UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
  Washington, D.C. 20549

Form 10-Q

(Mark One)

x  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the quarterly period ended September 30, 2009

OR

o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________

COMMISSION FILE NUMBER 333-143761

3DICON CORPORATION
(Exact Name of small business issuer as specified in its charter)
 
Oklahoma
73-1479206
(State or other jurisdiction of
(I.R.S. Employer
incorporation or organization)
Identification No.)

6804 South Canton Avenue, Suite 150, Tulsa, Oklahoma 74136
(Address of principal executive offices) (Zip Code)

Issuer's Telephone Number: (918) 494-0505

Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 o   No o

 
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 o

 
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 definition of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
 
Large accelerated filer o
Accelerated filer o
Non-accelerated filer o (do not
check if smaller reporting
company)
Smaller reporting company  x

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

As of November 13, 2009, the issuer had 327,123,238 outstanding shares of Common Stock.

 
 
 

TABLE OF CONTENTS

   
Page
 
PART I
  
Item 1.
Financial Statements
3
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operation
22
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
29
Item 4T.
Controls and Procedures
29
 
PART II
  
Item 1.
Legal Proceedings
30
Item 1A.
Risk Factors
30
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
30
Item 3.
Defaults Upon Senior Securities
30
Item 4.
Submission of Matters to a Vote of Security Holders
30
Item 5.
Other Information
31
Item 6.
Exhibits
31
SIGNATURES
32
 
 
2
 

PART I

ITEM 1. FINANCIAL STATEMENTS.

INDEX TO FINANCIAL STATEMENTS

 
Page
Balance Sheets as of September 30, 2009 (Unaudited) and December 31, 2008 (Audited)
4
   
Statements of Operations for the three and nine months ended September 30, 2009 and 2008 and period from inception (January 1, 2001) to September 30, 2009 (Unaudited)
5
   
Statements of Changes in Stockholders' Deficiency for period from inception (January 1, 2001) to September 30, 2009  (Unaudited)
6
   
Statements of Cash Flows for the nine months ended September 30, 2009 and 2008 and  period from inception (January 1, 2001) to September 30, 2009 (Unaudited)
9
   
Notes to Financial Statements, September  30, 2009 (Unaudited)
10
 
 
3
 

3DIcon CORPORATION
(A Development Stage Company)
BALANCE SHEETS
September 30, 2009 and December 31, 2008

   
September 30,
2009
    
December 31,
2008
  
   
(Unaudited)
    
(Audited)
  
Assets
            
Current assets:
            
Cash
   $ 63,091     $ 48,400  
Prepaid expenses
     65,832       16,113  
                 
Total current assets
     128,923       64,513  
                 
Net property and equipment
     20,162       31,537  
                 
Debt issue costs, net
     26,774       56,978  
                 
Deposits-other
     17,315       17,315  
                 
Total Assets
   $ 193,174     $ 170,343  
                 
Liabilities and Stockholders' Deficiency
                
Current liabilities:
                
Current maturities of convertible debentures payable
     87,874       364,000  
Warrant exercise advances
     87,930       140,500  
Accounts payable
     955,951       1,135,887  
Accrued salaries
     147,484       59,615  
Accrued interest on debentures
     49,442       6,808  
                 
Total current liabilities
     1,328,681       1,706,810  
                 
Convertible debentures payable, less current maturities
     577,126       675,279  
                 
Total Liabilities
     1,905,807       2,382,089  
                 
Stockholders' deficiency:
                
Common stock $.0002 par 750,000,000 and 250,000,000 shares authorized at September 30, 2009 and December 31, 2008, respectively, and 290,916,225 and 157,515,766 shares issued and outstanding at September 30, 2009 and December 31, 2008, respectively.
     58,183       31,503  
Additional paid-in capital
     10,423,414       8,766,830  
Deficit accumulated during development stage
     (12,194,230 )     (11,010,079 )
                 
Total stockholders' deficiency
     (1,712,633 )     ( 2,211,746 )
                 
Total Liabilities and Stockholders' Deficiency
   $ 193,174     $ 170,343  
 
See notes to financial statements
 
 
4
 

3DIcon CORPORATION
(A Development Stage Company)

STATEMENTS OF OPERATIONS

Three and Nine Months Ended September 30, 2009 and 2008 and period
From Inception (January 1, 2001) to September 30, 2009
(Unaudited)

   
Three Months
    
Three Months
    
Nine Months
    
Nine Months
        
   
Ended
    
Ended
    
Ended
    
Ended
    
Inception to
  
   
September 30,
    
September 30,
    
September 30,
    
September 30,
    
September 30,
  
   
2009
    
2008
    
2009
    
2008
    
2009
  
Income:
                              
Sales
   $ 4,000     $ 7,000     $ 10,500     $ 17,900     $ 28,400  
License fee
     -       -       -       -       25,000  
Grant income
     4,428       -       23,403       -       23,403  
                                         
Total Income
     8,428       7,000       33,903       17,900       76,803  
                                         
Expenses:
                                        
Research and development
     80,070       184,453       248,912       761,132       2,712,673  
General and administrative
     287,825       479,423       912,546       2,008,965       9,260,372  
Interest
     15,160       28,853       56,596       93,228       297,988  
                                         
Total expenses
     383,055       692,729       1,218,054       2,863,325       12,271,033  
                                         
Net Loss
   $ (374,627 )   $ (685,729 )   $ (1,184,151 )   $ (2,845,425 )   $ ( 12,194,230 )
                                         
Loss per share:
                                        
Basic and diluted
   $ (0.002 )   $ (0.005 )   $ (0.006 )   $ (0.020 )        
                                         
Weighted average shares  outstanding, basic and diluted
     230,510,289       141,994,607       210,358,321       139,495,180          
 
See notes to financial statements
 
 
5
 

3DIcon CORPORATION
(A Development Stage Company)

STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIENCY

From inception (January 1, 2001) to September 30, 2009
(Unaudited)
               
Deficit
        
                     
Accumulated
        
   
Common Stock
    
Additional
    
During the
        
   
Shares
    
Par
Value
    
Paid-In
Capital
    
Development
Stage
    
Total
  
Balance, January 1, 2001 – as reorganized
    
27,723,750
    
$
27,724
    
$
193,488
    
$
-
    
$
221,212
  
                                         
Adjustment to accrue compensation earned but not recorded
    
-
      
-
      
-
      
(60,000
)
    
(60,000
)
Stock issued for services
    
2,681,310
      
2,681
      
185,450
      
-
      
188,131
  
Stock issued for cash
    
728,500
      
729
      
72,121
      
-
      
72,850
  
Net loss for the year
    
-
      
-
      
-
      
(259,221
)
    
(259,221
)
Balance, December 31, 2001
    
31,133,560
      
31,134
      
451,059
      
(319,221
)
    
162,972
  
                                         
Adjustment to record compensation earned but not recorded
    
-
      
-
      
-
      
(60,000
)
    
(60,000
)
Stock issued for services
    
3,077,000
      
3,077
      
126,371
      
-
      
129,448
  
Stock issued for cash
    
1,479,000
      
1,479
      
146,421
      
-
      
147,900
  
Net loss for the year
    
-
      
-
      
-
      
(267,887
)
    
(267,887
)
Balance, December 31, 2002
    
35,689,560
      
35,690
      
723,851
      
(647,108
)
    
112,433
  
                                         
Adjustment to record compensation earned but not recorded
    
-
      
-
      
-
      
(90,000
)
    
(90,000
)
Stock issued for services
    
15,347,000
      
15,347
      
-
      
-
      
15,347
  
Stock issued for cash
    
1,380,000
      
1,380
      
33,620
      
-
      
35,000
  
Reverse split 1:10
    
(47,174,904
)
    
-
      
-
      
-
      
-
  
Par value $0.0001 to $0.0002
    
-
      
(51,369
)
    
51,369
      
-
      
-
  
Net loss for the year
    
-
      
-
      
-
      
(51,851
)
    
(51,851
)
Balance, December 31, 2003
    
5,241,656
      
1,048
      
808,840
      
(788,959
)
    
20,929
  
                                         
Additional Founders shares issued
    
25,000,000
      
5,000
      
(5,000
)
    
-
      
-
  
Stock issued for services
    
24,036,000
      
4,807
      
71,682
      
-
      
76,489
  
Stock issued for cash
    
360,000
      
72
      
28,736
      
-
      
28,808
  
  Warrants issued to purchase common stock at $.025
    
-
      
-
      
18,900
      
-
      
18,900
  
  Warrants issued to purchase common stock at $.05
    
-
      
-
      
42,292
      
-
      
42,292
  
Stock warrants exercised
    
2,100,000
      
420
      
60,580
      
-
      
61,000
  
Net loss for the year
    
-
      
-
      
-
      
(617,875
)
    
(617,875
)
Balance, December 31, 2004
    
56,737,656
      
11,347
      
1,026,030
      
(1,406,834
)
    
(369,457
)
                                         
Stock issued for services
    
5,850,000
      
1,170
      
25,201
      
-
      
26,371
  
Stock issued to settle liabilities
    
5,000,000
      
1,000
      
99,000
      
-
      
100,000
  
Stock issued for cash
    
1,100,000
      
220
      
72,080
      
-
      
72,300
  
 
See notes to financial statements
 
 
6
 

3DIcon CORPORATION
(A Development Stage Company)

STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIENCY

From inception (January 1, 2001) to September 30, 2009
(Unaudited)
                     
Deficit
        
                     
Accumulated
        
               
Additional
    
During the
        
   
Common
    
Stock
    
Paid-In
    
Development
        
   
Shares
    
Par Value
    
Capital
    
State
    
Total
  
                               
  Warrants issued to purchase common stock at $.025
    
-
      
-
      
62,300
      
-
      
62,300
  
  Warrants issued to purchase common stock at $.05
    
-
      
-
      
140,400
      
-
      
140,400
  
Stock warrants exercised
    
5,260,000
      
1,052
      
172,948
      
-
      
174,000
  
Net loss for the year
    
-
      
-
      
-
      
(592,811
)
    
(592,811
)
Balance, December 31, 2005
    
73,947,656
      
14,789
      
1,597,959
      
(1,999,645
)
    
(386,897
)
                                         
Stock issued for services
    
4,700,000
      
940
      
205,597
      
-
      
206,537
  
Debentures converted
    
3,000,000
      
600
      
149,400
      
-
      
150,000
  
Stock issued for cash
    
200,000
      
40
      
16,160
      
-
      
16,200
  
  Warrants issued to purchase common stock
    
-
      
-
      
33,800
      
-
      
33,800
  
  Warrants converted to purchase common stock
    
16,489,000
      
3,297
      
565,203
      
-
      
568,500
  
Net loss for the year
    
-
      
-
      
-
      
(1,469,888
)
    
(1,469,888
)
Balance, December 31, 2006
    
98,327,656
      
19,666
      
2,568,119
      
(3,469,533
)
    
(881,748
)
                                         
Stock issued for services
    
817,727
      
164
      
155,262
      
-
      
155,426
  
Stock issued for interest
    
767,026
      
153
      
38,198
      
-
      
38,351
  
Options issued for services
    
-
      
-
      
1,274,666
      
-
      
1,274,666
  
Debentures converted
    
17,215,200
      
3,442
      
1,673,741
      
-
      
1,677,183
  
Stock issued for cash
    
1,188,960
      
238
      
191,898
      
-
      
192,136
  
Options exercised
    
222,707
      
45
      
(45
)
    
-
      
-
  
  Warrants issued to purchase common stock
    
-
      
-
      
87,864
      
-
      
87,864
  
  Warrants converted to purchase common stock
    
8,585,956
      
1,717
      
462,203
      
-
      
463,920
  
Net loss for the year
    
-
      
-
      
-
      
(3,928,996
)
    
(3,928,996
)
Balance, December 31, 2007
    
127,125,232
      
25,425
      
6,451,906
      
(7,398,529
)
    
(921,198
)
 
See notes to financial statements
 
 
7
 
 
3DIcon CORPORATION
(A Development Stage Company)

STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIENCY

From inception (January 1, 2001) to September 30, 2009
(Unaudited)

                     
Deficit
        
                     
Accumulated
        
               
Additional
    
During the
        
   
Common
    
Stock