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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
For the Quarter ended October 31, 1998
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period to
Commission file number - 0-25792
BIONET TECHNOLOGIES, INC.
(Exact name of Registrant as specified in its charter)
NEVADA 84-1247085
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification Number)
3035 Staysail Lane, Jupiter, Florida 33477
(Address of principal executive offices) (Zip Code)
(561) 745-1949
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
and Exchange Act of 1934 during the preceding twelve months (or such
shorter period that the Registrant was required to file such reports),
and (2) has been subject to file such filing requirements for the
past thirty days. Yes x No
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the close of the period covered by this report:
7,246,606 Shares of Common Stock ($.001 par value)
(Title of Class)
Transitional Small Business Disclosure Format (check one):
Yes No x
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PART I: Financial Information
ITEM 1 - Financial statements
ITEM 2 - Management's' discussion and analysis of financial
condition and results of operations
PART II: Other Information
ITEM 6 - Exhibits and Reports on Form 8-K
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PART I
Item 1. Financial Statements:
BioNet Technologies, Inc.
Consolidated Balance Sheet
October 31, 1998
(Unaudited)
ASSETS
<APTION>
Current assets:
Cash and cash equivalents $ 60,202
Trading securities 175,838
Accounts receivable - other 700
Inventory 11,890
------------
Total current assets 248,630
Property and equipment, at cost, net of
accumulated depreciation of $9,562 98,465
Other assets 11,326
------------
$ 358,421
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 56,159
Accrued expenses 27,667
------------
Total current liabilities 83,826
Loans from shareholder 233,970
Stockholders' equity:
Common stock, no par value,
20,000,000 shares authorized,
7,246,606 shares issued and outstanding 7,247
Additional paid in capital 2,045,911
Subscriptions to common stock 160,965
Accumulated deficit (2,173,498)
-----------
40,625
$ 358,421
See accompanying notes to consolidated financial statements.
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BioNet Technologies, Inc.
Consolidated Statements of Operations
(Unaudited)
Three Months Ended October 31, Nine Months Ended October 31,
1998 1997 1998 1997
<c
Revenues $ - $ - $ - $ -
Costs and expenses
General and administrative 196,776 24,952 392,716 425,960
Charge off of acquired research and development 476,358 - 1,455,186 -
----------- ---------- ----------- -----------
(Loss) from operations (673,134) (24,952) (1,847,902) (425,960)
Other income and (expense):
Gain (loss) realized from sale of investments (1,517) (4,300) 35,435 63,727
Unrealized gain (loss) on investments 7,593 (46,878) 9,578 174,758
----------- ---------- ----------- -----------
6,076 (51,178) 45,013 238,485
(Loss) before income taxes (667,058) (76,130) (1,802,889) (187,475)
Provision for income taxes - - - -
----------- ---------- ----------- -----------
Net (loss) $ (667,058) $ (76,130) $(1,802,889) $ (187,475)
Basic earnings (loss) per share:
Net income (loss) $ (0.09) $ (0.03) $ (0.34) $ (0.06)
Weighted average shares outstanding 7,208,949 2,964,485 5,301,824 2,914,559
See accompanying notes to consolidated financial statements.
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BioNet Technologies, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
Nine Months Ended October 31,
1998 1997
Net cash provided by (used in)
operating activities $ (303,400) $ (237,523)
Cash flows from investing activities:
Proceeds from sale of investments 71,220 165,954
Purchase of fixed assets (18,812) (1,000)
----------- ----------
Net cash provided by (used in) investing activities 52,408 164,954
Cash flows from financing activities:
Proceeds from sale of common stock 1,550 62,000
Proceeds from stock subscriptions 160,965 -
Advances from stockholders 147,151 -
----------- ----------
Net cash provided by (used in) financing activities 309,666 62,000
Increase (decrease) in cash 58,674 (10,569
Cash and cash equivalents,
beginning of period 1,528 10,943
----------- ----------
Cash and cash equivalents,
end of period $ 60,202 $ 374
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Bio Net Technologies, Inc.
(formerly Pratt Wylce & Lords, Ltd.)
Notes to Unaudited Financial Statements
October 31, 1998
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information and with the provisions of Regulation SB.
Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments
(consisting of normal recurring adjustments) considered necessary for a
fair presentation have been included. These financial statements should
be read in conjunction with information provided in the Company's report
on Form 10-K for the year ended January 31, 1998.
The results of operations for the periods presented are not necessarily
indicative of the results to be expected for the full year.
Income (loss) per share was computed using the weighted average number of
common shares outstanding.
Investments
At October 31, 1998 the Company had investments in common equity
securities as follows:
Historical Fair
Shares Cost Value
Level Best Golf, Inc. 3,500 5,250 -
Immune Technologies, Inc. 10,000 15,000 -
National Sorbents, Inc. 176,000 - 33,088
Advanced Sterilizer Technology 10,000 15,000 -
Casionvations, Inc. 29,100 43,650 72,750
Grand Slam Licensing, Inc. 10,000 15,000 -
Rubicon Sports, Inc. 25,000 37,500 62,500
Coronado Industries 15,000 9,000 7,500
First Nordic 55,000 5,000 -
--------- ---------
$145,400 $175,838
Fair value of National Sorbents Inc. and Coronado Industries as of April
30, 1998 was determined by reference to price quoted on the NASDAQ OTC
Bulletin Board. No public market exists for the other securities listed.
Fair value of these securities are based on the price paid by qualified
investors in recent private placements of the securities as adjusted by
management to reflect significant changes in investee company financial
conditions.
During the nine months ended October 31, 1998, the Company received net
proceeds from the sale of investment securities aggregating $123,935 and
recorded gains from the transactions aggregating $35,435. During the nine
months ended October 31, 1998, the Company issued 6,200 shares of its
restricted common stock to an investor for cash aggregating $1,550. The
price paid per share by the investors approximated the bid value of the
stock at the issue dates. Additionally, during the period, the Company
issued an aggregate of 85,136 shares of restricted common stock to two
individuals as reimbursement for expenses paid by the individuals in
behalf of the Company. The value of the services provided amounted to
$18,312.
Additionally, during June 1998, the Company issued 2,000,000 shares of
its restricted common stock to the shareholders of Immune Technologies,
Inc. (Immune) in exchange for certain assets of Immune. Immune had been
a client of the Company and the Company had advanced an aggregate of
$79,800 to Immune during 1997 and 1998 to assist in meeting that
company's working capital requirements. Immune, to date, has been
engaged in research and development of technology that it hopes to
utilize in the diagnosis and treatment of animal diseases. The assets
acquired from Immune consist of cash, inventory and fixed assets
aggregating $100,972 at the purchase date. The fair value of the stock
issued in the transaction amounted to $1,000,000. The excess of the fair
value of the purchase price over the assets acquired has been treated as
the purchase of research and development costs by the Company and has
been charged to expense during the current quarter.
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During August 1998, the Company agreed to issued 1,900,000 shares of its
restricted common stock to the certain shareholders of Greengold
Corporation (Greengold) in exchange for 80% of the outstanding common
stock of Greengold. Greengold, to date, has been engaged in research and
development of technology that it hopes to utilize in the recycling and
disposal of animal waste with the first application being hog waste.
Additional applications of its technology are in the treatment of
industrial and municipal water and waste treatment facilities. The
assets and liabilities of Greengold consist of patent costs of $7,500 and
accounts payable of $28,649 at the acquisition date. The fair value of
the stock issued in the transaction amounted to $475,000. The excess of
the fair value of the purchase price over the assets acquired has been
treated as the purchase of research and development costs by the Company
and has been charged to expense during the current quarter.
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Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
Trends and Uncertainties. Due to its change in business, the Company
can no longer operate on revenues from its consulting fee income. During
June, 1998, the Company issued 2,000,000 restricted Common Shares to
Immune Technologies, Inc. (Immune) in exchange for certain assets of
Immune. Immune had been a client of the Company and the Company had
advanced an aggregate of $79,800 to Immune during 1997 and 1998 to assist
in meeting that company's working capital requirements. Immune, to
date, had been engaged in research and development of technology that it
hopes to utilize in the diagnosis and treatment of animal diseases. The
assets acquired from Immune consist of cash, inventory and fixed assets
aggregating $100,972 at the purchase date.
During August 1998, the Company issued 1,900,000 of its restricted common
stock to the certain shareholders of Greengold Corporation (Greengold) in
exchange for 80% of the outstanding common stock of Greengold.
Greengold, to date, has been engaged in research and development of
technology that it hopes to utilize in the recycling and disposal of
animal waste with the first application being hog waste. Additionally
applications of its technology are in the treatment of industrial and
municipal water and waste treatment facilities. The assets and
liabilities of Greengold consist of patent costs of $7,500 and accounts
payable of $28,649 at the acquisition date.
The Company will have to seek equity or debt financing to continue
operations regarding its new acquisitions.
Capital Resources and Source of Liquidity. The Company currently has
no material commitments for capital expenditures. The Company can meet
its short term cash flow needs from the sale of investment securities
($123,935 for the nine months ended October 31, 1998), the proceeds from
stock subscriptions of $160,965 and advances from stock holders of
$147,151. In the long term, the Company shall utilize the sale of its
investment securities to meet its cash flow needs until the Company can
implement it s new business plan.
Going Concern. The Company is not currently delinquent on any of its
obligations even though the Company has ceased to generate revenue from
its consulting services.
For the nine months ended October 31, 1998, the Company received proceeds
from the sale of investments of $71,220 and purchased fixed assets of
$18,812. This resulted in net cash provided by investing activities of
$52,408 for the nine months ended October 31, 1998.
For the nine months ended October 31, 1997, the Company received the
proceeds from the sale of investment securities of $165,954 and purchased
fixed assets of $1,000 resulting in net cash provided by investing
activities of $164,954.
For the nine months ended October 31, 1998, the Company received from the
sale of common stock of $1,550 and proceeds from stock subscriptions of
$160,965. Additionally, the Company received advances of $147,151 from
stockholders for the nine months ended October 31, 1998. This resulted
in net cash provided by financing activities of $309,666 for the nine
months ended October 31, 1998.
Net cash provided by financing activities for the nine months ended July
31, 1997 was $62,000 from the sale of its common stock.
Results of Operations:
For the nine months ended October 31, 1998, the Company did not receive
any revenue due to the cessation of operations. The Company had general
and administrative expenses of $392,716 for the nine months ended October
31, 1998 which consisted primarily of salaries and wages of $181,727,
legal of $2,423, accounting of $10,975, travel of $16,130, advertising of
$890, telephone of $4,545, printing of $1,341, insurance of $29,928,
consulting of $67,900, moving expense of $18,489, rent of $6,133 and
other expenses of $52,235.
For the nine months ended October 31, 1997, the Company did not receive
any revenue due to the cessation of operations compared to revenues of
$3,155,616 for the nine months ended October 31, 1996. The Company had
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general and administrative expenses of $425,960 for the nine months ended
October 31, 1997 which consisted primarily of contract losses of
$220,968, salaries and wages of $118,003, legal of $15,700, accounting of
$4,571, travel of $15,062, advertising of $3,085, telephone of $8,317,
printing of $3,387, interest of $6,600 and other expenses of $30,170.
Plan of Operation. During January 1997, the Company determined that it
was unable to complete certain of its consulting projects and would be
unable to accept new consulting clients in the future. The Company
negotiated contract termination agreements with all of its active clients
that provide for the immediate discontinuance of consulting services.
The termination contracts provide that the Company retains as revenue all
cash paid to date and that the Company returns all or a major portion of
common stock issued to it by client companies.
The Company currently intends to acquire businesses and assets as may
provide gain for the shareholders. The Company has acquired certain
assets of Immune Technologies, Inc. and intends to continue to pursue
Immune's business plan. Additionally, the Company acquired 80% of the
outstanding common stock of Greengold Corporation and is continuing
Greengold's business plan. The Company may also choose to form
corporations for the purpose of pursuing such business ventures as are
deemed potentially profitable by the Board of Directors.
(a) Exhibits (numbered in accordance with Item 601 of Regulation S-K)
None
(b) Reports on Form 8-K
None
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: March 25, 1999
/s/ L. Alan Schafler
L. Alan Schafler, President