UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10QSB
(X) Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended March 31, 2003.
( ) Transition report pursuant of Section 13 or 15(d) of the Securities
Exchange Act of 1939 for the transition period ____ to______
COMMISSION FILE NUMBER: 333-44398
NUTRA PHARMA CORP.
------------------------------------------
(Exact name of registrant as specified in its charter)
California 91-2021600
- ---------------------------------- ----------------------------
(State or other jurisdiction of (IRS Employer I.D. Number)
incorporation or organization)
485 Martin Lane
Beverly Hills, CA 90210
(310) 276-8767
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(Address of Principal Executive Offices, including Registrant's zip code
and telephone number)
NONE
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Former name, former address and former fiscal year, if changed
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports,), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
--- ---
The number of shares of the registrant's common stock as of March 31, 2003:
44,500,000 shares.
Transitional Small Business Disclosure Format (check one): Yes No X
--- ---
1
TABLE OF CONTENTS
-----------------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
(a) Balance Sheet
(b) Statement of Operations
(c) Statement of Changes in Financial Position
(d) Statement of Shareholders' Equity
(e) Notes to Financial Statements
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations
Item 3. Risks
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities and Use of Proceeds
Item 3. Defaults On Senior Securities
Item 4. Submission of Items to a Vote
Item 5. Other Information
Item 6
(a) Exhibits
(b) Reports on Form 8K
SIGNATURES
FINANCIAL DATA SCHEDULE
2
NUTRA PHARMA CORP.
(A Development Stage Company)
Balance Sheets
Dec. 31, March 31,
2002 2003
-------- --------
ASSETS
Current Assets:
Cash $ - $ -
Loan receivable 819,327 872,327
------- --------
Total Current Assets 819,327 872,327
------- --------
TOTAL ASSETS $ 819,327 $ 872,327
========= =========
LIABILITIES & STOCKHOLDERS' DEFICITS
Current Liabilities:
Accrued expenses $ 2,400 $ 2,400
Loan payable related party 862,010 915,010
-------- ---------
Total Current Liabilities 864,410 917,410
--------- ---------
Stockholders' Deficits:
Common Stocks, $.001 par value
Authorized shares; 100,000000
Issued and outstanding shares;
43,813,905
43,814 43,814
Paid In Capital 8,136 8,136
Deficit Accumulated during
the development stage (96,347) ( 96,347)
--------- ---------
TOTAL STOCKHOLDERS' DEFICIT (45,083) ( 45,083)
--------- ---------
TOTAL LIABILITIES AND
STOCKHOLDERS' DEFICIT $ 819,327 $ 872,327
========= =========
The accompanying notes are an integral part of these financial statements.
3
Nutra Pharma Corp.
(A Development Stage Company)
Statements of Operations
For the periods ended March 31, 2002 and 2003
and for the period February 1, 2000 (inception) through March 31, 2003
Cumulative
from (inception)
through
March 31, March 31, March 31,
2003 2002 2003
-------- -------- -----------------
Income $ 0 $ 0 $ 0
-------- -------- -----------------
Total Income $ 0 $ 0 $ 0
-------- -------- -----------------
Operating Expenses
Amortization Expense $ 0 $ 0
General and
administrative expenses 0 141,644 97,119
-------- -------- --------
Total Expenses 0 0 97,119
-------- -------- --------
Net income (loss) $ 0 $141,644 $ ( 97,119)
-------- -------- -----------
-------- -------- -----------
4
Nutra Pharma Corp.
(A Development Stage Company)
Statement of Stockholders' Equity
For the period February 1, 2000 (inception)
through March 31, 2003
Deficit
Number Common Accumulated
Of Stock Paid During the
Shares at Par in Development
Outstanding Value Capital Stage
----------- ------- -------- ------------
Stocks issued at inception
for services 1,950,000 $ 1,950 $ - $ -
Net loss,
December 31, 2000 (1,950)
----------- ------- -------- ------------
Balance, December 31, 2000 1,950,000 $ 1,950 - (1,950)
Stocks issued for cash 50,000 50 7,450
Stocks issued 42,500,000 42,500
Net loss,
December 31, 2001 (184,344)
----------- ------- -------- ------------
Balance, December 31, 2001 44,500,000 44,500 7,450 (186,294)
Stocks issued 1,621,405 1,621 686
Stocks cancellation (2,307,500) (2,307)
Net loss,
December 31, 2002 (89,261)
----------- ------- -------- ------------
Balance December 31, 2002 43,813,905 $43,814 $8,136 $ (97,033)
Net loss March 31, 2003 43,813,905 43,814 8,136 (97,033)
--------- ----- ------ -------
Balance March 31, 2003 43, 813,905 $43,814 $8,136 $ (97,033)
========== ======= ====== ==========
The accompanying notes are an integral part of these financial statements.
5
NUTRA PHARMA CORP.
(A Development Stage Company)
Statements of Cash Flows
From
inception
February 1,
2000
For the periods ended through
March 31, March 31,
2002 2003 2003
--------- --------- -----------
CASH FLOWS FROM
OPERATING ACTIVITIES
Net loss $ ( 141,644) $(184,430) $ (95,083)
Amortization 116,667 116,667 116,667
(Increase)decrease in
Loan receivable (819,327) ( 53,000) (819,327)
License agreement 1,750,000 (1,750,000) -
Increase(decrease) in
Accrued expenses - - 2,400
License fees payable (1,725,000) 1,725,000 -
Loans payable-related party 184,327 730,683 915,010
--------- --------- ----------
NET CASH PROVIDED FOR (USED)BY
OPERATING ACTIVITIES 0 (50,000) (50,000)
CASH FLOWS FROM
FINANCING ACTIVITIES
Stock issuance 0 0 50,000
-------- -------- ---------
NET INCREASE (DECREASE) IN CASH ( 0) 0 -
BEGINNING CASH - - -
-------- -------- ----------
ENDING CASH $ - $ - $ -
======== ======= ==========
The accompanying notes are an integral part of these financial statements.
6.
NUTRA PHARMA CORPORATION
(A Development Stage Company)
Notes to Financial Statements
March 31, 2003
NOTE 1 - NATURE OF BUSINESS
Nutra Pharma Corp. (the Company) was incorporated under the laws of the state
of Nevada on February 1, 2000. It has developed a business plan to engage in
the distribution of botanical biopharmaceutical products. The Company is
considered a development stage enterprise because it has not yet generated
significant revenues from the sale of its products.
NOTE 2 SIGNIFICANT ACCOUNTING POLICIES
a. Basis - The Company uses the accrual method of accounting.
b. Cash and cash equivalents - The Company considers all short term, highly
liquid investments that are readily convertible within three months to known
amounts as cash equivalents. Currently, it has no cash equivalents.
c. Loss per share - Net loss per share is provided in accordance with
Statement of Financial Accounting Standards No. 128 "Earnings Per Share". Basic
loss per share reflects the amount of losses for the period available to each
share of common stock outstanding during the reporting period, while giving
effect to all dilutive potential common shares that were outstanding during the
period, such as stock options and convertible securities. Fully Diluted
Earnings Per Shares shall be shown on stock options and other convertible
issues that may be exercised within ten years of the financial statement dates.
As of December 31, 2002 the Company had no issuable shares qualified as
dilutive to be included in the earnings per share calculations.
The following is an illustration of the reconciliation of the numerators and
denominators of the basic loss per share calculations:
For the years ended
December 31,
2002 2001
---------- -----------
Net income (loss) $ 89,261 $(184,344)
Weighted average shares
outstanding (denominator) 18,204,208 44,500,500
Basic loss per share $ 0.01 $(0.00)
=========== ===========
d. Use of Estimates - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts assets and
liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual results could
differ from those estimates.
NOTE3 - INCOME TAXES
The Company has adopted the provision of SFAS No. 109 "Accounting for Income
Taxes". It requires recognition of deferred tax liabilities and assets for the
expected future tax consequences. Under this method, deferred tax liabilities
and assets are determined based on the differences between the financial
statement and tax basis of assets and liabilities using enacted tax rates in
effect for the year in which the differences are expected to reverse.
Nutra Pharma Corp. has incurred losses that can be carried forward to offset
future earnings if conditions of the Internal Revenue codes are met.
The Company's total deferred tax assets as of December 31, 2002 is as follows:
Net operating loss carry-forward ($ 97,033)
Valuation allowance ( 97,033)
--------
$ -
=======
The difference between the income tax benefit in the accompanying statements of
operations and the amount that would result if the Federal statutory rate of
34% were applied to pre-tax loss is as follows for the year ended December 31,
2001:
7
Income tax benefit at statutory rate $ 29,110
Valuation allowance (29,110)
------
$ -
======
The net operating loss carry forward of $97,033 for federal tax purposes will
expire in year 2022.
F8
NOTE 4 RELATED PARTY TRANSACTIONS
The Company issued shares of restricted common stock to its officers, legal
counsel, and consultant in exchange for services rendered. The stocks issued
are recorded at fair value par value of the services received.
During the year 2001 and 2002, the Company received advances from officers who
are also stockholders. These advances are non-interest bearing and have no
specific terms of repayment. Balance of the loan Loan payable to related party
as of December 31, 2002 is $862,010. Loan receivable to related party is also
non-interest bearing and has No specific terms of repayment. Balance as of
December 31, 2002 is $819,327.
NOTE 5 LICENSE AGREEMENT
On May 7, 2001, the Company entered into a license agreement. The purchase
price for the license was $1,750,000. The cost of the licensing agreement
acquired was recorded as an intangible asset and is being amortized over the
term of the license of five years. At December 31, 2001, accumulated
amortization was $116,667. On December 23, 2002, the above agreement was
mutually cancelled by both parties. Related adjustments are reflected in
December 31, 2002 financial Statements.
NOTE 6 ACQUISITION OF SUBSIDIARY
On August 2002, have entered into an agreement to acquire Bio Therapeutics,
Inc. a Florida corporation. As of balance sheet date, the agreement is still
pending and not yet completed.
NOTE 7 GOING CONCERN
The Company has no assets with which to create operating capital. It has an
accumulated deficit of $97,033 at December 31, 2002. These factors raise
substantial doubt about the company's ability to continue as a going concern.
The company seeks to raise operating capital through private placements of its
common stock. However, there can be no assurance that such offering or
negotiations will be successful.
8
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
Results of Operations
Since inception, we have experienced losses. We have financed our operations
primarily through the sale of our common stock or by loans from shareholders.
The net loss for the three months ended March 31, 2003 was $0, compared to a
net loss of $141,644 for the same period of 2002. Management attributes the
decrease in net loss to the adjustment of the loss as a loan receivable asset
on the company's balance sheet.
Liquidity and Capital Resources
As of December 31, 2002, we had a working capital deficit of $445,083, compared
to a working capital deficit of $45,083 for March 31, 2003. We have no material
commitments for the next twelve months. We believe that our current cash needs
for at least the next twelve months can be met by loans from our directors,
officers and shareholders.
Recent Developments
On August 22, 2002, Nutra Pharma Corp ("Nutra Pharma") consummated the first
portion of its share exchange agreement with of Bio Therapeutics, Inc., a
Florida corporation ("Bio Therapeutics"), provided for in the Definitive
Agreement dated May 30, 2002 and the Closing Agreement for the Exchange of
Common Stock dated August 12, 2002, as amended. Pursuant to the Agreement, Bio
Therapeutics was being acquired by Nutra Pharma as a wholly owned subsidiary.
Throughout the course of the consummation of the agreement, Nutra Pharma loaned
to Bio Therapeutics approximately $700,000 for operating expenses. On April 22,
2003, Nutra Pharma put Bio Therapeutics on notice that the contingency of the
share exchange agreement of the closing of a $1.5 million private placement of
securities had not been satisfied, but that Nutra Pharma would be willing to
restructure the agreement. However, it would not continue to lend money to Bio
Therapeutics without those loans being secured, as Nutra Pharma had discovered
that the management of Bio Therapeutics had mismanaged the funds lent, by
continuing to manufacture its drugs in violation of an FDA cease and desist
order, among other things.
On April 23, 2003, Bio Therapeutics withdrew from and terminated the agreement.
The termination of the agreement by Bio Therapeutics involves the return of
shares of Bio Therapeutics held in escrow to Bio Therapeutics' counsel for
their return to Bio Therapeutics' shareholders, and the return of approximately
11,730,889 shares of Nutra Pharma stock to the Company treasury for
cancellation. Nutra Pharma will continue to seek ways to develop its wound
healing devices and will seek the return of all monies loaned to Bio
Therapeutics pursuant to the share exchange agreement.
9
SIGNATURES
In accordance with the requirements of the Securities and Exchange Act of 1934,
the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
NUTRA PHARMA CORP.
Dated: May 13, 2003 By: Rik Deitsch
------------------------------
Rik Deitsch, President
Pursuant to the requirements of 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.
Zirk Engelbrecht
---------------------------
Zirk Engelbrecht, Treasurer
Date: May 13, 2003
10
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the quarterly report of Nutra Pharma, Inc. on Form 10-QSB
for the period ended March 31, 2003, as filed with the Securities and Exchange
Commission on the date hereof, the undersigned certify, pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, that to the best of my knowledge:
1. The report fully complies with the requirements of Section 13(a) or 15(d) of
the Securities Exchange Act of 1934; and
2. The information contained in the report fairly presents, in all material
respects, the financial condition and results of the Company.
Dated: May 13, 2003 By: Rik Deitsch
--------------------------
Rik Deitsch,
Chief Executive Officer
Dated: May 13 , 2003 By: Zirk Englebrecht
------------------------
Zirk Englebrecht
Treasurer
11
CERTIFICATION
PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002
I, Rik Deitsch, certify that:
1. I have reviewed this report on Form 10-QSB of Nutra Pharma Corp.
2. Based on my knowledge, this report does not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, consolidated financial
statements and other financial information included in this report, fairly
present in all material respects the financial condition, results of operations
and cash flows of the registrant as of, and for, the year ending 2002, as
presented in this report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including any subsidiaries, is made
known to us by others within those entities, particularly during the period in
which this report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this report
(the "Evaluation Date"); and
c) presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures based on our evaluation as of the Evaluation
Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls;
and
6. The registrant's other certifying officers and I have indicated in this
report whether or not there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: May 13, 2003
Rik Deitsch
-----------------------
Rik Deitsch
Chief Executive Officer
12
CERTIFICATION
PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002
I, Zirk Englebrecht, certify that:
1. I have reviewed this report on Form 10-QSB of Nutra Pharma Corp.
2. Based on my knowledge, this report does not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, consolidated financial
statements and other financial information included in this report, fairly
present in all material respects the financial condition, results of operations
and cash flows of the registrant as of, and for, the year ending 2002, as
presented in this report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including any subsidiaries, is made
known to us by others within those entities, particularly during the period in
which this report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this report
(the "Evaluation Date"); and
c) presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures based on our evaluation as of the Evaluation
Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls;
and
6. The registrant's other certifying officers and I have indicated in this
report whether or not there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: May 13, 2003
Zirk Englebrecht
- -----------------------
Zirk Englebrecht
Chief Financial Officer
13