Attached files
| file | filename |
|---|---|
| EX-31.1 - CERTIFICATION - Kyto Technology & Life Science, Inc. | kbph_ex311.htm |
| EX-32.1 - CERTIFICATION - Kyto Technology & Life Science, Inc. | kbph_ex321.htm |
| EX-31.2 - CERTIFICATION - Kyto Technology & Life Science, Inc. | kbph_ex312.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
———————
FORM 10-Q
———————
þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 2015
or
¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from: _____________ to _____________
KYTO BIOPHARMA, INC.
(Exact name of registrant as specified in its charter)
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FLORIDA
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000-50390
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65-1086538
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||
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(State or Other Jurisdiction of Incorporation)
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(Commission File Number)
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(I.R.S. Employer Identification No.)
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500 Australian Avenue South, Suite 600 West Palm Beach, FL 33401
(Address of Principal Executive Office) (Zip Code)
(416) 960-8790
(Registrant’s telephone number, including area code)
N/A
(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 registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. þ 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 (ss. 232.405 of this chapter) during the preceding 12 (or for such shorter period that the registrant was required to submit and post such files). o Yes þ 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.
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Large accelerated filer
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o
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Accelerated filer
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o
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Non-accelerated filer
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o
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Smaller reporting company
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þ
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ¨ Yes þ No
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
3,139,747 Common Shares - $0.0001 Par Value - as of February 12, 2016
KYTO BIOPHARMA, INC.
For the quarterly period ended December 31, 2015
INDEX
2
ITEM 1. Condensed FINANCIAL STATEMENTS
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December 31,
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March 31,
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|||||||
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2015
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2015
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( Unaudited )
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||||||||
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ASSETS
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| Current Assets | ||||||||
| Cash | $ | 29 | $ | 2 | ||||
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Total Current Assets
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29 | 2 | ||||||
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Total Assets
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$ | 29 | $ | 2 | ||||
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LIABILITIES AND STOCKHOLDERS' DEFICIT
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||||||||
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Current Liabilities
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||||||||
| Accounts payable | $ | 917 | $ | 431 | ||||
| Accrued liabilities | 25,500 | 12,500 | ||||||
| Accrued liabilities - related party | 50,000 | 20,000 | ||||||
| Loan payable-related party | 31,955 | 8,893 | ||||||
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Total Current Liabilities
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108,373 | 41,824 | ||||||
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Commitments and Contingencies
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||||||||
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Stockholders' Deficit
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||||||||
| Common stock, $0.0001 par value, 100,000,000 shares authorized, 3,139,747 issued and outstanding as of December 31, 2015 and March 31, 2015 respectively | 314 | 314 | ||||||
| Additional paid-in capital | 32,063,476 | 32,063,476 | ||||||
| Accumulated deficit | (32,172,133 | ) | (32,105,612 | ) | ||||
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Total Stockholders' Deficit
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(108,344 | ) | (41,822 | ) | ||||
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Total Liabilities and Stockholders' Deficit
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$ | 29 | $ | 2 | ||||
The accompanying notes are a part of the unaudited condensed financial statements.
3
Condensed Statements of Operations
Unaudited
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For the Three Months Ended
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For the Nine Months Ended
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December 31
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December 31
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2015
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2014
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2015
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2014
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Operating Expenses
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General and administrative
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$ | 27,340 | $ | 21,071 | $ | 66,521 | $ | 83,097 | ||||||||
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Total Operating Expenses
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27,340 | 21,071 | 66,521 | 83,097 | ||||||||||||
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Loss from Operation
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27,340 | 21,071 | 66,521 | 83,097 | ||||||||||||
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Other (Expenses)
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Interest expense
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- | - | - | (3,365 | ) | |||||||||||
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Loss on issuance of common stock
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- | - | - | (13,798,739 | ) | |||||||||||
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Total Other Income (Expense), net
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- | - | - | (13,802,104 | ) | |||||||||||
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Net Loss before taxes
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(27,340 | ) | (21,071 | ) | (66,521 | ) | (13,885,201 | ) | ||||||||
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Net Income (Tax) Benefit
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- | - | - | - | ||||||||||||
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Net Loss
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(27,340 | ) | (21,071 | ) | (66,521 | ) | (13,885,201 | ) | ||||||||
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Preferred Stock Dividends
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- | - | - | (10,999 | ) | |||||||||||
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Net Loss Attributed to common shareholders
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(27,340 | ) | (21,071 | ) | (66,521 | ) | (13,896,200 | ) | ||||||||
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Weighted average number of shares outstanding
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||||||||||||||||
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basic and diluted
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3,139,747 | 3,139,680 | 3,139,747 | 1,968,878 | ||||||||||||
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Net loss per share - basic and diluted
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$ | (0.01 | ) | $ | (0.01 | ) | $ | (0.02 | ) | $ | (7.05 | ) | ||||
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Net loss per share attributable to Common Shares holders- basic and diluted
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$ | (0.01 | ) | $ | (0.01 | ) | $ | (0.02 | ) | $ | (7.06 | ) | ||||
The accompanying notes are a part of the unaudited condensed financial statements.
4
Condensed Statement of Stockholders' Deficit
For the The Nine Months December 31, 2015
(Unaudited)
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Common Stock
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Additional
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|||||||||||||||||||
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$0.0001 par value
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Paid - in
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Accumulated
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Shares
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Amount
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Capital
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Deficit
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Total
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Balance, March 31, 2015
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3,139,747 | $ | 314 | $ | 32,063,476 | $ | (32,105,612 | ) | $ | (41,822 | ) | |||||||||
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Net Loss
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- | - | - | (66,521 | ) | (66,521 | ) | |||||||||||||
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Balance, December 31, 2015
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3,139,747 | $ | 314 | $ | 32,063,476 | $ | (32,172,133 | ) | $ | (108,344 | ) | |||||||||
The accompanying notes are a part of the unaudited condensed financial statements.
5
Condensed Statements of Cash Flows
Unaudited
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For the Nine Months Ended December
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2015
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2014
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Cash Flows from Operating Activities:
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| Net loss | $ | (66,521 | ) | $ | (13,896,200 | ) | ||
| Adjustment to reconcile net loss to net cash used in operating activities: | ||||||||
| Loss on issuance of stock | 13,798,739 | |||||||
| Stock issued for directors fees | 15,000 | |||||||
| Stock issued for consulting fees | 20,000 | |||||||
| Changes in operating assets and liabilities: | ||||||||
| Accrued liabilities related party | 30,000 | 30,000 | ||||||
| Accrued liabilities | 13,000 | (14,329 | ) | |||||
| Accrued interest related party | - | 3,366 | ||||||
| Preferred dividends payable | - | 10,999 | ||||||
| Accounts payable and accrued expenses | 486 | 577 | ||||||
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Net Cash Used in Operating Activities
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(23,035 | ) | (31,848 | ) | ||||
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Cash Flows from Investing Activities:
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Net Cash Used in Investing Activities
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- | - | ||||||
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Cash Flows from Financing Activities:
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| Loan proceeds from related parties, net | 23,062 | 31,945 | ||||||
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Net Cash Provided by Financing Activities
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23,062 | 31,945 | ||||||
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Net increase in Cash and Cash Equivalents
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27 | 97 | ||||||
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Cash and Cash Equivalents at Beginning of Period
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2 | 3 | ||||||
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Cash and Cash Equivalents at End of Period
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$ | 29 | $ | 100 | ||||
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Supplemental Disclosure of Cash Flow Information:
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||||||||
| Cash paid for: | ||||||||
| Interest | $ | - | $ | - | ||||
| Income Taxes | $ | - | $ | - | ||||
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Non- Cash Investing and Financing Activities
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||||||||
| Common Stock issued in connection with old debt | 411,292 | |||||||
| Common Stock issued in connection with conversion of preferred stock | $ | - | $ | 473,624 | ||||
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Total non-cash change
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$ | - | $ | 884,916 | ||||
The accompanying notes are a part of the unaudited condensed financial statements.
6
December 31, 2015
NOTE 1 – DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
Kyto Biopharma, Inc. was formed as a Florida corporation on March 5, 1999. On August 14, 2002, the Company changed its name from B Twelve, Inc. to Kyto Biopharma, Inc.
The Company is a biopharmaceutical company, formed to acquire and develop innovative minimally toxic and non-immunosuppressive proprietary drugs for the treatment of cancer, arthritis, and other proliferate and autoimmune diseases. The Company is currently not in the development stage and was in “development stage” till June 30, 2011.
Activities during the development stage include acquisition of financing and intellectual properties and research and development activities conducted by others under contracts.
USE OF ESTIMATES
In preparing financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and revenues and expenses during the period presented. Actual results may differ from these estimates.
Significant estimates during 2015 and 2014 include depreciable lives on equipment, valuation of intangible assets, the valuation allowance of deferred tax assets, and the valuation of non-cash stock based transactions.
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. There were no cash equivalents at December 31, 2015 and March 31, 2015, respectively.
CONCENTRATIONS
The Company maintains its cash in bank deposit accounts, which, at times, may exceed federally insured limits. As of December 31, 2015, the Company did not have any deposits in excess of federally insured limits. The Company has not experienced any losses in such accounts through December 31, 2015 and March 31, 2015, respectively.
The Company has obtained and continues to obtain a large amount of its funding from loans and equity funding from a principal stockholder related to a director of the Company.
STOCK-BASED COMPENSATION
Financial Accounting Standards Board Accounting Standards Codification Topic 718, Stock Compensation requires generally that all equity awards granted to employees be accounted for at “fair value.” This fair value is measured at grant for stock settled awards, and at subsequent exercise or settlement for cash-settled awards.
Under this method, the Company records an expense equal to the fair value of the options or warrants issued. The fair value is computed using the Black Scholes options pricing model.
7
NOTE 2 – INTERIM REVIEW REPORTING
The accompanying unaudited condensed financial statements of Kyto Biopharma, Inc. (the "Company") have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC). Certain information and footnote disclosures, normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such SEC rules and regulations. Nevertheless, the Company believes that the disclosures are adequate to make the information presented not misleading. These interim unaudited condensed financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company's March 31, 2015 Annual Report as filed on Form 10K. In the opinion of management, all adjustments, including normal recurring adjustments necessary to present fairly the financial position of the Company with respect to the interim unaudited condensed financial statements and the results of its operations for the interim period ended December 31, 2015, have been included. The results of operations for interim periods are not necessarily indicative of the results for a full year.
NOTE 3 – GOING CONCERN
As reflected in the accompanying unaudited condensed financial statements, the Company has a working capital deficiency of $108,344, a deficit accumulated of $32,172,133 and a stockholders' deficit of $108,344 as of December 31, 2015. The ability of the Company to continue as a going concern is dependent on the Company's ability to further implement its business plan, raise capital, and generate revenues. The unaudited condensed financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
The Company has yet to generate an internal cash flow, and until the sales of its product begins, the Company is highly dependent upon debt and equity funding. The Company must successfully complete its research and development resulting in a saleable product. However, there is no assurance that once the development of the product is completed and finally gains Federal Drug and Administration clearance, that the Company will achieve a profitable level of operations.
NOTE 4 - ACCOUNTING STANDARDS UPDATES
Significant Recent Accounting Pronouncements
Management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying unaudited condensed financial statements.
8
KYTO BIOPHARMA, INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
December 31, 2015
NOTE 5 –RELATED PARTY TRANSACTIONS
During the nine months ended December 31, 2015 and 2014, the Company received a loan from a related party in the amount of $23,062 and $31,945 respectively. At December 31, 2015, and March 31, 2015 the Company owed $31,955 and $8,893 respectively, to related parties of the Company. The loans are non-interest bearing, unsecured and due on demand. The loans are included in loans payable, related party on the accompanying balance sheet.
The Company leases office space and administrative services from a related party principal stockholder. As of December 31, 2015 and March 31, 2015, the remaining balance in the accrued liabilities-related party account for the above services was $50,000 and $20,000, respectively.
NOTE 6- EQUITY
A) CONVERTIBLE PREFERRED STOCK
On May 24, 2007 the Company entered into an agreement with Comindus Finance Corp a related party, to issue up to 500,000 Convertible Preferred Stock at $1.00 per share. This agreement is on an installment basis. During the year ended March 31, 2008, the Company issued 473,624 shares of Convertible Preferred Stock to Comindus Finance Corp. for a total of $473,624 to satisfy a related party loan payable. Convertible Preferred Stock may be converted into Common Shares at a price of $0.45 per Common Share. The Convertible Preferred Stock bears dividends at a rate of 5% per annum. Preferred Convertible Stock has the same voting rights as Common Stock. On September 11, 2014, the convertible stocks were converted to common stock at a price of $0.05 per share.
As of December 31, 2015 and March 31, 2015, there are no preferred shares of the Company issued and outstanding.
B) COMMON STOCK
On September 24, 2015 a submission on Florida Section 607.0704 of the Florida Business Corporation Act was sent to the Company. Pursuant to this Section it is possible for shareholders owning a majority of the outstanding stock of the Company to take an action without the requirement of a meeting.
The action taken by the majority shareholders was taken for the purpose of increasing the share price which could generate interest in the Company by investors and provide business opportunities. The action then adopted a reverse stock split in the amount of a one (1) for ten (10) of our issued and outstanding shares of common stock. By way of explanation, a reverse stock split is a process whereby a company decreases the number of company shares that are available and increases the price per share by combining the current shares into fewer shares. The reverse split does not change the number of authorized shares of common stock. Each stockholder will hold the same percentage of our outstanding common stock immediately following the reverse stock split as she or he did immediately prior to the reverse stock split, except for adjustments required to the treatment of fractional shares.
It should be pointed out that the Company sees no dissenters’ rights with respect to the reverse stock split, and we do not intend to independently provide shareholders with such rights.
As a result of the reverse stock split, every 10 shares of the Company's issued and outstanding common stock automatically combined into one issued and outstanding share of common stock. Unless otherwise noted, impacted amounts and share information included in the financial statements and notes thereto have been retroactively adjusted for the stock split as if such stock split occurred on the first day of the first period presented.
As of December 31, 2015 and March 31, 2015, 3,139,747 shares of the Company common stock were issued and outstanding.
9
PLAN OF OPERATION
The report of our Independent Registered Public Accounting firm dated June 30, 2015 on our March 31, 2015 financial statements includes an explanatory paragraph indicating that there is substantial doubt about our ability to continue as a going concern due to substantial recurring losses from operations, cash used in operations, stockholders’ deficit, significant accumulated deficit and working capital deficit. Our ability to continue as a going concern will be determined by our ability to obtain additional financing and maintain operations. Currently we do not have sufficient financial resources to fund our operations. Therefore, we need additional funds to continue these operations. The Company operates in a rapidly changing environment that involves a number of factors, some of which are beyond management’s control, such as financial market trends and investors’ appetite for new financings. It should be emphasized that, should the Company not be successful in completing its own financing (either by debt or by the issuance of securities from treasury), the Company may be unable to continue to operate as a going concern.
Results of Operations
For the three months ended December 31, 2015 the Company’s net loss attributable to common shareholders increased by $6,269 to $27,340 compared to a net loss of $21,071 for the three months ended December 31, 2014. The Net loss for the three months ended December 31, 2015 increased by $6,269 to $27,340 compared to a net loss of $21,071 for the three months ended December 31, 2014
For the nine months ended December 31, 2015 the Company’s net loss attributable to common shareholders decreased by $13,829,679 to $66,521 compared to a net loss of $13,896,200 for the nine months ended December 31, 2014. The Net loss for the nine months ended December 31, 2015, decreased by $13,818,680 to $66,521 compared to a net loss of $13,885,201 for the nine months ended December 31, 2014.
Liquidity and Capital Resources
The Company had working capital deficits of $108,344 as of December 31, 2015 and $41,822 as of March 31, 2015. Cash was $29 as of December 31, 2015 and $2 as of March 31, 2015.
Cash from operating activities
The Company’s net cash used in operations decreased by $8,813 to $23,035 for the nine months ended December 31, 2015 compared to net cash used in operations of $31,848 for the nine months ended December 31, 2014.
Cash from financing activities
The Company’s net cash flows from financing activities decreased by $8,883 to $23,062 for the nine months ended December 31, 2015 compared to cash flows from financing activities of $31,945 for the nine months ended December 31, 2014.
The Company’s plan of operation for the next twelve months is to continue to focus its efforts on finding new sources of capital and on R&D activities related to the development and application of its antibody technologies. As of the date of filing of this Form 10-Q with the U.S. Securities and Exchange Commission, the Company did receive a commitment of one of its stockholders to continue to provide operating loan funds to the Company.
Not required for smaller reporting company.
10
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that material information required to be disclosed in our periodic reports filed under the Securities Exchange Act of 1934, as amended, or 1934 Act, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and to ensure that such information is accumulated and communicated to our management, including our chief executive officer/chief financial officer (principal financial officer) as appropriate, to allow timely decisions regarding required disclosure. During the quarter ended December 31, 2015 we carried out an evaluation, under the supervision and with the participation of our management, including the principal executive officer and the principal financial officer (principal financial officer), of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rule 13(a)-15(e) under the 1934 Act. Based on this evaluation, because of the Company’s limited resources and limited number of employees, management concluded that our disclosure controls and procedures were ineffective as of December 31, 2015.
Limitations on Effectiveness of Controls and Procedures
Our management, including our Chief Executive Officer and Chief Financial Officer (principal financial officer), does not expect that our disclosure controls and procedures or our internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include, but are not limited to, the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
Internal Controls over Financial Reporting
During the quarter ended December 31, 2015, there have been no changes in our internal control over financial reporting that have materially affected or are reasonably likely to materially affect our internal controls over financial reporting.
11
Not required for smaller reporting company.
12
INDEX TO EXHIBITS
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EXHIBIT NUMBER
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DESCRIPTION
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3(i)(a)
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Articles of Incorporation of Kyto Biopharma, Inc.*
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3(i)(b)
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Articles of Amendment changing name to Kyto Biopharma, Inc.*
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3(ii)
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Bylaws of Kyto Biopharma, Inc.*
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10.1
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Research collaboration agreement between The Research Foundation of State University of New York and B. Twelve Ltd. (Kyto Biopharma, Inc.) [dated August 19, 1999]**
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10.2
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Collaborative Research Agreement to synthesize new vitamin B12 analogs signed between the Company and New York University [dated November 11, 1999]**
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10.3
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Extension/Modification Research Collaboration Agreement between the Research Foundation of State University of New York and B Twelve, Inc., (Kyto Biopharma, Inc.) Modification No. 1 [dated November 01, 2000]**
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10.4
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Debt Settlement Agreement and Put Option (dated November 2002) between Kyto Biopharma, Inc. and New York University.**
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10.5
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Extension/Modification Research Collaboration Agreement between the Research Foundation of State University of New York and Kyto Biopharma, Inc., Modification No. 2 [dated December 2004]. **
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10.6
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Services Agreement between Kyto Biopharma, Inc. and Gerard Serfati [dated November 1, 2004]***
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Section 302 Certification of principal executive officer.**
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Section 302 Certification of principal financial and accounting officer.**
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Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 **
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———————
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*
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Filed as Exhibit to Company's Form 10-SB on September 12th, 2003, with the Securities and Exchange Commission
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**
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Filed as Exhibit with this Form 10-Q.
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***
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Previously filed with Form S-8 on November 18, 2004.
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13
In accordance with 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.
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Kyto Biopharma, Inc.
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Date: February 16, 2016
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By:
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/s/ Georges Benarroch
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Georges Benarroch
Chief Executive Officer, principal executive officer,
principal financial and accounting officer
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14