U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For Fiscal Year Ended: June 30, 2004
or
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from To
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Commission file number 000-21376
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Bio-Life Labs, Inc.
(Name of small business issuer in its charter)
Nevada 33-0714007
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State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
9911 West Pico Boulevard, Suite 1410, Los Angeles, California 90035
(Address of principal executive offices) (zip code)
Issuer's telephone number (310) 943-6445
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Securities registered under Section 12(b) of the Act: NONE
Securities registered under Section 12(g) of the Act:
Common Stock Par Value $0.001
(Title of class)
Check 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
Check if there is no disclosure of delinquent filers pursuant to Item 405
of Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this form 10-KSB. [ ]
State issuer's revenues for its most recent fiscal year. $0
---
At October 8, 2004, the aggregate market value of all shares of voting
stock held by non-affiliates was approximately $1,133,870. In determining this
figure Registrant has assumed that all directors and executive officers are
affiliates. This assumption shall not be deemed conclusive for any other
purpose. The number of shares outstanding of each class of the Registrant's
common stock, as of June 30, 2004, was as follows: 47,091,805 common shares,
$.001 par value per share.
DOCUMENTS INCORPORATED BY REFERENCE
If the following documents are incorporated by reference, briefly
describe them and identify the part of the Form 10-KSB (e.g., Part I, Part II,
etc.) into which the document is incorporated: (1) any annual report to security
holders; (2) any proxy or information statement; and (3) any prospectus filed
pursuant to Rule 424(b) or (c) of the Securities Act of 1933 ("Securities Act"):
NONE
Transitional Small Business Disclosure Format (check one): Yes ; No X
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TABLE OF CONTENTS
Item Number and Caption Page
PART I
Item 1. Description of Business 4
Item 2. Description of Property 6
Item 3. Legal Proceedings 7
Item 4. Submission of Matters to a Vote of Security Holders 7
PART II
Item 5. Market for Common Equity and Related Stockholder Matters 8
Item 6. Management's Discussion and Analysis or Plan of Operations 9
Item 7. Financial Statements 12
Item 8. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure 12
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act 12
Item 10. Executive Compensation 15
Item 11. Security Ownership of Certain Beneficial Owners and Management 15
Item 12. Certain Relationships and Related Transactions 16
Item 13. Exhibits and Reports on Form 8-K 16
Item 14. Controls and Procedures 17
Item 15. Principal Accountant Fees & Services 18
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PART I
ITEM 1 DESCRIPTION OF BUSINESS
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.
BIO-LIFE LABORATORIES CORPORATION. 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.
THE PRODUCT. Carcinoderm is a topical ointment that is formulated to destroy
skin cancer cells in a one-time application without harming surrounding healthy
tissue. After the ointment has been applied to the affected area, a scab begins
to form. In four to five weeks the scab falls off, leaving the underlying tissue
in a hypersensitive state for approximately 48 hours. Skin coloration returns to
normal after seven or eight weeks. At the 12-week mark, there is little evidence
of tissue alteration and the treated area has totally returned to its previous
thickness.
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PRODUCT CLASSIFICATION AND REGULATION. Carcinoderm is made from plant material
and other FDA-approved ingredients. Although Carcinoderm is classified as a
nutraceutical, and thus does not require FDA approval, Dr. Karam has followed
FDA guidelines, rules, and regulations applicable to a clinical research project
to prepare for application for FDA approval (a product need not be classified as
a pharmaceutical to receive FDA approval), as well as to establish its efficacy
for health care professionals. When we apply for FDA approval for the product or
a derivation of the product, FDA Phase I studies will already be in place.
PRODUCT FEATURES. We believe that the efficacy factor for Carcinoderm rivals
other forms of skin cancer treatments, but with significant advantages:
|X| One-time application.
|X| No residual disfigurement.
|X| Does not harm surrounding healthy tissue.
In the estimation of our management, the product also appears to act as
a diagnostic tool. When Carcinoderm is applied to a cancer lesion, a pattern of
red-colored finger projections radiate out from the treated area; these
projections appear to be underlying cancer cells. Because the product does not
attack healthy tissue, these finger projections do not appear when it is applied
to a benign lesion.
PRODUCTION. We are currently producing the Carcinoderm ointment in a three-step
segmented production process in the El Paso and Juarez lab facilities, and the
local college. The first step in production is an extraction procedure from a
group of plants. In a second step, the extracted material is heated in large
ovens. The third and final step is mixing the product and putting it in plastic
containers. We plan to produce the product in single-tube application with a
peel-off top. One application of Carcinoderm measures approximately 0.5 grams.
CLINICAL TRIALS. Although we have not formally applied for FDA approval, Dr.
Karam has been conducting clinical trials of Carcinoderm in compliance with FDA
rules and procedures for over two years in order to document treatment results
of the product in accordance with standards acceptable to qualified evaluators
of the product.
THE MARKET. The American Cancer Society estimates that during 2004 approximately
one million new cases of basal cell or squamous cell carcinoma and about 59,350
new cases of malignant melanoma, the deadliest type of skin cancer, will be
diagnosed. The ACS further estimates that skin cancer will claim the lives of
approximately 9,800 Americans, 7,900 as a result of melanoma. Since 1997 the
incidence of new melanoma cases in the U.S. has increased at an average of more
than 5% per year, one of the highest growth rates for any type of cancer. By
2000 there were over 510,000 living skin cancer patients in the U.S. who had
been diagnosed with melanoma. Although death rates from basal cell and squamous
cell carcinomas are low, the ACS indicates that these cancers can cause
considerable damage and disfigurement if left untreated. Global skin cancer
statistics are equally alarming. The World Health Organization indicates that,
in 2000, the number of newly diagnosed cases of melanoma was 132,600, with
37,000 deaths reported.
According to information compiled by our management, the cost to
Medicare for the treatment of skin cancers in the United States is currently
estimated at $ 13 billion per year. That
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figure, based on an analysis of CPT codes in a 5% cross section of the Medicare
billing database, approaches the total cost to treat both prostate and breast
cancer. While the incidence of breast and prostate cancers has remained
relatively stable, diagnoses of skin cancers continue to rise. Reports of this
phenomenon appear worldwide, however, tracking global treatment costs presents
severe logistical challenges because of problems relating to reporting and lack
of uniformity in the registry of skin cancer statistics.
RESEARCH AND DEVELOPMENT. Carcinoderm: The Double Blind randomized clinical
trial to test the efficacy of Carcinoderm in the treatment of squamous cell
carcinoma, basal cell carcinoma, and malignant melanoma is ongoing. Additional
research goals for 2004 with respect to Carcinoderm are as follows:
|X| Define which receptor provides the intake for the Carcinoderm.
|X| Define the metabolic pathway for the activation of Carcinoderm.
|X| Define the long-term ramifications to tissue treated with Carcinoderm.
|X| Define which receptor is involved in the transference of the effects of
Carcinoderm from cell to cell, yet spares healthy tissue.
|X| Define possible uses of Carcinoderm in the treatment of other types of tumor
cells.
Other Treatment Products and Methods: Dr. Karam has developed treatment
formulas that appear to be effective in initial research for treating diabetes
mellitus and hepatitis C. We have the right of first refusal on these products,
but do not have rights to them at this time. Research goals for 2004 with
respect to these treatments are as follows:
|X| Identify the mechanism of action/efficacy for the effects of the
nutraceutical formulation for Diabetes Mellitus. |X| Identify the mechanism of
action/efficacy for the effects of the nutraceutical treatment for Hepatitis C.
PATENT. As of the date of this filing, provisional patent application for
Caricinoderm has been filed. We anticipate that we will be filing an additional
patent or patents in the last quarter of 2004.
RISKS. There are several risks typically associated with operations of this
type, and the Registrant cannot guarantee it will achieve the ability to operate
profitably. As a result of this transaction, the Registrant undertakes to
disclose in its upcoming annual report, a description of risks inherent in
operating its business, including product development, clinical trials, FDA
approval, physician and patient acceptance, development and manufacture and
sales of a marketable product, intellectual property and product liability.
ITEM 2 DESCRIPTION OF PROPERTY
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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. A
security deposit of $10,778 was paid by the Company upon the execution of the
lease.
In August 2004, the Company begaen leasing a facility to be used for
research and development. The lease is to commence August 1, 2004 and has a
lease term of ten years.
ITEM 3 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.
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.
ITEM 4 SUBMISSION OF MATTERS TO A
VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of shareholders during the
period ended June 30, 2004.
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PART II
ITEM 5 MARKET FOR COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS
The stock is traded on the OTC Bulletin Board with the trading symbol
BLFE.OB.
The following table set forth the high and low bid of the Company's
Common Stock for each quarter within the past two years:
June 30, 2004: High Low
First Quarter $ 1.90 $ 0.17
Second Quarter $ 4.50 $ 1.20
Third Quarter $ 1.80 $ 0.27
Fourth Quarter $ 1.90 $ 0.56
June 30, 2003 High Low
First Quarter $ 8.00 $ 2.50
Second Quarter $ 15.00 $ 3.00
Third Quarter $ 15.00 $ 3.00
Fourth Quarter $ 21.00 $ 2.00
The number of shareholders of record of the Company's common stock as
of September 21, 2004 was approximately 874.
The Company has not paid any cash dividends to date and does not
anticipate paying cash dividends in the foreseeable future. It is the present
intention of management to utilize all available funds for the development of
the Company's business.
Recent Sales of Unregistered Securities.
The Company issued 39,000,000 shares of common stock during the year
ended June 30, 2004. The stock was not sold through an underwriter and was not
sold through a public offer. These sales are exempt under Regulation D Rule 506
of the Securities Act of 1933. (See Item &. Financial Statements, Statement of
Stockholders' Equity, pages F - 7 through F - 9)
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Exchange Act requires the Company's directors,
executive officers, and persons who own more than 10% of a registered class of
the Company's equity securities, to file with the Commission reports regarding
initial ownership and changes in ownership. Directors, executive
8
officers, and greater than 10% stockholders are required by the Commission to
furnish the Company with copies of all Section 16(a) forms they file.
To the best of our knowledge, during the fiscal year ended June 30,
2004, all executive officers, directors and greater than 10% shareholders filed
the required reports in a timely manner.
ITEM 6 MANAGEMENT'S DISCUSSION AND
ANALYSIS OR 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 period from July 11, 2003 (inception) to June 30, 2004. As of June 30, 2004,
our accumulated deficit was approximately $444,575. 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.
We have a limited history of operations as a biotechnology company. To
date, we have
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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.
Results of Operations - The Company is in the development stage. For the period
from July 11, 2003 (inception) to June 30, 2004, the Company had net loss of
$445,575. 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 $419,252 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;
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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 June 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 June 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.
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.
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ITEM 7 FINANCIAL STATEMENTS
The financial statements of the Company and supplementary data are
included beginning immediately following the signature page to this report. See
Item 13 for a list of the financial statements and financial statement schedules
included.
ITEM 8 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
There are not and have not been any disagreements between the Company
and its accountants on any matter of accounting principles, practices or
financial statements disclosure.
PART III
ITEM 9 DIRECTORS EXECUTIVE OFFICERS, PROMOTERS AND
CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF
THE EXCHANGE ACT
Executive Officers and Directors
The following table sets forth the name, age, and position of each
executive officer and director of the Company:
Director's Name Age Office Term Expires
Nancy LeMay 50 President/Secretary/
Director Next annual shareholder meeting
David Karam 39 Director Next annual shareholder meeting
Joseph McGhie 52 Chief Financial Officer/
Director Next annual shareholder meeting
NANCY LEMAY. On April 8, 2004, Ms. LeMay was appointed as President, Secretary
and as a member of our Board of Directors. Ms. LeMay is also the president and a
director of Bio-Life Labs, Inc. An entrepreneur and business leader for over 20
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years, Ms. LeMay has been active in the concept design, launch, and operation of
start-up businesses facing break-in market and rapid expansion challenges,
including gaming, construction components manufacturing, insurance product and
program design, and healthcare corporate finance.
Ms. LeMay began her career with the Internal Revenue Service ("IRS"),
where she rose through the ranks as a Revenue Officer and Revenue Agent, acting
finally as Chief of Special Procedures where she advised Examination and
Collection Division personnel regarding the highly specialized, technical and
complex aspects of Federal taxation, including insolvencies, trusts and decedent
estates, Federal Tax Lien issues, transferee and jeopardy assessments, and
redemption rights. During her employment with the IRS, Ms. LeMay completed
extensive coursework in personal, corporate, and estate and trust taxation. Ms.
LeMay was also a frequent Regional Lead Instructor for Revenue Officer and
Revenue Agent training programs.
Following her IRS service, Ms. LeMay joined the State of Nevada's
Gaming Control Board as a Financial Agent, performing complex financial
investigations of corporate gaming license applicants, and presenting
transaction and other financial analysis to Board members for application
determination. Since leaving government service, Ms. LeMay has been both a
consultant to and involved in the senior management of early stage businesses,
bringing concepts to commercial reality by working with investors and lenders,
other executives, and customers within service, manufacturing, and retail
industry sectors. Ms. LeMay was educated at the University of Nevada at Reno,
where she studied accounting. Ms. LeMay is not an officer or director or
director of any other reporting company.
DAVID KARAM, M.D., Ph.D. As of April 8, 2004, Dr. Karam was appointed as a
member of our Board of Directors. Dr. Karam is Executive Vice President and
Chief Medical Officer, and a member of the Board of Directors of Bio-Life Labs,
Inc. In his role as Executive Vice President and Chief Medical Officer Dr. Karam
is responsible for Bio-Life's Medical Affairs, Regulatory Affairs, Research and
Product Development, Development Sciences, and Quality functions. Prior to
joining Bio-Life Labs, Dr. Karam was the Director of Scientific Research for ZDS
Center for Human Performance and Biotechnology Labs, L.L.C. in El Paso, Texas.
While at ZDS, Dr. Karam's research was centered on continuing development of an
adjunctive treatment for basal cell carcinoma, squamous cell carcinoma, and
malignant melanoma skin cancers. Dr. Karam's 10-year career in medical research
included a focus on CNS regenerative work and receptive field expansion; his
research in these areas resulted in the development of a spinal fusion device as
well as a publication on the efficacy of implantable spinal stimulation and it's
efficacy for the control of intractable pain. In earlier years Dr. Karam was a
volunteer assistant through Emory University with the Center for Disease Control
in the research of the Ebola virus; he also assisted on the Necrotizing Fascitis
projects.
In addition to his work at Bio-Life Labs, Dr. Karam holds a board
position with the St. Luke School of Medicine where he is the Director of
Doctoral Programs and Adjunct Professor in Neurosciences. He has also served as
an Adjunct Professor in the Physical Therapy Program with El Paso Community
College, where he wrote the class text; developed the examination material; and
taught Functional Anatomy as well as the Board Review Class for the Physical
Therapist Assistant
13
State licensure exam. Dr. Karam was a lead instructor in a course entitled
Microsurgical Management of Carpal Tunnel Syndrome, taught in conjunction with
the University of Juarez, Mexico, and in earlier years taught as a Graduate
Assistant in Organic Chemistry under the direction of Dr. Jack Duff at Kennesaw
State University.
Dr. Karam has published two textbooks: Gross Anatomy of the Head and
Neck, and Neuroscience - a New Horizon. He has presented papers to the Music
Therapy Association in the Anatomic Basis of Hearing and Music Association, and
on the Anatomic Basis of Evoked Emotion and the Neuro-Anatomic Basis of Music;
to the Chemistry Society on the Utilization of NMR for the Identification of 3D
molecular structures; to the Athletic Trainers Association of Texas on
Concussion and the Neurophysiologic basis of Concussive Syndrome; and has made
additional scientific presentations on Steroids and Sports Medicine to the Ohio
Chapter of the American Physical Therapy Association, and Receptive Field
Expansion at Emory University. Dr. Karam developed a computer program for the
containment of possible Chemical Weapons of Mass Destruction in conjunction with
Daniels and Associates of Phoenix, Arizona. Dr. Karam is a member of the
American Chemical Society; the International Brain Research Organization; the
Cognitive Neuroscience Society; the Royal Society of Neuroscience; the American
Physiology Society; the American Academy of Anti-aging; the American Academy of
Neurological Surgeons; and the American Academy of Orthopedic and Neurologic
Surgeons. In 2004 Dr. Karam was listed in the Empire Who's Who. Dr. Karam holds
a Bachelor of Science degree in Business Management and received his Doctor of
Medicine degree from St. Luke School of Medicine; he completed post- doctoral
work in Neuroscience and Biochemistry. Dr. Karam is not an officer or director
of any other reporting company.
JOSEPH G. MCGHIE. LL.B, M.B.A. As of April 8, 2004, Mr. McGhie was appointed as
a member of our Board of Directors. Mr. McGhie is also our Chief Financial
Officer. Mr. McGhie is an experienced investment banking and corporate finance
dealmaker, having initiated and completed transactions valued at more than
$750,000,000. Mr. McGhie has been active in arranging sale, finance, merger, and
strategic alliance transactions since 1974, and has specialized in assisting
early stage and middle market companies in California, Nevada and Arizona since
1985. A frequent speaker at industry and community associations, we believe Mr.
McGhie is known for developing creative solutions to complex and challenging
corporate finance situations. His expertise includes identifying equity
investors for private, high growth companies, creating innovative capital
structures, and arranging mergers, acquisitions, strategic partnerships and
alliances.
As a strong supporter of graduate level education, Mr. McGhie has been
involved with the Anderson Graduate School of Business Administration, The
University of Southern California, University of Nevada Las Vegas, and Harvard
Business School Association in Orange County and Los Angeles. Mr. McGhie holds a
Bachelor of Laws degree (LL.B.) from the University of Alberta, Canada and an
MBA with Second Year Honors from the Harvard Business School. Mr. McGhie is not
an officer or director of any other reporting company.
There is no family relationship between any of our officers or
directors. There are no orders, judgments, or decrees of any governmental agency
or administrator, or of any court of competent jurisdiction, revoking or
suspending for cause any license, permit or other authority to engage in the
14
securities business or in the sale of a particular security or temporarily or
permanently restraining any of our officers or directors from engaging in or
continuing any conduct, practice or employment in connection with the purchase
or sale of securities, or convicting such person of any felony or misdemeanor
involving a security, or any aspect of the securities business or of theft or of
any felony. Nor are any of the officers or directors of any corporation or
entity affiliated with us so enjoined.
Audit Committee Financial Expert
The Company's board of directors does not have an "audit committee
financial expert," within the meaning of such phrase under applicable
regulations of the Securities and Exchange Commission, serving on its audit
committee. The board of directors believes that all members of its audit
committee are financially literate and experienced in business matters, and that
one or more members of the audit committee are capable of (i) understanding
generally accepted accounting principles ("GAAP") and financial statements, (ii)
assessing the general application of GAAP principles in connection with our
accounting for estimates, accruals and reserves, (iii) analyzing and evaluating
our financial statements, (iv) understanding our internal controls and
procedures for financial reporting; and (v) understanding audit committee
functions, all of which are attributes of an audit committee financial expert.
However, the board of directors believes that there is not any audit committee
member who has obtained these attributes through the experience specified in the
SEC's definition of "audit committee financial expert." Further, like many small
companies, it is difficult for the Company to attract and retain board members
who qualify as "audit committee financial experts," and competition for these
individuals is significant. The board believes that its current audit committee
is able to fulfill its role under SEC regulations despite not having a
designated "audit committee financial expert."
ITEM 10 EXECUTIVE COMPENSATION
None of the executive officer's salary and bonus exceeded $100,000
during the any of the Company's last two fiscal years.
ITEM 11 SECURITY OWNERSHIP OF BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of our common stock as of September 13, 2004, by each
person or entity known by us to be the beneficial owner of more than 5% of the
outstanding shares of common stock, each of our directors and named executive
officers, and all of our directors and executive officers as a group.
15
Name and Address Amount & Nature Percent
Title of Class of Beneficial Owner of Beneficial Owner of Class
Common Stock Nancy LeMay 1,084,009 shares 2.30%
9911 W. Pico Boulevard, President, Secretary
Ste. 1410, and Director Los Angeles, CA 90035
Common Stock David Karam 29,609,660 shares 62.88%
9911 W. Pico Boulevard, Director
Ste. 1410, Los Angeles, CA 90035
Common Stock Joseph McGhie 200,000 shares 0.42%
9911 W. Pico Boulevard, Chief Financial Officer
Ste. 1410, and Director Los Angeles, CA 90035
Common Stock All directors and named 30,893,669 shares 65.60%
executive officers as a
group
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There are none to report.
ITEM 13. EXHIBITS, AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report.
1. Financial Statements Page
Report of Robison, Hill & Co., Independent Certified Public Accountants.....F-1
Balance Sheets
June 30, 2004..............................................................F-3
Statements of Loss
16
For the Period from July 11, 2003 (inception) to June 30, 2004............F-5
Statement of Stockholders' Equity
For the Period from July 11, 2003 (inception) to June 30, 2004............F-6
Statements of Cash Flows
For the Period from July 11, 2003 (inception) to June 30, 2004............F-7
Notes to Financial Statements
June 30, 2004..............................................................F-8
2. Financial Statement Schedules
All schedules are omitted because they are not applicable or the required
information is shown in the financial statements or notes thereto.
3. Exhibits
The following exhibits are included as part of this
report:
Exhibit
Number Title of Document
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.
(b) Reports Filed on Form 8-K
On May 18, 2004, the Company filed a Form 8-K under Item 5, Other
Events.
BIO-LIFE LABS, INC.
(TecScan International, Inc.)
(A Development Stage Company)
- : -
FINANCIAL STATEMENTS
JUNE 30, 2004
TABLE OF CONTENTS
Page
Independent Auditor's Report....................................................................................F-1
Balance Sheets
June 30, 2004................................................................................................F-3
Statements of Operations
For the Period from July 11, 2003 (inception) to June 30, 2004 And for the
Cumulative Period from July 11, 2003 (inception)
To June 30, 2004.............................................................................................F-5
Statement of Stockholders' Equity
From July 11, 2003 (inception) to June 30, 2004 .............................................................F-6
Statements of Cash Flows
For the Period from July 11, 2003 (inception) to June 30, 2004 And for the
Cumulative Period from July 11, 2003 (inception)
To June 30, 2004.............................................................................................F-7
Notes to the Financial Statements
June 30, 2004................................................................................................F-8
Report of Independent Certified Public Accountants
Audit Committee
Bio-Life Labs, Inc.
(Formerly TecScan International, Inc.)
(A Development Stage Company)
We have audited the accompanying balance sheets of Bio-Life Labs, Inc.
(formerly TecScan International, Inc.) (a development stage company) as of June
30, 2004, and the related statements of operations and cash flows for the period
from July 11, 2003 (inception) to June 30, 2004, and the statement of changes in
stockholders' equity for the period from July 11, 2003 (inception) to June 30,
2004. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Bio-Life Labs, Inc.
(formerly TecScan International, Inc.) (a development stage company) as of June
30, 2004, and the results of its operations and its cash flows for the period
from July 11, 2003 (inception) to June 30, 2004 in conformity with accounting
principles generally accepted in the United States of America.
F - 1
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company has suffered recurring losses from operations
and has a net capital deficiency that raise substantial doubt about its ability
to continue as a going concern. Management's plans in regard to these matters
are also described in Note 1. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Respectfully submitted,
/s/ Robison, Hill & Co.
Certified Public Accountants
Salt Lake City, Utah
October 13, 2004
F - 2
BIO-LIFE LABS, INC.
(Formerly TecScan International, Inc.)
(A Development Stage Company)
BALANCE SHEETS
June 30,
2004
-----------------
ASSETS:
Current Assets
Cash $ 125,030
Other receivable 5,800
-----------------
Total Current Assets 130,830
-----------------
Fixed Assets
Furniture and Fixtures 10,417
Computer Equipment 3,015
Less Accumulated Depreciation (239)
-----------------
Net Fixed Assets 13,193
-----------------
Intangible Assets
Product Rights 279,610
Less Accumulated Amortization (5,825)
-----------------
Net Intangible Assets 273,785
-----------------
Other Assets
Deposits 10,778
-----------------
Total Assets $ 428,586
=================
F - 3
BIO-LIFE LABS, INC.
(Formerly TecScan International, Inc.)
(A Development Stage Company)
BALANCE SHEETS
(continued)
June 30,
2004
-----------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 79,439
-----------------
Total Current Liabilities 79,439
-----------------
Stockholders' equity
Series A convertible preferred stock (par value $.01), 5,000,000 shares
authorized, no shares issued or
Outstanding at June 30, 2004 -
Common Stock (par value $.001), 50,000,000 shares
Authorized, 47,091,805 shares issued and outstanding at
June 30, 2004 47,092
Paid in capital in excess of par value 746,630
Deficit accumulated during development stage (444,575)
-----------------
Total Stockholders' Equity (Deficit) 349,147
-----------------
Total Liabilities and Stockholders' Equity $ 428,586
=================
The accompanying notes are an integral part of these financial statements.
F - 4
BIO-LIFE LABS, INC.
(Formerly TecScan International, Inc.)
(A Development Stage Company)
STATEMENTS OF OPERATIONS
Deficit
Accumulated
For the Period Since
from July 11, 2003
July 11, 2003 Inception of
to Development
June 30, 2004 Stage
------------------ ------------------
Revenue: $ - $ -
------------------ ------------------
Operating Expenses
Professional Fees 419,252 419,252
General and Administrative 25,323 25,323
------------------ ------------------
Total Operating Expenses 444,575 444,575
------------------ ------------------
Net Income (Loss) $ (444,575)$ (444,575)
================== ==================
Income (Loss) Per Common Share $ (0.03)
==================
Weighted Average Shares Outstanding 14,498,394
==================
The accompanying notes are an integral part of these financial statements.
F - 5
BIO-LIFE LABS, INC.
(Formerly TecScan International, Inc.)
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Deficit
Accumulated
Since
July 11,
2003
Capital in Inception of
Common Stock Excess of Development
-------------------------------------
Shares Amount Par Value Stage
----------------- ----------------- ------------------ ----------------------
Balance July 11, 2003 (Inception) - $ - $ - $ -
Shares issued to acquire product
rights 29,609,660 29,610 - -
Shares issued for cash 2,720,121 2,720 475,155 -
Shares issued for expenses 2,670,219 2,670 331,107 -
To record merger with Bio-Life
Laboratories Corporation 12,091,805 12,092 (59,632) -
Net Loss - - - (444,575)
----------------- ----------------- ------------------ ----------------------
-
Balance at June 30, 2004 47,091,805 $ 47,092 $ 746,630 $ (444,575)
================= ================= ================== ======================
The accompanying notes are an integral part of these financial statements.
F - 6
BIO-LIFE LABS, INC.
(Formerly TecScan International, Inc.)
STATEMENTS OF CASH FLOW
Deficit
Accumulated
For the Period Since
from July 11, 2003
July 11, 2003 Inception of
to Development
Cash Flows From Operating Activities: June 30, 2004 Stage
------------------ ------------------
Net income (loss) $ (444,575) $ (444,575)
Adjustments to reconcile net income (loss) to net cash
Provided by (Used in) operating activities:
Depreciation and amortization 6,064 6,064
Stock issued for services 333,777 333,777
Change in operating assets and liabilities:
(Increase) Decrease in other receivable (5,800) (5,800)
(Increase) Decrease in deposits (10,778) (10,778)
Increase (Decrease) in accounts payable 31,899 31,899
Increase (Decrease) in accrued expenses - -
------------------ ------------------
Net cash used in operating activities (89,413) (89,413)
------------------ ------------------
Cash Flows From Investing Activities:
Purchase of property and equipment (13,432) (13,432)
Purchase of product rights (250,000) (250,000)
------------------ ------------------
Net cash used in investing activities (263,432) (263,432)
------------------ ------------------
Cash Flows From Financing Activities:
Proceeds from sale of stock 477,875 477,875
------------------ ------------------
Net cash provided by (used in) financing activities 477,875 477,875
------------------ ------------------
Net increase (decrease) in cash and cash equivalents 125,030 125,030
Cash and cash equivalents at beginning of period - -
------------------ ------------------
Cash and cash equivalents at end of period $ 125,030 $ 125,030
================== ==================
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.
F - 7
BIO-LIFE LABS, INC.
(Formerly TecScan International, Inc.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2004
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.
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.
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.
F - 8
BIO-LIFE LABS, INC.
(Formerly TecScan International, Inc.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2004
(continued)
NOTE 1 - ORGANIZATION AND SUMMARY OF ACCOUNTING POLICIES (continued)
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 June 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.
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.
F - 9
BIO-LIFE LABS, INC.
(Formerly TecScan International, Inc.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2004
(continued)
NOTE 1 - ORGANIZATION AND SUMMARY OF ACCOUNTING POLICIES (Continued)
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 June 30,
2004:
Furniture and Fixtures $ 10,417
Computer Equipment 3,015
Less accumulated depreciation (239)
-----------------
Total $ 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 period from July 11, 2003 to June
30, 2004 was $239.
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.
Intangible Assets consisted of the following at June 30, 2004:
Intangible Asset Amortization Amortization Period
-------------------------------------------- ----------------- --------------------------
Product Rights $ 279,610 20 Years
Less accumulated amortization (5,825)
-----------------
Total $ 273,785
=================
F - 10
BIO-LIFE LABS, INC.
(Formerly TecScan International, Inc.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2004
(continued)
NOTE 1 - ORGANIZATION AND SUMMARY OF ACCOUNTING POLICIES (Continued)
Total amortization expense for the period from July 11, 2003 to June
30, 2004 was $5,825.
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.
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).
F - 11
BIO-LIFE LABS, INC.
(Formerly TecScan International, Inc.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2004
(continued)
NOTE 2 - CAPITAL TRANSACTIONS (continued)
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 $445,575 since the inception of the
development stage on July 11, 2003. For the period from July 11, 2003
(inception) to June 30, 2004, the Company incurred losses of $445,575. 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.
F - 12
BIO-LIFE LABS, INC.
(Formerly TecScan International, Inc.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2004
(continued)
NOTE 4 - LEASE COMMITMENTS (continued)
The minimum future lease payments under these leases for the next five
years are:
Year Ended June 30,
-------------------------------------------
2005 $ 18,614
2006 20,440
2007 21,038
2008 18,858
2009 -
--------------
Total minimum future lease payments $ 78,950
==============
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.
F - 13
BIO-LIFE LABS, INC.
(Formerly TecScan International, Inc.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2004
(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.
NOTE 9 - SUBSEQUENT EVENTS
In August 2004, the Company began leasing a facility to be used for
research and development. The lease is to commence August 1, 2004 and has a
lease term of ten years.
F - 14
ITEM 14. 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 annual report on Form 10- KSB, that the Company's disclosure
controls and procedures have functioned effectively so as to provide those
officers the information necessary whether:
(i) this annual report on Form 10-KSB 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 annual
report on Form 10-KSB, and
17
(ii) the financial statements, and other financial information
included in this annual report on Form 10-KSB, 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 annual report on Form 10-KSB.
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 regards to significant
deficiencies and material weaknesses.
ITEM 15. PRINCIPAL ACCOUNTANT FEES & SERVICES
The following is a summary of the fees billed to us by Robison, Hill &
Company for professional services rendered for the years ended June 30, 2004 and
2003:
Service 2004 2003
------------------------------ ------------------ ------------------
Audit Fees $ 13,098 $ 13,351
Audit-Related Fees - -
Tax Fees 557 152
All Other Fees - -
------------------ ------------------
Total $ 13,655 $ 13,503
================== ==================
Audit Fees. Consists of fees billed for professional services rendered for the
audits of our consolidated financial statements, reviews of our interim
consolidated financial statements included in quarterly reports, services
performed in connection with filings with the Securities & Exchange Commission
and related comfort letters and other services that are normally provided by
Robison, Hill & Company in connection with statutory and regulatory filings or
engagements.
Tax Fees. Consists of fees billed for professional services for tax compliance,
tax advice and tax planning. These services include assistance regarding
federal, state and local tax compliance and consultation in connection with
various transactions and acquisitions.
Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of
Independent Auditors
The Audit Committee, is to pre-approve all audit and non-audit services
provided by the independent auditors. These services may include audit services,
audit-related services, tax services and other services as allowed by law or
regulation. Pre-approval is generally provided for up to one year and any
pre-approval is detailed as to the particular service or category of services
and is generally subject to a specifically approved amount. The independent
auditors and management are
18
required to periodically report to the Audit Committee regarding the extent of
services provided by the independent auditors in accordance with this
pre-approval and the fees incurred to date. The Audit Committee may also
pre-approve particular services on a case-by-case basis.
The Audit Committee pre-approved 100% of the Company's 2003 audit fees,
audit-related fees, tax fees, and all other fees to the extent the services
occurred after May 6, 2003, the effective date of the Securities and Exchange
Commission's final pre-approval rules.
19
SIGNATURES
Pursuant to the requirements of section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
BIO-LIFE LABS, INC.
Dated: October 14, 2004 By /S/ Nancy LeMay
------------------------------
Nancy LeMay
President, Secretary, Director
(Principal Executive Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been signed below by the following persons on behalf of
the Registrant and in the capacities indicated on this 14th day of October 2004.
Signatures Title
/S/ Nancy LeMay
Nancy LeMay President, Secretary, Director
(Principal Executive Officer)
/S/ Joseph McGhie
Joseph McGhie Chief Financial Officer, Director
(Principal Financial Officer)
/S/ David Karam
David Karam Director