Probility Media Corp - FORM 10-Q

Attached files

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EXCEL - IDEA: XBRL DOCUMENT - Probility Media Corp	Financial_Report.xls
EX-32.1 - EX-32.1 - Probility Media Corp	ex_32-1.htm
EX-31.1 - EX-31.1 - Probility Media Corp	ex_31-1.htm

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 August 31, 2014

[ ] 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: 000-55074

PANTHER BIOTECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)

Nevada		33-1221758
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

2801 LAKESIDE DRIVE, SUITE 207B, BANNOCKBURN, IL 60015
(Address of principal executive offices)

312-371-6829
(Registrant's telephone number, including area code)


(Former name, former address and former fiscal year, if changed since last report)

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 whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act (Check one).

Large accelerated filer [ ]		Accelerated filer [ ]

Non-accelerated filer [ ]		Smaller reporting company [X]
(Do not check if a smaller reporting company)

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

As of June 10, 2015, there were 4,662,500 shares of the issuer's common stock, par value $0.001, outstanding.

PANTHER BIOTECHNOLOGY, INC.

FORM 10-Q

FOR THE THREE MONTHS ENDED AUGUST 31, 2014 AND 2013

TABLE OF CONTENTS

			PAGE

PART I – FINANCIAL INFORMATION
	ITEM 1.	FINANCIAL STATEMENTS	3
	ITEM 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	16
	ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	19
	ITEM 4.	CONTROLS AND PROCEDURES	19
PART II – OTHER INFORMATION
	ITEM 1.	LEGAL PROCEEDINGS	20
	ITEM 1A.	RISK FACTORS	20
	ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	20
	ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	20
	ITEM 4.	MINE SAFETY DISCLOSURES	20
	ITEM 5.	OTHER INFORMATION	20
	ITEM 6.	EXHIBITS	21
SIGNATURES			22

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission ("SEC"), and should be read in conjunction with the audited financial statements and notes thereto contained in our Company's Form 10-K, filed with the SEC on June 15, 2015. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the periods presented have been reflected herein. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year ended May 31, 2015.

PANTHER BIOTECHNOLOGY, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED AUGUST 31, 2014 AND 2013

(UNAUDITED)

	Page

Consolidated Balance Sheets	4

Consolidated Statements of Operations	5

Consolidated Statements of Cash Flows	6

Notes to Consolidated Financial Statements	7

PANTHER BIOTECHNOLOGY, INC.

Consolidated Balance Sheets

(Unaudited)

	August 31,			May 31,
	2014			2014
ASSETS
Current Assets
Cash	$	38,430		$	70,269
Accounts receivable, net of allowance of $13,000 and $11,428, respectively		21,716			18,105
Prepaid expenses		13,268			7,988
Total current assets		73,414			96,362

Long-Term Assets
Property, plant, and equipment, net of accumulated depreciation of $4,579 and $3,567, respectively		7,959			8,971
License deposit		24,000			24,000

Total Assets	$	105,373		$	129,333

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
Accounts payable and accrued liabilities	$	21,392		$	52,595
Deferred revenue		13,187			11,359
Related party advances		35,000			25,000
Total liabilities		69,579			88,954

Commitments and contingencies

Stockholders' Equity
Preferred stock, $0.001 par value; 10,000,000 shares authorized;
0 shares issued and outstanding		-			-
Common stock, $0.001 par value; 100,000,000 shares authorized;
4,662,500 shares issued and outstanding		4,663			4,663
Additional paid-in capital		49,587			49,587
Accumulated deficit		(18,456	)		(13,871	)
Total stockholders' equity		35,794			40,379

Total Liabilities and Stockholders' Equity	$	105,373		$	129,333

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

PANTHER BIOTECHNOLOGY, INC.

Consolidated Statements of Operations

For the Three Months Ended August 31, 2014 and 2013

(Unaudited)

	2014			2013

Revenue	$	75,097		$	42,711
Cost of revenue		19,586			5,736
Gross profit		55,511			36,975

Operating expenses
Selling, general and administrative		60,096			30,087
Total operating expenses		60,096			30,087

Operating income (loss)		(4,585	)		6,888

Net income (loss)	$	(4,585	)	$	6,888

Net income (loss) per common share, basic and diluted	$	(0.00	)	$	0.00

Weighted average number of common shares outstanding, basic and diluted		4,662,500			3,893,750

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

PANTHER BIOTECHNOLOGY, INC.

Consolidated Statements of Cash Flows

For the Three Months Ended August 31, 2014 and 2013

(Unaudited)

	2014			2013

Cash flows from operating activities:
Net income (loss)	$	(4,585	)	$	6,888
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Bad debt expense		1,572			2,000
Depreciation expense		1,012			374
Changes in operating assets and liabilities:
Accounts receivable		(5,183	)		(6,511	)
Prepaid expenses		(5,280	)		(431	)
Accounts payable and accrued liabilities		(31,203	)		1,558
Deferred revenue		1,828			5,716
Net cash provided by (used in) operating activities		(41,839	)		9,594

Cash flows from investing activities:
Net cash used in investing activities		-			-

Cash flows from financing activities:
Proceeds from related party advances		10,000			-
Proceeds from issuance of common stock		-			20,500
Net cash provided by financing activities		10,000			20,500

Net increase (decrease) in cash and cash equivalents		(31,839	)		30,094
Cash and cash equivalents at beginning of period		70,269			12,331

Cash and cash equivalents at end of period	$	38,430		$	42,425

Supplemental disclosure of cash flow information:
Cash paid for interest	$	-		$	-
Cash paid for income tax	$	-		$	-

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

PANTHER BIOTECHNOLOGY, INC.

Notes to Consolidated Financial Statements

(Unaudited)

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

Organization and Business Activity

Panther Biotechnology, Inc. (the "Company") was incorporated in the State of Nevada on July 11, 2011. The Company was originally incorporated as New Era Filing Services Inc., changed its name to NEF Enterprises, Inc. on October 4, 2011 and then changed its name to Panther Biotechnology, Inc. on May 29, 2014. The Company incorporated a wholly-owned subsidiary, PubCo Reporting Services, Inc., formerly known as New Era Filing Services, Inc., in Florida on November 20, 2012.

The Company's operations to date has been offering Securities Exchange Commission ("SEC") compliance filing services, through its wholly-owned subsidiary. The Company is pursuing the in-licensing of certain technologies so that they may be able to develop those technologies for treatments of patients with cancer and other life threatening diseases.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Unaudited Interim Consolidated Financial Statements

The accompanying unaudited interim consolidated financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission ("SEC"). and should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company's latest annual report filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the unaudited interim consolidated financial statements that would substantially duplicate the disclosures contained in the audited consolidated financial statements for fiscal year 2014, as reported in the Form 10-K, have been omitted.

Basis of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, PubCo Reporting Services, Inc. All significant intercompany balances and transactions have been eliminated in these consolidated financial statements.

Basis of Presentation

The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America ("GAAP"). These consolidated financial statements include all adjustments that, in the opinion of management, are necessary in order to make the financial statements not misleading.

Use of estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company's periodic filings with the Securities and Exchange Commission include, where applicable, disclosures of estimates, assumptions, uncertainties and markets that could affect the financial statements and future operations of the Company.

Accounts Receivable

Accounts receivable consist of charges for service provided to customers. An allowance for doubtful accounts is considered to be established for any amounts that may not be recoverable, which is based on an analysis of the Company's customer credit worthiness, and current economic trends. Based on management's review of accounts receivable, a $13,000 and $11,428 allowance for doubtful accounts was recorded at August 31, 2014 and May 31, 2014, respectively. Receivables are determined to be past due, based on payment terms of original invoices. The Company does not typically charge interest on past due receivables. During the three months ended August 31, 2014 and 2013, the Company determined that $1,572 and $2,000, respectively, of accounts receivable were not collectible and recorded a direct write-off.

Deposits and Prepaid Expenses

Deposits represent advance payments made for the acquisition of assets. Prepaid expenses include annual software costs that are paid up-front to the software licensor and are amortized over a twelve-month period. Amortization expense of $5,280 and $0 was recognized during the three months ended August 31, 2014 and 2013, respectively, related to prepaid software costs.

Revenue Recognition

The Company recognizes revenue from the sale of services. Revenue consists of SEC compliance services; focusing on corporate and individual reporting requirements. Sales income is recognized only when all of the following criteria have been met:

Persuasive evidence for an agreement exists;

ii)

Service has been provided;

iii)

The fee is fixed or determinable; and

iv)

Collection is reasonably assured.

It is common to have services paid in advance, in such cases, the Company defers revenue recognition until services have been performed.

Earnings (Loss) per Share

Basic income (loss) per common share equals net income (loss) divided by weighted average common shares outstanding during the period. Diluted income (loss) per share includes the impact on dilution from all contingently issuable shares, including options, warrants and convertible securities. The common stock equivalents from contingent shares are determined by the treasury stock method. The Company incurred a net loss for the three months ended August 31, 2014, and therefore, basic and diluted loss per share for the period is the same, as all potential common equivalent shares would be antidilutive.

The Company has no potentially dilutive securities, such as options or warrants, currently issued and outstanding.

Recent Accounting Pronouncements

Management has considered all recent accounting pronouncements issued since the last audit of our consolidated financial statements. The Company's management believes that these recent pronouncements will not have a material effect on the Company's consolidated financial statements.

In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"), which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. The standard is effective for annual periods beginning after December 15, 2016, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients; or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). The Company is currently evaluating the impact of our pending adoption of ASU 2014-09 on our consolidated financial statements and has not yet determined the method by which the Company will adopt the standard in 2017.

In June 2014, the Financial Accounting Standards Board ("FASB") issued ASU 2014-10 "Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation". ASU 2014-10 eliminates all incremental financial reporting requirements for development stage entities by removing ASC Topic 915 "Development Stage Entities", from the FASB Accounting Standards Codification. The ASU 2014-10 clarified that the guidance in Topic 275 "Risks and Uncertainties" is applicable to entities that have not yet commenced operations. Accordingly, upon adopting the ASU 2014-10 and eliminating development stage information, entities should re-evaluate their disclosures under Topic 275. The Company decided to early adopt this pronouncement in the second quarter of 2014. As a result, cumulative information in the Company's statements of operations, its statements of cash flows and the notes to its unaudited consolidated financial statements was removed.

In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern. The new standard requires management to assess the company's ability to continue as a going concern. Disclosures are required if there is substantial doubt as to the company's continuation as a going concern within one year after the issue date of financial statements. The standard provides guidance for making the assessment, including consideration of management's plans which may alleviate doubt regarding the company's ability to continue as a going concern. ASU 2014-15 is effective for years beginning after December 15, 2016. We do not expect the adoption of this pronouncement to have a material impact on our consolidated financial statements.

Subsequent Events

The Company has evaluated all transactions through the date the consolidated financial statements were issued for subsequent event disclosure consideration.

NOTE 3 – GOING CONCERN AND LIQUIDITY CONSIDERATIONS

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has a cumulative net loss since inception from operations of $18,456 and has required additional capital raises and advances from shareholders to support its operations. These factors raise substantial doubt about the ability of the Company to continue as a going concern for a reasonable period of time. The Company's continuation as a going concern is dependent upon its ability to generate revenues and its ability to continue receiving capital from third parties. No assurance can be given that the Company will be successful in these efforts.

The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

NOTE 4 – PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment assets consist of the following:

	August 31, 2014			May 31, 2014
Computer equipment and furniture	$	12,538		$	12,538
Less: accumulated depreciation		(4,579	)		(3,567	)
Computer equipment, net	$	7,959		$	8,971

Depreciation expense was $1,012 and $374 for the three months ended August 31, 2014 and 2013, respectively.

NOTE 5 – RELATED PARTY ADVANCES

During the three months ended August 31, 2014, certain officers, directors and/or shareholders of the Company advanced $10,000 to the Company. The advances have no conversion provisions into equity, are due on demand and do not incur interest.

NOTE 6 - INCOME TAXES

We recognize the financial statement effects of tax positions when it is more likely than not, based on the technical merits, that the position will be sustained upon examination by a taxing authority. Recognized tax positions are initially and subsequently measured as the largest amount of tax benefit that is more likely than not of being realized upon ultimate settlement with a taxing authority. We have not taken a tax position that, if challenged, would have a material effect on the consolidated financial statements or the effective tax rate for the three months ended August 31, 2014 and 2013.

Income tax provisions or benefits for interim periods are computed based on the Company's estimated annual effective tax rate. Based on the Company's historical losses and its expectation of continuation of losses for the foreseeable future, the Company has determined that it is not more likely than not that deferred tax assets will be realized and, accordingly, has provided a full valuation allowance. As the Company anticipates that its net deferred tax assets at August 31, 2014, would be fully offset by a valuation allowance, there is no federal or state income tax expense or benefit for the three months ended August 31, 2014 and 2013.

As of August 31, 2014, the Company has U.S. net operating loss carry forwards of approximately $18,000 which begin to expire in 2031.

NOTE 7 – STOCKHOLDERS' EQUITY

Authorized Stock

The Company has authorized 100,000,000 common shares and 10,000,000 preferred shares, both with a par value of $0.001 per share. Each common share entitles the holder to one vote, in person or proxy, on any matter on which action of the stockholders of the corporation is sought.

NOTE 8 – SUBSEQUENT EVENTS

License Agreement with Northwestern University

On January 26, 2015, the Company entered a license agreement with Northwestern University ("Northwestern"). Northwestern is the owner of certain patents and grants for cancer treatments of which the Company has obtained an exclusive license under a Patent Rights agreement and a non-exclusive license under a Know-How agreement (together the "Licensed Product").

According to the agreement, the Company must reach the following milestones to maintain the licenses:

Raise funds of at least $3 million within the first 12 months of the closing date;

Initiate Good Laboratory Practices in preclinical studies with a Licensed Product within 18 months of the closing date;

File an Investigational New Drug application within 4 years of the closing date;

First dosing of a patient in a Phase I clinical trial for a Licensed Product within 5 years of the closing date;

First dosing of a patient in a Phase II clinical trial for a Licensed Product within 6 years of the closing date;

First dosing of a patient in a Phase III clinical trial for a Licensed Product within eight years of the closing date;

Submit a New Drug Application for a Licensed Product within 10 years of the closing date;

Complete and submit to Northwestern a business plan for commercialization of a Licensed Product within 1 year of submission of a New Drug Application ("NDA") for such Licensed Product.

In consideration of the license granted by Northwestern, the Company shall pay to Northwestern the following:

A non-creditable, non-refundable licensing fee of $24,000 within 30 days of the closing date (which was previously paid);

The Company will issue to Northwestern a number of shares of its common stock that will represent 2% of the total outstanding shares of the Company and, in consideration of her role as co-founder and in anticipation of entering into a research agreement with Northwestern to support research in her laboratory, the Company will issue to Dr. Sui Huang a number of shares of common stock that will represent 2% of the total outstanding shares of the Company;

The Company shall pay to Northwestern a non-creditable, non-refundable annual maintenance fee on each anniversary of the closing date according to the following schedule until the Company receives regulatory approval from the Federal Drug Administration (or foreign equivalent) ("Regulatory Approval") of the first Licensed Product(s):

Time Periods	Amount
1st anniversary	0
2nd-4th anniversaries	$7,000
5th and 6th anniversaries	$25,000
7th anniversary and each year thereafter	$50,000

In the first full calendar year following Regulatory Approval, Northwestern shall credit 1/12 of the annual maintenance fee paid by the Company against the minimal royalty payments (see item (e) below) due for each full month remaining between January 1 of that year and the anniversary of the closing date.

The following non-creditable and non-refundable milestone payments upon the achievement of particular milestones in the development of Licensed Products (none of which have occurred):

(1)

$25,000 upon filing of Investigational New Drug application for a Licensed Product

(2)

$50,000 upon dosing first patient in Phase I trial (or foreign equivalent) for a Licensed Product

(3)

$100,000 upon dosing first patient in Phase II trial (or foreign equivalent) for a Licensed Product

(4)

$250,000 upon dosing first patient in Phase III trial (or foreign equivalent) for a Licensed Product

(5)

$1,500,000 upon Regulatory Approval of a Licensed Product

Beginning the first full calendar year after Regulatory Approval of a Licensed Product in the United States, Canada, Japan, France, Germany, United Kingdom, Australia, or Italy, or the year 2025, whichever comes first, the Company shall pay to Northwestern minimum royalty payments of $200,000 per year, on a quarterly basis.

The Company will reimburse Northwestern's out of pocket patent expenses totaling approximately $25,000 as of November 18, 2014. All future patent costs for the preparation, filing, prosecution, and maintenance of the Patent Rights, shall be borne by the Company. Payment will be deferred until the earlier of a) the date the Company closes on its first round of financing after the closing date or b) 1 year from the closing date;

A running royalty of (a) 5% of net sales of Licensed Products if such Licensed Product is covered by Patent Rights in the country where such Licensed Product is manufactured or sold and (b) 2% of net sales of Licensed Products in all other countries. In the event that Licensee enters into other license agreements) with third parties with respect to intellectual property which in the Company's opinion is legally required for the manufacture, use or sale of Licensed Product(s), the Company may offset amounts paid to such third parties against earned royalties due Northwestern hereunder, by reducing Licensee's obligation to Northwestern by 0.25% for each 1% of royalty rate payable to third parties; provided, however, that in no event will the royalty rate otherwise due to Northwestern be less than 2.5%;

In addition to the running royalties described above, 15% of any payments, including, but not limited to, sublicense issue fees or milestones received from sub licensees as consideration for Patent Rights or Licensed Products prior to filing of an NDA; 5% after filing an NDA;

In the event of a corporate partnership for the development and/or commercialization of a Licensed Product, 10% of any payments received from such corporate partner as consideration for Patent Rights or Licensed Products. Payments received by the Company for equity and payments allocated solely for research are excluded;

The Company subject to certain payments if the Company issues sublicenses, permit assignments on the agreement, or in the event of a corporate partnership for the development and /or commercialization of a licensed product.

In the event of a permitted assignment of the agreement, 10% of any payments received from such assignee as consideration for Patent Rights or Licensed Products.

The agreement will continue in effect, on a country-by country basis, until the expiration of the last to expire of Patent Rights.

License Agreement with University of Rochester

On April 16, 2015, the Company entered into an exclusive patent license agreement with University of Rochester ("Rochester") effective as of the 31^st day of March, 2015. Rochester grants to the Company a worldwide exclusive, royalty-bearing license, with the right to sublicense, for patents and technology related to the treatment of diabetes (the "Patent Products"). According to the agreement, the Company will reimburse Rochester for all mutually agreed fees and costs relating to the filing, prosecution, and maintenance of patent applications, including without limitation, interferences, oppositions, and reexaminations, and the maintenance and defense of patents in patent rights, including fees and cost incurred on, and after the closing date of the agreement.

As partial consideration for the rights conveyed by Rochester under this agreement, the Company agreed to issue 32,310 shares of the Company's common stock to Rochester as a one-time, non-refundable, non-creditable license issue fee valued at $200,000 based upon the average price per share in the week preceding the closing date. The transaction was completed on April 30, 2015. Rochester may not transfer the shares before August 30, 2016.

In addition to the above license fee, for the term of the agreement on an annual basis measured from the closing date of the agreement, the Company will pay at the beginning of the year a non-refundable minimum annual maintenance fee of $15,000 in cash or Company stock each year prior to the onset of clinical trials. Rochester will waive the pre-clinical trial annual maintenance fee if the Company spends at least $200,000 annually on the drug development that would impinge the patent rights conveyed. After onset of clinical trials, the Company will pay a non-refundable minimum annual maintenance fee of $25,000 in cash or Company stock each year or part of year until the first product is commercialized and sales royalty payments begin. Annual maintenance fees paid in cash will be credited against the costs of maintaining the Patent Rights for that year.

During the term of this Agreement, the Company agrees to pay to Rochester an earned royalty of 5% of the first $10,000,000, 4% of the second $10,000,000, 3% of the third $10,000,000, 2% of the fourth $10,000,000 in net sales revenue produced from Patent Products, and l % of all remaining net sales revenue produced from Patent Products. Earned royalty payments are due and payable within 30 days of the end of each calendar quarter.

The Company agrees to pay to Rochester 50% of all cash and non-cash consideration derived from sublicenses granted by the Company in Patent Products, excluding earned royalties, loans, equity investments, and research and development support.

The Company agrees to pay Rochester the milestone payments per product as set forth below:

If the Company sponsors Phase I, II and III clinical trials, the Company will pay $500,000 within 30 days of approval of any Patent Product;

If the Company sells a controlling interest in or sublicenses substantially all of the Patent Products before the initiation of Phase II clinical trial, the Company will pay:

$200,000 within 30 days of initiation of Phase II clinical trial;

$200,000 within 30 days of initiation of Phase III clinical trial; and

$300,000 within 30 days of approval of a Patent Product

The term of this Agreement will commence on the closing date and will end upon the latest of (i) expiration of the last-to-expire valid claim of the Patent Products; and (ii) the 10 year anniversary of commercial launch of any Patent Product.

Asset Purchase Agreement

On April 6, 2015, the Company entered into an asset acquisition agreement with Faulk Pharmaceuticals, Inc. ("Faulk"). The assets include 23 granted patents owned by Faulk, related to treatment of cancer, virus infections, and treatment of parasitic infections.

The Company agreed to issue 50,000 shares of common stock of the Company at the closing, which is anticipated to be in June 2015. The shares may be sold by Faulk, assigned or transfer in the open market subject to compliance with securities laws and the following schedule:

33% of the shares beginning 6 months after the closing date;

an additional 33% of the shares beginning 9 months after the closing date; and

the remaining 34% of the shares beginning 12 months after the closing date.

For each calendar year continuing until the date that is 10 years after the expiration of the last of the patents conveyed to the Company, a royalty on net revenue received by the Company in that year from the sales or licenses of any products commercialized by the Company, its successors or assignees as a direct result of the assets acquired or the technology or processes related to the assets acquired, in the following amount:

5% of the first $10,000,000 in such net revenue;

4% of the second $10,000,000 in such net revenue;

3% of the third $10,000,000 in such net revenue;

2% of the forth $10,000,000 in such net revenue; and

1 % of such net revenue in excess of $40,000,000.

Capital stock issuances

On February 4, 2015, the Board of Directors approved the issuance of 1,345,000 shares of restricted common stock to the directors for their service. The shares will be earned as follows:

33% of the restriction will be removed on February 4, 2016,

an additional 33% of the restriction will be removed on February 4, 2017, and

the final 34% of the restriction will be removed on February 4, 2018.

The closing price on February 4, 2015 was $2.60, the date of the grant. As of the date of this filing, the shares have not been issued.

On April 2, 2015, the Board of Directors approved the issuance of 50,000 (as described above) shares to purchase the assets of Faulk. The shares will be valued on the date of closing of the purchase of the assets. As of the date of this filing, the shares have not been issued.

On April 2, 2015, the Board of Directors approved the issuance of 260,000 shares of restricted common stock to two directors and officers of the Company for services. The shares will be earned as follows:

33% of the restriction will be removed on April 2, 2016,

an additional 33% of the restriction will be removed on April 2, 2017, and

the final 34% of the restriction will be removed on April 2, 2018.

The closing share price on April 2, 2015 was $6.95, the date of the grant. As of the date of this filing, the shares have not been issued.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

Except for historical information, this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements involve risks and uncertainties, including, among other things, statements regarding our business strategy, future revenues and anticipated costs and expenses. Such forward-looking statements include, among others, those statements including the words "expects," "anticipates," "intends," "believes" and similar language. Our actual results may differ significantly from those projected in the forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed herein as well as in the "Description of Business – Risk Factors" section in our Annual Report, Form 10-K, as filed on June 15, 2015. You should carefully review the risks described in our Annual Report and in other documents we file from time to time with the Securities and Exchange Commission. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this report. We undertake no obligation to publicly release any revisions to the forward-looking statements or reflect events or circumstances after the date of this document.

Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements.

All references in this Form 10-Q to the "Company," "NEF Enterprises," "Panther Biotechnology" "we," "us," or "our" are to Panther Biotechnology, Inc.

Results of Operations

The following table provides selected financial data about our Company as of August 31, 2014 and May 31, 2014.

Balance Sheet Data:	August 31, 2014		May 31, 2014
Cash	$	38,430	$	70,269
Accounts receivable, net	$	21,716	$	18,105
Property, plant, and equipment, net	$	7,959	$	8,971
Total assets	$	105,373	$	129,333
Total liabilities	$	69,579	$	88,954
Stockholders' equity	$	35,794	$	40,379

The decrease in cash of $31,839 is attributed to the growth of our PubCo Reporting subsidiary and the payment of liabilities during the three-month period ended August 31, 2014. Our increase in accounts receivable, net of allowance for bad debts of $3,611, was due to increased revenue in the period. Our liabilities decreased $19,375 due to the pay down of payable and accrued liabilities.

The following summary of our results of operations, for the three months ended August 31, 2014 and 2013, should be read in conjunction with our consolidated financial statements, as included in this Form 10-Q.

The following summarizes our results of operations for the three months ended August 31, 2014 and 2013:

	2014			2013
Revenue	$	75,097		$	42,711
Cost of revenue		19,586			5,736
Gross profit		55,511			36,975
Total operating expenses		60,096			30,087
Net income (loss)	$	(4,585	)	$	6,888

Revenue

Our revenues were derived from our EDGAR, XBRL, SEDAR and accounting services at our PubCo Reporting subsidiary. We earned revenues of $75,097 and $42,711 during the three months ended August 31, 2014 and 2013, respectively. The increase in revenues is attributed to our growing customer base due to the advertising and marketing initiatives we undertook during the previous year ended May 31, 2014.

Gross profit

Our gross profit as a percentage of revenue was 74% and 87% for the three months ended August 31, 2014 and 2013, respectively. The current period decrease in gross profit as a percentage of revenue was primarily due to the increased costs in our software licensing and contractor fee services. These costs increased during the current period due to increased costs on software licensing for XBRL.

Expenses

Operating expenses for the three months ended August 31, 2014, increased $30,009 or 100% as compared to the comparative period in 2013. The increase in expenses can be attributed to mainly increased advertising and promotional fees, management fees, office and communication expenses as we have expanded operations significantly as compared to the period ended 2013.

Limited Operating History; Need for Additional Capital

There is limited historical financial information about us on which to base an evaluation of our performance. We are a development state company and generated limited revenues from operations. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources, possible delays in our rebranding efforts, and possible cost overruns due to the price and cost increases in supplies and services.

At present, we only have enough cash on hand to cover costs associated with running our operations at our PubCo Reporting operations..

Liquidity and Capital Resources

Currently we do not have sufficient capital to fund our business development for the next 12 months. We feel we do have enough funds to cover our professional fees for the next 12 months. The Company's operating subsidiary PubCo Reporting Services, Inc. is under no obligation to transfer funds to Panther Biotechnology, Inc., the holding company, funds to meet any of the obligations of the holding company. We have no committed source of outside future financing. Our current directors have provided some funds to cover some of the Company's costs.

Working Capital

	As of			As of
	August 31,			May 31,
	2014			2014

Current Assets		$	73,414		$	96,362
Current Liabilities			69,579			88,954
Working Capital		$	3,835		$	7,408

Cash Flows

	For The Three Months Ended August 31,
	2014				2013

Cash flows from operating activities		$	(41,839	)		$	9,594
Cash flows from financing activities			10,000				20,500
Net increase (decrease) in cash during period		$	(31,839	)		$	30,094

As of August 31, 2014, the Company's cash balance was $38,430 compared to $70,269 as of May 31, 2014 and our total assets were $105,373 compared with $129,333 as of May 31, 2014. The decrease in cash and total assets was primarily due the pay down of payables and accrued liabilities for the three-month period ended August 31, 2014.

As of August 31, 2014, the Company had total liabilities of $69,579 compared with $88,954 as of May 31, 2014. Our liabilities decrease $19,375 due to the use of cash to pay down payables and accrued liabilities.

As of August 31, 2014, the Company had working capital of $3,835 compared with $7,408 as of May 31, 2014. The decrease in working capital was primarily attributed to the pay down or payables and accrued liabilities during the three months ended August 31, 2014.

Cash Flow from Operating Activities

During the three months ended August 31, 2014, the Company used $41,839 in cash from operating activities, compared to the $9,594 of cash provided by operating activities during the three months ended August 31, 2013. The cash used from operating activities was attributed to the Company paying down prior accruals and payables in the current period.

Cash Flow from Financing Activities

During the three months ended August 31, 2014, the Company received $10,000 in cash from financing activities due from advances made by certain shareholders, compared to cash provided by financing activities of $20,500 for the three months ended August 31, 2013, due from again from advances made by certain shareholders.

Critical Accounting Policies

We prepare our consolidated financial statements in conformity with GAAP, which requires management to make certain estimates and apply judgments. We base our estimates and judgments on historical experience, current trends and other factors that management believes to be important at the time the consolidated financial statements are prepared. Due to the need to make estimates about the effect of matters that are inherently uncertain, materially different amounts could be reported under different conditions or using different assumptions. On a regular basis, we review our critical accounting policies and how they are applied in the preparation of our consolidated financial statements.

While we believe that the historical experience, current trends and other factors considered support the preparation of our consolidated financial statements in conformity with GAAP, actual results could differ from our estimates and such differences could be material.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a "smaller reporting company", we are not required to provide the information required by this Item.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of August 31, 2014, management assessed the effectiveness of our internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control--Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") and SEC guidance on conducting such assessments. Based on that evaluation, they concluded that, during the period covered by this report, such internal controls and procedures were not effective to detect the inappropriate application of US GAAP rules as more fully described below. This was due to deficiencies that existed in the design or operation of our internal controls over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses.

The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee, (2) lack of a majority of outside directors on our board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (3) inadequate segregation of duties consistent with control objectives; and (4) management dominated by a single individual without adequate compensating controls. The aforementioned material weaknesses were identified by our Chief Executive and Financial Officer in connection with the review of our financial statements as of August 31, 2014.

Management believes that the material weaknesses set forth above did not have an effect on our financial results. However, management believes that the lack of a functioning audit committee, which has been rectified as of the filing date of this document, and the lack of a majority of outside directors on our board of directors, which has also been rectified by the filing date of this document, results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.

Changes in Internal Controls

There have been no changes in our internal controls over financial reporting identified in connection with the evaluation required by paragraph (d) of Securities Exchange Act Rule 13a-15 or Rule 15d-15 that occurred in the quarter ended August 31, 2014 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

We know of no material, existing or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our company.

ITEM 1A. RISK FACTORS

As a "smaller reporting company", we are not required to provide the information required by this Item.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

We did not issue unregistered equity securities during the quarter ended August 31, 2014.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Exhibit Number	Description
(3)	(i) Articles of incorporation, (ii) Bylaws
3.1	Articles of Incorporation (Incorporated by reference to our Registration Statement on Form S-1 filed on February 6, 2013)
3.3	Bylaws (Incorporated by reference to our Registration Statement on Form S-1 filed on February 6, 2013)
(31)	Rule 13a-14(d)/15d-14(d) Certifications
31.1*	Section 302 Certification under the Sarbanes-Oxley Act of 2002 of the Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer
(32)	Section 1350 Certifications
32.1*	Section 906 Certification under the Sarbanes-Oxley Act of 2002 of the Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer
101**	Interactive Data Files
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document


*	Filed herewith
**	Furnished herewith. Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of any registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, and otherwise are not subject to liability under those sections.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	PANTHER BIOTECHNOLOGY, INC.

Dated: June 15, 2015
	/s/ Evan Levine
	Evan Levine,
	President and Chief Financial Officer
	Principal Executive Officer
	Principal Financial Officer

Probility Media Corp - FORM 10-Q - June 15, 2015

Attached files

Probility Media Corp Reports