UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

For the quarterly period ended January 31, 2015

or

For the transition period from __________ to __________

Commission file number 333-68008

PHARMACYTE BIOTECH, INC.

(Exact name of registrant as specified in its charter)

12510 Prosperity Drive, Suite 310, Silver Spring, Maryland 20904

(Address of principal executive offices)

(917) 595-2850

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has 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 registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

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 the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

As of March 13, 2015, registrant had 707,767,981 outstanding shares of common stock, with a par value of $0.0001.

PHARMACYTE BIOTECH, INC.

INDEX TO QUARTERLY REPORT ON FORM 10-Q

FOR THE THREE MONTHS ENDED JANUARY 31, 2015

PART I – FINANCIAL INFORMATION

Item 1.  Financial Statements.

PHARMACYTE BIOTECH, INC.

CONSOLIDATED BALANCE SHEETS

The accompanying notes are an integral part of these unaudited financial statements.

PHARMACYTE BIOTECH, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

The accompanying notes are an integral part of these unaudited financial statements.

PHARMACYTE BIOTECH, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

PHARMACYTE BIOTECH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

January 31, 2015

(UNAUDITED)

NOTE 1 – OVERVIEW OF THE COMPANY AND SUMMARY OF ACQUISITIONS

The Company

PharmaCyte Biotech, Inc. (“Company”) is dedicated to bringing to market scientifically derived products designed to improve the health, condition and well-being of those who use them. The Company is a clinical stage biotechnology company focused on developing and preparing to commercialize treatments for cancer and diabetes based upon a proprietary cellulose-based live-cell encapsulation technology known as Cell-in-a-Box^®. The Company intends to use this unique and patented technology as a platform upon which to build treatments for several types of cancer, including advanced, inoperable pancreatic cancer, and diabetes.

The Company’s treatment for pancreatic cancer involves low doses of the well-known anticancer prodrug ifosfamide, together with encapsulated Live-cells, which convert ifosfamide into its active or “cancer-killing” form. These capsules are placed as close to the cancerous tumor as possible to enable the delivery of the highest levels of the cancer-killing drug at the source of the cancer.

The Company is also working towards improving the quality of life for patients with advanced pancreatic cancer and on treatments for other types of abdominal cancers using the Cell-in-a-Box^® technology.

In addition, the Company is developing treatments for cancer based upon the chemical constituents of the Cannabis plant, knows as cannabinoids. In doing so, the Company is examining ways to exploit the benefits of Cell-in-a-Box^® technology in optimizing the anticancer effectiveness of cannabinoids, while minimizing or outright eliminating the debilitating side effects usually associated with cancer treatments.

The Company is currently preparing for a Phase 2b clinical trial with its pancreatic cancer treatment in patients with advanced, inoperable pancreatic cancer that will be conducted in Australia. It is also preparing for clinical trials of that same treatment to study its effects on major symptoms associated with pancreatic cancer. The first two clinical trials related to the symptoms associated with pancreatic cancer involve the unbearable pain from advanced pancreatic cancer and the accumulation of malignant ascites fluid that usually occurs with this disease. These clinical trials will be conducted in the United States. A preclinical study on ascites has been completed in the United States and a follow-up preclinical study is currently underway.

The Company operates independently and through four wholly-owned subsidiaries: (i) Viridis Biotech, Inc.; (ii) Nuvilex Europe Limited (soon to be renamed PharmaCyte Biotech Europe Limited); (iii) Nuvilex Australia Limited (soon to be renamed PharmaCyte Biotech Australia Private Limited); and (iv) Bio Blue Bird AG (“Bio Blue Bird”). The Company's strategy is to focus on developing and marketing products it believes have potential for long-term corporate growth solely in the area of biotechnology.

Effective June 25, 2013, the Company and SG Austria Private Limited (“SG Austria”) entered into a Third Addendum (“Third Addendum”) to the SG Austria Asset Purchase Agreement with the Company (“SG Austria APA”). The Third Addendum resulted in the Company acquiring 100% of the equity interests in Bio Blue Bird and receiving a 14.5% equity interest in SG Austria. The Company also received nine bearer shares of Bio Blue Bird. Under the Third Addendum, the Company paid: (i) $500,000 to retire all outstanding debt of Bio Blue Bird; and (ii) $1.0 million to SG Austria. In addition, the Company paid SG Austria $1,572,193. The Third Addendum returned the original 100,000,000 shares of common stock to the Company treasury and the 100,000 shares of common stock of Austrianova Singapore Private Limited (“Austrianova Singapore”) to SG Austria that was part of the consideration set forth in the SG Austria APA.

The acquisition of Bio Blue Bird provided the Company with exclusive, worldwide licenses to use a proprietary cellulose-based live cell encapsulation technology for the development of treatments for all forms of cancer using certain types of cells. The licenses are pursuant to patents licensed from Bavarian Nordic A/S and GSF-Forschungszentrum fur Umwelt u. Gesundeit GmbH. These licenses enable the Company to carry out the research and development of cancer treatments that are based upon the live cell encapsulation technology known as “Cell-in-a-Box^®.”

In July 2013, the Company acquired from Austrianova Singapore the exclusive, worldwide license to use the cellulose-based live-cell encapsulation technology for the development of a treatment for diabetes and the use of Austrianova Singapore’s “Cell-in-a-Box^®” trademark for this technology (“Diabetes Licensing Agreement”). The Company made its first $1,000,000 payment to secure the Diabetes Licensing Agreement on October 30, 2013. The second and final payment of $1,000,000 was made on February 25, 2014.

In December 2014, the Company also acquired from Austrianova Singapore the exclusive, worldwide license (“Cannabis Licensing Agreement”) to use the cellulose-based live-cell encapsulation technology in combination with compounds from constituents on Cannabis for development of disease treatments. As of January 31, 2015, the Company has paid Austrianova Singapore $500,000 of the $2.0 million upfront payment required to be made by the Company for this license.

NOTE 2 – CAPITALIZATION AND MANAGEMENT PLANS

Capitalization

The Company's financial statements are prepared using generally accepted accounting principles in the United States (“GAAP”) applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. As of January 31, 2015, the Company has an accumulated deficit of $77,065,081 and incurred a net loss for nine months ended January 31, 2015 of $7,106,547.

Funding has been provided by management and investors to maintain and expand the Company and acquire Bio Blue Bird. New investors enabled the completion of the acquisition of Bio Blue Bird which provided the Company the ability to begin preparations toward clinical trials in patients with advanced, inoperable pancreatic cancer. Additional funding enabled the Company to obtain the diabetes license and to advance the Company’s preclinical studies and preparations for clinical trials of its product candidates. The remaining challenges, beyond the regulatory and clinical aspects, include accessing further funding for the Company to cover its future cash flow needs. The Company continues to acquire additional funds through management's efforts.

On October 28, 2014, the Company filed a Form S-3 Registration Statement under the Securities Act of 1933, as amended. This Registration Statement registered $50 million of securities which may be issued by the Company from time to time in indeterminate amounts and times and at the discretion of the Company. The Company has utilized this Registration Statement to issue shares to fund a portion of the Company’s activities.

The Company requires substantial additional capital to finance its planned business operations and expects to incur operating losses in future periods due to the expenses related to the Company’s core businesses. The Company has not realized material revenue since it commenced doing business in the biotechnology sector, and it is not without doubt that it will be successful in generating revenues in the future in this sector.

The Company will continue to be dependent on outside capital to fund its research and operating expenditures for the foreseeable future. If the Company fails to generate positive cash flows or fails to obtain additional capital when required, the Company may need to modify, delay or abandon some or all of its business plans.

Management Goals and Strategy

The Company's first goal is to ensure that the success engendered in the previous Phase 1/2 pancreatic cancer clinical trials can be built upon and advanced. The Company’s overall goal is to have the Company become an industry-leading biotechnology company.

The strategy of the Company to achieve its goals includes several primary components:

NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES

Unaudited Financial Statements

The accompanying unaudited consolidated financial statements have been prepared in accordance with GAAP for interim financial information and pursuant to the instructions to Form 10-Q and Article 10 of Regulation S-X. While these statements reflect all normal recurring adjustments which are, in the opinion of management, necessary for fair presentation of the results of the interim period, they do not include all of the information and footnotes required by GAAP for complete financial statements. The unaudited interim financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K which contains the audited financial statements and notes thereto, together with Management’s Discussion and Analysis, for the fiscal year ended April 30, 2014. The interim results for the nine months ended January 31, 2015 are not necessarily indicative of the results for the full fiscal year.

Management further acknowledges it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting controls and preventing and detecting fraud. The Company's system of internal accounting control is designed to ensure, among other items, that transactions are recorded and valid and in the proper period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the Company for the respective periods being presented.

Principles of Consolidation

The accompanying financial statements include the accounts of the Company and its subsidiaries as of January 31, 2015, Viridis Biotech, Inc. (formerly known as Medical Marijuana Services, Inc.), Nuvilex Europe Limited (to be renamed PharmaCyte Biotech Europe Limited), Nuvilex Australia Private Limited (to be renamed PharmaCyte Biotech Australia Private Limited) and Bio Blue Bird. All significant inter-company balances and transactions have been eliminated in consolidation. See Note 4 for further discussion on consolidation.

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes. There were no cash equivalents as of January 31, 2015.

Segment Reporting

ASC Topic 280, “Segment Report,” requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance. ASC Topic 280 has no effect on the Company’s consolidated financial statements as the Company consists of one reportable business segment. 

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Property and Equipment

Property and equipment are recorded at cost. Expenditures that increase the useful lives or capacities of the plant and equipment are capitalized. Expenditures for repairs and maintenance are charged to income as incurred. Depreciation is provided using the straight-line method over the estimated useful lives as follows:

Goodwill and other Indefinite-Lived Intangibles

The Company records the excess of purchase price over the fair value of the identifiable net assets acquired as goodwill and other indefinite-lived intangibles. The Fair Accounting Standards Board (“FASB”) standard on goodwill and other intangible assets prescribes a two-step process for impairment testing of goodwill and indefinite-lived intangibles, which is performed annually and when an event triggering impairment may have occurred. The first step tests for impairment, while the second step, if necessary, measures the impairment. The Company has elected to perform its annual analysis at the end of its reporting year.

Valuation of Long-Lived Assets

The Company accounts for the valuation of long-lived assets under the FASB standard for accounting for the impairment or disposal of Long-Lived Assets. The FASB standard requires that long-lived assets and certain identifiable intangible assets be reviewed for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of the long-lived assets is measured by a comparison of the carrying amount of the asset to future undiscounted net cash flows generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the estimated fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value, less cost to sell.

Functional Currency

The accounts of Bio Blue Bird are maintained in Euros. The accounts of this foreign subsidiary were translated into US dollars in accordance with ASC Topic 830 “Foreign Currency Matters.” According to ASC Topic 830: (i) all assets and liabilities were translated at the exchange rate on the balance sheet dates; (ii) stockholders’ equity is translated at historical rates; and (iii) statement of operation items are translated at the weighted average exchange rate for the period. The resulting translation adjustments are reported under other comprehensive income in accordance with ASC Topic 220, “Comprehensive Income.” Gains and losses resulting from the translations of foreign currency transactions and balances are reflected in the statements of income.

Foreign Currency Transactions and Comprehensive Income

GAAP requires that recognized revenue, expenses, gains and losses be included in net income. Certain statements, however, require entities to report specific changes in assets and liabilities, such as gain or loss on foreign currency translation, as a separate component of the equity section of the balance sheet. Such items, along with net income, are components of comprehensive income. Translation gains are classified as an item of accumulated other comprehensive income in the stockholders’ equity section of the unaudited Consolidated Balance Sheet.

Basic and Diluted Earnings (Loss) per Share

Basic and diluted earnings per share is calculated using the weighted-average number of common shares outstanding during the period without consideration of the dilutive effect of stock warrants, convertible notes and convertible preferred shares.

Fair Value of Financial Instruments

For certain of the Company’s non-derivative financial instruments, including cash and cash equivalents, receivables, accounts payable and other accrued liabilities, the carrying amount approximates fair value due to the short-term maturities of these instruments. The estimated fair value of long-term debt is based primarily on borrowing rates currently available to the Company for similar debt issues. The fair value approximates the carrying value of long-term debt.

Accounting Standards Codification (“ASC”) Topic 820, “Fair Value Measurements and Disclosures,” requires disclosure of the fair value of financial instruments held by the Company. ASC Topic 825, “Financial Instruments,” defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows:

The following presents the gross value of assets and liabilities that were measured and recognized at fair value as of January 31, 2015.

Effective October 1, 2008, the Company adopted ASC subtopic 820-10, Fair Value Measurements and Disclosures ("ASC 820-10") and Accounting Standards Codification subtopic 825-10, Financial Instruments ("ASC 825-10"), which permits entities to choose to measure many financial instruments and certain other items at fair value. Neither of these statements had an impact on the Company's financial position, results of operations or cash flows. The carrying value of cash, accounts payable and accrued expenses, as reflected in the balance sheets, approximate fair value because of the short-term maturity of these instruments.

Recent Accounting Pronouncements

In April 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360).” ASU 2014-08 amends the requirements for reporting discontinued operations and requires additional disclosures about discontinued operations. Under the new guidance, only disposals representing a strategic shift in operations or that have a major effect on the Company's operations and financial results should be presented as discontinued operations. This new accounting guidance is effective for annual periods beginning after December 15, 2014. The Company is currently evaluating the impact of adopting ASU 2014-08 on the Company's results of operations or financial condition.

On February 26, 2014, the FASB affirmed changes in a November 2013 Exposure Draft, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, and directed the staff to draft a final Accounting Standards Update for vote by the FASB. This is intended to reduce the cost and complexity in financial reporting by eliminating inception-to-date information from the financial statements of development stage entities.

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

Revenue Recognition

Sales of products and related costs of products sold are recognized when: (i) persuasive evidence of an arrangement exists; (ii) delivery has occurred; (iii) the price is fixed or determinable; and (iv) collectability is reasonably assured. These terms are typically met upon the prepayment or invoicing and shipment of products.

Income Taxes

Deferred taxes are calculated using the liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

In June 2006, the FASB interpreted its standard for accounting for uncertainty in income taxes, an interpretation of accounting for income taxes. This interpretation clarifies the accounting for uncertainty in income taxes recognized in an entity’s financial statements in accordance the minimum recognition threshold and measurement attributable to a tax position taken on a tax return is required to be met before being recognized in the financial statements.

The FASB’s interpretation had no material impact on the Company’s financial statements for the quarter ended October 31, 2014 or the year ended April 30, 2014. Current tax laws limit the amount of loss available to be offset against future taxable income when a substantial change in ownership occurs. Therefore, the amount available to offset future taxable income may be limited. No tax benefit has been reported in the financial statements because the Company believes the carry forwards may expire unused, although acquisition of sufficient operating capital to complete the acquisition of all of the assets of SG Austria may change this. Accordingly, the potential tax benefits of the loss carry forwards are offset by a valuation allowance of the same amount.

Research and Development Costs

Expenditures for research and development are expensed as incurred. Such costs are required to be expensed until the point that technological feasibility is established.

Concentration of Credit Risk

The Company has no significant off-balance-sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign hedging arrangements. The Company maintains the majority of its cash balances with one financial institution in the form of demand deposits.

NOTE 4 – BUSINESS ACQUISITION

The Company completed the purchase of Bio Blue Bird on April 30, 2014. Shares for both Austrianova Singapore and the Company originally held in escrow under the SG Austria APA have been released from escrow and returned to the respective original owners, with the 100,000,000 shares of common stock having been returned to the treasury of the Company. Bio Blue Bird is now a wholly owned subsidiary of the Company.

NOTE 5 – DEBT

In February, 2014, the Company settled its obligation to pay $20,000 plus $6,000 of accrued interest to a note holder with the issuance of 250,000 shares of common stock. The shares were valued at $45,500 using the closing share price of the common stock on the day of issuance resulting in a loss on settlement of debt of $19,500.

NOTE 6 – COMMON STOCK TRANSACTIONS

As of the quarter ended January 31, 2015, the Company issued 2,600,000 shares of common stock to officers as part of their compensation agreements dating back to September 1, 2013. The non-cash expense for this share issuance was accrued in previous periods and totals $613,790. In addition, the Company issued 400,000 shares of common stock to officers as part of their compensation agreements. The shares were valued using the closing share price of the common stock on the date the accrual of the compensation for a total of a non-cash expense of $87,200.

As of the quarter ended January 31, 2015, the Company issued 1,284,150 shares of common stock to consultants. The non-cash expense for this share issuance totals $244,206. In addition, the Company accrued but has not yet issued 500,000 shares of common stock to a consultant for a non-cash expense of $123,500.

All shares were issued without registration under the Securities Act in reliance upon the exemption afforded by Section 4(a)(2) of the Securities Act.

As of the quarter ended January 31, 2015, the Company issued 5,159,392 registered shares of common stock resulting in net proceeds of $868,877,

NOTE 7 – PREFERRED STOCK

The Company has one series of preferred stock designated as "Series E Preferred Stock." The Series E Preferred Stock has the following features:

During the year ended April 30, 2014, a shareholder converted 8,500 shares of the Company’s Series E Preferred Stock into 54,000,000 shares of common stock. These shares were valued using the closing share price of the common stock on the day of issuance for a total of $6,475,000 resulting in a loss on conversion of $5,895,000.

Holders of Series E Preferred Stock have specific rights to be paid in cash out of the assets of the Company prior to any junior class of common stock. As a result of the obligations for Series E Preferred Stock, the Company has determined these redemption features have the potential to be outside the control of the Company and, therefore, the Company has classified the Series E Preferred Stock outside of shareholder’s equity in accordance with ASC 480 regarding instruments with debt and equity features. Thus, the full value for the convertible Series E Preferred Stock was recorded outside of stockholders’ equity in the accompanying unaudited consolidated balance sheet.

NOTE 8 - STOCK OPTIONS

As of January 31, 2015, the Company issued 25,000,000 options to purchase Shares at an exercise price of $0.19 per Share. All 25,000,000 options were fully vested upon issuance.

The following is a summary of stock option activity:

The assumptions used in calculating the fair value of options granted using the Black-Scholes option- pricing model for options granted are as follows:

The exercise price for options outstanding at January 31, 2015:

For options granted during the period ended January 31, 2015 where the exercise price equaled the stock price at the date of the grant, the weighted-average fair value of such options was $0.172 and the weighted-average exercise price of such options was $0.19.  No options were granted during 2014, where the exercise price was less than the stock price at the date of the grant or the exercise price was greater than the stock price at the date of grant.

NOTE 9 – WARRANTS

A summary of the status of the Company's outstanding warrants for common stock as of January 31, 2015 and April 30, 2014 and changes during the periods is presented below:

On January 21, 2014, the Company began the implementation of its “Warrant Conversion Program.” The program consists of having every warrant holder of a Class A warrant convert his or her Class A warrants (with an exercise price of $0.075 per share) into shares of common stock and receive an equal number of new Class D warrants (with an exercise price of $0.25 per share). As of October 31, 2014, 18,755,200 Class A warrants and 2,318,000 Class B warrants were exercised for total cash proceeds of $1,658,880. On September 1, 2014, the Company granted 854,308 warrants to purchase common stock as part of the Warrant Conversion Program. This resulted in an expense of $100,000 under a consulting services agreement to facilitate the Warrant Conversion Program. This expense was included in general and administrative expense.

NOTE 10 – LEGAL PROCEEDINGS

The Company is not currently a party to any material pending legal proceedings. There are no material legal proceedings to which any property of the Company is subject.

NOTE 11 – RELATED PARTY TRANSACTIONS

As of January 31, 2015 and 2014 the Company owed Robert F. Ryan, the Company’s former Chief Scientific Officer, $0 and $143,859 of principal and $0 and $33,960 of accrued interest, respectively, to an officer. The loan accrued interest at 8%. The principal was paid in full along with all accrued interest as part of the settlement agreement dated September 19, 2014.

NOTE 12 – SIGNIFICANT EVENTS

As discussed above, the Company acquired 100% of the shares and assets of Bio Blue Bird, including its intellectual property related to the “Cell-in-a-Box^® live cell encapsulation technology. In that same transaction, the Company also received a 14.5% ownership in SG Austria. The Company also entered into the Diabetes Licensing Agreement with Austrianova Singapore for the treatment of diabetes utilizing the Cell-in-a-Box^® technology. Under the Diabetes Licensing Agreement, the Company was granted an exclusive worldwide license to use the Cell-in-a-Box^® trademark and its associated technology specifically to treat diabetes. In addition, the Company entered into a Cannabis Licensing Agreement for the treatment of diseases using the Cell-in-a-Box^® technology in combination with cannabinoids. Under the Cannabis Licensing Agreement, the Company was granted an exclusive worldwide license to use the Cell-in-a-Box^® trademark and its associated technology for the treatment of diseases using this combination. The Company has retained Vantage Point Advisors, Inc. (“VPAI”), to perform a valuation analysis of its contingent payment liability associated with the future milestone and royalty payments stemming from the Diabetes Licensing Agreement and the Cannabis Licensing Agreement. The Company has also retained VPAI to perform a valuation analysis of its 14.5% ownership interest in SG Austria. These valuations are currently underway. Based upon the results of these valuations, the Company will adjust the value of its assets as required.

NOTE 13 – SUBSEQUENT EVENTS

The Company has performed an evaluation of subsequent events in accordance with ASC Topic 855, noting no additional subsequent events other than those noted below.

On March 11, 2015, effective as of January 1, 2015, we entered into an Executive Compensation Agreement with Kenneth L. Waggoner (“Waggoner Compensation Agreement”), our Chief Executive Officer, President and General Counsel. The Waggoner Compensation Agreement is for a term of two years with annual extensions thereof unless the Company or Mr. Waggoner provide 90 days written notice of termination. The Agreement provides that Mr. Waggoner will be employed as a member of our Board of Directors, as our Chief Executive Officer, President and General Counsel and as Chief Executive Officer and General Counsel of Viridis Biotech, Inc., our wholly-owned subsidiary. Mr. Waggoner will be paid a base salary of $180,000 subject to annual increases in the discretion of our Compensation Committee.

As previously disclosed, subject to Mr. Waggoner entering into the Waggoner Compensation Agreement, in March of 2014, the Board granted Mr. Waggoner 10,000,000 shares of our Common Stock. On March 11, 2015, Mr. Waggoner was granted 2,400,000 shares of Common Stock vesting at the rate of 600,000 shares per quarter with an identical grant to be made on January 1, 2016. Further, as previously disclosed, subject to Mr. Waggoner entering into the Waggoner Compensation Agreement, on March 11, 2015, Mr. Waggoner was granted a stock option to purchase up to 10,000,000 shares of Common Stock at a price of $0.11 per share, the fair market value on the date of grant, and on March 11, 2015, was granted a second stock option to purchase up to 2,400,000 shares at a price of $0.11 per share, the fair market value on the date of grant, with vesting at the rate of 200,000 shares per month. On January 1, 2016, Mr. Waggoner will be granted another stock option to purchase up to 2,400,000 shares at the fair market value on the date of grant with the same vesting schedule.

On March 11, 2015, effective as of January 1, 2015, we entered into an Executive Compensation Agreement with Dr. Gerald W. Crabtree (“Crabtree Compensation Agreement”), our Chief Operating Officer. The Crabtree Compensation Agreement is for a term of two years with annual extensions thereof unless the Company or Dr. Crabtree provide 90 days written notice of termination. The Crabtree Compensation Agreement provides that Dr. Crabtree will be employed as a member of our Board of Directors, as our Chief Operating Officer and as the Chief Operating Officer of Viridis Biotech, Inc., our wholly-owned subsidiary. Dr. Crabtree will be paid a base salary of $156,000 subject to annual increases in the discretion of our Compensation Committee.

As previously disclosed, subject to Dr. Crabtree entering into the Crabtree Compensation Agreement, in March of 2014, the Board granted Dr. Crabtree 10,000,000 shares of our Common Stock. On March 11, 2015, Dr. Crabtree was granted 1,200,000 shares of Common Stock vesting at the rate of 300,000 shares per quarter with an identical grant to be made on January 1, 2016. Further, as previously disclosed, subject to Dr. Crabtree entering into the Crabtree Compensation Agreement, on March 11, 2015, Dr. Crabtree was granted a stock option to purchase up to 10,000,000 shares of Common Stock at a price of $0.11 per share, the fair market value on the date of grant, and on March 11, 2015, was granted a second stock option to purchase up to 2,400,000 shares at a price of $0.11 per share, the fair market value on the date of grant, with vesting at the rate of 200,000 shares per month. On January 1, 2016, Dr. Crabtree will be granted another stock option to purchase up to 2,400,000 shares at the fair market value on the date of grant with the same vesting schedule.

On February 20, 2015, the Company made a payment of $300,000 to Austrianova Singapore pursuant to the Cannabis Licensing Agreement.

From February 1, 2015 to March 13, 2015, the Company sold 4,310,188 shares of common stock under the S-3 Registration Statement. The issuance of the shares provided the Company approximately $520,553.

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.

This following information specifies certain forward-looking statements of our management.  Forward-looking statements are statements that estimate the happening of future events and are not based on historical fact.  Forward-looking statements may be identified by the use of forward-looking terminology, such as “may”, “shall”, “could”, “expect”, “estimate”, “anticipate”, “predict”, “probable”, “possible”, “should”, “continue”, or similar terms, variations of those terms or the negative of those terms.   Forward-looking statements should not be read as a guarantee of future performance or results and may not be accurate indications of when such performance or results will be achieved. Forward-looking statements are based on information we have when those statements are made or management’s good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. The forward-looking statements specified in the following information have been compiled by our management on the basis of assumptions made by management and considered by management to be reasonable. Our future operating results, however, are impossible to predict, and no representation, guaranty, or warranty is to be inferred from those forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements.

Forward-looking statements include, but are not limited to, the following:

Results of Operations for the Nine Months Ended January 31, 2015 and 2014

The Company (in this Report “Company,” “PharmaCyte Biotech,” “we,” “us” and “our” refer to PharmaCyte Biotech, Inc. and, where appropriate, its subsidiaries), successfully completed the acquisition of a biotechnology company through its acquisition of Bio Blue Bird AG (“Bio Blue Bird”) effective June 25, 2013. Bio Blue Bird is now a wholly-owned subsidiary of the Company that holds the exclusive worldwide licensing rights to the use of the Cell-in-a-Box^® live cell encapsulation technology for treating pancreatic cancer.

We are a biotechnology company bringing to market scientifically derived products designed to improve the health, condition and well-being of those who use them. Our focus for the present and immediate future is in the oncology and diabetes arenas. We are in the process of developing and preparing to commercialize treatments for cancer and diabetes based upon a proprietary cellulose-based live-cell encapsulation technology known as Cell-in-a-Box^®. We plan to use this unique and patented technology as a platform on which to build treatments for several types of cancer, including advanced, inoperable pancreatic cancer, and diabetes.

Our treatment for pancreatic cancer involves low doses of the well-known anticancer prodrug ifosfamide, together with encapsulated live-cells, which convert ifosfamide into its active or “cancer-killing” form. These capsules are placed as close to the cancerous tumor as possible to enable the delivery of the highest levels of the cancer-killing drug at the source of the cancer.

We are also working towards improving the quality of life for patients with advanced pancreatic cancer and on treatments for other types of abdominal cancers using the Cell-in-a-Box^® technology.

In addition, the Company is developing treatments for cancer based upon the chemical constituents of the Cannabis plant, knows as cannabinoids. In doing so, the Company is examining ways to exploit the benefits of Cell-in-a-Box^® technology in optimizing the anticancer effectiveness of cannabinoids, while minimizing or outright eliminating the debilitating side effects usually associated with cancer treatments. This provides the Company the opportunity to develop “green” approaches to fighting deadly diseases, such as cancer of the pancreas, brain and breast, which affect hundreds of thousands of individuals worldwide every year.

We are currently preparing for a Phase 2b clinical trial with our pancreatic cancer treatment in patients with advanced, inoperable pancreatic cancer that will be conducted in Australia. That clinical trial is expected to commence in the third quarter of 2015. We are also preparing for clinical trials of that same treatment to study its effects on major symptoms associated with pancreatic cancer. The first two clinical trials related to the symptoms associated with pancreatic cancer involve the unbearable pain from advanced pancreatic cancer and the accumulation of malignant ascites fluid that usually occurs with this disease. These clinical trials are expected to commence in the third quarter of 2015 and will be conducted in the United States. A preclinical study on ascites has been completed in the United States and a follow-up study is currently underway.

On November 24, 2014, the Company entered into a Licensing Agreement (“Cannabis Licensing Agreement”) with Austrianova Singapore Pte Ltd ("Austrianova Singapore"), a subsidiary of SG Austria Private Limited and an entity partially owned by us, providing the Company with an exclusive world-wide royalty-bearing license (with the right to sublicense) to use the Cell-in-a-Box^® live cell encapsulation technology and trademark with genetically modified non-stem cells which are designed to activate cannabinoids for research, development and commercialization of treatments for diseases and medical conditions. The Cannabis Licensing Agreement is effective as of December 1, 2014. The license royalty rate is 10% on direct sales and 20% on sales by a sub-licensee, with an initial license fee of $2 million due and payable by the Company to Austrianova Singapore by no later than June 30, 2015. The Company has paid Austrianova Singapore $800,000 of the initial license fee and will make periodic monthly payments of the balance in amounts to be agreed upon between the parties prior to each such payment being made. In addition, the following milestone payments are due as indicated:

Selling, General and Administrative Expenses

For the nine months ended January 31, 2015, sales and marketing expense decreased by $94,100 to $230,500 from $324,600 for the same period in the prior year. The decrease is a result of our efforts to have a more cost effective marketing strategy.

For the nine months ended January 31, 2015, research and development expenses increased by $621,567 from $0 for the same period in the prior year. The increase is a result of the Company’s efforts to research medical uses of the licenses acquired in its acquisitions.

For the nine months ended January 31, 2015, compensation expense increased by $3,863,312 to $5,298,372, as compared to $1,435,060 for the same period in the prior year. The increase is a result of additional stock options being issued for compensation during the current period.

For the nine months ended January 31, 2015, legal and professional fees increased by $609,840 to $850,571 from $240,731 for the same period in the prior year. The increase is attributed to an increase in attorney fees.

General and administrative expenses during the nine months ended January 31, 2015 compared to the nine months ended January 31, 2014, increased by $1,754,193 to $2,284,143 as compared to $529,950 in the prior period. The increase can be attributed to increased travel expense, investor relations, warrants issued to consultants that were valued at $100,000 and other consulting service expense. This expense also includes the $297,500 non-cash expense from the issuance of common stock to Lincoln Park in accordance with the provisions of a Mutual Termination and Release Agreement releasing all parties from certain obligation under a Stock Purchase Agreement between the parties.

During the nine months ended January 31, 2015, our net loss decreased by $3,676,662 to $7,106,547, as compared to $10,783,209 in the prior period. The decrease in net loss can mainly be attributed to the decrease in losses from conversion of preferred stock and settlement of debt netted with an increase in compensation expense associated with stock options issued during the current period.

Liquidity and Capital Resources

For the nine months ended January 31, 2015, the Company used cash of $2,968,672 in operations, used cash of $500,000 from investing activities and provided cash of $811,018 from financing activities.

On May 28, 2014, we entered into a financial advisory, offering and at the market offering engagement agreement (“Chardan Agreement”), with Chardan Capital Markets, LLC (“Chardan”) pursuant to which Chardan agreed to use its reasonable best efforts to act as our sales agent in connection with the sale of common stock in “at the market” or privately negotiated transactions of up to $50 million, depending upon market conditions and at our sole discretion. In connection with such transactions, we agreed to pay Chardan: (i) a cash fee of 3% of the gross proceeds from the sale of any shares of common stock sold in an “at-the-market” offering and (ii) a cash fee of 7% of the aggregate sales price of any distinct blocks of common stock sold under the Chardan Agreement, plus five-year warrants representing 5% of the number of shares of common stock sold. In addition, we agreed to reimburse certain expenses of Chardan in an amount not to exceed $15,000.

On October 17, 2014, we filed a Prospectus (“Prospectus”) with the United States Securities and Exchange Commission (“SEC”) pursuant to which we disclosed that we may offer and sell, from time to time in one or more offerings, any combination of common stock, preferred stock, debt securities, warrants or units having a maximum aggregate offering price of $50,000,000. We also explain that when we decide to sell a particular class or series of securities, we would provide specific terms of the offered securities in a Prospectus Supplement.

On November 12, 2014, we filed a Prospectus Supplement (“Prospectus Supplement”) with the SEC. The Prospectus Supplement described the terms of the Chardan Agreement and added to and updated information contained in the Prospectus. We also described that the sales of our common stock, if any, under the Prospectus Supplement and the Prospectus would be made by any method permitted that is deemed an “at the market” offering as defined in Rule 415 under the Securities Act of 1933, as amended (“Securities Act”), including by means of ordinary brokers’ transactions at market prices, in block transactions or as otherwise agreed by Chardan and us. Under this arrangement, Chardan will act as our sales agent using commercially reasonable efforts consistent with its normal trading and sales practices.

On December 2, 2014, we amended the Prospectus Supplement with the SEC. In the amended Prospectus Supplement, we disclosed that the sales of our common stock under the Prospectus Supplement may include sales at a fixed price as agreed by Chardan and us. Under this arrangement, Chardan will act as our sales agent using commercially reasonable efforts consistent with its normal trading and sales practices.

Item 3.  Quantitative and Qualitative Disclosures about Market Risk.

Not required for smaller reporting companies.

Item 4.  Controls and Procedures.

The Company's management, including the Chief Executive Officer, President and General Counsel and interim Chief Financial Officer of the Company, as its principal and financial executive officer (Principal Officer”), evaluated the effectiveness of the Company's “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (“Exchange Act”). Based upon this evaluation, the Principal Officer has concluded that, as of January 31, 2015, the Company's disclosure controls and procedures were effective for the purpose of ensuring that the information required to be disclosed in the reports that the Company files or submits to the Securities and Exchange Commission (“SEC”) pursuant to the Exchange Act is recorded, processed, summarized and reported within the time period specified by the SEC’s rules and forms and is accumulated and communicated to the Company's management, including its Principal Officer, as appropriate to allow timely decisions regarding required disclosures.

Although the management of the Company, including the Principal Officer, believes that our disclosure controls and internal controls currently provide reasonable assurance that our desired control objectives have been met, management does not expect that our disclosure controls or internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

PART II – OTHER INFORMATION

Item 1.  Legal Proceedings.

The Company is not currently a party to any material pending legal proceedings. There are no material legal proceedings to which any property of the Company is subject.

Item 1A.  Risk Factors.

In addition to the other information set forth in this Report, you should carefully consider the factors discussed in Part I, Item 1A., “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended April 30, 2014 (as amended) and in the Prospectus Supplement. The information set forth in these Reports could materially affect the Company’s business, financial position and results of operations. There are no material changes from the risk factors set forth in Part I, Item 1A, “Risk Factors,” of our Annual Report on Forms 10-K for the fiscal year ended April 30, 2014 and in the Prospectus Supplement, other than as set forth below:

Our Recent Entry into a Significant Licensing Agreement Could Adversely Affect our Liquidity and our Ability to Execute our Research and Development Strategy.

On November 24, 2014, the Company entered into the Cannabis Licensing Agreement. The use of our existing capital resources to make payments under the Cannabis Licensing Agreement will accelerate our need for additional capital to continue our operations. Failure to obtain such capital or generate such operating revenues would have an adverse impact on our financial position, operations and ability to continue as a going concern unless we are able to extend the payment provisions of the Cannabis Licensing Agreement. There can be no assurance that any such extension, or additional private or public financing (including debt or equity financing), will be available as needed or if available, on terms favorable to us. Additionally, any future equity financing may be dilutive to stockholders’ present ownership levels and such additional equity securities may have rights, preferences, or privileges that are senior to those of our existing common stock. Furthermore, debt financing, if available, may require payment of interest and potentially involve restrictive covenants that could impose limitations on the flexibility of our ability to operate. The payment terms of the Cannabis Licensing Agreement taken in conjunction with any difficulty or failure to successfully obtain additional funding may jeopardize our ability to continue our business and operations.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.

In the quarter ended January 31, 2015, the Company issued 2,600,000 shares of common stock to officers pursuant to their compensation agreements dating back to September 1, 2013. The non-cash expense for this share issuance was accrued in previous periods and totals $613,790. In addition, the Company issued 400,000 shares of common stock to officers as part of their compensation agreements. The shares were valued using the closing share price of the common stock on the date the accrual of the compensation for a total of a non-cash expense of $87,200.

In the quarter ended January 31, 2015, the Company issued 1,284,150 shares of common stock to consultants. The non-cash expense for this share issuance totals $244,206. In addition, the Company accrued but has not yet issued 500,000 shares of common stock to a consultant for a non-cash expense of $123,500. 

All shares were issued without registration under the Securities Act in reliance upon the exemption afforded by Section 4(a)(2) of the Securities Act.

The issuance and sale of the restricted shares of common stock to the aforementioned entities and individuals in each of the transactions described above was made in reliance on exemptions from registration provided for in Section 4(a)(2) of the Securities Act, including Regulation D promulgated thereunder.

Item 3.  Defaults upon Senior Securities.

None.

Item 4.  Mine Safety Disclosure.

Not applicable.

Item 5.  Other Information.

(a)   None.

(b)   Not applicable.

Item 6.  Exhibits.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Company has duly caused this Report to be signed by the following persons on behalf of the Company and in the capacities and on the dates indicated.

PharmaCyte Biotech, Inc.