UNITED STATES
SECURITIES EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB/A
[X] Quarterly Report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended May 31, 2004
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.)
712 Fifth Avenue, New York, NY 10019
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number 646-723-8941
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 February 1, 2006, 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 3
CONSOLIDATED BALANCE SHEETS 3
CONSOLIDATED STATEMENTS OF OPERATIONS 4
STATEMENT OF CASH FLOWS 5
Note 1. BASIS OF PRESENTATION 6
Note 2. GOING CONCERN 6
Note 3. NET LOSS PER COMMON SHARE 7
Note 4. STOCKHOLDERS' EQUITY 7
Item 2. Management's Discussion And Analysis or Plan of Operations 7
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 9
Item 2. Changes in Securities 9
Item 3. Defaults upon Senior Securities 10
Item 4. Submission of Matters to a Vote of Security Holders 10
Item 5. Other information 10
Item 6. Exhibits 10
SIGNATURES 10
2
PART I - FINANCIAL INFORMATION
ITEM 1
Financial Statements
EVOLVE ONCOLOGY INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
May 31,
2004
------------
ASSETS $
Current assets
Accounts receivable 367
------------
Total current assets 367
------------
TOTAL ASSETS 367
============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable 794,505
Related Party payable 27,318
Accrued expenses and other Liabilities 27,543
------------
Total Current Liabilities 849,366
------------
TOTAL LIABILITIES 849,366
------------
STOCKHOLDERS' DEFICIT
Common stock, par value $0.001,
100,000,000 shares authorized,
43,133,098 shares issued and outstanding, retroactively restated 43,133
Additional paid-in capital 17,718,948
Accumulated deficit (18,537,706)
Accumulated other comprehensive income/(loss) (73,374)
------------
TOTAL STOCKHOLDERS' DEFICIT (848,999)
------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT 367
============
The accompanying notes are an integral part of these financial statements.
3
EVOLVE ONCOLOGY INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
From inception
Three Months Ended Three Months Ended February 15, 2001 to
May 31, 2004 May 31, 2003 May 31, 2004
Revenue $ -- -- --
------------ ------------ ------------
Operating expenses
Research and development -- -- 203,842
General and administrative 762,011 62,840 2,358,864
------------ ------------ ------------
Total Expenses 762,011 62,840 2,562,706
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Other expenses
Loss on impairment of asset -- -- 15,975,000
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(Loss) from operations before taxes (762,011) (62,840) (18,537,706)
------------ ------------ ------------
Taxes -- -- --
------------ ------------ ------------
Net Income (Loss) $ (762,011) (62,840) (18,537,706)
============ ============ ============
A summary of the components of other comprehensive loss for the quarter ended
May 31, 2004 and 2003 as follows:
May 31, 2004 May 31, 2003
Net (loss) (762,011) (62,840)
Foreign currency translation gain (loss) (3,825) --
---------- ----------
Comprehensive (loss) (765,836) (62,840)
========== ==========
The accompanying notes are an integral part of these financial statements.
4
EVOLVE ONCOLOGY INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the Three For the From inception February
Months Ended Three Months Ended 15, 2001 through
May 31, 2004 May 31, 2003 May 31, 2004
------------- ------------- -------------
Cash flows from operating activities
Net loss $ (762,011) (62,840) (18,537,706)
Adjustments to reconcile net loss to net cash (used)
in operating activities:
Stock issued for services 648,000 0 1,786,315
Impairment of asset 0 0 15,975,000
Decrease in receivables 7 766 399
Increase in accounts payable and accrued liabilities 107,919 62,074 822,048
------------- ------------- -------------
Net cash from/(used in) operating activities $ (6,085) 0 46,056
Cash flows from investing activities: 0 0 0
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from Related Party 9,910 0 27,318
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Net cash provided by financing activities 9,910 0 27,318
Effect of exchange rate (3,825) 0 (73,374)
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Net increase in cash and cash equivalents 0 0 0
Cash at beginning of period 0 0 0
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Cash at end of period $ 0 0 0
============= ============= =============
Supplemental cash flow information:
Cash paid for interest $ 0 0 0
Cash paid for taxes $ 0 0 0
The accompanying notes are an integral part of these financial statements.
5
EVOLVE ONCOLOGY INC.
NOTES TO FINANCIAL STATEMENTS
May 31, 2004
(unaudited)
NOTE 1. BASIS OF PRESENTATION
The financial statements included in this Form 10-QSB have been prepared by the
Company, 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
year ended February 29, 2004.
The financial statements presented herein, for the three months ended May 31,
2004 and 2003 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.
NOTE 2. GOING CONCERN
Our financial statements are prepared using accounting principles generally
accepted in the United States of America generally applicable to a going
concern, which contemplates the realization of assets and liquidation of
liabilities in the normal course of business. Currently, we do not have
significant cash or other material assets, nor do we have an established source
of revenues sufficient to cover our operating costs and to allow us to continue
as a going concern. We do not currently possess a financial institution source
of financing and we cannot be certain that our existing sources of cash will be
adequate to meet our liquidity requirements. These conditions raise substantial
doubt about our ability to continue as a going concern.
To meet our present and future liquidity requirements, we will seek additional
funding through private placements, conversion of outstanding loans and payables
into common stock, development of the business of our newly-acquired
subsidiaries, entering into loans and other types of financing arrangements such
as convertible debentures, and through additional acquisitions that have
sufficient cash flow to fund subsidiary operations. The company receives
financial support from a parent company, Bioaccelerate Inc.. This provides
funding for the working capital requirements of the Company and it is intended
that this will be the primary means of funding the Company's operations for the
foreseeable future. There can be no assurance that we will be successful in
obtaining more debt and/or equity financing in the future or that our results of
operations will materially improve in either the short- or the long-term. If we
fail to obtain such financing and improve our results of operations, we will be
unable to meet our obligations as they become due.
6
EVOLVE ONCOLOGY INC.
NOTES TO FINANCIAL STATEMENTS
May 31, 2004
(unaudited)
NOTE 3. NET LOSS PER COMMON SHARE
Net loss per common share, basic and dilutive, has been computed using the
weighted average common shares outstanding at the date of the financial
statements. The company has no potential dilutive securities.
For the three For the three
months ended months ended
May 31, 2004 May 31, 2003
Basic Earnings per share:
Income (Loss) (numerator) $ (762,011) $ (62,840)
Shares (demoninator) 43,133,098 16,581,492
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Per Share Amount $ (0.018) $ (0.004)
============ ============
NOTE 4. STOCKHOLDERS' EQUITY
In April 2004, we performed a 2 for 1 stock split. This resulted in the issuance
of 21,431,606 at par value of $0.001 per share.
During the quarter ended May 31, 2004, the Company issued 270,000 shares of
common stock to consultants for services performed on behalf of the Company.
These shares were valued at $2.40 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.
7
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 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.
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.
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.
8
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 May 31, 2004.
GROSS PROFIT
Our gross loss for the quarter ending May 31, 2004 was attributable to Operating
expenses.
RESEARCH & DEVELOPMENT
Research and Development expenses for the quarter ending May 31, 2004 were $0,
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.
GENERAL & ADMINISTRATIVE EXPENSES
During quarter ending May 31, 2004 we incurred $762,011 in general and
administrative expenses.
OPERATING LOSS
The reported operating loss was by $762,011 in the three month period to May 31,
2004, or $0.007 per share basic and undiluted.
TOTAL COMPREHENSIVE LOSS
The reported total comprehensive loss in the period to May 31, 2004 was 765,836.
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
In March 2004, we issued 270,000 shares of common stock to consultants for work
performed. These shares were valued at $2.40 per share.
In April 2004, we performed a 2 for 1 stock split. This resulted in the issuance
of 21,431,606 at par value of $0.001 per share.
9
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
(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.
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: February 1, 2006
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)