UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] Quarterly Report Pursuant to Section
13 or 15(d) of the Securities
Exchange Act of 1934 for the
quarterly period ended March 31, 2002
[ ] Transition Report Pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934
For the transition period from ____________ to ______________
Commission File Number: 333-46666
BIOQUEST INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Virginia
(State or other jurisdiction of incorporation or organization)
54-1965777
(IRS Employer Identification Number)
P.O. Box 15, Fairfax Station, Virginia 22039
(Address of principal executive offices)
(703) 764-4464
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year,
if changed since last report)
Number of Shares Outstanding of Common Stock,
No Par Value Shares As of March 31, 2002 9,277,140
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the Registrant was required
to file such reports) and (2) has been subject to such filing requirements for
the past 90 days. Yes[X]No[ ].
PART 1 FINANCIAL INFORMATION
Item 1. Financial Statements
CONSOLIDATED BALANCE SHEETS
BIOQUEST INTERNATIONAL, INC. AND SUBSIDIARIES
(A Development Stage Company)
March 31, 2002 June 30, 2001
(unaudited) (audited)
---------------- -------------
A S S E T S
Cash - NOTE C $ 39,799 $ 142,546
Receivable from stockholder 28,455 3,455
Prepaid expenses 9,000 0
Deferred offering costs 373,792 146,607
Premise and equipment - NOTE B 78,979 77,464
---------------- -------------
$ 530,025 $ 370,072
================ =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable $ 12,549 $ 10,091
Stockholders' Equity:
Preferred stock, no par value, 5,000,000 shares
authorized, no shares issued and outstanding 0 0
Common stock, no par value, 25,000,000 shares authorized,
9,277,140 and 9,040,473 shares issued and outstanding
as of March 31, 2002 and June 30, 2001, respectively 0 0
Additional paid-in capital 1,947,209 1,592,210
Deficit accumulated during the development stage (1,429,733) (1,232,229)
---------------- -------------
TOTAL STOCKHOLDERS' EQUITY 517,476 359,981
---------------- -------------
$ 530,025 $ 370,072
================ =============
See accompanying notes to consolidated financial statements
-1-
CONSOLIDATED STATEMENTS OF OPERATIONS
BIOQUEST INTERNATIONAL, INC. AND SUBSIDIARIES
(A Development Stage Company)
(unaudited)
Three months
ended
March 31,
2002
----------
REVENUE $ 0
EXPENSES
Advertising 1,840
Bank charges 46
Outside services 5,371
Consulting fees 36,200
Conventions 0
Depreciation 0
Casual labor 0
Legal and accounting fees 0
License and permits 0
Meals 36
Office expense 35
Postage 328
Printing and reproduction 704
Contract cancellation fee 0
Supplies 2,434
Telephone 1,088
Travel 7,313
Computer services 434
Miscellaneous 40
----------
TOTAL EXPENSES 55,869
----------
NET LOSS $ (55,869)
==========
NET LOSS PER SHARE $ (0.01)
==========
AVERAGE WEIGHTED
SHARES OUTSTANDING 9,277,540
==========
See accompanying notes to consolidated financial statements
-2-
CONSOLIDATED STATEMENTS OF OPERATIONS
BIOQUEST INTERNATIONAL, INC. AND SUBSIDIARIES
(A Development Stage Company)
(unaudited)
Nine months Period from
ended November 4, 1999
March 31, (Inception) to
2002 March 31, 2002
---------- ------------
REVENUE $ 0 $ 0
- -------
EXPENSES
Advertising 23,192 32,526
Bank charges 380 1,033
Outside services 13,778 35,675
Consulting fees 113,202 1,140,719
Conventions 0 3,465
Depreciation 0 19
Interest expense 0 466
Legal and accounting fees 16,006 54,850
License and permits 210 1,320
Meals 281 10,647
Office expense 4,207 11,234
Postage 1,254 6,937
Printing and reproduction 704 7,018
Contract cancellation fee 0 15,000
Supplies 2,434 8,878
Telephone 4,153 17,084
Travel 17,202 59,479
Computer services 434 22,522
Miscellaneous 67 861
---------- ------------
TOTAL EXPENSES 197,504 1,429,733
---------- ------------
NET LOSS $ (197,504) $ (1,429,733)
========== ============
NET LOSS PER SHARE $ (0.02) $ (0.18)
========== ============
AVERAGE WEIGHTED
SHARES OUTSTANDING 9,218,292 8,075,462
========== ============
See accompanying notes to consolidated financial statements
-3-
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
BIOQUEST INTERNATIONAL, INC. AND SUBSIDIARIES
(A Development Stage Company)
(unaudited)
DEFICIT
ACCUMULATED
ADDITIONAL DURING
COMMON STOCK PAID-IN DEVELOPMENT
SHARES AMOUNT CAPITAL STAGE TOTAL
----------- ----------- ------------ --------------- ---------------
Balance
November 4, 1999 0 $ 0 $ 0 $ 0 $ 0
Proceeds from issuance
of common stock 0 0 302,000 0 302,000
Net loss from inception to
June 30, 2000 0 0 0 (99,958) (99,958)
----------- ----------- ------------ --------------- ---------------
Balance (deficit)
June 30, 2000 0 0 302,000 (99,958) 202,042
Proceeds from issuance
of common stock 0 0 540,210 0 540,210
Issuance of common stock
for services 0 0 750,000 0 750,000
Net loss for year ended
June 30, 2001 0 0 0 (1,132,271) (1,132,271)
----------- ----------- ------------ --------------- ---------------
Balance (deficit)
June 30, 2001 9,040,473 $ 0 $ 1,592,210 $ (1,232,229) $ 359,981
Proceeds from issuance
of common stock 236,667 0 354,999 0 354,999
Net loss for nine months ended
March 31, 2002 0 0 0 (197,504) (197,504)
----------- ----------- ------------ --------------- ---------------
Balance (deficit)
March 31, 2002 9,277,140 $ 0 $ 1,947,209 $ (1,429,733) $ 517,476
=========== =========== =========== =============== ===============
See accompanying notes to consolidated financial statements
-4-
CONSOLIDATED STATEMENTS OF CASH FLOWS
BIOQUEST INTERNATIONAL, INC. AND SUBSIDIARIES
(A Development Stage Company)
(unaudited)
Nine months Period from
ended November 4, 1999
March 31, (Inception) to
2002 March 31, 2002
-------------- -----------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (197,504) $ (1,429,733)
Adjustments to reconcile net loss to net
cash used in operating activities:
Issuance of common stock for services 0 750,000
Decrease (increase) in prepaid expenses (9,000) (9,000)
Increase in miscellaneous receivables (25,000) (28,455)
Increase in other assets (227,185) (373,792)
Increase (decrease) in accounts payable 2,458 12,549
-------------- -----------------
NET CASH USED
IN OPERATING ACTIVITIES (456,231) (1,078,431)
-------------- -----------------
CASH FLOWS FROM INVESTING ACTIVITIES
Investment in website development 0 (76,681)
Purchases of premises and equipment (1,515) (2,298)
-------------- -----------------
NET CASH USED
IN INVESTING ACTIVITIES (1,515) (78,979)
-------------- -----------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock 354,999 1,197,209
-------------- -----------------
NET CASH PROVIDED
BY FINANCING ACTIVITIES 354,999 1,197,209
-------------- -----------------
NET INCREASE (DECREASE) IN CASH (102,747) 39,799
CASH
Beginning of period 142,546 0
-------------- -----------------
End of period $ 39,799 $ 39,799
============== =================
See accompanying notes to consolidated financial statements
-5-
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
BIOQUEST INTERNATIONAL, INC. AND SUBSIDIARIES
(A Development Stage Company)
Three and Nine Months Ended March 31, 2002
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with instructions to Form 10-QSB. Accordingly, they do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered
necessary have been made for the fair presentation of the Company's results for
the three and six month periods ended March 31, 2002 are not necessarily
indicative of the results that may be expected for the year ended June 30, 2002.
-6-
Item 2. Management's Discussion and Analysis or Plan of Operation
1. Liquidity and Capital Resources. BioQuest was incorporated on November 4,
1999 in Virginia as a privately held corporation for the purpose of establishing
a business or businesses all allied with the field of alternative medicine. Our
goals are to brand BioQuest as the premiere provider of information, products
and services within the field of alternative medicine. BioQuest has not yet
commenced generating any revenue. BioQuest expects to fund development
expenditures and incur losses until it is able to generate sufficient income and
cash flows to meet such expenditures and other requirements. BioQuest does not
currently have adequate cash reserved to continue to cover such anticipated
expenditures and cash requirements. These factors, among others, raise
substantial doubt about BioQuest's ability to continue as a going concern.
2. Plan of Operation. Through March 31, 2002, BioQuest's activities have been
organizational and devoted to developing a business plan, raising capital,
creating its web site as well as beginning to develop its other contemplated
operations. Where such costs are indirect and administrative in nature, they
have been expensed in the accompanying statement of operations. Where such costs
relate to capital raising and are both direct and incremental, such costs have
been treated as deferred offering costs in the accompanying balance sheet.
BioQuest can be classified as an "early stage" start-up company with
essentially no operating history and no revenues. No assurance can be given that
our products and services will be accepted in the marketplace or that there will
be sufficient revenues generated for us to be profitable.
BioQuest has developed an action plan geared to varying amounts of
capital being raised. We will structure our operations based on both the amount
of capital raised in the IPO and the timing of the receipt of the proceeds.
Hence, initially we will devote a significant portion of our day-to-day
operations on marketing, recruiting and retaining key personnel, planning, while
establishing, branding and marketing a variety of unique products and services.
Once adequate funding is completed, BioQuest expects to retain up to 25
full-time employees while continuing, because of the associated efficiency and
cost-effectiveness, to outsource a significant portion of the website
development to outside firms.
Because BioQuest has no history of operations, there is no assurance
that our business plan can be developed and implemented. As a result, there is
no assurance that revenues will ever be generated sufficient to recover the
capital raised in the IPO, let alone provide a return to shareholders on
invested capital.
3. Forward-looking Statements. Statements contained in this document which are
not historical fact are forward-looking statements based upon management's
current expectations that are subject to risks and uncertainties that could
cause actual results to differ materially from those set forth in or implied by
forward-looking statements.
4. Recent Accounting Pronouncements. There are no recently issued accounting
standards for which the impact on our financial statements at Marh 31, 2002.
is not known.
-8-
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
On May 9, 2002, Mr. Roger Miller, for health and other personal
reasons, resigned from the Company's Board of Directors and as its Chief
Financial Officer. In addition, in consideration of $25,000 paid by the Company,
Mr. Miller returned, to the Company, certificates for all 4,000,000 common
shares previously issued to and owned by him. Such shares became treasury shares
of the Company effective upon their May 10, 2002 date of receipt.
Item 6. Report on Form 8-K
None
-9-
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BioQuest International, Inc.
/s/ Peter J. Ewens
---------------------------
Peter J. Ewens, President
Dated: May 13, 2002
This Form 10-QSB contains summary financial information extracted from
the financial statements for the quarterly period ending March 31, 2002 and
is qualified in its entirety by reference to such financial statements.