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SECURITIES AND EXCHANGE COMMISSION
450 Fifth Street, N.W.
Washington, D. C. 20549
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FORM 10-SB
General Form for Registration of Securities
Pursuant to Section 12(b) or (g) of
The Securities Exchange Act of 1934
ADVANCED BIOTHERAPY CONCEPTS, INC.
(Exact name of registrant as specific in its charter)
Nevada 95-4066865
(State of Incorporation) (I.R.S. Employer
Identification No.)
6355 Topanga Canyon Boulevard
Suite 510
Woodland Hills, California 91367
(Address of executive offices, including zip code)
Registrant's telephone number: (818) 883-3956
Copies to: Conrad C. Lysiak, Esq.
601 West First Avenue
Suite 503
Spokane, Washington 99201
Securities to be registered pursuant to Section 12(b) of the
Act:
NONE
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(Title of Class)
Securities to be registered pursuant to Section 12(g) of the
Act:
COMMON STOCK
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(Title of Class)
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ITEM 1. DESCRIPTION OF BUSINESS.
General
Advanced Biotherapy Concepts, Inc. (the "Company") is a
biotechnology venture whose research efforts are directed at the
development of treatments of diseases related to immune system
deficiencies.
The Company is currently researching and developing a family of
treatments collectively referred to as AGT-1. The Company believes
that AGT-1 will remove, inhibit or neutralize certain interferons
(IFN'S) and cytokines, tumor necrosis factor, HLA class II antigens,
IgE, and other pathological factors and/or their receptors, as well as
neutralizing, removing or inhibiting autoantibodies, including
antibodies to target cells, CD4 and DNA. Interferons and cytokines are
soluble components of the immune system that are largely responsible
for regulating the immune response. When overproduced, as in certain
autoimmune diseases, interferons and cytokines can lead to immune
system disturbance and inflammation.
Prior to marketing AGT-1, the Company must obtain regulatory
approval from the United States Food and Drug Administration ("FDA")
and Environmental Protection Agency ("EPA"). The Company is not
sufficiently funded to allow it to complete the product development
process, obtain FDA approval, and marketing AGT-1. However, the
Company will seek additional financing through the private sale of
restricted securities to investors, enter into joint ventures or
licensing or similar arrangements with large pharmaceutical companies
to provide the funding necessary for additional activities. There can
be no assurance that the Company will enter into any such arrangements,
obtain the appropriate regulatory approvals, or develop, manufacture,
market, or distribute commercially viable products.
To date, the Company's activities have consisted primarily of
research, development and testing. Such activities have resulted in
accumulated losses at December 31, 1998. The Company anticipates that
it will incur substantial losses in the foreseeable future as a result
of its continued research. There are no assurances that the Company
will be successful in completing its research and development, receive
FDA approval, implement manufacturing operations and commercially
market AGT-1.
Business Objective
The specific goal of the Company's business is to successfully
develop, test and obtain FDA approval of its products for AGT-1.
GLOSSARY OF TERMS
Antigen A substance or entity, usually a protein,
that induces the production of antibodies.
The antigenicity of a compound depends on its
structure and molecular weight.
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Auto-immune disease A disease in which auto-immunity is one of
the contributory factors. Such disease
includes Addison's disease and rheumatoid
arthritis.
Cutaneous lesions Skin lesions.
Ig (immunoglobulin) A protein of globulin type (usually
gamma-globulin) that possesses antibody
activity.
Immune response The events that occur in humans and other
vertebrate animals when the body is invaded
by foreign protein. It is characterized by
the production of antibodies and may be
stimulated by an infectious organism or
parasite (bacteria, yeast, fungi, protozoa,
etc.), transplanted material, vaccine, sperm
or even the host's own tissue.
Immunegenecity The study of genetic aspects of the type and
formation of immunoglobulins (antibodies).
Interferon-gamma Glycoprotein induced in different cell sites
and appropriate stimulus.
Lymphocyte A white cell arising from tissue of the
lymphoid systems. There are two types of
lymphocytes: B cells and T cells. These
cells are capable of being stimulated by an
antigen to produce a specific antibody to
that antigen and to proliferate to produce a
population of such antibody-producing cells.
Lymphokine Any of a number of soluble physiologically
active factors produced by T lymphocytes in
response to specific antigens. Important in
cell mediated immunity, lymphokins include
interferon, macrophage arming factor,
lymphocyte inhibition factor, macrophage
inhibition factor, chemotactic factor and
various cytotoxic factors.
Macrophage A motile white cell type found in vertebrate
tissue, including connective tissue, the
spleen, lymph nodes, liver, adrenal glands
and pituitary, as well as, in the endothelial
lining of blood vessels and the sinusoids of
bone marrow, and in the monocytes. They
display phagocytic activity and process
antigens for presentation to lymphocytes,
which then prepare antigen-specific
antibodies.
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Pathogenic Descriptive of a substance or organism that
produces a disease.
Placebo An indifferent substance in the form of a
medicine given for the suggestive effect.
Polyclonal antibody An antibody produced in the normal immune
response to an antigen consisting of a number
of closely related, but not identical,
proteins. The variation in Polyclonal
antibodies reflects the facts that they are
formed by a number of different lymphocytes,
in contrast to monoclonal antibodies which
are formed by a clone of identical cells.
Compare monoclonal antibody.
T-Cell A type of lymphocyte that matures in the
thymus gland. These cells are responsible
for the cellular immunity processes, such as
direct cell binding to an antigen, thus
destroying it. T lymphocytes also act as
regulators of the immune response as helper T
cells, or suppressor T cells.
TECHNICAL BACKGROUND
The following is a summary of certain theories related to the
Company's product development activities which are recognized in the
scientific community.
Scientific Rationale and Proposed Product Development.
The Company's main technology platform involves the use of
antibodies. An antibody is a protein that is secreted by cells in the
blood and is part of the body's natural defense system against foreign
invaders such as viruses or bacteria. Antibodies seek out and
selectively bind to their targets, triggering such effects as
neutralizing toxins and marshaling the immune system against infectious
microorganisms and cancer cells. The Company's antibody treatment,
AGT-l, removes or neutralizes certain interferons and cytokines alpha
interferon, gamma interferon and tumor necrosis factor. These are
soluble components of the immune system that are largely responsible
for regulating the immune response and inflammation. During certain
autoimmune diseases(AD's), such as rheumatoid arthritis, these
cytokines are overproduced by the human body, disturbing the immune
system and leading to disease.
In particular, IFN-a or IFN-y is known to trigger or exacerbate
AD's in animals prone to AD, and in patients who have had underlying
autoimmune conditions or a predisposition to them. In animal models of
a number of human AD's, the administration of antibodies to IFN-a or
IFN-y halted or delayed these diseases. This includes antibodies to
IFN-y given to:
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1. Zealand Black and White mice known to develop a severe AD similar
to SLE in humans.
2. Lewis rats afflicted with actively induced experimental AD of
the peripheral nervous system.
3. NOD mice, an animal model of human type I diabetes
4. BB/Wor rats, a diabetes-prone strain, and CBA/J mice, a strain
susceptible to experimental autoimmune thyroiditis (EAT) In all
cases, the anti-IFN-y antibodies suppressed or reduced the
disease.
The Company also pursuing a collaborative relationship with the
biotechnology companies for the development of fully human antibodies.
The importance of this development is that it will allow the Company to
repeatedly treat patients over a longer period of time, the objective
of which is to commercialize its treatmentization. Until now, clinical
trials have been conducted with polyclonal antibodies which are derived
from animal protein. These can be given to patients for only a few days
in succession.
The Company's goal is to produce a series of humanized antibodies,
a commercializable product. Fully humanized antibodies are produced by
genetic engineering and will result in a product which can be
administered to patients on a much longer term basis. The Company has
identified several biotechnology companies that may manufacture such
antibodies for the Company. The availability of this technology makes
it possible to produce safer and more standardized antibodies for large
scale production. Development of these antibodies is estimated to take
up to one year.
Human Immunodeficiency
The immune system has two principal responses in the fight against
infectious attacks. The first is the production of antibodies, protein
molecules which latch onto and neutralize foreign invaders such as
bacteria and viruses. Antibodies are believed to coat microbes in a
way that make them palatable to macrophage, scavenger cells which
destroy the invading cells. Each type of antibody acts on only a very
specific target molecule, known as an antigen. Thus, antibodies
designed to attack one type of infection are often ineffective against
others.
While antibodies are effective tools in the immunological system,
they cannot provide full protection against infectious attack. Some
diseases, such as tuberculosis, enter host cells before the antibodies
have an opportunity to attack. The Company has theorized that in order
to combat these invasions, the body also produces lymphocytes that
originate in the thymus, known as the T-cells. The Company has further
hypothesized that T cells recognize protein fragments on the surface of
infected cells, including viruses and mutated molecules in cancer
cells. The T-cells are believed to attack the infected cells and
inhibit the spread of the foreign invader. T-cells also appear to act
in concert with antibodies to lead the immunologic assault against
infection and disease by stimulating antibodies into an active state
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and secreting lymphokines, molecules that promote antibody formation.
The Company has accepted the foregoing hypothesis in developing its
products, however, the foregoing has not been established by any
scientific evidence and there is no assurance that the same will be
established in the future.
T-cells themselves are comprised of many populations two of which
are: CD4 (or helper) T-cells and CD8 (or killer) T-cells. Activated
CD4 T-cells produce large amounts of lymphokines to accelerate the
division of other T-cells and to promote inflammation. Activated CD8
T-cells develop the capacity to punch holes in target cells and secrete
chemicals that kill infected cells.
Research
Research efforts will continue on the Complex Carbohydrate and
Micro-organism Substances to establish efficacy, and identify the
processes involved in carbohydrate based cellular interactions and
immune system modulation and stimulation. The Company intends to
conduct research at a leased facility. As of the date hereof, the
Company has not leased any facility and there is no assurance that any
facility will be leased in the future. Additional research needs
include experiments to complete the structural identification of the
Company's products. This research is important for intellectual
property protection, required for FDA approval and to gain a better
understanding of the responses triggered by the substances.
The Company is presently conducting research in Russia.
The Company intends to continue research in select areas. In
doing so, it will be able to consult with experts in particular fields
who have state of the art facilities and trained personnel. All such
research will be conducted under strict confidentiality agreements
which prohibit use and disclosure of the Company's products and
prohibit publication of findings without the consent of the Company.
Manufacturing
The Company intends to retain exclusive responsibility for product
manufacturing in order to protect the integrity of AGT-1 and to
generate additional revenue. The Company has identified several
contract manufacturers as having suitable facilities for manufacturing
large quantities of AGT-1.
The raw materials are used as base components in a number of drug
products and are commercially available nationally and internationally.
Further, the raw materials used to manufacture AGT-1 are inexpensive
and commercially available in abundant supply, both nationally and
internationally.
The Company has not entered into any manufacturing agreement for
AGT-1 and there is no assurance that any agreements will be entered
into in the future. The contract manufacturers schedule time in their
plant upon notice from the Company of needed production.
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Government Regulation
The Company's activities are subject to extensive federal, state,
county and local laws and regulations controlling the development,
testing, manufacture and distribution of medical treatments. Most of
the Company's products will be subject to regulation as therapeutics by
the United States Food and Drug Administration ("FDA"), as well as
varying degrees of regulation by a number of foreign governmental
agencies. To comply with the FDA regulations regarding the manufacture
and marketing of the Company's products, the Company may incur
substantial costs relating to laboratory and clinical testing of new
products and for the preparation and filing of documents in the formats
required by the FDA. There are no assurances that the Company will
receive FDA approval necessary to commercially market its products and
that if the Company is successful it will encounter delays in bringing
its new products to market as a result of being required by the FDA to
conduct and document additional investigations of product safety and
effectiveness.
Federal Drug Administration Regulation
The FDA approved process consists of four steps that all new
drugs, antibiotics and biologicals must follow, they are:
1. investigational new drug application (IND)
2. clinical trials
3. new drug application (review and approval)
4. post-marketing surveys
On January 11, 1993, the FDA approved new procedures to accelerate
the approval of certain new drugs and biological products directed at
serious or life-threatening illnesses. These new procedures will
expedite the approvals for patients suffering from terminal illness
when the drugs provide a therapeutic advantage over existing treatment.
The Company believes that its products will fall under the FDA
guidelines for accelerated approval for drugs and biological products
directed at serious and life threatening disease because the Company's
products are targeted as potential treatments for rheumatism and are
non-toxic.
The Company believes that the first step in the approval process,
IND approval, will take approximately 48 months. The Company will
provide the FDA with the results of laboratory and animal research and
a comprehensive clinical trial program for AGT-1. The Company
anticipates filing its IND for all of its products within the next 24
months.
Upon successful completion of the IND phase, the Company will be
permitted to commence large scale clinical trials with its substances.
Clinical trials are conducted in three phases, normally involving
progressively larger numbers of patients. The Company, in conjunction
with its FDA consultant, will select key physicians and hospitals to
actively conduct these studies. Phase I clinical trials will be
concerned primarily with learning more about the safety of the drug,
though they may also provide some information about the safety of the
drug, though they may also provide some information about
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effectiveness. Phase I testing is normally performed on healthy
volunteers although for drugs directed at HIV/AIDS and cancer, testing
on infected people is permitted. The test subjects are paid to submit
to a variety of tests to learn what happens to a drug in the human
body; how it is absorbed, metabolized and excreted, what effect it has
on various organs and tissues; and what side effects occur as the
dosages are increased. The principal objective is to determine the
drugs' toxicity. Phase I trials generally involve 20-40 people at an
estimated cost of $10,000 per patient, taking six months to one year to
complete.
Assuming the results of Phase I testing present no toxic or
unacceptable safety problems, Phase II trials may begin. In many cases
Phase II trials may commence before all the Phase I trials are
completely evaluated if the disease is life threatening and preliminary
toxicity data in Phase I shows no toxic side effects. In life
threatening disease, Phase I and Phase II trials are sometimes combined
to show initial toxicity and efficacy in a shorter period of time. The
primary objective of this stage of clinical testing is designed to show
whether the drug is effective in treating the disease or condition for
which it is intended. Phase II studies may take several months or
longer and involve a few hundred patients in randomized controlled
trials that also attempt to disclose short-term side effects and risks
in people whose health is impaired. A number of patients with the
disease or illness will receive the treatment while a control group
will receive a placebo. The cost per patient is estimated at $10,000.
At the conclusion of Phase II trials, the FDA and the Company will
have a clear understanding of the short-term safety and effectiveness
of the drugs and their optimal dosage levels. Phase III clinical
trials will generally begin after the results of Phase II are
evaluated. The objective of Phase III is to develop information that
will allow the drug to be marketed and used safely. Phase III trials
will involve hundreds, and sometimes thousands, of people with the
objective of expanding on the research carried out in ?
Phase II. An objective would be to discover optimum dose rates
and schedules, less common or even rare side effects, adverse
reactions, and generate information that will be incorporated into the
drugs' professional labeling, as well as, the FDA-approved guidelines
to physicians and others about how to properly use the drug.
Patient estimates for each phase of the clinical trial process are
as follows:
Application Phase I Phase II Phase III
AGT-1 20 200 1,000
The third step that is necessary prior to marketing a new drug is
the New Drug Application (NDA) submission and approval. In this step,
all the information generated by the clinical trials will be received
and if successful, the drug will be approved for marketing.
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The final step is the random surveillance or surveys of patients
being treated with the drug to determine its long-term effects. This
has no effect on the marketing of the drug unless highly toxic
conditions arise. The time required to complete the above procedures
averages seven years, however, there is no assurance that the Company
will ever receive FDA approval of any of its products.
The Company conducted its first Phase I FDA approved clinical
trial on AIDS patients at Georgetown University between 1986 and 1987.
Subsequent Phase I FDA approved trials were conducted on AIDS patients
at the University of Nebraska during 1993. Since that time, the Company
redirected its research and development strategy and took advantage of
its scientific relationships in Russia for the conduct of clinical
trials on patients who suffer from severe rheumatoid arthritis,
multiple sclerosis and systemic lupus erythematosus.
The Company's clinical trials are at a relatively early stage and
the Company has not received approval from the FDA or any other
governmental agency for the manufacturing or marketing of any products
under development. Consequently, the commencement of manufacturing and
marketing of any products in the United states is, in all likelihood,
a number of years away. The FDA may also require post-marketing testing
and surveillance to monitor the effects of approved products or place
conditions on any approvals that could restrict the commercial
applications of such products. Product approvals may be withdrawn if
compliance with regulatory standards is not maintained or if problems
occur following initial marketing. With respect to patented products or
technologies, delays imposed by the governmental approval process may
materially reduce the period during which the Company will have the
exclusive right to exploit them.
Russian Studies
In collaboration with the Institute of Rheumatology of the Academy
of Medical Sciences of the Russian Federation in Moscow under a joint
clinical agreement dated July 1995, the Company has now completed
clinical trials on 25 adult patients suffering from rheumatoid
arthritis and several patients with other autoimmune diseases,
including systemic lupus erythematosus. The results demonstrated a
striking improvement in patients receiving this therapy. The patients
were selected from among those with the most severe symptoms of active
rheumatoid arthritis who had not responded to conventional therapy.
They were randomized into four study groups, three receiving individual
or combined antibody preparations, and the fourth, a combination of all
three antibodies. Each patient received daily injections of AGT-1 for
five consecutive days. A decrease in joint pain and swelling was
observed in some patients as early as the first day of treatment. By
the end of the first week, all groups not only demonstrated significant
improvement in clinical symptoms, including decrease in joint pain,
swelling and stiffness, but also showed reduction of disease severity
based on certain laboratory measures.
In addition to these studies, the Company provided its therapy
AGT-1 to the Research Institute for Pediatric Hematology, Ministry of
Health, Moscow, on a "compassionate needs" basis to treat several
children suffering from severe juvenile rheumatoid arthritis. As an
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example, one female child suffered from fever, severe pain in her
wrists and knees, and disabling restriction of her hip joint, despite
the use of traditional drugs and increased use of non-steroidals.
Laboratory and x-ray data indicated evidence of inflammation in the
affected joints. All previous therapy had been ineffective. Following
five days of treatment with AGT-1, significant clinical improvement
occurred with normalization of temperature, decrease of morning
stiffness, reduction of hip pain, significant increase in the range of
motion in the affected joints, improvement in grip strength, and an
overall increase in physical activity and quality of life. More
significantly, x-rays clearly showed improvement of the affected
joints. Other indices also normalized in subsequent tests. For a period
of six months following initial treatment, the patient continued to
show a lack of disease activity and has regained full mobility.
Clinical trials were also completed on 22 patients suffering from
multiple sclerosis, in collaboration with the Department of
Neurosurgery, Russian State Medical University Hospital, Academy of
Medical Sciences in Moscow. The Company's therapy was administered for
five days with a three month follow-up, a period during which
exacerbation or recurrence of the disease is normal. Antibodies to two
cytokines brought about stabilization of the condition, and in several
cases an improvement in neurological deficiencies. These results
confirm our general approach to the treatment of autoimmune diseases.
Future Human Testing in Russia
The Company has contracted with the Russian State Medical
University Hospital, Academy of Medical Sciences in Moscow, to conduct
expanded double-blind trials on 65 patients with progressive multiple
sclerosis, based on the clinical data from the initial studies, which
indicated safety and efficacy. These studies will be conducted under
the direction of Professor Eugene Gusev, M.D., Head of Neurology,
Department of Neurosurgery, and President of the All-Russian Society of
Neurologists. The Company is also negotiating for the commencement of
double-blind studies with the Rheumatology Clinic of the Institute of
Rheumatology of the Academy of Medical Sciences of the Russian
Federation in Moscow. These studies will be conducted under the
direction of Professor Jakov Sigidin, M.D. Studies will be conducted on
patients with rheumatoid arthritis and systemic lupus erythematosus,
again based on the previous studies which indicated safety and
efficacy.
These future studies will provide further validation and evidence
regarding the Company's scientific approach to the treatment of
autoimmune diseases.
In addition, the Company has signed an agreement with the Serbsky
National Research Center for General & Forensic Psychiatry for the
conduct of clinical trials in the treatment of certain autoimmune
psychiatric diseases. These trials will be conducted under the
direction of Yuri A. Alexadrovsky, M.D., Professor of Psychiatry. The
trials, using AGT-1, have been approved by the Ministry of Health of
the Russian Federation.
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Competition
The Company will encounter significant competition from firms
currently engaged in the biotechnology industries. The majority of
these companies will be substantially larger than the Company, and have
substantially greater resources and operating histories. The Company
is aware of other competitors seeking cures for autoimmune diseases
such as HIV, however, the Company is not aware of any competitors
seeking to produce the same products as the Company.
Product Liability Exposure
Because many of the Company's products may be used on human
patients, the Company may be exposed to product liability claims.
There can be no assurance that available amounts of coverage will be
sufficient to adequately protect the Company in the event of a
successful product liability claim.
Patent Status and Protection of Proprietary Technology
The Company has been issued patent No.'s 4,824,432, 5,626,843 and
5,888,511. It also has a U.S. patent pending filed on December 23,
1996, application number 08/771,831 and Patent Cooperation Treaty (PCT)
application filed.
The Company's most recent patent gives the company patent
protection for a new anti-cytokine approach to treating different
autoimmune diseases. These include rheumatoid arthritis, multiple
sclerosis, systemic lupus erythematosus and insulin-dependent diabetes.
The patented treatment uses various methods to neutralize or block
specific combinations of cytokines and their receptors. In management's
opinion, the Company's patented approach is broader in scope than
certain other patented treatments.
Dependence Upon Key Personnel
The Company relies greatly in its efforts on the services and
expertise of its officers and directors. The operation and future
success of the Company would be adversely affected in the event that
any of them is incapacitated or the Company otherwise loses his
services.
Uncertainties Associated with Research and Development Activities
The Company intends to continue its research and development
activities on its product and for the purpose of developing proprietary
products. Research and development activities, by their nature,
preclude definitive statements as to the time required and costs
involved in reaching certain objectives. If research and development
requires more funding than anticipated, the Company may have to reduce
product development efforts or seek additional financing. There can be
no assurance that the Company would be able to secure any necessary
additional financing or that such financing would be available on
favorable terms.
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Year 2000 Readiness Disclosure
The Company is currently reviewing its operations to ensure that
they will not be adversely affected by year 2000 software failures,
which can arise in time-sensitive software applications that utilize a
field of two digits to define the applicable year. In such
applications, a date using "00" may be recognized as the year 1900
rather than the year 2000.
The Company's internal systems include both its information
technology ("IT") and non-IT systems. The Company has initiated an
assessment of its material internal IT systems and its non-IT systems
including security systems, building equipment and utilities. The
Company expects to complete this assessment in the first half of 1999.
To the extent that the Company is not able to test the technology
provided by third-party vendors, the Company is seeking assurances from
such vendors that their systems are Year 2000 ready. Although the
assessment is still underway, management currently believes that all
material systems which the Company uses will be Year 2000 ready when
necessary and that the cost to ensure that those systems are Year 2000
ready will not be material. It should be noted, however, that the
Company depends on timely and uninterrupted interactions with its
vendors and its customers, through the use of banking systems,
commercial airline, travel, telecommunications via long-distance and
local service providers, and local utilities, including for power. To
the extent that Year 2000 ready alternatives are not readily available
at the time, any interruption caused by a lack of Year 2000 readiness
of the part of such vendors could have a material adverse effect on the
Company's business, operating results and financial condition.
Despite testing by the Company, the IT and non-IT systems used by
the Company may contain undetected errors or defects associated with
Year 2000 date functions. Known or unknown errors or defects in the
Company's IT systems or non-IT systems could result in delay or loss of
revenue, diversion of resources, damage to the Company's reputation,
and increased service costs, any of which could materially adversely
affect the Company's business, operating results, or financial
condition.
The Company believes that the most likely worst case scenario
related to Year 2000 risks is a material business interruption that
leads to customer dissatisfaction and the termination of a customer
relationship. Such an interruption could occur due to a breakdown in
any number of the Company's IT or non-IT systems, or the systems of
third parties. The Company currently does not have a contingency plan
in the event a particular system or vendor is not Year 2000 ready.
Such a plan will be developed if it becomes clear that the Company is
not going to achieve its scheduled objectives in respect of Year 2000
readiness. There can be no assurance that unexpected Year 2000
readiness problems of the Company or its vendors, customers and service
providers will not materially adversely affect the Company's business,
operating results and financial condition. The foregoing assessment
represents management's best estimates at the present time, which could
change significantly in the future.
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Marketing
Assuming the Company is able to obtain FDA approval of its
products, it intends to market the same through collaborative
relationships with other companies. Joint Venture partners will be
selected on the basis of experience and the degree of financial success
they exhibit in the industry. There are no assurances that the Company
will obtain FDA approval for AGT-1 and there are no assurances that the
Company will be successful in entering into agreements with established
multinational companies.
Company's Office
The Company's administrative offices are located at 6355 Topanga
Canyon Boulevard, Suite 510, Woodland Hills, California 91367 and its
telephone number is (818) 883-3956. The Company leases 500 square feet
of space. The annual base rental is $-0- and the term of the lease is
three years. The Company leases the foregoing office space from
Buccellato & Finkelstein, Inc. The Company also subleases
approximately 3,500 square feet of research and development space at
9110 Red Branch Road, Columbia, Maryland 21045 from New Horizons
Diagnostics Inc. The annual base rental is $-0- and the term of the
lease is three years.
Employees
The Company is a development stage company and currently has three
employees other than its Officers and Directors. See "Management."
Management of the Company expects to hire employees as necessary.
RISK FACTORS
1. Company with No History of Earnings. The Company has no
operating history and is subject to all risks inherent in a developing
business enterprise. The likelihood of success of the Company must be
considered in light of the problems, expenses, difficulties,
complications and delays frequently encountered in connection with a
new business in general and those specific to the food service industry
and the competitive and regulatory environment in which the Company
will operate.
2. Development and Market Acceptance of Products. The Company's
success and growth will depend upon the Company's ability to market its
existing products. The Company's success will depend in part upon the
market's acceptance of, and the Company's ability to deliver and
support its products.
3. Liquidity; Need for Additional Financing. The Company
believes that it has the cash it needs for at least the next twelve
months based upon its internally prepared budget. The Company's cash
requirements, however, are not easily predictable and there is a
possibility that its budget estimates will prove to be inaccurate. If
the Company is unable to generate a positive cash flow before its cash
is depleted, it will be required to curtail operations substantially,
seek additional capital. There is no assurance that the Company will
be able to obtain additional capital if required, or if capital is
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available, to obtain it on terms favorable to the Company. The Company
may suffer from a lack of liquidity in the future which could impair
its short-term marketing and sales efforts and adversely affect its
results of operations.
4. Competition. Most of the Company's competitors have
substantially greater financial, technical and marketing resources than
the Company. In addition, the Company's products compete indirectly
with numerous other products. As the market for the Company's products
expand, the Company expects that additional competition will emerge and
that existing competitors may commit more resources to those markets.
5. Lack of Regulatory Clearance/Approval and Limited Clinical
Data. The Company's product has not been cleared for marketing by the
FDA or foreign regulatory authorities and can not be commercially
distributed in the U.S. and some international markets unless and until
such clearance is obtained. Failure to obtain FDA clearance would delay
sales of the AGT--I(TM) product and would materially affect the
financial condition of the Company.
6. Additional clinical data is required for marketing approval of
the AGT-1, product. Data from future studies could reveal consumer
attitudes toward the AGT-1 product which are at present unknown to the
Company, and which if negative, could have a material effect on the
market acceptance of the AGT-1 product.
7. Dependence on the Product. The Company expects to derive a
substantial majority of its revenues from AGT-1, product licensing and
royalty fees. The life cycle of the AGT-I(TM) product is difficult to
estimate in terms of current and future technological developments,
competition, and other factors. Failure of the Company to successfully
commercialize the AGT-1, product or to realize significant revenues
from the product would have a material adverse effect on the financial
condition of the Company. As of the date hereof the Company has not
realized any revenues from the sale of AGT-1.
8. Uncertainty of Market Acceptance. There can be no assurance
that the AGT-1, product will gain any significant degree of market
acceptance among practitioners and health care providers, health care
payers, or patients even if necessary regulatory approval is obtained.
Patient acceptance of the AGT-1, will depend on many factors, including
the cost and benefits compared to competing products, lifestyle
implications, available reimbursement, and other considerations.
9. Lack of Marketing and Sales Experience. The Company has not
yet sold any products. After the necessary regulatory approvals are
obtained, the Company intends to market and sell the AGT-1, product
through a network of qualified independent distributors, agents, and
key strategic partners, none of which are currently in place. There are
no assurances that the Company can establish the necessary
relationships for marketing and selling the AGT-1, product or that the
network will successfully implement an effective marketing and sales
strategy.
<PAGE> 15
10. Manufacturing. The Company lacks the facilities to
manufacture its product and does not have an adequate supply of product
to begin clinical studies. If the Company is unable to contract for
manufacturing capabilities on acceptable terms, it would result in the
delay of sales which in turn could materially impair the Company's
competitive position and the possibility of the Company achieving
profitability.
11. Uncertainty Relating to Favorable Third-Party Reimbursement.
In the U.S., success in obtaining favorable third-party payment for a
new product depends greatly on the ability to present data which
demonstrates positive outcomes and reduced utilization of other
products or services as well as cost data which shows that treatment
costs using the new product are equal to or less than what is currently
covered for other products. Failure by the Company to present such
clinical data would adversely affect the Company's ability to obtain
favorable third party reimbursement as well as the commercial success
of the AGT-1 product.
12. Patents and Proprietary Rights. The Company's success and
ability to compete effectively will depend in part on the strength of
its patents and the ability to obtain protection for its products in
foreign markets. No assurance can be given that any patents issued to
the Company will not be challenged, invalidated, or circumvented.
Litigation, which could result in substantial cost to the Company, may
also be necessary to enforce any patents issued to the Company and/or
determine the scope and validity of other's proprietary rights
13. Reliance Upon Directors and Officers. The Company is wholly
dependent, at the present, upon the personal efforts and abilities of
its Officer and Directors, who exercise control over the day to day
affairs of the Company.
14. Issuance of Additional Shares. 21,154,335 shares of Common
Stock or 42.3% of the 50,000,000 authorized shares of Common Stock of
the Company are unissued. The Board of Directors has the power to
issue such shares, subject to shareholder approval, in some instances.
Although the Company presently has no commitments, contracts or
intentions to issue any additional shares to other persons, other than
in the exercise of options and warrants, the Company may in the future
attempt to issue shares to acquire products, equipment or properties,
or for other corporate purposes. Any additional issuance by the
Company, from its authorized but unissued shares, would have the effect
of diluting the interest of existing shareholders.
15. Indemnification of Officers and Directors for Securities
Liabilities. The Company's Articles of Incorporation provide that the
Company will indemnify any Director, Officer, agent and/or employee as
to those liabilities and on those terms and conditions as are specified
in The Company Act of the State of Nevada. Further, the Company may
purchase and maintain insurance on behalf of any such persons whether
or not the corporation would have the power to indemnify such person
against the liability insured against. The foregoing could result in
substantial expenditures by the Company and prevent any recovery from
such Officers, Directors, agents and employees for losses incurred by
<PAGE> 16
the Company as a result of their actions. Further, the Company has
been advised that in the opinion of the Securities and Exchange
Commission, indemnification is against public policy as expressed in
the Securities Act of 1933, as amended, and is, therefore,
unenforceable.
16. Cumulative Voting, Preemptive Rights and Control. There are
no preemptive rights in connection with the Company's Common Stock.
Shareholders may be further diluted in their percentage ownership of
the Company in the event additional shares are issued by the Company in
the future. Cumulative voting in the election of Directors is not
provided for. Accordingly, the holders of a majority of the shares of
Common Stock, present in person or by proxy, will be able to elect all
of the Company's Board of Directors.
17. No Dividends Anticipated. At the present time the Company
does not anticipate paying dividends, cash or otherwise, on its Common
Stock in the foreseeable future. Future dividends will depend on
earnings, if any, of the Company, its financial requirements and other
factors.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
The Company has inadequate cash to maintain operations during the
next twelve months. In order to meet its cash requirements the Company
will have to raise additional capital through the sale of securities or
loans. As of the date hereof, the Company has not made sales of
additional securities and there is no assurance that it will be able to
raise additional capital through the sale of securities in the future.
Further, the Company has not initiated any negotiations for loans to
the Company and there is no assurance that the Company will be able to
raise additional capital in the future through loans. In the event
that the Company is unable to raise additional capital, it may have to
suspend or cease operations.
The Company's research and development goal is to produce a series
of fully human antibodies that are produced by genetic engineering and
will result in a product which can be administered to patients on a
long term basis. The Company has identified several biotechnology
companies that can manufacture such antibodies for the Company. The
availability of this technology will make it possible to produce safer
and more standardized antibodies for commencement of human clinical
trials, under FDA guidelines, in the United States.
The Company has no expected purchases or sales of significant
equipment.
There are no expected significant changes in the number of
employees of the company.
Results of Operations - From Inception through December 31, 1998.
The Company is considered to be in the development stage as
defined in Statement of Financial Accounting Standards No. 7. There
have been no operations since incorporation.
<PAGE> 17
Liquidity and Capital Resources.
The Company issued 27,141,075 shares of its Common Stock to
officers, directors and others. The Company has no operating history
and no material assets. The Company has $1,182 in cash as of December
31, 1998.
ITEM 3. DESCRIPTION OF PROPERTIES.
The Company's administrative offices are located at 6355 Topanga
Canyon Boulevard., Suite 510, Woodland Hills, California 91367 and its
telephone number is (818) 883-3956. The Company leases 500 square feet
of space. The annual base rental is $-0- and the term of the lease is
three years. The Company leases the foregoing office space from
Buccellato & Finkelstein, Inc. The Company also subleases approximately
3,500 square feet of research and development space at 9110 Red Branch
Road, Columbia, Maryland 21045 from New Horizons Diagnostics, Inc. The
annual base rental is $-0- and the term of the lease is three years.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth the Common Stock ownership of each
person known by the Company to be the beneficial owner of five percent
(5%) or more of the Company's Common Stock, each director individually
and all officers and directors of the Company as a group. Each person
has sole voting and investment power with respect to the shares of
Common Stock shown, unless otherwise noted, and all ownership is of
record and beneficial.
Name and Number of Percentage
address of owner Shares Position of Shares
Simon V. Skurkovich 1,193,770[1] Chairman of 4.14%
802 Rollins Avenue the Board of
Rockville, MD 20852 Directors and CEO
Edmond Buccellato 126,000[2] President and 0.44%
6716 Faust Ave. Director
West Hills, CA 91307
Boris V. Skurkovich 575,020[3] Director 1.99%
18 Blaisdell Ave.
Pawtucket, RI 01860
Joseph Bellanti 150,000[4] Director 0.52%
607 Corewood Lane
Bethesda, MD 20816
Larry Loomis 325,000[5] Director 1.13%
9110 Red Branch Rd.
Columbia, MD 21045
<PAGE> 18
Leonard Millstein 465,100[6] Director 1.61%
1677 Calle Alta
La Jolla, CA 92037
Richard Eamer -0- Director 0.00%
2400 Broadway Ave.
Suite 500
Santa Monica, CA 90404
Jeanne Kelley 150,000[7] Secretary/ 0.52%
4515 Willard Ave. Treasurer
Chevy Chase, MD 20815
All officers and 2,984,890 10.35%
directors as a
group (8 persons)
[1] Does not include options to purchase up to 300,000 shares of
common stock at an exercise price of $0.10 per share.
[2] Shares held in the name of the Buccellato Family Trust. Does not
include options to purchase up to 50,000 shares of common stock at
an exercise price of $0.10 per share and options to purchase up to
50,000 shares of common stock at an exercise price of $0.20 per
share.
[3] Does not include options to purchase up to 100,000 shares of
common stock at an exercise price of $0.01 per share; options to
purchase up to 150,000 shares of common stock at an exercise price
of $0.02 per share; and, 50,000 shares of common stock at an
exercise price of $0.10 per share.
[4] Does not include options to purchase up to 100,000 shares of
common stock at an exercise price of $0.20 per share and options
to purchase up to 350,000 shares of common stock at an exercise
price of $0.01 per share. All of the foregoing options have been
assigned to I Care Foundation.
[5] Does not include options to purchase up to 75,000 shares of common
stock at an exercise price of $0.20 per share and options to
purchase up to 10,000 shares of common stock at an exercise price
of $0.10 per share.
[6] Does not include options to purchase up to 125,000 shares of
common stock at an exercise price of $0.20 per share.
[7] Does not include options to purchase up to 150,000 shares of
common stock at an exercise price of $0.01 per share and options
to purchase up to 100,000 shares of common stock at an exercise
price of $0.10 per share and options to purchase up to 50,000
shares of common stock at an exercise price of $0.20 per share.
<PAGE> 19
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
The officers and directors of the Company are as follows:
Name Age Position
Simon Skurkovich, M.D. 76 Chairman of the Board of Directors
Edmond Buccellato 54 President and member of the Board
of Directors
Boris Skurkovich, M.D. 44 Vice President and a member of the
Board of Directors
Joseph Bellanti, M.D. 42 Vice President and a member of the
Board of Directors
Lawrence Loomis 51 Member of the Board of Directors
Leonard Millstein 47 Member of the Board of Directors
Richard Eamer 75 Member of the Board of Directors
Jeanne Kelly, Ph.D. 43 Secretary/Treasurer
Each director serves for a term of three years and one-third of
the directors are elected at the annual meeting of shareholders. The
Company's officers are appointed by the Board of Directors and hold
office at the discretion of the Board.
Simon Skurkovich, M.D. - Serves as Chairman of the Board. He has
obtained five patents in Russia, and eight in the U.S. He is the
creator of immune preparations from human blood against antibiotic
resistant bacteria which saved thousands of lives in the Soviet Union
and eastern Europe. In Russia, he was professor and Chief of the
Immunology Laboratory of the Institute of Hematology and Blood
Transfusion and was awarded gold and silver medals for his scientific
discoveries. His laboratory was also awarded the nation's highest
honor, the Lenin Prize, for his patented work. Dr. Skurkovich received
an M.D., Ph.D. and a Doctorate in Medical Sciences (D.Sc.) from Pirogov
State Medical Institute in Moscow. He has written more than 200
articles for scientific publications.
Edmond Buccellato - Serves as President and a member of the Board
of Directors. He was co-founder, member of the Board of Directors and
Vice President of Finance of Phase Medical, Inc., an infusion therapy
company sold to Becton Dickinson in 1994. He was also co-founder,
member of the Board of Directors and Vice President of Finance of
Synergistic Systems, Inc., a company which became the largest medical
billing company in the western United States. He is also co-founder and
member of the Board of Directors of Polymer Safety, LLC, a manufacturer
of synthetic medical and industrial examination gloves. Mr. Buccellato
received his undergraduate degree From California State University at
San Diego, and his graduate degree from the University of Southern
California.
<PAGE> 20
Boris Skurkovich, M.D. - Serves as Vice President and member of
the Board of Directors. He completed a clinical and research fellowship
at the Maxwell Finland Laboratory for Infectious Diseases, Boston City
Hospital, Boston, Massachusetts and presently is a professor at Brown
University Medical School. He has collaborated with his father on the
development of the Company's treatments of autoimmune diseases. Dr.
Skurkovich received his M.D. from the Moscow State Medical Institute.
Joseph A. Bellanti, M.D. - Serves as Vice President and member of
the Board of Directors. He is Director of the International Center for
Interdisciplinary Studies of Immunology and a professor of Pediatrics
and Microbiology at Georgetown University Medical School. He has
authored or co-authored over 400 scientific articles and abstracts and
25 books and/or chapters in books in the fields of immunology and
virology. His textbook, "Immunology", now in its third edition, is used
in many medical school classrooms throughout the country. Dr. Bellanti
received his B.S. and M.D. degrees from the University of Buffalo,
Buffalo, New York.
Leonard Millstein - Serves as a member of the Board of Directors.
Mr. Millstein received his MSCE and Ph.D. in Civil Engineering from
Moscow State Construction University in 1964 and 1974, respectively.
After immigrating to the United States in 1978 he held teaching
positions at Howard University in Washington D.C. and Johns Hopkins
University in Baltimore, Maryland. He has over 200 publications and is
a member of the American Concrete Institute and American Society of
Civil Engineers. From 1981 to the present, he has been a CEO of Radcon
Products, a company involved in manufacturing of proprietary concrete
sealants. From 1990 until the present, he has been a Chairman of the
Board of TTLTIC, a private consulting company.
Richard Eamer - Serves as a member of the Board of Directors.
Prior to joining the Company, Mr. Eamer was the founder, Chairman of
the Board and Chief Executive Officer of National Medical Enterprises
(NME), a company with over $5 billion in revenues. MNE was sold to
Tenet Healthcare Corporation (NYSE symbol THC) which presently has a
market capitalization of over 11 billion dollars. He is also the
founder to two newly established closely held companies, one in
veterinary care ant the other in industrial otology. Mr. Eamer is a
former Director and Chairman of the Board of Hillhaven Corporation, the
nation's second largest operator or long term care facilities. He was
also a Director of Unocal Corporation and is currently a Director of
Imperial Bank. He is a member of the Conference Board and as associate
at the University of Southern California, a member of the Board of
Trustee of the Hugh O'Brian Youth Foundation, serves on the Board of
Trustees of the UCLA Foundation and the Hope for Hearing Foundation.
Other affiliations include the Pepperdine University Board of Regents
and the Board of the John Douglas French Alzheimer's Foundation. Mr.
Eamer is also the recipient of the Doheny Eye Institute's "The Doheny
Award" for lifetime achievement and preeminence in his field.
Jeanne Kelly - Serves as Secretary/Treasurer of the Company and
assistant to Dr. Simon Skurkovich. She holds a Ph.D. in Social
Anthropology from American University.
<PAGE> 21
ITEM 6. EXECUTIVE COMPENSATION.
The following table sets forth the compensation paid by the
Company since January 1, 1996 through December 31, 1998, for each
officer and director of the Company. This information includes the
dollar value of base salaries, bonus awards and number of stock options
granted, and certain other compensation, if any.
<TABLE>
<CAPTION>
SUMMARY ACCRUED COMPENSATION TABLE
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other Restricted Securities
Name and Annual Stock Underlying LTIP All
Other
Principal Compen- Options/ Compen-
Position Year Salary Bonus sation Award(s) SARs Payouts sation
($) ($) ($) ($) (#) ($) ($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Simon 1998 $100,000 0 0 0 0 0 0 0
Skurkovich 1997 $150,000 0 0 0 0 0 0 0
Chairman 1996 $150,000 0 0 0 0 0 0 0
Edmond 1998 $ 50,000 0 0 0 0 0 0 0
Buccellato 1997 $100,000 0 0 0 0 0 0 0
President 1996 $ 50,000 0 0 0 0 0 0 0
Boris 1998 0 0 0 0 0 0 0 0
Skurkovich 1997 $45,000 0 0 0 0 0 0 0
Vice 1996 0 0 0 0 0 0 0 0
President
Joseph 1998 0 0 0 0 0 0 0 0
Bellanti 1997 0 0 0 0 0 0 0 0
Vice 1996 0 0 0 0 0 0 0 0
President
Lawrence 1998 0 0 0 0 0 0 0 0
Loomis 1997 0 0 0 0 0 0 0 0
Director 1996 0 0 0 0 0 0 0 0
Jeanne 1998 0 0 0 0 0 0 0 0
Kelly 1997 $45,000 0 0 0 0 0 0 0
Secretary 1996 $45,000 0 0 0 0 0 0 0
Treasurer
Leonard 1998 0 0 0 0 0 0 0 0
Millstein 1997 0 0 0 0 0 0 0 0
Director 1996 0 0 0 0 0 0 0 0
Richard 1998 0 0 0 0 0 0 0 0
Eamer 1997 0 0 0 0 0 0 0 0
Director 1996 0 0 0 0 0 0 0 0
</TABLE>
The Company anticipates paying the following salaries in 1999,
subject to the Company beginning profitable operations and generating
sufficient revenues to pay the same:
<PAGE> 22
Simon Skurkovich Chairman 1999 $100,000
Edmond Buccellato President 1999 $ 75,000
Boris Skurkovich Vice President 1999 $ -0-
Joseph Bellanti Vice President 1999 $ -0-
Lawrence Loomis Director 1999 $ -0-
Jeanne Kelly Secretary/ 1999 $ 45,000
Treasurer
Leonard Millstein Director 1999 $ -0-
Richard Eamer Director 1999 $ -0-
There are no retirement, pension, or profit sharing plans for the
benefit of the Company's officers and directors. The Company has a
non-qualified stock option plan for the benefit of officers and
directors. The number of shares of common stock under option as of May
31, 1999 were 1,660,000.
Option/SAR Grants.
The following grants of stock options, whether or not in tandem
with stock appreciation rights ("SARs") and freestanding SARs have been
made to officers and/or directors:
Number of
Securities
Underlying Exercise Number of
Options or Base Options
Name SARs Granted Price ($/Sh) Exercised
Simon Skurkovich 300,000 $0.10 -0-
Edmond Buccellato 50,000 $0.10 -0-
50,000 $0.20 -0-
Boris Skurkovich 100,000 $0.01 -0-
150,000 $0.02 -0-
50,000 $0.10 -0-
Long-Term Incentive Plan Awards.
The Company does not have any long-term incentive plans that
provide compensation intended to serve as incentive for performance.
Compensation of Directors.
Directors do not receive any compensation for serving as members
of the Board of Directors. The Board has not implemented a plan to
award options to any Directors. There are no contractual arrangements
with any member of the Board of Directors.
<PAGE> 23
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Simon Skurkovich, the Company's Chairman of the Board of Directors
and a shareholder of the Company advanced funds to pay a significant
portion of the Company's expenses since 1989. The Company owes Mr.
Skurkovich unpaid salaries of $100,000 for 1998 and $150,000 for 1997.
At December 31, 1998 the cumulative amount owed Mr. Skurkovich by the
Company for expenses was $262,776 and for unpaid salaries was
$1,146,000
The Company is currently indebted to Jeanne Kelley, the Company's
Secretary/Treasurer in the amount of $184,000 for unpaid salaries and
$13,381 for expenses advanced by Ms. Kelley. The foregoing debts are
evidence by promissory notes.
The Company is currently indebted to Edmond Buccellato, the
Company's President, in the amount of $200,000 for unpaid salaries.
The Company uses 3,500 square feet of office space on a rent free
basis. The office space is owned by Buccellato and Finkelstein, Inc.
Mr. Buccellato is the President of the Company.
ITEM 8. LEGAL PROCEEDINGS.
The Company is not a party to any pending or threatened litigation
and to its knowledge, no action, suit or proceedings has been
threatened against its officers and its directors.
ITEM 9. MARKET PRICE FOR COMMON EQUITY AND OTHER SHAREHOLDER MATTERS.
Market.
The Company's securities trade on the Bulletin Board operated by
the National Association of Securities Dealers, Inc. (the "Bulletin
Board") under the symbol ADVB. The table shows the high and low bid
of Company's Common Stock during the fiscal years 1997 and 1998 and the
first quarter, 1999:
QUARTER ENDED BID
1997 High Low
March 31 $0.25 $0.10
June 30 $0.18 $0.13
September 30 $0.20 $0.11
December 31 $0.18 $0.12
1998
March 31 $0.24 $0.12
June 30 $0.20 $0.09
September 30 $0.11 $0.06
December 31 $0.08 $0.04
1999
March 31 $0.20 $0.10
<PAGE> 24
Holders
As of March 31, 1999, the Company had 1,754 holders of record of
its Common Stock. This number does not include those beneficial owners
whose securities are held in street name. The total number of
stockholders is estimated to be approximately 3,200.
Dividends
The Company has never paid a cash dividend on its Common Stock and
has no present intention to declare or pay cash dividends on the Common
Stock in the foreseeable future. The Company intends to retain any
earnings which it may realize in the foreseeable future to finance its
operations. Future dividends, if any, will depend on earnings,
financing requirements and other factors.
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES.
The Company has 28,845,665 shares of Common Stock issued and
outstanding as of May 31, 1999. Of the 28,845,665 shares of the
Company's Common Stock outstanding, 13,482,646 shares are freely
tradeable and 15,363,019 shares can only be resold in compliance with
Reg. 144 adopted under the Securities Act of 1933 (the "Act").
In general, under Rule 144 as currently in effect, a person (or
persons whose Shares are aggregated) who has beneficially owned Shares
privately acquired directly or indirectly from the Company or from an
affiliate, for at least one year, or who is an affiliate, is entitled
to sell within any three month period a number of such Shares that does
not exceed the greater of 1% of the then outstanding shares of the
Company's Common Stock or the average weekly trading volume in the
Company's Common Stock during the four calendar weeks, immediately
preceding such sale. Sales under Rule 144 are also subject to certain
manner of sale provisions, notice requirements and the availability of
current public information about the Company. A person (or persons
whose Shares are aggregated) who is not deemed to have been an
affiliate at any time during the 90 day preceding a sale, and who has
beneficially owned Restricted Shares for at least two years, is
entitled to sell all such Shares under Rule 144 without regard to the
volume limitations, current public information requirements, manner of
sale provisions or notice requirements.
In 1996, the Company issued 520,000 shares of common stock to
individuals in consideration of the sum of $26,000. The foregoing
securities were issued pursuant to Section 4(2) of the Securities Act
of 1933 (the "Act") and are restricted securities as that term is
defined in Rule 144 of the Act.
In 1997, the Company issued 490,000 shares of common stock to
individuals in consideration of the sum of $24,500. The foregoing
securities were issued pursuant to Section 4(2) of the Securities Act
of 1933 (the "Act") and are restricted securities as that term is
defined in Rule 144 of the Act.
<PAGE> 25
In 1997, the Company issued 1,310,500 shares of common stock to
individuals in consideration of the sum of $131,050. The foregoing
securities were issued pursuant to Section 4(2) of the Securities Act
of 1933 (the "Act") and are restricted securities as that term is
defined in Rule 144 of the Act.
In 1997, the Company issued 325,000 shares of common stock to Mr.
Larry, A Member of the Board of Directors, related to the exercise of
stock options in consideration of the sum of $3,250. The foregoing
securities were issued pursuant to Section 4(2) of the Securities Act
of 1933 (the "Act") and are restricted securities as that term is
defined in Rule 144 of the Act.
In 1998, the Company issued 305,000 shares of common stock to
individuals in consideration of the sum of $30,500. The foregoing
securities were issued pursuant to Section 4(2) of the Securities Act
of 1933 (the "Act") and are restricted securities as that term is
defined in Rule 144 of the Act.
In 1996, the Company issued 234,000 shares of common stock to one
individual in consideration of services valued at $7,020. The
foregoing securities were issued pursuant to Section 4(2) of the
Securities Act of 1933 (the "Act") and are restricted securities as
that term is defined in Rule 144 of the Act.
In 1996, the Company issued 26,000 shares of common stock to one
individual in consideration of services valued at $1,300. The
foregoing securities were issued pursuant to Section 4(2) of the
Securities Act of 1933 (the "Act") and are restricted securities as
that term is defined in Rule 144 of the Act.
In 1996, the Company issued 48,500 shares of common stock to one
individual in consideration for forgiveness of debt valued at $5,820.
The foregoing securities were issued pursuant to Section 4(2) of the
Securities Act of 1933 (the "Act") and are restricted securities as
that term is defined in Rule 144 of the Act.
In 1996, the Company issued 150,000 shares of common stock to one
individual in consideration of the forgiveness of a debt in the amount
of $7,500. The foregoing securities were issued pursuant to Section
4(2) of the Securities Act of 1933 (the "Act") and are restricted
securities as that term is defined in Rule 144 of the Act.
In 1997, the Company issued 155,500 shares of common stock to
individuals in consideration of the sum of $7,775. The foregoing
securities were issued pursuant to Section 4(2) of the Securities Act
of 1933 (the "Act") and are restricted securities as that term is
defined in Rule 144 of the Act.
In 1998, the Company issued 305,000 shares of common stock to
individuals in consideration of the sum of $30,500. The foregoing
securities were issued pursuant to Section 4(2) of the Securities Act
of 1933 (the "Act") and are restricted securities as that term is
defined in Rule 144 of the Act.
<PAGE> 26
Between January 1, 1999 and May 31, 1999, the Company issued
1,507,100 shares of common stock to individuals in consideration of the
sum of $82,770. The foregoing securities were issued pursuant to
Section 4(2) of the Securities Act of 1933 (the "Act") and are
restricted securities as that term is defined in Rule 144 of the Act.
Between January 1, 1999 and May 31, 1999, the Company issued
197,490 shares of common stock individuals in consideration of services
valued at $9,874. The foregoing securities were issued pursuant to
Section 4(2) of the Securities Act of 1933 (the "Act") and are
restricted securities as that term is defined in Rule 144 of the Act.
ITEM 11. DESCRIPTION OF SECURITIES.
Common Stock
The authorized Common Stock of the Company consists of 50,000,000
shares, $0.001 par value per share. All shares have equal voting
rights and are not assessable. Voting rights are not cumulative and,
therefore, the holders of more than 50% of the Common Stock could, if
they chose to do so, elect all of the directors of the Company.
Upon liquidation, dissolution or winding up of the Company, the
assets of the Company, after the payment of liabilities, will be
distributed pro rata to the holders of the Common Stock. The holders
of the Common Stock do not have preemptive rights to subscribe for any
securities of the Company and have no right to require the Company to
redeem or purchase their shares. The shares of Common Stock presently
outstanding are fully paid and non-assessable.
Dividends
Holders of the Common Stock are entitled to share equally in
dividends when, as and if declared by the Board of Directors of the
Company, out of funds legally available therefore. No dividend has
been paid on the Common Stock since inception, and none is contemplated
in the foreseeable future.
Transfer Agent
The Company's transfer agent is American Transfer & Trust, 40 Wall
Street, New York, NY 10005 and its telephone number is (718) 921-8202.
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The laws of the state of Nevada and certain provisions of the
Company's Articles of Incorporation under certain circumstances provide
for indemnification of the Company's Officers, Directors and
controlling persons against liabilities which they may incur in such
capacities. A summary of the circumstances in which such
indemnification is provided for is contained herein, but this
description is qualified in its entirety by reference to the Company's
Articles of Incorporation and to the statutory provisions.
<PAGE> 27
In general, any Officer, Director, employee or agent may be
indemnified against expenses, fines, settlements or judgments arising
in connection with a legal proceeding to which such person is a party,
if that person's actions were in good faith, were believed to be in the
Company's best interest, and were not unlawful. Unless such person is
successful upon the merits in such an action, indemnification may be
awarded only after a determination by independent decision of the Board
of Directors, by legal counsel, or by a vote of the shareholders, that
the applicable standard of conduct was met by the person to be
indemnified.
The circumstances under which indemnification is granted in
connection with an action brought on behalf of the Company is generally
the same as those set forth above; however, with respect to such
actions, indemnification is granted only with respect to expenses
actually incurred in connection with the defense or settlement of the
action. In such actions, the person to be indemnified must have acted
in good faith and in a manner believed to have been in the Company's
best interest, and have not been adjudged liable for negligence or
misconduct.
ITEM 13. FINANCIAL STATEMENTS.
CONTENTS
December 31, 1998 - Audited Statements
Independent Auditor's Report F-1
Financial Statements:
Balance Sheets F-2
Statement of Operations F-3
Statement of Stockholders' Equity (Deficit) F-4
Statement of Cash Flows F-5
Notes to Financial Statements F-6 - F-12
March 31, 1999 - Unaudited Statements
Statement of Management 1
Financial Statements:
Balance Sheets 2
Statement of Operations 3
Statement of Stockholders' Equity (Deficit) 4
Statement of Cash Flows 5
Notes to Financial Statements 6
<PAGE> 27
Board of Directors
Advanced Biotherapy Concepts, Inc.
6355 Topanga Canyon Blvd, Suite 510
Woodland Hills, CA 91367
Independent Auditor's Report
We have audited the accompanying balance sheets of Advanced Biotherapy
Concepts, Inc., (a Development Stage Enterprise), as of December 31,
1998 and 1997 and the related statements of operations, stockholders'
equity (deficit) and cash flows for the years then ended. These
financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Advanced
Biotherapy Concepts, Inc. as of December 31, 1998 and 1997, and the
results of its operations and its cash flows for the years then ended,
in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 2
to the financial statements, the Company has suffered recurring losses
from operations, has generated little revenue in the past years, has
a working capital deficit of $1,822,098 at December 31, 1998 and has
substantial liabilities. These conditions raise substantial doubt
about the Company's ability to continue as a going concern.
Management's plans regarding this issue are also discussed in Note 2,
and include additional capitalization of the Company, as well as an
attempt to decrease expenses. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
Williams & Webster, P.S.
Spokane, Washington
May 7, 1999
F-1
<PAGE> 29
ADVANCED BIOTHERAPY CONCEPTS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEET
ASSETS
<TABLE>
<CAPTION>
December 31, December 31,
1998 1997
<S> <C> <C>
CURRENT ASSETS
Cash $ 1,182 $ 70,027
------------ ------------
TOTAL CURRENT ASSETS 1,182 70,027
PROPERTY AND EQUIPMENT - -
OTHER ASSETS
Patents and patents pending, net of
accumulated amortization 76,527 59,228
Organization costs 9,220 9,220
------------ ------------
TOTAL OTHER ASSETS 85,747 68,448
------------ ------------
TOTAL ASSETS $ 86,929 $ 138,475
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 54,882 $ 45,376
Loan payable to related party 257,076 257,076
Salaries payable 1,501,360 1,333,000
Accrued interest 9,962 9,962
------------ ------------
TOTAL CURRENT LIABILITIES 1,823,280 1,645,414
LONG-TERM LIABILITIES
Note payable to related party 213,381 213,381
------------ ------------
TOTAL LIABILITIES 2,036,661 1,858,795
------------ ------------
COMMITMENTS AND CONTINGENCIES - -
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, par value $0.001 per share;
50,000,000 shares authorized; 27,141,075
and 26,836,075 shares issued and outstanding
in 1998 and 1997, respectively 27,141 26,836
Additional paid-in capital 2,552,654 2,522,459
Deficit accumulated during the
development stage (4,529,527) (4,269,615)
------------ ------------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) (1,949,732) (1,720,320)
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY AND (DEFICIT) $ 86,929 $ 138,475
============ ============
</TABLE>
The accompanying notes are an integral part of these financial
statements.
F-2
<PAGE> 30
ADVANCED BIOTHERAPY CONCEPTS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
From Inception
Through
Years Ended December 31, December 31,
1998 1997 1998
<S> <C> <C> <C>
REVENUES $ - $ - $ 89,947
---------- ---------- ------------
OPERATING EXPENSES
Research and development 137,071 174,245 1,948,766
Professional fees 7,868 3,870 1,086,443
Amortization 5,850 5,850 352,455
Accrued salaries 85,000 145,000 603,516
Office and other expenses 4,437 3,382 166,530
Rent - - 109,254
Bad debt - - 95,004
Travel and entertainment 6,216 4,481 76,388
Security transfer fees 7,057 10,031 84,747
Telephone 3,134 5,395 61,869
Postage/delivery 991 3,144 41,969
Depreciation - 1,000 36,973
Management consulting - 7,775 49,740
Payroll taxes - - 27,985
Lawsuit settlement - - 27,319
Taxes, fees and licenses - 413 23,935
Advertising 2,690 13,310 35,799
Stock settlement agreement - - 8,875
Patent annuities - - 7,208
---------- ---------- ------------
260,314 377,896 (4,844,775)
---------- ---------- ------------
Loss from operations (260,314) (377,896) (4,754,828)
Other income (expense)
Interest income 402 435 837
Interest expense - - (340,764)
---------- ---------- ------------
402 435 (339,927)
---------- ---------- ------------
Loss before
extraordinary item (259,912) (377,461) (5,094,755)
Extraordinary item,
forgiveness of debt - - 565,228
---------- ---------- ------------
NET LOSS $ (259,912) $ (377,461) $ (4,529,527)
========== ========== ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-3
<PAGE> 31
ADVANCED BIOTHERAPY CONCEPTS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
Common Stock Additional
Paid-in Accumulated
Shares Amount Capital Deficit
<S> <C> <C> <C> <C>
Balance,
December 31, 1996 24,555,075 $ 24,555 $ 2,358,166 $ (3,892,154)
Common stock issued 2,281,000 2,281 164,293
Net loss for the year
ended December 31, 1997 (377,461)
---------- --------- ------------ ------------
Balance,
December 31, 1997 26,836,075 26,836 2,522,459 (4,269,615)
Common stock issued 305,000 305 30,195
Net loss for the year
ended December 31, 1998 (259,912)
---------- --------- ------------ ------------
Balance,
December 31, 1998 27,141,075 $ 27,141 $ 2,552,654 $ (4,529,527)
========== ========= ============ ============
</TABLE>
Required information regarding stock issuances prior to January 1, 1997
can be found in Note 6.
The accompanying notes are an integral part of these financial
statements.
F-4
<PAGE> 32
ADVANCED BIOTHERAPY CONCEPTS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
From Inception
Years Ended December 31, through
1998 1997 12/31/98
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $ (259,912) $ (377,461) $ (4,529,527)
Adjustments to reconcile
net loss to cash used in
operating activities:
Depreciation - 1,000 36,973
Extraordinary gain (201,859)
Amortization 5,850 5,850 352,455
Expenses paid through
issuance of common
stock - 7,775 226,381
Organization costs - - (9,220)
Increase (decrease) in:
Accounts payable 9,506 (3,990) 54,882
Accounts payable,
related parties - (4,000) 257,076
Salaries payable 168,360 283,000 1,501,360
Accrued interest - - 9,962
---------- ---------- ------------
Net cash used in
operating activities (76,196) (87,826) (2,301,517)
Cash flows from investing
activities:
Purchase of fixed assets - - (36,973)
Acquisition of patents (23,149) (5,900) (132,312)
---------- ---------- ------------
Net cash used in
investing activities (23,149) (5,900) (169,285)
Cash flows from financing
activities:
Proceeds from issuance of
common stock 30,500 158,800 2,258,603
Proceeds from notes payable - - 288,508
Reduction of notes payable - - (75,127)
---------- --------- ------------
Net cash provided by
financing activities 30,500 158,800 2,471,984
---------- --------- ------------
Net increase (decrease)
in cash (68,845) 65,074 1,182
Cash, beginning 70,027 4,953 -
---------- --------- ------------
Cash, ending $ 1,182 $ 70,027 $ 1,182
========== ========= ============
Supplemental disclosures:
Interest paid $ - $ - $ 339,927
========== ========= ============
Income taxes paid $ - $ - $ -
========== ========= ============
NON-CASH TRANSACTIONS
The Company was involved in non
cash transactions as follows:
Professional fees and
expenses $ - $ 7,775 $ 335,910
F-5
<PAGE> 33
ADVANCED BIOTHERAPY CONCEPTS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
NOTE 1 ORGANIZATION AND DESCRIPTION OF BUSINESS
Advanced Biotherapy Concepts, Inc. (hereinafter "the Company"), was
incorporated in 1985 under the laws of the State of Nevada. The
Company is involved in the research and development of the treatment
of autoimmune diseases in humans.
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies of Advanced Biotherapy
Concepts, Inc. is presented to assist in understanding the Company's
financial statements. The financial statements and notes are
representations of the Company's management which is responsible for
their integrity and objectivity. These accounting policies conform to
generally accepted accounting principles and have been consistently
applied in the preparation of the financial statements.
Development Stage Activities
The Company has been in the development stage since its formation in
1985 and has not realized any significant revenues from its planned
operations. It is primarily engaged in the research and development
of the treatment of autoimmune diseases in humans.
Going Concern
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern.
As shown in the accompanying financial statements, the Company incurred
a net loss of $259,912 for 1998. At December 31, 1998, current
liabilities exceed current assets by $1,822,098 and the Company has an
accumulated deficit during the development stage at December 31, 1998
of $4,529,527. The future of the Company is dependent upon its ability
to obtain financing, and upon future profitable operations from the
commercial success of its medical research and development of products
to combat diseases of the human immune system and products for
treatment of viral and bacterial diseases of animals. Management has
established plans designed to increase the capitalization of the
Company and is actively seeking additional capital that will provide
funds needed to increase liquidity, fund the research and development
and therefore the internal growth of the Company, in order to fully
implement its business plans. The financial statements do not include
any adjustments relating to the recoverability and classification of
recorded assets, or the amounts and classification of liabilities that
might be necessary in the event the Company cannot continue in
existence.
F-6
<PAGE> 34
ADVANCED BIOTHERAPY CONCEPTS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Accounting Method
The Company's financial statements are prepared using the accrual
method of accounting.
Loss Per share
Loss per share was computed by dividing the net loss by the weighted
average number of shares outstanding during the period. The weighted
average number of shares was calculated by taking the number of shares
outstanding and weighting them by the amount of time that they were
outstanding.
The outstanding options were not included in the computation of loss
per share because the exercise price of the outstanding options is
higher than the market price of the stock, thereby causing the options
to be antidilutive.
Cash and Cash Equivalents
For purposes of the Statement of Cash Flows, the Company considers all
short-term debt securities purchased with a maturity of three months
or less to be cash equivalents.
Provision for Taxes
At December 31, 1998, the Company had net operating loss carryforwards
of approximately $4,500,000 which may be offset against future taxable
income. No tax benefit has been reported in the financial statements
as the Company believes there is a 50% or greater chance that the net
operating loss carryforwards will expire unused. Accordingly, the
potential tax benefits of the net operating loss carryforwards are
offset by a valuation allowance of the same amount.
Use of Estimates
The process of preparing financial statements in conformity with
generally accepted accounting principles requires the use of estimates
and assumptions regarding certain types of assets, liabilities,
revenues, and expenses. Such estimates primarily relate to unsettled
transactions and events as of the date of the financial statements.
Accordingly, upon settlement, actual results may differ from estimated
amounts.
F-7
<PAGE> 35
ADVANCED BIOTHERAPY CONCEPTS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
NOTE 3 PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. Depreciation is provided
using the straight line method over the estimated useful lives of the
assets. The following is a summary of property, equipment and
accumulated depreciation at December 31, 1998 and 1997.
Accumulated
Cost Depreciation
Lab equipment $ 27,582 $ 27,582
Office equipment 4,839 4,839
Furniture and fixtures 1,302 1,302
-------- --------
$ 33,723 $ 33,723
-------- --------
Depreciation expense for the years ended December 31, 1998 and 1997 was
$0 and $1,000, respectively.
NOTE 4 INTANGIBLE ASSETS
Organization costs
Organization costs accumulated during the development stage will be
amortized on the straight-line method over sixty months starting with
the first fiscal year following the end of the development stage
period.
Patents and patents pending
Costs relating to the development and approval of patents are
capitalized and amortized using the straight-line method over seventeen
years.
Accumulated Net
Cost amortization amount
At December 31, 1996 $ 103,262 $ (44,084) $ 59,178
1997 activity 5,900 (5,850)
--------- --------- --------
At December 31, 1997 109,162 (49,934) 59,228
1998 activity 23,150 (5,850)
--------- --------- --------
At December 31, 1998 $ 132,302 $ (55,784) $ 76,528
========= ========= ========
F-8
<PAGE> 36
ADVANCED BIOTHERAPY CONCEPTS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
NOTE 5 RELATED PARTY TRANSACTIONS
The Company's chairman and principal shareholder has advanced funds to
pay a significant portion of the Company's expenses since 1989. The
Company owes the chairman unpaid salary of $100,000 and $150,000 for
the years ending December 31, 1998 and 1997, respectively. At December
31, 1998, the cumulative amounts owed to the chairman for expenses
amount to $257,076 and for unpaid salary amount to $1,146,000. Accrued
interest payable to related parties is $9,962 for both years.
At December 31, 1998 and 1997, the Company owed the secretary/treasurer
$13,381 for expenses paid in previous years recorded in notes payable
and $184,000 in unpaid salary recorded as salary payable.
Notes payable to related parties consist of loans payable to the
chairman and principal shareholder ($200,000) and to another officer
($13,381). The notes have no specific due date, are currently
uncollateralized, and are non-interest bearing. Certain plasma when
owned by the Company will be pledged as collateral for the president's
note. None of the aforementioned plasma was owned by the Company at
the end of either 1998 or 1997.
During calendar 1998 and 1997, the Company received the use of
approximately 3,500 square feet of commercial building space on a rent-
free basis from a firm owned by one of the Company's directors. No
formal agreement memorializes this month-to-month arrangement.
NOTE 6 YEAR 2000 ISSUES
Like other companies, Advanced Biotherapy Concepts, Inc. could be
adversely affected if the computer systems it, or its suppliers or
customers, uses do not properly process and calculate date-related
information and data from the period surrounding and including January
1, 2000. This is commonly known as the "Year 2000" issue.
Additionally, this issue could impact non-computer systems and devices
such as production equipment, elevators, etc. At this time, because
of the complexities involved in the issue, management cannot provide
assurances that the Year 2000 issue will not have an impact on the
Company's operations.
F-9
<PAGE> 37
ADVANCED BIOTHERAPY CONCEPTS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
NOTE 7 COMMON STOCK AND ADDITIONAL PAID-IN CAPITAL
Information regarding the number of shares issued and consideration
received is as follows:
</TABLE>
<TABLE>
<CAPTION>
Common stock
Amount Additional
per Paid-in
share Shares Amount Capital
<S> <C> <C> <C> <C>
Common stock issued
for cash:
1985 $ .50 100,000 $ 100 $ 49,900
1986 (unaudited) 1.00 639,500 640 678,861
1987 (unaudited) 1.00 850,500 850 759,650
1988 1.00 25,000 25 24,975
1993 .25 2,402,000 2,402 475,900
1995 .05 1,000,000 1,000 49,000
1996 .05 520,000 520 25,480
1997 .05 490,000 490 24,010
1997 .10 1,310,500 1,311 129,739
1997 .01 325,000 325 2,925
1998 .10 305,000 305 30,195
---------- ------- -----------
7,967,500 7,968 2,250,635
---------- ------- -----------
Common stock issued
for patents assigned:
1984 .01 550,000 5,500
1985, adjustment to
reflect change in
number and par value of
shares outstanding 2,750,000 (2,200) 2,200
---------- ------- -----------
3,300,000 3,300 2,200
---------- ------- -----------
Common stock issued
for acquisitions:
1985 .01 13,333,500 13,334 (41,112)
---------- ------- -----------
Common stock issued
for note receivable:
1986 (unaudited) 1.00 10,000 10 9,990
---------- ------- -----------
F-10
<PAGE> 38
ADVANCED BIOTHERAPY CONCEPTS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
NOTE 7 COMMON STOCK AND ADDITIONAL PAID-IN CAPITAL (Continued)
Common stock
Amount Additional
per Paid-in
share Shares Amount Capital
<S> <C> <C> <C> <C>
Common stock issued
for services (1):
1988 $ .50 25,000 $ 25 $ 12,475
1989 .20 20,000 20 3,980
1989 1.10 5,000 5 5,495
1990 .50 3,500 4 1,746
1990 .62 14,750 14 9,131
1990 .66 10,875 11 7,166
1990 .80 8,250 8 6,592
1991 .31 7,000 7 2,163
1991 .34 100,000 100 33,900
1991 1.00 2,500 3 2,497
1991 .85 50,000 50 42,450
1992 .625 2,000 2 1,248
1992 .75 60,500 60 45,315
1993 .25 120,000 120 29,880
1996 .03 234,000 234 6,786
1996 .05 26,000 26 1,274
1996 .12 48,500 48 5,772
1997 .05 155,500 155 7,619
---------- ------- -----------
893,375 892 225,489
---------- ------- -----------
Common stock issued to
replace unrecorded
certificates
1988 .001 1,200 1 (1)
1992 .001 500 1 (1)
---------- ------- -----------
1,700 2 (2)
---------- ------- -----------
Common stock issued for
forgiveness of accounts
payable (1)
1990 .50 25,000 25 12,475
1996 .05 150,000 150 7,350
---------- ------- -----------
175,000 175 19,825
---------- ------- -----------
Common stock issued for
commissions (1)
1993 .001 1,260,000 1,260
---------- -------
F-11
<PAGE> 39
ADVANCED BIOTHERAPY CONCEPTS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
NOTE 7 COMMON STOCK AND ADDITIONAL PAID-IN CAPITAL (Continued)
Common stock
Amount Additional
per Paid-in
share Shares Amount Capital
<S> <C> <C> <C> <C>
Stock options issued
1993 for debt
repayment (1) .25 200,000 200 49,800
1991 for services (1) 35,825
---------- ------- -----------
Total $27,141,075 $27,141 $ 2,552,654
=========== ======= ===========
</TABLE>
(1) Per share amounts determined by information deemed most reliable
based on circumstances of each case: trading price at time of
issuance or value of services received.
NOTE 8 STOCK OPTIONS AND ISSUANCE COMMITMENTS
On February 25, 1991, the Corporation granted non-statutory options to
purchase stock to members of the Board of Directors, officers, and
outside consultants. These remaining options offer a total of 860,000
shares at a price of $.20 per share with an exercise period of February
25, 1991 to February 25, 2001. Additional options were issued
effective February 1, 1993, for a total of 250,000 shares at a price
of $.01 per share, with an exercise period of February 1, 1993, to
February 1, 2003. During 1995, options for 50,000 shares were granted
at $.20 per share which expire in 2005. Also in 1995, options for
350,000 shares were granted at $.01 per share expiring in 2005. During
1996, options for 525,000 shares were granted at $.10 per share. The
shares purchased will be restricted and, therefore, may not be
transferred without registration under applicable Federal and State
securities laws. Stock options granted to a Director of the Company
for 325,000 shares at a price of $.01 were exercised in 1997. No stock
options were granted, exercised or cancelled in the year ending
December 31, 1998.
Grant date Expiration date Number of shares Exercise price
02/25/91 02/25/01 650,000 $ .20
11/30/95 11/30/05 350,000 .01
12/01/95 12/01/05 50,000 .20
02/01/93 02/01/03 150,000 .01
02/25/91 02/25/01 125,000 .20
02/25/91 02/25/01 85,000 .20
02/01/93 02/01/03 100,000 .01
11/20/96 12/01/05 525,000 .10
---------
2,035,000
<PAGE> 40
The condensed financial statements of the Company included herein
have been prepared by the Company from its own books and records. In
the opinion of management, the financial statements included in this
quarterly report present fairly in all material respects, the financial
position of the Registrant as of March 31, 1999 and December 31, 1998,
the results of operations for the three months ended March 31, 1999 and
1998, and the cash flows for the three months ended March 31, 1999 and
1998, in conformance with generally accepted accounting principles.
-1-
<PAGE> 41
ADVANCED BIOTHERAPY CONCEPTS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
(Unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash $ 45,913 $ 1,182
------------ -----------
TOTAL CURRENT ASSETS 45,913 1,182
PROPERTY AND EQUIPMENT - -
OTHER ASSETS
Patents and patents pending, net
of accumulated amortization 75,027 76,527
Organization costs 9,220 9,220
------------ -----------
TOTAL OTHER ASSETS 84,247 85,747
------------ -----------
TOTAL ASSETS $ 130,160 $ 86,929
============ ===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 46,666 $ 54,882
Loan payable to related party 257,076 257,076
Salaries payable 1,501,360 1,501,360
Accrued interest 9,962 9,962
------------ -----------
TOTAL CURRENT LIABILITIES 1,815,064 1,823,280
LONG-TERM LIABILITIES
Note payable to related party 213,381 213,381
------------ -----------
TOTAL LIABILITIES 2,028,445 2,036,661
------------ -----------
COMMITMENTS AND CONTINGENCIES - -
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, par value $0.001 per
share; 50,000,000 shares authorized;
28,608,475 and 27,141,075 shares
issued and outstanding at March
31, 1999 and December 31, 1998,
respectively 28,608 27,141
Additional paid-in capital 2,624,307 2,552,654
Deficit accumulated during the
development stage (4,551,200) (4,529,527)
------------ -----------
TOTAL STOCKHOLDERS' EQUITY
(DEFICIT) (1,898,285) (1,949,732)
------------ -----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $ 130,160 $ 86,929
============ ===========
</TABLE>
The accompanying condensed notes are an integral part of these consolidated
financial statements.
-2-
<PAGE> 42
ADVANCED BIOTHERAPY CONCEPTS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Quarter Ended
March 31, 1999 March 31, 1998
(Unaudited) (Unaudited)
<S> <C> <C>
REVENUES $ - $ -
--------- ---------
OPERATING EXPENSES
Research and development 4,279 11,605
Professional fees 1,518 13,025
Amortization 1,500 -
Office and other expenses 75 4,350
Security transfer fees 2,500 2,500
Telephone 337 648
Postage/delivery 0 388
Advertising 500 2,450
Patent annuities --------- ---------
21,709 34,966
--------- ---------
Loss from operations (21,709) (34,966)
Other income (expense)
Interest income 36 155
--------- ---------
Interest expense 36 155
--------- ---------
NET LOSS $ (21,673) $ (34,811)
========= =========
NET LOSS PER COMMON SHARE $ (0.001) $ (0.001)
======== =========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 27,874,775 26,826,075
========== ==========
</TABLE>
The accompanying condensed notes are an integral part of these
condensed financial statements.
-3-
<PAGE> 43
ADVANCED BIOTHERAPY CONCEPTS, INC.
(A DEVELOPMENT STAGE ENTERPRISE
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
Common Stock Additional
Paid-in Accumulated
Shares Amount Capital Deficit
<S> <C> <C> <C> <C>
Balance,
December 31, 1996 24,555,075 $ 24,555 $ 2,358,166 $ (3,892,154)
Common stock issued 2,281,000 2,281 164,293
Net loss for the year
ended December 31, 1997 (377,461)
---------- -------- ----------- ------------
Balance,
December 31, 1997 26,836,075 26,836 2,522,459 (4,269,615)
Common stock issued 305,000 305 30,195
Net loss for the year
ended December 31, 1998 (259,912)
---------- -------- ----------- ------------
Balance,
December 31, 1998 27,141,075 27,141 2,552,654 (4,529,527)
Common stock issued 1,467,400 1,467 71,653
Net loss for the period
ended March 31, 1999 (21,673)
---------- -------- ----------- ------------
Balance,
March 31, 1999
(unaudited) 28,608,475 $ 28,608 $ 2,624,307 $ (4,551,200)
========== ======== =========== ============
</TABLE>
The accompanying condensed notes are an integral part of these
condensed financial statements.
-4-
<PAGE> 44
ADVANCED BIOTHERAPHY CONCEPTS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
Quarter Ended March 31,
1999 1998
(Unaudited) (Unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (21,673) $ (34,811)
Adjustments to reconcile net loss
to cash used in operating activities:
Amortization 1,500 -
Increase (decrease) in:
Accounts payable (8,216) -
Salaries payable - (12,000)
--------- ---------
Accured interest
Net cash used in operating activities (28,389) (46,811)
--------- ---------
Cash flows from investing activities - -
--------- ---------
Purchase of fixed assets
Net cash used in investing activities - -
--------- ---------
Cash flows from financing activities:
Proceeds from issuance of common stock 73,120 30,500
--------- ---------
Net cash provided by financing
activities 73,120 30,500
--------- ---------
Net increase (decrease) in cash 44,731 (16,311)
Cash, beginning 1,182 70,028
--------- ---------
Cash, ending $ 45,913 $ 53,717
========= =========
Supplemental disclosures:
Interest paid $ - $ -
========= =========
Income taxes paid $ - $ -
========= =========
NON-CASH TRANSACTIONS
The Company was involved in non cash transactions as follows:
Professional fees and expenses
</TABLE>
The accompanying condensed notes are an integral part of these
condensed financial statements.
-5-
<PAGE> 45
NOTES TO CONDENSED FINANCIAL STATEMENTS
2) The condensed financial statements included herein have been
prepared by the Company, without audit, in accordance with
generally accepted accounting principles for interim financial
information and pursuant to the rules, regulations, and
instructions of the Securities and Exchange Commission pertaining
to Form 10-Q and Article 10 of Regulation S-X. These condensed
financial statements reflect all adjustments which, in the opinion
of management, are necessary to present fairly the results of
operations for the interim period presented. All adjustments are
of a normal recurring nature. Certain information, footnotes, and
disclosures normally included in complete financial statements
prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules
and regulations, although the Company believes that the
disclosures are adequate. It is suggested that these condensed
financial statements be read in conjunction with the financial
statements and the notes thereto for the year ended December 31,
1998.
-6-
<PAGE> 46
ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE.
There have been no disagreements on accounting and financial
disclosures from the inception of the Company through the date of this
Registration Statement.
ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS.
Exhibit No. Description
3.1 Articles of Incorporation.
3.2 Bylaws.
4.1 Specimen Stock Certificate.
27 Financial Data Schedule
<PAGE> 47
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of
1934, the registrant caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized.
ADVANCED BIOTHERAPY CONCEPTS, INC.
BY: /s/ Edmond Buccellato
Edmond Buccellato, President
Pursuant to the requirements of the Securities Exchange Act of
1934, this Form 10-SB Registration Statement has been signed by the
following persons in the capacities and on the dates indicated:
Signatures Title Date
/s/ Simon Skurkovich
Simon Skurkovich, M.D. Chairman of the Board 05/26/99
of Directors
/s/ Edmond Buccellato
Edmond Buccellato President and a Member 05/24/99
of the Board of Directors
/s/ Boris Skurkovich
Boris Skurkovich, M.D. Vice President and a 05/24/99
Member of the Board of
Directors
/s/ Joseph Bellanti
Joseph Bellanti, M.D. Vice President and a 05/25/99
Member of the Board of
Directors
/s/ Lawrence Loomis
Lawrence Loomis Member of the Board of 05/27/99
Directors
/s/ Leonard Millstein
Leonard Millstein Member of the Board of 05/26/99
Directors
/s/ Richard Eamer
Richard Eamer Member of the Board of 05/26/99
Directors
<PAGE>
EXHIBIT 3.1
ARTICLES OF INCORPORATION
OF
ADVANCED BIOTHERAPY CONCEPTS, INC.
We the undersigned, being each of the original incorporators
herein named, for the purpose of forming a corporation to do business
both within and without the State of Nevada and in pursuance of the
corporation laws of the State of Nevada, being Chapter 78 of the
Nevada Revised Statutes, do make and file these Articles of
Incorporation hereby declaring and certifying that the facts herein
stated are true:
1. The name of the corporation is ADVANCED BIOTHERAPY
CONCEPTS, INC.
2. Its principal office in the County of Washoe, State
of Nevada is located at 350 South Center Street, Suite 404,
Reno, Nevada 89501. The name and address of its Resident Agent
is Elliott R. Pearson, 350 South Center Street, Suite 404,
Reno, Nevada 89501.
3. The purposes for which the corporation is organized
are to engage in any activity or business not in conflict with
the laws of the State of Nevada or of the United States of
America, and without limiting the generality of the foregoing,
specifically:
1. To have and to exercise all the powers now or hereafter
conferred by the laws of the State of Nevada upon corporations
organized pursuant to the laws under which the corporation is
organized and any and all acts amendatory thereof and supplemental
thereto.
2. To discount and negotiate promissory notes, drafts, bill of
exchange and other evidence of debts, and to collect for others
money due them on notes, checks, drafts, bill of exchange,
commercial paper and other evidence of indebtedness.
3. To purchase or otherwise acquire, own, hold, lease, sell,
exchange, assign, transfer, mortgage, pledge, or otherwise dispose
of, to guaranty, to invest, trade, and deal in and with personal
property of every class and description.
4. To enter into any kind of contract or agreement, cooperative
or profit sharing plan with its officers or employees that the
corporation may deem advantageous or expedient or otherwise to
reward or pay such persons for their services as the directors may
deem fit.
5. To purchase, lease, or otherwise acquire, in whole or in
part, the business, the good will, rights, franchises and property
of every kind, and to undertake the whole or any part of the
assets or liabilities, of any person, firm, association, nonprofit
or profit corporation, or own property necessary or suitable for
<PAGE>
its purposes, and to pay the same in cash, in the stocks or bonds
of this company or otherwise, to hold or in any manner dispose of
the whole or any part of the business or property so acquired and
to exercise all of the powers necessary or incidental to the
conduct of such business.
6. To lend or borrow money and to negotiate and make loans,
either on its own account or as agent, or broker for others.
7. To enter into, make, perform and carry out contracts of
every kind and for any lawful purpose, without limit as to amount
with any peson, firm, association, cooperative profit or non-
profit corporation, municipality, State of Government or any
subdivision, district or department thereof.
8. To buy, sell, exchange, negotiate, or otherwise deal in, or
hypothecate securities, stocks, bonds, debentures, mortgages,
notes or other collaterals or securities, created or issued by any
corporation wherever organized including this corporation, within
such limits as may be provided by law, and while owner of any such
stocks or other collaterals to exercise all rights, powers and
privileges of ownership, including the right to vote the same; to
subscribe for stock of any corporation to be organized, other than
to promote the organization thereof.
9. To purchase or otherwise acquire, own, hold, lease, sell,
exchange, assign, transfer, mortgage, pledge, license, or
otherwise dispose of any letters, patents, copyrights, or
trademarks of every class and description.
10. To do any and all other such acts, things, business or
businesses in any manner connected with or necessary, incidental,
convenient or auxiliary to do any of these objects hereinbefore
enumerated, or calculated, directly or indirectly, to promote the
interest of the corporation; and in carrying on its purposes, or
for the purpose of obtaining or furthering any of its business, to
do any and all acts and things, and to exercise any and all other
powers which a co-partnership or natural person could do or
exercise, and which now or hereafter may be authorized by law,
here and in any other part of the world.
11. The several clauses contained in this statement of powers
shall be construed as both purposes and powers. And the
statements contained in each of these clauses shall be in no way
limited or restricted, by reference to or inference from, the
terms of any other clauses, but shall be regarded as independent
purposes and powers; and no recitations, expression or declaration
of specific or special powers or purposes herein enumerated shall
be deemed to be exclusive; but is hereby expressly declared that
all other lawful powers not inconsistent herewith, are hereby
included.
12. To engage in research, development and marketing of medical
products.
<PAGE>
4. The aggregate number of shares which the corporation shall
have authority to issue is 50,000,000. Each share will have a par
value of .001.
5. The governing board shall be styled "Directors," and
the first Board shall be one (1) in number.
So long as all of the shares of the corporation are owned
beneficially and of record by either one or two shareholders, the
number of directors may be less than three, but not less than the
number of shareholders. Otherwise, the number of directors shall not
be less than three.
Subject to the foregoing limitations, the number of directors
shall not be reduced to less than one, and may, at any time or times,
be increased or decreased by a duly adopted amendment to these
Articles of Incorporation, or in such manner as shall be provided in
the Bylaws of the corporation duly adopted by either the Board of
Directors or the shareholders.
The names and addresses of the first Board of Directors are as
follows:
Directors Address
David Grindstaff 395 South 600 East
Salt Like City, Utah 84102
6. All shares are to be non-assessable.
7. The names and addresses of the incorporators of the
corporation are as follows:
Name Address
Elliott Pearson 350 S. Center St., Ste. 404
Reno, Nevada 89501
8. The period of its duration is perpetual.
9. Provisions for the regulation of the internal affairs of the
corporation are contained in the Bylaws of this Corporation.
DATED this 6th day of November, 1985.
/s/ Elliott R. Pearson
ELLIOTT R. PEARSON
<PAGE>
STATE OF NEVADA )
) ss.
County of Washoe )
On this 6th day of November, 1985, personally appeared before me,
a notary public, ***ELLIOTT R. PEARSON***, who acknowledged that he
executed the above instrument.
/s/ Elizabeth M. Arrance
Notary Public
Seal
<PAGE>
EXHIBIT 3.2
ADVANCED BIOTHERAPY CONCEPTS, INC.
BY-LAWS
ARTICLE I
Stockholders
SECTION 1. Annual Meeting. The annual meeting of the stockholders
of the Corporation shall be held on a day duly designated by the Board
of Directors in the month of May, in each year, for the purpose of
electing directors to succeed those whose terms shall have expired as
of the date of such annual meeting, and for the transaction of such
other corporate business as may come before the meeting.
SECTION 2. Special Meetings. Special meetings of the stockholders
may be called at any time for any purpose or purposes by the President,
by a Vice President, or by a majority of the Board of Directors, and
shall be called forthwith by the President, by a Vice President, or
Secretary, or any director of the Corporation upon the request in
writing of the holders of a majority of all the shares outstanding and
entitled to vote on the business to be transacted at such meeting. Such
request shall state the purpose or purposes of the meeting.
If the person to whom such request in writing is made shall fail
to issue a call for such meeting within ten (10) a days after receipt
of such request, then a majority of the Board of Directors or the
stockholders owning of record a majority in amount of the stock of the
Corporation, issued, outstanding and entitled to vote, may do so by
giving ten (10) days' prior written notice of the time, place and
object of the meeting in the manner set forth in Article I, Section 4
hereof. Business transacted at all special meetings of stockholders
shall be confined to the purpose or purposes stated in the notice of
the meeting.
SECTION 3. Place of Holding Meetings. All meetings of stockholders
shall be held at the principal office of the Corporation or elsewhere
in the United States as designated by the Board of Directors.
SECTION 4. Notice of Meetings. Written notice of each meeting of
the stockholders shall be signed by an officer of the Corporation and
mailed, postage prepaid by the Secretary, to each stockholder entitled
to vote thereat at such person's post office address, as it appears
upon the books of the Corporation, at least ten (10) days but not more
than sixty (60) days before, the meeting. Each such notice shall state
the place, day, and hour at which the meeting is to be held, and in the
case of any special meeting, shall state briefly the purpose or
purposes thereof.
SECTION 5. Quorum. The presence in person or by proxy of the
holders of record of a majority of the shares of the capital stock of
the Corporation issued and outstanding and entitled to vote thereat
shall constitute a quorum at all meetings of the stockholders, except
as otherwise provided by law, by the Articles of Incorporation or by
these Bylaws. If less than a quorum shall be in attendance at the time
for which the meeting shall have been called, the meeting may be
adjourned from time to time by a majority vote of the stockholders
<PAGE>
present or represented, without any notice other than by announcement
at the meeting, until a quorum shall attend. At any adjourned meeting
at which a quorum shall attend, any business may be transacted which
might have been transacted if the meeting had been held as originally
called.
SECTION 6. Conduct of Meetings. Meetings of stockholders shall be
presided over by the Chair of the Board of the Corporation or, if the
Chair is not present, by the President, or, if none of said officers is
present, by a chair to be elected at the meeting. The Secretary of the
Corporation, or if the Secretary is not present, any Assistant
Secretary shall act as Secretary of such meetings; in the absence of
the Secretary and any Assistant Secretary, the presiding officer may
appoint a person to act as Secretary of the meeting.
SECTION 7. Voting. At all meetings of stockholders, every
stockholder entitled to vote thereat shall have one (1) vote for each
share of stock standing in such stockholder's name on the books of the
Corporation on the date for the determination of stockholders entitled
to vote at such meeting. Such vote may be either in person or by proxy
appointed by an instrument in writing subscribed by such stockholder or
such stockholder's duly authorized attorney, bearing a date not more
than six (6) months prior to said meeting, unless coupled with an
interest, or unless said instrument provides for a longer period which
in no case shall exceed seven (7) years from the date of its execution.
Such proxy shall be dated, but need not be sealed, witnessed or
acknowledged. All elections shall be had and all questions shall be
decided by a majority of the votes cast at a duly constituted meeting,
except as otherwise provided by law, in the Articles of Incorporation
or by these Bylaws.
If the chair of the meeting shall so determine, a vote by ballot
may be taken upon any election or matter, and the vote shall be so
taken upon request of the holders of ten per centum (10%) of the stock
entitled to vote on such election or matter. In either of such events,
the proxies and ballots shall be received and be taken in charge and
all questions touching the qualification of voters and the validity of
proxies and the acceptance or rejection of votes, shall be decided by
the tellers. Such tellers shall be appointed by said meeting.
SECTION 8. List of Stockholders. Prior to each meeting of the
stockholders, the Secretary shall prepare a full, true and complete
list in alphabetical order of all stockholders entitled to vote at such
meeting, indicating the number of shares held by each, and shall be
responsible for the production of such list at the meeting.
ARTICLE II
Board of Directors
SECTION 1. General Powers. The property and business of the
Corporation shall be managed by the Board of Directors of the
Corporation.
<PAGE>
SECTION 2. Number and Term of Office. The number of directors
shall be three (3) or such other number, but not less than three (3)
nor more than twelve (12), as may be designated from time to time by
resolution of a majority of the entire Board of Directors. Provided,
however, that where there are one or two stockholders, the number of
directors may be less than three (3) but not less than the number of
stockholders. Directors need not be stockholders. The directors, all
of whom must be at least 18 years of age, shall be elected each year
at the annual meeting of stockholders, but if for any reason the
directors are not elected at the annual meeting of the stockholders,
they may be elected at any special meeting of the stockholders which
is called and held for that purpose, except as hereinafter provided,
and each director shall serve until his or her successor shall be
elected and shall qualify. At least one-fourth in number of the
directors of the Corporation shall be elected annually.
SECTION 3. Fillings of Vacancies. In the case of any vacancy in
the Board of Directors through death, resignation, disqualification,
removal or other cause, the remaining directors, by affirmative vote
of the majority thereof, though less than a quorum, may elect a
successor to hold office for the unexpired portion of the term of a
director whose place shall be vacant, and until the election of such
person's successor, or until such person shall be removed, prior
thereto by an affirmative vote of the holders of a majority of the
stock.
Similarly and in the event of the number of directors being
increased as provided in these Bylaws, the additional directors so
provided for shall be elected by the directors already in office, and
shall hold office until the next annual meeting of stockholders and
thereafter until such person's or persons' successors shall be
elected.
Any director may be removed from office with or without cause by
the affirmative vote or written consent of the holders of not less
than two-thirds of the stock issued and outstanding and entitled to
vote at any special meeting of stockholders regularly called for the
purpose.
SECTION 4. Place of Meeting. The Board of Directors may hold
their meetings and have one or more offices, and keep the books of
the Corporation, anywhere within the United States, at such place or
places as they may from time to time determine by resolution or by
written consent of all the directors. The Board of Directors may hold
their meetings by conference telephone or other similar electronic
communications equipment in accordance with the provisions of Nevada
Corporate Law.
SECTION 5. Regular Meetings. Regular meetings of the Board of
Directors may be held without notice at such time and place as shall
from time to time be determined by resolution of the Board, provided
that notice of every resolution of the Board fixing or changing the
time or place for the holding of regular meetings of the Board shall
be mailed to each director at least three (3) days before the first
<PAGE>
meeting held in pursuance thereof. The annual meeting of the Board of
Directors shall be held immediately following the annual
stockholders' meeting at which a Board of Directors is elected.
Any business may be transacted at any regular meeting of the Board.
SECTION 6. Special Meetings. Special meetings of the Board of
Directors shall be held whenever called by direction of the President
or Vice-President and must be called by the President or the
Secretary upon written request of a majority of the Board of
Directors, by mailing the same at least two (2) days prior to the
meeting, or by personal delivery, facsimile transmission,
telegraphing or telephoning the same on the day before the meeting,
to each director; but such notice may be waived by any director.
Unless otherwise indicated in the notice thereof, any and all
business may be transacted at any special meetings. At any meeting at
which every director shall be present, even though without notice,
any business may be transacted and any director may in writing waive
notice of the time, place and objects of any special meeting.
SECTION 7. Quorum. A majority of the whole number of directors
shall constitute a quorum for the transaction of business at all
meetings of the Board of Directors, but, if at any meeting less than
a quorum shall be present, a majority of those present may adjourn
the meeting from time to time, and the act of a majority of the
directors present at any meeting at which there is a quorum shall be
the act of the Board of Directors, except as may be otherwise
specifically provided by law or by the Corporation's Articles of
Incorporation or by these Bylaws.
SECTION 8. (Compensation of Directors. Directors shall not
receive any stated salary for their services as such but each
director shall be entitled to receive from the Corporation
reimbursement of the expenses incurred by such director in attending
any regular or special meeting of the Board, and, by resolution of
the Board of Directors, a fixed sum may also be allowed for
attendance at each regular or special meeting of the Board and such
reimbursement and compensation shall be payable whether or not an
adjournment be had because of the absence of a quorum. Nothing herein
contained shall be construed to preclude any director from serving
the Corporation in any other capacity and receiving compensation
therefor.
SECTION 9. Committees. The Board of Directors may, by resolution
passed by a majority of the whole Board, designate one or more
committees, each committee to consist of one or more of the directors
of the Corporation, which, to the extent provided in the resolution
or in the Bylaws of the Corporation, shall have and may exercise the
powers of the Board of Directors in the management of the business
and affairs of the Corporation, and may have the power to authorize
the seal of the Corporation to be affixed to all papers on which the
Corporation desires to place a seal. Such committee or committees
shall have such name or names as may be stated in the Bylaws of the
Corporation or as may be determined from time to time by resolution
adopted by the Board of Directors.
<PAGE>
ARTICLE III
Officers
SECTION 1. Election, Tenure, and Compensation. The officers of
the Corporation shall be a President, one or more Vice-Presidents (if
so elected by the Board of Directors), a Secretary, Treasurer and
such other officers as the Board of Directors from time to time may
consider necessary for the proper conduct of the business of the
Corporation. The officers shall be elected annually by the Board of
Directors at its first meeting following the annual meeting of the
stockholders. The President shall be a director and the other
officers may, but need not be, directors. Any two or more of the
above officers, except those of President and Vice President, may be
held by the same person, but no officer shall execute, acknowledge or
verify any instrument in more than one capacity if such instrument is
required by law or by these Bylaws to be executed, acknowledged or
verified by any two or more officers. The compensation or salary paid
all officers of the Corporation shall be fixed by resolutions adopted
by the Board of Directors. The Board of Directors shall also appoint
a Resident Agent who shall perform such duties, as may, from time to
time, be assigned to him or her by the Board of Directors.
SECTION 2. Removal; Vacancies. The Board of Directors shall, at
any regular or special meeting, have the power to fill a vacancy
occurring in any office for the unexpired portion of the term.
Except where otherwise expressly provided in a contract duly
authorized by the Board of Directors, all officers and agents of the
Corporation shall be subject to removal at any time by the
affirmative vote of a majority of the whole Board of Directors, and
all off officers, agents, and employees, other than officers
appointed by the Board of Directors, shall hold office at the
discretion of the Board of Directors or of the officers appointing
them.
SECTION 3. Powers and Duties of the Chair of the Board. The
Chair of the Board shall be a director of the Corporation. The Chair
shall preside at all meetings of the stockholders and of the Board of
Directors. The Chair and the President shall jointly supervise,
control and direct all of the business and affairs of the
Corporation; any dispute or conflict between the Chair and the
President (as to the question of the business and affairs of the
Corporation) shall be resolved by action of the Board of Directors.
The Chair shall have the authority to sign and execute in the name of
the Corporation all authorized deeds, contracts and other
instruments. In the absence of the President, or in the event of the
President's death, inability or refusal to act, the Chair shall have
the sole authority to supervise, control and direct all of the
business and affairs of the Corporation.
SECTION 4. Powers and Duties of the President. The President
shall be the chief executive officer of the Corporation and shall
have general charge and control of all its business affairs and
properties. The President shall preside at all meetings of the
stockholders and of the Board of Directors unless the Board of
<PAGE>
Directors shall, by a majority vote of a quorum thereof elect a chair
other than the President to preside at meetings of the Board of
Directors.
The President may sign and execute all authorized bonds,
contracts or other obligations in the name of the Corporation. The
President shall have the general powers and duties of supervision and
management usually vested in the office of President of a
Corporation. The President shall be ex-officio a member of all the
standing committees. The President shall do and perform such other
duties as may, from time to time, be assigned to him or her by the
Board of Directors.
SECTION 5. Powers and Duties of the Vice President. The Board of
Directors may elect one or more Vice Presidents. Any Vice President
(unless otherwise provided by resolution of the Board of Directors)
may sign and execute all authorized bonds, contracts, or other
obligations in the name of the Corporation. Each Vice President shall
have such other powers and shall perform such other duties as may be
assigned to such person by the Board of Directors or by the
President. In case of the absence or disability of the President, the
duties of that office shall be performed by any Vice President, and
the taking of any action by such Vice President in place of the
President shall be conclusive evidence of the absence or disability
of the President.
SECTION 6. Powers and Duties of the Secretary. The Secretary
shall give, or cause to be given, notice of all meetings of
stockholders and directors and all other notices required by law or
by these Bylaws, and in case of the Secretary's absence or refusal or
neglect to do so, any such notice may be given by any person
thereunto directed by the President or by the directors or
stockholders upon whose written requisi tion the meeting is called as
provided in these Bylaws. The Secretary shall record all the
proceedings of the meetings of the stockholders and of the directors
in books provided for that purpose, and shall perform such other
duties as may be assigned by the directors or the President. The
Secretary shall have custody of the seal of the Corporation and shall
affix the same to all instruments requiring it, when authorized by
the Board of Directors or the President, and attest the same. In
general, the Secretary shall perform all the duties generally
incident to the office of Secretary, subject to the control of the
Board of Directors and the President.
SECTION 7. Powers and Duties of the Treasurer. The Treasurer
shall have custody of all the funds and securities of the
Corporation, and shall keep full and accurate account of receipts and
disbursements in books belonging to the Corporation. The Treasurer
shall deposit all moneys and other valuables in the name and to the
credit of the Corporation in such depository or depositories as may
be designated by the Board of Directors.
<PAGE>
The Treasurer shall disburse the funds of the Corporation as may
be ordered by the Board of Directors, taking proper vouchers for such
disbursements. The Treasurer shall render to the President and the
Board of Directors, whenever either of them so requests, an account
of all such person's transactions as Treasurer and of the financial
condition of the Corporation.
The Treasurer shall give the Corporation a bond, if required by
the Board of Directors, in a sum, and with one or more sureties,
satisfactory to the Board of Directors, for the faithful performance
of the duties of such person's office and for the restoration to the
Corporation in case of such person's death, resignation, retirement
or removal from office of all books, papers, vouchers, moneys, and
other properties of whatever kind in the possession or under the
control of such person, and belonging to the Corporation.
The Treasurer shall perform all the duties generally incident to
the office of the Treasurer, subject to the control of the Board of
Directors and the President.
SECTION 8. Powers and Duties of the Assistant Secretary. The
Board of Directors may appoint an Assistant Secretary or more than
one Assistant Secretary. Each Assistant Secretary shall (except as
otherwise provided by resolution of the Board of Directors) have
power to perform all duties of the Secretary in the absence or
disability of the Secretary and shall have such other powers and
shall perform such other duties as may be assigned to such person by
the Board of Directors or the President. In case of the absence or
disability of the Secretary, the duties of the office shall be
performed by any Assistant Secretary, and the taking of any action by
any such Assistant Secretary in place of the Secretary shall be
conclusive evidence of the absence or disability of the Secretary.
SECTION 9. Powers and Duties of the Assistant Treasurer. The
Board of Directors may appoint an Assistant Treasurer or more than
one Assistant Treasurer. Each Assistant Treasurer shall (except as
otherwise provided by resolution of the Board of Directors) have
power to perform all duties of the Treasurer in the absence or
disability of the Treasurer and shall have such other powers and
shall perform such other duties as may be assigned to such person by
the Board of Directors or the President. In case of the absence or
disability of the Treasurer, the duties of the office shall be
performed by any Assistant Treasurer, and the taking of any action by
any such Assistant Treasurer in place of the Treasurer shall be
conclusive evidence of the absence or disability of the Treasurer.
ARTICLE IV
Capital Stock
SECTION 1. Issue of Certificates of Stock. The certificates for
shares of the stock of the Corporation shall be of such form not
inconsistent with the Certificate of Incorporation, or its
amendments, as shall be approved by the Board of Directors. All
certificates shall be signed by the President or by the Vice-
<PAGE>
President and countersigned by the Secretary or by an Assistant
Secretary, and sealed with the seal of the Corporation. All
certificates for each class of stock shall be consecutively numbered.
The name of the person owning the shares issued and the address of
the holder, shall be entered in the Corporation's books. All
certificates surrendered to the Corporation for transfer shall be
cancelled and no new certificates representing the same number of
shares shall be issued until the former certificate or certificates
for the same number of shares shall have been so surrendered, and
cancelled, unless a certificate of stock be lost or destroyed, in
which event another may be issued in its stead upon proof of such
loss or destruction and the giving of a satisfactory bond of
indemnity not exceeding an amount double the value of the stock. Both
such proof and such bond shall be in a form approved by the general
counsel of the Corporation and by the Transfer Agent of the
Corporation and by the Registrar of the stock.
SECTION 2. Transfer of Shares. Shares of the capital stock of
the Corporation shall be transferred on the books of the Corporation
only by the holder thereof in person or by the holder's attorney upon
surrender and cancellation of certificates for a like number of
shares as hereinbefore provided.
SECTION 3. Registered Stockholders. The Corporation shall be
entitled to treat the holder of record of any share or shares of
stock as the holder in fact thereof and accordingly shall not be
bound to recognize any equitable or other claim to or interest in
such share in the name of any other person, whether or not it shall
have express or other notice thereof, save as expressly provided by
the Laws of Nevada.
SECTION 4. Closing Transfer Books. The Board of Directors may
prescribe a period not exceeding sixty (60) days prior to any meeting
of the stockholders during which no transfer of stock on the books of
the Corporation may be made, or may fix a day not more than sixty
(60) days prior to the holding of any such meeting the day as of
which stockholders entitled to notice of and to vote at such meetings
shall be determined; and only stockholders of record on such day
shall be entitled to notice or to vote at such meeting.
ARTICLE V
Corporate Seal
SECTION 1. Seal. The corporate seal shall be circular in form
and shall have inscribed thereon the name of the Corporation and the
words "CORPORATE SEAL" and "NEVADA". Duplicate copies of the
corporate seal may be provided for use in the different offices of
the Corporation but each copy thereof shall be in the custody of the
Secretary of the Corporation or of an Assistant Secretary of the
Corporation nominated by the Secretary.
<PAGE>
ARTICLE VI
Bank Accounts and Loans
SECTION 1. Bank Accounts. Such officers or agents of the
Corporation as from time to time shall be designated by the Board of
Directors shall have authority to deposit any funds of the
Corporation in such banks or trust companies as shall from time to
time be designated by the Board of Directors and such officers or
agents as from time to time authorized by the Board of Directors may
withdraw any or all of the funds of the Corporation so deposited in
any bank or trust company, upon checks, drafts or other instruments
or orders for the payment of money, drawn against the account or in
the name or behalf of this Corporation, and made or signed by such
officers or agents; and each bank or trust company with which funds
of the Corporation are so deposited is authorized to accept, honor,
cash and pay, without limit as to amount, all checks, drafts or other
instruments or orders for the payment of money, when drawn, made or
signed by officers or agents so designated by the Board of Directors
until written notice of the revocation of the authority of such
officers or agents by the Board of Directors shall have been received
by such bank or trust company. There shall from time to time be
certified to the banks or trust companies in which funds of the
Corporation are deposited, the signature of the officers or agents of
the Corporation so authorized to draw against the same. In the event
that the Board of Directors shall fail to designate the persons by
whom checks, drafts and other instruments or orders for the payment
of money shall be signed, as hereinabove provided in this Section,
all of such checks, drafts and other instruments or orders for the
payment of money shall be signed by the President or a Vice President
and countersigned by the Secretary or Treasurer or an Assistant
Secretary or an Assistant Treasurer of the Corporation.
SECTION 2. Loans. Such officers or agents of the Corporation as from
time to time shall be designated by the Board of Directors shall have
authority to effect loans, advances or other forms of credit at any
time or times for the Corporation from such banks, trust companies,
institutions, corporations, firms or persons as the Board of
Directors shall from time to time designate, and as security for the
repayment of such loans, advances, or other forms of credit to
assign, transfer, endorse, and deliver, either originally or in
addition or substitution, any or all stock, bonds, rights, and
interests of any kind in or to stocks or bonds, certificates of such
rights or interests, deposits, accounts, documents covering
merchandise, bills and accounts receivable and other commercial paper
and evidences or debt at any time held by the Corporation; and for
such loans, advances, or other forms of credit to make, execute and
deliver one or more notes, acceptances or written obligations of the
Corporation on such terms, and with such provisions as to the
security or sale or disposition thereof as such officers or agents
shall deem proper; and also to sell to, or discount or rediscount
with, such banks, trust companies, institutions, corporations, firms
or persons any and all commercial paper, bills receivable,
acceptances and other instruments and evidences of debt at any time
held by the Corporation, and to that end to endorse, transfer and
deliver the same. There shall from time to time be certified to each
<PAGE>
bank, trust company, institution, corporation, firm or person so
designated the signature of the officers or agents so authorized; and
each bank, trust company, institution, corporation, firm or person is
authorized to rely upon such certification until written notice of
the revocation by the Board of Directors of the authority of such
officers or agents shall be delivered to such bank, trust company,
institution, corporation, firm or person.
ARTICLE VII
Miscellaneous Provisions
SECTION 1. Fiscal Year. The fiscal year of the Corporation shall
begin on the first day of January of each year.
SECTION 2. Notices. Whenever, under the provisions of these
Bylaws, notice is required to be given to any director, officer or
stockholder, unless otherwise provided in these Bylaws, such notice
shall be deemed given if in writing, and personally delivered, or
sent by telefax or telegram, or by mail, by depositing the same in a
post office or letter box, in a postpaid sealed wrapper, addressed to
each stockholder, officer or director, as the case may be, at such
address as appears on the books of the Corporation, and such notice
shall be deemed to be given at the time the same is so personally
delivered, telefaxed, telegraphed or so mailed. Any stockholder,
director or officer may waive any notice required to be given under
these Bylaws.
SECTION 3. Voting Upon Stocks. Unless otherwise ordered by the
Board of Directors, the President and the Vice President, or either
of them, shall have full power and authority on behalf of the
Corporation to attend and to vote and to grant proxies to be used at
any meetings of stockholders of any corporation in which the
Corporation may hold stock.
ARTICLE VIII
Amendment of Bylaws
The Board of Directors and the stockholders shall each have full
power to amend, alter or repeal these Bylaws, or any provision
thereof, and may from time to time make additional Bylaws. Any
amendment to the Bylaws by the stockholders shall be made at any
annual meeting as part of the general business of such meeting, or at
any special meeting provided there was stated in the notice of such
meeting given to the stockholders the substance of such proposed
alteration or repeal.
ARTICLE IX
Indemnification
SECTION 1. Definitions. As used in this Article IX, any word or
words that are defined in Section 78.751 of the Corporations;
Associations; Partnerships Article of the Nevada Revised Statutes
Annotated (the "Indemnification Section"), as amended from time to
time, shall have the same meaning as provided in the Indemnification
Section.
<PAGE>
SECTION 2. Indemnification of Directors and Officers. The
Corporation shall indemnify and advance expenses to a director or
officer of the Corporation in connection with a proceeding to the
fullest extent permitted by and in accordance with the
Indemnification Section.
SECTION 3. Indemnification of Other Agents and Employees. With
respect to an employee or agent, other than a director or officer of
the Corporation, the Corporation may, as determined by and in the
discretion of the Board of Directors of the Corporation, indemnify
and advance expenses to such employees or agents in connection with a
proceeding to the extent permitted by and in accordance with the
Indemnification Section.
END OF BYLAWS
<PAGE>
EXHIBIT 4.1
NUMBER SHARES
INCORPORATED UNDER THE LAWS OF THE STATE OF NEVADA
ADVANCED BIOTHERAPY CONCEPTS, INC.
Authorized 50,000,000 Common Shares, par value $0.001 Each
This Certifies that
is the registed owner of
Shares
ADVANCED BIOTHERAPY CONCEPTS, INC.
transferable only on the books of the Corporation by the holder
hereof in person or by Attorney upon surrender of this
Certificate properly endorsed.
IN WITNESS WHEREOF, the said Corporation has caused this
Certificate to be signed by its duly authorized officers and its
Corporate Seal to be hereunto affixed this _____ day of
_______________, ____ A.D.
____________________ Seal _________________________
Secretary President
<PAGE>
The following abbreviations, when used in the inscription on the
face of this certificate, shall be construed as though they were
written out in full according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as
tenants in common
UNIF GIFT MIN ACT - __________(Cust.) Custodian for
________(Minor)
Under Uniform Gifts to Minors
Act of ____________________ (State)
Additional abbreviations may also be used though not in the above
list.
For the value received _____________ hereby sell, assign and
transfer until
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF
ASSIGNEE
[ ]
Please print or type name and address of assignee
________________________________________
________________________________________
________________________________________ Shares
represented by the within Certificate, and do hereby irrevocably
constitute and appoint _______________________________________
Attorney to transfer the said stock on the books of the within
named Corporation, with full power of substitution in the
premises.
Dated _____________ ______
__________________________________
In presence of
______________________________
NOTICE: The signature to this assignment must correspond with
the name as written upon the face of the certificate in every
particular, without alteration or enlargement, or any change
whatever.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Statement of Financial Condition at December 31, 1998 Audited and
March 31, 1999 (Unaudited) and the Consolidated Statement of Income for the
year ended December 31, 1998 Audited and the three months ended March 31, 1999
(Unaudited) and is qualified in its entirety by reference to such financials.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> 3-MOS YEAR
<FISCAL-YEAR-END> DEC-31-1999 DEC-31-1998
<PERIOD-END> MAR-31-1999 DEC-31-1998
<CASH> 45,913 1,182
<SECURITIES> 0 0
<RECEIVABLES> 0 0
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 45,913 1,182
<PP&E> 0 0
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 130,160 86,9299
<CURRENT-LIABILITIES> 1,815,064 1,823,280
<BONDS> 0 0
0 0
0 0
<COMMON> 28,608 27,141
<OTHER-SE> (1,926,893) (1,976,873)
<TOTAL-LIABILITY-AND-EQUITY> 130,160 86,929
<SALES> 0 0
<TOTAL-REVENUES> 0 0
<CGS> 0 0
<TOTAL-COSTS> 21,709 260,314
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> (21,709) (259,912)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (21,673) (259,912)
<EPS-BASIC> (0.001) (0.01)
<EPS-DILUTED> 0 0
</TABLE>
