U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
(MARK ONE)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of Securities Exchange
Act of 1934
For the quarterly period ended SEPTEMBER 30, 2003
[ ] Transition report under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the transition period from _______ to _______.
Commission File No. 000-31889
BIO-ONE CORPORATION
(Name of Small Business Issuer in Its Charter)
NEVADA 65-0815746
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(State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification No.)
1630 WINTER SPRINGS BOULEVARD, WINTER SPRINGS, FLORIDA 32708
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(Address of Principal Executive Offices) (Zip Code)
(407) 977-1005
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(Issuer's Telephone Number, Including Area Code)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months, and (2) has
been subject to such filing requirements for the past 90 days. Yes [X] No [ ]
There were 44,553,996 shares of Common Stock outstanding as of November
7, 2003.
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BIO-ONE CORPORATION
BALANCE SHEETS
ASSETS
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SEPTEMBER 30, DECEMBER 31,
2003 (UNAUDITED) 2002
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Current assets:
Cash and cash equivalents $352,702 14,742
Accounts receivable 35,739 --
Inventories 60,993 --
Prepaids and other current assets 31,389 --
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Total current assets 480,823 14,742
Property and equipment, at cost, net of accumulated
depreciation and amortization 23,113 4,099
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Total assets $503,936 18,841
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See accompanying notes to financial statements.
1
BIO-ONE CORPORATION
Balance Sheets
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
SEPTEMBER 30, DECEMBER 31,
2003 (UNAUDITED) 2002
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Current liabilities:
Accounts payable $ 11,764 124,596
Accrued expenses 52,375 111,375
Current installments of note payable 74,502 74,502
Shareholder loans 3,208 71,008
Other 110,295 --
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Total current liabilities 252,144 381,481
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Shareholders' equity:
Common stock - $.001 par value, authorized 100 million
shares; issued 44,238,915 and 18,854,695 shares 44,238 18,855
Additional paid in capital 3,066,551 1,786,377
Accumulated deficit (2,858,997) (2,167,872)
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Total shareholders' equity 251,792 (362,640)
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$ 503,936 18,841
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See accompanying notes to financial statements
2
BIO-ONE CORPORATION
STATEMENTS OF OPERATIONS
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
2003 2002 2003 2002
(UNAUDITED) UNAUDITED) (UNAUDITED) (UNAUDITED)
------------ ------------ ------------ ------------
Revenues:
Net sales $ 20,220 -- 20,220 22,220
------------ ------------ ------------ ------------
20,220 -- 20,220 22,220
Costs and expenses:
Cost of goods sold 6,904 -- 6,904 9,343
Selling, general and administrative 375,731 608,751 691,659 914,260
------------ ------------ ------------ ------------
382,635 608,751 698,563 923,603
------------ ------------ ------------ ------------
Operating income (loss) (362,415) (608,751) (678,343) (901,383)
Non-operating revenue (expense):
Other income -- -- -- 146,996
Interest expense (4,783) (852) (12,782) (2,602)
------------ ------------ ------------ ------------
Income before income taxes (367,198) (609,603) (691,125) (756,989)
Provision for income taxes -- -- -- --
------------ ------------ ------------ ------------
Net income $ (367,198) (609,603) (691,125) (756,989)
============ ============ ============ ============
Basic earnings per share $ (0.01) (0.04) (0.02) (0.06)
============ ============ ============ ============
Diluted earnings per share $ (0.01) (0.04) (0.02) (0.06)
============ ============ ============ ============
Weighted average number of shares outstanding 41,421,450 14,012,792 33,899,201 13,612,556
============ ============ ============ ============
See accompanying notes to financial statements.
3
BIO-ONE CORPORATION
STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED
SEPTEMBER 30,
2003 2002
(UNAUDITED) (UNAUDITED)
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Cash flows from operating activities:
Net loss $ (691,125) (756,989)
Adjustments to reconcile net income to net cash
provide by operating activities:
Depreciation and amortization 5,990 1,000
Common stock issued for services 27,300 494,630
Changes in operating assets and liabilities:
Accounts receivable (35,739) 1,672
Inventories (60,993) 15,153
Accounts payable and accrued expenses (171,832) 44,274
Other assets (31,389) 1,700
Other 110,295 --
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Net cash used in operating activities (847,493) (198,560)
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Cash flows from investing activities:
Purchase of property and equipment (25,004) --
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Net cash used in investing activities (25,004) --
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Cash flows from financing activities:
Purchase of treasury stock -- (1,750)
Proceeds from sale of common stock 1,278,257 240,000
Payment of principal on note payable -- --
Proceeds (repayments) from note payable (67,800) 71,008
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Net cash provided by financing activities 1,210,457 309,258
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Increase in cash and cash equivalents 337,960 110,698
Cash and cash equivalents - beginning of period 14,742 34,103
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Cash and cash equivalents - end of period $ 352,702 144,801
=========== ===========
See accompanying notes to financial statements.
4
BIO-ONE CORPORATION
(A Development Stage Company)
Notes to Condensed Consolidated Quarterly Financial Statements
September 30, 2003
(1) ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
(A) ORGANIZATION
------------
The accompanying condensed consolidated financial statements include the
accounts of Bio-One Corporation (Bio-One or the Company) and its wholly owned
subsidiary, Crown Enterprises, Inc. (Crown). All significant intercompany
balances and transactions have been eliminated in consolidation. Bio-One and
subsidiaries have a December 31 fiscal year end.
Bio-One Corporation was incorporated in the State of Nevada, with capital stock
of 20,000,000 shares at $ 0.001 par value, and 1,000,000 shares of preferred
stock at $0.001 per value. On July 26, 2000, Bio-One Corporation approved and
ratified an increase in the number of authorized shares of the Company's common
stock from 20,000,000 to 100,000,000. On the same date, the Company approved and
ratified an increase in the number of authorized shares of the Company's
preferred stock from 1,000,000 to 10,000,000.
Crown Enterprises, Inc. was incorporated under the laws of the State of Florida
on April 9, 1999. Crown had developed a complete line of naturopathic and
nutritional supplement products that could be recommended to address the
specific conditions identified by Crown's Microscopy "Live Blood Cell Analysis"
Program. Crown's "sell through" concept coupled with its Microscopy Program and
full line of naturopathic products placed Crown in the forefront of the
preventative and alternative healthcare industry.
On May 30, 2000, Crown agreed to exchange shares with Bio-One Corporation, a
Nevada company. Accordingly, Crown exchanged 10,000,000 shares of its stock for
10,000,000 shares of Bio-One stock in a business combination accounted for as a
reverse acquisition. During the period Bio-One was in existence, prior to the
reverse acquisition, its only activity was to raise equity capital. For
accounting purposes, the reverse acquisition is reflected as if Crown issued its
stock (10,000,000 shares) for the net assets of Bio-One. The net assets of
Bio-One were not adjusted in connection with the reverse acquisition since they
were monetary in nature.
In June 2002, Bio-One disposed of Crown's "Live Blood Cell Analysis" Program, by
purchasing the common stock of a former shareholder/director. The Company's
total focus is on vertically integrating manufacturing and marketing
acquisitions within the nutritional supplements industry.
(Continued)
5
BIO-ONE CORPORATION
Notes to Condensed Consolidated Quarterly Financial Statements
(1) ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)
(A) ORGANIZATION - (CONTINUED)
-------------------------
In July 2002, the Company signed an agreement with Cornell Capital Partners, LP
for a $10,000,000 Equity Line of Credit investment. Cornell Capital is a
domestic hedge fund, which makes investments in small-to-mid-sized publicly
traded companies. Under the Equity Line Agreement, Bio-One has the right, but
not the obligation to require Cornell Capital to purchase shares of Bio-One
common stock up to a maximum amount of $10,000,000 over a 24-month period
commencing September 3, 2002. There is no minimum draw down although Bio-One may
make draws, as provided below, during the term of the Equity Line. The purchase
price of the shares will be 100% of the lowest closing bid price of Bio-One
common stock during the six consecutive trading days immediately following
receipt of the Company's notice of its intent to make an Equity Line draw, which
notice may be withdrawn by the Company. Bio-One paid Cornell Capital a one-time
fee equal to $350,000, payable in 1,478,261 shares of restricted common stock.
Cornell Capital is entitled to retain 5% of each Equity Line advance.
In August 2002 the Company filed a SB-2 Registration Statement with the SEC and
registered 30,000,000 shares of common stock for the purpose of raising equity
capital. On September 3, 2002 the SEC declared the registration statement
effective.
In January 2003 Cornell Capital Partners, LP advanced $500,000 under the terms
of the Equity Line Agreement with the shares to be valued and issued in twelve
puts over a period of 125 days. The Company issued 5 million shares of common
stock in connection with this financing.
In January 2003 the Company signed a term sheet with Investors Corporation for a
$10,000,000 Term Loan Facility and a $5,000,000 Revolving Credit Facility. The
funds will be used for closing on a series of scheduled acquisitions.
Operations of the Company through the date of these financial statements have
been devoted primarily to identification and targeting of acquisition
candidates, raising capital and administrative activities.
The Company's revenues will be generated with vertically integrating
manufacturing and marketing acquisitions within the nutritional supplements
industry. The Company is prepared to launch its business plan upon completion of
its capitalization.
(Continued)
6
BIO-ONE CORPORATION
Notes to Condensed Consolidated Quarterly Financial Statements
(1) ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)
(B) REVENUE RECOGNITION
-------------------
The principal sources of revenues are derived from product sales. Revenue from
product sales is recognized when the product is shipped.
(C) INVENTORY
---------
Inventory consists of nutritional supplement products, which are valued at the
lower of cost or market on first-in, first-out basis.
(D) PROPERTY AND EQUIPMENT
----------------------
Property and equipment are stated at cost. Depreciation is computed over the
estimated useful lives of the assets using straight-line methods.
The Company reviews the carrying value of property and equipment for impairment
whenever events and circumstances indicate that the carrying value of an asset
may not be recoverable from the estimated future cash flows expected to result
from its use and eventual disposition. In cases where undiscounted expected
future cash flows are less than the carrying value, an impairment loss is
recognized equal to an amount by which the carrying value exceeds the fair value
of assets.
(E) USE OF ESTIMATES
----------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.
(F) FAIR VALUE OF FINANCIAL INSTRUMENTS
-----------------------------------
The carrying amount reported in the balance sheet for cash, accounts receivable
and accounts payable approximates fair values due to the immediate or short-term
maturity of these financial instruments. Fair value for notes payable was based
on interest rates that are currently available to the Company for issuance of
debt with similar terms and remaining maturities, and approximate carrying
value.
(Continued)
7
BIO-ONE CORPORATION
Notes to Condensed Consolidated Quarterly Financial Statements
(1) ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)
(G) CREDIT RISKS
------------
Financial instruments which potentially subject the Company to concentrations of
credit risk consist principally of trade accounts receivable. The Company sells
its products to customers, at times extending credit for such sales. Exposure to
losses on receivables is principally dependent on each customer's financial
condition. The Company monitors its exposure for credit losses and maintains
allowances for anticipated losses.
(H) STOCK TRANSACTIONS
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Shares issued for services performed are valued at either the fair value of
equity instruments issued or the value of services performed, whichever is more
reliably measurable.
(I) STOCK-BASED COMPENSATION
------------------------
The Company has adopted Statement of Financial Accounting Standards (SFAS) No.
123, "Accounting for Stock-Based Compensation." This pronouncement establishes
financial accounting and reporting standards for stock-based compensation. It
encourages, but does not require, companies to recognize compensation expense
for grants of stock, stock options and other equity instruments to employees
based on new fair value accounting rules. Such treatment is required for
non-employee stock-based compensation. The Company has chosen to continue to
account for employee stock-based compensation using the intrinsic value method
prescribed in Accounting Principles Board Opinion No. 25, "Accounting for Stock
Issued to Employee." Accordingly, compensation expense for employee stock
options or warrants is measured as the difference between the quoted market
price of the Company's stock at the date of grant and the amount the employee
must pay to acquire the stock. SFAS 123 requires companies electing to continue
using the intrinsic value method to make certain pro forma disclosures (see Note
6).
(2) INCOME TAXES
No provision for income taxes has been recorded for the period ended September
30, 2003, as there was no net income for the period. No benefit from income
taxes has been recorded for the three months or nine months ended September 30,
2003 as the benefit resulting from the operating losses has been entirely offset
by a valuation allowance due to the uncertainty surrounding the Company's
ability to realize the deferred tax assets in the future.
8
BIO-ONE CORPORATION
NOTES TO CONDENSED CONSOLIDATED QUARTERLY FINANCIAL STATEMENTS
(3) BASIC LOSS PER COMMON SHARE
Basic loss per common share has been computed based upon the weighted average
number of common shares outstanding during the period presented.
(4) COMMITMENTS
The Company has entered into an employment agreement with its founding director
requiring aggregate annual salaries of $120,000 beginning in April 1999.
(5) NOTES PAYABLE
Note payable to bank, bearing interest at the rate of 9%, due March 1, 2003,
collateralized by accounts receivable and inventory. $ 74,502
============
(6) STOCK BASED COMPENSATION
The Company continues to account for stock-based compensation using the
intrinsic value method prescribed by Accounting Principles Board Opinion No. 25,
under which no compensation cost for stock warrants is recognized for stock
purchase warrants granted at or above fair market value.
Had compensation expense been determined based upon fair values at the grant
date for the award of warrants as described herein in accordance with SFAS No.
123, "Accounting for Stock-Based Compensation," the Company's net earnings and
earnings per share would not be materially changed from the amounts as reported
in the accompanying financial statements.
9
ITEM 2. MANAGEMENT'S PLAN OF OPERATION AND DISCUSSION AND ANALYSIS
INTRODUCTORY STATEMENTS
Forward-Looking Statements and Associated Risks. This filing contains
forward-looking statements, including statements regarding, among other things,
(a) our Company's projected sales and profitability, (b) our Company's business
plan and growth strategies, (c) our Company's future financing plans and (d) our
Company's anticipated needs for working capital. In addition, when used in this
filing, the words "believes," "anticipates," "intends," "in anticipation of,"
"expects," and similar words are intended to identify forward-looking
statements. These forward-looking statements are based largely on our Company's
expectations and are subject to a number of risks and uncertainties, many of
which are beyond our Company's control. Actual results could differ materially
from these forward-looking statements as a result of changes in trends in the
economy and any industry in which the Company enters, competition, the
availability of financing and other factors. In light of these risks and
uncertainties, there can be no assurance that the forward-looking statements
contained in this filing will in fact occur.
OUR BUSINESS
We are seeking to become a leading manufacturer and marketer of brand
name nutritional supplements sold through multiple distribution pipelines. Our
success will be dependent on our ability to acquire companies in the nutritional
supplement field and to effectively integrate their operations. Until our
acquisition of the assets of Physicians Nutraceutical Laboratories, Inc. in
September 2003, we had no operations, products, customers, suppliers, or
marketing and sales distribution system. With the acquisition of the assets of
Physicians Nutraceutical Laboratories, Inc. we now have a total of eight
employees and our wholly-owned subsidiary, PNLabs, Inc., has assumed the
leasehold obligation of Physicians Nutraceutical Laboratories, Inc. Our strategy
will be dependent upon our successfully acquiring manufacturing, marketing and
distribution companies currently engaged in various aspects of this industry.
PNLABS, INC.
PNLabs, Inc. is our wholly-owned subsidiary and markets five products:
(1) Choless(TM); (2) Choless(TM) Test Kit; (3) Hormone Health; (4) Arthritis
Health; and (5) Basic Essentials Multi-Vitamin. Choless(TM) ($29.95) is designed
to support healthy HDL, LDL, triglyceride and homocyteine levels. The
Choless(TM) Test Kit ($39.95) is designed to be a home cholesterol test kit with
results in approximately 15 minutes. Hormone Health ($19.95), designed by
physicians, is intended to address symptoms of menopause, bone loss prevention,
as well as promote healthy heart functions. Arthritis Health ($29.95) is
designed to combine cartilage building and repair components with ingredients to
promote the natural formation within the body of a natural anti-inflammatory
agent. Basic Essentials Multi-Vitamin ($29.95) is designed as a daily regimen to
promote proper nutrition. PNLabs' primary focus is to offer a broad-based
product line, which we anticipate will target some of the largest groups
currently taking nutritional supplements.
PRINCIPAL PRODUCTS AND SERVICES
We sell a line of nutritional supplements through our new wholly-owned
subsidiary, PNLabs, Inc. We believe that the nutritional supplements address
problems with cholesterol, hormone health, arthritis and basic vitamin needs.
Except for those products, which we have acquired from Physicians Nutraceutical
Laboratories, Inc., we do not market or sell any other supplements.
MANUFACTURING
We do not currently manufacture any products. While we believe the
acquisition of a manufacturing facility will be key to our overall business
strategy, we may acquire marketing and distribution companies before we are able
to fully implement our business strategy. Until such time as we can manufacture
our own products, we will rely on third party manufacturers.
The principal markets in which we compete are competitive and
fragmented, with competitors in both the private label market and health
supplements market. The term "private label market" describes product
distributors who have outsourced the manufacturing of their product. Over ninety
percent (90%) of all nutritional supplements companies have someone else
manufacture their products and place their "private label" on the products. We
do not believe that this is the most efficient way to operate.
10
SOURCES AND AVAILABILITY OF RAW MATERIALS AND PRINCIPAL SUPPLIERS
We intend to obtain the raw materials for the manufacture of our
products from other sources. Currently there are in excess of two hundred (200)
primary suppliers of raw materials within the U.S. There are well over one
hundred (100) manufacturers in the U.S. that could manufacture any product we
choose to produce. We do not anticipate having contracts with any entities or
persons committing such suppliers to provide the materials required for the
production of our products. We believe that raw materials including all natural
herbs and minerals are plentiful worldwide.
MARKETING
No current marketing, sales or distribution system is currently in
place. During 2003, Mr. Armand Dauplaise's primary effort has been devoted to
negotiating with investment banking sources for Bio-One and identifying
potential acquisition candidates.
The following discussion is predicated upon us generating significant
revenues and raising additional capital to fully implement our vertical
integration and acquisition strategy. We plan to develop a sales and
marketing/customer service department dedicated to selling our services and
proprietary products to consumers in the health supplement industry.
The primary markets for our services and products are in the preventive
and alternative healthcare fields. Preventive and alternative healthcare
programs and systems establish very specific requirements in helping improve and
maintain citizenry health. We believe that the market is global and growing
rapidly. As nutritional supplements use combined with preventive and alternative
healthcare become more readily accepted, we believe physicians and other
healthcare providers will be targeted for marketing purposes.
DEPENDENCE ON NEW PRODUCTS
Our ability to grow will not only be dependent upon the success of our
acquisition program but our ability to introduce new and innovative products
into such markets. We will attempt to introduce additional products in our
existing markets. The success of new products is subject to a number of
conditions, including developing products that will appeal to customers and
comply with existing regulations at the time of introduction.
RESULTS OF OPERATIONS FOR THE THREE-MONTH PERIOD ENDED SEPTEMBER 30, 2003, AS
COMPARED TO THE THREE-MONTH PERIOD ENDED SEPTEMBER 30, 2002
NET SALES. For the three months ended September 30, 2003, we had net
sales of $20,220, as compared to net sales of $0 for the three months ended
September 30, 2002, an increase of $20,220. This increase is primarily
attributable to the acquisition by our wholly-owned subsidiary, PNLabs, Inc., in
September 2003, of substantially all of the assets of Physicians Nutraceutical
Laboratories, Inc. Net sales for the three months ended September 30, 2003, is
comprised of sales of five products: (1) Choless(TM); (2) Choless(TM) Test Kit;
(3) Hormone Health; (4) Arthritis Health; and (5) Basic Essentials
Multi-Vitamin.
COST OF GOODS SOLD. For the three months ended September 30, 2003, we
had cost of goods sold of $6,904, as compared to cost of goods sold of $0 for
the three months ended September 30, 2002, an increase of $6,904. This increase
is primarily attributable to the third-party manufacturing costs incurred by our
wholly-owned subsidiary, PNLabs, Inc., in connection with the marketing and
sales of the nutritional supplement products acquired when PNLabs, Inc.,
purchased substantially all of the assets of Physicians Nutraceutical
Laboratories, Inc., in September 2003.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. For the three months
ended September 30, 2003, we incurred selling, general and administrative
expenses of $375,731, as compared to selling, general and administrative
expenses of $608,751 for the three months ended September 30, 2002, a decrease
of $233,020 or 38.3%. This decrease is primarily attributable to the sale of the
Crown Enterprises "Live Blood Cell Analysis" program to a former shareholder and
director of our Company.
OPERATING INCOME (LOSS). For the three months ended September 30, 2003,
we incurred an operating loss of $362,415, as compared to an operating loss of
$608,751 for the three months ended September 30, 2002, a decrease of $246,336
or 40.5%. This decrease is primarily attributable to our decrease in selling,
general and administrative expenses and our increase in net sales, respectively,
for the three months ended September 30, 2003 and the sale of the Crown
Enterprises "Live Blood Cell Analysis" program to a former shareholder and
director of the Company.
11
RESULTS OF OPERATIONS FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2003, AS
COMPARED TO THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2002
REVENUES. For the nine months ended September 30, 2003, we had net
sales of $20,220, as compared to net sales of $22,220 for the nine months ended
September 30, 2002, a decrease of $2,000 or 9.0%. This decrease is primarily
attributable to our transition from selling the "Live Blood Cell Analysis"
testing services and selected nutritional supplements to marketing and selling
the nutritional supplement products that were acquired in September 2003, when
our wholly-owned subsidiary, PNLabs, Inc., purchased substantially all of the
assets of Physicians Nutraceutical Laboratories, Inc.
COST OF GOODS SOLD. For the nine months ended September 30, 2003, we
had cost of goods sold of $6,904, as compared to cost of goods sold of $9,343
for the nine months ended September 30, 2002, a decrease of $2,439 or 26.1%.
This decrease is primarily attributable to our transition from selling the "Live
Blood Cell Analysis" testing services and selected nutritional supplements to
the third-party manufacturing expenses incurred by our wholly-owned subsidiary,
PNLabs, Inc., with respect to the nutritional supplement products that it
acquired in September 2003, when it purchased substantially all of the assets of
Physicians Nutraceutical Laboratories, Inc.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE. For the nine months ended
September 30, 2002, we incurred selling, general and administrative expenses of
$691,659, as compared to selling, general and administrative expenses of
$914,260 for the nine months ended September 30, 2002, a decrease of $222,601 or
24.3%. This decrease is primarily attributable to and the sale of the Crown
Enterprises "Live Blood Cell Analysis" program to a former shareholder and
director of the Company.
OPERATING INCOME (LOSS). For the nine months ended September 30, 2003,
we incurred an operating loss of $678,343, as compared to an operating loss of
$901,383 for the nine months ended September 30, 2002, a decrease of $223,040 or
24.7%. This decrease is primarily attributable to our decrease in selling,
general and administrative expenses for the nine months ended September 30,
2003, and the sale of the Crown Enterprises "Live Blood Cell Analysis" program
to a former shareholder and director of the Company.
CERTAIN BUSINESS RISK FACTORS
We are subject to various risks, which may have a material adverse
effect on our Company's business, financial condition and results of operations.
Certain risks are discussed below:
WE HAVE HISTORICALLY LOST MONEY AND LOSSES MAY CONTINUE IN THE FUTURE
We have a history of losses. We have incurred an operating loss since
inception and had an accumulated deficit of $2,858,997 as of September 30, 2003.
For the years ended December 31, 2002, 2001 and 2000, we incurred a net loss of
$920,447, $677,150 and $365,213, respectively. During the nine months ended
September 30, 2003, we incurred a net loss of $691,125. We cannot predict the
amount of revenues, if any, we may generate as a result of our acquisition of
the assets of Physicians Nutraceutical Laboratories, Inc., which we consummated
on September 11, 2003. Consequently, we will in all likelihood, have to rely on
external financing for all of our capital requirements. Future losses are likely
to continue unless we successfully implement our revised business plan, which
calls for us to secure both debt and equity financing while aggressively
pursuing acquisitions and/or joint ventures with companies in the nutritional
supplement industry. Our ability to continue as a going concern will be
dependent upon our ability to draw down on the Equity Line of Credit we have
established with Cornell Capital Partners. If we incur any problems in drawing
down our Equity Line of Credit, we may experience significant liquidity and cash
flow problems. If we are not successful in reaching and maintaining profitable
operations we may not be able to attract sufficient capital to continue our
operations. Our inability to obtain adequate financing will result in the need
to curtail business operations and will likely result in a lower stock price.
WE MAY NEED TO RAISE ADDITIONAL CAPITAL TO FINANCE OPERATIONS
We have relied on significant external financing to fund our
operations. As of November 7, 2003, we have received a total of $1.5 million
under our Equity Line of Credit with Cornell Capital Partners. We received all
of these proceeds in fiscal years 2002 and 2003, both periods in which we had no
revenues. Prior to our Equity Line of Credit, our officers and directors
advanced us approximately $70,000 in 2002 during a period in which we had
approximately $20,000 in revenues. As of September 30, 2003, we had $352,702 in
cash and cash equivalents, our current assets totaled $480,823 and our current
liabilities were $252,144. We will need to raise additional capital to fund our
anticipated operating expenses and future expansion. Among other things,
external financing may be required to cover our operating costs. Unless we
obtain profitable operations, it is unlikely that we will be able to secure
additional financing from external sources. If we are unable to secure
additional financing or we cannot draw down on our Equity Line of Credit, we
12
believe that we have sufficient funds to continue operations for three to four
months. We anticipate that we will require $720,000 to fund our anticipated
operating expenses and approximately $16,000,000 to fund our expansion plans for
the next twelve months. The sale of our common stock to raise capital may cause
dilution to our existing shareholders. Our inability to obtain adequate
financing will result in the need to curtail business operations. Any of these
events would be materially harmful to our business and may result in a lower
stock price. Our inability to obtain adequate financing will result in the need
to curtail business operations and you could lose your entire investment. Our
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
OUR COMMON STOCK MAY BE AFFECTED BY LIMITED TRADING VOLUME AND MAY
FLUCTUATE SIGNIFICANTLY
Our common stock is traded on the Over-the-Counter Bulletin Board.
Prior to this offering, there has been a limited public market for our common
stock and there can be no assurance that an active trading market for our common
stock will develop. As a result, this could adversely affect our shareholders'
ability to sell our common stock in short time periods, or possibly at all. Our
common stock is thinly traded compared to larger, more widely known companies in
the nutritional supplement industry. Thinly traded common stock can be more
volatile than common stock traded in an active public market. The average daily
trading volume of our common stock in October 2003 was 301,995 shares. The high
and low bid price of our common stock for the last two years has been $0.47 and
$0.04, respectively. Our common stock has experienced, and is likely to
experience in the future, significant price and volume fluctuations, which could
adversely affect the market price of our common stock without regard to our
operating performance. In addition, we believe that factors such as quarterly
fluctuations in our financial results and changes in the overall economy or the
condition of the financial markets could cause the price of our common stock to
fluctuate substantially.
WE MAY NOT BE ABLE TO ACCESS SUFFICIENT FUNDS WHEN NEEDED UNDER THE
EQUITY LINE OF CREDIT AND THE PRICE OF OUR COMMON STOCK WILL AFFECT OUR
ABILITY TO DRAW DOWN ON THE EQUITY LINE OF CREDIT
Currently, we are dependent upon external financing to fund our
operations. Our financing needs are expected to be provided, in large part, by
our Equity Line of Credit. As of November 7, 2003, we have received $1.5 million
and issued 30,000,000 shares under the Equity Line of Credit. The amount of each
advance under the Equity Line of Credit is subject to an aggregate maximum
advance amount equal to $500,000 in any 30-calendar-day period. Because of this
maximum advance restriction, we may not be able to access sufficient funds when
needed.
In addition, there is an inverse relationship between the price of our
common stock and the number of shares of common stock which will be issued under
the Equity Line of Credit. In light of our recent stock price, we have not
registered a sufficient number of shares of common stock to draw down the
remaining $8.5 million available to us under the Equity Line of Credit. Based on
our recent stock price of $0.08, and that we are registering 50 million shares
pursuant to a registration statement, the maximum amount we would be able to
draw down on the remaining balance of the Equity Line of Credit equals
$4,000,000. At our current stock price of $0.08, we would have to register
106,250,000 million shares of common stock to draw down the entire $8.5 million
remaining available to us under the Equity Line of Credit. Our Articles of
Incorporation currently authorize Bio-One to issue 100 million shares and, as of
November 7, 2003, we have 44,553,996 shares of common stock issued and
outstanding. In the event that we may need to register additional shares of
common stock to fully utilize the Equity Line of Credit, we will need to obtain
shareholder approval to increase our authorized common stock and amend our
Articles of Incorporation. On November 6, 2003, we filed a definitive proxy
statement with respect to a Special Meeting of our shareholders to increase our
authorized common stock to 500,000,000 shares. We cannot be certain that we
would obtain such shareholder approval due to the dilutive effect of the
financing arrangement. Further, in the event we desire to draw down any
available amounts remaining under the Equity Line of Credit after we have issued
the 50 million shares being registered in the accompanying registration
statement and assuming we have obtained shareholder approval to increase our
authorized common stock, we will have to file a new registration statement to
cover such additional shares we will issue for additional draw downs on the
Equity Line of Credit. Unless we obtain profitable operations, it is unlikely
that we will be able to secure additional financing from external sources other
than our Equity Line of Credit. Therefore, if we are unable to draw down on our
Equity Line of Credit, we may be forced to curtail or cease our business
operations.
OUR COMMON STOCK IS DEEMED TO BE "PENNY STOCK," WHICH MAY MAKE IT MORE
DIFFICULT FOR INVESTORS TO SELL THEIR SHARES DUE TO SUITABILITY
REQUIREMENTS
Our common stock is deemed to be "penny stock" as that term is defined
in Rule 3a51-1 promulgated under the Securities Exchange Act of 1934. Penny
stocks are stock:
o With a price of less than $5.00 per share.
13
o That are not traded on a "recognized" national exchange.
o Whose prices are not quoted on the Nasdaq automated quotation
system (Nasdaq listed stock must still have a price of not
less than $5.00 per share).
o In issuers with net tangible assets less than $2.0 million (if
the issuer has been in continuous operation for at least three
years) or $5.0 million (if in continuous operation for less
than three years), or with average revenues of less than $6.0
million for the last three years.
o Broker/dealers dealing in penny stocks are required to provide
potential investors with a document disclosing the risks of
penny stocks. Moreover, broker/dealers are required to
determine whether an investment in a penny stock is a suitable
investment for a prospective investor. These requirements may
reduce the potential market for our common stock by reducing
the number of potential investors. This may make it more
difficult for investors in our common stock to sell shares to
third parties or to otherwise dispose of them. This could
cause our stock price to decline.
WE COULD FAIL TO ATTRACT OR RETAIN KEY PERSONNEL
Our success largely depends on the efforts and abilities of Armand
Dauplaise, our President and Chairman of the Board of Directors. Mr. Dauplaise
has been instrumental in securing our existing financing arrangements. In
addition, Mr. Dauplaise's efforts resulted in our acquisition of the assets of
Physicians Nutraceutical Laboratories, Inc., in September 2003. Mr. Dauplaise is
also primarily responsible for identifying additional acquisition candidates
with the assistance of Health Business Partners LLC and undertaking
due-diligence investigations. Mr. Dauplaise receives a salary of $120,000 per
year and a car allowance pursuant to his employment agreement with Bio-One. The
employment agreement is for one year and is renewable annually. The loss of the
services of Mr. Dauplaise could materially harm our business because of the cost
and time necessary to recruit and train a replacement. Such a loss would also
divert management attention away from operational issues. We do not presently
maintain a key-man life insurance policy on Mr. Dauplaise.
In addition, in order to implement our revised business strategy, we
believe that we will need to attract and retain a Chief Financial Officer, a
Director of Marketing, a Director of Operations, an Information Technology
Officer and additional administrative support staff as our company grows.
WE MAY BE UNABLE TO MANAGE GROWTH
Successful implementation of our business strategy requires us to
manage our growth. Growth could place an increasing strain on our management and
financial resources. To manage growth effectively, we will need to:
o Respond to the needs of an operating business and be able to
fully integrate management and controls to our acquisition of
the assets of Physicians Nutraceutical Laboratories, Inc., as
well as any future acquisitions.
o Attract and retain qualified personnel, as well as, develop,
train and manage management-level and other employees.
o If we fail to manage our growth effectively, our business,
financial condition or operating results could be materially
harmed, and our stock price may decline.
THE ISSUANCE OF PREFERRED STOCK MAY ENTRENCH MANAGEMENT OR DISCOURAGE A
CHANGE OF CONTROL
Our Certificate of Incorporation authorizes the issuance of up to
10,000,000 shares of preferred stock with designations rights, and preferences
determined from time to time by our Board of Directors. Accordingly, our Board
of Directors is empowered, without stockholder approval, to issue preferred
stock with dividends, liquidation, conversion, voting, or other rights that
could adversely affect the voting power or other rights of the holders of our
common stock. In the event of issuance, the preferred stock could be used, under
certain circumstances, as a method of discouraging, delaying or preventing a
change in control of the company or, alternatively, granting the holders of
preferred stock such rights as to entrench management. If the holders of our
common stock desired to remove current management, it is possible that our Board
of Directors could issue preferred stock and grant the holders thereof such
rights and preferences so as to discourage or frustrate attempts by the common
stockholders to remove current management. In doing so, management would be able
to severely limit the rights of common stockholders to elect the Board of
Directors.
14
WE EXPECT INTENSE COMPETITION IN OUR INDUSTRY
Many of our competitors have significantly greater name recognition and
financial and other resources. If we are able to compete effectively against our
competitors, we will be forced to curtail or cease our business operations.
OUR INDUSTRY IS SUBJECT TO GOVERNMENT REGULATION
The manufacturing, processing, formulation, packaging, labeling and
advertising of vitamins and other neutraceutical products are subject to
regulation by one or more federal agencies, including the Food and Drug
Administration, the Federal Trade Commission, the Consumer Product Safety
Commission, the United States Department of Agriculture, the United States
Postal Service, the United States Environmental Protection Agency and the
Occupational Safety and Health Administration. These activities are also
regulated by various agencies of the states and localities, as well as of
foreign countries, in which our products may be sold. We may incur significant
costs in complying with these regulations. In the event we cannot comply with
government regulations affecting our business and products, we may be forced to
curtail or cease our business operations.
FUTURE ACQUISITIONS MAY DISRUPT OUR BUSINESS AND DEPLETE OUR FINANCIAL
RESOURCES
Any future acquisitions we make could disrupt our business and
seriously harm our financial condition. We intend to consider investments in
complementary companies, products and technologies. While we have no current
agreements to do so, we anticipate buying businesses, products and/or
technologies in the future in order to fully implement our business strategy. In
the event of any future acquisitions, we may:
o issue stock that would dilute our current stockholders'
percentage ownership;
o incur debt;
o assume liabilities;
o incur amortization expenses related to goodwill and other
intangible assets; or
o incur large and immediate write-offs.
The use of debt or leverage to finance our future acquisitions should
allow us to make acquisitions with an amount of cash in excess of what may be
currently available to us. If we use debt to leverage up our assets, we may not
be able to meet our debt obligations if our internal projections are incorrect
or if there is a market downturn. This may result in a default and the loss in
foreclosure proceedings of the acquired business or the possible bankruptcy of
our business.
Our operation of any acquired business will also involve numerous
risks, including:
o integration of the operations of the acquired business and its
technologies or products;
o unanticipated costs;
o diversion of management's attention from our core business;
o adverse effects on existing business relationships with
suppliers and customers;
o risks associated with entering markets in which we have
limited prior experience; and
o potential loss of key employees, particularly those of the
purchased organizations.
OUR EQUITY CREDIT LINE AGREEMENT COULD HAVE AN ADVERSE EFFECT ON OUR
ABILITY TO MAKE ACQUISITIONS WITH OUR COMMON STOCK
We cannot predict the actual number of shares of common stock that will
be issued pursuant to the Equity Line of Credit Agreement, in part, because the
purchase price of the shares will fluctuate based on prevailing market
conditions and we have not determined the total amount of advances we intend to
15
draw. It may be necessary for our shareholders to approve an increase in our
authorized common stock for us to register additional shares of common stock in
order to have sufficient authorized shares available to make acquisitions using
our common stock. As we issue shares of common stock pursuant to the Equity
Credit Line Agreement, we may not have sufficient shares of our common stock
available to successfully attract and consummate future acquisitions.
INVESTORS SHOULD NOT RELY ON AN INVESTMENT IN OUR STOCK FOR THE PAYMENT
OF CASH DIVIDENDS
We have not paid any cash dividends on our capital stock and we do not
anticipate paying cash dividends in the future. Investors should not make an
investment in our common stock if they require dividend income. Any return on an
investment in our common stock will be as a result of any appreciation, if any,
in our stock price.
THERE ARE NO CONCLUSIVE STUDIES REGARDING THE MEDICAL BENEFITS OF
NUTRITIONAL SUPPLEMENTS
We currently market five products: (1) Choless(TM); (2) Choless(TM)
Test Kit; (3) Hormone Health; (4) Arthritis Health; and (5) Basic Essentials
Multi-Vitamin. Many of the ingredients in our current products, and we
anticipate in our future products, will be vitamins, minerals, herbs and other
substances for which there is not a long history of human consumption. Although
we believe all of our products to be safe when taken as directed by us, there is
little experience with human consumption of certain of these product ingredients
in concentrated form. In addition, we are highly dependent upon consumers'
perception of the safety and quality of our products as well as similar products
distributed by other companies, we could be adversely affected in the event any
of our products or any similar products distributed by other companies should
prove or be asserted to be harmful to consumers. In addition, because of our
dependence upon consumer perceptions, adverse publicity associated with illness
or other adverse effects resulting from consumers' failure to consume our
products as we suggest or other misuse or abuse of our products or any similar
products distributed by other companies could have a material adverse effect on
the results of our operations and financial condition.
THE MANUFACTURE AND DISTRIBUTION OF VITAMINS AND OTHER NUTRITIONAL
SUPPLEMENTS COULD RESULT IN PRODUCT LIABILITY CLAIMS
We currently market five products: (1) Choless(TM); (2) Choless(TM)
Test Kit; (3) Hormone Health; (4) Arthritis Health; and (5) Basic Essentials
Multi-Vitamin. We, like any other retailer, distributor and manufacturer of
products that are designed to be ingested, face an inherent risk of exposure to
product liability claims in the event that the use of our products results in
injury. Such claims may include, among others, that our products contain
contaminants or include inadequate instructions as to use or inadequate warnings
concerning side effects and interactions with other substances. While we do
maintain product liability insurance, it may not be adequate to cover any
liabilities. We do not anticipate obtaining contractual indemnification from
parties supplying raw materials or marketing our products. In any event, any
such indemnification if obtained will be limited by our terms and, as a
practical matter, to the creditworthiness of the indemnifying party. In the
event that we do not have adequate insurance or contractual indemnification,
product liabilities relating to defective products could have a material adverse
effect on our operations and financial conditions.
POTENTIAL EFFECT OF ADVERSE PUBLICITY
We believe the growth experienced by the nutritional supplement market
is based in part on national media attention regarding scientific research
suggesting potential health benefits from regular consumption of certain
vitamins and other nutritional products. Such research has been described in
major medical journals, magazines, newspapers and television programs. The
scientific research to date is preliminary.
In the future, scientific research and/or publicity may not be
favorable to the nutritional supplement market or any particular product, or may
be inconsistent with earlier favorable research or publicity. Future reports of
research that are perceived as less favorable or that question such earlier
research could have a material adverse effect on our operations and financial
condition. Because of our dependence upon consumer perceptions, adverse
publicity associated with illness or other adverse effects resulting from the
consumption of our products or any similar products distributed by other
companies could have a material adverse effect on our operations. Such adverse
publicity could arise even if the adverse effects associated with such products
resulted from consumers' failure to consume such products as directed. In
addition, we may not be able to counter the effects of negative publicity
concerning the efficacy of our products. Any such occurrence could have a
negative effect on our operations.
16
ANY FUTURE ACQUISITIONS WILL HAVE TO DEVELOP NEW PRODUCTS IN ORDER TO
KEEP PACE WITH CHANGING CONSUMER DEMANDS
The dietary supplement industry is highly competitive and characterized
by changing consumer preferences and continuous introduction of new products.
Our goal is to expand our portfolio of dietary supplement products through
acquisition of existing companies and/or products serving niche segments of the
industry. New products must be introduced in a timely and regular basis to
maintain distributor and consumer interest and appeal to varying consumer
preferences.
We believe that any future success of our company will depend, in part,
on our ability to anticipate changes in consumer preferences and acquire,
manage, develop and introduce, in a timely manner, new products that adequately
address such changes. If we are unable to develop and introduce new products or
if our new products are not successful, our sales may be adversely affected as
customers seek competitive products. In addition, our introduction or our
announcement of new products could result in a reduction in sales of our
existing products, requiring us to carefully manage product introductions in
order to minimize disruption in sales of our existing products. Any reduction in
purchases or consumption of our existing products could have a material adverse
effect on our business, operating results and financial condition.
ITEM 3. CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. Within 90 days prior
to the filing date of this report, the Company carried out an evaluation of the
effectiveness of the design and operation of its disclosure controls and
procedures pursuant to Exchange Act Rule 13a-14. This evaluation was done under
the supervision and with the participation of the Company's President and Chief
Financial Officer. Based upon that evaluation, he concluded that the Company's
disclosure controls and procedures are effective in gathering, analyzing and
disclosing information needed to satisfy the Company's disclosure obligations
under the Exchange Act.
CHANGES IN INTERNAL CONTROLS. There were no significant changes in the
Company's internal controls or in other factors that could significantly affect
those controls since the most recent evaluation of such controls.
17
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are not aware of any legal proceedings involving our Company.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
(a) None.
(b) None.
(c) In May 1998, prior to its acquisition of Crown, the Company
sold 1,600,000 shares of its unrestricted common stock to seventy-two (72)
investors for $16,000. Dale B. Finfrock, Jr., the Company's then current sole
officer and director, received 279,960 of such shares.
In May 2000, the Company entered into the Share Exchange with Crown
Enterprises. We issued 10,000,000 shares of its common stock to the shareholders
of Crown for all of the issued and outstanding stock of Crown. As part of the
exchange, Armand Dauplaise (the Company's current President and Chairman) and
Kevin Lockhart (the Company's Secretary at that time) each received 4,597,500
shares of the Company's Common Stock.
In May 2000, we issued 100,000 shares of our restricted common stock to
three (3) persons for their services to the Company in connection with the Share
Exchange.
In June 2000, we sold 40,000 shares of our restricted common stock to
one (1) investor for $10,000.
In July 2000, we sold 100,000 shares of our restricted common stock to
one (1) investor for $25,000. The Company also issued a warrant to purchase an
additional 400,000 shares of the Company's restricted common stock, which
warrant was exercisable at a price of $0.25 per share. The Company received a
total of $25,000 for the investment. The warrant has expired.
In October 2000, we issued a total of 86,000 shares of its common stock
to Bradley Kline, Melvin Correll and Glenna Correll. These shares were issued
for services rendered. No contract exists. Richard Wilson, who received 60,000
of the shares, was inadvertently left off the list of Crown shareholders when
the Share Exchange took place in May 2000.
In November 2000, we sold 140,000 shares of our common stock to one (1)
investor for $35,000. We also issued a warrant to purchase an additional 180,000
shares of the Company's common stock at an exercise price of $1.00 per share or
eighty percent (80%) of the average bid price for the first three (3) weeks of
public trading, whichever is lower. The warrants have expired.
In December 2000, the Company executed a convertible promissory note in
favor of Margaret Schrock in the principal amount of $25,000. The note was
conducted to common stock in August 2001.
In December 2000, the Company sold a total of 139,999 shares of its
common stock to four (4) investors for a total of $34,999.99.
In March 2001, the Company sold 400,000 and 100,000 shares of its
common stock to John M. Moxen and Ohio Well Management, Inc., an Ohio
corporation respectively for a total of $125,000. The Company issued warrants to
purchase an additional 500,000 shares of the Company's common stock at an
exercise price of $1.00 per share or eighty percent (80%) of the average bid
price for the first three (3) weeks of public trading, whichever is lower. The
warrants have expired.
In April 2001, the Company issued 10,000 shares of its common stock to
Curt Jones, who served as a financial consultant to the Company.
18
In May 2001, the Company issued 100,000 shares of its common stock and
a warrant to purchase an additional 100,000 shares of its common stock at an
exercise price of $0.29 to Arthur Szatkowski for $25,000. The warrants expired
June 22, 2002.
In June 2001, the Company issued 10,000 shares of its common stock to
Curt Jones, who served as a financial consultant to the Company.
In June 2001, the Company issued 2,000 shares of its common stock to
Charles A. Gaudio & MaryAnn Gaudio JTWROS for services in connection with
production of the Company's website.
In July 2001, the Company issued 285,624 shares and 31,735 shares of
its restricted common stock to Irwin Newman and Jeffrey Gerstein respectively,
in connection with a consulting agreement entered into between the Company and
Mr. Newman.
In August 2001, the Company issued 416,667 shares of its common stock
to John M. Moxen upon the conversion of Mr. Moxen's promissory note dated May
25, 2001.
In August 2001, the Company issued 50,000 shares of its common stock to
each of Richard Friedman and Jeffrey Markowitz for services in connection with
certain financial advisory services rendered to the Company.
In August 2001, the Company issued 46,296 shares of its common stock to
each of Gloria Burkholder, Julie Gingrich and Sherry Schrock upon the conversion
of Margaret Schrock's promissory note dated December 5, 2000.
In September 2001, the Company issued 100,000 shares of its common
stock to Robert Gingras upon the exercise of a warrant to purchase shares of its
common stock at an exercise price of $0.25 per share, for a cumulative purchase
price of $25,000.
In September 2001, the Company issued 90,000 shares of its common stock
to the Margaret F. Schrock Family Trust upon the exercise of a warrant to
purchase shares of its common stock at an exercise price of $0.29 per share, for
a cumulative purchase price of $26,100.
In November 2001, we issued the following shares:
NUMBER OF
NAME OF SHAREHOLDER SHARES CONSIDERATION
------------------- ------ -------------
Robert Gingras 300,000 $75,000 Cash
Frank Clark 23,936 Consulting
Richard Wexler 5,000 Consulting
Steve Scott 5,000 Consulting
In August 2002, we issued the following shares in connection with the
Equity Credit Line:
NAME OF SHAREHOLDER NUMBER OF SHARES
------------------- ----------------
Howard Salamon 147,826
Mark A. Angelo 266,087
Robert Farrell 266,087
Joseph Donahue 266,087
Matthew Beckman 266,087
Gerald Eicke 133,043
George Kanakis 133,044
We also issued 43,759 shares to Westrock Advisors in connection with a
placement agent agreement.
19
In October 2002, we issued shares to the following individuals for
consulting services:
NAME OF SHAREHOLDER NUMBER OF SHARES
------------------- ----------------
Irwin Newman 31,090
Jeffrey Gerstein 3,450
Gary Whorle 10,000
In December 2002, we issued 110,000 shares to Roy Lerman for consulting
services.
During October 2002 to July 2003, we issued the following shares:
NAME OF SHAREHOLDER DATE ACQUIRED NUMBER OF SHARES
------------------- ------------- ----------------
Irwin Newman 01/03 73,045
Jeffrey Gerstein 01/03 8,115
Frank Clark 02/03 179,105
Scott Sieck 02/03 141,000
The shares were issued for consulting services.
With respect to the sale of unregistered securities referenced above,
all transactions were exempt from registration pursuant to Section 4(2) of the
Securities Act of 1933 (the "1933 Act"), and Regulation D promulgated under the
1933 Act. In each instance, the purchaser had access to sufficient information
regarding Bio-One so as to make an informed investment decision. More
specifically, Bio-One had a reasonable basis to believe that each purchaser was
an "accredited investor" as defined in Regulation D of the 1933 Act and
otherwise had the requisite sophistication to make an investment in Bio-One's
common stock.
(d) None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM 5. OTHER INFORMATION
Not applicable.
20
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS.
EXHIBIT NO. DESCRIPTION LOCATION
- ----------- ----------- --------
3.(i).1 Articles of Incorporation of Bio-One Corporation Incorporated by reference to the Company's
filed February 24, 1998 Registration Statement filed on Form 10-SB filed
November 3, 2000
3.(i).2 Certificate of Amendment of Articles of Incorporated by reference to the Company's
Incorporation filed August 7, 2000 Registration Statement filed on Form 10-SB filed
November 3, 2000
3.(ii).1 Bylaws of Bio-One Corporation Incorporated by reference to the Company's
Registration Statement filed on Form 10-SB filed
November 3, 2000
10.1 Share Exchange Agreement between the Company and Incorporated by reference to the Company's
Crown Enterprises dated May 20, 2000 Registration Statement filed on Form 10-SB filed
November 3, 2000
10.2 Employment Agreement between the Company and Incorporated by reference to the Company's
Armand Dauplaise dated May 30, 2000 Registration Statement filed on Form 10-SB filed
November 3, 2000
10.3 Equity Line of Credit Agreement between the Incorporated by reference to the Company's
Company and Capital Partners, LP dated July 25, Quarterly report filed on Firm 10-QSB for the
2002 period ended June 30, 2002 on August 14, 2002
10.4 Placement Agent Agreement between Bio-One Corp and Incorporated by reference to the Company's Form
Westrock Advisors SB-2 Registration Statement filed August 27, 2002
10.5 Registration Rights Agreement between Bio-One Incorporated by reference to the Company's Form
Corporation and Cornell Capital Partners, LLP SB-2 Registration Statement filed August 27, 2002
10.6 Escrow Agreement between Bio-One Corporation, Incorporated by reference to the Company's Form
Cornell Capital Partners, L.P. Butler Gonzales LLP SB-2 Registration Statement filed August 27, 2002
and Wachovia Bank, N.A.
10.7 Agreement between the Company and Kevin Lockhart Incorporated by reference to the Company's
and General Release in connection with redemption Form 8-K filed August 2, 2002
of shares and resignation as Board Member
31.1 Certification Pursuant to Section 302 Provided herewith
31.2 Certification Pursuant to Section 302 Provided herewith
32.1 Certification Pursuant to 18 U.S.C. Section 1350 Provided herewith
(B) REPORTS ON FORM 8-K.
No reports on Form 8-K were filed during the quarterly period ended
September 30, 2003.
21
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Date: November 12, 2003 BIO-ONE CORPORATION
By: /s/ Armand Dauplaise
---------------------------------------
Armand Dauplaise
President, Chief Executive Officer and
Principal Accounting Officer
22