FORM 10-QSB
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
Quarterly Report Under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Quarterly Period Ended June 30, 2000
Commission File Number 33-55254-41
BIOETHICS, LTD.
(Exact name of registrant as specified in its charter)
Nevada 87-0485312
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
8092 South Juniper Court, South Weber, Utah 84405
(Address of principal executive offices)
(Zip Code)
(801) 476-8110
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
X Yes __ No
State the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date.
Class Outstanding as of July 10, 2000
Common Stock 11,000,000
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
BIOETHICS, LTD.
[A Development Stage Company]
UNAUDITED CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2000
2
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BIOETHICS, LTD.
[A Development Stage Company]
CONTENTS
PAGE
Accountants' Review Report 4
Unaudited Condensed Balance Sheets, June 30,
2000 and December 31, 1999 5
Unaudited Condensed Statements of Operations,
for the three and six months ended June 30,
2000 and 1999 and for the period from
inception on July 26,1990 through June 30,
2000 6
Unaudited Condensed Statements of Cash Flows,
for the six months ended June 30, 2000 and
1999 and for the period from inception on
July 26, 1990 through June 30, 2000 7
Notes to Unaudited Condensed Financial
Statements 8 - 10
3
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ACCOUNTANTS' REVIEW REPORT
Board of Directors
BIOETHICS, LTD.
South Weber, Utah
We have reviewed the accompanying condensed balance sheet of
Bioethics, LTD. (A Development Stage Company) as of June 30,
2000, and the related condensed statements of operations for the
three and six months ended June 30, 2000 and for the period from
inception on July 26, 1990 through June 30, 2000 and the
statements of cash flows for the six months ended June 30, 2000
and for the period from inception on July 26, 1990 through June
30, 2000. All information included in these financial statements
is the representation of the management of Bioethics, LTD.
We conducted our review in accordance with standards established
by the American Institute of Certified Public Accountants. A
review consists principally of inquiries of Company personnel and
analytical procedures applied to financial data. It is
substantially less in scope than an audit in accordance with
generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements
taken as a whole. Accordingly, we do not express such an
opinion.
Based on our review, we are not aware of any material
modifications that should be made to the condensed financial
statements reviewed by us, in order for them to be in conformity
with generally accepted accounting principles.
/s/ PRITCHETT, SILER & HARDY, P.C.
PRITCHETT, SILER & HARDY, P.C.
July 28, 2000
Salt Lake City, Utah
4
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BIOETHICS, LTD.
[A Development Stage Company]
CONDENSED BALANCE SHEETS
[Unaudited - See Accountants' Review Report}
ASSETS
June 30, December 31,
2000 1999
___________ ___________
CURRENT ASSETS:
Cash in bank $ 26,017 $ 29,804
___________ ___________
Total Current Assets 26,017 29,804
___________ ___________
$ 26,017 $ 29,804
____________ ____________
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 850 $ 670
___________ ___________
Total Current Liabilities 850 670
___________ ___________
STOCKHOLDERS' EQUITY:
Preferred stock, $.001 par value,
5,000,000 shares authorized,
0 shares issued and outstanding - -
Common stock, $.001 par value,
20,000,000 shares authorized,
11,000,000 shares issued and
outstanding 11,000 11,000
Capital in excess of par value 30,000 30,000
Deficit accumulated during the
development stage (15,833) (11,866)
___________ ___________
Total Stockholders' Equity 25,167 29,134
___________ ___________
$ 26,017 $ 29,804
____________ ____________
Note:The Balance Sheet as of December 31, 1999, was taken from the
audited financial statements at that date and condensed.
The accompanying notes are an integral part of these unaudited
condensed financial statements.
5
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BIOETHICS, LTD.
[A Development Stage Company]
CONDENSED STATEMENTS OF OPERATIONS
[Unaudited - See Accountants' Review Report]
For the Three For the Six From Inception
Months Ended Months Ended on July 26,
June 30, June 30, 1990 Through
__________________ ________________ June 30,
2000 1999 2000 1999 2000
________ ________ _______ _______ ___________
REVENUE: $ - $ - $ - $ - $ -
________ ________ _______ _______ ___________
EXPENSES:
General and
Administrative 850 1,107 3,967 3,399 15,833
________ ________ _______ _______ ___________
LOSS BEFORE INCOME
TAXES (850) (1,107) (3,967) (3,399) (15,833)
CURRENT TAX EXPENSE - - - - -
DEFERRED TAX EXPENSE - - - - -
________ ________ _______ _______ ___________
NET LOSS $ (850) $ (1,107) $(3,967) $(3,399) $ (15,833)
________ ________ _______ _______ ___________
LOSS PER COMMON
SHARE $ (.00) $ (.00) $ (.00) $ (.00) $ (.00)
________ ________ _______ _______ ___________
The accompanying notes are an integral part of these unaudited condensed
financial statements.
6
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BIOETHICS, LTD.
[A Development Stage Company]
CONDENSED STATEMENTS OF CASH FLOWS
[Unaudited - See Accountants' Review Report]
For the Six From Inception
Months Ended on July 26,
June 30, 1990 Through
__________________ June 30,
2000 1999 2000
________ ________ ___________
Cash Flows From Operating
Activities:
Net loss $ (3,967) $ (3,399) $ (15,833)
Adjustments to reconcile net loss to
net cash used by operating
activities:
Stock issued for services - - -
Changes is assets and liabilities:
Increase (Decrease) in accounts
payable 180 (714) 850
________ ________ ___________
Net Cash Provided (Used) by
Operating Activities (3,787) (4,113) (14,983)
________ ________ ___________
Cash Flows From Investing
Net Cash Provided by Investing
Activities - - -
________ ________ ___________
Cash Flows From Financing
Activities:
Proceeds from issuance of common
stock - - 41,000
________ ________ ___________
Net Cash Provided by Financing
Activities - - 41,000
________ ________ ___________
Net Increase (decrease) in Cash (3,787) (4,113) 26,017
Cash at Beginning of Period 29,804 35,564 -
________ ________ ___________
Cash at End of Period $ 26,017 $ 31,451 $ 26,017
________ ________ ___________
Supplemental Disclosures of Cash Flow
Information:
Cash paid during the period for:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
Supplemental Schedule of Noncash Investing and Financing
Activities:
For the periods ended June 30, 2000 and 1999
None
The accompanying notes are an integral part of these financial
statements.
7
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BIOETHICS, LTD.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - Bioethics, Ltd. (the Company) was organized under
the laws of the State of Nevada on July 26, 1990. The Company
has not yet generated significant revenues from its planned
principal operations and is considered a development stage
company as defined in SFAS No. 7. The Company was organized to
provide a vehicle for participating in potentially profitable
business ventures which may become available through the personal
contacts of, and at the complete discretion of, the Company's
officers and directors. The Company has, at the present time,
not paid any dividends and any dividends that may be paid in the
future will depend upon the financial requirements of the Company
and other relevant factors.
Condensed Financial Statements - The accompanying financial
statements have been prepared by the Company without audit. In
the opinion of management, all adjustments (which include only
normal recurring adjustments) necessary to present fairly the
financial position, results of operations and cash flows at June
30, 2000 and 1999 and for the periods then ended have been made.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted.
It is suggested that these condensed financial statements be read
in conjunction with the financial statements and notes thereto
included in the Company's December 31, 1999 audited financial
statements. The results of operations for the periods ended June
30, 2000 are not necessarily indicative of the operating results
for the full year.
Loss Per Share - The computation of loss per share is based on
the weighted average number of shares outstanding during the
period presented in accordance with statement of Financial
Accounting Standards No. 128, "Earnings Per Share" [See Note 6].
Cash and Cash Equivalents - For purposes of the statement of cash
flows, the Company considers all highly liquid debt investments
purchased with a maturity of three months or less to be cash
equivalents.
Accounting Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities, the disclosures of
contingent assets and liabilities at the date of the financial
statements, and the reported amount of revenues and expenses
during the reported period. Actual results could differ from
those estimated.
Recently Enacted Accounting Standards - Statement of Financial
Accounting Standards (SFAS) No. 132, "Employer's Disclosure about
Pensions and Other Postretirement Benefits", SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities",
SFAS No. 134, "Accounting for Mortgage-Backed Securities.", SFAS
No. 135 "Rescission of FASB Statement No. 75 and Technical
Corrections", SFAS No. 136, "Transfers of Assets to a not for
profit organization or charitable trust that raises or holds
contributions for others, " and SFAS No. 137, " Accounting for
Derivative Instruments and Hedging Activities - deferral of the
effective date of FASB Statement No. 133 (an amendment of FASB
Statement No. 133)," were recently issued. SFAS No. 132, 133,
134, 135, 136, and 137 have no current applicability to the
Company or their effect on the financial statements would not
have been significant.
8
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BIOETHICS, LTD.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 2 - COMMON STOCK
During July 1990, in connection with its organization, the
Company issued 1,000,000 shares of its previously authorized, but
unissued common stock. Total proceeds from the sale of stock
amounted to $1,000 (or $.001 per share).
During May 1998, the Company issued 10,000,000 shares of its
previously authorized, but unissued common stock. Total proceeds
from the sale of stock amounted to $40,000 (or $.004 per share).
The issuance of common stock resulted in a change in control of
the Company [See Note 5].
NOTE 3 - INCOME TAXES
The Company accounts for income taxes in accordance with
Statement of Financial Accounting Standards No. 109 "Accounting
for Income Taxes". FASB 109 requires the Company to provide a
net deferred tax asset/liability equal to the expected future tax
benefit/expense of temporary reporting differences between book
and tax accounting methods and any available operating loss or
tax credit carryforwards. At June 30, 2000, the Company has
available unused operating loss carryforwards of approximately
$15,800, which may be applied against future taxable income and
which expire in 2005 through 2020.
The amount of and ultimate realization of the benefits from the
operating loss carryforwards for income tax purposes is
dependent, in part, upon the tax laws in effect, the future
earnings of the Company, and other future events, the effects of
which cannot be determined. Because of the uncertainty
surrounding the realization of the loss carryforwards the Company
has established a valuation allowance equal to the tax effect of
the loss carryforwards and, therefore, no deferred tax asset has
been recognized for the loss carryforwards. The net deferred tax
assets are approximately $5,300 as of June 30, 2000, with an
offsetting valuation allowance at each period end of the same
amount resulting in a change in the valuation allowance of
approximately $1,400 during the six months ended June 30, 2000.
NOTE 4 - RELATED PARTY TRANSACTIONS
Management Compensation - The Company has not paid any
compensation to its officers and directors.
Office Space - The Company has not had a need to rent office
space. An officer/shareholder of the Company is allowing the
Company to use his home as a mailing address, as needed, at no
expense to the Company.
NOTE 5 - CHANGES IN CONTROL
During May 1998, the Company raised $40,000 through the sale of
10,000,000 shares of common stock. The shares sold represent
approximately ninety-one percent (91%) of the outstanding shares
of common stock of the Company resulting in a change in control
of the Company. The proceeds from the stock sale will be used to
pay for legal and accounting fees and for management to search
for possible business opportunities. The former officers and
directors of the Company resigned and an individual holding
approximately 23% of the outstanding common stock was appointed
as the sole member of the Board of Directors of the Company and
as the new President, Chief Executive Officer, Chief Financial
Officer, and Secretary/Treasurer of the Company.
9
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BIOETHICS, LTD.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 6 - EARNINGS (LOSS) PER SHARE
The following data show the amounts used in computing income
(loss) per share and the effect on income and the weighted
average number of shares of dilutive potential common stock for
the periods presented:
For the Three For the Six From Inception
Months Ended Months Ended on July 26,
June 30, June 30, 1990 Through
_____________________ ___________________ June 30,
2000 1999 2000 1999 2000
__________ __________ __________ __________ __________
Income (loss)
available to
common
stockholders
used in income
(loss) per share
(Numerator) $ (850)$ (1,107)$ (3,967)$ (3,399) $ (15,833)
__________ __________ __________ __________ __________
Weighted average
number of common
shares outstanding
used in earnings
per share during
the period
(Denominator) 11,000,000 11,000,000 11,000,000 11,000,000 3,180,866
__________ __________ __________ __________ __________
Dilutive earnings per share was not presented, as the Company had
no common equivalent shares for all periods presented that would
effect the computation of diluted earnings (loss) per share.
10
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Item 2. Management's Discussion and Analysis or Plan of
Operation.
The following discussion and analysis provides information
which management believes is relevant to an assessment and
understanding of the Company's consolidated results of operations
and financial condition. The discussion should be read in
conjunction with the consolidated financial statements and notes
thereto.
Plan of Operation
The Company has no business operations, and very limited
assets or capital resources. The Company's business plan is to
seek one or more potential business ventures that, in the opinion
of management, may warrant involvement by the Company. The
Company recognizes that because of its limited financial,
managerial and other resources, the type of suitable potential
business ventures which may be available to it will be extremely
limited. The Company's principal business objective will be to
seek long-term growth potential in the business venture in which
it participates rather than to seek immediate, short-term
earnings. In seeking to attain the Company's business objective,
it will not restrict its search to any particular business or
industry, but may participate in business ventures of essentially
any kind or nature. It is emphasized that the business objectives
discussed are extremely general and are not intended to be
restrictive upon the discretion of management.
The Company will not restrict its search for any specific
kind of firms, but may participate in a venture in its
preliminary or development stage, may participate in a business
that is already in operation or in a business in various stages
of its corporate existence. It is impossible to predict at this
stage the status of any venture in which the Company may
participate, in that the venture may need additional capital, may
merely desire to have its shares publicly traded, or may seek
other perceived advantages which the Company may offer. In some
instances, the business endeavors may involve the acquisition of
or merger with a corporation which does not need substantial
additional cash but which desires to establish a public trading
market for its common stock.
The Company does not have sufficient funding to meet its
anticipated cash needs. The current sole officer and director has
expressed his intent to borrow funds to the extent possible, to
fund the costs of operating the Company until a suitable business
venture can be completed. Management does not anticipate raising
funds during the next twelve months through the sale of
securities. There is no assurance that the Company will be able
to successfully identify and/or negotiate a suitable potential
business venture or raise additional funding.
The Company has experienced net losses during the
development stage (July 3, 1990 to present) and has had no
significant revenues during such period. During the past two
fiscal years the Company has had no business operations. In light
of these circumstances, the ability of the Company to continue as
a going concern is significantly in doubt. The attached financial
statements do not include any adjustments that might result from
the outcome of this uncertainty.
Forward-Looking Statements
When used in this Form 10-Q or other filings by the Company
with the Securities and Exchange Commission, in the Company's
press releases or other public or shareholder communications, or
in oral statements made with the approval of an authorized
officer of the Company's executive officers, the words or phrases
"would be", "will allow", "intends to", "will likely result",
"are expected to", "will continue", "is anticipated", "estimate",
"project", or similar expressions are intended to identify
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995.
The Company cautions readers not to place undue reliance
on any forward-looking statements, which speak only as of the
date made, and advises readers that forward-looking statements
involve various risks and uncertainties. The Company does not
undertake, and specifically disclaims any obligation to update
any forward-looking statements to reflect occurrences or
unanticipated events or circumstances after the date of such
statement.
11
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 2. Changes in Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to Vote of Securityholders.
None.
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K.
(a)
INDEX TO EXHIBITS
EXHIBIT DESCRIPTION OF EXHIBIT
NO.
3(i).1 Articles of Incorporation of the Company
(Incorporated by reference to Exhibit 3(i).1 of the
Company's Form 10-Q, dated June 30, 1998).
3(ii).1 Bylaws of the Company (Incorporated by reference to
Exhibit 3(ii).1 of the Company's Form 10-Q, dated
June 30, 1998).
27 Financial Data Schedule
(b) Reports on Form 8-K:
None.
SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BIOETHICS, LTD.
Date: August 11, 2000 By /s/ Mark J. Cowan
Mark J. Cowan
President, Chief Executive
Officer, Chief Financial
Officer and Director
12
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EXHIBIT 27.1
(Financial Data Schedule)
Financial Data Schedule
For the Six Month Period Ended June 30, 2000
BioEthics, Ltd.
