Kyto Technology & Life Science, Inc. - FORM 10-K

Attached files

file	filename
EX-31.1 - CERTIFICATION - Kyto Technology & Life Science, Inc.	kbph_ex311.htm
EX-32.2 - CERTIFICATION - Kyto Technology & Life Science, Inc.	kbph_ex321.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended March 31, 2014

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

KYTO BIOPHARMA INC.

(Exact name of registrant as specified in its charter)

FLORIDA		65-1086538
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification Number)

B1-114 BELMONT STREET, TORONTO ONTARIO CANADA		M5R 1P8
(Address of Principal Executive Offices)		(Zip Code)

Registrant's telephone number, including area code (416) 960-8790

Securities registered pursuant to Section 12(g) of the Act:

COMMON STOCK, $0.0001 PAR VALUE

(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No þ

Check whether the issuer (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, and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Check if there is no disclosure of delinquent filers pursuant to Item 405 of Regulation S-K contained in this form, and no disclosure will be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. 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.

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes þ No o

The aggregate market value of the voting common stock held by non-affiliates of the Registrant on September 30, 2013, was approximately $284,087.25.

The Registrant had 12,998,482 shares of common stock, $0.0001 par value per share, outstanding on June 27, 2014

TABLE OF CONTENTS

FORM 10-K

FOR FISCAL YEAR ENDED MARCH 31, 2014

		Page
PART I

ITEM 1.	Business	3
ITEM 2.	Properties	4
ITEM 3.	Legal Proceedings	4
ITEM 4.	Mine Safety Disclosure	4

PART II

ITEM 5.	Market for Registrants Common Equity and Related Stockholders Matters	4
ITEM 6	Selected Financial Data	5
ITEM 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operation	6
ITEM 8.	Financial Statements and Supplementary Data	7
ITEM 9.	Changes In and Disagreements with Accountants on Accounting and Financial Disclosure	7
ITEM 9A.	Controls and Procedures	7
ITEM 9B	Other Information	8

PART III

ITEM 10.	Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a) of the Exchange Act	9
ITEM 11.	Executive Compensation	11
ITEM 12.	Security Ownership of Certain Beneficial Owners and Management	12
ITEM 13.	Certain Relationships and Related Transactions	13
ITEM 14.	Principal Accountants Fee and Services	14

PART IV

ITEM 15.	Exhibits and Financial Statement Schedules Signatures	15

PART I

ITEM 1. BUSINESS

(A) BUSINESS DEVELOPMENT

Kyto Biopharma, Inc. was originally formed under the name of B. Twelve, Inc., a Florida corporation, filed with the Department of State on March 5, 1999. Also, on March 5, 1999, the Company acquired B Twelve Limited as a wholly-owned subsidiary Canadian corporation.

On April 27, 1999, the Company filed an amendment to its Articles of Incorporation, increasing its authorized capital stock from 1,000 shares of common stock with a Par Value of $1.00 per share, to 25,000,000 shares of common stock with a Par Value of $1.00 per share and 1,000,000 shares of preferred stock, also with a Par Value of $1.00 per share.

In August, 2001, the Company filed an amendment to its Articles of Incorporation, changing the Par Value of its common stock from $1.00 per share to $0.0001 Par Value per share.

On August 14, 2002, the Company filed an amendment to its Articles of Incorporation, changing the name to KYTO BIOPHARMA, INC.

The Company filed a Uniform Business Report (UBR) with the Department of State, State of Florida, for the year 2008 and paid all required fees. Its status is active.

The Company is currently not in the development stage and was in “development stage” till June 30, 2011.

Effective May 31, 2012, the Corporation entered into an agreement with Kyto IP Inc., a private company incorporated in the State of Delaware, to transfer, assign and sell all of the Corporation’s intellectual property, including Patents, Patent Applications and related Intellectual Property for the purchase consideration amounts to US$1,367,135 to Kyto IP Inc . Further, the purchase price is paid and satisfied by the Kyto IP Inc. assuming the debt of the company to Credifinance Capital Corp .(during 2013, Credifinance Capital Corp. changed its name to Comindus Finance Corp). and other liabilities summarized below.

Description	Amount($)
Accounts payable	$	3,112
Accrued liabilities	$	25,969
Accrued liabilities- related party	$	69,000
Dividend payable- preferred convertible stock	$	104,144
Loan payable- related party	$	1,164,910
Net liabilities assumed (transferred to Kyto IP Inc)	$	1,367,135

The above assumed liabilities includes significant debt from related party, further the Kyto IP Inc is owned by the shareholder of Kyto Biopharma, Inc and therefore in accordance with this ASC 810, the above transaction was accounted for as an equity transaction, with no gain or loss recognized.

The Company is exposed to foreign exchange rate fluctuations as the financial results of the company’s Canadian subsidiary is translated into U.S. dollars on consolidation. The functional currency of Kyto’s subsidiary is the Canadian dollar. In November 2012, Kyto closed its subsidiary and recognized a loss on dissolution of foreign subsidiary of $173,623 during the year ended March 31, 2013.

(2) Employees

The Company has no employees, full-time or part-time. The President of Kyto Biopharma, Inc. is acting as consultant to the Company and does not receive compensation.

B) REPORTS TO SECURITY HOLDERS

The Bylaws of Kyto Biopharma, Inc. are silent regarding an annual report to shareholders. Kyto Biopharma, Inc. is a reporting company and files reports with the U.S. Securities and Exchange Commission (SEC). The Company is required to file quarterly reports (Form 10-Q) and an annual report (Form 10-K) with the SEC. The annual report includes an audited consolidated financial statement.

Any materials that the Company filed with the Securities and Exchange Commission may be read and copied at the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. Further, you may obtain information on the operation of the Public Reference Room by calling the Commission at 1-800-SECD-0330. The Company is an electronic filer and the SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the Commission. That site is http://www.sec.gov.

ITEM 2. DESCRIPTION OF PROPERTY

The Company occupies office space on a month-to-month basis and therefore has no leasehold interest. The Company pays a fee to Cominidus Finance Inc.., a related party, at the rate of approximately $10,000 quarterly, which includes rent and certain administrative services, such as bookkeeping, copying and printing, courier services, and telephone.

The Company owns no investments.

ITEM 3. LEGAL PROCEEDINGS

There is no litigation of any type whatsoever pending or threatened by or against the Company, its officers and directors.

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable

PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The following discussions should be read in conjunction with the financial statements and related notes which are included in this Form 10-K for the year ending March 31, 2014. Statements made below which are not historical facts are forward-looking statements. Forward-looking statements involve a number of risks and uncertainties including, but not limited to, general economic conditions and our ability to develop our products. For further information regarding our business, competition and risk factors, refer to this Company's Form 10-K filed with the U.S. Securities Exchange Commission.

(A) MARKET INFORMATION

As of February 23, 2011, our stock quotation coverage moved from the FINRA operated OTC Bulletin Board to the OTC Markets Group, Inc.'s OTCQB under the same symbol "KBPH."

In September, 2009, the Financial Industry Regulatory Authority (FINRA), which owns and operates the Over-the-Counter Bulletin Board (OTCBB), announced that it wished to divest itself of the ownership and operation of the OTCBB and intended to sell to an independent third party the OTCBB.com web site, URL, and reservation rights, certain OTCBB.com content; and the OTCBB trademark. Given the uncertainty of the fate of the FINRA operated OTCBB, there has been a large migration of market makers from the OTCBB quotation system to the OTC Link quotation system. According to otcmarkets.com, in the past 30 calendar days, there have been over 624 publically traded companies that have moved from being dually quoted (OTCBB and OTC Link) to being quoted exclusively on the OTC Link platform, and only 19 issuers remain exclusively quoted on the OTCBB. As of February 18, 2011, priced quotes published on OTC Link made up 95% of priced quotes in the OTC marketplace.

Our common stock had traded on the OTC Bulletin Board(R), or OTCBB, since August 04, 2005. The Company's common stock is quoted on the Electronic Bulletin Board of the OTC market, under the trading symbol KBPH. The following table sets forth, for the calendar quarters indicated, the high and low closing prices for our common stock as reported by OTCBB for fiscal years ended March 31, 2014 and 2013. The quotations reflect inter-dealer prices, without retail mark-up, mark-down, or commission and may not represent actual transactions. The market for the common stock has been sporadic and there have been long periods during which there were few, if any, transactions in the common stock and no reported quotations. Accordingly, reliance should not be placed on the quotes listed below, as the trades and depth of the market may be limited, and therefore, such quotes may not be a true indication of the current market value of the Company's common stock.

	Common Stock
	High		Low
Fiscal Year Ended March 31, 2014
First quarter	$	0.15	$	0.15
Second quarter		0.15		0.15
Third quarter		0.15		0.15
Fourth quarter		0.15		0.10

Fiscal Year Ended March 31, 2013
First quarter	$	0.15	$	0.15
Second quarter		0.15		0.15
Third quarter		0.15		0.15
Fourth quarter		0.15		0.15

There were 12,998,482 shares of common stock outstanding as of the end of the fiscal year ended March 31, 2014.

(B) HOLDERS

According to information provided to us by the transfer agent for our shares of Common Stock, as of March 31, 2014, there were 16 holders of record of the shares of Common Stock, including depositories. Based upon information we have received from some of these record owners, we believe there are more than 150 beneficial holders of our shares of Common Stock.

The Company has not paid any dividends to date and has no plans to do so in the foreseeable future.

(D) SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS.

None

ITEM 6. SELECTED FINANCIAL DATA

Earnings per share for each of the fiscal years shown below are based on the weighted average number of shares outstanding.

	2014			2013
Net Loss	$	(113,955	)	$	(278,100	)

Loss Per Share	$	(0.01	)	$	(0.02	)

Total assets	$	3		$	117

Total liabilities	$	372,570		$	258,729

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATION

(A) PLAN OF OPERATION

The Company had not been profitable and had no revenues from operations since its inception in March 1999. As reflected in the accompanying audited consolidated financial statements, in 2014 the company had, a net loss of $113,955 a working capital deficiency of $372,567, a stockholders' deficiency of $372,567, and Accumulated deficit of $18,191,325 at March 31, 2014. These factors raise substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company's ability to further implement its business plan, raise capital, and generate revenues. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Further, the purchase price is paid and satisfied by the Kyto IP Inc. assuming the debt of the company to ComindusFinance Corp. and other liabilities.

In November 2012,Kyto closed its Canadian Subsidiary and recognized a loss on dissolution of foreign subsidiary of $173,623 during the year ended March 31, 2013.

(B) LIQUIDITY AND CAPITAL RESOURCES

The Company had working capital deficit of $372,567 and $258,612 as of March 31, 2014 and 2013 respectively. Cash were $3 and $117 as of March 31, 2014 and 2013 respectively.

Cash from operating activities:

The company’s cash outflow from operations of $10,314 for the year ended March 31, 2014 was $2,846 below cash flow from operating activities as of March 31, 2013 which was $13,160.

Cash from financing activities :

The company’s net cash flow from financing activities of $10,200 for the year ended March 31, 2014 was $1,950 above the cash flow from financing activities for the year ended March 31, 2013, which was $8,250.

To meet the projected cash requirements as stated above, the Company intends to obtain cash loans from one or more of its stockholders. As the date of filing of this Form 10-K with the U.S. Securities and Exchange Commission, the Company did not receive any commitments of any of its stockholders to provide operating loan funds for the Company. We are also looking at merger opportunities or to acquire companies and products to raise capital. We expect to form strategic alliances for product development and to out-license the commercial rights to development partners. By forming strategic alliances with third parties, we believe that our technologies and related products can be more rapidly developed and successfully introduced into the marketplace.

The Company's plan of operation for the next twelve months is to continue to focus its efforts on finding new sources of capital and on research activities and the development of its drug candidates which maximize the utility and application of its platform technologies. Management expects the Company to incur additional operating losses over the next several years as research and development efforts, preclinical and clinical testing activities and manufacturing scale-up efforts expand. To date, we have not had any material product sales and do not anticipate receiving any revenue from the sale of products in the upcoming year. Our sources of working capital have been equity financings and interest earned on investments.

The Company operates in a rapidly changing environment that involves a number of factors, some of which are beyond management's control, such as financial market trends and investors' appetite for new financings. It should also be emphasized that, should the Company not be successful in completing its own financing (either by debt or by the issuance of securities from treasury), the Company may be unable to continue to operate as a going concern.

None.

● THERE IS SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE AS A GOING CONCERN DUE TO SIGNIFICANT RECURRING LOSSES FROM OPERATIONS, CASH USED IN OPERATIONS, STOCKHOLDERS' DEFICIT, ACCUMULATED DEFICIT AND WORKING CAPITAL DEFICIT ALL OF WHICH MEANS THAT WE MAY NOT BE ABLE TO CONTINUE OPERATIONS UNLESS WE OBTAIN ADDITIONAL FUNDING. The report of our Independent Registered Public Accounting Firm on our March 31, 2014 financial statements includes an explanatory paragraph indicating that there is substantial doubt about our ability to continue as a going concern due to substantial recurring losses from operations, cash used in operations, stockholders' deficit and significant accumulated deficit and working capital deficit. Our ability to continue as a going concern will be determined by our ability to obtain additional funding and maintain successful operations. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Attached audited consolidated financial statements for KYTO BIOPHARMA, INC. AND SUBSIDIARY for the fiscal years ended March 31, 2014 and 2013. Can be found beginning on page F-1.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

The Company did not change accountant during the year and to the date of this consolidated financial statements and there are no disagreements with the findings of said accountants.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that material information required to be disclosed in our periodic reports filed under the Securities Exchange Act of 1934, as amended, or 1934 Act, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and to ensure that such information is accumulated and communicated to our management, including our chief executive officer/chief financial officer (principal financial officer) as appropriate, to allow timely decisions regarding required disclosure. During the quarter ended March 31, 2014 we carried out an evaluation, under the supervision and with the participation of our management, including the principal executive officer and the principal financial officer (principal financial officer), of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rule 13(a)-15(e) under the 1934 Act. Based on this evaluation, because of the Company’s limited resources and limited number of employees, management concluded that our disclosure controls and procedures were ineffective as of March 31, 2014.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is designed to provide reasonable assurances regarding the reliability of financial reporting and the preparation of the financial statements of the Company in accordance with U.S. generally accepted accounting principles, or GAAP. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree or compliance with the policies or procedures may deteriorate.

With the participation of our Chief Executive Officer/ Chief Financial Officer (principal financial officer), our management conducted an evaluation of the effectiveness of our internal control over financial reporting as of March 31, 2014 based on the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). Based on our evaluation and the material weaknesses described below, management concluded that the Company did not maintain effective internal control over financial reporting as of March 31, 2014 based on the COSO framework criteria. Management has identified control deficiencies regarding the lack of segregation of duties and the need for a stronger internal control environment. Management of the Company believes that these material weaknesses are due to the small size of the Company’s accounting staff. The small size of the Company’s accounting staff may prevent adequate controls in the future, such as segregation of duties, due to the cost/benefit of such remediation. To mitigate the current limited resources and limited employees, we rely heavily on direct management oversight of transactions, along with the use of legal and accounting professionals. As we grow, we expect to increase our number of employees, which will enable us to implement adequate segregation of duties within the internal control framework.

These control deficiencies could result in a misstatement of account balances that would result in a reasonable possibility that a material misstatement to our consolidated financial statements may not be prevented or detected on a timely basis. Accordingly, we have determined that these control deficiencies as described above together constitute a material weakness.

In light of this material weakness, we performed additional analyses and procedures in order to conclude that our consolidated financial statements for the year ended March 31, 2014 included in this Annual Report on Form 10-K were fairly stated in accordance with US GAAP. Accordingly, management believes that despite our material weaknesses, our consolidated financial statements for the year ended March 31, 2014 are fairly stated, in all material respects, in accordance with US GAAP.

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management’s report in this Annual Report on Form 10-K.

Limitations on Effectiveness of Controls and Procedures

Our management, including our Chief Executive Officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include, but are not limited to, the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Changes in Internal Controls

During the fiscal year ended March 31, 2014, there have been no changes in our internal control over financial reporting that have materially affected or are reasonably likely to materially affect our internal controls over financial reporting.

Item 9B. Other Information.

We do not have any information required to be disclosed in a report on Form 8-K during the first quarter of fiscal 2015 that was not reported.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTORS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

(A) IDENTIFY DIRECTORS AND EXECUTIVE OFFICERS

NAME	AGE	POSITION
Georges Benarroch	67	President & Chief Executive Officer, Director

Jean-Luc Berger, Ph.D.	50	Director

Uri Sagman, M.D. FRCPC	60	Director

The business experience of the persons listed above during the past five years are as follows:

MR. GEORGES BENARROCH, PRESIDENT & CHIEF EXECUTIVE OFFICER; DIRECTOR.

Director of the Company since May 5, 2000. Mr Benarroch was elected as President and Chief Executive Officer effective February 27, 2006. Mr. Benarroch is the President and Chief Executive Officer of Credifinance Capital Corp.

Mr. Benarroch has 30 years of investment banking as well as money management experience. Mr. Benarroch has raised financing for numerous companies, public as well as private and has managed for 30 years investment banking firms. As well he has been the CEO of a multibillion dollar asset management firm.

DR. JEAN-LUC BERGER, PH.D., DIRECTOR.

Director of the Company since inception on March 5, 1999, Dr. Berger was President and Chief Executive Officer of the Company from May 15, 2001 to February 27, 2006. Co-founder of Kyto, he joined the Company as Chief Operating Officer in September 2000. Dr Berger resigned as President and Chief Executive Officer effective February 27, 2006. Prior to joining the Company, Dr. Berger was a Pharmaceutical/Biotechnology analyst with Credifinance Securities Limited, a Toronto-based, institutional investment and research firm, since 1996. Dr. Berger obtained his M. Sc. from Universite de Montreal, his Ph.D. from Universite LAVAL and completed his post-doctoral studies at McGill University and has over thirty publications and scientific communications to his credit.

Dr. Berger is currently involved in a number of biotechnology companies in view of his expertise and has experience in being a director of a public company.

DR. URI SAGMAN, M.D., DIRECTOR

Director of the Company since inception on July 27, 2007, Dr. Sagman ,studied medicine at McGill University, The University of Calgary, The University of Toronto and Oxford University. Dr. Sagman is a well-respected researcher who has received numerous awards and citations including the Young Investigator awards of the American Society of Clinical Oncology (ASCO) and the American Association for Cancer Research (AACR). He is trained as a medical oncologist, is a fellow of the Royal College of Physicians and Surgeons of Canada and is a fellowship recipient of the Medical Research Council of Canada. He co-founded several companies including C Sixty, Inc., a Canadian nanomedicine company focused on the development of fullerene antioxidants for the treatment of Parkinson's disease, Alzheimer's disease as well certain skin conditions related to aging and UV exposure. Dr. Sagman is also founder and chairman of GRN Capital Inc., a financial services corporation with merchant banking and investment banking operations based in Toronto. Separately, Dr. Sagman serves as Chairman of GRN Health International Inc., a globally-based academic research organization dedicated to medical research.

Dr. Sagman sits on the advisory board of a number of medical ventures, has experience raising funds and being a director of a public company.

(B) IDENTIFY SIGNIFICANT EMPLOYEES

The Company does not expect to receive a significant contribution from employees that are not executive officers.

There are no directors, executive officers or persons nominated or persons chosen by the Company to become a director or executive officer of the Company who are directly related to an individual who currently holds the position of director or executive officer or is nominated to one of the said positions.

(D) INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS

There are no material events that have occurred in the last five years that would affect the evaluation of the ability or integrity of any director, person nominated to become a director, executive officer, promoter or control person of the Company.

(E) AUDIT COMMITTEE

The Company has currently no audit committee. The Board of Directors approved the financial statements for the previous year.

ITEM 11. EXECUTIVE COMPENSATION

(A) SUMMARY COMPENSATION TABLE

The following table sets forth all annual and long term compensation for services in all capacities rendered to Kyto by its executive officers and directors for each of the last two most recently completed fiscal years.

Annual Compensation

Long-Term Compensation

Awards

Payouts

All Other Name and Payouts Principal Position

Year

Salary

($)

Bonus

($)

Other Annual

Compensation

($)

Securities Under Options/SARs

Granted

(#)

Restricted Shares

or Restricted

Share Units

($)

LTIP

($)

Jean-Luc Berger, Director

2014

None

2013

None

Georges Benarroch, Director

2014

None

2013

None

Uri Sagman, Director

2014

None

2013

None

(B) OPTION/SAR GRANTS TABLE

There were no options granted to employees and no grants to key employees in fiscal years 2014 and 2013.

None

(D) COMPENSATION OF DIRECTORS

All directors hold office until the next annual meeting of stockholders and until their successors have been duly elected and qualified. There are no agreements with respect to the election and compensation of directors. The Board of Directors appoints officers annually and each executive officer serves at the discretion of the Board of Directors. The Company does not have any standing committees at this time.

The Company does not currently maintain insurance for the benefit of the directors and officers of Kyto against liabilities incurred by them in their capacity as directors or officers of Kyto. Kyto does not maintain a pension plan for its employees, officers or directors.

No director shares were granted in fiscal years 2014 and 2013.

None of the directors or senior officers of Kyto and no associate of any of the directors or senior officers of Kyto was indebted to the Company during the financial period ended March 31, 2014 of Kyto other than for routine indebtedness.

(E) EMPLOYMENT CONTRACTS

None

(F) REPORT ON REPRICING OF OPTIONS/SARS

None

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

(A) SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following persons (including any group as defined in Regulation S-B, Section 228.403) are known to the Company, as the issuer, to be beneficial owner of more than five percent (5%) of any class of the said issuer's voting securities.

TITLE OF CLASS	NAME AND ADDRESS OF BENEFICIAL OWNER	COMMON SHARES		PERCENTAGE OF CLASS

Common	Medarex Inc.		1,300,000		10.0	%
	New Jersey, United States

Common	Dr. Uri Sagman		1,402,025		10.7	%
	Toronto, Ontario, Canada

(B) On May 24, 2008, Kyto and the Company entered into an agreement to receive up to 500,000 convertible preferred shares at $1.00 per share of Kyto in satisfaction of amounts due to the Company. The preferred share stock has no readily available fair values. For financial accounting purposes, these investments are presented at cost basis.

TITLE OF CLASS	NAME AND ADDRESS OF BENEFICIAL OWNER	PREFERRED SHARES		PERCENTAGE OF CLASS

Convertible Preferred	Comindus Finance Inc.. (1)		473,624		100.0	%

TITLE OF CLASS	NAME AND ADDRESS OF BENEFICIAL OWNER	COMMON SHARES		PERCENTAGE OF CLASS

Common	Georges Benarroch (1)		177,412		1.36	%
Common	Dr. Jean-Luc Berger		527,025		4.05	%
Common	Uri Sagman		1,402,025		10.7	8%

(1) Georges Benarroch is the President and Chief Executive Officer of Comindus Finance Inc. which 473,624 convertible preferred shares represented 100% of issued shares.

(D) CHANGES IN CONTROL

There is no such arrangement which may result in a change in control of the Company.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

(A) CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Detail of related party transactions are described in notes 3 of the consolidated Financial Statements.

At March 31, 2014 and 2013, the Company owed $19,400 and $5,234 to Comindus Finance Corp. Georges Benarroch is the President and Chief Executive Officer of Comindus Finance Corporation. The loan is non-interest bearing, unsecured and due on demand and included in the loans payable, related party balance. However, ASC-835-30 “Imputation of Interest” has been applied to impute the interest on loan from the related as there is no agreement between the Companies. Imputation of interest has been done @5%p.a. quarterly cumulative for the year ended March 31, 2014 and 2013, $-0- and $10,685, respectively has been imputed as interest.

Preferred convertible stock were issued in 2008 to satisfy a related party loan . The shares may be converted into common shares at the rate of $0.45 per share and bear dividend at the rate of 5% per annum. Company has accrued $49,407 and $24,053 as dividends as of March 31, 2014 and 2013 respectively..

During the year ended March 31, 2001, the Company entered into an agreement with a Medarex Inc(‘the vendor’), who is also a principal stockholder, for services totaling $200,000. On November 11, 2002, the Company and vendor mutually agreed that in lieu of the $200,000 payment, the vendor would accept 100,000 shares of the Company's common stock valued at $1.00 totaling $100,000. In addition, the Company also executed a $100,000 unsecured promissory note with the vendor. Under the terms of the promissory note, the obligation bears interest at prime plus 1% (4.25% at March 31, 2014). Interest is accrued and payable quarterly. At March 31, 2014 and 2013, accrued interest totaled $88,434 and $80,634, respectively.

(B) TRANSACTIONS WITH PROMOTORS

Georges Benarroch would be considered as a promoter of the Company. Georges Benarroch, is holding 473,624 convertible preferred shares represented 100% of issued shares.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

(1) Audit Fees

RBSM LLP, Independent Registered Public Accounting firm billed an aggregate of $15,000 and $15,000 for audit of our annual consolidated financial statements for the fiscal year ended March 31, 2014 and 2013

(2) Audit Related Fees

No other professional services were rendered by RBSM LLP for audit related services rendered during the fiscal year ended March 31, 2014 and 2013.

(3) Tax Fees

No professional services were rendered by RBSM LLP for tax compliance, tax advice, and tax planning the fiscal year ended March 31, 2014 and 2013.

(4) All Other Fees

Not applicable.

ITEM 15. EXHIBITS AND REPORTS ON FORM 10-K

(A) LISTING OF EXHIBITS

EXHIBIT NUMBER		DESCRIPTION

3(i)(a)		Articles of Incorporation of Kyto Biopharma, Inc.*
3(i)(b)		Articles of Amendment changing name to Kyto Biopharma, Inc.*
3(ii)		Bylaws of Kyto Biopharma, Inc.*
A		Medarex Agreement**
B		Patent Family Summary**
C		Research Foundation of The State University of New York agreement**
31.1		Section 302 Certification of the principal executive officer and the principal financial and accounting officer**
32.1		Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of the principal executive officer and principal financial accounting officer**

* Filed as Exhibit to Company's Form 10-SB on September 12th, 2003, with the Securities and Exchange Commission

** Filed as Exhibit with this Form 10-K.

(B) Code of Ethics

Kyto Biopharma Inc. will conduct its business honestly and ethically wherever we operate in the world. We will constantly improve the quality of our services, products and operations and will create a reputation for honesty, fairness, respect, responsibility, and integrity, trust and sound business judgment. No illegal or unethical conduct on the part of officers, directors, employees or affiliates is in the company's best interest. Kyto Biopharma Inc. will not compromise its principles for short-term advantage. The ethical performance of this company is the sum of the ethics of the men and women who work here. Thus, we are all expected to adhere to high standards of personal integrity.

Officers, directors, and employees of the company must never permit their personal interests to conflict, or appear to conflict, with the interests of the company, its clients or affiliates. Officers, directors and employees must be particularly careful to avoid representing Kyto Biopharma Inc. in any transaction with others with whom there is any outside business affiliation or relationship. Officers, directors, and employees shall avoid using their company contacts to advance their private business or personal interests at the expense of the company, its clients or affiliates.

No bribes, kickbacks or other similar remuneration or consideration shall be given to any person or organization in order to attract or influence business activity. Officers, directors and employees shall avoid gifts, gratuities, fees, bonuses or excessive entertainment, in order to attract or influence business activity.

Officers, directors and employees of Kyto Biopharma Inc. will often come into contact with, or have possession of, proprietary, confidential or business-sensitive information and must take appropriate steps to assure that such information is strictly safeguarded. This information - whether it is on behalf of our company or any of our clients or affiliates - could include strategic business plans, operating results, marketing strategies, customer lists, personnel records, upcoming acquisitions and divestitures, new investments, and manufacturing costs, processes and methods. Proprietary, confidential and sensitive business information about this company, other companies, individuals and entities should be treated with sensitivity and discretion and only be disseminated on a need-to-know basis.

Misuse of material inside information in connection with trading in the company's securities can expose an individual to civil liability and penalties. Directors, officers, and employees in possession of material information not available to the public are "insiders". Spouses, friends, suppliers, brokers, and others outside the company who may have acquired the information directly or indirectly from a director, officer or employee are also "insiders." The Act prohibits insiders from trading in, or recommending the sale or purchase of, the company's securities, while such inside information is regarded as "material", or if it is important enough to influence you or any other person in the purchase or sale of securities of any company with which we do business, which could be affected by the inside information.

The following guidelines should be followed in dealing with inside information:

Until the company has publicly released the material information, an employee must not disclose it to anyone except those within the company whose positions require use of the information.

Employees must not buy or sell the company's securities when they have knowledge of material information concerning the company until it has been disclosed to the public and the public has had sufficient time to absorb the information.

Employees shall not buy or sell securities of another corporation, the value of which is likely to be affected by an action by the company of which the employee is aware and which has not been publicly disclosed.

Officers, directors and employees will seek to report all information accurately and honestly, and as otherwise required by applicable reporting requirements.

Officers, directors and employees will refrain from gathering competitor intelligence by illegitimate means and refrain from acting on knowledge, which has been gathered in such a manner. The officers, directors and employees of Kyto Biopharma Inc. will seek to avoid exaggerating or disparaging comparisons of the services and competence of their competitors.

Officers, directors and employees will obey all Equal Employment Opportunity laws and act with respect and responsibility towards others in all of their dealings. Officers, directors and employees will remain personally balanced so that their personal life will not interfere with their ability to deliver quality products or services to the company and its clients.

Officers, directors and employees agree to disclose unethical, dishonest, fraudulent and illegal behavior, or the violation of company policies and procedures, directly to management.

Violation of this Code of Ethics can result in discipline, including possible termination. The degree of discipline relates in part to whether there was a voluntary disclosure of any ethical violation and whether or not the violator cooperated in any subsequent investigation.

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its be signed on its behalf by the undersigned, thereunto duly authorized.

	KYTO BIOPHARMA, INC.

DATE: June 30, 2014	By:	/ s/ Georges Benarroch
		Name: Georges Benarroch
		President, Chief Executive Officer, principal executive officer
		and principal financial and accounting officer

Pursuant to the requirements of the Securities Act of 1933, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date

/s/ Georges Benarroch	President, Chief Executive Officer, principal executive officer	June 30, 2014
Georges Benarroch	and principal financial and accounting officer

/s/ Jean-Luc Berger	Director	June 30, 2014
Jean-Luc Berger

/s/ Uri Sagman	Director	June 30, 2014
Uri Sagman

Kyto Biopharma, Inc. and Subsidiary

Consolidated Financial Statements

Table of Contents

Report of Independent Registered Public Accounting Firm			F-2

Consolidated Balance Sheets as of March 31, 2014 and 2013			F-3

Consolidated Statements of Operations for the years ended March 31, 2014 and 2013			F-4

Consolidated Statements of Stockholders' Deficit for the years ended March 31, 2014 and 2013.			F-5

Consolidated Statements of Cash Flows for the years ended March 31, 2014 and 2013			F-6

Notes to Consolidated Financial Statements			F-7 / F-14

F-1

RBSM LLP

CERTIFIED PUBLIC ACCOUNTANTS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders of

Kyto Biopharma, Inc.

Toronto, Canada

We have audited the accompanying consolidated balance sheets of Kyto Biopharma, Inc. and its subsidiary (the “Company”), as of March 31, 2014 and 2013, and the related consolidated statements of operations, deficiency in stockholders’ equity and cash flows for each of the two years in the period ended March 31, 2014. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We have conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States of America). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Kyto Biopharma, Inc. and its subsidiary as of March 31, 2014 and 2013, and the consolidated results of its operations and its cash flows for each of the two years in the period ended March 31, 2014, in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the accompanying consolidated financial statements, the Company has not commenced its planned principal operations and has suffered recurring losses since inception, which raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to this matter are described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ RBSM LLP

New York, New York

June 30, 2014

F-2

Kyto Biopharma, Inc. and Subsidiary

Consolidated Balance Sheets

	March 31,			March 31,
	2014			2013

ASSETS
Current Assets
Cash	$	3		$	117

Total Current Assets		3			117



Total Assets	$	3		$	117

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities
Accounts payable	$	-		$	808
Accrued liabilities		19,329			8,000
Accrued liabilities - related party		96,000			40,000
Accrued interest payable - related party		88,434			80,634
Dividends Payable - preferred convertible stock		49,407			24,053
Loan payable-related party		19,400			5,234
Note payable-related party		100,000			100,000
Total Current Liabilities		372,570			258,729

Commitments and Contingencies

Stockholders' Deficit
Preferred convertible stock, $1.00 par value, 1,000,000 shares
authorized, 473,624 issued and outstanding as of
March 31, 2014 and 2013 respectively		473,624			473,624
Common stock, $0.0001 par value, 25,000,000 shares
authorized, 12,998,482 issued and outstanding as of
March 31, 2014 and 2013, respectively		1,300			1,300
Additional paid-in capital		17,343,834			17,343,834
Accumulated deficit		(18,191,325	)		(18,077,370	)
Other comprehensive loss		-			-

Total Stockholders' Deficit		(372,567	)		(258,612	)

Total Liabilities and Stockholders' Deficit	$	3		$	117

The accompanying notes are an integral part of these consolidated financial statements

F-3

Kyto Biopharma, Inc. and Subsidiary

Consolidated Statements of Operations

	For the Year Ended
	March 31
	2014			2013

Operating Expenses
General and administrative	$	80,801		$	58,726

Total Operating Expenses		80,801			58,726

Loss from Operation		80,801			58,726

Other Income (Expenses)
Interest expense		(7,800	)		(18,137	)
Foreign currency transaction gain		-			-
Loss on dissolution of foreign subsidiary		-			(173,623	)
Total Other Income (Expense), net		(7,800	)		(191,760	)


Net Loss before taxes		(88,601	)		(250,487	)

Net Income (Tax) Benefit		-			-

Net Loss		(88,601	)		(250,487	)

Preferred Stock Dividends		(25,354	)		(24,053	)


Net Loss Attributed to common shareholders		(113,955	)		(274,540	)

Comprehensive Income
Foreign currency translation gain		-			(3,560	)
		-			(3,560	)

Comprehensive Loss		(113,955	)		(278,100	)


Weighted average number of shares outstanding
basic and diluted		12,998,482			12,998,482


Net loss per share - basic and diluted	$	(0.01	)	$	(0.02	)

Net loss per share attributable to Common Shares holders- basic and diluted	$	(0.01	)	$	(0.02	)

The accompanying notes are an integral part of these consolidated financial statements

F-4

Kyto Biopharma, Inc. and Subsidiary

Consolidated Statement of Stockholders' Deficit

For the Years Ended March 31,2014 and 2013

														Accumulated
														Other
	Preferred Stock				Common Stock				Additional					Comprehensive
	$1.00 par value				$0.0001 par value				Paid - in		Accumulated			Income
	Shares		Amount		Shares		Amount		Capital		Deficit			(Loss)			Total

Balance, March 31, 2012		473,624	$	473,624		12,998,482	$	1,300	$	15,966,014	$	(17,802,830	)	$	(177,183	)	$	(1,539,075	)
Transfer of Intangible assets and liabilities to related party		-		-		-		-		1,367,135		-			-			1,367,135
Imputed Interest		-		-		-		-		10,685		-			-			10,685
Foreign currency translation gain		-		-		-		-		-		-			3,560			3,560
Reclassify other comprehensive loss to operations upon dissolution of foreign subsidiary		-		-		-		-		-		-			173,623			173,623
Preferred stock Dividends		-		-		-		-		-		(24,053	)		-			(24,053	)
Net Loss		-		-		-		-		-		(250,487	)		-			(250,487	)
Balance, March 31, 2013		473,624	$	473,624		12,998,482	$	1,300	$	17,343,834	$	(18,077,370	)	$	-		$	(258,612	)
Preferred stock Dividends		-		-		-		-		-		(25,354	)		-			(25,354	)
Net Loss		-		-		-		-		-		(88,601	)		-			(88,601	)
Balance, March 31, 2014		473,624	$	473,624		12,998,482	$	1,300	$	17,343,834	$	(18,191,325	)	$	-		$	(372,567	)

The accompanying notes are an integral part of these consolidated financial statements

F-5

Kyto Biopharma, Inc. and Subsidiary

Consolidated Statements of Cash Flows

	For the Year Ended March 31,
	2014			2013
Cash Flows from Operating Activities:
Net loss	$	(113,955	)	$	(274,540	)
Adjustment to reconcile net loss to net cash provided by (used in)
operating activities:
Interest Expense imputed on Related Party Loan		-			10,685
Expenses Paid by Related Party on behalf the company		3,966			708
Loss on dissolution of foreign subsidiary		-			173,623
Changes in operating assets and liabilities:
Accrued Liabilities Related Party		56,000			40,000
Accrued Liabilities		11,329			8,000
Accrued Interest Related Party		7,800			7,391
Preferred Dividends Payable		25,354			24,053
Accounts payable and accrued expenses		(808	)		(3,080	)
Net Cash Used in Operating Activities		(10,314	)		(13,160	)

Cash Flows from Investing Activities:

Net Cash Used in Investing Activities		-			-

Cash Flows from Financing Activities:
Loan proceeds from related parties, net		10,200			8,250

Net Cash Provided by Financing Activities		10,200			8,250

Effect of currency rate change on cash		-			3,560

Net (decrease) increase in Cash and Cash Equivalents		(114	)		(1,350	)

Cash and Cash Equivalents at Beginning of Period		117			1,467

Cash and Cash Equivalents at End of Period	$	3		$	117


Supplemental Disclosure of Cash Flow Information:
Cash paid for:
Interest	$	-		$	-
Taxes	$	-		$	-

Non-Cash Investing & Financing Activities:
Transfer to intangible assets and liabilities to related Party creditited to additional paid in capital	$	-		$	1,367,135

The accompanying notes are an integral part of these consolidated financial statements

F-6

KYTO BIOPHARMA, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2014

NOTE 1 NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(A) NATURE OF BUSINESS

Kyto Biopharma, Inc. was formed as a Florida corporation on March 5, 1999. B Twelve, Limited, Kyto Biopharma, Inc.'s wholly-owned Canadian subsidiary (collectively referred to as the "Company"), was also formed on March 5, 1999. On August 14, 2002, the Company changed its name from B Twelve, Inc. to Kyto Biopharma, Inc.

The Company is a biopharmaceutical company, formed to acquire and develop innovative minimally toxic and non-immunosuppressive proprietary drugs for the treatment of cancer, arthritis, and other proliferate and autoimmune diseases. The Company is currently not in the development stage and was in “development stage” till June 30, 2011.

Activities during the development stage include acquisition of financing and intellectual properties and research and development activities conducted by others under contracts.

(B) PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements include the accounts of the Company and its subsidiary. All material intercompany balances and transactions have been eliminated in consolidation.

As reflected in the accompanying consolidated financial statements, the Company has no revenues, a net loss of $113,955, a working capital deficiency of $372,567 a stockholders' deficiency of $372,567 and a deficit accumulated of $18,191,325 at March 31, 2014. The ability of the Company to continue as a going concern is dependent on the Company's ability to further implement its business plan, raise capital, and generate revenues. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

The Company’s continued existence is dependent upon the Company's ability to resolve its liquidity problems, principally by obtaining additional debt financing and/or equity capital. During the year ended March 31, 2014, the Company received $10,200 in related party debt financing.

The Company has yet to generate an internal cash flow, and until the sales of its product begins, the Company is very dependent upon debt and equity funding. The Company must successfully complete its research and development resulting in a saleable product. However, there is no assurance that once the development of the product is completed and finally gains Federal Drug and Administration clearance, and that the Company will achieve a profitable level of operations.

F-7

KYTO BIOPHARMA, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2014

NOTE 1 NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(D) USE OF ESTIMATES

In preparing consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and revenues and expenses during the period presented. Actual results may differ from these estimates.

Significant estimates during 2014 and 2013 include depreciable lives on equipment, valuation of intangible assets, the valuation allowance of deferred tax assets, and the valuation of non-cash stock based transactions.

(E) CASH AND CASH EQUIVALENTS

The Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. There were no cash equivalents at March 31, 2014 and 2013, respectively.

(F) BASIS OF PRESENTATION AND FOREIGN CURRENCY

The accompanying consolidated financial statements are presented in United States dollars under accounting principles generally accepted in the United States of America.

The Company's Canadian subsidiary transacts business in the Canadian dollar. The accounts of the Canadian subsidiary are translated to United States dollars using the current rate method. Under the current rate method, all assets and liabilities are translated using exchange rates at the balance sheet date. Revenue and expense items are translated using the average rate of exchange prevailing during the period. Capital transactions are translated at their historical rates. Exchange gains and losses resulting from translation of foreign currencies are recorded in stockholders' deficiency as a cumulative translation adjustment and reflected as a component of other accumulated comprehensive income or loss.

Gains and losses resulting from foreign currency transactions are recognized in operations of the period incurred.

(G) CONCENTRATIONS

The Company maintains its cash in bank deposit accounts, which, at times, may exceed federally insured limits. As of March 31, 2014, the Company did not have any deposits in excess of federally insured limits. The Company has not experienced any losses in such accounts through March 31, 2014 and 2013, respectively.

The Company has obtained and continues to obtain a large amount of its funding from loans and equity funding from a principal stockholder related to a director of the Company.

(H) EQUIPMENT

Equipment is stated at cost, less accumulated depreciation. Expenditures for maintenance and repairs are charged to expense as incurred. Depreciation is provided using the straight-line method over the estimated useful lives of the assets of five years.

F-8

KYTO BIOPHARMA, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2014

NOTE 1 NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(I) LONG-LIVED ASSETS

The Company reviews long-lived assets and certain identifiable assets related to those assets for impairment whenever circumstances and situations change such that there is an indication that the carrying amounts may not be recoverable. If the undiscounted future cash flows of the long-lived assets are less that the carrying amount, their carrying amount is reduced to fair value and an impairment loss is recognized.

(J) STOCK-BASED COMPENSATION

Financial Accounting Standards Board Accounting Standards Codification Topic 718, Stock Compensation requires generally that all equity awards granted to employees be accounted for at “fair value.” This fair value is measured at grant for stock settled awards, and at subsequent exercise or settlement for cash-settled awards.

Under this method, the Company records an expense equal to the fair value of the options or warrants issued. The fair value is computed using the Black Scholes options pricing model.

(K) PATENT RIGHTS

Acquisition of Patent Rights is stated at cost and will be reclassified to intangible assets and amortized on a straight-line basis over the estimated future periods to be benefited if and once the patent has been granted by the United States Patent and Trademark Office (“USPTO”).The Company will write-off any currently capitalized costs for patents not granted by the USPTO (See note 4).

(L) INCOME TAXES

The Company accounts for income taxes under the Financial Accounting Standards Accounting Standard Codifcation Topic 740"Accounting for Income Taxes" ("Topic 740"). Under Topic 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under Topic 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period, which includes the enactment date.

(M) COMPREHENSIVE INCOME

The Company accounts for Comprehensive Income under the Financial Accounting Standards Board Statement of Financial Accounting Standards Accounting Standard Codification Topic 220, "Reporting Comprehensive Income" ("Topic 220"). Topic 220 establishes standards for reporting and display of comprehensive income and its components. Comprehensive income is the total of net income (loss) and other comprehensive income (loss).

F-9

KYTO BIOPHARMA, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2014

NOTE 1 NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

The foreign currency translation gains and losses resulting from the translation of the financial statements of B Twelve, Ltd. expressed in Canadian dollars to United States dollars are reported as Accumulated Other Comprehensive Income or Loss in the Statement of Operations.

(N) NET LOSS PER COMMON SHARE

In accordance with Statement of Financial Accounting Standards Accounting Standard Codification Topic. 260, "Earnings per Share", basic earnings per share is computed by dividing the net income less preferred dividends for the period by the weighted average number of common shares outstanding. Diluted earnings per share is computed by dividing net income less preferred dividends by the weighted average number of common shares outstanding including the effect of common stock equivalents. Common stock equivalents, consisting of stock options and warrants, have not been included in the calculation, as their effect is anti dilutive for the periods presented. At March 31, 2014, there were convertible preferred shares which could have been potentially been converted into 1,052,498 shares of common stock, but would be anti dilutive.

(O) SIGNIFICANT RECENT ACCOUNTING PRONOUNCEMENTS

Management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying consolidated financial statements.

(P) RECLASSIFICATIONS

Certain amounts in the March 31, 2013 consolidated financial statements may have been reclassified to conform to the March 31, 2014 presentation.

F-10

KYTO BIOPHARMA, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2014

NOTE 2 COMMITMENTS AND CONTINGENCIES

(A) LEASES

The Company leases office space on a month-to-month basis. The premise is leased from a principal stockholder. Rent expense in 2014 and 2013 were $20,000 and $20,000, respectively and is included in general and administrative expense in these accompanying consolidated statements of operations.

(B) REGULATION

The business of the Company is subject to various governmental regulations in the United States of America, Canada, and other countries, which must approve any Company products before commencement of commercial sales and which regulate the manufacturing of pharmaceuticals.

NOTE 3 RELATED PARTY TRANSACTION

(A) At March 31, 2014, the Company owed $19,400 to a related party director of the Company. The loan is non-interest bearing, unsecured and due on demand and included in the loans payable, related party balance. During the year ended March 31, 2014 and 2013, a related party paid accounts payable in the amount of $3,966 and $ 708 respectively.

(B) ACCRUED LIABILITIES, RELATED PARTY

The Company leases office space and administrative services from a related party principal stockholder. Rent and administrative expense in 2014 and, 2013, was $40,000, and $40.000, respectively and is included in general and administrative expense in the accompanying consolidated statements of operations. The Company allocates 50% of these amounts to rent expense. As of March 31, 2014 and 2013, the remaining balance in the accrued liabilities-related party account for the above services was $96,000 and $40,000, respectively.

Further, the purchase price is paid and satisfied by the Kyto IP Inc. assuming the debt of the company to Comindus Finance Corp and other liabilities (See note 4)..

NOTE 4 PATENT RIGHTS

Further, the purchase price is paid and satisfied by the Kyto IP Inc. assuming the debt of the company to Credifinance Capital Corp (during 2013, Credifinance Capital Corp. changed its name to Comindus Finance Corp. and other liabilities summarized below.

F-11

KYTO BIOPHARMA, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2014

NOTE 4 PATENT RIGHTS (CONTINUED)

Description	Amount($)
Accounts payable	$	3,112
Accrued liabilities	$	25,969
Accrued liabilities- related party	$	69,000
Dividend payable- preferred convertible stock	$	104,144
Loan payable- related party	$	1,164,910
Net liabilities assumed (transferred to Kyto IP Inc)	$	1,367,135

NOTE 5 STOCKHOLDERS' DEFICIENCY

(A) CONVERTIBLE PREFERRED STOCK

In June 1999, an investor purchased 250,000 units at $1.00 per unit or $250,000 consisting of 250,000 shares of convertible preferred stock and receives warrants to purchase up to 750,000 common shares as follows: 250,000 common stock warrants exercisable at $1.00 per share issued with the preferred stock and another potential 500,000 as discussed below. The preferred stock was convertible to common stock on a one-for-one basis upon the earlier of:

(i) An initial public offering by the Company, as defined,

(ii) The completion of a reverse take-over transaction,

(iii) A minimum $3,000,000 private equity financing based on a $10,000,000 valuation or,

(iv)The merger of the Company with another corporation or the sale of substantively all the assets of the Corporation.

There was no beneficial conversion feature upon the sale as the value of the common shares into which the preferred shares are convertible are also $1.00 based on contemporaneous transactions.

Upon exercise of the first 250,000 warrants, the investor received another warrant for 250,000 common shares at $1.00 exercise price per share. Upon conversion of the preferred stock, each share of common stock issued shall be coupled with an additional common stock purchase warrant at an exercise price of $1.00 per share with a three-month term. In December 1999 and May 2000, 100,000 and 150,000, respectively, of the first warrant were exercised and therefore in May 2000 the additional 250,000 warrant were granted with an exercise price of $1.00 expiring June 2003. In June 2001, pursuant to a letter of intent, which was ratified by the shareholders, the preferred shares were converted and the additional 250,000 warrants were granted at an exercise price of $1.00 with an amended term not to exceed five years. There was no beneficial conversion feature to the warrants as the value of the common stock was still considered to be $1.00 based on contemporaneous transactions at that time. There was no effect of the warrant issuances on operations as all warrants are considered to be purchased as part of the preferred stock unit. The second and third warrants totaling 500,000 common shares remained outstanding at March 31, 2003. In June 2003, 250,000 expired and in June 2006 the remaining 250,000 expired.

In May 2007, Kyto entered into an agreement with Credifinance Capital Corp. to issue up to 500,000 convertible preferred shares at $1.00 per share in satisfaction of amounts due to Credifinance Capital Corp. During the year ended March 31, 2008 the Company issued 459,734 shares of convertible preferred stock to a Credifinance Capital Corp. to satisfy the related party loan payable. As there is no readily available fair value for the Company's convertible preferred stock, the issuance has been recorded at par value of $1 per share for a total of $459,734. The preferred convertible stock issued to satisfy the related party loan may be converted into common shares at the rate of $0.45 per share for up to two years and bear interest at the rate of 5% per annum. Preferred convertible stock has the same voting rights as common stock.

F-12

KYTO BIOPHARMA, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2014

NOTE 5 STOCKHOLDERS' DEFICIENCY (CONTINUED)

The Company issued 13,890 shares of preferred stock valued at $1 per share for a total of $13,890 to Comindus Finance Corp. for the accrued interest due on outstanding convertible preferred stock during the year ended March 31, 2008. These shares may be converted into common shares at the rate of $0.45 per share for up to two years and bear interest at the rate of 5% per annum

As of March 31, 2014, 473,624 convertible preferred shares were outstanding.

(B) COMMON STOCK AND OPTIONS

In January 2006, the Company issued 94,054 shares valued at $0.75 per share based on the quoted trade price in payment of various expenses totaling $47,027 to a finance company controlled by a director of the company and to a director. The Company recorded a loss on debt conversion of $23,513.

In February 2008, the company issued 500,000 shares valued at $0.50 per share in payment of consulting service to Dr. Uri Sagman, 159,999 shares valued at $0.50 per share to Credifinance Capital Corp. for rent and administration fees, and 3,408 shares valued at $0.50 per share to Credifinance Capital Corp. for satisfaction of the balance of the related party loan payable.

In March 2010, the Company issued 254,872 shares valued at $0.63 per share, in exchange for Patent rights.

As of March 31, 2014, 12,998,482 common shares were outstanding.

As of March 31, 2014, no stock options and warrants were outstanding.

(D) PAR VALUE

In August 2001, the par value of common stock was changed to $0.0001 from $1.00. The change is reflected retroactively for all periods presented in the accompanying consolidated financial statements.

(E) EARNINGS PER SHARE

Basic earnings per share are computed by dividing earnings available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share reflect per share amounts that would have resulted if dilutive potential common stock had per share reflect per share amounts that would have resulted if dilutive potential common stock had been converted to common stock. The following reconciles amounts reported in the financial statements for the year ended:

	2014			2013
Loss available to common stockholders.	$	(113,955	)	$	(274,540	)
Weighted average common shares outstanding		12,998,482			12,998,482
Basic and diluted loss per share	$	(0.01	)	$	(0.02	)

Effect of dilutive securities

The following convertible securities were not included in the computation of diluted earnings per share because the effect of conversion would be antidilutive:

SHARES OF POTENTIAL

COMMON STOCK

Preferred convertible shares 473,624 are convertible to 1,052,498 potential common shares.

F-13

KYTO BIOPHARMA, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2014

NOTE 6 INCOME TAXES

The Company files separate tax returns for the parent and its Canadian subsidiary. There was no income tax expense or utilization of net operating loss carry forwards for the years ended March 31, 2014 and 2013, due to the Company's net losses.

The blended Canadian Federal and Provincial Corporate tax rate of 41.5% applies to loss before taxes of the Canadian subsidiary. The Company's tax expense differs from the "expected" tax expense for Federal income tax purposes for the years ended March 31, 2014 and 2013 (computed by applying the United States Federal Corporate tax rate of 34% to consolidated loss before taxes), as follows:

	2014			2013

Computed "expected" tax benefit	$	(38,745	)	$	(93,344	)
Foreign income tax rate differences
Change in deferred tax asset valuation allowance		38,745			(93,344)
	$	-		$		-
The above benefit was calculated using a combined federal and state tax estimated rate as noted below
Statutory federal income tax rate		34.00	%		34.00-	%
State income taxes		1	%		1	%
Foreign income tax rate difference		(1	)%		(1	)%
Valuation allowance		(34.00	)%		(34.00)	%
Effective tax rate		(0.0	)%		(0.0	)%

The effects of temporary differences that gave rise to significant portions of deferred tax assets and liabilities at March 31, 2014 are as follows:

Deferred tax assets:
United States net operating loss carryforward	$	6,049,413
Canadian net operating loss carryforward		-
Total gross deferred tax assets		6,049,413
Less valuation allowance		(6,049,413	)
Net deferred tax assets	$	-

The net change in valuation allowance during the year ended March 31, 2014 was an increase of approximately $38,745. The Company's has a net operating loss carry forward of approximately $17,792,391 available to offset net income through 2030.

For the purpose of these estimates, certain stock based expenses aggregating approximately $1,008,000 and impairment loss amounting to $165,570 since inception were considered non-deductible. Actual amounts ultimately deductible may differ from these estimates.

The utilization of the net operating loss carry forwards is dependent upon the ability to generate sufficient taxable income during the carry forward period. In addition, utilization of these carry forwards may be limited due to ownership changes as defined in the Internal Revenue Code.

The Company is subject to taxation in the United States and certain state jurisdictions. The Company’s tax years for 2002 and forward are subject to examination by the United States and applicable state tax authorities due to the carry forward of unutilized net operating losses. Certain subsidiaries of the Company are subject to examination by the Canadian tax authorities as per the laws and regulations of Canada.

F-14

Kyto Technology & Life Science, Inc. - FORM 10-K - June 30, 2014

Attached files

Kyto Technology & Life Science, Inc. Reports