UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
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, 2004
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from To
Commission file number 0-21376
BIO-LIFE LABS, INC.
--------------------
(Exact name of small business issuer as specified in its charter)
NEVADA 33-0714007
--------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or organization)
9911 West Pico Boulevard, Suite 1410, Los Angeles, California 90035
(Address of principal executive offices)
(310) 943-6445
--------------
(Issuer's telephone number)
(Former name, former address and former fiscal year,
if changed since lastreport.)
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practical date: September 30, 2004 47,091,805
--------------------------------
Transitional Small Business Disclosure Format (check one). Yes( ); No (X)
1
PART I
ITEM 1. FINANCIAL STATEMENTS
BIO-LIFE LABS, INC.
(Formerly TecScan International, Inc.)
(A Development Stage Company)
BALANCE SHEETS
(UNAUDITED)
SEPTEMBER 30, JUNE30,
2004 2004
------------------- -------------------
ASSETS:
Current Assets
Cash $32,638 $125,030
Other receivable 5,800 5,800
------------------- -------------------
Total Current Assets 38,438 130,830
------------------- -------------------
Fixed Assets
Furniture and Fixtures 10,662 10,417
Computer Equipment 3,015 3,015
Less Accumulated Depreciation (1,001) (239)
------------------- -------------------
Net Fixed Assets 12,676 13,193
------------------- -------------------
=Intangible Assets
Product Rights 279,610 279,610
Less Accumulated Amortization (9,320) (5,825)
------------------- -------------------
Net Intangible Assets 270,290 273,785
------------------- -------------------
Other Assets
Deposits 10,778 10,778
------------------- -------------------
Total Assets $332,182 $428,586
=================== ===================
2
BIO-LIFE LABS, INC.
(Formerly TecScan International, Inc.)
(A Development Stage Company)
BALANCE SHEETS
(continued)
(UNAUDITED)
SEPTEMBER 30, JUNE 30,
2004 2004
----------------- -----------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 60,662 $ 79,439
----------------- -----------------
Total Current Liabilities 60,662 79,439
----------------- -----------------
Stockholders' equity
Series A convertible preferred stock (par value $.01),
5,000,000 shares authorized, no shares issued or
Outstanding at September 30, 2004 and June 30, 2004 - -
Common Stock (par value $.001), 50,000,000 shares
Authorized, 47,091,805 shares issued and outstanding at
September 30, 2004 and June 30, 2004 47,092 47,092
Paid in capital in excess of par value 746,630 746,630
Deficit accumulated during development stage (522,202) (444,575)
----------------- -----------------
Total Stockholders' Equity (Deficit) 271,520 349,147
----------------- -----------------
Total Liabilities and Stockholders' Equity $ 332,182 $ 428,586
================= =================
The accompanying notes are an integral part of these financial statements.
3
BIO-LIFE LABS, INC.
-------------------
(Formerly TecScan International, Inc.)
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(UNAUDITED) DEFICIT
(UNAUDITED) FOR THE PERIOD ACCUMULATED
FOR THE FROM SINCE
THREE MONTHS JULY 11, 2003 JULY 11, 2003
ENDED TO INCEPTION OF
SEPTEMBER 30, SEPTEMBER 30, DEVELOPMENT
2004 2003 STAGE
--------------- ---------------- -----------------
Revenue: $ - $ - $ -
--------------- ---------------- -----------------
Operating Expenses
Professional Fees 37,392 865 456,644
General and Administrative 40,235 2,370 65,558
--------------- ---------------- -----------------
Total Operating Expenses 77,627 3,235 522,202
--------------- ---------------- -----------------
Net Income (Loss) $ (77,627 $ (3,235) $ (522,202)
=============== ================ =================
Income (Loss) Per Common Share $ - $ -
=============== ===============
Weighted Average Shares Outstanding 47,091,805 -
=============== ===============
The accompanying notes are an integral part of these financial statements.
4
BIO-LIFE LABS, INC.
-------------------
(Formerly TecScan International, Inc.)
STATEMENTS OF CASH FLOW
(UNAUDITED) DEFICIT
(UNAUDITED) FOR THE PERIOD ACCUMULATED
FOR THE FROM SINCE
THREE MONTHS JULY 11, 2003 JULY 11, 2003
ENDED TO INCEPTION OF
SEPTEMBER 30, SEPTEMBER 30, DEVELOPMENT
CASH FLOWS FROM OPERATING ACTIVITIES: 2004 2003 STAGE
------------------------------------- -------------------------------------- -----------------
Net income (loss) $ (77,627) $ (3,235) $ (522,202)
Adjustments to reconcile net income (loss) to net cash
Provided by (Used in) operating activities:
Depreciation and amortization 4,258 - 10,322
Stock issued for services - - 333,777
Change in operating assets and liabilities:
(Increase) Decrease in other receivable - - (5,800)
(Increase) Decrease in deposits - - (10,778)
Increase (Decrease) in accounts payable (18,777) 3,235 13,122
-------------------------------------- -----------------
Net cash used in operating activities (92,146) - (181,559)
-------------------------------------- -----------------
Cash Flows From Investing Activities:
Purchase of property and equipment (246) - (13,678)
Purchase of product rights - - (250,000)
-------------------------------------- -----------------
Net cash used in investing activities (246) - (263,678)
-------------------------------------- -----------------
Cash Flows From Financing Activities:
Proceeds from sale of stock - - 477,875
-------------------------------------- -----------------
Net cash provided by (used in) financing activities - - 477,875
-------------------------------------- -----------------
Net increase (decrease) in cash and cash equivalents (92,392) - 32,638
Cash and cash equivalents at beginning of period 125,030 - -
-------------------------------------- -----------------
Cash and cash equivalents at end of period $ 32,638 $ - $ 32,638
====================================== =================
Supplemental Disclosure of Cash Flow Information:
Interest $ - $ -
Income taxes $ - $ -
Supplemental Schedule of Non-Cash Investing and Financing Activities: None
The accompanying notes are an integral part of these financial statements.
5
BIO-LIFE LABS, INC.
(Formerly TecScan International, Inc.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - ORGANIZATION AND SUMMARY OF ACCOUNTING POLICIES
This summary of accounting policies of Bio-Life Labs, Inc. (formerly
TecScan International, Inc.) (a development stage company) is presented to
assist in understanding the Company's financial statements. The accounting
policies conform to generally accepted accounting principles and have been
consistently applied in the preparation of the financial statements.
Interim Reporting
The unaudited financial statements as of September 30, 2004, and for
the three month period then ended reflect, in the opinion of management, all
adjustments (which include only normal recurring adjustments) necessary to
fairly state the financial position and results of operations for the three
months. Operating results for interim periods are not necessarily indicative of
the results which can be expected for full years.
Organization and Basis of Presentation
The Company was organized under the laws of the State of Utah on
December 5, 1985 as Bullseye Corp. On June 22, 1992 the name of the Company was
changed to Natural Solutions, Ltd. and the corporate domicile was changed to the
State of Nevada. On March 25, 1994, the Company name was changed to Phoenix
Media Group, Ltd. On June 10, 2003, the Company discontinued its then-current
operations, and transitioned to a development stage company. The Company did not
proceed with its planned principal operations. On June 10, 2003, the Company
name was changed to TecScan International, Inc.
On February 18, 2004, the Company acquired 100% of the outstanding
common stock of Very Basic Media, Inc., a company that was incorporated under
the laws of the State of Nevada on October 28, 2003, in a reverse acquisition.
On April 5, 2004, the acquisition of Very Basic Media, Inc. was rescinded. The
Company returned 5,000,000 shares of Very Basic Media, Inc. common stock to Very
Basic Media, Inc. in exchange for 35,000,000 shares of the Company's common
stock; the Company then cancelled the 35,000,000 shares.
On April 5, 2004, the Company acquired 100% of the outstanding common
stock of Bio-Life Laboratories Corporation in a reverse acquisition. Bio-Life
Laboratories Corporation was incorporated under the laws of the State of Nevada
on July 11, 2003 as Crystal Labs Corporation. On February 2, 2004, Crystal Labs
Corporation changed its name to Bio-Life Laboratories Corporation. When the
reverse acquisition took place, a new reporting entity was created. Bio-Life
Laboratories Corporation is considered the reporting entity for financial
reporting purposes. On May 18, 2004, the Company changed its name to Bio-Life
Labs, Inc.
6
BIO-LIFE LABS, INC.
(Formerly TecScan International, Inc.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(continued)
NOTE 1 - ORGANIZATION AND SUMMARY OF ACCOUNTING POLICIES (continued)
Nature of Business
Bio-Life Laboratories Corporation acquired exclusive worldwide rights
to Carcinoderm, a topical ointment that in the estimation of the Company's
management destroys skin cancer cells in patients who have been diagnosed with
basal cell carcinoma, squamous cell carcinoma, and malignant melanoma in a
one-time application that does not harm surrounding healthy tissue. Dr. David
Karam, who has been appointed as one of the Registrant's directors, developed
the product and is conducting what the Company believes are FDA-conforming
clinical trials in the El Paso laboratory facility, where he is currently
investigating other possible uses of and delivery systems for Carcinoderm in the
treatment of other types of cancer, including tumors of the pancreas and brain.
Cash Equivalents
For the purpose of reporting cash flows, the Company considers all
highly liquid debt instruments purchased with maturity of three months or less
to be cash equivalents to the extent the funds are not being held for investment
purposes.
Income Taxes
The Company accounts for income taxes under the provisions of SFAS No.
109, "Accounting for Income Taxes." SFAS No.109 requires recognition of deferred
income tax assets and liabilities for the expected future income tax
consequences, based on enacted tax laws, of temporary differences between the
financial reporting and tax bases of assets and liabilities.
Earnings (Loss) Per Share
Basic net loss per common share is computed by dividing net loss by the
weighted average number of common shares outstanding during the year. Diluted
net loss per common share ("Diluted EPS") reflects the potential dilution that
could occur if stock options or other common stock equivalents were exercised or
converted into common stock. The computation of Diluted EPS does not assume
exercise or conversion of securities that would have an antidilutive effect on
net loss per common share.
There are no dilutive outstanding common stock equivalents at September
30, 2004.
Concentration of Credit Risk
The Company has no significant off-balance-sheet concentrations of
credit risk such as foreign exchange contracts, options contracts or other
foreign hedging arrangements. The Company maintains the majority of its cash
balances with one financial institution, in the form of demand deposits.
7
BIO-LIFE LABS, INC.
(Formerly TecScan International, Inc.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(continued)
NOTE 1 - ORGANIZATION AND SUMMARY OF ACCOUNTING POLICIES (Continued)
Pervasiveness of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles require management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Depreciation and Amortization
Fixed assets are recorded at cost and depreciated using the
straight-line method over the estimated useful lives of the assets which range
from three to seven years. Fixed assets consisted of the following at September
30, 2004 and June 30, 2004, respectively:
(UNAUDITED)
SEPTEMBER30, JUNE 30,
2004 2004
------------------ ------------------
Furniture and Fixtures $ 10,662 $ 10,417
Computer Equipment 3,015 3,015
Less accumulated depreciation (1,001) (239)
------------------ ------------------
Total $ 12,676 $ 13,193
================== ==================
Maintenance and repairs are charged to operations; betterments are
capitalized. The cost of property sold or otherwise disposed of and the
accumulated depreciation thereon are eliminated from the property and related
accumulated depreciation accounts, and any resulting gain or loss is credited or
charged to income.
Total depreciation expense for the three months ended September 30,
2004 was $762.
The Company has adopted the Financial Accounting Standards Board SFAS
No., 142, "Goodwill and Other Intangible Assets." SFAS 142 requires, among other
things, that companies no longer amortize goodwill, but instead test goodwill
for impairment at least annually. In addition, SFAS 142 requires that the
Company identify reporting units for the purposes of assessing potential future
impairments of goodwill, reassess the useful lives of other existing recognized
intangible assets, and cease amortization of intangible assets with an
indefinite useful life. An intangible asset with an indefinite useful life
should be tested for impairment in accordance with the guidance in SFAS 142.
8
BIO-LIFE LABS, INC.
(Formerly TecScan International, Inc.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(continued)
NOTE 1 - ORGANIZATION AND SUMMARY OF ACCOUNTING POLICIES (Continued)
Intangible Assets consisted of the following at September 30, 2004:
Intangible Asset Amortization Amortization Period
----------------------------- ------------------ -------------------
Product Rights $ 279,610 20 Years
Less accumulated amortization (9,320)
------------------
Total $ 270,290
==================
Total amortization expense for the three months ended September 30,
2004 was $3,495.
The estimated amortization for the next five years is as follows:
2004 $ 13,980
2005 13,980
2006 13,980
2007 13,980
2008 13,980
--------------------
Total $ 69,900
====================
NOTE 2 - CAPITAL TRANSACTIONS
Preferred Stock
The Board of Directors of the Company has the authority to fix by
resolution for each particular series of preferred stock the number of shares to
be issued; the rate and terms on which cumulative or non-cumulative dividends
shall be paid; conversion features of the preferred stock; redemption rights and
prices, if any; terms of the sinking fund, if any to be provided for the shares;
voting powers of preferred shareholders; and any other special rights,
qualifications, limitations, or restrictions.
Common Stock
In February 2004, the Company issued 29,609,660 shares of common stock
to acquire product rights. The shares were valued at $29,610.
In February and March 2004, the Company issued 2,720,121 shares of
common stock for cash of $477,875.
9
BIO-LIFE LABS, INC.
(Formerly TecScan International, Inc.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(continued)
NOTE 2 - CAPITAL TRANSACTIONS (continued)
In February and March 2004, the Company issued 2,670,219 shares of
common stock for services valued at $333,777.
On April 5, 2004, the Company acquired Bio-Life Laboratories
Corporation ("Bio-Life") in a reverse acquisition. In the acquisition, the
Company issued 35,000,000 shares of common stock, par value $.001, in exchange
for all of the outstanding shares of Bio-Life (35,000,000 shares, par value
$.0001).
Also on April 5, 2004, an additional 12,091,786 shares of common stock
were issued to the previous owners of TecScan International, Inc. This entry was
recorded by a credit to common stock of $12,092 and a debit to paid-in capital
of $32,025.
NOTE 3 - DEVELOPMENT STAGE COMPANY AND GOING CONCERN
The Company has not begun principal operations and as is common with a
development stage company, the Company has had recurring losses during its
development stage.
Since inception, the Company has incurred recurring losses from
operations and has an accumulated deficit of $522,202 since the inception of the
development stage on July 11, 2003. For the three months ended September 30,
2004, the Company incurred losses of $77,627. This condition raises substantial
doubt about the Company's ability to continue as a going concern.
Continuation of the Company as a going concern is dependent upon
obtaining additional working capital and management has developed a strategy,
which it believes will accomplish this objective through additional equity
funding which will enable the Company to operate in the future. However, there
can be no assurance that the Company will be successful with its efforts to
raise additional capital. The inability of the Company to secure additional
financing in the near term could adversely impact the Company's business,
financial position and prospects.
NOTE 4 - LEASE COMMITMENT
The Company currently leases approximately 824 square feet of office
space at 9911 West Pico Boulevard, Suite 1410, Los Angeles, California, from
Arden Realty Limited Partnership. The lease commenced on May 15, 2004 and has a
lease term of four years. The lease payments for the first year are $1,648 per
month, with the exception of the second and third months of the lease, in which
the payments will be one-half of the monthly lease rate. The lease payments for
the second year are $1,697 per month. The lease payments for the third year are
$1,747 per month. The lease payments for the fourth year are $1,796 per month.
During the first and second month of the first year of the lease, the lease A
security deposit of $10,778 was paid by the Company upon the execution of the
lease.
10
BIO-LIFE LABS, INC.
(Formerly TecScan International, Inc.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(continued)
NOTE 4 - LEASE COMMITMENTS (continued)
In August 2004, the Company began leasing approximately 32,000 square
feet of a building at 16 Concord Road, El Paso, Texas that will be used for
research and development. The lease is for ten years and the monthly payment is
approximately $10,000.
The minimum future lease payments under these leases for the next five
years are:
Year Ended June 30,
-----------------------------------
2005 $ 128,614
2006 140,440
2007 141,038
2008 138,858
2009 120,000
---------------
Total minimum future lease payments $ 668,950
===============
NOTE 5 - PRODUCT RIGHTS
On February 27, 2004, the Company entered into an agreement David Wade
Karam, M.D./Ph.D. ("the licensor"), whereby the licensor has granted to the
Company the exclusive right to market, sell, distribute and use a skin cancer
treatment that has been used to successfully treat skin cancer patients with
Basal Cell Carcinoma, Squamous Cell Carcinoma, and Melanoma in clinical trials.
The agreement is for a period of twenty years. The Company paid the licensor
$250,000 in cash, and issued the licensor 29,609,660 shares of the Company's
common stock, valued at $29,610. The Company has booked an intangible asset of
$279,610, and is amortizing the intangible asset over a period of twenty years.
NOTE 6 - INCOME TAXES
As of June 30, 2004, the Company had a net operating loss carryforward
for income tax reporting purposes of approximately $445,000 that may be offset
against future taxable income through 2024. Current tax laws limit the amount of
loss available to be offset against future taxable income when a substantial
change in ownership occurs. Therefore, the amount available to offset future
taxable income may be limited. No tax benefit has been reported in the financial
statements, because the Company believes there is a 50% or greater chance the
carry-forwards will expire unused. Accordingly, the potential tax benefits of
the loss carry-forwards are offset by a valuation allowance of the same amount.
11
BIO-LIFE LABS, INC.
(Formerly TecScan International, Inc.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(continued)
NOTE 7 - LITIGATION
The Company (formerly known as Phoenix Media Group, Ltd.) was
delinquent on approximately $12,000 in condominium association dues on a
property previously owned by the Company. The property was distributed to the
former President of the Phoenix Media Group, Ltd. in June of 2003. The
condominium association has filed a lawsuit to collect the past due fees. The
lawsuit was settled during the year ended June 30, 2004. The amount due has been
included in accounts payable.
NOTE 8 - ACQUISITION
On April 5, 2004, the Company acquired 100% of the outstanding common
stock of Bio-Life Laboratories Corporation in a reverse acquisition. The Company
issued 35,000,000 shares of common stock to acquire all of the outstanding
common stock of Bio-Life Laboratories Corporation. When the reverse acquisition
took place, a new reporting entity was created. Bio-Life Laboratories
Corporation is considered the reporting entity for financial reporting purposes.
12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLAN
OF OPERATIONS.
The following discussion contains forward-looking statements, which
involve risks and uncertainties. Our actual results could differ materially from
those anticipated in these forward-looking statements as a result of various
factors, including those set forth under the caption "Business - Risk Factors".
This Management's Discussion and Analysis of Financial Condition and Results of
Operations should be read in conjunction with our consolidated financial
statements and related notes included elsewhere in this Form 10-KSB.
OVERVIEW
We are a research-driven biotechnology company focused on discovery,
development, and commercialization of treatments for cancer, diabetes mellitus,
hepatitis C, and other diseases for which current treatments have limited
efficacy, severe toxicity, and other negative results. Our signature product
candidate Carcinoderm(TM) is a topical ointment that destroys skin cancer cells
in patients who have been diagnosed with basal cell carcinoma, squamous cell
carcinoma, and malignant melanoma, using a single application that does not harm
surrounding healthy tissue. Carcinoderm is currently being studied in what we
believe are FDA-conforming clinical trials in our laboratory facilities in El
Paso, Texas. We are also investigating additional possible uses of and delivery
systems for Carcinoderm that target various solid tumor cancers.
In addition to Carcinoderm we have other product candidates in research
and pre-clinical development, including a treatment for diabetes mellitus that
in our estimation slows the destruction of pancreatic cells, and a product
candidate for hepatitis C that we believe has implication in blocking the
enzymes responsible for the destruction of tissue. We are not funding this
research, however, we have the first right of refusal on any results that we
choose to acquire.
The information discussed herein is for Bio-Life-Labs' operations for
the three months ended September 30, 2004. As of September 30, 2004, our
accumulated deficit was approximately $522,202. We may incur losses for the next
several years as we continue development and prepare for the commercialization
of our skin cancer product candidate Carcinoderm; expand the applications and
delivery systems for Carcinoderm; expand in-house manufacturing capability to
support the commercialization of Carcinoderm, as well as other product
candidates; and expand our research and development programs.
13
We have a limited history of operations as a biotechnology company. To
date, we have funded our operations primarily through sales of equity securities
in an exempt private placement.
We have worldwide manufacturing and commercialization rights to
Carcinoderm and any derivative products, and plan to market these products
through our own sales force or through strategic alliances both in the United
States and abroad. Agreements with potential collaborators may include joint
marketing or promotion arrangements. Alternatively, we may grant exclusive
marketing rights to potential collaborators in exchange for up-front fees,
milestones and royalties on future sales, if any. We intend to manufacture
Carcinoderm at our manufacturing facility in El Paso, Texas. We believe that our
manufacturing facility will have the capacity to satisfy commercial demand for
Carcinoderm for several years after the initial product launch.
Our business is subject to significant risks, including the risks
inherent in our ongoing clinical trial and the regulatory approval process; the
results of our research and development efforts; and competition from other
products and uncertainties associated with obtaining and enforcing patent
rights.
Clinical development timelines, achievement of success, and development
costs vary widely. If we are successful in securing additional funding, we
intend to apply for FDA (U. S. Food and Drug Administration) approval for
Carcinoderm(TM) in 2005, and will focus our efforts on developing a clinical
program that is fully responsive to the U.S. Food and Drug Administration's
(FDA) guidance on moving a product through the regulatory process. Although
Carcinoderm is not by definition a pharmaceutical, and thus does not require FDA
approval, we believe that we have followed FDA guidelines, rules, and
regulations applicable to a clinical research project in order to prepare for
application for FDA approval for the product (a product need not be classified
as a pharmaceutical to receive FDA approval), as well as to document its
efficacy.
Product candidate completion dates and completion costs vary
significantly and are difficult to estimate. The expenditure of substantial
resources will be required for the lengthy process of clinical development and
obtaining regulatory approval as well as to comply with applicable regulations.
Any failure by us to obtain, or any delay in obtaining, regulatory approval
could cause our research and development expenditures to increase and, in turn,
have a material adverse effect on our results of operations. We cannot be
certain when any net cash inflows from Carcinoderm or any of our other
development projects will commence.
14
RESULTS OF OPERATIONs - The Company is in the development stage. For the three
months ended September 30, 2004, the Company had net loss of $77,627. The loss
is primarily due to start-up expenses of a new company, and costs associated
with the reverse merger. General and administrative expenses included $37,392
paid for attorneys, accountants, and regulatory expenses.
LIQUIDITY AND CAPITAL RESOURCES - Our future capital uses and requirements
depend on numberous forward-looking factors. These factors include, but are not
limited to the following:
o the progress of our research activities;
o the number and scope of our research programs;
o the progress of our pre-clinical development activities;
o our ability to establish and maintain strategic collaborations;
o the costs involved in enforcing or defending patent claims and other
intellectual property rights;
o the costs and timing of regulatory approvals;
o the costs of establishing or expanding manufacturing, sales and
distribution capabilities;
o the success of the commercialization of Carcinoderm; and
o the extent to which we acquire or invest in other products,
technologies and business.
To date, we have funded our operations primarily through the sale of
equity securities in an exempt private placement. Through September 30, 2004, we
received aggregate net proceeds of approximately $477,875 from the sale of
exempt private placement equity securities.
Until we can generate significant cash from our operations, we expect
to continue to fund our operations with existing cash resources that were
primarily generated from the proceeds of exempt private offerings of our equity
securities. In addition, we may finance future cash needs through the sale of
additional equity securities, strategic collaboration agreements, and debt
financing. However, we may not be successful in obtaining collaboration
agreements, or in receiving milestone or royalty payments under those
agreements. In addition, we cannot be sure that our existing cash resources will
be adequate or that additional financing will be available when needed or that,
if available, financing will be obtained on terms favorable to us or our
stockholders. Having insufficient funds may require us to delay, scale back or
eliminate some or all of our research or development programs or to relinquish
greater or all rights to product candidates at an earlier stage of development
or on less favorable terms than we would otherwise choose. Failure to obtain
adequate financing also may adversely affect our ability to operate as a going
concern. If we raise additional funds by issuing equity securities, substantial
dilution to existing stockholders would likely result. If we raise additional
funds by incurring debt financing, the terms of the debt may involve significant
cash payment obligations as well as covenants and specific financial ratios that
may restrict our ability to operate our business.
OFF-BALANCE SHEET ARRANGEMENTS
Through September 30, 2004, we did not have any relationships with
unconsolidated entities or financial partnerships, such as entities often
referred to as structured finance or special purpose entities, which would have
been established for the purpose of facilitating off-balance sheet arrangements
or other contractually narrow or limited purposes. In addition, we do not engage
in trading activities involving non-exchange traded contracts. As such, we are
not materially exposed to any financing, liquidity, market, or credit risk that
could arise if we had engaged in these relationships. We do not have
relationships or transactions with persons or entities that derive benefits from
their non-independent relationship with us, or our related parties.
15
FACTORS THAT MAY AFFECT FUTURE RESULTS - Management's Discussion and Analysis
contains information based on management's beliefs and forward-looking
statements that involved a number of risks, uncertainties, and assumptions.
There can be no assurance that actual results will not differ materially for the
forward-looking statements as a result of various factors, including but not
limited to the following:
The foregoing statements are based upon management's current
assumptions.
ITEM 3. CONTROLS AND PROCEDURES
The Company's Chief Executive Officer and Chief Financial Officer have
concluded, based on an evaluation conducted within 90 days prior to the filing
date of this Quarterly Report on Form 10-QSB, that the Company's disclosure
controls and procedures have functioned effectively so as to provide those
officers the information necessary to evaluate whether:
(i) this Quarterly Report on Form 10-QSB contains any untrue statement
of a material fact or omits to state a material fact necessary to make
the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered
by this Quarterly Report on Form 10-QSB, and
(ii) the financial statements, and other financial information included
in this Quarterly Report on Form 10-QSB, fairly present in all material
respects the financial condition, results of operations and cash flows
of the Company as of, and for, the periods presented in this Quarterly
Report on Form 10-QSB.
There have been no significant changes in the Company's internal controls or in
other factors since the date of the Chief Executive Officer's and Chief
Financial Officer's evaluation that could significantly affect these internal
controls, including any corrective actions with regard to significant
deficiencies and material weaknesses.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
A lawsuit was filed in the District Court of El Paso County, 34th
Judicial District. Zack Thomas is seeking to enforce an alleged agreement
between him and the principal shareholder of the Company under which the
principal shareholder allegedly agreed to issue the Plaintiff 25% of the equity
received by the principal shareholder for developing his invention in a
predecessor company, Bio-Life Labs, Inc., for which the Plaintiff worked.
Counsel to the Company has advised that the Company is only a nominal party
necessary to resolve all issues between the Plaintiff and Defendant. The Company
is not responsible for any sum of money or stock. However, should the Plaintiff
prevail, the principle shareholder's percentage interest would be reduced from
approximately 63% to 48%; no change of control would occur.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
No reports were filed on Form 8-K during the three months ended
September 30, 2004.
31.1 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1 Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2 Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
16
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Bio-Life Labs, Inc.
DATE: November 19, 2004
By: /s/ Nancy LeMay
-----------------------------------------------------
Nancy LeMay, President, Secretary, Director
(Principal Executive Officer)
By: /s/ Joseph McGhie
-----------------------------------------------------
Joseph McGhie, Chief Financial Officer, Director
(Principal Financial Officer)