments, including the size of the patient population, the proximity of patients to clinical sites, the eligibility criteria for the trial, competing clinical trials and new drugs approved for the conditions we are investigating. Prescribing physicians will also have to decide to use our product candidates over existing experimental drugs that have putative better safety and efficacy profiles. Any delays in completing our clinical trials will increase our cost, slow down our product development and approval process and delay our ability to generate revenue.
 
We may be required to suspend or discontinue clinical trials due to unexpected side effects or other safety risks that could preclude approval of our product candidates.
 
Our clinical trials may be suspended at any time for a number of reasons. For example, we may voluntarily suspend or terminate our clinical trials if at any time we believe that they present an unacceptable risk to the clinical trial patients. In addition, regulatory agencies may order the temporary or permanent discontinuation of our clinical trials at any time if they believe that the clinical trials are not being conducted in accordance with requirements or that they present an unacceptable safety risk to the clinical trial patients.
 
 
13

 
 
The Company has not encountered any adverse effects in mice or rats with liposomal curcumin or nanocurcumin. However, studies in humans have been initiated by the Company and an acceptable dose level has been identified, with less than grade I erythroid (RBC) toxicity. Administering any product candidates to humans may produce undesirable side effects. These side effects could interrupt, delay or halt clinical trials of our product candidates and could result in the FDA or other regulatory authorities denying further developments or approval of our product candidates for any or all targeted indications. Ultimately, some or all of our product candidates may prove to be unsafe for human use. Moreover, we could be subject to significant liability if any volunteer or patient suffers, or appears to suffer, adverse health effects as a result of participating in our clinical trials.
 
If testing of a particular product candidate does not yield successful results, then we will be unable to commercialize that product.
 
Our product candidates in clinical trials must meet rigorous testing standards. We must demonstrate the safety and efficacy of our potential products through extensive preclinical and clinical testing. Clinical trials are subject to continuing oversight by governmental regulatory authorities, such as the FDA, and the EMA and institutional review boards and must meet the requirements of these authorities in the United States and in Europe including those for informed consent and good clinical practices. We may not be able to comply with these requirements, which could disqualify completed or ongoing clinical trials. We may experience numerous unforeseen events during, or as a result of, the testing process that could delay or prevent commercialization of our product candidates, including the following:
 
 
safety and efficacy results from human clinical trials may show the product candidate to be less effective or safe than desired, however, those results may not be replicated in later clinical trials;
     
 
the results of preclinical studies may not be indicative of results that will be obtained in human clinical trials;
     
 
after reviewing relevant information, including preclinical testing or human clinical trial results, we may abandon or substantially restructure projects that we might previously have believed to be promising;
     
 
we and/or the FDA or EMA may suspend or terminate clinical trials if the participating patients are being exposed to unacceptable health risks or for other reasons; and
     
 
the effects of our product candidates may not be the desired effects or may include undesirable side effects or other characteristics that interrupt, delay or cause us or the FDA to halt clinical trials or cause the FDA or foreign regulatory authorities to deny approval of the product candidate for any or all target indications.
 
Data from our completed clinical trials, when and if completed, may not be sufficient to support approval by the FDA and the EMA. The clinical trials of our product candidates may not be completed as or when planned, and the FDA or EMA may not approve any of our product candidates for commercial sale. If we fail to demonstrate the safety or efficacy of a product candidate to the satisfaction of the FDA or EMA, this will delay or prevent regulatory approval of that product candidate. Therefore, any delay in obtaining, or inability to obtain, FDA or EMA approval of any of our product candidates could materially harm our business and cause our stock price to decline.
 
Even if we receive regulatory approval for our product candidates, we will be subject to ongoing significant regulatory obligations and oversight.
 
If we receive regulatory approval to sell our product candidates, the FDA and foreign regulatory authorities may, nevertheless, impose significant restrictions on the indicated uses or marketing of such products, or impose ongoing requirements for post-approval studies. If we fail to comply with applicable regulatory requirements, we may be subject to fines, suspension or withdrawal of regulatory approvals, product recalls, seizure of products, operating restrictions and criminal prosecution. Any of these events could harm or prevent sales of the affected products or could substantially increase the costs and expenses of commercializing and marketing these products. In addition, if any of our product candidates receive marketing approval and we or others later identify undesirable side effects caused by the product, we could face one or more of the following:
 
 
14

 
 
 
a change in the labeling statements or withdrawal of FDA or other regulatory approval of the product;
 
       
 
a change in the way the product is administered; or
     
 
the need to conduct additional clinical trials.
 
Discovery after approval of previously unknown problems with our products, manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in actions such as:
 
 
restrictions on such products’ manufacturers or manufacturing processes;
 
 
restrictions on the marketing of a product;
 
 
warning letters;
 
 
withdrawal of the products from the market;
 
 
refusal to approve pending applications or supplements to approved applications that we submit;
 
 
recall of products;
 
 
fines, restitution or disgorgement of profits or revenue;
 
 
suspension or withdrawal of regulatory approvals;
 
 
refusal to permit the import or export of our products;
 
 
product seizure;
 
 
injunctions; or
 
 
imposition of civil or criminal penalties.
 
Our potential products face significant regulatory hurdles prior to commercialization and marketing which could delay or prevent sales; No assurance of FDA approval.
 
The FDA and comparable agencies in foreign countries impose substantial requirements upon the introduction of therapeutic and diagnostic pharmaceutical and biological products through lengthy and detailed laboratory and clinical testing procedures, sampling activities and other costly and time-consuming procedures. Satisfaction of these requirements typically takes several years or more and varies substantially based upon the type, complexity and novelty of the product. The regulatory review may result in extensive delay in the regulatory approval process. Regulatory requirements ultimately imposed could adversely affect the Company’s ability to clinically test, manufacture or market potential products. Government regulation also applies to the manufacture of pharmaceutical and biological products.
 
Before we obtain the approvals necessary to sell any of our potential products, we must show through preclinical studies and human testing that each potential product is safe and effective. Failure to show any potential product’s safety and effectiveness would delay or prevent regulatory approval of the product and could adversely affect our business. The clinical trials process is complex and uncertain. The results of preclinical studies and initial clinical trials may not necessarily predict the results from later large-scale clinical trials. In addition, clinical trials may not demonstrate a potential product’s safety and effectiveness to the satisfaction of the regulatory authorities. A number of companies have suffered significant setbacks in advanced clinical trials or in seeking regulatory approvals, despite promising results in earlier trials.
 
 
15

 
 
The rate at which we complete our clinical trials depends on many factors, including our ability to obtain adequate supplies of the potential products to be tested and patient enrollment. Patient enrollment is a function of many factors, including the size of the patient population, the proximity of patients to clinical sites and the eligibility criteria for the trial. Delays in patient enrollment may result in increased costs and longer development times. In addition, under our license agreements with UTMDACC, JHU, and UNT these universities have certain rights to control product development and clinical programs for products developed under the collaborations. As a result, the universities may conduct these programs more slowly or in a different manner than we had expected. Even if clinical trials are completed, we or the universities still may not apply for FDA approval in a timely manner or the FDA still may not grant approval.
 
Competition in the biotechnology and pharmaceutical industries is intense, and if SignPath fails to compete effectively its financial results will suffer.
 
SignPath’s business environment is characterized by extensive research efforts, rapid developments and intense competition. Its competitors may have or may develop superior technologies or approaches to the development of competing products, which may provide them with competitive advantages. The Company’s potential curcumin product candidates may not compete successfully. The Company believes that successful competition in its industry depends on product efficacy, safety, reliability, availability, timing, scope of regulatory approval, acceptance and price, among other things. Important factors to SignPath’s success also include speed in developing product candidates, completing clinical development and laboratory testing, obtaining regulatory approvals and manufacturing and selling commercial quantities of potential products to the market.
 
            The Company expects competition to increase as technological advances are made and commercial applications broaden. In the event it develops its initial product candidates and any additional product candidates, the Company anticipates it may face substantial competition from pharmaceutical, biotechnology and other companies, universities and research institutions. The Company is aware of other companies and academic groups that focus on cellular signal transduction pathways and are developing specific pathway or related kinase inhibitors. These competitors include Exelixis Inc., Onyx Pharmaceuticals, and several major pharmaceutical companies, however, none of their compounds has the broad spectrum of activity of curcumin.
 
Many of the Company’s non-curcumin-competitors have substantially greater capital resources, research and development staffs, facilities and experience in conducting clinical trials and obtaining regulatory approvals, as well as in manufacturing and marketing pharmaceutical products. In addition, some of SignPath’s putative competitors may achieve product commercialization or patent protection earlier than SignPath achieves commercialization or patent protection, if at all.
 
If we or our collaborators receive regulatory approvals for our product candidates, some of our products will compete with well-established, FDA-approved therapies that have generated substantial sales over a number of years. However, we will focus on unmet needs, and indications where FDA-approved therapies have failed. In addition, we will face competition based on many different factors, including:
 
 
the safety and effectiveness of our products;
 
 
the timing and scope of regulatory approvals for these products;
 
 
the availability and cost of manufacturing, marketing and sales capabilities;
 
 
the effectiveness of our marketing and sales capabilities;
 
 
the price of our products;
 
 
the availability and amount of third-party reimbursement; and
 
 
the strength of our patent position.
 
 
16

 
 
We also anticipate that we will face increased competition in the future as new companies enter our target markets and scientific developments surrounding cancer therapies and drugs for treatment of inflammatory conditions continue to accelerate. Competitors may develop more effective or more affordable products, or may achieve patent protection or commercialize products before us or our collaborators. In addition, the health care industry is characterized by rapid technological change. New product introductions, technological advancements, or changes in the standard of care for our target diseases could make some or all of our products obsolete.
 
The Company may be unable to defend or protect its intellectual property.
 
The Company intends to protect its intellectual property through patents and trademarks. The patent positions of biotechnology companies generally are highly uncertain and involve complex legal and factual questions that will determine who has the right to develop a particular product or process. As a result, the Company cannot predict which of its patent applications will result in the granting of patents or the timing of the granting of the patents. Additionally, many of the Company’s competitors have significantly greater capital with which to pursue patent litigation. There can be no assurance that the Company would have the resources to defend its patents in the face of a lawsuit.
 
Further, the Company partially relies on trade secrets, know-how and other proprietary information. The Company seeks to protect this information, in part, through the use of confidentiality agreements with employees, consultants, advisors and others. Nonetheless, there can be no assurance that those agreements will provide adequate protection for the Company’s trade secrets, know-how or other proprietary information and prevent their unauthorized use or disclosure. While the Company is not aware of any challenges to its intellectual property, once any patents are issued to the Company litigation may ensue. There is also the risk that the Company’s employees, consultants, advisors or others will not maintain confidentiality of such trade secrets or proprietary information, or that this information may become known in some other way or be independently developed by the Company’s competitors.
 
SignPath is exposed to product liability risks.
 
The Company’s business exposes it to potential product liability risks that are inherent in the testing, including testing in human clinical trials, manufacturing, marketing and sale of biotechnology products. There can be no assurance that product liability claims will not be asserted against the Company.
 
We plan to have product liability insurance covering our clinical trials which we currently believe will be adequate to cover any product liability exposure we may have. Clinical trial and product liability insurance is becoming increasingly expensive. As a result, we may be unable to obtain sufficient insurance coverage at a reasonable cost to protect us against losses that could have a material adverse effect on our business. An individual may bring a product liability claim against us if one of our products or product candidates causes, or is claimed to have caused, an injury or is found to be unsuitable for consumer use. Any product liability claim brought against us, with or without merit, could result in:
 
 
liabilities that substantially exceed our product liability insurance, which we would then be required to pay from other sources, if available;
 
 
 increase of our product liability insurance rates or the inability to maintain insurance coverage in the future on acceptable terms, or at all;
 
 
withdrawal of clinical trial volunteers or patients;
 
 
damage to our reputation and the reputation of our products, resulting in lower sales;
 
 
regulatory investigations that could require costly recalls or product modifications;
 
 
litigation costs; and
 
 
the diversion of management’s attention from managing our business.
 
 
17

 
 
A successful product liability claim or series of claims brought against the Company could have a material adverse effect on the Company’s business, financial condition and results of operation.
 
The Company may be sued by third parties who claim that its products infringe on their intellectual property rights.
 
The Company may be exposed to future litigation by third parties based on claims that its patents, products or activities infringe on the intellectual property rights of others or that the Company has misappropriated the trade secrets of others. Any litigation or claims against the Company, whether or not valid, could result in substantial costs, could place a significant strain on the Company’s financial and managerial resources, and could harm the Company’s reputation. In addition, intellectual property litigation or claims could force the Company to do one or more of the following, any of which could have a material adverse effect on the Company or cause the Company to curtail or cease its operations:
 
 
Cease testing, developing, using and/or commercializing liposomal curcumin, nanocurcumin, slow release PLGA formulation or other formulations of curcumin or other products that it may develop; or
 
 
Obtain a license from the holder of the infringed intellectual property right, which could also be costly or may not be available on reasonable terms.
 
SignPath may be subject to damages resulting from claims that it or its employees have wrongfully used or disclosed alleged trade secrets of their former employers.
 
The Company’s current employee and/or future employees have been previously employed by other biotechnology or pharmaceutical companies. Although no claims against the Company are currently pending or threatened, the Company may be subject to claims that these employees or the Company have inadvertently or otherwise used or disclosed trade secrets or other proprietary information of their former employers. Litigation may be necessary to defend against these claims. Even if SignPath is successful in defending against these claims, litigation could result in substantial costs and be a distraction to management. If the Company fails in defending such claims, in addition to paying money claims, it may lose valuable intellectual property rights or personnel. A loss of key research personnel or their work product could hamper or prevent its ability to commercialize certain product candidates, which could severely harm SignPath’s business.
 
Governmental and third-party payors may impose sales and pharmaceutical pricing restrictions or controls on SignPath’s potential products that could limit its future product revenues and adversely affect profitability.
 
The commercial success of the Company’s potential products is substantially dependent on whether third-party reimbursement is available for the ordering of its products by the medical profession for use by their patients. Medicare, Medicaid, health maintenance organizations and other third-party payors may not cover or provide adequate payment for SignPath’s potential products. They may not view the Company’s potential products as cost-effective and reimbursement may not be available to consumers or may not be sufficient to allow its potential products to be marketed on a competitive basis. Likewise, legislative or regulatory efforts to control or reduce health care costs or reform government health care programs could result in lower prices or rejection of its potential products. Changes in reimbursement policies or health care cost containment initiatives that limit or restrict reimbursement for the Company’s products may cause its revenue to decline.
 
Rapid technological change could make any products that SignPath eventually develops obsolete.
 
Biopharmaceutical technologies have undergone rapid and significant change and the Company expects that they will continue to do so. Any compounds, products or processes that SignPath develops may become obsolete or uneconomical before the Company recovers any expenses incurred in connection with their development.
 
 
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We expect to rely heavily on third party relationships and termination of any of these programs could reduce the financial resources available to us, including research funding and milestone payments.
 
Our strategy for developing and commercializing many of our potential product candidates, including products aimed at larger markets, includes entering into collaborations with research partners, licensors, licensees and others. These collaborations will provide us with research and development resources for potential products. These agreements also will give our collaborative partners significant discretion when deciding whether or not to pursue any development program. Our collaborations may not be successful. Currently, we have collaborative relationships with JHU, UTMDACC, and UNT. See “Business – Intellectual Property”.
 
In addition, JHU, UTMDACC, or UNT may develop products, either alone or with others, which compete with the types of drugs they currently are developing with us. This would result in less support and increased competition for our programs. If any of our three licensors breach or terminate their agreements with us or otherwise fail to conduct their collaborative activities successfully, our product development under these agreements will be delayed or terminated.
 
We may have disputes in the future with JHU, UTMDACC, and UNT including disputes concerning who owns the rights to any technology developed. These and other possible disagreements between us and our licensors could delay our ability and the ability of the universities to achieve milestones or our receipt of other payments. In addition, any disagreements could delay, interrupt or terminate the collaborative research, development and commercialization of certain potential products, or could result in litigation or arbitration. The occurrence of any of these problems could be time-consuming and expensive and could adversely affect our business.
 
In general, collaborative agreements provide that they may be terminated under certain circumstances. There can be no assurance that the Company will be able to extend either of its agreements with the universities upon their termination or expiration, or that the Company will be able to enter into new collaborative agreements with existing or new partners in the future. To the extent the Company chooses not to or is unable to establish any additional third party arrangements, it would require substantially greater capital to undertake research, development and marketing of its proposed products at its own expense. In addition, the Company may encounter significant delays in introducing its proposed products into certain markets or find that the development, manufacture or sale of it proposed products in such markets is adversely affected by the absence of such third party agreements.
 
We will rely on third parties to supply and manufacture our product candidates, without any direct control over the timing for the supply, production and delivery of our product candidates, thereby possibly adversely affecting any future revenues.
 
Curcumin was initially obtained from SAFC and subsequently from Sabinsa in Bangalore, India. We will rely exclusively and be dependent on certain third party source suppliers to supply pure synthetic curcumin for our product candidates. Liposomal curcumin is manufactured in Vienna, Austria by Polymun Scientific Immunbiologische Forschung GmbH. We have obtained initial quantities of liposomal curcumin from Sabinsa/Sami Labs, Bangalore, India. Nanocurcumin will be manufactured by Regis Pharmaceuticals. The polymer was manufactured by Surmodics. See “Business – Potential Commercialization of Liposomal Curcumin and Nanocurcumin; and Raw Materials; Supplies.”
 
If any of these arrangements terminate, locating additional or replacement suppliers for these materials may take a substantial amount of time. In addition, we may have difficulty obtaining similar supplies from other suppliers that are acceptable to the FDA. If we have to switch to a replacement supplier, we may face additional regulatory delays and the manufacture and delivery of our product candidates could be interrupted for an extended period of time, which may delay completion of our clinical trials or commercialization of our product candidates. As a result, regulatory approval of our product candidates may not be received at all. All these delays could cause delays in commercialization of our product candidates, delays in our ability to generate revenue, and increase our costs.
 
 
19

 
 
Further, our contract manufacturers must comply with current Good Manufacturing Practices, or cGMPs, and other government regulations, which may limit the available sources of our needed supplies. The FDA periodically inspects manufacturing facilities, including third parties who manufacture products or active ingredients for us. The FDA may not believe that the chosen manufacturers have sufficient experience making the dosage forms that we have contracted with them to produce, and may subject those manufacturers to increased scrutiny. Pharmaceutical manufacturing facilities must comply with applicable cGMPs, and manufacturers usually must invest substantial funds, time and effort to ensure full compliance with these standards. We will not have control over our contract manufacturers’ compliance with these regulations and standards. Failure to comply with applicable regulatory requirements can result in sanctions, fines, delays or suspensions of approvals, seizures or recalls of products, operating restrictions, manufacturing interruptions, costly corrective actions, injunctions, adverse publicity against us and our products and possible criminal prosecutions.
 
We will rely on third parties to conduct our clinical trials. If these third parties do not successfully carry out their contractual duties or meet expected deadlines, we may not be able to seek or obtain regulatory approval for or commercialize our product candidates.
 
We will need to retain a third party clinical research organization, or CRO, to implement, provide monitors and manage data for our clinical programs. We and our CRO are required to comply with current Good Clinical Practices, or GCPs, regulations and guidelines enforced by the FDA for all of our products in clinical development. The FDA enforces GCPs through periodic inspections of trial sponsors, principal investigators and trial sites. In the future, if we or our CRO fails to comply with applicable GCPs, the clinical data generated in our clinical trials may be deemed unreliable and the FDA may require us to perform additional clinical trials before approving our marketing applications. We cannot assure you that, upon inspection, the FDA will determine that any of our clinical trials for products in clinical development comply with GCPs. In addition, our clinical trials must be conducted with products produced under cGMP regulations, and will require a large number of test subjects. Our failure to comply with these regulations may require us to repeat clinical trials, which would delay the regulatory approval process.
 
If CROs do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced, or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols, regulatory requirements or for other reasons, our clinical trials may be extended, delayed or terminated, and we may not be able to obtain regulatory approval for or successfully commercialize our product candidates. As a result, our financial results and the commercial prospects for our product candidates would be harmed, our costs could increase, and our ability to generate revenue could be delayed.
 
The Orphan Drug Act may provide a competitor with up to seven years of market exclusivity.
 
The Orphan Drug Act was created to encourage companies to develop therapies for rare diseases by providing incentives for drug development and commercialization. One of the incentives provided by the act is seven years of market exclusivity for the first product in a class licensed for the treatment of a rare disease. We intend to target indications that would be covered by the Orphan Drug Act, and companies may obtain orphan drug status for therapies that are developed for this indication. In the event that any competitor of ours is first to obtain FDA licensure for a competitive product, we could be prevented from obtaining licensure and marketing our product candidates.
 
The commercial success of our product candidates will depend upon the degree of market acceptance of these products among physicians, patients, health care payors and the medical community.
 
Even if a product candidate is approved for sale by the appropriate regulatory authorities, physicians may not prescribe our product candidates, in which case we could not generate revenue or become profitable. Market acceptance by physicians, healthcare payors and patients will depend on a number of factors, including:
 
 
20

 
 
 
acceptance by physicians and patients of each such product as a safe and effective treatment;
 
 
cost effectiveness;
 
 
adequate reimbursement by third parties;
 
 
potential advantages over alternative treatments;
 
 
relative convenience and ease of administration; and
 
 
prevalence and severity of side effects.
 
We are subject to critical accounting policies, and we may interpret or implement required policies incorrectly.
 
We follow generally accepted accounting principles (GAAP) for the United States in preparing our financial statements. As part of this work, we must make many estimates and judgments about future events. These affect the value of the assets and liabilities, contingent assets and liabilities, and revenue and expenses that we report in our financial statements. We believe these estimates and judgments are reasonable, and we make them in accordance with our accounting policies based on information available at the time. However, actual results could differ from our estimates, and this could require us to record adjustments to expenses or revenues that could be material to our financial position and results of operations in future periods.
 
The obligations associated with being a public company require significant resources and management attention, which may divert from our business operations.
 
We are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act. The Exchange Act requires that we file annual, quarterly and current reports with respect to our business and financial condition. The Sarbanes-Oxley Act requires, among other things, that we establish and maintain effective internal controls and procedures for financial reporting. As a result, we will incur significant legal, accounting and other expenses. Furthermore, the need to establish the corporate infrastructure demanded of a public company may divert management's attention from implementing our growth strategy, which could prevent us from improving our business, results of operations and financial condition. We have made, and will continue to make, changes to our internal controls and procedures for financial reporting and accounting systems to meet our reporting obligations as a stand-alone public company. However, the measures we take may not be sufficient to satisfy our obligations as a public company. In addition, we cannot predict or estimate the amount of additional costs we may incur in order to comply with these requirements.
 
Section 404 of the Sarbanes-Oxley Act requires annual management assessments of the effectiveness of our internal control over financial reporting, starting with this, the second annual report that we are required to file with the Securities and Exchange Commission.  In connection with the implementation of the necessary procedures and practices related to internal control over financial reporting, we may identify additional deficiencies. We may not be able to remediate any future deficiencies imposed by the Sarbanes-Oxley Act for compliance with the requirements of Section 404. In addition, failure to achieve and maintain an effective internal control environment could have a material adverse effect on our business and stock price.
 
Risks Related to Our Securities
 
Anti-Takeover, Limited Liability and Indemnification Provisions
 
Some provisions of our certificate of incorporation and by-laws may deter takeover attempts, which may limit the opportunity of our stockholders to sell their shares at a favorable price.
 
Certificate of Incorporation and By-laws. Under our certificate of incorporation, our Board of Directors may issue additional shares of common or preferred stock. Any additional issuance of common stock could have the effect of impeding or discouraging the acquisition of control of us by means of a merger, tender offer, proxy contest or otherwise, including a transaction in which our stockholders would receive a premium over the market price for their shares, and thereby protects the continuity of our management. Specifically, if in the due exercise of its fiduciary obligations, the Board of Directors were to determine that a takeover proposal was not in our best interest, shares could be issued by our Board of Directors without stockholder approval in one or more transactions that might prevent or render more difficult or costly the completion of the takeover by:
 
 
21

 
 
 
diluting the voting or other rights of the proposed acquirer or insurgent stockholder group,
 
 
putting a substantial voting block in institutional or other hands that might undertake to support the incumbent Board of Directors, or
 
 
effecting an acquisition that might complicate or preclude the takeover.
 
Our certificate of incorporation also allows our Board of Directors to fix the number of directors in the bylaws. Cumulative voting in the election of directors is specifically denied in our certificate of incorporation. The effect of these provisions may be to delay or prevent a tender offer or takeover attempt that a stockholder may determine to be in his or its best interest, including attempts that might result in a premium over the market price for the shares held by the stockholders.
 
Delaware Anti-Takeover Law. We are subject to the provisions of Section 203 of the Delaware General Corporation Law concerning corporate takeovers. This section prevents many Delaware corporations from engaging in a business combination with any interested stockholder, under specified circumstances. For these purposes, a business combination includes a merger or sale of more than 10% of our assets, and an interested stockholder includes a stockholder who owns 15% or more of our outstanding voting stock, as well as affiliates and associates of these persons. Under these provisions, this type of business combination is prohibited for three years following the date that the stockholder became an interested stockholder unless:
 
 
the transaction in which the stockholder became an interested stockholder is approved by the Board of directors prior to the date the interested stockholder attained that status;
 
 
on consummation of the transaction that resulted in the stockholder’s becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction was commenced, excluding those shares owned by persons who are directors and also officers; or
 
 
on or subsequent to that date, the business combination is approved by the Board of Directors and authorized at an annual or special meeting of stockholders by the affirmative vote of at least two-thirds of the outstanding voting stock that is not owned by the interested stockholder.
 
This statute could prohibit or delay mergers or other takeover or change in control attempts and, accordingly, may discourage attempts to acquire us.
 
Limited Liability and Indemnification. Our certificate of incorporation eliminates the personal liability of our directors for monetary damages arising from a breach of their fiduciary duty as directors to the fullest extent permitted by Delaware law. This limitation does not affect the availability of equitable remedies, such as injunctive relief or rescission. Our certificate of incorporation requires us to indemnify our directors and officers to the fullest extent permitted by Delaware law, including in circumstances in which indemnification is otherwise discretionary under Delaware law.
 
Under Delaware law, we may indemnify our directors or officers or other persons who were, are or are threatened to be made a named defendant or respondent in a proceeding because the person is or was our director, officer, employee or agent, if we determine that the person:
 
 
conducted himself or herself in good faith, reasonably believed, in the case of conduct in his or her official capacity as our director or officer, that his or her conduct was in our best interests, and, in all other cases, that his or her conduct was at least not opposed to our best interests; and
 
 
in the case of any criminal proceeding, had no reasonable cause to believe that his or her conduct was unlawful.
 
 
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These persons may be indemnified against expenses, including attorney’s fees, judgments, fines, including excise taxes, and amounts paid in settlement, actually and reasonably incurred, by the person in connection with the proceeding. If the person is found liable to the corporation, no indemnification will be made unless the court in which the action was brought determines that the person is fairly and reasonably entitled to indemnity in an amount that the court will establish. Insofar as indemnification for liabilities under the Securities Act may be permitted to directors, officers or persons controlling us under the above provisions, we have been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
 
Absence of a public market for the securities offered hereby will lack liquidity.
 
There is currently no public market for any of the Company’s securities and there can be no assurance that a public market will develop in the future. In the event there is no active trading market for the Company’s securities, an investor may be unable to liquidate an investment in the shares and, therefore, should be prepared to bear the economic risk of an investment in the shares for an indefinite period and to withstand a total loss of investment. Rule 144 promulgated under the Securities Act requires, among other conditions, a six month holding period prior to the resale of securities acquired in a non-public offering without having to satisfy the registration requirements of the Securities Act. In the event we do not have sufficient financial and human resources in the future, we may not be able to fulfill our reporting requirements under the Exchange Act or disseminate to the public any current financial or other information concerning the Company, as required by Rule 144 as one of the conditions of its availability. In such event we will not be absolved from liability for our failure to file these reports.
 
If our common stock is traded on the OTC Bulletin Board, which is not a national securities exchange, it may be detrimental to investors
 
We were previously approved for a listing of our shares of common stock on the OTC Bulletin Board maintained by FINRA, however have no present intention to have our securities publicly traded. Although there is currently no market for our securities, securities traded on the OTC Bulletin Board, as compared to the national securities exchanges, generally have limited trading volume and exhibit a wide spread between the bid/ask quotations. We cannot predict whether a more active market for our common stock will develop in the future. In the absence of an active trading market: investors may have difficulty buying and selling our common stock or obtaining market quotations; market visibility for our common stock may be limited; and a lack of visibility for our common stock may have a depressive effect on the mark price for our common stock.
 
Preferred Stock as an anti-takeover device
 
We are authorized to issue an aggregate of 5,000,000 shares of preferred stock, $0.10 par value.  As of date of this Prospectus, there were, 3,255.375 shares of Series A Preferred Stock issued and outstanding convertible into approximately 3,831,376 shares of common stock, 2,146 shares of Series B Preferred Stock convertible into approximately 2,525,842 Shares of Common Stock, and 5,000 shares of Series C Preferred stock convertible into 4,000,000 shares of Common Stock.  The Company has also authorized 6,000 shares of Series D Preferred Stock convertible into 3,000,000 shares of Common Stock, 320 of which shares of Series D Preferred Stock were issued and outstanding as of January 12, 2015 convertible into 160,000 shares of Common Stock.  The preferred stock may be issued from time to time with such designation, voting and other rights, preferences and limitations as our Board of Directors may determine by resolution. Unless the nature of a particular transaction and applicable status require such approval, the Board of Directors has the authority to issue these shares without stockholder approval subject to approval of the holders of our preferred stock. The issuance of preferred stock may have the effect of delaying or preventing a change in control of the Company without any further action by our stockholders.
 
Our common stock will be subject to restrictions on sales by broker-dealers and penny stock rules, which may be detrimental to investors.
 
Our common stock will be subject to Rules 15g-1 through 15g-9 under the Exchange Act, which imposes certain sales practice requirements on broker-dealers who sell our common stock to persons other than established customers and “accredited investors” (as defined in Rule 501(a) of the Securities Act). For transactions covered by this rule, a broker-dealer must make a special suitability determination for the purchaser and have received the purchaser’s written consent to the transaction prior to the sale. This rule adversely affects the ability of broker-dealers to sell our common stock and purchasers of our common stock to sell their shares of our common stock.
 
 
23

 
 
Additionally, our common stock will be subject to SEC regulations applicable to “penny stocks.” Penny stocks include any non-exchange listed equity security that has a market price of less than $5.00 per share, subject to certain exceptions. The regulations require that prior to any non-exempt buy/sell transaction in a penny stock, a disclosure schedule proscribed by the SEC relating to the penny stock market must be delivered by a broker-dealer to the purchaser of such penny stock. This disclosure must include the amount of commissions payable to both the broker-dealer and the registered representative and current price quotations for our common stock. The regulations also require that monthly statements be sent to holders of a penny stock that disclose recent price information for the penny stock and information of the limited market for penny stocks. These requirements adversely affect the market liquidity of our common stock.
 
A significant number of our shares are eligible for sale, and their sale could depress the market price of our stock.
 
Sales of a significant number of shares of common stock in the public market pursuant to a current prospectus could harm the market price of our common stock. Pursuant to this registration statement, an aggregate of 23,387,488 shares of common stock are being registered, all of which would be free-trading upon resale after the effective date of this Registration Statement.  As additional shares of our common stock become available for resale in the public market, the supply of our common stock will increase, which could decrease its price. Some or all of the shares of our common stock may be offered from time to time in the open market pursuant to Rule 144, and these sales may have a depressive effect on the market for the shares of our common stock. In general, a non-affiliated person who has held restricted shares for a period of six months, under Rule 144, may sell into the market our common stock all of their shares, subject to the Company being current in its periodic reports filed with the SEC. An affiliate may sell an amount equal to the greater of 1% of the outstanding shares or, if listed on Nasdaq or another national securities exchange, the average weekly number of shares sold in the last four weeks prior to such sale. Such sales may be repeated once every three months, and any of the restricted shares may be sold by a non-affiliate without any restriction after they have been held the year.
 
Investors may experience substantial dilution of their ownership in the future.
 
Pursuant to the Company’s Stock Option Plan, employees, directors and independent contractors may acquire up to an aggregate of 1,171,630 shares (as amended on January 1, 2015) of the Company’s common stock through the exercise of stock options that may be granted in the future of which 855,000 options are issued and outstanding.  The Company’s stockholders will incur dilution upon exercise of such options. In addition, as of January 12, 2015, there were currently outstanding Class A, Class B, Class C and Class D warrants to purchase approximately 3,831,576, 2,525,842, 2,000,000 and 40,000 shares of common stock, respectively, and Series A, Series B, Series C and Series D Convertible Preferred Stock convertible into approximately 3,831,576, 2,525,842, 4,000,000 and 160,000 shares of Common Stock, respectively, plus placement agent warrants to purchase approximately 3,107,203 shares of common stock and vendor warrants to purchase 800,000 shares of Common Stock. The mere existence of these derivative securities may have a depressive effect on any market for our common stock which may develop.
 
In addition, if the Company raises additional funds by issuing additional stock in one or more additional financings, further dilution to stockholders will result, and new investors may have rights superior to existing stockholders.
 
The Company’s officers, directors and principal stockholders may be able significantly to influence matters requiring stockholder approval because they own, and will continue to own, a large percentage of the Company’s outstanding shares, even after this Offering.
 
The Company’s founder, Bruce Meyers, who is the CEO of Meyers Associates, a FINRA member firm, Dr. Lawrence Helson, CEO of the Company, and Dr. Arthur Bollon, Director, beneficially own 5,465,283, 2,310,000 and 800,000 shares, respectively, an aggregate of 8,575,283 shares or approximately 35% of the 24,681,305 outstanding voting securities of the Company. These stockholders will be able to exercise control over substantially all matters requiring approval by the Company’s stockholders, including the election of directors and the approval of significant corporate transactions, which includes their ability to amend the Certificate of Incorporation, approve a merger or consolidation of the Company with another company or approve the sale of substantially all of the assets of the Company without the agreement of minority stockholders. This concentration of ownership may not be in the best interests of all of the Company’s stockholders. See “Principal Stockholders.”
 
 
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Meyers Associates, L.P. and its principals are subject to disciplinary proceedings from FINRA in connection with, among other things, previous offerings of the Company’s securities.
 
Meyers Associates, L.P. (“Meyers”), the Company’s placement agent, as well as Bruce Meyers (“B. Meyers”) and Imtiaz Khan (“Khan”), two of the principals of Meyers (collectively, the “Principals”), are subject to pending disciplinary proceeding from the Financial Industry Regulatory Authority, Inc. (“FINRA”). On October 6, 2014, FINRA filed a complaint (the “Complaint”) alleging, among other things, the violation of certain rules of FINRA and the National Association of Securities Dealers (“NASD”) and federal securities laws in connection with Meyers’ prior offerings of the Company’s securities as well as Meyers’ general operations.  The Complaint has nine (9) separate causes of action, which include the following:
 
 
1.
Unregistered public offerings in contravention of Section 5 of the Securities Act and FINRA Rule 2010, against Meyers and B. Meyers, in connection with the manner that Meyers allegedly solicited prospective investors in the Company’s Series A Offering in violation of the prohibition on general solicitation for private placements;
 
 
2.
Advertising Violations in violation of NASD Conduct Rule 2210 and FINRA Rule 2010, against Meyers and B. Meyers, in connection with the alleged omission of material information in solicitation material and misleading statements to prospective investors;
 
 
3.
Rule 5122 Violation (FINRA Rules 5122 and 2010) against Meyers, in connection with an alleged failure to comply with the rules of a “member private offering” under FINRA Rule 5122 during the Company’s Series B Offering, as Meyers was a control entity because Meyers, B. Meyers, and Khan collectively owned more than 50% of the Company’s outstanding voting securities, including the alleged failure to timely file a private placement memorandum and other solicitation documents with FINRA;
 
 
4.
Inaccurate Books and Records in violation of Section 17(a) of the Securities and Exchange Act of 1934 (the “Exchange Act”) and Rules 17a-3, 17a-4, and 17a-5 thereunder, NASD Conduct Rule 3110, and FINRA Rules 4511 and 2010 against Meyers, B. Meyers, and Khan, for alleged failure of B. Meyers and Khan to identify personal expenses that were paid by Meyers and which were not recorded as compensation;
 
 
5.
Failure to Observe High Standards of Commercial Honor and Just and Equitable Principles of Trade by Falsifying Tax Form W-2 in violation of FINRA Rule 2010 against Meyers, B. Meyers, and Khan, for B. Meyers and Khan allegedly causing Meyers to compensate them, in part, by paying personal expenses which were not properly reported on their Forms W-2;
 
 
6.
Supervision of the Maintenance of Books and Records in violation of NASD Conduct Rule 3010 and FINRA Rule 2010 against Meyers and B. Meyers, for an alleged failure to establish and maintain a system to supervise the activities of employees and representatives in connection with the recording of payments for B. Meyers and Khan’s expenses;
 
 
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7.
Supervisory Review of Electronic Communications in violation of NASD Conduct Rules 3010 and 2110 and FINRA Rule 2010 against Meyers, for alleged failure to properly supervise and review Meyers’ electronic correspondence and Meyers not having adequate written supervisory procedures with respect to electronic communications;
 
 
8.
Failure to Report Customer Complaints in violation of NASD Conduct Rules 3070 and 2110 and FINRA Rule 2010 against Meyers, in connection with Meyers’ alleged failure to report various customer complaints to FINRA;
 
 
9.
Deficient Supervisory Control Procedures in violation of NASD Conduct Rule 3012 and FINRA Rule 2010 against Meyers, in connection with Meyers’ alleged failure to establish, maintain, and enforce reasonable written supervisory control policies and procedures regarding various aspects of the firm’s operations.
 
FINRA is seeking sanctions which may include a suspension and monetary sanctions under FINRA Rule 8310(a), an order that Meyers and the Principals bear the cost of proceedings under FINRA Rule 8330, as well as specific findings that Meyers willfully committed the alleged violations and violated Exchange Act Section 17, and Rule 17a-3, 17a-4, and 17a-5 thereunder. Meyers and the Principals have answered the Complaint which they maintain is without merit and that they will contest the enforcement action vigorously. However, if FINRA ultimately prevails in this action, of if Meyers or the Principals admit or concede any of FINRA’s allegations, it could have a material adverse effect on the Company, as the enforcement action could prevent Meyers from helping the Company raise additional funds from investors.
 
Limitations on ability to pay cash dividends.
 
The Company does not currently expect to pay cash dividends on any of its common stock for the foreseeable future. The ability of the Company to pay dividends on the Company’s common stock will depend upon, among other things, future earnings, if any, the success of the Company’s business activities, capital requirements, the general financial condition of the Company, and general business conditions. There can be no assurance that the Company will ever be in a financial position to declare and pay dividends on the Company’s common stock or that the Board of Directors would otherwise ever declare or pay such a dividend.
 
As of the date hereof, there are no material legal proceedings pending or threatened to be taken against the Company. SignPath has retained legal counsel to evaluate and advise on our intellectual property and patent strategy.
 
Forwarding-Looking Statements
 
Except for historical information, the matters discussed in this document may be considered "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements include declarations regarding the intent, belief or current expectations of SignPath Pharma Inc., and its management and are valid only as of today, and we disclaim any obligation to update this information. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause the Company’s or its industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Important factors to consider and evaluate that could cause actual results to differ materially from those predicted in any such forward-looking statements include: (i) general economic conditions and changes in the external competitive market factors which might impact the Company’s results of operations; (ii) unanticipated working capital or other cash requirements including those created by the failure of the Company to adequately anticipate the costs associated with clinical trials, manufacturing and other critical activities; (iii) suspension or termination of clinical trials by the FDA due to safety risks; (iv) unexpected government or third party payor limits on pricing; (v) product liability recalls after FDA approval and commercialization; (vi) changes in the Company’s business strategy or an inability to execute its strategy due to unanticipated changes in the therapeutic drug industry; (vii) the inability or failure of Dr. Helson, the Company’s sole employee, to devote sufficient time and energy to the Company’s business; and (viii) the failure of the Company to complete any or all of the transactions described herein on the terms currently contemplated. In light of these risks and uncertainties, many of which are described in greater detail under “Risk Factors” below and other reports filed with the Securities and Exchange Commission (“SEC”), there can be no assurance that the forward-looking statements contained in this Prospectus will in fact transpire. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance or achievements. Moreover, neither the Company nor any other person assumes responsibility for the accuracy and completeness of such statements. We do not undertake any duty to update any of the forward-looking statements after the date of this Prospectus to conform such statements to actual results or changes in our expectations.
 
DETERMINATION OF OFFERING PRICE
 
The public offering price was arbitrarily determined based primarily on the Company’s operations since the completion of the Company’s Series C Private Placement.  The price does not bear any relationship to our book value, assets, prospective earnings or any other recognized criteria of value.
 
 
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DILUTION AND OTHER COMPARATIVE PER SHARE DATA
 
The following tables summarize as of September 30, 2014;
 
 
·
the number of shares of common stock outstanding;
     
 
·
the number of shares of Common Stock issuable upon conversion of preferred stock as a percentage of our total outstanding voting securities;
     
 
·
the aggregate consideration for such shares;
     
 
·
the aggregate consideration as a percentage of total consideration; and
     
 
·
the average consideration per share for such shares by Common Stockholders and Preferred Stockholders.
 
   
Shares of
common stock
outstanding
and issuable
   
% of
total shares
   
Aggregate
consideration
   
% of total
consideration
   
Average
consideration
 per share
 
                                         
Common Stockholders
   
14,123,887
     
57.6
%
 
$
2,489,876
     
13.6
%
 
$
0.18
 
Preferred Stockholders
   
10,401,000
     
42.4
     
15,761,376
     
86.4
   
$
1.52
 
Total
   
24,524,887
     
100.0
%
 
$
18,251,252
     
100.0
%
       
 
If you purchase shares offered hereby, your ownership interest will be diluted. “Dilution” is the difference between the public offering price of the common stock and the net tangible book value per share immediately after the Offering. “Net tangible book value” is the amount that results from subtracting our total liabilities and intangible assets from our total assets. As of September 30, 2014, we had a net tangible book value for our 14,123,887 shares of common stock outstanding of $303,138, or approximately $0.02 per share. There will be no change in our net tangible book value as a result of the Offering, as we will not receive any proceeds from the sale of shares offered hereby. However, there will be an immediate dilution of approximately $1.98 per share to public investors, as the difference between the $2.00 per share public offering price and the $0.02 per share net tangible book value.
 
The following table illustrates the dilution described above:
 
Public offering price per share
       
$
2.00
 
               
Net tangible book value per share before offering
 
$
0.02
         
                 
Net tangible book value per share after offering
   
0.02
         
                 
Dilution to public investors
         
$
1.98
 
 
 
27

 
  
PRICE RANGE OF COMMON STOCK, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
 
(a)  Market Information
 
Our common stock is not publicly traded  We were previously approved for trading of our common stock on the Over-The-Counter Bulletin Board (“OTCBB”), which is maintained by the Financial Industry Regulatory Authority, Inc. (“FINRA”), however, do not have a preset intention to commence trading at this point in time.
 
As of January 12, 2015, there were outstanding: 14,163,887 shares of common stock; 3,255.375, 2,146, 5,000, and 320 shares of Series A, Series B, Series C, and Series D Convertible Preferred Stock convertible into approximately 3,831,576, 2,525,842, 4,000,000, and 160,000 shares, respectively, of common stock; Class A, Class B, Class C, and Class D common stock purchase warrants to purchase approximately 3,831,576, 2,525,842, 2,000,000, and 40,000 shares, respectively, of Common Stock, placement agent warrants to purchase approximately 3,107,203 shares of Common Stock, vendor warrants to purchase 800,000 shares of Common Stock, options to purchase an aggregate of 855,000 shares of Common Stock, or an aggregate of approximately 37,840,926 shares of Common Stock.
 
The 14,163,889 shares of common stock which are issued and outstanding and registered on this registration statement, as well as the 10,517,418 shares of common stock issuable upon conversion of preferred stock, 8,397,418 shares of common stock issuable upon exercise of warrants and 3,107,203 shares issuable upon exercise of placement agent warrants will be freely tradable without restriction under the Securities Act unless purchased by our “affiliates,” as that term is defined in Rule 144 under the Securities Act.
 
(b) Holders of Record
 
As of the date of this Prospectus, there were approximately 34 different holders of record of our common stock, 45 different holders of Series A Preferred Stock, 27 different holders of Series B Preferred Stock, 15 different holders of Series C Preferred Stock, and 4 holders of Series D Preferred Stock.
  
(c)  Dividend Policy
 
We have never declared or paid cash dividends on our shares of common stock.  We currently intend to retain future earnings for use in our business and, therefore, do not anticipate paying any cash dividends on our shares of common stock in the foreseeable future.  Any future determination as to the payment of cash dividends on our common stock will be at the discretion of our Board of Directors and will depend on our earnings, operating and financial condition, capital requirements and other factors deemed relevant by our Board of Directors including the General Corporation Law of the State of Delaware, which provides that cash dividends are only payable out of retained earnings or if certain minimum rations of assets to liabilities are satisfied.  The declaration of cash dividends on our common stock also may be restricted by the provisions of credit agreements that we may enter into from time to time.
 
 
28

 
 
(d) Securities Authorized For Issuance Under Equity Compensation Plans
 
Equity Compensation Plan Information
 
The following table provides information regarding the status of our existing equity compensation plans at September 30, 2014.
 
Plan category
 
Number of shares 
of common
stock to be
 issued on 
exercise of
outstanding
 options, warrants
and rights
   
Weighted-average
 exercise
price of
 outstanding
options, warrants
 and
rights
   
Number of 
securities
 remaining
available for
 future issuance
under equity
 compensation plans
(excluding 
securities 
reflected in
the previous
 columns)
 
                         
Equity compensation plans approved by security holders  (1)
   
450,000
   
$
0.85
     
-0-
 
     
380,000
   
$
1.25
     
217,000
 
                         
Equity compensation plans not approved by security holders
   
-0-
     
-0-
     
-0-
 
     
              
     
            
     
              
 
Total
   
830,000
   
$
2.03
     
217,000
 
 
 (1)  Consists of our 2009 Employee Stock Incentive Plan, which authorized as of January 1, 2015, an aggregate of 1,171,630 options and/or shares of common stock.
 
CAPITALIZATION
 
The following table sets forth the Company’s capitalization as of September 30, 2014(1):
 
   
Actual
 
         
Cash
 
$
1,177,769
 
         
Stockholders’ equity:
       
         
Preferred Stock, $0.10 par value, 5,000,000 shares authorized; 10,401 shares issued and outstanding
   
1,041
 
         
Common Stock, $0.001 par value, 50,000,000 shares authorized; 14,123,887 shares issued and outstanding(2)
   
14,125
 
         
Additional Paid-In Capital
 
$
12,282,878
 
         
Accumulated deficit
 
$
(12,808,087
)
         
Total stockholders’ equity
 
$
303,138
 
____________________
 
(1)     The capitalization table is based on the Company’s historical financial information as of the period ended September 30, 2014.  This table was not prepared and has not been reviewed or compiled by certified public accountants nor by an independent accounting firm. The financial information contained in this table was prepared by the Company’s management.
 
(2)      Does not include: 1,171,630 shares of Common Stock reserved for issuance under the Company’s 2009 Employee Stock Incentive Plan of which 855,000 options have been granted; 10,517,418 shares of Common Stock reserved for issuance upon conversion of shares of Convertible Preferred Stock; 8,397,418 shares of Common Stock reserved for issuance upon exercise of outstanding warrants; 368,894 shares reserved for issuance pursuant to the issuance of liquidated damage shares (at $.85 per share) 3,107,203 shares reserved for issuance upon exercise of placement agent’s warrants; and 800,000 shares reserved for issuance upon exercise of Vendor Warrants.
 
29

 

USE OF PROCEEDS
 
We will not receive proceeds from the sale of shares offered hereby by the Selling Stockholders, except upon the exercise of all Class A warrants offered hereby for $3,866,034, Class B warrants for $2,887,037, Class C Warrants for $3,375,000, and Placement Agent Warrants for $3,047,183 (net of a 10% warrant exercise fee for the Class A, Class B, and Class B Warrants).  Any warrant proceeds will be used by the Company for working capital purposes.
 
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
The following discussion should be read in conjunction with the financial statements and notes thereto included in this prospectus. Except for the historical information contained herein, the discussion in this prospectus contains certain forward-looking statements that involve risk and uncertainties, such as statements of the Company’s plans, objectives, expectations and intentions as of the date of this filing. The cautionary statements made in this document should be read as being applicable to all related forward-looking statements wherever they appear in this document. The Company’s actual results could differ materially from those discussed here. Factors that could cause differences include those discussed in the “Risk Factors” section as well as discussed elsewhere herein.
 
Liquidity and Capital Resources
 
Liquidity and Capital Resources at September 30, 2014, as Compared with December 31, 2013
 
As of September 30, 2014 and December 31, 2013, the Company had $1,177,769 and $1,241,397, respectively, of cash on hand. The Company’s had positive working capital of $303,138 at September 30, 2014 compared to $819,765 as of December 31, 2013, resulting from increases in accounts payables as a result of net cash used in operations of ($1,436,164). The Company had an accumulated deficit of $12,808,087 as of September 30, 2014.
 
During the nine months ended September 30, 2014, SignPath sold 1620.5 Units consisting of its securities at a price of $1,000 per Unit.  The Units sold in 2014 consisted of Series C Convertible Preferred Stock Units.  Each Unit consists of (i) one share of 6.5% Series C Convertible Preferred Stock convertible into 800 shares of common stock (equivalent to $1.25 per share of common stock) following the effective date of its Registration Statement (the “Effective Date”) subject to adjustment, and (ii) Warrants to purchase 400 shares of common stock at $1.875 per share for a five-year period following the Effective Date of a registration statement including the underlying securities.  The Company received gross proceeds of $1,620,000 and incurred stock offering costs of $247,465 related to such offerings during the nine months ended September 30, 2014.
 
The Company has no agreements, arrangements or understandings with any officer, director or shareholder as to any future financing, either equity or debt.  The Company expects to continue to incur losses for the foreseeable future and it is possible the Company may never reach profitability.  Therefore, the Company will require additional capital resources and financing to implement its business plan and continue its operations.  The Company’s current burn rate for salaries, research programs and professional fees averages about $60,000 per month.  Thus, it is expected that the Company currently has sufficient cash on hand to operate through the next 12 months.  Management believes it has enough funds to complete its pre-clinical trials.  Management believes that it has enough funds to complete its pre-clinical trials.  If the Company receives favorable results, Management believes it will have the ability to raise additional funds to complete INDs.  In view of general economic conditions, there can be no assurance that any additional financing will be available to us, that any affiliate will provide additional investments in the Company or that adequate funds for our operations will otherwise be available when needed or on terms acceptable to us.
 
Cash used in operating activities for the nine months ended September 30, 2014 was ($1,436,164) compared to cash used of ($1,372,905) during the nine months ended September 30, 2013.  This resulted from a net loss of $2,139,679 during the nine months ended September 30, 2014, offset by common stock and options issued for services of $237,384, warrants modification valued at $13,132, and an increase in accounts payable and accrued expenses of $452,999.  This compared to a loss of $1,671,998 during the nine months ended September 30, 2013, offset by common stock and options issued for services of $684,025, and a decrease in accounts payable and accrued expenses of $(389,002).
 
The Company had net cash provided by financing activities of $1,372,536 during the nine months ended September 30, 2014 as a result of the $1,620,000 received in a Private Placement, reduced by $247,464 of offering costs.  During the nine months ended September 30, 2013, the Company had $2,683,774 of net cash provided by financing activities as a result of the $3,194,250 received from a Private Placement of Preferred Stock less the stock offering costs of $510,476.
 
As a result of the foregoing, the Company’s cash decreased by $63,628 during the nine months ended September 30, 2014.
 
 
30

 
 
The Company had net cash provided by financing activities of $1,372,536 during the six months ended June 30, 2014 as a result of the $1,620,000 received in a Private Placement, reduced by $247,464 of offering costs.  During the six months ended June 30, 2013, the Company had $2,125,849 of net cash provided by financing activities as a result of the $2,530,000 received from a Private Placement of Preferred Stock less the stock offering costs of $404,151.
 
As a result of the foregoing, the Company’s cash increased by $399,176 during the six months ended June 30, 2014 from December 31, 2013.
 
The financial statements included in this Prospectus have been prepared in conformity with generally accepted accounting principles that contemplate our continuance as a going concern.  The Company has had no revenues and has generated losses from operation.  As set forth in Note 2 to the audited Financial Statements, the continuation of the Company as a going concern is dependent upon the Company obtaining adequate capital to fund operating losses until it becomes profitable, if ever.  The financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
 
At December 31, 2013, as Compared with December 31, 2012
 
As of December 31, 2013 and December 31, 2012, the Company had $1,241,397 and $31,922, respectively, of cash on hand.  The Company’s had positive working capital of $819,765 at December 31, 2013 compared to a deficit of ($6,549,815) as of December 31, 2012, resulting from decreases in accounts payables resulting from net cash used in operations of ($1,620,199) and the removal of the derivative liability.  SignPath had a deficit accumulated during the development stage of $10,668,408 as of December 31, 2013.
 
During the 12 months ended December 31, 2013 (“Fiscal 2013”), SignPath sold 3,380 Units consisting of its securities at a price of $1,000 per Unit.  The Units sold in 2013 consisted of Series C Convertible Preferred Stock Units.  Each Unit consists of (i) one share of 6.5% Series C   Convertible Preferred Stock convertible into 800 shares of common stock (equivalent to $1.25 per share of common stock) following the effective date of a Registration Statement (the “Effective Date”) subject to adjustment, and (ii) Warrants to purchase 400 shares of common stock at $1.875 per share for a seven (7)-year period following the Effective Date of a registration statement including the underlying securities.  The Company received gross proceeds of $3,380,000 and incurred stock offering costs of $550,326 related to such offerings during Fiscal 2013.
 
Cash used in operating activities during Fiscal 2013 was ($1,620,199) compared to cash used of ($883,328) during Fiscal 2012.  This resulted from a net loss of $1,956,872 in Fiscal 2013, offset by Common Stock and options issued for services of $701,449, a change in derivative liabilities of $3,926, and a decrease in accounts payable and accrued expenses of $368,846.  This compared to a loss of $1,310,934 during Fiscal 2012, offset by common Stock and options issued for services of $23,147, a change in derivative liabilities of $8,154, and an increase in accounts payable and accrued expenses of $395,040.
 
The Series B Preferred Stock sold in 2012 is substantially the same as the Series C Preferred Stock with regard to dividends  however is convertible into common shares at $0.85 per share. Both the Series C and B Preferred Stock are junior to the Series A Preferred Stock on liquidation and do not have anti-dilution price protection, nor do the Class C and B Warrants issued as part of the Units have anti-dilution price protection.
 
The Company had net cash provided by financing activities of $2,829,674 in Fiscal 2013 as a result of the $3,380,000 received in the 2013 Private Placement described above, reduced by $550,326 of offering costs.  During Fiscal 2012, the Company had $894,826 of net cash provided by financing activities as a result of the $1,116,001 received from the 2012 Private Placement of Preferred Stock less the stock offering costs of $221,175.
 
As a result of the foregoing, the Company’s cash increased by $1,209,475 during Fiscal 2013 from $31,922 to $1,241,397.
 
Results of Operations
 
Material Changes in Results of Operations
 
For the nine months ended September 30, 2014, as compared with the nine months ended September 30, 2013
 
The Company does not expect to receive any revenues prior to 2015. Total operating expenses for the nine months ended increased to $2,136,244 for the nine months ended September 30, 2014 as compared with $1,668,545 for the nine months ended September 30, 2013, primarily as a result of research and development increased to $1,546,500 in the 2014 period from $618,739 in the 2013 period, offset by $320,176 of professional fees decreasing from $777,947 for the nine months ended September 30, 2013, related to the continued manufacture and preclinical development of its lead curcumin formulations. Salaries and wages decreased to $209,527 in the 2014 period from $248,426 in 2013.
 
 
31

 
 
Research and Development fees for the nine months ended September 30, 2014, included payments to Dalton Pharma, Gemeinn, Northern Lipids, Inc., ClinicPace Worldwide, Polymun for, $60,537, $4,149, $187,111, $122,165, and $968,444, respectively, for lab fees and other costs related to the Company’s research and development efforts.  The Company incurred $204,094, in legal fees classified as research and development.
 
Research and Development fees paid in the 2013 Period included $54,032 to the University of Texas, MD Anderson Cancer Center (“UTMDACC”) for non-clinical and mouse pre-clinical non-GLP studies of lipsomal curcumin. Other research and development payments included $244,788 and $43,650 to Polymnun and Nucro Technology, respectively, for lab fees and other costs related to the Company’s research and development efforts as well as $94,542 in legal fees classified as Research and Development.
 
As a result of the foregoing, the Company had a net loss of 2,139,679, for the nine months ended September 30, 2014 as compared to a net loss of $1,671,998 for the nine months ended September 30, 2013.  The Company recorded a deemed dividend, in the amount of $630,126. The amount of loss attributable to common shareholders for the nine months ended September 30, 2014 is 2,139,679.  This translates to a loss per share of ($0.17) for the nine months ended September 30, 2014, as compared to ($0.13) for the nine months ended September 30, 2013.
 
Three months ended September 30, 2014, as compared with three months ended September 30, 2013
 
The Company does not expect to receive any revenues prior to 2015. Total operating expenses during the three months ended September 30, 2014 (the “2014 Period”) increased to $978,958, as compared with $489,613 during the three months ended September 30, 2013 (the “2013 Period”) primarily as a result of an increase in professional fees of $5,722 and general and administrative expenses of $45,582 as a result of resources. Salaries and wages decreased to $45,207 in the 2014 period from $84,847 in the 2013 period.  Research and development increased to $799,965 in the 2014 period from $312,671 in the 2013 period.
 
Research and Development fees for the three months ended September 30, 2014, included payments to Dalton Pharma, Gemeinn, Northern Lipids, Inc., ClinicPace Worldwide, Polymun for, $16,871, $0, $73,019, $42,330, and $619,046, respectively, for lab fees and other costs related to the Company’s research and development efforts.  The Company incurred $48,729, in legal fees classified as research and development.
 
Research and Development fees paid in the 2013 Period included $0 to the University of Texas, MD Anderson Cancer Center (“UTMDACC”) for non-clinical and mouse pre-clinical non-GLP studies of lipsomal curcumin. Other research and development payments included $176,169 and $0 to Polymnun and Nucro Technology, respectively, for lab fees and other costs related to the Company’s research and development efforts as well as $52,366 in legal fees classified as Research and Development.
 
As a result of the foregoing, the Company had a net loss of $982,790, for the three months ended September 30, 2014 as compared to a net loss of $489,305 for the three months ended September 30, 2013.  The Company recorded a deemed dividend, in the amount of $0. The amount of loss attributable to common shareholders for the three months ended September 30, 2014 is $984,326.  This translates to a loss per share of ($0.08) for the three months ended September 30, 2014, as compared to ($0.04) for the three months ended September 30, 2013.
 
Year ended December 31, 2013, as compared with year ended December 31, 2012
 
The Company does not expect to receive any revenues prior to 2015.  Total operating expenses during Fiscal 2013 increased to $1,953,731 as compared with $1,312,405 during Fiscal 2012 primarily as a result of $841,502 of research and development expenses decreasing from $939,296 in Fiscal 2012 related to the continued manufacture and preclinical development of its lead curcumin formulations.  General and administrative expenses increased to $53,957 in the 2013 period from $45,596 in Fiscal 2012, primarily as a result of an increase in travel and other office related expenses.  Professional fees increased to $808,865 in the 2013 period from $121,586 in Fiscal 2012, primarily as a result of an increase primarily due to an increase in amortization of stock options as compared to 2012.
 
Research and Development fees in Fiscal 2013 included $59,739 paid to University of Texas, MD Anderson Cancer Center (“UTMDACC”) for non-clinical and mouse pre-clinical non-GLP studies of liposomal curcumin.  Other major research and development expenses included payments to Polymnun, Nucro Technology, University of North Texas, Dr. Robert Heinz, Johns Hopkins University, Medizinche University and Regis Pharmaceuticals for, $260,087, $149,036, $94,289, $40,000, $198,336, and $40,015, respectively, for lab fees and other costs related to the Company’s research and development efforts.
 
 
32

 
 
Research and Development fees in Fiscal 2012 included $34,739 paid to University of Texas, MD Anderson Cancer Center (“UTMDACC”) for non-clinical and mouse pre-clinical non-GLP studies of liposomal curcumin.  Other major research and development expenses included payments to Polymnun, Nucro Technology, University of North Texas, Dr. Robert Heinz, Johns Hopkins University, Medizinche University and Regis Pharmaceuticals for, $271,773, $174,297, $115,781, $61,273, $40,866, and $240,567, respectively, for lab fees and other costs related to the Company’s research and development efforts.
  
The amount paid for research and development in the 2013 Period consisted of payments for overhead and patent fees for non-clinical studies and pre-clinical studies in the nanocurcumin compound and to produce polymer under the JHU Agreement for animal studies of nanocurcumin.  During Fiscal 2011, the Company paid UTMDACC for non-clinical and mouse pre-clinical pre-GLP studies of liposomal curcumin.  It also includes expenses relating to development of depotcurcumin, a slow release formulation. Curcumin-ER was originally made at UNT under non-GLP conditions from curcumin extract (and PLGA, a chemical surrounding the curcumin) originally purchased from a U.S. chemical supplier, Sigma Aldrich Fine Chemicals (“SAFC”).
 
As a result of the foregoing, the Company had a net loss of $1,956,872 in Fiscal 2013 as compared to a net loss of $1,310,934 in Fiscal 2012.  The Company recorded a deemed dividend, due to the extension of several warrant, in the amount of $2,445,621. The amount of loss attributable to common shareholders for the calendar year 2013 is $4,402,493.  This translates to a loss per share of ($0.34) in Fiscal 2013 compared to ($0.10) in Fiscal 2012.
 
Critical Accounting Policies
 
We have identified the policies outlined below as critical to our business operations and an understanding of our results of operations. The list is not intended to be a comprehensive list of all of our accounting policies. In many cases, the accounting treatment of a particular transaction is specifically dictated by accounting principles generally accepted in the United States, with no need for management’s judgment in their application. The impact and any associated risks related to these policies on our business operations is discussed throughout Management’s Discussion and Analysis of Financial Condition and Results of Operations where such policies affect our reported and expected financial results. Note that our preparation of the financial statements requires us to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities at the date of our financial statements, and the reported amounts of revenue and expenses during the reporting period. There can be no assurance that actual results will not differ from those estimates.
 
Basis of Presentation
 
These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in U.S. dollars. The Company’s fiscal year-end is December 31.
 
Revenue Recognition
 
As of the date of this disclosure, the Company has yet to recognize revenues. As the Company continues to develop and implement its business plan, revenue from the performance of services or sale of products will be recognized in accordance with FASB codification standards. Revenue will be recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is provided, and collectability is assured.
 
Basic and Diluted Net Income (Loss) Per Share
 
The Company computes net income (loss) per share in accordance with FASB codification standards. The standard requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if converted method. In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive.
 
Income Taxes
 
Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has adopted FASB codification regarding the required tax asset benefit computations for net operating losses carry forward. The potential benefits of net operating losses have not been recognized in these consolidated financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years.
 
 
33

 
 
Stock-Based Compensation
 
The Company records stock-based compensation in accordance with FASB codification standards, using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued.
 
Use of Estimates
 
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
 
Derivative Financial Instruments
 
The Company generally does not use derivative financial instruments to hedge exposures to cash-flow risks or market-risks that may affect the fair values of its financial instruments. The Company utilizes various types of financing to fund our business needs, including preferred stock with warrants attached and other instruments not indexed to our stock. The Company is required to record its derivative instruments at their fair value. Changes in the fair value of derivatives are recognized in earnings in accordance with ASC 815.
 
Fair Value of Financial Instruments 
 
In accordance with ASC 820, the carrying value of cash and cash equivalents, accounts receivable and accounts payable approximates fair value due to the short-term maturity of these instruments. ASC 820 clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:
 
Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.
 
Level 2-Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data. 
 
 Level 3-Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information.
 
The carrying amounts reported in the balance sheets for cash, accounts payable and accrued expenses approximate their fair market value based on the short-term maturity of these instruments. The following table presents assets and liabilities that are measured and recognized at fair value as of September 30, 2014, on a recurring basis:
 
Description
 
Level 1
   
Level 2
   
Level 3
   
Gains (Losses)
 
                                 
Derivative Liability
  $
-
    $
-
 
 
$
-
    $
-
 
Total
  $
-
    $
-
 
 
$
-
    $
-
 
 
The following table presents assets and liabilities that are measured and recognized at fair value as of September 30, 2013, on a recurring basis:
 
Description
 
Level 1
   
Level 2
   
Level 3
   
Gains (Losses)
 
                                 
Derivative Liability
  $
-
    $
-
 
 
$
-
    $
-
 
Total
  $
-
    $
-
 
 
$
-
    $
-
 
 
 
34

 
 
A financial instrument's categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The following is a description of the valuation methodology used to measure fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy.
 
Derivative Liability: Market prices are not available for the Company's warrants nor are market prices of similar warrants available. The Company assessed that the fair value of this liability approximates its carrying value since carrying value has been adjusted to fair value.
 
The method described above may produce a current fair value calculation that may not be indicative of net realizable value or reflective of future fair values. If a readily determined market value became available or if actual performance were to vary appreciably from assumptions used, assumptions may need to be adjusted, which could result in material differences from the recorded carrying amounts. The Company believes its method of determining fair value is appropriate and consistent with other market participants. However, the use of different methodologies or different assumptions to value certain financial instruments could result in a different estimate of fair value.
 
Plan of Operations
 
Manufacturing of GMP grade synthesized curcumin is continuing at Sami labs, in India. Over 4.3 kilograms of the active principle was sent to Dalton Pharma Services in Canada for analytical and continuing stability testing. Aliquots of curcumin are sent to Polymun Scientific in Austria to manufacture the formulated GMP grade liposomal curcumin product. The product is further analyzed for endotoxins in Gibraltar Labs in New Jersey, and for release kinetics at Northern Lipids in Canada. The final product has been used in 45 human normal subjects in a Phase Ia ascending dose trial in Austria. Based upon these data, a Phase Ib clinical trial is ongoing in Austria: accruing as of this date 12 cancer patients who progressed on standard of care therapy.
 
In the US, following discussions and suggestions by the FDA, an IND for liposomal curcumin in a Phase Ib trial was approved in the second quarter 2014. The first indication will be for non-small cell lung cancer (NSCLC) patients who have progressed on standard of care therapy.
 
Following allowance of the protocol by the FDA, a second liposomal curcumin indication, for progressive Parkinson’s disease will be submitted to the FDA for a Phase II trial at Thomas Jefferson University.
 
A veterinary application of liposomal curcumin in dogs with progressive cancer was initiated during the 1st Quarter of 2014 at U.C. Davis and is continuing six dogs are under study.
 
Preclinical Non-GLP formulated product underwent repeat efficacy trials in mice with xeno-transplanted human NSCLC tumors with a 52% reduction in growth of tumor observed after six weeks.Non-clinical scale-up manufacturing of GMP grade Liposomal-PLGA-curcumin (Curcumin-ER): and extended release formulation at Sami Labs in India and research is planned for the 2nd Q 2015.

The liposome composed of DMPC and DMPG was initially discovered to prevent curcumin induced cardiac arrhythmias in  in vitro , in ex vivo studies in rabbit models, and in vivo in rabbit models challenged with clinically approved QTc prolonging anticancer drugs, Crizotinib and Nilotinib. Additional studies of anticancer QTc prolonging drugs and liposome mitigation are current in the 4th quarter, 2014. Additional exploration of the molecular mechanism of action of the liposome, its component lipids, and metabolites in the cardiac potassium channel is planned for the 4th quarter 2014 in a collaborative study with Avanti Polar Inc., IPS Therapeutique, Canada. The optimum compound of oral formulations with a eutectic mixture and DMPC,DMPG, LysoPC ,LysoPG and EGPG are being studied at IPS therapeutic to decide upon a lead compound to take into the clinic. Animal toxicology  at Nucro Technics Inc. in 1st Q 2015 will follow.
 
The effects of liposomal curcumin on mercury poisoning in mice are being explored  at Thomas Jefferson University, Philadelphia in the 4th Quarter of 2014.
 
 
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BUSINESS
Business
 
SignPath is a clinical stage biotechnology company founded in May 2006 to develop synthesized proprietary formulations of curcumin, a naturally occurring compound found in the root of the Curcuma longa Linn (turmeric) plant, for applications in human diseases. The Company is a publicly held non-traded Delaware corporation.
 
Curcumin has an extensive history as an oral medicinal product with safe human use, but its potential therapeutic benefits have been limited by its low absorption (the amount of active drug reaching lesioned tissue) when taken orally, as well as its inactivation in the liver (due to hepatic glucuronidation or sulfation) and “hydro-phobic” nature whereby it is not soluble in water or blood. SignPath has developed and received approval in June 2014 from the U.S. Food and Drug Administration (the “FDA”) of its Investigational New Drug (“IND”) application, and in Europe for an Investigated Medical Product Dossier (“IMPD”) for parenterally (taken into the body in a manner other than the digestive tract) administered curcumin, allowing curcumin to be administered intravenously and delivered to diseased sites with minimal inactivation. We believe that the liposomes, liposomal curcumin, and liposomal-PLGA-curcumin formulations we have licensed based on management’s experience and the opinions of our consultants may be useful in the treatment of cancer, diabetes and neurologic disorders. The Company is developing two different intravenous/subcutaneous nano-particle sized formulations and a specific liposome application. Proof of efficacy of these compounds against human tumor xenografts in mice and prevention of cardiac arrhythmias was patent submitted and published. During IND mandated pre-clinical toxicity trials in dogs with liposomal curcumin, a dose-dependent hemolysis was observed, allowing us to identify a safe dose level, hence, allowing specific dose/schedules of administration for clinical trials in dogs and humans.
 
SignPath has licensed three proprietary intravenous formulations containing curcumin as the active therapeutic agent. The first is a liposomal version licensed from University of Texas MD Anderson Cancer Center (“UTMDACC”) which is currently in Phase Ib clinical trials in Salzburg, Austria; the second is a nanosized version licensed from the Johns Hopkins University (“JHU”); and the third is an extended release Liposomal-PLGA formulation (curcumin-ER) licensed from the University of North Texas Health Science Center. The Company’s near term (next 12 months) goals are to complete preclinical development of curcumin-ER, to file a second IND and to begin Phase I trials for safety and dosage studies in patients with cancer under its initial IND approved in June 2014. The complete dossier for liposomal curcumin, our first formulation was submitted to the European Medicines Agency (the “EMA”) on June 8, 2011 for Phase Ia clinical trials and was completed in October 2012. The Company believes its licensed synthetic chemical formulations of curcumin will replace the naturally occurring extract mixture of curcuminoids, and its discovery of the anti-arrhythmia effects of its liposomes will render them potentially patentable; patents for liposomal curcumin and nanocurcumin have already been issued. The Company plans to develop these new products which potentially will give SignPath proprietary curcumin preparations with applications in the treatment for a broad spectrum of neoplastic, neurologic, and metabolic indications.
 
The Company has assembled leaders experienced in pharmacologic development of natural products to advise it on the development of its curcumin formulations. This Scientific Advisory Board is comprised of individuals with specific experience with natural products, formulation development, neoplastic, metabolic and neurologic disorders. Expertise in analytical chemistry will come from commercially based product chemists. Drug development will be overseen by Lawrence Helson MD, Chief Executive Officer, an oncologist with 25 years of pharmaceutical development experience; Anirban Maitra, PhD, MPPH, of UTMDACC, who has expertise in nanotechnology, development of nano, and liposomal curcumin testing for antitumor effects; Judith A. Smith, PhD, director of the UTMDACC preclinical development group for the liposomal formulation and Jamboor Vishwanatha of University of North Texas Health Science Center who has experience with extended release formulations.
 
The Company’s Scientific Advisory Board members all bring relevant experience to the Company. Professor Tauseef Ahmad, MD is an experienced principal investigator for lymphoma, myeloma and solid tumor studies. Dr. Peter P. Sordillo, who joined our Scientific Advisory Board in 2013, is on the Staff of Medical Oncology and Hematology at Lenox Hill Hospital, New York as an experienced Oncologist. See “Management” below for more information about our management team and Scientific Advisory Board members.
 
Clinical application strategies will be based upon the advice of the individuals serving on the Scientific Advisory Board, all of whom have academic and practical experience in biopharmaceutical development. As described below, we expect that our Phase I and II clinical trials will be run by contract clinical research organizations in Europe and the United states.
 
 
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During the fiscal years ended December 31, 2012 and 2013, and the nine month period ended September 30, 2014, the Company expended $939,296, $841,502, and $1,546,500, respectively, for net research and development. None of these expenses were borne by customers as the final products are not commercially available. They consisted primarily of payments made to commercial and academic institutions.
 
Target Markets
 
The anticipated markets for therapeutic curcumin are diseases for which current therapeutic alternatives are not satisfactory or unavailable. There are several malignant diseases which are classified as orphan indications, defined by the U.S. Food and Drug Administration (the "FDA") as conditions with less than 200,000 patients in the United States. Some of these conditions exhibit dependency upon NF-kB (NF-kappaB, a family of intracellular proteins), a signaling pathway component inhibited by curcumin. 1   Two such indications are lung and pancreatic cancers. The Company currently plans to pursue the development and testing of therapies with parenterally-administered curcumin to address non-small cell lung and other cancers, in which current treatment is only marginally effective or could be greatly improved. Additional indications are Parkinson’s disease and drug-induced cardiac arrhythmias.
 
Preclinical and animal studies conducted by other scientists of curcumin-based treatments in cancer therapy suggest it may have an application as a parenteral drug for both prophylaxis and therapy. 2  While these preclinical data show potentially beneficial activity and exhibit multiple mechanisms of action, the parenteral route has not yet been tried in controlled human clinical trials. Current trials with oral curcumin by academic research groups at various stages of pre-clinical and clinical development have limited efficacy. The Company’s goals differ in that it intends to establish the safety and efficacy of parenteral curcumin in patients.
 
While our focus is on lung cancer, subsequent studies may consider pancreatic cancer an unmet clinical need and the fifth leading cause of cancer deaths, accounting for an estimated 45,600 deaths annually in the United States, according to published reports found in Burro, H.A. et al. This cancer is largely resistant to the current approved drug, gemcitabine, and results in an objective tumor response in less than 10% of patients resulting in a minor impact on survival .3   Most patients with this diagnosis could be candidates for trials in combination with gemcitabine, or trials of curcumin alone as a second line therapy.
 
The annual incidence of lung cancer is approximately over 200,000 cases in the United States and about 170,000 deaths. Lung cancer researchers have shown an increased expression of curcumin-sensitive signaling pathways, which the Company believes may make it susceptible to therapy with our product candidate. Based upon pre-clinical studies conducted by SignPath scientists with our active principle and other scientists with curcumin extracts, we believe the potential patient population could include the majority of these patients following failure of standard treatment, or as testing advances, in combination therapy or as a first line single-agent.
 
Other potential susceptible tumor types are lung cancer, primary and metastatic brain tumors and lymphoma in adults. The market for glioblastoma multiforme and other malignant gliomas has an incidence of about 17,000 per year, or 59 per million of the population, according to the scientific literature. 4   Although this represents just 2% of cancer deaths in the United States, survival rates are low and cost of treatment is high. Following standard therapy, the median survival of glioblastoma patients is 9 to 11 months with less than 5% of patients alive after 5 years. In addition, metastases to the brain from other sites affect an estimated 75,000 patients per year and have very poor survival rates, making primary and metastatic brain tumors a clear unmet need. The annual incidence of lymphoma is approximately 66,000 cases in the United States. Multiple myeloma is responsible for 10% to 20% of the lymphoma malignancies, with skeletal involvement in about 80% of the patients 5 .  Lymphoma researchers have shown an increased expression of the curcumin-sensitive signaling pathway, which the Company believes may make it susceptible to therapy with our product candidates. Lung cancer affects 175,000 persons in the United States. In our drug distribution trials in dogs we observed large amounts of liposomal curcumin collected in the lung tissues following both 2 hour and 8 hour infusions, suggesting that lung disorders would be appropriate clinical targets. Lung cancer affects 175,000 persons in the United States. In our drug distribution trials in dogs we observed large amounts of liposomal curcumin collected in the lung tissues following both 2 hour and 8 hour infusions, suggesting that lung disorders would be appropriate clinical targets. Based upon pre-clinical studies conducted by other scientists with curcumin extracts, we believe the potential patient population could include the majority of these patients following failure of standard treatment, or as testing advances, in combination therapy or as a first line single-agent.
____________________
 
1 Ahn KS, Aggarwal BB., 2005 Transcription factor NF-(kappa)B; A sensor for smoke and stress Signals. Ann N.Y. Acad Sci 1056:218-233.
2 Aggarwal B.B., Kumar A, Bharti C 2003. Anticancer potential of curcumin. Pre-clinical and clinical studies. Anticancer Research 23:363-398.
3 See footnote 1 above.
4 See footnote 2 above.
5 Burris H.A. et al. 1997 Improvements in survival and clinical benefit with gemcitabine as first line therapy for patients with advanced pancreatic cancer: a randomized trial. J Clinical Oncology 15:2403-2413.
 
 
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The Company believes that its parenteral formulations of curcumin can be compared with standard of care when used in combination with front line standard chemotherapy in a number of diseases. Given the aging of the population with annual incremental growth in the number of prospective patients in chronic and acute disease categories, the Company believes a minimally toxic agent like curcumin could gain wide acceptance and usage.
 
SWOT Analysis
 
 
Strength:
 
Currently, six liposomal chemotherapeutics have received clinical approval and others are in clinical trials or undergoing preclinical evaluation. Liposomes exhibit low toxicity and improve the biopharmaceutical features and therapeutic index of drugs, thereby increasing efficacy and reducing side effects. Liposomal incorporation offers advantages for the delivery of chemotherapeutics which are metabolically unstable or poorly water-soluble. SignPath is a unique company developing parenteral curcumin administration methods because the oral route of administration of this compound lacks sufficient bioavailability for systemic disease therapy. The Phase Ib liposomal curcumin formulation was initiated a cancer patient in Salzburg, Austria in October 2013. Based upon initial observations we altered the infusion delivery method and shortened the infusion duration from 24 to 8 hours, the same procedure we plan to use in clinical trials in the United States. SignPath has a strong relationship with curcumin manufacture, analytics, regulatory and CRO groups in Canada, Europe, and in the United States.
       
     
There are 37 publications (See “Business” below) regarding our products, seven patents pending and four issued. The formulations may be applicable for diseases affecting large numbers of people. GMP synthesis renders the curcumin API 99.2% pure.
       
 
Weakness:
 
Contraindicated in patients with a pre-existing bleeding diathesis. When solubilized in alkaline media, and at high ambient light conditions it is instable. Intravenous administration can be safely done using gravity drip, or controlled syringe  infusions  rather than electronic impellent pumps which cause the product to precipitate in the infusion line.
       
 
Opportunity:
 
Curcumin can be applicable to unmet clinical indications including cancer, and neurologic disorders.  It can also be used in auto-immune, inflammatory diseases, mycoses, and parasitic diseases alone or in combination with other treatment modalities such as cytotoxics, and ionizing radiation.
       
 
 Threat:
 
None from established pharmaceutical companies worldwide.
 
Marketing Strategies
 
Curcumin has potential utility in over 5,000,000 patients in multiple clinical disorders assuming penetration in all potential markets. Our initial plan is to determine its efficacy in lung cancer, and Parkinson’s disease (over 1,200,000 patients). Used alone or in combination with other drugs or radiation treatments, we anticipate 10-50% of market share depending upon the indications chosen and responses in Phase II and Phase III clinical trials.
 
Curcumin is not a branded name because of extensive use as a spice for over 3,000 years. As data is developed we anticipate presenting this information at large international and disease specialty meetings, e.g., ASCO, and EMSO. Pricing and sales are too early to identify at this stage of development.
 
Product Overview
 
Background on Curcumin
 
Curcumin has been used primarily in its natural state in turmeric as an ingredient in foods for hundreds of years in India and the Asian subcontinent where it grows naturally. It also has a history of use as a medicinal extract .6
 
The history of curcumin includes oral human use for a variety of benign and malignant diseases. A body of published research explaining curcumin’s mechanisms of action at the cellular level supports its potential application in humans .7 8   In addition, there have been parenteral curcumin toxicology studies in mice and rats published by other researchers which support a finding of curcumin’s safety after oral application.
 
________________
6 See footnote 2 above.
7 Reddy RC, Vatsala PG, Keshamouni VG et al, 2005. Curcumin for Malaria Therapy Biochemical and Biophysical Research Communications 326:472-474; see footnotes 1 and 2 above.
8 Li,L., Brairteh, F. Kurzrock,R 2005. Liposome Encapsulated Curcumin. In Vitro Effects on proliferation, apoptosis, signaling and angiogenesis. Cancer, 104:1322-1331.
 
 
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The problem that has limited the therapeutic potential of curcumin is that orally delivered curcumin has limited bioavailability. This is because, curcumin is inactivated as it passes through the intestinal wall. Lymphoma researchers have attributed its low efficacy to low levels of active drug reaching the bloodstream. Yet, uncontrolled clinical trials conducted by third parties have indicated that oral curcumin may have preventative clinical activity in several diseases, when taken over long periods of time, but not in established systemic diseases.
 
To address this problem, SignPath has developed parenteral formulations (administration that bypasses the gastrointestinal system) in the form of a liposomal version, a nanosized version, and a delayed release version. Predicated upon the dosage schedules, needs, and population demographics of different disease entities, the Company believes these curcumin-based treatments will be applicable for a broad spectrum of systemic diseases, i.e., proliferative malignant diseases and neurologic disorders. In addition, curcumin is believed to work as a chemopreventive agent in cancers of the bladder, colon, stomach, and skin based upon its established antioxidant and anti-inflammatory properties. 9
 
Brief Technology Background: Signal Transduction and Cellular Pathways Cells carry out many of their functions by responding to signals transmitted from the external environment. The surface of a cell has receptor proteins that span or cross the cell surface and bind to their targets with high specificity. When an external molecule binds to a surface receptor, it provides the signal to activate (turn on or turn off) critical cell processes.
 
Recent scientific breakthroughs have enabled these surface receptors and the internal pathways they control to become targets for drug development. Several companies have used these mechanisms to develop products that have reached the market or advanced to late stage clinical trials.
 
Once a cell signaling pathway is activated, a series of reactions (or cascade) occurs within the cell. Each step activates a specific protein in the pathway, and its active products initiate the activation of the next protein in the process. Some of the cellular processes that are controlled in this manner include inflammatory pathways, cell proliferation, cell survival, and cell death (apoptosis). Elevated levels of activated inflammatory and survival pathways have been correlated with many types of tumors, 10 and can also be markers for more severe disease and/or poor prognosis. Some pathways are associated with resistance to chemotherapy, translated as tumor cell survival in the presence of conventional chemotherapy. These are some of the many tumor cell characteristics that can make cancer a fatal disease.
 
SignPath is developing curcumin, a compound for which there are early indicators that it may be a compound that inhibits several cell survival pathways via blockade of specific signaling proteins called activating kinases. Two established pathway targets are known as NF-kB and AKT(1). The net effect when these pathways are inactivated is to turn off signals leading to cell metabolism, protein synthesis, proliferation and to activate signals leading to cell death via activation of downstream processes. These changes also alter other pathways, including STAT3, Survivin, TNFalpha, and MDR-1 pathways conferring resistance to chemotherapy.
 
SignPath believes inhibition of these critical intracellular survival pathways are good targets for drug development, and our management believes that curcumin is an attractive lead compound for further development due to its inhibition of major survival pathways and collateral effects of activating death pathways. It also prohibits inflammation and release of inflammatory cytokines such as tumor necrosis factor-ά (alpha), inflammatory cells such as macrophages which are required for the development and spread of tumors. Recently it has been shown that activation of NF-kB (an intracellular protein) is a critical component in cellular responses to TOLL-receptor ligands (receptors that activate immune cell responses) and Interleukin-1 (a cytokine). The latter are implicated in the innate immune response promoting murine hepatocellular and colon carcinoma. 11  One of the established effects of curcumin is to inhibit NF-kB and subsequent TOLL-receptor ligand activity. Scientific studies have suggested that a drug that can inhibit these activated survival and inflammatory pathways should be able to stop the growth of cancer cells. Blocking inhibitors of death pathways are believed to shorten the cell’s ability to survive. 12
 
Liposome Encapsulation and Nanocurcumin
 
SignPath was developing nanosized formulations of curcumin which are now a fail-safe drug after development of the other formulations. The liposomal version is a lipid coating that encases the molecule. This increases solubility in serum, and increases the drug’s circulation time allowing more drug to reach tumor sites. In an extended release modification, pre-clinical studies of curcumin with human lung cancer xenotransplants in mice have been completed at the University of North Texas (see below) and published.
_________________
9 See footnote 1 above.
10 Rakoff-Nahoum Seth, and Medzitof, Rusian 2007 Regulation of Spontaneous Intestinal Tumorigenesis Through the Adaptor Protein MyD88. Science 317: 124-127.
11 See footnote 2 above.
12 See footnote 8 above.
 
 
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Mechanism of Action
 
Curcumin’s molecular mechanisms of action involve direct and indirect inhibition or activation of multiple biochemical targets in cells. These include genes, enzymes, proteins, and, particularly, many components of up-regulated cell survival and down-regulated cell death pathways. These activities result in decreased inflammatory and/or oxidative damage, decreased migration, proliferation and invasion of tumor cells, decreased radio- and chemoresistance, and increased chemosensitivity to cytotoxic drugs. These observations suggest the potential to treat several diseases with large potential markets, with an economically feasible product.
 
Cancer: Less than 1% of an oral dose of curcumin is absorbed; yet in spite of this extreme limitation, there are publications that suggest preventative anti-cancer activity of orally administered curcumin 13.    More substantial evidence for anticancer activity is suggested from in vitro and animal experiments. Its anticancer effects include promoting apoptosis (cell death pathways) and down regulation of major pro-survival factors, including AKT, NF-kB, STAT-3, and Survivin signaling pathways. We, therefore, believe that commercial application of parenteral curcumin formulations for cancers which depend upon NF-kB (such as pancreatic cancer) represent prime candidates for Phase II trials assuming successful preclinical and Phase I trials. Many other cancers such as brain tumors are also dependent upon AKT, NF-kB, and survival pathways which may render them additional potential clinical targets.14
 
Government Regulation
 
Regulation by governmental authorities in the United States and other countries is a significant hurdle in the development, manufacture and marketing of pharmaceuticals, and in our ongoing research and development activities. All of our products will require regulatory approval by governmental agencies prior to commercialization. In particular, pharmaceutical drugs are subject to rigorous preclinical testing and clinical trials and other pre-marketing approval requirements by the U.S. Food and Drug Administration (“FDA”) and regulatory authorities in other countries. In the United States, various federal, and in some cases, state statutes and regulations also govern or impact upon the manufacturing, safety, labeling, storage, record-keeping and marketing of pharmaceutical products. The lengthy process of seeking required approvals and the continuing need for compliance with applicable statutes and regulations, require the expenditure of substantial resources.
 
Regulatory approval, when obtained for any of our product candidates may be limited in scope which may significantly restrict the indicated uses for which our product candidates may be marketed. Further, approved drugs and manufacturers are subject to ongoing review and discovery of previously unknown problems that may result in restrictions on their manufacture, sale or use or in their withdrawal from the market.
 
FDA Approval & Developmental Milestones
 
There are four primary phases of FDA clinical trials for an FDA new drug application (NDA) and approval for commercial sale. Before these can begin, non-clinical/pre-clinical laboratory studies are conducted and an Investigational New Drug application (IND) is submitted to the FDA. After FDA approval, the Company may begin Phase I clinical safety and dosage estimation studies, followed by Phase II studies to evaluated clinical efficacy in selected diseases, then Phase III testing to demonstrate statistically significant safety and efficacy and Phase IV pharmacovigilence designed to identify long-term effects of treatment.
 
During the pre-clinical phase (non-clinical and pre-clinical), a compound is studied in-vitro in a laboratory and in-vivo in laboratory animals to establish its stability, manufacturing feasibility, bioavailability, absorption, distribution, metabolism and elimination. This phase of testing establishes pre-clinical parameters for clinical safety and efficacy.  Results of these pre-clinical trials comprise the IND that is submitted to the FDA for review before the drug is tested in humans. Phase I testing is a basic safety and dosage study to determine if the drug is safe enough to administer to patients with advanced diseases such as  pancreatic cancers, lymphomas and brain tumors.
____________________
13 See footnote 2 above.
14 See footnote 1 above.
 
 
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During the initial Phase I, the drug must be tested in healthy human volunteers to determine a tolerable dosage regimen that is sufficiently safe to proceed with further testing in a larger group of diseased patients. Testing in disease-free volunteers can supply accurate estimates of safety and tolerability for application in persons with non-cancer indications, while testing in patients with pre-treated cancers designated Phase Ib can indicate different degrees of tolerance depending upon their past medical history.
 
In Phase II studies, the drug is tested in small number of patients with benign and/or malignant forms of disease to determine the doses at which the drug has clinical activity and to characterize the drug’s effects on the body. These effects include the drug’s dosage, efficacy, and side effect profiles.
 
Drugs that have a clinical benefit in Phase II trials move forward to additional clinical testing with a larger number of patients in Phase III trials. These trials verify Phase II results in a larger patient sample and must demonstrate statistically significant clinical benefits, as well as safety. Trial endpoints are designed to show a meaningful clinical effect over a predetermined timeframe. These timeframes depend on the disease being tested and can be in weeks, months, or years of treatment.
 
The drug being tested is typically compared with a placebo or the current standard of treatment to show that the drug is equal to (or an improvement upon) existing treatments. Once those studies have been completed, a new drug application (NDA) is prepared and submitted to the FDA for approval. Under FDA guidelines, the NDA should be answered within 10 months.  At such time, the FDA may inform the Company that a drug is approved or the application is approvable pending resolution of certain issues, or may require additional studies to be completed for approval.
 
Other Regulatory Requirements
 
Any products that are manufactured or distributed under FDA approvals are subject to pervasive and continuing regulation by the FDA, including record-keeping requirements and reporting of adverse experiences with the products. Drug manufacturers and their subcontractors are required to register with the FDA and, where appropriate, state agencies, and are subject to periodic unannounced inspections by the FDA and state agencies for compliance with cGMP regulations which impose procedural and documentation requirements. Before approving a biologics license application, the FDA will inspect the facilities at which the product is manufactured (including both those of the applicant and any third-party component manufacturers) and will not approve the product unless the manufacturing facilities are in compliance with FDA’s cGMP, which are regulations that govern the manufacture, storage and distribution of a product. Manufacturers of biologics also must comply with FDA’s general biological product standards.
 
Following approval, the FDA periodically inspects drug and biologic manufacturing facilities to ensure continued compliance with the cGMP regulations. We must ensure that any third-party manufacturers continue to expend time, money and effort in the areas of production, quality control, record keeping and reporting to ensure full compliance with those requirements. Failure to comply with these requirements subjects the manufacturer to possible legal or regulatory action, such as suspension of manufacturing or recall or seizure of product. Adverse experiences with the product must be reported to the FDA and could result in the imposition of marketing restrictions through labeling changes or market removal. Product approvals may be withdrawn if compliance with regulatory requirements is not maintained or if problems concerning safety or efficacy of the product occur following approval.
 
The FDA also closely regulates the marketing and promotion of drugs. A company can make only those claims relating to safety and efficacy that are approved by the FDA. Failure to comply with these requirements can result in adverse publicity, warning letters, corrective advertising and potential civil and criminal penalties. Physicians may prescribe legally available drugs for uses that are not described in the product’s labeling and that differ from those tested by us and approved by the FDA. Such off-label uses are common across medical specialties. Physicians may believe that such off-label uses are the best treatment for many patients in varied circumstances. The FDA does not regulate the behavior of physicians in their choice of treatments. The FDA does, however, restrict manufacturer’s communications on the subject of off-label use.
 
 
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The FDA’s policies may change and additional government regulations may be enacted which could prevent or delay regulatory approval of product candidates or approval of new indications for our existing products. We cannot predict the likelihood, nature or extent of adverse governmental regulations that might arise from future legislative or administrative action, either in the United States or abroad.
   
In addition, the labeling, advertising, promotion, marketing and distribution of a drug or biologic product also must be in compliance with FDA and U.S. Federal Trade Commission (“FTC”) requirements which include, among others, standards and regulations for off-label promotion, industry sponsored scientific and educational activities, promotional activities involving the internet, and direct-to-consumer advertising. The FDA and FTC have very broad enforcement authority, and failure to abide by these regulations can result in penalties, including the issuance of a warning letter directing the Company to correct deviations from regulatory standards and enforcement actions that can include seizures, injunctions and criminal prosecution.
 
Other Uses of Curcumin
 
There are other potential uses of curcumin in addition to our initial focus on lung cancer and Parkinson’s disease. Following our clinical trials in these two categories, we will seek to study other cancer candidates which have an AKT or NF-kB requirement for survival and proliferation, such as breast and brain cancers. The unique protean activity of curcumin also suggests its use with other cancer treatment modalities. For example, it may increase tumor cell susceptibility to standard treatment with radiation or chemotherapy, and prevent adverse reactions from other drugs used to treat non-cancer conditions.
 
Because of the protean nature of curcumin’s interaction with different cell components, and based upon data derived from traditional use and non-clinical and pre-clinical laboratory studies, we believe it may have a therapeutic role in numerous non-cancer indications, including neurologic disorders.
 
To expand its use for Parkinson’s disease, a research grant was received for approximately $82,000 from the Michael J. Fox Parkinson’s Disease Foundation to measure parenteral liposomal curcumin and the other two formulations passage across the blood brain barrier and focal cerebral distributions in rat brains in collaboration with Dr. S. Chiu at the Department of Pharmacology and Toxicology, University of Western Ontario, Canada. Data, to date, has revealed intravenous curcumin localized in specific brain regions associated with Parkinson’s disease (striatum and substantial nigra pars compacta) and memory processing (hippocampus). In a subsequent study based upon these data an intravenous liposomal curcumin formulation was effective in blocking progression of brain neuronal death in DJ-1 knockout rats (genetically designed to develop early Parkinson’s disease signs and symptoms). Metabolomic analyses of Parkinson’s-related brain domains in these same rats has been completed and showed significant and specific effects related to amelioration of the disease. These observations indicate that curcumin may be effective in patients with Parkinson’s disease and potentially in other neurologic disorders. The Company’s three different (liposomal, polymeric and slow release PLGA) intravenous nanoparticle size formulations have demonstrated proof of efficacy of these formulations against human tumor xenografts in mice. During IND pre-clinical toxicity trials in dogs, with liposomal curcumin, a dose-dependent hemolysis was observed. It suggested specific dose/schedules of administrations might be required for trials in humans. Follow up studies included in vitro testing of curcumin with human red blood cells revealed the concentrations of curcumin inducing hemolysis were greater than that necessary to mitigate tumors. A patent for preventing this activity has been issued.
 
The Company has reached an agreement in principle to enter into a Clinical Trial Research Agreement with Thomas Jefferson University in Philadelphia, Pennsylvania (“TJU”).  Upon approval by the TJU board, TJU will study (the “Study”) the safety and/or efficacy of liposomal curcumin for progressive Parkinson’s disease.  The Study will be conducted by Dr. Jay Schneider at TJU’s Parkinson’s Disease Research Unit.  The Company is providing TJU with a protocol and supporting information necessary for TJU to conduct the Study.  All research data and results generated during the Study are the property of the Company.  The Company will make available sufficient quantities of curcumin to carry out the Study.  The Company shall retain all right, title and interest in any invention, discovery or improvement made during the course of, or as a result of, the Study.  The Company has the sole right to obtain patent protection, although any invention that extends beyond the research performed with the protocol shall belong to TJU with the Company negotiating an exclusive, royalty-bearing license to any invention for which a patent application is filed for a period of six (6) months commencing on the date of disclosure.
 
To broaden the intellectual property profile of parenteral curcumin, additional clinical uses of curcumin have been incorporated into CIP (continuation in progress) applications. Applications have been submitted to the Patent and Trademark Office which contain claims for additional therapeutic uses of curcumin. There is sufficient published data on curcumin and autoimmune diseases, degenerative diseases of the joints and the nervous system, inflammatory based diseases, aging, and diabetes to envision addressing these conditions with parenteral curcumin when final dosage and safety data from trials in disease free and cancer patients becomes available. During pre-clinical studies we observed that the liposomal component could prevent curcumin inhibition of ionic potassium currents in cell preparations. This has significant clinical implications for other drugs which block the potassium channels.
 
Clinical Trials
 
The Company submitted an IMPD to begin human Phase I clinical trials. Regulatory clearance was received in July 2011, and the first subjects were started on August 22, 2011. The clinical trials for liposomal curcumin use curcumin formulations made under GMP conditions by Polymun GmbH. As described below, the Company  entered into agreements with manufacturers of curcumin, liposomal curcumin, and polymers to produce sufficient quantities to complete all pre-clinical requirements for an IND. Agreements for additional quantities of both formulations for Phase Ib clinical trials will be initiated depending upon human dosage estimates generated in clinical studies. The Company plans to pursue three Phase Ib liposomal curcumin parenteral trials, two in cancer and one in neurologic diseased patients.
 
 
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We have had discussions regarding participation in Phase Ib and II clinical trials during direct meetings with responsible physician investigators with the Central European Society for Anticancer Research and at cancer centers in the United States. All have had extensive experience with drug trials of anticancer drugs and are willing to participate in the proposed clinical studies.
 
These investigators include:
 
 
·
New York Medical College, Dr. T. Ahmad has had extensive experience as a Phase I, II, and III clinical trial investigator.
     
 
·
In Vienna, Austria, Dr. Michael Wolzt is in charge of Phase Ia clinical trials in normal volunteers. Our CEO inspected Dr. Wolzt's facilities in December 2007. To date 50 subjects have been entered into the clinical Phase Ia study of liposomal curcumin and a dose of 4.5 mg/kg was found to induce less than grade 1 hemolytic toxicity, and to reach blood concentrations that are within a therapeutic range.
:
 
·
Phase Ib trials in cancer patients are being carried out by the CESAR group, and these data will be used to bridge studies in the United States.
     
 
·
Phase Ib trials will be cancer patients who have failed standard of care therapy and elected experimental therapy.
     
  · Provided that the safety results of Phase Ib trials in cancer patients are satisfactory andwith FDA and EMA approvals, the Company anticipates the following Phase II trials:
  
 
·
Liposomal curcumin: Intravenous administration to lung cancer patients who fail standard therapy.
     
 
·
Liposomal curcumin: intravenous administration to patients with Parkinson’s disease who have progressed on standard therapy.
 
Market Analysis
 
The anticipated markets for therapeutic curcumin include populations with unmet medical needs, or as combinations with established drugs to enhance their activity in the presence of drug resistance. The preclinical studies of curcumin in cancer suggest its potential applications as a parenteral drug for both prophylaxis and therapy.
 
Given the aging of the population with an annual increment in the number of prospective patients in chronic disease categories, the Company believes a potentially effective and tolerable  parenteral curcumin could gain wide acceptance and usage.
 
 
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As stated earlier, the Company is aware of pre-clinical data from other research suggesting that parenteral curcumin has anti-cancer activity .15
 
The new cases of cancer in the United States in 2009 were estimated at approximately 1,400,000 per year, according to the American Cancer Society, Inc. Surveillance Research. This is a large market with substantial room for improvement over current therapies.
 
Potential Commercialization of Liposomal Curcumin may also prove to be effective as prevention for high-risk individuals and as a therapeutic for established disease when used alone or in combination with other agents. As an initial approach we anticipate treating diseases with unmet needs. These include lung cancer and Parkinson’s disease. While there are current clinical trials with oral preparation of curcumin, we currently know of no competitors with publicly known plans to develop parenteral forms of curcumin. Management believes that the Company is positioned to leverage its rights to its licensed intellectual property of these parenteral products in the United States and worldwide.  Because the liposomal formulation and curcumin in turmeric extracts have been demonstrated by other researchers to be effective in animal studies, 16  we anticipate that synthesized curcumin could be more effective than the extract from turmeric when administered parenterally.
 
Assuming we obtain positive results from our clinical trials and ultimately receive FDA approval, the Company believes that these formulations of curcumin may be accepted by physicians for treating cancer and other diseases that fit within the efficacy profiles established by the Company.
 
Modification of water-insoluble drugs such as curcumin with specific liposomes represent a novel formulation process. There may be specific pharmacological advantages which could confer clinical and/or commercial value. The final cost of drug production will depend upon usage and economies of scale; however, we intend to adopt a strategy, if possible, to result in our products having a cost competitive with current medications for the intended applications.
 
The Company also expects to evaluate conducting potential additional development initiatives based on its licensed curcumin formulation to treat patients with neurologic diseases depending upon the results of the Phase Ib trials, clinical imperatives, and financial resources to carry them out.
 
Clinical application of parenteral administration of liposomal curcumin or nanosized curcumin may induce varied responses in the same disease or in different disease states. In addition, we anticipate different development and manufacturing costs, and ultimately different commercial remuneration in the different applications. These variations are attributed to demographic differences in applications such as pancreatic cancer and lymphoma.
 
The Company entered into a Liposomal Formulation Manufacturing Agreement, as amended, with Polymun Scientific Immunbiologische Forschung GmbH (“Polymun”), Vienna, Austria, dated as of September 6, 2007, which has been filed as an exhibit to the Company’s SEC filings. Pursuant to this agreement, Polymun applies their GLP process and experience to encapsulate pure synthetic curcumin provided by the Company with a layer of lipid particles (making a liposome formulation which can be injected intravenously). After testing for size, and stability, Polymun delivered the liposomal curcumin to the MD Anderson Cancer Center for intravenous animal Potential Commercialization of Liposomal Curcumin and Nanocurcumin toxicity testing. During this developmental process they have invented and developed a special assay to simultaneously quantify the content of lipids and curcumin in all batches they prepare. Polymun completed scaled-up GMP manufacture of the lipocurc formulation. The Company’s obligation to Polymun totaled €280,000 through the first two development stages and thereafter a €130,000 per production fee.  In August 2012, the Company entered into Amendment No. III with Polymun for the production of additional GDP batches of liposomes and the parties continue to work under the terms of the original agreement.  Polymun has produced liposomal curcumin for animal and human use.
 
Since liposomal curcumin is at an advanced stage of development and has completed EMA and IND requirements, the Company’s interest is to proceed with that product in its Phase Ib-II clinical studies.
_______________
 
15 See footnote 8 above.
16 See footnote 8 above.
 
 
44

 
 
Raw Materials; Supplies
 
Liposomal curcumin was manufactured for the Company by Polymun, Inc., of Vienna, Austria under the agreement described in the prior section. Curcumin was obtained initially from a U.S. chemical supplier, Sigma Aldrich Fine Chemicals (“SAFC”). The Company obtained one batch of 200 grams of GMP manufactured liposomal curcumin under an agreement dated June 30, 2007 with SAFC.  The total cost to the Company was $98,350. Sabinsa Inc. subsequently scaled-up manufacture of 98.2% pure curcumin under GMP for human use in Bangalore, India. FDA and EMA (European Medicines Agency) compliance and validations audits relating to the curcumin manufacturing facility in India were performed by Topaz Technology, Inc. of Bryn Mawr, PA under an agreement with the Company dated June 30, 2009, at a total cost of $24,500 which has been paid. Analysis of the 0.1% residue was completed at Chemic Labs, Massachusetts.. The Company’s supply from Sabinsa was made pursuant to purchase orders without a contract. There are very stringent new regulations concerning GMP by the EMA and the FDA.
 
At UTMDCC, GLP pharmacokinetic and toxicity studies of single and multi-dose intravenous liposomal curcumin in mice and rats were without evidence of toxicity at a maximal injectable volume. Dog pharmacokinetics and single ascending dose toxicity studies identified reversible hemolysis at a maximum tolerated dose (MTD) and irreversible hemolysis at a significantly higher dose limiting level. In vitro studies with dog and human RBCs corroborated these observations using annexin V biomarker (a biochemical feature used to measure the progress of diseases or the effects of treatment), and a second independent set of studies at Xenometrics, USA indicated hemolytic sensitivity only at multiples of concentrations above those necessary for therapeutic effect. Multidose toxicological canine studies were completed at Nucro Technics, Canada based upon these studies, and were devoid of tissue toxicity. Body tissue distribution of liposomal curcumin and repeat pharmacokinetic studies of two hour and eight hour infusions were analyzed with a novel validated (patent applied) method for drug levels.
 
Intellectual Property
 
The Company has rights to four issued patents: the first is entitled “Liposomal Curcumin for Treatment of Cancer (June 28, 2011), and the second is entitled: “Water Dispersible oral parenteral and Topical Nanocurcumin” (November 20, 2012). The third is use of calcium channel blockers for hemolysis, the fourth is liposomal prevention of cardiac potassium channel blockage. It also has a pending patent application for Curcumin-ER TM . Additional provisional patent applications have been submitted; including, neurologic disease applications, and composition of matter of synthetic curcumin.
 
Internet domains have been established for Signpathpharma.com; lipocurc.com; nanocurc.com and nanocurcumin.com. The trademark Lipocurc (February 16, 2011) has been registered.
 
Agreement with University of Texas MD Anderson Cancer Center
 
The above described patent for liposomal curcumin was issued on June 28, 2011. It was submitted in 2005 by the University of Texas MD Anderson Cancer Center (the “UTMDACC”) with the title “Liposomal Curcumin for Treatment of Cancer.” On February 21, 2007, SignPath, the UTMDACC and the Board of Regents of the University of Texas System (the “Board”) entered into an exclusive license for this pending patent (the “UTMDACC License Agreement”). Pursuant to the UTMDACC License Agreement, SignPath has a royalty-bearing exclusive, worldwide license to manufacture, use, import and sell for human and animal use inventions and discoveries covered by the issued patent and associated technologies. SignPath may sublicense its rights under the UTMDACC License Agreement.
 
SignPath has agreed to pay all of UTMDACC’s reasonable out-of-pocket expenses of filing, prosecuting, enforcing and maintaining its patent rights. In addition, SignPath is obligated to pay a $15,000 license documentation fee and an annual maintenance fee of $10,000 for the first seven years of the UTMDACC License Agreement. If a patent is issued during the first seven years of the license, this annual fee will increase to $15,000. After the seventh anniversary of the UTMDACC License Agreement, the annual fee will increase to $30,000 a year.
 
In addition, SignPath is obligated to pay running royalties of 2.5% on net sales of less than $250 million for products covered by an issued patent licensed under the UTMDACC License Agreement. This royalty rate increases to 3% for sales equal to, or greater than, $250 million. A royalty of 1.5% of net sales is payable by SignPath for products covered under the license which are not protected by an issued patent. After sales to the public begin, SignPath must pay a minimum annual royalty $75,000 which can be deducted from the royalties on net sales due under the agreement. In addition, SignPath is obligated to pay 20% to 25% of all non-royalty consideration received under sublicensing agreements.
 
 
45

 
 
The Company will also be responsible for the following milestone payments upon the occurrence of specified events. These consist of: (1) $10,000 upon dosing the first patent with a licensed product in a Phase I Study; (2) $25,000 upon dosing the first patient within a licensed product in a Phase II study; (3) $50,000 upon dosing the first patient with a licensed product in a Phase III Study, or $40,000 if no patent has issued when this milestone is achieved; (4) $400,000 upon the first regulatory approval of a licensed product, or $200,000 if no patent has issued and (5) $15,000 upon issuance of a patent. The Company expects to fund the milestone payments when they come due from the private placement of equity securities to the extent funds are available. Further the Company has agreed to provide a minimum of $250,000 in funding for the completion of pre-clinical studies subject to completion of final reports.
 
The UTMDACC License Agreement survives for the period that patent rights covering the licensed intellectual property are in place, or if no patent rights are issued, 15 years with an automatic extension of 15 years upon regulatory approval of a licensed product. UTMDACC and/or the Board has the right to terminate the agreement in any jurisdiction if SignPath fails to cure within 90 days of receipt of written notice its failure to commercialize and actively attempt to commercialize sales in such jurisdiction. The UTMDACC License Agreement is terminable by UTMDACC upon 30 days’ written notice if SignPath fails to cure a breach of payment and/or fails to fund completion of pre-clinical studies or file an IND or upon 90 days’ written notice for any other breach of contract.
 
Agreement with Johns Hopkins University
 
In October, 2007, SignPath and Johns Hopkins University (“JHU”) entered into an exclusive license agreement under a provisional patent application (Serial No. 60,866/516) entitled “Biocompatible ‘Smart’ Nanogels as carriers for Hydrophobic drugs”. This application was submitted on November 20, 2006 by JHU for a nano-sized curcumin formulation called nano curcumin. Pursuant to the JHU License Agreement, SignPath has an exclusive worldwide license to manufacture, use, import and sell inventions and discoveries covered by the pending patent and associated technologies. SignPath may sublicense its rights under the JHU License Agreement, subject to terms and conditions set forth in the Agreement. The JHU License Agreement shall continue until its expiration of the last to expire patent in each country, or if no patents issue, then for 20 years from the commencement of the agreement. The agreement is terminable for a breach which is not cured within 30 days after receipt of notice or by SignPath upon 90 days’ prior written notice. Title to all inventions and discoveries made by each party resulting from their research shall belong to each respective party with joint ownership of inventions and discoveries which are made jointly.
 
Under the terms of the JHU License Agreement, SignPath has agreed to exercise its best efforts file an IND with the FDA and to exercise reasonable efforts to develop and introduce the licensed products and services into the commercial market. In addition, the Company entered into a sponsored research agreement (the “SRA”) with Dr. Anirban Maitra then with JHU pursuant to which SignPath provided $100,000 of funding for the continuation of non-clinical and pre-clinical studies of the nanocurcumin compound and paid JHU indirect costs of $64,000.  The term of the SRA was one year ending on September 18, 2008 which was not extended.  All inventions which would be filed as a continuation patent under JHU’s patent application shall be subject to the JHU License Agreement.
 
SignPath was obligated under the JHU License Agreement to pay $50,000 in license fees which have been paid, plus minimum annual royalties increasing from $10,000 in the first two years to $25,000 in the third and fourth years and $30,000 in the fifth year. An aggregate of approximately $160,000 has been paid under this license agreement. The JHU License Agreement also provides that we will be obligated to pay JHU running royalty rates of two percent (2%) of net sales less than $250 million for licensed products covered by one or more claims in an issued patent, and three percent (3%) of net sales equal to or greater than $250 million for licensed products covered by one or more claims in an issued patent, or one and one half percent (1.5%) of net sales of licensed products not covered by an issued patent. The running royalties payable under the agreement are subject to a minimum annual rate. SignPath is also subject to other substantial payments, including all reasonable costs of patent reimbursement. The Company is obligated to make the following payments upon development milestones to JHU regardless of whether the milestone is achieved by the Company, a sublicensee or an affiliate: (1) $25,000 upon dosing the first patient with a licensed product in a Phase I clinical trial at a site other than JHU; (2) $50,000 upon dosing the first patient with a licensed patent in a Phase II clinical trial at a site other than JHU; (3) $25,000 upon dosing the first patient with the licensed patent in a Phase III clinical trial at a site other than JHU; (4) $250,000 upon first regulatory approval of the licensed patent, or $100,000 if no patent has issued; (5) $10,000 upon issuance of a patent sublicense fees (if applicable), and reimbursement of costs reasonably incurred by JHU in connection with the patent.
 
 
46

 
 
SignPath and JHU entered into an Exclusive License Agreement effective June 5, 2013 (the “2013 Agreement”) as a result of an invention developed during the course of research created under the above-described JHU License Agreement.  JHU granted the Company an exclusive worldwide license to use “a composite polymeric nanoparticle for overcoming multidrug resistance to cancer chemotherapeutics and treatment-related systemic toxicity.”  The license fee was $10,000 upon signing; $15,000 within one year; with minimum annual royalties starting in year three at $10,000; $20,000 in year four and $30,000 in year five and onward.  SignPath will also pay an earned royalty of 3% on sales to be reduced by the minimum annual royalty.  Royalties will be paid for a minimum of ten years from first commercial sale of the licensed product.  Milestone payments will be paid by the Company based upon dosing of first patents in Phases I, II, and III clinical trials and then upon regulatory approval, increasing from $25,000 to $150,000.  The 2013 Agreement will continue with the last to expire patent in each country, or if no patents are issued then 20 years from June 5, 2013, subject to earlier termination.
 
Agreements with the University of North Texas
 
On August 18, 2008, the Company entered into a Patent and Technology License Agreement with the University of North Texas (“UNT”) Health Science Center (the “UNT Agreement”). UNT granted the Company a royalty-bearing exclusive license to manufacture and sell products developed at UNT from depot curcumin. In consideration of the license, the Company agreed to pay an upfront license fee of $15,000, reasonable out-of-pocket expenses for patent rights; an annual maintenance fee of $10,000 commencing on the first anniversary date of when the UNT Agreement was signed until the first to occur of (i) the seventh anniversary date of the contract signing; (ii) the first sale of a product to a non-affiliated third party; or (iii) the issuance of a patent which has been issued on June 28, 2011.  This Agreement was terminated effective September 24, 2012.
 
In November 2013, the Company entered into a Patent and Technology License Agreement (the “2013 Agreement”) with UNT on substantially the same terms as the earlier agreement for the hybrid nanoparticle liposome-PLGA and curcumin.  Under the 2013 Agreement, UNT granted the Company an exclusive license to manufacture and use the patent rights to the discoveries and inventions in Liposomal sustained release compounds created by the Company and UNT, as well as a non-exclusive license to any technology derived from the patents before this Agreement anywhere in the world for human and animal use, for the term of the patents, or 15 years, whichever is longer.  In exchange for the license, the Company will need to actively commercialize the patents throughout the world.  SignPath agreed to pay UNT a running royalty equal to 2.5% of net sales less than $250 million for licensed products covered by an issued patent; 3% of net sales equal to or greater than $250 million for licensed products covered by an issued patent, and 1.5% of net sales of licensed products not covered by an issued patent, subject to a reduction for amounts paid by SignPath to a third party to avoid infringing such third party’s patent rights; plus 20% of all non-royalty consideration received by the Company from any sublicensee.
 
While the Company and UNT are equal owners of patent rights, SignPath is responsible for preparing, filing, prosecuting, defending and maintaining patent rights made in the name of both parties.  The term of the agreement if for the full end of term(s) for which patent rights have not expired or for a term of 15 years, whichever is longer.  UNT has the right to terminate the license upon 90 days’ written notice if SignPath has not provided written evidence it is making diligent efforts to actively commercialize licensed products in specified political jurisdictions.
 
SignPath entered into a one-year Sponsored Research Agreement with UNT to study non-small cell lung cancer using curcumin ER.  The program is under the direction of Dr. Jamboor Vishwanatha.  SignPath agreed to pay UNT a sum of $116,000.  All inventions and discoveries resulting from the study shall remain with UNT.
 
 
47

 
 
Employees
 
The Company currently has one employee, Dr. Lawrence Helson, its Chief Executive Officer. The Company expects to continue to use subcontractors and independent consultants and will hire a business development director when funds are available.
Properties
 
The Company’s executive offices are located at 3477 Corporate Parkway, Suite 100, Center Valley, PA 18034, telephone (215) 538-9996. The Company occupies this space on a month to month basis at a rent of $200 per month.
 
Legal Proceedings
 
As of the date hereof, there are no material legal proceedings pending or threatened to be taken against the Company. SignPath has retained legal counsel to evaluate and advise on our intellectual property and patent strategy.
 
Publications/Presentations: SignPath Pharma Curcumin Formulations
 
The Company has the following publications and details are available on the Company’s website, see www.signpathpharma.com.
 
1.
Lan Li, Fadi S, Braiteh FS et al. : Liposome encapsulated curcumin, in vitro and in vivo effects on proliferation, apoptosis, signaling and angiogenesis. Cancer 2005 104:1322-1331
   
2.
Lan Li, Bilal Ahmed, Kapil Mehta et al.: Liposomal curcumin with and without oxaloplatin: effects on cell growth, apoptosis and angiogenesis in colorectal cancer. Molecular Cancer Therapeutics. 2007 6:1276-1282
   
3.
Savita Bisht, Georg Feldman, Scheetal Soni et al.: Polymeric nanoparticle encapsulated curcumin )nanocurcumin: a novel strategy for human cancer therapy. J Nanobiotechnology 2007 5:3
   
4.
Claire M. Mach, Lata Matthew, Scott A. Mosley, Lawrence Helson et al.: Determination of minimum effective dosing schedule for liposomal curcumin in a mouse model of pancreatic cancer. Am Coll Clin Pharm. Annual meeting. 2008 Louisville KY. Presentation.
   
5.
Clair M. Mach, Lata Mathew, Scott A Mosley, et al.: Determination of minimum effective dose and optimal dosing schedule for liposomal curcumin in a xenograft human pancreatic cancer model. Journal of Anticancer Research. 2009 29: 1895-1900
   
6.
Clair M. Mach, J.H.Chen, Sa Mosley et al.. Evaluation of Curcumin Cytochrome p450 metabolism . Hematology Oncology Pharmacy Association(HOPA) June 17-20 ,2009. Abstract. Manuscript submitted J. Anticancer Research. 2010 in press.
   
7.
Vishwanatha JK.: Biodegradable Nanoparticles for Cancer Therapy. 2nd Annual Unither Nanomedical and Telemedical Conference. Oreford, Quebec, Canada Abstract presentation Feb 24-27 2009
   
8.
Mukerjee A. and JK Vishwanatha: Formulation, Characterization and evaluation of Curcumin loaded PLGA nanospheres for cancer therapy. Journal of Anticancer Research 2009 29:3867-3876
   
9.
Judith A. Smith, Lata Mathew, MS Claire, K Santiago, L. Helson: Development of Liposomal curcumin as a new potential anticancer agent. MD Anderson Cancer Center and Signpath Pharma. AACR–EORTC-NCI 2009. Abstract and presentation Nov 18
 
 
48

 
 
10.
Mukerjee A . Ranjan AP, Helson L et al: Formulation, Characterization and Evaluation of Annexin A2-conjugated curcumin loaded nanospheres as a targeted drug carrier system for breast cancer therapy. Proc.10 th  US-Japan Symposium on Drug Delivery Systems. 2009 Maui, Hawaii. Ab no. 1468
   
11.
Ranjan AP, Mukerjee A, JK Vishwanatha. Optimization of curcumin loaded PLGA nanoparticle-formulation using central composite design for cancer therapy. Proc. 10th US-Japan Symposium on Drug Delivery Systems. 2009 Maui, Hawaii. Ab no 1526
   
12.
Mukerjee A, Luchowski R, Ranjan et al.: . Enhanced Fluorescence of curcumin on plasmonic platforms. Current Pharmaceutical Biotechnology. 2010 11:223-228.
   
13.
Lim KJ, Maitra A, Bisht S et al.: Using Nanocurcumin to treat Medulloblastoma and Glioblastoma, AACR Annual meeting Ab no.4440, 2010
   
14.
Claire M Mach, Jing Hong Chen, Scott A Mosley: Evaluation of Liposomal Curcumin Cytochrome P450 Metabolism. Anticancer Research 2010 30:811-814
   
15.
Mukerjee A, Sorenson T Thomas J et al.: Spectroscopic properties of curcumin, orientation of transition moments, J Physical Chemistry 2010 114:12679-12684
   
16.
Bisht S,Mizuma M,Feldman G. et al.: Systemic Administration of Polymeric nanoparticle –encapsulated Curcumin(Nanocurc®) blocks tumor growth and metastases in preclinical models of Pancreatic Cancer. Mol Canc Ther. 2010 9: 2255-2264
   
17.
Thamake S I, Iraut Sf, Ranjan AP,Gryczynski Z,and J K Vishwanatha.: Surface Functionalization of PLGA nanoparticles by non-covalent insertion of homo-bifunctional spacer for active targeting in cancer therapy. Nanotechnology 2011, 22(3):03510 (10pp)
   
18.
Ranjan AP, Mukerjee A, Vishwanatha JA: Optimization and in vitro characterization of CUR loaded PLGA nanoparticles for cancer therapy. 2010 Submitted.
   
19.
Helson L. Chiu S: Curcumin Formulations Brain Distribution. Presentation to MJFF for Parkinson’s disease NYC Sept 21, 2010.
   
20.
Chiu SS, Lui E, Majeed M, Vishwanatha JK, Ranjan A, Maitra A, Dipanker P, Smith JA ,Helson L: Differential distribution of intravenous curcumin formulations in the rat brain. J Anticancer Research, 2011, 31(3):907-911.
   
21.
Balmiki R, Bisht S, Maitra A et al. Neuroprotective and Neurorescue effects of a Novel Polymeric Nanoparticle Formulation of curcumin (NanoCurc®) in the Neuronal cell culture and Animal Model: Implications for Alzheimer’s disease. J Alzheimer’s Dis. 2011 23:61-77.
   
22.
Tuttle S, Hertan L, Katz JS: Indian gold treating cancer in the age of nano. Cancer Biology and Therapy, 2011, 11(5): 474-476 (a review of #22)
   
23.
Lim KJ, Bisht S, Bar EE, Maitra A, Eberhart CG: A polymeric nanoparticle formulation of curcumin inhibits growth, clono-genicity, and stem-like fraction in malignant brain tumors. Cancer Biology and Therapy 2011, 11(5): 1-10
   
24.
Savita Bisht, Mehtab A Khan, Mena Bekhit, Haibo Bai, Toby Cornish, Masamichi Mizuma, Michelle A Rudek, Ming Zhao, Amarnath Maitra, Balmiki Ray, Debomoy Lahiri, Anirban Maitra, and Robert A Anders. A polymeric nanoparticle formulation of curcumin (NanoCurc™) ameliorates CCl4-induced hepatic injury and fibrosis through reduction of pro-inflammatory cytokines and stellate cell activation. Laboratory Investigation (2011), 1–13
 
 
49

 
 
25.
Lawrence Helson, George Shopp, Annie Bouchard, and Muhammad Majeed Liposome mitigation of curcumin inhibition of cardiac potassium delayed-rectifier current. journal of Receptor, Ligand And Channel Research, 2012.
   
26.
Lawrence Helson, Gordon Bolger, Muhammad Majeed, Brigitta Vcelar, Kresimir Pucaj, and Dharmendr MatabudulInfusion Pharmacokinetics of Lipocurc™ (Liposomal Curcumin) and its Metabolite Tetrahydrocurcumin in Beagle Dogs.Anticancer Res, 2012


   
27.
Amalendu P Ranjan, Anindita Mukerjee, Lawrence Helson and Jamboor K Vishwanatha Scale up, optimization and stability analysis of curcumin C3 complex-loaded nanoparticles for cancer therapy. Journal of Nanobiotechnology, 2012



   
28.
Dharmendr Matabudul, Kresimir Pucaj, Gordon Bolger, Brigitta Vcelar, Muhammed Majeed and Lawrence Helson: Tissue Distribution of (LipocurcTM) Liposomal Curcumin and Tetrahydrocurcumin Following Two- and Eight-hour Infusions in Beagle Dogs. Anticancer Res, 2012
   
29.
Simon Chiu, Kristen J. Terpstra ,Yves Bureau,Jirui Hou, Hana Raheb, Zack Cernvosky, Vladimir Badmeav7 , John Copen; Mariwan Husni, Michael Woodbury: Liposomal-formulated curcumin [LipocurcTM ] targeting HDAC (Histone Deacetylase ), prevents apoptosis and improves motor deficits in Park 7 (DJ-1)- Knockout rat model of Parkinson's disease: implications for Epigenetics-based Nanotechnology-driven Drug Platform.



   
30.
Zou P, Helson L, Maitra A, Stern St, McNeil SE Polymeric curcumin nanoparticle pharmacokinetics and metabolism in bile duct cannulated rats.



   
31.
Poster “Safety and Pharamacokinetics of Liposomal Curcumin in Healthy Subjects: A Randomized Placebo_Controlled Double Blind First-in-human Study”


   
32.
Rajan AP, Mukerjee A, Helson L, Gupta R, Vishwanatha JK Efficacy of liposomal curcumin in a human pancreatic tumor xenograft model: inhibition of tumor growth and angiogenesis. Anticancer Res, 2013 Sep; 33(9):3603-3609.


   
33.
Chun YS, Bisht S, Chenna V, Pramanik D, Yoshida T, Hong SM, de Wilde RF, Zhang Z, Huso D, Zhao M, Rudek M, Stearns V, Maitra A, Sukumar S. Intraductal Administration of a Polymeric Nanoparticle Formulation of Curcumin (NanoCurc) Significantly Attenuates Incidence of Mammary Tumors in a Rodent Chemical Carcinogenesis Model Implications for breast cancer chemoprevention in at-risk populations. Carcinogenesis. 2012 Jul 25.
   
34.
Pramanik D, Campbell NR, Das S, Gupta S, Chenna V, Bisht S, Sysa-Shah P, Bedja D, Karikari C, Steenbergen C, Gabrielson KL, Maitra A, Maitra A. A composite polymer nanoparticle overcomes multidrug resistance and ameliorates doxorubicin-associated cardiomyopathy.   Oncotarget  . 2012 Jun;3(6):640-50.


   
35.
Bisht S, Maitra A. Systemic delivery of curcumin: 21st century solutions for an ancient conundrum. Curr Drug Discov Technol.   2009; 6:192-199.


   
36.
Dr. Anirban Maitra, Dr. Lawrence Helson Characterization of Nanocurcumin NCL 201304A.


   
37.
Storka A, Vcelar B, Klickovic U, Gouya G, Weisshaar S, Aschauer S, Helson L, Wolzt M. Effect of liposomal curcumin on red blood cells in vitro. Anticancer Res. 2013 Sep;33(9):3629-34.
   
38.
Amalendu P. Ranjan, Anindita Mukerjee, Jamboor K. Vishwanatha. University Of North Texas Health Science Center, Fort Worth, TX. targeted multifunctional lipid-plga hybrid nanosystems for metastatic breast cancer imaging and therapy. April 08, 2014.
 
 
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MANAGEMENT
 
Set forth below is also a brief description of the relevant business and/or scientific experience and background of each person named below.
 
Officers, Directors and Other Key Staff
 
Our current officers, directors, and other key advisors to the Company consist of:
 
Name
 
Age
 
Position
         
Lawrence Helson, BSci,  BMed, M.Sci, MD
 
83
 
Chief Executive Officer, Director, and President
Arthur P. Bollon, Ph.D.
 
72
 
Director
Jack Levine, CPA
 
64
 
Director
 
Dr. Helson has served as Chief Executive Officer, Director and President of the Company since May 28, 2008. From 1967 to 1986, Dr. Helson was employed at Memorial Sloan Kettering Cancer Center NYC, the last 12 years as attending physician. From 1982 to 1986, he was an associate attending pediatrician at Cornell University Medical School, New York City. From 1986-1987 he was director of Phase III clinical trials of Zoladex ICI in Delaware. From 1987 to 1997 he was Professor of Pediatric and Adult Oncology at New York Medical College, Valhalla, NY. From 1997 to 2007 he was a founder-scientist at Onconova Inc, a biotechnology company in Princeton, New Jersey, and since 1993 has also been part-time Vice President of Bio-Research at NaproBiotherapeutics, Boulder, Colorado. He has held oncology consulting positions from 1985 to 1997 at Bambino Jesu Hospital, Vatican City, Metaxa Hospital; Pireaus, Greece; and for the Brazilian Consulate in New York City. From 2003 until present, he has provided unpaid informal consulting services to HemoBiotech Inc, in Dallas, Texas. He ran various research laboratories at Sloan Kettering Institute from 1973-1985, from 1987 to 1997 at New York Medical College, and from 2002 to 2005 for NaproBiotherapeutics (now Tapestry Pharmaceuticals) in Allentown, Pennsylvania. Dr. Helson has over 200 peer reviewed publications and 4 Issued Patents. He initiated the bone marrow transplant program at Memorial Sloan Kettering Hospital in 1973, and published the first peer reviewed paper in the journal Nature on Tumor Necrosis Factor in 1975. His laboratory research also developed six human neural tumor cell lines which are in the ATCC and English repositories and are distributed worldwide. He also edits the journal Anticancer Research, published in Athens, Greece and was an editor for Nude Mouse Heterotransplantation Research, published by Karger and Co.
 
Dr. Arthur P. Bollon has served as a director of the Company since May 28, 2008. Dr. Bollon has more than 25 years of experience in biotechnology as a scientist, executive and entrepreneur.  Since 2011, Dr. Bollon has been Chairman and CEO of Vitruvian BioMedical, Inc., which is developing an Alzheimer Disease Vaccine and diagnostic technologies. From October 2003, until August 2010, he was the Chairman, President and Chief Executive Officer to HemoBioTech, Inc. which is developing HemoTech, a potential substitute for human blood. He is a founder and had served as Chairman and Chief Executive Officer of  Wadley Biosciences Inc./LPL, a joint venture between Wadley Cancer Center and Phillips Petroleum which focused on cancer and immune disease therapeutics from 1987 to 1991. From 1992 to 2000, he was a founder, Chairman and Chief Executive Officer of Cytoclonal Pharmaceutics Inc. which focused on cancer and infectious disease therapeutics. While at Cytoclonal, he completed an initial public offering. In addition, he has completed research contracts with multiple universities including UCLA, Montana State University, University of California at San Diego, Texas Tech University and University of British Columbia and licensing agreements with Brisol Meyers-Squibb, Phillips Petroleum, Merck & Co. and Nuron Biotech.
 
From 1979 through 1987, Dr. Bollon served as Chairman of the Department of Molecular Genetics and Director of Genetic Engineering at the Wadley Cancer Center focusing on the cloning of human cytokine genes for treatment of cancer. Prior to Wadley, he was a faculty member at the University of Texas Southwestern Medical School and Adjunct Professor in the Department of Molecular and Cell Biology at the University of Texas at Dallas. He is the author of multiple scientific communications including Editor of “Recombinant DNA Products: Insulin, Interferon and Growth Hormone,” by CRC Press. Dr. Bollon received his Ph.D. in molecular genetics from the Waxman Institute of Microbiology at Rutgers University and was a Post-Doctoral Fellow at Yale University.
 
Jack Levine was appointed to the Board of Directors of the Company on July 12, 2010. Mr. Levine, a Certified Public Accountant, has been advising private companies for over 30 years. As of November 2011, he was elected Chairman of the Audit Committee of Provista Diagnostics, Inc., a cancer detection and diagnostics company focused on women’s cancer. The company has established partnerships that allow access to some of the most innovative biomarkers in the molecular oncology market. From 1999 to 2007 he served as an Independent Board Member to Pharmanet, Inc. where from 2006-2007, he served as Chairman of the Board; in 2005, was a member of the Nominating Committee, Lead Director in 2004; a member of the Compensation Committee in 2003, a Chairman of the Audit Committee in 1999. Pharmanet is a global drug development services company providing a comprehensive range of services to pharmaceutical biotechnology, generic drug and medical device companies that was traded on Nasdaq and has since been acquired. From 2004-2008, Mr. Levine served as Chairman of the Audit Committee of Grant Life Sciences (OTCBB), an R&D company focused on early detection of cervical cancer and also providing medical diagnostic kits. From 2000-2006, Mr. Levine was Chairman either of the Audit Committee, Executive Committee or ALCO Committee of Beach Bank, Miami Beach, Florida. He also served as Chairman of the Audit Committees of Prairie Fund (2000-2006) and Bankers Savings Bank (1996-1998). From 2004-2006, Mr. Levine was a member of the Audit Committee of Miami Dade County School Board, the nation’s third largest school system with an annual budget exceeding $5 Billion.  Mr. Levine currently sits on the Board of Biscayne Pharmaceuticals, Inc.  Biscayne is A biopharmaceutical company discovering and developing novel therapies based on growth hormone-releasing hormone (GHRH) analogs.  Mr. Levine has been a Board Member since January 2013.
 
 
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Mr. Levine has been a licensed CPA in Florida since 1983 and in New York since 2009. He has been a Committee member of the State of Florida – Florida Bar since 1993 and a Board Member of the Southeast Region of the American Friends of Bar-Ilan University since 2002.
 
Audit Committee
 
The Company’s audit committee presently consists of one member, Jack Levine. Mr. Levine is an Audit Committee Financial Expert as defined in Item 407(d)(5)(i) of Regulation S-K. The audit committee’s duties are to recommend to our board of directors the engagement of independent auditors to audit our financial statements and to review our accounting and auditing principles. The audit committee reviews the scope, timing and fees for the annual audit and the results of audit examinations performed by independent public accountants, including their recommendations to improve the system of accounting and internal controls. The audit committee oversees the independent auditors, including their independence and objectivity. However, the committee members are not acting as professional accountants or auditors, and their functions are not intended to duplicate or substitute for the activities of management and the independent auditors. The audit committee is empowered to retain independent legal counsel and other advisors as it deems necessary or appropriate to assist the audit committee in fulfilling its responsibilities, and to approve the fees and other retention terms of the advisors. Our audit committee member possesses an understanding of financial statements and generally accepted accounting principles.
 
Director Independence
 
The Company presently does not have any other committees of the Board of Directors, including compensation, nominating and corporate governance, and the Board acts together on all matters. We are not required to comply with the director independence requirement of any securities exchange. In determining whether our directors are independent, however, we intend to comply with the independent rules of Nasdaq provided by Rule 4200(a)(15). As of the date of this Prospectus, Dr. Arthur Bollon and Jack Levine, two of our three directors, are non-officer independent members of the Board of Directors.
 
Scientific Advisory Board
 
SignPath has established a Scientific Advisory Board (“SAB”) to review the research projects of SignPath and of partnerships in which SignPath is a partner and analyze the progress and direction of the research projects; to consider and advise SignPath with respect to any proposed or future research projects; and to consider and suggest general areas of research to be pursued or significant products that should be developed.
 
Members of the SAB, acting as independent contractors, shall provide consulting services to the Company from time to time as requested. Members are expected to be available for telephonic conversations and for review of proposed products from time to time. The consulting agreements are renewable on an annual basis and are subject to termination on 30 days prior written notice by either party.  The Company will pay its SAB members a reasonable royalty, to be negotiated on a case by case basis, from revenues derived by the Company as a result of any inventions, improvements or projects submitted by the advisors. The current members of the SAB and their biographical information are as follows:
 
 
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Lawrence Helson, MD, See “Management” above.
 
Arthur Bollon, Ph.D., See “Management” above.
 
Anirban Maitra, MBBS, is the recipient of the Sponsored Research Agreement Johns Hopkins Hospital Preclinical nanocurcumin development. Dr. Maitra holds a Medical degree from All India Institute of Medical Sciences at New Delhi, India in 1996. He then had a residency in Anatomic Pathology from University of Texas Southwestern Medical Center Dallas followed by a Fellowship in Pediatric Pathology Dallas Children’s Medical Center and Gastrointestinal/liver Pathology clinical research fellowship at Johns Hopkins in 2001, with a faculty appointment in 2002. Currently, he is Associate Professor of Pathology and Oncology, and on the faculty of McKusick-Nathans Institute of Genetic Medicine. He is associate editor of Current Molecular Medicine and has five major awards for his research contributions. His research activities include mechanism-based cancer-specific therapies for pancreatic cancer exploring small molecule inhibitors of developmental signaling pathways, high-throughput approaches for identification of abnormal pancreatic cancer genes, and using targeted nanoparticles as novel drug delivery systems to enhance therapeutic efficacy while restricting side effects. This latter research is supported by a Sponsored Research Agreement with SignPath Pharma Inc.
 
Tauseef Ahmed, MD, is the medical director of the Zalman A. Arlin Cancer Institute at Westchester County Medical Center. He also serves as Chief to the division of oncology at New York Medical College as well as Professor of Medicine. He stands on 11 cancer-related committees including serving as Chair of the Cancer Committee and the Oncology Steering Committee at Westchester Medical Center. Dr. Ahmed is widely published with over 130 peer reviewed articles appearing in various medical journals.
 
Judith A. Smith, Pharm.D. FCCP, BCOP, is Asst. Professor Dept. Gynecology, Division of Surgery, MD Anderson Director, Translational Research Fellowship Division of Pharmacy and Head, Curcumin Group UT MD Anderson Cancer Center. Dr. Smith received a Bachelor of Science in Pharmacy from Union University Albany College of Pharmacy in 1996 and completed a Doctor of Pharmacy degree in 1997. She completed a residency in Oncology Pharmacy Practice with a Pharmacy Practice equivalent at the National Institutes of Health. After residency, Dr. Smith completed a two-year fellowship in Clinical Pharmacology at the University of Texas M.D. Anderson Cancer Center (MDACC), then joined the Faculty at UT MD Anderson Cancer Center. Currently, Dr. Smith is Director of Pharmacology Research and an Associate Professor in the Department of Gynecologic Oncology, Division of Surgery at MDACC. In addition, she has a joint-faculty appointment as an Assistant Professor in the Department of Obstetrics and Gynecology at the University of Texas Health Science Center (UTHSC) at Houston Medical School and also in the Department of Clinical Sciences and Administration at the University of Houston College of Pharmacy where Dr. Smith is the course coordinator for two graduate elective courses. She is an active clinical pharmacist in the Gynecology Oncology Center at MDACC as well as the Core Pharmacology Laboratory Director at UTHSC Medical School at Houston. Her research focus is on drug development for gynecologic cancers and conditions with a specific focus on drug interactions/drug resistance with a focus on integration of herbal and nutritional supplements for treatment of cancer.
 
Muhammad Majeed, Ph.D., is the Founder, President, and Chief Executive Officer, Sabinsa Corporation, a manufacturer of fine chemicals for nutritional, pharmaceutical and food industries. Dr. Majeed received a B. Pharm. from Trivandrum Medical College, India; MS in Pharmacy and PhD in Industrial Pharmacy in New York in 1975. He worked in Pfizer, Carter Wallace and other major companies on drug formulations prior to establishing Sabinsa Corp. whose goal was to integrate modern pharmaceutical technology with Ayurvedic medicine. He developed methods to extract and synthesize medicinal products such as Boswellin, curcuminoids, gugulipids, bioperine, citrine, petro Selenic acid, and 50 other standardized products which are marketed globally with the US and Japan as the major markets. Currently Sabinsa manufactures synthetic intermediates used in pharmaceutical herb powders. Manufacturing, Research and Development is in India. His company has 32 U.S. and international patents.
 
George M. Shopp, PhD. DABT is a private consultant assisting clients in the nonclinical discovery and development of small molecule and biological therapeutics. He has 33 years of experience in the fields of toxicology, pharmacology, pharmacokinetics and drug development. This includes two years at toxicology contract research organizations (CRGs), 12 years in grant and contract supported basic and applied research (Medical College of Virginia and Lovelace Medical Foundation). Fourteen years in industrial drug development including: 3 years at Synergen responsible for all regulatory and research investigational toxicology; 2 years at Genentech directing the research toxicology group, and responsible for nonclinical development of growth factors and monoclonal antibodies; and Elan Pharmaceuticals for 9 years responsible for global nonclinical development and research toxicology of small molecule drugs and biopharmaceutics. Therapeutic areas include: Alzheimer's disease, Parkinson's disease, pain, migraine, oncology, diabetes, epilepsy, stroke, rheumatoid arthritis, inflammatory bowel disease, and sepsis. Drug classes include: enzyme inhibitors, ion channel blockers, anti-angiogenesis factors, growth factors, monoclonal antibodies, human proteins, and polyethylene glycol conjugated molecules. Areas of expertise include: building and managing skilled and efficient nonclinical safety groups in the pharmaceutical industry, global nonclinical development of small molecule and protein drugs, regulatory toxicology (FDA, ED and Japan), performing due diligence on potential in licensed programs, conducting in-house and contract GLP pharmacology/toxicology/ADME/PK studies, in vitro toxicity testing and screening, in vivo disease models, research and investigational toxicology, assessment of immunotoxicologic/host resistance/hematopoietic effects of drugs and chemicals, flow cytometry, and pulmonary toxicology/immunology. Dr. Shopp was President of the Board of Directors for the American Board of Toxicology in 2003. He has a PhD in Pharocolgy Toxicology from the Medical College of Virginia, post-doctoral work in pulmonary immunology/toxicology and a BS in Biology and Chemistry from Bucknell University.
 
 
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Robert H. Horne, M.D. has been an orthopedic and hand surgeon since 1966. Since 2009 he has been on the staff of Mee Memorial Hospital, King City, Oklahoma and prior thereto Claxton-Hepburn Hospital, Ogdensberg, New York from 1968 to 2008 he was in private practice in Salt Lake City, Utah. Prior thereto, he was Chief of Surgical Services at McClellan U.S. Air Force Base from 1963 to 1965. From 2007 to 2008, Dr. Horne was Honorary President, Utah Medical Association. Dr. Horne received his Doctor of Medicine from Cornell University Medical College in 1960.
 
Peter Sordillo MD PhD has been on the attending staff of Hematology and Medical Oncology at Lenox Hill Hospital, New York, New York since 1987.  He is also a consultant to Institute for Ultrafast Spectroscopy and Lasers, Physics Department of City University of New York.  From 1981 to 1989, he was an oncologist on the attending staff of Solid Tumor Service, Department of Medicine, Memorial Sloan-Kettering Cancer Center.  Dr. Sordillo received his Diplomate of American Board of Medical Oncology in 1981 and his Diplomate of American Board of Internal Medicine in 1977.  Dr. Sordillo received his Doctor of Medicine from New York Medical College in 1974, his Ph.D. in Physics from Columbia University in 1990 and his M.S. in Physics from New York University in 2001.
 
Business Advisory Board
 
Adam Sheer was elected a member of the Company’s Business Advisory Board in January 2012. He is a consultant to the equities business. From January, 2010 until January 2011 he was a consultant to Magnetar Capital in Chicago. From September 2007 until January 2010, he was a managing principal and Chief Investment Officer to Aldebaran Investors, a SPAC (Special Purpose Acquisition Company). From January, 2005 until September 2007, Mr. Scheer was portfolio manager for SPACs at Fir Tree Partners. He started his career at Goldman Sachs/SpeerLeeds and Kellogg as a trader trainee in 2002. Mr. Sheen holds a B.A. in International Economics & Commerce from Lafayette College.
 
Contingency Plan
 
In the event that Dr. Helson, our current CEO, is unable to fulfill his duties due to a short-term, long-term, or permanent absence, the Company has adopted a contingency plan setting forth a recommended plan for the governance of the Company.  Under the terms of the contingency plan, the Company expects that Dr. George Shopp, a member of our Scientific Advisory Board, is expected to supervise our general and preclinical science, and Dr. Peter Sordillo, a member of our Scientific Advisory Board, is expected to supervise our clinical issues, trials and related matters.  Drs. Shopp and Sordillo are expected to enter into employment agreements with the Company under their current positions, and Dr. Shopp would become interim CEO if Dr. Helson is unable to perform his duties.
 
EXECUTIVE COMPENSATION
 
Employment Agreement
On February 20, 2013, the Company has entered into a three-year employment agreement with Dr. Lawrence Helson to secure his services as Chairman, President and Chief Executive Officer.  The contract ends February 20, 2016.   Pursuant to this Agreement, Dr. Helson will receive a base salary of $204,000 per annum.  On May 1, 2014, Dr. Helson received options to purchase 200,000 shares of Common Stock exercisable at $1.25 per share for services rendered during 2013.  On February 20, 2013, he agreed to waive $104,000 of his accrued $200,000 salary for 2012 and received options to purchase 200,000 shares of Common Stock exercisable at $0.85 per share. As of December 31, 2012, the Company booked an accrual for the waived compensations totaling $104,000. On December 28, 2010 and December 22, 2011, the Board of Directors awarded Dr. Helson (and/or his assignees) 300,000 restricted shares of Common Stock on each date in lieu of all accrued and unpaid salary and any bonus.
 
 
54

 
 
Dr. Helson will be eligible to receive stock options to purchase up to 250,000 shares of Common Stock exercisable at $0.85 per share for 10 years from the date of grant upon initiation of Phase Ib trials and approvals from either the U.S. FDA to initiate Phase II trials on one or more cancer indications.  Dr. Helson would also then be entitled to a 20% increase in salary.  Upon successful completion of one or more clinical Phase II trials and approvals from (either or both the FDA and EMA to initiate Phase III trials on at least one cancer indication, Dr. Helson shall be granted stock options to purchase 250,000 shares of the Company’s common stock exercisable at $1.25 per share and an increase in salary to $325,000 per annum.  If the Company is acquired or a Change of Control takes place at a price not less than $500 million before the completion of either of these milestones and/or other milestones authorized on December 12, 2014 described below, all bonuses shall be payable upon closing of such transaction.
 
Dr. Helson may terminate the agreement upon 30 days’ prior written notice.  If the Company terminates without Cause (as defined) or Dr. Helson terminates for Good Reason (as defined) or a Disability, the Company shall pay Dr. Helson in addition to all accrued compensation, a severance payment equal to two times Dr. Helson’s then current base salary.  The Company shall also pay the severance payment in the event it fails to notify Dr. Helson of its intentions to continue employment past the expiration date no less than 90 days prior to the expiration date, or if they fail to reach an agreement on a new employment agreement prior to the expiration date.  The severance payment shall be paid 25% upon termination and the balance in five equal monthly installments commencing one month after termination.  Dr. Helson’s employment agreement provides for a non-compete for one year following termination of employment with any business primarily involved in the development, marketing and licensing that are in competition with the Company’s products or the Company was in the process of developing at termination.
 
On December 12, 2014, the Board of Directors authorized an amendment to Dr. Helson’s employment agreement to provide that: (A) upon successful completion of Phase I trials for anti-Ebola testing in Africa paid for by the United States Army Medical Research Institute of Infectious Diseases (“USAMRIID”), exclusive of the cost of drug products and shipping, Dr. Helson would receive options to purchase 300,000 shares of Common Stock exercisable at then current fair market value and a cash bonus of $75,000, and (B) upon successful completion of Phase I trials in Vienna, Austria for the lead anti-QT prolongation drugs (Moxifloxacin) for liposomes Dr. Helson would receive additional options to purchase 300,000 shares of Common Stock exercisable at then current fair market value and a cash bonus of $25,000.
 
Scientific Advisory Board
 
Members of the Scientific Advisory Board (SAB) are reimbursed for reasonable expenses incurred in connection with travel to attend SAB meetings.  We expect a maximum of one SAB meeting will be held per year.  Advisors will be paid $2,000 for attending each meeting called by SignPath.  Options to purchase common shares of SignPath may be made available to the advisors under the 2009 Option Plan.  On December 10, 2014, the Compensation Committee of the Board awarded Dr. Peter Sordillo options to purchase 25,000 shares of Common Stock at $2.00 per share under the plan.
 
The following table sets forth, with respect to the Company’s fiscal years ended December 31, 2014 and 2013, all compensation earned by each person who is required to be listed pursuant to Item 402(m)(2) of Regulation S-K.
 
Name and
Principal 
Position
Year
 
Salary ($)
   
Bonus($)
   
Stock
Awards
($)(1)
   
Option
Awards
($)
 
Non-Equity
Incentive Plan
Compensation ($)
 
All Other
Compensation($)(5)
Total
($)
 
                                                           
Lawrence Helson
2014
 
$
200,000
     $
30,000
  (2)    $
-
    $
162,580
  (3)   $
-
    $
20,300
(4)  
$
412,880
 
President and Chief
Executive Officer
2013
 
$
96,000
     $
-
   
 $
-
    $
104,000
(5)   $
-
    $
-
   
$
304,000
 
 
(1)           Under Dr. Helson’s employment contract he received a base salary of $204,000 per annum of which he received $200,000 in 2013 and 2014.
 
(2)           A discretionary cash bonus of $30,000 was authorized by the Board on December 12, 2014, in consideration of additional services rendered by Dr. Helson during 2014.
 
(3)           On May 1, 2014, the Company issued 200,000 options to Dr. Helson under the 2009 plan. The options have an exercise price of $0.85 per share and have a life of five years. The options vest immediately on grant date. The Company valued these options using the Black-Scholes option pricing model totaling $162,580 under the following assumptions: $0.85 stock price, $1.25 exercise price, 5 years to maturity, 415.87% volatility, 1.66% risk free rate.
 
(4)           Pursuant to the terms of Dr. Helson’s employment agreement, the Compensation Committee of the Board of Directors authorized the reimbursement of an aggregate of approximately $20,300 for Medicare payments deducted from Dr. Helson’s salary from the beginning of his employment by the Company.
 
(5)           On February 20, 2013, Dr. Helson agreed to waive $104,000 of his accrued $200,000 salary for 2012.  In exchange for waiving this accrued salary, the Company issued Dr. Helson options to purchase 200,000 shares of Common Stock exercisable at $0.85 per share. The Company valued these options using the Black-Scholes option pricing model totaling $104,000 under the following assumptions: $0.85 stock price, $0.85 exercise price, 5 years to maturity, 626% volatility, .35% risk free rate.
 
Director’s Compensation
 
Members of the Board of Directors are reimbursed for reasonable expenses incurred in connection with travel to attend board meetings.   Options to purchase 60,000 shares of Common Stock of SignPath were granted to each of Jack Levine and Arthur Bollon, independent directors, under the 2009 Option Plan for 2012 exercisable for five (5) years at $0.85 per share.  An additional 60,000 options were granted to each of Jack Levine and Arthur Bollon, which vested in quarterly increments during 2013 and are exercisable for five (5) years at $1.25 per share.  An additional 30,000 options were granted to each of Jack Levine and Arthur Bollon on May 1, 2014 which vest in quarterly increments during 2014 and are exercisable for five (5) years at $1.25 per share.  No cash compensation has been paid to directors.  See “2009 Employee Stock Incentive Plan” below.
 
 
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Pursuant to the terms of a Letter Agreement dated July 12, 2010, Jack Levine was granted options to purchase 100,000 shares of common stock at $0.85 per share upon his joining the Board of Directors.  The option vested in three equal installments on each of the first three anniversary dates of the date of grant and is exercisable for ten (10) years from the date of grant.  He also received 30,000, 40,000, 40,000, 40,000 and 40,000 restricted shares of Common Stock on December 28, 2010, December 22, 2011, February 20, 2013, May 1, 2014 and  January 1, 2015, in consideration of consulting and accounting services as chairman of the Company’s Audit Committee.  He will be reimbursed for reasonable expenses incurred, however will not receive any other cash compensation.
 
2009 Employee Stock Incentive Plan
 
The Company’s 2009 Employee Stock Incentive Plan (the “2009 Option Plan”) was adapted by the Company’s Board of Directors on February 9, 2009 in order to motivate participants by means of stock options and restricted stock to achieve the Company’s long-term performance goals and enable our employees, officers, directors and consultants to participate in our long term growth and financial success. The 2009 Plan, which is administered by our Board of Directors, authorizes the issuance of a maximum of 1,171,630 shares of our common stock (as of January 1, 2015), which may be authorized and unissued shares or treasury shares.  Employee options shall be deemed Incentive Stock Options (as defined in the 2009 Option Plan) to the maximum extent permitted by Section 422 of the Internal Revenue Code including a five-year limit on exercise for 10% or greater stockholders with any excess grant to the above individuals over the limits set by Section 422 being Non-Qualified Stock Options as defined in the 2009 Option Plan. Both the Incentive Stock Options or any Non-Qualified Stock Options must be granted at an exercise price of not less than the fair market value of shares of common stock at the time the option is granted and Incentive Stock Options granted to 10% or greater stockholders must be granted at an exercise price of not less than 110% of the fair market value of the shares on the date of grant. If any award under the 2009 Plan terminates, expires unexercised, or is cancelled, the shares of common stock that would otherwise have been issuable pursuant thereto will be available for issuance pursuant to the grant of new awards. The 2009 Plan will terminate on February 9, 2019.  An aggregate of 400,000 options have been granted under the 2009 Plan to independent directors of the Company 400,000 options to the Company's CEO 30,000 options to the Company’s outside law firm, and 25,000 options to a member of the Scientific Advisory Board See “Director’s Compensation” above.
 
PRINCIPAL STOCKHOLDERS
 
The following table sets forth certain information regarding the beneficial ownership of the Company’s common stock and convertible preferred stock (“Voting Stock”) as of date of this Prospectus, and as adjusted for this Offering, by (i) each person which is known by the Company to beneficially own more than 5% of the Company’s common stock, (ii) by each of the Company’s directors, (iii) by each executive officer of the Company, and (iv) by all executive officers and directors as a group.
 
The address of each of the persons listed below, unless otherwise noted, is c/o SignPath Pharma Inc., 3477 Corporate Parkway, Suite 100, Center Valley, PA 18034.
 
Name of Beneficial Owner
Number of
 Shares of
Common
Stock
 Beneficially
Owned (1)
     
Percentage of
Common Stock
 and Preferred
Stock Beneficially
 Owned
Before
 Offering (2)
 
             
Dr. Lawrence Helson
2,710,000
(3
)
   
10.9
%
               
Dr. Arthur Bollon
950,000
(4
)
   
3.8
%
               
Jack Levine
440,000
(4
(5)
   
1.8
%
               
Bruce Meyers (6)
5,914,503
(7
)
   
23.7
%
               
Imtiaz Khan (6)(8)
2,450,000
       
9.6
%
               
All Executive Officers and Directors as a Group (3 persons)
4,100,000
       
16.2
%
 
 
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(1) Except as otherwise noted in the footnotes to this table, the named person owns directly and exercises sole voting and investment power over the shares listed as beneficially owned by such person. Includes any securities that such person has the right to acquire within sixty days pursuant to options, warrants, conversion privileges or other rights. As of the date of this Prospectus, there were 14,163,887 shares of our common stock issued and outstanding. As of that date: (i) 1,171,630 shares of common stock were authorized for issuance under our 2009 Option Plan of which 855,000 options had been granted; (ii) approximately 3,831,576 shares of our common stock were reserved for issuance pursuant to conversion of Series A Preferred Stock; (iii) approximately 3,831,576 shares were reserved for issuance pursuant to exercise of Class A Warrants to purchase common stock; (iv) 368,894 shares of our common stock were reserved for issuance pursuant to the issuance of shares in payment of liquidated damages concerning registration rights; (v) 2,525,842 shares of Common Stock were reserved for issuance pursuant to conversion of Series B Preferred Stock; (vi) 2,525,842 shares of Common Stock were reserved for issuance pursuant to exercise of Class B Warrants; (vii) 4,000,000 shares of Common Stock were reserved for issuance pursuant to conversion of Series C Preferred Stock; (viii) 2,000,000 shares of Common Stock were reserved for issuance pursuant to exercise of Class C Warrants; (ix) 160,000 shares of Common Stock were reserved for issuance pursuant to conversion of outstanding shares of Series D Preferred Stock; (x) 40,000 shares of Common Stock were reserved for issuance pursuant to exercise of Class D Warrants; (xi) there were Placement Agent Warrants to purchase approximately 3,107,203 shares of common stock pursuant to the Units sold in the 2008 - 2014 Private Placements; and (xii) 800,000 shares issuable upon exercise of vendor warrants granted in 2013 and 2014.
 
(2) As of the date of this Prospectus, based on an aggregate of 34,681,305 voting shares, consisting of 14,163,887 shares of Common Stock, 3,831,576 shares of Common Stock issuable upon conversion of Series A Preferred Stock, 2,525,842 shares of Common Stock issuable upon conversion of Series B Preferred Stock, 4,000,000 shares of common stock issuable upon conversion of Series C Preferred Stock, and 160,000 shares of Common Stock issuable upon conversion of Series D Preferred Stock.
 
(3) Dr. Helson disclaims beneficial ownership of an aggregate of 90,000 shares of Common Stock gifted for estate planning purposes.  Includes options to purchase 200,000 shares of Common Stock granted on February 20, 2013, in lieu of $104,000 of accrued compensation for 2012 and options to purchase 200,000 shares of Common Stock granted on May 1, 2014.
 
(4) Includes options to purchase: (a) 60,000 shares of Common Stock issuable at $0.85 per share for 2012 compensation as an independent director, (b) 60,000 shares of Common Stock, issuable at $1.25 per share for 2013 compensation granted on February 20, 2013 and (c) 30,000 shares of Common Stock issuable at $1.25 per share for 2014 compensation granted on May 1, 2014.
 
(5) Includes options to purchase 100,000 shares of common stock issuable at $0.85 per share upon his joining the board of directors in July 2010 are currently exercisable.
 
(6) The address of each of these persons is 45 Broadway, 2nd Fl., New York, NY 10006.
 
(7) Bruce Meyers is the General Partner of Meyers Investments Family Limited Partnership and has the power to vote and dispose of the shares, consisting of; 5,015,865 shares of Common Stock, 449,418 shares issuable upon conversion of 381,665 shares of Series A Preferred Stock and 449,220 shares issuable upon exercise of Class A Warrants.  Does not include 2,621,851.22 shares of common stock issuable upon exercise of Placement Agent Warrants held by Meyers Investments Family Limited Partnership under blocking amendments pursuant to which the holder must give at least 61 days prior notice to the Company prior to any exercise if the holder would beneficially own in excess of either 4.99% or 9.99% of the outstanding common stock of the Company.  
 
(8) Mr. Khan is Vice President of Meyers Associates L.P. and owns 1% of Meyers Securities Corp., the parent of Meyers Associates L.P.
 
Unless otherwise indicated in the foregoing table (or the footnotes thereto), the persons named in the table have sole voting and dispositive power with respect to the shares of the Company’s common stock and/or options owned by such person, subject to community property laws where applicable.
 
 
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
As described elsewhere in this Prospectus, the Company, Meyers Securities Corp. and Meyers Associates LP, the placement agent for its preferred stock offerings, have several relationships and related transactions.  Mr. Bruce Meyers, the Principal and Chief Executive Officer of Meyers Securities Corp. and Meyers Associates LP, is a founder of the Company.  Mr. Meyers, as a principal stockholder of the Company’s common stock as General Partner of Meyers Investments Family Limited Partnership, has influence in the affairs and operations of the Company which may present a conflict of interest between the Company and the Placement Agent.  A potential conflict of interest may arise if Mr. Meyers recommends and/or implements a transaction with the placement agent on less favorable terms than those available through a third party. All activities and influence of Mr. Meyers regarding Company affairs have consisted of corporate finance and capital formation as the Company's investment banker, including, but not limited to, advice on various potential financing transactions, besides those with the Company's placement agent, joint-ventures and other transaction with industry partners.   (See "Risk Factors").
 
During fiscal 2011, the Company sold 418.5 Units (the same as described in the prior paragraph).  The Company also sold 1,030 Units of Series B Preferred Stock. Each Unit consists of one share of a 6.5% Series B Convertible Preferred Stock convertible into 1,177 shares of common stock on the same terms described above plus one warrant to purchase 1,177 shares of common stock at $1.27 per share.  The Series B Units were sold to 13 different investors.  During Fiscal 2011 Meyers Associates L.P., received aggregate sales commissions of 10% ($144,850) of the gross proceeds of $1,448,500 from the sale of Units, as well as a non-accountable expense allowance equal to 3% of proceeds of the offering, and a Unit Purchase Option (subsequently transferred to Meyers Securities Corp.) to purchase 15% of the Units sold in the offering.
 
During fiscal 2012, the Company sold 1,116 Units of Series B Preferred Stock at $1,000 per Unit, to 17 different investors for aggregate proceeds of $1,116,000.  Meyers Associates, L.P. received sales commission of 10% ($111,600) of the gross proceeds from the sale of Units as well as a non-accountable expense allowance equal to 3% of the gross proceeds of the offering and a Unit Purchase Option (subsequently transferred to Meyers Securities Corp.) to purchase 15% of the Units sold in the offering.
 
During fiscal 2013, the Company sold 3,380 Units of Series C Preferred Stock at $1,000 per Unit, to nine different investors for aggregate proceeds of $3,380,000.  Each Unit consists of one share of a 6.5% Series C Convertible Preferred Stock.  Meyers Associates L.P. received sales commissions of 10% ($338,000) of the gross proceeds of the sale of Units, as well as a non-refundable expense allowance equal to 3% of the gross proceeds of the Offering and a Unit Purchase Option (subsequently transferred to Meyers Securities Corp.) to purchase 20% of the Units sold in the Offering.
 
During the period from January 1, 2014 through June 18, 2014, the Company sold an aggregate of 1,620 Units of Series C Preferred Stock at $1,000 per Unit, to eight (8) different investors for aggregate proceeds of $1,620,000.  Meyers Associates L.P. received sales commissions of 10% ($162,000) of the gross proceeds of the sale of Units, as well as a non-refundable expense allowance equal to 3% of the gross proceeds of the Offering and a Unit Purchase Option to purchase 20% of the Units sold in the Offering
 
During the period from October 31, 2014 to November 26, 2014, the Company sold an aggregate of 320 Units of Series D Preferred Stock at $1,000 per Unit, to four (4) different investors for aggregate proceeds of $320,000.  Meyers Associates L.P. received sales commissions of 10% ($32,000) of the gross proceeds of the sale of Units, as well as a non-accountable expense allowance equal to 3% of the gross proceeds of the offering and a Unit Purchase Option to purchase 20% of the Units sold in the offering.
 
On December 22, 2011, the  Board of Directors awarded (i) 150,000 restricted shares of Common Stock to Dr. Helson in exchange for his forfeiture of approximately $104,000 in accrued and unpaid salary, and an additional 150,000 shares of Common Stock in exchange for his forfeiture of bonus compensation through December 31, 2012; (ii) 200,000 restricted shares of Common Stock to Meyers Securities Corp. for administrative functions performed for the Company which is without staff; (iii) 30,000 restricted shares of Common Stock to Jack Levine, who performed various tasks without compensation as Chairman of the Audit Committee.  He also received 40,000 restricted shares of Common Stock on December 22, 2011 and February 20, 2013 in consideration of consulting and accounting services as Chairman of the Audit Committee.
 
 
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On February 20, 2013, as amended on December 10, 2014, the Board of Directors authorized: (a) a new three-year employment agreement for Dr. Helson described above under “Executive Compensation”, and (b) options to purchase 60,000 shares of Common Stock to each of Jack Levine and Arthur Bollon, independent directors, for 2012 compensation exercisable at $0.85 per share for five years and 60,000 shares of Common Stock for 2013 compensation exercisable at $1.25 per share for five years.
 
On May 1, 2014, the Board of Directors authorized:  (a) options to purchase 200,000 shares of Common Stock to Lawrence Helson, CEO, exercisable at $1.25 per share for ten years, and (b) options to purchase 30,000 shares of Common Stock to each of Jack Levine and Arthur Bollon, independent directors, for 2014 compensation exercisable at $1.25 per share for five (5) years.
 
See "Executive Compensation" for the terms of the Company's Employment Agreement with Dr. Lawrence Helson, its Chief Executive Officer.
 
Meyers Associates, Bruce Meyers, and Imtiaz Khan, principals of Meyers Associates, L.P. (collectively, the “Principals”), are subject to pending disciplinary proceeding from the Financial Industry Regulatory Authority, Inc. (“FINRA”).  On October 6, 2014, FINRA filed a complaint (the “Complaint”) alleging, among other things, the violation of certain rules of FINRA and the National Association of Securities Dealers and federal securities laws in connection with Meyers’ prior offerings of the Company’s securities.  Meyers and the Principals have answered the Complaint which they maintain is without merit and that they will contest the enforcement action vigorously.  For more information regarding the Complaint, see the Risk Factor titled “Meyers Associates, L.P. and its principals are subject to disciplinary proceedings from FINRA in connection with, among other things, previous offerings of the Company’s securities.”
 
Otherwise, none of our directors or officers, nor any person who beneficially owns, directly or indirectly, shares carrying more than 5% of the voting rights attached to all of our outstanding shares, nor any promoter, nor any relative or spouse of any of the foregoing persons has any material interest, direct or indirect, in any presently proposed transaction which, in either case, has or will materially affect us.
 
Our management is involved in other business activities and may, in the future, become involved in other business opportunities. If a specific business opportunity becomes available, such persons may face a conflict in selecting between our business and their other business interests. In the event that a conflict of interest arises at a meeting of our directors, a director who has such a conflict will disclose his interest in a proposed transaction and will abstain from voting for or against the approval of such transaction.
 
SELLING STOCKHOLDERS
 
This offering consists of an aggregate of 23,387,488 shares of our common stock consisting of:  1,257,500 shares issued to retail accredited investors in a bridge financing (the “Bridge Shares”), 3,382,357 2,525,842 and 4,000,000 shares of common stock issuable upon conversion of Series A, B, and C Convertible Preferred Stock, respectively, sold to retail accredited investors in private equity offerings since 2008; (ii) 1,206,387 shares issued to Series A Preferred Stockholder for accrued dividends through September 30, 2014; (iii) 3,382,357, 2,525,842 and 2,000,000 shares issued upon exercise of outstanding Class A, B and C Warrants, respectively; and (iv) 3,107,203 shares issuable upon exercise of outstanding Placement Agent Warrants, all of which 23,387,488 shares of common stock may be offered for sale and sold pursuant to this prospectus by the selling stockholders.  The shares are to be offered by and for shares of common stock the respective amounts of the selling stockholders.  We have agreed to register all of the shares under the Securities Act for resale by the selling stockholders and to pay all of the expenses in connection with such registration and sale of the shares, other than underwriting discounts and selling commissions and the fees and expenses of counsel and other advisors to the selling stockholders.  We will not receive any proceeds from the sale of the shares by the selling stockholders, other than the exercise price of the Warrants.
 
Information with respect to the selling stockholders and the shares of our common stock held by them and those shares being offered for sale pursuant to this prospectus is set forth in the following table.  None of the selling stockholders has had any material relationship with us within the past three years, except as noted above or in the notes to the following table.
 
 
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Selling Stockholder
 
Number of Shares
of Common Stock
Owned Prior to
Offering (1)
   
Number of Outstanding
Shares of
Common Stock and Shares
Underlying
Preferred Stock and
Warrants Being
Offered for Sale(2)
   
 
Outstanding
 Dividend Shares
   
Number of
Shares of
Common Stock
Owned After
Offering
   
Amount and Nature
of Beneficial Ownership
Before and After the
Sale of the Shares
Being Offered
Percentage(3)
 
                           
Before
   
After
 
6 Lee Family Trust
   
343,763
(4)
   
330,134
     
13,629
     
-
     
1.4
%
   
-
 
Abraham J. Sultan
   
96,638
(5)
   
82,390
     
14,248
     
-
     
*
     
-
 
Ajaz H. Jafri
   
117,700
(6)
   
117,700
     
-
     
-
     
*
     
-
 
Albert B. Erwin, Jr.
   
620,800
(7)
   
620,800
     
-
     
-
     
2.5
%
   
-
 
Allam Family LP
   
131,518
(8)
   
117,700
     
13,818
     
-
     
*
     
-
 
Amin Adjmi
   
69,027
(9)
   
58,850
     
10,177
     
-
     
*
     
-
 
Amin J. Tebele
   
138,054
(10)
   
117,700
     
20,354
     
-
     
*
     
-
 
Barbara Mishan
   
396,312
(11)
   
353,100
     
43,212
     
-
     
1.6
%
   
-
 
Brian Miller
   
198,422
(12)
   
175,586
     
22,836
     
-
     
*
     
-
 
Curtis Cox
   
162,000
(13)
   
162,000
     
-
     
-
     
*
     
-
 
Dale Bearden
   
200,000
(14)
   
150,000
     
-
     
50,000
     
*
     
*
 
Dale Feitz
   
68,483
(15)
   
58,850
     
9,633
     
-
     
*
     
-
 
Daphne Ang-Eyg Papapanagiotou
   
117,700
(16)
   
117,700
     
-
     
-
     
*
     
-
 
David J. Baron
   
800,800
(17)
   
800,800
     
-
     
-
     
3.2
%
   
-
 
Donald Mudd Jr. Revocable Trust
   
250,276
(18)
   
235,400
     
14,876
             
*
     
-
 
Eric Fessier
   
198,422
(19)
   
175,586
     
22,836
     
-
     
*
     
-
 
Erik Meinikheim
   
10,000
(20)
   
10,000
     
-
     
-
     
*
     
-
 
Estate of Mark Shnitkin
   
195,553
(21)