UNITED STATES
SECURITIES EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
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[X] Quarterly Report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended March 31, 2000
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BIOENVISION, INC.
(Exact name of registrant as specified in its charter)
Delaware 113375915
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State of Incorporation IRS Employer ID No.
590 Madison Avenue
New York, New York 10022
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Address of principal Executive Offices Zip Code
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 March 31, 2000, the following shares of the
Registrant's common stock were issued and outstanding:
Voting common stock 7,249,897
Traditional Small Business Disclosure (check one): Yes X No
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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
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PART I - FINANCIAL INFORMATION
BIOENVISION INC.
(A Development Stage Company)
CONDENSED CONSOLIDATED BALANCE SHEET
<TABLE>
As Of As Of
March 31, 2000 March 31, 1999
(Unaudited) (Unaudited)
--------------------------------
<S> <C> <C>
ASSETS
Current Assets
Cash 0 0
Accounts Receivable 0 0
___________ ___________
Total Current Assets 0 0
Property Plant and Equipment 49,928 0
Intangible Assets 22,496 7,014
___________ ___________
TOTAL ASSETS 72,424 7,014
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities 2,661,349 115,988
Other Liabilities -
Related Parties 770,226 18,650
___________ ___________
Total Liabilities 3,431,575 134,638
Stockholders' Equity
Common Stock, $.001 par value,
Authorized 25,000.000 Shares;
Issued and Outstanding as of
March 31, 1999 7,243,897 shares;
Issued and Outstanding as of
March 31, 2000 7,249,096 shares; 7,249 7,244
Additional Paid in Capital 301,288 45,170
Deficit Accumulated During the
Development Stage (3,686,029) (180,038)
Cumulative Transition Adj. (2,101) -
___________ ___________
Total Stockholders' Equity (3,359,151) (127,624)
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY 72,424 7,014
</TABLE>
The accompanying notes and accountant's report are an integral
part of these financial statements.
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BIOENVISION, INC.
(A Development Stage Company)
CONDENSED CONSOLIDATED STATEMENT OF LOSS
(Unaudited)
<TABLE>
For the 3 Mos Ended
March 31
2000 1999
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<S> <C> <C>
TOTAL REVENUES: $ 0 $ 0
OPERATING EXPENSES:
General and Administrative Expenses 605,584 114,763
Research and Development Costs 900,003 -
Interest Payable 36,170 -
Depreciation Expense 11,520 -
Amortization Expense 931 -
_________ _________
OPERATING LOSS (1,554,211) (114,763)
Income Taxes - -
NET LOSS (1,544,211) (114,763)
Basic and diluted net loss per shares 0.21 0.01
Shares used in computed basic and
diluted net loss per share 7,249,096 7,243,897
</TABLE>
The accompanying notes and accountant's report are an integral
part of these financial statements.
<PAGE>
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BIOENVISION, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS (unaudited)
<TABLE>
For the 3 mos For the 3 mos
Ended Ended
to to
March 31, 2000 March 31, 1999
________________________________________
<S> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net Loss $(1,554,211) $ (114,763)
Adjustments to Reconcile Net Loss
to Net Cash Used in operating
Activities:
Other liabilities
- related party 419,298 -
Depreciation 11,520 -
Amortisation 931 -
Accounts receivable 979 -
Accounts payable 1,121,467 112,263
___________ ___________
Net Cash Used in
Operating Activities (16) 2,500
CASH FLOWS FROM FINANCING
ACTIVITIES:
Purchase of property and
equipment - -
Proceeds from issuance of
Common stock - 7,014
Increase in loan payable - 2,500
___________ ___________
Net Cash Provided
by Financing Activities - 9,514
___________ ___________
Net increase (decrease) in
cash and cash equivalents (16) 0
Cash at Beginning of Period 16 0
Cash at End of Period 0 0
Supplemental Disclosure of
Cash Flow Information
Cash Paid During the Period for
Interest Expense 0 0
Corporate Taxes 0 0
</TABLE>
The accompanying notes and accountant's report are an integral
part of these financial statements.
<PAGE>
<PAGE>
BIOENVISION, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
March 31, 1999
NOTE 1 - NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
A. Description of Company
BIOENVISION, INC.,("the Company") is a for-profit corporation,
incorporated under the laws of the State of Delaware on August
16, 1996. The Company is a developmental stage, biopharmaceutical
company primarily engaged in the research and development of
products and technologies for the treatment of cancer. The
Company plans to acquire development and marketing rights to a
portfolio of platform technologies that have been developed in
the past, from which products will be derived and additional
products may be developed in the future. The company's primary
objective is to continue developing its existing technologies and
to commercialize products derived from such technologies.
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., was
also a development stage company incorporated utilizing the name
Micar Systems, Inc., under laws of the State of Delaware.
Bioenvision Inc., was also a developmental stage company
incorporated utilizing the name Micar Systems, Inc., under the
laws of the State of Delaware on November 6, 1996. On November
22, 1996, its name was changed to Micar Enterprises, Inc. On
January 16, 1997 it changed its name to Redleaf Holdings Inc.,
and on July 3, 1998 it changed its name to Bioenvision, Inc. On
July 3, 1998, Bioenvision Inc., acquired Biotechnology and
Healthcare Ventures Limited (a company registered in Ireland).
On September 8, 1998, Bionevision Inc., acquired Eurobiotech
Group Inc., (a Delaware Corporation).
The December 21, 1998 acquisition agreement between the Company
and Bioenvision Inc., called for a 1 for 15 reverse split of the
Company's then outstanding shares. Ascot Group then issued
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, closed on January 4, 1999, the Company changed its
name to Bioenvision Inc., and the Company then had 7,243,897
shares of stock outstanding. See Note 5.
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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 financial statements expressed in
pounds sterling for the six months ended 31 March, 2000 have been
restated in U.S. dollars at the prevailing exchange rate of GBP1.00
= $1.60 solely for the convenience of investors.
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.
NOTE 2 - PROPERTY, PLANT AND EQUIPMENT
The Company subleases 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
$2,500 per month beginning January 1, 1999. The Company
uses 1,000 square feet of office space for executive offices at
590 Madison Avenue, New York, New York for $2,500 per month
beginning January 1, 1999. Both offices are sublet from Warren
Capital Ltd. The lease agreements run for the year ended
December 31, 1999. Rent expense for the nine months ended March
31, 2000 was GBP13,500 ($21,600).
March 31, 2000
(Pounds sterling) (Dollars)
Office equipment 1,140 1,824
Motor Vehicles 67,154 107,446
--------------------------
68,294 109,270
Less: accumulated depreciation (37,089) (59,342)
--------------------------
31,205 49,928
NOTE 3 - EARNINGS PER SHARE
Net Loss per share $( 0.02)
NOTE 4 - LIQUIDITY
The Company's viability as a going concern is dependent upon
raising additional capital, and ultimately, having net income.
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 March 31,
1999 no revenue and a net loss from operations of $180,038.
As of March 31, 1999, the Company had a net capital deficiency
of $127,624.
The Company has incurred losses from operations and is not
generating cash from operations. Operations to date have been
funded principally by equity capital, a loan to the corporation,
and credit extended by vendors. 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's ability to continue to develop its infrastructure
depends on its ability to raise other additional capital. The
financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
The Company is still building its operational infrastructure.
Additional capital raised by the Company, if any, will be used
for this purpose and to fund its planned operations.
NOTE 5 - GOODWILL
In connection with the purchase of 100 percent of the issued and
outstanding stock of Bioenvision, Inc., the company exchanged
7,013,897 shares of its stock for 7,013,897 shares of Bioenvision
Inc.'s stock. This asset is valued at the par value of the stock
issued. The acquired company had no assets or liabilities at the
date of acquisition.
NOTE 6 - INTANGIBLE ASSETS
March 31, 2000
(Pounds sterling) (Dollars)
Purchased Technology 15,541 24,866
Accumulated Amortization (1,481) (2,370)
--------------------------
At March 31, 2000 14,060 22,496
<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION
Bioenvision is a development-stage, biopharmaceutical company
primarily focused on the research and development of products and
technologies for cancer treatment. The Company has acquired
development and marketing rights to a portfolio of four platform
technologies that have been 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. Bioenvision's primary objectives are to commence
marketing its lead product, Modrefen, and to continue developing
its existing platform technologies and commercializing products
derived from those technologies.
Bioenvision has continued the clinical and pre-clinical
development of the platform technologies and the lead products
arising from them. For the lead product, Modrefen, the company
has been preparing the ground for additional clinical trials in
breast and prostate cancer. Modrefen has been extensively tested
in almost 800 patients with advanced breast cancer. Sub-set
analysis showed that the drug worked best in patients who had
responded to hormonal therapy, with response rates in excess of
40% in this group. It was on the basis of these data that the
product license was granted in the UK. New trials will explore
the role of ERb in the development of resistance to hormone
therapy and the potential use of Modrefen in hormone refractory
patients through its action on the second estrogen receptor.
Trials of Modrefen are also planned to explore the role of the
drug on ERb in prostate cancer. The estrogen receptor is known to
play some part in controlling normal prostate growth and may also
influence growth of prostate cancer. Pre-clinical tests have
indicated that Modrefen can decrease prostate growth in animals
and will modulate ligand binding to ERb in prostate cancer cell
lines. There can be no guarantee that this can be translated into
clinical efficacy.
The emphasis has been on the role of the products in oncology,
the company's prime focus area. However, alongside the
development in the cancer field the company has also been
evaluating the potential for its products in other therapeutic
areas. This has not incurred additional funding for the company
but has been done as part of the ongoing evaluation of the
product under existing and approved budgets. Modrefen has a
product license in the USA for the treatment of hyper-adrenal
conditions, such as Cushing's disease and Conn's syndrome. Both
diseases are uncommon in man and the market potential is small.
However, Cushing's disease is not uncommon in certain breeds of
dog, and trials have been conducted for this condition in Italy,
Australia, South Africa and at the lead center at the Royal
Veterinary College in Cambridge, England. The trials have
confirmed the drug's efficacy in treating the disease and have
also concentrated on formulation, dosage and timing of
administration of the drug. The preliminary results were
presented at an international scientific meeting recently in the
USA. To data, the company has had no plans to develop the
veterinary market but, with the excellence of the new data, this
position is being reviewed. Discussions have begun with a company
to distribute the product to the veterinary market in the UK.
Negotiations are at an advanced stage with a biotech company in
Germany for the sub-licensing of the commercial rights to
Modrefen in the European marketplace. It has alwayd been the
company's strategy to develop the products primarily for the USA
oncology market and to seek partners for the other international
markets.
The Phase II trial of clofarabine has commenced at the M D
Anderson Cancer Center, Houston. The drug is being given to
fludarabine-resistant patients with chronic lymphocytic leukemia
and to patients with acute leukemia. The trial has a long way to
go before completion but early results are promising. There can
be no guarantee that the trial will be successful or that the
drug will reach market. The Food and Drug Administration have
asked for additional information on the manufacturing process of
clofarabine, and that information has been supplied.
The gene therapy program has continued with evaluation of the
patients originally treated with the albumin gene product. All
patients entered into that trial had a response to the treatment,
with an increase in serum albumin levels and an improvement in
clinical condition. Some of the patients have had further
injections of the plasmid, and all have had a response. The
company plans to expand the clinical trial in patients with
hypoalbuminemia once a suitable manufacturer of the plasmid can
be identified. The manufacturing process is critical to the
efficacy of the pasmid; initial batches of the product were made
using a modified plasmid construct and efficacy was lost. The
company is actively exploring new routes for manufacture of the
product. In addition, the plasmid has been combined with the
thrombopoietin gene. Experiments have confirmed the ability of
the plasmid to increase platelet counts in animals.
The fourth platform technology group - the cytostatic agents -
has also been advanced in recent months. The company has been
evaluating a number of compounds that inhibit the retinoic acid
metabolizing enzyme. This leads to a build-up of retinoic acid in
cells. Since retinoic acid is important in maintaining
differentiation of cells and has been shown to have an anti-
proliferative effect in cancer, these compounds may have
important clinical applications. The company has identified two
compounds in particular that exhibit strong inhibition of the RA
metabolizing enzyme and little or no toxicity to normal cells.
These compounds will be further evaluated over the next six
months and specifically to explore their effect on cancer cells.
YEAR 2000 ISSUE
The Company did not incur any problems, costs or expense related
to the year 2000 issue.
<PAGE>
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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.
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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.
(Registrant)
/s/ Christopher Wood
President
Date: May 22, 2000
