424B3 1 f424b30814_dandrit.htm PROSPECTUS f424b30814_dandrit.htm
 


PROSPECTUS
FILED PURSUANT TO RULE 424(b)(3)
REGISTRATION STATEMENT NO. 333-193965
 
 
(DAN DRIT LOGO)
 
DANDRIT BIOTECH USA, INC.
 
Up to 2,400,000 Shares of Common Stock
 
We are offering up to $12,000,000 (2,400,000 shares) of our common stock at an assumed offering price of $5.00 per share in an initial public offering of our common stock. There is presently no public market for our common stock, however, we have applied for trading on the OTC Bulletin Board and the OTCQB.
 
We are an “emerging growth company” under the federal securities laws and will have the option to use reduced public company reporting requirements.
 
Investing in our common stock involves a high degree of risk. You should review carefully the risks and uncertainties described under the heading “Risk Factors” beginning on page 9 of this prospectus, and under similar headings in any amendments or supplements to this prospectus.
 
        Sunrise Securities Corp. and The Benchmark Company, LLC (each a “Placement Agent” and, collectively, the “Placement Agents”) are the placement agents for our initial public offering. The Placement Agents are not purchasing or selling any shares of common stock nor is it required to sell any specific number or dollar amount of common stock but will use their best efforts to sell the common stock offered. There are no minimum purchase requirements that must be met before the offering terminates. We have not arranged to place the funds from investors in an escrow, trust or similar account. Once your subscription is received, you will not have the right to withdraw your funds. Once your subscription has been accepted by us, offering proceeds will be deposited into our operating account and used to conduct our business and operations in accordance with the section of this prospectus titled “Use of Proceeds”. This offering will terminate on October 14, 2014, unless the Company and Sunrise Securities Corp. shall mutually agree to extend for an additional 30 days or unless it is fully subscribed before that date or we decide to terminate the offering prior to that date. In either event, the offering may be closed without further notice to you.
 
 

 
   
Per Share
   
Total
 
Public Offering Price
 
$
5.00
   
$
12,000,000
 
Placement Agents' Commissions(1)
 
$
0.35
   
$
840,000
 
Offering Proceeds before expenses (2)
 
$
4.65
   
$
11,160,000
 
 
(1) For the purpose of estimating the Placement Agents’ commission, we have assumed that the Placement Agents will receive the maximum commission on all sales made in the offering. The Placement Agents will only receive commissions from proceeds raised from investors introduced to us by the Placement Agents. This figure does not include up to an aggregate amount of $75,000 for fees and expenses of counsel to the Placement Agents and an accountable expense reimbursement fee of up to 1% of the gross proceeds of this offering. See “Plan of Distribution” for more information on this offering and the arrangements we have with the Placement Agents.
 
(2) Does not include offering expenses that we will be required to pay. Because there is no minimum offering amount required as a condition to closing this offering, the actual public offering amount, the Placement Agents’ commissions, and proceeds to us, if any, are not presently determinable and may be substantially less than the total maximum offering set forth above. Once the offering price has been determined, it will remain fixed for the duration of the offering. See “Plan of Distribution” for more information on this offering and the arrangements we have with the Placement Agents.
 

 
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
 
 
 
The date of this prospectus is August 21, 2014.
 
 
 
 
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Dealer Prospectus Delivery Obligation
 
Until November 10, 2014 (90 days after the date of this prospectus), all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as a placement agent and with respect to any unsold allotments or subscriptions.
 
 
ABOUT THIS PROSPECTUS
 
You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with different or additional information. If anyone provides you with different or inconsistent information, you should not rely on it. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of securities described in this prospectus. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus or any prospectus supplement, as well as information we have previously filed with the Securities and Exchange Commission (the “SEC” or the “Commission”) and incorporated by reference herein, is accurate as of the date on the front of those documents only. Our business, financial condition, results of operations and prospects may have changed since those dates.
 
CURRENCY INFORMATION
 
The functional and reporting currency of DanDrit Biotech USA, Inc. is the U.S. Dollar. The functional currency of DanDrit Biotech A/S is the Danish Krone (“DKK” or “Danish Krone”) and our reporting currency is dollars ($) for the purpose of the financial statements and other financial data contained elsewhere in this prospectus. DanDrit Biotech A/S consolidated balance sheet accounts are translated into U.S. dollars at the period- end exchange rates (DKK 5.429, DKK 5.4127 and DKK 5.66 to $1 at June 30, 2014, December 31, 2013 and 2012, respectively) and all revenue and expenses reported for three and six months ended June 30, 2014 and the years ended December, 2013 and 2012 are translated into U.S. dollars at the average exchange rates prevailing during 2014, 2013 and 2012 (DKK 5.41735, DKK 5.54 and DKK 5.79 to $1, respectively).
 
FINANCIAL INFORMATION

As a result of the reverse acquisition resulting from the Share Exchange (as defined below), DanDrit Denmark (as defined below) is considered the accounting acquirer in the Share Exchange and the assets and liabilities and the historical operations that are reflected in our financial statements are those of DanDrit Denmark. Therefore, the historical financial data of DanDrit Denmark is deemed to be our historical financial data; provided, however, that all amounts have been restated to reflect the recapitalization of the exchange ratio applied as a result of the Share Exchange.
 
 
 
This summary may not contain all of the information that may be important to you. You should read the entire prospectus, including the financial statements and related notes, and the risk factors under the section titled “Risk Factors”. Unless otherwise indicated or the context otherwise requires, all references in this prospectus to “DanDrit,” “we,” “us,” “our” or the “Company” are to DanDrit Biotech USA, Inc., a Delaware corporation (“DanDrit USA”), together with its wholly-owned subsidiary DanDrit Biotech A/S, a Danish limited company, organized under the Danish Act on Limited Companies of the Kingdom of Denmark (“DanDrit Denmark,” or the “Subsidiary”).
 
Overview
 
We are a biotechnology company seeking to develop what we believe could be the world’s first vaccine approved for the treatment of colorectal cancer. For more than a decade we have developed and patented vaccines successfully used in initial clinical trials in Europe and Asia including: (i) MelCancerVac™ (MCV) for treatment of cancer (one phase I/II trial in Denmark and two phase II trials in Denmark and Singapore), (ii) Tolerogenic (producing immunologic tolerance) dendritic cell (TDC) (pre-clinical stage in Denmark) and (iii) Melvaccine (MV) a melanoma cell lysate used as stand-alone vaccine (pre-clinical state in Denmark). We plan to continue the clinical development program in the United States. Springing from academic roots in Denmark, DanDrit has built upon its scientific and medical skills to advance candidate therapies, targeted initially at non-small-cell-lung-cancer (NSCLC) and colorectal cancer (CRC). In 2001, MCV was developed as a result of the combined efforts and research of DanDrit researchers and employees. On September 22, 2008, the Singapore government granted to DanDrit Denmark a named-patient compassionate use program of MCV. DanDrit’s dendritic cell vaccine, MCV, was evaluated in three single-arm Phase II clinical trials in cancer where MCV demonstrated potential efficacy. However, these three clinical trials generated data reported in published papers which indicated that the data needed to be confirmed in a larger, comparative randomized clinical trial. As a result, DanDrit, with the assistance of experienced practitioners in colorectal cancer treatment, designed a randomized trial with 174 stage IV colorectal cancer patients. Neither the US Federal Drug Administration (FDA) nor any other comparable governmental agency has reviewed MCV. Therefore, any assessment of its safety or efficacy only reflects the opinion of the Company. Furthermore, it does not indicate that MCV will achieve favorable results in any later stage trials or that the FDA or comparable agency will ultimately determine that MCV is safe and effective for purposes of granting marketing approval.
 
Our Biotechnology
 
We plan to use a dendritic cell vaccine technology relatively similar to the technology behind Dendreon’s FDA approved Provenge™ cancer vaccine. However, we believe DanDrit’s next generation of dendritic cell vaccine may benefit from technological competitive advantages over other cancer vaccines including:
 
 
The vaccine will be generated within eight days from a patient’s peripheral blood. We will be able to generate the vaccine quickly because only 200 ml of blood is required. Leukapheresis, a medical technology in which the blood of a patient is passed through an apparatus (similar to a dialysis machine) that separates out one particular constituent and returns the remainder to the circulation which is used in Dendreon’s Provenge™ cancer vaccine, can be used but is not needed.
 
 
The vaccine will use an allogenic (using cells, tissues, or organs, sourced from a genetically non-identical member of the same species as the recipient (“Allogenic”) tumor lysate (a fluid containing the contents of lysed cells (lysis referring to the breaking down of a cell and a fluid containing the contents of lysed cells referred to as a “lysate”) as opposed to inconvenient autologous (from the patient) tumor lysate. A major limitation of autologous tumor cell vaccines is the low yield of autologous tumor cells that may compromise the number of immunizations given to patients (difficult to obtain enough cancer cells from the patient).  A second inconvenience is the variability of GM-CSF (a protein that functions as a white blood cell growth factor) secretion among patients, which could be responsible for the different levels of responses observed. But above all, although autologous tumor cells may be a good source of tumor-associated antigens, present on some tumor cells and some normal cells (as opposed to tumor specific antigens only present on tumor cells) (TAA) for cancer vaccine development, limitations plus the significant time and expense required for the approval of each patient’s vaccine by the appropriate regulatory agencies severely limit the development of this type of immunization approach. DanDrit does not need a patient’s tumor cells to manufacture MCV.  Therefore MCV is not classified as an autologous vaccine.
 
 
The vaccine will be polytopic (targets several cancer specific antigens). As a result, the risk of the tumor escaping is more limited and more T-cells can be activated than if the vaccine is targeting one antigen only. However, MCV has a focus on melanoma-associated antigen (“MAGE”)-A antigens that are only expressed by tumors (in many different types of cancer – not only melanoma) and absent in normal tissues.
 
 
Fast track production in two days is possible.
 
Our Proposed Clinical Trial
 
Parallel with the establishment of a cancer vaccine center in the European Union (“EU”), DanDrit intends to develop globally MCV in colorectal cancer, with opportunities to expand the scope of the treatment to other types of cancers after development in colorectal cancer. DanDrit proposes to focus its development program on a randomized multicenter Phase IIb/III clinical trial in stage IV colorectal cancer to be initiated in Italy. The proposed Proof of Concept (PoC) study with an adaptive seamless design plans to enroll 174 stage IV colorectal cancer patients after surgical resection of metastases and chemotherapy. The traditional drug clinical development is a sequence of independent trials or phases, where each phase has a different research objective, such as, determining the maximum toxicity point at which the drug can be administered (Phase I), assessing dosing requirements (Phase IIA) and determining efficacy at a prescribed dose (Phase IIB). Each phase of the drug development may also have a different group of randomized participants. A trial that is designed as an adaptive seamless clinical trial refers to a trial that combines the objectives of what are typically separate trials into a single uninterrupted trial with multiple objectives. Usually, the patient participants in this trial are constant and monitored through the course of the various phases and are not re-randomized except for new enrollments. Regulatory authorities in the United States and Europe have published guidance documents on the use and implementation of adaptive design trials. These documents include descriptions of adaptive trials and a requirement for prospectively written standard operating procedures and working processes for executing adaptive trials as well as a recommendation that sponsor companies engage with CROs that have the necessary experience in running such trials.
 
 
The proposed patients for the Phase IIb/III clinical trial have no evidence of disease but are not cured of cancer. Their Progression Free Survival (PFS), which refers to the length of time during and after treatment that a patient lives with the disease which does not get worse, is only 24 to 26 months. The objective of this multicenter Phase IIb/III clinical study is to lengthen the survival of these patients. Treatment will be double blinded (to the patients and physicians) against reference therapy. Patients will be included after surgical resection of their primary tumor and resectable metastases in liver and after appropriate peri-operative chemotherapy by stratification and random assignment to a non-vaccine control group or a vaccine group receiving five vaccinations with 14-day administration intervals followed by five vaccines with two-month intervals. Inclusion will take place one month after finishing the last round of peri-operative chemotherapy (FOLFOX or FOLFIRI) and after a negative tumor scan (head, thoracic and abdominal cavities) and normal carcinoembryonic antigen (CEA) prior to inclusion in the vaccine or the control groups. Patients will be screened for MAGE-A expression. The control group will receive five plus five injections with physiological saline. In the event of disease progression, as verified by tumor scan and biomarker levels during the vaccination schedule, vaccinations will be discontinued.
 
The initial Phase IIb/III trials are currently contemplated to be initiated in Italy. Following the initial closing of the offering described in the Registration Statement, we intend to file an Investigational Medicinal Product Dossier (IMPD) in Italy which is required to obtain a clinical trial authorization (CTA) to begin trials in any Europe state.  The IMPD and CTA review and approval process is anticipated to take approximately two-three months, and we anticipate that patients will begin to be enrolled for the Phase IIb/III trials in Italy in October or November of 2014.  DanDrit has not filed an investigational new drug (IND) application with the FDA in relation to the proposed trial but anticipates filing an IND application with the FDA by the end of 2014 to initiate the process to permit manufacturing capability of MCV in the U.S. and to include U.S. patients in the PhaseIIb/III trials.  Once an IND application has been filed in the U.S., we believe that we will be able to expand the PhaseIIb/III trials initiated in Italy to the U.S. but we cannot estimate at this time when we will be able to begin enrolling U.S. patients in the trial. Although we were a sponsor for only one of the three MCV clinical trials completed to date, we have obtained the case report forms (CRF) with respect to two of the three trials and have requested the CRFs with respect to the third trial and therefore we intend to present the results obtained from the MCV clinical trials for all trials in which we have been able to obtain the related CRFs to the FDA in connection with our IND application, when filed.  While we were not the sponsor or principal investigator for all of the trials, certain employees and directors of DanDrit were significantly involved in the design of the study and the analysis and interpretation of the data in all three studies and therefore believe that any weight applied to such trial in connection with our IND application will be focused on the results and data of the trials derived from the studies and disclosed in published papers or otherwise reflected in the CRFs rather than the level of our participation. In addition, we believe that the data received in connection with the Phase IIB/III trials contemplated to be initiated in Italy, will have the greatest weight applied in connection with its IND application anticipated to be filed with the FDA (see “Clinical Trials Data and Product Approvals).
  
Our Competitive Strengths
 
We believe the following strengths position us to increase our revenue and profitability:
 
 
Cutting Edge Technology. We believe, based on the current state of research, that immunotherapy is one of the waves of the future in cancer management.
     
 
Colorectal Therapy Potential. We believe the treatment of advanced colorectal cancer represents an opportunity to meet a well identified medical need for safe maintenance therapy. We believe the clinical data for MCV to date shows the potential for the vaccine to eventually become a standard of care for maintenance therapy. We believe, based on the available studies to date, that MCV has the potential to prolong periods of remission after response to chemotherapy. If MCV works as expected in advanced colorectal cancer, we believe it would likely prove beneficial in other tumors that over-express MAGE-A including lung, breast and esophageal cancers.
     
 
Regulatory Precedent. With Provenge™, its prostate cancer vaccine, Dendreon pioneered the regulatory pathway for MCV. Dendreon worked with the FDA to develop the protocols which could allow a cellular therapy such as MCV to be approved for clinical use. We believe that DanDrit is the next generation of dendritic cell vaccine with several improvements over its competition: stimulate a cellular immune response rather than just an antibody response, no need for leukapheresis to produce the vaccine, intradermal administration, convenience of an Allogenic vaccine (off-the-shelf cancer specific antigens), polytopic approach but with a focus on the MAGE-A antigen family and reliable cost-efficient manufacturing.
     
 
Use in Singapore. For the last five years, DanDrit and the Singapore National Cancer Center have provided MCV to colorectal cancer patients within an on-going compassionate use program in Singapore.
     
 
Strong IP Protection. The technology is patented with a long patent life. DanDrit owns 100% of the technology.
 
Our Strategy
 
Our strategy is focused on conducting a proof-of-concept clinical trial in advanced colorectal cancer. DanDrit intends to conduct a randomized multicenter Phase IIb/III clinical trial to determine the ability of MCV to prevent recidivism in stage IV colorectal patients with no evidence of disease after resection of metastasis and chemotherapy. This blinded comparative trial is planned to be completed within three years. We believe that positive clinical data will be the catalyst to unlock commercial revenues for DanDrit through either acquisition by pharmaceutical partner or licensing deals that would yield upfront and milestone payments as well as royalties or other strategic directions the Company may consider.
 
Furthermore, parallel to the previously described clinical trial, DanDrit may pursue a registration trial to support potential approval of MCV in China. This trial would be conducted under China’s State Food and Drug Administration (the “SFDA”) regulations with a Chinese oncology pharmaceutical partner. China has recently put in place a drug approval system.
 
DanDrit is headquartered in and runs operations from Denmark. However, DanDrit intends to establish a dendritic cell cancer vaccine good manufacturing practices (GMP) laboratory in the United States.
 
Industry Overview
 
We believe that major advances have been made the last three years in the field of immunotherapy. Molecular and cellular mechanisms controlling the immune system’s battle against cancer cells are now better understood.
 
 
However, cancer remains mostly treated by surgery, chemotherapy and radiotherapy. The current therapeutic approach is aggressive on the patient with significant side effects. Immunotherapy, however, can potentially solve these problems because the immune system, with its high level of specificity, can zero in on cancer cells that surgeons, drugs and radiations cannot reach.
 
For example, according to Dr. Adam Snook, “Our immune system is characterized by remarkable specificity, potency and memory – the ability of a single vaccine treatment to provide life-long-protection. No pharmacologic treatment for any indication can provide the same level of safety, efficacy, and long lasting effect than a vaccine can.”
 
In 2010, Dendreon published positive Phase III survival data for its immunotherapy, called Provenge™, in prostate cancer. During the last three years, we believe the field of cancer immunotherapy has been fast evolving. There has been recently positive clinical data (i.e. anti-programmed cell death protein-1) and approval of several immunotherapies for cancer. We believe that dendritic cell vaccines such as MCV are among the potential developments in the treatment of cancer.
 
CRC is the second largest cancer market in terms of numbers of patients diagnosed. In 2010, a total of around 1.58 million individuals were affected by CRC in the seven major markets, including the US, Japan, France, Germany, Italy, Spain and the UK. CRC was the leading cause of cancer prevalence among men and second among women in Europe. It was also observed that higher survival rates correlated with higher prevalence.
 
According to Decision Resources, the CRC market totaled $8.3 billion in 2011. The value of the CRC market is expected to decrease in the next ten years due to generic competition for a key cytotoxic agent, oxaliplatin (Sanofi’s Eloxatin/Eloxatine, Yakult Honsha’s Elplat), as well as the entry of biosimilar competitors for key targeted biological agents. In terms of number of patients, despite the risk being strongly associated with age, the effect of population aging may be limited by reduced risk of invasive disease due to screening at least in developed countries.
 
DanDrit develops MCV for the management of metastatic CRC (stage IV). Currently, about 20% of CRC patients are diagnosed with metastatic disease. Forecast improvements in the observed survival in the metastatic setting will increase the number of people living with metastatic CRC over the next 20 years, despite the number developing metastatic disease per year remaining relatively stable due to the combined effects of screening and forecast improvements in the management of metastatic recurrence.
 
Treatment of advanced CRC typically involves removal of sections of the colon (colectomy) or rerouting of the intestine by colostomy. Chemotherapy is also used to treat patients with stage IV colon cancer. Irinotecan, oxaliplatin, and 5-fluorouracil are the three most commonly used drugs. In addition, monoclonal antibodies, including cetuximab (Erbitux), panitumumab (Vectibix), and bevacizumab (Avastin) have been used alone or in combination with chemotherapy. CRC is considered cured in the absence of a recurrence within the first five years. Five year survival rates associated with CRC are as high as 90% in early stage disease, and 40–60% in late-stage disease. Stage I, II and III cancers are considered potentially curable. In most cases, stage IV cancer is not curable. Therefore, there is an unmet need for a safe maintenance therapy of stage IV CRC after surgery and chemotherapy.
 
Corporate History and Information
 
DanDrit was incorporated in Delaware on January 18, 2011 under the name “Putnam Hills Corp.” (“Putnam”) as a vehicle to pursue a business combination through the acquisition of, or merger with, an operating business. We filed a Registration Statement on Form 10 with the SEC on August 12, 2011.
 
On February 12, 2014, the Company signed and consummated the transactions contemplated by a Share Exchange Agreement (the "Share Exchange Agreement"), by and among DanDrit USA, DanDrit Denmark and N.E. Nielsen, as the representative of the shareholders of DanDrit Denmark, pursuant to which the Company will acquire 100% of the issued and outstanding equity securities in Dandrit Denmark in exchange for 6,000,000 of the issued and outstanding shares common stock par value $0.0001 per share of the Company. The initial share exchange was closed on February 12, 2014 pursuant to which holders of approximately 97% of the issued and outstanding capital stock of DanDrit Denmark (the “DanDrit Consenting Holders”) exchanged an aggregate of 3,879,624 equity interests of DanDrit Denmark for 5,814,947 shares of DanDrit USA (the “Share Exchange”) and as a result of which Putnam would become the parent of DanDrit Denmark. In accordance with Section 70 of the Danish Companies Act and the Articles of Association of DanDrit Denmark, DanDrit Denmark shareholders who have not consented to the Share Exchange (the “Non-Consenting Shareholders”) and therefore have not exchanged such DanDrit Denmark shareholder’s equity interests in DanDrit Denmark for shares of DanDrit USA, will be entitled to receive the 185,053 shares of common stock of DanDrit USA, reflected as issued and outstanding, that each such DanDrit Denmark shareholder would have been entitled to receive if such DanDrit Denmark shareholder had consented to the Share Exchange, up to an aggregate of 185,053 shares of common stock of DanDrit USA. As a result of the Share Exchange, the former shareholders of Dandrit Denmark became the controlling shareholders of the Company. The Share Exchange was accounted for as a reverse takeover/recapitalization effected by a share exchange, wherein Dandrit Denmark is considered the acquirer for accounting and financial reporting purposes. The capital, share price, and earnings per share amount in these consolidated financial statements for the period prior to the reverse merger were restated to reflect the recapitalization in accordance with the exchange ratio established in the merger.
 
 
Upon the closing of the Share Exchange, DanDrit USA and its majority shareholder immediately prior to the closing agreed to cancel up to 4,400,000 shares of our common stock.  In addition, following the closing of the Share Exchange, DanDrit Biotech USA, Inc., a wholly owned subsidiary of the Company merged with and into the Company, thereby changing the Company’s name to “DanDrit Biotech USA, Inc.”
 
DanDrit USA owns approximately 97% of the outstanding equity interests of DanDrit Denmark. As a result of the Share Exchange, we changed our management and reconstituted our board of directors. As of the effective time of the Share Exchange, Samir Masri, the Chief Executive Officer, Chief Financial Officer, President, Secretary and sole director of Putnam resigned as the sole officer and director of Putnam and appointed NE Nielsen, Dr. Jacob Rosenberg, Dr. Eric Leire, Aldo Petersen and Robert E. Wolfe as directors of Putnam, and Dr. Eric Leire as Chief Executive Officer and President and Mr. Wolfe as Chief Financial Officer, Treasurer and Secretary.
 
Our principal executive offices are located at Fruebjergvej 3 Box 62, 2100 Copenhagen, Denmark, and our telephone number is +45 39179840. We maintain an Internet website at www.dandrit.com. The information contained in, or accessible from, our website is not a part of this prospectus.
 
Implications of being an Emerging Growth Company
 
As a company with less than $1.0 billion in revenue during our last fiscal year, we qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act, or JOBS Act, enacted in April 2012. An “emerging growth company” may take advantage of reduced reporting requirements that are otherwise applicable to public companies. These provisions include, but are not limited to:
 
Financial Disclosure. The financial disclosure in a registration statement filed by an “emerging growth company” pursuant to the Securities Act of 1933, as amended (the “Securities Act”), will differ from registration statements filed by other companies as follows:
 
 
audited financial statements are required for only two fiscal years;
     
 
selected financial data is required for only the fiscal years that were audited;
     
 
executive compensation only needs to be presented in the limited format now required for “smaller reporting companies”.
 
Because we are a smaller reporting company, we are already provided with the above exemptions under Regulation S-K promulgated under the Securities Act.
 
The JOBS Act also exempts us from any Public Company Accounting Oversight Board rules that, if adopted, would mandate auditor rotation or auditor discussion and analysis.
 
Internal Control Attestation. The JOBS Act provides an exemption to emerging growth companies from the audit of internal controls over financial reporting. We are also exempt from this requirement as a smaller reporting company.
 
Shareholder Advisory Votes. Section 102(a) of the JOBS Act exempts emerging growth companies from the requirements in Sections 14A(a) and (b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) to hold shareholder advisory votes approving executive compensation and golden parachute compensation paid in connection with an acquisition, merger, consolidation, or proposed sale or other disposition of all or substantially all the assets of an issuer.
 
 
Information about an Emerging Growth Company. Section 105(a) of the JOBS Act amended the Securities Act to provide an exception from the definition of the word “offer” for purposes of Sections 2(a)(10) and 5(c) of the Securities Act for research reports issued by a broker-dealer regarding an emerging growth company that is the subject of a proposed public equity offering.
 
The JOBS Act also prohibits the SEC and FINRA from adopting or maintaining any rule or regulation in connection with an initial public offering of an emerging growth company that restricts, based on “functional role”, which employees of a broker-dealer may arrange for communications between research analysts and prospective investors; prohibits research analysts from participating in communication with company management in the presence of non-research personnel such as investment banking or sales force personnel; or which prohibits the publication or distribution of a research report or making of a public appearance within any prescribed period of time either following the pricing date of the emerging growth company’s initial public offering or prior to the expiration of a company or shareholder lock-up agreement.
 
Election to Opt Out of Transition Period. Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standard.
 
The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. We have not elected to opt out of the transition period.
 
We may take advantage of these provisions until the last day of our fiscal year following the fifth anniversary of the date of the first sale of our common equity securities pursuant to an effective registration statement under the Securities Act, which such fifth anniversary will occur in 2018. However, if certain events occur prior to the end of such five-year period, including if we become a “large accelerated filer,” our annual gross revenues exceed $1.0 billion or we issue more than $1.0 billion of non-convertible debt in any three-year period, we will cease to be an emerging growth company prior to the end of such five-year period.
 
Because we have elected to take advantage of certain of the reduced disclosure obligations and may elect to take advantage of other reduced reporting requirements in future filings, the information that we provide to our stockholders may be different than you might receive from other public reporting companies in which you hold equity interests.
 

THE OFFERING
 
Common stock offered by us
 
Up to 2,400,000 shares on a best efforts basis.
     
Common stock outstanding prior to the offering
 
8,040,000 shares, including 185,053 shares of common stock reserved for issuance to the Non-Consenting Shareholders of DanDrit Denmark and deemed issued and outstanding for accounting purposes.
     
Common stock to be outstanding after the offering
 
Up to 10,440,000 shares.
     
Use of proceeds
 
Based on an assumed offering price of $5.00 per share, after deducting the placement agents’ commissions and estimated offering expenses payable by us, we estimate that we will receive up to $10,785,464 in net proceeds from the sale of the shares of common stock in this offering. However, this is a best efforts offering, and there can be no assurance that the offering contemplated hereby will ultimately be consummated.
 
We intend to use the proceeds from this offering to invest approximately (i) $830,000 for the manufacturing of our products, (ii) $2,670,656 in SG&A/Administration, (iii) $526,689 in debt repayment to Sune Olsen Holding ApS, a shareholder, and (iv) $6,758,120 in our clinical trial. All remaining proceeds will be used for working capital and general corporate purposes.
 
If we are unable to raise gross proceeds equal to at least $12,000,000, we intend to first apply the proceeds towards $526,689 in outstanding debt to Sune Olsen Holding ApS, a shareholder, and then towards the development and marketing of our products and the engineering, development and testing of vaccines. However, to the extent that we are unable to raise a sufficient amount of proceeds in this offering, we may not be able to achieve all our business objectives in a timely manner.
 
In the event that we file a post-effective amendment to increase the offering amount pursuant to Rule 462(b) of the Securities Act, we plan to allocate the extra funds in strengthening our Phase II/III clinical trial with a larger sample size and in targeting patients with stage III colorectal cancer rather than metastatic (stage IV) colorectal cancer patients.
 
See “Use of Proceeds” for more information.
     
Potential purchases by affiliates
 
Certain of our affiliates may purchase shares of our common stock in this offering on the same terms as they are offered and sold to the public.
     
Risk factors
 
The shares of common stock offered hereby involve a high degree of risk. See “Risk Factors”.
     
Dividend policy
 
We currently intend to retain any future earnings to fund the development and growth of our business. Therefore, we do not currently anticipate paying cash dividends on our common stock.
     
Trading Symbol
 
There is not currently, and there has never been, any market for our common stock. In connection with this offering, we intend to arrange for a registered broker-dealer to apply to have our common stock quoted on the OTC Bulletin Board and on the OTCQB. We cannot guarantee that our application will be approved.
      
Lock-Up
 
All of the DanDrit Consenting Shareholders that were issued shares of common stock in the Share Exchange are subject to a lock-up agreement for a 180 day period beginning as of the filing date of the last amendment to the registration statement filed in connection with this Offering that is declared effective (the “Lock-Up Period”). The one selling shareholder (the “Security Holder”) identified in the Resale Prospectus will also be subject to a lock-up agreement restricting any sales of the Company’s common stock during the Lock-up Period. See “Plan of Distribution”. The Company will not receive any proceeds from the Resale of the shares of Common Stock by the Security Holder.
 

 
The following table sets forth selected historical statements of operations for the fiscal years ended December 31, 2013 and 2012 and for the three and six months ended June 30, 2014 and 2013; and balance sheet data as of December 31, 2013 and June 30, 2014. As a result of the reverse acquisition resulting from the Share Exchange, DanDrit Denmark is considered the accounting acquirer in the Share Exchange and the assets and liabilities and the historical operations that are reflected in our financial statements are those of DanDrit Denmark. Therefore, the historical financial data of DanDrit Denmark is deemed to be our historical financial data; provided, however, that all amounts have been restated to reflect the recapitalization of the exchange ratio applied as a result of the Share Exchange.
 
The balance sheet data as of December 31, 2013 and the statement of operations data for the fiscal years ended December 31, 2013 and 2012 have been derived from our audited financial statements for those years included elsewhere in this prospectus. The balance sheet data as of June 30, 2014 and the statement of operations data for the three and six months ended June 30, 2014 and 2013 have been derived from our unaudited condensed financial statements included elsewhere in this prospectus.
 
The following data should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in this prospectus and with our financial statements and the related notes and other financial information included in this prospectus.
 
STATEMENTS OF OPERATIONS:
 
 
 
For the 3 Months Ended
   
For the 6 Months Ended
   
For the Year Ended
 
 
 
June 30,
   
June 30,
   
December 31,
 
 
 
2014
   
2013
   
2014
   
2013
   
2013
   
2012
 
Revenues
  $ -     $ -     $ -     $ 31,558       32,768       62,806  
 
                                               
Cost of Goods Sold
    64,266       36,928       82,005       52,288       109,299       64,385  
 
                                               
Gross (Loss)
    (64,266 )     (36,928 )     (82,005 )     (20,730 )     (76,531 )     (1,579 )
 
                                               
Operating Expenses
                                               
General and Administrative Expenses
    421,077       138,801       747,505       313,817       1,233,683       1,036,005  
Depreciation and Amortization
    2,962       10,224       9,756       18,824       38,297       56,600  
Consulting Expenses
    79,797       56,856       140,942       69,904       390,437       829,845  
Total Operating Expense
    503,836       205,881       898,203       402,545       1,662,417       1,922,450  
 
                                               
(LOSS) FROM OPERATIONS
    (568,102 )     (242,809 )     (980,208 )     (423,275 )     (1,738,948 )     (1,924,029 )
 
                                               
Other Income (Expense)
                                               
Interest (expense)
    (34,762 )     (165,499 )     (35,764 )     (325,421 )     (652,703 )     (704,911 )
Gain (loss) on Currency Transactions
    218       18,541       218       (81,786 )     19,541       32,841  
Gain on forgiveness of debt
    -       -       -       -       49,016       -  
Gain on Derivative Liability
    -       45,823       -       87,466       175,732       153,430  
Gain on Sale of Assets
    -       -       -       -       1       15,020  
Interest Income
    197       -       248       -       -       -  
Total Other Income (Expense)
    (34,347 )     (101,135 )     (35,298 )     (319,741 )     (408,413 )     (503,620 )
 
                                               
(Loss) Before Income Taxes
    (602,449 )     (343,944 )     (1,015,506 )     (743,016 )     (2,147,361 )     (2,427,649 )
 
                                               
Income Tax Expense (Benefit)
    (132,997 )     -       (132,997 )     -       -       -  
 
                                               
NET (LOSS)
  $ (469,452 )   $ (343,944 )   $ (882,509 )   $ (743,016 )     (2,147,361 )     (2,427,649 )
 
 
BALANCE SHEETS:
 
   
(Unaudited)
             
   
June 30,
   
December 31,
   
December 31,
 
   
2014
   
2013
   
2012
 
ASSETS
 
                   
CURRENT ASSETS:
                 
Cash
 
$
181,024
   
$
18,794
     
4,381
 
Cash held in escrow
   
147,108
     
77,468
     
-
 
Other Receivables
   
85,326
     
25,456
     
81,802
 
Prepaid Expenses
   
9,252
     
19,774
     
19,747
 
Total Current Assets
   
422,710
     
141,492
     
105,930
 
                         
PROPERTY AND EQUIPMENT, Net accumulated Depreciation
   
0
     
-
     
2,706
 
                         
OTHER ASSETS
                       
Definite Life Intangible Assets
   
220,498
     
231,615
     
239,658
 
Deferred Stock Offering Costs
   
67,000
     
67,000
     
-
 
Deposits
   
8,075
     
10,360
     
14,570
 
Total Other Assets
   
295,573
     
308,975
     
254,228
 
TOTAL ASSETS
 
$
718,283
   
$
450,467
     
362,864
 
                         
LIABILITIES AND STOCKHOLDER'S DEFICIENCY
 
                         
CURRENT LIABILITIES:
                       
                         
Notes Payable -Related Party, Current Portion
 
$
1,716,578
   
$
728,001
     
106,349
 
Accounts Payable
   
668,866
     
548,501
     
551,175
 
Accrued Expenses
   
963,669
     
858,135
     
1,429,098
 
Total Current Liabilities
   
3,349,113
     
2,134,637
     
2,086,622
 
                         
LONG TERM LIABILITIES
                       
Notes Payable, Related Parties Less Current Portion
   
-
     
-
     
795,785
 
Bonds Payable – Related Parties, net of $0, $0 and $502,465 discount
   
-
     
-
     
997,535
 
Derivative Liability
   
-
     
-
     
850,753
 
Total Long Term Liabilities
   
-
     
-
     
2,644,073
 
Total Liabilities
   
3,349,113
     
2,134,637
     
4,730,695
 
                         
STOCKHOLDER’S DEFICIENCY:
                       
Preferred stock, $.0001 par value; 10,000,000 shares authorized; none issued and outstanding
   
-
     
-
     
-
 
Common stock, par value $0.0001, 100,000,000 shares authorized, 8,040,000, 6,000,000 and 5,318,151 issued and outstanding at June 30, 2014 and December 31, 2013 and 2012, respectively(1)
   
804
     
600
     
532
 
Additional paid-in capital
   
17,788,110
     
17,867,546
     
12,817,122
 
Accumulated Deficit
   
(20,403,635
)
   
(19,521,126
)
   
(17,373,765
)
Other Comprehensive Income, net
   
(16,109
)
   
(31,190
)
   
188,280
 
Total Stockholder’s (Deficit)
   
(2,630,830
)
   
(1,684,170
)
   
(4,367,831
)
                         
TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY
 
$
718,283
     
450,467
     
362,864
 
 
(1) As a result of the Share Exchange, the former shareholders of DanDrit Denmark became the controlling shareholders of the Company. The Share Exchange was accounted for as a reverse takeover/recapitalization effected by a share exchange, wherein DanDrit Denmark is considered the acquirer for accounting and financial reporting purposes. The capital, share price, and earnings per share amount in these consolidated financial statements for the period prior to the reverse merger were restated to reflect the recapitalization in accordance with the exchange ratio established in the merger.
 
 
You should carefully consider and evaluate all of the information in this prospectus, including the risk factors listed below. Risks and uncertainties in addition to those we describe below, that may not be presently known to us, or that may also harm our business and operations. If any of these risks occur, our business, results of operations and financial condition could be harmed, the price of our common stock could decline, and future events and circumstances could differ significantly from those anticipated in the forward-looking statements contained in this prospectus.
 
All references to DanDrit’s drugs and vaccine candidates in this section refer to DanDrit drugs and vaccine candidates that DanDrit developed in-house.
 
RISKS ASSOCIATED WITH DANDRIT’S BUSINESS AND INDUSTRY
 
DanDrit lacks an established operating history on which to evaluate its business and determine if it will be able to execute our business plan, and can give no assurance that operations will result in profits.
 
DanDrit was formed in Delaware in January 2011 as a vehicle to pursue a business combination through the acquisition of, or merger with, an operating business.  
 
On February 12, 2014, the Company completed the Share Exchange as described herein, as a result of which it adopted the business and management of DanDrit Denmark.
 
DanDrit has a limited operating history that makes it difficult to evaluate its business.  DanDrit has not begun sales of its products, and cannot say with certainty when it will begin to achieve profitability.  No assurance can be made that DanDrit will ever derive meaningful revenues or become profitable.
 
DanDrit has incurred losses in prior periods and expect to incur losses in the future. DanDrit may never be profitable.
 
DanDrit’s independent registered public accounting firm has issued an unqualified opinion with an explanatory paragraph to the effect that there is substantial doubt about DanDrit’s ability to continue as a going concern. This unqualified opinion with an explanatory paragraph could have a material adverse effect on DanDrit’s business, financial condition, results of operations and cash flows.
 
DanDrit had net losses at June 30, 2014 and 2013 of $469,452 and $343,944, respectively and December 31, 2013 and 2012 of $2,147,361 and $2,427,649, respectively and an accumulated deficit at June 30, 2014 and December 31, 2013 of $20,403,635 and $19,521,126, respectively. DanDrit expects to continue to sustain losses for the foreseeable future.
 
As sales of DanDrit’s products have generated minimal operating revenues, DanDrit has relied on loans and on sales of its debt and equity securities to continue operations. If DanDrit is unable to raise funds through sales of its securities, there can be no assurance that DanDrit will be able to implement its business plan, generate sustainable revenue or ever achieve profitable operations. DanDrit expects to have operating losses until such time as it develops a substantial and stable revenue base. DanDrit cannot assure you that it can achieve or sustain profitability on a quarterly or annual basis in the future.
 
DanDrit may not be able to develop its vaccine candidates to yield satisfactory results and they may never be approved for use by regulatory authorities. If DanDrit is unable to successfully commercialize its vaccines, its prospects, financial position, results of operations and future opportunities will be materially adversely affected.
 
None of DanDrit’s vaccine candidates has completed full clinical development. Because DanDrit’s vaccine candidates generally belong to new classes of cell therapy, they will require extensive further development, testing and funding before we can seek regulatory approval for any of these vaccines.
 
DanDrit’s prospects in the short term, including DanDrit’s ability to generate revenue and make new strategic alliances, depend on DanDrit’s ability to develop, obtain regulatory approval for and commercialize its current vaccine candidates with satisfactory results. If DanDrit fails to develop its vaccine candidates, it will have a material adverse effect on DanDrit’s business, financial condition, results of operations and future growth opportunities.
 
There can be no assurance that DanDrit will succeed in implementing its Phase IIb/III clinical trials for advanced colorectal cancer so that the results of these clinical trials will support further preclinical or clinical studies, or that DanDrit will be able to develop new vaccine candidates or successfully commercialize any of those cancer vaccine candidates at a later time. If DanDrit does not do this, we cannot achieve our growth potential and this will have a material adverse effect on our prospects, financial position, results of operations and future opportunities.
 
 
Results of the early clinical trials do not insure future success.
 
The results of early clinical trials may not necessarily be indicative of future results. Achieving positive results in preclinical testing and early clinical trials does not constitute any assurance that in future clinical trials sufficient data can be obtained to document a vaccine candidate’s efficacy and safety. The safety and efficacy of a vaccine candidate in development must be supported by extensive data from preclinical studies and clinical trials.
 
A number of companies in the pharmaceutical industry and in the biopharmaceutical industry, including companies that have greater resources and more experience than DanDrit, have achieved significant negative results in clinical phase IIb and III trials, even after obtaining promising results in preclinical and early clinical studies. Results that are considered acceptable in early clinical studies may not be confirmed or may be interpreted differently in subsequent studies. DanDrit cannot predict whether the clinical phase IIb and III and other clinical trials that may be implemented will demonstrate sufficient efficacy and safety to obtain regulatory approval to market any of DanDrit’s vaccine candidates.
 
Negative or non-satisfactory results of clinical trials involving DanDrit’s vaccine candidates could lead to DanDrit or its collaborators having to perform additional nonclinical and/or clinical trials, which could result in higher costs and significantly delay the marketing authorization application for such vaccine candidates by the regulatory authority, or could lead to an application for a more narrowly defined use, or another indication for the vaccine candidate than originally expected. Such results could also lead to the complete elimination of a vaccine candidate. If any of these risks materialize, it could have a material adverse effect on DanDrit’s business, financial condition, results of operations and future growth opportunities.
 
We are a clinical-stage biopharmaceutical company which makes it difficult to assess our future viability.
 
We are a clinical-stage biopharmaceutical company. We have not yet demonstrated an ability to successfully overcome many of the risks and uncertainties frequently encountered by companies in new and rapidly evolving fields, particularly in the biopharmaceutical area. For example, to execute our business plan, we will need to successfully:
 
 
execute on product candidate development activities;
     
 
obtain required regulatory approvals for the development and commercialization of our product candidates;
     
 
maintain, leverage and expand our intellectual property portfolio;
     
 
gain market acceptance for our products;
     
 
develop and maintain any strategic relationships we elect to enter into; and;
     
 
manage our spending as costs and expenses increase due to preclinical development, clinical trials, regulatory approvals and commercialization.
 
If we are unsuccessful in accomplishing these objectives, we may not be able to develop product candidates, raise capital, expand our business or continue our operations.
 
DanDrit will be dependent on collaboration and licensing arrangement to develop and commercialize its products. These relationships may be unsuccessful and may not result in the development of vaccine candidates. In that case, our business, financial condition and growth opportunities will be materially adversely affected.
 
DanDrit expects to depend on collaboration and licensing agreements with third parties who we expected will provide additional personnel and other resources and funding required to develop and commercialize its products. Until these relationships are established, our plans for developing some of our vaccines may be uncertain. There can be no assurance that DanDrit will be able to enter into or maintain these agreements, that the results of these agreements will further the development of a vaccine, or that DanDrit will receive income from these agreements. Furthermore, collaborators that we anticipate may enter into agreements with us may change their priorities; make reallocation of resources; terminate the agreements; end or further delay the development of vaccine candidates; downgrade or change plans or strategies for regulatory approval or commercialization of the vaccine candidate; find it difficult to retain key employees; or be taken over by companies that are our competitors.
 
We expect that these collaboration and licensing agreements will entitle us to milestone payments and a percentage of sales related to the vaccine candidates that are commercialized. If a third party with which DanDrit has established a collaboration or licensing arrangement stops the development of a vaccine candidate, there can be no assurance that all rights in respect of the vaccine candidate will be reassigned to us. A transfer of these rights may be delayed for various reasons, which may result in the delay of all work performed for the vaccine candidate.
 
 
Since we are dependent on third parties to develop and commercialize our product candidates, any change in these anticipated relationships will have a material adverse effect on our business, financial condition, and future growth opportunities.
 
Regulatory requirements and regulations could have a material adverse effect on DanDrit.
 
DanDrit’s products are subject to extensive regulatory requirements, including public and/or regulatory limits set by the FDA and the European Medicines Agency (“EMA”). These laws and regulations, including those relating to reporting on safety, product safety and advertising and marketing of products cover all aspects of DanDrit’s business.
 
DanDrit and/or any future third party with which it has an effective collaboration or licensing agreement may be subject to changes in applicable governmental regulations and/or regulatory framework and be subject to additional or more onerous restrictions, which may make it necessary to make changes to personnel, facilities or procedures that could result in increased costs and adversely affect DanDrit’s business activities, including the development and commercialization of DanDrit’s vaccine candidates.
 
If DanDrit or its affiliates do not comply with applicable regulatory requirements or comply with significant legislative changes, DanDrit or its affiliates may be fined or risk having regulatory approvals suspended or withdrawn, risking recall or seizure of products, restrictions on activities and/or civil or criminal prosecution, which could have a material adverse effect on DanDrit’s business, financial condition, results of operations and future growth opportunities. Furthermore, we cannot guarantee that our vaccine candidates will be approved by the regulating agencies.
 
As long as the relevant regulatory authorities have not considered and approved applications for DanDrit’s vaccine candidates (New Drug Application (NDA) or equivalent) DanDrit and its affiliates cannot commercialize DanDrit’s vaccine candidates. Production and marketing of DanDrit’s products and DanDrit’s ongoing research and development activities are subject to rules set by numerous public authorities throughout the world. The regulatory authorities of each country can set their own requirements and may refuse to approve a product or may require additional data before approving a product, even if the product is approved by another regulating agency. Approvals may include restrictions on the marketing or use of products, which could adversely affect the amount of DanDrit’s revenue from the sale of those products.
 
We are conducting, and may in the future conduct, clinical trials for MCV or any future product candidates in sites outside the United States and the FDA may not accept data from trials conducted in such locations.
 
We have conducted, and may in the future choose to conduct, one or more of our clinical trials outside of the United States. Although the FDA may accept data from clinical trials conducted outside the United States, acceptance of this data is subject to certain conditions imposed by the FDA. For example, the clinical trial must be well designed and conducted and performed by qualified investigators in accordance with ethical principles. The study population must also adequately represent the U.S. population, and the data must be applicable to the U.S. population and U.S. medical practice in ways that the FDA deems clinically meaningful. Generally, the patient population for any clinical studies conducted outside of the United States must be representative of the population for whom we intend to label the product in the United States. In addition, while these clinical trials are subject to the applicable local laws, FDA acceptance of the data will be dependent upon its determination that the studies also complied with all applicable U.S. laws and regulations. There can be no assurance the FDA will accept data from trials conducted outside of the United States. If the FDA does not accept the data from our clinical trial conducted outside the United States, it would likely result in the need for additional trials within the United States, which would be costly and time-consuming and delay or permanently halt our development of MCV or any future vaccine candidates.
 
In connection with the anticipated filing of our IND application with the FDA, we plan to submit trial results for trials we did not sponsor, which the FDA may refuse to consider.

DanDrit was only a sponsor of one of the clinical trials completed to date for MCV and while DanDrit Denmark employees and certain affiliates were closely involved in the design of the studies and the analysis and interpretation of the resulting data of all three studies. As a result, DanDrit intends to present all applicable data with respect to the current trials that is available to it, regardless of DanDrit’s specific role in any one of the trials.  There are no assurances that the FDA will accept any data for any clinical trial in which it was not a sponsor or principal investigator that DanDrit submits in support of its IND application.
 
There can be no assurance that regulators will complete their review process in a timely manner, or that DanDrit vaccine candidates will obtain regulatory approval.
 
If DanDrit or any third party with which we have an effective collaboration or licensing agreement experience difficulties or delays in obtaining regulatory approvals, the development and commercialization of our vaccine candidates may be significantly delayed or even discontinued. Such difficulties or delays could result in significantly increased development costs and/or a delay or elimination of payments to us from our collaborators. This would have a material adverse effect on our business, financial condition, results of operations and future growth opportunities.
 
DanDrit will be dependent on external suppliers of certain services and technologies.
 
DanDrit will be dependent on a number of external parties such as contract laboratories and clinical research organizations, and in some cases our collaborators to:
 
 
Implement preclinical studies (pharmacology, toxicology testing and safety pharmacological evaluations).
     
 
Provide DanDrit with vaccine materials and support DanDrit’s activities related to preclinical and clinical studies.
     
 
Implement, inspect and/or monitor some or all aspects of the preclinical or clinical studies with DanDrit’s product candidates.
     
 
Ensure compliance with regulatory requirements such as Good Clinical Practice (“GCP”), Good Manufacturing Practice (“GMP”) and Good Laboratory Practices (“GLP”).
     
 
Deliver IT services.
     
 
Produce vaccine drugs and vaccines in accordance with GMP. The third parties DanDrit depends on may not be available when needed, or might not, if available, comply with all statutory and contractual requirements, and / or otherwise provide their services in a timely manner or in an acceptable manner.
 
 
DanDrit is dependent on its ability to recruit and retain qualified scientific and management personnel.
 
Recruiting and retaining qualified scientific and management personnel for the planning and execution of research and development; preparation of applications for intellectual property rights and regulatory approvals; and negotiating and maintaining cooperation with existing and new partners is essential for DanDrit.
 
While DanDrit has not thus far experienced any difficulty in recruiting and retaining qualified scientific and management personnel, DanDrit may in the future require additional expertise and manpower in areas such as preclinical trials, management of clinical trials, regulatory affairs, marketing, business development and management of partnerships. There can be no assurance that DanDrit will continue to be able to attract and retain such persons in light of demand for experienced employees from numerous pharmaceutical companies, chemical companies, specialized biopharmaceutical companies, universities and other research institutions. DanDrit’s employment contracts contain no limitation on competition that would prevent DanDrit’s current employees from being employed by DanDrit’s competitors or partners, if they choose to leave DanDrit. Inability to obtain or develop such expertise, or hire the employees they need, on reasonable terms, could have a material adverse effect on DanDrit’s business, financial condition, results of operations and future growth opportunities.
 
If our employees commit fraud or other misconduct, including noncompliance with regulatory standards, our business may experience serious adverse consequences.
 
DanDrit is exposed to the risk of employee fraud or other misconduct. Misconduct by employees could include intentional failures to comply with FDA regulations, to provide accurate information to the FDA, to comply with manufacturing standards we have established, to comply with federal and state health-care fraud and abuse laws and regulations, to report financial information or data accurately or to disclose unauthorized activities to us.
 
In particular, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements. Employee misconduct could also involve the improper use of information obtained in the course of clinical trials, which could result in regulatory sanctions and serious harm to our reputation. We have adopted a Code of Business Conduct and Ethics but it is not always possible to identify and deter employee misconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant fines or other sanctions.
 
DanDrit’s products may not achieve market acceptance. This would have a material adverse effect on our business, financial condition, results of operations and future growth opportunities.
 
The drugs DanDrit or its collaborators may develop, may not gain market acceptance among physicians, patients, third-party payors and the medical community, even if they are approved for marketing. The degree of market acceptance of the products approved for sale depends on a number of factors, including:
 
 
The ability of DanDrit or its collaborators to demonstrate the clinical efficacy, safety and benefits of the products.
     
 
The ability of DanDrit or its collaborators to demonstrate that the product has advantages over existing therapies or new alternative treatments.
     
 
The frequency and severity of any adverse effects arising from the use of the products.
     
 
The price of the products.
     
 
The subsidies DanDrit receives.
     
 
Efficacy within the therapeutic range for the illnesses the products are directed towards.
     
 
Patient comfort and user administration.
     
 
Requirements for marking.
     
 
The level of support for marketing and distribution.
 
 
We have no control over most of these factors. Furthermore, it may be difficult for us, to the extent that competitors are able to commercialize competing products before our vaccine candidates obtain regulatory approval, to develop a market for a vaccine because doctors, patients or third-party payors may have become accustomed to using a competing, existing product or for other reasons, even though our drug may be more effective or has other advantages.
 
If any of the vaccines we develop fail to achieve market acceptance in the future, we may not be able to generate significant revenue, which would have a material adverse effect on our business, financial condition, results of operations and future growth opportunities.
 
The use of DanDrit’s drugs or vaccine candidates may lead to unforeseen side effects. If any of our drugs or vaccine candidates is deemed to be unsafe, our business, financial condition, results of operations and future growth opportunities could be materially adversely affected.
 
All drugs are associated with a risk of allergic, immunologic genes or hyper-sensitivities. We test for allergic and immunological genes actions in preclinical and clinical studies, but if any of our products cause other allergic or immunological reactions than those considered acceptable by patients, doctors or regulatory authorities, we or our collaborators may be required to conduct additional clinical trials that will cause delays and increase costs for the development of a product, or development may have to be terminated or suspended on the grounds that participants will be exposed to unacceptable health risks.
 
Even in cases where pre-clinical or clinical studies have been successful, or received regulatory approval, a product can later prove to be unsafe. The incidence of adverse events may make it necessary for us and for our collaborators to carry out further investigations and studies. If a product is determined to be unsafe, we and our collaborators can be fined or risk having regulatory approvals suspended or withdrawn, be required to cease selling activities relating to the product, be required to recall the product, be subject to seizure of products, or be exposed to civil or criminal prosecution. Any of these results could have a material adverse effect on our business, financial condition, results of operations and future growth opportunities.
 
Third party reimbursement and reform measures on health care could have a material adverse effect on the commercial success of DanDrit’s vaccine candidates.
 
Market acceptance of DanDrit’s vaccine candidates depends in part on the extent to which the public and private health insurance and other third-party payors will subsidize DanDrit’s drugs.
 
Governments, insurance companies and health organizations are increasingly seeking to reduce healthcare costs by limiting coverage, price and reimbursement levels of new vaccine products as well as in some cases rejecting coverage. Reimbursement practices vary significantly from country to country, and some countries require that products undergo a lengthy review by the authorities before they meet the public support requirements.
 
In the United States, in Canada and in many other countries, pricing and/or profitability of some or all prescription pharmaceuticals and biopharmaceuticals are subject to varying degrees of government control. Healthcare reform and controls on healthcare spending may limit the price we charge for any products and the amounts thereof that we can sell. In particular, in the United States, the federal government and private insurers have changed and have considered ways to change, the manner in which healthcare services are provided. In March 2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, or collectively, PPACA, became law in the United States. PPACA substantially changes the way healthcare is financed by both governmental and private insurers and significantly affects the healthcare industry. The provisions of PPACA of importance to our product candidates include the following:
 
 
an annual, nondeductible fee on any entity that manufactures or imports specified branded prescription drugs and biologic agents, apportioned among these entities according to their market share in certain government healthcare programs;
     
 
an increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program, to 23.1% and 13.0% of the average manufacturer price for most branded and generic drugs, respectively;
     
 
expansion of healthcare fraud and abuse laws, including the False Claims Act and the Anti-Kickback Statute, new government investigative powers, and enhanced penalties for noncompliance;
 
 
 
a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for a manufacturer’s outpatient drugs to be covered under Medicare Part D;
     
 
extension of a manufacturer’s Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed care organizations;
     
 
expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to additional individuals and by adding new mandatory eligibility categories for certain individuals with income at or below 133% of the federal poverty level beginning in 2014, thereby potentially increasing a manufacturer’s Medicaid rebate liability;
     
 
expansion of the entities eligible for discounts under the Public Health Service pharmaceutical pricing program;
     
 
new requirements under the federal Open Payments program and its implementing regulations;
     
 
a new requirement to annually report drug samples that manufacturers and distributors provide to physicians; and
     
 
a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research.
 
In addition, other legislative changes have been proposed and adopted since PPACA was enacted. These changes include aggregate reductions to Medicare payments to providers of up to 2% per fiscal year, which went into effect on April 1, 2013. In January 2013, President Obama signed into law the American Taxpayer Relief Act of 2012, which, among other things, further reduced Medicare payments to several types of providers and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. These new laws may result in additional reductions in Medicare and other healthcare funding, which could have a material adverse effect on our customers and accordingly, our financial operations.
 
We anticipate that PPACA, as well as other healthcare reform measures that may be adopted in the future, may result in more rigorous coverage criteria and additional downward pressure on the reimbursement we may receive for any approved product. Moreover, payment methodologies may be subject to changes in healthcare legislation and regulatory initiatives. For example, the Middle Class Tax Relief and Job Creation Act of 2012 requires the Centers for Medicare & Medicaid Services, or CMS, to reduce the Medicare clinical laboratory fee schedule by 2% in 2013, which in turn will serve as a base for 2014 and subsequent years. CMS also recently proposed to re-examine payment amounts for tests reimbursed under the Medicare clinical laboratory fee schedule due to changes in technology and, in addition, proposed to bundle the Medicare payments for certain laboratory tests ordered while a patient received services in a hospital outpatient setting. Such changes went into effect January 1, 2014. Levels of reimbursement may be impacted by current and future legislation, regulation or reimbursement policies of third-party payors in a manner that may harm the demand and reimbursement available for our products, which in turn, could harm our future product pricing and sales. Any reduction in reimbursement from Medicare and other government programs may result in a similar reduction in payments from private payors. The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability or commercialize our products.
 
There may be delays or difficulties in the recruitment and monitoring of patients in clinical trials. Any such delays could have a material adverse effect on DanDrit’s business, financial condition, results of operations and future growth opportunities.
 
All clinical development of new vaccine candidates depends on the recruitment of volunteer suitable patients for clinical trials. While DanDrit has not experience difficulties in recruiting patients to date, the ability to recruit patients depends on certain factors, including the prevalence of the disease in the population and it may be more difficult to find a sufficient number of patients to participate in clinical trials for drugs being developed for a disease that is common among the general population. Even if a disease is frequent among the population, there may be a number of other companies developing drugs that target the same disease who may eventually have more success in recruiting among the total group of potential patients for their clinical studies. In addition, trials in which patients may receive a placebo are typically more difficult to populate. DanDrit’s next clinical trial will include a comparative placebo arm. While DanDrit currently plans to address these potential difficulties, potentially through 2:1 randomization that increases a patient’s potential to receive active treatment vs. a placebo, if we or our collaborators find it difficult to recruit a sufficient number of patients to participate in clinical trials for one of its vaccine candidates DanDrit and/or its collaborators may have to postpone or discontinue ongoing clinical trials. Delays may also result in increased costs for clinical studies and may affect the implementation of studies required for a vaccine candidate’s approval. Delay or complete termination of a clinical trial program could have a material adverse effect on DanDrit’s business, financial condition, results of operations and future growth opportunities.
 
 
DanDrit may not be able to make, or cause others to conduct, animal testing in the future. This could have a material adverse effect on our research and development work.
 
Research into dendritic cell vaccines does not generally involve animals. But, certain aspects of DanDrit’s biotechnology research and development may be carried out on animals. Changes to laws and regulations, recognized clinical procedures, or experimental protocols may have a negative impact on this research and development. Pressure from society, which may lead to restrictions on the use of animals or result in actions against DanDrit, its affiliates or its clinical research organizations from groups of people or individuals who are against animal testing may also have a material adverse effect on research and development work.
 
DanDrit faces extensive competition. If our vaccine candidates cannot compete successfully, our business, financial condition, results of operations and future growth opportunities could be materially, adversely affected.
 
There is extensive competition in the biopharmaceutical industry and the technology is developing rapidly. DanDrit is developing a vaccine for the treatment of advanced colorectal cancer, where competing products may be introduced. If these newly developed products are more efficient, cheaper, more patient-friendly, safer, or better placed than DanDrit’s vaccine candidates, or if DanDrit’s competitors develop drugs that reduce or eliminate the need for DanDrit’s vaccine candidates, such competition could reduce or eliminate DanDrit’s commercial opportunities. Many of DanDrit’s competitors have substantially greater financial, technical and human resources than DanDrit and significantly more experience than DanDrit with preclinical and clinical research and development and in obtaining regulatory approval of pharmaceutical products.
 
DanDrit’s drugs may face competition as a result of many factors, including the route of administration (e.g. oral administration vs. injection), the availability and cost of production, efficiency of DanDrit’s partners’ marketing and sales efforts as well as the price of DanDrit’s products. DanDrit has limited or no previous experience in these areas. DanDrit’s inability to compete effectively would have a material adverse effect on DanDrit’s business, financial condition, results of operations and future growth opportunities.
 
DanDrit is likely to be exposed to product liability claims. If product liability lawsuits are successfully brought against us, our insurance may be inadequate. If a judgment were to exceed our insurance coverage, our business could be materially, adversely affected.
 
DanDrit will be exposed, by virtue of the nature of its business, to the risk of potential product liability claims, which is a natural part of the clinical development, manufacture and marketing of drugs. Even in cases where DanDrit has granted licenses to third parties to manufacture and sell its products, there can be no assurance that DanDrit will not be included in any product liability claims relating to these medicines, or claims by third parties, including DanDrit’s partners, for indemnity or other compensation from DanDrit in connection with any such claims.
 
We plan to obtain product liability insurance coverage once our clinical trials commence. However, our insurance coverage may not be sufficient to reimburse us for any expenses or losses we may suffer. Moreover, insurance coverage is becoming increasingly expensive, and, in the future, we may not be able to maintain insurance coverage at a reasonable cost or in sufficient amounts to protect us against losses due to liability. If and when we obtain marketing approval for our product candidates, we intend to expand our insurance coverage to include the sale of commercial products; however, we may be unable to obtain this product liability insurance on commercially reasonable terms. On occasion, large judgments have been awarded in class action lawsuits based on drugs that had unanticipated side effects. The cost of any product liability litigation or other proceedings, even if resolved in our favor, could be substantial. A successful product liability claim or series of claims brought against us could cause our share price to decline (assuming a trading market in our common stock is established) and, if judgments exceed our insurance coverage, could decrease our cash and adversely affect our business.
 
We will need substantial additional funds to support our operations, and such funding may not be available to us on acceptable terms, or at all, which would force us to terminate, delay, reduce or suspend our operations, research and development programs and other commercialization efforts.
 
The completion of the development and the potential commercialization of MCV and any future product candidates, should they receive approval, will require substantial funds. As of December 31, 2013 and June 30, 2014, we had approximately $96,262 and $328,13241 in cash and cash equivalents, respectively. We project that cash will be derived from revenues received from eight patients each month beginning November 1, 2014 in connection with the MyTomorrows program and committed financing secured by Paseco ApS for DKK 2,000,000 (the “Paseco Note”) or approximately $369,920, if necessary. This note accrues annual interest at 5% per annum and is due and payable on February 1, 2015. Our projected revenues and cash from financing activities for the next 12 months are approximately $980,000 and $1,300,000, respectively, and our projected expenses are approximately $1,700,000.  On April 29, 2014, DanDrit Denmark and Paseco amended the Paseco Note to extend the term to February 1, 2015, with a further extension permitted at the Company’s option for an additional year with an increase in the interest rate to 7.00% per annum. We believe that the anticipated revenues and financing described above will supply us with sufficient cash and cash equivalents to sustain our operations for the next 12 months based on our existing business plan. Our future financing requirements will depend on many factors, some of which are beyond our control, including the following:
 
 
the rate of progress and cost of our clinical studies;
     
 
the timing of, and costs involved in, seeking and obtaining approvals from the FDA and other regulatory authorities;
 
 
 
the cost of preparing to manufacture MCV on a larger scale;
     
 
the costs of commercialization activities if MCV or any future product candidate is approved, including product sales, marketing, manufacturing and distribution;
     
 
the degree and rate of market acceptance of any products launched by us or future partners;
     
 
the costs of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights;
     
 
our ability to enter into additional collaboration, licensing, commercialization or other arrangements and the terms and timing of such arrangements;
     
 
the emergence of competing technologies or other adverse market developments; and
     
 
the costs of attracting, hiring and retaining qualified personnel.
 
Other than the Paseco Note, we do not have any committed external source of funds or other support for our operational or development efforts. Until we can generate a sufficient amount of product revenue to finance our cash requirements, which we may never do, we expect to finance future cash needs through a combination of public or private equity offerings, debt financings, collaborations, strategic alliances, licensing arrangements and other marketing and distribution arrangements. Additional financing may not be available to us when we need it or it may not be available on favorable terms. If we raise additional capital through marketing and distribution arrangements or other collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish certain valuable rights to MCV or potential future product candidates, technologies, future revenue streams or research programs, or grant licenses on terms that may not be favorable to us. If we raise additional capital through public or private equity offerings, the ownership interest of our existing stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our stockholders’ rights.
 
If we raise additional capital through debt financing, we may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we are unable to obtain adequate financing when needed, we may have to delay, reduce the scope of, or suspend one or more of our clinical studies or research and development programs or our commercialization efforts.
 
Raising capital in the future could cause dilution to our existing shareholders, and may restrict our operations or require us to relinquish rights.
 
In the future, we may seek additional capital through a combination of private and public equity offerings, debt financings and collaborations and strategic and licensing arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms may include liquidation or other preferences that adversely affect your rights as a shareholder. Debt financing, if available, would result in increased fixed payment obligations and may involve agreements that include covenants limiting or restricting our ability to take specific actions such as incurring debt, making capital expenditures or declaring dividends. If we raise additional funds through collaboration, strategic alliance and licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams or product candidates, or grant licenses on terms that are not favorable to us.
 
We depend on intellectual property and the failure to protect our intellectual property could adversely affect our future growth and success. This would have a material adverse effect on our business, financial condition and results of operations.
 
We rely on patent, trademark and copyright law, trade secret protection, and confidentiality and other agreements with employees, customers, collaborators and others to protect our intellectual property. However, some of our intellectual property is not covered by any patent or patent application, and, despite precautions, it may be possible for third parties to obtain and use our intellectual property without authorization.
 
We do not know whether any patents will be issued from pending or future patent applications or whether the scope of the issued patents is sufficiently broad to protect our technologies or processes. The patent position of biotechnology companies is generally uncertain because it involves complex legal and factual considerations. The standards applied by the United States Patent and Trademark Office and foreign patent offices in granting patents are not always applied uniformly or predictably. For example, there is no uniform worldwide policy regarding patentable subject matter or the scope of claims allowable in biotechnology and pharmaceutical patents. Consequently, patents may not issue from our pending patent applications. As such, we do not know the degree of future protection that we will have on our proprietary products and technology.
 
We endeavor to aggressively protect our technologies through patents covering compositions of matter, drug targets and aspects of mechanism of action, drug product formulation, methods of use and methods of manufacture, and trade secrets. We have filed patent applications and in-licensed others with respect to our technology both domestically and internationally and anticipate filing multiple patent applications, in the future. While we believe that we will be able to secure adequate and enforceable patent protection for our products and technologies, there is no guarantee that patent protection can be obtained, and even if it is obtained that such patent protection will ultimately be deemed valid, sufficiently enforceable, sufficient to preclude competition or not infringe upon the rights of other parties. Furthermore, the laws of some foreign countries may not protect intellectual property rights to the same extent as do the laws of the United States and Denmark.
 
 
The patents protecting our proprietary technologies expire after a period of time. Currently, our patents have expiration dates ranging from 2021 through 2024. Although we have attempted to incorporate technology from our core patents into specific patented product applications, product designs and packaging to extend the lives of our patents, this approach may not be successful in protecting our proprietary technology. If we are not successful in protecting our proprietary technology, it could have a material adverse effect on our business, financial condition and results of operations.
 
We may not be successful in protecting our proprietary rights. Any infringement upon our intellectual property rights could have an adverse effect on our ability to develop our products and sell them commercially.
 
Issued patents covering one or more of our product candidates could be found invalid or unenforceable if challenged in court. If that were to happen, our business would be adversely impacted.
 
If we were to initiate legal proceedings against a third party to enforce a patent covering one of our product candidates, the defendant could counterclaim that our patent is invalid and/or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity and/or unenforceability are commonplace. Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, for example, lack of novelty, obviousness or non-enablement. Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld relevant information from the U.S. Patent and Trademark Office, or made a misleading statement, during prosecution. The outcome following legal assertions of invalidity and unenforceability during patent litigation is unpredictable. With respect to the validity question, for example, we cannot be certain that there is no invalidating prior art, of which we and the patent examiner were unaware during prosecution. If a defendant were to prevail on a legal assertion of invalidity and/or unenforceability, we would lose at least part, and perhaps all, of the patent protection on one or more of our product candidates or certain aspects of our platform technology. Such a loss of patent protection could have a material adverse impact on our business.
 
We may infringe on the intellectual property rights of others, which may prevent or delay our product development efforts and stop us from commercializing or increase the costs of commercializing our products.
 
Our commercial success depends significantly on our ability to operate without infringing the patents and other intellectual property rights of third parties. For example, there could be issued patents of which we are not aware that our products infringe. There also could be patents that we believe we do not infringe, but that we may ultimately be found to have infringed. Moreover, patent applications are in some cases maintained in secrecy until patents are issued. The publication of discoveries in the scientific or patent literature frequently occurs substantially later than the date on which the underlying discoveries were made and patent applications were filed. Because patents can take many years to issue, there may be currently pending applications of which we are unaware that may later result in issued patents that our products infringe. For example, pending applications may exist that provide support or can be amended to provide support for a claim that results in an issued patent that our product infringes.
 
Third parties may assert that we are employing their proprietary technology without authorization. If a court held that any third-party patents are valid, enforceable and cover our products or their use, the holders of any of these patents may be able to block our ability to commercialize our products unless we obtained a license under the applicable patents, or until the patents expire. We may not be able to enter into licensing arrangements or make other arrangements at a reasonable cost or on reasonable terms. Any inability to secure licenses or alternative technology could result in delays in the introduction of our products or lead to prohibition of the manufacture or sale of products by us.
 
Unfavorable outcomes in intellectual property litigation could limit our research and development activities and/or our ability to commercialize certain products.
 
If third parties successfully assert intellectual property rights against us, we might be barred from using certain aspects of our technology, or barred from developing and commercializing certain products. Prohibitions against using certain technologies, or prohibitions against commercializing certain products, could be imposed by a court or by a settlement agreement between us and a plaintiff. In addition, if we are unsuccessful in defending against allegations of patent infringement or misappropriation of trade secrets, we may be forced to pay substantial damage awards to the plaintiff. There is inevitable uncertainty in any litigation, including intellectual property litigation. There can be no assurance that we would prevail in any intellectual property litigation, even if the case against us is weak or flawed. If litigation leads to an outcome unfavorable to us, we may be required to obtain a license from the patent owner, in order to continue our research and development programs or to market our product(s). It is possible that the necessary license will not be available to us on commercially acceptable terms, or at all. This could limit our research and development activities, our ability to commercialize certain products, or both.
 
 
Most of our competitors are larger than we are and have substantially greater resources. They are, therefore, likely to be able to sustain the costs of complex patent litigation longer than we could. In addition, the uncertainties associated with litigation could have a material adverse effect on our ability to raise the funds necessary to continue our clinical trials, continue our internal research programs, in-license needed technology, or enter into strategic partnerships that would help us bring our product candidates to market.
 
In addition, any future patent litigation, interference or other administrative proceedings will result in additional expense and distraction of our personnel. An adverse outcome in such litigation or proceedings may expose us or any future collaborators to loss of our proprietary position, expose us to significant liabilities, or require us to seek licenses that may not be available on commercially acceptable terms, if at all.
 
Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect our products.
 
As is the case with other pharmaceutical companies, our success is heavily dependent on intellectual property, particularly patents. Obtaining and enforcing patents in the biopharmaceutical industry involves both technological and legal complexity. Therefore, obtaining and enforcing pharmaceutical patents is costly, time-consuming and inherently uncertain. In addition, the United States has recently enacted and is currently implementing wide-ranging patent reform legislation. The United States Supreme Court has ruled on several patent cases in recent years, either narrowing the scope of patent protection available in certain circumstances or weakening the rights of patent owners in certain situations. In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once obtained. Depending on decisions by the U.S. Congress, the federal courts, and the U.S. PTO, the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce our existing patents and patents that we might obtain in the future.
 
Confidentiality agreements with employees and third parties may not prevent unauthorized disclosure of trade secrets and other proprietary information.
 
In addition to patents, we rely on other methods to protect our trade secrets, technical know-how, and proprietary information. In the course of our research and development activities and our business activities, we often rely on confidentiality agreements to protect our proprietary information. Such confidentiality agreements are used, for example, when we talk to vendors of laboratory or clinical development services or potential collaborators. We take steps to protect our proprietary information, and our confidentiality agreements are carefully drafted to protect our proprietary interests. Nevertheless, there can be no guarantee that an employee or an outside party will not make an unauthorized disclosure of our proprietary confidential information. This might happen intentionally or inadvertently. It is possible that a competitor will make use of such information in spite of any legal action we might take against persons making such unauthorized disclosures.
 
Trade secrets are difficult to protect. Although we use reasonable efforts to protect our trade secrets, our employees, consultants, contractors, or outside collaborators might intentionally or inadvertently disclose our trade secret information to competitors. Enforcing a claim that a third party illegally obtained and is using any of our trade secrets is expensive and time consuming, and the outcome is unpredictable. In addition, courts outside the United States sometimes are less willing than U.S. courts to protect trade secrets. Moreover, our competitors may independently develop equivalent knowledge, methods and know-how.
 
Foreign currency fluctuations could adversely impact financial performance.
 
Our reporting currency is the United States dollar. Because of our activities in Denmark, the United Kingdom and continental Europe, we are exposed to fluctuations in foreign currency rates. We may manage the risk to such exposure by entering into foreign currency futures and option contracts. Foreign currency fluctuations may have a significant effect on our operations in the future.
 
 
 Assuming that our vaccine candidates receive regulatory approval and we begin sales of these products, our results may fluctuate due to certain regulatory, marketing and competitive factors over which we have little or no control.
 
Assuming that our vaccine candidates receive regulatory approval and we begin the sale of these products, the factors listed below, some of which we cannot control, may cause our revenue and results of operations to fluctuate significantly:
 
 
Actions taken by regulatory bodies relating to the verification, registration or health effects of our products.
     
 
The extent to which existing and newly developed products obtain market acceptance.
     
 
The timing and size of customer purchases.
     
 
Customer concerns about the stability of our business, which could cause them to seek alternatives to our solutions and products; and
     
 
Increases in raw material costs.
 
We will incur significant costs as a result of operating as a public company, and our management may be required to devote substantial time to compliance initiatives.
 
As a public company, we will incur significant legal, accounting and other expenses which we estimate to be in excess of $300,000 annually. In addition, the Sarbanes-Oxley Act, as well as rules subsequently implemented by the SEC, have imposed various requirements on public companies, including requiring establishment and maintenance of effective disclosure and financial controls as well as mandating certain corporate governance practices. Our management and other personnel will devote a substantial amount of time and financial resources to these compliance initiatives.
 
 If we fail to staff our accounting and finance function adequately, or maintain internal control systems adequate to meet the demands that are placed upon us as a public company, we may be unable to report our financial results accurately or in a timely manner and our business and stock price, assuming that a market for our stock develops, may suffer. The costs of being a public company, as well as diversion of management’s time and attention, may have a material adverse effect on our future business, financial condition and results of operations.
 
A significant portion of our assets and the majority of our officers and directors are located outside of the United States and therefore it may be difficult for an investor to enforce within the United States any judgments obtained against us or such officers and directors.
 
A significant portion of our assets are located outside of the United States. In addition, the majority of our officers and directors are nationals and/or residents of countries other than the United States, and all or a substantial portion of such persons’ assets are located outside the United States. As a result, it may be difficult for an investor to effect service of process or enforce within the United States any judgments obtained against us or such officers or directors, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state thereof. In addition, there is uncertainty as to whether the courts of other jurisdictions would recognize or enforce judgments of United States courts obtained against us or our directors and officers predicated upon the civil liability provisions of the securities laws of the United States or any state thereof, or be competent to hear original actions brought in other jurisdictions against us, or such officers and directors predicated upon the securities laws of the United States or any state thereof.
 
RISKS RELATED TO OWNERSHIP OF OUR COMMON STOCK
 
There is currently no trading market for our common stock and we cannot guarantee you that a trading market will develop. You may be unable to sell your shares of our common stock if you need to liquidate your investment.
 
While our class of common stock is registered under the Exchange Act and we are a full SEC “reporting company,” our individual shares of common stock are not currently registered under the securities laws of any state or other jurisdiction, and none of such shares currently may publicly trade through exemptions from such registration. Accordingly there is no public trading market for our common stock. Further, we cannot guarantee you that a public trading market will develop in the foreseeable future. Currently, outstanding shares of our common stock cannot be offered, sold, pledged or otherwise transferred unless registered pursuant to, or exempt from registration under, the Securities Act and any other applicable federal or state securities laws or regulations. Compliance with the criteria for securing exemptions under federal securities laws and the securities laws of the various states is extremely complex. If you purchase shares of our common stock, there may be no market in which to sell them if you need to liquidate your investment in the future or the transfer or sale you wish to make may not comply with federal or state securities laws and would, therefore, be prohibited.
 
 
If a public market for our common stock develops, it may be volatile. This may affect the ability of our investors to sell their shares as well as the price at which they sell their shares.
 
If a market for our common stock develops, the market price for shares of our common stock may be significantly affected by factors such as variations in quarterly and yearly operating results, general trends in the biotechnology industry, and changes in state or federal regulations affecting us and our industry.
 
Furthermore, in recent years the stock market has experienced extreme price and volume fluctuations that are unrelated or disproportionate to the operating performance of the affected companies. Such broad market fluctuations may adversely affect the market price of our common stock, if a market for it develops.
 
As an “emerging growth company” under the JOBS Act, we are permitted to rely on exemptions from certain disclosure requirements.
 
We qualify as an “emerging growth company” under the JOBS Act. As a result, we are permitted to and may rely on exemptions from certain disclosure requirements. For so long as we are an emerging growth company, we will not be required to:
 
 
have an auditor report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act;
     
 
comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis);
     
 
submit certain executive compensation matters to shareholder advisory votes, such as “say-on-pay”, “say-on-frequency” and “say-on-golden parachute;” and
     
 
disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the Chief Executive’s compensation to median employee compensation.
 
In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We are not choosing to “opt out” of this provision. Section 107 of the JOBS Act provides that our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable. As a result of our election, not to “opt out” of Section 107, DanDrit’s financial statements may not be comparable to companies that comply with public company effective dates.
 
We will remain an “emerging growth company” until the last day of our fiscal year following the fifth anniversary of the date of our first sale of common equity securities pursuant to an effective registration under the Securities Act, or until the earliest of (i) the last day of the first fiscal year in which our total annual gross revenues exceed $1 billion, (ii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, which would occur if the market value of our ordinary shares that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three year period.
 
Until such time, however, we cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.
 
We have never paid dividends on our common stock.
 
We have never paid dividends on our common stock and do not presently intend to pay any dividends in the foreseeable future. We anticipate that any funds available for payment of dividends will be re-invested into the Company to further its business strategy. Because we do not anticipate paying dividends in the future, the only opportunity for our stockholders to realize the creation of value in our common stock will likely be through a sale of those shares.
 
 
The offering is being made on a best efforts basis with no minimum amount of shares required to be sold for the offering to proceed. If we are unable to raise the funds we need to fully implement our business plan, investors who participate in the offering may lose their entire investment.
 
In order to fully implement our business plan, we must raise $12,000,000 from this offering. However, our offering is being made on a best efforts basis with no minimum amount of shares required to be sold for the offering to proceed. If we raise only a nominal amount of proceeds we would likely be unable to implement our business plan, we may have to suspend or cease operations and investors who participate in this offering may lose their entire investments.
 
We arbitrarily determined the price of the common stock we are offering.
 
We determined the offering price of the common stock we are offering. The offering price does not bear any direct relationship to the value of our physical assets, the book value of our common stock, or any other generally accepted criteria of valuation. The price and other terms were based on a number of factors including, without limitation, estimates of our business potential and earnings prospects and the consideration of such potential earnings in relation to market valuations of comparable companies. The offering price is not an indication of the actual value of our common stock at the time of this offering.
 
Furthermore, if a market for our common stock develops, the price of our common stock following this offering may be highly volatile as the securities of emerging businesses often are. Factors such as our financial results and the introduction of new products by us or by our competitors, and various factors affecting the biotechnology industry generally, may have a significant impact on the market price of our securities. Additionally, in recent years, the stock market has experienced a high level of price and volume volatility and market prices for the securities of many companies, particularly of small and emerging growth companies, the common stock of which trade in the over-the-counter market, have experienced wide price fluctuations which have not necessarily been related to the operating performance of these companies.
 
The Company has not received any commitments to purchase the common stock under the Public Offering Prospectus. There is no minimum offering amount.
 
The Company will use its best efforts to sell all of the common stock offered under the Public Offering Prospectus. These sales may be made either directly by the Company, through its officers and directors, or with the assistance of the Placement Agents. No underwriter has been engaged in connection with the offering or performed any due diligence activities which would otherwise confirm the accuracy of our disclosures in the registration statement of which this prospectus is a part and our price of the offered common stock. None of the Company, the Placement Agents, or any other person, has made any commitment to purchase any of the shares offered hereby. Consequently, there can be no assurance that any of the shares will be sold. There is no minimum offering amount required for us to accept subscriptions for our Common Stock. To the extent that the net proceeds raised by the Company are substantially less than the maximum offering amount, the Company's opportunities would be severely diminished. In the event that an alternate source of financing is not obtained in a timely manner, those investors who participate in this offering risk the loss of their entire investments. In the event that we file a post-effective amendment to increase the offering amount pursuant to Rule 462(b) of the Securities Act, we plan to allocate the extra funds in strengthening our Phase II/III clinical trial with a larger sample size and in targeting patients with stage III colorectal cancer rather than metastatic (stage IV) colorectal cancer patients. See "Use of Proceeds," "Management’s Discussion and Analysis of Financial Condition and Results of Operations" and "Plan of Distribution."
 
We have the right to issue shares of preferred stock. If we were to issue preferred stock, it is likely to have rights, preferences and privileges that may adversely affect the common stock.
 
We are authorized to issue 10,000,000 shares of “blank check” preferred stock, with such rights, preferences and privileges as may be determined from time-to-time by our board of directors. No preferred stock is currently issued and outstanding. Our board of directors is empowered, without stockholder approval, to issue preferred stock in one or more series, and to fix for any series the dividend rights, dissolution or liquidation preferences, redemption prices, conversion rights, voting rights, and other rights, preferences and privileges for the preferred stock. No shares of preferred stock are presently issued and outstanding and we have no immediate plans to issue shares of preferred stock. The issuance of shares of preferred stock, depending on the rights, preferences and privileges attributable to the preferred stock, could adversely reduce the voting rights and powers of the common stock and the portion of the Company’s assets allocated for distribution to common stockholders in a liquidation event, and could also result in dilution in the book value per share of the common stock being offered. The preferred stock could also be utilized, under certain circumstances, as a method for raising additional capital or discouraging, delaying or preventing a change in control of the Company, to the detriment of the investors in the common stock being offered. We cannot assure you that the Company will not, under certain circumstances, issue shares of its preferred stock.
 
We may use the net proceeds from this offering in ways which differ from our estimates and with which you may not agree.
 
The discussion titled “Use of Proceeds”, which appears elsewhere in this prospectus, sets forth the way in which we expect to use the net proceeds of this offering. The discussion represents our estimates based upon our current plans, assumptions regarding industry and general economic conditions, and our anticipated future revenues and expenditures. The amounts and timing of our actual expenditures will depend on numerous factors, including market conditions, cash generated by our operations, business developments and the rate of our growth. We may find it necessary or advisable to use portions of the proceeds from this offering for purposes other than those stated in the Use of Proceeds discussion. Circumstances that may give rise to a change in the use of proceeds and the alternate purposes for which the proceeds may be used are also discussed in the section of this prospectus titled “Use of Proceeds”. You will not have an opportunity to evaluate the economic, financial or other information on which we base our decisions on how to use our proceeds. As a result, you and other shareholders may not agree with the decisions made by our management relating to the way in which the proceeds from this offering are used. See the discussion titled “Use of Proceeds” for additional information.
 
 
You will experience immediate dilution in the book value per share of the common stock you purchase.
 
Because the price per share of our common stock being offered is substantially higher than the book value per share of our common stock, you will experience substantial dilution in the net tangible book value of the common stock you purchase in this offering. Based on an assumed offering price of $5.00 per share, if you purchase shares of common stock in this offering, you will experience immediate and substantial dilution of $4.22 per share in the net tangible book value of the common stock at June 30, 2014. See the section titled “Dilution” below for a more detailed discussion of the dilution you will incur if you purchase common stock in this offering.
 
Penny stock regulations may impose certain restrictions on the marketability of our securities.
 
The SEC has adopted regulations which generally define “penny stock” to be any equity security that has a market price (as defined) less than $5 per share, is not listed on a national exchange and fails to meet other specific criteria, subject to certain exceptions. We anticipate that our common stock, when trading commences, will be subject to these regulations which impose additional sales practice requirements on broker-dealers who sell such securities to persons other than established customers and accredited investors (generally those with assets in excess of $1,000,000, excluding the net value of the person’s primary residence, or annual income exceeding $200,000, or $300,000 together with the investor’s spouse). For transactions covered by these rules, the broker-dealer must make a special suitability determination for the purchase of such securities and have received the purchaser’s written consent to the transaction prior to the purchase. Additionally, for any transaction involving a “penny stock”, unless exempt, the rules require the delivery, prior to the transaction, of a risk disclosure document mandated by the SEC relating to the “penny stock” market. The broker-dealer must also disclose the commission payable to both the broker-dealer and the registered representative, current quotations for the securities and, if the broker-dealer is the sole market maker, the broker-dealer must disclose this fact and the broker-dealer’s presumed control over the market. Finally, monthly statements must be sent disclosing recent price information for the “penny stock” held in the account and information on the limited market in “penny stocks”. Consequently, if and when our common stock becomes publicly traded, the “penny stock” rules may restrict the ability of broker-dealers to sell our securities and may negatively affect the ability of purchasers of our shares of common stock to sell such securities.
 
A significant portion of our total outstanding shares of common stock is restricted from immediate resale but may be sold into the market in the near future. This could cause the market price of our common stock to drop significantly, even if our business is doing well.
 
Sales of a substantial number of shares of our common stock in the public market, including shares issuable upon the effectiveness of this registration statement or upon the expiration of any statutory holding period under Rule 144, or existing lock-up agreements could occur in the future. These sales, or the perception in the market that the holders of a large number of shares of common stock intend to sell shares, could reduce the market price of our common stock. Our directors, executive officers and  certain shareholders, including those shareholders that were issued common stock in the Share Exchange, and the selling shareholders described herein are subject to a lock-up agreement pursuant to which these persons have agreed, subject to specified exceptions, not to sell, transfer, dispose of, contract to sell, sell any option or contract to purchase, or otherwise transfer or dispose of, directly or indirectly, without the written consent of Sunrise Securities Corp., one of the Placement Agents, any shares of our common stock or any securities convertible into or exercisable or exchangeable for shares of our common stock for a period of 180 days beginning as of the filing date of the  last pre-effective amendment to this prospectus. Once these lock-up provisions expire, and provided that one year has passed following the date the company filed Form 10 information with the SEC, may be sold in the public market pursuant to Rule 144, which could cause the market price of our common stock to drop significantly.
 
 
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
 
This prospectus contains forward-looking statements. Forward-looking statements give our current expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. You can find many (but not all) of these statements by looking for words such as “approximates,” “believes,” “hopes,” “expects,” “anticipates,” “estimates,” “projects,” “intends,” “plans,” “would,” “should,” “could,” “may” or other similar expressions in this prospectus. These statements may be found in the sections of this prospectus titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business”, as well as in this prospectus generally. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations or projections. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to:
 
 
future financial and operating results, including projections of revenues, income, expenditures, cash balances and other financial items;
     
 
our capital requirements and the need for additional financing;
     
 
our ability to protect our intellectual property rights and secure the right to use other intellectual property that we deem to be essential to the conduct of our business;
     
 
our ability to execute our growth, expansion and acquisition strategies;
     
 
current and future economic and political conditions;
     
 
overall industry and market performance;
     
 
competition;
     
 
management’s goals and plans for future operations; and
     
 
other assumptions described in this prospectus underlying or relating to any forward-looking statements.
 
We describe material risks, uncertainties and assumptions that could affect our business, including our financial condition and results of operations, under “Risk Factors.” We base our forward-looking statements on our management’s beliefs and assumptions based on information available to our management at the time the statements are made. We caution you that actual outcomes and results may differ materially from what is expressed, implied or forecast by our forward-looking statements. Accordingly, you should be careful about relying on any forward-looking statements. Reference is made in particular to forward-looking statements regarding growth strategies, financial results, product development, competitive strengths, intellectual property rights, litigation, mergers and acquisitions, market acceptance or continued acceptance of our products, accounting estimates, financing activities, ongoing contractual obligations and sales efforts. Except as required under the federal securities laws and the rules and regulations of the SEC, we do not have any intention or obligation to update publicly any forward-looking statements after the distribution of this prospectus, whether as a result of new information, future events, changes in assumptions, or otherwise.
 
 
 
Assuming an initial public offering price of $5.00 per share, after deducting commissions and estimated offering expenses payable by us, we estimate that we will receive net proceeds up to $10,785,464 from the sale of 2,400,000 shares of our common stock (100% of the offering), $8,025,464 from the sale of 1,800,000 shares of our common stock (75% of the offering), $5,265,464 from the sale of 1,200,000 shares of our common stock (50% of the offering) and $2,505,464 from the sale of 600,000 shares of our common stock (25% of the offering).
 
We intend to use the proceeds from this offering to conduct the Phase IIb/III clinical trial with MCV and pay $526,689 in outstanding debt received from Sune Holding ApS, a shareholder of DanDrit, which accrues interest at the rate of 5% per annum and is due upon the earlier of 14 days following the closing of this offering or February 1, 2015 (the “Sune Loan”). All remaining proceeds will be used for working capital and general corporate purposes. In the event that we receive maximum proceeds under the offering, we anticipate that we will be able to (i) complete the first step of our Phase II/III clinical trial in metastatic colorectal cancer, (ii) refine the design of the second step (Phase III trial) and (iii) initiate a collaboration agreement with a pharmaceutical partner. If we receive 75% of the maximum proceeds of the offering, we anticipate that we will be able to (i) provide comparative randomized confirmation of efficacy on a large scale that may trigger a partnership with a pharmaceutical company and (ii) pursue the Patient Name Use program with our partner MyTomorrows. If we receive 50% of the maximum proceeds of the offering, we anticipate that we will be able to (i) provide comparative randomized confirmation of efficacy on a smaller scale with a lower hazard ratio (HR) (a ratio used in time to event analysis) that may still trigger a less attractive partnership with a pharmaceutical company and (ii) pursue the Patient Name Use program with our partner MyTomorrows. HR is the hazard of an event in the studied arm divided by the hazard of the same event in the control arm. In our context the event is survival. An HR of 1 means that survival will be the same in both arms. An HR of 0.5 means that at a determined time, half as many patients in the vaccine group will have survived proportionally to the placebo control group. If we receive 25% of the maximum proceeds of the offering, we anticipate that we will be able to conduct a small non-comparative trial that allow us to pursue the patient Name Use Program with our partner MyTomorrows.
 
If we are unable to raise net proceeds equal to at least $10,700,000, we intend to first apply any proceeds raised towards repayment of the Sune Loan and the development and marketing of our products and the engineering, development and testing of vaccines. However, to the extent that we are unable to raise a sufficient amount of proceeds in this offering, we may not be able to achieve all our business objectives in a timely manner.
 
In the event that we file a post-effective amendment to increase the offering amount pursuant to Rule 462(b) of the Securities Act, we plan to allocate the extra funds in strengthening our Phase II/III clinical trial with a larger sample size and in targeting patients with stage III colorectal cancer rather than metastatic (stage IV) colorectal cancer patients.
 
Pending any ultimate use of any portion of the proceeds from this offering, we intend to invest the proceeds in a variety of capital preservation investments, including short-term, interest-bearing instruments such as United States government securities and municipal bonds.
 
The anticipated use of proceeds for the offering funds based on assumed amounts of 100%, 75%, 50% and 25% of total offering is summarized below.
 
Use of the Net Proceeds from the Sale of Shares at 100% of the offering:
 
                         
USD
 
Year 1
   
Year 2
   
Year 3
   
Total
 
Manufacturing
   
230,000
     
285,000
     
315,000
     
830,000
 
                                 
General & Administrative expenses
   
975,000
     
978,000
     
717,656
     
2,670,656
 
                                 
Clinical trial costs
   
1,861,464
     
2,430,000
     
2,466,656
     
6,758,120
 
                                 
Debt Repayment
   
526,689
                     
526,689
 
                                 
Total
   
3,593,153
     
3,693,000
     
3,499,311
     
10,785,464
 
                                 
Use of the Net Proceeds from the Sale of Shares at 75% of the offering:
 
                                 
USD
 
Year 1
   
Year 2
   
Year 3
   
Total
 
Manufacturing
   
156,400
     
193,800
     
214,200
     
564,400
 
                                 
General & Administrative expenses
   
860,000
     
863,000
     
602,656
     
2,325,656
 
                                 
Clinical trial costs
   
1,296,715
     
1,685,675
     
1,626,330
     
4,608,720
 
                                 
Debt Repayment
   
526,689
                     
526,689
 
                                 
Total
   
2,839,804
     
2,742,475
     
2,4443,185
     
8,025,464
 
 
 
Use of the Net Proceeds from the Sale of Shares at 50% of the offering:
 
                                 
USD
 
Year 1
   
Year 2
   
Year 3
   
Total
 
Manufacturing
   
92,000
     
108,300
     
119,700
     
320,000
 
                                 
General & Administrative expenses
   
740,000
     
743,000
     
482,656
     
1,965,656
 
                                 
Clinical trial costs
   
755,664
     
923,400
     
774,056
     
2,453,120
 
                                 
Debt Repayment
   
526,689
                     
526,689
 
                                 
Total
   
2,114,353
     
1,774,700
     
1,376,411
     
5,265,464
 
                                 
Use of the Net Proceeds from the Sale of Shares at 25% of the offering:
 
                                 
USD
 
Year 1
   
Year 2
   
Year 3
   
Total
 
Manufacturing
   
34,500
     
0
     
0
     
34,500
 
                                 
General & Administrative expenses
   
700,000
     
439,656
     
442,656
     
1,582,311
 
                                 
Clinical trial costs
   
278,700
     
82,264
     
0
     
360,964
 
                                 
Debt Repayment
   
526,689
                     
526,689
 
                                 
Total
   
1,539,889
     
521,920
     
442,656
     
2,504,464
 
 
The amounts and timing of our actual expenditures will depend on numerous factors, including market conditions, results from our research and development efforts, business developments and opportunities and the rate of our growth, sales and marketing activities and competition. Accordingly, our management will have broad discretion in the application of the net proceeds, and investors will be relying on the judgment of our management regarding the application of the proceeds from this offering. We may find it necessary or advisable to use portions of the proceeds from this offering for other purposes. Circumstances that may give rise to a change in the use of proceeds and the alternate purposes for which the proceeds may be used include:
 
 
the existence of unforeseen or other opportunities or the need to take advantage of changes in the timing of our existing activities;
     
 
the need or desire on our part to accelerate, increase, reduce, change or eliminate one or more existing initiatives due to, among other things, changing market conditions and competitive developments or interim results of research and development efforts;
 
 
 
results from our business development and marketing efforts, including opportunities that may materialize;
     
 
the effect of federal, state, and local regulation on us and on our identified industries;
     
 
our ability to attract development funding or to license or sell our vaccine candidates;
     
 
the presentation of strategic opportunities of which we are not currently aware (including acquisitions, joint ventures, licensing and other similar transactions); and/or
     
 
the filing of a post-effective amendment pursuant to Rule 462(b) of the Securities Act in order to raise additional funds to strengthen our Phase II/III clinical trial with a larger sample size and target patients with stage III colorectal cancer rather than metastatic (stage IV) colorectal cancer patients.
 
From time to time, we evaluate these and other factors and we anticipate continuing to make such evaluations to determine if the existing allocation of resources, including the proceeds of this offering, is being optimized.
 
 
We do not intend to declare or pay dividends on our common stock in the foreseeable future. Instead, we generally intend to invest any future earnings in our business. Subject to Delaware law, our board of directors will determine the payment of future dividends on our common stock, if any, and the amount of any dividends in light of:
 
 
any contractual restrictions limiting our ability to pay dividends that may be applicable at such time;
     
 
our earnings and cash flow;
     
 
our capital requirements;
     
 
our financial condition; and
     
 
other factors our board of directors deems relevant.
 
 
 
The table below sets forth our cash and cash equivalents and capitalization, each as of June 30, 2014 on an actual basis.
 
You should consider this table in conjunction with our financial statements and the notes thereto included elsewhere in this prospectus.
 
   
As of June 30,
2014
 
    Unaudited  
Cash and cash held in escrow
  $ 328,132  
Notes payable - related party, current portion
    1,716,578  
Accounts payable and accrued liabilities
    1,632,535  
         
Total Debt obligations and payables
    3,349,113  
STOCKHOLDERS’ DEFICIT:
       
Common stock; par value $0.0001, 100,000,000 shares authorized, 8,040,000 shares issued and outstanding (1)
   
804
 
Additional Paid-in Capital
    17,788,110  
Other Comprehensive Income, net
    (16,109 )
Accumulated Deficit
    (20,403,635 )
         
Total Stockholders’ (Deficit)
    (2,630,830 )
         
Total Capitalization
  $ 718,283  
 
(1) Reflects a recapitalization of the Company’s historical financial statements resulting from the closing of the Share Exchange and an aggregate of 8,040,000 shares of common stock issued and outstanding following the Share Exchange (including 185,053 shares of common stock issuable to the DanDrit Denmark Non-Consenting Shareholders).
 
 
 
Purchasers of the shares of our common stock offered by this prospectus will suffer immediate and substantial dilution in the net tangible book value per share of our common stock. Our net tangible book value (unaudited) as of June 30, 2014, was a deficit of approximately $(2,918,328), or $(0.36) per share. Net tangible book value per share is calculated by subtracting our total liabilities from our total tangible assets, which is total assets less intangible assets, and dividing this amount by the number of shares of common stock outstanding as of June 30, 2014.
 
Dilution in net tangible book value per share represents the difference between the amount per share paid by purchasers in this offering and the as adjusted net tangible book value per share of our common stock immediately after this offering.
 
The shares of common stock issuable upon the exercise of our outstanding warrants and the exercise price in respect thereof are subject to adjustment in certain circumstances.
 
To the extent that any options or warrants are exercised, new options are issued, any new stock option or stock incentive plans are adopted or we otherwise issue additional shares of common stock in the future, there will be further dilution to investors in this offering.
 
 
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes included elsewhere in this prospectus. This discussion contains forward-looking statements reflecting our current expectations that involve risks and uncertainties. See “Disclosure Regarding Forward-Looking Statements” for a discussion of the uncertainties, risks and assumptions associated with these statements. Actual results and the timing of events could differ materially from those discussed in our forward-looking statements as a result of many factors, including those set forth under “Risk Factors” and elsewhere in this prospectus.
 
Overview
 
We are a biotechnology company committed to developing what we believe could be the world’s first vaccine against colorectal cancer. For more than a decade, we have developed and patented compounds successfully used in initial clinical trials in Europe and Asia including: (i) MelCancerVac™ (MCV) for treatment of cancer (one phase I/II trial in Denmark and two phase II trials in Denmark and Singapore), (ii) Tolerogenic dendritic cell (TDC) (pre-clinical stage in Denmark) and (iii) Melvaccine (MV) a melanoma cell lysate used as stand-alone vaccine (pre-clinical state in Denmark). We expect to continue our clinical development program in the United States, Europe and Asia. Springing from academic roots in the Danish Cancer Society, we have built upon our scientific and medical skills to advance a number of candidate therapies, targeted initially at non-small-cell-lung-cancer (NSCLC) and colorectal-cancer (CRC). In 2001, MCV was developed as a result of the combined efforts and research of DanDrit researchers and employees. On September 22, 2008, MCV was authorized by the Singapore government for named patient compassionate use for CRC. Three single-arm Phase II clinical trials in cancer have been conducted where DanDrit’s dendritic cell vaccine, MCV demonstrated potential efficacy. The three clinical trials generated data indicating prospects in a larger and different clinical setting. More specifically, this efficacy data needed to be confirmed in a comparative randomized trial with advanced colorectal cancer patients. Neither the FDA nor any other comparable governmental agency has yet to review MCV. Therefore, any assessment of its safety or efficacy only reflects the opinion of the Company. Furthermore, it does not indicate that MCV will achieve favorable results in any later stage trials or that the FDA or comparable agency will ultimately determine that MCV is safe and effective for purposes of granting marketing approval.
 
As a result, DanDrit Denmark, with the assistance of key opinion leaders in colorectal cancer treatment, has designed a randomized trial with 174 stage IV colorectal cancer patients after surgical resection and chemotherapy. Using an adaptive design clinical study that includes a prospectively planned opportunity for modification of one or more specified aspects of the study design and hypotheses based on analysis of data (usually interim data) from subjects in the study (an “Adaptive Design Clinical Study”), we significantly reduced the cost and duration of a Phase IIb/III study and we believe we can complete the study within three years. Regulatory authorities in the United States and Europe have both published guidance documents on the use and implementation of adaptive design trials. These documents both include description of adaptive trials and include a requirement for prospectively written standard operating procedures and working processes for executing adaptive trials and a recommendation that sponsor companies engage with CROs that have the necessary experience in running such trials.
 
Share Exchange
 
DanDrit was incorporated in Delaware on January 18, 2011 under the name “Putnam Hills Corp.” as a vehicle to pursue a business combination through the acquisition of, or merger with, an operating business. We filed a Registration Statement on Form 10 with the SEC on August 12, 2011.
 
 
On February 12, 2014, the Company signed and consummated the transactions contemplated by the Share Exchange Agreement, by and among DanDrit USA, DanDrit Denmark and N.E. Nielsen, as the representative of the shareholders of DanDrit Denmark, pursuant to which the Company will acquire 100% of the issued and outstanding equity securities in DanDrit Denmark in exchange for 6,000,000 of the issued and outstanding shares common stock par value $0.0001 per share of the Company. The Share Exchange was closed on February 12, 2014. In accordance with Section 70 of the Danish Companies Act and the Articles of Association of DanDrit Denmark, the Non-Consenting Shareholders are entitled to receive the 185,053 shares of common stock of DanDrit USA that each such DanDrit Denmark shareholder would have been entitled to receive if such DanDrit Denmark shareholder had consented to the Share Exchange, up to an aggregate of 185,053 shares of common stock of DanDrit USA, reflected as issued and outstanding. As a result of the Share Exchange, the former shareholders of DanDrit Denmark became the controlling shareholders of the Company. The Share Exchange was accounted for as a reverse takeover/recapitalization effected by a share exchange, wherein DanDrit Denmark is considered the acquirer for accounting and financial reporting purposes. The capital, share price, and earnings per share amount in these consolidated financial statements for the period prior to the reverse merger were restated to reflect the recapitalization in accordance with the exchange ratio established in the merger.
 
Upon the closing of the Share Exchange, DanDrit USA and the its majority shareholder immediately prior to the closing agreed to cancel up to 4,400,000 share of common stock.  In addition, following the closing of the Share Exchange, the wholly owned subsidiary of the company formed solely for the purposes of changing the company’s name, DanDrit Biotech USA, Inc., merged with and into the company and the company adopted the name of its wholly owned subsidiary “DanDrit Biotech USA, Inc.”
 
DanDrit USA will own approximately 100% of the outstanding equity interests of DanDrit Denmark. As a result of the Share Exchange, we changed our management and reconstituted our board of directors. As of the effective time of the Share Exchange, Samir Masri, the Chief Executive Officer, Chief Financial Officer, President, Secretary and sole director of Putnam resigned as the sole officer and director of Putnam and appointed NE Nielsen, Dr. Jacob Rosenberg, Dr. Eric Leire, Aldo Petersen and Robert E. Wolfe as directors of Putnam, and Dr. Eric Leire as Chief Executive Officer and President and Mr. Wolfe as Chief Financial Officer, Treasurer and Secretary.
 
Recent Developments
 
Negotiation with Etablissement Francais du Sang (EFS) regarding the GeniusVac Technology
 
DanDrit has recently entered into a negotiation with the Etablissement Francais du Sang (EFS) regarding access to their GeniusVac Technology. The GeniusVac technology is an Allogenic irradiated plasmacytoid dendritic cell line. This technology may allow DanDrit to develop a 100% off-the-shelf cancer vaccine. DanDrit has conducted and completed due diligence under CDA. DanDrit USA and EFS are now working on a feasibility proof-of-concept test before establishing further collaboration.
 
Results of Operations
 
Three and six months ended June 30, 2014 compared to the three and six months ended June 30, 2013
 
The following table sets forth our revenues, expenses and net income for the three and six months ended June 30, 2014 and 2013. The financial information below is derived from our unaudited condensed consolidated financial statements included elsewhere in this prospectus.
 
   
For the 3 Months Ended
   
For the 6 Months Ended
 
   
June 30,
   
June 30,
 
   
2014
   
2013
   
2014
   
2013
 
Revenues
 
$
-
   
$
-
   
$
-
   
$
31,558
 
                                 
Cost of Goods Sold
   
64,266
     
36,928
     
82,005
     
52,288
 
                                 
Gross (Loss)
   
(64,266
)
   
(36,928
)
   
(82,005
)
   
(20,730
)
                                 
Operating Expenses
                               
General and Administrative Expenses
   
421,077
     
138,801
     
747,505
     
313,817
 
Depreciation and Amortization
   
2,962
     
10,224
     
9,756
     
18,824
 
Consulting Expenses
   
79,797
     
56,856
     
140,942
     
69,904
 
Total Operating Expense
   
503,836
     
205,881
     
898,203
     
402,545
 
                                 
(LOSS) FROM OPERATIONS
   
(568,102
)
   
(242,809
)
   
(980,208
)
   
(423,275
)
                                 
Other Income (Expense)
                               
Interest (expense)
   
(34,762
)
   
(165,499
)
   
(35,764
)
   
(325,421
)
Gain (loss) on Currency Transactions
   
218
     
18,541
     
218
     
(81,786
)
Gain on forgiveness of debt
   
-
     
-
     
-
     
-
 
Gain on Derivative Liability
   
-
     
45,823
     
-
     
87,466
 
Gain on Sale of Assets
   
-
     
-
     
-
     
-
 
Interest Income
   
197
     
-
     
248
     
-
 
Total Other Income (Expense)
   
(34,347
)
   
(101,135
)
   
(35,298
)
   
(319,741
)
                                 
(Loss) Before Income Taxes
   
(602,449
)
   
(343,944
)
   
(1,015,506
)
   
(743,016
)
                                 
Income Tax Expense (Benefit)
   
(132,997
)
   
-
     
(132,997
)
   
-
 
                                 
NET (LOSS)
 
$
(469,452
)
 
$
(343,944
)
 
$
(882,509
)
 
$
(743,016
)
                                 
BASIC AND DILUTED LOSS PER SHARE
 
$
(0.06
)
   
(0.06
)
 
$
(0.12
)
   
(0.14
)
                                 
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND DILUTED
   
8,040,000
     
5,318,151
     
7,555,359
     
5,318,151
 
 
 
Year ended December 31, 2013 compared to the year ended December 31, 2012
 
The following table sets forth our revenues, expenses and net income for the years ended December 31, 2013 and 2012. The financial information below is derived from our unaudited condensed consolidated financial statements included elsewhere in this prospectus.
 
   
For the Year Ended
December 31,
 
   
2013
   
2012
 
Net Sales
 
$
32,768
   
$
62,806
 
                 
Cost of Goods Sold
   
102,299
     
64,385
 
                 
Gross Loss
   
(76,531
)
   
(1,579
Operating Expenses:
               
General and administrative expenses
   
1,233,683
     
1,036,005
 
Depreciation and Amortization
   
38,297
     
56,600
 
Consulting expenses
   
390,437
     
829,845
 
                 
Total Operating Expense
   
1,662,417
     
1,922,450
 
                 
Loss from Operations
   
(1,738,948
)
   
(1,924,029
)
Other Income (Expense)
               
Interest (expense)
   
(652,703
   
(704,911
)
Gain on forgiveness of debt
   
49,016
     
-
 
Gain (loss) on currency transactions
   
19,541
     
32,841
 
Gain on derivative liability
   
175,732
     
153,430
 
Gain on sale of fixed assets
   
1
     
15,020
 
     
-
         
Total Other Income (Expense)
   
(408,413
)
   
(503,620
)
                 
Loss Before Income Taxes
   
(2,147,361
)
   
(2,427,649
)
Income Tax Expense (Benefit)
           
-
 
Net Loss
   
(2,147,361
)
   
(2,427,649
)
                 
BASIC AND DILUTED LOSS PER SHARE
  $
(0.40
  $
(0.46
                 
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND DILUTED
   
5,332,721
     
5,318,151
 
 
 
31

Comparison of the three months ended June 30, 2014 and June 30, 2013
 
Revenues
 
Revenues from operations for the three months ended June 30, 2014 and June 30, 2013 were $0 and $0, and $0 and $31,558 for the six months ended June 30, 2014 and June 30, 2013, respectively. The revenues for the six month period ending June 30, 2013 were attributable to the sale of lysate to the Singapore NCC compassionate use program by DanDrit Denmark.
 
Cost of Goods Sold
 
Our cost of goods sold was $64,266 and $36,928 during the three months ended June 30, 2014 and 2013 and $82,005 and $52,288 for the six months ended June 30, 2014 and 2013, respectively, and was primarily associated with the production of Lysate.
 
Gross Loss
 
Gross loss for the three months ended June 30, 2014 was $64,266 compared to gross loss of $36,928 for same period in 2013. Gross loss for the six months ended June 30, 2014 was $82,005 compared to gross loss of $20,730 for same period in 2013. The increase in the gross loss was due to lower sales and higher cost of goods sold for the three and six months ended June 30, 2014.
 
Expenses
 
Our operating expense for the three months ended June 30, 2014 totaled $503,836, representing an increase of $297,955, or approximately 145% compared to $205,881 for the three months ended June 30, 2013. Our operating expense for the six months ended June 30, 2014 totaled $898,203, representing an increase of $495,658, or approximately 123% compared to $402,545 for the six months ended June 30, 2013. The largest contributors to the increase in operating expenses were for fees associated with raising funds through an equity offering.
 
General and administrative expenses for the three months ended June 30, 2014 and 2013 were $421,077 and $138,801, respectively and $747,505 and $313,817 for the six months ended June 30, 2014 and 2013, respectively. The differences in expenses were primarily due to a total of $154,564 and $233,604 and in legal fees for the three and six months ended June 30, 2014, representing an increase of $154,293 and $204,290, or approximately 99.82% and 87.45%, respectively, compared to $$271 and $29,314 for the three and six months ended June 30, 2013; and audit expenses of $22,594 and $59,388 the three and six months ended June 30, 2014, representing an increase of $22,399 and$38,317, or approximately 99.32% and 64.52%, respectively, compared to $195 and $21,071 for the three and six months ended June 30, 2013.
 
Depreciation and amortization expenses for the three months ended June 30, 2014 and 2013 were $2,962 and $10,224, respectively and $9,756 and $18,824 for the six months ended June 30, 2014 and 2013, respectively.
 
Consulting expenses for the three months ended June 30, 2014 and 2013 were $79,797 and $56,656, respectively and $140,942 and $69,904 for the six months ended June 30, 2013 and 2013, respectively. The difference in consulting expenses is attributable to the Company engaging consultants to assist in connection with planning and executing the Company’s going public strategy in the United States.
 
Other income (expense) net for the three months ended June 30, 2014 and June 30, 2013 were $34,762 and $101,135, respectively and $35,764 and $325,421 for the six months ended June 30, 2014 and 2013, respectively. Other expense is associated with interest on related party loans, losses on currency transaction and gains on the derivative related to the convertible bond.
 
Net Loss
 
Net loss for the three months ended June 30, 2014 was $(469,452) comprised of legal, accounting, audit and other professional service fees incurred in relation to the preparation and filing of the Company’s periodic reports and general and administrative expenses, compared to a net loss of $(343,944) for the three months ended June 30, 2013 comprised of general and administrative expenses and interest expense, representing an increase of $125,508, or 37%. Net loss for the six months ended June 30, 2014 was $(882,509) comprised of legal, accounting, audit and other professional service fees incurred in relation to the preparation and filing of the Company’s periodic reports and general and administrative expenses, compared to a net loss of $(743,016) for the six months ended June 30, 2013 comprised of general and administrative expenses and interest expense, representing an increase of $125,508, or 19%. Net (loss)  for the three months ended June 30, 2014 and June 30, 2013 attributed to common stockholders was $(469,452) and $(343,944), respectively, or $(0.06) and $(0.06) per share, respectively. Net (loss)  for the six months ended June 30, 2014 and June 30, 2013 attributed to common stockholders was $(882,509) and $(743,016), respectively, or $(0.12) and $(0.14) per share, respectively. In 2014, the losses increased due to the Company’s efforts to secure financings through debt and equity offerings.
 
Comparison of the years ended December 31, 2013 and December 31, 2012
 
Revenues
 
Our revenues for the year ended December 31, 2013 were $32,768 compared to revenues of $62,806 for the year ended December 31, 2012, representing a decrease in revenues of $30,038, or 47.8%. Net sales to the Singapore compassionate use program decreased during 2013 as DanDrit Denmark was transferring manufacturing technologies to a new supplier. The transfer of manufacturing technology was completed and DanDrit Denmark should be able to supply the Singapore compassionate use program with larger quantities of cGMP lysate.
 
Cost of Goods Sold
 
Our cost of goods sold increased by $44,914, or 69.8%, during the year ended December 31, 2013, to $109,299, from $64,385 in cost of goods sold for the year ended December 31, 2012. The increase in cost of goods sold was due to the additional costs of transferring manufacturing technologies of CGMP lysate to a new supplier during 2013.
 
Gross Loss
 
Gross loss for the year ended December 31, 2013 was $76,531 compared to a loss of $1,579 for same period in 2012, representing an increase in the loss of $74,952, or 4,746.8%.  The increase in gross loss was due to lower sales and higher cost of goods sold for the year ended December 31, 2013.
 
32

 
Expenses
 
Our operating expense for the year ended December 31, 2013 totaled $1,662,417, representing a decrease of $260,033, or 14%, compared to $1,922,450 for the year ended December 31, 2012.
 
General and administrative expenses for the year ended December 31, 2013 were $1,233,683 compared to $1,036,005 for the year ended December 31, 2012, representing an increase of $197,678, or 19.1%. This increase was due primarily to costs associated with an increase in salary and employee cost of $294,545. General and administrative expenses include office rental, website management and insurance and salary. 

Depreciation and amortization expenses for the year ended December 31, 2013 and 2012 were $38,297 and $56,600, respectively.
 
Consulting expenses for the year ended December 31, 2013 were $390,437 compared to $829,845 for the year ended December 31, 2012, a decrease of $439,408, or 53%. The differences are largely attributable to the expenses of going public in the United States during 2013, as described above and the expenses of going public in Denmark in 2012. Of the $390,437 in expenses for the year ended December 31, 2013, $334,545 was related to expenses incurred in connection with developing and planning a US going public strategy including the preparation of this registration statement and converting our financial statements into US GAAP.
 
Net Loss
 
Net loss attributable to DanDrit Denmark for the year ended December 31, 2013 was $2,147,361compared to a net loss of $2,427,649 for the year ended December 31, 2012, representing a decrease of $280,288, or 11.5%. The decrease was primarily attributable to a decrease in total operating expenses of $185,081 from $1,924,029 for the year ended December 31, 2012 to $1,738,948 for the year ended December 31, 2013, as well as a decrease of $52,208 in interest expense.
 
Liquidity and Capital Resources
 
We have historically satisfied our capital and liquidity requirements through funding from our largest shareholders and the issuance of convertible notes, which over time have been converted into shares of our common stock. On December 16, 2013, DanDrit Denmark issued 681,849 common shares upon the conversion of $5,050,492 in loan and convertible bonds payable and related accrued interest and derivative liabilities. As of June 30, 2014, we had notes payable to related parties and related accrued interest totaling $1,716,578 consisting of (1) a $187,932 loan payable at the rate of 5% per annum and is payable upon the earlier of 14 days following the closing of the offering or February 1, 2015 (“Loan 1”), (2) a $526,689 loan payable at the rate of 5% per annum due upon the earlier of 14 days following the closing of this offering or February 1, 2015 (“Loan 2”), (3) a $888,880 loan payable to an existing shareholder which accrues interest at the rate of 5% per annum and is due February 1, 2015 and can be extended at the Company’s option for an additional year with an increase in the interest rate to 7.00% (“Loan 3”)  and (4) $101,700 in other loans payable on demand. On April 29, 2014, Loan 1, Loan 2 and Loan 3 were amended whereby the terms of the 2014 loans are payable on February 1, 2015 and can be extended at the Company’s option for an additional year with an increase in the interest rate to 7.00%. The Company plans to repay Loan 1 from operations. The Company has an additional funding commitment of approximately $368,868 until February 2015 for the Company to draw upon to support operations. The Company plans to repay Loan 1 as described in the “Use of Proceeds” section herein.

As of June 30, 2014 the Company had $328,132 in cash and cash held in escrow  and a deficit of $(2,630,830) as compared to December 31, 2013, when the Company had $96,262 in cash and cash equivalents and a deficit of $(1,684,170). The change in cash is primarily due to the additional financings obtained by the Company’s subsidiary. The decrease in the working capital is primarily related to the acquisition of DanDrit Denmark on February 12, 2014.
 
The following is a summary of the Company's cash flows provided by (used in) operating, investing, and financing activities:
 
   
Six Months
Ended
June 30, 2014
   
Six Months
Ended
June 30, 2013
 
Net Cash (Used by) Operating Activities
 
$
(641,976
)
 
$
(1,303,796
)
Net Cash  (Used by) Investing Activities
   
(69,640
)
   
-
 
Net Cash Provided by Financing Activities
 
$
858,765
   
$
1,272,329
 
(Gain) Loss on Currency Translation
   
15,081
     
59,344
 
Net Increase (Decrease) in Cash and Cash Equivalents
 
$
(162,230
)
 
$
27,878
 
 
The Company is dependent upon the receipt of capital investment or other financing to fund its ongoing operations. The Company has secured an additional funding commitment of $368,868 through February 2015 from a related party.  In addition, the Company is dependent upon certain related parties to provide continued funding and capital resources. If continued funding and capital resources are unavailable or unavailable at reasonable terms, the Company may not be able to implement its plan of operations.
 
We believe that our cash flow together with currently available funds from our existing lines of credit and other potential sources of funds, such as loans from shareholders, will be sufficient to fund our anticipated working capital needs and capital spending requirements for the next 12 months. The Company projects that revenues and expenses for the next 12 months will be $983,108 and $1,404,187, respectively.  The Company secured financing of $461,877 and $424,927 on February 15, 2014 and March 18, 2014 as amended on April 29, 2014, respectively.  The Company has secured an additional funding commitment until February 2015 of 2,000,000 DKK or approximately $368,868, determined by using the current currency conversion rate.  However, if the additional funding commitment is not funded or if we were to incur any unanticipated expenditures or the positive trend of our operating cash flow does not continue or our shareholders determine not to invest in the Company either in connection with the sale of debt or equity securities, such circumstances could put a substantial burden on our cash resources.
 
We may also need additional funds for possible future strategic acquisitions of businesses, products or technologies complementary to our business. If additional funds are required, we may raise such funds from time to time through public or private sales of equity or debt securities. Financing may not be available on acceptable terms, or at all, and our failure to raise capital when needed could materially adversely impact our growth plans and our financial condition and results of operations.
 
Our auditors have prepared the financial statements included with this prospectus in conformity with generally accepted accounting principles of the United States of America, which contemplate continuation of the Company as a going concern.  However, since the Company has incurred significant losses and has not yet been successful in establishing profitable operations, our auditors have expressed doubts about the ability of the Company to continue as a going concern. In this regard, management plans to mitigate this doubt by raising additional funds through debt and/or equity offerings and by substantially increasing sales once approval for the Company’s product is obtained.  There is no assurance that the Company will be successful in achieving profitable operations.  The financial statements do not include any adjustments that might result from the outcome of these uncertainties.
 
 
33

 
Cash Flows
 
Cash used in operating activities for the year ended December 31, 2013 was $2,130,628, representing an increase of $1,197,616, compared to cash used in operating activities of $933,012 for the year ended December 31, 2012. This increase was primarily due to $1,161,004 in cash provided by increases in accounts payable and accrued expense for the year ended December 31, 2012 compared to $408,825 is cash used by accounts payable and accrued expense for the year ended December 31, 2013. During 2013, the Company obtained additional loans, which were converted to common stock to pay down approximately $1,038,000 in accounts payable and accrued expenses. Cash used by operating activities for the three months ended June 30, 2014 was $641,976, representing a decrease of $661,819, or approximately 51% compared to cash loss from operating activities of $1,303,795 for the three months ended June 30, 2013. Cash used by operating activities for the six months ended June 30, 2014 was $980,208, representing an increase of $661,819, or approximately 48% compared to cash loss from operating activities of $423,275 for the six months ended June 30, 2013. The net cash used by operating activities was primarily due to fund raising efforts of the Company and that from the operations of DanDrit Denmark.
 
There were no major changes in the total assets as of December 31, 2013 compared to December 31, 2012. Total liabilities decreased by approximately $2,596,058 as of December 31, 2013 compared to December 31, 2012. The decrease was mainly due to the conversion of promissory notes and bonds to related parties to shares of common stock. Total assets as of June 30, 2014 were $718,283 compared to $330,288 as of June 30, 2013.  Total liabilities increased to $3,349,113 as of June 30, 2014 compared to $5,381,790 as of June 30, 2013. The increases to total assets and total liabilities were mainly due to consummation of the Share Exchange.
 
Cash used in investing activities was $105,015 for the year ended December 31, 2013, as compared to cash used in investing activities of $84,643 for the year ended December 31, 2012. Cash used for investing activities increased during the year ended December 31, 2013 primarily due to an increase in the amount of $77,468 of cash held in escrow.  While our purchase of intangible assets declined by $72,115, we have invested, and we anticipate that we will continue to invest, in additional production equipment in order to meet the continuing increase in the demand for our products.
 
Cash provided by financing activities was $2,469,526 for the year ended December 31, 2013, as compared to cash provided by financing activities of $856,754 for the year ended December 31, 2012. The increase of approximately $1,612,772 in cash provided by financing activities in the year ended December 31, 2013, compared to the year ended December 31, 2012, was due to cash received in connection with the issuance of related party notes net of $218,136 in payments on related party notes and $67,000 paid in offering costs.
 
Other than as discussed above, we know of no trends, events or uncertainties that are reasonably likely to impact our future liquidity.
 
Off Balance Sheet Arrangements
 
As of June 30, 2014, we had no off-balance sheet arrangements. We are not aware of any material transactions which are not disclosed in our financial statements.
 
Significant Accounting Policies and Critical Accounting Estimates
 
The methods, estimates, and judgments that we use in applying our accounting policies have a significant impact on the results that we report in our financial statements. Some of our accounting policies require us to make difficult and subjective judgments, often as a result of the need to make estimates regarding matters that are inherently uncertain. In addition, Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We are not choosing to “opt out” of this provision. Section 107 of the JOBS Act provides that our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable. As a result of our election, not to “opt out” of Section 107, DanDrit’s financial statements may not be comparable to companies that comply with public company effective dates.
 
 
34

 
Our most critical accounting estimates include:
 
Property and Equipment — Property and equipment are stated at cost. Expenditures for major renewals and betterments that extend the useful lives of property and equipment are capitalized, upon being placed in service. Expenditures for maintenance and repairs are charged to expense as incurred. Depreciation is computed for financial statement purposes on a straight-line basis over the estimated useful lives of the assets which range from four to six years.
 
Intangible Assets — Definite life intangible assets include patents. The Company accounts for definite life intangible assets in accordance with Financial Accounting Standards Board, (“FASB”) Accounting Standards Codification, (“ASC”) Topic 350, “Goodwill and Other Intangible Assets” and amortized the patents on a straight line basis over the estimated useful life of twenty years. Costs incurred in relation to patent applications are capitalized costs and amortized over the estimated useful life of the patent. If it is determined that a patent will not be issued, the related remaining patent application costs are charged to expense.
 
Revenue Recognition and Sales — The Company’s sales of its MelCancerVac colorectal cancer treatment have been limited to a compassionate use basis in Singapore after stage IIA trials and the vaccine is not currently approved for sale for any other use or location. The Company accounts for revenue recognition in accordance with Securities and Exchange Commission Staff Accounting Bulletin No. 101, “Revenue Recognition in Financial Statements” (SAB 101), FASB ASC 605 Revenue Recognition. The Company recognizes revenue when rights and risk of ownership have passed to the customer, when there is persuasive evidence of an arrangement, product has been shipped or delivered to the customer, the price and terms are finalized, and collection of the resulting receivable is reasonably assured. Products are primarily shipped FOB shipping point at which time title passes to the customer.
 
Value Added Tax - In Denmark, Value Added Tax (“VAT”) of 25% of the invoice amount is collected in respect of the sales of goods on behalf of tax authorities. The VAT collected is not revenue of the Company; instead, the amount is recorded as a liability on the balance sheet until such VAT is paid to the authorities. VAT of 25% is also paid to Danish and EU vendors on invoices. These amounts are refundable from the respective governmental authority and recorded as other receivables in the accompanying financial statements.
 
Accounting 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 of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimated.
 
Recent Enacted Accounting Standards
 
For a description of accounting changes and recent accounting standards, including the expected dates of adoption and estimated effects, if any, on our consolidated financial statements, see “Note 1: Recently Enacted Accounting Standards” in the financial statements included elsewhere in this prospectus.
 
Quantitative and Qualitative Disclosures About Market Risk
 
We are not required to provide quantitative and qualitative disclosures about market risk because we are a smaller reporting company.
 

 
Overview
 
We are a biotechnology company seeking to develop what we believe could be the world’s first vaccine against colorectal cancer. We have developed and patented compounds used in initial clinical trials in Europe and Asia including: (i) MelCancerVac™ (MCV) for treatment of cancer (one phase I/II trial in Denmark and two phase II trials in Denmark and Singapore), (ii) Tolerogenic dendritic cell (TDC) (pre-clinical stage in Denmark) and (iii) Melvaccine (MV) a melanoma cell lysate used as stand-alone vaccine (pre-clinical state in Denmark). We expect to continue these trials in the United States. Springing from academic roots in Denmark, DanDrit has built upon its scientific and medical skills to advance a number of candidate therapies, targeted initially at non-small-cell-lung-cancer (NSCLC) and colorectal-cancer (CRC). On September 22, 2008, MCV was authorized by the Singapore government for a named patient compassionate use for CRC. MCV, demonstrated potential efficacy in three single-arm Phase II clinical trials in cancer,. The three clinical trials generated data indicating prospects in a larger and different clinical setting. More specifically, this efficacy data needed to be confirmed in a comparative randomized trial. As a result, DanDrit Denmark, with the assistance of experienced practitioners in colorectal cancer treatment, has designed a randomized trial with 174 stage IV colorectal cancer patients. Neither the FDA nor any other comparable governmental agency has reviewed MCV. Therefore, any assessment of its safety or efficacy only reflects the opinion of the Company. Furthermore, it does not indicate that MCV will achieve favorable results in any later stage trials or that the FDA or comparable agency will ultimately determine that MCV is safe and effective for purposes of granting marketing approval.
 
Our Biotechnology
 
We plan to use a dendritic cell vaccine technology relatively similar to the technology behind Dendreon’s FDA approved Provenge™ cancer vaccine. However, we believe DanDrit’s next generation of dendritic cell vaccine may benefit from technological competitive advantages over other cancer vaccines including:
 
 
The vaccine will be generated within eight days from a patient’s peripheral blood. We will be able to generate the vaccine quickly because only 200 ml of blood is required to be drawn. Leukapheresis (a medical technology in which the blood of a patient is passed through an apparatus -dialysis machine- that separates out one particular constituent and returns the remainder to the circulation which is used in Denderon’s Provenge™ cancer vaccine) is not needed.
     
 
The vaccine will use an allogenic (using cells, tissues, or organs, sourced from a genetically non-identical member of the same species as the recipient (“Allogenic”) tumor lysate (a fluid containing the contents of lysed cells, cells broken down by viral, enzymic or osmotic mechanisms that compromise their integrity “lysed cells”) as opposed to inconvenient autologous (from the patient) tumor lysate. A major limitation of autologous tumor cell vaccines is the low yield of autologous tumor cells that may compromise the number of immunizations given to patients (difficult to obtain enough cancer cells from the patient).  A second inconvenience is the variability of GM-CSF (a protein that functions as a white blood cell growth factor) secretion among patients, which could be responsible for the different levels of responses observed. But above all, although autologous tumor cells may be a good source of TAA for cancer vaccine development, limitations plus the significant time and expense required for the approval of each patient’s vaccine by the appropriate regulatory agencies severely limits the development of this type of immunization approach. DanDrit does not need a patient’s tumor cells to manufacture MCV.  Therefore MCV is not classified as an autologous vaccine.
     
 
The vaccine will be polytopic (targets several cancer specific antigens, or antibody generator is any substance which provokes an adaptive immune response “antigens”). As a result, the risk of the tumor escaping is more limited and more T-cells can be activated than if the vaccine is targeting one antigen only. However, MCV has a focus on melanoma-associated antigen (“MAGE”)-A antigens that are only expressed by tumors and absent in normal tissues.
     
 
Fast track production in two days is possible.
 
Our Proposed Clinical Trial
 
Parallel with the establishment of a cancer vaccine center in the EU, DanDrit intends to develop globally MCV in colorectal cancer, with opportunities to expand the scope of the treatment to other types of cancer. DanDrit, as a sponsor, will focus on a randomized adaptive seamless Phase IIb/III clinical trial in stage IV colorectal cancer. The proposed Proof of Concept (PoC) study (a study conducted to provide the first evidence that a candidate drug such as MCV might be effective for a disease) with an adaptive design plans to enroll 174 stage IV colorectal cancer patients after resection of metastases and therefore no evidence of disease. Regulatory authorities in the United States and Europe have published guidance documents on the use and implementation of adaptive design trials. These documents include descriptions of adaptive trials and a requirement for prospectively written standard operating procedures and working processes for executing adaptive trials, as well as a recommendation that sponsor companies engage with CROs that have the necessary experience in running such trials.
 
The clinical study is designed as a randomized, placebo controlled, multicenter, adaptive seamless Phase IIb/III clinical study. Treatment is double blinded (to the patients and physicians). Patients will be included after resection of their primary tumor and resectable metastases and after appropriate peri-or post-operative chemotherapy by stratification and random assignment to a non-vaccine control group or a vaccine group receiving five vaccinations with 14-day administration intervals followed by ten vaccines with two-month intervals. Inclusion will take place one month after finishing the last round of peri- or post-operative chemotherapy (FOLFOX or FOLFIRI) and after a negative tumor scan (head, thoracic and abdominal cavities) and normal CarcinoEmbryonic Antigen (CEA) prior to inclusion in the vaccine or the control groups. Patients will be screened for MAGE-A expression. The control group will receive five plus ten injections with physiological saline. In the event of disease progression, as verified by tumor scan during the vaccination schedule, vaccinations will be discontinued.

The initial Phase IIb/III trials are currently contemplated to be initiated in Italy. Following the initial closing of the offering, we intend to file an Investigational Medicinal Product Dossier (IMPD) in Italy which is required to obtain a clinical trial authorization (CTA) to begin trials in any Europe state.  The IMPD and CTA review and approval process is anticipated to take approximately two-three months, and we anticipate that patients will begin to be enrolled for the Phase IIb/III trials in Italy in October or November of 2014.   DanDrit has not filed an investigational new drug (IND) application with the FDA in relation to the proposed trial but anticipates filing an IND application with the FDA by the end of 2014 to initiate the process to permit manufacturing capability of MCV in the U.S. and to include U.S. patients in the Phase IIb/III trials.  Once an IND application has been filed in the U.S., we believe that we will be able to expand the PhaseIIb/III trials initiated in Italy to the U.S., however, we cannot estimate at this time when we will be able to begin enrolling U.S. patients in the trial. Although we were a sponsor for only one of the three MCV clinical trials completed to date, we have obtained the case report forms (CRF) with respect to two of the three trials and have requested the CRFs with respect to the third trial and therefore we intend to present the results obtained from the MCV clinical trials for all trials in which we have been able to obtain the related CRFs to the FDA in connection with our IND application, when filed.  While we were not the sponsor or principal investigator for all of the trials, certain employees and directors of DanDrit were significantly involved in the design of the study and the analysis and interpretation of the data in all three studies and therefore believe that any weight applied to such trial in connection with our IND application will be focused on the results and data of the trials derived from the studies and disclosed in published papers or otherwise reflected in the CRFs rather than the level of our participation. In addition, we believe that the data received in connection with the Phase IIB/III trials contemplated to be initiated in Italy, will have the greatest weight applied in connection with its IND application anticipated to be filed with the FDA (see “Clinical Trials Data and Product Approvals).
 
Corporate History and Information
 
DanDrit was incorporated in Delaware on January 18, 2011 under the name “Putnam Hills Corp.” (“Putnam”) as a vehicle to pursue a business combination through the acquisition of, or merger with, an operating business. We filed a Registration Statement on Form 10 with the U.S. Securities and Exchange Commission (the “SEC”) on August 12, 2011.
 
On February 12, 2014, the Company signed the Share Exchange Agreement, by and among DanDrit USA, DanDrit Denmark and N.E. Nielsen, as the representative of the shareholders of DanDrit Denmark, pursuant to which the Company will acquire 100% of the issued and outstanding equity securities in DanDrit Denmark in exchange for 6,000,000 of the issued and outstanding shares common stock par value $0.0001 per share of the Company. The Share Exchange was closed on February 12, 2014 pursuant to which the DanDrit Consenting Holders exchanged an aggregate of 3,879,624 equity interests of DanDrit Denmark for 5,814,947 shares of DanDrit USA. In accordance with Section 70 of the Danish Companies Act and the Articles of Association of DanDrit Denmark, the Non-Consenting Shareholders will be entitled to receive the 185,053 shares of common stock of DanDrit USA, reflected as issued and outstanding, that each such DanDrit Denmark shareholder would have been entitled to receive if such DanDrit Denmark shareholder had consented to the Share Exchange, up to an aggregate of 185,053 shares of common stock of DanDrit USA. As a result of the Share Exchange, the former shareholders of DanDrit Denmark became the controlling shareholders of the Company. The Share Exchange was accounted for as a reverse takeover/recapitalization effected by a share exchange, wherein DanDrit Denmark is considered the acquirer for accounting and financial reporting purposes. The capital, share price, and earnings per share amount in these consolidated financial statements for the period prior to the reverse merger were restated to reflect the recapitalization in accordance with the exchange ratio established in the merger.
 
Upon the closing of the Share Exchange, DanDrit USA and the its majority shareholder immediately prior to the closing agreed to cancel up to 4,400,000 shares of our common stock.  In addition, following the closing of the Share Exchange, DanDrit Biotech USA, Inc., the wholly owned subsidiary of the Company, merged with and into the Company, thereby changing and the Company’s name to “DanDrit Biotech USA, Inc.”
 
DanDrit USA will own 100% of the outstanding equity interests of DanDrit Denmark. As a result of the Share Exchange, we changed our management and reconstituted our board of directors. As of the effective time of the Share Exchange, Samir Masri, the Chief Executive Officer, Chief Financial Officer, President, Secretary and sole director of Putnam resigned as the sole officer and director of the company and appointed NE Nielsen, Dr. Jacob Rosenberg, Dr. Eric Leire, Aldo Petersen and Robert E. Wolfe as directors of Putnam, and Dr. Eric Leire as Chief Executive Officer and President and Mr. Wolfe as Chief Financial Officer, Treasurer and Secretary.
 
Our principal executive offices are located Fruebjergvej 3 Box 62, 2100 Copenhagen, Denmark, and our telephone number is +45 39179840. We maintain an Internet website at www.dandrit.com. The information contained in, or accessible from, our website is not a part of this prospectus.
 
Products
 
DanDrit plans to assess its lead compound, MelCancerVac™ (MCV), a cellular therapy, in a comparative Phase IIb/III clinical trial in advanced colorectal cancer. DanDrit uses a dendritic cell technology similar to the Dendreon’s FDA approved Provenge™ cancer vaccine.
 
DanDrit’s MCV demonstrated potential efficacy in three separate Phase IIa clinical trials in colorectal and non-small cell lung cancer. Even if MCV can be used for various cancers, DanDrit has decided to initiate MCV’s clinical development with advanced colorectal cancer. We believe that a maintenance therapy for advanced colorectal cancer represents a genuine commercial opportunity for MCV. A clear and unmet medical need for a safe maintenance therapy offers the opportunity to confirm the potential efficacy of MCV in a favorable setting. Neither the FDA nor or any other comparable governmental agency has reviewed MCV.  Therefore, any assessment of its safety or efficacy only reflects the opinion of the Company.  Furthermore, it does not indicate that MCV will achieve favorable results in any later stage trials or that the FDA or comparable agency will ultimately determine that MCV is safe and effective for purposes of granting marketing approval.
 
DanDrit plans to conduct a randomized multicenter (anticipated to be located in Europe), company sponsored clinical trial to determine the safety and efficacy of MCV as adjuvant therapy in advanced colorectal cancer. The study will determine the ability of MCV to prevent recidivism in stage IV colorectal patients with no evidence of disease after surgical resection of liver metastasis and chemotherapy. Using an Adaptive Design Clinical Study, which allows modification made to trail and/or statistical procedures of ongoing clinical trials based on accrued data, the double blinded randomized Proof-of-Concept study (a study conducted in order to confirm feasibility) will evaluate MCV with standard of care against standard of care alone in 174 colorectal cancer patients using as primary endpoints Progression Free Survival at 18 months and Overall Survival. We anticipated that the blinded comparative trial can be completed within three years. We are confident that positive upcoming clinical data will be the catalyst to unlock commercial revenues for DanDrit through either acquisition by a pharmaceutical partner or licensing deals that would yield upfront and milestone payments as well as royalties.
 
DanDrit has learned how to manufacture dendritic cells, immune cells forming part of the mammalian immune system with the main function of processing antigen