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, 1999
- -----------------------------------------------------------------
BIOINCUBATION CORP.
----------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 22-3656615
-------- ------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
625 N. Michigan Avenue
Chicago, Illinois 60611
- ---------------------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number (312) 867-1052
--------------
As of September 30, 1999, the following shares of the
Registrant's common stock were issued and outstanding:
25,000,000 shares authorized, $0.001 par value
6,000,000 issued and outstanding
<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. . . . . . . . . . . . .8
Note 3. EARNINGS PER SHARE. . . . . . . . . . . . . 8
Note 4. LIQUIDITY . . . . . . . . . .. . . . . . . .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
<PAGE>
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
To the Board of Directors of BIOINCUBATION CORP.
We have reviewed the accompanying balance sheet of Bioincubation
Corp., (a development stage company) as of September 30, 1999 and
the related statements of loss and accumulated deficit, 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 Bioincubation Corp.
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.
Graf Repetti & Co., LLP
Dated: New York, New York
November 11, 1999
<PAGE>
<PAGE>
BIOINCUBATION CORP.
CONDENSED CONSOLIDATED BALANCE SHEET
<TABLE>
As Of As Of
Sep. 30, 1999 June 30, 1999
(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 14,963 19,850
_________ ________
Total Current Liabilities 14,963 19,850
Loan Payable - Note 5 12,500 0
_________ ________
Total Liabilities 27,463 19,850
Stockholders' Equity
Common Stock, $.001 par value,
Authorized 25,000.000 Shares;
Issued and Outstanding
6,000,000 Shares 6,000 6,000
Additional Paid in Capital 10,100 10,100
Deficit Accumulated During the
Development Stage (43,563) (35,950)
_________ ________
Total Stockholders' Equity (27,463) (19,850)
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $0 $0
</TABLE>
<PAGE>
<PAGE>
BIOINCUBATION CORP.
CONDENSED CONSOLIDATED STATEMENT OF INCOME (LOSS)
<TABLE>
For the 3 Mos Ended For the 3 Mos Ended
Sept. 30 June 30
1999 1998 1999 1998
<S> <C> <C> <C> <C>
-----------------------------------------------------------
TOTAL REVENUES: $ 0 N/A 0 N/A
OPERATING EXPENSES:
Accounting 1,500 N/A 2,600 N/A
Legal 2,500 10,000
Rent Expense-Note 2 3,600 7,200
Research and Devel. 0 12,000
Other Start Up 0 4,000
Filing Fee 13 13
________ _______ ________ ________
NET LOSS (7,613) N/A (35,850) N/A
DEFICIT - BEGINNING
OF PERIOD (35,950)
DEFICIT - END
OF PERIOD (43,563)
NET LOSS PER SHARE (.00) (.01)
Weighted Average
Number of Shares
Outstanding 6,000,000 2,454,795
</TABLE>
<PAGE>
<PAGE>
BIOINCUBATION CORP.
STATEMENT OF CASH FLOWS (unaudited)
<TABLE>
For the three For the three
Months Ended Months Ended
to to
Sept. 30, 1999 Sept. 30, 1998
________________________________________
<S> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net Loss $ (7,613) N/A
Adjustments to Reconcile Net Loss
to Net Cash Used in operating
Activities:
Changes in Assets and Liabilities:
Decrease in Accrued Expenses (4,887)
________
Total Adjustments (4,887)
Net Cash Used in
Operating Activities (12,500)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Increase in Loan Payable 12,500
________
Net Cash Provided
by Financing Activities 12,500
Net Change in Cash 0
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>
<PAGE>
<PAGE>
BIOINCUBATION CORP.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
NOTE 1 - NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
A. Description of Company
BIOINCUBATION CORP.("the Company") is a for-profit corporation,
incorporated under the laws of the State of Delaware on October
31, 1996 as Ecotech Solutions, Inc. On March 3, 1999, the
Company changed its name to Bioincubation Corp.
The Company is a development stage company and is also considered
a shell company at this time based upon the fact that the Company
has no significant assets. The Company's principal business
purpose is to locate and consummate a merger or alliance with a
private entity.
B. Basis of Presentation
Financial statements are prepared on the accrual basis of
accounting. Accordingly, revenue is recognized when earned and
expenses when incurred.
C. 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 ind 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 5.
NOTE 2 - USE OF OFFICE SPACE
The Company uses office space for its executive offices at two
locations. The fair market value of the 200 square foot office
at The Studio, St. Nicholas Close, Elstree, Herts, United Kingdom
is $600 per month. Use of this office space began January 1,
1999. The fair market value of the 300 square foot office at
Suite 600, 625 N. Michigan Avenue, Chicago, Illinois is also $600
per month. Use of this office space began January 1, 1999.
The amount for each office is reflected as an expense with a
corresponding credit to accrued expenses, as the shareholders
expect to be reimbursed in the future.
NOTE 3 - EARNINGS PER SHARE
FOR THE THREE MONTHS ENDED
SEPT. 30, 1999
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'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 September
30, 1999 no revenue and a net loss from operations of $43,563.
As of September 30, 1999, the Company had a net capital
deficiency of $27,463.
The Company requires additional capital principally to meet its
costs for the implementation of its business plan, for general
and administrative expenses. It is not anticipated that the
Company will be able to meet its financial obligations through
internal net revenue in the foreseeable future. Bioincubation
Corp., 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. See Note 5.
NOTE 5 - LOAN PAYABLE - CHANNING INVESTMENTS LTD.
Channing Investments Ltd., a shareholder of the Company, will
lend up to $50,000 to the Company upon request. The loan is not
evidenced by a note. The informal agreement calls for no payment
of interest. As of September 30, 1999, Channing Investments
Ltd., had paid $12,500 of expenses on behalf of Bioincubation
Corp. The Company intends to repay the loan out of any
fund raising that it may carry out or when the company achieves
sustainable revenue.
<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION
RESULTS OF OPERATIONS
The Company's principal business purpose is to locate and
consummate a merger or alliance with a private entity. Because
of the Company's current status having no assets and no recent
operating history, in the event the Company does successfully
acquire or merge with an operating business opportunity, it is
likely that the Company's present shareholders will experience
substantial dilution and there will be a probable change in
control of the Company.
Potential investors are alerted that any investment in the
Company is highly complex and risky. The Company has only
limited resources and no assets at this time making it very
difficult for the Company to find favorable opportunities. There
can be no assurance that the Company will be able to identify and
acquire any business opportunity which will ultimately prove to
be beneficial to the Company and its shareholders. The Company
will select any potential business opportunity based on
management's business judgment.
The Company is a blank check company as defined by the
Securities and Exchange Commission. The definition of a blank
check company is one which has no specific business or plan other
than to consummate an acquisition of or merge into another
business or entity. Any target acquisition or merger candidate
of the Company will become subject to the same reporting
requirements as the Company upon consummation of any such
business combination. Thus, in the event that the Company
successfully completes an acquisition or merger with another
operating business, the resulting combined business must provide
audited financial statements for at least the two most recent
fiscal years or, in the event that the combined operating
business has been in business less than two years, audited
financial statements will be required from the period of
inception of the target acquisition or merger candidate.
The Company has no recent operating history and no representation
is made, nor is any intended, that the Company will be able to
carry on future business activities successfully. Further, there
can be no assurance that the Company will have the ability to
acquire or merge with an operating business, develop sustaining
business opportunities or acquire property that will be of
material value to the Company. In the opinion of management,
inflation has not and will not have a material affect on the
operations of the Company as it does not currently have any
significant assets, debt or income.
The Company intends to develop its technology base and, if
cleared by the SEC as a reporting company, locate another entity
to consummate a merger transaction or alliance. In the event a
suitable candidate is located, the Company would then seek to
raise capital for the purpose of further developing its
technology base in the biotech industry. The Company would also
seek to undertake specific research for the purpose of developing
biotech products for sale. The particular technologies which
management intends to pursue include cellular tissue development,
gene coding and hypothermia applications.
Each of these technologies are applied for the detection and
treatment of cancer. The Company intends on developing these
technologies in conjunction with academic institutions,
scientists and professors. By working in conjunction with such
entities and individuals, the Company believes it will be better
suited to attract a suitable merger candidate or business
opportunity. Additionally, by developing and cultivating the
technologies in the area of cancer detection and treatment, the
Company believes it will be improve its marketability and locate
merger candidates or business opportunities.
Governmental approval may be required for any of the products
developed by the Company. Such approval cannot be guaranteed or
estimated and therefore, if required, it may take the Company
more than twelve (12) months to generate revenue from its
operations.
The Company's first step in seeking to locating a merger or
alliance candidate is the filing of a Form 10-12G with the SEC
for the purpose of making information regarding itself more
available to the public. The next step to be taken by the
Company will be to seek new technologies and implement research.
Once a suitable candidate or business opportunity is located, the
Company intends on seeking to raise capital through a public
offering of its common stock. Any funds raised in the offering
will be utilized towards the development of the Company's
technology base. Development of the technology base includes the
research and implementation of biotechnological products for
ultimate sale to the marketplace.
The Company competes with other entities which may consider
engaging in an initial public offering. The Company believes
that it would be more advantageous for such entities to enter
into an alliance or merger transaction with the Company, rather
than conducting an initial public offering, as the latter
requires substantial time, effort and expense which may not
necessarily benefit such an entity. It should be noted that
there exist other shell corporations indistinguishable from the
Company that are available for purchase by companies that would
like to obtain status as a registered Exchange Act company.
The Company may seek or target a potential merger candidate which
is outside the United States. It should be noted that there are
inherent risks which may arise for the Company in the event it
does engage in a business transaction with such an outside
entity. Factors relevant to international laws, foreign exchange
rates, duties, taxation and political stability of the targeted
entity's country will all be considered to determine the impact
of such factors on the Company. In the event the Company
believes, in its discretion, that any of the aforementioned
factors create a substantial and uncertain risk for the Company,
then any business transaction with such targeted entity shall not
proceed. Each targeted entity outside the United States will be
evaluated on a case by case basis by the Company to consider the
risks and factors inherent to consummating a business transaction
with such entity.
Because the Company lacks funds and significant assets, 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.
Further, the Company's directors will forego any compensation
until such time as the Company begins to generate sufficient
income to cover such expenses. The contingency will be that
parties will be paid for their services upon the attainment of a
specific milestone by the Company to be agreed to with such
party. However, if the Company engages outside advisors or
consultants in search for business opportunities, it may be
necessary for the Company to 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 used any notices or advertisements in its
search for any business opportunities. In its search for a
merger or alliance candidate, the Company has utilized business
contacts, personal networking and seeking out entities in the
biotech industry. The Company has had no discussions,
understandings or agreements with any consultant in regard to the
Company's business activities. The Company's officers in the
past have not used any particular consultants or advisers on a
regular basis.
In the opinion of management, inflation has not and will not have
a material effect on the operations of the Company until such
time as the Company successfully completes an acquisition or
merger. At that time, management will evaluate the possible
effects of inflation on the Company as it relates to its business
and operations following a successful acquisition or merger.
In the event the Company consummates a merger transaction or
acquisition, the Company believes that there will be a change in
control in the Company. The Company believes that any merger
may include the new issuance of common stock in the Corporation
to a potential merger candidate followed by a reverse split of
the Company's issued common stock thereby effectively passing
control of the Company to the merged candidate. The Company
believes that, depending on the candidate targeted by the
Company, a candidate may require that the shareholders reduce the
percentage of their shareholding in order to consummate a
transaction. This would therefore cause the Company's current
shareholders to suffer dilution and the Company wishes to alert
prospective investors of this.
The Company will not borrow funds for the purpose of funding
payments to the Company's promoters, management or their
affiliates or associates. Any funds borrowed by the Company will
be utilized to pay statutory, legal and accountant fees expended
by the Company.
There is a probability that there will be a change in control of
the Company upon the consummation of an acquisition, merger or
business transaction however the Company cannot predict or
estimate such a probability. The Company may decide to
relinquish control in the event it believes during negotiations
with another entity that a change in control would benefit the
Company's shareholders and advance the Company's business plan
for the purpose of attaining sustainable growth and revenue. In
such event, management shall consult with its shareholders to
determine whether it would be advantageous to relinquish control
of the Company. This means that shareholders will be given an
opportunity to provide their input and to consulted prior to the
consummation of any merger or alliance transaction.
The Company has not adopted a policy relating to a cash finder's
fee to anyone who locates a transaction which is consummated by
the Company. The Company does not intend to issue securities
(debt or equity) as a finder's fee. Finder's fees will not be
payable to officers, directors or promoters of the company. For
this reason, no plan of action has currently been undertaken to
prevent any conflict of interest regarding the payment of such
fees to officers, directors or promoters of the company. This
means that finder's fees will not be payable to officers,
directors or promoters of the company and that no formal policy
or action, in way of by-laws or directives, have been created
reflecting this.
There is no present potential that the Company may acquire or
merge with a business or company in which the Company's
promoters, management or their affiliates or associates, directly
or indirectly, have an ownership interest. Existing corporate
policy does not permit such transactions, unless disclosed by the
individual with such interest and consent to by the Board of
Directors. This policy based upon an understanding between
management and the Board of Directors. Management is unaware of
any circumstances under which this policy, through its own
initiative, may be changed.
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, reflect the operations of its early stage.
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 its
start up. It is not anticipated that the Company will be able to
meet its financial obligations through internal net revenue in
the foreseeable future. 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 implementation of its business
plan is dependent upon its ability to raise substantial funding.
Management's plan is to find and consummate a merger or business
acquisition in order to maximize the benefit of ownership by
shareholders in the Company.
To mitigate the uncertainty surrounding the Company's
continued existence during its early stage, and to the issues
relating to its liquidity, the Company plans to seek additional
funding from its shareholders, including possibly Channing
Investments, at such time when the Company requires additional
funding to meet its fiscal needs. Shareholders have indicated
that they may advance funds to the Company to meet its needs and
the Company's management feels that, if required, funding
may be provided. Investors should be alerted however that
there are no guarantees that such funding would be
provided by the shareholders.
The Company has an arrangement with Channing Investments to
supply funds to the Company up to an amount of $50,000. The
Company may seek additional funding from its shareholders,
including possibly Channing Investments, at such time when the
Company requires additional funding to meet its fiscal needs.
Shareholders have indicated that they may advance funds to the
Company to meet its needs and the Company's management feels
that, if required, funding may be provided. Investors should be
alerted however that there are no guarantees that such funding
would be provided by the shareholders.
Channing Investments Ltd., a shareholder of the Company, will
lend up to $50,000 to the Company upon request. The loan is not
evidenced by a note. The informal agreement calls for no payment
of interest. As of September 30, 1999, no amount was outstanding
on the loan. After September 30, 1999, Channing Investments
Ltd., paid $12,500 of expenses on behalf of Bioincubation Corp.
The Company intends to repay the loan, in a lump sum payment,
from any fund raising that it may carry out or when the company
achieves sustainable revenue.
YEAR 2000 DISCLOSURE
The Company has not yet commenced any material active operation
systems which will be affected by the Year 2000 problem. The
Company, in assessing a potential merger or alliance candidate,
will seek assurance that any such candidate's operations are Y2K
compliant. If not, the Company will forego entering into any
merger or alliance transaction until after the year 2000.
<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 instruments defining the rights of the holders of any class
of registered securities have not ben modified.
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 are no exhibits attached and no reports on Form 8-K were
filed during the quarter for which this report is filed.
<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.
BIOINCUBATION CORP.
(Registrant)
Date: November 10, 1999
/s/ Julian Andrews
President
