SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly Report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Quarterly Period Ended March 31, 2009
Commission File No. 000-27237
GENETHERA, INC.
(Exact name of small Business Issuer as specified in its Charter)
Nevada 65-0622463
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
5255 Marshall Street, CO 80033
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (303) 463-6371
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the issuer was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days [X] Yes [ ] No
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See definitions of large accelerated filer,
accelerated filer, and smaller reporting company in Rule 12b-2 of the
Exchange Act. (Check one):
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act):
Yes [ ] No [X]
State the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date: 3,511,022 Shares of
$.001 par value Common Stock outstanding as of March 31, 2009 and
Series A 4,600 Shares, and Series B 7,320,000 shares of $.001 par value
Preferred Stock outstanding as of March 31, 2009.
W. T. UNIACK & CO. CPAS, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
1003 Weatherstone Pkwy., Ste. 320 12600 Deerfield Pkwy., Ste 100
Woodstock, GA 30188 Alpharetta, GA 30004
Phone: 770-592-3233 Phone: 678-566-3774
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors
GeneThera, Inc.
White Ridge, CO
We have reviewed the accompanying balance sheet of GeneThera, Inc. as
of March 31, 2009, and the related statements of operations and cash
flows for the three month period ended March 31, 2009. These financial
statements are the responsibility of the Company?s management.
We conducted our review in accordance with the standards of the Public
Company Accounting Oversight Board (United States). A review of interim
financial information consists principally of applying analytical
procedures and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with standards of the Public Company Accounting
Oversight Board (United States), the objective of which is the
expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications
that should be made to the accompanying interim financial statements
referred to above for them to be in conformity with accounting
principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 1,
conditions exist, which raise substantial doubt about the Company?s
ability to continue as a going concern. The financial statements do not
include any adjustments that might result from the outcome of the
uncertainty.
W.T. UNIACK & CO, CPAs, P.C.
May 19, 2009
TABLE OF CONTENTS
Page No.
Consolidated Balance Sheet March 31, 2009 3
Consolidated Statements of Operations
for March 31, 2009 and 2008 5
Consolidated Statements of Changes in Stockholders
Equity (Deficit) for the Period ended March 31, 2009 6
Consolidated Statements of Cash Flows for
March 31, 2009 and 2008 7
Notes to Consolidated Financial Statements 8
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
GENETHERA, INC.
AND SUBSIDIARY
(A Development Stage Company)
CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2009
UNAUDITED
GeneThera, Inc. And Subsidiary
Consolidated Balance Sheets
Assets
Unaudited
March 31, 2009
December 31, 2008
Current Assets
Cash
$ 53
$ 48
Accounts receivable - less reserve for uncollectible amount
821
821
Total Current Assets
874
869
Property and equipment
727,428
727,428
Accumulated Depreciation
(522,297)
(506,511)
Property and equipment, net
205,131
220,917
Other Assets
Deposits
-
Total Other Assets
-
-
Total Assets
$ 206,005
$ 221,786
Read report and notes to financial statements
GeneThera, Inc. And Subsidiary
Consolidated Balance Sheets
Liabilities and Stockholders' Equity
Unaudited
Year End
March 31, 2009
December 31, 2008
Current Liabilities
Accounts payable
$
924,941
$
880,524
Accrued expenses
1,045,358
982,382
Notes payable
-
Total Current Liabilities
1,970,299
1,862,906
Loan to Shareholder
656,979
656,979
Total Liabilities
2,627,278
,519,885
Stockholders' Equity
Preferred stock, $.001 par value, 20,000,000 shares
authorized;
Series A 4,600 shares issued and outstanding $.001 par
value
5
5
Series B 7,320,000 shares issued and outstanding $.001
par value
7,320
7,320
Common stock $.001 par value, 100,000,000 shares
authorized;
3,511,022 shares issued and outstanding
1,712
467
Additional paid in capital
16,286,479
16,096,984
Deficit accumulated during development stage
(18,716,789)
(18,402,875)
Total Stockholders' Equity
(2,421,273)
(2,298,099)
Total Liabilities & Stockholders' Equity
$ 206,005
$
221,786
Read report and notes to financial statements
GeneThera, Inc. and Subsidiary
Consolidated Statements of Operations
For the Period from October 5, 1998 (Inception) to March 31, 2009
Unaudited
For the period from
3 month period ended March 31,
October 5, 1998
2009
2008
(inception) to
March 31, 2009
Income
Sales
$
-
$
10,821
$
528,071
Research fees
-
-
188,382
Total income
-
10,821
716,453
Cost of sales
-
-
(30,352)
Gross profit
-
10,821
686,101
Expenses
Other compensation
-
-
3,283,009
Consulting
136,990
52,560
5,680,099
General and administrative
expenses
57,453
61,196
4,981,662
Payroll expenses
103,500
58,500
2,442,119
Depreciation
15,786
17,940
561,000
Settlement expense
-
-
82,625
Impairment of long-lived asset
-
-
55,714
Bad debt expense
10,367
10,367
Settlement expense
15,980
Lab expenses
185
127
295,414
Total expenses
313,914
200,690
17,702,729
Loss from operations
(313,914)
(189,869)
(17,016,628)
Other income (expenses)
Beneficial conversion expense
-
-
(1,987,991)
Interest expense
-
-
(46,758)
Gain on settlements
-
-
58,203
Other income (expenses), net
-
-
32,875
Net loss from continuing operations
(313,914)
(189,869)
(18,960,299)
Gain (loss) from disposal of subs
-
Loss from discontinued operations
-
-
(122,065)
Net loss
$
(313,914)
$
(189,869)
$
(19,082,361)
Loss per common share Basic &
Diluted
$
(0.125)
$
(0.056)
Weight Average Shares
2,513,836
10,708
Read report and notes to financial statements
GeneThera, Inc. and Subsidiary
Consolidated Statements of Changes in Stockholders? equity (Deficit)
For the period ended March 31, 2009
Unaudited
Development
Stage
Preferred
Stock A
Preferred Stock
B
Common Stock
Paid in
Subscription
Accumulated
Shares
Amount
Shares
Amount
Shares
Amount
Capital
Agreement
Deficit
Total
Balance December 31,
2008
4,600
$
5
7,320,000
$
7,320
2,265,816
$
467
$
6,096,984
$
-
$18,402,875)
(2,298,099)
Shares issued for
consulting services
602,348
602
145,138
145,740
-
Shares issued for
Salary
642,858
643
44,357
45,000
Net Loss March 31, 2009
(313,914)
(313,914)
Balance March 31, 2009
4,600
$
5
7,320,000
$
7,320
3,511,022
$
1,712
$16,286,479
$
-
$(18,716,789)
$(2,421,273)
Read report and notes to financial statements
GeneThera, Inc. and Subsidiary
(Development Stage Company)
Consolidated Statements of Cash Flows
For the period from October 5, 1998 (Inception) to March 31, 2009
Unaudited
For the period
from
3 month period ended March 31,
October 5, 1998
(inception) to
2009
2008
March 31, 2009
Cash flows from operating activities:
Net loss
$
(313,914)
$
(189,869)
$
(18,125,125)
Adjustments to reconcile net loss to net
cash provided by (used in) operating
activities:
Depreciation and amortization
15,786
17,940
323,464.0
Bad Debt expense
10,367
10,367.0
Compensation in exchange for common
stock
190,740
100,836
10,065,859.0
Beneficial conversion feature
1,987,990.0
Changes in operating assets and
liabilities
(Increase) Decrease in:
Accounts receivable
-
67,445
-62,288.0
Accounts receivable Related Parties
-
-
17,390.0
Reserve for Uncollectible
-
(10,367)
-90,000.0
Inventory
-
-
0.0
Prepaid expenses
-
-110.0
Other assets
-
-
12,556.0
Increase in accounts payable
and accrued liabilities
107,393
73,657
2,796,663.1
Total adjustments
313,919
259,878
15,061,891
Net cash used in operating activities
5
70,009
(3,063,234)
Cash flows from investing activities:
Cash payments for the purchase of
property
-
-
(299,072)
Cash flows from financing activities:
Bank overdraft
-
Capital contributed as equipment
272,376
Principal payments on notes & leases
payable
(240,119)
Payment of lease payable
-
-
120,343
Payment for Accrued Salaries
-
189,350
Proceeds from issuance of stock
-
-
2,087,082
Proceeds from loans payable
-
(70,204)
1,482,500
Proceeds from Subscription Receivable
-
100,040
Repurchase of Common Stock
-
(1,610)
Receipt of APIC
-
20,000
Payment of Preferred Dividends
-
(46,338)
Net cash provided by financing activities
-
(70,204)
3,983,624
Net increase (decrease) in cash
5
(195)
621,318
Cash, beginning of year
48
196
-
Cash, end of year
$
53
$
1
$
53
Supplemental disclosures of cash flow
information:
Cash paid during the period for interest expense
0
0
$
46,758
Cash paid during the period for Taxes
$0
$0
$
-
Read report and notes to financial statements
GENETHERA, INC. AND SUBSIDIARY
A DEVELOPMENT STAGE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2009
UNAUDITED
NOTE 1 PRINCIPLES OF CONSOLIDATION
Principles of Consolidation
The accompanying consolidated financial statements include the
accounts of the Company and its wholly owned subsidiary,
GeneThera, Inc. (Colorado). All significant inter-company
balances and transactions have been eliminated.
NOTE 2 BASIS OF PRESENTATION
The interim financial information included herein is unaudited;
however, such information reflects all adjustments which are, in
the opinion of management, necessary for a fair presentation of
the Company?s financial position, results of operations, changes
in stockholders? equity (deficit) and cash flows for the interim
periods. All such adjustments are of a normal, recurring nature.
The results of operations for the first three months of the year
are not necessarily indicative of the results of operations which
might be expected for the entire year.
The accompanying consolidated financial statements of the Company
have been prepared in accordance with the instructions to Form
10-Q and, therefore, omit or condense certain footnotes and other
information normally included in financial statements prepared in
accordance with generally accepted accounting principles. It is
suggested that these condensed financial statements should be read
in conjunction with the Company's financial statements and notes
thereto included in the Company's audited financial statements on
Form 10-KSB/A as amended for the fiscal year ended December 31,
2008.
NOTE 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Stock Based Compensation
The Company has adopted the use of Statement of Financial
Accounting Standards No. 123R , ?Share-Based Payment?, (SFAS No.
123R) This Statement requires an entity to measure the cost of
employee services received in exchange for an award of equity
instruments based on the grant-date fair value of the award (with
limited exceptions). That cost is recognized over the period
during which an employee is required to provide service in
exchange for the award?the requisite service period (usually the
vesting period). No compensation cost is recognized for equity
instruments for which employees do not render the requisite
service. This Statement supersedes APB Opinion No. 25,
?Accounting for Stock Issued to Employees?, and its related
implementation guidance and eliminates the alternative to use
Opinion 25?s intrinsic value method of accounting that was
provided in Statement 123 as originally issued.
GENETHERA, INC. AND SUBSIDIARY
A DEVELOPMENT STAGE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2009
UNAUDITED
NOTE 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued
Earnings per Share
Basic earnings per share are computed based on the weighted
average number of common shares outstanding during each year.
Diluted earnings per share are computed based on the weighted
average number of common shares outstanding during the period,
there is no Diluted earnings per share for any periods in which
there is a loss as it would be anti-dilutive.
NOTE 4 PROPERTIES AND EQUIPMENT
Property and equipment consisted of the following:
March 31,2009
Computers $ 42,987
Office Equipment 39,891
Furniture & fixtures 1,465
Laboratory equipment 643,084
727,428
Less accumulated depreciation (522,297)
$205,131
Depreciation expense for the three months ended March 31, 2009
and 2008 was $15,786 and $17,940 respectively.
NOTE 5 Loan to Shareholder
For the periods ended March 31, 2009 and December 31, 2008, the
Company had a balance in note payable of $656,979 and $656,979
respectively.
NOTE 6 COMMITMENTS AND CONTINGENCIES
During the quarter a judgment was levied against the Company.
The amount is still undetermined however, it?s the Company?s
belief that it will approximate a loss of at least $638,000 plus.
This has not been accrued in the financial statements.
GENETHERA, INC. AND SUBSIDIARY
A DEVELOPMENT STAGE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2009
UNAUDITED
NOTE 7 STOCKHOLDERS EQUITY
Common Stock
In January 2009, the Company issued 56,885 shares valued at
$30,092 to consulting services of operations and resulted in an
immediate charge to operations.
In February 2009, the Company issued 173,666 shares valued at
$64,576 to consulting services of operations and resulted in an
immediate charge to operations.
In March 2009, the Company issued 356,798 shares valued at
$31,787 to consulting services of operations and resulted in an
immediate charge to operations.
In March 2009, the Company issued 642,858 shares valued at
$45,000 to Office Salary of operations and resulted in an
immediate charge to operations.
As of March 31, 2009, there were 3,511,022 shares of our common
stock issued and outstanding.
Preferred Stock
As of March 31, 2009, there were 4,600 shares of our Series A,
Convertible Preferred Stock (Series A) issued and outstanding, and
7,320,000 shares of our Series B, Convertible Preferred Stock (Series
B) were issued and outstanding.
Reverse Stock Split
As of July 9, 2008, the Company did a reverse stock split of one-for-
five thousand (1:5,000) reverse split of it common stock. After the
reverse split, the Company has 12,595 shares outstanding. All Per
Share amounts in the accompanying financial statements have been
adjusted for the reverse split.
Converted Stock
As of July 11, 2008, the Company converted 20,000 Preferred B Stock to
200,000 Common Stock.
As of September 26, 2008, the Company converted 10,000Preferred B Stock
to 100,000 Common Stock.
As of October 20, 2008, the Company converted 150,000 Preferred B Stock
to 1,500,000 shares of Common Stock.
NOTE 8 GOING CONCERN UNCERTAINTIES
These financial statements are presented assuming the Company
will continue as a going concern. For the periods ended March
31, 2009 and 2008, the Company showed operating losses of
$313,914 and $189,869 respectively. The accompanying financial
statements indicate that current liabilities exceed current
assets by $1,969,425 for the three months ended March 31, 2009.
These factors raise substantial doubt about its ability to
continue as a going concern. Management plan with regard to
these matters includes raising working capital and significant
assets and resources to assure the Company viability, through
private or public equity offering, and/or debt financing, and/or
through the acquisition of new business or private ventures.
Item 2. Management 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" within the meaning of Section 27A of the Securities
Act of 1933, as amended (the "Securities Act"), Section 21E of
the Securities and Exchange Act of 1934, as amended (the
"Exchange Act"), and the Private Securities Litigation Reform Act
of 1995, as amended. 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,
* 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
Gross profits for the three-month period ended March 31, 2009
were $0 compared to $10,821 for the same period last year.
Personnel (salaries) increased from $103,500 for the prior three
month period ending March 31, 2009 to $58,500 for the three month
period ending March 31, 2008. Professional expenses (consulting
and professional fees) comparing the three month period ending
March 31, 2009, to the three month period ending March 31, 2008,
increase from $136,990 to $52,560 with the increase attributable
to stock issued for consulting and professional services received
throughout the quarter.
LIQUIDITY AND CAPITAL RESOURCES
The Company had a cash balance of $53 as of March 31, 2009.
Accounts receivable as of March 31, 2009 was $821. It is
estimated that it will require outside capital for the remainder
of fiscal year 2009 for the commercialization of GeneThera
molecular assays as well as the development of their 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, 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.
Item 3. GENETHERA PLAN OF OPERATION
Background
In November 2007, GeneThera, Inc. reincorporated in the State of
Nevada due to a third party which purchased the GeneThera Florida
Charter in order to blackmail our Company for $80,000. We had a
special meeting with three shareholders where it was unanimously
resolved for GeneThera to transfer its Charter to the State of
Nevada as soon as possible in order to recognize our new
incorporation on our next SEC filing. The reinstatement was
completed by January 2008. GeneThera has developed proprietary
diagnostic assays for use in the agricultural and veterinary
markets. Specific assays for Chronic Wasting Disease (among elk
and deer) and Mad Cow Disease (among cattle) have been developed
and are available currently on a limited basis. E. Coli
(predominantly cattle) and Johne's disease (predominantly dairy
cattle and bison) diagnostics are in development. GeneThera is
making a pivotal shift from a Research and Development
organization into a product marketing and revenue generating
entity. The company strategy that we maintained from inception
to our recent reverse split (July, 2008) had been one of research
only. We focused all our energies, talent, and resources to the
incubation and growth of new ideas in the realm of genetically
engineered disease detection and vaccination. We feel that with
recent announcements the company is positioned to move from a
developmental stage to a product oriented stage.
GeneThera provides genetics-based diagnostic and is currently
working on vaccine solutions to meet the growing demands of
today's veterinary industry and tomorrow's agriculture and
healthcare industries. The company is organized and operated both
to continually apply its scientific research to more effective
management of diseases and, in so doing, realize the commercial
potential of molecular biotechnology.
The Company believes it will require significant additional
funding in order to achieve its business plan. Over the next 12
months, in order to have the capability of achieving its business
plan, the Company will require at least $5,000,000. 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.
RESEARCH AND DEVELOPMENT
We anticipate that research and development (R&D) will be the
source for both assay development and vaccine design/development.
If we are able to develop assays for different diseases, we
intend to formalize the procedure into a commercial application
through a series of laboratories to be owned and operated by
GeneThera. To date, we have introduced our diagnostic solution
for Chronic Wasting Disease and Mad Cow Disease on a very limited
basis. We anticipate that R&D will be ongoing during the life of
the Company, as this is the source for new products to be
introduced to the market. Our plan is to seek new innovations in
the biotechnology field. We cannot assure you that we will be
successful in developing or validating any new assays or, if we
are successful in developing and validating any such assays, that
we can successfully commercialize them or earn profits from sales
of those assays. Furthermore, we cannot assure you that we will
be able to design, develop, or successfully commercialize any
vaccines as a result of our research and development efforts.
COMMERCIAL DIAGNOSTIC TESTING
In the event that we are able to develop assays for the detection
of diseases in animals, we intend to establish a series of
diagnostic testing laboratories geographically proximate to the
primary sources of individual diseases and/or according to
specific available operating efficiencies. The specific number
of labs to be built and operated will be based on assay demand
(demand facilitated by the number of specific disease assays
GeneThera develops), our ability to obtain the capital to build
the labs, and our ability to successfully manage them from our
principal office. As of the date of this filing, we are in
negotiation to establish one diagnostic testing laboratory
outside of our Colorado facility.
LICENSING
Through our third division, Licensing, we intend to manage the
marketing and sale of the vaccines developed by GeneThera
Research & Development division. As GeneThera does not intend to
be a vaccine manufacturer, we plan to use our Licensing division
to license the technology related to any vaccines that may be
developed and to manage the revenue potential available from the
successful development and validation of specific vaccines. We
cannot provide any assurance that we will develop any vaccines or
that, if they are developed, we will be able to license them
successfully or that any such license will produce significant
revenues.
R&D SERVICES
Molecular, Cellular, Viral Biology Research, and Consulting
Services. We provide independent research services to scientists
in academia, the pharmaceutical industry, and the biotechnology
industry. Primarily, GeneThera expertise focuses on technology
relevant to animal and human immunotherapy. These services are
backed by the cumulative experiences of greater than 50 years of
research and development in both government and industry by
GeneThera senior scientists. GeneThera intends to develop a
commercial-scale implementation of Adenovector Purification
Process to support R&D material production. Furthermore,
GeneThera intends to evaluate and test commercially available
expression vectors and incorporate them into its vector
repertoire. These technologies are well established within the
repertoire of GeneThera scientific staff. We cannot provide any
assurance, however, that we will be able to successfully offer
these services or that, if offered, we can provide them
profitably.
Research & Development Services:
Molecular Biology:
Synthetic cDNA Construction
Prokaryotic Expression Vector Construction & Development
E. Coli Expression Strain Evaluation
Pilot Scale Fermentation
Mammalian Expression Vector Construction & Development
Baculovirus Expression
Protein Isolation
Protein Engineering: Complement Determining Region Conjugated
Proteins
Monoclonal Antibody Production Chimerization & Humanization
Vector design for Prokaryotic Expression of Antibody Fragments
(Fab) and Single Chain Antibody (ScFv)
Pilot Scale-up Development
Process Purification & Characterization
Assay Development & Quality Control Pharmaceutical Dosage and
Formulation
Gene Therapy Testing Services. GeneThera offers GLP (Good
Laboratory Procedure) testing programs for somatic cell, viral
and naked DNA-based gene therapies. Our scientists have over
nine years experience in providing fully integrated bio-safety
testing programs for the cell and gene therapy fields. To date,
the Company has not generated any revenues with regard to these
services, and there is no assurance that we will generate any
revenues from such services.
Replication-Competent Viral Vector Testing. Sensitive in vitro
cell culture assays are used to detect replication-competent
retroviruses or adenoviruses. GeneThera can work with clients to
provide custom replication-competent virus detection assays for
the particular vector construct.
Complete Somatic Cell and Viral Vector Packaging and Producer
Cell Line Characterization. GeneThera offers all of the assays
mandated by regulatory authorities worldwide for the bio-safety
analysis and characterization of cells and cell lines used in
gene therapy products.
Vector Stock Characterization. Custom purity and potency testing
is available for gene therapy viral vector stocks.
Vector Purification Process Validation for Viral Clearance. Most
biopharmaceuticals require viral clearance studies to validate
the removal of potential contaminants, such as those from bovine
components or from helper viruses (adenovirus in AAV production).
GeneThera can provide custom design and performance of viral
studies for various vector purification processes.
Custom Bio-safety Testing Programs for Somatic Cell, Ex Vivo
Cell, and Tissue Therapies. GeneThera can guide our clients
through the unique process of designing and implementing a bio-
safety testing program that meets the needs of each specific
project.
GeneThera is currently seeking contracts for these services and
is in the final negotiation stage with a publicly traded company
to perform these services on an annual basis. There is no
assurance that any contracts will be signed or that the company
will generate significant revenues or profits from any such
contracts.
BUSINESS MODEL
Summary. GeneThera animal disease assay development business is
based on its Integrated Technology Platform (ITP) that combines a
proprietary diagnostic solution called Gene Expression Assay
(GES) with PURIVAXTM, its system for analyzing large-scale DNA
sequencing. The first part of this platform is the ongoing
development of molecular diagnostic assays solutions using real
time Fluorogenic Polymerase Chain Reaction (F-PCR) technology to
detect the presence of infectious disease from the blood of live
animals. The second part of the ITP is the development of
therapeutic vaccines using RNA interference technology. It also
allows for the efficient, effective, and continuous testing,
management and treatment of animal populations. These facts
distinguish the technology from any alternative testing and
management methodology available to agriculture today -- all of
which require the destruction of individual animals and even
entire herds. Our testing and data analysis processes also allow
us not only to separate infected from clean animals, but also to
gain knowledge vital to development of preventative vaccines.
Each individual assay utilizes the proprietary Field Collection
System (FCS) for the collection and transportation of blood
samples to GeneThera laboratory. The FCS allows GeneThera to
maintain the integrity of each sample by the addition of specific
reagents to test tubes contained in the system. GeneThera FCS is
designed to be an easy-to-use method of gathering blood samples
from harvested or domesticated animals. It ensures consistency
of samples as well as increased assurance of each sample's
integrity.
To date, GeneThera has successfully developed the ability to
detect Chronic Wasting Disease, a disease affecting elk and deer
in North America. The release of commercialized Field Collection
Systems and laboratory diagnostic testing occurred in October of
2003 as a marketing trial. GeneThera has also successfully
developed an assay for the detection of Mad Cow Disease, a
disease recently found in the United States, but which has been
in Europe for many years. The Field Collection Systems are
available for purchase from the Company. Chronic Wasting Disease
and Mad Cow Disease are both in the family of diseases called
Transmissible Spongiform Encephalopathy (TSE). Diagnostic assays
for e.Coli O157:H7 and Johne?s disease are in the final stages of
development.
The Company, through GeneThera, is also developing vaccines for
Chronic Wasting Disease and e.Coli O157:H7. The Company will
need the approval of the USDA before the vaccines can be
manufactured or sold. The approval process for animal vaccines
is time-consuming and expensive. We anticipate that such
approval, if it is obtained, may require more than $5 million and
may require more than two years for each vaccine for which
approval is sought. Currently we do not have the capital
necessary to seek approval of any of our candidate vaccines, and
we cannot provide any assurance that we will be able to raise the
capital necessary for such approval on terms that are acceptable
to us, if at all. In addition, even if we are successful in
raising the capital necessary to seek approval of any vaccine,
there are no assurances that such an approval will be granted, or
if granted, whether we will be able to produce and sell such
vaccines following such an approval in commercial quantities or
to make a profit from such production and sales.
Our recent developments include the progress we are making in
regards to our Johnes disease validation trials scheduled to
begin in collaboration with the Universidad National Autonoma de
Mexico, a prominent state university in Mexico City. Our joint
venture with Nutricion Avanzada, (the joint venture created a new
company Applied Genetics. Applied Genetics is the marketing arm
of GeneThera for the Mexican marketing of our Johne?s disease
testing service and subsequent Vaccine, (which is currently under
development) has been in contact with several major ranchers
throughout Mexico, and the overwhelming response from the
ranchers has been an outcry for help in detecting and eliminating
Johne?s disease which is running rampant in their herds.
Government approval and recommendation is expected to occur
quickly once the validation trials are complete. The validation
trials should be complete within 3-4 months from start. We will
be conducting paid testing on a limited basis during the
validation trials.
The recent signing of our agreement with STC.UNM (the technology
development arm of The University of New Mexico) for the genetic
vaccine they have developed and patented for e. Coli 0157:h7 has
thrust GeneThera into the global spotlight. The vaccine acts on a
genetic level to inhibit the growth and shedding of the deadly e.
Coli 0157:h7 bacteria from cattle. The vaccine has already passed
initial animal trials and is now set to enter the clinical trial
phase. We are currently seeking partnerships for the completion
of the clinical trials and subsequent taking of the finished
vaccine to market. Due to the specific genetic makeup of the
vaccine, we expect the clinical trials to be completed within 9-
12 months from start. This is 3 to 5 times faster than a standard
vaccine might take.
GeneThera no longer is working with The Goldsmith Group LLC due
to manipulation of our market initiated by this independent
contractor together with Steven Lockhart fro Lockhart Capital
Group. We currently have two new Investor Relations Firms: JR
Dopkin & Associates, LLC; Oracle Consultants, LLC; and Hawks
Associates, Inc. for continued improvement of the company image
and support for its shareholders. These IR Firms are private PR
and Marketing firms whose members have extensive experience in
the managing and marketing of both private and publicly traded
firms throughout the US, Europe, and Canada. They are in charge
of improving the company website, creating new marketing and
information materials for shareholders and partners, and
presenting our company to new groups of potential shareholders.
We are excited to have them on board.
ITEM 4. CONTROLS AND PROCEDURES
As required by Rule 13a-15 under the Securities Exchange Act of
1934 (The Exchange Act), we carried out an evaluation of the
effectiveness of the design and operation of our disclosure
controls and procedures within the 90 days prior to the filing
date of this report. This evaluation was carried out under the
supervision and with the participation of our Chief Executive
Officer, Consulting Chief Financial Officer, and Controller. We
concluded that our internal controls are ineffective. We will be
working on them to improve its effectiveness.
There will be significant changes in our internal controls and in
other factors that will definitely affect internal controls
positively subsequent to the date we carried out our evaluation.
Disclosure controls and procedures are controls and other
procedures that are designed to ensure that information required
to be disclosed in our reports filed or submitted under the
Exchange Act is recorded, processed, summarized, and reported
within the time periods specified in the Securities and Exchange
Commission?s rules and forms. Disclosure controls and procedures
include, without limitation, controls and procedures designed to
ensure that information required to be disclosed in our reports
filed under the Exchange Act is accumulated and communicated to
management, including our Chief Executive Officer and Chief
Financial Officer, to allow timely decisions regarding required
disclosure.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
On or about July 23, 2004, Sisu Media sued the Company in
Jefferson County District Court for breach of an alleged contract
for website services for which the plaintiff seeks compensatory
damages, plus costs, interest, and attorney fees in amounts to
be determined at trial. Trial was held on August 4, 2005,
wherein the court determined that Sisu Media was entitled to
compensation based only upon the breach of contract claim.
Plaintiff?s claims in quantum meruit and for unjust enrichment
were dismissed. The court also dismissed defendant GeneThera,
Inc.?s claim of aiding and abetting a breach of fiduciary duty by
third party. Entry of judgment was entered in favor of the
plaintiff in the amount of $49,000.00. On February 9, 2006, the
Company appealed this judgment and on January 9, 2008, the
Appellate Committee?s decision was in favor of the plaintiff due
to lack of adequate legal representation. An additional judgment
of $6,237.31 was awarded for their attorney?s fees. The Company
has not paid the abovementioned judgment(s).
On October 11, 2006, MAG Capital, a California Limited Liability
Company (Mercator Momentum III, LP; Mercator Momentum Fund LP;
Monarch Pointe Fund, Ltd; a British Virgin Islands Corporation),
filed litigation against GeneThera, Inc., GTI Corporate Transfer
Agents, LLC, a Colorado limited liability company, Antonio
Milici, an individual, Tannya L. Irizarry, and Laura Bryan,
individuals in the Superior Court State Complaint for breach of
written contract. The Company retained legal counsel from Mark A.
Shoemaker. In January 2008, MAG Capital dismissed the claims
except the anticipatory breach of contract for which the Company
legal counsel filed an appeal dated February 19, 2008. The
Company lost the appeal. MAG Capital sold the debt to a London
Company.
Item 2. Changes in Securities
None.
Item 3. Defaults upon Senior Securities
No defaults upon senior securities.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders as of
March 31, 2009.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 10-Q
(A) Financial Statements
Reference is made to the financial statements listed on the
Index to Financial Statements in this Form 10-Q.
(B) Exhibits
33.1 Certification pursuant to section 302 of the Sarbanes-
Oxley act of 2002
33.2 Certification pursuant to section 302 of the Sarbanes-
Oxley act of 2002
99.1 Certification of the President and Chief Executive
Officer
99.2 Certification of the Chief Financial Officer
Signatures
Pursuant to the requirements of the Securities Act of 1933 the
Registrant has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly
authorized, in Arvada, Colorado on this 20th day of May, 2009.
GENETHERA, INC.
By: s/ Antonio Milici
Name: Antonio Milici
Title: President and Chief
Executive Officer
Pursuant to the requirements of the Securities Act of 1933 this
Registration Statement has been signed by the following persons
in the capacities indicated on May 20, 2009:
Signature
Title(s)
/s/ Antonio Milici
Antonio Milici
President, Chief Executive Officer
/s/ Tannya L Irizarry
Tannya L Irizarry
Chief Financial Officer (Interim)
/s/ Thomas J Slaga
Thomas J Slaga
Director
EXHIBIT 31.1
CERTIFICATION PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002
I, Antonio Milici, certify that:
1. I have reviewed this Form 10-Q for the fiscal quarter ended March
31, 2009 of GeneThera, Inc.;
2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this report;
3. Based on my knowledge, the financial statements, and other
financial information included in this report, fairly present in
all material respects the financial condition, results of operations
and cash flows of the small business issuer as of, and for, the periods
presented in this report;
4. The small business issuer?s other certifying officer(s) and I are
responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))
for the small business issuer and have:
a) Designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the small
business issuer, including its consolidated subsidiaries, is made known
to us by others within those entities, particularly during the period
in which this report is being prepared;
b) Evaluated the effectiveness of the small business issuer's
disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and
procedures as of the end of the period covered by this report based on
such evaluation; and
c) Disclosed in this report any change in the small business
issuer's internal control over financial reporting that occurred during
the small business issuer's most recent fiscal quarter (the small
business issuer's fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to
materially affect, the small business issuer's internal control over
financial reporting; and
5. The small business issuer's other certifying officer(s) and
I have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the small business issuer's
auditors and the audit committee of the small business issuer's board
of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the small business issuer's
ability to record, process, summarize and report financial
information; and
b) Any fraud, whether or not material, that involves management
or other employees who have a significant role in the small business
issuer's internal control over financial reporting.
Date: May 20, 2009
/s/ Antonio Milici
--------------------------
Antonio Milici
President/Director
EXHIBIT 31.2
CERTIFICATION PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002
I, Tannya L Irizarry, certify that:
1. I have reviewed this Form 10-QSB for the fiscal year ended March
31, 2009 of GeneThera, Inc.;
2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect
to the period covered by this report;
3. Based on my knowledge, the financial statements, and other
financial information included in this report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the small business issuer as of, and for, the periods
presented in this report;
4. The small business issuers other certifying officer(s) and
I are responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-
15(e)) for the small business issuer and have:
a) Designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to
the small business issuer, including its consolidated subsidiaries,
is made known to us by others within those entities,particularly
during the period in which this report is being prepared;
b) Evaluated the effectiveness of the small business issuer's
disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and
procedures as of the end of the period covered by this report
based on such evaluation; and
c) Disclosed in this report any change in the small business
issuer's internal control over financial reporting that occurred during
the small business issuer's most recent fiscal quarter (the small
business issuer fourth fiscal quarter in the case of an annual report)
that has materially affected, or is reasonably likely to materially
affect, the small business issuer's internal control over financial
reporting; and
5. The small business issuer's other certifying officer(s) and
I have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the small business issuer's
auditors and the audit committee of the small business issuer's board
of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting
which are reasonably likely to adversely affect the small business
issuer's ability to record, process, summarize and report financial
information; and
b) Any fraud, whether or not material, that involves management
or other employees who have a significant role in the small business
issuer's internal control over financial reporting.
Date: May 20, 2009
/s/ Tannya L. Irizarry
--------------------------
Tannya L. Irizarry
Chief Financial Officer (Interim)
Exhibit 32.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
I, Antonio Milici, certify, pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that
the Quarterly Report on Form 10-Q of GeneThera, Inc. for the quarterly
period ended March 31, 2009, fully complies with the requirements of
Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that
the information contained in the Quarterly Report on Form 10-Q fairly
presents in all material respects the financial condition and results
of operations of GeneThera, Inc.
By: /s/ Antonio Milici
Name: Antonio Milici
Title: Chief Executive Officer
Date: May 20, 2009
Exhibit 32.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
I, Tannya L. Irizarry, certify, pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that
the Quarterly Report on Form 10-Q of GeneThera, Inc. for the quarterly
period ended March 31, 2009, fully complies with the requirements of
Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that
the information contained in the Quarterly Report on Form 10-Q fairly
presents in all material respects the financial condition and results
of operations of GeneThera, Inc.
By: /s/ Tannya L Irizarry
Name: Tannya L Irizarry
Title: Chief Financial Officer (Interim)
Date: May 20, 2009