BIOENVISION INC
10QSB, 2000-11-17
NON-OPERATING ESTABLISHMENTS
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<PAGE>

                                  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 September 30, 2000

                     --------------------------------------

                                BIOENVISION, INC.
             (Exact name of registrant as specified in its charter)

       Delaware                                                  113375915
       --------                                                  ---------
State of Incorporation                                       IRS Employer ID No.

                  590 Madison Avenue, New York, New York 10022
                  --------------------------------------------
                    (Address of principal Executive Offices)

                  Registrant's Telephone Number (212) 521-4496

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 September 30, 2000, the following shares of the Registrant's
                   common stock were issued and outstanding:

          Common Stock, $0.001 par value per share          8,476,429


<PAGE>


INDEX

PART I - FINANCIAL INFORMATION

Item 1.   Financial Statements

         CONSOLIDATED BALANCE SHEET                                            2
         CONSOLIDATED STATEMENT OF OPERATIONS                                  3
         STATEMENT OF CASH FLOWS                                               4

         Note 1.   ORGANISATION AND SIGNIFICANT ACCOUNTING POLICIES            5
         Note 2.   BUSINESS COMBINATIONS                                       7
         Note 3.   PROPERTY PLANT AND EQUIPMENT                                8
         Note 4.   INTANGIBLE ASSETS                                           8
         Note 5.   COMMITMENTS                                                 8
         Note 6.   INCOME TAXES                                                8
         Note 7.   STOCKHOLDERS' EQUITY (DEFICIT)                              9
         Note 8.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS              9
         Note 9.   SUBSEQUENT EVENTS                                           9

Item 2.   Management's Discussion And Analysis or Plan of Operations          10

PART II - OTHER INFORMATION

Item 1.   Legal Proceedings                                                   13

Item 2.   Changes in Securities                                               13

Item 3.   Defaults upon Senior Securities                                     13

Item 4.   Submission of Matters to a Vote of Security Holders                 13

Item 5.   Other information                                                   13

Item 6.   Exhibits and Reports on Form 8-K                                    13


SIGNATURES                                                                    14

                                       1
<PAGE>

PART I - FINANCIAL INFORMATION

                                BIOENVISION, INC.
                          (a development stage company)

                           CONSOLIDATED BALANCE SHEET
                                   (unaudited)

                                                              September 30, 2000
                                                              ------------------
                                                                     $

ASSETS

Current Assets

Cash and cash equivalents                                                    15
Accounts receivable from related party                                   73,920
                                                                     ----------
Total Current assets                                                     73,935

Property, plant and equipment, net                                       39,145
Intangible assets, net                                                   20,213
                                                                     ----------
                                                                        133,293
                                                                     ----------

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities

Accounts payable                                                      1,292,114
Other liabilities payable to related parties                            372,533
                                                                     ----------
Total current liabilities                                             1,664,647

STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, $.001 par value
Authorised 25,000,000 shares at September 30, 2000;
Issued and outstanding: 7,976,419 at September 30, 2000                  28,652

Additional paid in capital                                            2,333,136

Deficit accumulated during the development stage                     (4,010,639)

Accumulated other comprehensive loss                                    117,497
                                                                     ----------

Total stockholders' equity (deficit)                                 (1,531,354)
                                                                     ----------


Total liabilities and stockholders' equity (deficit)                    133,293
                                                                     ----------

                                       2
<PAGE>


                                BIOENVISION, INC.

                          (a development stage company)

                      CONSOLIDATED STATEMENT OF OPERATIONS
                                   (unaudited)

                                                Three Months Ended September 30,
                                                --------------------------------

                                                  2000                   1999
                                                ---------              ---------
                                                    $                      $
TOTAL REVENUES                                         --                     --

OPERATING EXPENSES
Administrative expenses                           217,211                174,650
Research and development costs                    102,908                494,553

Interest payable                                    1,435                  6,723

Depreciation expense                                2,411                  3,953

Amortisation expense                                  287                    320
                                                ---------              ---------

Operating loss                                    324,252                680,199

Income taxes                                           --                     --
                                                ---------              ---------


NET LOSS                                          324,252                680,199
                                                ---------              ---------

Basic and diluted net loss per share                 0.04                   0.09

Shares used in computing basic and
    diluted net loss per share                  7,976,419              7,249,147


                                       3
<PAGE>

                                BIOENVISION, INC.
                          (a development stage company)

                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (unaudited)

                                                Three Months Ended September 30,
                                                --------------------------------

                                                  2000                   1999
                                                --------               --------
                                                    $                      $

OPERATING ACTIVITIES                                  --                     --
Net loss                                        (324,252)              (680,199)
Adjustments to reconcile net income (loss) to
    net cash provided (used) by operating
    activities
         Depreciation                              2,411                  3,953
         Amortisation                                287                    320
         Accounts receivable                          --                  1,010
         Accounts payable                        231,543                608,038
                                                --------               --------

Net cash provided (used) by operating
    activities                                   (90,011)               (66,878)

INVESTING ACTIVITIES
Purchase of property and equipment                    --                     --

FINANCING ACTIVITIES
Net proceeds from issuance of common stock            --                     --
Other liabilities - related parties               90,000                 66,862
                                                --------               --------
Net cash provided by financing activities         90,000                 66,862

Effect of exchange rate changes on cash               26                     --
                                                --------               --------

Net increase (decrease) in cash and cash
    Equivalents                                       --                    (16)

Cash and cash equivalents at beginning of
    Period                                            15                     16
                                                --------               --------

Cash and cash equivalents at end of period            15                     --


SUPPLEMENTAL DISCLOSURE OF CASH
    FLOW INFORMATION
Interest paid                                      1,435                  6,723



                                       4
<PAGE>

                                BIOENVISION, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                               September 30, 2000

1 ORGANISATION AND SIGNIFICANT ACCOUNTING POLICES

Description of business:

The Company is a development stage, biopharmaceutical company primarily focused
in the research and development of products and technologies for the treatment
of cancer. The Company has acquired development and marketing rights to a
portfolio of four platform technologies. The Company was incorporated as Express
Finance, Inc. under the laws of the State of Delaware on August 16, 1996 and
changed its name to Ascot Group, Inc. on August 26, 1998 and further to
Bioenvision, Inc. in December 1998.

Basis of presentation:

In January 1999, the Company merged with Bioenvision, Inc. ("Old Bioenvision"),
a development stage Company primarily engaged in the research and development of
products and technologies for the treatment of cancer. The transaction was
accounted for as a reorganisation of companies under common control in a manner
similar to a pooling of interests as they had a common majority shareholder. All
prior year amounts have been restated to include the financial results of Old
Bioenvision. In September 1998, Old Bioenvision merged with Eurobiotech Group,
Inc., a development stage company involved in the research and development of
products and technologies for the treatment of cancer. The transaction was
accounted for as a combination of a reorganisation of companies under common
control in a manner similar to a pooling as they had a common majority
shareholder, and the purchase of a minority interest. All prior year amounts
have been restated. In July 1998, Old Bioenvision merged with Biotechnology &
Healthcare Ventures, Limited ("BHV"), a development state company involved in
the research and development of products and technologies for the treatment of
cancer. The transaction was accounted for as a reorganisation of companies under
common control in a manner similar to a pooling of interests as they had a
common majority shareholder. All prior year amounts have been restated to
reflect the financial results BHV. BHV acquired Bioheal Limited and Biomed UK
Limited in May 1998, both of which are development stage companies involved in
the research and development of products and technologies for the treatment of
cancer. Both of the transactions were accounted for as purchases and the results
of Biomed UK Limited and Bioheal Limited have been included in the financial
statements of BHV from the date of acquisition. Where mergers have been
accounted for as reorganisations under common control in a manner similar to a
pooling of interests, no fair value have been attributed to any tangible or
intangible assets, including technology rights.

Operations to date and financing plans:

The Company has incurred significant losses from operations and is not
generating cash from operations. The Company also had a working capital deficit
and stockholders' deficit as of September 30, 2000. These conditions raise
substantial doubt about the Company's ability to continue as a going concern.

Operations to date have been funded principally by equity capital and loans. The
Company's ability to continue to develop its infrastructure depends on its
ability to raise other additional capital. The Company plans to continue to fund
its development expenses through additional capital raising activities,
including one or more offerings of equity and/or debt through private placements
and/or public offerings. The Company is also actively seeking strategic
alliances in order to develop and market its range of products. In November
2000, the Company obtained a finance facility for up to $2 million, from a
shareholder, Kevin Leech, which would be available through November 30, 2001. In
addition, the Company's directors and attorneys have agreed to defer salaries
and certain fees until sufficient long-term funding has been raised by the
Company. Deferred salaries and fees amounted to approximately $1.1 million at
September 30, 2000 and are included in accounts payable or other liabilities
payable to third parties in the accompanying balance sheet.



                                       5
<PAGE>

Principles of consolidation:

The accompanying consolidated financial statements include the accounts of the
Company and its wholly owned subsidiaries. All significant inter-company
accounts and transactions have been eliminated.

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 the disclosure of
contingent assets and liabilities at the date of the financial statements as
well as the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates, and such differences
may be material to the financial statements.

Income taxes:

The Company accounts for income taxes under Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes" (FAS 109). Under FAS 109,
deferred tax assets and liabilities are determined based on the differences
between the financial reporting and tax bases of assets and liabilities and are
measured using the enacted tax rates that will be in effect when the differences
are expected to reverse.

Property, plant and equipment:

Property, plant and equipment are stated at cost, net of accumulated
depreciation and amortisation. Depreciation and amortization is provided on a
reducing balance basis at the rate of 25% per year.

Intangible assets:

Intangible assets consist of acquired development and marketing rights to
platform technologies. Acquired development and marketing rights are stated at
their cost less accumulated amortization. Amortization is provided on a
straight-line basis over 20 years.

Research and development:

Research and development costs are charged to expense as incurred.

Net loss per share:

Basic net loss per share is computed using the weighted average number of common
shares outstanding during the periods. Diluted net loss per share is computed
using the weighted average number of common shares and potentially dilutive
common shares outstanding during the periods. Options to purchase 500,000 shares
of common stock have not been included in the calculation of net loss per share
as their effect would have been anti-dilutive.

                                       6
<PAGE>

Foreign currency translation:

The functional currency of the Company is the pound sterling and its reporting
currency is the United States dollar. Assets and liabilities are translated at
year-end rates and income and expenses and cash flows are translated at average
rates prevailing during the period. Translation adjustments arising from
differences in exchange rates from period to period have been reported as other
comprehensive income or loss in stockholders' equity (deficit).

Cash and cash equivalents:

The Company considers all highly liquid financial instruments with a maturity of
three months or less when purchased to be cash equivalents.

2 BUSINESS COMBINATIONS

The Company and its subsidiaries have completed a number of mergers and
acquisitions over the past few years. The Company merged with Old Bioenvision on
January 5, 1999, in exchange for 7,013,897 shares. The merger was accounted for
as a reorganization of companies under common control. Previously, on September
8, 1998, Bioenvision had merged with Eurobiotech Group Inc. ("Eurobiotech") in
exchange for 2,500,000 shares of its common stock. This transaction was
accounted for as a combination of a reorganisation of companies under common
control and the purchase of a minority interest as the principal shareholder of
Old Bioenvision owned approximately 55% of Eurbiotech. The purchase price for
the minority interest of $24,497 has been allocated as follows:

Technology rights                                                   $ 1,076,061
Less negative goodwill                                               (1,051,561)
                                                                    -----------
Total consideration                                                      24,500
                                                                    ===========

The value of technology is based on an assessment performed by an independent
specialist. In addition, on July 3, 1998 Old Bioenvision merged with BHV in
exchange for 4,150,000 shares of common stock in a transaction accounted for as
a reorganization of companies under common control. On May 21, 1998, BHV
acquired Biomed UK Limited in exchange for 300,000 shares of common stock and
warrants to purchase up to $900,000 of BHV common stock. Following the
acquisition of BHV by Old Bioenvision, the agreement was amended which resulted
in 300,000 shares of common stock in Old Bioenvision being issued in lieu of the
cancellation of the BHV stock and warrants. Proforma information for the
transaction has not been presented as Biomed UK Limited had immaterial
operations, assets and liabilities at the date of acquisition. The value of the
shares issued was not material and approximated the value of Biomed's tangible
net assets at the date of acquisition. Further, on May 20, 1998, BHV acquired
Bioheal Limited ("Bioheal") in exchange for 450,000 shares of common stock and
warrants to purchase up to $1,600,000 worth of BHV common stock. Following the
acquisition of BHV by Old Bioenvision, the agreement was amended which resulted
in 535,000 shares of common stock in Old Bioenvision being issued in lieu of the
cancellation of the BHV stock and warrants. Proforma information for the
transaction has not been presented as Bioheal Limited had immaterial operations,
assets and liabilities at the date of acquisition. The value of the shares
issued was not material and approximated the value of Bioheal's tangible net
assets at the date of acquisition.

                                       7
<PAGE>

The following table reconciles the operating results for prior periods to the
amounts reflecting restatement of prior periods to include the results of Old
Bioenvision:

                                                       Year ended June 30, 1998
Net loss
                                                              $   12,449
Bioenvision                                                    1,247,377
                                                              ----------
As restated                                                    1,259,826
                                                              ==========


3 PROPERTY PLANT AND EQUIPMENT

Property, plant and equipment consists of the following:

                                                        As at September 30,
                                                       2000             1999
                                                       ----             ----

Office equipment                                     $   1,526        $   1,878
Motor vehicles                                          50,677          110,609
                                                     ---------        ---------
Less:  accumulated depreciation                        (13,058)         (53,183)
                                                     ---------        ---------
                                                        39,145           59,304
                                                     ---------        ---------


4 INTANGIBLE ASSETS

                                                        As at September 30,
                                                       2000             1999
                                                       ----             ----

Purchased technology                                 $  23,037        $  25,598
Accumulated amortization                                (2,824)          (1,801)
                                                     ---------        ---------
                                                        20,213           23,797
                                                     ---------        ---------


5 COMMITMENTS

The Company uses office space provided by its financial advisors for its
executive offices at a cost of $3,000 per month in the United States and at no
cost in the United Kingdom. The provision of office space by the financial
advisors at no cost has been accounted for as a capital contribution.
Rent expenses for the three months to September 30, 2000 were $9,000 and for the
three months ended September 30, 1999 were $7,412.

6 INCOME TAXES

Due to operating losses and the inability to recognize corporation tax benefit
therefrom, there is no provision for income taxes for the three months ended
September 30, 1999 and 2000. Deferred income taxes reflect the net tax effects
of temporary differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the amount used for corporation tax
purposes. Significant components of the Company's deferred tax assets are as
follows:

                                       8
<PAGE>

                                                       2000             1999
                                                       ----             ----

Capitalization start-up costs (US)                  $  214,383        $ 223,220
Net operating loss carry forwards (US)               1,135,754          148,404
Net operating loss carry forwards (UK)               1,201,484          238,021
                                                    ----------        ---------
Total deferred tax assets                            2,337,238          609,645
                                                    ----------        ---------

As of September 30, 2000 the Company had net operating loss carry forwards of
approximately (i) $1.1 million which do not expire under UK law and (ii) $1.2
million for US purposes that expire in 20 years.

7 STOCKHOLDERS' EQUITY (DEFICIT)

In January 1997, the Board of Directors and stockholders approved a 1 for 1.986
reverse split of the Company's common stock and in January 1999 effected a 1 for
15 reverse stock split. All share and per share amounts in the accompanying
financial statements have been adjusted for these stock splits retroactively.
Under an agreement between the Company and Bioaccelerate Inc, a BVI company, of
Switzerland, dated March 21, 2000, Bioaccelerate purchased 727,273 common shares
of the Company at $2.75 per share. The agreement also provides Bioaccelerate
options to purchase two further tranches of 727,272 common shares each at $2.75
per share upon certain specified milestones being achieved. The specified
milestones have not yet been achieved.

8 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

On September 8, 1998 the Company entered to an agreement with Glen Investments,
Limited, a Jersey, Channel Islands, corporation wholly owned by Kevin R. Leech,
whereby Glen Investments has agreed to loan funds to the Company on an as-needed
basis based upon previously agreed budgets. Mr. Leech is a private investor who
is also the sole owner of Phoenix Ventures Limited, a Guernsey, Channel Islands
corporation and the holder of approximately 19% of the outstanding shares of
Common Stock of the Company. In exchange for its agreement to loan funds to the
Company, the Company issued to Glen Investments options to purchase up to
500,000 shares of Common Stock at an exercise price of $1.00 per share, all of
which options are currently exercisable. No amount has been included in the
statement of operations to reflect the issuance of the options because the fair
value of such options was not significant. Funds loaned under this agreement
bore interest at 8% per annum and were repaid in April 2000.

As of September 30, 2000 financial advisors to the Company held 342,468 shares
in the Company, which were issued in exchange for financial planning services
rendered. These services are reflected in the statement of operations as
administrative expenses. They are valued at $0.13 to $0.67 per share, which
reflected the most recent transaction for shares.

9 SUBSEQUENT EVENTS

In November 2000, the Company obtained a finance facility for up to $2 million,
from a shareholder, Kevin Leech, which would be available through November 30,
2001.

                                       9
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

         The information set forth in this Report on Form 10-QSB including,
without limitation, that contained in this Item 2, Management's Discussion and
Analysis and Plan of Operation, contains "forward looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. Actual results may
materially differ from those projected in the forward-looking statements as a
result of certain risks and uncertainties set forth in this report. Although
management believes that the assumptions made and expectations reflected in the
forward-looking statements are reasonable, there is no assurance that the
underlying assumptions will, in fact, prove to be correct or that actual future
results will not be different from the expectations expressed in this report.

Overview

         Bioenvision is a development-stage, biopharmaceutical company primarily
engaged in the development of products and technologies for the treatment of
cancer. We have acquired development, manufacturing and marketing rights to four
technologies from which a range of products have been derived and from which
additional products may be developed in the future. We aim to continue
developing our existing platform technologies, acquire additional technologies
and products with multiple uses, and commercialize products for the
multi-billion dollar cancer treatment market.

         We expect to begin marketing Trilostane for the treatment of
post-menopausal breast cancer on a commercial scale in the United States and in
Europe in the second quarter of 2001. The product has been FDA-approved in the
United States for another use but we plan to apply to use the drug in the United
States for treatment of hormone sensitive cancers, such as breast cancer and
advanced prostate cancer. In addition, three of the other products and
technologies to which we have acquired rights are presently being tested in
clinical trials, and an additional eight are in the pre-clinical stage of
development. Assuming the successful completion of clinical trials, we
anticipate that by the end of 2002, five of our products and technologies will
have received regulatory approval for specific disease (primarily cancer)
treatment indications in the United States or Europe and seven will be in the
final stages of the clinical trial process.

         We have had discussions with potential development partners over the
past year and plan to continue to explore the possibilities for co-development
and sub-licensing. We expect to enter into a co-development agreement for at
least one of our products within the next few months, although there can be no
assurances that any such agreement will be reached.

         We are considered a development-stage company for accounting purposes
because we have not generated any material revenues to date. Accordingly, we
have no relevant operating history upon which an evaluation of our performance
and prospects can be made. We are prone to all of the risks to the establishment
of any new business venture. You should consider the likelihood of our future
success to be highly speculative in light of our limited operating history, as
well as the limited resources, problems, expenses, risks and complications
frequently encountered by similarly situated companies. To address these risks,
we must, among other things:

                                       10
<PAGE>

o        satisfy our current and future capital requirements for the
         implementation of our business plan;

o        commercialize our existing products;

o        complete development of products presently in our pipeline and obtain
         necessary regulatory approvals for use;

o        implement and successfully execute our business and marketing strategy
         to commercialize products;

o        establish and maintain our client base;

o        continue to develop new products and upgrade our existing products;

o        respond to industry and competitive developments; and

o        attract, retain, and motivate qualified personnel.

         We may not be successful in addressing these risks. If we are unable to
do so, our business prospects, financial condition and results of operations
would be materially adversely affected. The likelihood of our success must be
considered in light of the development cycles of new pharmaceutical products and
technologies and the competitive and regulatory environment in which we operate.

         We have succeeded in attracting $2 million in equity capital during the
past 12 months. The investor in that transaction agreed to fund an addition $4
million when certain performance targets are achieved. The investment has
allowed us to continue and expand our research and clinical development but the
investment to date has been insufficient to establish the corporate
infrastructure and the sales and marketing organization necessary to generate
sales revenue. We are currently seeking additional equity funding for
Bioenvision. We have had recurring losses from operations, and have had a
working capital deficiency and stockholders' deficit at September 30, 2000.
Accordingly, there is a note in the notes to our financial statements indicating
that these matters raise substantial doubt about our ability to continue as a
going concern. Our financial statements do not include any adjustments that
might result from this uncertainty. Kevin Leech, who through two wholly-owned
investment vehicles, is a major investor in Bioenvision, has provided a finance
facility of up to $2 million, available until November 30, 2001. In addition,
the Company's directors and attorneys have agreed to defer salaries and certain
fees until sufficient long-term funding has been raised by the Company. Deferred
salaries and fees amounted to approximately $1.1 million at September 30, 2000
and are included in accounts payable or other liabilities payable to third
parties in the accompanying balance sheet. Our financial statements do not
include any adjustments that might result from this uncertainty. Our financial
statements and related notes contain more information about this risk.

Plan of Operations

         We have acquired development and marketing rights to a portfolio of
four platform technologies developed over the past fifteen years, from which a
range of products have been derived and additional products may be developed in
the future. Although we intend to commence marketing our lead product, Modrefen,
and to continue developing our existing platform technologies and
commercializing products derived from such technologies, a key element of our
business strategy is to continue to acquire, obtain licenses for, and develop
new technologies and products that we believe offer unique market opportunities
and/or complement our existing product lines. Once a product or technology has
been launched into the market for a particular disease indication, we plan to
work with numerous collaborators, both pharmaceutical and clinical, in the
oncology community to extend the permitted uses of the product to other
indications. In order to market our products effectively, we intend to develop
marketing alliances with strategic partners and may co-promote and/or co-market
in certain territories.

                                       11
<PAGE>

Liquidity and Capital Resources

         From the period of our inception through December 1998, we did not
engage in any active trade or business. In January 1999, we 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 our controlling stockholders, Old
Bioenvision became our wholly-owned subsidiary and changed its name to Bionco
Marketing, Inc., and we changed our name from Ascot Group, Inc. to Bioenvision,
Inc.

         To date, we have incurred significant and increasing net losses. We
anticipate that we may continue to incur significant operating losses for the
foreseeable future. There can be no assurance as to whether or when we will
generate material revenues or achieve profitable operations. Our independent
public accountants have included a footnote in their report on our financial
statements, stating that certain factors raise substantial doubt about our
ability to continue as a going concern.

         We have also incurred increasing research and development costs. The
increase in research and development costs is a result of our increasing our
research activities in-line with the development of our products.

         Based on our operating plan, we are seeking arrangements for long-term
funding through additional capital raising activities, including one or more
offerings of equity and/or debt through private placements and/or equity
offerings. We are also actively seeking strategic alliances in order to develop
and market our range of products. In November 2000, we obtained a finance
facility for up to $2 million, from Kevin Leech, who through two wholly-owned
investment vehicles, is a major investor in Bioenvision. This facility is
available to us until November 30, 2001. Before these plans can be effected,
however, we may however, require additional financing within this time frame due
to unanticipated changes in economic conditions or other unforeseen
circumstances. In the event our plans change or our assumptions change or prove
to be inaccurate, we could be required to seek additional financing sooner than
currently anticipated. Any additional financing may not, however, be available
to us when needed on commercially reasonable terms, or at all. If this were to
occur, our business and operations would be materially and adversely affected.

                                       12
<PAGE>

                           PART II - OTHER INFORMATION

Item 1. Legal Proceedings

There are currently no pending legal proceedings against the company.

Item 2. Changes in Securities

There have been no changes in the Company's securities for the period reported.

Item 3. Defaults upon Senior Securities

There has been no default in the payment of principal, interest, sinking or
purchase fund installment.

Item 4. Submission of Matters to a Vote of Security Holders

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

There have been no Reports on Form 8-K for the period covered by this filing.

                                       13
<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.

Date: November 16, 2000                       By: /s/ Christopher B. Wood, M.D.
                                                 -------------------------------
                                                 Christopher B. Wood, M.D.
                                                 President



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