AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON
MARCH 16, 2004
REGISTRATION NO. _______________________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
BV PHARMACEUTICAL, INC.
(Name of small business issuer in our charter)
NEVADA
(State or other jurisdiction of incorporation or organization)
8099-12 72-1580091
---------------------------- ------------------------------------
(Primary standard industrial (I.R.S. Employer Identification No.)
classification code number)
2890 Vassar Street, Suite A
Reno, NV 89502
775.352.4160
(Address and telephone number of principal executive offices)
Michael J. Morrison, Chtd.
1495 Ridgeview Drive, Suite 220
Reno, NV 89509
775.827.6300
(Name, address and telephone of agent for service)
Approximate date of commencement of proposed
sale to the public: As soon as practicable after the
effective date of this Registration Statement.
If any of the Securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 (the "Securities Act"), check the following box: [ ]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration number of the earlier effective registration
statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
1
CALCULATION OF REGISTRATION FEE (1)
Title of class of Proposed maximum Amount of
securities to be registered aggregate offering price Registration Fee
and number of shares
- -----------------------------------------------------------------------------------------
Common Stock, no par value per share $1,387,420.00 $346.85
6,937,100 shares
TOTAL REGISTRATION FEE $346.85
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 (c).
Registrant hereby amends this registration statement on the date or dates as may
be necessary to delay its effective date until the registrant shall file a
further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with section 8(a) of the
securities act of 1933, or until the registration statement shall become
effective on the date as the Commission, acting pursuant to said section 8(a),
may determine.
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
commission. These securities may not be sold nor may offers to buy be accepted
prior to the time the registration statement becomes effective. This prospectus
shall not constitute an offer to sell nor the solicitation of an offer to buy
nor shall there be any sale of these securities in any state in which the offer,
solicitation or sale would be unlawful prior to registration or qualification
under the securities laws of any state.
BV PHARMACEUTICAL, INC.
6,937,100 shares of Common Stock
The registration statement of which this prospectus is a part relates to the
offer and sale of 6,937,100 shares of our common stock by the selling security
holders.
We are filing this registration statement on a voluntary basis, pursuant to
section 12(g) of the Securities Exchange Act of 1934 (the "Exchange Act"), in
order to ensure that public information is readily accessible to all
shareholders and potential investors, and to increase our access to financial
markets. In the event our obligation to file periodic reports is suspended
pursuant to the Exchange Act, we anticipate that we will continue to voluntarily
file such reports.
These securities involve a high degree of risk and should be considered only by
persons who can afford the loss of their entire investment. See "Risk Factors".
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.
The date of this preliminary prospectus is March 16, 2004.
TABLE OF CONTENTS
Page
Front Cover Page of Prospectus 2
Inside Front and Outside Back Cover Pages of Prospectus 3
Summary Information & Risk Factors 3
Use of Proceeds 9
Determination of Offering Price 9
Dilution 9
Selling Security Holders 9
Plan of Distribution 12
Legal Proceedings 13
Directors, Executive Officers, Promoters and Control Management 13
Security Ownership of Certain Beneficial Owners and Management 14
Description of Securities 15
Interest of Named Experts and Counsel 16
Disclosure of Commission Position on Indemnification for
Securities Act Liabilities 16
Description of Business 16
Management's Discussion and Analysis or Plan of Operation 16
Description of Property 23
Certain Relationships and Related Transactions 23
Market for Common Equity and Related Stockholder Matters 23
Executive Compensation 24
Financial Statements 24
Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure 32
Indemnification 32
Other Expenses of Issuance and Distribution 32
Recent Sales of Unregistered Securities 33
Exhibits 35
Undertakings 35
SUMMARY INFORMATION AND RISK FACTORS
PROSPECTUS SUMMARY
You should read carefully all information in the prospectus including its
detailed information and the financial statements and their explanatory notes
before making an investment decision.
Our Company is in the development stage and we have only produced nominal
revenues.
THE OFFERING
Securities Offered 6,937,100 shares of Common Stock.
Offering Price Per Share $.20
Offering The Shares are being offered by the
selling securities holders.
Proceeds The Company will receive no proceeds from
this offering.
Number of Shares Before the Offering: 37,480,100 Shares of
Outstanding Common Stock. After the Offering:
37,480,100 Shares of Common Stock
FINANCIAL SUMMARY INFORMATION
Because this is only a financial summary, it does not contain all the financial
information that may be important to you. You should also read carefully all the
information in this prospectus, including the financial statements included in
this prospectus and their explanatory notes.
Balance Sheet Data: 12/31/03 12/31/02 12/31/01
- ------------------- -------- -------- --------
CASH (1) $3,708 $0 $6,090
TOTAL ASSETS $3,708 $0 $6,090
TOTAL LIABILITIES $3,600 $0 $0
STOCKHOLDERS'EQUITY $108 $0 $6,090
(1) Subsequent to December 31, 2003, the Company issued two convertible
debentures in the principal amount of $25,000 each, for a total amount
of $50,000.00, to two (2) separate unrelated non-U.S. parties. The
accrued principal and interest on these debentures are convertible into
common shares of the Company on the basis of $0.20 per common share, at
the option of the debenture holder, at any time within 24 months from
the date of the debenture. These debentures bear interest at 10% per
annum on any unpaid principal balance, and the unpaid balance shall be
paid, on or before two (2) years from the date of the debentures, in
either cash or common shares, at the option of the holder.
RISK FACTORS
Our forward-looking statements are subject to a variety of factors that could
cause actual results to differ significantly from current beliefs and
expectations. In addition to the risk factors identified under the captions
below, the operation and results of our business are subject to risks and
uncertainties identified elsewhere in this registration statement, as well as
the following general risks and uncertainties:
o general economic conditions in the geographic areas that are
being targeted for our proposed services;
o the ability to achieve and maintain market penetration and
average per customer revenue levels sufficient to provide
financial viability to our proposed business; and
o fluctuations in the actual and forecast demand for our proposed
services.
RISKS RELATED TO OUR COMPANY AND PROPOSED BUSINESS
OUR STATUS AS A DEVELOPMENT STAGE COMPANY WITH NOMINAL REVENUES SUBJECTS YOUR
INVESTMENT TO A HIGH DEGREE OF RISK.
We only recently started our business operations and have nominal revenues. We
cannot assure that we will ever generate sufficient revenues to develop
successful operations, or make a profit. We have a limited operating history for
investors to evaluate our business strategy. As a result of our lack of any
significant operating history, we have limited insight into trends that may
emerge and affect our business. You must consider the risks and difficulties
frequently encountered by development stage companies. Therefore, your
investment is at high risk because we may fail in our business.
WE MAY HAVE SUBSTANTIAL NEAR-TERM CAPITAL NEEDS AND NO SOURCE OF ADDITIONAL
FUNDING.
We currently have a limited source of funds and nominal revenues which we expect
to sustain our operations, as proposed, for approximately 12 months. However,
depending on the development and activities of our business, and unforeseen and
unanticipated events in our business, we may require additional funding over the
next 12 months to develop our business. In such event, we may need immediate
additional funding. Our capital requirements will depend on many factors
including, but not limited to, the timing of further development of our DNA
accumulation and storage process. If adequate funds are not available, as and
when needed, we may be required to curtail operations or obtain funds by
entering into collaboration agreements on unattractive terms. Our inability to
raise capital could impair the technical and presentational aspects of our DNA
accumulation and storage process and our marketing abilities. In fact, if we do
not obtain the necessary funding, we may be forced to cease operations.
WE HAVE SUBSTANTIAL LONG-TERM CAPITAL NEEDS AND NO SOURCE OF ADDITIONAL FUNDING.
We anticipate we may need substantial additional financing, in amounts not yet
known or determined by us, in the next 12-24 months to further develop our DNA
Profile and Copyright process and to market our services. The level of
expenditures required for these activities will depend in part on whether we
develop and market our services independently or with other companies through
collaborative arrangements. At this time, we have no known source and have not
inquired into sources for collaborative arrangements. If adequate funds are not
available, we may be unable to develop our operations to a sufficient level to
generate revenues or become profitable.
WE HAVE A POOR FINANCIAL CONDITION AND MAY BE UNABLE TO ADEQUATELY DEVELOP OUR
BUSINESS OR EARN A PROFIT.
Because we have a very limited operating history, limited assets, and nominal
revenues, an investor cannot determine if we will ever be profitable. We will
likely experience financial difficulties during our operational development and
beyond. We may be unable to operate profitably, even if we develop operations
and generate revenues. We plan to generate revenues from licensing our
unpatented process for collection of DNA samples to marketing agents on a
geographical basis and accumulate and store of DNA samples in a copyright
compliant database, but there can be no assurance that we will be successful in
our plan of operations or generate a profit, or if our revenues will exceed our
costs. Our poor financial condition could adversely affect our ability to
provide an efficient accumulation and storage of DNA samples.
OUR MANAGEMENT WILL DEVOTE LIMITED ATTENTION TO OUR BUSINESS OPERATIONS AND THIS
MAY LIMIT THE DEVELOPMENT OF OUR BUSINESS.
Since we do not have sufficient cash available to pay our management for their
services, our management personnel will all be devoting their efforts to other
businesses and will only devote a portion of their time to our Company's
business. This lack of full-time attention from our management could result in
our business not developing as well or as fast as it otherwise could, or it may
result in the failure of our business.
WE HAVE LITTLE MANAGERIAL EXPERTISE IN THE DEVELOPMENT OR DISSEMINATION OF DNA
INFORMATION AND THIS MAY CAUSE OUR BUSINESS TO SUFFER.
Because our management has little experience in developing and disseminating DNA
information, or compiling and maintaining a database, our abilities in this area
may be limited and our business may suffer. Even if our management develops a
sufficient quantity of DNA information and database experience, it may be unable
to particularize or adapt it to the needs of website visitors or the marketplace
for such services.
OUR LACK OF A WELL-DEVELOPED BUSINESS PLAN MAKES IT DIFFICULT FOR YOUR TO
EVALUATE OUR BUSINESS.
Because we currently do not have a well-developed business plan, we may spend an
excessive amount of our financial and operational resources in development and
implementation of our business plan. We are entering into a field of business
that is not well established and we will be developing our business plan and
strategies as we proceed.
OUR LACK OF SUBSTANTIAL REVENUES AND PROFITS, COMBINED WITH OUR LOSSES, MAKE IT
DIFFICULT FOR US TO SUCCEED AS A BUSINESS.
We have nominal revenues and limited revenue sources, yet we have significant
costs and losses. Our DNA profile and copyright process has not been fully
developed. We cannot assure that we will obtain the necessary working capital to
fully develop it.
THERE IS NO PUBLIC MARKET FOR OUR COMMON STOCK AND YOU MAY BE UNABLE TO SELL
YOUR SHARES.
There is no established public trading market or market maker for our
securities. There can be no assurance that a market for our common stock will be
established or that, if established, a market will be sustained. Therefore, if
you purchase our securities you may be unable to sell them. Accordingly, you
should be able to bear the financial risk of losing your entire investment.
5
IF WE ARE UNABLE TO ATTRACT AND RETAIN QUALIFIED PERSONNEL WITH DNA-RELATED
EXPERIENCE, OUR BUSINESS COULD SUFFER, AND YOU COULD LOSE YOUR ENTIRE
INVESTMENT.
Our current and future success depends on our ability to identify, attract,
hire, train, retain and motivate highly skilled technical, managerial, sales and
marketing, customer service and professional personnel with DNA-related and
database experience. We may be unable to successfully attract, assimilate or
retain sufficiently qualified personnel. If we fail to retain and attract the
necessary managerial, sales and marketing, technical and customer service
personnel, we may not develop a sufficient customer base to adequately fund our
operations and our business could fail, and you would lose your entire
investment.
LIMITED OPERATING HISTORY, NOMINAL REVENUE AND MINIMAL ASSETS
Our Company has a limited operating history, nominal revenues, to date, minimal
assets and limited financial resources. We will, in all likelihood, sustain
operating expenses without corresponding revenues. This may result in our
incurring an initial net operating loss until we either generate revenues
sufficient to sustain operations, of which there can be no assurance, or we
complete future financing, of which there can be no assurance. There is no
assurance that our Company will ever produce significant revenues or profits in
the near future.
IF THE SECURITIES DO NOT MEET BLUE SKY RESALE REQUIREMENTS, YOU MAY BE UNABLE TO
RESELL YOUR SECURITIES.
The securities offered by this prospectus must meet the Blue Sky resale
requirements in the states in which the proposed purchasers reside. If we fail
to meet these qualifications, the securities may be deprived of an opportunity
to sell your securities and they may be of little or no value to you. Since we
have extremely limited capital, we may not be able to afford the expenses
necessary to meet Blue Sky requirements.
RISKS RELATED TO OUR OPERATIONS
WE DEPEND ON OUR KEY PERSONNEL AND QUALIFIED TECHNICAL STAFF AND, IF WE LOSE
THEIR SERVICES, OUR ABILITY TO MANAGE THE DAY-TO-DAY ASPECTS OF OUR BUSINESS
WILL BE WEAKENED. WE MAY NOT BE ABLE TO HIRE AND RETAIN QUALIFIED PERSONNEL,
WHICH COULD ADVERSELY AFFECT OUR OPERATING RESULTS.
We are highly dependent on the services of our management and other key
personnel. The loss of the services of members of our senior executive
management team or other key personnel could cause us to make less successful
strategic decisions, which could hinder the introduction of new services or make
us less prepared for technological or marketing problems, which could reduce our
ability to serve our customers or lower the quality of our services.
We believe that a critical component for our success will be the attraction and
retention of qualified, professional technical and sales personnel. We may not
be able to attract, develop, motivate and retain experienced and innovative
personnel. If we fail to do so, there will be an adverse effect on our ability
to generate revenue and operate our business.
THE OPERATION, ADMINISTRATION, MAINTENANCE AND REPAIR OF OUR SYSTEMS ARE SUBJECT
TO RISKS THAT COULD LEAD TO DISRUPTIONS IN OUR SERVICES AND THE FAILURE OF OUR
SYSTEMS TO OPERATE AS INTENDED FOR THEIR FULL DESIGN LIFE.
Each of our systems is and will be subject to the risks inherent in
computer-based internet business activities. The operation, administration,
maintenance and repair of our computer systems will require the coordination and
integration of sophisticated and highly specialized hardware and software
technologies and equipment. Our systems may not continue to function as expected
in a cost-effective manner. The failure of the hardware or software to function
as required could render us unable to perform at design specifications.
THE FAILURE OF OUR BUSINESS AND OPERATIONS SUPPORT SYSTEMS TO PERFORM AS WE
EXPECT COULD IMPAIR OUR ABILITY TO RETAIN CUSTOMERS AND OBTAIN NEW CUSTOMERS, OR
PROVISION THEIR SERVICES, OR RESULT IN INCREASED CAPITAL EXPENDITURES, WHICH
WOULD ADVERSELY AFFECT OUR REVENUES OR CAPITAL RESOURCES.
Our operations support systems are an important factor in our success. Critical
information systems used in daily operations will be used to perform sales and
order entry, billing and accounts receivable functions, and service verification
and payment functions. If any of these systems fail or do not perform as
expected, it would adversely affect our ability to process orders and provision
sales, and to bill for services efficiently and accurately, all of which could
cause us to suffer customer dissatisfaction, loss of business, loss of revenue
or the inability to add customers on a timely basis, any of which would
adversely affect our revenues. In addition, system failure or performance issues
could have an adverse impact on our ability to effectively audit and dispute
invoicing and data provided by service providers from whom we lease facilities.
6
Furthermore, processing higher volumes of data or additionally automating system
features could result in system breakdowns and delays and additional
unanticipated expense to remedy the defect or to replace the defective system
with an alternative system.
INTELLECTUAL PROPERTY AND PROPRIETARY RIGHTS OF OTHERS COULD PREVENT US FROM
USING NECESSARY TECHNOLOGY.
While we do not believe that there exists any technology patented by others, or
other intellectual property owned by others, that is necessary for us to provide
our services, there can be no assurances in this regard. If there is
intellectual property that is owned by others for we which we have no license,
we would have to negotiate such a license for the use of that property. We may
not be able to negotiate such a license at a price that is acceptable. This
could force us to cease offering products and services incorporating such
property, thereby adversely affecting operating results.
OUR OPERATIONS MAY FACE POLITICAL, LEGAL AND OTHER RISKS FROM OUR OPERATIONS IN
FOREIGN JURISDICTIONS.
We expect to derive a substantial portion of our revenue from our website and
internet operations. As a result, our business is subject to particular risks,
including:
o uncertain and rapidly changing political and economic conditions,
including the possibility of civil unrest, vandalism affecting
cable assets, terrorism or armed conflict;
o unexpected changes in regulatory environments and trade barriers;
and
o exposure to different legal and regulatory standards.
RISKS RELATED TO COMPETITION AND OUR INDUSTRY
TECHNOLOGICAL ADVANCES AND REGULATORY CHANGES MAY ERODE REVENUES WHICH COULD BE
DERIVED FROM INTERNET OPERATIONS, WHICH COULD INCREASE COMPETITION AND PUT
DOWNWARD PRESSURE ON PRICES FOR OUR PROPOSED SERVICES.
New technologies and regulatory changes, particularly those permitting free
access to data, including DNA data, if any, could impair our prospects, put
downward pressure on prices and adversely affect our operating results.
We face potential competition in our market from the incumbent providers of DNA
services and information. This potential competition places downward pressure on
prices for data services, which can adversely affect our operating results. In
addition, we could face competition from other companies we have not yet
identified or which may enter into the market. If we are not able to compete
effectively with these industry participants, our operating results would be
adversely affected.
MANY OF OUR COMPETITORS AND POTENTIAL COMPETITORS HAVE SUPERIOR RESOURCES, WHICH
COULD PLACE US AT A COST AND PRICE DISADVANTAGE.
Many of our competitors and potential competitors may have significant
competitive advantages, including greater market presence, name recognition and
financial, technological and personnel resources, superior engineering and
marketing capabilities, and significantly larger customer bases. As a result,
some of our competitors and potential competitors can raise capital at a lower
cost than we can, and they may be able to adapt more swiftly to new or emerging
technologies and changes in customer requirements, take advantage of acquisition
and other opportunities more readily, and devote greater resources to the
development, marketing and sale of products and services than we can. Also, our
competitors' and potential competitors' greater brand name recognition may
require us to price our services at lower levels in order to win business. Our
competitors' and potential competitors' financial advantages may give them the
ability to reduce their prices for an extended period of time if they so choose.
CHANGES IN REGULATORY ENVIRONMENTS MAY REQUIRE US TO OBTAIN AND MAINTAIN A
NUMBER OF GOVERNMENTAL LICENSES AND PERMITS.
Our operations are currently not subject to regulation in the United States or
Canada. However, changing regulatory environments may require us to obtain and
maintain a number of governmental licenses and permits in the future. If we fail
to comply with those regulatory requirements or obtain and maintain those
licenses and permits, we may not be able to conduct our business. Moreover,
those regulatory requirements could change in a manner that significantly
increases our costs or otherwise adversely affects our operations.
7
WE DEPEND ON THIRD PARTIES FOR MANY FUNCTIONS. IF THE SERVICES OF THOSE THIRD
PARTIES BECOME UNAVAILABLE TO US, WE MAY NOT BE ABLE TO CONDUCT OUR BUSINESS.
We depend and will continue to depend upon third parties to:
o install and/or upgrade some of our systems and provide equipment
and maintenance;
o provide internet access for our website and services.
We cannot provide any assurances that third parties will perform their
contractual obligations or that they will not be subject to political or
economic events which may have a material adverse effect on their ability to
provide us with necessary services. If they fail to perform their obligations,
or if any of these relationships are terminated and we are unable to reach
suitable alternative arrangements on a timely basis, we may not be able to
conduct our business.
POWER OUTAGES AND ROLLING BLACKOUTS MAY ADVERSELY AFFECT OUR BUSINESS AND
OPERATIONS.
On August 14, 2003, eight states and southern Canada experienced a widespread
power outage after extreme energy fluctuations in the power grid. California
experienced rolling power outages and brownouts in the San Francisco Bay Area in
the year 2000 and in Los Angeles County in March and May of 2001 due to
shortages of energy supply in the affected areas. Although we intend to make
every reasonable effort to protect our computer equipment from power outages, we
have no control over where, when and for how long such power outages may occur
and whether such outages exceed the capacity of our protection or the capacity
of telecommunications bandwidth and facilities providers that provide services
to us. Hence, power outages may impact our proposed services and our business
and operations support systems in a manner that disrupts our operations and have
a material adverse effect on our business.
TERRORIST ATTACKS AND OTHER ACTS OF VIOLENCE OR WAR MAY ADVERSELY AFFECT THE
FINANCIAL MARKETS AND OUR BUSINESS AND OPERATIONS.
As a result of the September 11, 2001 terrorist attacks and subsequent events,
there has been considerable uncertainty in world financial markets. These events
and concerns about future terrorist attacks could lead to volatility or
illiquidity in world financial markets. They could cause consumer confidence and
spending to decrease or otherwise adversely affect the economy. These events
could adversely affect our business and our ability to obtain financing on
favorable terms. Future terrorist attacks against the United States are
possible. Since telecommunications networks, including the internet, and
equipment may be considered critical infrastructure for our proposed operations,
it is possible that our physical facilities or network control systems could be
the target of such attacks, or that such attacks could impact other
telecommunications companies in a manner that disrupts our operations. Any of
these occurrences could materially adversely affect our business.
THE UNCERTAINTY OF ADDITIONAL CAPITAL PLACES US AT RISK FOR CONTINUED
OPERATIONS.
The Company cannot offer assurances that funds will be raised when it requires
them or that the Company will be able to raise funds on suitable terms, as and
when needed. Failure to obtain such financing as and when needed could delay or
prevent the Company's proposed business operations, which could adversely affect
the Company's actual business, financial condition and results of operations, if
any. If additional capital is raised through the sale of additional equity or
convertible securities, dilution to the Company's stockholders is likely to
occur.
THE COMPANY'S CASH FLOW COULD BE LOWER THAN ANTICIPATED DUE TO SLOWER THAN
EXPECTED CUSTOMER ACCEPTANCE.
The Company has generated nominal cash flow, but there is no assurance its
proposed services will be accepted by anticipated customers, or that any such
customers will accept the services at a time and in a manner that will produce
revenues for the Company as and when required for operations.
PROTECTION OF THE COMPANY'S INTELLECTUAL PROPERTY IS LIMITED.
The Company has only applied for protection of its name as a service mark, and
has only obtained the website recently. There is no assurance a service mark
will be granted or that the Company will be able to successfully defend its
service mark if contested or infringed upon.
8
THE COMPANY'S STOCK PRICE MAY BE VOLATILE.
In recent years and months, the U.S. stock market has experienced significant
price and volume fluctuations. These fluctuations, which are often unrelated to
the operating performances of specific companies, have had a substantial effect
on the market price of stocks, particularly penny stocks like the Company's. It
is also possible that the Company's operating results will not meet the
expectations of its public market analysts, which could have an adverse effect
on the trading price of its common shares. Accordingly, in the event the
Company's stock ever trades on an exchange, of which there can be no assurance,
the market price, if any, for the Company's Common Stock may fluctuate
substantially.
THE COMPANY DOES NOT PLAN TO PAY DIVIDENDS.
The Company has not yet realized positive net revenues and has not, since
incorporation, paid dividends. The Company expects to use any earnings to fund
its ongoing operations and to fund future network and market development.
PENNY STOCK REGULATIONS MAY LIMIT THE POTENTIAL PURCHASERS OF OUR STOCK IN ANY
MARKET THAT MAY DEVELOP.
Broker-dealer practices in connection with transactions in "PENNY STOCKS" are
regulated by certain penny stock rules adopted by the Securities and Exchange
Commission (the "SEC" or the "Commission"). Penny stocks generally are equity
securities with a price of less than $5.00 (other than securities registered on
certain national securities exchanges or quoted on NASDAQ provided that current
price and volume information with respect to transactions in such securities is
provided by the exchange or trading system).
The penny stock rules require a broker-dealer, prior to a transaction in a penny
stock not otherwise exempt from the rules, to deliver a standardized risk
disclosure document that provides information about penny stocks and the risks
in the penny stock market. The broker-dealer also must provide the customer with
current bid and offer quotations for the penny stock, the compensation of the
broker-dealer and its salesperson in connection with the transaction, and
monthly account statements showing the market value of each penny stock held in
the customer's account. In addition, the penny stock rules generally require
that prior to a transaction in a penny stock, the broker-dealer must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser's written agreement to the transaction.
These disclosure requirements may have the effect of reducing the level of
trading activity in the secondary market for a stock that becomes subject to the
penny stock rules. the Company's securities are presently subject to the penny
stock rules, and, as a result, investors may find it more difficult to sell its
securities.
USE OF PROCEEDS
Not applicable. We will not receive any proceeds from the sale of the securities
by the selling security holders.
DETERMINATION OF OFFERING PRICE
Not applicable. The selling security holders will be able to determine the price
at which they sell their securities.
DILUTION
Not applicable. We are not registering any unissued shares in this registration
statement.
SELLING SECURITY HOLDERS
The securities are being sold by the selling security holders named below. The
table indicates that all the securities will be available for resale after the
offering. However, any or all of the securities listed below may be retained by
any of the selling security holders, and therefore, no accurate forecast can be
made as to the number of securities that will be held by the selling security
holders upon termination of this offering. We believe that the selling security
holders listed in the table have sole voting and investment powers with respect
to the securities indicated. We will not receive any proceeds from the sale of
the securities.
9
Beneficial Beneficial
Ownership Ownership
Name (1) Before Offering Maximum Number
Shares Percent of Shares Being Shares After
Offered Offering (2)
541672 B.C. Ltd. 1,359,500 4% 1,359,500 0
Abey, Michael H. 500 Less than 1% 500 0
Adams, James 500 Less than 1% 500 0
Anderson, Frank 500 Less than 1% 500 0
Aziz, Shamma 500 Less than 1% 500 0
Cahill, Raymond 1,339,600 4% 1,339,600 0
Calderwood, Eleanor 500 Less than 1% 500 0
Chan, Dwight 1000 Less than 1% 1000 0
Chan, Kenny 1000 Less than 1% 1000 0
Charuk, Barb 500 Less than 1% 500 0
Charuk, James 500 Less than 1% 500 0
Charuk, Robert 500 Less than 1% 500 0
Charuk, Travis 500 Less than 1% 500 0
Clancey, Declan 1,359,000 4% 1,359,000 0
Clark, Maxine 500 Less than 1% 500 0
Dempsey, Frank 5000 Less than 1% 5000 0
Dosanjih, Sonny 500 Less than 1% 500 0
EH&P Investments AG 1,359,500 4% 1,359,500 0
Fleming, Patricia 500 Less than 1% 500 0
Follett, Julie 500 Less than 1% 500 0
Franco, David 500 Less than 1% 500 0
Gajdics, Tibor 1,359,500 4 % 1,359,500 0
Gajdics, Steve 500 Less than 1% 500 0
10
Gallie, Kenneth 500 Less than 1% 500 0
Glinsbockel, Sylvia 500 Less than 1% 500 0
Gorrell, A. Ross 1000 Less than 1% 1000 0
Haas, Erwin 2000 Less than 1% 2000 0
Hamilton, Richard 1500 Less than 1% 1500 0
Havanna Consultants 6500 Less than 1% 6500 0
Hilbert, Chantal 500 Less than 1% 500 0
Holland, Warwick 500 Less than 1% 500 0
Holliday, Jill 60,000 Less than 1% 60,000 0
Holliday, H.G. 500 Less than 1% 500 0
Johnson, Kurt 500 Less than 1% 500 0
Kurtyka, Anna 500 Less than 1% 500 0
Larmour, Jodi 2000 Less than 1% 2000 0
Larson, Christina 500 Less than 1% 500 0
Larson, Christina in Trust 0
For Jennifer Larson 500 Less than 1% 500
Legg, William E. 500 Less than 1% 500 0
Lopushinsky, Terri 500 Less than 1% 500 0
Lyons, Donald 1500 Less than 1% 1500 0
McLaughlin, Heather 500 Less than 1% 500 0
Michiel, Spencer 500 Less than 1% 500 0
Moberg, James 500 Less than 1% 500 0
Rasmussen, Paul 500 Less than 1% 500 0
Rottare, Tyler 500 Less than 1% 500 0
Sawyer, Mithra 60,000 Less than 1% 60,000 0
Stewart, Gary 500 Less than 1% 500 0
Visram, Asif in Trust
For Shyanne Visram 500 Less than 1% 500
Visram, Asif 500 Less than 1% 500 0
11
Visram, Badrudin 500 Less than 1% 500 0
Whelan, Bonnie 500 Less than 1% 500 0
Wong, Anthony 500 Less than 1% 500 0
Total 6,937,100 6,937,100
(1) None of the selling security holders have, or ever had, any material
relationship with our corporation or any of its predecessors and/or affiliates.
None of the individual shareholders are affiliated, directly or indirectly, with
any of the other shareholders, or with the corporate shareholders.
(2) Assumes the sale of all shares offered by Selling Security Holder.
We intend to seek qualification for sale of the securities in those states where
the securities will be offered. That qualification is necessary to resell the
securities in the public market and only if the securities are qualified for
sale or are exempt from qualification in the states in which the selling
shareholders or proposed purchasers reside. There is no assurance that the
states in which we seek qualification will approve of resales of our securities
resales.
PLAN OF DISTRIBUTION
The securities offered by this prospectus may be sold by the selling security
holders or by those to whom the shares are transferred. We are not aware of any
underwriting arrangements that have been entered into by the selling security
holders. The distribution of the securities by the selling security holders may
be effected in one or more transactions that may take place in the
over-the-counter market, assuming a market for our securities exists, including
broker's transactions, privately negotiated transactions or through sales to one
or more dealers acting as principals in the resale of these securities.
Any of the selling security holders, acting alone or in concert with one
another, may be considered statutory underwriters under the Securities Act of
1933, if they are directly or indirectly conducting an illegal distribution of
the securities on behalf of our corporation. For instance, an illegal
distribution may occur if any of the selling securities holders provide us with
cash proceeds from their sales of the securities. If any of the selling
shareholders are determined to be underwriters, they may be liable for
securities violations in connection with any material misrepresentations or
omissions made in this prospectus.
In addition, the selling security holders and any brokers and dealers through
whom sales of the securities are made may be deemed to be "Underwriters" within
the meaning of the Securities Act, and the commissions or discounts and other
compensation paid to the persons may be regarded as underwriters' compensation.
The selling security holders may pledge all or a portion of the securities owned
as collateral for margin accounts or in loan transactions, and the securities
may be resold pursuant to the terms of the pledges, accounts or loan
transactions. Upon default by the selling security holders, the pledge in the
loan transaction would have the same rights of sale as the selling security
holders under this prospectus. The selling security holders may also transfer
securities owned in other ways not involving market makers or established
trading markets, including directly by gift, distribution, or other transfer
without consideration, and upon any transfer the transferee would have the same
rights of sale as the selling security holders under this prospectus.
In addition to, and without limiting, the foregoing, each of the selling
security holders and any other person participating in a distribution will be
affected by the applicable provisions of the Securities Exchange Act of 1934,
including, without limitation, Regulation M, which may limit the timing of
purchases and sales of any of the securities by the selling security holders or
any other person. Furthermore, transferees who replace selling security holders
will need to be named in the prospectus filed as part of a post-effective
amendment to this registration statement before they may accede to the rights of
the named selling security holder.
There can be no assurances that the selling security holders will sell any or
all of the securities. In order to comply with state securities laws, if
applicable, the securities will be sold in jurisdictions only through registered
or licensed brokers or dealers. In various states, the securities may not be
12
sold unless these securities have been registered or qualified for sale in the
state or an exemption from registration or qualification is available and is
complied with. Under applicable rules and regulations of the Exchange Act, as
amended, any person engaged in a distribution of the securities may not
simultaneously engage in market-making activities in these securities for a
period of one or five business days prior to the commencement of the
distribution.
All of the foregoing may affect the marketability of the securities. Pursuant to
the various agreements we have with the selling securities holders, we will pay
all the fees and expenses incident to the registration of the securities, other
than the selling security holders' pro rata share of underwriting discounts and
commissions which is to be paid by the selling security holders.
LEGAL PROCEEDINGS
We are not aware of any pending or threatened legal proceedings which involve BV
Pharmaceutical, Inc..
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS
(a) Directors and Officers
The members of the Board of Directors serve until the next annual meeting of the
stockholders, or until their successors have been elected. The officers serve at
the pleasure of the Board of Directors. There are no agreements for any officer
or director to resign at the request of any other person, and none of the
officers or directors named below is acting on behalf of, or at the direction
of, any other person.
Our officers and directors will devote their time to the business on an
"as-needed" basis. Information as to the directors and executive officers is as
follows:
Name Age Position
Art Bandenieks
2876 - 252nd Street 48 President, CEO, Secretary
Aldergrove, B.C. V4W 2R2 and Director
Lee Southern
2020 Bellevue Ave 60 Treasurer, CFO and Director
West Vancouver, B.C. V7V 1B8
ART BANDENIEKS has been the President, CEO, Secretary and a Director of the
Company since November 2000. For more than the past 5 years, he has been an
independent consultant and has extensive experience in selling and marketing in
the very sophisticated and demanding field of medical diagnostic equipment. Mr.
Bandenieks is an accomplished public speaker on medical diagnostic products,
including sophisticated instrumentation and related supplies. He earned a B.Sc.
degree in Psychology from the University of British Columbia in 1978. He also
did graduate studies on the faculty of Pharmaceutical Science the University of
British Columbia.
LEE SOUTHERN has been the Treasurer, CFO and a Director of the Company since
November 2000. He has, for over 35 years, been engaged as a consultant in and
has been involved in management in the education and political sectors in
Canada. He earned B.A. in Political Science & History and an M..A. in Political
Science from the University of Manitoba. He also holds a doctorate in Higher
Education Management from the University of British Columbia.
(b) Significant Employees.
Other than the officers of the Company, there are no employees who are expected
to make a significant contribution to our corporation.
13
(c) Family Relationships.
There are no family relationships among our officers, directors, or persons
nominated for such positions.
(d) Legal Proceedings.
No officer, director, or persons nominated for these positions, and no promoter
or significant employee of our corporation has been involved in legal
proceedings that would be material to an evaluation of our management.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth each person known to BV Pharmaceutical, Inc., to
be a beneficial owner of five percent (5%) or more of our common stock, by our
directors individually, and by all of our directors and executive officers as a
group, as of December 31, 2003. Each person will have sole voting and investment
power with respect to the shares shown.
SECURITY OWNERSHIP OF BENEFICIAL OWNERS
TITLE OF CLASS NAME OF OWNER SHARES BENEFICIALLY PERCENTAGE
OWNED OWNERSHIP
Common Art Bandenieks, 30,453,000 81%
All the shares listed above were acquired by Mr. Bandenieks in December 2000 and
are restricted pursuant to Rule 144.
SECURITY OWNERSHIP OF MANAGEMENT
TITLE OF CLASS NAME OF OWNER SHARES BENEFICIALLY PERCENTAGE
OWNED OWNERSHIP
Common Art Bandenieks 30,543,000 81%
Common Lee Southern Nil Nil
Total Shares Held 30,543,000 81%
All the shares listed above were acquired by Mr. Bandenieks in December 2000 and
are restricted pursuant to Rule 144.
All Officers and Directors as a Group 30,543,000 Direct 81% (Approx.) (1
Individual).
(c) Changes in Control.
There are currently no arrangements, which would result in a change in control
of the Company.
Our company President, principal stockholder and Director, Art Bandenieks,
currently, owns approximately 81% of our common stock. Therefore, he will have
14
significant influence over all matters requiring approval by our stockholders,
an will not require the approval of the minority stockholders in order to take
any action. In addition, Art Bandenieks will be able to elect all of the members
of our Board of Directors, allowing him to exercise significant control of our
affairs and management. In addition, Art Bandenieks may affect most corporate
matters requiring stockholder approval by written consent, without a
duly-noticed and duly-held meeting of stockholders. In essence, Mr. Bandenieks
controls our Company and your vote is of little importance or consequence.
DESCRIPTION OF SECURITIES
The following description is a summary and you should read the provisions of our
Articles of Incorporation and Bylaws, copies of which have been filed as
exhibits to the registration statement of which this prospectus is a part.
COMMON STOCK
GENERAL
We are authorized to issue 100,000,000 shares of common stock, with no par
value. As of December 31, 2003, there were 37,480,100 common shares issued and
outstanding. The Board of Directors has authority to issue the balance of
62,519,900 shares of our authorized stock without shareholder consent, on terms
and conditions set in the discretion of the Board, which may dilute the value of
your stock. All shares of common stock outstanding are validly issued, fully
paid for and non-assessable.
VOTING RIGHTS
Each share of common stock entitles the holder to one vote, either in person or
by proxy, at meetings of shareholders. The holders are not permitted to vote
their shares cumulatively. Accordingly, the holders of common stock holding, in
the aggregate, more than fifty percent of the total voting rights can elect all
of our directors and, in this event, the holders of the remaining minority
shares will not be able to elect any of the directors. The vote of the holders
of a majority of the issued and outstanding shares of common stock entitled to
vote thereon is sufficient to authorize, affirm, ratify or consent to the act or
action, except as otherwise provided by law.
DIVIDEND POLICY.
All shares of common stock are entitled to participate proportionally in
dividends if our Board of Directors declares them out of the funds legally
available and subordinate to the rights of the holders of loan or other
financing documents. These dividends may be paid in cash, property or additional
shares of common stock. We have not paid any dividends since our inception and
presently anticipate that all earnings will be retained for development of our
business. Any future dividends will be at the discretion of our Board of
Directors and will depend upon, among other things, our future earnings,
operating and financial condition, capital requirements, and other factors.
Therefore, there can be no assurance that any dividends on the common stock will
be paid in the future.
MISCELLANEOUS RIGHTS AND PROVISIONS.
Holders of common stock have no cumulative voting rights, and no preemptive or
other subscription rights, conversion rights, redemption or sinking fund
provisions. In the event of our dissolution, whether voluntary or involuntary,
each share of common stock is entitled to share proportionally in any assets
available for distribution to holders of our equity after satisfaction of all
liabilities and payment of the applicable liquidation preference of any
outstanding loan or financing documents.
STOCK TRANSFER AGENT
Upon completion of this offering, we intend to engage an independent stock
transfer agency firm to serve as our registrar and stock transfer agent.
SHARES ELIGIBLE FOR FUTURE SALE.
The 6,937,100 shares of common stock registered in this offering will be freely
tradable without restrictions under the Securities Act. No shares held by our
"affiliates" (officers, directors or 10% shareholders) are being registered
hereunder. The remaining 30,543,000 of our outstanding shares are held by one
affiliate: Mr. Bandenieks owns 30,543,000 shares, all of which have been held
for over one year.
In general, under Rule 144, as currently in effect, any of our affiliates and
any person or persons whose sales are aggregated who has beneficially owned his
or her restricted shares for at least one year, may be entitled to sell in the
open market within any three-month period a number of shares of common stock
that does not exceed the greater of (i) 1% of the then outstanding shares of our
common stock, or (ii) the average weekly trading volume in the common stock
during the four calendar weeks preceding any sale. Sales under Rule 144 are also
affected by limitations on manner of sale, notice requirements, and availability
of current public information about us. Non-affiliates who have held their
15
restricted shares for two years may be entitled to sell their shares under Rule
144 without regard to any of the above limitations, provided they have not been
affiliates for the three months preceding any sale.
The 30,543,100 outstanding restricted securities held by Mr. Bandenieks, a
director and officer of the company, are subject to the sale limitations imposed
by Rule 144. The availability for sale of substantial amounts of common stock
under Rule 144 could adversely affect prevailing market prices for our
securities.
EXPERTS
ACCOUNTANTS
Our Audited Financial Statements for the period from June 30, 2000 (inception)
to December 31, 2003, have been included in this prospectus in reliance upon of
Amisano Hanson, Chartered Accountants, 750 West Pender Street, Suite 604,
Vancouver, B.C. Canada, V6C 2T7, telephone 604-689-0188, as experts in
accounting and auditing.
LEGAL MATTERS
The law office of Michael J. Morrison, Chtd., 1495 Ridgeview Drive, Suite 220,
Reno, Nevada 89509, telephone 775-827-6300, has passed upon the validity of the
shares offered and certain other legal matters in connection with this
registration statement.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT
LIABILITIES
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to our directors, officers and controlling persons, we have been
advised that in the opinion of the SEC, the indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against the liabilities, other than
the payment by us of expenses incurred or paid by our directors, officers or
controlling persons in the successful defense of any action, suit or
proceedings, is asserted by the director, officer, or controlling person in
connection with any securities being registered, we will, unless in the opinion
of our counsel the matter has been settled by controlling precedent, submit to
court of appropriate jurisdiction the question whether the indemnification by us
is against public policy as expressed in the Securities Act and will be governed
by the final adjudication of the issues.
DESCRIPTION OF BUSINESS
BV Pharmaceutical, Inc. is a Nevada corporation, which was originally formed on
June 30, 2000 under the name of All Printer Supplies.com. On April 17, 2003, the
Company changed its name to BV Pharmaceutical, Inc. Its principal place of
business is located at 2890 Vassar Street, Suite A, Reno, NV 89502. The Company
was organized to engage in any lawful corporate business. BV Pharmaceutical,
Inc., has been in the developmental stage since inception and has a very limited
operating history and nominal revenues.
BV Pharmaceutical, Inc has limited start-up operations and is considered a
development stage Company. On September 23, 2003 the amended Articles of
Incorporation were filed with the state of Nevada to increase the number of
authorized capital stock to 100,000,000 common shares without any par value.
BUSINESS DEVELOPMENT.
We were incorporated in the State of Nevada on June 30, 2000, for the purpose of
providing consulting services to businesses, and engaging in any other lawful
activity.
PRINCIPAL PRODUCTS AND SERVICES
The primary activity of BV Pharmaceutical, Inc., is to offer a solution to the
uncertainty surrounding an individual's ownership of their own, personal and
unique DNA Profile. Our business objective is to provide a system and method by
which any person can register themselves and their unique, individual and
personal DNA profiles/patterns and their DNA profiles/patterns can be generally
covered under existing U.S. Copyright laws, thereby taking a reasonable step to
help prevent duplication or potential theft of their individual DNA in any form,
now known or later developed.
16
DNA is a material that governs inheritance of eye color, hair color, stature,
bone density and many other human and animal traits. DNA is a long but narrow
string-like object. A one-foot long string or strand of DNA is normally packed
into a space roughly equal to a cube 1/millionth of an inch on a side. This is
possible only because DNA is a very thin string.
Our body's cells each contain a complete sample of our DNA. One cell is roughly
equal in size to the cube described in the previous paragraph. There are muscle
cells, brain cells, liver cells, blood cells, sperm cells and others included in
DNA sample. Basically, every part of the body is made up of these tiny cells and
each contains a sample or complement of DNA identical to that of every other
cell within each person's body. There are a few exceptions. For example, our red
blood cells lack DNA. However, blood itself can be typed because of the DNA
contained in our white blood cells.
Not only does the human body rely on DNA for to identify individual
characteristics, but so do most living things, including plants, animals and
bacteria.
A strand of DNA is made up of tiny building blocks. There are only four
different basis building blocks in DNA. Scientists usually refer to these using
four letters, each letter identifying one of the four different building blocks.
The letters are: A, T, G and C. These four letters are short "nicknames" for
more complicated chemical names, but actually the letters (A,T,G and C) are used
much more commonly than the chemical names, so the chemical names will not be
mentioned here. Another way of referring to the building blocks or letters is to
call them "bases".
For example, to refer to a particular piece of DNA, we might write:
AATTGCCTTTTAAAAA. This is a perfectly acceptable way of describing a piece of
DNA. Someone with a machine called a DNA synthesizer could actually synthesize
the same piece of DNA from the information AATTGCCTTTTAAAAA alone.
The sequence of bases (letters) can create a code for many properties of the
body's cells. The cells can read this code. Some DNA sequences encode important
information for the cell. Such DNA is called, not surprisingly, "coding DNA."
Our cells also contain much DNA that doesn't encode anything that we know about.
If the DNA doesn't encode anything, it is called non-coding DNA or sometimes,
"junk DNA".
The DNA code, or genetic code, as it is most commonly referred to, is passed
through the sperm and egg to the offspring. A single sperm cell contains about
three billion bases consisting of A,T,G and C that follow each other in a
well-defined sequence along the strand of DNA.
Both coding and non-coding DNA's may vary from one individual to another. These
DNA variations can be used to identify people, or at least distinguish one
person from another.
DNA COPYRIGHT PROCESS
The process begins with providing a secure DNA sample to one of our offices or
one of our affiliated testing facilities, which processes and analyzes it,
establishes the required criteria for proof of ownership and copyright of your
unique and original DNA Pattern, and then a consumer is provided with our DNA
Copyright Certificate of DNA Copyright.
We estimate the entire DNA Copyrighting Process will take approximately four
weeks from the time of DNA sample collection. This does not include the Optional
registration with the U.S. Copyright Office. The Steps of the Process include:
1. DNA Sample is collected by an independent laboratory.
2. The DNA Sample is processed
3. A DNA Profile is determined
4. The DNA Profile is compared against other DNA Copyrights
5. Results of the comparison are documented and encrypted, and a DNA Profile and
Copyright Bank Certificate is issued to the consumer.
The instructions and examples on our website are intended to allow potential
consumers to quickly begin the DNA Copyright process for their personal and
unique DNA profile. To initiate the DNA Copyright process requires a fee of
US$120.
17
OUR DNA COPYRIGHT SERVICES INCLUDE THE FOLLOWING INFORMATION FOR CONSUMERS:
1. What is DNA?
DNA stands for Deoxyribo-Nucleic-Acid and is basically a long and complex
molecule that carries information in the form of a chemical code. This code
will tell the body and cells how to grow and form. This chemical code is
unique in every single person, thus the analysis of the chemical code gives
the ability to perform highly accurate testing of relationship, identity,
etc.
2. What is a DNA Copyright?
A DNA Copyright is an established copyright on the unique DNA Profile, or DNA
Pattern, of an individual under United States and international copyright
laws. The concept was developed upon realization of the danger of DNA theft
on a large scale basis. Since the DNA Copyright is not on specific genes or
DNA as a whole (which is owned by everyone), but on an individual's unique
DNA pattern, it is possible for any person to establish a DNA Copyright for
themselves.
A person's DNA Copyright on their own DNA Profile pattern should enjoy all of
the same legal benefits of copyrights for music, literature, software,
architecture, etc. Copyrights do not require registration with the U.S.
Copyright Office to be in effect; however, under applicable current laws,
registering the copyright with the U.S. Copyright Office does provide
additional legal benefits should an infringement occur. The Company believes
that the DNA Copyright registration with the Federal government is a Client's
personal decision. For various reasons, they may not want to pursue this
course of action.
If they so chose, for an additional fee of $100.00, the Company will process
the Client's materials for submission to the U.S. Copyright Office.
3. What is a DNA Pattern or Profile?
First note that the DNA Pattern or Profile is different than DNA as a whole.
DNA as a whole is shared by almost all humans, and by some animals as well.
For this reason one cannot patent or copyright DNA. An individual's unique
DNA Pattern is also called their DNA Profile, DNA Fingerprint, or DNA
Barcode. People differ in their genetic makeup by a minuscule amount, perhaps
by as much as 1/10th of 1% ((about 0.10 percent of the human genome). The
small areas of difference can be used to establish a DNA profile, unique to
that individual.
DNA samples are processed to identify a group of specific DNA regions (loci)
by using DNA marker probes that seek out and bind to a complementary DNA
segment. The DNA technology utilized for creating this type of DNA analysis
is called Short Tandem Repeat (STR).
One marker alone is not unique to any particular individual, for each marker
there are set probabilities that it will appear in the general population. An
analysis could confidently conclude that a number of people will probably
have this specific marker with this specific value. The percentage of people
can be, for example, 8.5% or 11.2%. The more markers analyzed with the
probes, the more values are generated for a DNA sample. From this analysis a
unique DNA pattern emerges. The currently accepted standard number of areas
analyzed is 13, which creates a pattern that is unique at the level of one in
a hundred billion.
The probability of two DNA samples from two individuals having the same,
exact pattern of combined marker values and percentages is so low that
statistically it is virtually impossible. The exceptions to this are
identical twins.
According to Dr. Eric S. Lander, Professor at MIT:
"...Your DNA sequence is unique amongst all DNA sequences of any human that
has ever lived and will live for quite some time to come. Unless you have an
identical twin, in which case you do have someone who has the same DNA
sequence. But apart from that, your DNA sequence is yours and yours alone.
Should you choose to leave your DNA sequence behind here in some form in some
biological tissue, in principle, I ought to be able to look at it and by its
uniqueness know whose it is."
4. What are DNA Patents?
DNA patents are "inventions" or "discoveries" made primarily by researchers
seeking to under the function of genes, group of genes and recombined genes.
Copyrights differ from patents in several ways, one of which is the
difference between authorship and inventor. Inventors for example have to
demonstrate that their results are replicable by any person who follows their
methods. That person must pay a royalty or license fee to the inventor who
owns the patent.
Please note that patent applications have been submitted for
naturally-occurring molecules, genes, cells, etc. For obvious reasons, no
patents or copyright applications have been submitted for the entire human
genome, or DNA map.
18
5. How do I Establish a DNA Copyright?
The core element of Copyright law in the U.S. is that work produced by
artists and individuals is protected upon creation. The Company is a
proponent of automatic protection for each person's unique DNA Profiles under
Copyright law. This means that as with all materials currently under
Copyright protection, no additional actions are required upon creation of the
work to prove ownership.
However, more formal entities such as publishers, broadcasters, entertainers,
etc. often provide Copyright notification as a deterrent to misappropriation,
and as documentation in case of court actions. In the case when a more
documented approach to copyright issues is desired, formal establishment of
copyright notification procedures, such as correct placement of the well
known (C) symbol, are recommended. Furthermore, artists also have the
additional option of registering their work with the Federal government. This
second step is not required, however it does enhance legal positions should
alleged copyright infringement occur.
To ensure copyright protection, the work must meet the following two
elements:
A) Copyright protection subsists in original works of authorship fixed in any
tangible medium of expression, now known or later developed, from which they
can be perceived, reproduced, or otherwise communicated, either directly or
with the aid of a machine or device. 17 U.S.C. 102(a). Additionally: The
Copyright Act (Act), 17 U.S.C.S. 102(a) extends protection to original works
of authorship fixed in any tangible medium of expression, now known or later
developed, from which they can be perceived, reproduced, or otherwise
communicated, either directly or with the aid of a machine or device.
B) A work is "fixed" in a tangible medium of expression when its embodiment
in a copy or phone record, by or under the authority of the author, is
sufficiently permanent or stable to permit it to be perceived, reproduced, or
otherwise communicated for a period of more than transitory duration. 17
U.S.C. 101. A Client seeking to show ownership of their DNA provides a sample
to the Company or its affiliated testing facilities, which process and
analyze it, establish criteria for proof of ownership and copyright, and
provides the Client with a Company Certificate of DNA Copyright. In addition,
for an extra fee the Company will provide the Legal representation to process
the owner's DNA Copyright through the U.S. Government's copyright office so
that is registered as "a unique and individual product or work."
6. What are the Benefits of a DNA Copyright?
Establishment of the Client's DNA in a copyright compliant state guarantees
that it cannot be reproduced or utilized in any form, whether printed,
electronic, photographic, biological. It cannot be borrowed, stolen, or
otherwise procured and utilized without the expressed consent of the owner.
While cloning itself cannot be stopped outside of domestic jurisdiction,
international copyright law is much farther reaching and applicable. An
additional benefit of a DNA Copyright stems from the Owner's ability to
independently seek monetary or other damages, regardless of local laws
prohibiting or allowing human cloning.
7. What is Involved in Sample Collection?
Sample collection is simple, fast, and non-intrusive. Collection takes place
locally at a convenient, affiliated Clinic, Hospital, or Medical Office. For
an additional fee Collections can take place at the Client's place of Work or
Home.
A cotton swab (a buccal swab) is gently wiped across the inside of the
Client's cheek. The swab, containing the DNA sample, is then labeled,
securely stored, and transported to the lab for analysis. The Client is
generally required to present the following pieces of ID:
- Two picture IDs, such as a driver's license or state identification card,
- Social security number
- Birth Certificate (child)
- A Recent 5x7 Photograph (For use on the Company's Certificate)
8. How Long does the entire DNA Copyright Process take?
The entire DNA Copyrighting Process is approximately four weeks from the time
of sample collection from the Client. This does not include the Optional
registration with the U.S. Copyright Office.
9. Is the DNA Profile kept Confidential?
To ensure the privacy of its Clients, the data the Company uses remains
confidential and is utilized specifically to help individuals formally
establish their DNA Copyright claims. For additional security, all physical
samples are destroyed after processing and the database information is
encrypted.
19
10. Can a Minor Submit a DNA Copyright?
A minor can submit a DNA copyright after having their personal DNA Pattern
analyzed and reported, however unless this is a gift item we do not recommend
DNA Copyrights for minors as most do not fit the high-risk profile for DNA
theft.
11. How Can I Protect Myself from DNA Theft?
It is currently impossible to prevent a person from taking samples of your
DNA. All complex living creatures such as people constantly leave traces of
DNA throughout their environment in the form of hair, skin, saliva, etc. It
would be impossible for you to stop a determined collector from gathering at
least some of these traces. However, you can deter them from trading in those
samples, or in pursuing activities such as cloning of the samples, by
establishing a DNA Copyright.
DISTRIBUTION
We plan to deliver our services through our website. As of the date of this
prospectus, we have an Internet service provider, web site developer and a basic
web site, all of which will be necessary to execute our plan of business.
On July 15, 2003, we entered into a license agreement with Mr. Matt Sutton
whereby we granted him a non-exclusive license to market services relating to
the collection of DNA samples and related data. The agreement is for a term of
one (1) year, commencing August 15, 2003, and the license fee due under the
agreement is US$2,000.00 per month.
NEW PRODUCTS OR SERVICES.
Other than the services described in this prospectus, we currently have no new
products or services announced or planned to be announced to the public.
COMPETITORS
We will face competition from all aspects of the emerging DNA-related business
and industry. We will compete with pharmaceutical and other science or
technology-related companies that have superior DNA-related experience and/or
services which they now, or may, in the future, offer to their potential or
existing customers. Many of these companies may in time offer free information
and DNA-related storage facilities to their customers. Many of these companies
have other sources of revenues and we rely only on the fees generated through
our proposed DNA information and database services. In addition, these companies
may have better marketing and distribution channels. There can be no assurance
that we will be able to compete effectively in this highly competitive industry,
which could have a material adverse impact upon market acceptance of our
proposed business.
Our main, existing and potential competitors for our proposed DNA storage and
copyright business is any business in the pharmaceutical business or
distribution of pharmaceutical products business. Below are some Websites
currently offering DNA-related information:
- - WWW.FAMILYTREEDNA.COM
- - WWW.DNALC.ORG
- - WWW.DNACENTER.COM
OUR COMPETITIVE POSITION
We believe competition takes place on many levels, including pricing,
convenience in obtaining information, specialization, and breadth of services
offered. We intend to serve as a content aggregator for DNA-related information
on the Internet, and provide what we believe is an unbiased comprehensive
information source, as well as marketplace and facilitator for DNA-related
information
Our objective is to provide a service that helps the consumer cut through the
often perceived clutter, confusion and noise of the marketplace and help them
confidentially and quickly bring each person's DNA sequence to a copyright
compliant environment.
We will attempt to brand our website WWW.YOURCLONEGUARD.COM as the consumer's
partner in his or her search for the most reliable DNA databank and information
source. We will attempt to provide the consumers with a one-stop shopping
destination where they can access information and decision support tools, such
as any related news on topics relating to DNA. However, we have no assurance we
20
will be successful in differentiating ourselves from our competitors, or that we
will be successful in providingacceptable services or competing in the
marketplace for our services.
By offering a specialized DNA storage and information service, we will be
targeting those consumers who are looking for DNA protection. We believe that
consumers will pay for a service that is specialized, unbiased and comprehensive
and one that helps them cut through the perceived clutter, confusion and noise
of the internet marketplace and help them confidentially and quickly bring their
DNA sequence to a copyright compliant environment.
We expect that our operations will depend on a number of third parties over
which we will have limited control. Specifically, we do not plan to own an
Internet gateway, but instead we will rely on a third-party, independent and
unrelated Internet Service Provider to host our website. We may experience
interruptions in our website connection and our telecommunications access due to
our reliance upon third parties. This could result in loss of business and
revenues. We anticipate that we will use software that is dependent on an
operating system, database and server software developed and produced by and
licensed by independent third parties. We may discover errors and defects in
this third party software and rely on the third parties to correct these errors
and defects in a timely manner. Accordingly, continuous or prolonged
interruptions in our website connection or in our telecommunications access
would have an adverse effect upon consumer perception of our ability to provide
information in a timely and efficient manner.
A significant barrier to entry in the area of electronic commerce and
communications is the secure transmission of confidential information over
public networks. This will be especially important in regard to transmission of
DNA-related information and data. We will rely on encryption and authentication
technology licensed from third parties to provide the security and
authentication necessary to effect secure transmission of confidential
information. There can be no assurance that advances in computer capabilities,
new discoveries in the field of cryptography or other events or developments
will not result in a compromise or breach of the algorithms we may use to
protect customer transaction data. If any compromise of our security were to
occur, potential users may lack confidence in our site and our ability to
protect their commerce information, such as credit card information, billing
address, etc. Furthermore, we may be subject to damage claims from our users or
others.
A party who is able to circumvent our security measures could misappropriate
proprietary information and/or access our customers' DNA-related information and
data.. We may be required to expend significant capital and other resources to
protect against security breaches or to alleviate problems caused by breaches.
Concerns over the security of Internet transactions and the privacy of users may
also inhibit the growth of the Internet generally, and the World Wide Web in
particular, especially as a means of conducting commercial transactions. To the
extent that our future activities or those of third party contractors whom we
may use involve the storage and transmission of proprietary information, such as
DNA-related information and data and credit card numbers, security breaches
could expose us to a risk of loss or litigation. There can be no assurance that
we will be able to implement security measures that will prevent security
breaches.
SOURCES AND AVAILABILITY OF RAW MATERIALS
As of the date of this prospectus, we have no need for raw materials or
suppliers.
CUSTOMER BASE
As of the date of this prospectus, we have no customers. If we are able to
establish a customer base in the future, we do not anticipate we will depend on
one or a few major customers. There can be no assurance that this assumption is
correct.
INTELLECTUAL PROPERTY
We have recently applied for a service mark for "yourcloneguard". We do not have
any trademarks, patents, licenses, royalty agreements, or other proprietary
interests, except for the web domain name: yourcloneguard.com.
GOVERNMENTAL REGULATION ISSUES
We are not now affected by direct government regulation. However, we are
affected by laws, rules and regulations directly applicable to access to or
commerce on the Internet generally. However, due to increasing usage of the
Internet, a number of laws and regulations may be adopted relating to the
Internet, covering user privacy, pricing, and characteristics and quality of
products and services. Furthermore, the growth and development for Internet
commerce may prompt more stringent consumer protection laws imposing additional
21
burdens on those companies conducting business over the Internet. The adoption
of any additional laws or regulations may decrease the growth of the Internet,
which, in turn, could decrease the demand for Internet services and increase the
cost of doing business on the Internet. These factors may have an adverse effect
on our business, results of operations and financial condition.
Moreover, the interpretation of sales tax, libel and personal privacy laws
applied to Internet commerce is uncertain and unresolved. We may be required to
qualify to do business as a foreign corporation in each state or foreign
country. Our failure to qualify as a foreign corporation in a jurisdiction where
we are required to do so could subject us to taxes and penalties. Any existing
or new legislation or regulation, including state sales tax, or the application
of laws or regulations from jurisdictions whose laws do not currently apply to
our business, could have a material adverse effect on our business, results of
operations and financial condition.
RESEARCH AND DEVELOPMENT
To date, we have not undergone any research and development, except that
required to put up our website.
ENVIRONMENTAL LAW COMPLIANCE
To the extent which environmental compliance may be necessary, we do not
anticipate any significant compliance expense.
EMPLOYEES.
Our only employees at the present time are our officers and directors, who will
devote as much time as they determine is necessary to carry out the business of
the Company.
REPORTS TO SECURITY HOLDERS.
After the effective date of this registration statement, we will be a reporting
company under the requirements of the Exchange Act and will file quarterly,
annual and other reports with the Securities and Exchange Commission. Our annual
report will contain the required audited financial statements. We are not
required to deliver an annual report to security holders and will not
voluntarily deliver a copy of the annual report to the security holders. The
reports and other information filed by us will be available for inspection and
copying at the public reference facilities of the Commission, 450 Fifth Street,
N.W., Washington, D.C. 20549.
Copies of the material may be obtained by mail from the Public Reference Section
of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. Information on the operation of the Public Reference Room may
be obtained by calling the SEC at 1-800-SEC-0330. In addition, the Commission
maintains a World Wide Website on the Internet at http://www.sec.gov that
contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission.
PLAN OF OPERATIONS
The discussion contained in this prospectus contains "FORWARD-LOOKING
STATEMENTS" that involve risk and uncertainties. These statements may be
identified by the use of terminology such as "BELIEVES," "EXPECTS," "MAY,"
"WILL," "SHOULD" or "ANTICIPATES" or expressing this terminology negatively or
similar expressions or by discussions of strategy. The cautionary statements
made in this prospectus are applicable to all related forward-looking statements
wherever they appear in this prospectus. Our actual results could differ
materially from those discussed in this prospectus. Important factors that could
cause or contribute to these differences include those discussed under the
caption entitled "RISK FACTORS," as well as those discussed elsewhere in this
registration statement.
We are a development stage company with limited operations or revenues. We are
unable to satisfy cash requirements without management's financial support or
other funding. Our management and certain investors have made $149,975 of
capital contributions to our business. We anticipate, but have no assurance,
that we will meet our cash requirements for the foreseeable future through the
financial support of our management. Management's capital contributions will be
accomplished through interest bearing promissory notes between our company and
management. We have not determined the amount of funds that will be necessary
for management to contribute at this time. Nor is there any assurance our
management will have funds available to loan us as and when we require funds. In
this event, we will be required to seek loans and/or equity funding from third
parties, and there is no assurance we will be able to do so.
22
Over the next twelve months, we plan to further develop our website
WWW.YOURCLONEGUARD.COM to provide DNA related information. Specifically, during
the next 12 months, we anticipate focusing our efforts on the following specific
areas of operations:
1. Internet marketing
2. Maintaining and enhancing content of website
3. Licensing agreements
4. Copyright information and services
We may require additional funds to further develop our website. In the event we
need to raise additional funds, we have not yet determined how, where or when we
will obtain these funds. There is no assurance that we will be able to obtain
financing for our business development, if, as and when required, or on terms
favorable to the Company. If adequate funds are not available to us, we believe
that our business development will be adversely affected.
The cash currently available for operations is in the sum of $53,708. This cash
will be used to fund operations until approximately end of March 2005. During
the period prior to March 2005, the Company may need to seek additional funding
in the form of equity or debt.
Our future capital requirements will also depend on one or more of the following
factors:
- - market acceptance of our services;
- - the extent and progress of our research and development programs;
- - competing technological and market developments; and
- - the costs of commercializing our services.
There can be no assurance that funding will be available on favorable terms to
permit successful commercialization of our DNA services or be successful in our
proposed business operations.
In addition, we have no further credit facility or other committed sources of
capital. We may be unable to establish credit arrangements on satisfactory
terms, if at all. If capital resources are insufficient to meet our future
capital requirements, we may have to raise additional funds to continue
development of our website. There can be no assurance that the funds will be
available on favorable terms, if at all.
To the extent that additional capital is raised through the sale of equity
and/or convertible debt securities, the issuance of the securities will likely
result in dilution to our shareholders.
Until such time as our website is fully developed, we do not expect to have any
significant revenues from our operations. We anticipate that if our website
becomes fully operational, of which there can be no assurance, we will generate
revenues from the accumulation of customer's DNA information and data, in a
copyright compliant state, to the website, and through the sale of
advertisements. There is no assurance that we will be successful in the DNA
accumulations or licensing. We have no other proposed sources of revenue.
Therefore, if we are not successful in this regard, we will be unable to achieve
revenues under our current business plan.
If our company or its management receives proceeds from the sales of the
securities by the selling security shareholders, which neither the company nor
its management has any intent to do, those persons may have conducted an illegal
distribution of our securities and may be deemed underwriters. Accordingly, they
will have liability for any material misrepresentations or omissions in this
document and otherwise in the offer and sale of securities.
We do not anticipate significant research and development expenses over the next
twelve months. We do not expect to purchase or sell any plant and significant
equipment or make any significant changes in the number of employees over the
next twelve months.
DESCRIPTION OF PROPERTY
We do not own any real property at this time, and we conduct our business from
an office at 2890 Vassar Street, Suite A, Reno, NV 89502. We are sharing a small
office space at no cost with an unrelated third party. This is a competitive
rate for similar space in the area.
23
The Company believes that existing facilities are adequate for its needs through
March 2005. Should the Company require additional space at that time, or prior
thereto, the Company believes that such space can be secured on commercially
reasonable terms and without undue operational disruption.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Other than the sale of shares to our officers and directors, we have not entered
into any transactions with our officers, directors, persons nominated for these
positions, beneficial owners of 5% or more of our common stock, or family
members of these persons. We are not a subsidiary of any other company. Mr.
Bandenieks provided organizational services and cash in the sum of $203.62 for
his 30,543,000 shares of Common Stock.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
MARKET INFORMATION.
Our common stock is not traded on any exchange. We plan to eventually seek
listing on the OTC Bulletin Board, once our registration statement has cleared
comments of the Securities and Exchange Commission, and the N.A.S.D. We cannot
guarantee that we will obtain a listing. There is no trading activity in our
securities, and there can be no assurance that a regular trading market for our
common stock will ever be developed.
A market maker sponsoring a company's securities is required to obtain a listing
of the securities on any of the public trading markets, including the
Over-the-Counter Bulletin Board ("OTCBB"). If we are unable to obtain a market
maker for our securities, we will be unable to develop a trading market for our
common stock. We may be unable to locate a market maker that will agree to
sponsor our securities. Even if we do locate a market maker, there is no
assurance that our securities will be able to meet the requirements for a
quotation or that the securities will be accepted for listing on the OTCBB.
We intend to apply for listing of the securities on the OTCBB, but there can be
no assurance that we will be able to obtain this listing. The OTCBB securities
are not listed and traded on the floor of an organized national or regional
stock exchanges. Instead, OTCBB securities transactions are conducted through a
telephone and computer network connecting dealers in stocks. Over-the-counter
stocks are traditionally smaller companies that do not meet the financial and
other listing requirements of a regional or national stock exchange.
However, broker-dealers may be discouraged from effecting transactions in our
Shares because they will be considered penny stocks and will be subject to the
penny stock rules.
Rules 15g-1 through 15g-9 promulgated under the Securities Exchange Act of 1934,
as amended, impose sales practice and disclosure requirements on NASD
brokers-dealers who make a market in a "penny stock." A penny stock generally
includes any non-NASDAQ equity security that has a market price of less than
$5.00 per share. Assuming we get our shares listed for trading, purchases and
sales of our shares are expected to be generally facilitated by NASD
broker-dealers who will act as market makers for our shares. The additional
sales practice and disclosure requirements imposed upon brokers-dealers may
discourage broker-dealers from effecting transactions in our shares, which could
severely limit the market liquidity of the shares and impede the sale of our
shares in the secondary market, assuming one develops.
Under the penny stock regulations, a broker-dealer selling penny stock to anyone
other than an established customer or "accredited investor" (generally, an
individual with net worth in excess of $1,000,000 or an annual income exceeding
$200,000, or $300,000 together with his or her spouse) must make a special
suitability determination for the purchaser and must receive the purchaser's
written consent to the transaction prior to sale, unless the broker-dealer or
the transactions is otherwise exempt.
In addition, the penny stock regulations require the broker-dealer to deliver,
prior to any transaction involving a penny stock, a disclosure schedule prepared
by the Commission relating to the penny stock market, unless the broker-dealer
or the transaction is otherwise exempt. A broker-dealer is also required to
disclose commissions payable to the broker-dealer and the registered
representative and current quotations for the securities. Finally, a
broker-dealer is required to send monthly statements disclosing recent price
information with respect to the penny stock held in a customer's account and
information with respect to the limited market in penny stocks.
As of December 31, 2003, there were approximately 54 holders on record of our
common stock.
24
EXECUTIVE COMPENSATION
No executive compensation has been paid since our inception.
FINANCIAL STATEMENTS
BV PHARMACEUTICAL, INC.
(A Development Stage Company)
REPORT AND FINANCIAL STATEMENTS
December 31, 2003 and 2002
(STATED IN US DOLLARS)
25
INDEPENDENT AUDITORS' REPORT
To the Stockholders,
BV Pharmaceutical, Inc.
We have audited the accompanying balance sheets of BV Pharmaceutical, Inc. (A
Development Stage Company) as of December 31, 2003 and 2002 and the statements
of operations, stockholders' equity and cash flows for each of the years in the
three year period ended December 31, 2003 and for the period June 30, 2000 (Date
of Incorporation) to December 31, 2003. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform an audit to obtain reasonable assurance 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 by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, these financial statements referred to above present fairly, in
all material respects, the financial position of BV Pharmaceutical, Inc. as of
December 31, 2003 and 2002 and the results of its operations and its cash flows
for each of the years in the three year period ended December 31, 2003 and for
the period June 30, 2000 (Date of Incorporation) to December 31, 2003, in
conformity with accounting principles generally accepted in the United States of
America.
The accompanying financial statements referred to above have been prepared
assuming that the Company will continue as a going concern. As discussed in Note
1 to the financial statements, the Company is in the development stage, and has
no established source of revenue and is dependent on its ability to raise
capital from shareholders or other sources to sustain operations. These factors,
along with other matters as set forth in Note 1, raise substantial doubt that
the Company will be able to continue as a going concern. Management plans in
regard to their planned financing and other matters are also described in Note
1. The financial statements do not include any adjustments that might result
from the outcome of this uncertainty.
Vancouver, Canada
January 5, 2004 except for Note 7, CHARTERED ACCOUNTANTS and
which is as of January 23, 2004 CERTIFIED PUBLIC ACCOUNTANT (NEVADA)
26
BV PHARMACEUTICAL, INC.
(A Development Stage Company)
BALANCE SHEETS
December 31, 2003 and 2002
(STATED IN US DOLLARS)
ASSETS 2003 2002
---- ----
Current
Cash $ 3,708 $ -
================= ================
LIABILITIES
Current
Accounts payable $ 3,600 $ -
----------------- ----------------
STOCKHOLDERS' EQUITY
Capital stock - Notes 3 and 7
Authorized: 100,000,000 common shares, no par value
Issued: 37,480,100 shares (2002: 37,480,100) 99,975 99,975
Deficit accumulated during the development stage ( 99,867) ( 99,975)
----------------- ----------------
108 -
----------------- ----------------
$ 3,708 $ -
================= ================
Nature and Continuance of Operations - Note 1
Subsequent Event - Note 7
SEE ACCOMPANYING NOTES
27
BV PHARMACEUTICAL, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
for the years ended December 31, 2003, 2002,
2001, and for the period from June 30, 2000 (Date of
Incorporation) to December 31, 2003
(STATED IN US DOLLARS)
June 30, 2000
(Date of Incor-
poration) to
Years ended December 31, December 31,
2003 2002 2001 2003
---- ---- ---- ----
Revenue
License fee $ 10,000 $ - $ - $ 10,000
---------------- ---------------- ---------------- ----------------
Administrative Expenses
Advertising and promotion - 1,001 - 1,001
Consulting 3,000 17,897 17,775 38,672
Filing fees 325 - - 325
Investor relations - 9,996 - 9,996
Office and miscellaneous 911 691 500 2,102
Professional fees 5,577 - 883 6,460
Rent - 505 - 505
Intellectual property acquisition
costs - Note 6 - - 50,000 50,000
Website 79 - 727 806
---------------- ---------------- ---------------- ----------------
9,892 30,090 69,885 109,867
---------------- ---------------- ---------------- ----------------
Net income (loss) for the period $ 108 $ ( 30,090) $ ( 69,885) $ ( 99,867)
================ ================ ================ ================
Basic income (loss) per share $ 0.00 $ ( 0.00) $ ( 0.00)
================ ================ ================
Weighted average number of
shares outstanding 37,480,100 37,431,771 37,009,386
================ ================ ================
SEE ACCOMPANYING NOTES
28
BV PHARMACEUTICAL, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
for the years ended December 31, 2003, 2002,
2001 and for the period from June 30, 2000 (Date of
Incorporation) to December 31, 2003
(STATED IN US DOLLARS)
June 30, 2000
(Date of Incor-
poration) to
Years ended December 31, December 31,
2003 2002 2001 2003
---- ---- ---- ----
Cash flows from (used in) Operating
Activities
Net income (loss) for the period $ 108 $ ( 30,090) $ ( 69,885) $ ( 99,867)
Change in non-cash working capital balance
related to operations:
Accounts payable 3,600 - - 3,600
---------------- ---------------- ---------------- ----------------
3,708 ( 30,090) ( 69,885) ( 96,267)
---------------- ---------------- ---------------- ----------------
Cash flows from Financing Activity
Capital stock issued - 24,000 75,771 99,975
---------------- ---------------- ---------------- ----------------
Increase (decrease) in cash 3,708 ( 6,090) 5,886 3,708
Cash, beginning of the period - 6,090 204 -
---------------- ---------------- ---------------- ----------------
Cash, end of the period $ 3,708 $ - $ 6,090 $ 3,708
================ ================ ================ ================
Supplemental disclosure of cash flow
information
Cash paid for:
Interest $ - $ - $ - $ -
================ ================ ================ ================
Income taxes $ - $ - $ - $ -
================ ================ ================ ================
SEE ACCOMPANYING NOTES
29
SEE ACCOMPANYING NOTES
BV PHARMACEUTICAL, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY for
the period June 30, 2000 (Date of Incorporation) to
December 31, 2003
(STATED IN US DOLLARS)
Deficit
Accumulated
During the
COMMON STOCK Development
------------
*SHARES PAR VALUE STAGE TOTAL
------ --------- ----- -----
Capital stock subscribed pursuant to an offering
memorandum for cash - at $0.000007 30,543,000 $ 204 $ - $ 204
---------- -------------- -------------- --------------
Balance, December 31, 2000 30,543,000 204 - 204
Capital stock issued pursuant to a private
placement - at $0.01 6,777,100 67,771 - 67,771
- at $0.20 40,000 8,000 - 8,000
Net loss for the period - - ( 69,885) ( 69,885)
---------- -------------- -------------- --------------
Balance, December 31, 2001 37,360,100 75,975 ( 69,885) 6,090
Capital stock issued pursuant to a private
placement - at $0.20 120,000 24,000 - 24,000
Net loss for the period - - ( 30,090) ( 30,090)
---------- -------------- -------------- --------------
Balance, December 31, 2002 37,480,100 99,975 ( 99,975) -
Net income for the year - - 108 108
---------- -------------- -------------- --------------
Balance, December 31, 2003 37,480,100 $ 99,975 $ ( 99,867) $ 108
========== ============== ============== ==============
* The common stock issued has been retroactively restated to reflect a forward
split of 1,500 new shares for one old share on January 5, 2001.
SEE ACCOMPANYING NOTES
30
BV PHARMACEUTICAL, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
December 31, 2003 and 2002
(STATED IN US DOLLARS)
Note 1 NATURE AND CONTINUANCE OF OPERATIONS
The Company was incorporated as All Printer Supplies.com in the
State of Nevada, U.S.A. on June 30, 2000. On April 17, 2003, the
Company changed it name to BV Pharmaceutical, Inc.
BV Pharmaceutical, Inc. is a DNA Profile and Copyright Bank whose
core business is to establish the client's DNA in a copyright
compliant state so as to guarantee that it cannot be reproduced or
utilized in any form without the consent of the owner.
The Company intends to license the process for collection of DNA
samples to marketing agents on a geographical basis in order to
build revenue streams.
These financial statements have been prepared on a going concern
basis. Since inception, June 30, 2000, to December 31, 2003, the
Company has accumulated a deficit of $99,867. Its ability to
continue as a going concern is dependent upon the ability of the
Company to generate profitable operations in the future and/or to
obtain the necessary financing to meet its obligations and repay
its liabilities arising from normal business operations when they
come due. The outcome of these matters cannot be predicted with
any certainty at this time.
The Company plans to obtain additional financing by loans from its
director and president, however, there is no guarantee that
sufficient additional funds will be received (Note 7). The Company
may also solicit loans from other non-affiliated individuals,
wherever, there is no assurance that such loans can be negotiated
or that such financing will be available on terms favourable to
the Company. The Company may also obtain additional financing by
the sale of its common stock, however, the Company is not publicly
listed nor is its stock currently quoted or traded and currently
there are no plans for the sale of common stock. There can be no
assurance that such additional funding will be available on
acceptable terms, if at all The Company's services require further
development and there can be no assurance that it will be
successful in selling its services. During the subsequent year,
the cost of developing services for sale is likely to exceed their
sale proceeds.
Note 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Company have been prepared in
accordance with accounting principles generally accepted in the
United States of America. Because a precise determination of many
assets and liabilities is dependent upon future events, the
preparation of financial statements for a period necessarily
involves the use of estimates which have been made using careful
judgment. Actual results may vary from these estimates.
The financial statements have, in management's opinion, been
properly prepared within reasonable limits of materiality and
within the framework of the significant accounting policies
summarized below:
DEVELOPMENT STAGE
The Company, is currently a development stage company as defined
under Statement of Financial Accounting Standards ("SFAS") No. 7.
As required for development stage enterprises, the statements of
operations and cash flows include a total of all expenditures from
inception, June 30, 2000 to December 31, 2003.
INTANGIBLES
The Company follows SFAS No 142, "Goodwill and Other Intangible
Assets". SFAS No. 142 no longer permits the amortization of
goodwill and indefinite-lived intangible assets. Instead, these
assets must be reviewed annually (or more frequently under
prescribed conditions) for impairment in accordance with this
statement. If the carrying amount of the reporting unit's goodwill
or indefinite-lived intangible assets exceeds the implied fair
value, an impairment loss is recognized for an amount equal to
that excess. Intangible assets that do not have indefinite lives
are amortized over their useful lives.
FINANCIAL INSTRUMENTS
The carrying value of the Company's financial instruments,
consisting of cash and accounts payable approximates its fair
value due to the short-term maturity. Unless otherwise noted, it
is management's opinion that the Company is not exposed to
significant interest, currency or credit risks arising from this
financial instrument.
31
INCOME TAXES
The Company follows SFAS No. 109, "Accounting for Income Taxes"
which requires the use of the asset and liability method for
accounting for income taxes. Under the asset and liability method
of SFAS No. 109, deferred tax assets and liabilities are
recognized for the future tax consequences attributable to
temporary differences between the financial statements carrying
amounts of existing assets and liabilities and loss carryforwards
and their respective tax bases. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply
to taxable income in the year in which those temporary differences
are expected to be recovered or settled.
BASIC AND DILUTED EARNINGS (LOSS) PER SHARE
The Company reports basic earnings (loss) per share in accordance
with the SFAS No. 128, "Earnings Per Share". Basic earnings (loss)
per share is computed using the weighted average number of shares
outstanding during the period. Diluted earnings (loss) per share
includes the potentially dilutive effect of outstanding common
stock options which are convertible into common shares.
FOREIGN CURRENCY TRANSLATION
Monetary items denominated in a foreign currency are translated
into US dollars, the reporting currency, at exchange rates
prevailing at the balance sheet date and non-monetary items are
translated at exchange rates prevailing when the assets were
acquired or obligations incurred. Foreign currency denominated
revenue and expense items are translated at exchange rates
prevailing at the transaction date. Gains or losses arising from
the translations are included in operations.
REVENUE RECOGNITION POLICY
Revenue from license agreements are recognized on execution of the
license agreement and collectability is reasonably assured.
WEBSITE MAINTENANCE
Website maintenance costs are expensed as incurred.
NEW ACCOUNTING STANDARDS
Management does not believe that any recently issued, but not yet
effective accounting standards if currently adopted could have a
material effect on the accompanying financial statements.
Note 3 CAPITAL STOCK - Note 7
On January 5, 2001, the Company approved a forward split of its
common stock on the basis of 1,500 new for 1 old. The number of
shares referred to in these financial statements has been restated
wherever applicable to give retroactive effect on the forward
stock split.
Note 4 FUTURE INCOME TAXES
Future income tax assets and liabilities are recognized for
temporary differences between the carrying amount of the balance
sheet items and their corresponding tax values as well as for the
benefit of losses available to be carried forward to future years
for tax purposes that are likely to be realized.
Significant components of the Company's future tax assets and
liabilities, after applying enacted corporate income tax rates,
are as follows:
2003 2002
---- ----
Future income tax assets
Net tax losses carried forward $ 22,205 $ 22,242
Less: valuation allowance (22,205) (22,242)
$ - $ -
The Company recorded a valuation allowance against its future
income tax assets based on the extent to which it is
more-likely-than-not that sufficient taxable income will be
realized during the carry-forward periods to utilize all the
future tax assets.
32
Note 5 INCOME TAXES
No provision for income taxes has been provided in these financial
statements due to the net loss. At September 30, 2003 the Company
has net operating loss carryforwards, which expire commencing in
2022, totalling approximately $99,867, the benefit of which has
not been recorded in the financial statements.
Note 6 ACQUISITION AGREEMENT
In October 2001, the Company entered into an agreement with an
unrelated private company to acquire certain patents, intellectual
property and common stock and agreed to advance a non-refundable
payment of $50,000 as the initial payment of a total of
$2,000,000. Upon completion of the due diligence process, the
Company elected not to proceed with the acquisition. As a result,
the Company has written off the non-refundable payment of $50,000.
Note 7 SUBSEQUENT EVENT
Subsequent to December 31, 2003, the Company issued two
convertible debentures in the principal amount of $25,000 each.
These debentures are convertible into common shares of the Company
on the basis of $0.20 per common share for each $1 of principal
and interest accrued thereon, at the option of the debenture
holder, at any time within 24 months from the date of the
debenture. These debentures bear interest at 10% per annum on any
unpaid principal balance which may be paid, commencing on the last
day of the third calendar year from the date of the debenture, in
either cash or common shares at the option of the holder. If
interest is paid in shares, then the shares will have a deemed
value of $2.50 each.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
The accounting firm of Amisano Hanson, Chartered Accountants audited our
financial statements. Since inception, we have had no changes in or
disagreements with our accountants.
DEALER PROSPECTUS DELIVERY REQUIREMENT
Until __________________, all dealers that effect transactions in these
securities, whether or not participating in this offering, may be required to
deliver a prospectus. This is in addition to the dealers' obligation to deliver
a prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
PART II
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our Articles of Incorporation and By laws provide that, to the fullest extent
permitted by law, none of our directors or officers shall be personally liable
to us or our shareholders for damages for breach of any duty owed to our
shareholders or us. Nevada law provides that a director shall have no personal
liability for any statement, vote, decision or failure to act, regarding
corporate management or policy by a director, unless the director breached or
failed to perform the duties of a director. A company may also protect its
officers and directors from expenses associated with litigation arising from or
related to their duties, except for violations of criminal law, transactions
involving improper benefit or willful misconduct. Our By-laws contain provisions
to indemnify the officers and directors of ours against any contingency or peril
as may be determined to be in our best interest and in conjunction therewith, to
procure, at our expense, policies of insurance.
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table is an itemization of all expenses, without consideration to
future contingencies, incurred or expected to be incurred by our corporation in
connection with the issuance and distribution of the securities being offered by
this prospectus. Items marked with an asterisk (*) represent estimated expenses.
We have agreed to pay all the costs and expenses of this offering. Selling
Security Holders will pay no offering expenses.
ITEM EXPENSE
SEC Registration Fee $ 346.85
Legal Fees and Expenses $ 5,500.00
Accounting Fees and Expenses $ 3,500.00
Miscellaneous/Reserve $ 653.15
==========
Total $10,000.00
33
RECENT SALES OF UNREGISTERED SECURITIES
From June 2000 through December 2003, we issued 37,480,100 shares of our Common
Stock, with no par value, under exemptions from registration provided in
Regulation S promulgated under the Securities Act and/or Section 4(2) of the
Securities Act of 1933, as amended. No underwriters were used in these
transactions, and no fees or commissions were paid to anyone.
In December 2000, we issued 20,362 shares of our common stock to Art Bandenieks,
a director and officer, and an "accredited" investor, for $203.62 cash and
compensation for his services as an officer and director of the company. This
transaction did not involve a public offering and was exempt from registration
pursuant to Section 4(2) of the Securities Act of 1933. Subsequently, the
company approved a forward split of the total 20,362 outstanding shares on a
1,500 for 1 basis, resulting in a total of 30,543,000 shares outstanding.
In January 2001, we issued 6,777,100 shares of our common stock at a price of
$.01 per share, or aggregate cash proceeds of $67,771. This transaction involved
5 foreign purchasers and was exempt from registration pursuant to Regulation S
of the Securities Act of 1933, based on offshore transactions involving all
non-U.S. persons in sales that took place entirely outside the U.S. These were
Category 3 transactions under Rule 903, and satisfied the provisions of Rule 903
(i) and (iii) by: implementing offering restrictions; making the sale only to
non-U.S. persons, who certified same; restricting the resale to transactions
done only in accordance with the provisions of Rules 901-905, and Preliminary
Notes; imposing a restrictive legend on the securities; and the Company agreeing
by contract not to register any transfer not done pursuant to Regulation S.
In November 2001, we issued 40,000 shares of our common stock for $0.20 per
share, or aggregate cash proceeds of $8,000. This transaction involved 45
purchasers and was exempt from registration pursuant to Regulation S of the
Securities Act of 1933, based on offshore transactions involving all non-U.S.
persons in sales that took place entirely outside the U.S. These were Category 3
transactions under Rule 903, and satisfied the provisions of Rule 903 (i) and
(iii) by: implementing offering restrictions; making the sale only to non-U.S.
persons, who certified same; restricting the resale to transactions done only in
accordance with the provisions of Rules 901-905, and Preliminary Notes; imposing
a restrictive legend on the securities; and the Company agreeing by contract not
to register any transfer not done pursuant to Regulation S.
The November 2001 transaction also involved 1 person in the U.S., but did not
involve a public offering and was exempt from registration pursuant to Section
4(2) of the Securities Act of 1933. This investor was an "accredited" investor.
In May 2002, we issued 120,000 shares of our common stock for $0.20 per share,
or aggregate cash proceeds of $24,000. This transaction involved 2 purchasers
and was exempt from registration pursuant to Regulation S of the Securities Act
of 1933, based on offshore transactions involving all non-U.S. persons in sales
that took place entirely outside the U.S. These were Category 3 transactions
under Rule 903, and satisfied the provisions of Rule 903 (i) and (iii) by:
implementing offering restrictions; making the sale only to non-U.S. persons,
who certified same; restricting the resale to transactions done only in
accordance with the provisions of Rules 901-905, and Preliminary Notes; imposing
a restrictive legend on the securities; and the Company agreeing by contract not
to register any transfer not done pursuant to Regulation S.
Subsequent to December 31, 2003, the Company issued two convertible debentures
in the principal amount of $25,000 each, for a total amount of $50,000.00, to
two (2) separate unrelated non-U.S. parties. The accrued principal and interest
on these debentures are convertible into common shares of the Company on the
basis of $0.20 per common share, at the option of the debenture holder, at any
time within 24 months from the date of the debenture. These debentures bear
interest at 10% per annum on any unpaid principal balance, and the unpaid
balance shall be paid, on or before two (2) years from the date of the
debentures, in either cash or common shares, at the option of the holder.
34
EXHIBITS
Exhibit
Number Exhibit Description
- ------- -------------------
3.1 Articles of Incorporation
3.2 Amendment to Articles of Incorporation
3.3 Bylaws
4 Instrument Defining the Right of Holders - Share Certificate
5 Legal Opinion
23 Consents of Experts
UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange Commission this
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against these liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by the
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether this indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
The undersigned Registrant undertakes:
1. To file, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to:
a. Include any prospectus required by Section 10(a)(3)of the Securities Act of
1933;
b. Reflect in the prospectus any facts or events which, individually or
together, represent a fundamental change in the information in the registration
statement;
c. Include any additional or changed material information on the plan of
distribution.
2. That, for determining liability under the Securities Act, to treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial
bonafide offering.
3. To file a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the offering.
4. Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission the
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable.
5. In the event that a claim for indemnification against the liabilities, other
than the payment by the Registrant of expenses incurred and paid by a director,
officer or controlling person of the Registrant in the successful defense of any
action, suit or proceeding, is asserted by the director, officer or controlling
person in connection with the securities being registered by this registration
statement, will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether the indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of the issue.
6. For purposes of determining any liability under the Securities Act, the
information omitted from the form of prospectus filed as part of this
31
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be a part of this Registration
Statement as of the time it was declared effective.
7. For the purposes of determining any liability under the Securities Act, each
post-effective amendment that contains a form of prospectus shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
the requirements of filing of Form SB-2 and authorized this registration
statement to be singed on its behalf by the undersigned, in Aldergrove, B.C., on
this 16th day of March, 2004.
BV PHARMACEUTICAL, INC.
BY: /s/ ART BANDENIEKS
----------------------------------
ART BANDENIEKS, PRESIDENT
Date: March 16, 2004
In accordance with the requirements of the Securities act of 1933, this
registration statement was signed by the following persons in the capacities and
on the dates stated.
/s/ ART BANDENIEKS /s/ LEE SOUTHERN
- ------------------------------------ ---------------------------------------
ART BANDENIEKS LEE SOUTHERN
TITLE: PRESIDENT, CEO, SECRETARY TITLE: TREASURER, CHIEF FINANCIAL
& DIRECTOR OFFICER & DIRECTOR
DATE: MARCH 16, 2004 DATE: MARCH 16, 2004
32