UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
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|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2011
OR
|_| 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 000-53854
ENZYMEBIOSYSTEMS
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(Exact name of registrant as specified in its charter)
Nevada 27-0464302
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
16773 W Park Drive, Chagrin Falls, Ohio, 44023
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(Address of principal executive offices)(Zip Code)
Issuer's telephone number, including area code: (440) 708-0012
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 |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
definition of "accelerated filer and large accelerated filer" 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|
As of November 16, 2011, the registrant's outstanding common stock consisted
of 31,500,000 shares, $0.001 par value. Authorized - 195,000,000 common
voting shares. One millions Series A preferred issued, 5,000,000 preferred
shares, par value $0.001 authorized.
Table of Contents
EnzymeBioSystems
Index to Form 10-Q
For the Quarterly Period Ended September 30, 2011
Part I. Financial Information
Page
Item 1. Financial Statements
Unaudited Interim Balance Sheets as of September 30, 2011
and June 30, 2011 3
Unaudited Condensed Interim Statements of Operations for the
three months ended September 30, 2011 4
Unaudited Condensed Interim Statements of Cash Flows for the
three months ended September 30, 2011 5
Notes to the Condensed Interim Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 10
Item 3. Quantitative and Qualitative Disclosures About Market Risk 18
Item 4. Controls and Procedures 18
Part II Other Information
Item 1. Legal Proceedings 22
Item 1A. Risk Factors 22
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 22
Item 3. Defaults Upon Senior Securities 22
Item 4. Submission of Matters to a Vote of Security Holders 22
Item 5. Other Information 22
Item 6. Exhibits 23
Signatures 24
2
Part I. Financial Information
Item 1. Financial Statements
EnzymeBioSystems
(A Development Stage Company)
Unaudited Interim Balance Sheets
September 30, June 30,
2011 2011
------------ ------------
ASSETS
Current Assets:
Cash and cash equivalents $ 32,484 $ 56,184
Prepaid expense 220 -
------------ ------------
Total current assets 32,704 56,184
------------ ------------
TOTAL ASSETS $ 32,704 $ 56,184
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 246 $ 400
Accrued expenses 7,600 8,700
Credit card payable - 463
Due to related party 1,390 1,390
------------ ------------
Total current liabilities 9,236 10,953
------------ ------------
Stockholders' equity:
Preferred stock, $0.001 par value, 5,000,000
shares authorized, 1,000,000 and 1,000,000
issued and outstanding as of 9/30/11 and
6/30/11, respectively 1,000 1,000
Common stock, $0.001 par value, 195,000,000
shares authorized, 31,500,000 and 31,500,000
shares issued and outstanding as of 9/30/11
and 6/30/11, respectively 31,500 31,500
Additional Paid-in Capital 185,000 182,500
(Deficit) accumulated during
development stage (194,032) (169,769)
------------ ------------
Total stockholders' equity 23,468 45,231
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 32,704 $ 56,184
============ ============
The accompanying notes are an integral part of these financial statements.
3
EnzymeBioSystems
(A Development Stage Company)
Unaudited Condensed Interim Statements of Operations
For the
For the three months From
three months ended June 26, 2009
ended September 30, (inception) to
September 30, 2010 September 30,
2011 (Restated) 2011
-------------- -------------- --------------
REVENUE $ - $ - $ -
OPERATING EXPENSES:
General & administrative 8,652 7,528 85,223
Research & development 9,611 10,690 74,474
Research & development
reimbursement - - (10,976)
Salaries 6,000 6,000 39,000
-------------- -------------- --------------
Total operating expenses 24,263 24,218 187,721
-------------- -------------- --------------
Loss from operations (24,263) (24,218) (187,721)
OTHER EXPENSES:
Loss on impairment of
furniture and equipment - - (6,311)
-------------- -------------- --------------
Total other expense - - (6,311)
-------------- -------------- --------------
Net (loss) before income taxes (24,263) (24,218) (194,032)
Provision for income tax - - -
-------------- -------------- --------------
NET (LOSS) $ (24,263) $ (24,218) $ (194,032)
============== ============== ==============
BASIC LOSS PER SHARE $ (0.00) $ (0.00)
============== ==============
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING -
BASIC AND FULLY DILUTED 31,500,000 31,500,000
============== ==============
The accompanying notes are an integral part of these financial statements.
4
EnzymeBioSystems
(A Development Stage Company)
Unaudited Condensed Interim Statement of Cash Flows
For the
For the three months From
three months ended June 26, 2009
ended September 30, (inception) to
September 30, 2010 September 30,
2011 (Restated) 2011
-------------- -------------- --------------
OPERATING ACTIVITIES
Net (loss) $ (24,263) $ (24,218) $ (194,032)
Adjustments to reconcile
net loss to net cash
used by operating
activities:
Increase (decrease) in:
Accounts payable (154) (1,063) 246
Accrued expense (1,100) (2,000) 7,600
Credit card payable (463) (1,008) -
Depreciation - - 906
Impairment of asset - - 6,311
Donated services 2,500 2,500 20,000
Customer deposits - 50,000 -
Prepaid expense (220) - (220)
-------------- -------------- --------------
Cash (used) by
operating activities (23,700) 24,211 (159,189)
INVESTING ACTIVITIES
Purchase of furniture and
equipment - - (7,317)
Sale of furniture and
equipment - - 100
-------------- -------------- --------------
Cash (used) by
investing activities - - (7,217)
FINANCING ACTIVITIES
Sale of preferred stock - - 150,000
Sale of common stock - - 40,500
Contributed capital - 2,000 7,000
Due to related party - - 1,390
-------------- -------------- --------------
Cash provided by
financing activities - 2,000 198,890
-------------- -------------- --------------
NET INCREASE IN CASH (23,700) 26,211 32,484
CASH AND EQUIVALENTS -
BEGINNING OF PERIOD 56,184 5,913 -
-------------- -------------- --------------
CASH AND EQUIVALENTS -
END OF PERIOD $ 32,484 $ 32,124 $ 32,484
============== ============== ==============
SUPPLEMENTAL DISCLOSURES:
Interest paid $ - $ - $ -
Income taxes paid $ - $ - $ -
Non-cash transactions $ 2,500 $ 2,500 $ 26,311
The accompanying notes are an integral part of these financial statements.
5
EnzymeBioSystems
(A Development Stage Company)
Notes to the Condensed Interim Financial Statements
September 30, 2011
(Unaudited)
NOTE 1 - CONDENSED INTERIM FINANCIAL STATEMENTS
The accompanying financial statements have been prepared by the Company
without audit. In the opinion of management, all adjustments (which include
only normal recurring adjustments) necessary to present fairly the financial
position, results of operations and cash flows at September 30, 2011 and for
all periods presented have been made.
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. It
is suggested that these condensed financial statements be read in conjunction
with the financial statements and notes thereto included in the Company's
June 30, 2011 audited financial statements. The results of operations for
the period ended September 30, 2011 are not necessarily indicative of
the operating results for the full year.
Basis of Presentation
---------------------
In the opinion of management, the accompanying balance sheets and related
interim statements of income, cash flows, and stockholders' equity include
all adjustments, consisting only of normal recurring items, necessary for
their fair presentation in conformity with accounting principles generally
accepted in the United States of America ("U.S. GAAP"). Preparing financial
statements requires management to make estimates and assumptions the affect
the reported amounts of assets, liabilities, revenue and expenses. Actual
results and outcomes may differ from management's estimates and assumptions.
Interim results are not necessarily indicative of results for a full year.
The information included in this Form 10-Q should be read in conjunction
with information included in the Form 10-K.
6
EnzymeBioSystems
(A Development Stage Company)
Notes to the Condensed Interim Financial Statements
September 30, 2011
(Unaudited)
NOTE 2 - GOING CONCERN
These condensed financial statements have been prepared in accordance with
generally accepted accounting principles applicable to a going concern
which contemplates the realization of assets and the satisfaction of
liabilities and commitments in the normal course of business. As of
September 30, 2011, the Company has not recognized any revenues and has
accumulated operating losses of approximately $194,032 since inception.
The Company's ability to continue as a going concern is contingent upon
the successful completion of additional financing arrangements and its
ability to achieve and maintain profitable operations. Management plans
to raise equity capital to finance the operating and capital requirements
of the Company. Amounts raised will be used to further development of the
Company's products, to provide financing for marketing and promotion, to
secure additional property and equipment, and for other working capital
purposes. While the Company is putting forth its best efforts to achieve
the above plans, there is no assurance that any such activity will generate
funds that will be available for operations.
These conditions raise substantial doubt about the Company's ability to
continue as a going concern. These financial statements do not include
any adjustments that might arise from this uncertainty.
NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
----------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Recent Accounting Pronouncements
--------------------------------
The Company's management has evaluated all the recently issued accounting
pronouncements through the filing date of these financial statements and does
not believe that any of these pronouncements will have a material impact on
the Company's financial position and results of operations.
7
EnzymeBioSystems
(A Development Stage Company)
Notes to the Condensed Interim Financial Statements
September 30, 2011
(Unaudited)
NOTE 4 - RESTATEMENT
Due to an accounting error, the Company has restated its financial
statements as of and for the three months ended September 30, 2010 to
reflect a correction to an understatement of transfer agent fees
expenses for the three month period of $200. The Company's summarized
financial statements comparing the restated financial statements to those
originally filed are as follows:
For the three
months ended
September 30, 2010
------------------
Original Restated Change
-------- -------- --------
STATEMENT OF OPERATIONS
EXPENSES:
Total expenses 24,018 24,218 200
-------- -------- --------
Net (loss) $(24,018)$(24,218)$ (200)
======== ======== ========
STATEMENT OF CASH FLOWS
OPERATING ACTIVITIES
Net (loss) $(24,018)$(24,218)$ (200)
Accounts payable (1,263) (1,063) 200
-------- -------- --------
Net cash (used) by
operating activities 24,211 24,211 -
-------- -------- --------
8
EnzymeBioSystems
(A Development Stage Company)
Notes to the Condensed Interim Financial Statements
September 30, 2011
(Unaudited)
NOTE 5 - RELATED PARTY TRANSACTIONS
The officers and directors of the Company are involved in other business
activities and may, in the future, become involved in other business
opportunities. If a specific business opportunity becomes available, such
persons may face a conflict in selecting between the Company and their other
business interests. The Company has not formulated a policy for the
resolution of such conflicts.
NOTE 6 - CONTRIBUTED CAPITAL
During the three months ending September 30, 2011, the Company's corporate
counsel agreed to prepare, write, EDGARize and provide legal opinion for the
Company's interim reports and Form 10 filing, which the law firm valued at
$2,500. The law firm decided to contribute this capital to help build
goodwill for its law firm.
NOTE 7 - SUBSEQUENT EVENTS
The Company has evaluated subsequent events from September 30, 2011 through
the date the financial statements are issued, and has determined that no
such events have occurred.
9
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Item 2. - Management's Discussion and Analysis of Financial Condition and
Results of Operations
Forward-Looking Information
The Company may from time-to-time make written or oral "forward-looking
statements" including statements contained in this report and in other
communications by the Company, which are made in good faith by the Company
pursuant to the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995.
These forward-looking statements include statements of the Company's plans,
objectives, expectations, estimates and intentions, which are subject to
change based on various important factors (some of which are beyond the
Company's control). The following factors, in addition to others not listed,
could cause the Company's actual results to differ materially from those
expressed in forward looking statements: the strength of the domestic and
local economies in which the Company conducts operations, the impact of
current uncertainties in global economic conditions and the ongoing
financial crisis affecting the domestic and foreign banking system and
financial markets, including the impact on the Company's suppliers and
customers, changes in client needs and consumer spending habits, the impact
of competition and technological change on the Company, the Company's
ability to manage its growth effectively, including its ability to
successfully integrate any business which it might acquire, and currency
fluctuations. All forward-looking statements in this report are based upon
information available to the Company on the date of this report. The Company
undertakes no obligation to publicly update or revise any forward-looking
statement, whether as a result of new information, future events, or
otherwise, except as required by law.
Critical Accounting Policies
----------------------------
There have been no material changes to our critical accounting policies and
estimates from the information provided in Item 7, "Management's Discussion
and Analysis of Financial Condition and Results of Operations", included in our
Annual Report on Form 10-K for the fiscal year ended June 30, 2011.
10
Results of Operations
---------------------
Overview of Current Operations
------------------------------
EnzymeBioSystems was formed on June 26, 2009 as a Nevada corporation.
We are a startup company that plans to manufacture specialty enzymes and
enzyme related products. Activities to date have been limited primarily to
organization, initial capitalization, establishing administrative offices in
Chargrin, Falls, Ohio, and commencing our initial operational plans. As of
the date of this offering circular, the Company has developed a business
plan, established administrative offices and started obtaining laboratory
equipment to build its laboratory.
Enzymes can be categorized as "enzyme inhibitors" and "enzyme activators."
Enzyme inhibitors are molecules that bind to enzymes and decrease their
activity. Since blocking an enzyme's activity can kill a pathogen or correct
a metabolic imbalance, many drugs are enzyme inhibitors. Enzyme activators
are molecules that bind to enzymes and increase their activity. These
molecules are often involved in the allosteric [defined as having to do with
a protein with a structure that is altered reversibly by a small molecule so
that its original function is modified] regulation of enzymes in the control
of metabolism. Both enzyme inhibitors and enzyme activators are currently
used by many pharmaceutical and biotechnology companies in research and
development of new drug compounds.
Enzymes also can be used as pharmaceutical products. Enzymes as
pharmaceuticals have two important features that distinguish them from all
other types of pharmaceutical products. First, enzymes often bind and act on
their targets with great affinity and specificity. Second, enzymes are
catalytic and convert multiple target molecules to the desired products.
These two features make are considered specialized enzymes that can
accomplish therapeutic biochemistry in the body that small molecules cannot.
These characteristics have resulted in the development of many enzyme drugs
for a wide range of disorders, e.g. insulin and interferon.
We plan to deploy our enzyme technologies across diverse markets that
represent commercial opportunities in helping us build visibility for
EnzymeBioSystems. This includes building our reputation in the scientific
community through trade publications and protecting our intellectual property
and technology through the patent process.
Management is evaluating an enzyme compound which it believes has a specific
therapeutic value in fighting tumors. In an effort to evaluate this
compound, management, on or about July 9, 2010 entered into an agreement
with Northeastern Ohio Universities College of Medicine d/b/a Northeastern
Ohio Universities Colleges of Medicine and Pharmacy in Rootstown, Ohio, to
perform rat studies. The research will study a series of semisynthetic
penicillins and cephalosporins containing structural fragments of the
well-known antitumor
11
antibiotic sarcomycin. Specifically, the two areas of this study will
include: 1) an examination of the in vitro cytotoxicity of penicillin
analogs against hepatocellular carcinoma cells; and 2) Investigate the
dose-responsive antitumor actions of penicillin analogs against
chemically-induced hepatic tumorigenesis in rats.
Management hopes this research with identify an enzyme compound developed by
the Company that will lead to the filing of an Investigational New Drug
Application ("IND") with the U. S. Food and Drug Administration. It is still
too early to determine if this project has any potential value for the
Company, and there are no assurances that the Company will ever obtain be
able to obtain an IND for this compound.
We currently have only limited resources and capability to develop,
manufacture, market, sell, or distribute specialty enzyme products on a
commercial scale. We will determine which specialty enzyme products to
pursue independently based on various criteria, including: investment
required, estimated time to market, regulatory hurdles, infrastructure
requirements, and industry-specific expertise necessary for successful
commercialization. At any time, we may modify our strategy and pursue
collaborations for the development and commercialization of some specialty
enzyme products that we had intended to pursue independently. In order for
us to commercialize more specialty enzyme products directly, we plan to
establish or obtain through outsourcing arrangements additional capability to
develop, manufacture, market, sell, and distribute such products.
Marketing Strategy
------------------
Through our future independent and collaborative research and development
programs, we plan to develop commercial enzyme products across multiple
markets. In addition, we plan to develop a pipeline of enzyme product
candidates that we expect to launch independently and/or in collaboration
with strategic partners. Once we develop our innovative enzyme products, we
plan to send samples of these products to potential customers. This will
give them an opportunity to evaluate our products as compared to the enzymes
they are purchasing from our competition.
Competition
-----------
Our competitors have substantially greater financial, technical, and
marketing resources than we do and may succeed in developing products that
would render our products obsolete or noncompetitive. In addition, many of
these competitors have significantly greater experience than we do in their
respective fields. Our ability to compete successfully will depend on our
ability to develop proprietary products that reach the market in a timely
manner and are technologically superior to, and/or are less expensive than,
other products on the market. Current competitors or other companies may
develop technologies and products that are more effective than ours. Our
technologies and products may be rendered obsolete or uneconomical by
technological advances or entirely different approaches developed by one or
more of our competitors.
12
Any enzyme products that we develop will compete in multiple, highly
competitive markets. For example, Codexis, Maxygen, Inc., Evotec, and Xencor
have alternative evolution technologies. Integrated Genomics Inc., Myriad
Genetics, Inc., and ArQule, Inc. perform screening, sequencing, and/or
bioinformatics services. Novozymes A/S, Verenium Corporation, Genencor
International Inc. and MPBiomedicals are involved in development,
overexpression, fermentation, and purification of enzymes. Many of these
competitors have significantly greater financial and human resources than we
do. We believe that the principal competitive factors in our market are
access to genetic material, technological experience and expertise, and
proprietary position.
Our Growth Strategy
-------------------
Management is preparing a number of trade articles to publish in research
and medical journals on the theoretical and practical applications of enzyme
research. Management hopes these articles will give the Company some
notoriety among enzyme researchers/users. The articles are being prepared
for the direct purpose of selling our research applications to research
facilities and end users. If enzyme researchers/users are intrigued by the
applications discussed in the research articles, management believes these
researches/users will become future customers and purchase specialty enzymes
from EnzymeBioSystems. Also, management hopes to position the Company,
whereby it receives royalties from the enzyme applications it develops and
markets.
Results of Operations for the three months ended September 30, 2011
-------------------------------------------------------------------
During the three month period ended September 30, 2011, the Company did not
generate any revenues. In addition, the Company does not expect to generate
any profit for the next twelve months.
For the three months ending September 30, 2011, we experienced a net loss of
$(24,263) as compared to a net loss of $(24,218) for the same period last
year. The net loss for the three months ending September 30, 2011 was
attributed to administrative fees of $8,652, research and development of
$9,611 and salaries of $6,000.
13
Revenues
--------
The Company has generated no revenues since its inception. As of
September 30, 2011, the Company had an accumulated deficit of $(194,032)
dollars. There can be no assurances that the Company can achieve or sustain
profitability or that the Company's operating losses will not increase in the
future.
Plan of Operation
-----------------
Management does not believe that the Company will be able to generate any
significant profit during the coming year. Management believes developmental
and marketing costs will most likely exceed any anticipated revenues for the
coming year. Management is evaluating an enzyme compound which it believes
has a specific therapeutic value in fighting tumors. On or about July 9,
2010, management entered into agreement an with Northeastern Ohio
Universities College of Medicine d/b/a Northeastern Ohio Universities
Colleges of Medicine and Pharmacy in Rootstown, Ohio, to perform rat
studies. The research will study a series of semisynthetic penicillins and
cephalosporins containing structural fragments of the well-known antitumor
antibiotic sarcomycin. Specifically, the two areas of this study will
include: 1) an examination of the in vitro cytotoxicity of penicillin
analogs against hepatocellular carcinoma cells; and 2) Investigate the
dose-responsive antitumor actions of penicillin analogs against
chemically-induced hepatic tumorigenesis in rats.
Management hopes this research with identify an enzyme compound developed
by the Company that will lead to the filing of an Investigational New Drug
Application ("IND") with the U. S. Food and Drug Administration. It is
still too early to determine if this project has any potential value for
the Company, and there are no assurances that the Company will ever obtain
be able to obtain an IND for this compound.
Management intends to personally finance EnzymeBioSystems, without
seeking reimbursement, to ensure that the Company has enough funds to operate
for the next twelve (12) months without the need to raise additional capital
to meet its fully reporting obligations in its normal course of business.
Future funding could result in potentially dilutive issuances of equity
securities, the incurrence of debt, contingent liabilities and/or
amortization expenses related to goodwill and other intangible assets, which
could materially adversely affect the Company's business, results of
operations and financial condition. Any future acquisitions of other
businesses, technologies, services or product(s) might require the Company to
obtain additional equity or debt financing, which might not be available on
terms favorable to the Company, or at all, and such financing, if available,
might be dilutive.
14
Going Concern
-------------
Our independent auditors included an explanatory paragraph in their report
on the June 30, 2011 audited financial statements regarding concerns about
our ability to continue as a going concern. Our financial statements
contain additional note disclosures describing the circumstances that lead
to this disclosure by our independent auditors.
Summary of any product research and development that we will perform for the
term of our plan of operation.
-----------------------------------------------------------------------------
We plan to deploy our enzyme technologies across diverse markets that
represent commercial opportunities in helping us build visibility for
EnzymeBioSystems. We plan to use enzyme technologies to develop commercial
solutions for a broad range of applications within the specialty chemical
industry. These markets are largely served by a small number of large,
well-established businesses and research university centers. We plan to
work collaboratively with those industrial companies to develop
differentiated, high performance enzyme solutions for their target markets,
and to leverage their well-developed distribution capabilities to better
exploit commercial opportunities.
We believe that this market approach might give us the ability to broadly
apply our enzyme development and manufacturing capabilities while minimizing
commercial risk in that research or pharmaceutical companies might change
their needs during our development processes. We view our enzyme development
and manufacturing capabilities as: 1) Computer-based methods of predicting
the affinity of an inhibitor or activator for an enzyme, such as molecular
docking. Docking is used to predict the binding orientation of small
molecule drug candidates to their protein targets in order to in turn predict
the affinity and activity of the small molecule. This plays an important
role in the rational design of drugs; and, 2) Deployment of new catalytic
systems immobilized on inorganic nano-particles in our technologies.
Expected purchase or sale of plant and significant equipment.
-------------------------------------------------------------
We opened a laboratory where are producing enzymes on a small scale, we are
in the process of developing additional enzymes products.
Significant changes in the number of employees.
-----------------------------------------------
As of September 30, 2011, we did not have any employees. We are dependent upon
our two officers for our future business development. As our operations
expand we anticipate the need to hire additional employees, consultants and
professionals; however, the exact number is not quantifiable at this time.
15
Liquidity and Capital Resources
-------------------------------
The Company is authorized to issue 195,000,000 shares of its $0.001 par value
common stock and 5,000,000 shares of its $0.001 par value preferred stock.
As of November 16, 2011, the Company has 31,500,000 shares of common stock
issued and outstanding and 1,000,000 of its Series A Preferred Shares issued
and outstanding. As of September 30, 2011, the Company had current assets of
$32,704 and current liabilities of $9,236.
On January 28, 2011, the company entered into an Exclusive Technology
License and Patents Agreement with an accredited investor to help fund the
operations of the Company, especially its IND project with Northeastern Ohio
Universities College of Medicine d/b/a Northeastern Ohio Universities
Colleges of Medicine and Pharmacy in Rootstown, Ohio. The accrediated
investor entered into this exclusive licensing agreement and issued one
million of its Series A Preferred shares in exchange for $150,000.
The Company has limited financial resources available, which has had an
adverse impact on the Company's liquidity, activities and operations.
In order for the Company to remain a Going Concern it will need to find
additional capital or generate revenues. Additional working capital may be
sought through additional debt or equity private placements, additional notes
payable to banks or related parties (officers, directors or stockholders),
or from other available funding sources at market rates of interest, or a
combination of these. The ability to raise necessary financing will depend
on many factors, including the nature and prospects of any business to be
acquired and the economic and market conditions prevailing at the time
financing is sought. No assurances can be given that any necessary financing
can be obtained on terms favorable to the Company, or at all.
Our officers have agreed to donate funds to the operations of the Company,
in order to keep it fully reporting for the next twelve (12) months, without
seeking reimbursement for funds donated.
16
Off-Balance Sheet Arrangements
------------------------------
We do not have any off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on our financial condition, changes
in financial condition, revenues or expenses, results or operations,
liquidity, capital expenditures or capital resources that is material to
investors.
Critical Accounting Policies and Estimates
------------------------------------------
Revenue Recognition: We recognize revenue from product sales once all of the
following criteria for revenue recognition have been met: pervasive evidence
that an agreement exists; the services have been rendered; the fee is fixed
and determinable and not subject to refund or adjustment; and collection of
the amount due is reasonable assured.
New Accounting Standards
------------------------
The Company's management has evaluated all the recently issued accounting
pronouncements through the filing date of these financial statements and does
not believe that any of these pronouncements will have a material impact on
the Company's financial position and results of operations.
17
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
Not applicable.
Item 4T. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
------------------------------------------------
Our disclosure controls and procedures, as defined in Rule 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), are designed to ensure that information required to be
disclosed in reports filed or submitted under the Exchange Act is recorded,
processed, summarized, and reported within the time periods specified in
rules and forms adopted by the SEC, and that such information is accumulated
and communicated to management, including the Chief Executive Officer and
the Chief Financial Officer, to allow timely decisions regarding required
disclosures.
Management, with the participation of the Chief Executive Officer and the
Chief Financial Officer, have evaluated the effectiveness of our disclosure
controls and procedures as of the end of the period covered by this report.
Based on such evaluation, the Chief Executive Officer and the Chief Financial
Officer concluded that, our disclosure controls and procedures were not
effective. Our disclosure controls and procedures were not effective because
of the "material weaknesses" described below under "Management's report on
internal control over financial reporting," which are in the process of being
remediated as described below under "Management Plan to Remediate Material
Weaknesses."
Management's Report on Internal Control over Financial Reporting
----------------------------------------------------------------
Our management is responsible for establishing and maintaining adequate
internal control over financial reporting. Internal control over financial
reporting, as defined in rules promulgated under the Exchange Act, is a
process designed by, or under the supervision of, our Chief Executive Officer
and Chief Financial Officer and affected by our Board of Directors,
management and other personnel to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with GAAP. Internal control
over financial reporting includes those policies and procedures that:
o pertain to the maintenance of records that in reasonable detail accurately
and fairly reflect the transactions and dispositions of our assets;
o provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with GAAP, and that
our receipts and expenditures are being made only in accordance with
authorizations of our management and our Board of Directors; and
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o provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of our assets that could have
a material effect on our financial statements
Because of its inherent limitations, a system of internal control over
financial reporting can provide only reasonable, not absolute, assurance
that the objectives of the control system are met and may not prevent or
detect misstatements. Internal control over financial reporting is a process
that involves human diligence and compliance and is subject to lapses in
judgment and breakdowns resulting from human failures. Internal control
over financial reporting also can be circumvented by collusion or improper
override. Because of such limitations, there is a risk that material
misstatements may not be prevented or detected on a timely basis by internal
control over financial reporting. However, these inherent limitations are
known features of the financial reporting process, and it is possible to
design into the process safeguards to reduce, though not eliminate, this
risk. Further, over time control may become inadequate because of changes in
conditions or the degree of compliance with the policies or procedures may
deteriorate.
Our management assessed the effectiveness of our internal control over
financial reporting as of June 30, 2011. In making its assessment,
management used the criteria established in Internal Control-Integrated
Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission ("COSO"). Based on its assessment, management has
concluded that we had certain control deficiencies described below that
constituted material weaknesses in our internal controls over financial
reporting. As a result, our internal control over financial reporting was
not effective as of June 30, 2011.
A "material weakness" is defined under SEC rules as a deficiency, or a
combination of deficiencies, in internal control over financial reporting
such that there is a reasonable possibility that a material misstatement of
a company's annual or interim financial statements will not be prevented or
detected on a timely basis by the company's internal controls. As a result
of management's review of the investigation issues and results, and other
internal reviews and evaluations that were completed after the end of
quarter related to the preparation of management's report on internal
controls over financial reporting required for this quarterly report on
Form 10-Q/A, management concluded that we had material weaknesses in our
control environment and financial reporting process consisting of the
following:
1) lack of a functioning audit committee due to a lack of a majority of
independent members and a lack of a majority of outside directors on our
board of directors, resulting in ineffective oversight in the establishment
and monitoring of required internal controls and procedures;
2) inadequate segregation of duties consistent with control objectives;
3) ineffective controls over period end financial disclosure and reporting
processes.
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We do not believe the material weaknesses described above caused any
meaningful or significant misreporting of our financial condition and results
of operations for the fiscal year ended June 30, 2011. However, management
believes that the lack of a functioning audit committee and the lack of a
majority of outside directors on our board of directors results in
ineffective oversight in the establishment and monitoring of required
internal controls and procedures, which could result in a material
misstatement in our financial statements in future periods.
Management Plan to Remediate Material Weaknesses
------------------------------------------------
Management is pursuing the implementation of corrective measures to address
the material weaknesses described below. In an effort to remediate the
identified material weaknesses and other deficiencies and enhance our
internal controls, we have initiated, or plan to initiate, the following
series of measures:
We will create a position to segregate duties consistent with control
objectives and will increase our personnel resources and technical accounting
expertise within the accounting function when funds are available to us.
We plan to appoint one or more outside directors to our board of directors who
shall be appointed to an audit committee resulting in a fully functioning audit
committee who will undertake the oversight in the establishment and monitoring
of required internal controls and procedures such as reviewing and approving
estimates and assumptions made by management when funds are available to us.
We believe the remediation measures described above will remediate the
material weaknesses we have identified and strengthen our internal control
over financial reporting. We are committed to continuing to improve our
internal control processes and will continue to diligently and vigorously
review our financial reporting controls and procedures. As we continue to
evaluate and work to improve our internal control over financial reporting,
we may determine to take additional measures to address control deficiencies
or determine to modify, or in appropriate circumstances not to complete,
certain of the remediation measures described above.
Changes in Internal Control over Financial Reporting
----------------------------------------------------
There were no changes in our internal control over financial reporting (as
such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act)
during the most recent fiscal quarter that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.
This amended quarterly report does not include an attestation report of the
Corporation's registered public accounting firm regarding internal control
over financial reporting. Management's report was not subject to attestation
by the Corporation's registered public accounting firm pursuant to temporary
rules of the SEC that permit the Corporation to provide only the management's
report in this quarterly report.
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(c) Changes in internal controls over financial reporting
----------------------------------------------------------
There was no change in our internal controls over financial reporting that
occurred during the period covered by this report, that has materially
affected, or is reasonably likely to materially affect, our internal controls
over financial reporting.
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PART II. OTHER INFORMATION
Item 1 -- Legal Proceedings
From time to time, we may become involved in various lawsuits and legal
proceedings, which arise in the ordinary course of business. However,
litigation is subject to inherent uncertainties, and an adverse result in
these or other matters may arise from time to time that may harm our
business.
We are not presently a party to any material litigation, nor to the knowledge
of management is any litigation threatened against us, which may materially
affect us.
Item 1A - Risk Factors
See Risk Factors set forth in Part I, Item 1A of the Company's Annual Report
on Form 10-K for the fiscal year ended June 30, 2011 and the discussion in
Item 1, above, under " Liquidity and Capital Resources."
Item 2 -- Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3 -- Defaults Upon Senior Securities
None.
Item 4 -- Submission of Matters to a Vote of Security Holders
None.
Item 5 -- Other Information
None.
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Item 6 -- Exhibits
Filed Period Filing
Exhibit Exhibit Description herewith Form ending Exhibit date
-------------------------------------------------------------------------------
3.1 Articles of Incorporation, S-1 6/30/09 3.1 09/28/2009
as currently in effect
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3.2 Bylaws S-1 6/30/09 3.2 09/28/2009
as currently in effect
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3.3 Articles of Designation, 8-K 1/28/11 3.3 02/01/2011
dated January 13, 2011.
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10.1 Agreement between 10-K 6/30/10 10.1 10/13/2010
EnzymeBioSystems and
Northeastern Ohio Universities
College of Medicine, dated
July 9, 2010
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10.2 Exclusive Technology License 8-K 1/28/11 3.3 02/01/2011
and Patents Agreement between
EnzymeBioSystems and Berkeley
Clinic LC, dated January 28, 2011
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99.1 Subscription Agreement S-1 6/30/09 99.1 09/28/2009
-------------------------------------------------------------------------------
31.1 Certification of its X
Principal Executive Officer,
pursuant to Section 302
of the Sarbanes-Oxley Act
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31.2 Certification of its X
Principal Financial Officer,
pursuant to Section 302
of the Sarbanes-Oxley Act
-------------------------------------------------------------------------------
32.1 Certification of its X
Principal Executive Officer
pursuant to Section 906
of the Sarbanes-Oxley Act
-------------------------------------------------------------------------------
32.2 Certification of its X
Principal Financial Officer,
pursuant to Section 906
of the Sarbanes-Oxley Act
-------------------------------------------------------------------------------
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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 hereunto duly authorized.
EnzymeBioSystems
--------------------------
Registrant
Date: November 16, 2011 By: /s/ Ashot Martirosyan
----------------- -------------------------------------------
By: Ashot Martirosyan
Its: Principal Executive Officer
Date: November 16, 2011 By: /s/ Anushavan Yeranosyan
----------------- ------------------------------------------
By: Anushavan Yeranosyan
Its: Principal Accounting Officer
24