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EX-32.2 - CERTIFICATION - Oncologix Tech Inc.oncologix2282013exh322.htm
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EX-32.1 - CERTIFICATION - Oncologix Tech Inc.oncolorix2282013exh321.htm
EX-31.2 - CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER - Oncologix Tech Inc.oncologix2282013exh312.htm

 

U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

(Mark One)

[X]   QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

    For the quarterly period ended February 28, 2013.

[_]    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________________ to ___________________.

Commission File Number 0-15482

ONCOLOGIX TECH, INC.

(Name of Small Business Issuer as Specified in Its Charter)

Nevada 86-1006416
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
   

P.O. Box 8832

Grand Rapids, MI 49518-8832

(Address of principal executive offices)

(616) 977-9933

(Issuer’s telephone number)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past twelve 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 [_] No [X]

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 (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [_]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated Filer  [_] Accelerated Filer  [_]
Non-accelerated Filer  [_] Smaller Reporting Company  [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)

Yes [_] No [X]

As of March 31, 2013, there were 61,587,422 shares of common stock, par value $.001 per share, outstanding.

Transitional Small Business Disclosure Format (Check One): Yes [_] No [X]

 

 

 

 

 

 
 

 

ONCOLOGIX TECH, INC. AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

 

TABLE OF CONTENTS  
   
PART I. FINANCIAL INFORMATION  
   
ITEM 1. Financial Statements  
   
Condensed Consolidated Balance Sheets as of February 28, 2013 (Unaudited) and August 31, 2012 3
   
Condensed Consolidated Statements of Operations (Unaudited) for the three  and six month periods  
     ended February 28, 2013 and February 29, 2012 4
   
Condensed Consolidated Statements of Cash Flows (Unaudited) for the six month period  
     ended February 28, 2013 and February 29, 2012 5
   
Notes to Condensed Consolidated Financial Statements (Unaudited) 6
   
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 23
   
ITEM 3. Quantitative and Qualitative Disclosure about Market Risk 29
   
ITEM 4T. Controls and Procedures 29
   
PART II. OTHER INFORMATION  
   
ITEM 1. Legal Proceedings 30
   
ITEM 1A. Risk Factors 30
   
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds 30
   
ITEM 3. Defaults Upon Senior Securities 30
   
ITEM 4. Mine Safety Disclosures 30
   
ITEM 5. Other Information 30
   
ITEM 6. Exhibits 31
   
Signatures 31

 

2

 

 
 

 

 

 

 

PART I: FINANCIAL INFORMATION

ITEM 1. Financial Statements

ONCOLOGIX TECH, INC. AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

 

       
   February 28,  August 31,
   2013  2012
ASSETS      
Current Assets:          
Cash and cash equivalents  $72   $1,931 
Prepaid expenses and other current assets   9,339    2,993 
           
Total current assets   9,411    4,924 
           
Property and equipment (net of accumulated depreciation          
of $9,096 and $8,916)   1,301    1,481 
           
Total assets  $10,712   $6,405 
           
LIABILITIES AND STOCKHOLDERS' DEFICIT          
Current liabilities:          
Convertible notes payable  $125,000   $—   
Convertible notes payable - related parties (net of discount of $0 and $0)   235,025    —   
Notes payable   6,337    —   
Accounts payable and other accrued expenses   169,199    142,990 
Accrued interest payable   47,534    42,575 
Accrued interest payable - related parties   55,208    48,216 
           
Total current liabilities   638,303    233,781 
           
Long-term liabilities:          
Convertible notes payable - (net of discount of $0 and $0)   —      125,000 
Convertible notes payable - related parties (net of discount of $0 and $0)   —      235,025 
           
Total long-term liabilities   —      360,025 
           
Total liabilities   638,303    593,806 
           
Stockholders' Deficit:          
Preferred stock, par value $.001 per share; 10,000,000 shares authorized          
129,062 and 129,062 shares issued and outstanding at          
February 28, 2013 and August 31, 2012, respectively   129    129 
Common stock, par value $.001 per share; 200,000,000 shares authorized;          
61,587,422 and 57,563,258 shares issued and outstanding at          
February 28, 2013 and August 31, 2012, respectively   61,587    57,563 
Additional paid-in capital   57,753,692    57,697,233 
Accumulated deficit prior to reentering development stage   (58,004,869)   (58,004,869)
Deficit accumulated during the development stage   (434,648)   (333,982)
Noncontrolling interest   (3,482)   (3,475)
         (3,475)
Total stockholders' deficit   (627,591)   (587,401)
           
Total liabilities and stockholders' deficit  $10,712   $6,405 

 

 

See accompanying notes to condensed consolidated financial statements.

 

3

 

 

 
 

ONCOLOGIX TECH, INC. AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE AND SIX MONTHS ENDED FEBRUARY 28, 2013 AND FEBRUARY 29, 2012

 

 

               Cumulative Since
               Reentering
               Development
   For the Three Months Ended  For the Six Months Ended  Stage on
   February 28,  February 29,  February 28,  February 29,  June 1,
   2013  2012  2013  2012  2011
                
Operating expenses:                         
General and administrative  $36,717   $32,566   $80,467   $69,210   $245,262 
Depreciation and amortization   90    184    180    260    1,146 
                          
Total operating expenses   36,807    32,750    80,647    69,470    246,408 
                          
Loss from operations   (36,807)   (32,750)   (80,647)   (69,470)   (246,408)
                          
Other income (expense):                         
Interest and finance charges   (3,055)   (2,697)   (5,906)   (5,398)   (19,674)
Interest and finance charges - related parties   (3,625)   (7,660)   (7,278)   (17,679)   (37,401)
Loss on conversion of notes payable - related parties   (10,242)   —      (10,242)   (70,000)   (103,000)
Induced conversion expense   —      —      —      (25,402)   (31,479)
Loss on disposal of assets   —      (110)   —      (110)   (110)
Other income (expenses)   —      —      3,400    —      3,400 
                          
Total other income (expense)   (16,922)   (10,467)   (20,026)   (118,589)   (188,264)
                          
Loss from operations   (53,729)   (43,217)   (100,673)   (188,059)   (434,672)
                          
Less loss attributable to noncontrolling interest   (3)   (4)   (7)   (7)   (24)
                          
Net loss before income taxes   (53,726)   (43,213)   (100,666)   (188,052)   (434,648)
                          
Income taxes   —      —      —      —      —   
                          
Net loss attributable to common shareholders  $(53,726)  $(43,213)  $(100,666)  $(188,052)  $(434,648)
                          
Loss per common share, basic and diluted:  $(0.00)  $(0.00)  $(0.00)  $(0.00)     
                          
Weighted average number of shares                         
outstanding - basic and diluted   59,968,628    54,410,702    59,007,917    53,581,705      

   

 

See accompanying notes to condensed consolidated financial statements.

 

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ONCOLOGIX TECH, INC. AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED FEBRUARY 28, 2013 AND FEBRUARY 29, 2012

 

 

         Cumulative
         Since
         Reentering
         the
         Development
   For the Six Months Ended  Stage on
   February 28,  February 29,  June 1,
   2013  2012  2011
Operating activities:               
Net loss  $(100,673)  $(188,058)  $(434,672)
                
Adjustments to reconcile net loss to net cash used               
  in operating activities:               
Depreciation and amortization   180    260    1,146 
Loss on disposal of property and equipment   —      110    110 
Stock based compensation   —      10,000    —   
Amortization of discount on notes payable and warrants   —      70,000    10,404 
Loss on conversion of notes payable - related parties   10,241    25,402    102,999 
Induced conversion expense notes payable   —      —      31,478 
                
Changes in operating assets and liabilities:               
Prepaid expenses and other current assets   4,058    3,595    14,120 
Deposits and other assets   —      —      —   
Accounts payable and other accrued expenses   26,209    2,107    (4,988)
Accrued interest payable - related parties   7,278    7,446    27,169 
Accrued interest payable   4,959    5,134    18,076 
                
Net cash used in operating activities   (47,748)   (64,004)   (234,158)
                
Investing activities:               
Purchase of property and equipment   —      (1,677)   (1,289)
                
Net cash used in investing activities   —      (1,677)   (1,289)
                
Financing activities:               
 Proceeds from issuance of convertible notes               
payable - related parties   —      —      20,000 
 Proceeds from issuance of notes payable - related     parties   20,000    20,000    80,000 
 Proceeds from the issuance of common stock   40,000    65,000    215,000 
 Repayment of notes payable   (4,067)   (3,523)   (13,993)
 Repayment of notes payable - related parties   (10,044)   —      (47,035)
 Repayment of convertible notes payable   —      —      (2,252)
 Repayment of convertible notes payable - related     parties   —      (20,000)   (20,000)
                
Net cash provided by financing activities   45,889    61,477    231,720 
                
Net increase (decrease) in cash and cash equivalents   (1,859)   (4,204)   (3,727)
                
Cash and cash equivalents, beginning of period   1,931    11,067    3,799 
                
Cash and cash equivalents, end of period  $72   $6,863   $72 

 

 

See accompanying notes to condensed consolidated financial statements.

 

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ONCOLOGIX TECH, INC. AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 1 — DESCRIPTION OF THE COMPANY

 

We were originally formed in 1995 as "Wavetech, Inc." a New Jersey corporation and changed our corporate domicile to Nevada in December 1997, by merging into a Nevada corporation named, "Interpretel International, Inc." We subsequently changed our name, first to "Wavetech International, Inc." and then, in 2000, to "BestNet Communications Corp." Our business at the time was to provide worldwide long distance telephone communication and teleconferencing services to commercial and residential consumers through the internet. That business was never profitable and we were able to continue it only by repeated equity and debt financings. Accordingly, during December 2006, we determined to dispose of that business and sold it during February 2007.

 

We entered the medical device business at the end of July 2006 through the acquisition of JDA Medical Technologies, Inc. ("JDA"), a development stage company, which was merged into our wholly owned subsidiary, Oncologix Corporation. On January 22, 2007, we changed our name to Oncologix Tech, Inc., to reflect this new business. During June 2007, we moved our principal offices from Grand Rapids, Michigan, to our offices at 3725 Lawrenceville-Suwanee Road, Suite B-4, Suwanee, Georgia, 30024, telephone (770) 831-8818. At that address, our business was the development of a medical device for brachytherapy (radiation therapy), called the “Oncosphere” (or “Oncosphere System”), for the advanced medical treatment of soft tissue cancers. It is a radioactive micro-particle designed to deliver therapeutic radiation directly to a tumor site by introducing the micro-particles into the artery that feeds the tumor tissue. Its first application is expected to be the treatment of liver cancer. Due to a lack of funding, we suspended these development activities on December 31, 2007, whereupon we closed the offices in Suwanee Georgia.

 

Our correct mailing address is P.O. Box 8832, Grand Rapids, MI 49518-8832, telephone (616) 977-9933.

 

During May 2008, we determined to dispose of most of the assets related to the development of the Oncosphere.

 

In February 2009, we entered into a Technology Agreement with Institut für Umwelttechnologien GmbH, a German Company (“IUT”) whereunder the parties have agreed that:

 

(a)The Company has granted an exclusive license to a new IUT subsidiary, called “IUTM”, to develop and manufacture products based on the Company’s proprietary information. This proprietary information is not based on the technology that had been subject to the Master License Agreement with the University of Maryland – Baltimore. The Company has also transferred to IUTM a number of items of laboratory equipment and inventory useful in connection with the licensed information.
(b)The Company retains rights to market products based on such information as well as first consideration for marketing rights for other possible IUTM products.
(c)In consideration of the license, the Company has received a 10% equity interest in IUTM, which is organized as a private German limited liability company and IUT has assumed approximately $82,000 of the Company’s indebtedness.
(d)The Company’s marketing rights have been transferred to its subsidiary, Oncologix Corporation and have issued IUTM 10% of the equity ownership of that subsidiary.

 

In addition, on April 7, 2009, the Company entered into a Termination Agreement with the University of Maryland – Baltimore, The Master License Agreement between the Company and the University has been formally terminated and each party has released the other from all liabilities arising under the Master License Agreement.

 

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ONCOLOGIX TECH, INC. AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

We have been advised that IUTM is continuing the development of a brachytherapy device generally as described above but based on proprietary technology not developed by the University of Maryland. During recent discussions with IUTM management, the prior understandings were reaffirmed. While our Management is optimistic as to the outcome of those discussions and future success, it is not possible to predict the probabilities of success with any degree of certainty.

 

On September 23, 2010, the Company signed a Memorandum of Understanding with Institut für Umwelttechnologien GmbH and IUT Medical GMBH confirming certain understandings among the parties with respect to their future relationships and business activities as originally contemplated in their Technology Agreement of February 27, 2009, which was reaffirmed.

 

On May 19, 2011, the Company affected a one-for-four reverse stock split. All share and per share information has been restated to retroactively show the effect of this stock split. The reverse split was approved by a majority of the Company’s shareholders on March 24, 2011.

 

Because the development of the brachytherapy device is not complete and it cannot be marketed at this time, the Company’s management and Board of Directors have determined that the Company has reentered the development stage effective June 1, 2011.  Since the Company has limited operations at this point in time, the Company will be considered a development stage company.  Under the terms of the Agreement described above, the Company believed that we would be able to market the Oncosphere and other medical products IUTM develops.

 

 

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

BASIS OF PRESENTATION

 

In the opinion of management, the accompanying balance sheets and related interim statements of income, cash flows, and stockholders' equity include all adjustments, consisting only of normal recurring items, necessary for their fair presentation in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP"). Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Actual results and outcomes may differ from management's estimates and assumptions. Interim results are not necessarily indicative of results for a full year.

 

CONSOLIDATION

 

The condensed consolidated financial statements for the three and six months ended February 28, 2013 and February 29, 2012 include the accounts of Oncologix Tech, Inc. and its wholly owned subsidiaries, Oncologix Corporation (90% Owned), Interpretel Inc., Telplex International and International Environment Corporation collectively the Company. Oncologix Corporation is a Nevada corporation. Interpretel Inc., Telplex International and International Environment Corporation are inactive corporations. All significant intercompany accounts and transactions have been eliminated in consolidation.

 

USE OF ESTIMATES

 

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reportable amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

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ONCOLOGIX TECH, INC. AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

REVENUE RECOGNITION

 

Revenue is recognized by the Company when all the following criteria are met: persuasive evidence of an arrangement exists; delivery has occurred; the seller’s price to the buyer is fixed and determinable; and collectability is reasonably assured. Currently the company does not have products to sell.

 

CASH AND CASH EQUIVALENTS

 

The Company considers all highly liquid instruments, with an initial maturity of three (3) months or less to be cash equivalents.

 

PROPERTY AND EQUIPMENT

 

Property and equipment is recorded at cost. Depreciation is provided for on the straight-line method over the estimated useful lives of the related assets as follows:

 

Furniture and fixtures 5 to 10 years
Computer equipment 5 years
Equipment 5 to 10 years
Software 3 to 5 years

 

The cost of maintenance and repairs is charged to expense in the period incurred. Expenditures that increase the useful lives of assets are capitalized and depreciated over the remaining useful lives of the assets. When items are retired or disposed of, the cost and accumulated depreciation are removed from the accounts and any gain or loss is included in income.

 

LONG-LIVED ASSETS

 

     ASC 360 – Property, Plant and Equipment addresses financial accounting and reporting for the impairment or disposal of long-lived assets. The Company periodically evaluates whether events and circumstances have occurred that may warrant revision of the estimated useful life of property and equipment or whether the remaining balance of property and equipment, or other long-lived assets, should be evaluated for possible impairment. Instances that may lead to an impairment include: (i) a significant decrease in the market price of a long-lived asset group; (ii) a significant adverse change in the extent or manner in which a long-lived asset or asset group is being used or in its physical condition; (iii) a significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset or asset group, including an adverse action or assessment by a regulatory agency; (iv) an accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of a long-lived asset or asset group; (v) a current-period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset or asset group; or (vi) a current expectation that, more likely than not, a long-lived asset or asset group will be sold or otherwise disposed of significantly before the end of its previously estimated useful life.

     An estimate of the related undiscounted cash flows, excluding interest, over the remaining life of the property and equipment and long-lived assets is used in assessing recoverability. Impairment loss is measured by the amount which the carrying amount of the asset(s) exceeds the fair value of the asset(s). The Company primarily employs two methodologies for determining the fair value of a long-lived asset: (i) the amount at which the asset could be bought or sold in a current transaction between willing parties or (ii) the present value of estimated expected future cash flows grouped at the lowest level for which there are identifiable independent cash flows.

 

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ONCOLOGIX TECH, INC. AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

NONCONTROLLING INTEREST

 

ASC 810 - Consolidation addresses the accounting and reporting standards for ownership interest in subsidiaries held by parties other than the parent, the amount of consolidated net income attributable to the parent and to the non-controlling interest, changes in a parent’s ownership interest, and the valuation of retained non-controlling equity investments when a subsidiary is deconsolidated. During fiscal 2009, the Company issued a ten percent interest in its subsidiary, Oncologix Corporation, to IUTM as required in a technology agreement. The Company valued this interest at $212. Through February 28, 2013, the Company has allocated $3,694 losses to its non-controlling interest. The Company has adopted ASC 810 to account for this non-controlling interest.

 

ADVERTISING COSTS

 

Advertising costs included with selling, general and administrative expenses in the accompanying consolidated statements of operations were nil for the three and six months ended February 28, 2013 and February 29, 2012. Such costs are expensed when incurred.

 

INCOME TAXES

 

The Company adopted the provisions of FASB ASC 740 - Income Taxes provides detailed guidance for the financial statement recognition, measurement and disclosure of uncertain tax positions recognized in the financial statements. Income taxes are determined using the asset and liability method. This method gives consideration to the future tax consequences associated with temporary differences between the carrying amounts of assets and liabilities for financial statement purposes and the amounts used for income tax purposes.

 

FAIR VALUE OF FINANCIAL INSTRUMENTS

 

The estimated fair values for financial instruments are determined at discrete points in time based on relevant market information. These estimates involve uncertainties and cannot be determined with precision. The carrying amounts of accounts payable, accrued expenses, and notes payable approximate fair value.

 

STOCK-BASED COMPENSATION

 

The Company has a stock-based compensation plan, which is described more fully in Note 5. The Company accounts for stock-based compensation in accordance with ASC 718. Under the fair value recognition provisions of this statement, share-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense over the vesting period. The Company estimates the fair value of stock options granted using the Black-Scholes option valuation model. The fair value of all awards is amortized on a straight-line basis over the vesting periods. The expected term of awards granted represent the period of time they are expected to be outstanding. The Company determines the expected term based on historical experience with similar awards, giving consideration to the contractual terms and vesting schedules. The Company estimates the expected volatility of its common stock at the date of grant based on the historical volatility of its common stock. The risk-free interest rate is based on the U.S. treasury security rate estimated for the expected life of the options at the date of grant. If actual results differ significantly from estimates, stock-based compensation could be impacted.

 

CONVERTIBLE DEBT

 

Interest on convertible debt is calculated using the simple interest method. The company recognizes a beneficial conversion feature to the extent the conversion price is less than the closing stock price on the issuance of the convertible notes. The Company also follows ASC 470-50 and ASC 470-20 regarding changes in the terms of the convertible notes and the induced conversion of its convertible debt.

 

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ONCOLOGIX TECH, INC. AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

RECLASSIFICATIONS

 

Certain prior year amounts have been reclassified to conform to the current year presentation.

 

NET LOSS PER COMMON SHARE

 

Basic earnings (loss) per share is calculated under the provisions of ASC 260 which provides for calculation of “basic” and “diluted” earnings per share. Basic earnings per share includes no dilution and is calculated by dividing income (loss) available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share is calculated based on the weighted average number of common shares outstanding during the period plus the dilutive effect of common stock purchase warrants and stock options using the treasury stock method and the dilutive effects of convertible notes payable and convertible preferred stock using the if-converted method. On Basic and diluted earnings per share for the three and six months ended February 28, 2013 and February 29, 2012 are as follows:

 

   For the Three Months Ended   For the Six Months Ended 
   February 28,   February 29,   February 28,   February 29, 
   2013   2012   2013   2012 
                 
Net loss attributable to common shareholders $(53,726) $(3,213) $(100,666) $(188,052)
                 
Weighted average shares outstanding  59,968   54,410.702   59,007,917   53,681,705 
                 
Loss per common share, basic and diluted: $(0.00) $(0.00) $(0.00) $(0.00)

 

 

Due to the net losses during the three and six months ended February 28, 2013 and February 29, 2012, basic and diluted loss per share was the same, as the effect of potentially dilutive securities would have been anti-dilutive. Shares attributable to convertible notes, stock options, preferred stock and warrants not included the diluted loss per share calculation. Below lists all dilutive securities as of February 28, 2013 and February 29, 2012:

 

  As of
  February 28,  February 29,
  2013  2012
    Underlying      Underlying  
Description   Common Shares      Common Shares  
Convertible preferred stock  64,531    64,531 
Convertible notes payable  1,383,459    1,383,459 
Options  267,085    297,085 
Warrants  —      —   
          
Total potentially dilutive securities  1,715,075    1,745,075 

 

SEGMENT INFORMATION

 

ASC 280-10 defines operating segments as components of a company about which separate financial information is available that is evaluated regularly by the chief decision maker in deciding how to allocate resources and in assessing performance. The Company currently has one operating segments: medical device.

 

10

 

 

 
 

 

ONCOLOGIX TECH, INC. AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

RECENT ACCOUNTING PRONOUNCEMENTS

 

We have evaluated all Accounting Standards Updates through the date the financial statements were issued and do not believe any will have a material impact.

 

NOTE 3 — GOING CONCERN

 

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company has incurred losses from operations over the past several years and anticipates additional losses in fiscal 2013 and prior to achieving breakeven.

 

With the acquisition of Dotolo Research Corporation (“Dotolo”) on March 22, 2013, we anticipate that we will require approximately $500,000 to operate through December 2013. Please see Note 11- Subsequent Events and our Current Report on Form 8-K filed with the SEC on March 27, 2013 for further information on our acquisition of Dotolo Research Corporation. The required operating capital was calculated without regard to repaying any outstanding accounts payable, convertible or non-convertible notes payable, as well as the possibility of funding the future marketing costs for our joint venture with IUTM as described in Notes 4 and 8. This funding will allow us to meet our current sales demands and expenses of Dotolo and Oncologix, while keeping our public filings current. Our Company has never been profitable and we have had to rely on debt and equity financings to fund operations. There is no assurance that the business activities of Dotolo Research Corporation will achieve breakeven status by the end of 2013. Significant delays in achieving breakeven status could affect the ability to obtain future debt and equity funding. These factors raise substantial doubt about the Company’s ability to continue as a going concern. After auditing our financial statements, our independent auditor issued a going concern opinion and our ability to continue is dependent on our ability to raise additional capital. Currently there is a substantial doubt in the Company’s ability to continue as a going concern.

 

On May 19, 2011, the Company affected a 1 for 4 reverse stock split. This reverse split will give the Company the ability to raise additional operating funds for both our potential joint ventures, and to fund further ongoing operations. While there is no guarantee that funds will be available, we believe this reverse split will allow us to consummate our joint ventures and move towards a positive cash flow position.

 

NOTE 4 — NOTES PAYABLE

 

CONVERTIBLE NOTES PAYABLE:

 

Convertible notes payable consist of the following as of February 28, 2013 and February 29, 2012:

 

   February 28,  August 31,
   2013  2012
           
8.0% convertible notes due September 30, 2013  $125,000   $125,000 
           
           
Total unsecured convertible notes payable   125,000    125,000 
Less:  Current portion   (125,000)   —   
           
Long-term portion  $—     $125,000 

 

During May and June 2007, we issued nine Convertible Promissory Notes in an aggregate principal amount of $700,000. These Convertible Promissory Notes were due May 7, 2008, bore interest at the rate of 8% per annum and were convertible into our common stock at a rate of $1.00. Eight of these notes were converted into common stock in fiscal 2009. The remaining Convertible Promissory Note, in the principal amount of $125,000, was extended on January 28, 2010 initially to March 31, 2012 and then extended to September 30, 2013. In conjunction with the initial extension, the conversion price was reduced to $0.60. As of February 28, 2013, the Company has accrued interest in the amount of $47,534.

 

11

 

 

 
 

 

ONCOLOGIX TECH, INC. AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

 

CONVERTIBLE RELATED PARTY NOTES PAYABLE:

 

Convertible related party notes payable consist of the following as of February 28, 2013 and February 29, 2012:

 

   February 28,  August 31,
   2013  2012
           
6.0% convertible note due September 30, 2013 (1)  $235,025   $235,025 
           
           
Total unsecured related party convertible notes payable   235,025    235,025 
Less:  Current portion   (235,025)   —   
           
Long-term portion  $—     $235,025 
           
(1)  Note payable to former CEO who resigned 4/1/09 and still remains a director of our subsidiary. 

 

On April 1, 2009, we issued to Ms. Lindstrom, our former Chief Executive Officer and current member of our subsidiary’s Board of Directors, a convertible promissory note in lieu of payment of $235,025 in accrued salary owed to Ms. Lindstrom. This note accrues interest at a rate of 6% per annum and was originally due on March 31, 2012. The note is convertible into shares of the Company’s common stock at a rate of $0.20 per common share. Ms. Lindstrom signed an abstention to convert this note until June 01, 2011. On March 16, 2012, Ms. Lindstrom agreed to extend the due date of the note to September 30, 2013. There was no beneficial conversion feature recognized upon the issuance of this note. As of February 28, 2013, the Company has accrued interest in the amount of $55,208.

 

On February 8, 2013, the Company issued a 30-Day convertible promissory note to Anthony Silverman, its President and CEO, in the principal amount of $10,242. This convertible note was issued to pay off a previously issued 90-Day promissory note. This note bears interest at 6% and is convertible into the company’s common stock at $0.01 per shares. On February 8, 2013, Mr. Silverman elected to convert the note and accrued interest into 1,024,164 shares of common stock. The Company also recorded a $10,242 loss on the conversion of this note.

 

RELATED PARTY NOTES PAYABLE:

 

    February 28,    August 31, 
    2013    2012 
   $—     $—   
         —   
           
Outstanding unsecured related party notes payable  $—     $—   

 

On September 14, 2012, the Company issued a 90-Day promissory note to Anthony Silverman, its President and CEO, in the principal amount of $10,000. The note bore interest at 6% per annum. This note was further extended to February 11, 2013. On February 8, 2013, this note was paid off together with accrued interest of $242 by the issuance of a convertible promissory note. Please see Convertible Related Party Notes Payable for further information.

 

On October 11, 2012, the Company issued a 30-Day promissory note to Anthony Silverman, its President and CEO, in the principal amount of $5,000. The note bore an interest rate of 6%. This note was paid off, together with accrued interest of $5 on October 17, 2012.

 

On November 23, 2012 the Company issued a 90-Day promissory note to Anthony Silverman, its President and CEO, in the principal amount of $5,000. The note bore interest at 6% per annum. This note was paid off, together with accrued interest of $39 on January 9, 2013.

 

12

 

 

 
 

 

 

ONCOLOGIX TECH, INC. AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

OTHER NOTES PAYABLE:

 

On October 31, 2012, the Company entered into a note payable agreement to finance $10,404 of directors and officer’s insurance premiums. The note bears interest at a rate of 9.27% per annum and is due in ten monthly installments of $1,085, including principal and interest, beginning on November 30, 2012.

 

   February 28,  August 31,
   2013  2012
9.27% note payable due August 31, 2013  $6,337   $—   
           
           
Outstanding unsecured related party convertible notes payable  $6,337   $—   

 

NOTE 5 — STOCKHOLDERS EQUITY

PREFERRED STOCK:

 

The Company is authorized to issue up to 10,000,000 shares of preferred stock, in one or more series, and to determine the price, rights, preferences and privileges of the shares of each such series without any further vote or action by the stockholders. The rights of the holders of common stock will be subject to, and may be adversely affected by, the rights of the holders of any shares of preferred stock that may be issued in the future.  

 

In January 2003, our Board of Directors authorized up to 4,500,000 shares of Series A Convertible Preferred Stock.  Each share of Series A Convertible Preferred stock has a par value of $0.001 and is convertible into one-half share of common stock in upon a cash payment by the holder to the Company of $0.40 per common share.  The Series A Convertible Preferred Stock is entitled to receive, in preference to the common stock, of noncumulative dividends, if declared by the Board of Directors, and a claim on the Company's assets upon any liquidation of the Company senior to the common stock.  These preferred shares are not entitled to voting rights. There are presently outstanding 129,062 shares of Series A Preferred Stock.

 

On March 30, 2003, the Company completed the private placement of Units pursuant to the terms of a Unit Purchase Agreement (the “Units”) with accredited investors. Each Unit consists of the following underlying securities: (i) three shares of the Company’s common stock; (ii) one share of Series A Convertible Preferred Stock, par value $.001 per share; and (iii) one three-year warrant to purchase one share of common stock at a per share price of $0.30. The warrants expired on March 31, 2006. Each share of Series A Convertible Preferred Stock is convertible into one half share of the Company’s common stock in exchange for $0.40 per common share ($.20 for each Series A Convertible Preferred share converted). The securities underlying the Units are not to be separately tradable or transferable apart from the Units until such time as determined by the Company’s Board of Directors. A total of 4,032,743 Units were issued. As of February 28, 2013 and August 31, 2012, there were 129,062 and 129,062 Units outstanding that had not been separated, respectively. These units are presented as their underlying securities on our balance sheet and consist of 64,531 shares of Series A Preferred Stock and 96,797 shares of common stock which is included in the issued and outstanding shares.

 

13

 

 

 

 
 

 

ONCOLOGIX TECH, INC. AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

Below is a table detailing the outstanding Series A Convertible Preferred Stock shares outstanding during the last two fiscal years:

 

    Preferred    Number of          Weighted Avg. 
    Shares    Common Shares    Proceeds if    Per Common Sh. 
    Outstanding    Convertible    Converted    Exercise Price 
Outstanding, August 31, 2011   129,062    64,531   $25,812   $0.40 
                     
Expired/Retired   —      —      —     $—   
Converted   —      —      —     $0.40 
Issued   —      —      —     $—   
Outstanding, August 31, 2012   129,062    64,531   $25,812   $0.40 
                     
Expired/Retired   —      —      —     $0.40 
Converted   —      —      —     $—   
Issued   —      —      —     $—   
Outstanding, February 28, 2013   129,062    64,531   $25,812   $0.40 

 

Our Board of Directors authorized the separation of the Units into their component parts in July 2004, February 2005, April 2008, March 2010 and July 2011. The table below describes the proceeds received for the conversion of preferred shares into common stock:

 

Date of Conversion Proceeds from Conversion Further Description and Remarks
July-August 2004 $487,523 During July and August 2004, holders of 2,437,614 Units contributed $487,523 to convert 2,437,614 shares of Series A. Convertible Preferred stock into 4,875,228 shares of common stock.
February 2005 $230,393 During February 2005, holders of 1,151,967 Units contributed $230,393 to convert 1,151,967 shares of Series A. Convertible Preferred stock into 2,303,934 shares of common stock.
April/June 2008 $29,460 During April and June 2008, holders of 147,300 Units contributed $29,460 to convert 147,300 shares of Series A. Convertible Preferred stock into 294,600 shares of common stock.
March/April 2010 $6,820 During March and April 2010, holders of 34,100 Units contributed $6,820 to convert 34,100 shares of Series A. Convertible Preferred stock into 68,200 shares of common stock.
July 2011 $0 During July 2011, holders of 132,700 Units elected to relinquish conversion of 132,700 shares of Convertible Preferred stock as part of splitting their Units.

 

SUBSCRIBED COMMON STOCK:

 

As of February 28, 2013 and August 31, 2012, there were no shares of subscribed stock issuable.

 

14

 

 

 
 

 

ONCOLOGIX TECH, INC. AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

COMMON STOCK:

 

Below are recent sales of unregistered securities:

 

Date of Sale Proceeds from Sale Further Description and Remarks
October 19, 2011 $25,000 On October 19, 2011, the Company sold 625,000 shares of common stock to a non-related accredited investor at $0.04 per share.
January 26, 2012 $40,000 On January 26, 2012, the Company sold 1,000,000 shares of common stock to a non-related accredited investor at $0.04 per share.
April 26, 2012 $10,000 On April 26, 2012, the Company sold 250,000 shares of common stock to a non-related accredited investor at $0.04 per share.
October 15, 2012 $20,000 On October 15, 2012, the Company sold 1,000,000 shares of common stock to a non-related accredited investor at $0.02 per share.
January 6, 2013 $20,000 On January 6, 2013, the Company sold 2,000,000 shares of common stock to three non-related accredited investors at $0.01 per share.
February 8, 2013 $0 On February 8, 2013, Anthony Silverman, our former president and CEO, converted a promissory note in the amount of $10,242 in principal and interest into 1,024,164 shares of common stock  at $0.01 per share.

 

NON-CONTROLLING INTEREST

 

On February 27, 2009, in connection with the Technology Agreement we entered into with Institut für Umwelttechnologien GmbH, a German Company (“IUT”) whereunder the parties have agreed that the Company’s marketing rights have been transferred to its subsidiary, Oncologix Corporation and have issued IUTM 10% of the equity ownership of that subsidiary. As of February 27, 2009, the value of the non-controlling interest was $212. It was determined at August 31, 2010 the value of the investment in IUTM was impaired. Accordingly, we recorded an impairment loss in the amount of $3,186 for the year ended August 31, 2010. As of February 28, 2013, $3,694 cumulative net loss was attributable to the non-controlling interest.

 

WARRANTS:

 

At February 28, 2013 and August 31, 2012, the Company did not have any outstanding warrants.

 

STOCK OPTIONS:

 

The Company is authorized to issue up to 4,600,000 shares of common stock under its 1997 Stock Incentive Plan. Shares may be issued as incentive stock options, non-statutory stock options, deferred shares or restricted shares. Options are granted at the fair market value of the common stock on the date of the grant and have terms of up to ten years.

 

15

 

 

 

 
 

 

ONCOLOGIX TECH, INC. AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

The Company is authorized to issue up to 7,500,000 shares of common stock under its 2000 Stock Incentive Plan. Shares may be issued as incentive stock options, non-statutory stock options, deferred shares or restricted shares. Options are granted at the fair market value of the common stock on the date of the grant and have terms of up to ten years. The 2000 Stock Incentive Plan also provides for an annual grant of options to members of our Board of Directors. For fiscal years ended August 31, 2012, 2011, 2010, 2009 and 2008, our Board of Directors have elected to waive the grant of these annual options.

 

ASC 718 requires the estimation of forfeitures when recognizing compensation expense and that this estimate of forfeitures be adjusted over the requisite service period should actual forfeitures differ from such estimates. Changes in estimated forfeitures are recognized through a cumulative adjustment, which is recognized in the period of change and which impacts the amount of unamortized compensation expense to be recognized in future periods.

 

ASC 718 requires that modification of the terms or conditions of an equity award is to be treated as an exchange of the original award for a new award. This event is accounted for as if the entity repurchases the original instrument by issuing a new instrument of equal or greater value, incurring additional compensation cost for any incremental value.

 

During the three and six months ended February 28, 2013 and February 29, 2012, we granted nil and nil options from the stock incentive plans described above, respectively. During the three and six months ended February 28, 2013 and February 29, 2012, nil and nil options were exercised, respectively. During the three and six months ended February 28, 2013 and February 29, 2012, nil and nil options were forfeited, respectively. During the three and six months ended February 28, 2013 and February 29, 2012, 15,000 and 30,000 and nil options were expired, respectively. During the three and six months ended February 28, 2013 and February 29, 2012, $0 and $0 was expensed as stock based compensation, respectively.

 

   Number of Options Granted   Option Price Per Share   Weighted Average Exercise Price Per Share 
             
Outstanding August 31, 2011  297,085   $0.12-$5.16  $1.43 
Granted         
Exercised         
Cancelled        
Outstanding, August 31, 2012  297,085   $0.12-$5.16  $1.43 
Granted            
Exercised         
Cancelled  (30,000)  $2.40-$5,16   3.78 
Outstanding, February 29, 2013  267,085   $0.12-$2.00  $1.17 

 

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between our closing stock price on the last trading day of the first quarter of fiscal 2013 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on February 28, 2013.

 

  Options  Options 
  Outstanding  Exercisable 
Number of options  282,085   282,085 
Aggregate intrinsic value of options $  $ 
Weighted average remaining contractual term (years)  1.49   1.49 
Weighted average exercise price $1.17  $1.17 
         

 

 

16

 

 

 

 
 

 

 

 

ONCOLOGIX TECH, INC. AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

Expected volatility is based primarily on historical volatility. Historical volatility is computed using weekly average pricing observations for an applicable historic period. We believe this method produces an estimate that is representative of our expectations of the future volatility over the expected term of our options. We currently have no reason to believe future volatility over the expected life of these options is likely to differ materially from historical volatility. The weighted-average expected life is based upon share option exercises, pre and post vesting terminations and share option term expirations. The risk-free interest rate is based on the U.S. treasury security rate estimated for the expected life of the options at the date of grant.

 

We have 6,392,418 and 4,525,000 shares of common stock available for future issuance under our 2000 Stock Incentive Plan and 1997 Stock Incentive Plan, respectively, as of February 28, 2013. Under the 2000 Stock Incentive Plan and 1997 Stock Incentive Plan, the price of the granted common stock options are equal to the fair market value of such shares on the date of grant. Both of these plans have been approved by our shareholders.

 

NOTE 6 — COMMITMENTS AND CONTINGENCIES

 

CONSULTING CONTRACT

 

On September 1, 2012, Michael Kramarz, the Company’s Chief Financial Officer, signed an additional twelve month consulting agreement. Mr. Kramarz is to perform all his regular duties he had previously performed as Chief Financial Officer including the preparation of the Company’s financial statements, SEC Filings, maintenance of corporate records, etc. Mr. Kramarz is to be compensated $70 per hour worked and will turn in weekly time sheets for approval. Mr. Kramarz had previously had consulting contracts for the period of January 2008 through August 2012. During the six months ended February 28, 2013 and February 29, 2012, we incurred an expense of $44,940 and $36,050 respectively, under these agreements.

 

NOTE 7 — RELATED PARTY TRANSACTIONS

 

FINANCING WITH RELATED PARTIES:

 

During the six months ended February 28, 2013 and February 29, 2012, the Company entered into financing agreements with related parties of the Company. Please see Note 4 for further descriptions of these transactions.

 

 

17

 

 

 
 

 

ONCOLOGIX TECH, INC. AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 8 – JOINT VENTURES

 

Institut für Umwelttechnologien GmbH (IUT)

 

In February 2009, we entered into a Technology Agreement with Institut für Umwelttechnologien GmbH, a German Company (“IUT”) whereunder the parties have agreed that:

 

(a)The Company has granted an exclusive license to a new IUT subsidiary, called “IUTM”, to develop and manufacture products based on the Company’s proprietary information. This proprietary information is not based on the technology that had been subject to the Master License Agreement with the University of Maryland – Baltimore. The Company has also transferred to IUTM a number of items of laboratory equipment and inventory useful in connection with the licensed information.
(b)The Company retains rights to market products based on such information as well as first consideration for marketing rights for other possible IUTM products.
(c)In consideration of the license, the Company has received a 10% equity interest in IUTM, which is organized as a private German limited liability company and IUT has assumed approximately $82,000 of the Company’s indebtedness.
(d)The Company’s marketing rights have been transferred to its subsidiary, Oncologix Corporation and have issued IUTM 10% of the equity ownership of that subsidiary.

 

In addition, on April 7, 2009, the Company entered into a Termination Agreement with the University of Maryland – Baltimore, The Master License Agreement between the Company and the University has been formally terminated and each party has released the other from all liabilities arising under the Master License Agreement.

 

We have been advised that IUTM is continuing the development of a brachytherapy device generally as described above but based on proprietary technology not developed by the University of Maryland. During recent discussions with IUTM management, the prior understandings were reaffirmed. While our Management is optimistic as to the outcome of those discussions and future success, it is not possible to predict the probabilities of success with any degree of certainty.

 

On September 23, 2010, the Company signed a Memorandum of Understanding with Institut für Umwelttechnologien GmbH and IUT Medical GMBH confirming certain understandings among the parties with respect to their future relationships and business activities as originally contemplated in their Technology Agreement of February 27, 2009, which was reaffirmed.

 

On May 19, 2011, the Company affected a one-for-four reverse stock split. All share and per share information has been restated to retroactively show the effect of this stock split. The reverse split was approved by a majority of the Company’s shareholders on March 24, 2011.

 

Because the development of the brachytherapy device is not complete and it cannot be marketed at this time, the Company’s management and Board of Directors have determined that the Company has reentered the development stage effective June 1, 2011.  Since the Company has limited operations at this point in time, the Company will be considered a development stage company.  Under the terms of the Agreement described above, the Company believed that we would be able to market the Oncosphere and other medical products IUTM develops.

 

 

18

 

 

 

 
 

 

ONCOLOGIX TECH, INC. AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

 

NOTE 9 – RECENT ACCOUNTING PRONOUNCEMENTS

 

We have evaluated all Accounting Standards Updates through the date the financial statements were issued and do not believe any will have a material impact on our financial condition or results of operations.

 

NOTE 10 – STATEMENT OF CASH FLOWS

 

For the six months ended February 28, 2013, these supplemental non-cash investing and financing activities are summarized as follows:

 

      Amount 
  On October 31, 2012, the Company entered into a note payable agreement to finance $10,404 of directors and officer’s insurance premiums.  The note bears interest at a rate of 9.27% per annum and was due in ten monthly installments of $1,085, including principal and interest, beginning on November 30, 2012.  $10,404 
        
  On February 8, 2013, the Company recognized a loss on the conversion of a related party convertible note payable in the amount of $10,241.   10,241 
        
         Total non-cash transactions from investing and financing activities.  $20,645 

 

 

For the six months ended February 29, 2012, these supplemental non-cash investing and financing activities are summarized as follows:

 

      Amount 
  On October 6, 2011, the Company converted $25,403 of principal and accrued interest into 635,069 shares of its common stock.  These shares were issued in October 2011.  $25,403 
  The Company recognized induced conversion expense as a result of reducing the conversion price on non-related party notes converted during the first quarter of fiscal 2012.   25,402 
        
  On October 6, 2011, the Company converted $71,128 of principal and accrued interest into 1,778,193 shares of its common stock.  This principal and interest was payable to our CEO, Anthony Silverman, a related party.  The shares were issued in October 2011.   71,128 
        
  The Company recognized a loss on the conversion of related party notes during the first quarter of fiscal 2012.   70,000 
        
  The Company recognized a discount on the $10,000 convertible promissory note issued to a related party on October 7, 2011.  The discount is related to a beneficial conversion feature issued in connection with this note.   10,000 
        
  On October 31, 2011, the Company entered into a note payable agreement to finance $8,078 of directors and officer’s insurance premiums.  The note bears interest at a rate of 9.99% per annum and was due in nine monthly installments of $932, including principal and interest, beginning on November 30, 2011.  This note was paid in full during fiscal 2012.   8,078 
        
         Total non-cash transactions from investing and financing activities.  $210,011 

 

19

 

 

 
 

 

ONCOLOGIX TECH, INC. AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

 

For the period since reentering the development stage on June 1, 2011 to February 28, 2013, these supplemental non-cash investing and financing activities are summarized as follows:

      Amount 
  On October 6, 2011, the Company converted $25,403 of principal and accrued interest into 635,069 shares of its common stock.  These shares were issued in October 2011.  $25,403 
        
  The Company recognized induced conversion expense as a result of reducing the conversion price on non-related party notes converted during the first quarter of fiscal 2012.   25,402 
        
  On October 6, 2011, the Company converted $71,128 of principal and accrued interest into 1,778,193 shares of its common stock.  This principal and interest was payable to our CEO, Anthony Silverman, a related party.  The shares were issued in October 2011.   71,128 
        
  The Company recognized a loss on the conversion of related party notes during the first quarter of fiscal 2012.   70,000 
        
  The Company recognized a discount on the $10,000 convertible promissory note issued to a related party on October 7, 2011.  The discount is related to a beneficial conversion feature issued in connection with this note.   10,000 
        
  On October 31, 2011, the Company entered into a note payable agreement to finance $8,078 of directors and officer’s insurance premiums.  The note bears interest at a rate of 8.99% per annum and was due in nine monthly installments of $932, including principal and interest, beginning on November 30, 2011.   8,078 
        
  During fiscal 2011, the Company converted $3,720 of principal and accrued interest into 92,998 shares of its common stock.  These shares were issued in July 2011.   3,720 
        
  The Company recognized conversion expense as a result of reducing the conversion price on notes converted during fiscal 2011.   6,076 
        
  On October 31, 2012, the Company entered into a note payable agreement to finance $10,404 of directors and officer’s insurance premiums.  The note bears interest at a rate of 9.27% per annum and was due in ten monthly installments of $1,085, including principal and interest, beginning on November 30, 2012.   10,404 
        
  On February 8, 2013, the Company recognized a loss on the conversion of a related party convertible note payable in the amount of $10,241.   10,241 
        
         Total non-cash transactions from investing and financing activities.  $240,452 

 

20

 

 

 
 

 

ONCOLOGIX TECH, INC. AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

 

NOTE 11 — SUBSEQUENT EVENTS

 

In accordance with ASC 855-10, Company management reviewed all material events through the date of this report and there are no other material subsequent events to report except the following:

 

On March 8, 2013, the Company issued a 60-Day promissory note to Anthony Silverman, its former President and CEO, in the principal amount of $2,686. The note bears an interest rate of 6%.

 

On March 21, 2013, Anthony Silverman turned in his resignation as Chief Executive Officer and Chairman of the Board. The Company’s Board of Directors nominated Barry Griffith to replace Mr. Silverman as Chief Executive Officer. Please see our Current Report on Form 8-K filed on March 25, 2013.

 

On March 22, 2013, a closing was held pursuant to a Sales Purchase Agreement, dated as of March 22, 2013, (the “Agreement”) by and among Oncologix Tech Inc. (OCLG or Company), and Clearview Medical, LLC (Clearview), for Company to acquire 1,000 shares of Common Stock of Dotolo Research Corporation, which represents all of the issued and outstanding shares of Dotolo Research Corporation. Please see our Current Report on Form 8-K filed with the SEC on March 27, 2013.

 

Pursuant to the Agreement, Clearview Medical, LCC sold all of the Common Stock of Dotolo Research Corporation for shares in the Company with an aggregate amount of 58,564 shares of a newly created Series D Preferred Stock (“New Preferred Shares”) being issued at their par value of $.001 which have a liquidation preference of $4,700,000. Clearview Medical, LLC is the owner of all of the shares of Dotolo Research Corporation, a corporation organized under the laws of the State of Florida, a manufacturer of medical device products principally used in colon cleansing and bowel preparation for Endoscopy, OB/GYN, marketed both domestic and internationally.

 

The New Preferred Shares shall be issued as soon as possible after the Closing Date, but no later than thirty (30) days after the closing date. Each share of New Preferred shall be convertible into 1,000 shares of common stock commencing one year after issuance and, until conversion, shall vote with the common on all matters and have the votes per share set forth below;

 

(a)                 Each share of New Preferred shall proportionally adjust in the event of stock splits or the like;

 

(b)                 Each share of New Preferred shall receive dividends as though it were converted to common stock; and,

 

(c)                 The voting of the New Preferred shall be as follows: initially each share of New Preferred shall have 400 votes; on the first anniversary of their issuance, the voting power of each share of New Preferred shall increase to 800 votes; on the second anniversary of their issuance, the voting power of each share of New Preferred shall increase to 1,200 votes; on the third anniversary of their issuance, the voting power of each share of New Preferred shall increase to 1,600 votes; and on the fourth anniversary of their issuance, the voting power of each share of New Preferred shall increase to 2,000 votes where it shall remain until converted.

 

(d)                The holders of the new preferred shall be entitled to elect one member of the board of directors commencing six months after the closing.

 

Under the terms of the Agreement, Barry Griffith, the current Chairman and CEO of the Company, resigned as CEO and Chairman of the Board. Mr. Griffith agreed to remain a member of the Board of Directors for a minimum period of 180 days.

 

Roy W. Erwin will assume the responsibilities of the Company as Chairman of the Board and Chief Executive Officer. Michael A. Kramarz will remain as the Chief Financial Officer.

 

Please review our Current Report on Form 8-K for further information including Risk Factors, which was filed on March 25, 2013. This acquisition will be accounted for using the acquisition method of accounting.

 

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ITEM 2. Management’s Discussion And Analysis of Financial Condition and Results of Operation

THIS QUARTERLY REPORT ON FORM 10-QSB CONTAINS CERTAIN STATEMENTS WHICH ARE FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE SAFE HARBOR PROVISIONS OF SECTION 27A OF THE SECURITIES ACT OF 1993, AS AMENDED, AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. THESE STATEMENTS RELATE TO FUTURE EVENTS, INCLUDING THE FUTURE FINANCIAL PERFORMANCE OF ONCOLOGIX. IN SOME CASES, YOU CAN IDENTIFY FORWARD-LOOKING STATEMENTS BY TERMINOLOGY SUCH AS “MAY,” “WILL,” “SHOULD,” “EXPECTS,” “PLANS,” “ANTICIPATES,” “BELIEVES,” “ESTIMATES,” “PREDICTS,” “POTENTIAL,” OR “CONTINUE” OR THE NEGATIVE OF SUCH TERMS AND OTHER COMPARABLE TERMINOLOGY. THESE STATEMENTS ONLY REFLECT MANAGEMENT’S EXPECTATIONS AND ESTIMATES AS OF THE DATE OF THIS REPORT. ACTUAL EVENTS OR RESULTS MAY DIFFER MATERIALLY FROM THESE EXPECTATIONS. IN EVALUATING THOSE STATEMENTS, YOU SHOULD SPECIFICALLY CONSIDER VARIOUS FACTORS, INCLUDING THE RISKS INCLUDED IN THE REPORTS FILED BY ONCOLOGIX WITH THE SEC. THESE FACTORS MAY CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM ANY FORWARD-LOOKING STATEMENTS. ONCOLOGIX IS NOT UNDERTAKING ANY OBLIGATION TO UPDATE ANY FORWARD-LOOKING STATEMENTS CONTAINED IN THIS REPORT.

This report should be read in conjunction with our Annual report on Form 10-K for the fiscal year ended August 31, 2012.

FORWARD LOOKING STATEMENTS

 

This Current Report contains forward-looking statements as that term is defined in Section 27A of the United States Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934. These statements relate to future events or future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. Such statements are based on currently available financial and competitive information and are subject to various risks and uncertainties that could cause actual results to differ materially from historical experience and present expectations. Undue reliance should not be placed on such forward-looking statements as such statements speak only as of the date on which they are made. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

 

Forward-looking statements are predictions and not guarantees of future performance or events. The forward-looking statements are based on current industry, financial and economic information, which we have assessed but which by its nature, is dynamic and subject to rapid and possibly abrupt changes. Our actual results could differ materially from those stated or implied by such forward-looking statements due to risks and uncertainties associated with our business. We hereby qualify all our forward-looking statements by these cautionary statements. We undertake no obligation to amend this report or revise publicly these forward looking statements (other than pursuant to reporting obligations imposed on registrants pursuant to the Securities Exchange Act of 1934) to reflect subsequent events or circumstances.

 

These forward-looking statements speak only as of their dates and should not be unduly relied upon. We undertake no obligation to amend this report or revise publicly these forward-looking statements (other than pursuant to reporting obligations imposed on registrants pursuant to the Securities Exchange Act of 1934) to reflect subsequent events or circumstances, whether as the result of new information, future events or otherwise.

 

Throughout this report, unless otherwise indicated by the context, references herein to the “Company”, “Oncologix”, “we”, our” or “us” means Oncologix Tech, Inc.., a Nevada corporation and its corporate subsidiaries and predecessors.

GENERAL DISCUSSION

We were originally formed in 1995 as "Wavetech, Inc." a New Jersey corporation and changed our corporate domicile to Nevada in December 1997, by merging into a Nevada corporation named, "Interpretel International, Inc." We subsequently changed our name, first to "Wavetech International, Inc." and then, in 2000, to "BestNet Communications Corp." Our business at the time was to provide worldwide long distance telephone communication and teleconferencing services to commercial and residential consumers through the internet. That business was never profitable and we were able to continue it only by repeated equity and debt financings. Accordingly, during December 2006, we determined to dispose of that business and sold it during February 2007.

 

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We entered the medical device business at the end of July 2006 through the acquisition of JDA Medical Technologies, Inc. ("JDA"), a development stage company, which was merged into our wholly owned subsidiary, Oncologix Corporation. On January 22, 2007, we changed our name to Oncologix Tech, Inc., to reflect this new business. During June 2007, we moved our principal offices from Grand Rapids, Michigan, to our offices at 3725 Lawrenceville-Suwanee Road, Suite B-4, Suwanee, Georgia, 30024, telephone (770) 831-8818. At that address, our business was the development of a medical device for brachytherapy (radiation therapy), called the “Oncosphere” (or “Oncosphere System”), for the advanced medical treatment of soft tissue cancers. It is a radioactive micro-particle designed to deliver therapeutic radiation directly to a tumor site by introducing the micro-particles into the artery that feeds the tumor tissue. Its first application is expected to be the treatment of liver cancer. Due to a lack of funding, we suspended these development activities on December 31, 2007, whereupon we closed the offices in Suwanee Georgia.

 

Our correct mailing address is P.O. Box 8832, Grand Rapids, MI 49518-8832, telephone (616) 977-9933.

 

During May 2008, we determined to dispose of most of the assets related to the development of the Oncosphere.

 

In February 2009, we entered into a Technology Agreement with Institut für Umwelttechnologien GmbH, a German Company (“IUT”) whereunder the parties have agreed that:

 

(a)The Company has granted an exclusive license to a new IUT subsidiary, called “IUTM”, to develop and manufacture products based on the Company’s proprietary information. This proprietary information is not based on the technology that had been subject to the Master License Agreement with the University of Maryland – Baltimore. The Company has also transferred to IUTM a number of items of laboratory equipment and inventory useful in connection with the licensed information.
(b)The Company retains rights to market products based on such information as well as first consideration for marketing rights for other possible IUTM products.
(c)In consideration of the license, the Company has received a 10% equity interest in IUTM, which is organized as a private German limited liability company and IUT has assumed approximately $82,000 of the Company’s indebtedness.
(d)The Company’s marketing rights have been transferred to its subsidiary, Oncologix Corporation and have issued IUTM 10% of the equity ownership of that subsidiary.

 

In addition, on April 7, 2009, the Company entered into a Termination Agreement with the University of Maryland – Baltimore, The Master License Agreement between the Company and the University has been formally terminated and each party has released the other from all liabilities arising under the Master License Agreement.

 

We have been advised that IUTM is continuing the development of a brachytherapy device generally as described above but based on proprietary technology not developed by the University of Maryland. During recent discussions with IUTM management, the prior understandings were reaffirmed. While our Management is optimistic as to the outcome of those discussions and future success, it is not possible to predict the probabilities of success with any degree of certainty.

 

On September 23, 2010, the Company signed a Memorandum of Understanding with Institut für Umwelttechnologien GmbH and IUT Medical GMBH confirming certain understandings among the parties with respect to their future relationships and business activities as originally contemplated in their Technology Agreement of February 27, 2009, which was reaffirmed.

 

On May 19, 2011, the Company affected a one-for-four reverse stock split. All share and per share information has been restated to retroactively show the effect of this stock split. The reverse split was approved by a majority of the Company’s shareholders on March 24, 2011.

 

Because the development of the brachytherapy device is not complete and it cannot be marketed at this time, the Company’s management and Board of Directors have determined that the Company has reentered the development stage effective June 1, 2011.  Since the Company has limited operations at this point in time, the Company will be considered a development stage company.  Under the terms of the Agreement described above, the Company believed that we would be able to market the Oncosphere and other medical products IUTM develops.

 

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CRITICAL ACCOUNTING POLICIES

 

“Management's Discussion and Analysis or Plan of Operation” (“MDA”) discusses our condensed consolidated financial statements that have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of the financial statements, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, we evaluate our estimates and judgments, including those related to research and development costs, deferred income taxes and the carrying value of long-lived assets.

We base our estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances. The result of these estimates and judgments form the basis for making conclusions about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions; changes in these estimates as a result of future events may have a material effect on the Company’s financial condition.

 

For a summary of all our significant accounting policies, including the critical accounting policies discussed above, see Note 2 – Summary of Significant Accounting Policies in this quarterly report.

 

COMPARISON OF THE THREE AND SIX MONTH PERIODS ENDED FEBRUARY 28, 2013 TO THE THREE AND SIX MONTH PERIODS ENDED FEBRUARY 29, 2012

 

General and Administrative Expense

 

General and administrative expenses included in our results from continuing operations include legal and accounting fees, license fees, travel, payroll and related expenses, directors and officers insurance, and public relations expenses. These expenses relate primarily to general corporate overhead.

General and administrative expense increased to $36,717 during the three-month period ended February 28, 2013, from $32,566, a, increase of 13% or $4,151 in the comparable period in fiscal 2012. Payroll and related expenses increased to $21,783 during the three-month period ended February 28, 2013, from $18,851 in the comparable period in fiscal 2012, due primarily to increased hours from our CFO in preparation of the required SEC reports, additional time required for XBRL review, and additional time working on the business acquisition. Outside services expense increased to $5,275 during the three-month period ended February 28, 2013, from $3,185 in the comparable period in fiscal 2012, due primarily to higher SEC filing costs as a result of additional XBRL filing requirements. Insurance expense increased to $3,194 during the three-month period ended February 28, 2013, from $2,657 in the comparable period in fiscal 2012 due primarily to an increase in our annual Directors and Officers insurance policy premiums.

 

General and administrative expense increased to $80,467 during the six-month period ended February 28, 2013, from $69,210, a, increase of 16% or $11,257 in the comparable period in fiscal 2012. Payroll and related expenses increased to $49,589 during the six-month period ended February 28, 2013, from $40,009 in the comparable period in fiscal 2012, due primarily to increased hours from our CFO in preparation of the required SEC reports, additional time required for XBRL review, and additional time working on the business acquisition. Outside services expense increased to $5,760 during the six-month period ended February 28, 2013, from $3,988 in the comparable period in fiscal 2012, due primarily to higher SEC filing costs as a result of additional XBRL filing requirements. Insurance expense increased to $6,030 during the six-month period ended February 28, 2013, from $5,312 in the comparable period in fiscal 2012 due primarily to an increase in our annual Directors and Officers insurance policy premiums.

 

Depreciation and Amortization

 

Depreciation and amortization decreased to $90 during the three-month period ended February 28, 2013, from $184 in the comparable period in fiscal 2012. The increase in depreciation and amortization was the result of depreciation on fiscal 2012 purchases.

 

Depreciation and amortization decreased to $180 during the six-month period ended February 28, 2013, from $260 in the comparable period in fiscal 2012. The increase in depreciation and amortization was the result of depreciation on fiscal 2012 purchases.

 

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Interest Income

 

There was no reportable interest income during the three or six-month periods ended February 28, 2013 and February 29, 2012.

 

Interest and Finance Charges

 

Interest and finance charges increased to $3,055 for the three-month period ended February 28, 2013, from $2,697, an increase of 13% or $358 for the comparable period in fiscal 2012. The increase is primarily attributable finance charges for purchases on credit.

 

Interest and finance charges increased to $5,906 for the six-month period ended February 28, 2013, from $5,398, an increase of 9% or $508 for the comparable period in fiscal 2012. The increase is primarily attributable finance charges for purchases on credit.

 

Interest and finance charges – related parties decreased to $3,625 for the three-month period ended February 28, 2013, from $7,660, a decrease of 53% or $4,035 for the comparable period in fiscal 2012. The decrease is primarily attributable to the conversion and payoff of several related party notes in fiscal 2012.

 

Interest and finance charges – related parties decreased to $7,278 for the six-month period ended February 28, 2013, from $17,679, a decrease of 59% or $10,401 for the comparable period in fiscal 2012. The decrease is primarily attributable to the conversion and payoff of several related party notes in fiscal 2012.

 

A summary of interest and finance charges is as follows:

 

               Cumulative Since
               Reentering
               Development
   For the Three Months Ended  For the Six Months Ended  Stage on
   February 28,  February 29,  February 28,  February 29,  June 1,
   2013  2012  2013  2012  2011
Interest expense on non-convertible notes  $194   $142   $275   $203   $603 
Interest expense on non-convertible notes - related parties   148    —      285    414    2,473 
Interest expense on convertible notes payable   2,466    2,494    4,959    5,134    18,076 
Interest expense on convertible notes payable - related parties   3,477    3,660    6,993    7,265    24,928 
Amortization of note payable discounts - related parties   —      4,000    —      10,000    10,000 
Other interest and finance charges   395    61    672    61    995 
                          
Total interest and finance charges  $6,680   $10,357   $13,184   $23,077   $57,075 

 

Induced Conversion Expense

 

Induced conversion expense was nil and nil for the three-month periods ended February 28, 2013 and February 29, 2012.

 

Induced conversion expense decreased to $0 for the six-month period ended February 28, 2013, from $25,403, a decrease of more than 100% for the comparable periods in fiscal 2012. The decrease was due to the issuance of shares of common stock for the conversion of a convertible promissory note during the first quarter of fiscal 2012, as a result of reducing the conversion price from $0.08 to $0.04 per share for these conversions.

 

Loss on Conversion of Notes Payable

 

Loss on conversion of notes payable increased to $10,241 for the three -month period ended February 28, 2013, from $0, an increase of more than 100% for the comparable period in fiscal 2012. The increase was due to the issuance of shares of common stock for the conversion of a related party convertible promissory note during the second quarter of fiscal 2013 at below market value.

Loss on conversion of notes payable decreased to $10,241 for the six -month period ended February 28, 2013, from $70,000, a decrease of more than 100% for the comparable period in fiscal 2012. The decrease was due to the issuance of shares of common stock for the conversion of a related party convertible promissory note at below market value.

 

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LIQUIDITY AND CAPITAL RESOURCES

 

With the acquisition of Dotolo Research Corporation on March 22, 2013, we anticipate that we will require approximately $500,000 to operate through December 2013. This funding will allow us to meet our current sales demands and expenses of Dotolo and Oncologix, while keeping all our public filings current. Our operating losses to date have been covered by equity and debt financing obtained from private investors, including certain present and former members of our Board of Directors. There is no assurance that the business activities of Dotolo will achieve breakeven status by the end of 2013. We never achieved positive cash flow or profitability in our prior edeavours.

 

On February 28, 2013, we had cash and cash equivalents of $72. We have historically relied upon the issuance of debt or equity in order to finance our operations. Our operating losses to date have been covered by equity and debt financing obtained from private investors, including certain current and former members of our Board of Directors.

 

Below is a summary listing for the next 12 months, as of February 28 2013, of our required minimum cash payments for our short-term notes payable, short-term convertible notes payable and their respective due dates. To the extent the convertible notes are not converted, funds for repayment will have to be raised through additional debt or equity financings.

 

Due Date  

 

Interest Rate

    Amount    Accrued Interest ***    Total Owed    Convertible/Non-Convertible 
                         
2/11/2013 (1)  6.00%  $10,000   $247   $10,247    Non-convertible 
2/21/2013 (1)  6.00%  $5,000  $74   $5,074    Non-convertible 
9/30/2013 (2)  6.00%  $235,025   $63,476   $298,501    Convertible at $0.20 per share 
9/30/2013  6.00%   $125,000   $53,397   $178,397    Convertible at $0.60 per share 
                         
       $375,025   $117,194   $493,219      
                         
(1) Note payable to former CEO who resigned on 4/1/09 and still remains a director of our subsidiary. 
(2) Note payable to former CEO who resigned on 4/1/09 and still remains a director of our susidiary. 
***  Interest calculated to maturity or conversion

 

INFLATION AND OTHER FACTORS

The Company’s operations are influenced by general economic trends and technology advances in the medical industries.

 

Our activities in the development, manufacture and sale of cancer therapy products are, and will be subject to extensive laws, regulations, regulatory approvals and guidelines. Within the United States, therapeutic radiological devices must comply with the U.S. Federal Food, Drug and Cosmetic Act, which is enforced by the FDA. We are also required to adhere to applicable FDA regulations for Good Manufacturing Practices, including extensive record keeping and periodic inspections of manufacturing facilities. Medical devices such as the Oncosphere cannot be used or sold unless they are approved for specified purposes by the FDA. There are two levels of FDA approval. The first is the granting of approval to evaluate use of the device in human subjects (through an IDE); the second is obtaining approval to market the device to the public for the treatment of specified diseases (PMA).

 

If we are successful in implementing our plans, our business will involve the importing, exporting, design, manufacture, distribution, use and storage of beta and gamma emitting radioisotopes. These activities in the United States are subject to federal, state and local rules relating to radioactive material promulgated by the Nuclear Regulatory Commission ("NRC"), and states that have subscribed to certain standards and local authorities, known as “Agreement States” In addition, we must comply with NRC, state and U.S. Department of Transportation requirements for labeling and packaging shipments of radiation sources to hospitals or others users of our devices. In order to market our devices commercially, we will be required to obtain a sealed source device registration from Agreement States and/or the NRC, depending on the states in which the device will be distributed.

 

Additionally, hospitals in the United States are required to have radiation licenses to hold, handle and use radiation. Many hospitals and/or physicians in the United States will be required to amend their radiation licenses to include our isotopes before receiving and using them. Depending on the state in which the hospital is located, the license amendment will be processed by the responsible subscribing state department or agency or by the NRC.

 

Obtaining such registration, approvals, and licenses can be complicated and time consuming and there is no assurance that any of them can be obtained.

 

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ITEM 3. Quantitative and Qualitative Disclosure about Market Risk

 

We are a smaller reporting company, as defined in Rule 12b-2 promulgated under the Securities Exchange Act of 1934, and accordingly, we are not required to provide the information required by this Item.

 

ITEM 4T. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

Based on an evaluation under the supervision and with the participation of the Company’s management, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, due to the material weaknesses disclosed in its Annual Report on Form 10-K for the year ended August 31, 2012 that remain unremediated, the Company’s disclosure controls and procedures were not effective as of February 28, 2013. As a result of this conclusion, the financial statements for the periods covered by this report were prepared with particular attention to the material weaknesses previously disclosed. Accordingly, management believes that the condensed consolidated financial statements included in the Quarterly Report present fairly, in all material respects, the Company’s financial condition, results of operations and cash flows as of and for the periods presented.

 

Changes in Internal Control Over Financial Reporting

 

There were no changes in our internal controls over financial reporting that occurred during the three months ended February 28, 2013 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

 

 

 

 

 

 

 

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PART II – OTHER INFORMATION

ITEM 1. Legal Proceedings

None

 

ITEM 1A. Risk Factors

We are a “smaller reporting company” as defined by Regulation S-K and as such, are not required to provide the information contained in this item pursuant to Regulation S-K.

 

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

Date of Sale Proceeds from Sale Further Description and Remarks
October 19, 2011 $25,000 On October 19, 2011, the Company sold 625,000 shares of common stock to a non-related accredited investor at $0.04 per share.
January 26, 2012 $40,000 On January 26, 2012, the Company sold 1,000,000 shares of common stock to a non-related accredited investor at $0.04 per share.
April 26, 2012 $10,000 On April 26, 2012, the Company sold 250,000 shares of common stock to a non-related accredited investor at $0.04 per share.
October 15, 2012 $20,000 On October 15, 2012, the Company sold 1,000,000 shares of common stock to a non-related accredited investor at $0.02 per share.
January 6, 2013 $20,000 On January 6, 2013, the Company sold 2,000,000 shares of common stock to three non-related accredited investors at $0.01 per share.
February 8, 2013 $0 On February 8, 2013, Anthony Silverman, our former president and CEO, converted a promissory note in the amount of $10,242 in principal and interest into 1,024,164 shares of common stock  at $0.01 per share.

 

 

ITEM 3. Defaults Upon Senior Securities

None.

ITEM 4. Mine Safety Disclosures

Not applicable.

 

ITEM 5. Other Information

None.

 

 

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ITEM 6. Exhibits

Exhibits Description
     
  31.1 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
     
  31.2 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
     
  32.1 Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
     
  32.2 Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

Dated: April 14, 2013 ONCOLOGIX TECH, INC.
   
   
  By: /s/ Roy Wayne Erwin
  Roy Wayne Erwin, President and Chief Executive Officer
   
  By: /s/ Michael A. Kramarz
  Michael A. Kramarz, Chief Financial Officer

 

 

 

 

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