UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
Amendment No. 1
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2019
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from: _____________ to _____________
KYTO TECHNOLOGY AND LIFE SCIENCE, INC.
(Exact name of registrant as specified in its charter)
FLORIDA |
| 000-50390 |
| 65-1086538 |
| (Commission |
| (I.R.S. Employer | |
of Incorporation) |
| File Number) |
| Identification No.) |
13050 Paloma Road, Los Altos Hills, CA 94022
(Address of Principal Executive Office) (Zip Code)
(408) 313 5830
(Registrant’s telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [X ]Yes [ ] No
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 (ss. 232.405 of this chapter) during the preceding 12 (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.
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 Act). [ ] Yes [X] No
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
5,836,832 Common Shares - $.01 Par Value - as of July 31, 2019
1
EXPLANATORY NOTE
The sole purpose of this Amendment # 1 to Quarterly Report on Form 10-Q ("Form 10-Q") for the period ended June 30, 2019, is to furnish Exhibit 101 to the Form 10-Q in accordance with Rule 405 of Regulation S-T. Exhibit 101 to the Form 10-Q provides the financial statements and related notes from the Form 10-Q formatted in XBRL (eXtensible Business Reporting Language).
No other changes have been made to the Form 10-Q. This Amendment #1 to the Form 10-Q speaks as of the original filing date of the Form 10-Q does not reflect events that may have occurred subsequent to the original filing date, and does not modify or update in any way disclosures made in the original Form 10-Q.
Pursuant to Rule 406T of Regulation S-T, the interactive data files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.
2
ITEM 6. EXHIBITS
INDEX TO EXHIBITS
EXHIBIT NUMBER |
| DESCRIPTION |
| Articles of Incorporation of Kyto Technology and Life Science, Inc.* | |
|
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|
| Articles of Amendment changing name to Kyto Technology and Life Science, Inc.* | |
|
|
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| Bylaws of Kyto Technology and Life Science, Inc.* | |
|
|
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| Section 302 Certification of principal executive officer.** | |
|
|
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| Section 302 Certification of principal financial and accounting officer.** | |
|
|
|
| Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 ** | |
|
|
|
| Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 ** | |
|
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101 |
| XBRL (eXtensible Business Reporting Language)** |
* Filed as Exhibit to Company's Form 10-SB on September 12th, 2003, with the Securities and Exchange Commission
** Filed as Exhibit with this Form 10-Q.
3
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Kyto Technology and Life Science, Inc. | |
| |
By: | /s/ Paul Russo |
| Paul Russo Chief Executive Officer, principal executive officer,
|
| |
Date: August 2, 2019
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Kyto Technology and Life Science, Inc. | |
| |
By: | /s/ Simon Westbrook |
| Simon Westbrook Principal financial and accounting officer |
| |
Date: August 2, 2019
4
EXHIBIT 31.1
Rule 13a-14(a)/15d-14(a) Certification
I, Paul Russo, certify that:
1. I have reviewed this report on Form 10-Q/A for the period ended June 30, 2019 of Kyto Technology and Life Science, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary 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 this report;
3. Based on my knowledge, the financial statements, and other financial information included in this 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 presented in this report;
4. The registrant’s other certifying officer(s) 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, is made known to us by others within those 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 this 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 the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant's other certifying officer(s) 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.
August 2, 2019 |
|
|
|
| /s/ Paul Russo |
| Paul Russo |
| Chief Executive Officer, principal executive officer |
EXHIBIT 31.2
Rule 13a-14(a)/15d-14(a) Certification
I, Simon Westbrook, certify that:
1. I have reviewed this report on Form 10-Q/A for the period ended June 30, 2019 of Kyto Technology and Life Science, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary 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 this report;
3. Based on my knowledge, the financial statements, and other financial information included in this 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 presented in this report;
4. The registrant’s other certifying officer(s) 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, is made known to us by others within those 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 this 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 the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant's other certifying officer(s) 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.
August 2, 2019 |
|
|
|
| /s/Simon Westbrook |
| Simon Westbrook |
| Principal financial and accounting officer |
Section 1350 Certification
In connection with the Quarterly Report of Kyto Technology and Life Science, Inc. (the “Company”) on Form 10-Q/A for the period ended June 30, 2019 as filed with the Securities and Exchange Commission (the “Report”), I, Paul Russo, Chief Executive 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:
1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and
2. The information contained in the Report fairly presents, in all material respects, the financial conditions and results of operations of the Company.
August 2, 2019 |
|
|
|
| /s/ Paul Russo |
| Paul Russo |
| Chief Executive Officer, principal executive officer, |
Section 1350 Certification
In connection with the Quarterly Report of Kyto Technology and Life Science, Inc. (the “Company”) on Form 10-Q/A for the period ended June 30, 2019 as filed with the Securities and Exchange Commission (the “Report”), I, Simon Westbrook, Chief financial and accounting 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:
1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and
2. The information contained in the Report fairly presents, in all material respects, the financial conditions and results of operations of the Company.
August 2, 2019 |
|
|
|
| /s/Simon Westbrook |
| Simon Westbrook |
| Principal financial and accounting officer |
Consolidated Balance Sheets (March 31, 2019) Unaudited) - USD ($) |
Jun. 30, 2019 |
Mar. 31, 2019 |
|---|---|---|
| Current Assets | ||
| Cash | $ 325,308 | $ 93,634 |
| Receivables | 1,000 | 1,000 |
| Deferred fundraising expenses | 124,013 | 0 |
| Total Current Assets | 450,321 | 94,634 |
| Investments | 1,821,545 | 1,498,048 |
| Total Assets | 2,271,866 | 1,592,682 |
| Current Liabilities | ||
| Accounts payable & accrued liabilities | 39,631 | 21,700 |
| Accrued liabilities & loans - related party | 5,000 | 7,250 |
| Total Current Liabilities | 44,631 | 28,950 |
| Commitments and Contingencies | 0 | 0 |
| Stockholders' Equity | ||
| Common Stock, Value, Issued | 58,368 | 58,368 |
| Additional paid-in capital | 34,944,380 | 34,090,092 |
| Accumulated deficit | (32,812,451) | (32,610,853) |
| Total Stockholders' Equity | 2,227,235 | 1,563,732 |
| Total Liabilities and Stockholders' Equity | 2,271,866 | 1,592,682 |
| Series A Preferred Stock | ||
| Stockholders' Equity | ||
| Preferred Stock, Value, Issued | 36,938 | 26,125 |
| Series B Preferred Stock | ||
| Stockholders' Equity | ||
| Preferred Stock, Value, Issued | $ 0 | $ 0 |
Consolidated Balance Sheets (March 31, 2019) Unaudited) - Parenthetical - $ / shares |
Jun. 30, 2019 |
Mar. 31, 2019 |
|---|---|---|
| Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
| Common Stock, Shares Authorized | 40,000,000 | 40,000,000 |
| Common Stock, Shares, Issued | 5,836,832 | 5,836,832 |
| Common Stock, Shares, Outstanding | 5,836,832 | 5,836,832 |
| Authorized but not designated | ||
| Preferred Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
| Preferred Stock, Shares Authorized | 25,800,000 | 25,800,000 |
| Preferred Stock, Shares Issued | 0 | 0 |
| Preferred Stock, Shares Outstanding | 0 | 0 |
| Series A Preferred Stock | ||
| Preferred Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
| Preferred Stock, Shares Authorized | 4,200,000 | 4,200,000 |
| Preferred Stock, Shares Issued | 3,693,750 | 2,612,500 |
| Preferred Stock, Shares Outstanding | 3,693,750 | 2,612,500 |
| Series B Preferred Stock | ||
| Preferred Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
| Preferred Stock, Shares Authorized | 0 | 0 |
| Preferred Stock, Shares Issued | 0 | 0 |
| Preferred Stock, Shares Outstanding | 0 | 0 |
Condensed Statements of Operations - USD ($) |
3 Months Ended | |
|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
|
| Details | ||
| Revenue from sale of services | $ 3,250 | $ 0 |
| Operating Expenses | ||
| General and administrative | 204,848 | 35,841 |
| Total Operating Expenses | 204,848 | 35,841 |
| Loss from Operations | (201,598) | (35,841) |
| Interest expense, net | 0 | 0 |
| Net Loss before taxes | (201,598) | (35,841) |
| Net income (tax) benefit | 0 | 0 |
| Net Loss | $ (201,598) | $ (35,841) |
| Weighted Average Number of Shares Outstanding, Basic and Diluted | 5,836,832 | 5,027,703 |
| Net loss per share - basic and diluted | $ (0.03) | $ (0.01) |
NOTE 1 - DESCRIPTION OF BUSINESS |
3 Months Ended |
|---|---|
Jun. 30, 2019 | |
| Notes | |
| NOTE 1 - DESCRIPTION OF BUSINESS | NOTE 1 – DESCRIPTION OF BUSINESS
Kyto Technology and Life Science, Inc. was formed as a Florida corporation on March 5, 1999 under the name of B12 Inc. In August, 2002, the Company changed its name from B Twelve, Inc. to Kyto BioPharma Inc. and in May 2018, the name was changed again to Kyto Technology and Life Science, Inc.
The Company was originally formed to acquire and develop innovative minimally toxic and non-immunosuppressive proprietary drugs for the treatment of cancer, arthritis, and other autoimmune diseases and had been looking at a number of strategies to become active. In April, 2018, the Board adopted a new business plan focused on the development of early stage technology and life science businesses through early stage investment funding. The Company has recruited a number of experienced investment consultants from a network that includes angel investors, corporate managers, and successful entrepreneurs across a number of technology and life science products and markets and relies on input from these advisors in conducting due diligence and making investment decisions. In order to offset the risk in early stage investing, the Company works with angel investment groups and participates only after these groups have committed to invest, and does not invest more than $250,000 in any single investment. The Company plans to generate revenue from two sources: (i) the sale of advisory services to its target investments and (ii) realised gains from the sale of the businesses in which it has invested. Generally, it is expected that investments will be realised from an exit within a period of four years following investment.
The Company has no regular employees, full-time or part-time. The chief executive officer of Kyto Technology and Life Science, Inc. is acting as a consultant to the Company and does not receive compensation.
The Company has created a portfolio of minority investments in early-stage start-up companies and derives its revenue opportunity from the sale of those investments. Such sales are outside its control and depend on M&A transactions which may result in cash or equity proceeds. Accordingly, it is difficult to forecast revenue, net income, and cash flow. The Company currently has $325,000 in the bank and is now actively marketing the first $3 million tranche of a Series B round with a target close date of October 2019. The average monthly expenses for the year ended March 31, 2019 were $22,000 per month so the Company has sufficient cash to fund its operations for the remainder of its financial year ended March 31, 2020 if it simply manages its existing investments. However it plans to ramp up monthly expenditure to market and ensure the success of the Series B round, whereupon, if successful it will have sufficient funding for further investments and ongoing operations. In the event that the Series B close is delayed, management has the ability to slow down expenditure and defer future investment opportunities to balance its cash flow accordingly. While there is a degree of uncertainty in this business model, the Company has two viable alternative options to ensure continuity of liquidity and ongoing operations. |
NOTE 2 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES |
3 Months Ended |
|---|---|
Jun. 30, 2019 | |
| Notes | |
| NOTE 2 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
The accompanying unaudited condensed financial statements of Kyto Technology and Life Science, Inc. (the "Company") have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such SEC rules and regulations. Nevertheless, the Company believes that the disclosures are adequate to make the information presented not misleading. These interim unaudited condensed financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company's March 31, 2019 Annual Report as filed on Form 10K. In the opinion of management, all adjustments, including normal recurring adjustments necessary to present fairly the financial position of the Company with respect to the interim unaudited condensed financial statements and the results of its operations for the interim period ended June 30, 2019, have been included. The results of operations for interim periods are not necessarily indicative of the results for a full year.
REVENUE RECOGNITION
The Company derives revenue from two sources: proceeds from the sale of investments and fees earned from the provision of financial advisory services to portfolio investment companies. As a minority, early-stage investor, the Company does not have the ability to manage the timing or acceptance of liquidity events that will realize its investments, nor the ability to predict when they may happen, although as a guideline, it would expect such events to occur around four years after its investments are made. The Company will book the revenue from investment activities upon completion of sale and receipt of net proceeds, after deducting related transaction expenses. The Company does not recognize any revenue from unrealized gains. The Company is in regular contact with the management of its portfolio investment companies and, from time to time, provides investment advice on a meeting or project basis under its advisory agreements. The services are invoiced, and the revenue recognized, upon completion.
USE OF ESTIMATES
In preparing financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and revenues and expenses during the period presented. Actual results may differ from these estimates.
Significant estimates during 2018 and 2019 include, the valuation of stock options and warrants.
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. There were no cash equivalents at June 30, 2019 and March 31, 2019, respectively.
CONCENTRATIONS
The Company maintains its cash in bank deposit accounts, which, at times, may exceed federally insured limits. As of June 30, 2019, the Company deposits were approximately $75,000 in excess of federally insured limits. The Company has not experienced any losses in such accounts through June 30, 2019 and March 31, 2019, respectively.
NET LOSS PER COMMON SHARE
In accordance with Statement of Financial Accounting Standards Accounting Standard Codification Topic 260, "Earnings per Share", basic earnings per share is computed by dividing the net income less preferred dividends for the period by the weighted average number of common shares outstanding. Diluted earnings per share is computed by dividing net income less preferred dividends by the weighted average number of common shares outstanding including the effect of common stock equivalents. Common stock equivalents, consisting of stock options and warrants, have not been included in the calculation, as their effect is anti-dilutive for the periods presented.
STOCK-BASED COMPENSATION
Financial Accounting Standards Board Accounting Standards Codification Topic 718, “Stock Compensation” requires generally that all equity awards granted to employees be accounted for at “fair value.” This fair value is measured at grant date for stock settled awards, and at subsequent exercise or settlement for cash-settled awards. Under this method, the Company records an expense equal to the fair value of the options or warrants issued. The fair value is computed using the Black Scholes options pricing model. The Company did not grant any options or warrants prior to March 31, 2018.
INCOME TAXES
The Company accounts for income taxes under the Financial Accounting Standards Accounting Standard Codification Topic 740 "Accounting for Income Taxes" ("Topic 740"). Under Topic 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under Topic 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period, which includes the enactment date.
INVESTMENTS
The Company carries investments at the lower of cost or fair market value. These investments are accounted for as cost method investments in accordance with ASC 325 as we own less than 20% of the voting securities and do not have the ability to exercise significant influence over operating and financial policies of the entities. The Company reviews the performance of the underlying investments to determine their current and future potential value and liquidity. In the event that Management considers the value of an investment to be impaired, the carrying value of the investment will be written down by an impairment charge to reflect Management’s estimated valuation.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures”, for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing US GAAP that require the use of fair value measurements which establishes a framework for measuring fair value and expands disclosure about such fair value measurements.
ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:
Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities
Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data
Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions.
DEFERRED FUNDRAISING EXPENSES
The Company commenced a plan to raise a Series B Preferred round of equity to fund its ongoing investment program and cost of operations. Typically, it expects that this plan, from start to finish may take from six to nine months and in order to match the cost and benefits of this process, the Company has adopted a policy of capitalizing direct expenses incurred in the course of fund raising with the intention of netting accumulated expenses against proceeds from sale of equity, and reporting the net funds raised at the close. Direct expenses include legal fees, investor relations fees, investor roadshows and meeting expenses, and related filing and printing fees. |
NOTE 3 - INVESTMENT |
3 Months Ended |
|---|---|
Jun. 30, 2019 | |
| Notes | |
| NOTE 3 - INVESTMENT | NOTE 3 – INVESTMENTS
The Company carries investments at the lower of cost or fair market value. These investments are accounted for as cost method investments in accordance with ASC 325 as we own less than 20% of the voting securities and do not have the ability to exercise significant influence over operating and financial policies of the entities. The Company reviews the performance of the underlying investments to determine their current and future potential value and liquidity. In the event that Management considers the value of an investment to be impaired, the carrying value of the investment will be written down by an impairment charge to reflect Management’s estimated valuation. During the three months ended June 30, 2019, the Company made an aggregate investment of $323,497 in four separate early stage companies. In no case was there any financial or management control over the investment targets, and the ownership interest was below 15%. Accordingly, the Company carries these investments at cost and reviews results and expectations of target companies with target management on at least a quarterly basis to determine if there is any impairment in value, in which case the carrying value of the investment would be revalued. Management reviewed all investments in the quarter ended June 30, 2019 and there were no adjustments made for impairment. |
NOTE 4 - ACCOUNTING STANDARDS UPDATES |
3 Months Ended |
|---|---|
Jun. 30, 2019 | |
| Notes | |
| NOTE 4 - ACCOUNTING STANDARDS UPDATES | NOTE 4 - ACCOUNTING STANDARDS UPDATES
Significant Recent Accounting Pronouncements
Management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying unaudited condensed financial statements. |
NOTE 5 -RELATED PARTY TRANSACTIONS |
3 Months Ended |
|---|---|
Jun. 30, 2019 | |
| Notes | |
| NOTE 5 -RELATED PARTY TRANSACTIONS | NOTE 5 –RELATED PARTY TRANSACTIONS
Directors fees are also included in accrued liabilities – related parties. Directors fees for the years ended March 31, 2019 and 2018 were $0 and $24,000, respectively, and were included in general and administrative expense in the accompanying statements of operations. At March 31, 2019 and 2018, the Company had accrued and owed $2,250 and $0, respectively, to Paul Russo for car and telephone allowance. At June 30, 2019 and March 31, 2019, the Company had accrued and owed $5,000 and $7,250, respectively to officers of the Company for consulting fees and expenses.
The Company now operates virtually, and from public locations, and no longer leases any office space from related parties. |
NOTE 6- EQUITY |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| NOTE 6- EQUITY | NOTE 6– EQUITY
(A) PREFERRED STOCK
As of June 30, 2019 and March 31, 2019, there are 4,200,000 shares of Series A preferred stock (“Series A”) authorized at a par value of $.01 per share. The Company has 3,693,750 and 2,612,500 shares of Series A outstanding at June 30, 2019 and March 31, 2019, respectively as a result of the sale of investment Units at $0.80 per Unit in a private placement to accredited investors. The Units consist of one Series A share and one warrant per Unit. The Series A can either be converted into Common Shares upon listing of the Company on Nasdaq or elect to receive $1.60 per share. In the event of any liquidation or winding up of the Company, the holders of the Series A shall be entitled to receive in preference to the holders of Common Shares a per share amount equal to two times (2x) their original purchase price plus any declared but unpaid dividends (the Liquidation Preference). All share issuances and obligations are recognized on the books and stock register, however, as at the date of this report certificates have not been delivered as a result of administrative delays in transferring to the Company’s selected stock transfer agent. On March 26, 2019 the Board approved resolutions to increase the authorized share capital from 2 million to 4 million Series A Preferred Shares, and the number of units to be sold in the private placement from 3 million to 4 million, subject to demand and investment requirements as determined from time to time by the Board.
Subsequent to June 30, 2019, in readiness for the intended Series B fund raising round, the Company has conducted a proxy vote of shareholders which approved (i) a change of state of incorporation from Florida to Delaware, (ii) amended authorized share capital to 40 million common shares and 30 million preferred shares and (iii) amended the par value of all classes of shares to $0.01 per share. The effective date of this reorganization is July 8, 2019. The impact of these changes has been reflected in both current and prior year financial statements and the related notes to these financial statements.
(B) COMMON STOCK
The Company has authorized 40,000,000 shares of common stock at a par value of $0.01 per share. As of June 30, 2019, and March 31, 2019 a total of 5,836,832 shares of the Company’s common stock were issued and outstanding.
(C) PRIVATE PLACEMENT
In April 2018, in a non-brokered private placement, the Company offered accredited investors an opportunity to purchase a minimum of 875,000 and maximum of 1,500,000 Units. These Units consist of one Series A (convertible into one common share) and one warrant (exercisable into one common share at $1.20 per share for a period of three years). The Preferred Shares can be converted into Common Shares upon listing of the Company on NASDAQ, or redeemed for $1.60 per share. In the event of any liquidation or winding up of the Company, the holders of preferred shares shall be entitled to receive in preference to the holders of Common Shares a per share amount equal to (2x) the Original Purchase price plus any declared but unpaid dividends (“Liquidation preference”). The Units are priced at $0.80 per unit. Subsequently the limit of Unit sales was increased to four million units.
In April 2018, a total of $320,000 of related party loans and accrued liabilities were converted into Units consisting of 400,000 shares of Series A, and 400,000 Warrants to purchase common stock at $1.20 per share. Additionally, since April 2018, the Company has sold 3,293,750 investment units to accredited investors in a private placement for $2,635,000 in cash.
(D) STOCK OPTIONS
In April 2018, the Company approved the introduction of the Kyto Technology and Life Science, Inc. Incentive Stock Option Plan for the benefit of employees, consultants and directors, with the objective of securing the benefit of services for stock options rather than cash salaries. In the nine months ended December 31, 2018, the Company granted a total of 2,697,085 options at an exercise price of $0.006 per share. On May 18, 2018, 1,887,956 options vested upon the initial closing of the private placement and were exercised for $11,328. The remaining balance of 809,129 options became become fully vested upon the final close 1,500,000 units sold in the private placement.
In connection with the grant of stock options the Company recognises the value of the related option expense using the Black Scholes model, with appropriate assumptions for option life, stock value, risk free interest rate, volatility, and cancellations.
There were no option grants in the three months ended June 30, 2019.
The compensation expense calculated at time of grant is amortised over the vesting period for the options granted. During the three months ended June 30, 2019 and 2018, the Company amortised $101 and $3,551, respectively, as option expense.
(E) WARRANTS
In conjunction with the sale of stock Units, the Company issued 3,693,750 warrants to purchase common stock at a price of $1.20 per share for a period of three years. The Company values the warrants using the Black Scholes model, with appropriate assumptions for warrant life, stock value, risk free interest rate, and volatility.
The assumptions used for warrants granted in the three months ended June 30, 2019 were as follows:
At June 30, 2019 the value of the warrants was $0 as the Company did not bifurcate the value of Series A and warrants within the Units sold. The weighted average remaining life of the warrants at June 30, 2019 was 2.36 years. |
NOTE 7 - SUBSEQUENT EVENTS |
3 Months Ended |
|---|---|
Jun. 30, 2019 | |
| Notes | |
| NOTE 7 - SUBSEQUENT EVENTS | NOTE 7 - SUBSEQUENT EVENTS
Subsequent to June 30, 2019, in readiness for the intended Series B fund raising round, the Company has conducted a proxy vote of shareholders which approved (i) a change of state of incorporation from Florida to Delaware, (ii) amended authorized share capital to 40 million common shares and 30 million preferred shares and (iii) amended the par value of all classes of shares to $0.01 per share. The effective date of this reorganization is July 8, 2019. The impact of these changes has been reflected in both current and prior year financial statements and the related notes thereto.
As at July 26, the Company had sold an additional $80,000 of Series A stock units to accredited investors and invested a total of $60,000 in two new investment opportunities. |
NOTE 2 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES: REVENUE RECOGNITION (Policies) |
3 Months Ended |
|---|---|
Jun. 30, 2019 | |
| Policies | |
| REVENUE RECOGNITION | REVENUE RECOGNITION
The Company derives revenue from two sources: proceeds from the sale of investments and fees earned from the provision of financial advisory services to portfolio investment companies. As a minority, early-stage investor, the Company does not have the ability to manage the timing or acceptance of liquidity events that will realize its investments, nor the ability to predict when they may happen, although as a guideline, it would expect such events to occur around four years after its investments are made. The Company will book the revenue from investment activities upon completion of sale and receipt of net proceeds, after deducting related transaction expenses. The Company does not recognize any revenue from unrealized gains. The Company is in regular contact with the management of its portfolio investment companies and, from time to time, provides investment advice on a meeting or project basis under its advisory agreements. The services are invoiced, and the revenue recognized, upon completion. |
NOTE 2 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES: USE OF ESTIMATES (Policies) |
3 Months Ended |
|---|---|
Jun. 30, 2019 | |
| Policies | |
| USE OF ESTIMATES | USE OF ESTIMATES
In preparing financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and revenues and expenses during the period presented. Actual results may differ from these estimates.
Significant estimates during 2018 and 2019 include, the valuation of stock options and warrants. |
NOTE 2 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES: CASH AND CASH EQUIVALENTS (Policies) |
3 Months Ended |
|---|---|
Jun. 30, 2019 | |
| Policies | |
| CASH AND CASH EQUIVALENTS | CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. There were no cash equivalents at June 30, 2019 and March 31, 2019, respectively. |
NOTE 2 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES: CONCENTRATIONS (Policies) |
3 Months Ended |
|---|---|
Jun. 30, 2019 | |
| Policies | |
| CONCENTRATIONS | CONCENTRATIONS
The Company maintains its cash in bank deposit accounts, which, at times, may exceed federally insured limits. As of June 30, 2019, the Company deposits were approximately $75,000 in excess of federally insured limits. The Company has not experienced any losses in such accounts through June 30, 2019 and March 31, 2019, respectively. |
NOTE 2 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES: NET LOSS PER COMMON SHARE (Policies) |
3 Months Ended |
|---|---|
Jun. 30, 2019 | |
| Policies | |
| NET LOSS PER COMMON SHARE | NET LOSS PER COMMON SHARE
In accordance with Statement of Financial Accounting Standards Accounting Standard Codification Topic 260, "Earnings per Share", basic earnings per share is computed by dividing the net income less preferred dividends for the period by the weighted average number of common shares outstanding. Diluted earnings per share is computed by dividing net income less preferred dividends by the weighted average number of common shares outstanding including the effect of common stock equivalents. Common stock equivalents, consisting of stock options and warrants, have not been included in the calculation, as their effect is anti-dilutive for the periods presented. |
NOTE 2 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES: STOCK-BASED COMPENSATION (Policies) |
3 Months Ended |
|---|---|
Jun. 30, 2019 | |
| Policies | |
| STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION
Financial Accounting Standards Board Accounting Standards Codification Topic 718, “Stock Compensation” requires generally that all equity awards granted to employees be accounted for at “fair value.” This fair value is measured at grant date for stock settled awards, and at subsequent exercise or settlement for cash-settled awards. Under this method, the Company records an expense equal to the fair value of the options or warrants issued. The fair value is computed using the Black Scholes options pricing model. The Company did not grant any options or warrants prior to March 31, 2018. |
NOTE 2 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES: INCOME TAXES (Policies) |
3 Months Ended |
|---|---|
Jun. 30, 2019 | |
| Policies | |
| INCOME TAXES | INCOME TAXES
The Company accounts for income taxes under the Financial Accounting Standards Accounting Standard Codification Topic 740 "Accounting for Income Taxes" ("Topic 740"). Under Topic 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under Topic 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period, which includes the enactment date. |
NOTE 2 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES: INVESTMENTS (Policies) |
3 Months Ended |
|---|---|
Jun. 30, 2019 | |
| Policies | |
| INVESTMENTS | INVESTMENTS
The Company carries investments at the lower of cost or fair market value. These investments are accounted for as cost method investments in accordance with ASC 325 as we own less than 20% of the voting securities and do not have the ability to exercise significant influence over operating and financial policies of the entities. The Company reviews the performance of the underlying investments to determine their current and future potential value and liquidity. In the event that Management considers the value of an investment to be impaired, the carrying value of the investment will be written down by an impairment charge to reflect Management’s estimated valuation. |
NOTE 2 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES: FAIR VALUE OF FINANCIAL INSTRUMENTS (Policies) |
3 Months Ended |
|---|---|
Jun. 30, 2019 | |
| Policies | |
| FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures”, for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing US GAAP that require the use of fair value measurements which establishes a framework for measuring fair value and expands disclosure about such fair value measurements.
ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:
Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities
Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data
Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions. |
NOTE 2 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES: DEFERRED FUNDRAISING EXPENSES (Policies) |
3 Months Ended |
|---|---|
Jun. 30, 2019 | |
| Policies | |
| DEFERRED FUNDRAISING EXPENSES | DEFERRED FUNDRAISING EXPENSES
The Company commenced a plan to raise a Series B Preferred round of equity to fund its ongoing investment program and cost of operations. Typically, it expects that this plan, from start to finish may take from six to nine months and in order to match the cost and benefits of this process, the Company has adopted a policy of capitalizing direct expenses incurred in the course of fund raising with the intention of netting accumulated expenses against proceeds from sale of equity, and reporting the net funds raised at the close. Direct expenses include legal fees, investor relations fees, investor roadshows and meeting expenses, and related filing and printing fees. |
NOTE 6- EQUITY: Schedule of Stock Options (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Tables/Schedules | |||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Stock Options |
|
NOTE 6- EQUITY: Schedule of Fair Value Asumptions, Options (Tables) |
3 Months Ended | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||
| Tables/Schedules | |||||||||||||||
| Schedule of Fair Value Asumptions, Options |
|
NOTE 6- EQUITY: Schedule of Warrants (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||
| Tables/Schedules | |||||||||||||||||||||||||||||||||||||
| Schedule of Warrants |
|
NOTE 6- EQUITY: Schedule of Fair Value Assumptions, Warrants (Tables) |
3 Months Ended | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||
| Tables/Schedules | |||||||||||||||
| Schedule of Fair Value Assumptions, Warrants |
|
NOTE 1 - DESCRIPTION OF BUSINESS (Details) |
3 Months Ended |
|---|---|
Jun. 30, 2019 | |
| Entity Incorporation, State or Country Code | FL |
| Entity Incorporation, Date of Incorporation | Mar. 05, 1999 |
| Entity Information, Former Legal or Registered Name | Kyto BioPharma Inc. |
| Previous Name | |
| Entity Information, Former Legal or Registered Name | B Twelve, Inc. |
NOTE 2 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES: CASH AND CASH EQUIVALENTS (Details) - USD ($) |
Jun. 30, 2019 |
Mar. 31, 2019 |
|---|---|---|
| Details | ||
| Cash and Cash Equivalents, at Carrying Value | $ 0 | |
| Cash Equivalents, at Carrying Value | $ 0 |
NOTE 3 - INVESTMENT (Details) |
3 Months Ended |
|---|---|
|
Jun. 30, 2019
USD ($)
| |
| Details | |
| Aggregate investment in early stage companies | $ 323,497 |
NOTE 5 -RELATED PARTY TRANSACTIONS (Details) - USD ($) |
3 Months Ended | ||
|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Mar. 31, 2019 |
|
| Payments for Other Fees | $ 0 | $ 24,000 | |
| Paul Russo | |||
| Due to Employees, Current | 2,250 | $ 0 | |
| Officers of the Company | |||
| Due to Officers or Stockholders, Current | $ 5,000 | $ 7,250 | |
NOTE 6- EQUITY (Details) |
3 Months Ended | ||
|---|---|---|---|
|
Jun. 30, 2019
USD ($)
$ / shares
shares
|
Jun. 30, 2018
USD ($)
|
Mar. 31, 2019
$ / shares
shares
|
|
| Common Stock, Shares Authorized | 40,000,000 | 40,000,000 | |
| Common Stock, Par or Stated Value Per Share | $ / shares | $ 0.01 | $ 0.01 | |
| Common Stock, Shares, Issued | 5,836,832 | 5,836,832 | |
| Common Stock, Shares, Outstanding | 5,836,832 | 5,836,832 | |
| Fair Value Measurements, Valuation Techniques | Black Scholes model | ||
| Option expense amortized | $ | $ 101 | $ 3,551 | |
| Warrants, value | $ | $ 0 | ||
| Weighted average remaining life of warrants (years) | 2.36 | ||
| Series A Preferred Stock | |||
| Preferred Stock, Shares Authorized | 4,200,000 | 4,200,000 | |
| Preferred Stock, Par or Stated Value Per Share | $ / shares | $ 0.01 | $ 0.01 | |
NOTE 6- EQUITY: Schedule of Fair Value Asumptions, Options (Details) - Stock Options |
3 Months Ended |
|---|---|
|
Jun. 30, 2019
$ / shares
| |
| Stock Price at grant date | $ 0.006 |
| Exercise Price | $ 0.006 |
| Term in Years | 1 year |
| Volatility assumed | 73.00% |
| Annual dividend rate | 0.00% |
| Risk free discount rate | 1.79% |
NOTE 6- EQUITY: Schedule of Fair Value Assumptions, Warrants (Details) - Warrants |
3 Months Ended |
|---|---|
|
Jun. 30, 2019
$ / shares
| |
| Stock Price at Valuation | $ 0.006 |
| Exercise Price | $ 1.20 |
| Term in Years | 3 years |
| Volatility assumed | 73.00% |
| Annual dividend rate | 0.00% |
| Risk free discount rate | 1.79% |
NOTE 7 - SUBSEQUENT EVENTS (Details) |
3 Months Ended |
|---|---|
Jun. 30, 2019 | |
| Event 1 | |
| Subsequent Event, Description | Company has conducted a proxy vote of shareholders |
| Event 2 | |
| Subsequent Event, Description | sold an additional $80,000 of Series A stock units to accredited investors |
| Event 3 | |
| Subsequent Event, Description | invested a total of $60,000 in two new investment opportunities |
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