SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB/A
(MARK ONE)
|X| ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year ended June 30, 1999
|_| TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from______________to_______________
Commission File Number 0-24875
BIOENVISION INC.
(Name of small business issuer in its charter)
DELAWARE 11-3375915
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
ONE ROCKEFELLER PLAZA - SUITE 1600
NEW YORK, NEW YORK 10020
(Address of principal executive offices)
Issuer's telephone number: (212) 445-6581
Securities registered under Section 12(b) of the Exchange Act: None
Securities registered pursuant to Section 12(g) of the Exchange Act:
Common Stock, $0.001 par value per share
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or 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 |_|.
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Check if there is no disclosure of delinquent filers pursuant to Item 405
of Regulation S-B not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to the Form 10-KSB. [_]
The issuer's revenues for its most recent fiscal year were $-0-.
The aggregate market value of the voting stock held by non-affiliates
computed by reference to the price at which the stock was sold, or the average
bid and asked prices of such stock, as of October 12, 1999, was $1,066,712.
ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDING DURING THE PAST FIVE YEARS
Check whether the issuer has filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes |_| No |_|.
APPLICABLE ONLY TO CORPORATE REGISTRANTS
The number of shares outstanding of the issuer's common stock, $0.001 par value,
as of October 12, 1999 was 7,249,147.
Documents Incorporated by Reference: None.
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ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
OVERVIEW
The Company was organized in August 1996 for the purpose of acting as a
publicly traded holding company for Mayhem Ltd., a United Kingdom corporation.
That purpose was never realized and prior to the change in control of the
Company in January 1999, the Company did not engage in any active trade or
business. The Company is considered a development-stage company for accounting
purposes because it has not generated any material revenues to date.
Accordingly, the Company has no relevant operating history upon which an
evaluation of the Company's performance and prospects can be made. Moreover, the
Company is still subject to all of the business risks associated with a new
enterprise, including, but not limited to, risks of unforeseen capital
requirements, lack of fully developed products, failure of market acceptance,
failure to establish business relationships, reliance on outside contractors for
the manufacture and distribution of proposed products, and competitive
disadvantages as against larger and more established companies. The likelihood
of the success of the Company must be considered in light of the development
cycles of new pharmaceutical products and technologies and the competitive and
regulatory environment in which the Company operates.
The company is an international biopharmaceutical company primarily
engaged in the research and development of products and technologies for the
treatment of cancer. During its development stage the Company has been primarily
engaged in organizational activities, including developing a strategic operating
plan, entering into various collaborative agreements for the development of
products and technologies, hiring personnel and developing and testing its
products. The Company plans to begin marketing its lead product, Modrefen, on a
commercial scale in the U.K. prior to the end of December of 1999. The Company
has assembled the core of its management team, which includes a Chairman of the
Board and Chief Executive Officer, two Senior Vice Presidents and Chief Medical
Officer.
PLAN OF OPERATIONS
The Company has acquired development and marketing rights to a portfolio
of four platform technologies developed over the past fifteen years, from which
seven products and five product candidates have been derived and additional
products may be developed in the future. Although the Company intends to
commence marketing its lead product, Modrefen, and to continue developing its
existing platform technologies and commercializing products derived from such
technologies, a key element of the Company's business strategy is to continue to
acquire, in-license and develop new technologies and products that the Company
believes offer unique market opportunities and/or complement the Company's
existing product lines. Once a product or technology has been launched into the
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market for a particular disease indication, the Company plans to work with
numerous collaborators, both pharmaceutical and clinical, in the oncology
community to extend the labeling of the drug to other indications. In order to
market its products effectively, the Company intends to develop marketing
alliances with strategic partners and may co-promote and/or co-market in certain
territories.
LIQUIDITY AND CAPITAL RESOURCES
From the period of its inception through December 1998, the Company did
not engage in any active trade or business. In January 1999, the Company
consummated a merger with Old Bioenvision by effecting a 1-for-15 reverse stock
split of its then outstanding shares of Common Stock and thereafter issuing
7,013,897 post-reverse split shares of Common Stock to the former stockholders
of Old Bioenvision in exchange for all of the issued and outstanding shares of
capital stock of Old Bioenvision. Consequently, upon consummation of the merger,
the former stockholders of Old Bioenvision became the controlling stockholders
of the Company, Old Bioenvision became a wholly-owned subsidiary of the Company
and changed its name to Bionco Marketing Inc., and the Company changed its name
from Ascot Group Inc. to Bioenvision Inc.
To date, the Company has incurred significant net losses, including net
losses of $1,206,265 (L765,154) for the fiscal year ended June 30, 1998 and net
losses of $780,671 (L495,193) for the fiscal year ended June 30, 1999. The
Company had an accumulated deficit of $1,319,835 (L837,193) at June 30, 1998 and
$2,100,506 (L1,332,386) at June 30, 1999 and, since that date, the Company has
continued to incur significant and increasing losses. The Company anticipates
that it may continue to incur significant operating losses for the foreseeable
future. There can be no assurance as to whether or when the Company will
generate material revenues or achieve profitable operations. The Company's
independent public accountants have included an explanatory paragraph in their
report on the Company's financial statements, stating that certain factors raise
substantial doubt about the Company's ability to continue as a going concern.
In the year ended June 30, 1999 administrative expenses totaled $597,933
(L379,279) compared to $1,086,995 (L689,499) for the year ended June 30, 1998.
The reduction in expenses is a result of the Company realizing cost savings
following reorganization during the year.
Research and development expenses were $157,650 (L100,000) in the year ended
June 30, 1999 compared to $-0- for the year ended June 30, 1998. The increase in
research and development costs is a result of the Company increasing its
research activities during 1999 in-line with the development of its products.
Based on its current operating plan, the Company believes that the
estimated minimum amount of net proceeds from its anticipated private financing
will be sufficient to meet its cash, operational and liquidity requirements for
at least 12 months following the completion of such financing, and that the
estimated maximum net proceeds from such private financing will be sufficient to
meet its cash, operational and liquidity requirements for at least 18 months
following the completion thereof. The Company may, however, require additional
financing within this time frame due to unanticipated changes in economic
conditions or other unforeseen circumstances. In the event the Company's plans
change or its assumptions change or prove to be inaccurate, the Company could be
required to seek additional financing sooner than currently anticipated. The
Company currently has an agreement with Glen Investments Limited, a Jersey
(Channel Islands) company wholly owned by Kevin R. Leech (a private investor who
is also the sole owner of Phoenix Ventures Limited, the holder of approximately
19% of the outstanding shares of Common Stock of the Company), whereby Glen
Investments has agreed to loan funds to the Company on an as-needed basis based
upon previously agreed budgets. A facility of pound one million is currently
available to the Company based on budgets that assume the above private
placement is successful. If the private placement proves to be unsuccessful,
Glen Investments Ltd. has agreed to support the Company for the forthcoming year
subject to satisfactory review of revised budgets. Any additional financing may
not, however, be available to the Company when needed on commercially reasonable
terms, or at all. If the Company is unable to obtain such additional financing,
the Company's operations will, in all likelihood, cease.
YEAR 2000 ISSUE
The year 2000 issue refers to the potential failures that computer systems
may incur as a result of the date change from 1999 to 2000. Many existing
computer programs use only two digits to identify a change of the century. As a
result, computer systems using these programs may be unable to properly
recognize date-sensitive data resulting in the creation of erroneous information
or system failure.
Although the Company does not currently have any computer or other systems
that may be susceptible to the year 2000 issue, the Company's products
are mostly being developed in various research institutions which may have
systems that are not year 2000 compliant. A possible worst case year 2000
scenario for the Company would be if the research institutions' systems failed.
If their networks fail for an extended period of time due to the
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year 2000 issue, the Company may no longer be able to continue developing and
testing its products. In the event such systems are not year 2000 compliant on a
timely basis, the Company will seek to develop and test its products at
institutions whose systems are year 2000 compliant. The Company has no assurance
that this can be accomplished in a timely or cost effective manner.
The Company is currently evaluating such year 2000 issues and their
potential impact on its business, and has commenced inquiries to determine the
status of preparations by the research institutions where the Company's products
are tested to become year 2000 compliant. Although the Company's management
expects to incur cots in correcting any year 2000 issues arising as a result of
such research institutions' handling of their own year 2000 issues, management
cannot currently estimate those costs. All such costs will be expensed as
incurred. The Company does not expect that the cost of addressing any year 2000
issue will be a material event or uncertainty that would cause its reported
financial information not to be necessarily indicative of future operating
results or future financial condition, or that the costs or consequences of
incomplete or untimely resolution of any year 2000 issue represent a known
material event or uncertainty that is reasonably likely to affect its future
financial results, or cause its reported financial information not to be
necessarily indicative of future operating results or future financial
condition. However, if the Company encounters any unanticipated delays in, or
costs associated with, the resolution of any year 2000 issue, the Company's
business, financial condition and results of operations could be materially
adversely affected.
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SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
has caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
BIOENVISION INC.
Date: October 28, 1999 By: /s/ Christopher B. Wood
-------------------------------------
Chairman of the Board and
Chief Executive Officer
In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
/s/ Christopher B. Wood Chairman of the Board and Chief October 28, 1999
- ----------------------------------- Executive Officer (Principal
Christopher B. Wood executive officer) and Director
/s/ Andrew Turner Senior Vice President-Finance and October 28, 1999
- ----------------------------------- Principal Accounting Officer
Andrew Turner (Principal financial and accounting
officer)
/s/ Stuart Smith Senior Vice President, Secretary October 28, 1999
- ----------------------------------- and Director
Stuart Smith
/s/ Christopher B. Wood Director October 28, 1999
- -----------------------------------
Christopher B. Wood
</TABLE>
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