In April 2014, the Company sold 250,789 Series B preferred shares to Sierra Trading Corp, for the purchase price of $250,789 pursuant to the terms of a Securities Purchase Agreement..
In May 2014, the Company sold 229,816 Series B preferred shares to Summit Trading Ltd, for the purchase price of $229,816 pursuant to the terms of a Securities Purchase Agreement.
In May 2014, the Company signed a Convertible Promissory Note in the amount of $832,500 and received proceeds in the amount of $450,000 in the first tranche (see note 5)
In June 2014, the Company sold 85,994 Series B preferred shares to Summit Trading Ltd, for the purchase price of $85,994 pursuant to the terms of a Securities Purchase Agreement.
In June 2014, the Company sold 33,333,333 shares of common stock, together with two 3 year warrants to purchase 11,666,666 shares of common stock for proceeds of $500,000 pursuant to the terms of a Security Purchase Agreement.
Results of Operations
For the three and nine months ended June 30, 2014, compared to the three and nine months ended June 30, 2013
We recorded no revenues for the three and nine months ended June 30, 2014 and we recorded $103,887 and $149,179 in revenue for the three and nine months ended June 30, 2013, due to a development contract revenues recognized in 2013.
Research and development expenses (R&D) consist primarily of salaries and other personnel-related expenses, facilities costs, and other laboratory and research related expenses. Total R&D costs for the three and nine months ended June 30, 2014 increased $70,000 to $316,000 from $246,000 and increased $91,000 to $598,000 from $507,000 respectively. The three month increase was primarily due to increases in salaries of $19,000, project expense of $63,000, and a decrease facility costs of $23,000, and the six month increase was primarily due to an increase in salaries of $15,000, facility cost of $23,000, and project expenses of $46,000.
General and administrative expenses (G&A) consist primarily of salaries and related expenses for our management, finance and related personnel, as well as costs for marketing and sales expenses, professional fees, such as accounting and legal, corporate insurance and facilities costs, and non-employee members of our board of directors. G&A expenses increased $147,000 to $528,000 from $381,000 and increased $348,000 to $1,506,000 from $1,158,000 for the three and nine months ended June 30, 2014 compared to the same periods in 2013. The increase in G&A expense in the three and nine months ended June 30, 2014 was primarily due to the following:
·
an increase in board compensation of $1,600 and $5,000 to $18,000 and $54,000 in the three and nine months ended June 30, 2014 compared with $16,400 and $49,000 in the same periods in 2013.
·
an increase of $91,000 and $357,000 in stock option compensation to $105,000 and $371,000 in the three and nine months ended June 30, 2014 from $14,000 for the three and nine months ended June 30, 2013.
·
an increase of $45,000 to $49,000 from $4,000 and an increase of $172,000 to $198,000 from $26,000 in marketing expenses for the three and nine months ended June 30, 2014 compared with the same periods in 2013.
·
an decrease in salaries expense of $12,000 from $105,000 and $8,000 from $291,000 (including taxes and benefits) to $93,000 and $283,000 for the three and nine months ended June 30, 2014 compared to the same period in 2013.
·
an increase in professional services of $7,000 to $231,000 and a decrease of $213,000 to $510,000 for the three and nine months ended June 30, 2014 compared with $224,000 and $723,000 recorded for the same periods in 2013.