UNITED STATES
SECURITIES EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
- -----------------------------------------------------------------
[X] Quarterly Report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended December 31, 1998
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BIOENVISION, INC.
(Exact name of registrant as specified in its charter)
f/k/a ASCOT GROUP INC.
Delaware 113375915
--------------- -------------------
State of Incorporation IRS Employer ID No.
City Center Bellevue, Suite 730
500 108th Avenue, Bellevue, WA 98004
- ------------------------------- --------------
Address of principal Executive Offices Zip Code
Registrant's Telephone Number (425) 990-6477
Check here whether the issuer (1) has filed all reports required
to be filed by Sections 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the
past 90 days.
Yes __X____ No_______
As of December 31, 1998, the following shares of the
Registrant's common stock were issued and outstanding:
Voting common stock 3,450,000
Traditional Small Business Disclosure (check one): Yes X No <PAGE>
<PAGE>
INDEX
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements . . . . . . . . . . . . . . . . .3
CONDENSED CONSOLIDATED BALANCE SHEET . . . . . . . . .4
CONDENSED CONSOLIDATED INCOME STATEMENT. . . . . . . .5
STATEMENT OF CASH FLOWS. . . . . . . . . . . . . . . .6
Note 1. NATURE OF BUSINESS AND SIGNIFICANT
ACCOUNTING POLICIES. . . . . . . . . . . . .8
Note 2. USE OF OFFICE SPACE. . . . . . . . . . . . .9
Note 3. EARNINGS PER SHARE . . . . . . . . . . . . .9
Note 4. LIQUIDITY . . . . . . . . . . . . . . . . . 9
Note 5. SUBSEQUENT EVENTS . . . . . . . . . . . . .10
Item 2. Management's Discussion And Analysis or Plan of
Operations. . . . . . . . . . . . . . . . . . . . . .11
PART II - OTHER INFORMATION
Item 1. Legal Proceedings. . . . . . . . . . . . . . . . . . 16
Item 2. Changes in Securities. . . . . . . . . . . . . . . . 16
Item 3. Defaults upon Senior Securities. . . . . . . . . . . 16
Item 4. Submission of Matters to a Vote of
Security Holders . . . . . . . . . . . . . . . . . . 17
Item 5. Other information. . . . . . . . . . . . . . . . . . 17
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . 17
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . 18
<PAGE>
<PAGE>
PART I - FINANCIAL INFORMATION
To the Board of Directors of Ascot Group, Inc.
Dover, DE
We have reviewed the accompanying balance sheet of Ascot Group
Inc., (a development stage company) as of December 31, 1998, and
the related statements of loss and retained earnings and cash
flows for the three months then ended, in accordance with
Statements on Standards for Accounting and Review Services issued
by the American Institute of Certified Public Accountants. All
information included in these financial statements is the
representation of the management of Ascot Group, Inc.
A review consists principally of inquiries of Company personnel
and analytical procedures applied to financial data. It is
substantially less in scope than an audit in accordance with
generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements
taken as a whole. Accordingly, we do not express such an
opinion.
Based on our review, we are not aware of any material
modifications that should be made to the accompanying financial
statements in order for them to be in conformity with generally
accepted accounting principles.
Peter J. Repetti
New York, New York
February 17, 1999
<PAGE>
<PAGE>
Item 1. Financial Statements
ASCOT GROUP INC.
(A Development Stage Company)
CONDENSED CONSOLIDATED BALANCE SHEET
<TABLE>
As Of As Of
Dec. 31, 1998 June 30, 1998
(Unaudited) (Audited)
--------------------------------
<S> <C> <C>
ASSETS
Current Assets
Cash $0 $0
Other Current Assets 0 0
_________ ________
Total Current Assets 0 0
Other Assets 0 0
_________ ________
TOTAL ASSETS $0 $0
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts Payable $0 $0
Accrued Expenses 3,725 12,450
_________ ________
Total Current Liabilities 3,725 12,450
Loan Payable 16,150 0
_________ ________
Total Liabilities 19,875 12,450
Stockholders' Equity
Common Stock, $.001 par value,
Authorized 25,000.000 Shares;
Issued and Outstanding
3,450,000 Shares 3,450 3,450
Additional Paid in Capital 41,950 30,550
Deficit Accumulated During the
Development Stage (65,275) (46,450)
_________ ________
Total Stockholders' Equity (19,875) (12,450)
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $0 $0
</TABLE>
The accompanying notes and accountant's report are an integral
part of these financial statements.<PAGE>
<PAGE>
ASCOT GROUP, INC.
(A Development Stage Company)
CONDENSED CONSOLIDATED STATEMENT OF LOSS
(Unaudited)
<TABLE>
For the 3 Mos Ended For the 6 Mos Ended
December 31 December 31
1998 1997 1998 1997
------------------------------------------
<S> <C> <C> <C> <C>
TOTAL REVENUES: $ 0 N/A 0 N/A
OPERATING EXPENSES:
Accounting 1,200 N/A 2,400 N/A
Legal 2,500 5,000
Rent 1,200 1,200
Filing Fee 12 25
________ _______ ________ ________
NET LOSS (4,912) N/A (8,625) N/A
NET LOSS PER SHARE (.00142) (.0025)
Weighted Average
Number of Shares
Outstanding 3,450,000 3,450,000
</TABLE>
The accompanying notes and accountant's report are an integral
part of these financial statements.
<PAGE>
<PAGE>
ASCOT GROUP, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS (unaudited)
<TABLE>
For the 3 mos For the 3 mos
Ended Ended
to to
Dec. 31, 1998 Dec. 31, 1997
________________________________________
<S> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net Loss $ (4,912) N/A
Adjustments to Reconcile Net Loss
to Net Cash Used in operating
Activities:
Changes in Assets and Liabilities
Decrease in Accounts Payable and
Accrued Expenses (1,238)
________ ________
Total Adjustments (1,238) N/A
Net Cash Used in
Operating Activities ( 6,150)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Increase in Additional Paid
in Capital 1,200
Increase in Loan Payable 4,950
Net Cash Provided
by Financing Activities 6,150
________ _______
Net Change in Cash 0 N/A
Cash at Beginning of Period 0
Cash at End of Period $ 0
Supplemental Disclosure of
Cash Flow Information
Cash Paid During the Period for
Interest Expense 0
Corporate Taxes $ 0
</TABLE>
The accompanying notes and accountant's report are an integral
part of these financial statements.<PAGE>
<PAGE>
ASCOT GROUP, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 1998
NOTE 1 - NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
A. Description of Company
Ascot Group, Inc. ("the Company") is a for-profit corporation,
incorporated under the laws of the State of Delaware on August
16, 1996. Ascot Group Inc.'s principal objective was to develop a
retail company in Europe using developed North American concepts
which have commonly been five years ahead of Europe.
B. Basis of Presentation
Financial statements are prepared on the accrual basis of
accounting. Accordingly, revenue is recognized when earned and
expenses when incurred.
The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with generally
accepted accounting principles for interim financial information
and with the instructions to Form 10-QSB and Article 10 of
Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted
accounting principles for complete financial statements.
C. Cash and Cash Equivalents
For purposes of the statements of cash flows, the Company
considers all short-term investments with maturity of three
months or less to be cash equivalents.
D. Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect certain reported
amounts and disclosures. Accordingly, actual results could
differ from these estimates. Significant estimates in the
financial statements include the assumption that the Company will
continue as a going concern. See Note 4.
<PAGE>
<PAGE>
NOTE 2 - USE OF OFFICE SPACE
The Company uses 1,000 square feet of space for its executive
offices at Talbot House, High Street, Crowthorne, Berks, UK which
it receives from one of its shareholders at no cost. The Company
uses 1,000 square feet of office space for executive offices in
Belleview, WA which it also receives from one of its shareholders
at no cost. The fair market value of each of these offices is
$200 per month, which is reflected as an expense with a
corresponding credit to contributed capital.
NOTE 3 - EARNINGS PER SHARE
Net Loss per share $( 0.00)
NOTE 4 - LIQUIDITY
The Company's viability as a going concern is dependent upon
raising additional capital, and ultimately, having net income.
The Company established its office in Crowthome, UK in early 1997
when it began the initial development of its business plan. The
Company's limited operating history, including its losses and no
revenues, primarily reflect the operations of its early stage.
As a result, the Company had from time of inception to December
31, 1998 no revenue and a net loss from operations of $65,275.
As of December 31, 1998, the Company had a net capital
deficiency of 19,875.
The Company requires additional capital principally to meet its
costs for the implementation of its business plan, for general
and administrative expenses and to fund costs associated with the
start up and trading of retail outlets. It is not anticipated
that the Company will be able to meet its financial obligations
through internal net revenue in the foreseeable future. Ascot
Group, Inc. does not have a working capital line of credit with
any financial institution. Therefore, future sources of
liquidity will be limited to the Company's ability to obtain
additional debt or equity funding. The Company anticipates that
its existing capital resources will enable it to maintain its
current implemented operations for at least 12 months; however,
full implementation of its business plan is dependent upon its
ability to raise substantial funding. Management's plan is to
move the Company toward profitability within five years.
<PAGE>
<PAGE>
NOTE 5 - SUBSEQUENT EVENTS
On December 21, 1998, the Company entered into an agreement
whereby it agreed to purchase 100 percent of the issued and
outstanding stock of Bioenvision, Inc., a company incorporated
under the laws of the State of Delaware. Bioenvision Inc., is a
developmental stage bio-pharmaceutical company. Management
represents that it had minimal assets and liabilities as of June
30, 1998. Audited financials of Bioenvision are to be provided
under a Form 8-K/A filed by the Company. As of the date of this
filing, management represents that the audited financials
of Bioenvision were not yet completed. The agreement calls for a
one for 15 reverse split of Ascot Group's currently outstanding
shares. Ascot Group will then issue 7,013,897 post-reverse split
shares with a par value of $7,014 to the shareholders of
Bioenvision Inc., in exchange for 100 percent of the issued and
outstanding stock of Bioenvision Inc. After the agreement
closes, Ascot will have 7,243,897 shares of stock outstanding.
The agreement closed on January 4, 1999 and the company changed
its name to Bioenvision on that date. <PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION
RESULTS OF OPERATIONS
The Company has no material assets and no recent operating
history. The Company's is a developmental stage company and, its
principal business purpose, was to locate and consummate a merger
or acquisition with a private entity.
The Company on December 21, 1998 entered into an Acquisition
Agreement with Bioenvision Inc., a Delaware corporation, for the
purpose of acquiring ownership of the Company. The Company
acquired 7,013,897 shares of common stock, $0.01 par value, of
Bioenvision, Inc. The Company filed a Form 8-K to report the
execution of the Acquisition Agreement. The Company thereafter
on January 12, 1999 filed a Form 8-K/A to report the closing of
the Acquisition of Bioenvision and to also report that the
Company had decided to change its name form Ascot Group Inc., to
Bioenvision. The contents of both the Form 8-K and Form 8-K/A
are incorporated by reference herein.
The acquisition of Bioenvision was consummated by the execution
of an Acquisition Agreement dated December 21, 1998. The shares
acquired by the Company represented one hundred (100%) percent of
all of Bioenvision's then currently issued and outstanding common
stock. The aggregate purchase price paid by the Company for the
Bioenvision common shares was 7,013,897 post-reverse split shares
of voting common stock of Ascot Group Inc., $0.001 par value.
These shares were issued to the sellers of the Bioenvision
shares subsequent to a 15 to 1 reverse split of the voting common
stock by the Company of its voting common stock. There was no
material relationship between the Company and Bioenvision prior
to the acquisition by the company of the Bioenvision shares.
Subsequent to the acquisition of the Bioenvision shares, the
Company changed its name to Bioenvision, Inc.
The selection of a business opportunity in which to participate
is complex and risky. It is not guaranteed that the Company's
acquisition of Bioenvision will be beneficial to the Company and
its shareholders. The Company selected this business opportunity
based on management's business judgment.
The Company lacks funds and it may be necessary for the officers
and directors to either advance funds to the Company or to accrue
expenses until such time as the Company begins to generate
sufficient income to cover such expenses. Management intends to
hold expenses to a minimum and to obtain services on a
contingency basis when possible. The Company's directors will<PAGE>
<PAGE>
forego any compensation until such time as the Company begins to
generate sufficient income to cover such expenses. If the
Company engages outside advisors or consultants in search for
business opportunities, the Company may attempt to raise
additional funds. There is no assurance that the Company will be
able to obtain additional funding when and if needed, or that
such funding, if available, can be obtained on terms acceptable
to the Company. The Company has not entered into any loan
agreements or share placement agreements.
The Company's expenses to date have been administrative expenses
related to the selection and consummation of a business
acquisition along with legal and accounting costs. The Company
has funded such expenses based upon funds advanced from its
officers and directors.
The Company, at this time, does not intend to use any employees,
with the possible exception of part-time clerical assistance on
an as-needed basis. Outside advisors or consultants will be used
only if they can be obtained for minimal cost or on a deferred
payment basis. Management is confident that it will be able to
operate in this manner in its efforts to re-develop the Company's
business opportunities during the next twelve months.
The Company has chosen to become a voluntary reporting company in
order to make information concerning itself more readily
available to the public. The Company is obligated to file with
the Commission certain interim and periodic reports including an
annual report containing audited financial statements. The
Company intends to continue to voluntarily file these periodic
reports under the Exchange Act even if its obligation to file
such reports is suspended under applicable provisions of the
Exchange Act.
MANAGEMENT
The Company intends to enter the biotechnology industry. The
Bioenvision management, headed by Christopher Wood, will utilize
their experience and expertise in that area to assist the Company
with such entry.
The directors of the Company, subsequent to the acquisition of
Bioenvision, are Linden Boyne, Alan Bowen, Christopher Wood.
<PAGE>
<PAGE>
Linden J H Boyne has been President and director of the Company
since 1997. Prior to working with the Company, he spent 10 years
with Unigate starting as a Management Trainee and becoming Group
Buyer and Retail General Manager for that company's retail group
in Scotland. He joined NSS Newsagents in 1973 as a Regional
Director and was subsequently appointed to the Board and became
Retail Managing Director two years before the Group was taken
over by Gallahers Tobacco. L.J. Boyne has been a secretary in
Alexander Wolfe, Inc., and Medic Media, Inc. during the past five
years.
Alan G.R. Bowen, the Company's secretary, treasurer and director
since 1997, is a graduate in Mathematics from Birmingham
University and worked as a graduate trainee for Unilever before
moving into retailing with British Shoe Corporation, part of the
Sears Group. In 1971, he joined NSS Newsagents and progressed to
become Retail Director and then Group Managing Director. He left
NSS Newsagents after it was taken over by Gallahers Tobacco and
formed an independent Mayfair Cards, a greetings card company,
which subsequently led him to found Ascot Group. Alan G.R. Bowen
is also a director of Mayfair Cards (Waterlooville) Limited, a
United Kingdom Corporation.
Bioenvision is a development stage international bio-
pharmaceutical company with a primary focus on the diagnosis and
treatment of cancer. Bioenvision's aim is to manage the
convergence of groundbreaking science to create strong,
commercially successful cancer treatments. The Company's Chief
Executive Officer is Christopher Barry Wood, Chief Operating
Officer is Stuart Smith and the Chief Medical Officer is George
Margetts. Combined, they have in excess of 50 years experience
within the pharmaceutical industry working for companies such as
Medeva Plc, Schering and Sterling Winthrop. Bioenvision currently
has 5 platform technologies focused on career treatments. The
products which Bioenvision seeks to develop will be used to treat
a wide range of malignant diseases, from leukemia to breast and
prostate cancer. In the next 24 months, Bioenvision plans to
launch three important products to fight cancer. The Company's
lead product, a drug for the treatment of breast cancer currently
has a product license in Europe. Prior to the acquisition of the
Bioenvision shares, the Company, Ascot Group, was a developing
company seeking to find a merger or business acquisition.
Bioenvision is a development-stage, bio-pharmaceutical company
primarily engaged in the research and development of products and
technologies for the treatment of cancer. Bioenvision holds
marketing rights to a portfolio of four platform technologies
that have been developed over the past fifteen years, from which
twelve products have been derived and additional products may be<PAGE>
<PAGE>
developed in the future. Bioenvision's primary objective is to
continue developing its existing platform technologies and to
commercialize products derived from such technologies.
Bioenvision expects to begin marketing a product for the
treatment of post-menopausal breast cancer on a commercial scale
in the United States and Europe within the first six months of
1999. The potential U.S. market for that product is estimated
from the leading competitor companies sales to be approximately
$1.0 billion annually. In addition, three of the other products
and technologies to which Bioenvision has or will have rights are
presently being tested in clinical trials, and an additional
eight are in the pre-clinical stage of development. Bioenvision
has adopted an aggressive product development program and,
assuming the successful completion of clinical trials,
anticipates that by the end of 2002, five of such products and
technologies will have received regulatory approval for certain
disease indications in the United States or Europe, and six will
be emerging through the clinical trial process. Bioenvision is
also currently in discussions with several major pharmaceutical
and biotechnology companies to license or co-market certain of
the products in key territories.
Bioenvision's primary objective is to continue developing its
existing platform technologies and to commercialize products
derived from such technologies. Once a product or technology has
been launched into the market for a particular disease
indication, Bioenvision 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,
Bioenvision intends to develop marketing alliances with corporate
partners and may co-promote and/or co-market in certain
territories.
The Company's viability as a going concern is dependent upon
raising additional capital, and ultimately, having net income.
The Company requires additional capital principally to meet its
costs for the implementation of its business plan, for general
and administrative expenses and to fund research and development
into oncology focused products.
The Company does not have a working capital line of credit with
any financial institution. Therefore, future sources of liquidity
will be limited to the Company's ability to obtain additional
debt or equity funding. The Company anticipates that its
existing capital resources will enable it to maintain its current
implemented operations for at least 12 months; however, full<PAGE>
<PAGE>
implementation of its business plan is dependent upon its ability
to raise substantial funding.
There is no guarantee that the Company will be able to continue
its operations or that its acquisition of Bioenvision will ensure
that the Company will be a profitable one. The Company is a
development stage company and any investment in the Company is
considered risky.
YEAR 2000 DISCLOSURE
The Company is aware of the Year 2000 issue and states that it
currently does not maintain any material active operations which
it foresees will be impacted by the Year 2000 problem. Management
therefore does not anticipate that the company will be affected
by this issue, financially or otherwise. This disclosure
complies with the directives of the Securities and Exchange
Commission, specifically Staff Legal Bulletin No. 5 (CF/IM),
regarding Year 2000 issues.
<PAGE>
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
There are currently no pending legal proceedings against the
company.
Item 2. Changes in Securities
The Company on December 21, 1998 entered into an Acquisition
Agreement with Bioenvision Inc., a Delaware corporation, for the
purpose of acquiring ownership of the Company. The Company
acquired 7,013,897 shares of common stock, $0.01 par value, of
Bioenvision, Inc. The Company filed a Form 8-K to report the
execution of the Acquisition Agreement. The Company thereafter
on January 12, 1999 filed a Form 8-K/A to report the closing of
the Acquisition of Bioenvision and to also report that the
Company had decided to change its name form Ascot Group Inc., to
Bioenvision. The contents of both the Form 8-K and Form 8-K/A
are incorporated by reference herein.
The acquisition of Bioenvision was consummated by the execution
of an Acquisition Agreement dated December 21, 1998. The shares
acquired by the Company represented one hundred (100%) percent of
all of Bioenvision's then currently issued and outstanding common
stock. The aggregate purchase price paid by the Company for the
Bioenvision common shares was 7,013,897 post-reverse split shares
of voting common stock of Ascot Group Inc., $0.001 par value.
These shares were issued to the sellers of the Bioenvision
shares subsequent to a 15 to 1 reverse split of the voting common
stock by the Company of its voting common stock.
On December 31, 1998 the Company had outstanding 3,450,000 shares
of common stock, $0.01 par value. The Company thereafter
conducted a 15 to 1 stock split of its common stock. The stock
split was approved by the Board of Directors of the Company on
December 29, 1998 which deemed that it would be in the best
interests of the shareholders. After the stock split, the
Company on January 5, 1999 issued 7,013,897 shares of common
stock to the shareholders of Bioenvision as consideration for the
acquisition of Bioenvision. Subsequent to the closing of the
acquisition of Bioenvision, the Company had outstanding 7,243,897
shares of common stock, $0.01 par value.
Item 3. Defaults upon Senior Securities
There has been no default in the payment of principal, interest,
sinking or purchase fund installment.<PAGE>
<PAGE>
Item 4. Submission of Matters to a Vote of Security Holders
No matter has been submitted to a vote of security holders during
the period covered by this report.
Item 5. Other information
There is no other information to report which is material to the
company's financial condition not previously reported.
Item 6. Exhibits and Reports on Form 8-K
Exhibit 10 - Acquisition Agreement with Bioenvision, Inc.
Form 8-K - Reporting execution of Acquisition Agreement
Form 8-K/A - Reporting closing of Acquisition Agreement
and Company name change
<PAGE>
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
______________________
Bioenvision, Inc.
f/k/a Ascot Group, Inc.
(Registrant)
/s/ L.J. Boyne
President
ACQUISITION AGREEMENT
AGREEMENT dated 21st December 1998 ("the Agreement"), by,
between and among ASCOT GROUP Inc, a company incorporated
under the laws of the State of Delaware (herein referred to
as ASCOT), the persons listed on Exhibit A attached hereto
and made a part hereof, being all of the shareholders and
executive officers of ASCOT (hereinafter referred to as
"MANAGEMENT"); BIOENVISION INC, a company incorporated
under the laws of the State of Delaware (hereinafter
referred to as "BIOENVISION"); and the persons listed on
Exhibit "A" attached hereto and made a part hereof,
(hereinafter referred to as the "SELLERS").
WHEREAS, the SELLERS own a total of 7,013,897 shares of
common stock, $0.001 par value, of BIOENVISION, said shares
being 100% of the issued and outstanding common stock of
BIOENVISION.
WHEREAS, the SELLERS desire to sell and ASCOT desires to
purchase one hundred (100%) percent of such shares.
NOW, THEREFORE, in consideration of the mutual convenants,
agreements, representations and warranties herein contained,
the parties hereby agree as follows:
1. Purchase and Sale - The SELLERS hereby agree to sell,
transfer, assign and convey to ASCOT and ASCOT hereby
agrees to purchase and acquire from the SELLERS, a total
of 7,013,897 shares of common stock of BIOENVISION, which
equates to one hundred percent (100%) percent of all of
BIOENVISION's currently issued and outstanding common
stock (the BIOENVISION Common Shares"), in a tax-free
stock-for-stock acquisition.
2. Purchase Price - The aggregate purchase price to be paid
by ASCOT for the BIOENVISION Common Shares shall be
7,013,897 post-reverse split shares of ASCOT $0.001 par
value voting common stock (the "ASCOT Common Shares").
The ASCOT Common Shares will be issued to the individual
SELLERS in accordance with Exhibit "A-1" attached hereto.
3. Warranties Representations and Covenants of BIOENVISION
and BIOENVISION PRINCIPALS - In order to induce ASCOT to
enter into this Agreement and to complete the transaction
contemplated hereby, BIOENVISION and its principal
executive officers (hereinafter referred to as the
"BIOENVISION PRINCIPALS", jointly and severally warrant
and represent to ASCOT that:
(a) Organization and Standing BIOENVISION is a
corporation duly organized, validly existing and in a
good standing under the laws of the State of Delaware,
is qualified to do business as a foreign corporation in
every other state or jurisdiction in which it operates
to the extent required by the laws of such states and
jurisdictions, and has full power and authority to
carry on its business as now conducted and to own and
operate its assets, properties and business. Attached
hereto as Exhibit "B" are true and correct copies of
BIOENVISION's Certificate of Incorporation, amendments
thereto and all current \by-laws of BIOENVISION. No
changes thereto will be made in any of the Exhibit "B"
documents before the closing. BIOENVISION has no
subsidiaries except as listed or any investments or
ownership interests in any corporation, partnership,
joint venture or other business enterprise which is
material to its business.
(b) Capitalization As of the Closing Date of BIOENVISION's
entire authorized equity capital consists of 7,013,897
shares of $0.001 par value, of which 7,013,897 shares of
Common Stock will be outstanding as of the Closing. As
of the Closing Date, there will be no other voting or
equity securities authorized or issued, nor any
authorized or issued securities convertible into voting
stock, and no outstanding subscriptions, warrants, calls,
options, rights, commitments or agreements by which
BIOENVISION or the SELLERS are bound, calling for the
issuance of any additional shares of common stock or any
other voting or equity security.
The 7,013,897 issued and outstanding BIOENVISION Common
Shares to be transferred by SELLERS constitutes one
hundred (100%) percent of the currently issued and
outstanding shares of Common Stock of BIOENVISION, which
includes inter-claim, that same percentage of
BIOENVISION's voting power, right to receive dividends,
when, as and if declared and paid, and the right to
receive the proceeds of liquidation attributable to
common stock, if any.
(c) Ownership of BIOENVISION Shares Each SELLER warrants
and represents, severally, that as of the date hereof,
such SELLER is the sole owner of the BIOENVISION Common
Shares listed by his or her name on Exhibit "A-1", free
and clear of all liens, encumbrances, and restrictions
whatsoever, except that the BIOENVISION Common Shares so
listed have not been registered under the Securities Act
of 1933, as amended (the "33 Act"), or any applicable
State Securities laws. By SELLERS' transfer of the
BIOENVISION Common Shares to ASCOT pursuant to this
Agreement. ASCOT will thereby acquire 100% of the
outstanding capital stock of BIOENVISION, free and clear
of all liens, encumbrances and restrictions of any nature
whatsoever, except by reason of the fact that the
BIOENVISION Common Shares will not have been registered
under the '33 Act, or any applicable State securities
laws.
(d) Taxes BIOENVISION has filed all federal, state and
local income or other tax returns and reports that it is
required to file with all governmental agencies, wherever
situate, and has paid or accrued for payment all taxes as
shown on such returns, such that a failure to file, pay
or accrue will not have a material adverse effect on
BIOENVISION. BIOENVISION's income tax returns have never
been audited by any authority empowered to do so.
(e) Pending Actions There are no material legal actions,
lawsuits, proceedings or investigations, either
administrative or judicial, pending or threatened,
against or affecting BIOENVISION, or against the
BIOENVISION PRINCIPALS that arrive out of their operation
of BIOENVISION, except as described in Exhibit "C"
attached hereto. BIOENVISION is not knowingly in
material violation of any law, material ordinance or
regulation of any kind whatever, including, but not
limited to laws, rules and regulations governing the sale
of its services, the 33 Act, the Securities Exchange Act
of 1934, as amended (the "34 Act"), the Rules and
Regulations of the U.S. Securities and Exchange
Commission ("SEC"), or the Securities Laws and
Regulations of any state or nation.
(f) Government and Regulation BIOENVISION holds the
licenses and registrations set forth on Exhibit "D"
hereto from the jurisdictions set forth therein, which
licenses and registrations are all of the licenses and
registrations necessary to permit BIOENVISION to conduct
its current business. All of such licenses and
registrations are in full force and effect, and there are
no proceedings, hearings or other actions pending that
may affect the validity or continuation of any of them.
No approval of any other trade or professional
association or agency of government other than as set
forth on Exhibit "D" is required for any of the
transactions effected by this Agreement, and the
completion of the transactions contemplated by this
Agreement will not, in and of themselves, affect or
jeopardize the validity or continuation of any of them.
(g) Ownership of Assets Except as set forth in Exhibit "E"
attached hereto, BIOENVISION has good, marketable title,
without any liens or encumbrances of any nature whatever,
to all of the following, if any; assets, properties and
rights of every type and description, including, without
limitation, all cash on hand and in banks, certificates
of deposit, stocks, bonds, and other securities, good
will, customer lists, its corporate name and all variants
thereof, trademarks and trade names, copyrights and
interests thereunder, licenses and registrations, pending
licenses and permits and applications therefor,
inventions, processes, know-how, trade secrets, real
estate and interests therein and improvements thereto,
machinery, equipment, vehicles, notes and accounts
receivable, fixtures, rights under agreements and leases,
franchises, all rights and claims under insurance
policies and other contracts of whatever nature, rights
in funds of whatever nature, books and records and all
other property and rights of every kind and nature owned
or held by BIOENVISION as of this date, and will continue
to hold such title on and after the completion of the
transactions contemplated by this Agreement; nor, except
in the ordinary course of its business, has BIOENVISION
disposed of any such asset since the date of the most
recent balance sheet described in Section 3(0) of this
Agreement.
(h) No Interest in Suppliers, Customers, Landlords or
Competitors Neither the BIOENVISION PRINCIPALS nor any
member of their families have any material interest of
any nature whatever in any supplier, customer, landlord
or competitor of BIOENVISION.
(i) No Debt Owed by BIOENVISION to BIOENVISION PRINCIPALS
Except as set forth in Exhibit "F" attached hereto,
BIOENVISION does not owe any money, securities, or
property to either the BIOENVISION PRINCIPALS or any
member of their families or to any company controlled by
such a person, directly or indirectly.
(j) Complete Records All of BIOENVISION's books and
records, including, without limitation, its books of
account, corporate records, minute book, stock
certificate books and other records are up-to-date,
complete and reflect accurately and fairly the conduct of
its business in all material respects since its date of
incorporation.
(k) No Misleading Statements or Omissions Neither this
Agreement nor any financial statement, exhibit, schedule
or document attached hereto or presented to ASCOT in
connection herewith, contains any materially misleading
statement or omits any fact or statement necessary to
make the other statements or facts therein set forth not
materially misleading.
(l) Validity of this Agreement All corporate and other
proceedings required to be taken by the SELLERS and by
BIOENVISION in order to enter into and carry out this
Agreement have been duly and properly taken. This
Agreement has been duly executed by the SELLERS and by
BIOENVISION, and constitutes the valid and binding
obligation of each of them, enforceable in accordance
with its terms except to the extent limited by applicable
bankruptcy, reorganization, insolvency, moratorium or
other laws relating to or effecting generally the
enforcement of creditors rights. The execution and
delivery of this Agreement and the carrying out of its
purposes will not result in the breach of any of the
terms and conditions of, or constitute a default under or
violate, BIOENVISION's Certificate of Incorporation or
By-Laws, or any material agreement, lease, mortgage,
bond, indenture, license or other material document or
undertaking, oral or written, to which BIOENVISION or the
SELLERS is a party or is bound or may be affected, nor
will such execution, delivery and carrying out violate
any law, rule or regulation or any order, with injunction
or decree, of any court, regulatory agency or other
governmental body; and the business now conducted by
BIOENVISION can continue to be so conducted after
completion of the transaction contemplated hereby, with
BIOENVISION as a wholly owned subsidiary of ASCOT
(m) Concepts and Approvals: Compliance with Laws Neither
BIOENVISION nor the SELLERS are required to make any
filing with, or obtain the consent or approval of, any
person or entity as a condition to the consummation of
the transactions contemplated by this Agreement. The
business of BIOENVISION has been operated in material
compliance with all laws, rules, and regulations
applicable to its business, including, without
limitation, those related to securities matters, trade
matters, environmental matters, public health and safety,
and labor and employment.
(n) Access to Books and Records ASCOT will have full and
free access to BIOENVISION's books during the course of
this transaction prior to Closing, during regular
business hours, on reasonable notice.
4. Warranties, representations and Covenants of ASCOT
In order to induce the SELLERS and BIOENVISION to enter
into this Agreement and to complete the transaction
contemplated hereby, ASCOT warrant, represent and covenant
to BIOENVISION and SELLERS that :
(a) Organization and Standing ASCOT is a corporation
duly organized, validly existing and in good
standing under the laws of the State of Delaware,
will be qualified to do business as a foreign
corporation in every other state and jurisdiction in
which it operates to the extent required by the laws
of such states or jurisdictions, and will have full
power and authority to carry on its business as now
conducted and to own and operate its assets,
properties and business. ASCOT has no subsidiaries
or any other investments or ownership interests in
any corporation, partnership, joint venture or other
business enterprise.
(b) Capitalization ASCOT's entire authorized equity
capital consists of 25,000,000 shares of voting
common stock, $0.001 par value. As of the Closing,
after giving effect to (I) the proposed one-for-15
reverse split of ASCOT's 3,450,000 currently
outstanding shares into 230,000 shares; and (II) the
issuance of 7,013,897 post-reverse split shares to
the SELLERS as described in Exhibit A/A1 herein;
Hereof, ASCOT will have authorised 25,000,000 shares
of common stock and have issued and outstanding a
maximum of 7,243,897 shares of voting common stock,
$0.001 par value and no shares of preferred stock
issued as at closing. Upon issuance, all of the
ASCOT Common Stock will be validly issued, fully
paid and non-assessable. The relative rights and
preferences of ASCOT's equity securities are set
forth on the Certificate of Incorporation, as
amended and ASCOT's By-laws (Exhibit "H" hereto).
There are no other voting or equity securities
authorized or issued, not any authorized or issued
securities convertible into voting stock, and no
outstanding subscriptions, warrants, calls, options,
rights, commitments or agreements by which ASCOT is
bound, calling for the issuance of any additional
shares of common stock or any other voting or equity
security. The By-laws of ASCOT provide that a
simple majority of the shares voting at a stock
holders' meeting at which a quorum is present may
elect all of the directors of ASCOT. Cumulative
voting is not provided for by the By-Laws or
Certificate of Incorporation of ASCOT. Accordingly,
as of the Closing the 7,013,897 shares being issued
to and acquired by the SELLERS will constitute 98%
of the 7,243,897 shares of ASCOT, the right to
receive dividends, when, as and if declared and
paid, and the right to receive the proceeds of
liquidation attributable to common stock, if any.
(c) Ownership of Shares By ASCOT's issuance of the
ASCOT Common Shares to the SELLERS pursuant to this
Agreement, the SELLERS will thereby acquire good,
absolute marketable title thereto, free and clear of
all liens, encumbrances and restrictions of any
nature whatsoever, except by reason of the fact that
such ASCOT shares will not have been registered
under the 33 Act, or any applicable state securities
laws.
(d) Significant Agreements ASCOT is not and will not
at Closing be bound by any of the following:
(i) Employment, advisory or consulting contract
(except as described in Section 12 herein).
(ii) Plan providing for employee benefits of any
nature.
(iii) Lease with respect to any property or
equipment.
(iv) Contract of commitments for any current
expanditure.
(v) Contract or commitment pursuant to which it
has assumed, guaranteed, endorsed or otherwise
become liable for any obligation of any other
person, firm or organization.
(vi) Contract, agreement, understanding,
commitment or arrangement either than in the
normal course of business, not set forth in the
Agreement or an Exhibit hereto.
(vii) Agreement with any person relating to the
dividend, purchase or sale of securities, that
has not been settled by the delivery of payment
of securities when due, and which remains
unsettled upon the date of this Agreement.
(e) Taxes ASCOT has filed all federal, state and local
income or other tax returns and reports that it is
required to file with all governmental agencies,
wherever situate, and has paid all taxes as shown on
such returns. All of such returns are true and
complete. ASCOT's income tax returns have never been
audited by say authority empowered to do so.
(f) Absence of Liabilities As of the Closing Date
ASCOT will have no liabilities of any kind or
nature, fixed or contingent, except for the costs,
including legal and accounting fees and other
expenses, in connection with this transaction, for
which ASCOT agrees to be responsible and to pay in
full at or before the Closing.
(g)No Pending Actions To the best of management's
knowledge, there are no legal actions, lawsuits,
proceedings or investigations, either administrative
or judicial, pending or threatened against or
affecting ASCOT, or against any of the ASCOT
MANAGEMENT and arising out of their operation of
ASCOT. ASCOT has been in compliance with, and has
not received notice of violation of any law,
ordinance of any kind whatever, including, but not
limited to, the 33 Act, the Rules and Regulations of
the SEC, or the Securities Laws and Regulations of
any sale. ASCOT is not an investment company as
defined in, or otherwise subject to regulation
under, the Investment Company Act of 1940. ASCOT is
not required to file reports pursuant to either
Section 13 or Section 15 (d) of the 34 Act.
(h)Corporate Records All of ASCOT's books and
records, including, without limitation, its books of
account, corporate records, minute book, stock
certificate books and other records are up-to-date
complete and reflect accurately and fairly the
conduct of its business in all respects since its
date of incorporation; all of said books and records
will be made available for inspection by
BIOENVISION's authorized representatives prior to
the Closing as provided by Section 4(I) herein, and
will be delivered to ASCOT's new management at the
Closing.
(i)No Misleading Statements or Omissions Neither
this agreement nor any financial statement, exhibit,
schedule or document attached hereto or presented to
BIOENVISION in connection herewith contains any
materially misleading statement, or omits any fact
or statement necessary to make the other statements
or facts therein set forth not materially
misleading.
(j)Validity of this Agreement All corporate and
other proceedings required to be taken by ASCOT in
order to enter into and to carry out this Agreement
will have been duly and properly taken at or before
the Closing. This Agreement has been duly executed
by ASCOT, constitutes a valid and binding obligation
of ASCOT enforceable in accordance with its terms.
The execution and delivery of this Agreement and the
carrying out of its purposes will not result in the
breach of any of the terms or conditions of, or
constitute a default under or violate, ASCOT's
Certificate of Incorporation or
By-Laws, or any agreement, lease, mortgage, bond,
indenture, license or other document or undertaking,
oral or written, to which ASCOT is a party or is
bound or may be affected nor will such execution,
delivery and carrying out violate any law, rule or
regulation or any order, writ, injunction or decree
of any court, regulatory agency or other
governmental body.
(k)Consents and Approvals, Compliance with Laws
Except for the notices to be filed as described in
Section 7(a)(v) herein, neither BIOENVISION nor
MANAGEMENT is required to make any filing with, or
obtain the consent or approval of, any person or
entity as a condition to the consummation of the
transactions contemplated by this Agreement. The
business of ASCOT has been operated in compliance
with all laws, rules and regulations applicable to
its business, including, without limitation, those
related to securities matters, trade matters,
environmental matters, public health and safety, and
labor and employment.
(l)Access to Books and Records BIOENVISION and
SELLERS will have full and free access to
BIOENVISION's books and records during the course of
this transaction prior to and at the Closing on
reasonable notice.
(m)ASCOT Financial Condition As of the Closing,
ASCOT will have no assets or liabilities, except as
disclosed in financial statements.
(n)Directors and Shareholders Approval As of the
Closing, ASCOT's Board of Directors and
Shareholders, by meeting or consent shall have
properly authorized the matters described in section
7(a)(iv)herein.
(o)The ASCOT Shares All of the ASCOT Common Shares
issued to SELLERS shall be validly issued, fully-
paid non-assessable shares of ASCOT Common Stock,
with full voting rights, dividend rights, and right
to receive the proceeds of liquidation , if any, as
set forth in ASCOT's Certificate of Incorporation.
5. Term: Indemnification All representations, warranties,
covenants and agreements made herein and in the exhibits
attached hereto shall survive the execution and delivery
of this Agreement and payment pursuant thereto.
MANAGEMENT and BIOENVISION MANAGEMENT ("management") of
both parties to the agreement hereby agree, jointly and
severally, to indemnify, defend, and hold harmless ASCOT,
BIOENVISION, and the SELLERS from and against any damage,
loss, liability, or expense (including without
limitation,
reasonable expenses of investigation and reasonable
attorney's fees) arising out of any material breech of
any representation, warranty, covenant, or agreement made
by BIOENVISION MANAGEMENT or management in this
Agreement.
6. Conditions Precedent to Closing (a) The obligations of
BIOENVISION and the SELLERS under this Agreement shall be
and are subject to fulfillment, prior to or at the
Closing, of each of the following conditions:
(i) That ASCOT's representations and warranties
contained herein shall be true and correct at the
time of Closing as if such representations and
warranties were made at such time, and will deliver
an executed certification confirming the foregoing;
(ii) That ASCOT shall have performed or complied
with all agreements, terms and conditions required
by this Agreement to be performed or complied with
by them prior to or at the time of the Closing;
(iii) That ASCOT's directors and shareholders, by
proper and sufficient vote taken either by consent
or at a meeting duly and properly called and held,
shall have properly approved all of the matters
required to be approved by ASCOT's directors and
shareholders, respectively;
(iv) That ASCOT's Board of Directors, by proper and
sufficient vote, shall have approved this Agreement
and the transactions contemplated hereby; approved
the contemplated reverse split of ASCOT's
outstanding Common Stock without changing either the
authorized shares or the par value; approved the
change of ASCOT's corporate name to a name selected
by BIOENVISION; approved the resignation of all of
ASCOT's current directors and the election of up to
three designees of BIOENVISION to serve as directors
in place of ASCOT's current directors; and will have
approved such other changes as are consistent with
this Agreement and approved by BIOENVISION and
ASCOT; and
(b) The obligations of ASCOT under this Agreement shall
be and are subject to fulfillment, prior to or at the
Closing of each of the following conditions:
(i) That BIOENVISION's and SELLERS' representations
and warranties contained herein shall be true and
correct at the time of Closing as if such
representations and warranties were made at such
time and BIOENVISION and the BIOENVISION PRINCIPALS
shall deliver an executed certification confirming
the foregoing;
That BIOENVISION and BIOENVISION PRINCIPALS shall
have performed or complied with all agreements,
terms and conditions required by this Agreement to
be performed or complied with by them prior to or at
the time of Closing; and
7. Termination This Agreement may be terminated at any
time before or at Closing, by;
(a) The mutual agreement of the parties;
(b) Any party if:
(i) Any provision of this Agreement applicable
to a party shall be materially untrue or fail
to be accomplished on or before December 31,
1998
(ii) Any legal proceeding shall have been
instituted or shall be imminently threatening
to delay, restrain or prevent the consummation
of this Agreement.
Upon termination of this Agreement for any reason, in
accordance with the terms and conditions set forth in this
paragraph, each said party shall bear all costs and expenses
as each party has incurred and no party shall be liable to
the other.
8. Exhibits All Exhibits attached hereto are incorporated
herein by this reference as if they were set forth in their
entirety.
9. Miscellaneous Provisions This Agreement is the entire
agreement between the parties in respect of the subject
matter hereof, and there are no other agreements, written
or oral, nor may this Agreement be modified except in
writing and executed by all of the parties hereto. The
failure to insist upon strict compliance with any of the
terms, covenants or conditions of this Agreement shall not
be deemed a waiver or relinquishment of such rights or
power at any other time or times.
10. Closing The Closing of the transactions contemplated by
this Agreement ("Closing") shall take place at the offices
of ASCOT, at 1.00 P.M. on the first business day after the
letter of the approval of SELLERS owning at least 80% of
BIOENVISION's Common Stock or the shareholders of ASCOT
approving this Agreement and the matters referred to in
section 7(a)(vi) herein, or such other date as the parties
hereto shall mutually agree upon. At the Closing, all of
the documents and items referred to herein shall be
exchanged.
11. Governing Law This Agreement shall be governed by and
construed in accordance with the internal laws of the Sate
of Delaware.
12. Counterparts This Agreement may be executed in duplicate
facsimile counterparts, each of which shall be deemed an
original and together shall constitute one and the same
binding Agreement, with one counterpart being delivered to
each party hereto.
IN WITNESS WHEREOF, the parties hereto have set their hands
and seals as of the date and year above first written.
ASCOT GROUP INC
By: ____________________________
____________________________
BIOENVISION INC
By: ____________________________
