DanDrit Biotech USA, Inc. (Filer) CIK: 0001527728
v3.3.1.900
Document and Entity Information - shares
6 Months Ended
Dec. 31, 2015
Feb. 12, 2016
Document and Entity Information [Abstract]    
Entity Registrant Name DanDrit Biotech USA, Inc.  
Entity Central Index Key 0001527728  
Amendment Flag false  
Current Fiscal Year End Date --06-30  
Document Type 10-Q  
Document Period End Date Dec. 31, 2015  
Document Fiscal Year Focus 2016  
Document Fiscal Period Focus Q2  
Entity Filer Category Smaller Reporting Company  
Entity Common Stock Shares Outstanding   9,533,290
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Consolidated Balance Sheets (Unaudited) - USD ($)
Dec. 31, 2015
Jun. 30, 2015
CURRENT ASSETS:    
Cash $ 531,260 $ 421,145
Cash held in escrow 1,052,989
Other Receivables $ 581,717 $ 432,125
Prepaid Expenses 79,783
Total Current Assets $ 1,192,760 $ 1,906,259
PROPERTY AND EQUIPMENT, Net accumulated Depreciation
OTHER ASSETS    
Definite Life Intangible Assets $ 140,415 $ 164,046
Deposits 2,511 2,572
Total Other Assets 142,926 166,618
TOTAL ASSETS 1,335,686 2,072,877
CURRENT LIABILITIES:    
Notes Payable - Related Party 101,382 100,614
Accounts Payable 526,346 512,783
Accounts Payable - Related party 96,897 366,035
Accrued Expenses 169,289 16,305
Total Current Liabilities 893,914 995,737
Total Liabilities $ 893,914 $ 995,737
STOCKHOLDER'S EQUITY:    
Preferred stock, $0.0001 par value; 10,000,000 shares authorized; none issued and outstanding
Common stock, par value $0.0001, 100,000,000 shares authorized, 9,533,290, and 9,533,290 issued and outstanding at December 31, 2015 and June 30, 2015, respectively $ 953 $ 953
Additional paid-in capital 25,098,050 25,098,050
Accumulated Deficit (25,337,533) (24,565,455)
Other Comprehensive Income, net 680,302 543,592
Total Stockholder's Equity 441,772 1,077,140
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 1,335,686 $ 2,072,877
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Consolidated Balance Sheets (Parenthetical) (Unaudited) - $ / shares
Dec. 31, 2015
Jun. 30, 2015
Balance Sheet [Abstract]    
Preferred stock, par value $ 0.0001 $ 0.0001
Preferred stock, shares authorized 10,000,000 10,000,000
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, par value $ 0.0001 $ 0.0001
Common stock, shares authorized 100,000,000 100,000,000
Common stock, shares issued 9,533,290 9,533,290
Common stock, shares outstanding 9,533,290 9,533,290
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Consolidated Statement of Operations - USD ($)
3 Months Ended 6 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2015
Dec. 31, 2014
Statement of Operations [Abstract]        
Revenues $ 42,525 $ 42,525
Cost of Goods Sold 5,244 $ 70,161 5,244 $ 213,656
Gross profit (Loss) 37,281 (70,161) 37,281 (213,656)
Operating Expenses        
General and Administrative Expenses 321,629 $ 656,976 526,480 $ 897,413
Research and Development Expenses 277,648 379,407
Depreciation and Amortization 15,991 $ 4,499 19,928 $ 9,225
Consulting Expenses 16,953 203,642 47,801 328,724
Total Operating Expense 632,221 865,117 973,616 1,235,362
(LOSS) FROM OPERATIONS (594,940) (935,278) (936,335) (1,449,018)
Other Income (Expense)        
Interest (expense) 1 (28,482) 1 (47,622)
Interest (expense) - Related Party (592) (572) (1,184) (1,164)
(Loss) on Currency Transactions $ (166,348) (40,927) $ (198,576) (40,801)
Interest and Other Income 5,478 5,689
Total Other Income (Expense) $ (166,939) (64,503) $ (199,759) (83,898)
(Loss) Before Income Taxes (761,879) (999,781) (1,136,094) (1,532,916)
Income Tax Expense (Benefit) (340,103) (46,650) (364,016) (44,542)
NET (LOSS) $ (421,776) $ (953,131) $ (772,078) $ (1,488,374)
BASIC AND DILUTED LOSS PER SHARE $ (0.04) $ (0.11) $ (0.08) $ (0.175)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND DILUTED 9,533,290 8,925,309 9,533,290 8,503,147
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Statements of Other Comprehensive Loss (Unaudited) - USD ($)
3 Months Ended 6 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2015
Dec. 31, 2014
Statements of Other Comprehensive Loss [Abstract]        
Net Loss $ (421,776) $ (953,131) $ (772,078) $ (1,488,374)
Currency Translation, Net of Taxes 146,232 75,738 136,416 291,358
Other Comprehensive Loss $ (275,544) $ (877,393) $ (635,662) $ (1,197,016)
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Consolidated Statement of Cash Flows (Unaudited) - USD ($)
6 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Cash Flows from Operating Activities:    
NET (LOSS) $ (772,078) $ (1,488,374)
ADJUSTMENT TO RECONCILE NET LOSS TO NET CASH USED IN OPERATING ACTIVITIES:    
Depreciation and Amortization 19,928 $ 34,084
Accrued Interest on Notes Payable - Related Party 1,184
CHANGES IN ASSETS AND LIABILITIES:    
(Increase) Decrease in Other Receivables (149,592) $ 77,310
(Increase) Decrease in Prepaid Expenses/Deposits (79,722) 10,181
Increase (Decrease) in Accounts Payable 13,563 42,585
Increase (Decrease) in Accounts Payable - Related Party (269,138) 212,438
Increase (Decrease) in Accrued Expenses 152,984 (280,423)
Total Adjustments (310,793) 96,175
NET CASH USED IN OPERATING ACTIVITIES (1,082,871) (1,392,199)
CASH FLOWS FROM INVESTING ACTIVITIES:    
Net (Increase) Decrease in Cash Held in Escrow 1,052,989 (1,882,394)
NET CASH USED BY INVESTING ACTIVITIES $ 1,052,989 (1,882,394)
CASH FLOWS FROM FINANCING ACTIVITIES:    
Payments on Notes Payable - Related Party (1,476,686)
Payment of Stock Offering Costs (89,360)
Proceeds from Stock Offering 7,377,089
NET CASH PROVIDED BY (USED BY) FINANCING ACTIVITIES 5,811,043
Gain (Loss) on Currency Translation $ 139,997 291,357
NET INCREASE (DECREASE) IN CASH 110,115 2,827,807
CASH, BEGINNING OF PERIOD 421,145 181,024
CASH, END OF PERIOD $ 531,260 3,008,831
Cash paid during the periods for:    
Interest $ 82,816
Income Taxes
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES    
Cash received from offering held in escrow
Previously paid stock offering cost offset against stock offering $ 67,000
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Summary of Significant Accounting Policies
6 Months Ended
Dec. 31, 2015
Summary of Significant Accounting Policies [Abstract]  
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

The accompanying financial statements are unaudited. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at December 31, 2015 and 2014 and for the periods then ended have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s June 30, 2015 audited financial statements. The results of operations for the periods ended December 31, 2015 and 2014 are not necessarily indicative of the operating results for the full year.

 

Business and Basis of Presentation — DanDrit Biotech USA, Inc. (“DanDrit USA”, the “Company”, “we”, “us”, “our”) was originally incorporated in the state of Delaware on January 18, 2011 as a vehicle to pursue a business combination through the acquisition of, or merger with, an operating business. 

 

DanDrit BioTech A/S, a Danish Corporation was incorporated on April 1, 2001 (“DanDrit Denmark”) and is treated as a wholly owned subsidiary of the Company. On February 12, 2014, pursuant to the terms and conditions of a Share Exchange Agreement (the "Share Exchange Agreement"), DanDrit USA acquired approximately 100% of the issued and outstanding capital stock of DanDrit BioTech A/S, a Danish corporation (“DanDrit Denmark”) and as a result became the parent of DanDrit Denmark (the “Share Exchange”). Prior to the Share Exchange there were 5,000,000 shares of the common stock, par value $0.0001 per share (the “Common Stock”) of DanDrit Denmark’s parent company (the “Parent”) outstanding. The Parent and a shareholder agreed to cancel 4,400,000 shares of its common stock and issued 1,440,000 shares of common stock for legal and consulting services related to the Share Exchange and a future financing. At the time of the Share Exchange, the outstanding shares of the common stock of DanDrit Denmark were exchanged for 1.498842 shares of Parent’s common stock, for a total of 6,000,000 shares of common stock (including 185,053 shares of common stock reserved for issuance in accordance with Section 70 of the Danish Companies Act and the Articles of Association of DanDrit Denmark to the Non-Consenting Shareholders, deemed issued and outstanding for accounting purposes). 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 the Company’s name to “DanDrit Biotech USA, Inc.” DanDrit Denmark engages in the research and development, manufacturing and clinical trials of pharmaceutical and biological products for the human treatment of cancer using the dendritic cell technology.

 

Fiscal Year End - In June 2015, DanDrit’s board of directors approved a change to DanDrit’s fiscal year end from December 31 to June 30. 

 

Reverse Acquisition — On February 12, 2014, pursuant to the Share Exchange Agreement (the "Share Exchange Agreement"), DanDrit USA completed the acquisition of 100% of the issued and outstanding capital stock of DanDrit Denmark (the “Share Exchange”) and as a result became DanDrit Denmark’s parent company (the “Parent”). Prior to the Share Exchange there were 5,000,000 shares of the common stock, par value $.0001 per share (the “Common Stock”) of Parent outstanding. Parent and an existing shareholder agreed to cancel 4,400,000 shares of its Common Stock and issued 1,440,000 shares of Common Stock for legal and consulting services related to the Share Exchange and a future public offering. At the time of the Share Exchange each outstanding share of common stock of DanDrit Denmark was exchanged for 1.498842 shares of Parent’s Common Stock, for a total of 6,000,000 shares, resulting in 8,040,000 shares of the Parent’s Common Stock outstanding immediately following the Share Exchange, including 185,053 shares of Common Stock reserved for issuance in accordance with Section 70 of the Danish Companies Act and the Articles of Association of DanDrit Denmark to the DanDrit Denmark shareholders who have not consented to the Share Exchange (the “Non-Consenting Shareholders”), and deemed issued and outstanding for accounting purposes.

 

Consolidation — For the three and six months ended December 31, 2015 and 2014, the consolidated financial statements include the accounts and operations of DanDrit Denmark, and the accounts and operations of DanDrit USA. All material inter-company transactions and accounts have been eliminated in the consolidation.

 

Functional Currency / Foreign currency translation — The functional currency of DanDrit USA is the U.S. Dollar. The functional currency of DanDrit Denmark is the Danish Kroner (“DKK”). The Company’s reporting currency is the U.S. Dollar for the purpose of these financial statements. The Company’s balance sheet accounts are translated into U.S. dollars at the period-end exchange rates and all revenue and expenses are translated into U.S. dollars at the average exchange rates prevailing during the periods ending December 31, 2015 and 2014. Translation gains and losses are deferred and accumulated as a component of other comprehensive income in stockholders’ equity. Transaction gains and losses that arise from exchange rate fluctuations from transactions denominated in a currency other than the functional currency are included in the statement of operations as incurred.

 

Cash and Cash Equivalents — The Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. The Company had balances held in financial institutions in Denmark of $531,260 at December 31, 2015, and had $1,474,134 held in cash and cash held in escrow at June 30, 2015.

 

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 (See Note 3).

 

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 cost 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.

 

Impairment of Long-Lived Assets — Long-lived assets, such as property, plant, and equipment and patents are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed of significantly before the end of its estimated useful life.

 

Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and would no longer be depreciated. The depreciable basis of assets that are impaired and continue in use is their respective fair values.

 

Revenue Recognition and Sales — The Company’s sales of its MCV colorectal cancer vaccine have been limited to a compassionate use basis in Singapore after stage IIA trials and is not approved for current sale for any other use or location. The Company's accounts for revenue recognition in accordance with the Securities and Exchange Commission Staff Accounting Bulletin No. 101, “Revenue Recognition in Financial Statements” (SAB 101), and 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 collections of 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.

 

Research and Development Cost — The Company expenses research and development costs incurred in formulating, improving, validating and creating alternative or modified processes related to and expanding the use of our MAGE –A dendrite cell cancer therapy. Research and development costs were included in operating expenses for the three and six months ended December 31, 2015, totaled $277,648 and $379,407, and for the three and six months ended December 2014 $0 and $0, respectively. Our research and development expenses may fluctuate substantially from quarter to quarter depending on the clinical studies and the timing of samples supporting the clinical studies.

 

Income Taxes — The Company accounts for income taxes in accordance with FASB ASC Topic 740 Accounting for Income Taxes. This statement requires an asset and liability approach for accounting for income taxes.

 

Loss Per Share — The Company calculates earnings /(loss) per share in accordance with FASB ASC 260 Earnings Per Share. Basic earnings per common share (EPS) are based on the weighted average number of common shares outstanding during each period. Diluted earnings per common share are based on shares outstanding (computed as under basic EPS) and potentially dilutive common shares. Potential common shares included in the diluted earnings per share calculation include in-the-money stock options that have been granted but have not been exercised.

 

Fair Value of Financial Instruments — The Company accounts for fair value measurements for financial assets and financial liabilities in accordance with FASB ASC Topic 820, “Fair Value Measurements”. The authoritative guidance, which, among other things, defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is defined as the exit price, representing the amount that would either be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

 

  Level 1. Observable inputs such as quoted prices in active markets for identical assets or liabilities;

 

  Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

 

  Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

 

Unless otherwise disclosed, the fair value of the Company’s financial instruments including cash, accounts receivable, prepaid expenses, investments, accounts payable, accrued expenses, capital lease obligations and notes payable approximates their recorded values due to their short-term maturities.

 

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 Accounting Pronouncements — In February 2015, the FASB issued Accounting Standards Update No. 2015-02 (ASU 2015-02) "Consolidation (Topic 810): Amendments to the Consolidation Analysis." ASU 2015-02 changes the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. It is effective for annual reporting periods, and interim periods within those years, beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. We do not anticipate that the adoption of ASU 2015-02 will have any impact on our consolidated financial statements.

 

In May 2014, the Financial Accounting Standards Board (FASB) issued a new standard to achieve a consistent application of revenue recognition within the U.S., resulting in a single revenue model to be applied by reporting companies under U.S. generally accepted accounting principles. Under the new model, recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the new standard requires that reporting companies disclose the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. On July 9, 2015, the FASB agreed to delay the effective date by one year. In accordance with the agreed upon delay, the new standard is effective for us beginning in the first quarter of 2018 and we expect to adopt it at that time. The new standard is required to be applied retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying it recognized at the date of initial application. We have not yet selected a transition method nor have we determined the impact of the new standard on our consolidated condensed financial statements.

 

Other recent accounting pronouncements issued by the FASB did not or are not believed by management to have a material impact on the Company's present or future financial statements.

 

Reclassification — The financial statements for the period ended December 31, 2014 and June 30, 2015 have been reclassified to conform to the headings and classifications used in the December 31, 2015 financial statements.

 

Alleviated going concern — While the Company has incurred significant losses from inception and has insufficient working capital given its projected losses and planned Phase III testing of its product, we have additional committed sources of capital. On July 10, 2015 the Company received a capital increase commitment of $1,000,000 from a shareholder of the Company. The commitment expires on July 10, 2016. Also on July 10, 2015 the Company received a capital increase commitment of $1,000,000 from an individual. The commitment expires on July 10, 2016. We believe that our cash together with available funds from other potential sources of funds, such as loans and commitments from shareholders, will be sufficient to fund our anticipated working capital needs and capital spending requirements for the next twelve months alleviating the going concern. However, if we were to incur any unanticipated expenditures, such circumstances could put a substantial burden on our cash resources. The Company plans to raise additional capital as needed through the sale of additional common shares and the future compassionate use sales of our product.

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Property and Equipment
6 Months Ended
Dec. 31, 2015
Property and Equipment [Abstract]  
PROPERTY AND EQUIPMENT

NOTE 2 — PROPERTY AND EQUIPMENT

 

Property and equipment consisted of the following at December 31, 2015 and June 30, 2015:

 

  Useful Life December 31, 
2015
  June 30, 
2015
 
Lab equipment and instruments 4-6 $160,860  $164,778 
Computer equipment 4-6  55,094   56,436 
     215,954   221,214 
Less Accumulated Depreciation    (215,954)  (221,214)
Net Property and Equipment   $-  $- 

 

Depreciation expense amounted to $0 and $0 for the three and six month periods, respectively, ended December 31, 2015, and $0 and $0 for the three and six month periods ended December 31, 2014, respectively.

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Definite-Life Intangible Assets
6 Months Ended
Dec. 31, 2015
Definite-Life Intangible Assets [Abstract]  
DEFINITE-LIFE INTANGIBLE ASSETS

NOTE 3 — DEFINITE-LIFE INTANGIBLE ASSETS

 

At December 31, 2015 and June 30, 2015, definite-life intangible assets, net of accumulated amortization, consist of patents on the Company’s products and processes of $140,415 and $164,046, respectively. The patents are recorded at cost and amortized over twenty years from the date of application. Amortization expense for the three and six months ended December 31, 2015 amounted $15,991 and $19,928, respectively, including $12,048 in losses on abandoned assets. For the three and six months ended December 31, 2014 amortization expense amounted to $4,499 and $9,225, respectively. Expected future amortization expense for the years ended are as follows:

 

Year ending June 30,      
2016   $ 7,237  
2017     14,515  
2018     14,515  
2019     14,515  
2020     14,554  
Thereafter     75,079  
    $ 140,415  
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Notes Payable - Related Party
6 Months Ended
Dec. 31, 2015
Notes Payable - Related Party [Abstract]  
NOTES PAYABLE - RELATED PARTY

NOTE 4 — NOTES PAYABLE – RELATED PARTY

 

Notes payable to related parties consists of the following as of December 31, 2015 and June 30, 2015:

 

  Dec. 31,
2015
  June 30,
2015
 
Non-Interest Bearing Loan Payable Sunrise Financial Group Inc. $38,235  $38,235 
Note Payable ML Group  17,084   17,500 
6% Promissory Note payable to NLBDIT 2010 Enterprises, LLC  46,063   44,879 
Total Notes Payable – Related Party  101,382   100,614 
Less Current Maturities  (101,382)  (100,614)
Note Payables – Related Party Long Term $-  $- 

 

The following represents the future maturities of long-term debt as of December 31, 2015:

 

Year ending June 30,   
2016  101,382 
2017  - 
2018  - 
2019  - 
2020  - 
Thereafter  - 
   101,382 

 

As of December 31, 2015, the outstanding balance of $38,235 for professional fees paid by a related party and amounts advanced to the Parent are reported as loan payable - related party. The $38,235 loan payable was acquired in the reverse acquisition. The amount is unsecured, non-interest bearing and has no stipulated repayment terms.

 

A 6% Promissory Note payable (the “Note”) to NLBDIT 2010 Enterprises, LLC, an entity controlled by a shareholder of the Company, was acquired by the Company in the reverse acquisition, payable on February 12, 2014 upon the completion date of the Share Exchange. As of December 31, 2015 the outstanding balance on the Note, including accrued interest, was $46,063. During the three and six months ended December 31, 2015, the Company recorded related party interest on the Note of $592, and $1,184, respectively and during the three and six months ended December 31, 2014, $572, and $1,164, respectively.

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Leases
6 Months Ended
Dec. 31, 2015
Leases [Abstract]  
LEASES

NOTE 5 — LEASES

 

Operating Leases — The Company leases laboratory and production space under operating lease agreements which can be cancelled with 3-months notice. The lease calls for monthly payments of DKK 6,300 (approximately $932 at December 31, 2015).

 

On March 27, 2014, the Company entered into an operating lease agreement for office space from a related party. The Lease calls for monthly payments of DKK 20,000 (approximately $2,958). The lease was terminated on May 31, 2015.

 

 On March 25, 2015, the Company entered into an agreement for use of virtual office space at a rate of $375/month on a month-to-month basis, which can be terminated by either party on one month’s notice.

 

Lease expense charged to operations was $3,900 and $7,840 for the three and six months ended December 31, 2015, respectively and $11,603 and $23,336 for the three and six months ended December 31, 2014, respectively.

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Income Taxes
6 Months Ended
Dec. 31, 2015
Income Taxes [Abstract]  
INCOME TAXES

NOTE 6 — INCOME TAXES

 

The Company accounts for income taxes in accordance with FASB ASC Topic 740, Accounting for Income Taxes; which requires the Company to provide a net deferred tax asset or liability equal to the expected future tax benefit or expense of temporary reporting differences between book and tax accounting and any available operating loss or tax credit carry forwards. The amount of and ultimate realization of the benefits from the deferred tax assets for income tax purposes is dependent, in part, upon the tax laws in effect, the Company’s future earnings, and other future events, the effects of which cannot be determined.

 

As of December 31, 2015, the Company had net operating loss carry-forwards of approximately $9,717,603 at an estimated effective tax rate of 22% or $2,137,873 for Danish tax purposes which do not expire and net operating loss carry-forwards of approximately $808,668 at an estimated effective tax rate of 34% or $274,947 for U.S. Federal Tax purposes which expire through 2034, a portion of which shall be limited due to the change in control of the Parent.

 

The Company files U.S. and Danish income tax returns, and they are generally no longer subject to tax examinations for years prior to 2011 and 2009, respectively.

 

The temporary differences, tax credits and carry forwards gave rise to the following deferred tax asset (liabilities) at December 31, 2015 and June 30, 2015:

 

    Dec. 31,
2015
    June 30, 
2015
 
Excess of Tax over book depreciation Fixed assets   $ 8,589     $ 10,240  
Excess of Tax over book depreciation Patents     3,569       5,560  
Net Operating Loss Carry forward     2,412,820       2,535,177  
Valuation Allowance     (2,424,978 )     (2,550,977 )
Total Deferred Tax Asset (Liabilities)   $ -     $ -  

 

In accordance with prevailing accounting guidance, the Company is required to recognize and disclose any income tax uncertainties. The guidance provides a two-step approach to recognize and disclose any income tax uncertainties. The guidance provides a two-step approach to recognizing and measuring tax benefits and liabilities when realization of the tax position is uncertain. The first step is to determine whether the tax position meet the more-likely-than-not condition for recognition and the second step is to determine the amount to be recognized based on the cumulative probability that exceeds 50%. The amount of and ultimate realization of the benefits from the deferred tax assets for income tax purposes is dependent, in part, upon the tax laws in effect, the Company’s future earnings, and other future events, the effects of which can be difficult to determine and can only be estimated. Management estimates that it is more likely than not that the Company will not generate adequate net profits to use the deferred tax assets; and consequently, a valuation allowance was recorded for all deferred tax assets.

A reconciliation of income tax expense at the federal statutory rate to income tax expense at the Company’s effective rate is as follows at December 31, 2015 and 2014:

 

    December 31, 2015     December 31, 2014  
Computed Tax at Expected Statutory Rate   $ (386,272 )   $ (337,242 )
Non-US Income Taxed at Different Rates     133,372       183,063  
Non-Deductable expenses     2,460       8,390  
Valuation allowance     (113,576 )     101,247  
Income Tax Expense   $ (364,016 )   $ (44,542 )

 

The components of income tax expense (benefit) from continuing operations for the three months ended December, 2015 and 2014 consisted of the following:

 

    2015     2014  
Current Tax Expense            
Danish Income Tax   $ (364,016 )   $ (44,542 )
Total Current Tax Expense     (364,016 )     (44,542 )
Deferred Income Tax Expense (Benefit)                
Excess of Tax over Book Depreciation Fixed Assets     6,369       19,259  
Excess of Tax over Book Depreciation Patents     2,863       67,488  
Net Operating Loss Carry forwards     (104,344 )     (187,994 )
Change in the Valuation allowance     (113,576 )     101,247  
Total Deferred Tax Expense   $ -     $ -  

 

Deferred income tax expense / (benefit) results primarily from the reversal of temporary timing differences between tax and financial statement income.

v3.3.1.900
Loss Per Share
6 Months Ended
Dec. 31, 2015
Loss Per Share [Abstract]  
LOSS PER SHARE

NOTE 7 — LOSS PER SHARE

 

The following data shows the amounts used in computing loss per share and the effect on income and the weighted average number of shares of potential dilutive common stock for the three and six month periods ended December 31, 2015, and 2014:

 

  For the 3 Months Ended  For the 6 Months Ended 
  December 31,  December 31, 
  2015  2014  2015  2014 
 Net (Loss)  (421,776)  (953,131)  (772,078)  (1,488,374)
Weighted average number of common shares used in basic earnings per share  9,533,290   8,925,309   9,533,290   8,503,147 
Effect of dilutive securities, stock options and warrants  -   -   -   - 
Weighted average number of common shares and potential dilutive common shares outstanding used in dilutive earnings per share  9,533,290   8,925,309   9,533,290   8,503,147 

 

For the three and six months ended December 31, 2015 and 2014, the Company had no common stock equivalents.

v3.3.1.900
Stockholders' Equity
6 Months Ended
Dec. 31, 2015
Stockholders' Equity [Abstract]  
STOCKHOLDERS' EQUITY

NOTE 8 — STOCKHOLDERS’ EQUITY

 

Common Stock — The Company has 100,000,000 authorized shares of Common stock $0.0001. As of December 31, 2015 and June 30, 2015 there were 9,533,290 shares issued and outstanding.

 

Common Stock Issuances — On December 31, 2014, the Company received $2,000,000 in connection with a private offering of 400,000 shares of common stock at an offering price of $5.00 per share.

 

During the year ended December 31, 2014, pursuant to the Company’s offering up to $12,000,000 (2,400,000 shares) of common stock at an offering price of $5.00 per share in an initial public offering pursuant to a registration statement effective on August 12, 2014 (the “Offering”), the Company sold 1,093,290 shares of common stock for gross proceeds of $5,466,450 less offering costs of $156,360.

 

Share Exchange Agreement/Reverse Acquisition - On February 12, 2014, in accordance with the terms and conditions of a Share Exchange Agreement (the "Share Exchange Agreement"), we completed the acquisition of approximately 100% of the issued and outstanding capital stock of DanDrit Denmark (the “Share Exchange”) and as a result became DanDrit Denmark’s parent company (the “Parent”). In connection with the Share Exchange, each outstanding share of common stock of DanDrit Denmark was exchanged for 1.498842 shares of DanDrit USA’s common stock, par value $.0001 per share (the “Common Stock”) for an aggregate of 6,000,000 shares, including 185,053 shares of Common Stock reserved for issuance, in accordance with Section 70 of the Danish Companies Act and the Articles of Association of DanDrit Denmark, to the DanDrit Denmark shareholders who did not consent to the Share Exchange and deemed issued and outstanding for accounting purposes. In addition, in connection with the Share Exchange (1) the sole shareholder prior to the Share Exchange agreed to cancel 4,400,000 shares of outstanding Common Stock owned by it and (2) the board of directors and executive management of DanDrit Denmark was appointed to serve as the Board of Directors and executive management of DanDrit USA effective upon the resignation of the sole officer and director of DanDrit USA prior to the closing of the Share Exchange.

 

In connection with the Offering, during the quarter ended September 30, 2014, the Company sold and issued an aggregate of 145,100 shares of common stock for aggregate gross proceeds of $725,500. 

 

On October 10, 2014, in connection with a closing of the Offering, the Company sold and issued 300,200 shares of common stock for aggregate gross proceeds of $1,501,000.

 

In connection with the Offering, on October 23, 2014, the Company sold and issued 589,490 shares of common stock for aggregate gross proceeds of $2,947,450. 

 

Voting — Holders of the Company’s common stock are entitled to one vote for each share held of record on each matter submitted to a vote of stockholders, including the election of directors, and do not have any right to cumulate votes in the election of directors.

 

Dividends — Holders of the Company’s common stock are entitled to receive ratably such dividends as our Board of Directors from time to time may declare out of funds legally available.

 

Liquidation Rights — In the event of any liquidation, dissolution or winding-up of affairs of the Company, after payment of all of our debts and liabilities, the holders of the Company’s common stock will be entitled to share ratably in the distribution of any of our remaining assets.

v3.3.1.900
Commitments and Contingencies
6 Months Ended
Dec. 31, 2015
Commitments and Contingencies [Abstract]  
COMMITMENTS AND CONTINGENCIES

NOTE 9 — COMMITMENTS AND CONTINGENCIES

 

Shares held for non-consenting shareholders – In connection with the Share Exchange agreement certain shareholders of Dandrit Denmark had not been identified or did not consent to the exchange of shares. In accordance with Section 70 of the Danish Companies Act and the Articles of Association of DanDrit Denmark, the Non-Consenting Shareholders that did not exchange the DanDrit Denmark equity interests owned by such Non-Consenting Shareholders for shares of the Company, will be entitled to receive up to 185,053 shares of common stock of the Company that each such Non-Consenting Shareholder would have been entitled to receive if such shareholder had consented to the Share Exchange. The 185,053 shares have been reflected as issued and outstanding in the accompanying financial statements.

 

Clinical Trial Agreements– The Company’s subsidiary, DanDrit Biotech A/S, signed a contract of collaboration with the University Hospital IRCCS “San Martino” - IST – National Institute for Cancer Research, known as the San Martino Hospital of Genoa. Dr. Alberto Sobrero, the Head of the Medical Oncology Unit at the San Martino Hospital, is principal investigator of the randomized multicenter study. The collaboration relates to a Phase III adjuvant study of DanDrit’s vaccine in patients with no evident disease (“NED”) stage IV colorectal cancer (“CRC”). The primary goal of the study is to evaluate the efficacy of DanDrit’sMelCancerVac® (“MCV”) in stage IV CRC patients rendered disease free after the completion of standard treatments in accordance with local practices.

 

On April 28, 2015 the Company entered into a service agreement with Fondazione Giscad per la Ricerca sui Tumori to support Dandrit in a clinical trial to be conducted in Italy.

 

Patient Name Use Program Agreements - On December 16, 2013, DanDrit Denmark entered into an agreement with a Dutch company (the “MCV Partner”) regarding a Patient Name Use Program (PNU) for the Company’s MCV. This program will allow DanDrit Denmark to sell MCV for a year of treatment (10 vaccines) to cancer patients through the MCV Partner. The MCV Partner offers a worldwide online platform providing access to non-registered medicines for patients with life threatening diseases. The MCV Partner is a turnkey solution and will be in charge of regulatory, recruitment, logistics, and pharmaco vigilance. The Company will pay the MCV Partner a royalty on a country to country basis for 20 years on MCV sales sold under the agreement. Either party may terminate the agreement with 180 day written notice.

 

On April 23, 2015, the Company entered into a collaboration agreement with Riyadh Pharma in Saudi Arabia to promote cooperation in the manufacturing and marketing of DanDrit's dendritic cell cancer vaccine.

 

Manufacturing Agreements - On January 28, 2014, the Company entered into an agreement with Cellin Technologies for the manufacture of the MCV Cancer vaccine.

 

On August 8, 2014, the Company entered into an agreement with Cellin Technologies for the manufacture of the Melanoma Cell Lysate.

 

Food and Drug Administration (FDA) - The FDA has extensive regulatory authority over biopharmaceutical products (drugs and biological products), manufacturing protocols and procedures and the facilities in which they will be manufactured. Any new bio product intended for use in humans is subject to rigorous testing requirements imposed by the FDA with respect to product efficacy and safety, possible toxicity and side effects. FDA approval for the use of new bio products (which can never be assured) requires several rounds of extensive preclinical testing and clinical investigations conducted by the sponsoring pharmaceutical company prior to sale and use of the product. At each stage, the approvals granted by the FDA include the manufacturing process utilized to produce the product. Accordingly, the Company’s cell systems used for the production of therapeutic or bio therapeutic products are subject to significant regulation by the FDA under the Federal Food, Drug and Cosmetic Act, as amended.

 

Product liability -The contract production services for therapeutic products offered exposes an inherent risk of liability as bio therapeutic substances manufactured, at the request and to the specifications of customers, could foreseeably cause adverse effects. The Company seeks to obtain agreements from contract production customers indemnifying and defending the Company from any potential liability arising from such risk. There can be no assurance, however, that the Company will be successful in obtaining such agreements in the future or that such indemnification agreements will adequately protect the Company against potential claims relating to such contract production services. The Company may also be exposed to potential product liability claims by users of its products. A successful partial or completely uninsured claim against the Company could have a material adverse effect on the Company’s operations.

 

Employment Agreements -The Company and its Subsidiary have employment agreements with officers of the Company.

 

Contingencies - The Company is from time to time involved in routine legal and administrative proceedings and claims of various types. While any proceedings or claim contains an element of uncertainty, management does not expect a material impact on our results of operations or financial position.

 

Related Party Consulting Agreement — As of December 11, 2014, the Company entered into an agreement with Northern Biotech Fund SARL, an entity controlled by a shareholder of the Company. Northern Biotech Fund SARL provided consulting services to the Company through January 2015 in connection with planning and structuring a fund raising for the Company.

v3.3.1.900
Related Party Transactions
6 Months Ended
Dec. 31, 2015
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS

NOTE 10 — RELATED PARTY TRANSACTIONS

 

On July 10, 2015 the Company received a capital increase commitment on $1,000,000 from a shareholder of the Company. The commitment expires on July 10, 2016.

 

At December 31, 2015 and 2014, the Company had various notes payable with shareholders of the Company (See Note 4).

 

On March 27, 2014 the Company entered into an operating lease agreement for office space from a shareholder of the Company (See Note 5) which was terminated on May 31, 2015. During the three and six months ended December 31, 2015, the Company paid the related party $0 and $0, respectively. During the same periods in 2014 the Company paid $8,808 and $17,746, respectively.

 

During the three and six months ended December 31, 2015 the Company paid $22,020 and $44,365 respectively, for medical consultancy services to JARO Holding ApS and in the same periods in 2014, $27,613 and $53,080, respectively. JARO Holding ApS is an entity owned by a director of the Company.

 

In July, 2015 the Company paid DKK50.000 ($7,448) to Paseco ApS, an entity owned by a shareholder of the Company, for consultancy services provided in July 2015.

 

During the three and six months ended December 31, 2015, a law firm partially owned by the Company’s Chairman of the Board of Directors provided legal services of $8,193 and $29,765, respectively, to the Company and in the same periods in 2014, $4,096 and $62,935, respectively. At December 31, 2015 the Company had a payable to the firm in the amount of $96,897.

v3.3.1.900
Subsequent Events
6 Months Ended
Dec. 31, 2015
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS


NOTE 11 — SUBSEQUENT EVENTS

 

The Company’s management reviewed material events through February 11, 2016.

v3.3.1.900
Summary of Significant Accounting Policies (Policies)
6 Months Ended
Dec. 31, 2015
Summary of Significant Accounting Policies [Abstract]  
Business and Basis of Presentation

Business and Basis of Presentation — DanDrit Biotech USA, Inc. (“DanDrit USA”, the “Company”, “we”, “us”, “our”) was originally incorporated in the state of Delaware on January 18, 2011 as a vehicle to pursue a business combination through the acquisition of, or merger with, an operating business. 

 

DanDrit BioTech A/S, a Danish Corporation was incorporated on April 1, 2001 (“DanDrit Denmark”) and is treated as a wholly owned subsidiary of the Company. On February 12, 2014, pursuant to the terms and conditions of a Share Exchange Agreement (the "Share Exchange Agreement"), DanDrit USA acquired approximately 100% of the issued and outstanding capital stock of DanDrit BioTech A/S, a Danish corporation (“DanDrit Denmark”) and as a result became the parent of DanDrit Denmark (the “Share Exchange”). Prior to the Share Exchange there were 5,000,000 shares of the common stock, par value $0.0001 per share (the “Common Stock”) of DanDrit Denmark’s parent company (the “Parent”) outstanding. The Parent and a shareholder agreed to cancel 4,400,000 shares of its common stock and issued 1,440,000 shares of common stock for legal and consulting services related to the Share Exchange and a future financing. At the time of the Share Exchange, the outstanding shares of the common stock of DanDrit Denmark were exchanged for 1.498842 shares of Parent’s common stock, for a total of 6,000,000 shares of common stock (including 185,053 shares of common stock reserved for issuance in accordance with Section 70 of the Danish Companies Act and the Articles of Association of DanDrit Denmark to the Non-Consenting Shareholders, deemed issued and outstanding for accounting purposes). 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 the Company’s name to “DanDrit Biotech USA, Inc.” DanDrit Denmark engages in the research and development, manufacturing and clinical trials of pharmaceutical and biological products for the human treatment of cancer using the dendritic cell technology.

Fiscal Year End

Fiscal Year End - In June 2015, DanDrit’s board of directors approved a change to DanDrit’s fiscal year end from December 31 to June 30.

Reverse Acquisition

Reverse Acquisition — On February 12, 2014, pursuant to the Share Exchange Agreement (the "Share Exchange Agreement"), DanDrit USA completed the acquisition of 100% of the issued and outstanding capital stock of DanDrit Denmark (the “Share Exchange”) and as a result became DanDrit Denmark’s parent company (the “Parent”). Prior to the Share Exchange there were 5,000,000 shares of the common stock, par value $.0001 per share (the “Common Stock”) of Parent outstanding. Parent and an existing shareholder agreed to cancel 4,400,000 shares of its Common Stock and issued 1,440,000 shares of Common Stock for legal and consulting services related to the Share Exchange and a future public offering. At the time of the Share Exchange each outstanding share of common stock of DanDrit Denmark was exchanged for 1.498842 shares of Parent’s Common Stock, for a total of 6,000,000 shares, resulting in 8,040,000 shares of the Parent’s Common Stock outstanding immediately following the Share Exchange, including 185,053 shares of Common Stock reserved for issuance in accordance with Section 70 of the Danish Companies Act and the Articles of Association of DanDrit Denmark to the DanDrit Denmark shareholders who have not consented to the Share Exchange (the “Non-Consenting Shareholders”), and deemed issued and outstanding for accounting purposes.

Consolidation

Consolidation — For the three and six months ended December 31, 2015 and 2014, the consolidated financial statements include the accounts and operations of DanDrit Denmark, and the accounts and operations of DanDrit USA. All material inter-company transactions and accounts have been eliminated in the consolidation.

Functional Currency / Foreign currency translation

Functional Currency / Foreign currency translation — The functional currency of DanDrit USA is the U.S. Dollar. The functional currency of DanDrit Denmark is the Danish Kroner (“DKK”). The Company’s reporting currency is the U.S. Dollar for the purpose of these financial statements. The Company’s balance sheet accounts are translated into U.S. dollars at the period-end exchange rates and all revenue and expenses are translated into U.S. dollars at the average exchange rates prevailing during the periods ending December 31, 2015 and 2014. Translation gains and losses are deferred and accumulated as a component of other comprehensive income in stockholders’ equity. Transaction gains and losses that arise from exchange rate fluctuations from transactions denominated in a currency other than the functional currency are included in the statement of operations as incurred.

Cash and Cash Equivalents

Cash and Cash Equivalents — The Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. The Company had balances held in financial institutions in Denmark of $531,260 at December 31, 2015, and had $1,474,134 held in cash and cash held in escrow at June 30, 2015.

Property and Equipment

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 (See Note 3).

Intangible Assets

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 cost 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.

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets — Long-lived assets, such as property, plant, and equipment and patents are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed of significantly before the end of its estimated useful life.

 

Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and would no longer be depreciated. The depreciable basis of assets that are impaired and continue in use is their respective fair values.

Revenue Recognition and Sales

Revenue Recognition and Sales — The Company’s sales of its MCV colorectal cancer vaccine have been limited to a compassionate use basis in Singapore after stage IIA trials and is not approved for current sale for any other use or location. The Company's accounts for revenue recognition in accordance with the Securities and Exchange Commission Staff Accounting Bulletin No. 101, “Revenue Recognition in Financial Statements” (SAB 101), and 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 collections of resulting receivable is reasonably assured. Products are primarily shipped FOB shipping point at which time title passes to the customer.

Value Added Tax

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.

Research and Development Expenses

 Research and Development Cost — The Company expenses research and development costs incurred in formulating, improving, validating and creating alternative or modified processes related to and expanding the use of our MAGE –A dendrite cell cancer therapy. Research and development costs were included in operating expenses for the three and six months ended December 31, 2015, totaled $277,648 and $379,407, and for the three and six months ended December 2014 $0 and $0, respectively. Our research and development expenses may fluctuate substantially from quarter to quarter depending on the clinical studies and the timing of samples supporting the clinical studies.

Income Taxes

Income Taxes — The Company accounts for income taxes in accordance with FASB ASC Topic 740 Accounting for Income Taxes. This statement requires an asset and liability approach for accounting for income taxes.

Loss Per Share

Loss Per Share — The Company calculates earnings /(loss) per share in accordance with FASB ASC 260 Earnings Per Share. Basic earnings per common share (EPS) are based on the weighted average number of common shares outstanding during each period. Diluted earnings per common share are based on shares outstanding (computed as under basic EPS) and potentially dilutive common shares. Potential common shares included in the diluted earnings per share calculation include in-the-money stock options that have been granted but have not been exercised.

Fair Value of Financial Instruments

Fair Value of Financial Instruments — The Company accounts for fair value measurements for financial assets and financial liabilities in accordance with FASB ASC Topic 820, “Fair Value Measurements”. The authoritative guidance, which, among other things, defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is defined as the exit price, representing the amount that would either be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

 

 Level 1. Observable inputs such as quoted prices in active markets for identical assets or liabilities;

 

 Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

 

 Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

 

Unless otherwise disclosed, the fair value of the Company’s financial instruments including cash, accounts receivable, prepaid expenses, investments, accounts payable, accrued expenses, capital lease obligations and notes payable approximates their recorded values due to their short-term maturities.

Accounting Estimates

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 Accounting Pronouncements

Recent Accounting Pronouncements — In February 2015, the FASB issued Accounting Standards Update No. 2015-02 (ASU 2015-02) "Consolidation (Topic 810): Amendments to the Consolidation Analysis." ASU 2015-02 changes the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. It is effective for annual reporting periods, and interim periods within those years, beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. We do not anticipate that the adoption of ASU 2015-02 will have any impact on our consolidated financial statements.

 

In May 2014, the Financial Accounting Standards Board (FASB) issued a new standard to achieve a consistent application of revenue recognition within the U.S., resulting in a single revenue model to be applied by reporting companies under U.S. generally accepted accounting principles. Under the new model, recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the new standard requires that reporting companies disclose the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. On July 9, 2015, the FASB agreed to delay the effective date by one year. In accordance with the agreed upon delay, the new standard is effective for us beginning in the first quarter of 2018 and we expect to adopt it at that time. The new standard is required to be applied retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying it recognized at the date of initial application. We have not yet selected a transition method nor have we determined the impact of the new standard on our consolidated condensed financial statements.

 

Other recent accounting pronouncements issued by the FASB did not or are not believed by management to have a material impact on the Company's present or future financial statements.

Reclassification

Reclassification — The financial statements for the period ended December 31, 2014 and June 30, 2015 have been reclassified to conform to the headings and classifications used in the December 31, 2015 financial statements.

Alleviated going concern
Alleviated going concern — While the Company has incurred significant losses from inception and has insufficient working capital given its projected losses and planned Phase III testing of its product, we have additional committed sources of capital. On July 10, 2015 the Company received a capital increase commitment of $1,000,000 from a shareholder of the Company. The commitment expires on July 10, 2016. Also on July 10, 2015 the Company received a capital increase commitment of $1,000,000 from an individual. The commitment expires on July 10, 2016. We believe that our cash together with available funds from other potential sources of funds, such as loans and commitments from shareholders, will be sufficient to fund our anticipated working capital needs and capital spending requirements for the next twelve months alleviating the going concern. However, if we were to incur any unanticipated expenditures, such circumstances could put a substantial burden on our cash resources. The Company plans to raise additional capital as needed through the sale of additional common shares and the future compassionate use sales of our product.
v3.3.1.900
Property and Equipment (Tables)
6 Months Ended
Dec. 31, 2015
Property and Equipment [Abstract]  
Summary of property and equipment
  Useful Life December 31, 
2015
  June 30, 
2015
 
Lab equipment and instruments 4-6 $160,860  $164,778 
Computer equipment 4-6  55,094   56,436 
     215,954   221,214 
Less Accumulated Depreciation    (215,954)  (221,214)
Net Property and Equipment   $-  $- 
v3.3.1.900
Definite-Life Intangible Assets (Tables)
6 Months Ended
Dec. 31, 2015
Definite-Life Intangible Assets [Abstract]  
Schedule of finite-lived intangible assets, future amortization expense
Year ending June 30,   
2016 $7,237 
2017  14,515 
2018  14,515 
2019  14,515 
2020  14,554 
Thereafter  75,079 
  $140,415 
v3.3.1.900
Notes Payable - Related Party (Tables)
6 Months Ended
Dec. 31, 2015
Notes Payable - Related Party [Abstract]  
Summary of notes payable to related parties
  Dec. 31,
2015
  June 30,
2015
 
Non-Interest Bearing Loan Payable Sunrise Financial Group Inc. $38,235  $38,235 
Note Payable ML Group  17,084   17,500 
6% Promissory Note payable to NLBDIT 2010 Enterprises, LLC  46,063   44,879 
Total Notes Payable – Related Party  101,382   100,614 
Less Current Maturities  (101,382)  (100,614)
Note Payables – Related Party Long Term $-  $-
Schedule of future maturities of long-term debt
Year ending June 30,   
2016  101,382 
2017  - 
2018  - 
2019  - 
2020  - 
Thereafter  - 
   101,382 
v3.3.1.900
Income Taxes (Tables)
6 Months Ended
Dec. 31, 2015
Income Taxes [Abstract]  
Summary of deferred tax asset (liabilities)

  Dec. 31,
2015
  June 30, 
2015
 
Excess of Tax over book depreciation Fixed assets $8,589  $10,240 
Excess of Tax over book depreciation Patents  3,569   5,560 
Net Operating Loss Carry forward  2,412,820   2,535,177 
Valuation Allowance  (2,424,978)  (2,550,977)
Total Deferred Tax Asset (Liabilities) $-  $- 
Summary of reconciliation of income tax expense at the federal statutory rate

  December 31, 2015  December 31, 2014 
Computed Tax at Expected Statutory Rate $(386,272) $(337,242)
Non-US Income Taxed at Different Rates  133,372   183,063 
Non-Deductable expenses  2,460   8,390 
Valuation allowance  (113,576)  101,247 
Income Tax Expense $(364,016) $(44,542)
Summary of components of income tax expense (benefit) from continuing operations

  2015  2014 
Current Tax Expense      
Danish Income Tax $(364,016) $(44,542)
Total Current Tax Expense  (364,016)  (44,542)
Deferred Income Tax Expense (Benefit)        
Excess of Tax over Book Depreciation Fixed Assets  6,369   19,259 
Excess of Tax over Book Depreciation Patents  2,863   67,488 
Net Operating Loss Carry forwards  (104,344)  (187,994)
Change in the Valuation allowance  (113,576)  101,247 
Total Deferred Tax Expense $-  $- 
v3.3.1.900
Loss Per Share (Tables)
6 Months Ended
Dec. 31, 2015
Loss Per Share [Abstract]  
Schedule of weighted average number of shares of potential dilutive common stock

  For the 3 Months Ended  For the 6 Months Ended 
  December 31,  December 31, 
  2015  2014  2015  2014 
 Net (Loss)  (421,776)  (953,131)  (772,078)  (1,488,374)
Weighted average number of common shares used in basic earnings per share  9,533,290   8,925,309   9,533,290   8,503,147 
Effect of dilutive securities, stock options and warrants  -   -   -   - 
Weighted average number of common shares and potential dilutive common shares outstanding used in dilutive earnings per share  9,533,290   8,925,309   9,533,290   8,503,147
v3.3.1.900
Summary of Significant Accounting Policies (Details) - USD ($)
1 Months Ended 3 Months Ended 6 Months Ended
Jul. 10, 2015
Jul. 10, 2015
Feb. 12, 2014
Mar. 27, 2014
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2015
Dec. 31, 2014
Jun. 30, 2015
Jun. 30, 2014
Summary of Significant Accounting Policies (Textual)                    
Common stock, par value         $ 0.0001   $ 0.0001   $ 0.0001  
Cash         $ 531,260 $ 3,008,831 $ 531,260 $ 3,008,831 $ 421,145 $ 181,024
Property, plant and equipment, depreciation methods             Straight-line      
Cash held in escrow             $ 1,052,989  
Common stock reserved for issuance         185,053   185,053      
Value added tax, percentage             25.00%      
Value added tax paid to Danish and EU vendors             25.00%      
Research and development expense         $ 277,648 $ 379,407    
Capital increase commitment received expiration date Jul. 10, 2016                  
Minimum [Member]                    
Summary of Significant Accounting Policies (Textual)                    
Property plant and equipment estimated useful lives             four      
Maximum [Member]                    
Summary of Significant Accounting Policies (Textual)                    
Property plant and equipment estimated useful lives             six years      
Stockholders [Member]                    
Summary of Significant Accounting Policies (Textual)                    
Capital increase commitment received $ 1,000,000 $ 1,000,000                
Capital increase commitment received expiration date   Jul. 10, 2016   May 31, 2015            
Individual [Member]                    
Summary of Significant Accounting Policies (Textual)                    
Capital increase commitment received $ 1,000,000 $ 1,000,000                
Common Stock [Member]                    
Summary of Significant Accounting Policies (Textual)                    
Common stock, par value     $ 0.0001              
Shares of parent common stock outstanding     8,040,000              
Common stock reserved for issuance     185,053              
Shares prior to share exchange agreement     5,000,000              
Share exchange agreement, acquisition percentage     100.00%              
Share exchange agreement, shares held by consenting shareholders of company     1.498842              
Share exchange agreement, shares issued to parent company     6,000,000              
Share exchange agreement, number of shares cancellled     4,400,000              
Common shares issued for legal and consulting services     1,440,000              
v3.3.1.900
Property and Equipment (Details) - USD ($)
6 Months Ended
Dec. 31, 2015
Jun. 30, 2015
Property, Plant and Equipment [Line Items]    
Gross Property and Equipment $ 215,954 $ 221,214
Less Accumulated Depreciation $ (215,954) $ (221,214)
Net Property and Equipment
Lab equipment and instruments [Member]    
Property, Plant and Equipment [Line Items]    
Gross Property and Equipment $ 160,860 $ 164,778
Lab equipment and instruments [Member] | Minimum [Member]    
Property, Plant and Equipment [Line Items]    
Useful Life 4 years  
Lab equipment and instruments [Member] | Maximum [Member]    
Property, Plant and Equipment [Line Items]    
Useful Life 6 years  
Computer equipment [Member]    
Property, Plant and Equipment [Line Items]    
Gross Property and Equipment $ 55,094 $ 56,436
Computer equipment [Member] | Minimum [Member]    
Property, Plant and Equipment [Line Items]    
Useful Life 4 years  
Computer equipment [Member] | Maximum [Member]    
Property, Plant and Equipment [Line Items]    
Useful Life 6 years  
v3.3.1.900
Property and Equipment (Details Textual) - USD ($)
3 Months Ended 6 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2015
Dec. 31, 2014
Property and Equipment (Textual)        
Depreciation expense $ 0 $ 0 $ 0 $ 0
v3.3.1.900
Definite-Life Intangible Assets (Details) - USD ($)
Dec. 31, 2015
Jun. 30, 2015
Definite-Life Intangible Assets [Abstract]    
2016 $ 7,237  
2017 14,515  
2018 14,515  
2019 14,515  
2020 14,554  
Thereafter 75,079  
Finite-Lived Intangible Assets, Net $ 140,415 $ 164,046
v3.3.1.900
Definite-Life Intangible Assets (Details Textual) - USD ($)
3 Months Ended 6 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2015
Dec. 31, 2014
Jun. 30, 2015
Definite Life Intangible Assets (Textual)          
Definite Life Intangible Assets $ 140,415   $ 140,415   $ 164,046
Amortization expense 15,991 $ 4,499 19,928 $ 9,225  
Losses on abandoned assets $ 12,048   $ 12,048    
v3.3.1.900
Notes Payable - Related Party (Details) - USD ($)
Dec. 31, 2015
Jun. 30, 2015
Related Party Transaction [Line Items]    
Total Notes Payable - Related Party $ 101,382 $ 100,614
Less Current Maturities $ (101,382) $ (100,614)
Note Payables - Related Party Long Term
Non-Interest Bearing Loan Payable Sunrise Financial Group Inc [Member]    
Related Party Transaction [Line Items]    
Total Notes Payable - Related Party $ 38,235 $ 38,235
Note Payable ML Group [Member]    
Related Party Transaction [Line Items]    
Total Notes Payable - Related Party 17,084 17,500
6% Promissory Note payable to NLBDIT 2010 Enterprises, LLC [Member]    
Related Party Transaction [Line Items]    
Total Notes Payable - Related Party $ 46,063 $ 44,879
v3.3.1.900
Notes Payable - Related Party (Details 1)
Dec. 31, 2015
USD ($)
Notes Payable - Related Party [Abstract]  
2016 $ 101,382
2017
2018
2019
2020
Thereafter
Total $ 101,382
v3.3.1.900
Notes Payable - Related Party (Details Textual) - USD ($)
3 Months Ended 6 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2015
Dec. 31, 2014
Notes Payable - Related Party [Textual]        
Loan payable - related party $ 38,235   $ 38,235  
Unsecured loan, outstanding 38,235   38,235  
Related party interest on the note $ 592 $ 572 1,184 $ 1,164
6% Promissory Note payable to NLBDIT 2010 Enterprises, LLC [Member]        
Notes Payable - Related Party [Textual]        
Outstanding balance on note including accrued interest     $ 46,063  
v3.3.1.900
Leases (Details)
1 Months Ended 3 Months Ended 6 Months Ended
Mar. 25, 2015
USD ($)
Mar. 27, 2014
USD ($)
Mar. 27, 2014
DKK
Dec. 31, 2015
USD ($)
Dec. 31, 2014
USD ($)
Dec. 31, 2015
USD ($)
Dec. 31, 2015
DKK
Dec. 31, 2014
USD ($)
Leases (Textual)                
Rental payments for Operating Leases       $ 3,900 $ 11,603 $ 7,840   $ 23,336
Lab space [Member]                
Leases (Textual)                
Rental payments for Operating Leases           $ 932 DKK 6,300  
Office space [Member]                
Leases (Textual)                
Rental payments for Operating Leases   $ 2,958 DKK 20,000          
Operating lease agreement, Description   The lease was terminated on May 31, 2015 The lease was terminated on May 31, 2015          
Virtual office [Member]                
Leases (Textual)                
Rental payments for Operating Leases $ 375              
v3.3.1.900
Income Taxes (Details) - USD ($)
Dec. 31, 2015
Jun. 30, 2015
Income Taxes [Abstract]    
Excess of Tax over book depreciation Fixed assets $ 8,589 $ 10,240
Excess of Tax over book depreciation Patents 3,569 5,560
Net Operating Loss Carry forward 2,412,820 2,535,177
Valuation Allowance $ (2,424,978) $ (2,550,977)
Total Deferred Tax Asset (Liabilities)
v3.3.1.900
Income Taxes (Details 1) - USD ($)
6 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Income Taxes [Abstract]    
Computed Tax at Expected Statutory Rate $ (386,272) $ (337,242)
Non-US Income Taxed at Different Rates 133,372 183,063
Non-Deductable expenses 2,460 8,390
Valuation allowance (113,576) 101,247
Income Tax Expense $ (364,016) $ (44,542)
v3.3.1.900
Income Taxes (Details 2) - USD ($)
6 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Current Tax Expense    
Danish Income Tax $ (364,016) $ (44,542)
Total Current Tax Expense (364,016) (44,542)
Deferred Income Tax Expense (Benefit)    
Excess of Tax over Book Depreciation Fixed Assets 6,369 19,259
Excess of Tax over Book Depreciation Patents 2,863 67,488
Net Operating Loss Carry forwards (104,344) (187,994)
Change in the Valuation allowance $ (113,576) $ 101,247
Total Deferred Tax Expense
v3.3.1.900
Income Taxes (Details Textual)
6 Months Ended
Dec. 31, 2015
USD ($)
Danish Tax [Member]  
Income Taxes (Textual)  
Net operating loss carry-forwards $ 9,717,603
Estimated effective tax rate, Danish tax purpose 22.00%
Estimated effective tax rate in amount $ 2,137,873
U.S. Federal Tax  
Income Taxes (Textual)  
Net operating loss carry-forwards $ 808,668
Estimated effective tax rate, Federal tax purpose 34.00%
Estimated effective tax rate in amount $ 274,947
Net operating loss carry-forwards expiration period Jun. 30, 2034
v3.3.1.900
Loss Per Share (Details) - USD ($)
3 Months Ended 6 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2015
Dec. 31, 2014
Loss Per Share        
Net Loss $ (421,776) $ (953,131) $ (772,078) $ (1,488,374)
Weighted average number of common shares used in basic earnings per share 9,533,290 8,925,309 9,533,290 8,503,147
Effect of dilutive securities, stock options and warrants
Weighted average number of common shares and potential dilutive common shares outstanding used in dilutive earnings per share 9,533,290 8,925,309 9,533,290 8,503,147
v3.3.1.900
Stockholders' Equity (Details) - USD ($)
1 Months Ended 3 Months Ended 12 Months Ended
Oct. 10, 2014
Aug. 12, 2014
Feb. 12, 2014
Oct. 23, 2014
Sep. 30, 2014
Dec. 31, 2014
Dec. 31, 2015
Jun. 30, 2015
Class of Stock [Line Items]                
Common stock, par value             $ 0.0001 $ 0.0001
Common stock, shares authorized             100,000,000 100,000,000
Common stock, shares issued             9,533,290 9,533,290
Common stock, shares outstanding             9,533,290 9,533,290
Offering of common stock, shares 300,200     589,490 145,100      
Proceeds from stock offering, net $ 1,501,000     $ 2,947,450 $ 725,500      
Common stock reserved for issuance             185,053  
Initial public offering [Member]                
Class of Stock [Line Items]                
Offering of common stock, value   $ 156,360       $ 12,000,000    
Offering of common stock, shares           2,400,000    
Offering of common stock price per share           $ 5.00    
Sale of stock common shares   1,093,290            
Proceeds from stock offering, net   $ 5,466,450            
Private offering [Member]                
Class of Stock [Line Items]                
Offering of common stock, shares           400,000    
Offering of common stock price per share           $ 5.00    
Gross proceeds from share issuance           $ 2,000,000    
Common Stock [Member]                
Class of Stock [Line Items]                
Common stock, par value     $ 0.0001          
Common stock reserved for issuance     185,053          
Share exchange agreement, acquisition percentage     100.00%          
Share exchange agreement number of share cancellation     4,400,000          
Exchanged shares of parent's common stock     1.498842          
Share exchange agreement, shares issued to parent company     6,000,000          
v3.3.1.900
Commitments and Contingencies (Details) - shares
Dec. 16, 2013
Dec. 31, 2015
Commitments and Contingencies (Textual)    
Common stock reserved for issuance   185,053
Termination of agreement 180 days  
Payments for royalties period 20 years  
v3.3.1.900
Related Party Transactions (Details)
1 Months Ended 3 Months Ended 6 Months Ended
Jul. 31, 2015
USD ($)
Jul. 31, 2015
DKK
Jul. 10, 2015
USD ($)
Jul. 10, 2015
USD ($)
Mar. 27, 2014
Dec. 31, 2015
USD ($)
Dec. 31, 2014
USD ($)
Dec. 31, 2015
USD ($)
Dec. 31, 2014
USD ($)
Jun. 30, 2015
USD ($)
Related Party Transactions (Textual)                    
Proceeds from related party           $ 0 $ 8,808 $ 0 $ 17,746  
Medical consultancy expense           22,020 27,613 53,080 44,365  
Legal expense           8,193 $ 4,096 29,765 $ 62,935  
Accounts payable - Related party           $ 96,897   $ 96,897   $ 366,035
Capital increase commitment received expiration date     Jul. 10, 2016              
Stockholders [Member]                    
Related Party Transactions (Textual)                    
Capital increase commitment received     $ 1,000,000 $ 1,000,000            
Capital increase commitment received expiration date       Jul. 10, 2016 May 31, 2015          
Paseco Aps [Member]                    
Related Party Transactions (Textual)                    
Medical consultancy expense $ 7,448 DKK 50.000