UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of
1934
Date of Report (Date of earliest event reported) September 23, 2004
Bioaccelerate Holdings, Inc.
_____________________________________________________
(Exact name of registrant as specified in its charter)
Nevada 333-43126 87-0650219
_________________________________________________________________________
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
712 Fifth Avenue, 19th Floor New York, NY 10019
_________________________________________
(Address of principal executive offices)
Registrant's telephone number, including area code(212)897-6849
________________________________
Mobile Design Concepts, Inc., 311 South State Street, Suite 440,
Salt Lake City , Utah 84111
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (see General Instruction A.2.
below):
[ ] Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under
the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under
the Exchange Act (17 CFR 240.13e-4(c))
Section 1- Registrant's Business and Operations
Item 1.01 Entry into a Material Definitive Agreement.
The Registrant has previously reported that it entered into
an Agreement effective August 6, 2004. Wherein it agreed,
subject to certain conditions, to acquire all of the outstanding
common stock of Bioaccelerate, Inc., a Delaware Corporation, in
exchange for 32,325,000 common shares of the Registrant.
This transaction (the "Acquisition") was completed on
September 23, 2004, along with the effectuation of a 3.5 to 1
reverse split of the Registrant's outstanding common stock
reducing its pre-acquisition outstanding common shares from
4,812,800 to 1,375,085. After the issuance of the 32,325,000
shares in the Acquisition, the Registrant has 33,700,085 shares
of its common stock issued and outstanding.
The Registrant also (1) changed its corporate name from
Mobile Design Concepts, Inc. to Bioaccelerate Holdings, Inc.,
(2) changed its corporate address to New York , and (3) had a
complete change of corporate officers and directors.
Section 2- Financial Information
Item 2.01 Completion of Acquisition or Disposition of Assets.
See item 1.01 above. The parties to the Acquisition were
unrelated third parties prior to the completion of the
Acquisition and the terms thereof were negotiated on an arms-
length basis.
Item 2.02 Results of Operations and Financial Condition.
Management's Financial Plan of Operation and Financial
Statements for Bioaccelerate, Inc., are attached hereto as
Exhibits.
Section 3- Securities and Trading Market
Item 3.02 Unregistered Sales of Equity Securities.
Pursuant to the Acquisition described in Section 1 hereof,
the Registrant issued 32,325,000 common shares to the
shareholders of Bioaccelerate, Inc., in a nonpublic issuance
exempt from the registration requirements of the Securities Act
of 1933, as amended, pursuant to Section 4(1), Section 4(6)
and/or Regulation D. The shareholders were all accredited
investors.
Section 5- Corporate Governance and Management
Item 5.01 Changes in Control of Registrant.
Pursuant to the term of the Acquisition described in Section
1 hereof, the sole outstanding officer and director of the
Registrant resigned effective September 23, 2004 and a new Board
of Directors was elected and new officers were appointed. The
names, positions and background information for new management is
set forth herein in Exhibit 9-A.
Also as a part of the Acquisition, the Registrant issued
32,325,000 shares to the shareholders of Bioaccelerate, Inc.,
which constitutes voting control of the Registrant.
As a part of the Acquisition, Lynn Dixon resigned as the
sole officer and director of the Registrant and the following two
persons were appointed as the principal executive, financial,
operating, and accounting officers of the Registrant.
Name Positions
Lee Cole CEO, President & Director
Linden Boyne CFO, Secretary-Treasurer &
Director
All other officers and directors of the Registrant are set
forth in Exhibit 9-A, attached hereto.
Item 5.03 Amendments to Articles of Incorporation or Bylaws.
The Registrant amended its articles of incorporation on
September 23, 2004, to change its corporate name to Bioaccelerate
Holdings, Inc., and to put of record the 3.5 to 1 reverse stock
split effective September 23, 2004. A copy of the amendment is
attached hereto as Exhibit, 9-B.
Section 9- Financial Statements and Exhibits.
The following financial statements are filed as a part of
this report:
(a) Audited Financial Statements as of May 31, 2004,
and May 31, 2003, and for the periods then ended, on behalf of
Bioaccelerate, Inc.
(b) Proforma financial statements reflecting the
Acquisition are attached hereto.
(c) The following exhibits are attached hereto.
(i) Exhibit 9-A Business Disclosures Regarding
Bioaccelerate, Inc.
(ii) Exhibit 9-B Articles of Incorporation of
Registrant.
(iii) Exhibit 9-C Amendment to Agreement and
Plan of Reorganization.
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.
Bioaccelerate Holdings, Inc.
Date: September 24, 2004 by: /s/ Lee Cole
Lee Cole, CEO, President & Director
Bioaccelerate, Inc.
32 Haymarket
London, UK, SW1Y 4TP
To the Board of Directors and Stockholders of Bioaccelerate, Inc.
I have audited the accompanying balance sheet of Bioaccelerate, Inc., (a
development stage company) as of May 31, 2004, May 31, 2003 and from Inception
to May 31, 2004 and the related statements of loss, cash flows and
stockholders equity, for the years ending May 31, 2004, May 31, 2003 and from
Inception to May 31, 2004.These financial statements are the responsibility of
the Company's management. My responsibility is to express an opinion on these
financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made my management, as well as evaluating the overall financial
statement presentation. I believe that my audit provides a reasonable basis
for my opinion.
In my opinion the financial statements referred to above present fairly, in
all material respects, the financial position of Bioaccelerate, Inc. as of May
31, 2004, May 31, 2003 and from Inception to May 31, 2004 and the results of
its operations and its cash flows for the years ending May 31, 2004, May 31,
2003 and from Inception to May 31, 2004 in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern.
F.E. Hanson, Ltd
Arlington, VA.
August 31, 2004
BIOACCELERATE, INC.
1
(A Development Stage Company)
CONSOLIDATED BALANCE SHEET
As of As of
May 31,2004 May 31,2003
------------ ------------
ASSETS
Current Assets
Cash $ 1,076,462 $ 0
Marketable Securities 16,875,000 0
Accounts receivable 547,762 3
------------ ------------
Current Assets 18,499,217 3
Investments in affiliates 3,651,162 0
Plant, property and equipment 47,888 0
Intangibles 16,331202 0
------------ ------------
TOTAL ASSETS $ 38,529,469 $ 3
============ ============
LIABILITIES AND SHAREHOLDERS EQUITY
Current Liabilities
Accounts Payable $ 1,062,211 $ 883,656
Accrued Expenses 192,351 0
------------ ------------
Total Current Liabilities 1,254,562 883,656
Other Liabilities
Loan Payable 1,242,783 0
Deferred income taxes 6,800,000 0
Minority Interest 6,820,830 0
------------ ------------
TOTAL LIABILITIES $ 16,118,175 $ 883,656
Stock Equity
Common Stock. $.001 par value
Authorized 25,000,000 Shares,
Issued and Outstanding
24,893,114 and 2 shares 24,893 3
Additional Paid in Capital 15,420,930 0
Deficit Accumulated During the
Development Stage (2,948,902) (848,664)
Other Comprehensive Income 9,914,373 (34,992)
------------ ------------
Total Stockholders Equity 22,411,294 (883,653)
TOTAL LIABILITIES AND
STOCKHOLDERS EQUITY $ 38,529,469 $ 3
============ ============
The accompanying notes and accountants report are an integral part of these
financial Statements
2
BIOACCELERATE, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENT OF INCOME (LOSS)
For the For the From
Year Ended Year Ended Nov 1,2002 (Inception)
May 31,2004 May 31,2003 to May 31, 2004
------------ ----------- ----------------------
TOTAL REVENUE $ 0 $ 0 $ 0
OPERATING EXPENSES:
General And Administrative 1,180,681 848,664 2,029,345
Research And Development 717,694 0 717,694
------------ ----------- ------------
Total Operating Expenses 1,898,375 848,664 2,747,039
Operating Loss $ (1,898,375) $ (848,664) (2,747,039)
Equity in Losses of Affiliate 362,441 0 362,441
Minority interest (160,578) 0 (160,578)
------------ ----------- ------------
NET LOSS $ (2,100,238) $ (848,664) (2,948,902)
NET LOSS PER SHARE (.09) (424,332)
Weighed Average Number of
Shares Outstanding 22,259,059 2
The accompanying notes and accountants report are an integral part of these
financial Statements.
3
BIOACCELERATE, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
From Nov 1, 2002
Year Ended Year Ended (Inception) to
May 31, 2004 May 31, 2003 May 31, 2004
------------ ------------ ----------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss (2,100,238) (848,664) (2,948,902)
Adjustments to reconcile net profit to
net cash (used) in operating activities:
Depreciation and other non-cash charges 2,592 0 2,592
Addback share of losses in associate companies 362,441 0 362,441
Changes in operating assets and liabilities
(Increase in other accounts receivable) (547,759) 887,747 339,988
Increase in accounts payable 174,464 0 174,464
Increase in accrued expenses 192,351 0 192,351
----------- ----------- -----------
NET CASH PROVIDED BY/ (USED IN) OPERATING ACTIVITIES: (1,916,149) 39,083 (1,877,066)
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital Expenditure (50,480) 0 (50,480)
Investment in associate (4,001,815) 0 (4,001,815)
Payment for purchase of subsidiaries (16,623,688) 0 (16,623,688)
- net of cash acquired
Increase in minority interest relating to 6,820,830 0 6,820,830
subsidiaries acquired during the period
----------- ----------- -----------
NET CASH (USED) IN INVESTING ACTIVITIES: (13,855,153) 0 (13,855,153)
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock 15,445,820 0 15,445,820
- net of fund raising expenses
Increase in loans payable 1,242,783 0 1,242,783
----------- ----------- -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 16,688,603 0 16,688,603
----------- ----------- -----------
EFFECT OF EXCHANGE RATE CHANGES 159,154 (39,083) 120,071
----------- ----------- -----------
NET CHANGE IN CASH AND CASH EQUIVALENTS 1,076,455 0 1,076,455
----------- ----------- -----------
CASH AND CASH EQUIVALENTS AT
BEGINNING OF THE PERIOD 0 0 0
----------- ----------- -----------
CASH AND CASH EQUIVALENTS AT
END OF THE PERIOD 1,076,455 0 1,076,455
The accompanying notes are an integral part of these financial statements.
4
BIOACCELERATE INC - SUCCESSOR TO BIOACCELELERATE LIMITED
(A development stage company)
Consolidated Stockholders' Equity Statement For the periods to May 31,2004
Total
Common Preference Common Preference Additional
Stock Stock Stock Issued Stock Issued Paid Up
Par Value $ Par Value $ Capital
US $ US $ US $
Balance as at Nov 1, 2002 5,000,000 -- 5,000 -- --
Net Loss for the Year Ended May 31.2003
Foreign currency translation adjustments
------------------------- ---------------------------------------------
Balance as at May 31, 2003 5,000,000 -- 5,000 -- --
One for five Reverse Stock Split August 31, 2003 (4,000,000) -- 4,000 -- --
Net Loss for the Quarter Ended August 31, 2003
Foreign currency translation adjustments
Balance as at August 31, 2003 1,000,000 -- 1,000 -- --
Shares issued for acquisition of Pharma
Manufacturing Services Ltd on
September 1, 2003 18,000,000 -- 18,000
Shares Issued September 1,2003 625,014 -- 625 1,561,910
Net Loss for the Quarter Ended November
30, 2003
Foreign currency translation adjustments
Unrealised gains on available-for-sale
securities net of income taxes of $566,000
------------------------- ---------------------------------------------
Balance as at November 30, 2003 19,625,014 -- 19,625 -- 1,561,910
Shares Issued February, 2004 - net of funding
Costs 5,100,000 -- 5,100 4,811,681
Net Loss for the Quarter Ended February 29
2004
Foreign currency translation adjustments
Unrealised gains on available for -sale
securities net of income taxes of $1,621,000
------------------------- ---------------------------------------------
Balance as at February 29,2004-08-18 24,725,014 -- 24,725 -- 6,373,591
Shares Issued May, 2004 - net of 168,100 -- 168 -- 167,832
funding costs
Additional paid in capital to shares issued 8,879,507
by subsidiary companies during
the period
Unrealised gains on available-for-sale securities
Net of income taxes of $4,613,000
Net Loss for the Quarter Ended May 31, 2004
Foreign currency translation adjustments
------------------------- ---------------------------------------------
Balance as at May 31, 2004-08-18 24,893,114 -- 24,893 -- 15,420,930
Other TOTAL
Accumulated Accumulated STOCKHOLDER'S
Deficit Income EQUITY
US $ US $ US $
Balance as at Nov 1, 2002 -- -- 5,000
Net Loss for the Year Ended May 31.2003 (848,664) (848,664)
Foreign currency translation adjustments (39,083) (39,083)
-------------------------------------------------
Balance as at May 31, 2003 (848,664) (39,083) (882,747)
One for five Reverse Stock Split August 31, 2003 (4,000)
Net Loss for the Quarter Ended August 31, 2003 (584,927) -- (584,927)
Foreign currency translation adjustments 47,885 47,885
Balance as at August 31, 2003 (1,433,591) 8,802 (1,423,789)
Shares issued for acquisition of Pharma
Manufacturing Services Ltd on
September 1, 2003 18,000
Shares Issued September 1,2003 -- -- 1,562,535
Net Loss for the Quarter Ended November
30, 2003 (61,600) -- (61,600)
Foreign currency translation adjustments -- --
Unrealised gains on available-for-sale 839,000 839,000
securities net of income taxes of $566,000
-------------------------------------------------
Balance as at November 30, 2003 (1,495,191) 847,802 934,146
Shares Issued February, 2004 - net of funding
Costs -- -- 4,816,781
Net Loss for the Quarter Ended February 29
(1,089,256) -- (1,089,256)
Foreign currency translation adjustments 22,091 22,091
Unrealised gains on available for -sale
securities net of income taxes of $1,621,000 2,402,529 2,402,529
-------------------------------------------------
Balance as at February 29,2004-08-18 (2,584,447) 3,272,422 7,086,291
Shares Issued May, 2004 - net of -- -- 168,000
funding costs
Additional paid in capital to shares issued 8,879,507
by subsidiary companies during
the period
Unrealised gains on available-for-sale securities
Net of income taxes of $4,613,000 6,833,471 6,833,471
Net Loss for the Quarter Ended May 31, 2004 (364,455) (364,455)
Foreign currency translation adjustments (191,520) (191,520)
-------------------------------------------------
Balance as at May 31, 2004-08-18 (2,948,902) 9,914,373 22,411,294
5
BIOACCELERATE, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
May 31,2004
NOTE 1 - NATURE OF BUSINESS
DESCRIPTION OF COMPANY: Westminster Medical, Inc. (the "Company") is a
for-profit corporation incorporated under the laws of the State of Delaware on
December 29,1995 as Tallman Supply Corp. On January 14, 1999 the Company changed
its name to Westminster Auto Retailers, Inc. On July 25, 2003 the Company
changed its name to Bioaccelerate, Inc.
The Company is in a development stage examining opportunities in both start up
and emerging companies in the biopharmaceutical sector. On August 31, 2003 the
stockholders agreed to a 5 to 1 reverse split of the issued share capital.,
reducing the common stock from 5 million to 1 million.shares. The Company
acquired Pharma Manufacturing Services Limited (PMSL) on September 1st 2003 by
the issue of 18,000,000 post reverse split shares to the stock holders of that
company. The effect was to transfer operational control of the Company to the
former shareholders and Directors of Pharma Manufacturing Services Limited,
making PMSL the acquirer for accounting purposes. PMSL subsequently changed its
name to Bioaccelerate Limited.
Bioaccelerate Inc. was formed to take advantage of the burgeoning
biopharmaceutical marketplace through the development of compounds and also
companies that will commercialize those compounds. The Companies in which it
currently has equity interests focus on five medical areas, being Cancer,
Cardiovascular, Lifestyle, Central Nervous System, and Anti-viral, all areas
with a current combined market value of $200 billion.
Bioaccelerate is a company that acquires and develops pharmaceutical assets,
both corporate and physical. As at May 31, 2004 the Company has investments in
15 companies, 3 quoted biopharmaceutical companies and majority equity interests
in 12 private Biopharmaceutical companies.
Ten of the companies referred to were founded by PMSL. They are all private,
development stage companies involved in licensing technology, that is then
developed. In addition to the equity interests in the twelve private companies
above, The Company also has, through its acquisition on September 1 2003 of
Bioaccelerate Ltd, formerly Pharma Manufacturing Services Ltd, an option to
purchase 500,000 shares of Common stock of Bioenvision Inc, an AMEX quoted
corporation. The option was granted at $1.25 per share and has been valued in
the balance sheet at the excess of the value based on the market price ruling on
the accounts date ($9.70) over the value at the option price, a total of
$4,225,000 at May 31 2004. Any unrealized gain or loss during the period is
reported in accumulated other comprehensive losses in the stockholders equity.
The Company also acquired shares in two quoted companies, Enhance Biotech Inc
and Evolve Oncology Inc.
Enhance Biotech Inc (EBOI), which has a number of lifestyle compounds under
development, is a 27.2% affiliate of the Company and is accounted for under the
equity method. The Company owns 7,496,760 shares, which were quoted at $3.30 on
May 31, 2004 This investment is carried at cost of $4,001,815 less the Company's
proportional share of the losses incurred in the period of $362,441.
In addition the Company holds 5,500,000 options and warrants to acquire shares
of Enhance Biotech, Inc. at an exercise price of $1. The options are exercisable
through February 12, 2008 and the warrants are exercisable through May 20, 2009.
The options and warrants are carried in the balance sheet at the excess of the
value at market price over the value at the option and warrant price, which
amounted to $12,650,000 at May 31 2004. Any unrealized gain or loss over the
accounting period was reported in accumulated other comprehensive income.
5
Evolve Oncology Inc holds licenses to develop a number of cancer treatment
compounds its common stock was quoted at $4.15 on May 31, 2004. The Company
currently holds 23,857,000 common shares, representing 55 percent of Evolves
total issued stock at May 31 2004, and has held a majority interest since
February 2, 2004 following Evolve's issue of 4,500,000 shares for the
acquisition of Antibody Technology Inc. Therefore the accounts of Evolve
Oncology Inc have been consolidated with effect from that date and included in
the Company's Balance Sheet at a net value of $8,336,567 after eliminating
minority interests.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
A. BASIS OF PRESENTATION: These consolidated financial statements
include the accounts of Bioaccelerate, Inc. and its subsidiaries
(the Company), with appropriate eliminations of inter-company
balances and transactions. The financial statements are prepared on
the accrual basis of accounting. Accordingly revenue is recognized
when earned and expenses when incurred.
B. USE OF ESTIMATES: The preparation of financial statements in
conformity with generally accepted accounting principles in the
United States of America requires 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 reports
could differ from those estimated. Significant estimates in the
financial statements include the assumption that the Company will
continue as a going basis.
C CERTAIN RISKS AND UNCERTAINTIES: The Company is subject to risks
common to companies in its industry, Including, but not limited to,
new technological innovations, dependence on key personnel,
protection of proprietary Technology, compliance with government
regulations, uncertainty of market acceptance of products, product
liability and the need to obtain financing.
D PRINCIPLES OF CONSOLIDATION: The consolidated financial statements
include the Assets and liabilities of the majority owned
subsidiaries, adjusted to allow for minority interests. All
significant inter- company transactions have been eliminated
E CONCENTRATIONS of CREDIT RISK: The Company has no significant off
balance sheet Concentrations of credit risk such as foreign exchange
contracts, option contracts or other foreign Hedging arrangements.
F CASH AND CASH EQUIVALENTS: For the purpose of these financial
statements, the Company considers all highly liquid debt instruments
purchased and realisable within three months or less to be cash
equivalents to the extent that they are not held for investment
purposes.
G MARKETABLE SECURITIES: The Company has classified its marketable
securities as available for sale in accordance with Statement of
Financial Accounting Standard ("SFAS") No.130, "Accounting for
Certain Investment in Debt and Equity Securities". The marketable
securities are reported at fair value with unrealized gains and
losses recorded as a separate component of stockholders' equity net
of tax. The specific identification method is used to determine
gains and losses when securities are sold.
H FAIR VALUE OF FINANCIAL INSTRUMENTS: The carrying amounts of certain
of the Company's financial instruments, including cash and cash
equivalents and accounts payable approximate fair value due to their
short maturities. Based on borrowing rates currently available to
the Company for loans with similar terms, the carrying value of its
debt obligations approximate fair value.
7
I RESEARCH AND DEVELOPMENT: Costs and expenses that are clearly
identified as research and development are charged to expense as
incurred in accordance with FASB statement No. 2 "Accounting for
Research and Development ".
J FOREIGN CURRENCY TRANSLATION: The Company's primary functional
currency is the British Pound. Assets and liabilities are translated
using the exchange rates in effect at the balance sheet date.
Expenses are translated at the average exchange rates prevailing
during the year. Translation gains or losses not reflected in
earnings are reported in accumulated other comprehensive losses in
the stockholders equity. The translation adjustment amounted to a a
gain of $120,071 in this accounting period.
K DEPRECIATION POLICY: The Company depreciates its assets over their
useful lives on The following basis:-
Tangible assets at 25% per annum,of the net book value of the
assets.
Intangible assets are subject to an annual review for impairment as
required under SFAS 144.
L MINORITY INTERESTS: Minority Interests represent the interest of
third parties in the net assets of certain subsidiary companies.
M LONG-LIVED ASSETS: The Company periodically reviews the value of
long-lived assets for impairment whenever events or changes in
business circumstances indicate that the carrying amount of the
assets may not be fully recoverable or that the useful lives of
these assets are no longer appropriate. Each impairment test is
based on a comparison of the future undiscounted cash flows arising
from the assets with the carrying valued of the asset. If impairment
is indicated, the asset is written down to its estimated fair value
on a discounted cash flow basis.
N INCOME TAXES: The Company recognizes deferred tax liabilities and
assets for the expected futures tax consequences of events that have
been included in the financial statements or tax returns. Deferred
tax liabilities and assets are determined based on the difference
between the financial statement and tax basis of assets and
liabilities using enacted tax rates in effect for the year in which
the differences are expected to reverse. A valuation allowance is
established if it is more likely than not that all or a portion of
the deferred tax asset will not be realized. Accordingly, a
valuation allowance has been established for the full amount of the
deferred tax asset.
O NET LOSS PER SHARE: Basic net loss per share is computed using the
weighted average number of shares of common stock outstanding.
NOTE 3 - GOING CONCERN
The Company's financial statements have been prepared on the basis of the
accounting principles applicable to a going concern which assumes that the
Company will continue in operation however its longer term prospects are
dependent upon raising additional capital, and ultimately, having net income.
The Company's limited operating history, including its losses and no revenues,
primarily reflect the operations of its early stage. As a result, the Company
had from time of inception to May 31,2004 no revenue and a net loss from
operations of $(2,948,902). As of May 31,2004, the Company had net capital of
$22,411,294 due to issuance of stock.
The Company will require additional capital principally to fund its expansion
program, for general and administrative expenses and to fund costs associated
with start ups. It is not anticipated that the Company will be able to meet its
financial obligations through internal net revenue in the foreseeable future.
Therefore, future sources of liquidity will be limited to the Company's ability
to obtain additional debt or equity funding.
8
NOTE 4 - NON-CASH FINANCIAL TRANSACTIONS
Non-cash financing transactions consisting of the cost of contributed services,
contributed rent and the related additional paid in capital contributed by
shareholders have been included in expenses and additional paid in capital,
respectively, in the accompanying financial statements.
NOTE 5 - LEGAL MATTERS
As of the date of this report the Directors have no knowledge of any pending or
threatened legal proceedings.
NOTE 6 - MERGER WITH PHARMA MANUFACTURING SERVICES LIMITED
On September 1,2003 Bioaccelerate, Inc. acquired all of the outstanding shares
of Pharma Manufacturing Services Limited, a privately held company incorporated
under the laws of the United Kingdom. In connection with the merger transaction,
the company issued 18,000,000 shares of common stock. Pharma Manufacturing is a
development stage company that acquires and develops pharmaceutical compounds
and products. The company funds the development of early-stage compounds and
Phase II/III clinical development. On the acquisition date the company had a
majority equity interest in nine biotech companies that are developing new drugs
in five therapeutic areas; Cancer, Cardiovascular, Lifestyle, Central Nervous
System, and Anti-Infective.
On the acquisition date Pharma Manufacturing owned:
An option to purchase 500,000 shares of common stock of Bioenvision,
Inc., an American Stock Exchange listed company. The option was granted
at $1.25 per share and Pharma Manufacturing carried the investment at
no cost;
An investment in Enhance Biotech, Inc. including 3,321,750 common
shares and a warrant to purchase 1,500,000 common shares at $1.00 per
share (adjusted for 3:2 stock split), carried at no cost; and
An investment of 14,250,000 common shares of Evolve Oncology, Inc.
(adjusted for 2:1 stock split) carried at par value of $.001).
NOTE 7 - LOAN PAYABLE
The Company has a $1,242,783 loan secured by all the assets and future assets of
the Company with an interest rate equal to the Applicable Federal Rate, as
defined in Section 1247(d) of the internal Revenue Code. This amount has been
drawn against a total facility of $2.5 million provided by Technology Finance
Inc. As of May 31,2004, the interest rate was 1.5%. The loan matures in two
years or upon the earlier closing of a transaction, or series of related
transactions, in which the Company receives at least $15 million of gross
proceeds of either a debt or equity financing or if there is a Change of
Control. A Change of Control is defined as a merger, consolidation or any other
combination of the Company with another entity, the sale of all or substantially
all of the assets of the Company, or the purchase of 25% of the voting stock of
the Company in a single transaction or a series of related transactions. Under
the terms of the loan the loan can be capitalized, in whole or in part, at any
time at the price of the last equity placement the company has conducted , at
the option of the lender, at any time during the term of the facility.
NOTE 8 - INVESTMENT IN AFFILIATES
Operating results include the Company's proportionate share of loss from
affiliates, which consist of an unconsolidated investment accounted for under
the equity method of accounting. As of May 31,2004 the Company owned 7,496,760
9
shares or 27.2% of Enhance Biotech, Inc., a publicly held company. The Company
recorded a loss of $362,441 for the year ended May 31, 2004 and carried the
investment at $3,651,162 on the balance sheet.
NOTE 9 - PROPERTY AND EQUIPMENT
Year Ended Year Ended
May 31,2004 May 31,2003
Computers, software, and office
Equipment $ 50,480 $ -0-
Less: accumulated depreciation 2,592 -0-
----------- ---------
Property and Equipment; net 47,888 -0-
----------- ---------
The equipment has a useful life of four years and depreciation expense was $2592
for the year ended May 31,2004.
NOTE 10 - STOCKHOLDER'S EQUITY
On September 1,2003 the Company issued 18,000,000 shares of common stock in
connection with the merger with Pharma Manufacturing Services Limited, a
privately held company.
On September 1,2003 the Company issued 625,014 shares in satisfaction of
$1,562,535 of past due liabilities.
In February 2004 the Company sold 5,100,000 shares at $1.00 per share and
received net proceeds of $4,816,781 after payment of underwriting discounts and
commissions and other expenses.
NOTE 11 - COMMITMENTS AND CONTINGENCES
The Company has offices in New York and London, England.
Bioaccelerate Inc holds a licence to occupy 1,000 square feet of offices at 712,
Fifth Avenue, 19th Floor, New York at a cost of $9,000 per month.
Bioaccelerate Limited occupies 5,000 square feet of offices at Savannah House,
Charles II Street, London. The premises are held on a three year lease from July
28, 2004,with an optional break at half term, at a rent of $11,500 per month.
Part of the space is currently sublet on monthly licences generating income of
$18,000 per month including contributions to rates and service charges.
NOTE 12 - INCOME TAXES
Deferred income taxes are recognized for the extended future tax consequences
attributable to that increased value of Marketable Securities.
NOTE 13 - SUBSEQUENT EVENTS
On August 6, 2004, Technology Finance Inc excerised its option to convert $2.5m
of loans into equity as per the terms of their loan agreement with the company.
On August 12, 2004, Enhance Biotech, Inc., a publicly held company and 27.2%
owned equity investment, signed a definitive merger agreement with Ardent
Pharmaceuticals, Inc., the world's leader in discovering and developing delta
compounds. Bioaccelerate, Inc. owns 7,496,760 common shares or 27.2% of the
company and also owns a warrant to purchase 5,500,000 at $1.00 per share.
10
Under the terms of the agreement the Enhance shareholders will retain 55% of the
stock in the merged entity.
11
MOBILE DESIGN CONCEPTS, INC.
AND BIOACCELERATE, INC.
PROFORMA CONDENSED COMBINED FINANCIAL STATEMENTS
[Unaudited]
The following unaudited proforma condensed combined balance sheet
aggregates the balance sheet of Mobile Design Concepts, Inc. (a Nevada
corporation) ("PARENT") as of June 30, 2004 and the balance sheet of
Bioaccelerate, Inc. (a Delaware corporation) ("SUBSIDIARY") as of May 31,
2004, accounting for the transaction as a reorganization of SUBSIDIARY in
a manner similar to a reverse purchase with the issuance of common stock
of the PARENT for all the issued and outstanding shares of the SUBSIDIARY
and using the assumptions described in the following notes, giving effect
to the transaction, as if the transaction had occurred as of the end of
the period. The transaction was not completed as of June 30, 2004.
The following unaudited proforma condensed combined statement of
operations combines the results of operations of PARENT for the twelve
months ended June 30, 2004 and the results of operations of SUBSIDIARY for
the year ended May 31, 2004 as if the transaction had occurred at the
beginning of the periods.
The proforma condensed combined financial statements should be read in
conjunction with the separate financial statements and related notes
thereto of PARENT and SUBSIDIARY. These proforma financial statements are
not necessarily indicative of the combined financial position, had the
acquisition occurred at the end of the periods indicated above, or the
combined results of operations which might have existed for the periods
indicated or the results of operations as they may be in the future.
MOBILE DESIGN CONCEPTS, INC.
AND BIOACCELERATE, INC.
PROFORMA CONDENSED COMBINED BALANCE SHEET
June 30, 2004
ASSETS
[Unaudited]
Mobile Design
Concepts, Inc. Bioaccelerate, Proforma
June 30, 2004 Inc. May 31, 2004 Increase Proforma
[PARENT] [SUBSIDIARY] (Decrease) Combined
____________ _________________ __________ ____________
ASSETS:
Cash $ 25,294 $ 1,076,455 $ $ 1,101,749
Marketable
securities - 16,875,000 16,875,000
Accounts
receivable - 547,762 547,762
Investments in
affiliates - 3,651,162 3,651,162
Plant, property
and equipment - 47,888 47,888
Intangibles - 16,331,202 16,331,202
Investment in [B] 32,325
subsidiary - - [C](32,325) -
____________ _________________ __________ ____________
$ 25,294 $ 38,529,469 $ - $ 38,554,763
____________ _________________ __________ ____________
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Accounts payable $ 475 $ 1,062,211 $ $ 1,062,686
Accrued expenses - 192,351 192,351
Loan payable - 1,242,783 1,242,783
Deferred income
taxes - 6,800,000 6,800,000
Minority interest - 6,820,830 6,820,830
____________ _________________ __________ ____________
Total Liabilities 475 16,118,175 - 16,118,650
____________ _________________ __________ ____________
STOCKHOLDERS' EQUITY:
Preferred stock - - -
[A] (3,438)
[B] 32,325
Common stock 4,813 24,893 [C](24,893) 33,700
Additional paid [A] 3,438
in capital 68,770 15,420,930 [C](56,196) 15,436,942
Deficit
accumulated
during development
stage (48,764) (2,948,902)[C] 48,764 (2,948,902)
Other Comprehensive
Income - 9,914,373 9,914,373
____________ _________________ __________ ____________
Total
Stockholders'
Equity 24,819 22,411,294 - 22,436,113
____________ _________________ __________ ____________
$ 25,294 $ 38,529,469 $ - $ 38,554,763
____________ _________________ __________ ____________
See Notes To Unaudited Proforma Condensed Financial Statements.
MOBILE DESIGN CONCEPTS, INC.
AND BIOACCELERATE, INC.
PROFORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
[Unaudited]
Mobile Design
Concepts, Inc. Bioaccelerate, Proforma
June 30, 2004 Inc. May 31, 2004 Increase Proforma
[PARENT] [SUBSIDIARY] (Decrease) Combined
____________ _________________ __________ ____________
REVENUE $ - $ - $ $ -
____________ _________________ __________ ____________
EXPENSES:
General and
administrative 6,560 1,180,681 1,187,241
Research and
development - 717,694 717,694
____________ _________________ __________ ____________
Total Expenses 6,560 1,898,375 1,904,935
____________ _________________ __________ ____________
INCOME (LOSS) FROM
OPERATIONS (6,560) (1,898,375) (1,904,935)
____________ _________________ __________ ____________
OTHER INCOME (EXPENSE)
Equity in losses
of affiliate - (362,441) (362,441)
Minority interest - 160,578 160,578
____________ _________________ __________ ____________
Total Other
Income (Expense) - (201,863) (201,863)
INCOME (LOSS) FROM
OPERATIONS BEFORE
PROVISION FOR TAXES (6,560) (2,100,238) (2,106,798)
PROVISION FOR
INCOME TAXES - - -
____________ _________________ __________ ____________
INCOME (LOSS) FROM
CONTINUING
OPERATIONS (6,560) (2,100,238) (2,106,798)
____________ _________________ __________ ____________
DISCONTINUED OPERATIONS:
Loss from
operations of
discontinued
bison breeding
business - - -
____________ _________________ __________ ____________
NET INCOME (LOSS) $ (6,560) $ (2,100,238)$ - $ (2,106,798)
____________ _________________ __________ ____________
BASIC NET (LOSS) PER COMMON SHARE $ (.06)
____________
See Notes To Unaudited Proforma Condensed Financial Statements.
MOBILE DESIGN CONCEPTS, INC.
AND BIOACCELERATE, INC.
NOTES TO PROFORMA CONDENSED COMBINED FINANCIAL STATEMENTS
[Unaudited]
NOTE 1 - MOBILE DESIGN CONCEPTS, INC.
Mobile Design Concepts, Inc. ["PARENT"] was organized under the laws
of the State of Nevada on March 10, 2000. PARENT was formed to
design, manufacture, and lease mobile kiosks and other structures.
The Company discontinued its mobile kiosk business effective December
31, 2002 and has been considering other business opportunities since
that time.
NOTE 2 - BIOACCELERATE, INC.
Bioaccelerate, Inc. ["SUBSIDIARY"] was organized under the laws of
the State of Delaware on December 29, 1995 as Tallman Supply Corp.
On January 14, 1999, SUBSIDIARY changed its name to Westminister Auto
Retailers, Inc. and on July 25, 2003, SUBSIDIARY changed its name to
Bioaccelerate, Inc. SUBSIDIARY plans to acquire and develop
pharmaceutical assets, both corporate and physical.
NOTE 3 - PROFORMA ADJUSTMENTS
On September 23, 2004, SUBSIDIARY was acquired by PARENT pursuant to
an Agreement and Plan of Reorganization signed August 6, 2004. The
agreement called for PARENT to issue up to 32,325,000 post-split
shares of common stock to the shareholders of SUBSIDIARY for at least
80% and up to 100% of the outstanding shares of SUBSIDIARY's common
stock in a transaction wherein SUBSIDIARY would became a wholly-
owned subsidiary of PARENT. PARENT expects to acquire 100% of
SUBSIDIARY.
The ownership interests of the former owners of SUBSIDIARY in the
combined enterprise will be greater than that of the ongoing
shareholders of PARENT and, accordingly, the management of SUBSIDIARY
will assume operating control of the combined enterprise.
Consequently, the acquisition is accounted for as the
recapitalization of SUBSIDIARY, wherein SUBSIDIARY purchased the
assets of PARENT and accounted for the transaction as a reverse
purchase for accounting purposes.
Proforma adjustments on the attached financial statements include the
following:
[A]To record the 3.5-for-1 reverse stock split.
[B]To issue 32,325,000 shares of common stock pursuant to the
Agreement and Plan of Reorganization.
[C]To eliminate the equity accounts of SUBSIDIARY and to eliminate
the accumulated deficit of PARENT to reflect the purchase by
SUBSIDIARY for accounting purposes.
MOBILE DESIGN CONCEPTS, INC.
AND BIOACCELERATE, INC.
NOTES TO PROFORMA CONDENSED COMBINED FINANCIAL STATEMENTS
[Unaudited]
NOTE 4 - PROFORMA (LOSS) PER SHARE
The proforma (loss) per share is computed based on the number of
shares outstanding, after adjustment for shares issued in the
acquisition, as though all shares issued in the acquisition had been
outstanding from the beginning of the periods presented.