10-Q 1 gthr_10q.htm FORM 10-Q gthr_10q.htm

 

 UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 

 

For the Quarterly Period Ended March 31, 2022

 

      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 

 

FOR THE TRANSITION PERIOD FROM ______ TO _________

 

000-27237

Commission File Number:

 

gthr_10qimg2.jpg

    

GeneThera, Inc.

(Exact name of registrant as Specified in its Charter)

 

Nevada

 

65-0622463

(State or Other Jurisdiction of

 

(Internal Revenue Service

Incorporation or Organization)

 

Employer Identification Number)

 

3051 W. 105th Ave. #350251, Westminster, CO

 

80035

(Address of Principal Executive Offices)

 

(Zip Code)

 

Registrant’s telephone number, including area code:

(720) 587-5100

 

Securities registered pursuant to Section 12(b) of the Exchange Act:

None

 

Securities registered pursuant to Section 12(g) of the Exchange Act:

Common Stock, $0.001 per share

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-Q or any amendment to this Form 10-Q. Yes ☒      No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, and accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer 

Accelerated filer 

Non-accelerated Filer 

Smaller reporting company 

 

 

Emerging growth company 

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act. Yes No ☒

 

State the number of shares of the issuer’s common stock outstanding, as of the latest practicable date: 34,083,319 shares of common stock issued and outstanding as of May 17, 2022.

 

 

 

 

PART I – FINANCIAL INFORMATION

 

FORWARD-LOOKING AND CAUTIONARY STATEMENTS

 

Sections of this Form 10-Q, including Business and Management’s Discussion and Analysis or Plan of Operation, contain “forward-looking statements”. These forward-looking statements are subject to risks and uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from the results, performance or achievements expressed or implied by the forward-looking statements. You should not unduly rely on these statements. Forward-looking statements involve assumptions and describe our plans, strategies, and expectations. You can generally identify a forward-looking statement by words such as may, will, should, would, could, plan, goal, potential, expect, anticipate, estimate, believe, intend, project, and similar words and variations thereof. This report contains forward-looking statements that address, among other things:

 

*

Our financing plans,

 

*

Regulatory environments in which we operate or plan to operate, and

 

*

Trends affecting our financial condition or results of operations, the impact of competition, the start-up of certain operations and acquisition opportunities.

 

Factors, risks, and uncertainties that could cause actual results to differ materially from those in the forward-looking statements (“Cautionary Statements”) include, among others:

 

*

Our ability to raise capital,

 

*

Our ability to execute our business strategy in a very competitive environment,

 

*

Our degree of financial leverage, risks associated with our acquiring and integrating companies into our own,

 

*

Risks relating to rapidly developing technology, and regulatory considerations,

 

*

Risks related to international economies,

 

*

Risks related to market acceptance and demand for our products and services,

 

*

The impact of competitive services and pricing, and

 

*

Other risks referenced from time to time in our SEC filings.

 

All subsequent written and oral forward-looking statements attributable to us, or anyone acting on our behalf, are expressly qualified in their entirety by the cautionary statements. We do not undertake any obligations to publicly release any revisions to any forward-looking statements to reflect events or circumstances after the date of this report or to reflect unanticipated events that may occur.

 

 

2

 

 

Item 1. Financial Statements.

 

GeneThera, Inc.

 

March 31, 2022

 

Index to the Condensed Consolidated Financial Statements

 

Condensed Consolidated Balance Sheets as of March 31, 2022 (Unaudited) and December 31, 2021

F-1

 

 

Condensed Consolidated Statements of Operations for the Three Months ended March 31, 2022 and 2021 (unaudited)

F-2

 

 

Condensed Consolidated Statements of Stockholder’s Deficit for the Three Months Ended March 31, 2022 and 2021 (unaudited)

F-3

 

 

Condensed Consolidated Statements of Cash Flows for the Three Months ended March 31, 2022 and 2021 (unaudited)

F-4

 

 

Notes to the Condensed Consolidated Financial Statements (unaudited)

F-5

 

 

3

 

 

GeneThera, Inc.

Condensed Consolidated Balance Sheets

 

 

 

March 31,

2022

 

 

December 31,

2021

 

 

 

(unaudited)

 

 

 

ASSETS

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash

 

$-

 

 

$-

 

Prepaid expenses

 

 

-

 

 

 

1,022

 

Total current assets

 

 

-

 

 

 

1,022

 

Property and equipment

 

 

 

 

 

 

 

 

Automobile & Trucks

 

 

26,400

 

 

 

26,400

 

Less: Accumulated depreciation

 

 

(22,440 )

 

 

(21,120 )

Total property and equipment, net

 

 

3,960

 

 

 

5,280

 

Other assets - Deposit

 

 

-

 

 

 

-

 

TOTAL ASSETS

 

$3,960

 

 

$6,302

 

 

 

 

 

 

 

 

 

 

LIABILITIES & STOCKHOLDERS’ DEFICIT

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable

 

$91,070

 

 

$81,070

 

Accrued expenses

 

 

7,403,460

 

 

 

7,286,651

 

Notes payable

 

 

25,800

 

 

 

25,800

 

Convertible notes payable, net of discount

 

 

64,500

 

 

 

64,500

 

Loan from shareholder

 

 

724,562

 

 

 

720,969

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

 

8,309,392

 

 

 

8,178,990

 

 

 

 

 

 

 

 

 

 

Commitments and Contingencies

 

 

-

 

 

 

-

 

Stockholders’ deficit:

 

 

 

 

 

 

 

 

Series A preferred stock, par value $0.001 per share, 20,000,000 shares authorized, 0 shares issued and outstanding, respectively

 

 

-

 

 

 

-

 

Series B preferred stock, par value $0.001 per share, 30,000,000 shares authorized, 26,038,572 shares issued and outstanding, respectively

 

 

26,039

 

 

 

26,039

 

Common stock, par value $0.001 per share, 300,000,000 shares authorized, 34,083,319 shares issued and outstanding, respectively

 

 

34,083

 

 

 

34,083

 

Common stock to be issued

 

 

53,572

 

 

 

53,572

 

Additional paid-in capital

 

 

23,985,064

 

 

 

23,985,064

 

Accumulated deficit

 

 

(32,404,191 )

 

 

(32,271,446 )

Total stockholders’ deficit of GeneThera, Inc.

 

 

(8,305,432 )

 

 

(8,172,688 )

TOTAL LIABILITIES & STOCKHOLDERS’ DEFICIT

 

$3,960

 

 

$6,302

 

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

 
F-1

Table of Contents

 

GeneThera, Inc.

Condensed Consolidated Statements of Operations

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2022

 

 

2021

 

 

 

(unaudited)

 

 

(unaudited)

 

Expenses

 

 

 

 

 

 

General and administrative expenses

 

$14,369

 

 

$86,775

 

Payroll expenses

 

 

116,500

 

 

 

116,500

 

Depreciation

 

 

1,320

 

 

 

1,320

 

Total operating expenses

 

 

132,189

 

 

 

204,595

 

Loss from operations

 

 

(132,189)

 

 

(204,595)

Other expenses

 

 

 

 

 

 

 

 

Interest expense

 

 

(556)

 

 

(1,646)

 

 

 

-

 

 

 

-

 

Total other expense

 

 

(556)

 

 

(1,646)

Other Income

 

 

 

 

 

 

 

 

 

 

 

-

 

 

 

-

 

Total other Income

 

 

-

 

 

 

-

 

Net income (loss) before income taxes

 

 

(132,745)

 

 

(206,241)

 Provision for income taxes

 

 

-

 

 

 

-

 

Net income (loss)

 

$(132,745)

 

$(206,241)

Loss per common share - Basic and diluted

 

$(0.00)

 

$(0.01)

Weighted average common shares outstanding - Basic and diluted

 

 

34,083,319

 

 

 

24,105,588

 

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

 
F-2

Table of Contents

 

GeneThera, Inc.

Condensed Consolidated Statement of Stockholders’ Deficit (unaudited)

 

Three Months Ended March 31, 2021

 

 

 

Series A

Preferred Stock

 

 

Series B

Preferred Stock

 

 

Common Stock

 

 

Additional

Paid-In

 

 

Accumulated

 

 

Stock to

 

 

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

be Issued

 

 

Total

 

Balance at December 31, 2020

 

 

-

 

 

$-

 

 

 

26,038,572

 

 

$26,039

 

 

 

24,071,255

 

 

$24,071

 

 

$23,475,776

 

 

$(31,259,962 )

 

$53,572

 

 

$(7,680,504 )

Stock issued to advisory

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,500,000

 

 

 

1,500

 

 

 

54,000

 

 

 

 

 

 

 

 

 

 

 

55,500

 

Net income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(206,241 )

 

 

-

 

 

 

(206,241 )

Balance at March 31, 2021

 

 

-

 

 

$-

 

 

 

26,038,572

 

 

$26,039

 

 

 

24,071,255

 

 

$25,571

 

 

$23,529,776

 

 

$(31,466,202 )

 

$53,572

 

 

$(7,831,245 )

 

Three Months Ended March 31, 2022

 

 

 

Series A

Preferred Stock

 

 

Series B

Preferred Stock

 

 

Common Stock

 

 

Additional

Paid-In

 

 

Accumulated

 

 

Stock to

 

 

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

be Issued

 

 

Total

 

Balance at December 31, 2021

 

 

-

 

 

$-

 

 

 

26,038,572

 

 

$26,039

 

 

 

34,083,319

 

 

$34,083

 

 

$23,985,064

 

 

$(32,271,446 )

 

$53,572

 

 

$(8,172,688 )

Net Loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(132,745 )

 

 

-

 

 

 

(132,745)

Balance at March 31, 2022

 

 

-

 

 

$-

 

 

 

26,038,572

 

 

$26,039

 

 

 

34,083,319

 

 

$34,083

 

 

$23,985,064

 

 

$(32,404,191 )

 

$53,572

 

 

$(8,305,432 )

 

See accompanying notes to the unaudited condensed consolidated financial statements.

 

 
F-3

Table of Contents

 

GeneThera, Inc.

Condensed Consolidated Statements of Cash Flows

 

 

 

For the Three Months Ended

 

 

 

March 31,

 

 

 

2022

 

 

2021

 

 

 

(unaudited)

 

 

(unaudited)

 

Cash flows from operating activities

 

 

 

 

 

 

Net loss

 

$(132,745 )

 

$(206,241 )

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

1,320

 

 

 

1,320

 

Shares issued for services

 

 

-

 

 

 

55,500

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Prepaids

 

 

 

 

 

 

 

 

Deposit

 

 

-

 

 

 

-

 

Accounts payable and accrued expenses - related parties

 

 

12,323

 

 

 

12,323

 

Accounts payable and accrued expenses

 

 

137,098

 

 

 

137,098

 

Net cash used in operating activities

 

 

(3,593)

 

 

-

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

Purchase of Fixed Asset

 

 

-

 

 

 

-

 

Net cash used in investing activities

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

 

 

Increase (decrease) loans to shareholders

 

 

3,593

 

 

 

-

 

Net cash provided by financing activities

 

 

3,593

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Net decrease (increase) in cash

 

 

-

 

 

 

-

 

Cash at the beginning of the year

 

 

-

 

 

 

-

 

Cash at the end of the year

 

$-

 

 

$-

 

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

 
F-4

Table of Contents

 

GENETHERA, INC.

March 31, 2022

Notes to the Condensed Consolidated Financial Statements

(unaudited)

 

Note 1 – Organization and nature of operations and summary of significant accounting policies

 

Organization and nature of operations

 

The consolidated financial statements include GeneThera, Inc. and its wholly owned subsidiary GeneThera, Inc. (Colorado) (collectively, the “Company”). The Company is a biotechnology company that develops molecular assays and therapeutics for the detection and treatment for COVID-19 and other zoonotic diseases.

 

Basis of Presentation – Unaudited Financial Information

 

The accompanying unaudited condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and in accordance with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) with respect to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited condensed consolidated financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company for the year ended December 31, 2021 and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC.

 

Use of estimates

 

The preparation of financial statements in accordance with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Certain prior period amounts in the consolidated financial statements and accompanying notes have been reclassified to conform to the current period’s presentation.

 

Principles of consolidation

 

The consolidated financial statements include the accounts of the Company and its subsidiary. All intercompany accounts are eliminated upon consolidation.

 

Cash and cash equivalents

 

Cash equivalents are highly liquid investments with an original maturity of three months or less.

 

Fair Value of Financial Instruments

 

For purpose of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. The carrying amount of the Company’s short-term financial instruments approximates fair value due to the relatively short period to maturity for these instruments.

 

Property and equipment, net

 

Property and equipment consist primarily of office and laboratory equipment, leasehold improvements, vehicle, and is stated at cost. Depreciation is computed on a straight-line basis over the estimated useful lives ranging from five to seven years. Leasehold improvements are amortized over the shorter of their economic lives or lease terms.

 

 
F-5

Table of Contents

 

Fair Value Measurements

 

The Company follows ASC 820-10 of the FASB Accounting Standards Codification to measure the fair value of its financial instruments and disclosures about fair value of its financial instruments. ASC 820-10 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820-10 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The three (3) levels of fair value hierarchy defined by ASC 820-10 are described below:

 

Level 1

Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.

 

 

Level 2

Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.

 

 

Level 3

Pricing inputs that are generally unobservable inputs and not corroborated by market data.

 

Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.

 

The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

 

The carrying amounts of the Company’s financial assets and liabilities, such as cash, accounts receivable, inventory, prepaid expenses and other current assets, accounts payable and accrued expenses approximate their fair values because of the short maturity of these instruments.

 

Transactions involving related parties typically cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free-market dealings may not exist.

 

Reclassifications

 

Certain prior period amounts may have been reclassified to conform to current period presentation.

 

Impairment of Long-Lived Assets

 

The Company reviews the recoverability of its long-lived assets to determine whether events or changes in circumstances occurred that indicate the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on the ability to recover the carrying value of the asset from the expected future cash flows of the related operations. If these cash flows are less than the carrying value of such asset, an impairment loss is recognized for the difference between the estimated fair value and carrying value. The measurement of impairment requires management to make estimates of these cash flows related to long-lived assets, as well as other fair value determinations.

 

Revenue recognition

 

There were no revenues as of March 31, 2022 and 2021, respectively.

 

The Company follows the FASB Accounting Standards Codification ASC 606 – Revenues from Contracts with Customers for revenue recognition. The Company considers revenue realized or realizable and earned when all the following criteria are met:

 

1)

identification of the contract with a customer;

 

2)

identification of the performance obligations in the contract;

 

3)

determination of the transaction price;

 

4)

allocation of the transaction price to the performance obligations in the contract; and

 

5)

recognition of revenue when or as a performance obligation is satisfied. Revenue is recognized when each performance obligation is satisfied by the entity. An estimate of the variable consideration or performance obligations that an entity ultimately expects to be entitled to is included in the transaction price, and revenue is recognized upon satisfaction of the related performance obligation(s). An implicit or explicit significant financing component is taken into consideration. IP licenses must be analyzed. Each contract with customers is analyzed for multiple elements if any element must stand alone.

 

 
F-6

Table of Contents

 

Leases

 

On January 1, 2019, the Company adopted ASC 842 using the modified retrospective approach and will recognize a right of use (“ROU”) asset and liability in the consolidated balance sheet when and if the Company enters into a qualifying lease agreement.

 

At contract inception, the Company determines whether an arrangement is or contains a lease and whether the lease should be classified as an operating or a financing lease. A contract is or contains a lease if the contract conveys the right to control the use of the identified asset for a period of time in exchange for consideration. Control is determined based on the right to obtain all of the economic benefits from use of the identified asset and the right to direct the use of the identified asset. ROU assets for operating leases represent the right to use an underlying asset for the lease term, and operating lease liabilities represent the obligation to make lease payments.

 

The Company has no leased laboratory space and a month-to-month office space lease. No right of use asset and liability were recorded for this lease.

 

Stock-Based Compensation

 

Stock-based compensation is accounted for under FASB ASC Topic No. 718 – Compensation – Stock Compensation. The guidance requires recognition in the financial statements of the cost of employee services received in exchange for an award of equity instruments over the period the employee is required to perform the services in exchange for the award (presumptively the vesting period). The guidance also requires measurement of the cost of employee services received in exchange for an award based on the grant-date fair value of the award. The Company accounts for non-employee share-based awards in accordance with guidance related to equity instruments that are issued to other than employees for acquisition, or in conjunction with selling, goods or services.

 

Research and development costs

 

R&D cost are currently expensed as incurred and primarily include cost associated with R&D arrangements with external parties in connection with the Company’s robotic technology project.

 

Income taxes

 

Income taxes are accounted for in accordance with the provisions of FASB ASC Topic No. 740 - Income Taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amounts expected to be realized.

 

 
F-7

Table of Contents

 

 

Basic and diluted net loss per common share

 

Basic and diluted net loss per share calculations are presented in accordance with FASB ASC Topic No. 260 – Earnings per Share and are calculated on the basis of the weighted average number of common shares outstanding during the period. Diluted per share calculations includes the dilutive effect of common stock equivalents in years with net income. As the Company is in a loss position, any calculation of the dilutive effects of the Company’s convertible securities would reduce the loss per share amount, and, as such, the Company will not perform the calculation.

 

Shipping and Handling Costs

 

The Company accounts for shipping and handling fees in accordance with paragraph 605-45-45-19 of the FASB Accounting Standards Codification. While amounts charged to customers for shipping products are included in revenues, the related costs are classified in cost of revenue as incurred.

 

Shipping and handling costs were $0 and $0 for the nine months ended March 31, 2022 and 2021, respectively.

 

Recently issued accounting pronouncements

 

Management has evaluated all recent accounting pronouncements as issued by the FASB in the form of Accounting Standards Updates (“ASU”) through the date these financial statements were available to be issued and found no recent accounting pronouncements issued, but not yet effective accounting pronouncements, when adopted, will have a material impact on the financial statements of the Company.

 

Note 2 - Going Concern

 

As reflected in the accompanying consolidated financial statements, the Company has an accumulated deficit of $32,404,191 and negative working capital of $8,309,393 as of March 31, 2022. This raises substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent on its ability to raise additional capital and implement its business plan. The consolidated condensed financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

Note 3 - Property and Equipment

 

As of March 31, 2022, the Company had a vehicle with a net book value of $3,960.

 

Note 4 - Related party transactions

 

The Company has an outstanding loan payable and accrued interest to Antonio Milici, its CEO and stockholder amounting to $673,092 as March 31, 2022 and December 31, 2021, respectively. This outstanding loan to the Company is unsecured and bears interest at 2.41%. The Company has an outstanding loan and accrued interest payable to Tannya Irizarry, its interim CFO and stockholder, amounting to $51,472 and $58,704 as of March 31, 2022 and December 31, 2021, respectively. This outstanding loan to the Company is unsecured and bears interest at 8%.

 

Tannya Irizarry owns 50% interest in GTI Corporate Transfer Agents, LLC, the Company’s transfer agent. During the three months ended March 31, 2022 and 2021, the Company made payments to GTI Corporate Transfer Agents, LLC in the amounts of $0 and $80, respectively.

 

Note 5 - Accrued expenses

 

The Company’s accrued expenses consisted of the following:

 

 

 

March 31,

2022

 

 

December 31,

2021

 

Accrued officer salaries (see below)

 

$6,075,123

 

 

$5,958,623

 

Accrued interest

 

 

95,090

 

 

 

94,534

 

Other

 

 

1,233,247

 

 

 

1,233,494

 

 

 

$7,403,460

 

 

$7,286,651

 

 

Note 6 - Convertible notes payable

 

The Company’s issued convertible notes are due on demand, bearing interest at an annual rate of 8%. The notes are convertible into shares of Company common stock at a conversion price of $0.01 to $0.05 per share. As of March 31, 2022, and December 31, 2021, the total outstanding principal and interest is $64,500.

 

As of December 31, 2020, an analysis of the principal amount of convertible notes payable that have elected conversion to common stock amounted to $366,000. The Company has ceased accruing interest on these convertible notes but continues to accrue interest on the remaining convertible notes of $64,500. The convertible notes that have elected conversion without the stock being issued have been included in ‘Accrued liabilities’ on the Balance Sheet.

  

 
F-8

Table of Contents

 

Note 7 - Shareholders’ equity

 

Preferred Stock

 

The Company has authorized 20,000,000 shares of Series A Preferred Stock, $0.001 par value, and 30,000,000 shares of Series B Preferred Stock, $0.001 par value.

 

As of March 31, 2022, and December 31, 2021, the Company had 0 shares of Series A Preferred Stock issued and outstanding, respectively.

 

As of March 31, 2022, and December 31, 2021, the Company had 26,038,572 shares of Series B Preferred Stock issued and outstanding, respectively.

 

Common stock

 

The Company has authorized 300,000,000 shares of its common stock, $0.001 par value. The Company had issued and outstanding 34,083,319 shares as of March 31, 2022 and December 31, 2021, respectively.

 

On March 18, 2021, the Company issued 1,500,000 restricted common shares to Venus Capital Fund, LLC for consulting services related to security and capital raise efforts. The Company recorded a consulting expense of $55,500.

 

Note 8 - Commitments

 

Employment Agreements

 

In January 2022 the Company renewed the five-year employment agreements with its chief executive and scientific officer and its chief administrative and financial officer. The agreements provide for compensation of $21,500 and $17,333 per month, respectively, and expires on January 31, 2027. The total accrued quarterly compensation for the periods ended March 31, 2022 and 2021 was $116,500.

 

Office Space Lease

 

The Company has a temporary office space on a month-to-month basis. No right of use asset or liability has been recorded on the balance sheet.

 

Note 9 - Subsequent events

 

The impact of COVID-19 on the Company is unknown at this time. The financial consequences of this situation cause uncertainty as to the future and its effects on the economy and the Company.

 

The Russia – Ukraine conflict is a global concern. The Company does not have any direct exposure to Russia or Ukraine through its operations, employee base, investments or sanctions. The Company does not receive goods or services sourced from those countries, does not anticipate any disruption in its supply chain and has no business relationships, connections to or assets in Russia, Belarus or Ukraine. No impairments to assets have been made due to the conflict. The global oil industry has been impacted by this situation, but the Company’s operations and business in the Middle East has not been disrupted to date. The increase in oil producing activities in the United States has benefitted the Company’s operations. We are unable at this time to know the full ramifications of the Russia – Ukraine conflict and its effects on our business.

 

Presently the Company is considering ways to apply its molecular robotic technology to address the COVID-19 pandemic.

 

As of March 31, 2022, no additional conversions of convertible notes have occurred, and no new convertible notes have been issued.

 

 
F-9

Table of Contents

 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 

 

Sections of this Form 10-Q, including the Management’s Discussion and Analysis or Plan of Operation, contain “forward-looking statements”. These forward-looking statements are subject to risks and uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from the results, performance or achievements expressed or implied by the forward-looking statements. You should not unduly rely on these statements. Forward-looking statements involve assumptions and describe our plans, strategies, and expectations. You can generally identify a forward-looking statement by words such as “may,” “will,” “should,” “would,” “could,” “plans,” “goal,” “potential,” “expect,” “anticipate,” “estimate,” “believe,” “intent,” “project,” and similar words and variations thereof. This report contains forward-looking statements that address, among other things,

 

*

Our financing plans

 

*

Regulatory environments in which we operate or plan to operate

 

*

Trends affecting our financial condition or results of operations

 

*

The impact of competition, the start-up of certain operations and acquisition opportunities.

 

Factors, risks, and uncertainties that could cause actual results to differ materially from those in the forward-looking statements (“Cautionary Statements”) include, among others,

 

*

Our ability to raise capital

 

*

Our ability to execute our business strategy in a very competitive environment

 

*

Our degree of financial leverage

 

*

Risks associated with our acquiring and integrating companies into our own

 

*

Risks relating to rapidly developing technology

 

*

Regulatory considerations

 

*

Risks related to international economies

 

*

Risks related to market acceptance and demand for our products and services

 

*

The impact of competitive services and pricing

 

*

Other risks referenced from time to time in our SEC filings

 

All subsequent written and oral forward-looking statements attributable to us, or anyone acting on our behalf, are expressly qualified in their entirety by the cautionary statements. We do not undertake any obligations to publicly release any revisions to any forward-looking statements to reflect events or circumstances after the date of this report or to reflect unanticipated events that may occur.

 

You should read the following discussion of our results and plan of operation in conjunction with the consolidated financial statements and the notes thereto appearing elsewhere in this Form 10-Q. Statements in this Management’s Discussion and Analysis or Plan of Operation that are not statements of historical or current objective fact are “forward-looking statements.”

 

 
4

 

 

OVERVIEW

 

We have developed proprietary diagnostic assays for use in the agricultural and veterinary markets. Specific assays for Chronic Wasting Disease (CWD) (among elk and deer) and Mad Cow Disease (among cattle) have been developed and are available currently on a limited basis. E. coli (predominantly cattle) and Johne’s disease (predominantly cattle and bison) diagnostics are in development. We are also working on vaccine solutions to meet the growing demands of today’s veterinary industry and tomorrow’s agriculture and healthcare industries. The Company is organized and operated both to continually apply its scientific research to more effective management of diseases and, in so doing, realize the commercial potential of molecular biotechnology.

 

Our business model is based on the development of a proprietary Molecular Robotic/AI Laboratory Platform (“MORAP”), which would combine the use of advanced robotic laboratory systems integrated with AI software systems on a global scale. Upon development, MORAP would encompass a nationwide network of interactive molecular laboratories operated using advanced integrated robotic and machine learning cloud-based software systems, which would be able to share data and interact with each other. We believe MORAP would be capable of processing millions of samples and collecting, storing and analyzing data. We believe that MORAP nationwide communications network could be accomplished through advanced cloud-based software systems, machine learning and Internet-of-Things (IoT) networks. Upon development, MORAP could be readily replicated and scaled utilizing identical instrumentation and software.

 

We have not generated significant operating revenue as of March 31, 2022. Our ability to generate substantial operating revenue will depend on our ability to develop and obtain approval for molecular assays and developing therapeutic vaccines for the detection and prevention of food contaminating pathogens, veterinary diseases, and diseases affecting human health.

 

Our independent auditors have expressed substantial doubt about our ability to continue as a going concern in their report on our consolidated financial statements as of December 31, 2021. For the three months ended March 31, 2022 and 2021, our operating losses were $132,745 and $206,241, respectively. Our current liabilities exceeded current assets by $8,309,393 and $7,840,485 as of March 31, 2022 and December 31, 2021, respectively.

 

We will require significant additional funding in order to achieve our business plan. We will attempt to raise these funds by both means of one or more private offerings of debt or equity securities. In such events, we may need immediate additional funding. Our capital requirements will depend on many factors including, but not limited to, the timing of further development of assays to detect the presence of infectious disease from the blood of live animals, our hiring of additional personnel, the applications for, and receipt of, regulatory approvals for any veterinary vaccines that we may develop, and other factors. Our ability to raise capital will increase our ability to implement our business plan.

 

RELATED PARTY TRANSACTIONS

 

The Company has an outstanding loan payable and accrued interest to Antonio Milici, its CEO and stockholder amounting to $673,092 as March 31, 2022 and December 31, 2021, respectively. This outstanding loan to the Company is unsecured and bears interest at 2.41%. The Company has an outstanding loan and accrued interest payable to Tannya Irizarry, its CFO interim and stockholder, amounting to $51,472 and $71,027 as of March 31, 2022 and December 31, 2021, respectively. This outstanding loan to the Company is unsecured and bears interest at 8%.

 

 
5

 

 

GTI Corporate Transfer Agents, LLC is the Company’s transfer agency. Tannya Irizarry is a board member and also has a 50% ownership and/or interest. During the three months ended March 31, 2022 and 2021, the Company paid GTI Corporate Transfer Agents, LLC $0 and $80, respectively.

 

RECENTLY ISSUED ACCOUNTING STANDARDS

 

Management has evaluated all recent accounting pronouncements as issued by the FASB in the form of Accounting Standards Updates (“ASU”) through the date these financial statements were available to be issued and find no recent accounting pronouncements that would have a material impact on the financial statements of the Company.

 

EMPLOYEES

 

As of March 31, 2022, we had a total of two full-time employees who devoted substantial effort on our behalf. None of our employees are represented by a collective bargaining unit. There are no employee issues at this time. All accrued salaries have been deferred.

 

RESULTS OF OPERATIONS

 

FOR THE THREE MONTHS ENDED MARCH 31, 2022 and 2021

 

The company did not generate any revenue for the three months ended March 31, 2022 and 2021.

 

The company had total operating expenses of $132,189 and $204,595 for the three months ended March 31, 2022 and 2021, respectively. For both periods the operating expenses primarily consist of accrued officers’ salaries and general and administrative expenses to maintain the entity while seeking a target for its solutions and capital raise efforts.

 

We had a net loss of $132,745 compared to a net loss of $206,241 for the three months ended March 31, 2022 and 2021, respectively due to a decrease in general and administrative expenses of approximately $72,000.

 

LIQUIDITY AND CAPITAL RESOURCES

 

As of March 31, 2022, we had cash and cash equivalents of $0. We have historically financed activities with cash from the private placement of equity and debt securities and advances from related parties. Our auditors have issued a going concern opinion. This means that our auditors believe there is a substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills. We have had negligible revenues since inception and had an accumulated deficit of $32,404,191 and negative working capital of $8,309,393 as of March 31, 2022.

 

Our current cash balance is not sufficient to fund our business objectives and we will need significant additional capital over the next twelve months in order to fund our planned operations. Specifically, we intend to spend significant funds on completing our robotic prototype system, validating and testing our products, seeking necessary regulatory approvals and focusing on international expansion. We will attempt to raise capital through one or more private offerings of debt or equity securities or both. We may not be able to secure the financing that we believe is necessary to implement our strategic objectives and, even if additional financing is secured, we may not achieve our strategic objectives. As of the date of this report, we do not have any firm commitments from any investors for any additional funding.

 

Our longer-term working capital and capital requirements will depend upon numerous factors, including revenue and profit generation, pre-clinical studies and clinical trials, the timing and cost of obtaining regulatory approvals, the cost of filing, prosecuting, defending, and enforcing patent claims and other intellectual property rights, competing technological and market developments, collaborative arrangements. Additional capital will be required in order to attain such goals. Such additional funds may not become available on acceptable terms and we cannot give assurance that any additional funding that we do obtain will be sufficient to meet our needs in the long term.

 

 
6

 

 

The accompanying consolidated financial statements do not include any adjustments to reflect the possible future effects on recoverability and classification of liabilities that may result from the outcome of this uncertainty. If we are unable to obtain additional working capital, our business may fail. Accordingly, we must raise cash from sources other than operations. To date, we have financed our operations primarily through cash flow from limited operations, augmented by cash proceeds from financing activities, short-term borrowings and equity contributions by our stockholders. We must raise cash to implement our projected plan of operations. Failure to obtain capital to fund short-term and long-term needs will likely result in the curtailment of our operations or cessation of certain aspects of our business strategy.

 

We had total assets as of March 31, 2022 and December 31, 2021 of $3,960, and $6,302, respectively which included the net book value of a vehicle.

 

We had total liabilities of $8,309,393 as of March 31, 2022 which included $91,070 of accounts payable, $7,403,460 of accrued liabilities and $814,863 of notes and loans payable and other liabilities.

 

Cash used in operating activities for the three months ended March 31, 2022 was $3,593 compared to no cash used in or provided by operating activities for the three months ended March 31, 2021. The net loss for the three months ended March 31, 2022 and 2021 was $132,745 and $206,241, respectively.

 

GOING CONCERN

 

It is estimated that we will require outside capital for the next twelve (12) months for the commercialization of GeneThera molecular assays as well as the development of our therapeutic vaccines. The Company intends to raise these funds by means of one or more private offerings of debt or equity securities or both. The Company is still in discussions with one or two groups to obtain financing through equity. No definitive agreements have been signed. There are no guarantees whether the Company will be able to secure such financing, and if the financing is secured, there are no guarantees whether the Company can achieve the goals laid out in its business plan fully. We will require significant additional funding in order to achieve our business plan.

 

Presently, the Company is considering ways to apply its molecular robotic technology to address the COVID-19 pandemic.

 

Our longer-term working capital and capital requirements will depend upon numerous factors, including revenue and profit generation, pre-clinical studies and clinical trials, the timing and cost of obtaining regulatory approvals, the cost of filing, prosecuting, defending, and enforcing patent claims and other intellectual property rights, competing technological and market developments, and collaborative arrangements. Additional capital will be required in order to attain such goals. Such additional funds may not become available on acceptable terms and we cannot give any assurance that any additional funding that we do obtain will be sufficient to meet our needs in the long term.

 

The accompanying consolidated financial statements do not include any adjustments to reflect the possible future effects on recoverability and classification of liabilities that may result from the outcome of this uncertainty. If we are unable to obtain additional working capital, our business may fail. Accordingly, we must raise cash from sources other than operations. To date, we have financed our operations primarily through cash flow from limited operations, augmented by cash proceeds from financing activities, short-term borrowings and equity contributions by our stockholders. We must raise cash to implement our projected plan of operations. Failure to obtain capital to fund short-term and long-term needs will likely result in the curtailment of our operations or cessation of certain aspects of our business strategy.

 

In the future, we may be required to seek additional capital by selling debt or equity securities, selling assets, or otherwise be required to bring cash flows in balance when we approach a condition of cash insufficiency. The sale of additional equity or debt securities, if accomplished, may result in dilution to our then shareholders.

 

The Company has no off-balance sheet commitments or arrangements.

 

Item 3. Quantitative and Qualitative Disclosures about Market Risk

 

Pursuant to Item 305(e) of Regulation S-K (§ 229.305(e)), the Company is not required to provide the information required by this Item as it is a “smaller reporting company,” as defined by Rule 229.10(f)(1).

 

 
7

 

 

Item 4. Controls and Procedures.

 

(a) Evaluation of Disclosure Controls and Procedures

 

Pursuant to Rule 13a-15(b) under the Exchange Act, the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Principal Executive Officer (“PEO”) and Principal Financial Officer (“PFO”), of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company’s PEO and PFO concluded that the Company’s disclosure controls and procedures were not effective to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s PEO and PFO, as appropriate, to allow timely decisions regarding required disclosure

 

(b) Changes in Internal Control over Financial Reporting

 

There were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

The Company is committed to improving financial organization. As part of this commitment, management and the Board perform reviews of the Company’s policies and procedures as they relate to financial reporting in an effort to mitigate future risks of potential misstatements. The Company will continue to focus on developing and documenting internal controls and procedures surrounding the financial reporting process, primarily through the use of account reconciliations, and supervision.

 

 
8

 

 

PART II - OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

The Company believes that there are no current lawsuits or litigation.

 

Item 1A. Risk Factors 

 

There have been no material changes from the risk factors previously disclosed in the Company’s Annual Report on Form 10-K, filed with the Commission on April 14, 2022 and investors are encouraged to review such risk factors prior to making an investment in the Company.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 

 

As of March 31, 2022, the Company did not issue any unregistered securities.

 

Item 3. Defaults upon Senior Securities 

 

None.

 

Item 4: Mine Safety Disclosures 

 

Not applicable.

 

Item 5: Other Information 

 

There is no other information required to be disclosed under this item which has not been previously disclosed.

 

 
9

 

 

Item 6: Exhibits 

 

Exhibit

Number

 

Description of Exhibit

 

 

 

31.1*

 

Certificate of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 

 

 

31.2*

 

Certificate of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 

 

 

32.1*

 

Certificate of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

 

 

32.2*

 

Certificate of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

 
10

 

 

SIGNATURES

 

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on May 18, 2022.

 

GeneThera, Inc. 

 

By: 

/s/ Antonio Milici

 

 

Antonio Milici, M.D., Ph.D.

 

President

 

(Principal Executive Officer)

 

 

By:

/s/ Tannya L. Irizarry

 

 

Tannya L. Irizarry

 

Chief Financial Officer (Interim)

 

(Principal Financial/Accounting Officer)

 

In accordance with the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

 

Signature

 

Title

 

Date

 

 

 

 

 

/s/ Antonio Milici

 

President, Director

 

05/18/22

Antonio Milici, M.D., PhD.

 

 

 

 

 

 

 

 

 

/s/ Tannya L. Irizarry

 

Chief Financial Officer (Interim)

 

05/18/22

Tannya L Irizarry

 

 

 

 

 

 
11