Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | 13-May-15 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 31-Mar-15 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | CPMD | |
Entity Registrant Name | CANNAPHARMARX, INC. | |
Entity Central Index Key | 1081938 | |
Current Fiscal Year End Date | -19 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 18,444,075 |
Condensed_Balance_Sheets
Condensed Balance Sheets (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Current assets | ||
Cash and cash equivalents | $1,385,003 | $1,605,239 |
Prepaid expenses | 40,351 | 44,102 |
Total current assets | 1,425,354 | 1,649,341 |
Fixed Assets: | ||
Furniture and fixtures, net of $6,155 in accumulated depreciation | 96,644 | 97,701 |
Deposits on specialty pharmacy acquisition & prepaid financing costs | 75,000 | 50,000 |
Total Assets | 1,596,998 | 1,797,042 |
Current liabilities | ||
Accounts payable and accrued expenses | 201,130 | 137,772 |
Accrued legal settlement payable in cash - current portion | 250,000 | 205,000 |
Accrued legal settlement payable in stock | 1,597,500 | 1,597,500 |
Total current liabilities | 2,048,630 | 1,940,272 |
Accrued legal settlement payable in cash - noncurrent portion | 100,000 | 145,000 |
Total Liabilities | 2,148,630 | 2,085,272 |
Stockholders' Equity | ||
Preferred stock; $0.0001 par value, 10,000,000 shares authorized; no shares issued and outstanding | ||
Common stock, $0.0001 par value; 100,000,000 shares authorized; 17,677,407 and 17,374,407 issued and outstanding, respectively | 1,768 | 1,737 |
Additional paid in capital | 22,249,420 | 20,855,381 |
Retained deficit | -22,802,820 | -21,145,348 |
Total Stockholders' Equity | -551,632 | -288,230 |
Total Liabilities and Stockholders' Equity | $1,596,998 | $1,797,042 |
Condensed_Balance_Sheets_Paren
Condensed Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Accumulated depreciation | $6,155 | $6,155 |
Preferred stock, par value per share | $0.00 | $0.00 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value per share | $0.00 | $0.00 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 17,677,407 | 17,374,407 |
Common stock, shares outstanding | 17,677,407 | 17,374,407 |
Condensed_Statements_of_Operat
Condensed Statements of Operations (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Revenue | $0 | $0 |
Operating Expenses: | ||
Research and development | 160,842 | |
General and administrative | 556,284 | 21,108 |
Stock-based compensation: | ||
Stock-based compensation | 939,569 | |
Total operating expenses | 1,656,695 | 21,108 |
Income (loss) from operations | -1,656,695 | -21,108 |
Other income (expense) | ||
Interest income (expense) net | -777 | -4,530 |
Other income (expense) net | -777 | -4,530 |
Income (loss) before provision for income taxes | -1,657,472 | -25,638 |
Net loss | -1,657,472 | -25,638 |
Net loss per share (Basic and fully diluted) | ($0.09) | ($0.01) |
Weighted average number of common shares outstanding | 17,475,407 | 2,384,407 |
Research and Development [Member] | ||
Stock-based compensation: | ||
Stock-based compensation | 398,451 | |
General and Administrative [Member] | ||
Stock-based compensation: | ||
Stock-based compensation | $541,118 |
Condensed_Statement_of_Stockho
Condensed Statement of Stockholders' Equity (USD $) | Total | Common Stock [Member] | Paid in Capital [Member] | Retained Deficit [Member] |
Beginning Balance at Dec. 31, 2012 | ($197,628) | $238 | $16,874,643 | ($17,072,509) |
Beginning Balance, shares at Dec. 31, 2012 | 2,384,407 | |||
Net loss | -94,406 | -94,406 | ||
Ending Balance at Dec. 31, 2013 | -292,034 | 238 | 16,874,643 | -17,166,915 |
Beginning Balance, shares at Dec. 31, 2013 | 2,384,407 | |||
CPRX acquisition | 296,000 | 900 | 295,100 | |
CPRX acquisition, shares | 9,000,000 | |||
Debt relief in sale | 71,672 | 71,672 | ||
Common stock sold | 3,035,000 | 599 | 3,034,401 | |
Common stock sold, shares | 5,990,000 | |||
Stock-based compensation | 579,565 | 579,565 | ||
Net loss | -3,978,433 | -3,978,433 | ||
Ending Balance at Dec. 31, 2014 | -288,230 | 1,737 | 20,855,381 | -21,145,348 |
Ending Balance, shares at Dec. 31, 2014 | 17,374,407 | |||
Common stock sold | 454,501 | 31 | 454,470 | |
Common stock sold, shares | 303,000 | |||
Stock-based compensation | 939,569 | 939,569 | ||
Net loss | -1,657,472 | -1,657,472 | ||
Ending Balance at Mar. 31, 2015 | ($551,632) | $1,768 | $22,249,420 | ($22,802,820) |
Ending Balance, shares at Mar. 31, 2015 | 17,677,407 |
Condensed_Statement_of_Cash_Fl
Condensed Statement of Cash Flows (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Cash Flows From Operating Activities: | ||
Net loss | ($1,657,472) | ($25,638) |
Adjustments to reconcile net income to net cash provided by (used for) operating activities: | ||
Depreciation expense | 3,135 | 0 |
Stock-based compensation expense | 939,569 | 0 |
Compensatory loan increases | 15,000 | |
Changes in operating assets & liabilities: | ||
Decrease in prepaid expenses | 3,751 | |
Increase in accounts payable and accrued expenses | 63,358 | 510 |
Increase in accrued interest payable - related party | 4,081 | |
Net cash used for operating activities | -647,659 | -6,047 |
Cash Flows From Investing Activities: | ||
Purchase of fixed assets | -2,078 | |
Deposits paid toward specialty pharmacy acquisition & prepaid financing costs | -25,000 | |
Net cash used for investing activities | -27,078 | |
Cash Flows From Financing Activities: | ||
Proceeds from (paydowns of) related party loans | 6,047 | |
Proceeds from sales of common stock | 454,501 | |
Net cash provided by financing activities | 454,501 | 6,047 |
Net Increase (Decrease) In Cash | -220,236 | |
Cash At The Beginning Of The Period | 1,605,239 | |
Cash At The End Of The Period | 1,385,003 | |
Schedule of Non-Cash Investing and Financing Activities | ||
Related party loans | 15,000 | |
Supplemental Disclosure | ||
Cash paid for interest | 777 | |
Cash paid for income taxes | $500 |
Nature_of_Operations_and_Signi
Nature of Operations and Significant Accounting Policies | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Accounting Policies [Abstract] | |||||
Nature of Operations and Significant Accounting Policies | NOTE 1. | NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES | |||
NATURE OF OPERATIONS | |||||
BUSINESS | |||||
CannaPharmaRx, Inc. (together with its consolidated subsidiaries, the “Company”) is a Delaware corporation whose shares are publicly quoted on the OTCQB operated by the OTC Markets Group, Inc. The Company began trading under its new stock ticker symbol “CPMD,” effective as of March 21, 2015. We are an early-stage pharmaceutical company whose purpose is to advance cannabinoid research and discovery using proprietary formulation and drug delivery technology currently in development. | |||||
HISTORY | |||||
The Company was originally incorporated as Golden Dragon Holding Co. in the State of Delaware in December 2010 as a wholly-owned subsidiary of Concord Ventures, Inc. On May 9, 2014, the Company entered into a Share Purchase Agreement (the “Share Purchase Agreement”) with CannaPharmaRX, Inc., a Colorado corporation (“CannaRx”), and David Cutler, the former President, Chief Executive Officer, Chief Financial Officer and director of the Company. Under the Share Purchase Agreement, CannaRx purchased 1,421,120 restricted shares of the Company’s common stock from Mr. Cutler and an additional 9,000,000 restricted shares of the Company’s common stock directly from the Company. As a result of the Share Purchase Agreement, CannaRx is the Company’s largest stockholder. | |||||
On May 15, 2014, the Company entered into an Agreement and Plan of Merger (the “Plan of Merger”) pursuant to which CannaRx would become a subsidiary of the Company. In October 2014, the Company changed its legal name to CannaPharmaRx, Inc. During the fourth quarter of 2014, in light of the Cohen litigation described in Note 7 (Legal Proceedings), the parties determined to delay the closing of the transaction contemplated by the original Plan of Merger. On March 30, 2015, the parties to the Cohen litigation entered into a full settlement and release of claims agreement. With the Cohen litigation matter settled, on April 21, 2015, the Company entered into an Amended and Restated Agreement and Plan of Merger (the “Merger Agreement”) with CannaRx and CPHR Acquisition Corp., a Delaware Corporation and a wholly-owned subsidiary of the Company (“Acquisition Sub”), pursuant to which Acquisition Sub will merge with and into CannaRx with CannaRx remaining as the surviving corporation and wholly-owned subsidiary of the Company and the outstanding shares of CannaRx will be converted into 9,750,000 shares of the Company (the “Merger”). The Merger Agreement amends and restates in its entirety the Plan of Merger from May 2014. The Merger is subject to conditions to closing customary of transactions of this type, including, among others, CannaRx shareholder approval. The parties are proceeding to obtain approval of the Merger Agreement by the shareholders of CannaRx. Closing of the Merger is contemplated to occur in the second quarter of 2015, though no assurance can be given that this will occur. Upon the closing of the Merger, CannaRx will no longer be a stockholder of the Company, but the holders of CannaRx stock immediately prior to the Merger will become stockholders of the Company. | |||||
BASIS OF PRESENTATION | |||||
The accompanying unaudited interim financial statements have been prepared in accordance with the Financial Accounting Standards Board (“FASB”) “FASB Accounting Standard Codification™” (the “Codification”) which is the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) in the United States. Certain amounts in prior periods have been reclassified to conform to current presentation. | |||||
Operating results for the three months ended March 31, 2015 are not necessarily indicative of the results that may be expected for the year ended December 31, 2015. For more complete financial information, these unaudited financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2014 included in our Form 10-K filed with the SEC. | |||||
USE OF ESTIMATES | |||||
The preparation of our financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in these financial statements and accompanying notes. Actual results could differ from those estimates. Due to uncertainties inherent in the estimation process, it is possible that these estimates could be materially revised within the next year. | |||||
CASH AND CASH EQUIVALENTS | |||||
Cash and cash equivalents consist of cash and highly liquid debt instruments with original maturities of less than three months. | |||||
PROPERTY AND EQUIPMENT | |||||
The Company has acquired $102,800 in property and equipment, of which $100,721 was purchased during the year ended December 31, 2014, and another $2,078 purchased in the first quarter of 2015. Of this amount, $50,000 represents the capitalized cost of our proprietary RECRUIT RegistryTM website development. This patient registry project was completed in the fourth quarter of 2014, although it will not become operational until mid-2015. Accordingly, no depreciation expense was recorded against the capitalized cost of the RECRUIT Registry to date. | |||||
In addition to the investment in our patient registry, another $52,800 has been invested in office and computer equipment, primarily incurred since the establishment of the Company’s new headquarters in Carneys Point, New Jersey on November 1, 2014. Accumulated depreciation to date totaled $6,155 against this $52,800 of fixed assets actually placed in service. Depreciation expenses totaled $3,135 and $-0- in the quarters ended March 31, 2015 and March 31, 2014, respectively. Depreciation expense been calculated using the straight line method over the estimated useful lives of the respective assets, ranging from three to seven years. | |||||
DEFERRED COSTS AND OTHER OFFERING COSTS | |||||
Costs with respect to raising capital in the two private placements of the Company’s common stock were expensed by the Company both in 2014 and 2015. These costs were applied as internal operational expenses. We had no deferred costs and other stock offering costs as of either March 31, 2015 or December 31, 2014. | |||||
However, the Company did incur accumulated costs totaling $25,000 in the quarter ended March 31, 2015 associated with the proposed financing of a specialty pharmacy acquisition, the terms of which are currently being negotiated. No assurance can be provided that an agreement to complete such acquisition will be entered into or that such acquisition will be consummated. These non-refundable fees for underwriting and due diligence on behalf of the lenders will be amortized over the life of the loans(s). | |||||
Future costs associated with raising capital, be it debt or equity, may more likely be incurred as a direct variable cost with third parties. Our intent is to initially defer these costs and ultimately offset against the proceeds from these capital or financial transactions if successful, or expensed if the proposed financial transaction proves unsuccessful. | |||||
IMPAIRMENT OF LONG-LIVED AND INTANGIBLE ASSETS | |||||
In the event that facts and circumstances indicated that the cost of long-lived and intangible assets may be impaired, an evaluation of recoverability will be performed. If an evaluation is required, the estimated future undiscounted cash flows associated with the asset will be compared to the asset’s carrying amount to determine if a write-down to market value or discounted cash flow value will be required. | |||||
FAIR VALUES OF ASSETS AND LIABILITIES | |||||
The Company groups its financial assets and financial liabilities generally measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. | |||||
Level 1: | Valuation is based on quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities generally include debt and equity securities that are traded in an active exchange market. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities. | ||||
Level 2: | Valuation is based on observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. For example, Level 2 assets and liabilities may include debt securities with quoted prices that are traded less frequently than exchange-traded instruments. | ||||
Level 3: | Valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. This category generally includes certain private equity investments and long-term derivative contracts. | ||||
The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. As of March 31, 2015 and December 31, 2014, the Company does not have any assets or liabilities which are considered Level 2 or 3 in the hierarchy. | |||||
The Company may also be required, from time to time, to measure certain other financial assets at fair value on a nonrecurring basis. These adjustments to fair value usually result from application of lower-of-cost-or-market accounting or write-downs of individual assets. There were no such adjustments in the periods ended March 31, 2015, nor December 31, 2014. | |||||
FINANCIAL INSTRUMENTS | |||||
The estimated fair value for financial instruments was determined at discrete points in time based on relevant market information. These estimates involved uncertainties and could not be determined with exact precision. The fair value of the Company’s financial instruments, which include cash, prepaid expenses, accounts payable and the related party loan, each approximate their carrying value due either to their short length to maturity or interest rates that approximate prevailing market rates. | |||||
INCOME TAXES | |||||
We account for income taxes under the liability method, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statements and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. | |||||
ADVERTISING COSTS | |||||
Advertising and promotional costs are expensed as incurred. Advertising and promotional expenses totaled $1,157 in the quarter ended March 31, 2015 and $-0- for the quarter ended March 31, 2014. | |||||
COMPREHENSIVE INCOME (LOSS) | |||||
Comprehensive income is defined as all changes in stockholders’ equity (deficit), exclusive of transactions with owners, such as capital investments. Comprehensive income includes net income or loss, changes in certain assets and liabilities that are reported directly in equity such as translation adjustments on investments in foreign subsidiaries and unrealized gains (losses) on available-for-sale securities. From our inception, there have been no differences between our comprehensive loss and net loss. Our comprehensive loss was identical to our net loss for the three months ended March 31, 2015 and 2014. | |||||
INCOME (LOSS) PER SHARE | |||||
Income (loss) per share is presented in accordance with Accounting Standards Update (“ASU”), Earning per Share (Topic 260) which requires the presentation of both basic and diluted earnings per share (“EPS”) on the consolidated income statements. Basic EPS would exclude any dilutive effects of options, warrants and convertible securities but does include the restricted shares of common stock issued. Diluted EPS reflects the potential dilution that would occur if securities or other contracts to issue common stock were exercised or converted to common stock. Basic EPS calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted EPS calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. | |||||
Stock options outstanding at March 31, 2015 to purchase 4,275,000 shares of common stock are excluded from the calculations of diluted net loss per share since their effect is antidilutive. | |||||
STOCK-BASED COMPENSATION | |||||
We have adopted ASC Topic 718, Accounting for Stock-Based Compensation, which establishes a fair value method of accounting for stock-based compensation plans. In accordance with guidance now incorporated in ASC Topic 718, the cost of stock options and warrants issued to employees and non-employees is measured on the grant date based on the fair value. The fair value is determined using the Black-Scholes option pricing model. The resulting amount is charged to expense on the straight-line basis over the period in which we expect to receive the benefit, which is generally the vesting period. The fair value of stock warrants was determined at the date of grant using the Black-Scholes option pricing model. The Black-Scholes option model requires management to make various estimates and assumptions, including expected term, expected volatility, risk-free rate and dividend yield. | |||||
On November 1, 2014, the Company granted options to purchase shares of the Company’s common stock to each of its employees for a total of 4,800,000 options granted. Including the November 1, 2014 grant and all subsequent option grants, the Company has granted a total of 5,475,000 options. As a result of forfeitures, 4,275,000 options remain outstanding as of March 31, 2015. Stock-based compensation expenses totaled $939,569 and $-0- for the three months ended March 31, 2015 and March 31, 2014. | |||||
BUSINESS SEGMENTS | |||||
Our activities during the three months ended March 31, 2015 comprised a single segment. | |||||
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | |||||
On June 10, 2014, the FASB issued update ASU 2014-10, Development Stage Entities (Topic 915). Amongst other things, the amendments in this update removed the definition of development stage entity from Topic 915, thereby removing the distinction between development stage entities and other reporting entities from U.S. GAAP. In addition, the amendments eliminate the requirements for development stage entities to (1) present inception-to-date information on the statements of income, cash flows and stockholders’ equity, (2) label the financial statements as those of a development stage entity; (3) disclose a description of the development stage activities in which the entity is engaged and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. The amendments are effective for annual reporting periods beginning after December 31, 2014 and interim reporting periods beginning after December 15, 2015. However, entities are permitted to early adopt for any annual or interim reporting period for which the financial statements have yet to be issued. The Company has elected to early adopt these amendments, and accordingly, has not labeled the financial statements as those of a development stage entity and has not presented inception-to-date information on the respective financial statements. | |||||
We have reviewed all other recently issued, but not yet effective, accounting pronouncements and do not believe the future adoption of any such pronouncements may be expected to cause a material impact on our financial condition or the results of our operations. |
Going_Concern_and_Liquidity
Going Concern and Liquidity | 3 Months Ended | |
Mar. 31, 2015 | ||
Accounting Policies [Abstract] | ||
Going Concern and Liquidity | NOTE 2. | GOING CONCERN AND LIQUIDITY |
The Company had cash on hand of $1,385,003 as of March 31, 2015, but no revenue-producing business or other sources of income. Additionally, the Company had outstanding liabilities totaling $2,148,630 (of which $1,597,500 subsequently was settled in May 2015 with the issuance of common stock) and a stockholders’ deficit of $551,632. | ||
We had a working capital deficit of $623,276 at March 31, 2015 (which includes an offset of $1,597,500 in current liabilities that subsequently was settled in stock in May 2015) and reported an accumulated deficit since inception (January 1, 2011) of $551,632 as of March 31, 2015. | ||
In our financial statements for the fiscal years ended December 31, 2014 and 2013, the Report of the Independent Registered Public Accounting Firm includes an explanatory paragraph that describes substantial doubt about our ability to continue as a going concern. These financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. It is our current intention to raise debt and/or equity financing to fund ongoing operating expenses. There is no assurance that these events will be satisfactorily completed or at terms acceptable to the Company. Any issuance of equity securities, if accomplished, could cause substantial dilution to existing stockholders. |
Assets
Assets | 3 Months Ended | |
Mar. 31, 2015 | ||
Accounting Policies [Abstract] | ||
Assets | NOTE 3. | ASSETS |
As of March 31, 2015, we had $1,425,354 in current assets, primarily comprised of: $1,385,003 in cash on deposit in a bank and $40,351 in prepaid insurance, $96,644 in furniture and fixtures, net of $6,155 in accumulated depreciation, and $75,000 on deposit related to the proposed acquisition of a specialty pharmacy and prepaid financing fees associated with this acquisition, the terms of which are currently being negotiated. No assurance can be provided that an agreement to complete such acquisition will be entered into or that such acquisition will be consummated. |
Accounts_Payable_and_Accrued_E
Accounts Payable and Accrued Expenses | 3 Months Ended | |
Mar. 31, 2015 | ||
Payables and Accruals [Abstract] | ||
Accounts Payable and Accrued Expenses | NOTE 4. | ACCOUNTS PAYABLE AND ACCRUED EXPENSES |
As of March 31, 2015, the balance of accounts payable and accrued expenses was $201,130, which is primarily comprised of trade payables and accrued salaries and wages and legal fees. |
Commitments
Commitments | 3 Months Ended | |
Mar. 31, 2015 | ||
Commitments and Contingencies Disclosure [Abstract] | ||
Commitments | NOTE 5. | COMMITMENTS |
OPERATING LEASE | ||
The Company has a non-cancellable operating lease for its headquarters located in Carneys Point, New Jersey. The term of this lease extends until October 31, 2015. The remaining lease commitment totals $25,879 as of March 31, 2015. |
Litigation_and_Accrued_Settlem
Litigation and Accrued Settlement Liabilities | 3 Months Ended | |
Mar. 31, 2015 | ||
Commitments and Contingencies Disclosure [Abstract] | ||
Litigation and Accrued Settlement Liabilities | NOTE 6. | LITIGATION AND ACCRUED SETTLEMENT LIABILITIES |
On October 30, 2014, Gary M. Cohen (“Cohen”), former President, Chief Operating Officer and board member of CannaRx, a privately-held Colorado corporation, filed a lawsuit against CannaRx and individual officer and board member, Gary Herick. On November 26, 2014, Cohen filed an amended complaint naming the Company and Gerald Crocker, James Smeeding, Robert Liess and Mathew Sherwood. In his amended complaint, Cohen alleged various employment-related contract and wrongful termination claims, as well as claims alleging breach of fiduciary duty, misappropriation of assets, violations of corporate law regarding his access to internal corporate information, and alleged violations of U.S. federal securities laws, the Sarbanes-Oxley Act of 2002 and the U.S. Internal Revenue Code. Cohen’s claims arose out of the removal of Cohen as an officer and board member of CannaRx, which occurred on or about October 23, 2014. The defendants successfully removed Cohen’s lawsuit from state court in Hillsborough County, Florida—where it was filed originally—to the U.S. District Court in Tampa, Florida. | ||
On November 11, 2014, the Company, under its former name Golden Dragon Holding Co. (“GDHC”), sued Cohen in U.S. District Court in New Jersey for libel and tortious interference. | ||
On March 30, 2015, the Company executed a Confidential Settlement and Release of Claims Agreement dated March 30, 2015 by and between the Company, CannaRx, Cohen and the other individuals named above (the “Settlement Agreement”). Pursuant to the terms of the Settlement Agreement, the lawsuit filed in Florida on October 30, 2014 against the Company, Canna Colorado, Herick, Crocker, Smeeding, Sherwood and Liess by Cohen has been resolved and dismissed. The parties amicably resolved their differences before any discovery occurred or before any decision by the court on the merits of any claims. The Company and all the individuals who had been sued categorically denied of all Mr. Cohen’s claims and allegations, maintained that the allegations were false and were prepared to assert counterclaims of their own. As part of the parties’ resolution, Cohen has agreed to retract his allegations. | ||
As part of the Settlement Agreement, the Company agreed to purchase all of Mr. Cohen’s 2,250,000 shares of CannaRx for a purchase price of $350,000, with $85,000 payable up front and the remainder payable in equal installments of $15,000 per month over the next 17 months, and a payment of $10,000 in the eighteenth month. The amount of cash payable in the next year of $250,000 is included in current liabilities. In addition, the Company agreed to issue 600,000 unregistered restricted shares of its common stock to Mr. Cohen as part of the Settlement Agreement. The Company valued those shares at $1,597,500 based on the trading average of the Company’s stock over the ten days preceding entry into the Settlement Agreement and recorded an expense in such amount during the period ended December 31, 2014. The liability associated with the obligation to deliver 600,000 shares is reflected in current liabilities as of both March 31, 2015 and December 31, 2014. These shares subsequently were issued by the Company to Mr. Cohen on May 4, 2015 in full settlement of the stock portion of liability and $100,000 has been paid to Mr. Cohen in cash through May 12, 2015 in accordance with the settlement payment terms, leaving a remaining liability of $250,000 as of May 12, 2015 to be paid in cash in the future. | ||
In addition, the Company and Cohen have resolved their differences in the Company’s lawsuit filed against Cohen on November 11, 2014 in New Jersey. The Company has dismissed its claims against Cohen of libel and tortious interference. |
Stockholders_Equity
Stockholders' Equity | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Equity [Abstract] | |||||||||||||
Stockholders' Equity | NOTE 7. | STOCKHOLDERS’ EQUITY | |||||||||||
PREFERRED STOCK | |||||||||||||
The Company is authorized, without further action by the shareholders, to issue up to 10,000,000 shares of one or more series of preferred stock, at a par value of $0.0001, all of which is nonvoting. The Board of Directors may, without shareholder approval, determine the dividend rates, redemption prices, preferences on liquidation or dissolution, conversion rights, voting rights and any other preferences. No shares of preferred stock were issued or outstanding as of March 31, 2015. | |||||||||||||
COMMON STOCK | |||||||||||||
The Company is authorized to issue 100,000,000 shares of common stock, par value $0.0001 per share. As of March 31, 2015, 17,677,407 shares of common stock were issued and outstanding and an additional 9,750,000 shares of common stock are reserved for issuance pursuant to the Merger Agreement. | |||||||||||||
RECENT ISSUANCES OF COMMON STOCK | |||||||||||||
In March 2015, the Company began offering in a private placement of shares of its unregistered restricted common stock to accredited investors at $1.50 per share (the “Private Placement”). Two closings have occurred under the Private Placement. Through March 31, 2015 the Company issued a total of 303,001 shares in exchange for $454,501 of anticipated gross proceeds. On April 23, 2015, an additional 166,667 shares were issued for a total of $250,000 in gross proceeds, resulting in an aggregate total of 469,668 shares to date in the offering and $704,501 in gross proceeds. | |||||||||||||
WARRANTS | |||||||||||||
On January 20, 2015, the Company issued a 3-year warrant (the “First Warrant”) to Viridian Capital & Research, LLC (“VCR”) as compensation for the services rendered by VCR in connection with the delivery of a company report describing the business, technology and products, markets, growth strategy and financial aspects of the Company. The First Warrant is exercisable into 244,283 of the Company’s fully-diluted common shares at an exercise price equal to the price per share of the Company’s common stock on the 10 days preceding January 20, 2015 or $2.90. The First Warrant has a 3-year life, a cashless exercise provision and is fully transferable with the Company’s approval, which shall not be unreasonably withheld. The First Warrant is callable on 60 days’ notice if (i) the Company’s common stock trades on the NASDAQ and (ii) the Company’s common stock trades at three times the exercise price of the First Warrant for 20 consecutive trading days. | |||||||||||||
On February 23, 2015, the Company issued another 3-year warrant (the “Second Warrant,” and together with the First Warrant, the “VCR Warrants”) to VCR as compensation for VCR’s services in managing and implementing investor relations strategies designed to enhance the Company’s presence, reach and mindshare with the U.S. investment community and industry. The Second Warrant is exercisable into 244,283 of the Company’s fully-diluted common shares at an exercise price equal to the price per share of the Company’s common stock on the 10 days preceding February 23, 2015 or $2.50. The Second Warrant has a 3-year life, a cashless exercise provision and is fully transferable with the Company’s approval, which shall not be unreasonably withheld. The Second Warrant is callable on 60 days’ notice if (i) the Company’s common stock trades on the NASDAQ and (ii) the Company’s common stock trades at three times the exercise price of the Second Warrant for 20 consecutive trading days. | |||||||||||||
STOCK OPTIONS | |||||||||||||
To date, the following stock options were issued and outstanding to employees, which were not issued pursuant to a formal equity compensation plan: | |||||||||||||
For the Three Months Ended | |||||||||||||
March 31, 2015 | |||||||||||||
Shares | Option | Weighted | |||||||||||
Price | Average | ||||||||||||
Price | |||||||||||||
Outstanding Options at Beginning of Period | 3,600,000 | $ | 3.78 | $ | 3.78 | ||||||||
Options Granted | 675,000 | $ | 3 | $ | 3 | ||||||||
Options Forfeited | — | — | — | ||||||||||
Options Outstanding at End of Period | 4,275,000 | $ | 3.66 | $ | 3.66 | ||||||||
Options Exercisable at End of Period | — | ||||||||||||
Effective November 1, 2014, the Company issued options to purchase 4,800,000 shares at an exercise price of $3.78 per share. During the first quarter of 2015, the Company issued additional options to purchase 675,000 shares to newly hired employees at an average weighted exercise price of $3.00 per share. The exercise price was determined based on the closing stock price quoted on the day prior to their issuance. The options vest over a three year period from the date of issuance, one-third at each anniversary date. | |||||||||||||
As a result of the 2014 and 2015 stock option activity to date, the Company has recorded aggregate stock-based compensation charges of $939,569 in the quarter ended March 31, 2015. | |||||||||||||
Stock-based compensation charges remaining to be amortized total $10,467,212 at March 31, 2015. These remaining stock-based compensation charges will be amortized to expense over the remaining vesting period through March 2018 in accordance with their vesting schedules. |
Income_Taxes
Income Taxes | 3 Months Ended | |
Mar. 31, 2015 | ||
Income Tax Disclosure [Abstract] | ||
Income Taxes | NOTE 8. | INCOME TAXES |
We have had losses since our inception (January 1, 2011) and therefore have not been subject to federal or state income taxes since our inception. As of March 31, 2015, the Company has approximately $2,464,000 and $2,256,000 of federal and state net operating loss carryforwards, respectively. The federal net operating loss carryforwards begin to expire in 2030 and the state net operating loss carryforwards begin to expire in 2034. |
Subsequent_Events
Subsequent Events | 3 Months Ended | |
Mar. 31, 2015 | ||
Subsequent Events [Abstract] | ||
Subsequent Events | NOTE 9. | SUBSEQUENT EVENTS |
We have evaluated subsequent events through the date of this filing and note there have been no events that would require disclosure in this report, other than (i) the entry into the Amended and Restated Merger Agreement discussed in Note 1 above, (ii) the litigation settlement agreement between the Company and Mr. Cohen discussed in Note 6 above and (iii) the April 2015 issuance of common stock as a result of the private placement started in March 2015 discussed in Note 7 above. |
Nature_of_Operations_and_Signi1
Nature of Operations and Significant Accounting Policies (Policies) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Accounting Policies [Abstract] | |||||
NATURE OF OPERATIONS | NATURE OF OPERATIONS | ||||
BUSINESS | |||||
CannaPharmaRx, Inc. (together with its consolidated subsidiaries, the “Company”) is a Delaware corporation whose shares are publicly quoted on the OTCQB operated by the OTC Markets Group, Inc. The Company began trading under its new stock ticker symbol “CPMD,” effective as of March 21, 2015. We are an early-stage pharmaceutical company whose purpose is to advance cannabinoid research and discovery using proprietary formulation and drug delivery technology currently in development. | |||||
HISTORY | |||||
The Company was originally incorporated as Golden Dragon Holding Co. in the State of Delaware in December 2010 as a wholly-owned subsidiary of Concord Ventures, Inc. On May 9, 2014, the Company entered into a Share Purchase Agreement (the “Share Purchase Agreement”) with CannaPharmaRX, Inc., a Colorado corporation (“CannaRx”), and David Cutler, the former President, Chief Executive Officer, Chief Financial Officer and director of the Company. Under the Share Purchase Agreement, CannaRx purchased 1,421,120 restricted shares of the Company’s common stock from Mr. Cutler and an additional 9,000,000 restricted shares of the Company’s common stock directly from the Company. As a result of the Share Purchase Agreement, CannaRx is the Company’s largest stockholder. | |||||
On May 15, 2014, the Company entered into an Agreement and Plan of Merger (the “Plan of Merger”) pursuant to which CannaRx would become a subsidiary of the Company. In October 2014, the Company changed its legal name to CannaPharmaRx, Inc. During the fourth quarter of 2014, in light of the Cohen litigation described in Note 7 (Legal Proceedings), the parties determined to delay the closing of the transaction contemplated by the original Plan of Merger. On March 30, 2015, the parties to the Cohen litigation entered into a full settlement and release of claims agreement. With the Cohen litigation matter settled, on April 21, 2015, the Company entered into an Amended and Restated Agreement and Plan of Merger (the “Merger Agreement”) with CannaRx and CPHR Acquisition Corp., a Delaware Corporation and a wholly-owned subsidiary of the Company (“Acquisition Sub”), pursuant to which Acquisition Sub will merge with and into CannaRx with CannaRx remaining as the surviving corporation and wholly-owned subsidiary of the Company and the outstanding shares of CannaRx will be converted into 9,750,000 shares of the Company (the “Merger”). The Merger Agreement amends and restates in its entirety the Plan of Merger from May 2014. The Merger is subject to conditions to closing customary of transactions of this type, including, among others, CannaRx shareholder approval. The parties are proceeding to obtain approval of the Merger Agreement by the shareholders of CannaRx. Closing of the Merger is contemplated to occur in the second quarter of 2015, though no assurance can be given that this will occur. Upon the closing of the Merger, CannaRx will no longer be a stockholder of the Company, but the holders of CannaRx stock immediately prior to the Merger will become stockholders of the Company. | |||||
BASIS OF PRESENTATION | BASIS OF PRESENTATION | ||||
The accompanying unaudited interim financial statements have been prepared in accordance with the Financial Accounting Standards Board (“FASB”) “FASB Accounting Standard Codification™” (the “Codification”) which is the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) in the United States. Certain amounts in prior periods have been reclassified to conform to current presentation. | |||||
Operating results for the three months ended March 31, 2015 are not necessarily indicative of the results that may be expected for the year ended December 31, 2015. For more complete financial information, these unaudited financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2014 included in our Form 10-K filed with the SEC. | |||||
USE OF ESTIMATES | USE OF ESTIMATES | ||||
The preparation of our financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in these financial statements and accompanying notes. Actual results could differ from those estimates. Due to uncertainties inherent in the estimation process, it is possible that these estimates could be materially revised within the next year. | |||||
CASH AND CASH EQUIVALENTS | CASH AND CASH EQUIVALENTS | ||||
Cash and cash equivalents consist of cash and highly liquid debt instruments with original maturities of less than three months. | |||||
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT | ||||
The Company has acquired $102,800 in property and equipment, of which $100,721 was purchased during the year ended December 31, 2014, and another $2,078 purchased in the first quarter of 2015. Of this amount, $50,000 represents the capitalized cost of our proprietary RECRUIT RegistryTM website development. This patient registry project was completed in the fourth quarter of 2014, although it will not become operational until mid-2015. Accordingly, no depreciation expense was recorded against the capitalized cost of the RECRUIT Registry to date. | |||||
In addition to the investment in our patient registry, another $52,800 has been invested in office and computer equipment, primarily incurred since the establishment of the Company’s new headquarters in Carneys Point, New Jersey on November 1, 2014. Accumulated depreciation to date totaled $6,155 against this $52,800 of fixed assets actually placed in service. Depreciation expenses totaled $3,135 and $-0- in the quarters ended March 31, 2015 and March 31, 2014, respectively. Depreciation expense been calculated using the straight line method over the estimated useful lives of the respective assets, ranging from three to seven years. | |||||
DEFERRED COSTS AND OTHER OFFERING COSTS | DEFERRED COSTS AND OTHER OFFERING COSTS | ||||
Costs with respect to raising capital in the two private placements of the Company’s common stock were expensed by the Company both in 2014 and 2015. These costs were applied as internal operational expenses. We had no deferred costs and other stock offering costs as of either March 31, 2015 or December 31, 2014. | |||||
However, the Company did incur accumulated costs totaling $25,000 in the quarter ended March 31, 2015 associated with the proposed financing of a specialty pharmacy acquisition, the terms of which are currently being negotiated. No assurance can be provided that an agreement to complete such acquisition will be entered into or that such acquisition will be consummated. These non-refundable fees for underwriting and due diligence on behalf of the lenders will be amortized over the life of the loans(s). | |||||
Future costs associated with raising capital, be it debt or equity, may more likely be incurred as a direct variable cost with third parties. Our intent is to initially defer these costs and ultimately offset against the proceeds from these capital or financial transactions if successful, or expensed if the proposed financial transaction proves unsuccessful. | |||||
IMPAIRMENT OF LONG-LIVED AND INTANGIBLE ASSETS | IMPAIRMENT OF LONG-LIVED AND INTANGIBLE ASSETS | ||||
In the event that facts and circumstances indicated that the cost of long-lived and intangible assets may be impaired, an evaluation of recoverability will be performed. If an evaluation is required, the estimated future undiscounted cash flows associated with the asset will be compared to the asset’s carrying amount to determine if a write-down to market value or discounted cash flow value will be required. | |||||
FAIR VALUES OF ASSETS AND LIABILITIES | FAIR VALUES OF ASSETS AND LIABILITIES | ||||
The Company groups its financial assets and financial liabilities generally measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. | |||||
Level 1: | Valuation is based on quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities generally include debt and equity securities that are traded in an active exchange market. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities. | ||||
Level 2: | Valuation is based on observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. For example, Level 2 assets and liabilities may include debt securities with quoted prices that are traded less frequently than exchange-traded instruments. | ||||
Level 3: | Valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. This category generally includes certain private equity investments and long-term derivative contracts. | ||||
The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. As of March 31, 2015 and December 31, 2014, the Company does not have any assets or liabilities which are considered Level 2 or 3 in the hierarchy. | |||||
The Company may also be required, from time to time, to measure certain other financial assets at fair value on a nonrecurring basis. These adjustments to fair value usually result from application of lower-of-cost-or-market accounting or write-downs of individual assets. There were no such adjustments in the periods ended March 31, 2015, nor December 31, 2014. | |||||
FINANCIAL INSTRUMENTS | FINANCIAL INSTRUMENTS | ||||
The estimated fair value for financial instruments was determined at discrete points in time based on relevant market information. These estimates involved uncertainties and could not be determined with exact precision. The fair value of the Company’s financial instruments, which include cash, prepaid expenses, accounts payable and the related party loan, each approximate their carrying value due either to their short length to maturity or interest rates that approximate prevailing market rates. | |||||
INCOME TAXES | INCOME TAXES | ||||
We account for income taxes under the liability method, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statements and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. | |||||
ADVERTISING COSTS | ADVERTISING COSTS | ||||
Advertising and promotional costs are expensed as incurred. Advertising and promotional expenses totaled $1,157 in the quarter ended March 31, 2015 and $-0- for the quarter ended March 31, 2014. | |||||
COMPREHENSIVE INCOME (LOSS) | COMPREHENSIVE INCOME (LOSS) | ||||
Comprehensive income is defined as all changes in stockholders’ equity (deficit), exclusive of transactions with owners, such as capital investments. Comprehensive income includes net income or loss, changes in certain assets and liabilities that are reported directly in equity such as translation adjustments on investments in foreign subsidiaries and unrealized gains (losses) on available-for-sale securities. From our inception, there have been no differences between our comprehensive loss and net loss. Our comprehensive loss was identical to our net loss for the three months ended March 31, 2015 and 2014. | |||||
INCOME (LOSS) PER SHARE | INCOME (LOSS) PER SHARE | ||||
Income (loss) per share is presented in accordance with Accounting Standards Update (“ASU”), Earning per Share (Topic 260) which requires the presentation of both basic and diluted earnings per share (“EPS”) on the consolidated income statements. Basic EPS would exclude any dilutive effects of options, warrants and convertible securities but does include the restricted shares of common stock issued. Diluted EPS reflects the potential dilution that would occur if securities or other contracts to issue common stock were exercised or converted to common stock. Basic EPS calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted EPS calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. | |||||
Stock options outstanding at March 31, 2015 to purchase 4,275,000 shares of common stock are excluded from the calculations of diluted net loss per share since their effect is antidilutive. | |||||
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION | ||||
We have adopted ASC Topic 718, Accounting for Stock-Based Compensation, which establishes a fair value method of accounting for stock-based compensation plans. In accordance with guidance now incorporated in ASC Topic 718, the cost of stock options and warrants issued to employees and non-employees is measured on the grant date based on the fair value. The fair value is determined using the Black-Scholes option pricing model. The resulting amount is charged to expense on the straight-line basis over the period in which we expect to receive the benefit, which is generally the vesting period. The fair value of stock warrants was determined at the date of grant using the Black-Scholes option pricing model. The Black-Scholes option model requires management to make various estimates and assumptions, including expected term, expected volatility, risk-free rate and dividend yield. | |||||
On November 1, 2014, the Company granted options to purchase shares of the Company’s common stock to each of its employees for a total of 4,800,000 options granted. Including the November 1, 2014 grant and all subsequent option grants, the Company has granted a total of 5,475,000 options. As a result of forfeitures, 4,275,000 options remain outstanding as of March 31, 2015. Stock-based compensation expenses totaled $939,569 and $-0- for the three months ended March 31, 2015 and March 31, 2014. | |||||
BUSINESS SEGMENTS | BUSINESS SEGMENTS | ||||
Our activities during the three months ended March 31, 2015 comprised a single segment. | |||||
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | ||||
On June 10, 2014, the FASB issued update ASU 2014-10, Development Stage Entities (Topic 915). Amongst other things, the amendments in this update removed the definition of development stage entity from Topic 915, thereby removing the distinction between development stage entities and other reporting entities from U.S. GAAP. In addition, the amendments eliminate the requirements for development stage entities to (1) present inception-to-date information on the statements of income, cash flows and stockholders’ equity, (2) label the financial statements as those of a development stage entity; (3) disclose a description of the development stage activities in which the entity is engaged and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. The amendments are effective for annual reporting periods beginning after December 31, 2014 and interim reporting periods beginning after December 15, 2015. However, entities are permitted to early adopt for any annual or interim reporting period for which the financial statements have yet to be issued. The Company has elected to early adopt these amendments, and accordingly, has not labeled the financial statements as those of a development stage entity and has not presented inception-to-date information on the respective financial statements. | |||||
We have reviewed all other recently issued, but not yet effective, accounting pronouncements and do not believe the future adoption of any such pronouncements may be expected to cause a material impact on our financial condition or the results of our operations. |
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Equity [Abstract] | |||||||||||||
Summary of Stock Options | To date, the following stock options were issued and outstanding to employees, which were not issued pursuant to a formal equity compensation plan: | ||||||||||||
For the Three Months Ended | |||||||||||||
March 31, 2015 | |||||||||||||
Shares | Option | Weighted | |||||||||||
Price | Average | ||||||||||||
Price | |||||||||||||
Outstanding Options at Beginning of Period | 3,600,000 | $ | 3.78 | $ | 3.78 | ||||||||
Options Granted | 675,000 | $ | 3 | $ | 3 | ||||||||
Options Forfeited | — | — | — | ||||||||||
Options Outstanding at End of Period | 4,275,000 | $ | 3.66 | $ | 3.66 | ||||||||
Options Exercisable at End of Period | — | ||||||||||||
Nature_of_Operations_and_Signi2
Nature of Operations and Significant Accounting Policies - Additional Information (Detail) (USD $) | 0 Months Ended | 3 Months Ended | 5 Months Ended | 12 Months Ended | 15 Months Ended | ||||
Nov. 01, 2014 | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2015 | Apr. 21, 2015 | 9-May-14 | |
Private_placement | Private_placement | ||||||||
Segment | |||||||||
Nature Of Operations [Line Items] | |||||||||
Shares issuable upon merger | 9,750,000 | 9,750,000 | 9,750,000 | ||||||
Property and equipment acquired | $2,078 | $100,721 | $102,800 | ||||||
Website development for cannabinoid medicines | 50,000 | ||||||||
Depreciation expense recorded against capitalized cost | 0 | ||||||||
Payments to acquire office and computer equipment | 52,800 | ||||||||
Accumulated depreciation | 6,155 | 6,155 | 6,155 | 6,155 | 6,155 | ||||
Depreciation expense | 3,135 | 0 | |||||||
Number of private placements | 2 | 2 | |||||||
Deferred cost and other offering costs | 0 | 0 | 0 | 0 | 0 | ||||
Deferred costs associated with proposed financing | 25,000 | 25,000 | 25,000 | ||||||
Advertising and promotional expenses | 1,157 | 0 | |||||||
Stock options excluded from calculation of diluted net income per share due to anti-dilutive effect (in shares) | 4,275,000 | ||||||||
Options issued during period | 4,800,000 | 5,475,000 | |||||||
Options outstanding | 4,275,000 | 3,600,000 | 4,275,000 | 3,600,000 | 4,275,000 | ||||
Stock-based compensation expense | $939,569 | $0 | |||||||
Number of reportable segment | 1 | ||||||||
Subsequent Event [Member] | Canna Pharma RX [Member] | |||||||||
Nature Of Operations [Line Items] | |||||||||
Shares issuable upon merger | 9,750,000 | ||||||||
Minimum [Member] | |||||||||
Nature Of Operations [Line Items] | |||||||||
Estimated useful lives of assets | 3 years | ||||||||
Maximum [Member] | |||||||||
Nature Of Operations [Line Items] | |||||||||
Estimated useful lives of assets | 7 years | ||||||||
Share Purchase Agreement [Member] | |||||||||
Nature Of Operations [Line Items] | |||||||||
Number of shares repurchased | 1,421,120 | ||||||||
Number additional shares repurchased | 9,000,000 |
Going_Concern_and_Liquidity_Ad
Going Concern and Liquidity - Additional Information (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Going Concern And Liquidity [Abstract] | ||||
Cash | $1,385,003 | $1,605,239 | ||
Liabilities | 2,148,630 | 2,085,272 | ||
Stockholders' equity (deficit) | -551,632 | -288,230 | -292,034 | -197,628 |
Settlement payable in stock - current liabilities | 1,597,500 | 1,597,500 | ||
Working capital (deficit) | ($623,276) |
Assets_Additional_Information_
Assets - Additional Information (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Assets [Abstract] | ||
Current assets | $1,425,354 | $1,649,341 |
Cash and cash equivalents | 1,385,003 | 1,605,239 |
Prepaid expenses | 40,351 | 44,102 |
Furniture and fixtures, net of accumulated depreciation | 96,644 | 97,701 |
Furniture and fixtures, accumulated depreciation | 6,155 | 6,155 |
Deposit on specialty pharmacy acquisition | $75,000 |
Accounts_Payable_and_Accrued_E1
Accounts Payable and Accrued Expenses - Additional Information (Detail) (USD $) | Mar. 31, 2015 |
Payables and Accruals [Abstract] | |
Accounts payable and accrued expenses | $201,130 |
Commitments_Additional_Informa
Commitments - Additional Information (Detail) (USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Remaining lease commitment | $25,879 |
Non-cancellable operating lease expiration date | 31-Oct-15 |
Litigation_and_Accrued_Settlem1
Litigation and Accrued Settlement Liabilities - Additional Information (Detail) (USD $) | 3 Months Ended | 1 Months Ended | ||
Mar. 31, 2015 | 12-May-15 | Dec. 31, 2014 | Mar. 30, 2015 | |
Litigation And Other Contingencies [Line Items] | ||||
Legal settlement payable in cash - current liabilities | 250,000 | $205,000 | ||
Legal settlement payable in stock | 1,597,500 | 1,597,500 | ||
Gary M. Cohen [Member] | ||||
Litigation And Other Contingencies [Line Items] | ||||
Settlement agreement, description | As part of the Settlement Agreement, the Company agreed to purchase all of Mr. Cohenbs 2,250,000 shares of CannaRx for a purchase price of $350,000, with $85,000 payable up front and the remainder payable in equal installments of $15,000 per month over the next 17 months, and a payment of $10,000 in the eighteenth month. The amount of cash payable in the next year of $250,000 is included in current liabilities. In addition, the Company agreed to issue 600,000 unregistered restricted shares of its common stock to Mr. Cohen as part of the Settlement Agreement. | |||
Settlement agreement, share purchased | 2,250,000 | |||
Settlement agreement, share purchase price | 350,000 | |||
Settlement agreement, up front payment | 85,000 | |||
Settlement amount payable in Equal Monthly installment up to seventeen month | 15,000 | |||
Settlement amount final payment on eighteenth month | 10,000 | |||
Unregistered restricted shares of common stock granted | 600,000 | |||
Legal settlement payable in cash - current liabilities | 250,000 | |||
Legal settlement payable in stock | 1,597,500 | |||
Gary M. Cohen [Member] | Subsequent Event [Member] | ||||
Litigation And Other Contingencies [Line Items] | ||||
Legal settlement payable in cash - current liabilities | 250,000 | |||
Cash paid in accordance with settlement payment terms | $100,000 |
Stockholders_Equity_Additional
Stockholders' Equity - Additional Information (Detail) (USD $) | 0 Months Ended | 1 Months Ended | 3 Months Ended | 0 Months Ended | 2 Months Ended | |||
Nov. 01, 2014 | Mar. 31, 2015 | Mar. 31, 2015 | Jan. 20, 2015 | Feb. 23, 2015 | Apr. 23, 2015 | Apr. 23, 2015 | Dec. 31, 2014 | |
Private_placement | ||||||||
Class of Stock [Line Items] | ||||||||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | 10,000,000 | |||||
Preferred stock, par value per share | $0.00 | $0.00 | $0.00 | |||||
Preferred stock, shares issued | 0 | 0 | 0 | |||||
Preferred stock, shares outstanding | 0 | 0 | 0 | |||||
Common stock, shares authorized | 100,000,000 | 100,000,000 | 100,000,000 | |||||
Common stock, par value per share | $0.00 | $0.00 | $0.00 | |||||
Common stock, shares issued | 17,677,407 | 17,677,407 | 17,374,407 | |||||
Common stock, shares outstanding | 17,677,407 | 17,677,407 | 17,374,407 | |||||
Common stock reserved for issuance pursuant to merger agreement | 9,750,000 | 9,750,000 | ||||||
Number of private placement closings | 2 | |||||||
Unregistered restricted Common Stock, anticipated gross proceeds | $454,501 | |||||||
Options issued to purchase shares | 4,800,000 | 675,000 | ||||||
Options exercise price per share | $3.78 | $3 | ||||||
Stock options, vesting period | 3 years | |||||||
Stock-based compensation charges | 939,569 | |||||||
Unamortized Stock based compensation charges | 10,467,212 | 10,467,212 | ||||||
Unamortized Stock based compensation charges, end date of amortization period based on vesting period | 2018-03 | |||||||
Viridian Capital and Research, LLC [Member] | First Warrant [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Warrant expiration term | 3 years | |||||||
Number of Securities exercised by Warrants or Rights | 244,283 | |||||||
Exercise Price of Warrants per warrant | $2.90 | |||||||
Exercise Price of Warrants, description | Price per share of the Company's common stock on the 10 days preceding January 20, 2015 or $2.90 | |||||||
Notice period to call warrants | 60 days | |||||||
Warrants callable description | The First Warrant is callable on 60 days' notice if (i) the Company's common stock trades on the NASDAQ and (ii) the Company's common stock trades at three times the exercise price of the First Warrant for 20 consecutive trading days | |||||||
Number of trading days to trade company's common stock | 20 days | |||||||
Viridian Capital and Research, LLC [Member] | Second Warrant [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Warrant expiration term | 3 years | |||||||
Number of Securities exercised by Warrants or Rights | 244,283 | |||||||
Exercise Price of Warrants per warrant | $2.50 | |||||||
Exercise Price of Warrants, description | Price per share of the Company's common stock on the 10 days preceding February 23, 2015 or $2.50 | |||||||
Notice period to call warrants | 60 days | |||||||
Warrants callable description | The Second Warrant is callable on 60 days' notice if (i) the Company's common stock trades on the NASDAQ and (ii) the Company's common stock trades at three times the exercise price of the Second Warrant for 20 consecutive trading days | |||||||
Number of trading days to trade company's common stock | 20 days | |||||||
Share-based Compensation Award, Tranche One [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Options vesting, percentage on each anniversary date | 33.33% | |||||||
Private Placement [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Unregistered restricted Common Stock, price per share | $1.50 | $1.50 | ||||||
Unregistered restricted Common Stock, shares issued | 303,001 | |||||||
Subsequent Event [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Unregistered restricted Common Stock, anticipated gross proceeds | $250,000 | $704,501 | ||||||
Subsequent Event [Member] | Private Placement [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Unregistered restricted Common Stock, shares issued | 166,667 | 469,668 | ||||||
Maximum [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Stockholders_Equity_Summary_of
Stockholders' Equity - Summary of Stock Options (Detail) (USD $) | 0 Months Ended | 3 Months Ended |
Nov. 01, 2014 | Mar. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Outstanding Options at Beginning of Period, Shares | 3,600,000 | |
Options Granted, Shares | 4,800,000 | 675,000 |
Options Forfeited, Shares | 0 | |
Options Outstanding at End of Period, Shares | 4,275,000 | |
Options Exercisable at End of Period, Shares | 0 | |
Options Outstanding at Beginning of Period, Option Price | $3.78 | |
Options Granted, Option Price | $3.78 | $3 |
Options Forfeited, Option Price | $0 | |
Options Outstanding at End of Period, Option Price | $3.66 | |
Options Outstanding at Beginning of Period , Weighted Average Price | $3.78 | |
Options Granted, Weighted Average Price | $3 | |
Options Forfeited, Weighted Average Price | $0 | |
Options Outstanding at End of Period, Weighted Average Price | $3.66 |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Federal [Member] | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | $2,464,000 |
Net operating loss carryforward expiration year | 2030 |
State [Member] | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | $2,256,000 |
Net operating loss carryforward expiration year | 2034 |