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GTHR > SEC Filings for GTHR > Form 10-Q on 16-Dec-2013All Recent SEC Filings

Show all filings for GENETHERA INC

Form 10-Q for GENETHERA INC


16-Dec-2013

Quarterly Report


Item 2. Management's Discussion and Analysis and Results of Operation

The following discussion and analysis should be read in conjunction with the financial statements and notes thereto that appear elsewhere herein.

FORWARD-LOOKING AND CAUTIONARY STATEMENTS

Sections of this Form 10-Q, including the Management's Discussion and Analysis or Plan of Operation, contain "forward-looking statements". These forward-looking statements are subject to risks and uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from the results, performance or achievements expressed or implied by the forward-looking statements. You should not unduly rely on these statements. Forward-looking statements involve assumptions and describe our plans, strategies, and expectations. You can generally identify a forward-looking statement by words such as may, will, should, would, could, plan, goal, potential, expect, anticipate, estimate, believe, intend, project, and similar words and variations thereof. This report contains forward-looking statements that address, among other things,

* Our financing plans,

* Regulatory environments in which we operate or plan to operate, and

* Trends affecting our financial condition or results of operations, the impact of competition, the start-up of certain operations and acquisition opportunities.

Factors, risks, and uncertainties that could cause actual results to differ materially from those in the forward-looking statements ("Cautionary Statements") include, among others,

* Our ability to raise capital,

* Our ability to execute our business strategy in a very competitive environment,

* Our degree of financial leverage, risks associated with our acquiring and integrating companies into our own,

* Risks relating to rapidly developing technology, and regulatory considerations;

* Risks related to international economies,

* Risks related to market acceptance and demand for our products and services,

* The impact of competitive services and pricing, and

* Other risks referenced from time to time in our SEC filings.

All subsequent written and oral forward-looking statements attributable to us, or anyone acting on our behalf, are expressly qualified in their entirety by the cautionary statements. We do not undertake any obligations to publicly release any revisions to any forward-looking statements to reflect events or circumstances after the date of this report or to reflect unanticipated events that may occur.

RESULTS OF OPERATIONS

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2013, COMPARED TO THE THREE MONTHS ENDED SEPTEMBER 30, 2012

We did not generate any revenue for the three months ended September 30, 2013 and 2012.

We had total operating expenses of $354,075 for the three months ended September 30, 2013, compared to total operating expenses of $240,917 for the three months ended September 30, 2012, an increase of $113,158 from the prior period. The increase in expenses was largely due to a increase in general and administrative to $254,661 for the three months ended September 30, 2013, compared to $97,711 for the three months ended September 30, 2012, an increase of $162,950 from the prior period, and a decrease in laboratory expenses to $0 for the three months ended September 30, 2013, compared to $43,248 for the three months ended September 30, 2012, an decrease of $43,248 from the prior period.

We had a net loss of $354,075 for the three months ended September 30, 2013, compared to a net loss of $240,927 for the three months ended September 30, 2012, an increase of $113,148 from the prior period.

LIQUIDITY AND CAPITAL RESOURCES

We had total assets as of September 30, 2013 of $44,217, which included cash of $943, accounts receivable related party of $0, net property and equipment of $36,274, and total other assets of $7,000.

We had total liabilities of $5,198,283 as of September 30, 2013, which included $1,210,857 of accounts payable, $2,165,572 of accrued expenses, $10,800 of notes payable, $880,162 of convertible notes payable, $645,471 of loan from shareholder and $285,621 to related party.

We had negative working capital of $5,197,340 and a deficit accumulated during the development stage of $23,266,295.

We had negative net cash used in operating activities of $110,770 for the nine months ended September

30, 2013, which mainly included $922,864 of net loss that was largely offset by an increase of $463,446 in accounts payable and accrued liabilities.

It is estimated that we will require outside capital for the remainder of 2013 for the commercialization of GeneThera molecular assays as well as the development of our therapeutic vaccines. The Company intends to raise these funds by means of one or more private offerings of debt or equity securities or both and also generating revenue from Mexico. Currently the Company is in discussions with one group to obtain financing through either debt and/or equity. No definitive agreements have been signed. There are no guarantees whether the Company will be able to secure such a financing, and if the financing is secured, there are no guarantees whether the Company can achieve the goals laid out in its business plan fully. We will require significant additional funding in order to achieve our business plan.

Our longer-term working capital and capital requirements will depend upon numerous factors, including revenue and profit generation, pre-clinical studies and clinical trials, the timing and cost of obtaining regulatory approvals, the cost of filing, prosecuting, defending, and enforcing patent claims and other intellectual property rights, competing technological and market developments, and collaborative arrangements. Additional capital will be required in order to attain such goals. Such additional funds may not become available on acceptable terms and we cannot give any assurance that any additional funding that we do obtain will be sufficient to meet our needs in the long term.

In the future, we may be required to seek additional capital by selling debt or equity securities, selling assets, or otherwise be required to bring cash flows in balance when we approach a condition of cash insufficiency. The sale of additional equity or debt securities, if accomplished, may result in dilution to our then shareholders.

Applied Genetics marketing agreement with Nutrición Avanzada

On February 1, 2012, Applied Genetics, a 90% owned subsidiary of GeneThera, Inc., entered into a sales and marketing agreement with Nutrición Avanzada. According to the terms of the agreement, GeneThera, Inc., through its subsidiary Applied Genetics, granted Nutrición Avanzada the exclusive right to purchase, market, and distribute the GeneThera Field Collection System product in Mexico. Applied Genetics will pay Nutrición Avanzada a 30% commission of the total price of each product. The initial term of the agreement is for a period of one year. After a year, the agreement will not be renewed.

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