þ
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QUARTERLY REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
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Nevada
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75-3254381
|
|
(State
or other jurisdiction of
incorporation
or organization)
|
(I.R.S.
Employer
Identification
No.)
|
|
1601
N. Sepulveda Blvd., #632,
Manhattan
Beach, CA
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90266
|
|
(Address
of principal executive offices)
|
(Zip
Code)
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Large
accelerated filer o
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Accelerated
filer o
|
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Non-accelerated
filer o
(Do not check if a smaller reporting company)
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Smaller
reporting company þ
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PART
I — FINANCIAL INFORMATION
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1
|
|||
Item 1.
Financial Statements (unaudited)
|
1
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|||
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of
Operations
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12
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|||
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
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15
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|||
Item 4.
Controls and Procedures
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15
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|||
PART
II — OTHER INFORMATION
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15
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|||
Item 1.
Legal Proceedings
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15
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|||
Item 1A.
Risk Factors
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15
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|||
Item 2.
Unregistered Sales of Equity Securities and Use of
Proceeds
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16
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|||
Item 3.
Defaults Upon Senior Securities
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16
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|||
Item 4.
[Removed and Reserved]
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16
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|||
Item 5.
Other Information
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16
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|||
Item 6.
Exhibits
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16
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|||
SIGNATURES
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17
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September
30,
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December
31,
|
|||||||
2010
|
2009
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|||||||
(unaudited)
|
||||||||
ASSETS
|
||||||||
CURRENT
ASSETS
|
||||||||
Cash
and cash equivalents
|
$
|
795,943
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$
|
8,257
|
||||
Deposit
|
150
|
150
|
||||||
Prepaid
expenses
|
5,000
|
-
|
||||||
TOTAL
CURRENT ASSETS
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801,093
|
8,407
|
||||||
INTANGIBLE
ASSETS
|
||||||||
Website,
net of accumulated depreciation of $347 and $2,442
|
1,734
|
1,225
|
||||||
Intellectual
property licenses
|
217,408
|
-
|
||||||
TOTAL
ASSETS
|
$
|
1,020,235
|
$
|
9,632
|
||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
CURRENT
LIABILITIES
|
||||||||
Accounts
payable
|
$
|
25,492
|
$
|
-
|
||||
Derivative
liability
|
546,730
|
-
|
||||||
Due
to director
|
-
|
23,120
|
||||||
TOTAL
CURRENT LIABILITIES
|
572,222
|
23,120
|
||||||
STOCKHOLDERS'
EQUITY
|
||||||||
Common
stock; $0.000041666 par value; 1,800,000,000 shares
authorized; 72,793,349 and 121,440,000 shares issued and outstanding,
respectively
|
3,033
|
5,060
|
||||||
Additional
paid-in capital
|
1,385,534
|
55,940
|
||||||
Accumulated
deficit
|
(940,554
|
)
|
(74,488
|
)
|
||||
TOTAL
STOCKHOLDERS' EQUITY
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448,013
|
(13,488
|
)
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|||||
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY
|
$
|
1,020,235
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$
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9,632
|
Three
Months Ended
September
30,
|
Nine
Months Ended
September
30,
|
Inception
on
September
17,
2007
to
September
30,
|
||||||||||||||||||
2010
|
2009
|
2010
|
2009
|
2010
|
||||||||||||||||
REVENUE
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||||
OPERATING
EXPENSES:
|
||||||||||||||||||||
General
and administrative
|
167,027
|
3,470
|
319,336
|
13,427
|
393,824
|
|||||||||||||||
LOSS
FROM OPERATIONS
|
(167,027
|
)
|
(3,470
|
)
|
(319,336
|
)
|
(13,427
|
)
|
$
|
(393,824
|
)
|
|||||||||
Fair
Value of Derivatives liability upon issuance
|
(563,348
|
) |
-
|
(563,348
|
) |
-
|
(563,348
|
) | ||||||||||||
Change
in fair value of derivative liability
|
16,618
|
|
-
|
16,618
|
|
-
|
16,618
|
|
||||||||||||
NET
LOSS
|
$
|
(713,757
|
)
|
$
|
(3,470
|
)
|
$
|
(866,066
|
)
|
$
|
(13,427
|
)
|
$
|
(940,554
|
)
|
|||||
NET
LOSS PER SHARE:
|
||||||||||||||||||||
BASIC
AND DILUTED
|
$
|
(0.01
|
)
|
$
|
(0.00
|
)
|
$
|
(0.01
|
)
|
$
|
(0.00
|
)
|
||||||||
WEIGHTED
AVERAGE SHARES OUTSTANDING:
|
||||||||||||||||||||
BASIC
AND DILUTED
|
72,002,038
|
121,440,000
|
85,165,525
|
121,440,000
|
Additional
|
Total
|
|||||||||||||||||||
Common
stock
|
paid-in
|
Accumulated
|
stockholders'
|
|||||||||||||||||
Shares
|
Amount
|
capital
|
Deficit
|
equity
|
||||||||||||||||
Initial
capitalization, sale of common stock to directors on September 17,
2007
|
96,000,000
|
$
|
4,000
|
$
|
4,000
|
$
|
-
|
$
|
8,000
|
|||||||||||
Private
placement closed December 31, 2007
|
25,440,000
|
1,060
|
51,940
|
53,000
|
||||||||||||||||
Net
loss for the period
|
-
|
-
|
-
|
(1,576
|
)
|
(1,576
|
)
|
|||||||||||||
Balance,
December 31, 2007
|
121,440,000
|
5,060
|
55,940
|
(1,576
|
)
|
59,424
|
||||||||||||||
Net
loss for the period
|
-
|
-
|
-
|
(57,140
|
)
|
(57,140
|
)
|
|||||||||||||
Balance,
December 31, 2008
|
121,440,000
|
5,060
|
55,940
|
(58,716
|
)
|
2,284
|
||||||||||||||
Net
loss for the period
|
-
|
-
|
-
|
(15,772
|
)
|
(15,772
|
)
|
|||||||||||||
Balance,
January 1, 2010
|
121,440,000
|
5,060
|
55,940
|
(74,488
|
)
|
(13,488
|
)
|
|||||||||||||
Shares
cancelled
|
(83,339,976
|
)
|
(3,472
|
)
|
3,472
|
-
|
-
|
|||||||||||||
Common
Stock sold in Private Placement at $0.03125 per share
|
12,799,968
|
533
|
364,467
|
365,000
|
||||||||||||||||
Common
Stock issued for intellectual property
|
20,960,016
|
873
|
216,535
|
217,408
|
||||||||||||||||
Fair
value of vesting of stock options
|
45,159
|
45,159
|
||||||||||||||||||
Common
Stock sold in Private Placement at $0.75 per share
|
933,341
|
39 |
|
699,961
|
700,000
|
|||||||||||||||
Net
loss for the period
|
(866,066
|
)
|
(866,066
|
)
|
||||||||||||||||
Balance,
September 30, 2010
|
72,793,349
|
$
|
3,033
|
$
|
1,385,534
|
$
|
(940,554
|
)
|
$
|
448,013
|
Nine months ended
September
30,
|
Inception
on
September 17,
2007
to
September
30,
|
|||||||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
2010
|
2009
|
2010
|
|||||||||
Net
loss
|
$
|
(866,066
|
)
|
$
|
(13,427
|
)
|
$
|
(940,554
|
)
|
|||
Adjustment
to reconcile net loss to net cash used in operating
activities:
|
||||||||||||
Amortization
|
347
|
999
|
3,122
|
|||||||||
Fair
value of vesting of stock options
|
45,159
|
- |
45,159
|
|||||||||
Loss
on website
|
2,125
|
- |
2,125
|
|||||||||
Fair
value of derivative liability on issuance
|
563,348
|
-
|
563,348
|
|||||||||
Gain
(loss) on fair value of derivative liability
|
(16,618
|
) |
-
|
(16,618
|
) | |||||||
Changes
in assets and liabilities:
|
||||||||||||
Prepaid
expenses
|
(5,000
|
)
|
(151
|
)
|
(5,000
|
)
|
||||||
Accounts
payable and accrued expenses
|
25,492
|
4,392
|
25,492
|
|||||||||
Deposit
|
-
|
-
|
(150
|
)
|
||||||||
Net
cash used in operating activities
|
(251,213
|
)
|
(8,187
|
)
|
(323,076
|
)
|
||||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||||
Website
|
(2,981
|
)
|
-
|
(6,981
|
)
|
|||||||
Net
cash used in investing activities
|
(2,981
|
)
|
-
|
(6,981
|
)
|
|||||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||||
Proceeds
from the issuance of common stock
|
1,065,000
|
-
|
1,126,000
|
|||||||||
Due
to director
|
(23,120
|
)
|
5,900
|
-
|
||||||||
Net
cash provided by financing activities
|
1,041,880
|
5,900
|
1,126,000
|
|||||||||
NET
INCREASE IN CASH AND CASH EQUIVALENTS
|
787,686
|
(2,287
|
)
|
795,943
|
||||||||
CASH
AND CASH EQUIVALENTS, Beginning of period
|
8,257
|
2,905
|
-
|
|||||||||
CASH
AND CASH EQUIVALENTS, End of period
|
$
|
795,943
|
$
|
618
|
$
|
795,943
|
||||||
SUPPLEMENTAL
DISCLOSURES OF NON-CASH INVESTING AND FINANCING
ACTIVITIES:
|
||||||||||||
Taxes
paid
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||
Interest
paid
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||
SUPPLEMENTAL
DISCLOSURES OF CASH FLOW INFORMATION:
|
||||||||||||
Common
stock issued for intellectual property
|
$
|
217,408
|
$
|
-
|
$
|
217,408
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Fair value of Derivative
Liability
|
$ | -0- | $ | -0- | $ | 546,730 | $ | 546,730 |
Number of
Options
|
Weighted
Average
Exercise
Price
|
|||||||
Balance
at January 1, 2010
|
—
|
$
|
—
|
|||||
Granted
|
1,150,000
|
$
|
0.03125
|
|||||
Exercised
|
—
|
$
|
—
|
|||||
Cancelled
|
—
|
$
|
—
|
|||||
Balance
at September 30, 2010
|
1,150,000
|
$
|
0.03125
|
Options Outstanding
|
Options
Exercisable
|
||||||||||||||
Weighted Average
Exercise Price
|
Number
Outstanding
|
Weighted Average
Remaining Contractual
Life (Years)
|
Weighted Average
Exercise Price
|
Number
Exercisable
|
|||||||||||
$
|
0.03125
|
1,150,000
|
7
|
$
|
0.03125
|
—
|
Number
of
Warrants
|
Weighted
Average
Exercise
Price
|
|||||||
Balance,
January 1, 2010
|
—
|
$
|
—
|
|||||
Granted
|
933,348
|
1.13
|
||||||
Exercised
|
—
|
|||||||
Balance
at September 30, 2010
|
933,348
|
$
|
1.13
|
September
30, 2010
(Unaudited)
|
September
17, 2010
(date
of issuance)
|
|||||||
Warrants: | ||||||||
Risk-free
interest rate
|
.80 | % | .80 | % | ||||
Expected
volatility
|
52.45 | % | 52.45 | % | ||||
Expected
life (in years)
|
4.96 years
|
5 years
|
||||||
Expected
dividend yield
|
0 | % | 0 | % | ||||
Fair
Value Warrants
|
$ | 546,730 | $ | 563,348 |
(a)
|
None.
|
(b)
|
There
were no changes to the procedures by which security holders may recommend
nominees to our board of directors.
|
GENESIS
BIOPHARMA, INC.
|
||
By:
|
/s/
Robert T. Brooke
|
|
Robert
T. Brooke
|
||
Date: November
16, 2010
|
Chief
Executive Officer
|
By:
|
/s/
Richard McKilligan
|
|
Richard
McKilligan
|
||
Date:
November 16, 2010
|
Chief
Financial Officer
|
Exhibit
No.
|
Description
|
|
2.1
|
Agreement and Plan of Merger between Freight Management Corp. (renamed Genesis Biopharma, Inc.) and Genesis Biopharma Inc. dated March 15, 2010 (1) | |
3.1
|
Articles
of Incorporation, as amended*
|
|
3.2
|
Bylaws
(2)
|
|
4.1
|
Form
of Series A Common Stock Purchase Warrant (3)
|
|
4.2
|
Form
of Series B Common Stock Purchase Warrant (3)
|
|
10.1
|
Form
of Private Placement Subscription Agreement (3)
|
|
31.1
|
Rule
13a-14(a)/15d-14(a) Certification of Chief Executive
Officer*
|
|
31.2
|
Rule
13a-14(a)/15d-14(a) Certification of Chief Financial
Officer*
|
|
32.1
|
Section
1350 Certification of Chief Executive Officer*
|
|
32.2
|
Section
1350 Certification of Chief Financial
Officer*
|
*
|
Filed
herewith
|
|
(1) | Incorporated by reference to Exhibit 10.1 to the Issuer’s Current Report on Form 8-K filed on March 19, 2010. | |
(2)
|
Incorporated
by reference to Exhibit 3.2 to the Issuer’s Registration Statement on Form
SB-2 filed on January 29, 2008.
|
|
(3)
|
Incorporated
by reference to the exhibit of the same number to the Issuer’s Current
Report on Form 8-K filed on September 23, 2010.
|
1.
|
I
have reviewed this quarterly report on Form 10-Q of Genesis Biopharma,
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
registrant as of, and for, the periods presented in this
report;
|
4.
|
The
registrant’s other certifying officer 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)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant 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 registrant, 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)
|
designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
c)
|
evaluated
the effectiveness of the registrant’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
|
d)
|
disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over financial
reporting; and
|
5.
|
The
registrant’s other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to
the registrant’s auditors and the audit committee of the registrant’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 registrant’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 registrant’s internal control
over financial reporting.
|
Date:
November 16, 2010
|
/s/
Robert T. Brooke
|
Robert
T. Brooke
|
|
Chief
Executive Officer (Principal Executive
Officer)
|
1.
|
I
have reviewed this quarterly report on Form 10-Q of Genesis Biopharma,
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
registrant as of, and for, the periods presented in this
report;
|
4.
|
The
registrant’s other certifying officer 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)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant 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 registrant, 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)
|
designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
c)
|
evaluated
the effectiveness of the registrant’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
|
d)
|
disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over financial
reporting; and
|
5.
|
The
registrant’s other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to
the registrant’s auditors and the audit committee of the registrant’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 registrant’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 registrant’s internal control
over financial reporting.
|
Date:
November 16, 2010
|
/s/
Richard McKilligan
|
Richard
McKilligan
|
|
Chief
Financial Officer (Principal Financial and Accounting
Officer)
|
(1)
|
The
Report fully complies with the requirements of Section 13(a) or 15(d) of
the Securities Exchange Act of 1934;
and
|
(2)
|
The
information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the
Company.
|
/s/
Robert T. Brooke
|
|
Robert
T. Brooke
|
|
Chief
Executive Officer (Principal Executive Officer)
|
|
November
16, 2010
|
(1)
|
The
Report fully complies with the requirements of Section 13(a) or 15(d) of
the Securities Exchange Act of 1934;
and
|
The
information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the
Company.
|
/s/
Richard McKilligan
|
|
Richard
McKilligan
|
|
Chief
Financial Officer (Principal Financial and Accounting
Officer)
|
|
November
16, 2010
|