Quarterly report pursuant to Section 13 or 15(d)

Business Organization, Nature of Business and Basis of Presentation

v3.7.0.1
Business Organization, Nature of Business and Basis of Presentation
6 Months Ended
Jun. 30, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Business Organization, Nature of Business and Basis of Presentation
Note 1 – Business Organization, Nature of Business and Basis of Presentation  
 
Nature of Business
 
On June 22, 2017, The Coretec Group Inc. (the “Group”) (formerly 3DIcon Corporation) filed an Amended Certificate of Incorporation (the “Amendment”) with the Secretary of State of the State of Oklahoma, to (i) change its name from “3DIcon Corporation” to “The Coretec Group Inc.” (“Name Change”) and to (ii) effect a 1-for-300 reverse stock split (“Reverse Split”). The Name Change and Reverse Split became effective with the State of Oklahoma on June 28, 2017 and with the Financial Industry Regulatory Authority, Inc. (“FINRA”) on June 29, 2017 (“Effective Time”).
 
The financial statements for all prior periods have been retroactively adjusted to reflect the Reverse Split which allowed the Company to have a sufficient number of common shares to convert our convertible notes, Series A and Series B Preferred shares into common shares. As a result of the reverse split, each three hundred (300) outstanding shares of pre-split common stock were automatically combined into one (1) share of post-split common stock. No fractional shares of the Company’s Common Stock were issued in connection with the Reverse Split. Shareholders who would otherwise be entitled to a fractional share will instead receive a new certificate rounding up their fractional share to the next nearest full share.  The financial statements for all prior periods have been retroactively adjusted to reflect this stock split for both common stocks issued and options outstanding.
 
The Coretec Group Inc. was incorporated on August 11, 1995, under the laws of the State of Oklahoma. The Company’s primary activity has been the raising of capital in order to pursue its goal of becoming a significant participant in the development, commercialization and marketing of next generation 3D display technologies.
 
Coretec Industries, LLC (“Coretec”), a wholly owned subsidiary of The Coretec Group Inc. (collectively the “Company”), was organized on June 2, 2015 in the state of North Dakota. Coretec is currently developing, testing, and providing new and/or improved technologies, products, and service solutions for medical, electronic, photonic, display, and lighting markets among others.
 
Reverse Acquisition
 
On May 31, 2016, the Group entered into a Share Exchange Agreement (the “Share Exchange Agreement”) with Coretec and four Coretec members (the “Members”), which Members held all outstanding membership interests in Coretec. On September 30, 2016 (the “Closing Date”), the Group closed the transaction contemplated by the Share Exchange Agreement. Pursuant to the Share Exchange Agreement, the Members agreed to sell all their membership interests in Coretec to the Group in exchange for the Group’s issuance of an aggregate 4,760,872 shares of the Group’s Series B Convertible Preferred Stock to the Members (the “Share Exchange”). Coretec became a wholly-owned subsidiary of the Group and the former Members beneficially own approximately 65% of the Group’s common stock on a fully-diluted basis. Upon the closing of the Share Exchange, two of the Group’s Directors resigned and three new Directors associated with Coretec were nominated and elected, giving control of the board of directors to former Coretec Members. The 65% holders of the Group common stock will be unable to sell that stock for a period of one year under the terms of a lock-up agreement reached between the parties. Mr. Victor Keen, the largest shareholder of the Group prior to the reverse acquisition, is also a participant in the lock-up agreement.
 
Basis of Presentation
 
The accompanying condensed consolidated financial statements of the Company have been prepared without audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. The Company believes that the disclosures made are adequate to make the information presented not misleading. These condensed consolidated financial statements should be read in conjunction with the Company’s year-end audited consolidated financial statements and related footnotes included in the previously filed Form 10-K, and in the opinion of management, reflects all adjustments necessary to present fairly the condensed consolidated financial position of the Company. The condensed consolidated results of operations for interim periods may not be indicative of the results which may be realized for the full year.
 
Under accounting principles generally accepted in the United States of America (“U.S. GAAP”), the acquisition is treated as a “reverse acquisition” under the purchase method of accounting (see Note 4). The pre-merger financial statements reflect the operations of Coretec. The Group’s assets and liabilities were consolidated with the assets and liabilities of Coretec as of the September 30, 2016 consummation of the acquisition. The number of shares issued and outstanding and additional paid-in capital of the Company have been retroactively adjusted to reflect the equivalent number of shares issued by the Company in the Share Exchange, while Coretec’s historical members’ deficit is being carried forward as the Group’s accumulated deficit. All costs attributable to the reverse merger were expensed.