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 June 30,
2017
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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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 August 14,
2017
KYTO BIOPHARMA, INC.
For the quarterly period ended June 30, 2017
INDEX
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PART I. FINANCIAL INFORMATION
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Item 1.
Financial Statements
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3
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Condensed
Balance Sheets as of June 30, 2017 (Unaudited) and March 31,
2017
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3
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Unaudited
Condensed Statements of Operations for the Three
Months Ended June 30, 2017 and 2016
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4
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Unaudited
Condensed Statement of Stockholders’ Deficit for the Three
Months Ended June 30, 2017
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5
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Unaudited
Condensed Statements of Cash Flows for the Three Months Ended June
30, 2017 and 2016
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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.
Management’s Discussion and Analysis of Financial Condition
and Results of Operations.
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10
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Item 3.
Quantitative and Qualitative Disclosures About Market
Risk.
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10
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Item 4.
Controls and Procedures.
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11
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PART II. OTHER INFORMATION
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Item 1.
Legal Proceedings.
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12
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Item 1A.
Risk Factors.
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12
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Item 2.
Unregistered Sales of Equity Securities and Use of
Proceeds.
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12
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Item 3.
Defaults Upon Senior Securities.
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12
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Item 4.
Mine Safety Disclosures
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12
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Item 5.
Other Information
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12
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Item 6.
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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June 30,
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March 31,
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2017
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2017
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(Unaudited)
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ASSETS
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Current Assets
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Cash
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$45
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$-
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Total Current Assets
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45
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-
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Total Assets
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$45
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$-
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LIABILITIES AND
STOCKHOLDERS' DEFICIT
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Current Liabilities
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Accounts
payable and accrued expenses
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$-
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$22
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Accrued
liabilities
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5,000
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10,000
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Accrued
liabilities - related party
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164,000
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148,000
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Loans
payable - related party
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76,121
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68,107
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Total Current Liabilities
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245,121
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226,129
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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 June 30, 2017 and March 31 2017,
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 June 30, 2017 and March 31 2017,
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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(32,308,866)
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(32,289,919)
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Total Stockholders' Deficit
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(245,076)
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(226,129)
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Total Liabilities and Stockholders' Deficit
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$45
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$-
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3
Kyto Biopharma, Inc.
Condensed Statements of Operations
(Unaudited)
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For the Three Months Ended
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June 30
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2017
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2016
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Operating Expenses
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General
and administrative
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$18,947
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$19,558
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Total Operating Expenses
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18,947
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19,558
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Loss from Operations
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18,947
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19,558
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Net Loss before taxes
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(18,947)
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(19,558)
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Net
Income (Tax) Benefit
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-
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-
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Net Loss
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$(18,947)
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$(19,558)
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Weighted
average number of shares outstanding
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basic
and diluted
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3,139,747
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3,139,747
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Net
loss per share - basic and diluted
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$(0.01)
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$(0.01)
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4
Kyto Biopharma, Inc.
Condensed Statement of Stockholder's Deficit
For the Three Months Ended June 30, 2017
(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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$0.0001 par value
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Paid - in
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Shares
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Amount
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Shares
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Amount
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Capital
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Deficit
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Total
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Balance, March 31, 2017
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-
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$-
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3,139,747
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$314
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$32,063,476
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$(32,289,919)
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$(226,129)
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Net
Loss
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-
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(18,947)
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(18,947)
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Balance, June 30, 2017
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-
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$-
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3,139,747
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$314
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$32,063,476
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$(32,308,866)
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$(245,076)
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5
Kyto Biopharma, Inc.
Condensed Statements of Cash Flows
(Unaudited)
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Fo the Three Months Ended June 30,
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2017
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2016
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Cash Flows from Operating Activities:
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Net
loss
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$(18,947)
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$(19,558)
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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
liabilities - related party
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16,000
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10,000
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Accrued
liabilities
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(5,000)
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(1,500)
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Accounts
payable and accrued expenses
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(22)
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524
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Net Cash Used in Operating Activities
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(7,969)
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(10,534)
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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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8,014
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10,505
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Net Cash Provided by Financing Activities
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8,014
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10,505
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Net
increase (decrease) in Cash and Cash Equivalents
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45
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(29)
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Cash
and Cash Equivalents at Beginning of Period
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-
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32
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Cash and Cash Equivalents at End of Period
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$45
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$3
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Supplemental
Disclosure of Cash Flow Information:
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Cash
paid for:
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Interest
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$-
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$-
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Income taxes
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$-
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$-
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6
KYTO BIOPHARMA, INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
June 30, 2017
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 in
the development stage as it is in the process of looking at a
number of strategies to become active. Once it has settled on the
strategy, the Company will develop a plan for an acquisition and
the means to achieve its goal.
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 2017 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 June 30, 2017
and March 31, 2017, respectively.
CONCENTRATIONS
The Company maintains its cash in bank deposit accounts, which, at
times, may exceed federally insured limits. As of June 30, 2017,
the Company did not have any deposits in excess of federally
insured limits. The Company has not experienced any losses in such
accounts through June 30, 2017 and March 31, 2017,
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.
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.
7
KYTO BIOPHARMA, INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
June 30, 2017
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, 2017 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 June 30,
2017, 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
$245,076, a deficit accumulated of $32,308,866, and a stockholders'
deficit of $245,076 as of June 30, 2017. 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)
– Loans
Payable- Related Party
During
the three months ended June 30, 2017, the Company received a net
loan from a related party in the amount of $8,014. At June 30, 2017
and March 31, 2017, the Company owed $76,121 and $68,107,
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 June 30, 2017 and 2016 was
$10,000 and $10,000, 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 June 30, 2017
and 2016 was $6,000 and $6,000, respectively and is included in
general and administrative expense in the accompanying statements
of operations. As of June 30, 2017 and March 31, 2017, the
remaining balance in the accrued liabilities-related party account
for the above services was $164,000 and $148,000,
respectively.
8
KYTO BIOPHARMA, INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
June 30, 2017
NOTE 6– EQUITY
(A)
–PREFERRED STOCK
As of
June 30, 2017 and March 31, 2017, there are 2,000,000 shares
authorized and no preferred shares of the Company issued and
outstanding.
(B)
–
COMMON STOCK
As of June 30, 2017 and March 31, 2017, 3,139,747 shares of the
Company’s common stock were issued and
outstanding.
NOTE 7–
SUBSEQUENT EVENTS
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
KYTO BIOPHARMA, INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
June 30, 2017
ITEM 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS
AND RESULTS OF OPERATIONS
PLAN OF OPERATIONS
The report of our Independent Registered Public Accounting firm
dated June 29, 2017 on our March 31, 2017 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 June 30, 2017 the Company’s net
loss attributable to common shareholders decreased by $611 to
$18,947 compared to a net loss of $19,558 for the three months
ended June 30, 2016.
Liquidity and Capital Resources
The Company had working capital deficits of $245,076 as of
June 30, 2017, and $226,129 as of March 31, 2017. Cash was $45
as of June 30, 2016, and Nil as of March 31,
2017.
Cash from operating activities
The Company’s net cash used in operations decreased by $2,565
to $7,969 for the three months ended June 30, 2017 compared to net
cash used in operations of $10,534 for the three months ended June
30, 2016.
Cash from financing activities
The Company’s net cash flows from financing activities
decreased by $2,491 to $8,014 for the three months ended June 30,
2017 compared to cash flows from financing activities of $10,505
for the three months ended June 30, 2016.
The Company’s plan of operations 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 June 30, 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 June 30, 2017.
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 June 30, 2017, 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
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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31.1
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Section 302 Certification of principal executive
officer.**
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31.2
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Section 302 Certification of principal financial and accounting
officer.**
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32.1
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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.
12
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: August 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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