Filed Pursuant to Rule 424(b)(3)
Registration No. 333-121786
Prospectus Supplement Dated October 17, 2005
(To Prospectus filed on August 22, 2005 File No. 333-121786)
BIO-BRIDGE SCIENCE, INC.
PROSPECTUS
3,657,606 shares of Common Stock
This Prospectus Supplement, together with the Prospectus listed above, is
required to be delivered by certain holders of the above-referenced shares or by
their transferees, pledges, donees or their successors in connection with the
offer and sale of the above-referenced shares.
This Prospectus Supplement supplements our 424(b)(3) prospectus dated
August 12, 2005, as filed with the Securities and Exchange Commission on August
22, 2005, with the following additions and changes:
1) Update our prospectus dated August 12, 2005 with the attached
following document:
a. Financial Information for the three and six month periods ended:
June 30, 2005 and June 30, 2004
The attached information modifies and supersedes, in part, the information in
the prospectus. Any information that is modified or superseded in the prospectus
shall not be deemed to constitute a part of the prospectus except as modified or
superseded by this Prospectus Supplement.
INDEX TO FILINGS
Annex
Financial Information for the three and six month periods
ended: June 30, 2005 and June 30, 2004 A
Bio-Bridge Science, Inc. Page
Index to Financial Statements
Balance Sheet as of December 31, 2004 and June 30, 2005
(unaudited) 3
Unaudited Statements of Operations for the three and six month periods
ended June 30, 2005 and June 30, 2004 4
Unaudited Statements of Changes in Shareholders' Equity for the
period from February 11, 2002 (inception) through June
30, 2005 5
Unaudited Statements of Cash flows for the six month periods
ended June 30, 2005 and June 30, 2004 6
Notes to Unaudited Financial Statements 7
2
FINANCIAL STATEMENTS
BIO-BRIDGE SCIENCE, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, June 30,
ASSETS 2004 2005
----------- -----------
(UNAUDITED)
CURRENT ASSETS
Cash and cash equivalents $ 495,805 $ 487,159
Prepaid expenses and other current assets 19,538 44,824
Land use right, current portion 15,783 15,783
----------- -----------
Total Current Assets 531,126 547,766
NOTE RECEIVABLE, NET OF DISCOUNT 37,893 38,459
ADVANCE TO A CONSTRUCTION CONTRACTOR 362,472 18,124
FIXED ASSETS, NET 18,599 29,169
CONSTRUCTION IN PROGRESS 81,133 432,731
LAND USE RIGHT, NET OF CURRENT PORTION 355,111 347,220
----------- -----------
TOTAL ASSETS $ 1,386,334 $ 1,413,469
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accrued expenses and other payables $ 67,143 78,923
----------- -----------
Total current liabilities 67,143 78,923
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Common stock, $0.001 par value, 100,000,000 shares
authorized,
30,841,590 and 30,271,590 shares issued and
outstanding, respectively 30,272 30,842
Additional paid-in capital 2,995,342 3,279,772
Prepaid consulting expense (390,890) (223,366)
Accumulated other comprehensive loss (1,600) (1,600)
Deficit accumulated during the development stage (1,313,933) (1,751,102)
----------- -----------
Total Shareholders' Equity 1,319,191 1,334,546
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,386,334 $ 1,413,469
=========== ===========
The accompanying notes are an integral part of these financial statements.
3
BIO-BRIDGE SCIENCE, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSS FOR THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2005
AND 2004, AND FOR THE PERIOD FROM FEBRUARY 11, 2002 (INCEPTION)
THROUGH JUNE 30, 2005
For the Period From
February 11, 2002
(Inception) Through
Three months ended June 30, Six months ended June 30, June 30, 2005
------------------------------- ------------------------------- ------------
2005 2004 2005 2004
------------ ------------ ------------ ------------
REVENUE $ -- $ -- $ -- $ -- $ --
Research and development costs (19,292) -- (20,792) (8,000) (161,366)
General and Administrative Expenses (219,591) (58,654) (417,745) (233,331) (1,592,061)
------------ ------------ ------------ ------------ ------------
LOSS FROM OPERATIONS (238,883) (58,654) (438,537) (241,331) (1,753,427)
OTHER INCOME/(LOSS) 679 132 1,368 (192) 4,621
LOSS ON SALE OF INVESTMENT -- -- -- -- (2,296)
------------ ------------ ------------ ------------ ------------
NET LOSS (238,204) (58,522) (437,169) (241,523) (1,751,102)
FOREIGN CURRENCY TRANSLATION LOSS 1 11 -- (19) (1,600)
------------ ------------ ------------ ------------ ------------
COMPREHENSIVE LOSS $ (238,203) $ (58,511) $ (437,169) $ (241,542) $ (1,752,702)
============ ============ ============ ============ ============
LOSS PER SHARE, BASIC AND DILUTED
$ (0.01) $ -- $ (0.01) $ (0.01)
============ ============ ============ ============
WEIGHTED AVERAGE SHARES OUTSTANDING,
BASIC AND DILUTED 30,487,744 28,283,458 30,380,264 27,584,547
============ ============ ============ ============
The accompanying notes are an integral part of these financial statements.
4
BIO-BRIDGE SCIENCE, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES
IN SHAREHOLDERS' EQUITY FOR THE PERIOD FROM FEBRUARY 11, 2002
(INCEPTION) THROUGH JUNE 30, 2005
Deficit
Accumulated Accumulated
Additional Prepaid Other During the
Common Stock Paid-in Consulting Comprehensive Development
Shares Amount Capital Expense Loss Stage Total
----------- ----------- ----------- ----------- ----------- ----------- -----------
Issuance of 13,750,000
shares at $0.00004 13,750,000 $ 13,750 $ (13,200) $ -- $ -- $ -- $ 550
Issuance of 7,461,090
shares at $0.0468 7,461,090 7,461 341,719 -- -- -- 349,180
Issuance of 1,875,000
shares at $0.12 1,875,000 1,875 223,125 -- -- -- 225,000
Foreign currency
translation loss -- -- -- -- (499) -- (499)
Net loss -- -- -- -- -- (114,476) (114,476)
----------- ----------- ----------- ----------- ----------- ----------- -----------
BALANCE DECEMBER 31, 2002 23,086,090 23,086 551,644 -- (499) (114,476) 459,755
Issuance of 3,508,425
shares at $0.12 3,508,425 3,509 417,502 -- -- -- 421,011
Issuance of 201,200 shares
at $0.32 201,200 201 64,186 -- -- -- 64,387
Foreign currency
translation loss -- -- -- -- (644) -- (644)
Net loss -- -- -- -- -- (255,020) (255,020)
----------- ----------- ----------- ----------- ----------- ----------- -----------
BALANCE DECEMBER 31, 2003 26,795,715 26,796 1,033,332 -- (1,143) (369,496) 689,489
Issuance of 434,600 shares
at $0.12 434,600 435 51,715 -- -- -- 52,150
Issuance of 1,125,275
shares at $0.32 1,125,275 1,125 358,961 -- -- -- 360,086
Issuance of 1,616,000
shares at $0.5 1,616,000 1,616 806,382 -- -- -- 807,998
Fair market value of Stock
options granted for services -- -- 695,052 -- -- -- 695,052
Fair value of shares
issued for services 100,000 100 49,900 -- -- -- 50,000
Exercise of options 200,000 200 -- -- -- -- 200
Deferred compensation -- -- -- (390,890) -- -- (390,890)
Foreign currency
translation loss -- -- -- -- (457) -- (457)
Net loss -- -- -- -- -- (944,437) (944,437)
----------- ----------- ----------- ----------- ----------- ----------- -----------
BALANCE DECEMBER 31, 2004 30,271,590 30,272 2,995,342 (390,890) (1,600) (1,313,933) 1,319,191
Issuance of 570,000 shares
at $0.5 (unaudited) 570,000 570 284,430 -- -- -- 285,000
Amortization of deferred
compensation (unaudited) -- -- -- 167,524 -- -- 167,524
Net loss (unaudited) -- -- -- -- -- (437,169) (437,169)
----------- ----------- ----------- ----------- ----------- ----------- -----------
BALANCE JUNE 30, 2005
(unaudited) 30,841,590 $ 30,842 $ 3,279,772 $ (223,366) $ (1,600) $(1,751,102) $ 1,334,546
=========== =========== =========== =========== =========== =========== ===========
The accompanying notes are an integral part of these financial statements.
5
BIO-BRIDGE SCIENCE, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR SIX MONTHS ENED JUNE 30, 2005 AND 2004, AND FOR THE PERIOD FROM
FEBRUARY 11, 2002 (INCEPTION) THROUGH JUNE 30, 2005
For the Period From
February 11, 2002
(Inception) Through June
For Six Months Ended June 30, 30, 2005
----------------------------- ------------------------
2005 2004
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (437,169) $ (241,523) $(1,751,102)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation 2,869 1,547 8,679
Amortization of land use right 7,891 19 31,557
Amortization of prepaid consulting expenses 167,524 -- 471,686
Stock issued for services -- -- 50,550
Loss on sale of investment -- -- 2,296
Increase (decrease) in prepaid expenses and other assets (7,729) 10,108 2,544
Increase in accrued expenses and other payables 11,779 10,453 78,923
----------- ----------- -----------
Net Cash Used In Operating Activities (254,835) (219,396) (1,104,867)
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of land use right -- (394,559)
Increase in constructions in progress (351,597) (34,912) (432,730)
Purchase of fixed assets (13,439) (1,348) (37,848)
Purchase of investment -- (40,000)
Advance to a construction contractor 326,224 -- (36,248)
----------- ----------- -----------
Net Cash Used In Investing Activities (38,812) (36,260) (941,385)
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of common stock 285,000 1,240,234 2,535,012
----------- ----------- -----------
Net Cash Provided By Financing Activities
285,000 1,240,234 2,535,012
----------- ----------- -----------
EFFECT OF EXCHANGE RATE CHANGES ON CASH 1 (20) (1,601)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (8,646) 984,558 487,159
-----------
Cash and cash equivalents, beginning of period 495,805 220,291
----------- ----------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 487,159 $ 1,204,849 $ 487,159
=========== =========== ===========
SUPPLEMENTAL CASH FLOW INFORMATION
Interest Paid $ -- $ -- $ --
=========== =========== ===========
Income taxes Paid $ -- $ -- $ --
=========== =========== ===========
The accompanying notes are an integral part of these financial statements.
6
BIO-BRIDGE SCIENCE, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS AS OF JUNE 30, 2005
NOTE 1 - BASIS OF PRESENTATION
The unaudited condensed consolidated financial statements of Bio Bridge Science
Inc. (the "Company") have been prepared in accordance with generally accepted
accounting principles for interim financial information and pursuant to the
requirements for reporting on Form 10-QSB and Item 310(b) of Regulation S-B.
Accordingly, they do not include all the information and footnotes required by
accounting principles generally accepted in United States of America for
complete financial statements. However, such information reflects all
adjustments (consisting solely of normal recurring adjustments), which are, in
the opinion of management, necessary for the fair presentation of the
consolidated financial position and the consolidated results of operations.
Results shown for interim periods are not necessarily indicative of the results
to be obtained for a full fiscal year. The condensed consolidated balance sheet
information as of December 31, 2004 was derived from the audited consolidated
financial statements included in the Company's Registration Statement Form SB -
2. These interim financial statements should be read in conjunction with that
report.
NOTE 2 - NATURE OF COMPANY
Bio-Bridge Science, Inc. (a development stage company) ("the Company") was
incorporated in the State of Delaware on October 26, 2004 to serve as a vehicle
to effect an exchange of capital stock with Bio-Bridge Science Corporation, a
Cayman Islands corporation, to redomicile from the Cayman Islands to Delaware.
The Company's fiscal year end is December 31.
The Company is a development stage enterprise as defined by Statement of
Financial Accounting Standards (SFAS) No. 7, "Accounting and Reporting by
Development Stage Enterprises." All losses accumulated since the inception of
the Company will be considered as part of the Company's development stage
activities. The Company has not commenced revenue generating activities.
On December 1, 2004, the Company acquired all of the outstanding shares of
Bio-Bridge Science Corporation ("BBSC"), a Cayman Islands corporation, in
exchange for 29,971,590 shares of its common stock, and as a result, BBSC became
a wholly owned subsidiary of Bio-Bridge Science, Inc. BBSC was incorporated in
the Cayman Islands on February 11, 2002. At the time of the exchange, BBSC held
a 100% interest in Bio-Bridge Science (Beijing) Corp. ("BBS Beijing") a
wholly-foreign funded enterprise of the People's Republic of China ("PRC") which
was established on May 20, 2002. Bio-Bridge Science (Beijing) has been issued an
operating license for 25 years, which can be renewed for an additional 25-year
term for a nominal fee. BBS Beijing is currently engaged in the development and
commercialization of the HIV-PV vaccine, I in mainland China.
The acquisition was accounted for as a reverse merger (recapitalization) with
Bio-Bridge Science Corporation deemed to be the accounting acquirer, and
Bio-Bridge Science Inc. deemed to be the legal acquirer. Accordingly, the
historical financial information presented in the financial statements is that
of Bio-Bridge Science Corporation as adjusted to give effect to any difference
in the par value of the issuer's and the accounting acquirer's stock with an
offset to capital in excess of par value. The basis of the assets, liabilities
and retained earnings of BBSC, the accounting acquirer, have been carried over
in the recapitalization.
NOTE 3 - GOING CONCERN
The accompanying condensed consolidated financial statements have been prepared
on the basis that the Company will continue as a going concern which assumes the
realization of assets and settlement of liabilities in the normal course of
business. Since its inception, the Company has been engaged in organizational
and pre-operating activities. Furthermore, the Company has generated no revenue
and has incurred accumulated losses and negative operating cash flows of
$1,751,102 and $1,104,867, respectively, since inception. Continuation of the
Company's existence is dependent upon its ability to obtain additional capital
and sustain profitable operations.
7
The uncertainty related to these conditions raises substantial doubt about the
Company's ability to continue as going concern. The accompanying condensed
consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
During the next 12 months, the Company intends to raise capital through an
offering of its securities or from loans to continue research and development of
HIV-PV Vaccine I in China as well as complete the construction of its laboratory
in China. The Company has no current arrangements for obtaining the additional
cash and working capital it may require, and will seek to raise it through the
public or private sales of its securities, or loans, or a combination of the
foregoing. The Company cannot guarantee financing will be available, on
acceptable terms or at all. At this time, the Company is unable to determine
when the HIV-PV Vaccine I will become fully developed manufactured and sold. The
Company does not expect to generate any significant revenues in the next 12
months. If the Company fails to obtain other financing, either through an
offering of our securities or by obtaining additional loans, we may be unable to
maintain our operations.
NOTE 4 - ECONOMIC AND POLITICAL RISKS
The Company faces a number of risks and challenges since its operation is in PRC
and its primary market is in the PRC. We have operations in China, where we are
currently engaged in pre-clinical testing of our HIV-PV Vaccine I product. Our
business operations may be adversely affected by the political environment in
the PRC. The PRC has operated as a socialist state since 1949 and is controlled
by the Communist Party of China. In recent years, however, the government has
introduced reforms aimed at creating a "socialist market economy" and policies
have been implemented to allow business enterprises greater autonomy in their
operations. Changes in the political leadership of the PRC may have a
significant effect on laws and policies related to the current economic reforms
program, other policies affecting business and the general political, economic
and social environment in the PRC, including the introduction of measures to
control inflation, changes in the rate or method of taxation, the imposition of
additional restrictions on currency conversion and remittances abroad, and
foreign investment. These effects could substantially impair our business,
profits or prospects in China. Moreover, economic reforms and growth in the PRC
have been more successful in certain provinces than in others, and the
continuation or increases of such disparities could affect the political or
social stability of the PRC.
NOTE 5 - USE OF ESTIMATES
The preparation of the condensed consolidated financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the condensed consolidated financial statements, and expenses during the
reporting periods. Actual results when ultimately realized could differ from
those estimates.
NOTE 6 - LOSS PER SHARE
Basic loss per share has been computed using the weighted average number of
common shares outstanding during the corresponding periods. Diluted loss per
share is computed based on the weighted average number of common shares and all
common equivalent shares outstanding during the periods in which they are
dilutive. Common equivalent shares consist of shares issuable upon the exercise
of stock options (using the treasury stock method) or warrants. As of June 30,
2005 common stock equivalents consist of 1,192,675 options that each convert
into one share of the Company's common stock. For the three months and six
months ended June 30, 2005 and 2004, common equivalent shares have been excluded
from the calculation of loss per share as their effect is anti-dilutive.
8
NOTE 7 - FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying value of financial instruments including cash and cash equivalents,
note receivable, prepaid expenses and other current assets, accrued expenses and
other payables, approximates their fair value at June 30, 2005 and December 31,
2004 due to the relatively short-term nature of these instruments.
NOTE 8 - FOREIGN CURRENCY CONVERSION
The Company's financial information is presented in US dollars. The functional
currency Renminbi (RMB) of the Company is translated into United States dollars
from RMB at quarter / year-end exchange rates as to assets and liabilities and
average exchange rates as to revenues and expenses. Capital accounts are
translated at their historical exchange rates when the capital transactions
occurred.
2005 2004
------ ------
Quarter / Year end RMB : US$ exchange rate 8.2765 8.2765
Average yearly RMB : US$ exchange rate 8.2765 8.2766
The RMB is not freely convertible into foreign currency and all foreign exchange
transactions must take place through authorized institutions. No representation
is made that the RMB amounts could have been, or could be, converted into US
dollars at the rates used in translation.
On July 22, 2005, Renminbi rose approximately 2 percent against the US dollar at
the exchange rate of 8.11 to 1.
NOTE 9 - SHAREHOLDER'S EQUITY
On December 1, 2004, the Company issued to Columbia China Capital Group, Inc. an
option to purchase 1,342,675 shares of common stock at $.001 per share to be
exercised within a three-year period in consideration for financial consulting
services to be provided over a two year period. The options granted were granted
outside the Company's stock option plan. On December 1, 2004, 200,000 of these
options were exercised. The options were valued at their fair value of $670,098
at the date of grant, which was determined by the Black-Scholes valuation method
using the following assumptions: no expected dividend yield; risk-free interest
rates of 3.4%; expected lives of 3 years; and estimated volatility of 85% based
on recent history of the stock price in the industry. The value of the options
issued was capitalized by the company as a prepaid consulting fee and is being
amortized over the two year term of the service agreement. During the six months
ended June 30, 2005, $167,524 of this amount was amortized and included in the
accompanying statement of operations, and the remaining unamortized amount of
$223,366 was reflected as prepaid consulting costs in the accompanying statement
of changes in shareholders' equity as of June 30, 2005. The option values are
recalculated at the end of each quarter until the services are complete. During
the six months ended June 30, 2005, there have been new issuances of 570,000
shares of common stock at $0.5 per share. All the external conditions and
assumptions used in the Black-Scholes valuation method remain unchanged.
Therefore the Company believes there is no change in the valuation of the
carrying stock options as of June 30, 2005.
The following represents transactions involving the purchases of the Company's
common stock for cash categorized by period (for the period from the date of
inception to June 30, 2005):
2002:
ISSUANCE OF 13,750,000 SHARES AT $0.00004 FOR TOTAL CONSIDERATION OF $550
o At inception, 13,750,000 shares of common stock were issued for a total
cash payment of $550.
ISSUANCE OF 7,461,090 SHARES AT $0.0468 FOR TOTAL CONSIDERATION OF
$349,180
o On July 15, 2002, 1,675,000 shares were issued to two individuals for a
total cash payment of $78,390.
o On July 19, 2002, 2,125,000 shares were issued for a cash payment of
$99,450.
o On June 27, 2002, 786,090 shares were issued for a cash payment of
$36,790.
9
o On November 8, 2002, 2,875,000 shares were issued to 9 individuals for a
total cash payment of $134,550.
ISSUANCE OF 1,875,000 SHARES AT $0.12 FOR TOTAL CONSIDERATION OF $225,000
o On September 6, 2002, 375,000 shares of common stock were issued for a
cash payment of $45,000.
o On November 8, 2002, 250,000 shares were issued for a cash payment of
$30,000.
o On November 12, 2002, 1,250,000 shares were issued to five individuals for
a total cash payment of $150,000. 2003:
ISSUANCE OF 3,508,425 SHARES AT $0.12 FOR TOTAL CONSIDERATION OF $421,011
o On July 14, 2003, 250,000 shares were issued for a cash payment of
$30,000.
o On July 28, 2003, 75,000 shares were issued for a cash payment of $9,000.
o On July 29, 2003, 291,750 shares were issued for a cash payment of
$35,010.
o On August 7, 2003, 50,000 shares were issued to two individuals for a
total cash payment of $6,000.
o On September 2, 2003, 125,000 shares were issued for a cash payment of
$15,000.
o On September 3, 2003, 1,500,000 shares were issued for a cash payment of
$180,000.
o On September 12, 2003, 83,350 shares were issued for a cash payment of
$10,001.
o On November 5, 2003, 883,325 shares were issued to two individuals for a
total cash payment of $106,000.
o On December 31, 2003, 250,000 shares were issued for $30,000. This amount
was recorded as subscription receivable by the Company as of December 31,
2003 and subsequently collected on January 5, 2004.
ISSUANCE OF 201,200 SHARES AT $0.32 FOR TOTAL CONSIDERATION OF $64,387
o On October 20, 2003, 93,750 shares were issued to two individuals for a
total cash payment of $30,000.
o On November 5, 2003, 28,025 shares were issued for a cash payment of
$8,977.
o On November 6, 2003, 25,000 shares were issued for a cash payment of
$8,000.
o On November 12, 2003, 23,175 shares were issued to three individuals for a
total cash payment of $7,410.
o On December 18, 2003, 31,250 shares were issued for a cash payment of
$10,000.
NOTE 9 - SHAREHOLDER'S EQUITY (CONTINUED)
2004:
ISSUANCE OF 434,600 SHARES AT $0.12 FOR TOTAL CONSIDERATION OF $52,150
o On March 25, 2004, 434,600 shares were issued to three individuals for a
total cash payment of $52,150.
ISSUANCE OF 1,125,275 SHARES AT $0.32 FOR TOTAL CONSIDERATION OF $360,086
o On January 26, 2004, 12,500 shares of common stock were issued for a cash
payment of $4,000.
o On January 30 2004, 14,750 shares were issued for a cash payment of
$4,720.
o On February 18, 2004, 31,250 shares were issued for a cash payment of
$10,000.
o On March 5, 2004, 14,175 shares were issued for a cash payment of $4,540.
o On March 15, 2004, 23,375 shares were issued to three individuals for a
total cash payment of $7,480.
o On March 17, 2004, 15,625 shares were issued for a cash payment of $5,000.
o On March 26, 2004, 46,875 shares were issued to two individuals for a
total cash payment of $15,000.
o On March 31, 2004, 31,250 shares were issued for a cash payment of
$10,000.
o On April 2, 2004, 31,250 shares were issued for a cash payment of $10,000.
o On April 6, 2004, 31,250 shares were issued for a cash payment of $10,000.
10
o On April 28, 2004, 57,500 shares were issued for a cash payment of
$18,400.
o On April 30, 2004, 251,725 shares were issued to ten individuals for a
total cash payment of $80,546.
o On May 11, 2004, 50,000 shares were issued to two individuals for a total
cash payment of $16,000.
o On May 15, 2004, 13,750 shares were issued for a cash payment of $4,400.
o On May 28, 2004, 500,000 shares were issued for a cash payment of
$160,000.
ISSUANCE OF 1,616,000 SHARES AT $0.50 FOR TOTAL CONSIDERATION OF $807,998
o On May 31, 2004, 20,000 shares were issued for a cash payment of $10,000.
o On June 1, 2004, 240,000 shares were issued to three individuals for a
total cash payment of $120,000.
o On June 4, 2004, 85,000 shares were issued to four individuals for a total
cash payment of $42,498.
o On June 5, 2004, 81,000 shares were issued to three individuals for a
total cash payment of $40,500.
o On June 7, 2004, 80,000 shares were issued to four individuals for a total
cash payment of $40,000.
o On June 8, 2004, 40,000 shares were issued to two individuals for a total
cash payment of $20,000.
o On June 9, 2004, 60,000 shares were issued to two individuals for a total
cash payment of $30,000.
o On June 11, 2004, 140,000 shares were issued to six individuals for a
total cash payment of $70,000.
o On June 12, 2004, 60,000 shares were issued to two individuals for a total
cash payment of $30,000.
o On June 13, 2004, 20,000 shares were issued for a cash payment of $10,000.
o On June 14, 2004, 260,000 shares were issued to nine individuals for a
total cash payment of $130,000.
o On June 15, 2004, 530,000 shares were issued to twelve individuals for a
total cash payment of $265,000.
Other Capital Stock Transactions
On December 1, 2004, the Company issued 100,000 shares of its common stock and
an option to purchase an additional 50,000 shares of its common stock at $.001
per share to Richardson & Patel, LLC in consideration for legal services. The
shares issued were valued at $50,000, their fair value at the date of issuance.
The options granted were valued at $24,954 at the date of grant, which was
determined by the Black-Scholes valuation method, using the following
assumptions: no expected dividend yield; risk-free interest rates of 3.4%;
expected lives of 3 years; and estimated volatility of 85 percent based on
recent history of the stock price in the industry.
On December 1, 2004, 200,000 shares of common stock were issued at $0.001 per
share for a cash payment of $200 from an exercise of stock options.
2005:
ISSUANCE OF 570,000 SHARES AT $0.5 FOR TOTAL CONSIDERATION OF $285,000
o On April 22, 2005, 20,000 shares were issued to one individual for a total
cash payment of $10,000.
o On May 9, 2005, 100,000 shares were issued to one individual for a cash
payment of $50,000.
o On May 10, 2005, 100,000 shares were issued to one individual for a cash
payment of $50,000.
o On May 20, 2005, 100,000 shares were issued to one individual for a total
cash payment of $50,000.
11
o On June 6, 2005, 60,000 shares were issued to one individual for a total
cash payment of $30,000.
o On June 13, 2005, 50,000 shares were issued to two individuals for a total
cash payment of $25,000.
o On June 15, 2005, 40,000 shares were issued to one individual for a total
cash payment of $20,000.
o On June 20, 2005, 100,000 shares were issued to two companies for a total
cash payment of $50,000.
NOTE 10 - COMMITMENTS AND CONTINGENCIES
Construction commitment
In May 2003, the Company acquired a land use right for approximately 2.8 acres
of land in the Tianzhu Export Processing Zone, Shunyi District, Beijing, China,
which the Company plans to develop into a laboratory and biomanufacturing
facility in compliance with Good Manufacturing Practices, or GMP, regulations
primarily for clinical trials of HIV-PV Vaccine I. As of June 30, 2005, the
Company has received all necessary permits and approvals and construction of the
facility had commenced. The outside main body of the GMP laboratory has been
completed as of June 30, 2005. The Company has entered into a construction
contract relating to the completion for this facility. As of June 30, 2005 a
payment of $362,472 has been made to this contractor (of which, $18,124 remains
prepaid), and has a further outstanding commitment under this contract of
$362,472. The Company estimates that the cost of the building and outfitting of
this facility is $3,000,000, of which $ 2,600,000 remains to be funded as of
June 30, 2005, and the construction and installation of equipment related to the
facility will be substantially completed by October 2005. As of June 30, 2005
and December 31, 2004 total construction in progress amounted to $432,731 and
$81,133, respectively.
Note 11 - Subsequent Event.
Subsequent to June 30, 2005, the Company raised $571,100 through the sale of
1,142,200 shares of common stock pursuant to Regulation S.
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