SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 6-K
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 or 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
DateAugust 26, 2008______________________________
BIOTECH HOLDINGS LTD. _
(Exact name of Registrant as specified in its charter)
#160 - 3751 Shell Road, Richmond, British Columbia, Canada, V6X 2W2 _
(Address of principal executive offices)
Commission file number0-29108 _
(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F)
Form 20-F Yes Form 40-F No
(Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.)
No
Biotech Holdings Ltd.
Filed in this Form 6-K
Documents index
1. First Quarter Financial Statements as at June 30, 2008
SIGNATURES
Pursuant to 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.
BIOTECH HOLDINGS LTD.
By: /s/ Robert Rieveley
Name: Robert Rieveley
Title: Chief Executive Officer
Date: August 26, 2008
BiO
BIOTECH HOLDINGS LTD.
FIRST QUARTER REPORT
JUNE 30, 2008
Head Office:
Suite 160 - 3751 Shell Road
Richmond, British Columbia
Canada V6X 2W2
Telephone: (604) 295-1119
Facsimile: (604) 295-1110
Toll Free: 1-888-216-1111
Website:www.biotechltd.com
E-mail:biotech@direct.ca
Shares Listed
NASD OTC-BB: BIOHF
Frankfurt Stock Exchange: 925970.F
Biotech Holdings Ltd.
Notice to Shareholders
For the Three Months June 30, 2008
Responsibility for Financial Statements
The accompanying financial statements for Biotech Holdings Ltd. have been prepared by management in accordance with Canadian generally accepted accounting principles. The most significant accounting principles are set out in the March 31, 2008 audited financial statements. Only changes in accounting information have been disclosed in these financial statements. Estimates and approximations have been made using careful judgement. Recognizing that the Company is responsible for both the integrity and objectivity of the financial statements, management is satisfied that these financial statements have been presented fairly.
Auditor Involvement
The auditor of Biotech Holdings Ltd. has not performed a review of the unaudited financial statements for the three months ended June 30, 2008 and June 30, 2007.
Forward-looking Information
Forward looking statements in the management discussion and analysis ("MD&A") and the Report to Shareholders, including statements regarding the Company`s business which are not based on historical facts, are made pursuant to the "safe harbour" provisions of the United States Securities Litigation Reform Act of 1995 and pursuant to Form 51-102F1 of National Instrument 51-102 as implemented in rules, regulations, and policies of Canadian securities regulatory authorities. These Quarterly Financial Statements contain certain forward-looking statements and information relating to Biotech Holdings Ltd. that are based upon the beliefs of its management as well as assumptions made by and information currently available to the Company. When used in this document, the words "anticipate", "believe", "estimate" and "expect" and similar expressions, as they relate to the Company or its management, a re intended to identify forward-looking statements. Such statements reflect the current views of the Company with respect to future events and are subject to certain risks, uncertainties and assumptions. Many factors could cause the actual results, performance or achievements of the Company to be materially different from any future results, performances or achievements that may be expressed or implied by such forward-looking statements.
Financial Statement Basis of Presentation
These consolidated financial statements have been prepared in accordance with the Canadian Institute of Chartered Accountants (CICA) Standards for interim financial statements and with Canadian generally accepted accounting principles applicable to a going concern. Accordingly, these financial statements reflect the carrying value of assets and liabilities, the reported revenues and expenses and balance sheet classifications on the basis that the going concern assumption is appropriate. If this assumption were not appropriate, adjustments could be material. Interim financial statements do not include all the disclosure requirements for annual financial statements and, accordingly, should be read in conjunction with the Company`s audited financial statements dated March 31, 2008.
Biotech Holdings Ltd.
Consolidated Balance Sheet
as at | June 30 | Mar 31, | |
2008 | 2008 | ||
(unaudited) | (audited) | ||
ASSETS | |||
Current Assets | |||
Cash | $ 36,620 | $ 14,854 | |
Accounts receivable - net | 146,682 | 165,431 | |
Inventory | 2,844 | 4,657 | |
186,146 | 184,942 | ||
Property & Equipment | |||
Continuing operations | 99,712 | 102,492 | |
Held for resale | 1 | 1 | |
Technology Interests | 1 | 1 | |
$ 285,860 | $ 287,436 |
LIABILITIES & SHAREHOLDERS` (DEFICIENCY)
LIABILITIES | |||
Current | |||
Accounts payable and | |||
accrued liabilities | $ 1,342,357 | $ 1,350,529 | |
Due to related parties (note 5) | 2,989,316 | 2,775,201 | |
4,331,673 | 4,125,730 | ||
Note payable | 224,343 | 224,343 | |
4,556,016 | 4,350,073 | ||
SHAREHOLDERS` (DEFICIENCY) | |||
Share Capital | |||
Common shares | 25,734,583 | 25,734,583 | |
Convertible Preferred Shares | 1,380,691 | 1,380,691 | |
Contributed Surplus | 1,504,505 | 1,502,062 | |
Deficit | (32,889,935) | (32,679,973) | |
(4,270,156) | (4,062,637) | ||
$ 285,860 | $ 287,436 | ||
Interim financial statements do not include all the disclosure requirements for annual financial statements and, accordingly, should be read in conjunction with the Company`s audited financial statements for the year ended March 31, 2008.
Biotech Holdings Ltd.
Consolidated Statements of Operations and Deficit
3 Months to | 3 Months to | |
June 30 | June 30 | |
2008 | 2007 | |
(unaudited) | (unaudited) | |
Sales | $ 58,215 | $ 104,906 |
Cost of Sales | 24,947 | 33,273 |
Gross Profit | 33,268 | 71,633 |
Operating Expenses | ||
General, administrative | ||
and selling | 148,433 | 161,985 |
Interest - current debt and other | 55,352 | 37,487 |
Product marketing costs | 14,017 | 60,596 |
Professional fees | 12,848 | 226 |
Office rent, utilities and maintenance | 12,216 | 10,105 |
Amortization | 2,780 | 3,193 |
Stock-based compensation | 2,443 | 189,204 |
Foreign exchange | (4,859) | 16,252 |
243,230 | 479,048 | |
Loss for the Period | (209,962) | (407,415) |
Deficit, beginning of period | (32,679,973) | (31,273,810) |
Deficit, end of period | (32,889,935) | (31,681,225) |
Basic and Fully Diluted Loss per | ||
Common Share | ||
From continuing operations | (0.00) | (0.01) |
From discontinued operations | 0.00 | 0.00 |
Biotech Holdings Ltd.
Consolidated Statements of Cash Flow
3 Months to | 3 Months to | |
June 30 | June 30 | |
2008 | 2007 | |
(unaudited) | (unaudited) | |
Operating Activities: | ||
Loss for the period | $ (209,963) | $ (407,415) |
Add (Deduct): | ||
Amortization | 2,780 | 3,193 |
Stock-based compensation | 2,443 | 189,204 |
Accrued Interest - Related Parties | 54,338 | 37,070 |
(150,402) | (177,948) | |
Add (Deduct) changes in: | ||
Accounts Receivable | 18,749 | 4,139 |
Inventory | 1,813 | 5,608 |
Accounts Payable | (8,172) | (17,370) |
(138,012) | (185,571) | |
Financing Activities: | ||
Due to related parties | 159,778 | 201,017 |
159,778 | 201,017 | |
Investing Activities: | ||
- | - | |
- | - | |
Increase (Decrease) in Cash | 21,766 | 15,446 |
Cash, beginning of period | 14,854 | 23,358 |
Cash, end of period | $ 36,620 | $ 38,804 |
Biotech Holdings Ltd.
Notes to the Consolidated Interim Financial Statements
June 30, 2008
1. Nature of business and ability to continue operations
The Company`s business focus remains the development of distribution of the Company`s Type II Diabetes drug, particularly in Mexico and Latin America.
These consolidated financial statements are stated in Canadian dollars and have been prepared in accordance with generally accepted accounting principles in Canada, on a going-concern basis, which contemplates the realization of assets and the liquidation of liabilities in the ordinary course of business. They do not include any adjustments to the recoverability and classification of recorded asset amounts and liabilities that might be necessary should the Company be unable to continue as a going concern. The Company has incurred recurring operating losses and has an accumulated deficit of $32,925,822 and a Shareholders` Deficiency of $4,306,043 at June 30, 2008. These factors, among others, raise substantial doubt about the Company`s ability to be able to continue as a going concern. The future of the Company and the realization of its asset values will depend upon the Company`s ability to obtain adequate financing and continuing support from shareholders and creditors including refin ancing and to attain profitable operations.
Management plans to raise debt and equity capital on a private placement basis to finance the operating and capital requirements of the Company. It is management`s intention to continue using debt and equity to finance planned capital expansion and initial market development in Latin America and other markets and operations until such time as the Company`s operations are self-sustaining.
While the Company is expending its best efforts to achieve the above plans, there is no assurance that any such activity will generate sufficient funds for operations.
2. Basis of presentation and summary of significant accounting policies
The Summary of Significant Accounting Policies found in the audited financial statements dated March 31, 2008 should be read in conjunction with these interim financial statements. These interim financial statements follow the same accounting policies and methods of their application as the most recent annual financial statements. The most significant accounting policies are as follows:
Revenue Recognition
The Company`s principal revenue will be derived from its Type II diabetes drug currently distributed in Mexico. The Company has entered into agreements with two non-related companies in Mexico. The first company manufactures and packages the tablets from a pre-mix of active ingredients manufactured by the Company in Canada. The second company markets the drug. The Mexican operating company,Pharmaroth Latin America S.A. de C.V., also markets the drug.
Revenue from product sales will be recognized upon the delivery of the product to a retailer or final consumer when persuasive evidence of an arrangement exists, the price is fixed or determinable and collection is reasonably assured and the Company has no future performance obligations under any licensing agreement or other significant post-delivery obligations.
Inventory
Inventory is valued at the lower of cost and market. The market value is determined based on the net realizable value of finished goods and the replacement cost for raw materials. Cost is determined on a first-in, first-out basis.
Biotech Holdings Ltd.
Notes to the Consolidated Interim Financial Statements (Continued)
June 30, 2008
3. Share Capital
Authorized
The Company is authorized to issue an unlimited number of Series Convertible Preferred shares and Common shares without par value. The preferred shares are voting and are convertible into Common shares on a 1:1 basis. They have a cumulative cash dividend of 8% of the original amount contributed plus accrued interest.
Issued and outstanding | Price per | Number of | $ | Number of | $ | |
Share | Common | Common | Preferred | Preferred | ||
$ | Shares | Shares | Shares | Shares | ||
Balance March 31, 2007 | 92,229,512 | 25,733,318 | 13,806,907 | 1,380,691 | ||
Stock options exercised for cash | $0.10 | 8,600 | 860 | |||
Options exercised for which stock-based | ||||||
compensation has been recorded | 405 | |||||
Balance Mar 31 08 to June 30, 2008 | 92,238,112 | 25,734,583 | 13,806,907 | 1,380,691 |
Securities issued in the period:
Private Placement and Warrants Granted and exercised in the period
No private placements or warrants were either granted or exercised during the quarter ended June 30, 2008.
Outstanding Warrants to Purchase Common Shares as of June 30, 2008
No common share warrants were outstanding on June 30, 2008.
Outstanding Warrants to Purchase Preferred Shares
No preferred share warrants were outstanding on June 30, 2008.
Stock Options Exercised in the Period
No stock options were exercised during the quarter ended June 30, 2008.
Stock Options Granted in the Period
In April, 2008, the Company announced that it had granted a total of 1,838,600 options allocated among officers, directors, employees and consultants. The granted options are divided among officers and directors (1,340,000), employees (360,000) and consultants (138,600). All of the options have an exercise price of $.10 per share, vest October 31, 2008 and expire March 31, 2010.
In July, 2008 (subsequent to the quarter end), the Company announced that it had granted a total of 1,225,000 replacement options for 1,432,400 options which had expired or been cancelled. The granted options are divided among officers and directors (990,000), employees (40,000) and consultants (195,000). All of the options have an exercise price of $.10 per share, vest December 11, 2008 and expire July 10, 2010
The stock options described above comply with the Stock Option Plan approved by the shareholders on September 30, 2005.
Biotech Holdings Ltd.
Notes to the Consolidated Interim Financial Statements (Continued)
June 30, 2008
3. Share Capital (continued)
Outstanding Stock Options as at June 30, 2008:
Outstanding Options | |||||
Total | Directors | ||||
Exercise price and expiry date | Number | & | Employees | Consultants | |
Outstanding | Officers | ||||
$0.10 USD Nov. 23, 2008 | 275,000 | 275,000 | |||
$0.11 Apr. 12, 2009 | 4,834,000 | 4,110,000 | 410,000 | 314,000 | |
$0.10 Mar. 31, 2010 | 1,838,600 | 1,340,000 | 360,000 | 138,600 | |
Outstanding as at June 30, 2008 | 6,947,600 | 5,450,000 | 1,045,000 | 452,600 |
|
A breakdown of outstanding options as at June 30, 2008 to Directors and Officers was as follows:
Grant Date | 12-Apr-07 | 1-Apr-08 | Total | ||
Exercise Date | 12-Oct-07 | 31-Oct-08 | |||
Expiry Date | 12-Oct-09 | 31-Mar-10 | |||
Option Price | $0.11 | $0.10 | |||
Cheryl Rieveley, Director | 340,000 | 120,000 | 460,000 | ||
Gale Belding, Director | 430,000 | 120,000 | 550,000 | ||
Johan de Rooy, Director | 360,000 | 120,000 | 480,000 | ||
Art Cowie, Director | 150,000 | 420,000 | 570,000 | ||
Robert Rieveley Director & CEO | 2,660,000 | 500,000 | 3,160,000 | ||
Lorne Brown, CFO | 170,000 | 60,000 | 230,000 | ||
Total | 4,110,000 | 1,340,000 | 5,450,000 |
4. Stock based compensation
Using the fair value method to value stock options, $2,443 was recorded to stock-based compensation expense. This amount was determined using a Black-Scholes option pricing model assuming no dividends are to be paid, vesting occurring on the date of grant, exercising on the last day before expiry, a weighted average volatility of the Company`s share price of 58% and a weighted average risk free rate of 3.23%. The total cost of the stock-based compensation expense is being recognized over the period from the grant date to the vesting date.
Biotech Holdings Ltd.
Notes to the Consolidated Interim Financial Statements (Continued)
June 30, 2008
5.Related party transactions
Due to Related Parties
Jun. 30, 2008 | Mar 31, 2008 | ||||
a) | Unsecured | ||||
(i) Notes payable to RCAR Investment Ltd., a company controlled by the Company`s president, are unsecured, payable on demand and bear interest at 8% per annum compounded annually. During the period ended June 30, 2008, $6,445 in interest was accrued. |
|
$ 328,716 |
$ 322,271 | ||
(ii) Amounts payable to a Director are unsecured, payable on demand and bear no interest. | 49,194 | 28,996 | |||
(iii) Amounts payable to companies controlled by a Director are unsecured, payable on demand and bear no interest. | 13,768 | 9,189 | |||
391,678 | 360,456 |
b)Secured
Notes payable bearing interest at the rate of 8% per annum compounded annually and due on demand. Collateralized by a general security agreement providing a charge over the assets of the Company. | |||||
During the 3 months ended June 30, 2008, the notes | |||||
were increased by advances of $135,000 | |||||
During the period, interest expense of $47,893 was accrued. | 2,597,638 | 2,414,745 | |||
2,597,638 | 2,414,745 | ||||
Total | $ 2,989,316 | $ 2,775,201 |
Amounts paid to related parties were based on exchange amounts which represented the amounts agreed upon by the related parties. No cash compensation is paid to directors in their capacity as directors. Amounts paid or payable to related parties include:
Management fees paid and accrued to an officer | $ 36,000 | |
Salaries & Benefits | $ 46,302 | |
Interest accrued on Notes Payable to related parties | $ 54,338 | |
Services provided by Companies controlled by Insiders | $ 22,051 |
6. General Administrative and Selling Expenses:
A more detailed breakdown of this operating expense category is as follows:
Quarter Ended | ||
June 30, 2008 | ||
Salaries and Benefits | $ 72,123 | |
Management Fees | 34,286 | |
Investor Relations | 20,000 | |
Office Expenses | 14,690 | |
Communication, Travel and Promotion | 6,513 | |
Stock Exchange and Transfer Agent Fees | 822 | |
Bad Debts | 0 | |
Total | $ 148,434 |
