Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 2012
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _____ to _______
Commission File Number: 000-26947
BIOCUREX, INC.
--------------------------------
(Exact Name of Registrant as Specified in its Charter)
Texas 75-2742601
------------------------------ -----------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
7080 River Road, Suite 215
Richmond, British Columbia V6X 1X5
------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number including area code: (866) 884-8669
N/A
----------------------------------------------------------------
Former name, former address, and former fiscal year, if
changed since last report
Indicate by check mark whether the registrant (1) filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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 [ ]
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.232.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files). Yes [ ] No []
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definition of "large accelerated filer", "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.
Larger accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
Indicate by check mark whether registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes [ ] No [X]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 190,383,351 shares outstanding
as of May 10, 2012.
BIOCUREX, INC.
(A Development Stage Company)
CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. dollars)
March 31, 2012
INDEX
Consolidated Balance Sheets F-1
Consolidated Statements of Operations F-2
Consolidated Statements of Cash Flows F-3
Notes to the Consolidated Financial Statements F-4
BIOCUREX, INC.
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
(Expressed in U.S. dollars)
(Unaudited)
March 31, December 31,
ASSETS 2012 2011
$ $
Current Assets
Cash 76,488 189,148
Prepaid expenses and other 38,977 19,371
------------------------------------
Total Current Assets 115,465 208,519
Debt issue Costs (Note 4(a) and 6(b)) 24,534 28,084
Patents (Note 3) 414,911 438,540
Equipment (Note 2) 9,204 9,467
------------------------------------
Total Assets 564,114 684,610
------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT)
Current Liabilities
Accounts payable 69,093 86,027
Derivative liability (Note 12) 22,159 15,862
Accrued liabilities 363,633 361,281
Loans payable (Note 4(b) 33,851 33,884
Due to related parties (Note 5) 775,831 647,364
Convertible notes payable (Note 6(a))
to related party 33,885 33,885
Convertible debt (Note 6(b) and (c)) 604,276 477,640
Loans payable (Note 4(a)) 109,880 -
------------------------------------
2,012,608 1,655,943
------------------------------------
Loans payable (Note 4(a)) - 103,929
Convertible debt (Note 6(c)) - 78,500
------------------------------------
2,012,608 1,838,372
Commitments and Contingencies (Notes 1
and 13)
Subsequent Event (Note 14)
Stockholders' Equity (Deficit)
Common stock
Authorized: 450,000,000 shares, par
value $0.001
Issued and outstanding:186,011,147
and 184,612,814 (December 31, 2011
- 180,423,597and 179,025,264),
respectively 184,614 179,025
Additional paid-in capital 25,276,891 25,173,736
Accumulated deficit (114,175) (114,175)
Deficit accumulated during the
development stage (26,795,824) (26,392,348)
------------------------------------
Stockholders' Equity (Deficit) (1,448,494) (1,153,762)
------------------------------------
Total Liabilities and Stockholders' 564,114 684,610
Equity (Deficit)
------------------------------------
The accompanying notes are an integral part of these consolidated financial
statements
F-1
BIOCUREX, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Expressed in U.S. dollars)
(Unaudited)
Accumulated During
the
Development Stage
Three Months Ended January 1, 2001
March 31, to March 31,
2012 2011 2012
$ $ $
Revenue 14,049 - 1,485,403
------------------------------------------------
Operating Expenses
Amortization of patents (Note 3) 27,435 26,512 463,824
General and administrative (Note 5(a)
& 8) 167,944 172,908 9,622,954
Impairment of patents - - 67,620
Professional and consulting fees 53,811 159,668 6,125,031
Research and development (Note 5(a)) 117,371 190,210 5,642,813
------------------------------------------------
Total Operating Expenses 366,561 549,298 21,922,242
------------------------------------------------
Loss From Operations (352,512) (549,298) (20,436,839)
------------------------------------------------
Other Income (Expense)
Accretion of discounts on debt (21,787) (18,044) (4,027,096)
Amortization of debt issue costs (6,050) (5,984) (816,624)
Gain (loss) on derivative liability (5,395) 54,996 121,255
Loss on extinguishments of convertible
debt - - (374,909)
Gain on sale of equity investment
securities - - 147,991
Gain on settlement of accounts payable - - 102,937
Loss on sale of assets - - (5,679)
Interest expense (17,732) (14,020) (1,890,539)
Interest income - - 383,679
------------------------------------------------
Total Other Income (Expense) (50,964) 16,948 (6,358,985)
------------------------------------------------
Net Loss and Comprehensive Loss (403,476) (532,350) (26,795,824)
------------------------------------------------
Net Loss Per Share - Basic and Diluted (0.00) (0.00)
---------------------------
Weighted Average Shares Outstanding 181,165,000 168,645,000
---------------------------
The accompanying notes are an integral part of these consolidated financial
statements
F-2
BIOCUREX, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in U.S. dollars)
(Unaudited)
Accumulated
During
The Development
Three Months Ended Stage
March 31, January 1, 2001
2012 2011 to March 31, 2012
---------------------------------------
$ $ $
Operating Activities:
Net loss for the period (403,476) (532,350) (26,795,824)
Adjustments to reconcile net loss to net
cash used in operating activities:
Accretion of discounts on debt 21,787 18,044 4,032,470
Allowance for uncollectible notes
receivable - - 98,129
Amortization of patents & equipment 27,435 26,512 464,876
Amortization of debt issue costs 6,050 5,984 816,624
Loss on extinguishments of debt - - 374,909
Loss on sale of assets 5,674
Gain on write off accounts payable - - (102,937)
Gain on sale of investment
securities - - (253,065)
Loss from impairment of patents - - 67,620
Gain (loss) on derivative liability 6,297 (54,996) (120,352)
Stock-based compensation 17,317 73,058 8,276,653
Changes in operating assets and liabilities:
Notes and interest receivable - - (6,296)
Prepaid expenses and other (19,606) 4,623 (3,282)
Accounts payable & accrued
liabilities 37,885 45,155 1,841,529
Due to related party 167,394 12,175 345,739
Deferred revenue - - (162,000)
Subscriptions receivable - (100,683)
---------------------------------------
Cash Used in Operating Activities (138,917) (401,795) (11,220,216)
---------------------------------------
Investing Activities:
Net Proceeds from notes receivable - - 1,171
Patent costs (3,543) (18,700) (741,624)
Proceeds from sale of investment
securities - - 451,123
Proceeds from sale / purchase of
equipment, net - (16,195)
---------------------------------------
Cash Used in Investing Activities (3,543) (18,700) (305,525)
---------------------------------------
Financing Activities:
Due to related parties - - 552,281
Proceeds from loans payable - - 607,549
Repurchase of shares - - (20,000)
Repayment on loans payable - - (450,000)
Proceeds from convertible debt 42,500 - 3,760,743
Repayment on convertible debt (10,200) - (2,429,991)
Deferred financing costs - - (769,487)
Debt issue costs (2,500) - (95,444)
Proceeds from shares issued of
common stock - - 9,962,872
Proceeds from the exercise of
stock options and warrants - 2,288 1,150,204
Share issuance costs - - (909,049)
---------------------------------------
Cash Provided by Financing Activities 29,800 2,288 11,359,678
---------------------------------------
Net Decrease in Cash (112,660) (418,207) (166,063)
Cash - Beginning of Period 189,148 1,770,194 242,551
---------------------------------------
Cash - End of Period 76,488 1,351,987 76,488
---------------------------------------
Non-cash Investing and Financing
Activities:
Share issued to settle debt 52,500 70,000 1,337,177
Units issued as share issuance
costs - - 939,771
Shares acquired for note receivable - - 20,000
Note payable converted into common
shares - - 1,594,021
---------------------------------------
Supplemental Disclosures:
Interest paid 15,380 13,602 775,978
Income taxes - - -
---------------------------------------
The accompanying notes are an integral part of these consolidated financial
statements
F-3
BIOCUREX, INC.
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. dollars)
FOR THE THREE MONTHS ENDED MARCH 31, 2012 AND 2011
(Unaudited)
1. NATURE OF BUSINESS AND CONTINUANCE OF OPERATIONS
BioCurex, Inc. (the "Company") was incorporated on December 8, 1997, under the
laws of the State of StateplaceTexas. During the first quarter of 2001, the
Company ceased its business activities relating to the acquisition and sale of
thoroughbred racehorses when a change of majority control occurred. On February
21, 2001, the Company acquired intellectual properties and patents relating to
cancer diagnostics and therapeutics. The Company is now in the business of
developing, producing, marketing and licensing products based on patented and
proprietary technology in the area of cancer diagnostics. The Company is
considered a development stage enterprise as defined by Financial Accounting
Standards Board ("FASB") Accounting Standards Codification ("ASC") 915,
Development Stage Entities. On October 31, 2008, the Company incorporated
BioCurex country-regionChina Co., Ltd. ("Biocurex country-regionChina"), a
wholly-owned subsidiary in country-regionplaceChina. On December 8, 2009, the
Company incorporated OncoPet Diagnostics Inc., a wholly-owned subsidiary under
the laws of the State of StateplaceColorado.
The consolidated financial statements are prepared in conformity with accounting
principles generally accepted in the country-regionplaceUnited States of America
applicable to a going concern, which contemplates the realization of assets and
liquidation of liabilities in the normal course of business. The Company does
not have sufficient cash nor does it have an established source of revenue to
cover its ongoing costs of operations for the next twelve months. Management
plans to obtain additional funds through the sale of its securities. However
there is no assurance of additional funding being available. As at March 31,
2012, the Company has a working capital deficit of $1,897,143 and accumulated
losses of $26,795,824 since the inception of the development stage. These
factors raise substantial doubt about the Company's ability to continue as a
going concern. These financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
These consolidated financial statements and related notes are presented in
accordance with accounting principles generally accepted in the
country-regionplaceUnited States, and are expressed in U.S. dollars. These
consolidated financial statements include the accounts of the Company and its
wholly-owned subsidiaries, BioCurex country-regionplaceChina and OncoPet
Diagnostics Inc. The Company's fiscal year-end is December 31.
Interim Financial Statements
The interim unaudited financial statements have been prepared in accordance with
accounting principles generally accepted in the country-regionplaceUnited States
for interim financial information and with the instructions for Securities and
Exchange Commission ("SEC") Form 10-Q and they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. Therefore, these financial statements should
be read in conjunction with the Company's audited financial statements and notes
thereto for the year ended December 31, 2011, included in the Company's Annual
Report on Form 10-K filed on March 29, 2012 with the SEC.
In the opinion of the Company's management, these consolidated financial
statements reflect all adjustments necessary to present fairly the Company's
consolidated financial position at March 31, 2012, and the consolidated results
of operations and the consolidated statements of cash flows for the three months
ended March 31, 2012 and 2011. The results of operations for the three months
ended March 31, 2012 are not necessarily indicative of the results to be
expected for future interim periods or for the entire fiscal year.
F-4
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the country-regionplaceUnited States requires management
to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the periods. The Company regularly evaluates estimates and assumptions
related to valuation of patent costs, stock-based compensation, financial
instrument valuations, and deferred income tax asset valuation allowances. The
Company bases its estimates and assumptions on current facts, historical
experience and various other factors that it believes to be reasonable under the
circumstances, the results of which form the basis for making judgments about
the carrying values of assets and liabilities and the accrual of costs and
expenses that are not readily apparent from other sources. The actual results
experienced by the Company may differ materially and adversely from the
Company's estimates. To the extent there are material differences between the
estimates and the actual results, future results of operations will be affected.
Cash and Cash Equivalents
The Company considers all highly liquid instruments with maturity of three
months or less at the time of issuance to be cash equivalents.
Registration Payment Arrangements
The Company accounts for registration rights arrangements and related liquidated
damages provisions under FASB ASC 815-40, Derivatives and Hedging - Contracts in
Entity's own Entity, which addresses an issuer's accounting for registration
payment arrangements. ASC 815-40 defines a registration payment arrangement as
an arrangement where the issuer i) will endeavor to file a registration
statement for the resale of financial instruments, have the registration
statement declared effective, or maintain its effectiveness and ii) transfer
consideration to the counterparty if the registration statement is not declared
effective or its effectiveness is not maintained.
ASC 815-40 requires the contingent obligation to make future payments or
otherwise transfer consideration under a registration payment arrangement,
whether issued as a separate agreement or included as a provision of a financial
instrument or other agreement, to be separately recognized and measured in
accordance with ASC 450, Contingencies.
Research and Development Costs
Research and development costs are charged to operations as incurred.
Foreign Currency Translation
The Company's functional and reporting currency is the country-regionplaceUnited
States dollar. Monetary assets and liabilities denominated in foreign currencies
are translated to country-regionplaceUnited States dollars in accordance with
ASC 830, Foreign Currency Translation Matters using the exchange rate prevailing
at the balance sheet date. Gains and losses arising on translation or settlement
of foreign currency denominated transactions or balances are included in the
determination of income. Foreign currency transactions are primarily undertaken
in Canadian dollars and Chinese Renminbi.
Revenue Recognition
The Company recognizes revenue in accordance with ASC 605 Revenue Recognition,
Revenue is recognized only when the price is fixed or determinable, persuasive
evidence of an arrangement exists, the service is performed, and collectability
is reasonably assured. The Company's revenue since the inception of the
development stage consisted of license fees related to the licensing of its
RECAF(TM) technology.
F-5
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Long-lived Assets
In accordance with ASC 360, Property Plant and Equipment, the Company tests
long-lived assets or asset groups for recoverability when events or changes in
circumstances indicate that their carrying amount may not be recoverable.
Circumstances which could trigger a review include, but are not limited to:
significant decreases in the market price of the asset; significant adverse
changes in the business climate or legal factors; accumulation of costs
significantly in excess of the amount originally expected for the acquisition or
construction of the asset; current period cash flow or operating losses combined
with a history of losses or a forecast of continuing losses associated with the
use of the asset; and current expectation that the asset will more likely than
not be sold or disposed significantly before the end of its estimated useful
life.
Recoverability is assessed based on the carrying amount of the asset and its
fair value which is generally determined based on the sum of the undiscounted
cash flows expected to result from the use and the eventual disposal of the
asset, as well as specific appraisal in certain instances. An impairment loss is
recognized when the carrying amount is not recoverable and exceeds fair value.
Income Taxes
The Company accounts for income taxes using the asset and liability method in
accordance with ASC 740, Income Taxes. The asset and liability method provides
that deferred tax assets and liabilities are recognized for the expected future
tax consequences of temporary differences between the financial reporting and
tax bases of assets and liabilities, and for operating loss and tax credit
carryforwards. Deferred tax assets and liabilities are measured using the
currently enacted tax rates and laws that will be in effect when the differences
are expected to reverse. The Company records a valuation allowance to reduce
deferred tax assets to the amount that is believed more likely than not to be
realized.
Stock-based Compensation
The Company records stock-based compensation in accordance with ASC 718,
Compensation - Stock Compensation, and ASC 505-50, Equity-Based Payments to
Non-Employees using the fair value method. All transactions in which goods or
services are the consideration received for the issuance of equity instruments
are accounted for based on the fair value of the consideration received or the
fair value of the equity instrument issued, whichever is more reliably
measurable.
F-6
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Basic and Diluted Net Loss per Share
The Company computes net loss per share in accordance with ASC 260 Earnings Per
Share which requires presentation of basic earnings per share and diluted
earnings per share. The computation of basic earnings per share is computed by
dividing income available to common stockholders by the weighted-average number
of outstanding common shares during the period. Diluted earnings per share gives
effect to all potentially dilutive common shares outstanding during the period.
The computation of diluted EPS does not assume conversion, exercise or
contingent exercise of securities that would have an anti-dilutive effect on
earnings. As of March 31, 2012, the Company had approximately 151,304,158
potentially dilutive securities, including options, warrants and equity
instruments related to convertible notes payable and convertible debt, all of
which were anti-dilutive since the Company incurred losses during these periods.
Patents
Patents are stated at cost and have a definite life. Once the Company receives
patent approval, amortization is calculated using the straight-line method over
the remaining life of the patents.
Property and Equipment
Property and equipment are recorded at cost less amortization, whereby in the
year of acquisition only half a year of amortization is applied. Property and
equipment consist of lab equipment acquired during the year of $10,519 less
amortization of $1,315 (5 years straight-line), for an ending net book value of
$9,204.
Reclassifications
Certain reclassifications have been made to the prior period's financial
statements to conform to the current period's presentation.
Recent Accounting Pronouncements
The Company has implemented all new accounting pronouncements that are in
effect. These pronouncements did not have any material impact on the financial
statements unless otherwise disclosed, and the Company does not believe that
there are any other new accounting pronouncements that have been issued that
might have a material impact on its financial position or results of operations.
F-7
3. PATENTS
Patents relate to developing the method for diagnostic and treatment of cancer
using a new cancer marker called "RECAF." The Company has filed patent
applications in 23 countries with ongoing applications currently being prepared.
As of March 31, 2012, the Company had received patent approval from five
countries and the European patent office. Additions made after March 31, 2012
will have a remaining life of approximately three years. The Company intends to
apply for extensions in the near future.
A schedule of the patents is as follows:
March 31, December 31,
2012 2011
$ $
Patents 869,722 866,178
Less:
Accumulated amortization (454,811) (427,638)
----------------------------------------------------------------------------
Net Carrying Value 414,911 438,540
----------------------------------------------------------------------------
Amortization expense totaled $27,172 and $26,512 for the three months ended
March 31, 2012 and 2011, respectively.
The estimated future amortization expense is as follows:
$
2012 81,515
2013 108,687
2014 224,709
--------------
414,911
--------------
F-8
4. LOANS PAYABLE
a) On September 21, 2009, the Company completed a private placement in which
it sold three promissory notes in the aggregate principal amount of
$125,000 and 1,785,715 shares of its common stock for an aggregate purchase
price of $125,000.
The promissory notes bear interest at a rate of 10% per annum. Both
interest and principal are payable on January 31, 2013.
The aggregate purchase price for the units was allocated equally between
the notes and shares contained in each Unit based on their relative fair
value. The relative fair value assigned to the shares totaled $62,500.
These amounts were recorded as a notes discount and will be amortized as
interest expense over the term of the promissory notes.
During the three months end of March 31, 2012, the Company paid interest in
the amount of $3,116 (2011 - $3,082) and recorded $5,951 (2011 - $4,236) as
the accretion expense related to these promissory notes. As at March 31,
2012, the carrying value of these notes was $109,880 (December 31, 2011 -
$103,929).
During the three months end of March 31, 2012, the Company expensed $759
(2011 - $751) of the debt issue costs related to promissory notes, and at
March 31, 2012, the balance of debt issue costs was $2,544 (December 31,
2011- $3,303).
b) As of March 31, 2012, the Company has received a net advance of 213,244 RMB
(US $33,851) (December 31, 2011 - 213,244 RMB (US $33,884)) from BioCurex
country-regionplaceChina's Agent. The advance is non-interest bearing,
unsecured and due on demand.
5. RELATED PARTY TRANSACTIONS AND BALANCES `
March 31, December 31,
2012 2011
$ $
Due to Pacific BioSciences Research Centre Inc. and 687,239 595,548
Company's President (a)
Due to Company's Chairman (b) 54,495 29,386
Due to a former officer (c) 4,930 4,930
Due to Company's Director (d) 29,167 17,500
-----------------------------------------------------------------------------
775,831 647,364
-----------------------------------------------------------------------------
F-9
5. RELATED PARTY TRANSACTIONS AND BALANCES (continued)
a) The Company's research and development is performed by Pacific BioSciences
Research Centre ("Pacific"). Pacific is 100% owned by the CEO of the
Company. During the three months ended March 31, 2012 and 2011, Pacific
performed research and development for the Company valued at $103,596 and
$165,949, respectively.
Pacific also provided administrative services during the three months ended
March 31, 2012 and 2011, valued at $50,501 and $49,720, respectively.
During the three months ended March 31, 2012, and 2011, Pacific charged
interest of $4,019 and $2,031, respectively, calculated at the bank prime
rate on the monthly balance owed. In the past three months, the Company
issued 1,912,550 shares of common stock to the employees of Pacific to
settle $38,251 of the related party balance owing to Pacific. As at March
31, 2012 and December 31, 2011, the amount due to Pacific was $562,914 and
$403,072, respectively, and is unsecured and due on demand.
On September 15, 2009, the Company entered into an agreement with the
Company's CEO to provide management services for a fee of $250,000 per
annum. During three months ended March 31, 2012, the Company incurred
$62,500 (2011 - $62,500) for the management services of which the unpaid
balance was $124,325 (December 31, 2011- $62,500).
b) On September 15, 2009, the Company entered into an agreement with the
Company's Chairman to provide management services for a fee of $100,000 per
annum based on 40 hours per month. During the three months ended March 31,
2012, the Company incurred $25,000 (2011 - $36,000) for management
services. As at March 31, 2012, the Company is indebted to the Company's
Chairman for $54,495 (December 31, 2011- $29,386) of management fees and
miscellaneous expense
c) As at March 31, 2012 the Company owed $4,930 to a former officer which is
unsecured, non-interest bearing and due on demand.
d) During the three months ended March 31, 2012, Company incurred $17,500 in
consulting fees to a director of the Company (2011- $17,500), of which
$29,167 was outstanding at December 31, 2011 (2011 - $17,500).
6. CONVERTIBLE NOTES AND DEBT
a) As of March 31, 2012, one $33,885 (2011 - $33,885) convertible note is
outstanding which is payable to a related party. The note bears interest at
5% annum, is unsecured and due on demand.
Under the convertibility terms of the notes payable, the principal, can be
converted immediately, at the option of the holder, either in whole, or in
part, into fully paid common shares of the Company. The conversion price
per share is equal to the lesser of the stated price at $0.17 or 75% of the
average closing bid prices for the five trading days ending on the trading
day immediately before the date of the conversion.
b) As of March 31, 2012, the Company has convertible notes (the "Notes") in
the principal amount of $534,260. The Notes bear interest at an annual rate
of prime (as adjusted monthly on the first business day of each month) plus
2.75% per year, payable in arrears on the first day of each month. The
Notes are due and payable on December 31, 2012 and are secured by
substantially all of the Company's assets. At the holders' option, the
Notes are convertible into shares of the Company's common stock at a
conversion price of $0.13 per share. The embedded conversion option
contains a reset provision that can cause an adjustment to the conversion
price if the Company issues an equity instrument that does not qualify as
an Exempt Issuance at a price lower than the initial conversion price. An
Exempt Issuance is defined as:
F-10
6. CONVERTIBLE NOTES AND DEBT (continued)
i. shares or options issued to employees of Biocurex for services
rendered pursuant to any stock or option plan adopted by the Directors
of Biocurex, not to exceed 500,000 shares or options in any year;
ii. options issued to officers or directors of Biocurex, provided that the
number of options issued during any twelve-month period may not exceed
500,000;
iii. shares or options issued at fair market value for services rendered to
independent consultants, limited to 500,000 shares or options in any
year;
iv. restricted equity securities sold for cash, provided that no more than
500,000 restricted equity securities can be sold in any year, the
restricted equity securities cannot be registered for public sale, and
the restricted equity securities, and the exercise price of any
warrants, cannot be less than 75% of the market price of Biocurex's
common stock;
v. shares issued to any note holder in payment of principal or interest;
vi. shares sold to any note holder;
vii. securities issued upon the conversion of the Notes or the exercise of
the Warrants;
viii. securities issued upon the conversion of notes or the exercise of
options or warrants issued and outstanding on June 25, 2007, provided
that the securities have not been amended to increase the number of
such securities or to decrease the exercise, exchange or conversion
price of the securities.
Due to this provision, the embedded conversion option qualifies for
derivative accounting under ASC 815-15 (See Note 12).
The following table summarizes the changes in the Notes during the three
months ended March 31, 2012:
Carrying
Principal Discount Value
$ $ $
--------------------------------
Balance, December 31, 2011 544,460 (66,820)
Principal repayments (10,200) - (10,200)
Accretion of discount on convertible - 15,836 15,836
debt
--------------------------------
Balance, March 31, 2012 534,260 (50,984) 483,276
--------------------------------
During the three months ended March 31, 2012, the Company expensed $5,292
(2011 - $5,233) of the debt issue costs related to these convertible notes.
The balance of debt issue costs at March 31, 2011 is $15,990 (December 31,
2011 - $21,281).
c) The Company issued two convertible notes with principal amounts of $78,500
and $42,500, respectively, to a private investor. The note with a principal
amount of $78,500 is convertible commencing on June 15, 2012 and is due on
March 19, 2013. The note with a principle amount of $42,500 is convertible
commencing on August 21, 2012 and is due on February 23, 2013. Both notes
bear interest at 8% per year and are unsecured. The number of shares to be
issued upon any conversion will be determined by dividing the principal
amount to be converted by the conversion price. The conversion price is 58%
of the average of the lowest five Trading Prices for our common stock
during the ten trading day period ending on the trading day prior to the
date the note is converted. "Trading Price" means the closing bid price of
the Company's common stock on the Over-the-Counter Bulletin Board. As at
March 31 2012, the embedded conversion feature has not been bifurcated and
separately accounted for as it does not provide for net settlement until it
becomes convertible on June 15 and August 21, 2012.
F-11
6. CONVERTIBLE NOTES AND DEBT (continued)
On the issuance of the convertible note, the Company incurred $6,000 in
debt issuance costs. These costs were capitalized and will be amortized
over the life of the note.
7. COMMON STOCK
a) In February 2012, the Company issued 675,000 shares of common stock
pursuant to stock options exercised at $0.001 per share.
b) In February 2012, the Company issued 1,500,000 shares of common stock to a
vendor with an estimated fair value of $22,500 for consulting services.
c) In February 2012, the Company issued 1,141,700 shares of common stock to
three employees of a related party with an estimated fair value of $22,834
to settle a related party loan.
d) In March 2012, the Company issued 1,500,000 shares of common stock to a
vendor with an estimated fair value of $30,000 for consulting services.
e) In March 2012, the Company issued 770,850 shares of common stock to three
employees of a related party with an estimated fair value of $15,417 to
settle a related party loan.
8. STOCK-BASED COMPENSATION
Stock Bonus Plan
Under the Company's Stock Bonus Plan, employees, directors, officers,
consultants and advisors are eligible to receive a grant of the Company's
shares, provided that bona fide services are rendered by consultants or advisors
and such services must not be in connection with the offer or sale of securities
in a capital-raising transaction. On April 19, 2012, the Company increased the
number of shares issuable pursuant to this plan from 20,000,000 shares to
40,000,000 shares with 19,435,116 common shares available for future issuance as
of April 19, 2012.
Non-Qualified Stock Option Plan
The Company's Non-Qualified Stock Option Plan authorizes the issuance of common
shares to persons that exercise stock options granted. The Company's employees,
directors, officers, consultants and advisors are eligible to be granted stock
options pursuant to this plan, provided that bona fide services are rendered by
such consultants or advisors and such services must not be in connection with
the offer or sale of securities in a capital-raising transaction. The stock
option exercise price is determined by a committee and cannot be less than
$0.001.
On November 30, 2010, the Company increased the number of shares issuable
pursuant to this plan from 17,500,000 shares to 22,500,000 shares with 8,870,666
common shares available for future issuance as of March 31, 2012.
F-12
8. STOCK-BASED COMPENSATION (continued)
Management stock options
As of March 31, 2012, the Company granted 28,500,000 stock options to five
directors and one officer at an exercise price of $0.0714 per share. The stock
options expire on December 31, 2020. Holders of the management stock options may
exercise the options by paying the exercise price to the Company or on a
cashless basis upon the approval of the Company's board of directors. Should the
options be exercised on a cashless basis, the Company will issue common shares
of the Company with a market value equal to the intrinsic value of the options
at the close of trading on the date of exercise. The management stock options
were not issued under the Company's Non-Qualified Stock Option Plan and as at
July 1, 2010, the Company filed a registration statement under the Securities
Act of 1933 to register the underlying shares. Accordingly, any shares issuable
upon the exercise of these options will be free trading securities.
A summary of the changes in the Company's stock options is presented below:
Weighted Weighted
Average Average Aggregate
Exercise Remaining Intrinsic
Number of Price Contractual Value
Shares $ Life (Years) $
---------------------------------------------------------------------------------
Outstanding, December 31, 2011 30,806,600 0.066 7.56 20,759
Exercised (675,000) 0.001
---------------------------------------------------------------------------------
Outstanding, March 31, 2012 30,131,600 0.068 7.48 31,816
---------------------------------------------------------------------------------
The compensation cost of shares vested was $17,317 and $3,057 for the three
months ended March 31, 2012 and 2011, respectively. Compensation cost has been
included in general and administration expense in the statement of operations.
A summary of the status of the Company's non-vested options as of March 31,
2012, and changes during the three months ended of March 31, 2012, is presented
below:
Number of Weighted Average
Non-vested Options Exercise Price
---------- ------- ----------------
Non-vested at December 31, 2011 9,500,000 0.0714
Vested during period (9,500,000) 0.0714
---------------------------------------------------------------------------
Non-vested at March 31, 2012 - -
===========================================================================
F-13
9. SHARE PURCHASE WARRANTS
A summary of the changes in the Company's share purchase warrants is
presented below:
Weighted Average
Number of shares Exercise Price
-------------------------------------------------------------------------
Balance, December 31, 2011 99,164,330 0.134
-------------------------------------------------------------------------
Balance, March 31, 2012 99,164,330 0.134
-------------------------------------------------------------------------
As at March 31, 2012, the following share purchase warrants were
outstanding:
Warrants Exercise Price Expiration Date
-------- -------------- ---------------
1,000,000 $0.25 30-Apr-2012
2,000,000 $0.11 1-Apr-2012
2,204,730 $0.08 26-Aug-2014
3,500,000 $0.14 27-Jun-2012
90,459,600 $0.11 19-Jan-2015(1)
----------------------
99,164,330
----------------------
(1) The public warrants are exercisable at any time before January 19, 2015.
The Company may redeem some or all of the public warrants at a price of
$0.003 per warrant by giving the holders not less than 30 days' notice at
any time the common stock closes, as quoted on the Bulletin Board, at or
above $0.143 per share for five consecutive trading days.
10. UNIT PURCHASE WARRANTS
On January 28, 2010, the Company issued a warrant in conjunction with an
Underwriting Agreement that allows the underwriters to purchase up to 120,000
units at $6.00 per unit for a term of five years from January 19, 2015. Each
unit consists of 70 shares of common stock and 70 warrants to purchase shares of
the Company's common stock at an exercise price of $0.107 per share. As at March
31, 2012, the 120,000 unit purchase warrants were outstanding.
11. FAIR VALUE MEASUREMENTS
ASC 825 defines fair value as the price that would be received from selling an
asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. In determining fair value for assets and
liabilities required or permitted to be recorded at fair value, the Company
considers the principal or most advantageous market in which it would transact
and it considers assumptions that market participants would use when pricing the
asset or liability.
Fair Value Hierarchy
ASC 825 establishes a fair value hierarchy that requires an entity to maximize
the use of observable inputs and minimize the use of unobservable inputs when
measuring fair value. A financial instrument's categorization within the fair
value hierarchy is based upon the lowest level of input that is significant to
the fair value measurement. ASC 825 establishes three levels of inputs that may
be used to measure fair value.
Level 1
Level 1 applies to assets and liabilities for which there are quoted prices in
active markets for identical assets or liabilities. Valuations are based on
quoted prices that are readily and regularly available in an active market and
do not entail a significant degree of judgment.
F-14
11. FAIR VALUE MEASUREMENTS (continued)
Level 2
Level 2 applies to assets and liabilities for which there are other than Level 1
observable inputs such as quoted prices for similar assets or liabilities in
active markets, quoted prices for identical assets or liabilities in markets
with insufficient volume or infrequent transactions (less active markets), or
model-derived valuations in which significant inputs are observable or can be
derived principally from, or corroborated by, observable market data. Level 2
instruments require more management judgment and subjectivity as compared to
Level 1 instruments.
Level 3
Level 3 applies to assets and liabilities for which there are unobservable
inputs to the valuation methodology that are significant to the measurement of
the fair value of the assets or liabilities. The determination of fair value for
Level 3 instruments requires the most management judgment and subjectivity.
The Company's financial instruments consist principally of cash, accounts
payable, derivative liability, loans payable, convertible note payable to
related party, convertible debt and amounts due to related parties. The carrying
value of accounts payable and amounts due to related parties approximate fair
value due to their nature and short terms of maturity. The carrying value of
loans payable, convertible note payable to related party and convertible debt
approximate fair value are based on market rates for similar financial
instruments.
Assets and liabilities measured at fair value on a recurring basis were
presented on the Company's consolidated balance sheet as of March 31, 2012 as
follows:
Fair Value Measurements Using
Quoted
Prices in
Active
Markets Significant
For Other Significant
Identical Observable Unobservable
Instruments Inputs Inputs Balance as of
(Level 1) (Level 2) (Level 3) March 31, 2012
-------------------------------------------------------
Assets:
Cash $ 76,488 $ - $ - $ 76,488
-----------------------------------------------------------------------------------
Total assets measured at $ 76,488 $ - $ - $ 76,488
fair value
-----------------------------------------------------------------------------------
Liabilities:
Derivative liabilities $ - $ 22,159 $ - $ 22,159
-----------------------------------------------------------------------------------
Total liabilities measured
at fair value $ - $ 22,159 $ - $ 22,159
-----------------------------------------------------------------------------------
F-15
12. DERIVATIVE LIABILITIES
The embedded conversion option in the Company's note described in Note 6(b)
contains a reset provision that can cause an adjustment to the conversion price
if the Company issues certain equity instruments at a price lower than the
initial conversion price. The fair value of these liabilities will be
re-measured at the end of every reporting period and the change in fair value
will be reported in our consolidated statement of operations as a gain or loss
on derivative financial instruments.
The following table summarizes the change in derivative liabilities for the
three months ended March 31, 2012:
$
------------------------------------------------------------------------
Derivative liabilities at December 31, 2011 15,862
Settlement of derivative liabilities 902
Change in fair value of derivative liabilities 5,395
------------------------------------------------------------------------
Derivative liabilities at March 31, 2012 22,159
------------------------------------------------------------------------
13. COMMITMENTS AND CONTINGENCIES
a) On April 4, 2006, the Company entered into a consulting agreement with a
term of nine months for consideration of 75,000 common shares. As of March
31, 2012, the Company had issued 37,500 common shares and 37,500 common
shares are still owed to the consultant.
b) On April 10, 2006, the Company entered into a consulting agreement with a
term of one year for consideration of 75,000 common shares. As of March 31,
2012, the Company had issued 37,500 common shares and 37,500 common shares
are still owed to the consultant.
14. SUBSEQUENT EVENTS
a) In April 2012, the Company issued 3,800,000 shares of common stock to
vendors with an estimated fair value of $55,000 for legal and consulting
services.
b) In April 2012, the Company issued 1,600,922 shares of common stock to three
employees of a related party with an estimated fair value of $20,812 to
settle a related party loan.
c) In April 2012, the Company issued 384,615 shares of common stock to a
vendor with an estimated fair value of $5,000 for financing services.
F-16
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION
We are a development stage biotechnology company developing products based
on patented and proprietary technology in the area of cancer diagnostics. The
technology identifies a universal cancer marker known as RECAF. Patents have
been granted in the United States, Europe, Australia and China and are pending
in other major worldwide markets.
RECAF is a molecule that is present on cancer cells but not detected in
significant levels on healthy cells or benign tumor cells. It is the receptor
for alpha-fetoprotein and is classified as an oncofetal antigen due to its
presence on both fetal and malignant tissues. This characteristic makes RECAF a
more accurate indicator of cancer than most current tumor markers.
We are commercializing our technology through licensing arrangements with
companies that develop and market diagnostic tests for the large automated
clinical laboratory setting, through development and marketing of non-automated
clinical laboratory tests, through development of rapid, point-of-care test
formats, and through marketing of our OncoPet RECAF test for cancer in companion
animals.
Our business model is to develop internally our RECAF cancer diagnostic
platform to the stage where individual applications can be partnered or licensed
in strategic relationships for regulatory approval and commercialization. Our
objective is to receive cash from licensing fees, milestone payments, and
royalties from such partnerships which support continued development of our
cancer diagnostic portfolio. We have signed licensing agreements for its cancer
detection blood tests with Abbott Laboratories and with Inverness Medical
Innovations. In the veterinarian market where there are no regulatory hurdles,
our objective is to commercialize our technology through our subsidiary, OncoPet
Diagnostics, and with distributors in North America, placeEurope and elsewhere.
Our principal objectives for the twelve-month period ending March 31, 2013
are as follows:
o grant one additional license for our cancer detection blood test;
o commercialize veterinary applications of RECAF testing technology
through our wholly-owned subsidiary, OncoPet Diagnostics;
o finish development for our rapid, point of care cancer test; and
o commercialize other test formats through our wholly-owned subsidiary
in China, BioCurex China Co., Ltd.
Our success is dependent upon several factors, including, maintaining
sufficient levels of funding through pubic and/or private financing,
establishing the reliability of our RECAF cancer tests in screening, diagnosis,
and follow-up for cancer recurrence, securing and supporting strategic
partnerships, securing regulatory approvals where necessary, and commercializing
our technology. We may not be able to achieve these objectives by March 31,
2013, or at all.
1
Recent Developments
-------------------
In October 2010 we filed a new patent within the Patent Cooperation Treaty,
which presently includes 142 countries. The subject of this patent is a
synthetic peptide that recognizes RECAF(TM) and that can replace the antibodies
used in our RECAF test. The synthetic peptide also allows for many other
applications that cannot be performed with an antibody. Our patent application
contains over 50 claims covering different applications and uses of this
peptide.
An antibody is a biological reagent that requires production under sterile
conditions in large volumes of cell culture medium. The antibodies then need to
be extracted and purified from the medium. This process is expensive and
delicate. The synthetic peptide will allow our to replace the antibodies in the
RECAF test. A peptide is a short sequence of amino acids, much like a very small
protein. Peptides are produced with an automated peptide synthesizer. A well
known small peptide is aspartame, the synthetic sweetener used in Nutrasweet(R).
To make a peptide in a laboratory, its amino acids sequence is entered into
a computer and the rest of the process is automatically handled by special
computer software and instrumentation. Since the peptide is synthesized
chemically rather than biologically, the batch-to-batch variability is
drastically reduced and the cost reduction is significant. Being small
molecules, peptides are also more stable than antibodies, resulting in longer
shelf life and related issues.
The most important advantage of peptides over antibodies is their
flexibility: Antibodies cannot be modified unless very expensive and complex
molecular engineering processes are used. To change the specificity of an
antibody, one has to develop a new one, which is a very labor intensive and
unpredictable process. On the other hand, to modify a peptide, all that is
required is to use a different amino acid sequence on the computer. This
tremendous flexibility opens many possibilities for us, some of which are listed
below:
1) Tailoring dog, cat and other animal RECAF tests for each species
rather than relying, on the cross reactivity exhibited by anti-human
RECAF antibodies against dog RECAF.
2) Tailor-tagging of the peptide for different uses such as cancer
targeted therapy, imaging or blood diagnostic tests.
3) Attaching the peptide to liposomes for cancer targeting. Liposomes are
artificially prepared vesicles that can be filled with anti-cancer
drugs, Interference RNA or other compounds and delivered to cancer
cells. Attaching the peptide to the surface of liposomes should
increase the delivery to cancer cells since our peptide recognizes
RECAF and RECAF is on the surface of cancer cells but not on healthy
cells. Liposomes are used for delivery of a variety of formulations
from medicine to cosmetics.
4) Incorporation of a DNA sequence that encodes the peptide into the DNA
or RNA of a virus which would then express the peptide on its surface.
Since the peptide recognizes RECAF which is on cancer cells but not on
2
normal cells, the virus would only infect and kill the cancer cells
thus becoming an oncolytic virus.
In October 2010 we entered into a non-exclusive distribution agreement with
VetRed B.V. from Naarden, the Netherlands. VetRed, a private company under Dutch
law, will represent our wholly owned subsidiary OncoPet Diagnostics to
distribute our OncoPet RECAF(TM) cancer test for dogs in Europe.
Through a network of its own companies, agents and distributors, VetRed
will market our OncoPet's RECAF(TM) test to the European Union member states.
Samples will be collected and grouped prior to their dispatch to our
laboratories Canada. Europe is second in the world for its number of cats and
dogs, according to a recent survey--there are approximately 78 million dogs and
94 million cats in placeEurope. The United States and Canada have the largest
dog and cat population, with an estimated 52 million dogs and 66 million cats.
VetRed made an entrance in the veterinary diagnostic market in 2009 with
the introduction of the Pandora(R) Slide Stainer, a tabletop fully automated
unit, which stains in fully reproducible samples prior to their evaluation under
the microscope. VetRed also markets chromogenic media for rapid determination of
fungi and bacteria.
Currently, our wholly owned subsidiary, OncoPet(TM) Diagnostics, Inc., has
entered into a further two non-exclusive distribution agreements with two
prominent country-regionplaceUS veterinary suppliers for the distribution of the
OncoPet Sample Collection Kit for canine cancer diagnosis.
Per the non-exclusive distribution agreement, the suppliers will purchase
vouchers for tests to be carried out in our facilities. The distributor then
sells the vouchers to veterinarians, veterinary practices, veterinary hospitals
and others within the country-regionUnited States and territories of the
country-regionU.S. including Puerto Rico, placeGuam as well as others. The
voucher includes a sample collection kit which the veterinarian will use to
process the blood and ship the serum to our laboratory for testing. OncoPet then
emails the results directly to the veterinarian.
3
Liquidity and Capital Resources
Since January 2003, we have been able to finance our operations primarily
from equity and debt financing, the proceeds from exercise of warrants and stock
options, interest income on funds held for investment, and license fees. We do
not have lines of credit with banks or other financial institutions.
Our sources and (uses) of cash during the three months ended March 31, 2012
and 2011 were as follows:
Three Months Ended
------------------
March 31,
---------
2012 2011
---- ----
Cash used in operations $(138,917) $(401,795)
Patent costs (3,543) (18,700)
Proceeds from convertible debt 42,500 -
Repayment of convertible debt (10,200) -
Debt issue costs (2,500) -
Sale of common stock $ - $ 2,288
In June 2007, we sold convertible notes, plus warrants, to private
investors for $3,000,000. The notes are due and payable on December 31, 2012 and
are secured by substantially all of our assets. At the holder's option the notes
are convertible into shares of our common stock at a conversion price of $0.13.
From the proceeds of our January 2010 public offering we repaid $1,186,700 to
the note holders. Due to principal payments and conversions, the outstanding
principal balance of the notes as of March 31, 2012 was $534,260.
In September 2009, we sold promissory notes in the principal amount of
$575,000 to twenty accredited investors. As partial consideration for lending us
the $575,000 we issued 8,214,292 shares of our common stock to the investors.
With the proceeds from our January 2010 public offering we repaid $450,000 to
the investors. The remaining balance of $125,000 bears interest at 10%, is
unsecured, and is payable on or before January 31, 2013.
In January 2010 we sold 90,459,600 shares of our common stock at a price of
$0.0714 per share in a public offering. For each share sold the investors also
received one warrant. Each warrant entitles the holder to purchase one share of
our common stock at a price of $0.107 per share at any time on or before January
2015. The net proceeds to us from the sale of the shares and warrants, after
deducting underwriting commissions and offering costs, were approximately
$5,700,000. The net cash provided from this financing after repayment of loans
and convertible debt was approximately $3,970,000.
In December 2011 we sold a convertible note in principal amount of $78,500
to a private investor. The note bears interest at 8% per year and is payable on
or before March 19, 2013. At any time after June 15, 2012 the note can be
converted into shares of our common stock. The number of shares to be issued
upon any conversion will be determined by dividing the principal amount to be
converted by the conversion price. The conversion price is 58% of the average of
the lowest five Trading Prices for our common stock during the ten trading day
period ending on the trading day prior to the date the note is converted.
4
"Trading Price" means the closing bid price of our common stock on the
Over-the-Counter Bulletin Board. Based upon the closing prices of our common
stock, we would be required to issue approximate of 13,500,000 shares of our
common stock if the note was converted on May 09, 2012.
In February 2012 we sold a convertible note in principal amount of $42,500
to a private investor. The note bears interest at 8% per year and is payable on
or before February 23, 2013. At any time after August 21, 2012 the note can be
converted into shares of our common stock. The number of shares to be issued
upon any conversion will be determined by dividing the principal amount to be
converted by the conversion price. The conversion price is 58% of the average of
the lowest five Trading Prices for our common stock during the ten trading day
period ending on the trading day prior to the date the note is converted.
"Trading Price" means the closing bid price of our common stock on the
Over-the-Counter Bulletin Board. Based upon the closing prices of our common
stock, we would be required to issue approximate of 7,328,000 shares of our
common stock if the note was converted on May 09, 2012.
We anticipate that our capital requirements for the twelve-month period
ending March 31, 2013 will be as follows:
Research, development and production of our
diagnostic products $ 900,000
General and administrative expenses 700,000
Marketing and investor communications 150,000
Business development 50,000 Payment of interest on
amended senior convertible notes and unsecured
promissory notes 100,000
Payment of outstanding liabilities 250,000
------------
$2,150,000
Our most significant capital requirements are research and development and
general and administrative expenses. General and administrative expenses,
exclusive of depreciation, amortization and other expenses not requiring the use
of cash (such as the costs associated with issuing stock and options for
services), average approximately $60,000 per month. Our research and development
expenses vary, depending upon the scope of the programs that we undertake. As we
move further through the development process our research activities become more
mature and less capital intensive. New development projects may have additional
capital requirements which we balance with capital available for such programs.
We may not be successful in obtaining additional capital in the future. If
we are unable to raise the capital we need, our research and development
activities will be curtailed or delayed and our operations will be reduced to a
level which can be funded with the capital available to us.
5
Material changes of items in our Statement of Operations for the three
ended March 31, 2012, as compared to the same period in the prior year, are
discussed below:
Increase
(I)
or
Decrease
Item (D) Reason
---- -------- ------
General and administrative D The decrease was primarily
attributable to lower
stock-based compensation
expense.
Professional and Consulting Fees D This is the result of the
expiration or termination of
three consulting agreements.
Research and Development D The decrease was primarily
attributable to less lab
materials, supplies and the
termination of a scientist
contract.
Interest expense I The Company entered into a
new convertible note
agreement, which accrues
interest at 8%.
Gain (loss) on derivative liability D Decrease primarily due to
the fluctuation of the company
share price in the past three
months.
Recent Accounting Pronouncements
---------------------------------
See Note 2 to the financial statements which are included as part of this
report.
Critical Accounting Policies
----------------------------
Our significant accounting policies are more fully described in Note 2 to the
financial statements included as a part of this report. However, certain
accounting policies are particularly important to the portrayal of our financial
position and results of operations and require the application of significant
judgments by management. As a result, the consolidated financial statements are
subject to an inherent degree of uncertainty. In applying those policies,
management uses its judgment to determine the appropriate assumptions to be used
in the determination of certain estimates. These estimates are based on our
historical experience, terms of existing contracts, observance of trends in the
industry and information available from outside sources, as appropriate.
6
Item 4. Controls and Procedures
Our Principal Executive and Financial Accounting Officers have evaluated
the effectiveness of our disclosure controls and procedures (as defined in Rule
13a-15(e) of the Securities Exchange Act of 1934), as of the end of the period
covered by this report, and in their opinion our disclosure controls and
procedures are effective.
There were no changes in our internal control over financial reporting that
occurred during the fiscal quarter ended March 31, 2012 that have materially
affected, or are reasonably likely to materially affect, our internal control
over financial reporting as discussed above.
PART II
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Note 7 to the financial statements included as part of this report lists
the shares of our common stock which were issued during the three months ended
March 31, 2012.
The shares described in the Note 7 were registered by means of a
registration statement on Form S-8.
Item 6. Exhibits
Exhibits
31.1 Certification pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002.
31.2 Certification pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002.
32 Certification pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.
Data Files The Financial statements in this amended 10-Q are unchanged from
those contained in the 10-Q report which was originally filed.
As a result, interactive data files are not included with the
amended 10-Q.
7
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.
BIOCUREX, INC.
September 19, 2012 By: /s/ Ricardo Moro
------------------------------
Dr. Ricardo Moro - Principal
Executive Officer
September 19, 2012 By: /s/ Gladys Chan
------------------------------
Gladys Chan - Principal Financial
and Accounting Officer
