UNITED STATES
SECURITIES 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 November 30, 2003
EVOLVE ONCOLOGY INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 13-4047693
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
151 South Ferry Quay
Liverpool, Merseyside L3 4EW
- ---------------------------------------- ---------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number +44 (0) 151 707 7898
Check here whether the issuer (1) has filed all reports required to be filed by
Sections 13 or 15(d) of the Securities 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 |_| No |X|
As of October 31, 2005, the following shares of the Registrant's common stock
were issued and outstanding:
48,763,098 shares of voting common stock
INDEX
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED STATEMENTS OF OPERATIONS
STATEMENT OF CASH FLOWS
Note 1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
Note 2. BASIS OF PRESENTATION
Note 3. GOING CONCERN
Note 4. HISTORIC SHARE ISSUES
Item 2. Management's Discussion And Analysis or Plan of Operations
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults upon Senior Securities
Item 4. Submission of Matters to a Vote of
Security Holders
Item 5. Other information
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
2
ITEM 1
Financial Statements
EVOLVE ONCOLOGY INC.
CONSOLIDATED BALANCE SHEETS
As of
November 30,
2003
(Unaudited)
ASSETS $
Accounts receivable 327
--------
Total current assets 327
--------
TOTAL ASSETS 327
========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable 527,451
Accrued expenses and other liabilities 25
Note payable - Related Party 4,569
--------
Total Current Liabilities 532,045
--------
TOTAL Liabilities 532,045
STOCKHOLDERS' EQUITY
Common stock, authorized 25,000,000
shares of $0.001 par value;
Issued and outstanding 16,931,492 shares 16,931
Accumulated other comprehensive income/loss (18,260)
Additional paid-in capital 262,150
Accumulated deficit (792,539)
--------
Total stockholders' deficit/surplus (531,718)
--------
Total liabilities and stockholders' equity 327
========
The accompanying notes are an integral part of these financial statements
3
EVOLVE ONCOLOGY INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
From inception
Nine Months Nine Months Three Months Three Months February 15, 2001
Ended November Ended November Ended November Ended November to November 30,
30, 2003 30, 2002 30, 2003 30, 2002 2003
Revenue $ 0 0 0 0 0
------------ ------------ ------------ ------------ ------------
Operating expenses
Research and development 133,016 14,133 1,496 14,583 200,104
General and administrative 461,792 75,460 336,669 58,417 592,435
------------ ------------ ------------ ------------ ------------
Total Expenses 594,808 89,593 338,165 73,000 792,539
------------ ------------ ------------ ------------ ------------
Other income (expenses)
------------ ------------ ------------ ------------ ------------
0 0 0 0 0
------------ ------------ ------------ ------------ ------------
Income (Loss) form operations before
taxes (594,808) (89,593) (338,165) (73,000) (792,539)
Taxes 0 0 0 0 0
------------ ------------ ------------ ------------ ------------
Net Income (Loss) $ (594,808) (89,593) (338,165) (73,000) (792,539)
============ ============ ============ ============ ============
The computation of earning (loss) per share of common stock is
based on the weighted average number of shares outstanding at
the date of the financial statements
Per Share Amount (0.04) (44,797) (0.02) (36,500)
------------ ------------ ------------ ------------
Shares (demoninator) 16,756,492 2 16,756,492 2
============ ============ ============ ============
The accompanying notes are an integral part of these financial statements.
A summary of the components of other comprehensive loss for the quarter ended
November 30, 2003 and 2002 as follows:
November 30, 2003 November 30, 2002
Net (loss) (594,808) (89,593)
Foreign currency translation gain (loss) (12,702) 0
------------------------- -----------------------
Comprehensive (loss) (607,510) (89,593)
4
EVOLVE ONCOLOGY INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
From inception
--------------
For the Nine For the Nine February 15,
------------ ------------ ------------
Months Ended Months Ended 2001 through
------------ ------------ ------------
November 30, November 30, November 30,
------------ ------------ ------------
2003 2002 2003
---- ---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(594,808) $(59,430) $(792,539)
Adjustments to reconcile net loss to net cash
(used in) operating activities:
Changes in operating assets and liabilities:
Accounts payable and accrued liabilities 340,442 59,428 527,149
--------------------- --------------------- -----------------------
Net Cash (Used in) Operating Activities (254,366) (2) (265,390)
--------------------- --------------------- -----------------------
CASH FLOWS FROM INVESTING ACTIVITIES: - - -
--------------------- --------------------- -----------------------
Net Cash Used in Investing Activities - - -
--------------------- --------------------- -----------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from related party note payable 4,569 - 4,569
Proceeds from issuance of common stock 262,499 2 279,081
--------------------- --------------------- -----------------------
Net Cash Provided by Financing Activities 267,068 2 283,650
--------------------- --------------------- -----------------------
EFFECT OF CURRENCY EXCHANGE RATE CHANGES
ON CASH AND CASH EQUIVALENTS (12,702) - (18,260)
--------------------- --------------------- -----------------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS - - -
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD - - -
--------------------- --------------------- -----------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $- $- $-
===================== ===================== =======================
SUPPLEMENTAL CASH FLOW INFORMATION
CASH PAID FOR:
Interest $- $- $-
Income taxes $- $- $-
The accompanying notes are an integral part of these financial statements.
5
EVOLVE ONCOLOGY INC.
NOTES TO FINANCIAL STATEMENTS
November 30, 2003
NOTE 1 - NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
A. NATURE OF BUSINESS
During the quarter to 30 November 2003, Evolve Oncology Inc. ("the Company")
conducted its operations through its wholly owned subsidiary, EU Laboratories
Limited, a UK Corporation. The Company is in the business of developing and
commercializing pharmaceutical products.
B. PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company and
its wholly owned subsidiary, EU Laboratories Limited.
On March 1, 2003, the Company, disposed of Corspan Limited, New Media North
Limited, High Low Global Systems Inc, and Total Print Solutions Limited to the
shareholders of the Company. The Company then acquired 100% of EU Laboratories
Limited. ("the Acquisition") after conducting a 10 for 1 reverse split of the
then issued and outstanding common stock.
The basic structure and terms of the Acquisition, together with the applicable
effects were that the Company acquired all of the outstanding shares of common
stock of EU Laboratories Limited in exchange for 15,000,000 shares of newly
issued common stock of the Company.
Under accounting principles generally accepted in the United States of America,
the Acquisition is considered to be a business combination. That is, the results
of EU Laboratories Limited have been included in the consolidated financial
statements since the acquisition. Goodwill arising on the acquisition is
recorded at the fair value of the newly issued common stock of the Company less
the fair value of the net assets acquired.
NOTE 2 - BASIS OF PRESENTATION
The financial statements included in this Form 10-QSB have been prepared by us,
without audit. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with accounting principles generally
accepted in the United States of America have been condensed or omitted,
although management believes the disclosures are adequate to make the
information presented not misleading. The results of operations for any interim
period are not necessarily indicative of results for a full year. These
statements should be read in conjunction with the financial statements and
related notes included in the Company's Annual Report on Form 10-KSB for the
period ended February 28, 2003, and the 8K/A filing filed on 30th July, 2003,
the Form 10QSB for the period ending May 31, 2003, and the Form 10QSB for the
period ending August 31, 2003.
The financial statements presented herein, for the three months ended November
30, 2003 and 2002 reflect, in the opinion of management, all material
adjustments consisting only of normal recurring adjustments necessary for a fair
presentation of the financial position, results of operations and cash flow for
the interim periods.
6
EVOLVE ONCOLOGY INC.
NOTES TO FINANCIAL STATEMENTS
November 30, 2003
NOTE 3 - GOING CONCERN
The financial statements have been prepared on a basis that contemplates the
Company's continuation as a going concern and the realization of our assets and
liquidation of our liabilities in the ordinary course of business. We have an
accumulated deficit of $792,539 at November 30, 2003, and negative working
capital of $531,718 at November 30, 2003. These matters, among others, raise
substantial doubt about our ability to remain a going concern for a reasonable
period of time. The financial statements do not include any adjustments relating
to the recoverability or classification of assets or the amounts and
classification of liabilities that might result from the outcome of this
uncertainty. The Company's continued existence is dependent on its ability to
obtain additional financing sufficient to allow it to meet its current
obligations and to achieve profitable operations and the Company is actively
pursuing further funding.
NOTE 4. NOTES PAYABLE
At November 30, 2003 notes payable consisted of the following:
2003 2002
Note payable to a Bioaccelerate Inc, a related party. There is no maturity date
in place but a maturity date takes effect in the event of certain conditions
coming into being as set out in the loan agreement. The outstanding amount bears
interest per annum at the Applicable Federal Rate. Certain assets and
subsequently acquired assets of the company have been pledged to secure
repayment of any outstanding amount. There is no provision for any outstanding
amount to be converted into any form of share capital of the company.
$ 4,569 $ -
Total Notes payable ----------- -----------
$ 4,569 $ -
=========== ===========
NOTE 5. COMMON STOCK
In April, 1997 we issued 4,000,000 shares of common stock to investors. These
shares were valued at $.001 per share.
In January, 1999 we issued 3,998,998 shares of common stock to investors. These
shares were valued at $.001 per share.
In February, 1999 we issued 2,000,000 shares of common stock to investors. These
shares were valued at $.01 per share.
7
EVOLVE ONCOLOGY INC.
NOTES TO FINANCIAL STATEMENTS
November 30, 2003
NOTE 5. COMMON STOCK (continued)
In March 2001, we issued 13,500,000 in acquiring ICM Resources Limited. These
shares were valued at $0.001 per share.
In May 2002, we issued 190,000 shares of common stock in acquiring Total Print
Solutions Limited. These shares were valued at $3.00 per share.
In July 2002, we issued 450,000 shares of common stock in acquiring High Low
Global Systems Inc. These shares were valued at $3.60 per share
In July 2002, we issued 46,920 shares of common stock in acquiring Campaign
Network Limited. These shares were valued at $3.60 per share
In October 2002, we issued 64,000 shares of common stock, 32,000 shares to each
of two individuals
In March 2003, we issued 15,000,000 shares of common stock in acquiring EU
Laboratories. These shares were valued at $0.001 per share
In November 2003, we issued 350,000 shares of common stock to consultants for
work performed. These shares were valued at $0.75 per share
In November 2003, we issued 4,500,000 shares of common stock in acquiring
Antibody Technologies. These shares were valued at $3.55 per share
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
RESULTS OF OPERATIONS
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this Form 10-QSB, including information set forth under
this item 2. "Management's Discussion and Analysis of Financial Condition and
Results of Operations" constitute "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995 (the "Act"). We
desire to avail ourselves of certain "safe harbor" provisions of the Act and are
therefore including this special note to enable us to do so. Forward-looking
statements included in this Form 10-QSB or hereafter included in other publicly
available documents filed with the Securities and Exchange Commission, reports
to our stockholders and other publicly available statements issued or released
by us involve unknown risks, uncertainties, and other factors which could cause
our actual results, performance (financial or operating), or achievements to
differ from the future results, performance (financial or operating), or
achievements expressed or implied by such forward looking statements. Such
future results are based upon our best estimates based upon current conditions
and the most recent results of operations.
LIQUIDITY
To date, we have incurred significant net operating losses. We anticipate that
we may continue to incur significant operating losses for some time. We have an
accumulated deficit of $792,539 at November 30,2003, and negative working
capital of $531,718 at November 30,2003. These matters, among others, raise
substantial doubt about our ability to remain a going concern.
8
We must immediately raise significant capital to enable us to meet our current
obligations and to fund our current operations until we are to become
profitable. Profitability is dependent upon our ability to generate sufficient
sales from second-generation services. Our existence is dependent on our ability
to obtain the necessary financing.
The financial statements do not include any adjustments relating to the
recoverability or classification of assets or the amounts and classification of
liabilities that might result from the outcome of this uncertainty.
The company is currently seeking financing through private placements. The
company hopes to raise significant proceeds through this medium, which will be
used to fund develop of its products, the acquisition of new products and
operating expenses. The Company is actively reviewing various avenues to raise
capital and we are currently visiting with and meeting a number of potential
investors.
We have insufficient relevant operating history upon which an evaluation of our
performance and prospects can be made. We are still subject to all of the
business risks associated with a new enterprise, including, but not limited to,
risks of current and unforeseen capital requirements, lack of fully-developed
products, failure of market acceptance, failure to establish business
relationships, reliance on outside contractors for the manufacture and
distribution, and competitive disadvantages against larger and more established
companies. The likelihood of our success must be considered in light of the
development cycles of new products and technologies and the competitive
environment in which we operate.
Evolve Oncology Inc. is engaged in the business of developing and
commercializing pharmaceutical compounds to fight cancer.
ACQUISITION OF EU LABORATORIES LIMITED.
On March 1, 2003 Evolve Oncology Inc., acquired the total outstanding share
capital of EU Laboratories Ltd. "EU Labs". EU Labs are a UK based company that
develops products to fight cancer.
Disposal of interest in Corspan Limited, New Media North Limited, High Low
Global Sytems Inc, and Total Print Solutions Limited.
On March 1, 2003 Oncthera Inc. disposed of its interest in Limited, New Media
North Limited, High Low Global Sytems Inc, and Total Print Solutions Limited to
the shareholders of Corspan Inc (Now Oncthera Inc). This was done with the
consent of the shareholders, and was felt that the company needed a new change
of direction to give the shareholders a more realistic chance of achieving
value.
There has been significant doubts as to the continuation of Corspan Limited, New
Media North Limited, High Low Global Sytems Inc, and Total Print Solutions
Limited as a print related companies, as the printing market had seen a downturn
in business and overall consumer confidence had fallen to a low.
9
The Directors are of the opinion that the disposal of this interest was required
to progress the Evolve Oncology Inc new strategic plan and remove day to day
operational pressures from the executives of the company allowing them to focus
on the development of the development strategy of Evolve Oncology Inc.
OVERVIEW
The company is currently operating through one wholly owned subsidiary, EU
Laboratories Limited.
EU Laboratories Limited has a limited trading history, and has a current
portfolio of four products aimed at cancer. Onca 011 is a monoclonal antibody
which targets most forms of cancer.
The global cancer market is forecast to grow from $29.4bn in 2001 to $42.8bn in
2007. In this period the innovative cancer therapy market is forecast to triple
from $4.3bn in 2001 to $12.3bn in 2007.The Company's focus on innovative
treatments should benefit from the fact that the leading pharmaceutical
companies in the oncology market will all suffer from multiple patent expiries
in the next four years with existing cytostatic and hormonal therapies. This
creates a clear market opportunity for niche drug discovery companies focusing
on innovative technologies as the large pharmaceutical companies will be looking
to enhance their existing portfolios with new products.
Management believes by focusing on innovative cancer therapies it will be
possible to develop multiple drug candidates. Innovative Oncology will take
development stage candidates which have commercial potential and take these
products through early stage clinical trials to prove efficacy and safety.
Oncthera will then look to license the products to partners who will take the
economic burden of multi center clinical trials. Oncthera will look to license
US rights whilst maintaining the European rights.
Although the US is the single most lucrative market the European market is
extremely valuable. The European market is broken down into five main
marketplaces UK, Germany, France, Italy and Spain. These five marketplaces have
a prevalent patient population of approximately 3.4mn as compared to 3.3mn in
the US (by main disease area excluding skin cancer).Innovative Oncology will
look to establish niche oncology sales forces in these markets whilst licensing
its products in other smaller European territories. Oncthera will also look to
develop niche drugs which large pharmaceutical companies will not develop as
they do not have potential blockbuster status.
SALES
We had no revenues for the quarter ended November 30, 2003.
GROSS PROFIT
Our gross loss for the quarter ending November 30 2003 was attributable to
Operating expenses.
RESEARCH & DEVELOPMENT
Research and Development expenses for the quarter ending November 30, 2003 were
$1,496, as the Company's initial R & D work screening compounds has come to an
end and data is being collated before proceeding with the development of
selected compounds. The Company expects future R & D expenses to be substantial.
10
GENERAL & ADMINISTRATIVE EXPENSES
During quarter ending November 30 2003 we incurred $336,669 in general and
administrative expenses.
OPERATING LOSS
The reported operating loss was by $338,165 in the three month period to 30
November 2003.
NET LOSS
The reported net loss in the period to 30 November 2003 was $338,165 (or $0.02
per share basic and undiluted).
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The directors are not aware of any pending legal proceedings against the
Company.
ITEM 2. CHANGES IN SECURITIES
During the three month period ended 30th November 2003 the Company issued
350,000 shares to consultants on 17 October 2003 at a price of $0.75.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
There has been no default in the payment of principal, interest, sinking or
purchase fund installment.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
There is no other information to report which is material to the Company's
financial condition not previously reported.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8
(a) Exhibits. The following exhibits are filed with this report.
31. Written Statement of Chief Executive Officer and Chief Financial Officer
with respect to compliance with Section 13(a) or 15 (d) of the Securities
Exchange Act of 1934 and Section 302 of the Sarbanes-Oxley Act of 2002.
32. Written Statement of Chief Executive Officer and Chief Financial Officer
with respect to compliance with Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 and pursuant to 18 U.S.C. 1350, as adopted pursuant to ss.
906 of the Sarbanes-Oxley Act of 2002.
(b) A Filing on Form 8K/A was filed on November 7, 2003 changing the Company's
name to Evolve Oncology Inc which is hereby incorporated by reference.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned authorized officers.
Dated: November 18, 2005
Evolve Oncology Inc.
By: /s/ Nigel Rulewski
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Nigel Rulewski
CEO
(Principal Executive Officer)
By: /s/ Alan Bowen
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Alan Bowen
CFO
(Principal Financial Officer)