UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
Quarterly Report pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the period ended: May 31, 2001
Commission File No. 0-26057
GREATBIO TECHNOLOGIES, INC.
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(Exact name of registrant as specified 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 203
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
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
[ X ] Yes [ ] No
As of May 31, 2001, the Company had 25,565,532 shares of common stock
outstanding.
Title of Class
Common
INDEX
Page
Number
PART I. FINANCIAL INFORMATION
ITEM I. Financial Statements
Consolidated Balance Sheets, May 31, 2001 (Unaudited)
and February 28, 2001 3
Consolidated Statements of Operations, Three Months Ended
May 31 2001 and 2000(Unaudited) and from August 1, 1968
(Date of Inception) through May 31, 2001 (Unaudited) 4
Consolidated Statements of Cash Flows, Three Months ended
May 31, 2001 and 2000 (Unaudited) and from August 1, 1968
(Date of Inception) through May 31, 2001 (Unaudited) 5
Notes to Consolidated Financial Statements 6
ITEM 2. Plan of Operation 7
PART II. OTHER INFORMATION
ITEM 1. Index to Exhibits
a. Reports on Form 8-K 8
b. Signatures 8
PART I. FINANCIAL INFORMATION
ITEM I. Financial Statements
GREATBIO TECHNOLOGIES, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
May 31, 2001 February 28, 2001
(Unaudited)
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ASSETS
Current assets - cash and cash equivalents $ 10,549 $172,092
Fixed Asset - at cost, net 4,583 4,833
Other Assets:
Intellectual property rights 110,000 110,000
Deferred private equity placement costs 75,000 56,827
Deferred tax asset, net of valuation allowance
of $201,000 and $115,000 respectively - -
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Total Assets $200,132 $343,752
========== ==========
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current Liabilities:
Accounts payable and accrued expenses $163,870 $110,856
Due to related parties 210,698 170,136
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Total current liabilities 374,568 280,992
Long-term obligation - payable to related
party, less unamortized discount of
$46,500 and $62,000 respectively, based
on imputed interest rate of 12.48% 453,500 438,000
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Stockholders' Deficiency:
Common stock - $.005 par value; authorized
60,000,000 shares, issued and outstanding
25,565,532 shares 127,828 127,828
Additional paid-in capital 325,920 325,920
Deficit accumulated during the
development stage (1,081,685) (828,988)
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Stockholders' deficiency (627,937) (375,240)
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Total Liabilities and Stockholders'
Deficiency $200,132 $343,752
========== ==========
See Notes to Consolidated Financial Statements
GREATBIO TECHNOLOGIES, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS
Period from
August 1, 1968
Three Months Three Months (Date of
Ended May 31, Ended May 31, Inception) to May
2001 2000 31, 2001
------------ ------------ -----------------
General and administrative expenses:
Salaries and related $ 73,873 $ - $133,734
Research and development 125,099 - 238,243
Professional fees 13,658 2,000 52,343
Write-down of intellectual property rights - - 490,000
Other 22,391 - 48,951
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Operating loss (235,021) (2,000) (963,271)
Interest expense (18,713) - (31,713)
Interest income 1,037 - 2,656
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Loss from continuing operations (252,697) (2,000) (992,328)
Loss from discontinued operations - - (89,357)
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Net loss $(252,697) $(2,000) $(1,081,685)
========= ========== ==========
Loss per common share $ (.01) $ -
========== ==========
Weighted average shares outstanding 25,565,532 9,166,887
========== ==========
See Notes to Consolidated Financial Statements
GREATBIO TECHNOLOGIES, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS
Period from
August 1, 1968
Three Months Three Months (Date of
Ended May 31, Ended May 31, Inception) to May
2001 2000 31, 2001
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Cash flows from operating activities:
Net loss $(252,697) $ (2,000) $(1,081,686)
Adjustments to reconcile net loss to
net cash provided by operating activities:
Depreciation 250 - 417
Write-down of intellectual property rights - - 490,000
Amortization of discount on payable to
related party 15,500 - 28,500
Issuance of common stock for services
rendered - - 101,108
Expenses paid by stockholder - - 2,640
Changes in operating assets and liabilities:
Increase in accounts payable and accrued
expenses 34,842 2,000 132,367
Increase in due to related parties 40,562 - 167,203
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Net cash provided by operating
activities (161,543) - (159,451)
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Net cash used in investing activities-
purchases of fixed assets - - (5,000)
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Net cash provided by financing activities-
proceeds from issuance of capital stock - - 175,000
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Net increase (decrease) in cash and
cash equivalents (161,543) - 10,549
Cash and cash equivalents at beginning
of period 172,092 - -
---------- ---------- ----------
Cash and cash equivalents at end of
period $ 10,549 $ - $ 10,549
========== ========== ==========
Supplemental schedule of noncash investing and financing activities:
Intellectual property acquired through
issuance of common stock and assumption
of related party payable $ - $ - $175,000
========== ========== ==========
Acquisition of intellectual property $ - $ - $425,000
========== ========== ==========
See Notes to Consolidated Financial Statements
GREATBIO TECHNOLOGIES, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
May 31, 2001
INTERIM FINANCIAL STATEMENTS:
The consolidated financial statements as of May 31, 2001 and for the three
months ended May 31, 2001 and 2000 are unaudited. However, in the opinion of
managment of the Company, these financial statements reflect all adjustments,
consisting solely of normal recurring adjustments, necessary to present fairly
the financial position and results of operations for such interim periods.
The results of operations for the interim periods presented are not
necessarily indicative of the results to be obtained for a full year.
PRINCIPAL BUSINESS ACTIVITIES:
The consolidated financial statements include the accounts of GreatBio
Technologies, Inc. and its wholly owned subsidiaries, LTR Antisense
Technology, Inc., MRIC Drug Delivery Systems, LLC (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 rights. Those rights were subsequently abandoned
and the Company has conducted no business since 1993.
The Company has not generated any revenue to date. 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 an Exchange Agreement ("the Agreement") dated
December 1, 2000 (as amended), the Company acquired from Biophan, LLC
("Biophan") all of the issued and outstanding common stock of its wholly-owned
subsidiary, LTR Antisense Technology, Inc. in exchange for 10,759,101 shares
of authorized but previously unissued common stock, par value $.005.
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 magnetic resonance imaging (MRI) technology from
Biophan for the future consideration of $500,000. The transfer was
consummated pursuant to and in accordance with the Transfer Agreement
(as amended), 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.
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 which raises substantial doubt regarding its ability to
continue as a going concern. In the interim, management is committed to
covering all operating and other costs.
DEFERRED PRIVATE EQUITY PLACEMENT COSTS:
In connection with a proposed private equity placement, the Company has
incurred costs aggregating $75,000 as of May 31, 2001. These costs will
be netted against the expected proceeds from the private placement.
SUBSEQUENT EVENTS:
In June 2001, the Company entered into bridge loan agreements providing
gross proceeds of $986,500. Loans of $400,000 from one lender provide for
a maturity date of December 15, 2001 and interest payable by issuance of
100,000 shares of Company stock on the due date. As additional
consideration, the noteholder receives 100,000 shares of stock and warrants
to purchase an additional 100,000 shares at $1.00 per share. The
noteholder has the right to convert the principal amounts into stock at
$.75 per share at any time prior to maturity. The Company also received a
series of bridge loans aggregating $586,500 upon the same proportionate
terms as above except that, among other things, the loans are for a term
of three months.
ITEM 2. 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-QSB. This Quarterly Report on Form 10-QSB 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 a number of factors including those identified herein and in
the Company's Annual report on Form 10-KSB and other periodic reports and
filings with the SEC.
Overview
The Company continues 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.
The Company is in the early stages of development of these two technologies.
Results of Operations
During the quarter ended May 31, 2000, the Company was inactive, earned no
revenues and incurred expenses of $2,000 in connection with filing all
required periodic reports under the Securities Exchange Act of 1934. On
December 1, 2000, the Company entered into agreements for the acquisition of
the MRI resistant cardiac pacemaker technology, the antisense gene therapy
technology and a subsidiary corporation and embarked on a new program for
development and eventual commercial exploitation of such technologies. The
Company remained in the development stage from that time through the quarter
ended May 31, 2001, earning no revenues except interest income. During the
quarter ended May 31, 2001, the Company pursued the development of it's
proprietary technology, incurring research and development expenses of
$125,099 and other general and administrative expenses of $109,922 plus
interest expense of $18,713. The net loss for the current quarter amounted to
$252,697.
Liquidity and Capital Resources
On December 1, 2000, in exchange for common stock, 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.
Through May 31, 2001, the related parties had advanced a total of $327,985 of
such expenses and Biophan was repaid $120,500, leaving a combined balance due
of $206,698 including accrued interest of $3,213.
In order to obtain sufficient cash for its next twelve months of
operations and beyond, in June 2001 the Company negotiated bridge loans that
will provide $986,500 in funding, expected to be received in the second
quarter. Generally, the loans have maturities of three to six months and
interest is payable by issuance of Company common shares and warrants. The
Company is also currently seeking to obtain equity financing through a private
placement offering that is planned to raise a maximum of $3,000,000. The
proceeds will be applied to reimbursement of expenses paid on the Company's
behalf by related parties, to funding of the CRADA project, to repayment of
the bridge loans, and to ongoing research and development of the proprietary
technology. Both of these funding sources will enable the Company to pursue
research and development of it's current proprietary technologies.
Currently, the Company does not have a need for material capital
expenditures in the conduct of its research and development activities.
PART II. OTHER INFORMATION
Item 1. Exhibits and reports on Form 8-K
a. Reports on Form 8-K
b. Signatures
* (a) The Company filed a Form 8-K on May 7, 2001 listing Item 4 (change in
registrant's certifying accountants).
* 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.
(b) Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GREATBIO TECHNOLOGIES, INC.
(Registrant)
Date: July 16, 2001
By: /s/ Michael L. Weiner
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Name: Michael L. Weiner,
Title: Chief Executive Officer
By: \s\ Robert J. Wood
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Name: Robert J. Wood
Title: Vice President and Treasurer
By: \s\ David A. Miller
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Name: David A. Miller
Title: Secretary