UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: December 31, 2004
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[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE
EXCHANGE ACT
For the transition period from to
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Commission file number 000-28673
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Biocol, Inc.
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(Exact name of small business issuer as
specified in its charter)
Wyoming 86-0970004
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(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
10233 N. MacArthur Blvd. #277, Irving, Texas 75063
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(Address of principal executive offices)
(972) 506-9635
Issuer's telephone number
(Former name, former address and former fiscal year, if changed since
last report.)
Indicate by Check Mark Whether the Registrant is a Shell Company (as
Defined by Rule 12B-2 of the Exchange Act). Yes ; No X
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDING DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required
to be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court. Yes ----- No -----
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practical date: November 17, 2005 8,671,743
Transitional Small Business Disclosure Format (check one). Yes ; No X
PART I
ITEM 1. FINANCIAL STATEMENTS
BIOCOL, INC.
(Formerly a Development Stage Company)
BALANCE SHEETS
(Unaudited)
December 31, September 30,
2004 2004
----------------- ------------------
Assets:
Current Assets
Cash and cash equivalents $ 267,479 $ 328,479
Accounts Receivable, net 75,000 52,000
Inventory 699,673 767,174
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Total Current Assets 1,042,152 1,147,653
Intangible Assets - Distribution rights, US, Canada & Europe 4,750,000 4,750,000
----------------- ------------------
Total Assets $ 5,792,152 $ 5,897,653
================= ==================
Liabilities:
Accounts payable $ 146,645 $ 146,145
Accrued expenses 3,000 12,000
Related party payable 12,360 12,360
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Total Current Liabilities 162,005 170,505
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Stockholders' Equity:
Preferred Stock - Series A, Par value $.001
Authorized 5,000,000 shares, Issued 27,500 shares
at December 31, 2004 and September 30, 2004 27 27
Preferred Stock - Series B, Par value $.001
Authorized 5,000,000 shares, Issued 230,000 shares
at December 31, 2004 and at September 30, 2004 230 230
Common Stock, Par value $.001 Authorized 100,000,000 shares,
Issued 8,671,743 Shares at December 31, 2004
and September 30, 2004 8,671 8,671
Paid-In Capital 5,814,620 5,814,620
Retained Deficit (1,075) (1,075)
Deficit Accumulated During the
Development Stage (192,326) (95,325)
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Total Stockholders' Equity 5,630,147 5,727,148
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Total Liabilities and
Stockholders' Equity $ 5,792,152 $ 5,897,653
================= ==================
See accompanying notes
BIOCOL, INC.
(Formerly a Development Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
For the three months ended
December 31,
-----------------------------------------
2004 2003
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Revenues: $75,000 $ -
Cost of goods sold 67,500 -
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Gross margin 7,500 -
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Expenses:
Salaries 9,000 -
Consulting 15,000 -
Legal 5,000 -
Accounting 500 -
Research & development 75,000 -
Taxes - -
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Total expenses 104,500
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Net Loss $ (97,000) $ -
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Loss Per Share:
Basic $ (0.04)
Diluted $ (0.01) $ -
=================== ==================
See accompanying notes
BIOCOL, INC.
(Formerly a Development Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)
For the three months ended
December 31,
-------------------------------------
2004 2003
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CASH FLOWS FROM OPERATING
ACTIVITIES:
Net Loss $ (97,000) $ -
(Increase) Decrease in Inventory (767,175) -
Increase (Decrease) in Accounts Payable 87,950 -
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Net Cash Used in operating activities (776,225) -
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CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchase of Distribution Rights (4,750,000) -
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Net cash provided by investing activities (4,750,000) -
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CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from sale of common stock 767,175 -
Proceeds from sale of preferred stock 5,050,000 -
Capital contributed by shareholder - -
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Net Cash Provided by Financing Activities 5,817,175 -
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Net (Decrease) Increase in
Cash and Cash Equivalents 290,950 -
Cash and Cash Equivalents
at Beginning of Period - -
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Cash and Cash Equivalents
at End of Period $ 290,950 $ -
================= ==================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest $ - $ -
Franchise and income taxes $ - $ -
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND
FINANCING ACTIVITIES: None
See accompanying notes
BIOCOL, INC.
(Foirmerly a Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED DECEMBER 31, 2004 AND 2003
(Unaudited)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of accounting policies for Biocol, Inc. (a development
stage company) is presented to assist in understanding the Company's financial
statements. The accounting policies conform to generally accepted accounting
principles and have been consistently applied in the preparation of the
financial statements.
Going Concern
The accompanying financial statements have been prepared in conformity
with accounting principles generally accepted in the United States, which
contemplates the Company as a going concern. However, the Company has sustained
substantial operating losses in recent years and has used substantial amounts of
working capital in its operations. Realization of the assets reflected on the
accompanying balance sheet is dependent upon continued operations of the Company
which, in turn, is dependent upon the Company's ability to meet its financing
requirements and succeed in its future operations. Management believes that
actions presently being taken to revise the Company's operating and financial
requirements provide them with the opportunity for the Company to continue as a
going concern.
Interim Reporting
The unaudited financial statements as of December 31, 2004 and for the
three and six month period then ended reflect, in the opinion of management, all
adjustments (which include only normal recurring adjustments) necessary to
fairly state the financial position and results of operations for the three
months. Operating results for interim periods are not necessarily indicative of
the results which can be expected for full years.
Organization and Basis of Presentation
The Company was incorporated under the laws of the State of Wyoming on
February 27, 1997. On March 15, 2004 the Company changed its name from Pear
Network, Inc. To Biocol, Inc. The Company ceased all operating activities during
the period from February 27, 1997 to October 20, 1999 and was considered
dormant. Since October 20, 1999, the Company is in the development stage, and
has not commenced planned principal operations.
BIOCOL, INC.
(Formerly a Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED DECEMBER 31, 2004 AND 2003 (Continued)
(Unaudited)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
Nature of Business
The Company has acquired the exclusive rights to distribute the Biocol
line of products in the U.S., Canada and Europe. Biocol currently offers four
products: Biocol Gel, a cosmeceutical; Biocol Cosmetic Mask, a stabilizing
platform for use with Biocol Gel; Biocol Bio-Skin, a skin replacement bandage;
and Biocol Delivery Gel, a serum for use in conjunction with Biocol Bio-Skin.
Loss per Share
The reconciliations of the numerators and denominators of the basic
loss per share computations are as follows:
Per-Share
Income Shares Amount
(Numerator) (Denominator)
Loss to common shareholders
For the three months ended December 31, 2004
BASIC LOSS PER SHARE $ (103,628) 4,750,630 $ (0.02)
DILUTED LOSS PER SHARE $ (103,628) 15,995,073 $ (0.01)
================== =================== ==================
For the three months ended December 31, 2003
BASIC LOSS PER SHARE $ - 1,000,000 $ -
DILUTED LOSS PER SHARE $ - 1,000,000 $ -
================== =================== ==================
BIOCOL, INC.
(Formerly a Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED DECEMBER 31, 2004 AND 2003 (Continued)
(Unaudited)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all
highly liquid debt instruments purchased with a maturity of three months or less
to be cash equivalents to the extent the funds are not being held for investment
purposes.
Pervasiveness of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles required management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Concentration of Credit Risk
The Company has no significant off-balance-sheet concentrations of
credit risk such as foreign exchange contracts, options contracts or other
foreign hedging arrangements.
NOTE 2 - INCOME TAXES
As of December 31, 2004, the Company had a net operating loss
carryforward for income tax reporting purposes of approximately $114,000 that
may be offset against future taxable income through 2021. Current tax laws limit
the amount of loss available to be offset against future taxable income when a
substantial change in ownership occurs. Therefore, the amount available to
offset future taxable income may be limited. No tax benefit has been reported in
the financial statements, because the Company believes there is a 50% or greater
chance the carryforwards will expire unused. Accordingly, the potential tax
benefits of the loss carryforwards are offset by a valuation allowance of the
same amount.
NOTE 3 - CONCENTRATION OF RISK
As of December 31, 2004, the Company receives 100% of its gross
revenues from one re- seller. The loss of this re-seller would adversely impact
the business of the Company.
BIOCOL, INC.
(Formerly a Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED DECEMBER 31, 2004 AND 2003 (Continued)
(Unaudited)
NOTE 4 - COMMITMENTS
As of December 31, 2004 all activities of the Company have been
conducted by corporate officers from either their homes or business offices.
Currently, there are no outstanding debts owed by the company for the use of
these facilities and there are no commitments for future use of the facilities.
NOTE 5 - PREFERRED STOCK
On March 26, 2001, the Company authorized five million shares of
Preferred Series A Stock, par value $.001, and five million shares of Preferred
Series B Stock, par value $.001.
On February 15, 2004 the Company issued 230,000 non-voting Class B
Preferred Stock which is convertible at the rate of 100 Common to 1 Preferred.
On March 15, 2004 the Company issued 27,500 shares of non-voting,
redeemable Class A Preferred Stock. Class A Preferred have a primary claim on
all assets of the Company. The 27,500 shares are redeemable by the holder at
face value ($2,750,000) upon merger, sale or transfer of assets, or upon the
redeemable due date of the security.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
This Quarterly Report contains certain forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, which are
intended to be covered by the safe harbors created thereby. Investors are
cautioned that all forward-looking statements involve risks and uncertainty,
including without limitation, the ability of the Company to continue its
expansion strategy, changes in costs of raw materials, labor, and employee
benefits, as well as general market conditions, competition and pricing.
Although the Company believes that the assumptions underlying the
forward-looking statements contained herein are reasonable, any of the
assumptions could be inaccurate, and therefore, there can be no assurance that
the forward-looking statements included in this Quarterly Report will prove to
be accurate. In light of the significant uncertainties inherent in the forward-
looking statements included herein, the inclusion of such information should not
be regarded as a presentation by the Company or any other person that the
objectives and plans of the Company will be achieved.
As used herein the term "Company" refers to Biocol, Inc., a Wyoming
corporation and its predecessors, unless the context indicates otherwise.
PLAN OF OPERATIONS
Biocol, Inc. has acquired the U.S., Canadian, and European rights to exclusively
distribute the Biocol line of products. Biocol currently offers four products:
* Biocol Gel, a cosmeceutical that when applied directly to the skin
reduced wrinkles and promotes natural skin re-genesis.
* Biocol Cosmetic Mask is a stabilizing platform for the sustained use of
Biocol Gel. It is used mainly for vanity applications.
* Biocol Bio-Skin is a scientifically- developed Skin Replacement
Bandage.
* Biocol Delivery Gel (a serum) is a biologically-active catalyst that,
when applied, creates an environment which accelerates natural skin
re-genesis. Generally used in conjunction with Biocol Bio-Skin.
The patented Skin Replacement Bandage and Delivery Gel products are designed to
replace natural skin that may have been lost due to burns, frostbite, pressure
sores, etc. The Bio-Skin technology designed to replaces traditional skin
grafting by using synthetically-created skin in lieu of natural skin.
The patented Cosmetic Mask formula, when applied to the epidermis, also creates
an environment that accelerates the re-genesis of natural skin cells, Benefits
of the Cosmetic Mask include reduction of wrinkles, diminishment of enlarged
pores, minimization of dark circles, prevention of acne, and more. Biocol, Ltd.
(The patent owner) is currently developing additional products to augment the
line of cosmetic applications, i.e., deep pore cleansing agents, finishing
solutions, etc.
PRODUCT HISTORY
Biocol Bio-Skin is a skin product that was developed under the Soviet
regime after years of research by the Russian Academy of Science. The product
was originally intended for military applications by the Russians in the event
of chemical or nuclear war. Original research began in the early 1980's and was
perfected during the late 1990's. Over 1,000 cases of successful skin
replacement using Biocol technology have been documented since 1997.
The Russian Ministry of Health (the equivalent of the U.S. FDA) has
approved Biocol Bio- Skin products for use in Russia.
The inventor of the technology, Dr Boris Gavrilyuk works at the Russian
Academy of Sciences. In February, 2004, he was given the prestigious Lomonosov
Award for his contribution to medical advancement.
The company intents initially to concentrate on direct-marketing the
Biocol Gel and the Biocol Face Mask by means of short and long form infomercials
and by utilizing already existing Multi-Level Marketing (MLM) avenues.
RESULTS OF OPERATIONS
The Company had no sales or sales revenues for the three months ended
December 31,
2004 or 2003 because it was a shell company that had not had any business
operations for the past three years.
The Company had no costs of sales revenues for the three months ended
December 31, 2004 or 2003 because it was a shell company that had not had any
business operations for the past three years. The Company had general and
administrative expenses of $103,628 for the three month period ended December
31, 2004 and $-0- for the same period in 2003.
CAPITAL RESOURCES AND LIQUIDITY
At December 31, 2004, the Company had total current assets of
$1,051,497 and total assets of $5,801,497 as compared to $-0- current assets and
$-0- total assets at September 30, 2003. The Company had a net working capital
of $957,997 at December 31, 2004 and a net working capital deficit of $5,550 at
September 30, 2003.
Net stockholders' equity in the Company was $5,707,997 as of December
31, 2004 and net stockholders' deficit was $5,550 at September 30, 2003.
ITEM 3. CONTROLS AND PROCEDURES
The Company's Chief Executive Officer and Chief Financial Officer are
responsible for establishing and maintaining disclosure controls and procedures
for the Company.
(a) Evaluation of Disclosure Controls and Procedures
As of the end of the period covered by this report, the Company carried
out an evaluation, under the supervision and with the participation of the
Company's management, including the Company's President, of the effectiveness of
the design and operation of the Company's disclosure controls and procedures
pursuant to Rule 13a-15 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). Based upon the evaluation, the Company's President
concluded that, as of the end of the period, the Company's disclosure controls
and procedures were effective in timely alerting him to material information
relating to the Company required to be included in the reports that the Company
files and submits pursuant to the Exchange Act.
(b) Changes in Internal Controls
Based on this evaluation as of December 31, 2004, there were no
significant changes in the Company's internal controls over financial reporting
or in any other areas that could significantly affect the Company's internal
controls subsequent to the date of his most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None/Not Applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
None/Not Applicable.
ITEM 5. OTHER INFORMATION
None/Not Applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
The following documents are filed herewith or have been included as
exhibits to previous filings with the Commission and are incorporated herein by
this reference:
Exhibit No. Exhibit
3 Articles of Incorporation (1)
3.2 Bylaws (1)
3.1 Amended Articles of Incorporation (1)
3.3 Amended Articles of Incorporation (2)
31 Certification Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
32 Certification Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
(b) Reports on Form 8-K. No reports on Form 8-K were filed during the
period covered by this Form 10-QSB.
(1) Incorporated herein by reference from Registrant's Form 10SB12G,
Registration Statement, dated December 27, 1999.
(2) Incorporated herein by reference from Registrant's Form 10QSB, March
31, 2001, dated January 17, 2002.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Biocol, Inc.
/s/ Paul Bailey
Paul Bailey
President/CFO and Director
November 17, 2005