Pharmacyte Biotech, Inc. Form 8-K Summary
Business Context and Reporting Period
This Current Report on Form 8-K was filed on December 30, 2015, by Pharmacyte Biotech, Inc., a Nevada corporation. The filing addresses two primary matters: a determination to restate previously issued financial statements and the grant of new stock options to executive officers.
Key Financial Metrics and Restatement Impact
The filing does not report current period revenue, cash flow, or operating margins. Instead, it details the preliminary impact of restating financial statements for the year ended April 30, 2015, and the interim periods ended July 31, 2015, and October 31, 2015. The restatement is due to the incorrect classification of certain warrants with cashless exercise provisions as liabilities rather than equity.
- Year Ended April 30, 2015: Total current liabilities were overstated by $492,049. The restated liability balance is $1,520,366. The impact on net loss is to be determined.
- Quarter Ended July 31, 2015: Reported net loss was $546,164; restated net loss is $1,008,467. Total current liabilities were overstated by $29,746, resulting in a restated balance of $1,156,440.
- Quarter Ended October 31, 2015: Reported net loss was $1,099,263; restated net loss is $1,129,009. For the six months ended October 31, 2015, the reported net loss was $1,645,425, increasing to $2,137,474 upon restatement. There is no effect on current liabilities for this period.
Material Changes and Executive Compensation
On December 30, 2015, the Board granted significant stock option awards to key executives as partial compensation:
- Kenneth L. Waggoner (CEO, President, General Counsel, Chairman): Granted an option to purchase 6,000,000 shares at an exercise price of $0.063 per share. Options vest monthly at 500,000 shares starting January 1, 2016. This replaces a previous agreement for 2,400,000 shares.
- Dr. Gerald W. Crabtree (COO): Granted an option to purchase 4,800,000 shares at an exercise price of $0.063 per share. Options vest monthly at 400,000 shares starting January 1, 2016. This replaces a previous agreement for 2,400,000 shares.
Outlook, Risks, and Contingencies
The Company is working with former and current auditors to refile the Annual Report on Form 10-K for the year ended April 30, 2015, and the Quarterly Reports on Form 10-Q for the quarters ended July 31, 2015, and October 31, 2015. The filing includes forward-looking statements regarding the timing and quantitative effects of the restatements. Management notes that final adjustments may differ materially from the preliminary estimates provided. The filing also clarifies that common stock transaction disclosures will be updated in footnotes, though this is not expected to have a material impact.
Investor Verification Checklist
- Verify the final restated net loss figures for the periods ended April 30, 2015, July 31, 2015, and October 31, 2015, once the 10-K and 10-Q filings are completed.
- Confirm the final adjusted balance sheet liabilities, specifically the reduction of $492,049 for the fiscal year 2015 and $29,746 for the quarter ended July 31, 2015.
- Review the amended Executive Compensation Agreements for Kenneth L. Waggoner and Dr. Gerald W. Crabtree to understand the full scope of the new option grants versus the original agreements.
- Monitor the timeline for the re-filing of the restated financial statements with the SEC.