<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d)
of the Securities and Exchange Act of 1934
For the Quarter Ended: Commission File Number
---------------------- ----------------------
October 31, 2000 0-28973
BioPulse International, Inc.
----------------------------------------------
(Name of small business issuer in its chapter)
Nevada 87-0634278
------------------------------- -------------------------
(State or other jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
10421 South Jordan Gateway, Suite 500, South Jordan, Utah 84095
--------------------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code (801) 523-0101
-----------------
Securities registered pursuant to section 12(b) of the Exchange Act:
None
Check whether the Issuer (1) filed all reports required to be filed by
section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such
report(s), and (2) has been subject to such filing requirements for the
past 90 days. (1) Yes [X ] No [ ]
State the number of shares outstanding of each of the registrants classes
of common equity, as of the latest practicable date:
As of October 31, 2000, issuer had approximately 7,464,610 shares of its
$.001 par value common stock outstanding.
</Page>
<PAGE>
PART I FINANCIAL INFORMATION
Item 1 Financial Statements
See pages F-1 through F-8 directly following the signature page of
this Form 10-QSB.
Consolidated Balance Sheet as of October 31, 2000
and October 31, 1999 F-3
Consolidated Statement of Operations for the nine
months ended October 31, 2000 and 1999, and for
the Quarters then ended F-4
Consolidated Statement of Stockholders' Equity for
October 31, 2000 F-5
Consolidated Statement of Cash Flows for the nine
months ended October 31, 2000 and 1999. F-6
Notes to Financial Statements F-7
Item 2 Managements Discussion and Analysis
OVERVIEW
BioPulse International, Inc., (the "Company" or "BioPulse") was
incorporated in the state of Nevada on July 13, 1984 originally under the
name Universal Financial Capital Corp. The Company changed its name in
September 1985 to International Sensor Technologies, Inc. As International
Sensor Technologies, Inc., the Company incurred heavy losses and no revenue
from operations. The Company also experienced five years of inactivity. On
January 12, 1999, the Company again changed its name to BioPulse
International, Inc. when it acquired BioPulse, Inc. The company is
considered to be in its early stages of market development. The company is
in the business of managing drug and rehabilitation centers, integrated
medicine clinics, and medical research programs.
BioPulse offers a variety of alternative medicinal products and
services, including dietary supplements, clinical procedures, and medical
equipment from around the world. The Company's efforts focus on treatments
for degenerative diseases such as cancer.
During 1998, BioPulse identified the initial protocols to be included
in the BioPulse treatment programs. The Company evaluated a variety of
techniques and products before determining which ones were most
appropriate. Some of the selected treatments have not yet been approved by
the United States Food and Drug Administration ("the FDA"), so they are
being studied at clinics outside the United States. The Company made
arrangements to have clinical studies done at clinics owned by licensed
physicians in Mexico and Germany that would utilize these protocols.
2
</Page>
<PAGE>
During 2000, the Company began expanding the scope of the treatments
it was studying to include biotech developments. The Company believes that
recent advances in biochemistry and microbiology have the potential to
explain the observable benefits of alternative medicine so that these
treatments can be optimized. At the same time, developments in biotech and
immunotherapy hold the promise of new treatments that are consistent with
the alternative medicine philosophy of improving overall health by working
with the body's natural systems to fight disease.
BioPulse believes that these technological developments can converge
with the public shift toward alternative medicine that has been recognized
by the U.S. Government and major medical associations and institutions.
The Company has focused on cancer, which is the second leading cause of
death in the United States (over 500,000 deaths annually) and costs the
U.S. economy more than $100 billion per year.
RESULTS OF OPERATIONS
The following discussion contains comments about the financial
condition of BioPulse International, Inc. for the Quarter ended October 31,
2000.
BioPulse International, Inc. restarted operations after a merger with
BioPulse Inc. during the fiscal year ended July 31, 1999. Operations
began in January 1999.
As is typical with most new businesses, there is a period of time
before the business is profitable. The market needs to be developed,
employees trained, policies and procedures fine-tuned and the Company needs
to become known and earn a reputation with its potential customers and
clients. During the first half of its last fiscal year, BioPulse was still
going through the startup process.
Since restarting operations, BioPulse has been refining its operations
and developing its market. BioPulse has advertised in periodicals
targeting its potential patients, rented booths at trade shows, developed a
good reputation by its results and by satisfied patients. Its fees started
low and have increased as its market developed and as demand for its
treatments has increased. BioPulse has also been developing new treatments
to offer its patients and expand its market.
During the last half of its last fiscal year, the Company became
profitable. The current quarter is the third profitable quarter in a row.
Revenues for the current quarter are $1,159,680 compared to $228,208 for
the same quarter last year; an increase of 500%. During the quarter,
BioPulse acquired the patent pending rights to Aidan Incorporated's
dendritic cell vaccine technology. This is partly responsible for the
increase in revenues. Revenues from exploiting this technology should be
more dramatic in future quarters as more doctors and patients become aware
of its potential.
Gross profit improved even more dramatically. It increased from
$43,142 in the first quarter last fiscal year to $761,321 during the first
quarter of this fiscal year; an increase of more than 1700%. This is due
to increases in fees and as well as the increase in number of patients
treated. Net profit went form a loss of $234,804 to a profit of $81,518.
3
</Page>
<PAGE>
SIGNIFICANT ELEMENTS OF INCOME OR LOSS THAT DO NOT ARISE
FROM CONTINUING OPERATIONS
There are no significant elements of income or loss that do not arise from
continuing operation during the current fiscal year.
LIQUIDITY
The Company has one note payable to unrelated parties other than
accounts payable of $86,000. Funds were provided to finance the Company
during its development stage primarily by notes payable from related
parties. A substantial block of stock (2,000,000 shares) was sold for
approximately $1,000,000 in notes receivable, of which the Company has
collected approximately $900,000. As of the end of the fiscal year, an
additional $100,000 was remaining in notes receivable.
The proceeds from the stock sale provided liquidity for the Company to
carry the Company through its development period. The Company is currently
generating sufficient cash flow to finance operations.
KNOWN TRENDS
There are no known trends, events or uncertainties that have had or
that are reasonable expected to have a material impact on the net sales or
revenues or income from continuing operations.
MATERIAL COMMITMENTS FOR CAPITAL EXPENDITURES AND CAPITAL RESOURCES
There are no material commitments for capital expenditures. BioPulse
has made all of the capital expenditures necessary to carry on its
business. BioPulse is exploring raising additional equity to finance
expansion at an greater pace than can be financed from current operations.
PART II OTHER INFORMATION
ITEM 1 LEGAL PROCEEDINGS
None
ITEM 2 CHANGES IN SECURITIES
RECENT SALES OF UNREGISTERED SECURITIES.
On August 18, 2000, 60,000 restricted common shares were issued to Rob
Reeder, pursuant to an exemption from registration under section 4(2) of
the Securities Act of 1933, in exchange for medical equipment valued at
approximately $60,000.
4
</Page>
<PAGE>
On August 18, 2000, 6,000 restricted common shares were issued to
Robert Perez, pursuant to an exemption from registration under section 4(2)
of the Securities Act of 1933. $18,000 was received by the Company.
On August 18, 2000, 7,500 restricted common shares were issued to
Perez Makasian Williams, pursuant to an exemption from registration under
section 4(2) of the Securities Act of 1933. $22,500 was received by the
Company.
On August 18, 2000, 2,500 restricted common shares were issued to
Robert Williams, pursuant to an exemption from registration under section
4(2) of the Securities Act of 1933. $7,500 was received by the Company.
On September7, 2000, 9,000 restricted common shares were issued to
Jack O. Scher, pursuant to an exemption from registration under section
4(2) of the Securities Act of 1933. $27,000 was received by the Company.
On September 22, 2000, 25,000 shares of preferred stock issued to Brad
Fey were converted to 50,000 shares of common stock pursuant to an
exemption from registration under section 4(2) of the Securities Act of
1933. No cash was received by the Company.
On October 12, 2000, an option to purchase up to 900,000 restricted
common shares was granted to Loran Swensen, an officer and director of the
Company, pursuant to an exemption from registration under section 4(2) of
the Securities Act of 1933. Said grant provides an option to purchase
68,026 shares at a price of $ 3.23 and 831,974 shares at a price of 2.94
per share for a period of nine years. Half of the shares vested on the
grant date and the remaining half will vest on January 1, 2001.
On October 12, 2000, an option to purchase up to 900,000 restricted
common shares was granted to Jonathan Neville, an officer and director of
the Company, pursuant to an exemption from registration under section 4(2)
of the Securities Act of 1933. Said grant provides an option to purchase
68,026 shares at a price of $ 3.23 and 831,974 shares at a price of 2.94
per share for a period of nine years. Half of the shares vested on the
grant date and the remaining half will vest on January 1, 2001.
On October 12, 2000, an option to purchase up to 250,000 restricted
common shares was granted to Robert Morrow, a director of the Company,
pursuant to an exemption from registration under section 4(2) of the
Securities Act of 1933. Said grant provides an option to purchase the
shares at a price of 2.94 per share for a period of nine years. Half of
the shares vested on the grant date and the remaining half will vest on
January 1, 2001.
On October 12, 2000, an option to purchase up to 550,000 restricted
common shares was granted to Brit McConkie, a director of the Company,
pursuant to an exemption from registration under section 4(2) of the
Securities Act of 1933. Said grant provides an option to purchase the
shares at a price of $ 2.94 per share for a period of nine years.
On October 12, 2000, an option to purchase up to 550,000 restricted
common shares was granted to Stephen Fey, a director of the Company,
pursuant to an exemption from registration under section 4(2) of the
Securities Act of 1933. Said grant provides an option to purchase the
shares at a price of $ 2.94 per share for a period of nine years.
On October 12, 2000, an option to purchase up to 150,000 restricted
common shares was granted to Mike Jones, an officer of the Company,
5
</Page>
<PAGE>
<PAGE>
pursuant to an exemption from registration under section 4(2) of the
Securities Act of 1933. Said grant provides an option to purchase the
shares at a price of $2.94 per share for a period of nine years. One third
or 50,000 shares were vested at the grant date, an additional third will
vest on January 1, 2001, and the remaining third will vest on January 1,
2002.
On October 12, 2000, an option to purchase up to 50,000 restricted
common shares was granted to Jan Morse, an officer of the Company, pursuant
to an exemption from registration under section 4(2) of the Securities Act
of 1933. Said grant provides an option to purchase the shares at a price
of $2.94 per share for a period of nine years. Half of the shares vested on
the grant date and the remaining half will vest on January 1, 2001.
On October 12, 2000, an option to purchase up to 100,000 restricted
common shares was granted to Randall Rayl pursuant to an exemption from
registration under section 4(2) of the Securities Act of 1933. Said grant
provides an option to purchase the shares at a price of $2.94 per share for
a period of nine years. Half of the shares vested on the grant date and the
remaining half will vest on January 1, 2001.
On October 12, 2000, an option to purchase up to 100,000 restricted
common shares was granted to Debbie Oldson pursuant to an exemption from
registration under section 4(2) of the Securities Act of 1933. Said grant
provides an option to purchase the shares at a price of $2.94 per share for
a period of nine years. Half of the shares vested on the grant date and the
remaining half will vest on January 1, 2001.
On October 12, 2000, options to purchase up to 160,500 restricted
common shares were granted to approximately twenty persons, pursuant to an
exemption from registration under section 4(2) of the Securities Act of
1933. Said grants provides an option to purchase shares at a price of
$2.94 per share for a period of nine years.
On November 21, 2000, 353,636 common shares and warrants to purchase
up to an additional 189,318 common shares were issued to Kauser Partners,
LP, pursuant to an exemption from registration under section 4(2) of the
Securities Act of 1933. $1,000,000 was received by the Company. The
warrants can be exercised for a period of five years at a price of $7.50
per share, which exercise price is subject to change according to the terms
of the warrant agreement.
ITEM 3 DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4 SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
None
ITEM 5 OTHER INFORMATION
None
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
Exhibits
27 Financial Statement Data Schedule
10.01 BioPulse International, Inc. 2000 Stock Option Plan
Reports on Form 8-k No reports on Form 8-k were filed during the quarter.
6
</Page>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
Biopulse International, Inc.
Date: December 15, 2000 By: /s/ Jonathan Neville
--------------------
President
Date: December 15, 2000 By: /s/ Jan Morse
-------------
Secretary
7
</Page>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
Biopulse International, Inc.
Date: December 15, 2000 By:
--------------------
President
Date: December 15, 2000 By:
-------------
Secretary
7
</Page>
