Quarterly report pursuant to Section 13 or 15(d)

1A. RESTATEMENT OF PREVIOUSLY REPORTED INFORMATION

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1A. RESTATEMENT OF PREVIOUSLY REPORTED INFORMATION
6 Months Ended
Oct. 31, 2015
Restatement of Prior Year Income [Abstract]  
1A. RESTATEMENT OF PREVIOUSLY REPORTED INFORMATION

PharmaCyte Biotech, Inc. (“Company”) restated its condensed consolidated financial statements as of and for the period ended October 31, 2015 to reflect adjustments made due to the correction of the treatment of the issuance of certain shares of the Company’s common stock, $0.0001 par value per share (“common stock”), warrants and certain other matters, as further described below, resulting in a material understatement to assets, a material overstatement to liabilities and a material understatement to stockholders’ equity. The nature and impact of these adjustments are described in more detail below.

 

The adjustments described above relate to the Company’s issuance of certain warrants to purchase common stock with a cashless exercise feature (“cashless warrants”) in connection with its entry into a marketing and consulting agreement (“Consultant Agreement”) with a consultant during the fourth quarter of the prior fiscal year ended April 30, 2015 (for more information, see the amendment (“Amended Form 10-K”)) to our Annual Report on Form 10-K for the year ended April 30, 2015, originally filed July 29, 2015 (“Original Form 10-K”).  The Company accounted for the cashless warrants as a derivative liability in the Original Form 10-K. However, upon further analysis, the Company determined that the cashless warrants should have been accounted for as equity in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) in the Original Form 10-K. Additionally, the Company determined that the issuance of shares of common stock to the consultant pursuant to the Consultant Agreement and the issuance of certain warrants to purchase common stock with a cash exercise feature (“cash warrants”) and the cashless warrants to the consultant should have been recorded as a prepaid asset and amortized over the term of the Consultant Agreement in accordance with U.S. GAAP in the Original Form 10-K. As a result of the Company’s determination that the cashless warrants should be accounted for as equity, and that the Consultant Agreement, stock issuance, cash warrants and cashless warrants should be accounted for as a prepaid asset, the Company increased general and administrative expenses by the net amount of $506,573 and $1,013,146 on its condensed consolidated statements of operations for the three and six months ended October 31, 2015, respectively, and increased prepaid expenses and other assets by the amount of $335,878, net of amortization, on its condensed consolidated balance sheet as of October 31, 2015, as set forth in the Restated Financial Statements. As a result of these adjustments, and the adjustments to our consolidated financial statements for the fiscal year ended April 30, 2015, as set forth in the Amended Form 10-K, the Company recorded a net increase to its accumulated deficit in the amount of $578,382 and an increase to total stockholders’ equity in the amount of $335,878.

 

As set forth in the Restated Financial Statements, the effect of the timing of the recognition of the cashless warrant expense resulted in a decrease of $29,746 and $492,049 to total other income, an increase to general and administrative expenses of $506,573 and $1,013,146 (amortization of prepaid expenses) and an increase to reported net loss in the amount of $536,319 and $1,505,195 for the three and six months ended October 31, 2015, respectively.

 

The impact of the adjustments to the Company’s condensed consolidated balance sheets, condensed consolidated statements of operations, condensed consolidated statements of comprehensive loss, condensed consolidated statements of stockholders’ equity (deficiency) and condensed consolidated statements of cash flows for the three and six months ending October 31, 2015 is as follows:

 

    October 31, 2015  
    As Previously Reported     Adjustment     As Restated  
Selected Consolidated Balance Sheet Accounts                        
Prepaid expenses and other current assets   $ 74,757     $ 335,878     $ 410,635  
Total current assets   $ 2,512,187     $ 335,878     $ 2,848,065  
Total assets   $ 7,641,661     $ 335,878     $ 7,977,539  
Additional paid in capital   $ 87,685,381     $ 914,270     $ 88,599,651  
Accumulated deficit   $ (81,200,061 )   $ (578,392 )   $ (81,778,453 )
Total stockholders' equity   $ 6,561,656     $ 335,878     $ 6,897,534  
Total liabilities and stockholders' equity   $ 7,641,661     $ 335,878     $ 7,977,539  

 

    Three Months Ended October 31, 2 015  
    As Previously Reported     Adjustment     As Restated  
Consolidated Statement of Operations                        
Total revenue   $     $     $  
Cost of revenue                  
Gross margin                  
Research and development costs     439,711             439,711  
Compensation expense     400,507             400,507  
Director fee     9,000             9,000  
Legal and professional     57,988             57,988  
General and administrative     222,039       506,573       728,612  
Loss from operations     (1,129,245 )     (506,573 )     (1,635,818 )
Unrealized gain on change in derivative     29,746       (29,746 )      
Other expenses     430             430  
Interest expense, net     (194 )           (194 )
Total other income (expense), net     29,982       (29,746 )     236  
Net loss   $ (1,099,263 )   $ (536,319 )   $ (1,635,582 )
                         
Basic and diluted net loss per share   $ 0.00     $     $ 0.00  

 

    Six Months Ended October 31, 2015  
    As Previously Reported     Adjustment     As Restated  
Consolidated Statement of Operations                        
Total revenue   $     $     $  
Cost of revenue                  
Gross margin                  
Research and development costs     595,389             595,389  
Compensation expense     848,077             848,077  
Director fee     27,000             27,000  
Legal and professional     183,063             183,063  
General and administrative     483,454       1,013,146       1,496,600  
Loss from operations     (2,136,983 )     (1,013,146 )     (3,150,129 )
Unrealized gain on change in derivative     492,049       (492,049 )      
Other expenses     335             335  
Interest expense, net     (826 )           (826 )
Total other income (expense), net     491,558       (492,049 )     (491 )
Net loss   $ (1,645,425 )   $ (1,505,195 )   $ (3,150,620 )
                         
Basic and diluted net loss per share   $ 0.00     $     $ 0.00  

 

    Three Months Ended October 31, 2015  
    As Previously Reported     Adjustment     As Restated  
Consolidated Statement of Comprehensive Loss                        
Net loss   $ (1,099,263 )   $ (536,319 )   $ (1,635,582 )
Foreign currency translation adjustment     (34 )           (34 )
Comprehensive loss   $ (1,099,297 )   $ (536,319 )   $ (1,635,616 )

 

 

    Six Months Ended October 31, 2015  
    As Previously Reported     Adjustment     As Restated  
Consolidated Statement of Comprehensive Loss                        
Net loss   $ (1,645,425 )   $ (1,505,195 )   $ (3,150,620 )
Foreign currency translation adjustment     1,587             1,587
Comprehensive loss   $ (1,643,838 )   $ (1,505,195 )   $ (3,149,033 )

 

 

    Six Months Ended October 31, 2015  
    As Previously Reported     Adjustment     As Restated  
                         
Consolidated Statement of Cash Flows                        
Operating activities                        
Net loss   $ (1,645,425 )   $ (1,505,195 )   $ (3,150,620 )
Stock issued for services           333,216       333,216  
Stock issued for compensation     254,040             254,040  
Stock based compensation - options     287,928             287,928  
Stock based compensation - warrants           679,930       679,930  
Gain on derivative liability     (492,049 )     492,049        
Increase in prepaid expenses and current assets     (80,500 )           (80,500 )
Decrease in accounts payable     (69,491 )           (69,491 )
Increase in accrued expenses     29,130             29,130  
Decrease in license agreement obligation     (400,000 )           (400,000 )
Net cash used in operating activities     (2,116,367 )           (2,116,367 )
                         
Investing activities                        
Net cash from investing activities                  
                         
Financing activities                        
Proceeds from sale of common stock     1,728,935             1,728,935  
Net cash provided by financing activities     1,728,935             1,728,935  
                         
Effect of currency rate exchange on cash     125             125  
                         
Net decrease in cash     (387,307 )             (387,307 )
Cash at beginning of year     2,699,737             2,699,737  
Cash at October 31, 2015   $ 2,312,430     $     $ 2,312,430