Breitling Energy (BECC) 10-Q 2008 Q4 Quarterly report

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended December 31, 2008

OR

¨ TRANSITION REPORT UNDER SECTION 13 OF 15(d) OF THE EXCHANGE ACT OF 1934

From the transition period from ____________ to ___________.

Commission File Number 000-50541

Oncolin Therapeutics, Inc.

(Exact name of small business issuer as specified in its charter)

(Former Name if Applicable)

Nevada	88-0507007
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification Number)

710 N., Post Oak Suite 410, Houston, Texas 77024

(Address of principal executive offices)

((713) 780 0806

 (Issuer's telephone number)

Check whether the issuer has (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 x         No ¨

Indicate by check mark whether the registrant is a large accelerated filer, and accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  ¨	Accelerated filer   ¨
Non-accelerated filer  ¨	Smaller reporting company  x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act. Yes    ¨No    x

As of May 5, 2010, there were outstanding 462,055,263 shares of common stock, $0.0001 par value per share.

ONCOLIN THERAPEUTICS, INC. AND SUBSIDIARIES

INDEX TO FORM 10-Q

December 31, 2008

Part I	Financial Information
	Item 1.	Financial Statements
		Consolidated Balance Sheets
		December 31, 2008(unaudited) and March 31, 2008	3
		Consolidated Statements of Operations (unaudited)
		Three and Nine Months Ended December 31, 2008 and 2007 and
		for the period from Inception (May 9, 2007) through
		December 31, 2008	4
		Consolidated Statements of Cash Flows (unaudited)
		Nine Months Ended December 31, 2008 and 2007 and
		for the period from Inception (May 9, 2007) through
		December 31, 2008	5
		Notes to Unaudited Consolidated Financial Statements	6
	Item 2.	Management’s Discussion and Analysis of Financial Condition and
		Results of Operations	12
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	13
	Item 4.	Controls and Procedures	13
Part II	Other Information
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	14
	Item 6.	Exhibits	14

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PART I.                      FINANCIAL INFORMATION

ITEM 1.                      FINANCIAL STATEMENTS

ONCOLIN THERAPEUTICS, INC. AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED BALANCE SHEETS

(Unaudited)

	December 31, 2008		March 31, 2008
ASSETS
Cash and cash equivalents	$	-	$	1,174
Prepaid expenses		13,334		30,750
Deferred financing costs, net		-		12,915
Total current assets		13,334		44,839
Property and equipment, net		4,002		4,670
Option agreement, net		-		11,111
Total assets	$	17,336		60,620
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities:
Accounts payable	$	328,734	$	109,188
Accounts payable – related parties		119,536		111,783
Accrued liabilities		113,562		124,730
Notes payable – related parties		95,302		410,000
Total liabilities		657,134		755,701
Shareholders' deficit:
Common stock, $.001 par value, 500,000,000 shares authorized,
462,055,263 and 42,069,533 shares issued and outstanding, respectively		462,055		42,069
Additional paid-in capital		1,875,942		999,530
Deficit accumulated during the development stage		(2,977,795)		(1,736,680	)
Total shareholders’ deficit		(639,798)		(695,081	)
Total liabilities and shareholders' deficit	$	17,336	$	60,620

See accompanying notes to unaudited consolidated financial statements.

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ONCOLIN THERAPEUTICS, INC. AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended December 31, 2008			Three Months Ended December 31, 2007 (Restated)			Nine Months Ended December 31,2008			Inception (May 9, 2007) to December 31, 2007 (Restated)			Inception (May 9, 2007) to December 31, 2008
Revenue	$	-		$	-		$	-		$	-		$	-
Costs and expenses:
Compensation and related expenses		143,478			235,272			231,278			608,345			958,723
Office administration		4,419			4,075			7,646			8,279			21,005
Professional fees		65,256			63,893			342,078			99,578			616,713
Investor relations		10,615			201,609			19,940			201,609			292,444
Merger expenses		-			-			-			8,113			8,113
Impairment of license agreement		-			-			32,725			80,100			112,825
Acquisition costs of subsidiary		-			220,000			-			220,000			220,000
Depreciation and amortization		9,111			2,474			20,668			2,474			30,032
Other expenses		118,470			25,108			153,482			55,742			258,821
Total costs and expenses		351,349			752,431			807,817			1,284,240			2,518,676
Other expense (income):
Interest expense		342,281			6,731			433,298			17,745			459,119
Total other expense (income)		342,281			6,731			433,298			17,745			459,119
Net loss	$	(693,630	)	$	(759,162	)	$	(1,241,115	)	$	(1,301,985	)	$	(2,977,795	))
Net loss per share:
Basic and diluted	$	(0.00	)	$	(0.02	)	$	(0.01	)	$	(0.04	)
Weighted average number of common shares outstanding - Basic and diluted		340,108,200			41,579,416			142,732,952			34,586,920

See accompanying notes to unaudited consolidated financial statements.

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ONCOLIN THERAPEUTICS, INC. AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine Months Ended December 31, 2008			From Inception (May 9, 2007) to December 31,2007 (Restated)			Cumulative from Inception (May 9, 2007) to December 31, 2008
Cash flows from operating activities:
Net loss	$	(1,241,115	)	$	(1,301,985	)	$	(2,977,795)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation and amortization		11,779			2,474			21,143
Amortization of deferred financing costs		12,915			-			15,000
Non-cash compensation expense relating to license agreement		-			119,900			119,900
Impairment of license agreement		32,725			80,100			112,825
Amortization of debt discount		397,985			-			397,985
Share-based compensation		319,070			432,862			638,094
Non-cash acquisition costs of subsidiary		-			220,000			220,000
Changes in operating assets and liabilities:
Other current assets		17,416			(15,000	)		2,416
Accounts payable		250,123			16,424			487,368
Accounts payable – related parties		7,753			134,968			120,616
Accrued liabilities		25,400			82,706			296,380
Net cash used in operating activities		(165,949	)		(227,551	)		(546,068	)
Cash flows from investing activities:
Investment in option agreement		-			20,000			(20,000	)
Purchase of property and equipment		-			(3,320	)		(5,145	)
Net cash used in investing activities		-			(23,320	)		(25,145	)
Cash flows from financing activities:
Proceeds from notes payable – related parties		-			92,000			223,000
Repayment of notes payable – related parties		-			(12,445	)		(13,000)
Proceeds from sale of common stock		90,000			1,165			91,165
Proceeds from exercise of stock options		74,775			177,673			270,048
Net cash provided by financing activities		164,775			258,393			571,213
Net change in cash		(1,174	)		7,522			-
Cash and cash equivalents, beginning of period		1,174			-			-
Cash and cash equivalents, end of period	$	-		$	7,522		$	0
Supplemental disclosures:
Cash paid for interest	$	1,799		$	-		$	39,956
Cash paid for income taxes		-			-			-
Non-cash financing activities:
Conversion of notes payable and accrued interest	$	414,568		$	-		$	414,568
Stock issued in settlement of accounts payable
and accrued liabilities		-			23,453			-
Discount on convertible notes due to beneficial conversion feature		397,985			-			397,985
Cancellation of stock certificate		-			24,000			300
Issuance of note payable for license agreement		-			200,000			200,000
Stock issued for prepaid investor relation services		-			-			73,800

See accompanying notes to unaudited consolidated financial statements.

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ONCOLIN THERAPEUTICS, INC. AND SUBSIDIARIES

(A DEVELOPMENT STAGE COMPANY)

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2008

Note 1.                      Organization and Nature of Business

The accompanying unaudited financial statements of Oncolin Therapeutics, Inc. (the "Company" or "Oncolin") (formerly, Edgeline Holdings, Inc.) have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 8-03 of Regulation S-X related to smaller reporting companies.  These consolidated financial statements should be read in conjunction with the audited financial statements and notes, which are included as part of the Company's Form 10-KSB filed with the SEC on July 15, 2008.  In the opinion of management, all adjustments, consisting only of normal recurring adjustments, considered necessary for a fair presentation, have been included in the accompanying unaudited consolidated financial statements.  Operating results for the periods presented are not necessarily indicative of the results that may be expected for the full year.  Notes to the financial statements which substantially duplicate the disclosure contained in the audited financial statements for fiscal year ended March 31, 2008 as reported in the 10-KSB have been omitted.

Oncolin Therapeutics, Inc. (formerly, Edgeline Holdings, Inc, (“Edgeline”), formerly Dragon Gold Resources, Inc., (“Dragon Gold”) was incorporated in the State of Nevada on December 13, 2000.

On May 31, 2007, Dragon Gold Resources, Inc. completed a reverse merger with Secure Voice Communications, Inc., a Texas corporation (“Secure Voice”).  As a result of the transaction, Secure Voice became a wholly-owned subsidiary of Dragon Gold when Dragon Gold agreed to issue an aggregate of 3,207,840,000 shares of its common stock (pre-reverse split) to the former shareholders of Secure Voice (in exchange for all the outstanding capital stock of Secure Voice), resulting in the former shareholders of Secure Voice owning approximately 98.5% of the issued and outstanding Dragon Gold common stock.  As the articles of incorporation only authorized the issuance of 500,000,000 shares of common stock, Dragon Gold issued 450,053,276 shares of common stock (pre-reverse split) and was obligated to issue an additional 2,757,786,724 shares of common stock (pre-reverse split).  At the annual shareholders’ meeting which was held on June 19, 2007, the shareholders approved an 80-for-1 reverse split that did not reduce the number of authorized shares of common stock.  Upon the approval of the 80-for-1 reverse split, Dragon Gold issued the balance of these shares which equated to 34,472,334 shares on a post-split basis.  The accompanying consolidated financial statements and related notes give retroactive effect to the reverse split, except as described otherwise.

On June 19, 2007, the shareholders approved a change in the Company’s name to Oncolin Therapeutics, Inc.

Reclassifications

Certain reclassifications have been made to conform prior year financial information to the current year presentation.

Note 2.              Going Concern

These financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business.  The Company has not generated revenue since its inception and is unlikely to generate earnings in the immediate or foreseeable future.  The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders and the ability of the Company to obtain necessary equity financing to continue operations and the attainment of profitable operations.  As of December 31, 2008, the Company has accumulated losses of $2,977,795 since inception.  These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.  These factors raise substantial doubt regarding the Company's ability to continue as a going concern.

Note 3.              Option Agreement

On November 30, 2007, the Company entered into an Option Agreement with The University of Texas M.D. Anderson Cancer Center (“UTMDACC”) to evaluate certain patent rights in relation to products arising and to negotiate a license with UTMDACC for the use of such patent rights on five (5) specific intellectual property rights.  As consideration for the option, the Company paid UTMDACC $20,000 for the period November 30, 2007 through August 30, 2008, and had the right to extend the option term to November 30, 2008, by paying UTMDACC an additional $40,000 on or before August 30, 2008.  As of December 31, 2008, Oncolin had not paid the extension fee. Amortization expense relating to this Option Agreement for the nine months ended December 31, 2008 was $11,111.  The option was transferred to Intertech Bio, which was spun out from the Company in February 2009.

Note 4.              Accounts Payable – Related Parties

Certain officers, directors and consultants, who are also stockholders of the Company, have paid for goods and services, or incurred expenses, for the benefits of the Company, during the period from inception (May 9, 2007) through December 31, 2008.  As of December 31, 2008, the amount due from the Company to these related parties were $119,536.

Page 6

Note 5.              Notes Payable – Related Parties

Notes payable related parties as of December 31, 2008 and March 31, 2008 consist of the following:

Description	December 31, 2008		March 31, 2008
On May 10, 2007, Secure Voice Communications, Inc. (Texas) entered into a note agreement with Secure Voice Communications, Inc. (Florida) to acquire the license rights to a voice over IP (“VoIP”) technology.  The principal amount of the note is $200,000 with an annual interest rate of 9% and principal and accrued interest due May 10, 2008.  The principal amount of the note exceeded the fair value of the license rights of $80,100 and the excess was charged to compensation expense.  Secure Voice Communications, Inc. (Florida) is owned 100% by KM Casey No. 1 LTD which is an affiliate of Kevan Casey, who is also affiliated with Silver Star Holdings, the majority shareholder of Oncolin.  At June 30, 2007, the Company performed an impairment test on the carrying value of the license agreement it had acquired from Secure Voice Communications, Inc. (Florida) and determined an impairment charge for the full carrying value of $80,100 was warranted. On May 21, 2008, the Company amended this notes agreement into a convertible note. See Note 6.	$	-	$	200,000
On June 13, 2007, Oncolin entered into a note agreement with Tommy Allen, a shareholder of the Company in the principal amount of $20,000 at an annual interest rate of 10% and principal and accrued and unpaid interest due September 30, 2007.  During the quarter ended September 30, 2007, the Company had repaid $13,000 of the principal amount of the note to Mr. Allen.  Mr. Allen verbally agreed to extend the due date of the note and accrued interest to March 31, 2009.  As of December 31, 2008, the balance outstanding on this note was $7,000.  No principal or interest payments have been made through the date of this filing.		7,000		7,000
On July 24, 2007, Oncolin entered into a note agreement with SCJ Resources Corporation, an entity owned 100% by the Company’s CFO, in the principal amount of $25,000 at an annual interest rate of 10% and principal and accrued and unpaid interest due September 30, 2007.  In addition, the Company agreed to pay SCJ Resources Corporation a 10% transaction fee that will accrue interest from the date of the note.  This note is currently in default.  The Company is withholding payment pending the outcome of a litigation between SCJ Resources Corporation and an affiliate owned by the major shareholder of the Company.  No principal or interest payments have been made through the date of this filing.		25,000		25,000
On November 30, 2007, the Company entered into a note agreement with Kevan Casey in the principal amount of $15,000 and annual interest rate of 10%. The principal and accrued interest are due on May 31, 2008. On May 21, 2008, the Company amended this notes agreement into a convertible note. See Note 6.		-		15,000
On November 30, 2007, the Company entered into a note agreement with KM Casey No. 1 LTD in the principal amount of $32,000 and an annual interest rate of 10%. The principal and accrued interest are due on May 31, 2008. On May 21, 2008, the Company amended this notes agreement into a convertible note. See Note 6.		-		32,000
On February 12, 2008, the Company entered into a note agreement with Kevan Casey in the principal amount of $70,000 and an annual interest rate of 10%. The principal and accrued interest are due upon demand. On May 21, 2008, the Company amended this notes agreement into a convertible note. See Note 6.		-		70,000
On February 27, 2008, the Company entered into a note agreement with Kevan Casey in the principal amount of $28,000 and an annual interest rate of 10%. The principal and accrued and unpaid interests are due upon demand. On May 21, 2008, the Company amended this notes agreement into a convertible note. See Note 6.		-		28,000
On March 3, 2008, the Company entered into a note agreement with Kevan Casey in the principal amount of $8,000 and an annual interest rate of 10%. The principal and accrued and unpaid interests are due upon demand. On May 21, 2008, the Company amended this notes agreement into a convertible note. See Note 6.		-		8,000
On March 14, 2008, the Company entered into a note agreement with Kevan Casey in the principal amount of $25,000 and an annual interest rate of 10%. The principal and accrued and unpaid interests are due upon demand. On May 21, 2008, the Company amended this notes agreement into a convertible note. See Note 6.		-		25,000
On September 30, 2008, Oncolin entered into a note agreement with J. Leonard Ivins, an officer of the Company, in the principal amount of $63,302 at annual interest rate of 9%.  The note was executed in exchange for the cancellation of Mr. Ivins’ employment agreement and all outstanding amounts due to him as of September 30, 2008.  The note and accrued interest are due on January 30, 2009.  No principal or interest payments have been made through the date of this filing.		63,302		-
Total	$	95,302	$	410,000

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Note 6.              Convertible Notes

On May 21, 2008, the Company amended its notes agreement with Kevan Casey into a convertible note whereby any part of the unpaid principal amount and accrued interest of the notes could be converted into shares of the Company’s common stock at the lesser of (i) $0.05 per share or (ii) 50% of the closing market price of the Company’s common stock prior to the Conversion Notice (as defined below), but in no case below $0.001, at the option of the Holder in whole or in part at any time following the Issuance Date up to and including the day that all of the Principal Amount and interest accrued but unpaid thereon, if any, are paid in full. The conversions into common stock carry a “net cashless” beneficial conversion feature resulting in discount of $148,602 on the convertible note. On October 28, 2008, Mr. Casey exercised the conversion option in the note agreement and converted the notes for 154,793,640 shares of the Company’s common stock.

 On May 21, 2008, the Company also amended its note agreement with KM Casey No. 1 LTD into a convertible note whereby any part of the unpaid principal amount and accrued interest of the notes shall be convertible into shares of the Company’s common stock at the lesser of (i) $0.05 per share or (ii) 50% of the closing market price of the Company’s common stock prior to the Conversion Notice (as defined below), but in no case below $0.001, at the option of the Holder in whole or in part at any time following the Issuance Date up to and including the day that all of the Principal Amount and interest accrued but unpaid thereon, if any, are paid in full. The conversions into common stock carry a “net cashless” beneficial conversion feature resulting in discount of $249,383 on the convertible note.  On October 28, 2008, KM Casey No. 1 LTD exercised the conversion option in the note agreement and converted the notes for 259,774,130 shares of the Company’s common stock.

The Company evaluated the amendments above under ASC 470-60 “Troubled Debt Restructurings.” Because Kevan Casey did not grant a concession on this outstanding loan, the transaction was not accounted for as troubled debt restructuring. Consequently, the Company evaluated the transaction under ASC 470-50 “Debtor’s Accounting for a Modification or Exchange of Debt Instruments” to determine if the modification was substantial. Because the amendment added a conversion option to the notes payable, the debt modification was determined to be substantial and accordingly the debt was extinguished. No gain or loss was recognized on the extinguishment. As a result, the Company analyzed the amended convertible notes for derivative accounting consideration under FASB ASC 815-15 and FASB ASC 815-40. The Company determined that, due to the floor of $0.001 noted above, the embedded conversion option in the convertible notes met the criteria for classification in stockholders equity under FASB ASC 815-15 and FASB ASC 815-40. Therefore, derivative accounting was not applicable for these convertible notes payable.

In addition, the Company evaluated the convertible notes under ASC 470-20 and determined that they contained a beneficial conversion feature with an intrinsic value of $397,985. This amount was recorded as a discount to the note to be amortized until maturity using the effective interest method. As the notes were converted during the period, the entire remaining discount was amortized to interest expense during the nine months ended December 31, 2008.

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Note 7.              Common Stock

On May 1, 2008, the Company issued 150,000 shares of its common stock to a professional firm for legal services valued at $51,000.

In June 2008, the company sold 800,000 shares of common stock to individuals for cash proceeds totaling $90,000.

On August 4, 2008, the Company issued 2,437,500 shares to J. Leonard Ivins as part of the settlement of amounts due him. The Company valued these shares at $146,250.

Also on August 4, 2008, the Company issued 1,168,000 shares valued at $70,080 to third parties for services rendered

On November 14, 2008, the Company issued 600,000 shares of its common stock to a professional firm for legal services which the Company valued at $8,057.

On October 28, 2008, the Company issued 414,567,770 shares of its restricted common stock for conversion of debt and accrued interest with a carrying amount of $414,568.  See Note 8.

Also on October 28, 2008, the Company issued 262,460 shares of its restricted common stock for exercise of stock options for which the received $74,775 in proceeds.

Note 8.              Stock Options

During the first quarter of 2009, the Company granted 646,305 stock warrants for its common stock to an individual for consulting services which the Company valued at $39,444, all of which was recognized as expense during the nine months ended December 31, 2008.  All of the warrants expire in the first quarter of fiscal 2010 and are exercisable for amounts ranging from $0.19-$1.35 per share.  All of the warrants vested immediately on the date of grant.

In August 2008, the Company granted stock warrants for 300,000 shares of its common stock to an individual for consulting services which the Company valued at $12,715.  All of the options were forfeited upon termination of the agreement with the consultant during the nine months ended December 31, 2008.  100,000 of the warrants vested immediately on the grant date, resulting in expense of $4,238 during the nine months ended December 31, 2008.

The following table summarizes stock warrants issued and outstanding:

	Warrants			Weighted average exercise price		Aggregate intrinsic value		Weighted average remaining contractual life (years)
Outstanding at March 31, 2008		2,050,000			0.11		874,886		4.9
Granted		946,305			0.66		-		-
Exercised		(262,460	)		0.30		-		-
Forfeited		(2,350,000	)		0.10		-		-
Expired		-			-		-		-
Outstanding at December 31, 2008		383,845		$	1.07	$	-		0.25

From April 1, 2008 to December 31, 2008, the Company issued 946,305 non-qualified stock options at exercise prices ranging from $0.06 to $1.35 per share to certain individuals for consulting services which the Company valued using the Black-Scholes option pricing model with the following assumptions: volatility of ranging from 114.99% to 143.21%, expected terms based on the simplified method under SEC Staff Accounting Bulletin 107, risk free interest rates of 1.32% to 2.21% and no expected dividends.  

Note 9.              Subsequent Events

On February 24, 2009 the Company diluted its interest in Intertech Bio by assigning 75% of the Intertech Bio common stock in exchange for the assumption of certain liabilities. Since the Company no longer has a controlling interest in Intertech Bio, their assets, liabilities and operating results will no longer be included in the Company’s consolidated financial statements.

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Note 10.            Restatement

On July 7, 2008, the Company’s management concluded that the three interim quarters in fiscal year 2008 should be restated with respect to the Company’s accounting for the following transactions:

· reverse merger with Secure Voice Communications, Inc. (Secure Voice) on May 31, 2007;

· stock-based compensation

· merger expenses.

· other compensation related expenses.

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The effects to the net loss from the restatement are as follows:

· The Company improperly recorded expenses in the amount of $336,000 related to the reverse merger resulting in an overstatement of the net loss.

· Stock-based compensation relating to the fair value of stock options granted in exchange for services provided to the Company were not properly recognized resulting in an overstatement of additional paid-in capital and a related understatement of  net loss by $120,116 and

· The Company did not properly recognize other compensation related expense resulting in overstating the net loss by $31,520.

The following tables present the effects of the restatement on current liabilities, stockholders’ equity and net loss:

	As Previously Reported			Net Adjustment			As  Restated
Income Statement:
Three Months ended December 31, 2007:
Compensation and related expenses	$	330,031		$	(94,759)		$	235,272
Professional fees		95,853			(31,960)			63,893
Investor relations		111,690			89,919			201,609
Net loss		(795,962	)		36,800			(759,162	)
From Inception (May 9, 2007) to December 31, 2007:
Compensation and related expenses	$	488,229		$	120,116		$	608,345
Professional fees		125,098			(25,520	)		99,578
Investor relations		207,609			(6,000	)		201,609
Merger expenses		344,113			(336,000	)		8,113
Net loss		(1,549,389	)		247,404			(1,301,985	)

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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of the Company’s financial condition as of December 31, 2008 and 2007, and its results of operations for the nine months ended December 31, 2008, and for period inception (May 9, 2007) through December 31, 2007 and 2008, should be read in conjunction with the audited consolidated financial statements and notes included in Oncolin Therapeutics’ Form 10-KSB for the year ended March 31, 2008, filed with the Securities and Exchange Commission.

Overview

In January 2008, the Company determined to primarily focus its business on developing products to treat cancer, infectious diseases and other medical conditions associated with compromised immune systems.  As a development stage company, substantially all of the Company’s efforts will be devoted to performing research and experimentation, conducting clinical trials, developing and acquiring intellectual properties, raising capital and recruiting and training personnel.

Results of Operations – Inception (May 9, 2007) to December 31, 2008

The Company has had no revenue for period from inception (May 9, 2007) through December 31, 2008.

The Company’s expenses were $2,977,795, which were primarily comprised of compensation and related expenses of $958,723, professional fees of $616,713, investor relations expenses of $292,444, and interest expense of $459,119.

In addition to the foregoing expenses, the Company performed an impairment test on the carrying value of the license agreement it acquired from Secure Voice Communications, Inc. (Florida) and determined an impairment charge for the full carrying value of $80,100 was warranted.  In connection with the license agreement acquisition, Secure Voice Communications, Inc. (Texas) issued a promissory note to Secure Voice Communications, Inc. (Florida) in the principal amount of $200,000.  This amount exceeded the estimated fair value of the license agreement of $80,100 and the excess amount of $119,900 was charged to compensation expense.  As of September 30, 2008, the Company also impaired the carrying value of the license agreement with MD Anderson totaling $32,725.  Also included in compensation expense is the fair value of nonqualified stock options issued to consultants whom the Company valued at $125,066 and 400,000 shares of common stock issued to consultants, which the Company valued at $175,000.

In November 2007, the Company issued 500,000 shares of its restricted common stock to the shareholders of Intertech Bio Corporation for 100% of the capital stock of Intertech Bio, with Intertech Bio becoming a wholly-owned subsidiary of the Company.  Based upon the fair market value on the date of acquisition, the Company valued the common stock issued at $220,000 and charged the entire amount to acquisition costs during the quarter ended September 30, 2007.

As a result of the foregoing, the Company’s net loss for the period inception (May 9, 2007) through December 31, 2008 was $2,977,795.

Comparison of Nine Months Ended December 31, 2008 and Period From  Inception (May 9, 2007) to December 31, 2007.

The Company has had no revenue for the nine months ended December 31, 2008 and the period from inception (May 9, 2007) to December 31, 2007.

The Company’s expenses decreased from $1,549,389 for nine months ended December 31, 2007 to $1,241,115 for nine months ended December 31, 2008.  The decrease of $308,274 was primarily attributed to a decrease in compensation and other related expenses by $256,951, merger expenses by $344,133 and acquisition of subsidiary of $220,000.  The decrease was partially offset by an increase in professional fees of $216,980. As a result of the foregoing, the Company’s net losses for the nine months ended December 31, 2008 and 2007 were $1,241,115 and $1,549,389, respectively.

Comparison of Three Months Ended December 31, 2008 and 2007.

The Company has had no revenue for the three months ended December 31, 2008 and 2007.

The Company’s expenses decreased from $795,962 for three months ended December 31, 2007 to $693,630 for three months ended December 31, 2008. The decrease of $102,332 was primarily attributed to the decrease in compensation and related expenses of $186,553 and acquisition costs of $220,000, investor relations expense of $101,075 and offset by the increase in interest expense of $335,550.

As a result of the foregoing, the Company’s net losses for the three months ended December 31, 2008 and 2007 were $693,630 and $758,162, respectively.

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Liquidity and Capital Resources

As of December 31, 2008, the Company had no cash and negative working capital of $643,800.   Net cash used in operating activities for the nine months ended December 31, 2008 was $165,949 compared to $227,551 for same period in 2007.  

For the nine months ended December 31, 2008, cash provided by financing activities totaled $164,775 compared to $258,393 for same period in 2007.  The Company received proceeds of $90,000 from sales of its common stock and $74,775 from the exercise of stock options during the nine months ended December 31, 2008.

The Company needs to obtain significant additional capital resources through equity and/or debt financings.  As of December 31, 2008, the Company had no cash and cash equivalents and negative working capital.  The Company can provide no assurance it will be successful in seeking this or any additional financing, and the failure to obtain any such financing may cause it to curtail its operations.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Pursuant to Item 305(e) of Regulation S-K (§ 229.305(e)), the Company is not required to provide the information required by this Item as it is a “smaller reporting company,” as defined by Rule 229.10(f)(1).

ITEM 4. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this Quarterly Report on Form 10-Q, we conducted an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) of our disclosure controls and procedures (as defined in Rules13a-15(e) and 15d-15(e) under the Exchange Act). Based on this evaluation, the CEO and CFO concluded that our disclosure controls and procedures were not effective as of December 31, 2008.

(b) Changes in Internal Controls Over Financial Reporting

There were no changes that occurred during the quarter covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II.  OTHER INFORMATION

ITEM 2.                            UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

We have affected the following transactions in reliance upon exemptions from registration under the Securities Act of 1933 as amended (the "Act") as provided in Section 4(2) thereof. Each certificate issued for unregistered securities contained a legend stating that the securities have not been registered under the Act and setting forth the restrictions on the transferability and the sale of the securities. No underwriter participated in, nor did we pay any commissions or fees to any underwriter in connection with any of these transactions. None of the transactions involved a public offering. We believe that each person had knowledge and experience in financial and business matters which allowed them to evaluate the merits and risks of our securities. We believe that each person was knowledgeable about our operations and financial condition.

In June 2008, the Company sold 800,000 shares of its common stock at $0.1125 per share for total proceeds of $90,000.

ITEM 6.                             EXHIBITS

Exhibit No.	Description
10.1	Agreement and Plan of Reorganization between Dragon Gold Resources, Inc. and Secure Voice Communications, Inc. dated May 31, 2007, filed as an exhibit to the Company’s Annual Report on Form 10-KSB for the year ended March 31, 2007, filed on June 6, 2007.
10.2	Oncolin Therapeutics, Inc. 2007 Stock Option Plan filed as an exhibit to the Company’s Registration Statement on Form S-8 filed on July 25, 2007.  *
10.3	Employment agreement dated May 10, 2007, with J. Leonard Ivins filed as an exhibit to the Company’s Annual Report on Form 10-KSB for the year ended March 31, 2007, filed on June 6, 2007.  *
10.4	Investment Agreement dated December 20, 2007, between Registrant and Dutchess Private Equities Fund, Ltd. Filed as an exhibit to the Company’s Form 8-K dated December 26, 2007.
10.5	Registration Rights Agreement dated December 20, 2007, between Registrant and Dutchess Private Equities Fund, Ltd. Filed as an exhibit to the Company’s Form 8-K dated December 26, 2007.
10.6	Amended and Restated Articles of Incorporation filed as an exhibit to the Company’s Definitive Information Statement dated February 15, 2008.
10.7	Amendment to Stock Purchase Agreement with Intertech Bio, Inc. filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2008, filed on August 19, 2008.
21.1	Subsidiaries of the Registrant provided herewith.
31.1	Certification of J. Leonard Ivins.  Provided herewith.
32.1	Certification for Sarbanes-Oxley Act of J. Leonard Ivins.  Provided Herewith.
32.2	Certification for Sarbanes-Oxley Act of Kevan Casey.  Provided Herewith.

* Indicates management contract or compensatory plan or arrangement.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

ONCOLIN THERAPEUTICS, INC.

By: /s/J. Leonard Ivins

J. Leonard Ivins, Chief Executive Officer

Date: May 5, 2010

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/J. Leonard Ivins	Chief Executive Officer, Principal Financial	May 5, 2010
J. Leonard Ivins	and Accounting Officer and Chairman of the Board
/s/Kevan Casey	Director	May 5, 2010
Kevan Casey

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