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 December 31, 2011
or
¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
KYTO BIOPHARMA, INC.
(Exact name of registrant as specified in its charter)
FLORIDA | 000-50390 | 65-1086538 | ||
(State or Other Jurisdiction | (Commission | (I.R.S. Employer | ||
of Incorporation) | File Number) | Identification No.) |
B1-114 Belmont Avenue Toronto, Ontario Canada M5R 1P8
(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). þ Yes ¨ No
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
12,998,482 Common Shares - $0.0001 Par Value - as of February 10, 2012
KYTO BIOPHARMA, INC. AND SUBSIDIARY
(A For the quarterly period ended December 31, 2011)
INDEX
PART I. FINANCIAL INFORMATION | |||||
Item 1. | Financial Statements | ||||
Condensed Consolidated Balance Sheets as of December 31, 2011 (Unaudited) and March 31, 2011 | 3 | ||||
Unaudited Condensed Consolidated Statements of Operations for the Three and Nine Months Ended December 31, 2011 and 2010 | 4 | ||||
Unaudited Condensed Consolidated Statement of Stockholders’ Deficit for Nine Months ended December 31, 2011 | 5 | ||||
Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended December 31, 2011 and 2010 | 6 | ||||
Notes To Unaudited Condensed Consolidated 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. | 11 | |||
Item 4. | Controls and Procedures. | 12 | |||
PART II. OTHER INFORMATION | |||||
Item 1. | Legal Proceedings. | 13 | |||
Item 1A. | Risk Factors. | 13 | |||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds. | 13 | |||
Item 3. | Defaults Upon Senior Securities. | 13 | |||
Item 4. | (Removed and Reserved) | 13 | |||
Item 5. | Other Information | 13 | |||
Item 6. | Exhibits | 13 | |||
Signatures | 15 |
2
ITEM 1. | FINANCIAL STATEMENTS |
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, | March 31, | |||||||
2011 | 2011 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Current Assets | ||||||||
Cash | $ | 1,669 | $ | 863 | ||||
Total Current Assets | 1,669 | 863 | ||||||
Total Assets | $ | 1,669 | $ | 863 | ||||
LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
Current Liabilities | ||||||||
Accounts payable | $ | 1,376 | $ | 12,760 | ||||
Accrued liabilities | 20,167 | 32,667 | ||||||
Accrued liabilities - related party | 59,000 | 29,000 | ||||||
Accrued interest payable - related party | 71,439 | 66,139 | ||||||
Dividends Payable - preferred convertible stock | 97,011 | 76,137 | ||||||
Loan payable-related party | 1,156,910 | 1,066,096 | ||||||
Note payable-related party | 100,000 | 100,000 | ||||||
Total Current Liabilities | 1,505,903 | 1,382,799 | ||||||
Commitments and Contingencies | ||||||||
Stockholders' Deficit | ||||||||
Preferred convertible stock, $1.00 par value, 1,000,000 shares | ||||||||
authorized, 473,624 issued and outstanding as of | ||||||||
December 31, 2011 and March 31, 2011 | 473,624 | 473,624 | ||||||
Common stock, $0.0001 par value, 25,000,000 shares | ||||||||
authorized, 12,998,482 issued and outstanding as of | ||||||||
December 31, 2011 and March 31, 2011 | 1,300 | 1,300 | ||||||
Additional paid-in capital | 15,950,184 | 15,904,542 | ||||||
Accumulated deficit | (17,752,159 | ) | (17,584,219 | ) | ||||
Accumulated other comprehensive loss | (177,183 | ) | (177,183 | ) | ||||
Total Stockholders' Deficit | (1,504,234 | ) | (1,381,936 | ) | ||||
Total Liabilities and Stockholders' Deficit | $ | 1,669 | $ | 863 |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For The Three Months Ended | For The Nine Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Operating Expenses | ||||||||||||||||
General and administrative | 13,243 | 43,861 | 96,114 | 140,935 | ||||||||||||
Total Operating Expenses | $ | 13,243 | $ | 43,861 | $ | 96,114 | $ | 140,935 | ||||||||
Loss from Operation | $ | 13,243 | $ | 43,861 | $ | 96,114 | $ | 140,935 | ||||||||
Other Income (Expenses) | ||||||||||||||||
Interest expense | (17,420 | ) | (1,711 | ) | (50,943 | ) | (5,080 | ) | ||||||||
Loss on debt forgiveness | - | - | - | (43,690 | ) | |||||||||||
Foreign currency transaction gain | 4 | - | (8 | ) | (10 | ) | ||||||||||
Total Other Income (Expense), net | (17,417 | ) | (1,711 | ) | (50,951 | ) | (48,780 | ) | ||||||||
Net Loss before taxes | $ | (30,660 | ) | $ | (45,572 | ) | $ | (147,065 | ) | $ | (189,715 | ) | ||||
Net Income (Tax) Benefit | $ | - | $ | - | $ | - | $ | - | ||||||||
Net Loss | $ | (30,660 | ) | $ | (45,572 | ) | $ | (147,065 | ) | $ | (189,715 | ) | ||||
Preferred Stock Dividends | (7,045 | ) | (6,704 | ) | (20,875 | ) | (19,863 | ) | ||||||||
Net Loss Attributed to common shareholders | $ | (37,705 | ) | $ | (52,276 | ) | $ | (167,940 | ) | $ | (209,578 | ) | ||||
Comprehensive Income | ||||||||||||||||
Foreign currency translation gain | - | - | - | 50 | ||||||||||||
- | - | - | 50 | |||||||||||||
Total Comprehensive Loss | $ | (37,705 | ) | $ | (52,276 | ) | $ | (167,940 | ) | $ | (209,528 | ) | ||||
Weighted average number of shares outstanding | ||||||||||||||||
during the year - basic and diluted | 12,998,482 | 12,998,482 | 12,998,482 | 12,998,482 | ||||||||||||
Net loss per share - basic and diluted | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.01 | ) | $ | (0.01 | ) | ||||
Net loss per share attributable to Common Shares holders- basic and diluted | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.01 | ) | $ | (0.02 | ) |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
For the Nine Months Ended December 31, 2011
Accumulated | ||||||||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||||||||
Preferred Stock | Common Stock | Additional | Accumulated | Comprehensive | ||||||||||||||||||||||||||||
$1.00 par value | $0.0001 par value | Paid - in | Deficit | Income | ||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | (Loss) | Total | ||||||||||||||||||||||||||
Balance, March 31, 2011 | 473,624 | $ | 473,624 | 12,998,482 | $ | 1,300 | $ | 15,904,542 | $ | (17,584,219 | ) | $ | (177,183 | ) | $ | (1,381,936 | ) | |||||||||||||||
Imputed Interest | - | - | - | - | 45,642 | - | - | 45,642 | ||||||||||||||||||||||||
Preferred Stock Dividends | - | - | - | - | - | (20,875 | ) | - | (20,875 | ) | ||||||||||||||||||||||
Net Loss | - | - | - | - | - | (147,065 | ) | - | (147,065 | ) | ||||||||||||||||||||||
Balance, December 31, 2011 | 473,624 | $ | 473,624 | 12,998,482 | $ | 1,300 | $ | 15,950,184 | $ | (17,752,159 | ) | $ | (177,183 | ) | $ | (1,504,234 | ) |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5
KYTO BIOPHARMA, INC. AND SUBSIDIARY
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the Nine Months Ended December 31 | ||||||||
2011 | 2010 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net loss | $ | (167,940 | ) | $ | (209,578 | ) | ||
Adjustment to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||
Interest Expense imputed on Related Party Loan | 45,642 | - | ||||||
Loans receivable from related party-written off | - | 43,689 | ||||||
Expenses Paid by Related Party on behalf of the company | 714 | - | ||||||
Changes in operating assets and liabilities: | ||||||||
Loan receivable | - | (43,689 | ) | |||||
Accounts payable and accrued expenses | (23,884 | ) | 6,941 | |||||
Related party accounts payable, accrued interest, and accrued liabilities | 56,174 | 24,943 | ||||||
Net Cash Used in Operating Activities | (89,294 | ) | (177,694 | ) | ||||
Cash Flows from Investing Activities: | ||||||||
Purchase of property and equipment | - | - | ||||||
Net Cash Used in Investing Activities | - | - | ||||||
Cash Flows from Financing Activities: | ||||||||
Loan proceeds from related parties, net | 90,100 | 174,300 | ||||||
Net Cash Provided by Financing Activities | 90,100 | 174,300 | ||||||
Effect of Exchange Rate on Cash | - | 50 | ||||||
Net Increase (decrease) in Cash and Cash Equivalents | 806 | (3,344 | ) | |||||
Cash and Cash Equivalents at Beginning of Period | 863 | 4,444 | ||||||
Cash and Cash Equivalents at End of Period | $ | 1,669 | $ | 1,100 | ||||
Supplemental Disclosure of Cash Flow Information: | ||||||||
Cash paid for: | ||||||||
Interest | $ | - | $ | - | ||||
Taxes | $ | - | $ | - | ||||
Supplemental Disclosure of Non-Cash | ||||||||
Issued common shares for intangible assets | $ | - | $ | 160,570 |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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KYTO BIOPHARMA, INC. AND SUBSIDIARY
December 31, 2011
NOTE 1 – DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
Kyto Biopharma, Inc. was formed as a Florida corporation on March 5, 1999. B Twelve, Limited, Kyto Biopharma, Inc.'s wholly-owned Canadian subsidiary (collectively referred to as the "Company"), was also formed on March 5, 1999. On August 14, 2002, the parent 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 has been 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.
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the United States Securities and Exchange Commission for interim consolidated financial information. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of consolidated financial position and results of operations.
It is management's opinion, however, that all material adjustments (consisting of normal recurring adjustments) have been made, which are necessary for a fair consolidated financial statement presentation. The results for the interim period are not necessarily indicative of the results to be expected for the year.
For further information, refer to the audited consolidated financial statements and footnotes of the Company for the year ending March 31, 2011 included in the Company's Form 10-K.
The Company is exposed to foreign exchange rate fluctuations as the financial results of the company’s Canadian subsidiary are translated into U.S. dollars on consolidation. The functional currency of Kyto’s subsidiary is the Canadian dollar.
NOTE 2 – INTERIM REVIEW REPORTING
The accompanying unaudited condensed consolidated 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 consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's March 31, 2011 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 consolidated financial statements and the results of its operations for the interim period ended December 31, 2011, 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. AND SUBSIDIARY
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2011
NOTE 3 – GOING CONCERN
As reflected in the accompanying unaudited condensed consolidated financial statements, the Company has a working capital deficiency of $1,504,234, an accumulated deficit of $17,752,159 and a stockholders' deficit of $ 1,504,234 as of December 31, 2011. 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 consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
The Company 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 consolidated financial statements.
NOTE 5 –RELATED PARTY TRANSACTIONS
A) LOAN PAYABLE
As of December 31, 2011, the company owed $1,156,910 to a related party of the Company. During the nine months ended December 31, 2011, the Company borrowed $90,814 from a related party of the Company. The loan is non-interest bearing, unsecured, due on demand, does not follow any specific repayment terms and included in the loans payable- related party balance. As per ASC-835-30 “Imputation of Interest”, interest has been imputed @ 5%p.a. quarterly cumulative and $45,642 has been imputed and accrued as interest.
B) LOAN RECEIVABLE FROM RELATED PARTY (TPT)
In June 2009, two of the founders of the Company entered into a Standstill Agreement with the Clayton Foundation to license and commercialize from the Clayton Foundation for Research a portfolio of product candidates based on proprietary technology in part developed at the MD Anderson Cancer Center by Dr Michael Rosenblum, a former director of Kyto Biopharma Inc.
The services of two biotechnology specialized investment banks were secured in order to prepare a business plan, a valuation of the licenses and raise the funds necessary for the clinical development of targeted anticancer therapeutic proteins.
Through a new entity, Targeted Payload Therapeutics (TPT), funds advanced by a related party were advanced to TPT for the payment of the “Standstill Agreement”, fees related to the services of the 2 investment banks and expenses related to the transaction. The shareholders of TPT upon closing were: Kyto Biopharma Inc., Dr. Sagman, a director and one of the founders of the Company, the Clayton Foundation and scientists instrumental in bringing the transaction and continuing the development of the pipeline of products.
During the year ended March 31, 2010, Kyto loaned $265,931 to a newly founded US based biotechnology company, TPT. Amounts loaned under this note was non- interest bearing, unsecured, due on demand and do not follow any specific repayment terms. TPT was created to commercialize licensed technology which was developed at leading medical centers of excellence in the USA. Two of the founders of Kyto, Mr. Georges Benarroch and Dr. Uri Sagman, are also the founders of TPT. Kyto also loaned additional $43,689 during the quarter ending June 30, 2010.
8
KYTO BIOPHARMA, INC. AND SUBSIDIARY
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2011
On May 7, 2010 the Company announced the cancellation of its agreement with Targeted Payload Therapeutics Inc. ("TPT") and pursue any activities under Standstill Agreement. For the years ended March 31, 2011 and 2010, the Company had written off an impaired loan of $43,689 and $265,931, respectively, towards loss incurred as a consequence of cancellation of agreement with TPT.
C) ACCRUED LIBILITIES
The Company leases office space and administrative services from a related party principal stockholder and is included in general and administrative expense in the accompanying consolidated statements of operations. The Company allocates 50% of these amounts to rent expense. As of December 31, 2011, the remaining balance in the accrued liabilities-related party account for the above services was $59,000.
D) NOTES PAYABLE
During the year ended March 31, 2001, the Company entered into an agreement with a vendor, who is also a principal stockholder, for services totalling $200,000. On November 11, 2002, the Company and vendor mutually agreed that in lieu of the $200,000 payment, the vendor would accept 100,000 shares of the Company's common stock valued at $1.00 totalling $100,000. In addition, the Company also executed a $100,000 unsecured promissory note with the vendor. Under the terms of the promissory note, the obligation bears interest at prime plus 1% (4.25% at December 31, 2011). Interest is accrued and payable quarterly.
At December 31, 2011 and March 31, 2011, accrued interest totalled $71,439 and $66,139 respectively.
A) CONVERTIBLE PREFERRED STOCK
On May 24, 2007 the Company entered into an agreement with Credifinance Capital 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 Credifinance Capital 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 $0.45 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. Preferred dividend payable on the Convertible Preferred Stock as of December 31, 2011 is $97,011. As of December 31, 2011, 473,624 convertible preferred shares were outstanding.
B) COMMON STOCK
As of December 31, 2011, 12,998,482 common shares were issued and outstanding.
9
PLAN OF OPERATION
During the year ending March 31, 2011, the Company has continued to conduct a comprehensive review of its existing Intellectual Property portfolio with the assistance various IP legal firms and consultants. As a result of this review, the Company has elected to drop some of its patents while funding the remaining patents in full.
The efforts of the Company’s R&D have produced notable accomplishments with respect to the development of a novel cancer therapy through the regulation of Vitamin B12 uptake, an essential nutrient for cells. For the first time, the Company has conclusively identified the protein and the gene encoding the Vitamin B12 receptor. The work which has been done by SUNY on utilizing the Vitamin B12 pathway provides for several strategies aimed at preventing the proliferation of cancer cells.
On February 10, 2010 Kyto executed an “Executive Licensing Agreement” with The Research Foundation of State University of New York, “RFSUNY”, allowing Kyto to license certain technology surrounding the Human Transcobalamin Receptor. The licensing agreement is active until the expiry of the patent rights. The rights primarily relate to the patent: “Transcobalamin Receptor Polypeptides, Nucleic Acids, and Modulators Thereof, and Related Methods of Use in Modulating Cell Growth and Treating Cancer and Cobalamin Deficiency”.
The company announced that on June 29, 2010, the Canadian Patent Office issued the Patents for Canadian Patent Application No, 2187346, in the name of Receptor Modulating Agents and Methods Relating Thereto. The patentees are The University of Washington and Kyto Biopharma, Inc. The application was filed on April 7, 1995 and will remain in force for a period of 20 years from the filing date.
The report of our Independent Registered Public Accounting firm dated June 29, 2011 on our March 31, 2011 consolidated financial statements includes an explanatory paragraph indicating that there is substantial doubt about our ability to continue as a going concern due to substantial recurring losses from operations, cash used in operations, stockholders’ deficit and significant accumulated deficit and working capital deficit. Our ability to continue as a going concern will be determined by our ability to obtain additional financing and maintain operations. We do not currently 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.
In discussions with various collaborative partners, the Company has decided to pursue a specific antibody strategy with the assistance of RFSUNY and an outsourced third party vendor. The development of this antibody technology will be overseen by RFSUNY and is currently in the early stages of development. The Company does not yet have an estimate of the total costs associated with this development. As the Company has no current revenues from operations, management fully expects to incur additional liabilities in order to fund the development of this strategy over the next 9 months.
In December 2010, in view of the difficulty to raise funds for developing the company strategy, the board of directors decided to hire 2 biotechnology investment houses in order to help the company secure a joint venture partner or an outright sale of its Intellectual Property. A one year mandate was given to Bionest Partners based in Paris, France and to Health Care Capital Advisors based in Tampa, Florida. The mandate has expired on December 31st 2011 unfulfilled. As a result, management has decided to cease all development operations and is looking at possible ways to divest the biotechnology business from the company.
For the nine months ended December 31, 2011 the Company’s net loss attributable to common shareholders decreased by $41,638 to $167,940 compared to a net loss of $209,578 for the nine months ended December 31, 2010. The comprehensive loss for the nine months ended December 31, 2011 decreased by $41,588 to $167,940 compared to a comprehensive loss of $209,528 for the nine months ended December 31, 2010.
10
Liquidity and Capital Resources
The Company had working capital deficits of $1,504,234 as of December 31, 2011 and $1,381,936 as of March 31, 2011. Cash was $1,669 as of December 31, 2011 and $863 as of March 31, 2011.
Cash from operating activities
The Company’s cash used in operations decreased by $88,400 to $89,294 for the nine months ended December 31, 2011 compared to cash used in operations of $177,694 for the nine months ended December 31, 2010.
Cash from financing activities
The Company’s net cash flows from financing activities decreased by $84,200 to $90,100 as of December 31, 2011 compared to cash flows from financing activities of $174,300 for the nine months ended December 31, 2010.
Not required for smaller reporting company.
11
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, 2011 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, 2011.
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, 2011, 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.
12
ITEM 1. | LEGAL PROCEEDINGS |
None
Not required for smaller reporting company.
ITEM 3. | DEFAULTS UPON SENIOR SECURITIES |
ITEM 4. | REMOVED AND RESERVED |
ITEM 5. | OTHER INFORMATION |
ITEM 6. | EXHIBITS |
Index to Exhibits on page 14
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]*** | |
Section 302 Certification of principal executive officer.** | ||
Section 302 Certification of principal financial and accounting officer.** | ||
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. |
14
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. | ||
(Registrant) | ||
Date: February 14, 2012 | By: | /s/ Georges Benarroch |
Georges Benarroch President and Chief Executive Officer | ||
15