Table of Contents

 

 

 

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

 

**Form 10-Q**

 

**(Mark One)**

 

**x****  QUARTERLY REPORT UNDER SECTION 13 OR15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

 

**For the quarterly period ended September 30, 2010**

 

**OR**

 

**o  TRANSITION REPORT UNDER SECTION 13 OR15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

 

**For the transition period from              to              **

 

**COMMISSION****FILE NUMBER 333-142076**

 

**IRIS BIOTECHNOLOGIES INC.**

(ExactName of small business issuer as specified in its charter)

 

| **California**                  | ** ** | **77-0506396**      |
|---------------------------------|------------|---------------------|
| (State or other jurisdiction of |       | (I.R.S. Employer    |
| incorporation or organization)  |       | Identification No.) |

 

**5201 Great America Parkway, Suite 320, Santa Clara,California 95054**

(Addressof principal executive offices) (Zip Code)

 

Issuer’stelephone Number: **(408) 867-2885**

 

Indicateby check mark whether the issuer (1) filed all reports required to befiled by Section 13 or 15(d) of the Exchange Act during the preceding12 months (or for such shorter period that the registrant was required to filesuch reports), and (2) has been subject to such filing requirements forthe past 90 days.  Yes x No o

 

Indicateby check mark whether the registrant has submitted electronically and posted onits corporate Web site, if any, every Interactive Data File required to besubmitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 ofthis chapter) during the preceding 12 months (or for such shorter period thatthe registrant was required to submit and post such files).  Yes oNo o

 

Indicateby check mark whether the registrant is a large accelerated filer, anaccelerated filer, a non-accelerated filer, or a smaller reporting company. Seedefinitions of “large accelerated filer,” “accelerated filer,” and “smallerreporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

| Large accelerated filer o                     |   | Accelerated filer o         |
|-----------------------------------------------|--------|----------------------------------|
|                                          |   |                             |
| Non-accelerated filer o                       |   | Smaller reporting company x |
| (Do not check if a smaller reporting company) |   |                             |

 

Indicateby check mark whether the registrant is a shell company (as defined inRule 12b-2 of the Exchange Act).  Yeso No x

 

Asof November 15, 2010 the issuer had 11,620,913  outstanding shares of Common Stock.

 

 

 

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TABLEOF CONTENTS

 
| ** ** | ** **                                                                                 | **Page** |
|------------|--------------------------------------------------------------------------------------------|----------|
|       | PART I                                                                                |     |
| Item 1.    | Financial Statements                                                                       | 3        |
| Item 2.    | Management’s  Discussion and Analysis of Financial Condition and Results of Operation | 19       |
| Item 3.    | Quantitative  and Qualitative Disclosures About Market Risk                                | 23       |
| Item 4T    | Controls and  Procedures                                                                   | 24       |
|       |                                                                                       |     |
|       | PART II                                                                               |     |
| Item 1.    | Legal Proceedings                                                                          | 24       |
| Item 1A.   | Risk Factors                                                                               | 24       |
| Item 2.    | Unregistered  Sales of Equity Securities and Use of Proceeds                               | 24       |
| Item 3.    | Defaults  Upon Senior Securities                                                           | 24       |
| Item 4.    | Reserved                                                                                   | 25       |
| Item 5.    | Other Information                                                                          | 25       |
| Item 6.    | Exhibits                                                                                   | 25       |

 

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**PART I**

 

**ITEM 1. FINANCIAL STATEMENTS.**

 

**INDEX TO FINANCIAL STATEMENTS**

 
| ** **                                                                                                                                                                                            | **Page** |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------|
| Condensed Balance  Sheets as of September 30, 2010 (unaudited) and December 31, 2009                                                                                                        | 4        |
|                                                                                                                                                                                                  |     |
| Unaudited  Condensed Statements of Losses for the three and nine months ended  September 30, 2010, 2009 and the period February 16, 1999 (date of  inception) to September 30, 2010    | 5        |
|                                                                                                                                                                                                  |     |
| Unaudited Condensed Statement of Stockholders’ Deficit  from January 1, 2010 to September 30, 2010                                                                                     | 6        |
|                                                                                                                                                                                                  |     |
| Unaudited Condensed Statements of Cash Flows for the  three and nine months ended September 30, 2010, 2009 and the period  February 16, 1999 (date of inception) to September 30, 2010 | 7        |
|                                                                                                                                                                                                  |     |
| Notes to the Unaudited Condensed Financial Statements                                                                                                                                                 | 8        |

 

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**IRISBIOTECHNOLOGIES, INC**

**(adevelopment stage company)**

**CONDENSED BALANCE SHEETS**

 
| ** **                                                                                                                                                                                            | ** ** | **September 30,** | ** ** | **December 31,** | ** ** |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|------------------------|------------|-----------------------|------------|
| ** **                                                                                                                                                                                            | ** ** | **2010**               | ** ** | **2009**              | ** ** |
| ** **                                                                                                                                                                                            | ** ** | **(unaudited)**        | ** ** | ** **            | ** ** |
| ASSETS                                                                                                                                                                                                |       |                   |       |                  |       |
| Current  assets:                                                                                                                                                                                      |       |                   |       |                  |       |
| Cash                                                                                                                                                                                                  |       | $                      | 121        |                  | $          | 442 |   |
| Total  current assets                                                                                                                                                                                 |       | 121                    |       | 442                   |       |
|                                                                                                                                                                                                  |       |                   |       |                  |       |
| Property,  plant and equipment, net of accumulated depreciation of $195,951 and $183,130  as of September 30, 2010 and December 31, 2009, respectively                                      |       | 36,067                 |       | 48,888                |       |
|                                                                                                                                                                                                  |       |                   |       |                  |       |
| Total  assets                                                                                                                                                                                         |       | $                      | 36,188     |                  | $          | 49,330 |   |
|                                                                                                                                                                                                  |       |                   |       |                  |       |
| LIABILITIES  AND STOCKHOLDERS’ DEFICIT                                                                                                                                                           |       |                   |       |                  |       |
| Current  liabilities:                                                                                                                                                                                 |       |                   |       |                  |       |
| Accounts  payable and accrued liabilities                                                                                                                                                             |       | $                      | 106,372    |                  | $          | 78,452 |   |
| Notes  payable, related party                                                                                                                                                                         |       | 65,200                 |       | 98,500                |       |
| Total  current liabilities                                                                                                                                                                            |       | 171,572                |       | 176,952               |       |
|                                                                                                                                                                                                  |       |                   |       |                  |       |
| Long  term debt:                                                                                                                                                                                      |       |                   |       |                  |       |
| Notes  payable, related party                                                                                                                                                                         |       | 38,000                 |       | 38,000                |       |
| Note  payable, net of debt discount of $14,012 and $-0- as of September 30,  2010 and December 31, 2009, respectively                                                                       |       | 82,442                 |       | 15,000                |       |
| Total  liabilities                                                                                                                                                                                    |       | 292,014                |       | 229,952               |       |
|                                                                                                                                                                                                  |       |                   |       |                  |       |
| STOCKHOLDERS’  DEFICIT                                                                                                                                                                           |       |                   |       |                  |       |
| Preferred  stock, no par or stated value; 5,000,000 shares authorized; no shares issued  and outstanding as of September 30, 2010 and December 31, 2009                                     |       | —                 |       | —                |       |
| Common  stock, no par or stated value; 20,000,000 shares authorized; 11,584,173 and  11,230,526 shares issued and outstanding as of September 30, 2010 and  December 31, 2009, respectively |       | 5,440,638              |       | 5,028,781             |       |
| Additional  paid in capital                                                                                                                                                                           |       | 2,068,905              |       | 1,949,838             |       |
| Common  stock to be issued                                                                                                                                                                            |       | 10,000                 |       | —                |       |
| Common  stock subscription receivable                                                                                                                                                                 |       | (170,625               | )          | (108,750              | )          |
| Deficit  accumulated during development stage                                                                                                                                                         |       | (7,604,744             | )          | (7,050,491            | )          |
| Total  stockholders’ deficit                                                                                                                                                                     |       | (255,826               | )          | (180,622              | )          |
|                                                                                                                                                                                                  |       |                   |       |                  |       |
| Total  liabilities and stockholders’ deficit                                                                                                                                                     |       | $                      | 36,188     |                  | $          | 49,330 |   |

 

The accompanying notes are anintegral part of these unaudited condensed financial statements

 

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**IRIS BIOTECHNOLOGIES, INC**

**(adevelopment stage company)**

**CONDENSED STATEMENTS OF LOSSES**

**(unaudited)**

 
| ** **                                                                    | ** ** | **Three months ended September 30,** | ** ** | **Nine months ended September 30,** | ** ** | **For the period from  February 16, 1999 (date  of inception) through** | ** ** |
|-------------------------------------------------------------------------------|------------|----------------------------------------------------------|------------|---------------------------------------------------------|------------|-----------------------------------------------------------------------------------------------------------------|------------|
| ** **                                                                    | ** ** | **2010**                                                 | ** ** | **2009**                                                | ** ** | **2010**                                                                                                        | ** ** | **2009** | ** ** | **September 30, 2010** | ** ** |
| Operating  expenses:                                                          |       |                                                     |       |                                                    |       |                                                                                                            |       |   |   |   |   |
| Selling,  general and administrative                                          |       | $                                                        | 204,220    |                                                    | $          | 40,522                                                                                                          |       | $ | 483,358 |   | $ | 950,980 |   | $ | 4,145,981 |   |
| Research  and development (Note 1)                                            |       | 2,247                                                    |       | —                                                  |       | 51,343                                                                                                          |       | 30,622 |   | 1,428,881 |   |
| Impairment  of intellectual property                                          |       | —                                                   |       | —                                                  |       | —                                                                                                          |       | — |   | 1,838,250 |   |
| Depreciation                                                                  |       | 3,909                                                    |       | 4,457                                                   |       | 12,822                                                                                                          |       | 13,340 |   | 195,626 |   |
| Total  operating expenses                                                     |       | 210,376                                                  |       | 44,979                                                  |       | 547,523                                                                                                         |       | 994,942 |   | 7,608,738 |   |
|                                                                          |       |                                                     |       |                                                    |       |                                                                                                            |       |   |   |   |   |
| Net loss  from operations                                                     |       | (210,376                                                 | )          | (44,979                                                 | )          | (547,523                                                                                                        | )          | (994,942 | ) | (7,608,738 | ) |
|                                                                          |       |                                                     |       |                                                    |       |                                                                                                            |       |   |   |   |   |
| Other  income (expense)                                                       |       |                                                     |       |                                                    |       |                                                                                                            |       |   |   |   |   |
| Interest  income (expense)                                                    |       | (3,706                                                   | )          | (47                                                     | )          | (6,731                                                                                                          | )          | (47 | ) | 3,993 |   |
|                                                                          |       |                                                     |       |                                                    |       |                                                                                                            |       |   |   |   |   |
| Net loss  before provision for income taxes                                   |       | (214,081                                                 | )          | (45,026                                                 | )          | (554,253                                                                                                        | )          | (994,989 | ) | (7,604,744 | ) |
|                                                                          |       |                                                     |       |                                                    |       |                                                                                                            |       |   |   |   |   |
| Income  taxes                                                                 |       | —                                                   |       | —                                                  |       | —                                                                                                          |       | — |   | — |   |
|                                                                          |       |                                                     |       |                                                    |       |                                                                                                            |       |   |   |   |   |
| Net Loss                                                                      |       | $                                                        | (214,081   | )                                                       | $          | (45,026                                                                                                         | )          | $ | (554,253 | ) | $ | (994,989 | ) | $ | (7,604,744 | ) |
|                                                                          |       |                                                     |       |                                                    |       |                                                                                                            |       |   |   |   |   |
| Loss per  common share-basic and fully diluted                                |       | $                                                        | (0.02      | )                                                       | $          | (0.00                                                                                                           | )          | $ | (0.05 | ) | $ | (0.09 | ) | $ | (0.78 | ) |
|                                                                          |       |                                                     |       |                                                    |       |                                                                                                            |       |   |   |   |   |
| Weighted  average number of common shares outstanding-basic and fully diluted |       | 11,554,404                                               |       | 11,187,764                                              |       | 11,318,128                                                                                                      |       | 11,090,184 |   | 9,714,554 |   |

 

The accompanying notes are anintegral part of these unaudited condensed financial statements

 

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**IRISBIOTECHNOLOGIES, INC**

**(adevelopment stage company)**

**CONDENSED STATEMENT OF STOCKHOLDERS’ DEFICIT**

**FROM JANUARY1, 2010 THROUGH SEPTEMBER 30, 2010**

**(Unaudited)**
|                                                                                             |       |                      |       |                   |       |           |       |       |       |                          |       |                       |       |                         |       |             |       |                       |       |      |       |   |   |   |       |   |   |     |   |
|--------------------------------------------------------------------------------------------------|------------|---------------------------|------------|------------------------|------------|----------------|------------|------------|------------|-------------------------------|------------|----------------------------|------------|------------------------------|------------|------------------|------------|----------------------------|------------|-----------|------------|--------|--------|--------|------------|--------|--------|----------|--------|
| ** **                                                                                       | ** ** | ** **                | ** ** | ** **             | ** ** | ** **     | ** ** | **Common** | ** ** | ** **                    | ** ** | ** **                 | ** ** | **Deficit accumulated** | ** ** | ** **       | ** ** |
| ** **                                                                                       | ** ** | **Preferred shares** | ** ** | **Common shares** | ** ** | **Additional** | ** ** | **Stock**  | ** ** | **Subscription**              | ** ** | **Deferred**               | ** ** | **during**                   | ** ** | ** **       | ** ** |
| ** **                                                                                       | ** ** | **Stock**                 | ** ** | **Amount**             | ** ** | **Stock**      | ** ** | **Amount** | ** ** | **Paid in Capital** | ** ** | **To be Issued** | ** ** | **Receivable**               | ** ** | **Compensation** | ** ** | **Development stage** | ** ** | **Total** | ** ** |
| Balance,  January 1, 2010                                                                   |       | —                    |       | $                      | —     |           | 11,230,526 |       | $          | 5,028,781                     |       | $                          | 1,949,838  |                         | $          | —           |       | $                          | (108,750   | )         | $          | — |   | $      | (7,050,491 | )      | $      | (180,622 | )      |
| Common  stock issued in January 2010 at $1.00 per share for accrual                         |       | —                    |       | —                 |       | 8,000          |       | 8,000      |       | —                        |       | —                     |       | —                       |       | —           |       | —                     |       | 8,000     |       |
| Common  stock issued at $0.88 per share in exchange for compensation shown as accrual            |       | —                    |       | —                 |       | 25,000         |       | 22,000     |       | —                        |       | —                     |       | —                       |       | —           |       | —                     |       | 22,000    |       |
| Common  stock issued in February 2010 at $1.00 per share in exchange for  services rendered |       | —                    |       | —                 |       | 8,000          |       | 8,000      |       | —                        |       | —                     |       | —                       |       | —           |       | —                     |       | 8,000     |       |
| Common  stock issued in March 2010 at $1.00 per share in exchange for services  rendered    |       | —                    |       | —                 |       | 8,000          |       | 8,000      |       | —                        |       | —                     |       | —                       |       | —           |       | —                     |       | 8,000     |       |
| Sale of  common stock in March 2010 at $1.00 per share                                      |       | —                    |       | —                 |       | 25,000         |       | 25,000     |       | —                        |       | —                     |       | —                       |       | —           |       | —                     |       | 25,000    |       |
| Common  stock issued in April 2010 at $1.13 per share in exchange for services  rendered    |       | —                    |       | —                 |       | 8,000          |       | 9,040      |       | —                        |       | —                     |       | —                       |       | —           |       | —                     |       | 9,040     |       |
| Sale of  common stock in April 2010 at $1.00 per share                                      |       | —                    |       | —                 |       | 5,000          |       | 5,000      |       | —                        |       | —                     |       | —                       |       | —           |       | —                     |       | 5,000     |       |
| Sale of  common stock in April 2010 at $1.16 per share                                      |       | —                    |       | —                 |       | 53,100         |       | 60,002     |       | —                        |       | —                     |       | —                       |       | —           |       | —                     |       | 60,002    |       |
| Common  stock issued in April 2010 at $0.85 per share in exchange for services  rendered    |       | —                    |       | —                 |       | 25,000         |       | 21,250     |       | —                        |       | —                     |       | —                       |       | —           |       | —                     |       | 21,250    |       |
| Sale of  common stock in May 2010 at $1.35 per share                                        |       | —                    |       | —                 |       | 9,815          |       | 13,250     |       | —                        |       | —                     |       | —                       |       | —           |       | —                     |       | 13,250    |       |
| Sale of  common stock in May 2010 at $1.75 per share                                        |       | —                    |       | —                 |       | 2,857          |       | 5,000      |       | —                        |       | —                     |       | —                       |       | —           |       | —                     |       | 5,000     |       |
| Common  stock issued in May 2010 at $2.19 per share in exchange for services  rendered      |       | —                    |       | —                 |       | 8,000          |       | 17,520     |       | —                        |       | —                     |       | —                       |       | —           |       | —                     |       | 17,520    |       |
| Common  stock issued in May 2010 at $1.89 per share in exchange for services  rendered      |       | —                    |       | —                 |       | 8,000          |       | 15,120     |       | —                        |       | —                     |       | —                       |       | —           |       | —                     |       | 15,120    |       |
| Common  stock issued in June 2010 at $1.84 per share in exchange for services  rendered     |       | —                    |       | —                 |       | 25,000         |       | 46,000     |       | —                        |       | —                     |       | —                       |       | —           |       | —                     |       | 46,000    |       |
| Common  stock issued in July 2010 at $1.81 per share in exchange for services  rendered     |       | —                    |       | —                 |       | 40,000         |       | 72,400     |       | —                        |       | —                     |       | —                       |       | —           |       | —                     |       | 72,400    |       |
| Common  stock issued in July 2010 at $1.80 per share in exchange for services  rendered     |       | —                    |       | —                 |       | 8,000          |       | 14,400     |       | —                        |       | —                     |       | —                       |       | —           |       | —                     |       | 14,400    |       |
| Common  stock issued in July 2010 for options exercised                                     |       | —                    |       | —                 |       | 86,875         |       | 61,875     |       | —                        |       | —                     |       | (61,875                      | )          | —           |       | —                     |       | —    |       |
| Common  stock subscription received                                                              |       | —                    |       | —                 |       | —         |       | —     |       | —                        |       | 10,000                     |       | —                       |       | —           |       | —                     |       | 10,000    |       |
| Beneficial  conversion feature attributable to convertible debt                                  |       | —                    |       | —                 |       | —         |       | —     |       | 15,176                        |       | —                     |       | —                       |       | —           |       | —                     |       | 15,176    |       |
| Fair  value of vested options issued for services                                                |       | —                    |       | —                 |       | —         |       | —     |       | 103,891                       |       | —                     |       | —                       |       | —           |       | —                     |       | 103,891   |       |
| Net loss                                                                                         |       | —                    |       | —                 |       | —         |       | —     |       | —                        |       | —                     |       | —                       |       | —           |       | (554,253                   | )          | (554,253  | )          |
| Balance,  September 30, 2010                                                                |       | —                    |       | $                      | —     |           | 11,584,173 |       | $          | 5,440,638                     |       | $                          | 2,068,905  |                         | $          | 10,000           |       | $                          | (170,625   | )         | $          | — |   | $      | (7,604,744 | )      | $      | (255,826 | )      |

 

The accompanying notes are anintegral part of these unaudited condensed financial statements

 

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**IRISBIOTECHNOLOGIES, INC**

**(adevelopment stage company)**

**CONDENSED STATEMENTS OF CASH FLOWS**

**(unaudited)**

 
| ** **                                                                  | ** ** | **For the nine months ended September 30,** | ** ** | **For the period from  February 16, 1999 (date of  inception) through** | ** ** |
|-----------------------------------------------------------------------------|------------|---------------------------------------------------------------------------|------------|-----------------------------------------------------------------------------------------------------------------|------------|
| ** **                                                                  | ** ** | **2010**                                                                  | ** ** | **2009**                                                                                                        | ** ** | **September 30, 2010** | ** ** |
| CASH  FLOWS FROM OPERATING ACTIVITIES:                                      |       |                                                                      |       |                                                                                                            |       |   |   |
| Net loss                                                                    |       | $                                                                         | (554,253   | )                                                                                                               | $          | (994,989 | ) | $ | (7,604,744 | ) |
| Adjustments  to reconcile net loss to cash (used in) operating activities:  |       |                                                                      |       |                                                                                                            |       |   |   |
| Depreciation                                                                |       | 12,821                                                                    |       | 13,340                                                                                                          |       | 195,625 |   |
| Amortization  of deferred compensation                                      |       | —                                                                    |       | —                                                                                                          |       | 46,926 |   |
| Amortization  of beneficial conversion feature relating to convertible debt |       | 1,164                                                                     |       | —                                                                                                          |       | 1,164 |   |
| Common  stock issued in exchange for services rendered                      |       | 211,730                                                                   |       | 58,789                                                                                                          |       | 476,669 |   |
| Impairment  of intellectual property                                        |       | —                                                                    |       | —                                                                                                          |       | 1,800,000 |   |
| Options  and warrants issued in exchange for services rendered              |       | 103,891                                                                   |       | 760,561                                                                                                         |       | 2,006,803 |   |
| Increase  (decrease) in:                                                    |       |                                                                      |       |                                                                                                            |       |   |   |
| Accounts  payable and accrued liabilities                                   |       | 57,920                                                                    |       | 31,419                                                                                                          |       | 126,270 |   |
| Net cash  (used in) operating activities:                                   |       | (166,727                                                                  | )          | (130,880                                                                                                        | )          | (2,951,287 | ) |
|                                                                        |       |                                                                      |       |                                                                                                            |       |   |   |
| CASH  FLOWS FROM INVESTING ACTIVITIES:                                      |       |                                                                      |       |                                                                                                            |       |   |   |
| Acquisition  of property, plant and equipment                               |       | —                                                                    |       | (7,303                                                                                                          | )          | (221,591 | ) |
| Net cash  (used in) investing activities:                                   |       | —                                                                    |       | (7,303                                                                                                          | )          | (221,591 | ) |
|                                                                        |       |                                                                      |       |                                                                                                            |       |   |   |
| CASH  FLOWS FROM FINANCING ACTIVITIES:                                      |       |                                                                      |       |                                                                                                            |       |   |   |
| Proceeds  from issuance of note payable                                     |       | 81,454                                                                    |       | —                                                                                                          |       | 81,454 |   |
| Proceeds  from sale of common stock and common stock subscriptions          |       | 118,252                                                                   |       | 22,650                                                                                                          |       | 2,930,845 |   |
| Exercise  of common stock options                                           |       | —                                                                    |       | 5,000                                                                                                           |       | 42,500 |   |
| Net  (payments) proceeds, related party                                     |       | (33,300                                                                   | )          | 113,500                                                                                                         |       | 118,200 |   |
| Net cash  provided by financing activities                                  |       | 166,406                                                                   |       | 141,150                                                                                                         |       | 3,172,999 |   |
|                                                                        |       |                                                                      |       |                                                                                                            |       |   |   |
| Increase  (decrease) in cash and cash equivalents                           |       | (321                                                                      | )          | 2,967                                                                                                           |       | 121 |   |
| Cash and  cash equivalents beginning of period                              |       | 442                                                                       |       | 990                                                                                                             |       | — |   |
| Cash and  cash equivalents end of period                                    |       | $                                                                         | 121        |                                                                                                            | $          | 3,957 |   | $ | 121 |   |
|                                                                        |       |                                                                      |       |                                                                                                            |       |   |   |
| Supplemental  disclosures of cash flow information:                         |       |                                                                      |       |                                                                                                            |       |   |   |
| Cash  paid during the period for interest                                   |       | $                                                                         | —     |                                                                                                            | $          | — |   | $ | 277 |   |
| Cash  paid during the period for taxes                                      |       | $                                                                         | —     |                                                                                                            | $          | — |   | $ | — |   |
| Non cash  financing activities:                                             |       |                                                                      |       |                                                                                                            |       |   |   |
| Common  stock issued in exchange for intellectual property                  |       | $                                                                         | —     |                                                                                                            | $          | — |   | $ | 1,800,000 |   |
| Subscription  receivable on exercise of options                             |       | $                                                                         | 61,875     |                                                                                                            | $          | — |   | $ | 170,625 |   |

 

The accompanying notes are anintegral part of these unaudited condensed financial statements

 

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**IRISBIOTECHNOLOGIES INC.**

**(Adevelopment stage company)**

**NOTES TO THE CONDENSED FINANCIAL STATEMENTS**

**SEPTEMBER30, 2010**

**(Unaudited)**

 

**NOTE 1 — SUMMARY OFSIGNIFICANT ACCOUNTING POLICIES**

 

A summary of the significantaccounting policies applied in the preparation of the accompanying unauditedcondensed financial statements follows.

 

General

 

The accompanying unaudited condensedfinancial statements have been prepared in accordance with accountingprinciples generally accepted in the United States of America for interimfinancial information and with the instructions to Form 10-Q. Accordingly,they do not include all of the information and footnotes required by generallyaccepted accounting principles for complete financial statements.

 

In the opinion of management, alladjustments (consisting of normal recurring accruals) considered necessary fora fair presentation have been included. Accordingly, the results fromoperations for the nine month period ended September 30, 2010, are not necessarilyindicative of the results that may be expected for the year endedDecember 31, 2010. The unaudited condensed financial statements should beread in conjunction with the December 31, 2009 financial statements andfootnotes thereto included in the Company’s Form 10-K filed onMarch 31, 2010.

 

Business and Basis of Presentation

 

Iris BioTechnologies Inc. (the “Company”)was incorporated on February 16, 1999 under the laws of the State ofCalifornia. The Company is in the development stage as defined under AccountingStandards Codification subtopic 915-10 Development Stage Entities and itsefforts are principally devoted to developing solutions for the detection andmonitoring of monogenic and complex genomic diseases. The Company has notgenerated any revenue to date and consequently its operations are subject toall risks inherent in the establishment of a new business enterprise. For theperiod from inception through September 30, 2010, the Company hasaccumulated losses of $7,604,744.

 

Cash and Cash Equivalents

 

For purposes of the Statements ofCash Flows, the Company considers all highly liquid debt instruments purchasedwith a maturity date of three months or less to be cash equivalents.

 

Property and Equipment

 

Property and equipment are stated atcost. When retired or otherwise disposed, the related carrying value andaccumulated depreciation are removed from the respective accounts and the netdifference less any amount realized from disposition, is reflected in earnings.For financial statement purposes, property and equipment are recorded at costand depreciated using the straight-line method over their estimated usefullives of 3 to 5 years.

 

8

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Table of Contents

 

**IRISBIOTECHNOLOGIES INC.**

**(Adevelopment stage company)**

**NOTES TO THECONDENSED FINANCIAL STATEMENTS**

**SEPTEMBER30, 2010**

**(Unaudited)**

 

**NOTE 1 — SUMMARY OFSIGNIFICANT ACCOUNTING POLICIES (continued)**

 

Long-Lived Assets

 

The Company has adopted AccountingStandards Codification subtopic 360-10, Property, plant and equipment (“ASC360-10”). The Statement requires that long-lived assets and certainidentifiable intangibles held and used by the Company be reviewed forimpairment whenever events or changes in circumstances indicate that thecarrying amount of an asset may not be recoverable. Events relating torecoverability may include significant unfavorable changes in businessconditions, recurring losses, or a forecasted inability to achieve break-evenoperating results over an extended period. The Company evaluates therecoverability of long-lived assets based upon forecasted undiscounted cashflows. Should impairment in value be indicated, the carrying value ofintangible assets will be adjusted, based on estimates of future discountedcash flows resulting from the use and ultimate disposition of the asset. ASC360-10 also requires assets to be disposed of be reported at the lower of thecarrying amount or the fair value less costs to sell.

 

Income Taxes

 

The Company follows AccountingStandards Codification subtopic 740-10, Income Taxes (“ASC 740-10”) forrecording the provision for income taxes. Deferred tax assets and liabilitiesare computed based upon the difference between the financial statement andincome tax basis of assets and liabilities using the enacted marginal tax rateapplicable when the related asset or liability is expected to be realized orsettled. Deferred income tax expenses or benefits are based on the changes inthe asset or liability during each period. If available evidence suggests thatit is more likely than not that some portion or all of the deferred tax assetswill not be realized, a valuation allowance is required to reduce the deferredtax assets to the amount that is more likely than not to be realized. Futurechanges in such valuation allowance are included in the provision for deferredincome taxes in the period of change. Deferred income taxes may arise fromtemporary differences resulting from income and expense items reported forfinancial accounting and tax purposes in different periods. Deferred taxes areclassified as current or non-current, depending on the classification of assetsand liabilities to which they relate. Deferred taxes arising from temporarydifferences that are not related to an asset or liability are classified ascurrent or non-current depending on the periods in which the temporarydifferences are expected to reverse and are considered immaterial.

 

Net Income (loss) Per Common Share

 

The Company computes earnings pershare under Accounting Standards Codification subtopic 260-10, Earnings PerShare (“ASC 260-10”). Net loss per common share is computed by dividing netloss by the weighted average number of shares of common stock outstandingduring the year.  For the three and nine month periods endedSeptember 30, 2010 and 2009 common stock equivalents derived from sharesissuable in the exercise of options and warrants are not considered in thecalculation of the weighted average number of common shares outstanding becausethey would be anti-dilutive, thereby decreasing the net loss per share.

 

Use of Estimates

 

The preparation of financialstatements in conformity with generally accepted accounting principles requiresmanagement to make estimates and assumptions that affect certain reportedamounts and disclosures. Accordingly, actual results could differ from thoseestimates.

 

9

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Table of Contents

 

**IRISBIOTECHNOLOGIES INC.**

**(Adevelopment stage company)**

**NOTES TO THECONDENSED FINANCIAL STATEMENTS**

**SEPTEMBER30, 2010**

**(Unaudited)**

 

**NOTE 1 — SUMMARY OFSIGNIFICANT ACCOUNTING POLICIES (continued)**

 

Reclassifications

 

Certain reclassifications have beenmade in prior year’s financial statements to conform to classifications used inthe current year.

 

Research and Development

 

The Company accounts for researchand development costs in accordance with the Accounting Standards Codificationsubtopic 730-10, Research and Development (“ASC 730-10”). Under ASC 730-10, allresearch and development costs must be charged to expense as incurred.Accordingly, internal research and development costs are expensed as incurred.Third-party research and developments costs are expensed when the contractedwork has been performed or as milestone results have been achieved.Company-sponsored research and development costs related to both present andfuture products are expensed in the period incurred. The Company incurredresearch and development expenditures of $2,247 and $-0- for the three monthperiods ended September 30, 2010 and 2009, respectively; $51,343 and$30,622 for the nine month periods ended September 30, 2010 and 2009, respectivelyand $1,428,881 from the period from February 16, 1999 (date of inception)to September 30, 2010.

 

Liquidity

 

To date the Company has generated norevenues, has incurred expenses, and has sustained losses. As shown in theaccompanying unaudited condensed****financialstatements, the Company incurred a net loss of $554,253 during the nine-monthperiod ended September 30, 2010 and $994,989 during the nine-month periodended September 30, 2009. For the period from inception throughSeptember 30, 2010, the Company has accumulated losses of $7,604,744.Consequently, its operations are subject to all risks inherent in theestablishment of a new business enterprise.

 

Concentrations of Credit Risk

 

Financial instruments and relateditems, which potentially subject the Company to concentrations of credit risk,consist primarily of cash, cash equivalents and related party receivables. TheCompany places its cash and temporary cash investments with credit qualityinstitutions. At times, such investments may be in excess of the FDIC insurancelimit. The Company periodically reviews its trade receivables in determiningits allowance for doubtful accounts. The Company does not have accountsreceivable and allowance for doubtful accounts at September 30, 2010.

 

Dependency on key management

 

The future success or failure of theCompany is dependent primarily upon the continued efforts and financial supportof Simon Chin, the Company’s Chief Executive Officer, Chief Financial Officerand the majority sharehold**e**r****(see Note 3).

 

10

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Table of Contents

 

**IRISBIOTECHNOLOGIES INC.**

**(Adevelopment stage company)**

**NOTES TO THECONDENSED FINANCIAL STATEMENTS**

**SEPTEMBER30, 2010**

**(Unaudited)**

 

**NOTE 1 — SUMMARY OFSIGNIFICANT ACCOUNTING POLICIES (continued)**

 

Fair Value of Financial Instruments

 

Accounting Standards Codificationsubtopic 825-10, Financial Instruments (“ASC 825-10”) requires disclosure ofthe fair value of certain financial instruments. The carrying value of cash andcash equivalents, accounts payable and accrued liabilities, and short-termborrowings, as reflected in the balance sheets, approximate fair value becauseof the short-term maturity of these instruments.  All othersignificant financial assets, financial liabilities and equity instruments ofthe Company are either recognized or disclosed in the financial statementstogether with other information relevant for making a reasonable assessment offuture cash flows, interest rate risk and credit risk. Where practicable thefair values of financial assets and financial liabilities have been determinedand disclosed; otherwise only available information pertinent to fair value hasbeen disclosed.

 

Effective January 1, 2008, thecompany adopted Accounting Standards Codification subtopic 820-10, Fair ValueMeasurements and Disclosures (“ASC 820-10”) and Accounting StandardsCodification subtopic 825-10, Financial Instruments (“ASC 825-10”), whichpermits entities to choose to measure many financial instruments and certainother items at fair value. Neither of these statements had an impact on theCompany’s financial position, results of operations nor cash flows.

 

Stock Based Compensation

 

Effective January 1, 2006, thebeginning of the Company’s first fiscal quarter of 2006, the Company adoptedthe fair value recognition provisions of Accounting Standards Codificationsubtopic 718-10, Compensation (“ASC 718-10”) using the modified-prospectivetransition method. Under this transition method, stock-based compensationexpense was recognized in the financial statements for granted, modified, orsettled stock options. Compensation expense recognized included the estimatedexpense for stock options granted on and subsequent to January 1, 2006,based on the grant date fair value estimated in accordance with the provisionsof ASC 718-10, and the estimated expense for the portion vesting in the periodfor options granted prior to, but not vested as of January 1, 2006, basedon the grant date fair value estimated in accordance with the originalprovisions of ASC 718-10. Results for prior periods have not been restated, asprovided for under the modified-prospective method.

 

ASC 718-10 requires forfeituresto be estimated at the time of grant and revised, if necessary, in subsequentperiods if actual forfeitures differ from those estimates. In the Company’s proforma information required under ASC 718-10 for the periods prior to fiscal2006, the Company accounted for forfeitures as they occurred.

 

Upon adoption of ASC 718-10, theCompany is using the Black-Scholes option-pricing model as its method ofvaluation for share-based awards granted beginning in fiscal 2006, which wasalso previously used for the Company’s pro forma information required underSFAS 123. The Company’s determination of fair value of share-based paymentawards on the date of grant using an option-pricing model is affected by theCompany’s stock price as well as assumptions regarding a number of highlycomplex and subjective variables. These variables include, but are not limitedto the Company’s expected stock price volatility over the term of the awards,and certain other market variables such as the risk free interest rate.

 

For the three and nine months periodended September 30, 2010, the Company did not grant any employeeoption.  The fair value of previously issued vesting options of $23,579and $70,736 was charged to current period operations, respectively.

 

11

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Table of Contents

 

**IRISBIOTECHNOLOGIES INC.**

**(Adevelopment stage company)**

**NOTES TO THECONDENSED FINANCIAL STATEMENTS**

**SEPTEMBER30, 2010**

**(Unaudited)**

 

**NOTE 1 — SUMMARY OFSIGNIFICANT ACCOUNTING POLICIES (continued)**

 

Recent Accounting Pronouncements

 

In May 2010, the FASB(Financial Accounting Standards Board) issued Accounting Standards Update2010-19 (“ASU 2010-19”), Foreign Currency (Topic 830): Foreign CurrencyIssues: Multiple Foreign Currency Exchange Rates. The amendments in this updateare effective as of the announcement date of March 18, 2010. The Companydoes not expect the provisions of ASU 2010-19 to have a material effect on thefinancial position, results of operations or cash flows of the Company.

 

In April 2010, the FASB(Financial Accounting Standards Board) issued Accounting Standards Update2010-17 (“ASU 2010-17”), Revenue Recognition-Milestone Method (Topic 605):Milestone Method of Revenue Recognition. The amendments in this Update areeffective on a prospective basis for milestones achieved in fiscal years, andinterim periods within those years, beginning on or after June 15, 2010.Early adoption is permitted. If a company elects early adoption and theperiod of adoption is not the beginning of the entity’s fiscal year, the entityshould apply the amendments retrospectively from the beginning of the year ofadoption. The Company does not expect the provisions of ASU 2010-17 to have amaterial effect on the financial position, results of operations or cash flowsof the Company.

 

There were various other updatesrecently issued, most of which represented technical corrections to theaccounting literature or application to specific industries and are notexpected to a have a material impact on the Company’s consolidated financialposition, results of operations or cash flows.

 

**NOTE 2 - PROPERTY,PLANT, AND EQUIPMENT**

 

Property, plant and equipment atSeptember 30, 2010 and December 31, 2009 are as follows:

 
| ** **                      | ** ** | **September 30, 2010** | ** ** | **December 31, 2009** | ** ** |
|---------------------------------|------------|----------------------------------|------------|---------------------------------|------------|
| Computer  equipment             |       | $                                | 61,201     |                            | $          | 61,201 |   |
| Office  equipment               |       | 1,728                            |       | 1,728                           |       |
| Furniture  and fixtures         |       | 3,586                            |       | 3,586                           |       |
| Manufacturing  equipment        |       | 165,503                          |       | 165,503                         |       |
|                            |       | 232,018                          |       | 232,018                         |       |
| Less:  accumulated depreciation |       | (195,951                         | )          | (183,130                        | )          |
|                            |       | $                                | 36,067     |                            | $          | 48,888 |   |

 

12

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Table of Contents

 

**IRISBIOTECHNOLOGIES INC.**

**(Adevelopment stage company)**

**NOTES TO THECONDENSED FINANCIAL STATEMENTS**

**SEPTEMBER30, 2010**

**(Unaudited)**

 

**NOTE 3 — RELATEDPARTY TRANSACTIONS**

 

On September 24, 2009, theCompany issued a note totaling $38,000 to a shareholder/director, unsecured andbearing an interest rate of 7.5% per annum, due five years from date ofissuance.  The notes are convertible into the Company’s common stock at aconversion rate of $2.25 per share. During the three and nine months ended for September30, 2010, the Company has charged $718 and $2,131, respectively to interestexpense.

 

The Company’s President andshareholders have advanced funds to the Company for working capital purposessince the Company’s inception in February 1999.  No formal repaymentterms or arrangements exist. The net amount outstanding atSeptember 30, 2010 and December 31, 2009 was $65,200 and $98,500,respectively.

 

One of our board members owns 40% ofan entity that entered into a 5-year, 7.5% interest, and convertible noteagreement with the Company for the amount of $71,454 in May 2010 (Note 4).During the three and nine months ended for September 30, 2010, Company hascharged $1,350 and $2,055, respectively to interest expense.

 

 

**NOTE 4 — LONG TERMDEBT**

 

Long-term debt at September 30,2010 and December 31, 2009 are as follows:

 
| ** **                                     | ** ** | **September 30, 2010** | ** ** | **December 31, 2009** | ** ** |
|------------------------------------------------|------------|----------------------------------|------------|---------------------------------|------------|
| Notes  payable, related party (see Note 3)     |       | $                                | 38,000     |                            | $          | 38,000 |   |
| Note  payables, unrelated party                |       | 25,000                           |       | 15,000                          |       |
| Note  payable, net of debt discount of $14,012 |       | 57,442                           |       | —                          |       |
| Total                                          |       | 120,442                          |       | 53,000                          |       |
| Less:  current portion                         |       | —                           |       | —                          |       |
| Long  term portion                             |       | $                                | 120,442    |                            | $          | 53,000 |   |

 

On October 9, 2009, the Companyissued a $5,000 note to an unrelated party, unsecured and bearing an interestrate of 7.5% per annum, due five years from date of issuance.  The note isconvertible into the Company’s common stock at a conversion rate of $2.25 pershare.

 

On December 23, 2009, theCompany issued a $10,000 note to an unrelated party, unsecured and bearing aninterest rate of 7.5% per annum, due five years from date of issuance. The note is convertible into the Company’s common stock at a conversion rate of$2.25 per share.

 

On January 10, 2010, theCompany issued a $10,000 note to an unrelated party, unsecured and bearing aninterest rate of 7.5% per annum, due five years from date of issuance. The note is convertible into the Company’s common stock at a conversion rate of$2.25 per share.

 

On May 13, 2010, the Companyissued a $71,454 convertible promissory note, due in five years with interestat 7.5% per annum. The note is convertible at any time prior to maturity, atthe holder’s option, into shares of our common stock at $1.13 per share.

 

13

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Table of Contents

 

**IRISBIOTECHNOLOGIES INC.**

**(Adevelopment stage company)**

**NOTES TO THECONDENSED FINANCIAL STATEMENTS**

**SEPTEMBER30, 2010**

**(Unaudited)**

 

**NOTE 4 — LONG TERMDEBT (continued)**

 

In accordance with ASC 470-20, theCompany recognized an embedded beneficial conversion feature present in thenote. The Company allocated a portion of the proceeds equal to the intrinsicvalue of that feature to additional paid-in capital. The Company recognized andmeasured an aggregate of $15,176 of the proceeds, which is equal to theintrinsic value of the embedded beneficial conversion feature, to additionalpaid-in capital and a discount against the note. The debt discount attributedto the beneficial conversion feature is charged to current period operations asinterest expense using the effective interest method over the term of the note.

 

During the three and nine monthperiod ended September 30, 2010, the recorded an amortization of thediscount of $1,164 as a charge against current period interest expense.

 

**NOTE 5 —STOCKHOLDER EQUITY**

 

During the nine month period ended September 30,2010, the Company issued an aggregate of 171,000 shares of common stock forservices in the amount of $241,730 out of which $30,000 related to prioraccruals.  All valuations of common stock issued for services were basedupon the fair value of the Company’s common stock during the period theservices were rendered.

 

**NOTE 6 — WARRANTSAND OPTIONS**

 

Warrants

 

The following table summarizes thechanges in warrants outstanding and related prices for the shares of theCompany’s common stock issued to shareholders at September 30, 2010:

 
| **Exercise Price** | ** ** | **Number  Outstanding** | ** ** | **Warrants Outstanding  Weighted Average  Remaining Contractual  Life (years)** | ** ** | **Weighted  Average  Exercise price** | ** ** | **Number  Exercisable** | ** ** | **Warrants Exercisable  Weighted  Average  Exercise Price** | ** ** |
|-------------------------|------------|-------------------------|------------|-----------------------------------------------------------------------------------------------------|------------|--------------------------------------------|------------|-------------------------|------------|-----------------------------------------------------------------------|------------|
| $                       | 0.13       |                    | 40,000     |                                                                                                | 3.72       |                                       | $          | 0.13                    |       | 40,000                                                                |       | $ | 0.13 |   |
| $                       | 2.00       |                    | 31,400     |                                                                                                | 0.95       |                                       | $          | 2.00                    |       | 31,400                                                                |       | $ | 2.00 |   |
| $                       | 2.25       |                    | 23,629     |                                                                                                | 2.39       |                                       | $          | 2.25                    |       | 23,629                                                                |       | $ | 2.25 |   |
|                    |       | 95,029                  |       |                                                                                                |       |                                       |       | 95,029                  |       |                                                                  |       |

 

14

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Table of Contents

 

**IRISBIOTECHNOLOGIES INC.**

**(Adevelopment stage company)**

**NOTES TO THECONDENSED FINANCIAL STATEMENTS**

**SEPTEMBER30, 2010**

**(Unaudited)**

 

**NOTE 6 — WARRANTSAND OPTIONS (continued)**

 

Transactions involving the Company’swarrant issuance are summarized as follows:

 
| ** **                              | ** ** | **Number of  Shares** | ** ** | **Weighted  Average  Price Per Share** | ** ** |
|-----------------------------------------|------------|----------------------------|------------|--------------------------------------------------|------------|
| Outstanding  at December 31, 2008  |       | 134,178                    |       | $                                                | 2.20       |   |
| Issued                                  |       | 42,517                     |       | 0.26                                             |       |
| Exercised                               |       | —                     |       | —                                           |       |
| Canceled  or expired                    |       | (81,666                    | )          | 2.25                                             |       |
| Outstanding  at December 31, 2009  |       | 95,029                     |       | $                                                | 1.29       |   |
| Issued                                  |       | —                     |       | —                                           |       |
| Exercised                               |       | —                     |       | —                                           |       |
| Canceled  or expired                    |       | —                     |       | —                                           |       |
| Outstanding  at September 30, 2010 |       | 95,029                     |       | $                                                | 1.29       |   |

 

During the year endedDecember 31, 2009, in connection with the sale of the Company’s commonstock, the Company issued an aggregate of 2,517 warrants to purchase theCompany’s common stock at an exercise price of $2.25 per share for five years.

 

During the year endedDecember 31, 2009, 81,666 non-vested warrants previously issued inconnection with services were returned and canceled. The balance unamortizedfair value of the warrant of $119,364 recognized as contra equity, which wastransferred to Additional paid in capital during the year 2009.

 

On June 19, 2009, the Companyissued 40,000 warrants to purchase the Company’s common stock at an exerciseprice of $0.13 over five years, vesting immediately for servicesrendered.  Accordingly, the Company recorded fair value of the warrants of$52,000 for year 2009.

 

The fair value of the warrantsissued and the significant assumptions used to determine those fair values,using a Black-Scholes option pricing model are as follows:

 
| **Significant assumptions:**      | ** ** | ** ** | ** ** |
|----------------------------------------|------------|------------|------------|
| Risk-free  interest rate at grant date |       | 2.82       | %          |
| Expected  stock price volatility       |       | 458.97     | %          |
| Expected  dividend payout              |       | —     |       |
| Expected  option life-years (a)        |       | 5          |       |

 

----

(a)The expected option life is basedon contractual expiration dates

 

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Table ofContents

 

**IRISBIOTECHNOLOGIES INC.**

**(Adevelopment stage company)**

**NOTES TO THECONDENSED FINANCIAL STATEMENTS**

**SEPTEMBER30, 2010**

**(Unaudited)**

 

**NOTE 6 — WARRANTSAND OPTIONS (continued)**

 

Options

 

Employee Options

 

The following table summarizes thechanges in options outstanding and the related prices for the shares of theCompany’s common stock issued to employees under a stock option planat September 30, 2010:

 
| ** **                    | ** ** | **Options Outstanding** | ** ** | **Options Exercisable**                                         | ** ** |
|-------------------------------|------------|------------------------------|------------|----------------------------------------------------------------------|------------|
| **Exercise  Prices (S)** | ** ** | **Number  Outstanding**      | ** ** | **Weighted Average  Remaining  Contractual Life  (Years)** | ** ** | **Weighted  Average  Exercise  Price (S)** | ** ** | **Number  Exercisable** | ** ** | **Weighted  Average  Exercise  Price** | ** ** |
| $                             | 0.13       |                         | 80,000     |                                                                 | 8.72       |   | $ | 0.13 |   | 80,000 |   | $ | 0.13 |   |
| 0.15                          |       | 400,000                      |       | 3.72                                                                 |       | 0.15 |   | 400,000 |   | 0.15 |   |
| 0.50                          |       | 41,000                       |       | 0.24                                                                 |       | 0.50 |   | 41,000 |   | 0.50 |   |
| 1.00                          |       | 813,875                      |       | 5.08                                                                 |       | 1.00 |   | 813,875 |   | 1.00 |   |
| 2.25                          |       | 167,696                      |       | 7.65                                                                 |       | 2.25 |   | 97,823 |   | 2.25 |   |
|                          |       | 1,502,571                    |       |                                                                 |       | 0.85 |   | 1,432,698 |   | 0.76 |   |
|                               |            |                              |            |                                                                      |            |  |  |  |  |  |  |  |  |  |

 

Transactions involvingemployee stock options issued are summarized as follows:

 
| ** **                               | ** ** | **Number of Shares** | ** ** | **Weighted Average  Price Per Share** | ** ** |
|------------------------------------------|------------|--------------------------------|------------|------------------------------------------------------|------------|
| Outstanding  at December 31, 2008:  |       | 1,915,696                      |       | $                                                    | 0.86       |   |
| Granted                                  |       | 480,000                        |       | 0.15                                                 |       |
| Exercised                                |       | (176,250                       | )          | 0.62                                                 |       |
| Canceled  or expired                     |       | (530,000                       | )          | 0.33                                                 |       |
| Outstanding  at December 31, 2009   |       | 1,689,446                      |       | $                                                    | 0.85       |   |
| Granted                                  |       | —                         |       | —                                               |       |
| Exercised                                |       | (86,875                        | )          | (0.71                                                | )          |
| Canceled  or expired                     |       | (100,000                       | )          | (1.00                                                | )          |
| Outstanding  at September 30, 2010: |       | 1,502,571                      |       | $                                                    | 0.85       |   |

 

On June 19, 2009, the Companygranted 480,000 employee stock options with exercise prices of $0.13 and $0.15vesting immediately and expiring five to ten years from issuance.  Thefair value of the vested portion (determined as described below) of $624,000was charged to expenses for year 2009.

 

The fair value of these stockoptions granted and the significant assumptions used to determine those fairvalues, using a Black-Scholes option-pricing model are as follows:

 

16

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Table ofContents

 

**IRISBIOTECHNOLOGIES INC.**

**(Adevelopment stage company)**

**NOTES TO THECONDENSED FINANCIAL STATEMENTS**

**SEPTEMBER30, 2010**

**(Unaudited)**

 

**NOTE 6 — WARRANTSAND OPTIONS (continued)**

 

Employee options (continued)

 
| **Significant assumptions:**      | ** ** | ** **   | ** ** |
|----------------------------------------|------------|--------------|------------|
| Risk-free  interest rate at grant date |       | 2.82% - 3.79 | %          |
| Expected  stock price volatility       |       | 458.97       | %          |
| Expected  dividend payout              |       | —       |       |
| Expected  option life-years (a)        |       | 5- 10        |       |

 

----

(a)The expected option life is basedon contractual expiration dates

 

The fair value of the vested portionpreviously granted options of $70,736 and $70,736 was charged during thenine-month period September 30, 2010 and 2009, respectively.

 

Non-employee options

 

The following table summarizes thechanges in options outstanding and the related prices for the shares of theCompany’s common stock issued to non-employees under a stock option plan atSeptember 30, 2010:

 
| ** **           | ** ** | **Options Outstanding** | ** ** | **Options Exercisable**                                         | ** ** |
|----------------------|------------|------------------------------|------------|----------------------------------------------------------------------|------------|
| **Exercise  Prices** | ** ** | **Number  Outstanding**      | ** ** | **Weighted Average  Remaining  Contractual Life  (Years)** | ** ** | **Weighted  Average  Exercise  Price** | ** ** | **Number  Exercisable** | ** ** | **Weighted  Average  Exercise  Price** | ** ** |
| $                    | 0.50       |                         | 160,000    |                                                                 | 0.59       |   | $ | 0.50 |   | 160,000 |   | $ | 0.50 |   |
| 1.00                 |       | 110,000                      |       | 5.46                                                                 |       | 1.00 |   | 110,000 |   | 1.00 |   |
| 1.40                 |       | 105,000                      |       | 8.49                                                                 |       | 1.40 |   | 52,500 |   | 1.40 |   |
|                 |       | 375,000                      |       |                                                                 |       | 0.90 |   | 322,500 |   | 0.82 |   |
|                      |            |                              |            |                                                                      |            |  |  |  |  |  |  |  |  |  |

 

Transactions involving non-employeestock options issued are summarized as follows:

 
| ** **                               | ** ** | **Number of Shares** | ** ** | **Weighted Average  Price Per Share** | ** ** |
|------------------------------------------|------------|--------------------------------|------------|------------------------------------------------------|------------|
| Outstanding  at December 31, 2008:  |       | 410,000                        |       | $                                                    | 0.60       |   |
| Granted                                  |       | 105,000                        |       | 1.40                                                 |       |
| Exercised                                |       | (20,000                        | )          | (0.25                                                |       |
| Canceled  or expired                     |       | (120,000                       | )          | (0.38                                                |       |
| Outstanding  at December 31, 2009   |       | 375,000                        |       | $                                                    | 0.90       |   |
| Granted                                  |       | —                         |       | —                                               |       |
| Exercised                                |       | —                         |       | —                                               |       |
| Canceled  or expired                     |       | —                         |       | —                                               |       |
| Outstanding  at September 30, 2010: |       | 375,000                        |       | $                                                    | 0.90       |   |

 

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Table ofContents

 

**IRISBIOTECHNOLOGIES INC.**

**(Adevelopment stage company)**

**NOTES TO THECONDENSED FINANCIAL STATEMENTS**

**SEPTEMBER30, 2010**

**(Unaudited)**

 

**NOTE 6 — WARRANTSAND OPTIONS (continued)**

 

Non-employee options (continued)

 

During the year endedDecember 31, 2009, the Company granted 105,000 non-employee stock optionswith an exercise price of $1.40 vesting over three years and expiring ten yearsfrom issuance.  The fair value of the vested portion (determined asdescribed below) of $33,156 was charged to current period earnings.

 

The fair value of these stockoptions granted and the significant assumptions used to determine those fairvalues, using a Black-Scholes option-pricing model are as follows:

 
| **Significant assumptions :** | ** ** | ** **        | ** ** |
|-----------------------------------------|------------|-------------------|------------|
| Risk-free  interest rate at grant date  |       | 2.97% to 3.84     | %          |
| Expected  stock price volatility        |       | 404.29% to 455.63 | %          |
| Expected  dividend payout               |       | —            |       |
| Expected  option life-years (a)         |       | 8.74 to 8.99      |       |

 

----

(a) The expected option life isbased on contractual expiration dates

 

**NOTE 7 - INCOMETAXES**

 

ASC 740-10 requires the recognitionof deferred tax liabilities and assets for the expected future tax consequencesof events that have been included in the financial statement or tax returns.Under this method, deferred tax liabilities and assets are determined based onthe difference between financial statements and tax bases of assets andliabilities using enacted tax rates in effect for the year in which thedifferences are expected to reverse. Temporary differences between taxableincome reported for financial reporting purposes and income tax purposes areinsignificant.

 

**NOTE 8 -SUBSEQUENT EVENTS**

 

Subsequent events have beenevaluated through the date that the financial statements were issued.

 

In October and November 2010,the Company issued an aggregate of 24,000 shares of its common stock forservices rendered.  In addition, inNovember 2010, the Company issued 12,740 shares of its common stock for commonstock subscriptions of an aggregate of $20,000 out of which $10,000 wasreceived in August 2010.

 

Under the US QualifyingTherapeutic Discovery Project (QTDP) Program, asof October 29, 2010, we have been awarded approximately $245,000in recognition of Iris’s patented Nano-BiochipTM and BioWindowsTM MedicalInformatics System for optimizing personalized and targeted medical treatment.To date the Company has received $34,808 and expects to receive $209,671 in January2011.

 

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**ITEM 2.MANAGEMENT’S DISCUSSION ANDANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.**

 

**Forward-Looking Statements**

 

Theinformation in this report contains forward-looking statements. All statementsother than statements of historical fact made in this report are forwardlooking. In particular, the statements herein regarding industry prospects andfuture results of operations or financial position are forward-lookingstatements. These forward-looking statements can be identified by the use ofwords such as “believes,” “estimates,” “could,” “possibly,” “probably,”anticipates,” “projects,” “expects,” “may,” “will,” or “should” or othervariations or similar words. No assurances can be given that the future resultsanticipated by the forward-looking statements will be achieved. Forward-lookingstatements reflect management’s current expectations and are inherentlyuncertain. Our actual results may differ significantly from management’sexpectations.

 

Thefollowing discussion and analysis should be read in conjunction with ourfinancial statements, included herewith. This discussion should not beconstrued to imply that the results discussed herein will necessarily continueinto the future, or that any conclusion reached herein will necessarily beindicative of actual operating results in the future. Such discussionrepresents only the best present assessment of our management.

 

**Overview**

 

Sinceinception on February 16, 1999 through September 30, 2010, we havesustained cumulative net losses of $7,604,744. Our losses have resultedprimarily from research and development expenses, patent costs and legal andaccounting expenses. From inception through September 30, 2010, we havenot generated any revenue from operations. We expect to incur additional lossesto perform further research and development activities. We have sufficient cashto operate for one year at the current burn rate. In order to accelerate ourproduct introduction and to grow dynamically, we will need to raise additionalfunds. We do not currently have any commercial products. With additionalfunding, we expect to launch our nano-biochip products in less than a year.

 

During thepast 18 months, we have spent less than $10,000 for public relations. Due tothe severe recession we felt that it was prudent to spend investor dollars on designingand building an advanced Nano-Biochip making system, streamlining the automatedpatient sample processing protocols and product tracking system, andinteracting with physicians and patients to demonstrate the usefulness of Iris’sBioWindows medical informatics system. We have an extensive pipeline of disease chips including a BreastCancerChipä,ColonCancerChipä,NeuroChipä,CardioChipä,ComprehensiveCancerChipä, and MetabolicChipä.

 

Wehave been in discussions with various entities in regard to launching ourproducts in the US and abroad. We have also had discussions with equipmentfinancing sources with respect to building or buying additional equipment,which would allow us to expand our manufacturing capacity. Under the USQualifying Therapeutic Discovery Project (QTDP) Program, the maximum amount ofa grant application was $5 million, but the maximum amount that the governmentactually gave for any grant was $245,000. Asof October 29, 2010, we have been awarded approximately $245,000in recognition of Iris’s patented Nano-BiochipTM and BioWindowsTM MedicalInformatics System for optimizing personalized and targeted medical treatment.To date we have received $34,808 and we expect to receive $209,671 in January2011.

 

The selection criteriaincludes a company’s ability to diagnose diseases or conditions; to determinemolecular factors related to diseases or conditions by developing moleculardiagnostic guided therapeutic decisions; or to develop a product, process, ortechnology to further the delivery or administration of therapeutics. The awardwas given to projects that show reasonable potential to result in new therapiesto treat areas of unmet medical needs or to prevent, detect or treat chronic oracute diseases and conditions; to reduce long-term health care costs in theU.S.; or to significantly advance the goal of curing cancer within the next 30years.

 

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The Small Business Jobs and Credit Act of 2010became law on September 27, 2010. There will be no capital gain tax  for those who purchase our stock (IRSB)between now and January 1, 2011 and keep the stock for at least fiveyears.

 

There aresome risks with respect to clinical testing, regulatory approval and reviewcycles and uncertainty of the costs. Net positive cash inflows from anyproducts developed may take several years to achieve. Management plans tocontinue financing operations with a combination of equity issuances and debtarrangements. If adequate funds are not available, we may be required to delay,reduce the scope of, or eliminate our research or development programs, orcease operations.

 

**History**

 

We wereincorporated in the State of California on February 16, 1999 and plannedto sell theranostic (choosing therapy based upon personalized diagnosticresults) products and services in the medical field. In an effort to developthat business, we set up operations in two locations in California -Headquarters in Santa Clara and Laboratory in San Leandro.

 

Beginningon March 11, 1999, Simon Chin, MBA, our founder, President and CEO,Secretary and principal shareholder, entered into Common Stock PurchaseAgreements with various companies, investment groups and private individuals.On March 1, 2003, Daniel Farnum, M.D., an owner of Humboldt Orthopedicsand a key shareholder, and Grace Osborne, MBA, President of GCO Recruiting,joined Mr. Chin on our board of directors. On April 9, 2003, theboard approved a 2 for 1 stock split, changed the authorized shares of commonstock from 10 million to 20 million, and the authorized preferred stockremained at 5 million shares.

 

**Plan of Operation**

 

We are alife sciences company and the recipient of the Frost and Sullivan 2008Technology Innovation Award in Pharmacogenomics. Without a clinically accuratetool to measure the relevant genetic/genomic malfunctions involved, cancerdiagnosis is a trial and error process leading to unnecessary or ill-directedtherapy with unintended risks and adverse side effects. The development of ourproprietary Nano-biochipsTM assists medical professionals in the diagnosis andprognosis process.  Our manufacturing system has the capability to producea variety of chips with a choice of mRNAs, microRNAs, proteins, or otherbiomarker probes for the diagnosis and prognosis of breast cancer, coloncancer, and many other diseases.

 

The IrisBioWindowsTM Informatics System for Personalized and Targeted Medicine handlesthe analysis of the Nano-biochipTM gene and protein signatures. BioWindowsTM isan artificial intelligence system, which includes a powerful database withmolecular data, in-depth patient demographics and lifestyle information, familymedical histories and treatment-response profiles for many diseases. Welaunched “Health Passport” in its BioWindowsTM 2.0 Informatics System a yearago.

 

HealthPassport is a HIPAA compliant, web based, medical information storage systemthat allows participants to grant selective or full sharing capabilities oftheir confidential medical and lifestyle information to physicians and/orfamily members anywhere in the world. This allows families to buildmulti-generational medical family trees that will help assure that they receivemore personalized care now and in the future — the right medical treatment forthe right patient at the right time.

 

Startingat the point of a breast biopsy diagnosis of cancer, the nano-biochip andinformatics program are designed to enable a treating physician to quicklyprescribe a personalized treatment regimen that will have the greatestprobability of success for each patient’s particular type of cancer. Ourproduct platform is expected to lead to more effective diagnosis and treatmentnot only for patients with breast cancer, but also for those with other cancer,neurological disorders, heart disease, diabetes and other gene-relatedmetabolic problems.

 

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**ProductResearch and Development**

 

Weanticipate spending, in order to accelerate our growth, which is contingentupon raising additional funds, approximately $5,000,000 for product researchand development activities related to our anticipated multiple product launchesduring the next twelve months.

 

**Acquisitionof Plant and Equipment and Other Assets**

 

We do notanticipate the sale of any material property, plant or equipment during thenext 12 months. We do not anticipate the acquisition of any material property,plant or equipment during the next 12 months, unless we raise additional fundsto accelerate our growth to fulfill the unmet needs of a large, growing market.

 

**Number of Employees**

 

From ourinception, we have principally relied on the services of outside consultantsand part-time employees for services. As of November 15, 2010, we havefive full time employees and 10 part-time employees. In order for us to attractand retain quality personnel, we anticipate we will have to offer competitivesalaries to future employees. We anticipate that it may become desirable to addadditional full and or part time employees to discharge certain criticalfunctions during the next 12 months. This projected increase in personnel isdependent upon our ability to generate revenues and obtain sources offinancing. There is no guarantee that we will be successful in raising thefunds required or generating revenues sufficient to fund the projected increasein the number of employees. As we continue to expand, we will incur additionalcost for personnel.

 

**Results of Operations**

 

As adevelopment stage company, we have yet to earn revenues from operations. We mayexperience fluctuations in operating results in future periods due to a varietyof factors, including our ability to obtain additional financing in a timelymanner and on terms favorable to us, our ability to successfully develop ourbusiness model, the amount and timing of operating costs and capitalexpenditures relating to the expansion of our business, operations andinfrastructure and the implementation of marketing programs, key agreements,and strategic alliances, and general economic conditions specific to our industry.

 

As aresult of limited capital resources and no revenues from operations sinceinception, we have relied on the issuance of equity securities toemployees and non-employees in exchange for services. Our managemententers into equity compensation agreements with non-employees if it isin our best interest under terms and conditions consistent with therequirements of Accounting Standards Codification Subtopic 718-10, “Compensation”.”In order to conserve our limited operating capital resources, we anticipatecontinuing to compensate non-employees with equity for services during thenext twelve months. This policy may have a material effect on our resultsof operations during the next twelve months.

 

**Three Months Ended September 30, 2010 Compared to Three Months EndedSeptember 30, 2009**

 

**Revenues**

 

We havegenerated no operating revenues from operations from our inception. We believewe will begin earning revenues from operations in 2011 from actual operationas we transition from a development stage company to that of anactive growth stage company.

 

**Costs and Expenses**

 

From ourinception through September 30, 2010, we have incurred cumulative lossesof $7,604,744. In addition, a significant part of the overall remaining costsare associated principally with equity-based compensation to employees andconsultants, research and development costs and professional services rendered.

 

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Selling,general and administrative (“SG&A”) expenses increased by$163,698 from $40,522 for the three months ended September 30, 2009to $204,220 for the three months ended September 30, 2010. SG&Aexpenses consisted of accounting, legal, consulting, public relations, startupand organizational expenses. SG&A expenses also included non-cash chargesfrom the issuance of stock, warrants and stock options in the amounts of$119,996 for the three months ended September 30, 2010 and $41,332 for thethree months ended September 30, 2009, a period to period increase of$78,664. The remaining SG&A expenses required cash amounted toapproximately $84,224 and $(810) for the three months ended September 30,2010 and 2009, respectively. We used stock in lieu of cash to conserve our cashresources.

 

Researchand development costs increased from $0 for the three months ended September 30,2009 to $2,247 for the three months ended September 30, 2010.

 

As aresult of the above-mentioned expenses, net losses increased from $45,026 forthe three months ended September 30, 2009 to $214,081 for the three monthsended September 30, 2010.

 

**Nine Months Ended September 30, 2010 Compared to Nine Months Ended September 30,2009**

 

**Revenues**

 

We havegenerated no operating revenues from operations from our inception. We believewe will begin earning revenues from operations in 2011 from actual operationas we transition from a development stage company to that of anactive growth stage company.

 

**Costs and Expenses**

 

Selling,general and administrative (“SG&A”) expenses decreased by$467,622 from $950,980 for the nine months ended September 30, 2009to $483,358 for the nine months ended September 30, 2010. SG&Aexpenses consisted of accounting, legal, consulting, public relations, startupand organizational expenses. SG&A expenses also included non-cash chargesfrom the issuance of stock, warrants and stock options in the amounts of$315,621 for the nine months ended September 30, 2010 and $819,350 for thenine months ended September 30, 2009, a period to period decrease of$503,729. The remaining SG&A expenses required cash amounted toapproximately $167,737 and $131,630 for the nine months ended September 30,2010 and 2009, respectively. We used stock in lieu of cash to conserve our cashresources.

 

Researchand development costs increased from $30,622 for the nine months ended September 30,2009 to $51,343 for the nine months ended September 30, 2010.

 

As aresult of the above-mentioned expenses, net losses decreased from $994,989 forthe nine months ended September 30, 2009 to $554,253 for the nine monthsended September 30, 2010.

 

**Liquidity and Capital Resources**

 

As of September 30,2010, we had a working capital deficit of $171,451 as compared to a working capitaldeficit of $176,510 as of December 31, 2009. Our cash position was $121 asof September 30, 2010 compared to $442 as of December 31, 2009. Frominception to September 30, 2010 we have incurred an operating cash flowdeficit of $2,951,287, which has been principally financed through the privateplacement of our common stock, advances from related parties and issuance ofnotes payable. As of September 30, 2010, we have long-term debt of$120,442.

 

We expectto continue to incur additional losses and negative cash flows from operatingactivities for the next two years.

 

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Ouravailable working capital and capital requirements will depend upon numerousfactors, including progress of our research and development programs, ourprogress in and the cost of pre-clinical and clinical testing, the timing andcost of obtaining regulatory approvals, the cost of filing and prosecutingpatent claims and other intellectual property rights, completing technologicaland market developments, current and future licensing relationships, the statusof our competitors, and our ability to establish collaborative arrangementswith other organizations .

 

Ourcontinued operations will depend on whether we are able to raise additionalfunds through various potential sources, such as equity and debt financing,collaborative and licensing agreements, strategic alliances, and our ability torealize the full potential of our technology in development. Such additionalfunds may not become available on acceptable terms, if at all, and there can beno assurance that any additional funding that we do obtain will be sufficientto meet our needs in the long term. Through November 15, 2010, virtuallyall of our financing has been through private placements of common stock andwarrants. We intend to continue to fund operations from cash on-hand andthrough the similar sources of capital previously described for the foreseeablefuture. We can give no assurances that any additional capital that we are ableto obtain will be sufficient to meet our needs. We believe that we willcontinue to incur net losses and negative cash flows from operating activities forthe next two years. Based on the resources available to us on November 15,2010, we can sustain our present burn rate for one year. We will needadditional equity or debt financing to accelerate the growth of our operationsthrough the remainder of 2010 and we may need additional financing thereafter.

 

**Off-Balance Sheet Arrangements**

 

Wedo not have any off-balance sheet arrangements.

 

**Inflation**

 

Itis our opinion that inflation has not had a material effect on our operations.

 

**Critical Accounting Policies**

 

Ourfinancial statements are prepared in accordance with accounting principlesgenerally accepted in the United States of America, which requires managementto make estimates and assumptions that affect the reported amounts of assetsand liabilities and disclosure of contingent assets and liabilities at the dateof the financial statements and the reported amounts of revenues and expensesduring the reporting period. Actual results could differ from those estimates.

 

Thefollowing accounting policies are critical in fully understanding andevaluating our reported financial results:

 

**Accounting for Stock-Based Compensation**

 

We accountfor our stock options and warrants using the fair value method promulgated byAccounting Standards Codification subtopic 718-10, Compensation (“ASC 718-10”)which addresses the accounting for transactions in which an entity exchangesits equity instruments for goods or services. Therefore, our results includenon-cash compensation expense as a result of the issuance of stock options andwarrants and we expect to record additional non-cash compensation expense inthe future.

 

**ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.**

 

N/A

 

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**ITEM 4T. CONTROLS AND PROCEDURES.**

 

*Evaluation of Disclosure Controls and Procedures* . Under the supervision and with the participation of ourmanagement, including our President, Chief Financial Officer and Secretary, weevaluated the effectiveness of the design and operation of our disclosurecontrols and procedures (as defined in Rule 13a-15(e) and15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”))as of the end of the period covered by this report. Based upon that evaluation,our President, Chief Financial Officer and Secretary concluded that ourdisclosure controls and procedures as of the end of the period covered by thisreport were effective such that the information required to be disclosed by usin reports filed under the Securities Exchange Act of 1934 is(i) recorded, processed, summarized and reported within the time periodsspecified in the SEC’s rules and forms and (ii) accumulated andcommunicated to our management to allow timely decisions regarding disclosure.A controls system cannot provide absolute assurance, however, that theobjectives of the controls system are met, and no evaluation of controls canprovide absolute assurance that all control issues and instances offraud, if any, within a company have been detected.

 

*Changes in Internal Control Over Financial Reporting.* During the most recent quarter ended September 30,2010, there has been no change in our internal control over financial reporting(as defined in Rule 13a-15(f) and 15d-15(f) under the ExchangeAct)) that has materially affected, or is reasonably likely to materiallyaffect, our internal control over financial reporting.

 

**PART II**

 

**ITEM 1. LEGAL PROCEEDINGS.**

 

We are nota party to any pending legal proceeding, nor are our property the subject of apending legal proceeding, that is not in the ordinary course of business orotherwise material to the financial condition of our business. None of ourdirectors, officers or affiliates is involved in a proceeding adverse to ourbusiness or has a material interest adverse to our business.

 

**ITEM 1A. RISK FACTORS.**

 

N/A

 

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

 

During thethree months ended September 30, 2010, we sold 6,730 shares of commonstock for proceeds of $10,000.  In addition, we issued 48,000 shares ofcommon stock to consultants for services rendered in the amount of $86,800. Inconnection with the issuance of such shares, we relied on the exemption fromregistration provided by Section 4(2) of the Securities Act of 1933,as amended.

 

During themonths of October and November 2010, the Company issued an aggregateof 24,000 shares of its common stock for services rendered.  In addition, in November 2010, the Companyissued 12,740 shares of its common stock for common stock subscriptions of anaggregate $20,000 out of which $10,000 was received in August 2010. Inconnection with the issuance of such shares, we relied on the exemption fromregistration provided by Section 4(2) of the Securities Act of 1933,as amended.

 

**ITEM 3. DEFAULTS UPON SENIOR SECURITIES.**

 

None

 

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**ITEM 4. RESERVED.**

 

**ITEM 5. OTHER INFORMATION.**

 

None

 

**ITEM 6. EXHIBITS.**

 
| **Exhibit  Number** | ** ** | **Description of Exhibit**                                                                                                                                                      |
|---------------------|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                |       |                                                                                                                                                                                      |
| 31.1                |       | Certifications required by  Rule 13a-14, as adopted pursuant to Section 302 of the  Sarbanes-Oxley Act of 2002.                                                                 |
| 32.1                |       | Certification of Chief  Executive Officer and Principal Accounting Officer pursuant to 18 U.S.C.§  1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of  2002. |

 

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**SIGNATURES**

 

Pursuantto the requirements of the Securities Exchange Act of 1934, the registrant hasduly caused this report to be signed on its behalf by the undersigned,thereunto duly authorized.

 
|                         | IRIS BIOTECHNOLOGIES INC. |
|------------------------------|---------------------------|
|                         |                      |   |
|                         |                      |   |
|  November 15, 2010 |                      | /s/ Simon Chin |
|                         |                      | Simon Chin |
|                         |                      | President, Chief Executive  Officer, Chief Financial |
|                         |                      | Officer and Director  (Principal Executive Officer, |
|                         |                      | Principal Accounting  Officer and Principal Financial Officer) |

 

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