x
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QUARTERLY REPORT UNDER SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934.
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¨
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TRANSITION REPORT UNDER SECTION
13 OR 15(d) OF THE EXCHANGE
ACT
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California
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91-2021600
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(State
or Other Jurisdiction of Organization)
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(IRS
Employer Identification
Number)
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33065
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(Zip
Code)
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Large
accelerated filer ¨
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Accelerated
filer ¨
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Non-accelerated
filer ¨
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Smaller
reporting company x
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PART
I. FINANCIAL INFORMATION
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3
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Item
1. Financial Statements
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3
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Condensed
Consolidated Balance Sheets as of March 31, 2010 (Unaudited)
and December 31, 2009
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3
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Condensed
Consolidated Statements of Operations for the Three Months Ended March 31,
2010 and 2009 (Unaudited)
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4
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Condensed
Consolidated Statements of Cash Flows for the three months ended March 31,
2010 and 2009 (Unaudited)
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5
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Notes
to Condensed Consolidated Financial Statements (Unaudited)
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6
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Item
2. Management’s Discussion and Analysis of Financial Condition and Results
of Operations
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11
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Item
3. Quantitative and Qualitative Disclosures About Market
Risk
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16
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Item
4. Controls and Procedures
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16
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PART
II. OTHER INFORMATION
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17
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Item
1. Legal Proceedings
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17
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Item
1A. Risk Factors
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17
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Item
2. Unregistered Sales of Equity Securities and Use of
Proceeds
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17
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Item
3. Defaults Upon Senior Securities
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17
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Item
5. Other Information
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17
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Item
6. Exhibits
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18
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March 31,
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December 31,
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|||||||
2010
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2009
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(Unaudited)
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ASSETS
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||||||||
Current
assets:
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Cash
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$ | 242,820 | $ | 802,875 | ||||
Accounts
receivable
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491,674 | 239,583 | ||||||
Inventory
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300,965 | 165,786 | ||||||
Prepaid
expenses
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48,267 | 23,290 | ||||||
Total
current assets
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1,083,726 | 1,231,534 | ||||||
Property
and equipment, net
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64,250 | 12,369 | ||||||
Other
assets
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74,069 | 8,803 | ||||||
TOTAL
ASSETS
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$ | 1,222,045 | $ | 1,252,706 | ||||
LIABILITIES
AND STOCKHOLDERS' DEFICIT
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||||||||
Current
liabilities:
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||||||||
Accounts
payable
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$ | 358,409 | $ | 104,223 | ||||
Accrued
expenses and other liabilities
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958,048 | 960,548 | ||||||
Due
to officers
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1,164,570 | 1,252,385 | ||||||
Other
loans payable
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80,000 | 80,000 | ||||||
Total
current liabilities
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2,561,027 | 2,397,156 | ||||||
Stockholders'
deficit:
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||||||||
Common
stock, $0.001 par value, 2,000,000,000 shares authorized; 272,925,232 and
270,425,232 shares issued and outstanding, respectively
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272,926 | 270,426 | ||||||
Additional
paid-in capital
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25,261,717 | 25,157,967 | ||||||
Accumulated
deficit
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(26,873,625 | ) | (26,572,843 | ) | ||||
Total
stockholders' deficit
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(1,338,982 | ) | (1,144,450 | ) | ||||
TOTAL
LIABILITIES AND STOCKHOLDERS' DEFICIT
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$ | 1,222,045 | $ | 1,252,706 |
Three Months Ended March 31,
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||||||||
2010
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2009
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Net
sales
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$ | 864,424 | $ | 18,230 | ||||
Cost
of sales
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402,542 | 260 | ||||||
Gross
profit
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461,882 | 17,970 | ||||||
Costs
and expenses:
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Salaries
and employee benefits
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257,433 | 127,226 | ||||||
Selling,
general and administrative - including stock based compensation of
$106,250 and $20,000
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437,229 | 125,116 | ||||||
Research
and development
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54,813 | 70,220 | ||||||
Interest
expense
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13,189 | 16,321 | ||||||
Total
costs and expenses
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762,664 | 338,883 | ||||||
Net
loss
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$ | (300,782 | ) | $ | (320,913 | ) | ||
Per
share information - basic and diluted:
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||||||||
Loss
per common share
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$ | (0.00 | ) | $ | (0.00 | ) | ||
Weighted
average common shares outstanding
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271,369,676 | 211,276,482 |
Three
Months Ended March 31,
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||||||||
2010
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2009
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Net
cash used in operating activities
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$ | (406,560 | ) | $ | (277,359 | ) | ||
Cash
flows from investing activities:
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Acquisition
of property and equipment
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(53,495 | ) | - | |||||
Net
cash used in investing activities
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(53,495 | ) | - | |||||
Cash
flows from financing activities:
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Common
stock issued for cash
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- | 35,000 | ||||||
Repayment
of notes payable
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- | - | ||||||
Repayment
of stockholder loans
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(100,000 | ) | - | |||||
Loans
from stockholders
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- | 249,000 | ||||||
Net
cash (used in) provided by financing activities
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(100,000 | ) | 284,000 | |||||
Net
(decrease) increase in cash
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(560,055 | ) | 6,641 | |||||
Cash
- beginning of period
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802,875 | 50,910 | ||||||
Cash
- end of period
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$ | 242,820 | $ | 57,551 | ||||
Supplemental
disclosure of cash flow information and non-cash financing
activities:
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Cash
paid for interest
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$ | 1,004 | $ | 2,761 | ||||
Cash
paid for income taxes
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$ | - | $ | - | ||||
Stock
issued for deferred compensation
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$ | 1,275,000 | $ | - | ||||
Common
stock issued for services
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$ | - | $ | 20,000 |
Pronouncement
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Issued
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Title
|
||
ASU
No. 2010-01
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January
2010
|
Equity
(Topic 505): Accounting for Distributions to Shareholders with
Components of Stock and Cash – a consensus of the FASB Emerging Issues
Task Force
|
||
ASU
No. 2010-02
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January
2010
|
Consolidation
(Topic 810): Accounting and Reporting for Decreases in Ownership of
a Subsidiary – a Scope Clarification
|
||
ASU
No. 2012-03
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January
2010
|
Extractive
Activities – Oil and Gas (Topic 932): Oil and Gas Reserve Estimation and
Disclosures
|
||
ASU
No. 2010-04
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January
2010
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Accounting
for Various Topics: Technical Corrections to SEC
Paragraphs
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||
ASU
No. 2010-05
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January
2010
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Compensation
- Stock Compensation (Topic718): Escrowed Share Arrangements and the
Presumption of Compensation
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||
ASU
No. 2010-06
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January
2010
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Fair
Value Measurements and Disclosures (Topic 820): Improving Disclosures
about Fair Value Measurements
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ASU
No. 2010-07
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January
2010
|
Not-for-Profit
Entities (Topic 958): Not-for-Profit Entities – Mergers and
Acquisitions
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||
ASU
No. 2010-08
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February
2010
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Technical
Corrections to Various Topics
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||
ASU
No. 2010-09
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February
2010
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Subsequent
Events (Topic 855): Amendments to Certain Recognition and Disclosure
Requirements
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||
ASU
No. 2010-10
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February
2010
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Consolidation
(Topic 810): Amendments for Certain Investment Funds
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||
ASU
No. 2010-11
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March
2010
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Derivatives
and Hedging (Topic 815): Scope Exception Related to Embedded Credit
Derivatives
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||
ASU
No. 2010-12
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April
2010
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Income
Taxes (Topic 740): Accounting for Certain Tax Effects of the 2010 Health
Care Reform Acts (SEC Update)
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||
ASU
No. 2010-13
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April
2010
|
Compensation—Stock
Compensation (Topic 718): Effect of Denominating the Exercise Price of a
Share-Based Payment Award in the Currency of the Market in Which the
Underlying Equity Security Trades—a consensus of the FASB Emerging Issues
Task Force
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||
ASU
No. 2010-14
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April
2010
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Accounting
for Extractive Activities—Oil & Gas—Amendments to Paragraph
932-10-S99-1 (SEC Update)
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||
ASU
No. 2010-15
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April
2010
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Financial
Services—Insurance (Topic 944): How Investments Held through Separate
Accounts Affect an Insurer’s Consolidation Analysis of Those Investments—a
consensus of the FASB Emerging Issues Task Force
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||
ASU
No. 2010-16
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April
2010
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Entertainment—Casinos
(Topic 924): Accruals for Casino Jackpot Liabilities—a consensus of the
FASB Emerging Issues Task Force
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||
ASU
No. 2010-17
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April
2010
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Revenue
Recognition—Milestone Method (Topic 605): Milestone Method of Revenue
Recognition—a consensus of the FASB Emerging Issues Task
Force
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||
ASU
No. 2010-18
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April
2010
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Receivables
(Topic 310): Effect of a Loan Modification When the Loan is Part of a Pool
That is Accounted for as a Single Asset—a consensus of the FASB Emerging
Issues Task Force
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||
ASU
No. 2010-19
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May
2010
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Foreign
Currency (Topic 830): Foreign Currency Issues: Multiple Foreign Currency
Exchange Rates
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·
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Cobroxin,
an over-the-counter pain reliever designed to treat moderate to severe
(Stage 2) chronic pain; and
|
|
·
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Nyloxin
OTC (Stage 2 Pain) and Nyloxin Rx (Stage 3 Pain), stronger versions
of Cobroxin.
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·
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CVS
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·
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Walgreens
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·
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Winn
Dixie
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·
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Support
Plus
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·
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eVitamins
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·
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Duane
Reade
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·
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Overstock.com
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·
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Kerr
Drug
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·
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Meijer
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·
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Quick2You.com
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·
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Johnson
Smith & Co
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·
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Benchmark
Brands
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·
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Hannaford
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·
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Kinney
Drug
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·
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Value
Drug
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·
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Amerimark
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·
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Vitamin
World
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·
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Drugstore.com
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·
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SweetBay
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·
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CDMA
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·
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Amazon.com
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·
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Dr.
Leonard's
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·
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safe
and effective;
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·
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all
natural;
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·
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long-acting;
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·
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easy
to use;
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·
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non-narcotic;
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·
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non-addictive;
and
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·
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analgesic
and anti-inflammatory
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·
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Whether
Cobroxin, Nyloxin OTC, and Nyloxin Rx will be accepted by consumers in
retail establishments where it is
sold;
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·
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Because
Cobroxin is a novel approach to the over-the-counter pain market, whether
it will be accepted by consumers over conventional over-the-counter pain
products;
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·
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Whether
our international drug applications will be approved and in how many
countries;
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·
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Whether
we will be successful in marketing Cobroxin, Nyloxin OTC, and Nyloxin Rx
in our target markets, including whether we will create nationwide and
international visibility for our
products;
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·
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Whether
our drug delivery system, i.e. oral spray and gel, will be accepted by
consumers who may prefer a pain pill delivery
system;
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·
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Whether
competitors’ pain products will be found to be more attractive to
consumers;
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·
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Whether
we successfully develop and commercialize products from our research and
development activities.
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·
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If
we fail to compete effectively in the intensely competitive biotechnology
area, our operations and market position will be negatively
impacted.
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·
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If
we fail to successfully execute our planned partnering and out-licensing
of products or technologies, our future performance will be adversely
affected.
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·
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The
recent economic downturn and related credit and financial market crisis
may adversely affect our ability to obtain financing, conduct our
operations and realize opportunities to successfully bring our
technologies to market.
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·
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Biotechnology
industry related litigation is substantial and may continue to rise,
leading to greater costs and unpredictable
litigation
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·
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If
we fail to comply with extensive legal/regulatory requirements affecting
the healthcare industry, we will face increased costs, and possibly
penalties and business losses.
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·
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An
obligation under a guarantee
contract.
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·
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A
retained or contingent interest in assets transferred to the
unconsolidated entity or similar arrangement that serves as credit,
liquidity or market risk support to such entity for such
assets.
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·
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Any
obligation, including a contingent obligation, under a contract that would
be accounted for as a derivative
instrument.
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·
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Any
obligation, including a contingent obligation, arising out of a variable
interest in an unconsolidated entity that is held by us and material to us
where such entity provides financing, liquidity, market risk or credit
risk support to, or engages in leasing, hedging or research and
development services with us.
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Exhibit No.
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Title
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31.1
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Certification of
Chief Executive Officer and Chief Financial Officer pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.
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32.1
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Certification
of Chief Executive Officer and Chief Financial Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
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Dated: January
5, 2011
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NUTRA
PHARMA CORP.
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Registrant
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/s/ Rik J. Deitsch
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Rik
J. Deitsch
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Chief
Executive Officer/Chief Financial Officer
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