UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 10-Q

 

x	Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the quarterly period ended March 31, 2014
¨	Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934
	For the transition period  to  __________
	Commission File Number:000-54147

 

BIOPHARMA MANUFACTURING SOLUTIONS, INC.

(Exact name of Registrant as specified in its charter)

 

Delaware	45-1878223
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

 

8001 Irvine Center Dr., Suite 400

Irvine, California 92618

(Address of principal executive offices)

 

(562) 244-9785

(Registrant’s telephone number)

 

____________________________

(Former name, former address and former fiscal year, if changed since last report)

 

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 issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days x  Yes    ¨  No

 

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 (§ 229.405 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 ¨   No x  

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

 

¨ Large accelerated filer Accelerated filer	¨ Non-accelerated filer
x Smaller reporting company

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ¨  Yes    x  No

 

State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 94,300,000

common shares as of May 1, 2014.

 

  

TABLE OF CONTENTS

 

		Page
	PART I - FINANCIAL INFORMATION
Item 1:	Financial Statements	3
Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	10
Item 3:	Quantitative and Qualitative Disclosures About Market Risk	12
Item 4:	Controls and Procedures	12
	PART II - OTHER INFORMATION
Item 1:	Legal Proceedings	13
Item 1A:	Risk Factors	13
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	13
Item 3:	Defaults Upon Senior Securities	13
Item 4:	Mine Safety Disclosures	13
Item 5:	Other Information	13
Item 6:	Exhibits	13
Signatures		14

 

 

 

BIOPHARMA MANUFACTURING SOLUTIONS INC.

(Formerly BEACHWOOD ACQUISITION CORPORATION)

CONDENSED BALANCE SHEETS

                 

---

 

 

 

ASSETS		March 31, 2014				December 31, 2013
		(unaudited)				(audited)
Current assets
Cash		$	128,875			$	202,254
Accounts receivable			16,211				-
Prepaid expense			2,397				-
Deposit			4,094				4,094
Inventory			32,103				9,736
Current assets			183,680				216,084
Equipment, net			3,124				3,436
Total assets		$	186,804			$	219,520
LIABILITY AND STOCKHOLDERS' EQUITY
Current liability
Accrued liability		$	350			$	350
Total liabilities			350				350
Stockholders' equity
Preferred stock, $0.0001 par value, 20,000,000 shares
authorized; none outstanding			-				-
Common stock, $0.0001 par value, 150,000,000 shares
authorized; 94,300,000 shares  issued and outstanding, respectively			9,430				9,430
Discount on common stock issued to shareholder			(400	)			(400	)
Additional paid-in capital			476,464				462,410
Accumulated deficit			(299,041	)			(252,270	)
Total stockholders' equity			186,454				219,170
Total liability and stockholders' equity		$	186,804			$	219,520

 

 

The accompanying notes are an integral part of these unaudited condensed financial statements

 

 

 

 

BIOPHARMA MANUFACTURING SOLUTIONS INC.

(Formerly BEACHWOOD ACQUISITION CORPORATION)

CONDENSED STATEMENTS OF OPERATIONS

Unaudited

             

---

 

 

 

		For the three months ended March 31, 2014				For the three months ended March 31, 2013
Revenues		$	31,442			$	-
Cost of revenues			14,410				-
Gross profit			17,032				-
Operating expenses			63,803				44,160
Loss before income tax			(46,771	)			(44,160	)
Income tax			-				-
Net loss		$	(46,771	)		$	(44,160	)
Loss per share - basic and diluted		$	(0.00	)		$	(0.00	)
Weighted average shares - basic and diluted			94,300,000				94,402,222

 

 

The accompanying notes are an integral part of these unaudited condensed financial statements

 

 

 

 

  

BIOPHARMA MANUFACTURING SOLUTIONS INC.

(Formerly BEACHWOOD ACQUISITION CORPORATION)

CONDENSED STATEMENTS OF CASH FLOWS

Unaudited

                       

---

 

 

 

 

 

		For the three months ended March 31, 2014				For the three months ended March 31, 2013
OPERATING ACTIVITIES
Net loss		$	(46,771	)		$	(44,160	)
Adjustments to Reconcile Net Loss to Net Cash
Used in Operating Activities
Depreciation and Amortization			312				-
Expenses paid by shareholder			14,054				13,543
Changes in operating assets and liabilities
Accounts receivable			(16,211	)			-
Prepaid expense			(2,397	)			375
Inventory			(22,367	)			-
Net cash used in operating activities			(73,379	)			(30,242	)
FINANCING ACTIVITIES
Redemption of common stock			-				(200	)
Net cash provided by financing activities			-				(200	)
Net decrease in cash			(73,379	)			(30,442	)
Cash, beginning of period			202,254				266,650
Cash, end of period		$	128,875			$	236,208

 

 

 

The accompanying notes are an integral part of these unaudited condensed financial statements

 

 

1. OVERVIEW

 

Organization

 

BioPharma Manufacturing Solutions Inc. (“BioPharma” or the “Company”), formerly Beachwood Acquisition Corporation, was incorporated on April 20, 2011 under the laws of the State of Delaware, and was originally incorporated to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions. In August 2011, there was a change of control of Beachwood Acquisition Corporation, and the Company changed its name to BioPharma Manufacturing Solutions Inc.

 

The Company provides engineering consulting services and custom manufactured process equipment to major biotech and pharmaceutical companies in the life sciences industry. The Company intends to take its clients’ manufacturing goals from concept to FDA approval and market realization. The Company will assist in the design of the process used to manufacture the client's product, typically pharmaceuticals, will procure and install the requisite manufacturing equipment, will assist in validation of the process and ready the system for FDA approval.

 

On October 11, 2012, BioPharma and GMR Engineering, Inc., executed an agreement where GMR Engineering Inc., agreed to transfer its BioPharmaceutical Process Engineering and Consulting Services (“BPECS”), a component of GMR Engineering Inc., to the Company in exchange for 1,000,000 shares of the voting common stock of BioPharma.

 

BioPharma had been in the developmental stage since inception and its operations limited to issuing shares to various investors until October 11, 2012. Subsequent to the acquisition, during the fourth quarter of 2012, the Company started recognizing revenue from its engineering and consulting services and is therefore no longer classified as a development stage enterprise. The Company is currently working on recently acquired service contracts.

 

Basis of Presentation

 

The accompanying unaudited condensed interim financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. The accompanying unaudited condensed interim financial statements include all adjustments, composed of normal recurring adjustments, considered necessary by management to fairly state our results of operations, financial position and cash flows. The operating results for interim periods are not necessarily indicative of results that may be expected for any other interim period or for the full year. These unaudited condensed interim financial statements should be read in conjunction with the financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2013 (2013 Form 10-K) as filed with the SEC.

 

Going Concern

 

The Company has sustained losses since its inception on April 20, 2011. It has an accumulated deficit of $299,041 from inception through March 31, 2014. The Company’s continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations, which it has not been able to accomplish to date, and /or obtain additional financing from its stockholders and/or other third parties.

 

These condensed interim financial statements have been prepared on a going concern basis, which implies the Company will continue to meet its obligations and continue its operations for the next fiscal year. The continuation of the Company as a going concern is dependent upon generating enough revenues to support operations, financial support from its stockholders and the ability of the Company to obtain necessary equity financing to continue operations.

 

Management used their personal funds to pay certain overhead expenses incurred by the Company in the first quarter of 2014 and 2013. There is no assurance that the Company will ever be profitable. These condensed interim financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.

 

  

Use of Estimates

 

In preparing these condensed interim financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amount of revenues and expenses during the reporting periods.  Actual results could differ from those estimates.

 

Fair Value of Financial Instruments

 

When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, we consider the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance.  We use the following three levels of inputs in determining the fair value of our assets and liabilities, focusing on the most observable inputs when available:

 

·

Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

·

Level 2 - Quoted prices in markets that are not active; or other inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability.

·

Level 3 - Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable.

 

To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment.  In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy.  In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed is determined based on the lowest level input that is significant to the fair value measurement. The Company’s financial instruments include cash, prepaid expense and accrued liability. The estimated fair value of these instruments approximates its carrying amount due to the short maturity of these instruments.

 

Cash and Cash Equivalents

 

The Company considers all highly-liquid investments with original maturities of three months or less when purchased to be cash equivalents. The Company had no cash equivalents as of March 31, 2014 and December 31, 2013.

 

Concentration of Credit Risk

 

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents. The Company places its cash with high quality banking institutions. From time to time, the Company may maintain cash balances at certain institutions in excess of the Federal Deposit Insurance Corporation limit.

 

Inventory

 

Inventory is stated at the lower of cost or market. Inventory consists primarily of purchased equipment which will be sold to clients as part of engineering consulting services. 

 

Equipment, net

 

Equipment is stated at cost and depreciated using the straight-line method over the estimated service lives of three years. Maintenance and repairs are expensed as incurred and improvements are capitalized. Gains or losses on the disposition of equipment are recorded upon disposal. On September 24, 2013, the Company purchased $3,748 of equipment and depreciation expense amounted to $312 and $0 in the three month periods ended March 31, 2014 and 2013, respectively.

 

 

 

Revenue Recognition

 

The Company recognizes revenue in accordance with Financial Accounting Standards Board Accounting Standards Codification (“ASC”) No. 605, “Revenue Recognition.”   Revenue is recognized only when the price is fixed and determinable, persuasive evidence of an arrangement exists, the service is performed and collectability of the resulting receivable is reasonably assured.

 

Costs of Goods Sold

 

Cost of goods sold includes cost of equipment purchased for resale to customers when providing engineering consulting services.

 

Income Taxes

 

Under ASC 740, "Income Taxes," deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Valuation allowances are established when it is more likely than not that some or all of the deferred tax assets will not be realized. As of March 31, 2014 and December 31, 2013, there were no deferred taxes as the deferred tax asset arising from net operation loss carry forwards was fully offset by a valuation allowance due to the uncertainty of its realization.

 

Share Based Compensation

 

The Company applies ASC 718, “Share-Based Compensation” to account for its service providers’ share-based payments.  Common stock of the Company was issued to service providers to retain their assistance in becoming a U.S. public company, assistance with public company regulations, investors’ communications and public relations with broker-dealers, market makers and other professional services.

 

In accordance with ASC 718, the Company determines whether a share payment should be classified and accounted for as a liability award or equity award.  All grants of share-based payments to service providers classified as equity awards are recognized in the financial statements based on their grant date fair values which are calculated using historical pricing.  The Company has elected to recognize compensation expense based on the criteria that the stock awards vest immediately on the issuance date.  ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in a subsequent period if actual forfeitures differ from initial estimates.  There were no forfeitures of share based compensation.

 

Net Loss per Common Share

 

The Company computes net loss per share in accordance with ASC 260, "Earnings per Share". ASC 260 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period including stock options, using the treasury stock method, and convertible preferred stock, using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential common shares if their effect is anti-dilutive.

 

 

Recent Accounting Pronouncements

 

Adopted

 

In February 2013, FASB issued ASU  2013-04, Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation is Fixed at the Reporting Date.  The objective of the amendments in this update is to provide guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this guidance is fixed at the reporting date, except for those obligations addressed within existing guidance in U.S. GAAP.  The amendment requires an entity to measure obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this guidance is fixed at the reporting date as the sum of the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and an additional amount the reporting entity expects to pay on behalf of its co-obligors.  The entity is required to disclose the nature and amount of the obligation as well as other information about those obligations.  The Company adopted this ASU as of January 1, 2014.  This adoption did not have an effect on our financial statements.

 

 Not Adopted

 

In April 2014, the FASB issued ASU 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity to reduce diversity in practice for reporting discontinued operations. Under the previous guidance, any component of an entity that was a reportable segment, an operating segment, a reporting unit, a subsidiary, or an asset group was eligible for discontinued operations presentation. The revised guidance only allows disposals of components of an entity that represent a strategic shift (e.g., disposal of a major geographical area, a major line of business, a major equity method investment, or other major parts of an entity) and that have a major effect on a reporting entity’s operations and financial results to be reported as discontinued operations. The revised guidance also requires expanded disclosure in the financial statements for discontinued operations as well as for disposals of significant components of an entity that do not qualify for discontinued operations presentation. The updated guidance is effective for periods beginning after December 15, 2014. The Company currently has no operations that are reported as discontinued operations and does not expect the adoption of this guidance to have a material effect on its financial position, results of operations, or cash flows.

 

Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants, and the United States Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future financial statements.

 

 

3. RELATED PARTY TRANSACTIONS

 

During the three months period ended March 31, 2014, the Company’s President paid certain operating expenses, consisting of salaries and overhead expenses, on behalf of the Company. These expenses amounted to $14,054 and have been recorded to Additional paid-in capital as a shareholder contribution.

 

4. COMMON STOCK

 

On February 15, 2013, the Company redeemed 200,000 shares of common stock owned by 2 shareholders for aggregate consideration paid of $200.

 

 

Item 2.     Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Forward-Looking Statements

 

Certain statements contained in this report on Form 10-Q, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of complying with those safe-harbor provisions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Further information concerning our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the Securities and Exchange Commission.

 

Company Overview

 

BioPharma Manufacturing Solutions, Inc. (formerly Beachwood Acquisition Corporation) (the "Company") was incorporated in the State of Delaware in April 2011.

 

The Company was a developmental stage since inception until October 11, 2012, at which time BioPharma and GMR Engineering, Inc., executed an agreement whereby GMR Engineering Inc., agreed to transfer its BioPharmaceutical Process Engineering and Consulting Services (“BPECS”), a component of GMR Engineering Inc., to the Company in exchange for 1,000,000 shares of the Company's common stock. As a result of this acquisition, the Company started recognizing revenue from its principal operations and is therefore no longer classified as a development stage enterprise. Gary Riccio, who is the sole director and officer of the Company, resigned as an officer and director of GMR Engineering effective December 31, 2013.

 

On October 18, 2012, the Company filed with the Securities and Exchange Commission a registration statement on Form S-1 for the offer and sale of 72,000,000 shares of common stock of BioPharma Manufacturing Solutions, Inc. at $.08 per share offered by the holders thereof. That registration statement is not yet effective and no sales have been made pursuant to it.

 

The Company provides engineering consulting services to major biotech and pharmaceutical companies in the life sciences industry. The Company intends to take its clients’ manufacturing goals from concept to Food and Drug Administration (“FDA”) approval and market realization. The Company will assist in the design of the process used to manufacture the client's product, typically pharmaceuticals, will procure and install the requisite manufacturing equipment, will assist in validation of the process and ready the system for FDA approval.

 

The Company also provides technology transfer and scale-up, project management, process design, value engineering, process automation and process validation consulting services to biotechnology and pharmaceutical manufacturers in the life sciences industry. The Company assists its clients in all phases of biopharmaceutical project lifecycle from concept, risk assessment and design through installation, validation and FDA approval.

 

The Company's independent auditors have issued a report raising a substantial doubt about the Company's ability to continue as a going concern. The Company has sustained losses since its inception on April 20, 2011. It has an accumulated deficit of ($299,041) from inception to March 31, 2014. The Company acquired BPECS on October 11, 2012 and did not generate sufficient revenue to meet its obligation requirements. The Company's sufficient contribution as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligation and/or obtaining financing from its shareholders or other sources, as it may be required.

 

Results of Operations for the Three Months Ended March 31, 2014 and 2013

BioPharma Manufacturing Solutions, Inc.

Summary of Results of Operations

 

		Three Months Ended March 31,
		2014				2013
Revenue		$	31,442			$	-
Cost of goods sold			14,410				-
Gross profit			17,032				-
Operating expenses:
General and administrative			48,484				39,626
Research and development			15,006				4,534
Amortization and depreciation			313				-
Total operating expenses			63,803				44,160
Operating loss			(46,771	)			(44,160	)
Income tax			-				-
Net loss		$	(46,771	)		$	(44,160	)

 

Operating Loss; Net Loss

 

Our net loss increased by $2,611 to $46,771 from $44,160, for the three months ended March 31, 2014 compared to March 31, 2013. The increase in net loss compared to the prior year period is primarily a result of increase in our operating expenses partially offsetted by an increase in gross profit. These changes are detailed below:

 

Revenue

 

Our revenue from the three months ended March 31, 2014 was $31,442 compared to $0 for the three months ended March 31, 2013. All of our revenues were derived from the acquisition of BPECS. Although the acquisition of BPECS was completed in October 2012, the Company didn’t not have any billings related to services provided during the quarter ended March 31, 2013.

 

Cost of Goods Sold

 

Our cost of goods sold for the three months ended March 31, 2014 were $14,410, compared to $0 for the three months ended March 31, 2013.  Cost of goods sold represents the cost of equipment we purchase for resale to our clients and when delivered and installed we transfer the related cost from inventory to cost of sales.

 

General and Administrative Expenses

 

General and administrative expenses increased by $8,858, to $48,484 for the three months ended March 31, 2014, from $39,626 for the three months ended March 31, 2013. The main components of general and administrative expenses during the three months ended March 31, 2014 were $29,500 in accounting and legal fees, $12,000 in salaries, $1,032 in corporate and SEC filing fees and $5,952 in other office related expenses. The main components of general and administrative expenses during the three months ended March 31, 2013 were $19,562 in accounting and legal fees, $12,000 in salaries, $2,598 in corporate and SEC filing fees and $5,466 in other office related expenses. The main reason for the increase in general and administrative expenses was an increase in accounting fees due to current review by the SEC of our prior periodic filings and registration statements and amending these forms.

 

Research and Development

 

Our research and development cost were $15,006 for the three months ended March 31, 2014, compared to $4,534 for the three months ended March 31, 2013.  The increase was attributable to increased cost related to developing BioPharma prototype.

 

 

Liquidity and Capital Resources

 

As of March 31, 2014, we had total current assets of $183,680 and we had total current liabilities of $350.

 

Operating activities used $73,379 in cash for the three months ended March 31, 2014, as compared to using $30,242 in cash for the three months ended March 31, 2013. Our net loss of ($46,771) for the three months ended March 31, 2014, increase in accounts receivable and inventory, primarily accounted for the increase in our negative operating cash flow. Financing activities during the three months ended March 31, 2014 generated $0 in cash.

 

As of March 31, 2014 and the date of this report, we have insufficient cash to operate our business at the current level for the next twelve months and insufficient cash to achieve our business goals. The success of our business plan is contingent upon us obtaining additional financing. We intend to fund operations through debt and/or equity financing arrangements, which may be insufficient to fund our capital expenditures, working capital, or other cash requirements. We do not have any formal commitments or arrangements for the sales of stock or the advancement or loan of funds at this time. There can be no assurance that such additional financing will be available to us on acceptable terms, or at all. Our failure to obtain financing would have a material adverse effect on our business.

 

Off Balance Sheet Arrangements

 

As of March 31, 2014, there were no off balance sheet arrangements.

 

Going Concern

 

We have negative working capital and have not yet received significant revenues. These factors create substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustment that might be necessary if we are unable to continue as a going concern. Our ability to continue as a going concern is dependent on generating cash from operations or through the sale of our common stock and/or obtaining debt financing and attaining future profitable operations. Management’s plans include selling our equity securities and obtaining debt financing to fund our capital requirement and ongoing operations; however, there can be no assurance we will be successful in these efforts.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

A smaller reporting company is not required to provide the information required by this Item.

 

Item 4.     Controls and Procedures

 

Disclosure Controls and Procedures

 

We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of March 31, 2014. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, 2014, our disclosure controls and procedures were not effective due to the presence of material weaknesses in internal control over financial reporting.

 

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. Management has identified the following material weaknesses which have caused management to conclude that, as of March 31, 2014, our disclosure controls and procedures were not effective: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines.

 

Remediation Plan to Address the Material Weaknesses in Internal Control over Financial Reporting

 

Our company plans to take steps to enhance and improve the design of our internal controls over financial reporting. During the period covered by this quarterly report on Form 10-Q, we were not able to remediate the material weaknesses identified above. To remediate such weaknesses, we plan to implement the following changes: (i) appoint additional qualified personnel to address inadequate segregation of duties and ineffective risk management; and (ii) adopt sufficient written policies and procedures for accounting and financial reporting. The remediation efforts set out are largely dependent upon our securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may be adversely affected in a material manner.

  

Changes in Internal Control over Financial Reporting

 

No changes were made in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

PART II - OTHER INFORMATION

 

Item 1. Legal Proceedings

 

We are not a party to any pending legal proceeding. We are not aware of any pending legal proceeding to which any of our officers, directors, or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse to us.

 

Item 1A: Risk Factors

 

The “Risk Factors” contained in our Annual Report on Form 10-K filed with the SEC on March 31, 2014 are hereby incorporated by reference herein. Readers are encouraged to read the Form 10-K including those risk factors.

 

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

 

None

 

Item 3. Defaults upon Senior Securities

 

None

 

Item 4. Mine Safety Disclosures

 

Not applicable.

 

Item 5. Other Information

 

None

 

Item 6. Exhibits

 

Exhibit Number		Description of Exhibit
31.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1		Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted 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 has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

	BioPharma Manufacturing Solutions, Inc.
Date:	May 15, 2014
	By:	/s/ Gary Riccio
	Gary Riccio
	Title: President and Chief Executive Officer