v3.3.0.814
Document and Entity Information - shares
9 Months Ended
Mar. 31, 2017
May. 15, 2017
Document and Entity Information [Abstract]    
Entity Registrant Name DanDrit Biotech USA, Inc.  
Entity Central Index Key 0001527728  
Trading Symbol DDRT  
Amendment Flag false  
Current Fiscal Year End Date --06-30  
Document Type 10-Q  
Document Period End Date Mar. 31, 2017  
Document Fiscal Year Focus 2017  
Document Fiscal Period Focus Q3  
Entity Filer Category Smaller Reporting Company  
Entity Common Stock Shares Outstanding   12,433,290

v3.3.0.814
Consolidated Balance Sheets - USD ($)
Mar. 31, 2017
Jun. 30, 2016
CURRENT ASSETS:    
Cash $ 33,699 $ 23,368
Other Receivables 194,309 695,418
Prepaid Expenses 6,666 13,693
Total Current Assets $ 234,674 $ 732,479
PROPERTY AND EQUIPMENT, Net accumulated Depreciation
OTHER ASSETS    
Definite Life Intangible Assets $ 120,046 $ 135,743
Deferred stock offering costs 25,000
Deposits 2,565 $ 2,609
Total Other Assets 147,611 138,352
TOTAL ASSETS 382,285 870,831
CURRENT LIABILITIES:    
Notes Payable - Related Party 104,003 $ 102,882
Convertible Notes Payable, Current Portion (Net of discounts of $35,072 and $0, respectively) 258,298
Convertible Notes Payable - Related Party, (Net of discounts of $42,550 and $0, respectively) 77,750
Accounts Payable 844,894 $ 1,087,758
Accounts Payable - Related Party 383,372 97,357
Accrued Expenses 320,064 220,232
Total Current Liabilities 1,988,381 1,508,229
Total Liabilities $ 1,988,381 $ 1,508,229
STOCKHOLDER'S EQUITY(Deficit):    
Preferred stock, $0.0001 par value; 10,000,000 shares authorized; no shares 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 March 31, 2017 and June 30, 2016, respectively $ 953 $ 953
Additional paid-in capital 25,816,325 25,098,050
Accumulated Deficit (28,258,650) (26,300,694)
Other comprehensive income, net 835,276 564,293
Total Stockholder's Equity (Deficit) (1,606,096) (637,398)
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 382,285 $ 870,831

v3.3.0.814
Consolidated Balance Sheets (Parenthetical) - USD ($)
Mar. 31, 2017
Jun. 30, 2016
Balance Sheets [Abstract]    
Convertible Notes Payable, Current Portion, Net of discounts $ 35,072 $ 0
Convertible Notes Payable - Related Party, Net of discounts $ 42,550 $ 0
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

v3.3.0.814
Consolidated Statement of Operations - USD ($)
3 Months Ended 9 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Mar. 31, 2017
Mar. 31, 2016
Statement of Operations [Abstract]        
Revenues $ 42,525
Cost of Goods Sold 5,244
Gross profit (Loss) 37,281
Operating Expenses        
General and Administrative Expenses $ 168,503 $ 257,461 $ 722,051 $ 783,941
Non-cash compensation expenses 626,487
Research and Development Expenses $ 16,290 $ 235,927 47,181 $ 615,334
Depreciation and Amortization 3,498 3,642 10,869 23,571
Consulting Expenses 162,739 16,574 345,518 64,374
Total Operating Expense 351,030 513,604 1,752,106 1,487,220
(LOSS) FROM OPERATIONS (351,030) $ (513,604) (1,752,106) $ (1,449,939)
Other Income (Expense)        
Interest (expense) (2,217) (5,430)
Interest (expense) - Related Party (3,818) $ (585) (11,019) $ (1,769)
(Loss) on Currency Transactions $ 96,816 $ 272,818 $ (256,801) 74,242
Interest and Other Income 1
Total Other Income (Expense) $ 90,781 $ 272,233 $ (273,250) 72,474
(Loss) Before Income Taxes (260,249) (241,371) (2,025,356) (1,377,465)
Income Tax Expense (Benefit) (14,078) (33,808) (67,400) (397,824)
NET (LOSS) $ (246,171) $ (207,563) $ (1,957,956) $ (979,641)
BASIC AND DILUTED LOSS PER SHARE $ (0.03) $ (0.02) $ (0.21) $ (0.1)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND DILUTED 9,533,290 9,533,290 9,533,290 9,533,290

v3.3.0.814
Statements of Other Comprehensive Loss (Unaudited) - USD ($)
3 Months Ended 9 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Mar. 31, 2017
Mar. 31, 2016
Statements of Other Comprehensive Loss [Abstract]        
Net Loss $ (246,171) $ (207,563) $ (1,957,956) $ (979,641)
Currency Translation, Net of Taxes (107,576) (297,600) 270,983 (160,890)
Other Comprehensive Loss $ (353,747) $ (505,163) $ (1,686,973) $ (1,140,531)

v3.3.0.814
Consolidated Statement of Cash Flows (Unaudited) - USD ($)
9 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Statement of Cash Flows [Abstract]    
NET (LOSS) $ (1,957,956) $ (979,641)
ADJUSTMENT TO RECONCILE NET LOSS TO NET CASH USED IN OPERATING ACTIVITIES:    
Depreciation and Amortization 10,869 $ 21,289
Non-cash compensation 626,487
Accrued Interest on Notes Payable - Related Party 1,763 $ 2,098
Accretion of discount on notes payable 14,166
CHANGES IN ASSETS AND LIABILITIES:    
(Increase) Decrease in Other Receivables 501,109 $ (211,822)
(Increase) Decrease in Prepaid Expenses/Deposits 7,071 (40,017)
Increase (Decrease) in Accounts Payable (267,864) 250,977
Increase (Decrease) in Accounts Payable - Related Party 286,015 (335,112)
Increase (Decrease) in Accrued Expenses 99,832 130,206
Total Adjustments 1,279,448 (182,381)
NET CASH USED IN OPERATING ACTIVITIES $ (678,508) (1,162,022)
CASH FLOWS FROM INVESTING ACTIVITIES:    
Net (Increase) Decrease in Cash Held in Escrow 1,052,989
NET CASH USED BY INVESTING ACTIVITIES $ 1,052,989
CASH FLOWS FROM FINANCING ACTIVITIES:    
Proceeds from Notes Payable - Related Party $ 120,300
Proceeds from Notes Payables 293,370
NET CASH PROVIDED BY (USED BY) FINANCING ACTIVITIES 413,670
Gain (Loss) on Currency Translation 275,169 $ (160,890)
NET INCREASE (DECREASE) IN CASH 10,331 (269,923)
CASH, BEGINNING OF PERIOD 23,368 421,145
CASH, END OF PERIOD $ 33,699 $ 151,222
Cash paid during the periods for:    
Interest
Income Taxes
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES    
Discount for imputed interest on non-interest bearing Convertible Notes Payable $ 14,888
Discount for beneficial conversion feature of Convertible Notes Payable 17,294
Amortization of discount on convertible notes payable 14,166
Compensation for the issuance of stock options to the Board $ 626,487

v3.3.0.814
Summary of Significant Accounting Policies
9 Months Ended
Mar. 31, 2017
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 March 31, 2017 and 2016 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, 2016 audited financial statements. The results of operations for the periods ended March 31, 2017 and 2016 are not necessarily indicative of the operating results for the full year.

 

Business and Basis of Presentation — DanDrit Biotech USA, Inc. (“DanDrit USA” or the “Parent”, “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 Parent (together with Parent, the “Company”). On February 12, 2014, pursuant to the terms and conditions of a Share Exchange Agreement (the "Share Exchange Agreement"), Parent 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 of 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, DanDrit USA completed the acquisition of 100% of the issued and outstanding capital stock of DanDrit Denmark and as a result became DanDrit Denmark’s parent company. Prior to such Share Exchange there were 5,000,000 shares of Common Stock outstanding. Parent and an existing shareholder agreed to cancel 4,400,000 shares of its common stock and issued 1,440,000 shares of its 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 Nine Months Ended March 31, 2017 and 2016, 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 March 31, 2017 and 2016. 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. At March 31, 2017 and 2016 the Company had balances held in financial institutions in Denmark of $33,699 and $23,368, respectively.

 

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 nine 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 MelCancerVac® (“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 Expenses — 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 nine months ended March 31, 2017, totaled $16,290 and $47,181, and for the three and nine months ended December 2016 $235,927 and $615,334, 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 shares of common stock 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 shares of common stock 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 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; accordingly, 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 financial statements.


In 2015, the FASB issued an amended standard requiring that we classify all deferred tax assets and liabilities as non-current on the balance sheet instead of separating deferred taxes into current and non-current. The amended standard was adopted effective January 1, 2017 by the Company on a prospective basis and prior periods were not retrospectively adjusted. Adoption of the standard had no effect on the accompanying financial statements. 

 

In February 2016, the FASB issued changes to the accounting for leases that primarily affect presentation and disclosure requirements. The new standard will require the recognition of a right to use asset and underlying lease liability for operating leases with an initial life in excess of one year. This standard is effective for us beginning in the first quarter of 2019. We have not yet determined the impact of the new standard on our consolidated 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 statement for the periods ended December 31, 2016 and June 30, 2016 have been reclassified to conform to the headings and classifications used in the March 31, 2017 financial statements.


v3.3.0.814
Going Concern
9 Months Ended
Mar. 31, 2017
Going Concern [Abstract]  
GOING CONCERN

NOTE 2 — GOING CONCERN

 

The accompanying unaudited consolidated financial statements have been prepared in conformity with generally accepted accounting principles of the United States of America, which contemplate continuation of the Company as a going concern. However, the Company has incurred significant losses, has not yet been successful in establishing profitable operations and has short-term obligations in excess of anticipated cash. These factors raise substantial doubt 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. The Company is attempting to raise capital through a private placement offering, and as of May 15, 2017 has raised $3,510,000 from the sale of 2,700,000 shares of common stock at $1.30 per share together with warrants to purchase 5,400,000 shares of common stock having a strike price of $1.30 per share. There is no assurance that the Company will be successful in raising funds through the debt or equity or achieving profitable operations. The consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.


v3.3.0.814
Property and Equipment
9 Months Ended
Mar. 31, 2017
Property and Equipment [Abstract]  
PROPERTY AND EQUIPMENT

NOTE 3 — PROPERTY AND EQUIPMENT

 

Property and equipment consisted of the following at March 31, 2017 and June 30, 2016:

 

  Useful 
Life
 March 31, 
2017
  June 30, 
2016
 
Lab equipment and instruments 4-6 $157,919  $163,959 
Computer equipment 4-6  54,086   56,155 
     212,005   220,114 
Less Accumulated Depreciation    (212,005)  (220,114)
Net Property and Equipment   $-  $- 

 

Depreciation expense amounted to $0 and $0 for the three and nine month periods ended March 31, 2017 and $0 and $0 for the three and nine month periods ended March 31, 2016, respectively.


v3.3.0.814
Definite-Life Intangible Assets
9 Months Ended
Mar. 31, 2017
Definite-Life Intangible Assets [Abstract]  
DEFINITE-LIFE INTANGIBLE ASSETS

NOTE 4 — DEFINITE-LIFE INTANGIBLE ASSETS

 

At March 31, 2017 and June 30, 2016, definite-life intangible assets, net of accumulated amortization, consist of patents on the Company’s products and processes of $120,046 and $135,743, respectively. The patents are recorded at cost and amortized over twenty years from the date of application. Amortization expense for the three and nine months ended March 31, 2017 amounted to $3,498 and $10,869, respectively. For the three and nine months ended March, 2016 amortization expense amounted to $3,642 and $23,571, respectively, including $12,048 in losses on abandoned assets. Expected future amortization expense for the years ended are as follows:

 

Year ending June 30,   
2017 $3,553 
2018  14,249 
2019  14,249 
2020  14,289 
2021  14,249 
Thereafter  59,457 
  $120,046 

v3.3.0.814
Notes Payable - Related Party
9 Months Ended
Mar. 31, 2017
Notes Payable - Related Party [Abstract]  
NOTES PAYABLE - RELATED PARTY

NOTE 5 — NOTES PAYABLE – RELATED PARTY

 

Notes payable to related parties consists of the following as of March 31, 2017 and June 30, 2016:

 

  December 31,
2016
  June 30,
2016
 
Non-Interest Bearing Loan Payable Sunrise Financial Group Inc. $38,235  $38,235 
Note Payable ML Group  16,772   17,414 
6% Promissory Note payable to NLBDIT 2010 Enterprises, LLC  48,996   47,233 
Total Notes Payable – Related Party  104,003   102,882 
Less Current Maturities  (104,003)  (102,882)
Note Payables – Related Party Long Term $-  $- 

 

The following represents the future maturities of short-term debt as of March 31, 2017:

 

Year ending June 30,   
2017  104,003 
2018  - 
2019  - 
2020  - 
2021  - 
Thereafter  - 
   104,003 

 

As of March 31, 2017, 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 March 31, 2017, the outstanding balance on the Note, including accrued interest, was $48,996. During the three and nine months ended March 31, 2017, the Company recorded related party interest on the Note of $579, and $1,763, respectively and during the three and nine months ended March 31, 2016, $585, and $1,769, respectively.


v3.3.0.814
Convertible Notes Payable - Related Party
9 Months Ended
Mar. 31, 2017
Convertible Notes Payable - Related Party [Abstract]  
CONVERTIBLE NOTES PAYABLE - RELATED PARTY

NOTE 6 — CONVERTIBLE NOTES PAYABLE – RELATED PARTY

 

Convertible Notes payable to related parties consist of the following as of March 31, 2017 and June 30, 2016: 

  

  March 31,
2017
  June 30,
2016
 
Non-Interest Bearing Notes Payable Paseco ApS $120,300  $- 
Less Discount  (42,550)  - 
Total Convertible Notes Payable – Related Party  77,750  $- 
Less Current Maturities  (77,750)  - 
Net Convertible Note Payables – Related Party Long Term $-   - 

 

The following represents the future maturities of short-term debt as of March 31, 2017: 

 

Year ending June 30,   
2017  - 
2018  120,300 
2019  - 
2020  - 
2021  - 
Thereafter  - 
   120,300 

 

On July 1, 2016, the Company entered into a non-interest bearing convertible note for $60,150, with a shareholder of the Company. The note matures December 31, 2017. The note is convertible into shares of common stock at $2.00 per share. As the Company’s common stock was trading at $2.05 on August 24, 2016, the Company bifurcated the intrinsic value of the beneficial conversion feature and recorded a discount of $15,038. As the note is non-interest bearing the Company imputed the interest at 3% and further recorded a discount of $2,639. The interest is being amortized to expense using the effective interest method through the December 31, 2017 maturity. For the three and nine months ended March 31, 2017, interest expense of $2,807 and $8,040, respectively, was recorded for the amortization of the discount. 

 

On July 19, 2016, the Company entered into a non-interest bearing convertible note for $60,150, with a shareholder of the Company. The note matures December 31, 2017. The note is convertible into shares of common stock at $2.00 per share. As the note is non-interest bearing the Company imputed the interest at 3% and further recorded a discount of $2,555. The interest will be amortized to expense using the effective interest method through the December 31, 2017 maturity. For the three and nine months ended March 31, 2017, interest expense of $432 and $1,216, respectively, was recorded for the amortization of the discount.


v3.3.0.814
Convertible Notes Payable
9 Months Ended
Mar. 31, 2017
Notes Payable - Related Party [Abstract]  
CONVERTIBLE NOTES PAYABLE

NOTE 7 — CONVERTIBLE NOTES PAYABLE

 

Convertible Notes payable consist of the following as of March 31, 2017 and June 30, 2016: 

  

  March 31,
2017
  June 30,
2016
 
Non-Interest Bearing Notes Payable Equine Invest Aps $240,600  $- 
Non-Interest Bearing Notes Payable TBC A/S  52,770     
Less Discounts  (35,072)  - 
Total Convertible Notes Payable  258,298     
Less Current Maturities  (258,298)  - 
Net Convertible Note Payables – Long Term $-  $- 

 

The following represents the future maturities of short-term debt as of March 31, 2017:

 

Year ending June 30,   
2017  52,770 
2018  240,600 
2019  - 
2020  - 
2021  - 
Thereafter  - 
   293,370 

 

On August 24, 2016, the Company entered into a non-interest bearing convertible note for $90,225. The note matures December 31, 2017. The note is convertible into shares of common stock at $2.00 per share. As the Company’s common stock was trading at $2.05 on August 24, 2016 the Company bifurcated the intrinsic value of the beneficial conversion feature and recorded a discount of $2,256. As the note is non-interest bearing the Company imputed the interest at 3% and further recorded a discount of $3,577. The interest will be amortized to expense using the effective interest method through the December 31, 2017 maturity. For the three and nine months ended March 31, 2017, interest expense of $1,052 and $2,539, respectively, was recorded for the amortization of the discount. 

 

On September 21, 2016 the Company entered into a non-interest bearing convertible note for $150,375. The note matures December 31, 2017. The note is convertible into shares of common stock at $2.00 per share. As the note is non-interest bearing the Company imputed the interest at 3% and further recorded a discount of $5,630. The interest will be amortized to expense using the effective interest method through the December 31, 2017 maturity. For the three and nine months ended March 31, 2017, interest expense of $1,080 and $2,282, respectively, was recorded for the amortization of the discount.

 

On March 9, 2017 the Company entered into a non-interest bearing convertible note for $52,770. The note matures June 30, 2017. The note is convertible into shares of common stock at $2.00 per share. As the note is non-interest bearing the Company imputed the interest at 3% and further recorded a discount of $486. The interest will be amortized to expense using the effective interest method through the June 30, 2017 maturity. For the three and nine months ended March 31, 2017, interest expense of $90 and 90, respectively, was recorded for the amortization of the discount.


v3.3.0.814
Leases
9 Months Ended
Mar. 31, 2017
Leases [Abstract]  
LEASES

NOTE 8 — 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 6,575 (approximately $960 at March 31, 2017).

 

 On March 25, 2015, the Company entered into an agreement for use of virtual office space at a rate of $425/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 $4,451 and $12,027 for the three and nine months ended March 31, 2017, respectively and $3,916 and $11,756 for the three and nine months ended December 31, 2015, respectively.


v3.3.0.814
Income Taxes
9 Months Ended
Mar. 31, 2017
Income Taxes [Abstract]  
INCOME TAXES

NOTE 9 — 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 March 31, 2017, the Company had net operating loss carry-forwards of approximately $10,786,786 at an estimated effective tax rate of 22% or approximately $2,373,093 for Danish tax purposes which do not expire and net operating loss carry-forwards of approximately $1,220,612 at an estimated effective tax rate of 34% or approximately $463,231 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 2012 and 2008, respectively.

 

The temporary differences, tax credits and carry forwards gave rise to the following deferred tax asset (liabilities) at March 31, 2017 and June 30, 2016:

  

  March 31,
2017
  June 30,
2016
 
Excess of Tax over book depreciation Fixed assets $6,238  $7,660 
Excess of Tax over book depreciation Patents  (1,786)  870 
Net Operating Loss Carry forward  2,836,324   2,558,080 
Valuation Allowance  (2,840,776)  (2,566,610)
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 March 31, 2017 and 2016: 

 

  March 31,
2017
  March 31,
2016
 
Computed Tax at Expected Statutory Rate $(688,621) $(468,338)
Non-US Income Taxed at Different Rates  119,117   148,517 
Non-Deductible expenses  215,966   - 
Differences in tax rates      (64,647)
Valuation allowance  286,138   (13,356)
Income Tax Expense $(67,400) $(397,824)

  

The components of income tax expense (benefit) from continuing operations for the nine months ended March 31, 2017 and 2016 consisted of the following: 

 

  2017  2016 
Current Tax Expense      
Danish Income Tax $(67,400) $(397,824)
Total Current Tax Expense  (67,400)  (397,824)
Deferred Income Tax Expense (Benefit)        
Excess of Tax over Book Depreciation Fixed Assets  1,422   1,837 
Excess of Tax over Book Depreciation Patents  2,656   3,253 
Net Operating Loss Carry forwards  (278,243)  8,266 
Change in the Valuation allowance  274,165   (13,356)
Total Deferred Tax Expense $-  $- 

 

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


v3.3.0.814
Loss Per Share
9 Months Ended
Mar. 31, 2017
Loss Per Share [Abstract]  
LOSS PER SHARE

NOTE 10 — 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 nine month periods ended March 31, 2017, and 2016:

 

    For the 3 Months Ended     For the 9 Months Ended  
    March 31,     March 31,  
    2017     2016     2017     2016  
Net (Loss)   $ (246,171 )   $ (207,563 )   $ (1,957,956 )   $ (979,641 )
Weighted average number of common shares used in basic earnings per share     9,533,290       9,533,290       9,533,290       9,533,290  
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       9,533,290       9,533,290       9,533,290  

 

The Company subsequently issued 2,700,000 common shares and warrants to purchase 5,400,000 common shares at $1.30 pursuant to a private placement offering. 

 

At March 31, 2017, the Company had convertible notes payable totaling $413,670 convertible into 206,835 shares of common stock and 900,000 options to purchase common stock at $2.00 per share that were not included in the calculation of weighted average shares of common stock and potential dilutive common shares as their effect is anti-dilutive.

 

At March 31, 2016, the Company had no common stock equivalents.


v3.3.0.814
Stockholders' Equity
9 Months Ended
Mar. 31, 2017
Stockholders' Equity [Abstract]  
STOCKHOLDERS' EQUITY

NOTE 11 — STOCKHOLDERS’ EQUITY

 

Common Stock — Parent has 100,000,000 authorized shares of common stock, par value $0.0001 per share. As of March 31, 2017 and June 30, 2016 there were 9,533,290 shares issued and outstanding.

 

Common Stock Offering — On September 15, 2016, Parent filed a Form D disclosing that the Company is seeking to raise up to $16,500,000 additional equity capital though a private placement offering exempt under Rule 506(b).

 

Share Exchange Agreement/ — Reverse Acquisition On February 12, 2014, in accordance with the terms and conditions of a Share Exchange Agreement, we completed the acquisition of approximately 100% of the issued and outstanding capital stock of DanDrit Denmark and as a result became DanDrit Denmark’s parent company. In connection with such Share Exchange, each outstanding share of common stock of DanDrit Denmark was exchanged for 1.498842 shares of its common stock for an aggregate of 6,000,000 shares, including 185,053 shares of its 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.

 

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.

 

Stock Options  On September 15, 2016, Parent’s Board of Directors approved the grant of stock options to employees, officers, and directors of the Company. The Board granted 300,000 options at a strike price of $2.00 per share to each of Eric Leire, APE Invest A/S for Aldo Petersen and N.E. Nielson, in consideration of their service to the Company, for an aggregate of 900,000 options. The options were granted pursuant to written agreements with each optionee. The options vested upon grant, contain certain anti-dilution provisions and expire December 31, 2019.


The Company recognizes compensation costs for stock option awards to employees based on their grant-date fair value. The value of each stock option is estimated on the date of grant using the Black-Scholes option-pricing model. The weighted-average assumptions used to estimate the fair values of the stock options granted using the Black-Scholes option-pricing model are as follows:

 

  DanDrit Biotech USA, Inc. 
Expected term (in years)  3.29 
Volatility  189.65%
Risk free interest rate  0.87%
Dividend yield  0%

 

The Company recognized stock based compensation expense related to the options of $0 and $626,487 for the three and nine months ended March 31, 2017, respectively, and $0 and $0 for the three and nine months ended March 31, 2016, respectively. At March 31, 2017 the Company had approximately $0 of unrecognized compensation cost related to non-vested options.

 

A summary of the status of the options outstanding at March 31, 2017 is presented below: 

 

     Options Outstanding  Options Exercisable
  Exercise Prices  Number Outstanding  Weighted Average Remaining Contractual Life (years)  Weighted Average Exercise  Price  Number Exercisable 

Weighted

Average Exercise Price

  $2.00   900,000   2.75  $2.00   900,000 $2.00
Total      900,000   2.75  $2.00   900,000 $2.00

 

A summary of the status of the options for the nine months ended March 31, 2017, and changes during the period are presented below:

 

  March 31, 2017 
  Shares  

Weighted

Average

Exercise

Price

  

Average

Remaining

Life

  

Weighted

Average

Intrinsic

Value

 
             
Outstanding at beginning of period  0  $-   -  $        - 
Granted  900,000   2.00   2.75   - 
Exercised  -   -   -   - 
Forfeited  -   -   -   - 
Expired  -   -   -   - 
Outstanding at end of period  900,000  $2.00   2.75  $- 
Vested and expected to vest  900,000  $2.00   2.75  $- 
Exercisable end of period  900,000  $2.00   2.75  $- 

 

At March 31, 2017, all options issued are exercisable. The total intrinsic value of options at March 31, 2017 was $0. Intrinsic value is measured using the fair market value at the date of exercise (for shares exercised) or at March 31, 2017 (for outstanding options), less the applicable exercise price.


v3.3.0.814
Commitments and Contingencies
9 Months Ended
Mar. 31, 2017
Commitments and Contingencies [Abstract]  
COMMITMENTS AND CONTINGENCIES

NOTE 12 — 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 — DanDrit Denmark 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 pharmacovigilance. 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. The agreement has expired as of the filing date.

 

On August 8, 2014, the Company entered into an agreement with Cellin Technologies for the manufacture of the Melanoma Cell Lysate. The agreement has expired as of the filing date.

 

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 — Parent and its subsidiary have an employment agreement with officers of the Company. 

 

On March 30, 2017, the Board of Directors of the Company terminated Eric J. Leire as Chief Executive Officer and Chief Financial Officer of the Company, effective immediately, and Mr. Leire resigned, effective immediately, as a director of the Company. The Board appointed Mr. Aldo Petersen, a Director of the Company, to serve as Chief Executive Officer and for Soren Degn to serve as Chief Financial Officer of the Company, effective immediately.

 

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.


v3.3.0.814
Related Party Transactions
9 Months Ended
Mar. 31, 2017
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS

NOTE 13 — RELATED PARTY TRANSACTIONS

 

At March 31, 2017 and 2016, the Company had various notes payable with shareholders of the Company (See Note 5 and 6).

 

During the three and nine months ended March 31, 2017 the Company paid $0 and $0 respectively, for medical consultancy services to JARO Holding ApS and in the same periods in 2016, $0 and $44,365, respectively. JARO Holding ApS is an entity owned by a director of the Company.

 

During the three and nine months ended March 31, 2017, a law firm partially owned by the Company’s Chairman of the Board of Directors provided legal services of $7,156 and $44,032, respectively, to the Company and in the same periods in 2016, $0 and $29,765, respectively. At March 31, 2017 the Company had a payable to the firm in the amount of $148,372.

 

On July 1, 2016, the Board of DanDrit Denmark entered into a financial services agreement on behalf of the Company, with APE Invest AS (an entity owned by a director of the Company) for consulting services related to the Company raising additional equity financing in the US and Danish Capital Markets. The agreement calls for monthly payment of $20,000 with a $100,000 retainer payment which was due on November 1, 2016. At March 31, 2017 the Company had a payable to the firm in the amount of $235,000.

 

On July 1, 2016, the Company entered into a non-interest bearing convertible note for $60,150, with a shareholder of the Company. The note matures December 31, 2017. The note is convertible into shares of common stock at $2.00 per share. As the Company’s stock was trading at $2.05 on August 24, 2016, the Company bifurcated the intrinsic value of the beneficial conversion feature and recorded a discount of $15,038. As the note is non-interest bearing the Company imputed the interest at 3% and further recorded a discount of $2,639. The interest is being amortized to expense using the effective interest method through the December 31, 2017 maturity. For the three and nine months ended March 31, 2017, interest expense of $2,807 and $8,040, respectively, was recorded for the amortization of the discount. 

 

On July 19, 2016, the Company entered into a non-interest bearing convertible note for $60,150, with a shareholder of the Company. The note matures December 31, 2017. The note is convertible into shares of common stock at $2.00 per share. As the note is non-interest bearing the Company imputed the interest at 3% and further recorded a discount of $2,555. The interest will be amortized to expense using the effective interest method through the December 31, 2017 maturity. For the three and nine months ended March 31, 2017, interest expense of $432 and $1,216, respectively, was recorded for the amortization of the discount.

 

On September 15, 2016, the Company recorded $626,487 in non-cash compensation for the grant of 900,000 stock options to employees, officers, and directors of the Company, which shall be fully vested upon grant, to purchase shares of common stock of the Company at $2.00 per share, and expire December 31, 2019. The options contain certain anti-dilution provisions.


v3.3.0.814
Subsequent Events
9 Months Ended
Mar. 31, 2017
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

NOTE 14 — SUBSEQUENT EVENTS

 

The Company’s management reviewed material events through May 15, 2017.

 

On May 15, 2017 the Company completed a private placement offering of units, with each unit consisting of one share of the Company’s common stock and two warrants to purchase one share of common stock at a strike price of $1.30 per share (each, a “Unit”), for $1.30 per Unit. In total, the Company issued and sold 2,700,000 shares of common stock and warrants to acquire 5,400,000 shares of common stock for total proceeds to the Company of $3,510,000.

 

Immediately prior to the closing of the private placement, the Company had 9,733,290 shares of common stock issued and outstanding (including 185,053 shares of common stock reserved for issuance but deemed issued and outstanding for accounting purposes), and after the issuance of 2,700,000 shares of common stock in the private placement, or 27.74% of the total common stock issued and outstanding immediately prior to the closing of the private placement, the Company has 12,433,290 shares issued and outstanding as of the date of this Report. The private placement was completed pursuant to Rule 506 of Regulation D and/or Regulation S of the Securities Act.

 

In connection with the private placement, each investor executed a subscription agreement. Each subscription agreement contains customary representations and warranties of the Company and of each investor, including that all investors purchasing Units pursuant to Rule 506 of Regulation D are “accredited investors” as defined by Rule 501 of Regulation D and all investors purchasing Units pursuant to Regulation S are not “U.S. persons” as defined by Rule 902 of Regulation S. The Warrants are freely exercisable, in whole or in part at any time until the fifth anniversary of the date of issuance. The private placement was made directly by the Company and no underwriter or placement agent was engaged by the Company.


v3.3.0.814
Summary of Significant Accounting Policies (Policies)
9 Months Ended
Mar. 31, 2017
Summary of Significant Accounting Policies [Abstract]  
Business and Basis of Presentation

Business and Basis of Presentation — DanDrit Biotech USA, Inc. (“DanDrit USA” or the “Parent”, “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 Parent (together with Parent, the “Company”). On February 12, 2014, pursuant to the terms and conditions of a Share Exchange Agreement (the "Share Exchange Agreement"), Parent 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 of 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, DanDrit USA completed the acquisition of 100% of the issued and outstanding capital stock of DanDrit Denmark and as a result became DanDrit Denmark’s parent company. Prior to such Share Exchange there were 5,000,000 shares of Common Stock outstanding. Parent and an existing shareholder agreed to cancel 4,400,000 shares of its common stock and issued 1,440,000 shares of its 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 Nine Months Ended March 31, 2017 and 2016, 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 March 31, 2017 and 2016. 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. At March 31, 2017 and 2016 the Company had balances held in financial institutions in Denmark of $33,699 and $23,368, respectively.
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 nine 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 MelCancerVac® (“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 Expenses — 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 nine months ended March 31, 2017, totaled $16,290 and $47,181, and for the three and nine months ended December 2016 $235,927 and $615,334, 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 shares of common stock 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 shares of common stock 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 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; accordingly, 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 financial statements.

In 2015, the FASB issued an amended standard requiring that we classify all deferred tax assets and liabilities as non-current on the balance sheet instead of separating deferred taxes into current and non-current. The amended standard was adopted effective January 1, 2017 by the Company on a prospective basis and prior periods were not retrospectively adjusted. Adoption of the standard had no effect on the accompanying financial statements. 

 

In February 2016, the FASB issued changes to the accounting for leases that primarily affect presentation and disclosure requirements. The new standard will require the recognition of a right to use asset and underlying lease liability for operating leases with an initial life in excess of one year. This standard is effective for us beginning in the first quarter of 2019. We have not yet determined the impact of the new standard on our consolidated 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 statement for the periods ended December 31, 2016 and June 30, 2016 have been reclassified to conform to the headings and classifications used in the March 31, 2017 financial statements.


v3.3.0.814
Property and Equipment (Tables)
9 Months Ended
Mar. 31, 2017
Property and Equipment [Abstract]  
Summary of property and equipment
  Useful 
Life
 March 31, 
2017
  June 30, 
2016
 
Lab equipment and instruments 4-6 $157,919  $163,959 
Computer equipment 4-6  54,086   56,155 
     212,005   220,114 
Less Accumulated Depreciation    (212,005)  (220,114)
Net Property and Equipment   $-  $- 

v3.3.0.814
Definite-Life Intangible Assets (Tables)
9 Months Ended
Mar. 31, 2017
Definite-Life Intangible Assets [Abstract]  
Schedule of finite-lived intangible assets, future amortization expense
Year ending June 30,   
2017 $3,553 
2018  14,249 
2019  14,249 
2020  14,289 
2021  14,249 
Thereafter  59,457 
  $120,046 

v3.3.0.814
Notes Payable - Related Party (Tables)
9 Months Ended
Mar. 31, 2017
Notes Payable - Related Party [Abstract]  
Summary of notes payable to related parties
  December 31,
2016
  June 30,
2016
 
Non-Interest Bearing Loan Payable Sunrise Financial Group Inc. $38,235  $38,235 
Note Payable ML Group  16,772   17,414 
6% Promissory Note payable to NLBDIT 2010 Enterprises, LLC  48,996   47,233 
Total Notes Payable – Related Party  104,003   102,882 
Less Current Maturities  (104,003)  (102,882)
Note Payables – Related Party Long Term $-  $- 
Schedule of future maturities of long-term debt
Year ending June 30,   
2017  104,003 
2018  - 
2019  - 
2020  - 
2021  - 
Thereafter  - 
   104,003 

v3.3.0.814
Convertible Notes Payable - Related Party (Tables) - Convertible notes payable related parties [Member]
9 Months Ended
Mar. 31, 2017
Debt Instrument [Line Items]  
Schedule of convertible notes payable to related party

  March 31,
2017
  June 30,
2016
 
Non-Interest Bearing Notes Payable Paseco ApS $120,300  $- 
Less Discount  (42,550)  - 
Total Convertible Notes Payable – Related Party  77,750  $- 
Less Current Maturities  (77,750)  - 
Net Convertible Note Payables – Related Party Long Term $-   -
Schedule of future maturities of short-term debt
Year ending June 30,   
2017  - 
2018  120,300 
2019  - 
2020  - 
2021  - 
Thereafter  - 
   120,300 

v3.3.0.814
Convertible Notes Payable (Tables) - Convertible notes payable [Member]
9 Months Ended
Mar. 31, 2017
Short-term Debt [Line Items]  
Schedule of convertible notes payable
  March 31,
2017
  June 30,
2016
 
Non-Interest Bearing Notes Payable Equine Invest Aps $240,600  $- 
Non-Interest Bearing Notes Payable TBC A/S  52,770     
Less Discounts  (35,072)  - 
Total Convertible Notes Payable  258,298     
Less Current Maturities  (258,298)  - 
Net Convertible Note Payables – Long Term $-  $- 
Schedule of future maturities of short-term debt
Year ending June 30,   
2017  52,770 
2018  240,600 
2019  - 
2020  - 
2021  - 
Thereafter  - 
   293,370 

v3.3.0.814
Income Taxes (Tables)
9 Months Ended
Mar. 31, 2017
Income Taxes [Abstract]  
Summary of deferred tax asset (liabilities)
  March 31,
2017
  June 30,
2016
 
Excess of Tax over book depreciation Fixed assets $6,238  $7,660 
Excess of Tax over book depreciation Patents  (1,786)  870 
Net Operating Loss Carry forward  2,836,324   2,558,080 
Valuation Allowance  (2,840,776)  (2,566,610)
Total Deferred Tax Asset (Liabilities) $-  $-
Summary of reconciliation of income tax expense at federal statutory rate
  March 31,
2017
  March 31,
2016
 
Computed Tax at Expected Statutory Rate $(688,621) $(468,338)
Non-US Income Taxed at Different Rates  119,117   148,517 
Non-Deductible expenses  215,966   - 
Differences in tax rates      (64,647)
Valuation allowance  286,138   (13,356)
Income Tax Expense $(67,400) $(397,824)
Summary of components of income tax expense (benefit) from continuing operations
  2017  2016 
Current Tax Expense      
Danish Income Tax $(67,400) $(397,824)
Total Current Tax Expense  (67,400)  (397,824)
Deferred Income Tax Expense (Benefit)        
Excess of Tax over Book Depreciation Fixed Assets  1,422   1,837 
Excess of Tax over Book Depreciation Patents  2,656   3,253 
Net Operating Loss Carry forwards  (278,243)  8,266 
Change in the Valuation allowance  274,165   (13,356)
Total Deferred Tax Expense $-  $-

v3.3.0.814
Loss Per Share (Tables)
9 Months Ended
Mar. 31, 2017
Loss Per Share [Abstract]  
Schedule of weighted average number of shares of potential dilutive common stock
  For the 3 Months Ended  For the 9 Months Ended 
  March 31,  March 31, 
  2017  2016  2017  2016 
Net (Loss) $(246,171) $(207,563) $(1,957,956) $(979,641)
Weighted average number of common shares used in basic earnings per share  9,533,290   9,533,290   9,533,290   9,533,290 
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   9,533,290   9,533,290   9,533,290 

v3.3.0.814
Stockholders' Equity (Tables)
9 Months Ended
Mar. 31, 2017
Stockholders' Equity [Abstract]  
Summary of weighted-average assumptions used to estimate the fair values of the stock options granted
  DanDrit Biotech USA, Inc. 
Expected term (in years)  3.29 
Volatility  189.65%
Risk free interest rate  0.87%
Dividend yield  0%
Summary of stock options outstanding

     Options Outstanding  Options Exercisable
  Exercise Prices  Number Outstanding  Weighted Average Remaining Contractual Life (years)  Weighted Average Exercise  Price  Number Exercisable 

Weighted

Average Exercise Price

  $2.00   900,000   2.75  $2.00   900,000 $2.00
Total      900,000   2.75  $2.00   900,000 $2.00
Summary of stock option activity
  March 31, 2017 
  Shares  

Weighted

Average

Exercise

Price

  

Average

Remaining

Life

  

Weighted

Average

Intrinsic

Value

 
             
Outstanding at beginning of period  0  $-   -  $        - 
Granted  900,000   2.00   2.75   - 
Exercised  -   -   -   - 
Forfeited  -   -   -   - 
Expired  -   -   -   - 
Outstanding at end of period  900,000  $2.00   2.75  $- 
Vested and expected to vest  900,000  $2.00   2.75  $- 
Exercisable end of period  900,000  $2.00   2.75  $-

v3.3.0.814
Summary of Significant Accounting Policies (Details) - USD ($)
3 Months Ended 9 Months Ended
Feb. 12, 2014
Mar. 31, 2017
Mar. 31, 2016
Mar. 31, 2017
Mar. 31, 2016
Jun. 30, 2016
Summary of Significant Accounting Policies (Textual)            
Cash held in financial institutions   $ 33,699 $ 23,368 $ 33,699 $ 23,368  
Common stock, par value   $ 0.0001   $ 0.0001   $ 0.0001
Property, plant and equipment, depreciation methods       Straight line basis over the estimated useful life of twenty years.    
Property plant and equipment estimated useful lives       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 nine years    
Value added tax, percentage       25.00%    
Value added tax paid to Danish and EU vendors       25.00%    
Research and development expense   $ 16,290 $ 235,927 $ 47,181 $ 615,334  
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 cancelled 4,400,000          
Common shares issued for legal and consulting services 1,440,000          

v3.3.0.814
Going Concern (Details) - USD ($)
9 Months Ended
May. 15, 2017
Mar. 31, 2017
Going Concern (Textual)    
Sale of common stock   2,700,000
Common stock strike price   $ 1.30
Purchase of warrant and common stock   5,400,000
Subsequent Event [Member]