| 8. Restatement of Condensed Consolidated Financial Statements |
The Company
has identified an error resulting in the understatement of the non-cash deemed dividend – beneficial conversion feature
in the amount of $129,442 for the six months ended June 30, 2013 and the cumulative period from July 28, 2006 (Inception) to June
30, 2013. The following table illustrates the effect on each line item as of and for the six months ended June 30,
2013 and the cumulative period from July 28, 2006 (Inception) to June 30, 2013:
| |
|
As
Previously
Reported
($) |
|
|
As
Restated
($) |
|
| Condensed Consolidated Balance Sheets as of June 30, 2013 (Unaudited) |
|
|
|
|
|
|
| Additional paid-in capital |
|
|
47,564,257 |
|
|
|
47,693,699 |
|
| Deficit accumulated during the development stage |
|
|
(49,771,659 |
) |
|
|
(49,901,101 |
) |
| Condensed Consolidated Statements of Operations for the Six Months
Ended June 30, 2013 (Unaudited) |
|
|
|
|
|
|
|
|
| Deemed dividend – beneficial conversion
feature |
|
|
(180,502 |
) |
|
|
(309,944 |
) |
| Net loss attributable to common shareholders |
|
|
(3,398,425 |
) |
|
|
(3,527,867 |
) |
| Net loss per share – basic and diluted |
|
|
(0.28 |
) |
|
|
(0.29 |
) |
| Condensed Consolidated Statements of Operations Cumulative Period
from July 28, 2006 (Inception) through June 30, 2013 (Unaudited) |
|
|
|
|
|
|
|
|
| Deemed dividend – beneficial conversion
feature |
|
|
(180,502 |
) |
|
|
(309,944 |
) |
| Net loss attributable to common shareholders |
|
|
(49,771,659 |
) |
|
|
(49,901,101 |
) |
| Condensed Consolidated Statement of Changes in Stockholders’
Deficit for the Six Months Ended June 30, 2013 (Unaudited) |
|
|
|
|
|
|
|
|
| Additional Paid-in Capital |
|
|
|
|
|
|
|
|
| Deemed dividend related to beneficial conversion
feature of Series A non-voting preferred stock |
|
|
180,502 |
|
|
|
309,944 |
|
| Balance at June 30, 2013 |
|
|
47,564,257 |
|
|
|
47,693,699 |
|
| Condensed Consolidated Statement of Changes in Stockholders’
Deficit for the Six Months Ended June 30, 2013 (Unaudited) |
|
|
|
|
|
|
|
|
| Deficit Accumulated During the Development Stage |
|
|
|
|
|
|
|
|
| Deemed dividend related to beneficial conversion
feature of Series A non-voting preferred stock |
|
|
(180,502 |
) |
|
|
(309,944 |
) |
| Balance at June 30, 2013 |
|
|
(49,771,659 |
) |
|
|
(49,901,101 |
) |
| Condensed Consolidated Statement of Cash Flows For the Six Months
Ended June 30, 2013 (Unaudited) |
|
|
|
|
|
|
|
|
| Supplemental Disclosure of Non-Cash Financing Activities |
|
|
|
|
|
|
|
|
| Deemed dividend – beneficial conversion
feature |
|
|
180,502 |
|
|
|
309,944 |
|
| Condensed Consolidated Statement of Cash Flows For the Cumulative
Period from July 28, 2006 (Inception) through June 30, 2013 (Unaudited) |
|
|
|
|
|
|
|
|
| Supplemental Disclosure of Non-Cash Financing Activities |
|
|
|
|
|
|
|
|
| Deemed dividend – beneficial conversion
feature |
|
|
180,502 |
|
|
|
309,944 |
|
| |
|
|
|
|
|
|
|
|
The
Company has identified an error resulting in decreases in liabilities, deficit accumulated during the development stage and stockholders’
deficit at June 30, 2013, and decreases in research and development expense and net loss for the three and six months ended June
30, 2013 and 2012 and for the cumulative period from July 26, 2006 (Inception) through June 30, 2013. The following
table illustrates the effect on each line item as of and for the three and six months ended June 30, 2013 and 2012 and the cumulative
period from July 28, 2006 (Inception) to June 30, 2013:
| |
|
June
30, 2013 |
|
|
June
30, 2012 |
|
|
Cumulative
Period from July 28, 2006 (Inception) Through June 30, 2013 |
|
| |
|
As
Previously
Reported
($) |
|
|
As
Restated
($) |
|
|
As
Previously
Reported
($) |
|
|
As
Restated
($) |
|
|
As
Previously
Reported
($) |
|
|
As
Restated
($) |
|
| Balance Sheets (Unaudited): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Accounts payable |
|
|
1,489,143 |
|
|
|
1,394,143 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
| Accrued expense |
|
|
378,501 |
|
|
|
313,501 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
| Total current liabilities |
|
|
2,579,107 |
|
|
|
2,419,107 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
| Total Liabilities |
|
|
2,588,828 |
|
|
|
2,428,828 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Deficit
Accumulated During
the
Development Stage |
|
|
(49,901,101 |
) |
|
|
(49,741,101 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
| Total Stockholders’ Deficit |
|
|
(2,193,743 |
) |
|
|
(2,033,743 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Statement
of Operations
(Unaudited)
:
For
the Three Months Ended |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Research and development |
|
|
390,174 |
|
|
|
380,174 |
|
|
|
248,190 |
|
|
|
236,940 |
|
|
|
- |
|
|
|
- |
|
| Total Operating Expenses |
|
|
1,298,910 |
|
|
|
1,288,910 |
|
|
|
624,807 |
|
|
|
613,557 |
|
|
|
- |
|
|
|
- |
|
| Loss from Operations |
|
|
(1,298,910 |
) |
|
|
(1,288,910 |
) |
|
|
(624,807 |
) |
|
|
(613,557 |
) |
|
|
- |
|
|
|
- |
|
| Loss Before Income Taxes |
|
|
(1,960,871 |
) |
|
|
(1,950,871 |
) |
|
|
(624,215 |
) |
|
|
(612,965 |
) |
|
|
- |
|
|
|
- |
|
| Net Loss |
|
|
(1,960,871 |
) |
|
|
(1,950,871 |
) |
|
|
(624,215 |
) |
|
|
(612,965 |
) |
|
|
- |
|
|
|
- |
|
Net
Loss Attributable to
Common
Shareholders |
|
|
(1,960,871 |
) |
|
|
(1,950,871 |
) |
|
|
(624,215 |
) |
|
|
(612,965 |
) |
|
|
- |
|
|
|
- |
|
Net
Loss Per Common Share
Basic
and Diluted |
|
|
(0.15 |
) |
|
|
(0.15 |
) |
|
|
(0.05 |
) |
|
|
(0.05 |
) |
|
|
- |
|
|
|
- |
|
| For the Six Months Ended |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Research and development |
|
|
655,209 |
|
|
|
635,209 |
|
|
|
623,046 |
|
|
|
600,546 |
|
|
|
23,998,514 |
|
|
|
23,838,514 |
|
| Total Operating Expenses |
|
|
2,115,687 |
|
|
|
2,095,687 |
|
|
|
1,535,917 |
|
|
|
1,513,417 |
|
|
|
38,235,026 |
|
|
|
38,075,026 |
|
| Loss from Operations |
|
|
(2,115,687 |
) |
|
|
(2,095,687 |
) |
|
|
(1,535,917 |
) |
|
|
(1,513,417 |
) |
|
|
(38,235,026 |
) |
|
|
(38,075,026 |
) |
| Loss Before Income Taxes |
|
|
(3,217,923 |
) |
|
|
(3,197,923 |
) |
|
|
(1,534,376 |
) |
|
|
(1,511,876 |
) |
|
|
(50,365,932 |
) |
|
|
(50,205,932 |
) |
| Net Loss |
|
|
(3,217,923 |
) |
|
|
(3,197,923 |
) |
|
|
(1,534,376 |
) |
|
|
(1,511,876 |
) |
|
|
(49,591,157 |
) |
|
|
(49,431,157 |
) |
Net
Loss Attributable to
Common
Shareholders |
|
|
(3,527,867 |
) |
|
|
(3,507,867 |
) |
|
|
(1,534,376 |
) |
|
|
(1,511,876 |
) |
|
|
(49,901,101 |
) |
|
|
(49,741,101 |
) |
Net
Loss Per Common Share
–
Basic and Diluted |
|
|
(0.29 |
) |
|
|
(0.28 |
) |
|
|
(0.13 |
) |
|
|
(0.13 |
) |
|
|
- |
|
|
|
- |
|
Statement
of Cash Flows
Unaudited): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net loss |
|
|
(3,217,923 |
) |
|
|
(3,197,923 |
) |
|
|
(1,534,376 |
) |
|
|
(1,511,876 |
) |
|
|
(49,591,157 |
) |
|
|
(49,431,157 |
) |
| Accounts payable |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,380,180 |
|
|
|
1,285,180 |
|
Accrued
expenses and
accrued
interest |
|
|
70,420 |
|
|
|
50,420 |
|
|
|
(123,791 |
) |
|
|
(146,291 |
) |
|
|
393,578 |
|
|
|
328,578 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Deficit
Accumulated During the Development Stage |
|
|
Total
Stockholders’ Deficit |
|
| |
|
As
Previously
Reported
($) |
|
|
As
Restated
($) |
|
|
As
Previously
Reported
($) |
|
|
As
Restated
($) |
|
| Statement of Stockholders’ Deficit
(Unaudited): |
|
|
|
|
|
|
|
|
|
|
|
|
| Balance December 31, 2012 |
|
|
(46,373,234 |
) |
|
|
(46,233,234 |
) |
|
|
(475,376 |
) |
|
|
(335,376 |
) |
| Net loss |
|
|
(3,217,923 |
) |
|
|
(3,197,923 |
) |
|
|
- |
|
|
|
- |
|
| Balance June 30, 2013 |
|
|
(49,901,101 |
) |
|
|
(49,741,101 |
) |
|
|
(2,193,743 |
) |
|
|
(2,033,743 |
) |
|