Company Quick10K Filing
Kyto Technology & Life Science
Price-0.00 EPS-0
Shares6 P/E0
MCap-0 P/FCF0
Net Debt-0 EBIT-0
TEV-0 TEV/EBIT1
TTM 2019-09-30, in MM, except price, ratios
10-Q 2019-12-31 Filed 2020-02-03
10-Q 2019-09-30 Filed 2019-11-05
10-Q 2019-06-30 Filed 2019-07-31
10-K 2019-03-31 Filed 2019-05-16
10-Q 2018-12-31 Filed 2019-02-12
10-Q 2018-09-30 Filed 2018-10-30
10-Q 2018-06-30 Filed 2018-08-20
10-K 2018-03-31 Filed 2018-06-28
10-Q 2017-12-31 Filed 2018-02-14
10-Q 2017-09-30 Filed 2017-11-14
10-Q 2017-06-30 Filed 2017-08-14
10-K 2017-03-31 Filed 2017-06-29
10-Q 2016-12-31 Filed 2017-02-14
10-Q 2016-09-30 Filed 2016-11-14
10-Q 2016-06-30 Filed 2016-08-15
10-K 2016-03-31 Filed 2016-06-29
10-Q 2015-12-31 Filed 2016-02-16
10-Q 2015-09-30 Filed 2015-11-16
10-Q 2015-06-30 Filed 2015-08-14
10-K 2015-03-31 Filed 2015-06-30
10-Q 2014-12-31 Filed 2015-02-17
10-Q 2014-09-30 Filed 2014-11-14
10-Q 2014-06-30 Filed 2014-08-14
10-K 2014-03-31 Filed 2014-06-30
10-Q 2013-12-31 Filed 2014-02-14
10-Q 2013-09-30 Filed 2013-11-14
10-Q 2013-06-30 Filed 2013-08-14
10-K 2013-03-31 Filed 2013-06-28
10-Q 2012-12-31 Filed 2013-02-14
10-Q 2012-09-30 Filed 2012-11-14
10-Q 2012-06-30 Filed 2012-08-14
10-K 2012-03-31 Filed 2012-06-29
10-Q 2011-12-31 Filed 2012-02-14
10-Q 2011-09-30 Filed 2011-11-14
10-Q 2011-06-30 Filed 2011-08-15
10-K 2011-03-31 Filed 2011-06-29
10-Q 2010-12-31 Filed 2011-02-14
10-Q 2010-09-30 Filed 2010-11-15
10-Q 2010-06-30 Filed 2010-08-23
10-K 2010-03-31 Filed 2010-06-30
10-Q 2009-12-31 Filed 2010-02-12
8-K 2019-07-17
8-K 2019-07-02
8-K 2018-04-25

KBPH 10Q Quarterly Report

Item 1. Financial Statements
Part I - Financial Information
Note 1 - Description of Business
Note 2 - Basis of Presentation and Significant Accounting Policies
Note 3 - Investments
Note 4 - Accounting Standards Updates
Note 5 - Related Party Transactions
Note 6 - Equity
Note 7 - Subsequent Events
Item 2. Management's Discussion and Analysis of Financial Conditions and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II. Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-31.1 f10q123119_ex31z1.htm
EX-31.2 f10q123119_ex31z2.htm
EX-32.1 f10q123119_ex32z1.htm
EX-32.2 f10q123119_ex32z2.htm

Kyto Technology & Life Science Earnings 2019-12-31

Balance SheetIncome StatementCash Flow
2.62.11.61.00.50.02016201720182020
Assets, Equity
0.10.0-0.0-0.1-0.1-0.22018201820192020
Rev, G Profit, Net Income
0.70.50.2-0.0-0.3-0.52016201720182020
Ops, Inv, Fin

10-Q 1 f10q123119_10q.htm FORM 10-Q QUARTERLY REPORT Form 10-Q Quarterly Report

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended December 31, 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

(State or Other Jurisdiction

 

(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 every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 (or for such shorter period that the registrant was required to submit 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]

Emerging Growth Company

[X]

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [   ]

 

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 January 30, 2020

 


1


 

 

KYTO Technology and Life Science, Inc.

For the quarterly period ended December 31, 2019

 

INDEX

 

 

PART I. FINANCIAL INFORMATION

 

Item 1.

Financial Statements

3

 

 

 

 

Condensed Balance Sheets as of December 31, 2019 (Unaudited) and March 31, 2019

3

 

 

 

 

Unaudited Condensed Statements of Operations for the Three Months and Nine Months Ended

December 31, 2019 and 2018

4

 

 

 

 

Unaudited Condensed Statements of Stockholders’ Equity (Deficit) for the Three Months and Nine Months

Ended December 31, 2019 and 2018

5

 

 

 

 

Unaudited Condensed Statements of Cash Flows for the Nine Months Ended December 31, 2019 and 2018

7

 

 

 

 

Notes to Unaudited Condensed Financial Statements

8

 

 

 

Item 2.

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

14

Item 3.

Quantitative and Qualitative Disclosures About Market Risk.

16

Item 4.

Controls and Procedures.

16

 

 

 

 

PART II. OTHER INFORMATION

 

Item 1.

Legal Proceedings.

17

Item 1A.

Risk Factors.

17

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

17

Item 3.

Defaults Upon Senior Securities.

17

Item 4.

Mine Safety Disclosures

17

Item 5.

Other Information

17

Item 6.

Exhibits

18

 

Signatures

19


2


 

 

ITEM 1. FINANCIAL STATEMENTS 

 

PART I - FINANCIAL INFORMATION

 

Kyto Technology and Life Science, Inc.

Condensed  Balance Sheets

 

 

 

December 31,

 

March 31,

 

 

2019

 

2019

 

 

Unaudited

 

 

ASSETS

 

 

 

 

Current Assets

 

 

 

 

Cash

$

418,698

$

93,634

Receivables

 

6,000

 

1,000

Deferred fundraising expenses

 

256,174

 

-

Total Current Assets

 

680,872

 

94,634

 

 

 

 

 

Investments

 

2,240,499

 

1,498,048

 

 

 

 

 

Total Assets

$

2,921,371

$

1,592,682

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

Current Liabilities

 

 

 

 

Accounts payable & accrued liabilities

$

60,247

$

21,700

Accrued liabilities & loans - related parties

 

8,425

 

7,250

Total Current Liabilities

 

68,672

 

28,950

 

 

 

 

 

Commitments and Contingencies

 

-

 

-

 

 

 

 

 

Stockholders’ Equity

 

 

 

 

Preferred stock authorized but not designated, $.01 par value,19,800,000 shares, none issued and outstanding as of December 31, 2019 and March 31, 2019

 

-

 

-

Series A preferred convertible stock, $.01 par value, 4,200,000 shares authorized,

4,200,000 and 2,612,500 issued and outstanding as of December 31, 2019 and March 31, 2019, respectively

 

42,000

 

26,125

Series B preferred convertible stock, $0.01 par value, 6,000,000 shares authorized,

531,250 issued and outstanding as of December 31, 2019 and 0 at March 31, 2019, respectively

 

5,313

 

-

Common stock, $0.01 par value, 40,000,000 shares authorized,

5,836,832 issued and outstanding as of December 31, 2019 and March 31 2019

 

58,368

 

58,368

Additional paid-in capital

 

35,770,173

 

34,090,092

Accumulated deficit

 

(33,023,155)

 

(32,610,853)

 

 

 

 

 

Total Stockholders’ Equity

 

2,852,699

 

1,563,732

 

 

 

 

 

Total Liabilities and Stockholders’ Equity

$

2,921,371

$

1,592,682

 

 

 

 

 

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


3


 

 

Kyto Technology and Life Science, Inc.

Unaudited Condensed Statements of Operations

 

 

 

For the

Three Months Ended

December 31,

 

For the

Nine Months Ended

December 31,

 

 

2019

 

2018

 

2019

 

2018

Revenue from sale of services

$

9,000

$

5,000

$

17,950

$

5,000

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

General and administrative

 

99,305

 

62,923

 

369,206

 

161,121

Write-down of investments to market value

 

-

 

-

 

61,046

 

-

Total Operating Expenses

 

99,305

 

62,923

 

430,252

 

161,121

 

 

 

 

 

 

 

 

 

Loss from Operations

 

(90,305)

 

(57,923)

 

(412,302)

 

(156,121)

 

 

 

 

 

 

 

 

 

Interest expense, net

 

-

 

-

 

-

 

(25)

 

 

 

 

 

 

 

 

 

Net Loss before taxes

 

(90,305)

 

(57,923)

 

(412,302)

 

(156,146)

 

 

 

 

 

 

 

 

 

Net income (tax) benefit

 

-

 

-

 

-

 

-

 

 

 

 

 

 

 

 

 

Net Loss

$

(90,305)

$

(57,923)

$

(412,302)

$

(156,146)

 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding

 

 

 

 

 

 

 

 

basic and diluted

 

5,836,832

 

5,027,703

 

5,836,832

 

4,650,112

 

 

 

 

 

 

 

 

 

Net loss per share - basic and diluted

$

(0.02)

$

(0.01)

$

(0.07)

$

(0.03)

 

 

 

 

 

 

 

 

 

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


4


 

 

Kyto Technology and Life Science, Inc.

Unaudited Condensed Statements of Stockholders’ Equity for

Three and Nine months Ended December 31, 2019

 

 

Preferred A

 

Preferred B

 

 

 

Common

 

Additional

 

 

 

 

 

Preferred A

 

Stock

 

Preferred B

 

Stock

 

Common

 

Stock

 

Paid-in

 

Accumulated

 

 

 

Stock #

 

Amount

 

Stock #

 

Amount

 

Stock #

 

Amount

 

Capital

 

Deficit

 

Total

Balance,  September 30, 2019

4,200,000

$

42,000

 

-

$

-

 

5,836,832

$

58,368

$

35,344,318

$

(32,932,850)

$

2,511,836

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) for the three months ended December 31, 2019

-

 

-

 

-

 

-

 

-

 

-

 

-

 

(90,305)

$

(90,305)

 

Sale of Series B preferred stock at $0.80 per share

-

 

-

 

531,250

 

5,313

 

-

 

-

 

419,687

 

-

 

425,000

 

Compensation expense on stock options

-

 

-

 

-

 

-

 

-

 

-

 

6,168

 

-

 

6,168

 

Balance,  December 31, 2019

4,200,000

$

42,000

 

531,250

$

5,313

 

5,836,832

$

58,368

$

35,770,173

$

(33,023,155)

$

2,852,699

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred A

 

Preferred B

 

 

 

Common

 

Additional

 

 

 

 

 

Preferred A

 

Stock

 

Preferred B

 

Stock

 

Common

 

Stock

 

Paid-in

 

Accumulated

 

 

 

Stock #

 

Amount

 

Stock #

 

Amount

 

Stock #

 

Amount

 

Capital

 

Deficit

 

Total

Balance, March 31, 2019

2,612,500

$

26,125

 

-

$

-

 

5,836,832

$

58,368

$

34,090,092

$

(32,610,853)

$

1,563,732

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) for the nine months ended December 31, 2019

-

 

-

 

-

 

-

 

-

 

-

 

-

 

(412,302)

 

(412,302)

 

Sale of Series A preferred stock at $0.80 per share

1,587,500

 

15,875

 

-

 

-

 

-

 

-

 

1,254,125

 

-

 

1,270,000

 

Sale of Series B preferred stock at $0.80 per share

-

 

-

 

531,250

 

5,313

 

-

 

-

 

419,687

 

-

 

425,000

 

Compensation expense on stock options

-

 

-

 

-

 

-

 

-

 

-

 

6,269

 

-

 

6,269

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance,  December 31, 2019

4,200,000

$

42,000

 

531,250

$

5,313

 

5,836,832

$

58,368

$

35,770,173

$

(33,023,155)

$

2,852,699

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


5


 

 

Kyto Technology and Life Science, Inc.

Unaudited Condensed Statements of Stockholders’ Equity for

Three and Nine months Ended December 31, 2018

(continued)

 

 

Preferred A

 

Preferred B

 

 

 

Common

 

Additional

 

 

 

 

 

Preferred A

 

Stock

 

Preferred B

 

Stock

 

Common

 

Stock

 

Paid-in

 

Accumulated

 

 

 

Stock #

 

Amount

 

Stock #

 

Amount

 

Stock #

 

Amount

 

Capital

 

Deficit

 

Total

Balance, September 30, 2018

1,337,500

$

13,375

 

-

$

-

 

5,027,703

$

50,277

$

33,085,374

$

(32,478,969)

$

670,057

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) for the three months ended December 31, 2018

-

 

-

 

-

 

-

 

-

 

-

 

-

 

(57,923)

 

(57,923)

 

Sale of Series A preferred stock at $0.80 per share

531,250

 

5,313

 

-

 

-

 

-

 

-

 

419,687

 

-

 

425,000

 

Compensation expense on stock options

-

 

-

 

-

 

-

 

-

 

-

 

356

 

-

 

356

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance,  December 31, 2018

1,868,750

$

18,688

 

-

$

-

 

5,027,703

$

50,277

$

33,505,417

$

(32,536,892)

$

1,037,490

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred A

 

Preferred B

 

 

 

Common

 

Additional

 

 

 

 

 

Preferred A

 

Stock

 

Preferred B

 

Stock

 

Common

 

Stock

 

Paid-in

 

Accumulated

 

 

 

Stock #

 

Amount

 

Stock #

 

Amount

 

Stock #

 

Amount

 

Capital

 

Deficit

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, March 31, 2018

-

$

-

 

-

$

-

 

3,139,747

$

31,397

$

32,032,393

$

(32,380,746)

$

(316,956)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) for the nine months ended December 31, 2018

-

 

-

 

-

 

-

 

-

 

-

 

-

 

(156,146)

 

(156,146)

 

Sale of Series A preferred stock at $0.80 per share

1,468,750

 

14,688

 

-

 

-

 

-

 

-

 

1,160,312

 

-

 

1,175,000

 

Preferred stock issued for conversion of related party debt

400,000

 

4,000

 

-

 

-

 

-

 

-

 

316,000

 

-

 

320,000

 

Exercise of options for $.006 per share

-

 

-

 

-

 

-

 

1,887,956

 

18,880

 

(7,552)

 

-

 

11,328

 

Compensation expense on stock options

-

 

-

 

-

 

-

 

-

 

-

 

4,264

 

-

 

4,264

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance,  December 31, 2018

1,868,750

$

18,688

 

-

$

-

 

5,027,703

$

50,277

$

33,505,417

$

(32,536,892)

$

1,037,490


6


 

 

Kyto Technology and Life Science, Inc.

Unaudited Condensed Statements of Cash Flows

 

 

 

For the nine

months ended

December 31,

2019

 

For the nine

months ended

December 31,

2018

CASH FLOW FROM OPERATING ACTIVITIES

 

 

 

 

Net loss

$

(412,302)

$

(156,146)

Adjustments to reconcile net loss to net cash used in operating activities

 

 

 

 

Loss on conversion of related party debt

 

-

 

5,099

Write down of investment

 

61,046

 

-

Option compensation expense

 

6,269

 

4,264

 

 

 

 

 

Changes in operating assets and liabilities

 

 

 

 

Prepaid & other current assets

 

-

 

7,500

Accounts receivable

 

(5,000)

 

(1,000)

Deferred fundraising expenses

 

(256,174)

 

-

Accounts payable and accrued liabilities

 

38,547

 

(5,260)

Total cash (used in) operating activities

 

(567,614)

 

(145,543)

 

 

 

 

 

CASH FLOW FROM INVESTING ACTIVITIES

 

 

 

 

Purchase of equity investments

 

(803,497)

 

(1,037,000)

Total cash (used in) investing activities

 

(803,497)

 

(1,037,000)

 

 

 

 

 

CASH FLOW FROM FINANCING ACTIVITIES

 

 

 

 

Proceeds from sales of Series A preferred stock

 

1,270,000

 

1,175,000

Proceeds from sales of Series B preferred stock

 

425,000

 

-

Proceeds from exercise of options for common stock

 

-

 

11,328

Advances from related party

 

1,175

 

10,745

Total cash provided by financing activities

 

1,696,175

 

1,197,073

 

 

 

 

 

Net increase in cash

 

325,064

 

14,530

 

 

 

 

 

Cash at beginning of period

 

93,634

 

4

Cash at end of period

$

418,698

$

14,534

 

 

 

 

 

Supplemental Cash Flow Information:

 

 

 

 

Interest Paid

$

-

$

25

Taxes Paid

$

800

$

-

 

 

 

 

 

Non Cash Financing and Investing Activities

 

 

 

 

Preferred shares issued for conversion of related party debt

$

-

$

320,000

 

 

 

 

 

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


7


 

 

KYTO TECHNOLOGY AND LIFE SCIENCE INC.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

December 31, 2019

 

NOTE 1 – DESCRIPTION OF BUSINESS

 

Kyto Technology and Life Science, Inc. (the “Company”) was formed as a Florida corporation on March 5, 1999 under the name of B Twelve 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 completed due diligence and committed to invest, and does not typically 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 approximately $419,000 in the bank and is now actively marketing the first $3 million tranche of a Series B round with a target close date of June 2020. The average monthly G&A expenses for the quarter ended December 31, 2019 were approximately $33,000 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

 

The accompanying unaudited condensed financial statements of 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 December 31, 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.


8


 

 

KYTO TECHNOLOGY AND LIFE SCIENCE INC.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

December 31, 2019

 

NOTE 2 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

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 December 31, 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 December 31, 2019, the Company deposits exceeded federally insured limits by approximately $169,000. The Company has not experienced any losses in such accounts through December 31, 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.

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. The Company recognized impairment of one of its investments which was written down by $61,046 in September, 2019. The Company has not experienced any impairment write-downs in any prior or subsequent periods.


9


 

 

KYTO TECHNOLOGY AND LIFE SCIENCE INC.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

December 31, 2019

 

NOTE 2 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

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. At December 31, 2019, the Company has deferred $256,174 of such expenses.

 

Fundraising is typically from individuals and takes place one-by-one over a period of time which makes it difficult to predict when or if we will close the full target amount, while fundraising expenses like legal and registration were weighted heavily to the front end of the process. Because of the resulting uncertainty as to likely aggregate fundraising expenses and percentage of investment that they will represent, the Company intends to continue to defer fundraising expenses and write them off against Series B proceeds at such time as the Board considers the Series B round fully sold, or closed. Such expenses will be identified and reported as reductions in additional paid-in capital in the post-closing Statement of Stockholders Equity.

 

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. In September 2019, the Company recognized impairment of one of its investments which was written down by $61,046. During the three months ended December 31, 2019, the Company made an aggregate investment of $130,000 in two 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 December 31, 2019 and there were no adjustments made for impairment, other than as stated above.

 


10


 

 

KYTO TECHNOLOGY AND LIFE SCIENCE INC.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

December 31, 2019

 

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

 

At December 31, 2019 and March 31, 2019, the Company had accrued and owed $3,425 and $2,250, respectively, to its Chief Executive officer for car and telephone allowance. At December 31, 2019 and March 31, 2019, the Company had accrued and owed $5,000 and $5,000, respectively to officers of the Company for consulting fees and expenses.

The Company now operates virtually and from the offices of its directors and officers, and from public locations, and does not currently lease any office space.

 

NOTE 6– EQUITY

 

(A)SERIES A PREFERRED STOCK 

 

As of December 31, 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 4,200,000 and 2,612,500 shares of Series A issued and outstanding at December 31, 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 at a one-for-one ratio 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.

 

Between April 2018 and September 2019, in a series of non-brokered private placements, the Company offered accredited investors an opportunity to purchase a minimum up to 4.2 million investment units (“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.

 

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 3.8 million Units to accredited investors in private placements for $3,040,000 in cash.

 

(B)SERIES B PREFERRED STOCK 

 

On July 8, 2019, in readiness for the intended Series B fund raising round, the Company 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 of which 4.2 million are designated Series A, 6.0 million designated Series B and 19.8 million are undesignated, and (iii) amended the par value of all classes of shares to $0.01 per share. The impact of these changes has been reflected in both current and prior year financial statements and the related notes to these financial statements.

 

During the three months ended December 31, 2019, the Company sold 531,250 Series B Preferred shares in a private placement to accredited investors for an aggregate of $425,000. Up to 3 million shares of Series B preferred are offered at $.80 per share and provide a liquidation preference of one times the purchase price plus accrued and unpaid dividends, if any. The shares can be converted into common shares on a one for one basis upon closing of a Financing of at least $10 million, a formal listing on NASDAQ, or at shareholders option. The shares include an anti-dilution provision in the event that the Company issues similar shares at a lower price.


11


 

 

KYTO TECHNOLOGY AND LIFE SCIENCE INC.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

December 31, 2019

 

NOTE 6– EQUITY (CONTINUED)

 

(C)COMMON STOCK 

 

The Company has authorized 40,000,000 shares of common stock at a par value of $0.01 per share. As of December 31, 2019, and March 31, 2019 a total of 5,836,832 shares of the Company’s common stock were issued and outstanding.

 

(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 year ended March 31, 2018, the Company granted a total of 2,697,085 options at an exercise price of $0.006 per share. Subsequently through March 31, 2019 all options were vested and exercised.

 

In July 2019, the majority of the shareholders of the Company approved the introduction of the Kyto Technology and Life Science 2019 Stock Option and Incentive Plan (“Plan”), and reserved 2 million shares for issuance to directors, officers, consultants and advisors, subject to the approval of the Board.

 

In the three months ended December 31, 2019, the Company issued 1,100,000 options to management of the Company.

 

 

Number of

Options

granted

 

Weighted

average

exercise

price

Weighted

average

remaining

life

years

Outstanding March 31, 2018

-

 

-

-

Granted

2,697,085

$

0.006

1.00

Exercised

(2,697,085)

$

0.006

-

Cancelled

-

 

-

-

Outstanding March 31, 2019

-

$

-

-

Granted

1,100,000

$

0.033

2.32

Exercised

-

 

-

-

Cancelled

-

 

-

-

Outstanding December 31, 2019

1,100,000

$

0.033

2.32

 

 

 

 

 

Exercisable March 31, 2019

-

$

-

-

Exercisable December 31, 2019

495,206

$

0.03

1.40

 

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.

 

Stock Price at grant date

$

0.033

Exercise Price

$

0.033

Term in Years

$

2.32

Volatility assumed

 

71%

Annual dividend rate

 

0.0%

Risk free discount rate

 

2.00%

 

The compensation expense for the options granted is calculated at the time of grant and is amortised over the respective vesting periods of from 12 to 48 months. During the three months ended December 31, 2019 and 2018, the Company amortised $6,168 and $357, respectively, as option expense and during the nine months ended December 31, 2019 and 2018, the Company amortised $6,269 and $4,264, respectively.


12


 

 

KYTO TECHNOLOGY AND LIFE SCIENCE INC.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

December 31, 2019

 

NOTE 6– EQUITY (CONTINUED)

 

(E)WARRANTS  

 

In conjunction with the sale of stock Units, the Company issued 4,200,000 warrants to purchase common stock at a price of $1.20 per share for a period of three years. At December 31, 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 December 31, 2019 was 2.2 years.

 

 

Number of

warrants

 

Weighted

average

exercise

price

Outstanding March 31, 2018

-

$

-

Granted

2,612,500

$

1.20

Exercised

-

$

0.00

Cancelled

-

$

0.00

Outstanding March 31, 2019

2,612,500

$

1.20

Granted

1,587,500

$

1.20

Exercised

-

$

0.00

Cancelled

-

$

0.00

Outstanding December 31, 2019

4,200,000

$

1.20

 

 

 

 

Exercisable December 31, 2019

4,200,000

 

 

 

NOTE 7 - SUBSEQUENT EVENTS

 

None.


13


 

 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS  

 

PLAN OF OPERATIONS

 

Kyto Technology and Life Science, Inc. was formed as a Florida corporation on March 5, 1999 under the name of B Twelve 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. On October 17, 2019, the Company filed for and received a Certificate of Qualification to do Business in California.

 

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 typically 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 approximately $419,000 in the bank and is now actively marketing the first $3 million tranche of a Series B round with a target close date of June 2020. The average monthly G&A expenses for the quarter ended December 31, 2019 were approximately $33,000 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.

 

Results of Operations for the Three Months ended December 31, 2019

 

Revenue: In the three months ended December 31, 2019, the Company billed $9,000 for management advisory services provided to its investment portfolio companies compared to $5,000 in the three months ended December 31, 2018.

 

General and Administration Expenses: In the three months ended December 31, 2019 and December 31, 2018, general and administration expenses amounted to $99,305 and $62,923, respectively, including professional fees incurred in the course of SEC filing and compliance, investor relations, travel and executive bonus.

 

The Company deferred $31,578 in expenditures incurred in the three months ended December 31, 2019 that related specifically to the cost of the Series B fundraising including legal and accounting fees, investor relations, and investor meetings.

 

For the three months ended December 31, 2019 and 2018, the Company’s net loss was $90,305 and $57,923, respectively.

 

Results of Operations for the Nine Months ended December 31, 2019

 

Revenue: In the nine months ended December 31, 2019 and December 31, 2018 the Company billed $17,950 and $ 5,000, respectively for management advisory services provided to its investment portfolio companies.

 

General and Administration Expenses: In the nine months ended December 31, 2019 and December 31, 2018, general and administration expenses amounted to $369,206 and $161,121, respectively, including professional fees incurred in the course of SEC filing and compliance, and travel and conference fees, and investor relations. General and Administration Expenses for the nine months ended December 31, 2019 included an executive bonus of $182,000.


14


 

 

The Company wrote off an amount of $61,046 in respect of a write-off of an impaired investment during the nine months ended December 31, 2019.

 

The Company deferred $256,174 in expenditures incurred in the nine months ended December 31, 2019 that related specifically to the cost of the Series B fundraising including legal and accounting fees, investor relations, and investor meetings.

 

Liquidity and Capital Resources

 

The Company had working capital of $612,200 and $65,684 at December 31, 2019 and March 31, 2019, respectively. Cash was $418,698 and $93,634 as at December 31, 2019 and March 31, 2019, respectively.

 

Cash from operating activities

 

The Company used net cash of $567,614 in operations during the nine months ended December 31, 2019 which included $256,156 from operating losses, and $256,174 deferred fundraising expenses, offset by non-cash write off expenses of $61,046, and changes in net assets and liabilities. For the nine months ended December 31, 2018 the Company used net cash of $145,543 of which $156,146 was due to operating losses.

 

Cash from investing activities

 

The Company used net cash of $803,497 in investing activities in the nine months ended December 31, 2019 compared to $1,037,000 used in the nine months ended December 31, 2018. In the nine months ended December 3018 the Company invested in 13 candidates while in the nine months ended December 31, 2019 they invested in 14 candidates. The pace of investment is opportunistic based on the availability of cash, the flow of deal opportunities, the timing and resources available for due diligence, and the quality of the investment potential. The circumstances surrounding every deal are unique and, accordingly, the Company does not expect to achieve any specific quota of deals or investment dollars in any period.

 

Cash from financing activities

 

The Company had a net cash inflow from financing activities of $1,696,175 in the nine months ended December 31, 2019 compared to $1,197,073 in the nine months ended December 31, 2018. This inflow included $1,270,000 proceeds from the sale of Series A preferred stock in the nine months ended December 31, 2019 compared to $1,175,000 in the corresponding prior period. In the nine months ended December 31, 2019, the Company launched its new Series B preferred stock offering and raised a total of $425,000. Additionally, the Company raised $0 from the exercise of stock options in the nine months ended December 31, 2019 compared to $11,328 in the nine months ended December 31, 2018. The Company also generated $1,175 of advances from related parties in the nine months ended December 31, 2019, and $10,745 in the nine months ended December 31, 2018.

 

The Company’s plan of operations for the next twelve months is to continue to focus its efforts on finding new sources of capital by means of private placements and to use this funding to fund additional investments as they become available, and to cover operating expenses.

 

Critical Accounting Policies

 

Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. A complete summary of these policies is included in the notes to our financial statements. In general, management’s estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.


15


 

 

Significant Accounting Policies

 

Our discussion and analysis of our results of operations and liquidity and capital resources are based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates and judgments, including those related to basis of presentation, use of estimates, cash and cash equivalents, revenue recognition, income taxes, fair value of financial instruments, fair value measurements, basic and diluted loss per share, and investments (see Note 2 to the Company’s financial statements). We base our estimates on historical and anticipated results and trends and on various other assumptions that we believe are reasonable under the circumstances, including assumptions as to future events. These estimates form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

 

By their nature, estimates are subject to an inherent degree of uncertainty. Actual results that differ from our estimates could have a significant adverse effect on our operating results and financial position. We believe that the significant accounting policies and assumptions as detailed in Note 2 to the financial statements contained herein may involve a higher degree of judgment and complexity than others.

 

Off–balance sheet arrangements

 

As of December 31, 2019, we had no obligations, assets or liabilities which would be considered off–balance sheet arrangements. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off–balance sheet arrangements.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  

 

Not required for smaller reporting company.

 

ITEM 4. CONTROLS AND PROCEDURES  

 

Evaluation of Disclosure Controls and Procedures

 

We maintain disclosure controls and procedures that are designed to ensure that material information required to be disclosed in our periodic reports filed under the Securities Exchange Act of 1934, as amended, or 1934 Act, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and to ensure that such information is accumulated and communicated to our management, including our chief executive officer/chief financial officer (principal financial officer) as appropriate, to allow timely decisions regarding required disclosure. During the quarter ended December 31, 2019 we carried out an evaluation, under the supervision and with the participation of our management, including the principal executive officer and the principal financial officer (principal financial officer), of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rule 13(a)-15(e) under the 1934 Act. Based on this evaluation, because of the Company’s limited resources and limited number of employees, management concluded that our disclosure controls and procedures were ineffective as of December 31, 2019. Notwithstanding this conclusion, we believe that our unaudited condensed financial statements contained in this Quarterly Report fairly present our financial position, results of operations and cash flows for the periods covered thereby in all material respects.

 

Limitations on Effectiveness of Controls and Procedures

 

Our management, including our Chief Executive Officer and Chief Financial Officer (principal financial officer), does not expect that our disclosure controls and procedures or our internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include, but are not limited to, the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.


16


 

 

Internal Controls over Financial Reporting

 

During the quarter ended December 31, 2019, there have been no changes in our internal control over financial reporting that have materially affected or are reasonably likely to materially affect our internal controls over financial reporting.

 

PART II. OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS  

 

None

 

ITEM 1A. RISK FACTORS.  

 

Not required for smaller reporting company.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.  

 

The Corporation has sold 4,200,000 Series A Preferred Units to accredited investors under Rule 506 of Regulation D of the Securities Act 1933. Each Unit consists of (i) 1 of the Corporation’s Class A Preferred Shares convertible into 1 of the Corporation’s Common Shares and (ii) 1 Warrant exercisable into 1 of the Corporation’s Common Shares at an exercise price of $1.20 per Share for a period of three (3) years from issuance. The Corporation has submitted a Form D filing to the United States Securities and Exchange Commission for this Offering. The Company will use the net proceeds for investment purposes and operating expenses.

 

The Corporation has sold 531,250 shares of Series B Preferred stock to accredited investors under Rule 506 of Regulation D of the Securities Act 1933. The Corporation has submitted a Form D filing to the United States Securities and Exchange Commission for this Offering. The Company will use the net proceeds for investment purposes and operating expenses.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES  

 

None

 

ITEM 4. MINE SAFETY DISCLOSURES  

 

None

 

ITEM 5. OTHER INFORMATION  

 

None

 

ITEM 6. EXHIBITS  

 

Index to Exhibits on page 17

 


17


 

 

INDEX TO EXHIBITS

 

EXHIBIT

NUMBER

 

DESCRIPTION

3(i)(a)

 

Articles of Incorporation of Kyto Technology and Life Science, Inc.*

3(i)(b)

 

Articles of Amendment changing name to Kyto Technology and Life Science, Inc.*

3(ii)

 

Bylaws of Kyto Technology and Life Science, Inc.*

 

 

 

10.1

 

Research collaboration agreement between The Research Foundation of State University of New York and B. Twelve Ltd. (Kyto Technology and Life Science, Inc.) [dated August 19, 1999]**

 

 

 

10.2

 

Collaborative Research Agreement to synthesize new vitamin B12 analogs signed between the Company and New York University [dated November 11, 1999]**

 

 

 

10.3

 

Extension/Modification Research Collaboration Agreement between the Research Foundation of State University of New York and B Twelve, Inc., (Kyto Technology and Life Science, Inc.) Modification No. 1 [dated November 01, 2000]**

 

 

 

10.4

 

Debt Settlement Agreement and Put Option (dated November 2002) between Kyto Technology and Life Science, Inc. and New York University.**

 

 

 

10.5

 

Extension/Modification Research Collaboration Agreement between the Research Foundation of State University of New York and Kyto Technology and Life Science, Inc., Modification No. 2 [dated December 2004]. **

 

 

 

10.6

 

Services Agreement between Kyto Technology and Life Science, Inc. and Gerard Serfati [dated November 1, 2004]***

 

 

 

31.1

 

Section 302 Certification of principal executive officer.**

31.2

 

Section 302 Certification of principal financial and accounting officer.**

32.1

 

Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 **

32.2

 

Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 **

 

 

 

 

 

Kyto Technology and Life Science Inc 2019 Stock Option Incentive Plan

 

 

 

 

 

Plan of Conversion from Florida to Delaware Corporation

 

 

 

 

*

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.

***

Previously filed with Form S-8 on November 18, 2004.


18


 

 

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: February 3, 2020

 

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: February 3, 2020


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