OCLG Oncologix Tech Inc (CE)

U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934.

For the quarterly period ended February 28, 2015

[_] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934.

For the transition period from ____________________ to ___________________.

Commission File Number 0-15482

ONCOLOGIX TECH, INC.

(Name of Small Business Issuer as Specified in Its Charter)

Nevada		86-1006416
(State or other jurisdiction of incorporation or organization		(I.R.S. Employer Identification No.)
1604 W. Pinhook Drive #200, Lafayette, LA		70508
(Address of principal executive offices)		Zip Code
Registrant’s Telephone Number, Including Area Code:  (616) 977-9933

 

Check whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [_]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [_]

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

Large accelerated Filer [_] Accelerated Filer [_]

Non-accelerated Filer [_] Smaller Reporting Company [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes [_] No [X]

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class		Outstanding at April 1, 2015
Common Stock, $0.001 par value		233,071,692

 

 

 

TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
Condensed Consolidated Balance Sheets as of February 28, 2015 (Unaudited) and August 31, 2014	4
Condensed Consolidated Statements of Operations (Unaudited) for the three  and six month periods
ended February 28, 2015 and 2014	5
Condensed Consolidated Statements of Cash Flows (Unaudited) for the six month period
ended February 28, 2015	6
Notes to Condensed Consolidated Financial Statements (Unaudited)	7
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	47
ITEM 3. Quantitative and Qualitative Disclosure about Market Risk	51
ITEM 4. Controls and Procedures	51
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings	52
ITEM 1A. Risk Factors	52
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds	56
ITEM 3. Defaults Upon Senior Securities	60
ITEM 4. Mine Safety Disclosures	60
ITEM 5. Other Information	60
ITEM 6. Exhibits	60
Signatures	61

 

 

 

 

 

FORWARD LOOKING STATEMENTS

 

There are certain statements within this Report that are not historical facts. These statements contained herein are based on current expectations that involve a number of known and unknown risks and uncertainties. These statements can be identified by the use of forward-looking terminology such as “believes,” “expects,” “may,” “will,” “should,” or “anticipates,” or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties. No assurances can be given that the future results indicated, whether expressed or implied, will be achieved. The risk factors disclosed in Item 1A “Risk Factors” of Part II of this Quarterly Report on Form 10-Q and in Part I – Item 1A of our Annual Report on Form 10-K for the year ended August 31, 2014, include all known risks our management believes could materially affect the results described by forward-looking statements contained in this Report. However, those risks may not be the only risks we face. Our business, operations, and financial performance could also be affected by additional factors that are not presently known to us or that we currently consider to be immaterial to our operations. In addition, new risks may emerge from time to time that may cause actual results to differ materially from those contained in any forward-looking statements. We believe that the forward-looking statements contained in this Report are reasonable. However, given these risks and uncertainties, we cannot provide you with any guarantee that the anticipated results will be achieved. We disclaim any obligation to update or revise information contained in any forward-looking statement to reflect development or information after the date this Report is filed with the Securities Exchange Commission.

 

Throughout this report, unless otherwise indicated by the context, references herein to the “Company”, “Oncologix”, “OCLG”, “we”, our” or “us” means Oncologix Tech, Inc.., a Nevada corporation and its corporate subsidiaries and predecessors. September 1, 2014 to August 31, 2015 means “fiscal 2015 and September 1, 2013 to August 31, 2014 means “fiscal 2014”.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PART I: FINANCIAL INFORMATION

ITEM 1. Financial Statements

ONCOLOGIX TECH, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

 

		February 28,				August 31,
		2015				2014
		(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents		$	28,941			$	17,504
Accounts receivable (net of allowance of $71,000 and $9,000)			910,328				213,399
Inventory			137,436				31,271
Prepaid expenses and other current assets			12,996				9,307
Prepaid commissions and finders' fees			171				3,152
Total current assets			1,089,872				274,633
Property and equipment (net of accumulated depreciation
of $34,535 and $28,264)			37,870				39,967
Deposits and other assets			58,134				14,582
Goodwill			2,404,389				1,781,779
Patents, registrations (net of amortization of $101,046 and $97,983)			21,434				24,497
Total assets		$	3,611,699			$	2,135,458
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Convertible notes payable (net of discount of $223,836 and $99,491)		$	250,917			$	436,308
Notes payable (net of discount of $4,656 and $18,596)			2,367,890				946,104
Notes payable - related parties			9,086				51,600
Inventory finance agreements			391,939				—
Accounts payable and other accrued expenses			1,030,403				732,934
Accrued interest payable			191,970				148,681
Accrued interest payable - related parties			7,393				6,342
Current portion of long term debt			95,064				82,532
Total current liabilities			4,344,662				2,404,501
Long-term liabilities:
Notes payable (net of current portion)			400,800				395,675
Convertible notes payable			—				—
Total long-term liabilities			400,800				395,675
Total liabilities			4,745,462				2,800,176
Stockholders' Deficit:
Series A Preferred stock, par value $.001 per share; 10,000,000 shares authorized; 129,062 and 129,062 shares issued and outstanding at February 28, 2015 and August 31, 2014, respectively			129				129
Series D Preferred stock, par value $.001 per share; 10,000,000 shares authorized; 78,564 and 78,564 shares issued and outstanding at February 28, 2015 and August 31, 2014, respectively			79				79
Common stock, par value $.001 per share; 750,000,000 shares authorized; 209,599,660 and 134,600,152 shares issued and outstanding at February 28, 2015 and August 31, 2014, respectively			209,599				134,600
Additional paid-in capital			47,974,911				47,565,869
Accumulated deficit prior to reentering development stage			(49,339,053	)			(48,370,395	)
Common stock subscribed (4,500,000 and 1,058,201 shares issuable, respectively at February 28, 2015 and August 31, 2014)			20,572				5,000
Total stockholders' deficit			(1,133,763	)			(664,718	)
Total liabilities and stockholders' deficit		$	3,611,699			$	2,135,458

 

See accompanying notes to unaudited condensed consolidated financial statements.

ONCOLOGIX TECH, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 

		For the Three Months Ended								For the Six Months Ended
		February 28,				February 28,				February 28,				February 28,
		2015				2014				2015				2014
Revenues		$	1,227,877			$	983,758			$	2,389,751			$	1,708,391
Cost of revenues			904,297				748,596				1,765,327				1,243,152
Gross profit			323,580				235,162				624,424				465,239
Operating expenses:
General and administrative			459,826				482,383				913,754				759,744
Research and development expense			—				—				10,000				—
Depreciation and amortization			4,688				6,040				9,333				11,493
Total operating expenses			464,514				488,423				933,087				771,237
Loss from operations			(140,934	)			(253,261	)			(308,663	)			(305,998	)
Other income (expense):
Acquisition costs											—				—
Interest and finance charges			(381,263	)			(373,103	)			(652,106	)			(467,359	)
Interest and finance charges - related parties			(268	)			(774	)			(1,051	)			(17,264	)
Loss on conversion of notes payable - related parties			—				(57,197	)			—				(93,577	)
Loss on disposal of assets			—				—				—				(28,748	)
Other income (expenses)			(2,904	)			(497	)			(6,838	)			(497	)
Total other income (expense)			(384,435	)			(431,571	)			(659,995	)			(607,445	)
Loss from continuing operations			(525,369	)			(684,832	)			(968,658	)			(913,443	)
Discontinued operations
Operating loss from discontinued operations			—				—				—				(36	)
Gain on disposal of discontinued operations			—				—				—				95,564
Gain from discontinued operations			—				—				—				95,528
Less loss attributable to noncontrolling interest			—				—				—				—
Net gain from discontinued operations			—				—				—				95,528
Net loss before income taxes			(525,369	)			(684,832	)			(968,658	)			(817,915	)
Income taxes			—				—				—				—
Net loss attributable to common shareholders		$	(525,369	)		$	(684,832	)		$	(968,658	)		$	(817,915	)
Gain (loss) per common share, basic and diluted:
Continuing operations		$	(0.00	)		$	(0.01	)		$	(0.01	)		$	(0.01	)
Discontinued operations			—				—				—				0.00
		$	(0.00	)		$	(0.01	)		$	(0.01	)		$	(0.01	)
Weighted average number of shares
outstanding - basic and diluted			180,298,786				89,975,943				159,278,141				84,612,101

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

ONCOLOGIX TECH, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

		For the Six Months Ended
		February 28,				February 28,
		2015				2014
Operating activities:
Net loss		$	(968,659	)		$	(817,915	)
Net gain from discontinued operations			—				(95,528	)
Net loss from continuing operations			(968,659	)			(913,443	)
Adjustments to reconcile net loss to net cash used
in operating activities:
Depreciation and amortization			9,334				11,493
Loss on disposal of property and equipment			—				28,748
Stock based compensation			—				91,163
Amortization of discount on notes payable and warrants			177,839				18,021
Loss on conversion of notes payable - related parties			—				93,578
Non-cash interest charges			154,900				—
Issuance of stock and warrants for fees			62,500				302,659
							—
Changes in operating assets and liabilities:
Accounts receivable			(123,799	)			(144,229	)
Prepaid expenses and other current assets			(2,829	)			2,286
Prepaid commissions and finders' fees			2,981				—
Deposits and other assets			(33,001	)			(45,000	)
Accounts payable and other accrued expenses			294,306				17,365
Accrued interest payable - related parties			1,051				(60,983	)
Accrued interest payable			62,508				136,061
Net operating cash flows - continuing operations			(362,869	)			(462,281	)
Net operating cash flows - discontinued operations			—				95,528
Net cash used in operating activities			(362,869	)			(366,753	)
Investing activities:
Purchase of property and equipment			(1,166	)			(878	)
Cash acquired from Amian Health Services			—				8,646
Acquisition of Amian Health Services			—				(75,000	)
Acquisition of Esteemcare and Affordable			(560,984	)			—
Net cash used in investing activities			(562,150	)			(67,232	)
Financing activities:
Proceeds from issuance of convertible notes			250,000				525,000
Proceeds from issuance of notes payable			1,710,000				358,848
Proceeds from the issuance of common stock			—				10,000
Repayment of notes payable			(627,551	)			(300,263	)
Repayment of notes payable - related parties			(42,514	)			(4,600	)
Repayment of inventory financing agreements			(178,066	)			—
Repayment of convertible notes payable			(175,413	)			(109,206	)
Net cash provided by financing activities			936,456				479,779
Net increase (decrease) in cash and cash equivalents			11,437				45,794
Cash and cash equivalents, beginning of period			17,504				39,456
Cash and cash equivalents, end of period		$	28,941			$	85,250

 

See accompanying notes to unaudited condensed consolidated financial statements.

 ONCOLOGIX TECH, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 1 - ORGANIZATION AND DESCRIPTION OF THE COMPANY

 

Oncologix Tech, Inc. is a diversified medical holding company with operating segments in medical device, healthcare services and medical products and technologies. We operate and manufacture Class II medical device products, deliver Personal Healthcare Services and provide Home Medical Equipment (HME) and Durable Medical Equipment (DME) sales in licensed markets. For its clients, Oncologix provides FDA approved medical devices, State licensed healthcare services and medical product sales. For its shareholders, Oncologix operates profitable business divisions that build, maintain and nourish shareholder value. The Company’s corporate mission is to be the best small cap medical device and healthcare services holding company in North America.

 

We were originally formed in 1995 and in 2000 we changed our name to "BestNet Communications Corp." At that time we provided worldwide long distance telephone communication and teleconferencing services to commercial and residential consumers through the internet, which we disposed of in 2007 due to lack of profitability. In July 2006 we changed our business model to medical device products.  In July 2006 we acquired JDA Medical Technologies, Inc. ("JDA") and merged this business into Oncologix Corporation, our wholly owned subsidiary.  On January 22, 2007, we changed our name to Oncologix Tech, Inc., to reflect this new business model. Our business at this time was the development of a medical device for brachytherapy (radiation therapy), called the “Oncosphere” (or “Oncosphere System”), for the advanced medical treatment of soft tissue cancers. Due to a lack of funding, we suspended these development activities on December 31, 2007. On November 1, 2013, due to the development of the brachytherapy device being several years away, indication that the product could not be marketed and no guarantee of FDA approvals, it was determined that continued financial support of this product by Oncologix Corporation would cost the Company substantial capital beyond its means and the Company’s management and Board of Directors disposed of Oncologix Corporation and its Brachytherapy medical device subsidiary. Furthermore, as part of the disposal, the Company was relieved of over $90,000 in debt.   

 

On March 22, 2013, we acquired all the outstanding stock of Dotolo Research Corporation (“Dotolo”), a FDA Registered, Class II, medical device manufacturer with 25 years of product sales in the hydro-colonic irrigation, bowel preparation market. Dotolo Research Corporation began operations in 1989 and sells hardware and disposable products to a customer base of over 900+ customers both domestically and internationally.  The Company currently operates in a limited, but competitive environment in hydro-colonic irrigation, of which there are only four (4) companies approved by the FDA to manufacture a Class II medical device for colonic-hydro therapy.  Since the acquisition, we have not had significant revenues from sales of our products, including sales to medical facilities due to a lack of operating capital needed to procure raw material inventory to currently fill customers’ orders. We are currently in the final phase of new product hardware redesign which we believe will allow Dotolo Research the ability to successfully enter into the medical markets to become the dominate market leader.

 

On August 1, 2013, we acquired the outstanding stock of Angels of Mercy, Inc. (“AOM”). Angels provides non-medical, Personal Care Attendant (PCA) services, Supervised Independent Living (SIL), Long-Term Senior Care, and other approved health service programs performed by a trained caregiver that will meet the health service needs of beneficiaries whose disabilities preclude the performance of certain independent living skills related to the activities of daily living (ADL).

 

On December 10, 2013, Angels of Mercy, Inc. acquired the assets of Amian Health Services LLC and Amian Health Services of Alex LLC, herein after referred to as “Amian”.  Amian delivers health-care care-services who provide routine health and personal care support with Activities of Daily Living (ADL) to clients with physical impairments or disabilities in private homes, nursing care facilities, hospice care settings, and other residential settings. Amian holds both PCA-Medicaid Waiver Provider and Residential Rehabilitation/Supervised Independent Living (SIL), and personal care services for Veterans with licenses issued by the Division of Licensing and Certification of the Department of Social Services, Veterans Administration Social Services and the Louisiana Department of Health and Hospitals.  All administrative personnel of Amian have been merged to gain operating synergies. This company changed its name to Amian Angels, Inc. (“Amian Angels”) in August 2014.

 

On July 21, 2014 we formed Advanced Medical Products and Technologies Inc. to enter into the Durable Medical and Home Medical Equipment markets. We anticipate acquiring active companies in this area to develop our Medical Products and Technologies Segment.

 

 ONCOLOGIX TECH, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

On September 25, 2014, we acquired the outstanding stock of Esteemcare, Inc. and its wholly owned subsidiary Affordable Medical Equipment Solutions, Inc. Esteemcare, Inc is a Durable and Home Medical equipment and supply distributor for respiratory therapy and is Accredited by the “Joint Commission on Healthcare Organizations”.

 

Esteemcare targets patients with sleep obstructive disorders or related chronic illnesses who are insured by Medicare, Medicaid, third-party insurers, or have the ability to pay for our products from their own private resources. Sleep apnea is a serious sleep disorder that occurs when a person's breathing is interrupted during sleep. People with untreated sleep apnea stop breathing repeatedly during their sleep, sometimes hundreds of times. This means the brain -- and the rest of the body -- may not get enough oxygen.

 

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

BASIS OF PRESENTATION

 

In the opinion of management, the accompanying balance sheets and related interim statements of income, cash flows, and stockholders' equity include all adjustments, consisting only of normal recurring items, necessary for their fair presentation in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP"). Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Actual results and outcomes may differ from management's estimates and assumptions. Interim results are not necessarily indicative of results for a full year.

 

PRINCIPLES OF CONSOLIDATION

 

The unaudited consolidated financial statements for the three and six months ended February 28, 2015 and 2014 include the accounts of Oncologix Tech, Inc. and its wholly owned subsidiaries, Dotolo Research Corporation (“Dotolo”), Amian Angels, Inc. (“Amian”), Advanced Medical Products & Technologies Inc. (“AMPT”), Esteemcare Inc. and Affordable Medical Equipment Solutions Inc. (collectively “Esteemcare”) Dotolo and Amian are Louisiana Corporations. AMPT is a Nevada corporation. Esteem & Affordable are South Carolina corporations. All significant intercompany accounts and transactions have been eliminated in consolidation.

 

USE OF ESTIMATES

 

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reportable amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

SEGMENT INFORMATION

 

ASC 280-10 defines operating segments as components of a company about which separate financial information is available that is evaluated regularly by the Company’s Chief Executive Officer and Chief Financial Officer in deciding how to allocate resources and in assessing performance. The Company currently has three business segments; medical device manufacturing (Dotolo), personal care services (Amian) and medical products and technologies (AMPT and Esteem & Affordable.

 

REVENUE RECOGNITION

 

Revenue is recognized by the Company in accordance with Accounting Standards Codification Topic (“ASC”) 605. Accordingly, revenue is recognized when all the following criteria are met: persuasive evidence of an arrangement exists; delivery has occurred; the seller’s price to the buyer is fixed and determinable; and collectability is reasonably assured. Currently, the primary revenue for the Company is derived from its sales in its Personal Care Services and Medical Products and Technologies Segments’.

 

ONCOLOGIX TECH, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

Amian is reimbursed for each approved “Unit of Service” provided, as determined by the Health Care Financing Administration (HCFA), the Department of Health & Hospitals and the Department of Social Services and based upon a detailed Case Management, Plan of Care for each beneficiary. A unit of service for PCA services will be one-half hour. At least fifteen (15) minutes of service must be provided to the individual in order for Amian Angels to bill for a unit of service. A maximum of 1,825 hours (3,650 half-hour units) per beneficiary, per year can be billed under the Medicaid waiver program. Our primary payer sources is the State of Louisiana, the Department of Veterans Administration and Private Pay individuals who reimburse us for the services we provide. We currently experience a two percent claims rejection rate. With the acquisition of Amian, Amian Angels now has private pay clients as well as Veterans Administration Social Services clients.

 

Esteemcare recognizes revenue related to product sales upon delivery to customers provided that we have received and verified any written documentation required to bill Medicare, other government agencies, third-party payers, and patients. For product shipments for which we have not yet received the required written documentation, revenue recognition is delayed until the period in which those documents are collected and verified. We record revenue at the amounts expected to be collected from government agencies, other third-party payers, and from patients directly. Government and insurance payers’ generally require patient compliance with product usage. Accordingly, most pay for the product purchases over a multi-month plan, generally 10 to 13 months. We record these revenues as received since the transfer of ownership is not guaranteed until the full purchase price is paid to us. We record, if necessary, contractual adjustments equal to the difference between the reimbursement amounts defined in the fee schedule and the revenue recorded per the billing system. These adjustments are recorded as a reduction of both gross revenues and accounts receivable. We analyze various factors in determining revenue recognition, including a review of specific transactions, current Medicare regulations and reimbursement rates, historical experience and the credit-worthiness of patients. Medicare reimburses at 80% of the government-determined prices for reimbursable supplies, and we bill the remaining balance to either third-party payers or directly to patients.

 

CASH AND CASH EQUIVALENTS

 

The Company considers all highly liquid instruments, with an initial maturity of three (3) months or less to be cash equivalents.

 

ACCOUNTS RECEIVABLE

 

The Company’s receivables in its medical device segment are subject to credit risk, and the Company typically does not require collateral on its accounts receivable. Receivables are generally due within 30 days. The Company maintains an allowance for uncollectable receivables that reduces the receivables to amounts that are expected to be collected. .

 

The lead time for account receivables in our Personal Care service divisions ranges from 14 to 90 days. The majority of the Company’s receivables, approximately 90%, are collected within 14 days. We bill the State of Louisiana on a weekly basis and are reimbursed two weeks later via electronic funds transfer. We are able to resubmit any rejected claims an additional two times to Molina Healthcare, the EDI payment provider for payments within the next twelve months. Currently we maintain an allowance for uncollectible receivables at a rejection rate of 2% of outstanding receivables. We analyze our claim rejection rate on a quarterly basis and make quality improvements to reduce the number of rejected claims. Private pay customers are billed semi-monthly. Generally collections occur within 30 days. Veterans Administration (VA) customers are billed monthly. Generally collections occur within 45 to 60 days. Due to the recent governmental shutdown, the current lead time for payments is approximately 90 days. Upon final rejection of any resubmitted claims, the claims are resubmitted and after twelve months the receivables are written off to bad debt expense.

 

Our medical products and technologies accounts receivable are generally due from Medicare, Medicaid, private insurance companies, and our private patients. Accounts receivable are reported net of allowances for contractual adjustments and uncollectible accounts. The collection process is time consuming, complex and typically involves the submission of claims to multiple layers of payers whose payment of claims may be contingent upon the payment of another payer. As a result, our collection efforts may be active for up to 18 to 24 months from the initial billing date. In accordance with regulatory requirements, we make reasonable and appropriate efforts to collect our accounts receivable, including deductible and co-payment amounts, in a manner consistent for all classes of payers.

 

 ONCOLOGIX TECH, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

INVENTORY

 

Inventories are stated at cost and are held on a first-in, first-out basis. Our inventory in our medical device segment consists primarily of miscellaneous hardware parts. Our inventory in our medical products and technologies segment consists of masks, CPAP machines, BiPAP machines and other necessary breathing equipment and supplies.

 

PROPERTY AND EQUIPMENT

 

Property and equipment is recorded at cost. Depreciation is provided for on the straight-line method over the estimated useful lives of the related assets as follows:

 

Furniture and fixtures	5 to 10 years
Computer equipment	5 years
Equipment	5 to 10 years
Software	3 to 5 years

 

The cost of maintenance and repairs is charged to expense in the period incurred. Expenditures that increase the useful lives of assets are capitalized and depreciated over the remaining useful lives of the assets. When items are retired or disposed of, the cost and accumulated depreciation are removed from the accounts and any gain or loss is included in income.

 

LONG-LIVED ASSETS

     ASC 360 – Property, Plant and Equipment addresses financial accounting and reporting for the impairment or disposal of long-lived assets. The Company periodically evaluates whether events and circumstances have occurred that may warrant revision of the estimated useful life of property and equipment or whether the remaining balance of property and equipment, or other long-lived assets, should be evaluated for possible impairment. Instances that may lead to an impairment include: (i) a significant decrease in the market price of a long-lived asset group; (ii) a significant adverse change in the extent or manner in which a long-lived asset or asset group is being used or in its physical condition; (iii) a significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset or asset group, including an adverse action or assessment by a regulatory agency; (iv) an accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of a long-lived asset or asset group; (v) a current-period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset or asset group; or (vi) a current expectation that, more likely than not, a long-lived asset or asset group will be sold or otherwise disposed of significantly before the end of its previously estimated useful life.

An estimate of the related undiscounted cash flows, excluding interest, over the remaining life of the property and equipment and long-lived assets is used in assessing recoverability. Impairment loss is measured by the amount which the carrying amount of the asset(s) exceeds the fair value of the asset(s). The Company primarily employs two methodologies for determining the fair value of a long-lived asset: (i) the amount at which the asset could be bought or sold in a current transaction between willing parties or (ii) the present value of estimated expected future cash flows grouped at the lowest level for which there are identifiable independent cash flows.

 

GOODWILL AND OTHER INTANGIBLE ASSETS

 

The Company adopted Accounting Standards Update 2011-08 “Intangibles – Goodwill and Other (Topic 350): Testing Goodwill for Impairment (“ASU 2011-08”) in the fourth quarter of fiscal 2014 due to its recent acquisition of Dotolo Research Corporation and Angels of Mercy, Inc. ASU 2011-08 permits an entity to first assess qualitative factors to determine whether it is more likely that not that the fair value of a reporting unit is less than its carrying amount. Goodwill represents the excess of the cost of a business combination over the fair value of the net assets acquired and these costs are subject to annual impairment tests.

 

 ONCOLOGIX TECH, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

We accounted for the acquisition of Dotolo, Amian and Esteemcare using the acquisition method of accounting under ASC 805 and ASC 810-10-65. The purchase price was allocated first to identifiable current then fixed assets as well as liabilities assumed. We then earmarked identifiable intangibles, with the remainder to goodwill. We identified patents as our identifiable asset for Dotolo Research Corporation. Amounts allocated to Goodwill for the acquisition of Dotolo are based on expanding our product into the medical market and the potential upside of the sale with a FDA medical device product with a reimbursement code. Dotolo is one of four companies worldwide with an FDA approved, Class II medical device product. Amounts allocated to goodwill for Amian and Esteemcare are based on increased clients and future revenues.

The Company evaluates the recoverability of its indefinite lived intangible assets, which consist of Dotolo, Amian and Esteemcare, based on estimates of future royalty payments that are avoided through its ownership of the intangibles and patents, discounted to their present value. In determining the estimated fair value of the intangibles and patents, management considers current and projected future levels of revenue based on its plans for Dotolo, business trends, prospects and market and economic conditions. See Note 4 – Acquisitions for further information on the acquisition of Dotolo.

We follow the two step process in ASC 350-20-35 for impairment testing. In the first step we compare the fair value of the reporting unit as a whole to its carrying value, including goodwill. For both reporting units, we have determined that the reporting units’ fair value exceeds its carrying value. We also compare the carrying value of goodwill by itself for both reporting units.

The following explains the results of our impairment testing. We have allocated $564,075 of goodwill to the Angels of Mercy, Inc. reporting unit. As of February 28, 2015 the fair value exceeds the carrying value of goodwill by 36%. We have allocated $1,217,704 of goodwill to the reporting unit Dotolo Research Corporation. As of February 28, 2015 the fair value exceeds the carrying value of goodwill by 42%. We have allocated $622,610 of goodwill the Esteemcare reporting unit. As of February 28, 2015 the fair value exceeds the carrying value of goodwill by 49%. In calculating the valuation, we used a discounted cash flow method based on the future 5 years cash flows of each reporting unit. We used a discount rate of 8% which is currently higher that the current long term interest rate. An increase in the overall national interest rate could have a negative impact on our valuation. An additional risk is the possibility of cash flow projections falling short of our 5 year estimate amount.

 

 

ADVERTISING COSTS

 

Advertising costs included with selling, general and administrative expenses in the accompanying consolidated statements of operations were minimal for the three and six months ended February 28, 2015 and 2014. Such costs are expensed as incurred.

 

INCOME TAXES

 

The Company adopted the provisions of FASB ASC 740 - Income Taxes provides detailed guidance for the financial statement recognition, measurement and disclosure of uncertain tax positions recognized in the financial statements. Income taxes are determined using the asset and liability method. This method gives consideration to the future tax consequences associated with temporary differences between the carrying amounts of assets and liabilities for financial statement purposes and the amounts used for income tax purposes.

 

FAIR VALUE OF FINANCIAL INSTRUMENTS

 

The estimated fair values for financial instruments are determined at discrete points in time based on relevant market information. These estimates involve uncertainties and cannot be determined with precision. The carrying amounts of accounts payable, accrued expenses, and notes payable approximate fair value.

 

 ONCOLOGIX TECH, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

STOCK-BASED COMPENSATION

 

The Company has a stock-based compensation plan, which is described more fully in Note 12. The Company accounts for stock-based compensation in accordance with ASC 718. Under the fair value recognition provisions of this statement, share-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense over the vesting period. The Company estimates the fair value of stock options granted using the Black-Scholes option valuation model. The fair value of all awards is amortized on a straight-line basis over the vesting periods. The expected term of awards granted represent the period of time they are expected to be outstanding. The Company determines the expected term based on historical experience with similar awards, giving consideration to the contractual terms and vesting schedules. The Company estimates the expected volatility of its common stock at the date of grant based on the historical volatility of its common stock. The risk-free interest rate is based on the U.S. treasury security rate estimated for the expected life of the options at the date of grant. If actual results differ significantly from estimates, stock-based compensation could be impacted.

 

INVENTORY FINANCING AGREEMENTS

 

Our inventory finance agreements consist of qualified for-sale equipment purchases. Qualifying inventory purchases are grouped into a 12 month finance agreements allowing the company to spread the payments for this inventory over a twelve month period. All inventory finance agreements are interest free and consist of only minor fees for setup.

 

CONVERTIBLE DEBT

 

Interest on convertible debt is calculated using the simple interest method. The company recognizes a beneficial conversion feature to the extent the conversion price is less than the closing stock price on the issuance of the convertible notes. The Company also follows ASC 470-50 and ASC 470-20 regarding changes in the terms of the convertible notes and the induced conversion of its convertible debt.

 

RECLASSIFICATIONS

 

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

 

STOCK INCENTIVE PLANS

 

Share based payment compensation costs for equity-based awards are measured on the grant date based on the fair value of the award on that date and is recognized over the required service period. The fair-value of stock option awards is estimated using the Black-Scholes model. Fair value of restricted stock awards is based upon the quoted market price of the common stock on the date of grant.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 ONCOLOGIX TECH, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

NET LOSS PER COMMON SHARE

 

Basic earnings (loss) per share is calculated under the provisions of ASC 260 which provides for calculation of “basic” and “diluted” earnings per share. Basic earnings per share includes no dilution and is calculated by dividing income (loss) available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share is calculated based on the weighted average number of common shares outstanding during the period plus the dilutive effect of common stock purchase warrants and stock options using the treasury stock method and the dilutive effects of convertible notes payable and convertible preferred stock using the if-converted method. On Basic and diluted earnings per share for the three and six months ended February 28, 2015 and 2014 are as follows:

 

		For the Three Months Ended								For the Six Months Ended
		February 28,				February 28,				February 28,				February 28,
		2015				2014				2015				2014
Net gain (loss) attributable to common shareholders
Continuing operations		$	(525,369	)		$	(684,832	)		$	(968,658	)		$	(913,443	)
Discontinued operations			—				—				—				95,528
		$	(525,369	)		$	(684,832	)		$	(968,658	)		$	(817,915	)
Weighted average shares outstanding			180,298,786				89,975,943				159,278,141				84,612,101
Loss per common shares, basis and diluted
Continuing operations		$	(0.00	)		$	(0.01	)		$	(0.01	)		$	(0.01	)
Discontinued operations			—				—				—				0.00
		$	(0.00	)		$	(0.01	)		$	(0.01	)		$	(0.01	)

 

Due to the net losses during the three and six months ended February 28, 2015 and 2014, basic and diluted loss per share was the same, as the effect of potentially dilutive securities would have been anti-dilutive. Shares attributable to convertible notes, stock options, preferred stock and warrants not included the diluted loss per share calculation. Below lists all dilutive securities as of February 28, 2015 and 2014:

 

		As of
		February 28,				February 28,
		2015				2014
			Underlying				Underlying
Description			Common Shares				Common Shares
Convertible preferred stock			78,564,000				22,500,000
Convertible notes payable			123,452,480				6,433,965
Options			6,173,750				6,186,250
Warrants			30,583,333				17,000,000
Total potentially dilutive securities			238,773,563				52,120,215

 

 

 

ONCOLOGIX TECH, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

SEGMENT INFORMATION

 

ASC 280-10 defines operating segments as components of a company about which separate financial information is available that is evaluated regularly by the Company’s Chief Executive Officer and Chief Financial Officer in deciding how to allocate resources and in assessing performance. The Company currently has three business segments; medical device manufacturing, personal care services and medical products and technologies.

 
RECENT ACCOUNTING PRONOUNCEMENTS

 

We have evaluated all Accounting Standards Updates through the date the financial statements were issued and do not believe any will have a material impact.

 

New Accounting Standard

 

In July 2012, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2012-02 “Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment” (“ASU 2012-02”). ASU 2012-02 permits entities to first assess qualitative factors to determine whether it is more likely than not that the fair value of an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment test. Under the amendments in ASU 2012-02, an entity is not required to calculate the fair value of an indefinite-lived intangible asset unless it determines that it is more likely than not that the fair value of the asset is less than its carrying amount. An entity also will have the option to bypass the qualitative assessment for any indefinite-lived intangible asset in any period and proceed directly to performing the quantitative impairment test. ASU 2012-02 is effective for interim and annual indefinite-lived intangible asset impairment tests performed for fiscal years beginning on or after September 15, 2012, with early adoption permitted. The Company’s adoption of ASU 2012-02 is not expected to have an impact on its consolidated financial statements.

 

 

NOTE 3 - GOING CONCERN

 

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company has incurred losses from operations over the past several years and anticipates additional losses in fiscal 2015 and prior to achieving breakeven.

 

During the year ended August 31, 2013 we acquired Dotolo Research Corporation and Angels of Mercy, Inc. In December 2013, through Amian Angels, we also acquired the assets of Amian Health Services and changed the company’s name to Amian Angels Inc. In September 2014 we acquired Esteemcare Inc. and Affordable Medical Equipment Solutions Inc. While these acquisitions greatly increase the value of our Company, the combined operations of OCLG are not cash flow positive at this time. Amian and Esteemcare are currently cash flow positive but alone is unable to support all the corporate overhead or needs of our other subsidiary, Dotolo. We anticipate that we will require approximately $1,000,000 to operate through December 31, 2015. Approximately $500,000 will be required to fund corporate overhead including debt servicing with the balance to invest into raw material inventory, manufacturing and new product development at Dotolo Research. Additional funding will allow us to meet our current sales demands and expenses of Dotolo, Amian Angels and Oncologix, while keeping our public filings current.

 

Our Company is not profitable and we have to rely on debt and equity financings to fund operations. There is no assurance that the business activities of Dotolo will achieve breakeven status by the end of 2015. Significant delays in achieving break-even status could affect the ability to obtain future debt and equity funding. These factors raise substantial doubt about the Company’s ability to continue as a going concern. After auditing our financial statements, our independent auditor issued a going concern opinion and our ability to continue is dependent on our ability to raise additional capital. Currently there is a substantial doubt in the Company’s ability to continue as a going concern.

 

 

 ONCOLOGIX TECH, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 4 – ACQUISITIONS

 

Amian Health Services

 

On December 10, 2013, our subsidiary Angels of Mercy acquired the assets of Amian Health Services. Pursuant to the Agreement, the Owners sold all the assets for $100,000 represented by a down payment of $75,000 at closing and a one year Secured Promissory Note for $25,000.

 

The acquisition was accounted for using the acquisition method of accounting and the purchase price was allocated to the assets acquired and liabilities assumed based upon their estimated fair values at the date of acquisition. Identifiable intangible assets include patents and purchased goodwill.

 

The purchase price was allocated to assets acquired and liabilities assumed as follows:

 

Cash and cash equivalents		$	8,646
Property and equipment			6,000
Purchased goodwill			85,354
Total assets acquired		$	100,000

 

On September 25, 2014, we acquired all the outstanding shares of Esteemcare Inc. and its wholly owned subsidiary, Affordable Medical Equipment Solutions Inc. in exchange for a $400,000 down payment, $100,000 note and payoff of $173,433 in operating leases.

 

The acquisition was accounted for using the acquisition method of accounting and the purchase price was allocated to the assets acquired and liabilities assumed based upon their estimated fair values at the date of acquisition. Identifiable intangible assets include patents and purchased goodwill.

 

The purchase price was allocated to assets acquired and liabilities assumed as follows:

 

Cash and cash equivalents		$	12,449
Accounts receivable (net)			573,130
Inventory			106,165
Prepaid expenses and other current assets			860
Property and equipment			3,008
Deposits and other assets			10,551
Purchased goodwill			622,610
Total assets acquired		$	1,328,773
Accounts payable and other accrued expenses		$	454,877
Inventory financing agreements			125,463
Notes payable			75,000
Total liabilities assumed		$	655,340

 

 

 

 

ONCOLOGIX TECH, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 5 – DISCONTINUED OPERATIONS

 

During October 2013 the Company’s management and Board of Directors determined to dispose of Oncologix Corporation its Brachytherapy medical device subsidiary. On November 1, 2013, the company entered into a settlement agreement with Firetag, Stoss & Dowdell, PC., our former attorneys. Per the terms of the settlement agreement, we exchanged our 90% ownership and executed a $50,000 promissory note payable to Firetag in exchange for the forgiveness by Firetag of $145,522 in prior legal billings. The promissory note bears interest at 4% and requires 12 monthly payments of $4,257.49 beginning on December 1, 2013. Detailed below are the income and expenses related to these discontinued operations:

 

		For the Three Months Ended								For the Six Months Ended
		February 28,				February 28,				February 28,				February 28,
		2015				2014				2015				2014
Operating expenses:
General and administrative		$	—			$	—			$	—			$	36
Depreciation and amortization			—				—				—				—
Total operating expenses			—				—				—				36
Loss from operations			—				—				—				(36	)
Other income (expense):
Total other income (expense)			—				—				—				—
Loss from discontinued operations			—				—				—				(36	)
Gain on disposal of discontinued operations			—				—				—				95,564
Loss from discontinued operations			—				—				—				95,528
Less loss attributable to noncontrolling interest			—				—				—				—
Net loss from discontinued operations		$	—			$	—			$	—			$	95,528

 

NOTE 6 – INVENTORY

 

We have inventory, on hand in the amounts of $137,436 and $31,271 as of February 28, 2015 and 2014, respectively. Our inventory as of February 28, 2015 relates to our medical device manufacturing segment. Inventories at February 28, 2015 also included $106,165 related to our medical products and technologies division. Our inventory in our medical device segment consists primarily of miscellaneous parts. Our inventory in our medical products and technologies segment consists primarily of disposable products such as masks, oxygen tubing, and other breathing equipment supplies. We also hold minor amounts of CPAP machines and BiPAP machines. Our machine purchases are generally set up on a Just-in-time order system. We do not maintain any inventory for our personal service care segment or our medical products division. We are currently in the redesign and final bench testing phase of our Toxygen hardware system and disposable products. The new hardware design will position Dotolo Research with a unique technological advantage in the medical markets.. Currently, inventory on hand is made up of miscellaneous Toxygen hardware parts, custom tooling and molds.

 

 

 

 

 ONCOLOGIX TECH, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 7 - PROPERTY AND EQUIPMENT

 

Property and equipment is composed of the following at February 28, 2015 and August 31, 2014

 

		February 28,				August 31,
		2015				2014
Furniture		$	14,118			$	12,688
Office Equipment			13,270				12,962
Computers			23,897				22,321
Software			3,497				3,497
Leasehold improvements			—				—
Equipment			17,623				16,763
Total property and equipment at cost			72,405				68,231
Less: accumulated depreciation and amortization			(34,535	)			(28,264	)
		$	37,870			$	39,967

 

NOTE 8 – OFFICE LEASES

 

The Company leases office space in Alexandria and Lafayette Louisiana and in West Columbia and Charleston SC. Alexandria is on a three year lease; Lafayette a five year lease; West Columbia has one year remaining on its lease; and Charleston is on a three year lease. On March 28, 2014, Dotolo Research moved from its current manufacturing location in Phoenix AZ into E&R Engineer manufacturing facilities located in Tempe, Az. . Rent expense for the three months ended February 28, 2015 and 2014 were $40,873 and $22,302, respectively. Rent expense for the six months ended February 28, 2015 and 2014 were $70,948 and $45,502, respectively. Following are the minimum lease payments:

 

	2015			$	70,909
	2016				126,424
	2017				114,808
	2018				42,448
	Totals			$	354,589

 

NOTE 9 – GOODWILL, PATENTS AND OTHER INTANGIBLE ASSETS

 

We currently carry our patents and registrations net of amortization. As of February 28, 2015 and 2014, the Company has a capitalized cost of patents and registrations in the amount of $122,479 and accumulated amortization of 101,045. Our patents and registrations are amortized over a 20 year period. Amortization for each of the next 4 fiscal years, assuming no impairment, will be $6,124 per year.

 

 

 

 

 

 

 

 ONCOLOGIX TECH, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 10 – INVENTORY FINANCE AGREEMENTS

 

Our inventory finance agreements consist of qualified for-sale inventory purchases. These finance agreements are held solely by Esteemcare. Qualifying inventory purchases are grouped into a 12 month finance agreements allowing the company to spread the payments for this inventory over a twelve month period. This allows the company to collect payments for the purchases of that inventory over that time period as most insurance plans spread the purchase payments over a multi-month period, generally 10 to 13 months. All inventory finance agreements are interest free and consist of only minor fees for setup. Below is a listing of our outstanding inventory finance agreements as of February 28, 2015 and 2014 as well as the monthly payment on each agreement.

 

		As of February 28,
		2015				2014				Monthly Payment
LCA 4160		$	8,321			$	—			$	4,161
Wells Fargo (016)			6,250				—				2,083
Wells Fargo (017)			20,827				—				4,165
VGM (322)			41,627				—				5,947
Wells Fargo (018)			43,215				—				6,174
VGM (323)			48,158				—				5,351
VGM (324)			43,350				—				3,613
DLL (61942)			124,824				—				11,348
DLL (67910)			41,852				—				3,488
DLL (61649)			13,515				—				1,126
Outstanding leases		$	391,939			$	—			$	47,455

 

NOTE 11 — NOTES PAYABLE

 

CONVERTIBLE NOTES PAYABLE:

 

Convertible notes payable consist of the following as of February 28, 2015 and 2014:

 

		February 28,				February 28,
		2015				2014
8.0% convertible note due August 31, 2014		$	75,000			$	100,000
6.0% convertible note due September 2015 (1)			139,025				235,025
8.0% convertible note due November 2015 (net of discount)			17,431				10,206
8.0% convertible note due January 2016 (net of discount)			3,548
12% convertible note due October 2015 (net of discount)			5,968
10% convertible note due October 2015 (net of discount)			—
10% convertible note due August, 2015 (net of discount)			3,288
8% convertible note due January 2016			2,300
8% convertible note due November 2015			4,357
Total unsecured convertible notes payable			250,917				345,231
Less:  Long-Term portion			—				—
Current portion		$	250,917			$	345,231

 

 

ONCOLOGIX TECH, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

The following is a summary of future minimum payments on convertible notes payable as of February 28, 2015:

		Convertible
Fiscal Year Ending August 31,		Notes Payable
2015		$ 250,917

 

During May and June 2007, we issued nine Convertible Promissory Notes in an aggregate principal amount of $700,000. Eight of these notes we-+re converted into common stock in fiscal 2009. The remaining Convertible Promissory Note, in the principal amount of $125,000, was extended on January 28, 2010 initially to March 31, 2012, where the conversion rate was reduced to $.60, and then extended to September 30, 2013. In October 2013 and November 2014, the investor sold two $25,000 positions of principal in the note to another accredited investor and currently holds a note representing the remaining $75,000 in principal. The note has been extended to February 28, 2015. We are currently working with the investor to extend the note. As of February 28, 2015, the Company has accrued interest in the amount of $64,121.

 

On April 1, 2009, we issued to Ms. Lindstrom, our former Chief Executive Officer, a convertible promissory note in lieu of payment of $235,025 in accrued salary owed to Ms. Lindstrom. This note accrues interest at a rate of 6% per annum and was originally due on March 31, 2012. On March 16, 2012, Ms. Lindstrom agreed to extend the due date of the note to September 30, 2013. There was no beneficial conversion feature recognized upon the issuance of this note. An outside party has entered into an assignment and settlement agreement with Ms. Lindstrom to purchase the note. The note assignment is currently in default. During fiscal 2014, the Assignee has converted $46,000 of principal into 8,788,171 shares of stock reducing the current balance of the note to $189,025. During fiscal 2015, the Holder assigned $50,000 of principal to another accredited investor. As of February 28, 2015, the Company has accrued interest in the amount of $81,362.

 

On October 2, 2013, the Company entered into a securities transfer agreement with an accredited investor as well as a current convertible note holder. The agreement called for the accredited investor to purchase $25,000 of the current convertible note holder note. The Company issued to the accredited investor a convertible promissory note bearing interest at 8% and convertible at a 45% discount into shares of the Company’s common stock using a three-day average of the lowest closing bid prices for the twenty trading days immediately preceding the conversion date. On October 3, 2013, the investor converted $15,620 into 4,000,000 shares of the Company’s common stock at a rate of $.003905 per share. On December 3, 2013, the investor converted the remaining principal of $9,380 into 2,008,559 shares of the Company’s common stock at a rate of $0.00467 per share.

 

On October 2, 2013 we issued a convertible promissory note in the principal amount of $25,000. This promissory note bears interest at a rate of 8% per annum and is due on October 2, 2013. The note is convertible at a 45% discount of the average of the three lowest closing bid prices in the twenty days preceding the date of conversion. At no time may the holder of the note convert the note into shares exceeding 4.99% of the Company’s then outstanding common stock shares. We recorded a beneficial conversion feature of $25,000. On April 6, 2014 the holder elected to convert $17,074 in principal plus $690 in accrued interest into 5,383,007 shares of common stock at a conversion price of $.0033. In August 1, 2014 the remaining principal of $7,926 plus accrued interest of $530 was converted into 3,416,764 shares of common stock at a conversion rate of $.002475.

 

On March 19, 2014 we issued a convertible promissory note in the principal amount of $26,500 to an unrelated accredited investor. This promissory note bears interest at a rate of 12% per annum and is due on March 19, 2015. The note is convertible at a 38% discount of the lowest closing bid prices in the thirty days preceding the date of conversion. At no time may the holder of the note convert the note into shares exceeding 4.99% of the Company’s then outstanding common stock shares. We recorded a beneficial conversion feature of $26,500. During fiscal 2015, the investor converted $26,500 of principal plus accrued interest of $1,384 into 16,801,705 shares of common stock.

 

 

 

 

 ONCOLOGIX TECH, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

On April 8, 2014 we issued a convertible promissory note in the principal amount of $50,000 to an unrelated accredited investor. This promissory note bore interest at a rate of 12% per annum and is due on April 8, 2015. The note is convertible at a 35% discount of the average 4 lowest closing bid prices in the twenty days preceding the date of conversion. At no time may the holder of the note convert the note into shares exceeding 4.99% of the Company’s then outstanding common stock shares. We recorded a beneficial conversion feature of $50,000. This note was paid in full on October 2, 2014.

 

On April 25, 2014 we issued a convertible promissory note in the principal amount of $25,000 to an unrelated accredited investor. This promissory note bears interest at a rate of 12% per annum and is due on October 25, 2015. The note is convertible at a 35% discount of the average 4 lowest closing bid prices in the thirty days preceding the date of conversion. At no time may the holder of the note convert the note into shares exceeding 4.99% of the Company’s then outstanding common stock shares. We recorded a beneficial conversion feature of $25,000. During October and November 2014, the entire principal amount of $25,000 was converted into 8,284,469 shares of common stock. As of February 28, 2015, the Company has accrued interest in the amount of $1,646.

 

On May 21, 2014 we issued a convertible promissory note in the principal amount of $115,000 to an unrelated accredited investor. This promissory note bears interest at a rate of 10% per annum. This principal includes a 10% OID in the amount of $10,000, which is being amortized over the term of the note. The note is due in 4 equal installments beginning on the 180^th day after the execution of the note. The company may make the payments in common stock. The note is convertible at a $.009 per share. As additional consideration, the Company issued 9,583,333 5 year warrants with an exercise price of $.009. At no time may the holder of the note convert the note into shares exceeding 4.99% of the Company’s then outstanding common stock shares. We recorded a beneficial conversion feature of $38,322 related to the issuance of the warrants. On November 23, 2014 the Company made a required principal payment of $28,750 plus accrued interest. This note was paid in full on February 23, 2015.

 

On July 16, 2014 we issued a convertible promissory note in the principal amount of $26,500 to an unrelated accredited investor. This promissory note bears interest at a rate of 12% per annum and is due on July 26, 2015. The note is convertible at a 38% discount of the lowest closing bid prices in the thirty days preceding the date of conversion. At no time may the holder of the note convert the note into shares exceeding 4.99% of the Company’s then outstanding common stock shares. We recorded a beneficial conversion feature of $26,500. During the second quarter of fiscal 2015, the company converted $26,500 in principal plus $1,134 of accrued interest into 18,571,550 shares of common stock.

 

On November 17, 2014, the Company entered into a securities transfer agreement with an accredited investor as well as a current convertible note holder. The agreement called for the accredited investor to purchase $25,000 of the current convertible note holder note. The Company issued to the accredited investor a convertible promissory note bearing interest at 8% and convertible at a 30% discount into shares of the Company’s common stock using a five-day average of the lowest closing stock prices immediately preceding the conversion date. The Company recorded a beneficial conversion feature of $10,545. During fiscal 2015, the investor converted the $25,000 in principal plus $85 in accrued interest into 9,641,872 shares of common stock.

 

On November 17, 2014 we issued a convertible promissory note in the principal amount of $25,000. This promissory note bears interest at a rate of 8% per annum and is due on October 2, 2013. The note is convertible at a 30% discount of the average of the five closing stock prices immediately preceding the date of conversion. At no time may the holder of the note convert the note into shares exceeding 4.99% of the Company’s then outstanding common stock shares. We recorded a beneficial conversion feature of $10,545. As of February 28, 2015 the company has accrued interest of $564.

 

On January 22, 2015 we issued a convertible promissory note in the principal amount of $35,000. This promissory note bears interest at a rate of 8% per annum and is due on January 22, 2015. The note is convertible at a 38% discount of the average of the three lowest closing bid prices immediately during the 20 days preceding the date of conversion. At no time may the holder of the note convert the note into shares exceeding 4.99% of the Company’s then outstanding common stock shares. We recorded a beneficial conversion feature of $35,000. As of February 28, 2015 the company has accrued interest of $288.

 

 

 

ONCOLOGIX TECH, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

On January 30, 2015 we issued a convertible promissory note in the principal amount of $50,000. This promissory note bears interest at a rate of 12% per annum and is due on September 30, 2015. The note is convertible at a 38% discount of the average of the three lowest closing bid prices immediately during the 15 days preceding the date of conversion. At no time may the holder of the note convert the note into shares exceeding 4.99% of the Company’s then outstanding common stock shares. We recorded a beneficial conversion feature of $50,000. As of February 28, 2015 the company has accrued interest of $477.

 

On February 5, 2015 the Company entered into a securities transfer agreement with an accredited investor as well as a current convertible note holder. The agreement called for the accredited investor to purchase $50,000 of the current convertible note holder note to repay our former CEO. The Company issued to the accredited investor a convertible promissory note bearing interest at 8% and convertible at a 38% discount of the average of the three lowest closing bid prices immediately during the 20 days preceding the date of conversion. The Company recorded a beneficial conversion feature of $50,000. During fiscal 2015, the investor converted the $39,272 in principal into 14,197,060 shares of common stock. As of February 28, 2015 the company has accrued interest of $167.

 

On February 4, 2015 we issued a convertible promissory note in the principal amount of $35,000. This promissory note bears interest at a rate of 8% per annum and is due on February 4, 2016. The note is convertible at a 38% discount of the average of the three lowest closing bid prices immediately during the 15 days preceding the date of conversion. At no time may the holder of the note convert the note into shares exceeding 4.99% of the Company’s then outstanding common stock shares. We recorded a beneficial conversion feature of $35,000. As of February 28, 2015 the company has accrued interest of $233.

 

On February 12, 2015 we issued a convertible promissory note in the principal amount of $75,000. This promissory note bears interest at a rate of 10% per annum and is due on February 12, 2016. The note is convertible at a 38% discount of the average of the three lowest closing bid prices immediately during the 20 days preceding the date of conversion. At no time may the holder of the note convert the note into shares exceeding 4.99% of the Company’s then outstanding common stock shares. We recorded a beneficial conversion feature of $75,000. As of February 28, 2015 the company has accrued interest of $333

 

On February 25, 2015 we issued a convertible promissory note in the principal amount of $30,000. This promissory note bears interest at a rate of 12% per annum and is due on October 25, 2015. The note is convertible at a 38% discount of the average of the three lowest closing bid prices immediately during the 20 days preceding the date of conversion. At no time may the holder of the note convert the note into shares exceeding 4.99% of the Company’s then outstanding common stock shares. We recorded a beneficial conversion feature of $30,000. As of February 28, 2015 the company has accrued interest of $30.

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ONCOLOGIX TECH, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

CONVERTIBLE RELATED PARTY NOTES PAYABLE:

 

As of February 28, 2015, there are currently no related party convertible notes payable outstanding. The note related to our former CEO is now classified as non-related convertible debt for all comparable periods.

 

 

RELATED PARTY NOTES PAYABLE:

 

		February 28,				February 28,
		2015				2014
6.0% line of credit (2)		$	9,086			$	51,600
Outstanding unsecured related party notes payable		$	9,086			$	51,600
(1)  Note payable to current CEO.

 

During the last two years, Wayne Erwin, our President and CEO, has advanced a total of $51,600 directly to Dotolo in an open advance account. Interest is being accrued at a rate of 6% per annum. As of February 28, 2015 the Company has repaid $42,514 of principal and has accrued interest in the amount of $7,125. There is no specific due date on this note. As of February 28, 2015, the company has accrued $7,393 in interest.

 

During April 2013, Wayne Erwin, our President and CEO, had advanced a total of $10,675 to Oncologix Tech, Inc. This note bore interest at 6%. This note was paid in full in September 2013 together with accrued interest of $223.

 

The following is a summary of future minimum payments on related party notes payable as of February 28, 2015:

		Related Conv.
Fiscal Year Ending August 31,		Notes Payable
2015		$9,086

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 ONCOLOGIX TECH, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

  

OTHER NOTES PAYABLE:

 

		February 28,				February 28,
		2015				2014
18% note payable due January 2015		$	30,000			$30,000
18% note payable due January 2015			20,000			20,000
Time Lease Payment due January 2014			—			(217)
Note payable			6,600			60,600
Bank line of credit loan			43,265			44,900
Note payable - fee reimbursement			—			27,083
6% note payable due December 2014			—			18,878
Merchant Loan due January 2015			—			29,876
Merchant Loan due January 2015			—			27,204
Merchant Loan due January 2016			331,072			-
Non-bank Line of Credit			50,000			-
Note Payable			75,000			-
12% note payable due May 2014			—			5,000
6% note payable due August 2015			—			36,500
6% note payable due October 2017			437,355			517,855
12% note payable due January 2016			70,562			93,524
12% note payable due January 2016 (net of discount)			35,570			69,932
18% note payable due November 2014 (net of discount)			—			4,759
18% note payable due November 2014 (net of discount)			—			5,041
4% note payable due November 2014			—			33,555
14.5% note payable due September 2015			1,533,584			390,794
10% note payable due June 2015 (net of discount)			—			5,740
6% note payable due February 2015 (net of discount)			12,000			10,146
10% note payable due August 2015 (net of discount)			20,344			-
6% note payable due September 2015			68,920			-
6% note payable due September 2015			22,973			-
12% note payable due December 2019			58,509			-
Note payable due March 2015			48,000
Subtotal			2,863,754			1,431,170
Less:  Long-Term portion			(400,800	)		(554,355)
Current portion		$	2,462,954			$876,815

 

 

Notes held by Dotolo

 

On February 27, 2013 our subsidiary Dotolo, entered into a note payable agreement to provide funding to its subsidiary in the principal amount of $30,000. The note bears interest at 18% payable monthly on the 15th and is due in full in January 2015. For the three months ended February 28, 2015, we made interest payments in the amount of $1,350. As of February 28, 2015, we have accrued interest of $1,365.

 

 

 

 ONCOLOGIX TECH, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

On March 17, 2013 our subsidiary Dotolo, entered into a note payable agreement to provide funding to its subsidiary in the principal amount of $20,000. The note bears interest at 18% payable monthly on the 15th and is due in full in January 2015. For the year ended February 28, 2015, we made interest payments in the amount of $900. As of February 28, 2015, we have accrued interest of $990.

 

Our subsidiary has a time lease payment which is due to be paid off in January 2014. As of February 28, 2015, the outstanding balance was $0.

 

During April 2012, our subsidiary Dotolo, entered into a financing agreement to provide up to $150,000 in funding for the subsidiary. The financing agreement was due in January 2013. We entered into a settlement agreement whereby we paid $45,000 from amounts held in reserve by our senior lender and are required to make 10 monthly payments of $1,500. As of February 28, 2015, the current balance is $6,600.

 

Notes held by Amian Angels

 

During fiscal 2014 we borrowed $45,000 from our line of open line of credit with our bank. As of February 28, 2015 the outstanding balance of the line of credit loan was $43,265.

 

In connection with the acquisition of Amian Health Services, the Company entered into a twelve month promissory note in the total principal amount of $25,000. The note bears interest at $6% and requires monthly payments of $2,152. This note was paid in full in December 2014.

 

On September 16, 2013, the Company obtained a merchant loan for additional working capital in the amount of $80,000. The merchant loan bores interest at a rate of 15% and calls for 130 daily payments of $861 for a total repayment amount of $112,000. Out of the net proceeds, the company also paid $20,000 in broker fees and loan fees of $750. This loan was paid in full on January 3, 2014.

 

On November 27, 2013, the Company obtained a merchant loan for additional working capital in the amount of $51,000. This loan requires 180 daily payments in the amount of $306 for a total repayment amount of $55,021. We netted gross proceeds of $46,032 after paying loan fees. This note was paid off March 11, 2014.

 

On December 18, 2013, the Company obtained a merchant loan for additional working capital in the amount of $72,000. This loan requires 82 daily payments in the amount of $888 for a total repayment amount of $72,500. We netted gross proceeds of $49,301 after fees of $699. This note was paid off March 11, 2014.

 

On March 11, 2014, the Company obtained a merchant loan for additional working capital in the amount of $150,000. This loan requires 209 daily payments in the amount of $940 for a total repayment amount of $196,500. We netted gross proceeds of $146,750 after paying loan fees. This note was paid in full in December 2014.

 

On April 18, 2014, the Company obtained a merchant loan for additional working capital in the amount of $120,000. This loan requires 189 daily payments in the amount of $800 for a total repayment amount of $151,200. We netted gross proceeds of $119,301 after paying loan fees. This note was paid in full in December 2014.

 

On July 10, 2014, the Company obtained a merchant loan for additional working capital in the amount of $150,000. This loan requires 132 daily payments in the amount of $1,568 for a total repayment amount of $207,000. We netted gross proceeds of $149,120 after paying loan fees. This note was paid in full in December 2014.

 

On September 11, 2014, the Company obtained a merchant loan for additional working capital in the amount of $100,000. This loan requires 75 daily payments in the amount of $1,999 for a total repayment amount of $149,900. We netted gross proceeds of $99,295 after paying loan fees. This note was paid in full in December 2014.

 

 ONCOLOGIX TECH, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

On December 15, 2014, the Company obtained a merchant loan for additional working capital in the amount of $300,000. This loan requires 252 daily payments in the amount of $1,607 for a total repayment amount of $405,000. We netted gross proceeds of $163,713 after paying loan fees and paying off our other 4 merchant loans. The balance of this loan on February 28, 2015 was $331,072.

 

Notes held by Esteemcare

 

On September 25, 2014, as part of the terms and conditions of the acquisition of Esteemcare Inc. and Affordable Medical Inventory Solutions Inc., the company issued a 1 year note to Imad Siddiqui in the principal amount of $75,000. As of February 28, 2015, this note has not been executed by the holder and accordingly, we have not accrued any interest on this note.

 

Notes held by Oncologix Tech

 

On May 23, 2013, the Company issued a one year note in the amount of $20,000. The note bore interest at a rate of 12% per annum. The Company is required to repay the note at a rate of $1,867 per month, which includes interest, on the 15^th day of each month. The note is secured by certain collateral of our CEO. This note was paid in full in May 2014.

 

On August 1, 2013, in connection with our acquisition of Angels of Mercy, Inc. we entered into a promissory note to pay $65,000 of broker’s fees incurred in the acquisition. Monthly payments of $5,417 are due and payable beginning on August 15, 2013. This note bears no interest. This was paid in full in July 2014.

 

On August 1, 2011 our subsidiary Dotolo, entered into a note payable agreement to provide funding to its subsidiary in the principal amount of $111,500. In December 2013, this note was assumed by Oncologix Tech, Inc. The note bore interest at 6% and matures on August 31, 2015. During January through August 2014, the Board of Directors authorized the conversions of the entire principal and accrued interest amount. During that time frame, the $111,500 in principal was converted into 18,716,229 shares of the Company’s common stock and is considered paid in full.

 

On August 1, 2013, in connection with our acquisition of Angels of Mercy, Inc. we entered into a promissory note to pay $550,000 for the purchase of Angels of Mercy, Inc. Monthly payments of $9,115 are due and payable beginning on November 1, 2013 with a final balloon payment of $205,705 due on October 1, 2017. This note bears interest at a rate of 6%. As of February 28, 2015, the outstanding balance of the note is $437,355.

 

On July 26, 2013 the Company issued an 18 month promissory note in the principal amount of $100,000. These funds were used for the cash down payment for the Angels acquisition. The note bears interest at 18% and requires monthly interest payments of $1,200 beginning on September 26, 2013. In December 2013, we modified the loan agreement to make monthly payments of $6,200. As of February 28, 2015 the outstanding balance was $35,570.

 

On October 1, 2013, the Company borrowed 10,000 in principal from an unrelated investor. The note was due January 2, 2014 and bore interest at 22%. Monthly interest payments of $183.33 are due on the first of each month beginning on November 1, 2013. This note was paid in full on January 3, 2014.

 

On November 5, 2013 and November 8, 2013, the Company entered into two, one-year promissory notes with accredited investors to borrow a total principal amount of $20,000. Each promissory note is $10,000 in principal balance, bore interest at 18% and requires monthly interest payments of $150 each. The company also issued 3,000,000 in cashless warrants as finder’s fees for these funds. The Company recorded a discount of $14,805 for the issuance of the warrants. These notes were paid in full in November 2014.

 

On November 1, 2013, the Company entered into a Settlement Agreement with its former legal counsel. The current balance owed to prior counsel is $145,523. Pursuant to the settlement agreement, the Company agreed to pay $50,000 in the form of a one year promissory note and transfer its 90% ownership interest and all marketing rights of Oncologix Corporation, one of its subsidiaries as full settlement of the current balance owed. The promissory note bears interest of 4% and requires monthly payment of $4,257 beginning on December 1, 2013. This note was paid in full during November 2014.

 

 ONCOLOGIX TECH, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

On January 3, 2014, the Company closed on a 4 million dollar line of credit facility, with an initial draw of $500,000. The Company must meet specific monthly reporting and collateral requirements to further draw on the revolving credit facility. The $500,000 initial draw is secured by a 14.5% promissory note, which is convertible ONLY upon default by the Company. In July 2014, we borrowed an additional $75,000 from the principal we repaid. This note is due in six months with an automatic option to renew after six months. On September 25, 2014, the Company took down a second draw from its $4 million dollar line of credit facility in the amount of $1,200,000. The Company must meet specific monthly reporting and collateral requirements to further draw on the revolving credit facility. The outstanding balance at the time of the draw was $1,533,584 which is secured by twelve month 14.5% promissory note, which is convertible ONLY upon default by the Company. This note is automatically renewable for an additional twelve months. The company is required to pay interest and fees only for the initial 3 months. The balance of this note on February 28, 2015 is $1,533,584.

 

On December 3, 2013, The Company entered into a twelve month promissory note with an accredited investor to borrow a total principal amount of $75,000. The note bears interest of 18% per annum and calls for monthly payments of principal and interest of $1,375 beginning on January 15, 2014 with a balloon payment due December 15, 2014. The Company also issued as additional finders’ fees to the investor, 3,500,000 shares of common stock and 1,000,000 cashless warrants with an exercise price of $.025. As of February 28, 2015, the balance was $70,562. The Company recorded a discount of $5,992 for the issuance of the warrants.

 

On December 20, 2013, the Company issued a 1-year promissory note to a non-related accredited investor in the principal amount of $12,000. This note bears interest at 10% per annum and matures in December 2014. This note was extended to June 2015. As additional consideration for the operating capital loan, the company issued 3,000,000 cashless two-year warrants with an exercise price of $0.02. The Company recorded a discount of $7,746 for the issuance of the warrants. As of February 28, 2015 the Company has accrued interest of $1,437.

 

On February 7, 2014, the Company issued a 1-year promissory note in the principal amount of $15,000 to a non-related accredited investor. This note bears interest at 6% per annum and matures in February 2015. As additional consideration for the operating capital loan, the company issued 1,500,000 two-year warrants with an exercise price of $0.15 and 1,000,000 shares of common stock. The Company recorded an expense of $9,000 for the issuance of the common stock. The Company recorded a discount of $5,151 for the issuance of the warrants. On August 1, 2014 this investor used $10,000 to purchase 1,200,000 shares of common stock. This note was paid in full on February 28, 2015.

 

On August 15, 2014 the Company issued a 1-year promissory note to a non-related accredited investor in the principal amount of $25,000. This note bears interest at 10% per annum and matures in August 2015. As additional consideration for the operating capital loan, the company issued 4,000,000 cashless two-year warrants with an exercise price of $0.065. The Company recorded a discount of $10,177 for the issuance of the warrants. As of February 28, 2015 the Company has accrued interest of $1,368.

 

On September 25, 2014, the Company issued a $75,000 and $25,000 1-year promissory notes bearing interest at 6% in connection with the acquisition of Esteemcare Inc. and Affordable Medical Inventory Solutions Inc. As of February 28, 2015, the outstanding balances of these notes were $68,920 and $22,973, respectively.

 

On November 16, 2014, the Company borrowed $60,000 in principal from an unrelated investor. This note bears interest at a rate of 12% and calls for 60 monthly payments of $1,334.67 beginning on January 19, 2015. The note matures on January 19, 2019. As of February 28, 2015, the outstanding balance of this note was 58,509.

 

On December 16, 2014, the Company borrowed $48,000 in principal from an unrelated investor. This note bears calls for two interest payments, each in the amount of $8,500 in January and February 2015. The note matures on March 16, 2015. As of February 28, 2015, the outstanding balance of this note was 48,000.

 

 

 

 ONCOLOGIX TECH, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

The following is a summary of future minimum payments on r notes payable as of February 28, 2015:

		Related Conv.
Fiscal Year Ending August 31,		Notes Payable
2015		2,407,536
2016		97,813
2017		326,226
2018		14,580
2019		17,599

 

NOTE 12 — STOCKHOLDERS EQUITY

PREFERRED STOCK:

 

Series A Convertible Preferred Stock.

 

The Company is authorized to issue up to 10,000,000 shares of preferred stock, in one or more series, and to determine the price, rights, preferences and privileges of the shares of each such series without any further vote or action by the stockholders. The rights of the holders of common stock will be subject to, and may be adversely affected by, the rights of the holders of any shares of preferred stock that may be issued in the future.  

 

In January 2003, our Board of Directors authorized up to 4,500,000 shares of Series A Convertible Preferred Stock.  Each share of Series A Convertible Preferred stock has a par value of $0.001 and is convertible into one-half share of common stock in upon a cash payment by the holder to the Company of $0.40 per common share.  The Series A Convertible Preferred Stock is entitled to receive, in preference to the common stock, of noncumulative dividends, if declared by the Board of Directors, and a claim on the Company's assets upon any liquidation of the Company senior to the common stock.  These preferred shares are not entitled to voting rights. There are presently outstanding 129,062 shares of Series A Preferred Stock.

 

On March 30, 2003, the Company completed the private placement of Units pursuant to the terms of a Unit Purchase Agreement (the “Units”) with accredited investors. Each Unit consists of the following underlying securities: (i) three shares of the Company’s common stock; (ii) one share of Series A Convertible Preferred Stock, par value $.001 per share; and (iii) one three-year warrant to purchase one share of common stock at a per share price of $0.30. The warrants expired on March 31, 2006. Each share of Series A Convertible Preferred Stock is convertible into one half share of the Company’s common stock in exchange for $0.40 per common share ($.20 for each Series A Convertible Preferred share converted). The securities underlying the Units are not to be separately tradable or transferable apart from the Units until such time as determined by the Company’s Board of Directors. A total of 4,032,743 Units were issued. As of August 31, 2014 and August 31, 2013, there were 129,062 and 129,062 Units outstanding that had not been separated, respectively. These units are presented as their underlying securities on our balance sheet and consist of 64,531 shares of Series A Preferred Stock and 96,797 shares of common stock which is included in the issued and outstanding shares.

 

 

 

 

 

 

 

 

 

 

 ONCOLOGIX TECH, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

Below is a table detailing the outstanding Series A Convertible Preferred Stock shares outstanding during the last two fiscal years:

 

 

				Preferred				Number of								Weighted Avg.
				Shares				Common Shares				Proceeds if				Per Common Sh.
				Outstanding				Convertible				Converted				Exercise Price
Outstanding, August 31, 2013				129,062				64,531			$	25,812			$	0.40
Expired/Retired				—				—				—			$	—
Converted				—				—				—			$	0.40
Issued				—				—				—			$	—
Outstanding, August 31, 2014				129,062				64,531			$	25,812			$	0.40
Expired/Retired				—				—				—			$	0.40
Converted				—				—				—			$	—
Issued				—				—				—			$	—
Outstanding, February 28, 2015				129,062				64,531			$	25,812			$	0.40

 

Series D Convertible Preferred Stock

 

In March 2013, our Board of Directors authorized up to 60,000 shares of Series D Convertible Preferred Stock. Each share of Series D Convertible stock has a par value of $0.001 and is convertible into 1,000 shares of common stock beginning after March 1, 2014. Each share of Series D Convertible Preferred Stock has a stated liquidation value of $80.25. Each shares of Series D Convertible Preferred Stock shall have voting rights as stated below:

 

March 1, 2013 to February 28, 2014, 400 votes per share;

March 1, 2014 to February 28, 2015, 800 votes per share;

March 1, 2015 to February 28, 2016, 1,200 votes per share;

March 1, 2016 to February 28, 2017, 1,600 votes per share;

March 1, 2017 and after, 2,000 votes per share;

 

On March 22, 2013, the Company issued 58,564 shares of Series D Convertible Preferred Stock to acquire 100% of the outstanding common stock of Dotolo. On March 22, 2013 the issued shares had a fair market value of $585,640 based on the fair market value of the underlying common stock shares.

 

On January 3, 2014, as payment for $150,000 of banking fees associated with our $4 million line of credit, we issued 20,000 shares of Series D Convertible Preferred Stock.

 

 

 

 

 

 

 

 

 

 

 

 

 ONCOLOGIX TECH, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

Below is a table detailing the outstanding Series D Convertible Preferred Stock shares outstanding during the last two fiscal years:

 

				Preferred				Number of								Weighted Avg.
				Shares				Common Shares				Proceeds if				Per Common Sh.
				Outstanding				Convertible				Converted				Exercise Price
Outstanding, August 31, 2013				58,564				58,564,000			$	—			$	80.25
Expired/Retired				—				—				—			$	—
Converted				—				—				—			$	—
Issued				20,000				20,000,000				—			$	80.25
Outstanding, August 31, 2014				78,564				78,564,000			$	—			$	—
Expired/Retired				—				—				—			$	—
Converted				—				—				—			$	—
Issued				—				—				—			$	—
Outstanding, February 28, 2015				78,564				78,564,000			$	—			$	80.25

 

SUBSCRIBED COMMON STOCK:

 

Below is a table detailing the Common Stock Subscribed during the last two fiscal years:

 

For the period Ended February 28, 2015
							Shares		Amount
Shares issuable upon conversion of convertible notes payable							4,500,000		$             20,572
Total subscribed stock							4,500,000		$             20,572
For the period Ended August 31, 2014
							Shares		Amount
Shares issuable upon conversion of convertible notes payable							1,058,201		$               5,000
Total subscribed stock							1,058,201		$               5,000

 

COMMON STOCK:

 

On March 7, 2014, the Company increased its authorized shares of common stock to 750,000,000. The increase was approved by a majority of the Company’s shareholders on January 27, 2014.

 

 

 

 

 

 

 

 

 

 

 

 ONCOLOGIX TECH, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

Below are recent sales of unregistered securities:

 

Date	Securities		Underwriters/
Sold	Sold	Consideration	Purchasers *	Notes
9/12/2013	1,000,000	$                     -	Vendor	The Company issued 1,000,000 S-8 shares to a vendor for consulting work.  The Company recorded an expense of $11,500 upon the issuance of those shares.
9/12/2013	1,500,000	$             10,000	Accredited Investor	The Company sold 1,500,000 shares of common stock to an affiliated accredited investor at $0.00667 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act
10/3/2013	4,000,000	$                     -	Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $15,620 in principal and interest into 4,000,000 shares of common stock at $0.00391 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
12/3/2013	1,891,123	$                     -	Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $9,380 in principal and interest into 1,891,123 shares of common stock at $0.00496 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
1/3/2014	2,000,000	$                     -	Vendor	The company issued 2,000,000 shares of common stock as consideration for services.  The company recorded an expense of $22,000 in connection with this issuance.  These shares were exempt from registration under Section 4(2) of the Securities Act.
1/13/2014	3,076,923	$                     -	Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $20,000 in principal and interest into 3,076,923 shares of common stock at $0.0065 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
1/14/2014	1,000,000	$                     -	Vendor	The company issued 1,000,000 shares of common stock as consideration for services.  The company recorded an expense of $19,000 in connection with this issuance.  These shares were exempt from registration under Section 4(2) of the Securities Act.
1/15/2014	117,436	$                     -	Accredited Investor	Additional reset shares were issued to a non-affiliated accredited investor in connection with the prior conversion of $9,380 in principal and interest into 117,436 shares of common stock.  These shares were exempt from registration under Section 4(2) of the Securities Act.
1/21/2014	3,500,000	$                     -	Accredited Investor	The company issued 3,500,000 shares of common stock as consideration for  fees.  The company recorded an expense of $45,500 in connection with this issuance.  These shares were exempt from registration under Section 4(2) of the Securities Act.
1/21/2014	1,500,000	$                     -	Accredited Investor	The company issued 1,500,000 shares of common stock as consideration for  fees.  The company recorded an expense of $30,000 in connection with this issuance.  These shares were exempt from registration under Section 4(2) of the Securities Act.
1/31/2014	3,472,222	$                     -	Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $25,000 in principal and interest into 3,472,222 shares of common stock at $0.0072 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
2/7/2014	1,000,000	$                     -	Accredited Investor	The company issued 1,000,000 shares of common stock as consideration for  fees.  The company recorded an expense of $9,000 in connection with this issuance.  These shares were exempt from registration under Section 4(2) of the Securities Act.

 

ONCOLOGIX TECH, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

2/24/2014	4,615,385	$                     -	Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $30,000 in principal and interest into 4,615,385 shares of common stock at $0.0065 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
3/12/2014	4,615,385	$                     -	Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $30,000 in principal and interest into 4,615,385 shares of common stock at $0.0065 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
4/7/2014	2,936,314	$                     -	Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $19,086 in principal and interest into 2,936,314 shares of common stock at $0.0065 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
4/7/2014	5,383,007	$                     -	Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $17,764 in principal and interest into 5,383,007 shares of common stock at $0.0033 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
6/2/2014	5,000,000	$                     -	Accredited Investor	The company issued 5,000,000 shares of common stock as consideration for services.  The company recorded an expense of $30,000 in connection with this issuance.  These shares were exempt from registration under Section 4(2) of the Securities Act.
6/25/2014	5,138,746	$                     -	Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $25,000 in principal and interest into 5,138,746 shares of common stock at $0.004865 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
7/14/2014	2,500,000		Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $11,000 in principal and interest into 2,500,000 shares of common stock at $0.0044 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
7/24/2014	1,149,425		Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $5,000 in principal and interest into 1,149,425 shares of common stock at $0.00435 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
8/1/2014	3,416,764		Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $8,456 in principal and interest into 3,416,764 shares of common stock at $0.002475 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
8/26/2014	1,200,000	$                     -	Accredited Investor	The Company sold 1,200,000 shares of common stock to an affiliated accredited investor at $0.00833 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act
9/10/2014	1,058,201	$                     -	Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $5,000 in principal and interest into 1,058,201 shares of common stock at $0.004725 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
10/28/2014	1,473,622	$                     -	Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $5,000 in principal and interest into 1,473,622 shares of common stock at $0.003383 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
11/3/2014	1,508,296	$                     -	Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $5,000 in principal and interest into 1,508,296 shares of common stock at $0.003315 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.

 

 

 ONCOLOGIX TECH, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

11/10/2014	1,724,733	$                     -	Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $5,000 in principal and interest into 1,724,733 shares of common stock at $0.002899 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
11/12/2014	6,000,000		Vendor	The company issued 6,000,000 shares of common stock as consideration for services.  The company recorded an expense of $24,000 in connection with this issuance.  These shares were exempt from registration under Section 4(2) of the Securities Act.
11/24/2014	2,380,952	$                     -	Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $7,000 in principal and interest into 2,380,952 shares of common stock at $0.00294 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
11/28/2014	3,577,818	$                     -	Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $10,000 in principal and interest into 3,577,818 shares of common stock at $0.002795 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
11/28/2014	2,126,602	$                     -	Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $4,219 in principal and interest into 2,126,602 shares of common stock at $0.001984 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
12/9/2014	6,384,676		Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $16,000 in principal and interest into 6,384,676 shares of common stock at $0.002506 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
12/9/2014	3,026,555		Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $5,317 in principal and interest into 3,026,555 shares of common stock at $0.001922 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
12/18/2014	3,286,650		Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $5,298 in principal and interest into 3,286,650 shares of common stock at $0.001612 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
12/24/2014	2,632,040		Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $4,243 in principal and interest into 2,632,040 shares of common stock at $0.001612 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
1/12/2015	(55,349)			Share adjustment by transfer agent
1/13/2015	2,863,750		Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $4,261 in principal and interest into 2,863,750 shares of common stock at $0.001488 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
1/16/2015	876,244		Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $2,084 in principal and interest into 876,244 shares of common stock at $0.00238 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
1/20/2015	2,866,108		Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $4,265 in principal and interest into 2,866,108 shares of common stock at $0.001488 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
1/23/2015	8,398,588		Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $12,497 in principal and interest into 8,398,588 shares of common stock at $0.001488 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.

 

 ONCOLOGIX TECH, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

1/30/2015	5,000,000		Accredited Investor	The company issued 5,000,000 shares of common stock as consideration for services.  The company recorded an expense of $38,500 in connection with this issuance.  These shares were exempt from registration under Section 4(2) of the Securities Act.
2/3/2015	7,365,772		Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $10,960 in principal and interest into 7,365,772 shares of common stock at $0.001488 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
2/5/2015	2,807,190		Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $4,177 in principal and interest into 2,807,190 shares of common stock at $0.001488 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
2/10/2015	9,697,060		Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $18,699 in principal and interest into 9,697,060 shares of common stock at $0.0019283 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
2/27/2015	4,500,000		Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $20,572 in principal and interest into 4,500,000 shares of common stock at $0.004572 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
	139,512,238	$             10,000
*  There were no underwriters associated with any of our Sales of Unregistered Securities.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ONCOLOGIX TECH, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

NON-CONTROLLING INTEREST

 

On February 27, 2009, in connection with the Technology Agreement we entered into with Institut für Umwelttechnologien GmbH, a German Company (“IUT”) whereunder the parties have agreed that the Company’s marketing rights have been transferred to its subsidiary, Oncologix Corporation and have issued IUTM 10% of the equity ownership of that subsidiary. As of February 27, 2009, the value of the non-controlling interest was $212. It was determined at August 31, 2010 the value of the investment in IUTM was impaired. Accordingly, we recorded an impairment loss in the amount of $3,186 for the year ended August 31, 2010. As of February 28, 2015, as a result of the disposition of Oncologix Corporation, we do not have to recognize a non-controlling interest.

 

WARRANTS:

 

The following table summarizes warrant activity in fiscal 2015 and 2014:

 

				Weighted Avg.
		Number		Exercise Price
Outstanding, August 31, 2013		7,000,000		0.012
Expired/Retired		-		-
Exercised		-		-
Issued		23,583,333		0.011
Outstanding, August 31, 2014		30,583,333		-
Expired/Retired		-		-
Exercised		-		-
Issued		-		-
Outstanding, February 28, 2015		30,583,333		0.011

 

The fair value of warrants granted is estimated using the Black-Scholes option pricing model. This model utilizes the following factors to calculate the fair value of options granted: (i) annual dividend yield, (ii) weighted-average expected life, (iii) risk-free interest rate and (iv) expected volatility. The warrants were expensed and accounted for under ASC 718.

 

The fair value for these warrants was estimated as of the date of grant using a Black-Scholes option-pricing model with the following assumptions:

 

				For the Six Months Ended February 28,
				2015		2014
Volatility				-		124% - 384%
Risk free rate				0.00%		0.25%
Expected dividends				None		None
Expected term (in years)				-		2 to 3 years

 

 

 

 

 

 

 

 ONCOLOGIX TECH, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

Details relative to the 30,583,333 immediately exercisable outstanding warrants at February 28, 2015 are as follows:

 

				Weighted
				Average
Date of		Number		Exercise		Remaining		Expiration
Grant		of Shares		Price		Exercise Life		Date
Outstanding, August 31, 2013		7,000,000
First quarter of fiscal 2014		4,500,000		$     0.012		3 years		November 2017
Second quarter of fiscal 2014		5,500,000		$     0.017		2 to 3 years		Dec 2015 to Dec 2016
Third quarter of fiscal 2014		9,583,333		$     0.012		5 years		May 2019
Fourth quarter of fiscal 2014		4,000,000		$     0.007		2 years		August 2016
Outstanding, August 31, 2014		30,583,333
First quarter of fiscal 2015		-		$          -		-
Second quarter of fiscal 2015		-
Outstanding, February 28, 2015		30,583,333

 

On August 1, 2013, the company issued 1,000,000 four-year cashless warrants as additional consideration for the acquisition of Amian Angels. These warrants expire four years after the date of issuance and have an exercise price of $.015.

 

On August 5, 2013, the company issued 6,000,000 three-year cashless warrants, to a related party, as finder’s fees related to a working capital investment. These warrants expire three years after the date of issuance and have an exercise price of $.012.

 

On September 11, 2013, the company issued 1,500,000 three-year cashless warrants, to a related party, as finder’s fees related to a working capital investment. These warrants expire three years after the date of issuance and have an exercise price of $.015.

 

On November 8, 2013, the company issued 3,000,000 three-year cashless warrants, to an unrelated party, as finder’s fees related to a working capital investment. These warrants expire three years after the date of issuance and have an exercise price of $.01.

 

On December 3, 2014, the company issued 1,000,000 three-year cashless warrants, to an unrelated party, as finder’s fees related to a working capital investment. These warrants expire three years after the date of issuance and have an exercise price of $.025.

 

On December 20, 2014, the company issued 3,000,000 two-year cashless warrants, to an unrelated party, as finder’s fees related to a working capital investment. These warrants expire two years after the date of issuance and have an exercise price of $.016.

 

On February 7, 2014, the company issued 1,000,000 two-year cashless warrants, to an unrelated party, as finder’s fees related to a working capital investment. These warrants expire two years after the date of issuance and have an exercise price of $.015.

 

On May 21, 2014, the company issued 9,583,333 five-year cashless warrants, to an unrelated party, as finder’s fees related to a working capital investment. These warrants expire five years after the date of issuance and have an exercise price of $.009.

 

On August 15, 2014, the company issued 4,000,000 two-year warrants, to an unrelated party, as finder’s fees related to a working capital investment. These warrants expire two years after the date of issuance and have an exercise price of $.0065.

 

 

 ONCOLOGIX TECH, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

The remaining contractual life of warrants outstanding as of February 28, 2015 was 2.55 years. Warrants for the purchase of 30,583,333 and 17,000,000 shares were immediately exercisable on February 28, 2015 and 2014, respectively with a weighted-average price of $0.011 and $0.014 per share, respectively.

 

STOCK OPTIONS:

 

ASC 718 requires the estimation of forfeitures when recognizing compensation expense and that this estimate of forfeitures be adjusted over the requisite service period should actual forfeitures differ from such estimates. Changes in estimated forfeitures are recognized through a cumulative adjustment, which is recognized in the period of change and which impacts the amount of unamortized compensation expense to be recognized in future periods.

 

ASC 718 requires that modification of the terms or conditions of an equity award is to be treated as an exchange of the original award for a new award. This event is accounted for as if the entity repurchases the original instrument by issuing a new instrument of equal or greater value, incurring additional compensation cost for any incremental value.

 

2000 Stock Incentive Plan

 

The Company is authorized to issue up to 7,500,000 shares of common stock under its 2000 Stock Incentive Plan. Shares may be issued as incentive stock options, non-statutory stock options, deferred shares or restricted shares. Options are granted at the fair market value of the common stock on the date of the grant and have terms of up to ten years. The 2000 Stock Incentive Plan also provides for an annual grant of options to members of our Board of Directors. For fiscal years ended August 31, 2008 through 2012, our Board of Directors elected to waive the grant of these annual options.

 

On December 13, 2013, the Board of directors authorized the granting of 6,100,000 options to its three officers; 2,400,000 options to Wayne Erwin, our CEO; 2,100,000 options to Michael Kramarz, our CFO; and 1,600,000 options to Vickie Hart, President of Amian Angels. These options vest immediately and have an exercise price $.015, the closing stock price on December 13, 2013.

 

On December 20, 2014, the Company issued 20,000 options as part of its annual grant program to its two directors. These options vest in 1 year and have an exercise price of $.016, the closing stock price on December 20, 2013.

 

We have 473,253 shares of common stock available for future issuance under our 2000 Stock Incentive Plan as of February 28, 2015. This plan has been approved by our shareholders.

 

During the three and six months years ended February 28, 2015 and 2014, we granted 6,120,000 and nil options from the stock incentive plan described above, respectively. During the three and six months ended February 28, 2015 and 2014, nil and nil options were exercised, respectively. During the three months ended February 28, 2015 and 2014, nil and 81,250 options expired, respectively. During the six months ended February 28, 2015 and 2014, nil and 150,835 options expired, respectively. During the three and six months ended February 28, 2015 and 2014, $0 and $91,163 was expensed as stock based compensation, respectively.

 

 

 

 

 

 

 

 

 

 

 

 

 ONCOLOGIX TECH, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

												Weighted Average
				Number of				Option Price				Exercise Price
				Options Granted				Per Share				Per Share
Outstanding, August 31, 2013				217,085			$	0.12 - 2.00			$	1.120
Granted				6,120,000			$	0.015 - 0.016			$	0.020
Exercised				—				—			$	—
Cancelled				(163,335	)		$	1.04 - 2.00			$	1.380
Outstanding, August 31, 2014				6,173,750			$	0.12 - 2.00			$	0.016
Granted				—			$	—			$	—
Exercised				—				—			$	—
Cancelled				—			$	0.00			$	—
Outstanding, February 28, 2015				6,173,750			$	0.12 - 2.00			$	0.016

 

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between our closing stock price on the last trading day of the first quarter of fiscal 2015 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on February 28, 2015.

 

Expected volatility is based primarily on historical volatility. Historical volatility is computed using weekly average pricing observations for an applicable historic period. We believe this method produces an estimate that is representative of our expectations of the future volatility over the expected term of our options. We currently have no reason to believe future volatility over the expected life of these options is likely to differ materially from historical volatility. The weighted-average expected life is based upon share option exercises, pre and post vesting terminations and share option term expirations. The risk-free interest rate is based on the U.S. treasury security rate estimated for the expected life of the options at the date of grant.

 

The remaining contractual life of options outstanding as of February 28, 2015 was 8.74years. Options for the purchase of 6,173,750 exercisable on February 28, 2015 with a weighted-average price of $0.016 and $0.016 per share, respectively.

 

		Options				Options
		Outstanding				Exercisable
Number of options			6,173,750				6,173,750
Aggregate intrinsic value of options		$	—			$	-
Weighted average remaining contractual term (years)			8.74				8.74
Weighted average exercise price		$	0.016			$	0.016

 

2013 Omnibus Incentive Plan

 

The Company is authorized to issue up to 10,000,000 shares of common stock under its 2013 Omnibus Incentive Plan to employees, officers, directors and consultants. The issuance adoption of this plan has been approved by the Company’s Board of Directors on May 20, 2013 and was approved by our shareholders on January 27, 2014. Any options are granted at the fair market value of the common stock on the date of the grant and have terms of up to ten years. Under the 2013 Omnibus Incentive Plan the price of the granted common stock options are equal to the fair market value of such shares on the date of grant.

 

On September 11, 2013, we issued 1,000,000 S-8 shares to a consultant in payment for investor relations work for the Company. On January 3, 2014, we issued 1,000,000 S-8 shares to a consultant in payment for services to be provided for the Company. On November 15, 2014 we issued 1,000,000 S-8 shares to a consultant in payment for investor relations work for the Company. We have 7,000,000 shares of common stock available for future issuance under our 2013 Omnibus Incentive Plan as of February 28, 2015.

 

 

 

 

ONCOLOGIX TECH, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

	Number of Securities				Number of Securities
	To Be Issued Upon		Weighted Average		Remaining Available
	Exercise of Outstanding		Exercise Price of		For Future
	Options		Outstanding Options		Issuance Under Plans
Equity compensation plans
approved by stockholders	-		$0.00		7,000,000
Equity compensation plans
not approved by stockholders	-		$0.00		-
TOTAL	-		$0.00		7,000,000

 

NOTE 13 - RELATED PARTY TRANSACTIONS AND CONTINGENCIES:

 

FINANCING WITH RELATED PARTIES:

 

During the three and six months ended February 28, 2015 and 2014, the Company entered into financing agreements with related parties of the Company. Please see Note 11 – Notes Payable for further descriptions of these transactions.

 

NOTE 14 – BUSINESS SEGMENTS

 

We identify our reportable segments based on our management structure, financial data and market. We have identified three business segments: Personal Care Services and Medical Device Products and Medical Products & Technologies

 

Our Personal Care Service segment consists of the services of Angels of Mercy, Inc. This segment provides non-medical, Personal Care Attendant (PCA) services, Supervised Independent Living (SIL), Long-Term Senior Care, and other approved programs performed by a trained caregiver that will meet the health service needs of beneficiaries whose disabilities preclude the performance of certain independent living skills related to the activities of daily living (ADL).

 

Our Medical Device Manufacturing segment consists of the products of Dotolo Research Corporation. This segment designs, develops, manufactures and distributes the Toxygen hardware system with disposable speculums and medical grade tubing.

 

Our Medical Products and Technologies segment will consist of Advanced Medical Products and Technologies, Esteemcare Inc. and Affordable Medical Inventory Solutions Inc. and future acquisitions.

 

The accounting policies of the segments are the same as those described, or referred to, in Note 2 - Summary of Significant Accounting Policies. Assets and related depreciation expense in the column labeled “Corporate Overhead” pertain to capital assets maintained at the corporate level. Segment loss from operations in the “Corporate Overhead” column contains corporate related expenses not allocable to the operating segments. Intercompany transactions between operating segments were immaterial in all periods presented.

 

 

 

 

 

 

 

 

 

 

ONCOLOGIX TECH, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

Below are the segment assets as of February 28, 2015.

 

As of February 28, 2015
		Personal Care				Medical Device				Med. Products				Corporate
		Segment				Segment				Segment				Overhead				Totals
		(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents		$	1,666			$	43			$	12,134			$	15,098			$	28,941
Accounts receivable (net)			211,516				—			$	698,812				—				910,328
Inventory			—				31,271			$	106,165				—				137,436
Prepaid expenses and other current assets			—				—			$	2,946				10,050				12,996
Prepaid commissions and finders' fees			—				—				171				—				171
Total current assets			213,182				31,314				820,228				25,148				1,089,872
Property and equipment (net)			18,118				16,109				3,024				619				37,870
Deposits and other assets			2,683				32,303				9,866				13,282				58,134
Goodwill			564,075				1,217,704				622,610				—				2,404,389
Patents, registrations (net of amortization)			—				21,434				—				—				21,434
Total assets		$	798,058			$	1,318,864			$	1,455,728			$	39,049			$	3,611,699

 

Below are the segment assets as of August 31, 2014.

 

As of August 31, 2014
		Personal Care				Medical Device				Med. Products				Corporate
		Segment				Segment				Segment				Overhead				Totals
ASSETS
Current Assets:
Cash and cash equivalents		$	9,336			$	(110	)		$	1,000			$	7,278			$	17,504
Accounts receivable (net)			213,399				—				—				—				213,399
Inventory			—				31,271				—				—				31,271
Prepaid expenses and other current assets			—				—				—				9,307				9,307
Prepaid commissions			—				—				—				3,152				3,152
Total current assets			222,735				31,161				1,000				19,737				274,633
Property and equipment (net)			21,287				17,893				—				787				39,967
Deposits and other assets			2,082				12,500				—				—				14,582
Goodwill			564,075				1,217,704				—				—				1,781,779
Patents, registrations (net of amortization)			—				24,497				—				—				24,497
Total assets		$	810,179			$	1,303,755			$	1,000			$	20,524			$	2,135,458

 

 

 

 ONCOLOGIX TECH, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

Below are the statements of operations for the reporting periods presented.

 

		For the Three Months Ended February 28, 2015
			Personal Care				Medical Device				Medical Products				Corporate
			Segment				Segment				Segment				Overhead				Totals
Revenues		$	850,949			$	—			$	376,928			$	—			$	1,227,877
Cost of revenues			683,673				11,192				209,432				—				904,297
Gross profit			167,276				(11,192	)			167,496				—				323,580
Operating expenses:
General and administrative			111,933				10,673				161,684				175,536				459,826
Research and development Expense			—				—				—				—				—
Depreciation and amortization			2,014				2,423				167				84				4,688
Total operating expenses			113,947				13,096				161,851				175,620				464,514
Loss from operations			53,329				(24,288	)			5,645				(175,620	)			(140,934	)
Other income (expense):
Interest and finance charges			(108,883	)			(1,750	)			(122	)			(270,508	)			(381,263	)
Interest and finance charges - related parties			—				(268	)			—				—				(268	)
Other income (expenses)			(2,370	)			(330	)			—				(204	)			(2,904	)
Total other income (expense)			(111,253	)			(2,348	)			(122	)			(270,712	)			(384,435	)
Loss from continuing operations		$	(57,924	)		$	(26,636	)		$	5,523			$	(446,332	)		$	(525,369	)

 

		For the Three Months Ended February 28, 2014
			Personal Care				Medical Device				Medical Products				Corporate
			Segment				Segment				Segment				Overhead				Totals
Revenues		$	983,758			$	—			$	—			$	—			$	983,758
Cost of revenues			736,764				11,832				—				—				748,596
Gross profit			246,994				(11,832	)			—				—				235,162
Operating expenses:
General and administrative			221,328				11,347				—				249,708				482,383
Depreciation and amortization			3,534				2,422				—				84				6,040
Total operating expenses			224,862				13,769				—				249,792				488,423
Loss from operations			22,132				(25,601	)			—				(249,792	)			(253,261	)
Other income (expense):
Interest and finance charges			(28,047	)			(2,826	)			—				(342,230	)			(373,103	)
Interest and finance charges - related parties			—				(774	)			—				—				(774	)
Loss on conversion of notes payable - related parties			—				—				—				(57,197	)			(57,197	)
Loss on disposal of assets			—				—				—				—				—
Other income (expenses)			—				(497	)			—				—				(497	)
Total other income (expense)			(28,047	)			(4,097	)			—				(399,427	)			(431,571	)
Loss from continuing operations		$	(5,915	)		$	(29,698	)		$	—			$	(649,219	)		$	(684,832	)

 

ONCOLOGIX TECH, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

Below are the statements of operations for the reporting periods presented.

 

		For the Six Months Ended February 28, 2015
			Personal Care				Medical Device				Medical Products				Corporate
			Segment				Segment				Segment				Overhead				Totals
Revenues		$	1,760,921			$	—			$	628,830			$	—			$	2,389,751
Cost of revenues			1,431,357				22,126				311,844				—				1,765,327
Gross profit			329,564				(22,126	)			316,986				—				624,424
Operating expenses:
General and administrative			235,715				21,623				264,901				391,515				913,754
Research and development expense			—				10,000				—				—				10,000
Depreciation and amortization			4,027				4,846				292				168				9,333
Total operating expenses			239,742				36,469				265,193				391,683				933,087
Loss from operations			89,822				(58,595	)			51,793				(391,683	)			(308,663	)
Other income (expense):
Interest and finance charges			(162,661	)			(4,000	)			(772	)			(484,673	)			(652,106	)
Interest and finance charges - related parties			—				(1,051	)			—				—				(1,051	)
Other income (expenses)			(2,765	)			(3,869	)			—				(204	)			(6,838	)
Total other income (expense)			(165,426	)			(8,920	)			(772	)			(484,877	)			(659,995	)
Loss from operations		$	(75,604	)		$	(67,515	)		$	51,021			$	(876,560	)		$	(968,658	)

 

		For the Six Months Ended February 28, 2014
			Personal Care				Medical Device				Medical Products				Corporate
			Segment				Segment				Segment				Overhead				Totals
Revenues		$	1,708,391			$	—			$	—			$	—			$	1,708,391
Cost of revenues			1,219,153				23,999				—				—				1,243,152
Gross profit			489,238				(23,999	)			—				—				465,239
Operating expenses:
General and administrative			376,302				23,244				—				360,198				759,744
Depreciation and amortization			6,480				4,845				—				168				11,493
Total operating expenses			382,782				28,089				—				360,366				771,237
Loss from operations			106,456				(52,088	)			—				(360,366	)			(305,998	)
Other income (expense):
Interest and finance charges			(91,051	)			(6,310	)			—				(369,998	)			(467,359	)
Interest and finance charges - related parties			—				(1,556	)			—				(15,708	)			(17,264	)
Loss on conversion of notes payable - related parties			—				—				—				(93,577	)			(93,577	)
Loss on disposal of assets			(28,748	)			—				—				—				(28,748	)
Other income (expenses)			—				(497	)			—				—				(497	)
Total other income (expense)			(119,799	)			(8,363	)			—				(479,283	)			(607,445	)
Loss from operations		$	(13,343	)		$	(60,451	)		$	—			$	(839,649	)		$	(913,443	)

 

 

ONCOLOGIX TECH, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 15 - JOINT VENTURE

 

Institut für Umwelttechnologien GmbH (IUT)

 

In February 2009, we entered into a Technology Agreement with Institut für Umwelttechnologien GmbH, a German Company (“IUT”). On September 23, 2010, the Company signed a Memorandum of Understanding with Institut für Umwelttechnologien GmbH and IUT Medical GMBH confirming certain understandings among the parties with respect to their future relationships and business activities as originally contemplated in their Technology Agreement of February 27, 2009, which was reaffirmed. On November 1, 2013, with the disposal of the Company’s subsidiary Oncologix Corporation, the company also ended its relationship with IUT and IUTM.

 

NOTE 16 - RETIREMENT PLAN

 

Currently, the Company does not have a retirement plan in place.

 

NOTE 17 - RECENT ACCOUNTING PRONOUNCEMENTS

 

 

We have evaluated all Accounting Standards Updates through the date the financial statements were issued and do not believe any will have a material impact on our financial condition or results of operations.

 

NEW ACCOUNTING STANDARD

 

In July 2012, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2012-02 “Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment” (“ASU 2012-02”). ASU 2012-02 permits entities to first assess qualitative factors to determine whether it is more likely than not that the fair value of an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment test. Under the amendments in ASU 2012-02, an entity is not required to calculate the fair value of an indefinite-lived intangible asset unless it determines that it is more likely than not that the fair value of the asset is less than its carrying amount. An entity also will have the option to bypass the qualitative assessment for any indefinite-lived intangible asset in any period and proceed directly to performing the quantitative impairment test. ASU 2012-02 is effective for interim and annual indefinite-lived intangible asset impairment tests performed for fiscal years beginning on or after September 15, 2012, with early adoption permitted. The Company’s adoption of ASU 2012-02 is not expected to have an impact on its consolidated financial statements.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 ONCOLOGIX TECH, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 18 – STATEMENT OF CASH FLOWS

 

For the six months ended February 28, 2015, these supplemental non-cash investing and financing activities are summarized as follows:

		Amount
On November 15, 2014, the Company issued 1,000,000 S-8 shares of common stock in payment for a investor relations consulting contract.		4,000
On November 15, 2014, the Company issued 5,000,000 shares of common stock in payment for  investor relations consulting contract.		20,000
On November 17, 2014, the Company issued a $25,000 convertible promissory note to a non-related party.  We recorded a beneficial conversion feature the in amount of $10,545 related to that transaction.		10,545
On November 17, 2014, the Company issued a $25,000 convertible promissory note to a non-related party.  We recorded a beneficial conversion feature the in amount of $10,545 related to that transaction.		10,545
On January 22, 2015, the Company issued a $35,000 convertible promissory note to a non-related party.  We recorded a beneficial conversion feature the in amount of $35,000 related to that transaction.		35,000
On January 30, 2015, the Company issued 5,000,000 shares of common stock in payment for  investor relations consulting contract.		38,500
On January 30, 2015, the Company issued a $50,000 convertible promissory note to a non-related party.  We recorded a beneficial conversion feature the in amount of $50,000 related to that transaction.		50,000
On February 5 2015, the Company issued a $50,000 convertible promissory note to a non-related party.  We recorded a beneficial conversion feature the in amount of $50,000 related to that transaction.		50,000
On February 4, 2015, the Company issued a $35,000 convertible promissory note to a non-related party.  We recorded a beneficial conversion feature the in amount of $35,000 related to that transaction.		35,000
On February 12, 2015, the Company issued a $75,000 convertible promissory note to a non-related party.  We recorded a beneficial conversion feature the in amount of $75,000 related to that transaction.		75,000
On February 25, 2015, the Company issued a $30,000 convertible promissory note to a non-related party.  We recorded a beneficial conversion feature the in amount of $30,000 related to that transaction.		30,000
Total non-cash transactions from investing and financing activities.	$	358,590

 

 

 

 

 

 ONCOLOGIX TECH, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

For the six months ended February 28, 2014, these supplemental non-cash investing and financing activities are summarized as follows:

 

On September 11, 2013, the Company issued 1,500,000 warrants to an affiliated party for additional compensation related to an operating capital investment.  The value of these warrants was expensed as interest and finance charges.	$	15,656
On September 11, 2013, the Company issued 1,000,000 S-8 shares of common stock in payment for a investor relations consulting contract.		11,500
On October 2, 2013, the Company issued a $25,000 convertible promissory note to a non-related party.  We recorded a beneficial conversion feature the in amount of $25,000 related to that transaction.		25,000
On October 3, 2013, the Company recorded a loss on conversion of a convertible promissory note in the amount of $15,620.		15,620
On November 5, 2013 and November 8, 2013, the Company issued a total of 3,000,000 warrants to a non-related party as additional compensation for an operating capital investment.		14,805
On December 3, 2013, the Company recorded a loss on conversion of a convertible promissory note in the amount of $12,069.		12,069
On December 3, 2013, the Company recorded a loss on conversion of a convertible promissory note in the amount of $9,720.		9,720
On December 3, 2013, the Company issued a total of 1,000,000 warrants as additional compensation.		5,992
On December 20, 2013, the Company issued a total of 3,000,000 warrants as additional compensation.		7,746
On January 3, 2014, the Company issued 2,000,000 shares of common stock in payment for a services contract.		22,000
On January 13, 2014, the Company recorded a loss on conversion of a convertible promissory note in the amount of $26,154.		26,154
On January 14, 2014, the Company issued 1,000,000 shares of common stock as partial compensation for a investor relations contract.		19,000
On January 21, 2014, the Company issued 3,500,000 shares of common stock as additional compensation for finder’s fees.		45,500
On January 21, 2014, the Company issued 1,500,000 shares of common stock as additional compensation for finder’s fees.		30,000
On January 31, 2014, the Company recorded a loss on conversion of a convertible promissory note in the amount of $16,667.		16,667
On February 7, 2014, the Company issued 1,000,000 shares of common stock as additional compensation for finder’s fees.		9,000

 

ONCOLOGIX TECH, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

For the six months ended February 28, 2014, these supplemental non-cash investing and financing activities are summarized as follows (continued):

 

On February 7, 2014, the Company issued 3,000,000 shares of common stock as additional compensation for finder’s fees.		5,151
On February 24, 2014, the Company recorded a loss on conversion of a convertible promissory note in the amount of $2,308.		2,308
Total non-cash transactions from investing and financing activities.	$	293,888

 

 

NOTE 19 - EMPLOYMENT AGREEMENTS

 

On March 22, 2013, Wayne Erwin, the Company’s Chief Executive Officer, signed a three year employment agreement. The agreement provides for an annual salary of $120,000 along with a monthly auto allowance and health insurance allowance totaling $1,250. The annual salary was increased to $150,000 per year beginning March 2015. Annual increases are to be approved by the Company’s Board of Directors or Compensation Committee. During the six months ended February 28, 2015 and 2014, $60,000 and $60,000 was expensed as salary, respectively.

 

On October 1, 2013, Michael Kramarz, the Company’s Chief Financial Officer, signed a three year employment agreement. The agreement provides for an annual salary of $80,000 along with a monthly auto allowance and health insurance allowance totaling $500. The annual salary was increased to $120,000 beginning on March 1, 2015.Annual increases are to be approved by the Company’s Board of Directors or Compensation Committee. During the six months ended February 28, 2015 and 2014, $46,333 and 40,225 was expensed as salary, respectively.

 

On August 1, 2013, Vickie Hart, the President of Amian Angels Inc., signed a three year employment agreement. The agreement provides for an annual salary of $52,000 along with a monthly health insurance allowance totaling $400. The annual salary was increased to $85,000 beginning on March 1, 2015. Annual increases are to be approved by the Company’s Board of Directors or Compensation Committee. During the six months ended February 28, 2015 and 2014, $27,300 and $32,015 was expensed as salary, respectively.

 

On July 16, 2014, Harold Halman, the President of our Medical Products Segment, signed a three year employment agreement. The agreement provides for an annual salary of $85,000, along with a monthly auto allowance and health insurance allowance totaling $1,300 plus bonus allowances. Annual increases are to be approved by the Company’s Board of Directors or Compensation Committee. During the six months ended February 28, 2015 and 2014, $42,500 and $0 was expensed as salary, respectively.

 

 

NOTE 20 – COMMITMENTS AND CONTINGENCIES

 

On June 6, 2014, the Company and its subsidiary Dotolo entered into a services agreement with E & R Industries to provide the Company with retooling and redesign of Dotolo’s disposable products. The contract calls for periodic cash payments totaling $60,000 along with the issuance of 5,000,000 common stock shares upon meeting certain milestones.

 

On June 6, 2014, the Company and its subsidiary Dotolo entered into a services agreement with Schmitt Engineering to provide the Company with engineering redesign services of its Toxygen hardware system. The contract calls for periodic cash payments totaling $30,000 along with the issuance of 3,000,000 common stock shares upon meeting certain milestones.

 

 

 

 

 ONCOLOGIX TECH, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 21 - SUBSEQUENT EVENTS

 

During March and April 2014, holders of convertible notes converted $41,022 in accrued principal and interest into 11,652,330 shares of our common stock.

 

On March 5, 2015 we issued a convertible promissory note in the principal amount of $36,750. This promissory note bears interest at a rate of 8% per annum and is due on March 5, 2016. The note is convertible at a 38% discount of the average of the three lowest closing bid prices immediately during the 15 days preceding the date of conversion. At no time may the holder of the note convert the note into shares exceeding 4.99% of the Company’s then outstanding common stock shares.

 

On March 9, 2015 the Company entered into a securities transfer agreement with an accredited investor as well as a current convertible note holder. The agreement called for the accredited investor to purchase $30,000 of the current convertible note holder note to repay our former CEO. The Company issued to the accredited investor a convertible promissory note bearing interest at 8% and convertible at a 38% discount of the average of the three lowest closing bid prices immediately during the 20 days preceding the date of conversion. At no time may the holder of the note convert the note into shares exceeding 4.99% of the Company’s then outstanding common stock shares.

 

On March 9, 2015, the Company entered into a 4 months investor relations contract. The Company issued 2,000,000 shares of its Common Stock as payment for this contract.

 

On March 11, 2015 we issued a convertible promissory note in the principal amount of $88,000. This promissory note bears interest at a rate of 12% per annum and is due on September 11, 2015. The note is convertible at a 38% discount of the lowest closing price immediately during the 20 days preceding the date of conversion. The Company also paid an OID in the amount of $6,000. At no time may the holder of the note convert the note into shares exceeding 4.99% of the Company’s then outstanding common stock shares.

 

On March 25, 2015 we issued a convertible promissory note in the principal amount of $50,000. This promissory note bears interest at a rate of 10% per annum and is due on September 25, 2015. The note is convertible at a 38% discount of the average of the three lowest closing bid prices immediately during the 20 days preceding the date of conversion. At no time may the holder of the note convert the note into shares exceeding 4.99% of the Company’s then outstanding common stock shares.

 

On March 30, 2015 we issued a convertible promissory note in the principal amount of $32,000. This promissory note bears interest at a rate of 8% per annum and is due on March 30, 2016. The note is convertible at a 38% discount of the average of the three lowest closing bid prices immediately during the 15 days preceding the date of conversion. At no time may the holder of the note convert the note into shares exceeding 4.99% of the Company’s then outstanding common stock shares.

 

On April 7, 2015 we issued a convertible promissory note in the principal amount of $27,500. This promissory note bears interest at a rate of 12% per annum and is due on April 7, 2017. The note is convertible at a 38% discount of the average of the three lowest closing bid prices immediately during the 20 days preceding the date of conversion. The Company also paid an OID in the amount of $6,000. At no time may the holder of the note convert the note into shares exceeding 4.99% of the Company’s then outstanding common stock shares.

 

On April 8, 2015 we issued a convertible promissory note in the principal amount of $58,000. The company received net proceeds of $50,000 with the balance of the note going for finders fees and processing fees. This promissory note bears interest at a rate of 8% per annum and is due on April 8, 2016. The note is convertible at a 38% discount of the average of the three lowest closing bid prices immediately during the 20 days preceding the date of conversion. At no time may the holder of the note convert the note into shares exceeding 4.99% of the Company’s then outstanding common stock shares.

 

 

 

 ONCOLOGIX TECH, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 .

ITEM 2. Management’s Discussion And Analysis of Financial Condition and Results of Operation

THIS QUARTERLY REPORT ON FORM 10-QSB CONTAINS CERTAIN STATEMENTS WHICH ARE FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE SAFE HARBOR PROVISIONS OF SECTION 27A OF THE SECURITIES ACT OF 1993, AS AMENDED, AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. THESE STATEMENTS RELATE TO FUTURE EVENTS, INCLUDING THE FUTURE FINANCIAL PERFORMANCE OF ONCOLOGIX. IN SOME CASES, YOU CAN IDENTIFY FORWARD-LOOKING STATEMENTS BY TERMINOLOGY SUCH AS “MAY,” “WILL,” “SHOULD,” “EXPECTS,” “PLANS,” “ANTICIPATES,” “BELIEVES,” “ESTIMATES,” “PREDICTS,” “POTENTIAL,” OR “CONTINUE” OR THE NEGATIVE OF SUCH TERMS AND OTHER COMPARABLE TERMINOLOGY. THESE STATEMENTS ONLY REFLECT MANAGEMENT’S EXPECTATIONS AND ESTIMATES AS OF THE DATE OF THIS REPORT. ACTUAL EVENTS OR RESULTS MAY DIFFER MATERIALLY FROM THESE EXPECTATIONS. IN EVALUATING THOSE STATEMENTS, YOU SHOULD SPECIFICALLY CONSIDER VARIOUS FACTORS, INCLUDING THE RISKS INCLUDED IN THE REPORTS FILED BY ONCOLOGIX WITH THE SEC. THESE FACTORS MAY CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM ANY FORWARD-LOOKING STATEMENTS. ONCOLOGIX IS NOT UNDERTAKING ANY OBLIGATION TO UPDATE ANY FORWARD-LOOKING STATEMENTS CONTAINED IN THIS REPORT.

This report should be read in conjunction with our Annual report on Form 10-K for the fiscal year ended August 31, 2014.

OVERVIEW

 

Oncologix Tech, Inc. is a diversified medical holding company with operating segments in medical device, healthcare services and medical products and technologies. We operate and manufacture Class II medical device products, provides Personal Healthcare Services and provides Home Medical Inventory (HME) and Durable Medical Inventory (DME) sales in licensed markets. For its clients, Oncologix provides FDA approved medical devices, State licensed healthcare services and medical product sales. For its shareholders, Oncologix operates profitable business divisions that build, maintain and nourish shareholder value. The Company’s corporate mission is to be the best small cap medical device and healthcare services holding company in North America.

 

We were originally formed in 1995 and in 2000 we changed our name to "BestNet Communications Corp." At that time we provided worldwide long distance telephone communication and teleconferencing services to commercial and residential consumers through the internet, which we disposed of in 2007 due to lack of profitability. In July 2006 we changed our business model to medical device products.  In July 2006 we acquired JDA Medical Technologies, Inc. ("JDA") and merged this business into Oncologix Corporation, our wholly owned subsidiary.  On January 22, 2007, we changed our name to Oncologix Tech, Inc., to reflect this new business model. Our business at this time was the development of a medical device for brachytherapy (radiation therapy), called the “Oncosphere” (or “Oncosphere System”), for the advanced medical treatment of soft tissue cancers. Due to a lack of funding, we suspended these development activities on December 31, 2007. On November 1, 2013, due to the development of the brachytherapy device being several years away, indication that the product could not be marketed and no guarantee of FDA approvals, it was determined that continued financial support of this product by Oncologix Corporation would cost the Company substantial capital beyond its means and the Company’s management and Board of Directors disposed of Oncologix Corporation and its Brachytherapy medical device subsidiary. Furthermore, as part of the disposal, the Company was relieved of over $90,000 in debt.   

 

On March 22, 2013, we acquired all the outstanding stock of Dotolo Research Corporation (“Dotolo”), a FDA Registered, Class II, medical device manufacturer with 25 years of product sales in the hydro-colonic irrigation, bowel preparation market. Dotolo Research Corporation began operations in 1989 and sells hardware and disposable products to a customer base of over 900+ customers both domestically and internationally.  The Company currently operates in a limited, but competitive environment in hydro-colonic irrigation, of which there are only four (4) companies approved by the FDA to manufacture a Class II medical device for colonic-hydro therapy.  Since the acquisition, we have not had significant revenues from sales of our products, including sales to medical facilities due to a lack of operating capital needed to procure raw material inventory to currently fill customers’ orders.

 

 

 

On August 1, 2013, we acquired the outstanding stock of Angels of Mercy, Inc. (“AOM”). Angels provides non-medical, Personal Care Attendant (PCA) services, Supervised Independent Living (SIL), Long-Term Senior Care, and other approved health service programs performed by a trained caregiver that will meet the health service needs of beneficiaries whose disabilities preclude the performance of certain independent living skills related to the activities of daily living (ADL).

 

On December 10, 2013, Angels of Mercy, Inc. acquired the assets of Amian Health Services LLC and Amian Health Services of Alex LLC, herein after referred to as “Amian”.  Amian delivers health-care care-services who provide routine health and personal care support with Activities of Daily Living (ADL) to clients with physical impairments or disabilities in private homes, nursing care facilities, hospice care settings, and other residential settings. Amian holds both PCA-Medicaid Waiver Provider and Residential Rehabilitation/Supervised Independent Living (SIL), and personal care services for Veterans with licenses issued by the Division of Licensing and Certification of the Department of Social Services, Veterans Administration Social Services and the Louisiana Department of Health and Hospitals.  All administrative personnel of Amian have been merged into to gain operating synergies. This company changed its name to Amian Angels, Inc. (“Amian Angels”) in August 2014.

 

On July 21, 2014 we formed Advanced Medical Products and Technologies Inc. to enter into the Durable Medical and Home Medical Inventory markets. We anticipate acquiring active companies in this area to develop our Medical Products and Technologies Segment.

 

On September 25, 2014, we acquired the outstanding stock of Esteemcare, Inc. and its wholly owned subsidiary Affordable Medical Inventory Solutions, Inc. Esteemcare, Inc is a Durable and Home Medical inventory and supply distributor for respiratory therapy and is Accredited by the “Joint Commission on Healthcare Organizations”.

 

Esteemcare targets patients with sleep obstructive disorders or related chronic illnesses who are insured by Medicare, Medicaid, third-party insurers, or have the ability to pay for our products from their own private resources. Sleep apnea is a serious sleep disorder that occurs when a person's breathing is interrupted during sleep. People with untreated sleep apnea stop breathing repeatedly during their sleep, sometimes hundreds of times. This means the brain -- and the rest of the body -- may not get enough oxygen.

 

RECENT ACQUISITIONS AND DIVESTURES

 

In furthering our strategy to be the best small cap medical device and healthcare holding company, we acquired Dotolo Research Corporation (“DOTOLO”) on March 22, 2013, Angels of Mercy, Inc. (“AOM”) on August 1, 2013, Amian Health Services on December 10, 2013, and Esteemcare Inc. on September 25, 2014. These acquisitions are further described in Note 4 – Acquisition Activities, in the Notes to Unaudited Condensed Consolidated Financial Statements.

 

RESULTS OF OPERATIONS

 

Comparison of the three and six months ended February 28, 2015 (‘fiscal 2015”) and 2014 (‘fiscal 2014”)

 

Revenue

 

Revenues increased to $1,227,877 for the three months ended February 28, 2015, from $983,758 from the comparable period in fiscal 2014. The increases were primarily due to the acquisitions of Amian Health Services in December 2013 and Esteemcare in September 2014.

 

Revenues increased to $2,389,751 for the six months ended February 28, 2015, from $1,708,391 from the comparable period in fiscal 2014. The increases were primarily due to the acquisitions of Amian Health Services in December 2013 and Esteemcare in September 2014.

 

Cost of Revenues

 

Cost of revenues increased to $904,297 for the three months ended February 28, 2015, from $748,596 during the comparable period in fiscal 2014. Cost of revenues for Dotolo were $11,192 for the three months ended February 28, 2015 and consist primarily of direct labor and minor purchases of materials for our new product development. Cost of revenues for Amian Angels were $683,673 for the three months ended February 28, 2015 and consist primarily of wages paid to personal care service employees who directly provide the PCA and SIL services. Cost of revenues for Esteemcare were $200,555 for the three months ended February 28, 2015 and consist primarily of purchases of leased and sold inventory.

 

Cost of revenues increased to $1,765,327 for the six months ended February 28, 2015, from $1,243,152 during the comparable period in fiscal 2014. Cost of revenues for Dotolo were $22,126 for the six months ended February 28, 2015 and consist primarily of direct labor and minor purchases of materials for our new product development. Cost of revenues for Amian Angels were $1,431,357 for the six months ended February 28, 2015 and consist primarily of wages paid to personal care service employees who directly provide the PCA and SIL services. Cost of revenues for Esteemcare were $295,885 for the six months ended February 28, 2015 and consist primarily of purchases of leased and sold inventory.

 

Research and Development Expense

 

Research and development expense increased to $10,000 for the three and six months ended February 28, 2015, from $0 during the comparable period in fiscal 2014. Research and development expenses consisted of costs for the development of dies and molds for Dotolo’s Toxygen product.

 

General and Administrative Expense

 

General and administrative expenses primarily include officer and administrative salaries, office rent, utilities, legal and accounting services, insurance, public filing costs as well as other incidental overhead costs.

General and administrative expense decreased to $459,826 for the three months ended February 28, 2015, from $482,383 from the comparable period in fiscal 2014. The primary reason for the decrease was the expensing of stock options issued in fiscal 2014 in the amount of $91,163 as well as the implementation of our cost cutting measures.

General and administrative expense increased to $913,754 for the six months ended February 28, 2015, from $759,744 from the comparable period in fiscal 2014. The primary reason for the increase was the additional general and administrative expenses associated with the acquisition of Esteemcare Inc.

Depreciation and Amortization

 

Depreciation and amortization decreased to $4,688 for the three months ended February 28, 2015, from $6,040 during fiscal 2014. The decrease in depreciation and amortization was the result of the disposal of assets as a result of moving our Amian Angels office.

 

Depreciation and amortization decreased to $9,333 for the six months ended February 28, 2015, from $11,493 during fiscal 2014. The decrease in depreciation and amortization was the result of the disposal of assets as a result of moving our Amian Angels office.

 

Interest Income

 

We had no interest income in fiscal 2015 or fiscal 2014.

 

Interest and Finance Charges

 

Interest and finance charges increased to $381,263 for the three months ended February 28, 2015 from $373,103, from fiscal 2014. The increase is primarily attributable to the second tranche taken from TCA and additional merchant loan.

 

Interest and finance charges increased to $652,106 for the six months ended February 28, 2015 from $467,359, from fiscal 2014. The increase is primarily attributable to the second tranche taken from TCA and additional merchant loan.

 

Interest and finance charges – related parties decreased to $268 for the three months ended February 28, 2015, from $774, from the comparable period in fiscal 2014. The decrease is primarily attributable to the repayment of a related party loan during fiscal 2015.

 

Interest and finance charges – related parties decreased to $1,051 for the six months ended February 28, 2015, from $17,264, from the comparable period in fiscal 2014. The decrease is primarily attributable to the repayment of a related party loan during fiscal 2015 as well as reclassifying related party debt as non-related party.

 

 

 A summary of interest and finance charges is as follows:

 

		For the Three Months Ended								For the Six Months Ended
		February 28,				February 28,				February 28,				February 28,
		2015				2014				2015				2014
Interest expense on non-convertible notes		$	211,293			$	47,018			$	335,562			$	94,651
Interest expense on non-convertible notes - related parties			267				1,558				1,051				1,609
Interest expense on convertible notes payable			11,266				17,021				24,408				23,124
Interest expense on convertible notes payable - related parties			—				—				—				—
Amortization of note payable discounts			107,379				6,165				177,838				10,206
Amortization of note payable discounts - related parties			—				—				—				—
Other interest and finance charges			51,326				302,115				114,298				355,033
Total interest and finance charges		$	381,531			$	373,877			$	653,157			$	484,623

 

Loss on Conversion of Notes Payable

 

Loss on conversion of notes payable decreased to $0 for the three months ended February 28, 2015, from $57,197, for the comparable period in fiscal 2014. The decrease was due to conversions of only substansive convertible notes in fiscal 2015.

 

Loss on conversion of notes payable decreased to $0 for the six months ended February 28, 2015, from $93,577, for the comparable period in fiscal 2014. The decrease was due to conversions of only substansive convertible notes in fiscal 2015.

LIQUIDITY AND CAPITAL RESOURCES

Since March 2013, we have acquired five companies. While these acquisitions greatly increased the value of our Company, we are not fully cash flow positive. Cash flows from the issuances of promissory notes and common stock for cash are not sufficient to meet our working capital requirements for the foreseeable future or provide for expansion opportunities. We incurred $968,659 and $913,443 in net losses, and we used $362,869 and $366,753 in cash for operations for the six months ended February 28, 2015 and 2014, respectively. Investing activities used $562,150 and $67,232 for the six months ended February 28, 2015 and 2014, respectively, due primarily to our acquisition of Esteemcare. Net cash generated from financing activities for the six months ended February 28, 2015 and 2014 was $936,456 and $479,779, respectively. As of February 28, 2015, we had a cash balance of $28,941. These conditions raise substantial doubt about our ability to continue as a going concern.

 

We anticipate that we will require approximately $1,000,000 to operate through August 31, 2015. Approximately $500,000 will be required to fund corporate overhead including debt servicing with the balance to invest into raw material inventory, manufacturing and new product development at Dotolo. Additional funding will allow us to meet our current sales demands and expenses of Dotolo, Amian Angels and Oncologix, while keeping our public filings current.

 

As of February 28, 2015, we had total outstanding short-term and long-term debt and liabilities totaling $4,745,462 net of discounts. Please see Note 11 for further information.

 

CRITICAL ACCOUNTING POLICIES

 

“The preparation of financial statements in accordance with accounting standards generally accepted in the United States requires management to make estimates and assumptions that affect both the recorded values of assets and liabilities at the date of the financial statements and the revenues recognized and expenses incurred during the reporting period. Our estimates and assumptions affect our recognition of income taxes, the carrying value of our long-lived assets and our provision for certain contingencies. We evaluate the reasonableness of these estimates and assumptions continually based on a combination of historical information and other information that comes to our attention that may vary our outlook for the future. Actual results may differ from these estimates under different assumptions.

We suggest that the Summary of Significant Accounting Policies, as described in Note 2 of our Unaudited Condensed Consolidated Financial Statements, be read in conjunction with this Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

CODE OF ETHICS

Our Board of Directors has adopted a code of ethics that applies to our principal executive officer, principal financial officer and to other persons performing similar functions. The code of ethics is designed to deter wrongdoing and to promote honest and ethical conduct, full, fair, accurate, timely and understandable disclosure, compliance with applicable laws, rules and regulations, prompt internal reporting of violations of the code and accountability for adherence to the code. We will provide a copy of our code of ethics, without charge, to any person upon receipt of written request for such delivered to our corporate headquarters. All such requests should be send to Oncologix Tech, Inc., P.O. Box 8832, Grand Rapids, MI 49518-8832.

OFF-BALANCE SHEET ARRANGEMENTS

 

We do not maintain off-balance sheet arrangements nor do we participate in any non-exchange traded contracts requiring fair value accounting treatment. The Company has no off-balance sheet arrangements as of February 28, 2015 and 2014.

NEW ACCOUNTING STANDARDS

We have evaluated all Accounting Standards Updates through the date the financial statements were issued and do not believe any will have a material impact. For details of new accounting standards, please refer to Note 17 of our Consolidated Financial Statements.

 

ITEM 3. Quantitative and Qualitative Disclosure about Market Risk

 

We are a smaller reporting company, as defined in Rule 12b-2 promulgated under the Securities Exchange Act of 1934, and accordingly, we are not required to provide the information required by this Item.

 

ITEM 4. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

Based on an evaluation under the supervision and with the participation of the Company’s management, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, due to the material weaknesses disclosed in its Annual Report on Form 10-K for the year ended August 31, 2014 that remain open, the Company’s disclosure controls and procedures were not effective as of February 28, 2015. As a result of this conclusion, the financial statements for the periods covered by this report were prepared with particular attention to the material weaknesses previously disclosed. Accordingly, management believes that the condensed consolidated financial statements included in the Quarterly Report present fairly, in all material respects, the Company’s financial condition, results of operations and cash flows as of and for the periods presented.

 

Changes in Internal Control Over Financial Reporting

 

There were no changes in our internal controls over financial reporting that occurred during the three months ended February 28, 2015 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

 

 

 

 

 

 

 

  

 PART II – OTHER INFORMATION

 

ITEM 1. Legal Proceedings

None

 

ITEM 1A. Risk Factors

RISK FACTORS

 

Those interested in investing in the Company should carefully consider the following Risk Factors pertaining to Oncologix Tech as well as the risks and uncertainties that are described in the Company's most recent Annual and Quarterly Reports under the Securities Exchange Act of 1934. These Risk Factors are not all inclusive.

 

Going Concern Qualification.

 

Our Independent Accountants have expressed doubt about our ability to continue as a going concern. The ability to continue as a going concern is an issue raised as a result of the material operating losses incurred since inception, and its stockholders' deficit. We expect to continue to experience net operating losses. Our ability to continue as a going concern is subject to our ability to obtain necessary funding from outside sources, including obtaining additional funding from the sale of our securities or obtaining loans from various financial institutions where possible. The going concern increases the difficulty in meeting such goals.

 

Risk of Issued Series D Convertible Preferred Stock to Common Shareholders

 

In March 2013, our Board of Directors authorized up to 60,000 shares of Series D Convertible Preferred Stock. Each share of Series D Convertible stock has a par value of $0.001 and is convertible into 1,000 shares of common stock beginning after March 1, 2014. Each share of Series D Convertible Preferred Stock has a stated value of $80.25. Each shares of Series D Convertible Preferred Stock shall have voting rights as stated next: March 1, 2013 to February 28, 2014, 400 votes per share; March 1, 2014 to February 28, 2015, 800 votes per share; March 1, 2015 to February 28, 2016, 1,200 votes per share; March 1, 2016 to February 28, 2017, 1,600 votes per share; March 1, 2017 and after, 2,000 votes per share.

 

In the event of any liquidation, dissolution or winding-up of the Corporation, the Series D Preferred Stock then issued and outstanding shall be entitled to be paid out of the assets of the Corporation available for distribution to its shareholders in a position senior to the Corporation’s Common Stock shareholders. The effect of these senior securities could affect the value of our common stock.

 

Our internal control over financial reporting is not considered effective, our business and stock price could be adversely affected.

 

Section 404 of the Sarbanes-Oxley Act of 2002 requires us to evaluate the effectiveness of our internal control over financial reporting as of the end of each fiscal year, and to include a management report assessing the effectiveness of our internal control over financial reporting in our annual report on Form 10-K for that fiscal year. Our management, including our chief executive officer and chief financial officer, does not expect that our internal control over financial reporting will prevent all error and all fraud. As of August 31, 2013, the Company identified two material weaknesses: a) Oncologix lacks the necessary corporate accounting resources to maintain adequate segregation of duties; b) In addition, we have a lack of a functioning Audit Committee as we only have one independent director is not considered a Financial Expert within the meaning of Section 407 of the Sarbanes-Oxley Act. We may experience a loss of public confidence, which could have an adverse effect on our business and on the market price of our common stock due to our internal control being ineffective.

 

Financial Condition of Dotolo Research Corporation (“DRC”)

 

DRC has limited working capital with little cash on hand at February 28, 2015. Since January 31, 2013, DRC has incurred indebtedness of $50,000 to meet its working capital needs. These two notes bear interest at 18% per annum and require minimum, monthly interest payments of $750. Additional financing will be required to get DRC to cash flow break even.

 

 

Need for Additional Capital

 

We will need substantial funds for raw material inventory, complete the development of new product introductions, manufacturing, and the sales and marketing of our products at DRC. Consequently, we will seek to raise further capital through not only possible public and private offerings of equity and debt securities, but also collaborative arrangements, strategic alliances, and equity and debt financings from other sources. AOM operates with positive cash flow sufficient to service the business operations and debt payment requirements of the acquisition but will need additional funds to complete the audit of Angels as well as costs for other required SEC and other regulatory filings. We now estimate the need to raise at least $500,000 of additional funding for working capital and inventory procurement for DRC. Additionally, we estimate the need to raise at least $500,000 for overhead of Oncologix Tech, Inc and debt servicing. We may be unable to raise additional capital on commercially acceptable terms, if at all, and if we raise capital through additional equity financing, existing shareholders may have their ownership interests diluted. Our failure to be able to generate adequate funds from operations or from additional sources would harm our business.

 

Uncertainties Regarding Healthcare Reimbursement and Reform

 

Our ability to execute our strategy in the medical markets depends in part on the extent to which healthcare services and products are paid by governmental agencies, private health insurers and other organizations, such as health maintenance organizations, for the cost of such products and related treatments. Our business could be harmed if healthcare payers and providers implement cost-containment measures and governmental agencies implement measures that reduce payment to our customers for their use of our products.

 

Industry Intensely Competitive.

 

The medical device and health services industry is intensely competitive. While we maintain a market share in hardware and disposable products sales , there is no guarantee we can maintain that market share. We will compete with both public and private medical device and pharmaceutical companies that have a greater number of products on the market, have greater financial resources and have other competitive advantages. We cannot be certain that one or more of our competitors will not receive patent protection that dominates, blocks or adversely affects our product development or business; will benefit from significantly greater sales and marketing capabilities or will not develop products that are accepted more widely than ours.

 

Healthcare Service Industry Intensely Competitive.

 

The healthcare service industry is very competitive. We will compete with both public and private healthcare service companies that hold licenses within the State of Louisiana and directly compete with companies that may have greater financial resources and have other competitive advantages.

 

Intellectual Property Risk.

 

Our ability to obtain and maintain patent and other protection for our products will affect our success. The patent positions of medical device companies can be highly uncertain and involve complex legal and factual questions. Future patent rights, if granted, may not be upheld in a court of law if challenged. Our patent rights may not provide competitive advantages for our products and may be challenged, infringed upon or circumvented by our competitors. We cannot patent our products in all countries or afford to litigate every potential violation worldwide. Because of the large number of patent filings in medical device, our competitors may have filed applications or been issued patents and may obtain additional patents and proprietary rights relating to products or processes competitive with or similar to ours. We cannot be certain that U.S. or foreign patents do not exist or will not issue that would harm our ability to commercialize our products and product candidates.

 

Possible Failure to Comply with Government Regulations.

 

We, and any prospective contract manufacturers and suppliers are subject to extensive, complex, costly, and evolving governmental rules, regulations and restrictions administered by the FDA, by other federal and state agencies, and by governmental authorities in other countries. In the United States, our products are registered as a Class II device and cannot be marketed until they are approved for market by the FDA. Obtaining FDA market approval involves the submission, among other information, may require clinical studies on the product, and requires substantial time, effort and financial resources. The FDA, and other federal and state agencies, as well as equivalent agencies of other countries with whom we will export our products, will also perform pre-licensing inspections of our facility, if any, and our contract manufacturers' and suppliers'

facilities. Our failure or the failure of our contract manufacturers or suppliers to meet FDA or other agencies' requirements would delay or preclude our ability to sell our products potentially having an adverse material effect on our business. Even with FDA market approval, we, as well as our partners, contract manufacturers and suppliers, are subject to numerous FDA requirements covering, among other things, testing, manufacturing, quality control, labeling and continuing review of medical products, and to permit government inspection at all times. Failure to meet or comply with any rules, regulations, or restrictions of the FDA or other agencies could result in fines, unanticipated expenditures, product delays, non-approval or recall, interruption of production, and criminal prosecution.

 

Exposure to Product Liability Claims.

 

Our design, testing, development, manufacture, and marketing of products involve an inherent risk of exposure to product liability claims and related adverse publicity. Although we believe that our product liability insurance is adequate, additional insurance coverage is expensive and in the future we may be unable to obtain additional liability coverage on acceptable terms. If we are unable to obtain sufficient insurance at an acceptable cost or if a successful product liability claim is made against us, whether fully covered by insurance or not, our business could be harmed.

 

Reliance on Key Personnel

 

Our success will depend, to a great extent, upon the experience, abilities and continued services of our executive officers and key management personnel. If we lose the services of any of these officers or key personnel, our business could be harmed. Our success also will depend upon our ability to attract and retain other highly qualified Regulatory, Marketing, Sales, and manufacturing personnel and our ability to develop and maintain relationships with key individuals in the industry. Competition to attract qualified personnel and relationships is intense and we compete with other companies in our industry. We may not be able to continue to attract and retain qualified personnel.

 

Uncertainty as to our Ability to Initiate Operations and Manage Growth.

 

Our efforts to market our products will result in new and increased responsibilities for management personnel and will place a strain upon our management, financial systems, and resources. We may be required to continue to implement and to improve our management, operating and financial systems, procedures and controls on a timely basis and to expand, train, motivate and manage our employees. There can be no assurance that our personnel, systems, procedures, and controls will be adequate to support our future operations.

 

Healthcare Service Industry Intensely Competitive.

 

The healthcare service industry is very competitive. . We compete with both public and private healthcare service companies that hold licenses within the State of Louisiana and directly compete with companies that may have greater financial resources and have other competitive advantages.

 

Compliance with Government Regulations.

 

We, and all healthcare service companies are subject to extensive, and evolving governmental rules, regulations and restrictions administered by the Department of Health & Hospitals, the Bureau of Health Services Financing, by other federal and state agencies, and by governmental authorities.

 

Integration of Newly Acquired Businesses.

 

The Company may make strategic acquisitions in the future and cannot assure that it will be able to successfully integrate the operations of newly-acquired businesses into the Company's current operations. It is Management intent to consolidate various business functions to include Information Technology, Accounting, legal under a central core operation. The failure to integrate newly acquired businesses or the inability to make suitable strategic acquisitions in the future could have an adverse effect on the Company's business, results of operations and financial condition.

 

 

 

Attraction and Retention of Qualified Personnel

 

The Company is dependent on the efforts and abilities of its senior executive officers. While the Company believes that its senior management team has significant experience and depth, appropriate senior management succession plans are in place. The Company's future success also depends on its ability to identify, attract and retain additional qualified personnel.

 

Broker-Dealer Requirements May Affect Trading and Liquidity of Our Common Stock

 

Section 15(g) of the Securities Exchange Act of 1934, as amended, and Rule 15g-2 promulgated thereunder by the SEC require broker-dealers dealing in penny stocks to provide potential investors with a document disclosing the risks of penny stocks and to obtain a manually signed and dated written receipt of the document before effecting any transaction in a penny stock for the investor's account.

 

Potential investors in the Registrant's common stock are urged to obtain and read such disclosure carefully before purchasing any shares that are deemed to be "penny stock." Moreover, Rule 15g-9 requires broker-dealers in penny stocks to approve the account of any investor for transactions in such stocks before selling any penny stock to that investor. This procedure requires the broker-dealer to (i) obtain from the investor information concerning his or her financial situation, investment experience and investment objectives; (ii) reasonably determine, based on that information, that transactions in penny stocks are suitable for the investor and that the investor has sufficient knowledge and experience as to be reasonably capable of evaluating the risks of penny stock transactions; (iii) provide the investor with a written statement setting forth the basis on which the broker-dealer made the determination in (ii) above; and (iv) receive a signed and dated copy of such statement from the investor, confirming that it accurately reflects the investor's financial situation, investment experience and investment objectives. Compliance with these requirements may make it more difficult for holders of our common stock to resell their shares to third parties or to otherwise dispose of them in the market or otherwise.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

Date	Securities		Underwriters/
Sold	Sold	Consideration	Purchasers *	Notes
9/12/2013	1,000,000	$                     -	Vendor	The Company issued 1,000,000 S-8 shares to a vendor for consulting work.  The Company recorded an expense of $11,500 upon the issuance of those shares.
9/12/2013	1,500,000	$             10,000	Accredited Investor	The Company sold 1,500,000 shares of common stock to an affiliated accredited investor at $0.00667 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act
10/3/2013	4,000,000	$                     -	Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $15,620 in principal and interest into 4,000,000 shares of common stock at $0.00391 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
12/3/2013	1,891,123	$                     -	Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $9,380 in principal and interest into 1,891,123 shares of common stock at $0.00496 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
1/3/2014	2,000,000	$                     -	Vendor	The company issued 2,000,000 shares of common stock as consideration for services.  The company recorded an expense of $22,000 in connection with this issuance.  These shares were exempt from registration under Section 4(2) of the Securities Act.
1/13/2014	3,076,923	$                     -	Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $20,000 in principal and interest into 3,076,923 shares of common stock at $0.0065 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
1/14/2014	1,000,000	$                     -	Vendor	The company issued 1,000,000 shares of common stock as consideration for services.  The company recorded an expense of $19,000 in connection with this issuance.  These shares were exempt from registration under Section 4(2) of the Securities Act.
1/15/2014	117,436	$                     -	Accredited Investor	Additional reset shares were issued to a non-affiliated accredited investor in connection with the prior conversion of $9,380 in principal and interest into 117,436 shares of common stock.  These shares were exempt from registration under Section 4(2) of the Securities Act.
1/21/2014	3,500,000	$                     -	Accredited Investor	The company issued 3,500,000 shares of common stock as consideration for  fees.  The company recorded an expense of $45,500 in connection with this issuance.  These shares were exempt from registration under Section 4(2) of the Securities Act.
1/21/2014	1,500,000	$                     -	Accredited Investor	The company issued 1,500,000 shares of common stock as consideration for  fees.  The company recorded an expense of $30,000 in connection with this issuance.  These shares were exempt from registration under Section 4(2) of the Securities Act.
1/31/2014	3,472,222	$                     -	Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $25,000 in principal and interest into 3,472,222 shares of common stock at $0.0072 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.

 

 

 

 

 

 

 

2/7/2014	1,000,000	$                     -	Accredited Investor	The company issued 1,000,000 shares of common stock as consideration for  fees.  The company recorded an expense of $9,000 in connection with this issuance.  These shares were exempt from registration under Section 4(2) of the Securities Act.
2/24/2014	4,615,385	$                     -	Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $30,000 in principal and interest into 4,615,385 shares of common stock at $0.0065 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
3/12/2014	4,615,385	$                     -	Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $30,000 in principal and interest into 4,615,385 shares of common stock at $0.0065 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
4/7/2014	2,936,314	$                     -	Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $19,086 in principal and interest into 2,936,314 shares of common stock at $0.0065 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
4/7/2014	5,383,007	$                     -	Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $17,764 in principal and interest into 5,383,007 shares of common stock at $0.0033 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
6/2/2014	5,000,000	$                     -	Accredited Investor	The company issued 5,000,000 shares of common stock as consideration for services.  The company recorded an expense of $30,000 in connection with this issuance.  These shares were exempt from registration under Section 4(2) of the Securities Act.
6/25/2014	5,138,746	$                     -	Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $25,000 in principal and interest into 5,138,746 shares of common stock at $0.004865 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
7/14/2014	2,500,000		Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $11,000 in principal and interest into 2,500,000 shares of common stock at $0.0044 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
7/24/2014	1,149,425		Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $5,000 in principal and interest into 1,149,425 shares of common stock at $0.00435 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
8/1/2014	3,416,764		Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $8,456 in principal and interest into 3,416,764 shares of common stock at $0.002475 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
8/26/2014	1,200,000	$                     -	Accredited Investor	The Company sold 1,200,000 shares of common stock to an affiliated accredited investor at $0.00833 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act
9/10/2014	1,058,201	$                     -	Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $5,000 in principal and interest into 1,058,201 shares of common stock at $0.004725 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
10/28/2014	1,473,622	$                     -	Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $5,000 in principal and interest into 1,473,622 shares of common stock at $0.003383 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
11/3/2014	1,508,296	$                     -	Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $5,000 in principal and interest into 1,508,296 shares of common stock at $0.003315 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.

 

 

11/10/2014	1,724,733	$                     -	Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $5,000 in principal and interest into 1,724,733 shares of common stock at $0.002899 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
11/12/2014	6,000,000		Vendor	The company issued 6,000,000 shares of common stock as consideration for services.  The company recorded an expense of $24,000 in connection with this issuance.  These shares were exempt from registration under Section 4(2) of the Securities Act.
11/24/2014	2,380,952	$                     -	Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $7,000 in principal and interest into 2,380,952 shares of common stock at $0.00294 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
11/28/2014	3,577,818	$                     -	Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $10,000 in principal and interest into 3,577,818 shares of common stock at $0.002795 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
11/28/2014	2,126,602	$                     -	Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $4,219 in principal and interest into 2,126,602 shares of common stock at $0.001984 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
12/9/2014	6,384,676		Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $16,000 in principal and interest into 6,384,676 shares of common stock at $0.002506 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
12/9/2014	3,026,555		Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $5,317 in principal and interest into 3,026,555 shares of common stock at $0.001922 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
12/18/2014	3,286,650		Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $5,298 in principal and interest into 3,286,650 shares of common stock at $0.001612 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
12/24/2014	2,632,040		Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $4,243 in principal and interest into 2,632,040 shares of common stock at $0.001612 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
1/12/2015	(55,349)			Share adjustment by transfer agent
1/13/2015	2,863,750		Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $4,261 in principal and interest into 2,863,750 shares of common stock at $0.001488 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
1/16/2015	876,244		Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $2,084 in principal and interest into 876,244 shares of common stock at $0.00238 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
1/20/2015	2,866,108		Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $4,265 in principal and interest into 2,866,108 shares of common stock at $0.001488 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
1/23/2015	8,398,588		Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $12,497 in principal and interest into 8,398,588 shares of common stock at $0.001488 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.

 

 

 

1/30/2015	5,000,000		Accredited Investor	The company issued 5,000,000 shares of common stock as consideration for services.  The company recorded an expense of $38,500 in connection with this issuance.  These shares were exempt from registration under Section 4(2) of the Securities Act.
2/3/2015	7,365,772		Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $10,960 in principal and interest into 7,365,772 shares of common stock at $0.001488 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
2/5/2015	2,807,190		Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $4,177 in principal and interest into 2,807,190 shares of common stock at $0.001488 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
2/10/2015	9,697,060		Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $18,699 in principal and interest into 9,697,060 shares of common stock at $0.0019283 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
2/27/2015	4,500,000		Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $20,572 in principal and interest into 4,500,000 shares of common stock at $0.004572 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
3/11/2015	2,000,000		Accredited Investor	The company issued 2,000,000 shares of common stock as consideration for services.  The company recorded an expense of $15,600 in connection with this issuance.  These shares were exempt from registration under Section 4(2) of the Securities Act.
3/13/2015	2,472,032		Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $10,926 in principal and interest into 2,472,032 shares of common stock at $0.004572 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
2/27/2015	4,500,000		Accredited Investor	A non-affiliated accredited investor converted a promissory note in the amount of $16,554 in principal and interest into 4,500,000 shares of common stock at $0.004572 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
2/27/2015	10,000,000		Accredited Investor	A non-affiliated accredited investor exercised cashless warrants in the into 10,000,000 shares of common stock at $0.004572 per share.  These shares were exempt from registration under Section 4(2) of the Securities Act.
	158,484,270	$             10,000
*  There were no underwriters associated with any of our Sales of Unregistered Securities.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ITEM 3. Defaults Upon Senior Securities

None.

ITEM 4. Mine Safety Disclosures

Not applicable.

 

ITEM 5. Other Information

None.

 

ITEM 6. Exhibits

	Exhibits.		Description
	31.1		Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	31.2		Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	32.1		Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	32.2		Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SIGNATURES

 

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

 

 

Dated: April14, 2015	ONCOLOGIX TECH, INC.
	By: /s/ Roy Wayne Erwin
	Roy Wayne Erwin, President and Chief Executive Officer, Principal Executive Officer
	By: /s/ Michael A. Kramarz
	Michael A. Kramarz, Chief Financial Officer, Principal Financial Officer, Principal Accounting Officer

 

 

 

 

 

 

 

 

 

 

EXHIBIT 31.1

 

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Roy Wayne Erwin certify that:

(1)

I have reviewed this Quarterly Report on Form 10-Q of Oncologix Tech, Inc.;

(2)

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

(3)

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

(4)

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

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

(b)

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

(c)

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

(d)

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

(5)

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)

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

(b)

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

Dated: April 14, 2015

 

By: /s/ Roy Wayne Erwin

Roy Wayne Erwin

Principal Executive Officer, Chief Executive Officer and President

EXHIBIT 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Michael A. Kramarz, certify that:

(1)

I have reviewed this Quarterly Report on Form 10-Q of Oncologix Tech, Inc.;

(2)

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

(3)

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

(4)

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

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

(b)

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

(c)

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

(d)

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

(5)

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)

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

(b)

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

 

Dated: April 14, 2015

 

By: /s/ Michael A. Kramarz

Michael A. Kramarz

Principal Financial Officer, Principal Accounting Officer and Chief Financial Officer

Exhibit 32.1

 

 

ONCOLOGIX TECH, INC. AND SUBSIDIARIES

 

 

CERTIFICATION OF PRINCIPAL

EXECUTIVE OFFICER PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

 

In connection with the Annual Report of Oncologix Tech, Inc. (the “Company”) on Form 10-Q for the three months ended February 28, 2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I Roy Wayne Erwin, Chief Executive Officer and President of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:

 

(1)

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

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

 

 

 

/s/ Roy Wayne Erwin

Roy Wayne Erwin

Chief Executive Officer and President

April 14, 2015

Exhibit 32.2

 

ONCOLOGIX TECH, INC. AND SUBSIDIARIES

 

 

CERTIFICATION OF PRINCIPAL

FINANCIAL OFFICER PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

 

In connection with the Annual Report of Oncologix Tech, Inc. (the “Company”) on Form 10-Q for the three months ended February 28, 2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I Michael A. Kramarz, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:

 

(3)

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

(4)

The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

 

 

/s/ Michael A. Kramarz

Michael A. Kramarz

Chief Financial Officer

April 14, 2015