Attached files
file | filename |
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EXCEL - IDEA: XBRL DOCUMENT - Biozoom, Inc. | Financial_Report.xls |
EX-31.1 - EXHIBIT 31.1 - Biozoom, Inc. | exhibit311.htm |
EX-31.2 - EXHIBIT 31.2 - Biozoom, Inc. | exhibit312.htm |
EX-32.1 - EXHIBIT 32.1 - Biozoom, Inc. | exhibit321.htm |
EX-32.2 - EXHIBIT 32.2 - Biozoom, Inc. | exhibit322.htm |
UNITED STATES SECURITIES AND EXCHANGE COMMISSION | |
Washington, D.C. 20549 | |
| |
FORM 10-Q | |
| |
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the quarterly period ended June 30, 2013 | |
| |
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from ___________ to ___________ | |
| |
Commission File Number 000-53678 | |
| |
BIOZOOM, INC. | |
(Exact name of registrant as specified in its charter) | |
| |
Nevada | 26-0370478 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
| |
Wilhelmshoeher Allee 273A Kassel, Germany 34131 | |
(Address of principal executive offices, including zip code) | |
| |
(800) 882-1683 | |
(Registrants telephone number, including area code) | |
| |
n/a | |
(Former name, former address and former fiscal year, if changed since last report) | |
|
|
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes | x | No | o |
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 (§ 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 | x | No | o |
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 the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.
Large accelerated filer o | Accelerated filer ¨ |
Non-accelerated filer o | Smaller reporting company x |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes | o | No | x |
Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable date.
As of August 19, 2013, the issuer had 60,025,000 outstanding shares of common stock, $0.001 par value.
BIOZOOM INC.
FORM 10-Q
For the Quarterly Period Ended June 30, 2013
INDEX
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| Page |
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| PART I FINANCIAL INFORMATION |
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Item 1 | Financial Statements (unaudited) |
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| Condensed Balance Sheets | 3 |
| Condensed Statements of Operations | 4 |
| Condensed Statements of Cash Flows | 5 |
| Notes to Condensed Financial Statements | 6 |
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Item 2 | Managements Discussion and Analysis of Financial Condition and Results of Operations | 8 |
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Item 3 | Quantitative and Qualitative Disclosures About Market Risk | 10 |
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Item 4 | Controls and Procedures | 10 |
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PART II OTHER INFORMATION
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Item 1 | Legal Proceedings | 11 |
Item 2 | Unregistered Sales of Equity Securities and Use of Proceeds | 11 |
Item 3 | Defaults Upon Senior Securities | 11 |
Item 4 | Mine Safety Disclosures | 11 |
Item 5 | Other Information | 11 |
Item 6 | Exhibits | 12 |
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| |
Signatures | 12 |
2 |
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BIOZOOM, INC. |
CONDENSED CONSOLIDATED BALANCE SHEETS |
ASSETS | (UNAUDITED) |
| (AUDITED) | |
|
| June 30, 2013 |
| March 31, 2013 |
CURRENT ASSETS | ||||
Cash | $ | 579,906 | $ | 973,840 |
Prepaid Expenses | 187,511 | 32,500 | ||
Total Current Assets | 767,417 | 1,006,340 | ||
NON-CURRENT ASSETS | ||||
Investments | 38,087 | 28,137 | ||
Property and Equipment, net | 22,722 | 21,492 | ||
Intangibles, net | 223,087 | 204,305 | ||
Total Non-Current Assets | 283,896 | 253,934 | ||
TOTAL ASSETS | $ | 1,051,313 | $ | 1,260,274 |
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | ||||
CURRENT LIABILITIES | ||||
Accrued Liabilities | $ | 125,942 | $ | 124,232 |
Note Payable | 2,500 | 2,500 | ||
Total Current Liabilities | 128,442 | 126,732 | ||
TOTAL LIABILITIES | 128,442 | 126,732 | ||
STOCKHOLDERS' EQUITY (DEFICIT) | ||||
Preferred Stock, $.001 par value | ||||
10,000,000 shares authorized, 1,150,000 issued and | ||||
outstanding as of June 30, 2013 and March 31, 2013 | 1,150 | 1,150 | ||
Common Stock, $.001 par value | ||||
100,000,000 shares authorized, 60,025,000 | ||||
and 59,730,000 shares issued and outstanding as | ||||
of June 30, 2013 and March 31, 2013, respectively | 60,025 | 59,730 | ||
Additional paid-in capital | 1,478,121 | 1,360,416 | ||
Deficit accumulated during the development stage | (616,425) | (287,754) | ||
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) | 922,871 | 1,133,542 | ||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | $ | 1,051,313 | $ | 1,260,274 |
The accompanying notes are an integral part of these condensed financial statements.
3 |
BIOZOOM, INC. |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) |
|
| For the Three Months Ended June 30, |
| Cumulative results from inception | ||
| 2013 |
| 2012 |
| (Jun 15, 2007) to June 30, 2013 | |
REVENUE |
|
|
|
|
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|
Sales-Net | $ | - | $ | - | $ | 1,500 |
Total Revenue |
| - |
| - |
| 1,500 |
|
|
|
|
|
|
|
EXPENSES |
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|
|
|
|
|
Cost of sales |
| - |
| - |
| 1,500 |
Rent |
| 6,382 |
| - |
| 19,382 |
Consulting Fees |
| - |
| - |
| 9,234 |
Professional Fees |
| 81,721 |
| - |
| 291,971 |
Research and Development |
| 45,000 |
| 4,800 |
| 145,000 |
Other Selling, General and Administrative |
| 195,568 |
| 1,965 |
| 263,746 |
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|
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Total Expenses |
| 328,671 |
| 6,765 |
| 730,833 |
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Net Loss from Operations | $ | (328,671) | $ | (6,765) | $ | (729,333) |
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Other Income (Expense) |
|
|
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|
|
Extinguishment of Debt |
| - |
| - |
| 126,875 |
Interest Expense |
| - |
| (1,361) |
| (13,967) |
Total Other Income (Expense) |
| - |
| (1,361) |
| 112,908 |
|
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Net Income (Loss) | $ | (328,671) | $ | (8,126) | $ | (616,425) |
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PER SHARE DATA: |
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Basic and diluted loss | $ | - | $ | - | $ | - |
per common share |
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Weighted Average |
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Common Shares |
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outstanding |
| 59,800,604 |
| 59,730,000 |
|
The accompanying notes are an integral part of these condensed financial statements.
4 |
BIOZOOM, INC. |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) |
|
| For the Three Months Ended June 30, |
| Cumulative results from inception | ||
| 2013 |
| 2012 |
| (Jun 15, 2007) to June 30, 2013 | |
|
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CASH FLOW FROM OPERATING ACTIVITIES: |
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Net income (loss) | $ | (328,671) | $ | (8,126) | $ | (616,425) |
Adjustments to reconcile net income (loss) to net |
|
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Cash provided by operating activities: |
|
|
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Depreciation |
| 1,124 |
| - |
| 1,495 |
Amortization of intangibles |
| 2,616 |
| - |
| 3,507 |
Issuance of common stock for services |
| 40,000 |
| - |
| 40,000 |
Issuance of common stock for employee compensation |
| 78,000 |
| - |
| 78,000 |
Debt extinguishment |
| - |
| - |
| (120,782) |
Changes in operating assets and liabilities |
|
|
|
|
|
|
Prepaid Expenses |
| (155,011) |
| - |
| (187,511) |
Accrued liabilities related parties |
| - |
| 81 |
| (117,657) |
Accrued liabilities |
| 1,710 |
| 41 |
| 135,981 |
NET CASH USED IN OPERATING ACTIVITIES |
| (360,232) |
| (8,004) |
| (783,392) |
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CASH FLOW FROM INVESTING ACTIVITIES: |
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|
Purchase of property and equipment |
| (2,354) |
| - |
| (2,354) |
Purchase of intangible assets |
| (21,398) |
| - |
| (21,398) |
Purchase of investments |
| (9,950) |
| - |
| (9,950) |
NET CASH USED IN INVESTING ACTIVITIES |
| (33,702) |
| - |
| (33,702) |
|
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CASH FLOW FROM FINANCING ACTIVITIES: |
|
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Proceeds from loans payable related parties |
| - |
| - |
| 6,500 |
Proceeds from issuance of preferred stock |
| - |
| - |
| 1,150,000 |
Proceeds from issuance of notes payable |
| - |
| 6,000 |
| 74,400 |
Debt issued for research and development |
| - |
| - |
| 100,000 |
Proceeds from sale of common stock |
| - |
| - |
| 66,100 |
NET CASH PROVIDED BY FINANCING ACTIVITIES |
| - |
| 6,000 |
| 1,397,000 |
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NET INCREASE (DECREASE) IN CASH |
| (393,934) |
| (2,004) |
| 579,906 |
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CASH, BEGINNING OF PERIOD |
| 973,840 |
| 2,944 |
| - |
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CASH, END OF PERIOD | $ | 579,906 | $ | 940 | $ | 579,906 |
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Supplemental Cash Disclosure: |
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Noncash investing and financing activities: |
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Cancellation of common shares | $ | - | $ | - | $ | 39,000 |
Purchase of property with debt | $ | - | $ | - | $ | 50,000 |
Purchase of intangibles for common stock | $ | - | $ | - | $ | 205,196 |
The accompanying notes are an integral part of these condensed financial statements.
5 |
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1 - Organization and Summary of Significant Accounting Policies
The Company and Nature of Business
Biozoom, Inc. was incorporated on June 15, 2007 in the State of Nevada. The Company was initially focused on the business of designing, marketing and selling leather and other products. As of February 28, 2013, the Company entered into a transaction (the Acquisition) pursuant to which our newly formed wholly-owned Delaware subsidiary, Biozoom Technologies, Inc. acquired the tangible and intangible assets, including patents, licenses, and related assets, from three German companies (Opsolution Spectroscopic Systems GmbH, Opsolution NanoPhotonics GmbH and Opsolution GmbH, collectively the Opsolution Entities or Opsolution Sellers) and entered into a joint venture agreement with Opsolution GmbH pursuant to which Biozoom Technologies, Inc. was obligated to fund Opsolution GmbHs additional development of technology on our behalf. The Company is now in the business of researching, developing and licensing technologies relating to the mobile remote collection of biomedical data as well as bi-lateral diagnostic communication. Specifically, we have developed a handheld device that utilizes spectroscopy, the interaction between cells and radiated energy, to measure concentrations of substances in the human body for application in the health, wellness, medical and chemical industries.
Basis of Presentation
The condensed interim financial information of the Company as of June 30, 2013 and for the three month period ended June 30, 2013 and 2012 is unaudited, and the balance sheet as of March 31, 2013 is derived from audited financial statements. The accompanying financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial statements. Accordingly, they omit or condense footnotes and certain other information normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles. In the opinion of management, all adjustments that are necessary for a fair presentation of the financial information for the interim periods reported have been made. All such adjustments are of a normal recurring nature. The results of operations for the three months ended June 30, 2013 are not necessarily indicative of the results that can be expected for the entire year ending March 31, 2014. The unaudited financial statements should be read in conjunction with the Companys annual financial statements included in the Companys Annual Report on Form 10-K for the year ended March 31, 2013. In particular, the Companys significant accounting policies were presented as Note 1 to the consolidated financial statements in that Annual Report.
Note 2 - Related Party Transactions
At December 31, 2011 the company received a loan from a related party in the amount of $6,500 bearing interest at 5% per annum and is payable on demand. This note was extinguished during the fiscal year ended March 31, 2013.
During the year ended March 31, 2012, the balance of $28,600 loan payable to former related parties and the associated interest of $3,649 was recorded as extinguishment of debt income totaling $32,249.
As of the closing of the Acquisition on February 28, 2013, the Company had a $100,000 payable due to Opsolution GmbH pursuant to the Companys joint venture agreement with Opsolution GmbH, and a $50,000 payable to the Opsolution Entities for the purchase of their property and equipment in the Acquisition. As of March 31, 2013, the Company had paid both of these payables in full.
Note 3 Investments
As part of the purchase of the assets of Opsolution GmbH the Company acquired an equity interest in Opsolution NanoPhotonics. Opsolution NanoPhotonics is not consolidated as the Company is not the primary beneficiary providing the majority of financial support to Opsolution NanoPhotonics.
On February 28, 2013 the Company and Opsolution GmbH entered into a joint venture agreement to continue research and development of certain intellectual property. Upon execution of the joint venture agreement the Company is to provide funding of $100,000 toward the development by Opsolution of new prototypes. An additional $50,000 is to be paid over 8 month provided Opsolution GmbH meets certain investor and performance criteria. The Company is recognizing this research and development expense as the services are performed and the expenses are incurred.
On June 14, 2013, the registrants wholly owned subsidiary, Biozoom Technologies, Inc. exercised its option, pursuant to its February 28, 2013 joint venture agreement with Opsolution GmbH, a German company, to acquire 19.9% of Opsolution GmbH for $9,950. This investment is accounted for under the cost method.
6
Note 4 Preferred Stock
The Companys Board of Directors may, without further action by the Companys stockholders, from time to time, direct the issuance of any authorized but unissued or unreserved shares of preferred stock in series and at the time of issuance, determine the rights, preferences and limitations of each series. The holders of preferred stock may be entitled to receive a preference payment in the event of any liquidation, dissolution or winding-up of the Company before any payment is made to the holders of the common stock. Furthermore, the board of directors could issue preferred stock with voting and other rights that could adversely affect the voting power of the holders of the common stock.
In connection with the Acquisition of the Opsolution assets, we have conducted an offering of 1,150,000 shares of Series A Preferred Stock for $1,150,000, or $1.00 per share, pursuant to the Series A Preferred Stock Purchase Agreement. This offering provides for a maximum offering amount of $2,000,000 for 2,000,000 shares of Series A Preferred Stock. Each share of Series A Preferred Stock is convertible into approximately seven and a half (7.5) shares of our common stock, comprising 8,625,000 shares, or up to 15,000,000 shares if the full $2,000,000 is sold.
Note 5 - Common Stock
On February 28, 2013 the Company issued 39,000,000 shares of its common stock at a value of .005 per share for the purchase of intellectual property from Opsolutions Spectroscopic Systems GmbH, Opsolution GmbH, Opsolution NanoPhotonics GmbH.
On May 26, 2013, the Company issued to Brunson Chandler & Jones, PLLC (BCJ), the Companys corporate counsel, 100,000 shares of common stock as part of its annual engagement with BCJ, for legal services. The fair market value of the shares as of the date of issuance was determined to be $40,000 or $.40 a share. The 100,000 shares will be amortized over one year. The term of the agreement is from April 1, 2013 through March 31, 2014.
On June 15, 2013, the Company issued 195,000 shares of common stock to Totefa Dexter, Secretary of the Company, as part of his employment agreement with the Company. The Company recorded the value of the shares at $78,000 or $.40 per share.
Note 6 Fair Value of Financial Instruments
The fair value of the Companys cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and note payables approximate the carrying amount due to the short duration of these accounts.
Note 7- Loss per Share
Basic loss per common share is based on the net loss divided by weighted average number of common shares outstanding. Diluted income or loss per share is computed using weighted average number of common shares plus dilutive common share equivalents outstanding during the period using the treasury stock method. As the Company has a net loss for the periods ended June 30, 2013 and 2012, any potentially dilutive shares are anti-dilutive and are thus not included into the earnings per share calculation.
Note 8 - Going Concern
The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. As of June 30, 2013 and March 31, 2013, the Company had an accumulated deficit of $616,425 and $287,754, respectively. In addition, the Company had a net loss for the three months ended June 30, 2013 of $328,671 and negative cash flows from operations of $360,232. These conditions raise substantial doubt about the Company's ability to continue as a going concern.
In view of the matters described in the preceding paragraph, recoverability of a major portion of the recorded asset amounts shown in the accompanying balance sheets is dependent upon continued operations of the Company, which in turn is dependent upon the Company's ability to meet its financing requirements on a continuing basis, to maintain or replace present financing, to acquire additional capital from investors, and to succeed in its future operations. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence.
The Company intends to continue to serve its customers as a developer and distributor of customized computer software used in computer research. The Company intends to focus on raising additional capital and finding additional avenues to distribute its software. To the extent that any such financing involves the sale of our equity, our current stockholders could be substantially diluted. There is no assurance that we will be successful in achieving any or all of these objectives.
7 |
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
This discussion contains forward-looking statements reflecting our current expectations that involve risks and uncertainties. Actual results may differ materially from those discussed in these forward-looking statements due to a number of factors.
Overview
We are a Nevada-organized company holding certain patents and licenses to technology in the field of devices that use spectroscopics to detect and measure substances within the body or other biological substances. We are also developing and acquiring additional technologies from time to time.
The Company was initially focused on the business of designing, marketing and selling leather and other products. As of February 28, 2013, the Company entered into a transaction (the Acquisition) pursuant to which our newly formed wholly-owned Delaware subsidiary, Biozoom Technologies, Inc. acquired the tangible and intangible assets, including patents, licenses, and related assets, from three German companies (Opsolution Spectroscopic Systems GmbH, Opsolution NanoPhotonics GmbH and Opsolution GmbH) and entered into a joint venture agreement with Opsolution GmbH pursuant to which Biozoom Technologies, Inc. was obligated to fund Opsolution GmbHs additional development of technology on our behalf. The Company is now in the business of researching, developing and licensing technologies relating to the mobile remote collection of biomedical data as well as bi-lateral diagnostic communication. Specifically, we have developed a handheld device that utilizes spectroscopy, the interaction between cells and radiated energy, to measure concentrations of substances in the human body for application in the health, wellness, medical and chemical industries.
Results of Operations
Period Ended June 30, 2013 Compared to Period Ended June 30, 2012
The following table sets forth, for the periods indicated, data derived from our statements of operations:
For the Three Months Ended | |||||||||
|
|
| June 30, 2013 |
|
| June 30, 2012 |
|
| Change |
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|
|
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|
|
|
|
|
|
Revenues |
| $ | - |
| $ | - |
| $ | - |
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
Rent |
|
| 6,382 |
|
| - |
|
| 6,382 |
Consulting fees |
|
| - |
|
| - |
|
| 0 |
Professional fees |
|
| 81,721 |
|
| - |
|
| 81,721 |
Research and development |
|
| 45,000 |
|
| 4,800 |
|
| 40,200 |
|
|
|
|
|
|
|
|
|
|
Other selling, general and administrative |
|
| 195,568 |
|
| 1,965 |
|
| 193,603 |
Total operating expenses |
|
| 328,671 |
|
| 6,765 |
|
| 321,906 |
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
| (328,671) |
|
| (6,765) |
|
| (321,906) |
|
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
Extinguishment of debt |
|
| - |
|
| - |
|
| - |
Interest expense |
|
| - |
|
| (1,361) |
|
| 1,361 |
Total other (income) expense |
|
| - |
|
| (1,361) |
|
| 1,361 |
|
|
| (328,671) |
|
|
|
|
|
|
Net income (loss) |
| $ | (328,671) |
| $ | (8,126) |
| $ | (320,545) |
Revenues
We recorded no commercial revenues for the three months ended June 30, 2013 and June 30, 2012.
General and Administrative Expenses
Rent, professional and other selling, general and administrative expenses increased for the year ended March 31, 2013 over the year ended March 31, 2012 due to increased operations and accounting and related professional fees. Research and development increased $40,200 for the period ended June 30, 2013 over the three months ended June 30, 2012 due to our joint venture agreement with Opsolution GmbH. Other selling, general and administrative expenses increased 193,603 due to issuances of common stock for services and employee compensation as well as increased management expenses.
Net Loss
We generated net losses of $328,671 for the three months ended June 30, 2013 compared to $8,126 for the same period in 2012. The net loss increase was attributable to Acquisition as of February 28, 2013 wherein we ceased to be a shell company and commenced operations in the field of devices that use spectroscopy to detect and measure substances within the body or other biological substances.
The following tables set forth key components of our balance sheet as of June 30, 2013 and March 31, 2013.
|
| June 30, 2013 |
|
| March 31, 2013 |
|
| Change | |
|
|
|
|
|
|
|
|
|
|
Current Assets |
| $ | 767,417 |
| $ | 1,006,340 |
| $ | (238,923) |
Property and equipment |
|
| 22,722 |
|
| 21,492 |
|
| 1,230 |
Investments |
|
| 38,087 |
|
| 28,137 |
|
| 9,950 |
Intangibles |
|
| 223,087 |
|
| 204,305 |
|
| 18,782 |
Total Assets |
|
| 1,051,313 |
|
| 1,260,274 |
|
| (208,961) |
Current Liabilities |
|
| 128,442 |
|
| 126,732 |
|
| 1,710 |
Total Liabilities |
|
| 128,442 |
|
| 126,732 |
|
| 1,710 |
Stockholders Equity (Deficit) |
|
| 922,871 |
|
| 1,133,542 |
|
| (210,671) |
Total Liabilities and Deficit |
| $ | 1,051,313 |
| $ | 1,260,274 |
| $ | (208,961) |
As of June 30, 2013, current assets decreased 238,923 from March 31, 2032 due to a decrease in cash related increased costs related to research and development and increased operations. Non-current assets increased due to the increase of property and equipment of $1,230, net of depreciation, an increase in investments of $9,950 and an increase in intangibles of $18,782, net of amortization. As of June 30, 2013, current liabilities increased by $1,710 from March 31, 2013 due to an increase of accrued expenses.
8 |
Liquidity and Capital Resources
We have financed our operations primarily through sales of the Companys common and preferred stock and the issuance of Convertible Promissory Notes.
The following tables sets forth selected cash flow information for the periods indicated:
|
|
| For the Three Months Ended | |||
|
|
| June 30, 2013 |
|
| June 30, 2012 |
|
|
|
|
|
|
|
Cash used in operating activities |
| $ | (360,232) |
| $ | (8,004) |
Cash used in investing activities |
|
| (33,702) |
|
| - |
Cash provided by financing activities |
|
| - |
|
| 6,000 |
|
|
|
|
|
|
|
Net increase (decrease) in cash |
| $ | (393,934) |
| $ | (2,004) |
Going Concern Consideration
We are a development stage company and have not commenced planned principal operations. We had no revenues and have incurred a cumulative loss of $616,425 for the period June 15, 2007 (inception) to June 30, 2013. In addition, the Company expects its current cash to only fund operations for six months. These factors raise substantial doubt about the Companys ability to continue as a going concern.
There can be no assurance that sufficient funds required during the next year or thereafter will be generated from operations or that funds will be available from external sources such as debt or equity financings or other potential sources. The lack of additional capital resulting from the inability to generate cash flow from operations or to raise capital from external sources would force the Company to substantially curtail or cease operations and would, therefore, have a material adverse effect on its business. Furthermore, there can be no assurance that any such required funds, if available, will be available on attractive terms or that they will not have a significant dilutive effect on the Companys existing stockholders.
We are attempting to address our lack of liquidity by borrowing from its officers and directors or by raising additional funds, either in the form of debt or equity or some combination thereof. There can be no assurances that we will be able to raise the additional funds it requires.
Off Balance Sheet Arrangements
We have no off-balance sheet arrangements.
Recent Accounting Pronouncements
From time to time, new accounting pronouncements are issued by FASB that are adopted by the Company as of the specified effective date. If not discussed, management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on the Companys financial statements upon adoption.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As the Company is a smaller reporting company, this item is not applicable.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit to the Securities and Exchange Commission under the Exchange Act, is recorded, processed, summarized, and reported within the time periods specified by the Securities and Exchange Commissions rules and forms, and that information is accumulated and communicated to our management, including our principal executive and principal financial officer (whom we refer to in this periodic report as our Certifying Officer), as appropriate to allow timely decisions regarding required disclosure. The Companys Chief Executive Officer and Chief Financial Officer has evaluated the effectiveness of the Companys disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the period ended June 30, 2013 covered by this Form 10-Q. Based upon such evaluation, the Chief Executive Officer and Chief Financial Officer has concluded that, as of the end of such period, the Companys disclosure controls and procedures were effective as required under Rules 13a-15(e) and 15d-15(e) under the Exchange Act.
Managements Report on Internal Control over Financial Reporting
Our disclosure controls and procedures are designed to ensure that information required to be disclosed in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the United States Securities and Exchange Commission. Our principal executive officer and principal financial officer has reviewed the effectiveness of our disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 Rules 13(a)-15(e) and 15(d)-15(e)) within the end of the period covered by this Quarterly Report on Form 10-Q and has concluded that the disclosure controls and procedures are effective to ensure that material information relating to the Company is recorded, processed, summarized, and reported in a timely manner.
Changes in Internal Controls.
There have been no changes in the Company's internal control over financial reporting during the last quarterly period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.
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PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business. As of August 19, 2013, there were no pending or threatened lawsuits.
However, on June 25, 2013, the SEC announced the temporary suspension of trading in the securities of the Company because of concern that certain Biozoom affiliates and shareholders may have unjustifiably relied upon Rule 144 of the Securities Act of 1933 (Securities Act) and they, Biozoom, and others may be engaged in an unlawful distribution of securities through the OTCBB. On July 3, 2013, the SEC filed a complaint in the U.S. District Court in Manhattan against eight defendants relating to their unlawful sale of Company securities. In the complaint, the SEC alleged that Sarah Deutsch, former sole officer and director of the Company and manager of the Companys former majority shareholder, certified that the Company approved the issuance of a certificate to one of the defendants at a board meeting held on March 22, 2013. No such board meeting with Hardy Hoheisel and Dr. Wolfgang Koecher (the other two directors of the Company at that time, and after June 5, 2013, the sole directors of the Company) was held, and Ms. Deutsch was not authorized to provide any such certification. The Companys current officers (Mr. Hoheisel, Dr. Koecher, and Tefa Dexter) and directors (Mr. Hoheisel and Dr. Koecher) are not affiliated with the defendants, were not involved in any sale of the Companys securities to the defendants, nor have they sold Company securities through the OTCBB or relied upon Rule 144 or any other exemption from registration for the resale of securities. The Company and its current officers and directors are currently investigating precisely what occurred and evaluating their options for legal recourse.
ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
On May 9, 2013, the Company retained Brunson Chandler & Jones, PLLC (BCJ) to render corporate and securities legal advisory services (assistance with quarterly and annual reports, Form 8-Ks, employment contracts, term sheets, financing contracts, etc.) for $2,500 in cash and $10,000 in stock a quarter, as well as legal services relating to the preparation and filing of a Form S-1 registration statement for $5,000 in cash upon engagement and $5,000 in cash or $10,000 in stock upon effectiveness. After paying a years worth of the cash portion of the general quarterly legal fee plus the initial S-1 fee, on May 26, 2013, the Company issued BCJ 100,000 restricted shares of common stock for the $40,000 balance owed to BCJ for the quarterly legal services to be provided by BCJ through March 31, 2014. The fair market value of the shares as of the date of issuance was determined to be $40,000 or $.40 a share based on the agreed-upon value of the quarterly legal services to be provided by BCJ.
On May 21, 2013, Biozoom, Inc. (the Company) entered into a consulting agreement with Totefa Dexter aka Tefa Dexter, its Secretary. Under the consulting agreement, Mr. Dexter agreed to render business development and sales services to the Company, and was to receive $6,000 payable immediately, a monthly fee of $3,500, and 195,000 restricted shares of the Companys common stock on June 15, 2013. On June 15, 2013, the Company issued 195,000 restricted shares of common stock to Mr. Dexter pursuant to the agreement. The Company recorded the value of the shares at $78,000 or $.40 per share.
The securities referenced above were issued pursuant to exemptions from registration requirements relying on Section 4(2) of the Securities Act of 1933 and upon Rule 506 of Regulation D of the Securities Act of 1933.
ITEM 3. | DEFAULTS UPON SENIOR SECURITIES |
None.
ITEM 4. | MINE SAFETY DISCLOSURES |
None.
ITEM 5. | OTHER INFORMATION |
None.
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ITEM 6.
EXHIBITS
3.1* | Articles of Incorporation (incorporated by reference to Exhibit 3.1 to our Registration Statement on Form S-1 filed on July 18, 2008) | |||
3.2* | By-Laws (incorporated by reference to Exhibit 3.2 to our Registration Statement on Form S-1 filed on July 18, 2008) | |||
3.3* | Certificate of Designation for Series A Preferred Stock (incorporated by reference to Exhibit 3.1 of our Form 8-K filed on March 12, 2013). | |||
10.1* | Asset Purchase Agreement, dated as of February 28, 2013, by and between the Company and Opsolution NanoPhotonics GmbH, Opsolution GmbH and Opsolution Spectroscopic Systems GmbH, each a German entity (incorporated by reference to Exhibit 10.1 of our Form 8-K filed on March 12, 2013) | |||
10.2* | Assignment Agreement, dated as of February 28, 2013, by and between the Company and Opsolution NanoPhotonics GmbH (incorporated by reference to Exhibit 10.2 of our Form 8-K filed on March 12, 2013) | |||
10.3* | Assignment Agreement dated as of February 28, 2013, by and between the Company and Opsolution Spectroscopic Systems GmbH (incorporated by reference to Exhibit 10.3 of our Form 8-K filed on March 12, 2013) | |||
10.4* | Assignment Agreement dated as of February 28, 2013, by and between the Company and Opsolution GmbH (incorporated by reference to Exhibit 10.4 of our Form 8-K filed on March 12, 2013) | |||
10.5* | Joint Venture Agreement, dated as of February 28, 2013, by and between the Company and Opsolution GmbH (incorporated by reference to Exhibit 10.5 of our Form 8-K filed on March 12, 2013) | |||
10.6* | Agreement on Intellectual Property and Property Rights between Biozoom Services GmbH, Vodafone Ventures Limited, Opsolution Spectroscopic Systems GmbH, MBR Messtechnik GmbH and Opsolution GmbH (incorporated by reference to Exhibit 10.6 of our Form 8-K filed on March 12, 2013) | |||
10.7* | Series A Preferred Stock Purchase Agreement, dated as of February 28, 2013 (incorporated by reference to Exhibit 10.7 of our Form 8-K filed on March 12, 2013). | |||
10.8* | Exercise of Purchase Option, dated as of June 14, 2013 (incorporated by reference to Exhibit 10.1 of our Form 8-K filed on June 20, 2013) | |||
10.9* | Employment Agreement with Hardy Hoheisel, dated as of March 15, 2013 (incorporated by reference to Exhibit 10.9 of our Form 10-K filed on July 2, 2013) | |||
10.10* | Employment Agreement with Dr. Wolfgang Köcher, dated as of March 15, 2013 (incorporated by reference to Exhibit 10.10 of our Form 10-K filed on July 2, 2013) | |||
10.11* | Consulting Agreement with Tefa Dexter, dated as of May 21, 2013 (incorporated by reference to Exhibit 10.11 of our Form 10-K filed on July 2, 2013) | |||
10.12* | Scientific Advisory Board Consulting Agreement with Prof. Dr. Hasan Mukhtar, dated as of April 30, 2013 (incorporated by reference to Exhibit 10.12 of our Form 10-K filed on July 2, 2013) | |||
10.13* | Scientific Advisory Board Consulting Agreement with Prof. Dr. Rudolf Kessler, dated as of May 5, 2013 (incorporated by reference to Exhibit 10.13 of our Form 10-K filed on July 2, 2013) | |||
10.14* | Scientific Advisory Board Consulting Agreement with Prof. Dr. Leonard Zastrow, dated as of May 8, 2013 (incorporated by reference to Exhibit 10.14 of our Form 10-K filed on July 2, 2013) | |||
10.15* | Scientific Advisory Board Consulting Agreement with Prof. Dr. Dr. Jürgen Lademann, dated as of May 31, 2013 (incorporated by reference to Exhibit 10.15 of our Form 10-K filed on July 2, 2013) | |||
31.1 | Certification of Principal Executive Officer required by Rule 13a-14(1) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |||
31.2 | Certification of Principal Financial Officer required by Rule 13a-14(1) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |||
32.1 | Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and Section 1350 of 18 U.S.C. 63 | |||
32.2 | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and Section 1350 of 18 U.S.C. 63 |
* Previously Filed
101.INS ** |
| XBRL Instance Document |
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101.SCH ** |
| XBRL Taxonomy Extension Schema Document |
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101.CAL ** |
| XBRL Taxonomy Extension Calculation Linkbase Document |
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101.DEF ** |
| XBRL Taxonomy Extension Definition Linkbase Document |
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101.LAB ** |
| XBRL Taxonomy Extension Label Linkbase Document |
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101.PRE ** |
| XBRL Taxonomy Extension Presentation Linkbase Document |
** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
| BIOZOOM, INC. | ||
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Date: August 19, 2013 | By: | /s/ Hardy Hoheisel |
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| Title: President and Chief Executive Officer, | |
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| Principal Executive Officer and Principal | |
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| Accounting Officer |
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