UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 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 January 31, 2016

 

OR

 

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from                               to                            

 

Commission file number: 000-50394  

 

Biotech Products Services and Research, Inc.

(Exact Name of Registrant as Specified in Its Charter)

  

Nevada

47-4180540

(State or Other Jurisdiction of Incorporation or Organization)

 

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

 

 

 

515 North Shore Drive, Miami Beach FL

 33141

(Address of Principal Executive Offices)

(Zip Code)

 

11077 Biscayne Blvd., Suite 100 Miami FL 33161

(Former name, former address and former fiscal year, if changed since last report)

 

Registrant's Telephone Number, Including Area Code: ( 888) 963-7881

 

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 o No x

 

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 during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files.) Yes o No x

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer or a smaller reporting company. See the definitions of "accelerated filer" and "large accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

                                                                                                                                                               

Large Accelerated Filer

¨

Non-Accelerated Filer 

¨

Accelerated Filer

¨

Smaller Reporting Company

x

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

 

There were 101,832,484 shares of common stock, $0.001 par value, of the issuer issued and outstanding as of August 8, 2016.

 

 

 
 
 

BIOTECH PRODUCTS SERVICES AND RESEARCH, INC.

 

TABLE OF CONTENTS

 

PART I - FINANCIAL INFORMATION

 

ITEM

PAGE NO.

1.

Financial Statements

4

Consolidated Balance Sheets as of October 31, 2015 and January 31, 2016 (unaudited)

4

Unaudited Consolidated Statements of Operations for the three months ended January 31, 2015 and 2016

5

 

Unaudited Consolidated Statements of Cash Flows for the three months ended January 31, 2015 and 2016

6

Notes to Consolidated Financial Statements (unaudited)

7

2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

15

 

3.

Quantitative and Qualitative Disclosures About Market Risk

20

4.

Controls and Procedures

20

PART II - OTHER INFORMATION

1.

Legal Proceedings

21

1A.

Risk Factors

21

2.

Unregistered Sales of Equity Securities and Use of Proceeds

21

3.

Defaults Upon Senior Securities

22

4.

Mine Safety Disclosures

22

5.

Other Information

22

6.

Exhibits

23

Signatures

24

 

 
2
 

 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

The statements contained in this Quarterly Report of Biotech Products Services and Research Inc. (the "Company"), that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 ("Exchange Act"). These forward-looking statements are identified as any statement that does not relate strictly to historical or current facts. Statements using words such as "may," "could," "should," "expect," "plan," "project," "strategy," "forecast," "intend," "anticipate," "believe," "estimate," "predict," "potential," "pursue," "target," "continue," or similar expressions help identify forward-looking statements.

 

The forward-looking statements contained in this Quarterly Report are largely based on our expectations, which reflect estimates and assumptions made by our management. These estimates and assumptions reflect our best judgment based on currently known market conditions and other factors. Although we believe such estimates and assumptions to be reasonable, they are inherently uncertain and involve a number of risks and uncertainties that are beyond our control. In addition, management's assumptions about future events may prove to be inaccurate. Management cautions all readers that the forward-looking statements contained in this Quarterly Report are not guarantees of future performance, and management cannot assure any reader that such statements will be realized or the forward-looking events and circumstances will in fact occur. The Company's actual results may differ materially from those anticipated, estimated, projected or expected by management. When considering forward-looking statements, please read " Item 1A. Risk Factors " and " Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations " included in the Company's Annual Report on Form 10-K for the year ended October 31, 2015, which is incorporated by reference.

 

AVAILABLE INFORMATION

 

The Company is a reporting company pursuant to Section 12(g) of the Exchange Act. As a result, it files Quarterly Reports on Form 10-Q, Annual Reports on Form 10-K and Current Reports on Form 8-K, and amendments to these reports, with the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act. These reports are also available on the SEC's website at www.SEC.gov. In addition, the Company will provide copies of these reports free of charge upon request addressed to Albert Mitrani, Biotech Products Services and Research Inc., 515 North Shore Drive, Miami Beach FL 33141.

 

The public may also read a copy of any materials filed by the Company with the SEC at the SEC's Public Reference Room at 100 F Street, NE, Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.

 

All forward-looking statements speak only as of the date of this Quarterly Report. We do not intend to publicly update or revise any forward-looking statements as a result of new information, future events or otherwise.

 

 
3
 

 

PART I - FINANCIAL INFORMATION  

Item 1.

 

Biotech Products Services and Research, Inc.

(formerly Bespoke Tricycles Inc.)

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

 

 

October 31,

 

 

January 31,

 

 

2015

 

 

2016

 

ASSETS

Current Assets

 

 

 

 

 

 

Cash

 

$ 99,295

 

 

$ 10,151

 

Accounts receivable

 

 

19,878

 

 

 

-

 

Inventories

 

 

1,608

 

 

 

12,000

 

Prepaid expenses

 

 

5,413

 

 

 

4,046

 

Total Current Assets

 

 

126,194

 

 

 

26,197

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

7,818

 

 

 

1,552

 

Security deposits

 

 

18,585

 

 

 

-

 

TOTAL ASSETS

 

$ 152,597

 

 

$ 27,749

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

 

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$ 105,324

 

 

$ 208,593

 

Accounts payable - related party

 

 

9,354

 

 

 

9,354

 

Notes payable

 

 

-

 

 

 

65,000

 

Deferred rent

 

 

9,771

 

 

 

19,542

 

Deferred revenue

 

 

15,000

 

 

 

-

 

Note payable to CEO

 

 

-

 

 

 

6,000

 

Advances from Director

 

 

300

 

 

 

300

 

Total Liabilities

 

 

139,749

 

 

 

308,789

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' Equity (Deficit)

 

 

 

 

 

 

 

 

Preferred stock, $0.001 par value, 10,000,000 shares authorized; 0 shares issued and outstanding

 

 

-

 

 

 

-

 

Common stock, $0.001 par value, 250,000,000 shares authorized; 99,198,114 and 99,269,542 shares issued and outstanding as of October 31, 2015 and January 31, 2016, respectively

 

 

99,198

 

 

 

99,270

 

Additional paid-in capital

 

 

774,060

 

 

 

798,888

 

Accumulated deficit

 

 

(860,410 )

 

 

(1,179,198 )

Total Stockholders' Equity (Deficit)

 

 

12,848

 

 

 

(281,040 )

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

 

$ 152,597

 

 

$ 27,749

 

 

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

 

 
4
 

 

Biotech Products Services and Research, Inc.

(formerly Bespoke Tricycles Inc.)

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

Three Months Ended January 31,

 

 

 

2015

 

 

2016

 

 

 

 

 

 

 

 

 

 

Revenues

 

$ -

 

 

$ 90,165

 

 

 

 

 

 

 

 

 

 

Cost of revenues

 

 

-

 

 

 

56,887

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

-

 

 

 

33,278

 

 

 

 

 

 

 

 

 

 

General and administrative expenses

 

 

14,822

 

 

 

346,603

 

Impairment of fixed assets

 

 

-

 

 

 

5,463

 

 

 

 

14,822

 

 

 

352,066

 

 

 

 

 

 

 

 

 

 

Net loss from continuing operations

 

 

(14,822 )

 

 

(318,788 )

Net income from discontinued operations

 

 

808

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Net loss

 

$ (14,014 )

 

$ (318,788 )

 

 

 

 

 

 

 

 

 

Net income (loss) per common share – basic and diluted:

 

 

 

 

 

 

 

 

Continuing operations

 

$ (0.00 )

 

$ (0.00 )

Discontinued operations

 

 

0.00

 

 

 

-

 

Total

 

$ (0.00 )

 

$ (0.00 )

 

 

 

 

 

 

 

 

 

Weighted Average Number of Shares Outstanding – Basic and Diluted

 

 

150,120,000

 

 

 

99,219,854

 

 

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

 

 
5
 

 

Biotech Products Services and Research, Inc.

(formerly Bespoke Tricycles Inc.)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

 Three Months Ended

January 31,

 

 

 

2015

 

 

2016

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

Net loss

 

$ (14,014 )

 

$

(318,788 )

Net income from discontinued operations

 

 

808

 

 

 

-

 

Net loss from continuing operations

 

 

(14,822 )

 

 

(318,788 )

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

Depreciation expense

 

 

-

 

 

 

803

 

Impairment of fixed assets

 

 

-

 

 

 

5,463

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

-

 

 

 

19,878

 

Prepaid expenses

 

 

-

 

 

 

1,367

 

Inventories

 

 

-

 

 

 

(10,392 )

Security deposits

 

 

-

 

 

 

18,585

 

Accounts payable and accrued expenses

 

 

6,736

 

 

 

103,169

 

Deferred rent

 

 

-

 

 

 

9,771

 

Deferred revenue

 

 

-

 

 

 

(15,000 )

Net cash used in operating activities – continuing operations

 

 

(8,086 )

 

 

(185,144 )

Net cash provided by operating activities - discontinued operations

 

 

808

 

 

 

-

 

Net cash used in operating activities

 

 

(7,278 )

 

 

(185,144 )

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

Advances from director

 

 

4,051

 

 

 

-

 

Proceeds from issuance of note payable to CEO

 

 

 

 

 

 

6,000

 

Proceeds from issuance of notes payable

 

 

-

 

 

 

65,000

 

Proceeds from sale of common stock and warrants

 

 

-

 

 

 

25,000

 

Net cash provided by financing activities – continuing operations

 

 

4,051

 

 

 

96,000

 

Net cash provided by financing activities – discontinued operations

 

 

3,469

 

 

 

-

 

Net cash provided by financing activities

 

 

7,520

 

 

 

96,000

 

 

 

 

 

 

 

 

 

 

Increase (decrease) in cash during the period

 

 

242

 

 

 

(89,144 )

Cash at beginning of period

 

 

244

 

 

 

99,295

 

Cash at end of period

 

$ 486

 

 

$ 10,151

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL CASH FLOW INFORMATION:

 

 

 

 

 

 

 

 

Cash paid for taxes

 

$ -

 

 

$ -

 

Cash paid for interest

 

$ -

 

 

 

-

 

 

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

 

 
6
 

 

BIOTECH PRODUCTS SERVICES AND RESEARCH, INC.

(FORMERLY BESPOKE TRICYCLES INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

 

 

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

 

Biotech Products Services and Research, Inc. (formerly Bespoke Tricycles Inc.) ("BPSR" or the "Company") was incorporated on August 9, 2011 in the State of Nevada. Until October 30, 2015, the Company's business included the designing, manufacturing, and selling vending tricycles for commercial customers. In July 2015, the Company's principal business was the referral of cellular therapies for treating neurodegenerative, inflammatory and autoimmune conditions for patients all over the world.

 

The Company operates through the following wholly owned subsidiaries: Beyond Cells Corp., a Florida corporation ("Beyond Cells") formed with a business purpose to provide anti-aging and cellular therapy patient marketing and product sales; General Surgical of Florida, Inc., a Florida corporation ("General Surgical") with a business purpose to sell cellular therapy products to doctors and hospitals; and Ethan New York, Inc., a New York Corporation ("Ethan NY") formed with a business purpose of selling clothing and accessories through a retail store.

 

On May 29, 2015, Albert Mitrani acquired controlling interest of BPSR through the purchase of 135,000,000 shares of common stock from John Goodhew and subsequently became a director and the sole officer of BPSR.

 

On October 30, 2015, the Company entered into a stock purchase agreement (the "Purchase Agreement") with John Goodhew, the Company's director, pursuant to which all of the shares of Bespoke Tricycles, Ltd., a corporation organized under the Laws of England and Wales, were transferred to Mr. Goodhew. As a result of such sale, the Company was no longer in the business of designing, manufacturing, and selling vending tricycles. The Purchase Agreement contained customary representations, warranties and covenants for a transaction of this nature. The purchase price for the shares sold to Mr. Goodhew was $10. The results of Bespoke are reflected as discontinued operations in the financial statements.

 

Basis of Presentation

 

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated.

 

Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to the rules and regulations of the Securities Exchange Commission, although we believe that the disclosures made are adequate to make the information not misleading. These unaudited consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended October 31, 2015 filed with the Securities and Exchange Commission.

 

Reclassifications

 

Certain prior year amounts have been reclassified to conform with the current presentation.

 

Concentrations of Credit Risk

 

The balance sheet items that potentially subject us to concentrations of credit risk are primarily cash and cash equivalents and accounts receivable. Balances in accounts are insured up to Federal Deposit Insurance Corporation ("FDIC") limits of $250,000 per institution. At January 31, 2016, we did not have any cash balances in financial institutions in excess of FDIC insurance coverage.

 

 
7
 

 

BIOTECH PRODUCTS SERVICES AND RESEARCH, INC.

(FORMERLY BESPOKE TRICYCLES INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

 

Use of Estimates

 

The preparation of financial statements in conformity with generally accepted accounting principles of the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the year. Management bases its estimates on historical experience and on other assumptions considered to be reasonable under the circumstances. However, actual results may differ from the estimates.

 

Cash Equivalents

 

We consider all highly liquid investments with maturities of three months or less when purchased to be cash equivalents.

 

Basic Income (Loss) Per Common Share

 

Basic income (loss) per common share is calculated by dividing the Company's net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company's net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. At January 31, 2016, the Company has 1,079,542 common shares issuable upon the exercise of warrants that were not included in the computation of dilutive loss per share because their inclusion is anti-dilutive for the three months ended January 31, 2016. The Company had no potentially anti-dilutive shares outstanding as of January 31, 2015.

 

Stock-Based Compensation

 

All share-based payments to employees, including grants of employee stock options, are recognized in the financial statements based on their fair values.

 

Stock options and warrants issued to consultants and other non-employees as compensation for services provided to the Company are accounted for based upon the fair value of the services provided or the estimated fair market value of the option or warrant, whichever can be more clearly determined.

 

Financial Instruments

 

The fair values of our financial instruments, which may include cash, accounts receivable, accounts payable and long-term debt, approximate their carrying amounts.

 

Recent Accounting Pronouncements

 

The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company's results of operations, financial position or cash flow.

 

Subsequent Events

 

The Company has evaluated subsequent events that occurred after January 31, 2016 through the financial statement issuance date for subsequent event disclosure consideration.

 

 
8
 

 

BIOTECH PRODUCTS SERVICES AND RESEARCH, INC.

(FORMERLY BESPOKE TRICYCLES INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

 

NOTE 2 – GOING CONCERN

 

The accompanying consolidated financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. The Company has had limited revenues since its inception. The Company incurred a net loss of $318,788 for the fiscal quarter ended January 31, 2016. In addition, the Company had an accumulated deficit of $1,179,198 at January 31, 2016. The Company has negative working capital. The Company's efforts to establish a stabilized source of sufficient revenues to cover operating costs has yet to be completed and ultimately may prove to be unsuccessful unless additional sources of working capital through operations or debt and/or equity financings are realized.

 

Management anticipates that the Company will remain dependent, for the near future, on additional investment capital to fund ongoing operating expenses. The Company does not have any significant assets to pledge for the purpose of borrowing capital. The Company's current market capitalization and common stock liquidity will hinder its ability to raise equity proceeds. The Company's current key executives are not being paid. The Company anticipates that future sources of funding, if any, will therefore be costly and dilutive if available at all.

 

In view of the matters described in the preceding paragraphs, recoverability of the recorded asset amounts shown in the accompanying consolidated balance sheet assumes that (1) the Company will be able to quickly identify a stabilized source of revenues, (2) obligations to the Company's creditors are not accelerated, (3) the Company's operating expenses remain at current levels and/or the Company is successful in restructuring and/or deferring ongoing obligations, (4) the Company obtains additional working capital to meet its contractual commitments and maintain the current level of Company operations through debt or equity sources.

 

There is no assurance that the Company will be able to complete its revenue growth strategy or otherwise obtain sufficient working capital to cover ongoing cash requirements. Without sufficient cash reserves, the Company's ability to pursue growth objectives will be adversely impacted. Furthermore, despite significant effort since July 2015, the Company has thus far been unsuccessful in achieving a stabilized source of revenues. If revenues do not increase and stabilize or if additional funds cannot otherwise be raised, the Company might be required to seek other alternatives which could include the sale of assets, closure of operations and/or protection under the U.S. bankruptcy laws.

 

NOTE 3 – INVENTORIES

 

Inventories totaled $1,608 and $12,000 at October 31, 2015 and January 31, 2016, respectively, and was comprised of clothing products acquired for resale by Ethan NY. We value inventory at the lower of cost or market, with cost determined using the weighted-average cost method.

 

NOTE 4 – PROPERTY AND EQUIPMENT

 

 

 

October 31,
2015

 

 

January 31,
2016

 

 

 

 

 

 

 

 

Computer Equipment

 

$ 1,724

 

 

$ 1,724

 

Furniture and Fixtures

 

 

1,430

 

 

 

-

 

Leasehold Improvements

 

 

4,750

 

 

 

-

 

 

 

 

7,904

 

 

 

1,724

 

Less: accumulated depreciation

 

 

(86 )

 

 

(172 )

Total property and equipment, net

 

$ 7,818

 

 

$ 1,552

 

 

Depreciation expense of property, plant and equipment from operations totaled $0 and $803 for the three months ended January 31, 2015 and 2016, respectively. During the three months ended January 31, 2016, the Company recorded an impairment expense of $5,463 in general and administrative expenses on the consolidated income statement related to leasehold improvements and furniture and fixtures.

 

 
9
 

 

BIOTECH PRODUCTS SERVICES AND RESEARCH, INC.

(FORMERLY BESPOKE TRICYCLES INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

 

NOTE 5 – RELATED PARTY TRANSACTIONS

 

During the three months ended January 31, 2016, the Company's CEO loaned the Company $6,000. The promissory note bears no interest and is due on demand. As of January 31, 2016, the entire balance was outstanding.

 

At October 31, 2015 and January 31, 2016, the Company owed a former director $300.

 

During the three months ended January 31, 2016, the Company expensed and paid $40,300 for consulting services provided to the Company by the wife of the CEO. At October 31, 2015 and January 31, 2016, the Company owes this related party $9,354.

 

NOTE 6 – NOTES PAYABLE

 

On November 12, 2015, the Company entered into an unsecured loan agreement with an unaffiliated lender pursuant to which the Company received proceeds of $15,000. The loan bears interest at 8% per annum compounded annually and is due one year after the date of issuance.

 

On December 24, 2015, the Company entered into an unsecured loan agreement with an unaffiliated lender pursuant to which the Company received proceeds of $50,000. The loan bears interest at 8% per annum compounded annually and is due one year after the date of issuance.

 

NOTE 7 – EQUITY

 

Common Stock

 

From November 2015 to January 2016, the Company sold an aggregate of 35,714 Units to 2 investors. Each Unit cost $0.70 and consisted of two shares of common stock, one Class A Warrant and One Class B Warrant. As a result of the above transactions, the Company issued a total of 71,428 shares, Class A warrants to purchase 35,714 common shares and Class B warrants to purchase 35,714 common shares. The Class A Warrant and Class B Warrant have exercise prices of $0.50 and $1.00, respectively, and have a four-year term. The grant date fair value of the warrants issued in connection with this offering was $27,158.

 

Warrants

 

During the quarter ended January 31, 2016, the Company issued 71,428 warrants in connection with common stock offerings discussed above and valued the warrants on the dates of the grant using the Black-Scholes option pricing model with the following weighted average assumptions: (1) risk free interest rate from 1.56% to 1.57%, (2) term of 4 years, (3) expected stock volatility from 97% to 100%, and (4) expected dividend rate of 0%. All of the warrants vested immediately. The grant date fair value of the warrants issued during the quarter ended January 31, 2016 was $27,158.

 

 
10
 

 

BIOTECH PRODUCTS SERVICES AND RESEARCH, INC.

(FORMERLY BESPOKE TRICYCLES INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

 

A summary of warrant activity for the quarter ended January 31, 2016 is presented below. There were no warrants issued or outstanding at any time during the quarter ended January 31, 2015.

 

 

 

Number of
Shares

 

 

Weighted-average Exercise Price

 

 

Remaining Contractual
Term (years)

 

 

Aggregate
Intrinsic Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outstanding at October 31, 2015

 

 

1,008,114

 

 

$ 0.75

 

 

 

3.78

 

 

$ -

 

Granted

 

 

71,428

 

 

$ 0.75

 

 

 

4.00

 

 

$ -

 

Exercised

 

 

-

 

 

$ -

 

 

 

 

 

 

 

 

 

Expired/Forfeited

 

 

-

 

 

$ -

 

 

 

-

 

 

 

-

 

Outstanding and exercisable at January 31, 2016

 

 

1,079,542

 

 

$ 0.75

 

 

 

3.93

 

 

$ -

 

 

NOTE 8 – COMMITMENTS AND CONTINGENCIES

 

On June 22, 2015, the Company entered into an agreement with a consultant whereby the Company agreed to issue the consultant a warrant to purchase shares of common stock up to 4.9% of the Company. The terms of the warrant agreement were never determined or authorized by the Board of Directors of the Company, and accordingly, the warrant obligation has not been recorded by the Company.

 

Employment Agreements

 

On August 1, 2015, the Company entered into employment agreements with two new employees. Each employment agreement contained the following terms:

 

(a)

if net monthly sales generated by the Company are less than $50,000 and net profit margin on the aggregate sales is less than 35%, no Base Salary is payable;

(b)

if net monthly sales generated by the Company are $50,000 or more but less than $75,000 and net profit margin on the aggregate sales is less than 35%, the Base Salary shall be $6,000;

(b)

if net monthly sales generated by the Company are $75,000 or more but less than $100,000 and net profit margin on the aggregate sales is less than 35%, the Base Salary shall be $9,000; and

(d)

if net monthly sales generated by the Company are $100,000 or more and net profit margin on the aggregate sales is less than 35%, the Base Salary shall be $15,000.

 

In addition, the Company agreed to issue each employee 225,000 restricted shares of common stock of the Company upon achieving certain milestones.

 

On November 17, 2015, the Company executed a Termination Agreement and Mutual Release in connection with both of the above mentioned employment agreements. The parties released each other from any claims or liabilities one to the other, and the employment agreements between the Company and each of the employees were terminated in their entirety. The Company was not required to issue any of the shares of common stock provided for in the agreements or make any settlement payments in connection with the terminations.

 

 
11
 

 

BIOTECH PRODUCTS SERVICES AND RESEARCH, INC.

(FORMERLY BESPOKE TRICYCLES INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

 

Lease

 

On September 3, 2015, Ethan NY entered into a five-year lease agreement ("Ethan Lease") for a store located in New York City, New York ("Leased Premises"). The Ethan Lease commenced on October 1, 2015 (see Note 11). Under the terms of the Ethan Lease, Ethan NY provided a $18,585 security deposit and a former employee of Ethan NY provided a personal guaranty for a portion of the amounts due under the Ethan Lease.

 

Since the commencement of required monthly lease payments under the Ethan Lease, Ethan NY did not make any of the minimum lease payments due under the Ethan Lease totaling approximately $19,000 through January 31, 2016 (excluding late fees and interest provided for under the Ethan Lease). During the three months ended January 31, 2016, Ethan NY expensed the $18,585 security deposit made in connection with the execution of the Ethan Lease that is non-returnable to Ethan NY upon the occurrence of certain defined events prescribed under the Ethan Lease.

 

NOTE 9 – DISCONTINUED OPERATIONS

 

Bespoke Tricycles, Ltd

 

On October 30, 2015, the Company entered into a stock purchase agreement with John Goodhew, the Company's director, pursuant to which all of the shares of Bespoke Tricycles, Ltd., a corporation organized under the Laws of England and Wales, were transferred to Mr. Goodhew. As a result of such sale, the Company is no longer in the business of designing, manufacturing, and selling vending tricycles. The purchase price for the shares sold to Mr. Goodhew was $10. Mr. Goodhew resigned as a member of the Board of Directors in connection with the execution and delivery of the stock purchase agreement on October 30, 2015.

 

There were no carrying amounts associated with assets and liabilities of the discontinued operations of Bespoke Tricycles, Ltd. at October 31, 2015 and January 31, 2016 included in the financial statements.

 

The Company's revenues and expenses associated with net income of discontinued operations for Bespoke Tricycles Ltd. for the three months ended January 31, 2015 and 2016 are summarized below:

 

 

 

Three Months Ended

 

 

 

January 31,
2015

 

 

January 31,
2016

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

Bespoke Tricycles Ltd.

 

$ 2,000

 

 

 

-

 

Expenses, Net

 

 

 

 

 

 

 

 

Bespoke Tricycles Ltd.

 

 

1,192

 

 

 

-

 

Net income From Discontinued Operations

 

 

 

 

 

 

 

 

Bespoke Tricycles Ltd.

 

 

808

 

 

 

-

 

 

 
12
 

 

BIOTECH PRODUCTS SERVICES AND RESEARCH, INC.

(FORMERLY BESPOKE TRICYCLES INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

 

NOTE 10 – SEGMENT INFORMATION

 

We had two operating segments (the providing of anti-aging and cellular therapy patient marketing and product sales ("Patient Referral and Product Sales") and the selling of clothing and accessories through a retail store ("Clothing Sales") during the three months ended January 31, 2016. Neither of these segments were operating during the three months ended January 31, 2015.

  

The following are amounts related to the Patient Referral and Product Sales and the Clothing Sales businesses included in the accompanying consolidated financial statements for the three months ended January 31, 2015 and 2016 and at October 31, 2015 and January 31, 2016:

 

 

 

Three Months Ended January 31,

 

 

 

2015

 

 

2016

 

Revenues:

 

 

 

 

 

 

Patient Referrals and Product Sales

 

$ -

 

 

$ 61,595

 

Clothing Sales

 

 

-

 

 

 

28,570

 

Total Revenues

 

$ -

 

 

$ 90,165

 

 

 

 

 

 

 

 

 

 

Gross Profit (Loss):

 

 

 

 

 

 

 

 

Patient Referrals and Product Sales

 

$ -

 

 

$ 44,311

 

Clothing Sales

 

 

-

 

 

 

(11,033 )

Total Gross Profit (Loss)

 

$ -

 

 

$ 33,278

 

 

Net Loss:

 

 

 

 

 

 

Patient Referrals and Product Sales

 

$ -

 

 

$ (198,754 )

Clothing Sales

 

 

-

 

 

 

(120,034 )

Net Loss

 

$ -

 

 

$ (318,788 )

 

 

October 31,
2015  

 

 

January 31,
2016

 

Total Assets:

 

 

 

 

 

 

 

 

Patient Referrals and Product Sales

 

$ 63,243

 

 

$ 10,195

 

Clothing Sales

 

 

89,354

 

 

 

17,554

 

Total

 

$ 152,597

 

 

$ 27,749

 

 

 
13
 

 

BIOTECH PRODUCTS SERVICES AND RESEARCH, INC.

(FORMERLY BESPOKE TRICYCLES INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

 

NOTE 11 – SUBSEQUENT EVENTS

 

Lease abandonment

 

During June 2016, the Company's wholly-owned subsidiary abandoned its lease. In connection with the lease abandonment, Ethan NY is currently negotiating with the landlord for settlement of past due amounts owing under the Ethan Lease through June 30, 2016 and the release of all other obligations potentially owing under the Ethan Lease. Ethan NY has not made any of the required monthly lease payments since inception of the Ethan Lease. The total amount of minimum lease payments that Ethan NY is obligated to pay pursuant to this 5-year lease (the "Initial Term") is $586,241 (excluding late fees and interest provided for under the Ethan Lease). All of Ethan NY's obligations are recourse only to the assets at Ethan NY, except however, certain obligations under the Ethan Lease that were guaranteed by an outside party. Under the terms of the Ethan Lease, the obligations of the Ethan Lease may be mitigated based on the amount of any future rents that are received for the rental of the Leased Premises to other tenants during the Initial Term. During the three months ended January 31, 2016, Ethan NY expensed the $18,585 security deposit made in connection with the execution of the Ethan Lease that is non-returnable to Ethan NY upon the occurrence of certain defined events prescribed under the Ethan Lease.

  

Common stock

 

From February 2016 to March 2016, the Company sold an aggregate of 328,971 Units. Each Unit cost $0.70 and consisted of two shares of common stock, one Class A Warrant and One Class B Warrant. As a result of the above transactions, the Company issued a total of 657,942 shares, Class A warrants to purchase 328,971 common shares and Class B warrants to purchase 328,971, common shares. The Class A Warrant and Class B Warrant have exercise prices of $0.50 and $1.00, respectively, and have a four year term.

 

On April 15, 2016, the Company sold 25,000 shares of common stock to an individual for cash proceeds of $5,000.

 

During July 2016, the Company sold 1,680,000 shares of common stock to an individual for cash proceeds of $84,000.

 

During July 2016, the Company sold 200,000 shares of common stock to investors for cash proceeds of $10,000.

 

Debt

 

On April 27, 2016, the Company entered into an unsecured loan agreement with a consultant of the Company pursuant to which the Company received proceeds of $35,000. The payoff amount of the loan is $42,000 and was due on May 31, 2016. This loan still remains outstanding.

 

Termination of contract

 

On February 23, 2016, the Distribution Agreement, dated August 11, 2015, between Amnio Technology, LLC ("Amnio Technology") and the Company's wholly-owned subsidiary, BD Source, was terminated by Amnio Technology. Pursuant to the Distribution Agreement, Amnio Technology had engaged BD Source pursuant to the Distribution Agreement in connection with the marketing, sales and distribution of certain of Amnio Technology's products. Amnio Technology is engaged in the business of human tissue procurement, processing and distribution to customers and third party distributors. Amnio Technology terminated the Distribution Agreement due to BD Source's non-payment of the outstanding balance of $4,815 under the Distribution Agreement. BD Source has since paid such balance and believes that all obligations owed to Amnio Technology have been satisfied.

 

 
14
 

 

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

 

The following discussion of the Company's liquidity and capital resources should be read in conjunction with our unaudited consolidated financial statements and related notes thereto appearing elsewhere herein. Unless stated otherwise, the words "we," "us," "our," the "Company" or "BPSR" in this section collectively refer to Biotech Products Services and Research, Inc., a Nevada corporation, and its wholly-owned subsidiaries.

 

Overview

 

Since July 2015, we have been engaged in the health care industry, principally focusing on supplying products and services related to the growing field of regenerative anti-aging medicine ("RAAM"). Our goal is to develop state-of-the-art RAAM-related products developed by third parties under exclusive supply arrangements with outside manufacturers and/or from products developed from internally based research and development ("RAAM Products") and to distribute the RAAM Products and market RAAM services through a referral network of doctors and clinics (collectively, the "Providers") and from the development of a network of branded destination clinics that are capable of providing comprehensive and/or longer term RAAM-based therapies and treatments.

 

Since July 2015, our main revenue stream has been generated from patient referral and product sales to Providers enrolled in our marketing service from customers desiring treatment for various neurodegenerative, inflammatory and autoimmune conditions. We market registered cellular products and human allografts used in the disease management for osteoarthritis, ophthalmic and other conditions to Providers, including those enrolled in our marketing program and those who are not.

 

Currently our RAAM related operations are conducted through our two following wholly-owned subsidiaries:

 

·

Beyond Cells Corp ., a Florida corporation formed with a business purpose to provide consumers with access to anti-aging and cellular therapy through marketing campaigns featuring enrolled Providers ("Beyond Cells"); and

 

 

· General Surgical Florida, Inc., a Florida corporation with a business purpose of selling and distributing cellular therapy products to doctors and hospitals ("General Surgical");

 

Plan of Operation

 

Our business strategy is to become an integrated developer, processor and marketer of proprietary regenerative biomaterial products and bio-plants processed from human amniotic membrane and other birth tissues and human skin and bone. Our mission to give physicians products and tissues to help the body heal itself.

 

Our plan is for our distribution model to be comprised of a combination of direct sales, third party sales agents and stocking distributors that will market BPSR branded products. We intend to also have private labeling; relationships targeting the spine, orthopedic, ophthalmic and dental markets. Our primary focus is in the U.S. market but we are also currently exploring international expansion opportunities.

 

 
15
 

 

The following is a list of the business goals and milestones we intend to accomplish within the next twelve months:

 

a.

Increase revenues from our existing businesses and products by:

  

 

i. Identifying strategic supply, distribution and joint venture partners for the purpose of obtaining additional liquidity and to provide the ability to increase product offerings and/or increasing our research and development capabilities

 

 

 

 

ii. Expand our marketing capabilities to enhance our revenues through:

 

 

1. Engaging well trained sales representatives and increasing the amount of representatives

 

 

 

 

2. Increasing our physician referral network in the United States

 

 

 

 

3. Increasing the types of products available to distribute to Providers

 

 

 

 

4. Expand our online social media marketing

 

 

 

 

5. Expand online (e-commerce) product offerings

 

 

b. Secure additional working capital to:

 

 

i. Fund ongoing expenses until revenues are stabilized and sufficient to support ongoing operations

 

 

 

 

ii. Develop and expand our sales and distribution capabilities in order to obtain sufficient revenues

 

 

 

 

iii. Commence research and development for new product offerings or identify strategic partners that will accomplish similar desired objectives

 

Since inception, we have incurred net operating losses. Losses have principally occurred as a result of our inability to increase and stabilize revenues which have remained insufficient as a result of a lack of working capital to (a) fund effectively the marketing of our products, (b) the ability to attract and retain needed personnel and/or (c) to fund the expansion into other growth opportunities, including the substantial resources required for research and development. We expect operating losses to continue. Our available funds combined with our current revenue levels will not fund current levels of ongoing general and administrative expenses associated with our operations. We expect to need additional financing to develop, produce market our products and to cover the general and administrative expenses of the Company.

 

 
16
 

 

Results of Operations from Discontinued Operations

 

On October 30, 2015, the Company, entered into a stock purchase agreement (the "Goodhew PurchaseAgreement") with John Goodhew, the Company's former officer and then current director, pursuant to which all of the shares of Bespoke UK were transferred to Mr. Goodhew in consideration for $10. As a result of such sale, the Company ceased its business line of designing, manufacturing, and selling vending tricycles ("Tricycle Business"). The Goodhew Purchase Agreement contained customary representations, warranties and covenants for a transaction of this nature. In connection with the Goodhew Purchase Agreement, Mr. Goodhew resigned from the Company's board of directors.

 

Effective June 30, 2016, the leased premises for Ethan NY's sole retail store location ("Leased Premises") was forfeited ("Lease Forfeiture") as a result of the ongoing non-payment of past due amounts due under the Ethan Lease and the owner of the Leased Premises ("Landlord") execution of a new lease agreement for the Leased Premises to another tenant effective July 2016. As a result of the Lease Forfeiture and our continued lack of sufficient working capital to operate that business, we abandoned our Ethan NY business effective June 30, 2016 ("Abandonment").

 

In connection with the Lease Forfeiture, Ethan NY is currently negotiating with the Landlord for settlement of past due amounts owing under the Ethan Lease through June 30, 2016 and the release of all other obligations potentially owing under the Ethan Lease. Ethan NY has not made any of the required monthly lease payments since inception of the Ethan Lease. The total amount of minimum lease payments that Ethan NY is obligated to pay pursuant to this 5-year lease (the "Initial Term") is $586,241 (excluding late fees and interest provided for under the Ethan Lease). All of Ethan NY's obligations are recourse only to the assets at Ethan NY, except however, certain obligations under the Ethan Lease that were guaranteed by an outside party. Under the terms of the Ethan Lease, the obligations of the Ethan Lease may be mitigated based on the amount of any future rents that are received for the rental of the Leased Premises to other tenants during the Initial Term. Ethan NY estimates that the exposure for potential obligations subsequent to the date of the Lease Forfeiture will be satisfactorily mitigated as a result of the Landlord's new lease arrangement for the Leased Premises.

 

Results of Operations

 

As a result of the discontinuation of the Tricycle Business on October 30, 2015 and the commencement of the operations of the Patient Referral and Product Sales segment on July 1, 2015 and the operations of Clothing Sales on November 1, 2015, the foregoing discussion of our results and operations do not include comparisons of the fiscal quarter ended January 31, 2016 to the results of operations to the fiscal quarter ended January 31, 2015.

 

For the Fiscal Quarter Ended January 31, 2016 and January 31, 2015

 

Revenues

 

Our revenues for the fiscal quarter ended January 31, 2016 was $90,165. These revenues were from Patient Referral and Product Sales of $61,595 and Clothing Sales of $28,570. As stated previously, we did not have any revenues for the fiscal quarter ended January 31, 2015. The Clothing Sales gross revenues were lower than projected principally due to the additional time needed to develop adequate customer awareness of the new store and the limited clothing inventory available to sell to potential customers.

 

 
17
 

 

Cost of Revenues

 

Our cost of revenues for the fiscal quarter ended January 31, 2016 was $56,887. The cost of revenues are associated with Patient Referral and Product Sales of $17,284 and Clothing Sales of $39,603. As stated previously, we did not have any cost of revenues for the fiscal quarter ended January 31, 2015.

 

Gross Profit

 

Gross profit for the fiscal quarter ended January 31, 2016 was $33,278, or approximately 37% of sales. Gross profit associated with Patient Referral and Product Sales was $42,808 during the three months ended January 31, 2016 while our Clothing Sales operations incurred gross losses of $(11,033) during the three months ended January 31, 2016. The Clothing Sales gross losses were principally attributable to inventory losses, the additional time needed to develop adequate customer awareness of the new store and the limited clothing inventory available to sell to potential customers.

 

General and Administrative Expenses

 

For the fiscal quarter ended January 31, 2016, total general and administrative expenses were $352,066, which was largely comprised of approximately $149,000 of professional fees, and approximately $62,000 of payroll and commissions expenses.

 

Liquidity and Capital Resources

 

During the fiscal year ended October 31, 2015 and up through the date of the filing of this Form 10-Q for the fiscal quarter ended January 31, 2016, the Company has relied on the sale of equity securities, the issuance of debt or restructuring of debt obligations to meet the shortfall in cash to fund its operations.

 

· On November 12, 2015, the Company entered into an unsecured loan agreement with an unaffiliated lender pursuant to which the Company received proceeds of $15,000. The loan bears interest at 8% per annum compounded annually and is due one year after the date of issuance.

 

 

· From November 2015 to March 2016, the Company sold an aggregate of 364,685 Units to nine "accredited investors". Each Unit cost $0.70 and consisted of two shares of common stock, one Class A Warrants and One Class B Warrants. As a result of the above transactions, the Company issued a total of 729,370 shares, Class A warrants to purchase 364,685 common shares and Class B warrants to purchase 364,685 common shares. The Class A Warrant entitles the holder thereof to purchase one share of our common stock for $0.50 until the fourth anniversary of the date the warrant was originally issued. The Class B Warrant entitles the holder thereof to purchase one share of our common stock for $1.00 until the fourth anniversary of the date the warrant was originally issued.

 

 

· On December 24, 2015, the Company entered into an unsecured loan agreement with an unaffiliated lender pursuant to which the Company received proceeds of $50,000. The loan bears interest at 8% per annum compounded annually and is due one year after the date of issuance.


 
18
 

 
· On April 15, 2016, the Company sold 25,000 shares of common stock to a consultant of the Company (an "accredited investor") at $0.20 per share for an aggregate purchase price of $5,000.

 

 

· On April 27, 2016, the Company entered into an unsecured loan agreement with a consultant of the Company pursuant to which the Company received proceeds of $35,000. The payoff amount of the loan is $42,000 and was due on May 31, 2016. This loan still remains outstanding.

 

 

· During July 2016, the Company sold 1,680,000 shares of common stock to an "accredited investor" at $0.05 per share for an aggregate purchase price of $84,000. The proceeds were used for working capital.

 

 

· During July 2016, the Company sold 200,000 shares of common stock to 2 "accredited investors" at $0.05 per share for an aggregate purchase price of $10,000. The proceeds were used for working capital.
 

The Company issued the foregoing securities pursuant to the exemption from the registration requirements of the Securities Act of 1933, as amended, available under Section 4(a)(2) promulgated thereunder due to the fact that they were isolated sales to a limited number of people and did not involve a public offering of securities. Also, see "Item 5. Subsequent Events."

 

Going Concern Consideration

 

The Company has had limited revenues since its inception. The Company incurred a net loss of $738,354 and $318,788 for the fiscal year ended October 31, 2015 and the fiscal quarter ended January 31, 2016, respectively. In addition, the Company had an accumulated deficit of $1,179,198 at January 31, 2016. The Company has negative working capital. The Company's efforts to establish a stabilized source of sufficient revenues to cover operating costs has yet to be completed and ultimately may prove to be unsuccessful unless additional sources of working capital through operations or debt and/or equity financings are realized.

 

Management anticipates that the Company will remain dependent, for the near future, on additional investment capital to fund ongoing operating expenses. The Company does not have any significant assets to pledge for the purpose of borrowing capital. The Company's current market capitalization and common stock liquidity will hinder its ability to raise equity proceeds. Ethan NY has yet to finalize the settlement of the obligations owing under the Lease Agreement in connection with the Abandonment. The Company's current key executives are not being paid. The Company anticipates that future sources of funding, if any, will therefore be costly and dilutive if available at all.

 

In view of the matters described in the preceding paragraphs, recoverability of the recorded asset amounts shown in the accompanying consolidated balance sheet assumes that (1) the Company will be able to quickly identify a stabilized source of revenues, (2) obligations to the Company's creditors are not accelerated, (3) the Company's operating expenses remain at current levels and/or the Company is successful in restructuring and/or deferring ongoing obligations, (4) the Company satisfactorily negotiates the settlement of the Lease Agreement, and (5) the Company obtains additional working capital to meet its contractual commitments and maintain the current level of Company operations through debt or equity sources.

 

There is no assurance that the Company will be able to complete its revenue growth strategy or otherwise obtain sufficient working capital to cover ongoing cash requirements. Without sufficient cash reserves, the Company's ability to pursue growth objectives will be adversely impacted. Furthermore, despite significant effort since July 2015, the Company has thus far been unsuccessful in achieving a stabilized source of revenues. If revenues do not increase and stabilize or if additional funds cannot otherwise be raised, the Company might be required to seek other alternatives which could include the sale of assets, closure of operations and/or protection under the U.S. bankruptcy laws.

 

 
19
 

 

Off-Balance Sheet Arrangements

 

We do not have any off-balance sheet arrangements.

 

Recently Issued Financial Accounting Standards

 

The Accounting Standards Codification is the single source of authoritative generally accepted accounting principles (" GAAP" ) recognized by the Financial Accounting Standards Board to be applied by nongovernmental entities in the preparation of financial statements in conformity with GAAP. Rules and interpretive releases of the SEC, under authority of federal securities laws, are also sources of authoritative GAAP for SEC registrants. The Codification became effective for interim and annual periods ending after September 15, 2009 and superseded all previously existing non-SEC accounting and reporting standards. All other non-grandfathered non-SEC accounting literature not included in the Codification is non-authoritative. All of the Company's references to GAAP now use the specific Codification Topic or Section rather than prior accounting and reporting standards. The Codification did not change existing GAAP and therefore, did not affect the Company's consolidated financial position or results of operations.

 

Critical Accounting Policies

 

Our unaudited consolidated financial statements reflect the selection and application of accounting policies which require us to make significant estimates and judgments. See note 2 to our audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended October 31, 2015, "Summary of Significant Accounting Policies".

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

 

Not applicable.

 

Item 4. Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures

 

Disclosure controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), such as this Quarterly Report, is recorded, processed, summarized and reported in accordance with the rules of the United States Securities and Exchange Commission (the "SEC"). Disclosure controls are also designed with the objective of ensuring that such information is accumulated appropriately and communicated to management, including the chief executive officer and chief financial officer, as appropriate, to allow for timely decisions regarding required disclosures.

 

Our Chief Executive Officer, who serves as our principal executive officer and principal financial and accounting officer, evaluated the effectiveness of our "disclosure controls and procedures" (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) as of January 31, 2016, the end of the period covered by this report. Based on that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were not effective as of such date to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act were recorded, processed, summarized, and reported within the time periods specified in the SEC's rules and forms and that our disclosure controls are not effectively designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 

Going forward, we intend to evaluate our processes and procedures and, where practicable, implement changes in order to have more effective controls over financial reporting.

 

Changes in Internal Controls over Financial Reporting

 

No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the fiscal quarter ended January 31, 2016 that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

 

 
20
 

 

PART II - OTHER INFORMATION

 

Item 1. Legal Proceedings

 

There are no pending legal proceedings to which the Company, or any of its subsidiaries, is a party or of which any of their property is subject, nor are there any material proceedings to which any director, officer or affiliate of the Company, any owner of record or beneficially of more than five percent of any class of voting securities of the Company, or any associate of any such director, officer, affiliate of the Company, or security holder is a party adverse to the Company or any of its subsidiaries or has a material interest adverse to the Company or any of its subsidiaries.

 

Item 1A. Risk Factors

 

Not applicable.

 

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

 

· From August 2015 to October 2015, the Company sold 192,857 Units to four "accredited investors." Each Unit cost $0.70 and consisted of two shares of common stock, one Class A Warrant and One Class B Warrant. The Company issued 385,714 shares, Class A warrants to purchase 192,857 common shares and Class B warrants to purchase 192,857 common shares. The Class A Warrant and Class B warrant have exercise prices of $0.50 and $1.00, respectively, and have a four year term. The grant date fair value of the warrants issued in connection with this offering was $83,060.

 

 

· During September 2015, the Company issued 4,590,000 shares of common stock to a consultant of the Company. The Company recorded $268,000 of stock-based compensation expense based on the grant date fair value of these shares.

 

 

· On November 12, 2015, the Company entered into an unsecured loan agreement with an unaffiliated lender pursuant to which the Company received proceeds of $15,000. The loan bears interest at 8% per annum compounded annually and is due one year after the date of issuance.

 

 

· From November 2015 to March 2016, the Company sold an aggregate of 364,685 Units to nine "accredited investors". Each Unit cost $0.70 and consisted of two shares of common stock, one Class A Warrants and One Class B Warrants. As a result of the above transactions, the Company issued a total of 729,370 shares, Class A warrants to purchase 364,685 common shares and Class B warrants to purchase 364,685 common shares. The Class A Warrant entitles the holder thereof to purchase one share of our common stock for $0.50 until the fourth anniversary of the date the warrant was originally issued. The Class B Warrant entitles the holder thereof to purchase one share of our common stock for $1.00 until the fourth anniversary of the date the warrant was originally issued.

 

 

· On December 24, 2015, the Company entered into an unsecured loan agreement with an unaffiliated lender pursuant to which the Company received proceeds of $50,000. The loan bears interest at 8% per annum compounded annually and is due one year after the date of issuance.

 

The Company issued the foregoing securities pursuant to the exemption from the registration requirements of the Securities Act of 1933, as amended, available under Section 4(a)(2) promulgated thereunder due to the fact that they were isolated sales to a limited number of people and did not involve a public offering of securities.

 

 
21
 

 

Item 3. Defaults upon Senior Securities

 

None.

 

Item 4. Mine Safety Disclosures

 

Not applicable .

 

Item 5. Other Information

 

Subsequent Events

 

· From February 2015 to March 2016, the Company sold an aggregate of 328,971 Units to seven "accredited investors". Each Unit cost $0.70 and consisted of two shares of common stock, one Class A Warrant and One Class B Warrant. As a result of the above transactions, the Company issued a total of 657,942 shares, Class A warrants to purchase 328,971 common shares and Class B warrants to purchase 328,971, common shares. The Class A Warrant and Class B Warrant have exercise prices of $0.50 and $1.00, respectively, and have a four year term.

 

 

· On April 15, 2016, the Company sold 25,000 shares of common stock to a consultant of the Company (an "accredited investor") at $0.20 per share for an aggregate purchase price of $5,000.

 

 

· During July 2016, the Company sold 1,680,000 shares of common stock to an "accredited investor" at $0.05 per share for an aggregate purchase price of $84,000. The proceeds were used for working capital.

 

 

· During July 2016, the Company sold an aggregate of 200,000 shares of common stock to 2 "accredited investors" at $0.05 per share for an aggregate purchase price of $10,000. The proceeds were used for working capital.

 

The Company issued the foregoing securities pursuant to the exemption from the registration requirements of the Securities Act of 1933, as amended, available under Section 4(a)(2) promulgated thereunder due to the fact that they were isolated sales to a limited number of people and did not involve a public offering of securities.

 

 
22
 

 

Item 6 .  Exhibits

 

The following Exhibits are incorporated by reference to previously filed reports, as noted:

 

Exhibit No:

Description:

 

 

 

10.3

Employment Agreement dated August 7, 2015 between Ethan New York Inc. and Agnia Deskins (Filed as an exhibit to Form 8-K filed on October 13, 2015 and incorporated by reference herein)

 

 

 

10.4

 

Lease dated September 3, 2015 between Ethan New York Inc. and M&E Mott LLC (Filed as an exhibit to Form 8-K filed on October 13, 2015 and incorporated by reference herein)

31.1

Rule 13(a)-14(a)/15(d)-14(a) Certification

32.1

Section 1350 Certification

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 Labels Linkbase Document

101.DEF*

XBRL Taxonomy Extension Definition Linkbase Document

101.PRE*

XBRL Taxonomy Extension Presentation Linkbase Document

_______________

*

Furnished herewith. Users of this data are advised that, pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Exchange Act of 1934 and otherwise are not subject to liability.

 

All of the Exhibits are available from the SEC's website at www.sec.gov. In addition, the Company will furnish a copy of any Exhibit upon payment of a fee (based on the estimated actual cost which shall be determined at the time of the request) together with a request addressed to Albert Mitrani, Biotech Products Services and Research Inc., 515 North Shore Drive, Miami Beach, FL 33141.

 

 
23
 

 

SIGNATURES

 

Pursuant to 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. 

 

BIOTECH PRODUCTS SERVICES AND RESEARCH, INC.

 

Date: August 8, 2016

By:

/s/ ALBERT MITRANI

Albert Mitrani

President, Chief Executive Officer,

Secretary and Treasurer

(Principal Executive Officer)

(Principal Financial and Accounting Officer)

 

 

24

 

EXHIBIT 31.1

 

CERTIFICATION

 

I, Albert Mitrani, the Chief Executive Officer and President of Biotech Products Services and Research, Inc., a Nevada corporation (the "Registrant"), certify that:

 

1. I have reviewed this report on Form 10-Q of Biotech Products Services and Research, Inc.;

 

 

2. Based on my knowledge, this report does not contain any untrue statement of material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

 

4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a - 15(e) and 15d - 15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a - 15(f) and 15d - 15(f)) for the registrant and have:

 

 

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

 

 

 

b) Designed such internal control over financial reporting, or caused such internal control over financial reports to be designed under our supervision to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

 

 

 

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

 

 

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

 

5. I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's Board of Directors or persons performing:

 

 

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

 

 

 

 

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

 

 
Date: August 8, 2016 By: /s/ Albert Mitrani

 

 

Albert Mitrani,  
   

President, Chief Executive Officer,
Secretary and Treasurer

 
    (Principal Executive Officer)
(Principal Financial and Accounting Officer)
 

 

EXHIBIT 32.1

 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of Biotech Products Services and Research, Inc. on Form 10-Q for the quarter ended January 31, 2016 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned, Albert Mitrani, Chief Executive Officer, President and Chief Financial Officer of Biotech Products Services and Research, Inc., certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

 

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Biotech Products Services and Research, Inc..

 

 
Date: August 8, 2016 By: /s/ Albert Mitrani                  

 

 

Albert Mitrani,  
   

President, Chief Executive Officer,
Secretary and Treasurer
(Principal Executive Officer)

 
    (Principal Financial and Accounting Officer)