Quarterly report pursuant to sections 13 or 15(d)

Basis of Presentation

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Basis of Presentation
3 Months Ended
Mar. 31, 2014
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation

NOTE 2 – BASIS OF PRESENTATION

 

The accompanying unaudited condensed consolidated financial statements of Cardax, Inc. and its wholly owned subsidiary Cardax Pharma, Inc., have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information. In the opinion of the Company’s management, the accompanying condensed consolidation financial statements reflect all adjustments, consisting of normal, recurring adjustments, considered necessary for a fair presentation of the results for the interim periods ended March 31, 2014 and 2013 and for the period from the inception of the development stage (March 23, 2006) to March 31, 2014. Although management believes that the disclosures in these unaudited condensed consolidated financial statements are adequate to make the information presented not misleading, certain information and footnote disclosures normally included in financial statements that have been prepared in accordance GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. The results for the three-month periods ended March 31, 2014 and 2013 are not necessarily indicative of the results to be expected for the years ending December 31, 2014 and 2013 and for the period from the inception of the development stage (March 23, 2006) to December 31, 2014. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and footnotes thereto included in the current report on Form 8-K filed February 10, 2014.

 

The accompanying consolidated condensed financial statements include the accounts of Cardax, Inc., and its wholly owned subsidiary, Cardax Pharma, Inc. All significant intercompany balances and transactions have been eliminated in consolidation.

 

Reverse acquisition accounting

 

On February 7, 2014, Koffee Sub and Pharma completed a reverse acquisition transaction (the “Acquisition”). As part of the Acquisition, the Company acquired 100% of the issued and outstanding common stock of Pharma. In addition, Holdings acquired 33,229,093 shares of the Company’s common stock, which constituted approximately 53% of the Company’s issued and outstanding common stock on a post-acquisition basis as of and immediately after the consummation of the Acquisition.

 

The share exchange transaction was treated as a reverse acquisition, with Holdings and Pharma as the acquirers and Koffee Korner and Koffee Sub as the acquired parties. Unless the context suggests otherwise, when the Company refers to business and financial information for periods prior to the consummation of the reverse acquisition, the Company is referring to the business and financial information of Holdings and Pharma. Under GAAP guidance ASC 805-40, Business Combinations – Reverse Acquisitions, the Acquisition has been treated as a reverse acquisition with no adjustment to the historical book and tax basis of the Company’s assets and liabilities.

 

Accordingly, the effect of the Acquisition on the shareholders’ equity opening balances for common shares, par value and additional paid-in capital has been retroactively adjusted as shown below:

 

    Common Stock
$0.001 Par Value
    Additional  
    Shares     Amount     Paid-In Capital  
Balance, December 31, 2013, pre-reverse acquisition     9,488,227     $ 9,488     $ 19,891,702  
Share exchange adjustment     23,740,866       23,741       (23,741 )
Balance, December 31, 2013, post-reverse acquisition     33,229,093     $ 33,229     $ 19,867,961  

   

Reclassifications

 

The Company has made certain reclassifications its conform to prior periods’ data to the current presentation. These reclassifications had no effect on the reported results of operations.