U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934.
For the quarterly
period ended May 31, 2015
[_] TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
For the transition
period from ____________________ to ___________________.
Commission File Number 0-15482
ONCOLOGIX TECH, INC.
(Name of Small Business Issuer as Specified
in Its Charter)
| Nevada |
|
86-1006416 |
| (State or other jurisdiction of incorporation or organization |
|
(I.R.S. Employer Identification No.) |
| |
|
|
| 1604 W. Pinhook Drive #200, Lafayette, LA |
|
70508 |
| (Address of principal executive offices) |
|
Zip Code |
| |
|
|
| |
|
|
| Registrant’s Telephone Number, Including Area Code: (616) 977-9933 |
| |
Check 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.
Yes [X] No [_]
Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X]
No [_]
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions
of “large accelerated filer”, “accelerated filer”, and “smaller reporting company” in Rule
12b-2 of the Exchange Act.
Large accelerated
Filer [_] Accelerated Filer [_]
Non-accelerated Filer [_] Smaller
Reporting Company [X]
Indicate by check mark whether
the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes [_] No
[X]
Indicate the number of shares outstanding of each of the
issuer’s classes of common stock, as of the latest practicable date.
| Class |
|
Outstanding at July 3, 2015 |
| Common Stock, $0.001 par value |
|
340,126,946 |
EXPLANATORY
NOTE
This amendment to the
Current Report on Form 10-Q filed by Oncologix Tech, Inc. (the “Company”) with the Security and
Exchange Commission on July 20, 2015 is filed solely to correct the following error: 1) The reclassification of a $100,000
convertible note from accounts payable and accrued expenses.
| TABLE OF CONTENTS |
|
| |
|
| PART I. FINANCIAL INFORMATION |
|
| |
|
| ITEM 1. Financial Statements |
|
| |
|
| Condensed Consolidated Balance Sheets as of May 31, 2015 (Unaudited) and August 31, 2014 |
4 |
| |
|
| Condensed Consolidated Statements of Operations (Unaudited) for the three and nine month periods |
|
| ended May 31, 2015 and 2014 |
5 |
| |
|
| Condensed Consolidated Statements of Cash Flows (Unaudited) for the nine month period |
|
| ended May 31, 2015 |
6 |
| |
|
| Notes to Condensed Consolidated Financial Statements (Unaudited) |
7 |
| |
|
| ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations |
46 |
| |
|
| ITEM 3. Quantitative and Qualitative Disclosure about Market Risk |
50 |
| |
|
| ITEM 4. Controls and Procedures |
50 |
| |
|
| PART II. OTHER INFORMATION |
|
| |
|
| ITEM 1. Legal Proceedings |
51 |
| |
|
| ITEM 1A. Risk Factors |
51 |
| |
|
| ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds |
55 |
| |
|
| ITEM 3. Defaults Upon Senior Securities |
60 |
| |
|
| ITEM 4. Mine Safety Disclosures |
60 |
| |
|
| ITEM 5. Other Information |
60 |
| |
|
| ITEM 6. Exhibits |
60 |
| |
|
| Signatures |
61 |
FORWARD LOOKING STATEMENTS
There are certain statements
within this Report that are not historical facts. These statements contained herein are based on current expectations that involve
a number of known and unknown risks and uncertainties. These statements can be identified by the use of forward-looking terminology
such as “believes,” “expects,” “may,” “will,” “should,” or “anticipates,”
or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks
and uncertainties. No assurances can be given that the future results indicated, whether expressed or implied, will be achieved.
The risk factors disclosed in Item 1A “Risk Factors” of Part II of this Quarterly Report on Form 10-Q and in Part I
– Item 1A of our Annual Report on Form 10-K for the year ended August 31, 2014, include all known risks our management believes
could materially affect the results described by forward-looking statements contained in this Report. However, those risks may
not be the only risks we face. Our business, operations, and financial performance could also be affected by additional factors
that are not presently known to us or that we currently consider to be immaterial to our operations. In addition, new risks may
emerge from time to time that may cause actual results to differ materially from those contained in any forward-looking statements.
We believe that the forward-looking statements contained in this Report are reasonable. However, given these risks and uncertainties,
we cannot provide you with any guarantee that the anticipated results will be achieved. We disclaim any obligation to update or
revise information contained in any forward-looking statement to reflect development or information after the date this Report
is filed with the Securities Exchange Commission.
Throughout this report,
unless otherwise indicated by the context, references herein to the “Company”, “Oncologix”, “OCLG”,
“we”, our” or “us” means Oncologix Tech, Inc.., a Nevada corporation and its corporate subsidiaries
and predecessors. September 1, 2014 to August 31, 2015 means “fiscal 2015 and September 1, 2013 to August 31, 2014 means
“fiscal 2014”.
PART I: FINANCIAL INFORMATION
ITEM 1. Financial Statements
ONCOLOGIX TECH, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
| | |
|
| |
|
| | |
|
May 31, | |
August 31, |
| | |
|
2015 | |
2014 |
| | |
|
(Unaudited) | |
|
| ASSETS |
|
|
|
|
|
|
|
|
|
| Current Assets: | |
|
| | | |
| | |
| Cash and cash equivalents | |
|
$ | 120,485 | | |
$ | 17,504 | |
| Accounts receivable (net of allowance of $71,000 and $9,000) | |
|
| 1,037,009 | |
|
|
213,399 |
|
| Inventory | |
|
| 137,436 | | |
| 31,271 | |
| Prepaid expenses and other current assets | |
|
| 15,911 | |
|
|
9,307 |
|
| Prepaid commissions and finders' fees | |
|
| 3,974 | |
|
|
3,152 |
|
| | |
|
| | | |
| | |
| Total current assets | |
|
| 1,314,815 | | |
| 274,633 | |
| | |
|
| | | |
| | |
| Property and equipment (net of accumulated depreciation | |
|
| | |
| of $38,026 and $28,264) | |
|
| 35,246 | | |
| 39,967 | |
| Deposits and other assets | |
|
| 77,678 | | |
| 14,582 | |
| Goodwill | |
|
| 2,404,389 | | |
| 1,781,779 | |
| Patents, registrations (net of amortization of $102,576 and $97,983) | |
|
| 19,903 | |
|
|
24,497 |
|
| | |
|
| | | |
| | |
| Total assets | |
|
$ | 3,852,031 | | |
$ | 2,135,458 | |
| | |
|
| | | |
| | |
| LIABILITIES AND STOCKHOLDERS' DEFICIT | |
|
| | |
|
|
|
|
| Current liabilities: | |
|
| | | |
| | |
| Convertible notes payable (net of discount of $405,429 and $99,491) | |
|
$ | 477,596 | |
|
$ |
436,308 |
|
| Notes payable (net of discount of $2,091 and $18,596) | |
|
| 2,377,667 | |
|
|
946,104 |
|
| Notes payable - related parties | |
|
| — | |
|
|
51,600 |
|
| Inventory finance agreements | |
|
| 417,000 | |
|
|
— |
|
| Accounts payable and other accrued expenses | |
|
| 1,087,319 | |
|
|
732,934 |
|
| Accrued interest payable | |
|
| 208,736 | | |
| 148,681 | |
| Accrued interest payable - related parties | |
|
| — | |
|
|
6,342 |
|
| Current portion of long term debt | |
|
| 96,644 | |
|
|
82,532 |
|
| | |
|
| | | |
| | |
| Total current liabilities | |
|
| 4,664,962 | |
|
|
2,404,501 |
|
| | |
|
| | | |
| | |
| Long-term liabilities: | |
|
| | | |
| | |
| Notes payable (net of current portion) | |
|
| 376,037 | |
|
|
395,675 |
|
| Convertible notes payable | |
|
| — | |
|
|
— |
|
| | |
|
| | | |
| | |
| Total long-term liabilities | |
|
| 376,037 | |
|
|
395,675 |
|
| | |
|
| | | |
| | |
| Total liabilities | |
|
| 5,040,999 | | |
| 2,800,176 | |
| | |
|
| | | |
| | |
| Stockholders' Deficit: | |
|
| | | |
| | |
| Series A Preferred stock, par value $.001 per share; 10,000,000 shares | |
|
| |
|
|
|
| |
| authorized; 129,062 and 129,062 shares issued and outstanding at | |
|
| | |
|
|
|
|
| May 31, 2015 and August 31, 2014, respectively | |
|
| 129 | |
|
|
129 |
|
| Series D Preferred stock, par value $.001 per share; 10,000,000 shares | |
|
| | |
|
|
|
|
| authorized; 78,564 and 78,564 shares issued and outstanding at | |
|
| | |
|
|
|
|
| May 31, 2015 and August 31, 2014, respectively | |
|
| 79 | |
|
|
79 |
|
| Common stock, par value $.001 per share; 750,000,000 shares authorized; | |
|
| | |
|
|
|
|
| 276,746,130 and 134,600,152 shares issued and outstanding at | |
|
| | |
|
|
|
|
| May 31, 2015 and August 31, 2014, respectively | |
|
| 276,746 | |
|
|
134,600 |
|
| Additional paid-in capital | |
|
| 48,398,569 | | |
| 47,565,869 | |
| Accumulated deficit | |
|
| (49,864,491 | ) | |
| (48,370,395 | ) |
| Common stock subscribed (0 and 1,058,201 shares issuable, respectability at May 31, 2015 and August 31, 2014) | |
|
| — | |
|
|
5,000 |
|
| | |
|
| | | |
| | |
| Total stockholders' deficit | |
|
| (1,188,968 | ) |
|
|
(664,718 |
) |
| | |
|
| | | |
| | |
| Total liabilities and stockholders' deficit | |
|
$ | 3,852,031 | |
|
|
2,135,458 |
|
| | |
|
| | | |
| | |
| | |
|
| | | |
| | |
See accompanying notes to unaudited condensed
consolidated financial statements.
ONCOLOGIX TECH, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS
OF OPERATIONS
| | |
For the Three Months Ended | |
For the Nine Months Ended |
| | |
May 31, | |
May 31, | |
May 31, | |
May 31, |
| | |
2015 | |
2014 | |
2015 | |
2014 |
| | |
| |
| |
| |
|
| Revenues | |
$ | 1,235,656 | | |
$ | 988,385 | | |
$ | 3,625,407 | | |
$ | 2,696,776 | |
| | |
| | | |
| | | |
| | | |
| | |
| Cost of revenues | |
| 885,596 | | |
| 788,757 | | |
| 2,628,797 | | |
| 2,066,800 | |
| | |
| | | |
| | | |
| | | |
| | |
| Gross profit | |
| 350,060 | | |
| 199,628 | | |
| 996,610 | | |
| 629,976 | |
| | |
| | | |
| | | |
| | | |
| | |
| Operating expenses: | |
| | | |
| | | |
| | | |
| | |
| General and administrative | |
| 443,889 | | |
| 276,950 | | |
| 1,379,769 | | |
| 999,910 | |
| Research and development expense | |
| — | | |
| — | | |
| 10,000 | | |
| — | |
| Depreciation and amortization | |
| 5,022 | | |
| 5,664 | | |
| 14,356 | | |
| 17,156 | |
| | |
| | | |
| | | |
| | | |
| | |
| Total operating expenses | |
| 448,911 | | |
| 282,614 | | |
| 1,404,125 | | |
| 1,017,066 | |
| | |
| | | |
| | | |
| | | |
| | |
| Loss from operations | |
| (98,851 | ) | |
| (82,986 | ) | |
| (407,515 | ) | |
| (387,090 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Other income (expense): | |
| | | |
| | | |
| | | |
| | |
| Acquisition costs | |
| | | |
| | | |
| — | | |
| — | |
| Interest and finance charges | |
| (437,908 | ) | |
| (167,474 | ) | |
| (1,090,013 | ) | |
| (634,833 | ) |
| Interest and finance charges - related parties | |
| — | | |
| (791 | ) | |
| (1,051 | ) | |
| (18,056 | ) |
| Loss on conversion of notes payable - related parties | |
| — | | |
| (62,151 | ) | |
| — | | |
| (155,728 | ) |
| Loss on disposal of assets | |
| — | | |
| — | | |
| — | | |
| (28,748 | ) |
| Other income (expenses) | |
| 11,321 | | |
| 74,450 | | |
| 4,483 | | |
| 72,062 | |
| | |
| | | |
| | | |
| | | |
| | |
| Total other income (expense) | |
| (426,587 | ) | |
| (155,966 | ) | |
| (1,086,581 | ) | |
| (765,303 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Loss from continuing operations | |
| (525,438 | ) | |
| (238,952 | ) | |
| (1,494,096 | ) | |
| (1,152,393 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Discontinued operations | |
| | | |
| | | |
| | | |
| | |
| Operating loss from discontinued operations | |
| — | | |
| — | | |
| — | | |
| (36 | ) |
| Gain on disposal of discontinued operations | |
| — | | |
| — | | |
| — | | |
| 95,564 | |
| | |
| | | |
| | | |
| | | |
| | |
| | |
| | | |
| | | |
| | | |
| | |
| Gain from discontinued operations | |
| — | | |
| — | | |
| — | | |
| 95,528 | |
| | |
| | | |
| | | |
| | | |
| | |
| Less loss attributable to noncontrolling interest | |
| — | | |
| — | | |
| — | | |
| — | |
| | |
| | | |
| | | |
| | | |
| | |
| Net gain from discontinued operations | |
| — | | |
| — | | |
| — | | |
| 95,528 | |
| | |
| | | |
| | | |
| | | |
| | |
| Net loss before income taxes | |
| (525,438 | ) | |
| (238,952 | ) | |
| (1,494,096 | ) | |
| (1,056,865 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Income taxes | |
| — | | |
| — | | |
| — | | |
| — | |
| | |
| | | |
| | | |
| | | |
| | |
| Net loss attributable to common shareholders | |
$ | (525,438 | ) | |
$ | (238,952 | ) | |
$ | (1,494,096 | ) | |
$ | (1,056,865 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Gain (loss) per common share, basic and diluted: | |
| | | |
| | | |
| | | |
| | |
| Continuing operations | |
$ | (0.00 | ) | |
$ | (0.00 | ) | |
$ | (0.01 | ) | |
$ | (0.01 | ) |
| Discontinued operations | |
| — | | |
| — | | |
| — | | |
| 0.00 | |
| | |
| | | |
| | | |
| | | |
| | |
| | |
$ | (0.00 | ) | |
$ | (0.00 | ) | |
$ | (0.01 | ) | |
$ | (0.01 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Weighted average number of shares | |
| | | |
| | | |
| | | |
| | |
| outstanding - basic and diluted | |
| 242,589,170 | | |
| 112,247,396 | | |
| 187,353,653 | | |
| 93,925,094 | |
See accompanying notes to unaudited condensed
consolidated financial statements.
ONCOLOGIX TECH, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS
| | |
For the Nine Months Ended |
| | |
May 31, | |
May 31, |
| | |
2015 | |
2014 |
| Operating activities: | |
| | | |
| | |
| Net loss | |
$ | (1,494,097 | ) | |
$ | (1,056,865 | ) |
| | |
| | | |
| | |
| Net gain from discontinued operations | |
| — | | |
| (95,528 | ) |
| | |
| | | |
| | |
| Net loss from continuing operations | |
| (1,494,097 | ) | |
| (1,152,393 | ) |
| | |
| | | |
| | |
| Adjustments to reconcile net loss to net cash used | |
| | | |
| | |
| in operating activities: | |
| | | |
| | |
| Depreciation and amortization | |
| 14,356 | | |
| 17,156 | |
| Loss on disposal of property and equipment | |
| — | | |
| 28,748 | |
| Stock based compensation | |
| — | | |
| 91,163 | |
| Amortization of discount on notes payable and warrants | |
| 334,437 | | |
| 18,021 | |
| Beneficial conversion feature notes payable | |
| — | | |
| 139,823 | |
| Loss on conversion of notes payable - related parties | |
| — | | |
| 155,729 | |
| Induced conversion expense notes payable | |
| 66,520 | | |
| — | |
| Non-cash interest charges | |
| 218,415 | | |
| — | |
| Issuance of stock and warrants for fees | |
| 78,100 | | |
| 302,658 | |
| | |
| | | |
| — | |
| Changes in operating assets and liabilities: | |
| | | |
| | |
| Accounts receivable | |
| (250,480 | ) | |
| (125,813 | ) |
| Prepaid expenses and other current assets | |
| (5,829 | ) | |
| (2,686 | ) |
| Prepaid commissions and finders' fees | |
| (737 | ) | |
| — | |
| Deposits and other assets | |
| (52,545 | ) | |
| (43,700 | ) |
| Accounts payable and other accrued expenses | |
| 626,654 | | |
| 6,691 | |
| Accrued interest payable - related parties | |
| (6,342 | ) | |
| (60,192 | ) |
| Accrued interest payable | |
| 80,578 | | |
| 83,424 | |
| | |
| | | |
| | |
| Net operating cash flows - continuing operations | |
| (390,970 | ) | |
| (546,190 | ) |
| | |
| | | |
| | |
| Net operating cash flows - discontinued operations | |
| — | | |
| 95,528 | |
| | |
| | | |
| | |
| Net cash used in operating activities | |
| (390,970 | ) | |
| (450,662 | ) |
| | |
| | | |
| | |
| Investing activities: | |
| | | |
| | |
| Purchase of property and equipment | |
| (2,033 | ) | |
| (878 | ) |
| Cash acquired from Amian Health Services | |
| — | | |
| 8,646 | |
| Acquisition of Amian Health Services | |
| — | | |
| (75,000 | ) |
| Acquisition of Esteemcare and Affordable | |
| (560,984 | ) | |
| — | |
| | |
| | | |
| | |
| Net cash used in investing activities | |
| (563,017 | ) | |
| (67,232 | ) |
| | |
| | | |
| | |
| Financing activities: | |
| | | |
| | |
| Proceeds from issuance of convertible notes | |
| 596,250 | | |
| 719,933 | |
| Proceeds from issuance of notes payable | |
| 1,933,000 | | |
| 655,128 | |
| Proceeds from the issuance of common stock | |
| — | | |
| 10,000 | |
| Repayment of notes payable | |
| (918,975 | ) | |
| (490,798 | ) |
| Repayment of notes payable - related parties | |
| (51,600 | ) | |
| (4,600 | ) |
| Repayment of inventory financing agreements | |
| (335,608 | ) | |
| — | |
| Repayment of convertible notes payable | |
| (166,099 | ) | |
| (224,845 | ) |
| | |
| | | |
| | |
| Net cash provided by financing activities | |
| 1,056,968 | | |
| 664,818 | |
| | |
| | | |
| | |
| Net increase (decrease) in cash and cash equivalents | |
| 102,981 | | |
| 146,924 | |
| | |
| | | |
| | |
| Cash and cash equivalents, beginning of period | |
| 17,504 | | |
| 39,456 | |
| | |
| | | |
| | |
| Cash and cash equivalents, end of period | |
$ | 120,485 | | |
$ | 186,380 | |
See accompanying notes to unaudited condensed
consolidated financial statements.
ONCOLOGIX TECH, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
NOTE 1
- ORGANIZATION AND DESCRIPTION OF THE COMPANY
Oncologix Tech, Inc. is
a diversified medical holding company with operating segments in medical device, healthcare services and medical products and technologies.
We operate and manufacture Class II medical device products, deliver Personal Healthcare Services and provide Home Medical Equipment
(HME) and Durable Medical Equipment (DME) sales in licensed markets. For its clients, Oncologix provides FDA approved medical devices,
State licensed healthcare services and medical product sales. For its shareholders, Oncologix operates profitable business divisions
that build, maintain and nourish shareholder value. The Company’s corporate mission is to be the best small cap medical device
and healthcare services holding company in North America.
We were originally formed
in 1995 and in 2000 we changed our name to "BestNet Communications Corp." At that time we provided worldwide long distance
telephone communication and teleconferencing services to commercial and residential consumers through the internet, which we disposed
of in 2007 due to lack of profitability. In July 2006 we changed our business model to medical device products. In July 2006
we acquired JDA Medical Technologies, Inc. ("JDA") and merged this business into Oncologix Corporation, our wholly owned
subsidiary. On January 22, 2007, we changed our name to Oncologix Tech, Inc., to reflect this new business model. Our business
at this time was the development of a medical device for brachytherapy (radiation therapy), called the “Oncosphere”
(or “Oncosphere System”), for the advanced medical treatment of soft tissue cancers. Due to a lack of funding, we suspended
these development activities on December 31, 2007. On November 1, 2013, due to the development of the brachytherapy device being
several years away, indication that the product could not be marketed and no guarantee of FDA approvals, it was determined that
continued financial support of this product by Oncologix Corporation would cost the Company substantial capital beyond its
means and the Company’s management and Board of Directors disposed of Oncologix Corporation and its Brachytherapy medical
device subsidiary. Furthermore, as part of the disposal, the Company was relieved of over $90,000 in debt.
On March 22, 2013, we acquired
all the outstanding stock of Dotolo Research Corporation (“Dotolo”), a FDA Registered, Class II, medical device manufacturer
with 25 years of product sales in the hydro-colonic irrigation, bowel preparation market. Dotolo Research Corporation began operations
in 1989 and sells hardware and disposable products to a customer base of over 900+ customers both domestically and internationally.
The Company currently operates in a limited, but competitive environment in hydro-colonic irrigation, of which there are only four
(4) companies approved by the FDA to manufacture a Class II medical device for colonic-hydro therapy. Since the acquisition,
we have not had significant revenues from sales of our products, including sales to medical facilities due to a lack of operating
capital needed to procure raw material inventory to currently fill customers’ orders. We are currently in the final phase
of new product hardware redesign which we believe will allow Dotolo Research the ability to successfully enter into the medical
markets to become the dominate market leader.
On August 1, 2013, we acquired
the outstanding stock of Angels of Mercy, Inc. (“AOM”). Angels provides non-medical, Personal Care Attendant (PCA)
services, Supervised Independent Living (SIL), Long-Term Senior Care, and other approved health service programs performed by a
trained caregiver that will meet the health service needs of beneficiaries whose disabilities preclude the performance of certain
independent living skills related to the activities of daily living (ADL). We changed the name to Amian Angels Inc. (“Amian”)
in August 2014.
On December 10, 2013, Angels
of Mercy, Inc. acquired the assets of Amian Health Services LLC and Amian Health Services of Alex LLC, herein after referred to
as “Amian”. Amian delivers health-care care-services who provide routine health and personal care support
with Activities of Daily Living (ADL) to clients with physical impairments or disabilities in private homes, nursing care facilities,
hospice care settings, and other residential settings. Amian holds both PCA-Medicaid Waiver Provider and Residential Rehabilitation/Supervised
Independent Living (SIL), and personal care services for Veterans with licenses issued by the Division of Licensing and Certification
of the Department of Social Services, Veterans Administration Social Services and the Louisiana Department of Health and Hospitals.
All administrative personnel of Amian have been merged to gain operating synergies.
On July 21, 2014 we formed
Advanced Medical Products and Technologies Inc. (“AMPT”) to enter into the Durable Medical and Home Medical Equipment
markets. We anticipate acquiring active companies in this area to develop our Medical Products and Technologies Segment.
ONCOLOGIX TECH, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
On
September 25, 2014, we acquired the outstanding stock of Esteemcare, Inc. and its wholly owned subsidiary Affordable Medical Equipment
Solutions, Inc. Esteemcare, Inc is a Durable and Home Medical equipment and supply distributor for respiratory therapy and is accredited
by the “Joint Commission on Healthcare Organizations”. Esteemcare targets patients with sleep obstructive disorders
or related chronic illnesses who are insured by Medicare, Medicaid, third-party insurers, or have the ability to pay for our products
from their own private resources. Sleep apnea is a serious sleep disorder that occurs when a person's breathing is interrupted
during sleep. People with untreated sleep apnea stop breathing repeatedly during their sleep, sometimes hundreds of times. This
means the brain -- and the rest of the body -- may not get enough oxygen.
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
BASIS OF PRESENTATION
In the opinion of management,
the accompanying balance sheets and related interim statements of income, cash flows, and stockholders' equity include all adjustments,
consisting only of normal recurring items, necessary for their fair presentation in conformity with accounting principles generally
accepted in the United States of America ("U.S. GAAP"). Preparing financial statements requires management to make estimates
and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Actual results and outcomes may
differ from management's estimates and assumptions. Interim results are not necessarily indicative of results for a full year.
PRINCIPLES OF CONSOLIDATION
The unaudited consolidated
financial statements for the three and nine months ended May 31, 2015 and 2014 include the accounts of Oncologix Tech, Inc. and
its wholly owned subsidiaries, Dotolo Research Corporation (“Dotolo”), Amian Angels, Inc. (“Amian”), Advanced
Medical Products & Technologies Inc. (“AMPT”), Esteemcare Inc. and Affordable Medical Equipment Solutions Inc.
(collectively “Esteemcare”) Dotolo and Amian are Louisiana Corporations. AMPT is a Nevada corporation. Esteem &
Affordable are South Carolina corporations. All significant intercompany accounts and transactions have been eliminated in consolidation.
USE OF ESTIMATES
The preparation of financial
statements in accordance with accounting principles generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reportable amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
SEGMENT INFORMATION
ASC 280-10 defines operating
segments as components of a company about which separate financial information is available that is evaluated regularly by the
Company’s Chief Executive Officer and Chief Financial Officer in deciding how to allocate resources and in assessing performance.
The Company currently has three business segments; medical device manufacturing (Dotolo), personal care services (Amian) and medical
products and technologies (AMPT and Esteem & Affordable.
REVENUE RECOGNITION
Revenue is recognized by
the Company in accordance with Accounting Standards Codification Topic (“ASC”) 605. Accordingly, revenue is recognized
when all the following criteria are met: persuasive evidence of an arrangement exists; delivery has occurred; the seller’s
price to the buyer is fixed and determinable; and collectability is reasonably assured. Currently, the primary revenue for the
Company is derived from its sales in its Personal Care Services and Medical Products and Technologies Segments’.
ONCOLOGIX TECH, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
Amian is reimbursed for
each approved “Unit of Service” provided, as determined by the Health Care Financing Administration (HCFA), the Department
of Health & Hospitals and the Department of Social Services and based upon a detailed Case Management, Plan of Care for each
beneficiary. A unit of service for PCA services will be one-half hour. At least fifteen (15) minutes of service must be provided
to the individual in order for Amian Angels to bill for a unit of service. A maximum of 1,825 hours (3,650 half-hour units) per
beneficiary, per year can be billed under the Medicaid waiver program. Our primary payer sources is the State of Louisiana, the
Department of Veterans Administration and Private Pay individuals who reimburse us for the services we provide. We currently experience
a two percent claims rejection rate. With the acquisition of Amian, Amian Angels now has private pay clients as well as Veterans
Administration Social Services clients.
Esteemcare recognizes revenue
related to product sales upon delivery to customers provided that we have received and verified any written documentation required
to bill Medicare, other government agencies, third-party payers, and patients. For product shipments for which we have not yet
received the required written documentation, revenue recognition is delayed until the period in which those documents are collected
and verified. We record revenue at the amounts expected to be collected from government agencies, other third-party payers, and
from patients directly. Government and insurance payers’ generally require patient compliance with product usage. Accordingly,
most pay for the product purchases over a multi-month plan, generally 10 to 13 months. We record these revenues as received since
the transfer of ownership is not guaranteed until the full purchase price is paid to us. We record, if necessary, contractual adjustments
equal to the difference between the reimbursement amounts defined in the fee schedule and the revenue recorded per the billing
system. These adjustments are recorded as a reduction of both gross revenues and accounts receivable. We analyze various factors
in determining revenue recognition, including a review of specific transactions, current Medicare regulations and reimbursement
rates, historical experience and the credit-worthiness of patients. Medicare reimburses at 80% of the government-determined prices
for reimbursable supplies, and we bill the remaining balance to either third-party payers or directly to patients.
CASH AND CASH EQUIVALENTS
The Company considers all
highly liquid instruments, with an initial maturity of three (3) months or less to be cash equivalents.
ACCOUNTS RECEIVABLE
The Company’s receivables
in its medical device segment are subject to credit risk, and the Company typically does not require collateral on its accounts
receivable. Receivables are generally due within 30 days. The Company maintains an allowance for uncollectable receivables that
reduces the receivables to amounts that are expected to be collected. .
The lead time for account
receivables in our Personal Care service divisions ranges from 14 to 90 days. The majority of the Company’s receivables,
approximately 90%, are collected within 14 days. We bill the State of Louisiana on a weekly basis and are reimbursed two weeks
later via electronic funds transfer. We are able to resubmit any rejected claims an additional two times to Molina Healthcare,
the EDI payment provider for payments within the next twelve months. Currently we maintain an allowance for uncollectible receivables
at a rejection rate of 2% of outstanding receivables. We analyze our claim rejection rate on a quarterly basis and make quality
improvements to reduce the number of rejected claims. Private pay customers are billed semi-monthly. Generally collections occur
within 30 days. Veterans Administration (VA) customers are billed monthly. Generally collections occur within 45 to 60 days. Due
to the recent governmental shutdown, the current lead time for payments is approximately 90 days. Upon final rejection of any resubmitted
claims, the claims are resubmitted and after twelve months the receivables are written off to bad debt expense.
ONCOLOGIX TECH,
INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
Our medical products and
technologies accounts receivable are generally due from Medicare, Medicaid, private insurance companies, and our private patients.
Accounts receivable are reported net of allowances for contractual adjustments and uncollectible accounts. The collection process
is time consuming, complex and typically involves the submission of claims to multiple layers of payers whose payment of claims
may be contingent upon the payment of another payer. As a result, our collection efforts may be active for up to 18 to 24 months
from the initial billing date. In accordance with regulatory requirements, we make reasonable and appropriate efforts to collect
our accounts receivable, including deductible and co-payment amounts, in a manner consistent for all classes of payers.
INVENTORY
Inventories are stated
at cost and are held on a first-in, first-out basis. Our inventory in our medical device segment consists primarily of miscellaneous
hardware parts. Our inventory in our medical products and technologies segment consists of masks, CPAP machines, BiPAP machines
and other necessary breathing equipment and supplies.
PROPERTY AND EQUIPMENT
Property and equipment
is recorded at cost. Depreciation is provided for on the straight-line method over the estimated useful lives of the related assets
as follows:
| Furniture and fixtures |
5 to 10 years |
| Computer equipment |
5 years |
| Equipment |
5 to 10 years |
| Software |
3 to 5 years |
The cost of maintenance
and repairs is charged to expense in the period incurred. Expenditures that increase the useful lives of assets are capitalized
and depreciated over the remaining useful lives of the assets. When items are retired or disposed of, the cost and accumulated
depreciation are removed from the accounts and any gain or loss is included in income.
LONG-LIVED ASSETS
ASC
360 – Property, Plant and Equipment addresses financial accounting and reporting for the impairment or disposal of long-lived
assets. The Company periodically evaluates whether events and circumstances have occurred that may warrant revision of the estimated
useful life of property and equipment or whether the remaining balance of property and equipment, or other long-lived assets, should
be evaluated for possible impairment. Instances that may lead to an impairment include: (i) a significant decrease in the
market price of a long-lived asset group; (ii) a significant adverse change in the extent or manner in which a long-lived
asset or asset group is being used or in its physical condition; (iii) a significant adverse change in legal factors or in
the business climate that could affect the value of a long-lived asset or asset group, including an adverse action or assessment
by a regulatory agency; (iv) an accumulation of costs significantly in excess of the amount originally expected for the acquisition
or construction of a long-lived asset or asset group; (v) a current-period operating or cash flow loss combined with a history
of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived
asset or asset group; or (vi) a current expectation that, more likely than not, a long-lived asset or asset group will be
sold or otherwise disposed of significantly before the end of its previously estimated useful life.
An estimate of the related
undiscounted cash flows, excluding interest, over the remaining life of the property and equipment and long-lived assets is used
in assessing recoverability. Impairment loss is measured by the amount which the carrying amount of the asset(s) exceeds the fair
value of the asset(s). The Company primarily employs two methodologies for determining the fair value of a long-lived asset: (i) the
amount at which the asset could be bought or sold in a current transaction between willing parties or (ii) the present value
of estimated expected future cash flows grouped at the lowest level for which there are identifiable independent cash flows.
ONCOLOGIX TECH, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
GOODWILL AND OTHER INTANGIBLE ASSETS
The
Company adopted Accounting Standards Update 2011-08 “Intangibles – Goodwill and Other (Topic 350): Testing Goodwill
for Impairment (“ASU 2011-08”) in the fourth quarter of fiscal 2014 due to its recent acquisition of Dotolo Research
Corporation and Angels of Mercy, Inc. ASU 2011-08 permits an entity to first assess qualitative factors to determine whether it
is more likely that not that the fair value of a reporting unit is less than its carrying amount. Goodwill represents the excess
of the cost of a business combination over the fair value of the net assets acquired and these costs are subject to annual impairment
tests.
We
accounted for the acquisition of Dotolo, Amian and Esteemcare using the acquisition method of accounting under ASC 805 and ASC
810-10-65. The purchase price was allocated first to identifiable current then fixed assets as well as liabilities assumed. We
then earmarked identifiable intangibles, with the remainder to goodwill. We identified patents as our identifiable asset for Dotolo
Research Corporation. Amounts allocated to Goodwill for the acquisition of Dotolo are based on expanding our product into the medical
market and the potential upside of the sale with a FDA medical device product with a reimbursement code. Dotolo is one of four
companies worldwide with an FDA approved, Class II medical device product. Amounts allocated to goodwill for Amian and Esteemcare
are based on increased clients and future revenues.
The
Company evaluates the recoverability of its indefinite lived intangible assets, which consist of Dotolo, Amian and Esteemcare,
based on estimates of future royalty payments that are avoided through its ownership of the intangibles and patents, discounted
to their present value. In determining the estimated fair value of the intangibles and patents, management considers current and
projected future levels of revenue based on its plans for Dotolo, business trends, prospects and market and economic conditions.
See Note 4 – Acquisitions for further information on the acquisition of Dotolo.
We
follow the two step process in ASC 350-20-35 for impairment testing. In the first step we compare the fair value of the reporting
unit as a whole to its carrying value, including goodwill. For both reporting units, we have determined that the reporting units’
fair value exceeds its carrying value. We also compare the carrying value of goodwill by itself for both reporting units.
The following explains
the results of our impairment testing. We have allocated $564,075 of goodwill to the Amian Angels, Inc. reporting unit. As of May
31, 2015 the fair value exceeds the carrying value of goodwill by 39%. We have allocated $1,217,704 of goodwill to the reporting
unit Dotolo Research Corporation. As of May 31, 2015 the fair value exceeds the carrying value of goodwill by 18%. We have allocated
$622,610 of goodwill the Esteemcare reporting unit. As of May 31, 2015 the fair value exceeds the carrying value of goodwill by
47%. In calculating the valuation, we used a discounted cash flow method based on the future 5 years cash flows of each reporting
unit. We used a discount rate of 8% which is currently higher that the current long term interest rate. An increase in the overall
national interest rate could have a negative impact on our valuation. An additional risk is the possibility of cash flow projections
falling short of our 5 year estimate amount.
ADVERTISING COSTS
Advertising costs included
with selling, general and administrative expenses in the accompanying consolidated statements of operations were minimal for the
three and nine months ended May 31, 2015 and 2014. Such costs are expensed as incurred.
ONCOLOGIX TECH,
INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
INCOME TAXES
The Company adopted the
provisions of FASB ASC 740 - Income Taxes provides detailed guidance for the financial statement recognition, measurement and disclosure
of uncertain tax positions recognized in the financial statements. Income taxes are determined using the asset and liability method.
This method gives consideration to the future tax consequences associated with temporary differences between the carrying amounts
of assets and liabilities for financial statement purposes and the amounts used for income tax purposes.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The estimated fair values
for financial instruments are determined at discrete points in time based on relevant market information. These estimates involve
uncertainties and cannot be determined with precision. The carrying amounts of accounts payable, accrued expenses, and notes payable
approximate fair value.
STOCK-BASED COMPENSATION
The
Company has a stock-based compensation plan, which is described more fully in Note 12. The Company accounts for stock-based compensation
in accordance with ASC 718. Under the fair value recognition provisions of this statement, share-based compensation cost is measured
at the grant date based on the fair value of the award and is recognized as expense over the vesting period. The Company estimates
the fair value of stock options granted using the Black-Scholes option valuation model. The fair value of all awards is amortized
on a straight-line basis over the vesting periods. The expected term of awards granted represent the period of time they are expected
to be outstanding. The Company determines the expected term based on historical experience with similar awards, giving consideration
to the contractual terms and vesting schedules. The Company estimates the expected volatility of its common stock at the date of
grant based on the historical volatility of its common stock. The risk-free interest rate is based on the U.S. treasury security
rate estimated for the expected life of the options at the date of grant. If actual results differ significantly from estimates,
stock-based compensation could be impacted.
INVENTORY FINANCING AGREEMENTS
Our inventory finance agreements
consist of qualified for-sale equipment purchases. Qualifying inventory purchases are grouped into a 12 month finance agreements
allowing the company to spread the payments for this inventory over a twelve month period. All inventory finance agreements are
interest free and consist of only minor fees for setup.
CONVERTIBLE DEBT
Interest on convertible
debt is calculated using the simple interest method. The company recognizes a beneficial conversion feature to the extent the conversion
price is less than the closing stock price on the issuance of the convertible notes. The Company also follows ASC 470-50 and ASC
470-20 regarding changes in the terms of the convertible notes and the induced conversion of its convertible debt.
RECLASSIFICATIONS
Certain prior year amounts
have been reclassified to conform to the current year presentation.
STOCK INCENTIVE PLANS
Share based payment compensation
costs for equity-based awards are measured on the grant date based on the fair value of the award on that date and is recognized
over the required service period. The fair-value of stock option awards is estimated using the Black-Scholes model. Fair value
of restricted stock awards is based upon the quoted market price of the common stock on the date of grant.
ONCOLOGIX TECH, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
NET LOSS PER COMMON SHARE
Basic earnings (loss) per
share is calculated under the provisions of ASC 260 which provides for calculation of “basic” and “diluted”
earnings per share. Basic earnings per share includes no dilution and is calculated by dividing income (loss) available to
common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per
share is calculated based on the weighted average number of common shares outstanding during the period plus the dilutive effect
of common stock purchase warrants and stock options using the treasury stock method and the dilutive effects of convertible notes
payable and convertible preferred stock using the if-converted method. On Basic and diluted earnings per share for the three and
nine months ended May 31, 2015 and 2014 are as follows:
| | |
For the Three Months Ended | |
For the Nine Months Ended |
| | |
May 31, | |
May 31, | |
May 31, | |
May 31, |
| | |
2015 | |
2014 | |
2015 | |
2014 |
| | |
| |
| |
| |
|
| | |
| |
| |
| |
|
| Net gain (loss) attributable to common shareholders | |
| | | |
| | | |
| | | |
| | |
| Continuing operations | |
$ | (525,438 | ) | |
$ | (238,952 | ) | |
$ | (1,494,096 | ) | |
$ | (1,152,393 | ) |
| Discontinued operations | |
| — | | |
| — | | |
| — | | |
| 95,528 | |
| | |
| | | |
| | | |
| | | |
| | |
| | |
| | | |
| | | |
| | | |
| | |
| | |
$ | (525,438 | ) | |
$ | (238,952 | ) | |
$ | (1,494,096 | ) | |
$ | (1,056,865 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Weighted average shares outstanding | |
| 242,589,170 | | |
| 112,247,396 | | |
| 187,353,653 | | |
| 93,925,094 | |
| | |
| | | |
| | | |
| | | |
| | |
| Loss per common shares, basis and diluted | |
| | | |
| | | |
| | | |
| | |
| Continuing operations | |
$ | (0.00 | ) | |
$ | (0.00 | ) | |
$ | (0.01 | ) | |
$ | (0.01 | ) |
| Discontinued operations | |
| — | | |
| — | | |
| — | | |
| 0.00 | |
| | |
| | | |
| | | |
| | | |
| | |
| | |
| | | |
| | | |
| | | |
| | |
| | |
$ | (0.00 | ) | |
$ | (0.00 | ) | |
$ | (0.01 | ) | |
$ | (0.01 | ) |
Due to the net losses during
the three and nine months ended May 31, 2015 and 2014, basic and diluted loss per share was the same, as the effect of potentially
dilutive securities would have been anti-dilutive. Shares attributable to convertible notes, stock options, preferred stock and
warrants not included the diluted loss per share calculation. Below lists securities dilutive within 90 days of May 31, 2015 and
2014:
| |
|
|
|
|
|
As of |
| |
|
|
|
|
|
May 31, |
|
May 31, |
| |
|
|
|
|
|
2015 |
|
2014 |
| |
|
|
|
|
|
Underlying |
|
Underlying |
| Description |
Common Shares |
|
Common Shares |
| Convertible preferred stock |
78,564,000 |
|
22,500,000 |
| Convertible notes
payable |
210,272,886 |
|
81,383,460 |
| Options |
6,173,750 |
|
6,186,250 |
| Warrants |
21,000,000 |
|
26,583,333 |
| |
|
|
|
|
|
|
|
|
| Total potentially dilutive securities |
316,010,636 |
|
136,653,043 |
ONCOLOGIX TECH, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
SEGMENT INFORMATION
ASC 280-10 defines operating
segments as components of a company about which separate financial information is available that is evaluated regularly by the
Company’s Chief Executive Officer and Chief Financial Officer in deciding how to allocate resources and in assessing performance.
The Company currently has three business segments; medical device manufacturing, personal care services and medical products and
technologies.
RECENT ACCOUNTING PRONOUNCEMENTS
We have evaluated all Accounting
Standards Updates through the date the financial statements were issued and do not believe any will have a material impact.
New Accounting Standard
In July 2012, the Financial
Accounting Standards Board (“FASB”) issued Accounting Standards Update 2012-02 “Intangibles – Goodwill
and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment” (“ASU 2012-02”). ASU 2012-02
permits entities to first assess qualitative factors to determine whether it is more likely than not that the fair value of an
indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment
test. Under the amendments in ASU 2012-02, an entity is not required to calculate the fair value of an indefinite-lived intangible
asset unless it determines that it is more likely than not that the fair value of the asset is less than its carrying amount. An
entity also will have the option to bypass the qualitative assessment for any indefinite-lived intangible asset in any period and
proceed directly to performing the quantitative impairment test. ASU 2012-02 is effective for interim and annual indefinite-lived
intangible asset impairment tests performed for fiscal years beginning on or after September 15, 2012, with early adoption permitted.
The Company’s adoption of ASU 2012-02 is not expected to have an impact on its consolidated financial statements.
NOTE 3 - GOING CONCERN
The
accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company
has incurred losses from operations over the past several years and anticipates additional losses in fiscal 2015 and prior to achieving
breakeven.
During
the year ended August 31, 2013 we acquired Dotolo Research Corporation and Angels of Mercy, Inc. In December 2013, through Amian
Angels, we also acquired the assets of Amian Health Services and changed the company’s name to Amian Angels Inc. In September
2014 we acquired Esteemcare Inc. and Affordable Medical Equipment Solutions Inc. While these acquisitions greatly increase the
value of our Company, the combined operations of OCLG are not cash flow positive at this time. Amian and Esteemcare are currently
cash flow positive but alone is unable to support all the corporate overhead or needs of our other subsidiary, Dotolo. We anticipate
that we will require approximately $1,000,000 to operate through December 31, 2015. Approximately $500,000 will be required to
fund corporate overhead including debt servicing with the balance to invest into raw material inventory, manufacturing and new
product development at Dotolo Research as well as beginning business with AMPT. Additional funding will allow us to meet our current
sales demands and expenses of Dotolo, Amian Angels and Oncologix, while keeping our public filings current.
Our
Company is not profitable and we have to rely on debt and equity financings to fund operations. There is no assurance that the
business activities of Dotolo will achieve breakeven status by the end of 2015. Significant delays in achieving break-even status
could affect the ability to obtain future debt and equity funding. These factors raise substantial doubt about the Company’s
ability to continue as a going concern. After auditing our financial statements, our independent auditor issued a going concern
opinion and our ability to continue is dependent on our ability to raise additional capital. Currently there is a substantial doubt
in the Company’s ability to continue as a going concern.
ONCOLOGIX TECH, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
NOTE 4 – ACQUISITIONS
Amian Health Services
On December 10, 2013, our
subsidiary Angels of Mercy acquired the assets of Amian Health Services. Pursuant to the Agreement, the Owners sold all the assets
for $100,000 represented by a down payment of $75,000 at closing and a one year Secured Promissory Note for $25,000.
The acquisition was accounted
for using the acquisition method of accounting and the purchase price was allocated to the assets acquired and liabilities assumed
based upon their estimated fair values at the date of acquisition. Identifiable intangible assets include patents and purchased
goodwill.
The purchase price was
allocated to assets acquired and liabilities assumed as follows:
| |
|
|
|
|
|
|
|
| Cash and cash equivalents |
|
$ 8,646 |
| Property and equipment |
|
6,000 |
| Purchased goodwill |
|
|
85,354 |
| |
|
|
|
|
|
|
|
| |
Total assets acquired |
|
$ 100,000 |
On September 25, 2014,
we acquired all the outstanding shares of Esteemcare Inc. and its wholly owned subsidiary, Affordable Medical Equipment Solutions
Inc. in exchange for a $400,000 down payment, $100,000 note and payoff of $173,433 in operating leases.
The acquisition was accounted
for using the acquisition method of accounting and the purchase price was allocated to the assets acquired and liabilities assumed
based upon their estimated fair values at the date of acquisition. Identifiable intangible assets include patents and purchased
goodwill.
The purchase price was
allocated to assets acquired and liabilities assumed as follows:
| Cash and cash equivalents |
|
$ 12,449 |
| Accounts receivable (net) |
|
573,130 |
| Inventory |
|
|
|
|
106,165 |
| Prepaid expenses and other current assets |
860 |
| Property and equipment |
|
3,008 |
| Deposits and other assets |
|
10,551 |
| Purchased goodwill |
|
|
622,610 |
| |
|
|
|
|
|
|
|
| |
Total assets acquired |
|
$ 1,328,773 |
| |
|
|
|
|
|
|
|
| Accounts payable and other accrued expenses |
$ 454,877 |
| Inventory financing agreements |
125,463 |
| Notes payable |
|
|
|
75,000 |
| |
|
|
|
|
|
|
|
| |
Total liabilities assumed |
$ 655,340 |
ONCOLOGIX TECH, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
NOTE 5 – DISCONTINUED
OPERATIONS
During October 2013 the
Company’s management and Board of Directors determined to dispose of Oncologix Corporation its Brachytherapy medical device
subsidiary. On November 1, 2013, the company entered into a settlement agreement with Firetag, Stoss & Dowdell, PC., our former
attorneys. Per the terms of the settlement agreement, we exchanged our 90% ownership and executed a $50,000 promissory note payable
to Firetag in exchange for the forgiveness by Firetag of $145,522 in prior legal billings. The promissory note bears interest at
4% and requires 12 monthly payments of $4,257.49 beginning on December 1, 2013. Detailed below are the income and expenses related
to these discontinued operations:
| | |
For the Three Months Ended | |
For the Nine Months Ended |
| | |
May 31, | |
May 31, | |
May 31, | |
May 31, |
| | |
2015 | |
2014 | |
2015 | |
2014 |
| Operating expenses: | |
| | | |
| | | |
| | | |
| | |
| General and administrative | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | 36 | |
| Depreciation and amortization | |
| — | | |
| — | | |
| — | | |
| — | |
| | |
| | | |
| | | |
| | | |
| | |
| Total operating expenses | |
| — | | |
| — | | |
| — | | |
| 36 | |
| | |
| | | |
| | | |
| | | |
| | |
| Loss from operations | |
| — | | |
| — | | |
| — | | |
| (36 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Other income (expense): | |
| | | |
| | | |
| | | |
| | |
| | |
| | | |
| | | |
| | | |
| | |
| Total other income (expense) | |
| — | | |
| — | | |
| — | | |
| — | |
| | |
| | | |
| | | |
| | | |
| | |
| Loss from discontinued operations | |
| — | | |
| — | | |
| — | | |
| (36 | ) |
| Gain on disposal of discontinued operations | |
| — | | |
| — | | |
| — | | |
| 95,564 | |
| | |
| | | |
| | | |
| | | |
| | |
| Loss from discontinued operations | |
| — | | |
| — | | |
| — | | |
| 95,528 | |
| | |
| | | |
| | | |
| | | |
| | |
| Less loss attributable to noncontrolling interest | |
| — | | |
| — | | |
| — | | |
| — | |
| | |
| | | |
| | | |
| | | |
| | |
| Net loss from discontinued operations | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | 95,528 | |
NOTE 6 – INVENTORY
We have inventory, on hand
in the amounts of $137,436 and $31,271 as of May 31, 2015 and 2014, respectively. Our inventory as of May 31, 2015 relates to our
medical device manufacturing segment. Inventories at May 31, 2015 also included $106,165 related to our medical products and technologies
division. Our inventory in our medical device segment consists primarily of miscellaneous parts. Our inventory in our medical products
and technologies segment consists primarily of disposable products such as masks, oxygen tubing, and other breathing equipment
supplies. We also hold minor amounts of CPAP machines and BiPAP machines. Our machine purchases are generally set up on a Just-in-time
order system. We do not maintain any inventory for our personal service care segment or our medical products division. We are currently
in the redesign and final bench testing phase of our Toxygen hardware system and disposable products. The new hardware design will
position Dotolo Research with a unique technological advantage in the medical markets.. Currently, inventory on hand is made up
of miscellaneous Toxygen hardware parts, custom tooling and molds.
ONCOLOGIX TECH, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
NOTE 7 - PROPERTY AND EQUIPMENT
Property
and equipment is composed of the following at May 31, 2015 and August 31, 2014
| | |
May 31, | |
August 31, |
| | |
2015 | |
2014 |
| Furniture | |
$ | 14,118 | | |
$ | 12,688 | |
| Office Equipment | |
| 13,625 | | |
| 12,962 | |
| Computers | |
| 24,409 | | |
| 22,321 | |
| Software | |
| 3,497 | | |
| 3,497 | |
| Leasehold improvements | |
| — | | |
| — | |
| Equipment | |
| 17,623 | | |
| 16,763 | |
| | |
| | | |
| | |
| Total property and equipment at cost | |
| 73,272 | | |
| 68,231 | |
| | |
| | | |
| | |
| Less: accumulated depreciation and amortization | |
| (38,026 | ) | |
| (28,264 | ) |
| | |
| | | |
| | |
| | |
$ | 35,246 | | |
$ | 39,967 | |
NOTE 8
– OFFICE LEASES
The Company leases office
space in Alexandria and Lafayette Louisiana and in West Columbia and Charleston SC. Alexandria is on a three year lease; Lafayette
a five year lease; West Columbia has one year remaining on its lease; and Charleston is on a three year lease. On March 28, 2014,
Dotolo Research moved from its current manufacturing location in Phoenix AZ into E&R Engineer manufacturing facilities located
in Tempe, AZ. Rent expense for the three months ended May 31, 2015 and 2014 were $36,527 and $19,178, respectively. Rent expense
for the nine months ended May 31, 2015 and 2014 were $112,055 and $64,680, respectively. Following are the minimum lease payments:
| |
|
| 2015 |
$ 33,495 |
| 2016 |
126,424 |
| 2017 |
114,808 |
| 2018 |
42,448 |
| |
|
| |
|
| Totals |
$ 317,175 |
NOTE 9 – GOODWILL, PATENTS AND OTHER
INTANGIBLE ASSETS
We currently carry our
patents and registrations net of amortization. As of May 31, 2015 and 2014, the Company has a capitalized cost of patents and registrations
in the amount of $122,479 and accumulated amortization of 102,576. Our patents and registrations are amortized over a 20 year period.
Amortization for each of the next 4 fiscal years, assuming no impairment, will be $6,124 per year.
ONCOLOGIX TECH, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
NOTE 10 – INVENTORY FINANCE AGREEMENTS
Our inventory finance agreements
consist of qualified for-sale inventory purchases. These finance agreements are held solely by Esteemcare. Qualifying inventory
purchases are grouped into a 12 month finance agreements allowing the company to spread the payments for this inventory over a
twelve month period. This allows the company to collect payments for the purchases of that inventory over that time period as most
insurance plans spread the purchase payments over a multi-month period, generally 10 to 13 months. All inventory finance agreements
are interest free and consist of only minor fees for setup. Below is a listing of our outstanding inventory finance agreements
as of May 31, 2015 and 2014 as well as the monthly payment on each agreement.
| | |
As of May 31, | |
|
| | |
2015 | |
2014 | |
Monthly Payment |
| Wells Fargo (017) | |
$ | 8,331 | | |
$ | — | | |
$ | 4,165 | |
| VGM (322) | |
| 23,787 | | |
| — | | |
| 5,947 | |
| Wells Fargo (018) | |
| 24,694 | | |
| — | | |
| 6,174 | |
| VGM (323) | |
| 32,106 | | |
| — | | |
| 5,351 | |
| DLL (61942) | |
| 90,781 | | |
| — | | |
| 11,348 | |
| DLL (67910) | |
| 31,389 | | |
| — | | |
| 3,488 | |
| VGM (324) | |
| 32,512 | | |
| — | | |
| 3,612 | |
| DLL (68936) | |
| 11,263 | | |
| — | | |
| 1,126 | |
| Wells Fargo (019) | |
| 76,459 | | |
| — | | |
| 6,951 | |
| VGM (325) | |
| 85,680 | | |
| — | | |
| 7,140 | |
| DLL (61649) | |
| — | | |
| | | |
| 1,126 | |
| | |
| | | |
| | | |
| | |
| | |
| | | |
| | | |
| | |
| Outstanding leases | |
$ | 417,001 | | |
$ | — | | |
$ | 56,428 | |
ONCOLOGIX TECH, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
NOTE 11 — NOTES PAYABLE
CONVERTIBLE NOTES PAYABLE:
Convertible notes payable consist of the following
as of May 31, 2015 and 2014:
The following is a summary
of future minimum payments on convertible notes payable as of May 31, 2015:
| Ref. | |
| |
May 31, | |
May 31, |
| Numb. | |
Description | |
2015 | |
2014 |
| | 2210 | | |
Conv. Note Payable (net of discount) | |
$ | 64,025 | | |
$ | 235,025 | |
| | 2218 | | |
Conv. Note Payable (net of discount) | |
$ | — | | |
$ | 100,000 | |
| | 2232 | | |
Conv. Note Payable (net of discount) | |
$ | — | | |
$ | (567 | ) |
| | 2238 | | |
Conv. Note Payable (net of discount) | |
$ | — | | |
$ | 5,300 | |
| | 2239 | | |
Conv. Note Payable (net of discount) | |
$ | — | | |
$ | 7,260 | |
| | 2247 | | |
Conv. Note Payable (net of discount) | |
$ | — | | |
$ | 4,918 | |
| | 2250 | | |
Conv. Note Payable (net of discount) | |
$ | — | | |
$ | 68,429 | |
| | 2261 | | |
Conv. Note Payable (net of discount) | |
$ | 8,100 | | |
$ | — | |
| | 2265 | | |
Conv. Note Payable (net of discount) | |
$ | 12,370 | | |
$ | — | |
| | 2267 | | |
Conv. Note Payable (net of discount) | |
$ | 24,897 | | |
$ | — | |
| | 2271 | | |
Conv. Note Payable (net of discount) | |
$ | 16,911 | | |
$ | — | |
| | 2274 | | |
Conv. Note Payable (net of discount) | |
$ | 11,123 | | |
$ | — | |
| | 2276 | | |
Conv. Note Payable (net of discount) | |
$ | 17,161 | | |
$ | — | |
| | 2278 | | |
Conv. Note Payable (net of discount) | |
$ | 56,910 | | |
$ | — | |
| | 2281 | | |
Conv. Note Payable (net of discount) | |
$ | 13,095 | | |
$ | — | |
| | 2290 | | |
Conv. Note Payable (net of discount) | |
$ | 31,918 | | |
$ | — | |
| | 2292 | | |
Conv. Note Payable (net of discount) | |
$ | 18,885 | | |
$ | — | |
| | 2294 | | |
Conv. Note Payable (net of discount) | |
$ | 15,579 | | |
$ | — | |
| | 2297 | | |
Conv. Note Payable (net of discount) | |
$ | 17,680 | | |
$ | — | |
| | 2310 | | |
Conv. Note Payable (net of discount) | |
$ | 15,650 | | |
$ | — | |
| | 2312 | | |
Conv. Note Payable (net of discount) | |
$ | 1,813 | | |
$ | — | |
| | 2314 | | |
Conv. Note Payable (net of discount) | |
$ | 20,592 | | |
$ | — | |
| | 2316 | | |
Conv. Note Payable (net of discount) | |
$ | 30,887 | | |
$ | — | |
| | 2322 | | |
Conv. Note Payable (net of discount) | |
$ | 100,000 | | |
$ | — | |
| | | | |
| |
| | | |
| | |
| | | | |
| |
| | | |
| | |
| | | | |
Subtotal | |
| 477,596 | | |
| 420,365 | |
| | | | |
| |
| | | |
| | |
| | Less: Long-Term portion | | | — |
| | |
(235,025 |
) |
| | | | |
| |
| | | |
| | |
| | Current portion |
| | $ | 477,596 |
| | $ |
185,340 |
|
The following is a summary of future minimum payments on convertible
notes payable as of May 31, 2015:
| | | | |
| Convertible | |
| | Fiscal Year Ending August 31, | | |
| Notes Payable | |
| | 2015 | | |
$ | 0 | |
| | 2016 | | |
$ | 477,596 | |
ONCOLOGIX TECH, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
2210 - On April
1, 2009, we issued to Ms. Lindstrom, our former Chief Executive Officer, a convertible promissory note in lieu of payment of $235,025
in accrued salary owed to Ms. Lindstrom. This note accrues interest at a rate of 6% per annum and was originally due on March 31,
2012. On March 16, 2012, Ms. Lindstrom agreed to extend the due date of the note to September 30, 2013. There was no beneficial
conversion feature recognized upon the issuance of this note. An outside party has entered into an assignment and settlement agreement
with Ms. Lindstrom to purchase the note. The note assignment is currently in default. During fiscal 2014, the Assignee has converted
$46,000 of principal into 8,788,171 shares of stock reducing the current balance of the note to $189,025. During fiscal 2015, the
Holder assigned $125,000 of principal to another accredited investor. As of May 31, 2015, the Company has an outstanding principal
balance of $64,025 and an accrued interest in the amount of $82,833.
2218 - During May
and June 2007, we issued nine Convertible Promissory Notes in an aggregate principal amount of $700,000. Eight of these notes we-+re
converted into common stock in fiscal 2009. The remaining Convertible Promissory Note, in the principal amount of $125,000, was
extended on January 28, 2010 initially to March 31, 2012, where the conversion rate was reduced to $.60, and then extended to September
30, 2013. In October 2013 and November 2014, the investor sold two $25,000 positions of principal in the note to another accredited
investor. In May 2015, the investor sold the remaining $75,000 of principal in the note to another accredited investor. The note
has been extended to December 31, 2015 and we are negotiating the final payment of accrued interest. As of May 31, 2015, the Company
has accrued interest in the amount of $65,469.
2232 - On October
2, 2013 we issued a convertible promissory note in the principal amount of $25,000. This promissory note bore interest at a rate
of 8% per annum and is due on October 2, 2013. The note was convertible at a 45% discount of the average of the three lowest closing
bid prices in the twenty days preceding the date of conversion. At no time may the holder of the note convert the note into shares
exceeding 4.99% of the Company’s then outstanding common stock shares. We recorded a beneficial conversion feature of $25,000.
On April 6, 2014 the holder elected to convert $17,074 in principal plus $690 in accrued interest into 5,383,007 shares of common
stock at a conversion price of $.0033. In August 1, 2014 the remaining principal of $7,926 plus accrued interest of $530 was converted
into 3,416,764 shares of common stock at a conversion rate of $.002475.
2238 - On March
19, 2014 we issued a convertible promissory note in the principal amount of $26,500 to an unrelated accredited investor. This promissory
note bore interest at a rate of 12% per annum and is due on March 19, 2015. The note was convertible at a 38% discount of the lowest
closing bid prices in the thirty days preceding the date of conversion. At no time may the holder of the note convert the note
into shares exceeding 4.99% of the Company’s then outstanding common stock shares. We recorded a beneficial conversion feature
of $26,500. During fiscal 2015, the investor converted $26,500 of principal plus accrued interest of $1,384 into 16,801,705 shares
of common stock.
2239 - On April
8, 2014 we issued a convertible promissory note in the principal amount of $50,000 to an unrelated accredited investor. This promissory
note bore interest at a rate of 12% per annum and is due on April 8, 2015. The note is convertible at a 35% discount of the average
4 lowest closing bid prices in the twenty days preceding the date of conversion. At no time may the holder of the note convert
the note into shares exceeding 4.99% of the Company’s then outstanding common stock shares. We recorded a beneficial conversion
feature of $50,000. This note was paid in full on October 2, 2014.
2247 - On April
25, 2014 we issued a convertible promissory note in the principal amount of $25,000 to an unrelated accredited investor. This promissory
note bore interest at a rate of 12% per annum and is due on October 25, 2015. The note is convertible at a 35% discount of the
average 4 lowest closing bid prices in the thirty days preceding the date of conversion. At no time may the holder of the note
convert the note into shares exceeding 4.99% of the Company’s then outstanding common stock shares. We recorded a beneficial
conversion feature of $25,000. During October and November 2014, the entire principal amount of $25,000 was converted into 8,284,469
shares of common stock.
ONCOLOGIX TECH,
INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
2250 -On May 21,
2014 we issued a convertible promissory note in the principal amount of $115,000 to an unrelated accredited investor. This promissory
note bore interest at a rate of 10% per annum. This principal includes a 10% OID in the amount of $10,000, which is being amortized
over the term of the note. The note is due in 4 equal installments beginning on the 180th day after the execution of
the note. The company may make the payments in common stock. The note is convertible at a $.009 per share. As additional consideration,
the Company issued 9,583,333 5 year warrants with an exercise price of $.009. At no time may the holder of the note convert the
note into shares exceeding 4.99% of the Company’s then outstanding common stock shares. We recorded a beneficial conversion
feature of $38,322 related to the issuance of the warrants. This note was paid in full on February 23, 2015.
2253 - On July 16,
2014 we issued a convertible promissory note in the principal amount of $26,500 to an unrelated accredited investor. This promissory
note bore interest at a rate of 12% per annum and is due on July 26, 2015. The note is convertible at a 38% discount of the lowest
closing bid prices in the thirty days preceding the date of conversion. At no time may the holder of the note convert the note
into shares exceeding 4.99% of the Company’s then outstanding common stock shares. We recorded a beneficial conversion feature
of $26,500. During the second quarter of fiscal 2015, the company converted $26,500 in principal plus $1,134 of accrued interest
into 18,571,550 shares of common stock.
2259 -On November
17, 2014, the Company entered into a securities transfer agreement with an accredited investor as well as a current convertible
note holder. The agreement called for the accredited investor to purchase $25,000 of the current convertible note holder note.
The Company issued to the accredited investor a convertible promissory note bearing interest at 8% and convertible at a 30% discount
into shares of the Company’s common stock using a five-day average of the lowest closing stock prices immediately preceding
the conversion date. The Company recorded a beneficial conversion feature of $10,545. During fiscal 2015, the investor converted
the $25,000 in principal plus $85 in accrued interest into 9,641,872 shares of common stock.
2261 -On November
17, 2014 we issued a convertible promissory note in the principal amount of $25,000. This promissory note bears interest at a rate
of 8% per annum and is due on October 2, 2013. The note is convertible at a 30% discount of the average of the five closing stock
prices immediately preceding the date of conversion. At no time may the holder of the note convert the note into shares exceeding
4.99% of the Company’s then outstanding common stock shares. We recorded a beneficial conversion feature of $10,545. During
fiscal 2015 the investor converted $11,989 of principal and $1,011 of interest into 6,211,180 shares of common stock. As of May
31, 2015 the company has accrued interest of $7.
2265 -On January
22, 2015 we issued a convertible promissory note in the principal amount of $35,000. This promissory note bears interest at a rate
of 8% per annum and is due on January 22, 2015. The note is convertible at a 38% discount of the average of the three lowest closing
bid prices immediately during the 20 days preceding the date of conversion. At no time may the holder of the note convert the note
into shares exceeding 4.99% of the Company’s then outstanding common stock shares. We recorded a beneficial conversion feature
of $35,000. As of May 31, 2015 the company has accrued interest of $1,003.
2267 - On January
30, 2015 we issued a convertible promissory note in the principal amount of $50,000. This promissory note bears interest at a rate
of 12% per annum and is due on September 30, 2015. The note is convertible at a 38% discount of the average of the three lowest
closing bid prices immediately during the 15 days preceding the date of conversion. At no time may the holder of the note convert
the note into shares exceeding 4.99% of the Company’s then outstanding common stock shares. We recorded a beneficial conversion
feature of $50,000. As of May 31, 2015 the company has accrued interest of $1,989.
2269 - On February
5, 2015 the Company entered into a securities transfer agreement with an accredited investor as well as a current convertible note
holder. The agreement called for the accredited investor to purchase $50,000 of the current convertible note holder note to repay
our former CEO. The Company issued to the accredited investor a convertible promissory note bearing interest at 8% and convertible
at a 38% discount of the average of the three lowest closing bid prices immediately during the 20 days preceding the date of conversion.
The Company recorded a beneficial conversion feature of $50,000. During the second and third quarters of fiscal 2015, the investor
converted the $50,198 in principal and interest into 16,669,092 shares of common stock.
ONCOLOGIX TECH, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
2274 - On February
4, 2015 we issued a convertible promissory note in the principal amount of $35,000. This promissory note bears interest at a rate
of 8% per annum and is due on February 4, 2016. The note is convertible at a 38% discount of the average of the three lowest closing
bid prices immediately during the 15 days preceding the date of conversion. At no time may the holder of the note convert the note
into shares exceeding 4.99% of the Company’s then outstanding common stock shares. We recorded a beneficial conversion feature
of $35,000. As of May 31, 2015 the company has accrued interest of $1,128.
2271 - On February
12, 2015 we issued a convertible promissory note in the principal amount of $75,000. This promissory note bears interest at a rate
of 10% per annum and is due on February 12, 2016. The note is convertible at a 38% discount of the average of the three lowest
closing bid prices immediately during the 20 days preceding the date of conversion. At no time may the holder of the note convert
the note into shares exceeding 4.99% of the Company’s then outstanding common stock shares. We recorded a beneficial conversion
feature of $75,000. As of May 31, 2015 the company has accrued interest of $2,250.
2281 - On February
25, 2015 we issued a convertible promissory note in the principal amount of $30,000. This promissory note bears interest at a rate
of 12% per annum and is due on October 25, 2015. The note is convertible at a 38% discount of the average of the three lowest closing
bid prices immediately during the 20 days preceding the date of conversion. At no time may the holder of the note convert the note
into shares exceeding 4.99% of the Company’s then outstanding common stock shares. We recorded a beneficial conversion feature
of $30,000. As of May 31, 2015 the company has accrued interest of $937.
.
2276 - On March
5, 2015 we issued a convertible promissory note in the principal amount of $36,750. This promissory note bears interest at a rate
of 8% per annum and is due on March 5, 2016. The note is convertible at a 38% discount of the average of the three lowest closing
bid prices immediately during the 15 days preceding the date of conversion. At no time may the holder of the note convert the note
into shares exceeding 4.99% of the Company’s then outstanding common stock shares. As of May 31, 2015 the company has accrued
interest of $711.
2283 - On March
9, 2015 the Company entered into a securities transfer agreement with an accredited investor as well as a current convertible note
holder. The agreement called for the accredited investor to purchase $30,000 of the current convertible note holder note to repay
our former CEO. The Company issued to the accredited investor a convertible promissory note bearing interest at 8% and convertible
at a 38% discount of the average of the three lowest closing bid prices immediately during the 20 days preceding the date of conversion.
At no time may the holder of the note convert the note into shares exceeding 4.99% of the Company’s then outstanding common
stock shares. During the third quarter of fiscal 2015, the investor converted $30,096 of principal and interest into 9,180,298
shares of common stock.
2278 - On March
11, 2015 we issued a convertible promissory note in the principal amount of $88,000. This promissory note bears interest at a rate
of 12% per annum and is due on September 11, 2015. The note is convertible at a 38% discount of the lowest closing price immediately
during the 20 days preceding the date of conversion. The Company also paid an OID in the amount of $6,000. At no time may the holder
of the note convert the note into shares exceeding 4.99% of the Company’s then outstanding common stock shares. As of May
31, 2015 the company has accrued interest of $2,376.
2290 - On March
25, 2015 we issued a convertible promissory note in the principal amount of $50,000. This promissory note bears interest at a rate
of 10% per annum and is due on September 25, 2015. The note is convertible at a 38% discount of the average of the three lowest
closing bid prices immediately during the 20 days preceding the date of conversion. At no time may the holder of the note convert
the note into shares exceeding 4.99% of the Company’s then outstanding common stock shares. As of May 31, 2015 the company
has accrued interest of $931.
2292 - On March
30, 2015 we issued a convertible promissory note in the principal amount of $32,000. This promissory note bears interest at a rate
of 8% per annum and is due on March 30, 2016. The note is convertible at a 38% discount of the average of the three lowest closing
bid prices immediately during the 15 days preceding the date of conversion. At no time may the holder of the note convert the note
into shares exceeding 4.99% of the Company’s then outstanding common stock shares. As of May 31, 2015 the company has accrued
interest of $441.
ONCOLOGIX TECH, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
2294 - On April
7, 2015 we issued a convertible promissory note in the principal amount of $27,500. This promissory note bears interest at a rate
of 12% per annum and is due on April 7, 2017. The note is convertible at a 38% discount of the average of the three lowest closing
bid prices immediately during the 20 days preceding the date of conversion. The Company also paid an OID in the amount of $6,000.
At no time may the holder of the note convert the note into shares exceeding 4.99% of the Company’s then outstanding common
stock shares. As of May 31, 2015 the company has accrued interest of $330.
2297 - On April
8, 2015 we issued a convertible promissory note in the principal amount of $58,000. The company received net proceeds of $50,000
with the balance of the note going for finders fees and processing fees. This promissory note bears interest at a rate of 8% per
annum and is due on April 8, 2016. The note is convertible at a 38% discount of the average of the three lowest closing bid prices
immediately during the 20 days preceding the date of conversion. At no time may the holder of the note convert the note into shares
exceeding 4.99% of the Company’s then outstanding common stock shares. As of May 31, 2015 the company has accrued interest
of $683.
2310 - On May 7,
2015 we issued a convertible promissory note in the principal amount of $35,000. This promissory note bears interest at a rate
of 12% per annum and is due on October 25, 2015. The note is convertible at a 38% discount of the average of the three lowest closing
bid prices immediately during the 20 days preceding the date of conversion. At no time may the holder of the note convert the note
into shares exceeding 4.99% of the Company’s then outstanding common stock shares. We recorded a beneficial conversion feature
of $21,452. As of May 31, 2015 the company has accrued interest of $280.
2312 - On May 8,
2015 the Company entered into a securities transfer agreement with an accredited investor as well as a current convertible note
holder. The agreement called for the accredited investor to purchase $45,000 of the current convertible note holder note to repay
our former CEO. The Company issued to the accredited investor a convertible promissory note bearing interest at 8% and convertible
at a 38% discount of the average of the three lowest closing bid prices immediately during the 20 days preceding the date of conversion.
At no time may the holder of the note convert the note into shares exceeding 4.99% of the Company’s then outstanding common
stock shares. We recorded a beneficial conversion feature of $29,715. During the third quarter of fiscal 2015, the investor converted
$16,261 of principal into 9,400,000 shares of common stock.
2314 - On May 22,
2015 we issued a convertible promissory note in the principal amount of $50,000. This promissory note bears interest at a rate
of 8% per annum and is due on December 31, 2015. The note is convertible at a 38% discount of the average of the three lowest closing
bid prices immediately during the 20 days preceding the date of conversion. At no time may the holder of the note convert the note
into shares exceeding 4.99% of the Company’s then outstanding common stock shares. We recorded a beneficial conversion feature
of $30,645. As of May 31, 2015 the company has accrued interest of $100.
2316 - On May 22,
2015 the Company entered into a securities transfer agreement with an accredited investor as well as a current convertible note
holder. The agreement called for the accredited investor to purchase $75,000 of the current convertible note holder note to repay
our former CEO. The Company issued to the accredited investor a convertible promissory note bearing interest at 8% and convertible
at a 38% discount of the average of the three lowest closing bid prices immediately during the 20 days preceding the date of conversion.
At no time may the holder of the note convert the note into shares exceeding 4.99% of the Company’s then outstanding common
stock shares. We recorded a beneficial conversion feature of $45,968.
2322 - On
January 2, 2015, The Company issued a $100,000 convertible promissory note in full payment of an outstanding invoice of an
accredited investor. The Company issued to the accredited investor a convertible promissory note bearing interest at 4% and
convertible at a 35% discount of the average of the last en closing stock prices immediately preceding the date of
the conversion. At no time may the holder of the note convert the note into shares exceeding 4.99% of the
Company’s then outstanding common stock shares.
ONCOLOGIX TECH, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
CONVERTIBLE RELATED PARTY NOTES PAYABLE:
As of May 31, 2015, there
are currently no related party convertible notes payable outstanding. The note related to our former CEO is now classified as non-related
convertible debt for all comparable periods.
RELATED PARTY
NOTES PAYABLE:
| | |
May 31, | |
May 31, |
| | |
2015 | |
2014 |
| 6.0% line of credit (2) | |
$ | — | | |
$ | 51,600 | |
| | |
| | | |
| — | |
| | |
| | | |
| | |
| Outstanding unsecured related party notes payable | |
$ | — | | |
$ | 51,600 | |
| | |
| | | |
| | |
| (1) Note payable to current CEO. | |
| | | |
| | |
During the last two years,
Wayne Erwin, our President and CEO, has advanced a total of $51,600 directly to Dotolo in an open advance account. Interest is
being accrued at a rate of 6% per annum. As of May 31, 2015 the Company has repaid $51,600 of principal and $7,393 of accrued interest.
ONCOLOGIX TECH,
INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
OTHER NOTES
PAYABLE:
| Ref. | |
| |
May 31, | |
May 31, |
| Numb. | |
Description | |
2015 | |
2014 |
| | Dot 1 | | |
Note Payable (net of discount) | |
$ | 1,500 | | |
$ | 60,600 | |
| | Dot 2 | | |
Note Payable (net of discount) | |
| 30,000 | | |
| 30,000 | |
| | Dot 3 | | |
Note Payable (net of discount) | |
| 20,000 | | |
| 20,000 | |
| | AA 1 | | |
Line of Credit | |
| 43,149 | | |
| 44,469 | |
| | AA 2 | | |
Line of Credit | |
| 37,467 | | |
| — | |
| | AA 3 | | |
Merchant Loan | |
| — | | |
| 130,400 | |
| | AA 4 | | |
Merchant Loan | |
| — | | |
| 142,109 | |
| | AA 5 | | |
Merchant Loan | |
| 68,409 | | |
| — | |
| | AA 6 | | |
Merchant Loan | |
| 42,080 | | |
| — | |
| | AA 7 | | |
Merchant Loan | |
| 228,215 | | |
| — | |
| | AA 8 | | |
Merchant Loan | |
| 67,400 | | |
| — | |
| | AA 9 | | |
Note Payable (net of discount) | |
| — | | |
| 14,765 | |
| | EST 1 | | |
Note Payable (net of discount) | |
| 73,552 | | |
| — | |
| | 2226 | | |
Note Payable (net of discount) | |
| — | | |
| 10,833 | |
| | 2227 | | |
Note Payable (net of discount) | |
| — | | |
| 6,689 | |
| | 2228 | | |
Note Payable (net of discount) | |
| — | | |
| 6,844 | |
| | 2229 | | |
Note Payable (net of discount) | |
| — | | |
| 21,076 | |
| | 2230 | | |
Note Payable (net of discount) | |
| 68,510 | | |
| 70,659 | |
| | 2231 | | |
Note Payable (net of discount) | |
| 12,000 | | |
| 7,692 | |
| | 2236 | | |
Note Payable (net of discount) | |
| 1,533,584 | | |
| 275,155 | |
| | 2237 | | |
Note Payable (net of discount) | |
| — | | |
| 11,444 | |
| | 2255 | | |
Note Payable (net of discount) | |
| 22,909 | | |
| — | |
| | 2257 | | |
Note Payable (net of discount) | |
| 68,920 | | |
| — | |
| | 2258 | | |
Note Payable (net of discount) | |
| 22,973 | | |
| — | |
| | 2263 | | |
Note Payable (net of discount) | |
| 56,215 | | |
| — | |
| | 2264 | | |
Note Payable (net of discount) | |
| 11,500 | | |
| — | |
| | 2300 | | |
Note Payable (net of discount) | |
| 416,466 | | |
| 498,179 | |
| | 2432 | | |
Note Payable (net of discount) | |
| 25,499 | | |
| 78,915 | |
| | | | |
| |
| | | |
| | |
| | | | |
Subtotal | |
| 2,850,348 | | |
| 1,429,829 | |
| | | | |
| |
| | | |
| | |
| | Less: Long-Term portion | | | (376,037 |
) | | |
(416,466 |
) |
| | | | |
| |
| | | |
| | |
| | Current portion |
| | $ | 2,474,311 |
| | $ |
1,013,363 |
|
Notes held by Dotolo
DOT 1 - During April
2012, our subsidiary Dotolo, entered into a financing agreement to provide up to $150,000 in funding for the subsidiary. The financing
agreement was due in January 2013. We entered into a settlement agreement whereby we paid $45,000 from amounts held in reserve
by our senior lender and are required to make 10 monthly payments of $1,500. As of May 31, 2015, the current balance is $1,500.
DOT 2 - On February
27, 2013 our subsidiary Dotolo, entered into a note payable agreement to provide funding to its subsidiary in the principal amount
of $30,000. The note bears interest at 18% payable monthly on the 15th and is due in full in January 2016. For the three months
ended May 31, 2015, we made interest payments in the amount of $1,350. As of May 31, 2015, we have accrued interest of $1,965.
ONCOLOGIX TECH, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
DOT 3 - On March
17, 2013 our subsidiary Dotolo, entered into a note payable agreement to provide funding to its subsidiary in the principal amount
of $20,000. The note bears interest at 18% payable monthly on the 15th and is due in full in January 2016. For the year ended May
31, 2015, we made interest payments in the amount of $900. As of May 31, 2015, we have accrued interest of $1,090.
Notes held by Amian Angels
AA 1 – During
fiscal 2014 we borrowed $45,000 from our $50,000 line of open line of credit with our bank. As of May 31, 2015 the outstanding
balance of the line of credit loan was $43,149.
AA 2 – During
fiscal 2015 we borrowed $80,000 from our line of open line of credit with another lender. During the third quarter of fiscal 2015
we have repaid $42,533 of principal plus additional interest. As of May 31, 2015 the outstanding balance of the line of credit
loan was $37,467.
AA 3 – On
April 18, 2014, the Company obtained a merchant loan for additional working capital in the amount of $120,000. This loan requires
189 daily payments in the amount of $800 for a total repayment amount of $151,200. We netted gross proceeds of $119,301 after paying
loan fees. This note was paid in full in December 2014.
AA 4 – On
March 11, 2014, the Company obtained a merchant loan for additional working capital in the amount of $150,000. This loan requires
209 daily payments in the amount of $940 for a total repayment amount of $196,500. We netted gross proceeds of $146,750 after paying
loan fees. This note was paid in full in December 2014.
AA 5 – On
May 22, 2015, the Company obtained a merchant loan for additional working capital in the amount of $50,000. This loan requires
132 daily payments in the amount of $530 for a total repayment amount of $70,000. The balance of this loan on May 31, 2015 was
$68,409.
AA 6 – On
May 7, 2015, the Company obtained a merchant loan for additional working capital in the amount of $35,000. This loan requires 85
daily payments in the amount of $599 for a total repayment amount of $51,065. The balance of this loan on May 31, 2015 was $42,080.
AA 7 – On
December 15, 2014, the Company obtained a merchant loan for additional working capital in the amount of $300,000. This loan requires
252 daily payments in the amount of $1,607 for a total repayment amount of $405,000. We netted gross proceeds of $163,713 after
paying loan fees and paying off our other 4 merchant loans. The balance of this loan on May 31, 2015 was $228,215.
AA 8 – On
April 30, 2015, the Company obtained a merchant loan for additional working capital in the amount of $60,000. This loan requires
87 daily payments in the amount of $999 for a total repayment amount of $87,450. The balance of this loan on May 31, 2015 was $67,400.
AA 9 – In
connection with the acquisition of Amian Health Services, the Company entered into a twelve month promissory note in the total
principal amount of $25,000. The note bears interest at $6% and requires monthly payments of $2,152. This note was paid in full
in December 2014.
Notes held by Esteemcare
EST 1 -
On September 25, 2014, as part of the terms and conditions of the acquisition of Esteemcare Inc. and Affordable Medical Inventory
Solutions Inc., the company issued an 18 month note to Imad Siddiqui in the principal amount of $75,000. This note was executed
on May 1, 2015 and requires monthly payments of $4,524. As a result of the delay in execution of the note, the Company accrued
$2,688 of interested and added it to the balance of the note.
ONCOLOGIX TECH, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
Notes held by Oncologix Tech
2216 - On August
1, 2013, in connection with our acquisition of Angels of Mercy, Inc. we entered into a promissory note to pay $65,000 of broker’s
fees incurred in the acquisition. Monthly payments of $5,417 are due and payable beginning on August 15, 2013. This note bears
no interest. This was paid in full in July 2014.
2227 & 2228 - On
November 5, 2013 and November 8, 2013, the Company entered into two, one-year promissory notes with accredited investors to borrow
a total principal amount of $20,000. Each promissory note is $10,000 in principal balance, bore interest at 18% and requires monthly
interest payments of $150 each. The company also issued 3,000,000 in cashless warrants as finder’s fees for these funds.
The Company recorded a discount of $14,805 for the issuance of the warrants. These notes were paid in full in November 2014.
2229 - On November
1, 2013, the Company entered into a Settlement Agreement with its former legal counsel. The current balance owed to prior counsel
is $145,523. Pursuant to the settlement agreement, the Company agreed to pay $50,000 in the form of a one year promissory note
and transfer its 90% ownership interest and all marketing rights of Oncologix Corporation, one of its subsidiaries as full settlement
of the current balance owed. The promissory note bears interest of 4% and requires monthly payment of $4,257 beginning on December
1, 2013. This note was paid in full during November 2014.
2230 -
On December 3, 2013, The Company entered into a twelve month promissory note with an accredited investor to borrow a total principal
amount of $75,000. The note bears interest of 18% per annum and calls for monthly payments of principal and interest of $1,375
beginning on January 15, 2014 with a balloon payment due December 15, 2014. The Company also issued as additional finders’
fees to the investor, 3,500,000 shares of common stock and 1,000,000 cashless warrants with an exercise price of $.025. As of May
31, 2015, the balance was $68,510. The Company recorded a discount of $5,992 for the issuance of the warrants.
2231 - On December
20, 2013, the Company issued a 1-year promissory note to a non-related accredited investor in the principal amount of $12,000.
This note bears interest at 10% per annum and matures in December 2014. This note was extended to June 2015. As additional consideration
for the operating capital loan, the company issued 3,000,000 cashless two-year warrants with an exercise price of $0.02. The Company
recorded a discount of $7,746 for the issuance of the warrants. As of May 31, 2015 the Company has accrued interest of $1,437.
2236 - On January
3, 2014, the Company closed on a 4 million dollar line of credit facility, with an initial draw of $500,000. The Company must meet
specific monthly reporting and collateral requirements to further draw on the revolving credit facility. The $500,000 initial draw
is secured by a 14.5% promissory note, which is convertible ONLY upon default by the Company. In July 2014, we borrowed an additional
$75,000 from the principal we repaid. This note is due in nine months with an automatic option to renew after nine months. On September
25, 2014, the Company took down a second draw from its $4 million dollar line of credit facility in the amount of $1,200,000. The
Company must meet specific monthly reporting and collateral requirements to further draw on the revolving credit facility. The
outstanding balance at the time of the draw was $1,533,584 which is secured by twelve month 14.5% promissory note, which is convertible
ONLY upon default by the Company. This note is automatically renewable for an additional twelve months. The company is required
to pay interest and fees only for the initial 3 months. The balance of this note on May 31, 2015 is $1,533,584.
2237 - On February
7, 2014, the Company issued a 1-year promissory note in the principal amount of $15,000 to a non-related accredited investor. This
note bears interest at 6% per annum and matures in February 2015. As additional consideration for the operating capital loan, the
company issued 1,500,000 two-year warrants with an exercise price of $0.15 and 1,000,000 shares of common stock. The Company recorded
an expense of $9,000 for the issuance of the common stock. The Company recorded a discount of $5,151 for the issuance of the warrants.
On August 1, 2014 this investor used $10,000 to purchase 1,200,000 shares of common stock. This note was paid in February 2015.
ONCOLOGIX TECH, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
2255 - On August
15, 2014 the Company issued a 1-year promissory note to a non-related accredited investor in the principal amount of $25,000. This
note bears interest at 10% per annum and matures in August 2015. As additional consideration for the operating capital loan, the
company issued 4,000,000 cashless two-year warrants with an exercise price of $0.065. The Company recorded a discount of $10,177
for the issuance of the warrants. As of May 31, 2015 the Company has accrued interest of $1,993.
2257 & 2258 - On
September 25, 2014, the Company issued a $75,000 and $25,000 1-year promissory notes bearing interest at 6% in connection with
the acquisition of Esteemcare Inc. and Affordable Medical Inventory Solutions Inc. As of May 31, 2015, the outstanding balances
of these notes were $68,920 and $22,973, respectively.
2263 - On November
16, 2014, the Company borrowed $60,000 in principal from an unrelated investor. This note bears interest at a rate of 12% and calls
for 60 monthly payments of $1,334.67 beginning on January 19, 2015. The note matures on January 19, 2019. As of May 31, 2015, the
outstanding balance of this note was 56,217.
2264 - On December
16, 2014, the Company borrowed $48,000 in principal from an unrelated investor. This note bears calls for two interest payments,
each in the amount of $8,500 in January and February 2015. The note matures on March 16, 2015. As of May 31, 2015, the outstanding
balance of this note was 11,500.
2300 - On August
1, 2013, in connection with our acquisition of Angels of Mercy, Inc. we entered into a promissory note to pay $550,000 for the
purchase of Angels of Mercy, Inc. Monthly payments of $9,115 are due and payable beginning on November 1, 2013 with a final balloon
payment of $205,705 due on October 1, 2017. This note bears interest at a rate of 6%. As of May 31, 2015, the outstanding balance
of the note is $416,466.
2432 - On July 26,
2013 the Company issued an 18 month promissory note in the principal amount of $100,000. These funds were used for the cash down
payment for the Angels acquisition. The note bears interest at 18% and requires monthly interest payments of $1,200 beginning on
September 26, 2013. In December 2013, we modified the loan agreement to make monthly payments of $6,200. As of May 31, 2015 the
outstanding balance was $25,499.
The following is a summary of future minimum
payments on r notes payable as of May 31, 2015:
| |
|
Related Conv. |
| Fiscal
Year Ending August 31, |
|
Notes
Payable |
| 2015 |
|
2,394,130 |
| 2016 |
|
97,813 |
| 2017 |
|
326,226 |
| 2018 |
|
14,580 |
| 2019 |
|
17,599 |
ONCOLOGIX TECH, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
NOTE 12 — STOCKHOLDERS EQUITY
PREFERRED STOCK:
Series A Convertible Preferred Stock.
The Company is authorized
to issue up to 10,000,000 shares of preferred stock, in one or more series, and to determine the price, rights, preferences and
privileges of the shares of each such series without any further vote or action by the stockholders. The rights of the holders
of common stock will be subject to, and may be adversely affected by, the rights of the holders of any shares of preferred stock
that may be issued in the future.
In January 2003, our Board
of Directors authorized up to 4,500,000 shares of Series A Convertible Preferred Stock. Each share of Series A Convertible
Preferred stock has a par value of $0.001 and is convertible into one-half share of common stock in upon a cash payment by the
holder to the Company of $0.40 per common share. The Series A Convertible Preferred Stock is entitled to receive, in
preference to the common stock, of noncumulative dividends, if declared by the Board of Directors, and a claim on the Company's
assets upon any liquidation of the Company senior to the common stock. These preferred shares are not entitled to voting
rights. There are presently outstanding 129,062 shares of Series A Preferred Stock.
On
March 30, 2003, the Company completed the private placement of Units pursuant to the terms of a Unit Purchase Agreement (the “Units”)
with accredited investors. Each Unit consists of the following underlying securities: (i) three shares of the Company’s common
stock; (ii) one share of Series A Convertible Preferred Stock, par value $.001 per share; and (iii) one three-year warrant to purchase
one share of common stock at a per share price of $0.30. The warrants expired on March 31, 2006. Each share of Series A Convertible
Preferred Stock is convertible into one half share of the Company’s common stock in exchange for $0.40 per common share ($.20
for each Series A Convertible Preferred share converted). The securities underlying the Units are not to be separately tradable
or transferable apart from the Units until such time as determined by the Company’s Board of Directors. A total of 4,032,743
Units were issued. As of August 31, 2014 and August 31, 2013, there were 129,062 and 129,062 Units outstanding that had not been
separated, respectively. These units are presented as their underlying securities on our balance sheet and consist of 64,531 shares
of Series A Preferred Stock and 96,797 shares of common stock which is included in the issued and outstanding shares.
ONCOLOGIX TECH, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
Below
is a table detailing the outstanding Series A Convertible Preferred Stock shares outstanding during the last two fiscal years:
| | | | |
| Preferred | | |
| Number of | | |
| | | |
| Weighted Avg. | |
| | | | |
| Shares | | |
| Common Shares | | |
| Proceeds if | | |
| Per Common Sh. | |
| | | | |
| Outstanding | | |
| Convertible | | |
| Converted | | |
| Exercise Price | |
| | Outstanding, August 31, 2013 | | |
| 129,062 | | |
| 64,531 | | |
$ | 25,812 | | |
$ | 0.40 | |
| | | | |
| | | |
| | | |
| | | |
| | |
| | Expired/Retired | | |
| — | | |
| — | | |
| — | | |
$ | — | |
| | Converted | | |
| — | | |
| — | | |
| — | | |
$ | 0.40 | |
| | Issued | | |
| — | | |
| — | | |
| — | | |
$ | — | |
| | Outstanding, August 31, 2014 | | |
| 129,062 | | |
| 64,531 | | |
$ | 25,812 | | |
$ | 0.40 | |
| | | | |
| | | |
| | | |
| | | |
| | |
| | Expired/Retired | | |
| — | | |
| — | | |
| — | | |
$ | 0.40 | |
| | Converted | | |
| — | | |
| — | | |
| — | | |
$ | — | |
| | Issued | | |
| — | | |
| — | | |
| — | | |
$ | — | |
| | Outstanding, May 31, 2015 | | |
| 129,062 | | |
| 64,531 | | |
$ | 25,812 | | |
$ | 0.40 | |
Series
D Convertible Preferred Stock
In
March 2013, our Board of Directors authorized up to 60,000 shares of Series D Convertible Preferred Stock. Each share of Series
D Convertible stock has a par value of $0.001 and is convertible into 1,000 shares of common stock beginning after March 1, 2014.
Each share of Series D Convertible Preferred Stock has a stated liquidation value of $80.25. Each shares of Series D Convertible
Preferred Stock shall have voting rights as stated below:
March
1, 2013 to May 31, 2014, 400 votes per share;
March
1, 2014 to May 31, 2015, 800 votes per share;
March
1, 2015 to May 31, 2016, 1,200 votes per share;
March
1, 2016 to May 31, 2017, 1,600 votes per share;
March
1, 2017 and after, 2,000 votes per share;
On
March 22, 2013, the Company issued 58,564 shares of Series D Convertible Preferred Stock to acquire 100% of the outstanding common
stock of Dotolo. On March 22, 2013 the issued shares had a fair market value of $585,640 based on the fair market value of the
underlying common stock shares.
On
January 3, 2014, as payment for $150,000 of banking fees associated with our $4 million line of credit, we issued 20,000 shares
of Series D Convertible Preferred Stock.
ONCOLOGIX TECH, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
Below
is a table detailing the outstanding Series D Convertible Preferred Stock shares outstanding during the last two fiscal years:
| | | | |
| Preferred | | |
| Number of | | |
| | | |
| Weighted Avg. | |
| | | | |
| Shares | | |
| Common Shares | | |
| Proceeds if | | |
| Per Common Sh. | |
| | | | |
| Outstanding | | |
| Convertible | | |
| Converted | | |
| Exercise Price | |
| | Outstanding, August 31, 2013 | | |
| 58,564 | | |
| 58,564,000 | | |
$ | — | | |
$ | 80.25 | |
| | | | |
| | | |
| | | |
| | | |
| | |
| | Expired/Retired | | |
| — | | |
| — | | |
| — | | |
$ | — | |
| | Converted | | |
| — | | |
| — | | |
| — | | |
$ | — | |
| | Issued | | |
| 20,000 | | |
| 20,000,000 | | |
| — | | |
$ | 80.25 | |
| | Outstanding, August 31, 2014 | | |
| 78,564 | | |
| 78,564,000 | | |
$ | — | | |
$ | — | |
| | | | |
| | | |
| | | |
| | | |
| | |
| | Expired/Retired | | |
| — | | |
| — | | |
| — | | |
$ | — | |
| | Converted | | |
| — | | |
| — | | |
| — | | |
$ | — | |
| | Issued | | |
| — | | |
| — | | |
| — | | |
$ | — | |
| | Outstanding, May 31, 2015 | | |
| 78,564 | | |
| 78,564,000 | | |
$ | — | | |
$ | 80.25 | |
SUBSCRIBED COMMON STOCK:
Below
is a table detailing the Common Stock Subscribed during the last two fiscal years:
| For the period Ended May 31, 2015 |
| |
|
|
|
|
|
|
Shares |
|
Amount |
|
| Shares issuable upon conversion of convertible notes payable |
- |
|
$ - |
|
| |
|
|
|
|
|
|
|
|
|
|
| Total subscribed stock |
|
- |
|
$ - |
|
| |
|
|
|
|
|
|
|
|
|
|
| For the period Ended August 31, 2014 |
| |
|
|
|
|
|
|
Shares |
|
Amount |
|
| Shares issuable upon conversion of convertible notes payable |
1,058,201 |
|
$ 5,000 |
|
| |
|
|
|
|
|
|
|
|
|
|
| Total subscribed stock |
|
1,058,201 |
|
$ 5,000 |
|
COMMON STOCK:
On
March 7, 2014, the Company increased its authorized shares of common stock to 750,000,000. The increase was approved by a majority
of the Company’s shareholders on January 27, 2014. As of May 31, 2015, the Company has 276,746,130 shares outstanding. Please
see Part II, Item II – Sale of Unregistered Securities for information on recent sales of unregistered securities.
NON-CONTROLLING INTEREST
On February 27, 2009, in
connection with the Technology Agreement we entered into with Institut für Umwelttechnologien GmbH, a German Company (“IUT”)
whereunder the parties have agreed that the Company’s marketing rights have been transferred to its subsidiary, Oncologix
Corporation and have issued IUTM 10% of the equity ownership of that subsidiary. As of February 27, 2009, the value of the non-controlling
interest was $212. It was determined at August 31, 2010 the value of the investment in IUTM was impaired. Accordingly, we recorded
an impairment loss in the amount of $3,186 for the year ended August 31, 2010. As of May 31, 2015, as a result of the disposition
of Oncologix Corporation, we do not have to recognize a non-controlling interest.
ONCOLOGIX TECH, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
WARRANTS:
The following table summarizes
warrant activity in fiscal 2015 and 2014:
| |
|
|
|
Weighted Avg. |
| |
|
Number |
|
Exercise Price |
| Outstanding, August 31, 2013 |
|
7,000,000 |
|
0.012 |
| Expired/Retired |
|
- |
|
- |
| Exercised |
|
- |
|
- |
| Issued |
|
23,583,333 |
|
0.011 |
| Outstanding, August 31, 2014 |
|
30,583,333 |
|
- |
| |
|
|
|
|
| Expired/Retired |
|
- |
|
- |
| Exercised |
|
(9,583,333) |
|
0.009 |
| Issued |
|
- |
|
- |
| Outstanding, May 31, 2015 |
|
21,000,000 |
|
0.012 |
The fair value of warrants
granted is estimated using the Black-Scholes option pricing model. This model utilizes the following factors to calculate the fair
value of options granted: (i) annual dividend yield, (ii) weighted-average expected life, (iii) risk-free interest rate and (iv)
expected volatility. The warrants were expensed and accounted for under ASC 718.
The fair value for these
warrants was estimated as of the date of grant using a Black-Scholes option-pricing model with the following assumptions:
| |
|
|
|
For the Nine Months Ended May 31, |
| |
|
|
|
2015 |
|
2014 |
| Volatility |
|
|
|
- |
|
124% - 702% |
| Risk free rate |
|
|
0.00% |
|
0.25% |
| Expected dividends |
|
|
None |
|
None |
| Expected term (in years) |
|
- |
|
2 to 5 years |
ONCOLOGIX TECH,
INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
Details relative to the 21,000,000 immediately exercisable outstanding
warrants at May 31, 2015 are as follows:
| |
|
|
|
Weighted |
|
|
|
|
|
| |
|
|
|
Average |
|
|
|
|
|
| Date of |
|
Number |
|
Exercise |
|
Remaining |
|
Expiration |
|
| Grant |
|
of Shares |
|
Price |
|
Exercise Life |
|
Date |
|
| |
|
|
|
|
|
|
|
|
|
| Outstanding, August 31, 2013 |
|
7,000,000 |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| First quarter of fiscal 2014 |
|
4,500,000 |
|
$ 0.012 |
|
3 years |
|
November 2017 |
|
| Second quarter of fiscal 2014 |
|
5,500,000 |
|
$ 0.017 |
|
2 to 3 years |
|
Dec 2015 to Dec 2016 |
| Third quarter of fiscal 2014 |
|
9,583,333 |
|
$ 0.012 |
|
5 years |
|
May 2019 |
|
| Fourth quarter of fiscal 2014 |
|
4,000,000 |
|
$ 0.007 |
|
2 years |
|
August 2016 |
|
| |
|
|
|
|
|
|
|
|
|
| Outstanding, August 31, 2014 |
|
30,583,333 |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| First quarter of fiscal 2015 |
|
- |
|
$ - |
|
- |
|
|
|
| Second quarter of fiscal 2015 |
|
- |
|
|
|
|
|
|
|
| Third quarter of fiscal 2015 |
|
(9,583,333) |
|
$ 0.009 |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| Outstanding, May 31, 2015 |
|
21,000,000 |
|
|
|
|
|
|
|
On August 1, 2013, the
company issued 1,000,000 four-year cashless warrants as additional consideration for the acquisition of Amian Angels. These warrants
expire four years after the date of issuance and have an exercise price of $.015.
On August 5, 2013, the
company issued 6,000,000 three-year cashless warrants, to a related party, as finder’s fees related to a working capital
investment. These warrants expire three years after the date of issuance and have an exercise price of $.012.
On September 11, 2013,
the company issued 1,500,000 three-year cashless warrants, to a related party, as finder’s fees related to a working capital
investment. These warrants expire three years after the date of issuance and have an exercise price of $.015.
On November 8, 2013, the
company issued 3,000,000 three-year cashless warrants, to an unrelated party, as finder’s fees related to a working capital
investment. These warrants expire three years after the date of issuance and have an exercise price of $.01.
On December 3, 2014, the
company issued 1,000,000 three-year cashless warrants, to an unrelated party, as finder’s fees related to a working capital
investment. These warrants expire three years after the date of issuance and have an exercise price of $.025.
On December 20, 2014, the
company issued 3,000,000 two-year cashless warrants, to an unrelated party, as finder’s fees related to a working capital
investment. These warrants expire two years after the date of issuance and have an exercise price of $.016.
On February 7, 2014, the
company issued 1,000,000 two-year cashless warrants, to an unrelated party, as finder’s fees related to a working capital
investment. These warrants expire two years after the date of issuance and have an exercise price of $.015.
On May 21, 2014, the company
issued 9,583,333 five-year cashless warrants, to an unrelated party, as finder’s fees related to a working capital investment.
These warrants expire five years after the date of issuance and have an exercise price of $.009.
ONCOLOGIX TECH, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
On August 15, 2014, the
company issued 4,000,000 two-year warrants, to an unrelated party, as finder’s fees related to a working capital investment.
These warrants expire two years after the date of issuance and have an exercise price of $.0065.
During the third quarter
of fiscal 2015, 9,583,333 warrants were exercised in a cashless transaction. 33,382,960 shares of Common stock were issued for
the warrants’ exercise.
The
remaining contractual life of warrants outstanding as of May 31, 2015 was 1.17 years. Warrants for the purchase of 21,000,000 and
26,586,333 shares were immediately exercisable on May 31, 2015 and 2014, respectively with a weighted-average price of $0.012 and
$0.011 per share, respectively.
STOCK OPTIONS:
ASC 718 requires the estimation
of forfeitures when recognizing compensation expense and that this estimate of forfeitures be adjusted over the requisite service
period should actual forfeitures differ from such estimates. Changes in estimated forfeitures are recognized through a cumulative
adjustment, which is recognized in the period of change and which impacts the amount of unamortized compensation expense to be
recognized in future periods.
ASC 718 requires that modification
of the terms or conditions of an equity award is to be treated as an exchange of the original award for a new award. This event
is accounted for as if the entity repurchases the original instrument by issuing a new instrument of equal or greater value, incurring
additional compensation cost for any incremental value.
2000 Stock Incentive
Plan
The Company is authorized
to issue up to 7,500,000 shares of common stock under its 2000 Stock Incentive Plan. Shares may be issued as incentive stock options,
non-statutory stock options, deferred shares or restricted shares. Options are granted at the fair market value of the common stock
on the date of the grant and have terms of up to ten years. The 2000 Stock Incentive Plan also provides for an annual grant of
options to members of our Board of Directors. For fiscal years ended August 31, 2008 through 2012, our Board of Directors elected
to waive the grant of these annual options.
On December 13, 2013, the
Board of directors authorized the granting of 6,100,000 options to its three officers; 2,400,000 options to Wayne Erwin, our CEO;
2,100,000 options to Michael Kramarz, our CFO; and 1,600,000 options to Vickie Hart, President of Amian Angels. These options vest
immediately and have an exercise price $.015, the closing stock price on December 13, 2013.
On December 20, 2014, the
Company issued 20,000 options as part of its annual grant program to its two directors. These options vest in 1 year and have an
exercise price of $.016, the closing stock price on December 20, 2013.
We have 473,253 shares
of common stock available for future issuance under our 2000 Stock Incentive Plan as of May 31, 2015. This plan has been approved
by our shareholders.
During the three and nine
months years ended May 31, 2015 and 2014, we granted 6,120,000 and nil options from the stock incentive plan described above, respectively.
During the three and nine months ended May 31, 2015 and 2014, nil and nil options were exercised, respectively. During the three
months ended May 31, 2015 and 2014, nil and nil options expired, respectively. During the nine months ended May 31, 2015 and 2014,
nil and 150,835 options expired, respectively. During the three and nine months ended May 31, 2015 and 2014, $0 and $91,163 was
expensed as stock based compensation, respectively.
ONCOLOGIX TECH, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
| | | | |
| | | |
| | | |
| Weighted Average | |
| | | | |
| Number of | | |
| Option Price | | |
| Exercise Price | |
| | | | |
| Options Granted | | |
| Per Share | | |
| Per Share | |
| | Outstanding, August 31, 2013 | | |
| 217,085 | | |
| $0.12 - $2.00 | | |
$ | 1.120 | |
| | Granted | | |
| 6,120,000 | | |
| $0.015 - $0.016 | | |
$ | 0.020 | |
| | Exercised | | |
| — | | |
| — | | |
$ | — | |
| | Cancelled | | |
| (163,335 | ) | |
| $1.04 - $2.00 | | |
$ | 1.380 | |
| | Outstanding, August 31, 2014 | | |
| 6,173,750 | | |
| $0.12 - $2.00 | | |
$ | 0.016 | |
| | Granted | | |
| — | | |
$ | — | | |
$ | — | |
| | Exercised | | |
| — | | |
| — | | |
$ | — | |
| | Cancelled | | |
| — | | |
$ | 0.00 | | |
$ | — | |
| | Outstanding, May 31, 2015 | | |
| 6,173,750 | | |
| $0.12 - $2.00 | | |
$ | 0.016 | |
The aggregate intrinsic
value in the table above represents the total pre-tax intrinsic value (the difference between our closing stock price on the last
trading day of the third quarter of fiscal 2015 and the exercise price, multiplied by the number of in-the-money options) that
would have been received by the option holders had all option holders exercised their options on May 31, 2015.
Expected volatility is
based primarily on historical volatility. Historical volatility is computed using weekly average pricing observations for an applicable
historic period. We believe this method produces an estimate that is representative of our expectations of the future volatility
over the expected term of our options. We currently have no reason to believe future volatility over the expected life of these
options is likely to differ materially from historical volatility. The weighted-average expected life is based upon share option
exercises, pre and post vesting terminations and share option term expirations. The risk-free interest rate is based on the U.S.
treasury security rate estimated for the expected life of the options at the date of grant.
The remaining contractual
life of options outstanding as of May 31, 2015 was 8.49 years. Options for the purchase of 6,173,750 exercisable on May 31, 2015
with a weighted-average price of $0.016 and $0.016 per share, respectively.
| |
|
|
|
|
Options |
|
Options |
| |
|
|
|
|
Outstanding |
|
Exercisable |
| Number of options |
|
|
|
6,173,750 |
|
6,173,750 |
| Aggregate intrinsic value of options |
|
$ - |
|
$ - |
| Weighted average remaining contractual term (years) |
8.74 |
|
8.74 |
| Weighted average exercise price |
|
|
$ 0.016 |
|
$ 0.016 |
2013 Omnibus Incentive
Plan
The Company is authorized
to issue up to 10,000,000 shares of common stock under its 2013 Omnibus Incentive Plan to employees, officers, directors and consultants.
The issuance adoption of this plan has been approved by the Company’s Board of Directors on May 20, 2013 and was approved
by our shareholders on January 27, 2014. Any options are granted at the fair market value of the common stock on the date of the
grant and have terms of up to ten years. Under the 2013 Omnibus Incentive Plan the price of the granted common stock options are
equal to the fair market value of such shares on the date of grant.
On September 11, 2013,
we issued 1,000,000 S-8 shares to a consultant in payment for investor relations work for the Company. On January 3, 2014, we issued
1,000,000 S-8 shares to a consultant in payment for services to be provided for the Company. On November 15, 2014 we issued 1,000,000
S-8 shares to a consultant in payment for investor relations work for the Company. We have 7,000,000 shares of common stock available
for future issuance under our 2013 Omnibus Incentive Plan as of May 31, 2015.
ONCOLOGIX TECH, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
| | |
Number of Securities | |
| |
Number of Securities |
| | |
To Be Issued Upon | |
Weighted Average | |
Remaining Available |
| | |
Exercise of Outstanding | |
Exercise Price of | |
For Future |
| | |
Options | |
Outstanding Options | |
Issuance Under Plans |
| | |
| | | |
| | | |
| | |
| Equity compensation plans | |
| | | |
| | | |
| | |
| approved by stockholders | |
| — | | |
$ | 0.00 | | |
| 7,000,000 | |
| | |
| | | |
| | | |
| | |
| Equity compensation plans | |
| | | |
| | | |
| | |
| not approved by stockholders | |
| — | | |
$ | 0.00 | | |
| — | |
| | |
| | | |
| | | |
| | |
| TOTAL | |
| — | | |
$ | 0.00 | | |
| 7,000,000 | |
NOTE 13
- RELATED PARTY TRANSACTIONS AND CONTINGENCIES:
FINANCING WITH RELATED
PARTIES:
During the three and nine
months ended May 31, 2015 and 2014, the Company entered into financing agreements with related parties of the Company. Please see
Note 11 – Notes Payable for further descriptions of these transactions.
NOTE 14 – BUSINESS
SEGMENTS
We
identify our reportable segments based on our management structure, financial data and market. We have identified three business
segments: Personal Care Services and Medical Device Products and Medical Products & Technologies
Our
Personal Care Service segment consists of the services of Angels of Mercy, Inc. This segment provides non-medical, Personal Care
Attendant (PCA) services, Supervised Independent Living (SIL), Long-Term Senior Care, and other approved programs performed by
a trained caregiver that will meet the health service needs of beneficiaries whose disabilities preclude the performance of certain
independent living skills related to the activities of daily living (ADL).
Our
Medical Device Manufacturing segment consists of the products of Dotolo Research Corporation. This segment designs, develops, manufactures
and distributes the Toxygen hardware system with disposable speculums and medical grade tubing.
Our
Medical Products and Technologies segment will consist of Advanced Medical Products and Technologies, Esteemcare Inc. and Affordable
Medical Inventory Solutions Inc. and future acquisitions.
The
accounting policies of the segments are the same as those described, or referred to, in Note 2 - Summary of Significant Accounting
Policies. Assets and related depreciation expense in the column labeled “Corporate Overhead” pertain to capital assets
maintained at the corporate level. Segment loss from operations in the “Corporate Overhead” column contains corporate
related expenses not allocable to the operating segments. Intercompany transactions between operating segments were immaterial
in all periods presented.
ONCOLOGIX TECH, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
Below are the segment
assets as of May 31, 2015.
| As of May 31, 2015 |
| | |
Personal Care | |
Medical Device | |
Med. Products | |
Corporate | |
|
| | |
Segment | |
Segment | |
Segment | |
Overhead | |
Totals |
| | |
(Unaudited) | |
(Unaudited) | |
(Unaudited) | |
(Unaudited) | |
|
| ASSETS |
| |
| |
| |
| |
| |
|
| Current Assets: | |
| | | |
| | | |
| | | |
| | | |
| | |
| Cash and cash equivalents | |
$ | 76,633 | | |
$ | 120 | | |
$ | 21,008 | | |
$ | 22,724 | | |
$ | 120,485 | |
| Accounts receivable (net) | |
| 233,710 | | |
| — | | |
$ | 803,299 | | |
| — | | |
| 1,037,009 | |
| Inventory | |
| — | | |
| 31,271 | | |
$ | 106,165 | | |
| — | | |
| 137,436 | |
| Prepaid expenses and other current assets | |
| — | | |
| — | | |
$ | 2,946 | | |
| 12,965 | | |
| 15,911 | |
| Prepaid commissions and finders' fees | |
| — | | |
| — | | |
| 85 | | |
| 3,889 | | |
| 3,974 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Total current assets | |
| 310,343 | | |
| 31,391 | | |
| 933,503 | | |
| 39,578 | | |
| 1,314,815 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Property and equipment (net) | |
| 16,211 | | |
| 15,217 | | |
| 3,283 | | |
| 535 | | |
| 35,246 | |
| Deposits and other assets | |
| 2,307 | | |
| 32,303 | | |
| 9,866 | | |
| 33,202 | | |
| 77,678 | |
| Goodwill | |
| 564,075 | | |
| 1,217,704 | | |
| 622,610 | | |
| — | | |
| 2,404,389 | |
| Patents, registrations (net of amortization) | |
| — | | |
| 19,903 | | |
| — | | |
| — | | |
| 19,903 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Total assets | |
$ | 892,936 | | |
$ | 1,316,518 | | |
$ | 1,569,262 | | |
$ | 73,315 | | |
$ | 3,852,031 | |
Below are the segment
assets as of August 31, 2014.
| As of August 31, 2014 |
| | |
Personal Care | |
Medical Device | |
Med. Products | |
Corporate | |
|
| | |
Segment | |
Segment | |
Segment | |
Overhead | |
Totals |
| | |
| |
| |
| |
| |
|
| ASSETS |
| |
| |
| |
| |
| |
|
| Current Assets: | |
| | | |
| | | |
| | | |
| | | |
| | |
| Cash and cash equivalents | |
$ | 9,336 | | |
$ | (110 | ) | |
$ | 1,000 | | |
$ | 7,278 | | |
$ | 17,504 | |
| Accounts receivable (net) | |
| 213,399 | | |
| — | | |
| — | | |
| — | | |
| 213,399 | |
| Inventory | |
| — | | |
| 31,271 | | |
| — | | |
| — | | |
| 31,271 | |
| Prepaid expenses and other current assets | |
| — | | |
| — | | |
| — | | |
| 9,307 | | |
| 9,307 | |
| Prepaid commissions | |
| — | | |
| — | | |
| — | | |
| 3,152 | | |
| 3,152 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Total current assets | |
| 222,735 | | |
| 31,161 | | |
| 1,000 | | |
| 19,737 | | |
| 274,633 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Property and equipment (net) | |
| 21,287 | | |
| 17,893 | | |
| — | | |
| 787 | | |
| 39,967 | |
| Deposits and other assets | |
| 2,082 | | |
| 12,500 | | |
| — | | |
| — | | |
| 14,582 | |
| Goodwill | |
| 564,075 | | |
| 1,217,704 | | |
| — | | |
| — | | |
| 1,781,779 | |
| Patents, registrations (net of amortization) | |
| — | | |
| 24,497 | | |
| — | | |
| — | | |
| 24,497 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Total assets | |
$ | 810,179 | | |
$ | 1,303,755 | | |
$ | 1,000 | | |
$ | 20,524 | | |
$ | 2,135,458 | |
ONCOLOGIX TECH, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
Below are the statements of operations for the reporting periods
presented.
| | |
For the Three Months Ended May 31, 2015 |
| | |
| Personal Care | | |
| Medical Device | | |
| Medical Products | | |
| Corporate | | |
| | |
| | |
| Segment | | |
| Segment | | |
| Segment | | |
| Overhead | | |
| Totals | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Revenues | |
$ | 812,626 | | |
$ | — | | |
$ | 423,030 | | |
$ | — | | |
$ | 1,235,656 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Cost of revenues | |
| 698,215 | | |
| — | | |
| 187,381 | | |
| — | | |
| 885,596 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Gross profit | |
| 114,411 | | |
| — | | |
| 235,649 | | |
| — | | |
| 350,060 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Operating expenses: | |
| | | |
| | | |
| | | |
| | | |
| | |
| General and administrative | |
| 81,451 | | |
| 14,739 | | |
| 159,793 | | |
| 187,906 | | |
| 443,889 | |
| Research and development Expense | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
| Depreciation and amortization | |
| 2,262 | | |
| 2,423 | | |
| 253 | | |
| 84 | | |
| 5,022 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Total operating expenses | |
| 83,713 | | |
| 17,162 | | |
| 160,046 | | |
| 187,990 | | |
| 448,911 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Loss from operations | |
| 30,698 | | |
| (17,162 | ) | |
| 75,603 | | |
| (187,990 | ) | |
| (98,851 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Other income (expense): | |
| | | |
| | | |
| | | |
| | | |
| | |
| Interest and finance charges | |
| (81,952 | ) | |
| (1,500 | ) | |
| (3,076 | ) | |
| (351,380 | ) | |
| (437,908 | ) |
| Interest and finance charges - related parties | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
| Other income (expenses) | |
| 11,307 | | |
| 14 | | |
| — | | |
| — | | |
| 11,321 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Total other income (expense) | |
| (70,645 | ) | |
| (1,486 | ) | |
| (3,076 | ) | |
| (351,380 | ) | |
| (426,587 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Loss from continuing operations | |
$ | (39,947 | ) | |
$ | (18,648 | ) | |
$ | 72,527 | | |
$ | (539,370 | ) | |
$ | (525,438 | ) |
| | |
For the Three Months Ended May 31, 2014 |
| | |
| Personal Care | | |
| Medical Device | | |
| Medical Products | | |
| Corporate | | |
| | |
| | |
| Segment | | |
| Segment | | |
| Segment | | |
| Overhead | | |
| Totals | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Revenues | |
$ | 988,385 | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | 988,385 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Cost of revenues | |
| 776,406 | | |
| 12,351 | | |
| — | | |
| — | | |
| 788,757 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Gross profit | |
| 211,979 | | |
| (12,351 | ) | |
| — | | |
| — | | |
| 199,628 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Operating expenses: | |
| | | |
| | | |
| | | |
| | | |
| | |
| General and administrative | |
| 166,867 | | |
| 4,979 | | |
| — | | |
| 105,104 | | |
| 276,950 | |
| Depreciation and amortization | |
| 3,157 | | |
| 2,423 | | |
| — | | |
| 84 | | |
| 5,664 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Total operating expenses | |
| 170,024 | | |
| 7,402 | | |
| — | | |
| 105,188 | | |
| 282,614 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Loss from operations | |
| 41,955 | | |
| (19,753 | ) | |
| — | | |
| (105,188 | ) | |
| (82,986 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Other income (expense): | |
| | | |
| | | |
| | | |
| | | |
| | |
| Interest and finance charges | |
| (80,786 | ) | |
| (2,250 | ) | |
| — | | |
| (84,438 | ) | |
| (167,474 | ) |
| Interest and finance charges - related parties | |
| — | | |
| (791 | ) | |
| — | | |
| — | | |
| (791 | ) |
| Loss on conversion of notes payable - related parties | |
| — | | |
| — | | |
| — | | |
| (62,151 | ) | |
| (62,151 | ) |
| Loss on disposal of assets | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | |
| Other income (expenses) | |
| 74,667 | | |
| (217 | ) | |
| — | | |
| — | | |
| 74,450 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Total other income (expense) | |
| (6,119 | ) | |
| (3,258 | ) | |
| — | | |
| (146,589 | ) | |
| (155,966 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Loss from continuing operations | |
$ | 35,836 | | |
$ | (23,011 | ) | |
$ | — | | |
$ | (251,777 | ) | |
$ | (238,952 | ) |
ONCOLOGIX TECH, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
Below are the statements
of operations for the reporting periods presented.
| | |
For the Nine Months Ended May 31, 2015 |
| | |
| Personal Care | | |
| Medical Device | | |
| Medical Products | | |
| Corporate | | |
| | |
| | |
| Segment | | |
| Segment | | |
| Segment | | |
| Overhead | | |
| Totals | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Revenues | |
$ | 2,573,547 | | |
$ | — | | |
$ | 1,051,860 | | |
$ | — | | |
$ | 3,625,407 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Cost of revenues | |
| 2,129,572 | | |
| — | | |
| 499,225 | | |
| — | | |
| 2,628,797 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Gross profit | |
| 443,975 | | |
| — | | |
| 552,635 | | |
| — | | |
| 996,610 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Operating expenses: | |
| | | |
| | | |
| | | |
| | | |
| | |
| General and administrative | |
| 317,165 | | |
| 58,489 | | |
| 424,693 | | |
| 579,422 | | |
| 1,379,769 | |
| Research and development expense | |
| — | | |
| 10,000 | | |
| — | | |
| — | | |
| 10,000 | |
| Depreciation and amortization | |
| 6,289 | | |
| 7,269 | | |
| 546 | | |
| 252 | | |
| 14,356 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Total operating expenses | |
| 323,454 | | |
| 75,758 | | |
| 425,239 | | |
| 579,674 | | |
| 1,404,125 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Loss from operations | |
| 120,521 | | |
| (75,758 | ) | |
| 127,396 | | |
| (579,674 | ) | |
| (407,515 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Other income (expense): | |
| | | |
| | | |
| | | |
| | | |
| | |
| Interest and finance charges | |
| (244,613 | ) | |
| (5,500 | ) | |
| (3,848 | ) | |
| (836,052 | ) | |
| (1,090,013 | ) |
| Interest and finance charges - related parties | |
| — | | |
| (1,051 | ) | |
| — | | |
| — | | |
| (1,051 | ) |
| Other income (expenses) | |
| 8,541 | | |
| (3,854 | ) | |
| — | | |
| (204 | ) | |
| 4,483 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Total other income (expense) | |
| (236,072 | ) | |
| (10,405 | ) | |
| (3,848 | ) | |
| (836,256 | ) | |
| (1,086,581 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Loss from operations | |
$ | (115,551 | ) | |
$ | (86,163 | ) | |
$ | 123,548 | | |
$ | (1,415,930 | ) | |
$ | (1,494,096 | ) |
| | |
For the Nine Months Ended May 31, 2014 |
| | |
| Personal Care | | |
| Medical Device | | |
| Medical Products | | |
| Corporate | | |
| | |
| | |
| Segment | | |
| Segment | | |
| Segment | | |
| Overhead | | |
| Totals | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Revenues | |
$ | 2,696,776 | | |
$ | — | | |
$ | — | | |
$ | — | | |
$ | 2,696,776 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Cost of revenues | |
| 2,030,450 | | |
| 36,350 | | |
| — | | |
| — | | |
| 2,066,800 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Gross profit | |
| 666,326 | | |
| (36,350 | ) | |
| — | | |
| — | | |
| 629,976 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Operating expenses: | |
| | | |
| | | |
| | | |
| | | |
| | |
| General and administrative | |
| 506,387 | | |
| 28,222 | | |
| — | | |
| 465,301 | | |
| 999,910 | |
| Depreciation and amortization | |
| 9,636 | | |
| 7,268 | | |
| — | | |
| 252 | | |
| 17,156 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Total operating expenses | |
| 516,023 | | |
| 35,490 | | |
| — | | |
| 465,553 | | |
| 1,017,066 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Loss from operations | |
| 150,303 | | |
| (71,840 | ) | |
| — | | |
| (465,553 | ) | |
| (387,090 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Other income (expense): | |
| | | |
| | | |
| | | |
| | | |
| | |
| Interest and finance charges | |
| (171,837 | ) | |
| (8,560 | ) | |
| — | | |
| (454,436 | ) | |
| (634,833 | ) |
| Interest and finance charges - related parties | |
| — | | |
| (2,348 | ) | |
| — | | |
| (15,708 | ) | |
| (18,056 | ) |
| Loss on conversion of notes payable - related parties | |
| — | | |
| — | | |
| — | | |
| (155,728 | ) | |
| (155,728 | ) |
| Loss on disposal of assets | |
| (28,748 | ) | |
| — | | |
| — | | |
| — | | |
| (28,748 | ) |
| Other income (expenses) | |
| 72,775 | | |
| (713 | ) | |
| — | | |
| — | | |
| 72,062 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Total other income (expense) | |
| (127,810 | ) | |
| (11,621 | ) | |
| — | | |
| (625,872 | ) | |
| (765,303 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Loss from operations | |
$ | 22,493 | | |
$ | (83,461 | ) | |
$ | — | | |
$ | (1,091,425 | ) | |
$ | (1,152,393 | ) |
ONCOLOGIX TECH, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
NOTE 15 - JOINT VENTURE
Institut für Umwelttechnologien GmbH
(IUT)
In February 2009, we entered
into a Technology Agreement with Institut für Umwelttechnologien GmbH, a German Company (“IUT”). On September
23, 2010, the Company signed a Memorandum of Understanding with Institut für Umwelttechnologien GmbH and IUT Medical GMBH
confirming certain understandings among the parties with respect to their future relationships and business activities as originally
contemplated in their Technology Agreement of February 27, 2009, which was reaffirmed. On November 1, 2013, with the disposal of
the Company’s subsidiary Oncologix Corporation, the company also ended its relationship with IUT and IUTM.
NOTE 16
- RETIREMENT PLAN
Currently, the Company does not have a retirement
plan in place.
NOTE 17 - RECENT ACCOUNTING PRONOUNCEMENTS
We have evaluated all Accounting
Standards Updates through the date the financial statements were issued and do not believe any will have a material impact on our
financial condition or results of operations.
NEW ACCOUNTING STANDARD
In July 2012, the Financial
Accounting Standards Board (“FASB”) issued Accounting Standards Update 2012-02 “Intangibles – Goodwill
and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment” (“ASU 2012-02”). ASU 2012-02
permits entities to first assess qualitative factors to determine whether it is more likely than not that the fair value of an
indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment
test. Under the amendments in ASU 2012-02, an entity is not required to calculate the fair value of an indefinite-lived intangible
asset unless it determines that it is more likely than not that the fair value of the asset is less than its carrying amount. An
entity also will have the option to bypass the qualitative assessment for any indefinite-lived intangible asset in any period and
proceed directly to performing the quantitative impairment test. ASU 2012-02 is effective for interim and annual indefinite-lived
intangible asset impairment tests performed for fiscal years beginning on or after September 15, 2012, with early adoption permitted.
The Company’s adoption of ASU 2012-02 is not expected to have an impact on its consolidated financial statements.
ONCOLOGIX TECH, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
NOTE 18 – STATEMENT OF CASH FLOWS
For the nine months ended
May 31, 2015, these supplemental non-cash investing and financing activities are summarized as follows:
Amount
| On November 15, 2014, the Company issued 1,000,000 S-8 shares of common stock in payment for a investor relations consulting contract. |
4,000 |
| |
|
| On November 15, 2014, the Company issued 5,000,000 shares of common stock in payment for investor relations consulting contract. |
20,000 |
| |
|
| On November 17, 2014, the Company issued a $25,000 convertible promissory note to a non-related party. We recorded a beneficial conversion feature the in amount of $10,545 related to that transaction. |
10,545 |
| |
|
| On November 17, 2014, the Company issued a $25,000 convertible promissory note to a non-related party. We recorded a beneficial conversion feature the in amount of $10,545 related to that transaction. |
10,545 |
| |
|
| On January 22, 2015, the Company issued a $35,000 convertible promissory note to a non-related party. We recorded a beneficial conversion feature the in amount of $35,000 related to that transaction. |
35,000 |
| |
|
| On January 30, 2015, the Company issued 5,000,000 shares of common stock in payment for investor relations consulting contract. |
38,500 |
| |
|
| On January 30, 2015, the Company issued a $50,000 convertible promissory note to a non-related party. We recorded a beneficial conversion feature the in amount of $50,000 related to that transaction. |
50,000 |
| |
|
| On February 5 2015, the Company issued a $50,000 convertible promissory note to a non-related party. We recorded a beneficial conversion feature the in amount of $50,000 related to that transaction. |
50,000 |
| |
|
| On February 4, 2015, the Company issued a $35,000 convertible promissory note to a non-related party. We recorded a beneficial conversion feature the in amount of $35,000 related to that transaction. |
35,000 |
| |
|
| On February 12, 2015, the Company issued a $75,000 convertible promissory note to a non-related party. We recorded a beneficial conversion feature the in amount of $75,000 related to that transaction. |
75,000 |
| |
|
| On February 25, 2015, the Company issued a $30,000 convertible promissory note to a non-related party. We recorded a beneficial conversion feature the in amount of $30,000 related to that transaction. |
30,000 |
| |
|
| On March 5, 2015, the Company issued a $36,750 convertible promissory note to a non-related party. We recorded a beneficial conversion feature the in amount of $25,698 related to that transaction. |
25,698 |
| |
|
| On March 11, 2015, the Company issued a $88,000 convertible promissory note to a non-related party. We recorded a beneficial conversion feature the in amount of $49,539 related to that transaction. |
49,539 |
| |
|
ONCOLOGIX TECH, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
NOTE 18 – STATEMENT OF CASH FLOWS
For the nine months ended
May 31, 2015, these supplemental non-cash investing and financing activities are summarized as follows:
Amount
| On March 11, 2015, the Company issued a $30,000 convertible promissory note to a non-related party. We recorded a beneficial conversion feature the in amount of $20,100 related to that transaction. |
20,100 |
| |
|
| On March 25, 2015, the Company issued a $50,000 convertible promissory note to a non-related party. We recorded a beneficial conversion feature the in amount of $29,404 related to that transaction. |
29,404 |
| |
|
| On March 30, 2015, the Company issued a $32,000 convertible promissory note to a non-related party. We recorded a beneficial conversion feature the in amount of $15,790 related to that transaction. |
15,790 |
| |
|
| On April 7, 2015, the Company issued a $27,500 convertible promissory note to a non-related party. We recorded a beneficial conversion feature the in amount of $10,372 related to that transaction. |
10,372 |
| |
|
| On April 8, 2015, the Company issued a $58,000 convertible promissory note to a non-related party. We recorded a beneficial conversion feature the in amount of $39,146 related to that transaction. |
39,146 |
| |
|
| On May 7, 2015, the Company issued a $35,000 convertible promissory note to a non-related party. We recorded a beneficial conversion feature the in amount of $21,452 related to that transaction. |
21,452 |
| |
|
| On May 8, 2015, the Company issued a $45,000 convertible promissory note to a non-related party. We recorded a beneficial conversion feature the in amount of $29,715 related to that transaction. |
29,715 |
| |
|
| On May 22, 2015, the Company issued a $50,000 convertible promissory note to a non-related party. We recorded a beneficial conversion feature the in amount of $30,645 related to that transaction. |
30,645 |
| |
|
| On May 22, 2015, the Company issued a $75,000 convertible promissory note to a non-related party. We recorded a beneficial conversion feature the in amount of $45,968 related to that transaction. |
45,968 |
| |
|
| Total non-cash transactions from investing and financing activities. |
$ 676,419 |
ONCOLOGIX TECH,
INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
For the nine months ended
May 31, 2014, these supplemental non-cash investing and financing activities are summarized as follows:
| On September 11, 2013, the Company issued 1,500,000 warrants to an affiliated party for additional compensation related to an operating capital investment. The value of these warrants was expensed as interest and finance charges. |
$ 15,656 |
| |
|
| On September 11, 2013, the Company issued 1,000,000 S-8 shares of common stock in payment for a investor relations consulting contract. |
11,500 |
| |
|
| On October 2, 2013, the Company issued a $25,000 convertible promissory note to a non-related party. We recorded a beneficial conversion feature the in amount of $25,000 related to that transaction. |
25,000 |
| |
|
| On October 3, 2013, the Company recorded a loss on conversion of a convertible promissory note in the amount of $15,620. |
15,620 |
| |
|
| On November 5, 2013 and November 8, 2013, the Company issued a total of 3,000,000 warrants to a non-related party as additional compensation for an operating capital investment. |
14,805 |
| |
|
| On December 3, 2013, the Company recorded a loss on conversion of a convertible promissory note in the amount of $12,069. |
12,069 |
| |
|
| On December 3, 2013, the Company recorded a loss on conversion of a convertible promissory note in the amount of $9,720. |
9,720 |
| |
|
| On December 3, 2013, the Company issued a total of 1,000,000 warrants as additional compensation. |
5,992 |
| |
|
| On December 20, 2013, the Company issued a total of 3,000,000 warrants as additional compensation. |
7,746 |
| |
|
| On January 3, 2014, the Company issued 2,000,000 shares of common stock in payment for a services contract. |
22,000 |
| |
|
| On January 13, 2014, the Company recorded a loss on conversion of a convertible promissory note in the amount of $26,154. |
26,154 |
| |
|
| On January 14, 2014, the Company issued 1,000,000 shares of common stock as partial compensation for a investor relations contract. |
19,000 |
| |
|
| On January 21, 2014, the Company issued 3,500,000 shares of common stock as additional compensation for finder’s fees. |
45,500 |
| |
|
| On January 21, 2014, the Company issued 1,500,000 shares of common stock as additional compensation for finder’s fees. |
30,000 |
| |
|
| On January 31, 2014, the Company recorded a loss on conversion of a convertible promissory note in the amount of $16,667. |
16,667 |
| |
|
| On February 7, 2014, the Company issued 1,000,000 shares of common stock as additional compensation for finder’s fees. |
9,000 |
ONCOLOGIX TECH, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
For the nine months ended
May 31, 2014, these supplemental non-cash investing and financing activities are summarized as follows (continued):
| On February 7, 2014, the Company issued 3,000,000 shares of common stock as additional compensation for finder’s fees. |
5,151 |
| |
|
| On February 24, 2014, the Company recorded a loss on conversion of a convertible promissory note in the amount of $2,308. |
2,308 |
| |
|
| On March 19, 2014, the Company recorded a beneficial conversion feature on the issuance of a convertible note. |
26,500 |
| |
|
| On March 31, 2014, the Company recorded a loss on conversion of a convertible promissory note in the amount of $30,000. |
30,000 |
| |
|
| On April 6, 2014, the Company recorded a loss on conversion of a convertible promissory note in the amount of $1,468. |
1,468 |
| |
|
| On April 6, 2014, the Company recorded a loss on conversion of a convertible promissory note in the amount of $30,683 |
30,683 |
| |
|
| On April 8, 2014, the Company recorded a beneficial conversion feature on the issuance of a convertible note. |
50,000 |
| |
|
| On April 25, 2014, the Company recorded a beneficial conversion feature on the issuance of a convertible note. |
25,000 |
| |
|
| On May 21, the Company recorded a discount for the issuance of 9,583,333 warrants in connection with the issuance of a convertible note. |
38,322 |
| |
|
| Total non-cash transactions from investing and financing activities. |
$ 495,861 |
NOTE 19 - EMPLOYMENT AGREEMENTS
On March 22, 2013, Wayne
Erwin, the Company’s Chief Executive Officer, signed a three year employment agreement. The agreement provides for an annual
salary of $120,000 along with a monthly auto allowance and health insurance allowance totaling $1,250. The annual salary was increased
to $150,000 per year beginning March 2015. Annual increases are to be approved by the Company’s Board of Directors or Compensation
Committee. During the nine months ended May 31, 2015 and 2014, $97,500 and $101,250 was expensed as salary, respectively.
On October 1, 2013,
Michael Kramarz, the Company’s Chief Financial Officer, signed a three year employment agreement. The agreement
provides for an annual salary of $80,000 along with a monthly auto allowance and health insurance allowance totaling $500.
The annual salary was increased to $120,000 beginning on March 1, 2015. Annual increases are to be approved by the
Company’s Board of Directors or Compensation Committee. During the nine months ended May 31, 2015 and 2014, $76,333 and
62,669 was expensed as salary, respectively.
On August 1, 2013, Vickie
Hart, the President of Amian Angels Inc., signed a three year employment agreement. The agreement provides for an annual salary
of $52,000 along with a monthly health insurance allowance totaling $400. The annual salary was increased to $85,000 beginning
on March 1, 2015. Annual increases are to be approved by the Company’s Board of Directors or Compensation Committee. During
the nine months ended May 31, 2015 and 2014, $49,900 and $46,214 was expensed as salary, respectively.
ONCOLOGIX TECH, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
On July 16, 2014, Harold
Halman, the President of our Medical Products Segment, signed a three year employment agreement. The agreement provides for an
annual salary of $85,000, along with a monthly auto allowance and health insurance allowance totaling $1,300 plus bonus allowances.
Annual increases are to be approved by the Company’s Board of Directors or Compensation Committee. During the nine months
ended May 31, 2015 and 2014, $63,750 and $0 was expensed as salary, respectively.
NOTE 20 – COMMITMENTS AND CONTINGENCIES
On June 6, 2014, the Company
and its subsidiary Dotolo entered into a services agreement with E & R Industries to provide the Company with retooling and
redesign of Dotolo’s disposable products. The contract calls for periodic cash payments totaling $60,000 along with the issuance
of 5,000,000 common stock shares upon meeting certain milestones.
On June 6, 2014, the Company
and its subsidiary Dotolo entered into a services agreement with Schmitt Engineering to provide the Company with engineering redesign
services of its Toxygen hardware system. The contract calls for periodic cash payments totaling $30,000 along with the issuance
of 3,000,000 common stock shares upon meeting certain milestones.
NOTE 21
- SUBSEQUENT EVENTS
On June 3 2015, the Company
entered into a 1 year consulting agreement. The Company agrees to pay consultant 4% of any monies raised by the efforts of the
consultant. In addition, the Company issued 2,500,000 shares of its Common Stock as additional compensation.
On June 15, 2015 we issued
a convertible promissory note in the principal amount of $50,000. This promissory note bears interest at a rate of 8% per annum
and is due on December 31, 2015. The note is convertible at a 38% discount of the average of the three lowest closing bid prices
immediately during the 20 days preceding the date of conversion. At no time may the holder of the note convert the note into shares
exceeding 4.99% of the Company’s then outstanding common stock shares.
On June 5, 2015 the Company
entered into a securities transfer agreement with an accredited investor as well as a current convertible note holder. The agreement
called for the accredited investor to purchase $45,000 of the current convertible note holder note to repay our former CEO. The
Company issued to the accredited investor a convertible promissory note bearing interest at 8% and convertible at a 38% discount
of the average of the three lowest closing bid prices immediately during the 20 days preceding the date of conversion. At no time
may the holder of the note convert the note into shares exceeding 4.99% of the Company’s then outstanding common stock shares.
ITEM 2. Management’s Discussion
And Analysis of Financial Condition and Results of Operation
THIS QUARTERLY
REPORT ON FORM 10-QSB CONTAINS CERTAIN STATEMENTS WHICH ARE FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE SAFE HARBOR PROVISIONS
OF SECTION 27A OF THE SECURITIES ACT OF 1993, AS AMENDED, AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. THESE
STATEMENTS RELATE TO FUTURE EVENTS, INCLUDING THE FUTURE FINANCIAL PERFORMANCE OF ONCOLOGIX. IN SOME CASES, YOU CAN IDENTIFY FORWARD-LOOKING
STATEMENTS BY TERMINOLOGY SUCH AS “MAY,” “WILL,” “SHOULD,” “EXPECTS,” “PLANS,”
“ANTICIPATES,” “BELIEVES,” “ESTIMATES,” “PREDICTS,” “POTENTIAL,” OR
“CONTINUE” OR THE NEGATIVE OF SUCH TERMS AND OTHER COMPARABLE TERMINOLOGY. THESE STATEMENTS ONLY REFLECT MANAGEMENT’S
EXPECTATIONS AND ESTIMATES AS OF THE DATE OF THIS REPORT. ACTUAL EVENTS OR RESULTS MAY DIFFER MATERIALLY FROM THESE EXPECTATIONS.
IN EVALUATING THOSE STATEMENTS, YOU SHOULD SPECIFICALLY CONSIDER VARIOUS FACTORS, INCLUDING THE RISKS INCLUDED IN THE REPORTS FILED
BY ONCOLOGIX WITH THE SEC. THESE FACTORS MAY CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM ANY FORWARD-LOOKING STATEMENTS. ONCOLOGIX
IS NOT UNDERTAKING ANY OBLIGATION TO UPDATE ANY FORWARD-LOOKING STATEMENTS CONTAINED IN THIS REPORT.
This report
should be read in conjunction with our Annual report on Form 10-K for the fiscal year ended August 31, 2014.
OVERVIEW
Oncologix Tech, Inc. is
a diversified medical holding company with operating segments in medical device, healthcare services and medical products and technologies.
We operate and manufacture Class II medical device products, provides Personal Healthcare Services and provides Home Medical Inventory
(HME) and Durable Medical Inventory (DME) sales in licensed markets. For its clients, Oncologix provides FDA approved medical devices,
State licensed healthcare services and medical product sales. For its shareholders, Oncologix operates profitable business divisions
that build, maintain and nourish shareholder value. The Company’s corporate mission is to be the best small cap medical device
and healthcare services holding company in North America.
We were originally formed
in 1995 and in 2000 we changed our name to "BestNet Communications Corp." At that time we provided worldwide long distance
telephone communication and teleconferencing services to commercial and residential consumers through the internet, which we disposed
of in 2007 due to lack of profitability. In July 2006 we changed our business model to medical device products. In July 2006
we acquired JDA Medical Technologies, Inc. ("JDA") and merged this business into Oncologix Corporation, our wholly owned
subsidiary. On January 22, 2007, we changed our name to Oncologix Tech, Inc., to reflect this new business model. Our business
at this time was the development of a medical device for brachytherapy (radiation therapy), called the “Oncosphere”
(or “Oncosphere System”), for the advanced medical treatment of soft tissue cancers. Due to a lack of funding, we suspended
these development activities on December 31, 2007. On November 1, 2013, due to the development of the brachytherapy device being
several years away, indication that the product could not be marketed and no guarantee of FDA approvals, it was determined that
continued financial support of this product by Oncologix Corporation would cost the Company substantial capital beyond its
means and the Company’s management and Board of Directors disposed of Oncologix Corporation and its Brachytherapy medical
device subsidiary. Furthermore, as part of the disposal, the Company was relieved of over $90,000 in debt.
On March 22, 2013, we acquired
all the outstanding stock of Dotolo Research Corporation (“Dotolo”), a FDA Registered, Class II, medical device manufacturer
with 25 years of product sales in the hydro-colonic irrigation, bowel preparation market. Dotolo Research Corporation began operations
in 1989 and sells hardware and disposable products to a customer base of over 900+ customers both domestically and internationally.
The Company currently operates in a limited, but competitive environment in hydro-colonic irrigation, of which there are only four
(4) companies approved by the FDA to manufacture a Class II medical device for colonic-hydro therapy. Since the acquisition,
we have not had significant revenues from sales of our products, including sales to medical facilities due to a lack of operating
capital needed to procure raw material inventory to currently fill customers’ orders.
On August 1, 2013, we acquired
the outstanding stock of Angels of Mercy, Inc. (“AOM”). Angels provides non-medical, Personal Care Attendant (PCA)
services, Supervised Independent Living (SIL), Long-Term Senior Care, and other approved health service programs performed by a
trained caregiver that will meet the health service needs of beneficiaries whose disabilities preclude the performance of certain
independent living skills related to the activities of daily living (ADL).
On December 10, 2013, Angels
of Mercy, Inc. acquired the assets of Amian Health Services LLC and Amian Health Services of Alex LLC, herein after referred to
as “Amian”. Amian delivers health-care care-services who provide routine health and personal care support
with Activities of Daily Living (ADL) to clients with physical impairments or disabilities in private homes, nursing care facilities,
hospice care settings, and other residential settings. Amian holds both PCA-Medicaid Waiver Provider and Residential Rehabilitation/Supervised
Independent Living (SIL), and personal care services for Veterans with licenses issued by the Division of Licensing and Certification
of the Department of Social Services, Veterans Administration Social Services and the Louisiana Department of Health and Hospitals.
All administrative personnel of Amian have been merged into to gain operating synergies. This company changed its name to
Amian Angels, Inc. (“Amian Angels”) in August 2014.
On July 21, 2014 we formed
Advanced Medical Products and Technologies Inc. to enter into the Durable Medical and Home Medical Inventory markets. We anticipate
acquiring active companies in this area to develop our Medical Products and Technologies Segment.
On
September 25, 2014, we acquired the outstanding stock of Esteemcare, Inc. and its wholly owned subsidiary Affordable Medical Inventory
Solutions, Inc. Esteemcare, Inc is a Durable and Home Medical inventory and supply distributor for respiratory therapy and is Accredited
by the “Joint Commission on Healthcare Organizations”.
Esteemcare
targets patients with sleep obstructive disorders or related chronic illnesses who are insured by Medicare, Medicaid, third-party
insurers, or have the ability to pay for our products from their own private resources. Sleep apnea is a serious sleep disorder
that occurs when a person's breathing is interrupted during sleep. People with untreated sleep apnea stop breathing repeatedly
during their sleep, sometimes hundreds of times. This means the brain -- and the rest of the body -- may not get enough oxygen.
RECENT ACQUISITIONS
AND DIVESTURES
In
furthering our strategy to be the best small cap medical device and healthcare holding company, we acquired Dotolo Research Corporation
(“DOTOLO”) on March 22, 2013, Angels of Mercy, Inc. (“AOM”) on August 1, 2013, Amian Health Services on
December 10, 2013, and Esteemcare Inc. on September 25, 2014. These acquisitions are further described in Note 4 – Acquisition
Activities, in the Notes to Unaudited Condensed Consolidated Financial Statements.
RESULTS OF OPERATIONS
Comparison of the three and nine months
ended May 31, 2015 (‘fiscal 2015”) and 2014 (‘fiscal 2014”)
Revenue
Revenues increased to $1,235,656
for the three months ended May 31, 2015, from $988,385 from the comparable period in fiscal 2014. The increases were primarily
due to the acquisitions of Amian Health Services in December 2013 and Esteemcare in September 2014.
Revenues increased to $3,625,407
for the nine months ended May 31, 2015, from $2,696,776 from the comparable period in fiscal 2014. The increases were primarily
due to the acquisitions of Amian Health Services in December 2013 and Esteemcare in September 2014.
Cost of Revenues
Cost of revenues increased
to $885,596 for the three months ended May 31, 2015, from $788,757 during the comparable period in fiscal 2014. Cost of revenues
for Dotolo were $0 for the three months ended May 31, 2015. Cost of revenues for Amian Angels were $698,215 for the three months
ended May 31, 2015 and consist primarily of wages paid to personal care service employees who directly provide the PCA and SIL
services. Cost of revenues for Esteemcare were $187,371 for the three months ended May 31, 2015 and consist primarily of purchases
of leased and sold inventory.
Cost of revenues increased
to $2,628,797 for the nine months ended May 31, 2015, from $2,066,800 during the comparable period in fiscal 2014. Cost of revenues
for Dotolo were $0 for the nine months ended May 31, 2015. Cost of revenues for Amian Angels were $2,129,572 for the nine months
ended May 31, 2015 and consist primarily of wages paid to personal care service employees who directly provide the PCA and SIL
services. Cost of revenues for Esteemcare were $499,225 for the nine months ended May 31, 2015 and consist primarily of purchases
of leased and sold inventory.
Research and Development Expense
Research and development
expense increased to $10,000 for the three and nine months ended May 31, 2015, from $0 during the comparable period in fiscal 2014.
Research and development expenses consisted of costs for the development of dies and molds for Dotolo’s Toxygen product.
General and Administrative Expense
General and administrative
expenses primarily include officer and administrative salaries, office rent, utilities, legal and accounting services, insurance,
public filing costs as well as other incidental overhead costs.
General and administrative
expense increased to $443,889for the three months ended May 31, 2015, from $276,950 from the comparable period in fiscal 2014.
The primary reason for the increase was the additional general and administrative expenses associated with the acquisition of Esteemcare
in September 2014.
General and administrative
expense increased to $1,379,769 for the nine months ended May 31, 2015, from $999,910 from the comparable period in fiscal 2014.
The primary reason for the increase was the additional general and administrative expenses associated with the acquisition of Esteemcare
Inc.
Depreciation and Amortization
Depreciation and amortization
decreased to $5,022 for the three months ended May 31, 2015, from $5,664 during fiscal 2014. The decrease in depreciation and amortization
was the result of assets becoming fully depreciated.
Depreciation and amortization
decreased to $14,356 for the nine months ended May 31, 2015, from $17,156 during fiscal 2014. The decrease in depreciation and
amortization was the result of the disposal of assets as a result of moving our Amian Angels office.
Interest Income
We had no interest income
in fiscal 2015 or fiscal 2014.
Interest and Finance Charges
Interest and finance charges
increased to $437,908 for the three months ended May 31, 2015 from $167,474, from fiscal 2014. The increase is primarily attributable
to additional merchant loans and additional convertible notes and the amortization of beneficial conversion features from new convertible
notes.
Interest and finance charges
increased to $1,090,013 for the nine months ended May 31, 2015 from $634,833, from fiscal 2014. The increase is primarily attributable
to the second tranche taken from TCA, additional merchant loan, and the amortization of beneficial conversion features from new
convertible notes.
Interest and finance charges
– related parties decreased to $0 for the three months ended May 31, 2015, from $791, from the comparable period in fiscal
2014. The decrease is primarily attributable to the repayment of a related party loan during fiscal 2015.
Interest and finance charges
– related parties decreased to $1,051 for the nine months ended May 31, 2015, from $18,056, from the comparable period in
fiscal 2014. The decrease is primarily attributable to the repayment of a related party loan during fiscal 2015.
A summary of interest and finance charges is
as follows:
| | |
For the Three Months Ended | |
For the Nine Months Ended |
| | |
May 31, | |
May 31, | |
May 31, | |
May 31, |
| | |
2015 | |
2014 | |
2015 | |
2014 |
| Interest expense on non-convertible notes | |
$ | 174,930 | | |
$ | 92,607 | | |
$ | 510,491 | | |
$ | 188,817 | |
| Interest expense on non-convertible notes - related parties | |
| — | | |
| 2,349 | | |
| 1,051 | | |
| 2,400 | |
| Interest expense on convertible notes payable | |
| 19,715 | | |
| 31,721 | | |
| 44,123 | | |
| 54,845 | |
| Interest expense on convertible notes payable - related parties | |
| — | | |
| — | | |
| — | | |
| — | |
| Amortization of note payable discounts | |
| 156,599 | | |
| 33,661 | | |
| 334,437 | | |
| 51,682 | |
| Amortization of note payable discounts - related parties | |
| — | | |
| — | | |
| — | | |
| — | |
| Other interest and finance charges | |
| 86,664 | | |
| 7,927 | | |
| 200,962 | | |
| 355,145 | |
| | |
| | | |
| | | |
| | | |
| | |
| Total interest and finance charges | |
$ | 437,908 | | |
$ | 168,265 | | |
$ | 1,091,064 | | |
$ | 652,889 | |
Loss on Conversion of Notes Payable
Loss on conversion of notes
payable decreased to $0 for the three months ended May 31, 2015, from $57,197, for the comparable period in fiscal 2014. The decrease
was due to conversions of only substansive convertible notes in fiscal 2015.
Loss on conversion of notes
payable decreased to $0 for the nine months ended May 31, 2015, from $93,577, for the comparable period in fiscal 2014. The decrease
was due to conversions of only substansive convertible notes in fiscal 2015.
LIQUIDITY AND CAPITAL RESOURCES
Since March 2013, we have
acquired five companies. While these acquisitions greatly increased the value of our Company, we are not fully cash flow positive.
Cash flows from the issuances of promissory notes and common stock for cash are not sufficient to meet our working capital requirements
for the foreseeable future or provide for expansion opportunities. We incurred $1,494,097 and $1,152,393 in net losses, and we
used $390,970 and $450,662 in cash for operations for the nine months ended May 31, 2015 and 2014, respectively. Investing activities
used $563,017 and $67,232 for the nine months ended May 31, 2015 and 2014, respectively, due primarily to our acquisition of Esteemcare.
Net cash generated from financing activities for the nine months ended May 31, 2015 and 2014 was $1,059,126 and $664,818, respectively.
As of May 31, 2015, we had a cash balance of $120,485. These conditions raise substantial doubt about our ability to continue as
a going concern.
We anticipate that we will
require approximately $1,000,000 to operate through August 31, 2015. Approximately $500,000 will be required to fund corporate
overhead including debt servicing with the balance to invest into raw material inventory, manufacturing and new product development
at Dotolo, as well as begin sales activities with AMPT. Additional funding will allow us to meet our current sales demands and
expenses of Dotolo, Amian Angels and Oncologix, while keeping our public filings current.
As of May 31, 2015, we
had total outstanding short-term and long-term debt and liabilities totaling $4,901,157 net of discounts. Please see Note 11 for
further information.
CRITICAL ACCOUNTING
POLICIES
“The preparation
of financial statements in accordance with accounting standards generally accepted in the United States requires management to
make estimates and assumptions that affect both the recorded values of assets and liabilities at the date of the financial statements
and the revenues recognized and expenses incurred during the reporting period. Our estimates and assumptions affect our recognition
of income taxes, the carrying value of our long-lived assets and our provision for certain contingencies. We evaluate the reasonableness
of these estimates and assumptions continually based on a combination of historical information and other information that comes
to our attention that may vary our outlook for the future. Actual results may differ from these estimates under different assumptions.
We suggest that the Summary
of Significant Accounting Policies, as described in Note 2 of our Unaudited Condensed Consolidated Financial Statements, be read
in conjunction with this Management’s Discussion and Analysis of Financial Condition and Results of Operations.
CODE OF ETHICS
Our Board of Directors
has adopted a code of ethics that applies to our principal executive officer, principal financial officer and to other persons
performing similar functions. The code of ethics is designed to deter wrongdoing and to promote honest and ethical conduct, full,
fair, accurate, timely and understandable disclosure, compliance with applicable laws, rules and regulations, prompt internal reporting
of violations of the code and accountability for adherence to the code. We will provide a copy of our code of ethics, without charge,
to any person upon receipt of written request for such delivered to our corporate headquarters. All such requests should be send
to Oncologix Tech, Inc., P.O. Box 8832, Grand Rapids, MI 49518-8832.
OFF-BALANCE SHEET ARRANGEMENTS
We do not maintain off-balance
sheet arrangements nor do we participate in any non-exchange traded contracts requiring fair value accounting treatment. The Company
has no off-balance sheet arrangements as of May 31, 2015 and 2014.
NEW ACCOUNTING STANDARDS
We have evaluated all Accounting
Standards Updates through the date the financial statements were issued and do not believe any will have a material impact. For
details of new accounting standards, please refer to Note 17 of our Consolidated Financial Statements.
ITEM 3. Quantitative and
Qualitative Disclosure about Market Risk
We are a smaller reporting
company, as defined in Rule 12b-2 promulgated under the Securities Exchange Act of 1934, and accordingly, we are not required to
provide the information required by this Item.
ITEM 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Based on an evaluation
under the supervision and with the participation of the Company’s management, the Company’s Chief Executive Officer
and Chief Financial Officer have concluded that, due to the material weaknesses disclosed in its Annual Report on Form 10-K for
the year ended August 31, 2014 that remain open, the Company’s disclosure controls and procedures were not effective as of
May 31, 2015. As a result of this conclusion, the financial statements for the periods covered by this report were prepared with
particular attention to the material weaknesses previously disclosed. Accordingly, management believes that the condensed consolidated
financial statements included in the Quarterly Report present fairly, in all material respects, the Company’s financial condition,
results of operations and cash flows as of and for the periods presented.
Changes in Internal Control Over Financial
Reporting
There were no changes in
our internal controls over financial reporting that occurred during the three months ended May 31, 2015 that have materially affected,
or are reasonably likely to materially affect, our internal controls over financial reporting.
PART II – OTHER INFORMATION
ITEM 1. Legal Proceedings
None
ITEM 1A. Risk Factors
RISK FACTORS
Those interested in investing
in the Company should carefully consider the following Risk Factors pertaining to Oncologix Tech as well as the risks and uncertainties
that are described in the Company's most recent Annual and Quarterly Reports under the Securities Exchange Act of 1934. These Risk
Factors are not all inclusive.
Going Concern Qualification.
Our Independent Accountants
have expressed doubt about our ability to continue as a going concern. The ability to continue as a going concern is an issue raised
as a result of the material operating losses incurred since inception, and its stockholders' deficit. We expect to continue to
experience net operating losses. Our ability to continue as a going concern is subject to our ability to obtain necessary funding
from outside sources, including obtaining additional funding from the sale of our securities or obtaining loans from various financial
institutions where possible. The going concern increases the difficulty in meeting such goals.
Risk of Issued Series D Convertible Preferred
Stock to Common Shareholders
In
March 2013, our Board of Directors authorized up to 60,000 shares of Series D Convertible Preferred Stock. Each share of Series
D Convertible stock has a par value of $0.001 and is convertible into 1,000 shares of common stock beginning after March 1, 2014.
Each share of Series D Convertible Preferred Stock has a stated value of $80.25. Each shares of Series D Convertible Preferred
Stock shall have voting rights as stated next: March 1, 2013 to May 31, 2014, 400 votes per share; March 1, 2014 to May 31, 2015,
800 votes per share; March 1, 2015 to May 31, 2016, 1,200 votes per share; March 1, 2016 to May 31, 2017, 1,600 votes per share;
March 1, 2017 and after, 2,000 votes per share.
In
the event of any liquidation, dissolution or winding-up of the Corporation, the Series D Preferred Stock then issued and outstanding
shall be entitled to be paid out of the assets of the Corporation available for distribution to its shareholders in a position
senior to the Corporation’s Common Stock shareholders. The effect of these senior securities could affect the value of our
common stock.
Our internal control over financial reporting
is not considered effective, our business and stock price could be adversely affected.
Section 404 of the
Sarbanes-Oxley Act of 2002 requires us to evaluate the effectiveness of our internal control over financial reporting as of the
end of each fiscal year, and to include a management report assessing the effectiveness of our internal control over financial
reporting in our annual report on Form 10-K for that fiscal year. Our management, including our chief executive officer and chief
financial officer, does not expect that our internal control over financial reporting will prevent all error and all fraud. As
of August 31, 2013, the Company identified two material weaknesses: a) Oncologix lacks the necessary corporate accounting resources
to maintain adequate segregation of duties; b) In addition, we have a lack of a functioning Audit Committee as we only have one
independent director is not considered a Financial Expert within the meaning of Section 407 of the Sarbanes-Oxley Act. We may experience
a loss of public confidence, which could have an adverse effect on our business and on the market price of our common stock due
to our internal control being ineffective.
Financial Condition of Dotolo Research Corporation (“DRC”)
DRC has limited working
capital with little cash on hand at May 31, 2015. Since January 31, 2013, DRC has incurred indebtedness of $50,000 to meet its
working capital needs. These two notes bear interest at 18% per annum and require minimum, monthly interest payments of $750. Additional
financing will be required to get DRC to cash flow break even.
Need for Additional Capital
We will need substantial
funds for raw material inventory, complete the development of new product introductions, manufacturing, and the sales and marketing
of our products at DRC. Consequently, we will seek to raise further capital through not only possible public and private offerings
of equity and debt securities, but also collaborative arrangements, strategic alliances, and equity and debt financings from other
sources. AOM operates with positive cash flow sufficient to service the business operations and debt payment requirements of the
acquisition but will need additional funds to complete the audit of Angels as well as costs for other required SEC and other regulatory
filings. We now estimate the need to raise at least $500,000 of additional funding for working capital and inventory procurement
for DRC. Additionally, we estimate the need to raise at least $500,000 for overhead of Oncologix Tech, Inc and debt servicing.
We may be unable to raise additional capital on commercially acceptable terms, if at all, and if we raise capital through additional
equity financing, existing shareholders may have their ownership interests diluted. Our failure to be able to generate adequate
funds from operations or from additional sources would harm our business.
Uncertainties Regarding Healthcare Reimbursement
and Reform
Our ability to execute
our strategy in the medical markets depends in part on the extent to which healthcare services and products are paid by governmental
agencies, private health insurers and other organizations, such as health maintenance organizations, for the cost of such products
and related treatments. Our business could be harmed if healthcare payers and providers implement cost-containment measures and
governmental agencies implement measures that reduce payment to our customers for their use of our products.
Industry Intensely Competitive.
The medical device and
health services industry is intensely competitive. While we maintain a market share in hardware and disposable products sales ,
there is no guarantee we can maintain that market share. We will compete with both public and private medical device and pharmaceutical
companies that have a greater number of products on the market, have greater financial resources and have other competitive advantages.
We cannot be certain that one or more of our competitors will not receive patent protection that dominates, blocks or adversely
affects our product development or business; will benefit from significantly greater sales and marketing capabilities or will not
develop products that are accepted more widely than ours.
Healthcare Service Industry Intensely Competitive.
The healthcare service
industry is very competitive. We will compete with both public and private healthcare service companies that hold licenses within
the State of Louisiana and directly compete with companies that may have greater financial resources and have other competitive
advantages.
Intellectual Property Risk.
Our ability to obtain and
maintain patent and other protection for our products will affect our success. The patent positions of medical device companies
can be highly uncertain and involve complex legal and factual questions. Future patent rights, if granted, may not be upheld in
a court of law if challenged. Our patent rights may not provide competitive advantages for our products and may be challenged,
infringed upon or circumvented by our competitors. We cannot patent our products in all countries or afford to litigate every potential
violation worldwide. Because of the large number of patent filings in medical device, our competitors may have filed applications
or been issued patents and may obtain additional patents and proprietary rights relating to products or processes competitive with
or similar to ours. We cannot be certain that U.S. or foreign patents do not exist or will not issue that would harm our ability
to commercialize our products and product candidates.
Possible Failure to Comply with Government
Regulations.
We, and any prospective
contract manufacturers and suppliers are subject to extensive, complex, costly, and evolving governmental rules, regulations and
restrictions administered by the FDA, by other federal and state agencies, and by governmental authorities in other countries.
In the United States, our products are registered as a Class II device and cannot be marketed until they are approved for market
by the FDA. Obtaining FDA market approval involves the submission, among other information, may require clinical studies on the
product, and requires substantial time, effort and financial
resources. The FDA, and other federal and state agencies, as well
as equivalent agencies of other countries with whom we will export our products, will also perform pre-licensing
inspections of our facility, if any, and our contract manufacturers' and suppliers' facilities. Our failure or the failure of our
contract manufacturers or suppliers to meet FDA or other agencies' requirements would delay or preclude our ability to sell our
products potentially having an adverse material effect on our business. Even with FDA market approval, we, as well as our partners,
contract manufacturers and suppliers, are subject to numerous FDA requirements covering, among other things, testing, manufacturing,
quality control, labeling and continuing review of medical products, and to permit government inspection at all times. Failure
to meet or comply with any rules, regulations, or restrictions of the FDA or other agencies could result in fines, unanticipated
expenditures, product delays, non-approval or recall, interruption of production, and criminal prosecution.
Exposure to Product Liability Claims.
Our design, testing, development,
manufacture, and marketing of products involve an inherent risk of exposure to product liability claims and related adverse publicity.
Although we believe that our product liability insurance is adequate, additional insurance coverage is expensive and in the future
we may be unable to obtain additional liability coverage on acceptable terms. If we are unable to obtain sufficient insurance at
an acceptable cost or if a successful product liability claim is made against us, whether fully covered by insurance or not, our
business could be harmed.
Reliance on Key Personnel
Our success will depend,
to a great extent, upon the experience, abilities and continued services of our executive officers and key management personnel.
If we lose the services of any of these officers or key personnel, our business could be harmed. Our success also will depend upon
our ability to attract and retain other highly qualified Regulatory, Marketing, Sales, and manufacturing personnel and our ability
to develop and maintain relationships with key individuals in the industry. Competition to attract qualified personnel and relationships
is intense and we compete with other companies in our industry. We may not be able to continue to attract and retain qualified
personnel.
Uncertainty as to our Ability to Initiate
Operations and Manage Growth.
Our efforts to market our
products will result in new and increased responsibilities for management personnel and will place a strain upon our management,
financial systems, and resources. We may be required to continue to implement and to improve our management, operating and financial
systems, procedures and controls on a timely basis and to expand, train, motivate and manage our employees. There can be no assurance
that our personnel, systems, procedures, and controls will be adequate to support our future operations.
Healthcare Service Industry Intensely Competitive.
The healthcare service
industry is very competitive. . We compete with both public and private healthcare service companies that hold licenses within
the State of Louisiana and directly compete with companies that may have greater financial resources and have other competitive
advantages.
Compliance with Government Regulations.
We, and all healthcare
service companies are subject to extensive, and evolving governmental rules, regulations and restrictions administered by the Department
of Health & Hospitals, the Bureau of Health Services Financing, by other federal and state agencies, and by governmental authorities.
Integration of Newly Acquired Businesses.
The Company may make strategic
acquisitions in the future and cannot assure that it will be able to successfully integrate the operations of newly-acquired businesses
into the Company's current operations. It is Management intent to consolidate various business functions to include Information
Technology, Accounting, legal under a central core operation. The failure to integrate newly acquired businesses or the inability
to make suitable strategic acquisitions in the future could have an adverse effect on the Company's business, results of operations
and financial condition.
Attraction and Retention of Qualified Personnel
The Company is dependent
on the efforts and abilities of its senior executive officers. While the Company believes that its senior management team has significant
experience and depth, appropriate senior management succession plans are in place. The Company's future success also depends on
its ability to identify, attract and retain additional qualified personnel.
Broker-Dealer Requirements May Affect Trading
and Liquidity of Our Common Stock
Section 15(g) of the Securities
Exchange Act of 1934, as amended, and Rule 15g-2 promulgated thereunder by the SEC require broker-dealers dealing in penny stocks
to provide potential investors with a document disclosing the risks of penny stocks and to obtain a manually signed and dated written
receipt of the document before effecting any transaction in a penny stock for the investor's account.
Potential investors in
the Registrant's common stock are urged to obtain and read such disclosure carefully before purchasing any shares that are deemed
to be "penny stock." Moreover, Rule 15g-9 requires broker-dealers in penny stocks to approve the account of any investor
for transactions in such stocks before selling any penny stock to that investor. This procedure requires the broker-dealer to (i)
obtain from the investor information concerning his or her financial situation, investment experience and investment objectives;
(ii) reasonably determine, based on that information, that transactions in penny stocks are suitable for the investor and that
the investor has sufficient knowledge and experience as to be reasonably capable of evaluating the risks of penny stock transactions;
(iii) provide the investor with a written statement setting forth the basis on which the broker-dealer made the determination in
(ii) above; and (iv) receive a signed and dated copy of such statement from the investor, confirming that it accurately reflects
the investor's financial situation, investment experience and investment objectives. Compliance with these requirements may make
it more difficult for holders of our common stock to resell their shares to third parties or to otherwise dispose of them in the
market or otherwise.
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds
| Date |
Securities |
|
Underwriters/ |
|
| Sold |
Sold |
Consideration |
Purchasers * |
Notes |
| |
|
|
|
|
| 9/12/2013 |
1,000,000 |
$ - |
Vendor |
The Company issued 1,000,000 S-8 shares to a vendor for consulting work. The Company recorded an expense of $11,500 upon the issuance of those shares. |
| 9/12/2013 |
1,500,000 |
$ 10,000 |
Accredited Investor |
The Company sold 1,500,000 shares of common stock to an affiliated accredited investor at $0.00667 per share. These shares were exempt from registration under Section 4(2) of the Securities Act |
| 10/3/2013 |
4,000,000 |
$ - |
Accredited Investor |
A non-affiliated accredited investor converted a promissory note in the amount of $15,620 in principal and interest into 4,000,000 shares of common stock at $0.00391 per share. These shares were exempt from registration under Section 4(2) of the Securities Act. |
| 12/3/2013 |
1,891,123 |
$ - |
Accredited Investor |
A non-affiliated accredited investor converted a promissory note in the amount of $9,380 in principal and interest into 1,891,123 shares of common stock at $0.00496 per share. These shares were exempt from registration under Section 4(2) of the Securities Act. |
| 1/3/2014 |
2,000,000 |
$ - |
Vendor |
The company issued 2,000,000 shares of common stock as consideration for services. The company recorded an expense of $22,000 in connection with this issuance. These shares were exempt from registration under Section 4(2) of the Securities Act. |
| 1/13/2014 |
3,076,923 |
$ - |
Accredited Investor |
A non-affiliated accredited investor converted a promissory note in the amount of $20,000 in principal and interest into 3,076,923 shares of common stock at $0.0065 per share. These shares were exempt from registration under Section 4(2) of the Securities Act. |
| 1/14/2014 |
1,000,000 |
$ - |
Vendor |
The company issued 1,000,000 shares of common stock as consideration for services. The company recorded an expense of $19,000 in connection with this issuance. These shares were exempt from registration under Section 4(2) of the Securities Act. |
| 1/15/2014 |
117,436 |
$ - |
Accredited Investor |
Additional reset shares were issued to a non-affiliated accredited investor in connection with the prior conversion of $9,380 in principal and interest into 117,436 shares of common stock. These shares were exempt from registration under Section 4(2) of the Securities Act. |
| 1/21/2014 |
3,500,000 |
$ - |
Accredited Investor |
The company issued 3,500,000 shares of common stock as consideration for fees. The company recorded an expense of $45,500 in connection with this issuance. These shares were exempt from registration under Section 4(2) of the Securities Act. |
| 1/21/2014 |
1,500,000 |
$ - |
Accredited Investor |
The company issued 1,500,000 shares of common stock as consideration for fees. The company recorded an expense of $30,000 in connection with this issuance. These shares were exempt from registration under Section 4(2) of the Securities Act. |
| 1/31/2014 |
3,472,222 |
$ - |
Accredited Investor |
A non-affiliated accredited investor converted a promissory note in the amount of $25,000 in principal and interest into 3,472,222 shares of common stock at $0.0072 per share. These shares were exempt from registration under Section 4(2) of the Securities Act. |
| 2/7/2014 |
1,000,000 |
$ - |
Accredited Investor |
The company issued 1,000,000 shares of common stock as consideration for fees. The company recorded an expense of $9,000 in connection with this issuance. These shares were exempt from registration under Section 4(2) of the Securities Act. |
| 2/24/2014 |
4,615,385 |
$ - |
Accredited Investor |
A non-affiliated accredited investor converted a promissory note in the amount of $30,000 in principal and interest into 4,615,385 shares of common stock at $0.0065 per share. These shares were exempt from registration under Section 4(2) of the Securities Act. |
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds
(Continued)
| Date |
Securities |
|
Underwriters/ |
|
| Sold |
Sold |
Consideration |
Purchasers * |
Notes |
| |
|
|
|
|
| 3/12/2014 |
4,615,385 |
$ - |
Accredited Investor |
A non-affiliated accredited investor converted a promissory note in the amount of $30,000 in principal and interest into 4,615,385 shares of common stock at $0.0065 per share. These shares were exempt from registration under Section 4(2) of the Securities Act. |
| 4/7/2014 |
2,936,314 |
$ - |
Accredited Investor |
A non-affiliated accredited investor converted a promissory note in the amount of $19,086 in principal and interest into 2,936,314 shares of common stock at $0.0065 per share. These shares were exempt from registration under Section 4(2) of the Securities Act. |
| 4/7/2014 |
5,383,007 |
$ - |
Accredited Investor |
A non-affiliated accredited investor converted a promissory note in the amount of $17,764 in principal and interest into 5,383,007 shares of common stock at $0.0033 per share. These shares were exempt from registration under Section 4(2) of the Securities Act. |
| 6/2/2014 |
5,000,000 |
$ - |
Accredited Investor |
The company issued 5,000,000 shares of common stock as consideration for services. The company recorded an expense of $30,000 in connection with this issuance. These shares were exempt from registration under Section 4(2) of the Securities Act. |
| 6/25/2014 |
5,138,746 |
$ - |
Accredited Investor |
A non-affiliated accredited investor converted a promissory note in the amount of $25,000 in principal and interest into 5,138,746 shares of common stock at $0.004865 per share. These shares were exempt from registration under Section 4(2) of the Securities Act. |
| 7/14/2014 |
2,500,000 |
|
Accredited Investor |
A non-affiliated accredited investor converted a promissory note in the amount of $11,000 in principal and interest into 2,500,000 shares of common stock at $0.0044 per share. These shares were exempt from registration under Section 4(2) of the Securities Act. |
| 7/24/2014 |
1,149,425 |
|
Accredited Investor |
A non-affiliated accredited investor converted a promissory note in the amount of $5,000 in principal and interest into 1,149,425 shares of common stock at $0.00435 per share. These shares were exempt from registration under Section 4(2) of the Securities Act. |
| 8/1/2014 |
3,416,764 |
|
Accredited Investor |
A non-affiliated accredited investor converted a promissory note in the amount of $8,456 in principal and interest into 3,416,764 shares of common stock at $0.002475 per share. These shares were exempt from registration under Section 4(2) of the Securities Act. |
| 8/26/2014 |
1,200,000 |
$ - |
Accredited Investor |
The Company sold 1,200,000 shares of common stock to an affiliated accredited investor at $0.00833 per share. These shares were exempt from registration under Section 4(2) of the Securities Act |
| 9/10/2014 |
1,058,201 |
$ - |
Accredited Investor |
A non-affiliated accredited investor converted a promissory note in the amount of $5,000 in principal and interest into 1,058,201 shares of common stock at $0.004725 per share. These shares were exempt from registration under Section 4(2) of the Securities Act. |
| 10/28/2014 |
1,473,622 |
$ - |
Accredited Investor |
A non-affiliated accredited investor converted a promissory note in the amount of $5,000 in principal and interest into 1,473,622 shares of common stock at $0.003383 per share. These shares were exempt from registration under Section 4(2) of the Securities Act. |
| 11/3/2014 |
1,508,296 |
$ - |
Accredited Investor |
A non-affiliated accredited investor converted a promissory note in the amount of $5,000 in principal and interest into 1,508,296 shares of common stock at $0.003315 per share. These shares were exempt from registration under Section 4(2) of the Securities Act. |
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds
(Continued)
| Date |
Securities |
|
Underwriters/ |
|
| Sold |
Sold |
Consideration |
Purchasers * |
Notes |
| |
|
|
|
|
| 11/10/2014 |
1,724,733 |
$ - |
Accredited Investor |
A non-affiliated accredited investor converted a promissory note in the amount of $5,000 in principal and interest into 1,724,733 shares of common stock at $0.002899 per share. These shares were exempt from registration under Section 4(2) of the Securities Act. |
| 11/12/2014 |
6,000,000 |
|
Vendor |
The company issued 6,000,000 shares of common stock as consideration for services. The company recorded an expense of $24,000 in connection with this issuance. These shares were exempt from registration under Section 4(2) of the Securities Act. |
| 11/24/2014 |
2,380,952 |
$ - |
Accredited Investor |
A non-affiliated accredited investor converted a promissory note in the amount of $7,000 in principal and interest into 2,380,952 shares of common stock at $0.00294 per share. These shares were exempt from registration under Section 4(2) of the Securities Act. |
| 11/28/2014 |
3,577,818 |
$ - |
Accredited Investor |
A non-affiliated accredited investor converted a promissory note in the amount of $10,000 in principal and interest into 3,577,818 shares of common stock at $0.002795 per share. These shares were exempt from registration under Section 4(2) of the Securities Act. |
| 11/28/2014 |
2,126,602 |
$ - |
Accredited Investor |
A non-affiliated accredited investor converted a promissory note in the amount of $4,219 in principal and interest into 2,126,602 shares of common stock at $0.001984 per share. These shares were exempt from registration under Section 4(2) of the Securities Act. |
| 12/9/2014 |
6,384,676 |
|
Accredited Investor |
A non-affiliated accredited investor converted a promissory note in the amount of $16,000 in principal and interest into 6,384,676 shares of common stock at $0.002506 per share. These shares were exempt from registration under Section 4(2) of the Securities Act. |
| 12/9/2014 |
3,026,555 |
|
Accredited Investor |
A non-affiliated accredited investor converted a promissory note in the amount of $5,317 in principal and interest into 3,026,555 shares of common stock at $0.001922 per share. These shares were exempt from registration under Section 4(2) of the Securities Act. |
| 12/18/2014 |
3,286,650 |
|
Accredited Investor |
A non-affiliated accredited investor converted a promissory note in the amount of $5,298 in principal and interest into 3,286,650 shares of common stock at $0.001612 per share. These shares were exempt from registration under Section 4(2) of the Securities Act. |
| 12/24/2014 |
2,632,040 |
|
Accredited Investor |
A non-affiliated accredited investor converted a promissory note in the amount of $4,243 in principal and interest into 2,632,040 shares of common stock at $0.001612 per share. These shares were exempt from registration under Section 4(2) of the Securities Act. |
| 1/12/2015 |
(55,349) |
|
|
Share adjustment by transfer agent |
| 1/13/2015 |
2,863,750 |
|
Accredited Investor |
A non-affiliated accredited investor converted a promissory note in the amount of $4,261 in principal and interest into 2,863,750 shares of common stock at $0.001488 per share. These shares were exempt from registration under Section 4(2) of the Securities Act. |
| 1/16/2015 |
876,244 |
|
Accredited Investor |
A non-affiliated accredited investor converted a promissory note in the amount of $2,084 in principal and interest into 876,244 shares of common stock at $0.00238 per share. These shares were exempt from registration under Section 4(2) of the Securities Act. |
| 1/20/2015 |
2,866,108 |
|
Accredited Investor |
A non-affiliated accredited investor converted a promissory note in the amount of $4,265 in principal and interest into 2,866,108 shares of common stock at $0.001488 per share. These shares were exempt from registration under Section 4(2) of the Securities Act. |
| 1/23/2015 |
8,398,588 |
|
Accredited Investor |
A non-affiliated accredited investor converted a promissory note in the amount of $12,497 in principal and interest into 8,398,588 shares of common stock at $0.001488 per share. These shares were exempt from registration under Section 4(2) of the Securities Act. |
ITEM 2. Unregistered Sales of Equity Securities and Use
of Proceeds (Continued)
| Date |
Securities |
|
Underwriters/ |
|
| Sold |
Sold |
Consideration |
Purchasers * |
Notes |
| |
|
|
|
|
| 1/30/2015 |
5,000,000 |
|
Accredited Investor |
The company issued 5,000,000 shares of common stock as consideration for services. The company recorded an expense of $38,500 in connection with this issuance. These shares were exempt from registration under Section 4(2) of the Securities Act. |
| 2/3/2015 |
7,365,772 |
|
Accredited Investor |
A non-affiliated accredited investor converted a promissory note in the amount of $10,960 in principal and interest into 7,365,772 shares of common stock at $0.001488 per share. These shares were exempt from registration under Section 4(2) of the Securities Act. |
| 2/5/2015 |
2,807,190 |
|
Accredited Investor |
A non-affiliated accredited investor converted a promissory note in the amount of $4,177 in principal and interest into 2,807,190 shares of common stock at $0.001488 per share. These shares were exempt from registration under Section 4(2) of the Securities Act. |
| 2/10/2015 |
9,697,060 |
|
Accredited Investor |
A non-affiliated accredited investor converted a promissory note in the amount of $18,699 in principal and interest into 9,697,060 shares of common stock at $0.0019283 per share. These shares were exempt from registration under Section 4(2) of the Securities Act. |
| 3/1/2015 |
4,500,000 |
|
Accredited Investor |
A non-affiliated accredited investor converted a promissory note in the amount of $20,572 in principal and interest into 4,500,000 shares of common stock at $0.004572 per share. These shares were exempt from registration under Section 4(2) of the Securities Act. |
| 3/11/2015 |
2,000,000 |
|
Accredited Investor |
The company issued 2,000,000 shares of common stock as consideration for services. The company recorded an expense of $15,600 in connection with this issuance. These shares were exempt from registration under Section 4(2) of the Securities Act. |
| 3/13/2015 |
2,472,032 |
|
Accredited Investor |
A non-affiliated accredited investor converted a promissory note in the amount of $10,926 in principal and interest into 2,472,032 shares of common stock at $0.004572 per share. These shares were exempt from registration under Section 4(2) of the Securities Act. |
| 3/19/2015 |
4,500,000 |
|
Accredited Investor |
A non-affiliated accredited investor converted a promissory note in the amount of $16,554 in principal and interest into 4,500,000 shares of common stock at $0.004572 per share. These shares were exempt from registration under Section 4(2) of the Securities Act. |
| 3/21/2015 |
10,000,000 |
|
Accredited Investor |
A non-affiliated accredited investor exercised cashless warrants in the into 10,000,000 shares of common stock at $0.004572 per share. These shares were exempt from registration under Section 4(2) of the Securities Act. |
| 4/3/2015 |
4,680,298 |
|
Accredited Investor |
A non-affiliated accredited investor converted a promissory note in the amount of $13,541 in principal and interest into 4,680,298 shares of common stock at $0.0028933 per share. These shares were exempt from registration under Section 4(2) of the Securities Act. |
| 4/10/2015 |
6,756,079 |
|
Accredited Investor |
A non-affiliated accredited investor exercised cashless warrants in the into 6,756,079 shares of common stock at $0.0002093 per share. These shares were exempt from registration under Section 4(2) of the Securities Act. |
| 4/30/2015 |
9,096,774 |
|
Accredited Investor |
A non-affiliated accredited investor exercised cashless warrants in the into 9,096,774 shares of common stock at $0.001488 per share. These shares were exempt from registration under Section 4(2) of the Securities Act. |
| 5/13/2015 |
4,000,000 |
|
Accredited Investor |
A non-affiliated accredited investor converted a promissory note in the amount of $7,109 in principal and interest into 4,680,298 shares of common stock at $0.0017773 per share. These shares were exempt from registration under Section 4(2) of the Securities Act. |
| 5/15/2015 |
7,530,107 |
|
Accredited Investor |
A non-affiliated accredited investor exercised cashless warrants in the into 7,530,107 shares of common stock at $0.00001488 per share. These shares were exempt from registration under Section 4(2) of the Securities Act. |
ITEM 2. Unregistered Sales of Equity Securities and Use
of Proceeds (Continued)
| Date |
Securities |
|
Underwriters/ |
|
| Sold |
Sold |
Consideration |
Purchasers * |
Notes |
| |
|
|
|
|
| 5/18/2015 |
6,211,180 |
|
Accredited Investor |
A non-affiliated accredited investor converted a promissory note in the amount of $13,000 in principal and interest into 6,211,180 shares of common stock at $0.002093 per share. These shares were exempt from registration under Section 4(2) of the Securities Act. |
| 5/21/2015 |
5,400,000 |
|
Accredited Investor |
A non-affiliated accredited investor converted a promissory note in the amount of $9,151 in principal and interest into 5,400,000 shares of common stock at $0.0016947 per share. These shares were exempt from registration under Section 4(2) of the Securities Act. |
| 6/2/2015 |
6,500,000 |
|
Accredited Investor |
A non-affiliated accredited investor converted a promissory note in the amount of $10,615 in principal and interest into 6,500,000 shares of common stock at $0.001633 per share. These shares were exempt from registration under Section 4(2) of the Securities Act. |
| 6/2/2015 |
6,783,571 |
|
Accredited Investor |
A non-affiliated accredited investor converted a promissory note in the amount of $13,052 in principal and interest into 6,783,571 shares of common stock at $0.001924 per share. These shares were exempt from registration under Section 4(2) of the Securities Act. |
| 6/3/2015 |
7,021,230 |
|
Accredited Investor |
A non-affiliated accredited investor converted a promissory note in the amount of $11,318 in principal and interest into 7,021,230 shares of common stock at $0.001612 per share. These shares were exempt from registration under Section 4(2) of the Securities Act. |
| 6/3/2015 |
2,500,000 |
|
Accredited Investor |
The company issued 2,500,000 shares of common stock as consideration for a consulting contract. The company recorded an expense of $11,000 in connection with this issuance. These shares were exempt from registration under Section 4(2) of the Securities Act. |
| 6/5/2015 |
11,189,002 |
|
Accredited Investor |
A non-affiliated accredited investor converted a promissory note in the amount of $18,272 in principal and interest into 11,189,002 shares of common stock at $0.001633 per share. These shares were exempt from registration under Section 4(2) of the Securities Act. |
| 6/10/2015 |
14,818,011 |
|
Accredited Investor |
A non-affiliated accredited investor converted a promissory note in the amount of $23,887 in principal and interest into 14,818,011 shares of common stock at $0.001612 per share. These shares were exempt from registration under Section 4(2) of the Securities Act. |
| 6/17/2015 |
3,101,737 |
|
Accredited Investor |
A non-affiliated accredited investor converted a promissory note in the amount of $5,000 in principal and interest into 3,101,737 shares of common stock at $0.001612 per share. These shares were exempt from registration under Section 4(2) of the Securities Act. |
| 6/24/2015 |
3,402,749 |
|
Accredited Investor |
A non-affiliated accredited investor converted a promissory note in the amount of $5,000 in principal and interest into 3,402,749 shares of common stock at $0.0014694 per share. These shares were exempt from registration under Section 4(2) of the Securities Act. |
| 6/30/2015 |
8,064,516 |
|
Accredited Investor |
A non-affiliated accredited investor converted a promissory note in the amount of $10,000 in principal and interest into 8,084,516 shares of common stock at $0.00124 per share. These shares were exempt from registration under Section 4(2) of the Securities Act. |
| |
|
|
|
|
| |
265,539,524 |
$ - |
|
|
| |
|
|
|
|
| * There were no underwriters associated with any of our Sales of Unregistered Securities. |
ITEM 3. Defaults Upon Senior Securities
None.
ITEM 4. Mine Safety Disclosures
Not applicable.
ITEM 5. Other Information
None.
ITEM 6. Exhibits
| |
Exhibits. |
|
Description |
|
| |
31.1 |
|
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
| |
31.2 |
|
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
| |
32.1 |
|
Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
| |
32.2 |
|
Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
SIGNATURES
Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
| Dated:
August 10, 2015 |
ONCOLOGIX TECH, INC. |
| |
|
| |
|
| |
By: /s/ Roy Wayne Erwin |
| |
Roy Wayne Erwin, President and Chief Executive Officer, Principal Executive Officer |
| |
|
| |
By: /s/ Michael A. Kramarz |
| |
Michael A. Kramarz, Chief Financial Officer, Principal Financial Officer, Principal Accounting Officer |
EXHIBIT 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO SECTION
302 OF THE SARBANES-OXLEY ACT OF 2002
I, Roy Wayne Erwin
certify that:
| (1) | I have reviewed this Quarterly Report on Form 10-Q of Oncologix Tech, Inc.; |
| (2) | Based on my knowledge, the Report does not contain any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by the Report; |
| (3) | Based on my knowledge, the financial statements, and other financial information included in the
Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant
as of, and for, the periods represented in this report; |
| (4) | The registrant’s other certifying officer and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under our supervision, to ensure that material information
relating to the registrant, including its consolidated subsidiaries, is made known to us by others with these entities,
particularly during the period in which this report is being prepared; |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented
in Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered
by this Report based on such evaluation; and |
| (d) | Disclosed in this Report any change in the registrant’s
internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s
fourth fiscal quarter in case of an annual report) that has materially affected, or is reasonably likely to materially affect,
the registrant’s internal control over financial reporting. |
| (5) | The registrant’s other certifying officer and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the registrant’s auditors
and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in
the design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record , process, summarize and report financial
information; and |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant
role in the registrant’s internal control over financial reporting. |
Dated: August 10, 2015
By: /s/ Roy Wayne Erwin
Roy Wayne Erwin
Principal Executive Officer,
Chief Executive Officer and President
EXHIBIT 31.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
PURSUANT TO SECTION
302 OF THE SARBANES-OXLEY ACT OF 2002
I, Michael A. Kramarz,
certify that:
| (1) | I have reviewed this Quarterly Report on Form 10-Q of Oncologix Tech, Inc.; |
| (2) | Based on my knowledge, the Report does not contain any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by the Report; |
| (3) | Based on my knowledge, the financial statements, and other financial information included in the
Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant
as of, and for, the periods represented in this report; |
| (4) | The registrant’s other certifying officer and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under our supervision, to ensure that material information
relating to the registrant, including its consolidated subsidiaries, is made known to us by others with these entities,
particularly during the period in which this report is being prepared; |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented
in Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered
by this Report based on such evaluation; and |
| (d) | Disclosed in this Report any change in the registrant’s
internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s
fourth fiscal quarter in case of an annual report) that has materially affected, or is reasonably likely to materially affect,
the registrant’s internal control over financial reporting. |
| (5) | The registrant’s other certifying officer and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the registrant’s auditors
and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in
the design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial
information; and |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant
role in the registrant’s internal control over financial reporting. |
Dated: August 10, 2015
By: /s/ Michael A. Kramarz
Michael A. Kramarz
Principal Financial Officer,
Principal Accounting Officer and Chief Financial Officer
Exhibit 32.1
ONCOLOGIX TECH, INC. AND SUBSIDIARIES
CERTIFICATION OF PRINCIPAL
EXECUTIVE OFFICER PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF
2002
In connection with
the Annual Report of Oncologix Tech, Inc. (the “Company”) on Form 10-Q for the three months ended May 31, 2015, as
filed with the Securities and Exchange Commission on the date hereof (the “Report”), I Roy Wayne Erwin, Chief Executive
Officer and President of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley
Act of 2002, that:
| (1) | The report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange
Act of 1934; and |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial
condition and result of operations of the Company. |
/s/ Roy Wayne Erwin
Roy Wayne Erwin
Chief Executive Officer and President
August 10, 2015
Exhibit 32.2
ONCOLOGIX TECH, INC. AND SUBSIDIARIES
CERTIFICATION OF PRINCIPAL
FINANCIAL OFFICER PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF
2002
In connection with
the Annual Report of Oncologix Tech, Inc. (the “Company”) on Form 10-Q for the three months ended May 31, 2015, as
filed with the Securities and Exchange Commission on the date hereof (the “Report”), I Michael A. Kramarz, Chief Financial
Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002,
that:
| (3) | The report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange
Act of 1934; and |
| (4) | The information contained in the Report fairly presents, in all material respects, the financial
condition and result of operations of the Company. |
/s/ Michael A. Kramarz
Michael A. Kramarz
Chief Financial Officer
August 10, 2015
Oncologix Tech (CE) (USOTC:OCLG)
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