x
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QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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o
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TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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NEURO-HITECH, INC.
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(Exact name of Registrant as Specified in its Charter)
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Delaware
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20-4121393
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(State or Other Jurisdiction of
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(I.R.S. Employer
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Incorporation or Organization)
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Identification No.)
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16255 Aviation Loop Drive, Brooksville, FL 34604
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(Address of Principal Executive Offices) (Zip Code)
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(352) 754-8587
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(Issuer’s Telephone Number, Including Area Code)
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(Former Name, Former Address and Former Fiscal Year
If Changed Since Last Report)
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Large Accelerated Filer o
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Accelerated Filer o
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Non-Accelerated Filer o
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Smaller Reporting Company x
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(Do Not Check if a smaller reporting company)
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March 31, 2009
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December 31, 2008
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(unaudited)
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(1)
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ASSETS:
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Current
Assets:
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Cash
and Cash Equivalents
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$
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449,335
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$
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397,147
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Accounts
Receivable
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441,420
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1,310,852
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Inventory
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428,846
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326,946
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Prepaid
Inventory
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826,761
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1,025,059
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Prepaid
Expenses
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173,350
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38,054
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Total
Current Assets
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2,319,712
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3,098,058
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Property
and Equipment, net
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8,556
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9,472
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Other
Assets:
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Intangible
Asset, net
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5,691,171
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6,021,751
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Total
assets
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$
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8,019,439
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$
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9,129,281
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LIABILITIES
AND STOCKHOLDERS' EQUITY:
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Current
Liabilities:
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Accounts
payable and accrued expenses
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$
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830,988
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$
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830,588
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Accrued
Returns and Chargebacks
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408,307
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408,307
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Total
current liabilities
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1,239,295
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1,238,895
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Stockholders'
Equity:
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Preferred
stock, $.001 par value, 5,000,000 shares authorized:
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Series
A Preferred Stock,1,500,000 issued and outstanding at
December 31, 2008
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1,500
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1,500
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Series
B Preferred Stock,1,397,463 issued and outstanding at
December 31, 2008
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1,397
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1,397
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Common
stock, $.001 par value, 44,999,990 shares authorized, 31,520,186 issued
and outstanding at March 31, 2009 and December 31, 2008,
respectively
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31,520
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31,520
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||||||
Subscriptions
receivable
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(15,000
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)
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(15,000
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Deferred
Compensation
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(15,936
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)
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(15,936
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)
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Additional
paid-in capital
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52,255,434
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51,443,428
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Accumulated
deficit
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(45,478,771
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)
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(43,556,523
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)
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Total
stockholders' equity
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6,780,144
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7,890,386
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Total
liabilities and stockholders' equity
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$
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8,019,439
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$
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9,129,281
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For the three-month period ended
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March 31,
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2009
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2008
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(Unaudited)
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(Unaudited)
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Revenues
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$ | 981,353 | $ | 190,827 | ||||
Cost
of goods sold
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676,795 | 99,357 | ||||||
Gross
Profit
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304,558 | 91,470 | ||||||
Operating
expenses:
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Selling,
general and administrative expenses
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1,084,594 | 556,411 | ||||||
Research
and Development Costs
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- | 1,100,664 | ||||||
Share-Based
Compensation
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809,390 | 511,017 | ||||||
Amortization
of Deferred Compensation
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- | 31,869 | ||||||
Amortization
of Intangibles
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330,581 | - | ||||||
Total
operating expenses
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2,224,565 | 2,199,961 | ||||||
Operating
loss
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(1,920,007 | ) | (2,108,491 | ) | ||||
Other
income:
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Interest
income (expense)
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365 | 38,788 | ||||||
Net
loss
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$ | (1,919,642 | ) | $ | (2,069,703 | ) | ||
Basic
and diluted loss per common share
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$ | (0.06 | ) | $ | (0.15 | ) | ||
Basic
and diluted weighted average common
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shares
outstanding
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31,520,186 | 14,004,853 |
For
the three-month period ended
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March
31,
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2009
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2008
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(Unaudited)
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(Unaudited)
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Cash
flows from operating activities:
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Net
(loss)
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$ | (1,919,642 | ) | $ | (2,069,703 | ) | ||
Adjustments
to reconcile net (loss) to net cash provided by (used in)
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operating
activities:
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Depreciation
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916 | 747 | ||||||
Amortization
of intangible assets
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330,580 | – | ||||||
Amortization
of Deferred Compensation
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– | 31,869 | ||||||
Share-based
Compensation
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809,390 | – | ||||||
Fair
value of shares issued for services
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– | 511,017 | ||||||
Changes
in operating assets and liabilities:
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(Increase)
Decrease in Assets:
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Accounts
receivable
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869,432 | (100,951 | ) | |||||
Inventory
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(101,900 | ) | 8,812 | |||||
Prepaid
expenses
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63,012 | (92,081 | ) | |||||
Accounts
payable and accrued expenses
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400 | (261,919 | ) | |||||
Net
cash provided by (used in) operating activities
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(52,188 | ) | (1,972,209 | ) | ||||
Cash
flows from financing activities:
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Net
increase (decrease) in cash
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52,188 | (1,972,209 | ) | |||||
Cash
and cash equivalent, beginning of year
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397,147 | 6,137,592 | ||||||
Cash
and cash equivalent, end of period
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$ | 449,335 | $ | 4,165,383 | ||||
Supplemental
disclosures of cash flow information:
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Cash
paid for taxes
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$ | - | $ | - | ||||
Cash
paid for interest
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$ | - | $ | - |
March 31, 2009
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March 31, 2008
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Options
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1,312,043
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2,730,319
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Warrants
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3,255,357
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3,255,357
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Preferred
Stock (If Converted)
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28,974,630
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-
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33,542,030
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5,985,676
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·
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Recognizes
and measures in its financial statements the identifiable assets acquired,
the liabilities assumed, and any noncontrolling interest in the
acquiree;
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·
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Recognizes
and measures the goodwill acquired in the business combination or a gain
from a bargain purchase; and
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·
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Determines
what information to disclose to enable users of the financial statements
to evaluate the nature and financial effects of the business
combination.
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·
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The
ownership interests in subsidiaries held by parties other than the parent
be clearly identified, labeled, and presented in the consolidated
statement of financial position within equity, but separate from the
parent’s equity.
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·
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The
amount of consolidated net income attributable to the parent and to the
noncontrolling interest be clearly identified and presented on the face of
the consolidated statement of
income.
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·
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Changes
in a parent’s ownership interest while the parent retains its controlling
financial interest in its subsidiary be accounted for consistently. A
parent’s ownership interest in a subsidiary changes if the parent
purchases additional ownership interests in its subsidiary or if the
parent sells some of its ownership interests in its subsidiary. It also
changes if the subsidiary reacquires some of its ownership interests or
the subsidiary issues additional ownership interests. All of those
transactions are economically similar, and this Statement requires that
they be accounted for similarly, as equity
transactions.
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·
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When
a subsidiary is deconsolidated, any retained noncontrolling equity
investment in the former subsidiary be initially measured at fair value.
The gain or loss on the deconsolidation of the subsidiary is measured
using the fair value of any noncontrolling equity investment rather than
the carrying amount of that retained
investment.
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·
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Entities
provide sufficient disclosures that clearly identify and distinguish
between the interests of the parent and the interests of the
noncontrolling owners.
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Pre-Modification
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Adjustments
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Post-Modification
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Cash
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$
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4,492,624
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400,000
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4,892,624
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Notes
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6,000,000
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(6,000,000
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)
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-
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Fair
value of shares
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1,366,666
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2,897,463
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4,264,130
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Assumption
of liabilities
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1,518,161
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(2,403,660
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)
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(885,499
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)
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$
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13,377,451
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(5,106,196
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)
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8,271,255
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Pre-Modification
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Adjustments
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Post-Modification
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Cash
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$
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189,042
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-
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189,042
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Inventory
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212,872
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1,257,717
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1,470,589
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Intangible
assets
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12,975,537
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(6,363,912
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)
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6,611,625
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$
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13,377,451
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(5,106,196
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)
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8,271,255
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For the
Three
Months
Ended
March 31,
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2008
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Total
Revenue
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$
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1,521,038
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Net
[Loss]
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$
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(2,577,311
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)
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Basic
& Diluted [Loss] Per Common Share
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$
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(0.18
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)
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Useful Life
(Years)
Weighted
Average
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At March
31, 2009
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At December
31, 2008
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MCR
and AMBI Pharmaceuticals
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4.87
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$
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6,611,625
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$
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6,611,625
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Less:
accumulated amortization
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$
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(920,454
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)
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(589,874)
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$
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5,691,171
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$
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6,021,751
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Three month period
ended
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March 31, 2009
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Exercise
price:
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$ | 0.44 - $5.85 | ||
Market price
at date of grant:
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$ | 0.41 - $0.45 | ||
Volatility:
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121.63 | % | ||
Expected
dividend rate:
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0 | % | ||
Expected
terms:
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4 –
5 years
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Risk-free
interest rate:
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3.2 - 3.52 | % | ||
Stock
options granted:
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4,050,000 | |||
Stock
appreciation rights granted:
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365,000 |
For the three-month
period ended
March 31
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||||||||||||||||
2009 vs
2008
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2009 vs
2008
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|||||||||||||||
2009
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2008
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($)
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(%)
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|||||||||||||
(Unaudited)
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(Unaudited)
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|||||||||||||||
Revenues
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$ | 981,353 | $ | 190,827 | $ | 790,526 | 414.3 | % | ||||||||
Cost
of goods sold
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676,795 | 99,357 | 577,438 | 581.2 | % | |||||||||||
Gross
Profit
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304,558 | 91,470 | 213,088 | 233.0 | % | |||||||||||
Operating
expenses:
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||||||||||||||||
Selling,
general and administrative expenses
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1,084,594 | 556,411 | 528,183 | 94.9 | % | |||||||||||
Research
and development costs
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- | 1,100,664 | (1,100,664 | ) | -100 | % | ||||||||||
Share-Based
Compensation
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809,390 | 511,017 | 298,373 | 58.4 | % | |||||||||||
Amortization
of Deferred Compensation
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- | 31,869 | (31,869 | ) | -100.0 | % | ||||||||||
Amortization
of Intangibles
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330,581 | - | 330,581 | 100 | % | |||||||||||
Total
operating expenses
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2,224,565 | 2,199,961 | 24,604 | 1.1 | % | |||||||||||
Operating
loss
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(1,920,007 | ) | (2,108,491 | ) | 188,484 | -8.9 | % | |||||||||
Other
income (expense):
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||||||||||||||||
Interest
income (expense)
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(365 | ) | 38,788 | (38,423 | ) |
NM
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||||||||||
Net
loss
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$ | (1,919,642 | ) | $ | (2,069,703 | ) | $ | (150,061 | ) | 7.3 | % |
●
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Net
loss of approximately $1.9 million, adjusted for share-based payments
aggregating $809,000 and the amortization of intangible assets acquired
pursuant to the MCR and AMBI acquisition amounting to approximately
$331,000;
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●
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A
decrease in accounts receivable of approximately $869,000 which is
primarily due to sales of products sold in the first quarter,
2009;
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●
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An
increase in inventory of approximately
$102,000.
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31.1
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Certification
of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
|
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31.2
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Certification
of the Chief Financial Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|
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32.1
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Certification
of the Chief Executive Officer and Chief Financial Officer Pursuant to 18
U.S.C. 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.
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Neuro-Hitech,
Inc.
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||
(Registrant)
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||
Date:
May 14, 2009
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By:
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/s/
David Ambrose
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David
Ambrose
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||
President
and Chief Executive Officer
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||
Date:
May 14, 2009
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By:
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/s/
David Barrett
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David
J. Barrett
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||
Chief
Financial
Officer
|