AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON
MARCH 19, 2004
REGISTRATION NO. 333-113726
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM SB-2
AMENDMENT NO. 8
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
Tel: 775.352.4160
(Address and telephone 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, $0.001 par value $1,387,420.00 $346.85
per share 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. The fixed price for the offer and sale of the shares shall be $.20
until the shares of common stock becomes quoted on the OTC Bulletin Board or
other specified securities exchange.
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",
AT PAGE 4.
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 February __, 2005.
2
TABLE OF CONTENTS
Page
Front Cover Page of Prospectus 1
Inside Front and Outside Back Cover Pages of Prospectus 2
Summary Information 5
Prospectus Summary 5
The Offering 5
Financial Summary Information 5
Risk Factors 6
Risks Related to Our Company and Proposed Business 6
Our Status As A Development Stage Company With, Minimal Assets, And
Nominal Revenues Subjects Your Investment To A High Degree Of Risk
Because We Have A Limited History Of Operations
Although We Believe We Have Sufficient Funds To Operate For The Next
Twelve Months Of Operations, We May Encounter Unforeseen Capital
Needs And We Have No Source Of Additional Funding
We Have Substantial Long-Term Capital Needs And No Source Of
Additional Funding
We Have A Poor Financial Condition And May Be Unable To Adequately
Develop Our Business Or Earn A Profit
Our Management Will Devote Limited Attention To Our Business
Operations And This May Limit The Development Of Our Business
We Have Little Managerial Expertise In The Development Or
Dissemination Of DNA Information And This May Cause Our Business To
Suffer
Our Lack Of Substantial Revenues And Profits, Combined With Our
Losses, Make It Difficult For Us To Succeed As A Business. We May
Fail To Fully Develop Our DNA Process
There Is No Public Market For Our Common Stock And You May Be Unable
To Sell Your Shares.
If We Are Unable To Attract And Retain Qualified Personnel With
DNA-Related Experience
If The Securities Do Not Meet Blue Sky Resale Requirements, You May Be
Unable To Resell Your Securities.
Voting Control Of Our Company Is Held One Shareholder And Other
Shareholders Will Have Little Or No Ability To Affect Control Of The
Company.
Risks Related To Our Operations 7
Our Auditor Has Expressed Substantial Doubt About Our Ability To
Continue As A Going Concern
We Depend On Our Management And, If We Lose Their Services, Our
Ability To Manage The Day-To-Day Aspects Of Our Business Will Be
Weakened
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
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
Intellectual Property And Proprietary Rights Of Others Could Prevent
Us From Using Necessary Technology.
Risks Related to Competition and Our Industry 8
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.
Many Of Our Competitors And Potential Competitors Have Superior
Resources, Which Could Place Us At A Cost And Price Disadvantage.
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
Our Inability To Raise Additional Capital May Result In Our Business
Failing And The Loss Of Your Entire Investment. Protection Of
The Company's Intellectual Property Is Limited
Penny Stock Regulations May Limit The Potential Purchasers Of Our
Stock In Any Market That May Develop.
Use of Proceeds 8
Determination of Offering Price 8
Dilution 9
Selling Security Holders 9
Plan of Distribution 11
Legal Proceedings 12
Directors, Executive Officers, Promoters and Control Management 12
Security Ownership of Certain Beneficial Owners and Management 13
Description of Securities 14
3
Common Stock 14
Shares Eligible for Future Sale 14
Interest of Named Experts and Counsel 15
Disclosure of Commission Position on Indemnification
for Securities Act Liabilities 15
Description of Business 16
Management's Discussion and Analysis or Plan of Operation 20
Description of Property 21
Certain Relationships and Related Transactions 21
Market for Common Equity and Related Stockholder Matters 21
Executive Compensation 22
Financial Statements 22
Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure 41
Indemnification 41
Other Expenses of Issuance and Distribution 41
Recent Sales of Unregistered Securities 41
Exhibits 43
Undertakings 43
Signatures 44
4
SUMMARY INFORMATION
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.
Our Company is not a blank check company as the term is defined under Rule 419
of Regulation C, and does not intend to merge or acquire another company in the
foreseeable future.
THE OFFERING
Securities Offered 6,937,100 shares of Common Stock.
Offering Price Per Share $.20. The fixed price for the offer and sale
of the shares shall be $0.20 per share
until the shares of common stock becomes
quoted on the OTC Bulletin Board or other
specified securities exchange.
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: 09/30/04 12/31/03 12/31/02 12/31/01
_______________________________________________________________________
CASH (1) $26,303 $3,708 $0 $6,090
ACCOUNTS RECEIVABLE $ 7,000 $ 0 0 $ 0
TOTAL CURRENT ASSETS $33,303 $3,708 $0 $6,090
TOTAL LIABILITIES $59,058 $3,600 $0 $ 0
STOCKHOLDERS' EQUITY $(25,755) $ 108 $0 $6,090
5
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 The operation and results of our business are subject to risks and
all of the material risks are set forth in this section, including the following
general risks:
RISKS RELATED TO OUR COMPANY AND PROPOSED BUSINESS
OUR STATUS AS A DEVELOPMENT STAGE COMPANY WITH, Minimal Assets, and NOMINAL
REVENUES SUBJECTS YOUR INVESTMENT TO A HIGH DEGREE OF RISK BECAUSE WE HAVE A
LIMITED HISTORY OF OPERATIONS, May Fail in Our Business, Cease Operations AND
YOU MAY LOSE YOUR ENTIRE INVESTMENT.
We only recently started our business operations, have limited financial
resources and 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. 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, or at all. As a result of our limited 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, cease operation and you may lose your entire
investment.
ALTHOUGH WE BELIEVE WE HAVE SUFFICIENT FUNDS TO OPERATE FOR THE NEXT TWELVE
MONTHS OF OPERATIONS, WE MAY ENCOUNTER UNFORESEEN CAPITAL NEEDS AND WE HAVE NO
SOURCE OF ADDITIONAL FUNDING, SO WE MAY CEASE OPERATIONS AND YOU MAY LOSE YOUR
ENTIRE INVESTMENT. WE MAY CEASE OPERATIONS AND YOU MAY LOSE YOUR ENTIRE
INVESTMENT.
We currently have sufficient funds to operate through September 2005. These
funds that have been raised through investment funding and revenues, to date, in
the amount of $1200 from the sale of the Company's in home self test DNA Profile
Kit. We additionally have license sales in the amount of $24,000. We expect to
sustain our operations with existing investment funds and sales revenues, 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. If our business is not successful, we may fail, cease operations and
you may lose your entire investment.
WE HAVE SUBSTANTIAL LONG-TERM CAPITAL NEEDS AND NO SOURCE OF ADDITIONAL FUNDING,
SO WE MAY NOT BE ABLE TO OPERATE PAST THE INITIAL 12 MONTHS OF OPERATIONS.
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
accumulation and storage 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, SO WE MAY FAIL AND YOU MAY LOSE YOUR ENTIRE
INVESTMENT.
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 DNA samples and DNA profile results
6
in a 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. If our business is
not successful, we may fail, cease operations and you may lose your entire
investment.
OUR MANAGEMENT WILL DEVOTE LIMITED ATTENTION TO OUR BUSINESS OPERATIONS AND THIS
MAY LIMIT THE DEVELOPMENT OF OUR BUSINESS AND WE MAY FAIL IN OUR BUSINESS, CEASE
OPERATIONS AND YOU MAY LOSE YOUR ENTIRE INVESTMENT.
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 ten hours each per week of their time to our
Company's business, for a total of twenty hours per week. 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 and the loss of your entire investment.
WE HAVE LITTLE MANAGERIAL EXPERTISE IN THE DEVELOPMENT OR DISSEMINATION OF DNA
INFORMATION AND THIS MAY CAUSE OUR BUSINESS TO SUFFER AND WE MAY FAIL IN OUR
BUSINESS, CEASE OPERATIONS AND YOU MAY LOSE YOUR ENTIRE INVESTMENT.
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. If our management is unable to develop or gain the necessary
expertise to operate our business including the database, we may fail in our
business, cease operations and you may lose your entire investment.
OUR LACK OF SUBSTANTIAL REVENUES AND PROFITS, COMBINED WITH OUR LOSSES, MAKE IT
DIFFICULT FOR US TO SUCCEED AS A BUSINESS. WE MAY FAIL TO FULLY DEVELOP OUR DNA
PROCESS AND MAY FAIL IN OUR BUSINESS, CEASE OPERATIONS AND YOU MAY LOSE YOUR
ENTIRE INVESTMENT.
We have nominal revenues and limited revenue sources, yet we have significant
costs and losses. Our DNA profile process has been established, but we continue
to refine and develop. We cannot assure you that we will obtain the necessary
working capital or expertise to fully develop it. Thus, we may fail in our
business, cease operations and you may lose your entire investment.
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.
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.
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, which are state securities laws, rules and regulations regarding
the purchase and sale of securities in the states in which the proposed
purchasers reside. If we fail to meet these qualifications, you may not be able
to sell your securities without compliance with the Blue Sky laws and the
securities may be of little or no value to you. We have very limited capital,
but sufficient capital to afford the expenses necessary to meet Blue Sky
requirements. We currently intend to meet Blue Sky requirements in the State of
Texas and we are estimating $500 in expenses to meet those requirements.
7
Voting Control Of Our Company Is Held One Shareholder And Other Shareholders
Will Have Little Or No Ability To Affect Control Of The Company. Mr. Art
Bandenieks, our Founder, Officer, Director and Controlling Shareholder owns 81%
of the total issued and outstanding shares of our stock and has virtually total
control over all decisions, so you will have little or no ability to control the
Company or our business.
Because Mr. Bandenieks has such a large stock ownership position in our company,
you, as a shareholder, have very little ability to exercise any control over the
Company or its operations. The vast majority of decisions in the Company are
decided by majority control, which is firmly held by Mr. Bandenieks and your
vote of your shares will have little or no impact on the action by shareholders.
RISKS RELATED TO OUR OPERATIONS
OUR AUDITOR HAS EXPRESSED SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE AS A
GOING CONCERN AND IF WE FAIL TO PRODUCE REVENUES, WE MAY FAIL IN OUR BUSINESS,
CEASE OPERATIONS, AND YOU MAY LOSE YOUR ENTIRE INVESTMENT.
Our independent auditor has reviewed our financial data and information and
rendered an opinion that he has substantial doubt about our ability to develop
our business and become successful because we have limited financial resources.
In we fail, you may lose your entire investment.
WE DEPEND ON OUR MANAGEMENT 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. THUS, WE MAY FAIL IN OUR BUSINESS, CEASE OPERATIONS, AND YOU
MAY LOSE YOUR ENTIRE INVESTMENT.
We are highly dependent on the services of our management, Mr. Bandenieks and
Lee Southern. The loss of the services of these two members 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. Thus, we may fail in our business,
cease operations, and you may lose your entire investment.
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. THIS COULD CAUSE US
TO FAIL IN OUR BUSINESS, CEASE OPERATIONS, AND YOU MAY LOSE YOUR ENTIRE
INVESTMENT.
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. Thus, we
may fail in our business, cease operations, and you may lose your entire
investment.
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. THIS
COULD CAUSE US TO FAIL IN OUR BUSINESS, CEASE OPERATIONS, AND YOU MAY LOSE YOUR
ENTIRE INVESTMENT.
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.
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. Thus, we may fail in our business, cease operations,
and you may lose your entire investment.
INTELLECTUAL PROPERTY AND PROPRIETARY RIGHTS OF OTHERS COULD PREVENT US FROM
USING NECESSARY TECHNOLOGY. IF WE ARE UNABLE TO USE NECESSARY TECHNOLOGY, THIS
COULD CAUSE US TO FAIL IN OUR BUSINESS, CEASE OPERATIONS, AND YOU MAY LOSE YOUR
ENTIRE INVESTMENT.
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
8
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. Thus, we may fail in our business, cease operations, and you may lose
your entire investment.
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. Some of the primary DNA service and information
providers and competitors are: DNA Testing Centre, Inc., GeneTree DNA Testing
Center, Metaphase Genetics, Genex Diagnostics SwabTest and DNA Diagnostic
Center. 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. THUS, WE MAY NEVER REALIZE
REVENUES SUFFICIENT TO SUSTAIN OUR OPERATIONS AND, WE MAY FAIL IN OUR BUSINESS,
CEASE OPERATIONS AND YOU MAY LOSE YOUR ENTIRE INVESTMENT.
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.
THUS, WE MAY NEVER REALIZE REVENUES SUFFICIENT TO SUSTAIN OUR OPERATIONS AND, WE
MAY FAIL IN OUR BUSINESS, CEASE OPERATIONS AND YOU MAY LOSE YOUR ENTIRE
INVESTMENT.
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.
THUS, WE MAY NEVER REALIZE REVENUES SUFFICIENT TO SUSTAIN OUR OPERATIONS AND, WE
MAY FAIL IN OUR BUSINESS, CEASE OPERATIONS AND YOU MAY LOSE YOUR ENTIRE
INVESTMENT.
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. Thus, we may never realize revenues sufficient to sustain
our operations and, we may fail in our business, cease operations and you may
lose your entire investment.
OUR INABILITY TO RAISE ADDITIONAL CAPITAL MAY RESULT IN OUR BUSINESS FAILING AND
THE LOSS OF YOUR ENTIRE INVESTMENT.
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 result in the
Company's inability to continue to conduct business, poor financial results and
revenues and poor results of operations. If additional capital is raised through
the sale of additional equity or convertible securities, dilution to the
Company's stockholders is likely to occur
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 within the past year. 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.
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
9
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
The offering price for the sale of the shares was set arbitrarily and shall be
$.20 per share until the shares of common stock becomes quoted on the OTC
Bulletin Board or other specified securities exchange.
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.
Beneficial Ownership Beneficial Ownership
Maximum Number
Name (1) Before Offering of Shares Being Shares After
Shares Percent 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 1,000 Less than 1% 1,000 0
Chan, Kenny 1,000 Less than 1% 1,000 0
10
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 5,000 Less than 1% 5,000 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
Gallie, Kenneth 500 Less than 1% 500 0
Glinsbockel, Sylvia 500 Less than 1% 500 0
Gorrell, A. Ross 1,000 Less than 1% 1,000 0
Haas, Erwin 2,000 Less than 1% 2,000 0
Hamilton, Richard 1,500 Less than 1% 1,500 0
Havanna Consultants 6,500 Less than 1% 6,500 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 2,000 Less than 1% 2,000 0
Larson, Christina 500 Less than 1% 500 0
Larson, Christina in Trust 500 Less than 1% 500 0
For Jennifer Larson
Legg, William E. 500 Less than 1% 500 0
11
Lopushinsky, Terri 500 Less than 1% 500 0
Lyons, Donald 1,500 Less than 1% 1,500 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 500 Less than 1% 500 0
For Shyanne Visram
Visram, Asif 500 Less than 1% 500 0
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
<FN>
(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. except as set forth in footnote 4 below.
(2) Assumes the sale of all shares offered by Selling Security Holder.
(3) None of the selling shareholders are broker-dealers or affiliated with
broker-dealers.
(4) 541672 B.C. Ltd.- control person is Al Charuk; who is related to the four
(4) individual shareholders named Charuk; Havanna Consultants - control
person is Brent Shaw; and EH&P Investments AG - control person is Erwin
Haas, who owns shares individually.
</FN>
We intend to seek qualification for sale of the Selling Shareholders' respective
securities only in the State of Texas, where we believe 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 state of Texas. There is no assurance that the state of
Texas will approve resale of our securities. Selling shareholders are informed,
through this prospectus, that we are seeking qualification for the sale of the
securities in the state of Texas. The Company is paying all of the offering
expenses, including expenses in connection with the registration of the
securities of the Selling Shareholders. Selling Security Holders will pay no
expenses in connection with this offering. There will be no trading of the
Company's securities unless and until such time as the Company has successfully
registered or qualified the securities in the State of Texas or another state.
In order to insure that there will be no trading of the Company's securities
unless and until the securities have been successfully registered or qualified
in the State of Texas or another state, each Selling Shareholder has entered
into a written lock-up agreement, for the benefit of the Company, whereby the
Selling Shareholder will not offer to sell, assign, pledge, hypothecate, grant
any option for the sale of, or otherwise dispose of, directly or indirectly, any
shares of Common Stock of the Company owned by the respective Selling
Shareholder, or subsequently acquired through the exercise of any options,
warrants or rights, or conversion of any other security, or by reason of any
stock split or other distribution of stock, or grant options, rights or warrants
with respect to any such shares of Common Stock, unless and until the Company
successfully registers or qualifies the securities in the State of Texas or
another state. Furthermore, in furtherance of such lock-up agreement, each
Selling Shareholder has delivered all certificates evidencing all of the
respective Selling Shareholder's shares to the Law Office of Michael J.
Morrison, Esq., 1495 Ridgeview Drive, Suite 220, Reno, Nevada 89509 ("Trustee"),
to be held in trust until the securities are registered or qualified in the
State of Texas or another state, at which time the Trustee will notify each
Selling Shareholder in writing of such registration or qualification, their
eligibility to sell their respective securities and, concurrently, deliver the
certificates to the respective Selling Shareholders.
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.
12
The fixed price for the offer and sale of the shares shall be $.20 per share
until the shares of common stock become quoted on the OTC Bulletin Board or
other specified securities exchange.
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
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. The Company will pay the selling shareholder's expenses in this
offering, estimated to be $500.00. 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 and
Aldergrove, B.C. V4W 2R2 Director
13
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 field of medical diagnostic equipment. Mr. Bandenieks is a 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. In the last 5 years Mr. Bandenieks
has held the following positions:
(a) May 2002 - Present Western Canada Account Manager for Spectral
Diagnostics, Inc., Cardiac Markers Division
135 The West Mall, Toronto, Ontario, Canada
M9C 1C2
Spectral Diagnostics Inc. developes and commercializes diagnostic products,
designed to improve patient management in healthcare. It develops a wide range
of monoclonal and polyclonal antibodies, and recombinant proteins.
(b) January 2000 - June 2001 Sales Representative for Sigma-Aldrich
Canada Ltd., Diagnostics Division
2149 Winston Park Drive, Oakville, ON
Sigma-Aldrich is a Life Science and High Technology company. Its biochemical and
organic chemical products and kits are used in scientific and genomic research,
biotechnology, pharmaceutical development, the diagnosis of disease and chemical
manufacturing. Its customers are life science companies, university and
government institutions, hospitals, and in industry. Sigma-Aldrich operates in
34 countries and has 6,000 employees providing services worldwide.
(c) September 1999 - December 1999 Sales Representative for Randox Laboratories
Canada Ltd.
1021 Meyerside Drive, Unit 5, Mississauga,
ON
Randox Laboratories has approximately 550 employees worldwide in 23 direct
representative offices, Randox Laboratories Ltd. is a clinical diagnostic
company. Randox diagnostic kits are sold in over 128 countries around the world
encompassing over 30,000 instrument applications on over 100 different clinical
analysers. Randox kits are available in numerous sizes, formats and
methodologies offering maximum flexibility to meet customer requirements.
LEE SOUTHERN has been the Treasurer, CFO and a Director of the Company since
November 2000. Since January 1969 to present, he has been engaged as a
consultant in and has been involved in management consulting in the education
and political sectors in Canada. Since January 1995 to present, he has also
consulted for various education and political organizations. 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. Since July 1995 to present, Mr. Southern has
held a position of Executive Director of British Columbia School Trustee
Association.
(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.
(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 February 8, 2005. Each person will have sole voting and investment
power with respect to the shares shown.
14
SECURITY OWNERSHIP OF BENEFICIAL OWNERS
Shares
Beneficially Percentage
Title of Class Name of Owner Owned Ownership
Art Bandenieks
Common 2876 - 252 Street 30,453,000 81%
Aldergrove, B.C. V4W 2R2
All the shares listed above were acquired by Mr. Bandenieks in December 2000 and
are restricted pursuant to Rule 144.
SECURITY OWNERSHIP OF MANAGEMENT
Shares
Beneficially Percentage
Title of Class Name of Owner 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
significant influence over all matters requiring approval by our stockholders,
and 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 75,000,000 shares of common stock, with $0.001 par
value. As of February 8, 2005, there were 37,480,100 common shares issued and
outstanding. The Board of Directors has authority to issue the balance of
37,519,900 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
15
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
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 May 31,, 2004, 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. Amisano Hanson has reviewed our unaudited statements
for the period ended September 30, 2004.
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.
16
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. As All Printer
Supplies.com, the company sought a consulting opportunity for products and
supplies to be offered on the internet, but the economy at the time, due the
demise of many "dot com" companies and businesses, and the poor market
conditions, was never able to launch its business. 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 limited revenues. The Company has a fully developed
business plan, is operational and receiving revenue. The company has $150,944 in
expenses to date.
BV Pharmaceutical, Inc has limited start-up operations and is considered a
development stage Company. The Company was originally capitalized at
100,000,000shares of Common Stock, with no par value. On May 25, 2004 the
amended Articles of Incorporation were filed with the state of Nevada to
decrease the number of authorized capital stock to 75,000,000 common shares with
$0.001 par value. By reducing the number of shares and establishing a par values
for the shares, the Company's annual filing fee with the Nevada Secretary of
State was reduced. The amendment was a cost-saving measure only. The only impact
on the shareholders was a reduction of the total authorized shares. While this
reduced the shares available for issuance, it also limited the possible dilution
which could be suffered by the shareholders. The Company believes the amendment
had no material impact on the Company, its operations, proposed operations or
the rights of shareholders.
In an effort to develop our business, we will seek to establish strategic
business relationships with leading firms. We anticipate these strategic
relationships would involve the offering of our services to the members and
employees of the particular company on a discounted basis. We have not yet
established the amount of any such discount. Initially we intend to focus our
efforts on offering these services to companies in the Entertainment, Sports,
Biotech industries. We have not yet identified, contacted or establish any
relationships with any these companies.
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
We currently have a web site at the URL www.yourcloneguard.com. We have
registered a domain name, and have a hosting service for www.yourcloneguard.com.
Our Company and website provide information and services in the areas of
personal DNA collection, analysis, profiling, banking and DNA profile database
maintenance.
The website provides interested parties: services, information and resources
dealing with the collection, analysis, protection and banking of ones personal
and unique DNA profile. The website is fully operational, provides access to the
services discussed above, and allows interested parties to place orders. The
company's website is limited to the services discussed above. Through our
website, you will find information on such topics and issues as: DNA, DNA
Patterns or Profiles, DNA patents, DNA sample collection, confidentiality
aspects of DNA profile collection, DNA collection and banking suitability for
minors, DNA cloning, theft and protection issues. In addition you will find
links to other articles and resources of interest.
Through its website the Company offers access to services for personal DNA
collection, analysis, profiling, banking, and DNA profile database maintenance.
Currently the Company plans to offer two services. The first being an in home
self test DNA Profile Kit with banking (storage). The initial price for this
service is currently US$120. The second service, performed by a professional,
allows for the collection, analysis, profiling, banking, and DNA profile
database maintenance. This service will assist the client in establishing a
chain of custody. Through this service the Company will provide secure access to
a client's personal DNA profile, with documented chain of custody established,
should at some point in the future the need arise to provide evidence of prior
ownership. The initial price for this service is currently US $280.
IN HOME SELF TEST DNA PROFILE KIT AND BANKING.
The Kit will contain buccal sample swabs, sample collection technique indicator,
pre-paid return envelope, a collection seal, along with easy to follow step by
step directions to take a sample.
The sample process of collection is simple, fast, and non-intrusive. Collection
takes place by way of a home self-test kit, where a cotton swab (a buccal swab)
is gently wiped across the inside of the Client's cheek. The swab, which
contains your saliva and the DNA sample, is then labeled and mailed to the
Company for banking (storage). The test process and results would not be
considered suitable for use in a court of law. A certificate with the owner's
name, reference and identification number and other information will be mailed
back to the client.
17
The reasons for the use of the in home self test DNA Profile Kit and banking
service would include the following: 1) storage of a person's DNA; 2) peace of
mind; 3) permanent identifier of family member's DNA; 4) a tool for
identification of missing persons; 5) a genetic history of an elder family
member that may provide clues to inherited diseases; and 6) other genetic
issues.
CHAIN OF CUSTODY DNA PROFILING AND BANKING
Upon receipt of the client's registration for the service, the Company will set
up a DNA sample collection appointment at a hospital, laboratory or clinic near
the client. At the time of collection, the client will be required to provide
identification in the form of birth certificate, social security card or drivers
license. A DNA sample will be collected by way of a buccal cheek swab and the
client will be fingerprinted and photographed. The sample will be labeled,
securely stored and then sent to an independent third party testing facility
where it will be analyzed and a DNA profile will be determined, thereby
establishing the DNA pattern in a format recognized by the international
scientific and legal communities. We currently intend to use Orchid Helix's
testing facilities to perform these services. We have no agreement with Orchid
Helix. This collection and testing procedure establishes a date and time of
submission as evidence of prior ownership. The sample will be sealed and, along
with the results, will be stored for a period of 20 years. The results will be
cross checked with our database for fraud and duplicate submissions and then
added to our database. The Company will provide the client with a DNA Profile
Bank Certificate outlining the results of the client's personal, unique and
original DNA profile.
Results from home DNA tests are normally not guaranteed admissible in a court of
law due to the lack of the "chain of custody". The chain of custody refers to
the legal requirements necessary to establish and document the various persons
and methods used to handle and process the individual sample. A legally
admissible "chain of custody" for a sample requires the samples to be collected
in the presence of a third neutral party at a lab or hospital facility where all
parties are photographed to verify their identity.
The reasons for the use of the Chain Of Custody DNA Profiling and Banking
service would include the following; 1) Use as evidence of DNA theft or
misappropriation; 2) Proof of prior ownership; 3) Maternity or paternity cases;
or 4) Forensic cases.
We estimate the entire DNA Process for either of the services will take
approximately four to eight weeks from the time of DNA sample collection.
These services will be charged by debit or credit card or purchased by cashier's
check or money order.
The instructions and examples on our website are intended to allow potential
consumers to quickly begin the DNA collection and profiling process for
establishing their personal and unique DNA profile.
We plan to process most orders online by online credit card or cybercash
systems. We currently are developing the ability to process online orders. In
addition we have researched the needs of our planned website functions and the
fees associated with the services needed to fulfill those needs.
Our website content will consist of information relating to the biotech
industry, in particular content dealing with cloning and its related ethical
issues. More expansive information may be developed in the future.
DNA CLONING
We believe the cloning issue is confusing and fraught with ethical concerns. We
plan to provide information to help simplify the issue and provide more
expansive information to familiarize persons concerned about the cloning issue
and protecting their personal DNA against cloning. The process of DNA
collection, analysis and profiling can be an invasive, frightening and confusing
process for many. We believe we can familiarize the potential client with the
required steps and the need for the Company's DNA profile and banking service
We believe it is extremely difficult to prevent a determined collector from
obtaining samples of DNA, since all complex living creatures constantly leave
traces of DNA throughout their environment in the form of hair, skin, saliva,
etc. However, we believe you can help deter persons who have illegally obtained
a sample of your DNA from trafficking in these samples, or in pursuing illegal
activities, such as cloning of the samples, by establishing your personal DNA
profile to show prior ownership.
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. We
plan to establish our market through email advertising and through licensing the
service to third parties on a geographic basis; that is, we will grant licenses
to persons or business entities to offer our services in certain, specific
geographic areas, such as , the Province of Alberta, Canada or the State of
Texas. We have not yet established any specific geographic areas, and intend to
do so only when we have a third party interested in obtaining a license for a
specific area. We do not currently have any licenses or licensees, and have not
been in contact with or negotiated with anyone for any such license. We have not
conducted any market testing to determine the size of the market for our
services.
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. The agreement with Mr. Sutton has terminated
18
and will not be renewed. Mr. Sutton made no sales of the Company's services. The
license for Mr. Sutton was not renewed because he decided to pursue other
business interest. We do not believe this lack of renewal will have any material
impact on the Company. As of August 31, 2004 the Company has received ten (10)
orders, and sold and received full payment for ten 910) of its In Home Self Test
Kit. The most recent sale date for an In Home Self Test Kit was July 14, 2004.
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.
COMPETITIVE BUSINESS CONDITIONS
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 testing,
profiling and banking business are any business in the pharmaceutical business
or distribution of pharmaceutical products business. Some of the primary DNA
service and information providers and competitors are: DNA Testing Centre, Inc.
- - www.dnatestingcentre.com, GeneTree DNA Testing Center - www.genetree.com,
Metaphase Genetics - www.metaphasegenetics.com, and Genex Diagnostics SwabTest -
www.swabtest.com, and DNA Diagnostic Center - 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 to a point where they can make an
informed decision if the services offered are appropriate for them.
Within the industry, 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
collection, profiling, 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 will be successful in
differentiating ourselves from our competitors, or that we will be successful in
providing acceptable services or competing in the marketplace for our services.
We will be using the internet to advertise our services, by paying other
websites to place a link to our website on their website. We anticipate the cost
of this form of advertising will cost approximately $2,000 over the nest 12
months.
By offering a specialized DNA storage and information service, we will be
targeting those consumers who are looking to establish their DNA profile and
banking of that profile. 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 make an informed decision if the DNA testing and
profiling services offered are appropriate for them.
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.
19
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 established initial contact with DNA
sample kit suppliers and DNA testing facilities. We have not entered into any
arrangement or agreements to date.
CUSTOMER BASE
As of the date of this prospectus, the Company has received ten orders,
amounting to $1200 in sales revenue, for its In Home Self Test Kit.. We have
received payment in full of the $1200. We do not anticipate we will depend on
one or a few major customers. There can be no assurance that this assumption is
correct.
Our intended principal market of customers is expected to be the people who are
aware of the problem with identity theft, those with concerns about the health
and health risk factors of their relatives and unborn children and those wishing
to preserve their DNA profile in a data bank for future uses. We intend to
target this market using internet advertising and promotion of our website
through links on other health- related websites, which we currently anticipate
will cost us approximately $2,000 over the next 12 months. Although we cannot
clearly determine or identify those who may see our marketing efforts or seek
our services, we believe that persons visiting these websites could be included
in our target market.. We do not feel that the costs to advertise and market
through the internet is a barrier to our entry. We have not performed any
marketing studies to assess whether a potential market exists for our proposed
services, but we believe that there is such a market based on the existence of
other web-based data banks and the number of articles about DNA storage and
identity theft management has seen in the media. We do not intend to perform any
marketing studies prior to beginning operations. Based on the costs of similar
services, we believe we can sustain a market for our services.
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. Based on our research,
we do not believe the products and services we intend to offer require approval
from the Food and Drug Administration. 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 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.
MARKETING RESEARCH AND DEVELOPMENT
To date, we have spent $10,000 on marketing research and development of our
website.
20
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,"
"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. The Company has raised the total of
$99,975 through Private Placements (see page 32 "Recent Sales of Unregistered
Securities") and in January of 2004 the Company issued two convertible
debentures in the principal amount of $25,000 each, at an interest rate of 10%
per annum, for a total principal amount of $50,000 to two separate unrelated
non-US parties. We anticipate, but have no assurance, that we may need to 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.
The Company's website will be used as a marketing and sales tool. It is intended
to outline the features and the benefits of the DNA collection and profile
service as well as acting as an information resource. The instructions and
examples on our website are intended to allow potential consumers to quickly
begin the DNA collection and profiling process for establishing their personal
and unique DNA profile.
We anticipate that most orders for our services will occur by online credit card
or cybercash systems. We can take orders online through our order form and are
currently developing the ability to process online orders.
Over the next twelve months, we plan to further develop our website
www.yourcloneguard.com to provide additional 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. DNA information and services
We may require additional funds to further develop our website after September
2005. 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 could be adversely
affected. To sustain operations over the next 12 months "through September 2005"
21
we are anticipating total operational expense of $14,500 made up as follows,
$500 for selling shareholder's expenses, $2000 internet advertising and
promotion, and $12,000 for marketing and operational expenses.
In the end of the nine-month period ended September 30, 2004 the Company had
available cash in the amount of $26,303 and accounts receivables in the amount
of $7,000. Subsequent to the period ended September 30, 2004, the Company
received payment on the accounts receivable in the amount of $5,000 which raised
its available cash to $31,303 and reduced the accounts receivable to $2,000.
This cash will be used to fund operations until approximately end of September
2005. During the period prior to September 2005, the Company may, nevertheless,
need to seek additional funding in the form of equity or debt to meet
unanticipated expenses.
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.
Our website is fully developed, operational and is producing revenue. The total
cost for developing our website was $2,157. We anticipate we will generate
revenues from the accumulation of customer's DNA information and data, in a
legal state, to the website, and through the sale of advertisements. There is no
assurance that we will be successful in the marketing our DNA profile services
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.
The Company believes that existing facilities are adequate for its needs through
September 2005. Should the Company require additional space at that time, or
prior thereto, the Company will attempt to secure space can 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.
Our management and certain investors have made $149,975 of capital contributions
to our business The Company has raised the total of $99,975 through Private
Placements (see page 32, heading "Recent Sales of Unregistered Securities), and
in January 2004, 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
22
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.
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 February 8, 2005, there were approximately 54 holders on record of our
common stock.
EXECUTIVE COMPENSATION
No executive compensation has been paid since our inception.
23
FINANCIAL STATEMENTS
BV PHARMACEUTICAL, INC.
(A Development Stage Company)
INTERIM FINANCIAL STATEMENTS
September 30, 2004, December 31, 2003 and 2002
(Stated in US Dollars)
(UNAUDITED)
24
TERRY AMISANO LTD. AMISANO HANSON
KEVIN HANSON, CA CHARTERED ACCOUNTANTS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders,
BV Pharmaceutical, Inc.
We have reviewed the accompanying interim balance sheet of BV Pharmaceutical,
Inc. as of September 30, 2004, and the interim statements of operations, cash
flows and stockholders' deficiency for the nine-months then ended. These
financial statements are the responsibility of the Company's management.
We conducted our review in accordance with the standards of the Public Company
Accounting Oversight Board (United States of America). A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with the standards of the Public Company Accounting Oversight Board,
the objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying interim financial statements for them to be in
conformity with United States of America generally accepted accounting
principles.
Vancouver, Canada "AMISANO HANSON"
October 26, 2004 CHARTERED ACCOUNTANTS
750 West Pender Street, Suite 604 Telephone: 604-689-0188
Vancouver Canada Facsimile: 604-689-9773
V6C 2T7 E-MAIL: amishan@telus.net
BV PHARMACEUTICAL, INC.
(A Development Stage Company)
INTERIM BALANCE SHEETS
September 30, 2004, December 31, 2003 and 2002
(Stated in US Dollars)
(UNAUDITED)
September 30, December 31, December 31,
2004 2003 2002
---- ---- ----
ASSETS
Current
Cash and cash equivalents $ 26,303 $ 3,708 $ -
Accounts receivable 7,000 - -
---------------- ---------------- ----------------
$ 33,303 $ 3,708 $ -
================ ================ ================
LIABILITIES
Current
Accounts payable and accrued liabilities $ 5,520 $ 3,600 $ -
Convertible debentures - Note 3 53,538 - -
---------------- ---------------- ---------------
59,058 3,600 -
---------------- ---------------- ---------------
STOCKHOLDERS' EQUITY (DEFICIENCY)
Capital stock - Notes 3 and 4
Authorized: 75,000,000 common stock, $0.001 par value
Issued: 37,480,100 shares (December 31,
2003 and 2002: 37,480,100) 37,480 37,480 37,480
Additional paid-in capital 62,495 62,495 62,495
Deficit accumulated during the development stage (125,730) (99,867) (99,975)
---------------- ---------------- ----------------
(25,755) 108 -
---------------- ---------------- ----------------
$ 33,303 $ 3,708 $ -
================ ================ ================
SEE ACCOMPANYING NOTES
25
BV PHARMACEUTICAL, INC.
(A Development Stage Company)
INTERIM STATEMENTS OF OPERATIONS
for the nine-month period ended September 30, 2004,
for the years ended December 31, 2003, 2002, 2001,
and for the period from June 30, 2000 (Date of Incorporation) to September 30, 2004
(Stated in US Dollars)
(UNAUDITED)
June 30, 2000
(Date of
Nine-month Incorporation)
period ended to
September 30, Years ended December 31, September 30,
------------------------------------------------
2004 2003 2002 2001 2004
---- ---- ---- ---- ----
Revenue
License fees $ 14,000 $ 10,000 $ - $ - $ 24,000
DNA test income 1,200 - - - 1,200
Interest income 14 - - - 14
----------------- ------------- -------------- --------------- ------------------
15,214 10,000 - - 25,214
----------------- ------------- -------------- --------------- ------------------
Administrative Expenses
Advertising and promotion - - 1,001 - 1,001
Consulting 9,400 3,000 17,897 17,775 48,072
Filing fees 3,618 325 - - 3,943
Interest and bank charges 3,724 - - - 3,724
Investor relations - - 9,996 - 9,996
Office and miscellaneous 4,287 911 691 500 6,389
Professional fees 8,998 5,577 - 883 15,458
Rent - - 505 - 505
Marketing research and development 10,000 - - - 10,000
Intellectual property acquisition
costs - - - 50,000 50,000
Website maintenance 1,050 79 - 727 1,856
----------------- ------------- -------------- --------------- ------------------
41,077 9,892 30,090 69,885 150,944
----------------- ------------- -------------- --------------- ------------------
Net income (loss) for the period $ (25,863)$ 108 $ (30,090) $ (69,885) $ (125,730)
================= ============= ============== =============== ==================
Basic income (loss) per share $ (0.00) $ 0.00 $ (0.00) $ (0.00)
================ ============= ============= =================
Weighted average number of
shares outstanding 37,480,100 37,480,100 37,431,771 37,009,386
================ ============= ============== ===============
SEE ACCOMPANYING NOTES
26
BV PHARMACEUTICAL, INC.
(A Development Stage Company)
INTERIM STATEMENTS OF CASH FLOWS
for the nine-month period ended September 30, 2004,
for the years ended December 31, 2003, 2002, 2001,
and for the period from June 30, 2000 (Date of Incorporation) to September 30, 2004
(Stated in US Dollars)
(UNAUDITED)
June 30, 2000
(Date of
Nine-month Incorporation)
period ended to
September 30, Years ended December 31, September 30,
-----------------------------------------------
2004 2003 2002 2001 2004
---- ---- ---- ---- ----
Cash flows from (used in) Operating
activities
Net income (loss) for the period $ (25,863) $ 108 $ (30,090) $ (69,885) $ (125,730)
Changes in non-cash working capital
balances related to operations:
Accounts receivable (7,000) - - - (7,000)
Accounts payable and accrued
liabilities 1,920 3,600 - - 5,520
---------------- ------------- -------------- --------------- ------------------
(30,943) 3,708 (30,090) (69,885) (127,210)
---------------- ------------- ------------- -------------- ------------------
Cash flows from Financing Activities
Capital stock issued - - 24,000 75,771 99,975
Convertible debentures 53,538 - - - 53,538
---------------- ------------- -------------- --------------- ------------------
53,538 - 24,000 75,771 153,513
---------------- ------------- -------------- --------------- ------------------
Increase (decrease) in cash 22,595 3,708 (6,090) 5,886 26,303
Cash and cash equivalents, beginning
of the period 3,708 - 6,090 204 -
---------------- ------------- -------------- --------------- ------------------
Cash and cash equivalents, end of the
period $ 26,303 $ 3,708 $ - $ 6,090 $ 26,303
================ ============= ============== =============== ==================
Cash and cash equivalents consist of:
Cash $ 1,303 $ 3,708 $ - $ - $ 1,303
Term deposit 25,000 - - - 25,000
---------------- ------------- -------------- --------------- ------------------
$ 26,303 $ 3,708 $ - $ - $ 26,303
================ ============= ============== =============== ==================
Supplemental disclosure of cash flow
information
Cash paid for:
Interest $ - $ - $ - $ - $ -
================ ============= ============== =============== ==================
Income taxes $ - $ - $ - $ - $ -
================ ============= ============== =============== ==================
SEE ACCOMPANYING NOTES
27
BV PHARMACEUTICAL, INC.
(A Development Stage Company)
INTERIM STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIENCY)
for the period June 30, 2000 (Date of Incorporation) to September 30, 2004
(Stated in US Dollars)
(UNAUDITED)
DEFICIT
ACCUMULATED
ADDITIONAL DURING THE
COMMON STOCK PAID-IN DEVELOPMENT
* SHARES PAR VALUE CAPITAL STAGE TOTAL
------- --------- ------- ----- -----
Capital stock subscribed pursuant to an offering
memorandum for cash - at $0.000007 30,543,000 $ 30,543 $ (30,339) $ - $ 204
------------- -------------- ------------- -------------- ----------------
Balance, December 31, 2000 30,543,000 30,543 (30,339) - 204
Capital stock issued pursuant to a private
placement - at $0.01 6,777,100 6,777 60,994 - 67,771
- at $0.20 40,000 40 7,960 - 8,000
Net loss for the year - - - (69,885) (69,885)
------------- -------------- ------------- ------------- ----------------
Balance, December 31, 2001 37,360,100 37,360 38,615 (69,885) 6,090
Capital stock issued pursuant to a private
placement - at $0.20 120,000 120 23,880 - 24,000
Net loss for the year - - - (30,090) (30,090)
------------- -------------- ------------- ------------- ----------------
Balance, December 31, 2002 37,480,100 37,480 62,495 (99,975) -
Net income for the year - - - 108 108
------------- -------------- ------------- -------------- ----------------
Balance, December 31, 2003 37,480,100 37,480 62,495 (99,867) 108
Net loss for the period - - - (25,863) (25,863)
------------- -------------- ------------- ------------- ----------------
Balance, September 30, 2004 37,480,100 $ 37,480 $ 62,495 $ (125,730) $ (25,755)
============= ============== ============= ============== ================
The common stock issued has been retroactively restated to reflect a forward
stock split of 1,500 new shares for one old share, effective on January 5, 2001.
SEE ACCOMPANYING NOTES
28
BV PHARMACEUTICAL, INC.
(A Development Stage Company)
NOTES TO THE INTERIM FINANCIAL STATEMENTS
September 30, 2004, December 31, 2003 and 2002
(Stated in US Dollars)
(UNAUDITED)
Note 1 INTERIM REPORTING
The accompanying unaudited interim financial statements have been
prepared by BV Pharmaceuticals, Inc. (the "Company") pursuant to
the rules and regulations of the United States Securities and
Exchange Commission. Certain information and disclosures normally
included in annual financial statements prepared in accordance
with accounting principles generally accepted in the United States
of America have been condensed or omitted pursuant to such rules
and regulations. In the opinion of management, all adjustments and
disclosures necessary for a fair presentation of these financial
statements have been included. Such adjustments consist of normal
recurring adjustments. These interim financial statements should
be read in conjunction with the audited financial statements of
the Company for the fiscal year ended December 31, 2003.
The results of operations for the nine months ended September 30,
2004 are not indicative of the results that may be expected for
the full year.
Note 2 CONTINUANCE OF OPERATIONS
The interim financial statements have been prepared using
generally accepted accounting principles in the United States of
America applicable for a going concern which assumes that the
Company will realize its assets and discharge its liabilities in
the ordinary course of business. At September 30, 2004, the
Company has a working capital deficiency of $25,755 and has
accumulated losses of $125,730 since its commencement. Its ability
to continue as a going concern is dependent upon the ability of
the Company to obtain the necessary financing to meet its
obligations and pay its liabilities arising from normal business
operations when they come due.
Note 3 CONVERTIBLE DEBENTURES
September 30, December 31,
2004 2003 2002
---- ---- ----
On January 15, 2004 the Company issued two
convertible debentures in the principal amount of
$25,000 each bearing interest at 10% per annum and
secured by the general credit of the Company.
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, up to January 15, 2006. Interest shall be
payable at the end of each calendar year with the
first payment due on December 31, 2007, in either
cash or common shares at the option of the
holder. If the interest is paid in shares, then
the shares will have a deemed value of $2.50 each.
$ 53,538 $ - $ -
------------- ------------- -------------
$ 53,538 $ - $ -
============= ============= =============
29
BV PHARMACEUTICAL, INC.
(A Development Stage Company)
Notes to the Interim Financial Statements
September 30, 2004, December 31, 2003 and 2002
(Stated in US Dollars) - Page 3
(UNAUDITED)
Note 4 CAPITAL STOCK - Note 3
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.
On May 25, 2004, the Company amended its authorized capital stock
to 75,000,000 common shares with a par value of $0.001 per share.
The number of authorized shares and the par value per share as
referred to in these financial statements has been restated
wherever applicable to give retroactive effect to this amendment.
30
BV PHARMACEUTICAL, INC.
(A Development Stage Company)
REPORT AND FINANCIAL STATEMENTS
May 31, 2004, December 31, 2003 and 2002
(Stated in US Dollars)
31
AMISANO HANSON
CHARTERED ACCOUNTANTS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders,
BV Pharmaceutical, Inc.
(A Development Stage Company)
We have audited the accompanying balance sheets of BV Pharmaceutical, Inc. (A
Development Stage Company) as of May 31, 2004 and December 31, 2003 and 2002 and
the statements of operations, stockholders' deficit and cash flows for the
five-month period ended May 31, 2004 and each of the years in the three year
period ended December 31, 2003 and for the period June 30, 2000 (Date of
Incorporation) to May 31, 2004. 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 the standards of the Public Company
Accounting Oversight Board (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
May 31, 2004 and December 31, 2003 and 2002 and the results of its operations
and its cash flows for the five-month period ended May 31, 2004 and each of the
years in the three year period ended December 31, 2003 and for the period June
30, 2000 (Date of Incorporation) to May 31, 2004, 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 /s/ AMISANO HANSON
June 8, 2004 CHARTERED ACCOUNTANTS
750 West Pender Street, Suite 604 Telephone: 604-689-0188
Vancouver Canada Facsimile: 604-689-9773
V6C 2T7 E-MAIL: amishan@telus.net
32
BV PHARMACEUTICAL, INC.
(A Development Stage Company)
BALANCE SHEETS
May 31, 2004, December 31, 2003 and 2002
(Stated in US Dollars)
May 31, December 31, December 31,
2004 2003 2002
_________ ____________ ____________
ASSETS
Current
Cash and cash equivalents $ 51,332 $ 3,708 $ -
Accounts receivable 3,000 - -
_________ ________ ________
$ 54,332 $ 3,708 $ -
LIABILITIES
Current
Accounts payable and accrued liabilities $ 4,985 $ 3,600 $ -
Convertible debentures - Note 3 51,872 - -
_________ ________ ________
56,857 3,600 -
STOCKHOLDERS' EQUITY (DEFICIENCY)
Capital stock - Notes 3 and 4
Authorized: 75,000,000 common stock, $0.001 par value
Issued: 37,480,100 shares (December 31,
2003 and 2002: 37,480,100) 37,480 37,480 37,480
Additional paid-in capital 62,495 62,495 62,495
Deficit accumulated during the development stage (102,500) (99,867) (99,975)
_________ ________ ________
(2,525) 108 -
_________ ________ ________
$ 54,332 $ 3,708 $ -
========= ======== ========
Nature and Continuance of Operations - Note 1
SEE ACCOMPANYING NOTES
33
BV PHARMACEUTICAL, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
for the five-month period ended May 31, 2004,
for the years ended December 31, 2003, 2002, 2001,
and for the period from June 30, 2000 (Date of Incorporation) to May 31, 2004
(Stated in US Dollars)
June 30, 2000
(Date of
Five-month Incorpor-
period ended ation) to
May 31, 2004 2003 2002 2001 May 31, 2004
____________ ___________ ___________ ___________ ____________
Revenue
License fees $ 10,000 $ 10,000 $ - $ - $ 20,000
___________ ___________ ___________ ___________ _________
Administrative Expenses
Advertising and promotion - - 1,001 - 1,001
Consulting 3,500 3,000 17,897 17,775 42,172
Filing fees 2,047 325 - - 2,372
Interest charges and ban charges 1,991 - - - 1,991
Investor relations - - 9,996 - 9,996
Office and miscellaneous 860 911 691 500 2,962
Professional fees 3,885 5,577 - 883 10,345
Rent - - 505 - 505
Intellectual property acquisition
costs - Note 7 - - - 50,000 50,000
Website maintenance 350 79 - 727 1,156
___________ ___________ ___________ ___________ _________
12,633 9,892 30,090 69,885 122,500
___________ ___________ ___________ ___________ _________
Net income (loss) for the period $ (2,633) $ 108 $ (30,090) $ (69,885) $(102,500)
=========== =========== =========== =========== =========
Basic income (loss) per share $ (0.00) $ 0.00 $ (0.00) $ (0.00)
=========== =========== =========== ===========
Weighted average number of
shares outstanding 37,480,100 37,480,100 37,431,771 37,009,386
=========== =========== =========== ===========
SEE ACCOMPANYING NOTES
34
BV PHARMACEUTICAL, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
for the five-month period ended May 31, 2004,
and for the years ended December 31, 2003, 2002, 2001,
and for the period from June 30, 2000 (Date of Incorporation) to May 31, 2004
(Stated in US Dollars)
June 30, 2000
(Date of
Five-month Incorpor-
period ended ation) to
May 31, 2004 2003 2002 2001 May 31, 2004
____________ ___________ ___________ ___________ ____________
Cash flows from (used in)
Operating
Activities
Net income (loss) for the period $ (2,633) $ 108 $ (30,090) $ (69,885) $(102,500)
Change in non-cash working
capital balance related to
operations:
Accounts receivable (3,000) - - - (3,000)
Accounts payable and accrued
liabilities 1,385 3,600 - - 4,985
___________ ___________ ___________ __________ _________
(4,248) 3,708 (30,090) (69,885) (100,515)
___________ ___________ ___________ __________ _________
Cash flows from Financing
Activities
Capital stock issued - - 24,000 75,771 99,975
Convertible debentures 51,872 - - - 51,872
___________ ___________ ___________ __________ _________
51,872 - 24,000 75,771 151,847
___________ ___________ ___________ __________ _________
Increase (decrease) in cash 47,624 3,708 (6,090) 5,886 51,332
Cash and cash equivalents,
beginning
of the period 3,708 - 6,090 204 -
___________ ___________ ___________ __________ _________
Cash and cash equivalents, end of
the period $ 51,332 $ 3,708 $ - $ 6,090 $ 51,332
=========== =========== =========== ========== =========
Cash and cash equivalents consist of:
Cash $ 1,332 $ 3,708 $ - $ - $ 1,332
Term deposit 50,000 - - - 50,000
=========== =========== =========== ========== =========
$ 51,332 $ 3,708 $ - $ - $ 51,332
=========== =========== =========== ========== =========
Supplemental disclosure of cash flow
information
Cash paid for:
Interest $ - $ - $ - $ - $ -
=========== =========== =========== ========== =========
Income taxes $ - $ - $ - $ - $ -
=========== =========== =========== ========== =========
SEE ACCOMPANYING NOTES
35
BV PHARMACEUTICAL, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' DEFICIT
for the period June 30, 2000 (Date of Incorporation) to May 31, 2004
(Stated in US Dollars)
Deficit
Accumulated
Additional During the
Common Stock Paid-in Development
* Shares Par Value Capital Stage Total
__________ _________ __________ ___________ ________
Capital stock subscribed pursuant to an
offering memorandum for cash - at $0.000007 30,543,000 $ 30,543 $ (30,339) $ - $ 204
__________ ________ _________ _________ ________
Balance, December 31, 2000 30,543,000 30,543 (30,339) - 204
Capital stock issued pursuant to a private
placement - at $0.01 6,777,100 6,777 60,994 - 67,771
- at $0.20 40,000 40 7,960 - 8,000
Net loss for the year - - - (69,885) (69,885)
__________ ________ _________ _________ ________
Balance, December 31, 2001 37,360,100 37,360 38,615 (69,885) 6,090
Capital stock issued pursuant to a private
placement - at $0.20 120,000 120 23,880 - 24,000
Net loss for the year - - - (30,090) (30,090)
__________ ________ _________ _________ ________
Balance, December 31, 2002 37,480,100 37,480 62,495 (99,975) -
Net income for the year - - - 108 108
__________ ________ _________ _________ ________
Balance, December 31, 2003 37,480,100 37,480 62,495 (99,867) 108
Net loss for the period - - - (2,633) (2,633)
__________ ________ _________ _________ ________
Balance, May 31, 2004 37,480,100 $ 37,480 $ 62,495 $(102,500) $ (2,525)
========== ======== ========= ========= ========
The common stock issued has been retroactively restated to reflect a forward
stock split of 1,500 new shares for one old share, effective on January 5, 2001.
SEE ACCOMPANYING NOTES
36
BV PHARMACEUTICAL, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
May 31, 2004, 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 its name to BV Pharmaceutical, Inc.
BV Pharmaceutical, Inc. is a DNA Profile Bank whose core business
is to provide interested parties: services, information and
resources dealing with the collection, analysis, protection and
banking of ones personal and unique DNA profile.
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. At May 31, 2004, the Company has a working capital
deficiency of $2,525, and has accumulated a deficit of $102,500
since inception. 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. The Company may also
solicit loans from other non-affiliated individuals, however,
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
judgement. 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 May 31, 2004.
37
CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of all highly liquid investments
that are readily convertible to cash and have maturities of three
months or less when purchased.
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 cash equivalents, accounts receivable,
accounts payable and accrued liabilities and convertible debenture
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.
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
The Company has three sources of revenue: product sales, services
fees and licensing fees. Revenue is recognize when the products
are shipped. Services fees are recognized when the services are
rendered. Licensing fees are recognized on a monthly basis over
the term of the agreement. In addition, ultimate collection of
receivables must be 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.
38
NOTE 3 CONVERTIBLE DEBENTURES
May 31, December 31,
2004 2003 2002
_______ ____ ____
On January 15, 2004 the Company issued
two convertible debentures in the principal
amount of $25,000 each bearing interest at
10% per annum and secured by the general
credit of the Company. 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, up to January 15, 2006.
Interest shall be payable at the end of each
calendar year with the first payment due on
December 31, 2007, in either cash or
common shares at the option of the holder.
If the interest is paid in shares, then the
shares will have a deemed value of $2.50 each. $51,872 $ - $ -
_______ ____ ___
$51,872 $ - $ -
======= ==== ===
NOTE 4 CAPITAL STOCK - Note 3
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.
On May 25, 2004, the Company amended its authorized capital stock
to 75,000,000 common shares with a par value of $0.001 per share.
The number of authorized shares and the par value per share as
referred to in these financial statements has been restated
wherever applicable to give retroactive effect to this amendment.
NOTE 5 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:
December 31,
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.
39
NOTE 6 INCOME TAXES
No provision for income taxes has been provided in these financial
statements due to the net loss. At December 31, 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 7 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.
40
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. The Company
is paying all of the offering expenses, including expenses in connection with
the registration of the securities of the Selling Shareholders, all as set forth
below. Selling Security Holders will pay no expenses in connection with this
offering. At this date the full $10,000 set forth below has been paid.
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
RECENT SALES OF UNREGISTERED SECURITIES
From June 2000 through February 8, 2005, 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, as that term is defined in
Regulation D, Rule 501 (by virtue of his status as a founder and director of the
company), for $203.62 cash and compensation for his services as an officer and
director of the company. The issuance was made in reliance of Rule 506 under
Regulation D and/or under Section 4(2) of the Securities Act of 1933, as
amended, as a private transaction, not involving a public offering. These
securities were sold directly by the Company. The offerings were conducted
without engaging in any advertising or general solicitation of any kind and
without payment of underwriting discounts or commissions to any person.
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
41
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. The issuance
was made in reliance of Rule 506 under Regulation D and/or under Section 4(2) of
the Securities Act of 1933, as amended, as a private transaction, not involving
a public offering. These securities were sold directly by the Company. The
offerings were conducted without engaging in any advertising or general
solicitation of any kind and without payment of underwriting discounts or
commissions to any person. This investor was an "accredited" investor, as that
term is defined in Regulation D, Rule 501.
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.
In January 2004, 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.
42
EXHIBITS
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
3.1 Articles of Incorporation (Filed with SB-2)
3.2 Amendment to Articles of Incorporation (Filed with SB-2)
3.3 Bylaws (Filed with SB-2)
3.4 Amendment to Articles of Incorporation (Filed with SB-2/A #1)
4 Instrument Defining the Right of Holders - Share Certificate
(Filed with SB-2)
5 Legal Opinion
10.1 License Agreement (Filed with SB-2/A #1)
10.2 Convertible Debenture - EH& P Investments (Filed with SB-2/A #1)
10.3 Convertible Debenture - DGM Bank (Filed with SB-2/A #1)
15 Expert's Awareness Letter
23 Consents of Experts
99 Selling Security Holders' Lock-Up Agreements
UNDERTAKINGS
Information pertaining to our common stock is contained in our Articles of
Incorporation and Bylaws. Insofar as indemnification for liabilities arising
under the Securities Act of 1933 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 such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such 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 such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of our counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by us is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes to:
1. File, during any period in which we offer or sell securities, a
post-effective amendment to this registration statement to:
i. Include any prospectus required by section 10(a)(3) of the
Securities Act;
ii. Reflect in the prospectus any facts or events which, individually
or together, represent a fundamental change in the information in
the registration statement; and notwithstanding the forgoing, any
increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end
of the estimated maximum offering range may be reflected in the
form of prospects filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in the volume and price
represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement.
iii. Include any additional or changed material information on the
plan of distribution.
2. For determining liability under the Securities Act, 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 bona fide offering.
3. File a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the offering.
43
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, Amendment No. 6, and authorized this
registration statement to be signed on its behalf by the undersigned, in
Aldergrove, B.C., on this 8th day of February, 2005.
BV PHARMACEUTICAL, INC.
BY: /s/ ART BANDENIEKS
_____________________________
Art Bandenieks, President
Date: February 8, 2005
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
Director Financial Officer &
Director
Date: February 8, 2005 Date: February 8, 2005
44