EXPLANATORY
NOTE
This
Amendment No. 1 on Form 10-Q/A (the “Amendment”) amends the quarterly report of
BBM Holdings, Inc. (the “Company”) on Form 10-Q for the quarterly period ended
December 31, 2008 as filed with the Securities and Exchange Commission on
January 12, 2009 (the “Original Filing”). This Amendment amends Item
2. Other than the change referred to above, all other information in the
Original Filing remains unchanged.
The
following amends and restates in its entirety Item 2. Management’s Discussion of
Financial Condition and Results of Operations.
Certain
statements contained in this report, including, without limitation, statements
containing the words “believes,” “anticipates,” “expects,” “intends,” and words
of similar import, constitute “forward-looking statements” as defined in the
Private Securities Litigation Reform Act of 1995 or by the Securities and
Exchange Commission in its rules, regulations and releases, regarding the
Company’s financial and business prospects. These forward-looking statements are
qualified in their entirety by these cautionary statements, which are being made
pursuant to the provisions of such Act and with the intention of obtaining the
benefits of the “safe harbor” provisions of such Act. The Company cautions
investors that any forward-looking statements it makes are not guarantees of
future performance and that actual results may differ materially from those in
the forward-looking statements. We assume no obligation to update any
forward-looking statements contained in this report, whether as a result of new
information, future events or otherwise. Any investment in our common stock
involves a high degree of risk. For a general discussion of some of
these risks in greater detail, see our “Risk Factors” in the Amendment No. 1 on
Form 10-K/A filed with the Securities and Exchange Commission on April 1,
2009 to the annual report of BBM Holdings, Inc. (the “Company”)
for the fiscal year ended September 30, 2008 (the “Form
10-K/A”).
Recent
Events
On March 19, 2009, the Company acquired
in a secured party sale all the patents, related intellectual property, clinical
data and other assets related to AVR 118 (soon to be renamed OHR 118) and its
topical counterpart AVR 123 (soon to be renamed OHR 123). OHR 118 is
in an ongoing Phase II trial for the treatment of cachexia and OHR 123 is in an
ongoing Phase I trial for wound healing. The Company also exercised its option
to acquire the new technology and early stage pharmaceutical compounds from Dr.
S. Z. Hirschman, who will join the Company as a consultant and Chief Scientific
Advisor.
History
Historically,
Broadband’s technology provided online connectivity to global traveling vessels
as well as international telephone service from the ship to worldwide
destinations. The system provided the connection that could also support
incremental revenue opportunities from the sales of additional communication and
entertainment services.
On March
30, 2007 (the "Effective
Date"), Prime Acquisition, Inc., a wholly-owned subsidiary of the
Registrant, merged with and into Broadband (the “Merger”), and the stockholders
of Broadband received Common Stock of the Registrant. As a result of the Merger,
Broadband is the surviving corporation and the Registrant's only wholly-owned
subsidiary and sole operating entity. Broadband is a telecommunications
engineering and service company offering turn key, always-on Internet access to
commercial shipping fleets. For purposes of accounting, Broadband is treated as
the accounting acquirer and as such these consolidated financial statements
contain present the operations of Broadband for all periods
presented.
In
connection with the Merger, the Articles of Incorporation of the Registrant were
amended on March 22, 2007, to (1) change its name to "BBM Holdings, Inc." and
(2) increase the total authorized capital stock of the Registrant to 60,000,000
shares, of which 50,000,000 shares were designated common stock, no par value,
and 10,000,000 shares were designated preferred stock, no par value, of which
1,454,090 shares of the Preferred Stock were designated Series A Preferred Stock
(the "Series A
Stock"). Prior to the Merger, the Registrant paid a dividend of one share
of Series A Stock per share of Common Stock outstanding. Each share of Series A
Stock represents the right to exchange such share for a pro rata share (among
the issued and outstanding Series A Stock) of whatever right, title and interest
is held by the Registrant in the Units consisting of 465,000 shares of common
stock of Lightspace, and warrants to purchase common stock of Lightspace (the
"Lightspace
Securities"), described in the Company’s Quarterly Report on Form 10-QSB
filed by the Registrant on November 16, 2006. As discussed above, this
distribution occurred on June 30, 2008 and, the shares of Series A Stock were
deemed canceled.
The
merger (reverse acquisition) described above has been accounted for as a
purchase business combination in which Broadband was the acquirer for accounting
purposes and BBM was the legal acquirer. No goodwill has been recognized since
BBM was a “shell company.” Accordingly, the accompanying consolidated
statements of operations include the results of operations and cash flows of
Broadband from October 1, 2006 through September 30, 2007 and the results of
operations and cash flows of the Registrant from March 30, 2007, the effective
date of the Merger, through September 30, 2008.
Discontinued
Operations and Divestment of Assets
On June
5, 2007, BBM Holdings announced that it ceased operations and reduced employment
to a small residual force. The Company committed to this action
following a meeting of the Board of Directors (the “Board”) on
May 31, 2007. The Company received notification of the cancellation
of two customer contracts on May 22, 2007 and May 28, 2007,
respectively. In addition, the Company’s largest customer announced
that it would suspend further installations of systems on its vessels for a
four-month period. The Company also received notification of
the cancellation of a third customer contract on June 1, 2007.
Based on
the cancellations and suspension of installations, the Board assessed that the
Company’s installation schedule was severely jeopardized and the ability to
raise additional required funds would be greatly impaired. The Board
directed management to cease operations immediately in order to conserve cash
and maximize the value of the Company.
On May
31, 2007, Mary Ellen Kramer and Zevi Kramer resigned as directors of the Company
effective as of such date. The resignations of Ms. Kramer and Mr.
Kramer were not related to any disagreement between them and the Company on any
matter relating to the Company’s operations, policies or
practices. Ms. Kramer continued to serve as the Principal Executive
Officer and Principal Financial Officer of the Company until November 1,
2007.
The
Company has negotiated with substantially all of its current vendors to obtain a
release of long-term obligations.
Once the
assets of Broadband are disposed of as discussed below, BBM Holdings Inc. will
essentially be a “shell company” in that it will not have any active business
operation or active business assets. Management of the Company through the Board
of Directors, on a time available basis, will continue to search for, review and
complete due diligence on various potential merger or acquisition proposals for
which management would deem that the company would be a suitable acquisition
candidate. To the date of this report, no such acquisition or merger proposal
has been identified.
On
October 16, 2007, BBM agreed to sell substantially all of its assets (primarily
intellectual property and technology) relating to broadband services to ships to
private investors for $460,000 pursuant to an asset purchase agreement (the
“Asset
Purchase Agreement”). The Company completed the transaction on November
1, 2007, after required stockholder approval under Utah corporate
law. In conjunction with the completion of the asset sale, BBM’s
major customer has agreed to release the Company of its obligation to pay
accrued commissions of $45,000 as well as agreeing to withdraw its claim of
$420,000.
Upon
closing of the asset sales, Mary Ellen Kramer resigned her position as President
of BBM Holdings, and Andrew Limpert, director since April 2002, was appointed
interim president.
Products
and Markets
After
giving effect to the purchase of pharmaceutical compounds described above, BBM
has become a biotech company. In addition to developing the
pharmaceutical compounds acquired to a point where they can be marketed,
management is also engaged on a best-effort, time available basis, in searching
out a potential merger and acquisition candidates that would yield additional
value to public shareholders in the entity. No warranty or assurance, however,
of future results can be made or is implied by these efforts.
The
Company will continue to incur ongoing operating losses, which are expected to
increase substantially after it funds development of the new pharmaceutical
compounds. In addition, losses will be incurred in paying ongoing reporting
expenses, including legal and accounting expenses, as necessary to maintain the
Company as a public entity, as well as ongoing costs, while searching for
additional merger and acquisition candidates.
Liquidity
and Sources of Capital
The
liquidity of the Company is extremely limited at the present time in terms of
its ability to pay for development of the new pharmaceutical compounds and
ongoing reporting and minimal operating expenses as previously described. In
addition, not all obligations of the Company have been settled and it is
possible other financial obligations of the Company may occur.
As of
March 31, 2009, BBM had cash of approximately $1,000 and security deposits of
$85,000. We had current liabilities of approximately $250,000. This
translates to a working capital deficit of about $164,000, which means that our
cash reserves are not adequate for the next 12 months. We do not have
any source of revenues as of September 30, 2008 or March 31, 2009 and expect to
rely on additional financing.
BBM has
no present avenues of financing and no present agreements to obtain interim
financing while continuing its search for a suitable merger or acquisition
candidate and arrangements. It will be necessary for BBM to seek private capital
through the sale of additional restricted stock or borrowing either from
principal shareholders or private parties. It does not appear probable that BBM
would be able to obtain financing from any commercial lending source, as it is
presently constituted.
As a
result of the foregoing, the future liquidity of the Company and funding sources
must be considered as tentative and very limited and pose a substantial risk
factor to the ongoing viability of BBM. At present, the Company has no known or
fixed means of alternative or subsequent financing. Our independent
accountants have qualified their audit report by expressing doubt about the
Company’s ability to continue as a “going concern.” See “Risk
Factors” in the Form 10-K/A.
PART
II – OTHER INFORMATION
Item
6. Exhibits
The
following is a complete list of exhibits filed with the Form
10-Q/A.
(a)
Exhibit Index:
Exhibit
No.
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(31)
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Certification
made pursuant to Section 302 of the Sarbanes Oxley Act of
2002.
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(32)
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Certification
made pursuant to Section 906 of the Sarbanes Oxley Act of
2002.
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Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.
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Dated: April
1, 2009
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By:
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/s/
Ira Greenstein, Chairman
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Ira
Greenstein, Chairman
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Dated:
April 1, 2009
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By:
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/s/
Andrew Limpert
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Andrew
Limpert, Chief Executive Officer and Chief Financial
Officer
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