GENETHERA INC - Quarter Report: 2015 September (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, 2015

 [  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

FOR THE TRANSITION PERIOD FROM ______ TO _________

Commission File Number:

000-27237

GeneThera, Inc.

(Exact name of registrant as Specified in its Charter)

              Nevada

65-0622463

(State or Other Jurisdiction of

(Internal Revenue Service

Incorporation or Organization)

Employer Identification Number)

9101 Harlan Street Suite 130, Westminster, CO

80031

(Address of Principal Executive Offices)

(Zip Code)

Registrant’s telephone number, including area code:  

(303) 439-2085

Securities registered pursuant to Section 12(b) of the Exchange Act:

None

Securities registered pursuant to Section 12(g) of the Exchange Act:

                      Common Stock, $0.001 per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No x

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 ¨   

   

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 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).       Yes x    No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-Q or any amendment to this Form 10-Q.       Yes x   No o

Indicate by check mark whether the registrant is a large accelerated filer, and 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.

Large accelerated filer  ¨	Accelerated filer   ¨
Non-accelerated filer  ¨	Smaller reporting company  x

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

 

State the number of shares of the issuer’s common stock outstanding, as of the latest practicable date:  36,610,636 shares of common stock issued and outstanding as ofNovember 22, 2015.  

 

                    

PART I – FINANCIAL INFORMATION

FORWARD-LOOKING AND CAUTIONARY STATEMENTS

Sections of this Form 10-Q, including Business and Management's Discussion and Analysis or Plan of Operation, contain "forward-looking statements". These forward-looking statements are subject to risks and uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from the results, performance or achievements expressed or implied by the forward-looking statements. You should not unduly rely on these statements. Forward-looking statements involve assumptions and describe our plans, strategies, and expectations. You can generally identify a forward-looking statement by words such as may, will, should, would, could, plan, goal, potential, expect, anticipate, estimate, believe, intend, project, and similar words and variations thereof. This report contains forward-looking statements that address, among other things:

* Our financing plans,

* Regulatory environments in which we operate or plan to operate, and

*Trends affecting our financial condition or results of operations, the impact of competition, the start-up of certain operations and acquisition opportunities.

Factors, risks, and uncertainties that could cause actual results to differ materially from those in the forward-looking statements ("Cautionary Statements") include, among others:

* Our ability to raise capital,

* Our ability to execute our business strategy in a very competitive environment,

* Our degree of financial leverage, risks associated with our acquiring and integrating companies into our own,

* Risks relating to rapidly developing technology, and regulatory considerations;

* Risks related to international economies,

* Risks related to market acceptance and demand for our products and services,

* The impact of competitive services and pricing, and

* Other risks referenced from time to time in our SEC filings.

All subsequent written and oral forward-looking statements attributable to us, or anyone acting on our behalf, are expressly qualified in their entirety by the cautionary statements. We do not undertake any obligations to publicly release any revisions to any forward-looking statements to reflect events or circumstances after the date of this report or to reflect unanticipated events that may occur.

TABLE OF CONTENTS

Consolidated Balance Sheets as of September 30, 2015 (Unaudited) and December 31, 2014

Consolidated Statements of Operations (Unaudited) for the three and nine months ended September 30, 2015 and 2014

Consolidated Statements of Cash Flows (Unaudited) for the nine months ended September 30, 2015 and 2014

Notes to Consolidated Financial Statements (Unaudited)

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

GeneThera, Inc. - Consolidated Statements of Operations

(Unaudited)

The accompanying condensed notes are an integral part of these interim consolidated financial statements.

GeneThera, Inc. - Consolidated Statements of Cash Flows

(Unaudited)

		Nine Months, Ended
		September 30,
		2015		2014
Cash flows from operating activities
Net loss	$	(818,321)	$	(499,077)
Adjustments to reconcile net loss to net cash  used in operating activities:
Stock-based transactions		480,944		9,050
Depreciation and amortization		240		10,242
Changes in operating assets and liabilities:
Prepaid expenses		(4,500)		-
Debt discount - BCF		(78,175)		-
Accounts receivable - related parties		(260,672)		-
Accounts payable - related parties		11,687		-
Accounts payable and accrued expenses		(352,808)		395,885
Net cash used in operating activities		(1,021,605)		(83,900)
Cash flows from investing activities
Investment in Galtheron Molecular Solutions		(110,620)		-
Net cash used in investing activities		(110,620)		-
Cash flows from financing activities
Proceeds from convertible debt financing		110,000		-
Net advance from related parties		1,022,303		-
Net cash provided by financing activities		1,132,303		82,764
Net increase in cash		78		(1,136)
Cash  at the beginning of the year		94		1,331
Cash at the end of the year		172		195
Supplemental disclosures of cash flow information:
Cash paid for interest	$	-	$	-
Cash paid for income taxes	$	-	$	-
Non-cash investing and financing transactions:
Equipment purchased by third party		3,238		-
Shares issued arising from note conversion		-		68,744
Debt issued for cash but collect by related party		-		91,500

The accompanying condensed notes are an integral part of these interim consolidated financial statements.

GENETHERA, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the nine months ended September 30, 2015 and 2014

Note 1 – Organization and nature of operations and summary of significant accounting policies

Organization and nature of operations

The consolidated financial statements include GeneThera, Inc. and its wholly owned subsidiary GeneThera, Inc. (Colorado) (collectively “GeneThera” or the “Company.

GeneThera is a biotechnology company that develops molecular assays for the detection of food contaminating pathogens, veterinary diseases and genetically modified organisms.

Use of estimates

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

Cash and cash equivalents  

Cash equivalents are highly liquid investments with an original maturity of three months or less.

Principles of consolidation

The consolidated financial statements include the accounts of the Company, and its subsidiary.

Property and equipment, net

Property and equipment consists primarily of office and laboratory equipment and leasehold improvements and is stated at cost. Depreciation is computed on a straight-line basis over the estimated useful lives ranging from five to seven years.  Leasehold improvements are amortized over the shorter of their economic lives or lease terms.  

Impairment of long-lived assets

The Company reviews the recoverability of its long-lived assets to determine whether events or changes in circumstances occurred that indicate the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on the ability to recover the carrying value of the asset from the expected future cash flows of the related operations. If these cash flows are less than the carrying value of such asset, an impairment loss is recognized for the difference between the estimated fair value and carrying value. The measurement of impairment requires management to make estimates of these cash flows related to long-lived assets, as well as other fair value determinations.

Revenue recognition

Research and development contracts are on a pre-paid basis in order to reflect milestones during research investigation. Revenues are recognized when services are completed. There were no revenues during the nine months ended September 30, 2015 and 2014.

Stock-Based Compensation

Stock-based compensation is accounted for under FASB ASC Topic No. 718 – Compensation – Stock Compensation. The guidance requires recognition in the financial statements of the cost of employee services received in exchange for an award of equity instruments over the period the employee is required to perform the services in exchange for the award (presumptively the vesting period). The guidance also requires measurement of the cost of employee services received in exchange for an award based on the grant-date fair value of the award. The Company accounts for non-employee share-based awards in accordance with guidance related to equity instruments that are issued to other than employees for acquisition, or in conjunction with selling, goods or services.

Income taxes

Income taxes are accounted for in accordance with the provisions of FASB ASC Topic No. 740 - Income Taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amounts expected to be realized.

Basic and diluted net loss per common share

Basic and diluted net loss per share calculations are presented in accordance with FASB ASC Topic No. 260 – Earnings per Share, and are calculated on the basis of the weighted average number of common shares outstanding during the period. Diluted net loss per share calculations includes the dilutive effect of common stock equivalents in years with net income. Basic and diluted loss per share is the same due to the absence of common stock equivalents.

Fair value of financial instruments

The carrying value of cash, accounts payable and accrued expenses approximates fair value due to the short term nature of these accounts.

Recently issued accounting pronouncements

In February 2015, the FASB issued new guidance to improve consolidation guidance for legal entities (Accounting Standards Update (“ASU”) 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis), effective for fiscal years beginning after December 15, 2015 and interim periods within those years and early adoption is permitted. The new standard is intended to improve targeted areas

of the consolidation guidance for legal entities such as limited partnerships, limited liability corporations, and securitization structures. The amendments in the ASU affect the consolidation evaluation for reporting organizations. In addition, the amendments in this ASU simplify and improve current GAAP by reducing the number of consolidation models. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.

The Company is reviewing the effects of following recent updates.  The Company has no expectation that any of these items will have a material effect upon the financial statements:

·

Update 2015-16—Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments

·

Update 2015-15—Interest—Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements—Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting  (SEC Update)

·

Update 2015-14—Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date

·

Update 2015-11—Inventory (Topic 330): Simplifying the Measurement of Inventory

·

Update 2015-08—Business Combinations (Topic 805): Pushdown Accounting—Amendments to SEC Paragraphs Pursuant to Staff Accounting Bulletin No. 115  (SEC Update)

·

Update No. 2015-03—Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs 

·

Update No. 2015-02—Consolidation (Topic 810): Amendments to the Consolidation Analysis.

 

Note 2- Going Concern

As reflected in the accompanying consolidated financial statements, the Company has an accumulated deficit of $24,767,672 and negative working capital of $6,410,435 as of September 30, 2015. This raises substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent on its ability to raise additional capital and implement its business plan. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Management believes that actions presently being taken to obtain additional funding and implement its strategic plans provide the opportunity for the Company to continue as a going concern.

Note 3 – Related party transactions

The Company has an outstanding loan payable, including interest, to Antonio Milici, its CEO and shareholder amounting to $656,958 and $645,271 as of September 30, 2015 and December 31, 2014, respectively. This outstanding loan to the Company is unsecured and bears interest at 2.41% per year. During the nine months ended September 30, 2015, the Company has recorded interest expense on this loan in the amount of $11,687.

In May 2015, the Company invested $110,000 in Galtheron Molecular Solutions AG, a Swiss entity under common control.  See Note 4 below.

As of September 30, 2015, the Company has outstanding liabilities due to related parties, including Setna Holdings LLC, Tannya Irizarry, and Elia Holdings, LLC totaling $1,183,541.

The Company has amounts receivable from these related parties of $276,002 and $15,331 as of September 30, 2015 and December 31, 2014, respectively.

During nine months ended September 30, 2015, the Company issued $366,000 of convertible promissory notes (see Note 5). The proceeds from these notes were managed by a subsidiary of Setna Holdings, a related party.

Note 4 – Investments

During May 2015, the Company invested $110,000 in Galtheron Molecular Solutions (“GMS”), a Swiss entity.  The Company is planning on entering into a licensing agreement with GMS as noted in Note 8 and, contingent upon GMS’ hiring of qualified personnel and development of an operating plan, will look to develop a long-term relationship.  The Company expects any control over the investment to be temporary in nature and will further evaluate the effects on the financial statements on a continuing basis

Note 5 – Property and equipment

Property and equipment consists primarily of office and laboratory equipment and leasehold improvements and is stated at cost. Depreciation is computed on a straight-line basis over the estimated useful lives ranging from five to seven years.  Leasehold improvements are amortized over the shorter of their economic lives or lease terms.  

The company’s property and equipment at September 30, 2015 and December 31, 2014 consisted of furniture, lab equipment, and computer software. As of September 30, 2015, the Company had construction in progress in the amount of $2,500 related to renovation of its lab space.  

Depreciation expense was $240 and $10,242 for the nine months ended September 30, 2015 and 2014, respectively.  Expenditures for repairs and maintenance are expensed as incurred.

Note 6 – Convertible notes payable

During the nine months ended September 30, 2015, the Company issued Subordinated Convertible Promissory notes in the aggregate amount of $366,000, and convertible notes and related interest totaling $69,026 were converted to 2,298,465 shares of common stock. Of that, 515,133 shares of common

stock valued at $15,454 had been issued as of March 31, 2015; the remaining 1,783,332 shares valued at $53,572 have not yet been issued as of September 30, 2015.

The Company recorded a discount on the debt in the amount of $134,000 related to the intrinsic value of the beneficial conversion feature of the notes issued during the three months ended September 30, 2015, which are convertible upon maturity at $.025 per share.  An aggregate of $110,000 of convertible debt was issued during the three months ended September 30, 2015, maturing in January 2016.  $55,825 was charged to interest as the debt discount is amortized over the life of the debt.  

Note 7 - Shareholders’ equity

Convertible preferred stock rights

Preferred Stock (‘Series A’) shall be convertible into Common Stock any time at the holder’s sole discretion in part or in whole by dividing the Purchase Price per Share by 110% of the Market Value on the Closing Date. ‘Market Value’ on any given date shall be defined as the average of the lowest three intra-day trading prices of the Company’s common stock during the 15 immediately preceding trading days.

Preferred Stock (“Series B”) shall be convertible into ten common shares at any time and holders are entitled to 20 common share votes per such preferred share.

Common stock

During the nine months ended September 30, 2015, the Company issued 1,622,447 shares of common stock valued at $81,000 in exchange for services and property:

?

204,080 shares valued at $10,000 to directors for services;

?

918,367 shares valued at $45,000 to an officer for services; and

?

1,300,000 shares valued at $26,000 to a vendor for construction in process. Subsequently, these shares were returned and cancelled on August 25, 2015, for non-performance; and

?

500,000 shares valued at $25,000 to an unrelated vendor for services, and we will issue another 500,000 at the end of the 6 month contract or About, February 29, 2016.

 

During the nine months ended September 30, 2015, convertible notes payable were converted to common stock:

?

515,133 shares of common stock were issued for converted notes totaling $69,026

?

An additional 1,783,332 shares valued at $53,572 were yet to be issued as of September  30, 2015 pursuant to convertible notes payable that were converted.

Note 8 – Legal contingencies

On August 12, 2015, the Company entered into a settlement agreement with Litchfield Church Ranch, LLC (“LCR”), its former landlord, related to back rent in the amount of $325,000.  The Company is required to pay $15,000 on or before September 12, 2015 as a good-faith down payment, on August 21, 2015, the Company paid $13,348 towards this down payment. The Company, at its option, can satisfy the judgment in the following ways:

·

If paid on or before February 12, 2016, the judgment shall be deemed paid-in-full if the Company delivers $100,000 to LCR

·

If not paid off prior to February 12, 2016, the Company judgment shall be deemed satisfied if the Company delivers $150,000 to LCR on or before August 12, 2016.

·

If not paid off prior to August 12, 2016, there will be no discount and the Company shall owe the judgment balance in the amount of $325,885

Note 9 – Subsequent events

In late December 2015, the Company expects to finalize and enter into an exclusive License Agreement with Galtheron Molecular Solutions. GeneThera will license Galtheron to commercialize diagnostic and vaccine technologies in Europe and the Middle East. Further details will be forthcoming. This has been delayed until the renovations of the laboratory is completed. Galtheron expects for this to be completed by December 2015.  The delay in licensing agreement has had no effect on the Company’s investment in Galtheron.  

During October 2015, the Company issued Subordinated Convertible Promissory notes in the aggregate amount of $30,960.

ITEM 2:

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Sections of this Form 10-Q, including the Management’s Discussion and Analysis or Plan of Operation, contain “forward-looking statements”.  These forward-looking statements are subject to risks and uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from the results, performance or achievements expressed or implied by the forward-looking statements.  You should not unduly rely on these statements.  Forward-looking statements involve assumptions and describe our plans, strategies, and expectations.  You can generally identify a forward-looking statement by words such as “may,” “will,” “should,” “would,” “could,” “plans,” “goal,” “potential,” “expect,” “anticipate,” “estimate,” “believe,” “intent,” “project,” and similar words and variations thereof.  This report contains forward-looking statements that address, among other things,

* Our financing plans

* Regulatory environments in which we operate or plan to operate

* Trends affecting our financial condition or results of operations

* The impact of competition, the start-up of certain operations and acquisition opportunities.

Factors, risks, and uncertainties that could cause actual results to differ materially from those in the forward-looking statements (“Cautionary Statements”) include, among others,

* Our ability to raise capital

* Our ability to execute our business strategy in a very competitive environment

* Our degree of financial leverage

* Risks associated with our acquiring and integrating companies into our own

* Risks relating to rapidly developing technology

* Regulatory considerations

* Risks related to international economies

* Risks related to market acceptance and demand for our products and services

* The impact of competitive services and pricing

* Other risks referenced from time to time in our SEC filings

All subsequent written and oral forward-looking statements attributable to us, or anyone acting on our behalf, are expressly qualified in their entirety by the cautionary statements.  We do not undertake any obligations to publicly release any revisions to any forward-looking statements to reflect events or circumstances after the date of this report or to reflect unanticipated events that may occur.

You should read the following discussion of our results and plan of operation in conjunction with the consolidated financial statements and the notes thereto appearing elsewhere in this Form 10-Q.  Statements in this Management’s Discussion and Analysis or Plan of Operation that are not statements of historical or current objective fact are “forward-looking statements.”

OVERVIEW

We have developed proprietary diagnostic assays for use in the agricultural and veterinary markets.  Specific assays for Chronic Wasting Disease (CWD) (among elk and deer) and Mad Cow Disease (among cattle) have been developed and are available currently on a limited basis.  E. coli (predominantly cattle) and Johne’s disease (predominantly cattle and bison) diagnostics are in development.  We are also working on vaccine solutions to meet the growing demands of today’s veterinary industry and tomorrow’s agriculture and healthcare industries.  The Company is organized and operated both to continually apply its scientific research to more effective management of diseases and, in so doing, realize the commercial potential of molecular biotechnology.

We have not generated significant operating revenue as of September  30, 2015. Our ability to generate substantial operating revenue will depend on our ability to develop and obtain approval for molecular assays and developing therapeutic vaccines for the detection and prevention of food contaminating pathogens, veterinary diseases, and diseases affecting human health.

Our independent auditors have expressed substantial doubt about our ability to continue as a going concern in their report on our consolidated financial statements as of December 31, 2014.  For the nine months ended September  30, 2015 and twelve months ended December 31, 2014, our operating losses were $737,496 and $499,077,

respectively.  Our current liabilities exceeded current assets by $6,410,435 and $5,738,840 as of September  30, 2015 and December 31, 2014, respectively.

For the nine months ended September 30, 2014, our operating losses were $499,077.  The increase in 2015 is directly attributable higher outstanding convertible debt and the related interest charges.

Although, we completed an equity financing with gross proceeds of approximately $1.1 million in 2005, we will require significant additional funding in order to achieve our business plan.  Over the next 12 months, in order to have the capability of achieving our business plan, we believe that we will require at least $10,000,000 in additional funding. We will attempt to raise these funds by both means of one or more private offerings of debt or equity securities.  At this time, we have commitments for additional capital funds. This amount may exceed an additional $6,500,000 depending on cost involved in the further development and commercialization of our products.  In such event, we may need immediate additional funding.  Our capital requirements will depend on many factors including, but not limited to, the timing of further development of assays to detect the presence of infectious disease from the blood of live animals, our hiring of additional personnel, the applications for, and receipt of, regulatory approvals for any veterinary vaccines that we may develop, and other factors.  Our ability to raise capital will increase our ability to implement our business plan.

Over the next 12 months, we expect significant purchases and/or sales of plant or equipment and significant changes in the number of our employees for any off-balance sheet arrangements that will have current and future effect on our financial condition.

We also expect to spend a significant amount of our capital on research and development activities for commercialization relating to development and vaccine design/development.  When we are able to develop assays for different diseases, we intend to formalize the procedure into a commercial application through a series of laboratories to be owned and operated by GeneThera.  To date, we have introduced our diagnostic solution for Chronic Wasting Disease (CWD) and Mad Cow Disease on a very limited basis.  We anticipate that significant funds will be spent on research and development throughout the life of the Company, as this is the source for new products to be introduced to the market.  Our plan is to seek new innovations in the biotechnology field.  We may be successful in developing or validating any new assays and, when we are successful in developing and validating any such assays, we may be able to successfully commercialize them or earn profits from sales of those assays.  Furthermore, we may be able to design, develop, or successfully commercialize vaccines as a result of our research and development efforts.

On January 16, 2013, the Company entered into an agreement with Caro Capital, LLC, for investor relations services. The Company issued 1,000,000 shares of common stock to Caro Capital for consideration of $20. The Company was also to pay Caro $5,000 per month for six months, payable when $500,000 qualified capital, which was supposed to have been raised for the Company by Caro Capital. Unfortunately, Caro Capital was

unsuccessful to perform their fundraising task. The Company waited for Caro Capital to provide their Consultant Report, but they failed to provide it. Caro Capital had until 12-31-2013 to do so. Therefore, the 1,000,000 restricted shares were cancelled.

On March 26, 2013, the Company entered into an agreement with Southridge Partners II, LP, under which Southridge agreed to assume up to $3,788,419 of the Company's liabilities. The liabilities were to be divided into tranches, which would have been settled by issuances of the Company’s common stock to Southridge. Common stock would have been valued at 75% of the low closing bid price during the minimum period of consecutive trading days previous to settlement over which the dollar trading volume of the Company's common stock exceeded 300% of the purchase price. Shares issued to Southridge were not to exceed 9.99% of the Company's outstanding shares. The agreement was cancelled. The CEO did not continued with SouthRidge due to lack of performance. None of our consultants/vendors received any payment due to the fact that Southridge wanted their fees to be paid first at a rate that would have devastated the market value of our Company. Litigation is pending. Other attorneys have contacted our Company requesting information concerning our experience with Southridge. All these attorneys want to litigate against SouthRidge. The Company has not retained an attorney for this legal situation yet; but, it will. We will keep you posted.

    

RELATED PARTY TRANSACTIONS

The Company has an outstanding loan payable to Antonio Milici, its President and shareholder amounting to $656,958 as of September 30, 2015 and 2014, respectively. This outstanding loan to the Company is unsecured.

GTI Corporate Transfer Agents, LLC is the Company’s transfer agent.  In March 2015, Mr. Jesus Montelongo became the new managing director with a 34% ownership and/or interest. Ms. Michelle Torres Colón is assistant managing director with a 50%  ownership and/or interest. Ms. Tannya Irizarry is a board member and has a 50%  ownership and/or interest. In August 2015, Montelongo resigned his position as managing director to pursue other interests in real estate and human resources.

RECENTLY ISSUED ACCOUNTING STANDARDS

The Company does not expect the adoption of any recently issued accounting pronouncements to have a significant effect on its consolidated financial position or results of operations.

EMPLOYEES

As of September  30, 2015, we had a total of two full-time employees who devoted substantial effort on our behalf.  None of our employees are represented by a collective

bargaining unit.  We entered into an employment agreement with Antonio Milici, M.D., Ph.D., to serve as our Chief Executive Officer and Chief Scientific Officer through January 7, 2017.  In consideration for his services, Dr. Milici will receive a base salary of $216,000 per annum plus bonuses as may be determined by the Board of Directors at its sole discretion.  As part of his employment agreement, Dr. Milici is subject to non-disclosure and non-competition obligations and has transferred to the Company all of his interests in any idea, concept, technique, invention or written work.  We also entered into an employment agreement with Tannya L. Irizarry to serve as our Chief Administrative Officer through January 7, 2017.  Since May 2006, Ms. Irizarry is also our Chief Financial Officer (Interim). Ms. Irizarry’s base salary is $168,000 per annum.  The above salaries have been accrued to be paid in common stock shares from the Company. There are no employee issues at this time.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Pursuant to Item 305(e) of Regulation S-K (§ 229.305(e)), the Company is not required to provide the information required by this Item as it is a “smaller reporting company,” as defined by Rule 229.10(f)(1).

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Principal Executive Officer and Principal Financial Officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of the end of the period covered by this Quarterly Report on Form 10-Q. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Based on our evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures are not designed at a reasonable assurance level and are not effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

We regularly review our system of internal control over financial reporting to ensure we maintain an effective internal control environment. There were no changes in our internal control over financial reporting that occurred during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II--OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

On June 6, 2008, M.A.G. Capital, LLC; Mercator Momentum Fund III, LP; Mercator Momentum Fund, LP; and Monarch Pointe Fund, Ltd. filed a Judgment at the Orange County Recorder in the amount of $37,721. The Company has not satisfied the judgment.

On June 6, 2008, Mark A. Shoemaker filed a Civil Judgment at the LA County/Recorder of Deeds Court in the amount of $37,721. This lawyer has been disbarred and incarcerated. The Company will not satisfy the judgment.

In June 2009, James Tufts filed a complaint at the Small Claims Court in Jefferson County CO in the amount of $4,000 plus expenses from a London trip. The Company has not satisfied the judgment.

On June 26, 2009, Enterprise Leasing Company of Denver filed a Civil Judgment at the Jefferson County District Court in the State of Colorado in the amount of $78,178. The Company has not satisfied the judgment.

On August 17, 2010, Banc of America Leasing filed a Civil Judgment at the Oakland County District in Troy, Michigan in the amount of $24,002. The Company has not satisfied the judgment.

On September 23, 2010, Liberty Acquisitions filed a Civil Judgment at the Jefferson County Court in the State of Colorado in the amount of $3,300. The Company has not satisfied the judgment.

On February 10, 2009, Centennial Credit Corporation filed a Civil Judgment at the Jefferson County Court in the amount of $967. The Company has no idea which entity is this; therefore, the Company has not satisfied the judgment.

On August 29, 2011, GeneThera had a court hearing concerning a litigation filed by The Park III related to unpaid rent according to our lease agreement. The District Court of Boulder entered a judgment against the Company in the amount of $77,000. The Company has not satisfied the judgment.

On November 26, 2012, the Internal Revenue Service filed a Federal Tax Lien in the amount of $1,275. The Company has not satisfied the lien.

On November 14, 2014, Litchfield Church Ranch, LLC filed a Summons in Forcible Entry and Detainer against the Company after the owner was unable to sell the building to us because he was upended for over $800,000 in his mortgage. As per the Summons, the plaintiff claimed $364,968.69 in past due rent. As per our accounting records, the

Company had $242,000 with the offer to purchase such property at $1,850,000 plus scheduled payments for the past due rent. The owner’s bank did not allow him to sell the property to the Company and/or anyone. We went to mediation. The owner’s legal team and our legal team settled for $115,000 with the contingency to pay the goodwill amount of $15,000 by September 12, 2015. We did. The Company has an additional six months to complete the remaining $100,000 settlement. If not paid off prior to August 12, 2016, there will be no discount and the Company shall owe the judgment balance in the amount of $325,885. We were deceived into thinking the owner could sell this property to the Company. The mediator, a retired judge, concluded we were indeed deceived by the owner. Therefore, the settlement was agreed upon by both parties.

Item 1A.

Risk Factors

There have been no material changes from the risk factors previously disclosed in the Company’s Quarterly Report on Form 10-Q, filed with the Commission on April 13, 2015 and investors are encouraged to review such risk factors prior to making an investment in the Company.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

On January 17, 2013, the Company issued 1,000,000 shares of its common stock for cash for total proceeds of $200, a nominal fee. This issuance has a restrictive legend until such consultant’s forthcoming report for services rendered. The stock issuance was cancelled.

On September 19, 2015, the Company issued 500,000 restricted shares to High Point Communication for them to be our new Investor Relations entity. Another 500,000 restricted shares, according to their consulting agreement, would be issued contingency upon the completion of their consulting task.  The shares were valued at the trading price on the date of issuance and are considered consulting fees during the period ended September 30, 2015.

Item 3.

Defaults upon Senior Securities

None.

Item 4:

 Mine Safety Disclosures

Not applicable.

Item 5:

Other Information

On April 18, 2013, the Company, in error, issued restricted stock in lieu of cash invested

during a binding Escrow Agreement, which was defaulted by Gold X Change, Inc. The

issuance of restricted stock was cancelled as per the escrow agreement terms.

The Company is expecting for their lab renovations to be finally completed soon.

Item 6:

Exhibits

Exhibit

Description of Exhibit

Number

31.1*

Certificate of the Chief Executive Officer pursuant to Section 302 of the

Sarbanes-Oxley Act of 2002

31.2*

Certificate of the Chief Financial Officer pursuant to Section 302 of the

Sarbanes-Oxley Act of 2002

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on November 22, 2015.

GeneThera, Inc.

By:   /s/ Antonio Milici

Antonio Milici, MD, PhD

President

(Principal Executive Officer)

By:    /s/ Tannya L. Irizarry

Tannya L. Irizarry

Chief Financial Officer (Interim)

(Principal Financial/Accounting Officer)

In accordance with the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Signature		Title		Date
/s/ Antonio Milici		President, Director		11/22/2015
Antonio Milici, M.D., PhD.
/s/ Tannya L. Irizarry		Chief Financial Officer (Interim)		11/22/2015
Tannya L Irizarry