Attached files
| file | filename |
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| EX-31.1 - BIOFIELD CORP \DE\ | v181232_ex31-1.htm |
| EX-32.2 - BIOFIELD CORP \DE\ | v181232_ex32-2.htm |
| EX-32.1 - BIOFIELD CORP \DE\ | v181232_ex32-1.htm |
| EX-31.2 - BIOFIELD CORP \DE\ | v181232_ex31-2.htm |
UNITED STATES SECURITIES AND EXCHANGE
COMMISSION
WASHINGTON, D.C.
20549
FORM
10-K
(Mark One)
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þ
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ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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For
the Fiscal Year Ended December 31, 2009
OR
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o
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TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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For
the transition period from ________ to ________
Commission file number
000-27848
BIOFIELD
CORP.
(Exact
name of registrant as specified in its charter)
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Delaware
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13-3703450
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|
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(State of
Incorporation)
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(IRS
Employer Identification No.)
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175
Strafford Avenue, Suite 1, Wayne, PA
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19087
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(Address
of principal executive offices)
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(Zip
Code)
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(215) 972-1717
(Registrant’s
telephone number, including area code)
Securities
registered pursuant to Section 12(b) of the Act: none
Securities
registered pursuant to Section 12(g) of the Act:
Common
Stock, $.001 par value
(Title of
Class)
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act. Yes o No þ
Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(a) of the Act. Yes o No þ
Indicate
by check mark whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 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 þ No o
Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T during the
preceding 12 months (or for such shorter period that the registrant was
required to submit and post such files). Yes o No o
Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not 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-K or any amendment to
this Form 10-K. o
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check
one):
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Large
Accelerated Filer o
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Accelerated
Filer o
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Non-Accelerated
Filer o
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Smaller
Reporting Company þ
|
Indicate
by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Act). Yes o No þ
The
aggregate market value of the voting and non-voting common equity held by
non-affiliates of the registrant, based on the average closing price of the
registrant’s common stock on December 31, 2009 was approximately
$1,622,348, based on a closing price ($0.04), as reported by the Pink Sheet
Electronic OTC Markets.
The
number of outstanding shares of the registrant’s common stock on March 31, 2010
was 40,558,699 shares of Common Stock and 12,300,000 shares of Series A
Preferred Stock.
PART
I
ITEM
1. BUSINESS.
Biofield
Corp. is a development-stage medical technology company which has developed an
advanced medical device and associated diagnostic system (the Biofield
Diagnostic System or “BDS”) to assist in detecting breast cancer, has secured
exclusive marketing rights to products for treatment of oral and genital herpes
and a diagnostic test for cervical cancer, and seeks to secure marketing rights
for other complimentary products.
In March
of 2006, MacKay Group Limited (“MKG”) acquired control of the
Company. Prior to the date MKG acquired control of the Company, the
Company was focused on securing approval of the BDS from the U.S. Food and Drug
Administration (“U.S. FDA”). These efforts were unsuccessful and led
to MKG’s acquisition of control of the Company. Under MKG, the
Company has focused on developing markets outside the United States with
significant populations of women, where MKG has significant industry and
government relationships, where the need for the BDS appears compelling, and
where the regulatory hurdles are not as burdensome. These markets
include China (including Hong Kong and Macau), India, the Philippines,
Indonesia, Malaysia, and other parts of Asia. The Company also
intends to develop markets in Mexico, Latin America, the Caribbean, Africa,
Europe, and the Middle East. As the Company’s resources permit, the
Company will seek U.S. FDA approval of the BDS. The Company believes its
strategy of developing foreign markets will provide additional clinical data and
research and development (including as it may pertain to screening and other
cancers) which will facilitate its efforts to secure U.S. FDA
approval.
In 2008,
the Company recommitted its efforts to secure CE mark certification for BDS,
recruited a new management team, opened an office in Hong Kong, in conjunction
with the Company’s controlling stockholder, MKG, opened a sales office in
Bangalore, India, moved its US offices from King of Prussia, Pennsylvania to
Philadelphia, Pennsylvania, and embarked on a strategy to assemble a portfolio
of
medical technology products that can be distributed using the same sales
channels the Company intends to use to market the BDS.
In
furtherance of its strategy to develop revenue while pursuing the CE mark for
BDS, the Company obtained exclusive, worldwide distribution rights from NeuroMed
Devices, Inc. for NeuroMed’s OraCalm device, for oral herpes, and Vira Calm
device, for genital herpes. In early 2009, the Company obtained
exclusive, worldwide distribution rights (excluding Belgium) from Valibio, SA
for ValiRx plc’s Human Papilloma Virus (HPV) diagnostic test for cervical
cancer, ValioRx’s Hypergenomics™ and Nucleosomics™ cancer diagnostics products,
and any other cancer diagnostic products developed during the term of the
Distribution Agreement The Company
expects to begin marketing the OraCalm device, for oral herpes, via direct web
based/internet marketing, retail, wholesale and through physicians and hospitals
in 2009.
In 2007,
the Company moved its facilities, inventory and operations from Alpharetta,
Georgia to King of Prussia, Pennsylvania and transferred and reorganized
voluminous amounts of clinical and technological data and financial records,
resumed filing annual and quarterly reports with the Securities and Exchange
Commission (“SEC”) and brought all of its filings current, converted
approximately $2 million of the Company’s debt to equity stock, and began a
number of foreign market initiatives which are discussed in Item 6 of the
Company’s Form 10-KSB for fiscal year ending December 31, 2007 filed April 15,
2008.
Most of
2006 was consumed in connection with the series of transactions which resulted
in acquiring control of the Company. Unless indicated otherwise
below, any material events in 2006 related to events, which predated 2006 and
the MKG acquisition, and which were reported in detail in the Company’s prior
SEC’s filings including its Form 10-KSB for fiscal year ending December 31, 2005
filed May 30, 2006.
The
BDS Technology
Based on
clinical trial results to date involving over 3,000 patients, the BDS has
demonstrated the following benefits:
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It
is noninvasive;
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It
is radiation-free;
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It
is compression-free;
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It
produces objective results within 20 minutes without the need for
interpretation by a radiologist;
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The
device is portable and can be transported via mobile van
units;
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The
BDS test can be performed in a physician’s office or other similar
location by a medical technician with a few days
training;
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·
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It
has performed better in certain respects than other existing breast cancer
detection technologies. Clinical trials to date have demonstrated
advantages of the BDS in (1) detecting more malignant tumors, especially
smaller cancers missed by other detection technologies; (2) reducing the
number of equivocal decisions; (3) reducing the number of false positives;
and (4) reducing the number of certain expensive follow-up diagnostic
tests, such as surgical biopsies, ultrasounds and diagnostic mammograms;
and
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·
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The
estimated cost of the BDS is expected to be significantly less than the
cost of purchasing, installing, operating and interpreting the results
from diagnostic x-ray mammography or other diagnostic imaging
equipment.
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At a
simplistic level, the BDS detects and analyzes electrical potential cell changes
associated with the development of epithelial cancers, such as breast cancer,
using a non-invasive and objective test taking less than 20 minutes, which helps
a physician determine the probability that a previously identified lesion is
malignant or benign and whether the lesion should be removed by biopsy or
whether other action should be taken. Epithelial cancers are related
to the outside layer of cells that cover all the free, open surfaces of the body
including the skin, and mucous membranes that communicate with the outside of
the body, and include cancer of the breast, ovaries, skin, prostate and
colon.
Epithelial
cancers are characterized by small changes in the electrical charge of the
affected tissue. These changes, when they occur, result in a
depolarization of the charge distribution found in normal epithelial tissue
which lines many solid organs, including the stomach, colon, prostate,
endometrium, lung and breast. This depolarization appears to be
progressive as cell transformation and carcinogensis occur, and is measurable at
the skin surface.
The BDS
employs single-use sensors of our own design, which are arranged on the skin
surface in and around the quadrant of the breast where a suspicious lesion has
been identified and in corresponding locations on the asymptomatic
breast. Sensor readings are taken and analyzed using a pre-programmed
algorithm to measure differentials which may exist between test points. The
higher the BDS' output, the greater the probability that the patient has cancer
in the area examined. The physician can use this information, together with
other available clinical information, to determine the appropriate course of
action.
The
current version of the BDS is intended to be used as an adjunct to physical
examination or relevant imaging modalities to provide physicians and patients
with immediate and objective information about the probability that a previously
identified lesion is malignant or benign, without regard to the size, weight or
volume of the lesion. The device currently is intended for palpable
breast lesions in women under 55 years of age. We believe that the
BDS, together with other available clinical information, could reduce diagnostic
uncertainty and decrease the number of diagnostic procedures, including surgical
biopsies, performed on suspicious breast lesions. In clinical studies, the BDS
performed statistically better in the clinically difficult subgroup of women 55
years of age and younger, for whom certain diagnostic imaging modalities, such
as mammography and ultrasound, are generally considered less
effective.
We
previously conducted clinical trials involving leading medical institutions and
breast cancer specialists and over 3,000 participants in the United States,
Europe and Asia. The participants were women with suspicious breast
lesions, detected either by x-ray mammography screening or a physical
examination (self or by physician). Women who participated in our
clinical trials had undergone diagnostic work-ups, which often included a series
of tests, before proceeding to biopsy. In each of our studies, the
results obtained were then compared to the biopsy results. Based on our clinical
studies to date, and although our device cannot determine the presence of breast
cancer in all cases, we believe that our device, together with other available
information, could reduce diagnostic uncertainty and decrease the number of
diagnostic procedures, including surgical biopsies performed on suspicious
lesions.
Based on
our clinical experience with the BDS for testing women that have symptoms of
breast cancer (often referred to as symptomatic women) and our belief
that the electrophysiological characteristics of cancer are similar for both
lesions that can be felt in a physical examination (palpable) and
those lesions that cannot be felt in a physical
examination (non-palpable), we believe that our technology should be
adaptable for breast cancer screening in women who have not demonstrated any
symptoms of breast cancer (often referred to as asymptomatic
women). Based on this belief, current management is working with
leading experts, institutions, and/or agencies in China and other parts of Asia
and the U.S. on the development, including the possibility of joint U.S.-Asian
clinical trials, of a prototype design of an enhanced version of our device,
which may be of use as a screening system. The enhanced version of
our device would contain additional data channels to allow for more sensors to
surround the breast or other area where a lesion is present and an algorithm to
better analyze the data received. Current management is also working
on developing new sensors and sensor configuration for the proposed screening
device.
We
believe that the need exists for products to provide early and accurate
detection of types of epithelial cancers other than breast
cancer. Our previous preclinical research had been designed to obtain
additional scientific knowledge of the fundamentals underlying our core
technology and to identify new applications based on our technology for the
detection of other cancers, including cancer of the ovaries, skin, prostate and
colon. Current management is proceeding to work with leading experts,
institutions, and/or agencies in China and other parts of Asia and the U.S. on
the development, including joint clinical trials, of the BDS for cancers other
than breast cancer.
For more
information the BDS and its history, development, clinical trials, and
limitations, see the Company’s prior SEC filings, published studies, and
website, including the more detailed discussion on the BDS in the Company’s Form
10-KSB for the year
ended December 31, 2005 filed May 30, 2006.
The
State of Breast Cancer Globally
The
description about breast cancer and current detection technologies contained in
the Company’s Form 10-KSB for the year ended December 31, 2005 filed May 30,
2006, has not changed materially. As reported in, among other
publications, the October 15, 2007 edition of Time Magazine, breast cancer is
the most common and lethal form of cancer for women in the
world. According to the World Health Organization, more than 1.2
million cases are identified worldwide each year, and about 500,000 new and
existing patients will die from the disease. In the U.S., breast cancer will be
diagnosed in 1 in 8 women. A woman’s chance of developing breast
cancer during her lifetime is about 1 out of 7 or 13.4
percent. According to studies, the chance that breast cancer will be
the cause for a woman’s death is 1 in 33 or three percent.
Once
considered a malady, which was perceived to have mostly afflicted white,
affluent women in the industrialized hubs of North America and Western Europe,
today breast cancer is spreading around the world. Asia, Africa, Eastern Europe,
and Latin America have all seen their caseload spike. By 2020, 70% of
all breast cancer cases worldwide will be in developing countries. As reported
in the Time article, below are the incidence rate in 2002 of breast cancer cases
per 100,000 people in countries other than the U.S. and Western
Europe:
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Country
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Incidence Rate per 100,000 people1
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Total Population
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China
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18.7
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1,321,222,000 | |||||
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India
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19.1
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1,169,016,000 | |||||
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Indonesia
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26.1
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231,627,000 | |||||
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Mexico
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26.4
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106,535,000 | |||||
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The
Philippines
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46.6
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88,706,300 | |||||
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Japan
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32.7
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127,750,000 | |||||
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South
Africa
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35.0
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48,577,000 | |||||
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Malaysia
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30.8
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27,329,000 | |||||
1Source:
Time Magazine, October 15, 2007, Special Report-Global Breast Cancer, A Disease
Breaks Free, pp. 38-39, (citing International Agency for Research on Cancer,
Danish Cancer Society, National Cancer Institute, and other
sources).
However,
as the reach of the disease is expanding, the reach of detection and treatment
is not. For a women battling breast cancer in the industrialized
West, new diagnosis and treatment options are more available, accessible, and
affordable. This is not so elsewhere. In the U.S., an
estimated $8.1 billion is spent to diagnose and treat breast cancer each year,
and the ubiquity of mammography machines, clinics and specialists show what that
money can buy. Other parts of the world are not as
fortunate.
Sources
suggest several factors why women outside the U.S. and Western Europe are not
benefiting from early detection. Some women in other parts of the
world just do not know much about breast cancer, much less options such as
mammography. If they know, there are cultural perceptions about
motherhood or femininity in certain parts of the world, which discourage women
to seek medical help. The specter of surgical biopsies or other
invasive or painful modalities and the likelihood of false positives are other
factors which may discourage women from seeking medical help. Of course, money
is a problem as is availability and accessibility to facilities with mammography
or other detection modalities. Mammography and other current
detection modalities are expensive to purchase, operate, and
interpret. In certain instances, they require specialized facilities
and personnel. In many areas, mammograms are limited to major medical
centers, many of which are simply not available or accessible to women outside
the United States and Western Europe. Whatever the factors, the
unfortunate consequence is that the percentage of cancers caught at an early
stage in certain countries overseas is too low. Thus, early awareness
and detection are even more compelling in areas of the world outside North
America and Western Europe.
The
Company under MKG is working with government representatives in China, the
Philippines, and elsewhere to adopt broad-based early awareness and detection
initiatives and campaigns to develop demand for the Company’s BDS and other
products.
Recent
studies have also raised concerns about the effectiveness in certain
circumstances of mammography, which ever since the 1980s has long been
considered the gold standard for detecting breast tumors. A 2007 study in the
New England Journal of Medicine (NEJM) concluded that a highly promoted and
widely used computerized system for examining mammograms is leading to less
accuracy, not more. According to the study, this type of mammography
not only failed to detect more cancers, it led to more false alarms that
resulted in additional testing and biopsies for spots on mammograms that turned
out to be harmless. See April 5, 2007 New York Times article, “Study
to Detect Breast Cancer,” The NEJM study sparked heated debates about options in
addition to mammography. Much of the debate centered about magnetic
resonance imaging (MRI). While MRIs can produce a more detailed
picture of breast tissue, they are expensive and tend to produce more false
positives than mammograms. The New York Times article reported that MRIs would
cost healthcare insurers and providers an additional $1 billion per
year.
For more
information, see the Company’s prior SEC filings, published studies, and
website, including the more detailed discussion on breast cancer and current
detection modalities in the Company’s Form 10-KSB for the year ended December
31, 2005 filed May 30, 2006.
Company
History
The
March 30, 2006 MKG Acquisition
On March
30, 2006, MKG acquired a controlling interest in the Company as a result
of a series of agreements detailed in and attached to the Company’s April 6,
2006 Form 8-K.
In
connection with MKG’s acquisition of control of the Company, all of the
Company’s prior royalty, distribution, employment, research and development, and
consulting agreements were terminated and directors John Stephens and Dr.
Raymond Long , resigned from
the Board of Directors and James
MacKay and Michael Yom were elected to the Board. MacKay became
chairman and Yom president. Dr. David Long remained a board member
until his death in April 2006.
The
Debt Conversion
In
connection with MKG acquisition of a controlling interest in the Company, MKG
acquired approximately $2 million of the Company’s indebtedness. On
January 17, 2008, the Company issued 9,994,550 shares of common stock and
12,300,000 shares of Series A Preferred Stock to complete the debt conversion
contemplated by the agreements detailed in and attached to the Company’s April
6, 2006 Form 8-K. Each share of Series A Preferred Stock entitles the
holder thereto to two (2) votes. The debt conversion occurred as
follows:
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Amount of
Converted Debt
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Shares of Capital Stock Issued upon the Conversion
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Conversion Price
per Share
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|||||
| $ | 499,727.50 |
9,994,550
shares of common stock, par value $0.001/share
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$ |
0.05/share
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| $ | 1,230,000.00 |
12,300,000
shares of Series A Preferred Stock, par value $0.001/share
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$ |
0.10/share
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As a
result of the issuance of common stock and voting preferred stock pursuant to
the debt conversion, the transfer of stock by LFCG to MKG pursuant to the Long
Agreement, and MKG’s assignment to Mr. MacKay (including 5,898,495 shares), Mr.
MacKay became the holder of shares of the Company's capital stock entitling him
to approximately 51.96% of all of the votes entitled to be cast by stockholders
of the Company on a fully-diluted basis For more
details on the terms of the Series A Preferred Stock, see the Company’s Form 8-K
filed January 23, 2008.
Government
Regulation
Unless
indicated otherwise below, there were no material events or developments in 2009
related to government regulation, manufacturing, marketing and sales, patents
and proprietary information, licenses and other agreements, research &
development, competition, employees, and risk factors from the sections relating
to those subjects in the Company prior SEC’s filings including its Amended Form
10-K for fiscal year ending December 31, 2008 filed February 01,
2010.
The
Company has refocused its energies to distributing the BDS in foreign markets.
The Company plans to reinitiate efforts to obtain U.S. FDA approval of
the BDS when sufficient resources are available. The Company believes that the
government and industry relationships, the possible significant clinical data
and research and development, and revenues it secures abroad will advance
efforts to secure U.S. FDA approval.
With its
new management team, the Company also resumed work to obtain CE mark
certification for the BDS.
Manufacturing
Under
prior management, the BDS device and sensors were manufactured in the
U.S. The company which prior management engaged to design the
prototype of the BDS device has manufacturing facilities in Ireland. In addition
to these options, the Company under MKG is working with technical,
manufacturing, and regulatory experts to manufacture the new prototype device
and the sensors overseas, including China and Mexico. The Company is
also considering other FDA-certified manufacturing facilities in the U.S., which
manufacture similar non-invasive technology.
Licenses
and Other Agreements
As of
March 30, 2006, the date of the MKG Acquisition, all licensing, royalty,
distribution, and employment agreements had been terminated or were
terminated. This was a condition precedent to the MKG
Acquisition. Under the Long Agreement, MKG agreed to give the Longs a
royalty equal to 1% of the Company’s net sales worldwide for three years
commencing as of March 31, 2006. MKG also entered into a three-year,
$60,000 per year consulting agreement with Dr. David Long or his
nominee.
Marketing
and Sales
In
furtherance of its strategy to develop revenue while pursuing the CE mark for
BDS, the Company obtained exclusive, worldwide distribution rights from NeuroMed
Devices, Inc. for NeuroMed’s OraCalm device, for oral herpes, and Vira Calm
device, for genital herpes. The Company has also obtained exclusive,
worldwide distribution rights (excluding Belgium) from Valibio, SA for ValiRx
plc’s Human Papilloma Virus (HPV) diagnostic test for cervical cancer, ValioRx’s
Hypergenomics™ and Nucleosomics™ cancer diagnostics products, and any other
cancer diagnostic products developed during the term of the Distribution
Agreement.
Employees
David
Bruce Hong serves as our sole employee and is our Chief Executive Officer and
Chief Financial Officer.
ITEM
1A. RISK FACTORS
We Expect to Continue to
Incur Significant Operating Losses Which Endangers our Viability as a
Going-Concern
The
Company has never established adequate sources of operating revenue and had
incurred net operating losses since our inception. At December 31,
2009, we had an accumulated deficit of approximately $86.1
million. These losses have resulted principally from costs incurred
in research and development and clinical trials and from general and
administrative costs associated with our operations. We expect operating losses
to continue, mainly due to the anticipated expenses associated with the
pre-market approval process and proposed commercialization of our device,
research and development and marketing activities and administration
costs. Our continuing losses have caused our independent accountants
to qualify their audit report regarding our use of "going concern" basis of
accounting in preparation of our 2009 consolidated financial
statements. Although the Company, under MKG, is now focused on
distributing the BDS and complementary products overseas relying on MKG’s
foreign government, industry, and distribution relationships, there can be no
reasonable assurances, however, that such efforts will be to establish
predictable and scalable sources of revenue.
Our Cash Flow Problems Have
Caused Us to be Delinquent in Payments to Vendors and Other
Creditors
Since
1998, our lack of financial resources has caused us to delay payment of our
obligations as they became due in the ordinary course of our
business. Such delays have damaged some of our vendor and
professional relationships, and have caused us to incur additional expenses in
the payment of late charges and penalties. As of December 31, 2009,
we had a working capital deficiency of approximately $9.4 million and accounts
payable, primarily to service providers and vendors, aggregating approximately
$1.4 million, substantially all of which are past due. These amounts have
increased since December 31, 2008.
We Will Require Significant
Additional Capital to Continue Operations Which May Not be
Available
Our
continued losses and operational plan require us to secure substantial equity
financing to continue in business. As a result of our weak financial
position, lack of operating history, and inherent risk, the cost of obtaining
new finance will continue to be very high, and if arrangements involve issuance
of shares, the future dilution could be significant. There can be no
reasonable assurances that equity financing, if available, can be obtained when
needed or on terms favorable to the Company or the existing holders of our
equity securities.
We Have a Limited Operating
History
We have
had a limited history of operations. Since inception in October 1987,
we have engaged principally in the development of our device, which has not been
approved for sale in the United States, and recently in securing distribution
rights for complimentary products. Consequently, we have little
experience in manufacturing, marketing and selling our products and no
meaningful history upon which you can evaluate the likelihood of our ultimate
success. There can be no reasonable assurances, the Company will be
successful.
We May Not Be Able to Obtain
Government Regulatory Approval to Market and Sell Our
Products
Regulation
by governmental authorities in the United States will be a significant factor in
the manufacture and marketing of our products, as well as our research and
development activities. All of our proposed products will require
regulatory approval by governmental agencies before commercialization and our
products must undergo rigorous pre-clinical and clinical testing and other
pre-market approval procedures prescribed by the FDA. Various federal and, in
some cases, state statutes and regulations also govern or influence the
manufacturing, safety, labeling, storage, record keeping and marketing of
medical devices. The lengthy process of seeking these approvals, and
the subsequent compliance with applicable statutes and regulations, will require
us to expend substantial resources. If we fail to obtain or are
otherwise substantially delayed in obtaining regulatory approvals, our business
and operations could be significantly and adversely affected. The
regulation of medical devices, particularly in Europe, continues to develop and
we cannot assure that, as new laws and regulations are adopted, these actions
will not have an adverse effect on us.
We May Never be Able to
Bring Our Device to Market or Sustain Its Sales After Regulatory
Approval
Our
device faces a high degree of uncertainty, including the following:
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We
may not be able to obtain United States regulatory approval. Obtaining
regulatory approval may take significantly more time and cost
significantly more money than anticipated. Lack of United
States regulatory approval has significantly affected our ability to sell
our device outside of the United States.
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We
may not be able to produce our device in commercial quantities at
reasonable cost.
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We
may not be able to successfully market our device or find an appropriate
corporate partner, if necessary, to assist us in the marketing of our
device. Our device may not gain satisfactory market acceptance. Our device
may be superseded by another product commercialized for the same use or
may infringe patents issued to others, which would prevent us from
marketing and selling our device.
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·
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After
approval, our device may be recalled or withdrawn at any time as a result
of regulatory issues, including those concerning safety and
efficacy.
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If we are
unable to successfully market our device or sustain its sales, our business,
financial condition and results of operations will be significantly and
adversely affected.
We are Currently Dependent
on a Single Product Which Has Not Yet Been Commercialized
We intend
to develop additional applications for our device, based on its core technology,
none of these applications is expected to result in a commercial product for at
least several years, if at all. Consequently, until such time, if at
all, as our device is approved for commercial distribution in the United States,
limited distribution of our device overseas will account for substantially all
of our revenues, if any. The Company, under MKG, is proceeding to
distribute the BDS overseas and is working with foreign government, medical, and
other experts to develop the BDS for additional applications such as screening
and diagnosis of other cancers. Moreover, the Company, under MKG, is
working to acquire the rights to other medical technologies. There
can be no reasonable assurances that such efforts will be
successful.
Our Contract Manufacturers
May be Unable to Produce Commercial Quantities of Our
Products
Our
current contract manufacturer for our device has not yet completed the redesign
of a new version of our device due to our delay in payment for its redesign
services and has not yet manufactured our device. We cannot assure you that it
will complete its redesign services or be able to manufacture in volume, when,
or if, the need may arise. If this situation occurs, our business could be
significantly and adversely affected. Given the interest generated
overseas, the Company, under MKG, is considering many options with regard to
manufacture, both in the U.S. and overseas, including China, India, and
Mexico. There can be no reasonable assurances that such efforts will
be successful.
If Our Single Source
Suppliers are Unable to Deliver, Our Business Would Suffer
For
certain services and components, we currently rely on single suppliers. If we
encounter delays or difficulties with our third-party suppliers in producing,
packaging or distributing our device and its components, market introduction and
subsequent sales would be significantly adversely affected. If we are required
to rely on alternative sources of supply, we cannot assure you that we will be
able to enter into alternative supply arrangements at commercially acceptable
rates, if at all. If we are unable to obtain or retain qualified suppliers and
contract manufacturers on commercially acceptable terms, we will not be able to
commercialize our device as planned. Our dependence upon third
parties for the manufacture and supply of our device and components may
significantly and adversely affect our ability to attain profitability and our
ability to manufacture and deliver our device on a timely and competitive
basis.
We May Not be Able to Apply
Our Technology to Other Uses and Products
We cannot
assure you that our technology will be approved and accepted for breast cancer
screening or for the detection of other cancers. Furthermore, we also
cannot assure you, even if we can develop any new products or uses for our
current device that such products or uses would be approved by the FDA or by any
comparable foreign regulatory bodies, or would be commercially
viable.
Our Device Will Be Subject
to Continuing Review by the FDA Which Could Impact On Our Ability to Sell It in
the Future
Any
changes to our device or the manner in which it is used after it is approved
will require additional approval by the FDA. Our failure to receive approval of
such a change on a timely basis, or at all, would have a significant adverse
effect on our business.
A Failure
of Our Contract Manufacturers to Comply with FDA Regulations Would Impact on Our
Ability to Sell Our Device
We cannot
assure that our manufacturers will be in compliance with the FDA's quality
system regulations and good manufacturing practices, when the FDA inspects them,
or that they will continue to maintain this compliance. A failure to maintain
compliance could significantly delay approval of our pre-market application to
the FDA for our device or prevent us from marketing it if we obtain this
approval, and would have a significant adverse effect on our
business.
If Foreign Regulatory
Approvals are Withdrawn, Our Business Will Suffer
We cannot
assure you that the foreign regulatory approvals that we have received, which
allow us to sell the prior version of our device in certain foreign countries,
will not be withdrawn or that our redesigned device, when completed, will
receive regulatory approval. Our failure to continue to maintain these approvals
or to obtain any additional foreign approvals could have a significant adverse
effect on our business.
Changes to Health Care
Reimbursement Regulations and Practices Could Adversely Affect
Us
Our
ability to successfully commercialize our products will depend, in part, on the
extent to which reimbursement for the cost of our products and related treatment
will be available from government health administration authorities, private
health insurers and other organizations. These third-party payers are
increasingly challenging the price of medical products and
services.
Several
proposals have been made that may lead to a government-directed national health
care system. Adoption of this type of system could further limit
reimbursement for medical products, and we cannot assure you that adequate
third-party coverage will be available to enable us to establish, and then
maintain, price levels sufficient to generate reasonable profit. In addition, we
also cannot assure you that the U.S. government or foreign governments will not
implement a system of price controls. Any change in the existing
system might significantly affect our ability to market our products
profitably.
Health Care Insurers May Not
Reimburse for the Use of Our Products
Governmental
health authorities, private health insurers and other organizations may not
approve the cost for the use of our device as an authorized medical expenditure
under their programs, which would severely restrict the marketability of our
device.
Certain Foreign Governments
May Not Give Reimbursement Code for Our Device
Government
health authorities, especially in the countries where most of the reimbursements
flow through government agencies, may not provide us with a reimbursement code,
which is required for claiming the cost for the use of our device from
government agencies. If we are unable to obtain such reimbursement
codes in major markets, marketability of our device may be severely
restricted.
We Expect to Encounter
Difficulty in Hiring Required Personnel and the Loss of any Key Personnel Could
Adversely Affect our Operations
As a
small medical technology company, we are heavily dependent upon the talents of
key personnel. Due to lack of funding, we are unable to pay current
salaries, and thus retention of employees is a difficult. We use
services of some of the ex-employees as consultants when we have the cash and if
they are available to perform the required services. Competition for
qualified personnel in the medical device and biotechnology industries is
intense and we do not know if we will be successful in our recruitment
efforts. If we are unable to attract, and then retain, qualified
personnel, our operations will be significantly adversely affected.
Our Results of Operations
May Suffer if Foreign Trade is Restricted or Foreign Regulations are
Modified
Until we
receive approval from the FDA to market our device in the United States, our
revenues, if any, will be derived from international sales. A significant
portion of our revenues, therefore, may be subject to the risks associated with
international sales, including foreign regulatory requirements, economic or
political instability, shipping delays, fluctuations in foreign currency
exchange rates and various trade restrictions, all of which could have a
significant impact on our ability to deliver products on a competitive and
timely basis and our ability to achieve profitable operations. Future
impositions of, or significant increases in the level of, customs duties, export
quotas or other trade restrictions could have a significant adverse effect on
our business.
We Face
Substantial Competition in the Medical Technology Field and May Not be Able to
Successfully Compete
The
medical technology industry is highly competitive, particularly in the area of
cancer screening and diagnostic products. We are likely to encounter significant
competition with respect to our device, as well as any other products that we
may develop. A number of companies are engaged in the same field as
us, and many of these companies have significantly greater financial, technical
and marketing resources than us. In addition, many of these companies may have
more established positions in the industry and may be better equipped than us to
develop, refine and market their products. Our inability to
successfully compete in the industry would have a significant adverse effect on
our business.
Our Device May be Rendered
Obsolete by Rapid Technological Changes
Methods
for the detection of cancer are subject to rapid technological innovation and we
cannot assure you that technological changes will not render our device
obsolete. Likewise, we cannot assure you that the development of new
types of diagnostic medical equipment or technology will not have a significant
adverse effect on the marketability of our device. Commercial
availability of any new product could render our device obsolete, which would
have a significant adverse effect on our business.
Product Liability Claims in
Excess of the Amount of Our Insurance Could Significantly Affect Our Financial
Condition
Our
business exposes us to potential product liability risks, which are inherent in
the testing, manufacturing and marketing of cancer detection products.
Significant litigation, none of which has involved us, has occurred in the past
based on allegations of false negative diagnoses of cancer. While our
device does not purport to diagnose any patient, we cannot assure you that we
will not be subjected to future claims and potential liability. We cannot assure
you that claims against us arising with respect to our device will be
successfully defended or that any insurance which we then carry will be
sufficient to cover liabilities arising from these claims. A
successful claim against us in excess of any insurance coverage, which we may
have, would, in most instances, deplete our assets and have a significant
adverse effect on our business. Furthermore, we cannot assure that we
will be able to obtain or maintain liability insurance on acceptable
terms.
Our Contract Manufacturers
Use Potentially Hazardous Materials, the Replacement of Which Could Affect Our
Costs
Although
we do not manufacture any of our products, we understand that various cleaning
solvents, used in connection with the contract manufacture of our products, may
contain potentially hazardous materials. As a result, our contract
manufacturers, in the future, could become subject to stringent federal, state
and local laws, rules, regulations and policies governing the use, generation,
manufacture, storage, air emission, effluent discharge, handling and disposal of
these materials. We cannot assure you that we will not incur
significant future price increases imposed by our contract manufacturers to
comply with environmental laws, rules, regulations and policies, or that our
business will not be significantly and adversely affected by current or future
environmental laws, rules, regulations and policies or by any releases or
discharges of hazardous materials.
If We are Unable to Protect
Our Intellectual Property Rights, We Could Lose Our Competitive
Advantage
Our
commercial success will be dependent upon proprietary rights that we own or
license. We cannot assure you that any of our patents will not be
invalidated or that our patents will provide us protection that has commercial
significance. Litigation may be necessary to protect our patent positions, which
could be costly and time consuming. If any of our key patents that we
own or license is invalidated, our business may be significantly adversely
affected. In addition, other companies may have trade secrets or may
independently develop know-how or obtain access to our trade secrets, know-how
or proprietary technology, which could significantly and adversely affect our
business.
We Do Not Have the Financial
Resources to Enforce and Defend All of Our Intellectual Property
Rights
The
actions, which we may take to protect our intellectual property, may not be
adequate to deter misappropriation of this property. We currently do not have
adequate financial resources required to enforce, through litigation, our
intellectual property rights. In addition, litigation could result in
a substantial diversion of managerial time and resources, which could adversely
affect our business.
Our
Device May Infringe Third Party Intellectual Property Rights
Other
companies may have obtained other proprietary rights to technology that may be
potentially useful to us. It is possible that a third party could successfully
claim that our device or its components infringe on its intellectual property
rights. If this were to occur, we may be subject to substantial
damages, and we may not be able to obtain appropriate licenses at a cost that we
could afford and we may not have the ability to timely redesign our device. If
we are required to pay material damages or are unable to obtain these rights or
are unable to successfully redesign our device at a reasonable cost, our
business could be significantly and adversely affected.
Our Stock Price has Been
Volatile
The price
of our common stock has fluctuated substantially since our initial public
offering in 1996. The market price for our common stock, like that of
the common stock of many other medical device companies, is likely to continue
to be highly volatile.
Our Principal Stockholder
Can Control Most Matters Requiring Approval by Our
Stockholders
MKG owns
a majority of the outstanding voting securities and can determine the election
of our directors, and as a result, our policies and the outcome of all important
matters that are subject to the vote of our stockholders. This
concentration of ownership, among other things, also may increase our difficulty
in raising necessary financing.
We Lack Independent
Directors
We cannot
assure you that our Board of Directors will have any independent
directors In the absence of a majority of independent
directors, our Board of Directors could establish policies and enter into
transactions without independent review. This presents the potential
for a conflict of interest between MKG, management, and our stockholders, and
may increase our difficulty in raising necessary financing. In
addition, we cannot establish an audit committee or compensation committee
without independent directors, which could prohibit us from listing our shares
of common stock for trading on a recognized national securities exchange or on
any electronic exchange regulated by NASDAQ. MKG, intends to
restructure the Company’s board of directors in the future to bring recruit
independent directors to preserve or prepare for future potential listing
opportunities. There can be no reasonable assurances that such
efforts will be successful.
We Have Issued 12,300,000
shares of Preferred
Stock
The
Company issued 12,300,000 shares of voting preferred stock of the Company to Mr.
MacKay to consummate the conversion of the Converted Debt. Each share
of voting preferred stock entitles the holder thereto to two (2) votes. For a
description of the Series A Preferred Stock, see the Company’s Form 8-K filed
January 23, 2008.
Our Stockholders Could be
Adversely Affected by the Anti-Takeover Effects of Delaware
Law
We are
subject to the provisions of Section 203 of the General Corporation Law of the
State of Delaware. In general, Section 203 prohibits a publicly held
Delaware corporation from engaging in a "business combination" with an
"interested stockholder" for a period of three years after the date of the
transaction in which the person becomes an interested stockholder, unless the
business combination is approved in a prescribed manner or unless the interested
stockholder acquires at least 85% of the corporation's voting stock (excluding
shares held by certain designated stockholders) in the transaction in which it
becomes an interested stockholder. A "business
combination" includes mergers, asset sales and other transactions resulting in a
financial benefit to the interested stockholder. Subject to certain
exceptions, an "interested stockholder" is a person who, together with
affiliates and associates, owns, or within the previous three years did own, 15%
or more of the corporation's voting stock. This provision of the
Delaware law could delay and make more difficult a business combination, even if
the business combination would be beneficial to the interests of our
stockholders, and also could limit the price certain investors might be willing
to pay for shares of our common stock.
We Do Not
Expect that We Will Pay Dividends
We have
never declared or paid any cash dividends on our capital stock and do not intend
to pay any cash dividends in the foreseeable future.
If We Fail to Remain Current
on Our Reporting Requirements, We Could be Removed from the OTC Bulletin Board,
We Could be Investigated by the SEC or We Could Incur Liability to Our
Shareholders.
Companies
trading on the OTC Bulletin Board, such as us, must be reporting issuers under
Section 12 of the Securities Exchange Act of 1934, as amended, and must be
current in their reports under Section 13, in order to maintain price quotation
privileges on the OTC Bulletin Board. If we fail to remain current on our
reporting requirements, we could be removed from the OTC Bulletin Board. As a
result, the market liquidity for our securities could be severely adversely
affected by limiting the ability of broker-dealers to sell our securities and
the ability of stockholders to sell their securities in the secondary market.
Failure to remain current in our reporting obligations might also subject us to
SEC investigation or private rights of action by our shareholders.
Our Common Stock is Subject
to the "Penny Stock" Rules of the SEC and the Trading Market in Our
Securiti es is
Limited, Which Makes Transactions in Our Stock Cumbersome and May Reduce the
Value of an Investment in Our Stock.
The
Securities and Exchange Commission has adopted Rule 15g-9 which establishes the
definition of a "penny stock," for the purposes relevant to us, as any equity
security that has a market price of less than $5.00 per share or with an
exercise price of less than $5.00 per share, subject to certain
exceptions. For any transaction involving a penny stock, unless
exempt, the rules require:
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·
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that
a broker or dealer approve a person's account for transactions in penny
stocks;
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·
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and
the broker or dealer receive from the investor a written agreement to the
transaction, setting forth the identity and quantity of the penny stock to
be purchased.
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In order
to approve a person's account for transactions in penny stocks, the broker or
dealer must:
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·
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obtain
financial information and investment experience
objectives of the person; and
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·
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make
a reasonable determination that the transactions in penny stocks are
suitable for that person and the person has
sufficient knowledge and experience in
financial matters to be capable of evaluating the risks of
transactions in penny stocks.
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The
broker or dealer must also deliver, prior to any transaction in a penny stock, a
disclosure schedule prescribed by the Commission relating to the penny stock
market, which, in highlight form:
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·
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sets forth the basis on which the broker or dealer made the
suitability determination; and
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that
the broker or dealer received a
signed, written agreement from the investor prior to
the transaction.
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Generally,
brokers may be less willing to execute transactions in securities subject to the
"penny stock" rules. This may make it more difficult for investors to
dispose of our common stock and cause a decline in the market value of our
stock.
Disclosure
also has to be made about the risks of investing in penny stocks in both public
offerings and in secondary trading and about the commissions payable to both the
broker-dealer and the registered representative, current quotations for the
securities and the rights and remedies available to an investor in cases of
fraud in penny stock transactions. Finally, monthly statements have
to be sent disclosing recent price information for the penny stock held in the
account and information on the limited market in penny stocks.
Stock Issued by the Company
is Subject to Rule 144 of the Securities Act of 1933
Stock
issued by the Company is subject to Rule 144 of the Securities Act of 1933 and
the restrictions therein.
In
addition to the above risk factors, see the risk factors set forth in the
Company’s Form 10-KSB for fiscal year ending December 31, 2007 filed April 15,
2008. These include risks associated with the political and economic
environment, foreign currency exchange and the legal system in foreign
countries. The economy of China and other foreign countries differs
significantly from the economies of the western industrialized nations in such
respects as structure, level of development, growth rate,
capital reinvestment, repatriation, resource allocation,
self-sufficiency, rate of inflation and balance of payment positions, among
others. While certain foreign governments such as China have enacted laws
encouraging foreign investment, it remains to be seen how uniformly they will be
enforced and interpreted.
As to
China, a major focus of the Company, under MKG, the Chinese economy has
experienced significant growth in the past several years, but such growth has
been uneven among various sectors of the economy and geographic
regions. Such development and growth may present risks to entities
operating in China. Because of the challenges created by such growth,
the Chinese government has indicated and taken certain steps to control such
growth and address such challenges. Actions by Chinese government to control
inflation, for example, have restrained economic expansion in the recent past
across several industrial sectors. Similar and continued actions by
the Chinese government in the future could have a significant adverse effect on
domestic economic condition in China. There can be no reasonable assurances that
there will not be any changes respecting Chinese government, economy, laws, and
regulation which may adversely affect the Company.
ITEM
2. PROPERTY.
As of
July, 2009, the Company moved its corporate headquarters to 175 Strafford
Avenue, Suite one, Wayne, PA 19087.
ITEM
3. LEGAL PROCEEDINGS.
We are
not a party to any other pending legal proceeding which is not routine
litigation incidental to our business or which involves a claim for damages
exceeding 10% of our current assets, nor are we aware of any current proceeding
concerning us that a governmental authority may be contemplating.
1) KOPBC,
LP v. BIOFIELD CORPORATION, COURT OF COMMON PLEAS FOR MONTGOMERY COUNTY, NO.
2008-11647
This
matter involved a Judgment in favor of KOPBC for certain rent. The
Judgment has been completely satisfied and an Order to Mark the Judgment
Satisfied was filed of Record on March 4, 2010.
2) KOPBC,
LP v. BIOFIELD CORPORATION, COURT OF COMMON PLEAS FOR PHILADELPHIA COUNTY, NO.
June Term, 2009, No. 00825
This
matter involves a Confession of Judgment in favor of KOPBC for certain
rent. The Judgment was filed on June 5, 2009. Based upon
case law, the Judgment was improper and KOPBC, LP has no viable claim against
Biofield. The Lease was terminated in such a manner as to entitle
KOPBC to back rent, but no further rent. The back rent was satisfied
as per 1), above. The Confessed Judgment in Philadelphia is not
viable because the Lease had terminated, thereby rendering the confession clause
a nullity and KOPBC no longer had any basis upon which to confess
judgment.
3) BIOFIELD
CORP. v. WILLIAM ROGER DUNAVANT, UNITED STATES DISTRICT COURT FOR THE EASTERN
DISTRICT OF PENNSYLVANIA, NO. 08-6044
This
matter was a Declaratory Judgment action regarding certain aspects of a
Consulting Contract given to Mr. Dunavant and an alleged breach of his fiduciary
duties to Biofield. Mr. Dunavant counterclaimed for certain monies
which he alleged were due to him. The parties mutually agreed to
resolve claims and the case was dismissed upon consent of the parties by Order
of Court of November 30, 2009, entered on December 1, 2009.
4) BIOFIELD
CORP. v. RICHARD BLUMBERG and MARK FAUPEL and GUIDED THERAPEUTICS, INC., UNITED
STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA, NO.
2009-6206
This
matter was instituted to address, inter alia, alleged tortious interference with
contract, breach of contract, conspiracy, breach of fiduciary duty, and
misrepresentation.
Biofield
has allowed this action to be dismissed as it has entered into good faith
negotiations to resolve the issues. Biofield may reinstitute suit if
the negotiations are not favorably resolved.
5) Warshaw
Burstein Cohen Schlesinger & Kuh, LLP v. Biofield Corp., Court of Common for
Philadelphia County, June Term, 2009, No. 02997
This
matter involves a foreign judgment entered against Biofield, without valid
service of process upon Biofield. The company is aware of the action
and is in the process of engaging defense counsel. It is Biofield's
position that absent service, the judgment is improper. Moreover,
Biofield asserts that if has good defenses to the claim.
ITEM
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
PART
II
ITEM
5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES.
MARKET
INFORMATION
Our
common stock, par value $.001 per share, was quoted on the Pink Sheets
Electronic Market, Inc. currently; our common stock is listed in the "Pink
Sheets" published by Financial Insight Systems, Inc.
The
following table sets forth the high and low per share daily closing sales prices
for our common stock as reported by the Pink Sheets Electronic Market, Inc for
the periods indicated.
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YEAR ENDING DECEMBER 31, 2009
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High
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Low
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||||||
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First
Quarter
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0.25 | 0.04 | ||||||
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Second
Quarter
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0.30 | 0.10 | ||||||
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Third
Quarter
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0.29 | 0.11 | ||||||
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Fourth
Quarter
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0.12 | 0.04 | ||||||
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YEAR
ENDING DECEMBER 31, 2008
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High
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Low
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||||||
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First
Quarter
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0.15 | 0.11 | ||||||
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Second
Quarter
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1.60 | 1.10 | ||||||
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Third
Quarter
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1.20 | 0.30 | ||||||
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Fourth
Quarter
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0.50 | 0.04 | ||||||
On March
15, 2010, the closing sale price for our common stock was $0.02 per share, as
reported by the Pink Sheets Electronic Market, Inc.
HOLDERS
As of
January 27, 2010, there were 124 holders of record of our common stock,
including Cede & Co., who held 40,558,699 shares for an undisclosed number
of beneficial holders.
DIVIDENDS
We have
not declared or paid any dividends since our inception, and do not intend to pay
any cash dividends in the foreseeable future, although we have not entered into
any agreement which restricts our ability to pay dividends. We
currently anticipate that we will retain all earnings, if any, for use in the
operation and expansion of our business.
TRANSACTIONS
INVOLVING UNREGISTERED SECURITIES
As
discussed in more detail in the above “debt conversion” section and in the
Company’s Form 8-K filed January 23, 2008 and the Form SC 13D filed January 28,
2008, in accordance with the Long Agreement on January 17, 2008, the Company
issued 9,994,550 shares of common stock and 12,300,000 shares of Series A
Preferred Stock of the Company to James MacKay to consummate the conversion of
the Converted Debt. Each share of voting preferred stock entitles the
holder thereto to two (2) votes.
Pursuant
to employment agreements with David Bruce Hong, Shepard G. Bentley, Steven M.
Waszak, and Shiva Sharareh, PhD, the Company has agreed to issue 250,000,
2,500,000, 2,000,000, and 2,000,000 shares of common stock,
respectively.
On March
4, 2009, The Company issued and sold 880,000 shares of common stock and issued
2,813,333 shares of common stock upon conversion of $422,000 of
debt.
REPURCHASES
OF SECURITIES
None.
ITEM
7. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATIONS.
The
following discussion and analysis should be read in conjunction with our
Financial Statements and Notes thereto appearing elsewhere in this
document.
Certain
statements contained in this "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and elsewhere in this report are
forward-looking statements that involve risks and
uncertainties. These statements relate to future events or our future
financial performance. In some cases, forward-looking statements can
be identified by terminology such as "may," "will",
"should", "expect", "anticipate", "intend", "plan", "believe",
"estimate", "potential", or "continue", the negative of these terms or other
comparable terminology. These statements involve a number of
risks and uncertainties. Actual events or results may differ
materially from any forward-looking statement as a result of various factors,
including those described above and in the Company’s last Form 10-KSB for 2006
and 2005 under "Risk Factors". We have no obligation to release
publicly the result of any revisions to any of our "forward-looking statements"
to reflect events or circumstances that occur after the date of this Report or
to reflect the occurrence of other unanticipated events.
THE
COMPANY’S FOCUS ON FOREIGN MARKETS UNDER MKG
Prior
management’s focus was on securing U.S. FDA approval to distribute the BDS in
the U.S. Under MKG, the Company has reoriented its energies towards generating
sales in foreign markets with significant populations of women, where MKG has
significant industry and government relationships, where the need for the BDS
appears compelling, and where the regulatory hurdles are not as
burdensome. Included among the foreign markets are China (including
Hong Kong, Taiwan and Macau), India, the Philippines, Indonesia, Malaysia,
Singapore, Vietnam, and other parts of Asia, Mexico, Latin America, the
Caribbean, Africa, Europe, and the Middle East. The initial countries
MKG are focusing on account for approximately one half of the world’s female
population. As articulated in the October 15, 2007 Time Magazine
article, MKG recognized from the outset that breast cancer is no longer an
affliction which only concerns certain segments of women in the U.S. and Western
Europe but is tragically a global challenge. Given the nature of the
BDS, the Company believes that the BDS can play a role to help save lives in
foreign countries, which for a variety of reasons may not have the detection
technologies present in the U.S. and Western Europe.
Since
2007, MKG has been working with leading government, medical, distribution, and
manufacturing representatives, agencies, and institutions in China, India, the
Philippines and other parts of Asia to incorporate the BDS as part of early
detection and awareness initiatives. Since 2007, MKG has also been working with
those representatives, agencies, and institutions to manufacture the BDS device
and sensors overseas; to conduct clinical trials, including joint U.S.-Asian
trials; to further develop the BDS device and sensors for screening purposes;
and to further develop the BDS device and sensors for cancers other than breast
cancer.
MKG
Initiatives in Foreign Markets
In 2007,
MKG continued to meet with significant government, healthcare, distribution, and
manufacturing contacts to distribute, manufacture, and develop the BDS in
foreign markets. MKG strategy is to form strategic alliances, in the form of a
joint venture or sublicense, with entities with significant funding, government
relationships and distribution networks, especially those associated with
hospital systems, regulatory expertise, and manufacturing capabilities. The
joint venture assumes all responsibilities and expenses within the designated
territory to distribute the BDS, secure regulatory approval for the BDS, conduct
clinical trials and development, and in some cases to manufacture the
BDS.
To help
ongoing strategic initiatives in Asia, the Company and MKG opened an office in
Hong Kong in April 2008. The office oversees and is responsible for our ongoing
demonstrations and our sales, regulatory, and other strategic initiatives in
Asia, including the People’s Republic of China, Hong Kong, Taiwan, India, the
Philippines, Japan, Indonesia, South Korea, Vietnam, Singapore, and
Malaysia. The new office is located at 3412, China Merchants Tower,
168-200 Connaught Road, Sheung Wan, Hong Kong. The new office is headed by David
Hong, who will head Biofield operations for all of Asia.
China
In 2007,
MKG had discussions with representatives of Chinese government, including those
associated with China’s state and military hospitals, about potential orders of
the BDS and sensors. Chinese representatives expressed significant
interest in the BDS and discussed, among other things, potential orders for
Chinese hospitals; designating top Chinese medical institutions and doctors to
work with the Company on additional clinical trials and R&D including joint
U.S.-Chinese trials and including on screening and cancers other than breast
cancer; incorporating the BDS into Chinese early detection initiatives and a
cancer fund established for the indigent.
From
the middle of 2007 to the first part of 2008, significant discussions occurred
in Shanghai, Beijing, Hong Kong, Guangdong Province, Tianjin, Guangxi Province,
Taiwan and Macau with leading Chinese healthcare bureaus, officials, medical
institutions, and physicians. Successful demonstrations were
conducted in Shanghai, Beijing, and Hong Kong. Several Chinese
government and hospital representatives also attended the Company’s well
received breast cancer symposium in Manila in the fall of 2007. In March-April
2008, an initial demonstration of the BDS was successfully conducted in Shanghai
at the facilities of a division of Chinese government organization which is a
leading testing center in Shanghai involved with reviewing and bringing new
healthcare technologies to China. Additional demonstrations are
planned in Shanghai for training, studies and data collection-related
purposes. The Company has received significant interest from leading
Chinese entities interested in distributing the BDS in China and is evaluating
each opportunity. Upon recertification of the CE mark, the Company
intends to obtain FDA certification for China. The Company believes
that orders for the BDS device and sensors will be placed in China following FDA
approval. The Company is working with leading Chinese representatives
to secure the governmental authorization to distribute and possibly manufacture
the BDS device and sensors in China.
In
April-May 2008, demonstrations of the BDS were conducted in Shanghai before
Shanghai Jiashen Lifecare Investment Management Company Limited (CareLife) at
the Shanghai International Medical Exchange Centre, a division under the
Shanghai Municipal Health Bureau (SIMEC), a leading testing center in Shanghai
for new medical technologies for China. Patients with known malign and benign
tumors were tested; each time BDS accurately identified the nature of the tumor.
A follow-up trip was arranged to train doctors and technicians closely related
to SIMEC and to begin to collect data for studies in Shanghai, China’s largest
city considered the heart of China’s medical community.
As result
of the Shanghai demonstrations, MKG has signed a memorandum of understanding
(MOU) with Carelife’s appointed agent, China International Medical Exchange Ltd
(CIME), to form a joint venture in China with Carelife. Carelife
works with the Shanghai Municipal Health Bureau and leading Chinese medical
testing centers, insurance companies, financial institutions, businesses
(domestic and foreign), hospitals, and doctors to provide healthcare coverage
for persons referred by banks and insurance companies in China and is setting up
medical centers throughout China. One of Carelife’s focuses is to provide health
coverage for cancer. Carelife is also setting up an electronic data collection
system to collect critical medical data to help early detection.
The
closing documents were executed at the June 16 signing ceremony covered by media
in mainland China and Hong Kong for the new Chinese national healthcare JV
arranged by James MacKay and MKG — Worldwide Lifecare Limited (the Carelife JV)
— which will provide Biofield’s Breast Cancer technology and other comprehensive
medical technology and services in China.
The
Carelife JV will open a network across China of medical clinic centers, call
centers and data centers for research and development. The first medical clinic
center will open in February 200 9 at Carelife’s China Headquarters in Shanghai.
Carelife is currently in discussions regarding a possible partnership with
China’s National Labor Union which would be funded with an investment by Chinese
Government and others of approximately US $363 million to open more than 500
medical clinic centers across China at different Labor Union centers covering
60% of China’s urban population. This national network would be part
of China’s national healthcare program to instill best healthcare management
practices and to address critical problems related to its aging
population. China’s top insurance companies (China Life Insurance
and Ping An Insurance) and top bank, China Industrial Commercial Bank, have
agreed to refer subscribers, employees, and clients to join the Carelife network
.
The
Carelife JV will provide Biofield’s BDS technology, among others, through this
national 500+ medical clinic center network. The medical clinic centers will
also introduce BDS to hospitals and government-owned medical care units for
China’s general population. Carelife’s target diagnostic penetration rate in
urban China is 20% - representing at least 25 million diagnoses per
year.
Extensive
discussions are taking place with the Chinese Ministry of Health and Chinese
Food and Drug Administration to form a strategic alliance between them and MKG
which would expand the distribution of the BDS device and sensors in China from
the 500 Bio Centers to China’s state-owned and military hospitals.
MKG has
also signed a Joint Venture and Exclusive Distribution Agreement with Fame Star
Investment Limited (FSIL) to form a new JV, the MacKay Medical Group Limited
(“MKMG”) for the distribution, testing, and further development of the BDS and
other medical technology in Hong Kong and Macau. With FSIL’s strategic
relationships within the healthcare community in Hong Kong and Macau, the new JV
will work with, and distribute BDS to, leading clinical testing centers,
hospitals, and medical institutions in Hong Kong to prepare a medical study and
clinical trial for BDS.
India
Since
2007, MKG has had discussions with hospital, medical and distribution
representatives from India, including those associated with certain national,
regional and municipal government entities and leading hospital systems and
distribution networks in India, about the distribution of the BDS in India.
Following the successful demonstration of the BDS at the October 24, 2007 major
breast cancer detection symposium in Manila, which was attended by leading
Indian representatives, there was significant interest from Indian
representatives about potential significant orders and about distributing and
securing regulatory approval for the BDS in India and other countries in the
Indian subcontinent including Nepal and Bangladesh. The Company expects to
conclude a distribution arrangement in India in or about the middle of 2009 and
to generate purchase orders for 2010.
The
Philippines, Indonesia and Malaysia
In 2007,
MKG had repeated meetings with, and have conducted demonstrations for,
significant government, church, healthcare, and distribution representatives in
the Philippines. On March 8, 2007, MKG delivered a BDS device and three cases of
sensors to a hospital in the Philippines. The hospital has started to
take the unit to the provinces as part of their mobile health systems
services. MKG believes that the Filipino Government and the Catholic
Church in the Philippines will publicly endorse the BDS as part of national
initiatives promoting early detection of breast cancer. In 2007
certain bills were introduced before the Filipino Congress (S.B. No. 78, The
Breast Cancer Detection Act of 2007, and S.B. 1815, an Act Creating a Center for
Breast Cancer Control and Prevention), which would require local government
units to conduct a quarterly breast cancer detection program and would establish
the Center for Breast Cancer Control and Prevention.
In
October 2007, MKG formed a joint venture with Eastern Petroleum Corporation, one
of the leading business and petroleum companies in the
Philippines. The joint venture is called the MacKay Eastern Medical
Group (“MacKay Eastern”) and will bear the exclusive responsibility and expense
to distribute, market, gain regulatory approval for, and further develop the BDS
and related technologies in the Philippines, Indonesia and
Malaysia. In October 2007, an initial order of 10 devices and 20
cases of sensors was sold and delivered to the joint venture.
On
October 24, 2007, the joint venture presented the BDS at a major breast cancer
detection symposium in Manila attended by approximately 200 guests, including
representatives from 100 of the top hospitals and medical institutions in the
Philippines and government and industry representatives from the Philippines,
China and India. Following the successful demonstration of the BDS at
the October 24, 2007 major breast cancer detection symposium in Manila,
discussions are taking place about potential orders for 2009
delivery.
In late
2007 through the middle of 2008, MacKay Eastern began launching and conducting
demonstrations and testing of the BDS device and sensors in parts of the
Philippines. In December 2007, MacKay Eastern launched the BDS device
and sensors in General Santos City. In 2007, it also began working
with certain hospitals and clinics in the Philippines. Since late
2007, MacKay Eastern has worked closely with leading national and city
representatives regarding government initiatives to provide breast cancer
detection for government employees.
The
Company anticipates receiving purchase orders for the BDS devices and sensors in
2009, including from representatives associated with national, city, and
municipal Filipino government, including the Congress of the
Philippines. These potential purchase orders would be associated with
the possible enactment of the new breast cancer detection legislation and
national initiatives discussed above by the Congress of the Philippines, which
believes that the Company and its technology can play a significant role in the
national initiatives.
Mexico
In
January 2007, on behalf of the Company, certain representatives successfully
conducted patient demonstrations and seminars of the BDS in Mexico City before
more than 50 OB/GYN and other physicians, nurses, officials, and representatives
from leading hospitals, clinics, laboratories, pharmaceutical companies, and
other health providers based in Mexico and other countries in Latin America. The
demonstrations and seminars were conducted by a noted physician in Mexico City
on female patients with pre-confirmed malignant and benign tumors. Biofield’s
device tested successfully in the patient demonstrations, generating substantial
interest among Mexican OBY/GYN and healthcare communities. The purpose of the
demonstrations and seminars was to introduce Biofield’s technology to leading
opinion makers in the Mexican healthcare community and to seek to secure
purchase orders for the device and sensors. Subsequent meetings and discussions
have taken place with leading hospitals, clinics, physicians, and other opinion
leaders in Mexico, many of which also have clinics, stores, or other facilities
in other Latin American countries. Presentations of Biofield’s technology were
also made on Mexican TV. (See Company’s press release dated
February 23, 2007, a copy of which is available online at
www.biofield.com.)
Continued
discussions have taken place with the Mexican representatives who conducted the
Mexico City demonstration (as well as with other
representatives). Discussions have taken place about sublicensing the
BDS for Mexico and Spanish-speaking countries in Latin America, purchase orders
for the BDS devices and sensors and securing regulatory approval and
establishing manufacturing facilities for the BDS in
Mexico. Significant interest has been generated from
Mexico. MKG has been discussing sublicense arrangements with certain
Mexican representatives who were proceeding to secure the necessary funding to
conduct manufacturing, distribution and regulatory approval in
Mexico.
The
Singapore Sale
On
February 28, 2007, Biofield sold a BDS device and three cases of sensors to
leading distributor in Singapore. The gross proceeds totaled
$24,950. The distributor is an industry leader in Singapore in
biomedical engineering, which serves all the major medical centers and hospitals
in Singapore. The end user is a nationally and internationally
acclaimed institution in Singapore, which is recognized as an innovator for
cutting edge technologies, including those in the biomedical science industry
and medical device field, and for its commitment to public and community
service. The sale was the result of a tender which was awarded to the
Company. In addition to using the BDS for diagnostic purposes, the
end user is conducting significant research which may impact the use of the BDS
for screening purposes. The distributor believes its clients may be
interested in buying the BDS devices and sensors. (See Company’s press release
dated February 28, 2007, a coy of which is available online at
www.biofield.com.)
Other
Foreign Markets
Since
2007, MKG has had discussions with representatives in other foreign countries
concerning South Africa, Japan, and other countries in the Middle East and
Africa. The Company under prior management presented the BDS to
leading government, hospital, and medical representatives from South Africa,
including First Lady Mbeki. During the same trip, the Company met
with leading government representatives from Botswana. Significant
interest was received including interest about transporting the BDS through
mobile van units. There are currently several BDS devices in South
Africa. The Company has also conducted demonstrations for leading
Japanese representatives. One of the Company’s prior clinical trials took place
in Japan. Discussions have also taken place about distributing the
BDS in Middle Eastern countries such as Iraq, Saudi Arabia, United Arab
Emirates, Kuwait, Jordan, and Lebanon.
In
November 2008, MKG signed a Joint Venture and Distribution Agreement to form The
MacKay Distribution Limited (MKDL) for the European market. MKDL has since been
in extreme close negotiations with a major Spanish Medical Distribution Group
for Spain and Portugal. Since then, one demo unit was sent to the Spanish
company for testing purposes and both entities have agreed to roll out a BDS
road show within Spain during mid 2009 after the CE
re-certification. Pending CE re-certification, the Company
anticipates receiving orders for the BDS devices and sensors in late
2009.
The
MKG Master License
As
reported in and attached to its Form 8-K filed July 31, 2007, the Company signed
a master license agreement (the “Agreement”) with MKG. Pursuant to
the Agreement, the Company granted to MKG an exclusive (even to the Company),
sub licensable, royalty-bearing, worldwide license to make, have made, use,
import, offer for sale, and sell devices, sensors and other products or services
incorporating the Company’s patented and unpatented breast cancer detection
technology, including, but not limited to, the BDS, the Biofield Breast Cancer
Proliferation Detection System, the Breast Cancer Diagnostic Device, and the
Biofield Breast Examination or BBESM (collectively, the
“Technology”). The Company also granted MKG, on a worldwide basis,
the Exclusive Distribution, Manufacturing, Development, Clinical, and R&D
Rights (as those terms are defined in the Agreement) with regard to the
Technology. Under the Agreement, MKG assumes from the Company the sole
responsibility and expense to market, manufacture, further develop (clinically
and technically), and otherwise commercialize the Technology. MKG further
assumes from the Company the sole responsibility and expense to secure
additional regulatory approvals and to conduct additional clinical trials, as
well as research and development. MKG will also make commercially
reasonable efforts to, among other things, further develop the Technology for
screening, as opposed to purely diagnostic, purposes and for cancers other than
breast cancer .
In
return for the exclusive worldwide license, MKG will pay the Company royalties
based on gross receipts received by MKG and its affiliates in connection with
the Technology. MKG must pay minimum royalties. In addition to royalties, MKG
will pay the Company licensing fees based upon certain milestones. The term of
the Agreement is 10 years with automatic renewals for additional 10-year terms
unless terminated by one of the parties pursuant to the terms of the
Agreement.
MKG and
the Company have discussed transferring to the Company a majority interest in
the entity that holds the master license agreement. No agreement has been
reached pending resolution of the consideration to be paid to MKG and
satisfactory resolution of the tax, regulatory and other issues in the U.S. and
Asia.
Developments
in the U.S.
On
September 18, 2008, the board of directors of Biofield Corp., a Delaware
corporation ("Biofield") approved the execution of an Exclusive Distribution
Agreement with NeuroMed Devices, Inc., ("NeuroMed Devices") a Nevada corporation
with principal offices at Oakley, Utah and Laguna Niguel, California,
USA.
Under the
terms of the Exclusive Distribution Agreement, Biofield obtained exclusive
worldwide distribution rights to NeuroMed Devices’ OraCalm (for oral herpes) and
ViraCalm (for genital herpes) non-invasive medical devices for the treatment of
oral and genital herpes. During the three year term of the Exclusive
Distribution Agreement Biofield must meet certain performance minimums in order
to retain exclusivity. Biofield believes it will be able to meet these
performance minimums and extend the initial term of the Exclusive Distribution
Agreement prior to its expiration.
OraCalm
and ViraCalm devices employ non-invasive neuromodulation techniques.
Neuromodulation is a noninvasive treatment modality in which a unique
combination of electrical signals, frequencies and waveforms are transmitted to
higher centers in the brain using a patented mechanism. This unique technology
encourages the manufacture and secretion of brain neurochemicals using a
mechanism that cannot be simulated by drugs or conventional electrotherapy
devices.
Neuromodulation
technology relies on a sophisticated frequency pattern that uses carefully
calculated patterns of changing frequencies. The term Neuromodulation is used to
describe two very different treatment approaches, one invasive, the other
non-invasive.
Invasive
Neuromodulation - refers to the surgical implant of electrodes in the brain or
elsewhere in the body.
Non-Invasive
Neuromodulation - refers to the use of electrodes outside the body with no
surgery or implantation of any device within the body.
NeuroMed
Devices entered into the Exclusive Distribution Agreement with Biofield because
of Biofield’s access to Asian and other worldwide markets to commercialize these
two devices once the applicable regulatory approvals have been obtained.
NeuroMed Devices’ regulatory path for both devices will be to seek FDA approval.
"Over-the-Counter" approvals will also be sought so that a physician's
prescription will not be necessary for the purchase of these devices. In
addition to U.S. regulatory approvals, NeuroMed Devices plans to seek a CE Mark
for Europe, as well as regulatory approvals elsewhere worldwide. Currently,
regulatory approvals and intellectual property protection are in progress in
Hong Kong and the Peoples Republic of China via several mechanisms including the
China Counsel for Promotion of International Trade, the Chinese equivalent of
the FDA.
Patents
on the technology for both the Oral and Genital Herpes devices, and Method of
Treatment, were filed with the United States Patent and Trademark Office in
November 2000. The international filing date was November 2001. Patent
application No. 6,618,625, "Method and Apparatus for the Treatment of Viral
Diseases" was issued on Sept 9, 2003 (Silverstone, 2003). Publication date of
the continuance was September. 2004. The European patent # 1359971 was approved
on July 2006 and has been issued in FRANCE, GERMANY, ITALY, SPAIN and the UNITED
KINGDOM. The AUSTRALIAN patent application, # 2001298007, was issued on May 25,
2007. The INDIAN patent application, No. 624/KOLNP/03, was issued April 2, 2008.
NeuroMed Devices awaits results of patent applications elsewhere.
LONG-TERM STRATEGY AND
GOALS
The long
term strategy and goal of the Company is to become a leading provider of
state-of-the-art medical and healthcare-related technology throughout the
world. The Company’s immediate goal is the distribution and
manufacture of the BDS in foreign markets and subsequently in the U.S. upon
securing U.S. FDA approval. The Company is also working with medical
experts in the U.S., Asia, the Middle East, and Europe on advanced medical and
healthcare-related technologies other than the BDS, which MKG can use its
government and industry relationships in Asia and elsewhere to distribute,
manufacture and further develop. While many of these other
technologies relate to women’s health and non-invasive technologies, other
technologies relate to fields such as hospital and data management, emergency or
triage management, diabetes, obesity, and childhood diseases and
care.
On the
BDS, the Company’s goal is to exploit MKG’s government, medical, distribution,
manufacturing and other relationships overseas to develop the BDS as a leading
breast cancer detection modality outside the U.S. The initial focus
is on China, India, the Philippines, Indonesia, Malaysia, and
Mexico. The Company plans to extend its marketing efforts to other
parts of Asia, Latin America, the Caribbean, Africa, Europe, and the Middle
East. With sales, acceptance and support from leading government,
medical, and industry representatives, clinical trial results, and further
research and development from those countries, the Company intends to reinitiate
efforts before the U.S. FDA to distribute the improved version of the BDS in the
U.S.
In order
to expand revenue generation activities, the Company has secured and intends to
explore other opportunities to acquire rights to distribute additional medical
products. On September 18, 2008, the Company entered into an
Exclusive Distribution Agreement with NeuroMed Devices, Inc. with principal
offices at Oakley, Utah and Laguna Niguel, California, USA. Biofield obtained
exclusive worldwide distribution rights to NeuroMed Device’s OraCalm (for oral
herpes) and ViraCalm (for genital herpes) non-invasive medical devices for the
treatment of oral and genital herpes. During the three year term of the
Exclusive Distribution Agreement Biofield must meet certain performance minimums
in order to retain exclusivity. Biofield believes it will be able to meet these
performance minimums and extend the initial term of the Exclusive Distribution
Agreement prior to its expiration. OraCalm and ViraCalm devices employ
non-invasive neuromodulation techniques. Neuromodulation is a noninvasive
treatment modality in which a unique combination of electrical signals,
frequencies and waveforms are transmitted to higher centers in the brain using a
patented mechanism. This unique technology encourages the manufacture and
secretion of brain neurochemicals using a mechanism that cannot be simulated by
drugs or conventional electrotherapy devices.
Neuromodulation
technology relies on a sophisticated frequency pattern that uses carefully
calculated patterns of changing frequencies. The term Neuromodulation is used to
describe two very different treatment approaches, one invasive, the other
non-invasive. Invasive Neuromodulation - refers to the surgical implant of
electrodes in the brain or elsewhere in the body. Non-Invasive Neuromodulation -
refers to the use of electrodes outside the body with no surgery or implantation
of any device within the body.
NeuroMed
Devices entered into the Exclusive Distribution Agreement with the Company
because of the Company’s access to Asian and other worldwide markets to
commercialize these two devices once the applicable regulatory approvals have
been obtained. NeuroMed Devices’ regulatory path for both devices will be to
seek FDA approval. "Over-the-Counter" approvals will also be sought so that a
physician's prescription will not be necessary for the purchase of these
devices. In addition to U.S. regulatory approvals, NeuroMed Devices plans to
seek a CE Mark for Europe, as well as regulatory approvals elsewhere worldwide.
Currently, regulatory approvals and intellectual property protection are in
progress in Hong Kong and the Peoples Republic of China via several mechanisms
including the China Counsel for Promotion of International Trade, the Chinese
equivalent of the FDA.
Patents
on the technology for both the Oral and Genital Herpes devices, and Method of
Treatment, were filed with the United States Patent and Trademark Office in
November 2000. The international filing date was November 2001. Patent
application No. 6,618,625, "Method and Apparatus for the Treatment of Viral
Diseases" was issued on Sept 9, 2003 (Silverstone, 2003). Publication date of
the continuance was September. 2004. The European patent # 1359971 was approved
on July 2006 and has been issued in FRANCE, GERMANY, ITALY, SPAIN and the UNITED
KINGDOM. The AUSTRALIAN patent application, # 2001298007, was issued on May 25,
2007. The INDIAN patent application, No. 624/KOLNP/03, was issued April 2, 2008.
NeuroMed Devices awaits results of patent applications
elsewhere.
LIQUIDITY AND CAPITAL
RESOURCES
We have
financed our operations since inception almost entirely by the issuance of our
securities, interest income on the then unutilized proceeds from these issuances
and with loans made directly, or guaranteed and collateralized, by Dr. David
Long and certain of his affiliates (until the MKG Acquisition) and by MKG (after
the MKG Acquisition).
At
December 31, 2009, we had a working capital deficiency of approximately $9.5
million, a slight decrease of $0.5 million from December 31, 2008. Our cash and
cash equivalents were $0 at December 31, 2009 and 2008.
At
December 31, 2009 and 2008, we had no value on the balance sheet for the
inventory, as a full reserve has been recorded.
During
2009, we had a net loss of approximately $935,000, compared to approximately
$11.1million for 2008, a decrease of approximately $10.2 million. The decrease
was primarily due to the Company’s issuance of $8,667,009 of common stock, in
lieu of cash compensation, to Directors and Officers, in efforts to update the
design of BDS device and sensors for distribution and manufacture in China, the
Philippines and other parts of Asia in the year ended December 31, 2008. During
the year ended December 31 2009, our net cash used in operating activities was
approximately $0.5 million, same for the year ended December 31,
2008.
During
the year ended December 31, 2009, accounts payable and accrued expenses
decreased to approximately $3.7 million, from approximately $4.5 million at
December 31, 2008, a decrease of approximately $0.8 million or
18%. The decreases were primarily due reduction of general and
administrative expenses for the year ended December 31, 2009.
During
the year ended December 31, 2009, we had depreciation and amortization in
connection with operating activities of $1,389, same for the year ended December
31, 2008.
Cash
Flows Activities
During
2009, our operating activities utilized $503,484, which included a net loss of
$935,301, offset by a decrease in accounts payable and accrued expenses. Our
financing activities provided $498,737. We had proceeds note
financing cost of $80,839; proceed from common stock subscription of $110,000
and proceeds form exercise of common stock of $70,000.
During
2008, our operating activities utilized $503,308, which included a net loss of
$11,091,561, offset by the non-cash issuance of $8,667,010 in common stock, in
lieu of cash compensation, to Directors and Officers, in efforts to update the
design of BDS device and sensors for distribution and manufacture in China, the
Philippines and other parts of Asia. There were no investing activities during
the fiscal year ended December 31, 2008. Our financing activities provided
$489,980. We had proceeds from issuance of notes payable of
$187,058, borrowings on line of credit of $76,740, as well as advances of
stockholder and related parties of $216,270.
While we
have raised capital to meet our working capital and financing needs in the past,
additional financing is required in order to meet our current and projected cash
flow deficits from operations and development. We are seeking
financing in the form of equity in order to provide the necessary working
capital. We are engaged in several discussions with significant
funders, although we currently have no commitments for
financing. There is no guarantee that we will be successful in
raising the funds required.
The
independent auditors report on our December 31, 2009 financial statements states
that our recurring losses raise substantial doubts about our ability to continue
as a going concern.
RESULTS OF
OPERATIONS
Comparison
of the Year Ended December 31, 2009 with the Year Ended December 31,
2008
In fiscal
year ended December 31, 2009 and 2008 we had no revenue.
In fiscal
year ended December 31, 2009 and 2008 we had no cost of sales.
In fiscal
year ended December 31, 2009 and 2008 we had no gross profit.
We did
not incur any research and development expenses in 2009 or
2008.
Selling,
general and administrative expenses decreased by $10,194,550 or 96.8%, to
$335,736 in 2009, from $10,530,286 in 2008. The decrease was largely
attributable to $8,667,010 worth of common stock issued, in lieu of cash
compensation, to Directors and Officers, in efforts to update the design of BDS
device and sensors for distribution and manufacture in China, the Philippines
and other parts of Asia, consulting expenses of new management and facilities;
consultants and professional expenses, as well as expenses related to
travel.
We had
net interest expense of $599,564 in 2009, compared to $561,275 in 2008, an
increase of $38,289, or 6.8%. This increase was the result of accrued interest
on higher loan balances in fiscal year ended December 31, 2009, when compared to
loan balances for the same period in 2008.
As a
result of the foregoing, we incurred a net loss of $935,301in 2009compared to a
net loss of $11,091,561 in 2008, a decrease of $10,156,260, or
91.6%.
While we
have raised capital to meet our working capital and financing needs in the past,
additional financing is required in order to meet our current and projected cash
flow deficits from operations and development. We are seeking
financing in the form of equity in order to provide the necessary working
capital. We currently have no commitments for
financing. There is no guarantee that we will be successful in
raising the funds required.
By
adjusting its operations and development to the level of capitalization,
management believes it has sufficient capital resources to meet projected cash
flow deficits through the next 12 months. However, if thereafter, we are not
successful in generating sufficient liquidity from operations or in raising
sufficient capital resources, on terms acceptable to us, this could have a
material adverse effect on our business, results of operations, liquidity and
financial condition.
The
independent auditors report on our December 31, 2009 financial statements states
that our recurring losses raise substantial doubts about our ability to continue
as a going concern.
PRODUCT
RESEARCH AND DEVELOPMENT
Material
research and development expenditures are expected during the next 12 months, as
the Company and MKG proceed to distribute and manufacture the BDS overseas,
further develop the BDS, and possibly reinitiate efforts before the U.S.
FDA. The Company and MKG have engaged and are working with the
original inventor of the BDS and his current company to help update the design
of the BDS, including the update of certain components of the BDS and for
screening purposes, so that the BDS can be distributed and possibly manufactured
in Asia. The Company and MKG are also working with its current sensor
manufacturer to update the design of the BDS sensors, including for screening
purposes. Under the master license agreement with MKG, much of the
expenses, with the exception of the efforts before the U.S. FDA, will be borne
on MKG or MKG’s sublicensees.
ACQUISITION
OR DISPOSITION OF PLANT AND EQUIPMENT
Overseas
sales of an updated version of the BDS device and sensors are expected to occur
during the next 12 months, including in the Philippines and in China (from the
more than 500 Bio Centers are being opened throughout China by MKG and its
Chinese partners). We are also working to manufacture more devices
and sensors for prospective orders. The acquisition of significant
property, plant or equipment is also expected during the next 12 months, as MKG
and its sublicensee proceed to distribute and manufacture the BDS device and
sensors overseas and are working with the original inventor of the BDS device
and his company as well as its current sensor manufacturer to distribute and
manufacture the BDS device and sensor in China, the Philippines, and other parts
of Asia. Much of the expenses will be borne by MKG as the master
licensee or MKG’s sublicensees. MKG is working with the Company to best vend
back the master license agreement into the Company to maximize the return to the
Company of anticipated sales in China and the Philippines, and attorneys and a
leading accounting firm are considering tax, regulatory and other implications
in the U.S. and Asia.
OFF-BALANCE SHEET
ARRANGEMENTS
None.
ITEM
8. FINANCIAL STATEMENTS.
Our
consolidated financial statements and the report of Jewett, Schwartz, and Wolfe
& Associates are attached to this Annual Report on Form 10-K beginning on
page F-1 and are incorporated herein by reference.
ITEM
9A. CONTROLS AND PROCEDURES.
Disclosure
Controls and Procedures
An
evaluation was carried out under the supervision and with the participation of
the Company’s management, including its Chief Executive Officer and its Chief
Financial Officer, of the effectiveness of the Company’s disclosure controls and
procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934) as of the end of the period covered by this report.
Based upon this review, management concluded that our disclosure controls and
procedures are effective.
There
have been no significant changes in internal control over financial reporting
(as defined in Rules 13a-15 and 15d-15 under the Securities Exchange Act of
1934) that occurred during the fiscal period covered by this report that have
materially affected, or are reasonably likely to materially affect, the
Company’s internal control over financial reporting.
Management’s
Annual Report on Internal Control Over Financial Reporting
Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting (as defined in Rules 13a-15(f) and 15d-5(f)
under the Securities Exchange Act of 1934). Our management assessed the
effectiveness of our internal control over financial reporting as of December
31, 2008. In making this assessment, our management used the criteria set
forth by the Committee of Sponsoring Organizations of the Treadway Commission in
Internal Control-Integrated Framework. Our management has concluded that,
as of December 31, 2008, our internal control over financial reporting is
effective based on these criteria.
This
annual report does not include an attestation report of the Company’s registered
public accounting firm regarding internal control over financial
reporting. Management’s report was not subject to attestation by the
Company’s independent registered public accounting firm pursuant to temporary
rules of the Securities and Exchange Commission that permit the Company to
provide only management’s report in this annual report.
Limitations
of Disclosure Controls and Procedures
Our
management, including our Chief Executive Officer and Chief Accounting Officer,
does not expect that our disclosure controls or internal control over financial
reporting will prevent all errors or all instances of fraud. A control
system, no matter how well designed and operated, can provide only reasonable,
not absolute, assurance that the control system’s objectives will be met.
Further, the design of a control system must reflect the fact that there are
resource constraints, and the benefits of controls must be considered relative
to their costs. Because of the inherent limitations in all control systems, no
evaluation of controls can provide absolute assurance that all control issues
and instances of fraud, if any, within our Company have been detected.
These inherent limitations include the realities that judgments in
decision-making can be faulty and that breakdowns can occur because of simple
error or mistake. Controls can also be circumvented by the individual acts
of some persons, by collusion of two or more people, or by management override
of the controls. The design of any system of controls is based in part
upon certain assumptions about the likelihood of future events, and any design
may not succeed in achieving its stated goals under all potential future
conditions. Over time, controls may become inadequate because of changes
in conditions or deterioration in the degree of compliance with policies or
procedures. Because of the inherent limitation of a cost-effective control
system, misstatements due to error or fraud may occur and not be
detected.
CHANGES IN INTERNAL CONTROL OVER
FINANCIAL REPORTING
As
required by Rule 13a-15(d), the Company's Chairman and Chief Accounting Officer,
also conducted an evaluation of Biofield's internal controls over financial
reporting to determine whether any changes occurred during the fourth fiscal
quarter that have materially affected, or are reasonably likely to materially
affect, the Company's internal control over financial reporting. During the
preparation of the Company's financial statements as of and for the year ended
December 31, 2008, the Company concluded that the then current system of
disclosure controls and procedures needed improvement, partly due to the
transition to new management, facilities, and auditors. As a result of this
conclusion, the Company initiated changes in internal control. It should be
noted that any system of controls, however well designed and operated, can
provide only reasonable, and not absolute, assurance that the objectives of the
system will be met. In addition, the design of any control system is based in
part upon certain assumptions about the likelihood of future
events.
ITEM
9B. OTHER INFORMATION.
None.
PART
III
|
ITEM
10. DIRECTORS, EXECUTIVE OFFICERS, CORPORATE
GOVERNANCE .
|
As of
March 31, 2009, our directors and executive officers are:
|
Name
|
Age
|
Positions and Offices
|
||
|
James
MacKay
|
49
|
Director,
Chairman of the Board
|
||
|
David
Bruce Hong
|
60
|
Chief
Executive Officer, Chief Financial
Officer
|
Each of
our current directors was appointed to serve as a director by the then existing
Board of Directors. Each director serves until the next annual meeting of
stockholders and until his respective successor is elected and qualified, or
until his earlier resignation or removal. Our executive officers are
appointed by, and serve at the discretion of, our Board of Directors for a term
ending at the first meeting of our Board of Directors after the next annual
meeting of stockholders, or until his earlier resignation.
James
MacKay . Mr. MacKay is a global entrepreneur and venture
capitalist respected by governments, financiers, businesses and other
organizations throughout the world. Mr. MacKay has been involved in a
number of significant international projects with other associates. His contacts
extend to leading government and industry representatives from France, the
United Kingdom, China, Japan, Korea, Thailand, Singapore, India and the
Philippines, among other countries. During his career, he has helped fund and
operate and/or been otherwise involved in significant ventures worldwide,
including, but not limited, to ventures associated with individuals in the
musical and entertainment industry; leading hotels and resorts in Europe, the
Caribbean, and/or Asia; individuals in the aviation industry; leading technology
related to global tracking, homeland/global security, and anti-counterfeiting;
port development and initiatives between Asia and the United States; passenger
and cargo air traffic servicing parts of Asia and beyond; leading
healthcare/medical technology, especially those servicing the Philippines and
China; and mining and oil in Asia. Mr. MacKay is chairman of True
Product ID, Inc. (OTC: TPDI), chairman of the MacKay
Group, Ltd.
David Bruce
Hong . Mr. Hong served as head of the registrant’s Hong Kong
office and as such was in charge of the registrant’s operations for all of
Asia. Educated in the United States and England, Hong previously
helped oversee distribution, sales and business development for Asian and
multinational companies in a variety of diverse industries in the People’s
Republic of China, Hong Kong, Macau, Taiwan, Philippines, Thailand, Malaysia,
Indonesia, Japan and the United States, serving as CEO, a board member, director
for the Asian-Pacific Region, director for business development, and other
capacities. He helped oversee distribution, sales, promotions, and business
development in the Asian-Pacific Region for such companies as 7-Eleven, KFC,
Sands, 3M, Audi, Budweiser, Citibank, J. Walter Thompson, and Nestle, among
others. He was also a licensed financial controller within the insurance
industry for more than 10 years, and has extensive logistic management
experience. Hong is working with significant contacts within the Chinese
healthcare industry, including Chinese health and other officials, hospitals,
doctors, pharmaceutical and insurance companies to promote and demonstrate
Biofield’s technology. Mr. Hong was instrumental in helping to
conduct the highly successful demonstration of the BDS in Shanghai which
resulted in the endorsement of the BDS by Chinese Government.
No
family relationship exists among any of our directors or executive officers.
None of our directors would be considered to be independent. We do
not have an Audit Committee. Our prior Board of Directors adopted a Code of
Ethics, which applies to our principal executive officer, principal financial
officer, principal accounting officer or controller and persons performing
similar functions. A copy of our Code of Ethics will be furnished,
without charge, to any person upon written request to Michael Antonoplos, the
Company’s interim chief executive officer, chief accounting officer and
secretary our principal executive offices.
SECTION
16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section
16(a) of the Exchange Act requires the Company's directors, executive officers
and persons who beneficially own more than ten percent of the Company's Common
Stock, to file initial reports of beneficial ownership and reports of changes in
beneficial ownership with the SEC. Executive officers, directors and greater
than ten percent beneficial owners are required by the SEC to furnish the
Company with copies of all Section 16(a) forms they file.
Based
upon a review of the copies of such forms furnished to the Company and written
representations from the Company's executive officers and directors, the Company
believes that during fiscal year ended December 31, 2008 all Section 16(a)
filing requirements applicable to its executive officers, directors and greater
than ten percent beneficial owners were complied with on a timely basis, except
that David Bruce Hong, Shepard G. Bentley, Steven M. Waszak, and Shiva
Sharareh, PhD, failed to timely file Form 3s, was hired as the Chief
Technology Officer. The Company will assist in getting all required
reports timely filed in the future.
As set
forth below in Item 11, there is only one beneficiary owner, James MacKay, the
Company’s chairman of the board of directors, who holds 15,893,045 shares of
common stock or 29.29% of the Company’s total outstanding common stock,
12,300,000 shares of preferred stock, and approximately 51.96% of all of the
votes entitled to be cast by stockholders of the Company on a fully-diluted
basis (i.e., counting all outstanding options and warrants on an as-exercised
basis). None of the other directors or officers currently holds any
stock.
CORPORATE
GOVERNANCE
Our board
of directors has determined that none of our directors are "independent" as that
term is defined by the National Association of Securities Dealers Automated
Quotations ("NASDAQ"). See "Lack of Committees" for the NASDAQ definition of
"Independent Director."
The
following table shows the overall compensation earned for the 2009 fiscal year
with respect to each non-employee and non-executive director as of December 31,
2009.
|
Director Compensation
|
||||||||||||||||||||||||||||
|
Name
(a)
|
Fees Earned
or Paid in
Cash
(b)
|
Stock Awards
(c)
|
Option Awards
(d)(1)
|
Non-Equity Incentive
Plan Compensation
(e)(2)
|
Change in Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
(f)
|
All Other
Compensation
(g)(3)
|
Total
(j)
|
|||||||||||||||||||||
|
James
MacKay
|
- | - | - | - | - | - | - | |||||||||||||||||||||
|
David
Bruce Hong
|
- | - | - | - | - | - | - | |||||||||||||||||||||
(1) Reflects
dollar amount expensed by the company during applicable fiscal year for
financial statement reporting purposes pursuant to FAS 123R. FAS 123R requires
the company to determine the overall value of the options as of the date of
grant based upon the Black-Scholes method of valuation, and to then expense that
value over the service period over which the options become exercisable (vest).
As a general rule, for time-in-service-based options, the company will
immediately expense any option or portion thereof which is vested upon grant,
while expensing the balance on a pro rata basis over the remaining vesting term
of the option. For a description FAS 123 R and the assumptions used in
determining the value of the options under the Black-Scholes model of valuation,
see the notes to the financial statements included with this Form
10-K.
(2) Excludes
awards or earnings reported in preceding columns.
(3) Includes
all other compensation not reported in the preceding columns, including (i)
perquisites and other personal benefits, or property, unless the aggregate
amount of such compensation is less than $10,000; (ii) any "gross-ups" or other
amounts reimbursed during the fiscal year for the payment of taxes; (iii)
discounts from market price with respect to securities purchased from the
company except to the extent available generally to all security holders or to
all salaried employees; (iv) any amounts paid or accrued in connection with any
termination (including without limitation through retirement, resignation,
severance or constructive termination, including change of responsibilities) or
change in control; (v) contributions to vested and unvested defined contribution
plans; (vi) any insurance premiums paid by, or on behalf of, the company
relating to life insurance for the benefit of the director; (vii) any consulting
fees earned, or paid or payable; (viii) any annual costs of payments and
promises of payments pursuant to a director legacy program and similar
charitable awards program; and (ix) any dividends or other earnings paid on
stock or option awards that are not factored into the grant date fair value
required to be reported in a preceding column.
ITEM
11. EXECUTIVE AND OTHER COMPENSATION.
Compensation
of Executive Officers
The
following table provides certain summary information concerning the compensation
paid or accrued by us and our subsidiaries, to or on behalf of our Chief
Executive Officer. Other than as set forth in the table, no executive
officer’s cash salary and bonus exceeded $100,000 in any of the applicable
years. The following information includes the dollar value of base
salaries, bonus awards, the value of restricted shares issued in lieu of cash
compensation and certain other compensation, if any, whether paid or
deferred:
|
Name and
Principal Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
Non-Equity
Incentive Plan
Compensation
|
Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
($)
|
All Other
Compensation ($)
|
Total ($)
|
|||||||||||||||||||||||||
|
David
Bruce Hong, President
|
2009
|
|||||||||||||||||||||||||||||||||
|
2008
|
29,167 | - | 851 | - | - | - | - | 30,018 | ||||||||||||||||||||||||||
Outstanding
Equity Awards at year end
|
Option Awards
|
Stock Awards
|
|||||||||||||||||||||||||||||||||||
|
Name and
Principal
Position
|
Number of
Securities
Underlying
Options
(#) Exercisable
|
Number of
Securities
Underlying
Options
(#) Unexercisable
|
Equity
Incentive Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
|
Option
Exercise
Price
($)
|
Option
Expiration
Date
|
Number of
Shares of
Units of
Stock that
have not
Vested
(#)
|
Market
Value of
Shares or
Units of
Stock that
have not
Vested
($)
|
Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other Rights
that have not
Vested
(#)
|
Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other Rights
that have not
Vested
($)
|
|||||||||||||||||||||||||||
|
David
Bruce Hong,
President
|
250,000 | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
EMPLOYMENT
CONTRACTS
In
September 2008, the Company entered into employment agreements with David Bruce
Hong, the Chief Executive Officer of the Company. Under the terms of the
Employment Agreement, Hong will serve as our president for a period of three
years. During his term of employment, Hong will earn a base salary of $8,333.33
per month for the 1st six months and $10,000 per month thereafter. In
addition to base salary, Hong may be paid an annual bonus as our Compensation
Committee determines in its sole discretion. Hong will be entitled to
participate in and be covered under all welfare benefit plans or programs
maintained for executive officers. Hong is also entitled to receive
250,000 restricted shares of the registrant’s common stock.
ITEM
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
The
following table sets forth, as of March 31, 2010, the number of shares of our
common stock beneficially owned by (a) each person or group who is known to us
to be the beneficial owner of more than 5% of our outstanding common stock, (b)
each of our current directors, (c) each of the persons named in the Summary
Compensation Table appearing under Item 10. - "Executive Compensation", and (d)
all our directors and executive officers, as a group (six persons).
Except as indicated in the footnotes to this table, we believe that the persons
named in this table have sole voting and investment power with respect to the
shares of our common stock indicated.
|
Name
|
Shares
Beneficially
Owned
|
Percentage
|
||||||
|
James
MacKay, Director (1)
|
20,596,144 | (2) | 50.78 | % | ||||
|
David
Bruce Hong, President
|
1,750,000 | 4.31 | % | |||||
|
All
Directors and Officers as a group (6 persons)
|
22,346,144 | 55.09 | % | |||||
|
(1)
|
The
address of all of our directors is 175 Strafford Avenue – Suite One.
Wayne, PA 19087
|
|
|
(2)
|
Total
common stock equivalents, consisting of 40,558,699 shares of Common Stock
and 30,000,000 shares of Series A Preferred Stock. Each Series
A Preferred Share has two votes per share and is convertible into two
shares of common stock, for approximately 33.80% of all of the votes
entitled to be cast by stockholders of the
Company.
|
CHANGE
OF CONTROL
As set
forth above, on March 30, 2006, MKG took control of the Company and its
management, board, operations, and controlling interest.
As a
result of the debt conversion described above and in the Company’s Form 8-K
filed January 23, 2008, James MacKay became the holder of shares of the
Company’s capital stock entitling him to approximately 51.96% of all of the
votes entitled to be cast by stockholders of the Company on a fully-diluted
basis (i.e., counting all outstanding options and warrants on an as-exercised
basis).
ITEM
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE.
On July
27, 2007, the Company signed a master license agreement (the “Agreement”) with
MKG. Pursuant to the Agreement, the Company granted to MKG an exclusive (even to
the Company), sub licensable, royalty-bearing, worldwide license to make, have
made, use, import, offer for sale, and sell devices, sensors and other products
or services incorporating the Company’s patented and unpatented breast cancer
detection technology, including, but not limited to, the BDS device, the
Biofield Breast Cancer Proliferation Detection System, the Breast Cancer
Diagnostic Device, and the Biofield Breast Examination or BBESM
(collectively, the “Technology”). The Company also granted MKG, on a
worldwide basis, the Exclusive Distribution, Manufacturing, Development,
Clinical, and research and development rights (as those terms are defined in the
Agreement) with regard to the Technology. Under the Agreement, MKG assumes from
the Company the sole responsibility and expense to market, manufacture, further
develop (clinically and technically), and otherwise commercialize the
Technology. MKG further assumes from the Company the sole responsibility and
expense to secure additional regulatory approvals and to conduct additional
clinical trials and R&D.
In return
for the exclusive worldwide license, MKG will pay the Company royalties based on
gross receipts received by MKG and its affiliates in connection with the
Technology. MKG must pay minimum royalties. In addition to royalties, MKG will
pay the Company licensing fees based upon certain milestones. The term of the
Agreement is 10 years with automatic renewals for additional 10-year terms
unless terminated by one of the parties pursuant to the terms of the
Agreement.
ITEM
14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
The
following table sets forth fees billed to us by our independent accountants
during the fiscal years ended December 31, 2009 and December 31, 2008 for: (i)
services rendered for the audit of our annual financial statements and the
review of our quarterly financial statements, (ii) services rendered that are
reasonably related to the performance of the audit or review of our financial
statements and that are not reported as Audit Fees, (iii) services rendered in
connection with tax compliance, tax advice and tax planning, and (iv) all other
fees for services rendered. "Audit Related Fees" consisted of
consulting fees regarding accounting issues. "All Other Fees" consisted of fees
related to this Annual Report. Since we have no audit committee, none
of these services were approved by an audit committee, and we have no
pre-approval policies or procedures.
|
Year ended December 31,
|
||||||||
|
2009
|
2008
|
|||||||
|
Audit
Fees1
|
$ | 67,000 | $ | 54,000 | ||||
|
Audit
Related Fees2
|
||||||||
|
Tax
Fees3
|
||||||||
|
All
Other Fees4
|
||||||||
|
Total
|
$ | 67,000 | $ | 54,000 | ||||
|
1
|
The aggregate fees billed for the
audit of our annual financial statements and review of our financial
statements, which were included in our Forms
10-Q.
|
|
2
|
The aggregate fees billed for
assurance and related services that are reasonably related to the
performance of the audit or the review of our financial statements and not
included as "Audit Fees."
|
|
3
|
The aggregate fees billed for
professional services rendered for tax compliance, tax advice and tax
planning.
|
|
4
|
The aggregate fees billed for
products and services provided other than Audit Fees, Audit-Related Fees
or Tax Fees.
|
Policy on
Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of
Independent Auditors
The
Company currently does not have a designated Audit Committee, and accordingly,
the Company's Board of Directors' policy is to pre-approve all audit and
permissible non-audit services provided by the independent
auditors. These services may include audit services, audit-related
services, tax services and other services. 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 specific budget. The
independent auditors and management are required to periodically report to the
Company's Board of Directors regarding the extent of services provided by the
independent auditors in accordance with this pre-approval, and the fees for the
services performed to date. The Board of Directors may also
pre-approve particular services on a case-by-case basis.
REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To The
Shareholders and Board of Directors of Biofield Corp.
We have
audited the accompanying balance sheets of Biofield Corp. (a Development Stage
Company) as of December 31, 2009 and 2008 and the related statements of
operations, changes in stockholders’ deficit and cash flows for the years ended
December 31, 2009 and 2008 and the period from October 16, 1987 (inception)
through December 31, 2009. 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 provided 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 Biofield Corp. as of December 31,
2009 and 2008, and the results of its operations and its cash flows for the
years ended December 31, 2009 and 2008 and the period from October 16, 1987
(inception) through December 31, 2009 in conformity with accounting principles
generally accepted in the United States.
The
accompanying financial statements referred to above have been prepared assuming
that the Company will continue as a going concern. As more fully
described in Note 1, the Company’s need to seek new sources or methods of
financing or revenue to pursue its business strategy, raise substantial doubt
about the Company’s ability to continue as a going
concern. Management’s plans as 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.
|
/s/Jewett, Schwartz, Wolfe &
Associates
|
|
|
JEWETT,
SCHWARTZ, WOLFE & ASSOCIATES
|
|
|
Hollywood,
Florida
|
|
|
April
15, 2010
|
BIOFIELD
CORP.
(A
Development Stage Company)
CONSOLIDATED
BALANCE SHEETS
|
December 31,
|
December 31,
|
|||||||
|
2009
|
2008
|
|||||||
|
ASSETS
|
||||||||
|
PROPERTY
AND EQUIPMENT - Net
|
$ | 3,822 | $ | 5,211 | ||||
|
TOTAL
ASSETS
|
$ | 3,822 | $ | 5,211 | ||||
|
LIABILITIES
AND STOCKHOLDERS’ DEFICIT
|
||||||||
|
CURRENT
LIABILITIES:
|
||||||||
|
Accounts
payable and accrued expenses
|
$ | 3,653,615 | $ | 4,463,098 | ||||
|
Due
to affiliate
|
329,686 | 329,686 | ||||||
|
Advances
from stockholder
|
2,616,871 | 2,378,973 | ||||||
|
Notes
payable
|
2,491,790 | 2,410,951 | ||||||
|
Line
of credit
|
418,920 | 418,920 | ||||||
|
Total
current liabilities
|
9,510,881 | 10,001,628 | ||||||
|
Commitments
and contigencies
|
||||||||
|
STOCKHOLDERS’
DEFICIT:
|
||||||||
|
Preferred
stock, $.001 par value, 12,300,000 shares authorized, 12,300,000 shares
issued and outstanding at December 31, 2009 and 2008,
respectively
|
12,300 | 12,300 | ||||||
|
Common
stock, $.01 par value, 50,000,000 shares authorized, 40,558,699 shares
issued at December 31, 2009 and 24,793,500 hares issuable at December 31,
2008, respectively
|
405,587 | 247,935 | ||||||
|
Treasury
stock - 2,306,131 shares
|
(3,100 | ) | (3,100 | ) | ||||
|
Stock
subscriptions
|
3,849 | 3,849 | ||||||
|
Additional
paid-in capital
|
76,202,559 | 74,935,552 | ||||||
|
Accumulated
deficit during development stage
|
(86,128,254 | ) | (85,192,953 | ) | ||||
|
Total
stockholders’ deficit
|
(9,507,059 | ) | (9,996,417 | ) | ||||
|
TOTAL
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
$ | 3,822 | $ | 5,211 | ||||
See notes
to consolidated financial statements.
BIOFIELD
CORP.
(A
Development Stage Company)
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
Period October 16,
|
||||||||||||
|
Year Ended
|
1987 (Date of
|
|||||||||||
|
December 31,
|
Inception) Through
|
|||||||||||
|
2009
|
2008
|
December 31, 2009
|
||||||||||
|
REVENUE
|
$ | - | $ | - | $ | 244,522 | ||||||
|
COST
OF SALES
|
||||||||||||
|
Cost
of goods sold
|
- | - | 95,111 | |||||||||
|
Loss
on write down of inventory
|
- | - | 693,500 | |||||||||
|
GROSS
PROFIT
|
- | - | (544,089 | ) | ||||||||
|
OPERATING
EXPENSES:
|
||||||||||||
|
Research
and development
|
- | - | 40,481,889 | |||||||||
|
Selling,
general, and administrative
|
335,737 | 10,530,286 | 42,977,722 | |||||||||
|
Impairment
of intangible assets
|
- | - | 194,268 | |||||||||
|
Gain
on disposition of fixed assets
|
- | - | (8,084 | ) | ||||||||
|
Total
operating expenses
|
335,737 | 10,530,286 | 83,645,795 | |||||||||
|
OTHER
INCOME (EXPENSE):
|
||||||||||||
|
Interest
income
|
- | - | 2,476,722 | |||||||||
|
Interest
expense
|
(599,564 | ) | (561,275 | ) | (4,204,687 | ) | ||||||
|
Amortization
of shares issued to lenders and other finance costs
|
- | - | (405,523 | ) | ||||||||
|
Royalty
income and other
|
- | - | 214,867 | |||||||||
|
Net
other expense
|
(599,564 | ) | (561,275 | ) | (1,918,621 | ) | ||||||
|
LOSS
BEFORE INCOME TAXES
|
(935,301 | ) | (11,091,561 | ) | (86,108,505 | ) | ||||||
|
PROVISION
FOR INCOME TAXES
|
- | - | (19,749 | ) | ||||||||
|
NET
LOSS
|
$ | (935,301 | ) | $ | (11,091,561 | ) | $ | (86,128,254 | ) | |||
|
NET
LOSS PER SHARE:
|
||||||||||||
|
Basic
and Diluted
|
$ | (0.03 | ) | $ | (0.46 | ) | ||||||
|
WEIGHTED-AVERAGE
SHARES
|
||||||||||||
|
Basic
and Diluted
|
33,296,365 | 23,897,943 | ||||||||||
See notes
to consolidated financial statements.
BIOFIELD
CORP.
(A
Development Stage Company)
CONSOLIDATED
STATEMENTS OF STOCKHOLDERS' DEFICIT
|
Additional
|
Def
fered Accumulated
|
Foreign
Currency
|
Total
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Series
A
|
Series
B
|
Series
C
|
Treasury
|
Stock
|
Paid
In
|
Deficit
Development
|
Translation
|
Comprehensive
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Preffered
Stock
|
Amount
|
Preffered
Stock
|
Amount
|
Preffered
Stock
|
Amount
|
Common
Stock
|
Amount
|
Stock
|
Subscriptions
|
Capital
|
Stage
|
Adjustment
|
Total
|
Loss
|
||||||||||||||||||||||||||||||||||||||||||||||
|
Sale
of Common Stock, October 16, 1987
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
(date
of inception) (.16 per share, net)
|
- | $ | - | - | $ | - | - | $ | - | 54,902 | $ | 55 | $ | - | $ | - | $ | 91,898 | $ | - | $ | - | $ | 91,953 | ||||||||||||||||||||||||||||||||||||
|
Issuance
of Common Stock in connection with
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
patent
acquisition (.001 per share)
|
- | - | - | - | - | - | 23,529 | 24 | - | - | 276 | - | - | 300 | ||||||||||||||||||||||||||||||||||||||||||||||
|
Net
loss, October 16, 1987 to March 31, 1988
|
- | - | - | - | - | - | - | - | - | - | - | (159,359 | ) | - | (159,359 | ) | ||||||||||||||||||||||||||||||||||||||||||||
|
Total
comprehensive income (loss)
|
$ | (159,359 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
BALANCE
AT MARCH 31, 1988
|
- | $ | - | - | $ | - | - | $ | - | 78,431 | $ | 79 | $ | - | $ | - | $ | 92,174 | $ | (159,359 | ) | $ | - | $ | (67,106 | ) | ||||||||||||||||||||||||||||||||||
|
Net
loss
|
- | - | - | - | - | - | - | - | - | - | - | (495,520 | ) | - | (495,520 | ) | ||||||||||||||||||||||||||||||||||||||||||||
|
Total
comprehensive income (loss)
|
$ | (495,520 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
BALANCE
AT MARCH 31, 1989
|
- | $ | - | - | $ | - | - | $ | - | 78,431 | $ | 79 | $ | - | $ | - | $ | 92,174 | $ | (654,879 | ) | $ | - | $ | (562,626 | ) | ||||||||||||||||||||||||||||||||||
|
Net
loss
|
- | - | - | - | - | - | - | - | - | - | - | (233,347 | ) | - | (233,347 | ) | ||||||||||||||||||||||||||||||||||||||||||||
|
Total
comprehensive income (loss)
|
$ | (233,347 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
BALANCE
AT MARCH 31, 1990
|
- | $ | - | - | $ | - | - | $ | - | 78,431 | $ | 79 | $ | - | $ | - | $ | 92,174 | $ | (888,226 | ) | $ | - | $ | (795,973 | ) | ||||||||||||||||||||||||||||||||||
|
Acquisition
of 235,294 shares of Common Stock
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
(.001
per share)
|
- | - | - | - | - | - | - | - | (300 | ) | - | - | - | - | (300 | ) | ||||||||||||||||||||||||||||||||||||||||||||
|
Net
loss
|
- | - | - | - | - | - | - | - | - | - | - | (285,179 | ) | - | (285,179 | ) | ||||||||||||||||||||||||||||||||||||||||||||
|
Total
comprehensive income (loss)
|
$ | (285,179 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
BALANCE
AT MARCH 31, 1991
|
- | $ | - | - | $ | - | - | $ | - | 78,431 | $ | 79 | $ | (300 | ) | $ | - | $ | 92,174 | $ | (1,173,405 | ) | $ | - | $ | (1,081,452 | ) | |||||||||||||||||||||||||||||||||
|
Retirement
of Common Stock held in treasury
|
- | - | - | - | - | - | (23,529 | ) | (24 | ) | 300 | - | (276 | ) | - | - | - | |||||||||||||||||||||||||||||||||||||||||||
|
Issuance
of Common Stock in exchange for notes
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
and
debt with accrued interest (2.90 per share, net)
|
- | - | - | - | - | - | 43,137 | 43 | - | - | 1,248,638 | - | - | 1,248,681 | ||||||||||||||||||||||||||||||||||||||||||||||
|
Sale
of Common Stock (.82 per share, net)
|
- | - | - | - | - | - | 2,451 | 2 | - | - | 19,998 | - | - | 20,000 | ||||||||||||||||||||||||||||||||||||||||||||||
|
Amortization
of deferred compensation
|
- | - | - | - | - | - | - | - | - | - | 136,880 | - | - | 136,880 | ||||||||||||||||||||||||||||||||||||||||||||||
|
Net
loss
|
- | - | - | - | - | - | - | - | - | - | - | (461,061 | ) | - | (461,061 | ) | ||||||||||||||||||||||||||||||||||||||||||||
|
Total
comprehensive income (loss)
|
$ | (461,061 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
BALANCE
AT MARCH 31, 1992
|
- | $ | - | - | $ | - | - | $ | - | 100,490 | $ | 100 | $ | - | $ | - | $ | 1,497,414 | $ | (1,634,466 | ) | $ | - | $ | (136,952 | ) | ||||||||||||||||||||||||||||||||||
|
Sale
of Common Stock (7.67 per share, net)
|
- | - | - | - | - | - | 55,748 | 55 | - | - | 4,275,223 | - | - | 4,275,278 | ||||||||||||||||||||||||||||||||||||||||||||||
|
Exercise
of Common Stock options
|
- | - | - | - | - | - | 245 | 1 | - | - | 624 | - | - | 625 | ||||||||||||||||||||||||||||||||||||||||||||||
|
Amortization
of deferred compensation
|
- | - | - | - | - | - | - | - | - | - | 477,453 | - | - | 477,453 | ||||||||||||||||||||||||||||||||||||||||||||||
|
Change
in par value of common stock
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
from
.0001 to .001
|
- | - | - | - | - | - | - | 1,408 | - | - | (1,408 | ) | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||
|
Net
loss
|
- | - | - | - | - | - | - | - | - | - | - | (3,099,637 | ) | - | (3,099,637 | ) | ||||||||||||||||||||||||||||||||||||||||||||
|
Total
comprehensive income (loss)
|
$ | (3,099,637 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
BALANCE
AT MARCH 31, 1993
|
- | $ | - | - | $ | - | - | $ | - | 156,483 | $ | 1,564 | $ | - | $ | - | $ | 6,249,306 | $ | (4,734,103 | ) | $ | - | $ | 1,516,767 | |||||||||||||||||||||||||||||||||||
|
(brought
forward)
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Exercise
of Common Stock options
|
- | - | - | - | - | - | 74 | 1 | - | - | 187 | - | - | 188 | ||||||||||||||||||||||||||||||||||||||||||||||
|
Sale
of Series A Preferred Stock
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
(3.97
per share, net)
|
2,119,896 | 2,120 | - | - | - | - | - | - | - | - | 8,411,370 | - | - | 8,413,490 | ||||||||||||||||||||||||||||||||||||||||||||||
|
Issuance
of Series A Preferred Stock in
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
exchange
for notes (4.50 per share)
|
222,222 | 222 | - | - | - | - | - | - | - | - | 999,778 | - | - | 1,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||
|
Issuance
of Common Stock warrants
|
- | - | - | - | - | - | - | - | - | - | 2,119 | - | - | 2,119 | ||||||||||||||||||||||||||||||||||||||||||||||
|
Amortization
of deferred compensation
|
- | - | - | - | - | - | - | - | - | - | 1,580,320 | - | - | 1,580,320 | ||||||||||||||||||||||||||||||||||||||||||||||
|
Net
loss
|
- | - | - | - | - | - | - | - | - | - | - | (6,899,515 | ) | - | (6,899,515 | ) | ||||||||||||||||||||||||||||||||||||||||||||
|
Total
comprehensive income (loss)
|
$ | (6,899,515 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
BALANCE
AT MARCH 31, 1994
|
2,342,118 | $ | 2,342 | - | $ | - | - | $ | - | 156,556 | $ | 1,565 | $ | - | $ | - | $ | 17,243,080 | $ | (11,633,618 | ) | $ | - | $ | 5,613,369 | |||||||||||||||||||||||||||||||||||
|
Sale
of Series B Preferred Stock
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
(4.04
per share, net)
|
- | - | 481,644 | 482 | - | - | - | - | - | - | 1,947,149 | - | - | 1,947,631 | ||||||||||||||||||||||||||||||||||||||||||||||
|
Issuance
of Common Stock warrants
|
- | - | - | - | - | - | - | - | - | - | 6 | - | - | 6 | ||||||||||||||||||||||||||||||||||||||||||||||
|
Amortization
of deferred compensation
|
- | - | - | - | - | - | - | - | - | - | 14,859 | - | - | 14,859 | ||||||||||||||||||||||||||||||||||||||||||||||
|
Net
loss
|
- | - | - | - | - | - | - | - | - | - | - | (4,959,312 | ) | - | (4,959,312 | ) | ||||||||||||||||||||||||||||||||||||||||||||
|
Total
comprehensive income (loss)
|
$ | (4,959,312 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
BALANCE
AT DECEMBER 31, 1994
|
2,342,118 | $ | 2,342 | 481,644 | $ | 482 | - | $ | - | 156,556 | $ | 1,565 | $ | - | $ | - | $ | 19,205,094 | $ | (16,592,930 | ) | $ | - | $ | 2,616,553 | |||||||||||||||||||||||||||||||||||
|
Sale
of Series C Preferred Stock
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
(4.11
per share, net)
|
- | - | - | - | 2,914,771 | 2,915 | - | - | - | - | 11,977,856 | - | - | 11,980,771 | ||||||||||||||||||||||||||||||||||||||||||||||
|
Issuance
of Common Stock warrants
|
- | - | - | - | - | - | - | - | - | - | 161 | - | - | 161 | ||||||||||||||||||||||||||||||||||||||||||||||
|
Amortization
of deferred compensation
|
- | - | - | - | - | - | - | - | - | - | 195,874 | - | - | 195,874 | ||||||||||||||||||||||||||||||||||||||||||||||
|
Net
loss
|
- | - | - | - | - | - | - | - | - | - | - | (8,739,858 | ) | - | (8,739,858 | ) | ||||||||||||||||||||||||||||||||||||||||||||
|
Total
comprehensive income (loss)
|
$ | (8,739,858 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
BALANCE
AT DECEMBER 31, 1995
|
2,342,118 | $ | 2,342 | 481,644 | $ | 482 | 2,914,771 | $ | 2,915 | 156,556 | $ | 1,565 | $ | - | $ | - | $ | 31,378,985 | $ | (25,332,788 | ) | $ | - | $ | 6,053,501 | |||||||||||||||||||||||||||||||||||
|
Sale
of Common Stock
|
- | - | - | - | - | - | 181,900 | 1,819 | - | - | 18,026,419 | - | - | 18,028,238 | ||||||||||||||||||||||||||||||||||||||||||||||
|
Conversion
of Series A, B, and C
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Preferred
Stock to Common Stock
|
(2,342,118 | ) | (2,342 | ) | (481,644 | ) | (482 | ) | (2,914,771 | ) | (2,915 | ) | 304,647 | 3,047 | - | - | 2,692 | - | - | - | ||||||||||||||||||||||||||||||||||||||||
|
Exercise
of Common Stock warrants
|
- | - | - | - | - | - | 206 | 2 | - | - | 20,145 | - | - | 20,147 | ||||||||||||||||||||||||||||||||||||||||||||||
|
Amortization
of deferred compensation
|
- | - | - | - | - | - | - | - | - | - | 26,093 | - | - | 26,093 | ||||||||||||||||||||||||||||||||||||||||||||||
|
Net
loss
|
- | - | - | - | - | - | - | - | - | - | - | (10,036,090 | ) | - | (10,036,090 | ) | ||||||||||||||||||||||||||||||||||||||||||||
|
Total
comprehensive income (loss)
|
$ | (10,036,090 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
BALANCE
AT DECEMBER 31, 1996
|
$ | - | - | $ | - | - | $ | - | 643,310 | $ | 6,433 | $ | - | $ | - | $ | 49,454,334 | $ | (35,368,878 | ) | $ | - | $ | 14,091,889 | ||||||||||||||||||||||||||||||||||||
|
Sale
of Common Stock (2.92 per share, net)
|
- | - | - | - | - | - | 286,767 | 2,868 | - | - | 8,377,583 | - | - | 8,380,451 | ||||||||||||||||||||||||||||||||||||||||||||||
|
Warrants
exchanged for Common Stock
|
- | - | - | - | - | - | 64,364 | 644 | - | - | (644 | ) | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||
|
Exercise
of Common Stock options
|
- | - | - | - | - | - | 5,067 | 50 | - | - | 168,541 | - | - | 168,591 | ||||||||||||||||||||||||||||||||||||||||||||||
|
Exercise
of Common Stock warrants
|
- | - | - | - | - | - | 953 | 10 | - | - | 93,299 | - | - | 93,309 | ||||||||||||||||||||||||||||||||||||||||||||||
|
Issuance
of Common Stock for consulting
|
- | - | - | - | - | - | 2,500 | 25 | - | - | 99,975 | - | - | 100,000 | ||||||||||||||||||||||||||||||||||||||||||||||
|
services
(4.00 per share, net)
|
62,579 | - | - | 62,579 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Amortization
of deferred compensation
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Net
loss
|
- | - | - | - | - | - | - | - | - | - | - | (10,151,041 | ) | - | (10,151,041 | ) | ||||||||||||||||||||||||||||||||||||||||||||
|
Foreign
currency translation adjustment
|
- | - | - | - | - | - | - | - | - | - | - | - | 1,333 | 1,333 | ||||||||||||||||||||||||||||||||||||||||||||||
|
Total
comprehensive income (loss)
|
$ | (10,149,708 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
BALANCE
AT DECEMBER 31, 1997
|
- | $ | - | - | $ | - | $ | - | 1,002,961 | $ | 10,030 | $ | - | $ | - | $ | 58,255,667 | $ | (45,519,919 | ) | $ | 1,333 | $ | 12,747,111 | ||||||||||||||||||||||||||||||||||||
|
Repurchase
of Common Stock
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
for
treasury (2,246,131 shares)
|
- | - | - | - | - | - | - | - | (100 | ) | - | - | - | - | (100 | ) | ||||||||||||||||||||||||||||||||||||||||||||
|
Net
loss
|
- | - | - | - | - | - | - | - | - | - | - | (10,654,597 | ) | - | (10,654,597 | ) | ||||||||||||||||||||||||||||||||||||||||||||
|
Foreign
currency translation adjustment
|
- | - | - | - | - | - | - | - | - | - | - | - | 55,891 | 55,891 | ||||||||||||||||||||||||||||||||||||||||||||||
|
Total
comprehensive income (loss)
|
$ | (10,598,706 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
BALANCE
AT DECEMBER 31, 1998
|
- | $ | - | - | $ | - | $ | - | 1,002,961 | $ | 10,030 | $ | (100 | ) | $ | - | $ | 58,255,667 | $ | (56,174,516 | ) | $ | 57,224 | $ | 2,148,305 | |||||||||||||||||||||||||||||||||||
|
Sale
of Common Stock (.05 per share, net)
|
- | - | - | - | - | - | 1,400,000 | 14,000 | - | - | 686,000 | - | - | 700,000 | ||||||||||||||||||||||||||||||||||||||||||||||
|
Net
loss
|
- | - | - | - | - | - | - | - | - | - | - | (1,253,696 | ) | - | (1,253,696 | ) | ||||||||||||||||||||||||||||||||||||||||||||
|
Foreign
currency translation adjustment
|
- | - | - | - | - | - | - | - | - | - | - | - | (43,020 | ) | (43,020 | ) | ||||||||||||||||||||||||||||||||||||||||||||
|
Total
comprehensive income (loss)
|
$ | (1,296,716 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
BALANCE
AT DECEMBER 31, 1999
|
- | $ | - | - | $ | - | $ | - | 2,402,961 | $ | 24,030 | $ | (100 | ) | $ | - | $ | 58,941,667 | $ | (57,428,212 | ) | $ | 14,204 | $ | 1,551,589 | |||||||||||||||||||||||||||||||||||
|
Issuance
of right to purchase Common Stock
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
in
lieu of compensation (0.45 per share)
|
- | - | - | - | - | - | - | - | - | - | 198,000 | - | - | 198,000 | ||||||||||||||||||||||||||||||||||||||||||||||
|
Sale
of common stock (0.05 per share)
|
- | - | - | - | - | - | 50,000 | 500 | - | - | 24,500 | - | 25,000 | |||||||||||||||||||||||||||||||||||||||||||||||
|
Sale
of common stock (0.50 per share)
|
- | - | - | - | - | - | 300,000 | 3,000 | - | - | 1,497,000 | - | - | 1,500,000 | ||||||||||||||||||||||||||||||||||||||||||||||
|
Memorandum
entry to record as expense for
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
honorary
services rendered by a shareholder
|
- | - | - | - | - | - | - | - | - | - | 100,000 | - | - | 100,000 | ||||||||||||||||||||||||||||||||||||||||||||||
|
Repurchase
of Common Stock
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
for
treasury (60,000 shares)
|
- | - | - | - | - | - | - | - | (3,000 | ) | - | - | - | - | (3,000 | ) | ||||||||||||||||||||||||||||||||||||||||||||
|
Net
loss
|
- | - | - | - | - | - | - | - | - | - | - | (1,522,233 | ) | - | (1,522,233 | ) | ||||||||||||||||||||||||||||||||||||||||||||
|
Foreign
currency translation adjustment
|
- | - | - | - | - | - | - | - | - | - | - | - | (14,204 | ) | (14,204 | ) | ||||||||||||||||||||||||||||||||||||||||||||
|
Total
comprehensive income (loss)
|
$ | (1,522,233 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
BALANCE
AT DECEMBER 31, 2000
|
- | $ | - | - | $ | - | $ | - | 2,752,961 | $ | 27,530 | $ | (3,100 | ) | $ | - | $ | 60,761,167 | $ | (58,950,445 | ) | $ | 1,835,152 | |||||||||||||||||||||||||||||||||||||
|
Memorandum
entry to record as expense for
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
honorary
services rendered by a shareholder
|
- | - | - | - | - | - | - | - | - | - | 100,000 | - | 100,000 | |||||||||||||||||||||||||||||||||||||||||||||||
|
Net
loss
|
- | - | - | - | - | - | - | - | - | - | - | (2,238,687 | ) | - | (2,238,687 | ) | ||||||||||||||||||||||||||||||||||||||||||||
|
Total
comprehensive income (loss)
|
$ | (2,238,687 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
BALANCE
AT DECEMBER 31, 2001
|
- | $ | - | - | $ | - | - | $ | - | 2,752,961 | $ | 27,530 | $ | (3,100 | ) | $ | - | $ | 60,861,167 | $ | (61,189,132 | ) | $ | - | $ | (303,535 | ) | |||||||||||||||||||||||||||||||||
|
Exercise
of Common Stock options
|
- | - | - | - | - | - | 6,275 | 63 | - | - | 15,623 | - | 15,686 | |||||||||||||||||||||||||||||||||||||||||||||||
|
Memorandum
entry to record as expense for
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
honorary
services rendered by a shareholder
|
- | - | - | - | - | - | - | - | - | - | 100,000 | - | - | 100,000 | ||||||||||||||||||||||||||||||||||||||||||||||
|
Net
loss
|
- | - | - | - | - | - | - | - | - | - | - | (2,888,789 | ) | - | (2,888,789 | ) | ||||||||||||||||||||||||||||||||||||||||||||
|
Total
comprehensive income (loss)
|
$ | (2,888,789 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
BALANCE
AT DECEMBER 31, 2002
|
- | $ | - | - | $ | - | - | $ | - | 2,759,235 | $ | 27,593 | $ | (3,100 | ) | $ | - | $ | 60,976,790 | $ | (64,077,921 | ) | $ | - | $ | (3,076,638 | ) | |||||||||||||||||||||||||||||||||
|
Issuance
of Common Stock for consulting
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
services
(0.30 per share, net)
|
- | - | - | - | - | - | 5,000 | 50 | - | 14,950 | - | - | 15,000 | |||||||||||||||||||||||||||||||||||||||||||||||
|
Issuance
of Common Stock for consulting
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
services
(0.32 per share, net)
|
- | - | - | - | - | - | 46,875 | 468 | - | - | 149,532 | - | - | 150,000 | ||||||||||||||||||||||||||||||||||||||||||||||
|
Issuance
of Common Stock for consulting
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
services
(0.11 per share, net)
|
- | - | - | - | - | - | 27,500 | 275 | - | - | 29,975 | - | - | 30,250 | ||||||||||||||||||||||||||||||||||||||||||||||
|
Issuance
of Common Stock as incentive for
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
funding
by issue of notes (0.25 per share net)
|
- | - | - | - | - | - | 318,750 | 3,188 | - | - | 793,687 | - | - | 796,875 | ||||||||||||||||||||||||||||||||||||||||||||||
|
Common
Stock (410,358 shares) to be issued
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
for
interest accrued on stockholder's advances
|
- | - | - | - | - | - | - | - | - | 410 | 101,976 | - | - | 102,386 | ||||||||||||||||||||||||||||||||||||||||||||||
|
Memorandum
entry to record as expense for
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
honorary
services rendered by a shareholder
|
- | - | - | - | - | - | - | - | - | - | 100,000 | - | - | 100,000 | ||||||||||||||||||||||||||||||||||||||||||||||
|
Net
loss
|
- | - | - | - | - | - | - | - | - | - | - | (2,164,698 | ) | - | (2,164,698 | ) | ||||||||||||||||||||||||||||||||||||||||||||
|
Total
comprehensive income (loss)
|
$ | (2,164,698 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
BALANCE
AT DECEMBER 31, 2003
|
- | $ | - | - | $ | - | - | $ | - | 3,157,360 | $ | 31,574 | $ | (3,100 | ) | $ | 410 | $ | 62,166,910 | $ | (66,242,619 | ) | $ | - | $ | (4,046,825 | ) | |||||||||||||||||||||||||||||||||
|
Issuance
of Common Stock as incentive for
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
funding
by issue of notes (0.25 per share net)
|
- | - | - | - | - | - | 181,250 | 1,813 | - | - | 451,312 | - | - | 453,125 | ||||||||||||||||||||||||||||||||||||||||||||||
|
Issuance
of Common Stock as incentive for
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
funding
by issue of notes (0.31 per share net)
|
- | - | - | - | - | - | 189,500 | 1,895 | - | - | 585,555 | - | - | 587,450 | ||||||||||||||||||||||||||||||||||||||||||||||
|
Sale
of Common Stock (0.10 per share)
|
- | - | - | - | - | - | 122,400 | 1,224 | - | - | 160,601 | - | - | 161,825 | ||||||||||||||||||||||||||||||||||||||||||||||
|
Common
Stock (286,421 shares) to be issued
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
for
interest accrued on stockholder's advances
|
- | - | - | - | - | - | - | - | - | 287 | 64,456 | - | - | 64,743 | ||||||||||||||||||||||||||||||||||||||||||||||
|
Common
Stock (2,500,000 shares) to be issued
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
for
payment penalty on notes payable
|
- | - | - | - | - | - | - | - | - | 2,500 | 347,500 | - | - | 350,000 | ||||||||||||||||||||||||||||||||||||||||||||||
|
Memorandum
entry to record as expense for
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
honorary
services rendered by a shareholder
|
- | - | - | - | - | - | - | - | - | - | 100,000 | - | - | 100,000 | ||||||||||||||||||||||||||||||||||||||||||||||
|
Net
loss
|
- | - | - | - | - | - | - | - | - | - | - | (3,846,517 | ) | - | (3,846,517 | ) | ||||||||||||||||||||||||||||||||||||||||||||
|
Total
comprehensive income (loss)
|
$ | (3,846,517 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
BALANCE
AT DECEMBER 31, 2004
|
- | $ | - | - | $ | - | - | $ | - | 3,650,510 | $ | 36,506 | $ | (3,100 | ) | $ | 3,197 | $ | 63,876,334 | $ | (70,089,136 | ) | $ | - | $ | (6,176,199 | ) | |||||||||||||||||||||||||||||||||
|
Sale
of Common Stock ( for not less than $0.10 per share)
|
- | - | - | - | - | - | 324,033 | 3,240 | - | - | 382,178 | - | - | 385,418 | ||||||||||||||||||||||||||||||||||||||||||||||
|
Common
Stock (2,310,300 shares) to be issued
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
for
interest accrued on stockholder's advances
|
- | - | - | - | - | - | - | - | 2,310 | 83,430 | - | - | 85,740 | |||||||||||||||||||||||||||||||||||||||||||||||
|
Issue
of shares of Common Stock for payment
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
penalty
on notes payable
|
- | - | - | - | - | - | 89,750 | 897 | - | - | 17,052 | - | - | 17,949 | ||||||||||||||||||||||||||||||||||||||||||||||
|
Issue
of shares of Common Stock for payment
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
penalty
on notes payable
|
- | - | - | - | - | - | 250,000 | 2,500 | - | (2,500 | ) | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||
|
Memorandum
entry to record as expense for
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
honorary
services rendered by a shareholder
|
- | - | - | - | - | - | - | - | - | - | 100,000 | - | - | 100,000 | ||||||||||||||||||||||||||||||||||||||||||||||
|
Net
loss
|
- | - | - | - | - | - | - | - | - | - | - | (1,926,292 | ) | - | (1,926,292 | ) | ||||||||||||||||||||||||||||||||||||||||||||
|
Total
comprehensive income (loss)
|
$ | (1,926,292 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
BALANCE
AT DECEMBER 31, 2005
|
- | $ | - | - | $ | - | - | $ | - | 4,314,294 | $ | 43,143 | $ | (3,100 | ) | $ | 3,007 | $ | 64,458,994 | $ | (72,015,428 | ) | $ | - | $ | (7,513,384 | ) | |||||||||||||||||||||||||||||||||
|
Common
Stock (841,438 shares) to be issued
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
for
interest accrued on stockholder's advances
|
- | - | - | - | - | - | - | - | - | 842 | 24,401 | - | - | 25,243 | ||||||||||||||||||||||||||||||||||||||||||||||
|
Options
issued for consulting services
|
- | - | - | - | - | - | - | - | - | - | 47,512 | - | - | 47,512 | ||||||||||||||||||||||||||||||||||||||||||||||
|
Memorandum
entry to record as expense for
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
honorary
services rendered by a shareholder
|
- | - | - | - | - | - | - | - | - | - | 25,000 | - | - | 25,000 | ||||||||||||||||||||||||||||||||||||||||||||||
|
Debt
converted to stock
|
12,300,000 | 12,300 | - | - | - | - | 999,455 | 9,995 | - | - | 1,707,433 | - | - | 1,729,728 | ||||||||||||||||||||||||||||||||||||||||||||||
|
Net
loss
|
- | - | - | - | - | - | - | - | - | - | - | (809,091 | ) | - | (809,091 | ) | ||||||||||||||||||||||||||||||||||||||||||||
|
Total
comprehensive income (loss)
|
$ | (809,091 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
BALANCE
AT DECEMBER 31, 2006
|
12,300,000 | 12,300 | - | - | - | - | 5,313,749 | 53,138 | (3,100 | ) | 3,849 | 66,263,340 | (72,824,519 | ) | - | (6,494,992 | ) | |||||||||||||||||||||||||||||||||||||||||||
|
Issuance
of Common Stock for cash
|
100,000 | 1,000 | 99,000 | 100,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Issuance
of Common Stock issued for conversion of debt
|
- | - | - | - | - | - | 100,000 | 1,000 | - | - | 99,000 | - | - | 100,000 | ||||||||||||||||||||||||||||||||||||||||||||||
|
Net
loss
|
- | - | - | - | - | - | - | - | - | - | - | (1,276,873 | ) | - | (1,276,873 | ) | ||||||||||||||||||||||||||||||||||||||||||||
|
Total
comprehensive income (loss)
|
$ | (1,276,873 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
BALANCE
AT DECEMBER 31, 2007
|
12,300,000 | $ | 12,300 | - | $ | - | - | $ | - | 5,513,749 | $ | 55,138 | $ | (3,100 | ) | $ | 3,849 | $ | 66,461,340 | $ | (74,101,392 | ) | $ | - | $ | (7,571,865 | ) | |||||||||||||||||||||||||||||||||
|
10
for 1 Reverse split of Common Stock
|
- | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
10
for 1 Reverse split of Common Stock - Rounding
differences
|
51 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Issuance
of Common Stock for consulting services
|
- | - | - | - | - | - | 19,179,700 | 191,797 | - | - | 8,375,212 | 8,567,009 | ||||||||||||||||||||||||||||||||||||||||||||||||
|
Issuance
of Common Stock for subscriptions 100,000 shares for
$100,000
|
- | - | - | - | - | - | 100,000 | 1,000 | - | - | 99,000 | 100,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
|
Net
loss
|
- | - | - | - | - | - | - | - | (11,091,561 | ) | (11,091,561 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
|
Total
comprehensive income (loss)
|
$ | (11,091,561 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
BALANCE
AT DECEMBER 31, 2008
|
12,300,000 | $ | 12,300 | - | $ | - | - | $ | - | 24,793,500 | $ | 247,935 | $ | (3,100 | ) | $ | 3,849 | $ | 74,935,552 | $ | (85,192,953 | ) | $ | - | $ | (9,996,417 | ) | |||||||||||||||||||||||||||||||||
|
Issuance
of Common Stock foracquistion - March 2009
|
- | - | - | - | - | - | 3,693,333 | 36,933 | 73,067 | 110,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||
|
Issuance
of Common Stock for consulting services - June 2009
|
- | - | - | - | - | - | 10,000,000 | 100,000 | 1,047,050 | 1,147,050 | ||||||||||||||||||||||||||||||||||||||||||||||||||
|
Issuance
of Common Stock for consulting services - June 2009
|
- | - | - | - | - | - | 400,000 | 4,000 | - | 4,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||
|
Cancellation
of Common Stockissued for consulting services - July 2009
|
- | - | - | - | - | - | (2,525,000 | ) | (25,250 | ) | - | (25,250 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
|
Issuance
of Common Stock for consulting services -
December 2009
|
- | - | - | - | - | - | 4,196,866 | 41,969 | 146,890 | 188,859 | ||||||||||||||||||||||||||||||||||||||||||||||||||
|
Net
loss
|
- | - | - | - | - | - | (935,301 | ) | (935,301 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
|
Total
comprehensive income (loss)
|
$ | (935,301 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
BALANCE
AT DECEMBER 31, 2009
|
12,300,000 | $ | 12,300 | - | $ | - | - | $ | - | 40,558,699 | $ | 405,587 | $ | (3,100 | ) | $ | 3,849 | $ | 76,202,559 | $ | (86,128,254 | ) | $ | - | $ | (9,507,059 | ) | |||||||||||||||||||||||||||||||||
BIOFIELD
CORP. ( A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
Period October 16,
|
||||||||||||
|
1987 (Date of
|
||||||||||||
|
Year Ended
|
Inception) Through
|
|||||||||||
|
December 31,
|
December 31,
|
|||||||||||
|
2009
|
2008
|
2009
|
||||||||||
|
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||||
|
Net
loss
|
$ | (935,301 | ) | $ | (11,091,561 | ) | $ | (86,128,254 | ) | |||
|
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
||||||||||||
|
Depreciation
and amortization
|
1,389 | 1,390 | 2,763,985 | |||||||||
|
Amortization
of premiums on short-term investments
|
- | - | 156,692 | |||||||||
|
Amortization
of deferred financing costs
|
- | - | 2,129,643 | |||||||||
|
Loss
on disposal of property and equipment
|
- | - | 194,102 | |||||||||
|
Loss
on license and settlement agreements
|
- | - | 49,026 | |||||||||
|
Loss
on abandonment of patent applications
|
- | - | 303,234 | |||||||||
|
Loss
on inventory write-down
|
- | - | 693,500 | |||||||||
|
Impairment
of intangible assets
|
- | - | 194,268 | |||||||||
|
Vendor
settlements
|
- | - | (77,257 | ) | ||||||||
|
Noncash
compensation
|
- | - | 3,533,451 | |||||||||
|
Gain
from disposition of fixed assets
|
- | - | (159,473 | ) | ||||||||
|
Interest
paid in common stock
|
- | - | 575,260 | |||||||||
|
Commisions
and discounts on sale of common stock
|
- | - | 96,919 | |||||||||
|
Loan
repayment default payable in shares of common stock
|
- | - | 350,000 | |||||||||
|
Consultancy
fees paid in options
|
- | - | 242,762 | |||||||||
|
Issuances
of common stock for outstanding stock obligations
|
- | 8,667,010 | 8,667,010 | |||||||||
|
Changes
in assets and liabilities:
|
- | |||||||||||
|
Notes
receivable
|
- | 11,004 | 11,004 | |||||||||
|
Inventories
|
- | - | (693,500 | ) | ||||||||
|
Prepaids
|
- | 9,000 | (131,816 | ) | ||||||||
|
Due
to affiliate
|
- | - | 337,921 | |||||||||
|
Accounts
payable and accrued liabilities
|
435,175 | 1,909,761 | 5,288,673 | |||||||||
|
Net
cash used in operating activities
|
(498,737 | ) | (493,396 | ) | (61,602,850 | ) | ||||||
|
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||||
|
Acquisitions
of property and equipment
|
- | - | (2,610,691 | ) | ||||||||
|
Costs
incurred for patents and patent applications
|
- | - | (782,527 | ) | ||||||||
|
Proceeds
from sale of property and equipment
|
- | - | 294,748 | |||||||||
|
Purchases
of short-term investments
|
- | - | (26,476,638 | ) | ||||||||
|
Proceeds
from sale and maturity of short-term investments
|
- | - | 26,406,378 | |||||||||
|
Net
cash used in investing activities
|
- | - | (3,168,730 | ) | ||||||||
|
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||||
|
Repayments
of capitalized lease obligations
|
- | - | (82,234 | ) | ||||||||
|
Proceeds
from issuance of preferred stock - net
|
- | - | 22,341,892 | |||||||||
|
Proceeds
from common stock subscription
|
110,000 | - | 35,313,258 | |||||||||
|
Proceeds
from exercise of common stock
|
70,000 | - | 368,546 | |||||||||
|
Proceeds
from issuance of notes payable
|
- | 187,058 | 1,676,058 | |||||||||
|
Proceeds
from borrowings on line of credit
|
- | 76,740 | 76,740 | |||||||||
|
Notes
financing costs
|
80,839 | - | 342,916 | |||||||||
|
Advances
from stockholder and related party
|
- | 216,270 | 3,493,156 | |||||||||
|
Repayments
of advances from stockholder
|
- | - | (1,874,728 | ) | ||||||||
|
Repurchases
of common stock held in treasury
|
- | - | (3,100 | ) | ||||||||
|
Proceeds
from notes payable issued to stockholder and related party
|
237,898 | - | 2,784,431 | |||||||||
|
Net
cash provided by financing activities
|
498,737 | 480,068 | 64,436,935 | |||||||||
|
NET
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
- | (13,328 | ) | 100,530 | ||||||||
|
EFFECT
OF EXCHANGE RATE CHANGES
|
- | - | (111,497 | ) | ||||||||
|
BEGINNING
OF PERIOD
|
- | 13,328 | - | |||||||||
|
END
OF PERIOD
|
$ | - | $ | - | $ | (10,967 | ) | |||||
|
Supplementary
disclosure of cash flow information:
|
||||||||||||
|
Cash
paid for interest
|
$ | - | $ | - | $ | - | ||||||
|
Cash
paid for taxes
|
$ | - | $ | - | $ | - | ||||||
See notes
to consolidated financial statements
BIOFIELD
CORP.
(A
Development Stage Company)
STATEMENTS
OF CASH FLOWS (UNAUDITED), (continued)
|
Period October 16,
|
||||||||||||
|
Year Ended
|
1987 (Date of
|
|||||||||||
|
December 31,
|
Inception) Through
|
|||||||||||
|
2009
|
2008
|
December 31, 2009
|
||||||||||
|
SUPPLEMENTAL
DISCLOSURES OF CASH FLOW INFORMATION:
|
||||||||||||
|
Cash
paid for interest
|
$ | - | $ | - | $ | 857,003 | ||||||
|
Cash
paid for taxes
|
$ | - | $ | - | $ | - | ||||||
|
SUPPLEMENTAL
SCHEDULE FOR NONCASH INVESTING AND FINANCING ACTIVITIES:
|
||||||||||||
|
Common
stock shares issued for penalty for non-payment of notes payable on
maturity
|
$ | - | $ | - | $ | 17,949 | ||||||
|
Repayment
of debt by shareholders
|
$ | - | $ | - | $ | 1,200,000 | ||||||
|
Issuance
of common stock for accrued liabilities
|
$ | 5,426,868 | $ | - | $ | 1,330,002 | ||||||
See notes
to financial statements.
BIOFIELD
CORP.
(A
Development Stage Company)
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE
1 – ORGANIZATION
Organization
Biofield
Corp. (the “Company”) has developed a highly proprietary system to assist in
detecting breast cancer. The procedure is non-invasive and radiation- and
compression-free. The procedure produces objective results within 20 minutes
without the need for interpretation by a radiologist. The Company’s
breast cancer diagnostic device, the Biofield Diagnostic System (“BDS”), employs
single-use sensors to measure and analyze changes in cellular electrical charge
distributions associated with the development of epithelial cancers, such as
breast cancer. The new prototype of the device is portable and the
size of a laptop computer. The sensors are similar in size to an EEG/
EKG sensor. The current system is a final complete product and has received CE
mark certification from the European regulatory authorities. The CE mark
certification, which permits companies to market in European
Union member countries, was received in connection with our
former facility in Alpharetta, Georgia. The Company is considering
other facilities which have already secured CE Mark
certification. The Company currently operates in the biomedical
device market segment. The consolidated financial statements include
the accounts of the Company and its wholly-owned subsidiaries.
Through
March 31, 2006, the Company’s focus and resources were primarily directed
towards securing approval of the BDS from the U.S. Food and Drug Administration
(“U.S. FDA”) to distribute in the U.S. The Company continued to incur
significant losses associated with these activities and generated little or no
sales. Subsequent to March 31, 2006, The MacKay Group (“MKG”) took
control of the Company’s management and operations (the “MKG Acquisition”).
Post-MKG Acquisition, the Company changed its primary focus towards penetrating
foreign markets with significant populations of women, where MKG had significant
industry and government contacts and relationships, where the need for the BDS
appeared compelling, and where the regulatory hurdles were not as burdensome.
The Company has secured or is working to secure significant government,
distribution, research and development and manufacture networks in the People’s
Republic of China, India, the Philippines and other parts of Asia, Mexico, Latin
America, the Caribbean, Africa, Europe, and the Middle East. The
Company will continue its efforts to secure U.S. FDA approval. The Company
believes that the government and industry relationships, the possible
significant clinical data and research and development (especially as it may
pertain to screening and other cancers), and revenues it secures abroad will
facilitate its efforts to secure U.S. FDA approval in the future.
From
April 1, 2006 to December 31, 2006, the Company’s time, energies, and resources
were focused towards transitioning the Company from prior management to
MKG. This included the tasks of moving the Company’s facilities,
inventory, and operations from Alpharetta, Georgia to Philadelphia, Pennsylvania
and transferring and reorganizing voluminous amounts of clinical and
technological data, and financial records. The Company has since
completed the move to a facility in King of Prussia,
Pennsylvania. With the transfer of vital financial and regulatory
records, the Company diligently proceeded during 2007 to bring all of its
Security and Exchange Commission (“SEC”) filings current. During the transition,
MKG successfully reduced approximately $2 million of the Company’s debt by
converting it to stock, and continues to work toward further debt
reduction.
In 2008,
the Company recommitted its efforts to secure CE mark certification for BDS,
recruited a new management team, opened an office in Hong Kong, in conjunction
with the Company’s controlling stockholder, MKG, opened a sales office in
Bangalore, India, moved its US offices from King of Prussia, Pennsylvania to
Philadelphia, Pennsylvania, and embarked on a strategy to assemble a portfolio
of medical technology products that can be distributed using
the same sales channels the Company intends to use to market the
BDS.
The
Company, as of December 31, 2009, is still considered to be in the development
stage.
The
financial statements are presented on the basis that the Company is a going
concern, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business over a reasonable length of time.
The financial statements do not include any adjustments that might result from
the outcome of these uncertainties. The Company has incurred
operating losses since its inception. This condition raises substantial doubt as
to the Company’s ability to continue as a going concern as such continuance is
dependent upon the Company’s ability to raise sufficient capital. Management’s
plans regarding these matters, with the objective of improving liquidity and
sustaining profitability in future years encompass the following:
|
|
o
|
Move
from a development stage entity to an operating
entity;
|
|
|
o
|
Settling
legacy outstanding obligations;
|
|
|
o
|
Continued
review of all expenditures in order to minimize
costs;
|
|
|
o
|
Raise
additional working capital as necessary;
and
|
|
|
o
|
Generate
revenue from foreign markets such as China and India where MKG has
significant government and industrial
relationships.
|
In the
absence of additional financing the Company may be unable to satisfy past due
obligations. Management believes that the actions presently being taken provide
the opportunity to improve liquidity and sustain profitability. However, there
are no assurances that management’s plans will be achieved. The accompanying
consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty. Ultimately, the Company must
achieve profitable operations if it is to be a viable entity.
The
Company has never declared or paid any cash dividends on capital stock and do
not intend to pay any cash dividends in the foreseeable future.
NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principals
of Consolidation
The
consolidated financial statements include the accounts of the Company and its
wholly owned subsidiaries. All material inter-company transactions and balances
have been eliminated in consolidation.
Use
of Estimates
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statement and the reported amounts of revenues and
expenses during the reporting period. Estimates that are critical to the
accompanying financial statements arise from the determination of the fair value
of the Company’s investment. Because such determination involves subjective
judgment, it is at least reasonably possible that the Company’s estimates could
change in the near term with respect to this matter.
Cash
and Cash Equivalents
The
Company considers all highly liquid debt securities purchased with original or
remaining maturities of three months or less to be cash equivalents. The
carrying value of cash equivalents approximates fair value.
Inventory
and Inventory Valuation Reserve
Inventories
are stated at the lower of cost or market, determined by the first-in, first-out
(FIFO) method, including provisions for obsolescence. Obsolescence is
based upon assumptions concerning future demand, market conditions and
anticipated timing of the release of next generation products. If
actual market conditions or future demand are less favorable than those
projected by management, or if next generation products are released earlier
than anticipated, additional inventory write-downs may be required.
Fair
Value of Financial Instruments
Cash and
cash equivalents, prepaid expenses and other current assets, accounts payable
and accrued expenses, as reflected in the consolidated financial statements,
approximate fair value because of the short-term maturity of these instruments.
Fair value estimates are made at a specific point in time, based on relevant
market information and information about the financial instrument. These
estimates are subjective in nature and involve uncertainties and matters of
significant judgment and therefore cannot be determined with precision. Changes
in assumptions could significantly affect the estimates.
Property
and Equipment
Property
and equipment are stated at cost, less accumulated depreciation and
amortization. Depreciation and amortization are computed using
straight-line methods over the estimated useful lives of the assets, principally
three to five years, or the term of the lease, if shorter, for leasehold
improvements. Repairs and maintenance are expensed as
incurred.
Patents
and Other Intangible Assets
The costs
of patents are amortized on a straight-line basis over their estimated economic
life, but not exceeding 17 years. For the years ended December 31, 2008 and
2007, we have no intangible assts.
Revenue
Recognition
The
Company has adopted and follows the guidance provided in the SEC’s Staff
Accounting Bulletin (“SAB”) No. 104, which provides guidance on the recognition,
presentation and disclosure of revenue in the financial statements.
Income
Taxes
The
Company accounts for income taxes under Statement of Financial Account Standards
(“SFAS”) No. 109, Accounting for Income Taxes (“SFAS No. 109”). Deferred
income tax assets and liabilities are determined based upon differences between
financial reporting and tax bases of assets and liabilities and are measured
using the enacted tax rates and laws that will be in effect when the differences
are expected to reverse. Due to the net loss incurred in all periods, there is
no provision for income taxes provided as a full valuation allowance has been
established.
Derivative Financial
Instruments
The
Company does not use derivative instruments to hedge exposures to cash flow,
market, or foreign currency risks.
The
Company reviews the terms of convertible debt and equity instruments that are
issued to determine whether there are embedded derivative instruments, including
the embedded conversion option, that are required to be bifurcated and accounted
for separately as a derivative financial instrument. When the risks and rewards
of any embedded derivative instrument are not “clearly and closely” related to
the risks and rewards of the host instrument, the embedded derivative instrument
is generally required to be bifurcated and accounted for
separately.
The
conversion option has the risks and rewards associated with an equity
instrument, not a debt instrument, because its value is related to the value of
our common stock. Nonetheless, if the host instrument is considered to be
“conventional convertible debt” (or “conventional convertible preferred stock”),
bifurcation of the embedded conversion option is generally not required.
However, if the instrument is not considered to be conventional convertible debt
(or conventional convertible preferred stock), bifurcation of the embedded
conversion option may be required in certain circumstances. Generally, where the
ability to physical or net-share settle the conversion option is deemed to be
not within the control of the Company, the embedded conversion option is
required to be bifurcated and accounted for as a derivative financial instrument
liability. The Company currently does not have any such instruments requiring
classification as a liability.
In
connection with the sale of convertible debt and equity instruments, the Company
may also issue freestanding options or warrants. Additionally, the Company may
issue options or warrants to non-employees in connection with consulting or
other services they provide. Although the terms of the options and warrants may
not provide for net-cash settlement, in certain circumstances, physical or
net-share settlement may be deemed to not be within the control of the Company
and, accordingly, the Company may be required to account for these freestanding
options and warrants as derivative financial instrument liabilities, rather than
as equity. The Company currently does not have any such instruments requiring
classification as a liability.
Derivative
financial instruments are required to be initially measured at their fair value.
For derivative financial instruments that shall be accounted for as liabilities,
the derivative instrument is initially recorded at its fair value and is then
re-valued at each reporting date, with changes in the fair value reported as
charges or credits to income.
If the
embedded derivative instrument is to be bifurcated and accounted for as a
liability, the total proceeds received will be first allocated to the fair value
of the bifurcated derivative instrument. If freestanding options or warrants
were also issued and are to be accounted for as derivative instrument
liabilities (rather than as equity), the proceeds are next allocated to the fair
value of those instruments. The remaining proceeds, if any, are then allocated
to the convertible instrument itself, usually resulting in that instrument being
recorded at a discount from its face amount. In circumstances where a
freestanding derivative instrument is to be accounted for as an equity
instrument, the proceeds are allocated between the convertible instrument and
the derivative equity instrument, based on their relative fair
values.
During
2009 and 2008 none of the above mentioned convertible debt and equity
instruments were considered to be derivative instruments.
Warrants
The
Company issues warrants to purchase the Company’s common stock in conjunction
with debt and certain preferred stock issues. Warrants are accounted for in
accordance with the provisions of Accounting Principles Bulletin (“APB”) No. 14,
“Accounting for Convertible Debt and Debt Issued with Stock Purchase Warrants”
(“APB No.14”) and Emerging Issues Task Force (“EITF”) No. 00-19, “Accounting for
Derivative Financial Instruments Accounting for Derivative Financial Instruments
Indexed to or Potentially Settled in Indexed to or Potentially Settled in a
Company’s Own Stock” (“EITF 00-19”). The fair value of warrants granted in
conjunction with debt and equity issuances is estimated on the grant date using
the Black-Scholes option pricing model. The value of warrants is separated from
the total consideration of each issue and included as an element of additional
paid-in capital.
Net
Loss Per Share
Basic and
diluted net losses per common share are presented in accordance with SFAS
No.128, “Earning Per Share,” for all periods presented. Stock subscriptions,
options and warrants have been excluded from the calculation of the diluted loss
per share for the years ended December 31, 2008 and 2007, because all such
securities were anti-dilutive. The net loss per share is calculated by dividing
the net loss by the weighted average number of shares outstanding during the
periods.
Reclassification
Certain
amounts in the prior year consolidated financial statements have been
reclassified for comparative purposes to conform to the presentation in the
current year consolidated financial statements.
Impairment
of Long-Lived Assets
The
Company has adopted SFAS No. 144 “Impairment of Long-Lived Assets”, which
requires that long-lived assets and certain identifiable intangibles held and
used by the Company be reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. Events relating to recoverability may include significant
unfavorable changes in business conditions, recurring losses, or a forecasted
inability to achieve break-even operating results over an extended
period. The Company evaluates the recoverability of long-lived assets
based upon forecasted undiscounted cash flows. Should impairment in
value be indicated, the carrying value of intangible assets will be adjusted,
based on estimates of future discounted cash flows resulting from the use and
ultimate disposition of the asset. SFAS No. 144 also requires that assets to be
disposed of be reported at the lower of the carrying amount or the fair value
less costs to sell.
Research and
Development
The
Company accounts for research and development costs in accordance with the SFAS
No. 2, “Accounting for Research and Development Costs”. Accordingly, internal
research and development costs are expensed as incurred. Third-party
research and developments costs are expensed when the contracted work has been
performed or as milestone results have been
achieved. Company-sponsored research and development costs related to
both present and future products are expensed in the period
incurred. Total expenditures on research and product development
incurred for the period from October 16, 1987 (date of inception) to December
31, 2008 were $40,481,889. In 2008 and 2007 there were no additional
expenditures on research and product development.
Comprehensive
Income
SFAS No.
130, “Reporting Comprehensive Income”, establishes standards for reporting and
displaying of comprehensive income, its components and accumulated
balances. Comprehensive income is defined to include all changes in
equity, except those resulting from investments by owners and distributions to
owners. Among other disclosures, SFAS No. 130 requires that all items that are
required to be recognized under current accounting standards as components of
comprehensive income be reported in a financial statement that is displayed with
the same prominence as other financial statements.
Accounting
Standards Updates
In
January 2010, the FASB has published ASU 2010-06 “Fair Value Measurements and
Disclosures (Topic 820): - Improving Disclosures about Fair Value Measurements.
ASU No. 2010-06 clarifies improve disclosure requirement related to fair
value measurements and disclosures – Overall Subtopic (Subtopic 820-10) of the
FASB Accounting Standards Codification. The new disclosures and clarifications
of existing disclosures are effective for interim and annual reporting periods
beginning after December 15, 2009, except for the disclosure about purchase,
sales, issuances, and settlement in the roll forward of activity in Level 3 fair
value measurements. Those disclosures are effective for fiscal years
beginning after December 15, 2010, and for interim periods within those fiscal
years. The amendments in this Update are effective for interim and annual
periods ending on or after December 15, 2009, and should be applied on a
retrospective basis. Early adoption is permitted. The
adoption of this standard is not expected to have a material impact on the
Company’s financial position and results of operations
In
January 2010, the FASB has published ASU 2010-01 “Equity (Topic 505)- Accounting
for Distributions to Shareholders with Components of Stock and Cash—a consensus
of the FASB Emerging Issues Task Force,” as codified in ASC 505,. ASU
No. 2010-01 clarifies the treatment of certain distributions to
shareholders that have both stock and cash components. The stock portion of such
distributions is considered a share issuance that is reflected in earnings per
share prospectively and is not a stock dividend. The amendments in this Update
are effective for interim and annual periods ending on or after December 15,
2009, and should be applied on a retrospective basis. Early adoption
is permitted. The adoption of this standard is not expected to have a
material impact on the Company’s financial position and results of
operations.
In August
2009, the FASB issued ASU 2009-05 which includes amendments to Subtopic 820-10,
“Fair Value Measurements and Disclosures—Overall”. The update provides
clarification that in circumstances, in which a quoted price in an active market
for the identical liability is not available, a reporting entity is required to
measure fair value using one or more of the techniques provided for in this
update. The amendments in this ASU clarify that a reporting entity is not
required to include a separate input or adjustment to other inputs relating to
the existence of a restriction that prevents the transfer of the liability and
also clarifies that both a quoted price in an active market for the
identical liability at the measurement date and the quoted price for the
identical liability when traded as an asset in an active market when no
adjustments to the quoted price of the asset are required are Level 1 fair value
measurements. The guidance provided in this ASU is effective for the first
reporting period, including interim periods, beginning after
issuance. The adoption of this standard did not have a material
impact on the Company’s financial position and results of
operations.
In June
2009, the Financial Accounting Standards Board (“FASB”) issued its final
Statement of Financial Accounting Standards (“SFAS”) No. 168, “The FASB
Accounting Standards Codification and the Hierarchy of Generally Accepted
Accounting Principles a Replacement of FASB Statement No. 162.”
SFAS No. 168 made the FASB Accounting Standards Codification (the
Codification) the single source of U.S. GAAP used by nongovernmental
entities in the preparation of financial statements, except for rules and
interpretive releases of the Securities and Exchange Commission (“SEC”) under
authority of federal securities laws, which are sources of authoritative
accounting guidance for SEC registrants. The Codification is meant to simplify
user access to all authoritative accounting guidance by reorganizing
U.S. GAAP pronouncements into roughly 90 accounting topics within a
consistent structure; its purpose is not to create new accounting and reporting
guidance. The Codification supersedes all existing non-SEC accounting and
reporting standards and was effective for the Company beginning July 1,
2009. Following SFAS No. 168, the Board will not issue new standards
in the form of Statements, FASB Staff Positions, or Emerging Issues Task Force
Abstracts; instead, it will issue Accounting Standards Updates (“ASU”). The FASB
will not consider ASUs as authoritative in their own right; these updates will
serve only to update the Codification, provide background information about the
guidance, and provide the bases for conclusions on the change(s) in the
Codification.
NOTE
3 – MATERIAL DEVELOPMENTS
The
March 30, 2006 MKG Acquisition
On March
30, 2006, MKG took control of the Company’s management and operations as a
result of a series of agreements. The explicit objective of the
agreements was to give MKG control of the Company’s management, board,
operations, and 51% of the Company’s common shares on a fully diluted
basis. The change of control was effectuated by way of, among other
things, stock acquisitions, debt conversion, and board changes. As of
the MKG Acquisition, all of the Company’s prior royalty, distribution,
employment, research and development, and consulting agreements had been or were
terminated.
MKG
acquired all of the Company’s common shares (8,747,528 shares) owned by the
Company’s former chairman and chief executive officer, Dr. David Long and his
family and affiliates, pursuant to a Stock Acquisition and Voting Agreement (the
“Long Agreement”) and a Stock Acquisition Agreement between MKG and the David
and Donna Long Family Foundation (the “Long Foundation
Agreement”). In total, MKG acquired approximately 17.49% of all
common shares of the Company on a fully diluted basis or approximately 20.6% of
all outstanding shares of common stock of the Company issued as of December 31,
2005 and 5,898,495 of those shares were subsequently assigned to
James MacKay as MKG’s designee in accordance with the Long Agreement and Long
Foundation Agreement.
Under the
Long Agreement, MKG agreed to take control of the Company’s management and
operations, fund the Company, help restructure the Company’s debt, and use its
government and industry contacts and relationships in Asia, Europe, and
elsewhere to distribute, manufacture, and develop the BDS in foreign
markets. Additionally, MKG agreed to give the Longs a royalty equal
to 1% of the Company’s net sales worldwide for three years commencing as of
March 31, 2006. MKG also entered into a three-year, $60,000 per year
consulting agreement with Dr. David Long or his nominee.
The
Debt Conversion
The Long
Agreement also provided for the reduction of $2 million of the Company’s debt
owed to Dr. David Long and his family and affiliates by way of an assignment of
this debt to MKG and the subsequent conversion of the debt into
stock.
Under the
Long Agreement, the Longs and their affiliates (“LFCG”) assigned approximately
$2 million (comprising principal and accrued interest) of the total debt (over
$4.3 million) owed them by the Company to MKG. MKG was entitled to
designate which portion of the total LFCG debt to assign. The
assigned debt was to be converted into stock of the Company at $0.05 per share
(the “Converted Shares”). Upon conversion, MKG retained a portion of the
Converted Shares so that, together with the shares MKG acquired from LFCG and
the David and Donna Long Family Foundation, MKG would then hold 51% of all the
shares of Common Stock issued and outstanding on a fully-diluted basis.
Any shares remaining of the Converted Shares not retained by MKG were to
be transferred to LFCG, provided that LFCG agreed to deliver a proxy with
respect to all voting rights associated with those remaining
shares. In addition, pursuant to the Long Agreement, to the extent
that any other debt owed to LFCG by the Company is converted into shares of
Common Stock, LFCG agreed to transfer 51% of such shares to
MKG.
On April
3, 2006 MKG made a demand on the Company to effectuate the debt conversion,
designating certain portions of the total LFCG debt. Pursuant to the
Long Agreement, $499,728 of the assigned debt was authorized to be converted
into 9,994,550 pre-reverse stock split common shares and $1,230,000 of the
assigned debt into 12,300,000 shares of the voting Preferred stock of the
Company, with such shares to be issued to James MacKay as MKG’s designee.
Mr. MacKay is the principal of MKG and is Chairman of the Board of the
Company. All remaining portions of the assigned debt, classified on
the balance sheet as notes payable and not converted (e.g., $270,273), were
retained by MKG and are entitled to be converted at a later time. On
July 31, 2008, the Board of Directors reviewed all of the Company’s prospective
and contingent obligations to issue Common Stock and approved the issuance of
19,006,840 shares of Common Stock to James Mackay on July 31, 2008 to complete
the debt conversion pursuant to the Long Agreement. The 19,006,840
shares of Common Stock were believed by the Board of Directors to provide Mr.
Mackay with 51% of the outstanding equity after giving effect to all of the
Company’s prospective and contingent obligations to issue Common
Stock. As a result, the Long Debt was converted into a total of
19,006,840 shares of Common Stock (split adjusted) and 12,300,000 shares of
voting Preferred Stock, which are convertible into 2,460,000 shares of Common
Stock (split adjusted) and carry 2,460,000 votes. The preferred
shares were deemed to be issued during 2007 and the 9,994,550 pre-reverse stock
split common shares authorized to be converted were considered to be issuable as
of December 31, 2007.
The
MKG Master License
On July
27, 2007, the Company signed a master license agreement (the “Agreement”) with
MKG. Pursuant to the Agreement, the Company granted to MKG an exclusive (even to
the Company), sub licensable, royalty-bearing, worldwide license to make, have
made, use, import, offer for sale, and sell devices, sensors and other products
or services incorporating the Company’s patented and unpatented breast cancer
detection technology, including, but not limited to, the BDS device, the
Biofield Breast Cancer Proliferation Detection System, the Breast Cancer
Diagnostic Device, and the Biofield Breast Examination or BBESM
(collectively, the “Technology”). The Company also granted MKG, on a
worldwide basis, the Exclusive Distribution, Manufacturing, Development,
Clinical, and research and development rights (as those terms are defined in the
Agreement) with regard to the Technology. Under the Agreement, MKG assumes from
the Company the sole responsibility and expense to market, manufacture, further
develop (clinically and technically), and otherwise commercialize the
Technology. MKG further assumes from the Company the sole responsibility and
expense to secure additional regulatory approvals and to conduct additional
clinical trials and research and development.
In return
for the exclusive worldwide license, MKG will pay the Company royalties based on
gross receipts received by MKG and its affiliates in connection with the
Technology. MKG must pay minimum royalties. In addition to royalties, MKG will
pay the Company licensing fees based upon certain milestones. The term of the
Agreement is 10 years with automatic renewals for additional 10-year terms
unless terminated by one of the parties pursuant to the terms of the
Agreement.
NOTE 4 -
INVENTORIES
There
were no inventories at December 31, 2009 and 2008.
NOTE
5 – PROPERTY, PLANT AND EQUIPMENT
Property,
plant and equipment at December 31, 2009 and 2008 consisted of the
following:
|
2009
|
2008
|
|||||||
|
Furniture
and Office equipment
|
$
|
61,686
|
$
|
61,686
|
||||
|
Plant
and production equipment
|
144,308
|
144,308
|
||||||
|
205,994
|
205,994
|
|||||||
|
Less: Accumulated
depreciation
|
202,172
|
200,783
|
||||||
|
$
|
3,822
|
$
|
5,211
|
|||||
Depreciation expenses in 2009, 2008 and
for the period from inception through December 31, 2009, were $1,389 and $1,390,
respectively.
NOTE
6 - PATENT AND PATENT APPLICATION COSTS
In
December 2005, during the Company’s annual review of the carrying values of
patents and trademarks, management determined that, due to increased uncertainty
in obtaining FDA’s approval to sell the Company’s device in the United States,
the recoverability of the carrying values of Patents and Trade Marks was in
doubt. Management was unable to determine and project future undiscounted cash
flows for these assets with reasonable accuracy due to the uncertainties.
Consequently, the Company recorded an impairment charge of $194,268 for the full
carrying value of these assets as a component of operating expenses in the
statement of operations as a separate line item.
There was
no amortization expense for patents for the years ended December 31, 2009 and
2008. Amortization expense from inception through December 31, 2009,
was $486,860.
NOTE
7 - ACCRUED EXPENSES
Accrued
expenses at December 31, 2009 and 2008 consisted of the following:
|
2009
|
2008
|
|||||||
|
Accounts
payable
|
$
|
1,439,620
|
$
|
1,402,514
|
||||
|
Accrued
interest
|
1,272,678
|
991,849
|
||||||
|
Accrued
expenses
|
926,658
|
2,058,823
|
||||||
|
Other
|
14,659
|
9,912
|
||||||
|
$
|
3,653,615
|
$
|
4,463,09823
|
|||||
Due to
severe cash flow constraints experienced by the Company in 2003, its employees
were not paid salaries from April 16, 2003 to October 31, 2003. Five
of its six employees then agreed to the deferment of the payment of the salary
due to them, payable with 100% interest thereon, until the receipt of the
proceeds from new funding. The Company also granted options to
acquire 514,227 shares of Common Stock to these employees at an exercise price
of $0.33 per share, the closing market price of the Company’s shares of Common
Stock on the date of the grant in consideration for the reduction in
remuneration accepted by them during the first four months of
2003. On September 11, 2007, the Company agreed to issue its former
chief operating officer, John Stephens, 1,000,000 shares of common stock for
services rendered. The share price at the close of the market on
September 11, 2007 was $0.10. As of December 31, 2009, the unpaid
salary and interest thereon, together with unpaid remuneration for subsequent
periods, amounting to $117,245 and is recorded as accrued expenses in the
financial statements.
NOTE
8 – DUE TO AFFILIATE
As of
December 31, 2009 and 2008 the Company had recorded $329,686, for amounts due to
affiliates.
The
Company, over time, recorded amounts due to Abel Laboratories, which was an
affiliate of the Company’s former Chairman, CEO and principal shareholder, Dr.
David Long. The amount due to Abel Laboratories is related to various laboratory
expenses and, as of December 31, 2009 and 2008, remained constant at
$329,686. Interest does not accrue on the amount due, there is no
maturity date and the amount is due on demand and does not have any convertible
features.
NOTE
9 – ADVANCES FROM STOCKHOLDER
As of
December 31, 2009 and 2008, the Company had recorded $2,616,871 and $2,378,973,
respectively, for advances from stockholder.
The
Company’s operations from 2002 to the March 30, 2006 MKG Acquisition were
primarily funded through advances, among other funding vehicles, by its then
majority shareholder, chairman, and chief executive officer, Dr. David Long, and
his family and affiliates LFCG. As of December 31, 2005, the
Company’s overall debt to LFCG was approximately $4,425,853, of which $3,488,816
was recorded as advances from stockholder.
On March
30, 2006, to induce MKG to take control of the Company and to effectuate the
transfer to MKG of 51% of the Company’s stock on a fully diluted basis, LFCG
agreed to assign MKG approximately $2 million of the total debt owed to it by
the Company (the “Assigned Debt”). Under the MKG-LFCG Agreement, the Assigned
Debt was to be converted into stock of the Company at a conversion rate
commensurate to $0.05 per common share. On April 3, 2006, MKG made a demand on
the Company to effectuate the debt conversion.
The
advances bear interest at 10% per annum. In 2009 and 2008, the Company accrued
$237,898 and $239,220, respectively, of interest for this account and has record
this amount in advances from stockholder. All interest accruing on
the advances from stockholder are payable to LFCG and total
$237,898. There is no maturity date for the advances from stockholder
and only $270,273, which is retained by MKG, is entitled to be converted to
stock at a later time. The remaining amount outstanding is still
assigned to LFCG.
NOTE
10 – NOTES PAYABLE
Notes
Payable
During
2006, the Company issued notes totaling $110,000 for past due
obligations. These notes bear interest at 18% through the maximum
amount allowed by law. For the year ended December 31, 2008 and 2007, $23,400
and $19,800 of interest, respectively, was recorded in accrued
interest. These notes were due at various dates during 2007 and 2008
and are in default. The Company continues to work with the holders of these
notes to resolve the defaults.
Notes
Payable to Stockholder
As of
December 31, 2009 and 2008, the Company had recorded $808,383 and $801,702,
respectively, for notes payable to stockholder. In 2002, the Company
issued a 10% promissory convertible note in the principal amount of $450,000 to
a stockholder. The note, with accrued unpaid interest, has no maturity date and
is convertible at the option of the holder into subscriptions of common stock at
a rate of $0.40 per share. Interest for 2009 and 2008 totaled $73,489
and $66,808, respectively, and has been added to the note amount.
Notes
Payable for Private Placements
Over the
course of time, the Company sold various private placements in various
increments of units of debt and common stock. These notes payable, as of
December 31, 2009 and 2008, totaled $2,491,790 and $2,410,951, respectively.
Interest accrues at either 12% or 18%, depending upon the date of placement of
note and has been recorded in accrued interest. The notes for these
private placements were due on various dates and the Company is currently in
default. Until the notes issued under the private placements are repaid, the
holders of the notes have the right to participate in any offering by the
Company of its equity securities (including convertible debt) by using the notes
(and accrued interest thereon) to acquire such equity securities at a 25%
discount from the offering price (and if the offering is of convertible debt to
acquire such debt at face with a conversion feature at a 25%
discount).
NOTE
11 – LINE OF CREDIT
On
January 5, 2007 MKG agreed to advance additional funds to the Company under a
line of credit. Under the line of credit, monies advanced by MKG
would bear 12% simple annual interest. There was no maturity
date. MKG had the option to convert the principal and accrued
interest into stock at a share price equal to the lesser of: (a) the 70% of the
share price at the close of the market as of receipt of funds; or (b) the terms
extended by the Company to a funder making a total equity investment of at least
US $1 million or in connection with a merger/acquisition or change in control.
In 2007, MKG advanced the Company approximately $342,000. At December
31, 2009 and 2008 the balance of this line of credit was $418,920,
respectively.
NOTE
12 – STOCKHOLDERS’ EQUITY
Treasury
Stock
In
December 1998, the Company repurchased 2,246,131 shares of Common Stock for
$100. In June 2000, the Company repurchased 60,000 shares of Common Stock for
$3,100 from an executive who resigned. The Company holds all of these
shares in its treasury. There are no changes as of December 31,
2009.
Options
Issued for Consulting Fees
The
Company issued 1.2 million options based upon the fair value of service render
at $47,512 for consulting fees recognized in operating results for the year
ended December 31, 2006. These options have an exercise price of $0.04 per share
and expire on February 23, 2011. During 2009 and 2008 there were no options
issued or exercised.
Shares
Due for Interest Accrued on Advances From Stockholder
Interest
on certain advances from stockholder are payable in stock subscriptions of
common stock. At December 31, 2006, stock subscriptions of common stock have
been reserved for issuance in payment of the then accrued interest and the total
accrued interest of $25,243 was added to additional paid-in capital and stock
subscriptions, pending the issuance of 841,438 shares of common
stock.
NOTE
13 - INCOME TAXES
The
benefit for income taxes from continued operations for the years ended December
31, 2009 and 2008 consist of the
following:
|
|
December 31,
|
|||||||
|
2009
|
2008
|
|||||||
|
Current:
|
||||||||
|
Federal
and State
|
$
|
-
|
$
|
-
|
||||
|
Deferred:
|
||||||||
|
Federal
and State
|
4,857,243
|
4,286,709
|
||||||
|
4,857,243
|
4,286,709
|
|||||||
|
Increase
in valuation allowance
|
(4,857,2439
|
)
|
(4,286,709
|
)
|
||||
|
Benefit
for income taxes, net
|
$
|
-
|
$
|
-
|
||||
The above
benefits for 2009 and 2008 were calculated using a federal and State tax
estimated rate as noted below:
|
December 31
|
||||||||
|
2009
|
2008
|
|||||||
|
Statutory
federal and State income tax rate
|
39.00
|
%
|
39.00
|
%
|
||||
|
Valuation
allowance
|
(39.00
|
)%
|
(39.00
|
)%
|
||||
|
Effective
tax rate
|
0.00
|
%
|
0.00
|
%
|
||||
At
December 31, 2009, the Company had federal net operating loss carry-forwards
totaling approximately $86 million, which will begin expiring in years 2010
through 2028. However, substantially all of the net operating loss carry
forwards are not utilizable, as a result of the limitations imposed by Section
382 of the Internal Revenue Code, due to ownership changes in 1992, 1995, 1997,
1999 and 2006. To the extent that these losses and general business
credits are utilizable, they may be offset against future U.S. taxable income,
if any, during the carry forward period.
NOTE
14 - COMMITMENTS
As of
April 1, 2006, the Company moved its corporate headquarters from Alpharetta,
Georgia to 1615 Walnut Street, 3rd and 4th Floors, Philadelphia,
Pennsylvania. In June 2007, pursuant to a three-year lease, the
Company relocated all of its operations to a new office in King of Prussia,
Pennsylvania. The monthly rent for the King of Prussia office is
approximately $4,000, including utilities.
|
Rent
|
||||
|
2010
|
17,920
|
|||
|
Total
|
$
|
17,920
|
||
In light
of the Company's arrangements with a certified medical device manufacturing
facility to help co-manage the Company's U.S. operations, the Company is working
to terminate the King of Prussia office lease with the landlord, which sent a
default notice on March 10, 2008, and which after applying the security deposit
is effectively owed a balance for the Company's occupancy during April
2008.
Pursuant
the Long Agreement, the Company is required to pay LFCG collectively a 1%
royalty with respect to net sales of the Company’s products worldwide for three
years commencing March 30, 2006.
Pursuant
to the March 30, 2006 Consulting Agreement, the Company is required to pay Dr.
David Long or his nominees $60,000 per annum in consulting fees for three years
commencing March 30, 2006.
The
Company is not a party to any pending legal proceeding which is not routine
litigation incidental to our business or which involves a claim for damages
exceeding 10% of our current assets, nor are we aware of any current proceeding
concerning us that a governmental authority may be contemplating.
We are
not a party to any other pending legal proceeding which is not routine
litigation incidental to our business or which involves a claim for damages
exceeding 10% of our current assets, nor are we aware of any current proceeding
concerning us that a governmental authority may be contemplating.
1) KOPBC,
LP v. BIOFIELD CORPORATION, COURT OF COMMON PLEAS FOR MONTGOMERY COUNTY, NO.
2008-11647
This
matter involved a Judgment in favor of KOPBC for certain rent. The
Judgment has been completely satisfied and an Order to Mark the Judgment
Satisfied was filed of Record on March 4, 2010.
2) KOPBC,
LP v. BIOFIELD CORPORATION, COURT OF COMMON PLEAS FOR PHILADELPHIA COUNTY, NO.
June Term, 2009, No. 00825
This
matter involves a Confession of Judgment in favor of KOPBC for certain
rent. The Judgment was filed on June 5, 2009. Based upon
case law, the Judgment was improper and KOPBC, LP has no viable claim against
Biofield. The Lease was terminated in such a manner as to entitle
KOPBC to back rent, but no further rent. The back rent was satisfied
as per 1), above. The Confessed Judgment in Philadelphia is not
viable because the Lease had terminated, thereby rendering the confession clause
a nullity and KOPBC no longer had any basis upon which to confess
judgment.
3) BIOFIELD
CORP. v. WILLIAM ROGER DUNAVANT, UNITED STATES DISTRICT COURT FOR THE EASTERN
DISTRICT OF PENNSYLVANIA, NO. 08-6044
This
matter was a Declaratory Judgment action regarding certain aspects of a
Consulting Contract given to Mr. Dunavant and an alleged breach of his fiduciary
duties to Biofield. Mr. Dunavant counterclaimed for certain monies
which he alleged were due to him. The parties mutually agreed to
resolve claims and the case was dismissed upon consent of the parties by Order
of Court of November 30, 2009, entered on December 1, 2009.
4) BIOFIELD
CORP. v. RICHARD BLUMBERG and MARK FAUPEL and GUIDED THERAPEUTICS, INC., UNITED
STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA, NO.
2009-6206
This
matter was instituted to address, inter alia, alleged tortious interference with
contract, breach of contract, conspiracy, breach of fiduciary duty, and
misrepresentation.
Biofield
has allowed this action to be dismissed as it has entered into good faith
negotiations to resolve the issues. Biofield may reinstitute suit if
the negotiations are not favorably resolved.
5) Warshaw
Burstein Cohen Schlesinger & Kuh, LLP v. Biofield Corp., Court of Common for
Philadelphia County, June Term, 2009, No. 02997
This
matter involves a foreign judgment entered against Biofield, without valid
service of process upon Biofield. The company is aware of the action
and is in the process of engaging defense counsel. It is Biofield's
position that absent service, the judgment is improper. Moreover,
Biofield asserts that if has good defenses to the claim.
NOTE
15 - ROYALTY AGREEMENT
As a
condition precedent to MKG’s agreement to take control of the Company and as was
agreed upon and represented by the Company’s prior management and board, all
royalty agreements existing as of March 30, 2006, had either expired or had been
terminated or were since terminated.
As part
of the Long Agreement, LFCG was given a royalty of 1% of the net sales of the
Company’s products worldwide for a three-year period commencing as of March 30,
2006.
The
Company entered into a master license agreement with MKG giving MKG an exclusive
(even to the Company), sub licensable, royalty-bearing license to make, have
made, use, import, offer for sale, and sell devices, sensors, and other products
or services incorporating the Company’s technology. In return, MKG
agreed to pay the Company royalties based upon a gross receipts step scale. MKG
was further subject to a minimum royalty payment requirement. MKG also agreed to
pay the Company a licensing fee in accordance with certain milestone
requirements. The term of the Master License Agreement is 10 years, with
automatic renewals for additional 10-year terms, unless properly terminated in
accordance with the terms and conditions of the Agreement.
NOTE
16 – THE COMPANY COMPLETES ITS 1 FOR 10 REVERSE STOCK SPLIT OF ITS COMMON
STOCK
On April
2, 2008, the Company filed a preliminary information statement (Schedule PRE
14C) with the SEC, reporting that on March 28, 2008 its board of directors (the
"Board") unanimously adopted a resolution seeking shareholder approval to amend
the Company's Articles of Incorporation to effect an 1 for 10 reverse split of
Biofield's Common Stock (the "Reverse Split"). On March 31, 2008,
a stockholder of the Company holding over a majority of the total voting
rights for all issued and outstanding shares of common and preferred stock of
the Company executed a written consent authorizing the Board to amend the
Company's Articles of Incorporation to effect the Reverse Split at any time
prior to March 31, 2009. The Board believed that the proposed Reverse
Split would benefit the Company by increasing the per share market price of its
common stock, a factor in whether the Common Stock meets investing guidelines
for certain institutional investors and investment funds, although there was no
assurance that the market price would increase. The SEC had 10 days from the
April 2, 2008 filing date to comment on the Information Statement. The Company
did not receive any comments on the Information Statement from the SEC within
the 10-day period; filed a definitive information statement (Schedule DEF 14C)
with the SEC on April 22, 2008; and mailed on April 23, 2008 the definitive
information statement to all shareholders of record as of April 1, 2008 (as
identified in the certified shareholder list received from the Company's
transfer agent). The Company filed on May 23, 2008 with the Secretary of State
for the State of Delaware a Certificate of Amendment to the Certificate of
Incorporation in connection with the Reverse Split. NASDAQ OMX, Corporate Data
Operations subsequently approved the Reverse Split, advised the Company that the
Reverse Split would take effect on June 20, 2008. The Company's new symbol
assigned on that date is BZEC. The Company's new CUSIP number is
090591 603.
On June
20, 2008 the Company executed a 1 for 10 reverse split of its common stock.
Immediately prior to the stock split, there were 60 million shares authorized
and 55,137,486 shares issued and outstanding. Subsequent to the stock split,
there were 60 million shares authorized, 5,513,749 shares issued and
outstanding. Preferred shares were not affected by the reverse stock split.
Additionally, 19,279,751 shares of common stock were issued post reverse stock
split in the third quarter ended September 30, 2008, bring the total common
stock outstanding to 24,793,500.
NOTE
17 – EARNINGS PER SHARE
Basic
earnings per share is computed by dividing net income available to common
shareholders by the weighted average number of common shares outstanding during
the period. Diluted earnings per share reflects the potential dilution that
could occur if stock options and other commitments to issue common stock were
exercised or equity awards vest resulting in the issuance of common stock or
conversion of notes into shares of the Company’s common stock that could
increase the number of shares outstanding and lower the earnings per share of
the Company’s common stock. This calculation is not done for periods
in a loss position as this would be antidilutive. As of December 31,
2009, there were no stock options or stock awards that would have been included
in the computation of diluted earnings per share that could potentially dilute
basic earnings per share in the future. The information related to
basic and diluted earnings per share is as follows:
|
December
31,
|
||||||||
|
2009
|
2008
|
|||||||
|
Numerator:
|
||||||||
|
Continuing
operations:
|
||||||||
|
Income
from continuing operations
|
$ | (935,301 | ) | $ | (11,091,561 | ) | ||
|
Effect
of dilutive convertible debt
|
— | — | ||||||
|
Total
|
$ | (935,301 | ) | $ | (11,091,561 | ) | ||
|
Discontinued
operations
|
||||||||
|
Loss
from discontinued operations
|
— | — | ||||||
|
Net
income (loss)
|
$ | (935,3010 | ) | $ | (11,091,561 | ) | ||
|
Denominator:
|
||||||||
|
Weighted
average number of shares outstanding
– basic and diluted
|
33,296,365 | 23,897,943 | ||||||
|
EPS:
|
||||||||
|
Basic:
|
||||||||
|
Continuing
operations
|
$ | (0.03 | ) | $ | (0.46 | ) | ||
|
Discontinued
operations
|
0.00 | 0.00 | ||||||
|
Net
income/(loss)
|
$ | (0.03 | ) | $ | (0.46 | ) | ||
|
Diluted
|
||||||||
|
Continuing
operations
|
$ | (0.03 | ) | $ | (0.46 | ) | ||
|
Discontinued
operations
|
0.00 | 0.00 | ||||||
|
Net
income/(loss)
|
$ | (0.03 | ) | $ | (0.46 | ) | ||
NOTE
18 - SUBSEQUENT EVENTS
None
PART
IV
ITEM
15. Exhibits, Financial Statement Schedules.
(a)
Financial Statements
The
following documents are filed under "ITEM 8. FINANCIAL STATEMENTS AND
SUPPLEMENTARY DATA," beginning on page F-1 through page F-12 and are included as
part of this Form 10-K as the financial statements of the Company for the years
ended December 31, 2009 and 2008:
|
Reports
of Independent Registered Public Accounting Firms
|
|
Balance
Sheets
|
|
Statements
of Operations
|
|
Statement
of Stockholders' Equity
|
|
Notes
to Financial Statements
|
(b)
Exhibits.
3. (i)
Articles of incorporation.
|
|
3.1
|
Fifth Amended and
Restated Certificate of Incorporation of Biofield Corp., as
filed with the Secretary of State of the State of Delaware on October 6,
2000. (1)
|
3. (ii)
By-laws.
|
|
3.2
|
By-laws of Biofield Corp.
(2)
|
4.
Instruments defining the rights of security holders, including
indentures.
|
|
4.1
|
Form of Promissory Note, due
December 31, 2004, issued by Biofield Corp. in 2003 private placement.
(8)
|
|
|
4.2
|
Form of Subscription Agreement
between Biofield Corp. and investors who participated in 2003 private
placement. (8)
|
9. Voting
trust agreement and amendment. - None
10.
Material contracts.
|
|
10.01
|
Registration
Rights Agreement between Biofield Corp. and John D. Stephens dated as of
April 22, 1993. (3)
|
|
|
10.02
|
Form
of Stock Purchase Option Agreement between Biofield Corp. and Abel
Laboratories, Inc., dated as of June 1, 1992.
(3)
|
|
|
10.03
|
Patent
Royalty Agreement between Biofield Corp. and Abel Laboratories, Inc.,
dated as of June 1, 1992. (3)
|
|
|
10.04
|
Master
Laboratory Services Agreement between Biofield Corp. and Abel
Laboratories, Inc., dated as of January 1, 1994.
(3)
|
|
|
10.05
|
Biofield
Corp. 1992 Stock Incentive Plan.
(3)
|
|
|
10.6
|
Biofield
Corp. 1996 Stock Option Plan, as amended.
(4)
|
|
|
10.7
|
Biofield
Corp. 1996 Stock Option Plan for Non-Employee Directors.
(3)
|
|
|
10.8
|
Escrow
Agreement among C. Leonard Gordon, Biofield Corp. and Warshaw Burstein
Cohen Schlesinger & Kuh, LLP, as escrow agent, dated December 28,
1999. (1)
|
|
|
10.9
|
License
Agreement between Biofield Corp. and Cardio Dynamics International
Corporation dated October 16, 2000.
(1)
|
|
|
10.10
|
Share
Option Agreement, dated as of March 16, 1995, between Biofield Corp. and
David M. Long, Jr., M.D. (1)
|
|
|
10.11
|
Form
of Share Option Agreement between Biofield Corp. and Raymond A. Long,
M.D., dated September 5, 2001. (5)
|
|
|
10.12
|
Share
Option Agreement, dated as of November 29, 2001, with David M. Long, Jr.,
M.D. (5)
|
|
|
10.13
|
Share
Option Agreement, dated as of November 29, 2001, with John D. Stephens.
(5)
|
|
|
10.14
|
Form
of Share Option Agreement, dated November 29, 2001, with Steven Preiss.
(5)
|
|
|
10.15
|
Form
of Share Option Agreement, dated November 29, 2001, with various Biofield
Corp. employees. (5)
|
|
|
10.16
|
10%
Convertible Promissory Note, dated November 8, 2002 by Biofield Corp. in
favor of David M. Long, Jr. (6)
|
|
|
10.17
|
Demand
Promissory Note, dated January 3, 2003, by Biofield Corp. in favor of
David M. Long Separate Property Trust.
(7)
|
|
|
10.18
|
Investment
Banking Services Agreement, dated March 5, 2003, between Biofield Corp.
and iCapital Finance, Inc. (7)
|
|
|
10.19
|
Consulting
Agreement, dated March 5, 2003, between Biofield Corp. and Randall
Letcavage and Rosemary Nguyen. (7)
|
|
|
10.20
|
Redesign
Agreement, dated October 15, 2001, between Biofield Corp. and TriVirix
International Limited. (7)
|
|
|
10.21
|
Form
of Share Option Agreement, dated February 4, 2003, with various Biofield
Corp. employees. (10)
|
|
|
10.22
|
Service
Agreement, dated July 8, 2003, between Biofield Corp. and MRB Investor
Relations, LLC. (10)
|
|
|
10.23
|
Agreement
for Financial Advisor, Investment Banker & Placement Agent, dated
April 25, 2003 between Biofield Corp and Brooks Houghton & Company,
Inc. and Brooks, Houghton Securities, Inc.
(10)
|
|
|
10.24
|
Agreement,
dated February 9, 2004, between Biofield Corp. and ROI Group Associates,
Inc. (10)
|
|
|
10.25
|
Agreement,
dated October 16, 2003 between Biofield Corp, and CGF Securities, LLC.
(10)
|
|
|
10.26
|
Change
in Terms Agreement, dated December 11, 2003, between Biofield Corp. and
California Bank & Trust. (10)
|
|
|
10.27
|
Agreement,
dated June 11, 2003, as amended December 11, 2003, by Biofield Corp. to
John Stephens. (10)
|
|
|
10.28
|
Consulting
agreement between The Mackay Group, Inc. and Dr. David Long dated March
30, 2006. (11)
|
|
|
10.29
|
Stock
Acquisition and Voting Agreement between The Mackay Group, Inc. and Dr.
David Long, Jr., Donna R Long, Dr. Raymond A Long, the Long Family Trust
and the Long Family Partners II LP dated March 30, 2006.
(11)
|
|
|
10.30
|
Sale
of Shares Agreement for the sale and purchase of shares in VALIBIO dated
December 2008. (12)
|
|
|
10.31
|
Exclusive
Distribution Agreement between The Company and ValiBio dated December
2008. (12)
|
|
|
13.
|
Annual
report to security holders for the last fiscal year, Form 10-Q or 10-QSB
or quarterly report to security holders. – Not
applicable.
|
|
|
14.
|
Code
of ethics
|
|
|
14.1
|
Code of Ethics adopted on
February 16, 2004. (10)
|
|
|
16.
|
Letter
on change in certifying accountant
|
|
|
16.1
|
Letter from Deloitte &
Touche, LLP, Certified Public Accountants to the Commission, dated
November 24, 2003. (9)
|
|
|
18.
|
Letter
on change in accounting principles - Not
applicable.
|
|
|
21.
|
Subsidiaries
of the small business issuer: Biofield International,
Inc. - Incorporated in
Delaware
|
|
|
23.
|
–Consent
of Independent Registered Public Accounting Firm (Filed
Herewith)
|
|
|
31.
|
Rule
13a-14(a)/15d-14(a) Certifications
|
31.1
Certification of Shepard G. Bentley Chief Executive Officer (Filed
Herewith)
31.2
Certification of Steven M. Waszak Chief Financial Officer (Filed
Herewith)
|
|
32.
|
Section
1350 Certifications
|
32.1
Certification of Shepard G. Bentley Chief Executive Officer (Filed
Herewith)
32.2
Certification of Steven M. Waszak Chief Financial Officer (Filed
Herewith)
|
1
|
Filed
with the Securities and Exchange Commission as an exhibit to Biofield's
Registration Statement on Form 10-SB (Registration No. 0-27848) which
became effective on October 18,
2000.
|
|
2
|
Incorporated by reference to
Biofield's Annual Report on Form 10-K for the fiscal year ended December
31, 1996.
|
|
3
|
Incorporated
by reference to Biofield's Registration Statement on Form S-1
(Registration No. 333-00796) declared effective on March 19,
1996.
|
|
4
|
Incorporated by reference to
Biofield's Annual Report on Form 10-K for the fiscal year ended December
31, 1997.
|
|
5
|
Incorporated by reference to
Biofield's Annual Report on Form 10-KSB for the fiscal year ended December
31, 2001.
|
|
6
|
Incorporated by reference to
Biofield's Quarterly Report on Form 10-QSB for the fiscal quarter ended
September 30, 2002.
|
|
7
|
Incorporated by reference to
Biofield's Annual Report on Form 10-KSB for the fiscal year ended December
31, 2002.
|
|
8
|
Incorporated by reference to
Biofield's Annual Report on Form 10-KSB for the fiscal year ended December
31, 2004.
|
|
9
|
Incorporated by reference to
Biofield's Current Report on Form 8-K filed on April 6,
2006.
|
|
b
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Reports
on Form 8-K - None
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SIGNATURES
In
accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
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BIOFIELD
CORP.
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By:
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/s/ David Bruce Hong
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David
Bruce Hong
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Chief
Executive Officer
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Principal
Executive Officer
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By:
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/s/ David Bruce Hong
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David
Bruce Hong
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Chief
Financial Officer
Principal
Financial
Officer
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Dated: April
15, 2010