UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended December 31, 2011
[ ] 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 000-50331
UPSTREAM BIOSCIENCES INC.
(Exact name of registrant as specified in its charter)
Nevada 98-0371433
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
50 West Liberty St., Suite 880, Reno, NV 89501
(Address of Principal Executive Offices) (Zip Code)
403.537.2516
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 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]
Indicate by check mark whether the registrant has submitted electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.232.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files). Yes [X] No [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definitions of "large accelerated filer," "accelerated filer," " and "smaller
reporting company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
34,112,065 common shares issued and outstanding as at February 14, 2012.
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
Our unaudited interim financial statements are stated in United States dollars
and are prepared in accordance with United States generally accepted accounting
principles.
It is the opinion of management that the unaudited interim financial statements
for the quarter ended December 31, 2011 include all adjustments necessary in
order to ensure that the unaudited interim financial statements are not
misleading.
2
UPSTREAM BIOSCIENCES, INC.
(A Development Stage Company)
BALANCE SHEETS
December 31, September 30,
2011 2011
---------- ----------
(Unaudited)
ASSETS
CURRENT ASSETS
Cash $ 5,493 $ 12,602
Prepaid expenses -- 396
---------- ----------
$ 5,493 $ 12,998
========== ==========
LIABILITIES
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 36,717 $ 36,513
Due to related parties 35,000 35,000
---------- ----------
71,717 71,513
---------- ----------
STOCKHOLDERS' DEFICIT
CAPITAL STOCK
Authorized:
100,000,000 non-voting preferred shares at $0.001 par value
750,000,000 common shares at $0.001 par value
Issued and outstanding:
34,112,065 common shares (September 30, 2011 - 34,112,065) 34,112 34,112
ADDITIONAL PAID-IN CAPITAL 7,123,633 7,123,633
ACCUMULATED OTHER COMPREHENSIVE LOSS (10,968) (10,352)
DEFICIT ACCUMULATED DURING THE DEVELOPMENT STAGE (7,213,001) (7,205,908)
---------- ----------
(66,224) (58,515)
---------- ----------
$ 5,493 $ 12,998
========== ==========
The accompanying notes are an integral part of these financial statements.
3
UPSTREAM BIOSCIENCES, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
Cumulative Results
From Inception
(June 14, 2004)
Three Months Ended to
December 31, December 31,
2011 2010 2011
------------ ------------ ------------
REVENUE $ -- $ -- $ 67,600
------------ ------------ ------------
OPERATING EXPENSES
Amortization -- 50 133,600
Consulting fees -- 7,420 12,598
Interest and finance charges -- 2,447 598,965
Interest income -- -- (84,671)
Investor and corporate communications -- -- 258,349
License fees and royalties -- 6,250 114,384
Loss on foreign exchange -- -- 15,453
Management compensation -- -- 1,526,086
Office and general administration 3,603 3,910 491,160
Professional fees 3,490 2,517 626,165
Research and development -- -- 1,421,530
Stock-based compensation -- -- 2,090,632
------------ ------------ ------------
(7,093) (22,594) (7,204,251)
OTHER ITEMS
Asset impairment loss -- -- (59,010)
Compensation shares -- -- (25,000)
Loss on sale of intellectual property -- -- (78,570)
Gain on sale of subsidiary -- -- 126,515
------------ ------------ ------------
LOSS BEFORE INCOME TAX (7,093) (22,594) (7,172,716)
Deferred income tax recovery -- -- 57,415
------------ ------------ ------------
LOSS $ (7,093) $ (22,594) $ (7,115,301)
============ ============ ============
LOSS PER SHARE - BASIC AND DILUTED $ 0.00 $ (0.01)
============ ============
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING - BASIC AND DILUTED 34,112,065 34,112,065
============ ============
The accompanying notes are an integral part of these financial statements.
4
UPSTREAM BIOSCIENCES, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)
Cumulative Results
From Inception
(June 14, 2004)
Three Months Ended to
December 31, December 31,
2011 2010 2011
------------ ------------ ------------
CASH FLOW FROM OPERATING ACTIVITIES
Net loss $ (7,093) $ (22,594) $ (7,115,301)
Adjustments to reconcile net loss to net cash used in
operating activities:
Amortization -- 50 133,600
Accretion of convertible debenture -- -- 302,808
Shares issued or to be issued for services -- -- 1,487,236
Stock-based compensation -- -- 1,658,590
Compensation shares -- -- 25,000
Deferred income tax -- -- (57,415)
Asset impairment -- -- 59,010
Gain on sale of subsidiary -- -- (126,515)
Loss from sale of intellectual property -- -- 78,570
Changes in operating assets and liabilities:
Other receivables -- (761) (10,259)
Prepaid expenses 396 -- (2,781)
Accounts payable and accrued liabilities (619) 14,853 267,301
Due to related parties -- -- 271,984
------------ ------------ ------------
NET CASH USED IN OPERATING ACTIVITIES (7,316) (8,452) (3,028,172)
------------ ------------ ------------
CASH FLOW FROM INVESTING ACTIVITIES
Cash paid for acquisition of PPT shares -- -- (51,507)
Proceeds on the sale of subsidiary -- -- 1
Purchase of equipment -- -- (22,764)
------------ ------------ ------------
NET CASH USED IN INVESTING ACTIVITIES -- -- (74,270)
------------ ------------ ------------
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from issuance of convertible debentures -- -- 1,000,000
Proceeds from issuance of common shares, net -- -- 1,995,345
Loan from related party -- -- 113,487
------------ ------------ ------------
NET CASH PROVIDED BY FINANCING ACTIVITIES -- -- 3,108,832
------------ ------------ ------------
EFFECT OF EXCHANGE RATE CHANGES 207 (3,554) (897)
------------ ------------ ------------
INCREASE (DECREASE) IN CASH (7,109) (12,006) 5,493
CASH, BEGINNING 12,602 31,152 --
------------ ------------ ------------
CASH, ENDING $ 5,493 $ 19,146 $ 5,493
============ ============ ============
The accompanying notes are an integral part of these financial statements.
5
UPSTREAM BIOSCIENCES INC
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 2011
(Unaudited)
1. BASIS OF PRESENTATION
These unaudited financial statements of Upstream Biosciences Inc. (the
"Company") have been prepared in accordance with generally accepted accounting
principles in the United States of America for interim financial statements and
the rules and regulations of the Securities and Exchange Commission. They do not
include all information and footnotes required by United States generally
accepted accounting principles for complete financial statement disclosure.
However, except as disclosed herein, there have been no material changes in the
information contained in the notes to the audited financial statements for the
year ended September 30, 2011, included in the Company's Form 10-K filed with
the Securities and Exchange Commission. These interim unaudited financial
statements should be read in conjunction with the audited financial statements
included in the Form 10-K. In the opinion of management, all adjustments
considered necessary for fair presentation, consisting solely of normal
recurring adjustments, have been made. Operating results for the three months
ended December 31, 2011, are not necessarily indicative of the results that may
be expected for the year ending September 30, 2012.
Going concern
These unaudited financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and the satisfaction of
liabilities and commitments in the normal course of business. As at December 31,
2011, the Company has a working capital deficiency of $66,224 and has incurred
losses since inception of $7,115,301. This raises substantial doubt about the
Company's ability to continue as a going concern which is dependent upon
generating profitable operations and obtaining the necessary financing to meet
its obligations when they become due. There is no assurance that equity or debt
capital will be available as necessary to meet the Company's requirements or, if
the capital is available, that it will be on terms acceptable to the Company.
Recent Accounting Pronouncements
The Company has reviewed recently issued accounting pronouncements and plans to
adopt those that are applicable to it. It does not expect the adoption of these
pronouncements to have a material impact on its current financial position,
results of operations or cash flows.
6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
FORWARD-LOOKING STATEMENTS
This quarterly report contains forward-looking statements that involve risk,
uncertainties and assumptions. In some cases, you can identify forward-looking
statements by terminology such as "may", "should", "expect", "plan",
"anticipate", "believe", "estimate", "predict", "potential" or "continue" or the
negative of these terms or other comparable terminology. Examples of
forward-looking statements made in this quarterly report on Form 10-Q include
statements about:
* Our business plans,
* Our ability to raise additional finances, and
* Our future investments and allocation of capital resources.
These statements are only predictions and involve known and unknown risks,
uncertainties and other factors, including:
* General economic and business conditions,
* Our lack of operating history,
* Our financial condition,
* Our material weakness in our internal control over financial
reporting,
* Our patents are only a provisional patent, and
* The risks in the section of this annual report entitled "Risk
Factors",
any of which may cause our or our industry's actual results, levels of activity,
performance or achievements to be materially different from any future results,
levels of activity, performance or achievements expressed or implied by these
forward-looking statements.
While these forward-looking statements and any assumptions upon which they are
based are made in good faith and reflect our current judgment regarding the
direction of our business, actual results will almost always vary, sometimes
materially, from any estimates, predictions, projections, assumptions or other
future performance suggested herein. Except as required by applicable law,
including the securities laws of the United States, we do not intend to update
any of the forward-looking statements to conform these statements to actual
results.
Our unaudited interim financial statements are stated in United States dollars
and are prepared in accordance with United States generally accepted accounting
principles. The following discussion should be read in conjunction with our
unaudited interim financial statements and the related notes that appear
elsewhere in this quarterly report.
In this quarterly report, unless otherwise specified, all references to "common
shares" refer to the common shares in our capital stock and the terms "we", "us"
and "our" mean Upstream Biosciences Inc. and our wholly-owned subsidiaries.
7
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED DECEMBER 31, 2011
REVENUE
We are a development stage company and have not generated any revenues from our
technologies since inception. We anticipate significant additional time and
financing will be required before our technologies are developed to a marketable
state.
EXPENSES
Our operating expenses for the three month period ended December 31, 2011 were
$7,093 compared to $22,594 in 2010. This net decrease of $15,501 was primarily
due to the following:
* $7,420 decrease in consulting fees due to a cash conservation strategy
adopted by our management during the previous fiscal year.
* $2,447 decrease in interest and finance charges primarily due to us
completing our restructuring.
* $6,250 decrease in license and royalty fees primarily due to us
completing our restructuring.
PLAN OF OPERATIONS AND CASH REQUIREMENTS OVER THE NEXT 12 MONTHS
Without adequate funding, it is management's intention to halt current research
and development efforts associated with our biomarker program and wait until
sufficient financial resources exist before spending additional and significant
funds for the commercialization of our biomarker program. However, we will
continue to evaluate and determine the most cost effective use of available
funds for all future research and development programs, including diagnostic
biomarkers, biomarkers for a drug response assay and drug development efforts.
There is no assurance that our research and development programs will produce
commercially viable products or treatments, and a great deal of additional
research and development will be required before a final evaluation of the
economic feasibility of our technologies can be determined.
We are also currently seeking new acquisitions and/or business opportunities
with established business entities for the merger of a target business with our
company including businesses not having a resource focus. In certain instances,
a target business may wish to become a subsidiary of us or may wish to
contribute assets to us rather than merge. There can be no assurance that we
will be able to enter into any agreements. We anticipate that any new
acquisition or business opportunities by our company will require additional
financing. There can be no assurance, however, that we will be able to acquire
the financing necessary to enable us to pursue our plan of operation. If our
company requires additional financing and we are unable to acquire such funds,
our business may fail.
ANTICIPATED CASH REQUIREMENTS
Over the next 12 months, we have estimated our minimum cash requirements to be
as follows:
ESTIMATED CASH EXPENSES FOR THE NEXT TWELVE MONTH PERIOD
--------------------------------------------------------
CASH OPERATING EXPENSES
Professional fees $20,000
General and administrative expenses $20,000
Corporate communications $ 5,000
-------
Total $45,000
=======
8
For the three months ended December 31, 2011, we recorded a net operating loss,
before other items, of $7,093 and have an accumulated deficit of $7,115,301
since inception. As at December 31, 2011, we had a working capital deficit of
$66,224 and for the next twelve months, management estimates minimum cash
requirements of $45,000 to fund on-going operations.
Accordingly, we do not have sufficient funds to meet our plan of operation over
the next twelve months and will need to obtain further financing through
issuance of shares, debentures or convertible debentures. We will also endeavor
to access available funding from research and development grants or loans from
various public and private research granting agencies. Moreover, all cash
operating expenses will be carefully monitored to ensure we can meet our
obligations as they come due.
There can be no assurance that additional financing will be available when
needed or, if available, on commercially reasonable terms. If we are not able to
obtain additional financing on a timely basis, we may not be able to meet our
obligations as they come due and may be forced to scale down or perhaps even
cease business operations.
LIQUIDITY AND CAPITAL RESOURCES
Our financial position as at December 31, 2011 and September 30, 2011 are as
follows:
WORKING CAPITAL
As at As at
December 31, September 30,
2011 2011
-------- --------
(unaudited) (audited)
Current assets $ 5,493 $ 12,998
Current liabilities $ 71,717 $ 71,513
Working capital (deficiency) $(66,224) $(58,515)
Working capital has decreased from a deficiency of $58,515 at September 30, 2011
to a working capital deficiency of $66,224 at December 31, 2011. To date, we
have had negative cash flows from operations and we have been dependent on sales
of our equity securities and debt financing to meet our cash requirements. We
expect this situation to continue for the foreseeable future. We anticipate that
we will have negative cash flows during the next twelve month period.
CASH FLOWS
Three Months Three Months
Ended Ended
December 31, December 31,
2011 2010
-------- --------
Net cash used in operating activities $ (7,316) $ (8,452)
Net cash from investing activities $ -- $ --
Net cash provided by financing activities $ -- $ --
Effect of exchange rate changes $ 207 $ (3,554)
Decrease in cash during the period $ (7,109) $(12,006)
Cash, beginning of period $ 12,602 $ 31,152
Cash, end of period $ 5,493 $ 19,146
9
During the three month period ended December 31, 2011 and 2010:
i) Our net cash used in operating activities decreased from $8,452 to
$7,316 primarily due to our company focusing on reducing expenses and
conserving our available cash.
(ii) Our net cash from investing activities was $nil in 2011 and $nil in
2010.
(iii) Our net cash from financing activities was $nil in 2011 and $nil in
2010.
GOING CONCERN
The audited financial statements accompanying our annual report on Form 10-K
have been prepared on a going concern basis, which implies that our company will
continue to realize its assets and discharge its liabilities and commitments in
the normal course of business. Our company has not generated revenues since
inception, has never paid any dividends and is unlikely to pay dividends or
generate earnings in the immediate or foreseeable future. The continuation of
our company as a going concern is dependent upon: (i) the continued financial
support from our shareholders; (ii) the ability of our company to continue
raising necessary equity financing to achieve its operating objectives; and
(iii) the eventual attainment of profitable operations.
Our independent auditors included an explanatory paragraph in their annual
report on our financial statements for the year ended September 30, 2011
regarding concerns about our ability to continue as a going concern. In
addition, our financial statements contain further note disclosures in this
regard. The continuation of our business plan is dependent upon our ability to
continue raising sufficient new capital from equity or debt markets in order to
fund our on-going operating losses and oil and gas acquisition and exploration
activities. The issuance of additional equity securities could result in a
significant dilution in the equity interests of our current stockholders.
APPLICATION OF CRITICAL ACCOUNTING POLICIES
The preparation of financial statements in conformity with United States
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying disclosures of our company. Although these estimates are based on
management's knowledge of current events and actions that our company may
undertake in the future, actual results may differ from such estimates.
BASIS OF PRESENTATION
These financial statements and related notes are presented in accordance with
United States generally accepted accounting principles ("US GAAP") and are
expressed in US dollars. Our company is in the development stage and has not
realized significant revenues from its business plan to date. These financial
statements include the accounts of our company and our previously wholly-owned
Canadian subsidiaries up to the date of their disposal.
EQUIPMENT
Equipment is valued at cost less accumulated amortization. Amortization is
recorded using the straight-line method over four years and maintenance and
repairs are expensed as incurred.
10
USE OF ESTIMATES AND ASSUMPTIONS
The preparation of financial statements in conformity with US GAAP requires our
company 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 financial statements and the reported amounts of revenue and
expenses during the reporting period. We base our estimates and assumptions on
current facts, historical experience and various other factors that we believe
to be reasonable under the circumstances, the results of which form the basis
for making judgments about the carrying values of assets and liabilities and the
accrual of costs and expenses that are readily apparent from other sources. The
actual results experienced by our company may differ materially from our
company's estimates. To the extent there are material differences, future
results may be affected. Estimates used in preparing these financial statements
include the fair value of share-based payments, deferred income taxes, financial
instruments and deferred compensation.
SHARE-BASED COMPENSATION
Our company accounts for share-based compensation using the fair value method
and related compensation expense is recognized over the period of benefit when
the service is rendered.
FINANCIAL INSTRUMENTS
Our company's financial instruments consist of cash, other receivables and
accounts payable. The carrying amounts of these financial instruments
approximate their fair values due to their short term nature.
FOREIGN CURRENCY TRANSACTIONS AND TRANSLATION
The functional and reporting currency of our company and of our company's
Canadian subsidiaries is the Canadian dollar. The financial statements are
translated into United States dollars using period-end rates of exchange for
assets and liabilities, and period average rates of exchange for revenues and
expenses. Foreign currency transaction gains (losses) are included in the
statements of operations and those arising from translation are included in
other comprehensive income (loss) which is disclosed as a separate component of
shareholders' deficit. Our company has not entered into any derivative
instruments to offset the impact of foreign currency fluctuations.
RESEARCH AND DEVELOPMENT
These costs are expensed when incurred and consist primarily of direct material
and personnel costs, contract services and indirect costs. Our company has
received government assistance in the past and may receive same in the future
regarding its research and development activities. When the work is performed
that qualifies for such grants, the related assistance amount is credited to
research and development expense.
INCOME TAXES
Our company uses the asset and liability method of accounting for income taxes.
Under this method, deferred tax assets and liabilities are determined based on
temporary differences between the financial statements and the tax basis of
assets and liabilities, and net operating loss carry forwards based on using
enacted tax rates in effect for the year in which the differences are expected
to reverse. The effect of a change in tax rates on deferred tax assets and
liabilities is recognized in income in the year that includes the enactment
date. Valuation allowances are established to the extent that it is considered
more likely than not that deferred tax assets will be realized. A valuation
allowance for the full amount of the deferred tax assets has been recorded.
LOSS PER SHARE
Basic loss per share is computed by dividing the net loss by the weighted
average number of outstanding common shares during the year. Diluted loss per
share gives effect to all potentially dilutive common shares outstanding during
the year, including convertible debt, stock options and share purchase warrants,
using the treasury stock method. The computation of diluted loss per share does
11
not assume conversion, exercise or contingent exercise of securities that would
have an anti-dilutive effect on loss per share.
RECENT ACCOUNTING PRONOUNCEMENTS
Our company has reviewed recently issued, but not yet effective, accounting
pronouncements and plans to adopt those that are applicable to it. We do not
expect the adoption of these pronouncements to have a material impact on our
reported financial position, results of operations or cash flows.
OFF-BALANCE SHEET ARRANGEMENTS
We have no significant off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on our financial condition,
changes in financial position, revenues and expenses, results of operations,
liquidity, capital expenditures or capital resources that are material to
stockholders.
RISK FACTORS
Much of the information included in this quarterly report includes or is based
upon estimates, projections or other forward looking statements. Such forward
looking statements include any projections and estimates made by us and our
management in connection with our business operations. While these
forward-looking statements, and any assumptions upon which they are based, are
made in good faith and reflect our current judgment regarding the direction of
our business, actual results will almost always vary, sometimes materially, from
any estimates, predictions, projections, assumptions or other future performance
suggested herein.
Such estimates, projections or other forward looking statements involve various
risks and uncertainties as outlined below. We caution the reader that important
factors in some cases have affected and, in the future, could materially affect
actual results and cause actual results to differ materially from the results
expressed in any such estimates, projections or other forward looking
statements.
RISKS RELATED TO OUR BUSINESS
WE HAVE HAD NEGATIVE CASH FLOWS FROM OPERATIONS SINCE INCEPTION. WE WILL REQUIRE
SIGNIFICANT ADDITIONAL FINANCING, THE AVAILABILITY OF WHICH CANNOT BE ASSURED,
AND IF OUR COMPANY IS UNABLE TO OBTAIN SUCH FINANCING, OUR BUSINESS MAY FAIL.
To date, we have had negative cash flows from operations and have depended on
sales of our equity securities and debt financing to meet our cash requirements.
Our ability to develop and, if warranted, commercialize our technologies, will
be dependent upon our ability to raise significant additional financing. If we
are unable to obtain such financing, we will not be able to fully develop our
business. Specifically, we will need to raise additional funds to pay our
existing and accrued liabilities, and support our planned growth and carry out
our business plan.
In light of the current financial crises, financing for companies such as ours
is very difficult to obtain. Even if financing is available, it may not be
available on terms that are favorable to us or in sufficient amounts to satisfy
our requirements. If we require, but are unable to obtain, additional financing
in the future, we may be unable to implement our business plan and our growth
strategies, respond to changing business or economic conditions, withstand
adverse operating results and compete effectively. Without additional funds, we
may not be able to pay our employees or contracts to provide services, and these
same employees or service providers may have to either accept accruals or common
shares, or a combination of both, for compensation. More importantly, if we are
unable to raise further financing when required, we may be forced to scale down
our operations and our ability to continue operations may be negatively
affected.
12
WE HAVE A HISTORY OF LOSSES AND NOMINAL OPERATING RESULTS, WHICH RAISE
SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE AS A GOING CONCERN.
Since inception through the three month period ended December 31, 2011, we have
incurred aggregate net losses of $7,115,301. We can offer no assurance that we
will operate profitably or that we will generate positive cash flow in the
future. In addition, our operating results in the future may be subject to
significant fluctuations due to many factors not within our control, such as the
level of competition and general economic conditions.
Our company's operations will be subject to all the risks inherent in the
establishment of a developing enterprise and the uncertainties arising from the
absence of a significant operating history. No assurance can be given that we
may be able to operate on a profitable basis.
Due to the nature of our business and the early stage of our development, our
securities must be considered highly speculative. We have not realized a profit
from our operations to date and there is little likelihood that we will realize
any profits in the short or medium term. Any profitability in the future from
our business will be dependent upon the successful commercialization or
licensing of our core technology, which itself is subject to numerous risk
factors as set forth herein or the acquisition of another business.
We expect to continue to incur development costs and operating costs.
Consequently, we expect to incur operating losses and negative cash flows until
our technology gains market acceptance sufficient to generate a sustainable
level of income from the commercialization or licensing of our technology. Our
history of losses and nominal operating results raise substantial doubt about
our ability to continue as a going concern, as described in the explanatory
paragraph in our company's independent registered public accounting firm's audit
report dated September 7, 2011 which is included in our annual report on Form
10-K.
THE WORLDWIDE MACROECONOMIC DOWNTURN MAY REDUCE THE ABILITY OF OUR COMPANY TO
OBTAIN THE FINANCING NECESSARY TO CONTINUE OUR BUSINESS AND MAY REDUCE THE
NUMBER OF VIABLE BUSINESSES THAT WE MAY WISH TO ACQUIRE.
In 2009 and 2010, there has been a downturn in general worldwide economic
conditions due to many factors, including the effects of the subprime lending
and general credit market crises, volatile but generally declining energy costs,
slower economic activity, decreased consumer confidence and commodity prices,
reduced corporate profits and capital spending, adverse business conditions,
increased unemployment and liquidity concerns. In addition, these macroeconomic
effects, including the resulting recession in various countries and slowing of
the global economy, will likely result in decreased business opportunities as
potential target companies face increased financial hardship. Tightening credit
and liquidity issues will also result in increased difficulties for our company
to raise capital for our continued operations and to consummate a business
opportunity with a viable business.
WE HAVE IDENTIFIED MATERIAL WEAKNESSES RELATED TO OUR INTERNAL CONTROL OVER
FINANCIAL REPORTING AND CONCLUDED THAT OUR INTERNAL CONTROL OVER FINANCIAL
REPORT AND DISCLOSURE CONTROLS AND PROCEDURES WERE INEFFECTIVE AS OF JUNE 30,
2011. THESE MATERIAL WEAKNESSES REMAIN UNREMEDIED, WHICH COULD CONTINUE TO
IMPACT OUR ABILITY TO REPORT RESULTS OF OPERATIONS AND FINANCIAL CONDITION
ACCURATELY AND IN A TIMELY MANNER.
We have identified a number of material weaknesses in our internal control over
financial reporting. Our management assessed the effectiveness of our internal
control over financial reporting and disclosure controls and procedures as at
September 30, 2010 pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 and
the related SEC rules and concluded that our internal control over financial
reporting and disclosure controls and procedures were ineffective. In connection
with the preparation of our quarterly report for the period ended June 30, 2009,
we determined that an accrual error with respect to the management compensation
of one of our senior officers had been made in our financial statements in prior
periods and we determined that our disclosure controls and procedures were not
effective as at December 31, 2011. Although we intend to remediate such material
weaknesses, we have not yet been able to address these material weaknesses and
they may continue to remain unremedied for some time, which could adversely
impact the accuracy and timeliness of future reports and filings we make to the
SEC and could have a material adverse effect on our business, results of
operations, financial condition and liquidity.
13
WE CURRENTLY HOLD NO PATENTS ON OUR PROPRIETARY TECHNOLOGY AND IF WE ARE NOT
ABLE TO PROTECT OUR PROPRIETARY TECHNOLOGY, OUR COMPANY WILL SUFFER A MATERIAL
ADVERSE EFFECT.
We currently have provisional patent applications filed on our technologies. We
currently rely on the provisional patent applications and trade secrets to
protect our proprietary intellectual property.
While we believe that we have adequately protected our proprietary technology,
and we intend to take all appropriate and reasonable legal measures to protect
it in the future, the use of our technology by a competitor could have a
material adverse effect on our business, financial condition and results of
operations. Our ability to compete successfully and achieve future revenue
growth will depend, in part, on our ability to protect our proprietary
technology and operate without infringing upon the rights of others. We may not
be able to successfully protect our proprietary technology, and our proprietary
technology may otherwise become known or similar technology may be independently
developed by competitors. Competitors may discover novel uses, develop similar
or more marketable technologies or offer services similar to our company at
lower prices. We cannot predict whether our technologies and services will
compete successfully with the technologies and services of existing or emerging
competitors.
WE MAY LOSE OUR COMPETITIVENESS IF WE ARE NOT ABLE TO PROTECT OUR PROPRIETARY
TECHNOLOGY AND INTELLECTUAL PROPERTY RIGHTS AGAINST INFRINGEMENT, AND ANY
RELATED LITIGATION MAY BE TIME-CONSUMING AND COSTLY.
Our success and ability to compete depends to a significant degree on our
proprietary technology. If any of our competitors copy or otherwise gain access
to our proprietary technology or develop similar technologies independently, we
may not be able to compete as effectively. The measures we have implemented to
protect our proprietary technology and other intellectual property rights are
currently based upon a combination of provisional patent applications,
technology licenses and trade secrets. This, however, may not be adequate to
prevent the unauthorized use of our proprietary technology and our other
intellectual property rights. Further, the laws of foreign countries may provide
inadequate protection of such intellectual property rights. We may need to bring
legal claims to enforce or protect such intellectual property rights. Any
litigation, whether successful or unsuccessful, may result in substantial costs
and a diversion of our company's resources. In addition, notwithstanding our
rights to our intellectual property, other persons may bring claims against us
alleging that we have infringed on their intellectual property rights or claims
that our intellectual property rights are not valid. Any claims against us, with
or without merit, could be time consuming and costly to defend or litigate,
divert our attention and resources, result in the loss of goodwill associated
with our business or require us to make changes to our technology.
IF OUR PROVISIONAL PATENT APPLICATIONS AND PROPRIETARY RIGHTS DO NOT PROVIDE
SUBSTANTIAL PROTECTION, THEN OUR BUSINESS AND COMPETITIVE POSITION WILL SUFFER.
Our success depends in large part on our, and any of our potential
collaborators, ability to develop, commercialize and protect our proprietary
technology. However, patents may not be granted on any of our provisional or
future patent applications. Also, the scope of any future patent may not be
sufficiently broad to offer meaningful protection. In addition, any patents
granted to us in the future may be successfully challenged, invalidated or
circumvented so that such patent rights may not create an effective competitive
barrier.
OUR COMPANY MAY BECOME SUBJECT TO INTELLECTUAL PROPERTY LITIGATION WHICH MAY
HARM OUR BUSINESS.
Our success depends in part on our ability to develop commercially viable
products without infringing the proprietary rights of others. Although we have
not been subject to any filed infringement claims, other patents could exist or
could be filed which may prohibit or limit our ability to market our products or
maintain a competitive position. In the event of an intellectual property
dispute, we may be forced to litigate. Intellectual property litigation may
divert management's attention from developing our technology and may force us to
incur substantial costs regardless of whether we are successful. An adverse
outcome could subject us to significant liabilities to third parties, and force
us to curtail or cease the development and commercialization of our technology.
14
WE HAVE NOT GENERATED ANY REVENUES FROM OPERATIONS AND IF WE ARE UNABLE TO
DEVELOP MARKET SHARE AND GENERATE SIGNIFICANT REVENUES FROM THE
COMMERCIALIZATION OR LICENSING OF OUR TECHNOLOGY, THEN OUR BUSINESS MAY FAIL.
We operate in a highly competitive industry and our failure to compete
effectively and generate income through the licensing of our technology may
adversely affect our ability to generate revenue. There can be no assurance that
our new or existing technologies will gain market acceptance. Management is
aware of similar technologies that our technology, when developed to a stage of
commercialization, will compete directly against. Many of our competitors have
greater financial, technical, sales and marketing resources, better name
recognition and a larger customer base than ours. In addition, many of our large
competitors may offer customers a broader or superior range of services and
technologies. Some of our competitors may conduct more extensive promotional
activities and offer lower licensing costs to customers than we do, which could
allow them to gain greater market share or prevent us from establishing and
increasing our market share. Increased competition in the genetic biomarker
industry and the drug development industry may result in significant price
competition, reduced profit margins or loss of market share, any of which may
have a material adverse effect on our ability to generate revenues and
successfully operate our business. Our competitors may develop technologies
superior to those that our company is currently developing. In the future, we
may need to decrease our prices if our competitors lower their prices. Our
competitors may be able to respond more quickly to new or changing
opportunities, technologies and customer requirements. Such competition will
potentially affect our chances of achieving profitability, and ultimately affect
our ability to continue as a going concern.
RAPID TECHNOLOGICAL CHANGES IN OUR INDUSTRY MAY RENDER OUR TECHNOLOGY
NON-COMPETITIVE OR OBSOLETE AND CONSEQUENTLY AFFECT OUR ABILITY TO GENERATE
FUTURE REVENUES.
The genetic biomarker industry is characterized by rapidly changing technology,
evolving industry standards and varying customer demand. We believe that our
success will depend on our ability to generate income through the licensing of
our technology. We can make no assurance that our technology will not become
obsolete due to the introduction of alternative technologies. If we are unable
to continue to develop and introduce new genetic biomarkers, new biotechnology
drugs and drug candidates to meet technological changes and changes in market
demands, our business and operating results, including our ability to generate
revenues, may be adversely affected.
IF WE DO NOT KEEP PACE WITH OUR COMPETITORS, TECHNOLOGICAL ADVANCEMENTS AND
MARKET CHANGES, OUR TECHNOLOGY MAY BECOME OBSOLETE AND OUR BUSINESS MAY SUFFER.
The market for our technology is very competitive, is subject to rapid
technological changes and varies for different individual products. We believe
that there are potentially many competitive approaches being pursued that
compete with our technology, including some by private companies for which
information is difficult to obtain.
Many of our competitors have significantly greater resources and have developed
products and processes that directly compete with our technology. Our
competitors may develop, or may in the future develop, new technologies that
directly compete with our technology or even render our technology obsolete. Our
technology is designed to develop diagnostic products as well as treatments for
certain diseases. Even if we are able to demonstrate improved or equivalent
results from our technology, researchers and practitioners may not use our
technology and we may suffer a competitive disadvantage. Finally, to the extent
that others develop new technologies that address the targeted application for
our current technology, our business will suffer.
OUR BUSINESS IS SUBJECT TO COMPREHENSIVE GOVERNMENT REGULATION AND ANY CHANGE IN
SUCH REGULATION MAY HAVE A MATERIAL ADVERSE EFFECT ON OUR COMPANY.
There is no assurance that the laws, regulations, policies or current
administrative practices of any government body, organization or regulatory
agency in the United States, Canada or any other jurisdiction, will not be
changed, applied or interpreted in a manner which will fundamentally alter the
ability of our company to carry on our business. The actions, policies or
regulations, or changes thereto, of any government body or regulatory agency, or
other special interest groups, may have a detrimental effect on our company. Any
or all of these situations may have a negative impact on our operations.
15
RISKS RELATED TO OUR COMMON STOCK
A DECLINE IN THE PRICE OF OUR COMMON STOCK COULD AFFECT OUR ABILITY TO RAISE
FURTHER WORKING CAPITAL AND ADVERSELY IMPACT OUR ABILITY TO CONTINUE OPERATIONS.
A prolonged decline in the price of our common stock could result in a reduction
in the liquidity of our common stock and a reduction in our ability to raise
capital. Because a significant portion of our operations has been and will be
financed through the sale of equity securities, a decline in the price of our
common stock could be especially detrimental to our liquidity and our
operations. Such reductions may force us to reallocate funds from other planned
uses and may have a significant negative effect on our business plans and
operations, including our ability to develop new products and continue our
current operations. If our stock price declines, we can offer no assurance that
we will be able to raise additional capital or generate funds from operations
sufficient to meet our obligations. If we are unable to raise sufficient capital
in the future, we may not be able to have the resources to continue our normal
operations.
The market price for our common stock may also be affected by our ability to
meet or exceed expectations of analysts or investors. Any failure to meet these
expectations, even if minor, may have a material adverse effect on the market
price of our common stock.
IF WE ISSUE ADDITIONAL SHARES IN THE FUTURE, IT WILL RESULT IN THE DILUTION OF
OUR EXISTING SHAREHOLDERS.
Our certificate of incorporation authorizes the issuance of up to 750,000,000
shares of common stock with a $0.001 par value and 100,000,000 preferred shares
with a par value of $0.001, of which 34,112,065 common shares were issued and
outstanding as of February 14, 2012. Our board of directors may fix and
determine the designations, rights, preferences or other variations of each
class or series within each class. Our board of directors may choose to issue
some or all of such shares to acquire one or more businesses or to provide
additional financing in the future. The issuance of any such shares will result
in a reduction of the book value and market price of the outstanding shares of
our common stock. If we issue any such additional shares, such issuance will
cause a reduction in the proportionate ownership and voting power of all current
shareholders. Further, such issuance may result in a change of control of our
company.
TRADING OF OUR STOCK MAY BE RESTRICTED BY THE SECURITIES EXCHANGE COMMISSION'S
PENNY STOCK REGULATIONS, WHICH MAY LIMIT A STOCKHOLDER'S ABILITY TO BUY AND SELL
OUR STOCK.
The Securities and Exchange Commission has adopted regulations which generally
define "penny stock" to be any equity security that has a market price (as
defined) less than $5.00 per share or an exercise price of less than $5.00 per
share, subject to certain exceptions. Our securities are covered by the penny
stock rules, which impose additional sales practice requirements on
broker-dealers who sell to persons other than established customers and
"accredited investors". The term "accredited investor" refers generally to
institutions with assets in excess of $5,000,000 or individuals with a net worth
in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly
with their spouse. The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document in a form prepared by the Securities and
Exchange Commission, which provides information about penny stocks and the
nature and level of risks in the penny stock market. The broker-dealer also must
provide the customer with current bid and offer quotations for the penny stock,
the compensation of the broker-dealer and its salesperson in the transaction and
monthly account statements showing the market value of each penny stock held in
the customer's account. The bid and offer quotations, and the broker-dealer and
salesperson compensation information, must be given to the customer orally or in
writing prior to effecting the transaction and must be given to the customer in
writing before or with the customer's confirmation. In addition, the penny stock
rules require that prior to a transaction in a penny stock not otherwise exempt
from these rules, the broker-dealer must make a special written determination
that the penny stock is a suitable investment for the purchaser and receive the
purchaser's written agreement to the transaction. These disclosure requirements
may have the effect of reducing the level of trading activity in the secondary
market for the stock that is subject to these penny stock rules. Consequently,
these penny stock rules may affect the ability of broker-dealers to trade our
securities. We believe that the penny stock rules discourage investor interest
in and limit the marketability of our common stock.
FINRA'S SALES PRACTICE REQUIREMENTS MAY ALSO LIMIT A STOCKHOLDER'S ABILITY TO
BUY AND SELL OUR STOCK.
In addition to the "penny stock" rules promulgated by the Securities and
Exchange Commission (see above for a discussion of penny stock rules), FINRA
rules require that in recommending an investment to a customer, a broker-dealer
must have reasonable grounds for believing that the investment is suitable for
16
that customer. Prior to recommending speculative low priced securities to their
non-institutional customers, broker-dealers must make reasonable efforts to
obtain information about the customer's financial status, tax status, investment
objectives and other information. Under interpretations of these rules, FINRA
believes that there is a high probability that speculative low priced securities
will not be suitable for at least some customers. FINRA requirements make it
more difficult for broker-dealers to recommend that their customers buy our
common stock, which may limit your ability to buy and sell our stock and have an
adverse effect on the market for our shares.
OUR COMMON STOCK IS ILLIQUID AND THE PRICE OF OUR COMMON STOCK MAY BE NEGATIVELY
IMPACTED BY FACTORS WHICH ARE UNRELATED TO OUR OPERATIONS.
Our common stock is currently quoted on the OTC QB. Trading of our stock through
the OTC QB is frequently thin and highly volatile. There is no assurance that a
sufficient market will develop in the stock, in which case it could be difficult
for shareholders to sell their stock. The market price of our common stock could
fluctuate substantially due to a variety of factors, including market perception
of our ability to achieve our planned growth, quarterly operating results of our
competitors, trading volume in our common stock, changes in general conditions
in the economy and the financial markets or other developments affecting our
competitors or us. In addition, the stock market is subject to extreme price and
volume fluctuations. This volatility has had a significant effect on the market
price of securities issued by many companies for reasons unrelated to their
operating performance and could have the same effect on our common stock.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not Applicable.
ITEM 4. CONTROLS AND PROCEDURES.
DISCLOSURE CONTROLS AND PROCEDURES
As required by paragraph (b) of Rules 13a-15 or 15d-15 under the Exchange Act,
our principal executive officer and principal financial officer evaluated our
company's disclosure controls and procedures (as defined in Rules 13a-15(e) and
15d-15(e) of the Exchange Act) as of the end of the period covered by this
quarterly report on Form 10-Q. Based on this evaluation, these officers
concluded that as of the end of the period covered by this quarterly report on
Form 10-Q, these disclosure controls and procedures were not effective to ensure
that the information required to be disclosed by our company in reports it files
or submits under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the rules and forms of the
Securities Exchange Commission and include controls and procedures designed to
ensure that such information is accumulated and communicated to our company's
management, including our company's principal executive officer and principal
financial officer, to allow timely decisions regarding required disclosure. The
conclusion that our disclosure controls and procedures were not effective was
due to the presence of the following material weaknesses in internal control
over financial reporting which are indicative of many small companies with small
staff: (i) inadequate segregation of duties and effective risk assessment; (ii)
insufficient written policies and procedures for accounting and financial
reporting with respect to the requirements and application of both US GAAP and
SEC guidelines; (iii) inadequate security and restricted access to computer
systems including insufficient disaster recovery plans; and (iv) no written
whistle-blower policy.
Our company plans to take steps to enhance and improve the design of our
internal controls over financial reporting. During the period covered by this
quarterly report on Form 10-Q, we have not been able to remediate the material
weaknesses identified above. To remediate such weaknesses, we plan to implement
the following changes during our fiscal year ending September 30, 2012: (i)
appoint additional qualified personnel to address inadequate segregation of
duties and ineffective risk management; (ii) adopt sufficient written policies
and procedures for accounting and financial reporting and a whistle-blower
policy; and (iii) implement sufficient security and restricted access measures
regarding our computer systems and implement a disaster recovery plan. The
remediation efforts set out in (i) and (iii) are largely dependent upon our
company securing additional financing to cover the costs of implementing the
changes required. If we are unsuccessful in securing such funds, remediation
efforts may be adversely effected in a material manner.
17
Because of the inherent limitations in all control systems, no evaluation of
controls can provide absolute assurance that all control issues, if any, within
our company have been detected. These inherent limitations include the realities
that judgments in decision-making can be faulty and that breakdowns can occur
because of simple error or mistake.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING.
There were no changes in our company's internal control over financial reporting
during the period ended December 31, 2011, that affected our company's internal
control over financial reporting subsequent to the date that we carried out our
evaluation for that period.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
Other than as set forth below, we know of no material, active, or pending legal
proceeding against our company, nor are we involved as a plaintiff in any
material proceeding or pending litigation where such claim or action involves
damages for more than 10% of our current assets as of October 24, 2011.
Additionally, there were no proceedings in which any of our company's directors,
officers, or affiliates, or any registered or beneficial shareholders holding
more than 5% of our voting securities, is an adverse party or has a material
interest adverse to our company's interest as of November 8, 2011.
On September 1, 2009, TCF Ventures filed a Writ of Summons and Statement of
Claim against our company. The Statement of Claim alleged that our company
notified TCF Ventures that it would be reducing amounts payable to TCF Ventures
by 33% and that our company would eventually repay the salary owed when it had
sufficient funds. TCF Ventures accepted the deferral of salary on the
understanding that the deferral was temporary and that it would be repaid as
soon as possible. The Statement of Claim further alleged that on or about
January 2009, our company notified TCF Ventures that our company would be
deferring the salary by 50%. In response, on or about February 3, 2009, the
Statement of Claim alleges that TCF Ventures delivered a written notice to our
company advising that our company was in material breach of the agreement for
failing to pay the salary. TCF Ventures claimed judgment against our company for
$68,750 plus GST for outstanding salary under the agreement and $150,000 for
severance.
On September 22, 2009, our company filed a Statement of Defence against TCF
Ventures, whereby our company denied the allegations made against our company
and counter claimed against TCF Ventures, which counterclaim included the
following: (a) causing our company to pay GST on amounts payable to TCF
Ventures, even though the agreement did not provide for the payment of GST to
TCF Ventures; (b) failure to cause our company to deduct GST from amounts
payable to TCF Ventures and to remit such payments to the required government
authority; and (c) during the term of the agreement, Mr. Fernback caused our
company to overpay on salary payments by applying a rate of exchange between the
Canadian and US dollars that was more favourable to TCF Ventures than existing
market rates. Our company took the position that such breaches constituted
repudiation of the agreement with TCF Ventures such that our company was
entitled to treat the agreement at an end and that TCF Ventures has no cause of
action against our company for the severance. Our company further claimed that
our company was entitled to repayment of the GST paid to TCF Ventures and the
amount paid in excess of the market exchange rates, and therefore claimed a
right of set-off for such amounts against any amount held to be owing to TCF
Ventures.
On December 14, 2009, TCF Ventures and our company signed a mutual release
whereby, in consideration for the payment of $50,000 from our company to TCF
Ventures, both parties agreed to release each other from all claims or
liabilities for any allegations pled in the Statement of Claim and the Statement
of Defence.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
18
ITEM 4. (REMOVED AND RESERVED)
ITEM 5. OTHER INFORMATION.
None.
ITEM 6. EXHIBITS.
Exhibit
Number Description
------ -----------
(2) PLAN OF PURCHASE, SALE, REORGANIZATION, ARRANGEMENT, LIQUIDATION OR
SUCCESSION
2.1 Share Exchange Agreement dated February 3, 2006, among our company,
Upstream Canada, the shareholders of Upstream Canada and Steve Bajic
(incorporated by reference from our Current Report on Form 8-K filed on
February 6, 2006).
2.2 Amended and Restated Share Exchange Agreement dated February 24, 2006,
among our company, Upstream Canada, the shareholders of Upstream Canada
and Steve Bajic (incorporated by reference from our Current Report on
Form 8-K filed on February 27, 2006).
(3) ARTICLES OF INCORPORATION AND BY-LAWS
3.1 Articles of Incorporation (incorporated by reference from our
Registration Statement on Form SB-2 filed on July 5, 2002).
3.2 Bylaws (incorporated by reference from our Registration Statement on
Form SB-2 Filed on July 5, 2002). 3.3 Certificate of Amendment filed
with the Nevada Secretary of State on March 8, 2005 (incorporated by
reference from our Current Report on Form 8-K filed on March 10, 2005).
3.4 Certificate of Change filed with the Nevada Secretary of State on
December 20, 2005 (incorporated by reference from our Current Report on
Form 8-K filed on December 29, 2005).
3.5 Articles of Merger filed with the Nevada Secretary of State on February
6, 2006 (incorporated by reference from our Current Report on Form 8-K
filed on February 9, 2006).
3.6 Certificate of Amendment filed with the Nevada Secretary of State on
November 27, 2006 (incorporated by reference from our Current Report on
Form 8-K filed on November 30, 2006).
(10) MATERIAL CONTRACTS
10.1 2007 Stock Option Plan (incorporated by reference from our Registration
Statement on Form SB-2 filed on October 1, 2007).
10.2 Amendment to Employment Agreement dated August 18, 2009 between our
company and Dexster Smith (incorporated by reference from our Quarterly
Report on Form 10-Q filed on August 31, 2009).
10.3 Amendment to Employment Agreement dated August 18, 2009 between our
company and Joel Bellenson (incorporated by reference from our
Quarterly Report on Form 10-Q filed on August 31, 2009).
10.4 Return to Treasury Agreement dated December 14, 2009 between our
company and Joel Bellenson (incorporated by reference from our Current
Report on Form 8-K filed on December 14, 2009).
19
10.5 Return to Treasury Agreement dated December 14, 2009 between our
company and Dexster Smith (incorporated by reference from our Current
Report on Form 8-K filed on December 14, 2009).
10.6 Asset Sale Agreement dated December 14, 2009 between Pacific Pharma
Technologies Inc. and JTAT Consulting Inc. (incorporated by reference
from our Current Report on Form 8-K filed on December 14, 2009).
(31) SECTION 302 CERTIFICATIONS
31.1* Certification of Principal Executive Officer and Principal Financial
Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
(32) SECTION 906 CERTIFICATIONS
32.1* Certification of Principal Executive Officer and Principal Financial
Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
(99) ADDITIONAL EXHIBITS
99.1 Compensation Committee Charter (incorporated by reference from our
Annual Report on Form 10-K filed on December 19, 2008)
99.2 Audit Commission Charter (incorporated by reference from our Annual
Report on Form 10-K filed on December 19, 2008)
101 Interactive data files pursuant to Rule 405 of Regulation S-T.
----------
* Filed herewith
20
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, thereunto duly authorized.
UPSTREAM BIOSCIENCES INC.
By: /s/ Mike McFarland
----------------------------------------
Mike McFarland, Chief Executive Officer,
Chief Financial Officer, President,
Secretary, Treasurer and Director
(Principal Executive Officer, Principal
Financial Officer and Principal
Accounting Officer)
Dated: February 14, 2012