UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, DC 20549





FORM 10-QSB





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





For the quarterly period ended May 31, 2003





[ ] Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934





For the transition period  to








Commission File Number   000-33389





AUGUST BIOMEDICAL CORPORATION




(Exact name of small Business Issuer as specified in its charter)





NEVADA        52-2268239




(State or other jurisdiction of     (IRS Employer Identification No.)


incorporation or organization)





SUITE L-8, 601 W. BROADWAY


VANCOUVER, BRITISH COLUMBIA, CANADA      V5Z 4C2




(Address of principal executive offices)    (Zip Code)





Issuers telephone number, including area code: (604) 608-3831







COYOTE VENTURES CORP.


(Former name, former address and former fiscal year,


if changed since last report)





Check whether the issuer (1) 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 issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days [ X ] Yes [ ] No





State the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable date: 12,065,000 Shares of Common Stock outstanding as of May 31, 2003.



















PART 1 - FINANCIAL INFORMATION





Item 1.   Financial Statements





The accompanying un-audited financial statements have been prepared in accordance with the instructions to Form 10-QSB and, therefore, do not include all information and footnotes necessary for a complete presentation of financial position, results of operations, cash flows, and stockholders deficit in conformity with generally accepted accounting principles. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. Operating results for the nine months ended May 31, 2003 are not necessarily indicative of the results that can be expected for the year ending August 31, 2003.

















AUGUST BIOMEDICAL CORPORATION
 (Formerly Coyote Ventures Corp.)
 (A Development Stage Company)
 
 
 CONSOLIDATED INTERIM FINANCIAL STATEMENTS
 
 
 MAY 31, 2003
 (Unaudited)
 (Stated in U.S. Dollars)
 
 
 
 
 
 
 
 
 
  AUGUST BIOMEDICAL CORPORATION
 (Formerly Coyote Ventures Corp.)
 (A Development Stage Company)
 
 CONSOLIDATED INTERIM BALANCE SHEET
 (Stated in U.S. Dollars)
 
 
 
 MAY 31
AUGUST 312003
2002(Unaudited)
(Audited)ASSETSCurrentCash

$
3,489

$
183,608Accounts receivable


20,655


-Advances receivable


1,500


-Prepaid expenses


155


1,55425,799


185,162Equipment (Note 4)


35,168


10,991Intangible Assets(Note 5)


-


20,000$
60,967

$
216,153LIABILITIESCurrentAccounts payable and accrued liabilities

$
50,146

$
49,591Loan payable (Note 6)


180,000


-230,146


49,591Share Subscriptions Received (Note 7)


20,000


-250,146


49,591STOCKHOLDERS (DEFICIENCY) EQUITYCapital StockAuthorized:100,000,000 Common shares, par value $0.001 per shareIssued and outstanding:12,065,000 Common shares


12,065


12,025Additional paid-in capital


517,935


417,975Deficit Accumulated During The Development Stage


(719,179
)

(183,278
)(189,179
)

246,722Less: Subscriptions Receivable


-


(80,160
)(189,179
)

166,562$
60,967

$
216,153Nature Of Operations (Note 2)
 
    
     
 AUGUST BIOMEDICAL CORPORATION
 (Formerly Coyote Ventures Corp.)
 (A Development Stage Company)
 
 CONSOLIDATED INTERIM STATEMENT OF LOSS
 (Unaudited)
 (Stated in U.S. Dollars)
 
 
 
 INCEPTIONMAY 26THREE MONTHS ENDED
NINE MONTHS ENDED
2000 TOMAY 31
MAY 31
MAY 312003
2002
2003
2002
2003ExpensesAmortization


$1,939

$-

$3,937

$-

$5,268Consulting fees


49,661

3,000

184,048

19,800

227,484General and administrative


17,830

397

41,018

1,243

53,090Investor relations


(4,000)

-

19,500

-

22,690Mineral property option payments


-

-

-

10,000

15,500Mineral property exploration expenditures


-

-

-

4,000

12,273Professional fees


22,374

3,639

84,076

19,062

177,319Stock transfer fees


196

-

3,322

-

5,555Write down of intangible asset


200,000

-

200,000

-

200,000Loss For The Period


$288,000

$7,036

$535,901

$54,105

$719,179Basic And Diluted Loss Per Share

$
(0.01)
$
(0.01)
$
(0.02)
$
(0.01)Weighted Average Number of Shares Outstanding


12,065,000

11,575,000

12,040,311

11,575,000
   
 
 
 
 AUGUST BIOMEDICAL CORPORATION
 (Formerly Coyote Ventures Corp.)
 (A Development Stage Company)
 
 CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS
 (Unaudited)
 (Stated in U.S. Dollars)
 
 
 
 INCEPTIONMAY 26THREE MONTHS ENDED
NINE MONTHS ENDED
2000 TOMAY 31
MAY 31
MAY 312003
2002
2003
2002
2003Cash Flows From Operating ActivitiesLoss for the period


$(288,000)

$(7,036)

$(535,901)

$(54,105)

$(719,179)Items not involving cash:Amortization


1,939

-

3,937

-

5,268Write down of intangible asset


200,000

-

200,000

-

200,000Adjustments To Reconcile Net Loss To Net Cash Used By Operating ActivitiesPrepaid expenses


467

-

1,399

-

(155)Accounts receivable


(655)

-

(655)

-

(655)Advances receivable


-

-

(1,500)

-

(1,500)Accounts payable and accrued liabilities


22,650

(16,647)

555

(542)

50,146(63,599)

(23,683)

(332,165)

(54,647)

(466,075)Cash Flows From Financing ActivitiesShare capital issued


-

-

180,160

-

530,000Loan payable


-

25,000

180,000

15,000

180,000Promissory note payable


-

-

-

10,000

-Share subscriptions received


-

-

20,000

-

20,000Advances from shareholder


-

(654)

-

9,346

-24,346

380,160

34,346

730,000Cash Flows From Investing ActivitiesPurchase of equipment


(12,689)

-

(28,114)

(2,481)

(40,436)Patent acquisitions


-

-

(200,000)

-

(220,000)(12,689)

-

(228,114)

(2,481)

(260,436)(Decrease) Increase In Cash


(76,288)

663

(180,119)

(22,782)

3,489Cash, Beginning Of Period


79,777

147

183,608

23,592

-Cash, End Of Period


$3,489

$810

$3,489

$810

$3,489
 
    
  
 
  AUGUST BIOMEDICAL CORPORATION
 (Formerly Coyote Ventures Corp.)
 (A Development Stage Company)
 
 CONSOLIDATED INTERIM STATEMENT OF STOCKHOLDERS DEFICIENCY
 
 MAY 31, 2003
 (Unaudited)
 (Stated in U.S. Dollars)
   COMMON STOCKSHARES
AMOUNT
ADDITIONAL PAID-IN CAPITAL
DEFICIT
TOTALShares issued for cash at
$0.001 (May 2000)

7,500,000
$
7,500
$
-
$
-
$
7,500Shares issued for cash at
$0.01 (June 2000)

4,000,000

4,000

36,000

-

40,000Shares issued for cash at
$0.10 (August 2000)

75,000

75

7,425

-

7,500Net loss for the period

-

-

-

(17,927)

(17,927)Balance, August 31, 2000

11,575,000

11,575

43,425

(17,927)

37,073Net loss for the year

-

-

-

(74,348)

(74,348)Balance, August 31, 2001

11,575,000

11,575

43,425

(92,275)

(37,275)Shares issued for cash at $0.50 (August 2002)

150,000

150

74,850

-

75,000Shares issued for cash at $1.00 (August 2002)

300,000

300

299,700

-

300,000Net loss for the year

-

-

-

(91,003)

(91,003)Balance, August 31, 2002

12,025,000

12,025

417,975

(183,278)

246,722Shares issued for cash at $2.50 (February 2003)

40,000

40

99,960

-

100,000Net loss for the period

-

-

-

(535,901)

(535,901)Balance, May 31, 2003

12,065,000

$12,065

$517,935

$(719,179)

$(189,179)
 
 
 
 
 
 
 
 AUGUST BIOMEDICAL CORPORATION
 (Formerly Coyote Ventures Corp.)
 (A Development Stage Company)
 
 NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
 
 MAY 31, 2003
 (Unaudited)
 (Stated in U.S. Dollars)
 
 
 
 1.  BASIS OF PRESENTATION
 
 The unaudited consolidated financial statements as of May 31, 2003 included herein have been prepared without audit pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with United States generally accepted principles have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. It is suggested that these financial statements be read in conjunction with the August 31, 2002 audited financial statements and notes thereto.
 
 
 2.  NATURE OF OPERATIONS
 
 a)  Organization
 
 The Company was incorporated on May 26, 2000 in the State of Nevada, U.S.A. On December 31, 2002, the Company changed its name from Coyote Ventures Corp. to August Biomedical Corporation.
 
 b)  Development Stage Activities
 
 August Biomedical Corporation (the Company) is currently a development stage company under the provisions of Statement of Financial Accounting Standards (SFAS) No. 7. The Company is engaged in the business of developing technology related to cancer imaging systems and conducts business through its wholly owned subsidiary, August Research Corporation.
 
 In prior years, the Company had been primarily engaged in the acquisition and exploration of mining properties, and was classified as an exploration stage company.
 
 c)  Going Concern
 
 The accompanying financial statements have been prepared assuming the Company will continue as a going concern.
 
  
 
  
 
 AUGUST BIOMEDICAL CORPORATION
 (Formerly Coyote Ventures Corp.)
 (A Development Stage Company)
 
 NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
 
 MAY 31, 2003
 (Unaudited)
 (Stated in U.S. Dollars)
 
 
 
 2.  NATURE OF OPERATIONS (Continued)
 
 c)  Going Concern (Continued)
 
 As shown in the accompanying financial statements, the Company has incurred a net loss of $719,179 for the period from May 26, 2000 (inception) to May 31, 2003, and has no sales. The future of the Company is dependent upon its ability to obtain financing and upon future profitable operations from the development of its technology. Management has plans to seek additional capital through a private placement and public offering of its common stock. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.
 
 
 3.  SIGNIFICANT ACCOUNTING POLICIES
 
 The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States. Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of estimates which have been made using careful judgement.
 
 The financial statements have, in managements opinion, been properly prepared within reasonable limits of materiality and within the framework of the significant accounting policies summarized below:
 
 a)  Consolidation
 
 These financial statements include the accounts of the Company and its wholly-owned subsidiaries, Coyote-Flint Exploration Corp. and August Research Corp., both British Columbia corporations.
 
 b)  Equipment
 
 Equipment is recorded at cost. Amortization of office equipment and laboratory equipment is calculated on a straight-line basis at annual rates of 30% and 20% respectively.
 
 
 
 
 
 
 
 AUGUST BIOMEDICAL CORPORATION
 (Formerly Coyote Ventures Corp.)
 (A Development Stage Company)
 
 NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
 
 MAY 31, 2003
 (Unaudited)
 (Stated in U.S. Dollars)
 
 
 
 3.  SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 c)  Intangible Asset
 
 The Company continually monitors its intangible assets to determine whether any impairment has occurred. In making such determination with respect to these assets, the Company evaluates the performance on an undiscounted cash flow basis, of the intangible assets or group of assets, which gave rise to an assets carrying amount. Should impairment be identified, a loss would be reported to the extent that the carrying value of the related intangible asset exceeds the fair value of that intangible asset using the discounted cash flow method. The Company has not amortized intangible assets as operations have not commenced.
 
 d)  Use of Estimates
 
 The preparation of financial statements in conformity with generally accepted accounting principles 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 for the reporting period. Actual results could differ from these estimates.
 
 e)  Foreign Currency Translation
 
 The Companys functional currency is the U.S. dollar. Transactions in foreign currency are translated into U.S. dollars as follows:
 
 i)  monetary items at the rate prevailing at the balance sheet date;
 ii)  non-monetary items at the historical exchange rate;
 iii)  revenue and expense at the average rate in effect during the applicable accounting period.
  
 
 
 
 AUGUST BIOMEDICAL CORPORATION
 (Formerly Coyote Ventures Corp.)
 (A Development Stage Company)
 
 NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
 
 MAY 31, 2003
 (Unaudited)
 (Stated in U.S. Dollars)
 
 
 
 3.  SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 f) Stock Based Compensation
 
 The Company accounts for stock based employee and director compensation arrangements in accordance with provisions of Accounting Principles Board (APB) Opinion No. 25  Accounting for Stock Issued to Employees, and related interpretations, and complies with the disclosure provisions of SFAS No. 123  Accounting for Stock Based Compensation. Under APB No. 25, compensation expense is based on the difference, if any, on the date the number of shares receivable is determined, between the estimated fair value of the Companys stock and the exercise price of options to purchase that stock. Stock based compensation arrangements for others are recorded at their fair value as the services are provided and the compensation earned.
 
 g)  Income Taxes
 
 The Company has adopted Statement of Financial Accounting Standards No. 109  Accounting for Income taxes (SFAS 109). This standard requires the use of an asset and liability approach for financial accounting, and reporting on income taxes. If it is more likely than not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized.
 
 h)  Basic and Diluted Loss Per Share
 
 In accordance with SFAS No. 128  Earnings Per Share, the basic loss per common share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding. Diluted loss per common share is computed similar to basic loss per common share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive.
 
 I) Mineral Property Option Payments and Exploration Costs
 
 The Company expenses all costs related to the maintenance and exploration of mineral claims in which it has secured exploration rights prior to establishment of proven and probable reserves. To date, the Company has not established the commercial feasibility of its exploration prospects, therefore, all costs are being expensed.
  
 
 
 
 AUGUST BIOMEDICAL CORPORATION
 (Formerly Coyote Ventures Corp.)
 (A Development Stage Company)
 
 NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
 
 MAY 31, 2003
 (Unaudited)
 (Stated in U.S. Dollars)
 
 
 
 4.  EQUIPMENT
 
 MAY 31
AUGUST 312003
2002Office equipment
$
2,481

$
2,481Laboratory equipment

37,955


9,84140,436


12,322Less: Accumulated amortization

(52,268
)

(1,331
)$
35,168

$
10,991
 
 
 5.  INTANGIBLE ASSETS
 
 Pursuant to a sale agreement dated August 16, 2002, the Company acquired a United States Patent for direct viewing of induced tissue fluorescence by a human viewer through an endoscope (the Technology). The Technology is subject to a royalty of 0.75% in favour of the British Columbia Cancer Foundation.
 
 In addition, the acquisition is subject to a provision requiring the Company to complete debt or equity financing to raise net proceeds of $200,000 within 90 days of the agreement, and a further $800,000 within 180 days of the agreement. In the event the Company does not raise the required funds within the time required, the vendor may, at his option, reacquire the Technology for a consideration equal to the purchase price paid by the Company. The Company has fulfilled the first provision by completing a private placement of 300,000 common shares at $1.00 per share for gross proceeds of $300,000.
 
 The Company did not raise the necessary $800,000 within the required timeframe. As a result, on June 11, 2003, the Company received notice from the vendor that they were exercising their option to reacquire the Technology for $20,000.
 
 
 6.  LOAN PAYABLE
 
 Loan payable is a short term unsecured bridge financing repayable on the earlier of the first major financing or August 30, 2003. The loan is repayable in the amount of $200,000 which includes interest.
 
 
 
 
 
 
 AUGUST BIOMEDICAL CORPORATION
 (Formerly Coyote Ventures Corp.)
 (A Development Stage Company)
 
 NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
 
 MAY 31, 2003
 (Unaudited)
 (Stated in U.S. Dollars)
 
 
 
 6.  LOAN PAYABLE (Continued)
 
 Subsequent to May 31, 2003, the Company entered into a loan and security agreement whereby the Company commenced paying the lender interest at 1% per month and repaying the $200,000 amount as follows: $25,000 on or before July 15, 2003 (not made); $75,000 on or before August 15, 2003; and the balance of $100,000 on or before September 15, 2003.
 
 
 7.  SHARE SUBSCRIPTIONS RECEIVED
 
 The Company approved the private placement of 3,000,000 units at $2.00 per unit. Each unit will consist of one common share and one warrant to purchase an additional common share at $3.00 for a period of eighteen months.
 
 
 8.  STOCK OPTION PLAN
 
 The Company adopted a stock option plan (the Plan) pursuant to which the directors may grant a maximum of 1,736,250 common stock options to officers, key employees and consultants. The Company granted 1,735,000 fully vested incentive stock options allowing the holders to purchase one common share of the Company at $2.50 per share for a term expiring September 9, 2004.
 
 The following is a summary of the stock option activity during the period ended May 31, 2003:
 
 NUMBER
OF
SHARES
WEIGHTED
AVERAGE
EXERCISE
PRICEOutstanding, August 31, 2002

-

$
-Granted

1,735,000


2.50Exercised

(40,000
)

(2.50
)Outstanding, May 31, 2003

1,695,000

$
2.50
   
 
 
 
 AUGUST BIOMEDICAL CORPORATION
 (Formerly Coyote Ventures Corp.)
 (A Development Stage Company)
 
 NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
 
 MAY 31, 2003
 (Unaudited)
 (Stated in U.S. Dollars)
 
 
 
 9.  RELATED PARTY TRANSACTIONS
 
 During the period ended May 31, 2003, the Company incurred consulting expenses of $146,147 to directors and officers.
 
 As at May 31, 2003, the Company has $6,095 in accounts payable owing to a director and officer.















Item 2. Managements Discussion and Analysis or Plan of Operations





Overview





Formerly, we were engaged in the business of developing medical devices to aid in the detection and localization of abnormal tissue that may be linked to cancer. We acquired proprietary technology that was to be incorporated into devices designed to allow direct viewing of induced tissue fluorescence which would help identify pathology through changes in the fluorescence signature of tissue. These technologies were acquired in August of 2002 and September of 2002, all of which is more particularly described below.





Due to our inability to obtain the necessary financing, management has decided to withdraw from the business of developing medical devices and plans to identify and evaluate other businesses and technology for acquisition.








CERVeyor TM Technology





We acquired the CERVeyor TM Technology from Nicolas B MacKinnon (the Vendor) by an agreement dated August 16, 2002 (the Acquisition Agreement). Under the terms of the Acquisition Agreement we paid $20,000 (the Purchase Price) to the Vendor to acquire the CERVeyor TM Technology. Under the terms of the Acquisition Agreement, Mr. MacKinnon would have the right to reacquire the CERVeyor TM Technology for $20,000 if we failed to complete financing to raise net proceeds of $200,000 US within 90 days of the date of the Acquisition Agreement (which financing has been completed) and a further $800,000 US within 180 days of the date of the Acquisition Agreement.





We have failed to raise $800,000 within 180 days of the date of the Acquisition Agreement. As a result, on June 11, 2003, we received notice from the Vendor that he was exercising his option to re-acquire the CERVeyor TM Technology . In accordance with the terms of the Acquisition Agreement, we received from the Vendor the original purchase price we paid in the amount of $20,000 in consideration of the transfer of the CERVeyor TM Technology by us back to the Vendor.





We no longer have any assets or rights in connection with the CERVeyor TM Technology.





ORALview Technology





We entered into an option agreement dated September 9, 2002 (the Biomax Option Agreement) with Biomax Technologies (the Optionor). Under the terms of the Biomax Option Agreement we paid $20,000 to acquire an option to acquire United States Patent Number 6,021,344, a patent covering a fluorescence scope system for dermatologic diagnosis (the ORALview Technology). In order to exercise the option, we were required to pay $180,000 US to the Optionor on or before January 30, 2003. We were able to extend the date for payment and we secured a loan from 648613 BC Ltd. (the Lender) that enabled us to pay the Optionor and exercise this option. Under the terms of the original loan, the indebtedness was payable on August 30, 2003, together with a bonus of $20,000 US to cover interest costs. On July 9, 2003, we entered into a Loan and Security Agreement with the Lender whereby the Lender agreed to forgo exercising its right to demand immediate payment $200,000 US on August 30, 2003 in consideration for us doing the following:








3








1.  Securing the obligations to the Lender with our interest in the patents and patent applications (the Patents) covering the technology for Fluorescence Scope System for Dermatologic Diagnosis (the ORALview Technology).





2.  Paying the Lender interest of 1% per month commencing on the date of the Loan and Security Agreement.





3.  Repaying the principal amount of $200,000 US as follows:





a)  $25,000 on or before July 15, 2003;


b)  $75,000 on or before August 15, 2003;


c)  the balance of $100,000 on or before September 15, 2003.





The obligations are secured by an assignment of our rights in the Patents. In the event of a default under the Loan and Security Agreement, the Lender may give us five days notice and in the event that we fail to correct the default within five days, the Lender will acquire our interest in the Patents and the Indebtedness and any outstanding interest thereon will be extinguished.





We did not make our first payment due on or before July 15, 2003 and are currently in default. Accordingly, the lender is entitled to exercise its right to acquire the ORALview Technology under the Loan and Security Agreement.





Plan of Operations:





We are withdrawing from developing medical devices which aid in the detection and localization of abnormal tissue that may be linked to cancer. Our plan of operations is to identify and evaluate other businesses and technology to acquire.





We can provide no assurance that we will be successful in acquiring other businesses or technology due to our limited working capital. We anticipate that if we are successfully able to identify technology or businesses for acquisition, we will require additional financing in order to enable us to complete the acquisition. However, we can provide no assurance that if we pursue additional financing we will receive any financing.





We currently have forecasted the expenditure of approximately $50,000 during the next six to twelve months in order to remain in compliance with the reporting requirements of the Securities Exchange Act of 1934 and to identify additional businesses and technology for acquisition. If we are successful and identify a business or technology to acquire, we will need additional financing to complete this acquisition.





At May 31, 2003, we had cash of $3,489. During the three month period ended May 31, 2003, we incurred expenses of $288,000.





The completion of our business plan for the next 12 months is contingent upon us obtaining additional financing. If we are unable to obtain additional financing, our business plan will be significantly delayed. Without any additional financing, our operations can continue for approximately 90 days. We do not have any formal commitments or arrangements for the advancement or loan of funds. Without the necessary cash flow, we will not be able to pursue our plan of operations until such time as the necessary funds are raised in the equity securities market.








4







We do not anticipate purchasing any real property or significant equipment during the next 12 months.





At the present time we have no employees and primarily further our business pursuits through the use of consultants. We no longer anticipate hiring several key employees in early 2003.





FORWARD LOOKING STATEMENTS





The information in this discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements involve risks and uncertainties, including statements regarding our capital needs, business strategy and expectations. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may", "will", "should", "expect", "plan", "intend", "anticipate", "believe", "estimate", "predict", "potential" or "continue", the negative of such terms or other comparable terminology. Actual events or results may differ materially. In evaluating these statements, you should consider various factors, including the risks outlined below, and, from time to time, in other reports we file with the SEC. These factors may cause the our actual results to differ materially from any forward-looking statement. We disclaim any obligation to publicly update these statements, or disclose any difference between its actual results and those reflected in these statements. The information constitutes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.





ITEM 3.  CONTROLS AND PROCEDURES.






As required by Rule 13a-14 under the Securities Exchange Act of 1934 (the Exchange Act), we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures within the 90 days prior to the filing date of this report. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer, Mr. Scott C. Houghton and Chief Financial Officer, Ms. Korina Houghton. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective in timely alerting management to material information relating to us which is required to be included in our periodic SEC filings. There have been no significant changes in our internal controls or in other factors that could significantly affect internal controls subsequent to the date we carried out our evaluation.








Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.







5











PART II - OTHER INFORMATION





Item 1. Legal Proceedings





On July 4, 2003, Peter Whitehead, filed a lawsuit in the Supreme Court of British Columbia against August Biomedical Corp. and August Research Corp. Mr. Whitehead is a former director and officer of both August Biomedical Corp. and its wholly-owned subsidiary, August Research Corp. Mr. Whitehead is alleging that the August Biomedical Corp. and August Research Corp. failed to pay him compensation in accordance with his employment agreement. Mr. Whitehead is seeking the following relief: (a) 1.5 million shares of August Biomedical Corp.; (b) $40,070 for unpaid expenses plus the value of 200,000 stock options; (c) an unspecified amount of general damages for wrongful dismissal and breach of contract; (d) pre-judgment interest in accordance with the Court Order Interest Act ; and (e) costs associated with the litigation.





August Biomedical Corp. and August Research Corp. have until August 7, 2003 to file an answer and also anticipate filing a counterclaim in this matter. Management does not anticipate that this litigation will have a material effect on the operations of the company.





Item 2. Changes in Securities





None








Item 3. Defaults upon Senior Securities





None.








Item 4. Submission of Matters to a Vote of Security Holders





No matters were submitted to our security holders for a vote during the fiscal quarter ended May 31, 2003.








Item 5. Other Information





None.








6











Item 6. Exhibits and Reports on Form 8-K.





EXHIBITS REQUIRED BY ITEM 601 OF REGULATION SB


Exhibit Number
Description of Exhibit10.1

99.1


99.2
Loan and Security Agreement (1)

Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (2)

Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (2)





(1) Previously filed as an Exhibit on Form 8-K filed July 10, 2003


(2)  Filed as an Exhibit to this Quarterly Report on Form 10-QSB








REPORTS ON FORM 8-K





We did not file any Current Reports on Form 8-K during the fiscal quarter ended May 31, 2003.





Subsequent to this reporting period on July 10, 2003, we filed a Current Report on Form 8-K. In this report, we disclosed that Mr. Mackinnon exercised his option to re-acquire the CERVeyor TM Technology, we entered into a Loan and Security Agreement with 648613 BC Ltd. (the Lender) which provided us debt financing in the amount of $180,000 US, and that as of June 12, 2003, Mr. Peter Whitehead resigned as a director and officer of our wholly owned subsidiary, August Research Corp.











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SIGNATURES


In accordance with the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.





AUGUST BIOMEDICAL CORPORATION





Date:  July 21, 2003







By:           _____________________________


Scott C. Houghton


President


Principal Executive Officer


Principal Accounting Officer








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CERTIFICATIONS





I, Scott C. Houghton, certify that;





(1) I have reviewed this quarterly report on Form10-QSB of August Biomedical Corporation;





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





(3) Based on my knowledge, the financial statements, and other financial information included in this quarterly 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 quarterly report;





(4) The Registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the Registrant and have:





a) designed such disclosure controls and procedures 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 quarterly report is being prepared;





b) evaluated the effectiveness of the Registrants disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the Evaluation Date); and





c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;





(5) The Registrants other certifying officers and I have disclosed, based on our most recent evaluation, to the Registrants auditors and the audit committee of Registrants board of directors (or persons performing the equivalent functions):





a) all significant deficiencies in the design or operation of internal controls which could adversely affect the Registrants ability to record, process, summarize and report financial data and have identified for the Registrants auditors any material weaknesses in internal controls; and





b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrants internal controls; and





(6) The Registrants other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other facts that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.










Date: July 21, 2003 ___________________________________


Scott C. Houghton


Chief Executive Officer






















CERTIFICATIONS





I, Korina Houghton, certify that;





(1)  I have reviewed this quarterly report on Form10-QSB of August Biomedical Corporation;





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





(3)  Based on my knowledge, the financial statements, and other financial information included in this quarterly 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 quarterly report;





(4)  The Registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the Registrant and have:





a) designed such disclosure controls and procedures 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 quarterly report is being prepared;





b) evaluated the effectiveness of the Registrants disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the Evaluation Date); and





c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;





(5)  The Registrants other certifying officers and I have disclosed, based on our most recent evaluation, to the Registrants auditors and the audit committee of Registrants board of directors (or persons performing the equivalent functions):





a) all significant deficiencies in the design or operation of internal controls which could adversely affect the Registrants ability to record, process, summarize and report financial data and have identified for the Registrants auditors any material weaknesses in internal controls; and





b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrants internal controls; and





(6)  The Registrants other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other facts that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.











Date: July 21, 2003 ___________________________________


Korina Houghton


Chief Financial Officer