U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-KSB
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(Mark One)
[X] Annual Report Under Section 13 or 15(d) of The Securities Exchange
Act of 1934
For the fiscal year ended February 28, 2001.
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of The Securities
Exchange Act of 1934
Commission File Number 0-26057
GREATBIO TECHNOLOGIES, INC.
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(Name of small business issuer in its charter)
Nevada 82-0507874
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State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
150 Lucius Gordon Drive, Suite 201
West Henrietta, New York 14586
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(Address of principal executive offices) (Zip code)
(716) 214-2441
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Issuer's telephone number
Securities registered under Section 12(b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act: Common
Stock, $.005 par value
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-
KSB or any amendment to this Form 10-KSB. [ ]
State issuer's revenues for its most recent fiscal year. $ -0-
State the aggregate market value of the voting and non-voting equity
held by non-affiliates computed by reference to the price at which the
common equity was sold, or the average bid and asked prices of such common
equity as of a specified date within the past 60 days. $ -0-
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date.
Common Stock, $.005 par value
Outstanding as of June 10, 2001: 25,565,532 shares
DOCUMENTS INCORPORATED BY REFERENCE
None
Transitional Small Business Disclosure Format: Yes [ ] No [X]
TABLE OF CONTENTS
Page
PART I
Item 1. Business 3
Item 2. Properties 8
Item 3. Legal Proceedings 8
Item 4. Submission of Matters to a Vote of Security Holders 8
PART II
Item 5. Market for Common Equity and Related Stockholder Matters 9
Item 6. Plan of Operation 9
Item 7. Financial Statements 10
Item 8. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 19
PART III
Item 9. Directors, Executive Officers, Promoters and Control
persons; Compliance with Section 16(a) of the Exchange Act 20
Item 10. Executive Compensation 23
Item 11. Security Ownership of Certain Beneficial Owners and
Management 23
Item 12. Certain Relationships and Related Transactions 25
PART IV
Item 13. Exhibits and Reports on Form 8-K 26
SIGNATURES 27
PART I
Item 1. Description of Business
Business Development
GreatBio Technologies, Inc. (the "Company") was incorporated in the
State of Idaho on August 1, 1968 under the name Idaho Copper and Gold, Inc.
for the purpose of exploring 27 unpatented mining claims in the East Coeur
d'Alene Mining District in Shoshone County, Idaho. In 1990, the Company
abandoned its claims and ceased operations.
the intent of changing its domicile. On January 24, 2000, the Company
filed Articles of Merger between the Idaho and Nevada corporations. The
Company currently contemplates that it will amend its Articles of
Organization to change its name within the next ninety days.
On December 1, 2000, the Company acquired LTR Antisense Technology,
Inc., a New York corporation ("Antisense") from Biophan, LLC, a New York
limited liability company ("Biophan"), in a share for share exchange. As a
result of the exchange, Antisense became a wholly owned subsidiary of the
Company. The exchange was consummated pursuant to and in accordance with an
Exchange Agreement, dated December 1, 2000, as amended, by and among the
Company, Antisense and Biophan. Antisense owns proprietary technology for
using antisense gene therapy to inhibit the spread of human immunodeficiency
virus (HIV-1) infection in conjunction with the use of lentiviral vectors.
This technology was originally acquired from Greatbatch Gen-Aid, Ltd. by
Technology Innovations, LLC, the principal equity holder in Biophan.
In connection with the exchange, the Company issued an aggregate of
10,759,101 shares of common stock to a group of investors in exchange for
cash of $175,000 and issued an additional 10,759,101 shares of common stock
to Biophan in exchange for all the issued shares of Antisense.
Also on December 1, 2000, the Company acquired intellectual property
rights, including a pending patent to MRI-compatible pacemaker technology
from Biophan for $500,000, payable upon the earlier of the Company's raising
$3,000,000 in funding or June 1, 2002, otherwise the technology reverts to
Biophan. The Assignment was consummated pursuant to, and in accordance with,
an Assignment and Security Agreement, both dated December 1, 2000, as
amended, by and between the Company and Biophan.
Both the Exchange Agreement and the Assignments and Security Agreements
relating to the transfer of the HIV and MRI technologies contain provisions
requiring the Company to raise capital, fund certain research and development
effort and other items. The inability to meet these requirements will permit
transfer of the technologies back to Biophan. As a result of market
conditions, the Company was unable to comply with the first required funding
by March 1, 2001, and is currently operating under an extension of time from
Biophan to June 15, 2001. The Company expects to satisfy this obligation by
entering into a bridge loan transaction for $500,000. In the event the
Company does not obtain this loan or meet its funding obligation in the
future, this may result in the technology reverting to Biophan.
The Company's primary focus and use of capital will be for the
development of the MRI compatible pacemaker and adaptation of this technology
to other biomedical devices. The HIV research will be managed by the NIH
Human Genome Institute's Gene Therapy Division, working in conjunction with
the University of Rochester.
Objectives
The Company's objectives are:
* To obtain equity financing in order to continue the development of
both the MRI-compatible technology and the antisense gene therapy
technology.
* To commercially exploit each technology by entering into
joint ventures, licensing and/or strategic distribution relationships
with major companies having development, manufacturing and/or
marketing expertise.
* To establish the Company's products as the standard of care in each
market.
* To position the Company as a leader in the development of each
technology.
Strategy
To accomplish these objectives, the Company will endeavor to:
* Complete the development of the MRI-compatible technology and the
antisense gene therapy technology for inhibiting HIV-1 and other
potential anti-viral applications.
* Continue to identify specific new opportunities for each of these
platform technologies.
* Select joint venture, licensing, marketing, distribution and co-
development partners to assure the commercial success of each
technology.
* Vigorously protect current and future technological developments
by establishing a strong U.S. and foreign patent position for
each platform technology as well as patent protection for
specific applications and procedures for each technology.
* Provide marketing and technical support to various partners to
assure commercial success.
MRI-Compatible Cardiac Pacemaker Technology
An implantable cardiac pacemaker is a small, battery operated medical
device that sends electrical impulses to help regulate and control the
beating of the heart. An electrode is placed next to the heart wall and
small electrical charges travel through the wire to the heart. Pacemakers
have a sensing device that turns the unit off and on when a patient's
heartbeat reaches pre-determined upper and lower levels.
Magnetic resonance imaging (MRI), which may interfere with pacemaker
performance, is a diagnostic technique used to produce high quality images of
the interior of the human body and is based on nuclear magnetic resonance.
Significant advances in MRI technology over the past ten years have brought
this diagnostic procedure into wide-scale use. When a patient with an
implantable pacemaker needs to undergo an MRI procedure, the pacemaker's
performance will, in all likelihood, be disturbed or interrupted by exposure
to the MRI's magnetic field. A strong magnetic field can "blind" a pacemaker
to a patient's heart rhythm, preventing the device from accurately and
effectively regulating the patient's heart functions. A magnetic field can
also permanently damage the pacemaker or cause it to be harmful to the
patient. Deaths have been reported when pacemaker wearers have been placed
in MRIs. As a result, both the U.S. Food and Drug Administration ("FDA") and
many pacemaker manufacturers have issued warnings against pacemaker wearers
undergoing MRI.
Today's advanced imaging technologies, including MRI, underscore the
need for a new type of implantable cardiac pacemaker, the design of which
will permit satisfactory performance in the presence of magnetic fields and
radio waves, which are present when exposed to MRI and other devices.
In an effort to address this significant market opportunity (see
Markets), the Company is developing its new implantable MRI-compatible
cardiac pacemaker to have the ability to:
* Pace the heart to correct arrhythmic behavior.
* Operate normally in a magnetic field emanating from MRI or
similar equipment.
The Company has entered into agreements with the following in
connection with the development of the technology:
Greatbatch Enterprises, Inc., an entity owned by Wilson Greatbatch.
Pursuant to an agreement between Greatbatch Enterprises, Inc. and the
Company, Greatbatch will, in conjunction with the Company, Biophan,
leading cardiologists, radiologists, MRI experts and others, guide the
creation of an MRI-compatible implantable cardiac pacemaker. The
Company anticipates expenditures of $500,000 per year for two years
under this agreement. Greatbatch's efforts in this area will be
exclusive to the Company.
Biophan, LLC will manage the development program for the Company and
assist Greatbatch in the commercialization of the technology pursuant
to a research and development agreement with the Company.
Products
The Company views its MRI-compatible cardiac pacemaker technology as a
platform technology which will have broad application to a variety of medical
products (as well as non-medical products in the future). Potential medical
applications include implantable pacemakers, left ventricular assist devices,
insulin pumps, infusion pumps and transcutaneous electrical nerve
stimulators.
Regulatory Approval
At present, the FDA, specifically The Center for Devices and
Radiological Health ("CDRH"), has responsibility for regulatory activities
pertaining to the approval of the type of technology currently being
developed by the Company. The Company believes that its technology will be
incorporated into various medical device products by major manufacturers, and
that these manufacturers will be responsible for obtaining FDA approval prior
to the marketing of their products.
Approval to market will take the form of a Premarket Approval (PMA) or
a Premarket Notification [510(k)]. A PMA is the most stringent type of
device marketing application required by the FDA, and is an application
submitted to the FDA to request clearance to market a Class III medical
device. A 510(k) is a premarketing submission made to the FDA to demonstrate
that a device to be marketed is safe and effective, and is substantially
equivalent to a currently marketed device that is not subject to premarket
approval.
Markets
The year 2000 global market opportunity for technology that will enable
medical devices to operate successfully in the presence of virtually all
forms of electromagnetic and other interference was approximately $9.4
billion. The total global market for these devices is projected to grow to
approximately $20.5 billion by 2005.
Competition
There are a number of major companies engaged in the development of
medical devices. However, management believes that none of these companies
has successfully developed technology enabling medical devices capable of
operating in the presence of virtually all forms of electromagnetic and other
interference.
The Company is currently assessing how to best commercialize its
technology with a broad range of medical device companies, which may also
compete with the Company. These companies include, but are not limited to the
following: Medtronic Incorporated, Guidant Corporation, St. Jude Medical,
Inc., MiniMed, Inc.and Siemens AG .
Antsense Gene Therapy Technology for Inhibiting HIV-1
Antisense technology is the targeted suppression of gene function
resulting from introducing a strand of complementary RNA that binds to mRNA
produced by the gene, thereby inhibiting the formation of protein.
Lentiviral vectors are specific vectors (segments of DNA used to introduce a
gene, or a portion of a gene, into a cell) that have the ability to be
introduced into cells containing potential reservoirs of latent HIV-1. These
vectors will be used to deliver "anti-HIV" genes.
The antisense gene therapy technology for inhibiting HIV-1 is owned by
LTR Antisense Technology, Inc., a wholly owned subsidiary of the Company. The
technology is based on various patents owned by LTR (see Patents and
Intellectual Property).
The technology is based on methods that permit the inhibition of HIV-1
by the highly efficient delivery of anti-HIV gene transfer vectors based on
recombinant lentiviruses. Lentiviral vectors based on HIV-1 will be
engineered to transfer and express genes that block HIV-1 replication. In
vitro testing will be done to determine initial efficacy and vectors with
potent inhibitory properties will be evaluated in animal models. The long-
term goal is for these reagents to become effective in helping to stop the
spread of HIV-1 infection in humans.
Products
It is projected that the timetable for the development of the antisense
gene therapy technology for inhibiting HIV-1 will be in a range of five to
eight years. The current product development plan, which is approximately a
three-year program, will be followed by a lengthy, multi-phase, human
clinical testing program. Final product format and product claims cannot be
defined at this time and may take a variety of formats and/or delivery system
approaches.
Regulatory Approval
Currently, the FDA, specifically The Center for Drug Evaluation and
Research (CDER), is responsible for the approval to market products resulting
from the technology currently being developed by the Company. The Company
believes it will enter into joint venture, licensing or other marketing and
manufacturing relationships with leading pharmaceutical and bio-
pharmaceutical companies to commercialize the technology and resulting
products. Since these companies will be responsible for both manufacturing
and marketing, it will also be their responsibility to obtain FDA approval.
Approval to market may take the form of a New Drug Application (NDA). An
NDA is sought by a company prior to the commencement of clinical testing in
humans. Before approving an NDA, the FDA will seek substantial documentation
demonstrating that the product candidate technology is safe and effective.
Once the NDA has been approved, clinical trials are conducted in three
sequential phases that may overlap. Phase I clinical trials are performed in
healthy human subjects to establish initial data about the safety and
efficacy of the product. In Phase II clinical trials, in addition to
accumulating safety and efficacy data, the product is evaluated in a limited
number of patients with the targeted disease condition. Phase III clinical
trials typically involve continued testing for safety and efficacy, as well
as other criteria, in expanded, large-scale, multi-center studies of patients
with the targeted disease condition.
Markets
The global market for pharmaceutical, bio-pharmaceutical and other
products to control the spread of HIV-1 was approximately $350 billion in the
year 2000, and is projected to grow to approximately $470 billion by 2005.
The North American market for these products totaled $146 billion in 2000.
Product Development Plan
LTR has entered into a CRADA (Cooperative Research and Development
Agreement) with the Clinical Gene Therapy branch of the National Human Genome
Research Institute of the National Institutes of Health (NHGR/NIH) and the
Department of Hematology Oncology and Microbiology & Immunology of the
University of Rochester (U of R). Research investigators at NHGRI/NIH and U
of R have extensive experience in HIV based lentiviral vectors. LTR has the
option to obtain the exclusive rights to license technology resulting from
this research and development initiative. Product development responsibility
will be divided between the various CRADA participants as follows. LTR
estimates, but cannot be assured, that the timetable for this effort will be
approximately three years.
Competition
This market is dominated by the following major pharmaceutical and bio-
pharmaceutical companies that may be considered direct competitors: Glaxo
Smith Kline, Abbott Laboratories, Bristol-Meyers Squibb, Roche Holdings and
Merck & Co.
LTR also competes with many smaller development-stage companies
currently developing or seeking to develop products to control HIV-1.
The Company intends to seek one or more partners to undertake the
commercialization and marketing of its products. It is possible that one or
more of the above-referenced companies may ultimately be a joint venture,
strategic development and/or a marketing partner to LTR, should it produce a
commercially exploitable product.
Patents and Intellectual Property
In April 2000, Wilson Greatbatch, Michael L. Weiner and Patrick R.
Connelly, the co-inventors, filed a provisional patent application on the
initial design of an MRI-compatible cardiac pacemaker, entitled "MRI-
Resistant Cardiac Pacemakers, File No. 60/198631". This patent application
was assigned to Biophan and subsequently to the Company. Since that time, the
Company has filed several additional patent applications for MRI
compatibility. The Company further intends these inventions will be the
subjects of a number of new patent applications that are in various stages of
preparation.
The Company's subsidiary, LTR, owns the following two patents
pertaining to the antisense technology, which it acquired from Greatbatch
Gen-Aid:
U.S. Patent Number 5,324,643, Method of Conferring Resistance to
Retroviral Infections, issued June 28, 1994.
U.S. Patent Number 5,580,761, Method of Conferring Resistance to
Immunodeficiency Viral Infections, issued December 3, 1996.
The Company has engaged several patent law firms, each with specific
intellectual property responsibilities. Management is actively involved in
reviewing all aspects of the work performed by these firms.
Employees
As of May 31, 2001, the Company had nine employees, including two part-
time employees. Biophan, LLC has paid salaries and has allocated and accrued
appropriate amounts for reimbursement from the Company.
Item 2. Description of Property
The Company's headquarters are located at 150 Lucius Gordon Drive,
Suite 201, West Henrietta, NY 14586, in space subleased from Biophan, LLC at
the same rates as paid by Biophan.
Item 3. Legal Proceedings
The Company is not a party to any material pending legal proceedings
and no such action by, or to the best of its knowledge, against the Company
has been threatened.
Item 4. Submission of Matters to a Vote of Security Holders
On November 27, 2000, in lieu of a special meeting of the stockholders,
the Directors of the Company, holding a majority (3,757,330 shares, or 54%)
of the issued and outstanding shares of the Company, voted all such shares in
favor and thus adopted the following resolutions by Written Consent of a
Majority of Stockholders pursuant to Section 78.385 and Section 78.390 of the
Nevada General Corporation Law:
Exchange Agreement
A majority of the stockholders resolved to approve and adopt the
aforementioned Exchange Agreement by and among the Company, Biophan LLC and
LTR Antisense Technology Inc.
Change of Corporate Name
A majority of the stockholders resolved to change the name of the Company
from Idaho Technical, Inc. to GreatBio Technologies, Inc.
Appointment of Michael Weiner to the Board of Directors
A majority of the stockholders resolved to appoint Michael L. Weiner to the
Board of Directors.
Appointment of General Manager
A majority of the stockholders resolved to appoint Biophan, LLC or its
assigns to the position of General Manager pursuant to Section 4.12 of the
Company's By-laws.
Conflict of Interest
A majority of the stockholders resolved that Michael Weiner and Biophan, LLC
have no exclusive duty to deliver future patents, technology or other
intellectual property to the Company not related to those referred to in the
Exchange Agreement.
PART II
Item 5. Market for Common Equity and Related Stockholder Matters
The Company has elected to register under the Securities Exchange Act
of 1934, as amended, by filing Form 10 thereunder, and complies with the
periodic reporting requirements of that Act. The Company has been cleared by
NASDAQ for listing on the OTC Bulletin Board, and is listed under the symbol
GBTI.OB. Although several market makers post a quote for the Company's
stock, it does not trade.
At June 10, 2001, 25,565,532 common shares were outstanding and held
of record by 57 shareholders.
Recent Sales of Unregistered Securities
On December 1, 2000, the Company entered into the Exchange Agreement.
In connection with the Exchange Agreement, the Company (i) issued an
aggregate of 10,759,101 shares of common stock to Biophan LLC in exchange for
all the issued shares of LTR Antisense Technology, Inc. and (ii) issued an
aggregate of 10,759,101 shares of common stock to a group of investors in
exchange for cash of $175,000. The transaction was structured so as to
comply with Section 4(2) of the Securities Act of 1933, as amended.
In November 2000, the Company issued 250,000 shares of common stock to
Walter R. Keay in exchange for financial consulting services. The transaction
was structured so as to comply with Section 4(2) of the Securities Act of
1933, as amended.
Dividend Policy
The Company has not declared or paid cash dividends or made
distributions in the past, and the Company does not anticipate that it will
pay cash dividends or make distributions in the foreseeable future. The
Company currently intends to retain and reinvest future earnings to finance
its operations.
Item 6. Plan of Operation
The following information should be read in conjunction with the
consolidated financial statements and notes thereto appearing elsewhere in
this Form 10-KSB. This Annual Report on Form 10-KSB contains certain
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934. Actual events or results may differ materially from those projected in
the forward-looking statements as a result of the factors described in Item 1
of this report.
Overview
The Company is currently in the development stage of its operations and
is expected to be in that mode for the foreseeable future. The Company's
current mission is to develop and commercially exploit potentially significant
technologies in the following areas:
* The use of new proprietary technology to prevent implantable cardiac
pacemakers and other critical and life sustaining medical devices
from being affected by magnetic resonance imaging (MRI) and other
equipment that uses magnetic fields, radio waves and similar forms
of electromagnetic interference.
* The use of proprietary antisense gene therapy technology to inhibit
the spread of human immunodeficiency virus (HIV-1) infection in
conjunction with the use of lentiviral vectors.
Results of Operations
During the years ended February 28, 1999 and February 29, 2000, the
Company was inactive earning no revenues and incurring only a minimum of
expenses in connection with filing all required periodic reports under the
Securities Exchange Act of 1934 as well as consulting expense for assistance
in targeting potential acquisition or merger candidates. Such expenses
totaled $5,500 in fiscal 1999 and $5,001 in fiscal 2000. On December 1,
2000, the Company entered into agreements for the acquisition of its
currently owned technology and a subsidiary corporation and embarked on a new
program for development and eventual commercial exploitation of such
technology. The Company remained in the development stage during the year
ended February 28, 2001, earning no revenues except interest income and
incurring research and development expenses of $113,143 and other general and
administrative expenses of $114,605 plus interest expense of $13,000. The net
loss for the year amounted to $729,129, including a charge of $490,000 to
write-down intellectual property rights to fair market value.
Liquidity and Capital Resources
As a result of the Exchange Agreement dated December 1, 2000, among
other things, the Company received cash of $175,000 to assist in financing
initial administrative costs in connection with re-forming the Company as a
research and development enterprise and to continue the prosecution of
proprietary technology. In addition, financing was provided by Biophan, LLC
and another related party paying costs and expenses such as payroll, office
expenses and attorney fees in the aggregate amount of $170,136 through
February 28, 2001.
At this time, the Company has insufficient cash for its next twelve
months of operations. The Company is negotiating a bridge loan, scheduled to
close June 15, 2001, that will provide $500,000 in funding to the Company.
The loan has a term of six months and interest is payable by issuance of
Company common shares. The Company is also currently seeking to obtain equity
financing through a private placement offering that is planned to raise a
minimum of $1,000,000 and a maximum of $3,000,000. The proceeds will be
applied to reimbursement for expenses paid on the Company's behalf by related
parties, to funding of the CRADA project, to repayment of the bridge loan,
and to ongoing research and development of the proprietary technology.
Currently, the Company does not have a need for material capital
expenditures in the conduct of its research and development activities.
Item 7. Financial Statements
GREATBIO TECHNOLOGIES, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 28, 2001
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
GreatBio Technologies, Inc.
We have audited the accompanying consolidated balance sheet of GreatBio
Technologies, Inc. and Subsidiary (a development stage company) as of
February 28, 2001, and the related consolidated statements of operations,
stockholders' equity, and cash flows for the year then ended and the amounts
included in the cumulative column in the consolidated statements of
operations, stockholders equity/deficiency and cash flows for the period from
March 1, 2000 to February 28, 2001. The amounts in the cumulative column in
the consolidated statements of operations and cash flows for the period from
August 1, 1968 (date of inception) to February 29, 2000 were audited by other
auditors whose report, dated June 2, 2000, included an emphasis relating to
the Company's ability to continue as a going concern. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of GreatBio Technologies, Inc.
and Subsidiary as of February 28, 2001 and the results of their operations
and their cash flows for the year then ended and the amounts included in the
cumulative column in the consolidated statements of operations and cash flows
for the period from March 1, 2000 to February 28, 2001 in conformity with
accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company is a development stage company and has had
no significant operating revenues to date which raises substantial doubt
about its ability to continue as a going concern. Management's plan in
regard to these matters is also described in Note 2. The financial
statements do not include any adjustments that might result from the outcome
of this uncertainty.
GOLDSTEIN GOLUB KESSLER LLP
New York, New York
May 2, 2001
INDEPENDENT AUDITORS' REPORT
Board of Directors
GreatBio Technologies, Inc. (formerly Idaho Technical, Inc.)
We have audited the accompanying consolidated statements of income
and cash flows of GreatBio Technologies, Inc. and Subsidiary (a
development stage company) for the year ended February 29, 2000, and
the related consolidated statement of stockholders' equity for the
period from August 1, 1968 (date of inception) to February 29, 2000.
These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with auditing standards
generally accepted in the United States of America. Those standards
require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the results of operations and cash
flows of GreatBio Technologies, Inc. and Subsidiary for the year
ended February 29, 2000, and the changes in their stockholders'
equity for the period from August 1, 1968 (inception) to February
29, 2000, in conformity with accounting principles generally
accepted in the United States of America.
The accompanying financial statements have been prepared assuming
the Company will continue as a going concern. As discussed in note
1 to the financial statements, the Company is a development stage
company that has had no significant operating revenues to date which
raises substantial doubt about its ability to continue as a going
concern. Management's plan in regard to these matters is also
described in note 2. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/ LeMASTER & DANIELS PLLC
Coeur d'Alene, Idaho
June 2, 2000
GREATBIO TECHNOLOGIES, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONTENTS
February 28, 2001
Independent Auditor's Report 1
Independent Auditor's Report 2
Consolidated Financial Statements:
Balance Sheet 3
Statement of Operations 4
Statement of Stockholders' Equity/Deficiency 4 - 6
Statement of Cash Flows 7
Notes to Consolidated Financial Statements 8 - 10
GREATBIO TECHNOLOGIES, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEET
February 28, 2001
ASSETS
Current assets - cash and cash equivalents $ 172,092
--------------
Fixed Asset - at cost, net 4,833
--------------
Other Assets:
Intellectual property rights 110,000
Deferred private equity placement costs 56,827
Deferred tax asset, net of valuation allowance of $106,000 -
--------------
Total Assets $ 343,752
==============
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current Liabilities:
Accounts payable and accrued expenses $ 110,856
Due to related parties 170,136
--------------
Total current liabilities 280,992
Long-term obligation - payable to related party, less unamortized
discount of $62,000 based on imputed interest rate of 12.48% 438,000
--------------
Total liabilities 718,992
--------------
Stockholders' Deficiency:
Common stock - $.005 par value; authorized 60,000,000 shares,
issued and outstanding 25,565,532 shares 127,828
Additional paid-in capital 325,920
Deficit accumulated during the development stage (828,988)
--------------
Total stockholders' Deficiency (375,240)
--------------
Total Liabilities and Stockholders' Deficiency $ 343,752
==============
The accompanying notes and independent auditor's report should be read in
conjunction with the financial statements
GREATBIO TECHNOLOGIES, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF OPERATIONS
Period from
August 1,
1968 (Date of
Year Ended Year Ended Inception) to
February 28, February 29, February 28,
2001 2000 2001
General and administrative expenses:
Salaries and related $ 59,861 - $ 59,861
Research and development 113,144 - 113,144
Professional fees 38,685 - 38,685
Write-down of intellectual property rights 490,000 - 490,000
Other 16,059 $ 5,001 26,560
----------- ----------- -----------
Operating loss (717,749) (5,001) (728,250)
Interest expense (13,000) - (13,000)
Interest income 1,619 - 1,619
----------- ----------- -----------
Loss from continuing operations (729,130) (5,001) (739,631)
Loss from discontinued operations (89,357)
----------- ----------- -----------
Net loss $ (729,130) $ (5,001) $ (828,988)
=========== =========== ===========
Loss per common share $ (0.08) $ (0.00)
=========== ===========
Weighted average shares outstanding 9,166,887 2,873,858
=========== ===========
The accompanying notes and independent auditor's report should be read in
conjunction with the financial statements
GREATBIO TECHNOLOGIES, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY/DEFICIENCY
Period from August 1, 1968 (Date of Inception) to February 28, 2001
Deficit
Accumulated
Aditional During the Stockholders'
Common Paid-in Development Equity/
Stock Capital Stage Deficiency
1969 - 14,130 shares issued for services
for $.05 per share $ 70 $ 637 - $ 707
1970 - 1,405,000 shares issued for mining
rights for $.05 per share 7,025 63,225 - 70,250
1970 - 55,500 shares issued for services for
$.05 per share 278 2,497 - 2,775
1973 - 10,000 shares issued for services for
$.05 per share 50 450 - 500
1976 - 500 shares issued for services for
$.05 per share 3 22 - 25
1978 - 12,000 shares issued for services for
$.05 per share 60 540 - 600
1980 - 225,000 shares issued for services
for $.05 per share 1,125 10,125 - 11,250
1984 - 20,000 shares issued for services
for $.05 per share 100 900 - 1,000
1986 - 10,000 shares issued for services
for $.05 per share 50 450 - 500
1990 - 10,000 shares issued for services for
$.05 per share 50 450 - 500
1993 - 25,000 shares issued for services for
$.05 per share 125 1,125 - 1,250
Net loss from inception through
February 28, 1998 $ (89,357) (89,357)
---------- ----------
Balance at February 28, 1998 8,936 80,421 (89,357) -
Balance at February 28, 1998 8,936 80,421 (89,357) -
1999 - 10,000 shares issued for services
for $.05 per share 50 450 - 500
1999 - 1,000,000 shares issued for services
for $.005 per share 5,000 - - 5,000
The accompanying notes and independent auditor's report should be read in
conjunction with the financial statements
GREATBIO TECHNOLOGIES, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY/DEFICIENCY
Period from August 1, 1968 (Date of Inception) to February 28, 2001
Deficit
Accumulated
Aditional During the Stockholders'
Common Paid-in Development Equity/
Stock Capital Stage Deficiency
Net loss for the year ended
February 28, 1999 - - (5,500) (5,500)
-------- --------
Balance at February 28, 1999 13,986 80,871 (94,857) -
2000 - 1,000,200 shares issued
for services for $.005 per share 5,001 - - 5,001
Net loss for the year ended
February 29, 2000 - - (5,001) (5,001)
-------- --------
Balance at February 29, 2000 18,987 80,871 (99,858) -
2000 - 250,000 shares issued for services for
$.005 per share 1,250 - - 1,250
2000 - Expenses paid by stockholder - 2,640 - 2,640
2000 - 10,759,101 shares issued for
acquisition of Antisense Technology, Inc. 53,795 121,205 - 175,000
2000 - 10,759,101 shares issued for cash
for $.005 per share 53,796 121,204 - 175,000
Net loss for the year ended
February 28, 2001 (729,130) (729,130)
--------- ---------
Balance at February 28, 2001 $ 127,828 $ 325,920 $ (828,988) $ (375,240)
========== ========== =========== ===========
The accompanying notes and independent auditor's report should be read in
conjunction with the financial statements
GREATBIO TECHNOLOGIES, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF CASH FLOWS
Period from
August 1,
1968 (Date of
Year Ended Year Ended Inception) to
February 28, February 29, February 28,
2001 2000 2001
Cash flows from operating activities:
Net loss $ (729,130) $ (5,001) $ (828,988)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation 167 167
Write-down of intellectual property rights 490,000
Net amortization of discount on payable
to related party 13,000 13,000
Issuance of common stock for services rendered 1,250 5,001 101,108
Expenses paid by stockholder 2,640
Changes in operating assets and liabilities:
Increase in accounts payable and accrued
expenses 97,525 97,525
Increase in due to related parties 126,640
---------- ---------
Net cash provided by operating activities 2,092 (2,092)
---------- ---------
Net cash used in investing activities -
purchase of fixed asset (5,000) (5,000)
---------- ---------
Net cash provided by financing activities -
proceeds from issuance of common stock 175,000 175,000
---------- ---------
Net increase in cash and cash equivalents 172,092 (447,188)
Cash and cash equivalents at beginning of period - -
---------- ---------
Cash and cash equivalents at end of period $ 172,092 $ (447,188)
=========== ============
Supplemental schedule of noncash investing and financing activities:
Issuance of common stock and assumption
of related party payable $ 110,000 $ 110,000
=========== ============
Acquisition of intellectual property rights $ 425,000 $ 425,000
=========== ============
The accompanying notes and independent auditor's report should be read in
conjunction with the financial statements
GREATBIO TECHNOLOGIES, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
February 28, 2001
1. PRINCIPAL BUSINESS ACTIVITY AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES:
The consolidated financial statements include the accounts of GreatBio
Technologies, Inc. ("GreatBio") and its wholly owned subsidiary, LTR
Antisense Technology, Inc. ("Antisense") (collectively referred to as the
"Company"). All significant intercompany accounts and transactions have been
eliminated in consolidation.
The Company is in the development stage and is expected to remain so for at
least the next twelve months. The Company was formed in 1968 and obtained
certain mining claims and related rights. These rights were subsequently
abandoned and the Company has conducted no business since 1993.
The Company has not generated any revenue throughout its history. The
Company's ability to continue in business is dependent upon obtaining
sufficient financing or attaining future profitable operations.
On December 1, 2000 the Company amended its Articles of Incorporation to
change its name from Idaho Technical, Inc. to GreatBio Technologies, Inc. and
entered into an Exchange Agreement with Biophan, LLC and Antisense as more
fully described below.
In accordance with the terms of the Exchange Agreement ("the Agreement")
dated December 1, 2000, the Company acquired from Biophan, LLC
("Biophan") all of the issued and outstanding common stock of its wholly-
owned subsidiary, Antisense in exchange for 10,759,101 shares of authorized
but previously unissued common stock, par value $.005. The operations of
Antisense are included since the date of acquisition. Had Antisense been
acquired as of March 1, 2000 there would have been no effect on the
Company's operations. Antisense's only assets at December 1, 2000 were the
Intellectual property rights encompassing the use of proprietary antisense
gene therapy technology discussed in Note 4.
Additionally, on December 1, 2000, in exchange for cash consideration of
$175,000, the Company issued and delivered to certain parties, an additional
10,759,101 shares of authorized but previously unissued common stock, par
value $.005.
Also on December 1, 2000, the Company acquired certain intellectual property
rights relating to the MRI technology from Biophan for the future
consideration of $500,000. The transfer was consummated pursuant to and in
accordance with the Transfer Agreement, dated December 1, 2000 between the
Company and Biophan.
Upon securing the necessary funding, the principal business activity of the
Company will be research and development of patent rights in two primary
areas: (1) an MRI compatible implantable cardiac pacemaker and (2) the use of
antisense technology to block the HIV virus.
Depreciation of fixed assets, plant and equipment is provided for by the
straight-line method over the estimated useful lives of the related assets.
Amortization of intellectual property rights is provided by the straight
line method over 17 years.
For purposes of the statement of cash flows, the Company considers all highly
liquid instruments with an original maturity of three months or less to be
cash equivalents.
The Company maintains cash in bank deposit accounts which, at times, exceed
federally insured limits. The Company has not experienced any losses on
these accounts.
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 financial statements.
At cash balance sheet date, the Company evaluates the period of amortization
of intangible assets. The factors used in evaluating the period of
amortization include: (i) current operating results, (ii) projected future
operating results, and (iii) any other material factors that effect continuity
of the business. Basic loss per common share is computed using the
weighted-average number of shares outstanding.
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to 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 rates
expected to apply when the differences are expected to be realized. A
valuation allowance is recognized if it is anticipated that some or all of the
deferred tax asset may not be realized.
The preparation of financial statements in conformity with generally accepted
accounting principles requires the use of estimates by management. Actual
results could differ from these estimates.
2. GOING CONCERN:
The Company's financial statements are prepared using generally accepted
accounting principles applicable to a going concern which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. The Company has not established revenues sufficient to cover its
operating costs, and has a stockholder's deficiency, which raises substantial
doubt regarding its ability to continue as a going concern. Management is in
the process of attempting to raise funds through an equity financing.
3. FIXED ASSET:
Fixed asset, at cost, consists of the following:
Depreciation/
Amortization
February 28, 2001 Period
Internet website 5,000 5 years
Less: accumulated depreciation (167)
---------- ----------
$ 4,833
==========
Depreciation expense for the year ended February 28, 2001 amounted to $167.
4. INTELLECTUAL PROPERTY RIGHTS:
Intellectual property rights were acquired on December 1, 2000 and encompass
two areas: (1) The utilization of new proprietary technology to prevent
implantable cardiac pacemakers and other critical and life sustaining medical
devices from being affected by magnetic resonance imaging (MRI) and other
equipment using magnetic fields, radio waves and similar forms of
electromagnetic interference (EMI) and (2) the use of proprietary antisense
gene therapy technology to inhibit the spread of human immunodeficiency virus
(HIV-1) infection in conjunction with the use of lentiviral vectors.
In accordance with Statement of Financial Accounting Standards ("SFAS") No.
121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of, the Company recognized a loss of $490,000 through a
write-down of the intellectual property rights to their fair market value, in
accordance with an independent, third-party valuation. As discussed in Note
1, the Company has not yet recorded revenue and the continuation of business
is dependent on the Company's ability to obtain sufficient financing or
attain future profitable operations.
5. DEFERRED PRIVATE EQUITY PLACEMENT COSTS:
In connection with a proposed private equity placement, the Company has
incurred costs aggregating $56,827 as of February 28, 2001. These costs will
be netted against the expected proceeds from the private placement.
6. RELATED-PARTY TRANSACTIONS:
Under the Transfer agreement dated December 1, 2000 the Company incurred a
liability of $500,000 (including imputed interest of $75,000) to Biophan in
connection with the acquisition of the MRI intellectual property rights
described in Note 4. Biophan maintains a security interest in the underlying
patents until the liability is satisfied. The intellectual property rights
will revert to Biophan if the Company does not satisfy the liability by June
1, 2002. The stated liability bears interest at an imputed rate of 12.48%,
and the balance payable at February 28, 2001 is $438,000.
At February 28, 2001 the carrying value of the Company's long-term debt
approximated its estimated fair vlaue based upon current borrowing rates for
similar issues.
Biophan and another related party paid expenses on behalf of the Company
aggregating $170,136 during the year ended February 28, 2001. The amounts
due to the related parties do not bear interest, and the Company expects to
repay these liabilities during the next twelve months.
7. INCOME TAXES:
As of February 28, 2001 the Company had net operating loss carryforwards of
approximately $339,000 for federal income tax purposes which expire through
2001. A deferred tax asset of $115,000 relating to these carryforwards was
fully offset by a valuation allowance.
The reconciliation of income tax computed at the U.S. federal statutory tax
rates to income tax expense is as follows:
December 31, 2000
Tax benefit at U.S. statutory rates 34%
Valuation allowance (34)%
---------
-0- %
=========
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
On April 25, 2001, the Company dismissed Arthur Andersen LLP as its
independent accountants. The Board of Directors approved the decision to
change independent accountants. Arthur Andersen LLP issued no reports on the
financial statements. Arthur Andersen LLP was engaged from January 15, 2001
through April 24, 2001 and during such period there were no disagreements
with Arthur Andersen LLP on any matter of accounting principles or practices,
financial statement disclosure, auditing scope or procedure, which
disagreements if not resolved to the satisfaction of Arthur Andersen LLP
would have caused them to make reference thereto in their report to be issued
on the financial statements.
The Company engaged Goldstein Golub Kessler LLP as its new independent
accountants as of April 25, 2001. During the two most recent fiscal years and
through April 25, 2001, the Company has not consulted with Goldstein Golub
Kessler LLP regarding either (i) the application of accounting principles to
a specified transaction, either completed or proposed; or the type of audit
opinion that might be rendered on the Company's financial statements, and
neither a written report nor oral advice was provided to the Company that was
an important factor considered by the Company in reaching a decision as to
the accounting, auditing or financial reporting issue; or (ii) any matter
that was either the subject of a disagreement, as that term is defined in
Item 304(a)(1)(iv) of Regulation S-K and the related instructions to Item 304
of Regulation S-K, or a reportable event, as that term is defined in Item
304(a)(1)(v) of Regulation S-K.
The disclosure called for by this item has been previously reported by
the Company in a Form 8-K filed with the Securities and Exchange Commission
on May 7, 2001.
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons
The executive officers and directors of the Company are as follows:
Name Age Position
Michael L. Weiner 53 Chairman of the Board, President, Chief
Executive Officer
Robert J. Wood 62 Vice-President, Treasurer, Chief Financial
Officer
David A. Miller 46 Secretary
Stuart G. MacDonald 52 Vice-President of Research and
Development
Patrick R. Connelly 34 Director of Biomedical Engineering
Wilson Greatbatch 81 Director
Edward F. Cowle 45 Director
Steven Katz 53 Director
Ross B. Kenzie 68 Director
Robert S. Bramson 62 Director
The above listed officers and directors will serve until the next annual
meeting of the shareholders or until their death, resignation, retirement,
removal, or disqualification, or until their successors have been duly
elected and qualified. Vacancies in the existing Board of Directors are
filled by majority vote of the remaining Directors. Officers of the Company
serve at the will of the Board of Directors.
The business experience of each of the persons listed above during the
past five years is as follows:
Michael L. Weiner is an entrepreneur who has started six companies.
Mr. Weiner has extensive experience in licensing, having negotiated over 200
licenses producing tens of millions of dollars in licensing revenue from
products with gross sales of several hundred million dollars. Mr. Weiner
began his career at Xerox Corp., where he served in a variety of capacities
in sales and marketing, including manager of software market expansion and
manager of sales compensation planning. In 1985, after a ten year career at
Xerox, Mr. Weiner founded Microlytics, a Xerox spin-off company which
developed technology from the Xerox Palo Alto Research Center (PARC) into a
suite of products with licenses to companies including Microsoft, Symantec,
Casio, Canon, Sharp, Seiko, Smith Corona, SEC, Apple, WordPerfect, and Fuji
Xerox. Microlytics merged with Selectronics, a public company, in 1990.
Weiner is also co-founder and former CEO of Manning & Napier Information
Services (MNIS), a Rochester-based information and consulting service with
over 100 employees. TextWise, a company Weiner co-founded in 1994, with Dr.
Elizabeth D. Liddy, a professor at Syracuse University, has received over $12
million in government research grants from DARPA, ORD, NIMA, USAF, and DoD.
Weiner holds three issued patents and has numerous patents pending, including
as co-inventor with Wilson Greatbatch and Patrick R. Connelly pertaining to
the MRI-compatible pacemaker.
Robert J. Wood is a Certified Public Accountant with extensive
experience in public accounting and business consulting, having been an
owner/partner of Wood & Company, CPAs, P.C., Mengel, Metzger, Barr & Co.,
LLP, and Metzger, Wood & Sokolski, CPAs, all in Rochester, New York, from
1973 through 2000. He began his career at Price Waterhouse & Co. in 1962
after graduating from St. John Fisher College with a B.B.A. in Accounting.
He is a member of the New York State Society of Certified Public Accountants
(NYSSCPA).
David A. Miller was in charge of the administrative duties of GreatBio
Technologies, Inc., formerly Idaho Technical, Inc., from 1996 until December
1, 2000 (the date of the Exchange Agreement). He is a former member of the
Board of Directors and has held the offices of Vice-President, Secretary and
Treasurer.
Stuart G. MacDonald is an experienced Research and Development leader
with a broad engineering and science background, emphasizing a systems
approach to developing complex technology. MacDonald was previously employed
at Ortho-Clinical Diagnostics (J&J) in Rochester, New York since1995, most
recently as Vice-president, Clinical Lab Instrumentation R & D. Prior to
this he worked at Eastman Kodak Company from 1971 to 1995, rising to the
position of Assistant Director, Clinical Diagnostic Research Labs. MacDonald
has a B.S. in Mechanical Engineering and Masters of Engineering degree from
Cornell University; he is also licensed as a professional engineer by the
State of New York.
Patrick R. Connelly is a co-inventor of the MRI-compatible pacemaker
and is working on the design of the system with Wilson Greatbatch. Connelly
is currently a graduate student pursuing a Ph.D in Biomedical Engineering at
the University of Rochester, his specialty being MRI technologies. Connelly
holds a Masters degree in Molecular Biology from Thomas Jefferson University
in Philadelphia and a B.S. degree in Electrical Engineering from
Northeastern University, Boston. Connelly was an assistant scientist and
manager at NYU Medical Center, New York and a research and design RADAR
engineer for the US Army. In addition, he has written several articles for a
medical publication ranging from vascular development to prefabrication of
human cartilage.
Wilson Greatbatch began working in medical research after earning a
B.S. degree from Cornell University, an M.S.E.E. degree from the University
of Buffalo, and serving in the Navy during World War II. While experimenting
with oscillation, the recording of heart sounds and resulting electrical
pulses, he discovered way to regulate the human heart. After two years of
refinements, he handcrafted the world's first successful implantable
pacemaker. Greatbatch licensed the implantable pacemaker technology to
Medtronic Incorporated in 1961 and joined their board of directors.
Medtronic is the world's largest manufacturer of pacemakers. Mr. Greatbatch
also invented a corrosion-free lithium battery to power pacemakers. He then
founded what is today Wilson Greatbatch Technologies, Inc., the leading
developer and manufacturer of batteries, power sources and other components
used in implantable medical devices. In excess of 90% of the pacemakers and
implantable cardioverter defibrillators manufactured worldwide use power
sources manufactured or produced under license using technology owned by
Wilson Greatbatch Technologies, Inc. Mr. Greatbatch recently retired from
Wilson Greatbatch Technologies, Inc. In recognition of his inventions, and
numerous contributions to medical science and other disciplines, as evidenced
by a portfolio of more than 230 patents, Mr. Greatbatch was chosen as the
recipient of the Lifetime Achievement Award for 1996 by the Lemelson-MIT
Prize Program and currently serves as one of its invention ambassadors. In
1990 he was awarded the National Medal of Technology for his contribution to
medicine by then President George Bush. Greatbatch was also inducted into
the National Inventors Hall of Fame and is a member of nine professional
organizations including the IEEE, the National Academy of Engineering, and
the American College of Cardiologists. On February 20, 2001, in further
recognition of his accomplishments, Mr. Greatbatch was honored by the
National Academy of Engineering for his invention of the implantable
pacemaker with the award of the Fritz J. and Dolores H. Russ Prize, the
engineering profession's highest honor for 2001. Greatbatch shares the award
with Mr. Earl Bakken, a co-founder of Medtronic.
Edward F. Cowle has been self-employed from 1994 to the present,
assisting public companies with financial and investment banking services.
From 1992 to 1994, Mr. Cowle was a Senior Vice President-Investments with
Paine Webber in New York City and from 1991 to 1992 he was a Registered
Representative with Bear Stearns & Company. During 2000, Mr. Cowle became a
director of Laser Technology, Inc., an American Stock Exchange company which
develops, manufactures and markets laser-based measurement instruments. Mr.
Cowle graduated from Fairleigh Dickinson University in Madison, New Jersey in
1978 with a B.A. Degree in English and American Studies.
Steven Katz is President of Steven Katz & Associates, Inc., a
technology-based management consulting firm specializing in strategic
planning, corporate development, new product planning, technology licensing,
and structuring and securing various forms of financing since 1982. Since
January 2000, Mr. Katz has also been President and Chief Operating Officer of
Senesco Technologies, Inc., a public company engaged in the development of
proprietary genes with application to agro-biotechnology. From 1983 to 1984
he was the co-founder and Executive Vice President of S.K.Y. Polymers, Inc.,
a bio-materials company. Prior to S.K.Y. Polymers, Inc., Mr. Katz was Vice
President and General Manager of a non-banking division of Citicorp. From
1976 to 1980 he held various senior management positions at National Patent
Development Corporation, including President of three subsidiaries. Prior
positions were with Revlon, Inc. (1975) and Price Waterhouse & Co. (1969 to
1974). Mr. Katz received a Bachelors of Business Administration degree in
Accounting from the City College of New York in 1969. He is presently a
member of the Board of Directors of Senesco Technologies, Inc. and USA
Technologies, Inc., both publicly-held corporations, and several other
private companies.
Ross B. Kenzie is a former Chairman and Chief Executive Officer of
Goldome Bank, from which he retired in June 1989. He is a former Director of
the Federal Home Loan Bank of New York and served on the boards of the
National Council of Savings Institutions, the Federal Reserve Bank of New
York, Buffalo Branch, and the Savings Banks Association of New York State.
Mr. Kenzie is a Director of Millard Fillmore Hospitals and Past Chairman
Emeritus. He serves on the Board of the Kaleida Health, Education and
Research Foundation and its Investment Committee. He is a Director of the
Health Systems Agency of Western New York, and is a member of the Western New
York Commission on Health Care Reform. Mr. Kenzie is a member of the College
Council of the State University College at Buffalo and has served as
Chairman. He is a Director of the College's Foundation and a member of its
Finance Committee and its Investment Committee. He serves on the Council of
the Burchfield-Penney Art Center, and on its Executive Committee. He is also
a member of the Board, and the Chairman of the Investment Committee of the
State University at Buffalo Foundation. Mr. Kenzie currently serves on the
boards of several companies including many entrepreneurial ventures that are
privately held.
Robert S. Bramson is an engineer and patent attorney and is presently a
partner in Bramson & Pressman, a law firm that focuses on patent and
technology licensing matters, and is President of VAI Management Corp., a
consulting firm that specializes in patent and technology licensing; former
head of the Computer and Technology law group of Schnader, Harrison, Segal &
Lewis, a major law firm; former Vice President and General Patent and
Technology Counsel for Unisys; founder and former CEO of InterDigital Patents
Corporation, a patent licensing company; former Licensing Counsel for Abbott
Laboratories; and Adjunct Professor of Patent Law, Computer Law and
(presently) Licensing Law at Temple Law School, Rutgers Law School and
Villanova Law School at different times for over twenty years.
Section 16(a) Beneficial Ownership Reporting Compliance
Edward F. Cowle and David A. Miller (10% holders) were required to file
Form 4 on December 14, 2000 (10 days after change in beneficial ownership),
and were required to file Form 5 on April 14, 2001. Biophan, LLC was
required to file Form 3 on December 14, 2000 (10 days after it became a 10%
holder). These reports were not filed. The Company has instituted internal
procedures to insure the timely filing of such reports in the future.
Item 10. Executive Compensation
At the date of this annual report, some of the Company's officers and
directors are working on a part-time basis for the Company. The allocable
time of certain officers and employees, paid by Biophan, LLC, has been
charged to and accrued by the Company. The Board of Directors is currently
considering a formal program of executive compensation, incentive stock
options and other benefits for management personnel.
Item 11. Security Ownership of Certain Beneficial Owners and Management
The table below lists the beneficial ownership of the Company's voting
securities by each person known by the Company to be the beneficial owner of
more than 5% of such securities, as well as the securities of the Company
beneficially owned by all directors and officers of the Company. Unless
otherwise indicated, the shareholders listed possess sole voting and
investment power with respect to the shares shown.
Title of Class: Common
Name and Amount and
Address of Nature of
Beneficial Beneficial Percent of
Owner Owner Class
*Michael L. Weiner (1) 6,753,573 26.4%
150 Lucius Gordon Dr.
Suite 201
West Henrietta, NY 14586
*Edward F. Cowle 5,783,100 22.6%
6 East 45th St.
Suite 1000
New York, NY 10017
*Steven Katz 50,000 0.2%
440 S. Main St.
Milltown, NJ 08850
*Wilson Greatbatch (4) 5,379,550 21.0%
5935 Davison Rd.
Akron, NY 14001
*Robert S. Bramson 0 0
Bramson & Pressman
1100 East Hector Street
Suite 410
Consohoken, PA 19248
*Ross B. Kenzie (5) 0 0
369 Franklin St.
Buffalo, NY 14202
Geoffery Williams 4,564,701 17.9%
56 W. 400 S.
Suite 220
Salt Lake City, UT 84101
Robert J. Wood 0 0
150 Lucius Gordon Dr.
Suite 201
West Henrietta, NY 14586
Stuart G. MacDonald 0 0
150 Lucius Gordon Dr.
Suite 201
West Henrietta, NY 14586
Patrick R. Connelly (6) 268,978 1.1%
150 Lucius Gordon Dr.
Suite 201
West Henrietta, NY 14586
H.DeWorth Williams 2,058,500 8.1%
56 W. 400 S.
Suite 220
Salt Lake City, UT 84101
David A. Miller 90,500 0.4%
4004 Sunnyside Rd.
Sandpoint, ID 83864
Biophan, LLC (7) 6,628,573 25.9%
150 Lucius Gordon Dr.
Suite 201
West Henrietta, NY 14586
All Officers and Directors 18,006,723 71.5%
as a group (10 Persons)
* Member of the Board of Directors
(1) The persons named in the table have sole voting and investment power
with respect to all shares shown as beneficially owned by them.
(2) Applicable percentage of ownership is based on 25,565,532 shares
outstanding as of June 10, 2001 together with applicable options, if
any, for such shareholder. Beneficial ownership is determined in
accordance with the rules of the Securities and Exchange Commission,
and includes voting and investment power with respect to shares.
Shares subject to options currently exercisable or exercisable
within 60 days after June 10, 2001 are deemed outstanding for
purposes of computing the percentage ownership of the person holding
such options, but are not deemed outstanding for computing the
percentage of any other shareholder. As of June 10, 2001, there
were no options outstanding.
(3) Michael L. Weiner is a member and the manager of Technology
Innovations, LLC, which is the majority owner of Biophan, LLC. Mr.
Weiner is also the manager of Biophan, LLC. Mr. Weiner's
calculation includes 6,228,573 shares owned beneficially and of
record by Biophan, but excludes 5,379,550 shares owned of record by
Biophan but beneficially by Greatbatch Gen-Aid, Ltd., and excludes
268,978 shares owned of record by Biophan but beneficially by
Patrick R. Connelly.
(4) Includes 5,379,550 shares owned of record by Biophan but
beneficially by Wilson Greatbatch or by Greatbatch Gen-Aid, Ltd., an
entity owned by Wilson Greatbatch.
(5) Does not include shares owned beneficially or of record by Biophan,
LLC. Ross B. Kenzie is the manager and an equity member of Biophan
Ventures, LLC which is the 43% equity member in Biophan, LLC. Mr.
Kenzie, along with Michael L. Weiner, comprise the Board of Members
of Biophan, LLC.
(6) Includes 268,978 shares owned of record by Biophan but beneficially
by Patrick R. Connelly.
(7) Excludes 5,379,550 shares owned beneficially by Wilson Greatbatch or
Greatbatch Gen-Aid, Ltd. and 268,978 shares owned beneficially by
Patrick R. Connelly.
Item 12. Certain Relationships and Related Transactions.
(1) Michael L. Weiner, President and Chief Executive Officer of the
Company, is an employee of Technology Innovations, LLC. His
services to the Company are provided through a Management Agreement
with Biophan LLC, a subsidiary of Technology Innovations, LLC
(TILLC). Mr. Weiner is the manager and 44.2% equity member of
TILLC. TILLC is the 57% equity member of Biophan, LLC. Mr. Weiner
is the manager of Biophan; he and Ross Kenzie make up the Board of
Members of Biophan. Biophan is the record owner of 12,277,101
shares of common stock of the Company; of those, Greatbatch Gen-Aid,
Ltd. is the beneficial owner of 5,379,550 shares and Patrick R.
Connelly is the beneficial owner of 268,978 shares. As manager of
TILLC and Biophan, Mr. Weiner has control over these entities
(2) Biophan, LLC received 10,759,101 shares of the Company's Common
Stock in exchange for its shares of LTR Antisense Technology, Inc.
It is also entitled to be paid $500,000 for the transfer of its MRI-
compatible pacemaker patent pending. Biophan will provide certain
management services to the Company pursuant to the Management
Agreement, including the executive services of Michael L. Weiner and
Patrick R. Connelly, for which the Company will pay management fees
at Biophan's standard consulting rates, but not less than $100,000
per year. It is anticipated the Biophan will also conduct research
and development pertaining to the Company's technologies, in
conjunction with Wilson Greatbatch and Greatbatch Enterprises, Inc.,
and be paid its standard consulting rates for such services. In
addition, the Company shares office space with TILLC and Biophan.
(3) Wilson Greatbatch, himself or through his ownership of Greatbatch
Gen-Aid, Ltd., is the beneficial owner of 5,379,550 common shares
of the Company owned of record by Biophan. He is also entitled to
receive 60% of the consideration payable to Biophan ($500,000) for
transfer of the MRI-compatible pacemaker technology to the Company.
Greatbatch Gen-Aid holds a 0.3% membership interest (1 Unit) in
TILLC, and has options to acquire an additional 10 Units upon the
occurrence of certain events.
The Company has entered into a letter agreement with Greatbatch
Enterprises, Inc. and Wilson Greatbatch for the provision of
research and development services relating to the MRI-compatible
technology, for which the Company anticipates it will expend
$500,000 per year for two years
PART IV
Item 13. Exhibits and Reports on Form 8-K
No. Page No.
(a) Exhibit Index
* Certificate of Incorporation (Nevada)
* Bylaws
21 Subsidiaries 27
16 Letter on change of accountants 28
* Exchange Agreement
2 Amendment to Exchange Agreement 29
99.1 Transfer Agreement 31
99.2 Amendment to Transfer Agreement 34
(b) Reports on Form 8-K
Registrant filed a Form 8-K on December 15, 2000 listing Item 2
(acquisition of assets).
Registrant filed a Form 8-K on January 18, 2001 listing Item 4 (change in
registrant's certifying accountant).
Registrant filed a Form 8-K/A on February 13, 2001 listing Item 1
(financial statements and pro forma financial information).
Registrant filed a Form 8-K on May 7, 2001 listing Item 4 (change in
registrant's certifying accountant).
* Exhibits so marked have heretofore been filed with the Securities and
Exchange Commission as part of the filing indicated and are incorporated
herein by reference.
* Certificate of Incorporation filed as Exhibit to Form 10-K for the
period ending December 31, 1999.
* Bylaws filed as Exhibit to Form 10-SB.
* Exchange Agreement filed as Exhibit to Form 8-K dated December 15,
2000.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
Registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
GREATBIO TECHNOLOGIES, INC.
By: \s\ Michael L. Weiner
Name: Michael L. Weiner
Title: President and Director
Dated: June 13, 2001
In accordance with the Exchange Act, this report has been signed
below by the following persons on behalf of the Registrant and in the
capacities and on the dates indicated.
By: \s\ David A. Miller
Name: David A. Miller
Title: Secretary
By: \s\ Robert J. Wood
Name: Robert J. Wood
Title: Vice President and Treasurer
EX-21
Document is copied.
Exhibit 21 Subsidiaries
As of February 28, 2001, the Company had the following subsidiaries:
LTR Antisense Technology, Inc. (100% owned)
EX-16
ITEM 4. CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANTS
(a) Previous independent accountants
On April 25, 2001, GreatBio Technologies, Inc. dismissed Arthur
Andersen LLP as its independent accountants. The Registrant's Board of
Directors approved the decision to change independent accountants. Arthur
Andersen LLP issued no reports on the financial statements. Arthur Andersen
LLP was engaged from January 15, 2001 through April 24, 2001 and during such
period there have been no disagreements with Arthur Andersen LLP on any
matter of accounting principles or practices, financial statement disclosure,
auditing scope or procedure, which disagreements if not resolved to the
satisfaction of Arthur Andersen LLP would have caused them to make reference
thereto in their report to be issued on the financial statements. During the
period in which Arthur Andersen LLP was engaged there have been no reportable
events as defined in Regulation S-K Item 304(a)(1)(v). The Registrant has
requested that Arthur Andersen LLP furnish it with a letter addressed to the
SEC stating whether or not it agrees with the above statements. A copy of
such letter, dated May 4, 2001, is filed as Exhibit 16 to this Form 8-K.
(b) New independent accountants
The Registrant engaged Goldstein Golub Kessler LLP as its new
independent accountants as of April 25, 2001. During the two most recent
fiscal years and through April 25, 2001, the Registrant has not consulted
with Goldstein Golub Kessler LLP regarding either (i) the application of
accounting principles to a specified transaction, either completed or
proposed; or the type of audit opinion that might be rendered on the
Registrant's financial statements, and neither a written report nor oral
advice was provided to the Registrant that was an important factor considered
by the Registrant in reaching a decision as to the accounting, auditing or
financial reporting issue; or (ii) any matter that was either the subject of
a disagreement, as that term is defined in Item 304(a)(1)(iv) of Regulation
S-K and the related instructions to Item 304 of Regulation S-K, or a
reportable event, as that term is defined in Item 304(a)(1)(v) of Regulation
S-K.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
Page
(16) Letter regarding change in certifying accountant. 3
SIGNATURE
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.
Dated: May 3, 2001
GreatBio Technologies, Inc.
By: /s/ Michael L. Weiner
--------------------------
Name: Michael L. Weiner
Title: President
EX-16
LETTER REGARDING CHANGE IN CERTIFYING ACCOUNTANT
[ARTHUR ANDERSEN LLP LETTERHEAD]
May 4, 2001
Office of the Chief Accountant
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Dear Sir/Madam:
We have read paragraph (a) of Item 4 included in the Form 8-K dated April 25,
2001 of GreatBio Technologies, Inc. to be filed with the Securities and
Exchange Commission and are in agreement with the statements contained
therein.
Very truly yours,
/s/ Arthur Andersen LLP
EX-2
EXCHANGE AGREEMENT
AMENDMENT NO. 1
This Amendment no. 1 to Exchange Agreement is made as of this 7 day of
June, 2001, by and between GreatBio Technologies, Inc. (f/k/a Idaho
Technical, Inc. referred to herein as ITI), a Nevada Corporation
("GreatBio"), and Biophan, LLC, a New York Limited Liability Company
("Biophan").
WHEREAS, the parties hereto entered into an Exchange Agreement dated
December 1, 2000 relating to the transfer from Biophan to GreatBio of certain
technology described therein; and
WHEREAS, the parties have agreed to modify Sections 1.1, 1.2, 1.3(b) and
1.3(d) of the Agreement which describe the consideration for the issuance of
shares of GreatBio and certain other funding requirements.
NOW, THEREFORE, in consideration of the premises set forth herein and
for all other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:
1. Amendment and Restatement of Section 1.1. Section 1.1 of the
Exchange Agreement is hereby amended and restated to read in its entirety as
follows:
"The parties hereby agree that ITI shall acquire from Biophan all of
the issued and outstanding shares of Antisense capital stock in
exchange for ten million, seven hundred fifty-nine thousand, one
hundred and one (10,759,101) shares of authorized but previously
unissued ITI common stock, par value $.005. The parties further agree
that in consideration of $175,000 to be delivered to Antisense at
Closing (as described in Section 1.3) ten million, seven hundred fifty
nine thousand, one hundred and one (10,759,101) shares of authorized
but previously unissued ITI common stock, shall be issued to certain
individuals and in amounts as designated by ITI (the "Cowle Group").
(a) Assets. It is also agreed by the parties hereto that by
acquiring the shares of Antisense capital stock, ITI will acquire
all rights, title and interest to the assets and property presently
owned by Antisense. Said assets and property are subject to certain
interests, liens and/or encumbrances which are to be further
described Antisense's financial statements or other schedules
provided to ITI and included in Attachment 1.1.
(b) Funding. At the Closing, as described below in Section 1.3,
the Cowle Group agrees to have delivered to Antisense $175,000 and
to arrange for the further commitment for future funding of an
additional $325,000 to Antisense as follows: $175,000 on or before
the second anniversary of this Agreement and $150,000 on or before
the third anniversary of this Agreement. In addition, Biophan may
from time to time advance funds to ITI (the "Advances") to fund
ITI's operating expenses until such time as ITI is sufficiently
capitalized. ITI agrees to repay the Advances upon terms and
conditions mutually agreeable to Biophan and ITI.
(c) Management. The parties agree that Biophan, or its wholly
owned subsidiary, shall be the general manager of ITI for at least
three (3) years following the execution of this Agreement and
Biophan, or its wholly owned subsidiary, specifically agrees to
oversee the operation and logistics of the CRADA.
(d) Reorganization. The parties hereto agree that at the Closing
(i) Antisense shall become a wholly-owned subsidiary of ITI; (ii)
the business operations of ITI shall be reorganized, and (iii) the
name of ITI shall be changed to GreatBio Technologies, Inc."
2. Amendment and Restatement of Section 1.2. Section 1.2 of the
Exchange Agreement is hereby amended and restated to read in its entirety as
follows:
(a) Upon the Closing of this Agreement, ITI shall cause to be issued
and delivered an aggregate of 21,518,202 shares of ITI common stock to
be distributed as follows:
(i) A total of 10,759,101 shares shall be delivered to Biophan, the
sole shareholder of Antisense, in exchange for all the issued and
outstanding shares of Antisense capital stock, which shares shall
be delivered to ITI at the Closing.
(ii) A total of 10,759,101 shares shall be delivered to the Cowle
Group, in consideration of the $175,000 to be paid at Closing as
more fully described in Section 1.1. In addition, the Cowle Group
shall provide funding of $325,000 as follows: $175,000 on or
before the second anniversary of this Agreement and $150,000 on or
before the third anniversary of this Agreement. An aggregate of
$500,000 in funding is to be used by Antisense to develop those
certain U.S. Patents and any underlying inventions and applications
directed thereto as depicted in Attachment 1.1.
(iii) In addition to the provisions of Section1.2(a)(ii) above, the
parties identified therein will provide ongoing assistance in
raising capital for the new venture, maintaining good standing in
public markets, and developing the company. It is anticipated that
these parties will use their reasonable efforts to raise at least
$2 million, $325,000 of which will be used to fund the obligations
under paragraph (ii) above, and $1,675,000 of which will be used to
fund research and development and patent acquisitions related to
the MRI-Resistant Cardiac Pacemakers to be acquired from Biophan
sometime after the consummation of this transaction. All such
funds shall be raised at a price per share which results in a
market capitalization of ITI following the completion of the
offering of at least $12 million.
(iv) In the event ITI does not fulfill all of its obligations set
forth in this Section 1.2, all of the patents and intellectual
property set forth in Section 1.1(a) above and being acquired by
ITI hereunder, shall revert and be fully assigned and transferred
to Biophan.
(b) The 21,518,202 shares of ITI common stock to be issued hereunder
(the "ITI Shares") shall be authorized but previously unissued shares
of ITI common stock. The ITI Shares shall be issued to those persons
and in the respective amounts set forth in Section 1.2(a) above.
(c) All ITI Shares to be issued hereunder are deemed "restricted
securities" as defined by Rule 144 of the Securities Act of 1933, as
amended (the "1933 Act"), and the recipients shall represent in
writing that they are acquiring said shares for investment purposes
only and without the intent to make a further distribution of the ITI
Shares. All ITI Shares to be issued under the terms of this Agreement
shall be issued pursuant to an exemption from the registration
requirements of the 1933 Act, under Section 4(2) of the 1933 Act and
the rules and regulations promulgated thereunder. Certificates
representing the ITI Shares to be issued hereunder shall bear a
restrictive legend in substantially the following form:
The shares represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and may not be
offered for sale, sold or otherwise transferred except in
compliance with the registration provisions of such Act or pursuant
to an exemption from such registration provisions, the availability
of which is to be established to the satisfaction of the Company."
3. Amendment and Restatement of Section 1.3(b). Section 1.3(b) of the
Exchange Agreement is hereby amended and restated to read in its entirety as
follows:
"ITI shall cause to be delivered to Antisense the sum of $175,000, and
ITI agrees to the further commitment to arrange for funding of an
additional $325,000 as follows: $175,000 on or before the second
anniversary of this Agreement and $150,000 on or before the third
anniversary of this Agreement."
4. Amendment and Restatement of section 1.3(d). section 1.3(d) of the
Exchange Agreement is hereby amended and restated to read in its entirety as
follows:
"In consideration of the $175,000, ITI shall deliver to the Cowle
Group, stock certificates representing an aggregate of 10,759,101
shares of ITI common stock, which certificates shall bear a standard
restrictive legend in the form customarily used with restricted
securities and as set forth in Section 1.2(c) above."
5. Conflicts. Except as expressly amended or modified by this Amendment
No. 1, the Exchange Agreement shall continue in full force and effect. In
the event of any conflict between the terms of the Exchange Agreement and the
terms of this Amendment No. 1, the terms of this Amendment No. 1 shall govern
and control.
6. Further Assurances. The parties agree to execute such further
instruments, agreements and documents and to take such further action as may
reasonably be necessary to carry out the intent of this Amendment No. 1.
7. Counterparts. This Amendment No. 1 may be executed in any number of
counterparts, each which shall be deemed an original, and all of which
together shall constitute one instrument.
8. Governing Law. This Amendment No. 1 shall be governed by and
construed under the laws of New York, without reference to principles of
conflicts oflaws.
IN WITNESS WHEREOF, the parties have executed this Amendment No. 1 to
Exchange Agreement by their signature or the signature of their duly
authorized representatives below.
GREATBIO TECHNOLOGY, INC.
By /s/Edward F. Cowle
------------------------------------
Edward F. Cowle, Director
BIOPHAN, LLC
By /s/Michael L. Weiner
------------------------------------
Michael L. Weiner, CEO
EX-99.1
TRANSFER AGREEMENT
This Transfer Agreement is made as of this 1 day of December, 2000, by
and between Idaho Technical, Inc., a Nevada Corporation ("ITI") and Biophan,
LLC, a New York Limited Liability Company ("Biophan").
WHEREAS, ITI is a wholly owned subsidiary of Biophan; and
WHEREAS, Biophan desires to transfer to ITI certain patents described
in:
a Provisional Patent Application the disclosure of which was filed
in the United States Patent and Trademark Office on April 20, 2000,
and accorded Application No. 60/198,631 with Attorney Docket No.
T31-003/T31-005,
that are partly described in a disclosure submitted to Elman &
Associates and assigned Attorney Docket No. T31-010; and
related technologies for suppressing MRI energies and radio
frequency energy from negative effects on pacemakers and certain
other implantable and external medical devices and diagnostic
systems ( collectively the "Patents").
WHEREAS, ITI desires to receive the Patents and is able to raise a
minimum of $1,500,000 to fund research and development and further patent
acquisition related to the Patents.
NOW, THEREFORE, in consideration of the premises set forth herein and
for all other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:
1. Biophan agrees to execute an assignment in the form attached hereto
and made part hereof as Exhibit A to accomplish the transfer of the
Patents to ITI (the "Assignment").
2. ITI hereby grants a security interest in the Patents to Biophan as
more fully described in the security agreement attached hereto and
made part hereof as Exhibit B (the "Security Agreement"). The
execution of the Assignment by Biophan is conditioned upon the
execution of the Security Agreement by ITI.
3. ITI agrees to undertake and accomplish the following (collectively the
"Obligations"):
3.1 to raise $1,000,000 to be used to fund research and
development file patent applications and to acquire additional
patents related to the Patents in accordance with the following
schedule:
3.1.1 $250,000 on or before March 1, 2000;
3.1.2 $250,000 on or before June 1, 2001;
3.1.3 $250,000 on or before March 1, 2002; and
3.1.4 $250,000 on or before June 1, 2002.
3.2 to pay Biophan
3.2.1 $250,000 upon the issuance of the first U.S. patent
resulting from the Patents.
3.2.2 $250,000 upon the issuance of a second U.S. Patent resulting
from the Patents.
3.2.3 ITI agrees to use its reasonable best efforts to pay Biophan
the payments described in this Section 3.2 as soon as
possible, cash flow permitting, but in any event, not later
than the later of the issuance of the applicable patent or
eighteen months from the date hereof.
3.3 to allocate sufficient resources, including cash and personnel,
in order to retain, directly or indirectly, Greatbatch
Enterprises, Inc. to direct the scientific and technical design,
prototypes, systems, etc., related to the Patents.
4. Upon the occurrence of an Event of Default (as defined below) Biophan
shall be entitled to the remedies described in paragraph 10 of the
Security Agreement and all other rights and remedies available to it
under the law.
5. Events of Default. An "Event of Default" will occur under this
Agreement upon the happening of any of the following events:
5.1 The occurrence of an event of default under the Security
Agreement.
5.2 A default in the performance of the Obligations or any provision
of this Agreement.
5.3 ITI commences any voluntary proceeding under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt,
receivership, dissolution, or liquidation law or statute, of any
jurisdiction, whether now or subsequently in effect; or ITI is
adjudicated insolvent or bankrupt by a court of competent
jurisdiction; or ITI petitions or applies for, acquiesces in, or
consents to, the appointment of any receiver or trustee of ITI
for all or substantially all of its property or assets; or ITI
makes an assignment for the benefit of its creditors; or ITI
admits in writing its inability to pay its debts as they mature.
5.4 There is commenced against ITI any proceeding relating to ITI
any bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, receivership, dissolution, or liquidation
law or statute, of any jurisdiction, whether now or subsequently
in effect, and the proceeding remains undismissed for a period
of thirty (30) days or ITI by an act indicates its consent to,
approval of, or acquiescence in, the proceeding; or a receiver
or trustee is appointed for ITI for all or substantially all of
its property or assets, and the receivership or trusteeship
remains undischarged for a period of thirty (30) days; or a
warrant of attachment, execution or similar process is issued
against any substantial part of the property or assets of ITI,
and the warrant or similar process is not dismissed or bonded
within thirty (30) days after the levy.
6. Cumulative Remedies. All of Biophan's rights and remedies with respect
to the Patents, whether established hereby or by the Security
Agreement, or by any other agreements or by law, will be cumulative
and may be exercised individually or concurrently. Biophan will have,
in addition to all other rights and remedies given it by the terms of
this Agreement, all rights and remedies allowed by law and the rights
and remedies of a secured party under the Uniform Commercial Code as
enacted in any jurisdiction in which the Collateral may be used or
rights thereto enforced. ITI acknowledges and agrees that this is not
intended to limit or restrict in any way the rights and remedies of
Biophan under the Security Agreement but rather is intended to
facilitate the exercise of such rights and remedies.
7. Waivers. No course of dealing between ITI and Biophan and no failure
or delay of Biophan to exercise any right, power or privilege
hereunder will operate as a waiver thereof. No single or partial
exercise of any right, power or privilege hereunder will preclude any
other or further exercise thereof or the exercise of any other right,
power or privilege.
8. Severability. The provisions of this Agreement are severable, and if
any clause or provision is held invalid or unenforceable in whole or
in part in any jurisdiction, then such invalidity or unenforceability
will affect only such clause or provision, or part thereof, in such
jurisdiction, and will not in any manner affect such clause or
provision in any other jurisdiction, or any other clause or provision
of this Agreement.
9. General. This Agreement will inure to the benefit of and be binding
upon ITI, Biophan and their respective successors and assigns. ITI may
not assign its rights or obligations under this Agreement without the
prior written consent of Biophan. No party is liable for its breach if
such breach is due to an event beyond its reasonable control. All
required notices must be in writing. No failure or delay to enforce a
provision will be deemed a waiver thereof. This Agreement is governed
by the internal laws of New York and the parties hereby consent to the
jurisdiction of the state and federal courts located in Monroe County,
New York. This Agreement along with the Assignment and Security
Agreement are the entire and exclusive set of terms and conditions for
the assignment and disposition of the Patents and may only be modified
by a writing signed by all parties.
IN WITNESS WHEREOF, the parties have executed this Agreement by their
signature or the signature of their duly authorized representatives below.
IDAHO TECHNICAL, INC.
By /s/Geoffrey Williams
----------------------------------
Geoffrey Williams, President
BIOPHAN, LLC
By /s/Michael L. Weiner
----------------------------------
Michael L. Weiner, CEO
EX-99.2
TRANSFER AGREEMENT
AMENDMENT NO. 1
This Amendment no. 1 to Transfer Agreement is made as of this 7th day of
June, 2001, by and between GreatBio Technologies, Inc. (f/k/a Idaho
Technical, Inc. referred to herein as ITI), a Nevada Corporation ("GreatBio")
and Biophan, LLC, a New York Limited Liability Company ("Biophan").
WHEREAS, the parties hereto entered into a Transfer Agreement dated
December 1, 2000 relating to the transfer from Biophan to GreatBio of certain
technology described therein, which included
a Provisional Patent Application the disclosure of which was
filed in the United States Patent and Trademark Office on April
20, 2000, and accorded Application No. 60/198,631 with Attorney
Docket No. T31-003/T31-005,
that are partly described in a disclosure submitted to Elman &
Associates and assigned Attorney Docket No. T31-010; and
related technologies for suppressing MRI energies and radio
frequency energy from negative effects on pacemakers and certain
other implantable and external medical devices and diagnostic
systems ( collectively the "Patents"); and
WHEREAS, the parties have agreed to modify the timing for the raising of
capital as provided in section 3.1 of the Agreement and the payment terms of
section 3.2 of that Agreement.
NOW, THEREFORE, in consideration of the premises set forth herein and
for all other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:
1. Section 3 of the Agreement is hereby amended to read in its entirety
as follows:
ITI agrees to undertake and accomplish the following (collectively the
"Obligations"):
3.1 to raise $1,000,000 to be used to fund research and development
file patent applications and to acquire additional patents
related to the Patents in accordance with the following
schedule:
3.1.1 $500,000 on or before June 15, 2001;
3.1.2 $250,000 on or before March 1, 2002; and
3.1.3 $250,000 on or before June 1, 2002.
3.2 to pay Biophan the sum of $500,000 for the purchase of the
Patents upon the earlier of (i) the raising of capital by
GreatBio in the amount of $3,000,000 or more, or (ii) June 1,
2002.
3.3 to allocate sufficient resources, including cash and personnel,
in order to retain, directly or indirectly, Greatbatch
Enterprises, Inc. to direct the scientific and technical design,
prototypes, systems, etc., related to the Patents."
2. The balance of the Agreement shall remain in full force and effect,
unamended.
IN WITNESS WHEREOF, the parties have executed this Amendment No. 1 to
Transfer Agreement by their signature or the signature of their duly
authorized representatives below.
GREATBIO TECHNOLOGY, INC.
By /s/Edward F. Cowle
------------------------------------
Edward F. Cowle, Director
BIOPHAN, LLC
By /s/Michael L. Weiner
------------------------------------
Michael L. Weiner, CEO