Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
———————
FORM 10-Q
———————
☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31,
2016
or
☐ 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
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000-50390
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65-1086538
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(State or Other Jurisdiction
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(Commission
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(I.R.S. Employer
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of Incorporation)
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File Number)
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Identification No.)
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500
Australian Avenue South, Suite 600 West Palm Beach, FL
33401
(Address of Principal
Executive Office) (Zip Code)
(416) 960-8770
(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.
☑ 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). ☐ Yes ☑ No
Indicate
by check mark whether the registrant is a large accelerated filer,
an accelerated filer, a non-accelerated filer, or a smaller
reporting company.
Large accelerated filer
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☐
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Accelerated filer
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☐
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Non-accelerated filer
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Smaller reporting company
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☑
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Indicate by check mark whether the registrant is a
shell company (as defined in Rule 12b-2 of the Act).
☐ Yes ☑ No
Indicate
the number of shares outstanding of each of the issuer’s
classes of common stock, as of the latest practicable
date.
3,139,747 Common Shares -
$0.0001 Par Value - as of February 13,
2017
KYTO BIOPHARMA, INC.
For the quarterly period ended December 31, 2016
INDEX
PART I.
FINANCIAL INFORMATION
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Item 1.
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Financial Statements
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3
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Condensed Balance Sheets as of December 31, 2016 (Unaudited)
and March 31, 2016
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3
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Unaudited Condensed Statements of Operations for the Three and
Nine Months Ended December 31, 2016 and 2015
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4
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Unaudited Condensed Statement of Stockholders’ Deficit for
the Nine Months Ended December, 2016
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5
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Unaudited Condensed Statements of Cash Flows for the Three and Nine
Months Ended December , 2016 and 2015
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6
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Notes
to Unaudited Condensed Financial
Statements
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7
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Item 2.
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Management’s Discussion and Analysis of Financial Condition
and Results of Operations.
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10
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Item 3.
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Quantitative and Qualitative Disclosures About Market
Risk.
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10
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Item 4.
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Controls and Procedures.
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11
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PART II.
OTHER INFORMATION
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Item 1.
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Legal Proceedings.
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12
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Item 1A.
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Risk Factors.
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12
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Item 2.
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Unregistered Sales of Equity Securities and Use of
Proceeds.
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12
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Item 3.
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Defaults Upon Senior Securities.
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12
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Item 4.
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Mine Safety Disclosures
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12
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Item 5.
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Other Information
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12
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Item 6.
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Exhibits
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13
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Signatures
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14-17
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2
PART I - FINANCIAL INFORMATION
ITEM 1.
FINANCIAL STATEMENTS
Kyto Biopharma, Inc.
Condensed Balance Sheets
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December 31,
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March 31,
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2016
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2016
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( Unaudited )
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Current Assets
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Cash
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$9
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$32
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Total Current Assets
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9
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32
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Total Assets
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$9
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$32
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LIABILITIES AND STOCKHOLDERS' DEFICIT
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Current Liabilities
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Accounts
payable
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$326
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$-
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Accrued
liabilities
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5,000
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12,500
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Accrued
liabilities - related party
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132,000
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84,000
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Loan
payable-related party
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65,018
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35,732
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Total Current Liabilities
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202,344
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132,232
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Commitments and Contingencies
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Stockholders' Deficit
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Preferred
convertible stock, $1.00 par value, 2,000,000 shares authorized,
none issued and outstanding as of December
31, 2016 and March 31, 2016, respectively
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-
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-
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Common
stock, $0.0001 par value, 100,000,000 shares authorized,
3,139,747 issued and outstanding as of December 31, 2016 and March
31, 2016, respectively
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314
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314
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Additional
paid-in capital
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32,063,476
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32,063,476
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Accumulated
deficit
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(32,266,125)
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(32,195,990)
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Total Stockholders' Deficit
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(202,335)
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(132,200)
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Total Liabilities and Stockholders' Deficit
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$9
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$32
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The accompanying notes are an integral part of these unaudited
condensed financial statements
3
Kyto Biopharma, Inc.
Condensed Statements of Operations
Unaudited
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For the Three Months Ended
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For the Nine Months Ended
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December 31
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December 31
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2016
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2015
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2016
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2015
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Operating Expenses
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General
and administrative
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$31,079
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$27,340
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$70,135
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$66,521
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Total Operating Expenses
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31,079
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27,340
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70,135
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66,521
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Loss from Operations
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31,079
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27,340
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70,135
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66,521
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Net Loss before taxes
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(31,079)
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(27,340)
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(70,135)
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(66,521)
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Net
Income (Tax) Benefit
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-
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-
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-
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-
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Net Loss
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$(31,079)
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$(27,340)
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$(70,135)
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$(66,521)
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Weighted
average number of shares outstanding
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basic
and diluted
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3,139,747
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3,139,747
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3,139,747
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3,139,747
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Net
loss per share - basic and diluted
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$(0.01)
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$(0.01)
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$(0.02)
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$(0.02)
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The accompanying notes are an integral part of these unaudited
condensed financial statements
4
Kyto Biopharma, Inc.
Condensed Statement of Stockholder's Deficit
For the Nine Months Ended December 31, 2016
Unaudited
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Preferred Stock
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Common Stock
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Additional
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$1.00 par value
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$0.0001 par value
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Paid - in
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Shares
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Amount
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Shares
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Amount
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Capital
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Deficit
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Total
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Balance, March 31, 2016
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-
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$-
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3,139,747
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$314
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$32,063,476
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$(32,195,990)
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$(132,200)
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Net
Loss
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-
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-
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(70,135)
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(70,135)
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Balance, December 31, 2016
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-
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$-
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3,139,747
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$314
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$32,063,476
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$(32,266,125)
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$(202,335)
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The accompanying notes are an integral part of these unaudited
condensed financial statements
5
Kyto Biopharma, Inc.
Condensed Statements of Cash Flows
Unaudited
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For the Nine Months Ended December 31,
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2016
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2015
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Cash Flows from Operating Activities:
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Net
loss
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$(70,135)
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$(66,521)
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Adjustment
to reconcile net loss to net cash used in
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Operating
activities:
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Changes
in operating liabilities:
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Accrued
liability related party
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(7,500)
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30,000
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Accrued
liabilities
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48,000
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13,000
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Accounts
payable and accrued expenses
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326
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486
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Net Cash Used in Operating Activities
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(29,309)
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(23,035)
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Cash Flows from Investing Activities:
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Net Cash Used in Investing Activities
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-
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-
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Cash Flows from Financing Activities:
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Loan
proceeds from related parties, net
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29,286
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23,062
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Net Cash Provided by Financing Activities
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29,286
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23,062
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Net
(decrease) or increase in Cash and Cash Equivalents
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(23)
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27
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Cash
and Cash Equivalents at Beginning of Period
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32
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2
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Cash and Cash Equivalents at End of Period
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$9
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$29
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Supplemental
Disclosure of Cash Flow Information:
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Cash
paid for:
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Interest
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$-
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$-
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Taxes
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$-
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$-
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The accompanying notes are an integral part of these unaudited
condensed financial statements
6
KYTO BIOPHARMA, INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
December 31, 2016
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.
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 2016 include, the valuation allowance
of deferred tax assets.
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 December 31,
2016 and March 31, 2016, respectively.
CONCENTRATIONS
The Company maintains its cash in bank deposit accounts, which, at
times, may exceed federally insured limits. As of December 31,
2016, the Company did not have any deposits in excess of federally
insured limits. The Company has not experienced any losses in such
accounts through December 31, 2016 and March 31, 2016,
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.
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, 2016 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 December 31,
2016, have been included. The results of operations for interim
periods are not necessarily indicative of the results for a full
year.
7
KYTO BIOPHARMA, INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
December 31, 2016
NOTE 3 – GOING CONCERN
As reflected in the accompanying unaudited condensed financial
statements, the Company has a working capital deficiency of
$202,335, a deficit accumulated of $32,266,125, and a stockholders'
deficit of $202,335 as of December 31, 2016. The ability of the
Company to continue as a going concern is dependent on the
Company's ability to devise a strategy and produces a business
plan. 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.
NOTE 5 –RELATED PARTY TRANSACTIONS
(A)
– Loan
Payable- Related Party
During
the nine months ended December 31, 2016, the Company received a net
loan from a related party in the amount of $29,286. At December 31,
2016 and March 31, 2016, the Company owed $65,018 and $35,732
respectively to a related party 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.
(B)
– Accrued
liabilities -Related Party
The
Company leases office space and administrative services from a
related party principal stockholder. Rent and administrative
expense for the three months ended December 31, 2016 and 2016 was
$10,000 and $10,000 and for the nine months ended December 31, 2016
and 2015, was $30,000, and $30,000, respectively and is included in
general and administrative expense in the accompanying statements
of operations.
Directors
fees are also included in Accrued liabilities – related
parties. Directors fees for the three months ended December 31,
2016 and 2016 was $6,000 and $6,000, respectively and for the nine
months ended December 31, 2016 and 2015 was $18,000 and $18,000,
respectively and is included in general and administrative expense
in the accompanying statements of operations. As of December 31,
2016, and March 31, 2016, the remaining balance in the accrued
liabilities-related party account for the above services was
$132,000 and $84,000, respectively.
8
KYTO BIOPHARMA, INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
December 31, 2016
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 shares 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 the related party
loan payable. Convertible preferred stock may be converted into
common shares at the rate of $0.45 per common share. Convertible
preferred stock bears dividend at a rate of five percent per annum.
Preferred convertible stock has the same voting rights as common
stock. On September 12, 2014, the convertible stocks were converted
to common stock at a price of $0.05 per share. As of December 31,
2016, and March 31, 2016, there are no preferred shares of the
Company issued and outstanding.
(B)
–
COMMON STOCK
As of December 31, 2016, and March 31, 2016, 3,139,747 shares of
the Company’s common stock were issued and
outstanding.
NOTE 7–
SUBSEQUENT EVENT
Management evaluated all activities of the Company through the
issuance date of the Company's interim unaudited condensed
financial statements and concluded that no subsequent events have
occurred that would require adjustments or disclosure into the
interim unaudited condensed financial statements.
9
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 29, 2016 on our March 31, 2016 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 December 31, 2016 the
Company’s net loss attributable to common shareholders
increase by $3,739 to $31,079 compared to a net loss of $27,340 for
the three months ended December 31, 2015.
For the nine months ended December 31, 2016 the Company’s net
loss attributable to common shareholders decreased by $3,614 to
$70,135 compared to a net loss of $66,521 for the nine months ended
December 31, 2015.
Liquidity and Capital Resources
The Company had working capital deficits of $202,335 as of
December 31,2016, and $132,200 as of March 31, 2016. Cash was
$9 as of December 31,2016, and $32 as of March 31,
2016.
Cash from operating activities
The
Company’s net cash used in operations increased by $6,274 to
$29,309 for the nine months ended December 31, 2016 compared to net
cash used in operations of $23,035 for the nine months ended
December, 2015.
Cash from financing activities
The Company’s net cash flows from financing activities
increased by $6,224 to $29,286 for the nine months ended December
31, 2016 compared to cash flows from financing activities of
$23,062 for the nine months ended December 31, 2015.
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.
10
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 December 31, 2016 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 December 31, 2016.
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 December 31, 2016, 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.
11
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
12
INDEX TO EXHIBITS
EXHIBIT NUMBER
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DESCRIPTION
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3(i)(a)
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Articles of Incorporation of Kyto Biopharma, Inc.*
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3(i)(b)
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Articles of Amendment changing name to Kyto Biopharma,
Inc.*
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3(ii)
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Bylaws of Kyto Biopharma, Inc.*
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10.1
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Research collaboration agreement between The Research Foundation of
State University of New York and B. Twelve Ltd. (Kyto Biopharma,
Inc.) [dated August 19, 1999]**
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10.2
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Collaborative Research Agreement to synthesize new vitamin B12
analogs signed between the Company and New York University [dated
November 11, 1999]**
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10.3
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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]**
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10.4
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Debt Settlement Agreement and Put Option (dated November 2002)
between Kyto Biopharma, Inc. and New York
University.**
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10.5
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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]. **
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10.6
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Services Agreement between Kyto Biopharma, Inc. and Gerard Serfati
[dated November 1, 2004]***
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Section 302 Certification of principal executive
officer.**
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Section 302 Certification of principal financial and accounting
officer.**
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Certification pursuant to 18 U.S.C. Section 1350 as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
**
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———————
*
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.
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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.
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Kyto Biopharma, Inc.
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Date: February 14, 2017 |
By:
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/s/
Georges
Benarroch
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Georges Benarroch |
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Chief Executive Officer, principal executive officer,
principal
financial and accounting officer
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