10-Q 1 bioadaptive10q.htm FORM 10-Q

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

 

[X] Quarterly report pursuant Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the quarterly period ended September 30, 2014

 

[_] Transition report pursuant Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from _______ to _______

 

000-54949

(Commission file number)

 

BioAdaptives Inc.

(Exact name of registrant as specified in its charter)

 

 

Delaware   46-2592228

(State or other jurisdiction of incorporation

or organization)

  (I.R.S. Employer Identification No.)
     

 

1003 S. Cimarron Rd, Las Vegas NV

  89145
(Address of principal executive offices)   (Zip Code)

 

 

(702) 630 2280

(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.

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 (§ 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          o     Accelerated filer                    o     
Non-accelerated filer            o      Smaller reporting company   þ

(Do not check if a smaller reporting company)

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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes [_] No [X]

 

On November 14, 2014, 12,636,436 shares of the registrant's common stock were outstanding.

 

 

 

 

 

 

 

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TABLE OF CONTENTS

 

PART I    
Item 1. Financial Statements 4
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 13
Item 3. Quantitative and Qualitative Disclosures About Market Risk 20
Item 4. Controls and Procedures 20
PART II    
Item 1. Legal Proceedings 21
Item 1A. Risk Factors 21
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 21
Item 3. Defaults Upon Senior Securities 21
Item 4. Mine Safety Disclosures 21
Item 5. Other Information 21
Item 6. Exhibits 22
  Signatures 23

 

 

 

 

 


 

 

 

3
 

 

PART I – FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

 

BIOADAPTIVES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

        September 30,   December 31,
        2014   2013
 ASSETS  (Unaudited)    
             
Current assets:      
  Cash  $                37,913    $                18,609
  Deposit                      1,700                        1,700
  Prepaid expense                    25,540                               -
  Marketable securities                    32,355                    100,000
                           97,508                    120,309
             
Furniture and fixtures, net                      1,186                              --
             
Total assets  $                98,694    $              120,309
             
 LIABILITIES AND STOCKHOLDERS' DEFICIT      
             
Current liabilities      
  Accounts payable and accrued liabilities  $                18,446    $                      --   
  Deferred revenue 51,079                               -
  Advance from Ferris Holding, Inc. - related party                    34,839                      31,839
  Note payables - related party                    34,000                              --
Total current liabilities                  138,364                      31,839
             
Stockholders' deficit:      
  Preferred stock, ($.0001 par value, 5,000,000      
    shares authorized; none issued and outstanding.)                             -                               -
  Common stock ($.0001 par value, 100,000,000 shares authorized;      
    12,636,436 and 12,041,667 shares issued and outstanding      
    as of September 30, 2014 and December 31, 2013, respectively)                      1,265                        1,204
  Additional paid-in capital                  283,309                    205,545
  Accumulated Deficit                (295,061)                    (18,279)
  Accumulated other comprehensive income (loss)                  (29,183)                  (100,000)
  Total stockholders' deficit                  (39,670)                      88,470
             
Total liabilities and stockholders' deficit  $                98,694    $              120,309

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

 

4
 

 

 

BIOADAPTIVES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

 

           Three months ended
September 30,
2014
   Three months ended
September 30,
2013
   Nine months ended
September 30,
2014
   April 19, 2013 to September 30, 2013
                       
Revenue    $                       -       $                       -       $                      -       $                       -   
                       
Cost of sales                              -                               -                             -                               -
                       
Gross Margin                             -                               -                             -                               -
                       
Operating expenses:                
    General and administrative                        3,949                        1,249                     20,321                       2,749
    Depreciation                           264                               -                          395                               -
    Stock-based compensation - services                               -                               -                     54,000                               -
    Stock-based compensation  - related party                
      - services                               -                               -                     23,825                               -
    Professional fees                      18,060                               -                     39,571                               -
      Total operating expenses                      22,273                        1,249                   138,112                       2,749
                       
Operating income (loss)                    (22,273)                      (1,249)                 (138,112)                     (2,749)
                       
Other income (expenses)                
    Other income                           200                               -                          200                               500
    Interest - related party                         (406)                            (406)    
    Loss on sale of marketable securities                               -                               -                 (138,462)                               -
      Total other income (expense)                         (206)                               -                 (138,668)                               500
                       
Net income (loss)    $              (22,479)    $                (1,249)    $           (276,780)    $               (2,249)
                       
Other comprehensive income (loss), net of tax                
    Unrealized gain (loss) on marketable securities                    (29,077)                               -                   (29,183)                               -
      Other comprehensive income (loss)                    (29,077)                               -                   (29,183)                               -
                       
Comprehensive income (loss)    $              (51,556)    $                (1,249)    $           (305,963)    $               (2,249)
                       
Basic loss per common share    $                  (0.00)    $                  (0.00)    $                 (0.02)    $                 (0.00)
                       
Basic weighted average common                
    shares outstanding               12,636,436               10,000,000              12,422,356              10,000,000

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

 

5
 

 

 

BIOADAPTIVES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

 

           Nine months ended
September 30,
2014
   April 19, 2013 to
September 30,
2013
               
Cash flows from operating activities:        
  Net loss    $            (276,780)    $                 (2,249)
  Adjustments to reconcile net loss to net        
   cash provided by (used in) operating activities:        
    Depreciation                           395                                 -
    Stock-based compensation                      54,000                                 -
    Stock-based compensation - related party                      23,825                         1,000
    Loss on marketable securities                    138,462                                 -
  Changes in operating assets and liabilities:        
     Prepaid expense                    (25,540)                                 -
    Accounts payable and accrued liabilities                      18,446                            500
    Deferred revenue                      51,079                                 -
      Net cash used in operating activities                    (16,113)                          (749)
               
Cash flows from investing activities:        
    Purchase of furniture and fixtures                      (1,583)                                 -
                             (1,583)                                 -
Cash flows from financing activities:        
  Advances from related party                        3,000                                 -
  Note payable - related party                      34,000                                 -
  Proceeds from additional paid-in capital - related party                               -                            749
      Net cash provided by financing activities                      37,000                            749
               
Net change in cash                      19,304                                 -
               
Cash, beginning of period                      18,609                                 -
               
Cash, end of period    $                37,913    $                           -
               
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:    
  Cash paid for interest    $                         -    $                           -
  Cash paid for taxes    $                         -    $                           -

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

  

 

6
 

 

BioAdaptives, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the Nine months Ended September 30, 2014
(UNAUDITED)

 

 

1. DESCRIPTION OF BUSINESS AND HISTORY

 

Description of business – BioAdaptives, Inc. (formerly known as APEX 8 Inc.) (“BioAdaptives”,”Company”) was incorporated under the laws of the State of Delaware on April 19, 2013. BioAdaptives is a research, development, and educational company. Our current focus is on products that improve health and wellness. These products include dietary supplements, specialty food items, and proprietary methods of optimizing the bioelectromagnetic availability of foods and beverages.

 

On September 11, 2013, BioAdaptives incorporated Blenders Choice Inc (“Blenders”) in Nevada. Blenders is a 100% owned subsidiary and was created as a separate sales and marketing organization. BioAdaptives does not plan to sell or market products directly, instead seeking to use Blenders as its marketing arm.

 

On September 1, 2014, the Company entered into a License Agreement (“Agreement”) with the Ferris Holding, Inc. (“Ferris”). The Agreement gives the Company the right use of the Ferris’s proprietary processes and trade secrets, including its stem cell enhancement products. In consideration for these rights, the Company agrees to pay Ferris a fee of 5% of the gross revenue for the products produced and sold by the Company or by way of sub-license pursuant to the rights granted under this Agreement. The initial term of the Agreement is twelve (12) months.

 

On September 1, 2014, the Company entered into a Sub-License Agreement (“Sub-License”) with Essence International, Ltd. (“Essence”). The Sub-License gives Essence the right to use proprietary processes and trade secrets, including its stem cell enhancement products which were obtained by the Company in the Agreement with Ferris. In consideration for the Sub-License, Essence agreed to pay the Company a royalty of 10% of the gross revenue for the products produced and sold by Essence pursuant to the rights granted under this Sub-License. The initial term of the Agreement is twelve (12) months.

 

2. SUMMARY OF SIGNIFICANT POLICIES

 

Pursuant to the rules and regulations of the Securities and Exchange Commission for Form 10-Q, the financial statements, footnote disclosures and other information normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”) have been condensed or omitted. The financial statements contained in this report are unaudited but, in the opinion of management, reflect all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of the financial statements. The results of operations for any interim period are not necessarily indicative of results for the full year. The balance sheet at December 31, 2013, has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. The Company has elected a fiscal year ending on December 31.

Consolidation – The accompanying consolidated financial statements include the accounts of the Company and its 100% owned subsidiary, Blenders Choice Inc. All inter-company balances and transactions have been eliminated. The Company and its subsidiary will be collectively referred to herein as the “Company.”

 

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Use of estimates – The preparation of financial statements in conformity with US GAAP requires the Company to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. These estimates and judgments are based on historical information, information that is currently available to the Company, and on various other assumptions that the Company believes to be reasonable under the circumstances. Actual results could differ from those estimates.

 

Cash and cash equivalents – Cash and cash equivalents consist of cash and short-term investments with original maturities of less than 90 days. Cash equivalents are placed with high credit quality financial institutions and are primarily in money market funds. The carrying value of those investments approximates fair value. As of September 30, 2014, the Company has no cash equivalents.

 

Investment Securities - Equity securities are classified as available for sale and are stated at fair value with unrealized gains and losses excluded from earnings and reported in other comprehensive income, net of tax. All available for sale securities are classified as current assets as they are available to support the Company's current operating needs in the next 12 months. Realized gains and losses on the sale of investment securities are recognized at the settlement date using the specific identification method and are included in the statements of operations.

 

In accordance with Accounting Standards Codification (“ASC”) 320-10, "Investments-Debt and Equity Securities," the Company evaluates its securities portfolio for other-than-temporary impairment ("OTTI") throughout the year. Each investment that has a fair value less than the book value is reviewed on a quarterly basis by management. Management considers at a minimum the following factors that, both individually or in combination, could indicate that the decline is other-than-temporary: (a) the Company has the intent to sell the security; (b) it is more likely than not that it will be required to sell the security before recovery; and (c) the Company does not expect to recover the entire amortized cost basis of the security. Among the factors that are considered in determining intent is a review of capital adequacy, interest rate risk profile and liquidity at the Company. An impairment charge is recorded against individual securities if the review described above concludes that the decline in value is other-than-temporary.

 

Revenue Recognition – Revenue is only recognized when all of the following criteria are met: (1) persuasive evidence of an arrangement exists, (2) delivery has occurred or services have been rendered, (3) the price to the buyer is fixed or determinable, and (4) collectability is reasonably assured. License fees are recognized as revenue when they are earned.

 

Earnings (loss) per share – Basic earnings (loss) per common share is computed by dividing net income (loss) available to common shareholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per common share is computed by dividing income available to common shareholders by the weighted-average number of shares of common stock outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if potentially dilutive securities had been issued. There were no potentially dilutive securities outstanding during the periods presented.

 

Stock-based compensation – The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with Financial Accounting Standards Board (“FASB”) ASC 718-10, Compensation – Stock Compensation, and the conclusions reached by FASB ASC 505-50, Equity – Equity-Based Payments to Non-Employees. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services as defined by FASB ASC 505-50.

 

Fair value of financial instruments – As required by the Fair Value Measurements and Disclosures Topic of FASB ASC 820-10 (“ASC 820-10”), fair value is measured based on a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

 

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The three levels of the fair value hierarchy are described below:

 

Level 1   Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
Level 2   Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability;
Level 3   Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

 

Pursuant to ASC 825, Financial Instruments, the fair value of cash and marketable securities is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. The Company believes that the recorded values of cash, accounts receivables, accounts payable and accrued liabilities, and notes payable approximate their current fair values because of their nature and respective relatively short maturity dates or durations.

 

On May 21, 2014, the Company entered into a Stock Sale and Purchase Agreement (the “Agreement”) with BioSwan, Inc., a Nevada corporation (“BioSwan”), pursuant to which, BioSwan agreed to purchase 200,000,000 shares of restricted stock of CleanPath Resources Corp., a Nevada corporation (the “CleanPath Shares”). BioSwan agreed to transfer to the Company, as payment for the CleanPath Shares, a total of 1,057,362 shares of restricted stock of Hemp, Inc. (the “Hemp Shares”) owned by BioSwan. As a result of the Agreement, the Company recorded a loss on sale of marketable securities of $0 and $138,462 for the three and nine months ended September 30, 2014.

 

Assets measured at fair value on a recurring basis were presented on the Company’s balance sheets as of September 30, 2014.

 

Fair Value Measurements as of September 30, 2014 Using:
    Total Carrying Value as of 9/30/2014  

Quoted Market Prices in Active Markets

(Level 1)

 

Significant Other Observable Inputs

(Level 2)

 

Significant Unobservable Inputs

(Level 3)

Assets:                                
Equity securities   $ 32,355     $ 32,355     $ —       $ —    
Total   $ 32,355     $ 32,355     $ —       $ —    

 

Equity securities at September 30, 2014, comprised 1,057,362 shares of common stock of Hemp, Inc. (HEMP.PK) recorded at fair value of $32,355 ($0.0306 per share).

 

Concentration of credit risk – Financial instruments that potentially expose the Company to significant concentrations of credit risk consist principally of cash. The Company places its cash with financial institutions with high credit ratings.

 

Advertising costs - Advertising costs are anticipated to be expensed as incurred; however there were no advertising costs included in general and administrative expenses for the period ended September 30, 2014.

 

Income taxes – The Company records income taxes under the asset and liability method, whereby deferred tax assets and liabilities are recognized based on the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and attributable to operating loss and tax credit carryforwards. Accounting standards regarding income taxes requires a reduction of the carrying amounts of deferred tax assets by a valuation allowance, if based on the available evidence, it is more likely than not that such assets will not be realized. Accordingly, the need to establish valuation allowances for deferred tax assets is assessed at each reporting period based on a more- likely-than-not realization threshold. This assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carryforward periods, the Company’s experience with operating loss and tax credit carryforwards not expiring unused, and tax planning alternatives.

 

9
 

 

The Company recorded valuation allowances on the net deferred tax assets. Management will reassess the realization of deferred tax assets based on the accounting standards for income taxes each reporting period. To the extent that the financial results of operations improve and it becomes more likely than not that the deferred tax assets are realizable, the Company will be able to reduce the valuation allowance.

 

Significant judgment is required in evaluating the Company’s tax positions and determining its provision for income taxes. During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. Accounting standards regarding uncertainty in income taxes provides a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more than 50% likely, based solely on the technical merits, of being sustained on examinations. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may require periodic adjustments and which may not accurately anticipate actual outcomes.

 

Recent Accounting Pronouncements – In June 2014, the FASB issued ASU 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements. ASU 2014-10 eliminates the distinction of a development stage entity and certain related disclosure requirements, including the elimination of inception-to-date information on the statements of operations, cash flows and stockholders' equity. The amendments in ASU 2014-10 will be effective prospectively for annual reporting periods beginning after December 15, 2014, and interim periods within those annual periods, however early adoption is permitted. The Company early adopted ASU 2014-10 during the quarter ended September 30, 2014, thereby no longer presenting or disclosing any information required by Topic 915.

 

In August 2014, the FASB ASU No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, amending FASB Accounting Standards Subtopic 205-40 to provide guidance about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. Specifically, the amendments (1) provide a definition of the term “substantial doubt,” (2) require an evaluation every reporting period, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that financial statements are issued.  ASU 2014-15 is effective for fiscal years ending after December 15, 2016, and for annual periods and interim periods thereafter.  The Company is currently evaluating ASU 2014-15 and does not anticipate a material impact on its consolidated financial statements.

 

3. GOING CONCERN

 

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred losses since inception and had an accumulated deficit of $295,061 as of September 30, 2014. The Company requires capital for its contemplated operational and marketing activities. The Company’s ability to raise additional capital through the future issuances of common stock is unknown. The obtainment of additional financing, the successful development of the Company’s contemplated plan of operations, and its transition, ultimately, to the attainment of profitable operations are necessary for the Company to continue operations. The ability to successfully resolve these factors raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements of the Company do not include any adjustments that may result from the outcome of these aforementioned uncertainties.

 

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In order to mitigate the risk related with this uncertainty, the Company plans to issue additional shares of common stock for cash and services during the next 12 months.

 

4.     STOCKHOLDERS’ EQUITY

 

Preferred Stock – The Company is authorized to issue 5,000,000 shares of $.0001 par value preferred stock. As of September 30, 2014, and December 31, 2013, no shares of preferred stock had been issued.

 

Common Stock - The Company is authorized to issue 100,000,000 shares of $.0001 par value common stock. As of September 30, 2014, there were 12,636,436 shares of the Company’s common stock issued and outstanding. As of December 31, 2013, 12,041,667 shares were issued and outstanding.

 

On May 8, 2014, Ferris Holding Inc. (“FHI”) agreed to the cancellation of 44,369 shares of the Company’s restricted common stock held by FHI, and Oxford Capital Group (“Oxford”), agreed to the cancellation of 54,171shares of the Company’s restricted common stock held by Oxford in connection with the spinout of the Company’s shares by Hemp, Inc. Subsequent to that cancellation, the Company’s Board of Directors determined that based on the substantial contributions that FHI has made to the Company’s initial development, it was in the best interest of the Company to issue to FHI 98,540 shares of the Company’s common stock. The shares were issued effective May 20, 2014.

 

Effective April 10, 2014, the Company’s Board of Directors approved the issuance of an aggregate of 550,000 shares of the Company’s restricted common stock valued at $66,000 ($0.12 per share) to five individuals who had been instrumental in helping establish the Company, providing services and valuable insight into strategy and plans. The shares were to be issued pursuant to restricted stock grant agreements which outlined certain provisions relating to tax treatment of the grants, restrictions on resale of the shares, and rights as a shareholder of the shares granted. As of the date of this Report, the Company had received executed agreements from all of the recipients of the shares. Included in the 550,000 shares of the Company’s restricted common stock approved on April 10, 2014 are 100,000 shares valued at $12,000 ($0.12 per share) issued to Gerald Epling, the Company’s Chief Executive Officer, Chief Financial Officer, and a member of the Company’s Board of Directors.

 

5.     ADVANCES FROM FERRIS HOLDINGS, INC. – RELATED PARTY

 

Advances from Ferris Holding, Inc., the controlling shareholder of the Company, are non-interest bearing, unsecured and due on demand. Advances outstanding at September 30, 2014 and June 30, 2014 are $34,839 and $31,839, respectively.

 

6.     NOTE payableS – related party

 

On April 23, 2014, June 4, 2014 and July 2, 2014, the Company entered into a loan agreements for principal of $6,000, $8,000 and $20,000, respectively, with Ferris Holding, Inc., the controlling shareholder of the Company. These loans bears interest of 4% per annum, are unsecured and are due one year after the issue date. Interest payable due to Ferris of $406 is included in accounts payable and accrued liabilities on the condensed consolidated balance sheet.

 

7.     RELATED PARTY TRANSACTIONS

 

On September 1, 2014, the Company entered into a License Agreement (“Agreement”) with the Ferris Holding, Inc. (“Ferris”). The Agreement gives the Company the right use of the Ferris’s proprietary processes and trade secrets, including its stem cell enhancement products. In consideration for these rights, the Company agrees to pay Ferris a fee of 5% of the gross revenue for the products produced and sold by the Company or by way of sub-license pursuant to the rights granted under this Agreement. The initial term of the Agreement is twelve (12) months. During the three months ended September 30, 2014, the Company reported prepaid expenses of $25,540 for fees paid under this Agreement. Ferris is the majority shareholder of the Company.

 

11
 

 

On September 1, 2014, the Company entered into a Sub-License Agreement (“Sub-License”) with Essence International, Ltd. (“Essence”). The Sub-License gives Essence the right to use proprietary processes and trade secrets, including its stem cell enhancement products which were obtained by the Company in the Agreement with Ferris. In consideration for the Sub-License, Essence agreed to pay the Company a royalty of 10% of the gross revenue for the products produced and sold by Essence pursuant to the rights granted under this Sub-License. The initial term of the Agreement is twelve (12) months. During the three months ended September 30, 2014, the Company reported deferred revenue of $51,079 for fees received under this Sub-License. These fees were not recorded as revenue since delivery was not completed. Barry Epling, the Chief Executive Officer of the Company, is the Chief Executive Officer and shareholder of the Essence.

 

On June 1, 2014, the Company entered into a rental agreement with Ferris for the corporate office. Monthly rent is $1,500. The term of the lease is month to month. During the three and nine months ended, the Company reported rent expense of $4,500 and $6,000, respectively related to this rental agreement. At September 30, 2014, rent payable due to Ferris of $2,859 is included in accounts payable and accrued liabilities on the condensed consolidated balance sheet.

 

See Note 4 – Stockholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

12
 

 

CAUTIONARY STATEMENT FOR FORWARD-LOOKING STATEMENTS

 

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  We have based these forward-looking statements on our current expectations and projections about future events, and they are applicable on as of the dates of such statement.  These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements.  In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “could,” “would,” “forecast,” “expect,” “plan,” anticipate,” believe,” estimate,” continue,” or the negative of such terms or other similar expressions.  Factors that might cause or contribute to such a discrepancy include, but are not limited to, those listed under the heading “Risk Factors” and those listed in our other SEC filings. You should not put undue reliance on any forward-looking statements. These statements speak only as of the date of this Quarterly Report on Form 10-Q, even if subsequently made available on our website or otherwise, and we expressly disclaim any obligation to update or revise these statements to reflect events or circumstances occurring after the date of this Quarterly Report on Form 10-Q.  The following discussion should be read in conjunction with our Financial Statements and related Notes thereto included elsewhere in this report. Throughout this Quarterly Report on Form 10-Q we will refer to BioAdaptives, Inc., together with its subsidiaries, as “BioAdaptives,” the “Company,” “we,” “us,” and “our.”

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Overview

 

The Company was incorporated as APEX 8 Inc. in the state of Delaware on April 19, 2013. On May 3, 2013, we filed a registration statement on Form 10 to register with the U.S. Securities and Exchange Commission as a public company. We were originally organized as a vehicle to investigate and, if such investigation warranted, acquire a target company or business seeking the perceived advantages of being a publicly held corporation.

 

On June 21, 2013, our sole officer and director, Richard Chiang entered into a Share Purchase Agreement pursuant to which he sold an aggregate of 10,000,000 shares of the Company’s common stock to Ferris Holding Inc. (“FHI”) at a purchase price of $40,000. In the aggregate, these shares represented 100% of the Company’s issued and outstanding common stock. Effective upon the closing of the Share Purchase Agreement, Richard Chiang owned no shares of the Company’s stock.

 

Additionally, on June 21, 2013, the Company accepted the resignations of Richard Chiang as the Company’s President, Chief Executive Officer, Chief Financial Officer, Secretary and Chairman of the Board of Directors. These resignations were in connection with the consummation of the Share Purchase Agreement with FHI, and were not the result of any disagreement with the Company on any matter relating to the Company's operations, policies, or practices. Effective as of the same date, to fill the vacancies created by Richard Chiang’s resignations, the Company elected and appointed Barry K. Epling as Chairman of the Board of Directors, and Gerald A. Epling, as President, Chief Executive Officer, Secretary, Chief Financial Officer and Member of the Board of Directors of the Company.

 

On September 24, 2013, the Board of Directors and majority stockholder of the Company approved an amendment to the Company’s Certificate of Incorporation to change the name of the Company from APEX 8 Inc. to BioAdaptives, Inc. On September 25, 2013, the Company filed a Certificate of Amendment to the Certificate of Incorporation with the Secretary of State of Delaware to change the name of the Company to BioAdaptives, Inc.

 

Discussion

 

We can make no assurances that we will find commercial success in any of our products. We plan to rely upon our sales and licensing of our licensed Agronifier technology and direct and indirect sales of the P-3 and NutraLoad® products for revenues, neither of which have produced any significant revenue since our inception. We are a new company and thus have very limited experience in sales expectations and forecasting. We also have not fully discovered any seasonality to our business as we began operations within the previous third quarter of 2013.

 

13
 

 

COMPETITION

 

As a new entrant in the nutraceuticals market, we compete in an industry intensely focused on brand recognition, efficacy claims, pricing, and marketing. The nutraceuticals industry is a largely unregulated and fragmented industry. There are numerous companies that compete with us, and many of our competitors are larger than us, have greater access to capital, and may be better able to withstand volatile market conditions. Moreover, because the nutraceutical industry generally has low barriers to entry, additional competitors could enter the market at any time. In that regard, although the nutraceutical industry to date has been characterized by many relatively small participants, there can be no assurance that national or international companies (which may include pharmaceutical companies or other suppliers to mass merchandisers) will not seek to enter or to increase their presence in this industry. Increased competition in the industry could have an adverse effect on the Company.

According to Euromonitor International’s report on Vitamins and Dietary Supplements in the US, dated April 2013 (copy on file with the Company), as of early 2013 there were six companies which controlled more than 2% each of the market, with the largest controlling 6%. Together this group controlled approximately22.4% of the US market. According to the Euromonitor report, another 28 companies controlled approximately 24% of the market. This leaves approximately 53.6% of the market controlled by very small independent companies. The market is extremely competitive for similar products with over one hundred companies competing for market share.

DEPENDENCE ON FERRIS HOLDING

 

We rely on our majority shareholder, FHI, to a great extent for support. While we have incurred losses since inception, our business was funded initially by FHI and by our President, CEO, and CFO, Gerald Epling. Gerald Epling previously was an officer of FHI, although as of April 2014, he had resigned and had no management position with FHI. As noted above, Gerald Epling resigned from all positions with the Company on July 13, 2014. Additionally, he is the brother of Barry Epling, who is the founder and is the sole officer and director of FHI. If we cannot achieve commercial success in our products, we will need to continue to rely on FHI for support. If FHI at any time decides to alter or change materially our arrangement, we could experience a material adverse effect on the Company.


RELIANCE ON KEY MANAGEMENT

 

The operation of the Company requires managerial and operational expertise. In particular, the Company is dependent upon the management and leadership skills of Barry Epling, the Chairman of the Board and sole officer. Additionally, the Company relies heavily upon the professional medical and scientific advice from its Advisory Board which includes Dr. Jun Gu M.D., Ph.D., Dr. Edward E. Jacobs Jr. M.D., and Dr. Antonina Nabokova, M.D. None of the key management employees has a long-term employment contract with the Company, and there can be no assurance that such individuals will remain with the Company. The failure of such key personnel to continue to be active in management could have a material adverse effect on the Company.

 

RISKS ASSOCIATED WITH IMPLEMENTATION OF BUSINESS STRATEGY

 

Implementation of the Company's business strategy is subject to risks and uncertainties, including certain factors that are within the Company's control and other factors that are outside of the Company's control. In addition, certain elements of the Company's business strategy, notably the licensing of additional business lines from FHI, or other companies could result in significant expenditures of cash and management resources.

 

14
 

 

RISKS ASSOCIATED WITH ACQUISITIONS

 

The Company intends to use its equity to pursue acquisitions in the future as a component of the Company's business strategy, although as of the date of this Quarterly Report, the Company did not have any definitive agreements relating to any acquisitions. There can be no assurances that attractive acquisition opportunities will be available to the Company, that the Company will be able to obtain financing for or otherwise consummate any future acquisitions or that any acquisitions which are consummated will prove to be successful. Moreover, acquisitions involve numerous risks, including the risk that the acquired business will not perform in accordance with expectations, difficulties in the integration of the operations and products of the acquired businesses with the Company's other businesses, the diversion of management's attention from other aspects of the Company's business, the risks associated with entering geographic and product markets in which the Company has limited or no direct prior experience and the potential loss of key employees of the acquired business. The acquisition of another business can also subject the Company to liabilities and claims arising out of such business. In addition, future acquisitions would likely require additional financing, which would likely result in an increase in the Company's indebtedness or the issuance of additional capital stock which could be dilutive to holders of shares issued in the event of an Offering.

 

NO ASSURANCE OF FUTURE INDUSTRY GROWTH

 

Although market data referred to in this Quarterly Report and otherwise available to investors regarding the size and projected growth rates of the nutraceuticals market and our target demographic indicate that such markets are large and rapidly growing, there can be no assurance that such markets are as large as reported or that such projected growth will occur or continue. Market data and projections, such as those presented in this Quarterly Report, are inherently uncertain and subject to change. In addition, the underlying market conditions are subject to change based on economic conditions, consumer preferences and other factors that are beyond the Company's control. There can be no assurance that an adverse change in size or growth rate of the nutraceuticals market will not have a material adverse effect on the Company.

 

RISKS ASSOCIATED WITH INTERNATIONAL MARKETS

 

The Company's growth likely will be dependent in part upon its ability to expand its operations into new markets, including international markets. The Company may experience difficulty entering new international markets due to greater regulatory barriers, the necessity of adapting to new regulatory systems and problems related to entering new markets with different cultural bases and political systems. Operating in international markets exposes the Company to certain risks, including, among other things: (i) changes in or interpretations of foreign regulations that may limit the Company's ability to sell certain products or repatriate profits to the United States, (ii) exposure to currency fluctuations, (iii) the potential imposition of trade or foreign exchange restrictions or increased tariffs and (iv) political instability. If the Company seeks to expand international operations, these and other risks associated with international operations are likely to increase.

 

Recent Developments

 

Termination of CleanPath Agreements

 

On May 1, 2014, the Company received correspondence from CleanPath Resources Corp. (“CleanPath”) that CleanPath was terminating the agreements between CleanPath and BioSwan, Inc. (“BioSwan”), which the Company acquired from BioSwan on October 21, 2013, in connection with the purchase by the Company of the assets of BioSwan. The Company assumed the obligations of BioSwan pursuant to two agreements, as follows:

 

-a License Agreement between BioSwan and CleanPath dated as of March 26, 2013, relating to the Ferris Holding Inc. (“Ferris”) proprietary stem cell enhancing products (the “CleanPath Product Agreement”); and

 

-a License Agreement between BioSwan and CleanPath dated as of July 16, 2013, relating to the Ferris trade secrets relating to Ferris’s proprietary AgronifierTM processes, materials, equipment, software, and hardware (the “CleanPath Technology Agreement”).

 

CleanPath notified the Company that it was terminating the two agreements with BioSwan. Management of the Company did not object to the termination of the two agreements.

 

15
 

Assertions Relating to CleanPath Shares

 

CleanPath has also alleged that the shares of CleanPath common stock which were acquired by the Company from BioSwan in October 2013 were improperly issued to BioSwan, and as such, should be canceled.

 

In connection with the asset purchase from CleanPath, BioSwan made certain representations and warranties to the Company about the CleanPath shares, and management of BioAdaptives has no reason to doubt the validity of those representations and warranties. As such, management of BioAdaptives disputes CleanPath’s claims relating to the invalidity of the CleanPath shares. As of the date of this Report, management was unaware of any lawsuit filed to determine the validity of the CleanPath shares.

 

Nevertheless, on May 21, 2014, the Company entered into a Stock Sale and Purchase Agreement with BioSwan, pursuant to which, BioSwan agreed to purchase the 200,000,000 of CleanPath shares (the “CleanPath Shares”). BioSwan agreed to transfer to the Company, as payment for the CleanPath Shares, a total of 1,057,362 shares of restricted stock of Hemp, Inc. (the “Hemp Shares”) owned by BioSwan. The CleanPath Shares and the Hemp Shares were valued as of the close of business on May 21, 2014. As of that date, the value of the CleanPath shares was approximately $40,000 (based on the closing market price of CleanPath), and the value of the Hemp Shares was approximately $61,538, resulting in an increase in the value of the assets held by the Company.

 

Spin-out Transaction; Cancellation of Shares

 

As discussed in the Company’s prior filings, in October 2013, the Company issued 2,000,000 shares of its common stock to BioSwan, Inc., in connection with the purchase of the assets of BioSwan. BioSwan subsequently transferred those 2,000,000 shares to Hemp, Inc., its parent entity. Hemp sought to distribute the shares to its shareholders, in connection with which the Company filed a registration statement, which went effective in January 2014. Subsequent to March 31, 2014, the distribution agent completed the distribution of shares to the Hemp shareholders. In connection with the distribution, the Company agreed to issue additional shares to avoid issuing fractional shares due to rounding issues.

 

Ferris Holding, Inc. (“FHI”), an entity owned by Barry Epling, the Chairman of the Board of the Company, was also a shareholder of Hemp, and was entitled to receive shares of Hemp common stock. In May 2014, FHI and Oxford Capital Group (“Oxford”), another Hemp stockholder, entered into agreements with the Company whereby FHI and Oxford agreed to the cancellation of the Company’s shares issuable to them as shareholders of Hemp. The Oxford shares cancelled were among the 2,000,000 issued to BioSwan in the asset purchase transaction discussed above. As such, the effect of these agreements was to reduce the number of common shares outstanding. Following the cancellation of such shares, the Company had 11,987,896 shares of common stock outstanding.

 

Issuance of New Shares to Ferris Holding

 

Subsequent to the cancellation of the shares held by FHI and Oxford, the Company’s Board of Directors determined that based on the substantial contributions that FHI has made to the Company’s initial development, it was in the best interest of the Company to issue to FHI 98,540 shares of the Company’s common stock. The shares were issued effective May 20, 2014.

 

Stock Grants

 

Effective April 10, 2014, the Company’s Board of Directors approved the issuance of an aggregate of 550,000 shares of the Company’s restricted common stock to five individuals who had been instrumental in helping establish the Company, providing services and valuable insight into strategy and plans. The shares were to be issued pursuant to restricted stock grant agreements which outlined certain provisions relating to tax treatment of the grants, restrictions on resale of the shares, and rights as a shareholder of the shares granted. As of the date of this Report, the Company had received executed agreements from all of the recipients of the shares.

 

16
 

 

Commencement of Trading


Effective as of July 8, 2014, the Company announced it had received clearance by FINRA for quotation on OTC Bulletin Board and OTC Link under the symbol BDPT.

 

 Resignation of Gerald Epling

 

On July 13, 2014, Gerald A. Epling, who had been serving as the Company’s Chief Executive Officer, Chief Financial Officer, and a member of the Company’s Board of Directors, resigned from all positions with the Company, effective immediately. Mr. Epling’s resignation was in connection with his desire to pursue other interests, and was not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices.

 

Appointment of Barry Epling

 

On July 13, 2014, following the resignation of Gerald Epling, the Company’s Board of Directors appointed Barry Epling as the Company’s Chief Executive Officer, President, and interim Chief Financial Officer. Mr. Barry Epling has been serving as the Chairman of the Board of Directors, and is also the Company’s sole director following Gerald Epling’s resignation from the Board.

 

Barry Epling is the owner of FHI, the private entity that licensed its formulation, intellectual properties, and other technologies to the Company, and has been its financial supporter to date. Barry Epling and Gerald Epling are brothers. As of the date of this Report, the Company had not entered into any employment or compensation agreement with Barry Epling.

 

Results of Operations for the three and nine months ended September 30, 2014 and for the period April 19, 2013 to September 30, 2013

 

Our operating results are summarized as follows:

  

    Three months ended 
September 30, 2014
  Three months ended 
September 30, 2013
  Nine months ended 
September 30, 2014
 

 

April 19, 2013 to September 30, 2013

 Revenue $  0 $ 0 $  0   0
Cost of sales $ 0 $ 0 $ 0   0
Operating expenses $ 22,273 $ 1,249  $  138,112   2,749
Other income (expenses) $  (206) $  0 $  (138,668)   500
Net income (loss) $  (22,479) $  (1,249) $ (278,780)    (2,249)

 

Revenues and Cost of Sales

 

On September 1, 2014, the Company entered into a License Agreement (“Agreement”) with the Ferris Holding, Inc. (“Ferris”). The Agreement gives the Company the right use of the Ferris’s proprietary processes and trade secrets, including its stem cell enhancement products. In consideration for these rights, the Company agrees to pay Ferris a fee of 5% of the gross revenue for the products produced and sold by the Company or by way of sub-license pursuant to the rights granted under this Agreement. The initial term of the Agreement is twelve (12) months. During the three months ended September 30, 2014 the Company reported prepaid expenses of $25,540 for fees paid under Agreement. Ferris is the majority shareholder of the Company.

 

On September 1, 2014, the Company entered into a Sub-License Agreement (“Sub-License”) with Essence International, Ltd. (“Essence”). The Sub-License gives Essence the right to use proprietary processes and trade secrets, including its stem cell enhancement products which were obtained by the Company in the Agreement with Ferris. In consideration for the Sub-License, Essence agreed to pay the Company a royalty of 10% of the gross revenue for the products produced and sold by Essence pursuant to the rights granted under this Sub-License. The initial term of the Agreement is twelve (12) months. During the three months ended September 30, 2014, the Company reported deferred revenue of $51,079 for fees received under this Sub-License. These fees were not recorded as revenue since delivery was not completed. Barry Epling, the Chief Executive Officer of the Company, is the Chief Executive Officer and shareholder of the Essence.

 

17
 

 

Operating Expenses

 

Our operating expenses are outlined in the table below:

 

    Three months ended 
September 30, 2014
  Three months ended 
September 30, 2013
  Nine months ended 
September 30, 2014
 

 

April 19, 2013 to September 30, 2013

General and administrative $ 3,949 $ 1,249 $ 20,321 $ 2,749
Depreciation   264   0   395   0
Stock-based compensation – services   0   0   54,000   0
Stock-based compensation – services - related party   0   0   23,825   0
Professional fees   18,060   0   39,571   0
Total $  22,273 $ 1,249 $  138,112 $ 2,749

 

Our general, administrative and professional fees are largely attributable to office, rent, transfer agent, legal, accounting and audit fees related to our reporting requirements as a public company.

 

We anticipate that we will incur approximately $50,000 for operating expenses, including, legal, accounting and audit expenses associated with our reporting requirements as a public company under the Exchange Act during the next twelve months.

 

Stock-based compensation has been paid to individuals and a company that have been instrumental in helping establish the Company, providing services and valuable insight into strategy and plans.

 

Other income (loss)

 

The Company incurred a loss of marketable securities of $0 and $138,462 on exchange of 200,000,000 shares of common stock of CleanPath Resources Corp. for 1,057,362 shares of common stock of Hemp, Inc. during the three and nine months ended September 30, 2014.

 

Net income (loss)

 

As a result of our operating expenses the Company reported a net income (loss) of ($22,479) and ($276,780) for the three and nine months ended September 30, 2014, respectively.

 

Comprehensive income (loss)

 

The Company reported an unrealized loss on marketable securities of $29,077 for the quarter ended September 30, 2014. At September 30, 2014, the quoted value of Hemp, Inc. common stock was $32,355 ($0.0306 per share) resulting in other comprehensive loss of $29,183.

 

Liquidity and Capital Resources

 

Working Capital

   September 30, 2014
Current Assets  $97,508 
Current Liabilities  $138,364 
Working Capital (Deficit)  $(40,856)

 

18
 

Cash Flows

 

    For the nine months ended
September 30, 2014
    April 19, 2013 to
September 30, 2013
 
Cash used in operating activities  $(16,113)  $(749)
Cash used in investing activities  $(1,583)  $—   
Cash provided by financing activities  $37,000   $749 
Increase (Decrease) in cash  $19,304   $—   

 

Cash Used In Operating Activities

 

Our net loss for the nine months ended September 30, 2014, was the main contributing factor for our negative operating cash flow.

 

Cash from Financing Activities

 

As of September 30, 2014, we have insufficient cash to operate our business at the current level for the next twelve months and insufficient cash to achieve our business goals. The success of our business plan beyond the next 12 months is contingent upon us obtaining additional financing. We intend to fund operations through debt and/or equity financing arrangements, which may be insufficient to fund our capital expenditures, working capital, or other cash requirements. We do not have any formal commitments or arrangements for the sales of stock or the advancement or loan of funds at this time. There can be no assurance that such additional financing will be available to us on acceptable terms, or at all.

 

Going Concern

 

At September 30, 2014, we had $37,913 of cash on-hand and a deficit of $295,061, and as noted throughout this report and our financial statements and notes thereto, our independent auditors have expressed their substantial doubt as to our ability to continue as a going concern as of September 30, 2014. We anticipate incurring significant losses in the future. We do not have an established source of revenue sufficient to cover our operating costs. Our ability to continue as a going concern is dependent upon our ability to successfully compete, operate profitably and/or raise additional capital through other means. If we are unable to reverse our losses, we will have to discontinue operations.

 

The financial statements included in this quarterly report have been prepared assuming that we will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business.

 

Management’s plans include the raising of capital through the equity markets to fund future operations, seeking additional acquisitions, and generating of revenue through our business. However, even if we do raise sufficient capital to support our operating expenses and generate adequate revenues, there can be no assurances that the revenue will be sufficient to enable us to develop business to a level where we will generate profits and positive cash flows from operations. These matters raise substantial doubt about our ability to continue as a going concern. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.

 

Off-Balance Sheet Arrangements

 

We did not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

 

19
 

 

Critical Accounting Policies

 

Our financial statements are based on the application of accounting principles generally accepted in the United States (“US GAAP”). US GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenue, and expense amounts reported.  These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition.  We believe our use of estimates and underlying accounting assumptions adhere to US GAAP and are consistently and conservatively applied.  We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances.  Actual results may differ materially from these estimates under different assumptions or conditions.  We continue to monitor significant estimates made during the preparation of our financial statements.

 

Our significant accounting policies are summarized in Note 2 of our financial statements.  While all these significant accounting policies impact our financial condition and results of operations, we view certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on our financial statements and require management to use a greater degree of judgment and estimates.  Actual results may differ from those estimates.  Our management believes that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause an effect on our results of operations, financial position or liquidity for the periods presented in this report.

 

Recently Issued Accounting Pronouncements

 

The Company has evaluated recent pronouncements through Accounting Standards Updates (“ASU”) 2014-16 and believes that none of them will have a material impact on the Company’s financial position, results of operations or cash flows. 

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

Not applicable.

 

Item 4. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

As required by Rule 13a-15 under the Securities Exchange Act of 1934, we have carried out an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this quarterly report, September 30, 2014. This evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer.

 

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our company’s reports filed under the Securities Exchange Act of 1934 is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

 

Based upon that evaluation, including our Chief Executive Officer and Chief Financial Officer, we have concluded that our disclosure controls and procedures were ineffective as of the end of the period covered by this report due to a material weakness in our internal control over financial reporting, which is described below.

 

Management’s Report on Internal Control over Financial Reporting

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934). Management has assessed the effectiveness of our internal control over financial reporting as of September 30, 2014, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. As a result of this assessment, management concluded that, as of September 30, 2014, our internal control over financial reporting was not effective. Our management identified the following material weaknesses in our internal control over financial reporting, which are indicative of many small companies with small staff: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both USGAAP and SEC guidelines.

 

20
 

 

We plan to take steps to enhance and improve the design of our internal control over financial reporting. During the period covered by this quarterly report on Form 10-Q, we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we hope to implement the following changes during our fiscal year ending December 31, 2014: (i) appoint additional qualified personnel to address inadequate segregation of duties and ineffective risk management; and (ii) adopt sufficient written policies and procedures for accounting and financial reporting. The remediation efforts set out in (i) and (ii) are largely dependent upon our securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may be adversely affected in a material manner.

 

Changes in Internal Control over Financial Reporting

 

There was no change in the Company’s internal control over financial reporting that occurred during the Company’s most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

PART II. OTHER INFORMATION

 

Item 1. Legal Proceedings

 

We know of no pending legal proceedings to which we are a party which are material or potentially material, either individually or in the aggregate. We are from time to time, during the normal course of our business operations, subject to various litigation claims and legal disputes. We do not believe that the ultimate disposition of any of these matters will have a material adverse effect on our consolidated financial position, results of operations or liquidity.

 

Item 1A. Risk Factors

 

A smaller reporting company is not required to provide the information required by this Item.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

None

 

Item 3. Defaults Upon Senior Securities

 

None.

 

Item 4. Mine Safety Disclosures

 

Not applicable.

 

Item 5. Other Information.

 

None.

 

 

 

21
 

Item 6. Exhibits

  

  (a) Exhibits

 

Exhibit Number Description
3.1 Certificate of Incorporation(1)
3.2 Bylaws(1)
4.1 Specimen Stock Certificate(1)
10.1 Ferris Product Agreement(2)
10.2 Ferris Technology Agreement(2)
   
10.3 BioSwan Asset Purchase Agreement(2)
10.4 Stock Purchase Agreement dated May 21, 2014(3)
10.5 Restricted Stock Grant Agreement (Gu) (4)
10.6 Restricted Stock Grant Agreement (Nabokova) (4)
10.7 Restricted Stock Grant Agreement (Jacobs) (4)
10.8 Restricted Stock Grant Agreement (Homsey) (4)
10.9 Restricted Stock Grant Agreement (G. Epling)(4)
10.10 License Agreement dated September 1, 2014
10.11 Rental Agreement dated June 1, 2014
10.12 Loan Agreement dated April 23, 2014
10.13 Loan Agreement dated June 4, 2014
10.14 Loan Agreement dated July 2, 2014
31.1 Certification of Chief Executive Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2 Certification of Chief Financial Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1 Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2 Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS XBRL Instance Document
101.SCH XBRL Taxonomy Extension Schema Document)
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB XBRL Taxonomy Extension Label Linkbase Document
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF XBRL Taxonomy Extension Definition Linkbase Definition 

 

  (1) Incorporated by reference to Current Report on Form 10 filed on May 3, 2013

  (2) Incorporated by reference to Current Report on Form 8-K filed October 25, 2013
  (3) Incorporated by reference to  Current Report on Form 8-K filed on May 23, 2014
  (4) Incorporated by reference to Quarterly Report on Form 10-Q filed on May 20, 2014

 

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SIGNATURES

 

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

November 14, 2014

 

BioAdaptives, Inc.

 

/s/ Barry Epling

Barry Epling

President, Chief Executive Officer, Chief Financial Officer, Chairman of the Board of Directors

(Principal Executive Officer)

 

 

 

 

 

 

 

 

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