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

Attached files

file	filename
EX-31.1 - CERTIFICATION - Kyto Technology & Life Science, Inc.	kbph_ex311.htm
EX-32.1 - CERTIFICATION - Kyto Technology & Life Science, Inc.	kbph_ex321.htm
EX-31.2 - CERTIFICATION - Kyto Technology & Life Science, Inc.	kbph_ex312.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

———————

FORM 10-Q

———————

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

For the quarterly period ended September 30, 2015

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

For the transition period from: _____________ to _____________

KYTO BIOPHARMA, INC.

(Exact name of registrant as specified in its charter)

FLORIDA	000-50390	65-1086538
(State or Other Jurisdiction	(Commission	(I.R.S. Employer
of Incorporation)	File Number)	Identification No.)

500 Australian Avenue South, Suite 600 West Palm Beach, FL 33401

(Address of Principal Executive Office) (Zip Code)

(416) 960-8790

(Registrant’s 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. þ Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss. 232.405 of this chapter) during the preceding 12 (or for such shorter period that the registrant was required to submit and post such files). o Yes þ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

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 Act). ¨ Yes þ No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

3,139,680 Common Shares - $0.0001 Par Value - as of November 13, 2015

KYTO BIOPHARMA, INC.

For the quarterly period ended September 30, 2015

INDEX

	PART I. FINANCIAL INFORMATION

Item 1.	Condensed Financial Statements

	Condensed Balance Sheets as of September 30, 2015 (Unaudited) and March 31, 2015	3

	Condensed Statements of Operations for the Three and Six Months Ended September 30, 2015 and 2014 unaudited	4

	Condensed Statement of Stockholders’ Deficit for the Six Months Ended September 30, 2015 unaudited	5

	Condensed Statements of Cash Flows for the Six Months Ended September 30, 2015 and 2014 unaudited	6

	Notes to Unaudited Condensed Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Conditions and Results of Operations.	10

Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	10

Item 4.	Controls and Procedures.	11

	PART II. OTHER INFORMATION

Item 1.	Legal Proceedings.	12

Item 1A.	Risk Factors.	12

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	12

Item 3.	Defaults Upon Senior Securities.	12

Item 4.	Mine Safety Disclosures	12

Item 5.	Other Information	12

Item 6.	Exhibits	13
	Signatures	14-17

PART I - FINANCIAL INFORMATION

ITEM 1.

Condensed FINANCIAL STATEMENTS

Kyto Biopharma, Inc.

Condensed Balance Sheets

	September 30,			March 31,
	2015			2015
	( Unaudited )
ASSETS
Current Assets
Cash	$	15		$	2

Total Current Assets		15			2



Total Assets	$	15		$	2

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities
Accounts payable	$	150		$	431
Accrued liabilities		17,000			12,500
Accrued liabilities - related party		40,000			20,000
Loan payable-related party		23,868			8,893
Total Current Liabilities		81,018			41,824

Commitments and Contingencies

Stockholders' Deficit
Preferred convertible stock $1.00 par value 2,000,000
authorized, NIL issued and outstanding as of
September 30, 2015 and March 31, 2015, respectively		-			-
Common stock, $0.0001 par value, 100,000,000 shares
authorized, 3,139,680 issued and outstanding as of
September 30, 2015 and March 31, 2015, respectively		314			314
Additional paid-in capital		32,063,476			32,063,476
Accumulated deficit		(32,144,793	)		(32,105,612	)

Total Stockholders' Deficit		(81,003	)		(41,822	)

Total Liabilities and Stockholders' Deficit	$	15		$	2

Kyto Biopharma, Inc.

Unaudited Condensed Statements of Operations

	For the Three Months Ended						For the Six Months Ended
	September 30						September 30
	2015			2014			2015			2014


Operating Expenses
General and administrative	$	19,439		$	538,067		$	39,181		$	552,024

Total Operating Expenses		19,439			538,067			39,181			552,024

Loss from Operations		19,439			538,067			39,181			552,024

Other Expense
Interest expense		-			(1,363	)		-			(3,365	)
Loss on issuance of common stock		-			(13,308,739	)		-			(13,308,739	)
Total Other Expense net		-			(13,310,102	)		-			(13,312,104	)


Net Loss before taxes		(19,439	)		(13,848,169	)		(39,181	)		(13,864,128	)

Net Income (Tax) Benefit		-			-			-			-

Net Loss	$	(19,439	)	$	(13,848,169	)	$	(39,181	)	$	(13,864,128	)

Preferred Stock Dividends		-			(4,461	)		-			(10,999	)


Net Loss Attributed to common shareholders	$	(19,439	)	$	(13,852,630	)	$	(39,181	)	$	(13,875,127	)



Weighted average number of shares outstanding
basic and diluted		3,139,680			1,699,812			3,139,680			1,500,923


Net loss per share - basic and diluted	$	(0.01	)	$	(8.15	)	$	(0.01	)	$	(9.24	)

Net loss per share attributable to Common Shares holders- basic and diluted	$	(0.01	)	$	(8.15	)	$	(0.01	)	$	(9.24	)

Kyto Biopharma, Inc.

Condensed Statement of Stockholders' Deficit

For the The Six Months Ended September 30, 2015

(Unaudited)

	Preferred Stock				Common Stock				Additional
	$1.00 par value				$0.0001 par value				Paid - in		Accumulated
	Shares		Amount		Shares		Amount		Capital		Deficit			Total

Balance, March 31, 2015		-		-		3,139,680	$	314	$	32,063,476	$	(32,105,612	)	$	(41,822	)
Net Loss		-		-		-		-		-		(39,181	)		(39,181	)
Balance, September 30, 2015		-	$	-		3,139,680	$	314	$	32,063,476	$	(32,144,793	)	$	(81,003	)

Kyto Biopharma, Inc.

Unaudited Condensed Statements of Cash Flows

	For the Six Months Ended September 30
	2015			2014
Cash Flows from Operating Activities:
Net loss	$	(39,181	)	$	(13,875,129	)
Adjustments to reconcile net loss to net cash used in
operating activities:
Loss on issuance of stock		-			13,308,739
Stock issued for directors fees		-			225,000
Stock issued for consulting fees		-			300,000
Changes in operating assets and liabilities:
Accrued liabilities related party		20,000			20,000
Accrued liabilities		4,500			(8,254	)
Accrued interest related party		-			3,366
Preferred dividends payable		-			10,999
Accounts payable and accrued expenses		(281	)		971
Net Cash Used in Operating Activities		(14,962	)		(14,308	)

Cash Flows from Investing Activities:

Net Cash Used in Investing Activities		-			-

Cash Flows from Financing Activities:
Loan proceeds from related parties, net		14,975			14,345

Net Cash Provided by Financing Activities		14,975			14,345



Net increase in Cash and Cash Equivalents		13			37

Cash and Cash Equivalents at Beginning of Period		2			3

Cash and Cash Equivalents at End of Period	$	15		$	40


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

Non- Cash Investing and Financing Activities
Common Stock issued in connection with old debt					411,292
Common Stock issued in connection with conversion of preferred stock	$	-		$	473,624
Total non-cash change	$	-		$	884,916

KYTO BIOPHARMA, INC.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

September 30, 2015

NOTE 1 – DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Kyto Biopharma, Inc. was formed as a Florida corporation 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.

USE OF ESTIMATES

In preparing 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 financial statements, and revenues and expenses during the period presented. Actual results may differ from these estimates.

Significant estimates during 2015 and 2014 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.

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, 2015 and 2014, respectively.

CONCENTRATIONS

The Company maintains its cash in bank deposit accounts, which, at times, may exceed federally insured limits. As of March 31, 2015, 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, 2015 and 2014, 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.

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.

NOTE 2 – INTERIM REVIEW REPORTING

The accompanying unaudited condensed financial statements of Kyto Biopharma, Inc. (the "Company") have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC). Certain information and footnote disclosures, normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such SEC rules and regulations. Nevertheless, the Company believes that the disclosures are adequate to make the information presented not misleading. These interim unaudited condensed financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company's March 31, 2015 Annual Report as filed on Form 10K. In the opinion of management, all adjustments, including normal recurring adjustments necessary to present fairly the financial position of the Company with respect to the interim unaudited condensed financial statements and the results of its operations for the interim period ended September 30, 2015, have been included. The results of operations for interim periods are not necessarily indicative of the results for a full year.

NOTE 3 – GOING CONCERN

As reflected in the accompanying unaudited condensed financial statements, the Company has a working capital deficiency of $81,003, a deficit accumulated of $32,144,793 and a stockholders' deficit of $81,003 as of September 30, 2015. 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 unaudited condensed financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

The Company has yet to generate an internal cash flow, and until the sales of its product begins, the Company is highly 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, that the Company will achieve a profitable level of operations.

NOTE 4 - ACCOUNTING STANDARDS UPDATES

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 unaudited condensed financial statements.

KYTO BIOPHARMA, INC.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

September 30, 2015

NOTE 5 –RELATED PARTY TRANSACTIONS

During the quarter ended September 30, 2015 and 2014, the Company received a loan from a related party in the amount of $3,165 and $3,965 respectively. At September 30, 2015, and March 31, 2015 the Company owed $23,868 and $8,893 respectively, to related parties of the Company. The loans are non-interest bearing, unsecured and due on demand. The loans are included in loans payable, related party on the accompanying balance sheet.

The Company leases office space and administrative services from a related party principal stockholder. As of September 30, 2015 and March 31, 2015, the remaining balance in the accrued liabilities-related party account for the above services was $40,000 and $20,000, respectively.

NOTE 6- EQUITY

A) CONVERTIBLE PREFERRED STOCK

On May 24, 2007 the Company entered into an agreement with Comindus Finance Corp a related party, to issue up to 500,000 Convertible Preferred Stock at $1.00 per share. This agreement is on an installment basis. During the year ended March 31, 2008, the Company issued 473,624 shares of Convertible Preferred Stock to Comindus Finance Corp. for a total of $473,624 to satisfy a related party loan payable. Convertible Preferred Stock may be converted into Common Shares at a price of $4.50 per Common Share. The Convertible Preferred Stock bears dividends at a rate of 5% per annum. Preferred Convertible Stock has the same voting rights as Common Stock. On September 11, 2014, the convertible stocks were converted to common stock at a price of $0.50 per share.

As of September 30, 2015 and March 31, 2015, there are no preferred shares of the Company common stock were issued and outstanding.

B) COMMON STOCK

On September 24, 2015 a submission on Florida Section 607.0704 of the Florida Business Corporation Act was sent to the Company. Pursuant to this Section it is possible for shareholders owning a majority of the outstanding stock of the Company to take an action without the requirement of a meeting.

The action taken by the majority shareholders was taken for the purpose of increasing the share price which could generate interest in the Company by investors and provide business opportunities. The action then adopted a reverse stock split in the amount of a one (1) for ten (10) of our issued and outstanding shares of common stock. By way of explanation, a reverse stock split is a process whereby a company decreases the number of company shares that are available and increases the price per share by combining the current shares into fewer shares. The reverse split does not change the number of authorized shares of common stock. Each stockholder will hold the same percentage of our outstanding common stock immediately following the reverse stock split as she or he did immediately prior to the reverse stock split, except for adjustments required to the treatment of fractional shares.

It should be pointed out that the Company sees no dissenters’ rights with respect to the reverse stock split, and we do not intend to independently provide shareholders with such rights.

As a result of the reverse stock split, every 10 shares of the Company's issued and outstanding common stock automatically combined into one issued and outstanding share of common stock. Unless otherwise noted, impacted amounts and share information included in the financial statements and notes thereto have been retroactively adjusted for the stock split as if such stock split occurred on the first day of the first period presented.

As of September 30, 2015 and March 31, 2015, 3,139,680 shares of the Company common stock were issued and outstanding.

NOTE 7- SUBSEQUENT EVENT.

On November 4, 2015, the Company completed a one (1) for ten (10) reverse stock split.

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS

PLAN OF OPERATION

The report of our Independent Registered Public Accounting firm dated June 30, 2015 on our March 31, 2015 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, significant accumulated deficit and working capital deficit. Our ability to continue as a going concern will be determined by our ability to obtain additional financing and maintain operations. Currently we do not have sufficient financial resources to fund our operations. Therefore, we need additional funds to continue these operations. 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 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.

Results of Operations

For the three months ended September 30, 2015 the Company’s net loss attributable to common shareholders decreased by $13,833,192 to $19,439 compared to a net loss of $13,852,630 for the three months ended September 30, 2014. The Net loss for the three months ended September 30, 2015 decreased by $13,828,730 to $19,439 compared to a net loss of $13,848,169 for the three months ended September 30, 2014

For the six months ended September 30, 2015 the Company’s net loss attributable to common shareholders decreased by $13,835,946 to $39,181 compared to a net loss of $13,875,127 for the six months ended September 30, 2014. The Net loss for the six months ended September 30, 2015, decreased by $13,824,947 to $39,181 compared to a net loss of $13,864,128 for the six months ended September 30, 2014.

Liquidity and Capital Resources

The Company had working capital deficits of $81,003 as of September 30, 2015 and $41,822 as of March 31, 2015. Cash was $15 as of September 30, 2015 and $2 as of March 31, 2015.

Cash from operating activities

The Company’s net cash used in operations increased by $654 to $14,962 for the six months ended September 30, 2015 compared to net cash used in operations of $14,308 for the six months ended September 30, 2014.

Cash from financing activities

The Company’s net cash flows from financing activities increased by $630 to $14,975 for the six months ended September 30, 2015 compared to cash flows from financing activities of $14,345 for the six months ended September 30, 2014.

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 R&D activities related to the development and application of its antibody technologies. As of the date of filing of this Form 10-Q with the U.S. Securities and Exchange Commission, the Company did receive a commitment of one of its stockholders to continue to provide operating loan funds to the Company.

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not required for smaller reporting company.

ITEM 4.

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 September 30, 2015 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 September 30, 2015.

Limitations on Effectiveness of Controls and Procedures

Our management, including our Chief Executive Officer and Chief Financial Officer (principal financial 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.

Internal Controls over Financial Reporting

During the quarter ended September 30, 2015, 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.

PART II. OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

None

ITEM 1A.

RISK FACTORS.

Not required for smaller reporting company.

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4.

MINE SAFETY DISCLOSURES

None

ITEM 5.

OTHER INFORMATION

None

ITEM 6.

EXHIBITS

Index to Exhibits on page 13

INDEX TO 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.*

10.1		Research collaboration agreement between The Research Foundation of State University of New York and B. Twelve Ltd. (Kyto Biopharma, Inc.) [dated August 19, 1999]**

10.2		Collaborative Research Agreement to synthesize new vitamin B12 analogs signed between the Company and New York University [dated November 11, 1999]**

10.3		Extension/Modification Research Collaboration Agreement between the Research Foundation of State University of New York and B Twelve, Inc., (Kyto Biopharma, Inc.) Modification No. 1 [dated November 01, 2000]**

10.4		Debt Settlement Agreement and Put Option (dated November 2002) between Kyto Biopharma, Inc. and New York University.**

10.5		Extension/Modification Research Collaboration Agreement between the Research Foundation of State University of New York and Kyto Biopharma, Inc., Modification No. 2 [dated December 2004]. **

10.6		Services Agreement between Kyto Biopharma, Inc. and Gerard Serfati [dated November 1, 2004]***

31.1		Section 302 Certification of principal executive officer.**

31.2		Section 302 Certification of 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 **

———————

*	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-Q.

***	Previously filed with Form S-8 on November 18, 2004.

SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Kyto Biopharma, Inc.


	By:	/s/ Georges Benarroch
		Georges Benarroch Chief Executive Officer, principal executive officer, principal financial and accounting officer

Date: November 16, 2015

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