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 June 30, 2010

 
OR
 
¨ 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 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 definition 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 ¨ (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 ¨   No x
 
As of August 16, 2010, the issuer had 563,683,880 outstanding shares of Common Stock.

 
 

TABLE OF CONTENTS

 
 
Page
 
PART I
  
Item 1.
Financial Statements
4
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
16
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
23
Item 4T
Controls and Procedures
23
 
PART II
23
Item 1.
Legal Proceedings
23
Item 1A.
Risk Factors
23
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
23
Item 3.
Defaults Upon Senior Securities
23
Item 4.
Reserved
23
Item 5.
Other Information
23
Item 6.
Exhibits
23
SIGNATURES
24

 
2
 

PART I
 
ITEM 1. FINANCIAL STATEMENTS.
 
 
INDEX TO FINANCIAL STATEMENTS

 
Page
Balance Sheets as of June 30, 2010 (Unaudited) and December 31, 2009 (Audited)
4
   
Statements of Operations for the three and six months ended June 30, 2010 and 2009 and period from inception (January 1, 2001) to June 30, 2010 (Unaudited)
5
   
Statements of Changes in Stockholders' Deficiency for period from inception (January 1, 2001) to June 30, 2010  (Unaudited)
6
   
Statements of Cash Flows for the six  months ended June 30, 2010 and 2009 and  period from inception (January 1, 2001) to June 30, 2010 (Unaudited)
7
   
Notes to Financial Statements, June 30, 2010 (Unaudited)
8

 
3
 

3DIcon CORPORATION
(A Development Stage Company)

BALANCE SHEETS

June 30, 2010 and December 31, 2009

   
June 30,
2010
(Unaudited)
    
December
31, 2009
(Audited)
  
Assets
            
Current assets:
            
Cash
  
$
1,557
    
$
1,118
  
Accounts receivable
    
21,087
      
-
  
Prepaid expenses
    
32,317
      
11,304
  
                 
Total current assets
    
54,961
      
12,422
  
                 
Net Property and equipment, net
    
15,541
      
18,624
  
                 
Debt issue costs, net
    
-
      
16,706
  
                 
Deposits-other
    
17,315
      
17,315
  
                 
Total Assets
  
$
87,817
    
$
65,067
  
                 
Liabilities and Stockholders' Deficiency
                
Current liabilities:
                
Current maturities of convertible debentures payable
  
$
564,261
    
$
564,261
  
Warrant exercise advances
    
19,126
      
48,511
  
Accounts payable
    
818,703
      
844,530
  
Accrued salaries
    
398,566
      
279,603
  
Accrued interest on debentures
    
37,023
      
16,151
  
Advance due officer
    
13,000
      
11,000
  
                 
Total current liabilities
    
1,850,679
      
1,764,056
  
                 
Convertible debentures payable, less current maturities
    
91,043
      
93,168
  
                 
Total liabilities
    
1,941,722
      
1,857,224
  
                 
Stockholders' deficiency:
                
Common stock $.0002 par, 750,000,000 shares authorized; 503,930,956 and 343,690,812 shares issued and outstanding at June 30, 2010 and December 31, 2009  respectively
    
100,786
      
68,738
  
Additional paid-in capital
    
11,483,000
      
10,716,019
  
Deficit accumulated during development stage
    
(13,437,691
)
    
(12,576,914
)
                 
Total stockholders' deficiency
    
(1,853,905
)
    
(1,792,157
)
                 
Total Liabilities and Stockholders' Deficiency
  
$
87,817
    
$
65,067
  

See notes to financial statements

 
4
 

3DIcon CORPORATION
(A Development Stage Company)

STATEMENTS OF OPERATIONS

Three and Six Months Ended June 30, 2010 and 2009 and Period
From Inception (January 1, 2001) to June 30, 2010
(Unaudited)

   
Three Months
    
Three Months
    
Six Months
    
Six Months
        
   
Ended
    
Ended
    
Ended
    
Ended
    
Inception to
  
   
June 30, 2010
    
June 30, 2009
    
June 30, 2010
    
June 30, 2009
    
June 30, 2010
  
Income:
                              
License fee
  
$
-
    
$
-
    
$
-
    
$
-
    
$
25,000
  
Sales
    
4,300
      
6,500
      
4,300
      
6,500
      
32,400
  
Grant income
    
18,487
      
18,975
      
28,765
      
18,975
      
63,904
  
                                         
Total income
    
22,787
      
25,475
      
33,065
      
25,475
      
121,304
  
                                         
Expenses:
                                        
Research and development
    
246,090
      
70,044
      
320,059
      
178,946
      
3,096,702
  
General and administrative
    
303,029
      
241,382
      
536,485
      
614,616
      
10,103,309
  
Interest
    
16,607
      
20,835
      
37,298
      
41,437
      
358,984
  
                                         
Total expenses
    
565,726
      
332,261
      
893,8429
      
834,999
      
13,558,995
  
                                         
Net loss
  
$
(542,939
)
  
$
(306,786
)
  
$
(860,777
)
  
$
(809,524
)
  
$
(13,437,691
)
                                         
Loss per share:
                                        
Basic and diluted
  
$
(0.001
)
  
$
(0.002
)
  
$
(0.002
)
  
$
(0.005
)
        
                                         
Weighted average shares outstanding, Basic and diluted
    
466,963,229
      
193,820,151
      
426,166,215
      
178,711,726
          

See notes to financial statements

 
5
 

3DIcon CORPORATION
(A Development Stage Company)

 
STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIENCY

 
Period from Inception (January 1, 2001) to June 30, 2010

                     
Deficit
        
                     
Accumulated
        
   
Common Stock
    
Additional
    
During the
        
         
Par
    
Paid-In
    
Development
        
   
Shares
    
Value
    
Capital
    
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  
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  
Stock based compensation
     -       -       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 )
Stock issued for cash
     515,677       103       24,897       -       25,000  
Warrants exercised
     1,347,261       269       362,425       -       362,694  
Stock based compensation
     -       -       654,199       -       654,199  
Debentures converted
     15,257,163       3,052       962,257       -       965,309  
Options exercised and escrowed shares
     8,671,460       1,734       (1,734 )     -       -  
Stock issued for service
     4,598,973       920       312,880       -       313,800  
Net loss for the year
     -       -       -       (3,611,550 )     (3,611,550 )
Balance, December 31, 2008
     157,515,766       31,503       8,766,830       (11,010,079 )     (2,211,746 )
Stock issued for cash
     20,607,841       4,122       197,878       -       202,000  
Warrants exercised
     35,100       7       382,583       -       382,590  
Debentures converted
     77,451,141       15,490       467,514       -       483,004  
Stock issued for service
     68,506,130       13,701       524,653       -       538,354  
Stock issued for accounts payable
     11,264,706       2,253       321,409       -       323,662  
Stock issued for interest
     8,310,128       1,662